Luokung Technology Corp Annual Report 2017

Plain-text annual report

20F 1 f20f2017_luokungtech.htm AMENDMENT NO. 1 TO FORM 20FUNITED STATESSECURITIES AND EXCHANGE COMMISSIONWASHINGTON, D.C. 20549FORM 20F☐ REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934OR☐ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934For the Fiscal year ended _____________OR☒ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934For the transition period from October 1, 2017 to December 31, 2017☐ SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934Date of event requiring this shell company report Commission file number: 00134738Luokung Technology Corp.(Exact name of Registrant as specified in its charter)Not applicable(Translation of Registrant’s name into English)British Virgin IslandsLAB 32, SOHO 3Q, No 9, Guanghua Road, Chaoyang District, BeijingPeople’s Republic of China, 100020(Jurisdiction of incorporation or organization)(Address of principal executive offices)Mr. Muqiao GengLAB32, SOHO 3Q, No 9, Guanghua Road, Chaoyang District, BeijingPeople’s Republic of China 100020Tel: (86) 1085866721(Name, telephone, Email and/or facsimile number and address of company contact person)Securities registered or to be registered pursuant to Section 12(b) of the Act:Title of each className of each exchange on which registeredOrdinary shares, par value $0.01 per shareNonePreferred shares, par value $0.01 per shareNoneSecurities registered or to be registered pursuant to Section 12(g) of the Act:none(Title of Class)Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act:none(Title of Class)Indicate the number of outstanding shares of each of the issuer’s classes of capital or common stock as of the close of the period covered by the transitionreport. 187,097,599 Ordinary Shares, including 186,383,224 Ordinary Shares represented by 714,375 American Depositary Shares, and 1,000,000 Preferred Sharesoutstanding as of September 20, 2018.Indicate by check mark if the registrant is a wellknown seasoned issuer, as defined in Rule 405 of the Securities Act. ☐ Yes ☒ NoIf this report is an annual or transition report, indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of theSecurities Exchange Act of 1934. ☐ Yes ☒ NoIndicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirementsfor the past 90 days. ☒ Yes ☐ NoIndicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File requiredto be submitted and posted pursuant to Rule 405 of Regulation ST (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that theregistrant was required to submit and post such files). ☒ Yes ☐ NoIndicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a nonaccelerated filer. See definition of “accelerated filer andlarge accelerated filer” in Rule 12b2 of the Exchange Act. (Check one):Large accelerated filer ☐ Accelerated filer ☐ Nonaccelerated filer ☒Indicate by check mark which basis of accounting the registrant has used to prepare the financial statements included in this filing.U.S. GAAP ☒International Financial Reporting Standards as issuedby the International Accounting Standards Board ☐Other ☐If “Other” has been checked in response to the previous question, indicate by check mark which financial statement item the registrant has elected tofollow. Item 17 ☐ Item 18 ☐If this is an transition report, indicate by check mark whether the registrant is a shell company (as defined in Rule 12b2 of the ExchangeAct). ☐ Yes ☒ NoExplanatory NoteLuokung Technology Corp. (the “Company”) is filing this transition report on Form 20F (“Transition Report”) in connection with the completion of theexchange of certain of its assets for substantially all of the assets of C Media Limited (“C Media”) pursuant to that Asset Exchange Agreement, dated January 25,2018 (the “Original AEA”), as supplemented by the Addendum to Asset Exchange Agreement, dated October 3, 2018 (the “Addendum” and together with theOriginal AEA, the “AEA”). Following the consummation of the AEA, on October 4, 2018, the Company changed its fiscal year end from September 30 to the fiscalyear end used by C Media, December 31. This Transition Report covers the threemonth period from Octorber 1, 2017 to December 31, 2017, and the fiscal yearsdescribed herein.In this transition report:●References to the “Company”, “we”, “our” and “us” are to Luokung Technology Corp. and its consolidated subsidiaries and variable interestentity, except as the context otherwise requires;●This transition report on Form 20F covers the threemonth period from October 1, 2017 through December 31, 2017 (the “Transition Period”) andreflects our financial results thereof. Prior to this transition report on Form 20F, our two most recent annual reports on Form 20F cover the fiscalyears ended September 30, 2017 and September 30, 2016, respectively, and reflect financial results for the respective twelvemonth periods fromOctober 1 to September 30. Unless otherwise noted, all references to years are to the calendar year from January 1 to December 31 and referencesto our fiscal year or years are to the fiscal year or years which, prior to the Transition Period, ended September 30, while from and after theTransition Period, ended December 31;●References to an “ADS” are to an American Depositary Share, each of which represents one of our Ordinary Shares with a par value of $.01 pershare.Special Note Regarding Forwardlooking StatementsThis transition report contains forwardlooking statements that involve risks and uncertainties. These statements involve known and unknown risks,uncertainties and other factors that may cause our actual results, performance or achievements to be materially different from those expressed or implied by theforwardlooking statements.You can identify these forwardlooking statements by words or phrases such as “may,” “will,” “expect,” “anticipate,” “aim,” “estimate,” “intend,” “plan,”“believe,” “likely to” or other similar expressions. We have based these forwardlooking statements largely on our current expectations and projections about futureevents and financial trends that we believe may affect our financial condition, results of operations, business strategy and financial needs. You should not placeundue reliance on these forwardlooking statements, which apply only as of the date of this transition report. These forwardlooking statements include:●our future business development, results of operations and financial condition;●expected changes in our net revenues and certain cost or expense items;●our ability to attract and retain customers; and●trends and competition in the enterprise mobile software application market.You should read this transition report thoroughly with the understanding that our actual future results may be materially different from, and/or worse, thanwhat we expect. We qualify all of our forwardlooking statements by these cautionary statements. Other sections of this transition report include additional factorswhich could adversely impact our business and financial performance. Moreover, we operate in an evolving environment. New risk factors and uncertainties emergefrom time to time and it is not possible for our management to predict all risk factors and uncertainties, nor can we assess the impact of all factors on our business orthe extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forwardlooking statements.This transition report also contains estimates, projections and statistical data related to the market for the provision of WiFi and mobile applications inChina. This market data, including data from IDC, a leading provider of market data and intelligence, speaks as of the date it was published and includes projectionsthat are based on a number of assumptions and are not representations of fact. The market for the provision of WiFi and mobile applications in China may not growat the rates projected by the market data, or at all. The failure of the market to grow at the projected rates may materially and adversely affect our business and themarket price of our ADSs. In addition, the rapidly changing nature of the market for the provision of WiFi and mobile applications subjects any projections orestimates relating to the growth prospects or future condition of our market to significant uncertainties. If any one or more of the assumptions underlying the marketdata proves to be incorrect, actual results may differ from the projections based on these assumptions.You should not rely upon forwardlooking statements as predictions of future events. We undertake no obligation to update or revise any forwardlookingstatements, whether as a result of new information, future events or otherwise.TABLE OF CONTENTSPart IItem 1.Identity of Directors, Senior Management and Advisers.1Item 2.Offer Statistics and Expected Timetable.1Item 3.Key Information.1A.Selected Financial Data.1B.Capitalization and Indebtedness.3C.Reasons for the Offer and Use of Proceeds.3D.Risk Factors.3Item 4.Information on the Company.19A.History and Development of the Company.19B.Business Overview.20C.Organizational Structure.30D.Property, Plants and Equipment.32Item 4A.Unresolved Staff Comments.32Item 5.Operating and Financial Review and Prospects.32A.Operating Results.32B.Liquidity and Capital Resources.35C.Research and Development, Patents and Licenses, etc.35D.Trend Information.35E.Offbalance Sheet Arrangements.35F.Tabular Disclosure of Contractual Obligations.36Item 6.Directors, Senior Management and Employees.36A.Directors and Senior Management.36B.Compensation.37C.Board Practices.40D.Employees.43E.Share Ownership.43Item 7.Major Shareholders and Related Party Transactions.44A.Major Shareholders.44B.Related Party Transactions.45C.Interests of Experts and Counsel.45Item 8.Financial Information.45A.Consolidated Statements and Other Financial Information.45B.Significant Changes.46Item 9.The Offer and Listing.46A.Offer and Listing Details.46B.Plan of Distribution.47C.Markets.47D.Selling shareholders.48E.Dilution.48F.Expenses of the issue.48Item 10.Additional Information.48A.Share Capital.48B.Memorandum and Articles of Association.48C.Material Contracts.53D.Exchange Controls.54E.Taxation.61F.Dividends and Paying Agents.67G.Statement by Experts.67H.Documents on Display.67I.Subsidiary Information.68Item 11.Quantitative and Qualitative Disclosures about Market Risk.68Item 12.Description of Securities Other than Equity Securities.69A.Debt Securities.69B.Warrants and Rights.69C.Other Securities.69D.American Depositary Shares.69iPart IIItem 13.Defaults, Dividend Arrearages and Delinquencies.71Item 14.Material Modifications to the Rights of Security Holders and Use of Proceeds.71Item 15.Controls and Procedures.71Item 16.[Reserved.]72Item 16A.Audit Committee Financial Expert.72Item 16B.Code of Ethics.73Item 16C.Principal Accountant Fees and Services.73Item 16D.Exemptions from the Listing Standards for Audit Committees.73Item 16E.Purchases of Equity Securities by the Issuer and Affiliated Purchasers.73Item 16F.Change in Registrant’s Certifying Accountant.73Item 16G.Corporate Governance.73Item 16H.Mine Safety Disclosure.73Part IIIItem 17.Financial Statements.74Item 18.Financial Statements.74Item 19.Exhibits.74Index to Consolidated Financial StatementsF1iiPART IITEM 1. IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS.The directors of Luokung Technology Corp. are Xuesong Song, Kegang Peng, Dennis Galgano, Jin Shi, Jiming Ha, Zhihao Xu and Chuang Tao. Thebusiness address for our directors is LAB 32, SOHO 3Q, No 9, Guanghua Road, Chaoyang District, Beijing, People’s Republic of China.Moore Stephens CPA Limited has served as our auditor since October 5, 2018, and is located at 801806 Silvercord Tower 1, 30 Canton road, Tsimshatsui,Kowloon, Hong Kong. BDO China Shun Lun Pan Certified Public Accountants LLP served as our auditors for the last three years, and are located at 4F, No. 61Nanjing Road, Shanghai, People’s Republic of China.Garvey Schubert Barer, P.C., serves as our legal counsel in the United States, and is located at Flour Mill Building, 1000 Potomac Street NW, Suite 200,Washington, D.C., 200073501.Conyers Dill & Pearlman serves as our legal counsel with regard to the laws of the British Virgin Islands, and is located at 29th Floor, One Exchange Square,8 Connaught Place, Central, Hong Kong.ITEM 2. OFFER STATISTICS AND EXPECTED TIMETABLE.Not applicable.ITEM 3. KEY INFORMATION.A. SELECTED FINANCIAL DATA.Luokung Technology Corp. and its consolidated subsidiaries (“Luokung Technology”, “we”, “us”, or “the Company”) consummated an asset exchangeagreement pursuant to which we exchanged our existing assets with those of C Media Limited (the “Asset Exchange”) on August 17, 2018, and we changed ourname from Kingtone Wirelessinfo Solution Holding Ltd. to our current name on August 20, 2018. On October 4, 2018, in connection with the consummation of the Asset Exchange, we changed our fiscal year end from September 30 to December 31.1The selected financial data for the fiscal years ended December 31 2017 and 2016 have been derived from our audited consolidated and combined financialstatements. The selected consolidated and combined financial data should be read in conjunction with our audited financial statements and the accompanying notesand “Item 5 – Operating and Financial Review and Prospects.” Our consolidated and combined financial statements are prepared and presented in accordance withUnited States generally accepted accounting principles, or U.S. GAAP. Our historical results do not necessarily indicate our results expected for any future periods.You should not view our historical results as an indicator of our future performance.LK TECHNOLOGY LTD. AND SUBSIDIARIESSELECTED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS(IN U.S. DOLLARS)For the years ended December 31,20172016Revenues$26,082,417$5,233,145Less: Cost of revenues5,547,7796,315,504Less: Operating expenses:Selling and marketing23,908,7336,209,804General and administrative2,451,2492,108,854Research and development1,046,1982,882,202Total operating expenses27,406,18011,200,860Loss from operations(6,871,542)(12,283,219)Other income (expense):Interest expense(26,611)(4,412)Foreign exchange gains(losses)350,679(298,257)Loss from investment(428,571)Other income (expense), net(262,980)(34,572)Total other income (expense), net61,088(765,812)Loss before income taxes(6,810,454)(13,049,031)Income taxesNet loss$(6,810,454)$(13,049,031)Other comprehensive income:Foreign currency translation adjustment90,671387,375Total comprehensive loss$(6,719,783)$(12,661,656)2LK TECHNOLOGY LTD. AND SUBSIDIARIESSELECTED CONSOLIDATED BALANCE SHEETS(IN U.S. DOLLARS)As of December 31,20172016Accounts receivable, net of allowance for doubtful accounts9,729,6251,865,836Amounts due from related parties11,760,692Property and equipment, net5,044,8727,771,027Goodwill7,239,9367,239,936TOTAL ASSETS37,582,85821,114,832Accounts payable8,784,5186,446,584Accrued liabilities and other payables12,962,91211,329,613Total liabilities25,311,11333,905,520Total Shareholder’s Equity (Deficit)12,271,745(12,790,688)TOTAL LIABILITIES AND SHAREHOLDER’S EQUITY (DEFICIT)37,582,85821,114,832B. CAPITALIZATION AND INDEBTEDNESS.Not applicable.C. REASONS FOR THE OFFER AND USE OF PROCEEDS.Not applicable.D. RISK FACTORS.An investment in our ADSs and ordinary shares involves a high degree of risk. You should carefully consider the risks and uncertainties described belowtogether with all other information contained in this transition report, including the matters discussed under “Special Note Regarding ForwardLooking Statements,”before you decide to invest in our ADSs or ordinary shares. You should pay particular attention to the fact that we are a holding company with substantialoperations in China and are subject to legal and regulatory environments that in many respects differ from those of the United States. If any of the following risks, orany other risks and uncertainties that are not presently foreseeable to us, actually occur, our business, financial condition, results of operations, liquidity and ourfuture growth prospects would be materially and adversely affected. You should also consider all other information contained in this transition report beforedeciding to invest in our ADSs or ordinary shares.Risks Related to Our Company and Our IndustryThe Company had incurred negative cash flows from operating activities and net losses as of December 31, 2017. These matters raise substantial doubt aboutthe Company’s ability to continue as a going concern.The Company’s consolidated financial statements are prepared using generally accepted accounting principles in the United States of America applicableto a going concern, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. As of and for the year endedDecember 31, 2017, the Company had incurred significant operating losses and working capital deficit. The ability of the Company to continue as a going concern isdependent on the Company obtaining adequate capital to fund operating losses until it becomes profitable. If the Company is unable to obtain adequate capital, itcould be forced to cease operations. The accompanying consolidated financial statements do not include any adjustments that might be necessary if the Companyis unable to continue as a going concern.3We may undertake acquisitions, investments, joint ventures or other strategic alliances, which could have a material adverse effect on our ability to manageour business. In addition, such undertakings may not be successful.Our strategy includes plans to grow both organically and through acquisitions, participation in joint ventures or other strategic alliances. Joint venturesand strategic alliances may expose us to new operational, regulatory and market risks, as well as risks associated with additional capital requirements. We may not beable, however, to identify suitable future acquisition candidates or alliance partners. Even if we identify suitable candidates or partners, we may be unable tocomplete an acquisition or alliance on terms commercially acceptable to us. If we fail to identify appropriate candidates or partners, or complete desired acquisitions,we may not be able to implement our strategies effectively or efficiently. In addition, our ability to successfully integrate acquired companies and their operations may be adversely affected by several factors. These factorsinclude:1.diversion of management’s attention;2.difficulties in retaining customers of the acquired companies;3.difficulties in retaining personnel of the acquired companies;4.entry into unfamiliar markets;5.unanticipated problems or legal liabilities; and6.tax and accounting issues.If we fail to integrate acquired companies efficiently, our earnings, revenue growth and business could be negatively affected.Due to intense competition for highlyskilled personnel, we may fail to attract and retain enough sufficiently trained employees to support our operations; ourability to bid for and obtain new projects may be negatively affected and our revenues could decline as a result.The IT industry relies on skilled employees, and our success depends to a significant extent on our ability to attract, hire, train and retain qualifiedemployees. There is significant competition in China for professionals with the skills necessary to develop the products and perform the services we offer to ourcustomers. Increased competition for these professionals, in the mobile application design area or otherwise, could have an adverse effect on us if we experiencesignificant increase in the attrition rate among employees with specialized skills, which could decrease our operating efficiency and productivity and could lead to adecline in demand for our services.In addition, our ability to serve existing customers and business partners and obtain new business will depend, in large part, on our ability to attract, trainand retain skilled personnel that enable us to keep pace with growing demands for wifi connectivity and mobile applications, evolving industry standards andchanging customer preferences. Our failure to attract, train and retain personnel with the qualifications necessary to fulfill the needs of our existing and futurecustomers or to assimilate new employees successfully could have a material adverse effect on our business, financial condition and results of operations. Ourfailure to retain our key personnel on business development or find suitable replacements of the key personnel upon their departure may lead to shrinking newimplementation projects, which could materially adversely affect our business.4Our business depends substantially on the continuing efforts of our senior executives and other key personnel, and our business may be severely disrupted if welose their services.Our future success heavily depends upon the continued services of our senior executives and other key employees, particularly since we recentlyappointed a new chairman. We are reliant on the services of Mr. Xuesong Song, our chairman, chief executive officer and member of our board of directors. If one ormore of our senior executives or key employees is unable or unwilling to continue in his or her present position, we may not be able to replace such employee easily,or at all, we may incur additional expenses to recruit, train and retain replacement personnel, our business may be severely disrupted, and our financial condition andresults of operations may be materially adversely affected.Our business could suffer if our executives and directors compete against us and our noncompetition agreements with them cannot be enforced.If any of our senior executives or key employees joins a competitor or forms a competing company, we may lose customers, knowhow and keyprofessionals and staff members to them. Also, if any of our business development managers who keep a close relationship with our customers and businesspartners joins a competitor or forms a competing company, we may lose customers, and our revenues may be materially adversely affected. Most of our executiveshave entered, or will soon enter, into employment agreements with us that contain or will contain noncompetition provisions. However, if any dispute arisesbetween our executive officers and us, such noncompetition provisions may not be enforceable, especially in China, where all of these executive officers and keyemployees reside, in light of the uncertainties with China’s legal system. See “Risk Factors — Risks Related to Doing Business in China — Uncertainties withrespect to the PRC legal system could adversely affect us.”Our computer networks may be vulnerable to security risks that could disrupt our services and adversely affect our results of operations.Our computer networks may be vulnerable to unauthorized access, computer hackers, computer viruses and other security problems caused byunauthorized access to, or improper use of, systems by third parties or employees. A hacker who circumvents security measures could misappropriate proprietaryinformation or cause interruptions or malfunctions in operations. Computer attacks or disruptions may jeopardize the security of information stored in andtransmitted through computer systems and mobile devices of our customers. Actual or perceived concerns that our systems may be vulnerable to such attacks ordisruptions may deter customers from using our services. As a result, we may be required to expend significant resources to protect against the threat of thesesecurity breaches or to alleviate problems caused by these breaches, which could adversely affect our results of operations.If we do not continually enhance our solutions and service offerings, we may have difficulty in retaining existing customers and attracting new customers.We believe that our future success will depend, to a significant extent, upon our ability to enhance our existing applications and platform, and to introducenew features to meet the preferences and requirements of our customers in a rapidly developing and evolving market. Unexpected technical, operational, distributionor other problems could delay or prevent the introduction of one or more of these products or services, or any products or services that we may plan to introduce inthe future. Our present or future products may not satisfy the evolving preferences and tastes of our customers, and these solutions and services may not achieveanticipated market acceptance or generate incremental revenue. If we are unable to anticipate or respond adequately to the need for service or productenhancements due to resource, technological or other constraints, our business, financial condition and results of operations could be materially and adverselyaffected.5If we are unable to develop competitive new products and service offerings our future results of operations could be adversely affected.Our future revenue stream depends to a large degree on our ability to utilize our technology in a way that will allow us to offer new types of mobileapplications and services to a broader customer base. We will be required to make investments in research and development in order to continually develop newsoftware applications and related service offerings, enhance our existing platform, mobile applications and related service offerings and achieve market acceptanceof our mobile applications and service offerings. We may incur problems in the future in innovating and introducing new mobile applications and service offerings.Our developmentstage mobile applications may not be successfully completed or, if developed, may not achieve significant customer acceptance. If we are unableto successfully define, develop and introduce competitive new mobile applications, and enhance existing mobile applications, our future results of operations wouldbe adversely affected. The timely availability of new applications and their acceptance by customers are important to our future success. A delay in the developmentof new applications could have a significant impact on its results of operations.Changes in technology could adversely affect our business by increasing our costs, reducing our profit margins and causing a decline in our competitiveness.China’s wireless telecom industry, in which we operate, is characterized by rapidly changing technology, evolving industry standards, frequentintroductions of new services and solutions and enhancements as well as changing customer demands. New solutions and new technologies often render existingsolutions and services obsolete, excessively costly or otherwise unmarketable. As a result, our success depends on our ability to adapt to the latest technologicalprogress, such as the 5G standard and technologies, and to develop or acquire and integrate new technologies into our platform, mobile applications and relatedservices. Advances in technology also require us to commit substantial resources to developing or acquiring and then deploying new technologies for use in ouroperations. We must continuously train personnel in new technologies and in how to integrate existing hardware and software systems with these newtechnologies. We may not be able to adapt quickly to new technologies or commit sufficient resources to compete successfully against existing or new competitorsin bringing to market solutions and services that incorporate these new technologies. We may incur problems in the future in innovating and introducing new mobileapplications and service offerings. Our development of new mobile applications and platform enhancements may not be successfully completed or, if developed,may not achieve significant customer acceptance. If we fail to adapt to changes in technologies and compete successfully against established or new competitors,our business, financial condition and results of operations could be adversely affected.Problems with the quality or performance of our hardware, software or other systems may cause delays in the introduction of new solutions or result in the lossof customers and revenues, which could have a material and adverse effect on our business, financial condition and results of operations.Our hardware and software systems are complex and may contain defects, errors or bugs when first introduced to the market or to a particular customer, oras new versions are released. Because we cannot test for all possible scenarios, our systems may contain errors that are not discovered until after they have beeninstalled or implemented, and we may not be able to timely correct these problems. These defects, errors or bugs could interrupt or delay the completion of projectsor sales to our customers. In addition, our reputation may be damaged and we may fail to acquire new projects from existing customers or new customers. Errors mayoccur when we provide systems integration and maintenance services. Even in cases where we have agreements with our customers that contain provisionsdesigned to limit our exposure to potential claims and liabilities arising from customer problems, these provisions may not effectively protect us against such claimsin all cases and in all jurisdictions. In addition, as a result of business and other considerations, we may undertake to compensate our customers for damages arisingfrom the use of our solutions, even if our liability is limited by these provisions. Moreover, claims and liabilities arising from customer problems could also result inadverse publicity and materially and adversely affect our business, results of operations and financial condition. We currently do not carry any product or serviceliability insurance and any imposition of liability on us may materially and adversely affect our business and increase our costs, resulting in reduced revenues andprofitability.Our products may contain undetected software defects, which could negatively affect our revenues.Our software products are complex and may contain undetected defects. Although we test our products, it is possible that errors may be found or occur inour new or existing products after we have commenced commercial shipment of those products. Defects, whether actual or perceived, could result in adversepublicity, loss of revenues, product returns, a delay in market acceptance of our products, loss of competitive position or claims against us by customers. Any suchproblems could be costly to remedy and could cause interruptions, delays, or cessation of our product sales, which could cause us to lose existing or prospectivecustomers and could negatively affect our results of operations.6We may be subject to infringement, misappropriation and indemnity claims in the future, which may cause us to incur significant expenses, pay substantialdamages and be prevented from providing our services or technologies.Our success depends, in part, on our ability to carry out our business without infringing the intellectual property rights of third parties. Patent andcopyright law covering softwarerelated technologies is evolving rapidly and is subject to a great deal of uncertainty. Our selfdeveloped or licensed technologies,processes or methods may be covered by thirdparty patents or copyrights, either now existing or to be issued in the future. Any potential litigation may cause us toincur significant expenses. Thirdparty claims, if successfully asserted against us may cause us to pay substantial damages, seek licenses from third parties, payongoing royalties, redesign our services or technologies, or prevent us from providing services or technologies subject to these claims. Even if we were to prevail,any litigation would likely be costly and timeconsuming and divert the attention of our management and key personnel from our business operations.Our failure to protect our intellectual property rights may undermine our competitive position, and subject us to costly litigation to protect our intellectualproperty rights.Any misappropriation of our technology or the development of competitive technology could seriously harm our business. We regard a substantial portionof our hardware and software systems as proprietary and rely on statutory copyright, trademark, patent, trade secret laws, customer license agreements, employeeand thirdparty nondisclosure agreements and other methods to protect our proprietary rights. Nevertheless, these resources afford only limited protection and theactions we take to protect our intellectual property rights may not be adequate. In particular, third parties may infringe or misappropriate our proprietarytechnologies or other intellectual property rights, which could have a material adverse effect on our business, financial condition and results of operations. Inaddition, intellectual property rights and confidentiality protection in China may not be as effective as in the United States, and policing unauthorized use ofproprietary technology can be difficult and expensive. Further, litigation may be necessary to enforce our intellectual property rights, protect our trade secrets ordetermine the validity and scope of the proprietary rights of others. The outcome of any such litigation may not be in our favor. Any such litigation may be costlyand may divert management attention, as well as our other resources, away from our business. An adverse determination in any such litigation will impair ourintellectual property rights and may harm our business, prospects and reputation. In addition, we have no insurance coverage against litigation costs and wouldhave to bear all litigation costs in excess of the amount recoverable from other parties. The occurrence of any of the foregoing could have a material adverse effecton our business, financial condition and results of operations. Our solutions incorporate a portion of, and work in conjunction with, thirdparty hardware and software solutions. If these thirdparty hardware or softwaresolutions are not available to us at reasonable costs, or at all, our results of operations could be adversely impacted.Although our hardware and software systems and mobile applications primarily rely on our own core technologies, some elements of our systemsincorporate a small portion of thirdparty hardware and software solutions. If any third party were to discontinue making their intellectual property available to us orour customers on a timely basis, or increase materially the cost of their licensing such intellectual property, or if our systems or applications failed to properlyfunction or interoperate with replacement intellectual property, we may need to incur costs in finding replacement thirdparty solutions and/or redesigning oursystems or applications to replace or function with or on replacement thirdparty proprietary technology. Replacement technology may not be available on termsacceptable to us or at all, and we may be unable to develop alternative solutions or redesign our systems or applications on a timely basis or at a reasonable cost. Ifany of these were to occur, our results of operations could be adversely impacted.7Our ability to sell our products is highly dependent on the quality of our service and support offerings, and our failure to offer high quality service could have amaterial adverse effect on our ability to market and sell our products.Our customers depend upon our customer service and support staff to resolve issues relating to our products. Highquality support services are critical forthe successful marketing and sale of our products. If we fail to provide highquality support on an ongoing basis, our customers may react negatively and we maybe materially and adversely affected in our ability to sell additional products to these customers. This could also damage our reputation and prospects with potentialcustomers. Our failure to maintain highquality support services could have a material and adverse effect on our business, results of operations and financialcondition.Weaknesses in our internal controls over financial reporting or disclosure controls and procedures may have a material adverse effect on our business, theprice of our ordinary shares, operating results and financial condition.We are required to establish and maintain appropriate internal controls over financial reporting and disclosure controls and procedures. Pursuant to Section404 of the SarbanesOxley Act of 2002 and the related rules adopted by the Securities and Exchange Commission, every public company is required to include amanagement report on its internal controls over financial reporting in its transition report, which contains management’s assessment of the effectiveness of thecompany’s internal controls over financial reporting. This requirement first applied to our annual report on Form 20F for the fiscal year ended on September 30,2011. In connection with our assessments of our disclosure controls and procedures and internal controls over financial reporting, management concluded that as ofSeptember 30, 2018, our disclosure controls and procedures and our internal controls over financial reporting were not effective due to lack of U.S. generallyaccepted accounting principles (“U.S. GAAP”) expertise in our current accounting team. Please refer to the discussion under Item 15, “Controls and Procedures” forfurther discussion of our material weakness as of December 31, 2017. Should we be unable to remediate the material weakness promptly and effectively, suchweakness could harm our operating results, result in a material misstatement of our financial statements, cause us to fail to meet our financial reporting obligations orprevent us from providing reliable and accurate financial reports or avoiding or detecting fraud. This, in turn, could result in a loss of investor confidence in theaccuracy and completeness of our financial reports, which could have an adverse effect on the trading price of our ordinary shares. Any litigation or otherproceeding or adverse publicity relating to the material weaknesses could have a material adverse effect on our business and operating results. We have very limited insurance coverage which could expose us to significant costs and business disruption.We do not maintain any insurance coverage for our leased properties. Should any natural catastrophes such as earthquakes, floods, typhoons or any actsof terrorism occur in Beijing, China, where our head office is located and most of our employees are based, or elsewhere in China, we might suffer not onlysignificant property damages, but also loss of revenues due to interruptions in our business operations, which could have a material adverse effect on our business,operating results or financial condition.The insurance industry in China is still at an early stage of development. Insurance companies in China offer limited business insurance products, and donot, to our knowledge, offer business liability insurance. As a result, we do not have any business liability insurance coverage for our operations. Moreover, whilebusiness disruption insurance is available, we have determined that the risks of disruption and cost of the insurance are such that we do not require it at this time.Any business disruption, litigation or natural disaster might result in substantial costs and diversion of resources, particularly if it affects our technology platformswhich we depend on for delivery of our software and services, and could have a material adverse effect on our financial condition and results of operations.We may be liable to our customers for damages caused by unauthorized disclosure of sensitive and confidential information, whether through our employees orotherwise.We are typically required to manage, utilize and store sensitive or confidential customer data in connection with the products and services we provide.Under the terms of our customer contracts, we are required to keep such information strictly confidential. We seek to implement specific measures to protectsensitive and confidential customer data. We require our employees to enter into nondisclosure agreements to limit such employees’ access to, and distribution of,our customers’ sensitive and confidential information and our own trade secrets. We can give no assurance that the steps taken by us in this regard will be adequateto protect our customers’ confidential information. If our customers’ proprietary rights are misappropriated by our employees, in violation of any applicableconfidentiality agreements or otherwise, our customers may consider us liable for that act and seek damages and compensation from us. However, we currently donot have any insurance coverage for mismanagement or misappropriation of such information by our employees. Any litigation with respect to unauthorizeddisclosure of sensitive and confidential information might result in substantial costs and diversion of resources and management attention.8We may face intellectual property infringement claims that could be timeconsuming and costly to defend. If we fail to defend ourselves against such claims, wemay lose significant intellectual property rights and may be unable to continue providing our existing products and services.It is critical that we use and develop our technology and products without infringing upon the intellectual property rights of third parties, includingpatents, copyrights, trade secrets and trademarks. Intellectual property litigation is expensive and timeconsuming and could divert management’s attention from ourbusiness. A successful infringement claim against us, whether with or without merit, could, among others things, require us to pay substantial damages, developnoninfringing technology, or rebrand our name or enter into royalty or license agreements that may not be available on acceptable terms, if at all, and cease making,licensing or using products that have infringed a third party’s intellectual property rights. Protracted litigation could also result in existing or potential customersdeferring or limiting their purchase or use of our products until resolution of such litigation, or could require us to indemnify our customers against infringementclaims in certain instances. Also, we may be unaware of intellectual property registrations or applications relating to our services that may give rise to potentialinfringement claims against us. Parties making infringement claims may be able to obtain an injunction to prevent us from delivering our services or usingtechnology containing the allegedly infringing intellectual property. Any intellectual property litigation could have a material adverse effect on our business, resultsof operations or financial condition. Seasonality and fluctuations in our customers’ spending cycle and other factors can cause our revenues and operating results to vary significantly from quarterto quarter and from year to year.Our revenues and operating results will vary significantly from quarter to quarter and from year to year due to a number of factors, many of which areoutside of our control. Our new lines of business acquired upon the consummation of the asset exchange transaction discussed below see higher customer use andactivity during the Chinese New Year holiday than other times during the year when rail travel is high, which lead to higher revenue during this period as morecustomers would like to place more advertising. Due to these and other factors, our operating results may fluctuate significantly from quarter to quarter and fromyear to year. These fluctuations are likely to continue in the future, and operating results for any period may not be indicative of our future performance in any futureperiod.Our corporate actions are substantially controlled by our principal shareholders, who can cause us to take actions in ways you may not agree with.Mr. Xuesong Song, our chairman, chief executive officer and a member of our board of directors, beneficially owns 19.31% of our outstanding ordinaryshares and 1,000,000 preferred shares, and each preferred share has the right to 399 votes at a meeting of the members of the Company. Our officers and directors asa group beneficially own an aggregate of approximately 33.69% of our outstanding ordinary shares. These shareholders, acting individually or as a group, couldexert control and substantial influence over matters such as electing directors, amending our constitutional documents, and approving acquisitions, mergers or otherbusiness combination transactions. This concentration of ownership and voting power may also discourage, delay or prevent a change in control of our company,which could deprive our shareholders of an opportunity to receive a premium for their shares as part of a sale of our company and might reduce the price of ourshares. Alternatively, our controlling shareholders may cause a merger, consolidation or change of control transaction even if it is opposed by our othershareholders, including those who purchase shares in this offering.9We depend on a small number of customers to derive a significant portion of our revenues. If we were to become dependent again upon a few customers, suchdependency could negatively impact our business, operating results and financial condition.We derived a material portion of our revenues from a small number of customers. In the years ended December 31, 2017 and 2016, our five largestcustomers accounted for 99.8% and 78.5% of our total sales, respectively, and our largest customer Guangdong Zhanshi Media Advertising Co., Ltd. accounted forapproximately 80.8% of our total sales during for the fiscal year ended December 31, 2017. As our customer base may change from yeartoyear, during such yearsthat the customer base is highly concentrated, the fluctuation of our sales to any of such major customers could have a material adverse effect on our business,operating results and financial condition. Moreover, our high customer base concentration may also adversely affect our ability to negotiate contract prices withthese customers, which may in turn materially and adversely affect our results of operations.Our historical outstanding accounts receivable have been relatively high. Inability to collect our accounts receivable on a timely basis, if at all, couldmaterially and adversely affect our financial condition, liquidity and results of operations.Historically, our outstanding accounts receivable have been relatively high. As of December 31, 2017 and 2016, our outstanding accounts receivable beforeimpairment were $10.4 million and $2.10 million, respectively. Although we conduct credit evaluations of our customers, we generally do not require collateral orother security from our customers. In addition, we have had a relatively high customer concentration. The outstanding accounts receivable balance for our largestcustomer was 45.3% and 38.5% of our total accounts receivable balance as of December 31, 2017 and 2016, respectively. As a result, an extended delay or default inpayment relating to a significant account would likely have a material and adverse effect on the aging schedule and turnover days of our accounts receivable. Ourinability to collect our accounts receivable on a timely basis, if at all, could materially and adversely affect our financial condition, liquidity and results of operations.Risks Related to Doing Business in ChinaAdverse changes in political and economic policies of the PRC government could have a material adverse effect on the overall economic growth of China,which could reduce the demand for our services and materially and adversely affect our competitive position.Substantially all of our business operations are conducted in China. Accordingly, our business, results of operations, financial condition and prospects aresubject to a significant degree to economic, political and legal developments in China. Although the Chinese economy is no longer a planned economy, the PRCgovernment continues to exercise significant control over China’s economic growth through direct allocation of resources, monetary and tax policies, and a host ofother government policies such as those that encourage or restrict investment in certain industries by foreign investors, control the exchange between RMB andforeign currencies, and regulate the growth of the general or specific market. These government involvements have been instrumental in China’s significant growthin the past 30 years. The reorganization of the telecommunications industry encouraged by the PRC government has directly affected our industry and our growthprospect. In response to the recent global and Chinese economic downturn, the PRC government has adopted policy measures aimed at stimulating the economicgrowth in China. If the PRC government’s current or future policies fail to help the Chinese economy achieve further growth or if any aspect of the PRCgovernment’s policies limits the growth of the telecommunications industry in China or our industry or otherwise negatively affects our business, our growth rate orstrategy, our results of operations could be adversely affected as a result. Our business benefits from certain government tax incentives. Expiration, reduction or discontinuation of, or changes to, these incentives will increase our taxburden and reduce our net income.Under the PRC Enterprise Income Tax Law passed in 2007 and the implementing rules, both of which became effective on January 1, 2008, or the New EITLaw, a unified enterprise income tax rate of 25% and unified tax deduction standard is applied equally to both domesticinvested enterprises and foreigninvestedenterprises, or FIEs. Enterprises established prior to March 16, 2007 eligible for preferential tax treatment in accordance with the then tax laws and administrativeregulations shall gradually become subject to the New EIT Law rate over a fiveyear transition period starting from the date of effectiveness of the New EIT Law.However, certain qualifying hightechnology enterprises may still benefit from a preferential tax rate of 15% if they own their core intellectual properties and they areenterprises in certain Statesupported hightech industries to be later specified by the government. As a result, if our PRC subsidiaries qualify as “hightechnologyenterprises,” they will continue to benefit from the preferential tax rate of 15%, subject to transitional rules implemented from January 1, 2008. Our subsidiary, BeijingZhong Chuan Shi Xun Technology Limited, is qualified as a “hightechnology enterprise” until the end of the November 2018, and therefore it had benefited fromthe preferential tax rate of 15%, subject to transitional rules implemented on January 1, 2008. Although we intend to apply for a renewal of this qualification, if BeijingZhong Chuan Shi Xun ceases to qualify as a “hightechnology enterprise”, or the tax authorities change their position on our preferential tax treatments in thefuture, our future tax liabilities may materially increase, which could materially and adversely affect our financial condition and results of operations.10If we were deemed a “resident enterprise” by PRC tax authorities, we could be subject to tax on our global income at the rate of 25% under the New EIT Lawand our nonPRC shareholders could be subject to certain PRC taxes.Under the New EIT Law and the implementing rules, both of which became effective January 1, 2008, an enterprise established outside of the PRC with “defacto management bodies” within the PRC may be considered a PRC “resident enterprise” and will be subject to the enterprise income tax at the rate of 25% on itsglobal income as well as PRC enterprise income tax reporting obligations. The implementing rules of the New EIT Law define “de facto management” as “substantialand overall management and control over the production and operations, personnel, accounting, and properties” of the enterprise. However, as of the date of thistransition report, no final interpretations on the implementation of the “resident enterprise” designation are available. Moreover, any such designation, when madeby PRC tax authorities, will be determined based on the facts and circumstances of individual cases. Therefore, if we were to be considered a “resident enterprise”by the PRC tax authorities, our global income would be taxable under the New EIT Law at the rate of 25% and, to the extent we were to generate a substantial amountof income outside of PRC in the future, we would be subject to additional taxes. In addition, the dividends we pay to our nonPRC enterprise shareholders and gainsderived by such shareholders or ADS or ordinary share holders from the transfer of our shares or ADSs may also be subject to PRC withholding tax at the rate up to10%, if such income were regarded as Chinasourced income.Our holding company structure may limit the payment of dividends.We have no direct business operations, other than our ownership of our subsidiaries. While we have no current intention of paying dividends, should wedecide in the future to do so, as a holding company, our ability to pay dividends and meet other obligations depends upon the receipt of dividends or otherpayments from our operating subsidiaries and other holdings and investments. Current PRC regulations permit our PRC subsidiaries to pay dividends to us only outof their accumulated profits, if any, determined in accordance with Chinese accounting standards and regulations. In addition, each of our subsidiaries in China isrequired to set aside at least 10% of its aftertax profits each year, if any, to fund a statutory reserve until such reserve reaches 50% of its registered capital. Thesereserves are not distributable as cash dividends. Furthermore, if our subsidiaries in China incur debt on their own behalf in the future, the instruments governing thedebt may restrict their ability to pay dividends or make other payments to us. As a result, there may be limitations on the ability of our PRC subsidiaries to paydividends or make other investments or acquisitions that could be beneficial to our business or otherwise fund and conduct our business.In addition, under the New EIT Law and the implementing rules that became effective on January 1, 2008, dividends generated from the business of our PRCsubsidiaries after January 1, 2008 and payable to us may be subject to a withholding tax rate of 10% if the PRC tax authorities subsequently determine that we are anonresident enterprise, unless there is a tax treaty with China that provides for a different withholding arrangement.Uncertainties with respect to the PRC legal system could adversely affect us.We conduct all of our business through our subsidiaries in China. Our operations in China are governed by PRC laws and regulations. Our PRCsubsidiaries are generally subject to laws and regulations applicable to foreign investments in China and, in particular, laws and regulations applicable to whollyforeignowned enterprises. The PRC legal system is based on statutes. Prior court decisions may be cited for reference but have limited precedential value.11Since 1979, PRC legislation and regulations have significantly enhanced the protections afforded to various forms of foreign investments in China.However, China has not developed a fully integrated legal system and recently enacted laws and regulations may not sufficiently cover all aspects of economicactivities in China. In particular, because these laws and regulations are relatively new, and because of the limited volume of published decisions and theirnonbinding nature, the interpretation and enforcement of these laws and regulations involve uncertainties. In addition, the PRC legal system is based in part ongovernment policies and internal rules (some of which are not published on a timely basis or at all) that may have a retroactive effect. As a result, we may not beaware of our violation of these policies and rules until some time after the violation. In addition, any litigation in China may be protracted and result in substantialcosts and diversion of resources and management attention.PRC regulation of loans and direct investment by offshore holding companies to PRC entities may delay or prevent us from using the proceeds of our May2010 public offering to make loans or additional capital contributions to our PRC operating subsidiaries, which could materially and adversely affect ourliquidity and our ability to fund and expand our business.In utilizing the proceeds of our May 2010 public offering as an offshore holding company of our PRC operating subsidiaries, we may make loans to our PRCsubsidiaries, or we may make additional capital contributions to our PRC subsidiaries. Any loans to our PRC subsidiaries are subject to PRC regulations. Forexample, loans by us to our subsidiaries in China, which are FIEs, to finance their activities cannot exceed statutory limits and must be registered with the StateAdministration of Foreign Exchange, or SAFE. On August 29, 2008, SAFE promulgated Circular 142, a notice regulating the conversion by a foreigninvestedcompany of foreign currency into RMB by restricting how the converted RMB may be used. The notice requires that RMB converted from the foreign currencydenominated capital of a foreigninvested company may only be used for purposes within the business scope approved by the applicable governmental authorityand may not be used for equity investments within the PRC unless specifically provided for otherwise. The foreign currencydenominated capital shall be verified byan accounting firm before converting into RMB. In addition, SAFE strengthened its oversight over the flow and use of RMB funds converted from the foreigncurrencydenominated capital of a foreigninvested company. To convert such capital into RMB, the foreigninvested company must report the use of such RMB tothe bank, and the RMB must be used to the reported purposes. According to Circular 142, change of the use of such RMB without approval is prohibited. Inaddition, such RMB may not be used to repay RMB loans if the proceeds of such loans have not yet been used. Violations of Circular 142 may result in severepenalties, including substantial fines as set forth in the Foreign Exchange Administration Rules.We may also decide to finance our subsidiaries by means of capital contributions. These capital contributions may need approval from the PRC Ministry ofCommerce, or MOFCOM, or its local counterpart. We may not be able to obtain these government approvals on a timely basis, if at all, with respect to future capitalcontributions by us to our PRC subsidiaries. If we fail to receive such approvals in such cases when approval is required, our ability to use the proceeds of our May2010 public offering and to capitalize our PRC operations may be negatively affected, which could adversely affect our liquidity and our ability to fund and expandour business.Governmental control of currency conversion may affect the value of your investment.The PRC government imposes controls on the convertibility of the RMB into foreign currencies and, in certain cases, the remittance of currency out ofChina. We receive substantially all of our revenues in RMB. Under our current corporate structure, our income is primarily derived from dividend payments from ourPRC subsidiaries. Shortages in the availability of foreign currency may restrict the ability of our PRC subsidiaries to remit sufficient foreign currency to paydividends or other payments to us, or otherwise satisfy their foreign currency denominated obligations. Under existing PRC foreign exchange regulations, paymentsof current account items, including profit distributions, interest payments and expenditures from traderelated transactions, can be made in foreign currencieswithout prior approval from SAFE by complying with certain procedural requirements. However, approval from appropriate government authorities is required whereRMB is to be converted into foreign currency and remitted out of China to pay capital expenses such as the repayment of loans denominated in foreign currencies.The PRC government may also at its discretion restrict access in the future to foreign currencies for current account transactions. If the foreign exchange controlsystem prevents us from obtaining sufficient foreign currency to satisfy our currency demands, we may not be able to pay dividends in foreign currencies to ourshareholders, including holders of our ADSs or ordinary shares.12Fluctuation in the value of the RMB may have a material adverse effect on the value of your investment.The value of the RMB against the U.S. dollar and other currencies may fluctuate and is affected by, among other things, changes in political and economicconditions. On July 21, 2005, the PRC government changed its decadeold policy of pegging the value of the RMB to the U.S. dollar. Under the new policy, the RMBis permitted to fluctuate within a narrow and managed band against a basket of certain foreign currencies. This change in policy has resulted in an approximate26.8% appreciation of the RMB against the U.S. dollar between July 21, 2005 and September 30, 2015. Provisions on Administration of Foreign Exchange, asamended in August 2008, further changed China’s exchange regime to a managed floating exchange rate regime based on market supply and demand. Since reachinga high against the U.S. dollar in July 2008, however, the RMB has traded within a narrow band against the U.S. dollar, remaining within 1% of its July 2008 high butnever exceeding it. As a consequence, the RMB has fluctuated sharply since July 2008 against other freelytraded currencies, in tandem with the U.S. dollar. InAugust 2015, the PRC Government devalued its currency by approximately 3%, representing the largest yuan depreciation for 20 years. Concerns remain thatChina’s slowing economy, and in particular its exports, will need a stimulus that can only come from further cuts in the exchange rate.It is difficult to predict how long the current situation may continue and when and how it may change again as the People’s Bank of China may regularlyintervene in the foreign exchange market to achieve economic policy goals. Substantially all of our revenues and costs are denominated in the RMB, and asignificant portion of our financial assets are also denominated in RMB. We principally rely on dividends and other distributions paid to us by our subsidiaries inChina. Any significant revaluation of the RMB may materially and adversely affect our cash flows, revenues, earnings and financial position, and the value of, andany dividends payable on, our ADSs or ordinary shares in U.S. dollars. Any fluctuations of the exchange rate between the RMB and the U.S. dollar could also resultin foreign currency translation losses for financial reporting purposes.PRC laws and regulations governing our businesses. If we are found to be in violation of such PRC laws and regulations, we could be subject to sanctions. Inaddition, changes in such PRC laws and regulations may materially and adversely affect our business.There are substantial uncertainties regarding the interpretation and application of PRC laws and regulations, including, but not limited to, the laws andregulations governing our business. These laws and regulations are relatively new and may be subject to change, and their official interpretation and enforcementmay involve substantial uncertainty. The effectiveness of newly enacted laws, regulations or amendments may be delayed, resulting in detrimental reliance byforeign investors. New laws and regulations that affect existing and proposed future businesses may also be applied retroactively.The PRC government has broad discretion in dealing with violations of laws and regulations, including levying fines, revoking business and other licensesand requiring actions necessary for compliance. In particular, licenses and permits issued or granted to us by relevant governmental bodies may be revoked at a latertime by higher regulatory bodies. We cannot predict the effect of the interpretation of existing or new PRC laws or regulations on our businesses. We cannot assureyou that our current ownership and operating structure would not be found in violation of any current or future PRC laws or regulations. As a result, we may besubject to sanctions, including fines, and could be required to restructure our operations or cease to provide certain services. In addition, any litigation in China maybe protracted and result in substantial costs and diversion of resources and management attention. Any of these or similar actions could significantly disrupt ourbusiness operations or restrict us from conducting a substantial portion of our business operations, which could materially and adversely affect our business,financial condition and results of operations.13If we were required to obtain the prior approval of the China Securities Regulatory Commission, or CSRC, of the listing and trading of our ADSs on theNASDAQ Capital Market, we may face regulatory actions or other sanctions from the CSRC or other PRC regulatory agencies.On August 8, 2006, six PRC regulatory agencies, including the Ministry of Commerce, the State Assets Supervision and Administration Commission, theState Administration for Taxation, the State Administration for Industry and Commerce, the CSRC and the SAFE, jointly issued the Regulations on Mergers andAcquisitions of Domestic Enterprises by Foreign Investors, which became effective on September 8, 2006 (the “New M&A Rules”). This regulation, among otherthings, includes provisions that purport to require that an offshore special purpose vehicle formed for the purposes of overseas listing of equity interests in PRCcompanies and controlled directly or indirectly by PRC companies or individuals obtain the approval of the CSRC prior to the listing and trading of such specialpurpose vehicle’s securities on an overseas stock exchange. On September 21, 2006, the CSRC published on its official website procedures regarding its approval ofoverseas listings by special purpose vehicles. The CSRC approval procedures require the filing of a number of documents with the CSRC and it would take severalmonths to complete the approval process, if practicable at all. The application of this new PRC regulation remains unclear with no consensus currently existingamong leading PRC law firms regarding the scope of the applicability of the CSRC approval requirement. Prior to our May 2010 initial public offering, our PRC counsel has advised us that, based on its understanding of the current PRC laws and regulations aswell as the procedures announced on September 21, 2006: (i) Softech was directly incorporated by Topsky as a foreign investment enterprise under PRC law;therefore, there was no acquisition of the equity of a “PRC domestic company” as defined under the New M&A Rules; and (ii) the contractual arrangementsbetween Kingtone Information and Softech were not clearly defined and considered as the transaction which shall be applied to the New M&A Rules. Therefore, wedid not seek prior CSRC approval for our initial public offering.However, if the CSRC required that we obtain its approval prior to the completion of our initial public offering and the listing of our ADSs on the NASDAQCapital Market, we may face regulatory actions or other sanctions from the CSRC or other PRC regulatory agencies. These regulatory agencies may impose fines andpenalties on our operations in the PRC, limit our operating privileges in the PRC, delay or restrict the repatriation of the proceeds from our initial public offering intothe PRC, or take other actions that could have a material adverse effect on our business, financial condition, results of operations, reputation and prospects, as wellas the trading price of our shares.Also, if the CSRC requires that we obtain its approval, we may be unable to obtain a waiver of the CSRC approval requirements if and when procedures areestablished to obtain such a waiver. Any uncertainties and/or negative publicity regarding this CSRC approval requirement could have a material adverse effect onthe trading price of our shares.PRC regulations relating to the establishment of offshore special purpose companies by PRC residents may subject our PRC resident shareholders to penaltiesand limit our ability to inject capital into our PRC subsidiaries, limit our PRC subsidiaries’ ability to distribute profits to us, or otherwise adversely affect us.On October 21, 2005, the SAFE issued the Notice on Issues Relating to the Administration of Foreign Exchange in Fundraising and Reverse InvestmentActivities of Domestic Residents Conducted via Offshore Special Purpose Companies, or Notice 75, which became effective as of November 1, 2005. According toNotice 75, prior registration with the local SAFE branch is required for PRC residents to establish or to control an offshore company for the purposes of financingsuch offshore company with assets or equity interests in an onshore enterprise located in the PRC, or an offshore special purpose company. An amendment toregistration or filing with the local SAFE branch by such PRC resident is also required for the injection of equity interests or assets of an onshore enterprise in theoffshore special purpose company or overseas funds raised by such offshore company, or any other material change involving a change in the capital of theoffshore special purpose company. Moreover, Notice 75 applies retroactively. As a result, PRC residents who have established or acquired control of offshorespecial purpose companies that have made onshore investments in the PRC in the past are required to have completed the relevant registration procedures with thelocal SAFE branch by March 31, 2006. To further clarify the implementation of Notice 75, the SAFE issued Circular 106 on May 29, 2007. Under Circular 106, PRCsubsidiaries of an offshore special purpose company are required to coordinate and supervise the filing of SAFE registrations by the offshore holding company’sshareholders or beneficial owners who are PRC residents in a timely manner.14Some of our current shareholders and/or beneficial owners may fall within the ambit of the SAFE notice and be required to register with the local SAFEbranch as required under the SAFE notice. If so required, and if such shareholders and/or beneficial owners fail to timely register their SAFE registrations pursuantto the SAFE notice, or if future shareholders and/or beneficial owners of our company who are PRC residents fail to comply with the registration procedures setforth in the SAFE notice, this may subject such shareholders, beneficial owners and/or our PRC subsidiaries to fines and legal sanctions and may also limit ourability to contribute additional capital into our PRC subsidiaries, limit our PRC subsidiaries’ ability to distribute dividends to our company, or otherwise adverselyaffect our business.Risks Associated with our ADSs and Ordinary SharesOur securities are not currently traded on any United States public markets and you may not be able to resell your securities for some time.There is currently no public market for our ordinary shares or American Depository Shares (“ADSs”) in the United States or in any other jurisdiction. OurADSs were voluntarily delisted from the NASDAQ Capital Market on September 19, 2018. We have applied to NASDAQ for the listing of our ordinary shares on theNASDAQ Capital Market and received an approval for listing of Ordinary Shares on August 6, 2018, and as of the date of this transition report, that application andapproval are currently under review. We cannot assume that our ordinary shares will be accepted for listing on the NASDAQ Capital Market, or if listed, that wewould continue to meet the applicable minimum listing requriements. You may not be able to sell your ordinary shares quickly or at all if we are unable to gain listingon a public market in the United States.The market price of our ADSs has historically been highly volatile, and you may not be able to resell our ordinary shares at or above your initial purchaseprice.There may be a limited public market for our ordinary shares and, as discussed above, our ADSs are no longer listed on any public market in the UnitedStates or any other jurisdiction. We cannot assure you that there will be an active trading market for our ordinary shares in the future. If our ordinary shares areaccepted for listing on a public market, you may not be able to sell your ordinary shares quickly or at the market price if trading in our ordinary shares is not active. The trading price of our ADSs and ordinary shares may be volatile. The price of our ADSs and ordinary shares could be subject to wide fluctuations inresponse to a variety of factors, including the following:1.Introduction of new products, services or technologies offered by us or our competitors;2.Failure to meet or exceed revenue and financial projections we provide to the public;3.Actual or anticipated variations in quarterly operating results;4.Failure to meet or exceed the estimates and projections of the investment community;5.General market conditions and overall fluctuations in United States equity markets;6.Announcements of significant acquisitions, strategic partnerships, joint ventures or capital commitments by us or our competitors;7.Disputes or other developments relating to proprietary rights, including patents, litigation matters and our ability to obtain patent protection for ourtechnologies;8.Additions or departures of key management personnel;9.Issuances of debt or equity securities;10.Significant lawsuits, including patent or shareholder litigation;11.Changes in the market valuations of similar companies;12.Sales of additional ordinary shares or other securities by us or our shareholders in the future;13.Trading volume of our ordinary shares;14.Fluctuations in the exchange rate between the U.S. dollar and Renminbi;15.Negative market perception and media coverage of our company or other companies in the same or similar industry with us; and16.Other events or factors, many of which are beyond our control.15In addition, the stock market in general, and the NASDAQ Capital Market and software products and services companies in particular, have experiencedextreme price and volume fluctuations that have often been unrelated or disproportionate to the operating performance of these companies. Broad market andindustry factors may negatively affect the market price of our ordinary shares, regardless of our actual operating performance. Our ADSs and ordinary shares may be subject to the SEC’s penny stock rules which may make it difficult for brokerdealers to complete customer transactionsand trading activity in our securities.Our ADSs and ordinary shares may be deemed to be “penny stock” as that term is defined under the Securities Exchange Act of 1934, as amended. Pennystocks generally are equity securities with a price of less than $5.00 (other than securities registered on certain national securities exchanges or quoted on theNASDAQ system, provided that current price and volume information with respect to transactions in such securities is provided by the exchange or system). Pennystock rules impose additional sales practice requirements on brokerdealers who sell to persons other than established customers and “accredited investors.” Theterm “accredited investor” refers generally to institutions with assets in excess of $5,000,000 or individuals with a net worth in excess of $1,000,000 or annual incomeexceeding $200,000 or $300,000 jointly with their spouse in each of the prior two years.The penny stock rules require a brokerdealer, prior to a transaction in a penny stock not otherwise exempt from the rules, to deliver a standardized riskdisclosure document in a form prepared by the SEC, which provides information about penny stocks and the nature and level of risks in the penny stockmarket. Moreover, brokerdealers are required to determine whether an investment in a penny stock is a suitable investment for a prospective investor. A brokerdealer must receive a written agreement to the transaction from the investor setting forth the identity and quantity of the penny stock to be purchased. Theserequirements may make it more difficult for brokerdealers to effectuate customer transactions and trading activity in our securities. As a result, the market price ofour ADSs and ordinary shares may be depressed, and you may find it more difficult to sell our ADSs or ordinary shares.Sales of a substantial number of ordinary shares or ADSs in the public market by our existing shareholders could cause the price of our ADSs to fall.Sales of a substantial number of our ordinary shares or ADSs in the public market or the perception that these sales might occur, could depress the marketprice of our ADSs and could impair our ability to raise capital through the sale of additional equity securities. We are unable to predict the effect that sales may haveon the prevailing market price of our ADSs.All of our existing shareholders prior to our May 2010 offering were subject to lockup agreements with the underwriters of the offering that restricted theshareholders’ ability to transfer ordinary shares or ADSs until expiration of the lockup period in November 2010. The lockup agreements limited the number ofordinary shares or ADSs that may be sold immediately following the public offering. Subject to certain limitations, approximately 1,000,000 of our total outstandingshares are now eligible for sale. Sales of ordinary shares by these shareholders could have a material adverse effect on the trading price of our ADSs.Future sales and issuances of our ordinary shares, or rights to purchase our ordinary shares, including pursuant to our 2010 Omnibus Incentive Plan, couldresult in additional dilution of the percentage ownership of our shareholders and could cause the price of our ordinary shares to fall.We expect that significant additional capital will be needed in the future to continue our planned operations. To the extent we raise additional capital byissuing equity securities, our shareholders may experience substantial dilution. We may sell ordinary shares, convertible securities or other equity securities in oneor more transactions at prices and in a manner we determine from time to time. If we sell ordinary shares, convertible securities or other equity securities in more thanone transaction, investors may be materially diluted by subsequent sales. Such sales may also result in material dilution to our existing shareholders, and newinvestors could gain rights superior to our existing shareholders.16We do not intend to pay dividends on our ordinary shares, so any returns will be limited to the value of our ADSs and ordinary shares.We have never declared or paid any cash dividend on our ordinary shares. We currently anticipate that we will retain future earnings for the development,operation and expansion of our business and do not anticipate declaring or paying any cash dividends for the foreseeable future. Any return shareholders willtherefore be limited to the value of their ADSs or ordinary shares.As the rights of shareholders under British Virgin Islands law differ from those under U.S. law, you may have fewer protections as a shareholder.Our corporate affairs will be governed by our memorandum of association and articles of association, the BVI Business Companies Act, 2004, or the BVIAct, of the British Virgin Islands and the common law of the British Virgin Islands. The rights of shareholders to take legal action against our directors, actions byminority shareholders and the fiduciary responsibilities of our directors under British Virgin Islands law are to a large extent governed by the BVI Act and thecommon law of the British Virgin Islands. The common law of the British Virgin Islands is derived in part from comparatively limited judicial precedent in the BritishVirgin Islands as well as from English common law, which has persuasive, but not binding, authority on a court in the British Virgin Islands. The rights of ourshareholders and the fiduciary responsibilities of our directors under British Virgin Islands law are not as clearly established as they would be under statutes orjudicial precedents in some jurisdictions in the United States. In particular, the British Virgin Islands has a less developed body of securities laws as compared to theUnited States, and some states (such as Delaware) have more fully developed and judicially interpreted bodies of corporate law.As a result of all of the above, holders of our ADSs and ordinary shares may have more difficulty in protecting their interests through actions against ourmanagement, directors or major shareholders than they would as shareholders of a U.S. company.British Virgin Islands companies may not be able to initiate shareholder derivative actions, thereby depriving shareholders of the ability to protect theirinterests.British Virgin Islands companies may not have standing to initiate a shareholder derivative action in a federal court of the United States. The circumstancesin which any such action may be brought, and the procedures and defenses that may be available in respect to any such action, may result in the rights ofshareholders of a British Virgin Islands company being more limited than those of shareholders of a company organized in the United States. Accordingly,shareholders may have fewer alternatives available to them if they believe that corporate wrongdoing has occurred. The British Virgin Islands courts are alsounlikely to recognize or enforce against us judgments of courts in the United States based on certain liability provisions of U.S. securities law; and to imposeliabilities against us, in original actions brought in the British Virgin Islands, based on certain liability provisions of U.S. securities laws that are penal in nature.There is no statutory recognition in the British Virgin Islands of judgments obtained in the United States, although the courts of the British Virgin Islands willgenerally recognize and enforce the nonpenal judgment of a foreign court of competent jurisdiction without retrial on the merits.The laws of the British Virgin Islands provide little protection for minority shareholders, so minority shareholders will have little or no recourse if theshareholders are dissatisfied with the conduct of our affairs.Under the law of the British Virgin Islands, there is little statutory law for the protection of minority shareholders other than the provisions of the BVI Actdealing with shareholder remedies. The principal protection under statutory law is that shareholders may bring an action to enforce the constituent documents ofthe corporation, our memorandum of association and articles of association. Shareholders are entitled to have the affairs of the company conducted in accordancewith the general law and the memorandum of association and articles of association.17There are common law rights for the protection of shareholders that may be invoked, largely dependent on English company law, since the common law ofthe British Virgin Islands is limited. Under the general rule pursuant to English company law known as the rule in Foss v. Harbottle, a court will generally refuse tointerfere with the management of a company at the insistence of a minority of its shareholders who express dissatisfaction with the conduct of the company’s affairsby the majority or the board of directors. However, every shareholder is entitled to have the affairs of the company conducted properly according to law and thecompany’s constituent documents. As such, if those who control the company have persistently disregarded the requirements of company law or the provisions ofthe company’s memorandum of association and articles of association, then the courts will grant relief. Generally, the areas in which the courts will intervene are thefollowing: (1) an act complained of which is outside the scope of the authorized business or is illegal or not capable of ratification by the majority; (2) acts thatconstitute fraud on the minority where the wrongdoers control the company; (3) acts that infringe on the personal rights of the shareholders, such as the right tovote; and (4) where the company has not complied with provisions requiring approval of a majority of shareholders, which are more limited than the rights affordedminority shareholders under the laws of many states in the United States.Antitakeover provisions in our memorandum of association and articles of association and our right to issue preference shares could make a thirdpartyacquisition of us difficult.Some provisions of our memorandum of association and articles of association may discourage, delay or prevent a change in control of our company ormanagement that shareholders may consider favorable, including provisions that authorize our board of directors to issue preference shares in one or more seriesand to designate the price, rights, preferences, privileges and restrictions of such preference shares.If you hold our ADSs, you may not have the same voting rights as the holders of our ordinary shares and must act through the depositary to exercise your rights.Holders of our ADSs will not be able to exercise voting rights attaching to the shares evidenced by our ADSs on an individual basis. Holders of our ADSswill appoint the depositary or its nominee as their representative to exercise the voting rights attaching to the shares represented by the ADSs. You may not receivevoting materials in time to instruct the depositary to vote, and it is possible that you, or persons who hold their ADSs through brokers, dealers or other third parties,will not have the opportunity to exercise a right to vote. Upon our written request, the depositary will mail to you a shareholder meeting notice which contains,among other things, a statement as to the manner in which your voting instructions may be given, including an express indication that such instructions may begiven or deemed given to the depositary to give a discretionary proxy to a person designated by us if no instructions are received by the depositary from you on orbefore the response date established by the depositary. However, no voting instruction shall be deemed given and no such discretionary proxy shall be given withrespect to any matter as to which we inform the depositary that (i) we do not wish such proxy given, (ii) substantial opposition exists, or (iii) such matter materiallyand adversely affects the rights of shareholders. We will make all reasonable efforts to cause the depositary to extend voting rights to you in a timely manner, butyou may not receive the voting materials in time to ensure that you can instruct the depositary to vote your ADSs. Furthermore, the depositary and its agents willnot be responsible for any failure to carry out any instructions to vote, for the manner in which any vote is cast or for the effect of any such vote. As a result, youmay not be able to exercise your right to vote and you may lack recourse if your ADSs are not voted as you requested. In addition, in your capacity as an ADSholder, you will not be able to call a shareholders’ meeting.You may not be able to participate in rights offerings and may experience dilution of your holdings as a result.We may from time to time distribute rights to our shareholders, including rights to acquire our securities. However, we may not, and under the depositagreement for the ADSs, the depositary will not, offer those rights to ADS holders unless both the rights and the underlying securities to be distributed to ADSholders are registered under the Securities Act, or the distribution of them to ADS holders is exempted from registration under the Securities Act with respect to allholders of ADSs. We are under no obligation to file a registration statement with respect to any such rights or underlying securities or to endeavor to cause such aregistration statement to be declared effective. In addition, we may not be able to rely on an exemption from registration under the Securities Act to distribute suchrights and securities. Accordingly, holders of our ADSs may be unable to participate in our rights offerings and may experience dilution in their holdings as a result.You may be subject to limitations on transfer of your ADSs.Your ADSs are transferable on the books of the depositary. However, the depositary may close its transfer books at any time or from time to time when itdeems expedient in connection with the performance of its duties. In addition, the depositary may refuse to deliver, transfer or register transfers of ADSs generallywhen our books or the books of the depositary are closed, or at any time if we or the depositary deem it advisable to do so because of any requirement of law or ofany government or governmental body, or under any provision of the deposit agreement, or for any other reason.18We may be a passive foreign investment company, of PFIC, which could lead to additional taxes for U.S. holders of our ADSs or ordinary shares.We do not expect to be, for U.S. federal income tax purposes, a passive foreign investment company, or a PFIC, which is a foreign company for which, inany given taxable year, either at least 75% of its gross income is passive income, or investment income in general, or at least 50% of its assets produce or are held toproduce passive income, for the current taxable year, and we expect to operate in such a manner so as not to become a PFIC for any future taxable year. However,because the determination of PFIC status for any taxable year cannot be made until after the close of such year and requires extensive factual investigation,including ascertaining the fair market value of our assets on a quarterly basis and determining whether each item of gross income that we earn is passive income, wecannot assure you that we will not become a PFIC for the current taxable year or any future taxable year. If we are or become a PFIC, a U.S. holder of our ADSs orordinary shares could be subject to additional U.S. federal income taxes on gain recognized with respect to the ADSs or ordinary shares and on certain distributions,plus an interest charge on certain taxes treated as having been deferred under the PFIC rules. Noncorporate U.S. holders will not be eligible for reduced rates oftaxation on any dividends received from us if we are a PFIC in the taxable year in which such dividends are paid or in the preceding taxable year.If our ordinary shares are listed on the NASDAQ Capital Market and the trading price of our ordinary shares fails to comply with the continued listingrequirements of the NASDAQ Capital Market, we would face possible delisting, which would result in a limited public market for our ordinary shares andmake obtaining future debt or equity financing more difficult for us.Companies listed on NASDAQ are subject to delisting for, among other things, failure to maintain a minimum closing bid price of $1.00 per share for 30consecutive business days. On December 19, 2011, we received a letter from NASDAQ indicating that for the last 30 consecutive business days, the closing bidprice of our ADSs fell below the minimum $1.00 per share requirement pursuant to NASDAQ Listing Rule 5550(a)(2) for continued listing on the NASDAQ CapitalMarket. We regained compliance with the minimum bid price requirement for continued listing set forth in NASDAQ Listing Rule 5550(a)(2), as its ADS with itsunderlying ordinary share has achieved a closing bid price of $1.00 or greater for the 10 consecutive business days from November 6 to November 23, 2012 byimplementing a 1for10 combination, or reverse split of the ordinary shares effective November 6, 2012. When listed, we cannot be sure that the price of our ordinaryshares will comply with this requirement for continued listing on the NASDAQ Capital Market in the future. If we were not able to do so, our ordinary shares wouldbe subject to delisting and would likely trade on the overthecounter market. If our ordinary shares were to trade on the overthecounter market, selling ourordinary shares could be more difficult because smaller quantities of shares would likely be bought and sold, transactions could be delayed, and security analysts’coverage of us may be reduced. In addition, brokerdealers have certain regulatory burdens imposed upon them, which may discourage brokerdealers from effectingtransactions in our ordinary shares, further limiting the liquidity of our ordinary shares. As a result, the market price of our ordinary may be depressed, and you mayfind it more difficult to sell our ordinary shares. Such delisting from the NASDAQ Capital Market and continued or further declines in our share price could alsogreatly impair our ability to raise additional necessary capital through equity or debt financing.ITEM 4. INFORMATION ON THE COMPANY.A . HISTORY AND DEVELOPMENT OF THE COMPANY.OverviewWe are a holding company and conduct our operations through our whollyowned subsidiary named LK Technology Ltd., a British Virgin Islands limitedliability company (“LK Technology”), and its whollyowned subsidiaries, MMB Limited and Mobile Media (China) Limited and their respective subsidiaries, whichhold the rights to deploy WiFi systems on about 700 trains in China, including 290 trains in which WiFi systems have already been installed and are in operation. InMay 2010, we consummated an initial public offering of our American Depository Shares, or ADSs, for gross proceeds of $16 million, and our ADSs were listed onthe NASDAQ Capital Market under the ticker symbol “KONE”. Our ordinary shares are not currently listed on any trading market. Our American Depository Shares(“ADSs”) were voluntarily delisted from the NASDAQ Capital Market on September 19, 2018. We have applied to NASDAQ for the listing of our ordinary shares onthe NASDAQ Capital Market and received an approval for listing of Ordinary Shares on August 6, 2018, and as of the date of this transition report, that applicationand approval are currently under review.19On August 17, 2018, we consummated an asset exchange transaction, pursuant to which we exchanged all issued and outstanding capital stock in TopskyInfoTech Holdings Pte Ltd., the parent of Softech, for the issued and outstanding capital stock of LK Technology (the “Asset Exchange”). In connection with theAsset Exchange, we changed our name on August 20, 2018, and on September 20, 2018, issued to the shareholders of C Media Limited, the former parent of LKTechnology, (i) 185,412,599 of our ordinary shares, par value $0.01 per share and (ii) 1,000,000 of our preferred shares. Upon the consummation of the AssetExchange, we ceased our previous business operations and became a company focused on the provision of WiFi and mobile application products for long distancerail travelers in China.On August 25, 2018, LK Technology entered into a Stock Purchase Agreement (the “Agreement”) with the shareholders (“Shareholders”) of SuperengineHoldings Limited, a limited liability company organized under the laws of the British Virgin Islands (the “Superengine”), pursuant to which LK Technology acquiredall of the issued and outstanding capital stock of Superengine for an aggregate purchase price of US$60 million (the “Purchase Price”), which are paid by theissuance of our Ordinary Shares in an amount equal to the quotient of (x) the Purchase Price divided by (y) the average of the closing prices of the Ordinary Shareson the NASDAQ Capital Market over the 12 months period preceding July 31, 2018. We are a party to the Agreement in connection with the issuance of theOrdinary Shares and certain other limited purposes.Corporate InformationOur principal executive offices are located at LAB32, SOHO 3Q, No 9, Guanghua Road, Chaoyang District, Beijing, People’s Republic of China 100020. Ourwebsite is www.luokung.com. We routinely post important information on our website. The information contained on our website is not a part of this transitionreport.Our agent for service of process in the United States is Worldwide Stock Transfer, LLC, the current transfer agent of the Company, with a mailing address ofOne University Plaza, Suite 505, Hackensack, New Jersey 07601.B. BUSINESS OVERVIEW.We are a Chinabased provider of rail WiFi and mobile application products for long distance travelers in China. Our primary mobile application, theLuoKuang platform, consists of the LuoKuang mobile applications, a series of supporting software at the server end, and railWiFi hardware and equipment on thetrains that we serve. The LuoKuang platform incorporates technology covered by 22 patents and about 34 software copy rights, and serves as a content and servicedistribution platform that is tailored for particular travel stages featuring geographic location and social interaction. The content and services distributed byLuoKuang contain information, entertainment, travel, ecommerce, online to offline (“O2O”), advertisement and marketing features.LuoKuang mainly provides personalized and precise services to long distance travelers in two locations: on the train and at the destination. Based on thetravel environment, the core elements of our users’ needs include staving off boredom on trains and discovering and exploring new locations upon arrival. The mainservices contain entertainment services (videos and audio, digital readings, games specific and tailored to the travel stage) and social services (satisfying thedemand for value discovery of unfamiliar destinations through social interaction among strangers based on locations). As of December 31, 2017, the LuoKuangplatform featured about 38 million users.The setting services on the train focus on providing entertainment content for passengers to pass time during longdistance travel in closed environments.For example, we provide access to long video formats such as movies and TV shows, short videos, music, digital readings and games.20We use the most valuable WiFi location—the train WiFi setting—as the entrance of our LuoKuang platform and mobile applications. Passengers typicallyride trains for longdistance and interprovincial travel purposes. The long periods of monotonous journeys and the cost concerns for roaming traffic fees enable thecombination of entertainment content service needs and WiFi access needs. Our railWiFi becomes a valuable and sophisticated WiFi service in this setting—notjust WiFi connection service, but a provider of sophisticated services through a WiFi connection. In addition, the annual traffic of 800,000 passengers onboardeach train makes rail WiFi a huge entry point for mobile applications. We do not define ourselves as a train WiFi communication service operator but as a longdistance travel mobile service provider. We provide users with free WiFi access so that users are able to connect to the LuoKuang platform and thus access relatedentertainment services, services on the train and destination services. The rail WiFi is our access point to a significant pool of users and the entrance to acquiringadditional users.The setting services focus on providing targeted push services to users while travelling in unfamiliar cities. Information and service guidance are preciselypushed to appeal to the interests and tastes (eating, drinking, shopping, touring and culture) of individual users (cuisine specialties and local snacks, local events,viewing sights, culture, history, stories). The service guidance is generated, shared and distributed by individual users (travelers, local residents, local businesses)interacting with current locations and featuring users who generated contents from selfmedia and small and medium vertical contents providers).Based on the GIS (geoinformation system), Superengine is a provider of big spatialtemporal data, network graphic image technology and relevant service.Its super engine series includes computer graphic image engines and spatial database engines. Spatialtemporal cloud index is the core of the company’s spatialtemporal data engines. It is equivalent to the neural network of the big data and the Internet. It extends the value of its products and platform to its data serviceproviders. In cooperation, its service providers can be divided into three categories, namely, basic geographic data providers, industrial data providers andbehavioral data providers). Superengine’s industriesoriented spatialtemporal data engine was launched in 2016. The spatialtemporal GIS platform has been appliedin industries such as aerospace, power grid, surveying & mapping, agriculture, cultural relic preservation, water conservancy, public security, railway section, smartcities, and business location selection.Our primary sources of revenue are advertising and marketing promotion revenues.Our Industry — Mobile Internet IndustryOur products and services are engaged in the mobile internet industry. Our main services consist of entertainment services (videos, audio, digital readings,games that are tailormade for passengers on train) and other services including satisfying the demand for value discovery of unfamiliar destinations through socialinteractions among strangers based in such locations). The mobile internet industry in China is rapidly growing and is likely to be in a longterm growth trend.According to the Mobile Internet Blue Book of China Mobile Internet Report, in 2017 the market size of China mobile internet reached RMB 605 billion. Now China isin a leading position in terms of smartphone, mobile communication network and mobile application services. The pool of users is anticipated to keep expandingthrough the promotion and popularization of smartphones and the expansion of the mobile internet market.Video is the leading online entertainment format in China. According to the iResearch Report, over 80% of total time spent by users on online entertainmentin China in 2016 was internet video. Online entertainment, especially internet video, is attractive to Chinese users due to many favorable factors, including easyaccessibility, wide content selection, and innovative platforms with social features.For 2017, the transaction volume of China mobile ecommerce market reached to over RMB 4 trillion according to the China Mobile Ecommerce IndustryResearch Report from iResearch, representing an increase of 19.1%. For the next few years, China mobile online shopping will likely maintain steady growth. Thefocal point of competition in China mobile ecommerce market has shifted from infrastructure service providers to integrated and accurate services providers.Drawing in users with compelling content in diversified scenes has become a trend.21The revenue for China mobile gaming industry reached RMB 144.58 billion for the year of 2017, according to the China Mobile Game Industry ResearchReport from iResearch. With increased investment by largescale enterprises in the sector of mobile games and the strict enforcement of the mobile game industryrelated regulatory policy guidelines, the mobile game market as a whole will become more organized and standardized.According to the Annual Analysis of China Mobile Reading Industry from Analysis, for the year of 2017, the mobile reading market in China reached toRMB 14.04 billion. By the end of 2016, the size of China mobile's reading market reached RMB 11.86 billion, showing an increase of 18.38% in 2017.The closed and boring environment for passengers of longdistance travel and high roaming charges lead to a strong demand to use our rail WiFi services.Passengers, through their own mobile phone, have access to the free WiFi network in each carriage, access to our rich mobile internet entertainment content andtravel services. According to the annual statistical bulletin of China Railway Corporation in 2017, there were about 6,030 trains in operation in China in 2017,consisting of 2,935 high speed trains and 3,095 express trains. The rail WiFi system that we have installed are currently all on express trains. The market value will bemultiplied several times following the extended coverage of service on other trains.Our StrengthsWe believe the following strengths differentiate us from our competitors:Our strategy is to build up personalized and targeted service products for travelers through rail WiFi networks, enabling our services to evolve into a coredriving distribution platform that provides content, news, games, ecommerce, OTO service, travel services and advertising and marketing. In comparison, ourcompetitors offer simple forms of media services on trains. We focus on personalized and targeted matching between users on long distance trips and services. Ourcompetitors focus on operating and generating internet traffic.We possess a complete set of technology system including network, client end and service and operation platform. We have patent protections for WiFiequipment on trains. Our technology strengths are briefly summarized below.WiFi EquipmentPatent protected. Supports WiFi/3G/4G telecom modules; 4 core CPU with X86 architecture, and SSD hard disk with big storage for localcontents.InfrastructureThe technology infrastructures include the application program system, big data gathering and processing systems, intelligence cloudsservice deployment structure systems and our WiFi hardware server deployment structure system. The operation center, big data center,contents center and railWiFi server system are built on this infrastructure. On the above layer, the equipment management platform,account and payment platform, contents management platform and advertisement distribution platform are set up for daily managementpurpose.LuoKuang strengthens the connection of services among people, setting and locations. In catering to people on the move, we anticipate strengthening therelationship between users and their locations in a given moment. Currently, LuoKuang provides the link between users and thirdparty service providers andprovides value added services to both users and thirdparty service providers. The connection is not simply a traffic diversion, but also the direct presentation ofrelevant services in the LuoKuang platform. The open API interface and independent product software package allows easy access by service providers anddevelopers and supports data service, advertisement operations, billing, users promotion and product marketing services. As an API product, LuoKuang does notcreate content or services. The content and services are provided by our partners in the LuoKuang platform. Now, the majority of top mobile internet content andservices providers in China have a presence in the Luokuang platform. Those include, but are not limited to, Toutiao, Wangyi News, iqiyi, Letv, YoudianCinema(Hollywood films), Sohu video, Phoenix Video, Kugou Music, FM Qingting, iReader, Baidu Literature, Phoenix Novel, Baidu Game, Meituan, Dianping, andsimilar content providers.22Our StrategyLuoKuang is positioned to provide API interface services and geographic information social services. The API interface services are provided within thetypical BC model. LuoKuang pushes the content and services from thirdparty service providers to users. The local businesses, service practitioners, residents, andforeign travelers are all defined as a “user” and may participate in social interactions based on local value information and generate UGC content. The socalled localvalue information is defined as information, views, evaluations, experiences and experience sharing related to the local cultural scene, native products,entertainment, food, tourism and activities.The LuoKuang user growth strategy is to have access to users through the travelers’ use of mobile devices in connection with longdistance train travel.Through deploying WiFi systems on trains and providing free WiFi access to passengers, LuoKuang is able to have consistent access to longdistance travelers.The WiFi system on the train has become a powerful user portal at the early stage of LuoKuang and has gained substantial user traffic. We are in a leading positionin terms of numbers of trains contracted and trains in operation with our free WiFi system. We have contracted with about 700 trains, which cover almost 560 millionannual passenger trips. As of the date of this report, approximately 290 trains are operating our rail WiFi system. We will continue to install our rail WiFi system inthe following years.The development strategy for LuoKuang encompasses the following:1.Enhance our local cycle service (a recommendation service system based on the location of travelers after their arrival, recommendations includingtourist attractions, local specialties and other items of interest), strengthen services for arrivals in the form of social interaction and focus on the valueof relationships between users and their current locations.2.Focus on the development of geographic positioning technology. Get the business of local cycle and users on train mixed together. We will put oureffort to maximize the synergy effect.3.Big Data: Behavior data about passenger trips is obtained via the traffic entrance of rail WiFi and these data will help to optimize our product.4.While enhancing setting service experiences and optimizing entertainment experiences, we will enrich ecommerce services on trains featuringrecommendations of customized products and ecommerce shopping guidance of products labeled with specific geographic location (and trafficdiversion).5.Focus on API positioning and attract more premium vertical service providers (contents and services).Intellectual PropertyWe have registered the following software copyrights, patents and trademarks for our business operations. We believe this intellectual property forms anintegral part of our competitive strength.23Patents:We have been granted some inventions by the State Intellectual Property Office of PRC. We possess a complete set of technology system includingnetwork, client end and service and operation platform. We have patent protections for WiFi equipment on trains. We have received the following patents:No.Name of patentTypeRegistrationNumberDate of Insurance1.Wireless communication multimedia chip business consumer informationacquisition terminal deviceInventionZL 2010 2 0528767.9Sep 21, 20112.A user behavior processing method and device for intelligent terminalInventionZL 2013 1 0301728.3May 27, 20153.A global positioning system terminal deviceInventionZL 2010 2 0253452.8Nov 7, 20114.A wireless multimedia serverInventionZL 2013 2 0220183.9Nov 13, 20135.Ordering system of passengers on trainInventionZL 2015 2 0095381.6Aug 5, 20156.A wireless multimedia serverInventionZL 2015 2 0201382.4Oct 28, 20157.An antenna structureInventionZL 2016 2 0424352.4Mar 1, 20178.Spatial data progressive transmission method and deviceInvention201010617383.9Jun 15, 20169.Methods and devices for conflict detection and avoidance of spatial entity elementlabelingInvention201010617385.8Mar 26, 201410.Spatial data processing method and deviceInvention201010617399.XJun 26, 201311.Method and device of spatial data simplificationInvention201010617400.9Mar 13, 201312.Method and device for judging the occlusion type of space entityInvention201010617403.2Sep 25, 201313.A method and device for distributed mapping of 3d model dataInvention201110274924.7Mar 26, 201414.Data simplification of 3d model, gradual transmission method and deviceInvention201110275336.5Mar 25, 201515.Spatial data transmission method and deviceInvention201110306393.5Dec 13, 201416.Methods and devices for spatial data processing, simplification and progressivetransmissionInvention201210104250.0Jun 10, 201517.Spatial data progressive transmission method and deviceInvention201310367021.2Jun 23, 201718.Simplification method and device of spatial dataInvention201310367128.7Sep 22, 201719.The method and device to accelerate transmission and display of graphic dataacross platformsInvention201210116149.7Aug 10, 201620.Methods and devices related to spatial data compression, decompression andprogressive transmissionInvention201310136682.4Nov 10, 2017We also have two patents outside of China.No.Name of patentCountryNationalRegistrationNumberDate ofInsurance1.Spatial data processing method and deviceJapan2012547439Jun 20, 20142.Methods and devices related to spatial data compression, decompression andprogressive transmissionU.S.A14/394,610Sep 5, 201724Software Copyrights:We have received the following software copyrights from the National Copyright Administration (“NCA”) of PRC:No.Name of CopyrightAchievement approachRegistration numberTime of obtainExpire time1.WAP PUSH Business operation platformsystemIndependent research anddevelopment2007SRBJ1464Jul 23, 200750 years2.TDSCDMA Streaming media businessmanagement platform software V1.0Independent research anddevelopment2009SRBJ0412Jan 22, 200950 years3.Content management platform systemsoftware V1.0Independent research anddevelopment2009SRBJ1374Apr 1, 200950 years4.Mobile multimedia broadcast electronicservice guide system software V1.0Independent research anddevelopment2009SRBJ1365Apr 1, 200950 years5.Mobile video business operation platformsystem V1.0Independent research anddevelopment2007SRBJ1463Jul 23, 200750 years6.Mobile multimedia broadcast emergencybroadcast platform software V1.0Independent research anddevelopment2010SRBJ0720Mar 5, 201050 years7.Mobile multimedia broadcast audio richmedia interactive platform softwareV1.0Independent research anddevelopment2010SRBJ0719Mar 5, 201050 years8.Printer typesetting and printing softwareV1.0Independent research anddevelopment2011SRBJ4190Sep 28, 201150 years9.Electronic newspaper business supportplatform software V1.0Independent research anddevelopment2011SRBJ4186Sep 28, 201150 years10.Public information business platformsoftware V1.0Independent research anddevelopment2011SRBJ3810Sep 27, 201150 years11.User interface scripting software V1.0Independent research anddevelopment2011SRBJ3809Sep 27, 201150 years12.Integrated business management platformsoftware V1.0Independent research anddevelopment2012SR003002Jan 16, 201250 years13.Interactive business development platformsoftwareIndependent research anddevelopment2011SRBJ4593Nov 29, 201150 years14.Instant messaging and messaging systemsoftwareIndependent research anddevelopment2014SR122231Aug 5, 201450 years15.General statistical platform software forclient productsIndependent research anddevelopment2014SR216662Dec 30, 201450 years16.CMMB Data broadcast managementplatform softwareIndependent research anddevelopment2009SRBJ0391Jan 22, 200950 years17.Integrated passenger train service systemIndependent research anddevelopment2012SR083665Sep 5, 201250 years25No.Name of CopyrightAchievement approachRegistration numberTime of obtainExpire time18.JHBY Train inspection managementsystemIndependent research anddevelopment2013SR015105Feb 21, 201350 years19.Integrated information engine platformsoftware V1.0Independent research anddevelopment2014SR040347Nov 30, 200150 years20.Super information engine developmentplatform software V5.0Independent research anddevelopment2014SR036792Mar 5, 200350 years21.Core map super network informationengine platform software V1.0Independent research anddevelopment2014SR036772Sep 15, 200750 years22.Integrated management of the grid gissoftware V1.0Independent research anddevelopment2014SR036808Jun 20, 200850 years23.Core map rural power grid equipment GPSpatrol system software V1.0Independent research anddevelopment2014SR036810Dec 10, 200850 years24.Diagram grid patrol PDA system softwareV1.0Independent research anddevelopment2014SR036778Dec 12, 200850 years25.Core map geographic information enginedesktop platform software V1.0Independent research anddevelopment2014SR036614Jan 15, 200950 years26.Integrated management of the gridgeographic information Web systemsoftware V1.0Independent research anddevelopment2014SR036799Mar 10, 200950 years27.Core map railway power supply equipmentGPS patrol system software V1.0Independent research anddevelopment2014SR036783Mar 25, 201050 years28.Core map network 3 d map server softwareV1.0Independent research anddevelopment2014SR036788Feb 20, 201150 years29.Core map network 3d map clientsoftwareV1.0Independent research anddevelopment2014SR036637Feb 22, 201150 years30.Core map 3d map network publishingplatform software V1.0Independent research anddevelopment2014SR036633Mar 10, 201150 years31.Core map 3d map network release pluginsystem software V1.0Independent research anddevelopment2014SR036622Mar 15, 201150 years32.Core map network 3d map smartphoneplatform software V1.0Independent research anddevelopment2014SR036638Apr 28, 201150 years33.Core map network GIS Shared mobileplatform software V1.0Independent research anddevelopment2014SR036634Oct 31, 201150 years34.Core map network GIS sharing platformsoftware V1.0Independent research anddevelopment2014SR036639Dec 16, 201150 yearsTrademarks:We have registered the following trademarks with the Trademark Office, State Administration for Industry and Commerce in the PRC:NoTrademarkClassification NumberValid PeriodRegistration Number1Y图形382010.04.212020.04.2067460692Y图形412010.09.072020.09.0667460673YRADIO文字352010.07.212020.07.2067334374YRADIO文字382010.04.21.2020.04.2067334385YRADIO文字412010.09.072020.09.0667334396LookLook图形382009.04.072019.04.0646660517LookLook图形422008.12.212018.12.2046660508YTV文字352010.07.212020.07.2067335799YTV文字382010.05.282020.05.27673357810YTV文字412010.09.072020.09.06673358111YTV文字422010.09.072020.09.06673358012YOUTV文字352010.07.212020.07.20673344013YOUTV文字382010.05.282020.05.27673344114xfeng文字352012.03.282022.03.27922914526NoTrademarkClassification NumberValid PeriodRegistration 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NumberValid PeriodRegistration Number58箩筐图形382016.06.142026.06.131658022959箩筐图形352016.06.142026.06.131658023060箩筐图形92016.06.142026.06.131658023161微时光文字422016.09.282026.09.271658024762传游录屏文字92016.06.142026.06.131678214463传游录屏文字352016.06.142026.06.131678214364传游录屏文字382016.06.142026.06.131678214265传游录屏文字412016.06.142026.06.131678214166传游录屏文字422016.06.142026.06.131678214067录游器文字92016.06.142026.06.131678213568录游器文字352016.06.142026.06.131678213669录游器文字382016.06.142026.06.131678213770录游器文字412016.06.142026.06.131678213871录游器文字422016.06.142026.06.131678213972畅联TV文字412016.01.212026.01.201579246773畅联TV文字382016.01.212026.01.201579246874SuperEngine92016.01.212026.01.20812572275SuperEngine422016.01.212026.01.20812572876超擎9/422016.01.212026.01.201647320577SUPERENGINE9/422016.01.212026.01.2016473185*See below for an explanation of each classification number used in the table above.Classification No. 9: data processing apparatus, couplers (data processing equipment), computer software (recorded), monitors (computer programs), smartcards (integrated circuit cards), electrodynamic apparatus for the remote control of signals, alarms, and electric installations for the remote control of industrialoperations.Classification No. 35: auctioneering, sales promotion for others, marketing analysis, marketing research, importexport agencies, advisory services forbusiness management, business management for franchise, personnel management consultancy, relocation services for businesses, and systemization ofinformation into computer databases.Classification No. 38: Include services that enable at least sensory communication between two people. Such services include that allow one person to talkto another, send messages from one person to another, Make verbal or visual contact between one person and the other. This classification especially include theservice for broadcasting radio or television programs. Except for radio advertising services and telemarketing services.Classification No. 41: instruction services, teaching, education information, tuition, arranging and conducting of colloquiums, publication of electronicbooks and journals online, amusements, and vocational guidance.Classification No. 42: technical research, studies (technical project), computer software design, updating of computer software, recovery of computer data,computer systems analysis, installation of computer software, computer antivirus protection, and research and development for others. 28Business Certificates and QualificationsWe have obtained all necessary regulatory certifications to conduct our business in the PRC, including without limitation, the following: SoftwareEnterprise Recognition Certificate, Computer Information System Integration Qualification Certificate, Construction Enterprise Qualification Certificate, and SecurityTechnology & Protection Enterprise Certificate. We have also been properly certified as a hightech enterprise and have met the ISO 9001:2000 qualificationmanagement system.Legal ProceedingsAlthough we may, from time to time, be involved in litigation and claims arising out of our operations in the normal course of business, we do not believethat we are a party to any litigation that will have a material adverse impact on our financial condition or results of operations. To our knowledge, other than asdescribed below there are no material legal proceedings threatened against us. From time to time, we may be subject to various claims and legal actions arising in theordinary course of business. Following the consummation of the AEA, we became successor in interest to the legal proceedings described below.Litigation with Shanghai Fusheng Weier Intelligent Control Technology Co., Ltd.On January 22, 2016, Zhong Chuan Rui You and Shanghai Fusheng Weier Intelligent Control Technology Co., Ltd. (“Fusheng Weier”) signed a contract forequipment of $1,652,842 (RMB10,800,000). Since Zhong Chuan Rui You did not make the payments of $1,126,381 (RMB7,360,000) on the due dates, Fusheng Weierfiled a lawsuit against Zhong Chuan Rui You in Shanghai Xuhui District People's Court on October 8, 2016. On March 9, 2017, Xuhui District People's Court issuedthe verdict requiring Zhong Chuan Rui You to pay the overdue debts. In August 2017, C Media Limited made the payment of $512,075 (RMB3,346,000). Theremaining balance has been accrued in accounts payable. The payment schedule for the remaining balance is being negotiated by the two parties. On February 5,2018, a hearing was held adding Zhong Chuan Shi Xun as a defendant. The Group plans to settle the remaining balance within one year.Lawsuit with Gansu Jinlun Culture Media Co., Ltd.On August 22, 2014, Zhong Chuan Rui You and Gansu Jinlun Culture Media Co., Ltd. (“Gansu Jinlun”) signed a “Lanzhou Railway Bureau AirconditionedTrain WiFi Network System Advertising Operation Rights Agreement” for advertising on 72 trains of $1,467,880 (RMB9,604,633). Due to the dispute on theproject implementation, Zhong Chuan Rui You did not pay the advertising fee. On August 23, 2017, Gansu Jinlun filed a lawsuit with Gansu Intermediate People'sCourt. On December 19, 2017, Gansu Intermediate People's Court issued a verdict, ruling that Zhong Chuan Rui You settle the overdue advertising fee. Since only 18out of 72 trains have been installed with Wifi network system, Zhong Chuan Rui You disputed and appealed to the verdict. The next court trial date has not yet beendetermined.C Media and Gansu Jinlun are negotiating a potential settlement to resume the contract. According to the legal counsel, it is probable that the settlementwill amount to approximately $459,000 (RMB3,000,000); therefore, this amount has been accrued in accounts payable as at December 31, 2017.Litigation with Shenzhen Hua Xun Fang Zhou Technology Co., Ltd.On June 16, 2015, Zhong Chuan Rui You signed a cooperation agreement with Shenzhen Hua Xun Fang Zhou Technology Co., Ltd. (“Shenzhen Hua Xun”)and Xuesong Song, a major shareholder of C Media Limited. Pursuant to this agreement, Zhong Chuan Rui You procures equipment from Shenzhen Hua Xun.Xuesong Song acts as a joint liability guarantor for the entire debts of Zhong Chuan Rui You under this agreement. As Zhong Chuan Rui You did not make thepayments on the due dates, Shenzhen Hua Xun filed a lawsuit with Shenzhen Baoan District People's Court on May 31, 2016. On November 1, 2016, Zhong ChuanRui You, Xuesong Song and Shenzhen Hua Xun reached a settlement in Shenzhen Baoan District People's Court to settle $1,735,389 (RMB11,355,000) in fourinstalments. On December 30, 2017, the debt was assigned to C Media Limited.29C. ORGANIZATIONAL STRUCTUREThe following diagram illustrates our corporate structure and the place of formation and affiliation of each of our subsidiaries and affiliates as of September30, 2018.30The following diagram illustrates our corporate structure and the place of formation and affiliation of each of our subsidiaries and affiliates as of December31, 2017.Contractual Arrangements with Beijing Zhong Chuan Shi Xun Technology Limited’s Subsidiaries and Their Respective ShareholdersTo comply with the PRC legal restrictions on foreign ownership of companies that operate mobile application services, our subsidiaries operate in suchrestricted service areas in the PRC through certain PRC domestic companies, whose equity interests are held by certain management members or founders of the LKTechnology Ltd. Part of the registered capital of these PRC domestic companies was funded by certain management members or founders of LK Technology Ltd. LKTechnology Ltd., through its subsidiary Zhong Chuan Tian Xia Information and Technology (Shenzhen) Limited (the “WFOE”), has entered into an exclusivebusiness cooperation agreement with Beijing Zhong Chuan Shi Xun Technology Limited (“Zhong Chuan Shi Xun” or the “VIE”) the PRC domestic company, whichentitle the WFOE to receive a majority of profit of Zhong Chuan Shi Xun. In addition, Zhong Chuan Tian Xia Information and Technology (Shenzhen) Limited hasentered into certain agreements with those management members or founders, including equity interest pledge agreement of the equity interests held by thosemanagement members or founders and exclusive option agreement to acquire the equity interests in these companies when permitted by the PRC laws, rules andregulations. Details of the typical VIE structure of our significant consolidated VIE, primarily domestic companies associated with the operations such as ZhongChuan Shi Xun and its subsidiaries of Zhong Chuan Rui You, Huoerguosi Luokuang and Jiu Zhou Shi Dai, are set forth below: Exclusive Business Cooperation AgreementThe VIE has entered into an exclusive business services agreement with the WFOE, pursuant to which the WFOE provides exclusive business services tothe VIE. In exchange, the VIE pays a service fee to the WFOE which amounts to be no less than the 80% of the VIE’s aftertax profit, resulting in a transfer ofsubstantially all of the profits from the VIE to the WFOE.Exclusive Option AgreementThe VIE equity holders have granted the WFOE exclusive call options to purchase their equity interest in the VIE at an exercise price equal to the minimumprice as permitted by applicable PRC laws. The WFOE may nominate another entity or individual to purchase the equity interest, if applicable, under the call options.Each call option is exercisable subject to the condition that applicable PRC laws, rules and regulations do not prohibit completion of the transfer of the equityinterest pursuant to the call option. The VIE agrees not to distribute any dividends to the VIE equity holders without the approval of WFOE.31Equity Interest Pledge AgreementPursuant to the equity pledge agreement, the VIE equity holders have pledged all of their interests in the equity of the VIE as a continuing first prioritysecurity interest in favor of the WFOE to secure the performance of obligations by the VIEs and/or the equity holders under the exclusive business cooperationagreement. The WFOE is entitled to exercise its right to dispose of the VIE equity holders’ pledged interests in the equity of the VIE and has priority in receivingpayment by the application of proceeds from the auction or sale of such pledged interests, in the event of any breach or default under the exclusive businesscooperation agreement, if applicable. These equity pledge agreement remain in force until all the obligations under the exclusive business cooperation agreementhave been fulfilled.The exclusive business cooperation agreement and equity interest pledge agreement described above also enable the Company to receive substantially allof the economic benefits from the VIE by typically entitling the WFOE to all dividends and other distributions declared by the VIE and to any distributions orproceeds from the disposal by the VIE equity holders of their equity interests in the VIE.D. PROPERTY AND EQUIPMENTWe lease offices located at Lab 30 & Lab 32, SOHO 3Q, No 9, Guanghua Road, Chaoyang District, Beijing, which covers a floor space of 600 square meters.These leases expire at different times throughout 2018 and are renewable upon negotiation.ITEM 4A. UNRESOLVED STAFF COMMENTSNone.ITEM 5. OPERATING AND FINANCIAL REVIEW AND PROSPECTSA . OPERATING RESULTS.The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our consolidatedfinancial statements and the notes to those financial statements appearing elsewhere in this report. This discussion and analysis contains forwardlookingstatements that involve significant risks and uncertainties. As a result of many factors, such as our anticipated growth strategy, our plans to recruit moreemployees, our plans to invest in research and development to enhance our product or service lines, our future business development, results of operations andfinancial condition, expected changes in our net revenues and certain cost or expense items, our ability to attract and retain customers, trends and competitionin the enterprise mobile software application market, and the factors set forth elsewhere in this report, our actual results may differ materially from thoseanticipated in these forwardlooking statements. In light of those risks and uncertainties, there can be no assurance that the forwardlooking statementscontained in this report will in fact occur. You should not place undue reliance on the forwardlooking statements contained in this report.The forwardlooking statements speak only as of the date on which they are made, and, except to the extent required by U.S. federal securities laws, weundertake no obligation to update any forwardlooking statement to reflect events or circumstances after the date on which the statement is made or to reflectthe occurrence of unanticipated events. Further, the information about our intentions contained in this report is a statement of our intention as of the date of thisreport and is based upon, among other things, the existing regulatory environment, industry conditions, market conditions and prices and our assumptions as ofsuch date. We may change our intentions, at any time and without notice, based upon any changes in such factors, in our assumptions or otherwise.32Unless the context otherwise requires, all references to (i) “PRC” and “China” are to the People’s Republic of China; (ii) “U.S. dollar,” “$” and “US$”are to United States dollars; and (iii) “RMB”, “Yuan” and Renminbi are to the currency of the PRC or China.OverviewLuokung Technology was incorporated on October 27, 2009 under the laws of the British Virgin Islands. We are a holding company and conduct ouroperations through LK Technology Ltd., a British Virgin Islands limited liability company (“LK Technology”) and its whollyowned subsidiaries, MMB Limited andMobile Media (China) Limited and their respective subsidiaries and a contractuallycontrolled entity in the PRC named Beijing Zhong Chuan Shi Xun Technology,which hold the rights to deploy WiFi systems on about 700 trains in China, including 290 trains in which WiFi systems have already been installed and are inoperation. In May 2010, we consummated an initial public offering of our American Depository Shares, or ADSs, for gross proceeds of $16 million, and our ADSswere listed on the NASDAQ Capital Market under the ticker symbol “KONE”. Our ordinary shares are not currently listed on any trading market. Our AmericanDepository Shares (“ADSs”) were voluntarily delisted from the NASDAQ Capital Market on September 19, 2018. We have applied to NASDAQ for the listing of ourordinary shares on the NASDAQ Capital Market and received an approval for listing of Ordinary Shares on August 6, 2018, and as of the date of this transitionreport, that application and approval are currently under review.On August 17, 2018, we consummated an asset exchange transaction, pursuant to which we exchanged all issued and outstanding capital stock in TopskyInfoTech Holdings Pte Ltd., the parent of Softech, for the issued and outstanding capital stock of LK Technology (the “Asset Exchange”). In connection with theAsset Exchange, we changed our name on August 20, 2018, and on September 20, 2018, completed the issuance to the shareholders of C Media Limited, the formerparent of LK Technology, of (i) 185,412,599 of our ordinary shares, par value $0.01 per share and (ii) 1,000,000 of our preferred shares. Upon the consummation of theAsset Exchange, we ceased our previous business operations and became a company focused on the provision of WiFi and mobile application products for longdistance travelers in China.On August 25, 2018, LK Technology entered into a Stock Purchase Agreement (the “Agreement”) with the shareholders (“Shareholders”) of SuperengineHoldings Limited, a limited liability company organized under the laws of the British Virgin Islands (the “Superengine”), pursuant to which LK Technology acquiredall of the issued and outstanding capital stock of Superengine for an aggregate purchase price of US$60 million (the “Purchase Price”), which are paid by theissuance of our Ordinary Shares in an amount equal to the quotient of (x) the Purchase Price divided by (y) the average of the closing prices of the Ordinary Shareson the NASDAQ Capital Market over the 12 months period preceding July 31, 2018. We are a party to the Agreement in connection with the issuance of theOrdinary Shares and certain other limited purposes.Results of operations for the fiscal year ended December 31, 2017 compared to the fiscal year ended December 31, 2016.RevenueWe provide displaybased online advertising services to customers by integrating text description, image and video, and displaying the advertisements in aprominent position of LuoKuang Application. We recognize revenue in accordance with ASC 605, over the contractual term based on the agreements andconfirmation letters signed by both parties, commencing on the date the customer’s advertisement is displayed on our platform.For the year ended December 31, 2017, we had revenue of $26,082,417, as compared to revenue of $5,233,145 for the year ended December 31, 2016, anincrease of $20,849,272, or 398.4%, which was primarily due to the increase of our advertising clients.Cost of revenueOur cost of revenue primarily consists of depreciation, labor cost, WiFi equipment installation fees, data charges, annual payments to local railway bureau,other overhead costs.33Cost of revenue for the year ended December 31, 2017 was $5,547,779, representing a decrease of $767,725 or 12.2% as compared to $6,315,504 for the yearended December 31, 2016. The decrease was primarily attributable to the decrease in labor cost as a result of our cost control and a decrease in the number ofmaintenance staff. Additionally, data charges decreased as train passengers prefer using their mobile data, leading to a decrease in 3G and 4G data.Selling and marketing expenseOur selling and marketing expense mainly include promotional and marketing expenses and compensation for our sales and marketing personnel.Selling expense totaled $23,908,733 for the year ended December 31, 2017, as compared to $6,209,804 for the year ended December 31, 2016, an increase of$17,698,929 or 285.0%. The increase was primarily attributable to the increase in promotional and marketing activities conducted by the Company.General and administrative expenseOur general and administrative expenses consist primarily of salaries and benefits for our general and administrative personnel, rent, fees and expenses forlegal, accounting and other professional servicesGeneral and administrative expense totaled $2,451,249 for the year ended December 31, 2017, as compared to $2,108,854 for the year ended December 31,2016, an increase of $342,395 or 16.2%.Research and development expenses.Research and development expenses primarily consist of salaries and benefits for research and development personnel.Research and development expenses totaled $1,046,198 for the year ended December 31, 2017, as compared to $2,882,202 for the year ended December 31,2016, a decrease of $1,836,004 or 63.7%. The decrease was primarily attributable to the Company reduced its expenses in research and development temporarily asour products are quite stable at present.Loss from operationsAs a result of the factors described above, for the year ended December 31, 2017, loss from operations amounted to $6,871,542, as compared to loss fromoperations of $12,283,219 for the year ended December 31, 2016, a decrease of $5,411,677, or 44.1%.Other income/expenseOther income/expense mainly include interest income from bank deposits, foreign currency transaction gain, and loss from investment.Net lossAs a result of the factors described above, our net loss was $6,810,454 for the year ended December 31, 2017, compared to net loss of $13,049,031 for theyear ended December 31, 2016, a decrease of $6,238,577 or 47.8%.Foreign currency translation adjustmentOur reporting currency is the U.S. dollar. The functional currency of our parent company and subsidiaries of Merchant Supreme and Prime Cheer is the U.S.dollar and the functional currency of the Company’s subsidiaries incorporated in China is the Chinese Renminbi (“RMB”). The financial statements of oursubsidiaries incorporated in China are translated to U.S. dollars using period end rates of exchange for assets and liabilities, and average rates of exchange (for theperiod) for revenue, costs, and expenses. Net gains and losses resulting from foreign exchange transactions are included in the consolidated statements ofoperations and comprehensive loss. As a result of foreign currency translations, which are a noncash adjustment, we reported a foreign currency translation gain of$90,671 for the year ended December 31, 2017, as compared to a foreign currency translation loss of $387,375 for the year ended December 31, 2016. This noncashgain had the effect of increasing/decreasing our reported comprehensive income/loss.34Comprehensive lossAs a result of our foreign currency translation adjustment, we had comprehensive loss for the year ended December 31, 2017 of $6,719,783, compared tocomprehensive loss of $12,661,656 for the year ended December 31, 2016.B. LIQUIDITY AND CAPITAL RESOURCESThe information contained in “Item 5. Operating and Financial Review and Prospects – A. Operating Results – Liquidity and Capital Resources” isincorporated herein by reference.C. RESEARCH AND DEVELOPMENT, PATENTS AND LICENSES, ETC.The discussions of our research and development activities were contained in “Item 4. Information about our Company – B. Business Overview –Research and Development” and “Item 5. Operating and Financial Review and Prospects – A. Operating Results – Operating Expenses – Research and DevelopmentExpenses” are incorporated herein by reference. In the years ended December 31, 2017 and 2016, we spent $1,046,198 and $2,882,202, respectively, on research anddevelopment activities.D. TREND INFORMATION.Industry and Market OutlookChina has awarded licenses to mobile phone companies to provide the superfast 4G network to customers. The licenses, which are designed to give mobilephone users faster access to services, were granted by the government to China Mobile, China Unicom Hong Kong and China Telecom. Since the grants, ChinaMobile has offered 4G to subscribers from December 18, 2013. China Unicom and China Telecom, the country's other two major carriers, also offer 4G wireless. Thenumber of China Mobile 4G customers has exceeded 900 million by the end of October in 2017. The move greatly bolstered business for telecom equipment makersand a range of other companies.Under China’s 12th FiveYear Plan, a key priority is for China to transition from “Made in China” to “Designed in China.” In order to achieve this goal, thegovernment plans to heavily invest in science and technology education and R&D so as to further develop China’s intellectual property rights system and support“NextGeneration IT” as a Strategic Emerging Industry (SEI). Additionally, China plans to upgrade the technological capabilities of private and public services,including “triple play” services (the convergence of telecom, broadcasting and Internet networks), ecommerce, and egovernment and statistics systems.Furthermore, the government plans to invest in R&D of the "Internet of things" and cloud computing, and develop digital and virtual technologies.E. OFFBALANCE SHEET ARRANGEMENTSWe have not entered into any financial guarantees or other commitments to guarantee the payment obligations of any third parties. We have not enteredinto any derivative contracts that are indexed to our shares and classified as shareholder’s equity, or that are not reflected in our consolidated financial statements.Furthermore, except for the mortgage referenced above, we do not have any retained or contingent interest in assets transferred to an unconsolidated entity thatserves as credit, liquidity or market risk support to such entity. We do not have any variable interest in any unconsolidated entity that provides financing, liquidity,market risk or credit support to us or engages in leasing, hedging or research and development services with us.35F. TABULAR DISCLOSURE OF CONTRACTUAL OBLIGATIONSAs of December 31, 2017, we did not have any contractual obligations required to be disclosed in this Item 5.F. ITEM 6. DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES.A. DIRECTORS AND SENIOR MANAGEMENT.Executive Officers and DirectorsThe following table sets forth the names and ages as of the date of this transition report of each of our executive officers and directors:NameAgePositionXuesong Song50Chief Executive Officer, Chairman and DirectorDongpu Zhang50PresidentJie Yu34Chief Financial OfficerKegang Peng46Vice President and DirectorChuang Tao51DirectorDennis Galgano (1)(2)69Director (Independent)Jin Shi (1)(2)49Director (Independent)Jiming Ha (1)(3)56Director (Independent)Zhihao Xu (3)42Director (Independent)(1)Member of the Audit Committee.(2)Member of the Compensation Committee.(3)Member of the Nominating and Corporate Governance Committee.Set forth below is biographical information concerning our executive officers and directors.Xuesong Song is a cofounder of C Media Limited and served as its chairman of the board of directors and chief executive officer from 2012 until theconsummation of the AEA. From February 2014 through April 2017, Mr. Song served as a director of Seven Stars Cloud Group, Inc. (NASDAQ: SSC) and fromJanuary 2013 through February 2015, Mr. Song served as a director of Pingtan Marine Enterprise Ltd. (NASDAQ: PME). From May 2006 through January 2009, Mr.Song served as the Chairman of the Board of ChinaGrowth North Acquisition Corporation, a special purpose acquisition company, which acquired UIB GroupLimited in January 2009, in which he remains a director. Mr. Song has been a principal of Chum Capital Group Limited since August 2001, a merchant banking firmthat invests in growth Chinese companies and advises them in financings, mergers & acquisitions and restructurings, and chief executive officer of Beijing ChumInvestment Co., Ltd. since December 2001. Mr. Song has been a director of Mobile Vision Communication Ltd. since July 2004. Mr. Song received a Master’s ofBusiness Administration degree from Oklahoma City/Tianjin Program.Dongpu Zhang was appointed as the President of the Company effective on August 25, 2018. Mr. Dongpu Zhang has served as the General Manager ofSuperEngine Graphics Software Technology Development (Suzhou) Co., Ltd. (“SuperEngine Suzou”) and the Chief Executive Officer of SuperEngine HoldingLimited since September 2016. From February, 2014 to August, 2016, Mr. Zhang served as vice president of Industrial Development Group under China Fortune LandDevelopment Co., Ltd. From March, 2009 to February, 2014, Mr. Zhang served as the vice president of Aerospace Science and Technology Holding Group Co., Ltd.Mr. Zhang receive his Master Degree of Computer Science from Harbin Institute of Technology in 1994 and his Bachelor Degree of information system fromChangsha Institute of technology in 1991.Jie Yu served as the chief financial officer of C Media Limited from January 2018 until the consummation of the asset exchange transactions. From June 2016to January 2018, Mr. Yu served as chief financial officer and secretary of the board of directors of MTI Environment Group Limited. Prior to joining MTI, Mr. Yuserved as the senior manager at DA HUA CPA from November 2012 to May 2016. Previously, Mr. Yu served as the manager at Crowe Horwath (Hong Kong) CPA.Mr. Yu holds a bachelor degree in accounting and finance from University of Auckland and postgraduate diploma in accounting from University of Auckland.36Kegang Peng served as the Vice Chairman of the board of directors C Media Limited from October 2014 to the consummation of the asset exchangetransactions, and is now a member of the Company’s board of directors. Previously, from 2012 to 2014, Mr. Peng was chairman of the board and founder of JiangsuSuqian Jinghaiboyuan Information and Technology Co., Ltd. Mr. Peng studied at Beijing University of Aeronautics and Astronautics majoring computer andapplication.20F 1 f20f2017_luokungtech.htm AMENDMENT NO. 1 TO FORM 20FUNITED STATESSECURITIES AND EXCHANGE COMMISSIONWASHINGTON, D.C. 20549FORM 20F☐ REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934OR☐ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934For the Fiscal year ended _____________OR☒ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934For the transition period from October 1, 2017 to December 31, 2017☐ SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934Date of event requiring this shell company report Commission file number: 00134738Luokung Technology Corp.(Exact name of Registrant as specified in its charter)Not applicable(Translation of Registrant’s name into English)British Virgin IslandsLAB 32, SOHO 3Q, No 9, Guanghua Road, Chaoyang District, BeijingPeople’s Republic of China, 100020(Jurisdiction of incorporation or organization)(Address of principal executive offices)Mr. Muqiao GengLAB32, SOHO 3Q, No 9, Guanghua Road, Chaoyang District, BeijingPeople’s Republic of China 100020Tel: (86) 1085866721(Name, telephone, Email and/or facsimile number and address of company contact person)Securities registered or to be registered pursuant to Section 12(b) of the Act:Title of each className of each exchange on which registeredOrdinary shares, par value $0.01 per shareNonePreferred shares, par value $0.01 per shareNoneSecurities registered or to be registered pursuant to Section 12(g) of the Act:none(Title of Class)Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act:none(Title of Class)Indicate the number of outstanding shares of each of the issuer’s classes of capital or common stock as of the close of the period covered by the transitionreport. 187,097,599 Ordinary Shares, including 186,383,224 Ordinary Shares represented by 714,375 American Depositary Shares, and 1,000,000 Preferred Sharesoutstanding as of September 20, 2018.Indicate by check mark if the registrant is a wellknown seasoned issuer, as defined in Rule 405 of the Securities Act. ☐ Yes ☒ NoIf this report is an annual or transition report, indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of theSecurities Exchange Act of 1934. ☐ Yes ☒ NoIndicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirementsfor the past 90 days. ☒ Yes ☐ NoIndicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File requiredto be submitted and posted pursuant to Rule 405 of Regulation ST (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that theregistrant was required to submit and post such files). ☒ Yes ☐ NoIndicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a nonaccelerated filer. See definition of “accelerated filer andlarge accelerated filer” in Rule 12b2 of the Exchange Act. (Check one):Large accelerated filer ☐ Accelerated filer ☐ Nonaccelerated filer ☒Indicate by check mark which basis of accounting the registrant has used to prepare the financial statements included in this filing.U.S. GAAP ☒International Financial Reporting Standards as issuedby the International Accounting Standards Board ☐Other ☐If “Other” has been checked in response to the previous question, indicate by check mark which financial statement item the registrant has elected tofollow. Item 17 ☐ Item 18 ☐If this is an transition report, indicate by check mark whether the registrant is a shell company (as defined in Rule 12b2 of the ExchangeAct). ☐ Yes ☒ NoExplanatory NoteLuokung Technology Corp. (the “Company”) is filing this transition report on Form 20F (“Transition Report”) in connection with the completion of theexchange of certain of its assets for substantially all of the assets of C Media Limited (“C Media”) pursuant to that Asset Exchange Agreement, dated January 25,2018 (the “Original AEA”), as supplemented by the Addendum to Asset Exchange Agreement, dated October 3, 2018 (the “Addendum” and together with theOriginal AEA, the “AEA”). Following the consummation of the AEA, on October 4, 2018, the Company changed its fiscal year end from September 30 to the fiscalyear end used by C Media, December 31. This Transition Report covers the threemonth period from Octorber 1, 2017 to December 31, 2017, and the fiscal yearsdescribed herein.In this transition report:●References to the “Company”, “we”, “our” and “us” are to Luokung Technology Corp. and its consolidated subsidiaries and variable interestentity, except as the context otherwise requires;●This transition report on Form 20F covers the threemonth period from October 1, 2017 through December 31, 2017 (the “Transition Period”) andreflects our financial results thereof. Prior to this transition report on Form 20F, our two most recent annual reports on Form 20F cover the fiscalyears ended September 30, 2017 and September 30, 2016, respectively, and reflect financial results for the respective twelvemonth periods fromOctober 1 to September 30. Unless otherwise noted, all references to years are to the calendar year from January 1 to December 31 and referencesto our fiscal year or years are to the fiscal year or years which, prior to the Transition Period, ended September 30, while from and after theTransition Period, ended December 31;●References to an “ADS” are to an American Depositary Share, each of which represents one of our Ordinary Shares with a par value of $.01 pershare.Special Note Regarding Forwardlooking StatementsThis transition report contains forwardlooking statements that involve risks and uncertainties. These statements involve known and unknown risks,uncertainties and other factors that may cause our actual results, performance or achievements to be materially different from those expressed or implied by theforwardlooking statements.You can identify these forwardlooking statements by words or phrases such as “may,” “will,” “expect,” “anticipate,” “aim,” “estimate,” “intend,” “plan,”“believe,” “likely to” or other similar expressions. We have based these forwardlooking statements largely on our current expectations and projections about futureevents and financial trends that we believe may affect our financial condition, results of operations, business strategy and financial needs. You should not placeundue reliance on these forwardlooking statements, which apply only as of the date of this transition report. These forwardlooking statements include:●our future business development, results of operations and financial condition;●expected changes in our net revenues and certain cost or expense items;●our ability to attract and retain customers; and●trends and competition in the enterprise mobile software application market.You should read this transition report thoroughly with the understanding that our actual future results may be materially different from, and/or worse, thanwhat we expect. We qualify all of our forwardlooking statements by these cautionary statements. Other sections of this transition report include additional factorswhich could adversely impact our business and financial performance. Moreover, we operate in an evolving environment. New risk factors and uncertainties emergefrom time to time and it is not possible for our management to predict all risk factors and uncertainties, nor can we assess the impact of all factors on our business orthe extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forwardlooking statements.This transition report also contains estimates, projections and statistical data related to the market for the provision of WiFi and mobile applications inChina. This market data, including data from IDC, a leading provider of market data and intelligence, speaks as of the date it was published and includes projectionsthat are based on a number of assumptions and are not representations of fact. The market for the provision of WiFi and mobile applications in China may not growat the rates projected by the market data, or at all. The failure of the market to grow at the projected rates may materially and adversely affect our business and themarket price of our ADSs. In addition, the rapidly changing nature of the market for the provision of WiFi and mobile applications subjects any projections orestimates relating to the growth prospects or future condition of our market to significant uncertainties. If any one or more of the assumptions underlying the marketdata proves to be incorrect, actual results may differ from the projections based on these assumptions.You should not rely upon forwardlooking statements as predictions of future events. We undertake no obligation to update or revise any forwardlookingstatements, whether as a result of new information, future events or otherwise.TABLE OF CONTENTSPart IItem 1.Identity of Directors, Senior Management and Advisers.1Item 2.Offer Statistics and Expected Timetable.1Item 3.Key Information.1A.Selected Financial Data.1B.Capitalization and Indebtedness.3C.Reasons for the Offer and Use of Proceeds.3D.Risk Factors.3Item 4.Information on the Company.19A.History and Development of the Company.19B.Business Overview.20C.Organizational Structure.30D.Property, Plants and Equipment.32Item 4A.Unresolved Staff Comments.32Item 5.Operating and Financial Review and Prospects.32A.Operating Results.32B.Liquidity and Capital Resources.35C.Research and Development, Patents and Licenses, etc.35D.Trend Information.35E.Offbalance Sheet Arrangements.35F.Tabular Disclosure of Contractual Obligations.36Item 6.Directors, Senior Management and Employees.36A.Directors and Senior Management.36B.Compensation.37C.Board Practices.40D.Employees.43E.Share Ownership.43Item 7.Major Shareholders and Related Party Transactions.44A.Major Shareholders.44B.Related Party Transactions.45C.Interests of Experts and Counsel.45Item 8.Financial Information.45A.Consolidated Statements and Other Financial Information.45B.Significant Changes.46Item 9.The Offer and Listing.46A.Offer and Listing Details.46B.Plan of Distribution.47C.Markets.47D.Selling shareholders.48E.Dilution.48F.Expenses of the issue.48Item 10.Additional Information.48A.Share Capital.48B.Memorandum and Articles of Association.48C.Material Contracts.53D.Exchange Controls.54E.Taxation.61F.Dividends and Paying Agents.67G.Statement by Experts.67H.Documents on Display.67I.Subsidiary Information.68Item 11.Quantitative and Qualitative Disclosures about Market Risk.68Item 12.Description of Securities Other than Equity Securities.69A.Debt Securities.69B.Warrants and Rights.69C.Other Securities.69D.American Depositary Shares.69iPart IIItem 13.Defaults, Dividend Arrearages and Delinquencies.71Item 14.Material Modifications to the Rights of Security Holders and Use of Proceeds.71Item 15.Controls and Procedures.71Item 16.[Reserved.]72Item 16A.Audit Committee Financial Expert.72Item 16B.Code of Ethics.73Item 16C.Principal Accountant Fees and Services.73Item 16D.Exemptions from the Listing Standards for Audit Committees.73Item 16E.Purchases of Equity Securities by the Issuer and Affiliated Purchasers.73Item 16F.Change in Registrant’s Certifying Accountant.73Item 16G.Corporate Governance.73Item 16H.Mine Safety Disclosure.73Part IIIItem 17.Financial Statements.74Item 18.Financial Statements.74Item 19.Exhibits.74Index to Consolidated Financial StatementsF1iiPART IITEM 1. IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS.The directors of Luokung Technology Corp. are Xuesong Song, Kegang Peng, Dennis Galgano, Jin Shi, Jiming Ha, Zhihao Xu and Chuang Tao. Thebusiness address for our directors is LAB 32, SOHO 3Q, No 9, Guanghua Road, Chaoyang District, Beijing, People’s Republic of China.Moore Stephens CPA Limited has served as our auditor since October 5, 2018, and is located at 801806 Silvercord Tower 1, 30 Canton road, Tsimshatsui,Kowloon, Hong Kong. BDO China Shun Lun Pan Certified Public Accountants LLP served as our auditors for the last three years, and are located at 4F, No. 61Nanjing Road, Shanghai, People’s Republic of China.Garvey Schubert Barer, P.C., serves as our legal counsel in the United States, and is located at Flour Mill Building, 1000 Potomac Street NW, Suite 200,Washington, D.C., 200073501.Conyers Dill & Pearlman serves as our legal counsel with regard to the laws of the British Virgin Islands, and is located at 29th Floor, One Exchange Square,8 Connaught Place, Central, Hong Kong.ITEM 2. OFFER STATISTICS AND EXPECTED TIMETABLE.Not applicable.ITEM 3. KEY INFORMATION.A. SELECTED FINANCIAL DATA.Luokung Technology Corp. and its consolidated subsidiaries (“Luokung Technology”, “we”, “us”, or “the Company”) consummated an asset exchangeagreement pursuant to which we exchanged our existing assets with those of C Media Limited (the “Asset Exchange”) on August 17, 2018, and we changed ourname from Kingtone Wirelessinfo Solution Holding Ltd. to our current name on August 20, 2018. On October 4, 2018, in connection with the consummation of the Asset Exchange, we changed our fiscal year end from September 30 to December 31.1The selected financial data for the fiscal years ended December 31 2017 and 2016 have been derived from our audited consolidated and combined financialstatements. The selected consolidated and combined financial data should be read in conjunction with our audited financial statements and the accompanying notesand “Item 5 – Operating and Financial Review and Prospects.” Our consolidated and combined financial statements are prepared and presented in accordance withUnited States generally accepted accounting principles, or U.S. GAAP. Our historical results do not necessarily indicate our results expected for any future periods.You should not view our historical results as an indicator of our future performance.LK TECHNOLOGY LTD. AND SUBSIDIARIESSELECTED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS(IN U.S. DOLLARS)For the years ended December 31,20172016Revenues$26,082,417$5,233,145Less: Cost of revenues5,547,7796,315,504Less: Operating expenses:Selling and marketing23,908,7336,209,804General and administrative2,451,2492,108,854Research and development1,046,1982,882,202Total operating expenses27,406,18011,200,860Loss from operations(6,871,542)(12,283,219)Other income (expense):Interest expense(26,611)(4,412)Foreign exchange gains(losses)350,679(298,257)Loss from investment(428,571)Other income (expense), net(262,980)(34,572)Total other income (expense), net61,088(765,812)Loss before income taxes(6,810,454)(13,049,031)Income taxesNet loss$(6,810,454)$(13,049,031)Other comprehensive income:Foreign currency translation adjustment90,671387,375Total comprehensive loss$(6,719,783)$(12,661,656)2LK TECHNOLOGY LTD. AND SUBSIDIARIESSELECTED CONSOLIDATED BALANCE SHEETS(IN U.S. DOLLARS)As of December 31,20172016Accounts receivable, net of allowance for doubtful accounts9,729,6251,865,836Amounts due from related parties11,760,692Property and equipment, net5,044,8727,771,027Goodwill7,239,9367,239,936TOTAL ASSETS37,582,85821,114,832Accounts payable8,784,5186,446,584Accrued liabilities and other payables12,962,91211,329,613Total liabilities25,311,11333,905,520Total Shareholder’s Equity (Deficit)12,271,745(12,790,688)TOTAL LIABILITIES AND SHAREHOLDER’S EQUITY (DEFICIT)37,582,85821,114,832B. CAPITALIZATION AND INDEBTEDNESS.Not applicable.C. REASONS FOR THE OFFER AND USE OF PROCEEDS.Not applicable.D. RISK FACTORS.An investment in our ADSs and ordinary shares involves a high degree of risk. You should carefully consider the risks and uncertainties described belowtogether with all other information contained in this transition report, including the matters discussed under “Special Note Regarding ForwardLooking Statements,”before you decide to invest in our ADSs or ordinary shares. You should pay particular attention to the fact that we are a holding company with substantialoperations in China and are subject to legal and regulatory environments that in many respects differ from those of the United States. If any of the following risks, orany other risks and uncertainties that are not presently foreseeable to us, actually occur, our business, financial condition, results of operations, liquidity and ourfuture growth prospects would be materially and adversely affected. You should also consider all other information contained in this transition report beforedeciding to invest in our ADSs or ordinary shares.Risks Related to Our Company and Our IndustryThe Company had incurred negative cash flows from operating activities and net losses as of December 31, 2017. These matters raise substantial doubt aboutthe Company’s ability to continue as a going concern.The Company’s consolidated financial statements are prepared using generally accepted accounting principles in the United States of America applicableto a going concern, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. As of and for the year endedDecember 31, 2017, the Company had incurred significant operating losses and working capital deficit. The ability of the Company to continue as a going concern isdependent on the Company obtaining adequate capital to fund operating losses until it becomes profitable. If the Company is unable to obtain adequate capital, itcould be forced to cease operations. The accompanying consolidated financial statements do not include any adjustments that might be necessary if the Companyis unable to continue as a going concern.3We may undertake acquisitions, investments, joint ventures or other strategic alliances, which could have a material adverse effect on our ability to manageour business. In addition, such undertakings may not be successful.Our strategy includes plans to grow both organically and through acquisitions, participation in joint ventures or other strategic alliances. Joint venturesand strategic alliances may expose us to new operational, regulatory and market risks, as well as risks associated with additional capital requirements. We may not beable, however, to identify suitable future acquisition candidates or alliance partners. Even if we identify suitable candidates or partners, we may be unable tocomplete an acquisition or alliance on terms commercially acceptable to us. If we fail to identify appropriate candidates or partners, or complete desired acquisitions,we may not be able to implement our strategies effectively or efficiently. In addition, our ability to successfully integrate acquired companies and their operations may be adversely affected by several factors. These factorsinclude:1.diversion of management’s attention;2.difficulties in retaining customers of the acquired companies;3.difficulties in retaining personnel of the acquired companies;4.entry into unfamiliar markets;5.unanticipated problems or legal liabilities; and6.tax and accounting issues.If we fail to integrate acquired companies efficiently, our earnings, revenue growth and business could be negatively affected.Due to intense competition for highlyskilled personnel, we may fail to attract and retain enough sufficiently trained employees to support our operations; ourability to bid for and obtain new projects may be negatively affected and our revenues could decline as a result.The IT industry relies on skilled employees, and our success depends to a significant extent on our ability to attract, hire, train and retain qualifiedemployees. There is significant competition in China for professionals with the skills necessary to develop the products and perform the services we offer to ourcustomers. Increased competition for these professionals, in the mobile application design area or otherwise, could have an adverse effect on us if we experiencesignificant increase in the attrition rate among employees with specialized skills, which could decrease our operating efficiency and productivity and could lead to adecline in demand for our services.In addition, our ability to serve existing customers and business partners and obtain new business will depend, in large part, on our ability to attract, trainand retain skilled personnel that enable us to keep pace with growing demands for wifi connectivity and mobile applications, evolving industry standards andchanging customer preferences. Our failure to attract, train and retain personnel with the qualifications necessary to fulfill the needs of our existing and futurecustomers or to assimilate new employees successfully could have a material adverse effect on our business, financial condition and results of operations. Ourfailure to retain our key personnel on business development or find suitable replacements of the key personnel upon their departure may lead to shrinking newimplementation projects, which could materially adversely affect our business.4Our business depends substantially on the continuing efforts of our senior executives and other key personnel, and our business may be severely disrupted if welose their services.Our future success heavily depends upon the continued services of our senior executives and other key employees, particularly since we recentlyappointed a new chairman. We are reliant on the services of Mr. Xuesong Song, our chairman, chief executive officer and member of our board of directors. If one ormore of our senior executives or key employees is unable or unwilling to continue in his or her present position, we may not be able to replace such employee easily,or at all, we may incur additional expenses to recruit, train and retain replacement personnel, our business may be severely disrupted, and our financial condition andresults of operations may be materially adversely affected.Our business could suffer if our executives and directors compete against us and our noncompetition agreements with them cannot be enforced.If any of our senior executives or key employees joins a competitor or forms a competing company, we may lose customers, knowhow and keyprofessionals and staff members to them. Also, if any of our business development managers who keep a close relationship with our customers and businesspartners joins a competitor or forms a competing company, we may lose customers, and our revenues may be materially adversely affected. Most of our executiveshave entered, or will soon enter, into employment agreements with us that contain or will contain noncompetition provisions. However, if any dispute arisesbetween our executive officers and us, such noncompetition provisions may not be enforceable, especially in China, where all of these executive officers and keyemployees reside, in light of the uncertainties with China’s legal system. See “Risk Factors — Risks Related to Doing Business in China — Uncertainties withrespect to the PRC legal system could adversely affect us.”Our computer networks may be vulnerable to security risks that could disrupt our services and adversely affect our results of operations.Our computer networks may be vulnerable to unauthorized access, computer hackers, computer viruses and other security problems caused byunauthorized access to, or improper use of, systems by third parties or employees. A hacker who circumvents security measures could misappropriate proprietaryinformation or cause interruptions or malfunctions in operations. Computer attacks or disruptions may jeopardize the security of information stored in andtransmitted through computer systems and mobile devices of our customers. Actual or perceived concerns that our systems may be vulnerable to such attacks ordisruptions may deter customers from using our services. As a result, we may be required to expend significant resources to protect against the threat of thesesecurity breaches or to alleviate problems caused by these breaches, which could adversely affect our results of operations.If we do not continually enhance our solutions and service offerings, we may have difficulty in retaining existing customers and attracting new customers.We believe that our future success will depend, to a significant extent, upon our ability to enhance our existing applications and platform, and to introducenew features to meet the preferences and requirements of our customers in a rapidly developing and evolving market. Unexpected technical, operational, distributionor other problems could delay or prevent the introduction of one or more of these products or services, or any products or services that we may plan to introduce inthe future. Our present or future products may not satisfy the evolving preferences and tastes of our customers, and these solutions and services may not achieveanticipated market acceptance or generate incremental revenue. If we are unable to anticipate or respond adequately to the need for service or productenhancements due to resource, technological or other constraints, our business, financial condition and results of operations could be materially and adverselyaffected.5If we are unable to develop competitive new products and service offerings our future results of operations could be adversely affected.Our future revenue stream depends to a large degree on our ability to utilize our technology in a way that will allow us to offer new types of mobileapplications and services to a broader customer base. We will be required to make investments in research and development in order to continually develop newsoftware applications and related service offerings, enhance our existing platform, mobile applications and related service offerings and achieve market acceptanceof our mobile applications and service offerings. We may incur problems in the future in innovating and introducing new mobile applications and service offerings.Our developmentstage mobile applications may not be successfully completed or, if developed, may not achieve significant customer acceptance. If we are unableto successfully define, develop and introduce competitive new mobile applications, and enhance existing mobile applications, our future results of operations wouldbe adversely affected. The timely availability of new applications and their acceptance by customers are important to our future success. A delay in the developmentof new applications could have a significant impact on its results of operations.Changes in technology could adversely affect our business by increasing our costs, reducing our profit margins and causing a decline in our competitiveness.China’s wireless telecom industry, in which we operate, is characterized by rapidly changing technology, evolving industry standards, frequentintroductions of new services and solutions and enhancements as well as changing customer demands. New solutions and new technologies often render existingsolutions and services obsolete, excessively costly or otherwise unmarketable. As a result, our success depends on our ability to adapt to the latest technologicalprogress, such as the 5G standard and technologies, and to develop or acquire and integrate new technologies into our platform, mobile applications and relatedservices. Advances in technology also require us to commit substantial resources to developing or acquiring and then deploying new technologies for use in ouroperations. We must continuously train personnel in new technologies and in how to integrate existing hardware and software systems with these newtechnologies. We may not be able to adapt quickly to new technologies or commit sufficient resources to compete successfully against existing or new competitorsin bringing to market solutions and services that incorporate these new technologies. We may incur problems in the future in innovating and introducing new mobileapplications and service offerings. Our development of new mobile applications and platform enhancements may not be successfully completed or, if developed,may not achieve significant customer acceptance. If we fail to adapt to changes in technologies and compete successfully against established or new competitors,our business, financial condition and results of operations could be adversely affected.Problems with the quality or performance of our hardware, software or other systems may cause delays in the introduction of new solutions or result in the lossof customers and revenues, which could have a material and adverse effect on our business, financial condition and results of operations.Our hardware and software systems are complex and may contain defects, errors or bugs when first introduced to the market or to a particular customer, oras new versions are released. Because we cannot test for all possible scenarios, our systems may contain errors that are not discovered until after they have beeninstalled or implemented, and we may not be able to timely correct these problems. These defects, errors or bugs could interrupt or delay the completion of projectsor sales to our customers. In addition, our reputation may be damaged and we may fail to acquire new projects from existing customers or new customers. Errors mayoccur when we provide systems integration and maintenance services. Even in cases where we have agreements with our customers that contain provisionsdesigned to limit our exposure to potential claims and liabilities arising from customer problems, these provisions may not effectively protect us against such claimsin all cases and in all jurisdictions. In addition, as a result of business and other considerations, we may undertake to compensate our customers for damages arisingfrom the use of our solutions, even if our liability is limited by these provisions. Moreover, claims and liabilities arising from customer problems could also result inadverse publicity and materially and adversely affect our business, results of operations and financial condition. We currently do not carry any product or serviceliability insurance and any imposition of liability on us may materially and adversely affect our business and increase our costs, resulting in reduced revenues andprofitability.Our products may contain undetected software defects, which could negatively affect our revenues.Our software products are complex and may contain undetected defects. Although we test our products, it is possible that errors may be found or occur inour new or existing products after we have commenced commercial shipment of those products. Defects, whether actual or perceived, could result in adversepublicity, loss of revenues, product returns, a delay in market acceptance of our products, loss of competitive position or claims against us by customers. Any suchproblems could be costly to remedy and could cause interruptions, delays, or cessation of our product sales, which could cause us to lose existing or prospectivecustomers and could negatively affect our results of operations.6We may be subject to infringement, misappropriation and indemnity claims in the future, which may cause us to incur significant expenses, pay substantialdamages and be prevented from providing our services or technologies.Our success depends, in part, on our ability to carry out our business without infringing the intellectual property rights of third parties. Patent andcopyright law covering softwarerelated technologies is evolving rapidly and is subject to a great deal of uncertainty. Our selfdeveloped or licensed technologies,processes or methods may be covered by thirdparty patents or copyrights, either now existing or to be issued in the future. Any potential litigation may cause us toincur significant expenses. Thirdparty claims, if successfully asserted against us may cause us to pay substantial damages, seek licenses from third parties, payongoing royalties, redesign our services or technologies, or prevent us from providing services or technologies subject to these claims. Even if we were to prevail,any litigation would likely be costly and timeconsuming and divert the attention of our management and key personnel from our business operations.Our failure to protect our intellectual property rights may undermine our competitive position, and subject us to costly litigation to protect our intellectualproperty rights.Any misappropriation of our technology or the development of competitive technology could seriously harm our business. We regard a substantial portionof our hardware and software systems as proprietary and rely on statutory copyright, trademark, patent, trade secret laws, customer license agreements, employeeand thirdparty nondisclosure agreements and other methods to protect our proprietary rights. Nevertheless, these resources afford only limited protection and theactions we take to protect our intellectual property rights may not be adequate. In particular, third parties may infringe or misappropriate our proprietarytechnologies or other intellectual property rights, which could have a material adverse effect on our business, financial condition and results of operations. Inaddition, intellectual property rights and confidentiality protection in China may not be as effective as in the United States, and policing unauthorized use ofproprietary technology can be difficult and expensive. Further, litigation may be necessary to enforce our intellectual property rights, protect our trade secrets ordetermine the validity and scope of the proprietary rights of others. The outcome of any such litigation may not be in our favor. Any such litigation may be costlyand may divert management attention, as well as our other resources, away from our business. An adverse determination in any such litigation will impair ourintellectual property rights and may harm our business, prospects and reputation. In addition, we have no insurance coverage against litigation costs and wouldhave to bear all litigation costs in excess of the amount recoverable from other parties. The occurrence of any of the foregoing could have a material adverse effecton our business, financial condition and results of operations. Our solutions incorporate a portion of, and work in conjunction with, thirdparty hardware and software solutions. If these thirdparty hardware or softwaresolutions are not available to us at reasonable costs, or at all, our results of operations could be adversely impacted.Although our hardware and software systems and mobile applications primarily rely on our own core technologies, some elements of our systemsincorporate a small portion of thirdparty hardware and software solutions. If any third party were to discontinue making their intellectual property available to us orour customers on a timely basis, or increase materially the cost of their licensing such intellectual property, or if our systems or applications failed to properlyfunction or interoperate with replacement intellectual property, we may need to incur costs in finding replacement thirdparty solutions and/or redesigning oursystems or applications to replace or function with or on replacement thirdparty proprietary technology. Replacement technology may not be available on termsacceptable to us or at all, and we may be unable to develop alternative solutions or redesign our systems or applications on a timely basis or at a reasonable cost. Ifany of these were to occur, our results of operations could be adversely impacted.7Our ability to sell our products is highly dependent on the quality of our service and support offerings, and our failure to offer high quality service could have amaterial adverse effect on our ability to market and sell our products.Our customers depend upon our customer service and support staff to resolve issues relating to our products. Highquality support services are critical forthe successful marketing and sale of our products. If we fail to provide highquality support on an ongoing basis, our customers may react negatively and we maybe materially and adversely affected in our ability to sell additional products to these customers. This could also damage our reputation and prospects with potentialcustomers. Our failure to maintain highquality support services could have a material and adverse effect on our business, results of operations and financialcondition.Weaknesses in our internal controls over financial reporting or disclosure controls and procedures may have a material adverse effect on our business, theprice of our ordinary shares, operating results and financial condition.We are required to establish and maintain appropriate internal controls over financial reporting and disclosure controls and procedures. Pursuant to Section404 of the SarbanesOxley Act of 2002 and the related rules adopted by the Securities and Exchange Commission, every public company is required to include amanagement report on its internal controls over financial reporting in its transition report, which contains management’s assessment of the effectiveness of thecompany’s internal controls over financial reporting. This requirement first applied to our annual report on Form 20F for the fiscal year ended on September 30,2011. In connection with our assessments of our disclosure controls and procedures and internal controls over financial reporting, management concluded that as ofSeptember 30, 2018, our disclosure controls and procedures and our internal controls over financial reporting were not effective due to lack of U.S. generallyaccepted accounting principles (“U.S. GAAP”) expertise in our current accounting team. Please refer to the discussion under Item 15, “Controls and Procedures” forfurther discussion of our material weakness as of December 31, 2017. Should we be unable to remediate the material weakness promptly and effectively, suchweakness could harm our operating results, result in a material misstatement of our financial statements, cause us to fail to meet our financial reporting obligations orprevent us from providing reliable and accurate financial reports or avoiding or detecting fraud. This, in turn, could result in a loss of investor confidence in theaccuracy and completeness of our financial reports, which could have an adverse effect on the trading price of our ordinary shares. Any litigation or otherproceeding or adverse publicity relating to the material weaknesses could have a material adverse effect on our business and operating results. We have very limited insurance coverage which could expose us to significant costs and business disruption.We do not maintain any insurance coverage for our leased properties. Should any natural catastrophes such as earthquakes, floods, typhoons or any actsof terrorism occur in Beijing, China, where our head office is located and most of our employees are based, or elsewhere in China, we might suffer not onlysignificant property damages, but also loss of revenues due to interruptions in our business operations, which could have a material adverse effect on our business,operating results or financial condition.The insurance industry in China is still at an early stage of development. Insurance companies in China offer limited business insurance products, and donot, to our knowledge, offer business liability insurance. As a result, we do not have any business liability insurance coverage for our operations. Moreover, whilebusiness disruption insurance is available, we have determined that the risks of disruption and cost of the insurance are such that we do not require it at this time.Any business disruption, litigation or natural disaster might result in substantial costs and diversion of resources, particularly if it affects our technology platformswhich we depend on for delivery of our software and services, and could have a material adverse effect on our financial condition and results of operations.We may be liable to our customers for damages caused by unauthorized disclosure of sensitive and confidential information, whether through our employees orotherwise.We are typically required to manage, utilize and store sensitive or confidential customer data in connection with the products and services we provide.Under the terms of our customer contracts, we are required to keep such information strictly confidential. We seek to implement specific measures to protectsensitive and confidential customer data. We require our employees to enter into nondisclosure agreements to limit such employees’ access to, and distribution of,our customers’ sensitive and confidential information and our own trade secrets. We can give no assurance that the steps taken by us in this regard will be adequateto protect our customers’ confidential information. If our customers’ proprietary rights are misappropriated by our employees, in violation of any applicableconfidentiality agreements or otherwise, our customers may consider us liable for that act and seek damages and compensation from us. However, we currently donot have any insurance coverage for mismanagement or misappropriation of such information by our employees. Any litigation with respect to unauthorizeddisclosure of sensitive and confidential information might result in substantial costs and diversion of resources and management attention.8We may face intellectual property infringement claims that could be timeconsuming and costly to defend. If we fail to defend ourselves against such claims, wemay lose significant intellectual property rights and may be unable to continue providing our existing products and services.It is critical that we use and develop our technology and products without infringing upon the intellectual property rights of third parties, includingpatents, copyrights, trade secrets and trademarks. Intellectual property litigation is expensive and timeconsuming and could divert management’s attention from ourbusiness. A successful infringement claim against us, whether with or without merit, could, among others things, require us to pay substantial damages, developnoninfringing technology, or rebrand our name or enter into royalty or license agreements that may not be available on acceptable terms, if at all, and cease making,licensing or using products that have infringed a third party’s intellectual property rights. Protracted litigation could also result in existing or potential customersdeferring or limiting their purchase or use of our products until resolution of such litigation, or could require us to indemnify our customers against infringementclaims in certain instances. Also, we may be unaware of intellectual property registrations or applications relating to our services that may give rise to potentialinfringement claims against us. Parties making infringement claims may be able to obtain an injunction to prevent us from delivering our services or usingtechnology containing the allegedly infringing intellectual property. Any intellectual property litigation could have a material adverse effect on our business, resultsof operations or financial condition. Seasonality and fluctuations in our customers’ spending cycle and other factors can cause our revenues and operating results to vary significantly from quarterto quarter and from year to year.Our revenues and operating results will vary significantly from quarter to quarter and from year to year due to a number of factors, many of which areoutside of our control. Our new lines of business acquired upon the consummation of the asset exchange transaction discussed below see higher customer use andactivity during the Chinese New Year holiday than other times during the year when rail travel is high, which lead to higher revenue during this period as morecustomers would like to place more advertising. Due to these and other factors, our operating results may fluctuate significantly from quarter to quarter and fromyear to year. These fluctuations are likely to continue in the future, and operating results for any period may not be indicative of our future performance in any futureperiod.Our corporate actions are substantially controlled by our principal shareholders, who can cause us to take actions in ways you may not agree with.Mr. Xuesong Song, our chairman, chief executive officer and a member of our board of directors, beneficially owns 19.31% of our outstanding ordinaryshares and 1,000,000 preferred shares, and each preferred share has the right to 399 votes at a meeting of the members of the Company. Our officers and directors asa group beneficially own an aggregate of approximately 33.69% of our outstanding ordinary shares. These shareholders, acting individually or as a group, couldexert control and substantial influence over matters such as electing directors, amending our constitutional documents, and approving acquisitions, mergers or otherbusiness combination transactions. This concentration of ownership and voting power may also discourage, delay or prevent a change in control of our company,which could deprive our shareholders of an opportunity to receive a premium for their shares as part of a sale of our company and might reduce the price of ourshares. Alternatively, our controlling shareholders may cause a merger, consolidation or change of control transaction even if it is opposed by our othershareholders, including those who purchase shares in this offering.9We depend on a small number of customers to derive a significant portion of our revenues. If we were to become dependent again upon a few customers, suchdependency could negatively impact our business, operating results and financial condition.We derived a material portion of our revenues from a small number of customers. In the years ended December 31, 2017 and 2016, our five largestcustomers accounted for 99.8% and 78.5% of our total sales, respectively, and our largest customer Guangdong Zhanshi Media Advertising Co., Ltd. accounted forapproximately 80.8% of our total sales during for the fiscal year ended December 31, 2017. As our customer base may change from yeartoyear, during such yearsthat the customer base is highly concentrated, the fluctuation of our sales to any of such major customers could have a material adverse effect on our business,operating results and financial condition. Moreover, our high customer base concentration may also adversely affect our ability to negotiate contract prices withthese customers, which may in turn materially and adversely affect our results of operations.Our historical outstanding accounts receivable have been relatively high. Inability to collect our accounts receivable on a timely basis, if at all, couldmaterially and adversely affect our financial condition, liquidity and results of operations.Historically, our outstanding accounts receivable have been relatively high. As of December 31, 2017 and 2016, our outstanding accounts receivable beforeimpairment were $10.4 million and $2.10 million, respectively. Although we conduct credit evaluations of our customers, we generally do not require collateral orother security from our customers. In addition, we have had a relatively high customer concentration. The outstanding accounts receivable balance for our largestcustomer was 45.3% and 38.5% of our total accounts receivable balance as of December 31, 2017 and 2016, respectively. As a result, an extended delay or default inpayment relating to a significant account would likely have a material and adverse effect on the aging schedule and turnover days of our accounts receivable. Ourinability to collect our accounts receivable on a timely basis, if at all, could materially and adversely affect our financial condition, liquidity and results of operations.Risks Related to Doing Business in ChinaAdverse changes in political and economic policies of the PRC government could have a material adverse effect on the overall economic growth of China,which could reduce the demand for our services and materially and adversely affect our competitive position.Substantially all of our business operations are conducted in China. Accordingly, our business, results of operations, financial condition and prospects aresubject to a significant degree to economic, political and legal developments in China. Although the Chinese economy is no longer a planned economy, the PRCgovernment continues to exercise significant control over China’s economic growth through direct allocation of resources, monetary and tax policies, and a host ofother government policies such as those that encourage or restrict investment in certain industries by foreign investors, control the exchange between RMB andforeign currencies, and regulate the growth of the general or specific market. These government involvements have been instrumental in China’s significant growthin the past 30 years. The reorganization of the telecommunications industry encouraged by the PRC government has directly affected our industry and our growthprospect. In response to the recent global and Chinese economic downturn, the PRC government has adopted policy measures aimed at stimulating the economicgrowth in China. If the PRC government’s current or future policies fail to help the Chinese economy achieve further growth or if any aspect of the PRCgovernment’s policies limits the growth of the telecommunications industry in China or our industry or otherwise negatively affects our business, our growth rate orstrategy, our results of operations could be adversely affected as a result. Our business benefits from certain government tax incentives. Expiration, reduction or discontinuation of, or changes to, these incentives will increase our taxburden and reduce our net income.Under the PRC Enterprise Income Tax Law passed in 2007 and the implementing rules, both of which became effective on January 1, 2008, or the New EITLaw, a unified enterprise income tax rate of 25% and unified tax deduction standard is applied equally to both domesticinvested enterprises and foreigninvestedenterprises, or FIEs. Enterprises established prior to March 16, 2007 eligible for preferential tax treatment in accordance with the then tax laws and administrativeregulations shall gradually become subject to the New EIT Law rate over a fiveyear transition period starting from the date of effectiveness of the New EIT Law.However, certain qualifying hightechnology enterprises may still benefit from a preferential tax rate of 15% if they own their core intellectual properties and they areenterprises in certain Statesupported hightech industries to be later specified by the government. As a result, if our PRC subsidiaries qualify as “hightechnologyenterprises,” they will continue to benefit from the preferential tax rate of 15%, subject to transitional rules implemented from January 1, 2008. Our subsidiary, BeijingZhong Chuan Shi Xun Technology Limited, is qualified as a “hightechnology enterprise” until the end of the November 2018, and therefore it had benefited fromthe preferential tax rate of 15%, subject to transitional rules implemented on January 1, 2008. Although we intend to apply for a renewal of this qualification, if BeijingZhong Chuan Shi Xun ceases to qualify as a “hightechnology enterprise”, or the tax authorities change their position on our preferential tax treatments in thefuture, our future tax liabilities may materially increase, which could materially and adversely affect our financial condition and results of operations.10If we were deemed a “resident enterprise” by PRC tax authorities, we could be subject to tax on our global income at the rate of 25% under the New EIT Lawand our nonPRC shareholders could be subject to certain PRC taxes.Under the New EIT Law and the implementing rules, both of which became effective January 1, 2008, an enterprise established outside of the PRC with “defacto management bodies” within the PRC may be considered a PRC “resident enterprise” and will be subject to the enterprise income tax at the rate of 25% on itsglobal income as well as PRC enterprise income tax reporting obligations. The implementing rules of the New EIT Law define “de facto management” as “substantialand overall management and control over the production and operations, personnel, accounting, and properties” of the enterprise. However, as of the date of thistransition report, no final interpretations on the implementation of the “resident enterprise” designation are available. Moreover, any such designation, when madeby PRC tax authorities, will be determined based on the facts and circumstances of individual cases. Therefore, if we were to be considered a “resident enterprise”by the PRC tax authorities, our global income would be taxable under the New EIT Law at the rate of 25% and, to the extent we were to generate a substantial amountof income outside of PRC in the future, we would be subject to additional taxes. In addition, the dividends we pay to our nonPRC enterprise shareholders and gainsderived by such shareholders or ADS or ordinary share holders from the transfer of our shares or ADSs may also be subject to PRC withholding tax at the rate up to10%, if such income were regarded as Chinasourced income.Our holding company structure may limit the payment of dividends.We have no direct business operations, other than our ownership of our subsidiaries. While we have no current intention of paying dividends, should wedecide in the future to do so, as a holding company, our ability to pay dividends and meet other obligations depends upon the receipt of dividends or otherpayments from our operating subsidiaries and other holdings and investments. Current PRC regulations permit our PRC subsidiaries to pay dividends to us only outof their accumulated profits, if any, determined in accordance with Chinese accounting standards and regulations. In addition, each of our subsidiaries in China isrequired to set aside at least 10% of its aftertax profits each year, if any, to fund a statutory reserve until such reserve reaches 50% of its registered capital. Thesereserves are not distributable as cash dividends. Furthermore, if our subsidiaries in China incur debt on their own behalf in the future, the instruments governing thedebt may restrict their ability to pay dividends or make other payments to us. As a result, there may be limitations on the ability of our PRC subsidiaries to paydividends or make other investments or acquisitions that could be beneficial to our business or otherwise fund and conduct our business.In addition, under the New EIT Law and the implementing rules that became effective on January 1, 2008, dividends generated from the business of our PRCsubsidiaries after January 1, 2008 and payable to us may be subject to a withholding tax rate of 10% if the PRC tax authorities subsequently determine that we are anonresident enterprise, unless there is a tax treaty with China that provides for a different withholding arrangement.Uncertainties with respect to the PRC legal system could adversely affect us.We conduct all of our business through our subsidiaries in China. Our operations in China are governed by PRC laws and regulations. Our PRCsubsidiaries are generally subject to laws and regulations applicable to foreign investments in China and, in particular, laws and regulations applicable to whollyforeignowned enterprises. The PRC legal system is based on statutes. Prior court decisions may be cited for reference but have limited precedential value.11Since 1979, PRC legislation and regulations have significantly enhanced the protections afforded to various forms of foreign investments in China.However, China has not developed a fully integrated legal system and recently enacted laws and regulations may not sufficiently cover all aspects of economicactivities in China. In particular, because these laws and regulations are relatively new, and because of the limited volume of published decisions and theirnonbinding nature, the interpretation and enforcement of these laws and regulations involve uncertainties. In addition, the PRC legal system is based in part ongovernment policies and internal rules (some of which are not published on a timely basis or at all) that may have a retroactive effect. As a result, we may not beaware of our violation of these policies and rules until some time after the violation. In addition, any litigation in China may be protracted and result in substantialcosts and diversion of resources and management attention.PRC regulation of loans and direct investment by offshore holding companies to PRC entities may delay or prevent us from using the proceeds of our May2010 public offering to make loans or additional capital contributions to our PRC operating subsidiaries, which could materially and adversely affect ourliquidity and our ability to fund and expand our business.In utilizing the proceeds of our May 2010 public offering as an offshore holding company of our PRC operating subsidiaries, we may make loans to our PRCsubsidiaries, or we may make additional capital contributions to our PRC subsidiaries. Any loans to our PRC subsidiaries are subject to PRC regulations. Forexample, loans by us to our subsidiaries in China, which are FIEs, to finance their activities cannot exceed statutory limits and must be registered with the StateAdministration of Foreign Exchange, or SAFE. On August 29, 2008, SAFE promulgated Circular 142, a notice regulating the conversion by a foreigninvestedcompany of foreign currency into RMB by restricting how the converted RMB may be used. The notice requires that RMB converted from the foreign currencydenominated capital of a foreigninvested company may only be used for purposes within the business scope approved by the applicable governmental authorityand may not be used for equity investments within the PRC unless specifically provided for otherwise. The foreign currencydenominated capital shall be verified byan accounting firm before converting into RMB. In addition, SAFE strengthened its oversight over the flow and use of RMB funds converted from the foreigncurrencydenominated capital of a foreigninvested company. To convert such capital into RMB, the foreigninvested company must report the use of such RMB tothe bank, and the RMB must be used to the reported purposes. According to Circular 142, change of the use of such RMB without approval is prohibited. Inaddition, such RMB may not be used to repay RMB loans if the proceeds of such loans have not yet been used. Violations of Circular 142 may result in severepenalties, including substantial fines as set forth in the Foreign Exchange Administration Rules.We may also decide to finance our subsidiaries by means of capital contributions. These capital contributions may need approval from the PRC Ministry ofCommerce, or MOFCOM, or its local counterpart. We may not be able to obtain these government approvals on a timely basis, if at all, with respect to future capitalcontributions by us to our PRC subsidiaries. If we fail to receive such approvals in such cases when approval is required, our ability to use the proceeds of our May2010 public offering and to capitalize our PRC operations may be negatively affected, which could adversely affect our liquidity and our ability to fund and expandour business.Governmental control of currency conversion may affect the value of your investment.The PRC government imposes controls on the convertibility of the RMB into foreign currencies and, in certain cases, the remittance of currency out ofChina. We receive substantially all of our revenues in RMB. Under our current corporate structure, our income is primarily derived from dividend payments from ourPRC subsidiaries. Shortages in the availability of foreign currency may restrict the ability of our PRC subsidiaries to remit sufficient foreign currency to paydividends or other payments to us, or otherwise satisfy their foreign currency denominated obligations. Under existing PRC foreign exchange regulations, paymentsof current account items, including profit distributions, interest payments and expenditures from traderelated transactions, can be made in foreign currencieswithout prior approval from SAFE by complying with certain procedural requirements. However, approval from appropriate government authorities is required whereRMB is to be converted into foreign currency and remitted out of China to pay capital expenses such as the repayment of loans denominated in foreign currencies.The PRC government may also at its discretion restrict access in the future to foreign currencies for current account transactions. If the foreign exchange controlsystem prevents us from obtaining sufficient foreign currency to satisfy our currency demands, we may not be able to pay dividends in foreign currencies to ourshareholders, including holders of our ADSs or ordinary shares.12Fluctuation in the value of the RMB may have a material adverse effect on the value of your investment.The value of the RMB against the U.S. dollar and other currencies may fluctuate and is affected by, among other things, changes in political and economicconditions. On July 21, 2005, the PRC government changed its decadeold policy of pegging the value of the RMB to the U.S. dollar. Under the new policy, the RMBis permitted to fluctuate within a narrow and managed band against a basket of certain foreign currencies. This change in policy has resulted in an approximate26.8% appreciation of the RMB against the U.S. dollar between July 21, 2005 and September 30, 2015. Provisions on Administration of Foreign Exchange, asamended in August 2008, further changed China’s exchange regime to a managed floating exchange rate regime based on market supply and demand. Since reachinga high against the U.S. dollar in July 2008, however, the RMB has traded within a narrow band against the U.S. dollar, remaining within 1% of its July 2008 high butnever exceeding it. As a consequence, the RMB has fluctuated sharply since July 2008 against other freelytraded currencies, in tandem with the U.S. dollar. InAugust 2015, the PRC Government devalued its currency by approximately 3%, representing the largest yuan depreciation for 20 years. Concerns remain thatChina’s slowing economy, and in particular its exports, will need a stimulus that can only come from further cuts in the exchange rate.It is difficult to predict how long the current situation may continue and when and how it may change again as the People’s Bank of China may regularlyintervene in the foreign exchange market to achieve economic policy goals. Substantially all of our revenues and costs are denominated in the RMB, and asignificant portion of our financial assets are also denominated in RMB. We principally rely on dividends and other distributions paid to us by our subsidiaries inChina. Any significant revaluation of the RMB may materially and adversely affect our cash flows, revenues, earnings and financial position, and the value of, andany dividends payable on, our ADSs or ordinary shares in U.S. dollars. Any fluctuations of the exchange rate between the RMB and the U.S. dollar could also resultin foreign currency translation losses for financial reporting purposes.PRC laws and regulations governing our businesses. If we are found to be in violation of such PRC laws and regulations, we could be subject to sanctions. Inaddition, changes in such PRC laws and regulations may materially and adversely affect our business.There are substantial uncertainties regarding the interpretation and application of PRC laws and regulations, including, but not limited to, the laws andregulations governing our business. These laws and regulations are relatively new and may be subject to change, and their official interpretation and enforcementmay involve substantial uncertainty. The effectiveness of newly enacted laws, regulations or amendments may be delayed, resulting in detrimental reliance byforeign investors. New laws and regulations that affect existing and proposed future businesses may also be applied retroactively.The PRC government has broad discretion in dealing with violations of laws and regulations, including levying fines, revoking business and other licensesand requiring actions necessary for compliance. In particular, licenses and permits issued or granted to us by relevant governmental bodies may be revoked at a latertime by higher regulatory bodies. We cannot predict the effect of the interpretation of existing or new PRC laws or regulations on our businesses. We cannot assureyou that our current ownership and operating structure would not be found in violation of any current or future PRC laws or regulations. As a result, we may besubject to sanctions, including fines, and could be required to restructure our operations or cease to provide certain services. In addition, any litigation in China maybe protracted and result in substantial costs and diversion of resources and management attention. Any of these or similar actions could significantly disrupt ourbusiness operations or restrict us from conducting a substantial portion of our business operations, which could materially and adversely affect our business,financial condition and results of operations.13If we were required to obtain the prior approval of the China Securities Regulatory Commission, or CSRC, of the listing and trading of our ADSs on theNASDAQ Capital Market, we may face regulatory actions or other sanctions from the CSRC or other PRC regulatory agencies.On August 8, 2006, six PRC regulatory agencies, including the Ministry of Commerce, the State Assets Supervision and Administration Commission, theState Administration for Taxation, the State Administration for Industry and Commerce, the CSRC and the SAFE, jointly issued the Regulations on Mergers andAcquisitions of Domestic Enterprises by Foreign Investors, which became effective on September 8, 2006 (the “New M&A Rules”). This regulation, among otherthings, includes provisions that purport to require that an offshore special purpose vehicle formed for the purposes of overseas listing of equity interests in PRCcompanies and controlled directly or indirectly by PRC companies or individuals obtain the approval of the CSRC prior to the listing and trading of such specialpurpose vehicle’s securities on an overseas stock exchange. On September 21, 2006, the CSRC published on its official website procedures regarding its approval ofoverseas listings by special purpose vehicles. The CSRC approval procedures require the filing of a number of documents with the CSRC and it would take severalmonths to complete the approval process, if practicable at all. The application of this new PRC regulation remains unclear with no consensus currently existingamong leading PRC law firms regarding the scope of the applicability of the CSRC approval requirement. Prior to our May 2010 initial public offering, our PRC counsel has advised us that, based on its understanding of the current PRC laws and regulations aswell as the procedures announced on September 21, 2006: (i) Softech was directly incorporated by Topsky as a foreign investment enterprise under PRC law;therefore, there was no acquisition of the equity of a “PRC domestic company” as defined under the New M&A Rules; and (ii) the contractual arrangementsbetween Kingtone Information and Softech were not clearly defined and considered as the transaction which shall be applied to the New M&A Rules. Therefore, wedid not seek prior CSRC approval for our initial public offering.However, if the CSRC required that we obtain its approval prior to the completion of our initial public offering and the listing of our ADSs on the NASDAQCapital Market, we may face regulatory actions or other sanctions from the CSRC or other PRC regulatory agencies. These regulatory agencies may impose fines andpenalties on our operations in the PRC, limit our operating privileges in the PRC, delay or restrict the repatriation of the proceeds from our initial public offering intothe PRC, or take other actions that could have a material adverse effect on our business, financial condition, results of operations, reputation and prospects, as wellas the trading price of our shares.Also, if the CSRC requires that we obtain its approval, we may be unable to obtain a waiver of the CSRC approval requirements if and when procedures areestablished to obtain such a waiver. Any uncertainties and/or negative publicity regarding this CSRC approval requirement could have a material adverse effect onthe trading price of our shares.PRC regulations relating to the establishment of offshore special purpose companies by PRC residents may subject our PRC resident shareholders to penaltiesand limit our ability to inject capital into our PRC subsidiaries, limit our PRC subsidiaries’ ability to distribute profits to us, or otherwise adversely affect us.On October 21, 2005, the SAFE issued the Notice on Issues Relating to the Administration of Foreign Exchange in Fundraising and Reverse InvestmentActivities of Domestic Residents Conducted via Offshore Special Purpose Companies, or Notice 75, which became effective as of November 1, 2005. According toNotice 75, prior registration with the local SAFE branch is required for PRC residents to establish or to control an offshore company for the purposes of financingsuch offshore company with assets or equity interests in an onshore enterprise located in the PRC, or an offshore special purpose company. An amendment toregistration or filing with the local SAFE branch by such PRC resident is also required for the injection of equity interests or assets of an onshore enterprise in theoffshore special purpose company or overseas funds raised by such offshore company, or any other material change involving a change in the capital of theoffshore special purpose company. Moreover, Notice 75 applies retroactively. As a result, PRC residents who have established or acquired control of offshorespecial purpose companies that have made onshore investments in the PRC in the past are required to have completed the relevant registration procedures with thelocal SAFE branch by March 31, 2006. To further clarify the implementation of Notice 75, the SAFE issued Circular 106 on May 29, 2007. Under Circular 106, PRCsubsidiaries of an offshore special purpose company are required to coordinate and supervise the filing of SAFE registrations by the offshore holding company’sshareholders or beneficial owners who are PRC residents in a timely manner.14Some of our current shareholders and/or beneficial owners may fall within the ambit of the SAFE notice and be required to register with the local SAFEbranch as required under the SAFE notice. If so required, and if such shareholders and/or beneficial owners fail to timely register their SAFE registrations pursuantto the SAFE notice, or if future shareholders and/or beneficial owners of our company who are PRC residents fail to comply with the registration procedures setforth in the SAFE notice, this may subject such shareholders, beneficial owners and/or our PRC subsidiaries to fines and legal sanctions and may also limit ourability to contribute additional capital into our PRC subsidiaries, limit our PRC subsidiaries’ ability to distribute dividends to our company, or otherwise adverselyaffect our business.Risks Associated with our ADSs and Ordinary SharesOur securities are not currently traded on any United States public markets and you may not be able to resell your securities for some time.There is currently no public market for our ordinary shares or American Depository Shares (“ADSs”) in the United States or in any other jurisdiction. OurADSs were voluntarily delisted from the NASDAQ Capital Market on September 19, 2018. We have applied to NASDAQ for the listing of our ordinary shares on theNASDAQ Capital Market and received an approval for listing of Ordinary Shares on August 6, 2018, and as of the date of this transition report, that application andapproval are currently under review. We cannot assume that our ordinary shares will be accepted for listing on the NASDAQ Capital Market, or if listed, that wewould continue to meet the applicable minimum listing requriements. You may not be able to sell your ordinary shares quickly or at all if we are unable to gain listingon a public market in the United States.The market price of our ADSs has historically been highly volatile, and you may not be able to resell our ordinary shares at or above your initial purchaseprice.There may be a limited public market for our ordinary shares and, as discussed above, our ADSs are no longer listed on any public market in the UnitedStates or any other jurisdiction. We cannot assure you that there will be an active trading market for our ordinary shares in the future. If our ordinary shares areaccepted for listing on a public market, you may not be able to sell your ordinary shares quickly or at the market price if trading in our ordinary shares is not active. The trading price of our ADSs and ordinary shares may be volatile. The price of our ADSs and ordinary shares could be subject to wide fluctuations inresponse to a variety of factors, including the following:1.Introduction of new products, services or technologies offered by us or our competitors;2.Failure to meet or exceed revenue and financial projections we provide to the public;3.Actual or anticipated variations in quarterly operating results;4.Failure to meet or exceed the estimates and projections of the investment community;5.General market conditions and overall fluctuations in United States equity markets;6.Announcements of significant acquisitions, strategic partnerships, joint ventures or capital commitments by us or our competitors;7.Disputes or other developments relating to proprietary rights, including patents, litigation matters and our ability to obtain patent protection for ourtechnologies;8.Additions or departures of key management personnel;9.Issuances of debt or equity securities;10.Significant lawsuits, including patent or shareholder litigation;11.Changes in the market valuations of similar companies;12.Sales of additional ordinary shares or other securities by us or our shareholders in the future;13.Trading volume of our ordinary shares;14.Fluctuations in the exchange rate between the U.S. dollar and Renminbi;15.Negative market perception and media coverage of our company or other companies in the same or similar industry with us; and16.Other events or factors, many of which are beyond our control.15In addition, the stock market in general, and the NASDAQ Capital Market and software products and services companies in particular, have experiencedextreme price and volume fluctuations that have often been unrelated or disproportionate to the operating performance of these companies. Broad market andindustry factors may negatively affect the market price of our ordinary shares, regardless of our actual operating performance. Our ADSs and ordinary shares may be subject to the SEC’s penny stock rules which may make it difficult for brokerdealers to complete customer transactionsand trading activity in our securities.Our ADSs and ordinary shares may be deemed to be “penny stock” as that term is defined under the Securities Exchange Act of 1934, as amended. Pennystocks generally are equity securities with a price of less than $5.00 (other than securities registered on certain national securities exchanges or quoted on theNASDAQ system, provided that current price and volume information with respect to transactions in such securities is provided by the exchange or system). Pennystock rules impose additional sales practice requirements on brokerdealers who sell to persons other than established customers and “accredited investors.” Theterm “accredited investor” refers generally to institutions with assets in excess of $5,000,000 or individuals with a net worth in excess of $1,000,000 or annual incomeexceeding $200,000 or $300,000 jointly with their spouse in each of the prior two years.The penny stock rules require a brokerdealer, prior to a transaction in a penny stock not otherwise exempt from the rules, to deliver a standardized riskdisclosure document in a form prepared by the SEC, which provides information about penny stocks and the nature and level of risks in the penny stockmarket. Moreover, brokerdealers are required to determine whether an investment in a penny stock is a suitable investment for a prospective investor. A brokerdealer must receive a written agreement to the transaction from the investor setting forth the identity and quantity of the penny stock to be purchased. Theserequirements may make it more difficult for brokerdealers to effectuate customer transactions and trading activity in our securities. As a result, the market price ofour ADSs and ordinary shares may be depressed, and you may find it more difficult to sell our ADSs or ordinary shares.Sales of a substantial number of ordinary shares or ADSs in the public market by our existing shareholders could cause the price of our ADSs to fall.Sales of a substantial number of our ordinary shares or ADSs in the public market or the perception that these sales might occur, could depress the marketprice of our ADSs and could impair our ability to raise capital through the sale of additional equity securities. We are unable to predict the effect that sales may haveon the prevailing market price of our ADSs.All of our existing shareholders prior to our May 2010 offering were subject to lockup agreements with the underwriters of the offering that restricted theshareholders’ ability to transfer ordinary shares or ADSs until expiration of the lockup period in November 2010. The lockup agreements limited the number ofordinary shares or ADSs that may be sold immediately following the public offering. Subject to certain limitations, approximately 1,000,000 of our total outstandingshares are now eligible for sale. Sales of ordinary shares by these shareholders could have a material adverse effect on the trading price of our ADSs.Future sales and issuances of our ordinary shares, or rights to purchase our ordinary shares, including pursuant to our 2010 Omnibus Incentive Plan, couldresult in additional dilution of the percentage ownership of our shareholders and could cause the price of our ordinary shares to fall.We expect that significant additional capital will be needed in the future to continue our planned operations. To the extent we raise additional capital byissuing equity securities, our shareholders may experience substantial dilution. We may sell ordinary shares, convertible securities or other equity securities in oneor more transactions at prices and in a manner we determine from time to time. If we sell ordinary shares, convertible securities or other equity securities in more thanone transaction, investors may be materially diluted by subsequent sales. Such sales may also result in material dilution to our existing shareholders, and newinvestors could gain rights superior to our existing shareholders.16We do not intend to pay dividends on our ordinary shares, so any returns will be limited to the value of our ADSs and ordinary shares.We have never declared or paid any cash dividend on our ordinary shares. We currently anticipate that we will retain future earnings for the development,operation and expansion of our business and do not anticipate declaring or paying any cash dividends for the foreseeable future. Any return shareholders willtherefore be limited to the value of their ADSs or ordinary shares.As the rights of shareholders under British Virgin Islands law differ from those under U.S. law, you may have fewer protections as a shareholder.Our corporate affairs will be governed by our memorandum of association and articles of association, the BVI Business Companies Act, 2004, or the BVIAct, of the British Virgin Islands and the common law of the British Virgin Islands. The rights of shareholders to take legal action against our directors, actions byminority shareholders and the fiduciary responsibilities of our directors under British Virgin Islands law are to a large extent governed by the BVI Act and thecommon law of the British Virgin Islands. The common law of the British Virgin Islands is derived in part from comparatively limited judicial precedent in the BritishVirgin Islands as well as from English common law, which has persuasive, but not binding, authority on a court in the British Virgin Islands. The rights of ourshareholders and the fiduciary responsibilities of our directors under British Virgin Islands law are not as clearly established as they would be under statutes orjudicial precedents in some jurisdictions in the United States. In particular, the British Virgin Islands has a less developed body of securities laws as compared to theUnited States, and some states (such as Delaware) have more fully developed and judicially interpreted bodies of corporate law.As a result of all of the above, holders of our ADSs and ordinary shares may have more difficulty in protecting their interests through actions against ourmanagement, directors or major shareholders than they would as shareholders of a U.S. company.British Virgin Islands companies may not be able to initiate shareholder derivative actions, thereby depriving shareholders of the ability to protect theirinterests.British Virgin Islands companies may not have standing to initiate a shareholder derivative action in a federal court of the United States. The circumstancesin which any such action may be brought, and the procedures and defenses that may be available in respect to any such action, may result in the rights ofshareholders of a British Virgin Islands company being more limited than those of shareholders of a company organized in the United States. Accordingly,shareholders may have fewer alternatives available to them if they believe that corporate wrongdoing has occurred. The British Virgin Islands courts are alsounlikely to recognize or enforce against us judgments of courts in the United States based on certain liability provisions of U.S. securities law; and to imposeliabilities against us, in original actions brought in the British Virgin Islands, based on certain liability provisions of U.S. securities laws that are penal in nature.There is no statutory recognition in the British Virgin Islands of judgments obtained in the United States, although the courts of the British Virgin Islands willgenerally recognize and enforce the nonpenal judgment of a foreign court of competent jurisdiction without retrial on the merits.The laws of the British Virgin Islands provide little protection for minority shareholders, so minority shareholders will have little or no recourse if theshareholders are dissatisfied with the conduct of our affairs.Under the law of the British Virgin Islands, there is little statutory law for the protection of minority shareholders other than the provisions of the BVI Actdealing with shareholder remedies. The principal protection under statutory law is that shareholders may bring an action to enforce the constituent documents ofthe corporation, our memorandum of association and articles of association. Shareholders are entitled to have the affairs of the company conducted in accordancewith the general law and the memorandum of association and articles of association.17There are common law rights for the protection of shareholders that may be invoked, largely dependent on English company law, since the common law ofthe British Virgin Islands is limited. Under the general rule pursuant to English company law known as the rule in Foss v. Harbottle, a court will generally refuse tointerfere with the management of a company at the insistence of a minority of its shareholders who express dissatisfaction with the conduct of the company’s affairsby the majority or the board of directors. However, every shareholder is entitled to have the affairs of the company conducted properly according to law and thecompany’s constituent documents. As such, if those who control the company have persistently disregarded the requirements of company law or the provisions ofthe company’s memorandum of association and articles of association, then the courts will grant relief. Generally, the areas in which the courts will intervene are thefollowing: (1) an act complained of which is outside the scope of the authorized business or is illegal or not capable of ratification by the majority; (2) acts thatconstitute fraud on the minority where the wrongdoers control the company; (3) acts that infringe on the personal rights of the shareholders, such as the right tovote; and (4) where the company has not complied with provisions requiring approval of a majority of shareholders, which are more limited than the rights affordedminority shareholders under the laws of many states in the United States.Antitakeover provisions in our memorandum of association and articles of association and our right to issue preference shares could make a thirdpartyacquisition of us difficult.Some provisions of our memorandum of association and articles of association may discourage, delay or prevent a change in control of our company ormanagement that shareholders may consider favorable, including provisions that authorize our board of directors to issue preference shares in one or more seriesand to designate the price, rights, preferences, privileges and restrictions of such preference shares.If you hold our ADSs, you may not have the same voting rights as the holders of our ordinary shares and must act through the depositary to exercise your rights.Holders of our ADSs will not be able to exercise voting rights attaching to the shares evidenced by our ADSs on an individual basis. Holders of our ADSswill appoint the depositary or its nominee as their representative to exercise the voting rights attaching to the shares represented by the ADSs. You may not receivevoting materials in time to instruct the depositary to vote, and it is possible that you, or persons who hold their ADSs through brokers, dealers or other third parties,will not have the opportunity to exercise a right to vote. Upon our written request, the depositary will mail to you a shareholder meeting notice which contains,among other things, a statement as to the manner in which your voting instructions may be given, including an express indication that such instructions may begiven or deemed given to the depositary to give a discretionary proxy to a person designated by us if no instructions are received by the depositary from you on orbefore the response date established by the depositary. However, no voting instruction shall be deemed given and no such discretionary proxy shall be given withrespect to any matter as to which we inform the depositary that (i) we do not wish such proxy given, (ii) substantial opposition exists, or (iii) such matter materiallyand adversely affects the rights of shareholders. We will make all reasonable efforts to cause the depositary to extend voting rights to you in a timely manner, butyou may not receive the voting materials in time to ensure that you can instruct the depositary to vote your ADSs. Furthermore, the depositary and its agents willnot be responsible for any failure to carry out any instructions to vote, for the manner in which any vote is cast or for the effect of any such vote. As a result, youmay not be able to exercise your right to vote and you may lack recourse if your ADSs are not voted as you requested. In addition, in your capacity as an ADSholder, you will not be able to call a shareholders’ meeting.You may not be able to participate in rights offerings and may experience dilution of your holdings as a result.We may from time to time distribute rights to our shareholders, including rights to acquire our securities. However, we may not, and under the depositagreement for the ADSs, the depositary will not, offer those rights to ADS holders unless both the rights and the underlying securities to be distributed to ADSholders are registered under the Securities Act, or the distribution of them to ADS holders is exempted from registration under the Securities Act with respect to allholders of ADSs. We are under no obligation to file a registration statement with respect to any such rights or underlying securities or to endeavor to cause such aregistration statement to be declared effective. In addition, we may not be able to rely on an exemption from registration under the Securities Act to distribute suchrights and securities. Accordingly, holders of our ADSs may be unable to participate in our rights offerings and may experience dilution in their holdings as a result.You may be subject to limitations on transfer of your ADSs.Your ADSs are transferable on the books of the depositary. However, the depositary may close its transfer books at any time or from time to time when itdeems expedient in connection with the performance of its duties. In addition, the depositary may refuse to deliver, transfer or register transfers of ADSs generallywhen our books or the books of the depositary are closed, or at any time if we or the depositary deem it advisable to do so because of any requirement of law or ofany government or governmental body, or under any provision of the deposit agreement, or for any other reason.18We may be a passive foreign investment company, of PFIC, which could lead to additional taxes for U.S. holders of our ADSs or ordinary shares.We do not expect to be, for U.S. federal income tax purposes, a passive foreign investment company, or a PFIC, which is a foreign company for which, inany given taxable year, either at least 75% of its gross income is passive income, or investment income in general, or at least 50% of its assets produce or are held toproduce passive income, for the current taxable year, and we expect to operate in such a manner so as not to become a PFIC for any future taxable year. However,because the determination of PFIC status for any taxable year cannot be made until after the close of such year and requires extensive factual investigation,including ascertaining the fair market value of our assets on a quarterly basis and determining whether each item of gross income that we earn is passive income, wecannot assure you that we will not become a PFIC for the current taxable year or any future taxable year. If we are or become a PFIC, a U.S. holder of our ADSs orordinary shares could be subject to additional U.S. federal income taxes on gain recognized with respect to the ADSs or ordinary shares and on certain distributions,plus an interest charge on certain taxes treated as having been deferred under the PFIC rules. Noncorporate U.S. holders will not be eligible for reduced rates oftaxation on any dividends received from us if we are a PFIC in the taxable year in which such dividends are paid or in the preceding taxable year.If our ordinary shares are listed on the NASDAQ Capital Market and the trading price of our ordinary shares fails to comply with the continued listingrequirements of the NASDAQ Capital Market, we would face possible delisting, which would result in a limited public market for our ordinary shares andmake obtaining future debt or equity financing more difficult for us.Companies listed on NASDAQ are subject to delisting for, among other things, failure to maintain a minimum closing bid price of $1.00 per share for 30consecutive business days. On December 19, 2011, we received a letter from NASDAQ indicating that for the last 30 consecutive business days, the closing bidprice of our ADSs fell below the minimum $1.00 per share requirement pursuant to NASDAQ Listing Rule 5550(a)(2) for continued listing on the NASDAQ CapitalMarket. We regained compliance with the minimum bid price requirement for continued listing set forth in NASDAQ Listing Rule 5550(a)(2), as its ADS with itsunderlying ordinary share has achieved a closing bid price of $1.00 or greater for the 10 consecutive business days from November 6 to November 23, 2012 byimplementing a 1for10 combination, or reverse split of the ordinary shares effective November 6, 2012. When listed, we cannot be sure that the price of our ordinaryshares will comply with this requirement for continued listing on the NASDAQ Capital Market in the future. If we were not able to do so, our ordinary shares wouldbe subject to delisting and would likely trade on the overthecounter market. If our ordinary shares were to trade on the overthecounter market, selling ourordinary shares could be more difficult because smaller quantities of shares would likely be bought and sold, transactions could be delayed, and security analysts’coverage of us may be reduced. In addition, brokerdealers have certain regulatory burdens imposed upon them, which may discourage brokerdealers from effectingtransactions in our ordinary shares, further limiting the liquidity of our ordinary shares. As a result, the market price of our ordinary may be depressed, and you mayfind it more difficult to sell our ordinary shares. Such delisting from the NASDAQ Capital Market and continued or further declines in our share price could alsogreatly impair our ability to raise additional necessary capital through equity or debt financing.ITEM 4. INFORMATION ON THE COMPANY.A . HISTORY AND DEVELOPMENT OF THE COMPANY.OverviewWe are a holding company and conduct our operations through our whollyowned subsidiary named LK Technology Ltd., a British Virgin Islands limitedliability company (“LK Technology”), and its whollyowned subsidiaries, MMB Limited and Mobile Media (China) Limited and their respective subsidiaries, whichhold the rights to deploy WiFi systems on about 700 trains in China, including 290 trains in which WiFi systems have already been installed and are in operation. InMay 2010, we consummated an initial public offering of our American Depository Shares, or ADSs, for gross proceeds of $16 million, and our ADSs were listed onthe NASDAQ Capital Market under the ticker symbol “KONE”. Our ordinary shares are not currently listed on any trading market. Our American Depository Shares(“ADSs”) were voluntarily delisted from the NASDAQ Capital Market on September 19, 2018. We have applied to NASDAQ for the listing of our ordinary shares onthe NASDAQ Capital Market and received an approval for listing of Ordinary Shares on August 6, 2018, and as of the date of this transition report, that applicationand approval are currently under review.19On August 17, 2018, we consummated an asset exchange transaction, pursuant to which we exchanged all issued and outstanding capital stock in TopskyInfoTech Holdings Pte Ltd., the parent of Softech, for the issued and outstanding capital stock of LK Technology (the “Asset Exchange”). In connection with theAsset Exchange, we changed our name on August 20, 2018, and on September 20, 2018, issued to the shareholders of C Media Limited, the former parent of LKTechnology, (i) 185,412,599 of our ordinary shares, par value $0.01 per share and (ii) 1,000,000 of our preferred shares. Upon the consummation of the AssetExchange, we ceased our previous business operations and became a company focused on the provision of WiFi and mobile application products for long distancerail travelers in China.On August 25, 2018, LK Technology entered into a Stock Purchase Agreement (the “Agreement”) with the shareholders (“Shareholders”) of SuperengineHoldings Limited, a limited liability company organized under the laws of the British Virgin Islands (the “Superengine”), pursuant to which LK Technology acquiredall of the issued and outstanding capital stock of Superengine for an aggregate purchase price of US$60 million (the “Purchase Price”), which are paid by theissuance of our Ordinary Shares in an amount equal to the quotient of (x) the Purchase Price divided by (y) the average of the closing prices of the Ordinary Shareson the NASDAQ Capital Market over the 12 months period preceding July 31, 2018. We are a party to the Agreement in connection with the issuance of theOrdinary Shares and certain other limited purposes.Corporate InformationOur principal executive offices are located at LAB32, SOHO 3Q, No 9, Guanghua Road, Chaoyang District, Beijing, People’s Republic of China 100020. Ourwebsite is www.luokung.com. We routinely post important information on our website. The information contained on our website is not a part of this transitionreport.Our agent for service of process in the United States is Worldwide Stock Transfer, LLC, the current transfer agent of the Company, with a mailing address ofOne University Plaza, Suite 505, Hackensack, New Jersey 07601.B. BUSINESS OVERVIEW.We are a Chinabased provider of rail WiFi and mobile application products for long distance travelers in China. Our primary mobile application, theLuoKuang platform, consists of the LuoKuang mobile applications, a series of supporting software at the server end, and railWiFi hardware and equipment on thetrains that we serve. The LuoKuang platform incorporates technology covered by 22 patents and about 34 software copy rights, and serves as a content and servicedistribution platform that is tailored for particular travel stages featuring geographic location and social interaction. The content and services distributed byLuoKuang contain information, entertainment, travel, ecommerce, online to offline (“O2O”), advertisement and marketing features.LuoKuang mainly provides personalized and precise services to long distance travelers in two locations: on the train and at the destination. Based on thetravel environment, the core elements of our users’ needs include staving off boredom on trains and discovering and exploring new locations upon arrival. The mainservices contain entertainment services (videos and audio, digital readings, games specific and tailored to the travel stage) and social services (satisfying thedemand for value discovery of unfamiliar destinations through social interaction among strangers based on locations). As of December 31, 2017, the LuoKuangplatform featured about 38 million users.The setting services on the train focus on providing entertainment content for passengers to pass time during longdistance travel in closed environments.For example, we provide access to long video formats such as movies and TV shows, short videos, music, digital readings and games.20We use the most valuable WiFi location—the train WiFi setting—as the entrance of our LuoKuang platform and mobile applications. Passengers typicallyride trains for longdistance and interprovincial travel purposes. The long periods of monotonous journeys and the cost concerns for roaming traffic fees enable thecombination of entertainment content service needs and WiFi access needs. Our railWiFi becomes a valuable and sophisticated WiFi service in this setting—notjust WiFi connection service, but a provider of sophisticated services through a WiFi connection. In addition, the annual traffic of 800,000 passengers onboardeach train makes rail WiFi a huge entry point for mobile applications. We do not define ourselves as a train WiFi communication service operator but as a longdistance travel mobile service provider. We provide users with free WiFi access so that users are able to connect to the LuoKuang platform and thus access relatedentertainment services, services on the train and destination services. The rail WiFi is our access point to a significant pool of users and the entrance to acquiringadditional users.The setting services focus on providing targeted push services to users while travelling in unfamiliar cities. Information and service guidance are preciselypushed to appeal to the interests and tastes (eating, drinking, shopping, touring and culture) of individual users (cuisine specialties and local snacks, local events,viewing sights, culture, history, stories). The service guidance is generated, shared and distributed by individual users (travelers, local residents, local businesses)interacting with current locations and featuring users who generated contents from selfmedia and small and medium vertical contents providers).Based on the GIS (geoinformation system), Superengine is a provider of big spatialtemporal data, network graphic image technology and relevant service.Its super engine series includes computer graphic image engines and spatial database engines. Spatialtemporal cloud index is the core of the company’s spatialtemporal data engines. It is equivalent to the neural network of the big data and the Internet. It extends the value of its products and platform to its data serviceproviders. In cooperation, its service providers can be divided into three categories, namely, basic geographic data providers, industrial data providers andbehavioral data providers). Superengine’s industriesoriented spatialtemporal data engine was launched in 2016. The spatialtemporal GIS platform has been appliedin industries such as aerospace, power grid, surveying & mapping, agriculture, cultural relic preservation, water conservancy, public security, railway section, smartcities, and business location selection.Our primary sources of revenue are advertising and marketing promotion revenues.Our Industry — Mobile Internet IndustryOur products and services are engaged in the mobile internet industry. Our main services consist of entertainment services (videos, audio, digital readings,games that are tailormade for passengers on train) and other services including satisfying the demand for value discovery of unfamiliar destinations through socialinteractions among strangers based in such locations). The mobile internet industry in China is rapidly growing and is likely to be in a longterm growth trend.According to the Mobile Internet Blue Book of China Mobile Internet Report, in 2017 the market size of China mobile internet reached RMB 605 billion. Now China isin a leading position in terms of smartphone, mobile communication network and mobile application services. The pool of users is anticipated to keep expandingthrough the promotion and popularization of smartphones and the expansion of the mobile internet market.Video is the leading online entertainment format in China. According to the iResearch Report, over 80% of total time spent by users on online entertainmentin China in 2016 was internet video. Online entertainment, especially internet video, is attractive to Chinese users due to many favorable factors, including easyaccessibility, wide content selection, and innovative platforms with social features.For 2017, the transaction volume of China mobile ecommerce market reached to over RMB 4 trillion according to the China Mobile Ecommerce IndustryResearch Report from iResearch, representing an increase of 19.1%. For the next few years, China mobile online shopping will likely maintain steady growth. Thefocal point of competition in China mobile ecommerce market has shifted from infrastructure service providers to integrated and accurate services providers.Drawing in users with compelling content in diversified scenes has become a trend.21The revenue for China mobile gaming industry reached RMB 144.58 billion for the year of 2017, according to the China Mobile Game Industry ResearchReport from iResearch. With increased investment by largescale enterprises in the sector of mobile games and the strict enforcement of the mobile game industryrelated regulatory policy guidelines, the mobile game market as a whole will become more organized and standardized.According to the Annual Analysis of China Mobile Reading Industry from Analysis, for the year of 2017, the mobile reading market in China reached toRMB 14.04 billion. By the end of 2016, the size of China mobile's reading market reached RMB 11.86 billion, showing an increase of 18.38% in 2017.The closed and boring environment for passengers of longdistance travel and high roaming charges lead to a strong demand to use our rail WiFi services.Passengers, through their own mobile phone, have access to the free WiFi network in each carriage, access to our rich mobile internet entertainment content andtravel services. According to the annual statistical bulletin of China Railway Corporation in 2017, there were about 6,030 trains in operation in China in 2017,consisting of 2,935 high speed trains and 3,095 express trains. The rail WiFi system that we have installed are currently all on express trains. The market value will bemultiplied several times following the extended coverage of service on other trains.Our StrengthsWe believe the following strengths differentiate us from our competitors:Our strategy is to build up personalized and targeted service products for travelers through rail WiFi networks, enabling our services to evolve into a coredriving distribution platform that provides content, news, games, ecommerce, OTO service, travel services and advertising and marketing. In comparison, ourcompetitors offer simple forms of media services on trains. We focus on personalized and targeted matching between users on long distance trips and services. Ourcompetitors focus on operating and generating internet traffic.We possess a complete set of technology system including network, client end and service and operation platform. We have patent protections for WiFiequipment on trains. Our technology strengths are briefly summarized below.WiFi EquipmentPatent protected. Supports WiFi/3G/4G telecom modules; 4 core CPU with X86 architecture, and SSD hard disk with big storage for localcontents.InfrastructureThe technology infrastructures include the application program system, big data gathering and processing systems, intelligence cloudsservice deployment structure systems and our WiFi hardware server deployment structure system. The operation center, big data center,contents center and railWiFi server system are built on this infrastructure. On the above layer, the equipment management platform,account and payment platform, contents management platform and advertisement distribution platform are set up for daily managementpurpose.LuoKuang strengthens the connection of services among people, setting and locations. In catering to people on the move, we anticipate strengthening therelationship between users and their locations in a given moment. Currently, LuoKuang provides the link between users and thirdparty service providers andprovides value added services to both users and thirdparty service providers. The connection is not simply a traffic diversion, but also the direct presentation ofrelevant services in the LuoKuang platform. The open API interface and independent product software package allows easy access by service providers anddevelopers and supports data service, advertisement operations, billing, users promotion and product marketing services. As an API product, LuoKuang does notcreate content or services. The content and services are provided by our partners in the LuoKuang platform. Now, the majority of top mobile internet content andservices providers in China have a presence in the Luokuang platform. Those include, but are not limited to, Toutiao, Wangyi News, iqiyi, Letv, YoudianCinema(Hollywood films), Sohu video, Phoenix Video, Kugou Music, FM Qingting, iReader, Baidu Literature, Phoenix Novel, Baidu Game, Meituan, Dianping, andsimilar content providers.22Our StrategyLuoKuang is positioned to provide API interface services and geographic information social services. The API interface services are provided within thetypical BC model. LuoKuang pushes the content and services from thirdparty service providers to users. The local businesses, service practitioners, residents, andforeign travelers are all defined as a “user” and may participate in social interactions based on local value information and generate UGC content. The socalled localvalue information is defined as information, views, evaluations, experiences and experience sharing related to the local cultural scene, native products,entertainment, food, tourism and activities.The LuoKuang user growth strategy is to have access to users through the travelers’ use of mobile devices in connection with longdistance train travel.Through deploying WiFi systems on trains and providing free WiFi access to passengers, LuoKuang is able to have consistent access to longdistance travelers.The WiFi system on the train has become a powerful user portal at the early stage of LuoKuang and has gained substantial user traffic. We are in a leading positionin terms of numbers of trains contracted and trains in operation with our free WiFi system. We have contracted with about 700 trains, which cover almost 560 millionannual passenger trips. As of the date of this report, approximately 290 trains are operating our rail WiFi system. We will continue to install our rail WiFi system inthe following years.The development strategy for LuoKuang encompasses the following:1.Enhance our local cycle service (a recommendation service system based on the location of travelers after their arrival, recommendations includingtourist attractions, local specialties and other items of interest), strengthen services for arrivals in the form of social interaction and focus on the valueof relationships between users and their current locations.2.Focus on the development of geographic positioning technology. Get the business of local cycle and users on train mixed together. We will put oureffort to maximize the synergy effect.3.Big Data: Behavior data about passenger trips is obtained via the traffic entrance of rail WiFi and these data will help to optimize our product.4.While enhancing setting service experiences and optimizing entertainment experiences, we will enrich ecommerce services on trains featuringrecommendations of customized products and ecommerce shopping guidance of products labeled with specific geographic location (and trafficdiversion).5.Focus on API positioning and attract more premium vertical service providers (contents and services).Intellectual PropertyWe have registered the following software copyrights, patents and trademarks for our business operations. We believe this intellectual property forms anintegral part of our competitive strength.23Patents:We have been granted some inventions by the State Intellectual Property Office of PRC. We possess a complete set of technology system includingnetwork, client end and service and operation platform. We have patent protections for WiFi equipment on trains. We have received the following patents:No.Name of patentTypeRegistrationNumberDate of Insurance1.Wireless communication multimedia chip business consumer informationacquisition terminal deviceInventionZL 2010 2 0528767.9Sep 21, 20112.A user behavior processing method and device for intelligent terminalInventionZL 2013 1 0301728.3May 27, 20153.A global positioning system terminal deviceInventionZL 2010 2 0253452.8Nov 7, 20114.A wireless multimedia serverInventionZL 2013 2 0220183.9Nov 13, 20135.Ordering system of passengers on trainInventionZL 2015 2 0095381.6Aug 5, 20156.A wireless multimedia serverInventionZL 2015 2 0201382.4Oct 28, 20157.An antenna structureInventionZL 2016 2 0424352.4Mar 1, 20178.Spatial data progressive transmission method and deviceInvention201010617383.9Jun 15, 20169.Methods and devices for conflict detection and avoidance of spatial entity elementlabelingInvention201010617385.8Mar 26, 201410.Spatial data processing method and deviceInvention201010617399.XJun 26, 201311.Method and device of spatial data simplificationInvention201010617400.9Mar 13, 201312.Method and device for judging the occlusion type of space entityInvention201010617403.2Sep 25, 201313.A method and device for distributed mapping of 3d model dataInvention201110274924.7Mar 26, 201414.Data simplification of 3d model, gradual transmission method and deviceInvention201110275336.5Mar 25, 201515.Spatial data transmission method and deviceInvention201110306393.5Dec 13, 201416.Methods and devices for spatial data processing, simplification and progressivetransmissionInvention201210104250.0Jun 10, 201517.Spatial data progressive transmission method and deviceInvention201310367021.2Jun 23, 201718.Simplification method and device of spatial dataInvention201310367128.7Sep 22, 201719.The method and device to accelerate transmission and display of graphic dataacross platformsInvention201210116149.7Aug 10, 201620.Methods and devices related to spatial data compression, decompression andprogressive transmissionInvention201310136682.4Nov 10, 2017We also have two patents outside of China.No.Name of patentCountryNationalRegistrationNumberDate ofInsurance1.Spatial data processing method and deviceJapan2012547439Jun 20, 20142.Methods and devices related to spatial data compression, decompression andprogressive transmissionU.S.A14/394,610Sep 5, 201724Software Copyrights:We have received the following software copyrights from the National Copyright Administration (“NCA”) of PRC:No.Name of CopyrightAchievement approachRegistration numberTime of obtainExpire time1.WAP PUSH Business operation platformsystemIndependent research anddevelopment2007SRBJ1464Jul 23, 200750 years2.TDSCDMA Streaming media businessmanagement platform software V1.0Independent research anddevelopment2009SRBJ0412Jan 22, 200950 years3.Content management platform systemsoftware V1.0Independent research anddevelopment2009SRBJ1374Apr 1, 200950 years4.Mobile multimedia broadcast electronicservice guide system software V1.0Independent research anddevelopment2009SRBJ1365Apr 1, 200950 years5.Mobile video business operation platformsystem V1.0Independent research anddevelopment2007SRBJ1463Jul 23, 200750 years6.Mobile multimedia broadcast emergencybroadcast platform software V1.0Independent research anddevelopment2010SRBJ0720Mar 5, 201050 years7.Mobile multimedia broadcast audio richmedia interactive platform softwareV1.0Independent research anddevelopment2010SRBJ0719Mar 5, 201050 years8.Printer typesetting and printing softwareV1.0Independent research anddevelopment2011SRBJ4190Sep 28, 201150 years9.Electronic newspaper business supportplatform software V1.0Independent research anddevelopment2011SRBJ4186Sep 28, 201150 years10.Public information business platformsoftware V1.0Independent research anddevelopment2011SRBJ3810Sep 27, 201150 years11.User interface scripting software V1.0Independent research anddevelopment2011SRBJ3809Sep 27, 201150 years12.Integrated business management platformsoftware V1.0Independent research anddevelopment2012SR003002Jan 16, 201250 years13.Interactive business development platformsoftwareIndependent research anddevelopment2011SRBJ4593Nov 29, 201150 years14.Instant messaging and messaging systemsoftwareIndependent research anddevelopment2014SR122231Aug 5, 201450 years15.General statistical platform software forclient productsIndependent research anddevelopment2014SR216662Dec 30, 201450 years16.CMMB Data broadcast managementplatform softwareIndependent research anddevelopment2009SRBJ0391Jan 22, 200950 years17.Integrated passenger train service systemIndependent research anddevelopment2012SR083665Sep 5, 201250 years25No.Name of CopyrightAchievement approachRegistration numberTime of obtainExpire time18.JHBY Train inspection managementsystemIndependent research anddevelopment2013SR015105Feb 21, 201350 years19.Integrated information engine platformsoftware V1.0Independent research anddevelopment2014SR040347Nov 30, 200150 years20.Super information engine developmentplatform software V5.0Independent research anddevelopment2014SR036792Mar 5, 200350 years21.Core map super network informationengine platform software V1.0Independent research anddevelopment2014SR036772Sep 15, 200750 years22.Integrated management of the grid gissoftware V1.0Independent research anddevelopment2014SR036808Jun 20, 200850 years23.Core map rural power grid equipment GPSpatrol system software V1.0Independent research anddevelopment2014SR036810Dec 10, 200850 years24.Diagram grid patrol PDA system softwareV1.0Independent research anddevelopment2014SR036778Dec 12, 200850 years25.Core map geographic information enginedesktop platform software V1.0Independent research anddevelopment2014SR036614Jan 15, 200950 years26.Integrated management of the gridgeographic information Web systemsoftware V1.0Independent research anddevelopment2014SR036799Mar 10, 200950 years27.Core map railway power supply equipmentGPS patrol system software V1.0Independent research anddevelopment2014SR036783Mar 25, 201050 years28.Core map network 3 d map server softwareV1.0Independent research anddevelopment2014SR036788Feb 20, 201150 years29.Core map network 3d map clientsoftwareV1.0Independent research anddevelopment2014SR036637Feb 22, 201150 years30.Core map 3d map network publishingplatform software V1.0Independent research anddevelopment2014SR036633Mar 10, 201150 years31.Core map 3d map network release pluginsystem software V1.0Independent research anddevelopment2014SR036622Mar 15, 201150 years32.Core map network 3d map smartphoneplatform software V1.0Independent research anddevelopment2014SR036638Apr 28, 201150 years33.Core map network GIS Shared mobileplatform software V1.0Independent research anddevelopment2014SR036634Oct 31, 201150 years34.Core map network GIS sharing platformsoftware V1.0Independent research anddevelopment2014SR036639Dec 16, 201150 yearsTrademarks:We have registered the following trademarks with the Trademark Office, State Administration for Industry and Commerce in the PRC:NoTrademarkClassification NumberValid PeriodRegistration Number1Y图形382010.04.212020.04.2067460692Y图形412010.09.072020.09.0667460673YRADIO文字352010.07.212020.07.2067334374YRADIO文字382010.04.21.2020.04.2067334385YRADIO文字412010.09.072020.09.0667334396LookLook图形382009.04.072019.04.0646660517LookLook图形422008.12.212018.12.2046660508YTV文字352010.07.212020.07.2067335799YTV文字382010.05.282020.05.27673357810YTV文字412010.09.072020.09.06673358111YTV文字422010.09.072020.09.06673358012YOUTV文字352010.07.212020.07.20673344013YOUTV文字382010.05.282020.05.27673344114xfeng文字352012.03.282022.03.27922914526NoTrademarkClassification NumberValid PeriodRegistration 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NumberValid PeriodRegistration Number58箩筐图形382016.06.142026.06.131658022959箩筐图形352016.06.142026.06.131658023060箩筐图形92016.06.142026.06.131658023161微时光文字422016.09.282026.09.271658024762传游录屏文字92016.06.142026.06.131678214463传游录屏文字352016.06.142026.06.131678214364传游录屏文字382016.06.142026.06.131678214265传游录屏文字412016.06.142026.06.131678214166传游录屏文字422016.06.142026.06.131678214067录游器文字92016.06.142026.06.131678213568录游器文字352016.06.142026.06.131678213669录游器文字382016.06.142026.06.131678213770录游器文字412016.06.142026.06.131678213871录游器文字422016.06.142026.06.131678213972畅联TV文字412016.01.212026.01.201579246773畅联TV文字382016.01.212026.01.201579246874SuperEngine92016.01.212026.01.20812572275SuperEngine422016.01.212026.01.20812572876超擎9/422016.01.212026.01.201647320577SUPERENGINE9/422016.01.212026.01.2016473185*See below for an explanation of each classification number used in the table above.Classification No. 9: data processing apparatus, couplers (data processing equipment), computer software (recorded), monitors (computer programs), smartcards (integrated circuit cards), electrodynamic apparatus for the remote control of signals, alarms, and electric installations for the remote control of industrialoperations.Classification No. 35: auctioneering, sales promotion for others, marketing analysis, marketing research, importexport agencies, advisory services forbusiness management, business management for franchise, personnel management consultancy, relocation services for businesses, and systemization ofinformation into computer databases.Classification No. 38: Include services that enable at least sensory communication between two people. Such services include that allow one person to talkto another, send messages from one person to another, Make verbal or visual contact between one person and the other. This classification especially include theservice for broadcasting radio or television programs. Except for radio advertising services and telemarketing services.Classification No. 41: instruction services, teaching, education information, tuition, arranging and conducting of colloquiums, publication of electronicbooks and journals online, amusements, and vocational guidance.Classification No. 42: technical research, studies (technical project), computer software design, updating of computer software, recovery of computer data,computer systems analysis, installation of computer software, computer antivirus protection, and research and development for others. 28Business Certificates and QualificationsWe have obtained all necessary regulatory certifications to conduct our business in the PRC, including without limitation, the following: SoftwareEnterprise Recognition Certificate, Computer Information System Integration Qualification Certificate, Construction Enterprise Qualification Certificate, and SecurityTechnology & Protection Enterprise Certificate. We have also been properly certified as a hightech enterprise and have met the ISO 9001:2000 qualificationmanagement system.Legal ProceedingsAlthough we may, from time to time, be involved in litigation and claims arising out of our operations in the normal course of business, we do not believethat we are a party to any litigation that will have a material adverse impact on our financial condition or results of operations. To our knowledge, other than asdescribed below there are no material legal proceedings threatened against us. From time to time, we may be subject to various claims and legal actions arising in theordinary course of business. Following the consummation of the AEA, we became successor in interest to the legal proceedings described below.Litigation with Shanghai Fusheng Weier Intelligent Control Technology Co., Ltd.On January 22, 2016, Zhong Chuan Rui You and Shanghai Fusheng Weier Intelligent Control Technology Co., Ltd. (“Fusheng Weier”) signed a contract forequipment of $1,652,842 (RMB10,800,000). Since Zhong Chuan Rui You did not make the payments of $1,126,381 (RMB7,360,000) on the due dates, Fusheng Weierfiled a lawsuit against Zhong Chuan Rui You in Shanghai Xuhui District People's Court on October 8, 2016. On March 9, 2017, Xuhui District People's Court issuedthe verdict requiring Zhong Chuan Rui You to pay the overdue debts. In August 2017, C Media Limited made the payment of $512,075 (RMB3,346,000). Theremaining balance has been accrued in accounts payable. The payment schedule for the remaining balance is being negotiated by the two parties. On February 5,2018, a hearing was held adding Zhong Chuan Shi Xun as a defendant. The Group plans to settle the remaining balance within one year.Lawsuit with Gansu Jinlun Culture Media Co., Ltd.On August 22, 2014, Zhong Chuan Rui You and Gansu Jinlun Culture Media Co., Ltd. (“Gansu Jinlun”) signed a “Lanzhou Railway Bureau AirconditionedTrain WiFi Network System Advertising Operation Rights Agreement” for advertising on 72 trains of $1,467,880 (RMB9,604,633). Due to the dispute on theproject implementation, Zhong Chuan Rui You did not pay the advertising fee. On August 23, 2017, Gansu Jinlun filed a lawsuit with Gansu Intermediate People'sCourt. On December 19, 2017, Gansu Intermediate People's Court issued a verdict, ruling that Zhong Chuan Rui You settle the overdue advertising fee. Since only 18out of 72 trains have been installed with Wifi network system, Zhong Chuan Rui You disputed and appealed to the verdict. The next court trial date has not yet beendetermined.C Media and Gansu Jinlun are negotiating a potential settlement to resume the contract. According to the legal counsel, it is probable that the settlementwill amount to approximately $459,000 (RMB3,000,000); therefore, this amount has been accrued in accounts payable as at December 31, 2017.Litigation with Shenzhen Hua Xun Fang Zhou Technology Co., Ltd.On June 16, 2015, Zhong Chuan Rui You signed a cooperation agreement with Shenzhen Hua Xun Fang Zhou Technology Co., Ltd. (“Shenzhen Hua Xun”)and Xuesong Song, a major shareholder of C Media Limited. Pursuant to this agreement, Zhong Chuan Rui You procures equipment from Shenzhen Hua Xun.Xuesong Song acts as a joint liability guarantor for the entire debts of Zhong Chuan Rui You under this agreement. As Zhong Chuan Rui You did not make thepayments on the due dates, Shenzhen Hua Xun filed a lawsuit with Shenzhen Baoan District People's Court on May 31, 2016. On November 1, 2016, Zhong ChuanRui You, Xuesong Song and Shenzhen Hua Xun reached a settlement in Shenzhen Baoan District People's Court to settle $1,735,389 (RMB11,355,000) in fourinstalments. On December 30, 2017, the debt was assigned to C Media Limited.29C. ORGANIZATIONAL STRUCTUREThe following diagram illustrates our corporate structure and the place of formation and affiliation of each of our subsidiaries and affiliates as of September30, 2018.30The following diagram illustrates our corporate structure and the place of formation and affiliation of each of our subsidiaries and affiliates as of December31, 2017.Contractual Arrangements with Beijing Zhong Chuan Shi Xun Technology Limited’s Subsidiaries and Their Respective ShareholdersTo comply with the PRC legal restrictions on foreign ownership of companies that operate mobile application services, our subsidiaries operate in suchrestricted service areas in the PRC through certain PRC domestic companies, whose equity interests are held by certain management members or founders of the LKTechnology Ltd. Part of the registered capital of these PRC domestic companies was funded by certain management members or founders of LK Technology Ltd. LKTechnology Ltd., through its subsidiary Zhong Chuan Tian Xia Information and Technology (Shenzhen) Limited (the “WFOE”), has entered into an exclusivebusiness cooperation agreement with Beijing Zhong Chuan Shi Xun Technology Limited (“Zhong Chuan Shi Xun” or the “VIE”) the PRC domestic company, whichentitle the WFOE to receive a majority of profit of Zhong Chuan Shi Xun. In addition, Zhong Chuan Tian Xia Information and Technology (Shenzhen) Limited hasentered into certain agreements with those management members or founders, including equity interest pledge agreement of the equity interests held by thosemanagement members or founders and exclusive option agreement to acquire the equity interests in these companies when permitted by the PRC laws, rules andregulations. Details of the typical VIE structure of our significant consolidated VIE, primarily domestic companies associated with the operations such as ZhongChuan Shi Xun and its subsidiaries of Zhong Chuan Rui You, Huoerguosi Luokuang and Jiu Zhou Shi Dai, are set forth below: Exclusive Business Cooperation AgreementThe VIE has entered into an exclusive business services agreement with the WFOE, pursuant to which the WFOE provides exclusive business services tothe VIE. In exchange, the VIE pays a service fee to the WFOE which amounts to be no less than the 80% of the VIE’s aftertax profit, resulting in a transfer ofsubstantially all of the profits from the VIE to the WFOE.Exclusive Option AgreementThe VIE equity holders have granted the WFOE exclusive call options to purchase their equity interest in the VIE at an exercise price equal to the minimumprice as permitted by applicable PRC laws. The WFOE may nominate another entity or individual to purchase the equity interest, if applicable, under the call options.Each call option is exercisable subject to the condition that applicable PRC laws, rules and regulations do not prohibit completion of the transfer of the equityinterest pursuant to the call option. The VIE agrees not to distribute any dividends to the VIE equity holders without the approval of WFOE.31Equity Interest Pledge AgreementPursuant to the equity pledge agreement, the VIE equity holders have pledged all of their interests in the equity of the VIE as a continuing first prioritysecurity interest in favor of the WFOE to secure the performance of obligations by the VIEs and/or the equity holders under the exclusive business cooperationagreement. The WFOE is entitled to exercise its right to dispose of the VIE equity holders’ pledged interests in the equity of the VIE and has priority in receivingpayment by the application of proceeds from the auction or sale of such pledged interests, in the event of any breach or default under the exclusive businesscooperation agreement, if applicable. These equity pledge agreement remain in force until all the obligations under the exclusive business cooperation agreementhave been fulfilled.The exclusive business cooperation agreement and equity interest pledge agreement described above also enable the Company to receive substantially allof the economic benefits from the VIE by typically entitling the WFOE to all dividends and other distributions declared by the VIE and to any distributions orproceeds from the disposal by the VIE equity holders of their equity interests in the VIE.D. PROPERTY AND EQUIPMENTWe lease offices located at Lab 30 & Lab 32, SOHO 3Q, No 9, Guanghua Road, Chaoyang District, Beijing, which covers a floor space of 600 square meters.These leases expire at different times throughout 2018 and are renewable upon negotiation.ITEM 4A. UNRESOLVED STAFF COMMENTSNone.ITEM 5. OPERATING AND FINANCIAL REVIEW AND PROSPECTSA . OPERATING RESULTS.The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our consolidatedfinancial statements and the notes to those financial statements appearing elsewhere in this report. This discussion and analysis contains forwardlookingstatements that involve significant risks and uncertainties. As a result of many factors, such as our anticipated growth strategy, our plans to recruit moreemployees, our plans to invest in research and development to enhance our product or service lines, our future business development, results of operations andfinancial condition, expected changes in our net revenues and certain cost or expense items, our ability to attract and retain customers, trends and competitionin the enterprise mobile software application market, and the factors set forth elsewhere in this report, our actual results may differ materially from thoseanticipated in these forwardlooking statements. In light of those risks and uncertainties, there can be no assurance that the forwardlooking statementscontained in this report will in fact occur. You should not place undue reliance on the forwardlooking statements contained in this report.The forwardlooking statements speak only as of the date on which they are made, and, except to the extent required by U.S. federal securities laws, weundertake no obligation to update any forwardlooking statement to reflect events or circumstances after the date on which the statement is made or to reflectthe occurrence of unanticipated events. Further, the information about our intentions contained in this report is a statement of our intention as of the date of thisreport and is based upon, among other things, the existing regulatory environment, industry conditions, market conditions and prices and our assumptions as ofsuch date. We may change our intentions, at any time and without notice, based upon any changes in such factors, in our assumptions or otherwise.32Unless the context otherwise requires, all references to (i) “PRC” and “China” are to the People’s Republic of China; (ii) “U.S. dollar,” “$” and “US$”are to United States dollars; and (iii) “RMB”, “Yuan” and Renminbi are to the currency of the PRC or China.OverviewLuokung Technology was incorporated on October 27, 2009 under the laws of the British Virgin Islands. We are a holding company and conduct ouroperations through LK Technology Ltd., a British Virgin Islands limited liability company (“LK Technology”) and its whollyowned subsidiaries, MMB Limited andMobile Media (China) Limited and their respective subsidiaries and a contractuallycontrolled entity in the PRC named Beijing Zhong Chuan Shi Xun Technology,which hold the rights to deploy WiFi systems on about 700 trains in China, including 290 trains in which WiFi systems have already been installed and are inoperation. In May 2010, we consummated an initial public offering of our American Depository Shares, or ADSs, for gross proceeds of $16 million, and our ADSswere listed on the NASDAQ Capital Market under the ticker symbol “KONE”. Our ordinary shares are not currently listed on any trading market. Our AmericanDepository Shares (“ADSs”) were voluntarily delisted from the NASDAQ Capital Market on September 19, 2018. We have applied to NASDAQ for the listing of ourordinary shares on the NASDAQ Capital Market and received an approval for listing of Ordinary Shares on August 6, 2018, and as of the date of this transitionreport, that application and approval are currently under review.On August 17, 2018, we consummated an asset exchange transaction, pursuant to which we exchanged all issued and outstanding capital stock in TopskyInfoTech Holdings Pte Ltd., the parent of Softech, for the issued and outstanding capital stock of LK Technology (the “Asset Exchange”). In connection with theAsset Exchange, we changed our name on August 20, 2018, and on September 20, 2018, completed the issuance to the shareholders of C Media Limited, the formerparent of LK Technology, of (i) 185,412,599 of our ordinary shares, par value $0.01 per share and (ii) 1,000,000 of our preferred shares. Upon the consummation of theAsset Exchange, we ceased our previous business operations and became a company focused on the provision of WiFi and mobile application products for longdistance travelers in China.On August 25, 2018, LK Technology entered into a Stock Purchase Agreement (the “Agreement”) with the shareholders (“Shareholders”) of SuperengineHoldings Limited, a limited liability company organized under the laws of the British Virgin Islands (the “Superengine”), pursuant to which LK Technology acquiredall of the issued and outstanding capital stock of Superengine for an aggregate purchase price of US$60 million (the “Purchase Price”), which are paid by theissuance of our Ordinary Shares in an amount equal to the quotient of (x) the Purchase Price divided by (y) the average of the closing prices of the Ordinary Shareson the NASDAQ Capital Market over the 12 months period preceding July 31, 2018. We are a party to the Agreement in connection with the issuance of theOrdinary Shares and certain other limited purposes.Results of operations for the fiscal year ended December 31, 2017 compared to the fiscal year ended December 31, 2016.RevenueWe provide displaybased online advertising services to customers by integrating text description, image and video, and displaying the advertisements in aprominent position of LuoKuang Application. We recognize revenue in accordance with ASC 605, over the contractual term based on the agreements andconfirmation letters signed by both parties, commencing on the date the customer’s advertisement is displayed on our platform.For the year ended December 31, 2017, we had revenue of $26,082,417, as compared to revenue of $5,233,145 for the year ended December 31, 2016, anincrease of $20,849,272, or 398.4%, which was primarily due to the increase of our advertising clients.Cost of revenueOur cost of revenue primarily consists of depreciation, labor cost, WiFi equipment installation fees, data charges, annual payments to local railway bureau,other overhead costs.33Cost of revenue for the year ended December 31, 2017 was $5,547,779, representing a decrease of $767,725 or 12.2% as compared to $6,315,504 for the yearended December 31, 2016. The decrease was primarily attributable to the decrease in labor cost as a result of our cost control and a decrease in the number ofmaintenance staff. Additionally, data charges decreased as train passengers prefer using their mobile data, leading to a decrease in 3G and 4G data.Selling and marketing expenseOur selling and marketing expense mainly include promotional and marketing expenses and compensation for our sales and marketing personnel.Selling expense totaled $23,908,733 for the year ended December 31, 2017, as compared to $6,209,804 for the year ended December 31, 2016, an increase of$17,698,929 or 285.0%. The increase was primarily attributable to the increase in promotional and marketing activities conducted by the Company.General and administrative expenseOur general and administrative expenses consist primarily of salaries and benefits for our general and administrative personnel, rent, fees and expenses forlegal, accounting and other professional servicesGeneral and administrative expense totaled $2,451,249 for the year ended December 31, 2017, as compared to $2,108,854 for the year ended December 31,2016, an increase of $342,395 or 16.2%.Research and development expenses.Research and development expenses primarily consist of salaries and benefits for research and development personnel.Research and development expenses totaled $1,046,198 for the year ended December 31, 2017, as compared to $2,882,202 for the year ended December 31,2016, a decrease of $1,836,004 or 63.7%. The decrease was primarily attributable to the Company reduced its expenses in research and development temporarily asour products are quite stable at present.Loss from operationsAs a result of the factors described above, for the year ended December 31, 2017, loss from operations amounted to $6,871,542, as compared to loss fromoperations of $12,283,219 for the year ended December 31, 2016, a decrease of $5,411,677, or 44.1%.Other income/expenseOther income/expense mainly include interest income from bank deposits, foreign currency transaction gain, and loss from investment.Net lossAs a result of the factors described above, our net loss was $6,810,454 for the year ended December 31, 2017, compared to net loss of $13,049,031 for theyear ended December 31, 2016, a decrease of $6,238,577 or 47.8%.Foreign currency translation adjustmentOur reporting currency is the U.S. dollar. The functional currency of our parent company and subsidiaries of Merchant Supreme and Prime Cheer is the U.S.dollar and the functional currency of the Company’s subsidiaries incorporated in China is the Chinese Renminbi (“RMB”). The financial statements of oursubsidiaries incorporated in China are translated to U.S. dollars using period end rates of exchange for assets and liabilities, and average rates of exchange (for theperiod) for revenue, costs, and expenses. Net gains and losses resulting from foreign exchange transactions are included in the consolidated statements ofoperations and comprehensive loss. As a result of foreign currency translations, which are a noncash adjustment, we reported a foreign currency translation gain of$90,671 for the year ended December 31, 2017, as compared to a foreign currency translation loss of $387,375 for the year ended December 31, 2016. This noncashgain had the effect of increasing/decreasing our reported comprehensive income/loss.34Comprehensive lossAs a result of our foreign currency translation adjustment, we had comprehensive loss for the year ended December 31, 2017 of $6,719,783, compared tocomprehensive loss of $12,661,656 for the year ended December 31, 2016.B. LIQUIDITY AND CAPITAL RESOURCESThe information contained in “Item 5. Operating and Financial Review and Prospects – A. Operating Results – Liquidity and Capital Resources” isincorporated herein by reference.C. RESEARCH AND DEVELOPMENT, PATENTS AND LICENSES, ETC.The discussions of our research and development activities were contained in “Item 4. Information about our Company – B. Business Overview –Research and Development” and “Item 5. Operating and Financial Review and Prospects – A. Operating Results – Operating Expenses – Research and DevelopmentExpenses” are incorporated herein by reference. In the years ended December 31, 2017 and 2016, we spent $1,046,198 and $2,882,202, respectively, on research anddevelopment activities.D. TREND INFORMATION.Industry and Market OutlookChina has awarded licenses to mobile phone companies to provide the superfast 4G network to customers. The licenses, which are designed to give mobilephone users faster access to services, were granted by the government to China Mobile, China Unicom Hong Kong and China Telecom. Since the grants, ChinaMobile has offered 4G to subscribers from December 18, 2013. China Unicom and China Telecom, the country's other two major carriers, also offer 4G wireless. Thenumber of China Mobile 4G customers has exceeded 900 million by the end of October in 2017. The move greatly bolstered business for telecom equipment makersand a range of other companies.Under China’s 12th FiveYear Plan, a key priority is for China to transition from “Made in China” to “Designed in China.” In order to achieve this goal, thegovernment plans to heavily invest in science and technology education and R&D so as to further develop China’s intellectual property rights system and support“NextGeneration IT” as a Strategic Emerging Industry (SEI). Additionally, China plans to upgrade the technological capabilities of private and public services,including “triple play” services (the convergence of telecom, broadcasting and Internet networks), ecommerce, and egovernment and statistics systems.Furthermore, the government plans to invest in R&D of the "Internet of things" and cloud computing, and develop digital and virtual technologies.E. OFFBALANCE SHEET ARRANGEMENTSWe have not entered into any financial guarantees or other commitments to guarantee the payment obligations of any third parties. We have not enteredinto any derivative contracts that are indexed to our shares and classified as shareholder’s equity, or that are not reflected in our consolidated financial statements.Furthermore, except for the mortgage referenced above, we do not have any retained or contingent interest in assets transferred to an unconsolidated entity thatserves as credit, liquidity or market risk support to such entity. We do not have any variable interest in any unconsolidated entity that provides financing, liquidity,market risk or credit support to us or engages in leasing, hedging or research and development services with us.35F. TABULAR DISCLOSURE OF CONTRACTUAL OBLIGATIONSAs of December 31, 2017, we did not have any contractual obligations required to be disclosed in this Item 5.F. ITEM 6. DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES.A. DIRECTORS AND SENIOR MANAGEMENT.Executive Officers and DirectorsThe following table sets forth the names and ages as of the date of this transition report of each of our executive officers and directors:NameAgePositionXuesong Song50Chief Executive Officer, Chairman and DirectorDongpu Zhang50PresidentJie Yu34Chief Financial OfficerKegang Peng46Vice President and DirectorChuang Tao51DirectorDennis Galgano (1)(2)69Director (Independent)Jin Shi (1)(2)49Director (Independent)Jiming Ha (1)(3)56Director (Independent)Zhihao Xu (3)42Director (Independent)(1)Member of the Audit Committee.(2)Member of the Compensation Committee.(3)Member of the Nominating and Corporate Governance Committee.Set forth below is biographical information concerning our executive officers and directors.Xuesong Song is a cofounder of C Media Limited and served as its chairman of the board of directors and chief executive officer from 2012 until theconsummation of the AEA. From February 2014 through April 2017, Mr. Song served as a director of Seven Stars Cloud Group, Inc. (NASDAQ: SSC) and fromJanuary 2013 through February 2015, Mr. Song served as a director of Pingtan Marine Enterprise Ltd. (NASDAQ: PME). From May 2006 through January 2009, Mr.Song served as the Chairman of the Board of ChinaGrowth North Acquisition Corporation, a special purpose acquisition company, which acquired UIB GroupLimited in January 2009, in which he remains a director. Mr. Song has been a principal of Chum Capital Group Limited since August 2001, a merchant banking firmthat invests in growth Chinese companies and advises them in financings, mergers & acquisitions and restructurings, and chief executive officer of Beijing ChumInvestment Co., Ltd. since December 2001. Mr. Song has been a director of Mobile Vision Communication Ltd. since July 2004. Mr. Song received a Master’s ofBusiness Administration degree from Oklahoma City/Tianjin Program.Dongpu Zhang was appointed as the President of the Company effective on August 25, 2018. Mr. Dongpu Zhang has served as the General Manager ofSuperEngine Graphics Software Technology Development (Suzhou) Co., Ltd. (“SuperEngine Suzou”) and the Chief Executive Officer of SuperEngine HoldingLimited since September 2016. From February, 2014 to August, 2016, Mr. Zhang served as vice president of Industrial Development Group under China Fortune LandDevelopment Co., Ltd. From March, 2009 to February, 2014, Mr. Zhang served as the vice president of Aerospace Science and Technology Holding Group Co., Ltd.Mr. Zhang receive his Master Degree of Computer Science from Harbin Institute of Technology in 1994 and his Bachelor Degree of information system fromChangsha Institute of technology in 1991.Jie Yu served as the chief financial officer of C Media Limited from January 2018 until the consummation of the asset exchange transactions. From June 2016to January 2018, Mr. Yu served as chief financial officer and secretary of the board of directors of MTI Environment Group Limited. Prior to joining MTI, Mr. Yuserved as the senior manager at DA HUA CPA from November 2012 to May 2016. Previously, Mr. Yu served as the manager at Crowe Horwath (Hong Kong) CPA.Mr. Yu holds a bachelor degree in accounting and finance from University of Auckland and postgraduate diploma in accounting from University of Auckland.36Kegang Peng served as the Vice Chairman of the board of directors C Media Limited from October 2014 to the consummation of the asset exchangetransactions, and is now a member of the Company’s board of directors. Previously, from 2012 to 2014, Mr. Peng was chairman of the board and founder of JiangsuSuqian Jinghaiboyuan Information and Technology Co., Ltd. Mr. Peng studied at Beijing University of Aeronautics and Astronautics majoring computer andapplication.20F 1 f20f2017_luokungtech.htm AMENDMENT NO. 1 TO FORM 20FUNITED STATESSECURITIES AND EXCHANGE COMMISSIONWASHINGTON, D.C. 20549FORM 20F☐ REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934OR☐ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934For the Fiscal year ended _____________OR☒ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934For the transition period from October 1, 2017 to December 31, 2017☐ SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934Date of event requiring this shell company report Commission file number: 00134738Luokung Technology Corp.(Exact name of Registrant as specified in its charter)Not applicable(Translation of Registrant’s name into English)British Virgin IslandsLAB 32, SOHO 3Q, No 9, Guanghua Road, Chaoyang District, BeijingPeople’s Republic of China, 100020(Jurisdiction of incorporation or organization)(Address of principal executive offices)Mr. Muqiao GengLAB32, SOHO 3Q, No 9, Guanghua Road, Chaoyang District, BeijingPeople’s Republic of China 100020Tel: (86) 1085866721(Name, telephone, Email and/or facsimile number and address of company contact person)Securities registered or to be registered pursuant to Section 12(b) of the Act:Title of each className of each exchange on which registeredOrdinary shares, par value $0.01 per shareNonePreferred shares, par value $0.01 per shareNoneSecurities registered or to be registered pursuant to Section 12(g) of the Act:none(Title of Class)Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act:none(Title of Class)Indicate the number of outstanding shares of each of the issuer’s classes of capital or common stock as of the close of the period covered by the transitionreport. 187,097,599 Ordinary Shares, including 186,383,224 Ordinary Shares represented by 714,375 American Depositary Shares, and 1,000,000 Preferred Sharesoutstanding as of September 20, 2018.Indicate by check mark if the registrant is a wellknown seasoned issuer, as defined in Rule 405 of the Securities Act. ☐ Yes ☒ NoIf this report is an annual or transition report, indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of theSecurities Exchange Act of 1934. ☐ Yes ☒ NoIndicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirementsfor the past 90 days. ☒ Yes ☐ NoIndicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File requiredto be submitted and posted pursuant to Rule 405 of Regulation ST (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that theregistrant was required to submit and post such files). ☒ Yes ☐ NoIndicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a nonaccelerated filer. See definition of “accelerated filer andlarge accelerated filer” in Rule 12b2 of the Exchange Act. (Check one):Large accelerated filer ☐ Accelerated filer ☐ Nonaccelerated filer ☒Indicate by check mark which basis of accounting the registrant has used to prepare the financial statements included in this filing.U.S. GAAP ☒International Financial Reporting Standards as issuedby the International Accounting Standards Board ☐Other ☐If “Other” has been checked in response to the previous question, indicate by check mark which financial statement item the registrant has elected tofollow. Item 17 ☐ Item 18 ☐If this is an transition report, indicate by check mark whether the registrant is a shell company (as defined in Rule 12b2 of the ExchangeAct). ☐ Yes ☒ NoExplanatory NoteLuokung Technology Corp. (the “Company”) is filing this transition report on Form 20F (“Transition Report”) in connection with the completion of theexchange of certain of its assets for substantially all of the assets of C Media Limited (“C Media”) pursuant to that Asset Exchange Agreement, dated January 25,2018 (the “Original AEA”), as supplemented by the Addendum to Asset Exchange Agreement, dated October 3, 2018 (the “Addendum” and together with theOriginal AEA, the “AEA”). Following the consummation of the AEA, on October 4, 2018, the Company changed its fiscal year end from September 30 to the fiscalyear end used by C Media, December 31. This Transition Report covers the threemonth period from Octorber 1, 2017 to December 31, 2017, and the fiscal yearsdescribed herein.In this transition report:●References to the “Company”, “we”, “our” and “us” are to Luokung Technology Corp. and its consolidated subsidiaries and variable interestentity, except as the context otherwise requires;●This transition report on Form 20F covers the threemonth period from October 1, 2017 through December 31, 2017 (the “Transition Period”) andreflects our financial results thereof. Prior to this transition report on Form 20F, our two most recent annual reports on Form 20F cover the fiscalyears ended September 30, 2017 and September 30, 2016, respectively, and reflect financial results for the respective twelvemonth periods fromOctober 1 to September 30. Unless otherwise noted, all references to years are to the calendar year from January 1 to December 31 and referencesto our fiscal year or years are to the fiscal year or years which, prior to the Transition Period, ended September 30, while from and after theTransition Period, ended December 31;●References to an “ADS” are to an American Depositary Share, each of which represents one of our Ordinary Shares with a par value of $.01 pershare.Special Note Regarding Forwardlooking StatementsThis transition report contains forwardlooking statements that involve risks and uncertainties. These statements involve known and unknown risks,uncertainties and other factors that may cause our actual results, performance or achievements to be materially different from those expressed or implied by theforwardlooking statements.You can identify these forwardlooking statements by words or phrases such as “may,” “will,” “expect,” “anticipate,” “aim,” “estimate,” “intend,” “plan,”“believe,” “likely to” or other similar expressions. We have based these forwardlooking statements largely on our current expectations and projections about futureevents and financial trends that we believe may affect our financial condition, results of operations, business strategy and financial needs. You should not placeundue reliance on these forwardlooking statements, which apply only as of the date of this transition report. These forwardlooking statements include:●our future business development, results of operations and financial condition;●expected changes in our net revenues and certain cost or expense items;●our ability to attract and retain customers; and●trends and competition in the enterprise mobile software application market.You should read this transition report thoroughly with the understanding that our actual future results may be materially different from, and/or worse, thanwhat we expect. We qualify all of our forwardlooking statements by these cautionary statements. Other sections of this transition report include additional factorswhich could adversely impact our business and financial performance. Moreover, we operate in an evolving environment. New risk factors and uncertainties emergefrom time to time and it is not possible for our management to predict all risk factors and uncertainties, nor can we assess the impact of all factors on our business orthe extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forwardlooking statements.This transition report also contains estimates, projections and statistical data related to the market for the provision of WiFi and mobile applications inChina. This market data, including data from IDC, a leading provider of market data and intelligence, speaks as of the date it was published and includes projectionsthat are based on a number of assumptions and are not representations of fact. The market for the provision of WiFi and mobile applications in China may not growat the rates projected by the market data, or at all. The failure of the market to grow at the projected rates may materially and adversely affect our business and themarket price of our ADSs. In addition, the rapidly changing nature of the market for the provision of WiFi and mobile applications subjects any projections orestimates relating to the growth prospects or future condition of our market to significant uncertainties. If any one or more of the assumptions underlying the marketdata proves to be incorrect, actual results may differ from the projections based on these assumptions.You should not rely upon forwardlooking statements as predictions of future events. We undertake no obligation to update or revise any forwardlookingstatements, whether as a result of new information, future events or otherwise.TABLE OF CONTENTSPart IItem 1.Identity of Directors, Senior Management and Advisers.1Item 2.Offer Statistics and Expected Timetable.1Item 3.Key Information.1A.Selected Financial Data.1B.Capitalization and Indebtedness.3C.Reasons for the Offer and Use of Proceeds.3D.Risk Factors.3Item 4.Information on the Company.19A.History and Development of the Company.19B.Business Overview.20C.Organizational Structure.30D.Property, Plants and Equipment.32Item 4A.Unresolved Staff Comments.32Item 5.Operating and Financial Review and Prospects.32A.Operating Results.32B.Liquidity and Capital Resources.35C.Research and Development, Patents and Licenses, etc.35D.Trend Information.35E.Offbalance Sheet Arrangements.35F.Tabular Disclosure of Contractual Obligations.36Item 6.Directors, Senior Management and Employees.36A.Directors and Senior Management.36B.Compensation.37C.Board Practices.40D.Employees.43E.Share Ownership.43Item 7.Major Shareholders and Related Party Transactions.44A.Major Shareholders.44B.Related Party Transactions.45C.Interests of Experts and Counsel.45Item 8.Financial Information.45A.Consolidated Statements and Other Financial Information.45B.Significant Changes.46Item 9.The Offer and Listing.46A.Offer and Listing Details.46B.Plan of Distribution.47C.Markets.47D.Selling shareholders.48E.Dilution.48F.Expenses of the issue.48Item 10.Additional Information.48A.Share Capital.48B.Memorandum and Articles of Association.48C.Material Contracts.53D.Exchange Controls.54E.Taxation.61F.Dividends and Paying Agents.67G.Statement by Experts.67H.Documents on Display.67I.Subsidiary Information.68Item 11.Quantitative and Qualitative Disclosures about Market Risk.68Item 12.Description of Securities Other than Equity Securities.69A.Debt Securities.69B.Warrants and Rights.69C.Other Securities.69D.American Depositary Shares.69iPart IIItem 13.Defaults, Dividend Arrearages and Delinquencies.71Item 14.Material Modifications to the Rights of Security Holders and Use of Proceeds.71Item 15.Controls and Procedures.71Item 16.[Reserved.]72Item 16A.Audit Committee Financial Expert.72Item 16B.Code of Ethics.73Item 16C.Principal Accountant Fees and Services.73Item 16D.Exemptions from the Listing Standards for Audit Committees.73Item 16E.Purchases of Equity Securities by the Issuer and Affiliated Purchasers.73Item 16F.Change in Registrant’s Certifying Accountant.73Item 16G.Corporate Governance.73Item 16H.Mine Safety Disclosure.73Part IIIItem 17.Financial Statements.74Item 18.Financial Statements.74Item 19.Exhibits.74Index to Consolidated Financial StatementsF1iiPART IITEM 1. IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS.The directors of Luokung Technology Corp. are Xuesong Song, Kegang Peng, Dennis Galgano, Jin Shi, Jiming Ha, Zhihao Xu and Chuang Tao. Thebusiness address for our directors is LAB 32, SOHO 3Q, No 9, Guanghua Road, Chaoyang District, Beijing, People’s Republic of China.Moore Stephens CPA Limited has served as our auditor since October 5, 2018, and is located at 801806 Silvercord Tower 1, 30 Canton road, Tsimshatsui,Kowloon, Hong Kong. BDO China Shun Lun Pan Certified Public Accountants LLP served as our auditors for the last three years, and are located at 4F, No. 61Nanjing Road, Shanghai, People’s Republic of China.Garvey Schubert Barer, P.C., serves as our legal counsel in the United States, and is located at Flour Mill Building, 1000 Potomac Street NW, Suite 200,Washington, D.C., 200073501.Conyers Dill & Pearlman serves as our legal counsel with regard to the laws of the British Virgin Islands, and is located at 29th Floor, One Exchange Square,8 Connaught Place, Central, Hong Kong.ITEM 2. OFFER STATISTICS AND EXPECTED TIMETABLE.Not applicable.ITEM 3. KEY INFORMATION.A. SELECTED FINANCIAL DATA.Luokung Technology Corp. and its consolidated subsidiaries (“Luokung Technology”, “we”, “us”, or “the Company”) consummated an asset exchangeagreement pursuant to which we exchanged our existing assets with those of C Media Limited (the “Asset Exchange”) on August 17, 2018, and we changed ourname from Kingtone Wirelessinfo Solution Holding Ltd. to our current name on August 20, 2018. On October 4, 2018, in connection with the consummation of the Asset Exchange, we changed our fiscal year end from September 30 to December 31.1The selected financial data for the fiscal years ended December 31 2017 and 2016 have been derived from our audited consolidated and combined financialstatements. The selected consolidated and combined financial data should be read in conjunction with our audited financial statements and the accompanying notesand “Item 5 – Operating and Financial Review and Prospects.” Our consolidated and combined financial statements are prepared and presented in accordance withUnited States generally accepted accounting principles, or U.S. GAAP. Our historical results do not necessarily indicate our results expected for any future periods.You should not view our historical results as an indicator of our future performance.LK TECHNOLOGY LTD. AND SUBSIDIARIESSELECTED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS(IN U.S. DOLLARS)For the years ended December 31,20172016Revenues$26,082,417$5,233,145Less: Cost of revenues5,547,7796,315,504Less: Operating expenses:Selling and marketing23,908,7336,209,804General and administrative2,451,2492,108,854Research and development1,046,1982,882,202Total operating expenses27,406,18011,200,860Loss from operations(6,871,542)(12,283,219)Other income (expense):Interest expense(26,611)(4,412)Foreign exchange gains(losses)350,679(298,257)Loss from investment(428,571)Other income (expense), net(262,980)(34,572)Total other income (expense), net61,088(765,812)Loss before income taxes(6,810,454)(13,049,031)Income taxesNet loss$(6,810,454)$(13,049,031)Other comprehensive income:Foreign currency translation adjustment90,671387,375Total comprehensive loss$(6,719,783)$(12,661,656)2LK TECHNOLOGY LTD. AND SUBSIDIARIESSELECTED CONSOLIDATED BALANCE SHEETS(IN U.S. DOLLARS)As of December 31,20172016Accounts receivable, net of allowance for doubtful accounts9,729,6251,865,836Amounts due from related parties11,760,692Property and equipment, net5,044,8727,771,027Goodwill7,239,9367,239,936TOTAL ASSETS37,582,85821,114,832Accounts payable8,784,5186,446,584Accrued liabilities and other payables12,962,91211,329,613Total liabilities25,311,11333,905,520Total Shareholder’s Equity (Deficit)12,271,745(12,790,688)TOTAL LIABILITIES AND SHAREHOLDER’S EQUITY (DEFICIT)37,582,85821,114,832B. CAPITALIZATION AND INDEBTEDNESS.Not applicable.C. REASONS FOR THE OFFER AND USE OF PROCEEDS.Not applicable.D. RISK FACTORS.An investment in our ADSs and ordinary shares involves a high degree of risk. You should carefully consider the risks and uncertainties described belowtogether with all other information contained in this transition report, including the matters discussed under “Special Note Regarding ForwardLooking Statements,”before you decide to invest in our ADSs or ordinary shares. You should pay particular attention to the fact that we are a holding company with substantialoperations in China and are subject to legal and regulatory environments that in many respects differ from those of the United States. If any of the following risks, orany other risks and uncertainties that are not presently foreseeable to us, actually occur, our business, financial condition, results of operations, liquidity and ourfuture growth prospects would be materially and adversely affected. You should also consider all other information contained in this transition report beforedeciding to invest in our ADSs or ordinary shares.Risks Related to Our Company and Our IndustryThe Company had incurred negative cash flows from operating activities and net losses as of December 31, 2017. These matters raise substantial doubt aboutthe Company’s ability to continue as a going concern.The Company’s consolidated financial statements are prepared using generally accepted accounting principles in the United States of America applicableto a going concern, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. As of and for the year endedDecember 31, 2017, the Company had incurred significant operating losses and working capital deficit. The ability of the Company to continue as a going concern isdependent on the Company obtaining adequate capital to fund operating losses until it becomes profitable. If the Company is unable to obtain adequate capital, itcould be forced to cease operations. The accompanying consolidated financial statements do not include any adjustments that might be necessary if the Companyis unable to continue as a going concern.3We may undertake acquisitions, investments, joint ventures or other strategic alliances, which could have a material adverse effect on our ability to manageour business. In addition, such undertakings may not be successful.Our strategy includes plans to grow both organically and through acquisitions, participation in joint ventures or other strategic alliances. Joint venturesand strategic alliances may expose us to new operational, regulatory and market risks, as well as risks associated with additional capital requirements. We may not beable, however, to identify suitable future acquisition candidates or alliance partners. Even if we identify suitable candidates or partners, we may be unable tocomplete an acquisition or alliance on terms commercially acceptable to us. If we fail to identify appropriate candidates or partners, or complete desired acquisitions,we may not be able to implement our strategies effectively or efficiently. In addition, our ability to successfully integrate acquired companies and their operations may be adversely affected by several factors. These factorsinclude:1.diversion of management’s attention;2.difficulties in retaining customers of the acquired companies;3.difficulties in retaining personnel of the acquired companies;4.entry into unfamiliar markets;5.unanticipated problems or legal liabilities; and6.tax and accounting issues.If we fail to integrate acquired companies efficiently, our earnings, revenue growth and business could be negatively affected.Due to intense competition for highlyskilled personnel, we may fail to attract and retain enough sufficiently trained employees to support our operations; ourability to bid for and obtain new projects may be negatively affected and our revenues could decline as a result.The IT industry relies on skilled employees, and our success depends to a significant extent on our ability to attract, hire, train and retain qualifiedemployees. There is significant competition in China for professionals with the skills necessary to develop the products and perform the services we offer to ourcustomers. Increased competition for these professionals, in the mobile application design area or otherwise, could have an adverse effect on us if we experiencesignificant increase in the attrition rate among employees with specialized skills, which could decrease our operating efficiency and productivity and could lead to adecline in demand for our services.In addition, our ability to serve existing customers and business partners and obtain new business will depend, in large part, on our ability to attract, trainand retain skilled personnel that enable us to keep pace with growing demands for wifi connectivity and mobile applications, evolving industry standards andchanging customer preferences. Our failure to attract, train and retain personnel with the qualifications necessary to fulfill the needs of our existing and futurecustomers or to assimilate new employees successfully could have a material adverse effect on our business, financial condition and results of operations. Ourfailure to retain our key personnel on business development or find suitable replacements of the key personnel upon their departure may lead to shrinking newimplementation projects, which could materially adversely affect our business.4Our business depends substantially on the continuing efforts of our senior executives and other key personnel, and our business may be severely disrupted if welose their services.Our future success heavily depends upon the continued services of our senior executives and other key employees, particularly since we recentlyappointed a new chairman. We are reliant on the services of Mr. Xuesong Song, our chairman, chief executive officer and member of our board of directors. If one ormore of our senior executives or key employees is unable or unwilling to continue in his or her present position, we may not be able to replace such employee easily,or at all, we may incur additional expenses to recruit, train and retain replacement personnel, our business may be severely disrupted, and our financial condition andresults of operations may be materially adversely affected.Our business could suffer if our executives and directors compete against us and our noncompetition agreements with them cannot be enforced.If any of our senior executives or key employees joins a competitor or forms a competing company, we may lose customers, knowhow and keyprofessionals and staff members to them. Also, if any of our business development managers who keep a close relationship with our customers and businesspartners joins a competitor or forms a competing company, we may lose customers, and our revenues may be materially adversely affected. Most of our executiveshave entered, or will soon enter, into employment agreements with us that contain or will contain noncompetition provisions. However, if any dispute arisesbetween our executive officers and us, such noncompetition provisions may not be enforceable, especially in China, where all of these executive officers and keyemployees reside, in light of the uncertainties with China’s legal system. See “Risk Factors — Risks Related to Doing Business in China — Uncertainties withrespect to the PRC legal system could adversely affect us.”Our computer networks may be vulnerable to security risks that could disrupt our services and adversely affect our results of operations.Our computer networks may be vulnerable to unauthorized access, computer hackers, computer viruses and other security problems caused byunauthorized access to, or improper use of, systems by third parties or employees. A hacker who circumvents security measures could misappropriate proprietaryinformation or cause interruptions or malfunctions in operations. Computer attacks or disruptions may jeopardize the security of information stored in andtransmitted through computer systems and mobile devices of our customers. Actual or perceived concerns that our systems may be vulnerable to such attacks ordisruptions may deter customers from using our services. As a result, we may be required to expend significant resources to protect against the threat of thesesecurity breaches or to alleviate problems caused by these breaches, which could adversely affect our results of operations.If we do not continually enhance our solutions and service offerings, we may have difficulty in retaining existing customers and attracting new customers.We believe that our future success will depend, to a significant extent, upon our ability to enhance our existing applications and platform, and to introducenew features to meet the preferences and requirements of our customers in a rapidly developing and evolving market. Unexpected technical, operational, distributionor other problems could delay or prevent the introduction of one or more of these products or services, or any products or services that we may plan to introduce inthe future. Our present or future products may not satisfy the evolving preferences and tastes of our customers, and these solutions and services may not achieveanticipated market acceptance or generate incremental revenue. If we are unable to anticipate or respond adequately to the need for service or productenhancements due to resource, technological or other constraints, our business, financial condition and results of operations could be materially and adverselyaffected.5If we are unable to develop competitive new products and service offerings our future results of operations could be adversely affected.Our future revenue stream depends to a large degree on our ability to utilize our technology in a way that will allow us to offer new types of mobileapplications and services to a broader customer base. We will be required to make investments in research and development in order to continually develop newsoftware applications and related service offerings, enhance our existing platform, mobile applications and related service offerings and achieve market acceptanceof our mobile applications and service offerings. We may incur problems in the future in innovating and introducing new mobile applications and service offerings.Our developmentstage mobile applications may not be successfully completed or, if developed, may not achieve significant customer acceptance. If we are unableto successfully define, develop and introduce competitive new mobile applications, and enhance existing mobile applications, our future results of operations wouldbe adversely affected. The timely availability of new applications and their acceptance by customers are important to our future success. A delay in the developmentof new applications could have a significant impact on its results of operations.Changes in technology could adversely affect our business by increasing our costs, reducing our profit margins and causing a decline in our competitiveness.China’s wireless telecom industry, in which we operate, is characterized by rapidly changing technology, evolving industry standards, frequentintroductions of new services and solutions and enhancements as well as changing customer demands. New solutions and new technologies often render existingsolutions and services obsolete, excessively costly or otherwise unmarketable. As a result, our success depends on our ability to adapt to the latest technologicalprogress, such as the 5G standard and technologies, and to develop or acquire and integrate new technologies into our platform, mobile applications and relatedservices. Advances in technology also require us to commit substantial resources to developing or acquiring and then deploying new technologies for use in ouroperations. We must continuously train personnel in new technologies and in how to integrate existing hardware and software systems with these newtechnologies. We may not be able to adapt quickly to new technologies or commit sufficient resources to compete successfully against existing or new competitorsin bringing to market solutions and services that incorporate these new technologies. We may incur problems in the future in innovating and introducing new mobileapplications and service offerings. Our development of new mobile applications and platform enhancements may not be successfully completed or, if developed,may not achieve significant customer acceptance. If we fail to adapt to changes in technologies and compete successfully against established or new competitors,our business, financial condition and results of operations could be adversely affected.Problems with the quality or performance of our hardware, software or other systems may cause delays in the introduction of new solutions or result in the lossof customers and revenues, which could have a material and adverse effect on our business, financial condition and results of operations.Our hardware and software systems are complex and may contain defects, errors or bugs when first introduced to the market or to a particular customer, oras new versions are released. Because we cannot test for all possible scenarios, our systems may contain errors that are not discovered until after they have beeninstalled or implemented, and we may not be able to timely correct these problems. These defects, errors or bugs could interrupt or delay the completion of projectsor sales to our customers. In addition, our reputation may be damaged and we may fail to acquire new projects from existing customers or new customers. Errors mayoccur when we provide systems integration and maintenance services. Even in cases where we have agreements with our customers that contain provisionsdesigned to limit our exposure to potential claims and liabilities arising from customer problems, these provisions may not effectively protect us against such claimsin all cases and in all jurisdictions. In addition, as a result of business and other considerations, we may undertake to compensate our customers for damages arisingfrom the use of our solutions, even if our liability is limited by these provisions. Moreover, claims and liabilities arising from customer problems could also result inadverse publicity and materially and adversely affect our business, results of operations and financial condition. We currently do not carry any product or serviceliability insurance and any imposition of liability on us may materially and adversely affect our business and increase our costs, resulting in reduced revenues andprofitability.Our products may contain undetected software defects, which could negatively affect our revenues.Our software products are complex and may contain undetected defects. Although we test our products, it is possible that errors may be found or occur inour new or existing products after we have commenced commercial shipment of those products. Defects, whether actual or perceived, could result in adversepublicity, loss of revenues, product returns, a delay in market acceptance of our products, loss of competitive position or claims against us by customers. Any suchproblems could be costly to remedy and could cause interruptions, delays, or cessation of our product sales, which could cause us to lose existing or prospectivecustomers and could negatively affect our results of operations.6We may be subject to infringement, misappropriation and indemnity claims in the future, which may cause us to incur significant expenses, pay substantialdamages and be prevented from providing our services or technologies.Our success depends, in part, on our ability to carry out our business without infringing the intellectual property rights of third parties. Patent andcopyright law covering softwarerelated technologies is evolving rapidly and is subject to a great deal of uncertainty. Our selfdeveloped or licensed technologies,processes or methods may be covered by thirdparty patents or copyrights, either now existing or to be issued in the future. Any potential litigation may cause us toincur significant expenses. Thirdparty claims, if successfully asserted against us may cause us to pay substantial damages, seek licenses from third parties, payongoing royalties, redesign our services or technologies, or prevent us from providing services or technologies subject to these claims. Even if we were to prevail,any litigation would likely be costly and timeconsuming and divert the attention of our management and key personnel from our business operations.Our failure to protect our intellectual property rights may undermine our competitive position, and subject us to costly litigation to protect our intellectualproperty rights.Any misappropriation of our technology or the development of competitive technology could seriously harm our business. We regard a substantial portionof our hardware and software systems as proprietary and rely on statutory copyright, trademark, patent, trade secret laws, customer license agreements, employeeand thirdparty nondisclosure agreements and other methods to protect our proprietary rights. Nevertheless, these resources afford only limited protection and theactions we take to protect our intellectual property rights may not be adequate. In particular, third parties may infringe or misappropriate our proprietarytechnologies or other intellectual property rights, which could have a material adverse effect on our business, financial condition and results of operations. Inaddition, intellectual property rights and confidentiality protection in China may not be as effective as in the United States, and policing unauthorized use ofproprietary technology can be difficult and expensive. Further, litigation may be necessary to enforce our intellectual property rights, protect our trade secrets ordetermine the validity and scope of the proprietary rights of others. The outcome of any such litigation may not be in our favor. Any such litigation may be costlyand may divert management attention, as well as our other resources, away from our business. An adverse determination in any such litigation will impair ourintellectual property rights and may harm our business, prospects and reputation. In addition, we have no insurance coverage against litigation costs and wouldhave to bear all litigation costs in excess of the amount recoverable from other parties. The occurrence of any of the foregoing could have a material adverse effecton our business, financial condition and results of operations. Our solutions incorporate a portion of, and work in conjunction with, thirdparty hardware and software solutions. If these thirdparty hardware or softwaresolutions are not available to us at reasonable costs, or at all, our results of operations could be adversely impacted.Although our hardware and software systems and mobile applications primarily rely on our own core technologies, some elements of our systemsincorporate a small portion of thirdparty hardware and software solutions. If any third party were to discontinue making their intellectual property available to us orour customers on a timely basis, or increase materially the cost of their licensing such intellectual property, or if our systems or applications failed to properlyfunction or interoperate with replacement intellectual property, we may need to incur costs in finding replacement thirdparty solutions and/or redesigning oursystems or applications to replace or function with or on replacement thirdparty proprietary technology. Replacement technology may not be available on termsacceptable to us or at all, and we may be unable to develop alternative solutions or redesign our systems or applications on a timely basis or at a reasonable cost. Ifany of these were to occur, our results of operations could be adversely impacted.7Our ability to sell our products is highly dependent on the quality of our service and support offerings, and our failure to offer high quality service could have amaterial adverse effect on our ability to market and sell our products.Our customers depend upon our customer service and support staff to resolve issues relating to our products. Highquality support services are critical forthe successful marketing and sale of our products. If we fail to provide highquality support on an ongoing basis, our customers may react negatively and we maybe materially and adversely affected in our ability to sell additional products to these customers. This could also damage our reputation and prospects with potentialcustomers. Our failure to maintain highquality support services could have a material and adverse effect on our business, results of operations and financialcondition.Weaknesses in our internal controls over financial reporting or disclosure controls and procedures may have a material adverse effect on our business, theprice of our ordinary shares, operating results and financial condition.We are required to establish and maintain appropriate internal controls over financial reporting and disclosure controls and procedures. Pursuant to Section404 of the SarbanesOxley Act of 2002 and the related rules adopted by the Securities and Exchange Commission, every public company is required to include amanagement report on its internal controls over financial reporting in its transition report, which contains management’s assessment of the effectiveness of thecompany’s internal controls over financial reporting. This requirement first applied to our annual report on Form 20F for the fiscal year ended on September 30,2011. In connection with our assessments of our disclosure controls and procedures and internal controls over financial reporting, management concluded that as ofSeptember 30, 2018, our disclosure controls and procedures and our internal controls over financial reporting were not effective due to lack of U.S. generallyaccepted accounting principles (“U.S. GAAP”) expertise in our current accounting team. Please refer to the discussion under Item 15, “Controls and Procedures” forfurther discussion of our material weakness as of December 31, 2017. Should we be unable to remediate the material weakness promptly and effectively, suchweakness could harm our operating results, result in a material misstatement of our financial statements, cause us to fail to meet our financial reporting obligations orprevent us from providing reliable and accurate financial reports or avoiding or detecting fraud. This, in turn, could result in a loss of investor confidence in theaccuracy and completeness of our financial reports, which could have an adverse effect on the trading price of our ordinary shares. Any litigation or otherproceeding or adverse publicity relating to the material weaknesses could have a material adverse effect on our business and operating results. We have very limited insurance coverage which could expose us to significant costs and business disruption.We do not maintain any insurance coverage for our leased properties. Should any natural catastrophes such as earthquakes, floods, typhoons or any actsof terrorism occur in Beijing, China, where our head office is located and most of our employees are based, or elsewhere in China, we might suffer not onlysignificant property damages, but also loss of revenues due to interruptions in our business operations, which could have a material adverse effect on our business,operating results or financial condition.The insurance industry in China is still at an early stage of development. Insurance companies in China offer limited business insurance products, and donot, to our knowledge, offer business liability insurance. As a result, we do not have any business liability insurance coverage for our operations. Moreover, whilebusiness disruption insurance is available, we have determined that the risks of disruption and cost of the insurance are such that we do not require it at this time.Any business disruption, litigation or natural disaster might result in substantial costs and diversion of resources, particularly if it affects our technology platformswhich we depend on for delivery of our software and services, and could have a material adverse effect on our financial condition and results of operations.We may be liable to our customers for damages caused by unauthorized disclosure of sensitive and confidential information, whether through our employees orotherwise.We are typically required to manage, utilize and store sensitive or confidential customer data in connection with the products and services we provide.Under the terms of our customer contracts, we are required to keep such information strictly confidential. We seek to implement specific measures to protectsensitive and confidential customer data. We require our employees to enter into nondisclosure agreements to limit such employees’ access to, and distribution of,our customers’ sensitive and confidential information and our own trade secrets. We can give no assurance that the steps taken by us in this regard will be adequateto protect our customers’ confidential information. If our customers’ proprietary rights are misappropriated by our employees, in violation of any applicableconfidentiality agreements or otherwise, our customers may consider us liable for that act and seek damages and compensation from us. However, we currently donot have any insurance coverage for mismanagement or misappropriation of such information by our employees. Any litigation with respect to unauthorizeddisclosure of sensitive and confidential information might result in substantial costs and diversion of resources and management attention.8We may face intellectual property infringement claims that could be timeconsuming and costly to defend. If we fail to defend ourselves against such claims, wemay lose significant intellectual property rights and may be unable to continue providing our existing products and services.It is critical that we use and develop our technology and products without infringing upon the intellectual property rights of third parties, includingpatents, copyrights, trade secrets and trademarks. Intellectual property litigation is expensive and timeconsuming and could divert management’s attention from ourbusiness. A successful infringement claim against us, whether with or without merit, could, among others things, require us to pay substantial damages, developnoninfringing technology, or rebrand our name or enter into royalty or license agreements that may not be available on acceptable terms, if at all, and cease making,licensing or using products that have infringed a third party’s intellectual property rights. Protracted litigation could also result in existing or potential customersdeferring or limiting their purchase or use of our products until resolution of such litigation, or could require us to indemnify our customers against infringementclaims in certain instances. Also, we may be unaware of intellectual property registrations or applications relating to our services that may give rise to potentialinfringement claims against us. Parties making infringement claims may be able to obtain an injunction to prevent us from delivering our services or usingtechnology containing the allegedly infringing intellectual property. Any intellectual property litigation could have a material adverse effect on our business, resultsof operations or financial condition. Seasonality and fluctuations in our customers’ spending cycle and other factors can cause our revenues and operating results to vary significantly from quarterto quarter and from year to year.Our revenues and operating results will vary significantly from quarter to quarter and from year to year due to a number of factors, many of which areoutside of our control. Our new lines of business acquired upon the consummation of the asset exchange transaction discussed below see higher customer use andactivity during the Chinese New Year holiday than other times during the year when rail travel is high, which lead to higher revenue during this period as morecustomers would like to place more advertising. Due to these and other factors, our operating results may fluctuate significantly from quarter to quarter and fromyear to year. These fluctuations are likely to continue in the future, and operating results for any period may not be indicative of our future performance in any futureperiod.Our corporate actions are substantially controlled by our principal shareholders, who can cause us to take actions in ways you may not agree with.Mr. Xuesong Song, our chairman, chief executive officer and a member of our board of directors, beneficially owns 19.31% of our outstanding ordinaryshares and 1,000,000 preferred shares, and each preferred share has the right to 399 votes at a meeting of the members of the Company. Our officers and directors asa group beneficially own an aggregate of approximately 33.69% of our outstanding ordinary shares. These shareholders, acting individually or as a group, couldexert control and substantial influence over matters such as electing directors, amending our constitutional documents, and approving acquisitions, mergers or otherbusiness combination transactions. This concentration of ownership and voting power may also discourage, delay or prevent a change in control of our company,which could deprive our shareholders of an opportunity to receive a premium for their shares as part of a sale of our company and might reduce the price of ourshares. Alternatively, our controlling shareholders may cause a merger, consolidation or change of control transaction even if it is opposed by our othershareholders, including those who purchase shares in this offering.9We depend on a small number of customers to derive a significant portion of our revenues. If we were to become dependent again upon a few customers, suchdependency could negatively impact our business, operating results and financial condition.We derived a material portion of our revenues from a small number of customers. In the years ended December 31, 2017 and 2016, our five largestcustomers accounted for 99.8% and 78.5% of our total sales, respectively, and our largest customer Guangdong Zhanshi Media Advertising Co., Ltd. accounted forapproximately 80.8% of our total sales during for the fiscal year ended December 31, 2017. As our customer base may change from yeartoyear, during such yearsthat the customer base is highly concentrated, the fluctuation of our sales to any of such major customers could have a material adverse effect on our business,operating results and financial condition. Moreover, our high customer base concentration may also adversely affect our ability to negotiate contract prices withthese customers, which may in turn materially and adversely affect our results of operations.Our historical outstanding accounts receivable have been relatively high. Inability to collect our accounts receivable on a timely basis, if at all, couldmaterially and adversely affect our financial condition, liquidity and results of operations.Historically, our outstanding accounts receivable have been relatively high. As of December 31, 2017 and 2016, our outstanding accounts receivable beforeimpairment were $10.4 million and $2.10 million, respectively. Although we conduct credit evaluations of our customers, we generally do not require collateral orother security from our customers. In addition, we have had a relatively high customer concentration. The outstanding accounts receivable balance for our largestcustomer was 45.3% and 38.5% of our total accounts receivable balance as of December 31, 2017 and 2016, respectively. As a result, an extended delay or default inpayment relating to a significant account would likely have a material and adverse effect on the aging schedule and turnover days of our accounts receivable. Ourinability to collect our accounts receivable on a timely basis, if at all, could materially and adversely affect our financial condition, liquidity and results of operations.Risks Related to Doing Business in ChinaAdverse changes in political and economic policies of the PRC government could have a material adverse effect on the overall economic growth of China,which could reduce the demand for our services and materially and adversely affect our competitive position.Substantially all of our business operations are conducted in China. Accordingly, our business, results of operations, financial condition and prospects aresubject to a significant degree to economic, political and legal developments in China. Although the Chinese economy is no longer a planned economy, the PRCgovernment continues to exercise significant control over China’s economic growth through direct allocation of resources, monetary and tax policies, and a host ofother government policies such as those that encourage or restrict investment in certain industries by foreign investors, control the exchange between RMB andforeign currencies, and regulate the growth of the general or specific market. These government involvements have been instrumental in China’s significant growthin the past 30 years. The reorganization of the telecommunications industry encouraged by the PRC government has directly affected our industry and our growthprospect. In response to the recent global and Chinese economic downturn, the PRC government has adopted policy measures aimed at stimulating the economicgrowth in China. If the PRC government’s current or future policies fail to help the Chinese economy achieve further growth or if any aspect of the PRCgovernment’s policies limits the growth of the telecommunications industry in China or our industry or otherwise negatively affects our business, our growth rate orstrategy, our results of operations could be adversely affected as a result. Our business benefits from certain government tax incentives. Expiration, reduction or discontinuation of, or changes to, these incentives will increase our taxburden and reduce our net income.Under the PRC Enterprise Income Tax Law passed in 2007 and the implementing rules, both of which became effective on January 1, 2008, or the New EITLaw, a unified enterprise income tax rate of 25% and unified tax deduction standard is applied equally to both domesticinvested enterprises and foreigninvestedenterprises, or FIEs. Enterprises established prior to March 16, 2007 eligible for preferential tax treatment in accordance with the then tax laws and administrativeregulations shall gradually become subject to the New EIT Law rate over a fiveyear transition period starting from the date of effectiveness of the New EIT Law.However, certain qualifying hightechnology enterprises may still benefit from a preferential tax rate of 15% if they own their core intellectual properties and they areenterprises in certain Statesupported hightech industries to be later specified by the government. As a result, if our PRC subsidiaries qualify as “hightechnologyenterprises,” they will continue to benefit from the preferential tax rate of 15%, subject to transitional rules implemented from January 1, 2008. Our subsidiary, BeijingZhong Chuan Shi Xun Technology Limited, is qualified as a “hightechnology enterprise” until the end of the November 2018, and therefore it had benefited fromthe preferential tax rate of 15%, subject to transitional rules implemented on January 1, 2008. Although we intend to apply for a renewal of this qualification, if BeijingZhong Chuan Shi Xun ceases to qualify as a “hightechnology enterprise”, or the tax authorities change their position on our preferential tax treatments in thefuture, our future tax liabilities may materially increase, which could materially and adversely affect our financial condition and results of operations.10If we were deemed a “resident enterprise” by PRC tax authorities, we could be subject to tax on our global income at the rate of 25% under the New EIT Lawand our nonPRC shareholders could be subject to certain PRC taxes.Under the New EIT Law and the implementing rules, both of which became effective January 1, 2008, an enterprise established outside of the PRC with “defacto management bodies” within the PRC may be considered a PRC “resident enterprise” and will be subject to the enterprise income tax at the rate of 25% on itsglobal income as well as PRC enterprise income tax reporting obligations. The implementing rules of the New EIT Law define “de facto management” as “substantialand overall management and control over the production and operations, personnel, accounting, and properties” of the enterprise. However, as of the date of thistransition report, no final interpretations on the implementation of the “resident enterprise” designation are available. Moreover, any such designation, when madeby PRC tax authorities, will be determined based on the facts and circumstances of individual cases. Therefore, if we were to be considered a “resident enterprise”by the PRC tax authorities, our global income would be taxable under the New EIT Law at the rate of 25% and, to the extent we were to generate a substantial amountof income outside of PRC in the future, we would be subject to additional taxes. In addition, the dividends we pay to our nonPRC enterprise shareholders and gainsderived by such shareholders or ADS or ordinary share holders from the transfer of our shares or ADSs may also be subject to PRC withholding tax at the rate up to10%, if such income were regarded as Chinasourced income.Our holding company structure may limit the payment of dividends.We have no direct business operations, other than our ownership of our subsidiaries. While we have no current intention of paying dividends, should wedecide in the future to do so, as a holding company, our ability to pay dividends and meet other obligations depends upon the receipt of dividends or otherpayments from our operating subsidiaries and other holdings and investments. Current PRC regulations permit our PRC subsidiaries to pay dividends to us only outof their accumulated profits, if any, determined in accordance with Chinese accounting standards and regulations. In addition, each of our subsidiaries in China isrequired to set aside at least 10% of its aftertax profits each year, if any, to fund a statutory reserve until such reserve reaches 50% of its registered capital. Thesereserves are not distributable as cash dividends. Furthermore, if our subsidiaries in China incur debt on their own behalf in the future, the instruments governing thedebt may restrict their ability to pay dividends or make other payments to us. As a result, there may be limitations on the ability of our PRC subsidiaries to paydividends or make other investments or acquisitions that could be beneficial to our business or otherwise fund and conduct our business.In addition, under the New EIT Law and the implementing rules that became effective on January 1, 2008, dividends generated from the business of our PRCsubsidiaries after January 1, 2008 and payable to us may be subject to a withholding tax rate of 10% if the PRC tax authorities subsequently determine that we are anonresident enterprise, unless there is a tax treaty with China that provides for a different withholding arrangement.Uncertainties with respect to the PRC legal system could adversely affect us.We conduct all of our business through our subsidiaries in China. Our operations in China are governed by PRC laws and regulations. Our PRCsubsidiaries are generally subject to laws and regulations applicable to foreign investments in China and, in particular, laws and regulations applicable to whollyforeignowned enterprises. The PRC legal system is based on statutes. Prior court decisions may be cited for reference but have limited precedential value.11Since 1979, PRC legislation and regulations have significantly enhanced the protections afforded to various forms of foreign investments in China.However, China has not developed a fully integrated legal system and recently enacted laws and regulations may not sufficiently cover all aspects of economicactivities in China. In particular, because these laws and regulations are relatively new, and because of the limited volume of published decisions and theirnonbinding nature, the interpretation and enforcement of these laws and regulations involve uncertainties. In addition, the PRC legal system is based in part ongovernment policies and internal rules (some of which are not published on a timely basis or at all) that may have a retroactive effect. As a result, we may not beaware of our violation of these policies and rules until some time after the violation. In addition, any litigation in China may be protracted and result in substantialcosts and diversion of resources and management attention.PRC regulation of loans and direct investment by offshore holding companies to PRC entities may delay or prevent us from using the proceeds of our May2010 public offering to make loans or additional capital contributions to our PRC operating subsidiaries, which could materially and adversely affect ourliquidity and our ability to fund and expand our business.In utilizing the proceeds of our May 2010 public offering as an offshore holding company of our PRC operating subsidiaries, we may make loans to our PRCsubsidiaries, or we may make additional capital contributions to our PRC subsidiaries. Any loans to our PRC subsidiaries are subject to PRC regulations. Forexample, loans by us to our subsidiaries in China, which are FIEs, to finance their activities cannot exceed statutory limits and must be registered with the StateAdministration of Foreign Exchange, or SAFE. On August 29, 2008, SAFE promulgated Circular 142, a notice regulating the conversion by a foreigninvestedcompany of foreign currency into RMB by restricting how the converted RMB may be used. The notice requires that RMB converted from the foreign currencydenominated capital of a foreigninvested company may only be used for purposes within the business scope approved by the applicable governmental authorityand may not be used for equity investments within the PRC unless specifically provided for otherwise. The foreign currencydenominated capital shall be verified byan accounting firm before converting into RMB. In addition, SAFE strengthened its oversight over the flow and use of RMB funds converted from the foreigncurrencydenominated capital of a foreigninvested company. To convert such capital into RMB, the foreigninvested company must report the use of such RMB tothe bank, and the RMB must be used to the reported purposes. According to Circular 142, change of the use of such RMB without approval is prohibited. Inaddition, such RMB may not be used to repay RMB loans if the proceeds of such loans have not yet been used. Violations of Circular 142 may result in severepenalties, including substantial fines as set forth in the Foreign Exchange Administration Rules.We may also decide to finance our subsidiaries by means of capital contributions. These capital contributions may need approval from the PRC Ministry ofCommerce, or MOFCOM, or its local counterpart. We may not be able to obtain these government approvals on a timely basis, if at all, with respect to future capitalcontributions by us to our PRC subsidiaries. If we fail to receive such approvals in such cases when approval is required, our ability to use the proceeds of our May2010 public offering and to capitalize our PRC operations may be negatively affected, which could adversely affect our liquidity and our ability to fund and expandour business.Governmental control of currency conversion may affect the value of your investment.The PRC government imposes controls on the convertibility of the RMB into foreign currencies and, in certain cases, the remittance of currency out ofChina. We receive substantially all of our revenues in RMB. Under our current corporate structure, our income is primarily derived from dividend payments from ourPRC subsidiaries. Shortages in the availability of foreign currency may restrict the ability of our PRC subsidiaries to remit sufficient foreign currency to paydividends or other payments to us, or otherwise satisfy their foreign currency denominated obligations. Under existing PRC foreign exchange regulations, paymentsof current account items, including profit distributions, interest payments and expenditures from traderelated transactions, can be made in foreign currencieswithout prior approval from SAFE by complying with certain procedural requirements. However, approval from appropriate government authorities is required whereRMB is to be converted into foreign currency and remitted out of China to pay capital expenses such as the repayment of loans denominated in foreign currencies.The PRC government may also at its discretion restrict access in the future to foreign currencies for current account transactions. If the foreign exchange controlsystem prevents us from obtaining sufficient foreign currency to satisfy our currency demands, we may not be able to pay dividends in foreign currencies to ourshareholders, including holders of our ADSs or ordinary shares.12Fluctuation in the value of the RMB may have a material adverse effect on the value of your investment.The value of the RMB against the U.S. dollar and other currencies may fluctuate and is affected by, among other things, changes in political and economicconditions. On July 21, 2005, the PRC government changed its decadeold policy of pegging the value of the RMB to the U.S. dollar. Under the new policy, the RMBis permitted to fluctuate within a narrow and managed band against a basket of certain foreign currencies. This change in policy has resulted in an approximate26.8% appreciation of the RMB against the U.S. dollar between July 21, 2005 and September 30, 2015. Provisions on Administration of Foreign Exchange, asamended in August 2008, further changed China’s exchange regime to a managed floating exchange rate regime based on market supply and demand. Since reachinga high against the U.S. dollar in July 2008, however, the RMB has traded within a narrow band against the U.S. dollar, remaining within 1% of its July 2008 high butnever exceeding it. As a consequence, the RMB has fluctuated sharply since July 2008 against other freelytraded currencies, in tandem with the U.S. dollar. InAugust 2015, the PRC Government devalued its currency by approximately 3%, representing the largest yuan depreciation for 20 years. Concerns remain thatChina’s slowing economy, and in particular its exports, will need a stimulus that can only come from further cuts in the exchange rate.It is difficult to predict how long the current situation may continue and when and how it may change again as the People’s Bank of China may regularlyintervene in the foreign exchange market to achieve economic policy goals. Substantially all of our revenues and costs are denominated in the RMB, and asignificant portion of our financial assets are also denominated in RMB. We principally rely on dividends and other distributions paid to us by our subsidiaries inChina. Any significant revaluation of the RMB may materially and adversely affect our cash flows, revenues, earnings and financial position, and the value of, andany dividends payable on, our ADSs or ordinary shares in U.S. dollars. Any fluctuations of the exchange rate between the RMB and the U.S. dollar could also resultin foreign currency translation losses for financial reporting purposes.PRC laws and regulations governing our businesses. If we are found to be in violation of such PRC laws and regulations, we could be subject to sanctions. Inaddition, changes in such PRC laws and regulations may materially and adversely affect our business.There are substantial uncertainties regarding the interpretation and application of PRC laws and regulations, including, but not limited to, the laws andregulations governing our business. These laws and regulations are relatively new and may be subject to change, and their official interpretation and enforcementmay involve substantial uncertainty. The effectiveness of newly enacted laws, regulations or amendments may be delayed, resulting in detrimental reliance byforeign investors. New laws and regulations that affect existing and proposed future businesses may also be applied retroactively.The PRC government has broad discretion in dealing with violations of laws and regulations, including levying fines, revoking business and other licensesand requiring actions necessary for compliance. In particular, licenses and permits issued or granted to us by relevant governmental bodies may be revoked at a latertime by higher regulatory bodies. We cannot predict the effect of the interpretation of existing or new PRC laws or regulations on our businesses. We cannot assureyou that our current ownership and operating structure would not be found in violation of any current or future PRC laws or regulations. As a result, we may besubject to sanctions, including fines, and could be required to restructure our operations or cease to provide certain services. In addition, any litigation in China maybe protracted and result in substantial costs and diversion of resources and management attention. Any of these or similar actions could significantly disrupt ourbusiness operations or restrict us from conducting a substantial portion of our business operations, which could materially and adversely affect our business,financial condition and results of operations.13If we were required to obtain the prior approval of the China Securities Regulatory Commission, or CSRC, of the listing and trading of our ADSs on theNASDAQ Capital Market, we may face regulatory actions or other sanctions from the CSRC or other PRC regulatory agencies.On August 8, 2006, six PRC regulatory agencies, including the Ministry of Commerce, the State Assets Supervision and Administration Commission, theState Administration for Taxation, the State Administration for Industry and Commerce, the CSRC and the SAFE, jointly issued the Regulations on Mergers andAcquisitions of Domestic Enterprises by Foreign Investors, which became effective on September 8, 2006 (the “New M&A Rules”). This regulation, among otherthings, includes provisions that purport to require that an offshore special purpose vehicle formed for the purposes of overseas listing of equity interests in PRCcompanies and controlled directly or indirectly by PRC companies or individuals obtain the approval of the CSRC prior to the listing and trading of such specialpurpose vehicle’s securities on an overseas stock exchange. On September 21, 2006, the CSRC published on its official website procedures regarding its approval ofoverseas listings by special purpose vehicles. The CSRC approval procedures require the filing of a number of documents with the CSRC and it would take severalmonths to complete the approval process, if practicable at all. The application of this new PRC regulation remains unclear with no consensus currently existingamong leading PRC law firms regarding the scope of the applicability of the CSRC approval requirement. Prior to our May 2010 initial public offering, our PRC counsel has advised us that, based on its understanding of the current PRC laws and regulations aswell as the procedures announced on September 21, 2006: (i) Softech was directly incorporated by Topsky as a foreign investment enterprise under PRC law;therefore, there was no acquisition of the equity of a “PRC domestic company” as defined under the New M&A Rules; and (ii) the contractual arrangementsbetween Kingtone Information and Softech were not clearly defined and considered as the transaction which shall be applied to the New M&A Rules. Therefore, wedid not seek prior CSRC approval for our initial public offering.However, if the CSRC required that we obtain its approval prior to the completion of our initial public offering and the listing of our ADSs on the NASDAQCapital Market, we may face regulatory actions or other sanctions from the CSRC or other PRC regulatory agencies. These regulatory agencies may impose fines andpenalties on our operations in the PRC, limit our operating privileges in the PRC, delay or restrict the repatriation of the proceeds from our initial public offering intothe PRC, or take other actions that could have a material adverse effect on our business, financial condition, results of operations, reputation and prospects, as wellas the trading price of our shares.Also, if the CSRC requires that we obtain its approval, we may be unable to obtain a waiver of the CSRC approval requirements if and when procedures areestablished to obtain such a waiver. Any uncertainties and/or negative publicity regarding this CSRC approval requirement could have a material adverse effect onthe trading price of our shares.PRC regulations relating to the establishment of offshore special purpose companies by PRC residents may subject our PRC resident shareholders to penaltiesand limit our ability to inject capital into our PRC subsidiaries, limit our PRC subsidiaries’ ability to distribute profits to us, or otherwise adversely affect us.On October 21, 2005, the SAFE issued the Notice on Issues Relating to the Administration of Foreign Exchange in Fundraising and Reverse InvestmentActivities of Domestic Residents Conducted via Offshore Special Purpose Companies, or Notice 75, which became effective as of November 1, 2005. According toNotice 75, prior registration with the local SAFE branch is required for PRC residents to establish or to control an offshore company for the purposes of financingsuch offshore company with assets or equity interests in an onshore enterprise located in the PRC, or an offshore special purpose company. An amendment toregistration or filing with the local SAFE branch by such PRC resident is also required for the injection of equity interests or assets of an onshore enterprise in theoffshore special purpose company or overseas funds raised by such offshore company, or any other material change involving a change in the capital of theoffshore special purpose company. Moreover, Notice 75 applies retroactively. As a result, PRC residents who have established or acquired control of offshorespecial purpose companies that have made onshore investments in the PRC in the past are required to have completed the relevant registration procedures with thelocal SAFE branch by March 31, 2006. To further clarify the implementation of Notice 75, the SAFE issued Circular 106 on May 29, 2007. Under Circular 106, PRCsubsidiaries of an offshore special purpose company are required to coordinate and supervise the filing of SAFE registrations by the offshore holding company’sshareholders or beneficial owners who are PRC residents in a timely manner.14Some of our current shareholders and/or beneficial owners may fall within the ambit of the SAFE notice and be required to register with the local SAFEbranch as required under the SAFE notice. If so required, and if such shareholders and/or beneficial owners fail to timely register their SAFE registrations pursuantto the SAFE notice, or if future shareholders and/or beneficial owners of our company who are PRC residents fail to comply with the registration procedures setforth in the SAFE notice, this may subject such shareholders, beneficial owners and/or our PRC subsidiaries to fines and legal sanctions and may also limit ourability to contribute additional capital into our PRC subsidiaries, limit our PRC subsidiaries’ ability to distribute dividends to our company, or otherwise adverselyaffect our business.Risks Associated with our ADSs and Ordinary SharesOur securities are not currently traded on any United States public markets and you may not be able to resell your securities for some time.There is currently no public market for our ordinary shares or American Depository Shares (“ADSs”) in the United States or in any other jurisdiction. OurADSs were voluntarily delisted from the NASDAQ Capital Market on September 19, 2018. We have applied to NASDAQ for the listing of our ordinary shares on theNASDAQ Capital Market and received an approval for listing of Ordinary Shares on August 6, 2018, and as of the date of this transition report, that application andapproval are currently under review. We cannot assume that our ordinary shares will be accepted for listing on the NASDAQ Capital Market, or if listed, that wewould continue to meet the applicable minimum listing requriements. You may not be able to sell your ordinary shares quickly or at all if we are unable to gain listingon a public market in the United States.The market price of our ADSs has historically been highly volatile, and you may not be able to resell our ordinary shares at or above your initial purchaseprice.There may be a limited public market for our ordinary shares and, as discussed above, our ADSs are no longer listed on any public market in the UnitedStates or any other jurisdiction. We cannot assure you that there will be an active trading market for our ordinary shares in the future. If our ordinary shares areaccepted for listing on a public market, you may not be able to sell your ordinary shares quickly or at the market price if trading in our ordinary shares is not active. The trading price of our ADSs and ordinary shares may be volatile. The price of our ADSs and ordinary shares could be subject to wide fluctuations inresponse to a variety of factors, including the following:1.Introduction of new products, services or technologies offered by us or our competitors;2.Failure to meet or exceed revenue and financial projections we provide to the public;3.Actual or anticipated variations in quarterly operating results;4.Failure to meet or exceed the estimates and projections of the investment community;5.General market conditions and overall fluctuations in United States equity markets;6.Announcements of significant acquisitions, strategic partnerships, joint ventures or capital commitments by us or our competitors;7.Disputes or other developments relating to proprietary rights, including patents, litigation matters and our ability to obtain patent protection for ourtechnologies;8.Additions or departures of key management personnel;9.Issuances of debt or equity securities;10.Significant lawsuits, including patent or shareholder litigation;11.Changes in the market valuations of similar companies;12.Sales of additional ordinary shares or other securities by us or our shareholders in the future;13.Trading volume of our ordinary shares;14.Fluctuations in the exchange rate between the U.S. dollar and Renminbi;15.Negative market perception and media coverage of our company or other companies in the same or similar industry with us; and16.Other events or factors, many of which are beyond our control.15In addition, the stock market in general, and the NASDAQ Capital Market and software products and services companies in particular, have experiencedextreme price and volume fluctuations that have often been unrelated or disproportionate to the operating performance of these companies. Broad market andindustry factors may negatively affect the market price of our ordinary shares, regardless of our actual operating performance. Our ADSs and ordinary shares may be subject to the SEC’s penny stock rules which may make it difficult for brokerdealers to complete customer transactionsand trading activity in our securities.Our ADSs and ordinary shares may be deemed to be “penny stock” as that term is defined under the Securities Exchange Act of 1934, as amended. Pennystocks generally are equity securities with a price of less than $5.00 (other than securities registered on certain national securities exchanges or quoted on theNASDAQ system, provided that current price and volume information with respect to transactions in such securities is provided by the exchange or system). Pennystock rules impose additional sales practice requirements on brokerdealers who sell to persons other than established customers and “accredited investors.” Theterm “accredited investor” refers generally to institutions with assets in excess of $5,000,000 or individuals with a net worth in excess of $1,000,000 or annual incomeexceeding $200,000 or $300,000 jointly with their spouse in each of the prior two years.The penny stock rules require a brokerdealer, prior to a transaction in a penny stock not otherwise exempt from the rules, to deliver a standardized riskdisclosure document in a form prepared by the SEC, which provides information about penny stocks and the nature and level of risks in the penny stockmarket. Moreover, brokerdealers are required to determine whether an investment in a penny stock is a suitable investment for a prospective investor. A brokerdealer must receive a written agreement to the transaction from the investor setting forth the identity and quantity of the penny stock to be purchased. Theserequirements may make it more difficult for brokerdealers to effectuate customer transactions and trading activity in our securities. As a result, the market price ofour ADSs and ordinary shares may be depressed, and you may find it more difficult to sell our ADSs or ordinary shares.Sales of a substantial number of ordinary shares or ADSs in the public market by our existing shareholders could cause the price of our ADSs to fall.Sales of a substantial number of our ordinary shares or ADSs in the public market or the perception that these sales might occur, could depress the marketprice of our ADSs and could impair our ability to raise capital through the sale of additional equity securities. We are unable to predict the effect that sales may haveon the prevailing market price of our ADSs.All of our existing shareholders prior to our May 2010 offering were subject to lockup agreements with the underwriters of the offering that restricted theshareholders’ ability to transfer ordinary shares or ADSs until expiration of the lockup period in November 2010. The lockup agreements limited the number ofordinary shares or ADSs that may be sold immediately following the public offering. Subject to certain limitations, approximately 1,000,000 of our total outstandingshares are now eligible for sale. Sales of ordinary shares by these shareholders could have a material adverse effect on the trading price of our ADSs.Future sales and issuances of our ordinary shares, or rights to purchase our ordinary shares, including pursuant to our 2010 Omnibus Incentive Plan, couldresult in additional dilution of the percentage ownership of our shareholders and could cause the price of our ordinary shares to fall.We expect that significant additional capital will be needed in the future to continue our planned operations. To the extent we raise additional capital byissuing equity securities, our shareholders may experience substantial dilution. We may sell ordinary shares, convertible securities or other equity securities in oneor more transactions at prices and in a manner we determine from time to time. If we sell ordinary shares, convertible securities or other equity securities in more thanone transaction, investors may be materially diluted by subsequent sales. Such sales may also result in material dilution to our existing shareholders, and newinvestors could gain rights superior to our existing shareholders.16We do not intend to pay dividends on our ordinary shares, so any returns will be limited to the value of our ADSs and ordinary shares.We have never declared or paid any cash dividend on our ordinary shares. We currently anticipate that we will retain future earnings for the development,operation and expansion of our business and do not anticipate declaring or paying any cash dividends for the foreseeable future. Any return shareholders willtherefore be limited to the value of their ADSs or ordinary shares.As the rights of shareholders under British Virgin Islands law differ from those under U.S. law, you may have fewer protections as a shareholder.Our corporate affairs will be governed by our memorandum of association and articles of association, the BVI Business Companies Act, 2004, or the BVIAct, of the British Virgin Islands and the common law of the British Virgin Islands. The rights of shareholders to take legal action against our directors, actions byminority shareholders and the fiduciary responsibilities of our directors under British Virgin Islands law are to a large extent governed by the BVI Act and thecommon law of the British Virgin Islands. The common law of the British Virgin Islands is derived in part from comparatively limited judicial precedent in the BritishVirgin Islands as well as from English common law, which has persuasive, but not binding, authority on a court in the British Virgin Islands. The rights of ourshareholders and the fiduciary responsibilities of our directors under British Virgin Islands law are not as clearly established as they would be under statutes orjudicial precedents in some jurisdictions in the United States. In particular, the British Virgin Islands has a less developed body of securities laws as compared to theUnited States, and some states (such as Delaware) have more fully developed and judicially interpreted bodies of corporate law.As a result of all of the above, holders of our ADSs and ordinary shares may have more difficulty in protecting their interests through actions against ourmanagement, directors or major shareholders than they would as shareholders of a U.S. company.British Virgin Islands companies may not be able to initiate shareholder derivative actions, thereby depriving shareholders of the ability to protect theirinterests.British Virgin Islands companies may not have standing to initiate a shareholder derivative action in a federal court of the United States. The circumstancesin which any such action may be brought, and the procedures and defenses that may be available in respect to any such action, may result in the rights ofshareholders of a British Virgin Islands company being more limited than those of shareholders of a company organized in the United States. Accordingly,shareholders may have fewer alternatives available to them if they believe that corporate wrongdoing has occurred. The British Virgin Islands courts are alsounlikely to recognize or enforce against us judgments of courts in the United States based on certain liability provisions of U.S. securities law; and to imposeliabilities against us, in original actions brought in the British Virgin Islands, based on certain liability provisions of U.S. securities laws that are penal in nature.There is no statutory recognition in the British Virgin Islands of judgments obtained in the United States, although the courts of the British Virgin Islands willgenerally recognize and enforce the nonpenal judgment of a foreign court of competent jurisdiction without retrial on the merits.The laws of the British Virgin Islands provide little protection for minority shareholders, so minority shareholders will have little or no recourse if theshareholders are dissatisfied with the conduct of our affairs.Under the law of the British Virgin Islands, there is little statutory law for the protection of minority shareholders other than the provisions of the BVI Actdealing with shareholder remedies. The principal protection under statutory law is that shareholders may bring an action to enforce the constituent documents ofthe corporation, our memorandum of association and articles of association. Shareholders are entitled to have the affairs of the company conducted in accordancewith the general law and the memorandum of association and articles of association.17There are common law rights for the protection of shareholders that may be invoked, largely dependent on English company law, since the common law ofthe British Virgin Islands is limited. Under the general rule pursuant to English company law known as the rule in Foss v. Harbottle, a court will generally refuse tointerfere with the management of a company at the insistence of a minority of its shareholders who express dissatisfaction with the conduct of the company’s affairsby the majority or the board of directors. However, every shareholder is entitled to have the affairs of the company conducted properly according to law and thecompany’s constituent documents. As such, if those who control the company have persistently disregarded the requirements of company law or the provisions ofthe company’s memorandum of association and articles of association, then the courts will grant relief. Generally, the areas in which the courts will intervene are thefollowing: (1) an act complained of which is outside the scope of the authorized business or is illegal or not capable of ratification by the majority; (2) acts thatconstitute fraud on the minority where the wrongdoers control the company; (3) acts that infringe on the personal rights of the shareholders, such as the right tovote; and (4) where the company has not complied with provisions requiring approval of a majority of shareholders, which are more limited than the rights affordedminority shareholders under the laws of many states in the United States.Antitakeover provisions in our memorandum of association and articles of association and our right to issue preference shares could make a thirdpartyacquisition of us difficult.Some provisions of our memorandum of association and articles of association may discourage, delay or prevent a change in control of our company ormanagement that shareholders may consider favorable, including provisions that authorize our board of directors to issue preference shares in one or more seriesand to designate the price, rights, preferences, privileges and restrictions of such preference shares.If you hold our ADSs, you may not have the same voting rights as the holders of our ordinary shares and must act through the depositary to exercise your rights.Holders of our ADSs will not be able to exercise voting rights attaching to the shares evidenced by our ADSs on an individual basis. Holders of our ADSswill appoint the depositary or its nominee as their representative to exercise the voting rights attaching to the shares represented by the ADSs. You may not receivevoting materials in time to instruct the depositary to vote, and it is possible that you, or persons who hold their ADSs through brokers, dealers or other third parties,will not have the opportunity to exercise a right to vote. Upon our written request, the depositary will mail to you a shareholder meeting notice which contains,among other things, a statement as to the manner in which your voting instructions may be given, including an express indication that such instructions may begiven or deemed given to the depositary to give a discretionary proxy to a person designated by us if no instructions are received by the depositary from you on orbefore the response date established by the depositary. However, no voting instruction shall be deemed given and no such discretionary proxy shall be given withrespect to any matter as to which we inform the depositary that (i) we do not wish such proxy given, (ii) substantial opposition exists, or (iii) such matter materiallyand adversely affects the rights of shareholders. We will make all reasonable efforts to cause the depositary to extend voting rights to you in a timely manner, butyou may not receive the voting materials in time to ensure that you can instruct the depositary to vote your ADSs. Furthermore, the depositary and its agents willnot be responsible for any failure to carry out any instructions to vote, for the manner in which any vote is cast or for the effect of any such vote. As a result, youmay not be able to exercise your right to vote and you may lack recourse if your ADSs are not voted as you requested. In addition, in your capacity as an ADSholder, you will not be able to call a shareholders’ meeting.You may not be able to participate in rights offerings and may experience dilution of your holdings as a result.We may from time to time distribute rights to our shareholders, including rights to acquire our securities. However, we may not, and under the depositagreement for the ADSs, the depositary will not, offer those rights to ADS holders unless both the rights and the underlying securities to be distributed to ADSholders are registered under the Securities Act, or the distribution of them to ADS holders is exempted from registration under the Securities Act with respect to allholders of ADSs. We are under no obligation to file a registration statement with respect to any such rights or underlying securities or to endeavor to cause such aregistration statement to be declared effective. In addition, we may not be able to rely on an exemption from registration under the Securities Act to distribute suchrights and securities. Accordingly, holders of our ADSs may be unable to participate in our rights offerings and may experience dilution in their holdings as a result.You may be subject to limitations on transfer of your ADSs.Your ADSs are transferable on the books of the depositary. However, the depositary may close its transfer books at any time or from time to time when itdeems expedient in connection with the performance of its duties. In addition, the depositary may refuse to deliver, transfer or register transfers of ADSs generallywhen our books or the books of the depositary are closed, or at any time if we or the depositary deem it advisable to do so because of any requirement of law or ofany government or governmental body, or under any provision of the deposit agreement, or for any other reason.18We may be a passive foreign investment company, of PFIC, which could lead to additional taxes for U.S. holders of our ADSs or ordinary shares.We do not expect to be, for U.S. federal income tax purposes, a passive foreign investment company, or a PFIC, which is a foreign company for which, inany given taxable year, either at least 75% of its gross income is passive income, or investment income in general, or at least 50% of its assets produce or are held toproduce passive income, for the current taxable year, and we expect to operate in such a manner so as not to become a PFIC for any future taxable year. However,because the determination of PFIC status for any taxable year cannot be made until after the close of such year and requires extensive factual investigation,including ascertaining the fair market value of our assets on a quarterly basis and determining whether each item of gross income that we earn is passive income, wecannot assure you that we will not become a PFIC for the current taxable year or any future taxable year. If we are or become a PFIC, a U.S. holder of our ADSs orordinary shares could be subject to additional U.S. federal income taxes on gain recognized with respect to the ADSs or ordinary shares and on certain distributions,plus an interest charge on certain taxes treated as having been deferred under the PFIC rules. Noncorporate U.S. holders will not be eligible for reduced rates oftaxation on any dividends received from us if we are a PFIC in the taxable year in which such dividends are paid or in the preceding taxable year.If our ordinary shares are listed on the NASDAQ Capital Market and the trading price of our ordinary shares fails to comply with the continued listingrequirements of the NASDAQ Capital Market, we would face possible delisting, which would result in a limited public market for our ordinary shares andmake obtaining future debt or equity financing more difficult for us.Companies listed on NASDAQ are subject to delisting for, among other things, failure to maintain a minimum closing bid price of $1.00 per share for 30consecutive business days. On December 19, 2011, we received a letter from NASDAQ indicating that for the last 30 consecutive business days, the closing bidprice of our ADSs fell below the minimum $1.00 per share requirement pursuant to NASDAQ Listing Rule 5550(a)(2) for continued listing on the NASDAQ CapitalMarket. We regained compliance with the minimum bid price requirement for continued listing set forth in NASDAQ Listing Rule 5550(a)(2), as its ADS with itsunderlying ordinary share has achieved a closing bid price of $1.00 or greater for the 10 consecutive business days from November 6 to November 23, 2012 byimplementing a 1for10 combination, or reverse split of the ordinary shares effective November 6, 2012. When listed, we cannot be sure that the price of our ordinaryshares will comply with this requirement for continued listing on the NASDAQ Capital Market in the future. If we were not able to do so, our ordinary shares wouldbe subject to delisting and would likely trade on the overthecounter market. If our ordinary shares were to trade on the overthecounter market, selling ourordinary shares could be more difficult because smaller quantities of shares would likely be bought and sold, transactions could be delayed, and security analysts’coverage of us may be reduced. In addition, brokerdealers have certain regulatory burdens imposed upon them, which may discourage brokerdealers from effectingtransactions in our ordinary shares, further limiting the liquidity of our ordinary shares. As a result, the market price of our ordinary may be depressed, and you mayfind it more difficult to sell our ordinary shares. Such delisting from the NASDAQ Capital Market and continued or further declines in our share price could alsogreatly impair our ability to raise additional necessary capital through equity or debt financing.ITEM 4. INFORMATION ON THE COMPANY.A . HISTORY AND DEVELOPMENT OF THE COMPANY.OverviewWe are a holding company and conduct our operations through our whollyowned subsidiary named LK Technology Ltd., a British Virgin Islands limitedliability company (“LK Technology”), and its whollyowned subsidiaries, MMB Limited and Mobile Media (China) Limited and their respective subsidiaries, whichhold the rights to deploy WiFi systems on about 700 trains in China, including 290 trains in which WiFi systems have already been installed and are in operation. InMay 2010, we consummated an initial public offering of our American Depository Shares, or ADSs, for gross proceeds of $16 million, and our ADSs were listed onthe NASDAQ Capital Market under the ticker symbol “KONE”. Our ordinary shares are not currently listed on any trading market. Our American Depository Shares(“ADSs”) were voluntarily delisted from the NASDAQ Capital Market on September 19, 2018. We have applied to NASDAQ for the listing of our ordinary shares onthe NASDAQ Capital Market and received an approval for listing of Ordinary Shares on August 6, 2018, and as of the date of this transition report, that applicationand approval are currently under review.19On August 17, 2018, we consummated an asset exchange transaction, pursuant to which we exchanged all issued and outstanding capital stock in TopskyInfoTech Holdings Pte Ltd., the parent of Softech, for the issued and outstanding capital stock of LK Technology (the “Asset Exchange”). In connection with theAsset Exchange, we changed our name on August 20, 2018, and on September 20, 2018, issued to the shareholders of C Media Limited, the former parent of LKTechnology, (i) 185,412,599 of our ordinary shares, par value $0.01 per share and (ii) 1,000,000 of our preferred shares. Upon the consummation of the AssetExchange, we ceased our previous business operations and became a company focused on the provision of WiFi and mobile application products for long distancerail travelers in China.On August 25, 2018, LK Technology entered into a Stock Purchase Agreement (the “Agreement”) with the shareholders (“Shareholders”) of SuperengineHoldings Limited, a limited liability company organized under the laws of the British Virgin Islands (the “Superengine”), pursuant to which LK Technology acquiredall of the issued and outstanding capital stock of Superengine for an aggregate purchase price of US$60 million (the “Purchase Price”), which are paid by theissuance of our Ordinary Shares in an amount equal to the quotient of (x) the Purchase Price divided by (y) the average of the closing prices of the Ordinary Shareson the NASDAQ Capital Market over the 12 months period preceding July 31, 2018. We are a party to the Agreement in connection with the issuance of theOrdinary Shares and certain other limited purposes.Corporate InformationOur principal executive offices are located at LAB32, SOHO 3Q, No 9, Guanghua Road, Chaoyang District, Beijing, People’s Republic of China 100020. Ourwebsite is www.luokung.com. We routinely post important information on our website. The information contained on our website is not a part of this transitionreport.Our agent for service of process in the United States is Worldwide Stock Transfer, LLC, the current transfer agent of the Company, with a mailing address ofOne University Plaza, Suite 505, Hackensack, New Jersey 07601.B. BUSINESS OVERVIEW.We are a Chinabased provider of rail WiFi and mobile application products for long distance travelers in China. Our primary mobile application, theLuoKuang platform, consists of the LuoKuang mobile applications, a series of supporting software at the server end, and railWiFi hardware and equipment on thetrains that we serve. The LuoKuang platform incorporates technology covered by 22 patents and about 34 software copy rights, and serves as a content and servicedistribution platform that is tailored for particular travel stages featuring geographic location and social interaction. The content and services distributed byLuoKuang contain information, entertainment, travel, ecommerce, online to offline (“O2O”), advertisement and marketing features.LuoKuang mainly provides personalized and precise services to long distance travelers in two locations: on the train and at the destination. Based on thetravel environment, the core elements of our users’ needs include staving off boredom on trains and discovering and exploring new locations upon arrival. The mainservices contain entertainment services (videos and audio, digital readings, games specific and tailored to the travel stage) and social services (satisfying thedemand for value discovery of unfamiliar destinations through social interaction among strangers based on locations). As of December 31, 2017, the LuoKuangplatform featured about 38 million users.The setting services on the train focus on providing entertainment content for passengers to pass time during longdistance travel in closed environments.For example, we provide access to long video formats such as movies and TV shows, short videos, music, digital readings and games.20We use the most valuable WiFi location—the train WiFi setting—as the entrance of our LuoKuang platform and mobile applications. Passengers typicallyride trains for longdistance and interprovincial travel purposes. The long periods of monotonous journeys and the cost concerns for roaming traffic fees enable thecombination of entertainment content service needs and WiFi access needs. Our railWiFi becomes a valuable and sophisticated WiFi service in this setting—notjust WiFi connection service, but a provider of sophisticated services through a WiFi connection. In addition, the annual traffic of 800,000 passengers onboardeach train makes rail WiFi a huge entry point for mobile applications. We do not define ourselves as a train WiFi communication service operator but as a longdistance travel mobile service provider. We provide users with free WiFi access so that users are able to connect to the LuoKuang platform and thus access relatedentertainment services, services on the train and destination services. The rail WiFi is our access point to a significant pool of users and the entrance to acquiringadditional users.The setting services focus on providing targeted push services to users while travelling in unfamiliar cities. Information and service guidance are preciselypushed to appeal to the interests and tastes (eating, drinking, shopping, touring and culture) of individual users (cuisine specialties and local snacks, local events,viewing sights, culture, history, stories). The service guidance is generated, shared and distributed by individual users (travelers, local residents, local businesses)interacting with current locations and featuring users who generated contents from selfmedia and small and medium vertical contents providers).Based on the GIS (geoinformation system), Superengine is a provider of big spatialtemporal data, network graphic image technology and relevant service.Its super engine series includes computer graphic image engines and spatial database engines. Spatialtemporal cloud index is the core of the company’s spatialtemporal data engines. It is equivalent to the neural network of the big data and the Internet. It extends the value of its products and platform to its data serviceproviders. In cooperation, its service providers can be divided into three categories, namely, basic geographic data providers, industrial data providers andbehavioral data providers). Superengine’s industriesoriented spatialtemporal data engine was launched in 2016. The spatialtemporal GIS platform has been appliedin industries such as aerospace, power grid, surveying & mapping, agriculture, cultural relic preservation, water conservancy, public security, railway section, smartcities, and business location selection.Our primary sources of revenue are advertising and marketing promotion revenues.Our Industry — Mobile Internet IndustryOur products and services are engaged in the mobile internet industry. Our main services consist of entertainment services (videos, audio, digital readings,games that are tailormade for passengers on train) and other services including satisfying the demand for value discovery of unfamiliar destinations through socialinteractions among strangers based in such locations). The mobile internet industry in China is rapidly growing and is likely to be in a longterm growth trend.According to the Mobile Internet Blue Book of China Mobile Internet Report, in 2017 the market size of China mobile internet reached RMB 605 billion. Now China isin a leading position in terms of smartphone, mobile communication network and mobile application services. The pool of users is anticipated to keep expandingthrough the promotion and popularization of smartphones and the expansion of the mobile internet market.Video is the leading online entertainment format in China. According to the iResearch Report, over 80% of total time spent by users on online entertainmentin China in 2016 was internet video. Online entertainment, especially internet video, is attractive to Chinese users due to many favorable factors, including easyaccessibility, wide content selection, and innovative platforms with social features.For 2017, the transaction volume of China mobile ecommerce market reached to over RMB 4 trillion according to the China Mobile Ecommerce IndustryResearch Report from iResearch, representing an increase of 19.1%. For the next few years, China mobile online shopping will likely maintain steady growth. Thefocal point of competition in China mobile ecommerce market has shifted from infrastructure service providers to integrated and accurate services providers.Drawing in users with compelling content in diversified scenes has become a trend.21The revenue for China mobile gaming industry reached RMB 144.58 billion for the year of 2017, according to the China Mobile Game Industry ResearchReport from iResearch. With increased investment by largescale enterprises in the sector of mobile games and the strict enforcement of the mobile game industryrelated regulatory policy guidelines, the mobile game market as a whole will become more organized and standardized.According to the Annual Analysis of China Mobile Reading Industry from Analysis, for the year of 2017, the mobile reading market in China reached toRMB 14.04 billion. By the end of 2016, the size of China mobile's reading market reached RMB 11.86 billion, showing an increase of 18.38% in 2017.The closed and boring environment for passengers of longdistance travel and high roaming charges lead to a strong demand to use our rail WiFi services.Passengers, through their own mobile phone, have access to the free WiFi network in each carriage, access to our rich mobile internet entertainment content andtravel services. According to the annual statistical bulletin of China Railway Corporation in 2017, there were about 6,030 trains in operation in China in 2017,consisting of 2,935 high speed trains and 3,095 express trains. The rail WiFi system that we have installed are currently all on express trains. The market value will bemultiplied several times following the extended coverage of service on other trains.Our StrengthsWe believe the following strengths differentiate us from our competitors:Our strategy is to build up personalized and targeted service products for travelers through rail WiFi networks, enabling our services to evolve into a coredriving distribution platform that provides content, news, games, ecommerce, OTO service, travel services and advertising and marketing. In comparison, ourcompetitors offer simple forms of media services on trains. We focus on personalized and targeted matching between users on long distance trips and services. Ourcompetitors focus on operating and generating internet traffic.We possess a complete set of technology system including network, client end and service and operation platform. We have patent protections for WiFiequipment on trains. Our technology strengths are briefly summarized below.WiFi EquipmentPatent protected. Supports WiFi/3G/4G telecom modules; 4 core CPU with X86 architecture, and SSD hard disk with big storage for localcontents.InfrastructureThe technology infrastructures include the application program system, big data gathering and processing systems, intelligence cloudsservice deployment structure systems and our WiFi hardware server deployment structure system. The operation center, big data center,contents center and railWiFi server system are built on this infrastructure. On the above layer, the equipment management platform,account and payment platform, contents management platform and advertisement distribution platform are set up for daily managementpurpose.LuoKuang strengthens the connection of services among people, setting and locations. In catering to people on the move, we anticipate strengthening therelationship between users and their locations in a given moment. Currently, LuoKuang provides the link between users and thirdparty service providers andprovides value added services to both users and thirdparty service providers. The connection is not simply a traffic diversion, but also the direct presentation ofrelevant services in the LuoKuang platform. The open API interface and independent product software package allows easy access by service providers anddevelopers and supports data service, advertisement operations, billing, users promotion and product marketing services. As an API product, LuoKuang does notcreate content or services. The content and services are provided by our partners in the LuoKuang platform. Now, the majority of top mobile internet content andservices providers in China have a presence in the Luokuang platform. Those include, but are not limited to, Toutiao, Wangyi News, iqiyi, Letv, YoudianCinema(Hollywood films), Sohu video, Phoenix Video, Kugou Music, FM Qingting, iReader, Baidu Literature, Phoenix Novel, Baidu Game, Meituan, Dianping, andsimilar content providers.22Our StrategyLuoKuang is positioned to provide API interface services and geographic information social services. The API interface services are provided within thetypical BC model. LuoKuang pushes the content and services from thirdparty service providers to users. The local businesses, service practitioners, residents, andforeign travelers are all defined as a “user” and may participate in social interactions based on local value information and generate UGC content. The socalled localvalue information is defined as information, views, evaluations, experiences and experience sharing related to the local cultural scene, native products,entertainment, food, tourism and activities.The LuoKuang user growth strategy is to have access to users through the travelers’ use of mobile devices in connection with longdistance train travel.Through deploying WiFi systems on trains and providing free WiFi access to passengers, LuoKuang is able to have consistent access to longdistance travelers.The WiFi system on the train has become a powerful user portal at the early stage of LuoKuang and has gained substantial user traffic. We are in a leading positionin terms of numbers of trains contracted and trains in operation with our free WiFi system. We have contracted with about 700 trains, which cover almost 560 millionannual passenger trips. As of the date of this report, approximately 290 trains are operating our rail WiFi system. We will continue to install our rail WiFi system inthe following years.The development strategy for LuoKuang encompasses the following:1.Enhance our local cycle service (a recommendation service system based on the location of travelers after their arrival, recommendations includingtourist attractions, local specialties and other items of interest), strengthen services for arrivals in the form of social interaction and focus on the valueof relationships between users and their current locations.2.Focus on the development of geographic positioning technology. Get the business of local cycle and users on train mixed together. We will put oureffort to maximize the synergy effect.3.Big Data: Behavior data about passenger trips is obtained via the traffic entrance of rail WiFi and these data will help to optimize our product.4.While enhancing setting service experiences and optimizing entertainment experiences, we will enrich ecommerce services on trains featuringrecommendations of customized products and ecommerce shopping guidance of products labeled with specific geographic location (and trafficdiversion).5.Focus on API positioning and attract more premium vertical service providers (contents and services).Intellectual PropertyWe have registered the following software copyrights, patents and trademarks for our business operations. We believe this intellectual property forms anintegral part of our competitive strength.23Patents:We have been granted some inventions by the State Intellectual Property Office of PRC. We possess a complete set of technology system includingnetwork, client end and service and operation platform. We have patent protections for WiFi equipment on trains. We have received the following patents:No.Name of patentTypeRegistrationNumberDate of Insurance1.Wireless communication multimedia chip business consumer informationacquisition terminal deviceInventionZL 2010 2 0528767.9Sep 21, 20112.A user behavior processing method and device for intelligent terminalInventionZL 2013 1 0301728.3May 27, 20153.A global positioning system terminal deviceInventionZL 2010 2 0253452.8Nov 7, 20114.A wireless multimedia serverInventionZL 2013 2 0220183.9Nov 13, 20135.Ordering system of passengers on trainInventionZL 2015 2 0095381.6Aug 5, 20156.A wireless multimedia serverInventionZL 2015 2 0201382.4Oct 28, 20157.An antenna structureInventionZL 2016 2 0424352.4Mar 1, 20178.Spatial data progressive transmission method and deviceInvention201010617383.9Jun 15, 20169.Methods and devices for conflict detection and avoidance of spatial entity elementlabelingInvention201010617385.8Mar 26, 201410.Spatial data processing method and deviceInvention201010617399.XJun 26, 201311.Method and device of spatial data simplificationInvention201010617400.9Mar 13, 201312.Method and device for judging the occlusion type of space entityInvention201010617403.2Sep 25, 201313.A method and device for distributed mapping of 3d model dataInvention201110274924.7Mar 26, 201414.Data simplification of 3d model, gradual transmission method and deviceInvention201110275336.5Mar 25, 201515.Spatial data transmission method and deviceInvention201110306393.5Dec 13, 201416.Methods and devices for spatial data processing, simplification and progressivetransmissionInvention201210104250.0Jun 10, 201517.Spatial data progressive transmission method and deviceInvention201310367021.2Jun 23, 201718.Simplification method and device of spatial dataInvention201310367128.7Sep 22, 201719.The method and device to accelerate transmission and display of graphic dataacross platformsInvention201210116149.7Aug 10, 201620.Methods and devices related to spatial data compression, decompression andprogressive transmissionInvention201310136682.4Nov 10, 2017We also have two patents outside of China.No.Name of patentCountryNationalRegistrationNumberDate ofInsurance1.Spatial data processing method and deviceJapan2012547439Jun 20, 20142.Methods and devices related to spatial data compression, decompression andprogressive transmissionU.S.A14/394,610Sep 5, 201724Software Copyrights:We have received the following software copyrights from the National Copyright Administration (“NCA”) of PRC:No.Name of CopyrightAchievement approachRegistration numberTime of obtainExpire time1.WAP PUSH Business operation platformsystemIndependent research anddevelopment2007SRBJ1464Jul 23, 200750 years2.TDSCDMA Streaming media businessmanagement platform software V1.0Independent research anddevelopment2009SRBJ0412Jan 22, 200950 years3.Content management platform systemsoftware V1.0Independent research anddevelopment2009SRBJ1374Apr 1, 200950 years4.Mobile multimedia broadcast electronicservice guide system software V1.0Independent research anddevelopment2009SRBJ1365Apr 1, 200950 years5.Mobile video business operation platformsystem V1.0Independent research anddevelopment2007SRBJ1463Jul 23, 200750 years6.Mobile multimedia broadcast emergencybroadcast platform software V1.0Independent research anddevelopment2010SRBJ0720Mar 5, 201050 years7.Mobile multimedia broadcast audio richmedia interactive platform softwareV1.0Independent research anddevelopment2010SRBJ0719Mar 5, 201050 years8.Printer typesetting and printing softwareV1.0Independent research anddevelopment2011SRBJ4190Sep 28, 201150 years9.Electronic newspaper business supportplatform software V1.0Independent research anddevelopment2011SRBJ4186Sep 28, 201150 years10.Public information business platformsoftware V1.0Independent research anddevelopment2011SRBJ3810Sep 27, 201150 years11.User interface scripting software V1.0Independent research anddevelopment2011SRBJ3809Sep 27, 201150 years12.Integrated business management platformsoftware V1.0Independent research anddevelopment2012SR003002Jan 16, 201250 years13.Interactive business development platformsoftwareIndependent research anddevelopment2011SRBJ4593Nov 29, 201150 years14.Instant messaging and messaging systemsoftwareIndependent research anddevelopment2014SR122231Aug 5, 201450 years15.General statistical platform software forclient productsIndependent research anddevelopment2014SR216662Dec 30, 201450 years16.CMMB Data broadcast managementplatform softwareIndependent research anddevelopment2009SRBJ0391Jan 22, 200950 years17.Integrated passenger train service systemIndependent research anddevelopment2012SR083665Sep 5, 201250 years25No.Name of CopyrightAchievement approachRegistration numberTime of obtainExpire time18.JHBY Train inspection managementsystemIndependent research anddevelopment2013SR015105Feb 21, 201350 years19.Integrated information engine platformsoftware V1.0Independent research anddevelopment2014SR040347Nov 30, 200150 years20.Super information engine developmentplatform software V5.0Independent research anddevelopment2014SR036792Mar 5, 200350 years21.Core map super network informationengine platform software V1.0Independent research anddevelopment2014SR036772Sep 15, 200750 years22.Integrated management of the grid gissoftware V1.0Independent research anddevelopment2014SR036808Jun 20, 200850 years23.Core map rural power grid equipment GPSpatrol system software V1.0Independent research anddevelopment2014SR036810Dec 10, 200850 years24.Diagram grid patrol PDA system softwareV1.0Independent research anddevelopment2014SR036778Dec 12, 200850 years25.Core map geographic information enginedesktop platform software V1.0Independent research anddevelopment2014SR036614Jan 15, 200950 years26.Integrated management of the gridgeographic information Web systemsoftware V1.0Independent research anddevelopment2014SR036799Mar 10, 200950 years27.Core map railway power supply equipmentGPS patrol system software V1.0Independent research anddevelopment2014SR036783Mar 25, 201050 years28.Core map network 3 d map server softwareV1.0Independent research anddevelopment2014SR036788Feb 20, 201150 years29.Core map network 3d map clientsoftwareV1.0Independent research anddevelopment2014SR036637Feb 22, 201150 years30.Core map 3d map network publishingplatform software V1.0Independent research anddevelopment2014SR036633Mar 10, 201150 years31.Core map 3d map network release pluginsystem software V1.0Independent research anddevelopment2014SR036622Mar 15, 201150 years32.Core map network 3d map smartphoneplatform software V1.0Independent research anddevelopment2014SR036638Apr 28, 201150 years33.Core map network GIS Shared mobileplatform software V1.0Independent research anddevelopment2014SR036634Oct 31, 201150 years34.Core map network GIS sharing platformsoftware V1.0Independent research anddevelopment2014SR036639Dec 16, 201150 yearsTrademarks:We have registered the following trademarks with the Trademark Office, State Administration for Industry and Commerce in the PRC:NoTrademarkClassification NumberValid PeriodRegistration Number1Y图形382010.04.212020.04.2067460692Y图形412010.09.072020.09.0667460673YRADIO文字352010.07.212020.07.2067334374YRADIO文字382010.04.21.2020.04.2067334385YRADIO文字412010.09.072020.09.0667334396LookLook图形382009.04.072019.04.0646660517LookLook图形422008.12.212018.12.2046660508YTV文字352010.07.212020.07.2067335799YTV文字382010.05.282020.05.27673357810YTV文字412010.09.072020.09.06673358111YTV文字422010.09.072020.09.06673358012YOUTV文字352010.07.212020.07.20673344013YOUTV文字382010.05.282020.05.27673344114xfeng文字352012.03.282022.03.27922914526NoTrademarkClassification NumberValid PeriodRegistration Number15xfeng文字382012.03.282022.03.27922916016xfeng文字412012.03.282022.03.27922919017xfeng文字422012.03.282022.03.27922922118中传视讯文字+图形422008.12.212018.12.20466604719中传视讯文字422008.12.212018.12.20466604820中传视讯文字382008.12.212018.12.20466604921新蜂文字382011.08.212021.08.20853890722新蜂文字422012.01.282022.01.27853907823新蜂.潮文字382011.08.212021.08.20853910424新蜂.潮文字422012.01.282022.01.27853914125新影力412014.08.282024.08.271228864326小人图形352014.08.282024.08.271228798527小人图形382014.08.282024.08.271228858028小人图形412014.08.282024.08.271228862929小人图形422014.08.282024.08.271228843530中传文字382014.08.282024.08.271228826731中传图形382014.08.282024.08.271228828932中童文字412014.08.072024.08.061221408533中童在线文字412014.08.072024.08.061221409234翠鸟文字382014.08.072014.08.061221405835翠鸟文字422014.08.072014.08.061221412536爱翠鸟文字382014.08.072024.08.061221406637爱翠鸟文字412014.08.072024.08.061221409638爱翠鸟文字422014.08.072024.08.061221412639翠鸟图形352014.08.072024.08.061221404040翠鸟图形382014.08.072024.08.061221407441翠鸟图形412014.08.072024.08.061221410042翠鸟图形422014.08.072024.08.061221413143信号小喇叭图形+CMEDIA412015.03.212025.03.201248043944LookLook图形382015.11.142025.11.131153342845LookLook图形422014.06.212024.06.201153372046LookLook文字382014.07.142024.07.131153406747LookLook文字422014.04.142024.04.131153422748L图形352014.02.282024.02.271153500249L图形382014.02.282024.02.271153507350L图形412014.02.282024.02.271153518151L图形422014.02.282024.02.271153526252箩筐图形412016.06.142026.06.131658022853箩筐图形422016.06.142026.06.131658022754箩筐文字422016.09.282026.09.271658024955箩筐文字412016.06.142026.06.131658025056箩筐文字352016.09.212026.09.201658025257箩筐文字92016.06.142026.06.131658025327NoTrademarkClassification NumberValid PeriodRegistration Number58箩筐图形382016.06.142026.06.131658022959箩筐图形352016.06.142026.06.131658023060箩筐图形92016.06.142026.06.131658023161微时光文字422016.09.282026.09.271658024762传游录屏文字92016.06.142026.06.131678214463传游录屏文字352016.06.142026.06.131678214364传游录屏文字382016.06.142026.06.131678214265传游录屏文字412016.06.142026.06.131678214166传游录屏文字422016.06.142026.06.131678214067录游器文字92016.06.142026.06.131678213568录游器文字352016.06.142026.06.131678213669录游器文字382016.06.142026.06.131678213770录游器文字412016.06.142026.06.131678213871录游器文字422016.06.142026.06.131678213972畅联TV文字412016.01.212026.01.201579246773畅联TV文字382016.01.212026.01.201579246874SuperEngine92016.01.212026.01.20812572275SuperEngine422016.01.212026.01.20812572876超擎9/422016.01.212026.01.201647320577SUPERENGINE9/422016.01.212026.01.2016473185*See below for an explanation of each classification number used in the table above.Classification No. 9: data processing apparatus, couplers (data processing equipment), computer software (recorded), monitors (computer programs), smartcards (integrated circuit cards), electrodynamic apparatus for the remote control of signals, alarms, and electric installations for the remote control of industrialoperations.Classification No. 35: auctioneering, sales promotion for others, marketing analysis, marketing research, importexport agencies, advisory services forbusiness management, business management for franchise, personnel management consultancy, relocation services for businesses, and systemization ofinformation into computer databases.Classification No. 38: Include services that enable at least sensory communication between two people. Such services include that allow one person to talkto another, send messages from one person to another, Make verbal or visual contact between one person and the other. This classification especially include theservice for broadcasting radio or television programs. Except for radio advertising services and telemarketing services.Classification No. 41: instruction services, teaching, education information, tuition, arranging and conducting of colloquiums, publication of electronicbooks and journals online, amusements, and vocational guidance.Classification No. 42: technical research, studies (technical project), computer software design, updating of computer software, recovery of computer data,computer systems analysis, installation of computer software, computer antivirus protection, and research and development for others. 28Business Certificates and QualificationsWe have obtained all necessary regulatory certifications to conduct our business in the PRC, including without limitation, the following: SoftwareEnterprise Recognition Certificate, Computer Information System Integration Qualification Certificate, Construction Enterprise Qualification Certificate, and SecurityTechnology & Protection Enterprise Certificate. We have also been properly certified as a hightech enterprise and have met the ISO 9001:2000 qualificationmanagement system.Legal ProceedingsAlthough we may, from time to time, be involved in litigation and claims arising out of our operations in the normal course of business, we do not believethat we are a party to any litigation that will have a material adverse impact on our financial condition or results of operations. To our knowledge, other than asdescribed below there are no material legal proceedings threatened against us. From time to time, we may be subject to various claims and legal actions arising in theordinary course of business. Following the consummation of the AEA, we became successor in interest to the legal proceedings described below.Litigation with Shanghai Fusheng Weier Intelligent Control Technology Co., Ltd.On January 22, 2016, Zhong Chuan Rui You and Shanghai Fusheng Weier Intelligent Control Technology Co., Ltd. (“Fusheng Weier”) signed a contract forequipment of $1,652,842 (RMB10,800,000). Since Zhong Chuan Rui You did not make the payments of $1,126,381 (RMB7,360,000) on the due dates, Fusheng Weierfiled a lawsuit against Zhong Chuan Rui You in Shanghai Xuhui District People's Court on October 8, 2016. On March 9, 2017, Xuhui District People's Court issuedthe verdict requiring Zhong Chuan Rui You to pay the overdue debts. In August 2017, C Media Limited made the payment of $512,075 (RMB3,346,000). Theremaining balance has been accrued in accounts payable. The payment schedule for the remaining balance is being negotiated by the two parties. On February 5,2018, a hearing was held adding Zhong Chuan Shi Xun as a defendant. The Group plans to settle the remaining balance within one year.Lawsuit with Gansu Jinlun Culture Media Co., Ltd.On August 22, 2014, Zhong Chuan Rui You and Gansu Jinlun Culture Media Co., Ltd. (“Gansu Jinlun”) signed a “Lanzhou Railway Bureau AirconditionedTrain WiFi Network System Advertising Operation Rights Agreement” for advertising on 72 trains of $1,467,880 (RMB9,604,633). Due to the dispute on theproject implementation, Zhong Chuan Rui You did not pay the advertising fee. On August 23, 2017, Gansu Jinlun filed a lawsuit with Gansu Intermediate People'sCourt. On December 19, 2017, Gansu Intermediate People's Court issued a verdict, ruling that Zhong Chuan Rui You settle the overdue advertising fee. Since only 18out of 72 trains have been installed with Wifi network system, Zhong Chuan Rui You disputed and appealed to the verdict. The next court trial date has not yet beendetermined.C Media and Gansu Jinlun are negotiating a potential settlement to resume the contract. According to the legal counsel, it is probable that the settlementwill amount to approximately $459,000 (RMB3,000,000); therefore, this amount has been accrued in accounts payable as at December 31, 2017.Litigation with Shenzhen Hua Xun Fang Zhou Technology Co., Ltd.On June 16, 2015, Zhong Chuan Rui You signed a cooperation agreement with Shenzhen Hua Xun Fang Zhou Technology Co., Ltd. (“Shenzhen Hua Xun”)and Xuesong Song, a major shareholder of C Media Limited. Pursuant to this agreement, Zhong Chuan Rui You procures equipment from Shenzhen Hua Xun.Xuesong Song acts as a joint liability guarantor for the entire debts of Zhong Chuan Rui You under this agreement. As Zhong Chuan Rui You did not make thepayments on the due dates, Shenzhen Hua Xun filed a lawsuit with Shenzhen Baoan District People's Court on May 31, 2016. On November 1, 2016, Zhong ChuanRui You, Xuesong Song and Shenzhen Hua Xun reached a settlement in Shenzhen Baoan District People's Court to settle $1,735,389 (RMB11,355,000) in fourinstalments. On December 30, 2017, the debt was assigned to C Media Limited.29C. ORGANIZATIONAL STRUCTUREThe following diagram illustrates our corporate structure and the place of formation and affiliation of each of our subsidiaries and affiliates as of September30, 2018.30The following diagram illustrates our corporate structure and the place of formation and affiliation of each of our subsidiaries and affiliates as of December31, 2017.Contractual Arrangements with Beijing Zhong Chuan Shi Xun Technology Limited’s Subsidiaries and Their Respective ShareholdersTo comply with the PRC legal restrictions on foreign ownership of companies that operate mobile application services, our subsidiaries operate in suchrestricted service areas in the PRC through certain PRC domestic companies, whose equity interests are held by certain management members or founders of the LKTechnology Ltd. Part of the registered capital of these PRC domestic companies was funded by certain management members or founders of LK Technology Ltd. LKTechnology Ltd., through its subsidiary Zhong Chuan Tian Xia Information and Technology (Shenzhen) Limited (the “WFOE”), has entered into an exclusivebusiness cooperation agreement with Beijing Zhong Chuan Shi Xun Technology Limited (“Zhong Chuan Shi Xun” or the “VIE”) the PRC domestic company, whichentitle the WFOE to receive a majority of profit of Zhong Chuan Shi Xun. In addition, Zhong Chuan Tian Xia Information and Technology (Shenzhen) Limited hasentered into certain agreements with those management members or founders, including equity interest pledge agreement of the equity interests held by thosemanagement members or founders and exclusive option agreement to acquire the equity interests in these companies when permitted by the PRC laws, rules andregulations. Details of the typical VIE structure of our significant consolidated VIE, primarily domestic companies associated with the operations such as ZhongChuan Shi Xun and its subsidiaries of Zhong Chuan Rui You, Huoerguosi Luokuang and Jiu Zhou Shi Dai, are set forth below: Exclusive Business Cooperation AgreementThe VIE has entered into an exclusive business services agreement with the WFOE, pursuant to which the WFOE provides exclusive business services tothe VIE. In exchange, the VIE pays a service fee to the WFOE which amounts to be no less than the 80% of the VIE’s aftertax profit, resulting in a transfer ofsubstantially all of the profits from the VIE to the WFOE.Exclusive Option AgreementThe VIE equity holders have granted the WFOE exclusive call options to purchase their equity interest in the VIE at an exercise price equal to the minimumprice as permitted by applicable PRC laws. The WFOE may nominate another entity or individual to purchase the equity interest, if applicable, under the call options.Each call option is exercisable subject to the condition that applicable PRC laws, rules and regulations do not prohibit completion of the transfer of the equityinterest pursuant to the call option. The VIE agrees not to distribute any dividends to the VIE equity holders without the approval of WFOE.31Equity Interest Pledge AgreementPursuant to the equity pledge agreement, the VIE equity holders have pledged all of their interests in the equity of the VIE as a continuing first prioritysecurity interest in favor of the WFOE to secure the performance of obligations by the VIEs and/or the equity holders under the exclusive business cooperationagreement. The WFOE is entitled to exercise its right to dispose of the VIE equity holders’ pledged interests in the equity of the VIE and has priority in receivingpayment by the application of proceeds from the auction or sale of such pledged interests, in the event of any breach or default under the exclusive businesscooperation agreement, if applicable. These equity pledge agreement remain in force until all the obligations under the exclusive business cooperation agreementhave been fulfilled.The exclusive business cooperation agreement and equity interest pledge agreement described above also enable the Company to receive substantially allof the economic benefits from the VIE by typically entitling the WFOE to all dividends and other distributions declared by the VIE and to any distributions orproceeds from the disposal by the VIE equity holders of their equity interests in the VIE.D. PROPERTY AND EQUIPMENTWe lease offices located at Lab 30 & Lab 32, SOHO 3Q, No 9, Guanghua Road, Chaoyang District, Beijing, which covers a floor space of 600 square meters.These leases expire at different times throughout 2018 and are renewable upon negotiation.ITEM 4A. UNRESOLVED STAFF COMMENTSNone.ITEM 5. OPERATING AND FINANCIAL REVIEW AND PROSPECTSA . OPERATING RESULTS.The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our consolidatedfinancial statements and the notes to those financial statements appearing elsewhere in this report. This discussion and analysis contains forwardlookingstatements that involve significant risks and uncertainties. As a result of many factors, such as our anticipated growth strategy, our plans to recruit moreemployees, our plans to invest in research and development to enhance our product or service lines, our future business development, results of operations andfinancial condition, expected changes in our net revenues and certain cost or expense items, our ability to attract and retain customers, trends and competitionin the enterprise mobile software application market, and the factors set forth elsewhere in this report, our actual results may differ materially from thoseanticipated in these forwardlooking statements. In light of those risks and uncertainties, there can be no assurance that the forwardlooking statementscontained in this report will in fact occur. You should not place undue reliance on the forwardlooking statements contained in this report.The forwardlooking statements speak only as of the date on which they are made, and, except to the extent required by U.S. federal securities laws, weundertake no obligation to update any forwardlooking statement to reflect events or circumstances after the date on which the statement is made or to reflectthe occurrence of unanticipated events. Further, the information about our intentions contained in this report is a statement of our intention as of the date of thisreport and is based upon, among other things, the existing regulatory environment, industry conditions, market conditions and prices and our assumptions as ofsuch date. We may change our intentions, at any time and without notice, based upon any changes in such factors, in our assumptions or otherwise.32Unless the context otherwise requires, all references to (i) “PRC” and “China” are to the People’s Republic of China; (ii) “U.S. dollar,” “$” and “US$”are to United States dollars; and (iii) “RMB”, “Yuan” and Renminbi are to the currency of the PRC or China.OverviewLuokung Technology was incorporated on October 27, 2009 under the laws of the British Virgin Islands. We are a holding company and conduct ouroperations through LK Technology Ltd., a British Virgin Islands limited liability company (“LK Technology”) and its whollyowned subsidiaries, MMB Limited andMobile Media (China) Limited and their respective subsidiaries and a contractuallycontrolled entity in the PRC named Beijing Zhong Chuan Shi Xun Technology,which hold the rights to deploy WiFi systems on about 700 trains in China, including 290 trains in which WiFi systems have already been installed and are inoperation. In May 2010, we consummated an initial public offering of our American Depository Shares, or ADSs, for gross proceeds of $16 million, and our ADSswere listed on the NASDAQ Capital Market under the ticker symbol “KONE”. Our ordinary shares are not currently listed on any trading market. Our AmericanDepository Shares (“ADSs”) were voluntarily delisted from the NASDAQ Capital Market on September 19, 2018. We have applied to NASDAQ for the listing of ourordinary shares on the NASDAQ Capital Market and received an approval for listing of Ordinary Shares on August 6, 2018, and as of the date of this transitionreport, that application and approval are currently under review.On August 17, 2018, we consummated an asset exchange transaction, pursuant to which we exchanged all issued and outstanding capital stock in TopskyInfoTech Holdings Pte Ltd., the parent of Softech, for the issued and outstanding capital stock of LK Technology (the “Asset Exchange”). In connection with theAsset Exchange, we changed our name on August 20, 2018, and on September 20, 2018, completed the issuance to the shareholders of C Media Limited, the formerparent of LK Technology, of (i) 185,412,599 of our ordinary shares, par value $0.01 per share and (ii) 1,000,000 of our preferred shares. Upon the consummation of theAsset Exchange, we ceased our previous business operations and became a company focused on the provision of WiFi and mobile application products for longdistance travelers in China.On August 25, 2018, LK Technology entered into a Stock Purchase Agreement (the “Agreement”) with the shareholders (“Shareholders”) of SuperengineHoldings Limited, a limited liability company organized under the laws of the British Virgin Islands (the “Superengine”), pursuant to which LK Technology acquiredall of the issued and outstanding capital stock of Superengine for an aggregate purchase price of US$60 million (the “Purchase Price”), which are paid by theissuance of our Ordinary Shares in an amount equal to the quotient of (x) the Purchase Price divided by (y) the average of the closing prices of the Ordinary Shareson the NASDAQ Capital Market over the 12 months period preceding July 31, 2018. We are a party to the Agreement in connection with the issuance of theOrdinary Shares and certain other limited purposes.Results of operations for the fiscal year ended December 31, 2017 compared to the fiscal year ended December 31, 2016.RevenueWe provide displaybased online advertising services to customers by integrating text description, image and video, and displaying the advertisements in aprominent position of LuoKuang Application. We recognize revenue in accordance with ASC 605, over the contractual term based on the agreements andconfirmation letters signed by both parties, commencing on the date the customer’s advertisement is displayed on our platform.For the year ended December 31, 2017, we had revenue of $26,082,417, as compared to revenue of $5,233,145 for the year ended December 31, 2016, anincrease of $20,849,272, or 398.4%, which was primarily due to the increase of our advertising clients.Cost of revenueOur cost of revenue primarily consists of depreciation, labor cost, WiFi equipment installation fees, data charges, annual payments to local railway bureau,other overhead costs.33Cost of revenue for the year ended December 31, 2017 was $5,547,779, representing a decrease of $767,725 or 12.2% as compared to $6,315,504 for the yearended December 31, 2016. The decrease was primarily attributable to the decrease in labor cost as a result of our cost control and a decrease in the number ofmaintenance staff. Additionally, data charges decreased as train passengers prefer using their mobile data, leading to a decrease in 3G and 4G data.Selling and marketing expenseOur selling and marketing expense mainly include promotional and marketing expenses and compensation for our sales and marketing personnel.Selling expense totaled $23,908,733 for the year ended December 31, 2017, as compared to $6,209,804 for the year ended December 31, 2016, an increase of$17,698,929 or 285.0%. The increase was primarily attributable to the increase in promotional and marketing activities conducted by the Company.General and administrative expenseOur general and administrative expenses consist primarily of salaries and benefits for our general and administrative personnel, rent, fees and expenses forlegal, accounting and other professional servicesGeneral and administrative expense totaled $2,451,249 for the year ended December 31, 2017, as compared to $2,108,854 for the year ended December 31,2016, an increase of $342,395 or 16.2%.Research and development expenses.Research and development expenses primarily consist of salaries and benefits for research and development personnel.Research and development expenses totaled $1,046,198 for the year ended December 31, 2017, as compared to $2,882,202 for the year ended December 31,2016, a decrease of $1,836,004 or 63.7%. The decrease was primarily attributable to the Company reduced its expenses in research and development temporarily asour products are quite stable at present.Loss from operationsAs a result of the factors described above, for the year ended December 31, 2017, loss from operations amounted to $6,871,542, as compared to loss fromoperations of $12,283,219 for the year ended December 31, 2016, a decrease of $5,411,677, or 44.1%.Other income/expenseOther income/expense mainly include interest income from bank deposits, foreign currency transaction gain, and loss from investment.Net lossAs a result of the factors described above, our net loss was $6,810,454 for the year ended December 31, 2017, compared to net loss of $13,049,031 for theyear ended December 31, 2016, a decrease of $6,238,577 or 47.8%.Foreign currency translation adjustmentOur reporting currency is the U.S. dollar. The functional currency of our parent company and subsidiaries of Merchant Supreme and Prime Cheer is the U.S.dollar and the functional currency of the Company’s subsidiaries incorporated in China is the Chinese Renminbi (“RMB”). The financial statements of oursubsidiaries incorporated in China are translated to U.S. dollars using period end rates of exchange for assets and liabilities, and average rates of exchange (for theperiod) for revenue, costs, and expenses. Net gains and losses resulting from foreign exchange transactions are included in the consolidated statements ofoperations and comprehensive loss. As a result of foreign currency translations, which are a noncash adjustment, we reported a foreign currency translation gain of$90,671 for the year ended December 31, 2017, as compared to a foreign currency translation loss of $387,375 for the year ended December 31, 2016. This noncashgain had the effect of increasing/decreasing our reported comprehensive income/loss.34Comprehensive lossAs a result of our foreign currency translation adjustment, we had comprehensive loss for the year ended December 31, 2017 of $6,719,783, compared tocomprehensive loss of $12,661,656 for the year ended December 31, 2016.B. LIQUIDITY AND CAPITAL RESOURCESThe information contained in “Item 5. Operating and Financial Review and Prospects – A. Operating Results – Liquidity and Capital Resources” isincorporated herein by reference.C. RESEARCH AND DEVELOPMENT, PATENTS AND LICENSES, ETC.The discussions of our research and development activities were contained in “Item 4. Information about our Company – B. Business Overview –Research and Development” and “Item 5. Operating and Financial Review and Prospects – A. Operating Results – Operating Expenses – Research and DevelopmentExpenses” are incorporated herein by reference. In the years ended December 31, 2017 and 2016, we spent $1,046,198 and $2,882,202, respectively, on research anddevelopment activities.D. TREND INFORMATION.Industry and Market OutlookChina has awarded licenses to mobile phone companies to provide the superfast 4G network to customers. The licenses, which are designed to give mobilephone users faster access to services, were granted by the government to China Mobile, China Unicom Hong Kong and China Telecom. Since the grants, ChinaMobile has offered 4G to subscribers from December 18, 2013. China Unicom and China Telecom, the country's other two major carriers, also offer 4G wireless. Thenumber of China Mobile 4G customers has exceeded 900 million by the end of October in 2017. The move greatly bolstered business for telecom equipment makersand a range of other companies.Under China’s 12th FiveYear Plan, a key priority is for China to transition from “Made in China” to “Designed in China.” In order to achieve this goal, thegovernment plans to heavily invest in science and technology education and R&D so as to further develop China’s intellectual property rights system and support“NextGeneration IT” as a Strategic Emerging Industry (SEI). Additionally, China plans to upgrade the technological capabilities of private and public services,including “triple play” services (the convergence of telecom, broadcasting and Internet networks), ecommerce, and egovernment and statistics systems.Furthermore, the government plans to invest in R&D of the "Internet of things" and cloud computing, and develop digital and virtual technologies.E. OFFBALANCE SHEET ARRANGEMENTSWe have not entered into any financial guarantees or other commitments to guarantee the payment obligations of any third parties. We have not enteredinto any derivative contracts that are indexed to our shares and classified as shareholder’s equity, or that are not reflected in our consolidated financial statements.Furthermore, except for the mortgage referenced above, we do not have any retained or contingent interest in assets transferred to an unconsolidated entity thatserves as credit, liquidity or market risk support to such entity. We do not have any variable interest in any unconsolidated entity that provides financing, liquidity,market risk or credit support to us or engages in leasing, hedging or research and development services with us.35F. TABULAR DISCLOSURE OF CONTRACTUAL OBLIGATIONSAs of December 31, 2017, we did not have any contractual obligations required to be disclosed in this Item 5.F. ITEM 6. DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES.A. DIRECTORS AND SENIOR MANAGEMENT.Executive Officers and DirectorsThe following table sets forth the names and ages as of the date of this transition report of each of our executive officers and directors:NameAgePositionXuesong Song50Chief Executive Officer, Chairman and DirectorDongpu Zhang50PresidentJie Yu34Chief Financial OfficerKegang Peng46Vice President and DirectorChuang Tao51DirectorDennis Galgano (1)(2)69Director (Independent)Jin Shi (1)(2)49Director (Independent)Jiming Ha (1)(3)56Director (Independent)Zhihao Xu (3)42Director (Independent)(1)Member of the Audit Committee.(2)Member of the Compensation Committee.(3)Member of the Nominating and Corporate Governance Committee.Set forth below is biographical information concerning our executive officers and directors.Xuesong Song is a cofounder of C Media Limited and served as its chairman of the board of directors and chief executive officer from 2012 until theconsummation of the AEA. From February 2014 through April 2017, Mr. Song served as a director of Seven Stars Cloud Group, Inc. (NASDAQ: SSC) and fromJanuary 2013 through February 2015, Mr. Song served as a director of Pingtan Marine Enterprise Ltd. (NASDAQ: PME). From May 2006 through January 2009, Mr.Song served as the Chairman of the Board of ChinaGrowth North Acquisition Corporation, a special purpose acquisition company, which acquired UIB GroupLimited in January 2009, in which he remains a director. Mr. Song has been a principal of Chum Capital Group Limited since August 2001, a merchant banking firmthat invests in growth Chinese companies and advises them in financings, mergers & acquisitions and restructurings, and chief executive officer of Beijing ChumInvestment Co., Ltd. since December 2001. Mr. Song has been a director of Mobile Vision Communication Ltd. since July 2004. Mr. Song received a Master’s ofBusiness Administration degree from Oklahoma City/Tianjin Program.Dongpu Zhang was appointed as the President of the Company effective on August 25, 2018. Mr. Dongpu Zhang has served as the General Manager ofSuperEngine Graphics Software Technology Development (Suzhou) Co., Ltd. (“SuperEngine Suzou”) and the Chief Executive Officer of SuperEngine HoldingLimited since September 2016. From February, 2014 to August, 2016, Mr. Zhang served as vice president of Industrial Development Group under China Fortune LandDevelopment Co., Ltd. From March, 2009 to February, 2014, Mr. Zhang served as the vice president of Aerospace Science and Technology Holding Group Co., Ltd.Mr. Zhang receive his Master Degree of Computer Science from Harbin Institute of Technology in 1994 and his Bachelor Degree of information system fromChangsha Institute of technology in 1991.Jie Yu served as the chief financial officer of C Media Limited from January 2018 until the consummation of the asset exchange transactions. From June 2016to January 2018, Mr. Yu served as chief financial officer and secretary of the board of directors of MTI Environment Group Limited. Prior to joining MTI, Mr. Yuserved as the senior manager at DA HUA CPA from November 2012 to May 2016. Previously, Mr. Yu served as the manager at Crowe Horwath (Hong Kong) CPA.Mr. Yu holds a bachelor degree in accounting and finance from University of Auckland and postgraduate diploma in accounting from University of Auckland.36Kegang Peng served as the Vice Chairman of the board of directors C Media Limited from October 2014 to the consummation of the asset exchangetransactions, and is now a member of the Company’s board of directors. Previously, from 2012 to 2014, Mr. Peng was chairman of the board and founder of JiangsuSuqian Jinghaiboyuan Information and Technology Co., Ltd. Mr. Peng studied at Beijing University of Aeronautics and Astronautics majoring computer andapplication.20F 1 f20f2017_luokungtech.htm AMENDMENT NO. 1 TO FORM 20FUNITED STATESSECURITIES AND EXCHANGE COMMISSIONWASHINGTON, D.C. 20549FORM 20F☐ REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934OR☐ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934For the Fiscal year ended _____________OR☒ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934For the transition period from October 1, 2017 to December 31, 2017☐ SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934Date of event requiring this shell company report Commission file number: 00134738Luokung Technology Corp.(Exact name of Registrant as specified in its charter)Not applicable(Translation of Registrant’s name into English)British Virgin IslandsLAB 32, SOHO 3Q, No 9, Guanghua Road, Chaoyang District, BeijingPeople’s Republic of China, 100020(Jurisdiction of incorporation or organization)(Address of principal executive offices)Mr. Muqiao GengLAB32, SOHO 3Q, No 9, Guanghua Road, Chaoyang District, BeijingPeople’s Republic of China 100020Tel: (86) 1085866721(Name, telephone, Email and/or facsimile number and address of company contact person)Securities registered or to be registered pursuant to Section 12(b) of the Act:Title of each className of each exchange on which registeredOrdinary shares, par value $0.01 per shareNonePreferred shares, par value $0.01 per shareNoneSecurities registered or to be registered pursuant to Section 12(g) of the Act:none(Title of Class)Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act:none(Title of Class)Indicate the number of outstanding shares of each of the issuer’s classes of capital or common stock as of the close of the period covered by the transitionreport. 187,097,599 Ordinary Shares, including 186,383,224 Ordinary Shares represented by 714,375 American Depositary Shares, and 1,000,000 Preferred Sharesoutstanding as of September 20, 2018.Indicate by check mark if the registrant is a wellknown seasoned issuer, as defined in Rule 405 of the Securities Act. ☐ Yes ☒ NoIf this report is an annual or transition report, indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of theSecurities Exchange Act of 1934. ☐ Yes ☒ NoIndicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirementsfor the past 90 days. ☒ Yes ☐ NoIndicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File requiredto be submitted and posted pursuant to Rule 405 of Regulation ST (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that theregistrant was required to submit and post such files). ☒ Yes ☐ NoIndicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a nonaccelerated filer. See definition of “accelerated filer andlarge accelerated filer” in Rule 12b2 of the Exchange Act. (Check one):Large accelerated filer ☐ Accelerated filer ☐ Nonaccelerated filer ☒Indicate by check mark which basis of accounting the registrant has used to prepare the financial statements included in this filing.U.S. GAAP ☒International Financial Reporting Standards as issuedby the International Accounting Standards Board ☐Other ☐If “Other” has been checked in response to the previous question, indicate by check mark which financial statement item the registrant has elected tofollow. Item 17 ☐ Item 18 ☐If this is an transition report, indicate by check mark whether the registrant is a shell company (as defined in Rule 12b2 of the ExchangeAct). ☐ Yes ☒ NoExplanatory NoteLuokung Technology Corp. (the “Company”) is filing this transition report on Form 20F (“Transition Report”) in connection with the completion of theexchange of certain of its assets for substantially all of the assets of C Media Limited (“C Media”) pursuant to that Asset Exchange Agreement, dated January 25,2018 (the “Original AEA”), as supplemented by the Addendum to Asset Exchange Agreement, dated October 3, 2018 (the “Addendum” and together with theOriginal AEA, the “AEA”). Following the consummation of the AEA, on October 4, 2018, the Company changed its fiscal year end from September 30 to the fiscalyear end used by C Media, December 31. This Transition Report covers the threemonth period from Octorber 1, 2017 to December 31, 2017, and the fiscal yearsdescribed herein.In this transition report:●References to the “Company”, “we”, “our” and “us” are to Luokung Technology Corp. and its consolidated subsidiaries and variable interestentity, except as the context otherwise requires;●This transition report on Form 20F covers the threemonth period from October 1, 2017 through December 31, 2017 (the “Transition Period”) andreflects our financial results thereof. Prior to this transition report on Form 20F, our two most recent annual reports on Form 20F cover the fiscalyears ended September 30, 2017 and September 30, 2016, respectively, and reflect financial results for the respective twelvemonth periods fromOctober 1 to September 30. Unless otherwise noted, all references to years are to the calendar year from January 1 to December 31 and referencesto our fiscal year or years are to the fiscal year or years which, prior to the Transition Period, ended September 30, while from and after theTransition Period, ended December 31;●References to an “ADS” are to an American Depositary Share, each of which represents one of our Ordinary Shares with a par value of $.01 pershare.Special Note Regarding Forwardlooking StatementsThis transition report contains forwardlooking statements that involve risks and uncertainties. These statements involve known and unknown risks,uncertainties and other factors that may cause our actual results, performance or achievements to be materially different from those expressed or implied by theforwardlooking statements.You can identify these forwardlooking statements by words or phrases such as “may,” “will,” “expect,” “anticipate,” “aim,” “estimate,” “intend,” “plan,”“believe,” “likely to” or other similar expressions. We have based these forwardlooking statements largely on our current expectations and projections about futureevents and financial trends that we believe may affect our financial condition, results of operations, business strategy and financial needs. You should not placeundue reliance on these forwardlooking statements, which apply only as of the date of this transition report. These forwardlooking statements include:●our future business development, results of operations and financial condition;●expected changes in our net revenues and certain cost or expense items;●our ability to attract and retain customers; and●trends and competition in the enterprise mobile software application market.You should read this transition report thoroughly with the understanding that our actual future results may be materially different from, and/or worse, thanwhat we expect. We qualify all of our forwardlooking statements by these cautionary statements. Other sections of this transition report include additional factorswhich could adversely impact our business and financial performance. Moreover, we operate in an evolving environment. New risk factors and uncertainties emergefrom time to time and it is not possible for our management to predict all risk factors and uncertainties, nor can we assess the impact of all factors on our business orthe extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forwardlooking statements.This transition report also contains estimates, projections and statistical data related to the market for the provision of WiFi and mobile applications inChina. This market data, including data from IDC, a leading provider of market data and intelligence, speaks as of the date it was published and includes projectionsthat are based on a number of assumptions and are not representations of fact. The market for the provision of WiFi and mobile applications in China may not growat the rates projected by the market data, or at all. The failure of the market to grow at the projected rates may materially and adversely affect our business and themarket price of our ADSs. In addition, the rapidly changing nature of the market for the provision of WiFi and mobile applications subjects any projections orestimates relating to the growth prospects or future condition of our market to significant uncertainties. If any one or more of the assumptions underlying the marketdata proves to be incorrect, actual results may differ from the projections based on these assumptions.You should not rely upon forwardlooking statements as predictions of future events. We undertake no obligation to update or revise any forwardlookingstatements, whether as a result of new information, future events or otherwise.TABLE OF CONTENTSPart IItem 1.Identity of Directors, Senior Management and Advisers.1Item 2.Offer Statistics and Expected Timetable.1Item 3.Key Information.1A.Selected Financial Data.1B.Capitalization and Indebtedness.3C.Reasons for the Offer and Use of Proceeds.3D.Risk Factors.3Item 4.Information on the Company.19A.History and Development of the Company.19B.Business Overview.20C.Organizational Structure.30D.Property, Plants and Equipment.32Item 4A.Unresolved Staff Comments.32Item 5.Operating and Financial Review and Prospects.32A.Operating Results.32B.Liquidity and Capital Resources.35C.Research and Development, Patents and Licenses, etc.35D.Trend Information.35E.Offbalance Sheet Arrangements.35F.Tabular Disclosure of Contractual Obligations.36Item 6.Directors, Senior Management and Employees.36A.Directors and Senior Management.36B.Compensation.37C.Board Practices.40D.Employees.43E.Share Ownership.43Item 7.Major Shareholders and Related Party Transactions.44A.Major Shareholders.44B.Related Party Transactions.45C.Interests of Experts and Counsel.45Item 8.Financial Information.45A.Consolidated Statements and Other Financial Information.45B.Significant Changes.46Item 9.The Offer and Listing.46A.Offer and Listing Details.46B.Plan of Distribution.47C.Markets.47D.Selling shareholders.48E.Dilution.48F.Expenses of the issue.48Item 10.Additional Information.48A.Share Capital.48B.Memorandum and Articles of Association.48C.Material Contracts.53D.Exchange Controls.54E.Taxation.61F.Dividends and Paying Agents.67G.Statement by Experts.67H.Documents on Display.67I.Subsidiary Information.68Item 11.Quantitative and Qualitative Disclosures about Market Risk.68Item 12.Description of Securities Other than Equity Securities.69A.Debt Securities.69B.Warrants and Rights.69C.Other Securities.69D.American Depositary Shares.69iPart IIItem 13.Defaults, Dividend Arrearages and Delinquencies.71Item 14.Material Modifications to the Rights of Security Holders and Use of Proceeds.71Item 15.Controls and Procedures.71Item 16.[Reserved.]72Item 16A.Audit Committee Financial Expert.72Item 16B.Code of Ethics.73Item 16C.Principal Accountant Fees and Services.73Item 16D.Exemptions from the Listing Standards for Audit Committees.73Item 16E.Purchases of Equity Securities by the Issuer and Affiliated Purchasers.73Item 16F.Change in Registrant’s Certifying Accountant.73Item 16G.Corporate Governance.73Item 16H.Mine Safety Disclosure.73Part IIIItem 17.Financial Statements.74Item 18.Financial Statements.74Item 19.Exhibits.74Index to Consolidated Financial StatementsF1iiPART IITEM 1. IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS.The directors of Luokung Technology Corp. are Xuesong Song, Kegang Peng, Dennis Galgano, Jin Shi, Jiming Ha, Zhihao Xu and Chuang Tao. Thebusiness address for our directors is LAB 32, SOHO 3Q, No 9, Guanghua Road, Chaoyang District, Beijing, People’s Republic of China.Moore Stephens CPA Limited has served as our auditor since October 5, 2018, and is located at 801806 Silvercord Tower 1, 30 Canton road, Tsimshatsui,Kowloon, Hong Kong. BDO China Shun Lun Pan Certified Public Accountants LLP served as our auditors for the last three years, and are located at 4F, No. 61Nanjing Road, Shanghai, People’s Republic of China.Garvey Schubert Barer, P.C., serves as our legal counsel in the United States, and is located at Flour Mill Building, 1000 Potomac Street NW, Suite 200,Washington, D.C., 200073501.Conyers Dill & Pearlman serves as our legal counsel with regard to the laws of the British Virgin Islands, and is located at 29th Floor, One Exchange Square,8 Connaught Place, Central, Hong Kong.ITEM 2. OFFER STATISTICS AND EXPECTED TIMETABLE.Not applicable.ITEM 3. KEY INFORMATION.A. SELECTED FINANCIAL DATA.Luokung Technology Corp. and its consolidated subsidiaries (“Luokung Technology”, “we”, “us”, or “the Company”) consummated an asset exchangeagreement pursuant to which we exchanged our existing assets with those of C Media Limited (the “Asset Exchange”) on August 17, 2018, and we changed ourname from Kingtone Wirelessinfo Solution Holding Ltd. to our current name on August 20, 2018. On October 4, 2018, in connection with the consummation of the Asset Exchange, we changed our fiscal year end from September 30 to December 31.1The selected financial data for the fiscal years ended December 31 2017 and 2016 have been derived from our audited consolidated and combined financialstatements. The selected consolidated and combined financial data should be read in conjunction with our audited financial statements and the accompanying notesand “Item 5 – Operating and Financial Review and Prospects.” Our consolidated and combined financial statements are prepared and presented in accordance withUnited States generally accepted accounting principles, or U.S. GAAP. Our historical results do not necessarily indicate our results expected for any future periods.You should not view our historical results as an indicator of our future performance.LK TECHNOLOGY LTD. AND SUBSIDIARIESSELECTED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS(IN U.S. DOLLARS)For the years ended December 31,20172016Revenues$26,082,417$5,233,145Less: Cost of revenues5,547,7796,315,504Less: Operating expenses:Selling and marketing23,908,7336,209,804General and administrative2,451,2492,108,854Research and development1,046,1982,882,202Total operating expenses27,406,18011,200,860Loss from operations(6,871,542)(12,283,219)Other income (expense):Interest expense(26,611)(4,412)Foreign exchange gains(losses)350,679(298,257)Loss from investment(428,571)Other income (expense), net(262,980)(34,572)Total other income (expense), net61,088(765,812)Loss before income taxes(6,810,454)(13,049,031)Income taxesNet loss$(6,810,454)$(13,049,031)Other comprehensive income:Foreign currency translation adjustment90,671387,375Total comprehensive loss$(6,719,783)$(12,661,656)2LK TECHNOLOGY LTD. AND SUBSIDIARIESSELECTED CONSOLIDATED BALANCE SHEETS(IN U.S. DOLLARS)As of December 31,20172016Accounts receivable, net of allowance for doubtful accounts9,729,6251,865,836Amounts due from related parties11,760,692Property and equipment, net5,044,8727,771,027Goodwill7,239,9367,239,936TOTAL ASSETS37,582,85821,114,832Accounts payable8,784,5186,446,584Accrued liabilities and other payables12,962,91211,329,613Total liabilities25,311,11333,905,520Total Shareholder’s Equity (Deficit)12,271,745(12,790,688)TOTAL LIABILITIES AND SHAREHOLDER’S EQUITY (DEFICIT)37,582,85821,114,832B. CAPITALIZATION AND INDEBTEDNESS.Not applicable.C. REASONS FOR THE OFFER AND USE OF PROCEEDS.Not applicable.D. RISK FACTORS.An investment in our ADSs and ordinary shares involves a high degree of risk. You should carefully consider the risks and uncertainties described belowtogether with all other information contained in this transition report, including the matters discussed under “Special Note Regarding ForwardLooking Statements,”before you decide to invest in our ADSs or ordinary shares. You should pay particular attention to the fact that we are a holding company with substantialoperations in China and are subject to legal and regulatory environments that in many respects differ from those of the United States. If any of the following risks, orany other risks and uncertainties that are not presently foreseeable to us, actually occur, our business, financial condition, results of operations, liquidity and ourfuture growth prospects would be materially and adversely affected. You should also consider all other information contained in this transition report beforedeciding to invest in our ADSs or ordinary shares.Risks Related to Our Company and Our IndustryThe Company had incurred negative cash flows from operating activities and net losses as of December 31, 2017. These matters raise substantial doubt aboutthe Company’s ability to continue as a going concern.The Company’s consolidated financial statements are prepared using generally accepted accounting principles in the United States of America applicableto a going concern, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. As of and for the year endedDecember 31, 2017, the Company had incurred significant operating losses and working capital deficit. The ability of the Company to continue as a going concern isdependent on the Company obtaining adequate capital to fund operating losses until it becomes profitable. If the Company is unable to obtain adequate capital, itcould be forced to cease operations. The accompanying consolidated financial statements do not include any adjustments that might be necessary if the Companyis unable to continue as a going concern.3We may undertake acquisitions, investments, joint ventures or other strategic alliances, which could have a material adverse effect on our ability to manageour business. In addition, such undertakings may not be successful.Our strategy includes plans to grow both organically and through acquisitions, participation in joint ventures or other strategic alliances. Joint venturesand strategic alliances may expose us to new operational, regulatory and market risks, as well as risks associated with additional capital requirements. We may not beable, however, to identify suitable future acquisition candidates or alliance partners. Even if we identify suitable candidates or partners, we may be unable tocomplete an acquisition or alliance on terms commercially acceptable to us. If we fail to identify appropriate candidates or partners, or complete desired acquisitions,we may not be able to implement our strategies effectively or efficiently. In addition, our ability to successfully integrate acquired companies and their operations may be adversely affected by several factors. These factorsinclude:1.diversion of management’s attention;2.difficulties in retaining customers of the acquired companies;3.difficulties in retaining personnel of the acquired companies;4.entry into unfamiliar markets;5.unanticipated problems or legal liabilities; and6.tax and accounting issues.If we fail to integrate acquired companies efficiently, our earnings, revenue growth and business could be negatively affected.Due to intense competition for highlyskilled personnel, we may fail to attract and retain enough sufficiently trained employees to support our operations; ourability to bid for and obtain new projects may be negatively affected and our revenues could decline as a result.The IT industry relies on skilled employees, and our success depends to a significant extent on our ability to attract, hire, train and retain qualifiedemployees. There is significant competition in China for professionals with the skills necessary to develop the products and perform the services we offer to ourcustomers. Increased competition for these professionals, in the mobile application design area or otherwise, could have an adverse effect on us if we experiencesignificant increase in the attrition rate among employees with specialized skills, which could decrease our operating efficiency and productivity and could lead to adecline in demand for our services.In addition, our ability to serve existing customers and business partners and obtain new business will depend, in large part, on our ability to attract, trainand retain skilled personnel that enable us to keep pace with growing demands for wifi connectivity and mobile applications, evolving industry standards andchanging customer preferences. Our failure to attract, train and retain personnel with the qualifications necessary to fulfill the needs of our existing and futurecustomers or to assimilate new employees successfully could have a material adverse effect on our business, financial condition and results of operations. Ourfailure to retain our key personnel on business development or find suitable replacements of the key personnel upon their departure may lead to shrinking newimplementation projects, which could materially adversely affect our business.4Our business depends substantially on the continuing efforts of our senior executives and other key personnel, and our business may be severely disrupted if welose their services.Our future success heavily depends upon the continued services of our senior executives and other key employees, particularly since we recentlyappointed a new chairman. We are reliant on the services of Mr. Xuesong Song, our chairman, chief executive officer and member of our board of directors. If one ormore of our senior executives or key employees is unable or unwilling to continue in his or her present position, we may not be able to replace such employee easily,or at all, we may incur additional expenses to recruit, train and retain replacement personnel, our business may be severely disrupted, and our financial condition andresults of operations may be materially adversely affected.Our business could suffer if our executives and directors compete against us and our noncompetition agreements with them cannot be enforced.If any of our senior executives or key employees joins a competitor or forms a competing company, we may lose customers, knowhow and keyprofessionals and staff members to them. Also, if any of our business development managers who keep a close relationship with our customers and businesspartners joins a competitor or forms a competing company, we may lose customers, and our revenues may be materially adversely affected. Most of our executiveshave entered, or will soon enter, into employment agreements with us that contain or will contain noncompetition provisions. However, if any dispute arisesbetween our executive officers and us, such noncompetition provisions may not be enforceable, especially in China, where all of these executive officers and keyemployees reside, in light of the uncertainties with China’s legal system. See “Risk Factors — Risks Related to Doing Business in China — Uncertainties withrespect to the PRC legal system could adversely affect us.”Our computer networks may be vulnerable to security risks that could disrupt our services and adversely affect our results of operations.Our computer networks may be vulnerable to unauthorized access, computer hackers, computer viruses and other security problems caused byunauthorized access to, or improper use of, systems by third parties or employees. A hacker who circumvents security measures could misappropriate proprietaryinformation or cause interruptions or malfunctions in operations. Computer attacks or disruptions may jeopardize the security of information stored in andtransmitted through computer systems and mobile devices of our customers. Actual or perceived concerns that our systems may be vulnerable to such attacks ordisruptions may deter customers from using our services. As a result, we may be required to expend significant resources to protect against the threat of thesesecurity breaches or to alleviate problems caused by these breaches, which could adversely affect our results of operations.If we do not continually enhance our solutions and service offerings, we may have difficulty in retaining existing customers and attracting new customers.We believe that our future success will depend, to a significant extent, upon our ability to enhance our existing applications and platform, and to introducenew features to meet the preferences and requirements of our customers in a rapidly developing and evolving market. Unexpected technical, operational, distributionor other problems could delay or prevent the introduction of one or more of these products or services, or any products or services that we may plan to introduce inthe future. Our present or future products may not satisfy the evolving preferences and tastes of our customers, and these solutions and services may not achieveanticipated market acceptance or generate incremental revenue. If we are unable to anticipate or respond adequately to the need for service or productenhancements due to resource, technological or other constraints, our business, financial condition and results of operations could be materially and adverselyaffected.5If we are unable to develop competitive new products and service offerings our future results of operations could be adversely affected.Our future revenue stream depends to a large degree on our ability to utilize our technology in a way that will allow us to offer new types of mobileapplications and services to a broader customer base. We will be required to make investments in research and development in order to continually develop newsoftware applications and related service offerings, enhance our existing platform, mobile applications and related service offerings and achieve market acceptanceof our mobile applications and service offerings. We may incur problems in the future in innovating and introducing new mobile applications and service offerings.Our developmentstage mobile applications may not be successfully completed or, if developed, may not achieve significant customer acceptance. If we are unableto successfully define, develop and introduce competitive new mobile applications, and enhance existing mobile applications, our future results of operations wouldbe adversely affected. The timely availability of new applications and their acceptance by customers are important to our future success. A delay in the developmentof new applications could have a significant impact on its results of operations.Changes in technology could adversely affect our business by increasing our costs, reducing our profit margins and causing a decline in our competitiveness.China’s wireless telecom industry, in which we operate, is characterized by rapidly changing technology, evolving industry standards, frequentintroductions of new services and solutions and enhancements as well as changing customer demands. New solutions and new technologies often render existingsolutions and services obsolete, excessively costly or otherwise unmarketable. As a result, our success depends on our ability to adapt to the latest technologicalprogress, such as the 5G standard and technologies, and to develop or acquire and integrate new technologies into our platform, mobile applications and relatedservices. Advances in technology also require us to commit substantial resources to developing or acquiring and then deploying new technologies for use in ouroperations. We must continuously train personnel in new technologies and in how to integrate existing hardware and software systems with these newtechnologies. We may not be able to adapt quickly to new technologies or commit sufficient resources to compete successfully against existing or new competitorsin bringing to market solutions and services that incorporate these new technologies. We may incur problems in the future in innovating and introducing new mobileapplications and service offerings. Our development of new mobile applications and platform enhancements may not be successfully completed or, if developed,may not achieve significant customer acceptance. If we fail to adapt to changes in technologies and compete successfully against established or new competitors,our business, financial condition and results of operations could be adversely affected.Problems with the quality or performance of our hardware, software or other systems may cause delays in the introduction of new solutions or result in the lossof customers and revenues, which could have a material and adverse effect on our business, financial condition and results of operations.Our hardware and software systems are complex and may contain defects, errors or bugs when first introduced to the market or to a particular customer, oras new versions are released. Because we cannot test for all possible scenarios, our systems may contain errors that are not discovered until after they have beeninstalled or implemented, and we may not be able to timely correct these problems. These defects, errors or bugs could interrupt or delay the completion of projectsor sales to our customers. In addition, our reputation may be damaged and we may fail to acquire new projects from existing customers or new customers. Errors mayoccur when we provide systems integration and maintenance services. Even in cases where we have agreements with our customers that contain provisionsdesigned to limit our exposure to potential claims and liabilities arising from customer problems, these provisions may not effectively protect us against such claimsin all cases and in all jurisdictions. In addition, as a result of business and other considerations, we may undertake to compensate our customers for damages arisingfrom the use of our solutions, even if our liability is limited by these provisions. Moreover, claims and liabilities arising from customer problems could also result inadverse publicity and materially and adversely affect our business, results of operations and financial condition. We currently do not carry any product or serviceliability insurance and any imposition of liability on us may materially and adversely affect our business and increase our costs, resulting in reduced revenues andprofitability.Our products may contain undetected software defects, which could negatively affect our revenues.Our software products are complex and may contain undetected defects. Although we test our products, it is possible that errors may be found or occur inour new or existing products after we have commenced commercial shipment of those products. Defects, whether actual or perceived, could result in adversepublicity, loss of revenues, product returns, a delay in market acceptance of our products, loss of competitive position or claims against us by customers. Any suchproblems could be costly to remedy and could cause interruptions, delays, or cessation of our product sales, which could cause us to lose existing or prospectivecustomers and could negatively affect our results of operations.6We may be subject to infringement, misappropriation and indemnity claims in the future, which may cause us to incur significant expenses, pay substantialdamages and be prevented from providing our services or technologies.Our success depends, in part, on our ability to carry out our business without infringing the intellectual property rights of third parties. Patent andcopyright law covering softwarerelated technologies is evolving rapidly and is subject to a great deal of uncertainty. Our selfdeveloped or licensed technologies,processes or methods may be covered by thirdparty patents or copyrights, either now existing or to be issued in the future. Any potential litigation may cause us toincur significant expenses. Thirdparty claims, if successfully asserted against us may cause us to pay substantial damages, seek licenses from third parties, payongoing royalties, redesign our services or technologies, or prevent us from providing services or technologies subject to these claims. Even if we were to prevail,any litigation would likely be costly and timeconsuming and divert the attention of our management and key personnel from our business operations.Our failure to protect our intellectual property rights may undermine our competitive position, and subject us to costly litigation to protect our intellectualproperty rights.Any misappropriation of our technology or the development of competitive technology could seriously harm our business. We regard a substantial portionof our hardware and software systems as proprietary and rely on statutory copyright, trademark, patent, trade secret laws, customer license agreements, employeeand thirdparty nondisclosure agreements and other methods to protect our proprietary rights. Nevertheless, these resources afford only limited protection and theactions we take to protect our intellectual property rights may not be adequate. In particular, third parties may infringe or misappropriate our proprietarytechnologies or other intellectual property rights, which could have a material adverse effect on our business, financial condition and results of operations. Inaddition, intellectual property rights and confidentiality protection in China may not be as effective as in the United States, and policing unauthorized use ofproprietary technology can be difficult and expensive. Further, litigation may be necessary to enforce our intellectual property rights, protect our trade secrets ordetermine the validity and scope of the proprietary rights of others. The outcome of any such litigation may not be in our favor. Any such litigation may be costlyand may divert management attention, as well as our other resources, away from our business. An adverse determination in any such litigation will impair ourintellectual property rights and may harm our business, prospects and reputation. In addition, we have no insurance coverage against litigation costs and wouldhave to bear all litigation costs in excess of the amount recoverable from other parties. The occurrence of any of the foregoing could have a material adverse effecton our business, financial condition and results of operations. Our solutions incorporate a portion of, and work in conjunction with, thirdparty hardware and software solutions. If these thirdparty hardware or softwaresolutions are not available to us at reasonable costs, or at all, our results of operations could be adversely impacted.Although our hardware and software systems and mobile applications primarily rely on our own core technologies, some elements of our systemsincorporate a small portion of thirdparty hardware and software solutions. If any third party were to discontinue making their intellectual property available to us orour customers on a timely basis, or increase materially the cost of their licensing such intellectual property, or if our systems or applications failed to properlyfunction or interoperate with replacement intellectual property, we may need to incur costs in finding replacement thirdparty solutions and/or redesigning oursystems or applications to replace or function with or on replacement thirdparty proprietary technology. Replacement technology may not be available on termsacceptable to us or at all, and we may be unable to develop alternative solutions or redesign our systems or applications on a timely basis or at a reasonable cost. Ifany of these were to occur, our results of operations could be adversely impacted.7Our ability to sell our products is highly dependent on the quality of our service and support offerings, and our failure to offer high quality service could have amaterial adverse effect on our ability to market and sell our products.Our customers depend upon our customer service and support staff to resolve issues relating to our products. Highquality support services are critical forthe successful marketing and sale of our products. If we fail to provide highquality support on an ongoing basis, our customers may react negatively and we maybe materially and adversely affected in our ability to sell additional products to these customers. This could also damage our reputation and prospects with potentialcustomers. Our failure to maintain highquality support services could have a material and adverse effect on our business, results of operations and financialcondition.Weaknesses in our internal controls over financial reporting or disclosure controls and procedures may have a material adverse effect on our business, theprice of our ordinary shares, operating results and financial condition.We are required to establish and maintain appropriate internal controls over financial reporting and disclosure controls and procedures. Pursuant to Section404 of the SarbanesOxley Act of 2002 and the related rules adopted by the Securities and Exchange Commission, every public company is required to include amanagement report on its internal controls over financial reporting in its transition report, which contains management’s assessment of the effectiveness of thecompany’s internal controls over financial reporting. This requirement first applied to our annual report on Form 20F for the fiscal year ended on September 30,2011. In connection with our assessments of our disclosure controls and procedures and internal controls over financial reporting, management concluded that as ofSeptember 30, 2018, our disclosure controls and procedures and our internal controls over financial reporting were not effective due to lack of U.S. generallyaccepted accounting principles (“U.S. GAAP”) expertise in our current accounting team. Please refer to the discussion under Item 15, “Controls and Procedures” forfurther discussion of our material weakness as of December 31, 2017. Should we be unable to remediate the material weakness promptly and effectively, suchweakness could harm our operating results, result in a material misstatement of our financial statements, cause us to fail to meet our financial reporting obligations orprevent us from providing reliable and accurate financial reports or avoiding or detecting fraud. This, in turn, could result in a loss of investor confidence in theaccuracy and completeness of our financial reports, which could have an adverse effect on the trading price of our ordinary shares. Any litigation or otherproceeding or adverse publicity relating to the material weaknesses could have a material adverse effect on our business and operating results. We have very limited insurance coverage which could expose us to significant costs and business disruption.We do not maintain any insurance coverage for our leased properties. Should any natural catastrophes such as earthquakes, floods, typhoons or any actsof terrorism occur in Beijing, China, where our head office is located and most of our employees are based, or elsewhere in China, we might suffer not onlysignificant property damages, but also loss of revenues due to interruptions in our business operations, which could have a material adverse effect on our business,operating results or financial condition.The insurance industry in China is still at an early stage of development. Insurance companies in China offer limited business insurance products, and donot, to our knowledge, offer business liability insurance. As a result, we do not have any business liability insurance coverage for our operations. Moreover, whilebusiness disruption insurance is available, we have determined that the risks of disruption and cost of the insurance are such that we do not require it at this time.Any business disruption, litigation or natural disaster might result in substantial costs and diversion of resources, particularly if it affects our technology platformswhich we depend on for delivery of our software and services, and could have a material adverse effect on our financial condition and results of operations.We may be liable to our customers for damages caused by unauthorized disclosure of sensitive and confidential information, whether through our employees orotherwise.We are typically required to manage, utilize and store sensitive or confidential customer data in connection with the products and services we provide.Under the terms of our customer contracts, we are required to keep such information strictly confidential. We seek to implement specific measures to protectsensitive and confidential customer data. We require our employees to enter into nondisclosure agreements to limit such employees’ access to, and distribution of,our customers’ sensitive and confidential information and our own trade secrets. We can give no assurance that the steps taken by us in this regard will be adequateto protect our customers’ confidential information. If our customers’ proprietary rights are misappropriated by our employees, in violation of any applicableconfidentiality agreements or otherwise, our customers may consider us liable for that act and seek damages and compensation from us. However, we currently donot have any insurance coverage for mismanagement or misappropriation of such information by our employees. Any litigation with respect to unauthorizeddisclosure of sensitive and confidential information might result in substantial costs and diversion of resources and management attention.8We may face intellectual property infringement claims that could be timeconsuming and costly to defend. If we fail to defend ourselves against such claims, wemay lose significant intellectual property rights and may be unable to continue providing our existing products and services.It is critical that we use and develop our technology and products without infringing upon the intellectual property rights of third parties, includingpatents, copyrights, trade secrets and trademarks. Intellectual property litigation is expensive and timeconsuming and could divert management’s attention from ourbusiness. A successful infringement claim against us, whether with or without merit, could, among others things, require us to pay substantial damages, developnoninfringing technology, or rebrand our name or enter into royalty or license agreements that may not be available on acceptable terms, if at all, and cease making,licensing or using products that have infringed a third party’s intellectual property rights. Protracted litigation could also result in existing or potential customersdeferring or limiting their purchase or use of our products until resolution of such litigation, or could require us to indemnify our customers against infringementclaims in certain instances. Also, we may be unaware of intellectual property registrations or applications relating to our services that may give rise to potentialinfringement claims against us. Parties making infringement claims may be able to obtain an injunction to prevent us from delivering our services or usingtechnology containing the allegedly infringing intellectual property. Any intellectual property litigation could have a material adverse effect on our business, resultsof operations or financial condition. Seasonality and fluctuations in our customers’ spending cycle and other factors can cause our revenues and operating results to vary significantly from quarterto quarter and from year to year.Our revenues and operating results will vary significantly from quarter to quarter and from year to year due to a number of factors, many of which areoutside of our control. Our new lines of business acquired upon the consummation of the asset exchange transaction discussed below see higher customer use andactivity during the Chinese New Year holiday than other times during the year when rail travel is high, which lead to higher revenue during this period as morecustomers would like to place more advertising. Due to these and other factors, our operating results may fluctuate significantly from quarter to quarter and fromyear to year. These fluctuations are likely to continue in the future, and operating results for any period may not be indicative of our future performance in any futureperiod.Our corporate actions are substantially controlled by our principal shareholders, who can cause us to take actions in ways you may not agree with.Mr. Xuesong Song, our chairman, chief executive officer and a member of our board of directors, beneficially owns 19.31% of our outstanding ordinaryshares and 1,000,000 preferred shares, and each preferred share has the right to 399 votes at a meeting of the members of the Company. Our officers and directors asa group beneficially own an aggregate of approximately 33.69% of our outstanding ordinary shares. These shareholders, acting individually or as a group, couldexert control and substantial influence over matters such as electing directors, amending our constitutional documents, and approving acquisitions, mergers or otherbusiness combination transactions. This concentration of ownership and voting power may also discourage, delay or prevent a change in control of our company,which could deprive our shareholders of an opportunity to receive a premium for their shares as part of a sale of our company and might reduce the price of ourshares. Alternatively, our controlling shareholders may cause a merger, consolidation or change of control transaction even if it is opposed by our othershareholders, including those who purchase shares in this offering.9We depend on a small number of customers to derive a significant portion of our revenues. If we were to become dependent again upon a few customers, suchdependency could negatively impact our business, operating results and financial condition.We derived a material portion of our revenues from a small number of customers. In the years ended December 31, 2017 and 2016, our five largestcustomers accounted for 99.8% and 78.5% of our total sales, respectively, and our largest customer Guangdong Zhanshi Media Advertising Co., Ltd. accounted forapproximately 80.8% of our total sales during for the fiscal year ended December 31, 2017. As our customer base may change from yeartoyear, during such yearsthat the customer base is highly concentrated, the fluctuation of our sales to any of such major customers could have a material adverse effect on our business,operating results and financial condition. Moreover, our high customer base concentration may also adversely affect our ability to negotiate contract prices withthese customers, which may in turn materially and adversely affect our results of operations.Our historical outstanding accounts receivable have been relatively high. Inability to collect our accounts receivable on a timely basis, if at all, couldmaterially and adversely affect our financial condition, liquidity and results of operations.Historically, our outstanding accounts receivable have been relatively high. As of December 31, 2017 and 2016, our outstanding accounts receivable beforeimpairment were $10.4 million and $2.10 million, respectively. Although we conduct credit evaluations of our customers, we generally do not require collateral orother security from our customers. In addition, we have had a relatively high customer concentration. The outstanding accounts receivable balance for our largestcustomer was 45.3% and 38.5% of our total accounts receivable balance as of December 31, 2017 and 2016, respectively. As a result, an extended delay or default inpayment relating to a significant account would likely have a material and adverse effect on the aging schedule and turnover days of our accounts receivable. Ourinability to collect our accounts receivable on a timely basis, if at all, could materially and adversely affect our financial condition, liquidity and results of operations.Risks Related to Doing Business in ChinaAdverse changes in political and economic policies of the PRC government could have a material adverse effect on the overall economic growth of China,which could reduce the demand for our services and materially and adversely affect our competitive position.Substantially all of our business operations are conducted in China. Accordingly, our business, results of operations, financial condition and prospects aresubject to a significant degree to economic, political and legal developments in China. Although the Chinese economy is no longer a planned economy, the PRCgovernment continues to exercise significant control over China’s economic growth through direct allocation of resources, monetary and tax policies, and a host ofother government policies such as those that encourage or restrict investment in certain industries by foreign investors, control the exchange between RMB andforeign currencies, and regulate the growth of the general or specific market. These government involvements have been instrumental in China’s significant growthin the past 30 years. The reorganization of the telecommunications industry encouraged by the PRC government has directly affected our industry and our growthprospect. In response to the recent global and Chinese economic downturn, the PRC government has adopted policy measures aimed at stimulating the economicgrowth in China. If the PRC government’s current or future policies fail to help the Chinese economy achieve further growth or if any aspect of the PRCgovernment’s policies limits the growth of the telecommunications industry in China or our industry or otherwise negatively affects our business, our growth rate orstrategy, our results of operations could be adversely affected as a result. Our business benefits from certain government tax incentives. Expiration, reduction or discontinuation of, or changes to, these incentives will increase our taxburden and reduce our net income.Under the PRC Enterprise Income Tax Law passed in 2007 and the implementing rules, both of which became effective on January 1, 2008, or the New EITLaw, a unified enterprise income tax rate of 25% and unified tax deduction standard is applied equally to both domesticinvested enterprises and foreigninvestedenterprises, or FIEs. Enterprises established prior to March 16, 2007 eligible for preferential tax treatment in accordance with the then tax laws and administrativeregulations shall gradually become subject to the New EIT Law rate over a fiveyear transition period starting from the date of effectiveness of the New EIT Law.However, certain qualifying hightechnology enterprises may still benefit from a preferential tax rate of 15% if they own their core intellectual properties and they areenterprises in certain Statesupported hightech industries to be later specified by the government. As a result, if our PRC subsidiaries qualify as “hightechnologyenterprises,” they will continue to benefit from the preferential tax rate of 15%, subject to transitional rules implemented from January 1, 2008. Our subsidiary, BeijingZhong Chuan Shi Xun Technology Limited, is qualified as a “hightechnology enterprise” until the end of the November 2018, and therefore it had benefited fromthe preferential tax rate of 15%, subject to transitional rules implemented on January 1, 2008. Although we intend to apply for a renewal of this qualification, if BeijingZhong Chuan Shi Xun ceases to qualify as a “hightechnology enterprise”, or the tax authorities change their position on our preferential tax treatments in thefuture, our future tax liabilities may materially increase, which could materially and adversely affect our financial condition and results of operations.10If we were deemed a “resident enterprise” by PRC tax authorities, we could be subject to tax on our global income at the rate of 25% under the New EIT Lawand our nonPRC shareholders could be subject to certain PRC taxes.Under the New EIT Law and the implementing rules, both of which became effective January 1, 2008, an enterprise established outside of the PRC with “defacto management bodies” within the PRC may be considered a PRC “resident enterprise” and will be subject to the enterprise income tax at the rate of 25% on itsglobal income as well as PRC enterprise income tax reporting obligations. The implementing rules of the New EIT Law define “de facto management” as “substantialand overall management and control over the production and operations, personnel, accounting, and properties” of the enterprise. However, as of the date of thistransition report, no final interpretations on the implementation of the “resident enterprise” designation are available. Moreover, any such designation, when madeby PRC tax authorities, will be determined based on the facts and circumstances of individual cases. Therefore, if we were to be considered a “resident enterprise”by the PRC tax authorities, our global income would be taxable under the New EIT Law at the rate of 25% and, to the extent we were to generate a substantial amountof income outside of PRC in the future, we would be subject to additional taxes. In addition, the dividends we pay to our nonPRC enterprise shareholders and gainsderived by such shareholders or ADS or ordinary share holders from the transfer of our shares or ADSs may also be subject to PRC withholding tax at the rate up to10%, if such income were regarded as Chinasourced income.Our holding company structure may limit the payment of dividends.We have no direct business operations, other than our ownership of our subsidiaries. While we have no current intention of paying dividends, should wedecide in the future to do so, as a holding company, our ability to pay dividends and meet other obligations depends upon the receipt of dividends or otherpayments from our operating subsidiaries and other holdings and investments. Current PRC regulations permit our PRC subsidiaries to pay dividends to us only outof their accumulated profits, if any, determined in accordance with Chinese accounting standards and regulations. In addition, each of our subsidiaries in China isrequired to set aside at least 10% of its aftertax profits each year, if any, to fund a statutory reserve until such reserve reaches 50% of its registered capital. Thesereserves are not distributable as cash dividends. Furthermore, if our subsidiaries in China incur debt on their own behalf in the future, the instruments governing thedebt may restrict their ability to pay dividends or make other payments to us. As a result, there may be limitations on the ability of our PRC subsidiaries to paydividends or make other investments or acquisitions that could be beneficial to our business or otherwise fund and conduct our business.In addition, under the New EIT Law and the implementing rules that became effective on January 1, 2008, dividends generated from the business of our PRCsubsidiaries after January 1, 2008 and payable to us may be subject to a withholding tax rate of 10% if the PRC tax authorities subsequently determine that we are anonresident enterprise, unless there is a tax treaty with China that provides for a different withholding arrangement.Uncertainties with respect to the PRC legal system could adversely affect us.We conduct all of our business through our subsidiaries in China. Our operations in China are governed by PRC laws and regulations. Our PRCsubsidiaries are generally subject to laws and regulations applicable to foreign investments in China and, in particular, laws and regulations applicable to whollyforeignowned enterprises. The PRC legal system is based on statutes. Prior court decisions may be cited for reference but have limited precedential value.11Since 1979, PRC legislation and regulations have significantly enhanced the protections afforded to various forms of foreign investments in China.However, China has not developed a fully integrated legal system and recently enacted laws and regulations may not sufficiently cover all aspects of economicactivities in China. In particular, because these laws and regulations are relatively new, and because of the limited volume of published decisions and theirnonbinding nature, the interpretation and enforcement of these laws and regulations involve uncertainties. In addition, the PRC legal system is based in part ongovernment policies and internal rules (some of which are not published on a timely basis or at all) that may have a retroactive effect. As a result, we may not beaware of our violation of these policies and rules until some time after the violation. In addition, any litigation in China may be protracted and result in substantialcosts and diversion of resources and management attention.PRC regulation of loans and direct investment by offshore holding companies to PRC entities may delay or prevent us from using the proceeds of our May2010 public offering to make loans or additional capital contributions to our PRC operating subsidiaries, which could materially and adversely affect ourliquidity and our ability to fund and expand our business.In utilizing the proceeds of our May 2010 public offering as an offshore holding company of our PRC operating subsidiaries, we may make loans to our PRCsubsidiaries, or we may make additional capital contributions to our PRC subsidiaries. Any loans to our PRC subsidiaries are subject to PRC regulations. Forexample, loans by us to our subsidiaries in China, which are FIEs, to finance their activities cannot exceed statutory limits and must be registered with the StateAdministration of Foreign Exchange, or SAFE. On August 29, 2008, SAFE promulgated Circular 142, a notice regulating the conversion by a foreigninvestedcompany of foreign currency into RMB by restricting how the converted RMB may be used. The notice requires that RMB converted from the foreign currencydenominated capital of a foreigninvested company may only be used for purposes within the business scope approved by the applicable governmental authorityand may not be used for equity investments within the PRC unless specifically provided for otherwise. The foreign currencydenominated capital shall be verified byan accounting firm before converting into RMB. In addition, SAFE strengthened its oversight over the flow and use of RMB funds converted from the foreigncurrencydenominated capital of a foreigninvested company. To convert such capital into RMB, the foreigninvested company must report the use of such RMB tothe bank, and the RMB must be used to the reported purposes. According to Circular 142, change of the use of such RMB without approval is prohibited. Inaddition, such RMB may not be used to repay RMB loans if the proceeds of such loans have not yet been used. Violations of Circular 142 may result in severepenalties, including substantial fines as set forth in the Foreign Exchange Administration Rules.We may also decide to finance our subsidiaries by means of capital contributions. These capital contributions may need approval from the PRC Ministry ofCommerce, or MOFCOM, or its local counterpart. We may not be able to obtain these government approvals on a timely basis, if at all, with respect to future capitalcontributions by us to our PRC subsidiaries. If we fail to receive such approvals in such cases when approval is required, our ability to use the proceeds of our May2010 public offering and to capitalize our PRC operations may be negatively affected, which could adversely affect our liquidity and our ability to fund and expandour business.Governmental control of currency conversion may affect the value of your investment.The PRC government imposes controls on the convertibility of the RMB into foreign currencies and, in certain cases, the remittance of currency out ofChina. We receive substantially all of our revenues in RMB. Under our current corporate structure, our income is primarily derived from dividend payments from ourPRC subsidiaries. Shortages in the availability of foreign currency may restrict the ability of our PRC subsidiaries to remit sufficient foreign currency to paydividends or other payments to us, or otherwise satisfy their foreign currency denominated obligations. Under existing PRC foreign exchange regulations, paymentsof current account items, including profit distributions, interest payments and expenditures from traderelated transactions, can be made in foreign currencieswithout prior approval from SAFE by complying with certain procedural requirements. However, approval from appropriate government authorities is required whereRMB is to be converted into foreign currency and remitted out of China to pay capital expenses such as the repayment of loans denominated in foreign currencies.The PRC government may also at its discretion restrict access in the future to foreign currencies for current account transactions. If the foreign exchange controlsystem prevents us from obtaining sufficient foreign currency to satisfy our currency demands, we may not be able to pay dividends in foreign currencies to ourshareholders, including holders of our ADSs or ordinary shares.12Fluctuation in the value of the RMB may have a material adverse effect on the value of your investment.The value of the RMB against the U.S. dollar and other currencies may fluctuate and is affected by, among other things, changes in political and economicconditions. On July 21, 2005, the PRC government changed its decadeold policy of pegging the value of the RMB to the U.S. dollar. Under the new policy, the RMBis permitted to fluctuate within a narrow and managed band against a basket of certain foreign currencies. This change in policy has resulted in an approximate26.8% appreciation of the RMB against the U.S. dollar between July 21, 2005 and September 30, 2015. Provisions on Administration of Foreign Exchange, asamended in August 2008, further changed China’s exchange regime to a managed floating exchange rate regime based on market supply and demand. Since reachinga high against the U.S. dollar in July 2008, however, the RMB has traded within a narrow band against the U.S. dollar, remaining within 1% of its July 2008 high butnever exceeding it. As a consequence, the RMB has fluctuated sharply since July 2008 against other freelytraded currencies, in tandem with the U.S. dollar. InAugust 2015, the PRC Government devalued its currency by approximately 3%, representing the largest yuan depreciation for 20 years. Concerns remain thatChina’s slowing economy, and in particular its exports, will need a stimulus that can only come from further cuts in the exchange rate.It is difficult to predict how long the current situation may continue and when and how it may change again as the People’s Bank of China may regularlyintervene in the foreign exchange market to achieve economic policy goals. Substantially all of our revenues and costs are denominated in the RMB, and asignificant portion of our financial assets are also denominated in RMB. We principally rely on dividends and other distributions paid to us by our subsidiaries inChina. Any significant revaluation of the RMB may materially and adversely affect our cash flows, revenues, earnings and financial position, and the value of, andany dividends payable on, our ADSs or ordinary shares in U.S. dollars. Any fluctuations of the exchange rate between the RMB and the U.S. dollar could also resultin foreign currency translation losses for financial reporting purposes.PRC laws and regulations governing our businesses. If we are found to be in violation of such PRC laws and regulations, we could be subject to sanctions. Inaddition, changes in such PRC laws and regulations may materially and adversely affect our business.There are substantial uncertainties regarding the interpretation and application of PRC laws and regulations, including, but not limited to, the laws andregulations governing our business. These laws and regulations are relatively new and may be subject to change, and their official interpretation and enforcementmay involve substantial uncertainty. The effectiveness of newly enacted laws, regulations or amendments may be delayed, resulting in detrimental reliance byforeign investors. New laws and regulations that affect existing and proposed future businesses may also be applied retroactively.The PRC government has broad discretion in dealing with violations of laws and regulations, including levying fines, revoking business and other licensesand requiring actions necessary for compliance. In particular, licenses and permits issued or granted to us by relevant governmental bodies may be revoked at a latertime by higher regulatory bodies. We cannot predict the effect of the interpretation of existing or new PRC laws or regulations on our businesses. We cannot assureyou that our current ownership and operating structure would not be found in violation of any current or future PRC laws or regulations. As a result, we may besubject to sanctions, including fines, and could be required to restructure our operations or cease to provide certain services. In addition, any litigation in China maybe protracted and result in substantial costs and diversion of resources and management attention. Any of these or similar actions could significantly disrupt ourbusiness operations or restrict us from conducting a substantial portion of our business operations, which could materially and adversely affect our business,financial condition and results of operations.13If we were required to obtain the prior approval of the China Securities Regulatory Commission, or CSRC, of the listing and trading of our ADSs on theNASDAQ Capital Market, we may face regulatory actions or other sanctions from the CSRC or other PRC regulatory agencies.On August 8, 2006, six PRC regulatory agencies, including the Ministry of Commerce, the State Assets Supervision and Administration Commission, theState Administration for Taxation, the State Administration for Industry and Commerce, the CSRC and the SAFE, jointly issued the Regulations on Mergers andAcquisitions of Domestic Enterprises by Foreign Investors, which became effective on September 8, 2006 (the “New M&A Rules”). This regulation, among otherthings, includes provisions that purport to require that an offshore special purpose vehicle formed for the purposes of overseas listing of equity interests in PRCcompanies and controlled directly or indirectly by PRC companies or individuals obtain the approval of the CSRC prior to the listing and trading of such specialpurpose vehicle’s securities on an overseas stock exchange. On September 21, 2006, the CSRC published on its official website procedures regarding its approval ofoverseas listings by special purpose vehicles. The CSRC approval procedures require the filing of a number of documents with the CSRC and it would take severalmonths to complete the approval process, if practicable at all. The application of this new PRC regulation remains unclear with no consensus currently existingamong leading PRC law firms regarding the scope of the applicability of the CSRC approval requirement. Prior to our May 2010 initial public offering, our PRC counsel has advised us that, based on its understanding of the current PRC laws and regulations aswell as the procedures announced on September 21, 2006: (i) Softech was directly incorporated by Topsky as a foreign investment enterprise under PRC law;therefore, there was no acquisition of the equity of a “PRC domestic company” as defined under the New M&A Rules; and (ii) the contractual arrangementsbetween Kingtone Information and Softech were not clearly defined and considered as the transaction which shall be applied to the New M&A Rules. Therefore, wedid not seek prior CSRC approval for our initial public offering.However, if the CSRC required that we obtain its approval prior to the completion of our initial public offering and the listing of our ADSs on the NASDAQCapital Market, we may face regulatory actions or other sanctions from the CSRC or other PRC regulatory agencies. These regulatory agencies may impose fines andpenalties on our operations in the PRC, limit our operating privileges in the PRC, delay or restrict the repatriation of the proceeds from our initial public offering intothe PRC, or take other actions that could have a material adverse effect on our business, financial condition, results of operations, reputation and prospects, as wellas the trading price of our shares.Also, if the CSRC requires that we obtain its approval, we may be unable to obtain a waiver of the CSRC approval requirements if and when procedures areestablished to obtain such a waiver. Any uncertainties and/or negative publicity regarding this CSRC approval requirement could have a material adverse effect onthe trading price of our shares.PRC regulations relating to the establishment of offshore special purpose companies by PRC residents may subject our PRC resident shareholders to penaltiesand limit our ability to inject capital into our PRC subsidiaries, limit our PRC subsidiaries’ ability to distribute profits to us, or otherwise adversely affect us.On October 21, 2005, the SAFE issued the Notice on Issues Relating to the Administration of Foreign Exchange in Fundraising and Reverse InvestmentActivities of Domestic Residents Conducted via Offshore Special Purpose Companies, or Notice 75, which became effective as of November 1, 2005. According toNotice 75, prior registration with the local SAFE branch is required for PRC residents to establish or to control an offshore company for the purposes of financingsuch offshore company with assets or equity interests in an onshore enterprise located in the PRC, or an offshore special purpose company. An amendment toregistration or filing with the local SAFE branch by such PRC resident is also required for the injection of equity interests or assets of an onshore enterprise in theoffshore special purpose company or overseas funds raised by such offshore company, or any other material change involving a change in the capital of theoffshore special purpose company. Moreover, Notice 75 applies retroactively. As a result, PRC residents who have established or acquired control of offshorespecial purpose companies that have made onshore investments in the PRC in the past are required to have completed the relevant registration procedures with thelocal SAFE branch by March 31, 2006. To further clarify the implementation of Notice 75, the SAFE issued Circular 106 on May 29, 2007. Under Circular 106, PRCsubsidiaries of an offshore special purpose company are required to coordinate and supervise the filing of SAFE registrations by the offshore holding company’sshareholders or beneficial owners who are PRC residents in a timely manner.14Some of our current shareholders and/or beneficial owners may fall within the ambit of the SAFE notice and be required to register with the local SAFEbranch as required under the SAFE notice. If so required, and if such shareholders and/or beneficial owners fail to timely register their SAFE registrations pursuantto the SAFE notice, or if future shareholders and/or beneficial owners of our company who are PRC residents fail to comply with the registration procedures setforth in the SAFE notice, this may subject such shareholders, beneficial owners and/or our PRC subsidiaries to fines and legal sanctions and may also limit ourability to contribute additional capital into our PRC subsidiaries, limit our PRC subsidiaries’ ability to distribute dividends to our company, or otherwise adverselyaffect our business.Risks Associated with our ADSs and Ordinary SharesOur securities are not currently traded on any United States public markets and you may not be able to resell your securities for some time.There is currently no public market for our ordinary shares or American Depository Shares (“ADSs”) in the United States or in any other jurisdiction. OurADSs were voluntarily delisted from the NASDAQ Capital Market on September 19, 2018. We have applied to NASDAQ for the listing of our ordinary shares on theNASDAQ Capital Market and received an approval for listing of Ordinary Shares on August 6, 2018, and as of the date of this transition report, that application andapproval are currently under review. We cannot assume that our ordinary shares will be accepted for listing on the NASDAQ Capital Market, or if listed, that wewould continue to meet the applicable minimum listing requriements. You may not be able to sell your ordinary shares quickly or at all if we are unable to gain listingon a public market in the United States.The market price of our ADSs has historically been highly volatile, and you may not be able to resell our ordinary shares at or above your initial purchaseprice.There may be a limited public market for our ordinary shares and, as discussed above, our ADSs are no longer listed on any public market in the UnitedStates or any other jurisdiction. We cannot assure you that there will be an active trading market for our ordinary shares in the future. If our ordinary shares areaccepted for listing on a public market, you may not be able to sell your ordinary shares quickly or at the market price if trading in our ordinary shares is not active. The trading price of our ADSs and ordinary shares may be volatile. The price of our ADSs and ordinary shares could be subject to wide fluctuations inresponse to a variety of factors, including the following:1.Introduction of new products, services or technologies offered by us or our competitors;2.Failure to meet or exceed revenue and financial projections we provide to the public;3.Actual or anticipated variations in quarterly operating results;4.Failure to meet or exceed the estimates and projections of the investment community;5.General market conditions and overall fluctuations in United States equity markets;6.Announcements of significant acquisitions, strategic partnerships, joint ventures or capital commitments by us or our competitors;7.Disputes or other developments relating to proprietary rights, including patents, litigation matters and our ability to obtain patent protection for ourtechnologies;8.Additions or departures of key management personnel;9.Issuances of debt or equity securities;10.Significant lawsuits, including patent or shareholder litigation;11.Changes in the market valuations of similar companies;12.Sales of additional ordinary shares or other securities by us or our shareholders in the future;13.Trading volume of our ordinary shares;14.Fluctuations in the exchange rate between the U.S. dollar and Renminbi;15.Negative market perception and media coverage of our company or other companies in the same or similar industry with us; and16.Other events or factors, many of which are beyond our control.15In addition, the stock market in general, and the NASDAQ Capital Market and software products and services companies in particular, have experiencedextreme price and volume fluctuations that have often been unrelated or disproportionate to the operating performance of these companies. Broad market andindustry factors may negatively affect the market price of our ordinary shares, regardless of our actual operating performance. Our ADSs and ordinary shares may be subject to the SEC’s penny stock rules which may make it difficult for brokerdealers to complete customer transactionsand trading activity in our securities.Our ADSs and ordinary shares may be deemed to be “penny stock” as that term is defined under the Securities Exchange Act of 1934, as amended. Pennystocks generally are equity securities with a price of less than $5.00 (other than securities registered on certain national securities exchanges or quoted on theNASDAQ system, provided that current price and volume information with respect to transactions in such securities is provided by the exchange or system). Pennystock rules impose additional sales practice requirements on brokerdealers who sell to persons other than established customers and “accredited investors.” Theterm “accredited investor” refers generally to institutions with assets in excess of $5,000,000 or individuals with a net worth in excess of $1,000,000 or annual incomeexceeding $200,000 or $300,000 jointly with their spouse in each of the prior two years.The penny stock rules require a brokerdealer, prior to a transaction in a penny stock not otherwise exempt from the rules, to deliver a standardized riskdisclosure document in a form prepared by the SEC, which provides information about penny stocks and the nature and level of risks in the penny stockmarket. Moreover, brokerdealers are required to determine whether an investment in a penny stock is a suitable investment for a prospective investor. A brokerdealer must receive a written agreement to the transaction from the investor setting forth the identity and quantity of the penny stock to be purchased. Theserequirements may make it more difficult for brokerdealers to effectuate customer transactions and trading activity in our securities. As a result, the market price ofour ADSs and ordinary shares may be depressed, and you may find it more difficult to sell our ADSs or ordinary shares.Sales of a substantial number of ordinary shares or ADSs in the public market by our existing shareholders could cause the price of our ADSs to fall.Sales of a substantial number of our ordinary shares or ADSs in the public market or the perception that these sales might occur, could depress the marketprice of our ADSs and could impair our ability to raise capital through the sale of additional equity securities. We are unable to predict the effect that sales may haveon the prevailing market price of our ADSs.All of our existing shareholders prior to our May 2010 offering were subject to lockup agreements with the underwriters of the offering that restricted theshareholders’ ability to transfer ordinary shares or ADSs until expiration of the lockup period in November 2010. The lockup agreements limited the number ofordinary shares or ADSs that may be sold immediately following the public offering. Subject to certain limitations, approximately 1,000,000 of our total outstandingshares are now eligible for sale. Sales of ordinary shares by these shareholders could have a material adverse effect on the trading price of our ADSs.Future sales and issuances of our ordinary shares, or rights to purchase our ordinary shares, including pursuant to our 2010 Omnibus Incentive Plan, couldresult in additional dilution of the percentage ownership of our shareholders and could cause the price of our ordinary shares to fall.We expect that significant additional capital will be needed in the future to continue our planned operations. To the extent we raise additional capital byissuing equity securities, our shareholders may experience substantial dilution. We may sell ordinary shares, convertible securities or other equity securities in oneor more transactions at prices and in a manner we determine from time to time. If we sell ordinary shares, convertible securities or other equity securities in more thanone transaction, investors may be materially diluted by subsequent sales. Such sales may also result in material dilution to our existing shareholders, and newinvestors could gain rights superior to our existing shareholders.16We do not intend to pay dividends on our ordinary shares, so any returns will be limited to the value of our ADSs and ordinary shares.We have never declared or paid any cash dividend on our ordinary shares. We currently anticipate that we will retain future earnings for the development,operation and expansion of our business and do not anticipate declaring or paying any cash dividends for the foreseeable future. Any return shareholders willtherefore be limited to the value of their ADSs or ordinary shares.As the rights of shareholders under British Virgin Islands law differ from those under U.S. law, you may have fewer protections as a shareholder.Our corporate affairs will be governed by our memorandum of association and articles of association, the BVI Business Companies Act, 2004, or the BVIAct, of the British Virgin Islands and the common law of the British Virgin Islands. The rights of shareholders to take legal action against our directors, actions byminority shareholders and the fiduciary responsibilities of our directors under British Virgin Islands law are to a large extent governed by the BVI Act and thecommon law of the British Virgin Islands. The common law of the British Virgin Islands is derived in part from comparatively limited judicial precedent in the BritishVirgin Islands as well as from English common law, which has persuasive, but not binding, authority on a court in the British Virgin Islands. The rights of ourshareholders and the fiduciary responsibilities of our directors under British Virgin Islands law are not as clearly established as they would be under statutes orjudicial precedents in some jurisdictions in the United States. In particular, the British Virgin Islands has a less developed body of securities laws as compared to theUnited States, and some states (such as Delaware) have more fully developed and judicially interpreted bodies of corporate law.As a result of all of the above, holders of our ADSs and ordinary shares may have more difficulty in protecting their interests through actions against ourmanagement, directors or major shareholders than they would as shareholders of a U.S. company.British Virgin Islands companies may not be able to initiate shareholder derivative actions, thereby depriving shareholders of the ability to protect theirinterests.British Virgin Islands companies may not have standing to initiate a shareholder derivative action in a federal court of the United States. The circumstancesin which any such action may be brought, and the procedures and defenses that may be available in respect to any such action, may result in the rights ofshareholders of a British Virgin Islands company being more limited than those of shareholders of a company organized in the United States. Accordingly,shareholders may have fewer alternatives available to them if they believe that corporate wrongdoing has occurred. The British Virgin Islands courts are alsounlikely to recognize or enforce against us judgments of courts in the United States based on certain liability provisions of U.S. securities law; and to imposeliabilities against us, in original actions brought in the British Virgin Islands, based on certain liability provisions of U.S. securities laws that are penal in nature.There is no statutory recognition in the British Virgin Islands of judgments obtained in the United States, although the courts of the British Virgin Islands willgenerally recognize and enforce the nonpenal judgment of a foreign court of competent jurisdiction without retrial on the merits.The laws of the British Virgin Islands provide little protection for minority shareholders, so minority shareholders will have little or no recourse if theshareholders are dissatisfied with the conduct of our affairs.Under the law of the British Virgin Islands, there is little statutory law for the protection of minority shareholders other than the provisions of the BVI Actdealing with shareholder remedies. The principal protection under statutory law is that shareholders may bring an action to enforce the constituent documents ofthe corporation, our memorandum of association and articles of association. Shareholders are entitled to have the affairs of the company conducted in accordancewith the general law and the memorandum of association and articles of association.17There are common law rights for the protection of shareholders that may be invoked, largely dependent on English company law, since the common law ofthe British Virgin Islands is limited. Under the general rule pursuant to English company law known as the rule in Foss v. Harbottle, a court will generally refuse tointerfere with the management of a company at the insistence of a minority of its shareholders who express dissatisfaction with the conduct of the company’s affairsby the majority or the board of directors. However, every shareholder is entitled to have the affairs of the company conducted properly according to law and thecompany’s constituent documents. As such, if those who control the company have persistently disregarded the requirements of company law or the provisions ofthe company’s memorandum of association and articles of association, then the courts will grant relief. Generally, the areas in which the courts will intervene are thefollowing: (1) an act complained of which is outside the scope of the authorized business or is illegal or not capable of ratification by the majority; (2) acts thatconstitute fraud on the minority where the wrongdoers control the company; (3) acts that infringe on the personal rights of the shareholders, such as the right tovote; and (4) where the company has not complied with provisions requiring approval of a majority of shareholders, which are more limited than the rights affordedminority shareholders under the laws of many states in the United States.Antitakeover provisions in our memorandum of association and articles of association and our right to issue preference shares could make a thirdpartyacquisition of us difficult.Some provisions of our memorandum of association and articles of association may discourage, delay or prevent a change in control of our company ormanagement that shareholders may consider favorable, including provisions that authorize our board of directors to issue preference shares in one or more seriesand to designate the price, rights, preferences, privileges and restrictions of such preference shares.If you hold our ADSs, you may not have the same voting rights as the holders of our ordinary shares and must act through the depositary to exercise your rights.Holders of our ADSs will not be able to exercise voting rights attaching to the shares evidenced by our ADSs on an individual basis. Holders of our ADSswill appoint the depositary or its nominee as their representative to exercise the voting rights attaching to the shares represented by the ADSs. You may not receivevoting materials in time to instruct the depositary to vote, and it is possible that you, or persons who hold their ADSs through brokers, dealers or other third parties,will not have the opportunity to exercise a right to vote. Upon our written request, the depositary will mail to you a shareholder meeting notice which contains,among other things, a statement as to the manner in which your voting instructions may be given, including an express indication that such instructions may begiven or deemed given to the depositary to give a discretionary proxy to a person designated by us if no instructions are received by the depositary from you on orbefore the response date established by the depositary. However, no voting instruction shall be deemed given and no such discretionary proxy shall be given withrespect to any matter as to which we inform the depositary that (i) we do not wish such proxy given, (ii) substantial opposition exists, or (iii) such matter materiallyand adversely affects the rights of shareholders. We will make all reasonable efforts to cause the depositary to extend voting rights to you in a timely manner, butyou may not receive the voting materials in time to ensure that you can instruct the depositary to vote your ADSs. Furthermore, the depositary and its agents willnot be responsible for any failure to carry out any instructions to vote, for the manner in which any vote is cast or for the effect of any such vote. As a result, youmay not be able to exercise your right to vote and you may lack recourse if your ADSs are not voted as you requested. In addition, in your capacity as an ADSholder, you will not be able to call a shareholders’ meeting.You may not be able to participate in rights offerings and may experience dilution of your holdings as a result.We may from time to time distribute rights to our shareholders, including rights to acquire our securities. However, we may not, and under the depositagreement for the ADSs, the depositary will not, offer those rights to ADS holders unless both the rights and the underlying securities to be distributed to ADSholders are registered under the Securities Act, or the distribution of them to ADS holders is exempted from registration under the Securities Act with respect to allholders of ADSs. We are under no obligation to file a registration statement with respect to any such rights or underlying securities or to endeavor to cause such aregistration statement to be declared effective. In addition, we may not be able to rely on an exemption from registration under the Securities Act to distribute suchrights and securities. Accordingly, holders of our ADSs may be unable to participate in our rights offerings and may experience dilution in their holdings as a result.You may be subject to limitations on transfer of your ADSs.Your ADSs are transferable on the books of the depositary. However, the depositary may close its transfer books at any time or from time to time when itdeems expedient in connection with the performance of its duties. In addition, the depositary may refuse to deliver, transfer or register transfers of ADSs generallywhen our books or the books of the depositary are closed, or at any time if we or the depositary deem it advisable to do so because of any requirement of law or ofany government or governmental body, or under any provision of the deposit agreement, or for any other reason.18We may be a passive foreign investment company, of PFIC, which could lead to additional taxes for U.S. holders of our ADSs or ordinary shares.We do not expect to be, for U.S. federal income tax purposes, a passive foreign investment company, or a PFIC, which is a foreign company for which, inany given taxable year, either at least 75% of its gross income is passive income, or investment income in general, or at least 50% of its assets produce or are held toproduce passive income, for the current taxable year, and we expect to operate in such a manner so as not to become a PFIC for any future taxable year. However,because the determination of PFIC status for any taxable year cannot be made until after the close of such year and requires extensive factual investigation,including ascertaining the fair market value of our assets on a quarterly basis and determining whether each item of gross income that we earn is passive income, wecannot assure you that we will not become a PFIC for the current taxable year or any future taxable year. If we are or become a PFIC, a U.S. holder of our ADSs orordinary shares could be subject to additional U.S. federal income taxes on gain recognized with respect to the ADSs or ordinary shares and on certain distributions,plus an interest charge on certain taxes treated as having been deferred under the PFIC rules. Noncorporate U.S. holders will not be eligible for reduced rates oftaxation on any dividends received from us if we are a PFIC in the taxable year in which such dividends are paid or in the preceding taxable year.If our ordinary shares are listed on the NASDAQ Capital Market and the trading price of our ordinary shares fails to comply with the continued listingrequirements of the NASDAQ Capital Market, we would face possible delisting, which would result in a limited public market for our ordinary shares andmake obtaining future debt or equity financing more difficult for us.Companies listed on NASDAQ are subject to delisting for, among other things, failure to maintain a minimum closing bid price of $1.00 per share for 30consecutive business days. On December 19, 2011, we received a letter from NASDAQ indicating that for the last 30 consecutive business days, the closing bidprice of our ADSs fell below the minimum $1.00 per share requirement pursuant to NASDAQ Listing Rule 5550(a)(2) for continued listing on the NASDAQ CapitalMarket. We regained compliance with the minimum bid price requirement for continued listing set forth in NASDAQ Listing Rule 5550(a)(2), as its ADS with itsunderlying ordinary share has achieved a closing bid price of $1.00 or greater for the 10 consecutive business days from November 6 to November 23, 2012 byimplementing a 1for10 combination, or reverse split of the ordinary shares effective November 6, 2012. When listed, we cannot be sure that the price of our ordinaryshares will comply with this requirement for continued listing on the NASDAQ Capital Market in the future. If we were not able to do so, our ordinary shares wouldbe subject to delisting and would likely trade on the overthecounter market. If our ordinary shares were to trade on the overthecounter market, selling ourordinary shares could be more difficult because smaller quantities of shares would likely be bought and sold, transactions could be delayed, and security analysts’coverage of us may be reduced. In addition, brokerdealers have certain regulatory burdens imposed upon them, which may discourage brokerdealers from effectingtransactions in our ordinary shares, further limiting the liquidity of our ordinary shares. As a result, the market price of our ordinary may be depressed, and you mayfind it more difficult to sell our ordinary shares. Such delisting from the NASDAQ Capital Market and continued or further declines in our share price could alsogreatly impair our ability to raise additional necessary capital through equity or debt financing.ITEM 4. INFORMATION ON THE COMPANY.A . HISTORY AND DEVELOPMENT OF THE COMPANY.OverviewWe are a holding company and conduct our operations through our whollyowned subsidiary named LK Technology Ltd., a British Virgin Islands limitedliability company (“LK Technology”), and its whollyowned subsidiaries, MMB Limited and Mobile Media (China) Limited and their respective subsidiaries, whichhold the rights to deploy WiFi systems on about 700 trains in China, including 290 trains in which WiFi systems have already been installed and are in operation. InMay 2010, we consummated an initial public offering of our American Depository Shares, or ADSs, for gross proceeds of $16 million, and our ADSs were listed onthe NASDAQ Capital Market under the ticker symbol “KONE”. Our ordinary shares are not currently listed on any trading market. Our American Depository Shares(“ADSs”) were voluntarily delisted from the NASDAQ Capital Market on September 19, 2018. We have applied to NASDAQ for the listing of our ordinary shares onthe NASDAQ Capital Market and received an approval for listing of Ordinary Shares on August 6, 2018, and as of the date of this transition report, that applicationand approval are currently under review.19On August 17, 2018, we consummated an asset exchange transaction, pursuant to which we exchanged all issued and outstanding capital stock in TopskyInfoTech Holdings Pte Ltd., the parent of Softech, for the issued and outstanding capital stock of LK Technology (the “Asset Exchange”). In connection with theAsset Exchange, we changed our name on August 20, 2018, and on September 20, 2018, issued to the shareholders of C Media Limited, the former parent of LKTechnology, (i) 185,412,599 of our ordinary shares, par value $0.01 per share and (ii) 1,000,000 of our preferred shares. Upon the consummation of the AssetExchange, we ceased our previous business operations and became a company focused on the provision of WiFi and mobile application products for long distancerail travelers in China.On August 25, 2018, LK Technology entered into a Stock Purchase Agreement (the “Agreement”) with the shareholders (“Shareholders”) of SuperengineHoldings Limited, a limited liability company organized under the laws of the British Virgin Islands (the “Superengine”), pursuant to which LK Technology acquiredall of the issued and outstanding capital stock of Superengine for an aggregate purchase price of US$60 million (the “Purchase Price”), which are paid by theissuance of our Ordinary Shares in an amount equal to the quotient of (x) the Purchase Price divided by (y) the average of the closing prices of the Ordinary Shareson the NASDAQ Capital Market over the 12 months period preceding July 31, 2018. We are a party to the Agreement in connection with the issuance of theOrdinary Shares and certain other limited purposes.Corporate InformationOur principal executive offices are located at LAB32, SOHO 3Q, No 9, Guanghua Road, Chaoyang District, Beijing, People’s Republic of China 100020. Ourwebsite is www.luokung.com. We routinely post important information on our website. The information contained on our website is not a part of this transitionreport.Our agent for service of process in the United States is Worldwide Stock Transfer, LLC, the current transfer agent of the Company, with a mailing address ofOne University Plaza, Suite 505, Hackensack, New Jersey 07601.B. BUSINESS OVERVIEW.We are a Chinabased provider of rail WiFi and mobile application products for long distance travelers in China. Our primary mobile application, theLuoKuang platform, consists of the LuoKuang mobile applications, a series of supporting software at the server end, and railWiFi hardware and equipment on thetrains that we serve. The LuoKuang platform incorporates technology covered by 22 patents and about 34 software copy rights, and serves as a content and servicedistribution platform that is tailored for particular travel stages featuring geographic location and social interaction. The content and services distributed byLuoKuang contain information, entertainment, travel, ecommerce, online to offline (“O2O”), advertisement and marketing features.LuoKuang mainly provides personalized and precise services to long distance travelers in two locations: on the train and at the destination. Based on thetravel environment, the core elements of our users’ needs include staving off boredom on trains and discovering and exploring new locations upon arrival. The mainservices contain entertainment services (videos and audio, digital readings, games specific and tailored to the travel stage) and social services (satisfying thedemand for value discovery of unfamiliar destinations through social interaction among strangers based on locations). As of December 31, 2017, the LuoKuangplatform featured about 38 million users.The setting services on the train focus on providing entertainment content for passengers to pass time during longdistance travel in closed environments.For example, we provide access to long video formats such as movies and TV shows, short videos, music, digital readings and games.20We use the most valuable WiFi location—the train WiFi setting—as the entrance of our LuoKuang platform and mobile applications. Passengers typicallyride trains for longdistance and interprovincial travel purposes. The long periods of monotonous journeys and the cost concerns for roaming traffic fees enable thecombination of entertainment content service needs and WiFi access needs. Our railWiFi becomes a valuable and sophisticated WiFi service in this setting—notjust WiFi connection service, but a provider of sophisticated services through a WiFi connection. In addition, the annual traffic of 800,000 passengers onboardeach train makes rail WiFi a huge entry point for mobile applications. We do not define ourselves as a train WiFi communication service operator but as a longdistance travel mobile service provider. We provide users with free WiFi access so that users are able to connect to the LuoKuang platform and thus access relatedentertainment services, services on the train and destination services. The rail WiFi is our access point to a significant pool of users and the entrance to acquiringadditional users.The setting services focus on providing targeted push services to users while travelling in unfamiliar cities. Information and service guidance are preciselypushed to appeal to the interests and tastes (eating, drinking, shopping, touring and culture) of individual users (cuisine specialties and local snacks, local events,viewing sights, culture, history, stories). The service guidance is generated, shared and distributed by individual users (travelers, local residents, local businesses)interacting with current locations and featuring users who generated contents from selfmedia and small and medium vertical contents providers).Based on the GIS (geoinformation system), Superengine is a provider of big spatialtemporal data, network graphic image technology and relevant service.Its super engine series includes computer graphic image engines and spatial database engines. Spatialtemporal cloud index is the core of the company’s spatialtemporal data engines. It is equivalent to the neural network of the big data and the Internet. It extends the value of its products and platform to its data serviceproviders. In cooperation, its service providers can be divided into three categories, namely, basic geographic data providers, industrial data providers andbehavioral data providers). Superengine’s industriesoriented spatialtemporal data engine was launched in 2016. The spatialtemporal GIS platform has been appliedin industries such as aerospace, power grid, surveying & mapping, agriculture, cultural relic preservation, water conservancy, public security, railway section, smartcities, and business location selection.Our primary sources of revenue are advertising and marketing promotion revenues.Our Industry — Mobile Internet IndustryOur products and services are engaged in the mobile internet industry. Our main services consist of entertainment services (videos, audio, digital readings,games that are tailormade for passengers on train) and other services including satisfying the demand for value discovery of unfamiliar destinations through socialinteractions among strangers based in such locations). The mobile internet industry in China is rapidly growing and is likely to be in a longterm growth trend.According to the Mobile Internet Blue Book of China Mobile Internet Report, in 2017 the market size of China mobile internet reached RMB 605 billion. Now China isin a leading position in terms of smartphone, mobile communication network and mobile application services. The pool of users is anticipated to keep expandingthrough the promotion and popularization of smartphones and the expansion of the mobile internet market.Video is the leading online entertainment format in China. According to the iResearch Report, over 80% of total time spent by users on online entertainmentin China in 2016 was internet video. Online entertainment, especially internet video, is attractive to Chinese users due to many favorable factors, including easyaccessibility, wide content selection, and innovative platforms with social features.For 2017, the transaction volume of China mobile ecommerce market reached to over RMB 4 trillion according to the China Mobile Ecommerce IndustryResearch Report from iResearch, representing an increase of 19.1%. For the next few years, China mobile online shopping will likely maintain steady growth. Thefocal point of competition in China mobile ecommerce market has shifted from infrastructure service providers to integrated and accurate services providers.Drawing in users with compelling content in diversified scenes has become a trend.21The revenue for China mobile gaming industry reached RMB 144.58 billion for the year of 2017, according to the China Mobile Game Industry ResearchReport from iResearch. With increased investment by largescale enterprises in the sector of mobile games and the strict enforcement of the mobile game industryrelated regulatory policy guidelines, the mobile game market as a whole will become more organized and standardized.According to the Annual Analysis of China Mobile Reading Industry from Analysis, for the year of 2017, the mobile reading market in China reached toRMB 14.04 billion. By the end of 2016, the size of China mobile's reading market reached RMB 11.86 billion, showing an increase of 18.38% in 2017.The closed and boring environment for passengers of longdistance travel and high roaming charges lead to a strong demand to use our rail WiFi services.Passengers, through their own mobile phone, have access to the free WiFi network in each carriage, access to our rich mobile internet entertainment content andtravel services. According to the annual statistical bulletin of China Railway Corporation in 2017, there were about 6,030 trains in operation in China in 2017,consisting of 2,935 high speed trains and 3,095 express trains. The rail WiFi system that we have installed are currently all on express trains. The market value will bemultiplied several times following the extended coverage of service on other trains.Our StrengthsWe believe the following strengths differentiate us from our competitors:Our strategy is to build up personalized and targeted service products for travelers through rail WiFi networks, enabling our services to evolve into a coredriving distribution platform that provides content, news, games, ecommerce, OTO service, travel services and advertising and marketing. In comparison, ourcompetitors offer simple forms of media services on trains. We focus on personalized and targeted matching between users on long distance trips and services. Ourcompetitors focus on operating and generating internet traffic.We possess a complete set of technology system including network, client end and service and operation platform. We have patent protections for WiFiequipment on trains. Our technology strengths are briefly summarized below.WiFi EquipmentPatent protected. Supports WiFi/3G/4G telecom modules; 4 core CPU with X86 architecture, and SSD hard disk with big storage for localcontents.InfrastructureThe technology infrastructures include the application program system, big data gathering and processing systems, intelligence cloudsservice deployment structure systems and our WiFi hardware server deployment structure system. The operation center, big data center,contents center and railWiFi server system are built on this infrastructure. On the above layer, the equipment management platform,account and payment platform, contents management platform and advertisement distribution platform are set up for daily managementpurpose.LuoKuang strengthens the connection of services among people, setting and locations. In catering to people on the move, we anticipate strengthening therelationship between users and their locations in a given moment. Currently, LuoKuang provides the link between users and thirdparty service providers andprovides value added services to both users and thirdparty service providers. The connection is not simply a traffic diversion, but also the direct presentation ofrelevant services in the LuoKuang platform. The open API interface and independent product software package allows easy access by service providers anddevelopers and supports data service, advertisement operations, billing, users promotion and product marketing services. As an API product, LuoKuang does notcreate content or services. The content and services are provided by our partners in the LuoKuang platform. Now, the majority of top mobile internet content andservices providers in China have a presence in the Luokuang platform. Those include, but are not limited to, Toutiao, Wangyi News, iqiyi, Letv, YoudianCinema(Hollywood films), Sohu video, Phoenix Video, Kugou Music, FM Qingting, iReader, Baidu Literature, Phoenix Novel, Baidu Game, Meituan, Dianping, andsimilar content providers.22Our StrategyLuoKuang is positioned to provide API interface services and geographic information social services. The API interface services are provided within thetypical BC model. LuoKuang pushes the content and services from thirdparty service providers to users. The local businesses, service practitioners, residents, andforeign travelers are all defined as a “user” and may participate in social interactions based on local value information and generate UGC content. The socalled localvalue information is defined as information, views, evaluations, experiences and experience sharing related to the local cultural scene, native products,entertainment, food, tourism and activities.The LuoKuang user growth strategy is to have access to users through the travelers’ use of mobile devices in connection with longdistance train travel.Through deploying WiFi systems on trains and providing free WiFi access to passengers, LuoKuang is able to have consistent access to longdistance travelers.The WiFi system on the train has become a powerful user portal at the early stage of LuoKuang and has gained substantial user traffic. We are in a leading positionin terms of numbers of trains contracted and trains in operation with our free WiFi system. We have contracted with about 700 trains, which cover almost 560 millionannual passenger trips. As of the date of this report, approximately 290 trains are operating our rail WiFi system. We will continue to install our rail WiFi system inthe following years.The development strategy for LuoKuang encompasses the following:1.Enhance our local cycle service (a recommendation service system based on the location of travelers after their arrival, recommendations includingtourist attractions, local specialties and other items of interest), strengthen services for arrivals in the form of social interaction and focus on the valueof relationships between users and their current locations.2.Focus on the development of geographic positioning technology. Get the business of local cycle and users on train mixed together. We will put oureffort to maximize the synergy effect.3.Big Data: Behavior data about passenger trips is obtained via the traffic entrance of rail WiFi and these data will help to optimize our product.4.While enhancing setting service experiences and optimizing entertainment experiences, we will enrich ecommerce services on trains featuringrecommendations of customized products and ecommerce shopping guidance of products labeled with specific geographic location (and trafficdiversion).5.Focus on API positioning and attract more premium vertical service providers (contents and services).Intellectual PropertyWe have registered the following software copyrights, patents and trademarks for our business operations. We believe this intellectual property forms anintegral part of our competitive strength.23Patents:We have been granted some inventions by the State Intellectual Property Office of PRC. We possess a complete set of technology system includingnetwork, client end and service and operation platform. We have patent protections for WiFi equipment on trains. We have received the following patents:No.Name of patentTypeRegistrationNumberDate of Insurance1.Wireless communication multimedia chip business consumer informationacquisition terminal deviceInventionZL 2010 2 0528767.9Sep 21, 20112.A user behavior processing method and device for intelligent terminalInventionZL 2013 1 0301728.3May 27, 20153.A global positioning system terminal deviceInventionZL 2010 2 0253452.8Nov 7, 20114.A wireless multimedia serverInventionZL 2013 2 0220183.9Nov 13, 20135.Ordering system of passengers on trainInventionZL 2015 2 0095381.6Aug 5, 20156.A wireless multimedia serverInventionZL 2015 2 0201382.4Oct 28, 20157.An antenna structureInventionZL 2016 2 0424352.4Mar 1, 20178.Spatial data progressive transmission method and deviceInvention201010617383.9Jun 15, 20169.Methods and devices for conflict detection and avoidance of spatial entity elementlabelingInvention201010617385.8Mar 26, 201410.Spatial data processing method and deviceInvention201010617399.XJun 26, 201311.Method and device of spatial data simplificationInvention201010617400.9Mar 13, 201312.Method and device for judging the occlusion type of space entityInvention201010617403.2Sep 25, 201313.A method and device for distributed mapping of 3d model dataInvention201110274924.7Mar 26, 201414.Data simplification of 3d model, gradual transmission method and deviceInvention201110275336.5Mar 25, 201515.Spatial data transmission method and deviceInvention201110306393.5Dec 13, 201416.Methods and devices for spatial data processing, simplification and progressivetransmissionInvention201210104250.0Jun 10, 201517.Spatial data progressive transmission method and deviceInvention201310367021.2Jun 23, 201718.Simplification method and device of spatial dataInvention201310367128.7Sep 22, 201719.The method and device to accelerate transmission and display of graphic dataacross platformsInvention201210116149.7Aug 10, 201620.Methods and devices related to spatial data compression, decompression andprogressive transmissionInvention201310136682.4Nov 10, 2017We also have two patents outside of China.No.Name of patentCountryNationalRegistrationNumberDate ofInsurance1.Spatial data processing method and deviceJapan2012547439Jun 20, 20142.Methods and devices related to spatial data compression, decompression andprogressive transmissionU.S.A14/394,610Sep 5, 201724Software Copyrights:We have received the following software copyrights from the National Copyright Administration (“NCA”) of PRC:No.Name of CopyrightAchievement approachRegistration numberTime of obtainExpire time1.WAP PUSH Business operation platformsystemIndependent research anddevelopment2007SRBJ1464Jul 23, 200750 years2.TDSCDMA Streaming media businessmanagement platform software V1.0Independent research anddevelopment2009SRBJ0412Jan 22, 200950 years3.Content management platform systemsoftware V1.0Independent research anddevelopment2009SRBJ1374Apr 1, 200950 years4.Mobile multimedia broadcast electronicservice guide system software V1.0Independent research anddevelopment2009SRBJ1365Apr 1, 200950 years5.Mobile video business operation platformsystem V1.0Independent research anddevelopment2007SRBJ1463Jul 23, 200750 years6.Mobile multimedia broadcast emergencybroadcast platform software V1.0Independent research anddevelopment2010SRBJ0720Mar 5, 201050 years7.Mobile multimedia broadcast audio richmedia interactive platform softwareV1.0Independent research anddevelopment2010SRBJ0719Mar 5, 201050 years8.Printer typesetting and printing softwareV1.0Independent research anddevelopment2011SRBJ4190Sep 28, 201150 years9.Electronic newspaper business supportplatform software V1.0Independent research anddevelopment2011SRBJ4186Sep 28, 201150 years10.Public information business platformsoftware V1.0Independent research anddevelopment2011SRBJ3810Sep 27, 201150 years11.User interface scripting software V1.0Independent research anddevelopment2011SRBJ3809Sep 27, 201150 years12.Integrated business management platformsoftware V1.0Independent research anddevelopment2012SR003002Jan 16, 201250 years13.Interactive business development platformsoftwareIndependent research anddevelopment2011SRBJ4593Nov 29, 201150 years14.Instant messaging and messaging systemsoftwareIndependent research anddevelopment2014SR122231Aug 5, 201450 years15.General statistical platform software forclient productsIndependent research anddevelopment2014SR216662Dec 30, 201450 years16.CMMB Data broadcast managementplatform softwareIndependent research anddevelopment2009SRBJ0391Jan 22, 200950 years17.Integrated passenger train service systemIndependent research anddevelopment2012SR083665Sep 5, 201250 years25No.Name of CopyrightAchievement approachRegistration numberTime of obtainExpire time18.JHBY Train inspection managementsystemIndependent research anddevelopment2013SR015105Feb 21, 201350 years19.Integrated information engine platformsoftware V1.0Independent research anddevelopment2014SR040347Nov 30, 200150 years20.Super information engine developmentplatform software V5.0Independent research anddevelopment2014SR036792Mar 5, 200350 years21.Core map super network informationengine platform software V1.0Independent research anddevelopment2014SR036772Sep 15, 200750 years22.Integrated management of the grid gissoftware V1.0Independent research anddevelopment2014SR036808Jun 20, 200850 years23.Core map rural power grid equipment GPSpatrol system software V1.0Independent research anddevelopment2014SR036810Dec 10, 200850 years24.Diagram grid patrol PDA system softwareV1.0Independent research anddevelopment2014SR036778Dec 12, 200850 years25.Core map geographic information enginedesktop platform software V1.0Independent research anddevelopment2014SR036614Jan 15, 200950 years26.Integrated management of the gridgeographic information Web systemsoftware V1.0Independent research anddevelopment2014SR036799Mar 10, 200950 years27.Core map railway power supply equipmentGPS patrol system software V1.0Independent research anddevelopment2014SR036783Mar 25, 201050 years28.Core map network 3 d map server softwareV1.0Independent research anddevelopment2014SR036788Feb 20, 201150 years29.Core map network 3d map clientsoftwareV1.0Independent research anddevelopment2014SR036637Feb 22, 201150 years30.Core map 3d map network publishingplatform software V1.0Independent research anddevelopment2014SR036633Mar 10, 201150 years31.Core map 3d map network release pluginsystem software V1.0Independent research anddevelopment2014SR036622Mar 15, 201150 years32.Core map network 3d map smartphoneplatform software V1.0Independent research anddevelopment2014SR036638Apr 28, 201150 years33.Core map network GIS Shared mobileplatform software V1.0Independent research anddevelopment2014SR036634Oct 31, 201150 years34.Core map network GIS sharing platformsoftware V1.0Independent research anddevelopment2014SR036639Dec 16, 201150 yearsTrademarks:We have registered the following trademarks with the Trademark Office, State Administration for Industry and Commerce in the PRC:NoTrademarkClassification NumberValid PeriodRegistration Number1Y图形382010.04.212020.04.2067460692Y图形412010.09.072020.09.0667460673YRADIO文字352010.07.212020.07.2067334374YRADIO文字382010.04.21.2020.04.2067334385YRADIO文字412010.09.072020.09.0667334396LookLook图形382009.04.072019.04.0646660517LookLook图形422008.12.212018.12.2046660508YTV文字352010.07.212020.07.2067335799YTV文字382010.05.282020.05.27673357810YTV文字412010.09.072020.09.06673358111YTV文字422010.09.072020.09.06673358012YOUTV文字352010.07.212020.07.20673344013YOUTV文字382010.05.282020.05.27673344114xfeng文字352012.03.282022.03.27922914526NoTrademarkClassification NumberValid PeriodRegistration Number15xfeng文字382012.03.282022.03.27922916016xfeng文字412012.03.282022.03.27922919017xfeng文字422012.03.282022.03.27922922118中传视讯文字+图形422008.12.212018.12.20466604719中传视讯文字422008.12.212018.12.20466604820中传视讯文字382008.12.212018.12.20466604921新蜂文字382011.08.212021.08.20853890722新蜂文字422012.01.282022.01.27853907823新蜂.潮文字382011.08.212021.08.20853910424新蜂.潮文字422012.01.282022.01.27853914125新影力412014.08.282024.08.271228864326小人图形352014.08.282024.08.271228798527小人图形382014.08.282024.08.271228858028小人图形412014.08.282024.08.271228862929小人图形422014.08.282024.08.271228843530中传文字382014.08.282024.08.271228826731中传图形382014.08.282024.08.271228828932中童文字412014.08.072024.08.061221408533中童在线文字412014.08.072024.08.061221409234翠鸟文字382014.08.072014.08.061221405835翠鸟文字422014.08.072014.08.061221412536爱翠鸟文字382014.08.072024.08.061221406637爱翠鸟文字412014.08.072024.08.061221409638爱翠鸟文字422014.08.072024.08.061221412639翠鸟图形352014.08.072024.08.061221404040翠鸟图形382014.08.072024.08.061221407441翠鸟图形412014.08.072024.08.061221410042翠鸟图形422014.08.072024.08.061221413143信号小喇叭图形+CMEDIA412015.03.212025.03.201248043944LookLook图形382015.11.142025.11.131153342845LookLook图形422014.06.212024.06.201153372046LookLook文字382014.07.142024.07.131153406747LookLook文字422014.04.142024.04.131153422748L图形352014.02.282024.02.271153500249L图形382014.02.282024.02.271153507350L图形412014.02.282024.02.271153518151L图形422014.02.282024.02.271153526252箩筐图形412016.06.142026.06.131658022853箩筐图形422016.06.142026.06.131658022754箩筐文字422016.09.282026.09.271658024955箩筐文字412016.06.142026.06.131658025056箩筐文字352016.09.212026.09.201658025257箩筐文字92016.06.142026.06.131658025327NoTrademarkClassification NumberValid PeriodRegistration Number58箩筐图形382016.06.142026.06.131658022959箩筐图形352016.06.142026.06.131658023060箩筐图形92016.06.142026.06.131658023161微时光文字422016.09.282026.09.271658024762传游录屏文字92016.06.142026.06.131678214463传游录屏文字352016.06.142026.06.131678214364传游录屏文字382016.06.142026.06.131678214265传游录屏文字412016.06.142026.06.131678214166传游录屏文字422016.06.142026.06.131678214067录游器文字92016.06.142026.06.131678213568录游器文字352016.06.142026.06.131678213669录游器文字382016.06.142026.06.131678213770录游器文字412016.06.142026.06.131678213871录游器文字422016.06.142026.06.131678213972畅联TV文字412016.01.212026.01.201579246773畅联TV文字382016.01.212026.01.201579246874SuperEngine92016.01.212026.01.20812572275SuperEngine422016.01.212026.01.20812572876超擎9/422016.01.212026.01.201647320577SUPERENGINE9/422016.01.212026.01.2016473185*See below for an explanation of each classification number used in the table above.Classification No. 9: data processing apparatus, couplers (data processing equipment), computer software (recorded), monitors (computer programs), smartcards (integrated circuit cards), electrodynamic apparatus for the remote control of signals, alarms, and electric installations for the remote control of industrialoperations.Classification No. 35: auctioneering, sales promotion for others, marketing analysis, marketing research, importexport agencies, advisory services forbusiness management, business management for franchise, personnel management consultancy, relocation services for businesses, and systemization ofinformation into computer databases.Classification No. 38: Include services that enable at least sensory communication between two people. Such services include that allow one person to talkto another, send messages from one person to another, Make verbal or visual contact between one person and the other. This classification especially include theservice for broadcasting radio or television programs. Except for radio advertising services and telemarketing services.Classification No. 41: instruction services, teaching, education information, tuition, arranging and conducting of colloquiums, publication of electronicbooks and journals online, amusements, and vocational guidance.Classification No. 42: technical research, studies (technical project), computer software design, updating of computer software, recovery of computer data,computer systems analysis, installation of computer software, computer antivirus protection, and research and development for others. 28Business Certificates and QualificationsWe have obtained all necessary regulatory certifications to conduct our business in the PRC, including without limitation, the following: SoftwareEnterprise Recognition Certificate, Computer Information System Integration Qualification Certificate, Construction Enterprise Qualification Certificate, and SecurityTechnology & Protection Enterprise Certificate. We have also been properly certified as a hightech enterprise and have met the ISO 9001:2000 qualificationmanagement system.Legal ProceedingsAlthough we may, from time to time, be involved in litigation and claims arising out of our operations in the normal course of business, we do not believethat we are a party to any litigation that will have a material adverse impact on our financial condition or results of operations. To our knowledge, other than asdescribed below there are no material legal proceedings threatened against us. From time to time, we may be subject to various claims and legal actions arising in theordinary course of business. Following the consummation of the AEA, we became successor in interest to the legal proceedings described below.Litigation with Shanghai Fusheng Weier Intelligent Control Technology Co., Ltd.On January 22, 2016, Zhong Chuan Rui You and Shanghai Fusheng Weier Intelligent Control Technology Co., Ltd. (“Fusheng Weier”) signed a contract forequipment of $1,652,842 (RMB10,800,000). Since Zhong Chuan Rui You did not make the payments of $1,126,381 (RMB7,360,000) on the due dates, Fusheng Weierfiled a lawsuit against Zhong Chuan Rui You in Shanghai Xuhui District People's Court on October 8, 2016. On March 9, 2017, Xuhui District People's Court issuedthe verdict requiring Zhong Chuan Rui You to pay the overdue debts. In August 2017, C Media Limited made the payment of $512,075 (RMB3,346,000). Theremaining balance has been accrued in accounts payable. The payment schedule for the remaining balance is being negotiated by the two parties. On February 5,2018, a hearing was held adding Zhong Chuan Shi Xun as a defendant. The Group plans to settle the remaining balance within one year.Lawsuit with Gansu Jinlun Culture Media Co., Ltd.On August 22, 2014, Zhong Chuan Rui You and Gansu Jinlun Culture Media Co., Ltd. (“Gansu Jinlun”) signed a “Lanzhou Railway Bureau AirconditionedTrain WiFi Network System Advertising Operation Rights Agreement” for advertising on 72 trains of $1,467,880 (RMB9,604,633). Due to the dispute on theproject implementation, Zhong Chuan Rui You did not pay the advertising fee. On August 23, 2017, Gansu Jinlun filed a lawsuit with Gansu Intermediate People'sCourt. On December 19, 2017, Gansu Intermediate People's Court issued a verdict, ruling that Zhong Chuan Rui You settle the overdue advertising fee. Since only 18out of 72 trains have been installed with Wifi network system, Zhong Chuan Rui You disputed and appealed to the verdict. The next court trial date has not yet beendetermined.C Media and Gansu Jinlun are negotiating a potential settlement to resume the contract. According to the legal counsel, it is probable that the settlementwill amount to approximately $459,000 (RMB3,000,000); therefore, this amount has been accrued in accounts payable as at December 31, 2017.Litigation with Shenzhen Hua Xun Fang Zhou Technology Co., Ltd.On June 16, 2015, Zhong Chuan Rui You signed a cooperation agreement with Shenzhen Hua Xun Fang Zhou Technology Co., Ltd. (“Shenzhen Hua Xun”)and Xuesong Song, a major shareholder of C Media Limited. Pursuant to this agreement, Zhong Chuan Rui You procures equipment from Shenzhen Hua Xun.Xuesong Song acts as a joint liability guarantor for the entire debts of Zhong Chuan Rui You under this agreement. As Zhong Chuan Rui You did not make thepayments on the due dates, Shenzhen Hua Xun filed a lawsuit with Shenzhen Baoan District People's Court on May 31, 2016. On November 1, 2016, Zhong ChuanRui You, Xuesong Song and Shenzhen Hua Xun reached a settlement in Shenzhen Baoan District People's Court to settle $1,735,389 (RMB11,355,000) in fourinstalments. On December 30, 2017, the debt was assigned to C Media Limited.29C. ORGANIZATIONAL STRUCTUREThe following diagram illustrates our corporate structure and the place of formation and affiliation of each of our subsidiaries and affiliates as of September30, 2018.30The following diagram illustrates our corporate structure and the place of formation and affiliation of each of our subsidiaries and affiliates as of December31, 2017.Contractual Arrangements with Beijing Zhong Chuan Shi Xun Technology Limited’s Subsidiaries and Their Respective ShareholdersTo comply with the PRC legal restrictions on foreign ownership of companies that operate mobile application services, our subsidiaries operate in suchrestricted service areas in the PRC through certain PRC domestic companies, whose equity interests are held by certain management members or founders of the LKTechnology Ltd. Part of the registered capital of these PRC domestic companies was funded by certain management members or founders of LK Technology Ltd. LKTechnology Ltd., through its subsidiary Zhong Chuan Tian Xia Information and Technology (Shenzhen) Limited (the “WFOE”), has entered into an exclusivebusiness cooperation agreement with Beijing Zhong Chuan Shi Xun Technology Limited (“Zhong Chuan Shi Xun” or the “VIE”) the PRC domestic company, whichentitle the WFOE to receive a majority of profit of Zhong Chuan Shi Xun. In addition, Zhong Chuan Tian Xia Information and Technology (Shenzhen) Limited hasentered into certain agreements with those management members or founders, including equity interest pledge agreement of the equity interests held by thosemanagement members or founders and exclusive option agreement to acquire the equity interests in these companies when permitted by the PRC laws, rules andregulations. Details of the typical VIE structure of our significant consolidated VIE, primarily domestic companies associated with the operations such as ZhongChuan Shi Xun and its subsidiaries of Zhong Chuan Rui You, Huoerguosi Luokuang and Jiu Zhou Shi Dai, are set forth below: Exclusive Business Cooperation AgreementThe VIE has entered into an exclusive business services agreement with the WFOE, pursuant to which the WFOE provides exclusive business services tothe VIE. In exchange, the VIE pays a service fee to the WFOE which amounts to be no less than the 80% of the VIE’s aftertax profit, resulting in a transfer ofsubstantially all of the profits from the VIE to the WFOE.Exclusive Option AgreementThe VIE equity holders have granted the WFOE exclusive call options to purchase their equity interest in the VIE at an exercise price equal to the minimumprice as permitted by applicable PRC laws. The WFOE may nominate another entity or individual to purchase the equity interest, if applicable, under the call options.Each call option is exercisable subject to the condition that applicable PRC laws, rules and regulations do not prohibit completion of the transfer of the equityinterest pursuant to the call option. The VIE agrees not to distribute any dividends to the VIE equity holders without the approval of WFOE.31Equity Interest Pledge AgreementPursuant to the equity pledge agreement, the VIE equity holders have pledged all of their interests in the equity of the VIE as a continuing first prioritysecurity interest in favor of the WFOE to secure the performance of obligations by the VIEs and/or the equity holders under the exclusive business cooperationagreement. The WFOE is entitled to exercise its right to dispose of the VIE equity holders’ pledged interests in the equity of the VIE and has priority in receivingpayment by the application of proceeds from the auction or sale of such pledged interests, in the event of any breach or default under the exclusive businesscooperation agreement, if applicable. These equity pledge agreement remain in force until all the obligations under the exclusive business cooperation agreementhave been fulfilled.The exclusive business cooperation agreement and equity interest pledge agreement described above also enable the Company to receive substantially allof the economic benefits from the VIE by typically entitling the WFOE to all dividends and other distributions declared by the VIE and to any distributions orproceeds from the disposal by the VIE equity holders of their equity interests in the VIE.D. PROPERTY AND EQUIPMENTWe lease offices located at Lab 30 & Lab 32, SOHO 3Q, No 9, Guanghua Road, Chaoyang District, Beijing, which covers a floor space of 600 square meters.These leases expire at different times throughout 2018 and are renewable upon negotiation.ITEM 4A. UNRESOLVED STAFF COMMENTSNone.ITEM 5. OPERATING AND FINANCIAL REVIEW AND PROSPECTSA . OPERATING RESULTS.The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our consolidatedfinancial statements and the notes to those financial statements appearing elsewhere in this report. This discussion and analysis contains forwardlookingstatements that involve significant risks and uncertainties. As a result of many factors, such as our anticipated growth strategy, our plans to recruit moreemployees, our plans to invest in research and development to enhance our product or service lines, our future business development, results of operations andfinancial condition, expected changes in our net revenues and certain cost or expense items, our ability to attract and retain customers, trends and competitionin the enterprise mobile software application market, and the factors set forth elsewhere in this report, our actual results may differ materially from thoseanticipated in these forwardlooking statements. In light of those risks and uncertainties, there can be no assurance that the forwardlooking statementscontained in this report will in fact occur. You should not place undue reliance on the forwardlooking statements contained in this report.The forwardlooking statements speak only as of the date on which they are made, and, except to the extent required by U.S. federal securities laws, weundertake no obligation to update any forwardlooking statement to reflect events or circumstances after the date on which the statement is made or to reflectthe occurrence of unanticipated events. Further, the information about our intentions contained in this report is a statement of our intention as of the date of thisreport and is based upon, among other things, the existing regulatory environment, industry conditions, market conditions and prices and our assumptions as ofsuch date. We may change our intentions, at any time and without notice, based upon any changes in such factors, in our assumptions or otherwise.32Unless the context otherwise requires, all references to (i) “PRC” and “China” are to the People’s Republic of China; (ii) “U.S. dollar,” “$” and “US$”are to United States dollars; and (iii) “RMB”, “Yuan” and Renminbi are to the currency of the PRC or China.OverviewLuokung Technology was incorporated on October 27, 2009 under the laws of the British Virgin Islands. We are a holding company and conduct ouroperations through LK Technology Ltd., a British Virgin Islands limited liability company (“LK Technology”) and its whollyowned subsidiaries, MMB Limited andMobile Media (China) Limited and their respective subsidiaries and a contractuallycontrolled entity in the PRC named Beijing Zhong Chuan Shi Xun Technology,which hold the rights to deploy WiFi systems on about 700 trains in China, including 290 trains in which WiFi systems have already been installed and are inoperation. In May 2010, we consummated an initial public offering of our American Depository Shares, or ADSs, for gross proceeds of $16 million, and our ADSswere listed on the NASDAQ Capital Market under the ticker symbol “KONE”. Our ordinary shares are not currently listed on any trading market. Our AmericanDepository Shares (“ADSs”) were voluntarily delisted from the NASDAQ Capital Market on September 19, 2018. We have applied to NASDAQ for the listing of ourordinary shares on the NASDAQ Capital Market and received an approval for listing of Ordinary Shares on August 6, 2018, and as of the date of this transitionreport, that application and approval are currently under review.On August 17, 2018, we consummated an asset exchange transaction, pursuant to which we exchanged all issued and outstanding capital stock in TopskyInfoTech Holdings Pte Ltd., the parent of Softech, for the issued and outstanding capital stock of LK Technology (the “Asset Exchange”). In connection with theAsset Exchange, we changed our name on August 20, 2018, and on September 20, 2018, completed the issuance to the shareholders of C Media Limited, the formerparent of LK Technology, of (i) 185,412,599 of our ordinary shares, par value $0.01 per share and (ii) 1,000,000 of our preferred shares. Upon the consummation of theAsset Exchange, we ceased our previous business operations and became a company focused on the provision of WiFi and mobile application products for longdistance travelers in China.On August 25, 2018, LK Technology entered into a Stock Purchase Agreement (the “Agreement”) with the shareholders (“Shareholders”) of SuperengineHoldings Limited, a limited liability company organized under the laws of the British Virgin Islands (the “Superengine”), pursuant to which LK Technology acquiredall of the issued and outstanding capital stock of Superengine for an aggregate purchase price of US$60 million (the “Purchase Price”), which are paid by theissuance of our Ordinary Shares in an amount equal to the quotient of (x) the Purchase Price divided by (y) the average of the closing prices of the Ordinary Shareson the NASDAQ Capital Market over the 12 months period preceding July 31, 2018. We are a party to the Agreement in connection with the issuance of theOrdinary Shares and certain other limited purposes.Results of operations for the fiscal year ended December 31, 2017 compared to the fiscal year ended December 31, 2016.RevenueWe provide displaybased online advertising services to customers by integrating text description, image and video, and displaying the advertisements in aprominent position of LuoKuang Application. We recognize revenue in accordance with ASC 605, over the contractual term based on the agreements andconfirmation letters signed by both parties, commencing on the date the customer’s advertisement is displayed on our platform.For the year ended December 31, 2017, we had revenue of $26,082,417, as compared to revenue of $5,233,145 for the year ended December 31, 2016, anincrease of $20,849,272, or 398.4%, which was primarily due to the increase of our advertising clients.Cost of revenueOur cost of revenue primarily consists of depreciation, labor cost, WiFi equipment installation fees, data charges, annual payments to local railway bureau,other overhead costs.33Cost of revenue for the year ended December 31, 2017 was $5,547,779, representing a decrease of $767,725 or 12.2% as compared to $6,315,504 for the yearended December 31, 2016. The decrease was primarily attributable to the decrease in labor cost as a result of our cost control and a decrease in the number ofmaintenance staff. Additionally, data charges decreased as train passengers prefer using their mobile data, leading to a decrease in 3G and 4G data.Selling and marketing expenseOur selling and marketing expense mainly include promotional and marketing expenses and compensation for our sales and marketing personnel.Selling expense totaled $23,908,733 for the year ended December 31, 2017, as compared to $6,209,804 for the year ended December 31, 2016, an increase of$17,698,929 or 285.0%. The increase was primarily attributable to the increase in promotional and marketing activities conducted by the Company.General and administrative expenseOur general and administrative expenses consist primarily of salaries and benefits for our general and administrative personnel, rent, fees and expenses forlegal, accounting and other professional servicesGeneral and administrative expense totaled $2,451,249 for the year ended December 31, 2017, as compared to $2,108,854 for the year ended December 31,2016, an increase of $342,395 or 16.2%.Research and development expenses.Research and development expenses primarily consist of salaries and benefits for research and development personnel.Research and development expenses totaled $1,046,198 for the year ended December 31, 2017, as compared to $2,882,202 for the year ended December 31,2016, a decrease of $1,836,004 or 63.7%. The decrease was primarily attributable to the Company reduced its expenses in research and development temporarily asour products are quite stable at present.Loss from operationsAs a result of the factors described above, for the year ended December 31, 2017, loss from operations amounted to $6,871,542, as compared to loss fromoperations of $12,283,219 for the year ended December 31, 2016, a decrease of $5,411,677, or 44.1%.Other income/expenseOther income/expense mainly include interest income from bank deposits, foreign currency transaction gain, and loss from investment.Net lossAs a result of the factors described above, our net loss was $6,810,454 for the year ended December 31, 2017, compared to net loss of $13,049,031 for theyear ended December 31, 2016, a decrease of $6,238,577 or 47.8%.Foreign currency translation adjustmentOur reporting currency is the U.S. dollar. The functional currency of our parent company and subsidiaries of Merchant Supreme and Prime Cheer is the U.S.dollar and the functional currency of the Company’s subsidiaries incorporated in China is the Chinese Renminbi (“RMB”). The financial statements of oursubsidiaries incorporated in China are translated to U.S. dollars using period end rates of exchange for assets and liabilities, and average rates of exchange (for theperiod) for revenue, costs, and expenses. Net gains and losses resulting from foreign exchange transactions are included in the consolidated statements ofoperations and comprehensive loss. As a result of foreign currency translations, which are a noncash adjustment, we reported a foreign currency translation gain of$90,671 for the year ended December 31, 2017, as compared to a foreign currency translation loss of $387,375 for the year ended December 31, 2016. This noncashgain had the effect of increasing/decreasing our reported comprehensive income/loss.34Comprehensive lossAs a result of our foreign currency translation adjustment, we had comprehensive loss for the year ended December 31, 2017 of $6,719,783, compared tocomprehensive loss of $12,661,656 for the year ended December 31, 2016.B. LIQUIDITY AND CAPITAL RESOURCESThe information contained in “Item 5. Operating and Financial Review and Prospects – A. Operating Results – Liquidity and Capital Resources” isincorporated herein by reference.C. RESEARCH AND DEVELOPMENT, PATENTS AND LICENSES, ETC.The discussions of our research and development activities were contained in “Item 4. Information about our Company – B. Business Overview –Research and Development” and “Item 5. Operating and Financial Review and Prospects – A. Operating Results – Operating Expenses – Research and DevelopmentExpenses” are incorporated herein by reference. In the years ended December 31, 2017 and 2016, we spent $1,046,198 and $2,882,202, respectively, on research anddevelopment activities.D. TREND INFORMATION.Industry and Market OutlookChina has awarded licenses to mobile phone companies to provide the superfast 4G network to customers. The licenses, which are designed to give mobilephone users faster access to services, were granted by the government to China Mobile, China Unicom Hong Kong and China Telecom. Since the grants, ChinaMobile has offered 4G to subscribers from December 18, 2013. China Unicom and China Telecom, the country's other two major carriers, also offer 4G wireless. Thenumber of China Mobile 4G customers has exceeded 900 million by the end of October in 2017. The move greatly bolstered business for telecom equipment makersand a range of other companies.Under China’s 12th FiveYear Plan, a key priority is for China to transition from “Made in China” to “Designed in China.” In order to achieve this goal, thegovernment plans to heavily invest in science and technology education and R&D so as to further develop China’s intellectual property rights system and support“NextGeneration IT” as a Strategic Emerging Industry (SEI). Additionally, China plans to upgrade the technological capabilities of private and public services,including “triple play” services (the convergence of telecom, broadcasting and Internet networks), ecommerce, and egovernment and statistics systems.Furthermore, the government plans to invest in R&D of the "Internet of things" and cloud computing, and develop digital and virtual technologies.E. OFFBALANCE SHEET ARRANGEMENTSWe have not entered into any financial guarantees or other commitments to guarantee the payment obligations of any third parties. We have not enteredinto any derivative contracts that are indexed to our shares and classified as shareholder’s equity, or that are not reflected in our consolidated financial statements.Furthermore, except for the mortgage referenced above, we do not have any retained or contingent interest in assets transferred to an unconsolidated entity thatserves as credit, liquidity or market risk support to such entity. We do not have any variable interest in any unconsolidated entity that provides financing, liquidity,market risk or credit support to us or engages in leasing, hedging or research and development services with us.35F. TABULAR DISCLOSURE OF CONTRACTUAL OBLIGATIONSAs of December 31, 2017, we did not have any contractual obligations required to be disclosed in this Item 5.F. ITEM 6. DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES.A. DIRECTORS AND SENIOR MANAGEMENT.Executive Officers and DirectorsThe following table sets forth the names and ages as of the date of this transition report of each of our executive officers and directors:NameAgePositionXuesong Song50Chief Executive Officer, Chairman and DirectorDongpu Zhang50PresidentJie Yu34Chief Financial OfficerKegang Peng46Vice President and DirectorChuang Tao51DirectorDennis Galgano (1)(2)69Director (Independent)Jin Shi (1)(2)49Director (Independent)Jiming Ha (1)(3)56Director (Independent)Zhihao Xu (3)42Director (Independent)(1)Member of the Audit Committee.(2)Member of the Compensation Committee.(3)Member of the Nominating and Corporate Governance Committee.Set forth below is biographical information concerning our executive officers and directors.Xuesong Song is a cofounder of C Media Limited and served as its chairman of the board of directors and chief executive officer from 2012 until theconsummation of the AEA. From February 2014 through April 2017, Mr. Song served as a director of Seven Stars Cloud Group, Inc. (NASDAQ: SSC) and fromJanuary 2013 through February 2015, Mr. Song served as a director of Pingtan Marine Enterprise Ltd. (NASDAQ: PME). From May 2006 through January 2009, Mr.Song served as the Chairman of the Board of ChinaGrowth North Acquisition Corporation, a special purpose acquisition company, which acquired UIB GroupLimited in January 2009, in which he remains a director. Mr. Song has been a principal of Chum Capital Group Limited since August 2001, a merchant banking firmthat invests in growth Chinese companies and advises them in financings, mergers & acquisitions and restructurings, and chief executive officer of Beijing ChumInvestment Co., Ltd. since December 2001. Mr. Song has been a director of Mobile Vision Communication Ltd. since July 2004. Mr. Song received a Master’s ofBusiness Administration degree from Oklahoma City/Tianjin Program.Dongpu Zhang was appointed as the President of the Company effective on August 25, 2018. Mr. Dongpu Zhang has served as the General Manager ofSuperEngine Graphics Software Technology Development (Suzhou) Co., Ltd. (“SuperEngine Suzou”) and the Chief Executive Officer of SuperEngine HoldingLimited since September 2016. From February, 2014 to August, 2016, Mr. Zhang served as vice president of Industrial Development Group under China Fortune LandDevelopment Co., Ltd. From March, 2009 to February, 2014, Mr. Zhang served as the vice president of Aerospace Science and Technology Holding Group Co., Ltd.Mr. Zhang receive his Master Degree of Computer Science from Harbin Institute of Technology in 1994 and his Bachelor Degree of information system fromChangsha Institute of technology in 1991.Jie Yu served as the chief financial officer of C Media Limited from January 2018 until the consummation of the asset exchange transactions. From June 2016to January 2018, Mr. Yu served as chief financial officer and secretary of the board of directors of MTI Environment Group Limited. Prior to joining MTI, Mr. Yuserved as the senior manager at DA HUA CPA from November 2012 to May 2016. Previously, Mr. Yu served as the manager at Crowe Horwath (Hong Kong) CPA.Mr. Yu holds a bachelor degree in accounting and finance from University of Auckland and postgraduate diploma in accounting from University of Auckland.36Kegang Peng served as the Vice Chairman of the board of directors C Media Limited from October 2014 to the consummation of the asset exchangetransactions, and is now a member of the Company’s board of directors. Previously, from 2012 to 2014, Mr. Peng was chairman of the board and founder of JiangsuSuqian Jinghaiboyuan Information and Technology Co., Ltd. Mr. Peng studied at Beijing University of Aeronautics and Astronautics majoring computer andapplication.20F 1 f20f2017_luokungtech.htm AMENDMENT NO. 1 TO FORM 20FUNITED STATESSECURITIES AND EXCHANGE COMMISSIONWASHINGTON, D.C. 20549FORM 20F☐ REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934OR☐ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934For the Fiscal year ended _____________OR☒ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934For the transition period from October 1, 2017 to December 31, 2017☐ SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934Date of event requiring this shell company report Commission file number: 00134738Luokung Technology Corp.(Exact name of Registrant as specified in its charter)Not applicable(Translation of Registrant’s name into English)British Virgin IslandsLAB 32, SOHO 3Q, No 9, Guanghua Road, Chaoyang District, BeijingPeople’s Republic of China, 100020(Jurisdiction of incorporation or organization)(Address of principal executive offices)Mr. Muqiao GengLAB32, SOHO 3Q, No 9, Guanghua Road, Chaoyang District, BeijingPeople’s Republic of China 100020Tel: (86) 1085866721(Name, telephone, Email and/or facsimile number and address of company contact person)Securities registered or to be registered pursuant to Section 12(b) of the Act:Title of each className of each exchange on which registeredOrdinary shares, par value $0.01 per shareNonePreferred shares, par value $0.01 per shareNoneSecurities registered or to be registered pursuant to Section 12(g) of the Act:none(Title of Class)Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act:none(Title of Class)Indicate the number of outstanding shares of each of the issuer’s classes of capital or common stock as of the close of the period covered by the transitionreport. 187,097,599 Ordinary Shares, including 186,383,224 Ordinary Shares represented by 714,375 American Depositary Shares, and 1,000,000 Preferred Sharesoutstanding as of September 20, 2018.Indicate by check mark if the registrant is a wellknown seasoned issuer, as defined in Rule 405 of the Securities Act. ☐ Yes ☒ NoIf this report is an annual or transition report, indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of theSecurities Exchange Act of 1934. ☐ Yes ☒ NoIndicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirementsfor the past 90 days. ☒ Yes ☐ NoIndicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File requiredto be submitted and posted pursuant to Rule 405 of Regulation ST (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that theregistrant was required to submit and post such files). ☒ Yes ☐ NoIndicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a nonaccelerated filer. See definition of “accelerated filer andlarge accelerated filer” in Rule 12b2 of the Exchange Act. (Check one):Large accelerated filer ☐ Accelerated filer ☐ Nonaccelerated filer ☒Indicate by check mark which basis of accounting the registrant has used to prepare the financial statements included in this filing.U.S. GAAP ☒International Financial Reporting Standards as issuedby the International Accounting Standards Board ☐Other ☐If “Other” has been checked in response to the previous question, indicate by check mark which financial statement item the registrant has elected tofollow. Item 17 ☐ Item 18 ☐If this is an transition report, indicate by check mark whether the registrant is a shell company (as defined in Rule 12b2 of the ExchangeAct). ☐ Yes ☒ NoExplanatory NoteLuokung Technology Corp. (the “Company”) is filing this transition report on Form 20F (“Transition Report”) in connection with the completion of theexchange of certain of its assets for substantially all of the assets of C Media Limited (“C Media”) pursuant to that Asset Exchange Agreement, dated January 25,2018 (the “Original AEA”), as supplemented by the Addendum to Asset Exchange Agreement, dated October 3, 2018 (the “Addendum” and together with theOriginal AEA, the “AEA”). Following the consummation of the AEA, on October 4, 2018, the Company changed its fiscal year end from September 30 to the fiscalyear end used by C Media, December 31. This Transition Report covers the threemonth period from Octorber 1, 2017 to December 31, 2017, and the fiscal yearsdescribed herein.In this transition report:●References to the “Company”, “we”, “our” and “us” are to Luokung Technology Corp. and its consolidated subsidiaries and variable interestentity, except as the context otherwise requires;●This transition report on Form 20F covers the threemonth period from October 1, 2017 through December 31, 2017 (the “Transition Period”) andreflects our financial results thereof. Prior to this transition report on Form 20F, our two most recent annual reports on Form 20F cover the fiscalyears ended September 30, 2017 and September 30, 2016, respectively, and reflect financial results for the respective twelvemonth periods fromOctober 1 to September 30. Unless otherwise noted, all references to years are to the calendar year from January 1 to December 31 and referencesto our fiscal year or years are to the fiscal year or years which, prior to the Transition Period, ended September 30, while from and after theTransition Period, ended December 31;●References to an “ADS” are to an American Depositary Share, each of which represents one of our Ordinary Shares with a par value of $.01 pershare.Special Note Regarding Forwardlooking StatementsThis transition report contains forwardlooking statements that involve risks and uncertainties. These statements involve known and unknown risks,uncertainties and other factors that may cause our actual results, performance or achievements to be materially different from those expressed or implied by theforwardlooking statements.You can identify these forwardlooking statements by words or phrases such as “may,” “will,” “expect,” “anticipate,” “aim,” “estimate,” “intend,” “plan,”“believe,” “likely to” or other similar expressions. We have based these forwardlooking statements largely on our current expectations and projections about futureevents and financial trends that we believe may affect our financial condition, results of operations, business strategy and financial needs. You should not placeundue reliance on these forwardlooking statements, which apply only as of the date of this transition report. These forwardlooking statements include:●our future business development, results of operations and financial condition;●expected changes in our net revenues and certain cost or expense items;●our ability to attract and retain customers; and●trends and competition in the enterprise mobile software application market.You should read this transition report thoroughly with the understanding that our actual future results may be materially different from, and/or worse, thanwhat we expect. We qualify all of our forwardlooking statements by these cautionary statements. Other sections of this transition report include additional factorswhich could adversely impact our business and financial performance. Moreover, we operate in an evolving environment. New risk factors and uncertainties emergefrom time to time and it is not possible for our management to predict all risk factors and uncertainties, nor can we assess the impact of all factors on our business orthe extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forwardlooking statements.This transition report also contains estimates, projections and statistical data related to the market for the provision of WiFi and mobile applications inChina. This market data, including data from IDC, a leading provider of market data and intelligence, speaks as of the date it was published and includes projectionsthat are based on a number of assumptions and are not representations of fact. The market for the provision of WiFi and mobile applications in China may not growat the rates projected by the market data, or at all. The failure of the market to grow at the projected rates may materially and adversely affect our business and themarket price of our ADSs. In addition, the rapidly changing nature of the market for the provision of WiFi and mobile applications subjects any projections orestimates relating to the growth prospects or future condition of our market to significant uncertainties. If any one or more of the assumptions underlying the marketdata proves to be incorrect, actual results may differ from the projections based on these assumptions.You should not rely upon forwardlooking statements as predictions of future events. We undertake no obligation to update or revise any forwardlookingstatements, whether as a result of new information, future events or otherwise.TABLE OF CONTENTSPart IItem 1.Identity of Directors, Senior Management and Advisers.1Item 2.Offer Statistics and Expected Timetable.1Item 3.Key Information.1A.Selected Financial Data.1B.Capitalization and Indebtedness.3C.Reasons for the Offer and Use of Proceeds.3D.Risk Factors.3Item 4.Information on the Company.19A.History and Development of the Company.19B.Business Overview.20C.Organizational Structure.30D.Property, Plants and Equipment.32Item 4A.Unresolved Staff Comments.32Item 5.Operating and Financial Review and Prospects.32A.Operating Results.32B.Liquidity and Capital Resources.35C.Research and Development, Patents and Licenses, etc.35D.Trend Information.35E.Offbalance Sheet Arrangements.35F.Tabular Disclosure of Contractual Obligations.36Item 6.Directors, Senior Management and Employees.36A.Directors and Senior Management.36B.Compensation.37C.Board Practices.40D.Employees.43E.Share Ownership.43Item 7.Major Shareholders and Related Party Transactions.44A.Major Shareholders.44B.Related Party Transactions.45C.Interests of Experts and Counsel.45Item 8.Financial Information.45A.Consolidated Statements and Other Financial Information.45B.Significant Changes.46Item 9.The Offer and Listing.46A.Offer and Listing Details.46B.Plan of Distribution.47C.Markets.47D.Selling shareholders.48E.Dilution.48F.Expenses of the issue.48Item 10.Additional Information.48A.Share Capital.48B.Memorandum and Articles of Association.48C.Material Contracts.53D.Exchange Controls.54E.Taxation.61F.Dividends and Paying Agents.67G.Statement by Experts.67H.Documents on Display.67I.Subsidiary Information.68Item 11.Quantitative and Qualitative Disclosures about Market Risk.68Item 12.Description of Securities Other than Equity Securities.69A.Debt Securities.69B.Warrants and Rights.69C.Other Securities.69D.American Depositary Shares.69iPart IIItem 13.Defaults, Dividend Arrearages and Delinquencies.71Item 14.Material Modifications to the Rights of Security Holders and Use of Proceeds.71Item 15.Controls and Procedures.71Item 16.[Reserved.]72Item 16A.Audit Committee Financial Expert.72Item 16B.Code of Ethics.73Item 16C.Principal Accountant Fees and Services.73Item 16D.Exemptions from the Listing Standards for Audit Committees.73Item 16E.Purchases of Equity Securities by the Issuer and Affiliated Purchasers.73Item 16F.Change in Registrant’s Certifying Accountant.73Item 16G.Corporate Governance.73Item 16H.Mine Safety Disclosure.73Part IIIItem 17.Financial Statements.74Item 18.Financial Statements.74Item 19.Exhibits.74Index to Consolidated Financial StatementsF1iiPART IITEM 1. IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS.The directors of Luokung Technology Corp. are Xuesong Song, Kegang Peng, Dennis Galgano, Jin Shi, Jiming Ha, Zhihao Xu and Chuang Tao. Thebusiness address for our directors is LAB 32, SOHO 3Q, No 9, Guanghua Road, Chaoyang District, Beijing, People’s Republic of China.Moore Stephens CPA Limited has served as our auditor since October 5, 2018, and is located at 801806 Silvercord Tower 1, 30 Canton road, Tsimshatsui,Kowloon, Hong Kong. BDO China Shun Lun Pan Certified Public Accountants LLP served as our auditors for the last three years, and are located at 4F, No. 61Nanjing Road, Shanghai, People’s Republic of China.Garvey Schubert Barer, P.C., serves as our legal counsel in the United States, and is located at Flour Mill Building, 1000 Potomac Street NW, Suite 200,Washington, D.C., 200073501.Conyers Dill & Pearlman serves as our legal counsel with regard to the laws of the British Virgin Islands, and is located at 29th Floor, One Exchange Square,8 Connaught Place, Central, Hong Kong.ITEM 2. OFFER STATISTICS AND EXPECTED TIMETABLE.Not applicable.ITEM 3. KEY INFORMATION.A. SELECTED FINANCIAL DATA.Luokung Technology Corp. and its consolidated subsidiaries (“Luokung Technology”, “we”, “us”, or “the Company”) consummated an asset exchangeagreement pursuant to which we exchanged our existing assets with those of C Media Limited (the “Asset Exchange”) on August 17, 2018, and we changed ourname from Kingtone Wirelessinfo Solution Holding Ltd. to our current name on August 20, 2018. On October 4, 2018, in connection with the consummation of the Asset Exchange, we changed our fiscal year end from September 30 to December 31.1The selected financial data for the fiscal years ended December 31 2017 and 2016 have been derived from our audited consolidated and combined financialstatements. The selected consolidated and combined financial data should be read in conjunction with our audited financial statements and the accompanying notesand “Item 5 – Operating and Financial Review and Prospects.” Our consolidated and combined financial statements are prepared and presented in accordance withUnited States generally accepted accounting principles, or U.S. GAAP. Our historical results do not necessarily indicate our results expected for any future periods.You should not view our historical results as an indicator of our future performance.LK TECHNOLOGY LTD. AND SUBSIDIARIESSELECTED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS(IN U.S. DOLLARS)For the years ended December 31,20172016Revenues$26,082,417$5,233,145Less: Cost of revenues5,547,7796,315,504Less: Operating expenses:Selling and marketing23,908,7336,209,804General and administrative2,451,2492,108,854Research and development1,046,1982,882,202Total operating expenses27,406,18011,200,860Loss from operations(6,871,542)(12,283,219)Other income (expense):Interest expense(26,611)(4,412)Foreign exchange gains(losses)350,679(298,257)Loss from investment(428,571)Other income (expense), net(262,980)(34,572)Total other income (expense), net61,088(765,812)Loss before income taxes(6,810,454)(13,049,031)Income taxesNet loss$(6,810,454)$(13,049,031)Other comprehensive income:Foreign currency translation adjustment90,671387,375Total comprehensive loss$(6,719,783)$(12,661,656)2LK TECHNOLOGY LTD. AND SUBSIDIARIESSELECTED CONSOLIDATED BALANCE SHEETS(IN U.S. DOLLARS)As of December 31,20172016Accounts receivable, net of allowance for doubtful accounts9,729,6251,865,836Amounts due from related parties11,760,692Property and equipment, net5,044,8727,771,027Goodwill7,239,9367,239,936TOTAL ASSETS37,582,85821,114,832Accounts payable8,784,5186,446,584Accrued liabilities and other payables12,962,91211,329,613Total liabilities25,311,11333,905,520Total Shareholder’s Equity (Deficit)12,271,745(12,790,688)TOTAL LIABILITIES AND SHAREHOLDER’S EQUITY (DEFICIT)37,582,85821,114,832B. CAPITALIZATION AND INDEBTEDNESS.Not applicable.C. REASONS FOR THE OFFER AND USE OF PROCEEDS.Not applicable.D. RISK FACTORS.An investment in our ADSs and ordinary shares involves a high degree of risk. You should carefully consider the risks and uncertainties described belowtogether with all other information contained in this transition report, including the matters discussed under “Special Note Regarding ForwardLooking Statements,”before you decide to invest in our ADSs or ordinary shares. You should pay particular attention to the fact that we are a holding company with substantialoperations in China and are subject to legal and regulatory environments that in many respects differ from those of the United States. If any of the following risks, orany other risks and uncertainties that are not presently foreseeable to us, actually occur, our business, financial condition, results of operations, liquidity and ourfuture growth prospects would be materially and adversely affected. You should also consider all other information contained in this transition report beforedeciding to invest in our ADSs or ordinary shares.Risks Related to Our Company and Our IndustryThe Company had incurred negative cash flows from operating activities and net losses as of December 31, 2017. These matters raise substantial doubt aboutthe Company’s ability to continue as a going concern.The Company’s consolidated financial statements are prepared using generally accepted accounting principles in the United States of America applicableto a going concern, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. As of and for the year endedDecember 31, 2017, the Company had incurred significant operating losses and working capital deficit. The ability of the Company to continue as a going concern isdependent on the Company obtaining adequate capital to fund operating losses until it becomes profitable. If the Company is unable to obtain adequate capital, itcould be forced to cease operations. The accompanying consolidated financial statements do not include any adjustments that might be necessary if the Companyis unable to continue as a going concern.3We may undertake acquisitions, investments, joint ventures or other strategic alliances, which could have a material adverse effect on our ability to manageour business. In addition, such undertakings may not be successful.Our strategy includes plans to grow both organically and through acquisitions, participation in joint ventures or other strategic alliances. Joint venturesand strategic alliances may expose us to new operational, regulatory and market risks, as well as risks associated with additional capital requirements. We may not beable, however, to identify suitable future acquisition candidates or alliance partners. Even if we identify suitable candidates or partners, we may be unable tocomplete an acquisition or alliance on terms commercially acceptable to us. If we fail to identify appropriate candidates or partners, or complete desired acquisitions,we may not be able to implement our strategies effectively or efficiently. In addition, our ability to successfully integrate acquired companies and their operations may be adversely affected by several factors. These factorsinclude:1.diversion of management’s attention;2.difficulties in retaining customers of the acquired companies;3.difficulties in retaining personnel of the acquired companies;4.entry into unfamiliar markets;5.unanticipated problems or legal liabilities; and6.tax and accounting issues.If we fail to integrate acquired companies efficiently, our earnings, revenue growth and business could be negatively affected.Due to intense competition for highlyskilled personnel, we may fail to attract and retain enough sufficiently trained employees to support our operations; ourability to bid for and obtain new projects may be negatively affected and our revenues could decline as a result.The IT industry relies on skilled employees, and our success depends to a significant extent on our ability to attract, hire, train and retain qualifiedemployees. There is significant competition in China for professionals with the skills necessary to develop the products and perform the services we offer to ourcustomers. Increased competition for these professionals, in the mobile application design area or otherwise, could have an adverse effect on us if we experiencesignificant increase in the attrition rate among employees with specialized skills, which could decrease our operating efficiency and productivity and could lead to adecline in demand for our services.In addition, our ability to serve existing customers and business partners and obtain new business will depend, in large part, on our ability to attract, trainand retain skilled personnel that enable us to keep pace with growing demands for wifi connectivity and mobile applications, evolving industry standards andchanging customer preferences. Our failure to attract, train and retain personnel with the qualifications necessary to fulfill the needs of our existing and futurecustomers or to assimilate new employees successfully could have a material adverse effect on our business, financial condition and results of operations. Ourfailure to retain our key personnel on business development or find suitable replacements of the key personnel upon their departure may lead to shrinking newimplementation projects, which could materially adversely affect our business.4Our business depends substantially on the continuing efforts of our senior executives and other key personnel, and our business may be severely disrupted if welose their services.Our future success heavily depends upon the continued services of our senior executives and other key employees, particularly since we recentlyappointed a new chairman. We are reliant on the services of Mr. Xuesong Song, our chairman, chief executive officer and member of our board of directors. If one ormore of our senior executives or key employees is unable or unwilling to continue in his or her present position, we may not be able to replace such employee easily,or at all, we may incur additional expenses to recruit, train and retain replacement personnel, our business may be severely disrupted, and our financial condition andresults of operations may be materially adversely affected.Our business could suffer if our executives and directors compete against us and our noncompetition agreements with them cannot be enforced.If any of our senior executives or key employees joins a competitor or forms a competing company, we may lose customers, knowhow and keyprofessionals and staff members to them. Also, if any of our business development managers who keep a close relationship with our customers and businesspartners joins a competitor or forms a competing company, we may lose customers, and our revenues may be materially adversely affected. Most of our executiveshave entered, or will soon enter, into employment agreements with us that contain or will contain noncompetition provisions. However, if any dispute arisesbetween our executive officers and us, such noncompetition provisions may not be enforceable, especially in China, where all of these executive officers and keyemployees reside, in light of the uncertainties with China’s legal system. See “Risk Factors — Risks Related to Doing Business in China — Uncertainties withrespect to the PRC legal system could adversely affect us.”Our computer networks may be vulnerable to security risks that could disrupt our services and adversely affect our results of operations.Our computer networks may be vulnerable to unauthorized access, computer hackers, computer viruses and other security problems caused byunauthorized access to, or improper use of, systems by third parties or employees. A hacker who circumvents security measures could misappropriate proprietaryinformation or cause interruptions or malfunctions in operations. Computer attacks or disruptions may jeopardize the security of information stored in andtransmitted through computer systems and mobile devices of our customers. Actual or perceived concerns that our systems may be vulnerable to such attacks ordisruptions may deter customers from using our services. As a result, we may be required to expend significant resources to protect against the threat of thesesecurity breaches or to alleviate problems caused by these breaches, which could adversely affect our results of operations.If we do not continually enhance our solutions and service offerings, we may have difficulty in retaining existing customers and attracting new customers.We believe that our future success will depend, to a significant extent, upon our ability to enhance our existing applications and platform, and to introducenew features to meet the preferences and requirements of our customers in a rapidly developing and evolving market. Unexpected technical, operational, distributionor other problems could delay or prevent the introduction of one or more of these products or services, or any products or services that we may plan to introduce inthe future. Our present or future products may not satisfy the evolving preferences and tastes of our customers, and these solutions and services may not achieveanticipated market acceptance or generate incremental revenue. If we are unable to anticipate or respond adequately to the need for service or productenhancements due to resource, technological or other constraints, our business, financial condition and results of operations could be materially and adverselyaffected.5If we are unable to develop competitive new products and service offerings our future results of operations could be adversely affected.Our future revenue stream depends to a large degree on our ability to utilize our technology in a way that will allow us to offer new types of mobileapplications and services to a broader customer base. We will be required to make investments in research and development in order to continually develop newsoftware applications and related service offerings, enhance our existing platform, mobile applications and related service offerings and achieve market acceptanceof our mobile applications and service offerings. We may incur problems in the future in innovating and introducing new mobile applications and service offerings.Our developmentstage mobile applications may not be successfully completed or, if developed, may not achieve significant customer acceptance. If we are unableto successfully define, develop and introduce competitive new mobile applications, and enhance existing mobile applications, our future results of operations wouldbe adversely affected. The timely availability of new applications and their acceptance by customers are important to our future success. A delay in the developmentof new applications could have a significant impact on its results of operations.Changes in technology could adversely affect our business by increasing our costs, reducing our profit margins and causing a decline in our competitiveness.China’s wireless telecom industry, in which we operate, is characterized by rapidly changing technology, evolving industry standards, frequentintroductions of new services and solutions and enhancements as well as changing customer demands. New solutions and new technologies often render existingsolutions and services obsolete, excessively costly or otherwise unmarketable. As a result, our success depends on our ability to adapt to the latest technologicalprogress, such as the 5G standard and technologies, and to develop or acquire and integrate new technologies into our platform, mobile applications and relatedservices. Advances in technology also require us to commit substantial resources to developing or acquiring and then deploying new technologies for use in ouroperations. We must continuously train personnel in new technologies and in how to integrate existing hardware and software systems with these newtechnologies. We may not be able to adapt quickly to new technologies or commit sufficient resources to compete successfully against existing or new competitorsin bringing to market solutions and services that incorporate these new technologies. We may incur problems in the future in innovating and introducing new mobileapplications and service offerings. Our development of new mobile applications and platform enhancements may not be successfully completed or, if developed,may not achieve significant customer acceptance. If we fail to adapt to changes in technologies and compete successfully against established or new competitors,our business, financial condition and results of operations could be adversely affected.Problems with the quality or performance of our hardware, software or other systems may cause delays in the introduction of new solutions or result in the lossof customers and revenues, which could have a material and adverse effect on our business, financial condition and results of operations.Our hardware and software systems are complex and may contain defects, errors or bugs when first introduced to the market or to a particular customer, oras new versions are released. Because we cannot test for all possible scenarios, our systems may contain errors that are not discovered until after they have beeninstalled or implemented, and we may not be able to timely correct these problems. These defects, errors or bugs could interrupt or delay the completion of projectsor sales to our customers. In addition, our reputation may be damaged and we may fail to acquire new projects from existing customers or new customers. Errors mayoccur when we provide systems integration and maintenance services. Even in cases where we have agreements with our customers that contain provisionsdesigned to limit our exposure to potential claims and liabilities arising from customer problems, these provisions may not effectively protect us against such claimsin all cases and in all jurisdictions. In addition, as a result of business and other considerations, we may undertake to compensate our customers for damages arisingfrom the use of our solutions, even if our liability is limited by these provisions. Moreover, claims and liabilities arising from customer problems could also result inadverse publicity and materially and adversely affect our business, results of operations and financial condition. We currently do not carry any product or serviceliability insurance and any imposition of liability on us may materially and adversely affect our business and increase our costs, resulting in reduced revenues andprofitability.Our products may contain undetected software defects, which could negatively affect our revenues.Our software products are complex and may contain undetected defects. Although we test our products, it is possible that errors may be found or occur inour new or existing products after we have commenced commercial shipment of those products. Defects, whether actual or perceived, could result in adversepublicity, loss of revenues, product returns, a delay in market acceptance of our products, loss of competitive position or claims against us by customers. Any suchproblems could be costly to remedy and could cause interruptions, delays, or cessation of our product sales, which could cause us to lose existing or prospectivecustomers and could negatively affect our results of operations.6We may be subject to infringement, misappropriation and indemnity claims in the future, which may cause us to incur significant expenses, pay substantialdamages and be prevented from providing our services or technologies.Our success depends, in part, on our ability to carry out our business without infringing the intellectual property rights of third parties. Patent andcopyright law covering softwarerelated technologies is evolving rapidly and is subject to a great deal of uncertainty. Our selfdeveloped or licensed technologies,processes or methods may be covered by thirdparty patents or copyrights, either now existing or to be issued in the future. Any potential litigation may cause us toincur significant expenses. Thirdparty claims, if successfully asserted against us may cause us to pay substantial damages, seek licenses from third parties, payongoing royalties, redesign our services or technologies, or prevent us from providing services or technologies subject to these claims. Even if we were to prevail,any litigation would likely be costly and timeconsuming and divert the attention of our management and key personnel from our business operations.Our failure to protect our intellectual property rights may undermine our competitive position, and subject us to costly litigation to protect our intellectualproperty rights.Any misappropriation of our technology or the development of competitive technology could seriously harm our business. We regard a substantial portionof our hardware and software systems as proprietary and rely on statutory copyright, trademark, patent, trade secret laws, customer license agreements, employeeand thirdparty nondisclosure agreements and other methods to protect our proprietary rights. Nevertheless, these resources afford only limited protection and theactions we take to protect our intellectual property rights may not be adequate. In particular, third parties may infringe or misappropriate our proprietarytechnologies or other intellectual property rights, which could have a material adverse effect on our business, financial condition and results of operations. Inaddition, intellectual property rights and confidentiality protection in China may not be as effective as in the United States, and policing unauthorized use ofproprietary technology can be difficult and expensive. Further, litigation may be necessary to enforce our intellectual property rights, protect our trade secrets ordetermine the validity and scope of the proprietary rights of others. The outcome of any such litigation may not be in our favor. Any such litigation may be costlyand may divert management attention, as well as our other resources, away from our business. An adverse determination in any such litigation will impair ourintellectual property rights and may harm our business, prospects and reputation. In addition, we have no insurance coverage against litigation costs and wouldhave to bear all litigation costs in excess of the amount recoverable from other parties. The occurrence of any of the foregoing could have a material adverse effecton our business, financial condition and results of operations. Our solutions incorporate a portion of, and work in conjunction with, thirdparty hardware and software solutions. If these thirdparty hardware or softwaresolutions are not available to us at reasonable costs, or at all, our results of operations could be adversely impacted.Although our hardware and software systems and mobile applications primarily rely on our own core technologies, some elements of our systemsincorporate a small portion of thirdparty hardware and software solutions. If any third party were to discontinue making their intellectual property available to us orour customers on a timely basis, or increase materially the cost of their licensing such intellectual property, or if our systems or applications failed to properlyfunction or interoperate with replacement intellectual property, we may need to incur costs in finding replacement thirdparty solutions and/or redesigning oursystems or applications to replace or function with or on replacement thirdparty proprietary technology. Replacement technology may not be available on termsacceptable to us or at all, and we may be unable to develop alternative solutions or redesign our systems or applications on a timely basis or at a reasonable cost. Ifany of these were to occur, our results of operations could be adversely impacted.7Our ability to sell our products is highly dependent on the quality of our service and support offerings, and our failure to offer high quality service could have amaterial adverse effect on our ability to market and sell our products.Our customers depend upon our customer service and support staff to resolve issues relating to our products. Highquality support services are critical forthe successful marketing and sale of our products. If we fail to provide highquality support on an ongoing basis, our customers may react negatively and we maybe materially and adversely affected in our ability to sell additional products to these customers. This could also damage our reputation and prospects with potentialcustomers. Our failure to maintain highquality support services could have a material and adverse effect on our business, results of operations and financialcondition.Weaknesses in our internal controls over financial reporting or disclosure controls and procedures may have a material adverse effect on our business, theprice of our ordinary shares, operating results and financial condition.We are required to establish and maintain appropriate internal controls over financial reporting and disclosure controls and procedures. Pursuant to Section404 of the SarbanesOxley Act of 2002 and the related rules adopted by the Securities and Exchange Commission, every public company is required to include amanagement report on its internal controls over financial reporting in its transition report, which contains management’s assessment of the effectiveness of thecompany’s internal controls over financial reporting. This requirement first applied to our annual report on Form 20F for the fiscal year ended on September 30,2011. In connection with our assessments of our disclosure controls and procedures and internal controls over financial reporting, management concluded that as ofSeptember 30, 2018, our disclosure controls and procedures and our internal controls over financial reporting were not effective due to lack of U.S. generallyaccepted accounting principles (“U.S. GAAP”) expertise in our current accounting team. Please refer to the discussion under Item 15, “Controls and Procedures” forfurther discussion of our material weakness as of December 31, 2017. Should we be unable to remediate the material weakness promptly and effectively, suchweakness could harm our operating results, result in a material misstatement of our financial statements, cause us to fail to meet our financial reporting obligations orprevent us from providing reliable and accurate financial reports or avoiding or detecting fraud. This, in turn, could result in a loss of investor confidence in theaccuracy and completeness of our financial reports, which could have an adverse effect on the trading price of our ordinary shares. Any litigation or otherproceeding or adverse publicity relating to the material weaknesses could have a material adverse effect on our business and operating results. We have very limited insurance coverage which could expose us to significant costs and business disruption.We do not maintain any insurance coverage for our leased properties. Should any natural catastrophes such as earthquakes, floods, typhoons or any actsof terrorism occur in Beijing, China, where our head office is located and most of our employees are based, or elsewhere in China, we might suffer not onlysignificant property damages, but also loss of revenues due to interruptions in our business operations, which could have a material adverse effect on our business,operating results or financial condition.The insurance industry in China is still at an early stage of development. Insurance companies in China offer limited business insurance products, and donot, to our knowledge, offer business liability insurance. As a result, we do not have any business liability insurance coverage for our operations. Moreover, whilebusiness disruption insurance is available, we have determined that the risks of disruption and cost of the insurance are such that we do not require it at this time.Any business disruption, litigation or natural disaster might result in substantial costs and diversion of resources, particularly if it affects our technology platformswhich we depend on for delivery of our software and services, and could have a material adverse effect on our financial condition and results of operations.We may be liable to our customers for damages caused by unauthorized disclosure of sensitive and confidential information, whether through our employees orotherwise.We are typically required to manage, utilize and store sensitive or confidential customer data in connection with the products and services we provide.Under the terms of our customer contracts, we are required to keep such information strictly confidential. We seek to implement specific measures to protectsensitive and confidential customer data. We require our employees to enter into nondisclosure agreements to limit such employees’ access to, and distribution of,our customers’ sensitive and confidential information and our own trade secrets. We can give no assurance that the steps taken by us in this regard will be adequateto protect our customers’ confidential information. If our customers’ proprietary rights are misappropriated by our employees, in violation of any applicableconfidentiality agreements or otherwise, our customers may consider us liable for that act and seek damages and compensation from us. However, we currently donot have any insurance coverage for mismanagement or misappropriation of such information by our employees. Any litigation with respect to unauthorizeddisclosure of sensitive and confidential information might result in substantial costs and diversion of resources and management attention.8We may face intellectual property infringement claims that could be timeconsuming and costly to defend. If we fail to defend ourselves against such claims, wemay lose significant intellectual property rights and may be unable to continue providing our existing products and services.It is critical that we use and develop our technology and products without infringing upon the intellectual property rights of third parties, includingpatents, copyrights, trade secrets and trademarks. Intellectual property litigation is expensive and timeconsuming and could divert management’s attention from ourbusiness. A successful infringement claim against us, whether with or without merit, could, among others things, require us to pay substantial damages, developnoninfringing technology, or rebrand our name or enter into royalty or license agreements that may not be available on acceptable terms, if at all, and cease making,licensing or using products that have infringed a third party’s intellectual property rights. Protracted litigation could also result in existing or potential customersdeferring or limiting their purchase or use of our products until resolution of such litigation, or could require us to indemnify our customers against infringementclaims in certain instances. Also, we may be unaware of intellectual property registrations or applications relating to our services that may give rise to potentialinfringement claims against us. Parties making infringement claims may be able to obtain an injunction to prevent us from delivering our services or usingtechnology containing the allegedly infringing intellectual property. Any intellectual property litigation could have a material adverse effect on our business, resultsof operations or financial condition. Seasonality and fluctuations in our customers’ spending cycle and other factors can cause our revenues and operating results to vary significantly from quarterto quarter and from year to year.Our revenues and operating results will vary significantly from quarter to quarter and from year to year due to a number of factors, many of which areoutside of our control. Our new lines of business acquired upon the consummation of the asset exchange transaction discussed below see higher customer use andactivity during the Chinese New Year holiday than other times during the year when rail travel is high, which lead to higher revenue during this period as morecustomers would like to place more advertising. Due to these and other factors, our operating results may fluctuate significantly from quarter to quarter and fromyear to year. These fluctuations are likely to continue in the future, and operating results for any period may not be indicative of our future performance in any futureperiod.Our corporate actions are substantially controlled by our principal shareholders, who can cause us to take actions in ways you may not agree with.Mr. Xuesong Song, our chairman, chief executive officer and a member of our board of directors, beneficially owns 19.31% of our outstanding ordinaryshares and 1,000,000 preferred shares, and each preferred share has the right to 399 votes at a meeting of the members of the Company. Our officers and directors asa group beneficially own an aggregate of approximately 33.69% of our outstanding ordinary shares. These shareholders, acting individually or as a group, couldexert control and substantial influence over matters such as electing directors, amending our constitutional documents, and approving acquisitions, mergers or otherbusiness combination transactions. This concentration of ownership and voting power may also discourage, delay or prevent a change in control of our company,which could deprive our shareholders of an opportunity to receive a premium for their shares as part of a sale of our company and might reduce the price of ourshares. Alternatively, our controlling shareholders may cause a merger, consolidation or change of control transaction even if it is opposed by our othershareholders, including those who purchase shares in this offering.9We depend on a small number of customers to derive a significant portion of our revenues. If we were to become dependent again upon a few customers, suchdependency could negatively impact our business, operating results and financial condition.We derived a material portion of our revenues from a small number of customers. In the years ended December 31, 2017 and 2016, our five largestcustomers accounted for 99.8% and 78.5% of our total sales, respectively, and our largest customer Guangdong Zhanshi Media Advertising Co., Ltd. accounted forapproximately 80.8% of our total sales during for the fiscal year ended December 31, 2017. As our customer base may change from yeartoyear, during such yearsthat the customer base is highly concentrated, the fluctuation of our sales to any of such major customers could have a material adverse effect on our business,operating results and financial condition. Moreover, our high customer base concentration may also adversely affect our ability to negotiate contract prices withthese customers, which may in turn materially and adversely affect our results of operations.Our historical outstanding accounts receivable have been relatively high. Inability to collect our accounts receivable on a timely basis, if at all, couldmaterially and adversely affect our financial condition, liquidity and results of operations.Historically, our outstanding accounts receivable have been relatively high. As of December 31, 2017 and 2016, our outstanding accounts receivable beforeimpairment were $10.4 million and $2.10 million, respectively. Although we conduct credit evaluations of our customers, we generally do not require collateral orother security from our customers. In addition, we have had a relatively high customer concentration. The outstanding accounts receivable balance for our largestcustomer was 45.3% and 38.5% of our total accounts receivable balance as of December 31, 2017 and 2016, respectively. As a result, an extended delay or default inpayment relating to a significant account would likely have a material and adverse effect on the aging schedule and turnover days of our accounts receivable. Ourinability to collect our accounts receivable on a timely basis, if at all, could materially and adversely affect our financial condition, liquidity and results of operations.Risks Related to Doing Business in ChinaAdverse changes in political and economic policies of the PRC government could have a material adverse effect on the overall economic growth of China,which could reduce the demand for our services and materially and adversely affect our competitive position.Substantially all of our business operations are conducted in China. Accordingly, our business, results of operations, financial condition and prospects aresubject to a significant degree to economic, political and legal developments in China. Although the Chinese economy is no longer a planned economy, the PRCgovernment continues to exercise significant control over China’s economic growth through direct allocation of resources, monetary and tax policies, and a host ofother government policies such as those that encourage or restrict investment in certain industries by foreign investors, control the exchange between RMB andforeign currencies, and regulate the growth of the general or specific market. These government involvements have been instrumental in China’s significant growthin the past 30 years. The reorganization of the telecommunications industry encouraged by the PRC government has directly affected our industry and our growthprospect. In response to the recent global and Chinese economic downturn, the PRC government has adopted policy measures aimed at stimulating the economicgrowth in China. If the PRC government’s current or future policies fail to help the Chinese economy achieve further growth or if any aspect of the PRCgovernment’s policies limits the growth of the telecommunications industry in China or our industry or otherwise negatively affects our business, our growth rate orstrategy, our results of operations could be adversely affected as a result. Our business benefits from certain government tax incentives. Expiration, reduction or discontinuation of, or changes to, these incentives will increase our taxburden and reduce our net income.Under the PRC Enterprise Income Tax Law passed in 2007 and the implementing rules, both of which became effective on January 1, 2008, or the New EITLaw, a unified enterprise income tax rate of 25% and unified tax deduction standard is applied equally to both domesticinvested enterprises and foreigninvestedenterprises, or FIEs. Enterprises established prior to March 16, 2007 eligible for preferential tax treatment in accordance with the then tax laws and administrativeregulations shall gradually become subject to the New EIT Law rate over a fiveyear transition period starting from the date of effectiveness of the New EIT Law.However, certain qualifying hightechnology enterprises may still benefit from a preferential tax rate of 15% if they own their core intellectual properties and they areenterprises in certain Statesupported hightech industries to be later specified by the government. As a result, if our PRC subsidiaries qualify as “hightechnologyenterprises,” they will continue to benefit from the preferential tax rate of 15%, subject to transitional rules implemented from January 1, 2008. Our subsidiary, BeijingZhong Chuan Shi Xun Technology Limited, is qualified as a “hightechnology enterprise” until the end of the November 2018, and therefore it had benefited fromthe preferential tax rate of 15%, subject to transitional rules implemented on January 1, 2008. Although we intend to apply for a renewal of this qualification, if BeijingZhong Chuan Shi Xun ceases to qualify as a “hightechnology enterprise”, or the tax authorities change their position on our preferential tax treatments in thefuture, our future tax liabilities may materially increase, which could materially and adversely affect our financial condition and results of operations.10If we were deemed a “resident enterprise” by PRC tax authorities, we could be subject to tax on our global income at the rate of 25% under the New EIT Lawand our nonPRC shareholders could be subject to certain PRC taxes.Under the New EIT Law and the implementing rules, both of which became effective January 1, 2008, an enterprise established outside of the PRC with “defacto management bodies” within the PRC may be considered a PRC “resident enterprise” and will be subject to the enterprise income tax at the rate of 25% on itsglobal income as well as PRC enterprise income tax reporting obligations. The implementing rules of the New EIT Law define “de facto management” as “substantialand overall management and control over the production and operations, personnel, accounting, and properties” of the enterprise. However, as of the date of thistransition report, no final interpretations on the implementation of the “resident enterprise” designation are available. Moreover, any such designation, when madeby PRC tax authorities, will be determined based on the facts and circumstances of individual cases. Therefore, if we were to be considered a “resident enterprise”by the PRC tax authorities, our global income would be taxable under the New EIT Law at the rate of 25% and, to the extent we were to generate a substantial amountof income outside of PRC in the future, we would be subject to additional taxes. In addition, the dividends we pay to our nonPRC enterprise shareholders and gainsderived by such shareholders or ADS or ordinary share holders from the transfer of our shares or ADSs may also be subject to PRC withholding tax at the rate up to10%, if such income were regarded as Chinasourced income.Our holding company structure may limit the payment of dividends.We have no direct business operations, other than our ownership of our subsidiaries. While we have no current intention of paying dividends, should wedecide in the future to do so, as a holding company, our ability to pay dividends and meet other obligations depends upon the receipt of dividends or otherpayments from our operating subsidiaries and other holdings and investments. Current PRC regulations permit our PRC subsidiaries to pay dividends to us only outof their accumulated profits, if any, determined in accordance with Chinese accounting standards and regulations. In addition, each of our subsidiaries in China isrequired to set aside at least 10% of its aftertax profits each year, if any, to fund a statutory reserve until such reserve reaches 50% of its registered capital. Thesereserves are not distributable as cash dividends. Furthermore, if our subsidiaries in China incur debt on their own behalf in the future, the instruments governing thedebt may restrict their ability to pay dividends or make other payments to us. As a result, there may be limitations on the ability of our PRC subsidiaries to paydividends or make other investments or acquisitions that could be beneficial to our business or otherwise fund and conduct our business.In addition, under the New EIT Law and the implementing rules that became effective on January 1, 2008, dividends generated from the business of our PRCsubsidiaries after January 1, 2008 and payable to us may be subject to a withholding tax rate of 10% if the PRC tax authorities subsequently determine that we are anonresident enterprise, unless there is a tax treaty with China that provides for a different withholding arrangement.Uncertainties with respect to the PRC legal system could adversely affect us.We conduct all of our business through our subsidiaries in China. Our operations in China are governed by PRC laws and regulations. Our PRCsubsidiaries are generally subject to laws and regulations applicable to foreign investments in China and, in particular, laws and regulations applicable to whollyforeignowned enterprises. The PRC legal system is based on statutes. Prior court decisions may be cited for reference but have limited precedential value.11Since 1979, PRC legislation and regulations have significantly enhanced the protections afforded to various forms of foreign investments in China.However, China has not developed a fully integrated legal system and recently enacted laws and regulations may not sufficiently cover all aspects of economicactivities in China. In particular, because these laws and regulations are relatively new, and because of the limited volume of published decisions and theirnonbinding nature, the interpretation and enforcement of these laws and regulations involve uncertainties. In addition, the PRC legal system is based in part ongovernment policies and internal rules (some of which are not published on a timely basis or at all) that may have a retroactive effect. As a result, we may not beaware of our violation of these policies and rules until some time after the violation. In addition, any litigation in China may be protracted and result in substantialcosts and diversion of resources and management attention.PRC regulation of loans and direct investment by offshore holding companies to PRC entities may delay or prevent us from using the proceeds of our May2010 public offering to make loans or additional capital contributions to our PRC operating subsidiaries, which could materially and adversely affect ourliquidity and our ability to fund and expand our business.In utilizing the proceeds of our May 2010 public offering as an offshore holding company of our PRC operating subsidiaries, we may make loans to our PRCsubsidiaries, or we may make additional capital contributions to our PRC subsidiaries. Any loans to our PRC subsidiaries are subject to PRC regulations. Forexample, loans by us to our subsidiaries in China, which are FIEs, to finance their activities cannot exceed statutory limits and must be registered with the StateAdministration of Foreign Exchange, or SAFE. On August 29, 2008, SAFE promulgated Circular 142, a notice regulating the conversion by a foreigninvestedcompany of foreign currency into RMB by restricting how the converted RMB may be used. The notice requires that RMB converted from the foreign currencydenominated capital of a foreigninvested company may only be used for purposes within the business scope approved by the applicable governmental authorityand may not be used for equity investments within the PRC unless specifically provided for otherwise. The foreign currencydenominated capital shall be verified byan accounting firm before converting into RMB. In addition, SAFE strengthened its oversight over the flow and use of RMB funds converted from the foreigncurrencydenominated capital of a foreigninvested company. To convert such capital into RMB, the foreigninvested company must report the use of such RMB tothe bank, and the RMB must be used to the reported purposes. According to Circular 142, change of the use of such RMB without approval is prohibited. Inaddition, such RMB may not be used to repay RMB loans if the proceeds of such loans have not yet been used. Violations of Circular 142 may result in severepenalties, including substantial fines as set forth in the Foreign Exchange Administration Rules.We may also decide to finance our subsidiaries by means of capital contributions. These capital contributions may need approval from the PRC Ministry ofCommerce, or MOFCOM, or its local counterpart. We may not be able to obtain these government approvals on a timely basis, if at all, with respect to future capitalcontributions by us to our PRC subsidiaries. If we fail to receive such approvals in such cases when approval is required, our ability to use the proceeds of our May2010 public offering and to capitalize our PRC operations may be negatively affected, which could adversely affect our liquidity and our ability to fund and expandour business.Governmental control of currency conversion may affect the value of your investment.The PRC government imposes controls on the convertibility of the RMB into foreign currencies and, in certain cases, the remittance of currency out ofChina. We receive substantially all of our revenues in RMB. Under our current corporate structure, our income is primarily derived from dividend payments from ourPRC subsidiaries. Shortages in the availability of foreign currency may restrict the ability of our PRC subsidiaries to remit sufficient foreign currency to paydividends or other payments to us, or otherwise satisfy their foreign currency denominated obligations. Under existing PRC foreign exchange regulations, paymentsof current account items, including profit distributions, interest payments and expenditures from traderelated transactions, can be made in foreign currencieswithout prior approval from SAFE by complying with certain procedural requirements. However, approval from appropriate government authorities is required whereRMB is to be converted into foreign currency and remitted out of China to pay capital expenses such as the repayment of loans denominated in foreign currencies.The PRC government may also at its discretion restrict access in the future to foreign currencies for current account transactions. If the foreign exchange controlsystem prevents us from obtaining sufficient foreign currency to satisfy our currency demands, we may not be able to pay dividends in foreign currencies to ourshareholders, including holders of our ADSs or ordinary shares.12Fluctuation in the value of the RMB may have a material adverse effect on the value of your investment.The value of the RMB against the U.S. dollar and other currencies may fluctuate and is affected by, among other things, changes in political and economicconditions. On July 21, 2005, the PRC government changed its decadeold policy of pegging the value of the RMB to the U.S. dollar. Under the new policy, the RMBis permitted to fluctuate within a narrow and managed band against a basket of certain foreign currencies. This change in policy has resulted in an approximate26.8% appreciation of the RMB against the U.S. dollar between July 21, 2005 and September 30, 2015. Provisions on Administration of Foreign Exchange, asamended in August 2008, further changed China’s exchange regime to a managed floating exchange rate regime based on market supply and demand. Since reachinga high against the U.S. dollar in July 2008, however, the RMB has traded within a narrow band against the U.S. dollar, remaining within 1% of its July 2008 high butnever exceeding it. As a consequence, the RMB has fluctuated sharply since July 2008 against other freelytraded currencies, in tandem with the U.S. dollar. InAugust 2015, the PRC Government devalued its currency by approximately 3%, representing the largest yuan depreciation for 20 years. Concerns remain thatChina’s slowing economy, and in particular its exports, will need a stimulus that can only come from further cuts in the exchange rate.It is difficult to predict how long the current situation may continue and when and how it may change again as the People’s Bank of China may regularlyintervene in the foreign exchange market to achieve economic policy goals. Substantially all of our revenues and costs are denominated in the RMB, and asignificant portion of our financial assets are also denominated in RMB. We principally rely on dividends and other distributions paid to us by our subsidiaries inChina. Any significant revaluation of the RMB may materially and adversely affect our cash flows, revenues, earnings and financial position, and the value of, andany dividends payable on, our ADSs or ordinary shares in U.S. dollars. Any fluctuations of the exchange rate between the RMB and the U.S. dollar could also resultin foreign currency translation losses for financial reporting purposes.PRC laws and regulations governing our businesses. If we are found to be in violation of such PRC laws and regulations, we could be subject to sanctions. Inaddition, changes in such PRC laws and regulations may materially and adversely affect our business.There are substantial uncertainties regarding the interpretation and application of PRC laws and regulations, including, but not limited to, the laws andregulations governing our business. These laws and regulations are relatively new and may be subject to change, and their official interpretation and enforcementmay involve substantial uncertainty. The effectiveness of newly enacted laws, regulations or amendments may be delayed, resulting in detrimental reliance byforeign investors. New laws and regulations that affect existing and proposed future businesses may also be applied retroactively.The PRC government has broad discretion in dealing with violations of laws and regulations, including levying fines, revoking business and other licensesand requiring actions necessary for compliance. In particular, licenses and permits issued or granted to us by relevant governmental bodies may be revoked at a latertime by higher regulatory bodies. We cannot predict the effect of the interpretation of existing or new PRC laws or regulations on our businesses. We cannot assureyou that our current ownership and operating structure would not be found in violation of any current or future PRC laws or regulations. As a result, we may besubject to sanctions, including fines, and could be required to restructure our operations or cease to provide certain services. In addition, any litigation in China maybe protracted and result in substantial costs and diversion of resources and management attention. Any of these or similar actions could significantly disrupt ourbusiness operations or restrict us from conducting a substantial portion of our business operations, which could materially and adversely affect our business,financial condition and results of operations.13If we were required to obtain the prior approval of the China Securities Regulatory Commission, or CSRC, of the listing and trading of our ADSs on theNASDAQ Capital Market, we may face regulatory actions or other sanctions from the CSRC or other PRC regulatory agencies.On August 8, 2006, six PRC regulatory agencies, including the Ministry of Commerce, the State Assets Supervision and Administration Commission, theState Administration for Taxation, the State Administration for Industry and Commerce, the CSRC and the SAFE, jointly issued the Regulations on Mergers andAcquisitions of Domestic Enterprises by Foreign Investors, which became effective on September 8, 2006 (the “New M&A Rules”). This regulation, among otherthings, includes provisions that purport to require that an offshore special purpose vehicle formed for the purposes of overseas listing of equity interests in PRCcompanies and controlled directly or indirectly by PRC companies or individuals obtain the approval of the CSRC prior to the listing and trading of such specialpurpose vehicle’s securities on an overseas stock exchange. On September 21, 2006, the CSRC published on its official website procedures regarding its approval ofoverseas listings by special purpose vehicles. The CSRC approval procedures require the filing of a number of documents with the CSRC and it would take severalmonths to complete the approval process, if practicable at all. The application of this new PRC regulation remains unclear with no consensus currently existingamong leading PRC law firms regarding the scope of the applicability of the CSRC approval requirement. Prior to our May 2010 initial public offering, our PRC counsel has advised us that, based on its understanding of the current PRC laws and regulations aswell as the procedures announced on September 21, 2006: (i) Softech was directly incorporated by Topsky as a foreign investment enterprise under PRC law;therefore, there was no acquisition of the equity of a “PRC domestic company” as defined under the New M&A Rules; and (ii) the contractual arrangementsbetween Kingtone Information and Softech were not clearly defined and considered as the transaction which shall be applied to the New M&A Rules. Therefore, wedid not seek prior CSRC approval for our initial public offering.However, if the CSRC required that we obtain its approval prior to the completion of our initial public offering and the listing of our ADSs on the NASDAQCapital Market, we may face regulatory actions or other sanctions from the CSRC or other PRC regulatory agencies. These regulatory agencies may impose fines andpenalties on our operations in the PRC, limit our operating privileges in the PRC, delay or restrict the repatriation of the proceeds from our initial public offering intothe PRC, or take other actions that could have a material adverse effect on our business, financial condition, results of operations, reputation and prospects, as wellas the trading price of our shares.Also, if the CSRC requires that we obtain its approval, we may be unable to obtain a waiver of the CSRC approval requirements if and when procedures areestablished to obtain such a waiver. Any uncertainties and/or negative publicity regarding this CSRC approval requirement could have a material adverse effect onthe trading price of our shares.PRC regulations relating to the establishment of offshore special purpose companies by PRC residents may subject our PRC resident shareholders to penaltiesand limit our ability to inject capital into our PRC subsidiaries, limit our PRC subsidiaries’ ability to distribute profits to us, or otherwise adversely affect us.On October 21, 2005, the SAFE issued the Notice on Issues Relating to the Administration of Foreign Exchange in Fundraising and Reverse InvestmentActivities of Domestic Residents Conducted via Offshore Special Purpose Companies, or Notice 75, which became effective as of November 1, 2005. According toNotice 75, prior registration with the local SAFE branch is required for PRC residents to establish or to control an offshore company for the purposes of financingsuch offshore company with assets or equity interests in an onshore enterprise located in the PRC, or an offshore special purpose company. An amendment toregistration or filing with the local SAFE branch by such PRC resident is also required for the injection of equity interests or assets of an onshore enterprise in theoffshore special purpose company or overseas funds raised by such offshore company, or any other material change involving a change in the capital of theoffshore special purpose company. Moreover, Notice 75 applies retroactively. As a result, PRC residents who have established or acquired control of offshorespecial purpose companies that have made onshore investments in the PRC in the past are required to have completed the relevant registration procedures with thelocal SAFE branch by March 31, 2006. To further clarify the implementation of Notice 75, the SAFE issued Circular 106 on May 29, 2007. Under Circular 106, PRCsubsidiaries of an offshore special purpose company are required to coordinate and supervise the filing of SAFE registrations by the offshore holding company’sshareholders or beneficial owners who are PRC residents in a timely manner.14Some of our current shareholders and/or beneficial owners may fall within the ambit of the SAFE notice and be required to register with the local SAFEbranch as required under the SAFE notice. If so required, and if such shareholders and/or beneficial owners fail to timely register their SAFE registrations pursuantto the SAFE notice, or if future shareholders and/or beneficial owners of our company who are PRC residents fail to comply with the registration procedures setforth in the SAFE notice, this may subject such shareholders, beneficial owners and/or our PRC subsidiaries to fines and legal sanctions and may also limit ourability to contribute additional capital into our PRC subsidiaries, limit our PRC subsidiaries’ ability to distribute dividends to our company, or otherwise adverselyaffect our business.Risks Associated with our ADSs and Ordinary SharesOur securities are not currently traded on any United States public markets and you may not be able to resell your securities for some time.There is currently no public market for our ordinary shares or American Depository Shares (“ADSs”) in the United States or in any other jurisdiction. OurADSs were voluntarily delisted from the NASDAQ Capital Market on September 19, 2018. We have applied to NASDAQ for the listing of our ordinary shares on theNASDAQ Capital Market and received an approval for listing of Ordinary Shares on August 6, 2018, and as of the date of this transition report, that application andapproval are currently under review. We cannot assume that our ordinary shares will be accepted for listing on the NASDAQ Capital Market, or if listed, that wewould continue to meet the applicable minimum listing requriements. You may not be able to sell your ordinary shares quickly or at all if we are unable to gain listingon a public market in the United States.The market price of our ADSs has historically been highly volatile, and you may not be able to resell our ordinary shares at or above your initial purchaseprice.There may be a limited public market for our ordinary shares and, as discussed above, our ADSs are no longer listed on any public market in the UnitedStates or any other jurisdiction. We cannot assure you that there will be an active trading market for our ordinary shares in the future. If our ordinary shares areaccepted for listing on a public market, you may not be able to sell your ordinary shares quickly or at the market price if trading in our ordinary shares is not active. The trading price of our ADSs and ordinary shares may be volatile. The price of our ADSs and ordinary shares could be subject to wide fluctuations inresponse to a variety of factors, including the following:1.Introduction of new products, services or technologies offered by us or our competitors;2.Failure to meet or exceed revenue and financial projections we provide to the public;3.Actual or anticipated variations in quarterly operating results;4.Failure to meet or exceed the estimates and projections of the investment community;5.General market conditions and overall fluctuations in United States equity markets;6.Announcements of significant acquisitions, strategic partnerships, joint ventures or capital commitments by us or our competitors;7.Disputes or other developments relating to proprietary rights, including patents, litigation matters and our ability to obtain patent protection for ourtechnologies;8.Additions or departures of key management personnel;9.Issuances of debt or equity securities;10.Significant lawsuits, including patent or shareholder litigation;11.Changes in the market valuations of similar companies;12.Sales of additional ordinary shares or other securities by us or our shareholders in the future;13.Trading volume of our ordinary shares;14.Fluctuations in the exchange rate between the U.S. dollar and Renminbi;15.Negative market perception and media coverage of our company or other companies in the same or similar industry with us; and16.Other events or factors, many of which are beyond our control.15In addition, the stock market in general, and the NASDAQ Capital Market and software products and services companies in particular, have experiencedextreme price and volume fluctuations that have often been unrelated or disproportionate to the operating performance of these companies. Broad market andindustry factors may negatively affect the market price of our ordinary shares, regardless of our actual operating performance. Our ADSs and ordinary shares may be subject to the SEC’s penny stock rules which may make it difficult for brokerdealers to complete customer transactionsand trading activity in our securities.Our ADSs and ordinary shares may be deemed to be “penny stock” as that term is defined under the Securities Exchange Act of 1934, as amended. Pennystocks generally are equity securities with a price of less than $5.00 (other than securities registered on certain national securities exchanges or quoted on theNASDAQ system, provided that current price and volume information with respect to transactions in such securities is provided by the exchange or system). Pennystock rules impose additional sales practice requirements on brokerdealers who sell to persons other than established customers and “accredited investors.” Theterm “accredited investor” refers generally to institutions with assets in excess of $5,000,000 or individuals with a net worth in excess of $1,000,000 or annual incomeexceeding $200,000 or $300,000 jointly with their spouse in each of the prior two years.The penny stock rules require a brokerdealer, prior to a transaction in a penny stock not otherwise exempt from the rules, to deliver a standardized riskdisclosure document in a form prepared by the SEC, which provides information about penny stocks and the nature and level of risks in the penny stockmarket. Moreover, brokerdealers are required to determine whether an investment in a penny stock is a suitable investment for a prospective investor. A brokerdealer must receive a written agreement to the transaction from the investor setting forth the identity and quantity of the penny stock to be purchased. Theserequirements may make it more difficult for brokerdealers to effectuate customer transactions and trading activity in our securities. As a result, the market price ofour ADSs and ordinary shares may be depressed, and you may find it more difficult to sell our ADSs or ordinary shares.Sales of a substantial number of ordinary shares or ADSs in the public market by our existing shareholders could cause the price of our ADSs to fall.Sales of a substantial number of our ordinary shares or ADSs in the public market or the perception that these sales might occur, could depress the marketprice of our ADSs and could impair our ability to raise capital through the sale of additional equity securities. We are unable to predict the effect that sales may haveon the prevailing market price of our ADSs.All of our existing shareholders prior to our May 2010 offering were subject to lockup agreements with the underwriters of the offering that restricted theshareholders’ ability to transfer ordinary shares or ADSs until expiration of the lockup period in November 2010. The lockup agreements limited the number ofordinary shares or ADSs that may be sold immediately following the public offering. Subject to certain limitations, approximately 1,000,000 of our total outstandingshares are now eligible for sale. Sales of ordinary shares by these shareholders could have a material adverse effect on the trading price of our ADSs.Future sales and issuances of our ordinary shares, or rights to purchase our ordinary shares, including pursuant to our 2010 Omnibus Incentive Plan, couldresult in additional dilution of the percentage ownership of our shareholders and could cause the price of our ordinary shares to fall.We expect that significant additional capital will be needed in the future to continue our planned operations. To the extent we raise additional capital byissuing equity securities, our shareholders may experience substantial dilution. We may sell ordinary shares, convertible securities or other equity securities in oneor more transactions at prices and in a manner we determine from time to time. If we sell ordinary shares, convertible securities or other equity securities in more thanone transaction, investors may be materially diluted by subsequent sales. Such sales may also result in material dilution to our existing shareholders, and newinvestors could gain rights superior to our existing shareholders.16We do not intend to pay dividends on our ordinary shares, so any returns will be limited to the value of our ADSs and ordinary shares.We have never declared or paid any cash dividend on our ordinary shares. We currently anticipate that we will retain future earnings for the development,operation and expansion of our business and do not anticipate declaring or paying any cash dividends for the foreseeable future. Any return shareholders willtherefore be limited to the value of their ADSs or ordinary shares.As the rights of shareholders under British Virgin Islands law differ from those under U.S. law, you may have fewer protections as a shareholder.Our corporate affairs will be governed by our memorandum of association and articles of association, the BVI Business Companies Act, 2004, or the BVIAct, of the British Virgin Islands and the common law of the British Virgin Islands. The rights of shareholders to take legal action against our directors, actions byminority shareholders and the fiduciary responsibilities of our directors under British Virgin Islands law are to a large extent governed by the BVI Act and thecommon law of the British Virgin Islands. The common law of the British Virgin Islands is derived in part from comparatively limited judicial precedent in the BritishVirgin Islands as well as from English common law, which has persuasive, but not binding, authority on a court in the British Virgin Islands. The rights of ourshareholders and the fiduciary responsibilities of our directors under British Virgin Islands law are not as clearly established as they would be under statutes orjudicial precedents in some jurisdictions in the United States. In particular, the British Virgin Islands has a less developed body of securities laws as compared to theUnited States, and some states (such as Delaware) have more fully developed and judicially interpreted bodies of corporate law.As a result of all of the above, holders of our ADSs and ordinary shares may have more difficulty in protecting their interests through actions against ourmanagement, directors or major shareholders than they would as shareholders of a U.S. company.British Virgin Islands companies may not be able to initiate shareholder derivative actions, thereby depriving shareholders of the ability to protect theirinterests.British Virgin Islands companies may not have standing to initiate a shareholder derivative action in a federal court of the United States. The circumstancesin which any such action may be brought, and the procedures and defenses that may be available in respect to any such action, may result in the rights ofshareholders of a British Virgin Islands company being more limited than those of shareholders of a company organized in the United States. Accordingly,shareholders may have fewer alternatives available to them if they believe that corporate wrongdoing has occurred. The British Virgin Islands courts are alsounlikely to recognize or enforce against us judgments of courts in the United States based on certain liability provisions of U.S. securities law; and to imposeliabilities against us, in original actions brought in the British Virgin Islands, based on certain liability provisions of U.S. securities laws that are penal in nature.There is no statutory recognition in the British Virgin Islands of judgments obtained in the United States, although the courts of the British Virgin Islands willgenerally recognize and enforce the nonpenal judgment of a foreign court of competent jurisdiction without retrial on the merits.The laws of the British Virgin Islands provide little protection for minority shareholders, so minority shareholders will have little or no recourse if theshareholders are dissatisfied with the conduct of our affairs.Under the law of the British Virgin Islands, there is little statutory law for the protection of minority shareholders other than the provisions of the BVI Actdealing with shareholder remedies. The principal protection under statutory law is that shareholders may bring an action to enforce the constituent documents ofthe corporation, our memorandum of association and articles of association. Shareholders are entitled to have the affairs of the company conducted in accordancewith the general law and the memorandum of association and articles of association.17There are common law rights for the protection of shareholders that may be invoked, largely dependent on English company law, since the common law ofthe British Virgin Islands is limited. Under the general rule pursuant to English company law known as the rule in Foss v. Harbottle, a court will generally refuse tointerfere with the management of a company at the insistence of a minority of its shareholders who express dissatisfaction with the conduct of the company’s affairsby the majority or the board of directors. However, every shareholder is entitled to have the affairs of the company conducted properly according to law and thecompany’s constituent documents. As such, if those who control the company have persistently disregarded the requirements of company law or the provisions ofthe company’s memorandum of association and articles of association, then the courts will grant relief. Generally, the areas in which the courts will intervene are thefollowing: (1) an act complained of which is outside the scope of the authorized business or is illegal or not capable of ratification by the majority; (2) acts thatconstitute fraud on the minority where the wrongdoers control the company; (3) acts that infringe on the personal rights of the shareholders, such as the right tovote; and (4) where the company has not complied with provisions requiring approval of a majority of shareholders, which are more limited than the rights affordedminority shareholders under the laws of many states in the United States.Antitakeover provisions in our memorandum of association and articles of association and our right to issue preference shares could make a thirdpartyacquisition of us difficult.Some provisions of our memorandum of association and articles of association may discourage, delay or prevent a change in control of our company ormanagement that shareholders may consider favorable, including provisions that authorize our board of directors to issue preference shares in one or more seriesand to designate the price, rights, preferences, privileges and restrictions of such preference shares.If you hold our ADSs, you may not have the same voting rights as the holders of our ordinary shares and must act through the depositary to exercise your rights.Holders of our ADSs will not be able to exercise voting rights attaching to the shares evidenced by our ADSs on an individual basis. Holders of our ADSswill appoint the depositary or its nominee as their representative to exercise the voting rights attaching to the shares represented by the ADSs. You may not receivevoting materials in time to instruct the depositary to vote, and it is possible that you, or persons who hold their ADSs through brokers, dealers or other third parties,will not have the opportunity to exercise a right to vote. Upon our written request, the depositary will mail to you a shareholder meeting notice which contains,among other things, a statement as to the manner in which your voting instructions may be given, including an express indication that such instructions may begiven or deemed given to the depositary to give a discretionary proxy to a person designated by us if no instructions are received by the depositary from you on orbefore the response date established by the depositary. However, no voting instruction shall be deemed given and no such discretionary proxy shall be given withrespect to any matter as to which we inform the depositary that (i) we do not wish such proxy given, (ii) substantial opposition exists, or (iii) such matter materiallyand adversely affects the rights of shareholders. We will make all reasonable efforts to cause the depositary to extend voting rights to you in a timely manner, butyou may not receive the voting materials in time to ensure that you can instruct the depositary to vote your ADSs. Furthermore, the depositary and its agents willnot be responsible for any failure to carry out any instructions to vote, for the manner in which any vote is cast or for the effect of any such vote. As a result, youmay not be able to exercise your right to vote and you may lack recourse if your ADSs are not voted as you requested. In addition, in your capacity as an ADSholder, you will not be able to call a shareholders’ meeting.You may not be able to participate in rights offerings and may experience dilution of your holdings as a result.We may from time to time distribute rights to our shareholders, including rights to acquire our securities. However, we may not, and under the depositagreement for the ADSs, the depositary will not, offer those rights to ADS holders unless both the rights and the underlying securities to be distributed to ADSholders are registered under the Securities Act, or the distribution of them to ADS holders is exempted from registration under the Securities Act with respect to allholders of ADSs. We are under no obligation to file a registration statement with respect to any such rights or underlying securities or to endeavor to cause such aregistration statement to be declared effective. In addition, we may not be able to rely on an exemption from registration under the Securities Act to distribute suchrights and securities. Accordingly, holders of our ADSs may be unable to participate in our rights offerings and may experience dilution in their holdings as a result.You may be subject to limitations on transfer of your ADSs.Your ADSs are transferable on the books of the depositary. However, the depositary may close its transfer books at any time or from time to time when itdeems expedient in connection with the performance of its duties. In addition, the depositary may refuse to deliver, transfer or register transfers of ADSs generallywhen our books or the books of the depositary are closed, or at any time if we or the depositary deem it advisable to do so because of any requirement of law or ofany government or governmental body, or under any provision of the deposit agreement, or for any other reason.18We may be a passive foreign investment company, of PFIC, which could lead to additional taxes for U.S. holders of our ADSs or ordinary shares.We do not expect to be, for U.S. federal income tax purposes, a passive foreign investment company, or a PFIC, which is a foreign company for which, inany given taxable year, either at least 75% of its gross income is passive income, or investment income in general, or at least 50% of its assets produce or are held toproduce passive income, for the current taxable year, and we expect to operate in such a manner so as not to become a PFIC for any future taxable year. However,because the determination of PFIC status for any taxable year cannot be made until after the close of such year and requires extensive factual investigation,including ascertaining the fair market value of our assets on a quarterly basis and determining whether each item of gross income that we earn is passive income, wecannot assure you that we will not become a PFIC for the current taxable year or any future taxable year. If we are or become a PFIC, a U.S. holder of our ADSs orordinary shares could be subject to additional U.S. federal income taxes on gain recognized with respect to the ADSs or ordinary shares and on certain distributions,plus an interest charge on certain taxes treated as having been deferred under the PFIC rules. Noncorporate U.S. holders will not be eligible for reduced rates oftaxation on any dividends received from us if we are a PFIC in the taxable year in which such dividends are paid or in the preceding taxable year.If our ordinary shares are listed on the NASDAQ Capital Market and the trading price of our ordinary shares fails to comply with the continued listingrequirements of the NASDAQ Capital Market, we would face possible delisting, which would result in a limited public market for our ordinary shares andmake obtaining future debt or equity financing more difficult for us.Companies listed on NASDAQ are subject to delisting for, among other things, failure to maintain a minimum closing bid price of $1.00 per share for 30consecutive business days. On December 19, 2011, we received a letter from NASDAQ indicating that for the last 30 consecutive business days, the closing bidprice of our ADSs fell below the minimum $1.00 per share requirement pursuant to NASDAQ Listing Rule 5550(a)(2) for continued listing on the NASDAQ CapitalMarket. We regained compliance with the minimum bid price requirement for continued listing set forth in NASDAQ Listing Rule 5550(a)(2), as its ADS with itsunderlying ordinary share has achieved a closing bid price of $1.00 or greater for the 10 consecutive business days from November 6 to November 23, 2012 byimplementing a 1for10 combination, or reverse split of the ordinary shares effective November 6, 2012. When listed, we cannot be sure that the price of our ordinaryshares will comply with this requirement for continued listing on the NASDAQ Capital Market in the future. If we were not able to do so, our ordinary shares wouldbe subject to delisting and would likely trade on the overthecounter market. If our ordinary shares were to trade on the overthecounter market, selling ourordinary shares could be more difficult because smaller quantities of shares would likely be bought and sold, transactions could be delayed, and security analysts’coverage of us may be reduced. In addition, brokerdealers have certain regulatory burdens imposed upon them, which may discourage brokerdealers from effectingtransactions in our ordinary shares, further limiting the liquidity of our ordinary shares. As a result, the market price of our ordinary may be depressed, and you mayfind it more difficult to sell our ordinary shares. Such delisting from the NASDAQ Capital Market and continued or further declines in our share price could alsogreatly impair our ability to raise additional necessary capital through equity or debt financing.ITEM 4. INFORMATION ON THE COMPANY.A . HISTORY AND DEVELOPMENT OF THE COMPANY.OverviewWe are a holding company and conduct our operations through our whollyowned subsidiary named LK Technology Ltd., a British Virgin Islands limitedliability company (“LK Technology”), and its whollyowned subsidiaries, MMB Limited and Mobile Media (China) Limited and their respective subsidiaries, whichhold the rights to deploy WiFi systems on about 700 trains in China, including 290 trains in which WiFi systems have already been installed and are in operation. InMay 2010, we consummated an initial public offering of our American Depository Shares, or ADSs, for gross proceeds of $16 million, and our ADSs were listed onthe NASDAQ Capital Market under the ticker symbol “KONE”. Our ordinary shares are not currently listed on any trading market. Our American Depository Shares(“ADSs”) were voluntarily delisted from the NASDAQ Capital Market on September 19, 2018. We have applied to NASDAQ for the listing of our ordinary shares onthe NASDAQ Capital Market and received an approval for listing of Ordinary Shares on August 6, 2018, and as of the date of this transition report, that applicationand approval are currently under review.19On August 17, 2018, we consummated an asset exchange transaction, pursuant to which we exchanged all issued and outstanding capital stock in TopskyInfoTech Holdings Pte Ltd., the parent of Softech, for the issued and outstanding capital stock of LK Technology (the “Asset Exchange”). In connection with theAsset Exchange, we changed our name on August 20, 2018, and on September 20, 2018, issued to the shareholders of C Media Limited, the former parent of LKTechnology, (i) 185,412,599 of our ordinary shares, par value $0.01 per share and (ii) 1,000,000 of our preferred shares. Upon the consummation of the AssetExchange, we ceased our previous business operations and became a company focused on the provision of WiFi and mobile application products for long distancerail travelers in China.On August 25, 2018, LK Technology entered into a Stock Purchase Agreement (the “Agreement”) with the shareholders (“Shareholders”) of SuperengineHoldings Limited, a limited liability company organized under the laws of the British Virgin Islands (the “Superengine”), pursuant to which LK Technology acquiredall of the issued and outstanding capital stock of Superengine for an aggregate purchase price of US$60 million (the “Purchase Price”), which are paid by theissuance of our Ordinary Shares in an amount equal to the quotient of (x) the Purchase Price divided by (y) the average of the closing prices of the Ordinary Shareson the NASDAQ Capital Market over the 12 months period preceding July 31, 2018. We are a party to the Agreement in connection with the issuance of theOrdinary Shares and certain other limited purposes.Corporate InformationOur principal executive offices are located at LAB32, SOHO 3Q, No 9, Guanghua Road, Chaoyang District, Beijing, People’s Republic of China 100020. Ourwebsite is www.luokung.com. We routinely post important information on our website. The information contained on our website is not a part of this transitionreport.Our agent for service of process in the United States is Worldwide Stock Transfer, LLC, the current transfer agent of the Company, with a mailing address ofOne University Plaza, Suite 505, Hackensack, New Jersey 07601.B. BUSINESS OVERVIEW.We are a Chinabased provider of rail WiFi and mobile application products for long distance travelers in China. Our primary mobile application, theLuoKuang platform, consists of the LuoKuang mobile applications, a series of supporting software at the server end, and railWiFi hardware and equipment on thetrains that we serve. The LuoKuang platform incorporates technology covered by 22 patents and about 34 software copy rights, and serves as a content and servicedistribution platform that is tailored for particular travel stages featuring geographic location and social interaction. The content and services distributed byLuoKuang contain information, entertainment, travel, ecommerce, online to offline (“O2O”), advertisement and marketing features.LuoKuang mainly provides personalized and precise services to long distance travelers in two locations: on the train and at the destination. Based on thetravel environment, the core elements of our users’ needs include staving off boredom on trains and discovering and exploring new locations upon arrival. The mainservices contain entertainment services (videos and audio, digital readings, games specific and tailored to the travel stage) and social services (satisfying thedemand for value discovery of unfamiliar destinations through social interaction among strangers based on locations). As of December 31, 2017, the LuoKuangplatform featured about 38 million users.The setting services on the train focus on providing entertainment content for passengers to pass time during longdistance travel in closed environments.For example, we provide access to long video formats such as movies and TV shows, short videos, music, digital readings and games.20We use the most valuable WiFi location—the train WiFi setting—as the entrance of our LuoKuang platform and mobile applications. Passengers typicallyride trains for longdistance and interprovincial travel purposes. The long periods of monotonous journeys and the cost concerns for roaming traffic fees enable thecombination of entertainment content service needs and WiFi access needs. Our railWiFi becomes a valuable and sophisticated WiFi service in this setting—notjust WiFi connection service, but a provider of sophisticated services through a WiFi connection. In addition, the annual traffic of 800,000 passengers onboardeach train makes rail WiFi a huge entry point for mobile applications. We do not define ourselves as a train WiFi communication service operator but as a longdistance travel mobile service provider. We provide users with free WiFi access so that users are able to connect to the LuoKuang platform and thus access relatedentertainment services, services on the train and destination services. The rail WiFi is our access point to a significant pool of users and the entrance to acquiringadditional users.The setting services focus on providing targeted push services to users while travelling in unfamiliar cities. Information and service guidance are preciselypushed to appeal to the interests and tastes (eating, drinking, shopping, touring and culture) of individual users (cuisine specialties and local snacks, local events,viewing sights, culture, history, stories). The service guidance is generated, shared and distributed by individual users (travelers, local residents, local businesses)interacting with current locations and featuring users who generated contents from selfmedia and small and medium vertical contents providers).Based on the GIS (geoinformation system), Superengine is a provider of big spatialtemporal data, network graphic image technology and relevant service.Its super engine series includes computer graphic image engines and spatial database engines. Spatialtemporal cloud index is the core of the company’s spatialtemporal data engines. It is equivalent to the neural network of the big data and the Internet. It extends the value of its products and platform to its data serviceproviders. In cooperation, its service providers can be divided into three categories, namely, basic geographic data providers, industrial data providers andbehavioral data providers). Superengine’s industriesoriented spatialtemporal data engine was launched in 2016. The spatialtemporal GIS platform has been appliedin industries such as aerospace, power grid, surveying & mapping, agriculture, cultural relic preservation, water conservancy, public security, railway section, smartcities, and business location selection.Our primary sources of revenue are advertising and marketing promotion revenues.Our Industry — Mobile Internet IndustryOur products and services are engaged in the mobile internet industry. Our main services consist of entertainment services (videos, audio, digital readings,games that are tailormade for passengers on train) and other services including satisfying the demand for value discovery of unfamiliar destinations through socialinteractions among strangers based in such locations). The mobile internet industry in China is rapidly growing and is likely to be in a longterm growth trend.According to the Mobile Internet Blue Book of China Mobile Internet Report, in 2017 the market size of China mobile internet reached RMB 605 billion. Now China isin a leading position in terms of smartphone, mobile communication network and mobile application services. The pool of users is anticipated to keep expandingthrough the promotion and popularization of smartphones and the expansion of the mobile internet market.Video is the leading online entertainment format in China. According to the iResearch Report, over 80% of total time spent by users on online entertainmentin China in 2016 was internet video. Online entertainment, especially internet video, is attractive to Chinese users due to many favorable factors, including easyaccessibility, wide content selection, and innovative platforms with social features.For 2017, the transaction volume of China mobile ecommerce market reached to over RMB 4 trillion according to the China Mobile Ecommerce IndustryResearch Report from iResearch, representing an increase of 19.1%. For the next few years, China mobile online shopping will likely maintain steady growth. Thefocal point of competition in China mobile ecommerce market has shifted from infrastructure service providers to integrated and accurate services providers.Drawing in users with compelling content in diversified scenes has become a trend.21The revenue for China mobile gaming industry reached RMB 144.58 billion for the year of 2017, according to the China Mobile Game Industry ResearchReport from iResearch. With increased investment by largescale enterprises in the sector of mobile games and the strict enforcement of the mobile game industryrelated regulatory policy guidelines, the mobile game market as a whole will become more organized and standardized.According to the Annual Analysis of China Mobile Reading Industry from Analysis, for the year of 2017, the mobile reading market in China reached toRMB 14.04 billion. By the end of 2016, the size of China mobile's reading market reached RMB 11.86 billion, showing an increase of 18.38% in 2017.The closed and boring environment for passengers of longdistance travel and high roaming charges lead to a strong demand to use our rail WiFi services.Passengers, through their own mobile phone, have access to the free WiFi network in each carriage, access to our rich mobile internet entertainment content andtravel services. According to the annual statistical bulletin of China Railway Corporation in 2017, there were about 6,030 trains in operation in China in 2017,consisting of 2,935 high speed trains and 3,095 express trains. The rail WiFi system that we have installed are currently all on express trains. The market value will bemultiplied several times following the extended coverage of service on other trains.Our StrengthsWe believe the following strengths differentiate us from our competitors:Our strategy is to build up personalized and targeted service products for travelers through rail WiFi networks, enabling our services to evolve into a coredriving distribution platform that provides content, news, games, ecommerce, OTO service, travel services and advertising and marketing. In comparison, ourcompetitors offer simple forms of media services on trains. We focus on personalized and targeted matching between users on long distance trips and services. Ourcompetitors focus on operating and generating internet traffic.We possess a complete set of technology system including network, client end and service and operation platform. We have patent protections for WiFiequipment on trains. Our technology strengths are briefly summarized below.WiFi EquipmentPatent protected. Supports WiFi/3G/4G telecom modules; 4 core CPU with X86 architecture, and SSD hard disk with big storage for localcontents.InfrastructureThe technology infrastructures include the application program system, big data gathering and processing systems, intelligence cloudsservice deployment structure systems and our WiFi hardware server deployment structure system. The operation center, big data center,contents center and railWiFi server system are built on this infrastructure. On the above layer, the equipment management platform,account and payment platform, contents management platform and advertisement distribution platform are set up for daily managementpurpose.LuoKuang strengthens the connection of services among people, setting and locations. In catering to people on the move, we anticipate strengthening therelationship between users and their locations in a given moment. Currently, LuoKuang provides the link between users and thirdparty service providers andprovides value added services to both users and thirdparty service providers. The connection is not simply a traffic diversion, but also the direct presentation ofrelevant services in the LuoKuang platform. The open API interface and independent product software package allows easy access by service providers anddevelopers and supports data service, advertisement operations, billing, users promotion and product marketing services. As an API product, LuoKuang does notcreate content or services. The content and services are provided by our partners in the LuoKuang platform. Now, the majority of top mobile internet content andservices providers in China have a presence in the Luokuang platform. Those include, but are not limited to, Toutiao, Wangyi News, iqiyi, Letv, YoudianCinema(Hollywood films), Sohu video, Phoenix Video, Kugou Music, FM Qingting, iReader, Baidu Literature, Phoenix Novel, Baidu Game, Meituan, Dianping, andsimilar content providers.22Our StrategyLuoKuang is positioned to provide API interface services and geographic information social services. The API interface services are provided within thetypical BC model. LuoKuang pushes the content and services from thirdparty service providers to users. The local businesses, service practitioners, residents, andforeign travelers are all defined as a “user” and may participate in social interactions based on local value information and generate UGC content. The socalled localvalue information is defined as information, views, evaluations, experiences and experience sharing related to the local cultural scene, native products,entertainment, food, tourism and activities.The LuoKuang user growth strategy is to have access to users through the travelers’ use of mobile devices in connection with longdistance train travel.Through deploying WiFi systems on trains and providing free WiFi access to passengers, LuoKuang is able to have consistent access to longdistance travelers.The WiFi system on the train has become a powerful user portal at the early stage of LuoKuang and has gained substantial user traffic. We are in a leading positionin terms of numbers of trains contracted and trains in operation with our free WiFi system. We have contracted with about 700 trains, which cover almost 560 millionannual passenger trips. As of the date of this report, approximately 290 trains are operating our rail WiFi system. We will continue to install our rail WiFi system inthe following years.The development strategy for LuoKuang encompasses the following:1.Enhance our local cycle service (a recommendation service system based on the location of travelers after their arrival, recommendations includingtourist attractions, local specialties and other items of interest), strengthen services for arrivals in the form of social interaction and focus on the valueof relationships between users and their current locations.2.Focus on the development of geographic positioning technology. Get the business of local cycle and users on train mixed together. We will put oureffort to maximize the synergy effect.3.Big Data: Behavior data about passenger trips is obtained via the traffic entrance of rail WiFi and these data will help to optimize our product.4.While enhancing setting service experiences and optimizing entertainment experiences, we will enrich ecommerce services on trains featuringrecommendations of customized products and ecommerce shopping guidance of products labeled with specific geographic location (and trafficdiversion).5.Focus on API positioning and attract more premium vertical service providers (contents and services).Intellectual PropertyWe have registered the following software copyrights, patents and trademarks for our business operations. We believe this intellectual property forms anintegral part of our competitive strength.23Patents:We have been granted some inventions by the State Intellectual Property Office of PRC. We possess a complete set of technology system includingnetwork, client end and service and operation platform. We have patent protections for WiFi equipment on trains. We have received the following patents:No.Name of patentTypeRegistrationNumberDate of Insurance1.Wireless communication multimedia chip business consumer informationacquisition terminal deviceInventionZL 2010 2 0528767.9Sep 21, 20112.A user behavior processing method and device for intelligent terminalInventionZL 2013 1 0301728.3May 27, 20153.A global positioning system terminal deviceInventionZL 2010 2 0253452.8Nov 7, 20114.A wireless multimedia serverInventionZL 2013 2 0220183.9Nov 13, 20135.Ordering system of passengers on trainInventionZL 2015 2 0095381.6Aug 5, 20156.A wireless multimedia serverInventionZL 2015 2 0201382.4Oct 28, 20157.An antenna structureInventionZL 2016 2 0424352.4Mar 1, 20178.Spatial data progressive transmission method and deviceInvention201010617383.9Jun 15, 20169.Methods and devices for conflict detection and avoidance of spatial entity elementlabelingInvention201010617385.8Mar 26, 201410.Spatial data processing method and deviceInvention201010617399.XJun 26, 201311.Method and device of spatial data simplificationInvention201010617400.9Mar 13, 201312.Method and device for judging the occlusion type of space entityInvention201010617403.2Sep 25, 201313.A method and device for distributed mapping of 3d model dataInvention201110274924.7Mar 26, 201414.Data simplification of 3d model, gradual transmission method and deviceInvention201110275336.5Mar 25, 201515.Spatial data transmission method and deviceInvention201110306393.5Dec 13, 201416.Methods and devices for spatial data processing, simplification and progressivetransmissionInvention201210104250.0Jun 10, 201517.Spatial data progressive transmission method and deviceInvention201310367021.2Jun 23, 201718.Simplification method and device of spatial dataInvention201310367128.7Sep 22, 201719.The method and device to accelerate transmission and display of graphic dataacross platformsInvention201210116149.7Aug 10, 201620.Methods and devices related to spatial data compression, decompression andprogressive transmissionInvention201310136682.4Nov 10, 2017We also have two patents outside of China.No.Name of patentCountryNationalRegistrationNumberDate ofInsurance1.Spatial data processing method and deviceJapan2012547439Jun 20, 20142.Methods and devices related to spatial data compression, decompression andprogressive transmissionU.S.A14/394,610Sep 5, 201724Software Copyrights:We have received the following software copyrights from the National Copyright Administration (“NCA”) of PRC:No.Name of CopyrightAchievement approachRegistration numberTime of obtainExpire time1.WAP PUSH Business operation platformsystemIndependent research anddevelopment2007SRBJ1464Jul 23, 200750 years2.TDSCDMA Streaming media businessmanagement platform software V1.0Independent research anddevelopment2009SRBJ0412Jan 22, 200950 years3.Content management platform systemsoftware V1.0Independent research anddevelopment2009SRBJ1374Apr 1, 200950 years4.Mobile multimedia broadcast electronicservice guide system software V1.0Independent research anddevelopment2009SRBJ1365Apr 1, 200950 years5.Mobile video business operation platformsystem V1.0Independent research anddevelopment2007SRBJ1463Jul 23, 200750 years6.Mobile multimedia broadcast emergencybroadcast platform software V1.0Independent research anddevelopment2010SRBJ0720Mar 5, 201050 years7.Mobile multimedia broadcast audio richmedia interactive platform softwareV1.0Independent research anddevelopment2010SRBJ0719Mar 5, 201050 years8.Printer typesetting and printing softwareV1.0Independent research anddevelopment2011SRBJ4190Sep 28, 201150 years9.Electronic newspaper business supportplatform software V1.0Independent research anddevelopment2011SRBJ4186Sep 28, 201150 years10.Public information business platformsoftware V1.0Independent research anddevelopment2011SRBJ3810Sep 27, 201150 years11.User interface scripting software V1.0Independent research anddevelopment2011SRBJ3809Sep 27, 201150 years12.Integrated business management platformsoftware V1.0Independent research anddevelopment2012SR003002Jan 16, 201250 years13.Interactive business development platformsoftwareIndependent research anddevelopment2011SRBJ4593Nov 29, 201150 years14.Instant messaging and messaging systemsoftwareIndependent research anddevelopment2014SR122231Aug 5, 201450 years15.General statistical platform software forclient productsIndependent research anddevelopment2014SR216662Dec 30, 201450 years16.CMMB Data broadcast managementplatform softwareIndependent research anddevelopment2009SRBJ0391Jan 22, 200950 years17.Integrated passenger train service systemIndependent research anddevelopment2012SR083665Sep 5, 201250 years25No.Name of CopyrightAchievement approachRegistration numberTime of obtainExpire time18.JHBY Train inspection managementsystemIndependent research anddevelopment2013SR015105Feb 21, 201350 years19.Integrated information engine platformsoftware V1.0Independent research anddevelopment2014SR040347Nov 30, 200150 years20.Super information engine developmentplatform software V5.0Independent research anddevelopment2014SR036792Mar 5, 200350 years21.Core map super network informationengine platform software V1.0Independent research anddevelopment2014SR036772Sep 15, 200750 years22.Integrated management of the grid gissoftware V1.0Independent research anddevelopment2014SR036808Jun 20, 200850 years23.Core map rural power grid equipment GPSpatrol system software V1.0Independent research anddevelopment2014SR036810Dec 10, 200850 years24.Diagram grid patrol PDA system softwareV1.0Independent research anddevelopment2014SR036778Dec 12, 200850 years25.Core map geographic information enginedesktop platform software V1.0Independent research anddevelopment2014SR036614Jan 15, 200950 years26.Integrated management of the gridgeographic information Web systemsoftware V1.0Independent research anddevelopment2014SR036799Mar 10, 200950 years27.Core map railway power supply equipmentGPS patrol system software V1.0Independent research anddevelopment2014SR036783Mar 25, 201050 years28.Core map network 3 d map server softwareV1.0Independent research anddevelopment2014SR036788Feb 20, 201150 years29.Core map network 3d map clientsoftwareV1.0Independent research anddevelopment2014SR036637Feb 22, 201150 years30.Core map 3d map network publishingplatform software V1.0Independent research anddevelopment2014SR036633Mar 10, 201150 years31.Core map 3d map network release pluginsystem software V1.0Independent research anddevelopment2014SR036622Mar 15, 201150 years32.Core map network 3d map smartphoneplatform software V1.0Independent research anddevelopment2014SR036638Apr 28, 201150 years33.Core map network GIS Shared mobileplatform software V1.0Independent research anddevelopment2014SR036634Oct 31, 201150 years34.Core map network GIS sharing platformsoftware V1.0Independent research anddevelopment2014SR036639Dec 16, 201150 yearsTrademarks:We have registered the following trademarks with the Trademark Office, State Administration for Industry and Commerce in the PRC:NoTrademarkClassification NumberValid PeriodRegistration Number1Y图形382010.04.212020.04.2067460692Y图形412010.09.072020.09.0667460673YRADIO文字352010.07.212020.07.2067334374YRADIO文字382010.04.21.2020.04.2067334385YRADIO文字412010.09.072020.09.0667334396LookLook图形382009.04.072019.04.0646660517LookLook图形422008.12.212018.12.2046660508YTV文字352010.07.212020.07.2067335799YTV文字382010.05.282020.05.27673357810YTV文字412010.09.072020.09.06673358111YTV文字422010.09.072020.09.06673358012YOUTV文字352010.07.212020.07.20673344013YOUTV文字382010.05.282020.05.27673344114xfeng文字352012.03.282022.03.27922914526NoTrademarkClassification NumberValid PeriodRegistration Number15xfeng文字382012.03.282022.03.27922916016xfeng文字412012.03.282022.03.27922919017xfeng文字422012.03.282022.03.27922922118中传视讯文字+图形422008.12.212018.12.20466604719中传视讯文字422008.12.212018.12.20466604820中传视讯文字382008.12.212018.12.20466604921新蜂文字382011.08.212021.08.20853890722新蜂文字422012.01.282022.01.27853907823新蜂.潮文字382011.08.212021.08.20853910424新蜂.潮文字422012.01.282022.01.27853914125新影力412014.08.282024.08.271228864326小人图形352014.08.282024.08.271228798527小人图形382014.08.282024.08.271228858028小人图形412014.08.282024.08.271228862929小人图形422014.08.282024.08.271228843530中传文字382014.08.282024.08.271228826731中传图形382014.08.282024.08.271228828932中童文字412014.08.072024.08.061221408533中童在线文字412014.08.072024.08.061221409234翠鸟文字382014.08.072014.08.061221405835翠鸟文字422014.08.072014.08.061221412536爱翠鸟文字382014.08.072024.08.061221406637爱翠鸟文字412014.08.072024.08.061221409638爱翠鸟文字422014.08.072024.08.061221412639翠鸟图形352014.08.072024.08.061221404040翠鸟图形382014.08.072024.08.061221407441翠鸟图形412014.08.072024.08.061221410042翠鸟图形422014.08.072024.08.061221413143信号小喇叭图形+CMEDIA412015.03.212025.03.201248043944LookLook图形382015.11.142025.11.131153342845LookLook图形422014.06.212024.06.201153372046LookLook文字382014.07.142024.07.131153406747LookLook文字422014.04.142024.04.131153422748L图形352014.02.282024.02.271153500249L图形382014.02.282024.02.271153507350L图形412014.02.282024.02.271153518151L图形422014.02.282024.02.271153526252箩筐图形412016.06.142026.06.131658022853箩筐图形422016.06.142026.06.131658022754箩筐文字422016.09.282026.09.271658024955箩筐文字412016.06.142026.06.131658025056箩筐文字352016.09.212026.09.201658025257箩筐文字92016.06.142026.06.131658025327NoTrademarkClassification NumberValid PeriodRegistration Number58箩筐图形382016.06.142026.06.131658022959箩筐图形352016.06.142026.06.131658023060箩筐图形92016.06.142026.06.131658023161微时光文字422016.09.282026.09.271658024762传游录屏文字92016.06.142026.06.131678214463传游录屏文字352016.06.142026.06.131678214364传游录屏文字382016.06.142026.06.131678214265传游录屏文字412016.06.142026.06.131678214166传游录屏文字422016.06.142026.06.131678214067录游器文字92016.06.142026.06.131678213568录游器文字352016.06.142026.06.131678213669录游器文字382016.06.142026.06.131678213770录游器文字412016.06.142026.06.131678213871录游器文字422016.06.142026.06.131678213972畅联TV文字412016.01.212026.01.201579246773畅联TV文字382016.01.212026.01.201579246874SuperEngine92016.01.212026.01.20812572275SuperEngine422016.01.212026.01.20812572876超擎9/422016.01.212026.01.201647320577SUPERENGINE9/422016.01.212026.01.2016473185*See below for an explanation of each classification number used in the table above.Classification No. 9: data processing apparatus, couplers (data processing equipment), computer software (recorded), monitors (computer programs), smartcards (integrated circuit cards), electrodynamic apparatus for the remote control of signals, alarms, and electric installations for the remote control of industrialoperations.Classification No. 35: auctioneering, sales promotion for others, marketing analysis, marketing research, importexport agencies, advisory services forbusiness management, business management for franchise, personnel management consultancy, relocation services for businesses, and systemization ofinformation into computer databases.Classification No. 38: Include services that enable at least sensory communication between two people. Such services include that allow one person to talkto another, send messages from one person to another, Make verbal or visual contact between one person and the other. This classification especially include theservice for broadcasting radio or television programs. Except for radio advertising services and telemarketing services.Classification No. 41: instruction services, teaching, education information, tuition, arranging and conducting of colloquiums, publication of electronicbooks and journals online, amusements, and vocational guidance.Classification No. 42: technical research, studies (technical project), computer software design, updating of computer software, recovery of computer data,computer systems analysis, installation of computer software, computer antivirus protection, and research and development for others. 28Business Certificates and QualificationsWe have obtained all necessary regulatory certifications to conduct our business in the PRC, including without limitation, the following: SoftwareEnterprise Recognition Certificate, Computer Information System Integration Qualification Certificate, Construction Enterprise Qualification Certificate, and SecurityTechnology & Protection Enterprise Certificate. We have also been properly certified as a hightech enterprise and have met the ISO 9001:2000 qualificationmanagement system.Legal ProceedingsAlthough we may, from time to time, be involved in litigation and claims arising out of our operations in the normal course of business, we do not believethat we are a party to any litigation that will have a material adverse impact on our financial condition or results of operations. To our knowledge, other than asdescribed below there are no material legal proceedings threatened against us. From time to time, we may be subject to various claims and legal actions arising in theordinary course of business. Following the consummation of the AEA, we became successor in interest to the legal proceedings described below.Litigation with Shanghai Fusheng Weier Intelligent Control Technology Co., Ltd.On January 22, 2016, Zhong Chuan Rui You and Shanghai Fusheng Weier Intelligent Control Technology Co., Ltd. (“Fusheng Weier”) signed a contract forequipment of $1,652,842 (RMB10,800,000). Since Zhong Chuan Rui You did not make the payments of $1,126,381 (RMB7,360,000) on the due dates, Fusheng Weierfiled a lawsuit against Zhong Chuan Rui You in Shanghai Xuhui District People's Court on October 8, 2016. On March 9, 2017, Xuhui District People's Court issuedthe verdict requiring Zhong Chuan Rui You to pay the overdue debts. In August 2017, C Media Limited made the payment of $512,075 (RMB3,346,000). Theremaining balance has been accrued in accounts payable. The payment schedule for the remaining balance is being negotiated by the two parties. On February 5,2018, a hearing was held adding Zhong Chuan Shi Xun as a defendant. The Group plans to settle the remaining balance within one year.Lawsuit with Gansu Jinlun Culture Media Co., Ltd.On August 22, 2014, Zhong Chuan Rui You and Gansu Jinlun Culture Media Co., Ltd. (“Gansu Jinlun”) signed a “Lanzhou Railway Bureau AirconditionedTrain WiFi Network System Advertising Operation Rights Agreement” for advertising on 72 trains of $1,467,880 (RMB9,604,633). Due to the dispute on theproject implementation, Zhong Chuan Rui You did not pay the advertising fee. On August 23, 2017, Gansu Jinlun filed a lawsuit with Gansu Intermediate People'sCourt. On December 19, 2017, Gansu Intermediate People's Court issued a verdict, ruling that Zhong Chuan Rui You settle the overdue advertising fee. Since only 18out of 72 trains have been installed with Wifi network system, Zhong Chuan Rui You disputed and appealed to the verdict. The next court trial date has not yet beendetermined.C Media and Gansu Jinlun are negotiating a potential settlement to resume the contract. According to the legal counsel, it is probable that the settlementwill amount to approximately $459,000 (RMB3,000,000); therefore, this amount has been accrued in accounts payable as at December 31, 2017.Litigation with Shenzhen Hua Xun Fang Zhou Technology Co., Ltd.On June 16, 2015, Zhong Chuan Rui You signed a cooperation agreement with Shenzhen Hua Xun Fang Zhou Technology Co., Ltd. (“Shenzhen Hua Xun”)and Xuesong Song, a major shareholder of C Media Limited. Pursuant to this agreement, Zhong Chuan Rui You procures equipment from Shenzhen Hua Xun.Xuesong Song acts as a joint liability guarantor for the entire debts of Zhong Chuan Rui You under this agreement. As Zhong Chuan Rui You did not make thepayments on the due dates, Shenzhen Hua Xun filed a lawsuit with Shenzhen Baoan District People's Court on May 31, 2016. On November 1, 2016, Zhong ChuanRui You, Xuesong Song and Shenzhen Hua Xun reached a settlement in Shenzhen Baoan District People's Court to settle $1,735,389 (RMB11,355,000) in fourinstalments. On December 30, 2017, the debt was assigned to C Media Limited.29C. ORGANIZATIONAL STRUCTUREThe following diagram illustrates our corporate structure and the place of formation and affiliation of each of our subsidiaries and affiliates as of September30, 2018.30The following diagram illustrates our corporate structure and the place of formation and affiliation of each of our subsidiaries and affiliates as of December31, 2017.Contractual Arrangements with Beijing Zhong Chuan Shi Xun Technology Limited’s Subsidiaries and Their Respective ShareholdersTo comply with the PRC legal restrictions on foreign ownership of companies that operate mobile application services, our subsidiaries operate in suchrestricted service areas in the PRC through certain PRC domestic companies, whose equity interests are held by certain management members or founders of the LKTechnology Ltd. Part of the registered capital of these PRC domestic companies was funded by certain management members or founders of LK Technology Ltd. LKTechnology Ltd., through its subsidiary Zhong Chuan Tian Xia Information and Technology (Shenzhen) Limited (the “WFOE”), has entered into an exclusivebusiness cooperation agreement with Beijing Zhong Chuan Shi Xun Technology Limited (“Zhong Chuan Shi Xun” or the “VIE”) the PRC domestic company, whichentitle the WFOE to receive a majority of profit of Zhong Chuan Shi Xun. In addition, Zhong Chuan Tian Xia Information and Technology (Shenzhen) Limited hasentered into certain agreements with those management members or founders, including equity interest pledge agreement of the equity interests held by thosemanagement members or founders and exclusive option agreement to acquire the equity interests in these companies when permitted by the PRC laws, rules andregulations. Details of the typical VIE structure of our significant consolidated VIE, primarily domestic companies associated with the operations such as ZhongChuan Shi Xun and its subsidiaries of Zhong Chuan Rui You, Huoerguosi Luokuang and Jiu Zhou Shi Dai, are set forth below: Exclusive Business Cooperation AgreementThe VIE has entered into an exclusive business services agreement with the WFOE, pursuant to which the WFOE provides exclusive business services tothe VIE. In exchange, the VIE pays a service fee to the WFOE which amounts to be no less than the 80% of the VIE’s aftertax profit, resulting in a transfer ofsubstantially all of the profits from the VIE to the WFOE.Exclusive Option AgreementThe VIE equity holders have granted the WFOE exclusive call options to purchase their equity interest in the VIE at an exercise price equal to the minimumprice as permitted by applicable PRC laws. The WFOE may nominate another entity or individual to purchase the equity interest, if applicable, under the call options.Each call option is exercisable subject to the condition that applicable PRC laws, rules and regulations do not prohibit completion of the transfer of the equityinterest pursuant to the call option. The VIE agrees not to distribute any dividends to the VIE equity holders without the approval of WFOE.31Equity Interest Pledge AgreementPursuant to the equity pledge agreement, the VIE equity holders have pledged all of their interests in the equity of the VIE as a continuing first prioritysecurity interest in favor of the WFOE to secure the performance of obligations by the VIEs and/or the equity holders under the exclusive business cooperationagreement. The WFOE is entitled to exercise its right to dispose of the VIE equity holders’ pledged interests in the equity of the VIE and has priority in receivingpayment by the application of proceeds from the auction or sale of such pledged interests, in the event of any breach or default under the exclusive businesscooperation agreement, if applicable. These equity pledge agreement remain in force until all the obligations under the exclusive business cooperation agreementhave been fulfilled.The exclusive business cooperation agreement and equity interest pledge agreement described above also enable the Company to receive substantially allof the economic benefits from the VIE by typically entitling the WFOE to all dividends and other distributions declared by the VIE and to any distributions orproceeds from the disposal by the VIE equity holders of their equity interests in the VIE.D. PROPERTY AND EQUIPMENTWe lease offices located at Lab 30 & Lab 32, SOHO 3Q, No 9, Guanghua Road, Chaoyang District, Beijing, which covers a floor space of 600 square meters.These leases expire at different times throughout 2018 and are renewable upon negotiation.ITEM 4A. UNRESOLVED STAFF COMMENTSNone.ITEM 5. OPERATING AND FINANCIAL REVIEW AND PROSPECTSA . OPERATING RESULTS.The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our consolidatedfinancial statements and the notes to those financial statements appearing elsewhere in this report. This discussion and analysis contains forwardlookingstatements that involve significant risks and uncertainties. As a result of many factors, such as our anticipated growth strategy, our plans to recruit moreemployees, our plans to invest in research and development to enhance our product or service lines, our future business development, results of operations andfinancial condition, expected changes in our net revenues and certain cost or expense items, our ability to attract and retain customers, trends and competitionin the enterprise mobile software application market, and the factors set forth elsewhere in this report, our actual results may differ materially from thoseanticipated in these forwardlooking statements. In light of those risks and uncertainties, there can be no assurance that the forwardlooking statementscontained in this report will in fact occur. You should not place undue reliance on the forwardlooking statements contained in this report.The forwardlooking statements speak only as of the date on which they are made, and, except to the extent required by U.S. federal securities laws, weundertake no obligation to update any forwardlooking statement to reflect events or circumstances after the date on which the statement is made or to reflectthe occurrence of unanticipated events. Further, the information about our intentions contained in this report is a statement of our intention as of the date of thisreport and is based upon, among other things, the existing regulatory environment, industry conditions, market conditions and prices and our assumptions as ofsuch date. We may change our intentions, at any time and without notice, based upon any changes in such factors, in our assumptions or otherwise.32Unless the context otherwise requires, all references to (i) “PRC” and “China” are to the People’s Republic of China; (ii) “U.S. dollar,” “$” and “US$”are to United States dollars; and (iii) “RMB”, “Yuan” and Renminbi are to the currency of the PRC or China.OverviewLuokung Technology was incorporated on October 27, 2009 under the laws of the British Virgin Islands. We are a holding company and conduct ouroperations through LK Technology Ltd., a British Virgin Islands limited liability company (“LK Technology”) and its whollyowned subsidiaries, MMB Limited andMobile Media (China) Limited and their respective subsidiaries and a contractuallycontrolled entity in the PRC named Beijing Zhong Chuan Shi Xun Technology,which hold the rights to deploy WiFi systems on about 700 trains in China, including 290 trains in which WiFi systems have already been installed and are inoperation. In May 2010, we consummated an initial public offering of our American Depository Shares, or ADSs, for gross proceeds of $16 million, and our ADSswere listed on the NASDAQ Capital Market under the ticker symbol “KONE”. Our ordinary shares are not currently listed on any trading market. Our AmericanDepository Shares (“ADSs”) were voluntarily delisted from the NASDAQ Capital Market on September 19, 2018. We have applied to NASDAQ for the listing of ourordinary shares on the NASDAQ Capital Market and received an approval for listing of Ordinary Shares on August 6, 2018, and as of the date of this transitionreport, that application and approval are currently under review.On August 17, 2018, we consummated an asset exchange transaction, pursuant to which we exchanged all issued and outstanding capital stock in TopskyInfoTech Holdings Pte Ltd., the parent of Softech, for the issued and outstanding capital stock of LK Technology (the “Asset Exchange”). In connection with theAsset Exchange, we changed our name on August 20, 2018, and on September 20, 2018, completed the issuance to the shareholders of C Media Limited, the formerparent of LK Technology, of (i) 185,412,599 of our ordinary shares, par value $0.01 per share and (ii) 1,000,000 of our preferred shares. Upon the consummation of theAsset Exchange, we ceased our previous business operations and became a company focused on the provision of WiFi and mobile application products for longdistance travelers in China.On August 25, 2018, LK Technology entered into a Stock Purchase Agreement (the “Agreement”) with the shareholders (“Shareholders”) of SuperengineHoldings Limited, a limited liability company organized under the laws of the British Virgin Islands (the “Superengine”), pursuant to which LK Technology acquiredall of the issued and outstanding capital stock of Superengine for an aggregate purchase price of US$60 million (the “Purchase Price”), which are paid by theissuance of our Ordinary Shares in an amount equal to the quotient of (x) the Purchase Price divided by (y) the average of the closing prices of the Ordinary Shareson the NASDAQ Capital Market over the 12 months period preceding July 31, 2018. We are a party to the Agreement in connection with the issuance of theOrdinary Shares and certain other limited purposes.Results of operations for the fiscal year ended December 31, 2017 compared to the fiscal year ended December 31, 2016.RevenueWe provide displaybased online advertising services to customers by integrating text description, image and video, and displaying the advertisements in aprominent position of LuoKuang Application. We recognize revenue in accordance with ASC 605, over the contractual term based on the agreements andconfirmation letters signed by both parties, commencing on the date the customer’s advertisement is displayed on our platform.For the year ended December 31, 2017, we had revenue of $26,082,417, as compared to revenue of $5,233,145 for the year ended December 31, 2016, anincrease of $20,849,272, or 398.4%, which was primarily due to the increase of our advertising clients.Cost of revenueOur cost of revenue primarily consists of depreciation, labor cost, WiFi equipment installation fees, data charges, annual payments to local railway bureau,other overhead costs.33Cost of revenue for the year ended December 31, 2017 was $5,547,779, representing a decrease of $767,725 or 12.2% as compared to $6,315,504 for the yearended December 31, 2016. The decrease was primarily attributable to the decrease in labor cost as a result of our cost control and a decrease in the number ofmaintenance staff. Additionally, data charges decreased as train passengers prefer using their mobile data, leading to a decrease in 3G and 4G data.Selling and marketing expenseOur selling and marketing expense mainly include promotional and marketing expenses and compensation for our sales and marketing personnel.Selling expense totaled $23,908,733 for the year ended December 31, 2017, as compared to $6,209,804 for the year ended December 31, 2016, an increase of$17,698,929 or 285.0%. The increase was primarily attributable to the increase in promotional and marketing activities conducted by the Company.General and administrative expenseOur general and administrative expenses consist primarily of salaries and benefits for our general and administrative personnel, rent, fees and expenses forlegal, accounting and other professional servicesGeneral and administrative expense totaled $2,451,249 for the year ended December 31, 2017, as compared to $2,108,854 for the year ended December 31,2016, an increase of $342,395 or 16.2%.Research and development expenses.Research and development expenses primarily consist of salaries and benefits for research and development personnel.Research and development expenses totaled $1,046,198 for the year ended December 31, 2017, as compared to $2,882,202 for the year ended December 31,2016, a decrease of $1,836,004 or 63.7%. The decrease was primarily attributable to the Company reduced its expenses in research and development temporarily asour products are quite stable at present.Loss from operationsAs a result of the factors described above, for the year ended December 31, 2017, loss from operations amounted to $6,871,542, as compared to loss fromoperations of $12,283,219 for the year ended December 31, 2016, a decrease of $5,411,677, or 44.1%.Other income/expenseOther income/expense mainly include interest income from bank deposits, foreign currency transaction gain, and loss from investment.Net lossAs a result of the factors described above, our net loss was $6,810,454 for the year ended December 31, 2017, compared to net loss of $13,049,031 for theyear ended December 31, 2016, a decrease of $6,238,577 or 47.8%.Foreign currency translation adjustmentOur reporting currency is the U.S. dollar. The functional currency of our parent company and subsidiaries of Merchant Supreme and Prime Cheer is the U.S.dollar and the functional currency of the Company’s subsidiaries incorporated in China is the Chinese Renminbi (“RMB”). The financial statements of oursubsidiaries incorporated in China are translated to U.S. dollars using period end rates of exchange for assets and liabilities, and average rates of exchange (for theperiod) for revenue, costs, and expenses. Net gains and losses resulting from foreign exchange transactions are included in the consolidated statements ofoperations and comprehensive loss. As a result of foreign currency translations, which are a noncash adjustment, we reported a foreign currency translation gain of$90,671 for the year ended December 31, 2017, as compared to a foreign currency translation loss of $387,375 for the year ended December 31, 2016. This noncashgain had the effect of increasing/decreasing our reported comprehensive income/loss.34Comprehensive lossAs a result of our foreign currency translation adjustment, we had comprehensive loss for the year ended December 31, 2017 of $6,719,783, compared tocomprehensive loss of $12,661,656 for the year ended December 31, 2016.B. LIQUIDITY AND CAPITAL RESOURCESThe information contained in “Item 5. Operating and Financial Review and Prospects – A. Operating Results – Liquidity and Capital Resources” isincorporated herein by reference.C. RESEARCH AND DEVELOPMENT, PATENTS AND LICENSES, ETC.The discussions of our research and development activities were contained in “Item 4. Information about our Company – B. Business Overview –Research and Development” and “Item 5. Operating and Financial Review and Prospects – A. Operating Results – Operating Expenses – Research and DevelopmentExpenses” are incorporated herein by reference. In the years ended December 31, 2017 and 2016, we spent $1,046,198 and $2,882,202, respectively, on research anddevelopment activities.D. TREND INFORMATION.Industry and Market OutlookChina has awarded licenses to mobile phone companies to provide the superfast 4G network to customers. The licenses, which are designed to give mobilephone users faster access to services, were granted by the government to China Mobile, China Unicom Hong Kong and China Telecom. Since the grants, ChinaMobile has offered 4G to subscribers from December 18, 2013. China Unicom and China Telecom, the country's other two major carriers, also offer 4G wireless. Thenumber of China Mobile 4G customers has exceeded 900 million by the end of October in 2017. The move greatly bolstered business for telecom equipment makersand a range of other companies.Under China’s 12th FiveYear Plan, a key priority is for China to transition from “Made in China” to “Designed in China.” In order to achieve this goal, thegovernment plans to heavily invest in science and technology education and R&D so as to further develop China’s intellectual property rights system and support“NextGeneration IT” as a Strategic Emerging Industry (SEI). Additionally, China plans to upgrade the technological capabilities of private and public services,including “triple play” services (the convergence of telecom, broadcasting and Internet networks), ecommerce, and egovernment and statistics systems.Furthermore, the government plans to invest in R&D of the "Internet of things" and cloud computing, and develop digital and virtual technologies.E. OFFBALANCE SHEET ARRANGEMENTSWe have not entered into any financial guarantees or other commitments to guarantee the payment obligations of any third parties. We have not enteredinto any derivative contracts that are indexed to our shares and classified as shareholder’s equity, or that are not reflected in our consolidated financial statements.Furthermore, except for the mortgage referenced above, we do not have any retained or contingent interest in assets transferred to an unconsolidated entity thatserves as credit, liquidity or market risk support to such entity. We do not have any variable interest in any unconsolidated entity that provides financing, liquidity,market risk or credit support to us or engages in leasing, hedging or research and development services with us.35F. TABULAR DISCLOSURE OF CONTRACTUAL OBLIGATIONSAs of December 31, 2017, we did not have any contractual obligations required to be disclosed in this Item 5.F. ITEM 6. DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES.A. DIRECTORS AND SENIOR MANAGEMENT.Executive Officers and DirectorsThe following table sets forth the names and ages as of the date of this transition report of each of our executive officers and directors:NameAgePositionXuesong Song50Chief Executive Officer, Chairman and DirectorDongpu Zhang50PresidentJie Yu34Chief Financial OfficerKegang Peng46Vice President and DirectorChuang Tao51DirectorDennis Galgano (1)(2)69Director (Independent)Jin Shi (1)(2)49Director (Independent)Jiming Ha (1)(3)56Director (Independent)Zhihao Xu (3)42Director (Independent)(1)Member of the Audit Committee.(2)Member of the Compensation Committee.(3)Member of the Nominating and Corporate Governance Committee.Set forth below is biographical information concerning our executive officers and directors.Xuesong Song is a cofounder of C Media Limited and served as its chairman of the board of directors and chief executive officer from 2012 until theconsummation of the AEA. From February 2014 through April 2017, Mr. Song served as a director of Seven Stars Cloud Group, Inc. (NASDAQ: SSC) and fromJanuary 2013 through February 2015, Mr. Song served as a director of Pingtan Marine Enterprise Ltd. (NASDAQ: PME). From May 2006 through January 2009, Mr.Song served as the Chairman of the Board of ChinaGrowth North Acquisition Corporation, a special purpose acquisition company, which acquired UIB GroupLimited in January 2009, in which he remains a director. Mr. Song has been a principal of Chum Capital Group Limited since August 2001, a merchant banking firmthat invests in growth Chinese companies and advises them in financings, mergers & acquisitions and restructurings, and chief executive officer of Beijing ChumInvestment Co., Ltd. since December 2001. Mr. Song has been a director of Mobile Vision Communication Ltd. since July 2004. Mr. Song received a Master’s ofBusiness Administration degree from Oklahoma City/Tianjin Program.Dongpu Zhang was appointed as the President of the Company effective on August 25, 2018. Mr. Dongpu Zhang has served as the General Manager ofSuperEngine Graphics Software Technology Development (Suzhou) Co., Ltd. (“SuperEngine Suzou”) and the Chief Executive Officer of SuperEngine HoldingLimited since September 2016. From February, 2014 to August, 2016, Mr. Zhang served as vice president of Industrial Development Group under China Fortune LandDevelopment Co., Ltd. From March, 2009 to February, 2014, Mr. Zhang served as the vice president of Aerospace Science and Technology Holding Group Co., Ltd.Mr. Zhang receive his Master Degree of Computer Science from Harbin Institute of Technology in 1994 and his Bachelor Degree of information system fromChangsha Institute of technology in 1991.Jie Yu served as the chief financial officer of C Media Limited from January 2018 until the consummation of the asset exchange transactions. From June 2016to January 2018, Mr. Yu served as chief financial officer and secretary of the board of directors of MTI Environment Group Limited. Prior to joining MTI, Mr. Yuserved as the senior manager at DA HUA CPA from November 2012 to May 2016. Previously, Mr. Yu served as the manager at Crowe Horwath (Hong Kong) CPA.Mr. Yu holds a bachelor degree in accounting and finance from University of Auckland and postgraduate diploma in accounting from University of Auckland.36Kegang Peng served as the Vice Chairman of the board of directors C Media Limited from October 2014 to the consummation of the asset exchangetransactions, and is now a member of the Company’s board of directors. Previously, from 2012 to 2014, Mr. Peng was chairman of the board and founder of JiangsuSuqian Jinghaiboyuan Information and Technology Co., Ltd. Mr. Peng studied at Beijing University of Aeronautics and Astronautics majoring computer andapplication.20F 1 f20f2017_luokungtech.htm AMENDMENT NO. 1 TO FORM 20FUNITED STATESSECURITIES AND EXCHANGE COMMISSIONWASHINGTON, D.C. 20549FORM 20F☐ REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934OR☐ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934For the Fiscal year ended _____________OR☒ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934For the transition period from October 1, 2017 to December 31, 2017☐ SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934Date of event requiring this shell company report Commission file number: 00134738Luokung Technology Corp.(Exact name of Registrant as specified in its charter)Not applicable(Translation of Registrant’s name into English)British Virgin IslandsLAB 32, SOHO 3Q, No 9, Guanghua Road, Chaoyang District, BeijingPeople’s Republic of China, 100020(Jurisdiction of incorporation or organization)(Address of principal executive offices)Mr. Muqiao GengLAB32, SOHO 3Q, No 9, Guanghua Road, Chaoyang District, BeijingPeople’s Republic of China 100020Tel: (86) 1085866721(Name, telephone, Email and/or facsimile number and address of company contact person)Securities registered or to be registered pursuant to Section 12(b) of the Act:Title of each className of each exchange on which registeredOrdinary shares, par value $0.01 per shareNonePreferred shares, par value $0.01 per shareNoneSecurities registered or to be registered pursuant to Section 12(g) of the Act:none(Title of Class)Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act:none(Title of Class)Indicate the number of outstanding shares of each of the issuer’s classes of capital or common stock as of the close of the period covered by the transitionreport. 187,097,599 Ordinary Shares, including 186,383,224 Ordinary Shares represented by 714,375 American Depositary Shares, and 1,000,000 Preferred Sharesoutstanding as of September 20, 2018.Indicate by check mark if the registrant is a wellknown seasoned issuer, as defined in Rule 405 of the Securities Act. ☐ Yes ☒ NoIf this report is an annual or transition report, indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of theSecurities Exchange Act of 1934. ☐ Yes ☒ NoIndicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirementsfor the past 90 days. ☒ Yes ☐ NoIndicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File requiredto be submitted and posted pursuant to Rule 405 of Regulation ST (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that theregistrant was required to submit and post such files). ☒ Yes ☐ NoIndicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a nonaccelerated filer. See definition of “accelerated filer andlarge accelerated filer” in Rule 12b2 of the Exchange Act. (Check one):Large accelerated filer ☐ Accelerated filer ☐ Nonaccelerated filer ☒Indicate by check mark which basis of accounting the registrant has used to prepare the financial statements included in this filing.U.S. GAAP ☒International Financial Reporting Standards as issuedby the International Accounting Standards Board ☐Other ☐If “Other” has been checked in response to the previous question, indicate by check mark which financial statement item the registrant has elected tofollow. Item 17 ☐ Item 18 ☐If this is an transition report, indicate by check mark whether the registrant is a shell company (as defined in Rule 12b2 of the ExchangeAct). ☐ Yes ☒ NoExplanatory NoteLuokung Technology Corp. (the “Company”) is filing this transition report on Form 20F (“Transition Report”) in connection with the completion of theexchange of certain of its assets for substantially all of the assets of C Media Limited (“C Media”) pursuant to that Asset Exchange Agreement, dated January 25,2018 (the “Original AEA”), as supplemented by the Addendum to Asset Exchange Agreement, dated October 3, 2018 (the “Addendum” and together with theOriginal AEA, the “AEA”). Following the consummation of the AEA, on October 4, 2018, the Company changed its fiscal year end from September 30 to the fiscalyear end used by C Media, December 31. This Transition Report covers the threemonth period from Octorber 1, 2017 to December 31, 2017, and the fiscal yearsdescribed herein.In this transition report:●References to the “Company”, “we”, “our” and “us” are to Luokung Technology Corp. and its consolidated subsidiaries and variable interestentity, except as the context otherwise requires;●This transition report on Form 20F covers the threemonth period from October 1, 2017 through December 31, 2017 (the “Transition Period”) andreflects our financial results thereof. Prior to this transition report on Form 20F, our two most recent annual reports on Form 20F cover the fiscalyears ended September 30, 2017 and September 30, 2016, respectively, and reflect financial results for the respective twelvemonth periods fromOctober 1 to September 30. Unless otherwise noted, all references to years are to the calendar year from January 1 to December 31 and referencesto our fiscal year or years are to the fiscal year or years which, prior to the Transition Period, ended September 30, while from and after theTransition Period, ended December 31;●References to an “ADS” are to an American Depositary Share, each of which represents one of our Ordinary Shares with a par value of $.01 pershare.Special Note Regarding Forwardlooking StatementsThis transition report contains forwardlooking statements that involve risks and uncertainties. These statements involve known and unknown risks,uncertainties and other factors that may cause our actual results, performance or achievements to be materially different from those expressed or implied by theforwardlooking statements.You can identify these forwardlooking statements by words or phrases such as “may,” “will,” “expect,” “anticipate,” “aim,” “estimate,” “intend,” “plan,”“believe,” “likely to” or other similar expressions. We have based these forwardlooking statements largely on our current expectations and projections about futureevents and financial trends that we believe may affect our financial condition, results of operations, business strategy and financial needs. You should not placeundue reliance on these forwardlooking statements, which apply only as of the date of this transition report. These forwardlooking statements include:●our future business development, results of operations and financial condition;●expected changes in our net revenues and certain cost or expense items;●our ability to attract and retain customers; and●trends and competition in the enterprise mobile software application market.You should read this transition report thoroughly with the understanding that our actual future results may be materially different from, and/or worse, thanwhat we expect. We qualify all of our forwardlooking statements by these cautionary statements. Other sections of this transition report include additional factorswhich could adversely impact our business and financial performance. Moreover, we operate in an evolving environment. New risk factors and uncertainties emergefrom time to time and it is not possible for our management to predict all risk factors and uncertainties, nor can we assess the impact of all factors on our business orthe extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forwardlooking statements.This transition report also contains estimates, projections and statistical data related to the market for the provision of WiFi and mobile applications inChina. This market data, including data from IDC, a leading provider of market data and intelligence, speaks as of the date it was published and includes projectionsthat are based on a number of assumptions and are not representations of fact. The market for the provision of WiFi and mobile applications in China may not growat the rates projected by the market data, or at all. The failure of the market to grow at the projected rates may materially and adversely affect our business and themarket price of our ADSs. In addition, the rapidly changing nature of the market for the provision of WiFi and mobile applications subjects any projections orestimates relating to the growth prospects or future condition of our market to significant uncertainties. If any one or more of the assumptions underlying the marketdata proves to be incorrect, actual results may differ from the projections based on these assumptions.You should not rely upon forwardlooking statements as predictions of future events. We undertake no obligation to update or revise any forwardlookingstatements, whether as a result of new information, future events or otherwise.TABLE OF CONTENTSPart IItem 1.Identity of Directors, Senior Management and Advisers.1Item 2.Offer Statistics and Expected Timetable.1Item 3.Key Information.1A.Selected Financial Data.1B.Capitalization and Indebtedness.3C.Reasons for the Offer and Use of Proceeds.3D.Risk Factors.3Item 4.Information on the Company.19A.History and Development of the Company.19B.Business Overview.20C.Organizational Structure.30D.Property, Plants and Equipment.32Item 4A.Unresolved Staff Comments.32Item 5.Operating and Financial Review and Prospects.32A.Operating Results.32B.Liquidity and Capital Resources.35C.Research and Development, Patents and Licenses, etc.35D.Trend Information.35E.Offbalance Sheet Arrangements.35F.Tabular Disclosure of Contractual Obligations.36Item 6.Directors, Senior Management and Employees.36A.Directors and Senior Management.36B.Compensation.37C.Board Practices.40D.Employees.43E.Share Ownership.43Item 7.Major Shareholders and Related Party Transactions.44A.Major Shareholders.44B.Related Party Transactions.45C.Interests of Experts and Counsel.45Item 8.Financial Information.45A.Consolidated Statements and Other Financial Information.45B.Significant Changes.46Item 9.The Offer and Listing.46A.Offer and Listing Details.46B.Plan of Distribution.47C.Markets.47D.Selling shareholders.48E.Dilution.48F.Expenses of the issue.48Item 10.Additional Information.48A.Share Capital.48B.Memorandum and Articles of Association.48C.Material Contracts.53D.Exchange Controls.54E.Taxation.61F.Dividends and Paying Agents.67G.Statement by Experts.67H.Documents on Display.67I.Subsidiary Information.68Item 11.Quantitative and Qualitative Disclosures about Market Risk.68Item 12.Description of Securities Other than Equity Securities.69A.Debt Securities.69B.Warrants and Rights.69C.Other Securities.69D.American Depositary Shares.69iPart IIItem 13.Defaults, Dividend Arrearages and Delinquencies.71Item 14.Material Modifications to the Rights of Security Holders and Use of Proceeds.71Item 15.Controls and Procedures.71Item 16.[Reserved.]72Item 16A.Audit Committee Financial Expert.72Item 16B.Code of Ethics.73Item 16C.Principal Accountant Fees and Services.73Item 16D.Exemptions from the Listing Standards for Audit Committees.73Item 16E.Purchases of Equity Securities by the Issuer and Affiliated Purchasers.73Item 16F.Change in Registrant’s Certifying Accountant.73Item 16G.Corporate Governance.73Item 16H.Mine Safety Disclosure.73Part IIIItem 17.Financial Statements.74Item 18.Financial Statements.74Item 19.Exhibits.74Index to Consolidated Financial StatementsF1iiPART IITEM 1. IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS.The directors of Luokung Technology Corp. are Xuesong Song, Kegang Peng, Dennis Galgano, Jin Shi, Jiming Ha, Zhihao Xu and Chuang Tao. Thebusiness address for our directors is LAB 32, SOHO 3Q, No 9, Guanghua Road, Chaoyang District, Beijing, People’s Republic of China.Moore Stephens CPA Limited has served as our auditor since October 5, 2018, and is located at 801806 Silvercord Tower 1, 30 Canton road, Tsimshatsui,Kowloon, Hong Kong. BDO China Shun Lun Pan Certified Public Accountants LLP served as our auditors for the last three years, and are located at 4F, No. 61Nanjing Road, Shanghai, People’s Republic of China.Garvey Schubert Barer, P.C., serves as our legal counsel in the United States, and is located at Flour Mill Building, 1000 Potomac Street NW, Suite 200,Washington, D.C., 200073501.Conyers Dill & Pearlman serves as our legal counsel with regard to the laws of the British Virgin Islands, and is located at 29th Floor, One Exchange Square,8 Connaught Place, Central, Hong Kong.ITEM 2. OFFER STATISTICS AND EXPECTED TIMETABLE.Not applicable.ITEM 3. KEY INFORMATION.A. SELECTED FINANCIAL DATA.Luokung Technology Corp. and its consolidated subsidiaries (“Luokung Technology”, “we”, “us”, or “the Company”) consummated an asset exchangeagreement pursuant to which we exchanged our existing assets with those of C Media Limited (the “Asset Exchange”) on August 17, 2018, and we changed ourname from Kingtone Wirelessinfo Solution Holding Ltd. to our current name on August 20, 2018. On October 4, 2018, in connection with the consummation of the Asset Exchange, we changed our fiscal year end from September 30 to December 31.1The selected financial data for the fiscal years ended December 31 2017 and 2016 have been derived from our audited consolidated and combined financialstatements. The selected consolidated and combined financial data should be read in conjunction with our audited financial statements and the accompanying notesand “Item 5 – Operating and Financial Review and Prospects.” Our consolidated and combined financial statements are prepared and presented in accordance withUnited States generally accepted accounting principles, or U.S. GAAP. Our historical results do not necessarily indicate our results expected for any future periods.You should not view our historical results as an indicator of our future performance.LK TECHNOLOGY LTD. AND SUBSIDIARIESSELECTED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS(IN U.S. DOLLARS)For the years ended December 31,20172016Revenues$26,082,417$5,233,145Less: Cost of revenues5,547,7796,315,504Less: Operating expenses:Selling and marketing23,908,7336,209,804General and administrative2,451,2492,108,854Research and development1,046,1982,882,202Total operating expenses27,406,18011,200,860Loss from operations(6,871,542)(12,283,219)Other income (expense):Interest expense(26,611)(4,412)Foreign exchange gains(losses)350,679(298,257)Loss from investment(428,571)Other income (expense), net(262,980)(34,572)Total other income (expense), net61,088(765,812)Loss before income taxes(6,810,454)(13,049,031)Income taxesNet loss$(6,810,454)$(13,049,031)Other comprehensive income:Foreign currency translation adjustment90,671387,375Total comprehensive loss$(6,719,783)$(12,661,656)2LK TECHNOLOGY LTD. AND SUBSIDIARIESSELECTED CONSOLIDATED BALANCE SHEETS(IN U.S. DOLLARS)As of December 31,20172016Accounts receivable, net of allowance for doubtful accounts9,729,6251,865,836Amounts due from related parties11,760,692Property and equipment, net5,044,8727,771,027Goodwill7,239,9367,239,936TOTAL ASSETS37,582,85821,114,832Accounts payable8,784,5186,446,584Accrued liabilities and other payables12,962,91211,329,613Total liabilities25,311,11333,905,520Total Shareholder’s Equity (Deficit)12,271,745(12,790,688)TOTAL LIABILITIES AND SHAREHOLDER’S EQUITY (DEFICIT)37,582,85821,114,832B. CAPITALIZATION AND INDEBTEDNESS.Not applicable.C. REASONS FOR THE OFFER AND USE OF PROCEEDS.Not applicable.D. RISK FACTORS.An investment in our ADSs and ordinary shares involves a high degree of risk. You should carefully consider the risks and uncertainties described belowtogether with all other information contained in this transition report, including the matters discussed under “Special Note Regarding ForwardLooking Statements,”before you decide to invest in our ADSs or ordinary shares. You should pay particular attention to the fact that we are a holding company with substantialoperations in China and are subject to legal and regulatory environments that in many respects differ from those of the United States. If any of the following risks, orany other risks and uncertainties that are not presently foreseeable to us, actually occur, our business, financial condition, results of operations, liquidity and ourfuture growth prospects would be materially and adversely affected. You should also consider all other information contained in this transition report beforedeciding to invest in our ADSs or ordinary shares.Risks Related to Our Company and Our IndustryThe Company had incurred negative cash flows from operating activities and net losses as of December 31, 2017. These matters raise substantial doubt aboutthe Company’s ability to continue as a going concern.The Company’s consolidated financial statements are prepared using generally accepted accounting principles in the United States of America applicableto a going concern, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. As of and for the year endedDecember 31, 2017, the Company had incurred significant operating losses and working capital deficit. The ability of the Company to continue as a going concern isdependent on the Company obtaining adequate capital to fund operating losses until it becomes profitable. If the Company is unable to obtain adequate capital, itcould be forced to cease operations. The accompanying consolidated financial statements do not include any adjustments that might be necessary if the Companyis unable to continue as a going concern.3We may undertake acquisitions, investments, joint ventures or other strategic alliances, which could have a material adverse effect on our ability to manageour business. In addition, such undertakings may not be successful.Our strategy includes plans to grow both organically and through acquisitions, participation in joint ventures or other strategic alliances. Joint venturesand strategic alliances may expose us to new operational, regulatory and market risks, as well as risks associated with additional capital requirements. We may not beable, however, to identify suitable future acquisition candidates or alliance partners. Even if we identify suitable candidates or partners, we may be unable tocomplete an acquisition or alliance on terms commercially acceptable to us. If we fail to identify appropriate candidates or partners, or complete desired acquisitions,we may not be able to implement our strategies effectively or efficiently. In addition, our ability to successfully integrate acquired companies and their operations may be adversely affected by several factors. These factorsinclude:1.diversion of management’s attention;2.difficulties in retaining customers of the acquired companies;3.difficulties in retaining personnel of the acquired companies;4.entry into unfamiliar markets;5.unanticipated problems or legal liabilities; and6.tax and accounting issues.If we fail to integrate acquired companies efficiently, our earnings, revenue growth and business could be negatively affected.Due to intense competition for highlyskilled personnel, we may fail to attract and retain enough sufficiently trained employees to support our operations; ourability to bid for and obtain new projects may be negatively affected and our revenues could decline as a result.The IT industry relies on skilled employees, and our success depends to a significant extent on our ability to attract, hire, train and retain qualifiedemployees. There is significant competition in China for professionals with the skills necessary to develop the products and perform the services we offer to ourcustomers. Increased competition for these professionals, in the mobile application design area or otherwise, could have an adverse effect on us if we experiencesignificant increase in the attrition rate among employees with specialized skills, which could decrease our operating efficiency and productivity and could lead to adecline in demand for our services.In addition, our ability to serve existing customers and business partners and obtain new business will depend, in large part, on our ability to attract, trainand retain skilled personnel that enable us to keep pace with growing demands for wifi connectivity and mobile applications, evolving industry standards andchanging customer preferences. Our failure to attract, train and retain personnel with the qualifications necessary to fulfill the needs of our existing and futurecustomers or to assimilate new employees successfully could have a material adverse effect on our business, financial condition and results of operations. Ourfailure to retain our key personnel on business development or find suitable replacements of the key personnel upon their departure may lead to shrinking newimplementation projects, which could materially adversely affect our business.4Our business depends substantially on the continuing efforts of our senior executives and other key personnel, and our business may be severely disrupted if welose their services.Our future success heavily depends upon the continued services of our senior executives and other key employees, particularly since we recentlyappointed a new chairman. We are reliant on the services of Mr. Xuesong Song, our chairman, chief executive officer and member of our board of directors. If one ormore of our senior executives or key employees is unable or unwilling to continue in his or her present position, we may not be able to replace such employee easily,or at all, we may incur additional expenses to recruit, train and retain replacement personnel, our business may be severely disrupted, and our financial condition andresults of operations may be materially adversely affected.Our business could suffer if our executives and directors compete against us and our noncompetition agreements with them cannot be enforced.If any of our senior executives or key employees joins a competitor or forms a competing company, we may lose customers, knowhow and keyprofessionals and staff members to them. Also, if any of our business development managers who keep a close relationship with our customers and businesspartners joins a competitor or forms a competing company, we may lose customers, and our revenues may be materially adversely affected. Most of our executiveshave entered, or will soon enter, into employment agreements with us that contain or will contain noncompetition provisions. However, if any dispute arisesbetween our executive officers and us, such noncompetition provisions may not be enforceable, especially in China, where all of these executive officers and keyemployees reside, in light of the uncertainties with China’s legal system. See “Risk Factors — Risks Related to Doing Business in China — Uncertainties withrespect to the PRC legal system could adversely affect us.”Our computer networks may be vulnerable to security risks that could disrupt our services and adversely affect our results of operations.Our computer networks may be vulnerable to unauthorized access, computer hackers, computer viruses and other security problems caused byunauthorized access to, or improper use of, systems by third parties or employees. A hacker who circumvents security measures could misappropriate proprietaryinformation or cause interruptions or malfunctions in operations. Computer attacks or disruptions may jeopardize the security of information stored in andtransmitted through computer systems and mobile devices of our customers. Actual or perceived concerns that our systems may be vulnerable to such attacks ordisruptions may deter customers from using our services. As a result, we may be required to expend significant resources to protect against the threat of thesesecurity breaches or to alleviate problems caused by these breaches, which could adversely affect our results of operations.If we do not continually enhance our solutions and service offerings, we may have difficulty in retaining existing customers and attracting new customers.We believe that our future success will depend, to a significant extent, upon our ability to enhance our existing applications and platform, and to introducenew features to meet the preferences and requirements of our customers in a rapidly developing and evolving market. Unexpected technical, operational, distributionor other problems could delay or prevent the introduction of one or more of these products or services, or any products or services that we may plan to introduce inthe future. Our present or future products may not satisfy the evolving preferences and tastes of our customers, and these solutions and services may not achieveanticipated market acceptance or generate incremental revenue. If we are unable to anticipate or respond adequately to the need for service or productenhancements due to resource, technological or other constraints, our business, financial condition and results of operations could be materially and adverselyaffected.5If we are unable to develop competitive new products and service offerings our future results of operations could be adversely affected.Our future revenue stream depends to a large degree on our ability to utilize our technology in a way that will allow us to offer new types of mobileapplications and services to a broader customer base. We will be required to make investments in research and development in order to continually develop newsoftware applications and related service offerings, enhance our existing platform, mobile applications and related service offerings and achieve market acceptanceof our mobile applications and service offerings. We may incur problems in the future in innovating and introducing new mobile applications and service offerings.Our developmentstage mobile applications may not be successfully completed or, if developed, may not achieve significant customer acceptance. If we are unableto successfully define, develop and introduce competitive new mobile applications, and enhance existing mobile applications, our future results of operations wouldbe adversely affected. The timely availability of new applications and their acceptance by customers are important to our future success. A delay in the developmentof new applications could have a significant impact on its results of operations.Changes in technology could adversely affect our business by increasing our costs, reducing our profit margins and causing a decline in our competitiveness.China’s wireless telecom industry, in which we operate, is characterized by rapidly changing technology, evolving industry standards, frequentintroductions of new services and solutions and enhancements as well as changing customer demands. New solutions and new technologies often render existingsolutions and services obsolete, excessively costly or otherwise unmarketable. As a result, our success depends on our ability to adapt to the latest technologicalprogress, such as the 5G standard and technologies, and to develop or acquire and integrate new technologies into our platform, mobile applications and relatedservices. Advances in technology also require us to commit substantial resources to developing or acquiring and then deploying new technologies for use in ouroperations. We must continuously train personnel in new technologies and in how to integrate existing hardware and software systems with these newtechnologies. We may not be able to adapt quickly to new technologies or commit sufficient resources to compete successfully against existing or new competitorsin bringing to market solutions and services that incorporate these new technologies. We may incur problems in the future in innovating and introducing new mobileapplications and service offerings. Our development of new mobile applications and platform enhancements may not be successfully completed or, if developed,may not achieve significant customer acceptance. If we fail to adapt to changes in technologies and compete successfully against established or new competitors,our business, financial condition and results of operations could be adversely affected.Problems with the quality or performance of our hardware, software or other systems may cause delays in the introduction of new solutions or result in the lossof customers and revenues, which could have a material and adverse effect on our business, financial condition and results of operations.Our hardware and software systems are complex and may contain defects, errors or bugs when first introduced to the market or to a particular customer, oras new versions are released. Because we cannot test for all possible scenarios, our systems may contain errors that are not discovered until after they have beeninstalled or implemented, and we may not be able to timely correct these problems. These defects, errors or bugs could interrupt or delay the completion of projectsor sales to our customers. In addition, our reputation may be damaged and we may fail to acquire new projects from existing customers or new customers. Errors mayoccur when we provide systems integration and maintenance services. Even in cases where we have agreements with our customers that contain provisionsdesigned to limit our exposure to potential claims and liabilities arising from customer problems, these provisions may not effectively protect us against such claimsin all cases and in all jurisdictions. In addition, as a result of business and other considerations, we may undertake to compensate our customers for damages arisingfrom the use of our solutions, even if our liability is limited by these provisions. Moreover, claims and liabilities arising from customer problems could also result inadverse publicity and materially and adversely affect our business, results of operations and financial condition. We currently do not carry any product or serviceliability insurance and any imposition of liability on us may materially and adversely affect our business and increase our costs, resulting in reduced revenues andprofitability.Our products may contain undetected software defects, which could negatively affect our revenues.Our software products are complex and may contain undetected defects. Although we test our products, it is possible that errors may be found or occur inour new or existing products after we have commenced commercial shipment of those products. Defects, whether actual or perceived, could result in adversepublicity, loss of revenues, product returns, a delay in market acceptance of our products, loss of competitive position or claims against us by customers. Any suchproblems could be costly to remedy and could cause interruptions, delays, or cessation of our product sales, which could cause us to lose existing or prospectivecustomers and could negatively affect our results of operations.6We may be subject to infringement, misappropriation and indemnity claims in the future, which may cause us to incur significant expenses, pay substantialdamages and be prevented from providing our services or technologies.Our success depends, in part, on our ability to carry out our business without infringing the intellectual property rights of third parties. Patent andcopyright law covering softwarerelated technologies is evolving rapidly and is subject to a great deal of uncertainty. Our selfdeveloped or licensed technologies,processes or methods may be covered by thirdparty patents or copyrights, either now existing or to be issued in the future. Any potential litigation may cause us toincur significant expenses. Thirdparty claims, if successfully asserted against us may cause us to pay substantial damages, seek licenses from third parties, payongoing royalties, redesign our services or technologies, or prevent us from providing services or technologies subject to these claims. Even if we were to prevail,any litigation would likely be costly and timeconsuming and divert the attention of our management and key personnel from our business operations.Our failure to protect our intellectual property rights may undermine our competitive position, and subject us to costly litigation to protect our intellectualproperty rights.Any misappropriation of our technology or the development of competitive technology could seriously harm our business. We regard a substantial portionof our hardware and software systems as proprietary and rely on statutory copyright, trademark, patent, trade secret laws, customer license agreements, employeeand thirdparty nondisclosure agreements and other methods to protect our proprietary rights. Nevertheless, these resources afford only limited protection and theactions we take to protect our intellectual property rights may not be adequate. In particular, third parties may infringe or misappropriate our proprietarytechnologies or other intellectual property rights, which could have a material adverse effect on our business, financial condition and results of operations. Inaddition, intellectual property rights and confidentiality protection in China may not be as effective as in the United States, and policing unauthorized use ofproprietary technology can be difficult and expensive. Further, litigation may be necessary to enforce our intellectual property rights, protect our trade secrets ordetermine the validity and scope of the proprietary rights of others. The outcome of any such litigation may not be in our favor. Any such litigation may be costlyand may divert management attention, as well as our other resources, away from our business. An adverse determination in any such litigation will impair ourintellectual property rights and may harm our business, prospects and reputation. In addition, we have no insurance coverage against litigation costs and wouldhave to bear all litigation costs in excess of the amount recoverable from other parties. The occurrence of any of the foregoing could have a material adverse effecton our business, financial condition and results of operations. Our solutions incorporate a portion of, and work in conjunction with, thirdparty hardware and software solutions. If these thirdparty hardware or softwaresolutions are not available to us at reasonable costs, or at all, our results of operations could be adversely impacted.Although our hardware and software systems and mobile applications primarily rely on our own core technologies, some elements of our systemsincorporate a small portion of thirdparty hardware and software solutions. If any third party were to discontinue making their intellectual property available to us orour customers on a timely basis, or increase materially the cost of their licensing such intellectual property, or if our systems or applications failed to properlyfunction or interoperate with replacement intellectual property, we may need to incur costs in finding replacement thirdparty solutions and/or redesigning oursystems or applications to replace or function with or on replacement thirdparty proprietary technology. Replacement technology may not be available on termsacceptable to us or at all, and we may be unable to develop alternative solutions or redesign our systems or applications on a timely basis or at a reasonable cost. Ifany of these were to occur, our results of operations could be adversely impacted.7Our ability to sell our products is highly dependent on the quality of our service and support offerings, and our failure to offer high quality service could have amaterial adverse effect on our ability to market and sell our products.Our customers depend upon our customer service and support staff to resolve issues relating to our products. Highquality support services are critical forthe successful marketing and sale of our products. If we fail to provide highquality support on an ongoing basis, our customers may react negatively and we maybe materially and adversely affected in our ability to sell additional products to these customers. This could also damage our reputation and prospects with potentialcustomers. Our failure to maintain highquality support services could have a material and adverse effect on our business, results of operations and financialcondition.Weaknesses in our internal controls over financial reporting or disclosure controls and procedures may have a material adverse effect on our business, theprice of our ordinary shares, operating results and financial condition.We are required to establish and maintain appropriate internal controls over financial reporting and disclosure controls and procedures. Pursuant to Section404 of the SarbanesOxley Act of 2002 and the related rules adopted by the Securities and Exchange Commission, every public company is required to include amanagement report on its internal controls over financial reporting in its transition report, which contains management’s assessment of the effectiveness of thecompany’s internal controls over financial reporting. This requirement first applied to our annual report on Form 20F for the fiscal year ended on September 30,2011. In connection with our assessments of our disclosure controls and procedures and internal controls over financial reporting, management concluded that as ofSeptember 30, 2018, our disclosure controls and procedures and our internal controls over financial reporting were not effective due to lack of U.S. generallyaccepted accounting principles (“U.S. GAAP”) expertise in our current accounting team. Please refer to the discussion under Item 15, “Controls and Procedures” forfurther discussion of our material weakness as of December 31, 2017. Should we be unable to remediate the material weakness promptly and effectively, suchweakness could harm our operating results, result in a material misstatement of our financial statements, cause us to fail to meet our financial reporting obligations orprevent us from providing reliable and accurate financial reports or avoiding or detecting fraud. This, in turn, could result in a loss of investor confidence in theaccuracy and completeness of our financial reports, which could have an adverse effect on the trading price of our ordinary shares. Any litigation or otherproceeding or adverse publicity relating to the material weaknesses could have a material adverse effect on our business and operating results. We have very limited insurance coverage which could expose us to significant costs and business disruption.We do not maintain any insurance coverage for our leased properties. Should any natural catastrophes such as earthquakes, floods, typhoons or any actsof terrorism occur in Beijing, China, where our head office is located and most of our employees are based, or elsewhere in China, we might suffer not onlysignificant property damages, but also loss of revenues due to interruptions in our business operations, which could have a material adverse effect on our business,operating results or financial condition.The insurance industry in China is still at an early stage of development. Insurance companies in China offer limited business insurance products, and donot, to our knowledge, offer business liability insurance. As a result, we do not have any business liability insurance coverage for our operations. Moreover, whilebusiness disruption insurance is available, we have determined that the risks of disruption and cost of the insurance are such that we do not require it at this time.Any business disruption, litigation or natural disaster might result in substantial costs and diversion of resources, particularly if it affects our technology platformswhich we depend on for delivery of our software and services, and could have a material adverse effect on our financial condition and results of operations.We may be liable to our customers for damages caused by unauthorized disclosure of sensitive and confidential information, whether through our employees orotherwise.We are typically required to manage, utilize and store sensitive or confidential customer data in connection with the products and services we provide.Under the terms of our customer contracts, we are required to keep such information strictly confidential. We seek to implement specific measures to protectsensitive and confidential customer data. We require our employees to enter into nondisclosure agreements to limit such employees’ access to, and distribution of,our customers’ sensitive and confidential information and our own trade secrets. We can give no assurance that the steps taken by us in this regard will be adequateto protect our customers’ confidential information. If our customers’ proprietary rights are misappropriated by our employees, in violation of any applicableconfidentiality agreements or otherwise, our customers may consider us liable for that act and seek damages and compensation from us. However, we currently donot have any insurance coverage for mismanagement or misappropriation of such information by our employees. Any litigation with respect to unauthorizeddisclosure of sensitive and confidential information might result in substantial costs and diversion of resources and management attention.8We may face intellectual property infringement claims that could be timeconsuming and costly to defend. If we fail to defend ourselves against such claims, wemay lose significant intellectual property rights and may be unable to continue providing our existing products and services.It is critical that we use and develop our technology and products without infringing upon the intellectual property rights of third parties, includingpatents, copyrights, trade secrets and trademarks. Intellectual property litigation is expensive and timeconsuming and could divert management’s attention from ourbusiness. A successful infringement claim against us, whether with or without merit, could, among others things, require us to pay substantial damages, developnoninfringing technology, or rebrand our name or enter into royalty or license agreements that may not be available on acceptable terms, if at all, and cease making,licensing or using products that have infringed a third party’s intellectual property rights. Protracted litigation could also result in existing or potential customersdeferring or limiting their purchase or use of our products until resolution of such litigation, or could require us to indemnify our customers against infringementclaims in certain instances. Also, we may be unaware of intellectual property registrations or applications relating to our services that may give rise to potentialinfringement claims against us. Parties making infringement claims may be able to obtain an injunction to prevent us from delivering our services or usingtechnology containing the allegedly infringing intellectual property. Any intellectual property litigation could have a material adverse effect on our business, resultsof operations or financial condition. Seasonality and fluctuations in our customers’ spending cycle and other factors can cause our revenues and operating results to vary significantly from quarterto quarter and from year to year.Our revenues and operating results will vary significantly from quarter to quarter and from year to year due to a number of factors, many of which areoutside of our control. Our new lines of business acquired upon the consummation of the asset exchange transaction discussed below see higher customer use andactivity during the Chinese New Year holiday than other times during the year when rail travel is high, which lead to higher revenue during this period as morecustomers would like to place more advertising. Due to these and other factors, our operating results may fluctuate significantly from quarter to quarter and fromyear to year. These fluctuations are likely to continue in the future, and operating results for any period may not be indicative of our future performance in any futureperiod.Our corporate actions are substantially controlled by our principal shareholders, who can cause us to take actions in ways you may not agree with.Mr. Xuesong Song, our chairman, chief executive officer and a member of our board of directors, beneficially owns 19.31% of our outstanding ordinaryshares and 1,000,000 preferred shares, and each preferred share has the right to 399 votes at a meeting of the members of the Company. Our officers and directors asa group beneficially own an aggregate of approximately 33.69% of our outstanding ordinary shares. These shareholders, acting individually or as a group, couldexert control and substantial influence over matters such as electing directors, amending our constitutional documents, and approving acquisitions, mergers or otherbusiness combination transactions. This concentration of ownership and voting power may also discourage, delay or prevent a change in control of our company,which could deprive our shareholders of an opportunity to receive a premium for their shares as part of a sale of our company and might reduce the price of ourshares. Alternatively, our controlling shareholders may cause a merger, consolidation or change of control transaction even if it is opposed by our othershareholders, including those who purchase shares in this offering.9We depend on a small number of customers to derive a significant portion of our revenues. If we were to become dependent again upon a few customers, suchdependency could negatively impact our business, operating results and financial condition.We derived a material portion of our revenues from a small number of customers. In the years ended December 31, 2017 and 2016, our five largestcustomers accounted for 99.8% and 78.5% of our total sales, respectively, and our largest customer Guangdong Zhanshi Media Advertising Co., Ltd. accounted forapproximately 80.8% of our total sales during for the fiscal year ended December 31, 2017. As our customer base may change from yeartoyear, during such yearsthat the customer base is highly concentrated, the fluctuation of our sales to any of such major customers could have a material adverse effect on our business,operating results and financial condition. Moreover, our high customer base concentration may also adversely affect our ability to negotiate contract prices withthese customers, which may in turn materially and adversely affect our results of operations.Our historical outstanding accounts receivable have been relatively high. Inability to collect our accounts receivable on a timely basis, if at all, couldmaterially and adversely affect our financial condition, liquidity and results of operations.Historically, our outstanding accounts receivable have been relatively high. As of December 31, 2017 and 2016, our outstanding accounts receivable beforeimpairment were $10.4 million and $2.10 million, respectively. Although we conduct credit evaluations of our customers, we generally do not require collateral orother security from our customers. In addition, we have had a relatively high customer concentration. The outstanding accounts receivable balance for our largestcustomer was 45.3% and 38.5% of our total accounts receivable balance as of December 31, 2017 and 2016, respectively. As a result, an extended delay or default inpayment relating to a significant account would likely have a material and adverse effect on the aging schedule and turnover days of our accounts receivable. Ourinability to collect our accounts receivable on a timely basis, if at all, could materially and adversely affect our financial condition, liquidity and results of operations.Risks Related to Doing Business in ChinaAdverse changes in political and economic policies of the PRC government could have a material adverse effect on the overall economic growth of China,which could reduce the demand for our services and materially and adversely affect our competitive position.Substantially all of our business operations are conducted in China. Accordingly, our business, results of operations, financial condition and prospects aresubject to a significant degree to economic, political and legal developments in China. Although the Chinese economy is no longer a planned economy, the PRCgovernment continues to exercise significant control over China’s economic growth through direct allocation of resources, monetary and tax policies, and a host ofother government policies such as those that encourage or restrict investment in certain industries by foreign investors, control the exchange between RMB andforeign currencies, and regulate the growth of the general or specific market. These government involvements have been instrumental in China’s significant growthin the past 30 years. The reorganization of the telecommunications industry encouraged by the PRC government has directly affected our industry and our growthprospect. In response to the recent global and Chinese economic downturn, the PRC government has adopted policy measures aimed at stimulating the economicgrowth in China. If the PRC government’s current or future policies fail to help the Chinese economy achieve further growth or if any aspect of the PRCgovernment’s policies limits the growth of the telecommunications industry in China or our industry or otherwise negatively affects our business, our growth rate orstrategy, our results of operations could be adversely affected as a result. Our business benefits from certain government tax incentives. Expiration, reduction or discontinuation of, or changes to, these incentives will increase our taxburden and reduce our net income.Under the PRC Enterprise Income Tax Law passed in 2007 and the implementing rules, both of which became effective on January 1, 2008, or the New EITLaw, a unified enterprise income tax rate of 25% and unified tax deduction standard is applied equally to both domesticinvested enterprises and foreigninvestedenterprises, or FIEs. Enterprises established prior to March 16, 2007 eligible for preferential tax treatment in accordance with the then tax laws and administrativeregulations shall gradually become subject to the New EIT Law rate over a fiveyear transition period starting from the date of effectiveness of the New EIT Law.However, certain qualifying hightechnology enterprises may still benefit from a preferential tax rate of 15% if they own their core intellectual properties and they areenterprises in certain Statesupported hightech industries to be later specified by the government. As a result, if our PRC subsidiaries qualify as “hightechnologyenterprises,” they will continue to benefit from the preferential tax rate of 15%, subject to transitional rules implemented from January 1, 2008. Our subsidiary, BeijingZhong Chuan Shi Xun Technology Limited, is qualified as a “hightechnology enterprise” until the end of the November 2018, and therefore it had benefited fromthe preferential tax rate of 15%, subject to transitional rules implemented on January 1, 2008. Although we intend to apply for a renewal of this qualification, if BeijingZhong Chuan Shi Xun ceases to qualify as a “hightechnology enterprise”, or the tax authorities change their position on our preferential tax treatments in thefuture, our future tax liabilities may materially increase, which could materially and adversely affect our financial condition and results of operations.10If we were deemed a “resident enterprise” by PRC tax authorities, we could be subject to tax on our global income at the rate of 25% under the New EIT Lawand our nonPRC shareholders could be subject to certain PRC taxes.Under the New EIT Law and the implementing rules, both of which became effective January 1, 2008, an enterprise established outside of the PRC with “defacto management bodies” within the PRC may be considered a PRC “resident enterprise” and will be subject to the enterprise income tax at the rate of 25% on itsglobal income as well as PRC enterprise income tax reporting obligations. The implementing rules of the New EIT Law define “de facto management” as “substantialand overall management and control over the production and operations, personnel, accounting, and properties” of the enterprise. However, as of the date of thistransition report, no final interpretations on the implementation of the “resident enterprise” designation are available. Moreover, any such designation, when madeby PRC tax authorities, will be determined based on the facts and circumstances of individual cases. Therefore, if we were to be considered a “resident enterprise”by the PRC tax authorities, our global income would be taxable under the New EIT Law at the rate of 25% and, to the extent we were to generate a substantial amountof income outside of PRC in the future, we would be subject to additional taxes. In addition, the dividends we pay to our nonPRC enterprise shareholders and gainsderived by such shareholders or ADS or ordinary share holders from the transfer of our shares or ADSs may also be subject to PRC withholding tax at the rate up to10%, if such income were regarded as Chinasourced income.Our holding company structure may limit the payment of dividends.We have no direct business operations, other than our ownership of our subsidiaries. While we have no current intention of paying dividends, should wedecide in the future to do so, as a holding company, our ability to pay dividends and meet other obligations depends upon the receipt of dividends or otherpayments from our operating subsidiaries and other holdings and investments. Current PRC regulations permit our PRC subsidiaries to pay dividends to us only outof their accumulated profits, if any, determined in accordance with Chinese accounting standards and regulations. In addition, each of our subsidiaries in China isrequired to set aside at least 10% of its aftertax profits each year, if any, to fund a statutory reserve until such reserve reaches 50% of its registered capital. Thesereserves are not distributable as cash dividends. Furthermore, if our subsidiaries in China incur debt on their own behalf in the future, the instruments governing thedebt may restrict their ability to pay dividends or make other payments to us. As a result, there may be limitations on the ability of our PRC subsidiaries to paydividends or make other investments or acquisitions that could be beneficial to our business or otherwise fund and conduct our business.In addition, under the New EIT Law and the implementing rules that became effective on January 1, 2008, dividends generated from the business of our PRCsubsidiaries after January 1, 2008 and payable to us may be subject to a withholding tax rate of 10% if the PRC tax authorities subsequently determine that we are anonresident enterprise, unless there is a tax treaty with China that provides for a different withholding arrangement.Uncertainties with respect to the PRC legal system could adversely affect us.We conduct all of our business through our subsidiaries in China. Our operations in China are governed by PRC laws and regulations. Our PRCsubsidiaries are generally subject to laws and regulations applicable to foreign investments in China and, in particular, laws and regulations applicable to whollyforeignowned enterprises. The PRC legal system is based on statutes. Prior court decisions may be cited for reference but have limited precedential value.11Since 1979, PRC legislation and regulations have significantly enhanced the protections afforded to various forms of foreign investments in China.However, China has not developed a fully integrated legal system and recently enacted laws and regulations may not sufficiently cover all aspects of economicactivities in China. In particular, because these laws and regulations are relatively new, and because of the limited volume of published decisions and theirnonbinding nature, the interpretation and enforcement of these laws and regulations involve uncertainties. In addition, the PRC legal system is based in part ongovernment policies and internal rules (some of which are not published on a timely basis or at all) that may have a retroactive effect. As a result, we may not beaware of our violation of these policies and rules until some time after the violation. In addition, any litigation in China may be protracted and result in substantialcosts and diversion of resources and management attention.PRC regulation of loans and direct investment by offshore holding companies to PRC entities may delay or prevent us from using the proceeds of our May2010 public offering to make loans or additional capital contributions to our PRC operating subsidiaries, which could materially and adversely affect ourliquidity and our ability to fund and expand our business.In utilizing the proceeds of our May 2010 public offering as an offshore holding company of our PRC operating subsidiaries, we may make loans to our PRCsubsidiaries, or we may make additional capital contributions to our PRC subsidiaries. Any loans to our PRC subsidiaries are subject to PRC regulations. Forexample, loans by us to our subsidiaries in China, which are FIEs, to finance their activities cannot exceed statutory limits and must be registered with the StateAdministration of Foreign Exchange, or SAFE. On August 29, 2008, SAFE promulgated Circular 142, a notice regulating the conversion by a foreigninvestedcompany of foreign currency into RMB by restricting how the converted RMB may be used. The notice requires that RMB converted from the foreign currencydenominated capital of a foreigninvested company may only be used for purposes within the business scope approved by the applicable governmental authorityand may not be used for equity investments within the PRC unless specifically provided for otherwise. The foreign currencydenominated capital shall be verified byan accounting firm before converting into RMB. In addition, SAFE strengthened its oversight over the flow and use of RMB funds converted from the foreigncurrencydenominated capital of a foreigninvested company. To convert such capital into RMB, the foreigninvested company must report the use of such RMB tothe bank, and the RMB must be used to the reported purposes. According to Circular 142, change of the use of such RMB without approval is prohibited. Inaddition, such RMB may not be used to repay RMB loans if the proceeds of such loans have not yet been used. Violations of Circular 142 may result in severepenalties, including substantial fines as set forth in the Foreign Exchange Administration Rules.We may also decide to finance our subsidiaries by means of capital contributions. These capital contributions may need approval from the PRC Ministry ofCommerce, or MOFCOM, or its local counterpart. We may not be able to obtain these government approvals on a timely basis, if at all, with respect to future capitalcontributions by us to our PRC subsidiaries. If we fail to receive such approvals in such cases when approval is required, our ability to use the proceeds of our May2010 public offering and to capitalize our PRC operations may be negatively affected, which could adversely affect our liquidity and our ability to fund and expandour business.Governmental control of currency conversion may affect the value of your investment.The PRC government imposes controls on the convertibility of the RMB into foreign currencies and, in certain cases, the remittance of currency out ofChina. We receive substantially all of our revenues in RMB. Under our current corporate structure, our income is primarily derived from dividend payments from ourPRC subsidiaries. Shortages in the availability of foreign currency may restrict the ability of our PRC subsidiaries to remit sufficient foreign currency to paydividends or other payments to us, or otherwise satisfy their foreign currency denominated obligations. Under existing PRC foreign exchange regulations, paymentsof current account items, including profit distributions, interest payments and expenditures from traderelated transactions, can be made in foreign currencieswithout prior approval from SAFE by complying with certain procedural requirements. However, approval from appropriate government authorities is required whereRMB is to be converted into foreign currency and remitted out of China to pay capital expenses such as the repayment of loans denominated in foreign currencies.The PRC government may also at its discretion restrict access in the future to foreign currencies for current account transactions. If the foreign exchange controlsystem prevents us from obtaining sufficient foreign currency to satisfy our currency demands, we may not be able to pay dividends in foreign currencies to ourshareholders, including holders of our ADSs or ordinary shares.12Fluctuation in the value of the RMB may have a material adverse effect on the value of your investment.The value of the RMB against the U.S. dollar and other currencies may fluctuate and is affected by, among other things, changes in political and economicconditions. On July 21, 2005, the PRC government changed its decadeold policy of pegging the value of the RMB to the U.S. dollar. Under the new policy, the RMBis permitted to fluctuate within a narrow and managed band against a basket of certain foreign currencies. This change in policy has resulted in an approximate26.8% appreciation of the RMB against the U.S. dollar between July 21, 2005 and September 30, 2015. Provisions on Administration of Foreign Exchange, asamended in August 2008, further changed China’s exchange regime to a managed floating exchange rate regime based on market supply and demand. Since reachinga high against the U.S. dollar in July 2008, however, the RMB has traded within a narrow band against the U.S. dollar, remaining within 1% of its July 2008 high butnever exceeding it. As a consequence, the RMB has fluctuated sharply since July 2008 against other freelytraded currencies, in tandem with the U.S. dollar. InAugust 2015, the PRC Government devalued its currency by approximately 3%, representing the largest yuan depreciation for 20 years. Concerns remain thatChina’s slowing economy, and in particular its exports, will need a stimulus that can only come from further cuts in the exchange rate.It is difficult to predict how long the current situation may continue and when and how it may change again as the People’s Bank of China may regularlyintervene in the foreign exchange market to achieve economic policy goals. Substantially all of our revenues and costs are denominated in the RMB, and asignificant portion of our financial assets are also denominated in RMB. We principally rely on dividends and other distributions paid to us by our subsidiaries inChina. Any significant revaluation of the RMB may materially and adversely affect our cash flows, revenues, earnings and financial position, and the value of, andany dividends payable on, our ADSs or ordinary shares in U.S. dollars. Any fluctuations of the exchange rate between the RMB and the U.S. dollar could also resultin foreign currency translation losses for financial reporting purposes.PRC laws and regulations governing our businesses. If we are found to be in violation of such PRC laws and regulations, we could be subject to sanctions. Inaddition, changes in such PRC laws and regulations may materially and adversely affect our business.There are substantial uncertainties regarding the interpretation and application of PRC laws and regulations, including, but not limited to, the laws andregulations governing our business. These laws and regulations are relatively new and may be subject to change, and their official interpretation and enforcementmay involve substantial uncertainty. The effectiveness of newly enacted laws, regulations or amendments may be delayed, resulting in detrimental reliance byforeign investors. New laws and regulations that affect existing and proposed future businesses may also be applied retroactively.The PRC government has broad discretion in dealing with violations of laws and regulations, including levying fines, revoking business and other licensesand requiring actions necessary for compliance. In particular, licenses and permits issued or granted to us by relevant governmental bodies may be revoked at a latertime by higher regulatory bodies. We cannot predict the effect of the interpretation of existing or new PRC laws or regulations on our businesses. We cannot assureyou that our current ownership and operating structure would not be found in violation of any current or future PRC laws or regulations. As a result, we may besubject to sanctions, including fines, and could be required to restructure our operations or cease to provide certain services. In addition, any litigation in China maybe protracted and result in substantial costs and diversion of resources and management attention. Any of these or similar actions could significantly disrupt ourbusiness operations or restrict us from conducting a substantial portion of our business operations, which could materially and adversely affect our business,financial condition and results of operations.13If we were required to obtain the prior approval of the China Securities Regulatory Commission, or CSRC, of the listing and trading of our ADSs on theNASDAQ Capital Market, we may face regulatory actions or other sanctions from the CSRC or other PRC regulatory agencies.On August 8, 2006, six PRC regulatory agencies, including the Ministry of Commerce, the State Assets Supervision and Administration Commission, theState Administration for Taxation, the State Administration for Industry and Commerce, the CSRC and the SAFE, jointly issued the Regulations on Mergers andAcquisitions of Domestic Enterprises by Foreign Investors, which became effective on September 8, 2006 (the “New M&A Rules”). This regulation, among otherthings, includes provisions that purport to require that an offshore special purpose vehicle formed for the purposes of overseas listing of equity interests in PRCcompanies and controlled directly or indirectly by PRC companies or individuals obtain the approval of the CSRC prior to the listing and trading of such specialpurpose vehicle’s securities on an overseas stock exchange. On September 21, 2006, the CSRC published on its official website procedures regarding its approval ofoverseas listings by special purpose vehicles. The CSRC approval procedures require the filing of a number of documents with the CSRC and it would take severalmonths to complete the approval process, if practicable at all. The application of this new PRC regulation remains unclear with no consensus currently existingamong leading PRC law firms regarding the scope of the applicability of the CSRC approval requirement. Prior to our May 2010 initial public offering, our PRC counsel has advised us that, based on its understanding of the current PRC laws and regulations aswell as the procedures announced on September 21, 2006: (i) Softech was directly incorporated by Topsky as a foreign investment enterprise under PRC law;therefore, there was no acquisition of the equity of a “PRC domestic company” as defined under the New M&A Rules; and (ii) the contractual arrangementsbetween Kingtone Information and Softech were not clearly defined and considered as the transaction which shall be applied to the New M&A Rules. Therefore, wedid not seek prior CSRC approval for our initial public offering.However, if the CSRC required that we obtain its approval prior to the completion of our initial public offering and the listing of our ADSs on the NASDAQCapital Market, we may face regulatory actions or other sanctions from the CSRC or other PRC regulatory agencies. These regulatory agencies may impose fines andpenalties on our operations in the PRC, limit our operating privileges in the PRC, delay or restrict the repatriation of the proceeds from our initial public offering intothe PRC, or take other actions that could have a material adverse effect on our business, financial condition, results of operations, reputation and prospects, as wellas the trading price of our shares.Also, if the CSRC requires that we obtain its approval, we may be unable to obtain a waiver of the CSRC approval requirements if and when procedures areestablished to obtain such a waiver. Any uncertainties and/or negative publicity regarding this CSRC approval requirement could have a material adverse effect onthe trading price of our shares.PRC regulations relating to the establishment of offshore special purpose companies by PRC residents may subject our PRC resident shareholders to penaltiesand limit our ability to inject capital into our PRC subsidiaries, limit our PRC subsidiaries’ ability to distribute profits to us, or otherwise adversely affect us.On October 21, 2005, the SAFE issued the Notice on Issues Relating to the Administration of Foreign Exchange in Fundraising and Reverse InvestmentActivities of Domestic Residents Conducted via Offshore Special Purpose Companies, or Notice 75, which became effective as of November 1, 2005. According toNotice 75, prior registration with the local SAFE branch is required for PRC residents to establish or to control an offshore company for the purposes of financingsuch offshore company with assets or equity interests in an onshore enterprise located in the PRC, or an offshore special purpose company. An amendment toregistration or filing with the local SAFE branch by such PRC resident is also required for the injection of equity interests or assets of an onshore enterprise in theoffshore special purpose company or overseas funds raised by such offshore company, or any other material change involving a change in the capital of theoffshore special purpose company. Moreover, Notice 75 applies retroactively. As a result, PRC residents who have established or acquired control of offshorespecial purpose companies that have made onshore investments in the PRC in the past are required to have completed the relevant registration procedures with thelocal SAFE branch by March 31, 2006. To further clarify the implementation of Notice 75, the SAFE issued Circular 106 on May 29, 2007. Under Circular 106, PRCsubsidiaries of an offshore special purpose company are required to coordinate and supervise the filing of SAFE registrations by the offshore holding company’sshareholders or beneficial owners who are PRC residents in a timely manner.14Some of our current shareholders and/or beneficial owners may fall within the ambit of the SAFE notice and be required to register with the local SAFEbranch as required under the SAFE notice. If so required, and if such shareholders and/or beneficial owners fail to timely register their SAFE registrations pursuantto the SAFE notice, or if future shareholders and/or beneficial owners of our company who are PRC residents fail to comply with the registration procedures setforth in the SAFE notice, this may subject such shareholders, beneficial owners and/or our PRC subsidiaries to fines and legal sanctions and may also limit ourability to contribute additional capital into our PRC subsidiaries, limit our PRC subsidiaries’ ability to distribute dividends to our company, or otherwise adverselyaffect our business.Risks Associated with our ADSs and Ordinary SharesOur securities are not currently traded on any United States public markets and you may not be able to resell your securities for some time.There is currently no public market for our ordinary shares or American Depository Shares (“ADSs”) in the United States or in any other jurisdiction. OurADSs were voluntarily delisted from the NASDAQ Capital Market on September 19, 2018. We have applied to NASDAQ for the listing of our ordinary shares on theNASDAQ Capital Market and received an approval for listing of Ordinary Shares on August 6, 2018, and as of the date of this transition report, that application andapproval are currently under review. We cannot assume that our ordinary shares will be accepted for listing on the NASDAQ Capital Market, or if listed, that wewould continue to meet the applicable minimum listing requriements. You may not be able to sell your ordinary shares quickly or at all if we are unable to gain listingon a public market in the United States.The market price of our ADSs has historically been highly volatile, and you may not be able to resell our ordinary shares at or above your initial purchaseprice.There may be a limited public market for our ordinary shares and, as discussed above, our ADSs are no longer listed on any public market in the UnitedStates or any other jurisdiction. We cannot assure you that there will be an active trading market for our ordinary shares in the future. If our ordinary shares areaccepted for listing on a public market, you may not be able to sell your ordinary shares quickly or at the market price if trading in our ordinary shares is not active. The trading price of our ADSs and ordinary shares may be volatile. The price of our ADSs and ordinary shares could be subject to wide fluctuations inresponse to a variety of factors, including the following:1.Introduction of new products, services or technologies offered by us or our competitors;2.Failure to meet or exceed revenue and financial projections we provide to the public;3.Actual or anticipated variations in quarterly operating results;4.Failure to meet or exceed the estimates and projections of the investment community;5.General market conditions and overall fluctuations in United States equity markets;6.Announcements of significant acquisitions, strategic partnerships, joint ventures or capital commitments by us or our competitors;7.Disputes or other developments relating to proprietary rights, including patents, litigation matters and our ability to obtain patent protection for ourtechnologies;8.Additions or departures of key management personnel;9.Issuances of debt or equity securities;10.Significant lawsuits, including patent or shareholder litigation;11.Changes in the market valuations of similar companies;12.Sales of additional ordinary shares or other securities by us or our shareholders in the future;13.Trading volume of our ordinary shares;14.Fluctuations in the exchange rate between the U.S. dollar and Renminbi;15.Negative market perception and media coverage of our company or other companies in the same or similar industry with us; and16.Other events or factors, many of which are beyond our control.15In addition, the stock market in general, and the NASDAQ Capital Market and software products and services companies in particular, have experiencedextreme price and volume fluctuations that have often been unrelated or disproportionate to the operating performance of these companies. Broad market andindustry factors may negatively affect the market price of our ordinary shares, regardless of our actual operating performance. Our ADSs and ordinary shares may be subject to the SEC’s penny stock rules which may make it difficult for brokerdealers to complete customer transactionsand trading activity in our securities.Our ADSs and ordinary shares may be deemed to be “penny stock” as that term is defined under the Securities Exchange Act of 1934, as amended. Pennystocks generally are equity securities with a price of less than $5.00 (other than securities registered on certain national securities exchanges or quoted on theNASDAQ system, provided that current price and volume information with respect to transactions in such securities is provided by the exchange or system). Pennystock rules impose additional sales practice requirements on brokerdealers who sell to persons other than established customers and “accredited investors.” Theterm “accredited investor” refers generally to institutions with assets in excess of $5,000,000 or individuals with a net worth in excess of $1,000,000 or annual incomeexceeding $200,000 or $300,000 jointly with their spouse in each of the prior two years.The penny stock rules require a brokerdealer, prior to a transaction in a penny stock not otherwise exempt from the rules, to deliver a standardized riskdisclosure document in a form prepared by the SEC, which provides information about penny stocks and the nature and level of risks in the penny stockmarket. Moreover, brokerdealers are required to determine whether an investment in a penny stock is a suitable investment for a prospective investor. A brokerdealer must receive a written agreement to the transaction from the investor setting forth the identity and quantity of the penny stock to be purchased. Theserequirements may make it more difficult for brokerdealers to effectuate customer transactions and trading activity in our securities. As a result, the market price ofour ADSs and ordinary shares may be depressed, and you may find it more difficult to sell our ADSs or ordinary shares.Sales of a substantial number of ordinary shares or ADSs in the public market by our existing shareholders could cause the price of our ADSs to fall.Sales of a substantial number of our ordinary shares or ADSs in the public market or the perception that these sales might occur, could depress the marketprice of our ADSs and could impair our ability to raise capital through the sale of additional equity securities. We are unable to predict the effect that sales may haveon the prevailing market price of our ADSs.All of our existing shareholders prior to our May 2010 offering were subject to lockup agreements with the underwriters of the offering that restricted theshareholders’ ability to transfer ordinary shares or ADSs until expiration of the lockup period in November 2010. The lockup agreements limited the number ofordinary shares or ADSs that may be sold immediately following the public offering. Subject to certain limitations, approximately 1,000,000 of our total outstandingshares are now eligible for sale. Sales of ordinary shares by these shareholders could have a material adverse effect on the trading price of our ADSs.Future sales and issuances of our ordinary shares, or rights to purchase our ordinary shares, including pursuant to our 2010 Omnibus Incentive Plan, couldresult in additional dilution of the percentage ownership of our shareholders and could cause the price of our ordinary shares to fall.We expect that significant additional capital will be needed in the future to continue our planned operations. To the extent we raise additional capital byissuing equity securities, our shareholders may experience substantial dilution. We may sell ordinary shares, convertible securities or other equity securities in oneor more transactions at prices and in a manner we determine from time to time. If we sell ordinary shares, convertible securities or other equity securities in more thanone transaction, investors may be materially diluted by subsequent sales. Such sales may also result in material dilution to our existing shareholders, and newinvestors could gain rights superior to our existing shareholders.16We do not intend to pay dividends on our ordinary shares, so any returns will be limited to the value of our ADSs and ordinary shares.We have never declared or paid any cash dividend on our ordinary shares. We currently anticipate that we will retain future earnings for the development,operation and expansion of our business and do not anticipate declaring or paying any cash dividends for the foreseeable future. Any return shareholders willtherefore be limited to the value of their ADSs or ordinary shares.As the rights of shareholders under British Virgin Islands law differ from those under U.S. law, you may have fewer protections as a shareholder.Our corporate affairs will be governed by our memorandum of association and articles of association, the BVI Business Companies Act, 2004, or the BVIAct, of the British Virgin Islands and the common law of the British Virgin Islands. The rights of shareholders to take legal action against our directors, actions byminority shareholders and the fiduciary responsibilities of our directors under British Virgin Islands law are to a large extent governed by the BVI Act and thecommon law of the British Virgin Islands. The common law of the British Virgin Islands is derived in part from comparatively limited judicial precedent in the BritishVirgin Islands as well as from English common law, which has persuasive, but not binding, authority on a court in the British Virgin Islands. The rights of ourshareholders and the fiduciary responsibilities of our directors under British Virgin Islands law are not as clearly established as they would be under statutes orjudicial precedents in some jurisdictions in the United States. In particular, the British Virgin Islands has a less developed body of securities laws as compared to theUnited States, and some states (such as Delaware) have more fully developed and judicially interpreted bodies of corporate law.As a result of all of the above, holders of our ADSs and ordinary shares may have more difficulty in protecting their interests through actions against ourmanagement, directors or major shareholders than they would as shareholders of a U.S. company.British Virgin Islands companies may not be able to initiate shareholder derivative actions, thereby depriving shareholders of the ability to protect theirinterests.British Virgin Islands companies may not have standing to initiate a shareholder derivative action in a federal court of the United States. The circumstancesin which any such action may be brought, and the procedures and defenses that may be available in respect to any such action, may result in the rights ofshareholders of a British Virgin Islands company being more limited than those of shareholders of a company organized in the United States. Accordingly,shareholders may have fewer alternatives available to them if they believe that corporate wrongdoing has occurred. The British Virgin Islands courts are alsounlikely to recognize or enforce against us judgments of courts in the United States based on certain liability provisions of U.S. securities law; and to imposeliabilities against us, in original actions brought in the British Virgin Islands, based on certain liability provisions of U.S. securities laws that are penal in nature.There is no statutory recognition in the British Virgin Islands of judgments obtained in the United States, although the courts of the British Virgin Islands willgenerally recognize and enforce the nonpenal judgment of a foreign court of competent jurisdiction without retrial on the merits.The laws of the British Virgin Islands provide little protection for minority shareholders, so minority shareholders will have little or no recourse if theshareholders are dissatisfied with the conduct of our affairs.Under the law of the British Virgin Islands, there is little statutory law for the protection of minority shareholders other than the provisions of the BVI Actdealing with shareholder remedies. The principal protection under statutory law is that shareholders may bring an action to enforce the constituent documents ofthe corporation, our memorandum of association and articles of association. Shareholders are entitled to have the affairs of the company conducted in accordancewith the general law and the memorandum of association and articles of association.17There are common law rights for the protection of shareholders that may be invoked, largely dependent on English company law, since the common law ofthe British Virgin Islands is limited. Under the general rule pursuant to English company law known as the rule in Foss v. Harbottle, a court will generally refuse tointerfere with the management of a company at the insistence of a minority of its shareholders who express dissatisfaction with the conduct of the company’s affairsby the majority or the board of directors. However, every shareholder is entitled to have the affairs of the company conducted properly according to law and thecompany’s constituent documents. As such, if those who control the company have persistently disregarded the requirements of company law or the provisions ofthe company’s memorandum of association and articles of association, then the courts will grant relief. Generally, the areas in which the courts will intervene are thefollowing: (1) an act complained of which is outside the scope of the authorized business or is illegal or not capable of ratification by the majority; (2) acts thatconstitute fraud on the minority where the wrongdoers control the company; (3) acts that infringe on the personal rights of the shareholders, such as the right tovote; and (4) where the company has not complied with provisions requiring approval of a majority of shareholders, which are more limited than the rights affordedminority shareholders under the laws of many states in the United States.Antitakeover provisions in our memorandum of association and articles of association and our right to issue preference shares could make a thirdpartyacquisition of us difficult.Some provisions of our memorandum of association and articles of association may discourage, delay or prevent a change in control of our company ormanagement that shareholders may consider favorable, including provisions that authorize our board of directors to issue preference shares in one or more seriesand to designate the price, rights, preferences, privileges and restrictions of such preference shares.If you hold our ADSs, you may not have the same voting rights as the holders of our ordinary shares and must act through the depositary to exercise your rights.Holders of our ADSs will not be able to exercise voting rights attaching to the shares evidenced by our ADSs on an individual basis. Holders of our ADSswill appoint the depositary or its nominee as their representative to exercise the voting rights attaching to the shares represented by the ADSs. You may not receivevoting materials in time to instruct the depositary to vote, and it is possible that you, or persons who hold their ADSs through brokers, dealers or other third parties,will not have the opportunity to exercise a right to vote. Upon our written request, the depositary will mail to you a shareholder meeting notice which contains,among other things, a statement as to the manner in which your voting instructions may be given, including an express indication that such instructions may begiven or deemed given to the depositary to give a discretionary proxy to a person designated by us if no instructions are received by the depositary from you on orbefore the response date established by the depositary. However, no voting instruction shall be deemed given and no such discretionary proxy shall be given withrespect to any matter as to which we inform the depositary that (i) we do not wish such proxy given, (ii) substantial opposition exists, or (iii) such matter materiallyand adversely affects the rights of shareholders. We will make all reasonable efforts to cause the depositary to extend voting rights to you in a timely manner, butyou may not receive the voting materials in time to ensure that you can instruct the depositary to vote your ADSs. Furthermore, the depositary and its agents willnot be responsible for any failure to carry out any instructions to vote, for the manner in which any vote is cast or for the effect of any such vote. As a result, youmay not be able to exercise your right to vote and you may lack recourse if your ADSs are not voted as you requested. In addition, in your capacity as an ADSholder, you will not be able to call a shareholders’ meeting.You may not be able to participate in rights offerings and may experience dilution of your holdings as a result.We may from time to time distribute rights to our shareholders, including rights to acquire our securities. However, we may not, and under the depositagreement for the ADSs, the depositary will not, offer those rights to ADS holders unless both the rights and the underlying securities to be distributed to ADSholders are registered under the Securities Act, or the distribution of them to ADS holders is exempted from registration under the Securities Act with respect to allholders of ADSs. We are under no obligation to file a registration statement with respect to any such rights or underlying securities or to endeavor to cause such aregistration statement to be declared effective. In addition, we may not be able to rely on an exemption from registration under the Securities Act to distribute suchrights and securities. Accordingly, holders of our ADSs may be unable to participate in our rights offerings and may experience dilution in their holdings as a result.You may be subject to limitations on transfer of your ADSs.Your ADSs are transferable on the books of the depositary. However, the depositary may close its transfer books at any time or from time to time when itdeems expedient in connection with the performance of its duties. In addition, the depositary may refuse to deliver, transfer or register transfers of ADSs generallywhen our books or the books of the depositary are closed, or at any time if we or the depositary deem it advisable to do so because of any requirement of law or ofany government or governmental body, or under any provision of the deposit agreement, or for any other reason.18We may be a passive foreign investment company, of PFIC, which could lead to additional taxes for U.S. holders of our ADSs or ordinary shares.We do not expect to be, for U.S. federal income tax purposes, a passive foreign investment company, or a PFIC, which is a foreign company for which, inany given taxable year, either at least 75% of its gross income is passive income, or investment income in general, or at least 50% of its assets produce or are held toproduce passive income, for the current taxable year, and we expect to operate in such a manner so as not to become a PFIC for any future taxable year. However,because the determination of PFIC status for any taxable year cannot be made until after the close of such year and requires extensive factual investigation,including ascertaining the fair market value of our assets on a quarterly basis and determining whether each item of gross income that we earn is passive income, wecannot assure you that we will not become a PFIC for the current taxable year or any future taxable year. If we are or become a PFIC, a U.S. holder of our ADSs orordinary shares could be subject to additional U.S. federal income taxes on gain recognized with respect to the ADSs or ordinary shares and on certain distributions,plus an interest charge on certain taxes treated as having been deferred under the PFIC rules. Noncorporate U.S. holders will not be eligible for reduced rates oftaxation on any dividends received from us if we are a PFIC in the taxable year in which such dividends are paid or in the preceding taxable year.If our ordinary shares are listed on the NASDAQ Capital Market and the trading price of our ordinary shares fails to comply with the continued listingrequirements of the NASDAQ Capital Market, we would face possible delisting, which would result in a limited public market for our ordinary shares andmake obtaining future debt or equity financing more difficult for us.Companies listed on NASDAQ are subject to delisting for, among other things, failure to maintain a minimum closing bid price of $1.00 per share for 30consecutive business days. On December 19, 2011, we received a letter from NASDAQ indicating that for the last 30 consecutive business days, the closing bidprice of our ADSs fell below the minimum $1.00 per share requirement pursuant to NASDAQ Listing Rule 5550(a)(2) for continued listing on the NASDAQ CapitalMarket. We regained compliance with the minimum bid price requirement for continued listing set forth in NASDAQ Listing Rule 5550(a)(2), as its ADS with itsunderlying ordinary share has achieved a closing bid price of $1.00 or greater for the 10 consecutive business days from November 6 to November 23, 2012 byimplementing a 1for10 combination, or reverse split of the ordinary shares effective November 6, 2012. When listed, we cannot be sure that the price of our ordinaryshares will comply with this requirement for continued listing on the NASDAQ Capital Market in the future. If we were not able to do so, our ordinary shares wouldbe subject to delisting and would likely trade on the overthecounter market. If our ordinary shares were to trade on the overthecounter market, selling ourordinary shares could be more difficult because smaller quantities of shares would likely be bought and sold, transactions could be delayed, and security analysts’coverage of us may be reduced. In addition, brokerdealers have certain regulatory burdens imposed upon them, which may discourage brokerdealers from effectingtransactions in our ordinary shares, further limiting the liquidity of our ordinary shares. As a result, the market price of our ordinary may be depressed, and you mayfind it more difficult to sell our ordinary shares. Such delisting from the NASDAQ Capital Market and continued or further declines in our share price could alsogreatly impair our ability to raise additional necessary capital through equity or debt financing.ITEM 4. INFORMATION ON THE COMPANY.A . HISTORY AND DEVELOPMENT OF THE COMPANY.OverviewWe are a holding company and conduct our operations through our whollyowned subsidiary named LK Technology Ltd., a British Virgin Islands limitedliability company (“LK Technology”), and its whollyowned subsidiaries, MMB Limited and Mobile Media (China) Limited and their respective subsidiaries, whichhold the rights to deploy WiFi systems on about 700 trains in China, including 290 trains in which WiFi systems have already been installed and are in operation. InMay 2010, we consummated an initial public offering of our American Depository Shares, or ADSs, for gross proceeds of $16 million, and our ADSs were listed onthe NASDAQ Capital Market under the ticker symbol “KONE”. Our ordinary shares are not currently listed on any trading market. Our American Depository Shares(“ADSs”) were voluntarily delisted from the NASDAQ Capital Market on September 19, 2018. We have applied to NASDAQ for the listing of our ordinary shares onthe NASDAQ Capital Market and received an approval for listing of Ordinary Shares on August 6, 2018, and as of the date of this transition report, that applicationand approval are currently under review.19On August 17, 2018, we consummated an asset exchange transaction, pursuant to which we exchanged all issued and outstanding capital stock in TopskyInfoTech Holdings Pte Ltd., the parent of Softech, for the issued and outstanding capital stock of LK Technology (the “Asset Exchange”). In connection with theAsset Exchange, we changed our name on August 20, 2018, and on September 20, 2018, issued to the shareholders of C Media Limited, the former parent of LKTechnology, (i) 185,412,599 of our ordinary shares, par value $0.01 per share and (ii) 1,000,000 of our preferred shares. Upon the consummation of the AssetExchange, we ceased our previous business operations and became a company focused on the provision of WiFi and mobile application products for long distancerail travelers in China.On August 25, 2018, LK Technology entered into a Stock Purchase Agreement (the “Agreement”) with the shareholders (“Shareholders”) of SuperengineHoldings Limited, a limited liability company organized under the laws of the British Virgin Islands (the “Superengine”), pursuant to which LK Technology acquiredall of the issued and outstanding capital stock of Superengine for an aggregate purchase price of US$60 million (the “Purchase Price”), which are paid by theissuance of our Ordinary Shares in an amount equal to the quotient of (x) the Purchase Price divided by (y) the average of the closing prices of the Ordinary Shareson the NASDAQ Capital Market over the 12 months period preceding July 31, 2018. We are a party to the Agreement in connection with the issuance of theOrdinary Shares and certain other limited purposes.Corporate InformationOur principal executive offices are located at LAB32, SOHO 3Q, No 9, Guanghua Road, Chaoyang District, Beijing, People’s Republic of China 100020. Ourwebsite is www.luokung.com. We routinely post important information on our website. The information contained on our website is not a part of this transitionreport.Our agent for service of process in the United States is Worldwide Stock Transfer, LLC, the current transfer agent of the Company, with a mailing address ofOne University Plaza, Suite 505, Hackensack, New Jersey 07601.B. BUSINESS OVERVIEW.We are a Chinabased provider of rail WiFi and mobile application products for long distance travelers in China. Our primary mobile application, theLuoKuang platform, consists of the LuoKuang mobile applications, a series of supporting software at the server end, and railWiFi hardware and equipment on thetrains that we serve. The LuoKuang platform incorporates technology covered by 22 patents and about 34 software copy rights, and serves as a content and servicedistribution platform that is tailored for particular travel stages featuring geographic location and social interaction. The content and services distributed byLuoKuang contain information, entertainment, travel, ecommerce, online to offline (“O2O”), advertisement and marketing features.LuoKuang mainly provides personalized and precise services to long distance travelers in two locations: on the train and at the destination. Based on thetravel environment, the core elements of our users’ needs include staving off boredom on trains and discovering and exploring new locations upon arrival. The mainservices contain entertainment services (videos and audio, digital readings, games specific and tailored to the travel stage) and social services (satisfying thedemand for value discovery of unfamiliar destinations through social interaction among strangers based on locations). As of December 31, 2017, the LuoKuangplatform featured about 38 million users.The setting services on the train focus on providing entertainment content for passengers to pass time during longdistance travel in closed environments.For example, we provide access to long video formats such as movies and TV shows, short videos, music, digital readings and games.20We use the most valuable WiFi location—the train WiFi setting—as the entrance of our LuoKuang platform and mobile applications. Passengers typicallyride trains for longdistance and interprovincial travel purposes. The long periods of monotonous journeys and the cost concerns for roaming traffic fees enable thecombination of entertainment content service needs and WiFi access needs. Our railWiFi becomes a valuable and sophisticated WiFi service in this setting—notjust WiFi connection service, but a provider of sophisticated services through a WiFi connection. In addition, the annual traffic of 800,000 passengers onboardeach train makes rail WiFi a huge entry point for mobile applications. We do not define ourselves as a train WiFi communication service operator but as a longdistance travel mobile service provider. We provide users with free WiFi access so that users are able to connect to the LuoKuang platform and thus access relatedentertainment services, services on the train and destination services. The rail WiFi is our access point to a significant pool of users and the entrance to acquiringadditional users.The setting services focus on providing targeted push services to users while travelling in unfamiliar cities. Information and service guidance are preciselypushed to appeal to the interests and tastes (eating, drinking, shopping, touring and culture) of individual users (cuisine specialties and local snacks, local events,viewing sights, culture, history, stories). The service guidance is generated, shared and distributed by individual users (travelers, local residents, local businesses)interacting with current locations and featuring users who generated contents from selfmedia and small and medium vertical contents providers).Based on the GIS (geoinformation system), Superengine is a provider of big spatialtemporal data, network graphic image technology and relevant service.Its super engine series includes computer graphic image engines and spatial database engines. Spatialtemporal cloud index is the core of the company’s spatialtemporal data engines. It is equivalent to the neural network of the big data and the Internet. It extends the value of its products and platform to its data serviceproviders. In cooperation, its service providers can be divided into three categories, namely, basic geographic data providers, industrial data providers andbehavioral data providers). Superengine’s industriesoriented spatialtemporal data engine was launched in 2016. The spatialtemporal GIS platform has been appliedin industries such as aerospace, power grid, surveying & mapping, agriculture, cultural relic preservation, water conservancy, public security, railway section, smartcities, and business location selection.Our primary sources of revenue are advertising and marketing promotion revenues.Our Industry — Mobile Internet IndustryOur products and services are engaged in the mobile internet industry. Our main services consist of entertainment services (videos, audio, digital readings,games that are tailormade for passengers on train) and other services including satisfying the demand for value discovery of unfamiliar destinations through socialinteractions among strangers based in such locations). The mobile internet industry in China is rapidly growing and is likely to be in a longterm growth trend.According to the Mobile Internet Blue Book of China Mobile Internet Report, in 2017 the market size of China mobile internet reached RMB 605 billion. Now China isin a leading position in terms of smartphone, mobile communication network and mobile application services. The pool of users is anticipated to keep expandingthrough the promotion and popularization of smartphones and the expansion of the mobile internet market.Video is the leading online entertainment format in China. According to the iResearch Report, over 80% of total time spent by users on online entertainmentin China in 2016 was internet video. Online entertainment, especially internet video, is attractive to Chinese users due to many favorable factors, including easyaccessibility, wide content selection, and innovative platforms with social features.For 2017, the transaction volume of China mobile ecommerce market reached to over RMB 4 trillion according to the China Mobile Ecommerce IndustryResearch Report from iResearch, representing an increase of 19.1%. For the next few years, China mobile online shopping will likely maintain steady growth. Thefocal point of competition in China mobile ecommerce market has shifted from infrastructure service providers to integrated and accurate services providers.Drawing in users with compelling content in diversified scenes has become a trend.21The revenue for China mobile gaming industry reached RMB 144.58 billion for the year of 2017, according to the China Mobile Game Industry ResearchReport from iResearch. With increased investment by largescale enterprises in the sector of mobile games and the strict enforcement of the mobile game industryrelated regulatory policy guidelines, the mobile game market as a whole will become more organized and standardized.According to the Annual Analysis of China Mobile Reading Industry from Analysis, for the year of 2017, the mobile reading market in China reached toRMB 14.04 billion. By the end of 2016, the size of China mobile's reading market reached RMB 11.86 billion, showing an increase of 18.38% in 2017.The closed and boring environment for passengers of longdistance travel and high roaming charges lead to a strong demand to use our rail WiFi services.Passengers, through their own mobile phone, have access to the free WiFi network in each carriage, access to our rich mobile internet entertainment content andtravel services. According to the annual statistical bulletin of China Railway Corporation in 2017, there were about 6,030 trains in operation in China in 2017,consisting of 2,935 high speed trains and 3,095 express trains. The rail WiFi system that we have installed are currently all on express trains. The market value will bemultiplied several times following the extended coverage of service on other trains.Our StrengthsWe believe the following strengths differentiate us from our competitors:Our strategy is to build up personalized and targeted service products for travelers through rail WiFi networks, enabling our services to evolve into a coredriving distribution platform that provides content, news, games, ecommerce, OTO service, travel services and advertising and marketing. In comparison, ourcompetitors offer simple forms of media services on trains. We focus on personalized and targeted matching between users on long distance trips and services. Ourcompetitors focus on operating and generating internet traffic.We possess a complete set of technology system including network, client end and service and operation platform. We have patent protections for WiFiequipment on trains. Our technology strengths are briefly summarized below.WiFi EquipmentPatent protected. Supports WiFi/3G/4G telecom modules; 4 core CPU with X86 architecture, and SSD hard disk with big storage for localcontents.InfrastructureThe technology infrastructures include the application program system, big data gathering and processing systems, intelligence cloudsservice deployment structure systems and our WiFi hardware server deployment structure system. The operation center, big data center,contents center and railWiFi server system are built on this infrastructure. On the above layer, the equipment management platform,account and payment platform, contents management platform and advertisement distribution platform are set up for daily managementpurpose.LuoKuang strengthens the connection of services among people, setting and locations. In catering to people on the move, we anticipate strengthening therelationship between users and their locations in a given moment. Currently, LuoKuang provides the link between users and thirdparty service providers andprovides value added services to both users and thirdparty service providers. The connection is not simply a traffic diversion, but also the direct presentation ofrelevant services in the LuoKuang platform. The open API interface and independent product software package allows easy access by service providers anddevelopers and supports data service, advertisement operations, billing, users promotion and product marketing services. As an API product, LuoKuang does notcreate content or services. The content and services are provided by our partners in the LuoKuang platform. Now, the majority of top mobile internet content andservices providers in China have a presence in the Luokuang platform. Those include, but are not limited to, Toutiao, Wangyi News, iqiyi, Letv, YoudianCinema(Hollywood films), Sohu video, Phoenix Video, Kugou Music, FM Qingting, iReader, Baidu Literature, Phoenix Novel, Baidu Game, Meituan, Dianping, andsimilar content providers.22Our StrategyLuoKuang is positioned to provide API interface services and geographic information social services. The API interface services are provided within thetypical BC model. LuoKuang pushes the content and services from thirdparty service providers to users. The local businesses, service practitioners, residents, andforeign travelers are all defined as a “user” and may participate in social interactions based on local value information and generate UGC content. The socalled localvalue information is defined as information, views, evaluations, experiences and experience sharing related to the local cultural scene, native products,entertainment, food, tourism and activities.The LuoKuang user growth strategy is to have access to users through the travelers’ use of mobile devices in connection with longdistance train travel.Through deploying WiFi systems on trains and providing free WiFi access to passengers, LuoKuang is able to have consistent access to longdistance travelers.The WiFi system on the train has become a powerful user portal at the early stage of LuoKuang and has gained substantial user traffic. We are in a leading positionin terms of numbers of trains contracted and trains in operation with our free WiFi system. We have contracted with about 700 trains, which cover almost 560 millionannual passenger trips. As of the date of this report, approximately 290 trains are operating our rail WiFi system. We will continue to install our rail WiFi system inthe following years.The development strategy for LuoKuang encompasses the following:1.Enhance our local cycle service (a recommendation service system based on the location of travelers after their arrival, recommendations includingtourist attractions, local specialties and other items of interest), strengthen services for arrivals in the form of social interaction and focus on the valueof relationships between users and their current locations.2.Focus on the development of geographic positioning technology. Get the business of local cycle and users on train mixed together. We will put oureffort to maximize the synergy effect.3.Big Data: Behavior data about passenger trips is obtained via the traffic entrance of rail WiFi and these data will help to optimize our product.4.While enhancing setting service experiences and optimizing entertainment experiences, we will enrich ecommerce services on trains featuringrecommendations of customized products and ecommerce shopping guidance of products labeled with specific geographic location (and trafficdiversion).5.Focus on API positioning and attract more premium vertical service providers (contents and services).Intellectual PropertyWe have registered the following software copyrights, patents and trademarks for our business operations. We believe this intellectual property forms anintegral part of our competitive strength.23Patents:We have been granted some inventions by the State Intellectual Property Office of PRC. We possess a complete set of technology system includingnetwork, client end and service and operation platform. We have patent protections for WiFi equipment on trains. We have received the following patents:No.Name of patentTypeRegistrationNumberDate of Insurance1.Wireless communication multimedia chip business consumer informationacquisition terminal deviceInventionZL 2010 2 0528767.9Sep 21, 20112.A user behavior processing method and device for intelligent terminalInventionZL 2013 1 0301728.3May 27, 20153.A global positioning system terminal deviceInventionZL 2010 2 0253452.8Nov 7, 20114.A wireless multimedia serverInventionZL 2013 2 0220183.9Nov 13, 20135.Ordering system of passengers on trainInventionZL 2015 2 0095381.6Aug 5, 20156.A wireless multimedia serverInventionZL 2015 2 0201382.4Oct 28, 20157.An antenna structureInventionZL 2016 2 0424352.4Mar 1, 20178.Spatial data progressive transmission method and deviceInvention201010617383.9Jun 15, 20169.Methods and devices for conflict detection and avoidance of spatial entity elementlabelingInvention201010617385.8Mar 26, 201410.Spatial data processing method and deviceInvention201010617399.XJun 26, 201311.Method and device of spatial data simplificationInvention201010617400.9Mar 13, 201312.Method and device for judging the occlusion type of space entityInvention201010617403.2Sep 25, 201313.A method and device for distributed mapping of 3d model dataInvention201110274924.7Mar 26, 201414.Data simplification of 3d model, gradual transmission method and deviceInvention201110275336.5Mar 25, 201515.Spatial data transmission method and deviceInvention201110306393.5Dec 13, 201416.Methods and devices for spatial data processing, simplification and progressivetransmissionInvention201210104250.0Jun 10, 201517.Spatial data progressive transmission method and deviceInvention201310367021.2Jun 23, 201718.Simplification method and device of spatial dataInvention201310367128.7Sep 22, 201719.The method and device to accelerate transmission and display of graphic dataacross platformsInvention201210116149.7Aug 10, 201620.Methods and devices related to spatial data compression, decompression andprogressive transmissionInvention201310136682.4Nov 10, 2017We also have two patents outside of China.No.Name of patentCountryNationalRegistrationNumberDate ofInsurance1.Spatial data processing method and deviceJapan2012547439Jun 20, 20142.Methods and devices related to spatial data compression, decompression andprogressive transmissionU.S.A14/394,610Sep 5, 201724Software Copyrights:We have received the following software copyrights from the National Copyright Administration (“NCA”) of PRC:No.Name of CopyrightAchievement approachRegistration numberTime of obtainExpire time1.WAP PUSH Business operation platformsystemIndependent research anddevelopment2007SRBJ1464Jul 23, 200750 years2.TDSCDMA Streaming media businessmanagement platform software V1.0Independent research anddevelopment2009SRBJ0412Jan 22, 200950 years3.Content management platform systemsoftware V1.0Independent research anddevelopment2009SRBJ1374Apr 1, 200950 years4.Mobile multimedia broadcast electronicservice guide system software V1.0Independent research anddevelopment2009SRBJ1365Apr 1, 200950 years5.Mobile video business operation platformsystem V1.0Independent research anddevelopment2007SRBJ1463Jul 23, 200750 years6.Mobile multimedia broadcast emergencybroadcast platform software V1.0Independent research anddevelopment2010SRBJ0720Mar 5, 201050 years7.Mobile multimedia broadcast audio richmedia interactive platform softwareV1.0Independent research anddevelopment2010SRBJ0719Mar 5, 201050 years8.Printer typesetting and printing softwareV1.0Independent research anddevelopment2011SRBJ4190Sep 28, 201150 years9.Electronic newspaper business supportplatform software V1.0Independent research anddevelopment2011SRBJ4186Sep 28, 201150 years10.Public information business platformsoftware V1.0Independent research anddevelopment2011SRBJ3810Sep 27, 201150 years11.User interface scripting software V1.0Independent research anddevelopment2011SRBJ3809Sep 27, 201150 years12.Integrated business management platformsoftware V1.0Independent research anddevelopment2012SR003002Jan 16, 201250 years13.Interactive business development platformsoftwareIndependent research anddevelopment2011SRBJ4593Nov 29, 201150 years14.Instant messaging and messaging systemsoftwareIndependent research anddevelopment2014SR122231Aug 5, 201450 years15.General statistical platform software forclient productsIndependent research anddevelopment2014SR216662Dec 30, 201450 years16.CMMB Data broadcast managementplatform softwareIndependent research anddevelopment2009SRBJ0391Jan 22, 200950 years17.Integrated passenger train service systemIndependent research anddevelopment2012SR083665Sep 5, 201250 years25No.Name of CopyrightAchievement approachRegistration numberTime of obtainExpire time18.JHBY Train inspection managementsystemIndependent research anddevelopment2013SR015105Feb 21, 201350 years19.Integrated information engine platformsoftware V1.0Independent research anddevelopment2014SR040347Nov 30, 200150 years20.Super information engine developmentplatform software V5.0Independent research anddevelopment2014SR036792Mar 5, 200350 years21.Core map super network informationengine platform software V1.0Independent research anddevelopment2014SR036772Sep 15, 200750 years22.Integrated management of the grid gissoftware V1.0Independent research anddevelopment2014SR036808Jun 20, 200850 years23.Core map rural power grid equipment GPSpatrol system software V1.0Independent research anddevelopment2014SR036810Dec 10, 200850 years24.Diagram grid patrol PDA system softwareV1.0Independent research anddevelopment2014SR036778Dec 12, 200850 years25.Core map geographic information enginedesktop platform software V1.0Independent research anddevelopment2014SR036614Jan 15, 200950 years26.Integrated management of the gridgeographic information Web systemsoftware V1.0Independent research anddevelopment2014SR036799Mar 10, 200950 years27.Core map railway power supply equipmentGPS patrol system software V1.0Independent research anddevelopment2014SR036783Mar 25, 201050 years28.Core map network 3 d map server softwareV1.0Independent research anddevelopment2014SR036788Feb 20, 201150 years29.Core map network 3d map clientsoftwareV1.0Independent research anddevelopment2014SR036637Feb 22, 201150 years30.Core map 3d map network publishingplatform software V1.0Independent research anddevelopment2014SR036633Mar 10, 201150 years31.Core map 3d map network release pluginsystem software V1.0Independent research anddevelopment2014SR036622Mar 15, 201150 years32.Core map network 3d map smartphoneplatform software V1.0Independent research anddevelopment2014SR036638Apr 28, 201150 years33.Core map network GIS Shared mobileplatform software V1.0Independent research anddevelopment2014SR036634Oct 31, 201150 years34.Core map network GIS sharing platformsoftware V1.0Independent research anddevelopment2014SR036639Dec 16, 201150 yearsTrademarks:We have registered the following trademarks with the Trademark Office, State Administration for Industry and Commerce in the PRC:NoTrademarkClassification NumberValid PeriodRegistration Number1Y图形382010.04.212020.04.2067460692Y图形412010.09.072020.09.0667460673YRADIO文字352010.07.212020.07.2067334374YRADIO文字382010.04.21.2020.04.2067334385YRADIO文字412010.09.072020.09.0667334396LookLook图形382009.04.072019.04.0646660517LookLook图形422008.12.212018.12.2046660508YTV文字352010.07.212020.07.2067335799YTV文字382010.05.282020.05.27673357810YTV文字412010.09.072020.09.06673358111YTV文字422010.09.072020.09.06673358012YOUTV文字352010.07.212020.07.20673344013YOUTV文字382010.05.282020.05.27673344114xfeng文字352012.03.282022.03.27922914526NoTrademarkClassification NumberValid PeriodRegistration Number15xfeng文字382012.03.282022.03.27922916016xfeng文字412012.03.282022.03.27922919017xfeng文字422012.03.282022.03.27922922118中传视讯文字+图形422008.12.212018.12.20466604719中传视讯文字422008.12.212018.12.20466604820中传视讯文字382008.12.212018.12.20466604921新蜂文字382011.08.212021.08.20853890722新蜂文字422012.01.282022.01.27853907823新蜂.潮文字382011.08.212021.08.20853910424新蜂.潮文字422012.01.282022.01.27853914125新影力412014.08.282024.08.271228864326小人图形352014.08.282024.08.271228798527小人图形382014.08.282024.08.271228858028小人图形412014.08.282024.08.271228862929小人图形422014.08.282024.08.271228843530中传文字382014.08.282024.08.271228826731中传图形382014.08.282024.08.271228828932中童文字412014.08.072024.08.061221408533中童在线文字412014.08.072024.08.061221409234翠鸟文字382014.08.072014.08.061221405835翠鸟文字422014.08.072014.08.061221412536爱翠鸟文字382014.08.072024.08.061221406637爱翠鸟文字412014.08.072024.08.061221409638爱翠鸟文字422014.08.072024.08.061221412639翠鸟图形352014.08.072024.08.061221404040翠鸟图形382014.08.072024.08.061221407441翠鸟图形412014.08.072024.08.061221410042翠鸟图形422014.08.072024.08.061221413143信号小喇叭图形+CMEDIA412015.03.212025.03.201248043944LookLook图形382015.11.142025.11.131153342845LookLook图形422014.06.212024.06.201153372046LookLook文字382014.07.142024.07.131153406747LookLook文字422014.04.142024.04.131153422748L图形352014.02.282024.02.271153500249L图形382014.02.282024.02.271153507350L图形412014.02.282024.02.271153518151L图形422014.02.282024.02.271153526252箩筐图形412016.06.142026.06.131658022853箩筐图形422016.06.142026.06.131658022754箩筐文字422016.09.282026.09.271658024955箩筐文字412016.06.142026.06.131658025056箩筐文字352016.09.212026.09.201658025257箩筐文字92016.06.142026.06.131658025327NoTrademarkClassification NumberValid PeriodRegistration Number58箩筐图形382016.06.142026.06.131658022959箩筐图形352016.06.142026.06.131658023060箩筐图形92016.06.142026.06.131658023161微时光文字422016.09.282026.09.271658024762传游录屏文字92016.06.142026.06.131678214463传游录屏文字352016.06.142026.06.131678214364传游录屏文字382016.06.142026.06.131678214265传游录屏文字412016.06.142026.06.131678214166传游录屏文字422016.06.142026.06.131678214067录游器文字92016.06.142026.06.131678213568录游器文字352016.06.142026.06.131678213669录游器文字382016.06.142026.06.131678213770录游器文字412016.06.142026.06.131678213871录游器文字422016.06.142026.06.131678213972畅联TV文字412016.01.212026.01.201579246773畅联TV文字382016.01.212026.01.201579246874SuperEngine92016.01.212026.01.20812572275SuperEngine422016.01.212026.01.20812572876超擎9/422016.01.212026.01.201647320577SUPERENGINE9/422016.01.212026.01.2016473185*See below for an explanation of each classification number used in the table above.Classification No. 9: data processing apparatus, couplers (data processing equipment), computer software (recorded), monitors (computer programs), smartcards (integrated circuit cards), electrodynamic apparatus for the remote control of signals, alarms, and electric installations for the remote control of industrialoperations.Classification No. 35: auctioneering, sales promotion for others, marketing analysis, marketing research, importexport agencies, advisory services forbusiness management, business management for franchise, personnel management consultancy, relocation services for businesses, and systemization ofinformation into computer databases.Classification No. 38: Include services that enable at least sensory communication between two people. Such services include that allow one person to talkto another, send messages from one person to another, Make verbal or visual contact between one person and the other. This classification especially include theservice for broadcasting radio or television programs. Except for radio advertising services and telemarketing services.Classification No. 41: instruction services, teaching, education information, tuition, arranging and conducting of colloquiums, publication of electronicbooks and journals online, amusements, and vocational guidance.Classification No. 42: technical research, studies (technical project), computer software design, updating of computer software, recovery of computer data,computer systems analysis, installation of computer software, computer antivirus protection, and research and development for others. 28Business Certificates and QualificationsWe have obtained all necessary regulatory certifications to conduct our business in the PRC, including without limitation, the following: SoftwareEnterprise Recognition Certificate, Computer Information System Integration Qualification Certificate, Construction Enterprise Qualification Certificate, and SecurityTechnology & Protection Enterprise Certificate. We have also been properly certified as a hightech enterprise and have met the ISO 9001:2000 qualificationmanagement system.Legal ProceedingsAlthough we may, from time to time, be involved in litigation and claims arising out of our operations in the normal course of business, we do not believethat we are a party to any litigation that will have a material adverse impact on our financial condition or results of operations. To our knowledge, other than asdescribed below there are no material legal proceedings threatened against us. From time to time, we may be subject to various claims and legal actions arising in theordinary course of business. Following the consummation of the AEA, we became successor in interest to the legal proceedings described below.Litigation with Shanghai Fusheng Weier Intelligent Control Technology Co., Ltd.On January 22, 2016, Zhong Chuan Rui You and Shanghai Fusheng Weier Intelligent Control Technology Co., Ltd. (“Fusheng Weier”) signed a contract forequipment of $1,652,842 (RMB10,800,000). Since Zhong Chuan Rui You did not make the payments of $1,126,381 (RMB7,360,000) on the due dates, Fusheng Weierfiled a lawsuit against Zhong Chuan Rui You in Shanghai Xuhui District People's Court on October 8, 2016. On March 9, 2017, Xuhui District People's Court issuedthe verdict requiring Zhong Chuan Rui You to pay the overdue debts. In August 2017, C Media Limited made the payment of $512,075 (RMB3,346,000). Theremaining balance has been accrued in accounts payable. The payment schedule for the remaining balance is being negotiated by the two parties. On February 5,2018, a hearing was held adding Zhong Chuan Shi Xun as a defendant. The Group plans to settle the remaining balance within one year.Lawsuit with Gansu Jinlun Culture Media Co., Ltd.On August 22, 2014, Zhong Chuan Rui You and Gansu Jinlun Culture Media Co., Ltd. (“Gansu Jinlun”) signed a “Lanzhou Railway Bureau AirconditionedTrain WiFi Network System Advertising Operation Rights Agreement” for advertising on 72 trains of $1,467,880 (RMB9,604,633). Due to the dispute on theproject implementation, Zhong Chuan Rui You did not pay the advertising fee. On August 23, 2017, Gansu Jinlun filed a lawsuit with Gansu Intermediate People'sCourt. On December 19, 2017, Gansu Intermediate People's Court issued a verdict, ruling that Zhong Chuan Rui You settle the overdue advertising fee. Since only 18out of 72 trains have been installed with Wifi network system, Zhong Chuan Rui You disputed and appealed to the verdict. The next court trial date has not yet beendetermined.C Media and Gansu Jinlun are negotiating a potential settlement to resume the contract. According to the legal counsel, it is probable that the settlementwill amount to approximately $459,000 (RMB3,000,000); therefore, this amount has been accrued in accounts payable as at December 31, 2017.Litigation with Shenzhen Hua Xun Fang Zhou Technology Co., Ltd.On June 16, 2015, Zhong Chuan Rui You signed a cooperation agreement with Shenzhen Hua Xun Fang Zhou Technology Co., Ltd. (“Shenzhen Hua Xun”)and Xuesong Song, a major shareholder of C Media Limited. Pursuant to this agreement, Zhong Chuan Rui You procures equipment from Shenzhen Hua Xun.Xuesong Song acts as a joint liability guarantor for the entire debts of Zhong Chuan Rui You under this agreement. As Zhong Chuan Rui You did not make thepayments on the due dates, Shenzhen Hua Xun filed a lawsuit with Shenzhen Baoan District People's Court on May 31, 2016. On November 1, 2016, Zhong ChuanRui You, Xuesong Song and Shenzhen Hua Xun reached a settlement in Shenzhen Baoan District People's Court to settle $1,735,389 (RMB11,355,000) in fourinstalments. On December 30, 2017, the debt was assigned to C Media Limited.29C. ORGANIZATIONAL STRUCTUREThe following diagram illustrates our corporate structure and the place of formation and affiliation of each of our subsidiaries and affiliates as of September30, 2018.30The following diagram illustrates our corporate structure and the place of formation and affiliation of each of our subsidiaries and affiliates as of December31, 2017.Contractual Arrangements with Beijing Zhong Chuan Shi Xun Technology Limited’s Subsidiaries and Their Respective ShareholdersTo comply with the PRC legal restrictions on foreign ownership of companies that operate mobile application services, our subsidiaries operate in suchrestricted service areas in the PRC through certain PRC domestic companies, whose equity interests are held by certain management members or founders of the LKTechnology Ltd. Part of the registered capital of these PRC domestic companies was funded by certain management members or founders of LK Technology Ltd. LKTechnology Ltd., through its subsidiary Zhong Chuan Tian Xia Information and Technology (Shenzhen) Limited (the “WFOE”), has entered into an exclusivebusiness cooperation agreement with Beijing Zhong Chuan Shi Xun Technology Limited (“Zhong Chuan Shi Xun” or the “VIE”) the PRC domestic company, whichentitle the WFOE to receive a majority of profit of Zhong Chuan Shi Xun. In addition, Zhong Chuan Tian Xia Information and Technology (Shenzhen) Limited hasentered into certain agreements with those management members or founders, including equity interest pledge agreement of the equity interests held by thosemanagement members or founders and exclusive option agreement to acquire the equity interests in these companies when permitted by the PRC laws, rules andregulations. Details of the typical VIE structure of our significant consolidated VIE, primarily domestic companies associated with the operations such as ZhongChuan Shi Xun and its subsidiaries of Zhong Chuan Rui You, Huoerguosi Luokuang and Jiu Zhou Shi Dai, are set forth below: Exclusive Business Cooperation AgreementThe VIE has entered into an exclusive business services agreement with the WFOE, pursuant to which the WFOE provides exclusive business services tothe VIE. In exchange, the VIE pays a service fee to the WFOE which amounts to be no less than the 80% of the VIE’s aftertax profit, resulting in a transfer ofsubstantially all of the profits from the VIE to the WFOE.Exclusive Option AgreementThe VIE equity holders have granted the WFOE exclusive call options to purchase their equity interest in the VIE at an exercise price equal to the minimumprice as permitted by applicable PRC laws. The WFOE may nominate another entity or individual to purchase the equity interest, if applicable, under the call options.Each call option is exercisable subject to the condition that applicable PRC laws, rules and regulations do not prohibit completion of the transfer of the equityinterest pursuant to the call option. The VIE agrees not to distribute any dividends to the VIE equity holders without the approval of WFOE.31Equity Interest Pledge AgreementPursuant to the equity pledge agreement, the VIE equity holders have pledged all of their interests in the equity of the VIE as a continuing first prioritysecurity interest in favor of the WFOE to secure the performance of obligations by the VIEs and/or the equity holders under the exclusive business cooperationagreement. The WFOE is entitled to exercise its right to dispose of the VIE equity holders’ pledged interests in the equity of the VIE and has priority in receivingpayment by the application of proceeds from the auction or sale of such pledged interests, in the event of any breach or default under the exclusive businesscooperation agreement, if applicable. These equity pledge agreement remain in force until all the obligations under the exclusive business cooperation agreementhave been fulfilled.The exclusive business cooperation agreement and equity interest pledge agreement described above also enable the Company to receive substantially allof the economic benefits from the VIE by typically entitling the WFOE to all dividends and other distributions declared by the VIE and to any distributions orproceeds from the disposal by the VIE equity holders of their equity interests in the VIE.D. PROPERTY AND EQUIPMENTWe lease offices located at Lab 30 & Lab 32, SOHO 3Q, No 9, Guanghua Road, Chaoyang District, Beijing, which covers a floor space of 600 square meters.These leases expire at different times throughout 2018 and are renewable upon negotiation.ITEM 4A. UNRESOLVED STAFF COMMENTSNone.ITEM 5. OPERATING AND FINANCIAL REVIEW AND PROSPECTSA . OPERATING RESULTS.The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our consolidatedfinancial statements and the notes to those financial statements appearing elsewhere in this report. This discussion and analysis contains forwardlookingstatements that involve significant risks and uncertainties. As a result of many factors, such as our anticipated growth strategy, our plans to recruit moreemployees, our plans to invest in research and development to enhance our product or service lines, our future business development, results of operations andfinancial condition, expected changes in our net revenues and certain cost or expense items, our ability to attract and retain customers, trends and competitionin the enterprise mobile software application market, and the factors set forth elsewhere in this report, our actual results may differ materially from thoseanticipated in these forwardlooking statements. In light of those risks and uncertainties, there can be no assurance that the forwardlooking statementscontained in this report will in fact occur. You should not place undue reliance on the forwardlooking statements contained in this report.The forwardlooking statements speak only as of the date on which they are made, and, except to the extent required by U.S. federal securities laws, weundertake no obligation to update any forwardlooking statement to reflect events or circumstances after the date on which the statement is made or to reflectthe occurrence of unanticipated events. Further, the information about our intentions contained in this report is a statement of our intention as of the date of thisreport and is based upon, among other things, the existing regulatory environment, industry conditions, market conditions and prices and our assumptions as ofsuch date. We may change our intentions, at any time and without notice, based upon any changes in such factors, in our assumptions or otherwise.32Unless the context otherwise requires, all references to (i) “PRC” and “China” are to the People’s Republic of China; (ii) “U.S. dollar,” “$” and “US$”are to United States dollars; and (iii) “RMB”, “Yuan” and Renminbi are to the currency of the PRC or China.OverviewLuokung Technology was incorporated on October 27, 2009 under the laws of the British Virgin Islands. We are a holding company and conduct ouroperations through LK Technology Ltd., a British Virgin Islands limited liability company (“LK Technology”) and its whollyowned subsidiaries, MMB Limited andMobile Media (China) Limited and their respective subsidiaries and a contractuallycontrolled entity in the PRC named Beijing Zhong Chuan Shi Xun Technology,which hold the rights to deploy WiFi systems on about 700 trains in China, including 290 trains in which WiFi systems have already been installed and are inoperation. In May 2010, we consummated an initial public offering of our American Depository Shares, or ADSs, for gross proceeds of $16 million, and our ADSswere listed on the NASDAQ Capital Market under the ticker symbol “KONE”. Our ordinary shares are not currently listed on any trading market. Our AmericanDepository Shares (“ADSs”) were voluntarily delisted from the NASDAQ Capital Market on September 19, 2018. We have applied to NASDAQ for the listing of ourordinary shares on the NASDAQ Capital Market and received an approval for listing of Ordinary Shares on August 6, 2018, and as of the date of this transitionreport, that application and approval are currently under review.On August 17, 2018, we consummated an asset exchange transaction, pursuant to which we exchanged all issued and outstanding capital stock in TopskyInfoTech Holdings Pte Ltd., the parent of Softech, for the issued and outstanding capital stock of LK Technology (the “Asset Exchange”). In connection with theAsset Exchange, we changed our name on August 20, 2018, and on September 20, 2018, completed the issuance to the shareholders of C Media Limited, the formerparent of LK Technology, of (i) 185,412,599 of our ordinary shares, par value $0.01 per share and (ii) 1,000,000 of our preferred shares. Upon the consummation of theAsset Exchange, we ceased our previous business operations and became a company focused on the provision of WiFi and mobile application products for longdistance travelers in China.On August 25, 2018, LK Technology entered into a Stock Purchase Agreement (the “Agreement”) with the shareholders (“Shareholders”) of SuperengineHoldings Limited, a limited liability company organized under the laws of the British Virgin Islands (the “Superengine”), pursuant to which LK Technology acquiredall of the issued and outstanding capital stock of Superengine for an aggregate purchase price of US$60 million (the “Purchase Price”), which are paid by theissuance of our Ordinary Shares in an amount equal to the quotient of (x) the Purchase Price divided by (y) the average of the closing prices of the Ordinary Shareson the NASDAQ Capital Market over the 12 months period preceding July 31, 2018. We are a party to the Agreement in connection with the issuance of theOrdinary Shares and certain other limited purposes.Results of operations for the fiscal year ended December 31, 2017 compared to the fiscal year ended December 31, 2016.RevenueWe provide displaybased online advertising services to customers by integrating text description, image and video, and displaying the advertisements in aprominent position of LuoKuang Application. We recognize revenue in accordance with ASC 605, over the contractual term based on the agreements andconfirmation letters signed by both parties, commencing on the date the customer’s advertisement is displayed on our platform.For the year ended December 31, 2017, we had revenue of $26,082,417, as compared to revenue of $5,233,145 for the year ended December 31, 2016, anincrease of $20,849,272, or 398.4%, which was primarily due to the increase of our advertising clients.Cost of revenueOur cost of revenue primarily consists of depreciation, labor cost, WiFi equipment installation fees, data charges, annual payments to local railway bureau,other overhead costs.33Cost of revenue for the year ended December 31, 2017 was $5,547,779, representing a decrease of $767,725 or 12.2% as compared to $6,315,504 for the yearended December 31, 2016. The decrease was primarily attributable to the decrease in labor cost as a result of our cost control and a decrease in the number ofmaintenance staff. Additionally, data charges decreased as train passengers prefer using their mobile data, leading to a decrease in 3G and 4G data.Selling and marketing expenseOur selling and marketing expense mainly include promotional and marketing expenses and compensation for our sales and marketing personnel.Selling expense totaled $23,908,733 for the year ended December 31, 2017, as compared to $6,209,804 for the year ended December 31, 2016, an increase of$17,698,929 or 285.0%. The increase was primarily attributable to the increase in promotional and marketing activities conducted by the Company.General and administrative expenseOur general and administrative expenses consist primarily of salaries and benefits for our general and administrative personnel, rent, fees and expenses forlegal, accounting and other professional servicesGeneral and administrative expense totaled $2,451,249 for the year ended December 31, 2017, as compared to $2,108,854 for the year ended December 31,2016, an increase of $342,395 or 16.2%.Research and development expenses.Research and development expenses primarily consist of salaries and benefits for research and development personnel.Research and development expenses totaled $1,046,198 for the year ended December 31, 2017, as compared to $2,882,202 for the year ended December 31,2016, a decrease of $1,836,004 or 63.7%. The decrease was primarily attributable to the Company reduced its expenses in research and development temporarily asour products are quite stable at present.Loss from operationsAs a result of the factors described above, for the year ended December 31, 2017, loss from operations amounted to $6,871,542, as compared to loss fromoperations of $12,283,219 for the year ended December 31, 2016, a decrease of $5,411,677, or 44.1%.Other income/expenseOther income/expense mainly include interest income from bank deposits, foreign currency transaction gain, and loss from investment.Net lossAs a result of the factors described above, our net loss was $6,810,454 for the year ended December 31, 2017, compared to net loss of $13,049,031 for theyear ended December 31, 2016, a decrease of $6,238,577 or 47.8%.Foreign currency translation adjustmentOur reporting currency is the U.S. dollar. The functional currency of our parent company and subsidiaries of Merchant Supreme and Prime Cheer is the U.S.dollar and the functional currency of the Company’s subsidiaries incorporated in China is the Chinese Renminbi (“RMB”). The financial statements of oursubsidiaries incorporated in China are translated to U.S. dollars using period end rates of exchange for assets and liabilities, and average rates of exchange (for theperiod) for revenue, costs, and expenses. Net gains and losses resulting from foreign exchange transactions are included in the consolidated statements ofoperations and comprehensive loss. As a result of foreign currency translations, which are a noncash adjustment, we reported a foreign currency translation gain of$90,671 for the year ended December 31, 2017, as compared to a foreign currency translation loss of $387,375 for the year ended December 31, 2016. This noncashgain had the effect of increasing/decreasing our reported comprehensive income/loss.34Comprehensive lossAs a result of our foreign currency translation adjustment, we had comprehensive loss for the year ended December 31, 2017 of $6,719,783, compared tocomprehensive loss of $12,661,656 for the year ended December 31, 2016.B. LIQUIDITY AND CAPITAL RESOURCESThe information contained in “Item 5. Operating and Financial Review and Prospects – A. Operating Results – Liquidity and Capital Resources” isincorporated herein by reference.C. RESEARCH AND DEVELOPMENT, PATENTS AND LICENSES, ETC.The discussions of our research and development activities were contained in “Item 4. Information about our Company – B. Business Overview –Research and Development” and “Item 5. Operating and Financial Review and Prospects – A. Operating Results – Operating Expenses – Research and DevelopmentExpenses” are incorporated herein by reference. In the years ended December 31, 2017 and 2016, we spent $1,046,198 and $2,882,202, respectively, on research anddevelopment activities.D. TREND INFORMATION.Industry and Market OutlookChina has awarded licenses to mobile phone companies to provide the superfast 4G network to customers. The licenses, which are designed to give mobilephone users faster access to services, were granted by the government to China Mobile, China Unicom Hong Kong and China Telecom. Since the grants, ChinaMobile has offered 4G to subscribers from December 18, 2013. China Unicom and China Telecom, the country's other two major carriers, also offer 4G wireless. Thenumber of China Mobile 4G customers has exceeded 900 million by the end of October in 2017. The move greatly bolstered business for telecom equipment makersand a range of other companies.Under China’s 12th FiveYear Plan, a key priority is for China to transition from “Made in China” to “Designed in China.” In order to achieve this goal, thegovernment plans to heavily invest in science and technology education and R&D so as to further develop China’s intellectual property rights system and support“NextGeneration IT” as a Strategic Emerging Industry (SEI). Additionally, China plans to upgrade the technological capabilities of private and public services,including “triple play” services (the convergence of telecom, broadcasting and Internet networks), ecommerce, and egovernment and statistics systems.Furthermore, the government plans to invest in R&D of the "Internet of things" and cloud computing, and develop digital and virtual technologies.E. OFFBALANCE SHEET ARRANGEMENTSWe have not entered into any financial guarantees or other commitments to guarantee the payment obligations of any third parties. We have not enteredinto any derivative contracts that are indexed to our shares and classified as shareholder’s equity, or that are not reflected in our consolidated financial statements.Furthermore, except for the mortgage referenced above, we do not have any retained or contingent interest in assets transferred to an unconsolidated entity thatserves as credit, liquidity or market risk support to such entity. We do not have any variable interest in any unconsolidated entity that provides financing, liquidity,market risk or credit support to us or engages in leasing, hedging or research and development services with us.35F. TABULAR DISCLOSURE OF CONTRACTUAL OBLIGATIONSAs of December 31, 2017, we did not have any contractual obligations required to be disclosed in this Item 5.F. ITEM 6. DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES.A. DIRECTORS AND SENIOR MANAGEMENT.Executive Officers and DirectorsThe following table sets forth the names and ages as of the date of this transition report of each of our executive officers and directors:NameAgePositionXuesong Song50Chief Executive Officer, Chairman and DirectorDongpu Zhang50PresidentJie Yu34Chief Financial OfficerKegang Peng46Vice President and DirectorChuang Tao51DirectorDennis Galgano (1)(2)69Director (Independent)Jin Shi (1)(2)49Director (Independent)Jiming Ha (1)(3)56Director (Independent)Zhihao Xu (3)42Director (Independent)(1)Member of the Audit Committee.(2)Member of the Compensation Committee.(3)Member of the Nominating and Corporate Governance Committee.Set forth below is biographical information concerning our executive officers and directors.Xuesong Song is a cofounder of C Media Limited and served as its chairman of the board of directors and chief executive officer from 2012 until theconsummation of the AEA. From February 2014 through April 2017, Mr. Song served as a director of Seven Stars Cloud Group, Inc. (NASDAQ: SSC) and fromJanuary 2013 through February 2015, Mr. Song served as a director of Pingtan Marine Enterprise Ltd. (NASDAQ: PME). From May 2006 through January 2009, Mr.Song served as the Chairman of the Board of ChinaGrowth North Acquisition Corporation, a special purpose acquisition company, which acquired UIB GroupLimited in January 2009, in which he remains a director. Mr. Song has been a principal of Chum Capital Group Limited since August 2001, a merchant banking firmthat invests in growth Chinese companies and advises them in financings, mergers & acquisitions and restructurings, and chief executive officer of Beijing ChumInvestment Co., Ltd. since December 2001. Mr. Song has been a director of Mobile Vision Communication Ltd. since July 2004. Mr. Song received a Master’s ofBusiness Administration degree from Oklahoma City/Tianjin Program.Dongpu Zhang was appointed as the President of the Company effective on August 25, 2018. Mr. Dongpu Zhang has served as the General Manager ofSuperEngine Graphics Software Technology Development (Suzhou) Co., Ltd. (“SuperEngine Suzou”) and the Chief Executive Officer of SuperEngine HoldingLimited since September 2016. From February, 2014 to August, 2016, Mr. Zhang served as vice president of Industrial Development Group under China Fortune LandDevelopment Co., Ltd. From March, 2009 to February, 2014, Mr. Zhang served as the vice president of Aerospace Science and Technology Holding Group Co., Ltd.Mr. Zhang receive his Master Degree of Computer Science from Harbin Institute of Technology in 1994 and his Bachelor Degree of information system fromChangsha Institute of technology in 1991.Jie Yu served as the chief financial officer of C Media Limited from January 2018 until the consummation of the asset exchange transactions. From June 2016to January 2018, Mr. Yu served as chief financial officer and secretary of the board of directors of MTI Environment Group Limited. Prior to joining MTI, Mr. Yuserved as the senior manager at DA HUA CPA from November 2012 to May 2016. Previously, Mr. Yu served as the manager at Crowe Horwath (Hong Kong) CPA.Mr. Yu holds a bachelor degree in accounting and finance from University of Auckland and postgraduate diploma in accounting from University of Auckland.36Kegang Peng served as the Vice Chairman of the board of directors C Media Limited from October 2014 to the consummation of the asset exchangetransactions, and is now a member of the Company’s board of directors. Previously, from 2012 to 2014, Mr. Peng was chairman of the board and founder of JiangsuSuqian Jinghaiboyuan Information and Technology Co., Ltd. Mr. Peng studied at Beijing University of Aeronautics and Astronautics majoring computer andapplication.20F 1 f20f2017_luokungtech.htm AMENDMENT NO. 1 TO FORM 20FUNITED STATESSECURITIES AND EXCHANGE COMMISSIONWASHINGTON, D.C. 20549FORM 20F☐ REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934OR☐ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934For the Fiscal year ended _____________OR☒ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934For the transition period from October 1, 2017 to December 31, 2017☐ SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934Date of event requiring this shell company report Commission file number: 00134738Luokung Technology Corp.(Exact name of Registrant as specified in its charter)Not applicable(Translation of Registrant’s name into English)British Virgin IslandsLAB 32, SOHO 3Q, No 9, Guanghua Road, Chaoyang District, BeijingPeople’s Republic of China, 100020(Jurisdiction of incorporation or organization)(Address of principal executive offices)Mr. Muqiao GengLAB32, SOHO 3Q, No 9, Guanghua Road, Chaoyang District, BeijingPeople’s Republic of China 100020Tel: (86) 1085866721(Name, telephone, Email and/or facsimile number and address of company contact person)Securities registered or to be registered pursuant to Section 12(b) of the Act:Title of each className of each exchange on which registeredOrdinary shares, par value $0.01 per shareNonePreferred shares, par value $0.01 per shareNoneSecurities registered or to be registered pursuant to Section 12(g) of the Act:none(Title of Class)Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act:none(Title of Class)Indicate the number of outstanding shares of each of the issuer’s classes of capital or common stock as of the close of the period covered by the transitionreport. 187,097,599 Ordinary Shares, including 186,383,224 Ordinary Shares represented by 714,375 American Depositary Shares, and 1,000,000 Preferred Sharesoutstanding as of September 20, 2018.Indicate by check mark if the registrant is a wellknown seasoned issuer, as defined in Rule 405 of the Securities Act. ☐ Yes ☒ NoIf this report is an annual or transition report, indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of theSecurities Exchange Act of 1934. ☐ Yes ☒ NoIndicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirementsfor the past 90 days. ☒ Yes ☐ NoIndicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File requiredto be submitted and posted pursuant to Rule 405 of Regulation ST (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that theregistrant was required to submit and post such files). ☒ Yes ☐ NoIndicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a nonaccelerated filer. See definition of “accelerated filer andlarge accelerated filer” in Rule 12b2 of the Exchange Act. (Check one):Large accelerated filer ☐ Accelerated filer ☐ Nonaccelerated filer ☒Indicate by check mark which basis of accounting the registrant has used to prepare the financial statements included in this filing.U.S. GAAP ☒International Financial Reporting Standards as issuedby the International Accounting Standards Board ☐Other ☐If “Other” has been checked in response to the previous question, indicate by check mark which financial statement item the registrant has elected tofollow. Item 17 ☐ Item 18 ☐If this is an transition report, indicate by check mark whether the registrant is a shell company (as defined in Rule 12b2 of the ExchangeAct). ☐ Yes ☒ NoExplanatory NoteLuokung Technology Corp. (the “Company”) is filing this transition report on Form 20F (“Transition Report”) in connection with the completion of theexchange of certain of its assets for substantially all of the assets of C Media Limited (“C Media”) pursuant to that Asset Exchange Agreement, dated January 25,2018 (the “Original AEA”), as supplemented by the Addendum to Asset Exchange Agreement, dated October 3, 2018 (the “Addendum” and together with theOriginal AEA, the “AEA”). Following the consummation of the AEA, on October 4, 2018, the Company changed its fiscal year end from September 30 to the fiscalyear end used by C Media, December 31. This Transition Report covers the threemonth period from Octorber 1, 2017 to December 31, 2017, and the fiscal yearsdescribed herein.In this transition report:●References to the “Company”, “we”, “our” and “us” are to Luokung Technology Corp. and its consolidated subsidiaries and variable interestentity, except as the context otherwise requires;●This transition report on Form 20F covers the threemonth period from October 1, 2017 through December 31, 2017 (the “Transition Period”) andreflects our financial results thereof. Prior to this transition report on Form 20F, our two most recent annual reports on Form 20F cover the fiscalyears ended September 30, 2017 and September 30, 2016, respectively, and reflect financial results for the respective twelvemonth periods fromOctober 1 to September 30. Unless otherwise noted, all references to years are to the calendar year from January 1 to December 31 and referencesto our fiscal year or years are to the fiscal year or years which, prior to the Transition Period, ended September 30, while from and after theTransition Period, ended December 31;●References to an “ADS” are to an American Depositary Share, each of which represents one of our Ordinary Shares with a par value of $.01 pershare.Special Note Regarding Forwardlooking StatementsThis transition report contains forwardlooking statements that involve risks and uncertainties. These statements involve known and unknown risks,uncertainties and other factors that may cause our actual results, performance or achievements to be materially different from those expressed or implied by theforwardlooking statements.You can identify these forwardlooking statements by words or phrases such as “may,” “will,” “expect,” “anticipate,” “aim,” “estimate,” “intend,” “plan,”“believe,” “likely to” or other similar expressions. We have based these forwardlooking statements largely on our current expectations and projections about futureevents and financial trends that we believe may affect our financial condition, results of operations, business strategy and financial needs. You should not placeundue reliance on these forwardlooking statements, which apply only as of the date of this transition report. These forwardlooking statements include:●our future business development, results of operations and financial condition;●expected changes in our net revenues and certain cost or expense items;●our ability to attract and retain customers; and●trends and competition in the enterprise mobile software application market.You should read this transition report thoroughly with the understanding that our actual future results may be materially different from, and/or worse, thanwhat we expect. We qualify all of our forwardlooking statements by these cautionary statements. Other sections of this transition report include additional factorswhich could adversely impact our business and financial performance. Moreover, we operate in an evolving environment. New risk factors and uncertainties emergefrom time to time and it is not possible for our management to predict all risk factors and uncertainties, nor can we assess the impact of all factors on our business orthe extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forwardlooking statements.This transition report also contains estimates, projections and statistical data related to the market for the provision of WiFi and mobile applications inChina. This market data, including data from IDC, a leading provider of market data and intelligence, speaks as of the date it was published and includes projectionsthat are based on a number of assumptions and are not representations of fact. The market for the provision of WiFi and mobile applications in China may not growat the rates projected by the market data, or at all. The failure of the market to grow at the projected rates may materially and adversely affect our business and themarket price of our ADSs. In addition, the rapidly changing nature of the market for the provision of WiFi and mobile applications subjects any projections orestimates relating to the growth prospects or future condition of our market to significant uncertainties. If any one or more of the assumptions underlying the marketdata proves to be incorrect, actual results may differ from the projections based on these assumptions.You should not rely upon forwardlooking statements as predictions of future events. We undertake no obligation to update or revise any forwardlookingstatements, whether as a result of new information, future events or otherwise.TABLE OF CONTENTSPart IItem 1.Identity of Directors, Senior Management and Advisers.1Item 2.Offer Statistics and Expected Timetable.1Item 3.Key Information.1A.Selected Financial Data.1B.Capitalization and Indebtedness.3C.Reasons for the Offer and Use of Proceeds.3D.Risk Factors.3Item 4.Information on the Company.19A.History and Development of the Company.19B.Business Overview.20C.Organizational Structure.30D.Property, Plants and Equipment.32Item 4A.Unresolved Staff Comments.32Item 5.Operating and Financial Review and Prospects.32A.Operating Results.32B.Liquidity and Capital Resources.35C.Research and Development, Patents and Licenses, etc.35D.Trend Information.35E.Offbalance Sheet Arrangements.35F.Tabular Disclosure of Contractual Obligations.36Item 6.Directors, Senior Management and Employees.36A.Directors and Senior Management.36B.Compensation.37C.Board Practices.40D.Employees.43E.Share Ownership.43Item 7.Major Shareholders and Related Party Transactions.44A.Major Shareholders.44B.Related Party Transactions.45C.Interests of Experts and Counsel.45Item 8.Financial Information.45A.Consolidated Statements and Other Financial Information.45B.Significant Changes.46Item 9.The Offer and Listing.46A.Offer and Listing Details.46B.Plan of Distribution.47C.Markets.47D.Selling shareholders.48E.Dilution.48F.Expenses of the issue.48Item 10.Additional Information.48A.Share Capital.48B.Memorandum and Articles of Association.48C.Material Contracts.53D.Exchange Controls.54E.Taxation.61F.Dividends and Paying Agents.67G.Statement by Experts.67H.Documents on Display.67I.Subsidiary Information.68Item 11.Quantitative and Qualitative Disclosures about Market Risk.68Item 12.Description of Securities Other than Equity Securities.69A.Debt Securities.69B.Warrants and Rights.69C.Other Securities.69D.American Depositary Shares.69iPart IIItem 13.Defaults, Dividend Arrearages and Delinquencies.71Item 14.Material Modifications to the Rights of Security Holders and Use of Proceeds.71Item 15.Controls and Procedures.71Item 16.[Reserved.]72Item 16A.Audit Committee Financial Expert.72Item 16B.Code of Ethics.73Item 16C.Principal Accountant Fees and Services.73Item 16D.Exemptions from the Listing Standards for Audit Committees.73Item 16E.Purchases of Equity Securities by the Issuer and Affiliated Purchasers.73Item 16F.Change in Registrant’s Certifying Accountant.73Item 16G.Corporate Governance.73Item 16H.Mine Safety Disclosure.73Part IIIItem 17.Financial Statements.74Item 18.Financial Statements.74Item 19.Exhibits.74Index to Consolidated Financial StatementsF1iiPART IITEM 1. IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS.The directors of Luokung Technology Corp. are Xuesong Song, Kegang Peng, Dennis Galgano, Jin Shi, Jiming Ha, Zhihao Xu and Chuang Tao. Thebusiness address for our directors is LAB 32, SOHO 3Q, No 9, Guanghua Road, Chaoyang District, Beijing, People’s Republic of China.Moore Stephens CPA Limited has served as our auditor since October 5, 2018, and is located at 801806 Silvercord Tower 1, 30 Canton road, Tsimshatsui,Kowloon, Hong Kong. BDO China Shun Lun Pan Certified Public Accountants LLP served as our auditors for the last three years, and are located at 4F, No. 61Nanjing Road, Shanghai, People’s Republic of China.Garvey Schubert Barer, P.C., serves as our legal counsel in the United States, and is located at Flour Mill Building, 1000 Potomac Street NW, Suite 200,Washington, D.C., 200073501.Conyers Dill & Pearlman serves as our legal counsel with regard to the laws of the British Virgin Islands, and is located at 29th Floor, One Exchange Square,8 Connaught Place, Central, Hong Kong.ITEM 2. OFFER STATISTICS AND EXPECTED TIMETABLE.Not applicable.ITEM 3. KEY INFORMATION.A. SELECTED FINANCIAL DATA.Luokung Technology Corp. and its consolidated subsidiaries (“Luokung Technology”, “we”, “us”, or “the Company”) consummated an asset exchangeagreement pursuant to which we exchanged our existing assets with those of C Media Limited (the “Asset Exchange”) on August 17, 2018, and we changed ourname from Kingtone Wirelessinfo Solution Holding Ltd. to our current name on August 20, 2018. On October 4, 2018, in connection with the consummation of the Asset Exchange, we changed our fiscal year end from September 30 to December 31.1The selected financial data for the fiscal years ended December 31 2017 and 2016 have been derived from our audited consolidated and combined financialstatements. The selected consolidated and combined financial data should be read in conjunction with our audited financial statements and the accompanying notesand “Item 5 – Operating and Financial Review and Prospects.” Our consolidated and combined financial statements are prepared and presented in accordance withUnited States generally accepted accounting principles, or U.S. GAAP. Our historical results do not necessarily indicate our results expected for any future periods.You should not view our historical results as an indicator of our future performance.LK TECHNOLOGY LTD. AND SUBSIDIARIESSELECTED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS(IN U.S. DOLLARS)For the years ended December 31,20172016Revenues$26,082,417$5,233,145Less: Cost of revenues5,547,7796,315,504Less: Operating expenses:Selling and marketing23,908,7336,209,804General and administrative2,451,2492,108,854Research and development1,046,1982,882,202Total operating expenses27,406,18011,200,860Loss from operations(6,871,542)(12,283,219)Other income (expense):Interest expense(26,611)(4,412)Foreign exchange gains(losses)350,679(298,257)Loss from investment(428,571)Other income (expense), net(262,980)(34,572)Total other income (expense), net61,088(765,812)Loss before income taxes(6,810,454)(13,049,031)Income taxesNet loss$(6,810,454)$(13,049,031)Other comprehensive income:Foreign currency translation adjustment90,671387,375Total comprehensive loss$(6,719,783)$(12,661,656)2LK TECHNOLOGY LTD. AND SUBSIDIARIESSELECTED CONSOLIDATED BALANCE SHEETS(IN U.S. DOLLARS)As of December 31,20172016Accounts receivable, net of allowance for doubtful accounts9,729,6251,865,836Amounts due from related parties11,760,692Property and equipment, net5,044,8727,771,027Goodwill7,239,9367,239,936TOTAL ASSETS37,582,85821,114,832Accounts payable8,784,5186,446,584Accrued liabilities and other payables12,962,91211,329,613Total liabilities25,311,11333,905,520Total Shareholder’s Equity (Deficit)12,271,745(12,790,688)TOTAL LIABILITIES AND SHAREHOLDER’S EQUITY (DEFICIT)37,582,85821,114,832B. CAPITALIZATION AND INDEBTEDNESS.Not applicable.C. REASONS FOR THE OFFER AND USE OF PROCEEDS.Not applicable.D. RISK FACTORS.An investment in our ADSs and ordinary shares involves a high degree of risk. You should carefully consider the risks and uncertainties described belowtogether with all other information contained in this transition report, including the matters discussed under “Special Note Regarding ForwardLooking Statements,”before you decide to invest in our ADSs or ordinary shares. You should pay particular attention to the fact that we are a holding company with substantialoperations in China and are subject to legal and regulatory environments that in many respects differ from those of the United States. If any of the following risks, orany other risks and uncertainties that are not presently foreseeable to us, actually occur, our business, financial condition, results of operations, liquidity and ourfuture growth prospects would be materially and adversely affected. You should also consider all other information contained in this transition report beforedeciding to invest in our ADSs or ordinary shares.Risks Related to Our Company and Our IndustryThe Company had incurred negative cash flows from operating activities and net losses as of December 31, 2017. These matters raise substantial doubt aboutthe Company’s ability to continue as a going concern.The Company’s consolidated financial statements are prepared using generally accepted accounting principles in the United States of America applicableto a going concern, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. As of and for the year endedDecember 31, 2017, the Company had incurred significant operating losses and working capital deficit. The ability of the Company to continue as a going concern isdependent on the Company obtaining adequate capital to fund operating losses until it becomes profitable. If the Company is unable to obtain adequate capital, itcould be forced to cease operations. The accompanying consolidated financial statements do not include any adjustments that might be necessary if the Companyis unable to continue as a going concern.3We may undertake acquisitions, investments, joint ventures or other strategic alliances, which could have a material adverse effect on our ability to manageour business. In addition, such undertakings may not be successful.Our strategy includes plans to grow both organically and through acquisitions, participation in joint ventures or other strategic alliances. Joint venturesand strategic alliances may expose us to new operational, regulatory and market risks, as well as risks associated with additional capital requirements. We may not beable, however, to identify suitable future acquisition candidates or alliance partners. Even if we identify suitable candidates or partners, we may be unable tocomplete an acquisition or alliance on terms commercially acceptable to us. If we fail to identify appropriate candidates or partners, or complete desired acquisitions,we may not be able to implement our strategies effectively or efficiently. In addition, our ability to successfully integrate acquired companies and their operations may be adversely affected by several factors. These factorsinclude:1.diversion of management’s attention;2.difficulties in retaining customers of the acquired companies;3.difficulties in retaining personnel of the acquired companies;4.entry into unfamiliar markets;5.unanticipated problems or legal liabilities; and6.tax and accounting issues.If we fail to integrate acquired companies efficiently, our earnings, revenue growth and business could be negatively affected.Due to intense competition for highlyskilled personnel, we may fail to attract and retain enough sufficiently trained employees to support our operations; ourability to bid for and obtain new projects may be negatively affected and our revenues could decline as a result.The IT industry relies on skilled employees, and our success depends to a significant extent on our ability to attract, hire, train and retain qualifiedemployees. There is significant competition in China for professionals with the skills necessary to develop the products and perform the services we offer to ourcustomers. Increased competition for these professionals, in the mobile application design area or otherwise, could have an adverse effect on us if we experiencesignificant increase in the attrition rate among employees with specialized skills, which could decrease our operating efficiency and productivity and could lead to adecline in demand for our services.In addition, our ability to serve existing customers and business partners and obtain new business will depend, in large part, on our ability to attract, trainand retain skilled personnel that enable us to keep pace with growing demands for wifi connectivity and mobile applications, evolving industry standards andchanging customer preferences. Our failure to attract, train and retain personnel with the qualifications necessary to fulfill the needs of our existing and futurecustomers or to assimilate new employees successfully could have a material adverse effect on our business, financial condition and results of operations. Ourfailure to retain our key personnel on business development or find suitable replacements of the key personnel upon their departure may lead to shrinking newimplementation projects, which could materially adversely affect our business.4Our business depends substantially on the continuing efforts of our senior executives and other key personnel, and our business may be severely disrupted if welose their services.Our future success heavily depends upon the continued services of our senior executives and other key employees, particularly since we recentlyappointed a new chairman. We are reliant on the services of Mr. Xuesong Song, our chairman, chief executive officer and member of our board of directors. If one ormore of our senior executives or key employees is unable or unwilling to continue in his or her present position, we may not be able to replace such employee easily,or at all, we may incur additional expenses to recruit, train and retain replacement personnel, our business may be severely disrupted, and our financial condition andresults of operations may be materially adversely affected.Our business could suffer if our executives and directors compete against us and our noncompetition agreements with them cannot be enforced.If any of our senior executives or key employees joins a competitor or forms a competing company, we may lose customers, knowhow and keyprofessionals and staff members to them. Also, if any of our business development managers who keep a close relationship with our customers and businesspartners joins a competitor or forms a competing company, we may lose customers, and our revenues may be materially adversely affected. Most of our executiveshave entered, or will soon enter, into employment agreements with us that contain or will contain noncompetition provisions. However, if any dispute arisesbetween our executive officers and us, such noncompetition provisions may not be enforceable, especially in China, where all of these executive officers and keyemployees reside, in light of the uncertainties with China’s legal system. See “Risk Factors — Risks Related to Doing Business in China — Uncertainties withrespect to the PRC legal system could adversely affect us.”Our computer networks may be vulnerable to security risks that could disrupt our services and adversely affect our results of operations.Our computer networks may be vulnerable to unauthorized access, computer hackers, computer viruses and other security problems caused byunauthorized access to, or improper use of, systems by third parties or employees. A hacker who circumvents security measures could misappropriate proprietaryinformation or cause interruptions or malfunctions in operations. Computer attacks or disruptions may jeopardize the security of information stored in andtransmitted through computer systems and mobile devices of our customers. Actual or perceived concerns that our systems may be vulnerable to such attacks ordisruptions may deter customers from using our services. As a result, we may be required to expend significant resources to protect against the threat of thesesecurity breaches or to alleviate problems caused by these breaches, which could adversely affect our results of operations.If we do not continually enhance our solutions and service offerings, we may have difficulty in retaining existing customers and attracting new customers.We believe that our future success will depend, to a significant extent, upon our ability to enhance our existing applications and platform, and to introducenew features to meet the preferences and requirements of our customers in a rapidly developing and evolving market. Unexpected technical, operational, distributionor other problems could delay or prevent the introduction of one or more of these products or services, or any products or services that we may plan to introduce inthe future. Our present or future products may not satisfy the evolving preferences and tastes of our customers, and these solutions and services may not achieveanticipated market acceptance or generate incremental revenue. If we are unable to anticipate or respond adequately to the need for service or productenhancements due to resource, technological or other constraints, our business, financial condition and results of operations could be materially and adverselyaffected.5If we are unable to develop competitive new products and service offerings our future results of operations could be adversely affected.Our future revenue stream depends to a large degree on our ability to utilize our technology in a way that will allow us to offer new types of mobileapplications and services to a broader customer base. We will be required to make investments in research and development in order to continually develop newsoftware applications and related service offerings, enhance our existing platform, mobile applications and related service offerings and achieve market acceptanceof our mobile applications and service offerings. We may incur problems in the future in innovating and introducing new mobile applications and service offerings.Our developmentstage mobile applications may not be successfully completed or, if developed, may not achieve significant customer acceptance. If we are unableto successfully define, develop and introduce competitive new mobile applications, and enhance existing mobile applications, our future results of operations wouldbe adversely affected. The timely availability of new applications and their acceptance by customers are important to our future success. A delay in the developmentof new applications could have a significant impact on its results of operations.Changes in technology could adversely affect our business by increasing our costs, reducing our profit margins and causing a decline in our competitiveness.China’s wireless telecom industry, in which we operate, is characterized by rapidly changing technology, evolving industry standards, frequentintroductions of new services and solutions and enhancements as well as changing customer demands. New solutions and new technologies often render existingsolutions and services obsolete, excessively costly or otherwise unmarketable. As a result, our success depends on our ability to adapt to the latest technologicalprogress, such as the 5G standard and technologies, and to develop or acquire and integrate new technologies into our platform, mobile applications and relatedservices. Advances in technology also require us to commit substantial resources to developing or acquiring and then deploying new technologies for use in ouroperations. We must continuously train personnel in new technologies and in how to integrate existing hardware and software systems with these newtechnologies. We may not be able to adapt quickly to new technologies or commit sufficient resources to compete successfully against existing or new competitorsin bringing to market solutions and services that incorporate these new technologies. We may incur problems in the future in innovating and introducing new mobileapplications and service offerings. Our development of new mobile applications and platform enhancements may not be successfully completed or, if developed,may not achieve significant customer acceptance. If we fail to adapt to changes in technologies and compete successfully against established or new competitors,our business, financial condition and results of operations could be adversely affected.Problems with the quality or performance of our hardware, software or other systems may cause delays in the introduction of new solutions or result in the lossof customers and revenues, which could have a material and adverse effect on our business, financial condition and results of operations.Our hardware and software systems are complex and may contain defects, errors or bugs when first introduced to the market or to a particular customer, oras new versions are released. Because we cannot test for all possible scenarios, our systems may contain errors that are not discovered until after they have beeninstalled or implemented, and we may not be able to timely correct these problems. These defects, errors or bugs could interrupt or delay the completion of projectsor sales to our customers. In addition, our reputation may be damaged and we may fail to acquire new projects from existing customers or new customers. Errors mayoccur when we provide systems integration and maintenance services. Even in cases where we have agreements with our customers that contain provisionsdesigned to limit our exposure to potential claims and liabilities arising from customer problems, these provisions may not effectively protect us against such claimsin all cases and in all jurisdictions. In addition, as a result of business and other considerations, we may undertake to compensate our customers for damages arisingfrom the use of our solutions, even if our liability is limited by these provisions. Moreover, claims and liabilities arising from customer problems could also result inadverse publicity and materially and adversely affect our business, results of operations and financial condition. We currently do not carry any product or serviceliability insurance and any imposition of liability on us may materially and adversely affect our business and increase our costs, resulting in reduced revenues andprofitability.Our products may contain undetected software defects, which could negatively affect our revenues.Our software products are complex and may contain undetected defects. Although we test our products, it is possible that errors may be found or occur inour new or existing products after we have commenced commercial shipment of those products. Defects, whether actual or perceived, could result in adversepublicity, loss of revenues, product returns, a delay in market acceptance of our products, loss of competitive position or claims against us by customers. Any suchproblems could be costly to remedy and could cause interruptions, delays, or cessation of our product sales, which could cause us to lose existing or prospectivecustomers and could negatively affect our results of operations.6We may be subject to infringement, misappropriation and indemnity claims in the future, which may cause us to incur significant expenses, pay substantialdamages and be prevented from providing our services or technologies.Our success depends, in part, on our ability to carry out our business without infringing the intellectual property rights of third parties. Patent andcopyright law covering softwarerelated technologies is evolving rapidly and is subject to a great deal of uncertainty. Our selfdeveloped or licensed technologies,processes or methods may be covered by thirdparty patents or copyrights, either now existing or to be issued in the future. Any potential litigation may cause us toincur significant expenses. Thirdparty claims, if successfully asserted against us may cause us to pay substantial damages, seek licenses from third parties, payongoing royalties, redesign our services or technologies, or prevent us from providing services or technologies subject to these claims. Even if we were to prevail,any litigation would likely be costly and timeconsuming and divert the attention of our management and key personnel from our business operations.Our failure to protect our intellectual property rights may undermine our competitive position, and subject us to costly litigation to protect our intellectualproperty rights.Any misappropriation of our technology or the development of competitive technology could seriously harm our business. We regard a substantial portionof our hardware and software systems as proprietary and rely on statutory copyright, trademark, patent, trade secret laws, customer license agreements, employeeand thirdparty nondisclosure agreements and other methods to protect our proprietary rights. Nevertheless, these resources afford only limited protection and theactions we take to protect our intellectual property rights may not be adequate. In particular, third parties may infringe or misappropriate our proprietarytechnologies or other intellectual property rights, which could have a material adverse effect on our business, financial condition and results of operations. Inaddition, intellectual property rights and confidentiality protection in China may not be as effective as in the United States, and policing unauthorized use ofproprietary technology can be difficult and expensive. Further, litigation may be necessary to enforce our intellectual property rights, protect our trade secrets ordetermine the validity and scope of the proprietary rights of others. The outcome of any such litigation may not be in our favor. Any such litigation may be costlyand may divert management attention, as well as our other resources, away from our business. An adverse determination in any such litigation will impair ourintellectual property rights and may harm our business, prospects and reputation. In addition, we have no insurance coverage against litigation costs and wouldhave to bear all litigation costs in excess of the amount recoverable from other parties. The occurrence of any of the foregoing could have a material adverse effecton our business, financial condition and results of operations. Our solutions incorporate a portion of, and work in conjunction with, thirdparty hardware and software solutions. If these thirdparty hardware or softwaresolutions are not available to us at reasonable costs, or at all, our results of operations could be adversely impacted.Although our hardware and software systems and mobile applications primarily rely on our own core technologies, some elements of our systemsincorporate a small portion of thirdparty hardware and software solutions. If any third party were to discontinue making their intellectual property available to us orour customers on a timely basis, or increase materially the cost of their licensing such intellectual property, or if our systems or applications failed to properlyfunction or interoperate with replacement intellectual property, we may need to incur costs in finding replacement thirdparty solutions and/or redesigning oursystems or applications to replace or function with or on replacement thirdparty proprietary technology. Replacement technology may not be available on termsacceptable to us or at all, and we may be unable to develop alternative solutions or redesign our systems or applications on a timely basis or at a reasonable cost. Ifany of these were to occur, our results of operations could be adversely impacted.7Our ability to sell our products is highly dependent on the quality of our service and support offerings, and our failure to offer high quality service could have amaterial adverse effect on our ability to market and sell our products.Our customers depend upon our customer service and support staff to resolve issues relating to our products. Highquality support services are critical forthe successful marketing and sale of our products. If we fail to provide highquality support on an ongoing basis, our customers may react negatively and we maybe materially and adversely affected in our ability to sell additional products to these customers. This could also damage our reputation and prospects with potentialcustomers. Our failure to maintain highquality support services could have a material and adverse effect on our business, results of operations and financialcondition.Weaknesses in our internal controls over financial reporting or disclosure controls and procedures may have a material adverse effect on our business, theprice of our ordinary shares, operating results and financial condition.We are required to establish and maintain appropriate internal controls over financial reporting and disclosure controls and procedures. Pursuant to Section404 of the SarbanesOxley Act of 2002 and the related rules adopted by the Securities and Exchange Commission, every public company is required to include amanagement report on its internal controls over financial reporting in its transition report, which contains management’s assessment of the effectiveness of thecompany’s internal controls over financial reporting. This requirement first applied to our annual report on Form 20F for the fiscal year ended on September 30,2011. In connection with our assessments of our disclosure controls and procedures and internal controls over financial reporting, management concluded that as ofSeptember 30, 2018, our disclosure controls and procedures and our internal controls over financial reporting were not effective due to lack of U.S. generallyaccepted accounting principles (“U.S. GAAP”) expertise in our current accounting team. Please refer to the discussion under Item 15, “Controls and Procedures” forfurther discussion of our material weakness as of December 31, 2017. Should we be unable to remediate the material weakness promptly and effectively, suchweakness could harm our operating results, result in a material misstatement of our financial statements, cause us to fail to meet our financial reporting obligations orprevent us from providing reliable and accurate financial reports or avoiding or detecting fraud. This, in turn, could result in a loss of investor confidence in theaccuracy and completeness of our financial reports, which could have an adverse effect on the trading price of our ordinary shares. Any litigation or otherproceeding or adverse publicity relating to the material weaknesses could have a material adverse effect on our business and operating results. We have very limited insurance coverage which could expose us to significant costs and business disruption.We do not maintain any insurance coverage for our leased properties. Should any natural catastrophes such as earthquakes, floods, typhoons or any actsof terrorism occur in Beijing, China, where our head office is located and most of our employees are based, or elsewhere in China, we might suffer not onlysignificant property damages, but also loss of revenues due to interruptions in our business operations, which could have a material adverse effect on our business,operating results or financial condition.The insurance industry in China is still at an early stage of development. Insurance companies in China offer limited business insurance products, and donot, to our knowledge, offer business liability insurance. As a result, we do not have any business liability insurance coverage for our operations. Moreover, whilebusiness disruption insurance is available, we have determined that the risks of disruption and cost of the insurance are such that we do not require it at this time.Any business disruption, litigation or natural disaster might result in substantial costs and diversion of resources, particularly if it affects our technology platformswhich we depend on for delivery of our software and services, and could have a material adverse effect on our financial condition and results of operations.We may be liable to our customers for damages caused by unauthorized disclosure of sensitive and confidential information, whether through our employees orotherwise.We are typically required to manage, utilize and store sensitive or confidential customer data in connection with the products and services we provide.Under the terms of our customer contracts, we are required to keep such information strictly confidential. We seek to implement specific measures to protectsensitive and confidential customer data. We require our employees to enter into nondisclosure agreements to limit such employees’ access to, and distribution of,our customers’ sensitive and confidential information and our own trade secrets. We can give no assurance that the steps taken by us in this regard will be adequateto protect our customers’ confidential information. If our customers’ proprietary rights are misappropriated by our employees, in violation of any applicableconfidentiality agreements or otherwise, our customers may consider us liable for that act and seek damages and compensation from us. However, we currently donot have any insurance coverage for mismanagement or misappropriation of such information by our employees. Any litigation with respect to unauthorizeddisclosure of sensitive and confidential information might result in substantial costs and diversion of resources and management attention.8We may face intellectual property infringement claims that could be timeconsuming and costly to defend. If we fail to defend ourselves against such claims, wemay lose significant intellectual property rights and may be unable to continue providing our existing products and services.It is critical that we use and develop our technology and products without infringing upon the intellectual property rights of third parties, includingpatents, copyrights, trade secrets and trademarks. Intellectual property litigation is expensive and timeconsuming and could divert management’s attention from ourbusiness. A successful infringement claim against us, whether with or without merit, could, among others things, require us to pay substantial damages, developnoninfringing technology, or rebrand our name or enter into royalty or license agreements that may not be available on acceptable terms, if at all, and cease making,licensing or using products that have infringed a third party’s intellectual property rights. Protracted litigation could also result in existing or potential customersdeferring or limiting their purchase or use of our products until resolution of such litigation, or could require us to indemnify our customers against infringementclaims in certain instances. Also, we may be unaware of intellectual property registrations or applications relating to our services that may give rise to potentialinfringement claims against us. Parties making infringement claims may be able to obtain an injunction to prevent us from delivering our services or usingtechnology containing the allegedly infringing intellectual property. Any intellectual property litigation could have a material adverse effect on our business, resultsof operations or financial condition. Seasonality and fluctuations in our customers’ spending cycle and other factors can cause our revenues and operating results to vary significantly from quarterto quarter and from year to year.Our revenues and operating results will vary significantly from quarter to quarter and from year to year due to a number of factors, many of which areoutside of our control. Our new lines of business acquired upon the consummation of the asset exchange transaction discussed below see higher customer use andactivity during the Chinese New Year holiday than other times during the year when rail travel is high, which lead to higher revenue during this period as morecustomers would like to place more advertising. Due to these and other factors, our operating results may fluctuate significantly from quarter to quarter and fromyear to year. These fluctuations are likely to continue in the future, and operating results for any period may not be indicative of our future performance in any futureperiod.Our corporate actions are substantially controlled by our principal shareholders, who can cause us to take actions in ways you may not agree with.Mr. Xuesong Song, our chairman, chief executive officer and a member of our board of directors, beneficially owns 19.31% of our outstanding ordinaryshares and 1,000,000 preferred shares, and each preferred share has the right to 399 votes at a meeting of the members of the Company. Our officers and directors asa group beneficially own an aggregate of approximately 33.69% of our outstanding ordinary shares. These shareholders, acting individually or as a group, couldexert control and substantial influence over matters such as electing directors, amending our constitutional documents, and approving acquisitions, mergers or otherbusiness combination transactions. This concentration of ownership and voting power may also discourage, delay or prevent a change in control of our company,which could deprive our shareholders of an opportunity to receive a premium for their shares as part of a sale of our company and might reduce the price of ourshares. Alternatively, our controlling shareholders may cause a merger, consolidation or change of control transaction even if it is opposed by our othershareholders, including those who purchase shares in this offering.9We depend on a small number of customers to derive a significant portion of our revenues. If we were to become dependent again upon a few customers, suchdependency could negatively impact our business, operating results and financial condition.We derived a material portion of our revenues from a small number of customers. In the years ended December 31, 2017 and 2016, our five largestcustomers accounted for 99.8% and 78.5% of our total sales, respectively, and our largest customer Guangdong Zhanshi Media Advertising Co., Ltd. accounted forapproximately 80.8% of our total sales during for the fiscal year ended December 31, 2017. As our customer base may change from yeartoyear, during such yearsthat the customer base is highly concentrated, the fluctuation of our sales to any of such major customers could have a material adverse effect on our business,operating results and financial condition. Moreover, our high customer base concentration may also adversely affect our ability to negotiate contract prices withthese customers, which may in turn materially and adversely affect our results of operations.Our historical outstanding accounts receivable have been relatively high. Inability to collect our accounts receivable on a timely basis, if at all, couldmaterially and adversely affect our financial condition, liquidity and results of operations.Historically, our outstanding accounts receivable have been relatively high. As of December 31, 2017 and 2016, our outstanding accounts receivable beforeimpairment were $10.4 million and $2.10 million, respectively. Although we conduct credit evaluations of our customers, we generally do not require collateral orother security from our customers. In addition, we have had a relatively high customer concentration. The outstanding accounts receivable balance for our largestcustomer was 45.3% and 38.5% of our total accounts receivable balance as of December 31, 2017 and 2016, respectively. As a result, an extended delay or default inpayment relating to a significant account would likely have a material and adverse effect on the aging schedule and turnover days of our accounts receivable. Ourinability to collect our accounts receivable on a timely basis, if at all, could materially and adversely affect our financial condition, liquidity and results of operations.Risks Related to Doing Business in ChinaAdverse changes in political and economic policies of the PRC government could have a material adverse effect on the overall economic growth of China,which could reduce the demand for our services and materially and adversely affect our competitive position.Substantially all of our business operations are conducted in China. Accordingly, our business, results of operations, financial condition and prospects aresubject to a significant degree to economic, political and legal developments in China. Although the Chinese economy is no longer a planned economy, the PRCgovernment continues to exercise significant control over China’s economic growth through direct allocation of resources, monetary and tax policies, and a host ofother government policies such as those that encourage or restrict investment in certain industries by foreign investors, control the exchange between RMB andforeign currencies, and regulate the growth of the general or specific market. These government involvements have been instrumental in China’s significant growthin the past 30 years. The reorganization of the telecommunications industry encouraged by the PRC government has directly affected our industry and our growthprospect. In response to the recent global and Chinese economic downturn, the PRC government has adopted policy measures aimed at stimulating the economicgrowth in China. If the PRC government’s current or future policies fail to help the Chinese economy achieve further growth or if any aspect of the PRCgovernment’s policies limits the growth of the telecommunications industry in China or our industry or otherwise negatively affects our business, our growth rate orstrategy, our results of operations could be adversely affected as a result. Our business benefits from certain government tax incentives. Expiration, reduction or discontinuation of, or changes to, these incentives will increase our taxburden and reduce our net income.Under the PRC Enterprise Income Tax Law passed in 2007 and the implementing rules, both of which became effective on January 1, 2008, or the New EITLaw, a unified enterprise income tax rate of 25% and unified tax deduction standard is applied equally to both domesticinvested enterprises and foreigninvestedenterprises, or FIEs. Enterprises established prior to March 16, 2007 eligible for preferential tax treatment in accordance with the then tax laws and administrativeregulations shall gradually become subject to the New EIT Law rate over a fiveyear transition period starting from the date of effectiveness of the New EIT Law.However, certain qualifying hightechnology enterprises may still benefit from a preferential tax rate of 15% if they own their core intellectual properties and they areenterprises in certain Statesupported hightech industries to be later specified by the government. As a result, if our PRC subsidiaries qualify as “hightechnologyenterprises,” they will continue to benefit from the preferential tax rate of 15%, subject to transitional rules implemented from January 1, 2008. Our subsidiary, BeijingZhong Chuan Shi Xun Technology Limited, is qualified as a “hightechnology enterprise” until the end of the November 2018, and therefore it had benefited fromthe preferential tax rate of 15%, subject to transitional rules implemented on January 1, 2008. Although we intend to apply for a renewal of this qualification, if BeijingZhong Chuan Shi Xun ceases to qualify as a “hightechnology enterprise”, or the tax authorities change their position on our preferential tax treatments in thefuture, our future tax liabilities may materially increase, which could materially and adversely affect our financial condition and results of operations.10If we were deemed a “resident enterprise” by PRC tax authorities, we could be subject to tax on our global income at the rate of 25% under the New EIT Lawand our nonPRC shareholders could be subject to certain PRC taxes.Under the New EIT Law and the implementing rules, both of which became effective January 1, 2008, an enterprise established outside of the PRC with “defacto management bodies” within the PRC may be considered a PRC “resident enterprise” and will be subject to the enterprise income tax at the rate of 25% on itsglobal income as well as PRC enterprise income tax reporting obligations. The implementing rules of the New EIT Law define “de facto management” as “substantialand overall management and control over the production and operations, personnel, accounting, and properties” of the enterprise. However, as of the date of thistransition report, no final interpretations on the implementation of the “resident enterprise” designation are available. Moreover, any such designation, when madeby PRC tax authorities, will be determined based on the facts and circumstances of individual cases. Therefore, if we were to be considered a “resident enterprise”by the PRC tax authorities, our global income would be taxable under the New EIT Law at the rate of 25% and, to the extent we were to generate a substantial amountof income outside of PRC in the future, we would be subject to additional taxes. In addition, the dividends we pay to our nonPRC enterprise shareholders and gainsderived by such shareholders or ADS or ordinary share holders from the transfer of our shares or ADSs may also be subject to PRC withholding tax at the rate up to10%, if such income were regarded as Chinasourced income.Our holding company structure may limit the payment of dividends.We have no direct business operations, other than our ownership of our subsidiaries. While we have no current intention of paying dividends, should wedecide in the future to do so, as a holding company, our ability to pay dividends and meet other obligations depends upon the receipt of dividends or otherpayments from our operating subsidiaries and other holdings and investments. Current PRC regulations permit our PRC subsidiaries to pay dividends to us only outof their accumulated profits, if any, determined in accordance with Chinese accounting standards and regulations. In addition, each of our subsidiaries in China isrequired to set aside at least 10% of its aftertax profits each year, if any, to fund a statutory reserve until such reserve reaches 50% of its registered capital. Thesereserves are not distributable as cash dividends. Furthermore, if our subsidiaries in China incur debt on their own behalf in the future, the instruments governing thedebt may restrict their ability to pay dividends or make other payments to us. As a result, there may be limitations on the ability of our PRC subsidiaries to paydividends or make other investments or acquisitions that could be beneficial to our business or otherwise fund and conduct our business.In addition, under the New EIT Law and the implementing rules that became effective on January 1, 2008, dividends generated from the business of our PRCsubsidiaries after January 1, 2008 and payable to us may be subject to a withholding tax rate of 10% if the PRC tax authorities subsequently determine that we are anonresident enterprise, unless there is a tax treaty with China that provides for a different withholding arrangement.Uncertainties with respect to the PRC legal system could adversely affect us.We conduct all of our business through our subsidiaries in China. Our operations in China are governed by PRC laws and regulations. Our PRCsubsidiaries are generally subject to laws and regulations applicable to foreign investments in China and, in particular, laws and regulations applicable to whollyforeignowned enterprises. The PRC legal system is based on statutes. Prior court decisions may be cited for reference but have limited precedential value.11Since 1979, PRC legislation and regulations have significantly enhanced the protections afforded to various forms of foreign investments in China.However, China has not developed a fully integrated legal system and recently enacted laws and regulations may not sufficiently cover all aspects of economicactivities in China. In particular, because these laws and regulations are relatively new, and because of the limited volume of published decisions and theirnonbinding nature, the interpretation and enforcement of these laws and regulations involve uncertainties. In addition, the PRC legal system is based in part ongovernment policies and internal rules (some of which are not published on a timely basis or at all) that may have a retroactive effect. As a result, we may not beaware of our violation of these policies and rules until some time after the violation. In addition, any litigation in China may be protracted and result in substantialcosts and diversion of resources and management attention.PRC regulation of loans and direct investment by offshore holding companies to PRC entities may delay or prevent us from using the proceeds of our May2010 public offering to make loans or additional capital contributions to our PRC operating subsidiaries, which could materially and adversely affect ourliquidity and our ability to fund and expand our business.In utilizing the proceeds of our May 2010 public offering as an offshore holding company of our PRC operating subsidiaries, we may make loans to our PRCsubsidiaries, or we may make additional capital contributions to our PRC subsidiaries. Any loans to our PRC subsidiaries are subject to PRC regulations. Forexample, loans by us to our subsidiaries in China, which are FIEs, to finance their activities cannot exceed statutory limits and must be registered with the StateAdministration of Foreign Exchange, or SAFE. On August 29, 2008, SAFE promulgated Circular 142, a notice regulating the conversion by a foreigninvestedcompany of foreign currency into RMB by restricting how the converted RMB may be used. The notice requires that RMB converted from the foreign currencydenominated capital of a foreigninvested company may only be used for purposes within the business scope approved by the applicable governmental authorityand may not be used for equity investments within the PRC unless specifically provided for otherwise. The foreign currencydenominated capital shall be verified byan accounting firm before converting into RMB. In addition, SAFE strengthened its oversight over the flow and use of RMB funds converted from the foreigncurrencydenominated capital of a foreigninvested company. To convert such capital into RMB, the foreigninvested company must report the use of such RMB tothe bank, and the RMB must be used to the reported purposes. According to Circular 142, change of the use of such RMB without approval is prohibited. Inaddition, such RMB may not be used to repay RMB loans if the proceeds of such loans have not yet been used. Violations of Circular 142 may result in severepenalties, including substantial fines as set forth in the Foreign Exchange Administration Rules.We may also decide to finance our subsidiaries by means of capital contributions. These capital contributions may need approval from the PRC Ministry ofCommerce, or MOFCOM, or its local counterpart. We may not be able to obtain these government approvals on a timely basis, if at all, with respect to future capitalcontributions by us to our PRC subsidiaries. If we fail to receive such approvals in such cases when approval is required, our ability to use the proceeds of our May2010 public offering and to capitalize our PRC operations may be negatively affected, which could adversely affect our liquidity and our ability to fund and expandour business.Governmental control of currency conversion may affect the value of your investment.The PRC government imposes controls on the convertibility of the RMB into foreign currencies and, in certain cases, the remittance of currency out ofChina. We receive substantially all of our revenues in RMB. Under our current corporate structure, our income is primarily derived from dividend payments from ourPRC subsidiaries. Shortages in the availability of foreign currency may restrict the ability of our PRC subsidiaries to remit sufficient foreign currency to paydividends or other payments to us, or otherwise satisfy their foreign currency denominated obligations. Under existing PRC foreign exchange regulations, paymentsof current account items, including profit distributions, interest payments and expenditures from traderelated transactions, can be made in foreign currencieswithout prior approval from SAFE by complying with certain procedural requirements. However, approval from appropriate government authorities is required whereRMB is to be converted into foreign currency and remitted out of China to pay capital expenses such as the repayment of loans denominated in foreign currencies.The PRC government may also at its discretion restrict access in the future to foreign currencies for current account transactions. If the foreign exchange controlsystem prevents us from obtaining sufficient foreign currency to satisfy our currency demands, we may not be able to pay dividends in foreign currencies to ourshareholders, including holders of our ADSs or ordinary shares.12Fluctuation in the value of the RMB may have a material adverse effect on the value of your investment.The value of the RMB against the U.S. dollar and other currencies may fluctuate and is affected by, among other things, changes in political and economicconditions. On July 21, 2005, the PRC government changed its decadeold policy of pegging the value of the RMB to the U.S. dollar. Under the new policy, the RMBis permitted to fluctuate within a narrow and managed band against a basket of certain foreign currencies. This change in policy has resulted in an approximate26.8% appreciation of the RMB against the U.S. dollar between July 21, 2005 and September 30, 2015. Provisions on Administration of Foreign Exchange, asamended in August 2008, further changed China’s exchange regime to a managed floating exchange rate regime based on market supply and demand. Since reachinga high against the U.S. dollar in July 2008, however, the RMB has traded within a narrow band against the U.S. dollar, remaining within 1% of its July 2008 high butnever exceeding it. As a consequence, the RMB has fluctuated sharply since July 2008 against other freelytraded currencies, in tandem with the U.S. dollar. InAugust 2015, the PRC Government devalued its currency by approximately 3%, representing the largest yuan depreciation for 20 years. Concerns remain thatChina’s slowing economy, and in particular its exports, will need a stimulus that can only come from further cuts in the exchange rate.It is difficult to predict how long the current situation may continue and when and how it may change again as the People’s Bank of China may regularlyintervene in the foreign exchange market to achieve economic policy goals. Substantially all of our revenues and costs are denominated in the RMB, and asignificant portion of our financial assets are also denominated in RMB. We principally rely on dividends and other distributions paid to us by our subsidiaries inChina. Any significant revaluation of the RMB may materially and adversely affect our cash flows, revenues, earnings and financial position, and the value of, andany dividends payable on, our ADSs or ordinary shares in U.S. dollars. Any fluctuations of the exchange rate between the RMB and the U.S. dollar could also resultin foreign currency translation losses for financial reporting purposes.PRC laws and regulations governing our businesses. If we are found to be in violation of such PRC laws and regulations, we could be subject to sanctions. Inaddition, changes in such PRC laws and regulations may materially and adversely affect our business.There are substantial uncertainties regarding the interpretation and application of PRC laws and regulations, including, but not limited to, the laws andregulations governing our business. These laws and regulations are relatively new and may be subject to change, and their official interpretation and enforcementmay involve substantial uncertainty. The effectiveness of newly enacted laws, regulations or amendments may be delayed, resulting in detrimental reliance byforeign investors. New laws and regulations that affect existing and proposed future businesses may also be applied retroactively.The PRC government has broad discretion in dealing with violations of laws and regulations, including levying fines, revoking business and other licensesand requiring actions necessary for compliance. In particular, licenses and permits issued or granted to us by relevant governmental bodies may be revoked at a latertime by higher regulatory bodies. We cannot predict the effect of the interpretation of existing or new PRC laws or regulations on our businesses. We cannot assureyou that our current ownership and operating structure would not be found in violation of any current or future PRC laws or regulations. As a result, we may besubject to sanctions, including fines, and could be required to restructure our operations or cease to provide certain services. In addition, any litigation in China maybe protracted and result in substantial costs and diversion of resources and management attention. Any of these or similar actions could significantly disrupt ourbusiness operations or restrict us from conducting a substantial portion of our business operations, which could materially and adversely affect our business,financial condition and results of operations.13If we were required to obtain the prior approval of the China Securities Regulatory Commission, or CSRC, of the listing and trading of our ADSs on theNASDAQ Capital Market, we may face regulatory actions or other sanctions from the CSRC or other PRC regulatory agencies.On August 8, 2006, six PRC regulatory agencies, including the Ministry of Commerce, the State Assets Supervision and Administration Commission, theState Administration for Taxation, the State Administration for Industry and Commerce, the CSRC and the SAFE, jointly issued the Regulations on Mergers andAcquisitions of Domestic Enterprises by Foreign Investors, which became effective on September 8, 2006 (the “New M&A Rules”). This regulation, among otherthings, includes provisions that purport to require that an offshore special purpose vehicle formed for the purposes of overseas listing of equity interests in PRCcompanies and controlled directly or indirectly by PRC companies or individuals obtain the approval of the CSRC prior to the listing and trading of such specialpurpose vehicle’s securities on an overseas stock exchange. On September 21, 2006, the CSRC published on its official website procedures regarding its approval ofoverseas listings by special purpose vehicles. The CSRC approval procedures require the filing of a number of documents with the CSRC and it would take severalmonths to complete the approval process, if practicable at all. The application of this new PRC regulation remains unclear with no consensus currently existingamong leading PRC law firms regarding the scope of the applicability of the CSRC approval requirement. Prior to our May 2010 initial public offering, our PRC counsel has advised us that, based on its understanding of the current PRC laws and regulations aswell as the procedures announced on September 21, 2006: (i) Softech was directly incorporated by Topsky as a foreign investment enterprise under PRC law;therefore, there was no acquisition of the equity of a “PRC domestic company” as defined under the New M&A Rules; and (ii) the contractual arrangementsbetween Kingtone Information and Softech were not clearly defined and considered as the transaction which shall be applied to the New M&A Rules. Therefore, wedid not seek prior CSRC approval for our initial public offering.However, if the CSRC required that we obtain its approval prior to the completion of our initial public offering and the listing of our ADSs on the NASDAQCapital Market, we may face regulatory actions or other sanctions from the CSRC or other PRC regulatory agencies. These regulatory agencies may impose fines andpenalties on our operations in the PRC, limit our operating privileges in the PRC, delay or restrict the repatriation of the proceeds from our initial public offering intothe PRC, or take other actions that could have a material adverse effect on our business, financial condition, results of operations, reputation and prospects, as wellas the trading price of our shares.Also, if the CSRC requires that we obtain its approval, we may be unable to obtain a waiver of the CSRC approval requirements if and when procedures areestablished to obtain such a waiver. Any uncertainties and/or negative publicity regarding this CSRC approval requirement could have a material adverse effect onthe trading price of our shares.PRC regulations relating to the establishment of offshore special purpose companies by PRC residents may subject our PRC resident shareholders to penaltiesand limit our ability to inject capital into our PRC subsidiaries, limit our PRC subsidiaries’ ability to distribute profits to us, or otherwise adversely affect us.On October 21, 2005, the SAFE issued the Notice on Issues Relating to the Administration of Foreign Exchange in Fundraising and Reverse InvestmentActivities of Domestic Residents Conducted via Offshore Special Purpose Companies, or Notice 75, which became effective as of November 1, 2005. According toNotice 75, prior registration with the local SAFE branch is required for PRC residents to establish or to control an offshore company for the purposes of financingsuch offshore company with assets or equity interests in an onshore enterprise located in the PRC, or an offshore special purpose company. An amendment toregistration or filing with the local SAFE branch by such PRC resident is also required for the injection of equity interests or assets of an onshore enterprise in theoffshore special purpose company or overseas funds raised by such offshore company, or any other material change involving a change in the capital of theoffshore special purpose company. Moreover, Notice 75 applies retroactively. As a result, PRC residents who have established or acquired control of offshorespecial purpose companies that have made onshore investments in the PRC in the past are required to have completed the relevant registration procedures with thelocal SAFE branch by March 31, 2006. To further clarify the implementation of Notice 75, the SAFE issued Circular 106 on May 29, 2007. Under Circular 106, PRCsubsidiaries of an offshore special purpose company are required to coordinate and supervise the filing of SAFE registrations by the offshore holding company’sshareholders or beneficial owners who are PRC residents in a timely manner.14Some of our current shareholders and/or beneficial owners may fall within the ambit of the SAFE notice and be required to register with the local SAFEbranch as required under the SAFE notice. If so required, and if such shareholders and/or beneficial owners fail to timely register their SAFE registrations pursuantto the SAFE notice, or if future shareholders and/or beneficial owners of our company who are PRC residents fail to comply with the registration procedures setforth in the SAFE notice, this may subject such shareholders, beneficial owners and/or our PRC subsidiaries to fines and legal sanctions and may also limit ourability to contribute additional capital into our PRC subsidiaries, limit our PRC subsidiaries’ ability to distribute dividends to our company, or otherwise adverselyaffect our business.Risks Associated with our ADSs and Ordinary SharesOur securities are not currently traded on any United States public markets and you may not be able to resell your securities for some time.There is currently no public market for our ordinary shares or American Depository Shares (“ADSs”) in the United States or in any other jurisdiction. OurADSs were voluntarily delisted from the NASDAQ Capital Market on September 19, 2018. We have applied to NASDAQ for the listing of our ordinary shares on theNASDAQ Capital Market and received an approval for listing of Ordinary Shares on August 6, 2018, and as of the date of this transition report, that application andapproval are currently under review. We cannot assume that our ordinary shares will be accepted for listing on the NASDAQ Capital Market, or if listed, that wewould continue to meet the applicable minimum listing requriements. You may not be able to sell your ordinary shares quickly or at all if we are unable to gain listingon a public market in the United States.The market price of our ADSs has historically been highly volatile, and you may not be able to resell our ordinary shares at or above your initial purchaseprice.There may be a limited public market for our ordinary shares and, as discussed above, our ADSs are no longer listed on any public market in the UnitedStates or any other jurisdiction. We cannot assure you that there will be an active trading market for our ordinary shares in the future. If our ordinary shares areaccepted for listing on a public market, you may not be able to sell your ordinary shares quickly or at the market price if trading in our ordinary shares is not active. The trading price of our ADSs and ordinary shares may be volatile. The price of our ADSs and ordinary shares could be subject to wide fluctuations inresponse to a variety of factors, including the following:1.Introduction of new products, services or technologies offered by us or our competitors;2.Failure to meet or exceed revenue and financial projections we provide to the public;3.Actual or anticipated variations in quarterly operating results;4.Failure to meet or exceed the estimates and projections of the investment community;5.General market conditions and overall fluctuations in United States equity markets;6.Announcements of significant acquisitions, strategic partnerships, joint ventures or capital commitments by us or our competitors;7.Disputes or other developments relating to proprietary rights, including patents, litigation matters and our ability to obtain patent protection for ourtechnologies;8.Additions or departures of key management personnel;9.Issuances of debt or equity securities;10.Significant lawsuits, including patent or shareholder litigation;11.Changes in the market valuations of similar companies;12.Sales of additional ordinary shares or other securities by us or our shareholders in the future;13.Trading volume of our ordinary shares;14.Fluctuations in the exchange rate between the U.S. dollar and Renminbi;15.Negative market perception and media coverage of our company or other companies in the same or similar industry with us; and16.Other events or factors, many of which are beyond our control.15In addition, the stock market in general, and the NASDAQ Capital Market and software products and services companies in particular, have experiencedextreme price and volume fluctuations that have often been unrelated or disproportionate to the operating performance of these companies. Broad market andindustry factors may negatively affect the market price of our ordinary shares, regardless of our actual operating performance. Our ADSs and ordinary shares may be subject to the SEC’s penny stock rules which may make it difficult for brokerdealers to complete customer transactionsand trading activity in our securities.Our ADSs and ordinary shares may be deemed to be “penny stock” as that term is defined under the Securities Exchange Act of 1934, as amended. Pennystocks generally are equity securities with a price of less than $5.00 (other than securities registered on certain national securities exchanges or quoted on theNASDAQ system, provided that current price and volume information with respect to transactions in such securities is provided by the exchange or system). Pennystock rules impose additional sales practice requirements on brokerdealers who sell to persons other than established customers and “accredited investors.” Theterm “accredited investor” refers generally to institutions with assets in excess of $5,000,000 or individuals with a net worth in excess of $1,000,000 or annual incomeexceeding $200,000 or $300,000 jointly with their spouse in each of the prior two years.The penny stock rules require a brokerdealer, prior to a transaction in a penny stock not otherwise exempt from the rules, to deliver a standardized riskdisclosure document in a form prepared by the SEC, which provides information about penny stocks and the nature and level of risks in the penny stockmarket. Moreover, brokerdealers are required to determine whether an investment in a penny stock is a suitable investment for a prospective investor. A brokerdealer must receive a written agreement to the transaction from the investor setting forth the identity and quantity of the penny stock to be purchased. Theserequirements may make it more difficult for brokerdealers to effectuate customer transactions and trading activity in our securities. As a result, the market price ofour ADSs and ordinary shares may be depressed, and you may find it more difficult to sell our ADSs or ordinary shares.Sales of a substantial number of ordinary shares or ADSs in the public market by our existing shareholders could cause the price of our ADSs to fall.Sales of a substantial number of our ordinary shares or ADSs in the public market or the perception that these sales might occur, could depress the marketprice of our ADSs and could impair our ability to raise capital through the sale of additional equity securities. We are unable to predict the effect that sales may haveon the prevailing market price of our ADSs.All of our existing shareholders prior to our May 2010 offering were subject to lockup agreements with the underwriters of the offering that restricted theshareholders’ ability to transfer ordinary shares or ADSs until expiration of the lockup period in November 2010. The lockup agreements limited the number ofordinary shares or ADSs that may be sold immediately following the public offering. Subject to certain limitations, approximately 1,000,000 of our total outstandingshares are now eligible for sale. Sales of ordinary shares by these shareholders could have a material adverse effect on the trading price of our ADSs.Future sales and issuances of our ordinary shares, or rights to purchase our ordinary shares, including pursuant to our 2010 Omnibus Incentive Plan, couldresult in additional dilution of the percentage ownership of our shareholders and could cause the price of our ordinary shares to fall.We expect that significant additional capital will be needed in the future to continue our planned operations. To the extent we raise additional capital byissuing equity securities, our shareholders may experience substantial dilution. We may sell ordinary shares, convertible securities or other equity securities in oneor more transactions at prices and in a manner we determine from time to time. If we sell ordinary shares, convertible securities or other equity securities in more thanone transaction, investors may be materially diluted by subsequent sales. Such sales may also result in material dilution to our existing shareholders, and newinvestors could gain rights superior to our existing shareholders.16We do not intend to pay dividends on our ordinary shares, so any returns will be limited to the value of our ADSs and ordinary shares.We have never declared or paid any cash dividend on our ordinary shares. We currently anticipate that we will retain future earnings for the development,operation and expansion of our business and do not anticipate declaring or paying any cash dividends for the foreseeable future. Any return shareholders willtherefore be limited to the value of their ADSs or ordinary shares.As the rights of shareholders under British Virgin Islands law differ from those under U.S. law, you may have fewer protections as a shareholder.Our corporate affairs will be governed by our memorandum of association and articles of association, the BVI Business Companies Act, 2004, or the BVIAct, of the British Virgin Islands and the common law of the British Virgin Islands. The rights of shareholders to take legal action against our directors, actions byminority shareholders and the fiduciary responsibilities of our directors under British Virgin Islands law are to a large extent governed by the BVI Act and thecommon law of the British Virgin Islands. The common law of the British Virgin Islands is derived in part from comparatively limited judicial precedent in the BritishVirgin Islands as well as from English common law, which has persuasive, but not binding, authority on a court in the British Virgin Islands. The rights of ourshareholders and the fiduciary responsibilities of our directors under British Virgin Islands law are not as clearly established as they would be under statutes orjudicial precedents in some jurisdictions in the United States. In particular, the British Virgin Islands has a less developed body of securities laws as compared to theUnited States, and some states (such as Delaware) have more fully developed and judicially interpreted bodies of corporate law.As a result of all of the above, holders of our ADSs and ordinary shares may have more difficulty in protecting their interests through actions against ourmanagement, directors or major shareholders than they would as shareholders of a U.S. company.British Virgin Islands companies may not be able to initiate shareholder derivative actions, thereby depriving shareholders of the ability to protect theirinterests.British Virgin Islands companies may not have standing to initiate a shareholder derivative action in a federal court of the United States. The circumstancesin which any such action may be brought, and the procedures and defenses that may be available in respect to any such action, may result in the rights ofshareholders of a British Virgin Islands company being more limited than those of shareholders of a company organized in the United States. Accordingly,shareholders may have fewer alternatives available to them if they believe that corporate wrongdoing has occurred. The British Virgin Islands courts are alsounlikely to recognize or enforce against us judgments of courts in the United States based on certain liability provisions of U.S. securities law; and to imposeliabilities against us, in original actions brought in the British Virgin Islands, based on certain liability provisions of U.S. securities laws that are penal in nature.There is no statutory recognition in the British Virgin Islands of judgments obtained in the United States, although the courts of the British Virgin Islands willgenerally recognize and enforce the nonpenal judgment of a foreign court of competent jurisdiction without retrial on the merits.The laws of the British Virgin Islands provide little protection for minority shareholders, so minority shareholders will have little or no recourse if theshareholders are dissatisfied with the conduct of our affairs.Under the law of the British Virgin Islands, there is little statutory law for the protection of minority shareholders other than the provisions of the BVI Actdealing with shareholder remedies. The principal protection under statutory law is that shareholders may bring an action to enforce the constituent documents ofthe corporation, our memorandum of association and articles of association. Shareholders are entitled to have the affairs of the company conducted in accordancewith the general law and the memorandum of association and articles of association.17There are common law rights for the protection of shareholders that may be invoked, largely dependent on English company law, since the common law ofthe British Virgin Islands is limited. Under the general rule pursuant to English company law known as the rule in Foss v. Harbottle, a court will generally refuse tointerfere with the management of a company at the insistence of a minority of its shareholders who express dissatisfaction with the conduct of the company’s affairsby the majority or the board of directors. However, every shareholder is entitled to have the affairs of the company conducted properly according to law and thecompany’s constituent documents. As such, if those who control the company have persistently disregarded the requirements of company law or the provisions ofthe company’s memorandum of association and articles of association, then the courts will grant relief. Generally, the areas in which the courts will intervene are thefollowing: (1) an act complained of which is outside the scope of the authorized business or is illegal or not capable of ratification by the majority; (2) acts thatconstitute fraud on the minority where the wrongdoers control the company; (3) acts that infringe on the personal rights of the shareholders, such as the right tovote; and (4) where the company has not complied with provisions requiring approval of a majority of shareholders, which are more limited than the rights affordedminority shareholders under the laws of many states in the United States.Antitakeover provisions in our memorandum of association and articles of association and our right to issue preference shares could make a thirdpartyacquisition of us difficult.Some provisions of our memorandum of association and articles of association may discourage, delay or prevent a change in control of our company ormanagement that shareholders may consider favorable, including provisions that authorize our board of directors to issue preference shares in one or more seriesand to designate the price, rights, preferences, privileges and restrictions of such preference shares.If you hold our ADSs, you may not have the same voting rights as the holders of our ordinary shares and must act through the depositary to exercise your rights.Holders of our ADSs will not be able to exercise voting rights attaching to the shares evidenced by our ADSs on an individual basis. Holders of our ADSswill appoint the depositary or its nominee as their representative to exercise the voting rights attaching to the shares represented by the ADSs. You may not receivevoting materials in time to instruct the depositary to vote, and it is possible that you, or persons who hold their ADSs through brokers, dealers or other third parties,will not have the opportunity to exercise a right to vote. Upon our written request, the depositary will mail to you a shareholder meeting notice which contains,among other things, a statement as to the manner in which your voting instructions may be given, including an express indication that such instructions may begiven or deemed given to the depositary to give a discretionary proxy to a person designated by us if no instructions are received by the depositary from you on orbefore the response date established by the depositary. However, no voting instruction shall be deemed given and no such discretionary proxy shall be given withrespect to any matter as to which we inform the depositary that (i) we do not wish such proxy given, (ii) substantial opposition exists, or (iii) such matter materiallyand adversely affects the rights of shareholders. We will make all reasonable efforts to cause the depositary to extend voting rights to you in a timely manner, butyou may not receive the voting materials in time to ensure that you can instruct the depositary to vote your ADSs. Furthermore, the depositary and its agents willnot be responsible for any failure to carry out any instructions to vote, for the manner in which any vote is cast or for the effect of any such vote. As a result, youmay not be able to exercise your right to vote and you may lack recourse if your ADSs are not voted as you requested. In addition, in your capacity as an ADSholder, you will not be able to call a shareholders’ meeting.You may not be able to participate in rights offerings and may experience dilution of your holdings as a result.We may from time to time distribute rights to our shareholders, including rights to acquire our securities. However, we may not, and under the depositagreement for the ADSs, the depositary will not, offer those rights to ADS holders unless both the rights and the underlying securities to be distributed to ADSholders are registered under the Securities Act, or the distribution of them to ADS holders is exempted from registration under the Securities Act with respect to allholders of ADSs. We are under no obligation to file a registration statement with respect to any such rights or underlying securities or to endeavor to cause such aregistration statement to be declared effective. In addition, we may not be able to rely on an exemption from registration under the Securities Act to distribute suchrights and securities. Accordingly, holders of our ADSs may be unable to participate in our rights offerings and may experience dilution in their holdings as a result.You may be subject to limitations on transfer of your ADSs.Your ADSs are transferable on the books of the depositary. However, the depositary may close its transfer books at any time or from time to time when itdeems expedient in connection with the performance of its duties. In addition, the depositary may refuse to deliver, transfer or register transfers of ADSs generallywhen our books or the books of the depositary are closed, or at any time if we or the depositary deem it advisable to do so because of any requirement of law or ofany government or governmental body, or under any provision of the deposit agreement, or for any other reason.18We may be a passive foreign investment company, of PFIC, which could lead to additional taxes for U.S. holders of our ADSs or ordinary shares.We do not expect to be, for U.S. federal income tax purposes, a passive foreign investment company, or a PFIC, which is a foreign company for which, inany given taxable year, either at least 75% of its gross income is passive income, or investment income in general, or at least 50% of its assets produce or are held toproduce passive income, for the current taxable year, and we expect to operate in such a manner so as not to become a PFIC for any future taxable year. However,because the determination of PFIC status for any taxable year cannot be made until after the close of such year and requires extensive factual investigation,including ascertaining the fair market value of our assets on a quarterly basis and determining whether each item of gross income that we earn is passive income, wecannot assure you that we will not become a PFIC for the current taxable year or any future taxable year. If we are or become a PFIC, a U.S. holder of our ADSs orordinary shares could be subject to additional U.S. federal income taxes on gain recognized with respect to the ADSs or ordinary shares and on certain distributions,plus an interest charge on certain taxes treated as having been deferred under the PFIC rules. Noncorporate U.S. holders will not be eligible for reduced rates oftaxation on any dividends received from us if we are a PFIC in the taxable year in which such dividends are paid or in the preceding taxable year.If our ordinary shares are listed on the NASDAQ Capital Market and the trading price of our ordinary shares fails to comply with the continued listingrequirements of the NASDAQ Capital Market, we would face possible delisting, which would result in a limited public market for our ordinary shares andmake obtaining future debt or equity financing more difficult for us.Companies listed on NASDAQ are subject to delisting for, among other things, failure to maintain a minimum closing bid price of $1.00 per share for 30consecutive business days. On December 19, 2011, we received a letter from NASDAQ indicating that for the last 30 consecutive business days, the closing bidprice of our ADSs fell below the minimum $1.00 per share requirement pursuant to NASDAQ Listing Rule 5550(a)(2) for continued listing on the NASDAQ CapitalMarket. We regained compliance with the minimum bid price requirement for continued listing set forth in NASDAQ Listing Rule 5550(a)(2), as its ADS with itsunderlying ordinary share has achieved a closing bid price of $1.00 or greater for the 10 consecutive business days from November 6 to November 23, 2012 byimplementing a 1for10 combination, or reverse split of the ordinary shares effective November 6, 2012. When listed, we cannot be sure that the price of our ordinaryshares will comply with this requirement for continued listing on the NASDAQ Capital Market in the future. If we were not able to do so, our ordinary shares wouldbe subject to delisting and would likely trade on the overthecounter market. If our ordinary shares were to trade on the overthecounter market, selling ourordinary shares could be more difficult because smaller quantities of shares would likely be bought and sold, transactions could be delayed, and security analysts’coverage of us may be reduced. In addition, brokerdealers have certain regulatory burdens imposed upon them, which may discourage brokerdealers from effectingtransactions in our ordinary shares, further limiting the liquidity of our ordinary shares. As a result, the market price of our ordinary may be depressed, and you mayfind it more difficult to sell our ordinary shares. Such delisting from the NASDAQ Capital Market and continued or further declines in our share price could alsogreatly impair our ability to raise additional necessary capital through equity or debt financing.ITEM 4. INFORMATION ON THE COMPANY.A . HISTORY AND DEVELOPMENT OF THE COMPANY.OverviewWe are a holding company and conduct our operations through our whollyowned subsidiary named LK Technology Ltd., a British Virgin Islands limitedliability company (“LK Technology”), and its whollyowned subsidiaries, MMB Limited and Mobile Media (China) Limited and their respective subsidiaries, whichhold the rights to deploy WiFi systems on about 700 trains in China, including 290 trains in which WiFi systems have already been installed and are in operation. InMay 2010, we consummated an initial public offering of our American Depository Shares, or ADSs, for gross proceeds of $16 million, and our ADSs were listed onthe NASDAQ Capital Market under the ticker symbol “KONE”. Our ordinary shares are not currently listed on any trading market. Our American Depository Shares(“ADSs”) were voluntarily delisted from the NASDAQ Capital Market on September 19, 2018. We have applied to NASDAQ for the listing of our ordinary shares onthe NASDAQ Capital Market and received an approval for listing of Ordinary Shares on August 6, 2018, and as of the date of this transition report, that applicationand approval are currently under review.19On August 17, 2018, we consummated an asset exchange transaction, pursuant to which we exchanged all issued and outstanding capital stock in TopskyInfoTech Holdings Pte Ltd., the parent of Softech, for the issued and outstanding capital stock of LK Technology (the “Asset Exchange”). In connection with theAsset Exchange, we changed our name on August 20, 2018, and on September 20, 2018, issued to the shareholders of C Media Limited, the former parent of LKTechnology, (i) 185,412,599 of our ordinary shares, par value $0.01 per share and (ii) 1,000,000 of our preferred shares. Upon the consummation of the AssetExchange, we ceased our previous business operations and became a company focused on the provision of WiFi and mobile application products for long distancerail travelers in China.On August 25, 2018, LK Technology entered into a Stock Purchase Agreement (the “Agreement”) with the shareholders (“Shareholders”) of SuperengineHoldings Limited, a limited liability company organized under the laws of the British Virgin Islands (the “Superengine”), pursuant to which LK Technology acquiredall of the issued and outstanding capital stock of Superengine for an aggregate purchase price of US$60 million (the “Purchase Price”), which are paid by theissuance of our Ordinary Shares in an amount equal to the quotient of (x) the Purchase Price divided by (y) the average of the closing prices of the Ordinary Shareson the NASDAQ Capital Market over the 12 months period preceding July 31, 2018. We are a party to the Agreement in connection with the issuance of theOrdinary Shares and certain other limited purposes.Corporate InformationOur principal executive offices are located at LAB32, SOHO 3Q, No 9, Guanghua Road, Chaoyang District, Beijing, People’s Republic of China 100020. Ourwebsite is www.luokung.com. We routinely post important information on our website. The information contained on our website is not a part of this transitionreport.Our agent for service of process in the United States is Worldwide Stock Transfer, LLC, the current transfer agent of the Company, with a mailing address ofOne University Plaza, Suite 505, Hackensack, New Jersey 07601.B. BUSINESS OVERVIEW.We are a Chinabased provider of rail WiFi and mobile application products for long distance travelers in China. Our primary mobile application, theLuoKuang platform, consists of the LuoKuang mobile applications, a series of supporting software at the server end, and railWiFi hardware and equipment on thetrains that we serve. The LuoKuang platform incorporates technology covered by 22 patents and about 34 software copy rights, and serves as a content and servicedistribution platform that is tailored for particular travel stages featuring geographic location and social interaction. The content and services distributed byLuoKuang contain information, entertainment, travel, ecommerce, online to offline (“O2O”), advertisement and marketing features.LuoKuang mainly provides personalized and precise services to long distance travelers in two locations: on the train and at the destination. Based on thetravel environment, the core elements of our users’ needs include staving off boredom on trains and discovering and exploring new locations upon arrival. The mainservices contain entertainment services (videos and audio, digital readings, games specific and tailored to the travel stage) and social services (satisfying thedemand for value discovery of unfamiliar destinations through social interaction among strangers based on locations). As of December 31, 2017, the LuoKuangplatform featured about 38 million users.The setting services on the train focus on providing entertainment content for passengers to pass time during longdistance travel in closed environments.For example, we provide access to long video formats such as movies and TV shows, short videos, music, digital readings and games.20We use the most valuable WiFi location—the train WiFi setting—as the entrance of our LuoKuang platform and mobile applications. Passengers typicallyride trains for longdistance and interprovincial travel purposes. The long periods of monotonous journeys and the cost concerns for roaming traffic fees enable thecombination of entertainment content service needs and WiFi access needs. Our railWiFi becomes a valuable and sophisticated WiFi service in this setting—notjust WiFi connection service, but a provider of sophisticated services through a WiFi connection. In addition, the annual traffic of 800,000 passengers onboardeach train makes rail WiFi a huge entry point for mobile applications. We do not define ourselves as a train WiFi communication service operator but as a longdistance travel mobile service provider. We provide users with free WiFi access so that users are able to connect to the LuoKuang platform and thus access relatedentertainment services, services on the train and destination services. The rail WiFi is our access point to a significant pool of users and the entrance to acquiringadditional users.The setting services focus on providing targeted push services to users while travelling in unfamiliar cities. Information and service guidance are preciselypushed to appeal to the interests and tastes (eating, drinking, shopping, touring and culture) of individual users (cuisine specialties and local snacks, local events,viewing sights, culture, history, stories). The service guidance is generated, shared and distributed by individual users (travelers, local residents, local businesses)interacting with current locations and featuring users who generated contents from selfmedia and small and medium vertical contents providers).Based on the GIS (geoinformation system), Superengine is a provider of big spatialtemporal data, network graphic image technology and relevant service.Its super engine series includes computer graphic image engines and spatial database engines. Spatialtemporal cloud index is the core of the company’s spatialtemporal data engines. It is equivalent to the neural network of the big data and the Internet. It extends the value of its products and platform to its data serviceproviders. In cooperation, its service providers can be divided into three categories, namely, basic geographic data providers, industrial data providers andbehavioral data providers). Superengine’s industriesoriented spatialtemporal data engine was launched in 2016. The spatialtemporal GIS platform has been appliedin industries such as aerospace, power grid, surveying & mapping, agriculture, cultural relic preservation, water conservancy, public security, railway section, smartcities, and business location selection.Our primary sources of revenue are advertising and marketing promotion revenues.Our Industry — Mobile Internet IndustryOur products and services are engaged in the mobile internet industry. Our main services consist of entertainment services (videos, audio, digital readings,games that are tailormade for passengers on train) and other services including satisfying the demand for value discovery of unfamiliar destinations through socialinteractions among strangers based in such locations). The mobile internet industry in China is rapidly growing and is likely to be in a longterm growth trend.According to the Mobile Internet Blue Book of China Mobile Internet Report, in 2017 the market size of China mobile internet reached RMB 605 billion. Now China isin a leading position in terms of smartphone, mobile communication network and mobile application services. The pool of users is anticipated to keep expandingthrough the promotion and popularization of smartphones and the expansion of the mobile internet market.Video is the leading online entertainment format in China. According to the iResearch Report, over 80% of total time spent by users on online entertainmentin China in 2016 was internet video. Online entertainment, especially internet video, is attractive to Chinese users due to many favorable factors, including easyaccessibility, wide content selection, and innovative platforms with social features.For 2017, the transaction volume of China mobile ecommerce market reached to over RMB 4 trillion according to the China Mobile Ecommerce IndustryResearch Report from iResearch, representing an increase of 19.1%. For the next few years, China mobile online shopping will likely maintain steady growth. Thefocal point of competition in China mobile ecommerce market has shifted from infrastructure service providers to integrated and accurate services providers.Drawing in users with compelling content in diversified scenes has become a trend.21The revenue for China mobile gaming industry reached RMB 144.58 billion for the year of 2017, according to the China Mobile Game Industry ResearchReport from iResearch. With increased investment by largescale enterprises in the sector of mobile games and the strict enforcement of the mobile game industryrelated regulatory policy guidelines, the mobile game market as a whole will become more organized and standardized.According to the Annual Analysis of China Mobile Reading Industry from Analysis, for the year of 2017, the mobile reading market in China reached toRMB 14.04 billion. By the end of 2016, the size of China mobile's reading market reached RMB 11.86 billion, showing an increase of 18.38% in 2017.The closed and boring environment for passengers of longdistance travel and high roaming charges lead to a strong demand to use our rail WiFi services.Passengers, through their own mobile phone, have access to the free WiFi network in each carriage, access to our rich mobile internet entertainment content andtravel services. According to the annual statistical bulletin of China Railway Corporation in 2017, there were about 6,030 trains in operation in China in 2017,consisting of 2,935 high speed trains and 3,095 express trains. The rail WiFi system that we have installed are currently all on express trains. The market value will bemultiplied several times following the extended coverage of service on other trains.Our StrengthsWe believe the following strengths differentiate us from our competitors:Our strategy is to build up personalized and targeted service products for travelers through rail WiFi networks, enabling our services to evolve into a coredriving distribution platform that provides content, news, games, ecommerce, OTO service, travel services and advertising and marketing. In comparison, ourcompetitors offer simple forms of media services on trains. We focus on personalized and targeted matching between users on long distance trips and services. Ourcompetitors focus on operating and generating internet traffic.We possess a complete set of technology system including network, client end and service and operation platform. We have patent protections for WiFiequipment on trains. Our technology strengths are briefly summarized below.WiFi EquipmentPatent protected. Supports WiFi/3G/4G telecom modules; 4 core CPU with X86 architecture, and SSD hard disk with big storage for localcontents.InfrastructureThe technology infrastructures include the application program system, big data gathering and processing systems, intelligence cloudsservice deployment structure systems and our WiFi hardware server deployment structure system. The operation center, big data center,contents center and railWiFi server system are built on this infrastructure. On the above layer, the equipment management platform,account and payment platform, contents management platform and advertisement distribution platform are set up for daily managementpurpose.LuoKuang strengthens the connection of services among people, setting and locations. In catering to people on the move, we anticipate strengthening therelationship between users and their locations in a given moment. Currently, LuoKuang provides the link between users and thirdparty service providers andprovides value added services to both users and thirdparty service providers. The connection is not simply a traffic diversion, but also the direct presentation ofrelevant services in the LuoKuang platform. The open API interface and independent product software package allows easy access by service providers anddevelopers and supports data service, advertisement operations, billing, users promotion and product marketing services. As an API product, LuoKuang does notcreate content or services. The content and services are provided by our partners in the LuoKuang platform. Now, the majority of top mobile internet content andservices providers in China have a presence in the Luokuang platform. Those include, but are not limited to, Toutiao, Wangyi News, iqiyi, Letv, YoudianCinema(Hollywood films), Sohu video, Phoenix Video, Kugou Music, FM Qingting, iReader, Baidu Literature, Phoenix Novel, Baidu Game, Meituan, Dianping, andsimilar content providers.22Our StrategyLuoKuang is positioned to provide API interface services and geographic information social services. The API interface services are provided within thetypical BC model. LuoKuang pushes the content and services from thirdparty service providers to users. The local businesses, service practitioners, residents, andforeign travelers are all defined as a “user” and may participate in social interactions based on local value information and generate UGC content. The socalled localvalue information is defined as information, views, evaluations, experiences and experience sharing related to the local cultural scene, native products,entertainment, food, tourism and activities.The LuoKuang user growth strategy is to have access to users through the travelers’ use of mobile devices in connection with longdistance train travel.Through deploying WiFi systems on trains and providing free WiFi access to passengers, LuoKuang is able to have consistent access to longdistance travelers.The WiFi system on the train has become a powerful user portal at the early stage of LuoKuang and has gained substantial user traffic. We are in a leading positionin terms of numbers of trains contracted and trains in operation with our free WiFi system. We have contracted with about 700 trains, which cover almost 560 millionannual passenger trips. As of the date of this report, approximately 290 trains are operating our rail WiFi system. We will continue to install our rail WiFi system inthe following years.The development strategy for LuoKuang encompasses the following:1.Enhance our local cycle service (a recommendation service system based on the location of travelers after their arrival, recommendations includingtourist attractions, local specialties and other items of interest), strengthen services for arrivals in the form of social interaction and focus on the valueof relationships between users and their current locations.2.Focus on the development of geographic positioning technology. Get the business of local cycle and users on train mixed together. We will put oureffort to maximize the synergy effect.3.Big Data: Behavior data about passenger trips is obtained via the traffic entrance of rail WiFi and these data will help to optimize our product.4.While enhancing setting service experiences and optimizing entertainment experiences, we will enrich ecommerce services on trains featuringrecommendations of customized products and ecommerce shopping guidance of products labeled with specific geographic location (and trafficdiversion).5.Focus on API positioning and attract more premium vertical service providers (contents and services).Intellectual PropertyWe have registered the following software copyrights, patents and trademarks for our business operations. We believe this intellectual property forms anintegral part of our competitive strength.23Patents:We have been granted some inventions by the State Intellectual Property Office of PRC. We possess a complete set of technology system includingnetwork, client end and service and operation platform. We have patent protections for WiFi equipment on trains. We have received the following patents:No.Name of patentTypeRegistrationNumberDate of Insurance1.Wireless communication multimedia chip business consumer informationacquisition terminal deviceInventionZL 2010 2 0528767.9Sep 21, 20112.A user behavior processing method and device for intelligent terminalInventionZL 2013 1 0301728.3May 27, 20153.A global positioning system terminal deviceInventionZL 2010 2 0253452.8Nov 7, 20114.A wireless multimedia serverInventionZL 2013 2 0220183.9Nov 13, 20135.Ordering system of passengers on trainInventionZL 2015 2 0095381.6Aug 5, 20156.A wireless multimedia serverInventionZL 2015 2 0201382.4Oct 28, 20157.An antenna structureInventionZL 2016 2 0424352.4Mar 1, 20178.Spatial data progressive transmission method and deviceInvention201010617383.9Jun 15, 20169.Methods and devices for conflict detection and avoidance of spatial entity elementlabelingInvention201010617385.8Mar 26, 201410.Spatial data processing method and deviceInvention201010617399.XJun 26, 201311.Method and device of spatial data simplificationInvention201010617400.9Mar 13, 201312.Method and device for judging the occlusion type of space entityInvention201010617403.2Sep 25, 201313.A method and device for distributed mapping of 3d model dataInvention201110274924.7Mar 26, 201414.Data simplification of 3d model, gradual transmission method and deviceInvention201110275336.5Mar 25, 201515.Spatial data transmission method and deviceInvention201110306393.5Dec 13, 201416.Methods and devices for spatial data processing, simplification and progressivetransmissionInvention201210104250.0Jun 10, 201517.Spatial data progressive transmission method and deviceInvention201310367021.2Jun 23, 201718.Simplification method and device of spatial dataInvention201310367128.7Sep 22, 201719.The method and device to accelerate transmission and display of graphic dataacross platformsInvention201210116149.7Aug 10, 201620.Methods and devices related to spatial data compression, decompression andprogressive transmissionInvention201310136682.4Nov 10, 2017We also have two patents outside of China.No.Name of patentCountryNationalRegistrationNumberDate ofInsurance1.Spatial data processing method and deviceJapan2012547439Jun 20, 20142.Methods and devices related to spatial data compression, decompression andprogressive transmissionU.S.A14/394,610Sep 5, 201724Software Copyrights:We have received the following software copyrights from the National Copyright Administration (“NCA”) of PRC:No.Name of CopyrightAchievement approachRegistration numberTime of obtainExpire time1.WAP PUSH Business operation platformsystemIndependent research anddevelopment2007SRBJ1464Jul 23, 200750 years2.TDSCDMA Streaming media businessmanagement platform software V1.0Independent research anddevelopment2009SRBJ0412Jan 22, 200950 years3.Content management platform systemsoftware V1.0Independent research anddevelopment2009SRBJ1374Apr 1, 200950 years4.Mobile multimedia broadcast electronicservice guide system software V1.0Independent research anddevelopment2009SRBJ1365Apr 1, 200950 years5.Mobile video business operation platformsystem V1.0Independent research anddevelopment2007SRBJ1463Jul 23, 200750 years6.Mobile multimedia broadcast emergencybroadcast platform software V1.0Independent research anddevelopment2010SRBJ0720Mar 5, 201050 years7.Mobile multimedia broadcast audio richmedia interactive platform softwareV1.0Independent research anddevelopment2010SRBJ0719Mar 5, 201050 years8.Printer typesetting and printing softwareV1.0Independent research anddevelopment2011SRBJ4190Sep 28, 201150 years9.Electronic newspaper business supportplatform software V1.0Independent research anddevelopment2011SRBJ4186Sep 28, 201150 years10.Public information business platformsoftware V1.0Independent research anddevelopment2011SRBJ3810Sep 27, 201150 years11.User interface scripting software V1.0Independent research anddevelopment2011SRBJ3809Sep 27, 201150 years12.Integrated business management platformsoftware V1.0Independent research anddevelopment2012SR003002Jan 16, 201250 years13.Interactive business development platformsoftwareIndependent research anddevelopment2011SRBJ4593Nov 29, 201150 years14.Instant messaging and messaging systemsoftwareIndependent research anddevelopment2014SR122231Aug 5, 201450 years15.General statistical platform software forclient productsIndependent research anddevelopment2014SR216662Dec 30, 201450 years16.CMMB Data broadcast managementplatform softwareIndependent research anddevelopment2009SRBJ0391Jan 22, 200950 years17.Integrated passenger train service systemIndependent research anddevelopment2012SR083665Sep 5, 201250 years25No.Name of CopyrightAchievement approachRegistration numberTime of obtainExpire time18.JHBY Train inspection managementsystemIndependent research anddevelopment2013SR015105Feb 21, 201350 years19.Integrated information engine platformsoftware V1.0Independent research anddevelopment2014SR040347Nov 30, 200150 years20.Super information engine developmentplatform software V5.0Independent research anddevelopment2014SR036792Mar 5, 200350 years21.Core map super network informationengine platform software V1.0Independent research anddevelopment2014SR036772Sep 15, 200750 years22.Integrated management of the grid gissoftware V1.0Independent research anddevelopment2014SR036808Jun 20, 200850 years23.Core map rural power grid equipment GPSpatrol system software V1.0Independent research anddevelopment2014SR036810Dec 10, 200850 years24.Diagram grid patrol PDA system softwareV1.0Independent research anddevelopment2014SR036778Dec 12, 200850 years25.Core map geographic information enginedesktop platform software V1.0Independent research anddevelopment2014SR036614Jan 15, 200950 years26.Integrated management of the gridgeographic information Web systemsoftware V1.0Independent research anddevelopment2014SR036799Mar 10, 200950 years27.Core map railway power supply equipmentGPS patrol system software V1.0Independent research anddevelopment2014SR036783Mar 25, 201050 years28.Core map network 3 d map server softwareV1.0Independent research anddevelopment2014SR036788Feb 20, 201150 years29.Core map network 3d map clientsoftwareV1.0Independent research anddevelopment2014SR036637Feb 22, 201150 years30.Core map 3d map network publishingplatform software V1.0Independent research anddevelopment2014SR036633Mar 10, 201150 years31.Core map 3d map network release pluginsystem software V1.0Independent research anddevelopment2014SR036622Mar 15, 201150 years32.Core map network 3d map smartphoneplatform software V1.0Independent research anddevelopment2014SR036638Apr 28, 201150 years33.Core map network GIS Shared mobileplatform software V1.0Independent research anddevelopment2014SR036634Oct 31, 201150 years34.Core map network GIS sharing platformsoftware V1.0Independent research anddevelopment2014SR036639Dec 16, 201150 yearsTrademarks:We have registered the following trademarks with the Trademark Office, State Administration for Industry and Commerce in the PRC:NoTrademarkClassification NumberValid PeriodRegistration Number1Y图形382010.04.212020.04.2067460692Y图形412010.09.072020.09.0667460673YRADIO文字352010.07.212020.07.2067334374YRADIO文字382010.04.21.2020.04.2067334385YRADIO文字412010.09.072020.09.0667334396LookLook图形382009.04.072019.04.0646660517LookLook图形422008.12.212018.12.2046660508YTV文字352010.07.212020.07.2067335799YTV文字382010.05.282020.05.27673357810YTV文字412010.09.072020.09.06673358111YTV文字422010.09.072020.09.06673358012YOUTV文字352010.07.212020.07.20673344013YOUTV文字382010.05.282020.05.27673344114xfeng文字352012.03.282022.03.27922914526NoTrademarkClassification NumberValid PeriodRegistration Number15xfeng文字382012.03.282022.03.27922916016xfeng文字412012.03.282022.03.27922919017xfeng文字422012.03.282022.03.27922922118中传视讯文字+图形422008.12.212018.12.20466604719中传视讯文字422008.12.212018.12.20466604820中传视讯文字382008.12.212018.12.20466604921新蜂文字382011.08.212021.08.20853890722新蜂文字422012.01.282022.01.27853907823新蜂.潮文字382011.08.212021.08.20853910424新蜂.潮文字422012.01.282022.01.27853914125新影力412014.08.282024.08.271228864326小人图形352014.08.282024.08.271228798527小人图形382014.08.282024.08.271228858028小人图形412014.08.282024.08.271228862929小人图形422014.08.282024.08.271228843530中传文字382014.08.282024.08.271228826731中传图形382014.08.282024.08.271228828932中童文字412014.08.072024.08.061221408533中童在线文字412014.08.072024.08.061221409234翠鸟文字382014.08.072014.08.061221405835翠鸟文字422014.08.072014.08.061221412536爱翠鸟文字382014.08.072024.08.061221406637爱翠鸟文字412014.08.072024.08.061221409638爱翠鸟文字422014.08.072024.08.061221412639翠鸟图形352014.08.072024.08.061221404040翠鸟图形382014.08.072024.08.061221407441翠鸟图形412014.08.072024.08.061221410042翠鸟图形422014.08.072024.08.061221413143信号小喇叭图形+CMEDIA412015.03.212025.03.201248043944LookLook图形382015.11.142025.11.131153342845LookLook图形422014.06.212024.06.201153372046LookLook文字382014.07.142024.07.131153406747LookLook文字422014.04.142024.04.131153422748L图形352014.02.282024.02.271153500249L图形382014.02.282024.02.271153507350L图形412014.02.282024.02.271153518151L图形422014.02.282024.02.271153526252箩筐图形412016.06.142026.06.131658022853箩筐图形422016.06.142026.06.131658022754箩筐文字422016.09.282026.09.271658024955箩筐文字412016.06.142026.06.131658025056箩筐文字352016.09.212026.09.201658025257箩筐文字92016.06.142026.06.131658025327NoTrademarkClassification NumberValid PeriodRegistration Number58箩筐图形382016.06.142026.06.131658022959箩筐图形352016.06.142026.06.131658023060箩筐图形92016.06.142026.06.131658023161微时光文字422016.09.282026.09.271658024762传游录屏文字92016.06.142026.06.131678214463传游录屏文字352016.06.142026.06.131678214364传游录屏文字382016.06.142026.06.131678214265传游录屏文字412016.06.142026.06.131678214166传游录屏文字422016.06.142026.06.131678214067录游器文字92016.06.142026.06.131678213568录游器文字352016.06.142026.06.131678213669录游器文字382016.06.142026.06.131678213770录游器文字412016.06.142026.06.131678213871录游器文字422016.06.142026.06.131678213972畅联TV文字412016.01.212026.01.201579246773畅联TV文字382016.01.212026.01.201579246874SuperEngine92016.01.212026.01.20812572275SuperEngine422016.01.212026.01.20812572876超擎9/422016.01.212026.01.201647320577SUPERENGINE9/422016.01.212026.01.2016473185*See below for an explanation of each classification number used in the table above.Classification No. 9: data processing apparatus, couplers (data processing equipment), computer software (recorded), monitors (computer programs), smartcards (integrated circuit cards), electrodynamic apparatus for the remote control of signals, alarms, and electric installations for the remote control of industrialoperations.Classification No. 35: auctioneering, sales promotion for others, marketing analysis, marketing research, importexport agencies, advisory services forbusiness management, business management for franchise, personnel management consultancy, relocation services for businesses, and systemization ofinformation into computer databases.Classification No. 38: Include services that enable at least sensory communication between two people. Such services include that allow one person to talkto another, send messages from one person to another, Make verbal or visual contact between one person and the other. This classification especially include theservice for broadcasting radio or television programs. Except for radio advertising services and telemarketing services.Classification No. 41: instruction services, teaching, education information, tuition, arranging and conducting of colloquiums, publication of electronicbooks and journals online, amusements, and vocational guidance.Classification No. 42: technical research, studies (technical project), computer software design, updating of computer software, recovery of computer data,computer systems analysis, installation of computer software, computer antivirus protection, and research and development for others. 28Business Certificates and QualificationsWe have obtained all necessary regulatory certifications to conduct our business in the PRC, including without limitation, the following: SoftwareEnterprise Recognition Certificate, Computer Information System Integration Qualification Certificate, Construction Enterprise Qualification Certificate, and SecurityTechnology & Protection Enterprise Certificate. We have also been properly certified as a hightech enterprise and have met the ISO 9001:2000 qualificationmanagement system.Legal ProceedingsAlthough we may, from time to time, be involved in litigation and claims arising out of our operations in the normal course of business, we do not believethat we are a party to any litigation that will have a material adverse impact on our financial condition or results of operations. To our knowledge, other than asdescribed below there are no material legal proceedings threatened against us. From time to time, we may be subject to various claims and legal actions arising in theordinary course of business. Following the consummation of the AEA, we became successor in interest to the legal proceedings described below.Litigation with Shanghai Fusheng Weier Intelligent Control Technology Co., Ltd.On January 22, 2016, Zhong Chuan Rui You and Shanghai Fusheng Weier Intelligent Control Technology Co., Ltd. (“Fusheng Weier”) signed a contract forequipment of $1,652,842 (RMB10,800,000). Since Zhong Chuan Rui You did not make the payments of $1,126,381 (RMB7,360,000) on the due dates, Fusheng Weierfiled a lawsuit against Zhong Chuan Rui You in Shanghai Xuhui District People's Court on October 8, 2016. On March 9, 2017, Xuhui District People's Court issuedthe verdict requiring Zhong Chuan Rui You to pay the overdue debts. In August 2017, C Media Limited made the payment of $512,075 (RMB3,346,000). Theremaining balance has been accrued in accounts payable. The payment schedule for the remaining balance is being negotiated by the two parties. On February 5,2018, a hearing was held adding Zhong Chuan Shi Xun as a defendant. The Group plans to settle the remaining balance within one year.Lawsuit with Gansu Jinlun Culture Media Co., Ltd.On August 22, 2014, Zhong Chuan Rui You and Gansu Jinlun Culture Media Co., Ltd. (“Gansu Jinlun”) signed a “Lanzhou Railway Bureau AirconditionedTrain WiFi Network System Advertising Operation Rights Agreement” for advertising on 72 trains of $1,467,880 (RMB9,604,633). Due to the dispute on theproject implementation, Zhong Chuan Rui You did not pay the advertising fee. On August 23, 2017, Gansu Jinlun filed a lawsuit with Gansu Intermediate People'sCourt. On December 19, 2017, Gansu Intermediate People's Court issued a verdict, ruling that Zhong Chuan Rui You settle the overdue advertising fee. Since only 18out of 72 trains have been installed with Wifi network system, Zhong Chuan Rui You disputed and appealed to the verdict. The next court trial date has not yet beendetermined.C Media and Gansu Jinlun are negotiating a potential settlement to resume the contract. According to the legal counsel, it is probable that the settlementwill amount to approximately $459,000 (RMB3,000,000); therefore, this amount has been accrued in accounts payable as at December 31, 2017.Litigation with Shenzhen Hua Xun Fang Zhou Technology Co., Ltd.On June 16, 2015, Zhong Chuan Rui You signed a cooperation agreement with Shenzhen Hua Xun Fang Zhou Technology Co., Ltd. (“Shenzhen Hua Xun”)and Xuesong Song, a major shareholder of C Media Limited. Pursuant to this agreement, Zhong Chuan Rui You procures equipment from Shenzhen Hua Xun.Xuesong Song acts as a joint liability guarantor for the entire debts of Zhong Chuan Rui You under this agreement. As Zhong Chuan Rui You did not make thepayments on the due dates, Shenzhen Hua Xun filed a lawsuit with Shenzhen Baoan District People's Court on May 31, 2016. On November 1, 2016, Zhong ChuanRui You, Xuesong Song and Shenzhen Hua Xun reached a settlement in Shenzhen Baoan District People's Court to settle $1,735,389 (RMB11,355,000) in fourinstalments. On December 30, 2017, the debt was assigned to C Media Limited.29C. ORGANIZATIONAL STRUCTUREThe following diagram illustrates our corporate structure and the place of formation and affiliation of each of our subsidiaries and affiliates as of September30, 2018.30The following diagram illustrates our corporate structure and the place of formation and affiliation of each of our subsidiaries and affiliates as of December31, 2017.Contractual Arrangements with Beijing Zhong Chuan Shi Xun Technology Limited’s Subsidiaries and Their Respective ShareholdersTo comply with the PRC legal restrictions on foreign ownership of companies that operate mobile application services, our subsidiaries operate in suchrestricted service areas in the PRC through certain PRC domestic companies, whose equity interests are held by certain management members or founders of the LKTechnology Ltd. Part of the registered capital of these PRC domestic companies was funded by certain management members or founders of LK Technology Ltd. LKTechnology Ltd., through its subsidiary Zhong Chuan Tian Xia Information and Technology (Shenzhen) Limited (the “WFOE”), has entered into an exclusivebusiness cooperation agreement with Beijing Zhong Chuan Shi Xun Technology Limited (“Zhong Chuan Shi Xun” or the “VIE”) the PRC domestic company, whichentitle the WFOE to receive a majority of profit of Zhong Chuan Shi Xun. In addition, Zhong Chuan Tian Xia Information and Technology (Shenzhen) Limited hasentered into certain agreements with those management members or founders, including equity interest pledge agreement of the equity interests held by thosemanagement members or founders and exclusive option agreement to acquire the equity interests in these companies when permitted by the PRC laws, rules andregulations. Details of the typical VIE structure of our significant consolidated VIE, primarily domestic companies associated with the operations such as ZhongChuan Shi Xun and its subsidiaries of Zhong Chuan Rui You, Huoerguosi Luokuang and Jiu Zhou Shi Dai, are set forth below: Exclusive Business Cooperation AgreementThe VIE has entered into an exclusive business services agreement with the WFOE, pursuant to which the WFOE provides exclusive business services tothe VIE. In exchange, the VIE pays a service fee to the WFOE which amounts to be no less than the 80% of the VIE’s aftertax profit, resulting in a transfer ofsubstantially all of the profits from the VIE to the WFOE.Exclusive Option AgreementThe VIE equity holders have granted the WFOE exclusive call options to purchase their equity interest in the VIE at an exercise price equal to the minimumprice as permitted by applicable PRC laws. The WFOE may nominate another entity or individual to purchase the equity interest, if applicable, under the call options.Each call option is exercisable subject to the condition that applicable PRC laws, rules and regulations do not prohibit completion of the transfer of the equityinterest pursuant to the call option. The VIE agrees not to distribute any dividends to the VIE equity holders without the approval of WFOE.31Equity Interest Pledge AgreementPursuant to the equity pledge agreement, the VIE equity holders have pledged all of their interests in the equity of the VIE as a continuing first prioritysecurity interest in favor of the WFOE to secure the performance of obligations by the VIEs and/or the equity holders under the exclusive business cooperationagreement. The WFOE is entitled to exercise its right to dispose of the VIE equity holders’ pledged interests in the equity of the VIE and has priority in receivingpayment by the application of proceeds from the auction or sale of such pledged interests, in the event of any breach or default under the exclusive businesscooperation agreement, if applicable. These equity pledge agreement remain in force until all the obligations under the exclusive business cooperation agreementhave been fulfilled.The exclusive business cooperation agreement and equity interest pledge agreement described above also enable the Company to receive substantially allof the economic benefits from the VIE by typically entitling the WFOE to all dividends and other distributions declared by the VIE and to any distributions orproceeds from the disposal by the VIE equity holders of their equity interests in the VIE.D. PROPERTY AND EQUIPMENTWe lease offices located at Lab 30 & Lab 32, SOHO 3Q, No 9, Guanghua Road, Chaoyang District, Beijing, which covers a floor space of 600 square meters.These leases expire at different times throughout 2018 and are renewable upon negotiation.ITEM 4A. UNRESOLVED STAFF COMMENTSNone.ITEM 5. OPERATING AND FINANCIAL REVIEW AND PROSPECTSA . OPERATING RESULTS.The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our consolidatedfinancial statements and the notes to those financial statements appearing elsewhere in this report. This discussion and analysis contains forwardlookingstatements that involve significant risks and uncertainties. As a result of many factors, such as our anticipated growth strategy, our plans to recruit moreemployees, our plans to invest in research and development to enhance our product or service lines, our future business development, results of operations andfinancial condition, expected changes in our net revenues and certain cost or expense items, our ability to attract and retain customers, trends and competitionin the enterprise mobile software application market, and the factors set forth elsewhere in this report, our actual results may differ materially from thoseanticipated in these forwardlooking statements. In light of those risks and uncertainties, there can be no assurance that the forwardlooking statementscontained in this report will in fact occur. You should not place undue reliance on the forwardlooking statements contained in this report.The forwardlooking statements speak only as of the date on which they are made, and, except to the extent required by U.S. federal securities laws, weundertake no obligation to update any forwardlooking statement to reflect events or circumstances after the date on which the statement is made or to reflectthe occurrence of unanticipated events. Further, the information about our intentions contained in this report is a statement of our intention as of the date of thisreport and is based upon, among other things, the existing regulatory environment, industry conditions, market conditions and prices and our assumptions as ofsuch date. We may change our intentions, at any time and without notice, based upon any changes in such factors, in our assumptions or otherwise.32Unless the context otherwise requires, all references to (i) “PRC” and “China” are to the People’s Republic of China; (ii) “U.S. dollar,” “$” and “US$”are to United States dollars; and (iii) “RMB”, “Yuan” and Renminbi are to the currency of the PRC or China.OverviewLuokung Technology was incorporated on October 27, 2009 under the laws of the British Virgin Islands. We are a holding company and conduct ouroperations through LK Technology Ltd., a British Virgin Islands limited liability company (“LK Technology”) and its whollyowned subsidiaries, MMB Limited andMobile Media (China) Limited and their respective subsidiaries and a contractuallycontrolled entity in the PRC named Beijing Zhong Chuan Shi Xun Technology,which hold the rights to deploy WiFi systems on about 700 trains in China, including 290 trains in which WiFi systems have already been installed and are inoperation. In May 2010, we consummated an initial public offering of our American Depository Shares, or ADSs, for gross proceeds of $16 million, and our ADSswere listed on the NASDAQ Capital Market under the ticker symbol “KONE”. Our ordinary shares are not currently listed on any trading market. Our AmericanDepository Shares (“ADSs”) were voluntarily delisted from the NASDAQ Capital Market on September 19, 2018. We have applied to NASDAQ for the listing of ourordinary shares on the NASDAQ Capital Market and received an approval for listing of Ordinary Shares on August 6, 2018, and as of the date of this transitionreport, that application and approval are currently under review.On August 17, 2018, we consummated an asset exchange transaction, pursuant to which we exchanged all issued and outstanding capital stock in TopskyInfoTech Holdings Pte Ltd., the parent of Softech, for the issued and outstanding capital stock of LK Technology (the “Asset Exchange”). In connection with theAsset Exchange, we changed our name on August 20, 2018, and on September 20, 2018, completed the issuance to the shareholders of C Media Limited, the formerparent of LK Technology, of (i) 185,412,599 of our ordinary shares, par value $0.01 per share and (ii) 1,000,000 of our preferred shares. Upon the consummation of theAsset Exchange, we ceased our previous business operations and became a company focused on the provision of WiFi and mobile application products for longdistance travelers in China.On August 25, 2018, LK Technology entered into a Stock Purchase Agreement (the “Agreement”) with the shareholders (“Shareholders”) of SuperengineHoldings Limited, a limited liability company organized under the laws of the British Virgin Islands (the “Superengine”), pursuant to which LK Technology acquiredall of the issued and outstanding capital stock of Superengine for an aggregate purchase price of US$60 million (the “Purchase Price”), which are paid by theissuance of our Ordinary Shares in an amount equal to the quotient of (x) the Purchase Price divided by (y) the average of the closing prices of the Ordinary Shareson the NASDAQ Capital Market over the 12 months period preceding July 31, 2018. We are a party to the Agreement in connection with the issuance of theOrdinary Shares and certain other limited purposes.Results of operations for the fiscal year ended December 31, 2017 compared to the fiscal year ended December 31, 2016.RevenueWe provide displaybased online advertising services to customers by integrating text description, image and video, and displaying the advertisements in aprominent position of LuoKuang Application. We recognize revenue in accordance with ASC 605, over the contractual term based on the agreements andconfirmation letters signed by both parties, commencing on the date the customer’s advertisement is displayed on our platform.For the year ended December 31, 2017, we had revenue of $26,082,417, as compared to revenue of $5,233,145 for the year ended December 31, 2016, anincrease of $20,849,272, or 398.4%, which was primarily due to the increase of our advertising clients.Cost of revenueOur cost of revenue primarily consists of depreciation, labor cost, WiFi equipment installation fees, data charges, annual payments to local railway bureau,other overhead costs.33Cost of revenue for the year ended December 31, 2017 was $5,547,779, representing a decrease of $767,725 or 12.2% as compared to $6,315,504 for the yearended December 31, 2016. The decrease was primarily attributable to the decrease in labor cost as a result of our cost control and a decrease in the number ofmaintenance staff. Additionally, data charges decreased as train passengers prefer using their mobile data, leading to a decrease in 3G and 4G data.Selling and marketing expenseOur selling and marketing expense mainly include promotional and marketing expenses and compensation for our sales and marketing personnel.Selling expense totaled $23,908,733 for the year ended December 31, 2017, as compared to $6,209,804 for the year ended December 31, 2016, an increase of$17,698,929 or 285.0%. The increase was primarily attributable to the increase in promotional and marketing activities conducted by the Company.General and administrative expenseOur general and administrative expenses consist primarily of salaries and benefits for our general and administrative personnel, rent, fees and expenses forlegal, accounting and other professional servicesGeneral and administrative expense totaled $2,451,249 for the year ended December 31, 2017, as compared to $2,108,854 for the year ended December 31,2016, an increase of $342,395 or 16.2%.Research and development expenses.Research and development expenses primarily consist of salaries and benefits for research and development personnel.Research and development expenses totaled $1,046,198 for the year ended December 31, 2017, as compared to $2,882,202 for the year ended December 31,2016, a decrease of $1,836,004 or 63.7%. The decrease was primarily attributable to the Company reduced its expenses in research and development temporarily asour products are quite stable at present.Loss from operationsAs a result of the factors described above, for the year ended December 31, 2017, loss from operations amounted to $6,871,542, as compared to loss fromoperations of $12,283,219 for the year ended December 31, 2016, a decrease of $5,411,677, or 44.1%.Other income/expenseOther income/expense mainly include interest income from bank deposits, foreign currency transaction gain, and loss from investment.Net lossAs a result of the factors described above, our net loss was $6,810,454 for the year ended December 31, 2017, compared to net loss of $13,049,031 for theyear ended December 31, 2016, a decrease of $6,238,577 or 47.8%.Foreign currency translation adjustmentOur reporting currency is the U.S. dollar. The functional currency of our parent company and subsidiaries of Merchant Supreme and Prime Cheer is the U.S.dollar and the functional currency of the Company’s subsidiaries incorporated in China is the Chinese Renminbi (“RMB”). The financial statements of oursubsidiaries incorporated in China are translated to U.S. dollars using period end rates of exchange for assets and liabilities, and average rates of exchange (for theperiod) for revenue, costs, and expenses. Net gains and losses resulting from foreign exchange transactions are included in the consolidated statements ofoperations and comprehensive loss. As a result of foreign currency translations, which are a noncash adjustment, we reported a foreign currency translation gain of$90,671 for the year ended December 31, 2017, as compared to a foreign currency translation loss of $387,375 for the year ended December 31, 2016. This noncashgain had the effect of increasing/decreasing our reported comprehensive income/loss.34Comprehensive lossAs a result of our foreign currency translation adjustment, we had comprehensive loss for the year ended December 31, 2017 of $6,719,783, compared tocomprehensive loss of $12,661,656 for the year ended December 31, 2016.B. LIQUIDITY AND CAPITAL RESOURCESThe information contained in “Item 5. Operating and Financial Review and Prospects – A. Operating Results – Liquidity and Capital Resources” isincorporated herein by reference.C. RESEARCH AND DEVELOPMENT, PATENTS AND LICENSES, ETC.The discussions of our research and development activities were contained in “Item 4. Information about our Company – B. Business Overview –Research and Development” and “Item 5. Operating and Financial Review and Prospects – A. Operating Results – Operating Expenses – Research and DevelopmentExpenses” are incorporated herein by reference. In the years ended December 31, 2017 and 2016, we spent $1,046,198 and $2,882,202, respectively, on research anddevelopment activities.D. TREND INFORMATION.Industry and Market OutlookChina has awarded licenses to mobile phone companies to provide the superfast 4G network to customers. The licenses, which are designed to give mobilephone users faster access to services, were granted by the government to China Mobile, China Unicom Hong Kong and China Telecom. Since the grants, ChinaMobile has offered 4G to subscribers from December 18, 2013. China Unicom and China Telecom, the country's other two major carriers, also offer 4G wireless. Thenumber of China Mobile 4G customers has exceeded 900 million by the end of October in 2017. The move greatly bolstered business for telecom equipment makersand a range of other companies.Under China’s 12th FiveYear Plan, a key priority is for China to transition from “Made in China” to “Designed in China.” In order to achieve this goal, thegovernment plans to heavily invest in science and technology education and R&D so as to further develop China’s intellectual property rights system and support“NextGeneration IT” as a Strategic Emerging Industry (SEI). Additionally, China plans to upgrade the technological capabilities of private and public services,including “triple play” services (the convergence of telecom, broadcasting and Internet networks), ecommerce, and egovernment and statistics systems.Furthermore, the government plans to invest in R&D of the "Internet of things" and cloud computing, and develop digital and virtual technologies.E. OFFBALANCE SHEET ARRANGEMENTSWe have not entered into any financial guarantees or other commitments to guarantee the payment obligations of any third parties. We have not enteredinto any derivative contracts that are indexed to our shares and classified as shareholder’s equity, or that are not reflected in our consolidated financial statements.Furthermore, except for the mortgage referenced above, we do not have any retained or contingent interest in assets transferred to an unconsolidated entity thatserves as credit, liquidity or market risk support to such entity. We do not have any variable interest in any unconsolidated entity that provides financing, liquidity,market risk or credit support to us or engages in leasing, hedging or research and development services with us.35F. TABULAR DISCLOSURE OF CONTRACTUAL OBLIGATIONSAs of December 31, 2017, we did not have any contractual obligations required to be disclosed in this Item 5.F. ITEM 6. DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES.A. DIRECTORS AND SENIOR MANAGEMENT.Executive Officers and DirectorsThe following table sets forth the names and ages as of the date of this transition report of each of our executive officers and directors:NameAgePositionXuesong Song50Chief Executive Officer, Chairman and DirectorDongpu Zhang50PresidentJie Yu34Chief Financial OfficerKegang Peng46Vice President and DirectorChuang Tao51DirectorDennis Galgano (1)(2)69Director (Independent)Jin Shi (1)(2)49Director (Independent)Jiming Ha (1)(3)56Director (Independent)Zhihao Xu (3)42Director (Independent)(1)Member of the Audit Committee.(2)Member of the Compensation Committee.(3)Member of the Nominating and Corporate Governance Committee.Set forth below is biographical information concerning our executive officers and directors.Xuesong Song is a cofounder of C Media Limited and served as its chairman of the board of directors and chief executive officer from 2012 until theconsummation of the AEA. From February 2014 through April 2017, Mr. Song served as a director of Seven Stars Cloud Group, Inc. (NASDAQ: SSC) and fromJanuary 2013 through February 2015, Mr. Song served as a director of Pingtan Marine Enterprise Ltd. (NASDAQ: PME). From May 2006 through January 2009, Mr.Song served as the Chairman of the Board of ChinaGrowth North Acquisition Corporation, a special purpose acquisition company, which acquired UIB GroupLimited in January 2009, in which he remains a director. Mr. Song has been a principal of Chum Capital Group Limited since August 2001, a merchant banking firmthat invests in growth Chinese companies and advises them in financings, mergers & acquisitions and restructurings, and chief executive officer of Beijing ChumInvestment Co., Ltd. since December 2001. Mr. Song has been a director of Mobile Vision Communication Ltd. since July 2004. Mr. Song received a Master’s ofBusiness Administration degree from Oklahoma City/Tianjin Program.Dongpu Zhang was appointed as the President of the Company effective on August 25, 2018. Mr. Dongpu Zhang has served as the General Manager ofSuperEngine Graphics Software Technology Development (Suzhou) Co., Ltd. (“SuperEngine Suzou”) and the Chief Executive Officer of SuperEngine HoldingLimited since September 2016. From February, 2014 to August, 2016, Mr. Zhang served as vice president of Industrial Development Group under China Fortune LandDevelopment Co., Ltd. From March, 2009 to February, 2014, Mr. Zhang served as the vice president of Aerospace Science and Technology Holding Group Co., Ltd.Mr. Zhang receive his Master Degree of Computer Science from Harbin Institute of Technology in 1994 and his Bachelor Degree of information system fromChangsha Institute of technology in 1991.Jie Yu served as the chief financial officer of C Media Limited from January 2018 until the consummation of the asset exchange transactions. From June 2016to January 2018, Mr. Yu served as chief financial officer and secretary of the board of directors of MTI Environment Group Limited. Prior to joining MTI, Mr. Yuserved as the senior manager at DA HUA CPA from November 2012 to May 2016. Previously, Mr. Yu served as the manager at Crowe Horwath (Hong Kong) CPA.Mr. Yu holds a bachelor degree in accounting and finance from University of Auckland and postgraduate diploma in accounting from University of Auckland.36Kegang Peng served as the Vice Chairman of the board of directors C Media Limited from October 2014 to the consummation of the asset exchangetransactions, and is now a member of the Company’s board of directors. Previously, from 2012 to 2014, Mr. Peng was chairman of the board and founder of JiangsuSuqian Jinghaiboyuan Information and Technology Co., Ltd. Mr. Peng studied at Beijing University of Aeronautics and Astronautics majoring computer andapplication.20F 1 f20f2017_luokungtech.htm AMENDMENT NO. 1 TO FORM 20FUNITED STATESSECURITIES AND EXCHANGE COMMISSIONWASHINGTON, D.C. 20549FORM 20F☐ REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934OR☐ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934For the Fiscal year ended _____________OR☒ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934For the transition period from October 1, 2017 to December 31, 2017☐ SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934Date of event requiring this shell company report Commission file number: 00134738Luokung Technology Corp.(Exact name of Registrant as specified in its charter)Not applicable(Translation of Registrant’s name into English)British Virgin IslandsLAB 32, SOHO 3Q, No 9, Guanghua Road, Chaoyang District, BeijingPeople’s Republic of China, 100020(Jurisdiction of incorporation or organization)(Address of principal executive offices)Mr. Muqiao GengLAB32, SOHO 3Q, No 9, Guanghua Road, Chaoyang District, BeijingPeople’s Republic of China 100020Tel: (86) 1085866721(Name, telephone, Email and/or facsimile number and address of company contact person)Securities registered or to be registered pursuant to Section 12(b) of the Act:Title of each className of each exchange on which registeredOrdinary shares, par value $0.01 per shareNonePreferred shares, par value $0.01 per shareNoneSecurities registered or to be registered pursuant to Section 12(g) of the Act:none(Title of Class)Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act:none(Title of Class)Indicate the number of outstanding shares of each of the issuer’s classes of capital or common stock as of the close of the period covered by the transitionreport. 187,097,599 Ordinary Shares, including 186,383,224 Ordinary Shares represented by 714,375 American Depositary Shares, and 1,000,000 Preferred Sharesoutstanding as of September 20, 2018.Indicate by check mark if the registrant is a wellknown seasoned issuer, as defined in Rule 405 of the Securities Act. ☐ Yes ☒ NoIf this report is an annual or transition report, indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of theSecurities Exchange Act of 1934. ☐ Yes ☒ NoIndicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirementsfor the past 90 days. ☒ Yes ☐ NoIndicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File requiredto be submitted and posted pursuant to Rule 405 of Regulation ST (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that theregistrant was required to submit and post such files). ☒ Yes ☐ NoIndicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a nonaccelerated filer. See definition of “accelerated filer andlarge accelerated filer” in Rule 12b2 of the Exchange Act. (Check one):Large accelerated filer ☐ Accelerated filer ☐ Nonaccelerated filer ☒Indicate by check mark which basis of accounting the registrant has used to prepare the financial statements included in this filing.U.S. GAAP ☒International Financial Reporting Standards as issuedby the International Accounting Standards Board ☐Other ☐If “Other” has been checked in response to the previous question, indicate by check mark which financial statement item the registrant has elected tofollow. Item 17 ☐ Item 18 ☐If this is an transition report, indicate by check mark whether the registrant is a shell company (as defined in Rule 12b2 of the ExchangeAct). ☐ Yes ☒ NoExplanatory NoteLuokung Technology Corp. (the “Company”) is filing this transition report on Form 20F (“Transition Report”) in connection with the completion of theexchange of certain of its assets for substantially all of the assets of C Media Limited (“C Media”) pursuant to that Asset Exchange Agreement, dated January 25,2018 (the “Original AEA”), as supplemented by the Addendum to Asset Exchange Agreement, dated October 3, 2018 (the “Addendum” and together with theOriginal AEA, the “AEA”). Following the consummation of the AEA, on October 4, 2018, the Company changed its fiscal year end from September 30 to the fiscalyear end used by C Media, December 31. This Transition Report covers the threemonth period from Octorber 1, 2017 to December 31, 2017, and the fiscal yearsdescribed herein.In this transition report:●References to the “Company”, “we”, “our” and “us” are to Luokung Technology Corp. and its consolidated subsidiaries and variable interestentity, except as the context otherwise requires;●This transition report on Form 20F covers the threemonth period from October 1, 2017 through December 31, 2017 (the “Transition Period”) andreflects our financial results thereof. Prior to this transition report on Form 20F, our two most recent annual reports on Form 20F cover the fiscalyears ended September 30, 2017 and September 30, 2016, respectively, and reflect financial results for the respective twelvemonth periods fromOctober 1 to September 30. Unless otherwise noted, all references to years are to the calendar year from January 1 to December 31 and referencesto our fiscal year or years are to the fiscal year or years which, prior to the Transition Period, ended September 30, while from and after theTransition Period, ended December 31;●References to an “ADS” are to an American Depositary Share, each of which represents one of our Ordinary Shares with a par value of $.01 pershare.Special Note Regarding Forwardlooking StatementsThis transition report contains forwardlooking statements that involve risks and uncertainties. These statements involve known and unknown risks,uncertainties and other factors that may cause our actual results, performance or achievements to be materially different from those expressed or implied by theforwardlooking statements.You can identify these forwardlooking statements by words or phrases such as “may,” “will,” “expect,” “anticipate,” “aim,” “estimate,” “intend,” “plan,”“believe,” “likely to” or other similar expressions. We have based these forwardlooking statements largely on our current expectations and projections about futureevents and financial trends that we believe may affect our financial condition, results of operations, business strategy and financial needs. You should not placeundue reliance on these forwardlooking statements, which apply only as of the date of this transition report. These forwardlooking statements include:●our future business development, results of operations and financial condition;●expected changes in our net revenues and certain cost or expense items;●our ability to attract and retain customers; and●trends and competition in the enterprise mobile software application market.You should read this transition report thoroughly with the understanding that our actual future results may be materially different from, and/or worse, thanwhat we expect. We qualify all of our forwardlooking statements by these cautionary statements. Other sections of this transition report include additional factorswhich could adversely impact our business and financial performance. Moreover, we operate in an evolving environment. New risk factors and uncertainties emergefrom time to time and it is not possible for our management to predict all risk factors and uncertainties, nor can we assess the impact of all factors on our business orthe extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forwardlooking statements.This transition report also contains estimates, projections and statistical data related to the market for the provision of WiFi and mobile applications inChina. This market data, including data from IDC, a leading provider of market data and intelligence, speaks as of the date it was published and includes projectionsthat are based on a number of assumptions and are not representations of fact. The market for the provision of WiFi and mobile applications in China may not growat the rates projected by the market data, or at all. The failure of the market to grow at the projected rates may materially and adversely affect our business and themarket price of our ADSs. In addition, the rapidly changing nature of the market for the provision of WiFi and mobile applications subjects any projections orestimates relating to the growth prospects or future condition of our market to significant uncertainties. If any one or more of the assumptions underlying the marketdata proves to be incorrect, actual results may differ from the projections based on these assumptions.You should not rely upon forwardlooking statements as predictions of future events. We undertake no obligation to update or revise any forwardlookingstatements, whether as a result of new information, future events or otherwise.TABLE OF CONTENTSPart IItem 1.Identity of Directors, Senior Management and Advisers.1Item 2.Offer Statistics and Expected Timetable.1Item 3.Key Information.1A.Selected Financial Data.1B.Capitalization and Indebtedness.3C.Reasons for the Offer and Use of Proceeds.3D.Risk Factors.3Item 4.Information on the Company.19A.History and Development of the Company.19B.Business Overview.20C.Organizational Structure.30D.Property, Plants and Equipment.32Item 4A.Unresolved Staff Comments.32Item 5.Operating and Financial Review and Prospects.32A.Operating Results.32B.Liquidity and Capital Resources.35C.Research and Development, Patents and Licenses, etc.35D.Trend Information.35E.Offbalance Sheet Arrangements.35F.Tabular Disclosure of Contractual Obligations.36Item 6.Directors, Senior Management and Employees.36A.Directors and Senior Management.36B.Compensation.37C.Board Practices.40D.Employees.43E.Share Ownership.43Item 7.Major Shareholders and Related Party Transactions.44A.Major Shareholders.44B.Related Party Transactions.45C.Interests of Experts and Counsel.45Item 8.Financial Information.45A.Consolidated Statements and Other Financial Information.45B.Significant Changes.46Item 9.The Offer and Listing.46A.Offer and Listing Details.46B.Plan of Distribution.47C.Markets.47D.Selling shareholders.48E.Dilution.48F.Expenses of the issue.48Item 10.Additional Information.48A.Share Capital.48B.Memorandum and Articles of Association.48C.Material Contracts.53D.Exchange Controls.54E.Taxation.61F.Dividends and Paying Agents.67G.Statement by Experts.67H.Documents on Display.67I.Subsidiary Information.68Item 11.Quantitative and Qualitative Disclosures about Market Risk.68Item 12.Description of Securities Other than Equity Securities.69A.Debt Securities.69B.Warrants and Rights.69C.Other Securities.69D.American Depositary Shares.69iPart IIItem 13.Defaults, Dividend Arrearages and Delinquencies.71Item 14.Material Modifications to the Rights of Security Holders and Use of Proceeds.71Item 15.Controls and Procedures.71Item 16.[Reserved.]72Item 16A.Audit Committee Financial Expert.72Item 16B.Code of Ethics.73Item 16C.Principal Accountant Fees and Services.73Item 16D.Exemptions from the Listing Standards for Audit Committees.73Item 16E.Purchases of Equity Securities by the Issuer and Affiliated Purchasers.73Item 16F.Change in Registrant’s Certifying Accountant.73Item 16G.Corporate Governance.73Item 16H.Mine Safety Disclosure.73Part IIIItem 17.Financial Statements.74Item 18.Financial Statements.74Item 19.Exhibits.74Index to Consolidated Financial StatementsF1iiPART IITEM 1. IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS.The directors of Luokung Technology Corp. are Xuesong Song, Kegang Peng, Dennis Galgano, Jin Shi, Jiming Ha, Zhihao Xu and Chuang Tao. Thebusiness address for our directors is LAB 32, SOHO 3Q, No 9, Guanghua Road, Chaoyang District, Beijing, People’s Republic of China.Moore Stephens CPA Limited has served as our auditor since October 5, 2018, and is located at 801806 Silvercord Tower 1, 30 Canton road, Tsimshatsui,Kowloon, Hong Kong. BDO China Shun Lun Pan Certified Public Accountants LLP served as our auditors for the last three years, and are located at 4F, No. 61Nanjing Road, Shanghai, People’s Republic of China.Garvey Schubert Barer, P.C., serves as our legal counsel in the United States, and is located at Flour Mill Building, 1000 Potomac Street NW, Suite 200,Washington, D.C., 200073501.Conyers Dill & Pearlman serves as our legal counsel with regard to the laws of the British Virgin Islands, and is located at 29th Floor, One Exchange Square,8 Connaught Place, Central, Hong Kong.ITEM 2. OFFER STATISTICS AND EXPECTED TIMETABLE.Not applicable.ITEM 3. KEY INFORMATION.A. SELECTED FINANCIAL DATA.Luokung Technology Corp. and its consolidated subsidiaries (“Luokung Technology”, “we”, “us”, or “the Company”) consummated an asset exchangeagreement pursuant to which we exchanged our existing assets with those of C Media Limited (the “Asset Exchange”) on August 17, 2018, and we changed ourname from Kingtone Wirelessinfo Solution Holding Ltd. to our current name on August 20, 2018. On October 4, 2018, in connection with the consummation of the Asset Exchange, we changed our fiscal year end from September 30 to December 31.1The selected financial data for the fiscal years ended December 31 2017 and 2016 have been derived from our audited consolidated and combined financialstatements. The selected consolidated and combined financial data should be read in conjunction with our audited financial statements and the accompanying notesand “Item 5 – Operating and Financial Review and Prospects.” Our consolidated and combined financial statements are prepared and presented in accordance withUnited States generally accepted accounting principles, or U.S. GAAP. Our historical results do not necessarily indicate our results expected for any future periods.You should not view our historical results as an indicator of our future performance.LK TECHNOLOGY LTD. AND SUBSIDIARIESSELECTED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS(IN U.S. DOLLARS)For the years ended December 31,20172016Revenues$26,082,417$5,233,145Less: Cost of revenues5,547,7796,315,504Less: Operating expenses:Selling and marketing23,908,7336,209,804General and administrative2,451,2492,108,854Research and development1,046,1982,882,202Total operating expenses27,406,18011,200,860Loss from operations(6,871,542)(12,283,219)Other income (expense):Interest expense(26,611)(4,412)Foreign exchange gains(losses)350,679(298,257)Loss from investment(428,571)Other income (expense), net(262,980)(34,572)Total other income (expense), net61,088(765,812)Loss before income taxes(6,810,454)(13,049,031)Income taxesNet loss$(6,810,454)$(13,049,031)Other comprehensive income:Foreign currency translation adjustment90,671387,375Total comprehensive loss$(6,719,783)$(12,661,656)2LK TECHNOLOGY LTD. AND SUBSIDIARIESSELECTED CONSOLIDATED BALANCE SHEETS(IN U.S. DOLLARS)As of December 31,20172016Accounts receivable, net of allowance for doubtful accounts9,729,6251,865,836Amounts due from related parties11,760,692Property and equipment, net5,044,8727,771,027Goodwill7,239,9367,239,936TOTAL ASSETS37,582,85821,114,832Accounts payable8,784,5186,446,584Accrued liabilities and other payables12,962,91211,329,613Total liabilities25,311,11333,905,520Total Shareholder’s Equity (Deficit)12,271,745(12,790,688)TOTAL LIABILITIES AND SHAREHOLDER’S EQUITY (DEFICIT)37,582,85821,114,832B. CAPITALIZATION AND INDEBTEDNESS.Not applicable.C. REASONS FOR THE OFFER AND USE OF PROCEEDS.Not applicable.D. RISK FACTORS.An investment in our ADSs and ordinary shares involves a high degree of risk. You should carefully consider the risks and uncertainties described belowtogether with all other information contained in this transition report, including the matters discussed under “Special Note Regarding ForwardLooking Statements,”before you decide to invest in our ADSs or ordinary shares. You should pay particular attention to the fact that we are a holding company with substantialoperations in China and are subject to legal and regulatory environments that in many respects differ from those of the United States. If any of the following risks, orany other risks and uncertainties that are not presently foreseeable to us, actually occur, our business, financial condition, results of operations, liquidity and ourfuture growth prospects would be materially and adversely affected. You should also consider all other information contained in this transition report beforedeciding to invest in our ADSs or ordinary shares.Risks Related to Our Company and Our IndustryThe Company had incurred negative cash flows from operating activities and net losses as of December 31, 2017. These matters raise substantial doubt aboutthe Company’s ability to continue as a going concern.The Company’s consolidated financial statements are prepared using generally accepted accounting principles in the United States of America applicableto a going concern, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. As of and for the year endedDecember 31, 2017, the Company had incurred significant operating losses and working capital deficit. The ability of the Company to continue as a going concern isdependent on the Company obtaining adequate capital to fund operating losses until it becomes profitable. If the Company is unable to obtain adequate capital, itcould be forced to cease operations. The accompanying consolidated financial statements do not include any adjustments that might be necessary if the Companyis unable to continue as a going concern.3We may undertake acquisitions, investments, joint ventures or other strategic alliances, which could have a material adverse effect on our ability to manageour business. In addition, such undertakings may not be successful.Our strategy includes plans to grow both organically and through acquisitions, participation in joint ventures or other strategic alliances. Joint venturesand strategic alliances may expose us to new operational, regulatory and market risks, as well as risks associated with additional capital requirements. We may not beable, however, to identify suitable future acquisition candidates or alliance partners. Even if we identify suitable candidates or partners, we may be unable tocomplete an acquisition or alliance on terms commercially acceptable to us. If we fail to identify appropriate candidates or partners, or complete desired acquisitions,we may not be able to implement our strategies effectively or efficiently. In addition, our ability to successfully integrate acquired companies and their operations may be adversely affected by several factors. These factorsinclude:1.diversion of management’s attention;2.difficulties in retaining customers of the acquired companies;3.difficulties in retaining personnel of the acquired companies;4.entry into unfamiliar markets;5.unanticipated problems or legal liabilities; and6.tax and accounting issues.If we fail to integrate acquired companies efficiently, our earnings, revenue growth and business could be negatively affected.Due to intense competition for highlyskilled personnel, we may fail to attract and retain enough sufficiently trained employees to support our operations; ourability to bid for and obtain new projects may be negatively affected and our revenues could decline as a result.The IT industry relies on skilled employees, and our success depends to a significant extent on our ability to attract, hire, train and retain qualifiedemployees. There is significant competition in China for professionals with the skills necessary to develop the products and perform the services we offer to ourcustomers. Increased competition for these professionals, in the mobile application design area or otherwise, could have an adverse effect on us if we experiencesignificant increase in the attrition rate among employees with specialized skills, which could decrease our operating efficiency and productivity and could lead to adecline in demand for our services.In addition, our ability to serve existing customers and business partners and obtain new business will depend, in large part, on our ability to attract, trainand retain skilled personnel that enable us to keep pace with growing demands for wifi connectivity and mobile applications, evolving industry standards andchanging customer preferences. Our failure to attract, train and retain personnel with the qualifications necessary to fulfill the needs of our existing and futurecustomers or to assimilate new employees successfully could have a material adverse effect on our business, financial condition and results of operations. Ourfailure to retain our key personnel on business development or find suitable replacements of the key personnel upon their departure may lead to shrinking newimplementation projects, which could materially adversely affect our business.4Our business depends substantially on the continuing efforts of our senior executives and other key personnel, and our business may be severely disrupted if welose their services.Our future success heavily depends upon the continued services of our senior executives and other key employees, particularly since we recentlyappointed a new chairman. We are reliant on the services of Mr. Xuesong Song, our chairman, chief executive officer and member of our board of directors. If one ormore of our senior executives or key employees is unable or unwilling to continue in his or her present position, we may not be able to replace such employee easily,or at all, we may incur additional expenses to recruit, train and retain replacement personnel, our business may be severely disrupted, and our financial condition andresults of operations may be materially adversely affected.Our business could suffer if our executives and directors compete against us and our noncompetition agreements with them cannot be enforced.If any of our senior executives or key employees joins a competitor or forms a competing company, we may lose customers, knowhow and keyprofessionals and staff members to them. Also, if any of our business development managers who keep a close relationship with our customers and businesspartners joins a competitor or forms a competing company, we may lose customers, and our revenues may be materially adversely affected. Most of our executiveshave entered, or will soon enter, into employment agreements with us that contain or will contain noncompetition provisions. However, if any dispute arisesbetween our executive officers and us, such noncompetition provisions may not be enforceable, especially in China, where all of these executive officers and keyemployees reside, in light of the uncertainties with China’s legal system. See “Risk Factors — Risks Related to Doing Business in China — Uncertainties withrespect to the PRC legal system could adversely affect us.”Our computer networks may be vulnerable to security risks that could disrupt our services and adversely affect our results of operations.Our computer networks may be vulnerable to unauthorized access, computer hackers, computer viruses and other security problems caused byunauthorized access to, or improper use of, systems by third parties or employees. A hacker who circumvents security measures could misappropriate proprietaryinformation or cause interruptions or malfunctions in operations. Computer attacks or disruptions may jeopardize the security of information stored in andtransmitted through computer systems and mobile devices of our customers. Actual or perceived concerns that our systems may be vulnerable to such attacks ordisruptions may deter customers from using our services. As a result, we may be required to expend significant resources to protect against the threat of thesesecurity breaches or to alleviate problems caused by these breaches, which could adversely affect our results of operations.If we do not continually enhance our solutions and service offerings, we may have difficulty in retaining existing customers and attracting new customers.We believe that our future success will depend, to a significant extent, upon our ability to enhance our existing applications and platform, and to introducenew features to meet the preferences and requirements of our customers in a rapidly developing and evolving market. Unexpected technical, operational, distributionor other problems could delay or prevent the introduction of one or more of these products or services, or any products or services that we may plan to introduce inthe future. Our present or future products may not satisfy the evolving preferences and tastes of our customers, and these solutions and services may not achieveanticipated market acceptance or generate incremental revenue. If we are unable to anticipate or respond adequately to the need for service or productenhancements due to resource, technological or other constraints, our business, financial condition and results of operations could be materially and adverselyaffected.5If we are unable to develop competitive new products and service offerings our future results of operations could be adversely affected.Our future revenue stream depends to a large degree on our ability to utilize our technology in a way that will allow us to offer new types of mobileapplications and services to a broader customer base. We will be required to make investments in research and development in order to continually develop newsoftware applications and related service offerings, enhance our existing platform, mobile applications and related service offerings and achieve market acceptanceof our mobile applications and service offerings. We may incur problems in the future in innovating and introducing new mobile applications and service offerings.Our developmentstage mobile applications may not be successfully completed or, if developed, may not achieve significant customer acceptance. If we are unableto successfully define, develop and introduce competitive new mobile applications, and enhance existing mobile applications, our future results of operations wouldbe adversely affected. The timely availability of new applications and their acceptance by customers are important to our future success. A delay in the developmentof new applications could have a significant impact on its results of operations.Changes in technology could adversely affect our business by increasing our costs, reducing our profit margins and causing a decline in our competitiveness.China’s wireless telecom industry, in which we operate, is characterized by rapidly changing technology, evolving industry standards, frequentintroductions of new services and solutions and enhancements as well as changing customer demands. New solutions and new technologies often render existingsolutions and services obsolete, excessively costly or otherwise unmarketable. As a result, our success depends on our ability to adapt to the latest technologicalprogress, such as the 5G standard and technologies, and to develop or acquire and integrate new technologies into our platform, mobile applications and relatedservices. Advances in technology also require us to commit substantial resources to developing or acquiring and then deploying new technologies for use in ouroperations. We must continuously train personnel in new technologies and in how to integrate existing hardware and software systems with these newtechnologies. We may not be able to adapt quickly to new technologies or commit sufficient resources to compete successfully against existing or new competitorsin bringing to market solutions and services that incorporate these new technologies. We may incur problems in the future in innovating and introducing new mobileapplications and service offerings. Our development of new mobile applications and platform enhancements may not be successfully completed or, if developed,may not achieve significant customer acceptance. If we fail to adapt to changes in technologies and compete successfully against established or new competitors,our business, financial condition and results of operations could be adversely affected.Problems with the quality or performance of our hardware, software or other systems may cause delays in the introduction of new solutions or result in the lossof customers and revenues, which could have a material and adverse effect on our business, financial condition and results of operations.Our hardware and software systems are complex and may contain defects, errors or bugs when first introduced to the market or to a particular customer, oras new versions are released. Because we cannot test for all possible scenarios, our systems may contain errors that are not discovered until after they have beeninstalled or implemented, and we may not be able to timely correct these problems. These defects, errors or bugs could interrupt or delay the completion of projectsor sales to our customers. In addition, our reputation may be damaged and we may fail to acquire new projects from existing customers or new customers. Errors mayoccur when we provide systems integration and maintenance services. Even in cases where we have agreements with our customers that contain provisionsdesigned to limit our exposure to potential claims and liabilities arising from customer problems, these provisions may not effectively protect us against such claimsin all cases and in all jurisdictions. In addition, as a result of business and other considerations, we may undertake to compensate our customers for damages arisingfrom the use of our solutions, even if our liability is limited by these provisions. Moreover, claims and liabilities arising from customer problems could also result inadverse publicity and materially and adversely affect our business, results of operations and financial condition. We currently do not carry any product or serviceliability insurance and any imposition of liability on us may materially and adversely affect our business and increase our costs, resulting in reduced revenues andprofitability.Our products may contain undetected software defects, which could negatively affect our revenues.Our software products are complex and may contain undetected defects. Although we test our products, it is possible that errors may be found or occur inour new or existing products after we have commenced commercial shipment of those products. Defects, whether actual or perceived, could result in adversepublicity, loss of revenues, product returns, a delay in market acceptance of our products, loss of competitive position or claims against us by customers. Any suchproblems could be costly to remedy and could cause interruptions, delays, or cessation of our product sales, which could cause us to lose existing or prospectivecustomers and could negatively affect our results of operations.6We may be subject to infringement, misappropriation and indemnity claims in the future, which may cause us to incur significant expenses, pay substantialdamages and be prevented from providing our services or technologies.Our success depends, in part, on our ability to carry out our business without infringing the intellectual property rights of third parties. Patent andcopyright law covering softwarerelated technologies is evolving rapidly and is subject to a great deal of uncertainty. Our selfdeveloped or licensed technologies,processes or methods may be covered by thirdparty patents or copyrights, either now existing or to be issued in the future. Any potential litigation may cause us toincur significant expenses. Thirdparty claims, if successfully asserted against us may cause us to pay substantial damages, seek licenses from third parties, payongoing royalties, redesign our services or technologies, or prevent us from providing services or technologies subject to these claims. Even if we were to prevail,any litigation would likely be costly and timeconsuming and divert the attention of our management and key personnel from our business operations.Our failure to protect our intellectual property rights may undermine our competitive position, and subject us to costly litigation to protect our intellectualproperty rights.Any misappropriation of our technology or the development of competitive technology could seriously harm our business. We regard a substantial portionof our hardware and software systems as proprietary and rely on statutory copyright, trademark, patent, trade secret laws, customer license agreements, employeeand thirdparty nondisclosure agreements and other methods to protect our proprietary rights. Nevertheless, these resources afford only limited protection and theactions we take to protect our intellectual property rights may not be adequate. In particular, third parties may infringe or misappropriate our proprietarytechnologies or other intellectual property rights, which could have a material adverse effect on our business, financial condition and results of operations. Inaddition, intellectual property rights and confidentiality protection in China may not be as effective as in the United States, and policing unauthorized use ofproprietary technology can be difficult and expensive. Further, litigation may be necessary to enforce our intellectual property rights, protect our trade secrets ordetermine the validity and scope of the proprietary rights of others. The outcome of any such litigation may not be in our favor. Any such litigation may be costlyand may divert management attention, as well as our other resources, away from our business. An adverse determination in any such litigation will impair ourintellectual property rights and may harm our business, prospects and reputation. In addition, we have no insurance coverage against litigation costs and wouldhave to bear all litigation costs in excess of the amount recoverable from other parties. The occurrence of any of the foregoing could have a material adverse effecton our business, financial condition and results of operations. Our solutions incorporate a portion of, and work in conjunction with, thirdparty hardware and software solutions. If these thirdparty hardware or softwaresolutions are not available to us at reasonable costs, or at all, our results of operations could be adversely impacted.Although our hardware and software systems and mobile applications primarily rely on our own core technologies, some elements of our systemsincorporate a small portion of thirdparty hardware and software solutions. If any third party were to discontinue making their intellectual property available to us orour customers on a timely basis, or increase materially the cost of their licensing such intellectual property, or if our systems or applications failed to properlyfunction or interoperate with replacement intellectual property, we may need to incur costs in finding replacement thirdparty solutions and/or redesigning oursystems or applications to replace or function with or on replacement thirdparty proprietary technology. Replacement technology may not be available on termsacceptable to us or at all, and we may be unable to develop alternative solutions or redesign our systems or applications on a timely basis or at a reasonable cost. Ifany of these were to occur, our results of operations could be adversely impacted.7Our ability to sell our products is highly dependent on the quality of our service and support offerings, and our failure to offer high quality service could have amaterial adverse effect on our ability to market and sell our products.Our customers depend upon our customer service and support staff to resolve issues relating to our products. Highquality support services are critical forthe successful marketing and sale of our products. If we fail to provide highquality support on an ongoing basis, our customers may react negatively and we maybe materially and adversely affected in our ability to sell additional products to these customers. This could also damage our reputation and prospects with potentialcustomers. Our failure to maintain highquality support services could have a material and adverse effect on our business, results of operations and financialcondition.Weaknesses in our internal controls over financial reporting or disclosure controls and procedures may have a material adverse effect on our business, theprice of our ordinary shares, operating results and financial condition.We are required to establish and maintain appropriate internal controls over financial reporting and disclosure controls and procedures. Pursuant to Section404 of the SarbanesOxley Act of 2002 and the related rules adopted by the Securities and Exchange Commission, every public company is required to include amanagement report on its internal controls over financial reporting in its transition report, which contains management’s assessment of the effectiveness of thecompany’s internal controls over financial reporting. This requirement first applied to our annual report on Form 20F for the fiscal year ended on September 30,2011. In connection with our assessments of our disclosure controls and procedures and internal controls over financial reporting, management concluded that as ofSeptember 30, 2018, our disclosure controls and procedures and our internal controls over financial reporting were not effective due to lack of U.S. generallyaccepted accounting principles (“U.S. GAAP”) expertise in our current accounting team. Please refer to the discussion under Item 15, “Controls and Procedures” forfurther discussion of our material weakness as of December 31, 2017. Should we be unable to remediate the material weakness promptly and effectively, suchweakness could harm our operating results, result in a material misstatement of our financial statements, cause us to fail to meet our financial reporting obligations orprevent us from providing reliable and accurate financial reports or avoiding or detecting fraud. This, in turn, could result in a loss of investor confidence in theaccuracy and completeness of our financial reports, which could have an adverse effect on the trading price of our ordinary shares. Any litigation or otherproceeding or adverse publicity relating to the material weaknesses could have a material adverse effect on our business and operating results. We have very limited insurance coverage which could expose us to significant costs and business disruption.We do not maintain any insurance coverage for our leased properties. Should any natural catastrophes such as earthquakes, floods, typhoons or any actsof terrorism occur in Beijing, China, where our head office is located and most of our employees are based, or elsewhere in China, we might suffer not onlysignificant property damages, but also loss of revenues due to interruptions in our business operations, which could have a material adverse effect on our business,operating results or financial condition.The insurance industry in China is still at an early stage of development. Insurance companies in China offer limited business insurance products, and donot, to our knowledge, offer business liability insurance. As a result, we do not have any business liability insurance coverage for our operations. Moreover, whilebusiness disruption insurance is available, we have determined that the risks of disruption and cost of the insurance are such that we do not require it at this time.Any business disruption, litigation or natural disaster might result in substantial costs and diversion of resources, particularly if it affects our technology platformswhich we depend on for delivery of our software and services, and could have a material adverse effect on our financial condition and results of operations.We may be liable to our customers for damages caused by unauthorized disclosure of sensitive and confidential information, whether through our employees orotherwise.We are typically required to manage, utilize and store sensitive or confidential customer data in connection with the products and services we provide.Under the terms of our customer contracts, we are required to keep such information strictly confidential. We seek to implement specific measures to protectsensitive and confidential customer data. We require our employees to enter into nondisclosure agreements to limit such employees’ access to, and distribution of,our customers’ sensitive and confidential information and our own trade secrets. We can give no assurance that the steps taken by us in this regard will be adequateto protect our customers’ confidential information. If our customers’ proprietary rights are misappropriated by our employees, in violation of any applicableconfidentiality agreements or otherwise, our customers may consider us liable for that act and seek damages and compensation from us. However, we currently donot have any insurance coverage for mismanagement or misappropriation of such information by our employees. Any litigation with respect to unauthorizeddisclosure of sensitive and confidential information might result in substantial costs and diversion of resources and management attention.8We may face intellectual property infringement claims that could be timeconsuming and costly to defend. If we fail to defend ourselves against such claims, wemay lose significant intellectual property rights and may be unable to continue providing our existing products and services.It is critical that we use and develop our technology and products without infringing upon the intellectual property rights of third parties, includingpatents, copyrights, trade secrets and trademarks. Intellectual property litigation is expensive and timeconsuming and could divert management’s attention from ourbusiness. A successful infringement claim against us, whether with or without merit, could, among others things, require us to pay substantial damages, developnoninfringing technology, or rebrand our name or enter into royalty or license agreements that may not be available on acceptable terms, if at all, and cease making,licensing or using products that have infringed a third party’s intellectual property rights. Protracted litigation could also result in existing or potential customersdeferring or limiting their purchase or use of our products until resolution of such litigation, or could require us to indemnify our customers against infringementclaims in certain instances. Also, we may be unaware of intellectual property registrations or applications relating to our services that may give rise to potentialinfringement claims against us. Parties making infringement claims may be able to obtain an injunction to prevent us from delivering our services or usingtechnology containing the allegedly infringing intellectual property. Any intellectual property litigation could have a material adverse effect on our business, resultsof operations or financial condition. Seasonality and fluctuations in our customers’ spending cycle and other factors can cause our revenues and operating results to vary significantly from quarterto quarter and from year to year.Our revenues and operating results will vary significantly from quarter to quarter and from year to year due to a number of factors, many of which areoutside of our control. Our new lines of business acquired upon the consummation of the asset exchange transaction discussed below see higher customer use andactivity during the Chinese New Year holiday than other times during the year when rail travel is high, which lead to higher revenue during this period as morecustomers would like to place more advertising. Due to these and other factors, our operating results may fluctuate significantly from quarter to quarter and fromyear to year. These fluctuations are likely to continue in the future, and operating results for any period may not be indicative of our future performance in any futureperiod.Our corporate actions are substantially controlled by our principal shareholders, who can cause us to take actions in ways you may not agree with.Mr. Xuesong Song, our chairman, chief executive officer and a member of our board of directors, beneficially owns 19.31% of our outstanding ordinaryshares and 1,000,000 preferred shares, and each preferred share has the right to 399 votes at a meeting of the members of the Company. Our officers and directors asa group beneficially own an aggregate of approximately 33.69% of our outstanding ordinary shares. These shareholders, acting individually or as a group, couldexert control and substantial influence over matters such as electing directors, amending our constitutional documents, and approving acquisitions, mergers or otherbusiness combination transactions. This concentration of ownership and voting power may also discourage, delay or prevent a change in control of our company,which could deprive our shareholders of an opportunity to receive a premium for their shares as part of a sale of our company and might reduce the price of ourshares. Alternatively, our controlling shareholders may cause a merger, consolidation or change of control transaction even if it is opposed by our othershareholders, including those who purchase shares in this offering.9We depend on a small number of customers to derive a significant portion of our revenues. If we were to become dependent again upon a few customers, suchdependency could negatively impact our business, operating results and financial condition.We derived a material portion of our revenues from a small number of customers. In the years ended December 31, 2017 and 2016, our five largestcustomers accounted for 99.8% and 78.5% of our total sales, respectively, and our largest customer Guangdong Zhanshi Media Advertising Co., Ltd. accounted forapproximately 80.8% of our total sales during for the fiscal year ended December 31, 2017. As our customer base may change from yeartoyear, during such yearsthat the customer base is highly concentrated, the fluctuation of our sales to any of such major customers could have a material adverse effect on our business,operating results and financial condition. Moreover, our high customer base concentration may also adversely affect our ability to negotiate contract prices withthese customers, which may in turn materially and adversely affect our results of operations.Our historical outstanding accounts receivable have been relatively high. Inability to collect our accounts receivable on a timely basis, if at all, couldmaterially and adversely affect our financial condition, liquidity and results of operations.Historically, our outstanding accounts receivable have been relatively high. As of December 31, 2017 and 2016, our outstanding accounts receivable beforeimpairment were $10.4 million and $2.10 million, respectively. Although we conduct credit evaluations of our customers, we generally do not require collateral orother security from our customers. In addition, we have had a relatively high customer concentration. The outstanding accounts receivable balance for our largestcustomer was 45.3% and 38.5% of our total accounts receivable balance as of December 31, 2017 and 2016, respectively. As a result, an extended delay or default inpayment relating to a significant account would likely have a material and adverse effect on the aging schedule and turnover days of our accounts receivable. Ourinability to collect our accounts receivable on a timely basis, if at all, could materially and adversely affect our financial condition, liquidity and results of operations.Risks Related to Doing Business in ChinaAdverse changes in political and economic policies of the PRC government could have a material adverse effect on the overall economic growth of China,which could reduce the demand for our services and materially and adversely affect our competitive position.Substantially all of our business operations are conducted in China. Accordingly, our business, results of operations, financial condition and prospects aresubject to a significant degree to economic, political and legal developments in China. Although the Chinese economy is no longer a planned economy, the PRCgovernment continues to exercise significant control over China’s economic growth through direct allocation of resources, monetary and tax policies, and a host ofother government policies such as those that encourage or restrict investment in certain industries by foreign investors, control the exchange between RMB andforeign currencies, and regulate the growth of the general or specific market. These government involvements have been instrumental in China’s significant growthin the past 30 years. The reorganization of the telecommunications industry encouraged by the PRC government has directly affected our industry and our growthprospect. In response to the recent global and Chinese economic downturn, the PRC government has adopted policy measures aimed at stimulating the economicgrowth in China. If the PRC government’s current or future policies fail to help the Chinese economy achieve further growth or if any aspect of the PRCgovernment’s policies limits the growth of the telecommunications industry in China or our industry or otherwise negatively affects our business, our growth rate orstrategy, our results of operations could be adversely affected as a result. Our business benefits from certain government tax incentives. Expiration, reduction or discontinuation of, or changes to, these incentives will increase our taxburden and reduce our net income.Under the PRC Enterprise Income Tax Law passed in 2007 and the implementing rules, both of which became effective on January 1, 2008, or the New EITLaw, a unified enterprise income tax rate of 25% and unified tax deduction standard is applied equally to both domesticinvested enterprises and foreigninvestedenterprises, or FIEs. Enterprises established prior to March 16, 2007 eligible for preferential tax treatment in accordance with the then tax laws and administrativeregulations shall gradually become subject to the New EIT Law rate over a fiveyear transition period starting from the date of effectiveness of the New EIT Law.However, certain qualifying hightechnology enterprises may still benefit from a preferential tax rate of 15% if they own their core intellectual properties and they areenterprises in certain Statesupported hightech industries to be later specified by the government. As a result, if our PRC subsidiaries qualify as “hightechnologyenterprises,” they will continue to benefit from the preferential tax rate of 15%, subject to transitional rules implemented from January 1, 2008. Our subsidiary, BeijingZhong Chuan Shi Xun Technology Limited, is qualified as a “hightechnology enterprise” until the end of the November 2018, and therefore it had benefited fromthe preferential tax rate of 15%, subject to transitional rules implemented on January 1, 2008. Although we intend to apply for a renewal of this qualification, if BeijingZhong Chuan Shi Xun ceases to qualify as a “hightechnology enterprise”, or the tax authorities change their position on our preferential tax treatments in thefuture, our future tax liabilities may materially increase, which could materially and adversely affect our financial condition and results of operations.10If we were deemed a “resident enterprise” by PRC tax authorities, we could be subject to tax on our global income at the rate of 25% under the New EIT Lawand our nonPRC shareholders could be subject to certain PRC taxes.Under the New EIT Law and the implementing rules, both of which became effective January 1, 2008, an enterprise established outside of the PRC with “defacto management bodies” within the PRC may be considered a PRC “resident enterprise” and will be subject to the enterprise income tax at the rate of 25% on itsglobal income as well as PRC enterprise income tax reporting obligations. The implementing rules of the New EIT Law define “de facto management” as “substantialand overall management and control over the production and operations, personnel, accounting, and properties” of the enterprise. However, as of the date of thistransition report, no final interpretations on the implementation of the “resident enterprise” designation are available. Moreover, any such designation, when madeby PRC tax authorities, will be determined based on the facts and circumstances of individual cases. Therefore, if we were to be considered a “resident enterprise”by the PRC tax authorities, our global income would be taxable under the New EIT Law at the rate of 25% and, to the extent we were to generate a substantial amountof income outside of PRC in the future, we would be subject to additional taxes. In addition, the dividends we pay to our nonPRC enterprise shareholders and gainsderived by such shareholders or ADS or ordinary share holders from the transfer of our shares or ADSs may also be subject to PRC withholding tax at the rate up to10%, if such income were regarded as Chinasourced income.Our holding company structure may limit the payment of dividends.We have no direct business operations, other than our ownership of our subsidiaries. While we have no current intention of paying dividends, should wedecide in the future to do so, as a holding company, our ability to pay dividends and meet other obligations depends upon the receipt of dividends or otherpayments from our operating subsidiaries and other holdings and investments. Current PRC regulations permit our PRC subsidiaries to pay dividends to us only outof their accumulated profits, if any, determined in accordance with Chinese accounting standards and regulations. In addition, each of our subsidiaries in China isrequired to set aside at least 10% of its aftertax profits each year, if any, to fund a statutory reserve until such reserve reaches 50% of its registered capital. Thesereserves are not distributable as cash dividends. Furthermore, if our subsidiaries in China incur debt on their own behalf in the future, the instruments governing thedebt may restrict their ability to pay dividends or make other payments to us. As a result, there may be limitations on the ability of our PRC subsidiaries to paydividends or make other investments or acquisitions that could be beneficial to our business or otherwise fund and conduct our business.In addition, under the New EIT Law and the implementing rules that became effective on January 1, 2008, dividends generated from the business of our PRCsubsidiaries after January 1, 2008 and payable to us may be subject to a withholding tax rate of 10% if the PRC tax authorities subsequently determine that we are anonresident enterprise, unless there is a tax treaty with China that provides for a different withholding arrangement.Uncertainties with respect to the PRC legal system could adversely affect us.We conduct all of our business through our subsidiaries in China. Our operations in China are governed by PRC laws and regulations. Our PRCsubsidiaries are generally subject to laws and regulations applicable to foreign investments in China and, in particular, laws and regulations applicable to whollyforeignowned enterprises. The PRC legal system is based on statutes. Prior court decisions may be cited for reference but have limited precedential value.11Since 1979, PRC legislation and regulations have significantly enhanced the protections afforded to various forms of foreign investments in China.However, China has not developed a fully integrated legal system and recently enacted laws and regulations may not sufficiently cover all aspects of economicactivities in China. In particular, because these laws and regulations are relatively new, and because of the limited volume of published decisions and theirnonbinding nature, the interpretation and enforcement of these laws and regulations involve uncertainties. In addition, the PRC legal system is based in part ongovernment policies and internal rules (some of which are not published on a timely basis or at all) that may have a retroactive effect. As a result, we may not beaware of our violation of these policies and rules until some time after the violation. In addition, any litigation in China may be protracted and result in substantialcosts and diversion of resources and management attention.PRC regulation of loans and direct investment by offshore holding companies to PRC entities may delay or prevent us from using the proceeds of our May2010 public offering to make loans or additional capital contributions to our PRC operating subsidiaries, which could materially and adversely affect ourliquidity and our ability to fund and expand our business.In utilizing the proceeds of our May 2010 public offering as an offshore holding company of our PRC operating subsidiaries, we may make loans to our PRCsubsidiaries, or we may make additional capital contributions to our PRC subsidiaries. Any loans to our PRC subsidiaries are subject to PRC regulations. Forexample, loans by us to our subsidiaries in China, which are FIEs, to finance their activities cannot exceed statutory limits and must be registered with the StateAdministration of Foreign Exchange, or SAFE. On August 29, 2008, SAFE promulgated Circular 142, a notice regulating the conversion by a foreigninvestedcompany of foreign currency into RMB by restricting how the converted RMB may be used. The notice requires that RMB converted from the foreign currencydenominated capital of a foreigninvested company may only be used for purposes within the business scope approved by the applicable governmental authorityand may not be used for equity investments within the PRC unless specifically provided for otherwise. The foreign currencydenominated capital shall be verified byan accounting firm before converting into RMB. In addition, SAFE strengthened its oversight over the flow and use of RMB funds converted from the foreigncurrencydenominated capital of a foreigninvested company. To convert such capital into RMB, the foreigninvested company must report the use of such RMB tothe bank, and the RMB must be used to the reported purposes. According to Circular 142, change of the use of such RMB without approval is prohibited. Inaddition, such RMB may not be used to repay RMB loans if the proceeds of such loans have not yet been used. Violations of Circular 142 may result in severepenalties, including substantial fines as set forth in the Foreign Exchange Administration Rules.We may also decide to finance our subsidiaries by means of capital contributions. These capital contributions may need approval from the PRC Ministry ofCommerce, or MOFCOM, or its local counterpart. We may not be able to obtain these government approvals on a timely basis, if at all, with respect to future capitalcontributions by us to our PRC subsidiaries. If we fail to receive such approvals in such cases when approval is required, our ability to use the proceeds of our May2010 public offering and to capitalize our PRC operations may be negatively affected, which could adversely affect our liquidity and our ability to fund and expandour business.Governmental control of currency conversion may affect the value of your investment.The PRC government imposes controls on the convertibility of the RMB into foreign currencies and, in certain cases, the remittance of currency out ofChina. We receive substantially all of our revenues in RMB. Under our current corporate structure, our income is primarily derived from dividend payments from ourPRC subsidiaries. Shortages in the availability of foreign currency may restrict the ability of our PRC subsidiaries to remit sufficient foreign currency to paydividends or other payments to us, or otherwise satisfy their foreign currency denominated obligations. Under existing PRC foreign exchange regulations, paymentsof current account items, including profit distributions, interest payments and expenditures from traderelated transactions, can be made in foreign currencieswithout prior approval from SAFE by complying with certain procedural requirements. However, approval from appropriate government authorities is required whereRMB is to be converted into foreign currency and remitted out of China to pay capital expenses such as the repayment of loans denominated in foreign currencies.The PRC government may also at its discretion restrict access in the future to foreign currencies for current account transactions. If the foreign exchange controlsystem prevents us from obtaining sufficient foreign currency to satisfy our currency demands, we may not be able to pay dividends in foreign currencies to ourshareholders, including holders of our ADSs or ordinary shares.12Fluctuation in the value of the RMB may have a material adverse effect on the value of your investment.The value of the RMB against the U.S. dollar and other currencies may fluctuate and is affected by, among other things, changes in political and economicconditions. On July 21, 2005, the PRC government changed its decadeold policy of pegging the value of the RMB to the U.S. dollar. Under the new policy, the RMBis permitted to fluctuate within a narrow and managed band against a basket of certain foreign currencies. This change in policy has resulted in an approximate26.8% appreciation of the RMB against the U.S. dollar between July 21, 2005 and September 30, 2015. Provisions on Administration of Foreign Exchange, asamended in August 2008, further changed China’s exchange regime to a managed floating exchange rate regime based on market supply and demand. Since reachinga high against the U.S. dollar in July 2008, however, the RMB has traded within a narrow band against the U.S. dollar, remaining within 1% of its July 2008 high butnever exceeding it. As a consequence, the RMB has fluctuated sharply since July 2008 against other freelytraded currencies, in tandem with the U.S. dollar. InAugust 2015, the PRC Government devalued its currency by approximately 3%, representing the largest yuan depreciation for 20 years. Concerns remain thatChina’s slowing economy, and in particular its exports, will need a stimulus that can only come from further cuts in the exchange rate.It is difficult to predict how long the current situation may continue and when and how it may change again as the People’s Bank of China may regularlyintervene in the foreign exchange market to achieve economic policy goals. Substantially all of our revenues and costs are denominated in the RMB, and asignificant portion of our financial assets are also denominated in RMB. We principally rely on dividends and other distributions paid to us by our subsidiaries inChina. Any significant revaluation of the RMB may materially and adversely affect our cash flows, revenues, earnings and financial position, and the value of, andany dividends payable on, our ADSs or ordinary shares in U.S. dollars. Any fluctuations of the exchange rate between the RMB and the U.S. dollar could also resultin foreign currency translation losses for financial reporting purposes.PRC laws and regulations governing our businesses. If we are found to be in violation of such PRC laws and regulations, we could be subject to sanctions. Inaddition, changes in such PRC laws and regulations may materially and adversely affect our business.There are substantial uncertainties regarding the interpretation and application of PRC laws and regulations, including, but not limited to, the laws andregulations governing our business. These laws and regulations are relatively new and may be subject to change, and their official interpretation and enforcementmay involve substantial uncertainty. The effectiveness of newly enacted laws, regulations or amendments may be delayed, resulting in detrimental reliance byforeign investors. New laws and regulations that affect existing and proposed future businesses may also be applied retroactively.The PRC government has broad discretion in dealing with violations of laws and regulations, including levying fines, revoking business and other licensesand requiring actions necessary for compliance. In particular, licenses and permits issued or granted to us by relevant governmental bodies may be revoked at a latertime by higher regulatory bodies. We cannot predict the effect of the interpretation of existing or new PRC laws or regulations on our businesses. We cannot assureyou that our current ownership and operating structure would not be found in violation of any current or future PRC laws or regulations. As a result, we may besubject to sanctions, including fines, and could be required to restructure our operations or cease to provide certain services. In addition, any litigation in China maybe protracted and result in substantial costs and diversion of resources and management attention. Any of these or similar actions could significantly disrupt ourbusiness operations or restrict us from conducting a substantial portion of our business operations, which could materially and adversely affect our business,financial condition and results of operations.13If we were required to obtain the prior approval of the China Securities Regulatory Commission, or CSRC, of the listing and trading of our ADSs on theNASDAQ Capital Market, we may face regulatory actions or other sanctions from the CSRC or other PRC regulatory agencies.On August 8, 2006, six PRC regulatory agencies, including the Ministry of Commerce, the State Assets Supervision and Administration Commission, theState Administration for Taxation, the State Administration for Industry and Commerce, the CSRC and the SAFE, jointly issued the Regulations on Mergers andAcquisitions of Domestic Enterprises by Foreign Investors, which became effective on September 8, 2006 (the “New M&A Rules”). This regulation, among otherthings, includes provisions that purport to require that an offshore special purpose vehicle formed for the purposes of overseas listing of equity interests in PRCcompanies and controlled directly or indirectly by PRC companies or individuals obtain the approval of the CSRC prior to the listing and trading of such specialpurpose vehicle’s securities on an overseas stock exchange. On September 21, 2006, the CSRC published on its official website procedures regarding its approval ofoverseas listings by special purpose vehicles. The CSRC approval procedures require the filing of a number of documents with the CSRC and it would take severalmonths to complete the approval process, if practicable at all. The application of this new PRC regulation remains unclear with no consensus currently existingamong leading PRC law firms regarding the scope of the applicability of the CSRC approval requirement. Prior to our May 2010 initial public offering, our PRC counsel has advised us that, based on its understanding of the current PRC laws and regulations aswell as the procedures announced on September 21, 2006: (i) Softech was directly incorporated by Topsky as a foreign investment enterprise under PRC law;therefore, there was no acquisition of the equity of a “PRC domestic company” as defined under the New M&A Rules; and (ii) the contractual arrangementsbetween Kingtone Information and Softech were not clearly defined and considered as the transaction which shall be applied to the New M&A Rules. Therefore, wedid not seek prior CSRC approval for our initial public offering.However, if the CSRC required that we obtain its approval prior to the completion of our initial public offering and the listing of our ADSs on the NASDAQCapital Market, we may face regulatory actions or other sanctions from the CSRC or other PRC regulatory agencies. These regulatory agencies may impose fines andpenalties on our operations in the PRC, limit our operating privileges in the PRC, delay or restrict the repatriation of the proceeds from our initial public offering intothe PRC, or take other actions that could have a material adverse effect on our business, financial condition, results of operations, reputation and prospects, as wellas the trading price of our shares.Also, if the CSRC requires that we obtain its approval, we may be unable to obtain a waiver of the CSRC approval requirements if and when procedures areestablished to obtain such a waiver. Any uncertainties and/or negative publicity regarding this CSRC approval requirement could have a material adverse effect onthe trading price of our shares.PRC regulations relating to the establishment of offshore special purpose companies by PRC residents may subject our PRC resident shareholders to penaltiesand limit our ability to inject capital into our PRC subsidiaries, limit our PRC subsidiaries’ ability to distribute profits to us, or otherwise adversely affect us.On October 21, 2005, the SAFE issued the Notice on Issues Relating to the Administration of Foreign Exchange in Fundraising and Reverse InvestmentActivities of Domestic Residents Conducted via Offshore Special Purpose Companies, or Notice 75, which became effective as of November 1, 2005. According toNotice 75, prior registration with the local SAFE branch is required for PRC residents to establish or to control an offshore company for the purposes of financingsuch offshore company with assets or equity interests in an onshore enterprise located in the PRC, or an offshore special purpose company. An amendment toregistration or filing with the local SAFE branch by such PRC resident is also required for the injection of equity interests or assets of an onshore enterprise in theoffshore special purpose company or overseas funds raised by such offshore company, or any other material change involving a change in the capital of theoffshore special purpose company. Moreover, Notice 75 applies retroactively. As a result, PRC residents who have established or acquired control of offshorespecial purpose companies that have made onshore investments in the PRC in the past are required to have completed the relevant registration procedures with thelocal SAFE branch by March 31, 2006. To further clarify the implementation of Notice 75, the SAFE issued Circular 106 on May 29, 2007. Under Circular 106, PRCsubsidiaries of an offshore special purpose company are required to coordinate and supervise the filing of SAFE registrations by the offshore holding company’sshareholders or beneficial owners who are PRC residents in a timely manner.14Some of our current shareholders and/or beneficial owners may fall within the ambit of the SAFE notice and be required to register with the local SAFEbranch as required under the SAFE notice. If so required, and if such shareholders and/or beneficial owners fail to timely register their SAFE registrations pursuantto the SAFE notice, or if future shareholders and/or beneficial owners of our company who are PRC residents fail to comply with the registration procedures setforth in the SAFE notice, this may subject such shareholders, beneficial owners and/or our PRC subsidiaries to fines and legal sanctions and may also limit ourability to contribute additional capital into our PRC subsidiaries, limit our PRC subsidiaries’ ability to distribute dividends to our company, or otherwise adverselyaffect our business.Risks Associated with our ADSs and Ordinary SharesOur securities are not currently traded on any United States public markets and you may not be able to resell your securities for some time.There is currently no public market for our ordinary shares or American Depository Shares (“ADSs”) in the United States or in any other jurisdiction. OurADSs were voluntarily delisted from the NASDAQ Capital Market on September 19, 2018. We have applied to NASDAQ for the listing of our ordinary shares on theNASDAQ Capital Market and received an approval for listing of Ordinary Shares on August 6, 2018, and as of the date of this transition report, that application andapproval are currently under review. We cannot assume that our ordinary shares will be accepted for listing on the NASDAQ Capital Market, or if listed, that wewould continue to meet the applicable minimum listing requriements. You may not be able to sell your ordinary shares quickly or at all if we are unable to gain listingon a public market in the United States.The market price of our ADSs has historically been highly volatile, and you may not be able to resell our ordinary shares at or above your initial purchaseprice.There may be a limited public market for our ordinary shares and, as discussed above, our ADSs are no longer listed on any public market in the UnitedStates or any other jurisdiction. We cannot assure you that there will be an active trading market for our ordinary shares in the future. If our ordinary shares areaccepted for listing on a public market, you may not be able to sell your ordinary shares quickly or at the market price if trading in our ordinary shares is not active. The trading price of our ADSs and ordinary shares may be volatile. The price of our ADSs and ordinary shares could be subject to wide fluctuations inresponse to a variety of factors, including the following:1.Introduction of new products, services or technologies offered by us or our competitors;2.Failure to meet or exceed revenue and financial projections we provide to the public;3.Actual or anticipated variations in quarterly operating results;4.Failure to meet or exceed the estimates and projections of the investment community;5.General market conditions and overall fluctuations in United States equity markets;6.Announcements of significant acquisitions, strategic partnerships, joint ventures or capital commitments by us or our competitors;7.Disputes or other developments relating to proprietary rights, including patents, litigation matters and our ability to obtain patent protection for ourtechnologies;8.Additions or departures of key management personnel;9.Issuances of debt or equity securities;10.Significant lawsuits, including patent or shareholder litigation;11.Changes in the market valuations of similar companies;12.Sales of additional ordinary shares or other securities by us or our shareholders in the future;13.Trading volume of our ordinary shares;14.Fluctuations in the exchange rate between the U.S. dollar and Renminbi;15.Negative market perception and media coverage of our company or other companies in the same or similar industry with us; and16.Other events or factors, many of which are beyond our control.15In addition, the stock market in general, and the NASDAQ Capital Market and software products and services companies in particular, have experiencedextreme price and volume fluctuations that have often been unrelated or disproportionate to the operating performance of these companies. Broad market andindustry factors may negatively affect the market price of our ordinary shares, regardless of our actual operating performance. Our ADSs and ordinary shares may be subject to the SEC’s penny stock rules which may make it difficult for brokerdealers to complete customer transactionsand trading activity in our securities.Our ADSs and ordinary shares may be deemed to be “penny stock” as that term is defined under the Securities Exchange Act of 1934, as amended. Pennystocks generally are equity securities with a price of less than $5.00 (other than securities registered on certain national securities exchanges or quoted on theNASDAQ system, provided that current price and volume information with respect to transactions in such securities is provided by the exchange or system). Pennystock rules impose additional sales practice requirements on brokerdealers who sell to persons other than established customers and “accredited investors.” Theterm “accredited investor” refers generally to institutions with assets in excess of $5,000,000 or individuals with a net worth in excess of $1,000,000 or annual incomeexceeding $200,000 or $300,000 jointly with their spouse in each of the prior two years.The penny stock rules require a brokerdealer, prior to a transaction in a penny stock not otherwise exempt from the rules, to deliver a standardized riskdisclosure document in a form prepared by the SEC, which provides information about penny stocks and the nature and level of risks in the penny stockmarket. Moreover, brokerdealers are required to determine whether an investment in a penny stock is a suitable investment for a prospective investor. A brokerdealer must receive a written agreement to the transaction from the investor setting forth the identity and quantity of the penny stock to be purchased. Theserequirements may make it more difficult for brokerdealers to effectuate customer transactions and trading activity in our securities. As a result, the market price ofour ADSs and ordinary shares may be depressed, and you may find it more difficult to sell our ADSs or ordinary shares.Sales of a substantial number of ordinary shares or ADSs in the public market by our existing shareholders could cause the price of our ADSs to fall.Sales of a substantial number of our ordinary shares or ADSs in the public market or the perception that these sales might occur, could depress the marketprice of our ADSs and could impair our ability to raise capital through the sale of additional equity securities. We are unable to predict the effect that sales may haveon the prevailing market price of our ADSs.All of our existing shareholders prior to our May 2010 offering were subject to lockup agreements with the underwriters of the offering that restricted theshareholders’ ability to transfer ordinary shares or ADSs until expiration of the lockup period in November 2010. The lockup agreements limited the number ofordinary shares or ADSs that may be sold immediately following the public offering. Subject to certain limitations, approximately 1,000,000 of our total outstandingshares are now eligible for sale. Sales of ordinary shares by these shareholders could have a material adverse effect on the trading price of our ADSs.Future sales and issuances of our ordinary shares, or rights to purchase our ordinary shares, including pursuant to our 2010 Omnibus Incentive Plan, couldresult in additional dilution of the percentage ownership of our shareholders and could cause the price of our ordinary shares to fall.We expect that significant additional capital will be needed in the future to continue our planned operations. To the extent we raise additional capital byissuing equity securities, our shareholders may experience substantial dilution. We may sell ordinary shares, convertible securities or other equity securities in oneor more transactions at prices and in a manner we determine from time to time. If we sell ordinary shares, convertible securities or other equity securities in more thanone transaction, investors may be materially diluted by subsequent sales. Such sales may also result in material dilution to our existing shareholders, and newinvestors could gain rights superior to our existing shareholders.16We do not intend to pay dividends on our ordinary shares, so any returns will be limited to the value of our ADSs and ordinary shares.We have never declared or paid any cash dividend on our ordinary shares. We currently anticipate that we will retain future earnings for the development,operation and expansion of our business and do not anticipate declaring or paying any cash dividends for the foreseeable future. Any return shareholders willtherefore be limited to the value of their ADSs or ordinary shares.As the rights of shareholders under British Virgin Islands law differ from those under U.S. law, you may have fewer protections as a shareholder.Our corporate affairs will be governed by our memorandum of association and articles of association, the BVI Business Companies Act, 2004, or the BVIAct, of the British Virgin Islands and the common law of the British Virgin Islands. The rights of shareholders to take legal action against our directors, actions byminority shareholders and the fiduciary responsibilities of our directors under British Virgin Islands law are to a large extent governed by the BVI Act and thecommon law of the British Virgin Islands. The common law of the British Virgin Islands is derived in part from comparatively limited judicial precedent in the BritishVirgin Islands as well as from English common law, which has persuasive, but not binding, authority on a court in the British Virgin Islands. The rights of ourshareholders and the fiduciary responsibilities of our directors under British Virgin Islands law are not as clearly established as they would be under statutes orjudicial precedents in some jurisdictions in the United States. In particular, the British Virgin Islands has a less developed body of securities laws as compared to theUnited States, and some states (such as Delaware) have more fully developed and judicially interpreted bodies of corporate law.As a result of all of the above, holders of our ADSs and ordinary shares may have more difficulty in protecting their interests through actions against ourmanagement, directors or major shareholders than they would as shareholders of a U.S. company.British Virgin Islands companies may not be able to initiate shareholder derivative actions, thereby depriving shareholders of the ability to protect theirinterests.British Virgin Islands companies may not have standing to initiate a shareholder derivative action in a federal court of the United States. The circumstancesin which any such action may be brought, and the procedures and defenses that may be available in respect to any such action, may result in the rights ofshareholders of a British Virgin Islands company being more limited than those of shareholders of a company organized in the United States. Accordingly,shareholders may have fewer alternatives available to them if they believe that corporate wrongdoing has occurred. The British Virgin Islands courts are alsounlikely to recognize or enforce against us judgments of courts in the United States based on certain liability provisions of U.S. securities law; and to imposeliabilities against us, in original actions brought in the British Virgin Islands, based on certain liability provisions of U.S. securities laws that are penal in nature.There is no statutory recognition in the British Virgin Islands of judgments obtained in the United States, although the courts of the British Virgin Islands willgenerally recognize and enforce the nonpenal judgment of a foreign court of competent jurisdiction without retrial on the merits.The laws of the British Virgin Islands provide little protection for minority shareholders, so minority shareholders will have little or no recourse if theshareholders are dissatisfied with the conduct of our affairs.Under the law of the British Virgin Islands, there is little statutory law for the protection of minority shareholders other than the provisions of the BVI Actdealing with shareholder remedies. The principal protection under statutory law is that shareholders may bring an action to enforce the constituent documents ofthe corporation, our memorandum of association and articles of association. Shareholders are entitled to have the affairs of the company conducted in accordancewith the general law and the memorandum of association and articles of association.17There are common law rights for the protection of shareholders that may be invoked, largely dependent on English company law, since the common law ofthe British Virgin Islands is limited. Under the general rule pursuant to English company law known as the rule in Foss v. Harbottle, a court will generally refuse tointerfere with the management of a company at the insistence of a minority of its shareholders who express dissatisfaction with the conduct of the company’s affairsby the majority or the board of directors. However, every shareholder is entitled to have the affairs of the company conducted properly according to law and thecompany’s constituent documents. As such, if those who control the company have persistently disregarded the requirements of company law or the provisions ofthe company’s memorandum of association and articles of association, then the courts will grant relief. Generally, the areas in which the courts will intervene are thefollowing: (1) an act complained of which is outside the scope of the authorized business or is illegal or not capable of ratification by the majority; (2) acts thatconstitute fraud on the minority where the wrongdoers control the company; (3) acts that infringe on the personal rights of the shareholders, such as the right tovote; and (4) where the company has not complied with provisions requiring approval of a majority of shareholders, which are more limited than the rights affordedminority shareholders under the laws of many states in the United States.Antitakeover provisions in our memorandum of association and articles of association and our right to issue preference shares could make a thirdpartyacquisition of us difficult.Some provisions of our memorandum of association and articles of association may discourage, delay or prevent a change in control of our company ormanagement that shareholders may consider favorable, including provisions that authorize our board of directors to issue preference shares in one or more seriesand to designate the price, rights, preferences, privileges and restrictions of such preference shares.If you hold our ADSs, you may not have the same voting rights as the holders of our ordinary shares and must act through the depositary to exercise your rights.Holders of our ADSs will not be able to exercise voting rights attaching to the shares evidenced by our ADSs on an individual basis. Holders of our ADSswill appoint the depositary or its nominee as their representative to exercise the voting rights attaching to the shares represented by the ADSs. You may not receivevoting materials in time to instruct the depositary to vote, and it is possible that you, or persons who hold their ADSs through brokers, dealers or other third parties,will not have the opportunity to exercise a right to vote. Upon our written request, the depositary will mail to you a shareholder meeting notice which contains,among other things, a statement as to the manner in which your voting instructions may be given, including an express indication that such instructions may begiven or deemed given to the depositary to give a discretionary proxy to a person designated by us if no instructions are received by the depositary from you on orbefore the response date established by the depositary. However, no voting instruction shall be deemed given and no such discretionary proxy shall be given withrespect to any matter as to which we inform the depositary that (i) we do not wish such proxy given, (ii) substantial opposition exists, or (iii) such matter materiallyand adversely affects the rights of shareholders. We will make all reasonable efforts to cause the depositary to extend voting rights to you in a timely manner, butyou may not receive the voting materials in time to ensure that you can instruct the depositary to vote your ADSs. Furthermore, the depositary and its agents willnot be responsible for any failure to carry out any instructions to vote, for the manner in which any vote is cast or for the effect of any such vote. As a result, youmay not be able to exercise your right to vote and you may lack recourse if your ADSs are not voted as you requested. In addition, in your capacity as an ADSholder, you will not be able to call a shareholders’ meeting.You may not be able to participate in rights offerings and may experience dilution of your holdings as a result.We may from time to time distribute rights to our shareholders, including rights to acquire our securities. However, we may not, and under the depositagreement for the ADSs, the depositary will not, offer those rights to ADS holders unless both the rights and the underlying securities to be distributed to ADSholders are registered under the Securities Act, or the distribution of them to ADS holders is exempted from registration under the Securities Act with respect to allholders of ADSs. We are under no obligation to file a registration statement with respect to any such rights or underlying securities or to endeavor to cause such aregistration statement to be declared effective. In addition, we may not be able to rely on an exemption from registration under the Securities Act to distribute suchrights and securities. Accordingly, holders of our ADSs may be unable to participate in our rights offerings and may experience dilution in their holdings as a result.You may be subject to limitations on transfer of your ADSs.Your ADSs are transferable on the books of the depositary. However, the depositary may close its transfer books at any time or from time to time when itdeems expedient in connection with the performance of its duties. In addition, the depositary may refuse to deliver, transfer or register transfers of ADSs generallywhen our books or the books of the depositary are closed, or at any time if we or the depositary deem it advisable to do so because of any requirement of law or ofany government or governmental body, or under any provision of the deposit agreement, or for any other reason.18We may be a passive foreign investment company, of PFIC, which could lead to additional taxes for U.S. holders of our ADSs or ordinary shares.We do not expect to be, for U.S. federal income tax purposes, a passive foreign investment company, or a PFIC, which is a foreign company for which, inany given taxable year, either at least 75% of its gross income is passive income, or investment income in general, or at least 50% of its assets produce or are held toproduce passive income, for the current taxable year, and we expect to operate in such a manner so as not to become a PFIC for any future taxable year. However,because the determination of PFIC status for any taxable year cannot be made until after the close of such year and requires extensive factual investigation,including ascertaining the fair market value of our assets on a quarterly basis and determining whether each item of gross income that we earn is passive income, wecannot assure you that we will not become a PFIC for the current taxable year or any future taxable year. If we are or become a PFIC, a U.S. holder of our ADSs orordinary shares could be subject to additional U.S. federal income taxes on gain recognized with respect to the ADSs or ordinary shares and on certain distributions,plus an interest charge on certain taxes treated as having been deferred under the PFIC rules. Noncorporate U.S. holders will not be eligible for reduced rates oftaxation on any dividends received from us if we are a PFIC in the taxable year in which such dividends are paid or in the preceding taxable year.If our ordinary shares are listed on the NASDAQ Capital Market and the trading price of our ordinary shares fails to comply with the continued listingrequirements of the NASDAQ Capital Market, we would face possible delisting, which would result in a limited public market for our ordinary shares andmake obtaining future debt or equity financing more difficult for us.Companies listed on NASDAQ are subject to delisting for, among other things, failure to maintain a minimum closing bid price of $1.00 per share for 30consecutive business days. On December 19, 2011, we received a letter from NASDAQ indicating that for the last 30 consecutive business days, the closing bidprice of our ADSs fell below the minimum $1.00 per share requirement pursuant to NASDAQ Listing Rule 5550(a)(2) for continued listing on the NASDAQ CapitalMarket. We regained compliance with the minimum bid price requirement for continued listing set forth in NASDAQ Listing Rule 5550(a)(2), as its ADS with itsunderlying ordinary share has achieved a closing bid price of $1.00 or greater for the 10 consecutive business days from November 6 to November 23, 2012 byimplementing a 1for10 combination, or reverse split of the ordinary shares effective November 6, 2012. When listed, we cannot be sure that the price of our ordinaryshares will comply with this requirement for continued listing on the NASDAQ Capital Market in the future. If we were not able to do so, our ordinary shares wouldbe subject to delisting and would likely trade on the overthecounter market. If our ordinary shares were to trade on the overthecounter market, selling ourordinary shares could be more difficult because smaller quantities of shares would likely be bought and sold, transactions could be delayed, and security analysts’coverage of us may be reduced. In addition, brokerdealers have certain regulatory burdens imposed upon them, which may discourage brokerdealers from effectingtransactions in our ordinary shares, further limiting the liquidity of our ordinary shares. As a result, the market price of our ordinary may be depressed, and you mayfind it more difficult to sell our ordinary shares. Such delisting from the NASDAQ Capital Market and continued or further declines in our share price could alsogreatly impair our ability to raise additional necessary capital through equity or debt financing.ITEM 4. INFORMATION ON THE COMPANY.A . HISTORY AND DEVELOPMENT OF THE COMPANY.OverviewWe are a holding company and conduct our operations through our whollyowned subsidiary named LK Technology Ltd., a British Virgin Islands limitedliability company (“LK Technology”), and its whollyowned subsidiaries, MMB Limited and Mobile Media (China) Limited and their respective subsidiaries, whichhold the rights to deploy WiFi systems on about 700 trains in China, including 290 trains in which WiFi systems have already been installed and are in operation. InMay 2010, we consummated an initial public offering of our American Depository Shares, or ADSs, for gross proceeds of $16 million, and our ADSs were listed onthe NASDAQ Capital Market under the ticker symbol “KONE”. Our ordinary shares are not currently listed on any trading market. Our American Depository Shares(“ADSs”) were voluntarily delisted from the NASDAQ Capital Market on September 19, 2018. We have applied to NASDAQ for the listing of our ordinary shares onthe NASDAQ Capital Market and received an approval for listing of Ordinary Shares on August 6, 2018, and as of the date of this transition report, that applicationand approval are currently under review.19On August 17, 2018, we consummated an asset exchange transaction, pursuant to which we exchanged all issued and outstanding capital stock in TopskyInfoTech Holdings Pte Ltd., the parent of Softech, for the issued and outstanding capital stock of LK Technology (the “Asset Exchange”). In connection with theAsset Exchange, we changed our name on August 20, 2018, and on September 20, 2018, issued to the shareholders of C Media Limited, the former parent of LKTechnology, (i) 185,412,599 of our ordinary shares, par value $0.01 per share and (ii) 1,000,000 of our preferred shares. Upon the consummation of the AssetExchange, we ceased our previous business operations and became a company focused on the provision of WiFi and mobile application products for long distancerail travelers in China.On August 25, 2018, LK Technology entered into a Stock Purchase Agreement (the “Agreement”) with the shareholders (“Shareholders”) of SuperengineHoldings Limited, a limited liability company organized under the laws of the British Virgin Islands (the “Superengine”), pursuant to which LK Technology acquiredall of the issued and outstanding capital stock of Superengine for an aggregate purchase price of US$60 million (the “Purchase Price”), which are paid by theissuance of our Ordinary Shares in an amount equal to the quotient of (x) the Purchase Price divided by (y) the average of the closing prices of the Ordinary Shareson the NASDAQ Capital Market over the 12 months period preceding July 31, 2018. We are a party to the Agreement in connection with the issuance of theOrdinary Shares and certain other limited purposes.Corporate InformationOur principal executive offices are located at LAB32, SOHO 3Q, No 9, Guanghua Road, Chaoyang District, Beijing, People’s Republic of China 100020. Ourwebsite is www.luokung.com. We routinely post important information on our website. The information contained on our website is not a part of this transitionreport.Our agent for service of process in the United States is Worldwide Stock Transfer, LLC, the current transfer agent of the Company, with a mailing address ofOne University Plaza, Suite 505, Hackensack, New Jersey 07601.B. BUSINESS OVERVIEW.We are a Chinabased provider of rail WiFi and mobile application products for long distance travelers in China. Our primary mobile application, theLuoKuang platform, consists of the LuoKuang mobile applications, a series of supporting software at the server end, and railWiFi hardware and equipment on thetrains that we serve. The LuoKuang platform incorporates technology covered by 22 patents and about 34 software copy rights, and serves as a content and servicedistribution platform that is tailored for particular travel stages featuring geographic location and social interaction. The content and services distributed byLuoKuang contain information, entertainment, travel, ecommerce, online to offline (“O2O”), advertisement and marketing features.LuoKuang mainly provides personalized and precise services to long distance travelers in two locations: on the train and at the destination. Based on thetravel environment, the core elements of our users’ needs include staving off boredom on trains and discovering and exploring new locations upon arrival. The mainservices contain entertainment services (videos and audio, digital readings, games specific and tailored to the travel stage) and social services (satisfying thedemand for value discovery of unfamiliar destinations through social interaction among strangers based on locations). As of December 31, 2017, the LuoKuangplatform featured about 38 million users.The setting services on the train focus on providing entertainment content for passengers to pass time during longdistance travel in closed environments.For example, we provide access to long video formats such as movies and TV shows, short videos, music, digital readings and games.20We use the most valuable WiFi location—the train WiFi setting—as the entrance of our LuoKuang platform and mobile applications. Passengers typicallyride trains for longdistance and interprovincial travel purposes. The long periods of monotonous journeys and the cost concerns for roaming traffic fees enable thecombination of entertainment content service needs and WiFi access needs. Our railWiFi becomes a valuable and sophisticated WiFi service in this setting—notjust WiFi connection service, but a provider of sophisticated services through a WiFi connection. In addition, the annual traffic of 800,000 passengers onboardeach train makes rail WiFi a huge entry point for mobile applications. We do not define ourselves as a train WiFi communication service operator but as a longdistance travel mobile service provider. We provide users with free WiFi access so that users are able to connect to the LuoKuang platform and thus access relatedentertainment services, services on the train and destination services. The rail WiFi is our access point to a significant pool of users and the entrance to acquiringadditional users.The setting services focus on providing targeted push services to users while travelling in unfamiliar cities. Information and service guidance are preciselypushed to appeal to the interests and tastes (eating, drinking, shopping, touring and culture) of individual users (cuisine specialties and local snacks, local events,viewing sights, culture, history, stories). The service guidance is generated, shared and distributed by individual users (travelers, local residents, local businesses)interacting with current locations and featuring users who generated contents from selfmedia and small and medium vertical contents providers).Based on the GIS (geoinformation system), Superengine is a provider of big spatialtemporal data, network graphic image technology and relevant service.Its super engine series includes computer graphic image engines and spatial database engines. Spatialtemporal cloud index is the core of the company’s spatialtemporal data engines. It is equivalent to the neural network of the big data and the Internet. It extends the value of its products and platform to its data serviceproviders. In cooperation, its service providers can be divided into three categories, namely, basic geographic data providers, industrial data providers andbehavioral data providers). Superengine’s industriesoriented spatialtemporal data engine was launched in 2016. The spatialtemporal GIS platform has been appliedin industries such as aerospace, power grid, surveying & mapping, agriculture, cultural relic preservation, water conservancy, public security, railway section, smartcities, and business location selection.Our primary sources of revenue are advertising and marketing promotion revenues.Our Industry — Mobile Internet IndustryOur products and services are engaged in the mobile internet industry. Our main services consist of entertainment services (videos, audio, digital readings,games that are tailormade for passengers on train) and other services including satisfying the demand for value discovery of unfamiliar destinations through socialinteractions among strangers based in such locations). The mobile internet industry in China is rapidly growing and is likely to be in a longterm growth trend.According to the Mobile Internet Blue Book of China Mobile Internet Report, in 2017 the market size of China mobile internet reached RMB 605 billion. Now China isin a leading position in terms of smartphone, mobile communication network and mobile application services. The pool of users is anticipated to keep expandingthrough the promotion and popularization of smartphones and the expansion of the mobile internet market.Video is the leading online entertainment format in China. According to the iResearch Report, over 80% of total time spent by users on online entertainmentin China in 2016 was internet video. Online entertainment, especially internet video, is attractive to Chinese users due to many favorable factors, including easyaccessibility, wide content selection, and innovative platforms with social features.For 2017, the transaction volume of China mobile ecommerce market reached to over RMB 4 trillion according to the China Mobile Ecommerce IndustryResearch Report from iResearch, representing an increase of 19.1%. For the next few years, China mobile online shopping will likely maintain steady growth. Thefocal point of competition in China mobile ecommerce market has shifted from infrastructure service providers to integrated and accurate services providers.Drawing in users with compelling content in diversified scenes has become a trend.21The revenue for China mobile gaming industry reached RMB 144.58 billion for the year of 2017, according to the China Mobile Game Industry ResearchReport from iResearch. With increased investment by largescale enterprises in the sector of mobile games and the strict enforcement of the mobile game industryrelated regulatory policy guidelines, the mobile game market as a whole will become more organized and standardized.According to the Annual Analysis of China Mobile Reading Industry from Analysis, for the year of 2017, the mobile reading market in China reached toRMB 14.04 billion. By the end of 2016, the size of China mobile's reading market reached RMB 11.86 billion, showing an increase of 18.38% in 2017.The closed and boring environment for passengers of longdistance travel and high roaming charges lead to a strong demand to use our rail WiFi services.Passengers, through their own mobile phone, have access to the free WiFi network in each carriage, access to our rich mobile internet entertainment content andtravel services. According to the annual statistical bulletin of China Railway Corporation in 2017, there were about 6,030 trains in operation in China in 2017,consisting of 2,935 high speed trains and 3,095 express trains. The rail WiFi system that we have installed are currently all on express trains. The market value will bemultiplied several times following the extended coverage of service on other trains.Our StrengthsWe believe the following strengths differentiate us from our competitors:Our strategy is to build up personalized and targeted service products for travelers through rail WiFi networks, enabling our services to evolve into a coredriving distribution platform that provides content, news, games, ecommerce, OTO service, travel services and advertising and marketing. In comparison, ourcompetitors offer simple forms of media services on trains. We focus on personalized and targeted matching between users on long distance trips and services. Ourcompetitors focus on operating and generating internet traffic.We possess a complete set of technology system including network, client end and service and operation platform. We have patent protections for WiFiequipment on trains. Our technology strengths are briefly summarized below.WiFi EquipmentPatent protected. Supports WiFi/3G/4G telecom modules; 4 core CPU with X86 architecture, and SSD hard disk with big storage for localcontents.InfrastructureThe technology infrastructures include the application program system, big data gathering and processing systems, intelligence cloudsservice deployment structure systems and our WiFi hardware server deployment structure system. The operation center, big data center,contents center and railWiFi server system are built on this infrastructure. On the above layer, the equipment management platform,account and payment platform, contents management platform and advertisement distribution platform are set up for daily managementpurpose.LuoKuang strengthens the connection of services among people, setting and locations. In catering to people on the move, we anticipate strengthening therelationship between users and their locations in a given moment. Currently, LuoKuang provides the link between users and thirdparty service providers andprovides value added services to both users and thirdparty service providers. The connection is not simply a traffic diversion, but also the direct presentation ofrelevant services in the LuoKuang platform. The open API interface and independent product software package allows easy access by service providers anddevelopers and supports data service, advertisement operations, billing, users promotion and product marketing services. As an API product, LuoKuang does notcreate content or services. The content and services are provided by our partners in the LuoKuang platform. Now, the majority of top mobile internet content andservices providers in China have a presence in the Luokuang platform. Those include, but are not limited to, Toutiao, Wangyi News, iqiyi, Letv, YoudianCinema(Hollywood films), Sohu video, Phoenix Video, Kugou Music, FM Qingting, iReader, Baidu Literature, Phoenix Novel, Baidu Game, Meituan, Dianping, andsimilar content providers.22Our StrategyLuoKuang is positioned to provide API interface services and geographic information social services. The API interface services are provided within thetypical BC model. LuoKuang pushes the content and services from thirdparty service providers to users. The local businesses, service practitioners, residents, andforeign travelers are all defined as a “user” and may participate in social interactions based on local value information and generate UGC content. The socalled localvalue information is defined as information, views, evaluations, experiences and experience sharing related to the local cultural scene, native products,entertainment, food, tourism and activities.The LuoKuang user growth strategy is to have access to users through the travelers’ use of mobile devices in connection with longdistance train travel.Through deploying WiFi systems on trains and providing free WiFi access to passengers, LuoKuang is able to have consistent access to longdistance travelers.The WiFi system on the train has become a powerful user portal at the early stage of LuoKuang and has gained substantial user traffic. We are in a leading positionin terms of numbers of trains contracted and trains in operation with our free WiFi system. We have contracted with about 700 trains, which cover almost 560 millionannual passenger trips. As of the date of this report, approximately 290 trains are operating our rail WiFi system. We will continue to install our rail WiFi system inthe following years.The development strategy for LuoKuang encompasses the following:1.Enhance our local cycle service (a recommendation service system based on the location of travelers after their arrival, recommendations includingtourist attractions, local specialties and other items of interest), strengthen services for arrivals in the form of social interaction and focus on the valueof relationships between users and their current locations.2.Focus on the development of geographic positioning technology. Get the business of local cycle and users on train mixed together. We will put oureffort to maximize the synergy effect.3.Big Data: Behavior data about passenger trips is obtained via the traffic entrance of rail WiFi and these data will help to optimize our product.4.While enhancing setting service experiences and optimizing entertainment experiences, we will enrich ecommerce services on trains featuringrecommendations of customized products and ecommerce shopping guidance of products labeled with specific geographic location (and trafficdiversion).5.Focus on API positioning and attract more premium vertical service providers (contents and services).Intellectual PropertyWe have registered the following software copyrights, patents and trademarks for our business operations. We believe this intellectual property forms anintegral part of our competitive strength.23Patents:We have been granted some inventions by the State Intellectual Property Office of PRC. We possess a complete set of technology system includingnetwork, client end and service and operation platform. We have patent protections for WiFi equipment on trains. We have received the following patents:No.Name of patentTypeRegistrationNumberDate of Insurance1.Wireless communication multimedia chip business consumer informationacquisition terminal deviceInventionZL 2010 2 0528767.9Sep 21, 20112.A user behavior processing method and device for intelligent terminalInventionZL 2013 1 0301728.3May 27, 20153.A global positioning system terminal deviceInventionZL 2010 2 0253452.8Nov 7, 20114.A wireless multimedia serverInventionZL 2013 2 0220183.9Nov 13, 20135.Ordering system of passengers on trainInventionZL 2015 2 0095381.6Aug 5, 20156.A wireless multimedia serverInventionZL 2015 2 0201382.4Oct 28, 20157.An antenna structureInventionZL 2016 2 0424352.4Mar 1, 20178.Spatial data progressive transmission method and deviceInvention201010617383.9Jun 15, 20169.Methods and devices for conflict detection and avoidance of spatial entity elementlabelingInvention201010617385.8Mar 26, 201410.Spatial data processing method and deviceInvention201010617399.XJun 26, 201311.Method and device of spatial data simplificationInvention201010617400.9Mar 13, 201312.Method and device for judging the occlusion type of space entityInvention201010617403.2Sep 25, 201313.A method and device for distributed mapping of 3d model dataInvention201110274924.7Mar 26, 201414.Data simplification of 3d model, gradual transmission method and deviceInvention201110275336.5Mar 25, 201515.Spatial data transmission method and deviceInvention201110306393.5Dec 13, 201416.Methods and devices for spatial data processing, simplification and progressivetransmissionInvention201210104250.0Jun 10, 201517.Spatial data progressive transmission method and deviceInvention201310367021.2Jun 23, 201718.Simplification method and device of spatial dataInvention201310367128.7Sep 22, 201719.The method and device to accelerate transmission and display of graphic dataacross platformsInvention201210116149.7Aug 10, 201620.Methods and devices related to spatial data compression, decompression andprogressive transmissionInvention201310136682.4Nov 10, 2017We also have two patents outside of China.No.Name of patentCountryNationalRegistrationNumberDate ofInsurance1.Spatial data processing method and deviceJapan2012547439Jun 20, 20142.Methods and devices related to spatial data compression, decompression andprogressive transmissionU.S.A14/394,610Sep 5, 201724Software Copyrights:We have received the following software copyrights from the National Copyright Administration (“NCA”) of PRC:No.Name of CopyrightAchievement approachRegistration numberTime of obtainExpire time1.WAP PUSH Business operation platformsystemIndependent research anddevelopment2007SRBJ1464Jul 23, 200750 years2.TDSCDMA Streaming media businessmanagement platform software V1.0Independent research anddevelopment2009SRBJ0412Jan 22, 200950 years3.Content management platform systemsoftware V1.0Independent research anddevelopment2009SRBJ1374Apr 1, 200950 years4.Mobile multimedia broadcast electronicservice guide system software V1.0Independent research anddevelopment2009SRBJ1365Apr 1, 200950 years5.Mobile video business operation platformsystem V1.0Independent research anddevelopment2007SRBJ1463Jul 23, 200750 years6.Mobile multimedia broadcast emergencybroadcast platform software V1.0Independent research anddevelopment2010SRBJ0720Mar 5, 201050 years7.Mobile multimedia broadcast audio richmedia interactive platform softwareV1.0Independent research anddevelopment2010SRBJ0719Mar 5, 201050 years8.Printer typesetting and printing softwareV1.0Independent research anddevelopment2011SRBJ4190Sep 28, 201150 years9.Electronic newspaper business supportplatform software V1.0Independent research anddevelopment2011SRBJ4186Sep 28, 201150 years10.Public information business platformsoftware V1.0Independent research anddevelopment2011SRBJ3810Sep 27, 201150 years11.User interface scripting software V1.0Independent research anddevelopment2011SRBJ3809Sep 27, 201150 years12.Integrated business management platformsoftware V1.0Independent research anddevelopment2012SR003002Jan 16, 201250 years13.Interactive business development platformsoftwareIndependent research anddevelopment2011SRBJ4593Nov 29, 201150 years14.Instant messaging and messaging systemsoftwareIndependent research anddevelopment2014SR122231Aug 5, 201450 years15.General statistical platform software forclient productsIndependent research anddevelopment2014SR216662Dec 30, 201450 years16.CMMB Data broadcast managementplatform softwareIndependent research anddevelopment2009SRBJ0391Jan 22, 200950 years17.Integrated passenger train service systemIndependent research anddevelopment2012SR083665Sep 5, 201250 years25No.Name of CopyrightAchievement approachRegistration numberTime of obtainExpire time18.JHBY Train inspection managementsystemIndependent research anddevelopment2013SR015105Feb 21, 201350 years19.Integrated information engine platformsoftware V1.0Independent research anddevelopment2014SR040347Nov 30, 200150 years20.Super information engine developmentplatform software V5.0Independent research anddevelopment2014SR036792Mar 5, 200350 years21.Core map super network informationengine platform software V1.0Independent research anddevelopment2014SR036772Sep 15, 200750 years22.Integrated management of the grid gissoftware V1.0Independent research anddevelopment2014SR036808Jun 20, 200850 years23.Core map rural power grid equipment GPSpatrol system software V1.0Independent research anddevelopment2014SR036810Dec 10, 200850 years24.Diagram grid patrol PDA system softwareV1.0Independent research anddevelopment2014SR036778Dec 12, 200850 years25.Core map geographic information enginedesktop platform software V1.0Independent research anddevelopment2014SR036614Jan 15, 200950 years26.Integrated management of the gridgeographic information Web systemsoftware V1.0Independent research anddevelopment2014SR036799Mar 10, 200950 years27.Core map railway power supply equipmentGPS patrol system software V1.0Independent research anddevelopment2014SR036783Mar 25, 201050 years28.Core map network 3 d map server softwareV1.0Independent research anddevelopment2014SR036788Feb 20, 201150 years29.Core map network 3d map clientsoftwareV1.0Independent research anddevelopment2014SR036637Feb 22, 201150 years30.Core map 3d map network publishingplatform software V1.0Independent research anddevelopment2014SR036633Mar 10, 201150 years31.Core map 3d map network release pluginsystem software V1.0Independent research anddevelopment2014SR036622Mar 15, 201150 years32.Core map network 3d map smartphoneplatform software V1.0Independent research anddevelopment2014SR036638Apr 28, 201150 years33.Core map network GIS Shared mobileplatform software V1.0Independent research anddevelopment2014SR036634Oct 31, 201150 years34.Core map network GIS sharing platformsoftware V1.0Independent research anddevelopment2014SR036639Dec 16, 201150 yearsTrademarks:We have registered the following trademarks with the Trademark Office, State Administration for Industry and Commerce in the PRC:NoTrademarkClassification NumberValid PeriodRegistration Number1Y图形382010.04.212020.04.2067460692Y图形412010.09.072020.09.0667460673YRADIO文字352010.07.212020.07.2067334374YRADIO文字382010.04.21.2020.04.2067334385YRADIO文字412010.09.072020.09.0667334396LookLook图形382009.04.072019.04.0646660517LookLook图形422008.12.212018.12.2046660508YTV文字352010.07.212020.07.2067335799YTV文字382010.05.282020.05.27673357810YTV文字412010.09.072020.09.06673358111YTV文字422010.09.072020.09.06673358012YOUTV文字352010.07.212020.07.20673344013YOUTV文字382010.05.282020.05.27673344114xfeng文字352012.03.282022.03.27922914526NoTrademarkClassification NumberValid PeriodRegistration Number15xfeng文字382012.03.282022.03.27922916016xfeng文字412012.03.282022.03.27922919017xfeng文字422012.03.282022.03.27922922118中传视讯文字+图形422008.12.212018.12.20466604719中传视讯文字422008.12.212018.12.20466604820中传视讯文字382008.12.212018.12.20466604921新蜂文字382011.08.212021.08.20853890722新蜂文字422012.01.282022.01.27853907823新蜂.潮文字382011.08.212021.08.20853910424新蜂.潮文字422012.01.282022.01.27853914125新影力412014.08.282024.08.271228864326小人图形352014.08.282024.08.271228798527小人图形382014.08.282024.08.271228858028小人图形412014.08.282024.08.271228862929小人图形422014.08.282024.08.271228843530中传文字382014.08.282024.08.271228826731中传图形382014.08.282024.08.271228828932中童文字412014.08.072024.08.061221408533中童在线文字412014.08.072024.08.061221409234翠鸟文字382014.08.072014.08.061221405835翠鸟文字422014.08.072014.08.061221412536爱翠鸟文字382014.08.072024.08.061221406637爱翠鸟文字412014.08.072024.08.061221409638爱翠鸟文字422014.08.072024.08.061221412639翠鸟图形352014.08.072024.08.061221404040翠鸟图形382014.08.072024.08.061221407441翠鸟图形412014.08.072024.08.061221410042翠鸟图形422014.08.072024.08.061221413143信号小喇叭图形+CMEDIA412015.03.212025.03.201248043944LookLook图形382015.11.142025.11.131153342845LookLook图形422014.06.212024.06.201153372046LookLook文字382014.07.142024.07.131153406747LookLook文字422014.04.142024.04.131153422748L图形352014.02.282024.02.271153500249L图形382014.02.282024.02.271153507350L图形412014.02.282024.02.271153518151L图形422014.02.282024.02.271153526252箩筐图形412016.06.142026.06.131658022853箩筐图形422016.06.142026.06.131658022754箩筐文字422016.09.282026.09.271658024955箩筐文字412016.06.142026.06.131658025056箩筐文字352016.09.212026.09.201658025257箩筐文字92016.06.142026.06.131658025327NoTrademarkClassification NumberValid PeriodRegistration Number58箩筐图形382016.06.142026.06.131658022959箩筐图形352016.06.142026.06.131658023060箩筐图形92016.06.142026.06.131658023161微时光文字422016.09.282026.09.271658024762传游录屏文字92016.06.142026.06.131678214463传游录屏文字352016.06.142026.06.131678214364传游录屏文字382016.06.142026.06.131678214265传游录屏文字412016.06.142026.06.131678214166传游录屏文字422016.06.142026.06.131678214067录游器文字92016.06.142026.06.131678213568录游器文字352016.06.142026.06.131678213669录游器文字382016.06.142026.06.131678213770录游器文字412016.06.142026.06.131678213871录游器文字422016.06.142026.06.131678213972畅联TV文字412016.01.212026.01.201579246773畅联TV文字382016.01.212026.01.201579246874SuperEngine92016.01.212026.01.20812572275SuperEngine422016.01.212026.01.20812572876超擎9/422016.01.212026.01.201647320577SUPERENGINE9/422016.01.212026.01.2016473185*See below for an explanation of each classification number used in the table above.Classification No. 9: data processing apparatus, couplers (data processing equipment), computer software (recorded), monitors (computer programs), smartcards (integrated circuit cards), electrodynamic apparatus for the remote control of signals, alarms, and electric installations for the remote control of industrialoperations.Classification No. 35: auctioneering, sales promotion for others, marketing analysis, marketing research, importexport agencies, advisory services forbusiness management, business management for franchise, personnel management consultancy, relocation services for businesses, and systemization ofinformation into computer databases.Classification No. 38: Include services that enable at least sensory communication between two people. Such services include that allow one person to talkto another, send messages from one person to another, Make verbal or visual contact between one person and the other. This classification especially include theservice for broadcasting radio or television programs. Except for radio advertising services and telemarketing services.Classification No. 41: instruction services, teaching, education information, tuition, arranging and conducting of colloquiums, publication of electronicbooks and journals online, amusements, and vocational guidance.Classification No. 42: technical research, studies (technical project), computer software design, updating of computer software, recovery of computer data,computer systems analysis, installation of computer software, computer antivirus protection, and research and development for others. 28Business Certificates and QualificationsWe have obtained all necessary regulatory certifications to conduct our business in the PRC, including without limitation, the following: SoftwareEnterprise Recognition Certificate, Computer Information System Integration Qualification Certificate, Construction Enterprise Qualification Certificate, and SecurityTechnology & Protection Enterprise Certificate. We have also been properly certified as a hightech enterprise and have met the ISO 9001:2000 qualificationmanagement system.Legal ProceedingsAlthough we may, from time to time, be involved in litigation and claims arising out of our operations in the normal course of business, we do not believethat we are a party to any litigation that will have a material adverse impact on our financial condition or results of operations. To our knowledge, other than asdescribed below there are no material legal proceedings threatened against us. From time to time, we may be subject to various claims and legal actions arising in theordinary course of business. Following the consummation of the AEA, we became successor in interest to the legal proceedings described below.Litigation with Shanghai Fusheng Weier Intelligent Control Technology Co., Ltd.On January 22, 2016, Zhong Chuan Rui You and Shanghai Fusheng Weier Intelligent Control Technology Co., Ltd. (“Fusheng Weier”) signed a contract forequipment of $1,652,842 (RMB10,800,000). Since Zhong Chuan Rui You did not make the payments of $1,126,381 (RMB7,360,000) on the due dates, Fusheng Weierfiled a lawsuit against Zhong Chuan Rui You in Shanghai Xuhui District People's Court on October 8, 2016. On March 9, 2017, Xuhui District People's Court issuedthe verdict requiring Zhong Chuan Rui You to pay the overdue debts. In August 2017, C Media Limited made the payment of $512,075 (RMB3,346,000). Theremaining balance has been accrued in accounts payable. The payment schedule for the remaining balance is being negotiated by the two parties. On February 5,2018, a hearing was held adding Zhong Chuan Shi Xun as a defendant. The Group plans to settle the remaining balance within one year.Lawsuit with Gansu Jinlun Culture Media Co., Ltd.On August 22, 2014, Zhong Chuan Rui You and Gansu Jinlun Culture Media Co., Ltd. (“Gansu Jinlun”) signed a “Lanzhou Railway Bureau AirconditionedTrain WiFi Network System Advertising Operation Rights Agreement” for advertising on 72 trains of $1,467,880 (RMB9,604,633). Due to the dispute on theproject implementation, Zhong Chuan Rui You did not pay the advertising fee. On August 23, 2017, Gansu Jinlun filed a lawsuit with Gansu Intermediate People'sCourt. On December 19, 2017, Gansu Intermediate People's Court issued a verdict, ruling that Zhong Chuan Rui You settle the overdue advertising fee. Since only 18out of 72 trains have been installed with Wifi network system, Zhong Chuan Rui You disputed and appealed to the verdict. The next court trial date has not yet beendetermined.C Media and Gansu Jinlun are negotiating a potential settlement to resume the contract. According to the legal counsel, it is probable that the settlementwill amount to approximately $459,000 (RMB3,000,000); therefore, this amount has been accrued in accounts payable as at December 31, 2017.Litigation with Shenzhen Hua Xun Fang Zhou Technology Co., Ltd.On June 16, 2015, Zhong Chuan Rui You signed a cooperation agreement with Shenzhen Hua Xun Fang Zhou Technology Co., Ltd. (“Shenzhen Hua Xun”)and Xuesong Song, a major shareholder of C Media Limited. Pursuant to this agreement, Zhong Chuan Rui You procures equipment from Shenzhen Hua Xun.Xuesong Song acts as a joint liability guarantor for the entire debts of Zhong Chuan Rui You under this agreement. As Zhong Chuan Rui You did not make thepayments on the due dates, Shenzhen Hua Xun filed a lawsuit with Shenzhen Baoan District People's Court on May 31, 2016. On November 1, 2016, Zhong ChuanRui You, Xuesong Song and Shenzhen Hua Xun reached a settlement in Shenzhen Baoan District People's Court to settle $1,735,389 (RMB11,355,000) in fourinstalments. On December 30, 2017, the debt was assigned to C Media Limited.29C. ORGANIZATIONAL STRUCTUREThe following diagram illustrates our corporate structure and the place of formation and affiliation of each of our subsidiaries and affiliates as of September30, 2018.30The following diagram illustrates our corporate structure and the place of formation and affiliation of each of our subsidiaries and affiliates as of December31, 2017.Contractual Arrangements with Beijing Zhong Chuan Shi Xun Technology Limited’s Subsidiaries and Their Respective ShareholdersTo comply with the PRC legal restrictions on foreign ownership of companies that operate mobile application services, our subsidiaries operate in suchrestricted service areas in the PRC through certain PRC domestic companies, whose equity interests are held by certain management members or founders of the LKTechnology Ltd. Part of the registered capital of these PRC domestic companies was funded by certain management members or founders of LK Technology Ltd. LKTechnology Ltd., through its subsidiary Zhong Chuan Tian Xia Information and Technology (Shenzhen) Limited (the “WFOE”), has entered into an exclusivebusiness cooperation agreement with Beijing Zhong Chuan Shi Xun Technology Limited (“Zhong Chuan Shi Xun” or the “VIE”) the PRC domestic company, whichentitle the WFOE to receive a majority of profit of Zhong Chuan Shi Xun. In addition, Zhong Chuan Tian Xia Information and Technology (Shenzhen) Limited hasentered into certain agreements with those management members or founders, including equity interest pledge agreement of the equity interests held by thosemanagement members or founders and exclusive option agreement to acquire the equity interests in these companies when permitted by the PRC laws, rules andregulations. Details of the typical VIE structure of our significant consolidated VIE, primarily domestic companies associated with the operations such as ZhongChuan Shi Xun and its subsidiaries of Zhong Chuan Rui You, Huoerguosi Luokuang and Jiu Zhou Shi Dai, are set forth below: Exclusive Business Cooperation AgreementThe VIE has entered into an exclusive business services agreement with the WFOE, pursuant to which the WFOE provides exclusive business services tothe VIE. In exchange, the VIE pays a service fee to the WFOE which amounts to be no less than the 80% of the VIE’s aftertax profit, resulting in a transfer ofsubstantially all of the profits from the VIE to the WFOE.Exclusive Option AgreementThe VIE equity holders have granted the WFOE exclusive call options to purchase their equity interest in the VIE at an exercise price equal to the minimumprice as permitted by applicable PRC laws. The WFOE may nominate another entity or individual to purchase the equity interest, if applicable, under the call options.Each call option is exercisable subject to the condition that applicable PRC laws, rules and regulations do not prohibit completion of the transfer of the equityinterest pursuant to the call option. The VIE agrees not to distribute any dividends to the VIE equity holders without the approval of WFOE.31Equity Interest Pledge AgreementPursuant to the equity pledge agreement, the VIE equity holders have pledged all of their interests in the equity of the VIE as a continuing first prioritysecurity interest in favor of the WFOE to secure the performance of obligations by the VIEs and/or the equity holders under the exclusive business cooperationagreement. The WFOE is entitled to exercise its right to dispose of the VIE equity holders’ pledged interests in the equity of the VIE and has priority in receivingpayment by the application of proceeds from the auction or sale of such pledged interests, in the event of any breach or default under the exclusive businesscooperation agreement, if applicable. These equity pledge agreement remain in force until all the obligations under the exclusive business cooperation agreementhave been fulfilled.The exclusive business cooperation agreement and equity interest pledge agreement described above also enable the Company to receive substantially allof the economic benefits from the VIE by typically entitling the WFOE to all dividends and other distributions declared by the VIE and to any distributions orproceeds from the disposal by the VIE equity holders of their equity interests in the VIE.D. PROPERTY AND EQUIPMENTWe lease offices located at Lab 30 & Lab 32, SOHO 3Q, No 9, Guanghua Road, Chaoyang District, Beijing, which covers a floor space of 600 square meters.These leases expire at different times throughout 2018 and are renewable upon negotiation.ITEM 4A. UNRESOLVED STAFF COMMENTSNone.ITEM 5. OPERATING AND FINANCIAL REVIEW AND PROSPECTSA . OPERATING RESULTS.The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our consolidatedfinancial statements and the notes to those financial statements appearing elsewhere in this report. This discussion and analysis contains forwardlookingstatements that involve significant risks and uncertainties. As a result of many factors, such as our anticipated growth strategy, our plans to recruit moreemployees, our plans to invest in research and development to enhance our product or service lines, our future business development, results of operations andfinancial condition, expected changes in our net revenues and certain cost or expense items, our ability to attract and retain customers, trends and competitionin the enterprise mobile software application market, and the factors set forth elsewhere in this report, our actual results may differ materially from thoseanticipated in these forwardlooking statements. In light of those risks and uncertainties, there can be no assurance that the forwardlooking statementscontained in this report will in fact occur. You should not place undue reliance on the forwardlooking statements contained in this report.The forwardlooking statements speak only as of the date on which they are made, and, except to the extent required by U.S. federal securities laws, weundertake no obligation to update any forwardlooking statement to reflect events or circumstances after the date on which the statement is made or to reflectthe occurrence of unanticipated events. Further, the information about our intentions contained in this report is a statement of our intention as of the date of thisreport and is based upon, among other things, the existing regulatory environment, industry conditions, market conditions and prices and our assumptions as ofsuch date. We may change our intentions, at any time and without notice, based upon any changes in such factors, in our assumptions or otherwise.32Unless the context otherwise requires, all references to (i) “PRC” and “China” are to the People’s Republic of China; (ii) “U.S. dollar,” “$” and “US$”are to United States dollars; and (iii) “RMB”, “Yuan” and Renminbi are to the currency of the PRC or China.OverviewLuokung Technology was incorporated on October 27, 2009 under the laws of the British Virgin Islands. We are a holding company and conduct ouroperations through LK Technology Ltd., a British Virgin Islands limited liability company (“LK Technology”) and its whollyowned subsidiaries, MMB Limited andMobile Media (China) Limited and their respective subsidiaries and a contractuallycontrolled entity in the PRC named Beijing Zhong Chuan Shi Xun Technology,which hold the rights to deploy WiFi systems on about 700 trains in China, including 290 trains in which WiFi systems have already been installed and are inoperation. In May 2010, we consummated an initial public offering of our American Depository Shares, or ADSs, for gross proceeds of $16 million, and our ADSswere listed on the NASDAQ Capital Market under the ticker symbol “KONE”. Our ordinary shares are not currently listed on any trading market. Our AmericanDepository Shares (“ADSs”) were voluntarily delisted from the NASDAQ Capital Market on September 19, 2018. We have applied to NASDAQ for the listing of ourordinary shares on the NASDAQ Capital Market and received an approval for listing of Ordinary Shares on August 6, 2018, and as of the date of this transitionreport, that application and approval are currently under review.On August 17, 2018, we consummated an asset exchange transaction, pursuant to which we exchanged all issued and outstanding capital stock in TopskyInfoTech Holdings Pte Ltd., the parent of Softech, for the issued and outstanding capital stock of LK Technology (the “Asset Exchange”). In connection with theAsset Exchange, we changed our name on August 20, 2018, and on September 20, 2018, completed the issuance to the shareholders of C Media Limited, the formerparent of LK Technology, of (i) 185,412,599 of our ordinary shares, par value $0.01 per share and (ii) 1,000,000 of our preferred shares. Upon the consummation of theAsset Exchange, we ceased our previous business operations and became a company focused on the provision of WiFi and mobile application products for longdistance travelers in China.On August 25, 2018, LK Technology entered into a Stock Purchase Agreement (the “Agreement”) with the shareholders (“Shareholders”) of SuperengineHoldings Limited, a limited liability company organized under the laws of the British Virgin Islands (the “Superengine”), pursuant to which LK Technology acquiredall of the issued and outstanding capital stock of Superengine for an aggregate purchase price of US$60 million (the “Purchase Price”), which are paid by theissuance of our Ordinary Shares in an amount equal to the quotient of (x) the Purchase Price divided by (y) the average of the closing prices of the Ordinary Shareson the NASDAQ Capital Market over the 12 months period preceding July 31, 2018. We are a party to the Agreement in connection with the issuance of theOrdinary Shares and certain other limited purposes.Results of operations for the fiscal year ended December 31, 2017 compared to the fiscal year ended December 31, 2016.RevenueWe provide displaybased online advertising services to customers by integrating text description, image and video, and displaying the advertisements in aprominent position of LuoKuang Application. We recognize revenue in accordance with ASC 605, over the contractual term based on the agreements andconfirmation letters signed by both parties, commencing on the date the customer’s advertisement is displayed on our platform.For the year ended December 31, 2017, we had revenue of $26,082,417, as compared to revenue of $5,233,145 for the year ended December 31, 2016, anincrease of $20,849,272, or 398.4%, which was primarily due to the increase of our advertising clients.Cost of revenueOur cost of revenue primarily consists of depreciation, labor cost, WiFi equipment installation fees, data charges, annual payments to local railway bureau,other overhead costs.33Cost of revenue for the year ended December 31, 2017 was $5,547,779, representing a decrease of $767,725 or 12.2% as compared to $6,315,504 for the yearended December 31, 2016. The decrease was primarily attributable to the decrease in labor cost as a result of our cost control and a decrease in the number ofmaintenance staff. Additionally, data charges decreased as train passengers prefer using their mobile data, leading to a decrease in 3G and 4G data.Selling and marketing expenseOur selling and marketing expense mainly include promotional and marketing expenses and compensation for our sales and marketing personnel.Selling expense totaled $23,908,733 for the year ended December 31, 2017, as compared to $6,209,804 for the year ended December 31, 2016, an increase of$17,698,929 or 285.0%. The increase was primarily attributable to the increase in promotional and marketing activities conducted by the Company.General and administrative expenseOur general and administrative expenses consist primarily of salaries and benefits for our general and administrative personnel, rent, fees and expenses forlegal, accounting and other professional servicesGeneral and administrative expense totaled $2,451,249 for the year ended December 31, 2017, as compared to $2,108,854 for the year ended December 31,2016, an increase of $342,395 or 16.2%.Research and development expenses.Research and development expenses primarily consist of salaries and benefits for research and development personnel.Research and development expenses totaled $1,046,198 for the year ended December 31, 2017, as compared to $2,882,202 for the year ended December 31,2016, a decrease of $1,836,004 or 63.7%. The decrease was primarily attributable to the Company reduced its expenses in research and development temporarily asour products are quite stable at present.Loss from operationsAs a result of the factors described above, for the year ended December 31, 2017, loss from operations amounted to $6,871,542, as compared to loss fromoperations of $12,283,219 for the year ended December 31, 2016, a decrease of $5,411,677, or 44.1%.Other income/expenseOther income/expense mainly include interest income from bank deposits, foreign currency transaction gain, and loss from investment.Net lossAs a result of the factors described above, our net loss was $6,810,454 for the year ended December 31, 2017, compared to net loss of $13,049,031 for theyear ended December 31, 2016, a decrease of $6,238,577 or 47.8%.Foreign currency translation adjustmentOur reporting currency is the U.S. dollar. The functional currency of our parent company and subsidiaries of Merchant Supreme and Prime Cheer is the U.S.dollar and the functional currency of the Company’s subsidiaries incorporated in China is the Chinese Renminbi (“RMB”). The financial statements of oursubsidiaries incorporated in China are translated to U.S. dollars using period end rates of exchange for assets and liabilities, and average rates of exchange (for theperiod) for revenue, costs, and expenses. Net gains and losses resulting from foreign exchange transactions are included in the consolidated statements ofoperations and comprehensive loss. As a result of foreign currency translations, which are a noncash adjustment, we reported a foreign currency translation gain of$90,671 for the year ended December 31, 2017, as compared to a foreign currency translation loss of $387,375 for the year ended December 31, 2016. This noncashgain had the effect of increasing/decreasing our reported comprehensive income/loss.34Comprehensive lossAs a result of our foreign currency translation adjustment, we had comprehensive loss for the year ended December 31, 2017 of $6,719,783, compared tocomprehensive loss of $12,661,656 for the year ended December 31, 2016.B. LIQUIDITY AND CAPITAL RESOURCESThe information contained in “Item 5. Operating and Financial Review and Prospects – A. Operating Results – Liquidity and Capital Resources” isincorporated herein by reference.C. RESEARCH AND DEVELOPMENT, PATENTS AND LICENSES, ETC.The discussions of our research and development activities were contained in “Item 4. Information about our Company – B. Business Overview –Research and Development” and “Item 5. Operating and Financial Review and Prospects – A. Operating Results – Operating Expenses – Research and DevelopmentExpenses” are incorporated herein by reference. In the years ended December 31, 2017 and 2016, we spent $1,046,198 and $2,882,202, respectively, on research anddevelopment activities.D. TREND INFORMATION.Industry and Market OutlookChina has awarded licenses to mobile phone companies to provide the superfast 4G network to customers. The licenses, which are designed to give mobilephone users faster access to services, were granted by the government to China Mobile, China Unicom Hong Kong and China Telecom. Since the grants, ChinaMobile has offered 4G to subscribers from December 18, 2013. China Unicom and China Telecom, the country's other two major carriers, also offer 4G wireless. Thenumber of China Mobile 4G customers has exceeded 900 million by the end of October in 2017. The move greatly bolstered business for telecom equipment makersand a range of other companies.Under China’s 12th FiveYear Plan, a key priority is for China to transition from “Made in China” to “Designed in China.” In order to achieve this goal, thegovernment plans to heavily invest in science and technology education and R&D so as to further develop China’s intellectual property rights system and support“NextGeneration IT” as a Strategic Emerging Industry (SEI). Additionally, China plans to upgrade the technological capabilities of private and public services,including “triple play” services (the convergence of telecom, broadcasting and Internet networks), ecommerce, and egovernment and statistics systems.Furthermore, the government plans to invest in R&D of the "Internet of things" and cloud computing, and develop digital and virtual technologies.E. OFFBALANCE SHEET ARRANGEMENTSWe have not entered into any financial guarantees or other commitments to guarantee the payment obligations of any third parties. We have not enteredinto any derivative contracts that are indexed to our shares and classified as shareholder’s equity, or that are not reflected in our consolidated financial statements.Furthermore, except for the mortgage referenced above, we do not have any retained or contingent interest in assets transferred to an unconsolidated entity thatserves as credit, liquidity or market risk support to such entity. We do not have any variable interest in any unconsolidated entity that provides financing, liquidity,market risk or credit support to us or engages in leasing, hedging or research and development services with us.35F. TABULAR DISCLOSURE OF CONTRACTUAL OBLIGATIONSAs of December 31, 2017, we did not have any contractual obligations required to be disclosed in this Item 5.F. ITEM 6. DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES.A. DIRECTORS AND SENIOR MANAGEMENT.Executive Officers and DirectorsThe following table sets forth the names and ages as of the date of this transition report of each of our executive officers and directors:NameAgePositionXuesong Song50Chief Executive Officer, Chairman and DirectorDongpu Zhang50PresidentJie Yu34Chief Financial OfficerKegang Peng46Vice President and DirectorChuang Tao51DirectorDennis Galgano (1)(2)69Director (Independent)Jin Shi (1)(2)49Director (Independent)Jiming Ha (1)(3)56Director (Independent)Zhihao Xu (3)42Director (Independent)(1)Member of the Audit Committee.(2)Member of the Compensation Committee.(3)Member of the Nominating and Corporate Governance Committee.Set forth below is biographical information concerning our executive officers and directors.Xuesong Song is a cofounder of C Media Limited and served as its chairman of the board of directors and chief executive officer from 2012 until theconsummation of the AEA. From February 2014 through April 2017, Mr. Song served as a director of Seven Stars Cloud Group, Inc. (NASDAQ: SSC) and fromJanuary 2013 through February 2015, Mr. Song served as a director of Pingtan Marine Enterprise Ltd. (NASDAQ: PME). From May 2006 through January 2009, Mr.Song served as the Chairman of the Board of ChinaGrowth North Acquisition Corporation, a special purpose acquisition company, which acquired UIB GroupLimited in January 2009, in which he remains a director. Mr. Song has been a principal of Chum Capital Group Limited since August 2001, a merchant banking firmthat invests in growth Chinese companies and advises them in financings, mergers & acquisitions and restructurings, and chief executive officer of Beijing ChumInvestment Co., Ltd. since December 2001. Mr. Song has been a director of Mobile Vision Communication Ltd. since July 2004. Mr. Song received a Master’s ofBusiness Administration degree from Oklahoma City/Tianjin Program.Dongpu Zhang was appointed as the President of the Company effective on August 25, 2018. Mr. Dongpu Zhang has served as the General Manager ofSuperEngine Graphics Software Technology Development (Suzhou) Co., Ltd. (“SuperEngine Suzou”) and the Chief Executive Officer of SuperEngine HoldingLimited since September 2016. From February, 2014 to August, 2016, Mr. Zhang served as vice president of Industrial Development Group under China Fortune LandDevelopment Co., Ltd. From March, 2009 to February, 2014, Mr. Zhang served as the vice president of Aerospace Science and Technology Holding Group Co., Ltd.Mr. Zhang receive his Master Degree of Computer Science from Harbin Institute of Technology in 1994 and his Bachelor Degree of information system fromChangsha Institute of technology in 1991.Jie Yu served as the chief financial officer of C Media Limited from January 2018 until the consummation of the asset exchange transactions. From June 2016to January 2018, Mr. Yu served as chief financial officer and secretary of the board of directors of MTI Environment Group Limited. Prior to joining MTI, Mr. Yuserved as the senior manager at DA HUA CPA from November 2012 to May 2016. Previously, Mr. Yu served as the manager at Crowe Horwath (Hong Kong) CPA.Mr. Yu holds a bachelor degree in accounting and finance from University of Auckland and postgraduate diploma in accounting from University of Auckland.36Kegang Peng served as the Vice Chairman of the board of directors C Media Limited from October 2014 to the consummation of the asset exchangetransactions, and is now a member of the Company’s board of directors. Previously, from 2012 to 2014, Mr. Peng was chairman of the board and founder of JiangsuSuqian Jinghaiboyuan Information and Technology Co., Ltd. Mr. Peng studied at Beijing University of Aeronautics and Astronautics majoring computer andapplication.20F 1 f20f2017_luokungtech.htm AMENDMENT NO. 1 TO FORM 20FUNITED STATESSECURITIES AND EXCHANGE COMMISSIONWASHINGTON, D.C. 20549FORM 20F☐ REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934OR☐ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934For the Fiscal year ended _____________OR☒ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934For the transition period from October 1, 2017 to December 31, 2017☐ SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934Date of event requiring this shell company report Commission file number: 00134738Luokung Technology Corp.(Exact name of Registrant as specified in its charter)Not applicable(Translation of Registrant’s name into English)British Virgin IslandsLAB 32, SOHO 3Q, No 9, Guanghua Road, Chaoyang District, BeijingPeople’s Republic of China, 100020(Jurisdiction of incorporation or organization)(Address of principal executive offices)Mr. Muqiao GengLAB32, SOHO 3Q, No 9, Guanghua Road, Chaoyang District, BeijingPeople’s Republic of China 100020Tel: (86) 1085866721(Name, telephone, Email and/or facsimile number and address of company contact person)Securities registered or to be registered pursuant to Section 12(b) of the Act:Title of each className of each exchange on which registeredOrdinary shares, par value $0.01 per shareNonePreferred shares, par value $0.01 per shareNoneSecurities registered or to be registered pursuant to Section 12(g) of the Act:none(Title of Class)Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act:none(Title of Class)Indicate the number of outstanding shares of each of the issuer’s classes of capital or common stock as of the close of the period covered by the transitionreport. 187,097,599 Ordinary Shares, including 186,383,224 Ordinary Shares represented by 714,375 American Depositary Shares, and 1,000,000 Preferred Sharesoutstanding as of September 20, 2018.Indicate by check mark if the registrant is a wellknown seasoned issuer, as defined in Rule 405 of the Securities Act. ☐ Yes ☒ NoIf this report is an annual or transition report, indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of theSecurities Exchange Act of 1934. ☐ Yes ☒ NoIndicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirementsfor the past 90 days. ☒ Yes ☐ NoIndicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File requiredto be submitted and posted pursuant to Rule 405 of Regulation ST (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that theregistrant was required to submit and post such files). ☒ Yes ☐ NoIndicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a nonaccelerated filer. See definition of “accelerated filer andlarge accelerated filer” in Rule 12b2 of the Exchange Act. (Check one):Large accelerated filer ☐ Accelerated filer ☐ Nonaccelerated filer ☒Indicate by check mark which basis of accounting the registrant has used to prepare the financial statements included in this filing.U.S. GAAP ☒International Financial Reporting Standards as issuedby the International Accounting Standards Board ☐Other ☐If “Other” has been checked in response to the previous question, indicate by check mark which financial statement item the registrant has elected tofollow. Item 17 ☐ Item 18 ☐If this is an transition report, indicate by check mark whether the registrant is a shell company (as defined in Rule 12b2 of the ExchangeAct). ☐ Yes ☒ NoExplanatory NoteLuokung Technology Corp. (the “Company”) is filing this transition report on Form 20F (“Transition Report”) in connection with the completion of theexchange of certain of its assets for substantially all of the assets of C Media Limited (“C Media”) pursuant to that Asset Exchange Agreement, dated January 25,2018 (the “Original AEA”), as supplemented by the Addendum to Asset Exchange Agreement, dated October 3, 2018 (the “Addendum” and together with theOriginal AEA, the “AEA”). Following the consummation of the AEA, on October 4, 2018, the Company changed its fiscal year end from September 30 to the fiscalyear end used by C Media, December 31. This Transition Report covers the threemonth period from Octorber 1, 2017 to December 31, 2017, and the fiscal yearsdescribed herein.In this transition report:●References to the “Company”, “we”, “our” and “us” are to Luokung Technology Corp. and its consolidated subsidiaries and variable interestentity, except as the context otherwise requires;●This transition report on Form 20F covers the threemonth period from October 1, 2017 through December 31, 2017 (the “Transition Period”) andreflects our financial results thereof. Prior to this transition report on Form 20F, our two most recent annual reports on Form 20F cover the fiscalyears ended September 30, 2017 and September 30, 2016, respectively, and reflect financial results for the respective twelvemonth periods fromOctober 1 to September 30. Unless otherwise noted, all references to years are to the calendar year from January 1 to December 31 and referencesto our fiscal year or years are to the fiscal year or years which, prior to the Transition Period, ended September 30, while from and after theTransition Period, ended December 31;●References to an “ADS” are to an American Depositary Share, each of which represents one of our Ordinary Shares with a par value of $.01 pershare.Special Note Regarding Forwardlooking StatementsThis transition report contains forwardlooking statements that involve risks and uncertainties. These statements involve known and unknown risks,uncertainties and other factors that may cause our actual results, performance or achievements to be materially different from those expressed or implied by theforwardlooking statements.You can identify these forwardlooking statements by words or phrases such as “may,” “will,” “expect,” “anticipate,” “aim,” “estimate,” “intend,” “plan,”“believe,” “likely to” or other similar expressions. We have based these forwardlooking statements largely on our current expectations and projections about futureevents and financial trends that we believe may affect our financial condition, results of operations, business strategy and financial needs. You should not placeundue reliance on these forwardlooking statements, which apply only as of the date of this transition report. These forwardlooking statements include:●our future business development, results of operations and financial condition;●expected changes in our net revenues and certain cost or expense items;●our ability to attract and retain customers; and●trends and competition in the enterprise mobile software application market.You should read this transition report thoroughly with the understanding that our actual future results may be materially different from, and/or worse, thanwhat we expect. We qualify all of our forwardlooking statements by these cautionary statements. Other sections of this transition report include additional factorswhich could adversely impact our business and financial performance. Moreover, we operate in an evolving environment. New risk factors and uncertainties emergefrom time to time and it is not possible for our management to predict all risk factors and uncertainties, nor can we assess the impact of all factors on our business orthe extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forwardlooking statements.This transition report also contains estimates, projections and statistical data related to the market for the provision of WiFi and mobile applications inChina. This market data, including data from IDC, a leading provider of market data and intelligence, speaks as of the date it was published and includes projectionsthat are based on a number of assumptions and are not representations of fact. The market for the provision of WiFi and mobile applications in China may not growat the rates projected by the market data, or at all. The failure of the market to grow at the projected rates may materially and adversely affect our business and themarket price of our ADSs. In addition, the rapidly changing nature of the market for the provision of WiFi and mobile applications subjects any projections orestimates relating to the growth prospects or future condition of our market to significant uncertainties. If any one or more of the assumptions underlying the marketdata proves to be incorrect, actual results may differ from the projections based on these assumptions.You should not rely upon forwardlooking statements as predictions of future events. We undertake no obligation to update or revise any forwardlookingstatements, whether as a result of new information, future events or otherwise.TABLE OF CONTENTSPart IItem 1.Identity of Directors, Senior Management and Advisers.1Item 2.Offer Statistics and Expected Timetable.1Item 3.Key Information.1A.Selected Financial Data.1B.Capitalization and Indebtedness.3C.Reasons for the Offer and Use of Proceeds.3D.Risk Factors.3Item 4.Information on the Company.19A.History and Development of the Company.19B.Business Overview.20C.Organizational Structure.30D.Property, Plants and Equipment.32Item 4A.Unresolved Staff Comments.32Item 5.Operating and Financial Review and Prospects.32A.Operating Results.32B.Liquidity and Capital Resources.35C.Research and Development, Patents and Licenses, etc.35D.Trend Information.35E.Offbalance Sheet Arrangements.35F.Tabular Disclosure of Contractual Obligations.36Item 6.Directors, Senior Management and Employees.36A.Directors and Senior Management.36B.Compensation.37C.Board Practices.40D.Employees.43E.Share Ownership.43Item 7.Major Shareholders and Related Party Transactions.44A.Major Shareholders.44B.Related Party Transactions.45C.Interests of Experts and Counsel.45Item 8.Financial Information.45A.Consolidated Statements and Other Financial Information.45B.Significant Changes.46Item 9.The Offer and Listing.46A.Offer and Listing Details.46B.Plan of Distribution.47C.Markets.47D.Selling shareholders.48E.Dilution.48F.Expenses of the issue.48Item 10.Additional Information.48A.Share Capital.48B.Memorandum and Articles of Association.48C.Material Contracts.53D.Exchange Controls.54E.Taxation.61F.Dividends and Paying Agents.67G.Statement by Experts.67H.Documents on Display.67I.Subsidiary Information.68Item 11.Quantitative and Qualitative Disclosures about Market Risk.68Item 12.Description of Securities Other than Equity Securities.69A.Debt Securities.69B.Warrants and Rights.69C.Other Securities.69D.American Depositary Shares.69iPart IIItem 13.Defaults, Dividend Arrearages and Delinquencies.71Item 14.Material Modifications to the Rights of Security Holders and Use of Proceeds.71Item 15.Controls and Procedures.71Item 16.[Reserved.]72Item 16A.Audit Committee Financial Expert.72Item 16B.Code of Ethics.73Item 16C.Principal Accountant Fees and Services.73Item 16D.Exemptions from the Listing Standards for Audit Committees.73Item 16E.Purchases of Equity Securities by the Issuer and Affiliated Purchasers.73Item 16F.Change in Registrant’s Certifying Accountant.73Item 16G.Corporate Governance.73Item 16H.Mine Safety Disclosure.73Part IIIItem 17.Financial Statements.74Item 18.Financial Statements.74Item 19.Exhibits.74Index to Consolidated Financial StatementsF1iiPART IITEM 1. IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS.The directors of Luokung Technology Corp. are Xuesong Song, Kegang Peng, Dennis Galgano, Jin Shi, Jiming Ha, Zhihao Xu and Chuang Tao. Thebusiness address for our directors is LAB 32, SOHO 3Q, No 9, Guanghua Road, Chaoyang District, Beijing, People’s Republic of China.Moore Stephens CPA Limited has served as our auditor since October 5, 2018, and is located at 801806 Silvercord Tower 1, 30 Canton road, Tsimshatsui,Kowloon, Hong Kong. BDO China Shun Lun Pan Certified Public Accountants LLP served as our auditors for the last three years, and are located at 4F, No. 61Nanjing Road, Shanghai, People’s Republic of China.Garvey Schubert Barer, P.C., serves as our legal counsel in the United States, and is located at Flour Mill Building, 1000 Potomac Street NW, Suite 200,Washington, D.C., 200073501.Conyers Dill & Pearlman serves as our legal counsel with regard to the laws of the British Virgin Islands, and is located at 29th Floor, One Exchange Square,8 Connaught Place, Central, Hong Kong.ITEM 2. OFFER STATISTICS AND EXPECTED TIMETABLE.Not applicable.ITEM 3. KEY INFORMATION.A. SELECTED FINANCIAL DATA.Luokung Technology Corp. and its consolidated subsidiaries (“Luokung Technology”, “we”, “us”, or “the Company”) consummated an asset exchangeagreement pursuant to which we exchanged our existing assets with those of C Media Limited (the “Asset Exchange”) on August 17, 2018, and we changed ourname from Kingtone Wirelessinfo Solution Holding Ltd. to our current name on August 20, 2018. On October 4, 2018, in connection with the consummation of the Asset Exchange, we changed our fiscal year end from September 30 to December 31.1The selected financial data for the fiscal years ended December 31 2017 and 2016 have been derived from our audited consolidated and combined financialstatements. The selected consolidated and combined financial data should be read in conjunction with our audited financial statements and the accompanying notesand “Item 5 – Operating and Financial Review and Prospects.” Our consolidated and combined financial statements are prepared and presented in accordance withUnited States generally accepted accounting principles, or U.S. GAAP. Our historical results do not necessarily indicate our results expected for any future periods.You should not view our historical results as an indicator of our future performance.LK TECHNOLOGY LTD. AND SUBSIDIARIESSELECTED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS(IN U.S. DOLLARS)For the years ended December 31,20172016Revenues$26,082,417$5,233,145Less: Cost of revenues5,547,7796,315,504Less: Operating expenses:Selling and marketing23,908,7336,209,804General and administrative2,451,2492,108,854Research and development1,046,1982,882,202Total operating expenses27,406,18011,200,860Loss from operations(6,871,542)(12,283,219)Other income (expense):Interest expense(26,611)(4,412)Foreign exchange gains(losses)350,679(298,257)Loss from investment(428,571)Other income (expense), net(262,980)(34,572)Total other income (expense), net61,088(765,812)Loss before income taxes(6,810,454)(13,049,031)Income taxesNet loss$(6,810,454)$(13,049,031)Other comprehensive income:Foreign currency translation adjustment90,671387,375Total comprehensive loss$(6,719,783)$(12,661,656)2LK TECHNOLOGY LTD. AND SUBSIDIARIESSELECTED CONSOLIDATED BALANCE SHEETS(IN U.S. DOLLARS)As of December 31,20172016Accounts receivable, net of allowance for doubtful accounts9,729,6251,865,836Amounts due from related parties11,760,692Property and equipment, net5,044,8727,771,027Goodwill7,239,9367,239,936TOTAL ASSETS37,582,85821,114,832Accounts payable8,784,5186,446,584Accrued liabilities and other payables12,962,91211,329,613Total liabilities25,311,11333,905,520Total Shareholder’s Equity (Deficit)12,271,745(12,790,688)TOTAL LIABILITIES AND SHAREHOLDER’S EQUITY (DEFICIT)37,582,85821,114,832B. CAPITALIZATION AND INDEBTEDNESS.Not applicable.C. REASONS FOR THE OFFER AND USE OF PROCEEDS.Not applicable.D. RISK FACTORS.An investment in our ADSs and ordinary shares involves a high degree of risk. You should carefully consider the risks and uncertainties described belowtogether with all other information contained in this transition report, including the matters discussed under “Special Note Regarding ForwardLooking Statements,”before you decide to invest in our ADSs or ordinary shares. You should pay particular attention to the fact that we are a holding company with substantialoperations in China and are subject to legal and regulatory environments that in many respects differ from those of the United States. If any of the following risks, orany other risks and uncertainties that are not presently foreseeable to us, actually occur, our business, financial condition, results of operations, liquidity and ourfuture growth prospects would be materially and adversely affected. You should also consider all other information contained in this transition report beforedeciding to invest in our ADSs or ordinary shares.Risks Related to Our Company and Our IndustryThe Company had incurred negative cash flows from operating activities and net losses as of December 31, 2017. These matters raise substantial doubt aboutthe Company’s ability to continue as a going concern.The Company’s consolidated financial statements are prepared using generally accepted accounting principles in the United States of America applicableto a going concern, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. As of and for the year endedDecember 31, 2017, the Company had incurred significant operating losses and working capital deficit. The ability of the Company to continue as a going concern isdependent on the Company obtaining adequate capital to fund operating losses until it becomes profitable. If the Company is unable to obtain adequate capital, itcould be forced to cease operations. The accompanying consolidated financial statements do not include any adjustments that might be necessary if the Companyis unable to continue as a going concern.3We may undertake acquisitions, investments, joint ventures or other strategic alliances, which could have a material adverse effect on our ability to manageour business. In addition, such undertakings may not be successful.Our strategy includes plans to grow both organically and through acquisitions, participation in joint ventures or other strategic alliances. Joint venturesand strategic alliances may expose us to new operational, regulatory and market risks, as well as risks associated with additional capital requirements. We may not beable, however, to identify suitable future acquisition candidates or alliance partners. Even if we identify suitable candidates or partners, we may be unable tocomplete an acquisition or alliance on terms commercially acceptable to us. If we fail to identify appropriate candidates or partners, or complete desired acquisitions,we may not be able to implement our strategies effectively or efficiently. In addition, our ability to successfully integrate acquired companies and their operations may be adversely affected by several factors. These factorsinclude:1.diversion of management’s attention;2.difficulties in retaining customers of the acquired companies;3.difficulties in retaining personnel of the acquired companies;4.entry into unfamiliar markets;5.unanticipated problems or legal liabilities; and6.tax and accounting issues.If we fail to integrate acquired companies efficiently, our earnings, revenue growth and business could be negatively affected.Due to intense competition for highlyskilled personnel, we may fail to attract and retain enough sufficiently trained employees to support our operations; ourability to bid for and obtain new projects may be negatively affected and our revenues could decline as a result.The IT industry relies on skilled employees, and our success depends to a significant extent on our ability to attract, hire, train and retain qualifiedemployees. There is significant competition in China for professionals with the skills necessary to develop the products and perform the services we offer to ourcustomers. Increased competition for these professionals, in the mobile application design area or otherwise, could have an adverse effect on us if we experiencesignificant increase in the attrition rate among employees with specialized skills, which could decrease our operating efficiency and productivity and could lead to adecline in demand for our services.In addition, our ability to serve existing customers and business partners and obtain new business will depend, in large part, on our ability to attract, trainand retain skilled personnel that enable us to keep pace with growing demands for wifi connectivity and mobile applications, evolving industry standards andchanging customer preferences. Our failure to attract, train and retain personnel with the qualifications necessary to fulfill the needs of our existing and futurecustomers or to assimilate new employees successfully could have a material adverse effect on our business, financial condition and results of operations. Ourfailure to retain our key personnel on business development or find suitable replacements of the key personnel upon their departure may lead to shrinking newimplementation projects, which could materially adversely affect our business.4Our business depends substantially on the continuing efforts of our senior executives and other key personnel, and our business may be severely disrupted if welose their services.Our future success heavily depends upon the continued services of our senior executives and other key employees, particularly since we recentlyappointed a new chairman. We are reliant on the services of Mr. Xuesong Song, our chairman, chief executive officer and member of our board of directors. If one ormore of our senior executives or key employees is unable or unwilling to continue in his or her present position, we may not be able to replace such employee easily,or at all, we may incur additional expenses to recruit, train and retain replacement personnel, our business may be severely disrupted, and our financial condition andresults of operations may be materially adversely affected.Our business could suffer if our executives and directors compete against us and our noncompetition agreements with them cannot be enforced.If any of our senior executives or key employees joins a competitor or forms a competing company, we may lose customers, knowhow and keyprofessionals and staff members to them. Also, if any of our business development managers who keep a close relationship with our customers and businesspartners joins a competitor or forms a competing company, we may lose customers, and our revenues may be materially adversely affected. Most of our executiveshave entered, or will soon enter, into employment agreements with us that contain or will contain noncompetition provisions. However, if any dispute arisesbetween our executive officers and us, such noncompetition provisions may not be enforceable, especially in China, where all of these executive officers and keyemployees reside, in light of the uncertainties with China’s legal system. See “Risk Factors — Risks Related to Doing Business in China — Uncertainties withrespect to the PRC legal system could adversely affect us.”Our computer networks may be vulnerable to security risks that could disrupt our services and adversely affect our results of operations.Our computer networks may be vulnerable to unauthorized access, computer hackers, computer viruses and other security problems caused byunauthorized access to, or improper use of, systems by third parties or employees. A hacker who circumvents security measures could misappropriate proprietaryinformation or cause interruptions or malfunctions in operations. Computer attacks or disruptions may jeopardize the security of information stored in andtransmitted through computer systems and mobile devices of our customers. Actual or perceived concerns that our systems may be vulnerable to such attacks ordisruptions may deter customers from using our services. As a result, we may be required to expend significant resources to protect against the threat of thesesecurity breaches or to alleviate problems caused by these breaches, which could adversely affect our results of operations.If we do not continually enhance our solutions and service offerings, we may have difficulty in retaining existing customers and attracting new customers.We believe that our future success will depend, to a significant extent, upon our ability to enhance our existing applications and platform, and to introducenew features to meet the preferences and requirements of our customers in a rapidly developing and evolving market. Unexpected technical, operational, distributionor other problems could delay or prevent the introduction of one or more of these products or services, or any products or services that we may plan to introduce inthe future. Our present or future products may not satisfy the evolving preferences and tastes of our customers, and these solutions and services may not achieveanticipated market acceptance or generate incremental revenue. If we are unable to anticipate or respond adequately to the need for service or productenhancements due to resource, technological or other constraints, our business, financial condition and results of operations could be materially and adverselyaffected.5If we are unable to develop competitive new products and service offerings our future results of operations could be adversely affected.Our future revenue stream depends to a large degree on our ability to utilize our technology in a way that will allow us to offer new types of mobileapplications and services to a broader customer base. We will be required to make investments in research and development in order to continually develop newsoftware applications and related service offerings, enhance our existing platform, mobile applications and related service offerings and achieve market acceptanceof our mobile applications and service offerings. We may incur problems in the future in innovating and introducing new mobile applications and service offerings.Our developmentstage mobile applications may not be successfully completed or, if developed, may not achieve significant customer acceptance. If we are unableto successfully define, develop and introduce competitive new mobile applications, and enhance existing mobile applications, our future results of operations wouldbe adversely affected. The timely availability of new applications and their acceptance by customers are important to our future success. A delay in the developmentof new applications could have a significant impact on its results of operations.Changes in technology could adversely affect our business by increasing our costs, reducing our profit margins and causing a decline in our competitiveness.China’s wireless telecom industry, in which we operate, is characterized by rapidly changing technology, evolving industry standards, frequentintroductions of new services and solutions and enhancements as well as changing customer demands. New solutions and new technologies often render existingsolutions and services obsolete, excessively costly or otherwise unmarketable. As a result, our success depends on our ability to adapt to the latest technologicalprogress, such as the 5G standard and technologies, and to develop or acquire and integrate new technologies into our platform, mobile applications and relatedservices. Advances in technology also require us to commit substantial resources to developing or acquiring and then deploying new technologies for use in ouroperations. We must continuously train personnel in new technologies and in how to integrate existing hardware and software systems with these newtechnologies. We may not be able to adapt quickly to new technologies or commit sufficient resources to compete successfully against existing or new competitorsin bringing to market solutions and services that incorporate these new technologies. We may incur problems in the future in innovating and introducing new mobileapplications and service offerings. Our development of new mobile applications and platform enhancements may not be successfully completed or, if developed,may not achieve significant customer acceptance. If we fail to adapt to changes in technologies and compete successfully against established or new competitors,our business, financial condition and results of operations could be adversely affected.Problems with the quality or performance of our hardware, software or other systems may cause delays in the introduction of new solutions or result in the lossof customers and revenues, which could have a material and adverse effect on our business, financial condition and results of operations.Our hardware and software systems are complex and may contain defects, errors or bugs when first introduced to the market or to a particular customer, oras new versions are released. Because we cannot test for all possible scenarios, our systems may contain errors that are not discovered until after they have beeninstalled or implemented, and we may not be able to timely correct these problems. These defects, errors or bugs could interrupt or delay the completion of projectsor sales to our customers. In addition, our reputation may be damaged and we may fail to acquire new projects from existing customers or new customers. Errors mayoccur when we provide systems integration and maintenance services. Even in cases where we have agreements with our customers that contain provisionsdesigned to limit our exposure to potential claims and liabilities arising from customer problems, these provisions may not effectively protect us against such claimsin all cases and in all jurisdictions. In addition, as a result of business and other considerations, we may undertake to compensate our customers for damages arisingfrom the use of our solutions, even if our liability is limited by these provisions. Moreover, claims and liabilities arising from customer problems could also result inadverse publicity and materially and adversely affect our business, results of operations and financial condition. We currently do not carry any product or serviceliability insurance and any imposition of liability on us may materially and adversely affect our business and increase our costs, resulting in reduced revenues andprofitability.Our products may contain undetected software defects, which could negatively affect our revenues.Our software products are complex and may contain undetected defects. Although we test our products, it is possible that errors may be found or occur inour new or existing products after we have commenced commercial shipment of those products. Defects, whether actual or perceived, could result in adversepublicity, loss of revenues, product returns, a delay in market acceptance of our products, loss of competitive position or claims against us by customers. Any suchproblems could be costly to remedy and could cause interruptions, delays, or cessation of our product sales, which could cause us to lose existing or prospectivecustomers and could negatively affect our results of operations.6We may be subject to infringement, misappropriation and indemnity claims in the future, which may cause us to incur significant expenses, pay substantialdamages and be prevented from providing our services or technologies.Our success depends, in part, on our ability to carry out our business without infringing the intellectual property rights of third parties. Patent andcopyright law covering softwarerelated technologies is evolving rapidly and is subject to a great deal of uncertainty. Our selfdeveloped or licensed technologies,processes or methods may be covered by thirdparty patents or copyrights, either now existing or to be issued in the future. Any potential litigation may cause us toincur significant expenses. Thirdparty claims, if successfully asserted against us may cause us to pay substantial damages, seek licenses from third parties, payongoing royalties, redesign our services or technologies, or prevent us from providing services or technologies subject to these claims. Even if we were to prevail,any litigation would likely be costly and timeconsuming and divert the attention of our management and key personnel from our business operations.Our failure to protect our intellectual property rights may undermine our competitive position, and subject us to costly litigation to protect our intellectualproperty rights.Any misappropriation of our technology or the development of competitive technology could seriously harm our business. We regard a substantial portionof our hardware and software systems as proprietary and rely on statutory copyright, trademark, patent, trade secret laws, customer license agreements, employeeand thirdparty nondisclosure agreements and other methods to protect our proprietary rights. Nevertheless, these resources afford only limited protection and theactions we take to protect our intellectual property rights may not be adequate. In particular, third parties may infringe or misappropriate our proprietarytechnologies or other intellectual property rights, which could have a material adverse effect on our business, financial condition and results of operations. Inaddition, intellectual property rights and confidentiality protection in China may not be as effective as in the United States, and policing unauthorized use ofproprietary technology can be difficult and expensive. Further, litigation may be necessary to enforce our intellectual property rights, protect our trade secrets ordetermine the validity and scope of the proprietary rights of others. The outcome of any such litigation may not be in our favor. Any such litigation may be costlyand may divert management attention, as well as our other resources, away from our business. An adverse determination in any such litigation will impair ourintellectual property rights and may harm our business, prospects and reputation. In addition, we have no insurance coverage against litigation costs and wouldhave to bear all litigation costs in excess of the amount recoverable from other parties. The occurrence of any of the foregoing could have a material adverse effecton our business, financial condition and results of operations. Our solutions incorporate a portion of, and work in conjunction with, thirdparty hardware and software solutions. If these thirdparty hardware or softwaresolutions are not available to us at reasonable costs, or at all, our results of operations could be adversely impacted.Although our hardware and software systems and mobile applications primarily rely on our own core technologies, some elements of our systemsincorporate a small portion of thirdparty hardware and software solutions. If any third party were to discontinue making their intellectual property available to us orour customers on a timely basis, or increase materially the cost of their licensing such intellectual property, or if our systems or applications failed to properlyfunction or interoperate with replacement intellectual property, we may need to incur costs in finding replacement thirdparty solutions and/or redesigning oursystems or applications to replace or function with or on replacement thirdparty proprietary technology. Replacement technology may not be available on termsacceptable to us or at all, and we may be unable to develop alternative solutions or redesign our systems or applications on a timely basis or at a reasonable cost. Ifany of these were to occur, our results of operations could be adversely impacted.7Our ability to sell our products is highly dependent on the quality of our service and support offerings, and our failure to offer high quality service could have amaterial adverse effect on our ability to market and sell our products.Our customers depend upon our customer service and support staff to resolve issues relating to our products. Highquality support services are critical forthe successful marketing and sale of our products. If we fail to provide highquality support on an ongoing basis, our customers may react negatively and we maybe materially and adversely affected in our ability to sell additional products to these customers. This could also damage our reputation and prospects with potentialcustomers. Our failure to maintain highquality support services could have a material and adverse effect on our business, results of operations and financialcondition.Weaknesses in our internal controls over financial reporting or disclosure controls and procedures may have a material adverse effect on our business, theprice of our ordinary shares, operating results and financial condition.We are required to establish and maintain appropriate internal controls over financial reporting and disclosure controls and procedures. Pursuant to Section404 of the SarbanesOxley Act of 2002 and the related rules adopted by the Securities and Exchange Commission, every public company is required to include amanagement report on its internal controls over financial reporting in its transition report, which contains management’s assessment of the effectiveness of thecompany’s internal controls over financial reporting. This requirement first applied to our annual report on Form 20F for the fiscal year ended on September 30,2011. In connection with our assessments of our disclosure controls and procedures and internal controls over financial reporting, management concluded that as ofSeptember 30, 2018, our disclosure controls and procedures and our internal controls over financial reporting were not effective due to lack of U.S. generallyaccepted accounting principles (“U.S. GAAP”) expertise in our current accounting team. Please refer to the discussion under Item 15, “Controls and Procedures” forfurther discussion of our material weakness as of December 31, 2017. Should we be unable to remediate the material weakness promptly and effectively, suchweakness could harm our operating results, result in a material misstatement of our financial statements, cause us to fail to meet our financial reporting obligations orprevent us from providing reliable and accurate financial reports or avoiding or detecting fraud. This, in turn, could result in a loss of investor confidence in theaccuracy and completeness of our financial reports, which could have an adverse effect on the trading price of our ordinary shares. Any litigation or otherproceeding or adverse publicity relating to the material weaknesses could have a material adverse effect on our business and operating results. We have very limited insurance coverage which could expose us to significant costs and business disruption.We do not maintain any insurance coverage for our leased properties. Should any natural catastrophes such as earthquakes, floods, typhoons or any actsof terrorism occur in Beijing, China, where our head office is located and most of our employees are based, or elsewhere in China, we might suffer not onlysignificant property damages, but also loss of revenues due to interruptions in our business operations, which could have a material adverse effect on our business,operating results or financial condition.The insurance industry in China is still at an early stage of development. Insurance companies in China offer limited business insurance products, and donot, to our knowledge, offer business liability insurance. As a result, we do not have any business liability insurance coverage for our operations. Moreover, whilebusiness disruption insurance is available, we have determined that the risks of disruption and cost of the insurance are such that we do not require it at this time.Any business disruption, litigation or natural disaster might result in substantial costs and diversion of resources, particularly if it affects our technology platformswhich we depend on for delivery of our software and services, and could have a material adverse effect on our financial condition and results of operations.We may be liable to our customers for damages caused by unauthorized disclosure of sensitive and confidential information, whether through our employees orotherwise.We are typically required to manage, utilize and store sensitive or confidential customer data in connection with the products and services we provide.Under the terms of our customer contracts, we are required to keep such information strictly confidential. We seek to implement specific measures to protectsensitive and confidential customer data. We require our employees to enter into nondisclosure agreements to limit such employees’ access to, and distribution of,our customers’ sensitive and confidential information and our own trade secrets. We can give no assurance that the steps taken by us in this regard will be adequateto protect our customers’ confidential information. If our customers’ proprietary rights are misappropriated by our employees, in violation of any applicableconfidentiality agreements or otherwise, our customers may consider us liable for that act and seek damages and compensation from us. However, we currently donot have any insurance coverage for mismanagement or misappropriation of such information by our employees. Any litigation with respect to unauthorizeddisclosure of sensitive and confidential information might result in substantial costs and diversion of resources and management attention.8We may face intellectual property infringement claims that could be timeconsuming and costly to defend. If we fail to defend ourselves against such claims, wemay lose significant intellectual property rights and may be unable to continue providing our existing products and services.It is critical that we use and develop our technology and products without infringing upon the intellectual property rights of third parties, includingpatents, copyrights, trade secrets and trademarks. Intellectual property litigation is expensive and timeconsuming and could divert management’s attention from ourbusiness. A successful infringement claim against us, whether with or without merit, could, among others things, require us to pay substantial damages, developnoninfringing technology, or rebrand our name or enter into royalty or license agreements that may not be available on acceptable terms, if at all, and cease making,licensing or using products that have infringed a third party’s intellectual property rights. Protracted litigation could also result in existing or potential customersdeferring or limiting their purchase or use of our products until resolution of such litigation, or could require us to indemnify our customers against infringementclaims in certain instances. Also, we may be unaware of intellectual property registrations or applications relating to our services that may give rise to potentialinfringement claims against us. Parties making infringement claims may be able to obtain an injunction to prevent us from delivering our services or usingtechnology containing the allegedly infringing intellectual property. Any intellectual property litigation could have a material adverse effect on our business, resultsof operations or financial condition. Seasonality and fluctuations in our customers’ spending cycle and other factors can cause our revenues and operating results to vary significantly from quarterto quarter and from year to year.Our revenues and operating results will vary significantly from quarter to quarter and from year to year due to a number of factors, many of which areoutside of our control. Our new lines of business acquired upon the consummation of the asset exchange transaction discussed below see higher customer use andactivity during the Chinese New Year holiday than other times during the year when rail travel is high, which lead to higher revenue during this period as morecustomers would like to place more advertising. Due to these and other factors, our operating results may fluctuate significantly from quarter to quarter and fromyear to year. These fluctuations are likely to continue in the future, and operating results for any period may not be indicative of our future performance in any futureperiod.Our corporate actions are substantially controlled by our principal shareholders, who can cause us to take actions in ways you may not agree with.Mr. Xuesong Song, our chairman, chief executive officer and a member of our board of directors, beneficially owns 19.31% of our outstanding ordinaryshares and 1,000,000 preferred shares, and each preferred share has the right to 399 votes at a meeting of the members of the Company. Our officers and directors asa group beneficially own an aggregate of approximately 33.69% of our outstanding ordinary shares. These shareholders, acting individually or as a group, couldexert control and substantial influence over matters such as electing directors, amending our constitutional documents, and approving acquisitions, mergers or otherbusiness combination transactions. This concentration of ownership and voting power may also discourage, delay or prevent a change in control of our company,which could deprive our shareholders of an opportunity to receive a premium for their shares as part of a sale of our company and might reduce the price of ourshares. Alternatively, our controlling shareholders may cause a merger, consolidation or change of control transaction even if it is opposed by our othershareholders, including those who purchase shares in this offering.9We depend on a small number of customers to derive a significant portion of our revenues. If we were to become dependent again upon a few customers, suchdependency could negatively impact our business, operating results and financial condition.We derived a material portion of our revenues from a small number of customers. In the years ended December 31, 2017 and 2016, our five largestcustomers accounted for 99.8% and 78.5% of our total sales, respectively, and our largest customer Guangdong Zhanshi Media Advertising Co., Ltd. accounted forapproximately 80.8% of our total sales during for the fiscal year ended December 31, 2017. As our customer base may change from yeartoyear, during such yearsthat the customer base is highly concentrated, the fluctuation of our sales to any of such major customers could have a material adverse effect on our business,operating results and financial condition. Moreover, our high customer base concentration may also adversely affect our ability to negotiate contract prices withthese customers, which may in turn materially and adversely affect our results of operations.Our historical outstanding accounts receivable have been relatively high. Inability to collect our accounts receivable on a timely basis, if at all, couldmaterially and adversely affect our financial condition, liquidity and results of operations.Historically, our outstanding accounts receivable have been relatively high. As of December 31, 2017 and 2016, our outstanding accounts receivable beforeimpairment were $10.4 million and $2.10 million, respectively. Although we conduct credit evaluations of our customers, we generally do not require collateral orother security from our customers. In addition, we have had a relatively high customer concentration. The outstanding accounts receivable balance for our largestcustomer was 45.3% and 38.5% of our total accounts receivable balance as of December 31, 2017 and 2016, respectively. As a result, an extended delay or default inpayment relating to a significant account would likely have a material and adverse effect on the aging schedule and turnover days of our accounts receivable. Ourinability to collect our accounts receivable on a timely basis, if at all, could materially and adversely affect our financial condition, liquidity and results of operations.Risks Related to Doing Business in ChinaAdverse changes in political and economic policies of the PRC government could have a material adverse effect on the overall economic growth of China,which could reduce the demand for our services and materially and adversely affect our competitive position.Substantially all of our business operations are conducted in China. Accordingly, our business, results of operations, financial condition and prospects aresubject to a significant degree to economic, political and legal developments in China. Although the Chinese economy is no longer a planned economy, the PRCgovernment continues to exercise significant control over China’s economic growth through direct allocation of resources, monetary and tax policies, and a host ofother government policies such as those that encourage or restrict investment in certain industries by foreign investors, control the exchange between RMB andforeign currencies, and regulate the growth of the general or specific market. These government involvements have been instrumental in China’s significant growthin the past 30 years. The reorganization of the telecommunications industry encouraged by the PRC government has directly affected our industry and our growthprospect. In response to the recent global and Chinese economic downturn, the PRC government has adopted policy measures aimed at stimulating the economicgrowth in China. If the PRC government’s current or future policies fail to help the Chinese economy achieve further growth or if any aspect of the PRCgovernment’s policies limits the growth of the telecommunications industry in China or our industry or otherwise negatively affects our business, our growth rate orstrategy, our results of operations could be adversely affected as a result. Our business benefits from certain government tax incentives. Expiration, reduction or discontinuation of, or changes to, these incentives will increase our taxburden and reduce our net income.Under the PRC Enterprise Income Tax Law passed in 2007 and the implementing rules, both of which became effective on January 1, 2008, or the New EITLaw, a unified enterprise income tax rate of 25% and unified tax deduction standard is applied equally to both domesticinvested enterprises and foreigninvestedenterprises, or FIEs. Enterprises established prior to March 16, 2007 eligible for preferential tax treatment in accordance with the then tax laws and administrativeregulations shall gradually become subject to the New EIT Law rate over a fiveyear transition period starting from the date of effectiveness of the New EIT Law.However, certain qualifying hightechnology enterprises may still benefit from a preferential tax rate of 15% if they own their core intellectual properties and they areenterprises in certain Statesupported hightech industries to be later specified by the government. As a result, if our PRC subsidiaries qualify as “hightechnologyenterprises,” they will continue to benefit from the preferential tax rate of 15%, subject to transitional rules implemented from January 1, 2008. Our subsidiary, BeijingZhong Chuan Shi Xun Technology Limited, is qualified as a “hightechnology enterprise” until the end of the November 2018, and therefore it had benefited fromthe preferential tax rate of 15%, subject to transitional rules implemented on January 1, 2008. Although we intend to apply for a renewal of this qualification, if BeijingZhong Chuan Shi Xun ceases to qualify as a “hightechnology enterprise”, or the tax authorities change their position on our preferential tax treatments in thefuture, our future tax liabilities may materially increase, which could materially and adversely affect our financial condition and results of operations.10If we were deemed a “resident enterprise” by PRC tax authorities, we could be subject to tax on our global income at the rate of 25% under the New EIT Lawand our nonPRC shareholders could be subject to certain PRC taxes.Under the New EIT Law and the implementing rules, both of which became effective January 1, 2008, an enterprise established outside of the PRC with “defacto management bodies” within the PRC may be considered a PRC “resident enterprise” and will be subject to the enterprise income tax at the rate of 25% on itsglobal income as well as PRC enterprise income tax reporting obligations. The implementing rules of the New EIT Law define “de facto management” as “substantialand overall management and control over the production and operations, personnel, accounting, and properties” of the enterprise. However, as of the date of thistransition report, no final interpretations on the implementation of the “resident enterprise” designation are available. Moreover, any such designation, when madeby PRC tax authorities, will be determined based on the facts and circumstances of individual cases. Therefore, if we were to be considered a “resident enterprise”by the PRC tax authorities, our global income would be taxable under the New EIT Law at the rate of 25% and, to the extent we were to generate a substantial amountof income outside of PRC in the future, we would be subject to additional taxes. In addition, the dividends we pay to our nonPRC enterprise shareholders and gainsderived by such shareholders or ADS or ordinary share holders from the transfer of our shares or ADSs may also be subject to PRC withholding tax at the rate up to10%, if such income were regarded as Chinasourced income.Our holding company structure may limit the payment of dividends.We have no direct business operations, other than our ownership of our subsidiaries. While we have no current intention of paying dividends, should wedecide in the future to do so, as a holding company, our ability to pay dividends and meet other obligations depends upon the receipt of dividends or otherpayments from our operating subsidiaries and other holdings and investments. Current PRC regulations permit our PRC subsidiaries to pay dividends to us only outof their accumulated profits, if any, determined in accordance with Chinese accounting standards and regulations. In addition, each of our subsidiaries in China isrequired to set aside at least 10% of its aftertax profits each year, if any, to fund a statutory reserve until such reserve reaches 50% of its registered capital. Thesereserves are not distributable as cash dividends. Furthermore, if our subsidiaries in China incur debt on their own behalf in the future, the instruments governing thedebt may restrict their ability to pay dividends or make other payments to us. As a result, there may be limitations on the ability of our PRC subsidiaries to paydividends or make other investments or acquisitions that could be beneficial to our business or otherwise fund and conduct our business.In addition, under the New EIT Law and the implementing rules that became effective on January 1, 2008, dividends generated from the business of our PRCsubsidiaries after January 1, 2008 and payable to us may be subject to a withholding tax rate of 10% if the PRC tax authorities subsequently determine that we are anonresident enterprise, unless there is a tax treaty with China that provides for a different withholding arrangement.Uncertainties with respect to the PRC legal system could adversely affect us.We conduct all of our business through our subsidiaries in China. Our operations in China are governed by PRC laws and regulations. Our PRCsubsidiaries are generally subject to laws and regulations applicable to foreign investments in China and, in particular, laws and regulations applicable to whollyforeignowned enterprises. The PRC legal system is based on statutes. Prior court decisions may be cited for reference but have limited precedential value.11Since 1979, PRC legislation and regulations have significantly enhanced the protections afforded to various forms of foreign investments in China.However, China has not developed a fully integrated legal system and recently enacted laws and regulations may not sufficiently cover all aspects of economicactivities in China. In particular, because these laws and regulations are relatively new, and because of the limited volume of published decisions and theirnonbinding nature, the interpretation and enforcement of these laws and regulations involve uncertainties. In addition, the PRC legal system is based in part ongovernment policies and internal rules (some of which are not published on a timely basis or at all) that may have a retroactive effect. As a result, we may not beaware of our violation of these policies and rules until some time after the violation. In addition, any litigation in China may be protracted and result in substantialcosts and diversion of resources and management attention.PRC regulation of loans and direct investment by offshore holding companies to PRC entities may delay or prevent us from using the proceeds of our May2010 public offering to make loans or additional capital contributions to our PRC operating subsidiaries, which could materially and adversely affect ourliquidity and our ability to fund and expand our business.In utilizing the proceeds of our May 2010 public offering as an offshore holding company of our PRC operating subsidiaries, we may make loans to our PRCsubsidiaries, or we may make additional capital contributions to our PRC subsidiaries. Any loans to our PRC subsidiaries are subject to PRC regulations. Forexample, loans by us to our subsidiaries in China, which are FIEs, to finance their activities cannot exceed statutory limits and must be registered with the StateAdministration of Foreign Exchange, or SAFE. On August 29, 2008, SAFE promulgated Circular 142, a notice regulating the conversion by a foreigninvestedcompany of foreign currency into RMB by restricting how the converted RMB may be used. The notice requires that RMB converted from the foreign currencydenominated capital of a foreigninvested company may only be used for purposes within the business scope approved by the applicable governmental authorityand may not be used for equity investments within the PRC unless specifically provided for otherwise. The foreign currencydenominated capital shall be verified byan accounting firm before converting into RMB. In addition, SAFE strengthened its oversight over the flow and use of RMB funds converted from the foreigncurrencydenominated capital of a foreigninvested company. To convert such capital into RMB, the foreigninvested company must report the use of such RMB tothe bank, and the RMB must be used to the reported purposes. According to Circular 142, change of the use of such RMB without approval is prohibited. Inaddition, such RMB may not be used to repay RMB loans if the proceeds of such loans have not yet been used. Violations of Circular 142 may result in severepenalties, including substantial fines as set forth in the Foreign Exchange Administration Rules.We may also decide to finance our subsidiaries by means of capital contributions. These capital contributions may need approval from the PRC Ministry ofCommerce, or MOFCOM, or its local counterpart. We may not be able to obtain these government approvals on a timely basis, if at all, with respect to future capitalcontributions by us to our PRC subsidiaries. If we fail to receive such approvals in such cases when approval is required, our ability to use the proceeds of our May2010 public offering and to capitalize our PRC operations may be negatively affected, which could adversely affect our liquidity and our ability to fund and expandour business.Governmental control of currency conversion may affect the value of your investment.The PRC government imposes controls on the convertibility of the RMB into foreign currencies and, in certain cases, the remittance of currency out ofChina. We receive substantially all of our revenues in RMB. Under our current corporate structure, our income is primarily derived from dividend payments from ourPRC subsidiaries. Shortages in the availability of foreign currency may restrict the ability of our PRC subsidiaries to remit sufficient foreign currency to paydividends or other payments to us, or otherwise satisfy their foreign currency denominated obligations. Under existing PRC foreign exchange regulations, paymentsof current account items, including profit distributions, interest payments and expenditures from traderelated transactions, can be made in foreign currencieswithout prior approval from SAFE by complying with certain procedural requirements. However, approval from appropriate government authorities is required whereRMB is to be converted into foreign currency and remitted out of China to pay capital expenses such as the repayment of loans denominated in foreign currencies.The PRC government may also at its discretion restrict access in the future to foreign currencies for current account transactions. If the foreign exchange controlsystem prevents us from obtaining sufficient foreign currency to satisfy our currency demands, we may not be able to pay dividends in foreign currencies to ourshareholders, including holders of our ADSs or ordinary shares.12Fluctuation in the value of the RMB may have a material adverse effect on the value of your investment.The value of the RMB against the U.S. dollar and other currencies may fluctuate and is affected by, among other things, changes in political and economicconditions. On July 21, 2005, the PRC government changed its decadeold policy of pegging the value of the RMB to the U.S. dollar. Under the new policy, the RMBis permitted to fluctuate within a narrow and managed band against a basket of certain foreign currencies. This change in policy has resulted in an approximate26.8% appreciation of the RMB against the U.S. dollar between July 21, 2005 and September 30, 2015. Provisions on Administration of Foreign Exchange, asamended in August 2008, further changed China’s exchange regime to a managed floating exchange rate regime based on market supply and demand. Since reachinga high against the U.S. dollar in July 2008, however, the RMB has traded within a narrow band against the U.S. dollar, remaining within 1% of its July 2008 high butnever exceeding it. As a consequence, the RMB has fluctuated sharply since July 2008 against other freelytraded currencies, in tandem with the U.S. dollar. InAugust 2015, the PRC Government devalued its currency by approximately 3%, representing the largest yuan depreciation for 20 years. Concerns remain thatChina’s slowing economy, and in particular its exports, will need a stimulus that can only come from further cuts in the exchange rate.It is difficult to predict how long the current situation may continue and when and how it may change again as the People’s Bank of China may regularlyintervene in the foreign exchange market to achieve economic policy goals. Substantially all of our revenues and costs are denominated in the RMB, and asignificant portion of our financial assets are also denominated in RMB. We principally rely on dividends and other distributions paid to us by our subsidiaries inChina. Any significant revaluation of the RMB may materially and adversely affect our cash flows, revenues, earnings and financial position, and the value of, andany dividends payable on, our ADSs or ordinary shares in U.S. dollars. Any fluctuations of the exchange rate between the RMB and the U.S. dollar could also resultin foreign currency translation losses for financial reporting purposes.PRC laws and regulations governing our businesses. If we are found to be in violation of such PRC laws and regulations, we could be subject to sanctions. Inaddition, changes in such PRC laws and regulations may materially and adversely affect our business.There are substantial uncertainties regarding the interpretation and application of PRC laws and regulations, including, but not limited to, the laws andregulations governing our business. These laws and regulations are relatively new and may be subject to change, and their official interpretation and enforcementmay involve substantial uncertainty. The effectiveness of newly enacted laws, regulations or amendments may be delayed, resulting in detrimental reliance byforeign investors. New laws and regulations that affect existing and proposed future businesses may also be applied retroactively.The PRC government has broad discretion in dealing with violations of laws and regulations, including levying fines, revoking business and other licensesand requiring actions necessary for compliance. In particular, licenses and permits issued or granted to us by relevant governmental bodies may be revoked at a latertime by higher regulatory bodies. We cannot predict the effect of the interpretation of existing or new PRC laws or regulations on our businesses. We cannot assureyou that our current ownership and operating structure would not be found in violation of any current or future PRC laws or regulations. As a result, we may besubject to sanctions, including fines, and could be required to restructure our operations or cease to provide certain services. In addition, any litigation in China maybe protracted and result in substantial costs and diversion of resources and management attention. Any of these or similar actions could significantly disrupt ourbusiness operations or restrict us from conducting a substantial portion of our business operations, which could materially and adversely affect our business,financial condition and results of operations.13If we were required to obtain the prior approval of the China Securities Regulatory Commission, or CSRC, of the listing and trading of our ADSs on theNASDAQ Capital Market, we may face regulatory actions or other sanctions from the CSRC or other PRC regulatory agencies.On August 8, 2006, six PRC regulatory agencies, including the Ministry of Commerce, the State Assets Supervision and Administration Commission, theState Administration for Taxation, the State Administration for Industry and Commerce, the CSRC and the SAFE, jointly issued the Regulations on Mergers andAcquisitions of Domestic Enterprises by Foreign Investors, which became effective on September 8, 2006 (the “New M&A Rules”). This regulation, among otherthings, includes provisions that purport to require that an offshore special purpose vehicle formed for the purposes of overseas listing of equity interests in PRCcompanies and controlled directly or indirectly by PRC companies or individuals obtain the approval of the CSRC prior to the listing and trading of such specialpurpose vehicle’s securities on an overseas stock exchange. On September 21, 2006, the CSRC published on its official website procedures regarding its approval ofoverseas listings by special purpose vehicles. The CSRC approval procedures require the filing of a number of documents with the CSRC and it would take severalmonths to complete the approval process, if practicable at all. The application of this new PRC regulation remains unclear with no consensus currently existingamong leading PRC law firms regarding the scope of the applicability of the CSRC approval requirement. Prior to our May 2010 initial public offering, our PRC counsel has advised us that, based on its understanding of the current PRC laws and regulations aswell as the procedures announced on September 21, 2006: (i) Softech was directly incorporated by Topsky as a foreign investment enterprise under PRC law;therefore, there was no acquisition of the equity of a “PRC domestic company” as defined under the New M&A Rules; and (ii) the contractual arrangementsbetween Kingtone Information and Softech were not clearly defined and considered as the transaction which shall be applied to the New M&A Rules. Therefore, wedid not seek prior CSRC approval for our initial public offering.However, if the CSRC required that we obtain its approval prior to the completion of our initial public offering and the listing of our ADSs on the NASDAQCapital Market, we may face regulatory actions or other sanctions from the CSRC or other PRC regulatory agencies. These regulatory agencies may impose fines andpenalties on our operations in the PRC, limit our operating privileges in the PRC, delay or restrict the repatriation of the proceeds from our initial public offering intothe PRC, or take other actions that could have a material adverse effect on our business, financial condition, results of operations, reputation and prospects, as wellas the trading price of our shares.Also, if the CSRC requires that we obtain its approval, we may be unable to obtain a waiver of the CSRC approval requirements if and when procedures areestablished to obtain such a waiver. Any uncertainties and/or negative publicity regarding this CSRC approval requirement could have a material adverse effect onthe trading price of our shares.PRC regulations relating to the establishment of offshore special purpose companies by PRC residents may subject our PRC resident shareholders to penaltiesand limit our ability to inject capital into our PRC subsidiaries, limit our PRC subsidiaries’ ability to distribute profits to us, or otherwise adversely affect us.On October 21, 2005, the SAFE issued the Notice on Issues Relating to the Administration of Foreign Exchange in Fundraising and Reverse InvestmentActivities of Domestic Residents Conducted via Offshore Special Purpose Companies, or Notice 75, which became effective as of November 1, 2005. According toNotice 75, prior registration with the local SAFE branch is required for PRC residents to establish or to control an offshore company for the purposes of financingsuch offshore company with assets or equity interests in an onshore enterprise located in the PRC, or an offshore special purpose company. An amendment toregistration or filing with the local SAFE branch by such PRC resident is also required for the injection of equity interests or assets of an onshore enterprise in theoffshore special purpose company or overseas funds raised by such offshore company, or any other material change involving a change in the capital of theoffshore special purpose company. Moreover, Notice 75 applies retroactively. As a result, PRC residents who have established or acquired control of offshorespecial purpose companies that have made onshore investments in the PRC in the past are required to have completed the relevant registration procedures with thelocal SAFE branch by March 31, 2006. To further clarify the implementation of Notice 75, the SAFE issued Circular 106 on May 29, 2007. Under Circular 106, PRCsubsidiaries of an offshore special purpose company are required to coordinate and supervise the filing of SAFE registrations by the offshore holding company’sshareholders or beneficial owners who are PRC residents in a timely manner.14Some of our current shareholders and/or beneficial owners may fall within the ambit of the SAFE notice and be required to register with the local SAFEbranch as required under the SAFE notice. If so required, and if such shareholders and/or beneficial owners fail to timely register their SAFE registrations pursuantto the SAFE notice, or if future shareholders and/or beneficial owners of our company who are PRC residents fail to comply with the registration procedures setforth in the SAFE notice, this may subject such shareholders, beneficial owners and/or our PRC subsidiaries to fines and legal sanctions and may also limit ourability to contribute additional capital into our PRC subsidiaries, limit our PRC subsidiaries’ ability to distribute dividends to our company, or otherwise adverselyaffect our business.Risks Associated with our ADSs and Ordinary SharesOur securities are not currently traded on any United States public markets and you may not be able to resell your securities for some time.There is currently no public market for our ordinary shares or American Depository Shares (“ADSs”) in the United States or in any other jurisdiction. OurADSs were voluntarily delisted from the NASDAQ Capital Market on September 19, 2018. We have applied to NASDAQ for the listing of our ordinary shares on theNASDAQ Capital Market and received an approval for listing of Ordinary Shares on August 6, 2018, and as of the date of this transition report, that application andapproval are currently under review. We cannot assume that our ordinary shares will be accepted for listing on the NASDAQ Capital Market, or if listed, that wewould continue to meet the applicable minimum listing requriements. You may not be able to sell your ordinary shares quickly or at all if we are unable to gain listingon a public market in the United States.The market price of our ADSs has historically been highly volatile, and you may not be able to resell our ordinary shares at or above your initial purchaseprice.There may be a limited public market for our ordinary shares and, as discussed above, our ADSs are no longer listed on any public market in the UnitedStates or any other jurisdiction. We cannot assure you that there will be an active trading market for our ordinary shares in the future. If our ordinary shares areaccepted for listing on a public market, you may not be able to sell your ordinary shares quickly or at the market price if trading in our ordinary shares is not active. The trading price of our ADSs and ordinary shares may be volatile. The price of our ADSs and ordinary shares could be subject to wide fluctuations inresponse to a variety of factors, including the following:1.Introduction of new products, services or technologies offered by us or our competitors;2.Failure to meet or exceed revenue and financial projections we provide to the public;3.Actual or anticipated variations in quarterly operating results;4.Failure to meet or exceed the estimates and projections of the investment community;5.General market conditions and overall fluctuations in United States equity markets;6.Announcements of significant acquisitions, strategic partnerships, joint ventures or capital commitments by us or our competitors;7.Disputes or other developments relating to proprietary rights, including patents, litigation matters and our ability to obtain patent protection for ourtechnologies;8.Additions or departures of key management personnel;9.Issuances of debt or equity securities;10.Significant lawsuits, including patent or shareholder litigation;11.Changes in the market valuations of similar companies;12.Sales of additional ordinary shares or other securities by us or our shareholders in the future;13.Trading volume of our ordinary shares;14.Fluctuations in the exchange rate between the U.S. dollar and Renminbi;15.Negative market perception and media coverage of our company or other companies in the same or similar industry with us; and16.Other events or factors, many of which are beyond our control.15In addition, the stock market in general, and the NASDAQ Capital Market and software products and services companies in particular, have experiencedextreme price and volume fluctuations that have often been unrelated or disproportionate to the operating performance of these companies. Broad market andindustry factors may negatively affect the market price of our ordinary shares, regardless of our actual operating performance. Our ADSs and ordinary shares may be subject to the SEC’s penny stock rules which may make it difficult for brokerdealers to complete customer transactionsand trading activity in our securities.Our ADSs and ordinary shares may be deemed to be “penny stock” as that term is defined under the Securities Exchange Act of 1934, as amended. Pennystocks generally are equity securities with a price of less than $5.00 (other than securities registered on certain national securities exchanges or quoted on theNASDAQ system, provided that current price and volume information with respect to transactions in such securities is provided by the exchange or system). Pennystock rules impose additional sales practice requirements on brokerdealers who sell to persons other than established customers and “accredited investors.” Theterm “accredited investor” refers generally to institutions with assets in excess of $5,000,000 or individuals with a net worth in excess of $1,000,000 or annual incomeexceeding $200,000 or $300,000 jointly with their spouse in each of the prior two years.The penny stock rules require a brokerdealer, prior to a transaction in a penny stock not otherwise exempt from the rules, to deliver a standardized riskdisclosure document in a form prepared by the SEC, which provides information about penny stocks and the nature and level of risks in the penny stockmarket. Moreover, brokerdealers are required to determine whether an investment in a penny stock is a suitable investment for a prospective investor. A brokerdealer must receive a written agreement to the transaction from the investor setting forth the identity and quantity of the penny stock to be purchased. Theserequirements may make it more difficult for brokerdealers to effectuate customer transactions and trading activity in our securities. As a result, the market price ofour ADSs and ordinary shares may be depressed, and you may find it more difficult to sell our ADSs or ordinary shares.Sales of a substantial number of ordinary shares or ADSs in the public market by our existing shareholders could cause the price of our ADSs to fall.Sales of a substantial number of our ordinary shares or ADSs in the public market or the perception that these sales might occur, could depress the marketprice of our ADSs and could impair our ability to raise capital through the sale of additional equity securities. We are unable to predict the effect that sales may haveon the prevailing market price of our ADSs.All of our existing shareholders prior to our May 2010 offering were subject to lockup agreements with the underwriters of the offering that restricted theshareholders’ ability to transfer ordinary shares or ADSs until expiration of the lockup period in November 2010. The lockup agreements limited the number ofordinary shares or ADSs that may be sold immediately following the public offering. Subject to certain limitations, approximately 1,000,000 of our total outstandingshares are now eligible for sale. Sales of ordinary shares by these shareholders could have a material adverse effect on the trading price of our ADSs.Future sales and issuances of our ordinary shares, or rights to purchase our ordinary shares, including pursuant to our 2010 Omnibus Incentive Plan, couldresult in additional dilution of the percentage ownership of our shareholders and could cause the price of our ordinary shares to fall.We expect that significant additional capital will be needed in the future to continue our planned operations. To the extent we raise additional capital byissuing equity securities, our shareholders may experience substantial dilution. We may sell ordinary shares, convertible securities or other equity securities in oneor more transactions at prices and in a manner we determine from time to time. If we sell ordinary shares, convertible securities or other equity securities in more thanone transaction, investors may be materially diluted by subsequent sales. Such sales may also result in material dilution to our existing shareholders, and newinvestors could gain rights superior to our existing shareholders.16We do not intend to pay dividends on our ordinary shares, so any returns will be limited to the value of our ADSs and ordinary shares.We have never declared or paid any cash dividend on our ordinary shares. We currently anticipate that we will retain future earnings for the development,operation and expansion of our business and do not anticipate declaring or paying any cash dividends for the foreseeable future. Any return shareholders willtherefore be limited to the value of their ADSs or ordinary shares.As the rights of shareholders under British Virgin Islands law differ from those under U.S. law, you may have fewer protections as a shareholder.Our corporate affairs will be governed by our memorandum of association and articles of association, the BVI Business Companies Act, 2004, or the BVIAct, of the British Virgin Islands and the common law of the British Virgin Islands. The rights of shareholders to take legal action against our directors, actions byminority shareholders and the fiduciary responsibilities of our directors under British Virgin Islands law are to a large extent governed by the BVI Act and thecommon law of the British Virgin Islands. The common law of the British Virgin Islands is derived in part from comparatively limited judicial precedent in the BritishVirgin Islands as well as from English common law, which has persuasive, but not binding, authority on a court in the British Virgin Islands. The rights of ourshareholders and the fiduciary responsibilities of our directors under British Virgin Islands law are not as clearly established as they would be under statutes orjudicial precedents in some jurisdictions in the United States. In particular, the British Virgin Islands has a less developed body of securities laws as compared to theUnited States, and some states (such as Delaware) have more fully developed and judicially interpreted bodies of corporate law.As a result of all of the above, holders of our ADSs and ordinary shares may have more difficulty in protecting their interests through actions against ourmanagement, directors or major shareholders than they would as shareholders of a U.S. company.British Virgin Islands companies may not be able to initiate shareholder derivative actions, thereby depriving shareholders of the ability to protect theirinterests.British Virgin Islands companies may not have standing to initiate a shareholder derivative action in a federal court of the United States. The circumstancesin which any such action may be brought, and the procedures and defenses that may be available in respect to any such action, may result in the rights ofshareholders of a British Virgin Islands company being more limited than those of shareholders of a company organized in the United States. Accordingly,shareholders may have fewer alternatives available to them if they believe that corporate wrongdoing has occurred. The British Virgin Islands courts are alsounlikely to recognize or enforce against us judgments of courts in the United States based on certain liability provisions of U.S. securities law; and to imposeliabilities against us, in original actions brought in the British Virgin Islands, based on certain liability provisions of U.S. securities laws that are penal in nature.There is no statutory recognition in the British Virgin Islands of judgments obtained in the United States, although the courts of the British Virgin Islands willgenerally recognize and enforce the nonpenal judgment of a foreign court of competent jurisdiction without retrial on the merits.The laws of the British Virgin Islands provide little protection for minority shareholders, so minority shareholders will have little or no recourse if theshareholders are dissatisfied with the conduct of our affairs.Under the law of the British Virgin Islands, there is little statutory law for the protection of minority shareholders other than the provisions of the BVI Actdealing with shareholder remedies. The principal protection under statutory law is that shareholders may bring an action to enforce the constituent documents ofthe corporation, our memorandum of association and articles of association. Shareholders are entitled to have the affairs of the company conducted in accordancewith the general law and the memorandum of association and articles of association.17There are common law rights for the protection of shareholders that may be invoked, largely dependent on English company law, since the common law ofthe British Virgin Islands is limited. Under the general rule pursuant to English company law known as the rule in Foss v. Harbottle, a court will generally refuse tointerfere with the management of a company at the insistence of a minority of its shareholders who express dissatisfaction with the conduct of the company’s affairsby the majority or the board of directors. However, every shareholder is entitled to have the affairs of the company conducted properly according to law and thecompany’s constituent documents. As such, if those who control the company have persistently disregarded the requirements of company law or the provisions ofthe company’s memorandum of association and articles of association, then the courts will grant relief. Generally, the areas in which the courts will intervene are thefollowing: (1) an act complained of which is outside the scope of the authorized business or is illegal or not capable of ratification by the majority; (2) acts thatconstitute fraud on the minority where the wrongdoers control the company; (3) acts that infringe on the personal rights of the shareholders, such as the right tovote; and (4) where the company has not complied with provisions requiring approval of a majority of shareholders, which are more limited than the rights affordedminority shareholders under the laws of many states in the United States.Antitakeover provisions in our memorandum of association and articles of association and our right to issue preference shares could make a thirdpartyacquisition of us difficult.Some provisions of our memorandum of association and articles of association may discourage, delay or prevent a change in control of our company ormanagement that shareholders may consider favorable, including provisions that authorize our board of directors to issue preference shares in one or more seriesand to designate the price, rights, preferences, privileges and restrictions of such preference shares.If you hold our ADSs, you may not have the same voting rights as the holders of our ordinary shares and must act through the depositary to exercise your rights.Holders of our ADSs will not be able to exercise voting rights attaching to the shares evidenced by our ADSs on an individual basis. Holders of our ADSswill appoint the depositary or its nominee as their representative to exercise the voting rights attaching to the shares represented by the ADSs. You may not receivevoting materials in time to instruct the depositary to vote, and it is possible that you, or persons who hold their ADSs through brokers, dealers or other third parties,will not have the opportunity to exercise a right to vote. Upon our written request, the depositary will mail to you a shareholder meeting notice which contains,among other things, a statement as to the manner in which your voting instructions may be given, including an express indication that such instructions may begiven or deemed given to the depositary to give a discretionary proxy to a person designated by us if no instructions are received by the depositary from you on orbefore the response date established by the depositary. However, no voting instruction shall be deemed given and no such discretionary proxy shall be given withrespect to any matter as to which we inform the depositary that (i) we do not wish such proxy given, (ii) substantial opposition exists, or (iii) such matter materiallyand adversely affects the rights of shareholders. We will make all reasonable efforts to cause the depositary to extend voting rights to you in a timely manner, butyou may not receive the voting materials in time to ensure that you can instruct the depositary to vote your ADSs. Furthermore, the depositary and its agents willnot be responsible for any failure to carry out any instructions to vote, for the manner in which any vote is cast or for the effect of any such vote. As a result, youmay not be able to exercise your right to vote and you may lack recourse if your ADSs are not voted as you requested. In addition, in your capacity as an ADSholder, you will not be able to call a shareholders’ meeting.You may not be able to participate in rights offerings and may experience dilution of your holdings as a result.We may from time to time distribute rights to our shareholders, including rights to acquire our securities. However, we may not, and under the depositagreement for the ADSs, the depositary will not, offer those rights to ADS holders unless both the rights and the underlying securities to be distributed to ADSholders are registered under the Securities Act, or the distribution of them to ADS holders is exempted from registration under the Securities Act with respect to allholders of ADSs. We are under no obligation to file a registration statement with respect to any such rights or underlying securities or to endeavor to cause such aregistration statement to be declared effective. In addition, we may not be able to rely on an exemption from registration under the Securities Act to distribute suchrights and securities. Accordingly, holders of our ADSs may be unable to participate in our rights offerings and may experience dilution in their holdings as a result.You may be subject to limitations on transfer of your ADSs.Your ADSs are transferable on the books of the depositary. However, the depositary may close its transfer books at any time or from time to time when itdeems expedient in connection with the performance of its duties. In addition, the depositary may refuse to deliver, transfer or register transfers of ADSs generallywhen our books or the books of the depositary are closed, or at any time if we or the depositary deem it advisable to do so because of any requirement of law or ofany government or governmental body, or under any provision of the deposit agreement, or for any other reason.18We may be a passive foreign investment company, of PFIC, which could lead to additional taxes for U.S. holders of our ADSs or ordinary shares.We do not expect to be, for U.S. federal income tax purposes, a passive foreign investment company, or a PFIC, which is a foreign company for which, inany given taxable year, either at least 75% of its gross income is passive income, or investment income in general, or at least 50% of its assets produce or are held toproduce passive income, for the current taxable year, and we expect to operate in such a manner so as not to become a PFIC for any future taxable year. However,because the determination of PFIC status for any taxable year cannot be made until after the close of such year and requires extensive factual investigation,including ascertaining the fair market value of our assets on a quarterly basis and determining whether each item of gross income that we earn is passive income, wecannot assure you that we will not become a PFIC for the current taxable year or any future taxable year. If we are or become a PFIC, a U.S. holder of our ADSs orordinary shares could be subject to additional U.S. federal income taxes on gain recognized with respect to the ADSs or ordinary shares and on certain distributions,plus an interest charge on certain taxes treated as having been deferred under the PFIC rules. Noncorporate U.S. holders will not be eligible for reduced rates oftaxation on any dividends received from us if we are a PFIC in the taxable year in which such dividends are paid or in the preceding taxable year.If our ordinary shares are listed on the NASDAQ Capital Market and the trading price of our ordinary shares fails to comply with the continued listingrequirements of the NASDAQ Capital Market, we would face possible delisting, which would result in a limited public market for our ordinary shares andmake obtaining future debt or equity financing more difficult for us.Companies listed on NASDAQ are subject to delisting for, among other things, failure to maintain a minimum closing bid price of $1.00 per share for 30consecutive business days. On December 19, 2011, we received a letter from NASDAQ indicating that for the last 30 consecutive business days, the closing bidprice of our ADSs fell below the minimum $1.00 per share requirement pursuant to NASDAQ Listing Rule 5550(a)(2) for continued listing on the NASDAQ CapitalMarket. We regained compliance with the minimum bid price requirement for continued listing set forth in NASDAQ Listing Rule 5550(a)(2), as its ADS with itsunderlying ordinary share has achieved a closing bid price of $1.00 or greater for the 10 consecutive business days from November 6 to November 23, 2012 byimplementing a 1for10 combination, or reverse split of the ordinary shares effective November 6, 2012. When listed, we cannot be sure that the price of our ordinaryshares will comply with this requirement for continued listing on the NASDAQ Capital Market in the future. If we were not able to do so, our ordinary shares wouldbe subject to delisting and would likely trade on the overthecounter market. If our ordinary shares were to trade on the overthecounter market, selling ourordinary shares could be more difficult because smaller quantities of shares would likely be bought and sold, transactions could be delayed, and security analysts’coverage of us may be reduced. In addition, brokerdealers have certain regulatory burdens imposed upon them, which may discourage brokerdealers from effectingtransactions in our ordinary shares, further limiting the liquidity of our ordinary shares. As a result, the market price of our ordinary may be depressed, and you mayfind it more difficult to sell our ordinary shares. Such delisting from the NASDAQ Capital Market and continued or further declines in our share price could alsogreatly impair our ability to raise additional necessary capital through equity or debt financing.ITEM 4. INFORMATION ON THE COMPANY.A . HISTORY AND DEVELOPMENT OF THE COMPANY.OverviewWe are a holding company and conduct our operations through our whollyowned subsidiary named LK Technology Ltd., a British Virgin Islands limitedliability company (“LK Technology”), and its whollyowned subsidiaries, MMB Limited and Mobile Media (China) Limited and their respective subsidiaries, whichhold the rights to deploy WiFi systems on about 700 trains in China, including 290 trains in which WiFi systems have already been installed and are in operation. InMay 2010, we consummated an initial public offering of our American Depository Shares, or ADSs, for gross proceeds of $16 million, and our ADSs were listed onthe NASDAQ Capital Market under the ticker symbol “KONE”. Our ordinary shares are not currently listed on any trading market. Our American Depository Shares(“ADSs”) were voluntarily delisted from the NASDAQ Capital Market on September 19, 2018. We have applied to NASDAQ for the listing of our ordinary shares onthe NASDAQ Capital Market and received an approval for listing of Ordinary Shares on August 6, 2018, and as of the date of this transition report, that applicationand approval are currently under review.19On August 17, 2018, we consummated an asset exchange transaction, pursuant to which we exchanged all issued and outstanding capital stock in TopskyInfoTech Holdings Pte Ltd., the parent of Softech, for the issued and outstanding capital stock of LK Technology (the “Asset Exchange”). In connection with theAsset Exchange, we changed our name on August 20, 2018, and on September 20, 2018, issued to the shareholders of C Media Limited, the former parent of LKTechnology, (i) 185,412,599 of our ordinary shares, par value $0.01 per share and (ii) 1,000,000 of our preferred shares. Upon the consummation of the AssetExchange, we ceased our previous business operations and became a company focused on the provision of WiFi and mobile application products for long distancerail travelers in China.On August 25, 2018, LK Technology entered into a Stock Purchase Agreement (the “Agreement”) with the shareholders (“Shareholders”) of SuperengineHoldings Limited, a limited liability company organized under the laws of the British Virgin Islands (the “Superengine”), pursuant to which LK Technology acquiredall of the issued and outstanding capital stock of Superengine for an aggregate purchase price of US$60 million (the “Purchase Price”), which are paid by theissuance of our Ordinary Shares in an amount equal to the quotient of (x) the Purchase Price divided by (y) the average of the closing prices of the Ordinary Shareson the NASDAQ Capital Market over the 12 months period preceding July 31, 2018. We are a party to the Agreement in connection with the issuance of theOrdinary Shares and certain other limited purposes.Corporate InformationOur principal executive offices are located at LAB32, SOHO 3Q, No 9, Guanghua Road, Chaoyang District, Beijing, People’s Republic of China 100020. Ourwebsite is www.luokung.com. We routinely post important information on our website. The information contained on our website is not a part of this transitionreport.Our agent for service of process in the United States is Worldwide Stock Transfer, LLC, the current transfer agent of the Company, with a mailing address ofOne University Plaza, Suite 505, Hackensack, New Jersey 07601.B. BUSINESS OVERVIEW.We are a Chinabased provider of rail WiFi and mobile application products for long distance travelers in China. Our primary mobile application, theLuoKuang platform, consists of the LuoKuang mobile applications, a series of supporting software at the server end, and railWiFi hardware and equipment on thetrains that we serve. The LuoKuang platform incorporates technology covered by 22 patents and about 34 software copy rights, and serves as a content and servicedistribution platform that is tailored for particular travel stages featuring geographic location and social interaction. The content and services distributed byLuoKuang contain information, entertainment, travel, ecommerce, online to offline (“O2O”), advertisement and marketing features.LuoKuang mainly provides personalized and precise services to long distance travelers in two locations: on the train and at the destination. Based on thetravel environment, the core elements of our users’ needs include staving off boredom on trains and discovering and exploring new locations upon arrival. The mainservices contain entertainment services (videos and audio, digital readings, games specific and tailored to the travel stage) and social services (satisfying thedemand for value discovery of unfamiliar destinations through social interaction among strangers based on locations). As of December 31, 2017, the LuoKuangplatform featured about 38 million users.The setting services on the train focus on providing entertainment content for passengers to pass time during longdistance travel in closed environments.For example, we provide access to long video formats such as movies and TV shows, short videos, music, digital readings and games.20We use the most valuable WiFi location—the train WiFi setting—as the entrance of our LuoKuang platform and mobile applications. Passengers typicallyride trains for longdistance and interprovincial travel purposes. The long periods of monotonous journeys and the cost concerns for roaming traffic fees enable thecombination of entertainment content service needs and WiFi access needs. Our railWiFi becomes a valuable and sophisticated WiFi service in this setting—notjust WiFi connection service, but a provider of sophisticated services through a WiFi connection. In addition, the annual traffic of 800,000 passengers onboardeach train makes rail WiFi a huge entry point for mobile applications. We do not define ourselves as a train WiFi communication service operator but as a longdistance travel mobile service provider. We provide users with free WiFi access so that users are able to connect to the LuoKuang platform and thus access relatedentertainment services, services on the train and destination services. The rail WiFi is our access point to a significant pool of users and the entrance to acquiringadditional users.The setting services focus on providing targeted push services to users while travelling in unfamiliar cities. Information and service guidance are preciselypushed to appeal to the interests and tastes (eating, drinking, shopping, touring and culture) of individual users (cuisine specialties and local snacks, local events,viewing sights, culture, history, stories). The service guidance is generated, shared and distributed by individual users (travelers, local residents, local businesses)interacting with current locations and featuring users who generated contents from selfmedia and small and medium vertical contents providers).Based on the GIS (geoinformation system), Superengine is a provider of big spatialtemporal data, network graphic image technology and relevant service.Its super engine series includes computer graphic image engines and spatial database engines. Spatialtemporal cloud index is the core of the company’s spatialtemporal data engines. It is equivalent to the neural network of the big data and the Internet. It extends the value of its products and platform to its data serviceproviders. In cooperation, its service providers can be divided into three categories, namely, basic geographic data providers, industrial data providers andbehavioral data providers). Superengine’s industriesoriented spatialtemporal data engine was launched in 2016. The spatialtemporal GIS platform has been appliedin industries such as aerospace, power grid, surveying & mapping, agriculture, cultural relic preservation, water conservancy, public security, railway section, smartcities, and business location selection.Our primary sources of revenue are advertising and marketing promotion revenues.Our Industry — Mobile Internet IndustryOur products and services are engaged in the mobile internet industry. Our main services consist of entertainment services (videos, audio, digital readings,games that are tailormade for passengers on train) and other services including satisfying the demand for value discovery of unfamiliar destinations through socialinteractions among strangers based in such locations). The mobile internet industry in China is rapidly growing and is likely to be in a longterm growth trend.According to the Mobile Internet Blue Book of China Mobile Internet Report, in 2017 the market size of China mobile internet reached RMB 605 billion. Now China isin a leading position in terms of smartphone, mobile communication network and mobile application services. The pool of users is anticipated to keep expandingthrough the promotion and popularization of smartphones and the expansion of the mobile internet market.Video is the leading online entertainment format in China. According to the iResearch Report, over 80% of total time spent by users on online entertainmentin China in 2016 was internet video. Online entertainment, especially internet video, is attractive to Chinese users due to many favorable factors, including easyaccessibility, wide content selection, and innovative platforms with social features.For 2017, the transaction volume of China mobile ecommerce market reached to over RMB 4 trillion according to the China Mobile Ecommerce IndustryResearch Report from iResearch, representing an increase of 19.1%. For the next few years, China mobile online shopping will likely maintain steady growth. Thefocal point of competition in China mobile ecommerce market has shifted from infrastructure service providers to integrated and accurate services providers.Drawing in users with compelling content in diversified scenes has become a trend.21The revenue for China mobile gaming industry reached RMB 144.58 billion for the year of 2017, according to the China Mobile Game Industry ResearchReport from iResearch. With increased investment by largescale enterprises in the sector of mobile games and the strict enforcement of the mobile game industryrelated regulatory policy guidelines, the mobile game market as a whole will become more organized and standardized.According to the Annual Analysis of China Mobile Reading Industry from Analysis, for the year of 2017, the mobile reading market in China reached toRMB 14.04 billion. By the end of 2016, the size of China mobile's reading market reached RMB 11.86 billion, showing an increase of 18.38% in 2017.The closed and boring environment for passengers of longdistance travel and high roaming charges lead to a strong demand to use our rail WiFi services.Passengers, through their own mobile phone, have access to the free WiFi network in each carriage, access to our rich mobile internet entertainment content andtravel services. According to the annual statistical bulletin of China Railway Corporation in 2017, there were about 6,030 trains in operation in China in 2017,consisting of 2,935 high speed trains and 3,095 express trains. The rail WiFi system that we have installed are currently all on express trains. The market value will bemultiplied several times following the extended coverage of service on other trains.Our StrengthsWe believe the following strengths differentiate us from our competitors:Our strategy is to build up personalized and targeted service products for travelers through rail WiFi networks, enabling our services to evolve into a coredriving distribution platform that provides content, news, games, ecommerce, OTO service, travel services and advertising and marketing. In comparison, ourcompetitors offer simple forms of media services on trains. We focus on personalized and targeted matching between users on long distance trips and services. Ourcompetitors focus on operating and generating internet traffic.We possess a complete set of technology system including network, client end and service and operation platform. We have patent protections for WiFiequipment on trains. Our technology strengths are briefly summarized below.WiFi EquipmentPatent protected. Supports WiFi/3G/4G telecom modules; 4 core CPU with X86 architecture, and SSD hard disk with big storage for localcontents.InfrastructureThe technology infrastructures include the application program system, big data gathering and processing systems, intelligence cloudsservice deployment structure systems and our WiFi hardware server deployment structure system. The operation center, big data center,contents center and railWiFi server system are built on this infrastructure. On the above layer, the equipment management platform,account and payment platform, contents management platform and advertisement distribution platform are set up for daily managementpurpose.LuoKuang strengthens the connection of services among people, setting and locations. In catering to people on the move, we anticipate strengthening therelationship between users and their locations in a given moment. Currently, LuoKuang provides the link between users and thirdparty service providers andprovides value added services to both users and thirdparty service providers. The connection is not simply a traffic diversion, but also the direct presentation ofrelevant services in the LuoKuang platform. The open API interface and independent product software package allows easy access by service providers anddevelopers and supports data service, advertisement operations, billing, users promotion and product marketing services. As an API product, LuoKuang does notcreate content or services. The content and services are provided by our partners in the LuoKuang platform. Now, the majority of top mobile internet content andservices providers in China have a presence in the Luokuang platform. Those include, but are not limited to, Toutiao, Wangyi News, iqiyi, Letv, YoudianCinema(Hollywood films), Sohu video, Phoenix Video, Kugou Music, FM Qingting, iReader, Baidu Literature, Phoenix Novel, Baidu Game, Meituan, Dianping, andsimilar content providers.22Our StrategyLuoKuang is positioned to provide API interface services and geographic information social services. The API interface services are provided within thetypical BC model. LuoKuang pushes the content and services from thirdparty service providers to users. The local businesses, service practitioners, residents, andforeign travelers are all defined as a “user” and may participate in social interactions based on local value information and generate UGC content. The socalled localvalue information is defined as information, views, evaluations, experiences and experience sharing related to the local cultural scene, native products,entertainment, food, tourism and activities.The LuoKuang user growth strategy is to have access to users through the travelers’ use of mobile devices in connection with longdistance train travel.Through deploying WiFi systems on trains and providing free WiFi access to passengers, LuoKuang is able to have consistent access to longdistance travelers.The WiFi system on the train has become a powerful user portal at the early stage of LuoKuang and has gained substantial user traffic. We are in a leading positionin terms of numbers of trains contracted and trains in operation with our free WiFi system. We have contracted with about 700 trains, which cover almost 560 millionannual passenger trips. As of the date of this report, approximately 290 trains are operating our rail WiFi system. We will continue to install our rail WiFi system inthe following years.The development strategy for LuoKuang encompasses the following:1.Enhance our local cycle service (a recommendation service system based on the location of travelers after their arrival, recommendations includingtourist attractions, local specialties and other items of interest), strengthen services for arrivals in the form of social interaction and focus on the valueof relationships between users and their current locations.2.Focus on the development of geographic positioning technology. Get the business of local cycle and users on train mixed together. We will put oureffort to maximize the synergy effect.3.Big Data: Behavior data about passenger trips is obtained via the traffic entrance of rail WiFi and these data will help to optimize our product.4.While enhancing setting service experiences and optimizing entertainment experiences, we will enrich ecommerce services on trains featuringrecommendations of customized products and ecommerce shopping guidance of products labeled with specific geographic location (and trafficdiversion).5.Focus on API positioning and attract more premium vertical service providers (contents and services).Intellectual PropertyWe have registered the following software copyrights, patents and trademarks for our business operations. We believe this intellectual property forms anintegral part of our competitive strength.23Patents:We have been granted some inventions by the State Intellectual Property Office of PRC. We possess a complete set of technology system includingnetwork, client end and service and operation platform. We have patent protections for WiFi equipment on trains. We have received the following patents:No.Name of patentTypeRegistrationNumberDate of Insurance1.Wireless communication multimedia chip business consumer informationacquisition terminal deviceInventionZL 2010 2 0528767.9Sep 21, 20112.A user behavior processing method and device for intelligent terminalInventionZL 2013 1 0301728.3May 27, 20153.A global positioning system terminal deviceInventionZL 2010 2 0253452.8Nov 7, 20114.A wireless multimedia serverInventionZL 2013 2 0220183.9Nov 13, 20135.Ordering system of passengers on trainInventionZL 2015 2 0095381.6Aug 5, 20156.A wireless multimedia serverInventionZL 2015 2 0201382.4Oct 28, 20157.An antenna structureInventionZL 2016 2 0424352.4Mar 1, 20178.Spatial data progressive transmission method and deviceInvention201010617383.9Jun 15, 20169.Methods and devices for conflict detection and avoidance of spatial entity elementlabelingInvention201010617385.8Mar 26, 201410.Spatial data processing method and deviceInvention201010617399.XJun 26, 201311.Method and device of spatial data simplificationInvention201010617400.9Mar 13, 201312.Method and device for judging the occlusion type of space entityInvention201010617403.2Sep 25, 201313.A method and device for distributed mapping of 3d model dataInvention201110274924.7Mar 26, 201414.Data simplification of 3d model, gradual transmission method and deviceInvention201110275336.5Mar 25, 201515.Spatial data transmission method and deviceInvention201110306393.5Dec 13, 201416.Methods and devices for spatial data processing, simplification and progressivetransmissionInvention201210104250.0Jun 10, 201517.Spatial data progressive transmission method and deviceInvention201310367021.2Jun 23, 201718.Simplification method and device of spatial dataInvention201310367128.7Sep 22, 201719.The method and device to accelerate transmission and display of graphic dataacross platformsInvention201210116149.7Aug 10, 201620.Methods and devices related to spatial data compression, decompression andprogressive transmissionInvention201310136682.4Nov 10, 2017We also have two patents outside of China.No.Name of patentCountryNationalRegistrationNumberDate ofInsurance1.Spatial data processing method and deviceJapan2012547439Jun 20, 20142.Methods and devices related to spatial data compression, decompression andprogressive transmissionU.S.A14/394,610Sep 5, 201724Software Copyrights:We have received the following software copyrights from the National Copyright Administration (“NCA”) of PRC:No.Name of CopyrightAchievement approachRegistration numberTime of obtainExpire time1.WAP PUSH Business operation platformsystemIndependent research anddevelopment2007SRBJ1464Jul 23, 200750 years2.TDSCDMA Streaming media businessmanagement platform software V1.0Independent research anddevelopment2009SRBJ0412Jan 22, 200950 years3.Content management platform systemsoftware V1.0Independent research anddevelopment2009SRBJ1374Apr 1, 200950 years4.Mobile multimedia broadcast electronicservice guide system software V1.0Independent research anddevelopment2009SRBJ1365Apr 1, 200950 years5.Mobile video business operation platformsystem V1.0Independent research anddevelopment2007SRBJ1463Jul 23, 200750 years6.Mobile multimedia broadcast emergencybroadcast platform software V1.0Independent research anddevelopment2010SRBJ0720Mar 5, 201050 years7.Mobile multimedia broadcast audio richmedia interactive platform softwareV1.0Independent research anddevelopment2010SRBJ0719Mar 5, 201050 years8.Printer typesetting and printing softwareV1.0Independent research anddevelopment2011SRBJ4190Sep 28, 201150 years9.Electronic newspaper business supportplatform software V1.0Independent research anddevelopment2011SRBJ4186Sep 28, 201150 years10.Public information business platformsoftware V1.0Independent research anddevelopment2011SRBJ3810Sep 27, 201150 years11.User interface scripting software V1.0Independent research anddevelopment2011SRBJ3809Sep 27, 201150 years12.Integrated business management platformsoftware V1.0Independent research anddevelopment2012SR003002Jan 16, 201250 years13.Interactive business development platformsoftwareIndependent research anddevelopment2011SRBJ4593Nov 29, 201150 years14.Instant messaging and messaging systemsoftwareIndependent research anddevelopment2014SR122231Aug 5, 201450 years15.General statistical platform software forclient productsIndependent research anddevelopment2014SR216662Dec 30, 201450 years16.CMMB Data broadcast managementplatform softwareIndependent research anddevelopment2009SRBJ0391Jan 22, 200950 years17.Integrated passenger train service systemIndependent research anddevelopment2012SR083665Sep 5, 201250 years25No.Name of CopyrightAchievement approachRegistration numberTime of obtainExpire time18.JHBY Train inspection managementsystemIndependent research anddevelopment2013SR015105Feb 21, 201350 years19.Integrated information engine platformsoftware V1.0Independent research anddevelopment2014SR040347Nov 30, 200150 years20.Super information engine developmentplatform software V5.0Independent research anddevelopment2014SR036792Mar 5, 200350 years21.Core map super network informationengine platform software V1.0Independent research anddevelopment2014SR036772Sep 15, 200750 years22.Integrated management of the grid gissoftware V1.0Independent research anddevelopment2014SR036808Jun 20, 200850 years23.Core map rural power grid equipment GPSpatrol system software V1.0Independent research anddevelopment2014SR036810Dec 10, 200850 years24.Diagram grid patrol PDA system softwareV1.0Independent research anddevelopment2014SR036778Dec 12, 200850 years25.Core map geographic information enginedesktop platform software V1.0Independent research anddevelopment2014SR036614Jan 15, 200950 years26.Integrated management of the gridgeographic information Web systemsoftware V1.0Independent research anddevelopment2014SR036799Mar 10, 200950 years27.Core map railway power supply equipmentGPS patrol system software V1.0Independent research anddevelopment2014SR036783Mar 25, 201050 years28.Core map network 3 d map server softwareV1.0Independent research anddevelopment2014SR036788Feb 20, 201150 years29.Core map network 3d map clientsoftwareV1.0Independent research anddevelopment2014SR036637Feb 22, 201150 years30.Core map 3d map network publishingplatform software V1.0Independent research anddevelopment2014SR036633Mar 10, 201150 years31.Core map 3d map network release pluginsystem software V1.0Independent research anddevelopment2014SR036622Mar 15, 201150 years32.Core map network 3d map smartphoneplatform software V1.0Independent research anddevelopment2014SR036638Apr 28, 201150 years33.Core map network GIS Shared mobileplatform software V1.0Independent research anddevelopment2014SR036634Oct 31, 201150 years34.Core map network GIS sharing platformsoftware V1.0Independent research anddevelopment2014SR036639Dec 16, 201150 yearsTrademarks:We have registered the following trademarks with the Trademark Office, State Administration for Industry and Commerce in the PRC:NoTrademarkClassification NumberValid PeriodRegistration Number1Y图形382010.04.212020.04.2067460692Y图形412010.09.072020.09.0667460673YRADIO文字352010.07.212020.07.2067334374YRADIO文字382010.04.21.2020.04.2067334385YRADIO文字412010.09.072020.09.0667334396LookLook图形382009.04.072019.04.0646660517LookLook图形422008.12.212018.12.2046660508YTV文字352010.07.212020.07.2067335799YTV文字382010.05.282020.05.27673357810YTV文字412010.09.072020.09.06673358111YTV文字422010.09.072020.09.06673358012YOUTV文字352010.07.212020.07.20673344013YOUTV文字382010.05.282020.05.27673344114xfeng文字352012.03.282022.03.27922914526NoTrademarkClassification NumberValid PeriodRegistration Number15xfeng文字382012.03.282022.03.27922916016xfeng文字412012.03.282022.03.27922919017xfeng文字422012.03.282022.03.27922922118中传视讯文字+图形422008.12.212018.12.20466604719中传视讯文字422008.12.212018.12.20466604820中传视讯文字382008.12.212018.12.20466604921新蜂文字382011.08.212021.08.20853890722新蜂文字422012.01.282022.01.27853907823新蜂.潮文字382011.08.212021.08.20853910424新蜂.潮文字422012.01.282022.01.27853914125新影力412014.08.282024.08.271228864326小人图形352014.08.282024.08.271228798527小人图形382014.08.282024.08.271228858028小人图形412014.08.282024.08.271228862929小人图形422014.08.282024.08.271228843530中传文字382014.08.282024.08.271228826731中传图形382014.08.282024.08.271228828932中童文字412014.08.072024.08.061221408533中童在线文字412014.08.072024.08.061221409234翠鸟文字382014.08.072014.08.061221405835翠鸟文字422014.08.072014.08.061221412536爱翠鸟文字382014.08.072024.08.061221406637爱翠鸟文字412014.08.072024.08.061221409638爱翠鸟文字422014.08.072024.08.061221412639翠鸟图形352014.08.072024.08.061221404040翠鸟图形382014.08.072024.08.061221407441翠鸟图形412014.08.072024.08.061221410042翠鸟图形422014.08.072024.08.061221413143信号小喇叭图形+CMEDIA412015.03.212025.03.201248043944LookLook图形382015.11.142025.11.131153342845LookLook图形422014.06.212024.06.201153372046LookLook文字382014.07.142024.07.131153406747LookLook文字422014.04.142024.04.131153422748L图形352014.02.282024.02.271153500249L图形382014.02.282024.02.271153507350L图形412014.02.282024.02.271153518151L图形422014.02.282024.02.271153526252箩筐图形412016.06.142026.06.131658022853箩筐图形422016.06.142026.06.131658022754箩筐文字422016.09.282026.09.271658024955箩筐文字412016.06.142026.06.131658025056箩筐文字352016.09.212026.09.201658025257箩筐文字92016.06.142026.06.131658025327NoTrademarkClassification NumberValid PeriodRegistration Number58箩筐图形382016.06.142026.06.131658022959箩筐图形352016.06.142026.06.131658023060箩筐图形92016.06.142026.06.131658023161微时光文字422016.09.282026.09.271658024762传游录屏文字92016.06.142026.06.131678214463传游录屏文字352016.06.142026.06.131678214364传游录屏文字382016.06.142026.06.131678214265传游录屏文字412016.06.142026.06.131678214166传游录屏文字422016.06.142026.06.131678214067录游器文字92016.06.142026.06.131678213568录游器文字352016.06.142026.06.131678213669录游器文字382016.06.142026.06.131678213770录游器文字412016.06.142026.06.131678213871录游器文字422016.06.142026.06.131678213972畅联TV文字412016.01.212026.01.201579246773畅联TV文字382016.01.212026.01.201579246874SuperEngine92016.01.212026.01.20812572275SuperEngine422016.01.212026.01.20812572876超擎9/422016.01.212026.01.201647320577SUPERENGINE9/422016.01.212026.01.2016473185*See below for an explanation of each classification number used in the table above.Classification No. 9: data processing apparatus, couplers (data processing equipment), computer software (recorded), monitors (computer programs), smartcards (integrated circuit cards), electrodynamic apparatus for the remote control of signals, alarms, and electric installations for the remote control of industrialoperations.Classification No. 35: auctioneering, sales promotion for others, marketing analysis, marketing research, importexport agencies, advisory services forbusiness management, business management for franchise, personnel management consultancy, relocation services for businesses, and systemization ofinformation into computer databases.Classification No. 38: Include services that enable at least sensory communication between two people. Such services include that allow one person to talkto another, send messages from one person to another, Make verbal or visual contact between one person and the other. This classification especially include theservice for broadcasting radio or television programs. Except for radio advertising services and telemarketing services.Classification No. 41: instruction services, teaching, education information, tuition, arranging and conducting of colloquiums, publication of electronicbooks and journals online, amusements, and vocational guidance.Classification No. 42: technical research, studies (technical project), computer software design, updating of computer software, recovery of computer data,computer systems analysis, installation of computer software, computer antivirus protection, and research and development for others. 28Business Certificates and QualificationsWe have obtained all necessary regulatory certifications to conduct our business in the PRC, including without limitation, the following: SoftwareEnterprise Recognition Certificate, Computer Information System Integration Qualification Certificate, Construction Enterprise Qualification Certificate, and SecurityTechnology & Protection Enterprise Certificate. We have also been properly certified as a hightech enterprise and have met the ISO 9001:2000 qualificationmanagement system.Legal ProceedingsAlthough we may, from time to time, be involved in litigation and claims arising out of our operations in the normal course of business, we do not believethat we are a party to any litigation that will have a material adverse impact on our financial condition or results of operations. To our knowledge, other than asdescribed below there are no material legal proceedings threatened against us. From time to time, we may be subject to various claims and legal actions arising in theordinary course of business. Following the consummation of the AEA, we became successor in interest to the legal proceedings described below.Litigation with Shanghai Fusheng Weier Intelligent Control Technology Co., Ltd.On January 22, 2016, Zhong Chuan Rui You and Shanghai Fusheng Weier Intelligent Control Technology Co., Ltd. (“Fusheng Weier”) signed a contract forequipment of $1,652,842 (RMB10,800,000). Since Zhong Chuan Rui You did not make the payments of $1,126,381 (RMB7,360,000) on the due dates, Fusheng Weierfiled a lawsuit against Zhong Chuan Rui You in Shanghai Xuhui District People's Court on October 8, 2016. On March 9, 2017, Xuhui District People's Court issuedthe verdict requiring Zhong Chuan Rui You to pay the overdue debts. In August 2017, C Media Limited made the payment of $512,075 (RMB3,346,000). Theremaining balance has been accrued in accounts payable. The payment schedule for the remaining balance is being negotiated by the two parties. On February 5,2018, a hearing was held adding Zhong Chuan Shi Xun as a defendant. The Group plans to settle the remaining balance within one year.Lawsuit with Gansu Jinlun Culture Media Co., Ltd.On August 22, 2014, Zhong Chuan Rui You and Gansu Jinlun Culture Media Co., Ltd. (“Gansu Jinlun”) signed a “Lanzhou Railway Bureau AirconditionedTrain WiFi Network System Advertising Operation Rights Agreement” for advertising on 72 trains of $1,467,880 (RMB9,604,633). Due to the dispute on theproject implementation, Zhong Chuan Rui You did not pay the advertising fee. On August 23, 2017, Gansu Jinlun filed a lawsuit with Gansu Intermediate People'sCourt. On December 19, 2017, Gansu Intermediate People's Court issued a verdict, ruling that Zhong Chuan Rui You settle the overdue advertising fee. Since only 18out of 72 trains have been installed with Wifi network system, Zhong Chuan Rui You disputed and appealed to the verdict. The next court trial date has not yet beendetermined.C Media and Gansu Jinlun are negotiating a potential settlement to resume the contract. According to the legal counsel, it is probable that the settlementwill amount to approximately $459,000 (RMB3,000,000); therefore, this amount has been accrued in accounts payable as at December 31, 2017.Litigation with Shenzhen Hua Xun Fang Zhou Technology Co., Ltd.On June 16, 2015, Zhong Chuan Rui You signed a cooperation agreement with Shenzhen Hua Xun Fang Zhou Technology Co., Ltd. (“Shenzhen Hua Xun”)and Xuesong Song, a major shareholder of C Media Limited. Pursuant to this agreement, Zhong Chuan Rui You procures equipment from Shenzhen Hua Xun.Xuesong Song acts as a joint liability guarantor for the entire debts of Zhong Chuan Rui You under this agreement. As Zhong Chuan Rui You did not make thepayments on the due dates, Shenzhen Hua Xun filed a lawsuit with Shenzhen Baoan District People's Court on May 31, 2016. On November 1, 2016, Zhong ChuanRui You, Xuesong Song and Shenzhen Hua Xun reached a settlement in Shenzhen Baoan District People's Court to settle $1,735,389 (RMB11,355,000) in fourinstalments. On December 30, 2017, the debt was assigned to C Media Limited.29C. ORGANIZATIONAL STRUCTUREThe following diagram illustrates our corporate structure and the place of formation and affiliation of each of our subsidiaries and affiliates as of September30, 2018.30The following diagram illustrates our corporate structure and the place of formation and affiliation of each of our subsidiaries and affiliates as of December31, 2017.Contractual Arrangements with Beijing Zhong Chuan Shi Xun Technology Limited’s Subsidiaries and Their Respective ShareholdersTo comply with the PRC legal restrictions on foreign ownership of companies that operate mobile application services, our subsidiaries operate in suchrestricted service areas in the PRC through certain PRC domestic companies, whose equity interests are held by certain management members or founders of the LKTechnology Ltd. Part of the registered capital of these PRC domestic companies was funded by certain management members or founders of LK Technology Ltd. LKTechnology Ltd., through its subsidiary Zhong Chuan Tian Xia Information and Technology (Shenzhen) Limited (the “WFOE”), has entered into an exclusivebusiness cooperation agreement with Beijing Zhong Chuan Shi Xun Technology Limited (“Zhong Chuan Shi Xun” or the “VIE”) the PRC domestic company, whichentitle the WFOE to receive a majority of profit of Zhong Chuan Shi Xun. In addition, Zhong Chuan Tian Xia Information and Technology (Shenzhen) Limited hasentered into certain agreements with those management members or founders, including equity interest pledge agreement of the equity interests held by thosemanagement members or founders and exclusive option agreement to acquire the equity interests in these companies when permitted by the PRC laws, rules andregulations. Details of the typical VIE structure of our significant consolidated VIE, primarily domestic companies associated with the operations such as ZhongChuan Shi Xun and its subsidiaries of Zhong Chuan Rui You, Huoerguosi Luokuang and Jiu Zhou Shi Dai, are set forth below: Exclusive Business Cooperation AgreementThe VIE has entered into an exclusive business services agreement with the WFOE, pursuant to which the WFOE provides exclusive business services tothe VIE. In exchange, the VIE pays a service fee to the WFOE which amounts to be no less than the 80% of the VIE’s aftertax profit, resulting in a transfer ofsubstantially all of the profits from the VIE to the WFOE.Exclusive Option AgreementThe VIE equity holders have granted the WFOE exclusive call options to purchase their equity interest in the VIE at an exercise price equal to the minimumprice as permitted by applicable PRC laws. The WFOE may nominate another entity or individual to purchase the equity interest, if applicable, under the call options.Each call option is exercisable subject to the condition that applicable PRC laws, rules and regulations do not prohibit completion of the transfer of the equityinterest pursuant to the call option. The VIE agrees not to distribute any dividends to the VIE equity holders without the approval of WFOE.31Equity Interest Pledge AgreementPursuant to the equity pledge agreement, the VIE equity holders have pledged all of their interests in the equity of the VIE as a continuing first prioritysecurity interest in favor of the WFOE to secure the performance of obligations by the VIEs and/or the equity holders under the exclusive business cooperationagreement. The WFOE is entitled to exercise its right to dispose of the VIE equity holders’ pledged interests in the equity of the VIE and has priority in receivingpayment by the application of proceeds from the auction or sale of such pledged interests, in the event of any breach or default under the exclusive businesscooperation agreement, if applicable. These equity pledge agreement remain in force until all the obligations under the exclusive business cooperation agreementhave been fulfilled.The exclusive business cooperation agreement and equity interest pledge agreement described above also enable the Company to receive substantially allof the economic benefits from the VIE by typically entitling the WFOE to all dividends and other distributions declared by the VIE and to any distributions orproceeds from the disposal by the VIE equity holders of their equity interests in the VIE.D. PROPERTY AND EQUIPMENTWe lease offices located at Lab 30 & Lab 32, SOHO 3Q, No 9, Guanghua Road, Chaoyang District, Beijing, which covers a floor space of 600 square meters.These leases expire at different times throughout 2018 and are renewable upon negotiation.ITEM 4A. UNRESOLVED STAFF COMMENTSNone.ITEM 5. OPERATING AND FINANCIAL REVIEW AND PROSPECTSA . OPERATING RESULTS.The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our consolidatedfinancial statements and the notes to those financial statements appearing elsewhere in this report. This discussion and analysis contains forwardlookingstatements that involve significant risks and uncertainties. As a result of many factors, such as our anticipated growth strategy, our plans to recruit moreemployees, our plans to invest in research and development to enhance our product or service lines, our future business development, results of operations andfinancial condition, expected changes in our net revenues and certain cost or expense items, our ability to attract and retain customers, trends and competitionin the enterprise mobile software application market, and the factors set forth elsewhere in this report, our actual results may differ materially from thoseanticipated in these forwardlooking statements. In light of those risks and uncertainties, there can be no assurance that the forwardlooking statementscontained in this report will in fact occur. You should not place undue reliance on the forwardlooking statements contained in this report.The forwardlooking statements speak only as of the date on which they are made, and, except to the extent required by U.S. federal securities laws, weundertake no obligation to update any forwardlooking statement to reflect events or circumstances after the date on which the statement is made or to reflectthe occurrence of unanticipated events. Further, the information about our intentions contained in this report is a statement of our intention as of the date of thisreport and is based upon, among other things, the existing regulatory environment, industry conditions, market conditions and prices and our assumptions as ofsuch date. We may change our intentions, at any time and without notice, based upon any changes in such factors, in our assumptions or otherwise.32Unless the context otherwise requires, all references to (i) “PRC” and “China” are to the People’s Republic of China; (ii) “U.S. dollar,” “$” and “US$”are to United States dollars; and (iii) “RMB”, “Yuan” and Renminbi are to the currency of the PRC or China.OverviewLuokung Technology was incorporated on October 27, 2009 under the laws of the British Virgin Islands. We are a holding company and conduct ouroperations through LK Technology Ltd., a British Virgin Islands limited liability company (“LK Technology”) and its whollyowned subsidiaries, MMB Limited andMobile Media (China) Limited and their respective subsidiaries and a contractuallycontrolled entity in the PRC named Beijing Zhong Chuan Shi Xun Technology,which hold the rights to deploy WiFi systems on about 700 trains in China, including 290 trains in which WiFi systems have already been installed and are inoperation. In May 2010, we consummated an initial public offering of our American Depository Shares, or ADSs, for gross proceeds of $16 million, and our ADSswere listed on the NASDAQ Capital Market under the ticker symbol “KONE”. Our ordinary shares are not currently listed on any trading market. Our AmericanDepository Shares (“ADSs”) were voluntarily delisted from the NASDAQ Capital Market on September 19, 2018. We have applied to NASDAQ for the listing of ourordinary shares on the NASDAQ Capital Market and received an approval for listing of Ordinary Shares on August 6, 2018, and as of the date of this transitionreport, that application and approval are currently under review.On August 17, 2018, we consummated an asset exchange transaction, pursuant to which we exchanged all issued and outstanding capital stock in TopskyInfoTech Holdings Pte Ltd., the parent of Softech, for the issued and outstanding capital stock of LK Technology (the “Asset Exchange”). In connection with theAsset Exchange, we changed our name on August 20, 2018, and on September 20, 2018, completed the issuance to the shareholders of C Media Limited, the formerparent of LK Technology, of (i) 185,412,599 of our ordinary shares, par value $0.01 per share and (ii) 1,000,000 of our preferred shares. Upon the consummation of theAsset Exchange, we ceased our previous business operations and became a company focused on the provision of WiFi and mobile application products for longdistance travelers in China.On August 25, 2018, LK Technology entered into a Stock Purchase Agreement (the “Agreement”) with the shareholders (“Shareholders”) of SuperengineHoldings Limited, a limited liability company organized under the laws of the British Virgin Islands (the “Superengine”), pursuant to which LK Technology acquiredall of the issued and outstanding capital stock of Superengine for an aggregate purchase price of US$60 million (the “Purchase Price”), which are paid by theissuance of our Ordinary Shares in an amount equal to the quotient of (x) the Purchase Price divided by (y) the average of the closing prices of the Ordinary Shareson the NASDAQ Capital Market over the 12 months period preceding July 31, 2018. We are a party to the Agreement in connection with the issuance of theOrdinary Shares and certain other limited purposes.Results of operations for the fiscal year ended December 31, 2017 compared to the fiscal year ended December 31, 2016.RevenueWe provide displaybased online advertising services to customers by integrating text description, image and video, and displaying the advertisements in aprominent position of LuoKuang Application. We recognize revenue in accordance with ASC 605, over the contractual term based on the agreements andconfirmation letters signed by both parties, commencing on the date the customer’s advertisement is displayed on our platform.For the year ended December 31, 2017, we had revenue of $26,082,417, as compared to revenue of $5,233,145 for the year ended December 31, 2016, anincrease of $20,849,272, or 398.4%, which was primarily due to the increase of our advertising clients.Cost of revenueOur cost of revenue primarily consists of depreciation, labor cost, WiFi equipment installation fees, data charges, annual payments to local railway bureau,other overhead costs.33Cost of revenue for the year ended December 31, 2017 was $5,547,779, representing a decrease of $767,725 or 12.2% as compared to $6,315,504 for the yearended December 31, 2016. The decrease was primarily attributable to the decrease in labor cost as a result of our cost control and a decrease in the number ofmaintenance staff. Additionally, data charges decreased as train passengers prefer using their mobile data, leading to a decrease in 3G and 4G data.Selling and marketing expenseOur selling and marketing expense mainly include promotional and marketing expenses and compensation for our sales and marketing personnel.Selling expense totaled $23,908,733 for the year ended December 31, 2017, as compared to $6,209,804 for the year ended December 31, 2016, an increase of$17,698,929 or 285.0%. The increase was primarily attributable to the increase in promotional and marketing activities conducted by the Company.General and administrative expenseOur general and administrative expenses consist primarily of salaries and benefits for our general and administrative personnel, rent, fees and expenses forlegal, accounting and other professional servicesGeneral and administrative expense totaled $2,451,249 for the year ended December 31, 2017, as compared to $2,108,854 for the year ended December 31,2016, an increase of $342,395 or 16.2%.Research and development expenses.Research and development expenses primarily consist of salaries and benefits for research and development personnel.Research and development expenses totaled $1,046,198 for the year ended December 31, 2017, as compared to $2,882,202 for the year ended December 31,2016, a decrease of $1,836,004 or 63.7%. The decrease was primarily attributable to the Company reduced its expenses in research and development temporarily asour products are quite stable at present.Loss from operationsAs a result of the factors described above, for the year ended December 31, 2017, loss from operations amounted to $6,871,542, as compared to loss fromoperations of $12,283,219 for the year ended December 31, 2016, a decrease of $5,411,677, or 44.1%.Other income/expenseOther income/expense mainly include interest income from bank deposits, foreign currency transaction gain, and loss from investment.Net lossAs a result of the factors described above, our net loss was $6,810,454 for the year ended December 31, 2017, compared to net loss of $13,049,031 for theyear ended December 31, 2016, a decrease of $6,238,577 or 47.8%.Foreign currency translation adjustmentOur reporting currency is the U.S. dollar. The functional currency of our parent company and subsidiaries of Merchant Supreme and Prime Cheer is the U.S.dollar and the functional currency of the Company’s subsidiaries incorporated in China is the Chinese Renminbi (“RMB”). The financial statements of oursubsidiaries incorporated in China are translated to U.S. dollars using period end rates of exchange for assets and liabilities, and average rates of exchange (for theperiod) for revenue, costs, and expenses. Net gains and losses resulting from foreign exchange transactions are included in the consolidated statements ofoperations and comprehensive loss. As a result of foreign currency translations, which are a noncash adjustment, we reported a foreign currency translation gain of$90,671 for the year ended December 31, 2017, as compared to a foreign currency translation loss of $387,375 for the year ended December 31, 2016. This noncashgain had the effect of increasing/decreasing our reported comprehensive income/loss.34Comprehensive lossAs a result of our foreign currency translation adjustment, we had comprehensive loss for the year ended December 31, 2017 of $6,719,783, compared tocomprehensive loss of $12,661,656 for the year ended December 31, 2016.B. LIQUIDITY AND CAPITAL RESOURCESThe information contained in “Item 5. Operating and Financial Review and Prospects – A. Operating Results – Liquidity and Capital Resources” isincorporated herein by reference.C. RESEARCH AND DEVELOPMENT, PATENTS AND LICENSES, ETC.The discussions of our research and development activities were contained in “Item 4. Information about our Company – B. Business Overview –Research and Development” and “Item 5. Operating and Financial Review and Prospects – A. Operating Results – Operating Expenses – Research and DevelopmentExpenses” are incorporated herein by reference. In the years ended December 31, 2017 and 2016, we spent $1,046,198 and $2,882,202, respectively, on research anddevelopment activities.D. TREND INFORMATION.Industry and Market OutlookChina has awarded licenses to mobile phone companies to provide the superfast 4G network to customers. The licenses, which are designed to give mobilephone users faster access to services, were granted by the government to China Mobile, China Unicom Hong Kong and China Telecom. Since the grants, ChinaMobile has offered 4G to subscribers from December 18, 2013. China Unicom and China Telecom, the country's other two major carriers, also offer 4G wireless. Thenumber of China Mobile 4G customers has exceeded 900 million by the end of October in 2017. The move greatly bolstered business for telecom equipment makersand a range of other companies.Under China’s 12th FiveYear Plan, a key priority is for China to transition from “Made in China” to “Designed in China.” In order to achieve this goal, thegovernment plans to heavily invest in science and technology education and R&D so as to further develop China’s intellectual property rights system and support“NextGeneration IT” as a Strategic Emerging Industry (SEI). Additionally, China plans to upgrade the technological capabilities of private and public services,including “triple play” services (the convergence of telecom, broadcasting and Internet networks), ecommerce, and egovernment and statistics systems.Furthermore, the government plans to invest in R&D of the "Internet of things" and cloud computing, and develop digital and virtual technologies.E. OFFBALANCE SHEET ARRANGEMENTSWe have not entered into any financial guarantees or other commitments to guarantee the payment obligations of any third parties. We have not enteredinto any derivative contracts that are indexed to our shares and classified as shareholder’s equity, or that are not reflected in our consolidated financial statements.Furthermore, except for the mortgage referenced above, we do not have any retained or contingent interest in assets transferred to an unconsolidated entity thatserves as credit, liquidity or market risk support to such entity. We do not have any variable interest in any unconsolidated entity that provides financing, liquidity,market risk or credit support to us or engages in leasing, hedging or research and development services with us.35F. TABULAR DISCLOSURE OF CONTRACTUAL OBLIGATIONSAs of December 31, 2017, we did not have any contractual obligations required to be disclosed in this Item 5.F. ITEM 6. DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES.A. DIRECTORS AND SENIOR MANAGEMENT.Executive Officers and DirectorsThe following table sets forth the names and ages as of the date of this transition report of each of our executive officers and directors:NameAgePositionXuesong Song50Chief Executive Officer, Chairman and DirectorDongpu Zhang50PresidentJie Yu34Chief Financial OfficerKegang Peng46Vice President and DirectorChuang Tao51DirectorDennis Galgano (1)(2)69Director (Independent)Jin Shi (1)(2)49Director (Independent)Jiming Ha (1)(3)56Director (Independent)Zhihao Xu (3)42Director (Independent)(1)Member of the Audit Committee.(2)Member of the Compensation Committee.(3)Member of the Nominating and Corporate Governance Committee.Set forth below is biographical information concerning our executive officers and directors.Xuesong Song is a cofounder of C Media Limited and served as its chairman of the board of directors and chief executive officer from 2012 until theconsummation of the AEA. From February 2014 through April 2017, Mr. Song served as a director of Seven Stars Cloud Group, Inc. (NASDAQ: SSC) and fromJanuary 2013 through February 2015, Mr. Song served as a director of Pingtan Marine Enterprise Ltd. (NASDAQ: PME). From May 2006 through January 2009, Mr.Song served as the Chairman of the Board of ChinaGrowth North Acquisition Corporation, a special purpose acquisition company, which acquired UIB GroupLimited in January 2009, in which he remains a director. Mr. Song has been a principal of Chum Capital Group Limited since August 2001, a merchant banking firmthat invests in growth Chinese companies and advises them in financings, mergers & acquisitions and restructurings, and chief executive officer of Beijing ChumInvestment Co., Ltd. since December 2001. Mr. Song has been a director of Mobile Vision Communication Ltd. since July 2004. Mr. Song received a Master’s ofBusiness Administration degree from Oklahoma City/Tianjin Program.Dongpu Zhang was appointed as the President of the Company effective on August 25, 2018. Mr. Dongpu Zhang has served as the General Manager ofSuperEngine Graphics Software Technology Development (Suzhou) Co., Ltd. (“SuperEngine Suzou”) and the Chief Executive Officer of SuperEngine HoldingLimited since September 2016. From February, 2014 to August, 2016, Mr. Zhang served as vice president of Industrial Development Group under China Fortune LandDevelopment Co., Ltd. From March, 2009 to February, 2014, Mr. Zhang served as the vice president of Aerospace Science and Technology Holding Group Co., Ltd.Mr. Zhang receive his Master Degree of Computer Science from Harbin Institute of Technology in 1994 and his Bachelor Degree of information system fromChangsha Institute of technology in 1991.Jie Yu served as the chief financial officer of C Media Limited from January 2018 until the consummation of the asset exchange transactions. From June 2016to January 2018, Mr. Yu served as chief financial officer and secretary of the board of directors of MTI Environment Group Limited. Prior to joining MTI, Mr. Yuserved as the senior manager at DA HUA CPA from November 2012 to May 2016. Previously, Mr. Yu served as the manager at Crowe Horwath (Hong Kong) CPA.Mr. Yu holds a bachelor degree in accounting and finance from University of Auckland and postgraduate diploma in accounting from University of Auckland.36Kegang Peng served as the Vice Chairman of the board of directors C Media Limited from October 2014 to the consummation of the asset exchangetransactions, and is now a member of the Company’s board of directors. Previously, from 2012 to 2014, Mr. Peng was chairman of the board and founder of JiangsuSuqian Jinghaiboyuan Information and Technology Co., Ltd. Mr. Peng studied at Beijing University of Aeronautics and Astronautics majoring computer andapplication.20F 1 f20f2017_luokungtech.htm AMENDMENT NO. 1 TO FORM 20FUNITED STATESSECURITIES AND EXCHANGE COMMISSIONWASHINGTON, D.C. 20549FORM 20F☐ REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934OR☐ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934For the Fiscal year ended _____________OR☒ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934For the transition period from October 1, 2017 to December 31, 2017☐ SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934Date of event requiring this shell company report Commission file number: 00134738Luokung Technology Corp.(Exact name of Registrant as specified in its charter)Not applicable(Translation of Registrant’s name into English)British Virgin IslandsLAB 32, SOHO 3Q, No 9, Guanghua Road, Chaoyang District, BeijingPeople’s Republic of China, 100020(Jurisdiction of incorporation or organization)(Address of principal executive offices)Mr. Muqiao GengLAB32, SOHO 3Q, No 9, Guanghua Road, Chaoyang District, BeijingPeople’s Republic of China 100020Tel: (86) 1085866721(Name, telephone, Email and/or facsimile number and address of company contact person)Securities registered or to be registered pursuant to Section 12(b) of the Act:Title of each className of each exchange on which registeredOrdinary shares, par value $0.01 per shareNonePreferred shares, par value $0.01 per shareNoneSecurities registered or to be registered pursuant to Section 12(g) of the Act:none(Title of Class)Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act:none(Title of Class)Indicate the number of outstanding shares of each of the issuer’s classes of capital or common stock as of the close of the period covered by the transitionreport. 187,097,599 Ordinary Shares, including 186,383,224 Ordinary Shares represented by 714,375 American Depositary Shares, and 1,000,000 Preferred Sharesoutstanding as of September 20, 2018.Indicate by check mark if the registrant is a wellknown seasoned issuer, as defined in Rule 405 of the Securities Act. ☐ Yes ☒ NoIf this report is an annual or transition report, indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of theSecurities Exchange Act of 1934. ☐ Yes ☒ NoIndicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirementsfor the past 90 days. ☒ Yes ☐ NoIndicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File requiredto be submitted and posted pursuant to Rule 405 of Regulation ST (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that theregistrant was required to submit and post such files). ☒ Yes ☐ NoIndicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a nonaccelerated filer. See definition of “accelerated filer andlarge accelerated filer” in Rule 12b2 of the Exchange Act. (Check one):Large accelerated filer ☐ Accelerated filer ☐ Nonaccelerated filer ☒Indicate by check mark which basis of accounting the registrant has used to prepare the financial statements included in this filing.U.S. GAAP ☒International Financial Reporting Standards as issuedby the International Accounting Standards Board ☐Other ☐If “Other” has been checked in response to the previous question, indicate by check mark which financial statement item the registrant has elected tofollow. Item 17 ☐ Item 18 ☐If this is an transition report, indicate by check mark whether the registrant is a shell company (as defined in Rule 12b2 of the ExchangeAct). ☐ Yes ☒ NoExplanatory NoteLuokung Technology Corp. (the “Company”) is filing this transition report on Form 20F (“Transition Report”) in connection with the completion of theexchange of certain of its assets for substantially all of the assets of C Media Limited (“C Media”) pursuant to that Asset Exchange Agreement, dated January 25,2018 (the “Original AEA”), as supplemented by the Addendum to Asset Exchange Agreement, dated October 3, 2018 (the “Addendum” and together with theOriginal AEA, the “AEA”). Following the consummation of the AEA, on October 4, 2018, the Company changed its fiscal year end from September 30 to the fiscalyear end used by C Media, December 31. This Transition Report covers the threemonth period from Octorber 1, 2017 to December 31, 2017, and the fiscal yearsdescribed herein.In this transition report:●References to the “Company”, “we”, “our” and “us” are to Luokung Technology Corp. and its consolidated subsidiaries and variable interestentity, except as the context otherwise requires;●This transition report on Form 20F covers the threemonth period from October 1, 2017 through December 31, 2017 (the “Transition Period”) andreflects our financial results thereof. Prior to this transition report on Form 20F, our two most recent annual reports on Form 20F cover the fiscalyears ended September 30, 2017 and September 30, 2016, respectively, and reflect financial results for the respective twelvemonth periods fromOctober 1 to September 30. Unless otherwise noted, all references to years are to the calendar year from January 1 to December 31 and referencesto our fiscal year or years are to the fiscal year or years which, prior to the Transition Period, ended September 30, while from and after theTransition Period, ended December 31;●References to an “ADS” are to an American Depositary Share, each of which represents one of our Ordinary Shares with a par value of $.01 pershare.Special Note Regarding Forwardlooking StatementsThis transition report contains forwardlooking statements that involve risks and uncertainties. These statements involve known and unknown risks,uncertainties and other factors that may cause our actual results, performance or achievements to be materially different from those expressed or implied by theforwardlooking statements.You can identify these forwardlooking statements by words or phrases such as “may,” “will,” “expect,” “anticipate,” “aim,” “estimate,” “intend,” “plan,”“believe,” “likely to” or other similar expressions. We have based these forwardlooking statements largely on our current expectations and projections about futureevents and financial trends that we believe may affect our financial condition, results of operations, business strategy and financial needs. You should not placeundue reliance on these forwardlooking statements, which apply only as of the date of this transition report. These forwardlooking statements include:●our future business development, results of operations and financial condition;●expected changes in our net revenues and certain cost or expense items;●our ability to attract and retain customers; and●trends and competition in the enterprise mobile software application market.You should read this transition report thoroughly with the understanding that our actual future results may be materially different from, and/or worse, thanwhat we expect. We qualify all of our forwardlooking statements by these cautionary statements. Other sections of this transition report include additional factorswhich could adversely impact our business and financial performance. Moreover, we operate in an evolving environment. New risk factors and uncertainties emergefrom time to time and it is not possible for our management to predict all risk factors and uncertainties, nor can we assess the impact of all factors on our business orthe extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forwardlooking statements.This transition report also contains estimates, projections and statistical data related to the market for the provision of WiFi and mobile applications inChina. This market data, including data from IDC, a leading provider of market data and intelligence, speaks as of the date it was published and includes projectionsthat are based on a number of assumptions and are not representations of fact. The market for the provision of WiFi and mobile applications in China may not growat the rates projected by the market data, or at all. The failure of the market to grow at the projected rates may materially and adversely affect our business and themarket price of our ADSs. In addition, the rapidly changing nature of the market for the provision of WiFi and mobile applications subjects any projections orestimates relating to the growth prospects or future condition of our market to significant uncertainties. If any one or more of the assumptions underlying the marketdata proves to be incorrect, actual results may differ from the projections based on these assumptions.You should not rely upon forwardlooking statements as predictions of future events. We undertake no obligation to update or revise any forwardlookingstatements, whether as a result of new information, future events or otherwise.TABLE OF CONTENTSPart IItem 1.Identity of Directors, Senior Management and Advisers.1Item 2.Offer Statistics and Expected Timetable.1Item 3.Key Information.1A.Selected Financial Data.1B.Capitalization and Indebtedness.3C.Reasons for the Offer and Use of Proceeds.3D.Risk Factors.3Item 4.Information on the Company.19A.History and Development of the Company.19B.Business Overview.20C.Organizational Structure.30D.Property, Plants and Equipment.32Item 4A.Unresolved Staff Comments.32Item 5.Operating and Financial Review and Prospects.32A.Operating Results.32B.Liquidity and Capital Resources.35C.Research and Development, Patents and Licenses, etc.35D.Trend Information.35E.Offbalance Sheet Arrangements.35F.Tabular Disclosure of Contractual Obligations.36Item 6.Directors, Senior Management and Employees.36A.Directors and Senior Management.36B.Compensation.37C.Board Practices.40D.Employees.43E.Share Ownership.43Item 7.Major Shareholders and Related Party Transactions.44A.Major Shareholders.44B.Related Party Transactions.45C.Interests of Experts and Counsel.45Item 8.Financial Information.45A.Consolidated Statements and Other Financial Information.45B.Significant Changes.46Item 9.The Offer and Listing.46A.Offer and Listing Details.46B.Plan of Distribution.47C.Markets.47D.Selling shareholders.48E.Dilution.48F.Expenses of the issue.48Item 10.Additional Information.48A.Share Capital.48B.Memorandum and Articles of Association.48C.Material Contracts.53D.Exchange Controls.54E.Taxation.61F.Dividends and Paying Agents.67G.Statement by Experts.67H.Documents on Display.67I.Subsidiary Information.68Item 11.Quantitative and Qualitative Disclosures about Market Risk.68Item 12.Description of Securities Other than Equity Securities.69A.Debt Securities.69B.Warrants and Rights.69C.Other Securities.69D.American Depositary Shares.69iPart IIItem 13.Defaults, Dividend Arrearages and Delinquencies.71Item 14.Material Modifications to the Rights of Security Holders and Use of Proceeds.71Item 15.Controls and Procedures.71Item 16.[Reserved.]72Item 16A.Audit Committee Financial Expert.72Item 16B.Code of Ethics.73Item 16C.Principal Accountant Fees and Services.73Item 16D.Exemptions from the Listing Standards for Audit Committees.73Item 16E.Purchases of Equity Securities by the Issuer and Affiliated Purchasers.73Item 16F.Change in Registrant’s Certifying Accountant.73Item 16G.Corporate Governance.73Item 16H.Mine Safety Disclosure.73Part IIIItem 17.Financial Statements.74Item 18.Financial Statements.74Item 19.Exhibits.74Index to Consolidated Financial StatementsF1iiPART IITEM 1. IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS.The directors of Luokung Technology Corp. are Xuesong Song, Kegang Peng, Dennis Galgano, Jin Shi, Jiming Ha, Zhihao Xu and Chuang Tao. Thebusiness address for our directors is LAB 32, SOHO 3Q, No 9, Guanghua Road, Chaoyang District, Beijing, People’s Republic of China.Moore Stephens CPA Limited has served as our auditor since October 5, 2018, and is located at 801806 Silvercord Tower 1, 30 Canton road, Tsimshatsui,Kowloon, Hong Kong. BDO China Shun Lun Pan Certified Public Accountants LLP served as our auditors for the last three years, and are located at 4F, No. 61Nanjing Road, Shanghai, People’s Republic of China.Garvey Schubert Barer, P.C., serves as our legal counsel in the United States, and is located at Flour Mill Building, 1000 Potomac Street NW, Suite 200,Washington, D.C., 200073501.Conyers Dill & Pearlman serves as our legal counsel with regard to the laws of the British Virgin Islands, and is located at 29th Floor, One Exchange Square,8 Connaught Place, Central, Hong Kong.ITEM 2. OFFER STATISTICS AND EXPECTED TIMETABLE.Not applicable.ITEM 3. KEY INFORMATION.A. SELECTED FINANCIAL DATA.Luokung Technology Corp. and its consolidated subsidiaries (“Luokung Technology”, “we”, “us”, or “the Company”) consummated an asset exchangeagreement pursuant to which we exchanged our existing assets with those of C Media Limited (the “Asset Exchange”) on August 17, 2018, and we changed ourname from Kingtone Wirelessinfo Solution Holding Ltd. to our current name on August 20, 2018. On October 4, 2018, in connection with the consummation of the Asset Exchange, we changed our fiscal year end from September 30 to December 31.1The selected financial data for the fiscal years ended December 31 2017 and 2016 have been derived from our audited consolidated and combined financialstatements. The selected consolidated and combined financial data should be read in conjunction with our audited financial statements and the accompanying notesand “Item 5 – Operating and Financial Review and Prospects.” Our consolidated and combined financial statements are prepared and presented in accordance withUnited States generally accepted accounting principles, or U.S. GAAP. Our historical results do not necessarily indicate our results expected for any future periods.You should not view our historical results as an indicator of our future performance.LK TECHNOLOGY LTD. AND SUBSIDIARIESSELECTED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS(IN U.S. DOLLARS)For the years ended December 31,20172016Revenues$26,082,417$5,233,145Less: Cost of revenues5,547,7796,315,504Less: Operating expenses:Selling and marketing23,908,7336,209,804General and administrative2,451,2492,108,854Research and development1,046,1982,882,202Total operating expenses27,406,18011,200,860Loss from operations(6,871,542)(12,283,219)Other income (expense):Interest expense(26,611)(4,412)Foreign exchange gains(losses)350,679(298,257)Loss from investment(428,571)Other income (expense), net(262,980)(34,572)Total other income (expense), net61,088(765,812)Loss before income taxes(6,810,454)(13,049,031)Income taxesNet loss$(6,810,454)$(13,049,031)Other comprehensive income:Foreign currency translation adjustment90,671387,375Total comprehensive loss$(6,719,783)$(12,661,656)2LK TECHNOLOGY LTD. AND SUBSIDIARIESSELECTED CONSOLIDATED BALANCE SHEETS(IN U.S. DOLLARS)As of December 31,20172016Accounts receivable, net of allowance for doubtful accounts9,729,6251,865,836Amounts due from related parties11,760,692Property and equipment, net5,044,8727,771,027Goodwill7,239,9367,239,936TOTAL ASSETS37,582,85821,114,832Accounts payable8,784,5186,446,584Accrued liabilities and other payables12,962,91211,329,613Total liabilities25,311,11333,905,520Total Shareholder’s Equity (Deficit)12,271,745(12,790,688)TOTAL LIABILITIES AND SHAREHOLDER’S EQUITY (DEFICIT)37,582,85821,114,832B. CAPITALIZATION AND INDEBTEDNESS.Not applicable.C. REASONS FOR THE OFFER AND USE OF PROCEEDS.Not applicable.D. RISK FACTORS.An investment in our ADSs and ordinary shares involves a high degree of risk. You should carefully consider the risks and uncertainties described belowtogether with all other information contained in this transition report, including the matters discussed under “Special Note Regarding ForwardLooking Statements,”before you decide to invest in our ADSs or ordinary shares. You should pay particular attention to the fact that we are a holding company with substantialoperations in China and are subject to legal and regulatory environments that in many respects differ from those of the United States. If any of the following risks, orany other risks and uncertainties that are not presently foreseeable to us, actually occur, our business, financial condition, results of operations, liquidity and ourfuture growth prospects would be materially and adversely affected. You should also consider all other information contained in this transition report beforedeciding to invest in our ADSs or ordinary shares.Risks Related to Our Company and Our IndustryThe Company had incurred negative cash flows from operating activities and net losses as of December 31, 2017. These matters raise substantial doubt aboutthe Company’s ability to continue as a going concern.The Company’s consolidated financial statements are prepared using generally accepted accounting principles in the United States of America applicableto a going concern, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. As of and for the year endedDecember 31, 2017, the Company had incurred significant operating losses and working capital deficit. The ability of the Company to continue as a going concern isdependent on the Company obtaining adequate capital to fund operating losses until it becomes profitable. If the Company is unable to obtain adequate capital, itcould be forced to cease operations. The accompanying consolidated financial statements do not include any adjustments that might be necessary if the Companyis unable to continue as a going concern.3We may undertake acquisitions, investments, joint ventures or other strategic alliances, which could have a material adverse effect on our ability to manageour business. In addition, such undertakings may not be successful.Our strategy includes plans to grow both organically and through acquisitions, participation in joint ventures or other strategic alliances. Joint venturesand strategic alliances may expose us to new operational, regulatory and market risks, as well as risks associated with additional capital requirements. We may not beable, however, to identify suitable future acquisition candidates or alliance partners. Even if we identify suitable candidates or partners, we may be unable tocomplete an acquisition or alliance on terms commercially acceptable to us. If we fail to identify appropriate candidates or partners, or complete desired acquisitions,we may not be able to implement our strategies effectively or efficiently. In addition, our ability to successfully integrate acquired companies and their operations may be adversely affected by several factors. These factorsinclude:1.diversion of management’s attention;2.difficulties in retaining customers of the acquired companies;3.difficulties in retaining personnel of the acquired companies;4.entry into unfamiliar markets;5.unanticipated problems or legal liabilities; and6.tax and accounting issues.If we fail to integrate acquired companies efficiently, our earnings, revenue growth and business could be negatively affected.Due to intense competition for highlyskilled personnel, we may fail to attract and retain enough sufficiently trained employees to support our operations; ourability to bid for and obtain new projects may be negatively affected and our revenues could decline as a result.The IT industry relies on skilled employees, and our success depends to a significant extent on our ability to attract, hire, train and retain qualifiedemployees. There is significant competition in China for professionals with the skills necessary to develop the products and perform the services we offer to ourcustomers. Increased competition for these professionals, in the mobile application design area or otherwise, could have an adverse effect on us if we experiencesignificant increase in the attrition rate among employees with specialized skills, which could decrease our operating efficiency and productivity and could lead to adecline in demand for our services.In addition, our ability to serve existing customers and business partners and obtain new business will depend, in large part, on our ability to attract, trainand retain skilled personnel that enable us to keep pace with growing demands for wifi connectivity and mobile applications, evolving industry standards andchanging customer preferences. Our failure to attract, train and retain personnel with the qualifications necessary to fulfill the needs of our existing and futurecustomers or to assimilate new employees successfully could have a material adverse effect on our business, financial condition and results of operations. Ourfailure to retain our key personnel on business development or find suitable replacements of the key personnel upon their departure may lead to shrinking newimplementation projects, which could materially adversely affect our business.4Our business depends substantially on the continuing efforts of our senior executives and other key personnel, and our business may be severely disrupted if welose their services.Our future success heavily depends upon the continued services of our senior executives and other key employees, particularly since we recentlyappointed a new chairman. We are reliant on the services of Mr. Xuesong Song, our chairman, chief executive officer and member of our board of directors. If one ormore of our senior executives or key employees is unable or unwilling to continue in his or her present position, we may not be able to replace such employee easily,or at all, we may incur additional expenses to recruit, train and retain replacement personnel, our business may be severely disrupted, and our financial condition andresults of operations may be materially adversely affected.Our business could suffer if our executives and directors compete against us and our noncompetition agreements with them cannot be enforced.If any of our senior executives or key employees joins a competitor or forms a competing company, we may lose customers, knowhow and keyprofessionals and staff members to them. Also, if any of our business development managers who keep a close relationship with our customers and businesspartners joins a competitor or forms a competing company, we may lose customers, and our revenues may be materially adversely affected. Most of our executiveshave entered, or will soon enter, into employment agreements with us that contain or will contain noncompetition provisions. However, if any dispute arisesbetween our executive officers and us, such noncompetition provisions may not be enforceable, especially in China, where all of these executive officers and keyemployees reside, in light of the uncertainties with China’s legal system. See “Risk Factors — Risks Related to Doing Business in China — Uncertainties withrespect to the PRC legal system could adversely affect us.”Our computer networks may be vulnerable to security risks that could disrupt our services and adversely affect our results of operations.Our computer networks may be vulnerable to unauthorized access, computer hackers, computer viruses and other security problems caused byunauthorized access to, or improper use of, systems by third parties or employees. A hacker who circumvents security measures could misappropriate proprietaryinformation or cause interruptions or malfunctions in operations. Computer attacks or disruptions may jeopardize the security of information stored in andtransmitted through computer systems and mobile devices of our customers. Actual or perceived concerns that our systems may be vulnerable to such attacks ordisruptions may deter customers from using our services. As a result, we may be required to expend significant resources to protect against the threat of thesesecurity breaches or to alleviate problems caused by these breaches, which could adversely affect our results of operations.If we do not continually enhance our solutions and service offerings, we may have difficulty in retaining existing customers and attracting new customers.We believe that our future success will depend, to a significant extent, upon our ability to enhance our existing applications and platform, and to introducenew features to meet the preferences and requirements of our customers in a rapidly developing and evolving market. Unexpected technical, operational, distributionor other problems could delay or prevent the introduction of one or more of these products or services, or any products or services that we may plan to introduce inthe future. Our present or future products may not satisfy the evolving preferences and tastes of our customers, and these solutions and services may not achieveanticipated market acceptance or generate incremental revenue. If we are unable to anticipate or respond adequately to the need for service or productenhancements due to resource, technological or other constraints, our business, financial condition and results of operations could be materially and adverselyaffected.5If we are unable to develop competitive new products and service offerings our future results of operations could be adversely affected.Our future revenue stream depends to a large degree on our ability to utilize our technology in a way that will allow us to offer new types of mobileapplications and services to a broader customer base. We will be required to make investments in research and development in order to continually develop newsoftware applications and related service offerings, enhance our existing platform, mobile applications and related service offerings and achieve market acceptanceof our mobile applications and service offerings. We may incur problems in the future in innovating and introducing new mobile applications and service offerings.Our developmentstage mobile applications may not be successfully completed or, if developed, may not achieve significant customer acceptance. If we are unableto successfully define, develop and introduce competitive new mobile applications, and enhance existing mobile applications, our future results of operations wouldbe adversely affected. The timely availability of new applications and their acceptance by customers are important to our future success. A delay in the developmentof new applications could have a significant impact on its results of operations.Changes in technology could adversely affect our business by increasing our costs, reducing our profit margins and causing a decline in our competitiveness.China’s wireless telecom industry, in which we operate, is characterized by rapidly changing technology, evolving industry standards, frequentintroductions of new services and solutions and enhancements as well as changing customer demands. New solutions and new technologies often render existingsolutions and services obsolete, excessively costly or otherwise unmarketable. As a result, our success depends on our ability to adapt to the latest technologicalprogress, such as the 5G standard and technologies, and to develop or acquire and integrate new technologies into our platform, mobile applications and relatedservices. Advances in technology also require us to commit substantial resources to developing or acquiring and then deploying new technologies for use in ouroperations. We must continuously train personnel in new technologies and in how to integrate existing hardware and software systems with these newtechnologies. We may not be able to adapt quickly to new technologies or commit sufficient resources to compete successfully against existing or new competitorsin bringing to market solutions and services that incorporate these new technologies. We may incur problems in the future in innovating and introducing new mobileapplications and service offerings. Our development of new mobile applications and platform enhancements may not be successfully completed or, if developed,may not achieve significant customer acceptance. If we fail to adapt to changes in technologies and compete successfully against established or new competitors,our business, financial condition and results of operations could be adversely affected.Problems with the quality or performance of our hardware, software or other systems may cause delays in the introduction of new solutions or result in the lossof customers and revenues, which could have a material and adverse effect on our business, financial condition and results of operations.Our hardware and software systems are complex and may contain defects, errors or bugs when first introduced to the market or to a particular customer, oras new versions are released. Because we cannot test for all possible scenarios, our systems may contain errors that are not discovered until after they have beeninstalled or implemented, and we may not be able to timely correct these problems. These defects, errors or bugs could interrupt or delay the completion of projectsor sales to our customers. In addition, our reputation may be damaged and we may fail to acquire new projects from existing customers or new customers. Errors mayoccur when we provide systems integration and maintenance services. Even in cases where we have agreements with our customers that contain provisionsdesigned to limit our exposure to potential claims and liabilities arising from customer problems, these provisions may not effectively protect us against such claimsin all cases and in all jurisdictions. In addition, as a result of business and other considerations, we may undertake to compensate our customers for damages arisingfrom the use of our solutions, even if our liability is limited by these provisions. Moreover, claims and liabilities arising from customer problems could also result inadverse publicity and materially and adversely affect our business, results of operations and financial condition. We currently do not carry any product or serviceliability insurance and any imposition of liability on us may materially and adversely affect our business and increase our costs, resulting in reduced revenues andprofitability.Our products may contain undetected software defects, which could negatively affect our revenues.Our software products are complex and may contain undetected defects. Although we test our products, it is possible that errors may be found or occur inour new or existing products after we have commenced commercial shipment of those products. Defects, whether actual or perceived, could result in adversepublicity, loss of revenues, product returns, a delay in market acceptance of our products, loss of competitive position or claims against us by customers. Any suchproblems could be costly to remedy and could cause interruptions, delays, or cessation of our product sales, which could cause us to lose existing or prospectivecustomers and could negatively affect our results of operations.6We may be subject to infringement, misappropriation and indemnity claims in the future, which may cause us to incur significant expenses, pay substantialdamages and be prevented from providing our services or technologies.Our success depends, in part, on our ability to carry out our business without infringing the intellectual property rights of third parties. Patent andcopyright law covering softwarerelated technologies is evolving rapidly and is subject to a great deal of uncertainty. Our selfdeveloped or licensed technologies,processes or methods may be covered by thirdparty patents or copyrights, either now existing or to be issued in the future. Any potential litigation may cause us toincur significant expenses. Thirdparty claims, if successfully asserted against us may cause us to pay substantial damages, seek licenses from third parties, payongoing royalties, redesign our services or technologies, or prevent us from providing services or technologies subject to these claims. Even if we were to prevail,any litigation would likely be costly and timeconsuming and divert the attention of our management and key personnel from our business operations.Our failure to protect our intellectual property rights may undermine our competitive position, and subject us to costly litigation to protect our intellectualproperty rights.Any misappropriation of our technology or the development of competitive technology could seriously harm our business. We regard a substantial portionof our hardware and software systems as proprietary and rely on statutory copyright, trademark, patent, trade secret laws, customer license agreements, employeeand thirdparty nondisclosure agreements and other methods to protect our proprietary rights. Nevertheless, these resources afford only limited protection and theactions we take to protect our intellectual property rights may not be adequate. In particular, third parties may infringe or misappropriate our proprietarytechnologies or other intellectual property rights, which could have a material adverse effect on our business, financial condition and results of operations. Inaddition, intellectual property rights and confidentiality protection in China may not be as effective as in the United States, and policing unauthorized use ofproprietary technology can be difficult and expensive. Further, litigation may be necessary to enforce our intellectual property rights, protect our trade secrets ordetermine the validity and scope of the proprietary rights of others. The outcome of any such litigation may not be in our favor. Any such litigation may be costlyand may divert management attention, as well as our other resources, away from our business. An adverse determination in any such litigation will impair ourintellectual property rights and may harm our business, prospects and reputation. In addition, we have no insurance coverage against litigation costs and wouldhave to bear all litigation costs in excess of the amount recoverable from other parties. The occurrence of any of the foregoing could have a material adverse effecton our business, financial condition and results of operations. Our solutions incorporate a portion of, and work in conjunction with, thirdparty hardware and software solutions. If these thirdparty hardware or softwaresolutions are not available to us at reasonable costs, or at all, our results of operations could be adversely impacted.Although our hardware and software systems and mobile applications primarily rely on our own core technologies, some elements of our systemsincorporate a small portion of thirdparty hardware and software solutions. If any third party were to discontinue making their intellectual property available to us orour customers on a timely basis, or increase materially the cost of their licensing such intellectual property, or if our systems or applications failed to properlyfunction or interoperate with replacement intellectual property, we may need to incur costs in finding replacement thirdparty solutions and/or redesigning oursystems or applications to replace or function with or on replacement thirdparty proprietary technology. Replacement technology may not be available on termsacceptable to us or at all, and we may be unable to develop alternative solutions or redesign our systems or applications on a timely basis or at a reasonable cost. Ifany of these were to occur, our results of operations could be adversely impacted.7Our ability to sell our products is highly dependent on the quality of our service and support offerings, and our failure to offer high quality service could have amaterial adverse effect on our ability to market and sell our products.Our customers depend upon our customer service and support staff to resolve issues relating to our products. Highquality support services are critical forthe successful marketing and sale of our products. If we fail to provide highquality support on an ongoing basis, our customers may react negatively and we maybe materially and adversely affected in our ability to sell additional products to these customers. This could also damage our reputation and prospects with potentialcustomers. Our failure to maintain highquality support services could have a material and adverse effect on our business, results of operations and financialcondition.Weaknesses in our internal controls over financial reporting or disclosure controls and procedures may have a material adverse effect on our business, theprice of our ordinary shares, operating results and financial condition.We are required to establish and maintain appropriate internal controls over financial reporting and disclosure controls and procedures. Pursuant to Section404 of the SarbanesOxley Act of 2002 and the related rules adopted by the Securities and Exchange Commission, every public company is required to include amanagement report on its internal controls over financial reporting in its transition report, which contains management’s assessment of the effectiveness of thecompany’s internal controls over financial reporting. This requirement first applied to our annual report on Form 20F for the fiscal year ended on September 30,2011. In connection with our assessments of our disclosure controls and procedures and internal controls over financial reporting, management concluded that as ofSeptember 30, 2018, our disclosure controls and procedures and our internal controls over financial reporting were not effective due to lack of U.S. generallyaccepted accounting principles (“U.S. GAAP”) expertise in our current accounting team. Please refer to the discussion under Item 15, “Controls and Procedures” forfurther discussion of our material weakness as of December 31, 2017. Should we be unable to remediate the material weakness promptly and effectively, suchweakness could harm our operating results, result in a material misstatement of our financial statements, cause us to fail to meet our financial reporting obligations orprevent us from providing reliable and accurate financial reports or avoiding or detecting fraud. This, in turn, could result in a loss of investor confidence in theaccuracy and completeness of our financial reports, which could have an adverse effect on the trading price of our ordinary shares. Any litigation or otherproceeding or adverse publicity relating to the material weaknesses could have a material adverse effect on our business and operating results. We have very limited insurance coverage which could expose us to significant costs and business disruption.We do not maintain any insurance coverage for our leased properties. Should any natural catastrophes such as earthquakes, floods, typhoons or any actsof terrorism occur in Beijing, China, where our head office is located and most of our employees are based, or elsewhere in China, we might suffer not onlysignificant property damages, but also loss of revenues due to interruptions in our business operations, which could have a material adverse effect on our business,operating results or financial condition.The insurance industry in China is still at an early stage of development. Insurance companies in China offer limited business insurance products, and donot, to our knowledge, offer business liability insurance. As a result, we do not have any business liability insurance coverage for our operations. Moreover, whilebusiness disruption insurance is available, we have determined that the risks of disruption and cost of the insurance are such that we do not require it at this time.Any business disruption, litigation or natural disaster might result in substantial costs and diversion of resources, particularly if it affects our technology platformswhich we depend on for delivery of our software and services, and could have a material adverse effect on our financial condition and results of operations.We may be liable to our customers for damages caused by unauthorized disclosure of sensitive and confidential information, whether through our employees orotherwise.We are typically required to manage, utilize and store sensitive or confidential customer data in connection with the products and services we provide.Under the terms of our customer contracts, we are required to keep such information strictly confidential. We seek to implement specific measures to protectsensitive and confidential customer data. We require our employees to enter into nondisclosure agreements to limit such employees’ access to, and distribution of,our customers’ sensitive and confidential information and our own trade secrets. We can give no assurance that the steps taken by us in this regard will be adequateto protect our customers’ confidential information. If our customers’ proprietary rights are misappropriated by our employees, in violation of any applicableconfidentiality agreements or otherwise, our customers may consider us liable for that act and seek damages and compensation from us. However, we currently donot have any insurance coverage for mismanagement or misappropriation of such information by our employees. Any litigation with respect to unauthorizeddisclosure of sensitive and confidential information might result in substantial costs and diversion of resources and management attention.8We may face intellectual property infringement claims that could be timeconsuming and costly to defend. If we fail to defend ourselves against such claims, wemay lose significant intellectual property rights and may be unable to continue providing our existing products and services.It is critical that we use and develop our technology and products without infringing upon the intellectual property rights of third parties, includingpatents, copyrights, trade secrets and trademarks. Intellectual property litigation is expensive and timeconsuming and could divert management’s attention from ourbusiness. A successful infringement claim against us, whether with or without merit, could, among others things, require us to pay substantial damages, developnoninfringing technology, or rebrand our name or enter into royalty or license agreements that may not be available on acceptable terms, if at all, and cease making,licensing or using products that have infringed a third party’s intellectual property rights. Protracted litigation could also result in existing or potential customersdeferring or limiting their purchase or use of our products until resolution of such litigation, or could require us to indemnify our customers against infringementclaims in certain instances. Also, we may be unaware of intellectual property registrations or applications relating to our services that may give rise to potentialinfringement claims against us. Parties making infringement claims may be able to obtain an injunction to prevent us from delivering our services or usingtechnology containing the allegedly infringing intellectual property. Any intellectual property litigation could have a material adverse effect on our business, resultsof operations or financial condition. Seasonality and fluctuations in our customers’ spending cycle and other factors can cause our revenues and operating results to vary significantly from quarterto quarter and from year to year.Our revenues and operating results will vary significantly from quarter to quarter and from year to year due to a number of factors, many of which areoutside of our control. Our new lines of business acquired upon the consummation of the asset exchange transaction discussed below see higher customer use andactivity during the Chinese New Year holiday than other times during the year when rail travel is high, which lead to higher revenue during this period as morecustomers would like to place more advertising. Due to these and other factors, our operating results may fluctuate significantly from quarter to quarter and fromyear to year. These fluctuations are likely to continue in the future, and operating results for any period may not be indicative of our future performance in any futureperiod.Our corporate actions are substantially controlled by our principal shareholders, who can cause us to take actions in ways you may not agree with.Mr. Xuesong Song, our chairman, chief executive officer and a member of our board of directors, beneficially owns 19.31% of our outstanding ordinaryshares and 1,000,000 preferred shares, and each preferred share has the right to 399 votes at a meeting of the members of the Company. Our officers and directors asa group beneficially own an aggregate of approximately 33.69% of our outstanding ordinary shares. These shareholders, acting individually or as a group, couldexert control and substantial influence over matters such as electing directors, amending our constitutional documents, and approving acquisitions, mergers or otherbusiness combination transactions. This concentration of ownership and voting power may also discourage, delay or prevent a change in control of our company,which could deprive our shareholders of an opportunity to receive a premium for their shares as part of a sale of our company and might reduce the price of ourshares. Alternatively, our controlling shareholders may cause a merger, consolidation or change of control transaction even if it is opposed by our othershareholders, including those who purchase shares in this offering.9We depend on a small number of customers to derive a significant portion of our revenues. If we were to become dependent again upon a few customers, suchdependency could negatively impact our business, operating results and financial condition.We derived a material portion of our revenues from a small number of customers. In the years ended December 31, 2017 and 2016, our five largestcustomers accounted for 99.8% and 78.5% of our total sales, respectively, and our largest customer Guangdong Zhanshi Media Advertising Co., Ltd. accounted forapproximately 80.8% of our total sales during for the fiscal year ended December 31, 2017. As our customer base may change from yeartoyear, during such yearsthat the customer base is highly concentrated, the fluctuation of our sales to any of such major customers could have a material adverse effect on our business,operating results and financial condition. Moreover, our high customer base concentration may also adversely affect our ability to negotiate contract prices withthese customers, which may in turn materially and adversely affect our results of operations.Our historical outstanding accounts receivable have been relatively high. Inability to collect our accounts receivable on a timely basis, if at all, couldmaterially and adversely affect our financial condition, liquidity and results of operations.Historically, our outstanding accounts receivable have been relatively high. As of December 31, 2017 and 2016, our outstanding accounts receivable beforeimpairment were $10.4 million and $2.10 million, respectively. Although we conduct credit evaluations of our customers, we generally do not require collateral orother security from our customers. In addition, we have had a relatively high customer concentration. The outstanding accounts receivable balance for our largestcustomer was 45.3% and 38.5% of our total accounts receivable balance as of December 31, 2017 and 2016, respectively. As a result, an extended delay or default inpayment relating to a significant account would likely have a material and adverse effect on the aging schedule and turnover days of our accounts receivable. Ourinability to collect our accounts receivable on a timely basis, if at all, could materially and adversely affect our financial condition, liquidity and results of operations.Risks Related to Doing Business in ChinaAdverse changes in political and economic policies of the PRC government could have a material adverse effect on the overall economic growth of China,which could reduce the demand for our services and materially and adversely affect our competitive position.Substantially all of our business operations are conducted in China. Accordingly, our business, results of operations, financial condition and prospects aresubject to a significant degree to economic, political and legal developments in China. Although the Chinese economy is no longer a planned economy, the PRCgovernment continues to exercise significant control over China’s economic growth through direct allocation of resources, monetary and tax policies, and a host ofother government policies such as those that encourage or restrict investment in certain industries by foreign investors, control the exchange between RMB andforeign currencies, and regulate the growth of the general or specific market. These government involvements have been instrumental in China’s significant growthin the past 30 years. The reorganization of the telecommunications industry encouraged by the PRC government has directly affected our industry and our growthprospect. In response to the recent global and Chinese economic downturn, the PRC government has adopted policy measures aimed at stimulating the economicgrowth in China. If the PRC government’s current or future policies fail to help the Chinese economy achieve further growth or if any aspect of the PRCgovernment’s policies limits the growth of the telecommunications industry in China or our industry or otherwise negatively affects our business, our growth rate orstrategy, our results of operations could be adversely affected as a result. Our business benefits from certain government tax incentives. Expiration, reduction or discontinuation of, or changes to, these incentives will increase our taxburden and reduce our net income.Under the PRC Enterprise Income Tax Law passed in 2007 and the implementing rules, both of which became effective on January 1, 2008, or the New EITLaw, a unified enterprise income tax rate of 25% and unified tax deduction standard is applied equally to both domesticinvested enterprises and foreigninvestedenterprises, or FIEs. Enterprises established prior to March 16, 2007 eligible for preferential tax treatment in accordance with the then tax laws and administrativeregulations shall gradually become subject to the New EIT Law rate over a fiveyear transition period starting from the date of effectiveness of the New EIT Law.However, certain qualifying hightechnology enterprises may still benefit from a preferential tax rate of 15% if they own their core intellectual properties and they areenterprises in certain Statesupported hightech industries to be later specified by the government. As a result, if our PRC subsidiaries qualify as “hightechnologyenterprises,” they will continue to benefit from the preferential tax rate of 15%, subject to transitional rules implemented from January 1, 2008. Our subsidiary, BeijingZhong Chuan Shi Xun Technology Limited, is qualified as a “hightechnology enterprise” until the end of the November 2018, and therefore it had benefited fromthe preferential tax rate of 15%, subject to transitional rules implemented on January 1, 2008. Although we intend to apply for a renewal of this qualification, if BeijingZhong Chuan Shi Xun ceases to qualify as a “hightechnology enterprise”, or the tax authorities change their position on our preferential tax treatments in thefuture, our future tax liabilities may materially increase, which could materially and adversely affect our financial condition and results of operations.10If we were deemed a “resident enterprise” by PRC tax authorities, we could be subject to tax on our global income at the rate of 25% under the New EIT Lawand our nonPRC shareholders could be subject to certain PRC taxes.Under the New EIT Law and the implementing rules, both of which became effective January 1, 2008, an enterprise established outside of the PRC with “defacto management bodies” within the PRC may be considered a PRC “resident enterprise” and will be subject to the enterprise income tax at the rate of 25% on itsglobal income as well as PRC enterprise income tax reporting obligations. The implementing rules of the New EIT Law define “de facto management” as “substantialand overall management and control over the production and operations, personnel, accounting, and properties” of the enterprise. However, as of the date of thistransition report, no final interpretations on the implementation of the “resident enterprise” designation are available. Moreover, any such designation, when madeby PRC tax authorities, will be determined based on the facts and circumstances of individual cases. Therefore, if we were to be considered a “resident enterprise”by the PRC tax authorities, our global income would be taxable under the New EIT Law at the rate of 25% and, to the extent we were to generate a substantial amountof income outside of PRC in the future, we would be subject to additional taxes. In addition, the dividends we pay to our nonPRC enterprise shareholders and gainsderived by such shareholders or ADS or ordinary share holders from the transfer of our shares or ADSs may also be subject to PRC withholding tax at the rate up to10%, if such income were regarded as Chinasourced income.Our holding company structure may limit the payment of dividends.We have no direct business operations, other than our ownership of our subsidiaries. While we have no current intention of paying dividends, should wedecide in the future to do so, as a holding company, our ability to pay dividends and meet other obligations depends upon the receipt of dividends or otherpayments from our operating subsidiaries and other holdings and investments. Current PRC regulations permit our PRC subsidiaries to pay dividends to us only outof their accumulated profits, if any, determined in accordance with Chinese accounting standards and regulations. In addition, each of our subsidiaries in China isrequired to set aside at least 10% of its aftertax profits each year, if any, to fund a statutory reserve until such reserve reaches 50% of its registered capital. Thesereserves are not distributable as cash dividends. Furthermore, if our subsidiaries in China incur debt on their own behalf in the future, the instruments governing thedebt may restrict their ability to pay dividends or make other payments to us. As a result, there may be limitations on the ability of our PRC subsidiaries to paydividends or make other investments or acquisitions that could be beneficial to our business or otherwise fund and conduct our business.In addition, under the New EIT Law and the implementing rules that became effective on January 1, 2008, dividends generated from the business of our PRCsubsidiaries after January 1, 2008 and payable to us may be subject to a withholding tax rate of 10% if the PRC tax authorities subsequently determine that we are anonresident enterprise, unless there is a tax treaty with China that provides for a different withholding arrangement.Uncertainties with respect to the PRC legal system could adversely affect us.We conduct all of our business through our subsidiaries in China. Our operations in China are governed by PRC laws and regulations. Our PRCsubsidiaries are generally subject to laws and regulations applicable to foreign investments in China and, in particular, laws and regulations applicable to whollyforeignowned enterprises. The PRC legal system is based on statutes. Prior court decisions may be cited for reference but have limited precedential value.11Since 1979, PRC legislation and regulations have significantly enhanced the protections afforded to various forms of foreign investments in China.However, China has not developed a fully integrated legal system and recently enacted laws and regulations may not sufficiently cover all aspects of economicactivities in China. In particular, because these laws and regulations are relatively new, and because of the limited volume of published decisions and theirnonbinding nature, the interpretation and enforcement of these laws and regulations involve uncertainties. In addition, the PRC legal system is based in part ongovernment policies and internal rules (some of which are not published on a timely basis or at all) that may have a retroactive effect. As a result, we may not beaware of our violation of these policies and rules until some time after the violation. In addition, any litigation in China may be protracted and result in substantialcosts and diversion of resources and management attention.PRC regulation of loans and direct investment by offshore holding companies to PRC entities may delay or prevent us from using the proceeds of our May2010 public offering to make loans or additional capital contributions to our PRC operating subsidiaries, which could materially and adversely affect ourliquidity and our ability to fund and expand our business.In utilizing the proceeds of our May 2010 public offering as an offshore holding company of our PRC operating subsidiaries, we may make loans to our PRCsubsidiaries, or we may make additional capital contributions to our PRC subsidiaries. Any loans to our PRC subsidiaries are subject to PRC regulations. Forexample, loans by us to our subsidiaries in China, which are FIEs, to finance their activities cannot exceed statutory limits and must be registered with the StateAdministration of Foreign Exchange, or SAFE. On August 29, 2008, SAFE promulgated Circular 142, a notice regulating the conversion by a foreigninvestedcompany of foreign currency into RMB by restricting how the converted RMB may be used. The notice requires that RMB converted from the foreign currencydenominated capital of a foreigninvested company may only be used for purposes within the business scope approved by the applicable governmental authorityand may not be used for equity investments within the PRC unless specifically provided for otherwise. The foreign currencydenominated capital shall be verified byan accounting firm before converting into RMB. In addition, SAFE strengthened its oversight over the flow and use of RMB funds converted from the foreigncurrencydenominated capital of a foreigninvested company. To convert such capital into RMB, the foreigninvested company must report the use of such RMB tothe bank, and the RMB must be used to the reported purposes. According to Circular 142, change of the use of such RMB without approval is prohibited. Inaddition, such RMB may not be used to repay RMB loans if the proceeds of such loans have not yet been used. Violations of Circular 142 may result in severepenalties, including substantial fines as set forth in the Foreign Exchange Administration Rules.We may also decide to finance our subsidiaries by means of capital contributions. These capital contributions may need approval from the PRC Ministry ofCommerce, or MOFCOM, or its local counterpart. We may not be able to obtain these government approvals on a timely basis, if at all, with respect to future capitalcontributions by us to our PRC subsidiaries. If we fail to receive such approvals in such cases when approval is required, our ability to use the proceeds of our May2010 public offering and to capitalize our PRC operations may be negatively affected, which could adversely affect our liquidity and our ability to fund and expandour business.Governmental control of currency conversion may affect the value of your investment.The PRC government imposes controls on the convertibility of the RMB into foreign currencies and, in certain cases, the remittance of currency out ofChina. We receive substantially all of our revenues in RMB. Under our current corporate structure, our income is primarily derived from dividend payments from ourPRC subsidiaries. Shortages in the availability of foreign currency may restrict the ability of our PRC subsidiaries to remit sufficient foreign currency to paydividends or other payments to us, or otherwise satisfy their foreign currency denominated obligations. Under existing PRC foreign exchange regulations, paymentsof current account items, including profit distributions, interest payments and expenditures from traderelated transactions, can be made in foreign currencieswithout prior approval from SAFE by complying with certain procedural requirements. However, approval from appropriate government authorities is required whereRMB is to be converted into foreign currency and remitted out of China to pay capital expenses such as the repayment of loans denominated in foreign currencies.The PRC government may also at its discretion restrict access in the future to foreign currencies for current account transactions. If the foreign exchange controlsystem prevents us from obtaining sufficient foreign currency to satisfy our currency demands, we may not be able to pay dividends in foreign currencies to ourshareholders, including holders of our ADSs or ordinary shares.12Fluctuation in the value of the RMB may have a material adverse effect on the value of your investment.The value of the RMB against the U.S. dollar and other currencies may fluctuate and is affected by, among other things, changes in political and economicconditions. On July 21, 2005, the PRC government changed its decadeold policy of pegging the value of the RMB to the U.S. dollar. Under the new policy, the RMBis permitted to fluctuate within a narrow and managed band against a basket of certain foreign currencies. This change in policy has resulted in an approximate26.8% appreciation of the RMB against the U.S. dollar between July 21, 2005 and September 30, 2015. Provisions on Administration of Foreign Exchange, asamended in August 2008, further changed China’s exchange regime to a managed floating exchange rate regime based on market supply and demand. Since reachinga high against the U.S. dollar in July 2008, however, the RMB has traded within a narrow band against the U.S. dollar, remaining within 1% of its July 2008 high butnever exceeding it. As a consequence, the RMB has fluctuated sharply since July 2008 against other freelytraded currencies, in tandem with the U.S. dollar. InAugust 2015, the PRC Government devalued its currency by approximately 3%, representing the largest yuan depreciation for 20 years. Concerns remain thatChina’s slowing economy, and in particular its exports, will need a stimulus that can only come from further cuts in the exchange rate.It is difficult to predict how long the current situation may continue and when and how it may change again as the People’s Bank of China may regularlyintervene in the foreign exchange market to achieve economic policy goals. Substantially all of our revenues and costs are denominated in the RMB, and asignificant portion of our financial assets are also denominated in RMB. We principally rely on dividends and other distributions paid to us by our subsidiaries inChina. Any significant revaluation of the RMB may materially and adversely affect our cash flows, revenues, earnings and financial position, and the value of, andany dividends payable on, our ADSs or ordinary shares in U.S. dollars. Any fluctuations of the exchange rate between the RMB and the U.S. dollar could also resultin foreign currency translation losses for financial reporting purposes.PRC laws and regulations governing our businesses. If we are found to be in violation of such PRC laws and regulations, we could be subject to sanctions. Inaddition, changes in such PRC laws and regulations may materially and adversely affect our business.There are substantial uncertainties regarding the interpretation and application of PRC laws and regulations, including, but not limited to, the laws andregulations governing our business. These laws and regulations are relatively new and may be subject to change, and their official interpretation and enforcementmay involve substantial uncertainty. The effectiveness of newly enacted laws, regulations or amendments may be delayed, resulting in detrimental reliance byforeign investors. New laws and regulations that affect existing and proposed future businesses may also be applied retroactively.The PRC government has broad discretion in dealing with violations of laws and regulations, including levying fines, revoking business and other licensesand requiring actions necessary for compliance. In particular, licenses and permits issued or granted to us by relevant governmental bodies may be revoked at a latertime by higher regulatory bodies. We cannot predict the effect of the interpretation of existing or new PRC laws or regulations on our businesses. We cannot assureyou that our current ownership and operating structure would not be found in violation of any current or future PRC laws or regulations. As a result, we may besubject to sanctions, including fines, and could be required to restructure our operations or cease to provide certain services. In addition, any litigation in China maybe protracted and result in substantial costs and diversion of resources and management attention. Any of these or similar actions could significantly disrupt ourbusiness operations or restrict us from conducting a substantial portion of our business operations, which could materially and adversely affect our business,financial condition and results of operations.13If we were required to obtain the prior approval of the China Securities Regulatory Commission, or CSRC, of the listing and trading of our ADSs on theNASDAQ Capital Market, we may face regulatory actions or other sanctions from the CSRC or other PRC regulatory agencies.On August 8, 2006, six PRC regulatory agencies, including the Ministry of Commerce, the State Assets Supervision and Administration Commission, theState Administration for Taxation, the State Administration for Industry and Commerce, the CSRC and the SAFE, jointly issued the Regulations on Mergers andAcquisitions of Domestic Enterprises by Foreign Investors, which became effective on September 8, 2006 (the “New M&A Rules”). This regulation, among otherthings, includes provisions that purport to require that an offshore special purpose vehicle formed for the purposes of overseas listing of equity interests in PRCcompanies and controlled directly or indirectly by PRC companies or individuals obtain the approval of the CSRC prior to the listing and trading of such specialpurpose vehicle’s securities on an overseas stock exchange. On September 21, 2006, the CSRC published on its official website procedures regarding its approval ofoverseas listings by special purpose vehicles. The CSRC approval procedures require the filing of a number of documents with the CSRC and it would take severalmonths to complete the approval process, if practicable at all. The application of this new PRC regulation remains unclear with no consensus currently existingamong leading PRC law firms regarding the scope of the applicability of the CSRC approval requirement. Prior to our May 2010 initial public offering, our PRC counsel has advised us that, based on its understanding of the current PRC laws and regulations aswell as the procedures announced on September 21, 2006: (i) Softech was directly incorporated by Topsky as a foreign investment enterprise under PRC law;therefore, there was no acquisition of the equity of a “PRC domestic company” as defined under the New M&A Rules; and (ii) the contractual arrangementsbetween Kingtone Information and Softech were not clearly defined and considered as the transaction which shall be applied to the New M&A Rules. Therefore, wedid not seek prior CSRC approval for our initial public offering.However, if the CSRC required that we obtain its approval prior to the completion of our initial public offering and the listing of our ADSs on the NASDAQCapital Market, we may face regulatory actions or other sanctions from the CSRC or other PRC regulatory agencies. These regulatory agencies may impose fines andpenalties on our operations in the PRC, limit our operating privileges in the PRC, delay or restrict the repatriation of the proceeds from our initial public offering intothe PRC, or take other actions that could have a material adverse effect on our business, financial condition, results of operations, reputation and prospects, as wellas the trading price of our shares.Also, if the CSRC requires that we obtain its approval, we may be unable to obtain a waiver of the CSRC approval requirements if and when procedures areestablished to obtain such a waiver. Any uncertainties and/or negative publicity regarding this CSRC approval requirement could have a material adverse effect onthe trading price of our shares.PRC regulations relating to the establishment of offshore special purpose companies by PRC residents may subject our PRC resident shareholders to penaltiesand limit our ability to inject capital into our PRC subsidiaries, limit our PRC subsidiaries’ ability to distribute profits to us, or otherwise adversely affect us.On October 21, 2005, the SAFE issued the Notice on Issues Relating to the Administration of Foreign Exchange in Fundraising and Reverse InvestmentActivities of Domestic Residents Conducted via Offshore Special Purpose Companies, or Notice 75, which became effective as of November 1, 2005. According toNotice 75, prior registration with the local SAFE branch is required for PRC residents to establish or to control an offshore company for the purposes of financingsuch offshore company with assets or equity interests in an onshore enterprise located in the PRC, or an offshore special purpose company. An amendment toregistration or filing with the local SAFE branch by such PRC resident is also required for the injection of equity interests or assets of an onshore enterprise in theoffshore special purpose company or overseas funds raised by such offshore company, or any other material change involving a change in the capital of theoffshore special purpose company. Moreover, Notice 75 applies retroactively. As a result, PRC residents who have established or acquired control of offshorespecial purpose companies that have made onshore investments in the PRC in the past are required to have completed the relevant registration procedures with thelocal SAFE branch by March 31, 2006. To further clarify the implementation of Notice 75, the SAFE issued Circular 106 on May 29, 2007. Under Circular 106, PRCsubsidiaries of an offshore special purpose company are required to coordinate and supervise the filing of SAFE registrations by the offshore holding company’sshareholders or beneficial owners who are PRC residents in a timely manner.14Some of our current shareholders and/or beneficial owners may fall within the ambit of the SAFE notice and be required to register with the local SAFEbranch as required under the SAFE notice. If so required, and if such shareholders and/or beneficial owners fail to timely register their SAFE registrations pursuantto the SAFE notice, or if future shareholders and/or beneficial owners of our company who are PRC residents fail to comply with the registration procedures setforth in the SAFE notice, this may subject such shareholders, beneficial owners and/or our PRC subsidiaries to fines and legal sanctions and may also limit ourability to contribute additional capital into our PRC subsidiaries, limit our PRC subsidiaries’ ability to distribute dividends to our company, or otherwise adverselyaffect our business.Risks Associated with our ADSs and Ordinary SharesOur securities are not currently traded on any United States public markets and you may not be able to resell your securities for some time.There is currently no public market for our ordinary shares or American Depository Shares (“ADSs”) in the United States or in any other jurisdiction. OurADSs were voluntarily delisted from the NASDAQ Capital Market on September 19, 2018. We have applied to NASDAQ for the listing of our ordinary shares on theNASDAQ Capital Market and received an approval for listing of Ordinary Shares on August 6, 2018, and as of the date of this transition report, that application andapproval are currently under review. We cannot assume that our ordinary shares will be accepted for listing on the NASDAQ Capital Market, or if listed, that wewould continue to meet the applicable minimum listing requriements. You may not be able to sell your ordinary shares quickly or at all if we are unable to gain listingon a public market in the United States.The market price of our ADSs has historically been highly volatile, and you may not be able to resell our ordinary shares at or above your initial purchaseprice.There may be a limited public market for our ordinary shares and, as discussed above, our ADSs are no longer listed on any public market in the UnitedStates or any other jurisdiction. We cannot assure you that there will be an active trading market for our ordinary shares in the future. If our ordinary shares areaccepted for listing on a public market, you may not be able to sell your ordinary shares quickly or at the market price if trading in our ordinary shares is not active. The trading price of our ADSs and ordinary shares may be volatile. The price of our ADSs and ordinary shares could be subject to wide fluctuations inresponse to a variety of factors, including the following:1.Introduction of new products, services or technologies offered by us or our competitors;2.Failure to meet or exceed revenue and financial projections we provide to the public;3.Actual or anticipated variations in quarterly operating results;4.Failure to meet or exceed the estimates and projections of the investment community;5.General market conditions and overall fluctuations in United States equity markets;6.Announcements of significant acquisitions, strategic partnerships, joint ventures or capital commitments by us or our competitors;7.Disputes or other developments relating to proprietary rights, including patents, litigation matters and our ability to obtain patent protection for ourtechnologies;8.Additions or departures of key management personnel;9.Issuances of debt or equity securities;10.Significant lawsuits, including patent or shareholder litigation;11.Changes in the market valuations of similar companies;12.Sales of additional ordinary shares or other securities by us or our shareholders in the future;13.Trading volume of our ordinary shares;14.Fluctuations in the exchange rate between the U.S. dollar and Renminbi;15.Negative market perception and media coverage of our company or other companies in the same or similar industry with us; and16.Other events or factors, many of which are beyond our control.15In addition, the stock market in general, and the NASDAQ Capital Market and software products and services companies in particular, have experiencedextreme price and volume fluctuations that have often been unrelated or disproportionate to the operating performance of these companies. Broad market andindustry factors may negatively affect the market price of our ordinary shares, regardless of our actual operating performance. Our ADSs and ordinary shares may be subject to the SEC’s penny stock rules which may make it difficult for brokerdealers to complete customer transactionsand trading activity in our securities.Our ADSs and ordinary shares may be deemed to be “penny stock” as that term is defined under the Securities Exchange Act of 1934, as amended. Pennystocks generally are equity securities with a price of less than $5.00 (other than securities registered on certain national securities exchanges or quoted on theNASDAQ system, provided that current price and volume information with respect to transactions in such securities is provided by the exchange or system). Pennystock rules impose additional sales practice requirements on brokerdealers who sell to persons other than established customers and “accredited investors.” Theterm “accredited investor” refers generally to institutions with assets in excess of $5,000,000 or individuals with a net worth in excess of $1,000,000 or annual incomeexceeding $200,000 or $300,000 jointly with their spouse in each of the prior two years.The penny stock rules require a brokerdealer, prior to a transaction in a penny stock not otherwise exempt from the rules, to deliver a standardized riskdisclosure document in a form prepared by the SEC, which provides information about penny stocks and the nature and level of risks in the penny stockmarket. Moreover, brokerdealers are required to determine whether an investment in a penny stock is a suitable investment for a prospective investor. A brokerdealer must receive a written agreement to the transaction from the investor setting forth the identity and quantity of the penny stock to be purchased. Theserequirements may make it more difficult for brokerdealers to effectuate customer transactions and trading activity in our securities. As a result, the market price ofour ADSs and ordinary shares may be depressed, and you may find it more difficult to sell our ADSs or ordinary shares.Sales of a substantial number of ordinary shares or ADSs in the public market by our existing shareholders could cause the price of our ADSs to fall.Sales of a substantial number of our ordinary shares or ADSs in the public market or the perception that these sales might occur, could depress the marketprice of our ADSs and could impair our ability to raise capital through the sale of additional equity securities. We are unable to predict the effect that sales may haveon the prevailing market price of our ADSs.All of our existing shareholders prior to our May 2010 offering were subject to lockup agreements with the underwriters of the offering that restricted theshareholders’ ability to transfer ordinary shares or ADSs until expiration of the lockup period in November 2010. The lockup agreements limited the number ofordinary shares or ADSs that may be sold immediately following the public offering. Subject to certain limitations, approximately 1,000,000 of our total outstandingshares are now eligible for sale. Sales of ordinary shares by these shareholders could have a material adverse effect on the trading price of our ADSs.Future sales and issuances of our ordinary shares, or rights to purchase our ordinary shares, including pursuant to our 2010 Omnibus Incentive Plan, couldresult in additional dilution of the percentage ownership of our shareholders and could cause the price of our ordinary shares to fall.We expect that significant additional capital will be needed in the future to continue our planned operations. To the extent we raise additional capital byissuing equity securities, our shareholders may experience substantial dilution. We may sell ordinary shares, convertible securities or other equity securities in oneor more transactions at prices and in a manner we determine from time to time. If we sell ordinary shares, convertible securities or other equity securities in more thanone transaction, investors may be materially diluted by subsequent sales. Such sales may also result in material dilution to our existing shareholders, and newinvestors could gain rights superior to our existing shareholders.16We do not intend to pay dividends on our ordinary shares, so any returns will be limited to the value of our ADSs and ordinary shares.We have never declared or paid any cash dividend on our ordinary shares. We currently anticipate that we will retain future earnings for the development,operation and expansion of our business and do not anticipate declaring or paying any cash dividends for the foreseeable future. Any return shareholders willtherefore be limited to the value of their ADSs or ordinary shares.As the rights of shareholders under British Virgin Islands law differ from those under U.S. law, you may have fewer protections as a shareholder.Our corporate affairs will be governed by our memorandum of association and articles of association, the BVI Business Companies Act, 2004, or the BVIAct, of the British Virgin Islands and the common law of the British Virgin Islands. The rights of shareholders to take legal action against our directors, actions byminority shareholders and the fiduciary responsibilities of our directors under British Virgin Islands law are to a large extent governed by the BVI Act and thecommon law of the British Virgin Islands. The common law of the British Virgin Islands is derived in part from comparatively limited judicial precedent in the BritishVirgin Islands as well as from English common law, which has persuasive, but not binding, authority on a court in the British Virgin Islands. The rights of ourshareholders and the fiduciary responsibilities of our directors under British Virgin Islands law are not as clearly established as they would be under statutes orjudicial precedents in some jurisdictions in the United States. In particular, the British Virgin Islands has a less developed body of securities laws as compared to theUnited States, and some states (such as Delaware) have more fully developed and judicially interpreted bodies of corporate law.As a result of all of the above, holders of our ADSs and ordinary shares may have more difficulty in protecting their interests through actions against ourmanagement, directors or major shareholders than they would as shareholders of a U.S. company.British Virgin Islands companies may not be able to initiate shareholder derivative actions, thereby depriving shareholders of the ability to protect theirinterests.British Virgin Islands companies may not have standing to initiate a shareholder derivative action in a federal court of the United States. The circumstancesin which any such action may be brought, and the procedures and defenses that may be available in respect to any such action, may result in the rights ofshareholders of a British Virgin Islands company being more limited than those of shareholders of a company organized in the United States. Accordingly,shareholders may have fewer alternatives available to them if they believe that corporate wrongdoing has occurred. The British Virgin Islands courts are alsounlikely to recognize or enforce against us judgments of courts in the United States based on certain liability provisions of U.S. securities law; and to imposeliabilities against us, in original actions brought in the British Virgin Islands, based on certain liability provisions of U.S. securities laws that are penal in nature.There is no statutory recognition in the British Virgin Islands of judgments obtained in the United States, although the courts of the British Virgin Islands willgenerally recognize and enforce the nonpenal judgment of a foreign court of competent jurisdiction without retrial on the merits.The laws of the British Virgin Islands provide little protection for minority shareholders, so minority shareholders will have little or no recourse if theshareholders are dissatisfied with the conduct of our affairs.Under the law of the British Virgin Islands, there is little statutory law for the protection of minority shareholders other than the provisions of the BVI Actdealing with shareholder remedies. The principal protection under statutory law is that shareholders may bring an action to enforce the constituent documents ofthe corporation, our memorandum of association and articles of association. Shareholders are entitled to have the affairs of the company conducted in accordancewith the general law and the memorandum of association and articles of association.17There are common law rights for the protection of shareholders that may be invoked, largely dependent on English company law, since the common law ofthe British Virgin Islands is limited. Under the general rule pursuant to English company law known as the rule in Foss v. Harbottle, a court will generally refuse tointerfere with the management of a company at the insistence of a minority of its shareholders who express dissatisfaction with the conduct of the company’s affairsby the majority or the board of directors. However, every shareholder is entitled to have the affairs of the company conducted properly according to law and thecompany’s constituent documents. As such, if those who control the company have persistently disregarded the requirements of company law or the provisions ofthe company’s memorandum of association and articles of association, then the courts will grant relief. Generally, the areas in which the courts will intervene are thefollowing: (1) an act complained of which is outside the scope of the authorized business or is illegal or not capable of ratification by the majority; (2) acts thatconstitute fraud on the minority where the wrongdoers control the company; (3) acts that infringe on the personal rights of the shareholders, such as the right tovote; and (4) where the company has not complied with provisions requiring approval of a majority of shareholders, which are more limited than the rights affordedminority shareholders under the laws of many states in the United States.Antitakeover provisions in our memorandum of association and articles of association and our right to issue preference shares could make a thirdpartyacquisition of us difficult.Some provisions of our memorandum of association and articles of association may discourage, delay or prevent a change in control of our company ormanagement that shareholders may consider favorable, including provisions that authorize our board of directors to issue preference shares in one or more seriesand to designate the price, rights, preferences, privileges and restrictions of such preference shares.If you hold our ADSs, you may not have the same voting rights as the holders of our ordinary shares and must act through the depositary to exercise your rights.Holders of our ADSs will not be able to exercise voting rights attaching to the shares evidenced by our ADSs on an individual basis. Holders of our ADSswill appoint the depositary or its nominee as their representative to exercise the voting rights attaching to the shares represented by the ADSs. You may not receivevoting materials in time to instruct the depositary to vote, and it is possible that you, or persons who hold their ADSs through brokers, dealers or other third parties,will not have the opportunity to exercise a right to vote. Upon our written request, the depositary will mail to you a shareholder meeting notice which contains,among other things, a statement as to the manner in which your voting instructions may be given, including an express indication that such instructions may begiven or deemed given to the depositary to give a discretionary proxy to a person designated by us if no instructions are received by the depositary from you on orbefore the response date established by the depositary. However, no voting instruction shall be deemed given and no such discretionary proxy shall be given withrespect to any matter as to which we inform the depositary that (i) we do not wish such proxy given, (ii) substantial opposition exists, or (iii) such matter materiallyand adversely affects the rights of shareholders. We will make all reasonable efforts to cause the depositary to extend voting rights to you in a timely manner, butyou may not receive the voting materials in time to ensure that you can instruct the depositary to vote your ADSs. Furthermore, the depositary and its agents willnot be responsible for any failure to carry out any instructions to vote, for the manner in which any vote is cast or for the effect of any such vote. As a result, youmay not be able to exercise your right to vote and you may lack recourse if your ADSs are not voted as you requested. In addition, in your capacity as an ADSholder, you will not be able to call a shareholders’ meeting.You may not be able to participate in rights offerings and may experience dilution of your holdings as a result.We may from time to time distribute rights to our shareholders, including rights to acquire our securities. However, we may not, and under the depositagreement for the ADSs, the depositary will not, offer those rights to ADS holders unless both the rights and the underlying securities to be distributed to ADSholders are registered under the Securities Act, or the distribution of them to ADS holders is exempted from registration under the Securities Act with respect to allholders of ADSs. We are under no obligation to file a registration statement with respect to any such rights or underlying securities or to endeavor to cause such aregistration statement to be declared effective. In addition, we may not be able to rely on an exemption from registration under the Securities Act to distribute suchrights and securities. Accordingly, holders of our ADSs may be unable to participate in our rights offerings and may experience dilution in their holdings as a result.You may be subject to limitations on transfer of your ADSs.Your ADSs are transferable on the books of the depositary. However, the depositary may close its transfer books at any time or from time to time when itdeems expedient in connection with the performance of its duties. In addition, the depositary may refuse to deliver, transfer or register transfers of ADSs generallywhen our books or the books of the depositary are closed, or at any time if we or the depositary deem it advisable to do so because of any requirement of law or ofany government or governmental body, or under any provision of the deposit agreement, or for any other reason.18We may be a passive foreign investment company, of PFIC, which could lead to additional taxes for U.S. holders of our ADSs or ordinary shares.We do not expect to be, for U.S. federal income tax purposes, a passive foreign investment company, or a PFIC, which is a foreign company for which, inany given taxable year, either at least 75% of its gross income is passive income, or investment income in general, or at least 50% of its assets produce or are held toproduce passive income, for the current taxable year, and we expect to operate in such a manner so as not to become a PFIC for any future taxable year. However,because the determination of PFIC status for any taxable year cannot be made until after the close of such year and requires extensive factual investigation,including ascertaining the fair market value of our assets on a quarterly basis and determining whether each item of gross income that we earn is passive income, wecannot assure you that we will not become a PFIC for the current taxable year or any future taxable year. If we are or become a PFIC, a U.S. holder of our ADSs orordinary shares could be subject to additional U.S. federal income taxes on gain recognized with respect to the ADSs or ordinary shares and on certain distributions,plus an interest charge on certain taxes treated as having been deferred under the PFIC rules. Noncorporate U.S. holders will not be eligible for reduced rates oftaxation on any dividends received from us if we are a PFIC in the taxable year in which such dividends are paid or in the preceding taxable year.If our ordinary shares are listed on the NASDAQ Capital Market and the trading price of our ordinary shares fails to comply with the continued listingrequirements of the NASDAQ Capital Market, we would face possible delisting, which would result in a limited public market for our ordinary shares andmake obtaining future debt or equity financing more difficult for us.Companies listed on NASDAQ are subject to delisting for, among other things, failure to maintain a minimum closing bid price of $1.00 per share for 30consecutive business days. On December 19, 2011, we received a letter from NASDAQ indicating that for the last 30 consecutive business days, the closing bidprice of our ADSs fell below the minimum $1.00 per share requirement pursuant to NASDAQ Listing Rule 5550(a)(2) for continued listing on the NASDAQ CapitalMarket. We regained compliance with the minimum bid price requirement for continued listing set forth in NASDAQ Listing Rule 5550(a)(2), as its ADS with itsunderlying ordinary share has achieved a closing bid price of $1.00 or greater for the 10 consecutive business days from November 6 to November 23, 2012 byimplementing a 1for10 combination, or reverse split of the ordinary shares effective November 6, 2012. When listed, we cannot be sure that the price of our ordinaryshares will comply with this requirement for continued listing on the NASDAQ Capital Market in the future. If we were not able to do so, our ordinary shares wouldbe subject to delisting and would likely trade on the overthecounter market. If our ordinary shares were to trade on the overthecounter market, selling ourordinary shares could be more difficult because smaller quantities of shares would likely be bought and sold, transactions could be delayed, and security analysts’coverage of us may be reduced. In addition, brokerdealers have certain regulatory burdens imposed upon them, which may discourage brokerdealers from effectingtransactions in our ordinary shares, further limiting the liquidity of our ordinary shares. As a result, the market price of our ordinary may be depressed, and you mayfind it more difficult to sell our ordinary shares. Such delisting from the NASDAQ Capital Market and continued or further declines in our share price could alsogreatly impair our ability to raise additional necessary capital through equity or debt financing.ITEM 4. INFORMATION ON THE COMPANY.A . HISTORY AND DEVELOPMENT OF THE COMPANY.OverviewWe are a holding company and conduct our operations through our whollyowned subsidiary named LK Technology Ltd., a British Virgin Islands limitedliability company (“LK Technology”), and its whollyowned subsidiaries, MMB Limited and Mobile Media (China) Limited and their respective subsidiaries, whichhold the rights to deploy WiFi systems on about 700 trains in China, including 290 trains in which WiFi systems have already been installed and are in operation. InMay 2010, we consummated an initial public offering of our American Depository Shares, or ADSs, for gross proceeds of $16 million, and our ADSs were listed onthe NASDAQ Capital Market under the ticker symbol “KONE”. Our ordinary shares are not currently listed on any trading market. Our American Depository Shares(“ADSs”) were voluntarily delisted from the NASDAQ Capital Market on September 19, 2018. We have applied to NASDAQ for the listing of our ordinary shares onthe NASDAQ Capital Market and received an approval for listing of Ordinary Shares on August 6, 2018, and as of the date of this transition report, that applicationand approval are currently under review.19On August 17, 2018, we consummated an asset exchange transaction, pursuant to which we exchanged all issued and outstanding capital stock in TopskyInfoTech Holdings Pte Ltd., the parent of Softech, for the issued and outstanding capital stock of LK Technology (the “Asset Exchange”). In connection with theAsset Exchange, we changed our name on August 20, 2018, and on September 20, 2018, issued to the shareholders of C Media Limited, the former parent of LKTechnology, (i) 185,412,599 of our ordinary shares, par value $0.01 per share and (ii) 1,000,000 of our preferred shares. Upon the consummation of the AssetExchange, we ceased our previous business operations and became a company focused on the provision of WiFi and mobile application products for long distancerail travelers in China.On August 25, 2018, LK Technology entered into a Stock Purchase Agreement (the “Agreement”) with the shareholders (“Shareholders”) of SuperengineHoldings Limited, a limited liability company organized under the laws of the British Virgin Islands (the “Superengine”), pursuant to which LK Technology acquiredall of the issued and outstanding capital stock of Superengine for an aggregate purchase price of US$60 million (the “Purchase Price”), which are paid by theissuance of our Ordinary Shares in an amount equal to the quotient of (x) the Purchase Price divided by (y) the average of the closing prices of the Ordinary Shareson the NASDAQ Capital Market over the 12 months period preceding July 31, 2018. We are a party to the Agreement in connection with the issuance of theOrdinary Shares and certain other limited purposes.Corporate InformationOur principal executive offices are located at LAB32, SOHO 3Q, No 9, Guanghua Road, Chaoyang District, Beijing, People’s Republic of China 100020. Ourwebsite is www.luokung.com. We routinely post important information on our website. The information contained on our website is not a part of this transitionreport.Our agent for service of process in the United States is Worldwide Stock Transfer, LLC, the current transfer agent of the Company, with a mailing address ofOne University Plaza, Suite 505, Hackensack, New Jersey 07601.B. BUSINESS OVERVIEW.We are a Chinabased provider of rail WiFi and mobile application products for long distance travelers in China. Our primary mobile application, theLuoKuang platform, consists of the LuoKuang mobile applications, a series of supporting software at the server end, and railWiFi hardware and equipment on thetrains that we serve. The LuoKuang platform incorporates technology covered by 22 patents and about 34 software copy rights, and serves as a content and servicedistribution platform that is tailored for particular travel stages featuring geographic location and social interaction. The content and services distributed byLuoKuang contain information, entertainment, travel, ecommerce, online to offline (“O2O”), advertisement and marketing features.LuoKuang mainly provides personalized and precise services to long distance travelers in two locations: on the train and at the destination. Based on thetravel environment, the core elements of our users’ needs include staving off boredom on trains and discovering and exploring new locations upon arrival. The mainservices contain entertainment services (videos and audio, digital readings, games specific and tailored to the travel stage) and social services (satisfying thedemand for value discovery of unfamiliar destinations through social interaction among strangers based on locations). As of December 31, 2017, the LuoKuangplatform featured about 38 million users.The setting services on the train focus on providing entertainment content for passengers to pass time during longdistance travel in closed environments.For example, we provide access to long video formats such as movies and TV shows, short videos, music, digital readings and games.20We use the most valuable WiFi location—the train WiFi setting—as the entrance of our LuoKuang platform and mobile applications. Passengers typicallyride trains for longdistance and interprovincial travel purposes. The long periods of monotonous journeys and the cost concerns for roaming traffic fees enable thecombination of entertainment content service needs and WiFi access needs. Our railWiFi becomes a valuable and sophisticated WiFi service in this setting—notjust WiFi connection service, but a provider of sophisticated services through a WiFi connection. In addition, the annual traffic of 800,000 passengers onboardeach train makes rail WiFi a huge entry point for mobile applications. We do not define ourselves as a train WiFi communication service operator but as a longdistance travel mobile service provider. We provide users with free WiFi access so that users are able to connect to the LuoKuang platform and thus access relatedentertainment services, services on the train and destination services. The rail WiFi is our access point to a significant pool of users and the entrance to acquiringadditional users.The setting services focus on providing targeted push services to users while travelling in unfamiliar cities. Information and service guidance are preciselypushed to appeal to the interests and tastes (eating, drinking, shopping, touring and culture) of individual users (cuisine specialties and local snacks, local events,viewing sights, culture, history, stories). The service guidance is generated, shared and distributed by individual users (travelers, local residents, local businesses)interacting with current locations and featuring users who generated contents from selfmedia and small and medium vertical contents providers).Based on the GIS (geoinformation system), Superengine is a provider of big spatialtemporal data, network graphic image technology and relevant service.Its super engine series includes computer graphic image engines and spatial database engines. Spatialtemporal cloud index is the core of the company’s spatialtemporal data engines. It is equivalent to the neural network of the big data and the Internet. It extends the value of its products and platform to its data serviceproviders. In cooperation, its service providers can be divided into three categories, namely, basic geographic data providers, industrial data providers andbehavioral data providers). Superengine’s industriesoriented spatialtemporal data engine was launched in 2016. The spatialtemporal GIS platform has been appliedin industries such as aerospace, power grid, surveying & mapping, agriculture, cultural relic preservation, water conservancy, public security, railway section, smartcities, and business location selection.Our primary sources of revenue are advertising and marketing promotion revenues.Our Industry — Mobile Internet IndustryOur products and services are engaged in the mobile internet industry. Our main services consist of entertainment services (videos, audio, digital readings,games that are tailormade for passengers on train) and other services including satisfying the demand for value discovery of unfamiliar destinations through socialinteractions among strangers based in such locations). The mobile internet industry in China is rapidly growing and is likely to be in a longterm growth trend.According to the Mobile Internet Blue Book of China Mobile Internet Report, in 2017 the market size of China mobile internet reached RMB 605 billion. Now China isin a leading position in terms of smartphone, mobile communication network and mobile application services. The pool of users is anticipated to keep expandingthrough the promotion and popularization of smartphones and the expansion of the mobile internet market.Video is the leading online entertainment format in China. According to the iResearch Report, over 80% of total time spent by users on online entertainmentin China in 2016 was internet video. Online entertainment, especially internet video, is attractive to Chinese users due to many favorable factors, including easyaccessibility, wide content selection, and innovative platforms with social features.For 2017, the transaction volume of China mobile ecommerce market reached to over RMB 4 trillion according to the China Mobile Ecommerce IndustryResearch Report from iResearch, representing an increase of 19.1%. For the next few years, China mobile online shopping will likely maintain steady growth. Thefocal point of competition in China mobile ecommerce market has shifted from infrastructure service providers to integrated and accurate services providers.Drawing in users with compelling content in diversified scenes has become a trend.21The revenue for China mobile gaming industry reached RMB 144.58 billion for the year of 2017, according to the China Mobile Game Industry ResearchReport from iResearch. With increased investment by largescale enterprises in the sector of mobile games and the strict enforcement of the mobile game industryrelated regulatory policy guidelines, the mobile game market as a whole will become more organized and standardized.According to the Annual Analysis of China Mobile Reading Industry from Analysis, for the year of 2017, the mobile reading market in China reached toRMB 14.04 billion. By the end of 2016, the size of China mobile's reading market reached RMB 11.86 billion, showing an increase of 18.38% in 2017.The closed and boring environment for passengers of longdistance travel and high roaming charges lead to a strong demand to use our rail WiFi services.Passengers, through their own mobile phone, have access to the free WiFi network in each carriage, access to our rich mobile internet entertainment content andtravel services. According to the annual statistical bulletin of China Railway Corporation in 2017, there were about 6,030 trains in operation in China in 2017,consisting of 2,935 high speed trains and 3,095 express trains. The rail WiFi system that we have installed are currently all on express trains. The market value will bemultiplied several times following the extended coverage of service on other trains.Our StrengthsWe believe the following strengths differentiate us from our competitors:Our strategy is to build up personalized and targeted service products for travelers through rail WiFi networks, enabling our services to evolve into a coredriving distribution platform that provides content, news, games, ecommerce, OTO service, travel services and advertising and marketing. In comparison, ourcompetitors offer simple forms of media services on trains. We focus on personalized and targeted matching between users on long distance trips and services. Ourcompetitors focus on operating and generating internet traffic.We possess a complete set of technology system including network, client end and service and operation platform. We have patent protections for WiFiequipment on trains. Our technology strengths are briefly summarized below.WiFi EquipmentPatent protected. Supports WiFi/3G/4G telecom modules; 4 core CPU with X86 architecture, and SSD hard disk with big storage for localcontents.InfrastructureThe technology infrastructures include the application program system, big data gathering and processing systems, intelligence cloudsservice deployment structure systems and our WiFi hardware server deployment structure system. The operation center, big data center,contents center and railWiFi server system are built on this infrastructure. On the above layer, the equipment management platform,account and payment platform, contents management platform and advertisement distribution platform are set up for daily managementpurpose.LuoKuang strengthens the connection of services among people, setting and locations. In catering to people on the move, we anticipate strengthening therelationship between users and their locations in a given moment. Currently, LuoKuang provides the link between users and thirdparty service providers andprovides value added services to both users and thirdparty service providers. The connection is not simply a traffic diversion, but also the direct presentation ofrelevant services in the LuoKuang platform. The open API interface and independent product software package allows easy access by service providers anddevelopers and supports data service, advertisement operations, billing, users promotion and product marketing services. As an API product, LuoKuang does notcreate content or services. The content and services are provided by our partners in the LuoKuang platform. Now, the majority of top mobile internet content andservices providers in China have a presence in the Luokuang platform. Those include, but are not limited to, Toutiao, Wangyi News, iqiyi, Letv, YoudianCinema(Hollywood films), Sohu video, Phoenix Video, Kugou Music, FM Qingting, iReader, Baidu Literature, Phoenix Novel, Baidu Game, Meituan, Dianping, andsimilar content providers.22Our StrategyLuoKuang is positioned to provide API interface services and geographic information social services. The API interface services are provided within thetypical BC model. LuoKuang pushes the content and services from thirdparty service providers to users. The local businesses, service practitioners, residents, andforeign travelers are all defined as a “user” and may participate in social interactions based on local value information and generate UGC content. The socalled localvalue information is defined as information, views, evaluations, experiences and experience sharing related to the local cultural scene, native products,entertainment, food, tourism and activities.The LuoKuang user growth strategy is to have access to users through the travelers’ use of mobile devices in connection with longdistance train travel.Through deploying WiFi systems on trains and providing free WiFi access to passengers, LuoKuang is able to have consistent access to longdistance travelers.The WiFi system on the train has become a powerful user portal at the early stage of LuoKuang and has gained substantial user traffic. We are in a leading positionin terms of numbers of trains contracted and trains in operation with our free WiFi system. We have contracted with about 700 trains, which cover almost 560 millionannual passenger trips. As of the date of this report, approximately 290 trains are operating our rail WiFi system. We will continue to install our rail WiFi system inthe following years.The development strategy for LuoKuang encompasses the following:1.Enhance our local cycle service (a recommendation service system based on the location of travelers after their arrival, recommendations includingtourist attractions, local specialties and other items of interest), strengthen services for arrivals in the form of social interaction and focus on the valueof relationships between users and their current locations.2.Focus on the development of geographic positioning technology. Get the business of local cycle and users on train mixed together. We will put oureffort to maximize the synergy effect.3.Big Data: Behavior data about passenger trips is obtained via the traffic entrance of rail WiFi and these data will help to optimize our product.4.While enhancing setting service experiences and optimizing entertainment experiences, we will enrich ecommerce services on trains featuringrecommendations of customized products and ecommerce shopping guidance of products labeled with specific geographic location (and trafficdiversion).5.Focus on API positioning and attract more premium vertical service providers (contents and services).Intellectual PropertyWe have registered the following software copyrights, patents and trademarks for our business operations. We believe this intellectual property forms anintegral part of our competitive strength.23Patents:We have been granted some inventions by the State Intellectual Property Office of PRC. We possess a complete set of technology system includingnetwork, client end and service and operation platform. We have patent protections for WiFi equipment on trains. We have received the following patents:No.Name of patentTypeRegistrationNumberDate of Insurance1.Wireless communication multimedia chip business consumer informationacquisition terminal deviceInventionZL 2010 2 0528767.9Sep 21, 20112.A user behavior processing method and device for intelligent terminalInventionZL 2013 1 0301728.3May 27, 20153.A global positioning system terminal deviceInventionZL 2010 2 0253452.8Nov 7, 20114.A wireless multimedia serverInventionZL 2013 2 0220183.9Nov 13, 20135.Ordering system of passengers on trainInventionZL 2015 2 0095381.6Aug 5, 20156.A wireless multimedia serverInventionZL 2015 2 0201382.4Oct 28, 20157.An antenna structureInventionZL 2016 2 0424352.4Mar 1, 20178.Spatial data progressive transmission method and deviceInvention201010617383.9Jun 15, 20169.Methods and devices for conflict detection and avoidance of spatial entity elementlabelingInvention201010617385.8Mar 26, 201410.Spatial data processing method and deviceInvention201010617399.XJun 26, 201311.Method and device of spatial data simplificationInvention201010617400.9Mar 13, 201312.Method and device for judging the occlusion type of space entityInvention201010617403.2Sep 25, 201313.A method and device for distributed mapping of 3d model dataInvention201110274924.7Mar 26, 201414.Data simplification of 3d model, gradual transmission method and deviceInvention201110275336.5Mar 25, 201515.Spatial data transmission method and deviceInvention201110306393.5Dec 13, 201416.Methods and devices for spatial data processing, simplification and progressivetransmissionInvention201210104250.0Jun 10, 201517.Spatial data progressive transmission method and deviceInvention201310367021.2Jun 23, 201718.Simplification method and device of spatial dataInvention201310367128.7Sep 22, 201719.The method and device to accelerate transmission and display of graphic dataacross platformsInvention201210116149.7Aug 10, 201620.Methods and devices related to spatial data compression, decompression andprogressive transmissionInvention201310136682.4Nov 10, 2017We also have two patents outside of China.No.Name of patentCountryNationalRegistrationNumberDate ofInsurance1.Spatial data processing method and deviceJapan2012547439Jun 20, 20142.Methods and devices related to spatial data compression, decompression andprogressive transmissionU.S.A14/394,610Sep 5, 201724Software Copyrights:We have received the following software copyrights from the National Copyright Administration (“NCA”) of PRC:No.Name of CopyrightAchievement approachRegistration numberTime of obtainExpire time1.WAP PUSH Business operation platformsystemIndependent research anddevelopment2007SRBJ1464Jul 23, 200750 years2.TDSCDMA Streaming media businessmanagement platform software V1.0Independent research anddevelopment2009SRBJ0412Jan 22, 200950 years3.Content management platform systemsoftware V1.0Independent research anddevelopment2009SRBJ1374Apr 1, 200950 years4.Mobile multimedia broadcast electronicservice guide system software V1.0Independent research anddevelopment2009SRBJ1365Apr 1, 200950 years5.Mobile video business operation platformsystem V1.0Independent research anddevelopment2007SRBJ1463Jul 23, 200750 years6.Mobile multimedia broadcast emergencybroadcast platform software V1.0Independent research anddevelopment2010SRBJ0720Mar 5, 201050 years7.Mobile multimedia broadcast audio richmedia interactive platform softwareV1.0Independent research anddevelopment2010SRBJ0719Mar 5, 201050 years8.Printer typesetting and printing softwareV1.0Independent research anddevelopment2011SRBJ4190Sep 28, 201150 years9.Electronic newspaper business supportplatform software V1.0Independent research anddevelopment2011SRBJ4186Sep 28, 201150 years10.Public information business platformsoftware V1.0Independent research anddevelopment2011SRBJ3810Sep 27, 201150 years11.User interface scripting software V1.0Independent research anddevelopment2011SRBJ3809Sep 27, 201150 years12.Integrated business management platformsoftware V1.0Independent research anddevelopment2012SR003002Jan 16, 201250 years13.Interactive business development platformsoftwareIndependent research anddevelopment2011SRBJ4593Nov 29, 201150 years14.Instant messaging and messaging systemsoftwareIndependent research anddevelopment2014SR122231Aug 5, 201450 years15.General statistical platform software forclient productsIndependent research anddevelopment2014SR216662Dec 30, 201450 years16.CMMB Data broadcast managementplatform softwareIndependent research anddevelopment2009SRBJ0391Jan 22, 200950 years17.Integrated passenger train service systemIndependent research anddevelopment2012SR083665Sep 5, 201250 years25No.Name of CopyrightAchievement approachRegistration numberTime of obtainExpire time18.JHBY Train inspection managementsystemIndependent research anddevelopment2013SR015105Feb 21, 201350 years19.Integrated information engine platformsoftware V1.0Independent research anddevelopment2014SR040347Nov 30, 200150 years20.Super information engine developmentplatform software V5.0Independent research anddevelopment2014SR036792Mar 5, 200350 years21.Core map super network informationengine platform software V1.0Independent research anddevelopment2014SR036772Sep 15, 200750 years22.Integrated management of the grid gissoftware V1.0Independent research anddevelopment2014SR036808Jun 20, 200850 years23.Core map rural power grid equipment GPSpatrol system software V1.0Independent research anddevelopment2014SR036810Dec 10, 200850 years24.Diagram grid patrol PDA system softwareV1.0Independent research anddevelopment2014SR036778Dec 12, 200850 years25.Core map geographic information enginedesktop platform software V1.0Independent research anddevelopment2014SR036614Jan 15, 200950 years26.Integrated management of the gridgeographic information Web systemsoftware V1.0Independent research anddevelopment2014SR036799Mar 10, 200950 years27.Core map railway power supply equipmentGPS patrol system software V1.0Independent research anddevelopment2014SR036783Mar 25, 201050 years28.Core map network 3 d map server softwareV1.0Independent research anddevelopment2014SR036788Feb 20, 201150 years29.Core map network 3d map clientsoftwareV1.0Independent research anddevelopment2014SR036637Feb 22, 201150 years30.Core map 3d map network publishingplatform software V1.0Independent research anddevelopment2014SR036633Mar 10, 201150 years31.Core map 3d map network release pluginsystem software V1.0Independent research anddevelopment2014SR036622Mar 15, 201150 years32.Core map network 3d map smartphoneplatform software V1.0Independent research anddevelopment2014SR036638Apr 28, 201150 years33.Core map network GIS Shared mobileplatform software V1.0Independent research anddevelopment2014SR036634Oct 31, 201150 years34.Core map network GIS sharing platformsoftware V1.0Independent research anddevelopment2014SR036639Dec 16, 201150 yearsTrademarks:We have registered the following trademarks with the Trademark Office, State Administration for Industry and Commerce in the PRC:NoTrademarkClassification NumberValid PeriodRegistration Number1Y图形382010.04.212020.04.2067460692Y图形412010.09.072020.09.0667460673YRADIO文字352010.07.212020.07.2067334374YRADIO文字382010.04.21.2020.04.2067334385YRADIO文字412010.09.072020.09.0667334396LookLook图形382009.04.072019.04.0646660517LookLook图形422008.12.212018.12.2046660508YTV文字352010.07.212020.07.2067335799YTV文字382010.05.282020.05.27673357810YTV文字412010.09.072020.09.06673358111YTV文字422010.09.072020.09.06673358012YOUTV文字352010.07.212020.07.20673344013YOUTV文字382010.05.282020.05.27673344114xfeng文字352012.03.282022.03.27922914526NoTrademarkClassification NumberValid PeriodRegistration Number15xfeng文字382012.03.282022.03.27922916016xfeng文字412012.03.282022.03.27922919017xfeng文字422012.03.282022.03.27922922118中传视讯文字+图形422008.12.212018.12.20466604719中传视讯文字422008.12.212018.12.20466604820中传视讯文字382008.12.212018.12.20466604921新蜂文字382011.08.212021.08.20853890722新蜂文字422012.01.282022.01.27853907823新蜂.潮文字382011.08.212021.08.20853910424新蜂.潮文字422012.01.282022.01.27853914125新影力412014.08.282024.08.271228864326小人图形352014.08.282024.08.271228798527小人图形382014.08.282024.08.271228858028小人图形412014.08.282024.08.271228862929小人图形422014.08.282024.08.271228843530中传文字382014.08.282024.08.271228826731中传图形382014.08.282024.08.271228828932中童文字412014.08.072024.08.061221408533中童在线文字412014.08.072024.08.061221409234翠鸟文字382014.08.072014.08.061221405835翠鸟文字422014.08.072014.08.061221412536爱翠鸟文字382014.08.072024.08.061221406637爱翠鸟文字412014.08.072024.08.061221409638爱翠鸟文字422014.08.072024.08.061221412639翠鸟图形352014.08.072024.08.061221404040翠鸟图形382014.08.072024.08.061221407441翠鸟图形412014.08.072024.08.061221410042翠鸟图形422014.08.072024.08.061221413143信号小喇叭图形+CMEDIA412015.03.212025.03.201248043944LookLook图形382015.11.142025.11.131153342845LookLook图形422014.06.212024.06.201153372046LookLook文字382014.07.142024.07.131153406747LookLook文字422014.04.142024.04.131153422748L图形352014.02.282024.02.271153500249L图形382014.02.282024.02.271153507350L图形412014.02.282024.02.271153518151L图形422014.02.282024.02.271153526252箩筐图形412016.06.142026.06.131658022853箩筐图形422016.06.142026.06.131658022754箩筐文字422016.09.282026.09.271658024955箩筐文字412016.06.142026.06.131658025056箩筐文字352016.09.212026.09.201658025257箩筐文字92016.06.142026.06.131658025327NoTrademarkClassification NumberValid PeriodRegistration Number58箩筐图形382016.06.142026.06.131658022959箩筐图形352016.06.142026.06.131658023060箩筐图形92016.06.142026.06.131658023161微时光文字422016.09.282026.09.271658024762传游录屏文字92016.06.142026.06.131678214463传游录屏文字352016.06.142026.06.131678214364传游录屏文字382016.06.142026.06.131678214265传游录屏文字412016.06.142026.06.131678214166传游录屏文字422016.06.142026.06.131678214067录游器文字92016.06.142026.06.131678213568录游器文字352016.06.142026.06.131678213669录游器文字382016.06.142026.06.131678213770录游器文字412016.06.142026.06.131678213871录游器文字422016.06.142026.06.131678213972畅联TV文字412016.01.212026.01.201579246773畅联TV文字382016.01.212026.01.201579246874SuperEngine92016.01.212026.01.20812572275SuperEngine422016.01.212026.01.20812572876超擎9/422016.01.212026.01.201647320577SUPERENGINE9/422016.01.212026.01.2016473185*See below for an explanation of each classification number used in the table above.Classification No. 9: data processing apparatus, couplers (data processing equipment), computer software (recorded), monitors (computer programs), smartcards (integrated circuit cards), electrodynamic apparatus for the remote control of signals, alarms, and electric installations for the remote control of industrialoperations.Classification No. 35: auctioneering, sales promotion for others, marketing analysis, marketing research, importexport agencies, advisory services forbusiness management, business management for franchise, personnel management consultancy, relocation services for businesses, and systemization ofinformation into computer databases.Classification No. 38: Include services that enable at least sensory communication between two people. Such services include that allow one person to talkto another, send messages from one person to another, Make verbal or visual contact between one person and the other. This classification especially include theservice for broadcasting radio or television programs. Except for radio advertising services and telemarketing services.Classification No. 41: instruction services, teaching, education information, tuition, arranging and conducting of colloquiums, publication of electronicbooks and journals online, amusements, and vocational guidance.Classification No. 42: technical research, studies (technical project), computer software design, updating of computer software, recovery of computer data,computer systems analysis, installation of computer software, computer antivirus protection, and research and development for others. 28Business Certificates and QualificationsWe have obtained all necessary regulatory certifications to conduct our business in the PRC, including without limitation, the following: SoftwareEnterprise Recognition Certificate, Computer Information System Integration Qualification Certificate, Construction Enterprise Qualification Certificate, and SecurityTechnology & Protection Enterprise Certificate. We have also been properly certified as a hightech enterprise and have met the ISO 9001:2000 qualificationmanagement system.Legal ProceedingsAlthough we may, from time to time, be involved in litigation and claims arising out of our operations in the normal course of business, we do not believethat we are a party to any litigation that will have a material adverse impact on our financial condition or results of operations. To our knowledge, other than asdescribed below there are no material legal proceedings threatened against us. From time to time, we may be subject to various claims and legal actions arising in theordinary course of business. Following the consummation of the AEA, we became successor in interest to the legal proceedings described below.Litigation with Shanghai Fusheng Weier Intelligent Control Technology Co., Ltd.On January 22, 2016, Zhong Chuan Rui You and Shanghai Fusheng Weier Intelligent Control Technology Co., Ltd. (“Fusheng Weier”) signed a contract forequipment of $1,652,842 (RMB10,800,000). Since Zhong Chuan Rui You did not make the payments of $1,126,381 (RMB7,360,000) on the due dates, Fusheng Weierfiled a lawsuit against Zhong Chuan Rui You in Shanghai Xuhui District People's Court on October 8, 2016. On March 9, 2017, Xuhui District People's Court issuedthe verdict requiring Zhong Chuan Rui You to pay the overdue debts. In August 2017, C Media Limited made the payment of $512,075 (RMB3,346,000). Theremaining balance has been accrued in accounts payable. The payment schedule for the remaining balance is being negotiated by the two parties. On February 5,2018, a hearing was held adding Zhong Chuan Shi Xun as a defendant. The Group plans to settle the remaining balance within one year.Lawsuit with Gansu Jinlun Culture Media Co., Ltd.On August 22, 2014, Zhong Chuan Rui You and Gansu Jinlun Culture Media Co., Ltd. (“Gansu Jinlun”) signed a “Lanzhou Railway Bureau AirconditionedTrain WiFi Network System Advertising Operation Rights Agreement” for advertising on 72 trains of $1,467,880 (RMB9,604,633). Due to the dispute on theproject implementation, Zhong Chuan Rui You did not pay the advertising fee. On August 23, 2017, Gansu Jinlun filed a lawsuit with Gansu Intermediate People'sCourt. On December 19, 2017, Gansu Intermediate People's Court issued a verdict, ruling that Zhong Chuan Rui You settle the overdue advertising fee. Since only 18out of 72 trains have been installed with Wifi network system, Zhong Chuan Rui You disputed and appealed to the verdict. The next court trial date has not yet beendetermined.C Media and Gansu Jinlun are negotiating a potential settlement to resume the contract. According to the legal counsel, it is probable that the settlementwill amount to approximately $459,000 (RMB3,000,000); therefore, this amount has been accrued in accounts payable as at December 31, 2017.Litigation with Shenzhen Hua Xun Fang Zhou Technology Co., Ltd.On June 16, 2015, Zhong Chuan Rui You signed a cooperation agreement with Shenzhen Hua Xun Fang Zhou Technology Co., Ltd. (“Shenzhen Hua Xun”)and Xuesong Song, a major shareholder of C Media Limited. Pursuant to this agreement, Zhong Chuan Rui You procures equipment from Shenzhen Hua Xun.Xuesong Song acts as a joint liability guarantor for the entire debts of Zhong Chuan Rui You under this agreement. As Zhong Chuan Rui You did not make thepayments on the due dates, Shenzhen Hua Xun filed a lawsuit with Shenzhen Baoan District People's Court on May 31, 2016. On November 1, 2016, Zhong ChuanRui You, Xuesong Song and Shenzhen Hua Xun reached a settlement in Shenzhen Baoan District People's Court to settle $1,735,389 (RMB11,355,000) in fourinstalments. On December 30, 2017, the debt was assigned to C Media Limited.29C. ORGANIZATIONAL STRUCTUREThe following diagram illustrates our corporate structure and the place of formation and affiliation of each of our subsidiaries and affiliates as of September30, 2018.30The following diagram illustrates our corporate structure and the place of formation and affiliation of each of our subsidiaries and affiliates as of December31, 2017.Contractual Arrangements with Beijing Zhong Chuan Shi Xun Technology Limited’s Subsidiaries and Their Respective ShareholdersTo comply with the PRC legal restrictions on foreign ownership of companies that operate mobile application services, our subsidiaries operate in suchrestricted service areas in the PRC through certain PRC domestic companies, whose equity interests are held by certain management members or founders of the LKTechnology Ltd. Part of the registered capital of these PRC domestic companies was funded by certain management members or founders of LK Technology Ltd. LKTechnology Ltd., through its subsidiary Zhong Chuan Tian Xia Information and Technology (Shenzhen) Limited (the “WFOE”), has entered into an exclusivebusiness cooperation agreement with Beijing Zhong Chuan Shi Xun Technology Limited (“Zhong Chuan Shi Xun” or the “VIE”) the PRC domestic company, whichentitle the WFOE to receive a majority of profit of Zhong Chuan Shi Xun. In addition, Zhong Chuan Tian Xia Information and Technology (Shenzhen) Limited hasentered into certain agreements with those management members or founders, including equity interest pledge agreement of the equity interests held by thosemanagement members or founders and exclusive option agreement to acquire the equity interests in these companies when permitted by the PRC laws, rules andregulations. Details of the typical VIE structure of our significant consolidated VIE, primarily domestic companies associated with the operations such as ZhongChuan Shi Xun and its subsidiaries of Zhong Chuan Rui You, Huoerguosi Luokuang and Jiu Zhou Shi Dai, are set forth below: Exclusive Business Cooperation AgreementThe VIE has entered into an exclusive business services agreement with the WFOE, pursuant to which the WFOE provides exclusive business services tothe VIE. In exchange, the VIE pays a service fee to the WFOE which amounts to be no less than the 80% of the VIE’s aftertax profit, resulting in a transfer ofsubstantially all of the profits from the VIE to the WFOE.Exclusive Option AgreementThe VIE equity holders have granted the WFOE exclusive call options to purchase their equity interest in the VIE at an exercise price equal to the minimumprice as permitted by applicable PRC laws. The WFOE may nominate another entity or individual to purchase the equity interest, if applicable, under the call options.Each call option is exercisable subject to the condition that applicable PRC laws, rules and regulations do not prohibit completion of the transfer of the equityinterest pursuant to the call option. The VIE agrees not to distribute any dividends to the VIE equity holders without the approval of WFOE.31Equity Interest Pledge AgreementPursuant to the equity pledge agreement, the VIE equity holders have pledged all of their interests in the equity of the VIE as a continuing first prioritysecurity interest in favor of the WFOE to secure the performance of obligations by the VIEs and/or the equity holders under the exclusive business cooperationagreement. The WFOE is entitled to exercise its right to dispose of the VIE equity holders’ pledged interests in the equity of the VIE and has priority in receivingpayment by the application of proceeds from the auction or sale of such pledged interests, in the event of any breach or default under the exclusive businesscooperation agreement, if applicable. These equity pledge agreement remain in force until all the obligations under the exclusive business cooperation agreementhave been fulfilled.The exclusive business cooperation agreement and equity interest pledge agreement described above also enable the Company to receive substantially allof the economic benefits from the VIE by typically entitling the WFOE to all dividends and other distributions declared by the VIE and to any distributions orproceeds from the disposal by the VIE equity holders of their equity interests in the VIE.D. PROPERTY AND EQUIPMENTWe lease offices located at Lab 30 & Lab 32, SOHO 3Q, No 9, Guanghua Road, Chaoyang District, Beijing, which covers a floor space of 600 square meters.These leases expire at different times throughout 2018 and are renewable upon negotiation.ITEM 4A. UNRESOLVED STAFF COMMENTSNone.ITEM 5. OPERATING AND FINANCIAL REVIEW AND PROSPECTSA . OPERATING RESULTS.The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our consolidatedfinancial statements and the notes to those financial statements appearing elsewhere in this report. This discussion and analysis contains forwardlookingstatements that involve significant risks and uncertainties. As a result of many factors, such as our anticipated growth strategy, our plans to recruit moreemployees, our plans to invest in research and development to enhance our product or service lines, our future business development, results of operations andfinancial condition, expected changes in our net revenues and certain cost or expense items, our ability to attract and retain customers, trends and competitionin the enterprise mobile software application market, and the factors set forth elsewhere in this report, our actual results may differ materially from thoseanticipated in these forwardlooking statements. In light of those risks and uncertainties, there can be no assurance that the forwardlooking statementscontained in this report will in fact occur. You should not place undue reliance on the forwardlooking statements contained in this report.The forwardlooking statements speak only as of the date on which they are made, and, except to the extent required by U.S. federal securities laws, weundertake no obligation to update any forwardlooking statement to reflect events or circumstances after the date on which the statement is made or to reflectthe occurrence of unanticipated events. Further, the information about our intentions contained in this report is a statement of our intention as of the date of thisreport and is based upon, among other things, the existing regulatory environment, industry conditions, market conditions and prices and our assumptions as ofsuch date. We may change our intentions, at any time and without notice, based upon any changes in such factors, in our assumptions or otherwise.32Unless the context otherwise requires, all references to (i) “PRC” and “China” are to the People’s Republic of China; (ii) “U.S. dollar,” “$” and “US$”are to United States dollars; and (iii) “RMB”, “Yuan” and Renminbi are to the currency of the PRC or China.OverviewLuokung Technology was incorporated on October 27, 2009 under the laws of the British Virgin Islands. We are a holding company and conduct ouroperations through LK Technology Ltd., a British Virgin Islands limited liability company (“LK Technology”) and its whollyowned subsidiaries, MMB Limited andMobile Media (China) Limited and their respective subsidiaries and a contractuallycontrolled entity in the PRC named Beijing Zhong Chuan Shi Xun Technology,which hold the rights to deploy WiFi systems on about 700 trains in China, including 290 trains in which WiFi systems have already been installed and are inoperation. In May 2010, we consummated an initial public offering of our American Depository Shares, or ADSs, for gross proceeds of $16 million, and our ADSswere listed on the NASDAQ Capital Market under the ticker symbol “KONE”. Our ordinary shares are not currently listed on any trading market. Our AmericanDepository Shares (“ADSs”) were voluntarily delisted from the NASDAQ Capital Market on September 19, 2018. We have applied to NASDAQ for the listing of ourordinary shares on the NASDAQ Capital Market and received an approval for listing of Ordinary Shares on August 6, 2018, and as of the date of this transitionreport, that application and approval are currently under review.On August 17, 2018, we consummated an asset exchange transaction, pursuant to which we exchanged all issued and outstanding capital stock in TopskyInfoTech Holdings Pte Ltd., the parent of Softech, for the issued and outstanding capital stock of LK Technology (the “Asset Exchange”). In connection with theAsset Exchange, we changed our name on August 20, 2018, and on September 20, 2018, completed the issuance to the shareholders of C Media Limited, the formerparent of LK Technology, of (i) 185,412,599 of our ordinary shares, par value $0.01 per share and (ii) 1,000,000 of our preferred shares. Upon the consummation of theAsset Exchange, we ceased our previous business operations and became a company focused on the provision of WiFi and mobile application products for longdistance travelers in China.On August 25, 2018, LK Technology entered into a Stock Purchase Agreement (the “Agreement”) with the shareholders (“Shareholders”) of SuperengineHoldings Limited, a limited liability company organized under the laws of the British Virgin Islands (the “Superengine”), pursuant to which LK Technology acquiredall of the issued and outstanding capital stock of Superengine for an aggregate purchase price of US$60 million (the “Purchase Price”), which are paid by theissuance of our Ordinary Shares in an amount equal to the quotient of (x) the Purchase Price divided by (y) the average of the closing prices of the Ordinary Shareson the NASDAQ Capital Market over the 12 months period preceding July 31, 2018. We are a party to the Agreement in connection with the issuance of theOrdinary Shares and certain other limited purposes.Results of operations for the fiscal year ended December 31, 2017 compared to the fiscal year ended December 31, 2016.RevenueWe provide displaybased online advertising services to customers by integrating text description, image and video, and displaying the advertisements in aprominent position of LuoKuang Application. We recognize revenue in accordance with ASC 605, over the contractual term based on the agreements andconfirmation letters signed by both parties, commencing on the date the customer’s advertisement is displayed on our platform.For the year ended December 31, 2017, we had revenue of $26,082,417, as compared to revenue of $5,233,145 for the year ended December 31, 2016, anincrease of $20,849,272, or 398.4%, which was primarily due to the increase of our advertising clients.Cost of revenueOur cost of revenue primarily consists of depreciation, labor cost, WiFi equipment installation fees, data charges, annual payments to local railway bureau,other overhead costs.33Cost of revenue for the year ended December 31, 2017 was $5,547,779, representing a decrease of $767,725 or 12.2% as compared to $6,315,504 for the yearended December 31, 2016. The decrease was primarily attributable to the decrease in labor cost as a result of our cost control and a decrease in the number ofmaintenance staff. Additionally, data charges decreased as train passengers prefer using their mobile data, leading to a decrease in 3G and 4G data.Selling and marketing expenseOur selling and marketing expense mainly include promotional and marketing expenses and compensation for our sales and marketing personnel.Selling expense totaled $23,908,733 for the year ended December 31, 2017, as compared to $6,209,804 for the year ended December 31, 2016, an increase of$17,698,929 or 285.0%. The increase was primarily attributable to the increase in promotional and marketing activities conducted by the Company.General and administrative expenseOur general and administrative expenses consist primarily of salaries and benefits for our general and administrative personnel, rent, fees and expenses forlegal, accounting and other professional servicesGeneral and administrative expense totaled $2,451,249 for the year ended December 31, 2017, as compared to $2,108,854 for the year ended December 31,2016, an increase of $342,395 or 16.2%.Research and development expenses.Research and development expenses primarily consist of salaries and benefits for research and development personnel.Research and development expenses totaled $1,046,198 for the year ended December 31, 2017, as compared to $2,882,202 for the year ended December 31,2016, a decrease of $1,836,004 or 63.7%. The decrease was primarily attributable to the Company reduced its expenses in research and development temporarily asour products are quite stable at present.Loss from operationsAs a result of the factors described above, for the year ended December 31, 2017, loss from operations amounted to $6,871,542, as compared to loss fromoperations of $12,283,219 for the year ended December 31, 2016, a decrease of $5,411,677, or 44.1%.Other income/expenseOther income/expense mainly include interest income from bank deposits, foreign currency transaction gain, and loss from investment.Net lossAs a result of the factors described above, our net loss was $6,810,454 for the year ended December 31, 2017, compared to net loss of $13,049,031 for theyear ended December 31, 2016, a decrease of $6,238,577 or 47.8%.Foreign currency translation adjustmentOur reporting currency is the U.S. dollar. The functional currency of our parent company and subsidiaries of Merchant Supreme and Prime Cheer is the U.S.dollar and the functional currency of the Company’s subsidiaries incorporated in China is the Chinese Renminbi (“RMB”). The financial statements of oursubsidiaries incorporated in China are translated to U.S. dollars using period end rates of exchange for assets and liabilities, and average rates of exchange (for theperiod) for revenue, costs, and expenses. Net gains and losses resulting from foreign exchange transactions are included in the consolidated statements ofoperations and comprehensive loss. As a result of foreign currency translations, which are a noncash adjustment, we reported a foreign currency translation gain of$90,671 for the year ended December 31, 2017, as compared to a foreign currency translation loss of $387,375 for the year ended December 31, 2016. This noncashgain had the effect of increasing/decreasing our reported comprehensive income/loss.34Comprehensive lossAs a result of our foreign currency translation adjustment, we had comprehensive loss for the year ended December 31, 2017 of $6,719,783, compared tocomprehensive loss of $12,661,656 for the year ended December 31, 2016.B. LIQUIDITY AND CAPITAL RESOURCESThe information contained in “Item 5. Operating and Financial Review and Prospects – A. Operating Results – Liquidity and Capital Resources” isincorporated herein by reference.C. RESEARCH AND DEVELOPMENT, PATENTS AND LICENSES, ETC.The discussions of our research and development activities were contained in “Item 4. Information about our Company – B. Business Overview –Research and Development” and “Item 5. Operating and Financial Review and Prospects – A. Operating Results – Operating Expenses – Research and DevelopmentExpenses” are incorporated herein by reference. In the years ended December 31, 2017 and 2016, we spent $1,046,198 and $2,882,202, respectively, on research anddevelopment activities.D. TREND INFORMATION.Industry and Market OutlookChina has awarded licenses to mobile phone companies to provide the superfast 4G network to customers. The licenses, which are designed to give mobilephone users faster access to services, were granted by the government to China Mobile, China Unicom Hong Kong and China Telecom. Since the grants, ChinaMobile has offered 4G to subscribers from December 18, 2013. China Unicom and China Telecom, the country's other two major carriers, also offer 4G wireless. Thenumber of China Mobile 4G customers has exceeded 900 million by the end of October in 2017. The move greatly bolstered business for telecom equipment makersand a range of other companies.Under China’s 12th FiveYear Plan, a key priority is for China to transition from “Made in China” to “Designed in China.” In order to achieve this goal, thegovernment plans to heavily invest in science and technology education and R&D so as to further develop China’s intellectual property rights system and support“NextGeneration IT” as a Strategic Emerging Industry (SEI). Additionally, China plans to upgrade the technological capabilities of private and public services,including “triple play” services (the convergence of telecom, broadcasting and Internet networks), ecommerce, and egovernment and statistics systems.Furthermore, the government plans to invest in R&D of the "Internet of things" and cloud computing, and develop digital and virtual technologies.E. OFFBALANCE SHEET ARRANGEMENTSWe have not entered into any financial guarantees or other commitments to guarantee the payment obligations of any third parties. We have not enteredinto any derivative contracts that are indexed to our shares and classified as shareholder’s equity, or that are not reflected in our consolidated financial statements.Furthermore, except for the mortgage referenced above, we do not have any retained or contingent interest in assets transferred to an unconsolidated entity thatserves as credit, liquidity or market risk support to such entity. We do not have any variable interest in any unconsolidated entity that provides financing, liquidity,market risk or credit support to us or engages in leasing, hedging or research and development services with us.35F. TABULAR DISCLOSURE OF CONTRACTUAL OBLIGATIONSAs of December 31, 2017, we did not have any contractual obligations required to be disclosed in this Item 5.F. ITEM 6. DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES.A. DIRECTORS AND SENIOR MANAGEMENT.Executive Officers and DirectorsThe following table sets forth the names and ages as of the date of this transition report of each of our executive officers and directors:NameAgePositionXuesong Song50Chief Executive Officer, Chairman and DirectorDongpu Zhang50PresidentJie Yu34Chief Financial OfficerKegang Peng46Vice President and DirectorChuang Tao51DirectorDennis Galgano (1)(2)69Director (Independent)Jin Shi (1)(2)49Director (Independent)Jiming Ha (1)(3)56Director (Independent)Zhihao Xu (3)42Director (Independent)(1)Member of the Audit Committee.(2)Member of the Compensation Committee.(3)Member of the Nominating and Corporate Governance Committee.Set forth below is biographical information concerning our executive officers and directors.Xuesong Song is a cofounder of C Media Limited and served as its chairman of the board of directors and chief executive officer from 2012 until theconsummation of the AEA. From February 2014 through April 2017, Mr. Song served as a director of Seven Stars Cloud Group, Inc. (NASDAQ: SSC) and fromJanuary 2013 through February 2015, Mr. Song served as a director of Pingtan Marine Enterprise Ltd. (NASDAQ: PME). From May 2006 through January 2009, Mr.Song served as the Chairman of the Board of ChinaGrowth North Acquisition Corporation, a special purpose acquisition company, which acquired UIB GroupLimited in January 2009, in which he remains a director. Mr. Song has been a principal of Chum Capital Group Limited since August 2001, a merchant banking firmthat invests in growth Chinese companies and advises them in financings, mergers & acquisitions and restructurings, and chief executive officer of Beijing ChumInvestment Co., Ltd. since December 2001. Mr. Song has been a director of Mobile Vision Communication Ltd. since July 2004. Mr. Song received a Master’s ofBusiness Administration degree from Oklahoma City/Tianjin Program.Dongpu Zhang was appointed as the President of the Company effective on August 25, 2018. Mr. Dongpu Zhang has served as the General Manager ofSuperEngine Graphics Software Technology Development (Suzhou) Co., Ltd. (“SuperEngine Suzou”) and the Chief Executive Officer of SuperEngine HoldingLimited since September 2016. From February, 2014 to August, 2016, Mr. Zhang served as vice president of Industrial Development Group under China Fortune LandDevelopment Co., Ltd. From March, 2009 to February, 2014, Mr. Zhang served as the vice president of Aerospace Science and Technology Holding Group Co., Ltd.Mr. Zhang receive his Master Degree of Computer Science from Harbin Institute of Technology in 1994 and his Bachelor Degree of information system fromChangsha Institute of technology in 1991.Jie Yu served as the chief financial officer of C Media Limited from January 2018 until the consummation of the asset exchange transactions. From June 2016to January 2018, Mr. Yu served as chief financial officer and secretary of the board of directors of MTI Environment Group Limited. Prior to joining MTI, Mr. Yuserved as the senior manager at DA HUA CPA from November 2012 to May 2016. Previously, Mr. Yu served as the manager at Crowe Horwath (Hong Kong) CPA.Mr. Yu holds a bachelor degree in accounting and finance from University of Auckland and postgraduate diploma in accounting from University of Auckland.36Kegang Peng served as the Vice Chairman of the board of directors C Media Limited from October 2014 to the consummation of the asset exchangetransactions, and is now a member of the Company’s board of directors. Previously, from 2012 to 2014, Mr. Peng was chairman of the board and founder of JiangsuSuqian Jinghaiboyuan Information and Technology Co., Ltd. Mr. Peng studied at Beijing University of Aeronautics and Astronautics majoring computer andapplication.20F 1 f20f2017_luokungtech.htm AMENDMENT NO. 1 TO FORM 20FUNITED STATESSECURITIES AND EXCHANGE COMMISSIONWASHINGTON, D.C. 20549FORM 20F☐ REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934OR☐ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934For the Fiscal year ended _____________OR☒ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934For the transition period from October 1, 2017 to December 31, 2017☐ SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934Date of event requiring this shell company report Commission file number: 00134738Luokung Technology Corp.(Exact name of Registrant as specified in its charter)Not applicable(Translation of Registrant’s name into English)British Virgin IslandsLAB 32, SOHO 3Q, No 9, Guanghua Road, Chaoyang District, BeijingPeople’s Republic of China, 100020(Jurisdiction of incorporation or organization)(Address of principal executive offices)Mr. Muqiao GengLAB32, SOHO 3Q, No 9, Guanghua Road, Chaoyang District, BeijingPeople’s Republic of China 100020Tel: (86) 1085866721(Name, telephone, Email and/or facsimile number and address of company contact person)Securities registered or to be registered pursuant to Section 12(b) of the Act:Title of each className of each exchange on which registeredOrdinary shares, par value $0.01 per shareNonePreferred shares, par value $0.01 per shareNoneSecurities registered or to be registered pursuant to Section 12(g) of the Act:none(Title of Class)Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act:none(Title of Class)Indicate the number of outstanding shares of each of the issuer’s classes of capital or common stock as of the close of the period covered by the transitionreport. 187,097,599 Ordinary Shares, including 186,383,224 Ordinary Shares represented by 714,375 American Depositary Shares, and 1,000,000 Preferred Sharesoutstanding as of September 20, 2018.Indicate by check mark if the registrant is a wellknown seasoned issuer, as defined in Rule 405 of the Securities Act. ☐ Yes ☒ NoIf this report is an annual or transition report, indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of theSecurities Exchange Act of 1934. ☐ Yes ☒ NoIndicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirementsfor the past 90 days. ☒ Yes ☐ NoIndicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File requiredto be submitted and posted pursuant to Rule 405 of Regulation ST (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that theregistrant was required to submit and post such files). ☒ Yes ☐ NoIndicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a nonaccelerated filer. See definition of “accelerated filer andlarge accelerated filer” in Rule 12b2 of the Exchange Act. (Check one):Large accelerated filer ☐ Accelerated filer ☐ Nonaccelerated filer ☒Indicate by check mark which basis of accounting the registrant has used to prepare the financial statements included in this filing.U.S. GAAP ☒International Financial Reporting Standards as issuedby the International Accounting Standards Board ☐Other ☐If “Other” has been checked in response to the previous question, indicate by check mark which financial statement item the registrant has elected tofollow. Item 17 ☐ Item 18 ☐If this is an transition report, indicate by check mark whether the registrant is a shell company (as defined in Rule 12b2 of the ExchangeAct). ☐ Yes ☒ NoExplanatory NoteLuokung Technology Corp. (the “Company”) is filing this transition report on Form 20F (“Transition Report”) in connection with the completion of theexchange of certain of its assets for substantially all of the assets of C Media Limited (“C Media”) pursuant to that Asset Exchange Agreement, dated January 25,2018 (the “Original AEA”), as supplemented by the Addendum to Asset Exchange Agreement, dated October 3, 2018 (the “Addendum” and together with theOriginal AEA, the “AEA”). Following the consummation of the AEA, on October 4, 2018, the Company changed its fiscal year end from September 30 to the fiscalyear end used by C Media, December 31. This Transition Report covers the threemonth period from Octorber 1, 2017 to December 31, 2017, and the fiscal yearsdescribed herein.In this transition report:●References to the “Company”, “we”, “our” and “us” are to Luokung Technology Corp. and its consolidated subsidiaries and variable interestentity, except as the context otherwise requires;●This transition report on Form 20F covers the threemonth period from October 1, 2017 through December 31, 2017 (the “Transition Period”) andreflects our financial results thereof. Prior to this transition report on Form 20F, our two most recent annual reports on Form 20F cover the fiscalyears ended September 30, 2017 and September 30, 2016, respectively, and reflect financial results for the respective twelvemonth periods fromOctober 1 to September 30. Unless otherwise noted, all references to years are to the calendar year from January 1 to December 31 and referencesto our fiscal year or years are to the fiscal year or years which, prior to the Transition Period, ended September 30, while from and after theTransition Period, ended December 31;●References to an “ADS” are to an American Depositary Share, each of which represents one of our Ordinary Shares with a par value of $.01 pershare.Special Note Regarding Forwardlooking StatementsThis transition report contains forwardlooking statements that involve risks and uncertainties. These statements involve known and unknown risks,uncertainties and other factors that may cause our actual results, performance or achievements to be materially different from those expressed or implied by theforwardlooking statements.You can identify these forwardlooking statements by words or phrases such as “may,” “will,” “expect,” “anticipate,” “aim,” “estimate,” “intend,” “plan,”“believe,” “likely to” or other similar expressions. We have based these forwardlooking statements largely on our current expectations and projections about futureevents and financial trends that we believe may affect our financial condition, results of operations, business strategy and financial needs. You should not placeundue reliance on these forwardlooking statements, which apply only as of the date of this transition report. These forwardlooking statements include:●our future business development, results of operations and financial condition;●expected changes in our net revenues and certain cost or expense items;●our ability to attract and retain customers; and●trends and competition in the enterprise mobile software application market.You should read this transition report thoroughly with the understanding that our actual future results may be materially different from, and/or worse, thanwhat we expect. We qualify all of our forwardlooking statements by these cautionary statements. Other sections of this transition report include additional factorswhich could adversely impact our business and financial performance. Moreover, we operate in an evolving environment. New risk factors and uncertainties emergefrom time to time and it is not possible for our management to predict all risk factors and uncertainties, nor can we assess the impact of all factors on our business orthe extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forwardlooking statements.This transition report also contains estimates, projections and statistical data related to the market for the provision of WiFi and mobile applications inChina. This market data, including data from IDC, a leading provider of market data and intelligence, speaks as of the date it was published and includes projectionsthat are based on a number of assumptions and are not representations of fact. The market for the provision of WiFi and mobile applications in China may not growat the rates projected by the market data, or at all. The failure of the market to grow at the projected rates may materially and adversely affect our business and themarket price of our ADSs. In addition, the rapidly changing nature of the market for the provision of WiFi and mobile applications subjects any projections orestimates relating to the growth prospects or future condition of our market to significant uncertainties. If any one or more of the assumptions underlying the marketdata proves to be incorrect, actual results may differ from the projections based on these assumptions.You should not rely upon forwardlooking statements as predictions of future events. We undertake no obligation to update or revise any forwardlookingstatements, whether as a result of new information, future events or otherwise.TABLE OF CONTENTSPart IItem 1.Identity of Directors, Senior Management and Advisers.1Item 2.Offer Statistics and Expected Timetable.1Item 3.Key Information.1A.Selected Financial Data.1B.Capitalization and Indebtedness.3C.Reasons for the Offer and Use of Proceeds.3D.Risk Factors.3Item 4.Information on the Company.19A.History and Development of the Company.19B.Business Overview.20C.Organizational Structure.30D.Property, Plants and Equipment.32Item 4A.Unresolved Staff Comments.32Item 5.Operating and Financial Review and Prospects.32A.Operating Results.32B.Liquidity and Capital Resources.35C.Research and Development, Patents and Licenses, etc.35D.Trend Information.35E.Offbalance Sheet Arrangements.35F.Tabular Disclosure of Contractual Obligations.36Item 6.Directors, Senior Management and Employees.36A.Directors and Senior Management.36B.Compensation.37C.Board Practices.40D.Employees.43E.Share Ownership.43Item 7.Major Shareholders and Related Party Transactions.44A.Major Shareholders.44B.Related Party Transactions.45C.Interests of Experts and Counsel.45Item 8.Financial Information.45A.Consolidated Statements and Other Financial Information.45B.Significant Changes.46Item 9.The Offer and Listing.46A.Offer and Listing Details.46B.Plan of Distribution.47C.Markets.47D.Selling shareholders.48E.Dilution.48F.Expenses of the issue.48Item 10.Additional Information.48A.Share Capital.48B.Memorandum and Articles of Association.48C.Material Contracts.53D.Exchange Controls.54E.Taxation.61F.Dividends and Paying Agents.67G.Statement by Experts.67H.Documents on Display.67I.Subsidiary Information.68Item 11.Quantitative and Qualitative Disclosures about Market Risk.68Item 12.Description of Securities Other than Equity Securities.69A.Debt Securities.69B.Warrants and Rights.69C.Other Securities.69D.American Depositary Shares.69iPart IIItem 13.Defaults, Dividend Arrearages and Delinquencies.71Item 14.Material Modifications to the Rights of Security Holders and Use of Proceeds.71Item 15.Controls and Procedures.71Item 16.[Reserved.]72Item 16A.Audit Committee Financial Expert.72Item 16B.Code of Ethics.73Item 16C.Principal Accountant Fees and Services.73Item 16D.Exemptions from the Listing Standards for Audit Committees.73Item 16E.Purchases of Equity Securities by the Issuer and Affiliated Purchasers.73Item 16F.Change in Registrant’s Certifying Accountant.73Item 16G.Corporate Governance.73Item 16H.Mine Safety Disclosure.73Part IIIItem 17.Financial Statements.74Item 18.Financial Statements.74Item 19.Exhibits.74Index to Consolidated Financial StatementsF1iiPART IITEM 1. IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS.The directors of Luokung Technology Corp. are Xuesong Song, Kegang Peng, Dennis Galgano, Jin Shi, Jiming Ha, Zhihao Xu and Chuang Tao. Thebusiness address for our directors is LAB 32, SOHO 3Q, No 9, Guanghua Road, Chaoyang District, Beijing, People’s Republic of China.Moore Stephens CPA Limited has served as our auditor since October 5, 2018, and is located at 801806 Silvercord Tower 1, 30 Canton road, Tsimshatsui,Kowloon, Hong Kong. BDO China Shun Lun Pan Certified Public Accountants LLP served as our auditors for the last three years, and are located at 4F, No. 61Nanjing Road, Shanghai, People’s Republic of China.Garvey Schubert Barer, P.C., serves as our legal counsel in the United States, and is located at Flour Mill Building, 1000 Potomac Street NW, Suite 200,Washington, D.C., 200073501.Conyers Dill & Pearlman serves as our legal counsel with regard to the laws of the British Virgin Islands, and is located at 29th Floor, One Exchange Square,8 Connaught Place, Central, Hong Kong.ITEM 2. OFFER STATISTICS AND EXPECTED TIMETABLE.Not applicable.ITEM 3. KEY INFORMATION.A. SELECTED FINANCIAL DATA.Luokung Technology Corp. and its consolidated subsidiaries (“Luokung Technology”, “we”, “us”, or “the Company”) consummated an asset exchangeagreement pursuant to which we exchanged our existing assets with those of C Media Limited (the “Asset Exchange”) on August 17, 2018, and we changed ourname from Kingtone Wirelessinfo Solution Holding Ltd. to our current name on August 20, 2018. On October 4, 2018, in connection with the consummation of the Asset Exchange, we changed our fiscal year end from September 30 to December 31.1The selected financial data for the fiscal years ended December 31 2017 and 2016 have been derived from our audited consolidated and combined financialstatements. The selected consolidated and combined financial data should be read in conjunction with our audited financial statements and the accompanying notesand “Item 5 – Operating and Financial Review and Prospects.” Our consolidated and combined financial statements are prepared and presented in accordance withUnited States generally accepted accounting principles, or U.S. GAAP. Our historical results do not necessarily indicate our results expected for any future periods.You should not view our historical results as an indicator of our future performance.LK TECHNOLOGY LTD. AND SUBSIDIARIESSELECTED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS(IN U.S. DOLLARS)For the years ended December 31,20172016Revenues$26,082,417$5,233,145Less: Cost of revenues5,547,7796,315,504Less: Operating expenses:Selling and marketing23,908,7336,209,804General and administrative2,451,2492,108,854Research and development1,046,1982,882,202Total operating expenses27,406,18011,200,860Loss from operations(6,871,542)(12,283,219)Other income (expense):Interest expense(26,611)(4,412)Foreign exchange gains(losses)350,679(298,257)Loss from investment(428,571)Other income (expense), net(262,980)(34,572)Total other income (expense), net61,088(765,812)Loss before income taxes(6,810,454)(13,049,031)Income taxesNet loss$(6,810,454)$(13,049,031)Other comprehensive income:Foreign currency translation adjustment90,671387,375Total comprehensive loss$(6,719,783)$(12,661,656)2LK TECHNOLOGY LTD. AND SUBSIDIARIESSELECTED CONSOLIDATED BALANCE SHEETS(IN U.S. DOLLARS)As of December 31,20172016Accounts receivable, net of allowance for doubtful accounts9,729,6251,865,836Amounts due from related parties11,760,692Property and equipment, net5,044,8727,771,027Goodwill7,239,9367,239,936TOTAL ASSETS37,582,85821,114,832Accounts payable8,784,5186,446,584Accrued liabilities and other payables12,962,91211,329,613Total liabilities25,311,11333,905,520Total Shareholder’s Equity (Deficit)12,271,745(12,790,688)TOTAL LIABILITIES AND SHAREHOLDER’S EQUITY (DEFICIT)37,582,85821,114,832B. CAPITALIZATION AND INDEBTEDNESS.Not applicable.C. REASONS FOR THE OFFER AND USE OF PROCEEDS.Not applicable.D. RISK FACTORS.An investment in our ADSs and ordinary shares involves a high degree of risk. You should carefully consider the risks and uncertainties described belowtogether with all other information contained in this transition report, including the matters discussed under “Special Note Regarding ForwardLooking Statements,”before you decide to invest in our ADSs or ordinary shares. You should pay particular attention to the fact that we are a holding company with substantialoperations in China and are subject to legal and regulatory environments that in many respects differ from those of the United States. If any of the following risks, orany other risks and uncertainties that are not presently foreseeable to us, actually occur, our business, financial condition, results of operations, liquidity and ourfuture growth prospects would be materially and adversely affected. You should also consider all other information contained in this transition report beforedeciding to invest in our ADSs or ordinary shares.Risks Related to Our Company and Our IndustryThe Company had incurred negative cash flows from operating activities and net losses as of December 31, 2017. These matters raise substantial doubt aboutthe Company’s ability to continue as a going concern.The Company’s consolidated financial statements are prepared using generally accepted accounting principles in the United States of America applicableto a going concern, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. As of and for the year endedDecember 31, 2017, the Company had incurred significant operating losses and working capital deficit. The ability of the Company to continue as a going concern isdependent on the Company obtaining adequate capital to fund operating losses until it becomes profitable. If the Company is unable to obtain adequate capital, itcould be forced to cease operations. The accompanying consolidated financial statements do not include any adjustments that might be necessary if the Companyis unable to continue as a going concern.3We may undertake acquisitions, investments, joint ventures or other strategic alliances, which could have a material adverse effect on our ability to manageour business. In addition, such undertakings may not be successful.Our strategy includes plans to grow both organically and through acquisitions, participation in joint ventures or other strategic alliances. Joint venturesand strategic alliances may expose us to new operational, regulatory and market risks, as well as risks associated with additional capital requirements. We may not beable, however, to identify suitable future acquisition candidates or alliance partners. Even if we identify suitable candidates or partners, we may be unable tocomplete an acquisition or alliance on terms commercially acceptable to us. If we fail to identify appropriate candidates or partners, or complete desired acquisitions,we may not be able to implement our strategies effectively or efficiently. In addition, our ability to successfully integrate acquired companies and their operations may be adversely affected by several factors. These factorsinclude:1.diversion of management’s attention;2.difficulties in retaining customers of the acquired companies;3.difficulties in retaining personnel of the acquired companies;4.entry into unfamiliar markets;5.unanticipated problems or legal liabilities; and6.tax and accounting issues.If we fail to integrate acquired companies efficiently, our earnings, revenue growth and business could be negatively affected.Due to intense competition for highlyskilled personnel, we may fail to attract and retain enough sufficiently trained employees to support our operations; ourability to bid for and obtain new projects may be negatively affected and our revenues could decline as a result.The IT industry relies on skilled employees, and our success depends to a significant extent on our ability to attract, hire, train and retain qualifiedemployees. There is significant competition in China for professionals with the skills necessary to develop the products and perform the services we offer to ourcustomers. Increased competition for these professionals, in the mobile application design area or otherwise, could have an adverse effect on us if we experiencesignificant increase in the attrition rate among employees with specialized skills, which could decrease our operating efficiency and productivity and could lead to adecline in demand for our services.In addition, our ability to serve existing customers and business partners and obtain new business will depend, in large part, on our ability to attract, trainand retain skilled personnel that enable us to keep pace with growing demands for wifi connectivity and mobile applications, evolving industry standards andchanging customer preferences. Our failure to attract, train and retain personnel with the qualifications necessary to fulfill the needs of our existing and futurecustomers or to assimilate new employees successfully could have a material adverse effect on our business, financial condition and results of operations. Ourfailure to retain our key personnel on business development or find suitable replacements of the key personnel upon their departure may lead to shrinking newimplementation projects, which could materially adversely affect our business.4Our business depends substantially on the continuing efforts of our senior executives and other key personnel, and our business may be severely disrupted if welose their services.Our future success heavily depends upon the continued services of our senior executives and other key employees, particularly since we recentlyappointed a new chairman. We are reliant on the services of Mr. Xuesong Song, our chairman, chief executive officer and member of our board of directors. If one ormore of our senior executives or key employees is unable or unwilling to continue in his or her present position, we may not be able to replace such employee easily,or at all, we may incur additional expenses to recruit, train and retain replacement personnel, our business may be severely disrupted, and our financial condition andresults of operations may be materially adversely affected.Our business could suffer if our executives and directors compete against us and our noncompetition agreements with them cannot be enforced.If any of our senior executives or key employees joins a competitor or forms a competing company, we may lose customers, knowhow and keyprofessionals and staff members to them. Also, if any of our business development managers who keep a close relationship with our customers and businesspartners joins a competitor or forms a competing company, we may lose customers, and our revenues may be materially adversely affected. Most of our executiveshave entered, or will soon enter, into employment agreements with us that contain or will contain noncompetition provisions. However, if any dispute arisesbetween our executive officers and us, such noncompetition provisions may not be enforceable, especially in China, where all of these executive officers and keyemployees reside, in light of the uncertainties with China’s legal system. See “Risk Factors — Risks Related to Doing Business in China — Uncertainties withrespect to the PRC legal system could adversely affect us.”Our computer networks may be vulnerable to security risks that could disrupt our services and adversely affect our results of operations.Our computer networks may be vulnerable to unauthorized access, computer hackers, computer viruses and other security problems caused byunauthorized access to, or improper use of, systems by third parties or employees. A hacker who circumvents security measures could misappropriate proprietaryinformation or cause interruptions or malfunctions in operations. Computer attacks or disruptions may jeopardize the security of information stored in andtransmitted through computer systems and mobile devices of our customers. Actual or perceived concerns that our systems may be vulnerable to such attacks ordisruptions may deter customers from using our services. As a result, we may be required to expend significant resources to protect against the threat of thesesecurity breaches or to alleviate problems caused by these breaches, which could adversely affect our results of operations.If we do not continually enhance our solutions and service offerings, we may have difficulty in retaining existing customers and attracting new customers.We believe that our future success will depend, to a significant extent, upon our ability to enhance our existing applications and platform, and to introducenew features to meet the preferences and requirements of our customers in a rapidly developing and evolving market. Unexpected technical, operational, distributionor other problems could delay or prevent the introduction of one or more of these products or services, or any products or services that we may plan to introduce inthe future. Our present or future products may not satisfy the evolving preferences and tastes of our customers, and these solutions and services may not achieveanticipated market acceptance or generate incremental revenue. If we are unable to anticipate or respond adequately to the need for service or productenhancements due to resource, technological or other constraints, our business, financial condition and results of operations could be materially and adverselyaffected.5If we are unable to develop competitive new products and service offerings our future results of operations could be adversely affected.Our future revenue stream depends to a large degree on our ability to utilize our technology in a way that will allow us to offer new types of mobileapplications and services to a broader customer base. We will be required to make investments in research and development in order to continually develop newsoftware applications and related service offerings, enhance our existing platform, mobile applications and related service offerings and achieve market acceptanceof our mobile applications and service offerings. We may incur problems in the future in innovating and introducing new mobile applications and service offerings.Our developmentstage mobile applications may not be successfully completed or, if developed, may not achieve significant customer acceptance. If we are unableto successfully define, develop and introduce competitive new mobile applications, and enhance existing mobile applications, our future results of operations wouldbe adversely affected. The timely availability of new applications and their acceptance by customers are important to our future success. A delay in the developmentof new applications could have a significant impact on its results of operations.Changes in technology could adversely affect our business by increasing our costs, reducing our profit margins and causing a decline in our competitiveness.China’s wireless telecom industry, in which we operate, is characterized by rapidly changing technology, evolving industry standards, frequentintroductions of new services and solutions and enhancements as well as changing customer demands. New solutions and new technologies often render existingsolutions and services obsolete, excessively costly or otherwise unmarketable. As a result, our success depends on our ability to adapt to the latest technologicalprogress, such as the 5G standard and technologies, and to develop or acquire and integrate new technologies into our platform, mobile applications and relatedservices. Advances in technology also require us to commit substantial resources to developing or acquiring and then deploying new technologies for use in ouroperations. We must continuously train personnel in new technologies and in how to integrate existing hardware and software systems with these newtechnologies. We may not be able to adapt quickly to new technologies or commit sufficient resources to compete successfully against existing or new competitorsin bringing to market solutions and services that incorporate these new technologies. We may incur problems in the future in innovating and introducing new mobileapplications and service offerings. Our development of new mobile applications and platform enhancements may not be successfully completed or, if developed,may not achieve significant customer acceptance. If we fail to adapt to changes in technologies and compete successfully against established or new competitors,our business, financial condition and results of operations could be adversely affected.Problems with the quality or performance of our hardware, software or other systems may cause delays in the introduction of new solutions or result in the lossof customers and revenues, which could have a material and adverse effect on our business, financial condition and results of operations.Our hardware and software systems are complex and may contain defects, errors or bugs when first introduced to the market or to a particular customer, oras new versions are released. Because we cannot test for all possible scenarios, our systems may contain errors that are not discovered until after they have beeninstalled or implemented, and we may not be able to timely correct these problems. These defects, errors or bugs could interrupt or delay the completion of projectsor sales to our customers. In addition, our reputation may be damaged and we may fail to acquire new projects from existing customers or new customers. Errors mayoccur when we provide systems integration and maintenance services. Even in cases where we have agreements with our customers that contain provisionsdesigned to limit our exposure to potential claims and liabilities arising from customer problems, these provisions may not effectively protect us against such claimsin all cases and in all jurisdictions. In addition, as a result of business and other considerations, we may undertake to compensate our customers for damages arisingfrom the use of our solutions, even if our liability is limited by these provisions. Moreover, claims and liabilities arising from customer problems could also result inadverse publicity and materially and adversely affect our business, results of operations and financial condition. We currently do not carry any product or serviceliability insurance and any imposition of liability on us may materially and adversely affect our business and increase our costs, resulting in reduced revenues andprofitability.Our products may contain undetected software defects, which could negatively affect our revenues.Our software products are complex and may contain undetected defects. Although we test our products, it is possible that errors may be found or occur inour new or existing products after we have commenced commercial shipment of those products. Defects, whether actual or perceived, could result in adversepublicity, loss of revenues, product returns, a delay in market acceptance of our products, loss of competitive position or claims against us by customers. Any suchproblems could be costly to remedy and could cause interruptions, delays, or cessation of our product sales, which could cause us to lose existing or prospectivecustomers and could negatively affect our results of operations.6We may be subject to infringement, misappropriation and indemnity claims in the future, which may cause us to incur significant expenses, pay substantialdamages and be prevented from providing our services or technologies.Our success depends, in part, on our ability to carry out our business without infringing the intellectual property rights of third parties. Patent andcopyright law covering softwarerelated technologies is evolving rapidly and is subject to a great deal of uncertainty. Our selfdeveloped or licensed technologies,processes or methods may be covered by thirdparty patents or copyrights, either now existing or to be issued in the future. Any potential litigation may cause us toincur significant expenses. Thirdparty claims, if successfully asserted against us may cause us to pay substantial damages, seek licenses from third parties, payongoing royalties, redesign our services or technologies, or prevent us from providing services or technologies subject to these claims. Even if we were to prevail,any litigation would likely be costly and timeconsuming and divert the attention of our management and key personnel from our business operations.Our failure to protect our intellectual property rights may undermine our competitive position, and subject us to costly litigation to protect our intellectualproperty rights.Any misappropriation of our technology or the development of competitive technology could seriously harm our business. We regard a substantial portionof our hardware and software systems as proprietary and rely on statutory copyright, trademark, patent, trade secret laws, customer license agreements, employeeand thirdparty nondisclosure agreements and other methods to protect our proprietary rights. Nevertheless, these resources afford only limited protection and theactions we take to protect our intellectual property rights may not be adequate. In particular, third parties may infringe or misappropriate our proprietarytechnologies or other intellectual property rights, which could have a material adverse effect on our business, financial condition and results of operations. Inaddition, intellectual property rights and confidentiality protection in China may not be as effective as in the United States, and policing unauthorized use ofproprietary technology can be difficult and expensive. Further, litigation may be necessary to enforce our intellectual property rights, protect our trade secrets ordetermine the validity and scope of the proprietary rights of others. The outcome of any such litigation may not be in our favor. Any such litigation may be costlyand may divert management attention, as well as our other resources, away from our business. An adverse determination in any such litigation will impair ourintellectual property rights and may harm our business, prospects and reputation. In addition, we have no insurance coverage against litigation costs and wouldhave to bear all litigation costs in excess of the amount recoverable from other parties. The occurrence of any of the foregoing could have a material adverse effecton our business, financial condition and results of operations. Our solutions incorporate a portion of, and work in conjunction with, thirdparty hardware and software solutions. If these thirdparty hardware or softwaresolutions are not available to us at reasonable costs, or at all, our results of operations could be adversely impacted.Although our hardware and software systems and mobile applications primarily rely on our own core technologies, some elements of our systemsincorporate a small portion of thirdparty hardware and software solutions. If any third party were to discontinue making their intellectual property available to us orour customers on a timely basis, or increase materially the cost of their licensing such intellectual property, or if our systems or applications failed to properlyfunction or interoperate with replacement intellectual property, we may need to incur costs in finding replacement thirdparty solutions and/or redesigning oursystems or applications to replace or function with or on replacement thirdparty proprietary technology. Replacement technology may not be available on termsacceptable to us or at all, and we may be unable to develop alternative solutions or redesign our systems or applications on a timely basis or at a reasonable cost. Ifany of these were to occur, our results of operations could be adversely impacted.7Our ability to sell our products is highly dependent on the quality of our service and support offerings, and our failure to offer high quality service could have amaterial adverse effect on our ability to market and sell our products.Our customers depend upon our customer service and support staff to resolve issues relating to our products. Highquality support services are critical forthe successful marketing and sale of our products. If we fail to provide highquality support on an ongoing basis, our customers may react negatively and we maybe materially and adversely affected in our ability to sell additional products to these customers. This could also damage our reputation and prospects with potentialcustomers. Our failure to maintain highquality support services could have a material and adverse effect on our business, results of operations and financialcondition.Weaknesses in our internal controls over financial reporting or disclosure controls and procedures may have a material adverse effect on our business, theprice of our ordinary shares, operating results and financial condition.We are required to establish and maintain appropriate internal controls over financial reporting and disclosure controls and procedures. Pursuant to Section404 of the SarbanesOxley Act of 2002 and the related rules adopted by the Securities and Exchange Commission, every public company is required to include amanagement report on its internal controls over financial reporting in its transition report, which contains management’s assessment of the effectiveness of thecompany’s internal controls over financial reporting. This requirement first applied to our annual report on Form 20F for the fiscal year ended on September 30,2011. In connection with our assessments of our disclosure controls and procedures and internal controls over financial reporting, management concluded that as ofSeptember 30, 2018, our disclosure controls and procedures and our internal controls over financial reporting were not effective due to lack of U.S. generallyaccepted accounting principles (“U.S. GAAP”) expertise in our current accounting team. Please refer to the discussion under Item 15, “Controls and Procedures” forfurther discussion of our material weakness as of December 31, 2017. Should we be unable to remediate the material weakness promptly and effectively, suchweakness could harm our operating results, result in a material misstatement of our financial statements, cause us to fail to meet our financial reporting obligations orprevent us from providing reliable and accurate financial reports or avoiding or detecting fraud. This, in turn, could result in a loss of investor confidence in theaccuracy and completeness of our financial reports, which could have an adverse effect on the trading price of our ordinary shares. Any litigation or otherproceeding or adverse publicity relating to the material weaknesses could have a material adverse effect on our business and operating results. We have very limited insurance coverage which could expose us to significant costs and business disruption.We do not maintain any insurance coverage for our leased properties. Should any natural catastrophes such as earthquakes, floods, typhoons or any actsof terrorism occur in Beijing, China, where our head office is located and most of our employees are based, or elsewhere in China, we might suffer not onlysignificant property damages, but also loss of revenues due to interruptions in our business operations, which could have a material adverse effect on our business,operating results or financial condition.The insurance industry in China is still at an early stage of development. Insurance companies in China offer limited business insurance products, and donot, to our knowledge, offer business liability insurance. As a result, we do not have any business liability insurance coverage for our operations. Moreover, whilebusiness disruption insurance is available, we have determined that the risks of disruption and cost of the insurance are such that we do not require it at this time.Any business disruption, litigation or natural disaster might result in substantial costs and diversion of resources, particularly if it affects our technology platformswhich we depend on for delivery of our software and services, and could have a material adverse effect on our financial condition and results of operations.We may be liable to our customers for damages caused by unauthorized disclosure of sensitive and confidential information, whether through our employees orotherwise.We are typically required to manage, utilize and store sensitive or confidential customer data in connection with the products and services we provide.Under the terms of our customer contracts, we are required to keep such information strictly confidential. We seek to implement specific measures to protectsensitive and confidential customer data. We require our employees to enter into nondisclosure agreements to limit such employees’ access to, and distribution of,our customers’ sensitive and confidential information and our own trade secrets. We can give no assurance that the steps taken by us in this regard will be adequateto protect our customers’ confidential information. If our customers’ proprietary rights are misappropriated by our employees, in violation of any applicableconfidentiality agreements or otherwise, our customers may consider us liable for that act and seek damages and compensation from us. However, we currently donot have any insurance coverage for mismanagement or misappropriation of such information by our employees. Any litigation with respect to unauthorizeddisclosure of sensitive and confidential information might result in substantial costs and diversion of resources and management attention.8We may face intellectual property infringement claims that could be timeconsuming and costly to defend. If we fail to defend ourselves against such claims, wemay lose significant intellectual property rights and may be unable to continue providing our existing products and services.It is critical that we use and develop our technology and products without infringing upon the intellectual property rights of third parties, includingpatents, copyrights, trade secrets and trademarks. Intellectual property litigation is expensive and timeconsuming and could divert management’s attention from ourbusiness. A successful infringement claim against us, whether with or without merit, could, among others things, require us to pay substantial damages, developnoninfringing technology, or rebrand our name or enter into royalty or license agreements that may not be available on acceptable terms, if at all, and cease making,licensing or using products that have infringed a third party’s intellectual property rights. Protracted litigation could also result in existing or potential customersdeferring or limiting their purchase or use of our products until resolution of such litigation, or could require us to indemnify our customers against infringementclaims in certain instances. Also, we may be unaware of intellectual property registrations or applications relating to our services that may give rise to potentialinfringement claims against us. Parties making infringement claims may be able to obtain an injunction to prevent us from delivering our services or usingtechnology containing the allegedly infringing intellectual property. Any intellectual property litigation could have a material adverse effect on our business, resultsof operations or financial condition. Seasonality and fluctuations in our customers’ spending cycle and other factors can cause our revenues and operating results to vary significantly from quarterto quarter and from year to year.Our revenues and operating results will vary significantly from quarter to quarter and from year to year due to a number of factors, many of which areoutside of our control. Our new lines of business acquired upon the consummation of the asset exchange transaction discussed below see higher customer use andactivity during the Chinese New Year holiday than other times during the year when rail travel is high, which lead to higher revenue during this period as morecustomers would like to place more advertising. Due to these and other factors, our operating results may fluctuate significantly from quarter to quarter and fromyear to year. These fluctuations are likely to continue in the future, and operating results for any period may not be indicative of our future performance in any futureperiod.Our corporate actions are substantially controlled by our principal shareholders, who can cause us to take actions in ways you may not agree with.Mr. Xuesong Song, our chairman, chief executive officer and a member of our board of directors, beneficially owns 19.31% of our outstanding ordinaryshares and 1,000,000 preferred shares, and each preferred share has the right to 399 votes at a meeting of the members of the Company. Our officers and directors asa group beneficially own an aggregate of approximately 33.69% of our outstanding ordinary shares. These shareholders, acting individually or as a group, couldexert control and substantial influence over matters such as electing directors, amending our constitutional documents, and approving acquisitions, mergers or otherbusiness combination transactions. This concentration of ownership and voting power may also discourage, delay or prevent a change in control of our company,which could deprive our shareholders of an opportunity to receive a premium for their shares as part of a sale of our company and might reduce the price of ourshares. Alternatively, our controlling shareholders may cause a merger, consolidation or change of control transaction even if it is opposed by our othershareholders, including those who purchase shares in this offering.9We depend on a small number of customers to derive a significant portion of our revenues. If we were to become dependent again upon a few customers, suchdependency could negatively impact our business, operating results and financial condition.We derived a material portion of our revenues from a small number of customers. In the years ended December 31, 2017 and 2016, our five largestcustomers accounted for 99.8% and 78.5% of our total sales, respectively, and our largest customer Guangdong Zhanshi Media Advertising Co., Ltd. accounted forapproximately 80.8% of our total sales during for the fiscal year ended December 31, 2017. As our customer base may change from yeartoyear, during such yearsthat the customer base is highly concentrated, the fluctuation of our sales to any of such major customers could have a material adverse effect on our business,operating results and financial condition. Moreover, our high customer base concentration may also adversely affect our ability to negotiate contract prices withthese customers, which may in turn materially and adversely affect our results of operations.Our historical outstanding accounts receivable have been relatively high. Inability to collect our accounts receivable on a timely basis, if at all, couldmaterially and adversely affect our financial condition, liquidity and results of operations.Historically, our outstanding accounts receivable have been relatively high. As of December 31, 2017 and 2016, our outstanding accounts receivable beforeimpairment were $10.4 million and $2.10 million, respectively. Although we conduct credit evaluations of our customers, we generally do not require collateral orother security from our customers. In addition, we have had a relatively high customer concentration. The outstanding accounts receivable balance for our largestcustomer was 45.3% and 38.5% of our total accounts receivable balance as of December 31, 2017 and 2016, respectively. As a result, an extended delay or default inpayment relating to a significant account would likely have a material and adverse effect on the aging schedule and turnover days of our accounts receivable. Ourinability to collect our accounts receivable on a timely basis, if at all, could materially and adversely affect our financial condition, liquidity and results of operations.Risks Related to Doing Business in ChinaAdverse changes in political and economic policies of the PRC government could have a material adverse effect on the overall economic growth of China,which could reduce the demand for our services and materially and adversely affect our competitive position.Substantially all of our business operations are conducted in China. Accordingly, our business, results of operations, financial condition and prospects aresubject to a significant degree to economic, political and legal developments in China. Although the Chinese economy is no longer a planned economy, the PRCgovernment continues to exercise significant control over China’s economic growth through direct allocation of resources, monetary and tax policies, and a host ofother government policies such as those that encourage or restrict investment in certain industries by foreign investors, control the exchange between RMB andforeign currencies, and regulate the growth of the general or specific market. These government involvements have been instrumental in China’s significant growthin the past 30 years. The reorganization of the telecommunications industry encouraged by the PRC government has directly affected our industry and our growthprospect. In response to the recent global and Chinese economic downturn, the PRC government has adopted policy measures aimed at stimulating the economicgrowth in China. If the PRC government’s current or future policies fail to help the Chinese economy achieve further growth or if any aspect of the PRCgovernment’s policies limits the growth of the telecommunications industry in China or our industry or otherwise negatively affects our business, our growth rate orstrategy, our results of operations could be adversely affected as a result. Our business benefits from certain government tax incentives. Expiration, reduction or discontinuation of, or changes to, these incentives will increase our taxburden and reduce our net income.Under the PRC Enterprise Income Tax Law passed in 2007 and the implementing rules, both of which became effective on January 1, 2008, or the New EITLaw, a unified enterprise income tax rate of 25% and unified tax deduction standard is applied equally to both domesticinvested enterprises and foreigninvestedenterprises, or FIEs. Enterprises established prior to March 16, 2007 eligible for preferential tax treatment in accordance with the then tax laws and administrativeregulations shall gradually become subject to the New EIT Law rate over a fiveyear transition period starting from the date of effectiveness of the New EIT Law.However, certain qualifying hightechnology enterprises may still benefit from a preferential tax rate of 15% if they own their core intellectual properties and they areenterprises in certain Statesupported hightech industries to be later specified by the government. As a result, if our PRC subsidiaries qualify as “hightechnologyenterprises,” they will continue to benefit from the preferential tax rate of 15%, subject to transitional rules implemented from January 1, 2008. Our subsidiary, BeijingZhong Chuan Shi Xun Technology Limited, is qualified as a “hightechnology enterprise” until the end of the November 2018, and therefore it had benefited fromthe preferential tax rate of 15%, subject to transitional rules implemented on January 1, 2008. Although we intend to apply for a renewal of this qualification, if BeijingZhong Chuan Shi Xun ceases to qualify as a “hightechnology enterprise”, or the tax authorities change their position on our preferential tax treatments in thefuture, our future tax liabilities may materially increase, which could materially and adversely affect our financial condition and results of operations.10If we were deemed a “resident enterprise” by PRC tax authorities, we could be subject to tax on our global income at the rate of 25% under the New EIT Lawand our nonPRC shareholders could be subject to certain PRC taxes.Under the New EIT Law and the implementing rules, both of which became effective January 1, 2008, an enterprise established outside of the PRC with “defacto management bodies” within the PRC may be considered a PRC “resident enterprise” and will be subject to the enterprise income tax at the rate of 25% on itsglobal income as well as PRC enterprise income tax reporting obligations. The implementing rules of the New EIT Law define “de facto management” as “substantialand overall management and control over the production and operations, personnel, accounting, and properties” of the enterprise. However, as of the date of thistransition report, no final interpretations on the implementation of the “resident enterprise” designation are available. Moreover, any such designation, when madeby PRC tax authorities, will be determined based on the facts and circumstances of individual cases. Therefore, if we were to be considered a “resident enterprise”by the PRC tax authorities, our global income would be taxable under the New EIT Law at the rate of 25% and, to the extent we were to generate a substantial amountof income outside of PRC in the future, we would be subject to additional taxes. In addition, the dividends we pay to our nonPRC enterprise shareholders and gainsderived by such shareholders or ADS or ordinary share holders from the transfer of our shares or ADSs may also be subject to PRC withholding tax at the rate up to10%, if such income were regarded as Chinasourced income.Our holding company structure may limit the payment of dividends.We have no direct business operations, other than our ownership of our subsidiaries. While we have no current intention of paying dividends, should wedecide in the future to do so, as a holding company, our ability to pay dividends and meet other obligations depends upon the receipt of dividends or otherpayments from our operating subsidiaries and other holdings and investments. Current PRC regulations permit our PRC subsidiaries to pay dividends to us only outof their accumulated profits, if any, determined in accordance with Chinese accounting standards and regulations. In addition, each of our subsidiaries in China isrequired to set aside at least 10% of its aftertax profits each year, if any, to fund a statutory reserve until such reserve reaches 50% of its registered capital. Thesereserves are not distributable as cash dividends. Furthermore, if our subsidiaries in China incur debt on their own behalf in the future, the instruments governing thedebt may restrict their ability to pay dividends or make other payments to us. As a result, there may be limitations on the ability of our PRC subsidiaries to paydividends or make other investments or acquisitions that could be beneficial to our business or otherwise fund and conduct our business.In addition, under the New EIT Law and the implementing rules that became effective on January 1, 2008, dividends generated from the business of our PRCsubsidiaries after January 1, 2008 and payable to us may be subject to a withholding tax rate of 10% if the PRC tax authorities subsequently determine that we are anonresident enterprise, unless there is a tax treaty with China that provides for a different withholding arrangement.Uncertainties with respect to the PRC legal system could adversely affect us.We conduct all of our business through our subsidiaries in China. Our operations in China are governed by PRC laws and regulations. Our PRCsubsidiaries are generally subject to laws and regulations applicable to foreign investments in China and, in particular, laws and regulations applicable to whollyforeignowned enterprises. The PRC legal system is based on statutes. Prior court decisions may be cited for reference but have limited precedential value.11Since 1979, PRC legislation and regulations have significantly enhanced the protections afforded to various forms of foreign investments in China.However, China has not developed a fully integrated legal system and recently enacted laws and regulations may not sufficiently cover all aspects of economicactivities in China. In particular, because these laws and regulations are relatively new, and because of the limited volume of published decisions and theirnonbinding nature, the interpretation and enforcement of these laws and regulations involve uncertainties. In addition, the PRC legal system is based in part ongovernment policies and internal rules (some of which are not published on a timely basis or at all) that may have a retroactive effect. As a result, we may not beaware of our violation of these policies and rules until some time after the violation. In addition, any litigation in China may be protracted and result in substantialcosts and diversion of resources and management attention.PRC regulation of loans and direct investment by offshore holding companies to PRC entities may delay or prevent us from using the proceeds of our May2010 public offering to make loans or additional capital contributions to our PRC operating subsidiaries, which could materially and adversely affect ourliquidity and our ability to fund and expand our business.In utilizing the proceeds of our May 2010 public offering as an offshore holding company of our PRC operating subsidiaries, we may make loans to our PRCsubsidiaries, or we may make additional capital contributions to our PRC subsidiaries. Any loans to our PRC subsidiaries are subject to PRC regulations. Forexample, loans by us to our subsidiaries in China, which are FIEs, to finance their activities cannot exceed statutory limits and must be registered with the StateAdministration of Foreign Exchange, or SAFE. On August 29, 2008, SAFE promulgated Circular 142, a notice regulating the conversion by a foreigninvestedcompany of foreign currency into RMB by restricting how the converted RMB may be used. The notice requires that RMB converted from the foreign currencydenominated capital of a foreigninvested company may only be used for purposes within the business scope approved by the applicable governmental authorityand may not be used for equity investments within the PRC unless specifically provided for otherwise. The foreign currencydenominated capital shall be verified byan accounting firm before converting into RMB. In addition, SAFE strengthened its oversight over the flow and use of RMB funds converted from the foreigncurrencydenominated capital of a foreigninvested company. To convert such capital into RMB, the foreigninvested company must report the use of such RMB tothe bank, and the RMB must be used to the reported purposes. According to Circular 142, change of the use of such RMB without approval is prohibited. Inaddition, such RMB may not be used to repay RMB loans if the proceeds of such loans have not yet been used. Violations of Circular 142 may result in severepenalties, including substantial fines as set forth in the Foreign Exchange Administration Rules.We may also decide to finance our subsidiaries by means of capital contributions. These capital contributions may need approval from the PRC Ministry ofCommerce, or MOFCOM, or its local counterpart. We may not be able to obtain these government approvals on a timely basis, if at all, with respect to future capitalcontributions by us to our PRC subsidiaries. If we fail to receive such approvals in such cases when approval is required, our ability to use the proceeds of our May2010 public offering and to capitalize our PRC operations may be negatively affected, which could adversely affect our liquidity and our ability to fund and expandour business.Governmental control of currency conversion may affect the value of your investment.The PRC government imposes controls on the convertibility of the RMB into foreign currencies and, in certain cases, the remittance of currency out ofChina. We receive substantially all of our revenues in RMB. Under our current corporate structure, our income is primarily derived from dividend payments from ourPRC subsidiaries. Shortages in the availability of foreign currency may restrict the ability of our PRC subsidiaries to remit sufficient foreign currency to paydividends or other payments to us, or otherwise satisfy their foreign currency denominated obligations. Under existing PRC foreign exchange regulations, paymentsof current account items, including profit distributions, interest payments and expenditures from traderelated transactions, can be made in foreign currencieswithout prior approval from SAFE by complying with certain procedural requirements. However, approval from appropriate government authorities is required whereRMB is to be converted into foreign currency and remitted out of China to pay capital expenses such as the repayment of loans denominated in foreign currencies.The PRC government may also at its discretion restrict access in the future to foreign currencies for current account transactions. If the foreign exchange controlsystem prevents us from obtaining sufficient foreign currency to satisfy our currency demands, we may not be able to pay dividends in foreign currencies to ourshareholders, including holders of our ADSs or ordinary shares.12Fluctuation in the value of the RMB may have a material adverse effect on the value of your investment.The value of the RMB against the U.S. dollar and other currencies may fluctuate and is affected by, among other things, changes in political and economicconditions. On July 21, 2005, the PRC government changed its decadeold policy of pegging the value of the RMB to the U.S. dollar. Under the new policy, the RMBis permitted to fluctuate within a narrow and managed band against a basket of certain foreign currencies. This change in policy has resulted in an approximate26.8% appreciation of the RMB against the U.S. dollar between July 21, 2005 and September 30, 2015. Provisions on Administration of Foreign Exchange, asamended in August 2008, further changed China’s exchange regime to a managed floating exchange rate regime based on market supply and demand. Since reachinga high against the U.S. dollar in July 2008, however, the RMB has traded within a narrow band against the U.S. dollar, remaining within 1% of its July 2008 high butnever exceeding it. As a consequence, the RMB has fluctuated sharply since July 2008 against other freelytraded currencies, in tandem with the U.S. dollar. InAugust 2015, the PRC Government devalued its currency by approximately 3%, representing the largest yuan depreciation for 20 years. Concerns remain thatChina’s slowing economy, and in particular its exports, will need a stimulus that can only come from further cuts in the exchange rate.It is difficult to predict how long the current situation may continue and when and how it may change again as the People’s Bank of China may regularlyintervene in the foreign exchange market to achieve economic policy goals. Substantially all of our revenues and costs are denominated in the RMB, and asignificant portion of our financial assets are also denominated in RMB. We principally rely on dividends and other distributions paid to us by our subsidiaries inChina. Any significant revaluation of the RMB may materially and adversely affect our cash flows, revenues, earnings and financial position, and the value of, andany dividends payable on, our ADSs or ordinary shares in U.S. dollars. Any fluctuations of the exchange rate between the RMB and the U.S. dollar could also resultin foreign currency translation losses for financial reporting purposes.PRC laws and regulations governing our businesses. If we are found to be in violation of such PRC laws and regulations, we could be subject to sanctions. Inaddition, changes in such PRC laws and regulations may materially and adversely affect our business.There are substantial uncertainties regarding the interpretation and application of PRC laws and regulations, including, but not limited to, the laws andregulations governing our business. These laws and regulations are relatively new and may be subject to change, and their official interpretation and enforcementmay involve substantial uncertainty. The effectiveness of newly enacted laws, regulations or amendments may be delayed, resulting in detrimental reliance byforeign investors. New laws and regulations that affect existing and proposed future businesses may also be applied retroactively.The PRC government has broad discretion in dealing with violations of laws and regulations, including levying fines, revoking business and other licensesand requiring actions necessary for compliance. In particular, licenses and permits issued or granted to us by relevant governmental bodies may be revoked at a latertime by higher regulatory bodies. We cannot predict the effect of the interpretation of existing or new PRC laws or regulations on our businesses. We cannot assureyou that our current ownership and operating structure would not be found in violation of any current or future PRC laws or regulations. As a result, we may besubject to sanctions, including fines, and could be required to restructure our operations or cease to provide certain services. In addition, any litigation in China maybe protracted and result in substantial costs and diversion of resources and management attention. Any of these or similar actions could significantly disrupt ourbusiness operations or restrict us from conducting a substantial portion of our business operations, which could materially and adversely affect our business,financial condition and results of operations.13If we were required to obtain the prior approval of the China Securities Regulatory Commission, or CSRC, of the listing and trading of our ADSs on theNASDAQ Capital Market, we may face regulatory actions or other sanctions from the CSRC or other PRC regulatory agencies.On August 8, 2006, six PRC regulatory agencies, including the Ministry of Commerce, the State Assets Supervision and Administration Commission, theState Administration for Taxation, the State Administration for Industry and Commerce, the CSRC and the SAFE, jointly issued the Regulations on Mergers andAcquisitions of Domestic Enterprises by Foreign Investors, which became effective on September 8, 2006 (the “New M&A Rules”). This regulation, among otherthings, includes provisions that purport to require that an offshore special purpose vehicle formed for the purposes of overseas listing of equity interests in PRCcompanies and controlled directly or indirectly by PRC companies or individuals obtain the approval of the CSRC prior to the listing and trading of such specialpurpose vehicle’s securities on an overseas stock exchange. On September 21, 2006, the CSRC published on its official website procedures regarding its approval ofoverseas listings by special purpose vehicles. The CSRC approval procedures require the filing of a number of documents with the CSRC and it would take severalmonths to complete the approval process, if practicable at all. The application of this new PRC regulation remains unclear with no consensus currently existingamong leading PRC law firms regarding the scope of the applicability of the CSRC approval requirement. Prior to our May 2010 initial public offering, our PRC counsel has advised us that, based on its understanding of the current PRC laws and regulations aswell as the procedures announced on September 21, 2006: (i) Softech was directly incorporated by Topsky as a foreign investment enterprise under PRC law;therefore, there was no acquisition of the equity of a “PRC domestic company” as defined under the New M&A Rules; and (ii) the contractual arrangementsbetween Kingtone Information and Softech were not clearly defined and considered as the transaction which shall be applied to the New M&A Rules. Therefore, wedid not seek prior CSRC approval for our initial public offering.However, if the CSRC required that we obtain its approval prior to the completion of our initial public offering and the listing of our ADSs on the NASDAQCapital Market, we may face regulatory actions or other sanctions from the CSRC or other PRC regulatory agencies. These regulatory agencies may impose fines andpenalties on our operations in the PRC, limit our operating privileges in the PRC, delay or restrict the repatriation of the proceeds from our initial public offering intothe PRC, or take other actions that could have a material adverse effect on our business, financial condition, results of operations, reputation and prospects, as wellas the trading price of our shares.Also, if the CSRC requires that we obtain its approval, we may be unable to obtain a waiver of the CSRC approval requirements if and when procedures areestablished to obtain such a waiver. Any uncertainties and/or negative publicity regarding this CSRC approval requirement could have a material adverse effect onthe trading price of our shares.PRC regulations relating to the establishment of offshore special purpose companies by PRC residents may subject our PRC resident shareholders to penaltiesand limit our ability to inject capital into our PRC subsidiaries, limit our PRC subsidiaries’ ability to distribute profits to us, or otherwise adversely affect us.On October 21, 2005, the SAFE issued the Notice on Issues Relating to the Administration of Foreign Exchange in Fundraising and Reverse InvestmentActivities of Domestic Residents Conducted via Offshore Special Purpose Companies, or Notice 75, which became effective as of November 1, 2005. According toNotice 75, prior registration with the local SAFE branch is required for PRC residents to establish or to control an offshore company for the purposes of financingsuch offshore company with assets or equity interests in an onshore enterprise located in the PRC, or an offshore special purpose company. An amendment toregistration or filing with the local SAFE branch by such PRC resident is also required for the injection of equity interests or assets of an onshore enterprise in theoffshore special purpose company or overseas funds raised by such offshore company, or any other material change involving a change in the capital of theoffshore special purpose company. Moreover, Notice 75 applies retroactively. As a result, PRC residents who have established or acquired control of offshorespecial purpose companies that have made onshore investments in the PRC in the past are required to have completed the relevant registration procedures with thelocal SAFE branch by March 31, 2006. To further clarify the implementation of Notice 75, the SAFE issued Circular 106 on May 29, 2007. Under Circular 106, PRCsubsidiaries of an offshore special purpose company are required to coordinate and supervise the filing of SAFE registrations by the offshore holding company’sshareholders or beneficial owners who are PRC residents in a timely manner.14Some of our current shareholders and/or beneficial owners may fall within the ambit of the SAFE notice and be required to register with the local SAFEbranch as required under the SAFE notice. If so required, and if such shareholders and/or beneficial owners fail to timely register their SAFE registrations pursuantto the SAFE notice, or if future shareholders and/or beneficial owners of our company who are PRC residents fail to comply with the registration procedures setforth in the SAFE notice, this may subject such shareholders, beneficial owners and/or our PRC subsidiaries to fines and legal sanctions and may also limit ourability to contribute additional capital into our PRC subsidiaries, limit our PRC subsidiaries’ ability to distribute dividends to our company, or otherwise adverselyaffect our business.Risks Associated with our ADSs and Ordinary SharesOur securities are not currently traded on any United States public markets and you may not be able to resell your securities for some time.There is currently no public market for our ordinary shares or American Depository Shares (“ADSs”) in the United States or in any other jurisdiction. OurADSs were voluntarily delisted from the NASDAQ Capital Market on September 19, 2018. We have applied to NASDAQ for the listing of our ordinary shares on theNASDAQ Capital Market and received an approval for listing of Ordinary Shares on August 6, 2018, and as of the date of this transition report, that application andapproval are currently under review. We cannot assume that our ordinary shares will be accepted for listing on the NASDAQ Capital Market, or if listed, that wewould continue to meet the applicable minimum listing requriements. You may not be able to sell your ordinary shares quickly or at all if we are unable to gain listingon a public market in the United States.The market price of our ADSs has historically been highly volatile, and you may not be able to resell our ordinary shares at or above your initial purchaseprice.There may be a limited public market for our ordinary shares and, as discussed above, our ADSs are no longer listed on any public market in the UnitedStates or any other jurisdiction. We cannot assure you that there will be an active trading market for our ordinary shares in the future. If our ordinary shares areaccepted for listing on a public market, you may not be able to sell your ordinary shares quickly or at the market price if trading in our ordinary shares is not active. The trading price of our ADSs and ordinary shares may be volatile. The price of our ADSs and ordinary shares could be subject to wide fluctuations inresponse to a variety of factors, including the following:1.Introduction of new products, services or technologies offered by us or our competitors;2.Failure to meet or exceed revenue and financial projections we provide to the public;3.Actual or anticipated variations in quarterly operating results;4.Failure to meet or exceed the estimates and projections of the investment community;5.General market conditions and overall fluctuations in United States equity markets;6.Announcements of significant acquisitions, strategic partnerships, joint ventures or capital commitments by us or our competitors;7.Disputes or other developments relating to proprietary rights, including patents, litigation matters and our ability to obtain patent protection for ourtechnologies;8.Additions or departures of key management personnel;9.Issuances of debt or equity securities;10.Significant lawsuits, including patent or shareholder litigation;11.Changes in the market valuations of similar companies;12.Sales of additional ordinary shares or other securities by us or our shareholders in the future;13.Trading volume of our ordinary shares;14.Fluctuations in the exchange rate between the U.S. dollar and Renminbi;15.Negative market perception and media coverage of our company or other companies in the same or similar industry with us; and16.Other events or factors, many of which are beyond our control.15In addition, the stock market in general, and the NASDAQ Capital Market and software products and services companies in particular, have experiencedextreme price and volume fluctuations that have often been unrelated or disproportionate to the operating performance of these companies. Broad market andindustry factors may negatively affect the market price of our ordinary shares, regardless of our actual operating performance. Our ADSs and ordinary shares may be subject to the SEC’s penny stock rules which may make it difficult for brokerdealers to complete customer transactionsand trading activity in our securities.Our ADSs and ordinary shares may be deemed to be “penny stock” as that term is defined under the Securities Exchange Act of 1934, as amended. Pennystocks generally are equity securities with a price of less than $5.00 (other than securities registered on certain national securities exchanges or quoted on theNASDAQ system, provided that current price and volume information with respect to transactions in such securities is provided by the exchange or system). Pennystock rules impose additional sales practice requirements on brokerdealers who sell to persons other than established customers and “accredited investors.” Theterm “accredited investor” refers generally to institutions with assets in excess of $5,000,000 or individuals with a net worth in excess of $1,000,000 or annual incomeexceeding $200,000 or $300,000 jointly with their spouse in each of the prior two years.The penny stock rules require a brokerdealer, prior to a transaction in a penny stock not otherwise exempt from the rules, to deliver a standardized riskdisclosure document in a form prepared by the SEC, which provides information about penny stocks and the nature and level of risks in the penny stockmarket. Moreover, brokerdealers are required to determine whether an investment in a penny stock is a suitable investment for a prospective investor. A brokerdealer must receive a written agreement to the transaction from the investor setting forth the identity and quantity of the penny stock to be purchased. Theserequirements may make it more difficult for brokerdealers to effectuate customer transactions and trading activity in our securities. As a result, the market price ofour ADSs and ordinary shares may be depressed, and you may find it more difficult to sell our ADSs or ordinary shares.Sales of a substantial number of ordinary shares or ADSs in the public market by our existing shareholders could cause the price of our ADSs to fall.Sales of a substantial number of our ordinary shares or ADSs in the public market or the perception that these sales might occur, could depress the marketprice of our ADSs and could impair our ability to raise capital through the sale of additional equity securities. We are unable to predict the effect that sales may haveon the prevailing market price of our ADSs.All of our existing shareholders prior to our May 2010 offering were subject to lockup agreements with the underwriters of the offering that restricted theshareholders’ ability to transfer ordinary shares or ADSs until expiration of the lockup period in November 2010. The lockup agreements limited the number ofordinary shares or ADSs that may be sold immediately following the public offering. Subject to certain limitations, approximately 1,000,000 of our total outstandingshares are now eligible for sale. Sales of ordinary shares by these shareholders could have a material adverse effect on the trading price of our ADSs.Future sales and issuances of our ordinary shares, or rights to purchase our ordinary shares, including pursuant to our 2010 Omnibus Incentive Plan, couldresult in additional dilution of the percentage ownership of our shareholders and could cause the price of our ordinary shares to fall.We expect that significant additional capital will be needed in the future to continue our planned operations. To the extent we raise additional capital byissuing equity securities, our shareholders may experience substantial dilution. We may sell ordinary shares, convertible securities or other equity securities in oneor more transactions at prices and in a manner we determine from time to time. If we sell ordinary shares, convertible securities or other equity securities in more thanone transaction, investors may be materially diluted by subsequent sales. Such sales may also result in material dilution to our existing shareholders, and newinvestors could gain rights superior to our existing shareholders.16We do not intend to pay dividends on our ordinary shares, so any returns will be limited to the value of our ADSs and ordinary shares.We have never declared or paid any cash dividend on our ordinary shares. We currently anticipate that we will retain future earnings for the development,operation and expansion of our business and do not anticipate declaring or paying any cash dividends for the foreseeable future. Any return shareholders willtherefore be limited to the value of their ADSs or ordinary shares.As the rights of shareholders under British Virgin Islands law differ from those under U.S. law, you may have fewer protections as a shareholder.Our corporate affairs will be governed by our memorandum of association and articles of association, the BVI Business Companies Act, 2004, or the BVIAct, of the British Virgin Islands and the common law of the British Virgin Islands. The rights of shareholders to take legal action against our directors, actions byminority shareholders and the fiduciary responsibilities of our directors under British Virgin Islands law are to a large extent governed by the BVI Act and thecommon law of the British Virgin Islands. The common law of the British Virgin Islands is derived in part from comparatively limited judicial precedent in the BritishVirgin Islands as well as from English common law, which has persuasive, but not binding, authority on a court in the British Virgin Islands. The rights of ourshareholders and the fiduciary responsibilities of our directors under British Virgin Islands law are not as clearly established as they would be under statutes orjudicial precedents in some jurisdictions in the United States. In particular, the British Virgin Islands has a less developed body of securities laws as compared to theUnited States, and some states (such as Delaware) have more fully developed and judicially interpreted bodies of corporate law.As a result of all of the above, holders of our ADSs and ordinary shares may have more difficulty in protecting their interests through actions against ourmanagement, directors or major shareholders than they would as shareholders of a U.S. company.British Virgin Islands companies may not be able to initiate shareholder derivative actions, thereby depriving shareholders of the ability to protect theirinterests.British Virgin Islands companies may not have standing to initiate a shareholder derivative action in a federal court of the United States. The circumstancesin which any such action may be brought, and the procedures and defenses that may be available in respect to any such action, may result in the rights ofshareholders of a British Virgin Islands company being more limited than those of shareholders of a company organized in the United States. Accordingly,shareholders may have fewer alternatives available to them if they believe that corporate wrongdoing has occurred. The British Virgin Islands courts are alsounlikely to recognize or enforce against us judgments of courts in the United States based on certain liability provisions of U.S. securities law; and to imposeliabilities against us, in original actions brought in the British Virgin Islands, based on certain liability provisions of U.S. securities laws that are penal in nature.There is no statutory recognition in the British Virgin Islands of judgments obtained in the United States, although the courts of the British Virgin Islands willgenerally recognize and enforce the nonpenal judgment of a foreign court of competent jurisdiction without retrial on the merits.The laws of the British Virgin Islands provide little protection for minority shareholders, so minority shareholders will have little or no recourse if theshareholders are dissatisfied with the conduct of our affairs.Under the law of the British Virgin Islands, there is little statutory law for the protection of minority shareholders other than the provisions of the BVI Actdealing with shareholder remedies. The principal protection under statutory law is that shareholders may bring an action to enforce the constituent documents ofthe corporation, our memorandum of association and articles of association. Shareholders are entitled to have the affairs of the company conducted in accordancewith the general law and the memorandum of association and articles of association.17There are common law rights for the protection of shareholders that may be invoked, largely dependent on English company law, since the common law ofthe British Virgin Islands is limited. Under the general rule pursuant to English company law known as the rule in Foss v. Harbottle, a court will generally refuse tointerfere with the management of a company at the insistence of a minority of its shareholders who express dissatisfaction with the conduct of the company’s affairsby the majority or the board of directors. However, every shareholder is entitled to have the affairs of the company conducted properly according to law and thecompany’s constituent documents. As such, if those who control the company have persistently disregarded the requirements of company law or the provisions ofthe company’s memorandum of association and articles of association, then the courts will grant relief. Generally, the areas in which the courts will intervene are thefollowing: (1) an act complained of which is outside the scope of the authorized business or is illegal or not capable of ratification by the majority; (2) acts thatconstitute fraud on the minority where the wrongdoers control the company; (3) acts that infringe on the personal rights of the shareholders, such as the right tovote; and (4) where the company has not complied with provisions requiring approval of a majority of shareholders, which are more limited than the rights affordedminority shareholders under the laws of many states in the United States.Antitakeover provisions in our memorandum of association and articles of association and our right to issue preference shares could make a thirdpartyacquisition of us difficult.Some provisions of our memorandum of association and articles of association may discourage, delay or prevent a change in control of our company ormanagement that shareholders may consider favorable, including provisions that authorize our board of directors to issue preference shares in one or more seriesand to designate the price, rights, preferences, privileges and restrictions of such preference shares.If you hold our ADSs, you may not have the same voting rights as the holders of our ordinary shares and must act through the depositary to exercise your rights.Holders of our ADSs will not be able to exercise voting rights attaching to the shares evidenced by our ADSs on an individual basis. Holders of our ADSswill appoint the depositary or its nominee as their representative to exercise the voting rights attaching to the shares represented by the ADSs. You may not receivevoting materials in time to instruct the depositary to vote, and it is possible that you, or persons who hold their ADSs through brokers, dealers or other third parties,will not have the opportunity to exercise a right to vote. Upon our written request, the depositary will mail to you a shareholder meeting notice which contains,among other things, a statement as to the manner in which your voting instructions may be given, including an express indication that such instructions may begiven or deemed given to the depositary to give a discretionary proxy to a person designated by us if no instructions are received by the depositary from you on orbefore the response date established by the depositary. However, no voting instruction shall be deemed given and no such discretionary proxy shall be given withrespect to any matter as to which we inform the depositary that (i) we do not wish such proxy given, (ii) substantial opposition exists, or (iii) such matter materiallyand adversely affects the rights of shareholders. We will make all reasonable efforts to cause the depositary to extend voting rights to you in a timely manner, butyou may not receive the voting materials in time to ensure that you can instruct the depositary to vote your ADSs. Furthermore, the depositary and its agents willnot be responsible for any failure to carry out any instructions to vote, for the manner in which any vote is cast or for the effect of any such vote. As a result, youmay not be able to exercise your right to vote and you may lack recourse if your ADSs are not voted as you requested. In addition, in your capacity as an ADSholder, you will not be able to call a shareholders’ meeting.You may not be able to participate in rights offerings and may experience dilution of your holdings as a result.We may from time to time distribute rights to our shareholders, including rights to acquire our securities. However, we may not, and under the depositagreement for the ADSs, the depositary will not, offer those rights to ADS holders unless both the rights and the underlying securities to be distributed to ADSholders are registered under the Securities Act, or the distribution of them to ADS holders is exempted from registration under the Securities Act with respect to allholders of ADSs. We are under no obligation to file a registration statement with respect to any such rights or underlying securities or to endeavor to cause such aregistration statement to be declared effective. In addition, we may not be able to rely on an exemption from registration under the Securities Act to distribute suchrights and securities. Accordingly, holders of our ADSs may be unable to participate in our rights offerings and may experience dilution in their holdings as a result.You may be subject to limitations on transfer of your ADSs.Your ADSs are transferable on the books of the depositary. However, the depositary may close its transfer books at any time or from time to time when itdeems expedient in connection with the performance of its duties. In addition, the depositary may refuse to deliver, transfer or register transfers of ADSs generallywhen our books or the books of the depositary are closed, or at any time if we or the depositary deem it advisable to do so because of any requirement of law or ofany government or governmental body, or under any provision of the deposit agreement, or for any other reason.18We may be a passive foreign investment company, of PFIC, which could lead to additional taxes for U.S. holders of our ADSs or ordinary shares.We do not expect to be, for U.S. federal income tax purposes, a passive foreign investment company, or a PFIC, which is a foreign company for which, inany given taxable year, either at least 75% of its gross income is passive income, or investment income in general, or at least 50% of its assets produce or are held toproduce passive income, for the current taxable year, and we expect to operate in such a manner so as not to become a PFIC for any future taxable year. However,because the determination of PFIC status for any taxable year cannot be made until after the close of such year and requires extensive factual investigation,including ascertaining the fair market value of our assets on a quarterly basis and determining whether each item of gross income that we earn is passive income, wecannot assure you that we will not become a PFIC for the current taxable year or any future taxable year. If we are or become a PFIC, a U.S. holder of our ADSs orordinary shares could be subject to additional U.S. federal income taxes on gain recognized with respect to the ADSs or ordinary shares and on certain distributions,plus an interest charge on certain taxes treated as having been deferred under the PFIC rules. Noncorporate U.S. holders will not be eligible for reduced rates oftaxation on any dividends received from us if we are a PFIC in the taxable year in which such dividends are paid or in the preceding taxable year.If our ordinary shares are listed on the NASDAQ Capital Market and the trading price of our ordinary shares fails to comply with the continued listingrequirements of the NASDAQ Capital Market, we would face possible delisting, which would result in a limited public market for our ordinary shares andmake obtaining future debt or equity financing more difficult for us.Companies listed on NASDAQ are subject to delisting for, among other things, failure to maintain a minimum closing bid price of $1.00 per share for 30consecutive business days. On December 19, 2011, we received a letter from NASDAQ indicating that for the last 30 consecutive business days, the closing bidprice of our ADSs fell below the minimum $1.00 per share requirement pursuant to NASDAQ Listing Rule 5550(a)(2) for continued listing on the NASDAQ CapitalMarket. We regained compliance with the minimum bid price requirement for continued listing set forth in NASDAQ Listing Rule 5550(a)(2), as its ADS with itsunderlying ordinary share has achieved a closing bid price of $1.00 or greater for the 10 consecutive business days from November 6 to November 23, 2012 byimplementing a 1for10 combination, or reverse split of the ordinary shares effective November 6, 2012. When listed, we cannot be sure that the price of our ordinaryshares will comply with this requirement for continued listing on the NASDAQ Capital Market in the future. If we were not able to do so, our ordinary shares wouldbe subject to delisting and would likely trade on the overthecounter market. If our ordinary shares were to trade on the overthecounter market, selling ourordinary shares could be more difficult because smaller quantities of shares would likely be bought and sold, transactions could be delayed, and security analysts’coverage of us may be reduced. In addition, brokerdealers have certain regulatory burdens imposed upon them, which may discourage brokerdealers from effectingtransactions in our ordinary shares, further limiting the liquidity of our ordinary shares. As a result, the market price of our ordinary may be depressed, and you mayfind it more difficult to sell our ordinary shares. Such delisting from the NASDAQ Capital Market and continued or further declines in our share price could alsogreatly impair our ability to raise additional necessary capital through equity or debt financing.ITEM 4. INFORMATION ON THE COMPANY.A . HISTORY AND DEVELOPMENT OF THE COMPANY.OverviewWe are a holding company and conduct our operations through our whollyowned subsidiary named LK Technology Ltd., a British Virgin Islands limitedliability company (“LK Technology”), and its whollyowned subsidiaries, MMB Limited and Mobile Media (China) Limited and their respective subsidiaries, whichhold the rights to deploy WiFi systems on about 700 trains in China, including 290 trains in which WiFi systems have already been installed and are in operation. InMay 2010, we consummated an initial public offering of our American Depository Shares, or ADSs, for gross proceeds of $16 million, and our ADSs were listed onthe NASDAQ Capital Market under the ticker symbol “KONE”. Our ordinary shares are not currently listed on any trading market. Our American Depository Shares(“ADSs”) were voluntarily delisted from the NASDAQ Capital Market on September 19, 2018. We have applied to NASDAQ for the listing of our ordinary shares onthe NASDAQ Capital Market and received an approval for listing of Ordinary Shares on August 6, 2018, and as of the date of this transition report, that applicationand approval are currently under review.19On August 17, 2018, we consummated an asset exchange transaction, pursuant to which we exchanged all issued and outstanding capital stock in TopskyInfoTech Holdings Pte Ltd., the parent of Softech, for the issued and outstanding capital stock of LK Technology (the “Asset Exchange”). In connection with theAsset Exchange, we changed our name on August 20, 2018, and on September 20, 2018, issued to the shareholders of C Media Limited, the former parent of LKTechnology, (i) 185,412,599 of our ordinary shares, par value $0.01 per share and (ii) 1,000,000 of our preferred shares. Upon the consummation of the AssetExchange, we ceased our previous business operations and became a company focused on the provision of WiFi and mobile application products for long distancerail travelers in China.On August 25, 2018, LK Technology entered into a Stock Purchase Agreement (the “Agreement”) with the shareholders (“Shareholders”) of SuperengineHoldings Limited, a limited liability company organized under the laws of the British Virgin Islands (the “Superengine”), pursuant to which LK Technology acquiredall of the issued and outstanding capital stock of Superengine for an aggregate purchase price of US$60 million (the “Purchase Price”), which are paid by theissuance of our Ordinary Shares in an amount equal to the quotient of (x) the Purchase Price divided by (y) the average of the closing prices of the Ordinary Shareson the NASDAQ Capital Market over the 12 months period preceding July 31, 2018. We are a party to the Agreement in connection with the issuance of theOrdinary Shares and certain other limited purposes.Corporate InformationOur principal executive offices are located at LAB32, SOHO 3Q, No 9, Guanghua Road, Chaoyang District, Beijing, People’s Republic of China 100020. Ourwebsite is www.luokung.com. We routinely post important information on our website. The information contained on our website is not a part of this transitionreport.Our agent for service of process in the United States is Worldwide Stock Transfer, LLC, the current transfer agent of the Company, with a mailing address ofOne University Plaza, Suite 505, Hackensack, New Jersey 07601.B. BUSINESS OVERVIEW.We are a Chinabased provider of rail WiFi and mobile application products for long distance travelers in China. Our primary mobile application, theLuoKuang platform, consists of the LuoKuang mobile applications, a series of supporting software at the server end, and railWiFi hardware and equipment on thetrains that we serve. The LuoKuang platform incorporates technology covered by 22 patents and about 34 software copy rights, and serves as a content and servicedistribution platform that is tailored for particular travel stages featuring geographic location and social interaction. The content and services distributed byLuoKuang contain information, entertainment, travel, ecommerce, online to offline (“O2O”), advertisement and marketing features.LuoKuang mainly provides personalized and precise services to long distance travelers in two locations: on the train and at the destination. Based on thetravel environment, the core elements of our users’ needs include staving off boredom on trains and discovering and exploring new locations upon arrival. The mainservices contain entertainment services (videos and audio, digital readings, games specific and tailored to the travel stage) and social services (satisfying thedemand for value discovery of unfamiliar destinations through social interaction among strangers based on locations). As of December 31, 2017, the LuoKuangplatform featured about 38 million users.The setting services on the train focus on providing entertainment content for passengers to pass time during longdistance travel in closed environments.For example, we provide access to long video formats such as movies and TV shows, short videos, music, digital readings and games.20We use the most valuable WiFi location—the train WiFi setting—as the entrance of our LuoKuang platform and mobile applications. Passengers typicallyride trains for longdistance and interprovincial travel purposes. The long periods of monotonous journeys and the cost concerns for roaming traffic fees enable thecombination of entertainment content service needs and WiFi access needs. Our railWiFi becomes a valuable and sophisticated WiFi service in this setting—notjust WiFi connection service, but a provider of sophisticated services through a WiFi connection. In addition, the annual traffic of 800,000 passengers onboardeach train makes rail WiFi a huge entry point for mobile applications. We do not define ourselves as a train WiFi communication service operator but as a longdistance travel mobile service provider. We provide users with free WiFi access so that users are able to connect to the LuoKuang platform and thus access relatedentertainment services, services on the train and destination services. The rail WiFi is our access point to a significant pool of users and the entrance to acquiringadditional users.The setting services focus on providing targeted push services to users while travelling in unfamiliar cities. Information and service guidance are preciselypushed to appeal to the interests and tastes (eating, drinking, shopping, touring and culture) of individual users (cuisine specialties and local snacks, local events,viewing sights, culture, history, stories). The service guidance is generated, shared and distributed by individual users (travelers, local residents, local businesses)interacting with current locations and featuring users who generated contents from selfmedia and small and medium vertical contents providers).Based on the GIS (geoinformation system), Superengine is a provider of big spatialtemporal data, network graphic image technology and relevant service.Its super engine series includes computer graphic image engines and spatial database engines. Spatialtemporal cloud index is the core of the company’s spatialtemporal data engines. It is equivalent to the neural network of the big data and the Internet. It extends the value of its products and platform to its data serviceproviders. In cooperation, its service providers can be divided into three categories, namely, basic geographic data providers, industrial data providers andbehavioral data providers). Superengine’s industriesoriented spatialtemporal data engine was launched in 2016. The spatialtemporal GIS platform has been appliedin industries such as aerospace, power grid, surveying & mapping, agriculture, cultural relic preservation, water conservancy, public security, railway section, smartcities, and business location selection.Our primary sources of revenue are advertising and marketing promotion revenues.Our Industry — Mobile Internet IndustryOur products and services are engaged in the mobile internet industry. Our main services consist of entertainment services (videos, audio, digital readings,games that are tailormade for passengers on train) and other services including satisfying the demand for value discovery of unfamiliar destinations through socialinteractions among strangers based in such locations). The mobile internet industry in China is rapidly growing and is likely to be in a longterm growth trend.According to the Mobile Internet Blue Book of China Mobile Internet Report, in 2017 the market size of China mobile internet reached RMB 605 billion. Now China isin a leading position in terms of smartphone, mobile communication network and mobile application services. The pool of users is anticipated to keep expandingthrough the promotion and popularization of smartphones and the expansion of the mobile internet market.Video is the leading online entertainment format in China. According to the iResearch Report, over 80% of total time spent by users on online entertainmentin China in 2016 was internet video. Online entertainment, especially internet video, is attractive to Chinese users due to many favorable factors, including easyaccessibility, wide content selection, and innovative platforms with social features.For 2017, the transaction volume of China mobile ecommerce market reached to over RMB 4 trillion according to the China Mobile Ecommerce IndustryResearch Report from iResearch, representing an increase of 19.1%. For the next few years, China mobile online shopping will likely maintain steady growth. Thefocal point of competition in China mobile ecommerce market has shifted from infrastructure service providers to integrated and accurate services providers.Drawing in users with compelling content in diversified scenes has become a trend.21The revenue for China mobile gaming industry reached RMB 144.58 billion for the year of 2017, according to the China Mobile Game Industry ResearchReport from iResearch. With increased investment by largescale enterprises in the sector of mobile games and the strict enforcement of the mobile game industryrelated regulatory policy guidelines, the mobile game market as a whole will become more organized and standardized.According to the Annual Analysis of China Mobile Reading Industry from Analysis, for the year of 2017, the mobile reading market in China reached toRMB 14.04 billion. By the end of 2016, the size of China mobile's reading market reached RMB 11.86 billion, showing an increase of 18.38% in 2017.The closed and boring environment for passengers of longdistance travel and high roaming charges lead to a strong demand to use our rail WiFi services.Passengers, through their own mobile phone, have access to the free WiFi network in each carriage, access to our rich mobile internet entertainment content andtravel services. According to the annual statistical bulletin of China Railway Corporation in 2017, there were about 6,030 trains in operation in China in 2017,consisting of 2,935 high speed trains and 3,095 express trains. The rail WiFi system that we have installed are currently all on express trains. The market value will bemultiplied several times following the extended coverage of service on other trains.Our StrengthsWe believe the following strengths differentiate us from our competitors:Our strategy is to build up personalized and targeted service products for travelers through rail WiFi networks, enabling our services to evolve into a coredriving distribution platform that provides content, news, games, ecommerce, OTO service, travel services and advertising and marketing. In comparison, ourcompetitors offer simple forms of media services on trains. We focus on personalized and targeted matching between users on long distance trips and services. Ourcompetitors focus on operating and generating internet traffic.We possess a complete set of technology system including network, client end and service and operation platform. We have patent protections for WiFiequipment on trains. Our technology strengths are briefly summarized below.WiFi EquipmentPatent protected. Supports WiFi/3G/4G telecom modules; 4 core CPU with X86 architecture, and SSD hard disk with big storage for localcontents.InfrastructureThe technology infrastructures include the application program system, big data gathering and processing systems, intelligence cloudsservice deployment structure systems and our WiFi hardware server deployment structure system. The operation center, big data center,contents center and railWiFi server system are built on this infrastructure. On the above layer, the equipment management platform,account and payment platform, contents management platform and advertisement distribution platform are set up for daily managementpurpose.LuoKuang strengthens the connection of services among people, setting and locations. In catering to people on the move, we anticipate strengthening therelationship between users and their locations in a given moment. Currently, LuoKuang provides the link between users and thirdparty service providers andprovides value added services to both users and thirdparty service providers. The connection is not simply a traffic diversion, but also the direct presentation ofrelevant services in the LuoKuang platform. The open API interface and independent product software package allows easy access by service providers anddevelopers and supports data service, advertisement operations, billing, users promotion and product marketing services. As an API product, LuoKuang does notcreate content or services. The content and services are provided by our partners in the LuoKuang platform. Now, the majority of top mobile internet content andservices providers in China have a presence in the Luokuang platform. Those include, but are not limited to, Toutiao, Wangyi News, iqiyi, Letv, YoudianCinema(Hollywood films), Sohu video, Phoenix Video, Kugou Music, FM Qingting, iReader, Baidu Literature, Phoenix Novel, Baidu Game, Meituan, Dianping, andsimilar content providers.22Our StrategyLuoKuang is positioned to provide API interface services and geographic information social services. The API interface services are provided within thetypical BC model. LuoKuang pushes the content and services from thirdparty service providers to users. The local businesses, service practitioners, residents, andforeign travelers are all defined as a “user” and may participate in social interactions based on local value information and generate UGC content. The socalled localvalue information is defined as information, views, evaluations, experiences and experience sharing related to the local cultural scene, native products,entertainment, food, tourism and activities.The LuoKuang user growth strategy is to have access to users through the travelers’ use of mobile devices in connection with longdistance train travel.Through deploying WiFi systems on trains and providing free WiFi access to passengers, LuoKuang is able to have consistent access to longdistance travelers.The WiFi system on the train has become a powerful user portal at the early stage of LuoKuang and has gained substantial user traffic. We are in a leading positionin terms of numbers of trains contracted and trains in operation with our free WiFi system. We have contracted with about 700 trains, which cover almost 560 millionannual passenger trips. As of the date of this report, approximately 290 trains are operating our rail WiFi system. We will continue to install our rail WiFi system inthe following years.The development strategy for LuoKuang encompasses the following:1.Enhance our local cycle service (a recommendation service system based on the location of travelers after their arrival, recommendations includingtourist attractions, local specialties and other items of interest), strengthen services for arrivals in the form of social interaction and focus on the valueof relationships between users and their current locations.2.Focus on the development of geographic positioning technology. Get the business of local cycle and users on train mixed together. We will put oureffort to maximize the synergy effect.3.Big Data: Behavior data about passenger trips is obtained via the traffic entrance of rail WiFi and these data will help to optimize our product.4.While enhancing setting service experiences and optimizing entertainment experiences, we will enrich ecommerce services on trains featuringrecommendations of customized products and ecommerce shopping guidance of products labeled with specific geographic location (and trafficdiversion).5.Focus on API positioning and attract more premium vertical service providers (contents and services).Intellectual PropertyWe have registered the following software copyrights, patents and trademarks for our business operations. We believe this intellectual property forms anintegral part of our competitive strength.23Patents:We have been granted some inventions by the State Intellectual Property Office of PRC. We possess a complete set of technology system includingnetwork, client end and service and operation platform. We have patent protections for WiFi equipment on trains. We have received the following patents:No.Name of patentTypeRegistrationNumberDate of Insurance1.Wireless communication multimedia chip business consumer informationacquisition terminal deviceInventionZL 2010 2 0528767.9Sep 21, 20112.A user behavior processing method and device for intelligent terminalInventionZL 2013 1 0301728.3May 27, 20153.A global positioning system terminal deviceInventionZL 2010 2 0253452.8Nov 7, 20114.A wireless multimedia serverInventionZL 2013 2 0220183.9Nov 13, 20135.Ordering system of passengers on trainInventionZL 2015 2 0095381.6Aug 5, 20156.A wireless multimedia serverInventionZL 2015 2 0201382.4Oct 28, 20157.An antenna structureInventionZL 2016 2 0424352.4Mar 1, 20178.Spatial data progressive transmission method and deviceInvention201010617383.9Jun 15, 20169.Methods and devices for conflict detection and avoidance of spatial entity elementlabelingInvention201010617385.8Mar 26, 201410.Spatial data processing method and deviceInvention201010617399.XJun 26, 201311.Method and device of spatial data simplificationInvention201010617400.9Mar 13, 201312.Method and device for judging the occlusion type of space entityInvention201010617403.2Sep 25, 201313.A method and device for distributed mapping of 3d model dataInvention201110274924.7Mar 26, 201414.Data simplification of 3d model, gradual transmission method and deviceInvention201110275336.5Mar 25, 201515.Spatial data transmission method and deviceInvention201110306393.5Dec 13, 201416.Methods and devices for spatial data processing, simplification and progressivetransmissionInvention201210104250.0Jun 10, 201517.Spatial data progressive transmission method and deviceInvention201310367021.2Jun 23, 201718.Simplification method and device of spatial dataInvention201310367128.7Sep 22, 201719.The method and device to accelerate transmission and display of graphic dataacross platformsInvention201210116149.7Aug 10, 201620.Methods and devices related to spatial data compression, decompression andprogressive transmissionInvention201310136682.4Nov 10, 2017We also have two patents outside of China.No.Name of patentCountryNationalRegistrationNumberDate ofInsurance1.Spatial data processing method and deviceJapan2012547439Jun 20, 20142.Methods and devices related to spatial data compression, decompression andprogressive transmissionU.S.A14/394,610Sep 5, 201724Software Copyrights:We have received the following software copyrights from the National Copyright Administration (“NCA”) of PRC:No.Name of CopyrightAchievement approachRegistration numberTime of obtainExpire time1.WAP PUSH Business operation platformsystemIndependent research anddevelopment2007SRBJ1464Jul 23, 200750 years2.TDSCDMA Streaming media businessmanagement platform software V1.0Independent research anddevelopment2009SRBJ0412Jan 22, 200950 years3.Content management platform systemsoftware V1.0Independent research anddevelopment2009SRBJ1374Apr 1, 200950 years4.Mobile multimedia broadcast electronicservice guide system software V1.0Independent research anddevelopment2009SRBJ1365Apr 1, 200950 years5.Mobile video business operation platformsystem V1.0Independent research anddevelopment2007SRBJ1463Jul 23, 200750 years6.Mobile multimedia broadcast emergencybroadcast platform software V1.0Independent research anddevelopment2010SRBJ0720Mar 5, 201050 years7.Mobile multimedia broadcast audio richmedia interactive platform softwareV1.0Independent research anddevelopment2010SRBJ0719Mar 5, 201050 years8.Printer typesetting and printing softwareV1.0Independent research anddevelopment2011SRBJ4190Sep 28, 201150 years9.Electronic newspaper business supportplatform software V1.0Independent research anddevelopment2011SRBJ4186Sep 28, 201150 years10.Public information business platformsoftware V1.0Independent research anddevelopment2011SRBJ3810Sep 27, 201150 years11.User interface scripting software V1.0Independent research anddevelopment2011SRBJ3809Sep 27, 201150 years12.Integrated business management platformsoftware V1.0Independent research anddevelopment2012SR003002Jan 16, 201250 years13.Interactive business development platformsoftwareIndependent research anddevelopment2011SRBJ4593Nov 29, 201150 years14.Instant messaging and messaging systemsoftwareIndependent research anddevelopment2014SR122231Aug 5, 201450 years15.General statistical platform software forclient productsIndependent research anddevelopment2014SR216662Dec 30, 201450 years16.CMMB Data broadcast managementplatform softwareIndependent research anddevelopment2009SRBJ0391Jan 22, 200950 years17.Integrated passenger train service systemIndependent research anddevelopment2012SR083665Sep 5, 201250 years25No.Name of CopyrightAchievement approachRegistration numberTime of obtainExpire time18.JHBY Train inspection managementsystemIndependent research anddevelopment2013SR015105Feb 21, 201350 years19.Integrated information engine platformsoftware V1.0Independent research anddevelopment2014SR040347Nov 30, 200150 years20.Super information engine developmentplatform software V5.0Independent research anddevelopment2014SR036792Mar 5, 200350 years21.Core map super network informationengine platform software V1.0Independent research anddevelopment2014SR036772Sep 15, 200750 years22.Integrated management of the grid gissoftware V1.0Independent research anddevelopment2014SR036808Jun 20, 200850 years23.Core map rural power grid equipment GPSpatrol system software V1.0Independent research anddevelopment2014SR036810Dec 10, 200850 years24.Diagram grid patrol PDA system softwareV1.0Independent research anddevelopment2014SR036778Dec 12, 200850 years25.Core map geographic information enginedesktop platform software V1.0Independent research anddevelopment2014SR036614Jan 15, 200950 years26.Integrated management of the gridgeographic information Web systemsoftware V1.0Independent research anddevelopment2014SR036799Mar 10, 200950 years27.Core map railway power supply equipmentGPS patrol system software V1.0Independent research anddevelopment2014SR036783Mar 25, 201050 years28.Core map network 3 d map server softwareV1.0Independent research anddevelopment2014SR036788Feb 20, 201150 years29.Core map network 3d map clientsoftwareV1.0Independent research anddevelopment2014SR036637Feb 22, 201150 years30.Core map 3d map network publishingplatform software V1.0Independent research anddevelopment2014SR036633Mar 10, 201150 years31.Core map 3d map network release pluginsystem software V1.0Independent research anddevelopment2014SR036622Mar 15, 201150 years32.Core map network 3d map smartphoneplatform software V1.0Independent research anddevelopment2014SR036638Apr 28, 201150 years33.Core map network GIS Shared mobileplatform software V1.0Independent research anddevelopment2014SR036634Oct 31, 201150 years34.Core map network GIS sharing platformsoftware V1.0Independent research anddevelopment2014SR036639Dec 16, 201150 yearsTrademarks:We have registered the following trademarks with the Trademark Office, State Administration for Industry and Commerce in the PRC:NoTrademarkClassification NumberValid PeriodRegistration Number1Y图形382010.04.212020.04.2067460692Y图形412010.09.072020.09.0667460673YRADIO文字352010.07.212020.07.2067334374YRADIO文字382010.04.21.2020.04.2067334385YRADIO文字412010.09.072020.09.0667334396LookLook图形382009.04.072019.04.0646660517LookLook图形422008.12.212018.12.2046660508YTV文字352010.07.212020.07.2067335799YTV文字382010.05.282020.05.27673357810YTV文字412010.09.072020.09.06673358111YTV文字422010.09.072020.09.06673358012YOUTV文字352010.07.212020.07.20673344013YOUTV文字382010.05.282020.05.27673344114xfeng文字352012.03.282022.03.27922914526NoTrademarkClassification NumberValid PeriodRegistration Number15xfeng文字382012.03.282022.03.27922916016xfeng文字412012.03.282022.03.27922919017xfeng文字422012.03.282022.03.27922922118中传视讯文字+图形422008.12.212018.12.20466604719中传视讯文字422008.12.212018.12.20466604820中传视讯文字382008.12.212018.12.20466604921新蜂文字382011.08.212021.08.20853890722新蜂文字422012.01.282022.01.27853907823新蜂.潮文字382011.08.212021.08.20853910424新蜂.潮文字422012.01.282022.01.27853914125新影力412014.08.282024.08.271228864326小人图形352014.08.282024.08.271228798527小人图形382014.08.282024.08.271228858028小人图形412014.08.282024.08.271228862929小人图形422014.08.282024.08.271228843530中传文字382014.08.282024.08.271228826731中传图形382014.08.282024.08.271228828932中童文字412014.08.072024.08.061221408533中童在线文字412014.08.072024.08.061221409234翠鸟文字382014.08.072014.08.061221405835翠鸟文字422014.08.072014.08.061221412536爱翠鸟文字382014.08.072024.08.061221406637爱翠鸟文字412014.08.072024.08.061221409638爱翠鸟文字422014.08.072024.08.061221412639翠鸟图形352014.08.072024.08.061221404040翠鸟图形382014.08.072024.08.061221407441翠鸟图形412014.08.072024.08.061221410042翠鸟图形422014.08.072024.08.061221413143信号小喇叭图形+CMEDIA412015.03.212025.03.201248043944LookLook图形382015.11.142025.11.131153342845LookLook图形422014.06.212024.06.201153372046LookLook文字382014.07.142024.07.131153406747LookLook文字422014.04.142024.04.131153422748L图形352014.02.282024.02.271153500249L图形382014.02.282024.02.271153507350L图形412014.02.282024.02.271153518151L图形422014.02.282024.02.271153526252箩筐图形412016.06.142026.06.131658022853箩筐图形422016.06.142026.06.131658022754箩筐文字422016.09.282026.09.271658024955箩筐文字412016.06.142026.06.131658025056箩筐文字352016.09.212026.09.201658025257箩筐文字92016.06.142026.06.131658025327NoTrademarkClassification NumberValid PeriodRegistration Number58箩筐图形382016.06.142026.06.131658022959箩筐图形352016.06.142026.06.131658023060箩筐图形92016.06.142026.06.131658023161微时光文字422016.09.282026.09.271658024762传游录屏文字92016.06.142026.06.131678214463传游录屏文字352016.06.142026.06.131678214364传游录屏文字382016.06.142026.06.131678214265传游录屏文字412016.06.142026.06.131678214166传游录屏文字422016.06.142026.06.131678214067录游器文字92016.06.142026.06.131678213568录游器文字352016.06.142026.06.131678213669录游器文字382016.06.142026.06.131678213770录游器文字412016.06.142026.06.131678213871录游器文字422016.06.142026.06.131678213972畅联TV文字412016.01.212026.01.201579246773畅联TV文字382016.01.212026.01.201579246874SuperEngine92016.01.212026.01.20812572275SuperEngine422016.01.212026.01.20812572876超擎9/422016.01.212026.01.201647320577SUPERENGINE9/422016.01.212026.01.2016473185*See below for an explanation of each classification number used in the table above.Classification No. 9: data processing apparatus, couplers (data processing equipment), computer software (recorded), monitors (computer programs), smartcards (integrated circuit cards), electrodynamic apparatus for the remote control of signals, alarms, and electric installations for the remote control of industrialoperations.Classification No. 35: auctioneering, sales promotion for others, marketing analysis, marketing research, importexport agencies, advisory services forbusiness management, business management for franchise, personnel management consultancy, relocation services for businesses, and systemization ofinformation into computer databases.Classification No. 38: Include services that enable at least sensory communication between two people. Such services include that allow one person to talkto another, send messages from one person to another, Make verbal or visual contact between one person and the other. This classification especially include theservice for broadcasting radio or television programs. Except for radio advertising services and telemarketing services.Classification No. 41: instruction services, teaching, education information, tuition, arranging and conducting of colloquiums, publication of electronicbooks and journals online, amusements, and vocational guidance.Classification No. 42: technical research, studies (technical project), computer software design, updating of computer software, recovery of computer data,computer systems analysis, installation of computer software, computer antivirus protection, and research and development for others. 28Business Certificates and QualificationsWe have obtained all necessary regulatory certifications to conduct our business in the PRC, including without limitation, the following: SoftwareEnterprise Recognition Certificate, Computer Information System Integration Qualification Certificate, Construction Enterprise Qualification Certificate, and SecurityTechnology & Protection Enterprise Certificate. We have also been properly certified as a hightech enterprise and have met the ISO 9001:2000 qualificationmanagement system.Legal ProceedingsAlthough we may, from time to time, be involved in litigation and claims arising out of our operations in the normal course of business, we do not believethat we are a party to any litigation that will have a material adverse impact on our financial condition or results of operations. To our knowledge, other than asdescribed below there are no material legal proceedings threatened against us. From time to time, we may be subject to various claims and legal actions arising in theordinary course of business. Following the consummation of the AEA, we became successor in interest to the legal proceedings described below.Litigation with Shanghai Fusheng Weier Intelligent Control Technology Co., Ltd.On January 22, 2016, Zhong Chuan Rui You and Shanghai Fusheng Weier Intelligent Control Technology Co., Ltd. (“Fusheng Weier”) signed a contract forequipment of $1,652,842 (RMB10,800,000). Since Zhong Chuan Rui You did not make the payments of $1,126,381 (RMB7,360,000) on the due dates, Fusheng Weierfiled a lawsuit against Zhong Chuan Rui You in Shanghai Xuhui District People's Court on October 8, 2016. On March 9, 2017, Xuhui District People's Court issuedthe verdict requiring Zhong Chuan Rui You to pay the overdue debts. In August 2017, C Media Limited made the payment of $512,075 (RMB3,346,000). Theremaining balance has been accrued in accounts payable. The payment schedule for the remaining balance is being negotiated by the two parties. On February 5,2018, a hearing was held adding Zhong Chuan Shi Xun as a defendant. The Group plans to settle the remaining balance within one year.Lawsuit with Gansu Jinlun Culture Media Co., Ltd.On August 22, 2014, Zhong Chuan Rui You and Gansu Jinlun Culture Media Co., Ltd. (“Gansu Jinlun”) signed a “Lanzhou Railway Bureau AirconditionedTrain WiFi Network System Advertising Operation Rights Agreement” for advertising on 72 trains of $1,467,880 (RMB9,604,633). Due to the dispute on theproject implementation, Zhong Chuan Rui You did not pay the advertising fee. On August 23, 2017, Gansu Jinlun filed a lawsuit with Gansu Intermediate People'sCourt. On December 19, 2017, Gansu Intermediate People's Court issued a verdict, ruling that Zhong Chuan Rui You settle the overdue advertising fee. Since only 18out of 72 trains have been installed with Wifi network system, Zhong Chuan Rui You disputed and appealed to the verdict. The next court trial date has not yet beendetermined.C Media and Gansu Jinlun are negotiating a potential settlement to resume the contract. According to the legal counsel, it is probable that the settlementwill amount to approximately $459,000 (RMB3,000,000); therefore, this amount has been accrued in accounts payable as at December 31, 2017.Litigation with Shenzhen Hua Xun Fang Zhou Technology Co., Ltd.On June 16, 2015, Zhong Chuan Rui You signed a cooperation agreement with Shenzhen Hua Xun Fang Zhou Technology Co., Ltd. (“Shenzhen Hua Xun”)and Xuesong Song, a major shareholder of C Media Limited. Pursuant to this agreement, Zhong Chuan Rui You procures equipment from Shenzhen Hua Xun.Xuesong Song acts as a joint liability guarantor for the entire debts of Zhong Chuan Rui You under this agreement. As Zhong Chuan Rui You did not make thepayments on the due dates, Shenzhen Hua Xun filed a lawsuit with Shenzhen Baoan District People's Court on May 31, 2016. On November 1, 2016, Zhong ChuanRui You, Xuesong Song and Shenzhen Hua Xun reached a settlement in Shenzhen Baoan District People's Court to settle $1,735,389 (RMB11,355,000) in fourinstalments. On December 30, 2017, the debt was assigned to C Media Limited.29C. ORGANIZATIONAL STRUCTUREThe following diagram illustrates our corporate structure and the place of formation and affiliation of each of our subsidiaries and affiliates as of September30, 2018.30The following diagram illustrates our corporate structure and the place of formation and affiliation of each of our subsidiaries and affiliates as of December31, 2017.Contractual Arrangements with Beijing Zhong Chuan Shi Xun Technology Limited’s Subsidiaries and Their Respective ShareholdersTo comply with the PRC legal restrictions on foreign ownership of companies that operate mobile application services, our subsidiaries operate in suchrestricted service areas in the PRC through certain PRC domestic companies, whose equity interests are held by certain management members or founders of the LKTechnology Ltd. Part of the registered capital of these PRC domestic companies was funded by certain management members or founders of LK Technology Ltd. LKTechnology Ltd., through its subsidiary Zhong Chuan Tian Xia Information and Technology (Shenzhen) Limited (the “WFOE”), has entered into an exclusivebusiness cooperation agreement with Beijing Zhong Chuan Shi Xun Technology Limited (“Zhong Chuan Shi Xun” or the “VIE”) the PRC domestic company, whichentitle the WFOE to receive a majority of profit of Zhong Chuan Shi Xun. In addition, Zhong Chuan Tian Xia Information and Technology (Shenzhen) Limited hasentered into certain agreements with those management members or founders, including equity interest pledge agreement of the equity interests held by thosemanagement members or founders and exclusive option agreement to acquire the equity interests in these companies when permitted by the PRC laws, rules andregulations. Details of the typical VIE structure of our significant consolidated VIE, primarily domestic companies associated with the operations such as ZhongChuan Shi Xun and its subsidiaries of Zhong Chuan Rui You, Huoerguosi Luokuang and Jiu Zhou Shi Dai, are set forth below: Exclusive Business Cooperation AgreementThe VIE has entered into an exclusive business services agreement with the WFOE, pursuant to which the WFOE provides exclusive business services tothe VIE. In exchange, the VIE pays a service fee to the WFOE which amounts to be no less than the 80% of the VIE’s aftertax profit, resulting in a transfer ofsubstantially all of the profits from the VIE to the WFOE.Exclusive Option AgreementThe VIE equity holders have granted the WFOE exclusive call options to purchase their equity interest in the VIE at an exercise price equal to the minimumprice as permitted by applicable PRC laws. The WFOE may nominate another entity or individual to purchase the equity interest, if applicable, under the call options.Each call option is exercisable subject to the condition that applicable PRC laws, rules and regulations do not prohibit completion of the transfer of the equityinterest pursuant to the call option. The VIE agrees not to distribute any dividends to the VIE equity holders without the approval of WFOE.31Equity Interest Pledge AgreementPursuant to the equity pledge agreement, the VIE equity holders have pledged all of their interests in the equity of the VIE as a continuing first prioritysecurity interest in favor of the WFOE to secure the performance of obligations by the VIEs and/or the equity holders under the exclusive business cooperationagreement. The WFOE is entitled to exercise its right to dispose of the VIE equity holders’ pledged interests in the equity of the VIE and has priority in receivingpayment by the application of proceeds from the auction or sale of such pledged interests, in the event of any breach or default under the exclusive businesscooperation agreement, if applicable. These equity pledge agreement remain in force until all the obligations under the exclusive business cooperation agreementhave been fulfilled.The exclusive business cooperation agreement and equity interest pledge agreement described above also enable the Company to receive substantially allof the economic benefits from the VIE by typically entitling the WFOE to all dividends and other distributions declared by the VIE and to any distributions orproceeds from the disposal by the VIE equity holders of their equity interests in the VIE.D. PROPERTY AND EQUIPMENTWe lease offices located at Lab 30 & Lab 32, SOHO 3Q, No 9, Guanghua Road, Chaoyang District, Beijing, which covers a floor space of 600 square meters.These leases expire at different times throughout 2018 and are renewable upon negotiation.ITEM 4A. UNRESOLVED STAFF COMMENTSNone.ITEM 5. OPERATING AND FINANCIAL REVIEW AND PROSPECTSA . OPERATING RESULTS.The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our consolidatedfinancial statements and the notes to those financial statements appearing elsewhere in this report. This discussion and analysis contains forwardlookingstatements that involve significant risks and uncertainties. As a result of many factors, such as our anticipated growth strategy, our plans to recruit moreemployees, our plans to invest in research and development to enhance our product or service lines, our future business development, results of operations andfinancial condition, expected changes in our net revenues and certain cost or expense items, our ability to attract and retain customers, trends and competitionin the enterprise mobile software application market, and the factors set forth elsewhere in this report, our actual results may differ materially from thoseanticipated in these forwardlooking statements. In light of those risks and uncertainties, there can be no assurance that the forwardlooking statementscontained in this report will in fact occur. You should not place undue reliance on the forwardlooking statements contained in this report.The forwardlooking statements speak only as of the date on which they are made, and, except to the extent required by U.S. federal securities laws, weundertake no obligation to update any forwardlooking statement to reflect events or circumstances after the date on which the statement is made or to reflectthe occurrence of unanticipated events. Further, the information about our intentions contained in this report is a statement of our intention as of the date of thisreport and is based upon, among other things, the existing regulatory environment, industry conditions, market conditions and prices and our assumptions as ofsuch date. We may change our intentions, at any time and without notice, based upon any changes in such factors, in our assumptions or otherwise.32Unless the context otherwise requires, all references to (i) “PRC” and “China” are to the People’s Republic of China; (ii) “U.S. dollar,” “$” and “US$”are to United States dollars; and (iii) “RMB”, “Yuan” and Renminbi are to the currency of the PRC or China.OverviewLuokung Technology was incorporated on October 27, 2009 under the laws of the British Virgin Islands. We are a holding company and conduct ouroperations through LK Technology Ltd., a British Virgin Islands limited liability company (“LK Technology”) and its whollyowned subsidiaries, MMB Limited andMobile Media (China) Limited and their respective subsidiaries and a contractuallycontrolled entity in the PRC named Beijing Zhong Chuan Shi Xun Technology,which hold the rights to deploy WiFi systems on about 700 trains in China, including 290 trains in which WiFi systems have already been installed and are inoperation. In May 2010, we consummated an initial public offering of our American Depository Shares, or ADSs, for gross proceeds of $16 million, and our ADSswere listed on the NASDAQ Capital Market under the ticker symbol “KONE”. Our ordinary shares are not currently listed on any trading market. Our AmericanDepository Shares (“ADSs”) were voluntarily delisted from the NASDAQ Capital Market on September 19, 2018. We have applied to NASDAQ for the listing of ourordinary shares on the NASDAQ Capital Market and received an approval for listing of Ordinary Shares on August 6, 2018, and as of the date of this transitionreport, that application and approval are currently under review.On August 17, 2018, we consummated an asset exchange transaction, pursuant to which we exchanged all issued and outstanding capital stock in TopskyInfoTech Holdings Pte Ltd., the parent of Softech, for the issued and outstanding capital stock of LK Technology (the “Asset Exchange”). In connection with theAsset Exchange, we changed our name on August 20, 2018, and on September 20, 2018, completed the issuance to the shareholders of C Media Limited, the formerparent of LK Technology, of (i) 185,412,599 of our ordinary shares, par value $0.01 per share and (ii) 1,000,000 of our preferred shares. Upon the consummation of theAsset Exchange, we ceased our previous business operations and became a company focused on the provision of WiFi and mobile application products for longdistance travelers in China.On August 25, 2018, LK Technology entered into a Stock Purchase Agreement (the “Agreement”) with the shareholders (“Shareholders”) of SuperengineHoldings Limited, a limited liability company organized under the laws of the British Virgin Islands (the “Superengine”), pursuant to which LK Technology acquiredall of the issued and outstanding capital stock of Superengine for an aggregate purchase price of US$60 million (the “Purchase Price”), which are paid by theissuance of our Ordinary Shares in an amount equal to the quotient of (x) the Purchase Price divided by (y) the average of the closing prices of the Ordinary Shareson the NASDAQ Capital Market over the 12 months period preceding July 31, 2018. We are a party to the Agreement in connection with the issuance of theOrdinary Shares and certain other limited purposes.Results of operations for the fiscal year ended December 31, 2017 compared to the fiscal year ended December 31, 2016.RevenueWe provide displaybased online advertising services to customers by integrating text description, image and video, and displaying the advertisements in aprominent position of LuoKuang Application. We recognize revenue in accordance with ASC 605, over the contractual term based on the agreements andconfirmation letters signed by both parties, commencing on the date the customer’s advertisement is displayed on our platform.For the year ended December 31, 2017, we had revenue of $26,082,417, as compared to revenue of $5,233,145 for the year ended December 31, 2016, anincrease of $20,849,272, or 398.4%, which was primarily due to the increase of our advertising clients.Cost of revenueOur cost of revenue primarily consists of depreciation, labor cost, WiFi equipment installation fees, data charges, annual payments to local railway bureau,other overhead costs.33Cost of revenue for the year ended December 31, 2017 was $5,547,779, representing a decrease of $767,725 or 12.2% as compared to $6,315,504 for the yearended December 31, 2016. The decrease was primarily attributable to the decrease in labor cost as a result of our cost control and a decrease in the number ofmaintenance staff. Additionally, data charges decreased as train passengers prefer using their mobile data, leading to a decrease in 3G and 4G data.Selling and marketing expenseOur selling and marketing expense mainly include promotional and marketing expenses and compensation for our sales and marketing personnel.Selling expense totaled $23,908,733 for the year ended December 31, 2017, as compared to $6,209,804 for the year ended December 31, 2016, an increase of$17,698,929 or 285.0%. The increase was primarily attributable to the increase in promotional and marketing activities conducted by the Company.General and administrative expenseOur general and administrative expenses consist primarily of salaries and benefits for our general and administrative personnel, rent, fees and expenses forlegal, accounting and other professional servicesGeneral and administrative expense totaled $2,451,249 for the year ended December 31, 2017, as compared to $2,108,854 for the year ended December 31,2016, an increase of $342,395 or 16.2%.Research and development expenses.Research and development expenses primarily consist of salaries and benefits for research and development personnel.Research and development expenses totaled $1,046,198 for the year ended December 31, 2017, as compared to $2,882,202 for the year ended December 31,2016, a decrease of $1,836,004 or 63.7%. The decrease was primarily attributable to the Company reduced its expenses in research and development temporarily asour products are quite stable at present.Loss from operationsAs a result of the factors described above, for the year ended December 31, 2017, loss from operations amounted to $6,871,542, as compared to loss fromoperations of $12,283,219 for the year ended December 31, 2016, a decrease of $5,411,677, or 44.1%.Other income/expenseOther income/expense mainly include interest income from bank deposits, foreign currency transaction gain, and loss from investment.Net lossAs a result of the factors described above, our net loss was $6,810,454 for the year ended December 31, 2017, compared to net loss of $13,049,031 for theyear ended December 31, 2016, a decrease of $6,238,577 or 47.8%.Foreign currency translation adjustmentOur reporting currency is the U.S. dollar. The functional currency of our parent company and subsidiaries of Merchant Supreme and Prime Cheer is the U.S.dollar and the functional currency of the Company’s subsidiaries incorporated in China is the Chinese Renminbi (“RMB”). The financial statements of oursubsidiaries incorporated in China are translated to U.S. dollars using period end rates of exchange for assets and liabilities, and average rates of exchange (for theperiod) for revenue, costs, and expenses. Net gains and losses resulting from foreign exchange transactions are included in the consolidated statements ofoperations and comprehensive loss. As a result of foreign currency translations, which are a noncash adjustment, we reported a foreign currency translation gain of$90,671 for the year ended December 31, 2017, as compared to a foreign currency translation loss of $387,375 for the year ended December 31, 2016. This noncashgain had the effect of increasing/decreasing our reported comprehensive income/loss.34Comprehensive lossAs a result of our foreign currency translation adjustment, we had comprehensive loss for the year ended December 31, 2017 of $6,719,783, compared tocomprehensive loss of $12,661,656 for the year ended December 31, 2016.B. LIQUIDITY AND CAPITAL RESOURCESThe information contained in “Item 5. Operating and Financial Review and Prospects – A. Operating Results – Liquidity and Capital Resources” isincorporated herein by reference.C. RESEARCH AND DEVELOPMENT, PATENTS AND LICENSES, ETC.The discussions of our research and development activities were contained in “Item 4. Information about our Company – B. Business Overview –Research and Development” and “Item 5. Operating and Financial Review and Prospects – A. Operating Results – Operating Expenses – Research and DevelopmentExpenses” are incorporated herein by reference. In the years ended December 31, 2017 and 2016, we spent $1,046,198 and $2,882,202, respectively, on research anddevelopment activities.D. TREND INFORMATION.Industry and Market OutlookChina has awarded licenses to mobile phone companies to provide the superfast 4G network to customers. The licenses, which are designed to give mobilephone users faster access to services, were granted by the government to China Mobile, China Unicom Hong Kong and China Telecom. Since the grants, ChinaMobile has offered 4G to subscribers from December 18, 2013. China Unicom and China Telecom, the country's other two major carriers, also offer 4G wireless. Thenumber of China Mobile 4G customers has exceeded 900 million by the end of October in 2017. The move greatly bolstered business for telecom equipment makersand a range of other companies.Under China’s 12th FiveYear Plan, a key priority is for China to transition from “Made in China” to “Designed in China.” In order to achieve this goal, thegovernment plans to heavily invest in science and technology education and R&D so as to further develop China’s intellectual property rights system and support“NextGeneration IT” as a Strategic Emerging Industry (SEI). Additionally, China plans to upgrade the technological capabilities of private and public services,including “triple play” services (the convergence of telecom, broadcasting and Internet networks), ecommerce, and egovernment and statistics systems.Furthermore, the government plans to invest in R&D of the "Internet of things" and cloud computing, and develop digital and virtual technologies.E. OFFBALANCE SHEET ARRANGEMENTSWe have not entered into any financial guarantees or other commitments to guarantee the payment obligations of any third parties. We have not enteredinto any derivative contracts that are indexed to our shares and classified as shareholder’s equity, or that are not reflected in our consolidated financial statements.Furthermore, except for the mortgage referenced above, we do not have any retained or contingent interest in assets transferred to an unconsolidated entity thatserves as credit, liquidity or market risk support to such entity. We do not have any variable interest in any unconsolidated entity that provides financing, liquidity,market risk or credit support to us or engages in leasing, hedging or research and development services with us.35F. TABULAR DISCLOSURE OF CONTRACTUAL OBLIGATIONSAs of December 31, 2017, we did not have any contractual obligations required to be disclosed in this Item 5.F. ITEM 6. DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES.A. DIRECTORS AND SENIOR MANAGEMENT.Executive Officers and DirectorsThe following table sets forth the names and ages as of the date of this transition report of each of our executive officers and directors:NameAgePositionXuesong Song50Chief Executive Officer, Chairman and DirectorDongpu Zhang50PresidentJie Yu34Chief Financial OfficerKegang Peng46Vice President and DirectorChuang Tao51DirectorDennis Galgano (1)(2)69Director (Independent)Jin Shi (1)(2)49Director (Independent)Jiming Ha (1)(3)56Director (Independent)Zhihao Xu (3)42Director (Independent)(1)Member of the Audit Committee.(2)Member of the Compensation Committee.(3)Member of the Nominating and Corporate Governance Committee.Set forth below is biographical information concerning our executive officers and directors.Xuesong Song is a cofounder of C Media Limited and served as its chairman of the board of directors and chief executive officer from 2012 until theconsummation of the AEA. From February 2014 through April 2017, Mr. Song served as a director of Seven Stars Cloud Group, Inc. (NASDAQ: SSC) and fromJanuary 2013 through February 2015, Mr. Song served as a director of Pingtan Marine Enterprise Ltd. (NASDAQ: PME). From May 2006 through January 2009, Mr.Song served as the Chairman of the Board of ChinaGrowth North Acquisition Corporation, a special purpose acquisition company, which acquired UIB GroupLimited in January 2009, in which he remains a director. Mr. Song has been a principal of Chum Capital Group Limited since August 2001, a merchant banking firmthat invests in growth Chinese companies and advises them in financings, mergers & acquisitions and restructurings, and chief executive officer of Beijing ChumInvestment Co., Ltd. since December 2001. Mr. Song has been a director of Mobile Vision Communication Ltd. since July 2004. Mr. Song received a Master’s ofBusiness Administration degree from Oklahoma City/Tianjin Program.Dongpu Zhang was appointed as the President of the Company effective on August 25, 2018. Mr. Dongpu Zhang has served as the General Manager ofSuperEngine Graphics Software Technology Development (Suzhou) Co., Ltd. (“SuperEngine Suzou”) and the Chief Executive Officer of SuperEngine HoldingLimited since September 2016. From February, 2014 to August, 2016, Mr. Zhang served as vice president of Industrial Development Group under China Fortune LandDevelopment Co., Ltd. From March, 2009 to February, 2014, Mr. Zhang served as the vice president of Aerospace Science and Technology Holding Group Co., Ltd.Mr. Zhang receive his Master Degree of Computer Science from Harbin Institute of Technology in 1994 and his Bachelor Degree of information system fromChangsha Institute of technology in 1991.Jie Yu served as the chief financial officer of C Media Limited from January 2018 until the consummation of the asset exchange transactions. From June 2016to January 2018, Mr. Yu served as chief financial officer and secretary of the board of directors of MTI Environment Group Limited. Prior to joining MTI, Mr. Yuserved as the senior manager at DA HUA CPA from November 2012 to May 2016. Previously, Mr. Yu served as the manager at Crowe Horwath (Hong Kong) CPA.Mr. Yu holds a bachelor degree in accounting and finance from University of Auckland and postgraduate diploma in accounting from University of Auckland.36Kegang Peng served as the Vice Chairman of the board of directors C Media Limited from October 2014 to the consummation of the asset exchangetransactions, and is now a member of the Company’s board of directors. Previously, from 2012 to 2014, Mr. Peng was chairman of the board and founder of JiangsuSuqian Jinghaiboyuan Information and Technology Co., Ltd. Mr. Peng studied at Beijing University of Aeronautics and Astronautics majoring computer andapplication.20F 1 f20f2017_luokungtech.htm AMENDMENT NO. 1 TO FORM 20FUNITED STATESSECURITIES AND EXCHANGE COMMISSIONWASHINGTON, D.C. 20549FORM 20F☐ REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934OR☐ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934For the Fiscal year ended _____________OR☒ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934For the transition period from October 1, 2017 to December 31, 2017☐ SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934Date of event requiring this shell company report Commission file number: 00134738Luokung Technology Corp.(Exact name of Registrant as specified in its charter)Not applicable(Translation of Registrant’s name into English)British Virgin IslandsLAB 32, SOHO 3Q, No 9, Guanghua Road, Chaoyang District, BeijingPeople’s Republic of China, 100020(Jurisdiction of incorporation or organization)(Address of principal executive offices)Mr. Muqiao GengLAB32, SOHO 3Q, No 9, Guanghua Road, Chaoyang District, BeijingPeople’s Republic of China 100020Tel: (86) 1085866721(Name, telephone, Email and/or facsimile number and address of company contact person)Securities registered or to be registered pursuant to Section 12(b) of the Act:Title of each className of each exchange on which registeredOrdinary shares, par value $0.01 per shareNonePreferred shares, par value $0.01 per shareNoneSecurities registered or to be registered pursuant to Section 12(g) of the Act:none(Title of Class)Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act:none(Title of Class)Indicate the number of outstanding shares of each of the issuer’s classes of capital or common stock as of the close of the period covered by the transitionreport. 187,097,599 Ordinary Shares, including 186,383,224 Ordinary Shares represented by 714,375 American Depositary Shares, and 1,000,000 Preferred Sharesoutstanding as of September 20, 2018.Indicate by check mark if the registrant is a wellknown seasoned issuer, as defined in Rule 405 of the Securities Act. ☐ Yes ☒ NoIf this report is an annual or transition report, indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of theSecurities Exchange Act of 1934. ☐ Yes ☒ NoIndicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirementsfor the past 90 days. ☒ Yes ☐ NoIndicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File requiredto be submitted and posted pursuant to Rule 405 of Regulation ST (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that theregistrant was required to submit and post such files). ☒ Yes ☐ NoIndicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a nonaccelerated filer. See definition of “accelerated filer andlarge accelerated filer” in Rule 12b2 of the Exchange Act. (Check one):Large accelerated filer ☐ Accelerated filer ☐ Nonaccelerated filer ☒Indicate by check mark which basis of accounting the registrant has used to prepare the financial statements included in this filing.U.S. GAAP ☒International Financial Reporting Standards as issuedby the International Accounting Standards Board ☐Other ☐If “Other” has been checked in response to the previous question, indicate by check mark which financial statement item the registrant has elected tofollow. Item 17 ☐ Item 18 ☐If this is an transition report, indicate by check mark whether the registrant is a shell company (as defined in Rule 12b2 of the ExchangeAct). ☐ Yes ☒ NoExplanatory NoteLuokung Technology Corp. (the “Company”) is filing this transition report on Form 20F (“Transition Report”) in connection with the completion of theexchange of certain of its assets for substantially all of the assets of C Media Limited (“C Media”) pursuant to that Asset Exchange Agreement, dated January 25,2018 (the “Original AEA”), as supplemented by the Addendum to Asset Exchange Agreement, dated October 3, 2018 (the “Addendum” and together with theOriginal AEA, the “AEA”). Following the consummation of the AEA, on October 4, 2018, the Company changed its fiscal year end from September 30 to the fiscalyear end used by C Media, December 31. This Transition Report covers the threemonth period from Octorber 1, 2017 to December 31, 2017, and the fiscal yearsdescribed herein.In this transition report:●References to the “Company”, “we”, “our” and “us” are to Luokung Technology Corp. and its consolidated subsidiaries and variable interestentity, except as the context otherwise requires;●This transition report on Form 20F covers the threemonth period from October 1, 2017 through December 31, 2017 (the “Transition Period”) andreflects our financial results thereof. Prior to this transition report on Form 20F, our two most recent annual reports on Form 20F cover the fiscalyears ended September 30, 2017 and September 30, 2016, respectively, and reflect financial results for the respective twelvemonth periods fromOctober 1 to September 30. Unless otherwise noted, all references to years are to the calendar year from January 1 to December 31 and referencesto our fiscal year or years are to the fiscal year or years which, prior to the Transition Period, ended September 30, while from and after theTransition Period, ended December 31;●References to an “ADS” are to an American Depositary Share, each of which represents one of our Ordinary Shares with a par value of $.01 pershare.Special Note Regarding Forwardlooking StatementsThis transition report contains forwardlooking statements that involve risks and uncertainties. These statements involve known and unknown risks,uncertainties and other factors that may cause our actual results, performance or achievements to be materially different from those expressed or implied by theforwardlooking statements.You can identify these forwardlooking statements by words or phrases such as “may,” “will,” “expect,” “anticipate,” “aim,” “estimate,” “intend,” “plan,”“believe,” “likely to” or other similar expressions. We have based these forwardlooking statements largely on our current expectations and projections about futureevents and financial trends that we believe may affect our financial condition, results of operations, business strategy and financial needs. You should not placeundue reliance on these forwardlooking statements, which apply only as of the date of this transition report. These forwardlooking statements include:●our future business development, results of operations and financial condition;●expected changes in our net revenues and certain cost or expense items;●our ability to attract and retain customers; and●trends and competition in the enterprise mobile software application market.You should read this transition report thoroughly with the understanding that our actual future results may be materially different from, and/or worse, thanwhat we expect. We qualify all of our forwardlooking statements by these cautionary statements. Other sections of this transition report include additional factorswhich could adversely impact our business and financial performance. Moreover, we operate in an evolving environment. New risk factors and uncertainties emergefrom time to time and it is not possible for our management to predict all risk factors and uncertainties, nor can we assess the impact of all factors on our business orthe extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forwardlooking statements.This transition report also contains estimates, projections and statistical data related to the market for the provision of WiFi and mobile applications inChina. This market data, including data from IDC, a leading provider of market data and intelligence, speaks as of the date it was published and includes projectionsthat are based on a number of assumptions and are not representations of fact. The market for the provision of WiFi and mobile applications in China may not growat the rates projected by the market data, or at all. The failure of the market to grow at the projected rates may materially and adversely affect our business and themarket price of our ADSs. In addition, the rapidly changing nature of the market for the provision of WiFi and mobile applications subjects any projections orestimates relating to the growth prospects or future condition of our market to significant uncertainties. If any one or more of the assumptions underlying the marketdata proves to be incorrect, actual results may differ from the projections based on these assumptions.You should not rely upon forwardlooking statements as predictions of future events. We undertake no obligation to update or revise any forwardlookingstatements, whether as a result of new information, future events or otherwise.TABLE OF CONTENTSPart IItem 1.Identity of Directors, Senior Management and Advisers.1Item 2.Offer Statistics and Expected Timetable.1Item 3.Key Information.1A.Selected Financial Data.1B.Capitalization and Indebtedness.3C.Reasons for the Offer and Use of Proceeds.3D.Risk Factors.3Item 4.Information on the Company.19A.History and Development of the Company.19B.Business Overview.20C.Organizational Structure.30D.Property, Plants and Equipment.32Item 4A.Unresolved Staff Comments.32Item 5.Operating and Financial Review and Prospects.32A.Operating Results.32B.Liquidity and Capital Resources.35C.Research and Development, Patents and Licenses, etc.35D.Trend Information.35E.Offbalance Sheet Arrangements.35F.Tabular Disclosure of Contractual Obligations.36Item 6.Directors, Senior Management and Employees.36A.Directors and Senior Management.36B.Compensation.37C.Board Practices.40D.Employees.43E.Share Ownership.43Item 7.Major Shareholders and Related Party Transactions.44A.Major Shareholders.44B.Related Party Transactions.45C.Interests of Experts and Counsel.45Item 8.Financial Information.45A.Consolidated Statements and Other Financial Information.45B.Significant Changes.46Item 9.The Offer and Listing.46A.Offer and Listing Details.46B.Plan of Distribution.47C.Markets.47D.Selling shareholders.48E.Dilution.48F.Expenses of the issue.48Item 10.Additional Information.48A.Share Capital.48B.Memorandum and Articles of Association.48C.Material Contracts.53D.Exchange Controls.54E.Taxation.61F.Dividends and Paying Agents.67G.Statement by Experts.67H.Documents on Display.67I.Subsidiary Information.68Item 11.Quantitative and Qualitative Disclosures about Market Risk.68Item 12.Description of Securities Other than Equity Securities.69A.Debt Securities.69B.Warrants and Rights.69C.Other Securities.69D.American Depositary Shares.69iPart IIItem 13.Defaults, Dividend Arrearages and Delinquencies.71Item 14.Material Modifications to the Rights of Security Holders and Use of Proceeds.71Item 15.Controls and Procedures.71Item 16.[Reserved.]72Item 16A.Audit Committee Financial Expert.72Item 16B.Code of Ethics.73Item 16C.Principal Accountant Fees and Services.73Item 16D.Exemptions from the Listing Standards for Audit Committees.73Item 16E.Purchases of Equity Securities by the Issuer and Affiliated Purchasers.73Item 16F.Change in Registrant’s Certifying Accountant.73Item 16G.Corporate Governance.73Item 16H.Mine Safety Disclosure.73Part IIIItem 17.Financial Statements.74Item 18.Financial Statements.74Item 19.Exhibits.74Index to Consolidated Financial StatementsF1iiPART IITEM 1. IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS.The directors of Luokung Technology Corp. are Xuesong Song, Kegang Peng, Dennis Galgano, Jin Shi, Jiming Ha, Zhihao Xu and Chuang Tao. Thebusiness address for our directors is LAB 32, SOHO 3Q, No 9, Guanghua Road, Chaoyang District, Beijing, People’s Republic of China.Moore Stephens CPA Limited has served as our auditor since October 5, 2018, and is located at 801806 Silvercord Tower 1, 30 Canton road, Tsimshatsui,Kowloon, Hong Kong. BDO China Shun Lun Pan Certified Public Accountants LLP served as our auditors for the last three years, and are located at 4F, No. 61Nanjing Road, Shanghai, People’s Republic of China.Garvey Schubert Barer, P.C., serves as our legal counsel in the United States, and is located at Flour Mill Building, 1000 Potomac Street NW, Suite 200,Washington, D.C., 200073501.Conyers Dill & Pearlman serves as our legal counsel with regard to the laws of the British Virgin Islands, and is located at 29th Floor, One Exchange Square,8 Connaught Place, Central, Hong Kong.ITEM 2. OFFER STATISTICS AND EXPECTED TIMETABLE.Not applicable.ITEM 3. KEY INFORMATION.A. SELECTED FINANCIAL DATA.Luokung Technology Corp. and its consolidated subsidiaries (“Luokung Technology”, “we”, “us”, or “the Company”) consummated an asset exchangeagreement pursuant to which we exchanged our existing assets with those of C Media Limited (the “Asset Exchange”) on August 17, 2018, and we changed ourname from Kingtone Wirelessinfo Solution Holding Ltd. to our current name on August 20, 2018. On October 4, 2018, in connection with the consummation of the Asset Exchange, we changed our fiscal year end from September 30 to December 31.1The selected financial data for the fiscal years ended December 31 2017 and 2016 have been derived from our audited consolidated and combined financialstatements. The selected consolidated and combined financial data should be read in conjunction with our audited financial statements and the accompanying notesand “Item 5 – Operating and Financial Review and Prospects.” Our consolidated and combined financial statements are prepared and presented in accordance withUnited States generally accepted accounting principles, or U.S. GAAP. Our historical results do not necessarily indicate our results expected for any future periods.You should not view our historical results as an indicator of our future performance.LK TECHNOLOGY LTD. AND SUBSIDIARIESSELECTED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS(IN U.S. DOLLARS)For the years ended December 31,20172016Revenues$26,082,417$5,233,145Less: Cost of revenues5,547,7796,315,504Less: Operating expenses:Selling and marketing23,908,7336,209,804General and administrative2,451,2492,108,854Research and development1,046,1982,882,202Total operating expenses27,406,18011,200,860Loss from operations(6,871,542)(12,283,219)Other income (expense):Interest expense(26,611)(4,412)Foreign exchange gains(losses)350,679(298,257)Loss from investment(428,571)Other income (expense), net(262,980)(34,572)Total other income (expense), net61,088(765,812)Loss before income taxes(6,810,454)(13,049,031)Income taxesNet loss$(6,810,454)$(13,049,031)Other comprehensive income:Foreign currency translation adjustment90,671387,375Total comprehensive loss$(6,719,783)$(12,661,656)2LK TECHNOLOGY LTD. AND SUBSIDIARIESSELECTED CONSOLIDATED BALANCE SHEETS(IN U.S. DOLLARS)As of December 31,20172016Accounts receivable, net of allowance for doubtful accounts9,729,6251,865,836Amounts due from related parties11,760,692Property and equipment, net5,044,8727,771,027Goodwill7,239,9367,239,936TOTAL ASSETS37,582,85821,114,832Accounts payable8,784,5186,446,584Accrued liabilities and other payables12,962,91211,329,613Total liabilities25,311,11333,905,520Total Shareholder’s Equity (Deficit)12,271,745(12,790,688)TOTAL LIABILITIES AND SHAREHOLDER’S EQUITY (DEFICIT)37,582,85821,114,832B. CAPITALIZATION AND INDEBTEDNESS.Not applicable.C. REASONS FOR THE OFFER AND USE OF PROCEEDS.Not applicable.D. RISK FACTORS.An investment in our ADSs and ordinary shares involves a high degree of risk. You should carefully consider the risks and uncertainties described belowtogether with all other information contained in this transition report, including the matters discussed under “Special Note Regarding ForwardLooking Statements,”before you decide to invest in our ADSs or ordinary shares. You should pay particular attention to the fact that we are a holding company with substantialoperations in China and are subject to legal and regulatory environments that in many respects differ from those of the United States. If any of the following risks, orany other risks and uncertainties that are not presently foreseeable to us, actually occur, our business, financial condition, results of operations, liquidity and ourfuture growth prospects would be materially and adversely affected. You should also consider all other information contained in this transition report beforedeciding to invest in our ADSs or ordinary shares.Risks Related to Our Company and Our IndustryThe Company had incurred negative cash flows from operating activities and net losses as of December 31, 2017. These matters raise substantial doubt aboutthe Company’s ability to continue as a going concern.The Company’s consolidated financial statements are prepared using generally accepted accounting principles in the United States of America applicableto a going concern, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. As of and for the year endedDecember 31, 2017, the Company had incurred significant operating losses and working capital deficit. The ability of the Company to continue as a going concern isdependent on the Company obtaining adequate capital to fund operating losses until it becomes profitable. If the Company is unable to obtain adequate capital, itcould be forced to cease operations. The accompanying consolidated financial statements do not include any adjustments that might be necessary if the Companyis unable to continue as a going concern.3We may undertake acquisitions, investments, joint ventures or other strategic alliances, which could have a material adverse effect on our ability to manageour business. In addition, such undertakings may not be successful.Our strategy includes plans to grow both organically and through acquisitions, participation in joint ventures or other strategic alliances. Joint venturesand strategic alliances may expose us to new operational, regulatory and market risks, as well as risks associated with additional capital requirements. We may not beable, however, to identify suitable future acquisition candidates or alliance partners. Even if we identify suitable candidates or partners, we may be unable tocomplete an acquisition or alliance on terms commercially acceptable to us. If we fail to identify appropriate candidates or partners, or complete desired acquisitions,we may not be able to implement our strategies effectively or efficiently. In addition, our ability to successfully integrate acquired companies and their operations may be adversely affected by several factors. These factorsinclude:1.diversion of management’s attention;2.difficulties in retaining customers of the acquired companies;3.difficulties in retaining personnel of the acquired companies;4.entry into unfamiliar markets;5.unanticipated problems or legal liabilities; and6.tax and accounting issues.If we fail to integrate acquired companies efficiently, our earnings, revenue growth and business could be negatively affected.Due to intense competition for highlyskilled personnel, we may fail to attract and retain enough sufficiently trained employees to support our operations; ourability to bid for and obtain new projects may be negatively affected and our revenues could decline as a result.The IT industry relies on skilled employees, and our success depends to a significant extent on our ability to attract, hire, train and retain qualifiedemployees. There is significant competition in China for professionals with the skills necessary to develop the products and perform the services we offer to ourcustomers. Increased competition for these professionals, in the mobile application design area or otherwise, could have an adverse effect on us if we experiencesignificant increase in the attrition rate among employees with specialized skills, which could decrease our operating efficiency and productivity and could lead to adecline in demand for our services.In addition, our ability to serve existing customers and business partners and obtain new business will depend, in large part, on our ability to attract, trainand retain skilled personnel that enable us to keep pace with growing demands for wifi connectivity and mobile applications, evolving industry standards andchanging customer preferences. Our failure to attract, train and retain personnel with the qualifications necessary to fulfill the needs of our existing and futurecustomers or to assimilate new employees successfully could have a material adverse effect on our business, financial condition and results of operations. Ourfailure to retain our key personnel on business development or find suitable replacements of the key personnel upon their departure may lead to shrinking newimplementation projects, which could materially adversely affect our business.4Our business depends substantially on the continuing efforts of our senior executives and other key personnel, and our business may be severely disrupted if welose their services.Our future success heavily depends upon the continued services of our senior executives and other key employees, particularly since we recentlyappointed a new chairman. We are reliant on the services of Mr. Xuesong Song, our chairman, chief executive officer and member of our board of directors. If one ormore of our senior executives or key employees is unable or unwilling to continue in his or her present position, we may not be able to replace such employee easily,or at all, we may incur additional expenses to recruit, train and retain replacement personnel, our business may be severely disrupted, and our financial condition andresults of operations may be materially adversely affected.Our business could suffer if our executives and directors compete against us and our noncompetition agreements with them cannot be enforced.If any of our senior executives or key employees joins a competitor or forms a competing company, we may lose customers, knowhow and keyprofessionals and staff members to them. Also, if any of our business development managers who keep a close relationship with our customers and businesspartners joins a competitor or forms a competing company, we may lose customers, and our revenues may be materially adversely affected. Most of our executiveshave entered, or will soon enter, into employment agreements with us that contain or will contain noncompetition provisions. However, if any dispute arisesbetween our executive officers and us, such noncompetition provisions may not be enforceable, especially in China, where all of these executive officers and keyemployees reside, in light of the uncertainties with China’s legal system. See “Risk Factors — Risks Related to Doing Business in China — Uncertainties withrespect to the PRC legal system could adversely affect us.”Our computer networks may be vulnerable to security risks that could disrupt our services and adversely affect our results of operations.Our computer networks may be vulnerable to unauthorized access, computer hackers, computer viruses and other security problems caused byunauthorized access to, or improper use of, systems by third parties or employees. A hacker who circumvents security measures could misappropriate proprietaryinformation or cause interruptions or malfunctions in operations. Computer attacks or disruptions may jeopardize the security of information stored in andtransmitted through computer systems and mobile devices of our customers. Actual or perceived concerns that our systems may be vulnerable to such attacks ordisruptions may deter customers from using our services. As a result, we may be required to expend significant resources to protect against the threat of thesesecurity breaches or to alleviate problems caused by these breaches, which could adversely affect our results of operations.If we do not continually enhance our solutions and service offerings, we may have difficulty in retaining existing customers and attracting new customers.We believe that our future success will depend, to a significant extent, upon our ability to enhance our existing applications and platform, and to introducenew features to meet the preferences and requirements of our customers in a rapidly developing and evolving market. Unexpected technical, operational, distributionor other problems could delay or prevent the introduction of one or more of these products or services, or any products or services that we may plan to introduce inthe future. Our present or future products may not satisfy the evolving preferences and tastes of our customers, and these solutions and services may not achieveanticipated market acceptance or generate incremental revenue. If we are unable to anticipate or respond adequately to the need for service or productenhancements due to resource, technological or other constraints, our business, financial condition and results of operations could be materially and adverselyaffected.5If we are unable to develop competitive new products and service offerings our future results of operations could be adversely affected.Our future revenue stream depends to a large degree on our ability to utilize our technology in a way that will allow us to offer new types of mobileapplications and services to a broader customer base. We will be required to make investments in research and development in order to continually develop newsoftware applications and related service offerings, enhance our existing platform, mobile applications and related service offerings and achieve market acceptanceof our mobile applications and service offerings. We may incur problems in the future in innovating and introducing new mobile applications and service offerings.Our developmentstage mobile applications may not be successfully completed or, if developed, may not achieve significant customer acceptance. If we are unableto successfully define, develop and introduce competitive new mobile applications, and enhance existing mobile applications, our future results of operations wouldbe adversely affected. The timely availability of new applications and their acceptance by customers are important to our future success. A delay in the developmentof new applications could have a significant impact on its results of operations.Changes in technology could adversely affect our business by increasing our costs, reducing our profit margins and causing a decline in our competitiveness.China’s wireless telecom industry, in which we operate, is characterized by rapidly changing technology, evolving industry standards, frequentintroductions of new services and solutions and enhancements as well as changing customer demands. New solutions and new technologies often render existingsolutions and services obsolete, excessively costly or otherwise unmarketable. As a result, our success depends on our ability to adapt to the latest technologicalprogress, such as the 5G standard and technologies, and to develop or acquire and integrate new technologies into our platform, mobile applications and relatedservices. Advances in technology also require us to commit substantial resources to developing or acquiring and then deploying new technologies for use in ouroperations. We must continuously train personnel in new technologies and in how to integrate existing hardware and software systems with these newtechnologies. We may not be able to adapt quickly to new technologies or commit sufficient resources to compete successfully against existing or new competitorsin bringing to market solutions and services that incorporate these new technologies. We may incur problems in the future in innovating and introducing new mobileapplications and service offerings. Our development of new mobile applications and platform enhancements may not be successfully completed or, if developed,may not achieve significant customer acceptance. If we fail to adapt to changes in technologies and compete successfully against established or new competitors,our business, financial condition and results of operations could be adversely affected.Problems with the quality or performance of our hardware, software or other systems may cause delays in the introduction of new solutions or result in the lossof customers and revenues, which could have a material and adverse effect on our business, financial condition and results of operations.Our hardware and software systems are complex and may contain defects, errors or bugs when first introduced to the market or to a particular customer, oras new versions are released. Because we cannot test for all possible scenarios, our systems may contain errors that are not discovered until after they have beeninstalled or implemented, and we may not be able to timely correct these problems. These defects, errors or bugs could interrupt or delay the completion of projectsor sales to our customers. In addition, our reputation may be damaged and we may fail to acquire new projects from existing customers or new customers. Errors mayoccur when we provide systems integration and maintenance services. Even in cases where we have agreements with our customers that contain provisionsdesigned to limit our exposure to potential claims and liabilities arising from customer problems, these provisions may not effectively protect us against such claimsin all cases and in all jurisdictions. In addition, as a result of business and other considerations, we may undertake to compensate our customers for damages arisingfrom the use of our solutions, even if our liability is limited by these provisions. Moreover, claims and liabilities arising from customer problems could also result inadverse publicity and materially and adversely affect our business, results of operations and financial condition. We currently do not carry any product or serviceliability insurance and any imposition of liability on us may materially and adversely affect our business and increase our costs, resulting in reduced revenues andprofitability.Our products may contain undetected software defects, which could negatively affect our revenues.Our software products are complex and may contain undetected defects. Although we test our products, it is possible that errors may be found or occur inour new or existing products after we have commenced commercial shipment of those products. Defects, whether actual or perceived, could result in adversepublicity, loss of revenues, product returns, a delay in market acceptance of our products, loss of competitive position or claims against us by customers. Any suchproblems could be costly to remedy and could cause interruptions, delays, or cessation of our product sales, which could cause us to lose existing or prospectivecustomers and could negatively affect our results of operations.6We may be subject to infringement, misappropriation and indemnity claims in the future, which may cause us to incur significant expenses, pay substantialdamages and be prevented from providing our services or technologies.Our success depends, in part, on our ability to carry out our business without infringing the intellectual property rights of third parties. Patent andcopyright law covering softwarerelated technologies is evolving rapidly and is subject to a great deal of uncertainty. Our selfdeveloped or licensed technologies,processes or methods may be covered by thirdparty patents or copyrights, either now existing or to be issued in the future. Any potential litigation may cause us toincur significant expenses. Thirdparty claims, if successfully asserted against us may cause us to pay substantial damages, seek licenses from third parties, payongoing royalties, redesign our services or technologies, or prevent us from providing services or technologies subject to these claims. Even if we were to prevail,any litigation would likely be costly and timeconsuming and divert the attention of our management and key personnel from our business operations.Our failure to protect our intellectual property rights may undermine our competitive position, and subject us to costly litigation to protect our intellectualproperty rights.Any misappropriation of our technology or the development of competitive technology could seriously harm our business. We regard a substantial portionof our hardware and software systems as proprietary and rely on statutory copyright, trademark, patent, trade secret laws, customer license agreements, employeeand thirdparty nondisclosure agreements and other methods to protect our proprietary rights. Nevertheless, these resources afford only limited protection and theactions we take to protect our intellectual property rights may not be adequate. In particular, third parties may infringe or misappropriate our proprietarytechnologies or other intellectual property rights, which could have a material adverse effect on our business, financial condition and results of operations. Inaddition, intellectual property rights and confidentiality protection in China may not be as effective as in the United States, and policing unauthorized use ofproprietary technology can be difficult and expensive. Further, litigation may be necessary to enforce our intellectual property rights, protect our trade secrets ordetermine the validity and scope of the proprietary rights of others. The outcome of any such litigation may not be in our favor. Any such litigation may be costlyand may divert management attention, as well as our other resources, away from our business. An adverse determination in any such litigation will impair ourintellectual property rights and may harm our business, prospects and reputation. In addition, we have no insurance coverage against litigation costs and wouldhave to bear all litigation costs in excess of the amount recoverable from other parties. The occurrence of any of the foregoing could have a material adverse effecton our business, financial condition and results of operations. Our solutions incorporate a portion of, and work in conjunction with, thirdparty hardware and software solutions. If these thirdparty hardware or softwaresolutions are not available to us at reasonable costs, or at all, our results of operations could be adversely impacted.Although our hardware and software systems and mobile applications primarily rely on our own core technologies, some elements of our systemsincorporate a small portion of thirdparty hardware and software solutions. If any third party were to discontinue making their intellectual property available to us orour customers on a timely basis, or increase materially the cost of their licensing such intellectual property, or if our systems or applications failed to properlyfunction or interoperate with replacement intellectual property, we may need to incur costs in finding replacement thirdparty solutions and/or redesigning oursystems or applications to replace or function with or on replacement thirdparty proprietary technology. Replacement technology may not be available on termsacceptable to us or at all, and we may be unable to develop alternative solutions or redesign our systems or applications on a timely basis or at a reasonable cost. Ifany of these were to occur, our results of operations could be adversely impacted.7Our ability to sell our products is highly dependent on the quality of our service and support offerings, and our failure to offer high quality service could have amaterial adverse effect on our ability to market and sell our products.Our customers depend upon our customer service and support staff to resolve issues relating to our products. Highquality support services are critical forthe successful marketing and sale of our products. If we fail to provide highquality support on an ongoing basis, our customers may react negatively and we maybe materially and adversely affected in our ability to sell additional products to these customers. This could also damage our reputation and prospects with potentialcustomers. Our failure to maintain highquality support services could have a material and adverse effect on our business, results of operations and financialcondition.Weaknesses in our internal controls over financial reporting or disclosure controls and procedures may have a material adverse effect on our business, theprice of our ordinary shares, operating results and financial condition.We are required to establish and maintain appropriate internal controls over financial reporting and disclosure controls and procedures. Pursuant to Section404 of the SarbanesOxley Act of 2002 and the related rules adopted by the Securities and Exchange Commission, every public company is required to include amanagement report on its internal controls over financial reporting in its transition report, which contains management’s assessment of the effectiveness of thecompany’s internal controls over financial reporting. This requirement first applied to our annual report on Form 20F for the fiscal year ended on September 30,2011. In connection with our assessments of our disclosure controls and procedures and internal controls over financial reporting, management concluded that as ofSeptember 30, 2018, our disclosure controls and procedures and our internal controls over financial reporting were not effective due to lack of U.S. generallyaccepted accounting principles (“U.S. GAAP”) expertise in our current accounting team. Please refer to the discussion under Item 15, “Controls and Procedures” forfurther discussion of our material weakness as of December 31, 2017. Should we be unable to remediate the material weakness promptly and effectively, suchweakness could harm our operating results, result in a material misstatement of our financial statements, cause us to fail to meet our financial reporting obligations orprevent us from providing reliable and accurate financial reports or avoiding or detecting fraud. This, in turn, could result in a loss of investor confidence in theaccuracy and completeness of our financial reports, which could have an adverse effect on the trading price of our ordinary shares. Any litigation or otherproceeding or adverse publicity relating to the material weaknesses could have a material adverse effect on our business and operating results. We have very limited insurance coverage which could expose us to significant costs and business disruption.We do not maintain any insurance coverage for our leased properties. Should any natural catastrophes such as earthquakes, floods, typhoons or any actsof terrorism occur in Beijing, China, where our head office is located and most of our employees are based, or elsewhere in China, we might suffer not onlysignificant property damages, but also loss of revenues due to interruptions in our business operations, which could have a material adverse effect on our business,operating results or financial condition.The insurance industry in China is still at an early stage of development. Insurance companies in China offer limited business insurance products, and donot, to our knowledge, offer business liability insurance. As a result, we do not have any business liability insurance coverage for our operations. Moreover, whilebusiness disruption insurance is available, we have determined that the risks of disruption and cost of the insurance are such that we do not require it at this time.Any business disruption, litigation or natural disaster might result in substantial costs and diversion of resources, particularly if it affects our technology platformswhich we depend on for delivery of our software and services, and could have a material adverse effect on our financial condition and results of operations.We may be liable to our customers for damages caused by unauthorized disclosure of sensitive and confidential information, whether through our employees orotherwise.We are typically required to manage, utilize and store sensitive or confidential customer data in connection with the products and services we provide.Under the terms of our customer contracts, we are required to keep such information strictly confidential. We seek to implement specific measures to protectsensitive and confidential customer data. We require our employees to enter into nondisclosure agreements to limit such employees’ access to, and distribution of,our customers’ sensitive and confidential information and our own trade secrets. We can give no assurance that the steps taken by us in this regard will be adequateto protect our customers’ confidential information. If our customers’ proprietary rights are misappropriated by our employees, in violation of any applicableconfidentiality agreements or otherwise, our customers may consider us liable for that act and seek damages and compensation from us. However, we currently donot have any insurance coverage for mismanagement or misappropriation of such information by our employees. Any litigation with respect to unauthorizeddisclosure of sensitive and confidential information might result in substantial costs and diversion of resources and management attention.8We may face intellectual property infringement claims that could be timeconsuming and costly to defend. If we fail to defend ourselves against such claims, wemay lose significant intellectual property rights and may be unable to continue providing our existing products and services.It is critical that we use and develop our technology and products without infringing upon the intellectual property rights of third parties, includingpatents, copyrights, trade secrets and trademarks. Intellectual property litigation is expensive and timeconsuming and could divert management’s attention from ourbusiness. A successful infringement claim against us, whether with or without merit, could, among others things, require us to pay substantial damages, developnoninfringing technology, or rebrand our name or enter into royalty or license agreements that may not be available on acceptable terms, if at all, and cease making,licensing or using products that have infringed a third party’s intellectual property rights. Protracted litigation could also result in existing or potential customersdeferring or limiting their purchase or use of our products until resolution of such litigation, or could require us to indemnify our customers against infringementclaims in certain instances. Also, we may be unaware of intellectual property registrations or applications relating to our services that may give rise to potentialinfringement claims against us. Parties making infringement claims may be able to obtain an injunction to prevent us from delivering our services or usingtechnology containing the allegedly infringing intellectual property. Any intellectual property litigation could have a material adverse effect on our business, resultsof operations or financial condition. Seasonality and fluctuations in our customers’ spending cycle and other factors can cause our revenues and operating results to vary significantly from quarterto quarter and from year to year.Our revenues and operating results will vary significantly from quarter to quarter and from year to year due to a number of factors, many of which areoutside of our control. Our new lines of business acquired upon the consummation of the asset exchange transaction discussed below see higher customer use andactivity during the Chinese New Year holiday than other times during the year when rail travel is high, which lead to higher revenue during this period as morecustomers would like to place more advertising. Due to these and other factors, our operating results may fluctuate significantly from quarter to quarter and fromyear to year. These fluctuations are likely to continue in the future, and operating results for any period may not be indicative of our future performance in any futureperiod.Our corporate actions are substantially controlled by our principal shareholders, who can cause us to take actions in ways you may not agree with.Mr. Xuesong Song, our chairman, chief executive officer and a member of our board of directors, beneficially owns 19.31% of our outstanding ordinaryshares and 1,000,000 preferred shares, and each preferred share has the right to 399 votes at a meeting of the members of the Company. Our officers and directors asa group beneficially own an aggregate of approximately 33.69% of our outstanding ordinary shares. These shareholders, acting individually or as a group, couldexert control and substantial influence over matters such as electing directors, amending our constitutional documents, and approving acquisitions, mergers or otherbusiness combination transactions. This concentration of ownership and voting power may also discourage, delay or prevent a change in control of our company,which could deprive our shareholders of an opportunity to receive a premium for their shares as part of a sale of our company and might reduce the price of ourshares. Alternatively, our controlling shareholders may cause a merger, consolidation or change of control transaction even if it is opposed by our othershareholders, including those who purchase shares in this offering.9We depend on a small number of customers to derive a significant portion of our revenues. If we were to become dependent again upon a few customers, suchdependency could negatively impact our business, operating results and financial condition.We derived a material portion of our revenues from a small number of customers. In the years ended December 31, 2017 and 2016, our five largestcustomers accounted for 99.8% and 78.5% of our total sales, respectively, and our largest customer Guangdong Zhanshi Media Advertising Co., Ltd. accounted forapproximately 80.8% of our total sales during for the fiscal year ended December 31, 2017. As our customer base may change from yeartoyear, during such yearsthat the customer base is highly concentrated, the fluctuation of our sales to any of such major customers could have a material adverse effect on our business,operating results and financial condition. Moreover, our high customer base concentration may also adversely affect our ability to negotiate contract prices withthese customers, which may in turn materially and adversely affect our results of operations.Our historical outstanding accounts receivable have been relatively high. Inability to collect our accounts receivable on a timely basis, if at all, couldmaterially and adversely affect our financial condition, liquidity and results of operations.Historically, our outstanding accounts receivable have been relatively high. As of December 31, 2017 and 2016, our outstanding accounts receivable beforeimpairment were $10.4 million and $2.10 million, respectively. Although we conduct credit evaluations of our customers, we generally do not require collateral orother security from our customers. In addition, we have had a relatively high customer concentration. The outstanding accounts receivable balance for our largestcustomer was 45.3% and 38.5% of our total accounts receivable balance as of December 31, 2017 and 2016, respectively. As a result, an extended delay or default inpayment relating to a significant account would likely have a material and adverse effect on the aging schedule and turnover days of our accounts receivable. Ourinability to collect our accounts receivable on a timely basis, if at all, could materially and adversely affect our financial condition, liquidity and results of operations.Risks Related to Doing Business in ChinaAdverse changes in political and economic policies of the PRC government could have a material adverse effect on the overall economic growth of China,which could reduce the demand for our services and materially and adversely affect our competitive position.Substantially all of our business operations are conducted in China. Accordingly, our business, results of operations, financial condition and prospects aresubject to a significant degree to economic, political and legal developments in China. Although the Chinese economy is no longer a planned economy, the PRCgovernment continues to exercise significant control over China’s economic growth through direct allocation of resources, monetary and tax policies, and a host ofother government policies such as those that encourage or restrict investment in certain industries by foreign investors, control the exchange between RMB andforeign currencies, and regulate the growth of the general or specific market. These government involvements have been instrumental in China’s significant growthin the past 30 years. The reorganization of the telecommunications industry encouraged by the PRC government has directly affected our industry and our growthprospect. In response to the recent global and Chinese economic downturn, the PRC government has adopted policy measures aimed at stimulating the economicgrowth in China. If the PRC government’s current or future policies fail to help the Chinese economy achieve further growth or if any aspect of the PRCgovernment’s policies limits the growth of the telecommunications industry in China or our industry or otherwise negatively affects our business, our growth rate orstrategy, our results of operations could be adversely affected as a result. Our business benefits from certain government tax incentives. Expiration, reduction or discontinuation of, or changes to, these incentives will increase our taxburden and reduce our net income.Under the PRC Enterprise Income Tax Law passed in 2007 and the implementing rules, both of which became effective on January 1, 2008, or the New EITLaw, a unified enterprise income tax rate of 25% and unified tax deduction standard is applied equally to both domesticinvested enterprises and foreigninvestedenterprises, or FIEs. Enterprises established prior to March 16, 2007 eligible for preferential tax treatment in accordance with the then tax laws and administrativeregulations shall gradually become subject to the New EIT Law rate over a fiveyear transition period starting from the date of effectiveness of the New EIT Law.However, certain qualifying hightechnology enterprises may still benefit from a preferential tax rate of 15% if they own their core intellectual properties and they areenterprises in certain Statesupported hightech industries to be later specified by the government. As a result, if our PRC subsidiaries qualify as “hightechnologyenterprises,” they will continue to benefit from the preferential tax rate of 15%, subject to transitional rules implemented from January 1, 2008. Our subsidiary, BeijingZhong Chuan Shi Xun Technology Limited, is qualified as a “hightechnology enterprise” until the end of the November 2018, and therefore it had benefited fromthe preferential tax rate of 15%, subject to transitional rules implemented on January 1, 2008. Although we intend to apply for a renewal of this qualification, if BeijingZhong Chuan Shi Xun ceases to qualify as a “hightechnology enterprise”, or the tax authorities change their position on our preferential tax treatments in thefuture, our future tax liabilities may materially increase, which could materially and adversely affect our financial condition and results of operations.10If we were deemed a “resident enterprise” by PRC tax authorities, we could be subject to tax on our global income at the rate of 25% under the New EIT Lawand our nonPRC shareholders could be subject to certain PRC taxes.Under the New EIT Law and the implementing rules, both of which became effective January 1, 2008, an enterprise established outside of the PRC with “defacto management bodies” within the PRC may be considered a PRC “resident enterprise” and will be subject to the enterprise income tax at the rate of 25% on itsglobal income as well as PRC enterprise income tax reporting obligations. The implementing rules of the New EIT Law define “de facto management” as “substantialand overall management and control over the production and operations, personnel, accounting, and properties” of the enterprise. However, as of the date of thistransition report, no final interpretations on the implementation of the “resident enterprise” designation are available. Moreover, any such designation, when madeby PRC tax authorities, will be determined based on the facts and circumstances of individual cases. Therefore, if we were to be considered a “resident enterprise”by the PRC tax authorities, our global income would be taxable under the New EIT Law at the rate of 25% and, to the extent we were to generate a substantial amountof income outside of PRC in the future, we would be subject to additional taxes. In addition, the dividends we pay to our nonPRC enterprise shareholders and gainsderived by such shareholders or ADS or ordinary share holders from the transfer of our shares or ADSs may also be subject to PRC withholding tax at the rate up to10%, if such income were regarded as Chinasourced income.Our holding company structure may limit the payment of dividends.We have no direct business operations, other than our ownership of our subsidiaries. While we have no current intention of paying dividends, should wedecide in the future to do so, as a holding company, our ability to pay dividends and meet other obligations depends upon the receipt of dividends or otherpayments from our operating subsidiaries and other holdings and investments. Current PRC regulations permit our PRC subsidiaries to pay dividends to us only outof their accumulated profits, if any, determined in accordance with Chinese accounting standards and regulations. In addition, each of our subsidiaries in China isrequired to set aside at least 10% of its aftertax profits each year, if any, to fund a statutory reserve until such reserve reaches 50% of its registered capital. Thesereserves are not distributable as cash dividends. Furthermore, if our subsidiaries in China incur debt on their own behalf in the future, the instruments governing thedebt may restrict their ability to pay dividends or make other payments to us. As a result, there may be limitations on the ability of our PRC subsidiaries to paydividends or make other investments or acquisitions that could be beneficial to our business or otherwise fund and conduct our business.In addition, under the New EIT Law and the implementing rules that became effective on January 1, 2008, dividends generated from the business of our PRCsubsidiaries after January 1, 2008 and payable to us may be subject to a withholding tax rate of 10% if the PRC tax authorities subsequently determine that we are anonresident enterprise, unless there is a tax treaty with China that provides for a different withholding arrangement.Uncertainties with respect to the PRC legal system could adversely affect us.We conduct all of our business through our subsidiaries in China. Our operations in China are governed by PRC laws and regulations. Our PRCsubsidiaries are generally subject to laws and regulations applicable to foreign investments in China and, in particular, laws and regulations applicable to whollyforeignowned enterprises. The PRC legal system is based on statutes. Prior court decisions may be cited for reference but have limited precedential value.11Since 1979, PRC legislation and regulations have significantly enhanced the protections afforded to various forms of foreign investments in China.However, China has not developed a fully integrated legal system and recently enacted laws and regulations may not sufficiently cover all aspects of economicactivities in China. In particular, because these laws and regulations are relatively new, and because of the limited volume of published decisions and theirnonbinding nature, the interpretation and enforcement of these laws and regulations involve uncertainties. In addition, the PRC legal system is based in part ongovernment policies and internal rules (some of which are not published on a timely basis or at all) that may have a retroactive effect. As a result, we may not beaware of our violation of these policies and rules until some time after the violation. In addition, any litigation in China may be protracted and result in substantialcosts and diversion of resources and management attention.PRC regulation of loans and direct investment by offshore holding companies to PRC entities may delay or prevent us from using the proceeds of our May2010 public offering to make loans or additional capital contributions to our PRC operating subsidiaries, which could materially and adversely affect ourliquidity and our ability to fund and expand our business.In utilizing the proceeds of our May 2010 public offering as an offshore holding company of our PRC operating subsidiaries, we may make loans to our PRCsubsidiaries, or we may make additional capital contributions to our PRC subsidiaries. Any loans to our PRC subsidiaries are subject to PRC regulations. Forexample, loans by us to our subsidiaries in China, which are FIEs, to finance their activities cannot exceed statutory limits and must be registered with the StateAdministration of Foreign Exchange, or SAFE. On August 29, 2008, SAFE promulgated Circular 142, a notice regulating the conversion by a foreigninvestedcompany of foreign currency into RMB by restricting how the converted RMB may be used. The notice requires that RMB converted from the foreign currencydenominated capital of a foreigninvested company may only be used for purposes within the business scope approved by the applicable governmental authorityand may not be used for equity investments within the PRC unless specifically provided for otherwise. The foreign currencydenominated capital shall be verified byan accounting firm before converting into RMB. In addition, SAFE strengthened its oversight over the flow and use of RMB funds converted from the foreigncurrencydenominated capital of a foreigninvested company. To convert such capital into RMB, the foreigninvested company must report the use of such RMB tothe bank, and the RMB must be used to the reported purposes. According to Circular 142, change of the use of such RMB without approval is prohibited. Inaddition, such RMB may not be used to repay RMB loans if the proceeds of such loans have not yet been used. Violations of Circular 142 may result in severepenalties, including substantial fines as set forth in the Foreign Exchange Administration Rules.We may also decide to finance our subsidiaries by means of capital contributions. These capital contributions may need approval from the PRC Ministry ofCommerce, or MOFCOM, or its local counterpart. We may not be able to obtain these government approvals on a timely basis, if at all, with respect to future capitalcontributions by us to our PRC subsidiaries. If we fail to receive such approvals in such cases when approval is required, our ability to use the proceeds of our May2010 public offering and to capitalize our PRC operations may be negatively affected, which could adversely affect our liquidity and our ability to fund and expandour business.Governmental control of currency conversion may affect the value of your investment.The PRC government imposes controls on the convertibility of the RMB into foreign currencies and, in certain cases, the remittance of currency out ofChina. We receive substantially all of our revenues in RMB. Under our current corporate structure, our income is primarily derived from dividend payments from ourPRC subsidiaries. Shortages in the availability of foreign currency may restrict the ability of our PRC subsidiaries to remit sufficient foreign currency to paydividends or other payments to us, or otherwise satisfy their foreign currency denominated obligations. Under existing PRC foreign exchange regulations, paymentsof current account items, including profit distributions, interest payments and expenditures from traderelated transactions, can be made in foreign currencieswithout prior approval from SAFE by complying with certain procedural requirements. However, approval from appropriate government authorities is required whereRMB is to be converted into foreign currency and remitted out of China to pay capital expenses such as the repayment of loans denominated in foreign currencies.The PRC government may also at its discretion restrict access in the future to foreign currencies for current account transactions. If the foreign exchange controlsystem prevents us from obtaining sufficient foreign currency to satisfy our currency demands, we may not be able to pay dividends in foreign currencies to ourshareholders, including holders of our ADSs or ordinary shares.12Fluctuation in the value of the RMB may have a material adverse effect on the value of your investment.The value of the RMB against the U.S. dollar and other currencies may fluctuate and is affected by, among other things, changes in political and economicconditions. On July 21, 2005, the PRC government changed its decadeold policy of pegging the value of the RMB to the U.S. dollar. Under the new policy, the RMBis permitted to fluctuate within a narrow and managed band against a basket of certain foreign currencies. This change in policy has resulted in an approximate26.8% appreciation of the RMB against the U.S. dollar between July 21, 2005 and September 30, 2015. Provisions on Administration of Foreign Exchange, asamended in August 2008, further changed China’s exchange regime to a managed floating exchange rate regime based on market supply and demand. Since reachinga high against the U.S. dollar in July 2008, however, the RMB has traded within a narrow band against the U.S. dollar, remaining within 1% of its July 2008 high butnever exceeding it. As a consequence, the RMB has fluctuated sharply since July 2008 against other freelytraded currencies, in tandem with the U.S. dollar. InAugust 2015, the PRC Government devalued its currency by approximately 3%, representing the largest yuan depreciation for 20 years. Concerns remain thatChina’s slowing economy, and in particular its exports, will need a stimulus that can only come from further cuts in the exchange rate.It is difficult to predict how long the current situation may continue and when and how it may change again as the People’s Bank of China may regularlyintervene in the foreign exchange market to achieve economic policy goals. Substantially all of our revenues and costs are denominated in the RMB, and asignificant portion of our financial assets are also denominated in RMB. We principally rely on dividends and other distributions paid to us by our subsidiaries inChina. Any significant revaluation of the RMB may materially and adversely affect our cash flows, revenues, earnings and financial position, and the value of, andany dividends payable on, our ADSs or ordinary shares in U.S. dollars. Any fluctuations of the exchange rate between the RMB and the U.S. dollar could also resultin foreign currency translation losses for financial reporting purposes.PRC laws and regulations governing our businesses. If we are found to be in violation of such PRC laws and regulations, we could be subject to sanctions. Inaddition, changes in such PRC laws and regulations may materially and adversely affect our business.There are substantial uncertainties regarding the interpretation and application of PRC laws and regulations, including, but not limited to, the laws andregulations governing our business. These laws and regulations are relatively new and may be subject to change, and their official interpretation and enforcementmay involve substantial uncertainty. The effectiveness of newly enacted laws, regulations or amendments may be delayed, resulting in detrimental reliance byforeign investors. New laws and regulations that affect existing and proposed future businesses may also be applied retroactively.The PRC government has broad discretion in dealing with violations of laws and regulations, including levying fines, revoking business and other licensesand requiring actions necessary for compliance. In particular, licenses and permits issued or granted to us by relevant governmental bodies may be revoked at a latertime by higher regulatory bodies. We cannot predict the effect of the interpretation of existing or new PRC laws or regulations on our businesses. We cannot assureyou that our current ownership and operating structure would not be found in violation of any current or future PRC laws or regulations. As a result, we may besubject to sanctions, including fines, and could be required to restructure our operations or cease to provide certain services. In addition, any litigation in China maybe protracted and result in substantial costs and diversion of resources and management attention. Any of these or similar actions could significantly disrupt ourbusiness operations or restrict us from conducting a substantial portion of our business operations, which could materially and adversely affect our business,financial condition and results of operations.13If we were required to obtain the prior approval of the China Securities Regulatory Commission, or CSRC, of the listing and trading of our ADSs on theNASDAQ Capital Market, we may face regulatory actions or other sanctions from the CSRC or other PRC regulatory agencies.On August 8, 2006, six PRC regulatory agencies, including the Ministry of Commerce, the State Assets Supervision and Administration Commission, theState Administration for Taxation, the State Administration for Industry and Commerce, the CSRC and the SAFE, jointly issued the Regulations on Mergers andAcquisitions of Domestic Enterprises by Foreign Investors, which became effective on September 8, 2006 (the “New M&A Rules”). This regulation, among otherthings, includes provisions that purport to require that an offshore special purpose vehicle formed for the purposes of overseas listing of equity interests in PRCcompanies and controlled directly or indirectly by PRC companies or individuals obtain the approval of the CSRC prior to the listing and trading of such specialpurpose vehicle’s securities on an overseas stock exchange. On September 21, 2006, the CSRC published on its official website procedures regarding its approval ofoverseas listings by special purpose vehicles. The CSRC approval procedures require the filing of a number of documents with the CSRC and it would take severalmonths to complete the approval process, if practicable at all. The application of this new PRC regulation remains unclear with no consensus currently existingamong leading PRC law firms regarding the scope of the applicability of the CSRC approval requirement. Prior to our May 2010 initial public offering, our PRC counsel has advised us that, based on its understanding of the current PRC laws and regulations aswell as the procedures announced on September 21, 2006: (i) Softech was directly incorporated by Topsky as a foreign investment enterprise under PRC law;therefore, there was no acquisition of the equity of a “PRC domestic company” as defined under the New M&A Rules; and (ii) the contractual arrangementsbetween Kingtone Information and Softech were not clearly defined and considered as the transaction which shall be applied to the New M&A Rules. Therefore, wedid not seek prior CSRC approval for our initial public offering.However, if the CSRC required that we obtain its approval prior to the completion of our initial public offering and the listing of our ADSs on the NASDAQCapital Market, we may face regulatory actions or other sanctions from the CSRC or other PRC regulatory agencies. These regulatory agencies may impose fines andpenalties on our operations in the PRC, limit our operating privileges in the PRC, delay or restrict the repatriation of the proceeds from our initial public offering intothe PRC, or take other actions that could have a material adverse effect on our business, financial condition, results of operations, reputation and prospects, as wellas the trading price of our shares.Also, if the CSRC requires that we obtain its approval, we may be unable to obtain a waiver of the CSRC approval requirements if and when procedures areestablished to obtain such a waiver. Any uncertainties and/or negative publicity regarding this CSRC approval requirement could have a material adverse effect onthe trading price of our shares.PRC regulations relating to the establishment of offshore special purpose companies by PRC residents may subject our PRC resident shareholders to penaltiesand limit our ability to inject capital into our PRC subsidiaries, limit our PRC subsidiaries’ ability to distribute profits to us, or otherwise adversely affect us.On October 21, 2005, the SAFE issued the Notice on Issues Relating to the Administration of Foreign Exchange in Fundraising and Reverse InvestmentActivities of Domestic Residents Conducted via Offshore Special Purpose Companies, or Notice 75, which became effective as of November 1, 2005. According toNotice 75, prior registration with the local SAFE branch is required for PRC residents to establish or to control an offshore company for the purposes of financingsuch offshore company with assets or equity interests in an onshore enterprise located in the PRC, or an offshore special purpose company. An amendment toregistration or filing with the local SAFE branch by such PRC resident is also required for the injection of equity interests or assets of an onshore enterprise in theoffshore special purpose company or overseas funds raised by such offshore company, or any other material change involving a change in the capital of theoffshore special purpose company. Moreover, Notice 75 applies retroactively. As a result, PRC residents who have established or acquired control of offshorespecial purpose companies that have made onshore investments in the PRC in the past are required to have completed the relevant registration procedures with thelocal SAFE branch by March 31, 2006. To further clarify the implementation of Notice 75, the SAFE issued Circular 106 on May 29, 2007. Under Circular 106, PRCsubsidiaries of an offshore special purpose company are required to coordinate and supervise the filing of SAFE registrations by the offshore holding company’sshareholders or beneficial owners who are PRC residents in a timely manner.14Some of our current shareholders and/or beneficial owners may fall within the ambit of the SAFE notice and be required to register with the local SAFEbranch as required under the SAFE notice. If so required, and if such shareholders and/or beneficial owners fail to timely register their SAFE registrations pursuantto the SAFE notice, or if future shareholders and/or beneficial owners of our company who are PRC residents fail to comply with the registration procedures setforth in the SAFE notice, this may subject such shareholders, beneficial owners and/or our PRC subsidiaries to fines and legal sanctions and may also limit ourability to contribute additional capital into our PRC subsidiaries, limit our PRC subsidiaries’ ability to distribute dividends to our company, or otherwise adverselyaffect our business.Risks Associated with our ADSs and Ordinary SharesOur securities are not currently traded on any United States public markets and you may not be able to resell your securities for some time.There is currently no public market for our ordinary shares or American Depository Shares (“ADSs”) in the United States or in any other jurisdiction. OurADSs were voluntarily delisted from the NASDAQ Capital Market on September 19, 2018. We have applied to NASDAQ for the listing of our ordinary shares on theNASDAQ Capital Market and received an approval for listing of Ordinary Shares on August 6, 2018, and as of the date of this transition report, that application andapproval are currently under review. We cannot assume that our ordinary shares will be accepted for listing on the NASDAQ Capital Market, or if listed, that wewould continue to meet the applicable minimum listing requriements. You may not be able to sell your ordinary shares quickly or at all if we are unable to gain listingon a public market in the United States.The market price of our ADSs has historically been highly volatile, and you may not be able to resell our ordinary shares at or above your initial purchaseprice.There may be a limited public market for our ordinary shares and, as discussed above, our ADSs are no longer listed on any public market in the UnitedStates or any other jurisdiction. We cannot assure you that there will be an active trading market for our ordinary shares in the future. If our ordinary shares areaccepted for listing on a public market, you may not be able to sell your ordinary shares quickly or at the market price if trading in our ordinary shares is not active. The trading price of our ADSs and ordinary shares may be volatile. The price of our ADSs and ordinary shares could be subject to wide fluctuations inresponse to a variety of factors, including the following:1.Introduction of new products, services or technologies offered by us or our competitors;2.Failure to meet or exceed revenue and financial projections we provide to the public;3.Actual or anticipated variations in quarterly operating results;4.Failure to meet or exceed the estimates and projections of the investment community;5.General market conditions and overall fluctuations in United States equity markets;6.Announcements of significant acquisitions, strategic partnerships, joint ventures or capital commitments by us or our competitors;7.Disputes or other developments relating to proprietary rights, including patents, litigation matters and our ability to obtain patent protection for ourtechnologies;8.Additions or departures of key management personnel;9.Issuances of debt or equity securities;10.Significant lawsuits, including patent or shareholder litigation;11.Changes in the market valuations of similar companies;12.Sales of additional ordinary shares or other securities by us or our shareholders in the future;13.Trading volume of our ordinary shares;14.Fluctuations in the exchange rate between the U.S. dollar and Renminbi;15.Negative market perception and media coverage of our company or other companies in the same or similar industry with us; and16.Other events or factors, many of which are beyond our control.15In addition, the stock market in general, and the NASDAQ Capital Market and software products and services companies in particular, have experiencedextreme price and volume fluctuations that have often been unrelated or disproportionate to the operating performance of these companies. Broad market andindustry factors may negatively affect the market price of our ordinary shares, regardless of our actual operating performance. Our ADSs and ordinary shares may be subject to the SEC’s penny stock rules which may make it difficult for brokerdealers to complete customer transactionsand trading activity in our securities.Our ADSs and ordinary shares may be deemed to be “penny stock” as that term is defined under the Securities Exchange Act of 1934, as amended. Pennystocks generally are equity securities with a price of less than $5.00 (other than securities registered on certain national securities exchanges or quoted on theNASDAQ system, provided that current price and volume information with respect to transactions in such securities is provided by the exchange or system). Pennystock rules impose additional sales practice requirements on brokerdealers who sell to persons other than established customers and “accredited investors.” Theterm “accredited investor” refers generally to institutions with assets in excess of $5,000,000 or individuals with a net worth in excess of $1,000,000 or annual incomeexceeding $200,000 or $300,000 jointly with their spouse in each of the prior two years.The penny stock rules require a brokerdealer, prior to a transaction in a penny stock not otherwise exempt from the rules, to deliver a standardized riskdisclosure document in a form prepared by the SEC, which provides information about penny stocks and the nature and level of risks in the penny stockmarket. Moreover, brokerdealers are required to determine whether an investment in a penny stock is a suitable investment for a prospective investor. A brokerdealer must receive a written agreement to the transaction from the investor setting forth the identity and quantity of the penny stock to be purchased. Theserequirements may make it more difficult for brokerdealers to effectuate customer transactions and trading activity in our securities. As a result, the market price ofour ADSs and ordinary shares may be depressed, and you may find it more difficult to sell our ADSs or ordinary shares.Sales of a substantial number of ordinary shares or ADSs in the public market by our existing shareholders could cause the price of our ADSs to fall.Sales of a substantial number of our ordinary shares or ADSs in the public market or the perception that these sales might occur, could depress the marketprice of our ADSs and could impair our ability to raise capital through the sale of additional equity securities. We are unable to predict the effect that sales may haveon the prevailing market price of our ADSs.All of our existing shareholders prior to our May 2010 offering were subject to lockup agreements with the underwriters of the offering that restricted theshareholders’ ability to transfer ordinary shares or ADSs until expiration of the lockup period in November 2010. The lockup agreements limited the number ofordinary shares or ADSs that may be sold immediately following the public offering. Subject to certain limitations, approximately 1,000,000 of our total outstandingshares are now eligible for sale. Sales of ordinary shares by these shareholders could have a material adverse effect on the trading price of our ADSs.Future sales and issuances of our ordinary shares, or rights to purchase our ordinary shares, including pursuant to our 2010 Omnibus Incentive Plan, couldresult in additional dilution of the percentage ownership of our shareholders and could cause the price of our ordinary shares to fall.We expect that significant additional capital will be needed in the future to continue our planned operations. To the extent we raise additional capital byissuing equity securities, our shareholders may experience substantial dilution. We may sell ordinary shares, convertible securities or other equity securities in oneor more transactions at prices and in a manner we determine from time to time. If we sell ordinary shares, convertible securities or other equity securities in more thanone transaction, investors may be materially diluted by subsequent sales. Such sales may also result in material dilution to our existing shareholders, and newinvestors could gain rights superior to our existing shareholders.16We do not intend to pay dividends on our ordinary shares, so any returns will be limited to the value of our ADSs and ordinary shares.We have never declared or paid any cash dividend on our ordinary shares. We currently anticipate that we will retain future earnings for the development,operation and expansion of our business and do not anticipate declaring or paying any cash dividends for the foreseeable future. Any return shareholders willtherefore be limited to the value of their ADSs or ordinary shares.As the rights of shareholders under British Virgin Islands law differ from those under U.S. law, you may have fewer protections as a shareholder.Our corporate affairs will be governed by our memorandum of association and articles of association, the BVI Business Companies Act, 2004, or the BVIAct, of the British Virgin Islands and the common law of the British Virgin Islands. The rights of shareholders to take legal action against our directors, actions byminority shareholders and the fiduciary responsibilities of our directors under British Virgin Islands law are to a large extent governed by the BVI Act and thecommon law of the British Virgin Islands. The common law of the British Virgin Islands is derived in part from comparatively limited judicial precedent in the BritishVirgin Islands as well as from English common law, which has persuasive, but not binding, authority on a court in the British Virgin Islands. The rights of ourshareholders and the fiduciary responsibilities of our directors under British Virgin Islands law are not as clearly established as they would be under statutes orjudicial precedents in some jurisdictions in the United States. In particular, the British Virgin Islands has a less developed body of securities laws as compared to theUnited States, and some states (such as Delaware) have more fully developed and judicially interpreted bodies of corporate law.As a result of all of the above, holders of our ADSs and ordinary shares may have more difficulty in protecting their interests through actions against ourmanagement, directors or major shareholders than they would as shareholders of a U.S. company.British Virgin Islands companies may not be able to initiate shareholder derivative actions, thereby depriving shareholders of the ability to protect theirinterests.British Virgin Islands companies may not have standing to initiate a shareholder derivative action in a federal court of the United States. The circumstancesin which any such action may be brought, and the procedures and defenses that may be available in respect to any such action, may result in the rights ofshareholders of a British Virgin Islands company being more limited than those of shareholders of a company organized in the United States. Accordingly,shareholders may have fewer alternatives available to them if they believe that corporate wrongdoing has occurred. The British Virgin Islands courts are alsounlikely to recognize or enforce against us judgments of courts in the United States based on certain liability provisions of U.S. securities law; and to imposeliabilities against us, in original actions brought in the British Virgin Islands, based on certain liability provisions of U.S. securities laws that are penal in nature.There is no statutory recognition in the British Virgin Islands of judgments obtained in the United States, although the courts of the British Virgin Islands willgenerally recognize and enforce the nonpenal judgment of a foreign court of competent jurisdiction without retrial on the merits.The laws of the British Virgin Islands provide little protection for minority shareholders, so minority shareholders will have little or no recourse if theshareholders are dissatisfied with the conduct of our affairs.Under the law of the British Virgin Islands, there is little statutory law for the protection of minority shareholders other than the provisions of the BVI Actdealing with shareholder remedies. The principal protection under statutory law is that shareholders may bring an action to enforce the constituent documents ofthe corporation, our memorandum of association and articles of association. Shareholders are entitled to have the affairs of the company conducted in accordancewith the general law and the memorandum of association and articles of association.17There are common law rights for the protection of shareholders that may be invoked, largely dependent on English company law, since the common law ofthe British Virgin Islands is limited. Under the general rule pursuant to English company law known as the rule in Foss v. Harbottle, a court will generally refuse tointerfere with the management of a company at the insistence of a minority of its shareholders who express dissatisfaction with the conduct of the company’s affairsby the majority or the board of directors. However, every shareholder is entitled to have the affairs of the company conducted properly according to law and thecompany’s constituent documents. As such, if those who control the company have persistently disregarded the requirements of company law or the provisions ofthe company’s memorandum of association and articles of association, then the courts will grant relief. Generally, the areas in which the courts will intervene are thefollowing: (1) an act complained of which is outside the scope of the authorized business or is illegal or not capable of ratification by the majority; (2) acts thatconstitute fraud on the minority where the wrongdoers control the company; (3) acts that infringe on the personal rights of the shareholders, such as the right tovote; and (4) where the company has not complied with provisions requiring approval of a majority of shareholders, which are more limited than the rights affordedminority shareholders under the laws of many states in the United States.Antitakeover provisions in our memorandum of association and articles of association and our right to issue preference shares could make a thirdpartyacquisition of us difficult.Some provisions of our memorandum of association and articles of association may discourage, delay or prevent a change in control of our company ormanagement that shareholders may consider favorable, including provisions that authorize our board of directors to issue preference shares in one or more seriesand to designate the price, rights, preferences, privileges and restrictions of such preference shares.If you hold our ADSs, you may not have the same voting rights as the holders of our ordinary shares and must act through the depositary to exercise your rights.Holders of our ADSs will not be able to exercise voting rights attaching to the shares evidenced by our ADSs on an individual basis. Holders of our ADSswill appoint the depositary or its nominee as their representative to exercise the voting rights attaching to the shares represented by the ADSs. You may not receivevoting materials in time to instruct the depositary to vote, and it is possible that you, or persons who hold their ADSs through brokers, dealers or other third parties,will not have the opportunity to exercise a right to vote. Upon our written request, the depositary will mail to you a shareholder meeting notice which contains,among other things, a statement as to the manner in which your voting instructions may be given, including an express indication that such instructions may begiven or deemed given to the depositary to give a discretionary proxy to a person designated by us if no instructions are received by the depositary from you on orbefore the response date established by the depositary. However, no voting instruction shall be deemed given and no such discretionary proxy shall be given withrespect to any matter as to which we inform the depositary that (i) we do not wish such proxy given, (ii) substantial opposition exists, or (iii) such matter materiallyand adversely affects the rights of shareholders. We will make all reasonable efforts to cause the depositary to extend voting rights to you in a timely manner, butyou may not receive the voting materials in time to ensure that you can instruct the depositary to vote your ADSs. Furthermore, the depositary and its agents willnot be responsible for any failure to carry out any instructions to vote, for the manner in which any vote is cast or for the effect of any such vote. As a result, youmay not be able to exercise your right to vote and you may lack recourse if your ADSs are not voted as you requested. In addition, in your capacity as an ADSholder, you will not be able to call a shareholders’ meeting.You may not be able to participate in rights offerings and may experience dilution of your holdings as a result.We may from time to time distribute rights to our shareholders, including rights to acquire our securities. However, we may not, and under the depositagreement for the ADSs, the depositary will not, offer those rights to ADS holders unless both the rights and the underlying securities to be distributed to ADSholders are registered under the Securities Act, or the distribution of them to ADS holders is exempted from registration under the Securities Act with respect to allholders of ADSs. We are under no obligation to file a registration statement with respect to any such rights or underlying securities or to endeavor to cause such aregistration statement to be declared effective. In addition, we may not be able to rely on an exemption from registration under the Securities Act to distribute suchrights and securities. Accordingly, holders of our ADSs may be unable to participate in our rights offerings and may experience dilution in their holdings as a result.You may be subject to limitations on transfer of your ADSs.Your ADSs are transferable on the books of the depositary. However, the depositary may close its transfer books at any time or from time to time when itdeems expedient in connection with the performance of its duties. In addition, the depositary may refuse to deliver, transfer or register transfers of ADSs generallywhen our books or the books of the depositary are closed, or at any time if we or the depositary deem it advisable to do so because of any requirement of law or ofany government or governmental body, or under any provision of the deposit agreement, or for any other reason.18We may be a passive foreign investment company, of PFIC, which could lead to additional taxes for U.S. holders of our ADSs or ordinary shares.We do not expect to be, for U.S. federal income tax purposes, a passive foreign investment company, or a PFIC, which is a foreign company for which, inany given taxable year, either at least 75% of its gross income is passive income, or investment income in general, or at least 50% of its assets produce or are held toproduce passive income, for the current taxable year, and we expect to operate in such a manner so as not to become a PFIC for any future taxable year. However,because the determination of PFIC status for any taxable year cannot be made until after the close of such year and requires extensive factual investigation,including ascertaining the fair market value of our assets on a quarterly basis and determining whether each item of gross income that we earn is passive income, wecannot assure you that we will not become a PFIC for the current taxable year or any future taxable year. If we are or become a PFIC, a U.S. holder of our ADSs orordinary shares could be subject to additional U.S. federal income taxes on gain recognized with respect to the ADSs or ordinary shares and on certain distributions,plus an interest charge on certain taxes treated as having been deferred under the PFIC rules. Noncorporate U.S. holders will not be eligible for reduced rates oftaxation on any dividends received from us if we are a PFIC in the taxable year in which such dividends are paid or in the preceding taxable year.If our ordinary shares are listed on the NASDAQ Capital Market and the trading price of our ordinary shares fails to comply with the continued listingrequirements of the NASDAQ Capital Market, we would face possible delisting, which would result in a limited public market for our ordinary shares andmake obtaining future debt or equity financing more difficult for us.Companies listed on NASDAQ are subject to delisting for, among other things, failure to maintain a minimum closing bid price of $1.00 per share for 30consecutive business days. On December 19, 2011, we received a letter from NASDAQ indicating that for the last 30 consecutive business days, the closing bidprice of our ADSs fell below the minimum $1.00 per share requirement pursuant to NASDAQ Listing Rule 5550(a)(2) for continued listing on the NASDAQ CapitalMarket. We regained compliance with the minimum bid price requirement for continued listing set forth in NASDAQ Listing Rule 5550(a)(2), as its ADS with itsunderlying ordinary share has achieved a closing bid price of $1.00 or greater for the 10 consecutive business days from November 6 to November 23, 2012 byimplementing a 1for10 combination, or reverse split of the ordinary shares effective November 6, 2012. When listed, we cannot be sure that the price of our ordinaryshares will comply with this requirement for continued listing on the NASDAQ Capital Market in the future. If we were not able to do so, our ordinary shares wouldbe subject to delisting and would likely trade on the overthecounter market. If our ordinary shares were to trade on the overthecounter market, selling ourordinary shares could be more difficult because smaller quantities of shares would likely be bought and sold, transactions could be delayed, and security analysts’coverage of us may be reduced. In addition, brokerdealers have certain regulatory burdens imposed upon them, which may discourage brokerdealers from effectingtransactions in our ordinary shares, further limiting the liquidity of our ordinary shares. As a result, the market price of our ordinary may be depressed, and you mayfind it more difficult to sell our ordinary shares. Such delisting from the NASDAQ Capital Market and continued or further declines in our share price could alsogreatly impair our ability to raise additional necessary capital through equity or debt financing.ITEM 4. INFORMATION ON THE COMPANY.A . HISTORY AND DEVELOPMENT OF THE COMPANY.OverviewWe are a holding company and conduct our operations through our whollyowned subsidiary named LK Technology Ltd., a British Virgin Islands limitedliability company (“LK Technology”), and its whollyowned subsidiaries, MMB Limited and Mobile Media (China) Limited and their respective subsidiaries, whichhold the rights to deploy WiFi systems on about 700 trains in China, including 290 trains in which WiFi systems have already been installed and are in operation. InMay 2010, we consummated an initial public offering of our American Depository Shares, or ADSs, for gross proceeds of $16 million, and our ADSs were listed onthe NASDAQ Capital Market under the ticker symbol “KONE”. Our ordinary shares are not currently listed on any trading market. Our American Depository Shares(“ADSs”) were voluntarily delisted from the NASDAQ Capital Market on September 19, 2018. We have applied to NASDAQ for the listing of our ordinary shares onthe NASDAQ Capital Market and received an approval for listing of Ordinary Shares on August 6, 2018, and as of the date of this transition report, that applicationand approval are currently under review.19On August 17, 2018, we consummated an asset exchange transaction, pursuant to which we exchanged all issued and outstanding capital stock in TopskyInfoTech Holdings Pte Ltd., the parent of Softech, for the issued and outstanding capital stock of LK Technology (the “Asset Exchange”). In connection with theAsset Exchange, we changed our name on August 20, 2018, and on September 20, 2018, issued to the shareholders of C Media Limited, the former parent of LKTechnology, (i) 185,412,599 of our ordinary shares, par value $0.01 per share and (ii) 1,000,000 of our preferred shares. Upon the consummation of the AssetExchange, we ceased our previous business operations and became a company focused on the provision of WiFi and mobile application products for long distancerail travelers in China.On August 25, 2018, LK Technology entered into a Stock Purchase Agreement (the “Agreement”) with the shareholders (“Shareholders”) of SuperengineHoldings Limited, a limited liability company organized under the laws of the British Virgin Islands (the “Superengine”), pursuant to which LK Technology acquiredall of the issued and outstanding capital stock of Superengine for an aggregate purchase price of US$60 million (the “Purchase Price”), which are paid by theissuance of our Ordinary Shares in an amount equal to the quotient of (x) the Purchase Price divided by (y) the average of the closing prices of the Ordinary Shareson the NASDAQ Capital Market over the 12 months period preceding July 31, 2018. We are a party to the Agreement in connection with the issuance of theOrdinary Shares and certain other limited purposes.Corporate InformationOur principal executive offices are located at LAB32, SOHO 3Q, No 9, Guanghua Road, Chaoyang District, Beijing, People’s Republic of China 100020. Ourwebsite is www.luokung.com. We routinely post important information on our website. The information contained on our website is not a part of this transitionreport.Our agent for service of process in the United States is Worldwide Stock Transfer, LLC, the current transfer agent of the Company, with a mailing address ofOne University Plaza, Suite 505, Hackensack, New Jersey 07601.B. BUSINESS OVERVIEW.We are a Chinabased provider of rail WiFi and mobile application products for long distance travelers in China. Our primary mobile application, theLuoKuang platform, consists of the LuoKuang mobile applications, a series of supporting software at the server end, and railWiFi hardware and equipment on thetrains that we serve. The LuoKuang platform incorporates technology covered by 22 patents and about 34 software copy rights, and serves as a content and servicedistribution platform that is tailored for particular travel stages featuring geographic location and social interaction. The content and services distributed byLuoKuang contain information, entertainment, travel, ecommerce, online to offline (“O2O”), advertisement and marketing features.LuoKuang mainly provides personalized and precise services to long distance travelers in two locations: on the train and at the destination. Based on thetravel environment, the core elements of our users’ needs include staving off boredom on trains and discovering and exploring new locations upon arrival. The mainservices contain entertainment services (videos and audio, digital readings, games specific and tailored to the travel stage) and social services (satisfying thedemand for value discovery of unfamiliar destinations through social interaction among strangers based on locations). As of December 31, 2017, the LuoKuangplatform featured about 38 million users.The setting services on the train focus on providing entertainment content for passengers to pass time during longdistance travel in closed environments.For example, we provide access to long video formats such as movies and TV shows, short videos, music, digital readings and games.20We use the most valuable WiFi location—the train WiFi setting—as the entrance of our LuoKuang platform and mobile applications. Passengers typicallyride trains for longdistance and interprovincial travel purposes. The long periods of monotonous journeys and the cost concerns for roaming traffic fees enable thecombination of entertainment content service needs and WiFi access needs. Our railWiFi becomes a valuable and sophisticated WiFi service in this setting—notjust WiFi connection service, but a provider of sophisticated services through a WiFi connection. In addition, the annual traffic of 800,000 passengers onboardeach train makes rail WiFi a huge entry point for mobile applications. We do not define ourselves as a train WiFi communication service operator but as a longdistance travel mobile service provider. We provide users with free WiFi access so that users are able to connect to the LuoKuang platform and thus access relatedentertainment services, services on the train and destination services. The rail WiFi is our access point to a significant pool of users and the entrance to acquiringadditional users.The setting services focus on providing targeted push services to users while travelling in unfamiliar cities. Information and service guidance are preciselypushed to appeal to the interests and tastes (eating, drinking, shopping, touring and culture) of individual users (cuisine specialties and local snacks, local events,viewing sights, culture, history, stories). The service guidance is generated, shared and distributed by individual users (travelers, local residents, local businesses)interacting with current locations and featuring users who generated contents from selfmedia and small and medium vertical contents providers).Based on the GIS (geoinformation system), Superengine is a provider of big spatialtemporal data, network graphic image technology and relevant service.Its super engine series includes computer graphic image engines and spatial database engines. Spatialtemporal cloud index is the core of the company’s spatialtemporal data engines. It is equivalent to the neural network of the big data and the Internet. It extends the value of its products and platform to its data serviceproviders. In cooperation, its service providers can be divided into three categories, namely, basic geographic data providers, industrial data providers andbehavioral data providers). Superengine’s industriesoriented spatialtemporal data engine was launched in 2016. The spatialtemporal GIS platform has been appliedin industries such as aerospace, power grid, surveying & mapping, agriculture, cultural relic preservation, water conservancy, public security, railway section, smartcities, and business location selection.Our primary sources of revenue are advertising and marketing promotion revenues.Our Industry — Mobile Internet IndustryOur products and services are engaged in the mobile internet industry. Our main services consist of entertainment services (videos, audio, digital readings,games that are tailormade for passengers on train) and other services including satisfying the demand for value discovery of unfamiliar destinations through socialinteractions among strangers based in such locations). The mobile internet industry in China is rapidly growing and is likely to be in a longterm growth trend.According to the Mobile Internet Blue Book of China Mobile Internet Report, in 2017 the market size of China mobile internet reached RMB 605 billion. Now China isin a leading position in terms of smartphone, mobile communication network and mobile application services. The pool of users is anticipated to keep expandingthrough the promotion and popularization of smartphones and the expansion of the mobile internet market.Video is the leading online entertainment format in China. According to the iResearch Report, over 80% of total time spent by users on online entertainmentin China in 2016 was internet video. Online entertainment, especially internet video, is attractive to Chinese users due to many favorable factors, including easyaccessibility, wide content selection, and innovative platforms with social features.For 2017, the transaction volume of China mobile ecommerce market reached to over RMB 4 trillion according to the China Mobile Ecommerce IndustryResearch Report from iResearch, representing an increase of 19.1%. For the next few years, China mobile online shopping will likely maintain steady growth. Thefocal point of competition in China mobile ecommerce market has shifted from infrastructure service providers to integrated and accurate services providers.Drawing in users with compelling content in diversified scenes has become a trend.21The revenue for China mobile gaming industry reached RMB 144.58 billion for the year of 2017, according to the China Mobile Game Industry ResearchReport from iResearch. With increased investment by largescale enterprises in the sector of mobile games and the strict enforcement of the mobile game industryrelated regulatory policy guidelines, the mobile game market as a whole will become more organized and standardized.According to the Annual Analysis of China Mobile Reading Industry from Analysis, for the year of 2017, the mobile reading market in China reached toRMB 14.04 billion. By the end of 2016, the size of China mobile's reading market reached RMB 11.86 billion, showing an increase of 18.38% in 2017.The closed and boring environment for passengers of longdistance travel and high roaming charges lead to a strong demand to use our rail WiFi services.Passengers, through their own mobile phone, have access to the free WiFi network in each carriage, access to our rich mobile internet entertainment content andtravel services. According to the annual statistical bulletin of China Railway Corporation in 2017, there were about 6,030 trains in operation in China in 2017,consisting of 2,935 high speed trains and 3,095 express trains. The rail WiFi system that we have installed are currently all on express trains. The market value will bemultiplied several times following the extended coverage of service on other trains.Our StrengthsWe believe the following strengths differentiate us from our competitors:Our strategy is to build up personalized and targeted service products for travelers through rail WiFi networks, enabling our services to evolve into a coredriving distribution platform that provides content, news, games, ecommerce, OTO service, travel services and advertising and marketing. In comparison, ourcompetitors offer simple forms of media services on trains. We focus on personalized and targeted matching between users on long distance trips and services. Ourcompetitors focus on operating and generating internet traffic.We possess a complete set of technology system including network, client end and service and operation platform. We have patent protections for WiFiequipment on trains. Our technology strengths are briefly summarized below.WiFi EquipmentPatent protected. Supports WiFi/3G/4G telecom modules; 4 core CPU with X86 architecture, and SSD hard disk with big storage for localcontents.InfrastructureThe technology infrastructures include the application program system, big data gathering and processing systems, intelligence cloudsservice deployment structure systems and our WiFi hardware server deployment structure system. The operation center, big data center,contents center and railWiFi server system are built on this infrastructure. On the above layer, the equipment management platform,account and payment platform, contents management platform and advertisement distribution platform are set up for daily managementpurpose.LuoKuang strengthens the connection of services among people, setting and locations. In catering to people on the move, we anticipate strengthening therelationship between users and their locations in a given moment. Currently, LuoKuang provides the link between users and thirdparty service providers andprovides value added services to both users and thirdparty service providers. The connection is not simply a traffic diversion, but also the direct presentation ofrelevant services in the LuoKuang platform. The open API interface and independent product software package allows easy access by service providers anddevelopers and supports data service, advertisement operations, billing, users promotion and product marketing services. As an API product, LuoKuang does notcreate content or services. The content and services are provided by our partners in the LuoKuang platform. Now, the majority of top mobile internet content andservices providers in China have a presence in the Luokuang platform. Those include, but are not limited to, Toutiao, Wangyi News, iqiyi, Letv, YoudianCinema(Hollywood films), Sohu video, Phoenix Video, Kugou Music, FM Qingting, iReader, Baidu Literature, Phoenix Novel, Baidu Game, Meituan, Dianping, andsimilar content providers.22Our StrategyLuoKuang is positioned to provide API interface services and geographic information social services. The API interface services are provided within thetypical BC model. LuoKuang pushes the content and services from thirdparty service providers to users. The local businesses, service practitioners, residents, andforeign travelers are all defined as a “user” and may participate in social interactions based on local value information and generate UGC content. The socalled localvalue information is defined as information, views, evaluations, experiences and experience sharing related to the local cultural scene, native products,entertainment, food, tourism and activities.The LuoKuang user growth strategy is to have access to users through the travelers’ use of mobile devices in connection with longdistance train travel.Through deploying WiFi systems on trains and providing free WiFi access to passengers, LuoKuang is able to have consistent access to longdistance travelers.The WiFi system on the train has become a powerful user portal at the early stage of LuoKuang and has gained substantial user traffic. We are in a leading positionin terms of numbers of trains contracted and trains in operation with our free WiFi system. We have contracted with about 700 trains, which cover almost 560 millionannual passenger trips. As of the date of this report, approximately 290 trains are operating our rail WiFi system. We will continue to install our rail WiFi system inthe following years.The development strategy for LuoKuang encompasses the following:1.Enhance our local cycle service (a recommendation service system based on the location of travelers after their arrival, recommendations includingtourist attractions, local specialties and other items of interest), strengthen services for arrivals in the form of social interaction and focus on the valueof relationships between users and their current locations.2.Focus on the development of geographic positioning technology. Get the business of local cycle and users on train mixed together. We will put oureffort to maximize the synergy effect.3.Big Data: Behavior data about passenger trips is obtained via the traffic entrance of rail WiFi and these data will help to optimize our product.4.While enhancing setting service experiences and optimizing entertainment experiences, we will enrich ecommerce services on trains featuringrecommendations of customized products and ecommerce shopping guidance of products labeled with specific geographic location (and trafficdiversion).5.Focus on API positioning and attract more premium vertical service providers (contents and services).Intellectual PropertyWe have registered the following software copyrights, patents and trademarks for our business operations. We believe this intellectual property forms anintegral part of our competitive strength.23Patents:We have been granted some inventions by the State Intellectual Property Office of PRC. We possess a complete set of technology system includingnetwork, client end and service and operation platform. We have patent protections for WiFi equipment on trains. We have received the following patents:No.Name of patentTypeRegistrationNumberDate of Insurance1.Wireless communication multimedia chip business consumer informationacquisition terminal deviceInventionZL 2010 2 0528767.9Sep 21, 20112.A user behavior processing method and device for intelligent terminalInventionZL 2013 1 0301728.3May 27, 20153.A global positioning system terminal deviceInventionZL 2010 2 0253452.8Nov 7, 20114.A wireless multimedia serverInventionZL 2013 2 0220183.9Nov 13, 20135.Ordering system of passengers on trainInventionZL 2015 2 0095381.6Aug 5, 20156.A wireless multimedia serverInventionZL 2015 2 0201382.4Oct 28, 20157.An antenna structureInventionZL 2016 2 0424352.4Mar 1, 20178.Spatial data progressive transmission method and deviceInvention201010617383.9Jun 15, 20169.Methods and devices for conflict detection and avoidance of spatial entity elementlabelingInvention201010617385.8Mar 26, 201410.Spatial data processing method and deviceInvention201010617399.XJun 26, 201311.Method and device of spatial data simplificationInvention201010617400.9Mar 13, 201312.Method and device for judging the occlusion type of space entityInvention201010617403.2Sep 25, 201313.A method and device for distributed mapping of 3d model dataInvention201110274924.7Mar 26, 201414.Data simplification of 3d model, gradual transmission method and deviceInvention201110275336.5Mar 25, 201515.Spatial data transmission method and deviceInvention201110306393.5Dec 13, 201416.Methods and devices for spatial data processing, simplification and progressivetransmissionInvention201210104250.0Jun 10, 201517.Spatial data progressive transmission method and deviceInvention201310367021.2Jun 23, 201718.Simplification method and device of spatial dataInvention201310367128.7Sep 22, 201719.The method and device to accelerate transmission and display of graphic dataacross platformsInvention201210116149.7Aug 10, 201620.Methods and devices related to spatial data compression, decompression andprogressive transmissionInvention201310136682.4Nov 10, 2017We also have two patents outside of China.No.Name of patentCountryNationalRegistrationNumberDate ofInsurance1.Spatial data processing method and deviceJapan2012547439Jun 20, 20142.Methods and devices related to spatial data compression, decompression andprogressive transmissionU.S.A14/394,610Sep 5, 201724Software Copyrights:We have received the following software copyrights from the National Copyright Administration (“NCA”) of PRC:No.Name of CopyrightAchievement approachRegistration numberTime of obtainExpire time1.WAP PUSH Business operation platformsystemIndependent research anddevelopment2007SRBJ1464Jul 23, 200750 years2.TDSCDMA Streaming media businessmanagement platform software V1.0Independent research anddevelopment2009SRBJ0412Jan 22, 200950 years3.Content management platform systemsoftware V1.0Independent research anddevelopment2009SRBJ1374Apr 1, 200950 years4.Mobile multimedia broadcast electronicservice guide system software V1.0Independent research anddevelopment2009SRBJ1365Apr 1, 200950 years5.Mobile video business operation platformsystem V1.0Independent research anddevelopment2007SRBJ1463Jul 23, 200750 years6.Mobile multimedia broadcast emergencybroadcast platform software V1.0Independent research anddevelopment2010SRBJ0720Mar 5, 201050 years7.Mobile multimedia broadcast audio richmedia interactive platform softwareV1.0Independent research anddevelopment2010SRBJ0719Mar 5, 201050 years8.Printer typesetting and printing softwareV1.0Independent research anddevelopment2011SRBJ4190Sep 28, 201150 years9.Electronic newspaper business supportplatform software V1.0Independent research anddevelopment2011SRBJ4186Sep 28, 201150 years10.Public information business platformsoftware V1.0Independent research anddevelopment2011SRBJ3810Sep 27, 201150 years11.User interface scripting software V1.0Independent research anddevelopment2011SRBJ3809Sep 27, 201150 years12.Integrated business management platformsoftware V1.0Independent research anddevelopment2012SR003002Jan 16, 201250 years13.Interactive business development platformsoftwareIndependent research anddevelopment2011SRBJ4593Nov 29, 201150 years14.Instant messaging and messaging systemsoftwareIndependent research anddevelopment2014SR122231Aug 5, 201450 years15.General statistical platform software forclient productsIndependent research anddevelopment2014SR216662Dec 30, 201450 years16.CMMB Data broadcast managementplatform softwareIndependent research anddevelopment2009SRBJ0391Jan 22, 200950 years17.Integrated passenger train service systemIndependent research anddevelopment2012SR083665Sep 5, 201250 years25No.Name of CopyrightAchievement approachRegistration numberTime of obtainExpire time18.JHBY Train inspection managementsystemIndependent research anddevelopment2013SR015105Feb 21, 201350 years19.Integrated information engine platformsoftware V1.0Independent research anddevelopment2014SR040347Nov 30, 200150 years20.Super information engine developmentplatform software V5.0Independent research anddevelopment2014SR036792Mar 5, 200350 years21.Core map super network informationengine platform software V1.0Independent research anddevelopment2014SR036772Sep 15, 200750 years22.Integrated management of the grid gissoftware V1.0Independent research anddevelopment2014SR036808Jun 20, 200850 years23.Core map rural power grid equipment GPSpatrol system software V1.0Independent research anddevelopment2014SR036810Dec 10, 200850 years24.Diagram grid patrol PDA system softwareV1.0Independent research anddevelopment2014SR036778Dec 12, 200850 years25.Core map geographic information enginedesktop platform software V1.0Independent research anddevelopment2014SR036614Jan 15, 200950 years26.Integrated management of the gridgeographic information Web systemsoftware V1.0Independent research anddevelopment2014SR036799Mar 10, 200950 years27.Core map railway power supply equipmentGPS patrol system software V1.0Independent research anddevelopment2014SR036783Mar 25, 201050 years28.Core map network 3 d map server softwareV1.0Independent research anddevelopment2014SR036788Feb 20, 201150 years29.Core map network 3d map clientsoftwareV1.0Independent research anddevelopment2014SR036637Feb 22, 201150 years30.Core map 3d map network publishingplatform software V1.0Independent research anddevelopment2014SR036633Mar 10, 201150 years31.Core map 3d map network release pluginsystem software V1.0Independent research anddevelopment2014SR036622Mar 15, 201150 years32.Core map network 3d map smartphoneplatform software V1.0Independent research anddevelopment2014SR036638Apr 28, 201150 years33.Core map network GIS Shared mobileplatform software V1.0Independent research anddevelopment2014SR036634Oct 31, 201150 years34.Core map network GIS sharing platformsoftware V1.0Independent research anddevelopment2014SR036639Dec 16, 201150 yearsTrademarks:We have registered the following trademarks with the Trademark Office, State Administration 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NumberValid PeriodRegistration Number58箩筐图形382016.06.142026.06.131658022959箩筐图形352016.06.142026.06.131658023060箩筐图形92016.06.142026.06.131658023161微时光文字422016.09.282026.09.271658024762传游录屏文字92016.06.142026.06.131678214463传游录屏文字352016.06.142026.06.131678214364传游录屏文字382016.06.142026.06.131678214265传游录屏文字412016.06.142026.06.131678214166传游录屏文字422016.06.142026.06.131678214067录游器文字92016.06.142026.06.131678213568录游器文字352016.06.142026.06.131678213669录游器文字382016.06.142026.06.131678213770录游器文字412016.06.142026.06.131678213871录游器文字422016.06.142026.06.131678213972畅联TV文字412016.01.212026.01.201579246773畅联TV文字382016.01.212026.01.201579246874SuperEngine92016.01.212026.01.20812572275SuperEngine422016.01.212026.01.20812572876超擎9/422016.01.212026.01.201647320577SUPERENGINE9/422016.01.212026.01.2016473185*See below for an explanation of each classification number used in the table above.Classification No. 9: data processing apparatus, couplers (data processing equipment), computer software (recorded), monitors (computer programs), smartcards (integrated circuit cards), electrodynamic apparatus for the remote control of signals, alarms, and electric installations for the remote control of industrialoperations.Classification No. 35: auctioneering, sales promotion for others, marketing analysis, marketing research, importexport agencies, advisory services forbusiness management, business management for franchise, personnel management consultancy, relocation services for businesses, and systemization ofinformation into computer databases.Classification No. 38: Include services that enable at least sensory communication between two people. Such services include that allow one person to talkto another, send messages from one person to another, Make verbal or visual contact between one person and the other. This classification especially include theservice for broadcasting radio or television programs. Except for radio advertising services and telemarketing services.Classification No. 41: instruction services, teaching, education information, tuition, arranging and conducting of colloquiums, publication of electronicbooks and journals online, amusements, and vocational guidance.Classification No. 42: technical research, studies (technical project), computer software design, updating of computer software, recovery of computer data,computer systems analysis, installation of computer software, computer antivirus protection, and research and development for others. 28Business Certificates and QualificationsWe have obtained all necessary regulatory certifications to conduct our business in the PRC, including without limitation, the following: SoftwareEnterprise Recognition Certificate, Computer Information System Integration Qualification Certificate, Construction Enterprise Qualification Certificate, and SecurityTechnology & Protection Enterprise Certificate. We have also been properly certified as a hightech enterprise and have met the ISO 9001:2000 qualificationmanagement system.Legal ProceedingsAlthough we may, from time to time, be involved in litigation and claims arising out of our operations in the normal course of business, we do not believethat we are a party to any litigation that will have a material adverse impact on our financial condition or results of operations. To our knowledge, other than asdescribed below there are no material legal proceedings threatened against us. From time to time, we may be subject to various claims and legal actions arising in theordinary course of business. Following the consummation of the AEA, we became successor in interest to the legal proceedings described below.Litigation with Shanghai Fusheng Weier Intelligent Control Technology Co., Ltd.On January 22, 2016, Zhong Chuan Rui You and Shanghai Fusheng Weier Intelligent Control Technology Co., Ltd. (“Fusheng Weier”) signed a contract forequipment of $1,652,842 (RMB10,800,000). Since Zhong Chuan Rui You did not make the payments of $1,126,381 (RMB7,360,000) on the due dates, Fusheng Weierfiled a lawsuit against Zhong Chuan Rui You in Shanghai Xuhui District People's Court on October 8, 2016. On March 9, 2017, Xuhui District People's Court issuedthe verdict requiring Zhong Chuan Rui You to pay the overdue debts. In August 2017, C Media Limited made the payment of $512,075 (RMB3,346,000). Theremaining balance has been accrued in accounts payable. The payment schedule for the remaining balance is being negotiated by the two parties. On February 5,2018, a hearing was held adding Zhong Chuan Shi Xun as a defendant. The Group plans to settle the remaining balance within one year.Lawsuit with Gansu Jinlun Culture Media Co., Ltd.On August 22, 2014, Zhong Chuan Rui You and Gansu Jinlun Culture Media Co., Ltd. (“Gansu Jinlun”) signed a “Lanzhou Railway Bureau AirconditionedTrain WiFi Network System Advertising Operation Rights Agreement” for advertising on 72 trains of $1,467,880 (RMB9,604,633). Due to the dispute on theproject implementation, Zhong Chuan Rui You did not pay the advertising fee. On August 23, 2017, Gansu Jinlun filed a lawsuit with Gansu Intermediate People'sCourt. On December 19, 2017, Gansu Intermediate People's Court issued a verdict, ruling that Zhong Chuan Rui You settle the overdue advertising fee. Since only 18out of 72 trains have been installed with Wifi network system, Zhong Chuan Rui You disputed and appealed to the verdict. The next court trial date has not yet beendetermined.C Media and Gansu Jinlun are negotiating a potential settlement to resume the contract. According to the legal counsel, it is probable that the settlementwill amount to approximately $459,000 (RMB3,000,000); therefore, this amount has been accrued in accounts payable as at December 31, 2017.Litigation with Shenzhen Hua Xun Fang Zhou Technology Co., Ltd.On June 16, 2015, Zhong Chuan Rui You signed a cooperation agreement with Shenzhen Hua Xun Fang Zhou Technology Co., Ltd. (“Shenzhen Hua Xun”)and Xuesong Song, a major shareholder of C Media Limited. Pursuant to this agreement, Zhong Chuan Rui You procures equipment from Shenzhen Hua Xun.Xuesong Song acts as a joint liability guarantor for the entire debts of Zhong Chuan Rui You under this agreement. As Zhong Chuan Rui You did not make thepayments on the due dates, Shenzhen Hua Xun filed a lawsuit with Shenzhen Baoan District People's Court on May 31, 2016. On November 1, 2016, Zhong ChuanRui You, Xuesong Song and Shenzhen Hua Xun reached a settlement in Shenzhen Baoan District People's Court to settle $1,735,389 (RMB11,355,000) in fourinstalments. On December 30, 2017, the debt was assigned to C Media Limited.29C. ORGANIZATIONAL STRUCTUREThe following diagram illustrates our corporate structure and the place of formation and affiliation of each of our subsidiaries and affiliates as of September30, 2018.30The following diagram illustrates our corporate structure and the place of formation and affiliation of each of our subsidiaries and affiliates as of December31, 2017.Contractual Arrangements with Beijing Zhong Chuan Shi Xun Technology Limited’s Subsidiaries and Their Respective ShareholdersTo comply with the PRC legal restrictions on foreign ownership of companies that operate mobile application services, our subsidiaries operate in suchrestricted service areas in the PRC through certain PRC domestic companies, whose equity interests are held by certain management members or founders of the LKTechnology Ltd. Part of the registered capital of these PRC domestic companies was funded by certain management members or founders of LK Technology Ltd. LKTechnology Ltd., through its subsidiary Zhong Chuan Tian Xia Information and Technology (Shenzhen) Limited (the “WFOE”), has entered into an exclusivebusiness cooperation agreement with Beijing Zhong Chuan Shi Xun Technology Limited (“Zhong Chuan Shi Xun” or the “VIE”) the PRC domestic company, whichentitle the WFOE to receive a majority of profit of Zhong Chuan Shi Xun. In addition, Zhong Chuan Tian Xia Information and Technology (Shenzhen) Limited hasentered into certain agreements with those management members or founders, including equity interest pledge agreement of the equity interests held by thosemanagement members or founders and exclusive option agreement to acquire the equity interests in these companies when permitted by the PRC laws, rules andregulations. Details of the typical VIE structure of our significant consolidated VIE, primarily domestic companies associated with the operations such as ZhongChuan Shi Xun and its subsidiaries of Zhong Chuan Rui You, Huoerguosi Luokuang and Jiu Zhou Shi Dai, are set forth below: Exclusive Business Cooperation AgreementThe VIE has entered into an exclusive business services agreement with the WFOE, pursuant to which the WFOE provides exclusive business services tothe VIE. In exchange, the VIE pays a service fee to the WFOE which amounts to be no less than the 80% of the VIE’s aftertax profit, resulting in a transfer ofsubstantially all of the profits from the VIE to the WFOE.Exclusive Option AgreementThe VIE equity holders have granted the WFOE exclusive call options to purchase their equity interest in the VIE at an exercise price equal to the minimumprice as permitted by applicable PRC laws. The WFOE may nominate another entity or individual to purchase the equity interest, if applicable, under the call options.Each call option is exercisable subject to the condition that applicable PRC laws, rules and regulations do not prohibit completion of the transfer of the equityinterest pursuant to the call option. The VIE agrees not to distribute any dividends to the VIE equity holders without the approval of WFOE.31Equity Interest Pledge AgreementPursuant to the equity pledge agreement, the VIE equity holders have pledged all of their interests in the equity of the VIE as a continuing first prioritysecurity interest in favor of the WFOE to secure the performance of obligations by the VIEs and/or the equity holders under the exclusive business cooperationagreement. The WFOE is entitled to exercise its right to dispose of the VIE equity holders’ pledged interests in the equity of the VIE and has priority in receivingpayment by the application of proceeds from the auction or sale of such pledged interests, in the event of any breach or default under the exclusive businesscooperation agreement, if applicable. These equity pledge agreement remain in force until all the obligations under the exclusive business cooperation agreementhave been fulfilled.The exclusive business cooperation agreement and equity interest pledge agreement described above also enable the Company to receive substantially allof the economic benefits from the VIE by typically entitling the WFOE to all dividends and other distributions declared by the VIE and to any distributions orproceeds from the disposal by the VIE equity holders of their equity interests in the VIE.D. PROPERTY AND EQUIPMENTWe lease offices located at Lab 30 & Lab 32, SOHO 3Q, No 9, Guanghua Road, Chaoyang District, Beijing, which covers a floor space of 600 square meters.These leases expire at different times throughout 2018 and are renewable upon negotiation.ITEM 4A. UNRESOLVED STAFF COMMENTSNone.ITEM 5. OPERATING AND FINANCIAL REVIEW AND PROSPECTSA . OPERATING RESULTS.The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our consolidatedfinancial statements and the notes to those financial statements appearing elsewhere in this report. This discussion and analysis contains forwardlookingstatements that involve significant risks and uncertainties. As a result of many factors, such as our anticipated growth strategy, our plans to recruit moreemployees, our plans to invest in research and development to enhance our product or service lines, our future business development, results of operations andfinancial condition, expected changes in our net revenues and certain cost or expense items, our ability to attract and retain customers, trends and competitionin the enterprise mobile software application market, and the factors set forth elsewhere in this report, our actual results may differ materially from thoseanticipated in these forwardlooking statements. In light of those risks and uncertainties, there can be no assurance that the forwardlooking statementscontained in this report will in fact occur. You should not place undue reliance on the forwardlooking statements contained in this report.The forwardlooking statements speak only as of the date on which they are made, and, except to the extent required by U.S. federal securities laws, weundertake no obligation to update any forwardlooking statement to reflect events or circumstances after the date on which the statement is made or to reflectthe occurrence of unanticipated events. Further, the information about our intentions contained in this report is a statement of our intention as of the date of thisreport and is based upon, among other things, the existing regulatory environment, industry conditions, market conditions and prices and our assumptions as ofsuch date. We may change our intentions, at any time and without notice, based upon any changes in such factors, in our assumptions or otherwise.32Unless the context otherwise requires, all references to (i) “PRC” and “China” are to the People’s Republic of China; (ii) “U.S. dollar,” “$” and “US$”are to United States dollars; and (iii) “RMB”, “Yuan” and Renminbi are to the currency of the PRC or China.OverviewLuokung Technology was incorporated on October 27, 2009 under the laws of the British Virgin Islands. We are a holding company and conduct ouroperations through LK Technology Ltd., a British Virgin Islands limited liability company (“LK Technology”) and its whollyowned subsidiaries, MMB Limited andMobile Media (China) Limited and their respective subsidiaries and a contractuallycontrolled entity in the PRC named Beijing Zhong Chuan Shi Xun Technology,which hold the rights to deploy WiFi systems on about 700 trains in China, including 290 trains in which WiFi systems have already been installed and are inoperation. In May 2010, we consummated an initial public offering of our American Depository Shares, or ADSs, for gross proceeds of $16 million, and our ADSswere listed on the NASDAQ Capital Market under the ticker symbol “KONE”. Our ordinary shares are not currently listed on any trading market. Our AmericanDepository Shares (“ADSs”) were voluntarily delisted from the NASDAQ Capital Market on September 19, 2018. We have applied to NASDAQ for the listing of ourordinary shares on the NASDAQ Capital Market and received an approval for listing of Ordinary Shares on August 6, 2018, and as of the date of this transitionreport, that application and approval are currently under review.On August 17, 2018, we consummated an asset exchange transaction, pursuant to which we exchanged all issued and outstanding capital stock in TopskyInfoTech Holdings Pte Ltd., the parent of Softech, for the issued and outstanding capital stock of LK Technology (the “Asset Exchange”). In connection with theAsset Exchange, we changed our name on August 20, 2018, and on September 20, 2018, completed the issuance to the shareholders of C Media Limited, the formerparent of LK Technology, of (i) 185,412,599 of our ordinary shares, par value $0.01 per share and (ii) 1,000,000 of our preferred shares. Upon the consummation of theAsset Exchange, we ceased our previous business operations and became a company focused on the provision of WiFi and mobile application products for longdistance travelers in China.On August 25, 2018, LK Technology entered into a Stock Purchase Agreement (the “Agreement”) with the shareholders (“Shareholders”) of SuperengineHoldings Limited, a limited liability company organized under the laws of the British Virgin Islands (the “Superengine”), pursuant to which LK Technology acquiredall of the issued and outstanding capital stock of Superengine for an aggregate purchase price of US$60 million (the “Purchase Price”), which are paid by theissuance of our Ordinary Shares in an amount equal to the quotient of (x) the Purchase Price divided by (y) the average of the closing prices of the Ordinary Shareson the NASDAQ Capital Market over the 12 months period preceding July 31, 2018. We are a party to the Agreement in connection with the issuance of theOrdinary Shares and certain other limited purposes.Results of operations for the fiscal year ended December 31, 2017 compared to the fiscal year ended December 31, 2016.RevenueWe provide displaybased online advertising services to customers by integrating text description, image and video, and displaying the advertisements in aprominent position of LuoKuang Application. We recognize revenue in accordance with ASC 605, over the contractual term based on the agreements andconfirmation letters signed by both parties, commencing on the date the customer’s advertisement is displayed on our platform.For the year ended December 31, 2017, we had revenue of $26,082,417, as compared to revenue of $5,233,145 for the year ended December 31, 2016, anincrease of $20,849,272, or 398.4%, which was primarily due to the increase of our advertising clients.Cost of revenueOur cost of revenue primarily consists of depreciation, labor cost, WiFi equipment installation fees, data charges, annual payments to local railway bureau,other overhead costs.33Cost of revenue for the year ended December 31, 2017 was $5,547,779, representing a decrease of $767,725 or 12.2% as compared to $6,315,504 for the yearended December 31, 2016. The decrease was primarily attributable to the decrease in labor cost as a result of our cost control and a decrease in the number ofmaintenance staff. Additionally, data charges decreased as train passengers prefer using their mobile data, leading to a decrease in 3G and 4G data.Selling and marketing expenseOur selling and marketing expense mainly include promotional and marketing expenses and compensation for our sales and marketing personnel.Selling expense totaled $23,908,733 for the year ended December 31, 2017, as compared to $6,209,804 for the year ended December 31, 2016, an increase of$17,698,929 or 285.0%. The increase was primarily attributable to the increase in promotional and marketing activities conducted by the Company.General and administrative expenseOur general and administrative expenses consist primarily of salaries and benefits for our general and administrative personnel, rent, fees and expenses forlegal, accounting and other professional servicesGeneral and administrative expense totaled $2,451,249 for the year ended December 31, 2017, as compared to $2,108,854 for the year ended December 31,2016, an increase of $342,395 or 16.2%.Research and development expenses.Research and development expenses primarily consist of salaries and benefits for research and development personnel.Research and development expenses totaled $1,046,198 for the year ended December 31, 2017, as compared to $2,882,202 for the year ended December 31,2016, a decrease of $1,836,004 or 63.7%. The decrease was primarily attributable to the Company reduced its expenses in research and development temporarily asour products are quite stable at present.Loss from operationsAs a result of the factors described above, for the year ended December 31, 2017, loss from operations amounted to $6,871,542, as compared to loss fromoperations of $12,283,219 for the year ended December 31, 2016, a decrease of $5,411,677, or 44.1%.Other income/expenseOther income/expense mainly include interest income from bank deposits, foreign currency transaction gain, and loss from investment.Net lossAs a result of the factors described above, our net loss was $6,810,454 for the year ended December 31, 2017, compared to net loss of $13,049,031 for theyear ended December 31, 2016, a decrease of $6,238,577 or 47.8%.Foreign currency translation adjustmentOur reporting currency is the U.S. dollar. The functional currency of our parent company and subsidiaries of Merchant Supreme and Prime Cheer is the U.S.dollar and the functional currency of the Company’s subsidiaries incorporated in China is the Chinese Renminbi (“RMB”). The financial statements of oursubsidiaries incorporated in China are translated to U.S. dollars using period end rates of exchange for assets and liabilities, and average rates of exchange (for theperiod) for revenue, costs, and expenses. Net gains and losses resulting from foreign exchange transactions are included in the consolidated statements ofoperations and comprehensive loss. As a result of foreign currency translations, which are a noncash adjustment, we reported a foreign currency translation gain of$90,671 for the year ended December 31, 2017, as compared to a foreign currency translation loss of $387,375 for the year ended December 31, 2016. This noncashgain had the effect of increasing/decreasing our reported comprehensive income/loss.34Comprehensive lossAs a result of our foreign currency translation adjustment, we had comprehensive loss for the year ended December 31, 2017 of $6,719,783, compared tocomprehensive loss of $12,661,656 for the year ended December 31, 2016.B. LIQUIDITY AND CAPITAL RESOURCESThe information contained in “Item 5. Operating and Financial Review and Prospects – A. Operating Results – Liquidity and Capital Resources” isincorporated herein by reference.C. RESEARCH AND DEVELOPMENT, PATENTS AND LICENSES, ETC.The discussions of our research and development activities were contained in “Item 4. Information about our Company – B. Business Overview –Research and Development” and “Item 5. Operating and Financial Review and Prospects – A. Operating Results – Operating Expenses – Research and DevelopmentExpenses” are incorporated herein by reference. In the years ended December 31, 2017 and 2016, we spent $1,046,198 and $2,882,202, respectively, on research anddevelopment activities.D. TREND INFORMATION.Industry and Market OutlookChina has awarded licenses to mobile phone companies to provide the superfast 4G network to customers. The licenses, which are designed to give mobilephone users faster access to services, were granted by the government to China Mobile, China Unicom Hong Kong and China Telecom. Since the grants, ChinaMobile has offered 4G to subscribers from December 18, 2013. China Unicom and China Telecom, the country's other two major carriers, also offer 4G wireless. Thenumber of China Mobile 4G customers has exceeded 900 million by the end of October in 2017. The move greatly bolstered business for telecom equipment makersand a range of other companies.Under China’s 12th FiveYear Plan, a key priority is for China to transition from “Made in China” to “Designed in China.” In order to achieve this goal, thegovernment plans to heavily invest in science and technology education and R&D so as to further develop China’s intellectual property rights system and support“NextGeneration IT” as a Strategic Emerging Industry (SEI). Additionally, China plans to upgrade the technological capabilities of private and public services,including “triple play” services (the convergence of telecom, broadcasting and Internet networks), ecommerce, and egovernment and statistics systems.Furthermore, the government plans to invest in R&D of the "Internet of things" and cloud computing, and develop digital and virtual technologies.E. OFFBALANCE SHEET ARRANGEMENTSWe have not entered into any financial guarantees or other commitments to guarantee the payment obligations of any third parties. We have not enteredinto any derivative contracts that are indexed to our shares and classified as shareholder’s equity, or that are not reflected in our consolidated financial statements.Furthermore, except for the mortgage referenced above, we do not have any retained or contingent interest in assets transferred to an unconsolidated entity thatserves as credit, liquidity or market risk support to such entity. We do not have any variable interest in any unconsolidated entity that provides financing, liquidity,market risk or credit support to us or engages in leasing, hedging or research and development services with us.35F. TABULAR DISCLOSURE OF CONTRACTUAL OBLIGATIONSAs of December 31, 2017, we did not have any contractual obligations required to be disclosed in this Item 5.F. ITEM 6. DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES.A. DIRECTORS AND SENIOR MANAGEMENT.Executive Officers and DirectorsThe following table sets forth the names and ages as of the date of this transition report of each of our executive officers and directors:NameAgePositionXuesong Song50Chief Executive Officer, Chairman and DirectorDongpu Zhang50PresidentJie Yu34Chief Financial OfficerKegang Peng46Vice President and DirectorChuang Tao51DirectorDennis Galgano (1)(2)69Director (Independent)Jin Shi (1)(2)49Director (Independent)Jiming Ha (1)(3)56Director (Independent)Zhihao Xu (3)42Director (Independent)(1)Member of the Audit Committee.(2)Member of the Compensation Committee.(3)Member of the Nominating and Corporate Governance Committee.Set forth below is biographical information concerning our executive officers and directors.Xuesong Song is a cofounder of C Media Limited and served as its chairman of the board of directors and chief executive officer from 2012 until theconsummation of the AEA. From February 2014 through April 2017, Mr. Song served as a director of Seven Stars Cloud Group, Inc. (NASDAQ: SSC) and fromJanuary 2013 through February 2015, Mr. Song served as a director of Pingtan Marine Enterprise Ltd. (NASDAQ: PME). From May 2006 through January 2009, Mr.Song served as the Chairman of the Board of ChinaGrowth North Acquisition Corporation, a special purpose acquisition company, which acquired UIB GroupLimited in January 2009, in which he remains a director. Mr. Song has been a principal of Chum Capital Group Limited since August 2001, a merchant banking firmthat invests in growth Chinese companies and advises them in financings, mergers & acquisitions and restructurings, and chief executive officer of Beijing ChumInvestment Co., Ltd. since December 2001. Mr. Song has been a director of Mobile Vision Communication Ltd. since July 2004. Mr. Song received a Master’s ofBusiness Administration degree from Oklahoma City/Tianjin Program.Dongpu Zhang was appointed as the President of the Company effective on August 25, 2018. Mr. Dongpu Zhang has served as the General Manager ofSuperEngine Graphics Software Technology Development (Suzhou) Co., Ltd. (“SuperEngine Suzou”) and the Chief Executive Officer of SuperEngine HoldingLimited since September 2016. From February, 2014 to August, 2016, Mr. Zhang served as vice president of Industrial Development Group under China Fortune LandDevelopment Co., Ltd. From March, 2009 to February, 2014, Mr. Zhang served as the vice president of Aerospace Science and Technology Holding Group Co., Ltd.Mr. Zhang receive his Master Degree of Computer Science from Harbin Institute of Technology in 1994 and his Bachelor Degree of information system fromChangsha Institute of technology in 1991.Jie Yu served as the chief financial officer of C Media Limited from January 2018 until the consummation of the asset exchange transactions. From June 2016to January 2018, Mr. Yu served as chief financial officer and secretary of the board of directors of MTI Environment Group Limited. Prior to joining MTI, Mr. Yuserved as the senior manager at DA HUA CPA from November 2012 to May 2016. Previously, Mr. Yu served as the manager at Crowe Horwath (Hong Kong) CPA.Mr. Yu holds a bachelor degree in accounting and finance from University of Auckland and postgraduate diploma in accounting from University of Auckland.36Kegang Peng served as the Vice Chairman of the board of directors C Media Limited from October 2014 to the consummation of the asset exchangetransactions, and is now a member of the Company’s board of directors. Previously, from 2012 to 2014, Mr. Peng was chairman of the board and founder of JiangsuSuqian Jinghaiboyuan Information and Technology Co., Ltd. Mr. Peng studied at Beijing University of Aeronautics and Astronautics majoring computer andapplication.20F 1 f20f2017_luokungtech.htm AMENDMENT NO. 1 TO FORM 20FUNITED STATESSECURITIES AND EXCHANGE COMMISSIONWASHINGTON, D.C. 20549FORM 20F☐ REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934OR☐ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934For the Fiscal year ended _____________OR☒ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934For the transition period from October 1, 2017 to December 31, 2017☐ SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934Date of event requiring this shell company report Commission file number: 00134738Luokung Technology Corp.(Exact name of Registrant as specified in its charter)Not applicable(Translation of Registrant’s name into English)British Virgin IslandsLAB 32, SOHO 3Q, No 9, Guanghua Road, Chaoyang District, BeijingPeople’s Republic of China, 100020(Jurisdiction of incorporation or organization)(Address of principal executive offices)Mr. Muqiao GengLAB32, SOHO 3Q, No 9, Guanghua Road, Chaoyang District, BeijingPeople’s Republic of China 100020Tel: (86) 1085866721(Name, telephone, Email and/or facsimile number and address of company contact person)Securities registered or to be registered pursuant to Section 12(b) of the Act:Title of each className of each exchange on which registeredOrdinary shares, par value $0.01 per shareNonePreferred shares, par value $0.01 per shareNoneSecurities registered or to be registered pursuant to Section 12(g) of the Act:none(Title of Class)Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act:none(Title of Class)Indicate the number of outstanding shares of each of the issuer’s classes of capital or common stock as of the close of the period covered by the transitionreport. 187,097,599 Ordinary Shares, including 186,383,224 Ordinary Shares represented by 714,375 American Depositary Shares, and 1,000,000 Preferred Sharesoutstanding as of September 20, 2018.Indicate by check mark if the registrant is a wellknown seasoned issuer, as defined in Rule 405 of the Securities Act. ☐ Yes ☒ NoIf this report is an annual or transition report, indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of theSecurities Exchange Act of 1934. ☐ Yes ☒ NoIndicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirementsfor the past 90 days. ☒ Yes ☐ NoIndicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File requiredto be submitted and posted pursuant to Rule 405 of Regulation ST (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that theregistrant was required to submit and post such files). ☒ Yes ☐ NoIndicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a nonaccelerated filer. See definition of “accelerated filer andlarge accelerated filer” in Rule 12b2 of the Exchange Act. (Check one):Large accelerated filer ☐ Accelerated filer ☐ Nonaccelerated filer ☒Indicate by check mark which basis of accounting the registrant has used to prepare the financial statements included in this filing.U.S. GAAP ☒International Financial Reporting Standards as issuedby the International Accounting Standards Board ☐Other ☐If “Other” has been checked in response to the previous question, indicate by check mark which financial statement item the registrant has elected tofollow. Item 17 ☐ Item 18 ☐If this is an transition report, indicate by check mark whether the registrant is a shell company (as defined in Rule 12b2 of the ExchangeAct). ☐ Yes ☒ NoExplanatory NoteLuokung Technology Corp. (the “Company”) is filing this transition report on Form 20F (“Transition Report”) in connection with the completion of theexchange of certain of its assets for substantially all of the assets of C Media Limited (“C Media”) pursuant to that Asset Exchange Agreement, dated January 25,2018 (the “Original AEA”), as supplemented by the Addendum to Asset Exchange Agreement, dated October 3, 2018 (the “Addendum” and together with theOriginal AEA, the “AEA”). Following the consummation of the AEA, on October 4, 2018, the Company changed its fiscal year end from September 30 to the fiscalyear end used by C Media, December 31. This Transition Report covers the threemonth period from Octorber 1, 2017 to December 31, 2017, and the fiscal yearsdescribed herein.In this transition report:●References to the “Company”, “we”, “our” and “us” are to Luokung Technology Corp. and its consolidated subsidiaries and variable interestentity, except as the context otherwise requires;●This transition report on Form 20F covers the threemonth period from October 1, 2017 through December 31, 2017 (the “Transition Period”) andreflects our financial results thereof. Prior to this transition report on Form 20F, our two most recent annual reports on Form 20F cover the fiscalyears ended September 30, 2017 and September 30, 2016, respectively, and reflect financial results for the respective twelvemonth periods fromOctober 1 to September 30. Unless otherwise noted, all references to years are to the calendar year from January 1 to December 31 and referencesto our fiscal year or years are to the fiscal year or years which, prior to the Transition Period, ended September 30, while from and after theTransition Period, ended December 31;●References to an “ADS” are to an American Depositary Share, each of which represents one of our Ordinary Shares with a par value of $.01 pershare.Special Note Regarding Forwardlooking StatementsThis transition report contains forwardlooking statements that involve risks and uncertainties. These statements involve known and unknown risks,uncertainties and other factors that may cause our actual results, performance or achievements to be materially different from those expressed or implied by theforwardlooking statements.You can identify these forwardlooking statements by words or phrases such as “may,” “will,” “expect,” “anticipate,” “aim,” “estimate,” “intend,” “plan,”“believe,” “likely to” or other similar expressions. We have based these forwardlooking statements largely on our current expectations and projections about futureevents and financial trends that we believe may affect our financial condition, results of operations, business strategy and financial needs. You should not placeundue reliance on these forwardlooking statements, which apply only as of the date of this transition report. These forwardlooking statements include:●our future business development, results of operations and financial condition;●expected changes in our net revenues and certain cost or expense items;●our ability to attract and retain customers; and●trends and competition in the enterprise mobile software application market.You should read this transition report thoroughly with the understanding that our actual future results may be materially different from, and/or worse, thanwhat we expect. We qualify all of our forwardlooking statements by these cautionary statements. Other sections of this transition report include additional factorswhich could adversely impact our business and financial performance. Moreover, we operate in an evolving environment. New risk factors and uncertainties emergefrom time to time and it is not possible for our management to predict all risk factors and uncertainties, nor can we assess the impact of all factors on our business orthe extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forwardlooking statements.This transition report also contains estimates, projections and statistical data related to the market for the provision of WiFi and mobile applications inChina. This market data, including data from IDC, a leading provider of market data and intelligence, speaks as of the date it was published and includes projectionsthat are based on a number of assumptions and are not representations of fact. The market for the provision of WiFi and mobile applications in China may not growat the rates projected by the market data, or at all. The failure of the market to grow at the projected rates may materially and adversely affect our business and themarket price of our ADSs. In addition, the rapidly changing nature of the market for the provision of WiFi and mobile applications subjects any projections orestimates relating to the growth prospects or future condition of our market to significant uncertainties. If any one or more of the assumptions underlying the marketdata proves to be incorrect, actual results may differ from the projections based on these assumptions.You should not rely upon forwardlooking statements as predictions of future events. We undertake no obligation to update or revise any forwardlookingstatements, whether as a result of new information, future events or otherwise.TABLE OF CONTENTSPart IItem 1.Identity of Directors, Senior Management and Advisers.1Item 2.Offer Statistics and Expected Timetable.1Item 3.Key Information.1A.Selected Financial Data.1B.Capitalization and Indebtedness.3C.Reasons for the Offer and Use of Proceeds.3D.Risk Factors.3Item 4.Information on the Company.19A.History and Development of the Company.19B.Business Overview.20C.Organizational Structure.30D.Property, Plants and Equipment.32Item 4A.Unresolved Staff Comments.32Item 5.Operating and Financial Review and Prospects.32A.Operating Results.32B.Liquidity and Capital Resources.35C.Research and Development, Patents and Licenses, etc.35D.Trend Information.35E.Offbalance Sheet Arrangements.35F.Tabular Disclosure of Contractual Obligations.36Item 6.Directors, Senior Management and Employees.36A.Directors and Senior Management.36B.Compensation.37C.Board Practices.40D.Employees.43E.Share Ownership.43Item 7.Major Shareholders and Related Party Transactions.44A.Major Shareholders.44B.Related Party Transactions.45C.Interests of Experts and Counsel.45Item 8.Financial Information.45A.Consolidated Statements and Other Financial Information.45B.Significant Changes.46Item 9.The Offer and Listing.46A.Offer and Listing Details.46B.Plan of Distribution.47C.Markets.47D.Selling shareholders.48E.Dilution.48F.Expenses of the issue.48Item 10.Additional Information.48A.Share Capital.48B.Memorandum and Articles of Association.48C.Material Contracts.53D.Exchange Controls.54E.Taxation.61F.Dividends and Paying Agents.67G.Statement by Experts.67H.Documents on Display.67I.Subsidiary Information.68Item 11.Quantitative and Qualitative Disclosures about Market Risk.68Item 12.Description of Securities Other than Equity Securities.69A.Debt Securities.69B.Warrants and Rights.69C.Other Securities.69D.American Depositary Shares.69iPart IIItem 13.Defaults, Dividend Arrearages and Delinquencies.71Item 14.Material Modifications to the Rights of Security Holders and Use of Proceeds.71Item 15.Controls and Procedures.71Item 16.[Reserved.]72Item 16A.Audit Committee Financial Expert.72Item 16B.Code of Ethics.73Item 16C.Principal Accountant Fees and Services.73Item 16D.Exemptions from the Listing Standards for Audit Committees.73Item 16E.Purchases of Equity Securities by the Issuer and Affiliated Purchasers.73Item 16F.Change in Registrant’s Certifying Accountant.73Item 16G.Corporate Governance.73Item 16H.Mine Safety Disclosure.73Part IIIItem 17.Financial Statements.74Item 18.Financial Statements.74Item 19.Exhibits.74Index to Consolidated Financial StatementsF1iiPART IITEM 1. IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS.The directors of Luokung Technology Corp. are Xuesong Song, Kegang Peng, Dennis Galgano, Jin Shi, Jiming Ha, Zhihao Xu and Chuang Tao. Thebusiness address for our directors is LAB 32, SOHO 3Q, No 9, Guanghua Road, Chaoyang District, Beijing, People’s Republic of China.Moore Stephens CPA Limited has served as our auditor since October 5, 2018, and is located at 801806 Silvercord Tower 1, 30 Canton road, Tsimshatsui,Kowloon, Hong Kong. BDO China Shun Lun Pan Certified Public Accountants LLP served as our auditors for the last three years, and are located at 4F, No. 61Nanjing Road, Shanghai, People’s Republic of China.Garvey Schubert Barer, P.C., serves as our legal counsel in the United States, and is located at Flour Mill Building, 1000 Potomac Street NW, Suite 200,Washington, D.C., 200073501.Conyers Dill & Pearlman serves as our legal counsel with regard to the laws of the British Virgin Islands, and is located at 29th Floor, One Exchange Square,8 Connaught Place, Central, Hong Kong.ITEM 2. OFFER STATISTICS AND EXPECTED TIMETABLE.Not applicable.ITEM 3. KEY INFORMATION.A. SELECTED FINANCIAL DATA.Luokung Technology Corp. and its consolidated subsidiaries (“Luokung Technology”, “we”, “us”, or “the Company”) consummated an asset exchangeagreement pursuant to which we exchanged our existing assets with those of C Media Limited (the “Asset Exchange”) on August 17, 2018, and we changed ourname from Kingtone Wirelessinfo Solution Holding Ltd. to our current name on August 20, 2018. On October 4, 2018, in connection with the consummation of the Asset Exchange, we changed our fiscal year end from September 30 to December 31.1The selected financial data for the fiscal years ended December 31 2017 and 2016 have been derived from our audited consolidated and combined financialstatements. The selected consolidated and combined financial data should be read in conjunction with our audited financial statements and the accompanying notesand “Item 5 – Operating and Financial Review and Prospects.” Our consolidated and combined financial statements are prepared and presented in accordance withUnited States generally accepted accounting principles, or U.S. GAAP. Our historical results do not necessarily indicate our results expected for any future periods.You should not view our historical results as an indicator of our future performance.LK TECHNOLOGY LTD. AND SUBSIDIARIESSELECTED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS(IN U.S. DOLLARS)For the years ended December 31,20172016Revenues$26,082,417$5,233,145Less: Cost of revenues5,547,7796,315,504Less: Operating expenses:Selling and marketing23,908,7336,209,804General and administrative2,451,2492,108,854Research and development1,046,1982,882,202Total operating expenses27,406,18011,200,860Loss from operations(6,871,542)(12,283,219)Other income (expense):Interest expense(26,611)(4,412)Foreign exchange gains(losses)350,679(298,257)Loss from investment(428,571)Other income (expense), net(262,980)(34,572)Total other income (expense), net61,088(765,812)Loss before income taxes(6,810,454)(13,049,031)Income taxesNet loss$(6,810,454)$(13,049,031)Other comprehensive income:Foreign currency translation adjustment90,671387,375Total comprehensive loss$(6,719,783)$(12,661,656)2LK TECHNOLOGY LTD. AND SUBSIDIARIESSELECTED CONSOLIDATED BALANCE SHEETS(IN U.S. DOLLARS)As of December 31,20172016Accounts receivable, net of allowance for doubtful accounts9,729,6251,865,836Amounts due from related parties11,760,692Property and equipment, net5,044,8727,771,027Goodwill7,239,9367,239,936TOTAL ASSETS37,582,85821,114,832Accounts payable8,784,5186,446,584Accrued liabilities and other payables12,962,91211,329,613Total liabilities25,311,11333,905,520Total Shareholder’s Equity (Deficit)12,271,745(12,790,688)TOTAL LIABILITIES AND SHAREHOLDER’S EQUITY (DEFICIT)37,582,85821,114,832B. CAPITALIZATION AND INDEBTEDNESS.Not applicable.C. REASONS FOR THE OFFER AND USE OF PROCEEDS.Not applicable.D. RISK FACTORS.An investment in our ADSs and ordinary shares involves a high degree of risk. You should carefully consider the risks and uncertainties described belowtogether with all other information contained in this transition report, including the matters discussed under “Special Note Regarding ForwardLooking Statements,”before you decide to invest in our ADSs or ordinary shares. You should pay particular attention to the fact that we are a holding company with substantialoperations in China and are subject to legal and regulatory environments that in many respects differ from those of the United States. If any of the following risks, orany other risks and uncertainties that are not presently foreseeable to us, actually occur, our business, financial condition, results of operations, liquidity and ourfuture growth prospects would be materially and adversely affected. You should also consider all other information contained in this transition report beforedeciding to invest in our ADSs or ordinary shares.Risks Related to Our Company and Our IndustryThe Company had incurred negative cash flows from operating activities and net losses as of December 31, 2017. These matters raise substantial doubt aboutthe Company’s ability to continue as a going concern.The Company’s consolidated financial statements are prepared using generally accepted accounting principles in the United States of America applicableto a going concern, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. As of and for the year endedDecember 31, 2017, the Company had incurred significant operating losses and working capital deficit. The ability of the Company to continue as a going concern isdependent on the Company obtaining adequate capital to fund operating losses until it becomes profitable. If the Company is unable to obtain adequate capital, itcould be forced to cease operations. The accompanying consolidated financial statements do not include any adjustments that might be necessary if the Companyis unable to continue as a going concern.3We may undertake acquisitions, investments, joint ventures or other strategic alliances, which could have a material adverse effect on our ability to manageour business. In addition, such undertakings may not be successful.Our strategy includes plans to grow both organically and through acquisitions, participation in joint ventures or other strategic alliances. Joint venturesand strategic alliances may expose us to new operational, regulatory and market risks, as well as risks associated with additional capital requirements. We may not beable, however, to identify suitable future acquisition candidates or alliance partners. Even if we identify suitable candidates or partners, we may be unable tocomplete an acquisition or alliance on terms commercially acceptable to us. If we fail to identify appropriate candidates or partners, or complete desired acquisitions,we may not be able to implement our strategies effectively or efficiently. In addition, our ability to successfully integrate acquired companies and their operations may be adversely affected by several factors. These factorsinclude:1.diversion of management’s attention;2.difficulties in retaining customers of the acquired companies;3.difficulties in retaining personnel of the acquired companies;4.entry into unfamiliar markets;5.unanticipated problems or legal liabilities; and6.tax and accounting issues.If we fail to integrate acquired companies efficiently, our earnings, revenue growth and business could be negatively affected.Due to intense competition for highlyskilled personnel, we may fail to attract and retain enough sufficiently trained employees to support our operations; ourability to bid for and obtain new projects may be negatively affected and our revenues could decline as a result.The IT industry relies on skilled employees, and our success depends to a significant extent on our ability to attract, hire, train and retain qualifiedemployees. There is significant competition in China for professionals with the skills necessary to develop the products and perform the services we offer to ourcustomers. Increased competition for these professionals, in the mobile application design area or otherwise, could have an adverse effect on us if we experiencesignificant increase in the attrition rate among employees with specialized skills, which could decrease our operating efficiency and productivity and could lead to adecline in demand for our services.In addition, our ability to serve existing customers and business partners and obtain new business will depend, in large part, on our ability to attract, trainand retain skilled personnel that enable us to keep pace with growing demands for wifi connectivity and mobile applications, evolving industry standards andchanging customer preferences. Our failure to attract, train and retain personnel with the qualifications necessary to fulfill the needs of our existing and futurecustomers or to assimilate new employees successfully could have a material adverse effect on our business, financial condition and results of operations. Ourfailure to retain our key personnel on business development or find suitable replacements of the key personnel upon their departure may lead to shrinking newimplementation projects, which could materially adversely affect our business.4Our business depends substantially on the continuing efforts of our senior executives and other key personnel, and our business may be severely disrupted if welose their services.Our future success heavily depends upon the continued services of our senior executives and other key employees, particularly since we recentlyappointed a new chairman. We are reliant on the services of Mr. Xuesong Song, our chairman, chief executive officer and member of our board of directors. If one ormore of our senior executives or key employees is unable or unwilling to continue in his or her present position, we may not be able to replace such employee easily,or at all, we may incur additional expenses to recruit, train and retain replacement personnel, our business may be severely disrupted, and our financial condition andresults of operations may be materially adversely affected.Our business could suffer if our executives and directors compete against us and our noncompetition agreements with them cannot be enforced.If any of our senior executives or key employees joins a competitor or forms a competing company, we may lose customers, knowhow and keyprofessionals and staff members to them. Also, if any of our business development managers who keep a close relationship with our customers and businesspartners joins a competitor or forms a competing company, we may lose customers, and our revenues may be materially adversely affected. Most of our executiveshave entered, or will soon enter, into employment agreements with us that contain or will contain noncompetition provisions. However, if any dispute arisesbetween our executive officers and us, such noncompetition provisions may not be enforceable, especially in China, where all of these executive officers and keyemployees reside, in light of the uncertainties with China’s legal system. See “Risk Factors — Risks Related to Doing Business in China — Uncertainties withrespect to the PRC legal system could adversely affect us.”Our computer networks may be vulnerable to security risks that could disrupt our services and adversely affect our results of operations.Our computer networks may be vulnerable to unauthorized access, computer hackers, computer viruses and other security problems caused byunauthorized access to, or improper use of, systems by third parties or employees. A hacker who circumvents security measures could misappropriate proprietaryinformation or cause interruptions or malfunctions in operations. Computer attacks or disruptions may jeopardize the security of information stored in andtransmitted through computer systems and mobile devices of our customers. Actual or perceived concerns that our systems may be vulnerable to such attacks ordisruptions may deter customers from using our services. As a result, we may be required to expend significant resources to protect against the threat of thesesecurity breaches or to alleviate problems caused by these breaches, which could adversely affect our results of operations.If we do not continually enhance our solutions and service offerings, we may have difficulty in retaining existing customers and attracting new customers.We believe that our future success will depend, to a significant extent, upon our ability to enhance our existing applications and platform, and to introducenew features to meet the preferences and requirements of our customers in a rapidly developing and evolving market. Unexpected technical, operational, distributionor other problems could delay or prevent the introduction of one or more of these products or services, or any products or services that we may plan to introduce inthe future. Our present or future products may not satisfy the evolving preferences and tastes of our customers, and these solutions and services may not achieveanticipated market acceptance or generate incremental revenue. If we are unable to anticipate or respond adequately to the need for service or productenhancements due to resource, technological or other constraints, our business, financial condition and results of operations could be materially and adverselyaffected.5If we are unable to develop competitive new products and service offerings our future results of operations could be adversely affected.Our future revenue stream depends to a large degree on our ability to utilize our technology in a way that will allow us to offer new types of mobileapplications and services to a broader customer base. We will be required to make investments in research and development in order to continually develop newsoftware applications and related service offerings, enhance our existing platform, mobile applications and related service offerings and achieve market acceptanceof our mobile applications and service offerings. We may incur problems in the future in innovating and introducing new mobile applications and service offerings.Our developmentstage mobile applications may not be successfully completed or, if developed, may not achieve significant customer acceptance. If we are unableto successfully define, develop and introduce competitive new mobile applications, and enhance existing mobile applications, our future results of operations wouldbe adversely affected. The timely availability of new applications and their acceptance by customers are important to our future success. A delay in the developmentof new applications could have a significant impact on its results of operations.Changes in technology could adversely affect our business by increasing our costs, reducing our profit margins and causing a decline in our competitiveness.China’s wireless telecom industry, in which we operate, is characterized by rapidly changing technology, evolving industry standards, frequentintroductions of new services and solutions and enhancements as well as changing customer demands. New solutions and new technologies often render existingsolutions and services obsolete, excessively costly or otherwise unmarketable. As a result, our success depends on our ability to adapt to the latest technologicalprogress, such as the 5G standard and technologies, and to develop or acquire and integrate new technologies into our platform, mobile applications and relatedservices. Advances in technology also require us to commit substantial resources to developing or acquiring and then deploying new technologies for use in ouroperations. We must continuously train personnel in new technologies and in how to integrate existing hardware and software systems with these newtechnologies. We may not be able to adapt quickly to new technologies or commit sufficient resources to compete successfully against existing or new competitorsin bringing to market solutions and services that incorporate these new technologies. We may incur problems in the future in innovating and introducing new mobileapplications and service offerings. Our development of new mobile applications and platform enhancements may not be successfully completed or, if developed,may not achieve significant customer acceptance. If we fail to adapt to changes in technologies and compete successfully against established or new competitors,our business, financial condition and results of operations could be adversely affected.Problems with the quality or performance of our hardware, software or other systems may cause delays in the introduction of new solutions or result in the lossof customers and revenues, which could have a material and adverse effect on our business, financial condition and results of operations.Our hardware and software systems are complex and may contain defects, errors or bugs when first introduced to the market or to a particular customer, oras new versions are released. Because we cannot test for all possible scenarios, our systems may contain errors that are not discovered until after they have beeninstalled or implemented, and we may not be able to timely correct these problems. These defects, errors or bugs could interrupt or delay the completion of projectsor sales to our customers. In addition, our reputation may be damaged and we may fail to acquire new projects from existing customers or new customers. Errors mayoccur when we provide systems integration and maintenance services. Even in cases where we have agreements with our customers that contain provisionsdesigned to limit our exposure to potential claims and liabilities arising from customer problems, these provisions may not effectively protect us against such claimsin all cases and in all jurisdictions. In addition, as a result of business and other considerations, we may undertake to compensate our customers for damages arisingfrom the use of our solutions, even if our liability is limited by these provisions. Moreover, claims and liabilities arising from customer problems could also result inadverse publicity and materially and adversely affect our business, results of operations and financial condition. We currently do not carry any product or serviceliability insurance and any imposition of liability on us may materially and adversely affect our business and increase our costs, resulting in reduced revenues andprofitability.Our products may contain undetected software defects, which could negatively affect our revenues.Our software products are complex and may contain undetected defects. Although we test our products, it is possible that errors may be found or occur inour new or existing products after we have commenced commercial shipment of those products. Defects, whether actual or perceived, could result in adversepublicity, loss of revenues, product returns, a delay in market acceptance of our products, loss of competitive position or claims against us by customers. Any suchproblems could be costly to remedy and could cause interruptions, delays, or cessation of our product sales, which could cause us to lose existing or prospectivecustomers and could negatively affect our results of operations.6We may be subject to infringement, misappropriation and indemnity claims in the future, which may cause us to incur significant expenses, pay substantialdamages and be prevented from providing our services or technologies.Our success depends, in part, on our ability to carry out our business without infringing the intellectual property rights of third parties. Patent andcopyright law covering softwarerelated technologies is evolving rapidly and is subject to a great deal of uncertainty. Our selfdeveloped or licensed technologies,processes or methods may be covered by thirdparty patents or copyrights, either now existing or to be issued in the future. Any potential litigation may cause us toincur significant expenses. Thirdparty claims, if successfully asserted against us may cause us to pay substantial damages, seek licenses from third parties, payongoing royalties, redesign our services or technologies, or prevent us from providing services or technologies subject to these claims. Even if we were to prevail,any litigation would likely be costly and timeconsuming and divert the attention of our management and key personnel from our business operations.Our failure to protect our intellectual property rights may undermine our competitive position, and subject us to costly litigation to protect our intellectualproperty rights.Any misappropriation of our technology or the development of competitive technology could seriously harm our business. We regard a substantial portionof our hardware and software systems as proprietary and rely on statutory copyright, trademark, patent, trade secret laws, customer license agreements, employeeand thirdparty nondisclosure agreements and other methods to protect our proprietary rights. Nevertheless, these resources afford only limited protection and theactions we take to protect our intellectual property rights may not be adequate. In particular, third parties may infringe or misappropriate our proprietarytechnologies or other intellectual property rights, which could have a material adverse effect on our business, financial condition and results of operations. Inaddition, intellectual property rights and confidentiality protection in China may not be as effective as in the United States, and policing unauthorized use ofproprietary technology can be difficult and expensive. Further, litigation may be necessary to enforce our intellectual property rights, protect our trade secrets ordetermine the validity and scope of the proprietary rights of others. The outcome of any such litigation may not be in our favor. Any such litigation may be costlyand may divert management attention, as well as our other resources, away from our business. An adverse determination in any such litigation will impair ourintellectual property rights and may harm our business, prospects and reputation. In addition, we have no insurance coverage against litigation costs and wouldhave to bear all litigation costs in excess of the amount recoverable from other parties. The occurrence of any of the foregoing could have a material adverse effecton our business, financial condition and results of operations. Our solutions incorporate a portion of, and work in conjunction with, thirdparty hardware and software solutions. If these thirdparty hardware or softwaresolutions are not available to us at reasonable costs, or at all, our results of operations could be adversely impacted.Although our hardware and software systems and mobile applications primarily rely on our own core technologies, some elements of our systemsincorporate a small portion of thirdparty hardware and software solutions. If any third party were to discontinue making their intellectual property available to us orour customers on a timely basis, or increase materially the cost of their licensing such intellectual property, or if our systems or applications failed to properlyfunction or interoperate with replacement intellectual property, we may need to incur costs in finding replacement thirdparty solutions and/or redesigning oursystems or applications to replace or function with or on replacement thirdparty proprietary technology. Replacement technology may not be available on termsacceptable to us or at all, and we may be unable to develop alternative solutions or redesign our systems or applications on a timely basis or at a reasonable cost. Ifany of these were to occur, our results of operations could be adversely impacted.7Our ability to sell our products is highly dependent on the quality of our service and support offerings, and our failure to offer high quality service could have amaterial adverse effect on our ability to market and sell our products.Our customers depend upon our customer service and support staff to resolve issues relating to our products. Highquality support services are critical forthe successful marketing and sale of our products. If we fail to provide highquality support on an ongoing basis, our customers may react negatively and we maybe materially and adversely affected in our ability to sell additional products to these customers. This could also damage our reputation and prospects with potentialcustomers. Our failure to maintain highquality support services could have a material and adverse effect on our business, results of operations and financialcondition.Weaknesses in our internal controls over financial reporting or disclosure controls and procedures may have a material adverse effect on our business, theprice of our ordinary shares, operating results and financial condition.We are required to establish and maintain appropriate internal controls over financial reporting and disclosure controls and procedures. Pursuant to Section404 of the SarbanesOxley Act of 2002 and the related rules adopted by the Securities and Exchange Commission, every public company is required to include amanagement report on its internal controls over financial reporting in its transition report, which contains management’s assessment of the effectiveness of thecompany’s internal controls over financial reporting. This requirement first applied to our annual report on Form 20F for the fiscal year ended on September 30,2011. In connection with our assessments of our disclosure controls and procedures and internal controls over financial reporting, management concluded that as ofSeptember 30, 2018, our disclosure controls and procedures and our internal controls over financial reporting were not effective due to lack of U.S. generallyaccepted accounting principles (“U.S. GAAP”) expertise in our current accounting team. Please refer to the discussion under Item 15, “Controls and Procedures” forfurther discussion of our material weakness as of December 31, 2017. Should we be unable to remediate the material weakness promptly and effectively, suchweakness could harm our operating results, result in a material misstatement of our financial statements, cause us to fail to meet our financial reporting obligations orprevent us from providing reliable and accurate financial reports or avoiding or detecting fraud. This, in turn, could result in a loss of investor confidence in theaccuracy and completeness of our financial reports, which could have an adverse effect on the trading price of our ordinary shares. Any litigation or otherproceeding or adverse publicity relating to the material weaknesses could have a material adverse effect on our business and operating results. We have very limited insurance coverage which could expose us to significant costs and business disruption.We do not maintain any insurance coverage for our leased properties. Should any natural catastrophes such as earthquakes, floods, typhoons or any actsof terrorism occur in Beijing, China, where our head office is located and most of our employees are based, or elsewhere in China, we might suffer not onlysignificant property damages, but also loss of revenues due to interruptions in our business operations, which could have a material adverse effect on our business,operating results or financial condition.The insurance industry in China is still at an early stage of development. Insurance companies in China offer limited business insurance products, and donot, to our knowledge, offer business liability insurance. As a result, we do not have any business liability insurance coverage for our operations. Moreover, whilebusiness disruption insurance is available, we have determined that the risks of disruption and cost of the insurance are such that we do not require it at this time.Any business disruption, litigation or natural disaster might result in substantial costs and diversion of resources, particularly if it affects our technology platformswhich we depend on for delivery of our software and services, and could have a material adverse effect on our financial condition and results of operations.We may be liable to our customers for damages caused by unauthorized disclosure of sensitive and confidential information, whether through our employees orotherwise.We are typically required to manage, utilize and store sensitive or confidential customer data in connection with the products and services we provide.Under the terms of our customer contracts, we are required to keep such information strictly confidential. We seek to implement specific measures to protectsensitive and confidential customer data. We require our employees to enter into nondisclosure agreements to limit such employees’ access to, and distribution of,our customers’ sensitive and confidential information and our own trade secrets. We can give no assurance that the steps taken by us in this regard will be adequateto protect our customers’ confidential information. If our customers’ proprietary rights are misappropriated by our employees, in violation of any applicableconfidentiality agreements or otherwise, our customers may consider us liable for that act and seek damages and compensation from us. However, we currently donot have any insurance coverage for mismanagement or misappropriation of such information by our employees. Any litigation with respect to unauthorizeddisclosure of sensitive and confidential information might result in substantial costs and diversion of resources and management attention.8We may face intellectual property infringement claims that could be timeconsuming and costly to defend. If we fail to defend ourselves against such claims, wemay lose significant intellectual property rights and may be unable to continue providing our existing products and services.It is critical that we use and develop our technology and products without infringing upon the intellectual property rights of third parties, includingpatents, copyrights, trade secrets and trademarks. Intellectual property litigation is expensive and timeconsuming and could divert management’s attention from ourbusiness. A successful infringement claim against us, whether with or without merit, could, among others things, require us to pay substantial damages, developnoninfringing technology, or rebrand our name or enter into royalty or license agreements that may not be available on acceptable terms, if at all, and cease making,licensing or using products that have infringed a third party’s intellectual property rights. Protracted litigation could also result in existing or potential customersdeferring or limiting their purchase or use of our products until resolution of such litigation, or could require us to indemnify our customers against infringementclaims in certain instances. Also, we may be unaware of intellectual property registrations or applications relating to our services that may give rise to potentialinfringement claims against us. Parties making infringement claims may be able to obtain an injunction to prevent us from delivering our services or usingtechnology containing the allegedly infringing intellectual property. Any intellectual property litigation could have a material adverse effect on our business, resultsof operations or financial condition. Seasonality and fluctuations in our customers’ spending cycle and other factors can cause our revenues and operating results to vary significantly from quarterto quarter and from year to year.Our revenues and operating results will vary significantly from quarter to quarter and from year to year due to a number of factors, many of which areoutside of our control. Our new lines of business acquired upon the consummation of the asset exchange transaction discussed below see higher customer use andactivity during the Chinese New Year holiday than other times during the year when rail travel is high, which lead to higher revenue during this period as morecustomers would like to place more advertising. Due to these and other factors, our operating results may fluctuate significantly from quarter to quarter and fromyear to year. These fluctuations are likely to continue in the future, and operating results for any period may not be indicative of our future performance in any futureperiod.Our corporate actions are substantially controlled by our principal shareholders, who can cause us to take actions in ways you may not agree with.Mr. Xuesong Song, our chairman, chief executive officer and a member of our board of directors, beneficially owns 19.31% of our outstanding ordinaryshares and 1,000,000 preferred shares, and each preferred share has the right to 399 votes at a meeting of the members of the Company. Our officers and directors asa group beneficially own an aggregate of approximately 33.69% of our outstanding ordinary shares. These shareholders, acting individually or as a group, couldexert control and substantial influence over matters such as electing directors, amending our constitutional documents, and approving acquisitions, mergers or otherbusiness combination transactions. This concentration of ownership and voting power may also discourage, delay or prevent a change in control of our company,which could deprive our shareholders of an opportunity to receive a premium for their shares as part of a sale of our company and might reduce the price of ourshares. Alternatively, our controlling shareholders may cause a merger, consolidation or change of control transaction even if it is opposed by our othershareholders, including those who purchase shares in this offering.9We depend on a small number of customers to derive a significant portion of our revenues. If we were to become dependent again upon a few customers, suchdependency could negatively impact our business, operating results and financial condition.We derived a material portion of our revenues from a small number of customers. In the years ended December 31, 2017 and 2016, our five largestcustomers accounted for 99.8% and 78.5% of our total sales, respectively, and our largest customer Guangdong Zhanshi Media Advertising Co., Ltd. accounted forapproximately 80.8% of our total sales during for the fiscal year ended December 31, 2017. As our customer base may change from yeartoyear, during such yearsthat the customer base is highly concentrated, the fluctuation of our sales to any of such major customers could have a material adverse effect on our business,operating results and financial condition. Moreover, our high customer base concentration may also adversely affect our ability to negotiate contract prices withthese customers, which may in turn materially and adversely affect our results of operations.Our historical outstanding accounts receivable have been relatively high. Inability to collect our accounts receivable on a timely basis, if at all, couldmaterially and adversely affect our financial condition, liquidity and results of operations.Historically, our outstanding accounts receivable have been relatively high. As of December 31, 2017 and 2016, our outstanding accounts receivable beforeimpairment were $10.4 million and $2.10 million, respectively. Although we conduct credit evaluations of our customers, we generally do not require collateral orother security from our customers. In addition, we have had a relatively high customer concentration. The outstanding accounts receivable balance for our largestcustomer was 45.3% and 38.5% of our total accounts receivable balance as of December 31, 2017 and 2016, respectively. As a result, an extended delay or default inpayment relating to a significant account would likely have a material and adverse effect on the aging schedule and turnover days of our accounts receivable. Ourinability to collect our accounts receivable on a timely basis, if at all, could materially and adversely affect our financial condition, liquidity and results of operations.Risks Related to Doing Business in ChinaAdverse changes in political and economic policies of the PRC government could have a material adverse effect on the overall economic growth of China,which could reduce the demand for our services and materially and adversely affect our competitive position.Substantially all of our business operations are conducted in China. Accordingly, our business, results of operations, financial condition and prospects aresubject to a significant degree to economic, political and legal developments in China. Although the Chinese economy is no longer a planned economy, the PRCgovernment continues to exercise significant control over China’s economic growth through direct allocation of resources, monetary and tax policies, and a host ofother government policies such as those that encourage or restrict investment in certain industries by foreign investors, control the exchange between RMB andforeign currencies, and regulate the growth of the general or specific market. These government involvements have been instrumental in China’s significant growthin the past 30 years. The reorganization of the telecommunications industry encouraged by the PRC government has directly affected our industry and our growthprospect. In response to the recent global and Chinese economic downturn, the PRC government has adopted policy measures aimed at stimulating the economicgrowth in China. If the PRC government’s current or future policies fail to help the Chinese economy achieve further growth or if any aspect of the PRCgovernment’s policies limits the growth of the telecommunications industry in China or our industry or otherwise negatively affects our business, our growth rate orstrategy, our results of operations could be adversely affected as a result. Our business benefits from certain government tax incentives. Expiration, reduction or discontinuation of, or changes to, these incentives will increase our taxburden and reduce our net income.Under the PRC Enterprise Income Tax Law passed in 2007 and the implementing rules, both of which became effective on January 1, 2008, or the New EITLaw, a unified enterprise income tax rate of 25% and unified tax deduction standard is applied equally to both domesticinvested enterprises and foreigninvestedenterprises, or FIEs. Enterprises established prior to March 16, 2007 eligible for preferential tax treatment in accordance with the then tax laws and administrativeregulations shall gradually become subject to the New EIT Law rate over a fiveyear transition period starting from the date of effectiveness of the New EIT Law.However, certain qualifying hightechnology enterprises may still benefit from a preferential tax rate of 15% if they own their core intellectual properties and they areenterprises in certain Statesupported hightech industries to be later specified by the government. As a result, if our PRC subsidiaries qualify as “hightechnologyenterprises,” they will continue to benefit from the preferential tax rate of 15%, subject to transitional rules implemented from January 1, 2008. Our subsidiary, BeijingZhong Chuan Shi Xun Technology Limited, is qualified as a “hightechnology enterprise” until the end of the November 2018, and therefore it had benefited fromthe preferential tax rate of 15%, subject to transitional rules implemented on January 1, 2008. Although we intend to apply for a renewal of this qualification, if BeijingZhong Chuan Shi Xun ceases to qualify as a “hightechnology enterprise”, or the tax authorities change their position on our preferential tax treatments in thefuture, our future tax liabilities may materially increase, which could materially and adversely affect our financial condition and results of operations.10If we were deemed a “resident enterprise” by PRC tax authorities, we could be subject to tax on our global income at the rate of 25% under the New EIT Lawand our nonPRC shareholders could be subject to certain PRC taxes.Under the New EIT Law and the implementing rules, both of which became effective January 1, 2008, an enterprise established outside of the PRC with “defacto management bodies” within the PRC may be considered a PRC “resident enterprise” and will be subject to the enterprise income tax at the rate of 25% on itsglobal income as well as PRC enterprise income tax reporting obligations. The implementing rules of the New EIT Law define “de facto management” as “substantialand overall management and control over the production and operations, personnel, accounting, and properties” of the enterprise. However, as of the date of thistransition report, no final interpretations on the implementation of the “resident enterprise” designation are available. Moreover, any such designation, when madeby PRC tax authorities, will be determined based on the facts and circumstances of individual cases. Therefore, if we were to be considered a “resident enterprise”by the PRC tax authorities, our global income would be taxable under the New EIT Law at the rate of 25% and, to the extent we were to generate a substantial amountof income outside of PRC in the future, we would be subject to additional taxes. In addition, the dividends we pay to our nonPRC enterprise shareholders and gainsderived by such shareholders or ADS or ordinary share holders from the transfer of our shares or ADSs may also be subject to PRC withholding tax at the rate up to10%, if such income were regarded as Chinasourced income.Our holding company structure may limit the payment of dividends.We have no direct business operations, other than our ownership of our subsidiaries. While we have no current intention of paying dividends, should wedecide in the future to do so, as a holding company, our ability to pay dividends and meet other obligations depends upon the receipt of dividends or otherpayments from our operating subsidiaries and other holdings and investments. Current PRC regulations permit our PRC subsidiaries to pay dividends to us only outof their accumulated profits, if any, determined in accordance with Chinese accounting standards and regulations. In addition, each of our subsidiaries in China isrequired to set aside at least 10% of its aftertax profits each year, if any, to fund a statutory reserve until such reserve reaches 50% of its registered capital. Thesereserves are not distributable as cash dividends. Furthermore, if our subsidiaries in China incur debt on their own behalf in the future, the instruments governing thedebt may restrict their ability to pay dividends or make other payments to us. As a result, there may be limitations on the ability of our PRC subsidiaries to paydividends or make other investments or acquisitions that could be beneficial to our business or otherwise fund and conduct our business.In addition, under the New EIT Law and the implementing rules that became effective on January 1, 2008, dividends generated from the business of our PRCsubsidiaries after January 1, 2008 and payable to us may be subject to a withholding tax rate of 10% if the PRC tax authorities subsequently determine that we are anonresident enterprise, unless there is a tax treaty with China that provides for a different withholding arrangement.Uncertainties with respect to the PRC legal system could adversely affect us.We conduct all of our business through our subsidiaries in China. Our operations in China are governed by PRC laws and regulations. Our PRCsubsidiaries are generally subject to laws and regulations applicable to foreign investments in China and, in particular, laws and regulations applicable to whollyforeignowned enterprises. The PRC legal system is based on statutes. Prior court decisions may be cited for reference but have limited precedential value.11Since 1979, PRC legislation and regulations have significantly enhanced the protections afforded to various forms of foreign investments in China.However, China has not developed a fully integrated legal system and recently enacted laws and regulations may not sufficiently cover all aspects of economicactivities in China. In particular, because these laws and regulations are relatively new, and because of the limited volume of published decisions and theirnonbinding nature, the interpretation and enforcement of these laws and regulations involve uncertainties. In addition, the PRC legal system is based in part ongovernment policies and internal rules (some of which are not published on a timely basis or at all) that may have a retroactive effect. As a result, we may not beaware of our violation of these policies and rules until some time after the violation. In addition, any litigation in China may be protracted and result in substantialcosts and diversion of resources and management attention.PRC regulation of loans and direct investment by offshore holding companies to PRC entities may delay or prevent us from using the proceeds of our May2010 public offering to make loans or additional capital contributions to our PRC operating subsidiaries, which could materially and adversely affect ourliquidity and our ability to fund and expand our business.In utilizing the proceeds of our May 2010 public offering as an offshore holding company of our PRC operating subsidiaries, we may make loans to our PRCsubsidiaries, or we may make additional capital contributions to our PRC subsidiaries. Any loans to our PRC subsidiaries are subject to PRC regulations. Forexample, loans by us to our subsidiaries in China, which are FIEs, to finance their activities cannot exceed statutory limits and must be registered with the StateAdministration of Foreign Exchange, or SAFE. On August 29, 2008, SAFE promulgated Circular 142, a notice regulating the conversion by a foreigninvestedcompany of foreign currency into RMB by restricting how the converted RMB may be used. The notice requires that RMB converted from the foreign currencydenominated capital of a foreigninvested company may only be used for purposes within the business scope approved by the applicable governmental authorityand may not be used for equity investments within the PRC unless specifically provided for otherwise. The foreign currencydenominated capital shall be verified byan accounting firm before converting into RMB. In addition, SAFE strengthened its oversight over the flow and use of RMB funds converted from the foreigncurrencydenominated capital of a foreigninvested company. To convert such capital into RMB, the foreigninvested company must report the use of such RMB tothe bank, and the RMB must be used to the reported purposes. According to Circular 142, change of the use of such RMB without approval is prohibited. Inaddition, such RMB may not be used to repay RMB loans if the proceeds of such loans have not yet been used. Violations of Circular 142 may result in severepenalties, including substantial fines as set forth in the Foreign Exchange Administration Rules.We may also decide to finance our subsidiaries by means of capital contributions. These capital contributions may need approval from the PRC Ministry ofCommerce, or MOFCOM, or its local counterpart. We may not be able to obtain these government approvals on a timely basis, if at all, with respect to future capitalcontributions by us to our PRC subsidiaries. If we fail to receive such approvals in such cases when approval is required, our ability to use the proceeds of our May2010 public offering and to capitalize our PRC operations may be negatively affected, which could adversely affect our liquidity and our ability to fund and expandour business.Governmental control of currency conversion may affect the value of your investment.The PRC government imposes controls on the convertibility of the RMB into foreign currencies and, in certain cases, the remittance of currency out ofChina. We receive substantially all of our revenues in RMB. Under our current corporate structure, our income is primarily derived from dividend payments from ourPRC subsidiaries. Shortages in the availability of foreign currency may restrict the ability of our PRC subsidiaries to remit sufficient foreign currency to paydividends or other payments to us, or otherwise satisfy their foreign currency denominated obligations. Under existing PRC foreign exchange regulations, paymentsof current account items, including profit distributions, interest payments and expenditures from traderelated transactions, can be made in foreign currencieswithout prior approval from SAFE by complying with certain procedural requirements. However, approval from appropriate government authorities is required whereRMB is to be converted into foreign currency and remitted out of China to pay capital expenses such as the repayment of loans denominated in foreign currencies.The PRC government may also at its discretion restrict access in the future to foreign currencies for current account transactions. If the foreign exchange controlsystem prevents us from obtaining sufficient foreign currency to satisfy our currency demands, we may not be able to pay dividends in foreign currencies to ourshareholders, including holders of our ADSs or ordinary shares.12Fluctuation in the value of the RMB may have a material adverse effect on the value of your investment.The value of the RMB against the U.S. dollar and other currencies may fluctuate and is affected by, among other things, changes in political and economicconditions. On July 21, 2005, the PRC government changed its decadeold policy of pegging the value of the RMB to the U.S. dollar. Under the new policy, the RMBis permitted to fluctuate within a narrow and managed band against a basket of certain foreign currencies. This change in policy has resulted in an approximate26.8% appreciation of the RMB against the U.S. dollar between July 21, 2005 and September 30, 2015. Provisions on Administration of Foreign Exchange, asamended in August 2008, further changed China’s exchange regime to a managed floating exchange rate regime based on market supply and demand. Since reachinga high against the U.S. dollar in July 2008, however, the RMB has traded within a narrow band against the U.S. dollar, remaining within 1% of its July 2008 high butnever exceeding it. As a consequence, the RMB has fluctuated sharply since July 2008 against other freelytraded currencies, in tandem with the U.S. dollar. InAugust 2015, the PRC Government devalued its currency by approximately 3%, representing the largest yuan depreciation for 20 years. Concerns remain thatChina’s slowing economy, and in particular its exports, will need a stimulus that can only come from further cuts in the exchange rate.It is difficult to predict how long the current situation may continue and when and how it may change again as the People’s Bank of China may regularlyintervene in the foreign exchange market to achieve economic policy goals. Substantially all of our revenues and costs are denominated in the RMB, and asignificant portion of our financial assets are also denominated in RMB. We principally rely on dividends and other distributions paid to us by our subsidiaries inChina. Any significant revaluation of the RMB may materially and adversely affect our cash flows, revenues, earnings and financial position, and the value of, andany dividends payable on, our ADSs or ordinary shares in U.S. dollars. Any fluctuations of the exchange rate between the RMB and the U.S. dollar could also resultin foreign currency translation losses for financial reporting purposes.PRC laws and regulations governing our businesses. If we are found to be in violation of such PRC laws and regulations, we could be subject to sanctions. Inaddition, changes in such PRC laws and regulations may materially and adversely affect our business.There are substantial uncertainties regarding the interpretation and application of PRC laws and regulations, including, but not limited to, the laws andregulations governing our business. These laws and regulations are relatively new and may be subject to change, and their official interpretation and enforcementmay involve substantial uncertainty. The effectiveness of newly enacted laws, regulations or amendments may be delayed, resulting in detrimental reliance byforeign investors. New laws and regulations that affect existing and proposed future businesses may also be applied retroactively.The PRC government has broad discretion in dealing with violations of laws and regulations, including levying fines, revoking business and other licensesand requiring actions necessary for compliance. In particular, licenses and permits issued or granted to us by relevant governmental bodies may be revoked at a latertime by higher regulatory bodies. We cannot predict the effect of the interpretation of existing or new PRC laws or regulations on our businesses. We cannot assureyou that our current ownership and operating structure would not be found in violation of any current or future PRC laws or regulations. As a result, we may besubject to sanctions, including fines, and could be required to restructure our operations or cease to provide certain services. In addition, any litigation in China maybe protracted and result in substantial costs and diversion of resources and management attention. Any of these or similar actions could significantly disrupt ourbusiness operations or restrict us from conducting a substantial portion of our business operations, which could materially and adversely affect our business,financial condition and results of operations.13If we were required to obtain the prior approval of the China Securities Regulatory Commission, or CSRC, of the listing and trading of our ADSs on theNASDAQ Capital Market, we may face regulatory actions or other sanctions from the CSRC or other PRC regulatory agencies.On August 8, 2006, six PRC regulatory agencies, including the Ministry of Commerce, the State Assets Supervision and Administration Commission, theState Administration for Taxation, the State Administration for Industry and Commerce, the CSRC and the SAFE, jointly issued the Regulations on Mergers andAcquisitions of Domestic Enterprises by Foreign Investors, which became effective on September 8, 2006 (the “New M&A Rules”). This regulation, among otherthings, includes provisions that purport to require that an offshore special purpose vehicle formed for the purposes of overseas listing of equity interests in PRCcompanies and controlled directly or indirectly by PRC companies or individuals obtain the approval of the CSRC prior to the listing and trading of such specialpurpose vehicle’s securities on an overseas stock exchange. On September 21, 2006, the CSRC published on its official website procedures regarding its approval ofoverseas listings by special purpose vehicles. The CSRC approval procedures require the filing of a number of documents with the CSRC and it would take severalmonths to complete the approval process, if practicable at all. The application of this new PRC regulation remains unclear with no consensus currently existingamong leading PRC law firms regarding the scope of the applicability of the CSRC approval requirement. Prior to our May 2010 initial public offering, our PRC counsel has advised us that, based on its understanding of the current PRC laws and regulations aswell as the procedures announced on September 21, 2006: (i) Softech was directly incorporated by Topsky as a foreign investment enterprise under PRC law;therefore, there was no acquisition of the equity of a “PRC domestic company” as defined under the New M&A Rules; and (ii) the contractual arrangementsbetween Kingtone Information and Softech were not clearly defined and considered as the transaction which shall be applied to the New M&A Rules. Therefore, wedid not seek prior CSRC approval for our initial public offering.However, if the CSRC required that we obtain its approval prior to the completion of our initial public offering and the listing of our ADSs on the NASDAQCapital Market, we may face regulatory actions or other sanctions from the CSRC or other PRC regulatory agencies. These regulatory agencies may impose fines andpenalties on our operations in the PRC, limit our operating privileges in the PRC, delay or restrict the repatriation of the proceeds from our initial public offering intothe PRC, or take other actions that could have a material adverse effect on our business, financial condition, results of operations, reputation and prospects, as wellas the trading price of our shares.Also, if the CSRC requires that we obtain its approval, we may be unable to obtain a waiver of the CSRC approval requirements if and when procedures areestablished to obtain such a waiver. Any uncertainties and/or negative publicity regarding this CSRC approval requirement could have a material adverse effect onthe trading price of our shares.PRC regulations relating to the establishment of offshore special purpose companies by PRC residents may subject our PRC resident shareholders to penaltiesand limit our ability to inject capital into our PRC subsidiaries, limit our PRC subsidiaries’ ability to distribute profits to us, or otherwise adversely affect us.On October 21, 2005, the SAFE issued the Notice on Issues Relating to the Administration of Foreign Exchange in Fundraising and Reverse InvestmentActivities of Domestic Residents Conducted via Offshore Special Purpose Companies, or Notice 75, which became effective as of November 1, 2005. According toNotice 75, prior registration with the local SAFE branch is required for PRC residents to establish or to control an offshore company for the purposes of financingsuch offshore company with assets or equity interests in an onshore enterprise located in the PRC, or an offshore special purpose company. An amendment toregistration or filing with the local SAFE branch by such PRC resident is also required for the injection of equity interests or assets of an onshore enterprise in theoffshore special purpose company or overseas funds raised by such offshore company, or any other material change involving a change in the capital of theoffshore special purpose company. Moreover, Notice 75 applies retroactively. As a result, PRC residents who have established or acquired control of offshorespecial purpose companies that have made onshore investments in the PRC in the past are required to have completed the relevant registration procedures with thelocal SAFE branch by March 31, 2006. To further clarify the implementation of Notice 75, the SAFE issued Circular 106 on May 29, 2007. Under Circular 106, PRCsubsidiaries of an offshore special purpose company are required to coordinate and supervise the filing of SAFE registrations by the offshore holding company’sshareholders or beneficial owners who are PRC residents in a timely manner.14Some of our current shareholders and/or beneficial owners may fall within the ambit of the SAFE notice and be required to register with the local SAFEbranch as required under the SAFE notice. If so required, and if such shareholders and/or beneficial owners fail to timely register their SAFE registrations pursuantto the SAFE notice, or if future shareholders and/or beneficial owners of our company who are PRC residents fail to comply with the registration procedures setforth in the SAFE notice, this may subject such shareholders, beneficial owners and/or our PRC subsidiaries to fines and legal sanctions and may also limit ourability to contribute additional capital into our PRC subsidiaries, limit our PRC subsidiaries’ ability to distribute dividends to our company, or otherwise adverselyaffect our business.Risks Associated with our ADSs and Ordinary SharesOur securities are not currently traded on any United States public markets and you may not be able to resell your securities for some time.There is currently no public market for our ordinary shares or American Depository Shares (“ADSs”) in the United States or in any other jurisdiction. OurADSs were voluntarily delisted from the NASDAQ Capital Market on September 19, 2018. We have applied to NASDAQ for the listing of our ordinary shares on theNASDAQ Capital Market and received an approval for listing of Ordinary Shares on August 6, 2018, and as of the date of this transition report, that application andapproval are currently under review. We cannot assume that our ordinary shares will be accepted for listing on the NASDAQ Capital Market, or if listed, that wewould continue to meet the applicable minimum listing requriements. You may not be able to sell your ordinary shares quickly or at all if we are unable to gain listingon a public market in the United States.The market price of our ADSs has historically been highly volatile, and you may not be able to resell our ordinary shares at or above your initial purchaseprice.There may be a limited public market for our ordinary shares and, as discussed above, our ADSs are no longer listed on any public market in the UnitedStates or any other jurisdiction. We cannot assure you that there will be an active trading market for our ordinary shares in the future. If our ordinary shares areaccepted for listing on a public market, you may not be able to sell your ordinary shares quickly or at the market price if trading in our ordinary shares is not active. The trading price of our ADSs and ordinary shares may be volatile. The price of our ADSs and ordinary shares could be subject to wide fluctuations inresponse to a variety of factors, including the following:1.Introduction of new products, services or technologies offered by us or our competitors;2.Failure to meet or exceed revenue and financial projections we provide to the public;3.Actual or anticipated variations in quarterly operating results;4.Failure to meet or exceed the estimates and projections of the investment community;5.General market conditions and overall fluctuations in United States equity markets;6.Announcements of significant acquisitions, strategic partnerships, joint ventures or capital commitments by us or our competitors;7.Disputes or other developments relating to proprietary rights, including patents, litigation matters and our ability to obtain patent protection for ourtechnologies;8.Additions or departures of key management personnel;9.Issuances of debt or equity securities;10.Significant lawsuits, including patent or shareholder litigation;11.Changes in the market valuations of similar companies;12.Sales of additional ordinary shares or other securities by us or our shareholders in the future;13.Trading volume of our ordinary shares;14.Fluctuations in the exchange rate between the U.S. dollar and Renminbi;15.Negative market perception and media coverage of our company or other companies in the same or similar industry with us; and16.Other events or factors, many of which are beyond our control.15In addition, the stock market in general, and the NASDAQ Capital Market and software products and services companies in particular, have experiencedextreme price and volume fluctuations that have often been unrelated or disproportionate to the operating performance of these companies. Broad market andindustry factors may negatively affect the market price of our ordinary shares, regardless of our actual operating performance. Our ADSs and ordinary shares may be subject to the SEC’s penny stock rules which may make it difficult for brokerdealers to complete customer transactionsand trading activity in our securities.Our ADSs and ordinary shares may be deemed to be “penny stock” as that term is defined under the Securities Exchange Act of 1934, as amended. Pennystocks generally are equity securities with a price of less than $5.00 (other than securities registered on certain national securities exchanges or quoted on theNASDAQ system, provided that current price and volume information with respect to transactions in such securities is provided by the exchange or system). Pennystock rules impose additional sales practice requirements on brokerdealers who sell to persons other than established customers and “accredited investors.” Theterm “accredited investor” refers generally to institutions with assets in excess of $5,000,000 or individuals with a net worth in excess of $1,000,000 or annual incomeexceeding $200,000 or $300,000 jointly with their spouse in each of the prior two years.The penny stock rules require a brokerdealer, prior to a transaction in a penny stock not otherwise exempt from the rules, to deliver a standardized riskdisclosure document in a form prepared by the SEC, which provides information about penny stocks and the nature and level of risks in the penny stockmarket. Moreover, brokerdealers are required to determine whether an investment in a penny stock is a suitable investment for a prospective investor. A brokerdealer must receive a written agreement to the transaction from the investor setting forth the identity and quantity of the penny stock to be purchased. Theserequirements may make it more difficult for brokerdealers to effectuate customer transactions and trading activity in our securities. As a result, the market price ofour ADSs and ordinary shares may be depressed, and you may find it more difficult to sell our ADSs or ordinary shares.Sales of a substantial number of ordinary shares or ADSs in the public market by our existing shareholders could cause the price of our ADSs to fall.Sales of a substantial number of our ordinary shares or ADSs in the public market or the perception that these sales might occur, could depress the marketprice of our ADSs and could impair our ability to raise capital through the sale of additional equity securities. We are unable to predict the effect that sales may haveon the prevailing market price of our ADSs.All of our existing shareholders prior to our May 2010 offering were subject to lockup agreements with the underwriters of the offering that restricted theshareholders’ ability to transfer ordinary shares or ADSs until expiration of the lockup period in November 2010. The lockup agreements limited the number ofordinary shares or ADSs that may be sold immediately following the public offering. Subject to certain limitations, approximately 1,000,000 of our total outstandingshares are now eligible for sale. Sales of ordinary shares by these shareholders could have a material adverse effect on the trading price of our ADSs.Future sales and issuances of our ordinary shares, or rights to purchase our ordinary shares, including pursuant to our 2010 Omnibus Incentive Plan, couldresult in additional dilution of the percentage ownership of our shareholders and could cause the price of our ordinary shares to fall.We expect that significant additional capital will be needed in the future to continue our planned operations. To the extent we raise additional capital byissuing equity securities, our shareholders may experience substantial dilution. We may sell ordinary shares, convertible securities or other equity securities in oneor more transactions at prices and in a manner we determine from time to time. If we sell ordinary shares, convertible securities or other equity securities in more thanone transaction, investors may be materially diluted by subsequent sales. Such sales may also result in material dilution to our existing shareholders, and newinvestors could gain rights superior to our existing shareholders.16We do not intend to pay dividends on our ordinary shares, so any returns will be limited to the value of our ADSs and ordinary shares.We have never declared or paid any cash dividend on our ordinary shares. We currently anticipate that we will retain future earnings for the development,operation and expansion of our business and do not anticipate declaring or paying any cash dividends for the foreseeable future. Any return shareholders willtherefore be limited to the value of their ADSs or ordinary shares.As the rights of shareholders under British Virgin Islands law differ from those under U.S. law, you may have fewer protections as a shareholder.Our corporate affairs will be governed by our memorandum of association and articles of association, the BVI Business Companies Act, 2004, or the BVIAct, of the British Virgin Islands and the common law of the British Virgin Islands. The rights of shareholders to take legal action against our directors, actions byminority shareholders and the fiduciary responsibilities of our directors under British Virgin Islands law are to a large extent governed by the BVI Act and thecommon law of the British Virgin Islands. The common law of the British Virgin Islands is derived in part from comparatively limited judicial precedent in the BritishVirgin Islands as well as from English common law, which has persuasive, but not binding, authority on a court in the British Virgin Islands. The rights of ourshareholders and the fiduciary responsibilities of our directors under British Virgin Islands law are not as clearly established as they would be under statutes orjudicial precedents in some jurisdictions in the United States. In particular, the British Virgin Islands has a less developed body of securities laws as compared to theUnited States, and some states (such as Delaware) have more fully developed and judicially interpreted bodies of corporate law.As a result of all of the above, holders of our ADSs and ordinary shares may have more difficulty in protecting their interests through actions against ourmanagement, directors or major shareholders than they would as shareholders of a U.S. company.British Virgin Islands companies may not be able to initiate shareholder derivative actions, thereby depriving shareholders of the ability to protect theirinterests.British Virgin Islands companies may not have standing to initiate a shareholder derivative action in a federal court of the United States. The circumstancesin which any such action may be brought, and the procedures and defenses that may be available in respect to any such action, may result in the rights ofshareholders of a British Virgin Islands company being more limited than those of shareholders of a company organized in the United States. Accordingly,shareholders may have fewer alternatives available to them if they believe that corporate wrongdoing has occurred. The British Virgin Islands courts are alsounlikely to recognize or enforce against us judgments of courts in the United States based on certain liability provisions of U.S. securities law; and to imposeliabilities against us, in original actions brought in the British Virgin Islands, based on certain liability provisions of U.S. securities laws that are penal in nature.There is no statutory recognition in the British Virgin Islands of judgments obtained in the United States, although the courts of the British Virgin Islands willgenerally recognize and enforce the nonpenal judgment of a foreign court of competent jurisdiction without retrial on the merits.The laws of the British Virgin Islands provide little protection for minority shareholders, so minority shareholders will have little or no recourse if theshareholders are dissatisfied with the conduct of our affairs.Under the law of the British Virgin Islands, there is little statutory law for the protection of minority shareholders other than the provisions of the BVI Actdealing with shareholder remedies. The principal protection under statutory law is that shareholders may bring an action to enforce the constituent documents ofthe corporation, our memorandum of association and articles of association. Shareholders are entitled to have the affairs of the company conducted in accordancewith the general law and the memorandum of association and articles of association.17There are common law rights for the protection of shareholders that may be invoked, largely dependent on English company law, since the common law ofthe British Virgin Islands is limited. Under the general rule pursuant to English company law known as the rule in Foss v. Harbottle, a court will generally refuse tointerfere with the management of a company at the insistence of a minority of its shareholders who express dissatisfaction with the conduct of the company’s affairsby the majority or the board of directors. However, every shareholder is entitled to have the affairs of the company conducted properly according to law and thecompany’s constituent documents. As such, if those who control the company have persistently disregarded the requirements of company law or the provisions ofthe company’s memorandum of association and articles of association, then the courts will grant relief. Generally, the areas in which the courts will intervene are thefollowing: (1) an act complained of which is outside the scope of the authorized business or is illegal or not capable of ratification by the majority; (2) acts thatconstitute fraud on the minority where the wrongdoers control the company; (3) acts that infringe on the personal rights of the shareholders, such as the right tovote; and (4) where the company has not complied with provisions requiring approval of a majority of shareholders, which are more limited than the rights affordedminority shareholders under the laws of many states in the United States.Antitakeover provisions in our memorandum of association and articles of association and our right to issue preference shares could make a thirdpartyacquisition of us difficult.Some provisions of our memorandum of association and articles of association may discourage, delay or prevent a change in control of our company ormanagement that shareholders may consider favorable, including provisions that authorize our board of directors to issue preference shares in one or more seriesand to designate the price, rights, preferences, privileges and restrictions of such preference shares.If you hold our ADSs, you may not have the same voting rights as the holders of our ordinary shares and must act through the depositary to exercise your rights.Holders of our ADSs will not be able to exercise voting rights attaching to the shares evidenced by our ADSs on an individual basis. Holders of our ADSswill appoint the depositary or its nominee as their representative to exercise the voting rights attaching to the shares represented by the ADSs. You may not receivevoting materials in time to instruct the depositary to vote, and it is possible that you, or persons who hold their ADSs through brokers, dealers or other third parties,will not have the opportunity to exercise a right to vote. Upon our written request, the depositary will mail to you a shareholder meeting notice which contains,among other things, a statement as to the manner in which your voting instructions may be given, including an express indication that such instructions may begiven or deemed given to the depositary to give a discretionary proxy to a person designated by us if no instructions are received by the depositary from you on orbefore the response date established by the depositary. However, no voting instruction shall be deemed given and no such discretionary proxy shall be given withrespect to any matter as to which we inform the depositary that (i) we do not wish such proxy given, (ii) substantial opposition exists, or (iii) such matter materiallyand adversely affects the rights of shareholders. We will make all reasonable efforts to cause the depositary to extend voting rights to you in a timely manner, butyou may not receive the voting materials in time to ensure that you can instruct the depositary to vote your ADSs. Furthermore, the depositary and its agents willnot be responsible for any failure to carry out any instructions to vote, for the manner in which any vote is cast or for the effect of any such vote. As a result, youmay not be able to exercise your right to vote and you may lack recourse if your ADSs are not voted as you requested. In addition, in your capacity as an ADSholder, you will not be able to call a shareholders’ meeting.You may not be able to participate in rights offerings and may experience dilution of your holdings as a result.We may from time to time distribute rights to our shareholders, including rights to acquire our securities. However, we may not, and under the depositagreement for the ADSs, the depositary will not, offer those rights to ADS holders unless both the rights and the underlying securities to be distributed to ADSholders are registered under the Securities Act, or the distribution of them to ADS holders is exempted from registration under the Securities Act with respect to allholders of ADSs. We are under no obligation to file a registration statement with respect to any such rights or underlying securities or to endeavor to cause such aregistration statement to be declared effective. In addition, we may not be able to rely on an exemption from registration under the Securities Act to distribute suchrights and securities. Accordingly, holders of our ADSs may be unable to participate in our rights offerings and may experience dilution in their holdings as a result.You may be subject to limitations on transfer of your ADSs.Your ADSs are transferable on the books of the depositary. However, the depositary may close its transfer books at any time or from time to time when itdeems expedient in connection with the performance of its duties. In addition, the depositary may refuse to deliver, transfer or register transfers of ADSs generallywhen our books or the books of the depositary are closed, or at any time if we or the depositary deem it advisable to do so because of any requirement of law or ofany government or governmental body, or under any provision of the deposit agreement, or for any other reason.18We may be a passive foreign investment company, of PFIC, which could lead to additional taxes for U.S. holders of our ADSs or ordinary shares.We do not expect to be, for U.S. federal income tax purposes, a passive foreign investment company, or a PFIC, which is a foreign company for which, inany given taxable year, either at least 75% of its gross income is passive income, or investment income in general, or at least 50% of its assets produce or are held toproduce passive income, for the current taxable year, and we expect to operate in such a manner so as not to become a PFIC for any future taxable year. However,because the determination of PFIC status for any taxable year cannot be made until after the close of such year and requires extensive factual investigation,including ascertaining the fair market value of our assets on a quarterly basis and determining whether each item of gross income that we earn is passive income, wecannot assure you that we will not become a PFIC for the current taxable year or any future taxable year. If we are or become a PFIC, a U.S. holder of our ADSs orordinary shares could be subject to additional U.S. federal income taxes on gain recognized with respect to the ADSs or ordinary shares and on certain distributions,plus an interest charge on certain taxes treated as having been deferred under the PFIC rules. Noncorporate U.S. holders will not be eligible for reduced rates oftaxation on any dividends received from us if we are a PFIC in the taxable year in which such dividends are paid or in the preceding taxable year.If our ordinary shares are listed on the NASDAQ Capital Market and the trading price of our ordinary shares fails to comply with the continued listingrequirements of the NASDAQ Capital Market, we would face possible delisting, which would result in a limited public market for our ordinary shares andmake obtaining future debt or equity financing more difficult for us.Companies listed on NASDAQ are subject to delisting for, among other things, failure to maintain a minimum closing bid price of $1.00 per share for 30consecutive business days. On December 19, 2011, we received a letter from NASDAQ indicating that for the last 30 consecutive business days, the closing bidprice of our ADSs fell below the minimum $1.00 per share requirement pursuant to NASDAQ Listing Rule 5550(a)(2) for continued listing on the NASDAQ CapitalMarket. We regained compliance with the minimum bid price requirement for continued listing set forth in NASDAQ Listing Rule 5550(a)(2), as its ADS with itsunderlying ordinary share has achieved a closing bid price of $1.00 or greater for the 10 consecutive business days from November 6 to November 23, 2012 byimplementing a 1for10 combination, or reverse split of the ordinary shares effective November 6, 2012. When listed, we cannot be sure that the price of our ordinaryshares will comply with this requirement for continued listing on the NASDAQ Capital Market in the future. If we were not able to do so, our ordinary shares wouldbe subject to delisting and would likely trade on the overthecounter market. If our ordinary shares were to trade on the overthecounter market, selling ourordinary shares could be more difficult because smaller quantities of shares would likely be bought and sold, transactions could be delayed, and security analysts’coverage of us may be reduced. In addition, brokerdealers have certain regulatory burdens imposed upon them, which may discourage brokerdealers from effectingtransactions in our ordinary shares, further limiting the liquidity of our ordinary shares. As a result, the market price of our ordinary may be depressed, and you mayfind it more difficult to sell our ordinary shares. Such delisting from the NASDAQ Capital Market and continued or further declines in our share price could alsogreatly impair our ability to raise additional necessary capital through equity or debt financing.ITEM 4. INFORMATION ON THE COMPANY.A . HISTORY AND DEVELOPMENT OF THE COMPANY.OverviewWe are a holding company and conduct our operations through our whollyowned subsidiary named LK Technology Ltd., a British Virgin Islands limitedliability company (“LK Technology”), and its whollyowned subsidiaries, MMB Limited and Mobile Media (China) Limited and their respective subsidiaries, whichhold the rights to deploy WiFi systems on about 700 trains in China, including 290 trains in which WiFi systems have already been installed and are in operation. InMay 2010, we consummated an initial public offering of our American Depository Shares, or ADSs, for gross proceeds of $16 million, and our ADSs were listed onthe NASDAQ Capital Market under the ticker symbol “KONE”. Our ordinary shares are not currently listed on any trading market. Our American Depository Shares(“ADSs”) were voluntarily delisted from the NASDAQ Capital Market on September 19, 2018. We have applied to NASDAQ for the listing of our ordinary shares onthe NASDAQ Capital Market and received an approval for listing of Ordinary Shares on August 6, 2018, and as of the date of this transition report, that applicationand approval are currently under review.19On August 17, 2018, we consummated an asset exchange transaction, pursuant to which we exchanged all issued and outstanding capital stock in TopskyInfoTech Holdings Pte Ltd., the parent of Softech, for the issued and outstanding capital stock of LK Technology (the “Asset Exchange”). In connection with theAsset Exchange, we changed our name on August 20, 2018, and on September 20, 2018, issued to the shareholders of C Media Limited, the former parent of LKTechnology, (i) 185,412,599 of our ordinary shares, par value $0.01 per share and (ii) 1,000,000 of our preferred shares. Upon the consummation of the AssetExchange, we ceased our previous business operations and became a company focused on the provision of WiFi and mobile application products for long distancerail travelers in China.On August 25, 2018, LK Technology entered into a Stock Purchase Agreement (the “Agreement”) with the shareholders (“Shareholders”) of SuperengineHoldings Limited, a limited liability company organized under the laws of the British Virgin Islands (the “Superengine”), pursuant to which LK Technology acquiredall of the issued and outstanding capital stock of Superengine for an aggregate purchase price of US$60 million (the “Purchase Price”), which are paid by theissuance of our Ordinary Shares in an amount equal to the quotient of (x) the Purchase Price divided by (y) the average of the closing prices of the Ordinary Shareson the NASDAQ Capital Market over the 12 months period preceding July 31, 2018. We are a party to the Agreement in connection with the issuance of theOrdinary Shares and certain other limited purposes.Corporate InformationOur principal executive offices are located at LAB32, SOHO 3Q, No 9, Guanghua Road, Chaoyang District, Beijing, People’s Republic of China 100020. Ourwebsite is www.luokung.com. We routinely post important information on our website. The information contained on our website is not a part of this transitionreport.Our agent for service of process in the United States is Worldwide Stock Transfer, LLC, the current transfer agent of the Company, with a mailing address ofOne University Plaza, Suite 505, Hackensack, New Jersey 07601.B. BUSINESS OVERVIEW.We are a Chinabased provider of rail WiFi and mobile application products for long distance travelers in China. Our primary mobile application, theLuoKuang platform, consists of the LuoKuang mobile applications, a series of supporting software at the server end, and railWiFi hardware and equipment on thetrains that we serve. The LuoKuang platform incorporates technology covered by 22 patents and about 34 software copy rights, and serves as a content and servicedistribution platform that is tailored for particular travel stages featuring geographic location and social interaction. The content and services distributed byLuoKuang contain information, entertainment, travel, ecommerce, online to offline (“O2O”), advertisement and marketing features.LuoKuang mainly provides personalized and precise services to long distance travelers in two locations: on the train and at the destination. Based on thetravel environment, the core elements of our users’ needs include staving off boredom on trains and discovering and exploring new locations upon arrival. The mainservices contain entertainment services (videos and audio, digital readings, games specific and tailored to the travel stage) and social services (satisfying thedemand for value discovery of unfamiliar destinations through social interaction among strangers based on locations). As of December 31, 2017, the LuoKuangplatform featured about 38 million users.The setting services on the train focus on providing entertainment content for passengers to pass time during longdistance travel in closed environments.For example, we provide access to long video formats such as movies and TV shows, short videos, music, digital readings and games.20We use the most valuable WiFi location—the train WiFi setting—as the entrance of our LuoKuang platform and mobile applications. Passengers typicallyride trains for longdistance and interprovincial travel purposes. The long periods of monotonous journeys and the cost concerns for roaming traffic fees enable thecombination of entertainment content service needs and WiFi access needs. Our railWiFi becomes a valuable and sophisticated WiFi service in this setting—notjust WiFi connection service, but a provider of sophisticated services through a WiFi connection. In addition, the annual traffic of 800,000 passengers onboardeach train makes rail WiFi a huge entry point for mobile applications. We do not define ourselves as a train WiFi communication service operator but as a longdistance travel mobile service provider. We provide users with free WiFi access so that users are able to connect to the LuoKuang platform and thus access relatedentertainment services, services on the train and destination services. The rail WiFi is our access point to a significant pool of users and the entrance to acquiringadditional users.The setting services focus on providing targeted push services to users while travelling in unfamiliar cities. Information and service guidance are preciselypushed to appeal to the interests and tastes (eating, drinking, shopping, touring and culture) of individual users (cuisine specialties and local snacks, local events,viewing sights, culture, history, stories). The service guidance is generated, shared and distributed by individual users (travelers, local residents, local businesses)interacting with current locations and featuring users who generated contents from selfmedia and small and medium vertical contents providers).Based on the GIS (geoinformation system), Superengine is a provider of big spatialtemporal data, network graphic image technology and relevant service.Its super engine series includes computer graphic image engines and spatial database engines. Spatialtemporal cloud index is the core of the company’s spatialtemporal data engines. It is equivalent to the neural network of the big data and the Internet. It extends the value of its products and platform to its data serviceproviders. In cooperation, its service providers can be divided into three categories, namely, basic geographic data providers, industrial data providers andbehavioral data providers). Superengine’s industriesoriented spatialtemporal data engine was launched in 2016. The spatialtemporal GIS platform has been appliedin industries such as aerospace, power grid, surveying & mapping, agriculture, cultural relic preservation, water conservancy, public security, railway section, smartcities, and business location selection.Our primary sources of revenue are advertising and marketing promotion revenues.Our Industry — Mobile Internet IndustryOur products and services are engaged in the mobile internet industry. Our main services consist of entertainment services (videos, audio, digital readings,games that are tailormade for passengers on train) and other services including satisfying the demand for value discovery of unfamiliar destinations through socialinteractions among strangers based in such locations). The mobile internet industry in China is rapidly growing and is likely to be in a longterm growth trend.According to the Mobile Internet Blue Book of China Mobile Internet Report, in 2017 the market size of China mobile internet reached RMB 605 billion. Now China isin a leading position in terms of smartphone, mobile communication network and mobile application services. The pool of users is anticipated to keep expandingthrough the promotion and popularization of smartphones and the expansion of the mobile internet market.Video is the leading online entertainment format in China. According to the iResearch Report, over 80% of total time spent by users on online entertainmentin China in 2016 was internet video. Online entertainment, especially internet video, is attractive to Chinese users due to many favorable factors, including easyaccessibility, wide content selection, and innovative platforms with social features.For 2017, the transaction volume of China mobile ecommerce market reached to over RMB 4 trillion according to the China Mobile Ecommerce IndustryResearch Report from iResearch, representing an increase of 19.1%. For the next few years, China mobile online shopping will likely maintain steady growth. Thefocal point of competition in China mobile ecommerce market has shifted from infrastructure service providers to integrated and accurate services providers.Drawing in users with compelling content in diversified scenes has become a trend.21The revenue for China mobile gaming industry reached RMB 144.58 billion for the year of 2017, according to the China Mobile Game Industry ResearchReport from iResearch. With increased investment by largescale enterprises in the sector of mobile games and the strict enforcement of the mobile game industryrelated regulatory policy guidelines, the mobile game market as a whole will become more organized and standardized.According to the Annual Analysis of China Mobile Reading Industry from Analysis, for the year of 2017, the mobile reading market in China reached toRMB 14.04 billion. By the end of 2016, the size of China mobile's reading market reached RMB 11.86 billion, showing an increase of 18.38% in 2017.The closed and boring environment for passengers of longdistance travel and high roaming charges lead to a strong demand to use our rail WiFi services.Passengers, through their own mobile phone, have access to the free WiFi network in each carriage, access to our rich mobile internet entertainment content andtravel services. According to the annual statistical bulletin of China Railway Corporation in 2017, there were about 6,030 trains in operation in China in 2017,consisting of 2,935 high speed trains and 3,095 express trains. The rail WiFi system that we have installed are currently all on express trains. The market value will bemultiplied several times following the extended coverage of service on other trains.Our StrengthsWe believe the following strengths differentiate us from our competitors:Our strategy is to build up personalized and targeted service products for travelers through rail WiFi networks, enabling our services to evolve into a coredriving distribution platform that provides content, news, games, ecommerce, OTO service, travel services and advertising and marketing. In comparison, ourcompetitors offer simple forms of media services on trains. We focus on personalized and targeted matching between users on long distance trips and services. Ourcompetitors focus on operating and generating internet traffic.We possess a complete set of technology system including network, client end and service and operation platform. We have patent protections for WiFiequipment on trains. Our technology strengths are briefly summarized below.WiFi EquipmentPatent protected. Supports WiFi/3G/4G telecom modules; 4 core CPU with X86 architecture, and SSD hard disk with big storage for localcontents.InfrastructureThe technology infrastructures include the application program system, big data gathering and processing systems, intelligence cloudsservice deployment structure systems and our WiFi hardware server deployment structure system. The operation center, big data center,contents center and railWiFi server system are built on this infrastructure. On the above layer, the equipment management platform,account and payment platform, contents management platform and advertisement distribution platform are set up for daily managementpurpose.LuoKuang strengthens the connection of services among people, setting and locations. In catering to people on the move, we anticipate strengthening therelationship between users and their locations in a given moment. Currently, LuoKuang provides the link between users and thirdparty service providers andprovides value added services to both users and thirdparty service providers. The connection is not simply a traffic diversion, but also the direct presentation ofrelevant services in the LuoKuang platform. The open API interface and independent product software package allows easy access by service providers anddevelopers and supports data service, advertisement operations, billing, users promotion and product marketing services. As an API product, LuoKuang does notcreate content or services. The content and services are provided by our partners in the LuoKuang platform. Now, the majority of top mobile internet content andservices providers in China have a presence in the Luokuang platform. Those include, but are not limited to, Toutiao, Wangyi News, iqiyi, Letv, YoudianCinema(Hollywood films), Sohu video, Phoenix Video, Kugou Music, FM Qingting, iReader, Baidu Literature, Phoenix Novel, Baidu Game, Meituan, Dianping, andsimilar content providers.22Our StrategyLuoKuang is positioned to provide API interface services and geographic information social services. The API interface services are provided within thetypical BC model. LuoKuang pushes the content and services from thirdparty service providers to users. The local businesses, service practitioners, residents, andforeign travelers are all defined as a “user” and may participate in social interactions based on local value information and generate UGC content. The socalled localvalue information is defined as information, views, evaluations, experiences and experience sharing related to the local cultural scene, native products,entertainment, food, tourism and activities.The LuoKuang user growth strategy is to have access to users through the travelers’ use of mobile devices in connection with longdistance train travel.Through deploying WiFi systems on trains and providing free WiFi access to passengers, LuoKuang is able to have consistent access to longdistance travelers.The WiFi system on the train has become a powerful user portal at the early stage of LuoKuang and has gained substantial user traffic. We are in a leading positionin terms of numbers of trains contracted and trains in operation with our free WiFi system. We have contracted with about 700 trains, which cover almost 560 millionannual passenger trips. As of the date of this report, approximately 290 trains are operating our rail WiFi system. We will continue to install our rail WiFi system inthe following years.The development strategy for LuoKuang encompasses the following:1.Enhance our local cycle service (a recommendation service system based on the location of travelers after their arrival, recommendations includingtourist attractions, local specialties and other items of interest), strengthen services for arrivals in the form of social interaction and focus on the valueof relationships between users and their current locations.2.Focus on the development of geographic positioning technology. Get the business of local cycle and users on train mixed together. We will put oureffort to maximize the synergy effect.3.Big Data: Behavior data about passenger trips is obtained via the traffic entrance of rail WiFi and these data will help to optimize our product.4.While enhancing setting service experiences and optimizing entertainment experiences, we will enrich ecommerce services on trains featuringrecommendations of customized products and ecommerce shopping guidance of products labeled with specific geographic location (and trafficdiversion).5.Focus on API positioning and attract more premium vertical service providers (contents and services).Intellectual PropertyWe have registered the following software copyrights, patents and trademarks for our business operations. We believe this intellectual property forms anintegral part of our competitive strength.23Patents:We have been granted some inventions by the State Intellectual Property Office of PRC. We possess a complete set of technology system includingnetwork, client end and service and operation platform. We have patent protections for WiFi equipment on trains. We have received the following patents:No.Name of patentTypeRegistrationNumberDate of Insurance1.Wireless communication multimedia chip business consumer informationacquisition terminal deviceInventionZL 2010 2 0528767.9Sep 21, 20112.A user behavior processing method and device for intelligent terminalInventionZL 2013 1 0301728.3May 27, 20153.A global positioning system terminal deviceInventionZL 2010 2 0253452.8Nov 7, 20114.A wireless multimedia serverInventionZL 2013 2 0220183.9Nov 13, 20135.Ordering system of passengers on trainInventionZL 2015 2 0095381.6Aug 5, 20156.A wireless multimedia serverInventionZL 2015 2 0201382.4Oct 28, 20157.An antenna structureInventionZL 2016 2 0424352.4Mar 1, 20178.Spatial data progressive transmission method and deviceInvention201010617383.9Jun 15, 20169.Methods and devices for conflict detection and avoidance of spatial entity elementlabelingInvention201010617385.8Mar 26, 201410.Spatial data processing method and deviceInvention201010617399.XJun 26, 201311.Method and device of spatial data simplificationInvention201010617400.9Mar 13, 201312.Method and device for judging the occlusion type of space entityInvention201010617403.2Sep 25, 201313.A method and device for distributed mapping of 3d model dataInvention201110274924.7Mar 26, 201414.Data simplification of 3d model, gradual transmission method and deviceInvention201110275336.5Mar 25, 201515.Spatial data transmission method and deviceInvention201110306393.5Dec 13, 201416.Methods and devices for spatial data processing, simplification and progressivetransmissionInvention201210104250.0Jun 10, 201517.Spatial data progressive transmission method and deviceInvention201310367021.2Jun 23, 201718.Simplification method and device of spatial dataInvention201310367128.7Sep 22, 201719.The method and device to accelerate transmission and display of graphic dataacross platformsInvention201210116149.7Aug 10, 201620.Methods and devices related to spatial data compression, decompression andprogressive transmissionInvention201310136682.4Nov 10, 2017We also have two patents outside of China.No.Name of patentCountryNationalRegistrationNumberDate ofInsurance1.Spatial data processing method and deviceJapan2012547439Jun 20, 20142.Methods and devices related to spatial data compression, decompression andprogressive transmissionU.S.A14/394,610Sep 5, 201724Software Copyrights:We have received the following software copyrights from the National Copyright Administration (“NCA”) of PRC:No.Name of CopyrightAchievement approachRegistration numberTime of obtainExpire time1.WAP PUSH Business operation platformsystemIndependent research anddevelopment2007SRBJ1464Jul 23, 200750 years2.TDSCDMA Streaming media businessmanagement platform software V1.0Independent research anddevelopment2009SRBJ0412Jan 22, 200950 years3.Content management platform systemsoftware V1.0Independent research anddevelopment2009SRBJ1374Apr 1, 200950 years4.Mobile multimedia broadcast electronicservice guide system software V1.0Independent research anddevelopment2009SRBJ1365Apr 1, 200950 years5.Mobile video business operation platformsystem V1.0Independent research anddevelopment2007SRBJ1463Jul 23, 200750 years6.Mobile multimedia broadcast emergencybroadcast platform software V1.0Independent research anddevelopment2010SRBJ0720Mar 5, 201050 years7.Mobile multimedia broadcast audio richmedia interactive platform softwareV1.0Independent research anddevelopment2010SRBJ0719Mar 5, 201050 years8.Printer typesetting and printing softwareV1.0Independent research anddevelopment2011SRBJ4190Sep 28, 201150 years9.Electronic newspaper business supportplatform software V1.0Independent research anddevelopment2011SRBJ4186Sep 28, 201150 years10.Public information business platformsoftware V1.0Independent research anddevelopment2011SRBJ3810Sep 27, 201150 years11.User interface scripting software V1.0Independent research anddevelopment2011SRBJ3809Sep 27, 201150 years12.Integrated business management platformsoftware V1.0Independent research anddevelopment2012SR003002Jan 16, 201250 years13.Interactive business development platformsoftwareIndependent research anddevelopment2011SRBJ4593Nov 29, 201150 years14.Instant messaging and messaging systemsoftwareIndependent research anddevelopment2014SR122231Aug 5, 201450 years15.General statistical platform software forclient productsIndependent research anddevelopment2014SR216662Dec 30, 201450 years16.CMMB Data broadcast managementplatform softwareIndependent research anddevelopment2009SRBJ0391Jan 22, 200950 years17.Integrated passenger train service systemIndependent research anddevelopment2012SR083665Sep 5, 201250 years25No.Name of CopyrightAchievement approachRegistration numberTime of obtainExpire time18.JHBY Train inspection managementsystemIndependent research anddevelopment2013SR015105Feb 21, 201350 years19.Integrated information engine platformsoftware V1.0Independent research anddevelopment2014SR040347Nov 30, 200150 years20.Super information engine developmentplatform software V5.0Independent research anddevelopment2014SR036792Mar 5, 200350 years21.Core map super network informationengine platform software V1.0Independent research anddevelopment2014SR036772Sep 15, 200750 years22.Integrated management of the grid gissoftware V1.0Independent research anddevelopment2014SR036808Jun 20, 200850 years23.Core map rural power grid equipment GPSpatrol system software V1.0Independent research anddevelopment2014SR036810Dec 10, 200850 years24.Diagram grid patrol PDA system softwareV1.0Independent research anddevelopment2014SR036778Dec 12, 200850 years25.Core map geographic information enginedesktop platform software V1.0Independent research anddevelopment2014SR036614Jan 15, 200950 years26.Integrated management of the gridgeographic information Web systemsoftware V1.0Independent research anddevelopment2014SR036799Mar 10, 200950 years27.Core map railway power supply equipmentGPS patrol system software V1.0Independent research anddevelopment2014SR036783Mar 25, 201050 years28.Core map network 3 d map server softwareV1.0Independent research anddevelopment2014SR036788Feb 20, 201150 years29.Core map network 3d map clientsoftwareV1.0Independent research anddevelopment2014SR036637Feb 22, 201150 years30.Core map 3d map network publishingplatform software V1.0Independent research anddevelopment2014SR036633Mar 10, 201150 years31.Core map 3d map network release pluginsystem software V1.0Independent research anddevelopment2014SR036622Mar 15, 201150 years32.Core map network 3d map smartphoneplatform software V1.0Independent research anddevelopment2014SR036638Apr 28, 201150 years33.Core map network GIS Shared mobileplatform software V1.0Independent research anddevelopment2014SR036634Oct 31, 201150 years34.Core map network GIS sharing platformsoftware V1.0Independent research anddevelopment2014SR036639Dec 16, 201150 yearsTrademarks:We have registered the following trademarks with the Trademark Office, State Administration for Industry and Commerce in the PRC:NoTrademarkClassification NumberValid PeriodRegistration Number1Y图形382010.04.212020.04.2067460692Y图形412010.09.072020.09.0667460673YRADIO文字352010.07.212020.07.2067334374YRADIO文字382010.04.21.2020.04.2067334385YRADIO文字412010.09.072020.09.0667334396LookLook图形382009.04.072019.04.0646660517LookLook图形422008.12.212018.12.2046660508YTV文字352010.07.212020.07.2067335799YTV文字382010.05.282020.05.27673357810YTV文字412010.09.072020.09.06673358111YTV文字422010.09.072020.09.06673358012YOUTV文字352010.07.212020.07.20673344013YOUTV文字382010.05.282020.05.27673344114xfeng文字352012.03.282022.03.27922914526NoTrademarkClassification NumberValid PeriodRegistration 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NumberValid PeriodRegistration Number58箩筐图形382016.06.142026.06.131658022959箩筐图形352016.06.142026.06.131658023060箩筐图形92016.06.142026.06.131658023161微时光文字422016.09.282026.09.271658024762传游录屏文字92016.06.142026.06.131678214463传游录屏文字352016.06.142026.06.131678214364传游录屏文字382016.06.142026.06.131678214265传游录屏文字412016.06.142026.06.131678214166传游录屏文字422016.06.142026.06.131678214067录游器文字92016.06.142026.06.131678213568录游器文字352016.06.142026.06.131678213669录游器文字382016.06.142026.06.131678213770录游器文字412016.06.142026.06.131678213871录游器文字422016.06.142026.06.131678213972畅联TV文字412016.01.212026.01.201579246773畅联TV文字382016.01.212026.01.201579246874SuperEngine92016.01.212026.01.20812572275SuperEngine422016.01.212026.01.20812572876超擎9/422016.01.212026.01.201647320577SUPERENGINE9/422016.01.212026.01.2016473185*See below for an explanation of each classification number used in the table above.Classification No. 9: data processing apparatus, couplers (data processing equipment), computer software (recorded), monitors (computer programs), smartcards (integrated circuit cards), electrodynamic apparatus for the remote control of signals, alarms, and electric installations for the remote control of industrialoperations.Classification No. 35: auctioneering, sales promotion for others, marketing analysis, marketing research, importexport agencies, advisory services forbusiness management, business management for franchise, personnel management consultancy, relocation services for businesses, and systemization ofinformation into computer databases.Classification No. 38: Include services that enable at least sensory communication between two people. Such services include that allow one person to talkto another, send messages from one person to another, Make verbal or visual contact between one person and the other. This classification especially include theservice for broadcasting radio or television programs. Except for radio advertising services and telemarketing services.Classification No. 41: instruction services, teaching, education information, tuition, arranging and conducting of colloquiums, publication of electronicbooks and journals online, amusements, and vocational guidance.Classification No. 42: technical research, studies (technical project), computer software design, updating of computer software, recovery of computer data,computer systems analysis, installation of computer software, computer antivirus protection, and research and development for others. 28Business Certificates and QualificationsWe have obtained all necessary regulatory certifications to conduct our business in the PRC, including without limitation, the following: SoftwareEnterprise Recognition Certificate, Computer Information System Integration Qualification Certificate, Construction Enterprise Qualification Certificate, and SecurityTechnology & Protection Enterprise Certificate. We have also been properly certified as a hightech enterprise and have met the ISO 9001:2000 qualificationmanagement system.Legal ProceedingsAlthough we may, from time to time, be involved in litigation and claims arising out of our operations in the normal course of business, we do not believethat we are a party to any litigation that will have a material adverse impact on our financial condition or results of operations. To our knowledge, other than asdescribed below there are no material legal proceedings threatened against us. From time to time, we may be subject to various claims and legal actions arising in theordinary course of business. Following the consummation of the AEA, we became successor in interest to the legal proceedings described below.Litigation with Shanghai Fusheng Weier Intelligent Control Technology Co., Ltd.On January 22, 2016, Zhong Chuan Rui You and Shanghai Fusheng Weier Intelligent Control Technology Co., Ltd. (“Fusheng Weier”) signed a contract forequipment of $1,652,842 (RMB10,800,000). Since Zhong Chuan Rui You did not make the payments of $1,126,381 (RMB7,360,000) on the due dates, Fusheng Weierfiled a lawsuit against Zhong Chuan Rui You in Shanghai Xuhui District People's Court on October 8, 2016. On March 9, 2017, Xuhui District People's Court issuedthe verdict requiring Zhong Chuan Rui You to pay the overdue debts. In August 2017, C Media Limited made the payment of $512,075 (RMB3,346,000). Theremaining balance has been accrued in accounts payable. The payment schedule for the remaining balance is being negotiated by the two parties. On February 5,2018, a hearing was held adding Zhong Chuan Shi Xun as a defendant. The Group plans to settle the remaining balance within one year.Lawsuit with Gansu Jinlun Culture Media Co., Ltd.On August 22, 2014, Zhong Chuan Rui You and Gansu Jinlun Culture Media Co., Ltd. (“Gansu Jinlun”) signed a “Lanzhou Railway Bureau AirconditionedTrain WiFi Network System Advertising Operation Rights Agreement” for advertising on 72 trains of $1,467,880 (RMB9,604,633). Due to the dispute on theproject implementation, Zhong Chuan Rui You did not pay the advertising fee. On August 23, 2017, Gansu Jinlun filed a lawsuit with Gansu Intermediate People'sCourt. On December 19, 2017, Gansu Intermediate People's Court issued a verdict, ruling that Zhong Chuan Rui You settle the overdue advertising fee. Since only 18out of 72 trains have been installed with Wifi network system, Zhong Chuan Rui You disputed and appealed to the verdict. The next court trial date has not yet beendetermined.C Media and Gansu Jinlun are negotiating a potential settlement to resume the contract. According to the legal counsel, it is probable that the settlementwill amount to approximately $459,000 (RMB3,000,000); therefore, this amount has been accrued in accounts payable as at December 31, 2017.Litigation with Shenzhen Hua Xun Fang Zhou Technology Co., Ltd.On June 16, 2015, Zhong Chuan Rui You signed a cooperation agreement with Shenzhen Hua Xun Fang Zhou Technology Co., Ltd. (“Shenzhen Hua Xun”)and Xuesong Song, a major shareholder of C Media Limited. Pursuant to this agreement, Zhong Chuan Rui You procures equipment from Shenzhen Hua Xun.Xuesong Song acts as a joint liability guarantor for the entire debts of Zhong Chuan Rui You under this agreement. As Zhong Chuan Rui You did not make thepayments on the due dates, Shenzhen Hua Xun filed a lawsuit with Shenzhen Baoan District People's Court on May 31, 2016. On November 1, 2016, Zhong ChuanRui You, Xuesong Song and Shenzhen Hua Xun reached a settlement in Shenzhen Baoan District People's Court to settle $1,735,389 (RMB11,355,000) in fourinstalments. On December 30, 2017, the debt was assigned to C Media Limited.29C. ORGANIZATIONAL STRUCTUREThe following diagram illustrates our corporate structure and the place of formation and affiliation of each of our subsidiaries and affiliates as of September30, 2018.30The following diagram illustrates our corporate structure and the place of formation and affiliation of each of our subsidiaries and affiliates as of December31, 2017.Contractual Arrangements with Beijing Zhong Chuan Shi Xun Technology Limited’s Subsidiaries and Their Respective ShareholdersTo comply with the PRC legal restrictions on foreign ownership of companies that operate mobile application services, our subsidiaries operate in suchrestricted service areas in the PRC through certain PRC domestic companies, whose equity interests are held by certain management members or founders of the LKTechnology Ltd. Part of the registered capital of these PRC domestic companies was funded by certain management members or founders of LK Technology Ltd. LKTechnology Ltd., through its subsidiary Zhong Chuan Tian Xia Information and Technology (Shenzhen) Limited (the “WFOE”), has entered into an exclusivebusiness cooperation agreement with Beijing Zhong Chuan Shi Xun Technology Limited (“Zhong Chuan Shi Xun” or the “VIE”) the PRC domestic company, whichentitle the WFOE to receive a majority of profit of Zhong Chuan Shi Xun. In addition, Zhong Chuan Tian Xia Information and Technology (Shenzhen) Limited hasentered into certain agreements with those management members or founders, including equity interest pledge agreement of the equity interests held by thosemanagement members or founders and exclusive option agreement to acquire the equity interests in these companies when permitted by the PRC laws, rules andregulations. Details of the typical VIE structure of our significant consolidated VIE, primarily domestic companies associated with the operations such as ZhongChuan Shi Xun and its subsidiaries of Zhong Chuan Rui You, Huoerguosi Luokuang and Jiu Zhou Shi Dai, are set forth below: Exclusive Business Cooperation AgreementThe VIE has entered into an exclusive business services agreement with the WFOE, pursuant to which the WFOE provides exclusive business services tothe VIE. In exchange, the VIE pays a service fee to the WFOE which amounts to be no less than the 80% of the VIE’s aftertax profit, resulting in a transfer ofsubstantially all of the profits from the VIE to the WFOE.Exclusive Option AgreementThe VIE equity holders have granted the WFOE exclusive call options to purchase their equity interest in the VIE at an exercise price equal to the minimumprice as permitted by applicable PRC laws. The WFOE may nominate another entity or individual to purchase the equity interest, if applicable, under the call options.Each call option is exercisable subject to the condition that applicable PRC laws, rules and regulations do not prohibit completion of the transfer of the equityinterest pursuant to the call option. The VIE agrees not to distribute any dividends to the VIE equity holders without the approval of WFOE.31Equity Interest Pledge AgreementPursuant to the equity pledge agreement, the VIE equity holders have pledged all of their interests in the equity of the VIE as a continuing first prioritysecurity interest in favor of the WFOE to secure the performance of obligations by the VIEs and/or the equity holders under the exclusive business cooperationagreement. The WFOE is entitled to exercise its right to dispose of the VIE equity holders’ pledged interests in the equity of the VIE and has priority in receivingpayment by the application of proceeds from the auction or sale of such pledged interests, in the event of any breach or default under the exclusive businesscooperation agreement, if applicable. These equity pledge agreement remain in force until all the obligations under the exclusive business cooperation agreementhave been fulfilled.The exclusive business cooperation agreement and equity interest pledge agreement described above also enable the Company to receive substantially allof the economic benefits from the VIE by typically entitling the WFOE to all dividends and other distributions declared by the VIE and to any distributions orproceeds from the disposal by the VIE equity holders of their equity interests in the VIE.D. PROPERTY AND EQUIPMENTWe lease offices located at Lab 30 & Lab 32, SOHO 3Q, No 9, Guanghua Road, Chaoyang District, Beijing, which covers a floor space of 600 square meters.These leases expire at different times throughout 2018 and are renewable upon negotiation.ITEM 4A. UNRESOLVED STAFF COMMENTSNone.ITEM 5. OPERATING AND FINANCIAL REVIEW AND PROSPECTSA . OPERATING RESULTS.The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our consolidatedfinancial statements and the notes to those financial statements appearing elsewhere in this report. This discussion and analysis contains forwardlookingstatements that involve significant risks and uncertainties. As a result of many factors, such as our anticipated growth strategy, our plans to recruit moreemployees, our plans to invest in research and development to enhance our product or service lines, our future business development, results of operations andfinancial condition, expected changes in our net revenues and certain cost or expense items, our ability to attract and retain customers, trends and competitionin the enterprise mobile software application market, and the factors set forth elsewhere in this report, our actual results may differ materially from thoseanticipated in these forwardlooking statements. In light of those risks and uncertainties, there can be no assurance that the forwardlooking statementscontained in this report will in fact occur. You should not place undue reliance on the forwardlooking statements contained in this report.The forwardlooking statements speak only as of the date on which they are made, and, except to the extent required by U.S. federal securities laws, weundertake no obligation to update any forwardlooking statement to reflect events or circumstances after the date on which the statement is made or to reflectthe occurrence of unanticipated events. Further, the information about our intentions contained in this report is a statement of our intention as of the date of thisreport and is based upon, among other things, the existing regulatory environment, industry conditions, market conditions and prices and our assumptions as ofsuch date. We may change our intentions, at any time and without notice, based upon any changes in such factors, in our assumptions or otherwise.32Unless the context otherwise requires, all references to (i) “PRC” and “China” are to the People’s Republic of China; (ii) “U.S. dollar,” “$” and “US$”are to United States dollars; and (iii) “RMB”, “Yuan” and Renminbi are to the currency of the PRC or China.OverviewLuokung Technology was incorporated on October 27, 2009 under the laws of the British Virgin Islands. We are a holding company and conduct ouroperations through LK Technology Ltd., a British Virgin Islands limited liability company (“LK Technology”) and its whollyowned subsidiaries, MMB Limited andMobile Media (China) Limited and their respective subsidiaries and a contractuallycontrolled entity in the PRC named Beijing Zhong Chuan Shi Xun Technology,which hold the rights to deploy WiFi systems on about 700 trains in China, including 290 trains in which WiFi systems have already been installed and are inoperation. In May 2010, we consummated an initial public offering of our American Depository Shares, or ADSs, for gross proceeds of $16 million, and our ADSswere listed on the NASDAQ Capital Market under the ticker symbol “KONE”. Our ordinary shares are not currently listed on any trading market. Our AmericanDepository Shares (“ADSs”) were voluntarily delisted from the NASDAQ Capital Market on September 19, 2018. We have applied to NASDAQ for the listing of ourordinary shares on the NASDAQ Capital Market and received an approval for listing of Ordinary Shares on August 6, 2018, and as of the date of this transitionreport, that application and approval are currently under review.On August 17, 2018, we consummated an asset exchange transaction, pursuant to which we exchanged all issued and outstanding capital stock in TopskyInfoTech Holdings Pte Ltd., the parent of Softech, for the issued and outstanding capital stock of LK Technology (the “Asset Exchange”). In connection with theAsset Exchange, we changed our name on August 20, 2018, and on September 20, 2018, completed the issuance to the shareholders of C Media Limited, the formerparent of LK Technology, of (i) 185,412,599 of our ordinary shares, par value $0.01 per share and (ii) 1,000,000 of our preferred shares. Upon the consummation of theAsset Exchange, we ceased our previous business operations and became a company focused on the provision of WiFi and mobile application products for longdistance travelers in China.On August 25, 2018, LK Technology entered into a Stock Purchase Agreement (the “Agreement”) with the shareholders (“Shareholders”) of SuperengineHoldings Limited, a limited liability company organized under the laws of the British Virgin Islands (the “Superengine”), pursuant to which LK Technology acquiredall of the issued and outstanding capital stock of Superengine for an aggregate purchase price of US$60 million (the “Purchase Price”), which are paid by theissuance of our Ordinary Shares in an amount equal to the quotient of (x) the Purchase Price divided by (y) the average of the closing prices of the Ordinary Shareson the NASDAQ Capital Market over the 12 months period preceding July 31, 2018. We are a party to the Agreement in connection with the issuance of theOrdinary Shares and certain other limited purposes.Results of operations for the fiscal year ended December 31, 2017 compared to the fiscal year ended December 31, 2016.RevenueWe provide displaybased online advertising services to customers by integrating text description, image and video, and displaying the advertisements in aprominent position of LuoKuang Application. We recognize revenue in accordance with ASC 605, over the contractual term based on the agreements andconfirmation letters signed by both parties, commencing on the date the customer’s advertisement is displayed on our platform.For the year ended December 31, 2017, we had revenue of $26,082,417, as compared to revenue of $5,233,145 for the year ended December 31, 2016, anincrease of $20,849,272, or 398.4%, which was primarily due to the increase of our advertising clients.Cost of revenueOur cost of revenue primarily consists of depreciation, labor cost, WiFi equipment installation fees, data charges, annual payments to local railway bureau,other overhead costs.33Cost of revenue for the year ended December 31, 2017 was $5,547,779, representing a decrease of $767,725 or 12.2% as compared to $6,315,504 for the yearended December 31, 2016. The decrease was primarily attributable to the decrease in labor cost as a result of our cost control and a decrease in the number ofmaintenance staff. Additionally, data charges decreased as train passengers prefer using their mobile data, leading to a decrease in 3G and 4G data.Selling and marketing expenseOur selling and marketing expense mainly include promotional and marketing expenses and compensation for our sales and marketing personnel.Selling expense totaled $23,908,733 for the year ended December 31, 2017, as compared to $6,209,804 for the year ended December 31, 2016, an increase of$17,698,929 or 285.0%. The increase was primarily attributable to the increase in promotional and marketing activities conducted by the Company.General and administrative expenseOur general and administrative expenses consist primarily of salaries and benefits for our general and administrative personnel, rent, fees and expenses forlegal, accounting and other professional servicesGeneral and administrative expense totaled $2,451,249 for the year ended December 31, 2017, as compared to $2,108,854 for the year ended December 31,2016, an increase of $342,395 or 16.2%.Research and development expenses.Research and development expenses primarily consist of salaries and benefits for research and development personnel.Research and development expenses totaled $1,046,198 for the year ended December 31, 2017, as compared to $2,882,202 for the year ended December 31,2016, a decrease of $1,836,004 or 63.7%. The decrease was primarily attributable to the Company reduced its expenses in research and development temporarily asour products are quite stable at present.Loss from operationsAs a result of the factors described above, for the year ended December 31, 2017, loss from operations amounted to $6,871,542, as compared to loss fromoperations of $12,283,219 for the year ended December 31, 2016, a decrease of $5,411,677, or 44.1%.Other income/expenseOther income/expense mainly include interest income from bank deposits, foreign currency transaction gain, and loss from investment.Net lossAs a result of the factors described above, our net loss was $6,810,454 for the year ended December 31, 2017, compared to net loss of $13,049,031 for theyear ended December 31, 2016, a decrease of $6,238,577 or 47.8%.Foreign currency translation adjustmentOur reporting currency is the U.S. dollar. The functional currency of our parent company and subsidiaries of Merchant Supreme and Prime Cheer is the U.S.dollar and the functional currency of the Company’s subsidiaries incorporated in China is the Chinese Renminbi (“RMB”). The financial statements of oursubsidiaries incorporated in China are translated to U.S. dollars using period end rates of exchange for assets and liabilities, and average rates of exchange (for theperiod) for revenue, costs, and expenses. Net gains and losses resulting from foreign exchange transactions are included in the consolidated statements ofoperations and comprehensive loss. As a result of foreign currency translations, which are a noncash adjustment, we reported a foreign currency translation gain of$90,671 for the year ended December 31, 2017, as compared to a foreign currency translation loss of $387,375 for the year ended December 31, 2016. This noncashgain had the effect of increasing/decreasing our reported comprehensive income/loss.34Comprehensive lossAs a result of our foreign currency translation adjustment, we had comprehensive loss for the year ended December 31, 2017 of $6,719,783, compared tocomprehensive loss of $12,661,656 for the year ended December 31, 2016.B. LIQUIDITY AND CAPITAL RESOURCESThe information contained in “Item 5. Operating and Financial Review and Prospects – A. Operating Results – Liquidity and Capital Resources” isincorporated herein by reference.C. RESEARCH AND DEVELOPMENT, PATENTS AND LICENSES, ETC.The discussions of our research and development activities were contained in “Item 4. Information about our Company – B. Business Overview –Research and Development” and “Item 5. Operating and Financial Review and Prospects – A. Operating Results – Operating Expenses – Research and DevelopmentExpenses” are incorporated herein by reference. In the years ended December 31, 2017 and 2016, we spent $1,046,198 and $2,882,202, respectively, on research anddevelopment activities.D. TREND INFORMATION.Industry and Market OutlookChina has awarded licenses to mobile phone companies to provide the superfast 4G network to customers. The licenses, which are designed to give mobilephone users faster access to services, were granted by the government to China Mobile, China Unicom Hong Kong and China Telecom. Since the grants, ChinaMobile has offered 4G to subscribers from December 18, 2013. China Unicom and China Telecom, the country's other two major carriers, also offer 4G wireless. Thenumber of China Mobile 4G customers has exceeded 900 million by the end of October in 2017. The move greatly bolstered business for telecom equipment makersand a range of other companies.Under China’s 12th FiveYear Plan, a key priority is for China to transition from “Made in China” to “Designed in China.” In order to achieve this goal, thegovernment plans to heavily invest in science and technology education and R&D so as to further develop China’s intellectual property rights system and support“NextGeneration IT” as a Strategic Emerging Industry (SEI). Additionally, China plans to upgrade the technological capabilities of private and public services,including “triple play” services (the convergence of telecom, broadcasting and Internet networks), ecommerce, and egovernment and statistics systems.Furthermore, the government plans to invest in R&D of the "Internet of things" and cloud computing, and develop digital and virtual technologies.E. OFFBALANCE SHEET ARRANGEMENTSWe have not entered into any financial guarantees or other commitments to guarantee the payment obligations of any third parties. We have not enteredinto any derivative contracts that are indexed to our shares and classified as shareholder’s equity, or that are not reflected in our consolidated financial statements.Furthermore, except for the mortgage referenced above, we do not have any retained or contingent interest in assets transferred to an unconsolidated entity thatserves as credit, liquidity or market risk support to such entity. We do not have any variable interest in any unconsolidated entity that provides financing, liquidity,market risk or credit support to us or engages in leasing, hedging or research and development services with us.35F. TABULAR DISCLOSURE OF CONTRACTUAL OBLIGATIONSAs of December 31, 2017, we did not have any contractual obligations required to be disclosed in this Item 5.F. ITEM 6. DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES.A. DIRECTORS AND SENIOR MANAGEMENT.Executive Officers and DirectorsThe following table sets forth the names and ages as of the date of this transition report of each of our executive officers and directors:NameAgePositionXuesong Song50Chief Executive Officer, Chairman and DirectorDongpu Zhang50PresidentJie Yu34Chief Financial OfficerKegang Peng46Vice President and DirectorChuang Tao51DirectorDennis Galgano (1)(2)69Director (Independent)Jin Shi (1)(2)49Director (Independent)Jiming Ha (1)(3)56Director (Independent)Zhihao Xu (3)42Director (Independent)(1)Member of the Audit Committee.(2)Member of the Compensation Committee.(3)Member of the Nominating and Corporate Governance Committee.Set forth below is biographical information concerning our executive officers and directors.Xuesong Song is a cofounder of C Media Limited and served as its chairman of the board of directors and chief executive officer from 2012 until theconsummation of the AEA. From February 2014 through April 2017, Mr. Song served as a director of Seven Stars Cloud Group, Inc. (NASDAQ: SSC) and fromJanuary 2013 through February 2015, Mr. Song served as a director of Pingtan Marine Enterprise Ltd. (NASDAQ: PME). From May 2006 through January 2009, Mr.Song served as the Chairman of the Board of ChinaGrowth North Acquisition Corporation, a special purpose acquisition company, which acquired UIB GroupLimited in January 2009, in which he remains a director. Mr. Song has been a principal of Chum Capital Group Limited since August 2001, a merchant banking firmthat invests in growth Chinese companies and advises them in financings, mergers & acquisitions and restructurings, and chief executive officer of Beijing ChumInvestment Co., Ltd. since December 2001. Mr. Song has been a director of Mobile Vision Communication Ltd. since July 2004. Mr. Song received a Master’s ofBusiness Administration degree from Oklahoma City/Tianjin Program.Dongpu Zhang was appointed as the President of the Company effective on August 25, 2018. Mr. Dongpu Zhang has served as the General Manager ofSuperEngine Graphics Software Technology Development (Suzhou) Co., Ltd. (“SuperEngine Suzou”) and the Chief Executive Officer of SuperEngine HoldingLimited since September 2016. From February, 2014 to August, 2016, Mr. Zhang served as vice president of Industrial Development Group under China Fortune LandDevelopment Co., Ltd. From March, 2009 to February, 2014, Mr. Zhang served as the vice president of Aerospace Science and Technology Holding Group Co., Ltd.Mr. Zhang receive his Master Degree of Computer Science from Harbin Institute of Technology in 1994 and his Bachelor Degree of information system fromChangsha Institute of technology in 1991.Jie Yu served as the chief financial officer of C Media Limited from January 2018 until the consummation of the asset exchange transactions. From June 2016to January 2018, Mr. Yu served as chief financial officer and secretary of the board of directors of MTI Environment Group Limited. Prior to joining MTI, Mr. Yuserved as the senior manager at DA HUA CPA from November 2012 to May 2016. Previously, Mr. Yu served as the manager at Crowe Horwath (Hong Kong) CPA.Mr. Yu holds a bachelor degree in accounting and finance from University of Auckland and postgraduate diploma in accounting from University of Auckland.36Kegang Peng served as the Vice Chairman of the board of directors C Media Limited from October 2014 to the consummation of the asset exchangetransactions, and is now a member of the Company’s board of directors. Previously, from 2012 to 2014, Mr. Peng was chairman of the board and founder of JiangsuSuqian Jinghaiboyuan Information and Technology Co., Ltd. Mr. Peng studied at Beijing University of Aeronautics and Astronautics majoring computer andapplication.20F 1 f20f2017_luokungtech.htm AMENDMENT NO. 1 TO FORM 20FUNITED STATESSECURITIES AND EXCHANGE COMMISSIONWASHINGTON, D.C. 20549FORM 20F☐ REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934OR☐ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934For the Fiscal year ended _____________OR☒ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934For the transition period from October 1, 2017 to December 31, 2017☐ SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934Date of event requiring this shell company report Commission file number: 00134738Luokung Technology Corp.(Exact name of Registrant as specified in its charter)Not applicable(Translation of Registrant’s name into English)British Virgin IslandsLAB 32, SOHO 3Q, No 9, Guanghua Road, Chaoyang District, BeijingPeople’s Republic of China, 100020(Jurisdiction of incorporation or organization)(Address of principal executive offices)Mr. Muqiao GengLAB32, SOHO 3Q, No 9, Guanghua Road, Chaoyang District, BeijingPeople’s Republic of China 100020Tel: (86) 1085866721(Name, telephone, Email and/or facsimile number and address of company contact person)Securities registered or to be registered pursuant to Section 12(b) of the Act:Title of each className of each exchange on which registeredOrdinary shares, par value $0.01 per shareNonePreferred shares, par value $0.01 per shareNoneSecurities registered or to be registered pursuant to Section 12(g) of the Act:none(Title of Class)Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act:none(Title of Class)Indicate the number of outstanding shares of each of the issuer’s classes of capital or common stock as of the close of the period covered by the transitionreport. 187,097,599 Ordinary Shares, including 186,383,224 Ordinary Shares represented by 714,375 American Depositary Shares, and 1,000,000 Preferred Sharesoutstanding as of September 20, 2018.Indicate by check mark if the registrant is a wellknown seasoned issuer, as defined in Rule 405 of the Securities Act. ☐ Yes ☒ NoIf this report is an annual or transition report, indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of theSecurities Exchange Act of 1934. ☐ Yes ☒ NoIndicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirementsfor the past 90 days. ☒ Yes ☐ NoIndicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File requiredto be submitted and posted pursuant to Rule 405 of Regulation ST (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that theregistrant was required to submit and post such files). ☒ Yes ☐ NoIndicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a nonaccelerated filer. See definition of “accelerated filer andlarge accelerated filer” in Rule 12b2 of the Exchange Act. (Check one):Large accelerated filer ☐ Accelerated filer ☐ Nonaccelerated filer ☒Indicate by check mark which basis of accounting the registrant has used to prepare the financial statements included in this filing.U.S. GAAP ☒International Financial Reporting Standards as issuedby the International Accounting Standards Board ☐Other ☐If “Other” has been checked in response to the previous question, indicate by check mark which financial statement item the registrant has elected tofollow. Item 17 ☐ Item 18 ☐If this is an transition report, indicate by check mark whether the registrant is a shell company (as defined in Rule 12b2 of the ExchangeAct). ☐ Yes ☒ NoExplanatory NoteLuokung Technology Corp. (the “Company”) is filing this transition report on Form 20F (“Transition Report”) in connection with the completion of theexchange of certain of its assets for substantially all of the assets of C Media Limited (“C Media”) pursuant to that Asset Exchange Agreement, dated January 25,2018 (the “Original AEA”), as supplemented by the Addendum to Asset Exchange Agreement, dated October 3, 2018 (the “Addendum” and together with theOriginal AEA, the “AEA”). Following the consummation of the AEA, on October 4, 2018, the Company changed its fiscal year end from September 30 to the fiscalyear end used by C Media, December 31. This Transition Report covers the threemonth period from Octorber 1, 2017 to December 31, 2017, and the fiscal yearsdescribed herein.In this transition report:●References to the “Company”, “we”, “our” and “us” are to Luokung Technology Corp. and its consolidated subsidiaries and variable interestentity, except as the context otherwise requires;●This transition report on Form 20F covers the threemonth period from October 1, 2017 through December 31, 2017 (the “Transition Period”) andreflects our financial results thereof. Prior to this transition report on Form 20F, our two most recent annual reports on Form 20F cover the fiscalyears ended September 30, 2017 and September 30, 2016, respectively, and reflect financial results for the respective twelvemonth periods fromOctober 1 to September 30. Unless otherwise noted, all references to years are to the calendar year from January 1 to December 31 and referencesto our fiscal year or years are to the fiscal year or years which, prior to the Transition Period, ended September 30, while from and after theTransition Period, ended December 31;●References to an “ADS” are to an American Depositary Share, each of which represents one of our Ordinary Shares with a par value of $.01 pershare.Special Note Regarding Forwardlooking StatementsThis transition report contains forwardlooking statements that involve risks and uncertainties. These statements involve known and unknown risks,uncertainties and other factors that may cause our actual results, performance or achievements to be materially different from those expressed or implied by theforwardlooking statements.You can identify these forwardlooking statements by words or phrases such as “may,” “will,” “expect,” “anticipate,” “aim,” “estimate,” “intend,” “plan,”“believe,” “likely to” or other similar expressions. We have based these forwardlooking statements largely on our current expectations and projections about futureevents and financial trends that we believe may affect our financial condition, results of operations, business strategy and financial needs. You should not placeundue reliance on these forwardlooking statements, which apply only as of the date of this transition report. These forwardlooking statements include:●our future business development, results of operations and financial condition;●expected changes in our net revenues and certain cost or expense items;●our ability to attract and retain customers; and●trends and competition in the enterprise mobile software application market.You should read this transition report thoroughly with the understanding that our actual future results may be materially different from, and/or worse, thanwhat we expect. We qualify all of our forwardlooking statements by these cautionary statements. Other sections of this transition report include additional factorswhich could adversely impact our business and financial performance. Moreover, we operate in an evolving environment. New risk factors and uncertainties emergefrom time to time and it is not possible for our management to predict all risk factors and uncertainties, nor can we assess the impact of all factors on our business orthe extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forwardlooking statements.This transition report also contains estimates, projections and statistical data related to the market for the provision of WiFi and mobile applications inChina. This market data, including data from IDC, a leading provider of market data and intelligence, speaks as of the date it was published and includes projectionsthat are based on a number of assumptions and are not representations of fact. The market for the provision of WiFi and mobile applications in China may not growat the rates projected by the market data, or at all. The failure of the market to grow at the projected rates may materially and adversely affect our business and themarket price of our ADSs. In addition, the rapidly changing nature of the market for the provision of WiFi and mobile applications subjects any projections orestimates relating to the growth prospects or future condition of our market to significant uncertainties. If any one or more of the assumptions underlying the marketdata proves to be incorrect, actual results may differ from the projections based on these assumptions.You should not rely upon forwardlooking statements as predictions of future events. We undertake no obligation to update or revise any forwardlookingstatements, whether as a result of new information, future events or otherwise.TABLE OF CONTENTSPart IItem 1.Identity of Directors, Senior Management and Advisers.1Item 2.Offer Statistics and Expected Timetable.1Item 3.Key Information.1A.Selected Financial Data.1B.Capitalization and Indebtedness.3C.Reasons for the Offer and Use of Proceeds.3D.Risk Factors.3Item 4.Information on the Company.19A.History and Development of the Company.19B.Business Overview.20C.Organizational Structure.30D.Property, Plants and Equipment.32Item 4A.Unresolved Staff Comments.32Item 5.Operating and Financial Review and Prospects.32A.Operating Results.32B.Liquidity and Capital Resources.35C.Research and Development, Patents and Licenses, etc.35D.Trend Information.35E.Offbalance Sheet Arrangements.35F.Tabular Disclosure of Contractual Obligations.36Item 6.Directors, Senior Management and Employees.36A.Directors and Senior Management.36B.Compensation.37C.Board Practices.40D.Employees.43E.Share Ownership.43Item 7.Major Shareholders and Related Party Transactions.44A.Major Shareholders.44B.Related Party Transactions.45C.Interests of Experts and Counsel.45Item 8.Financial Information.45A.Consolidated Statements and Other Financial Information.45B.Significant Changes.46Item 9.The Offer and Listing.46A.Offer and Listing Details.46B.Plan of Distribution.47C.Markets.47D.Selling shareholders.48E.Dilution.48F.Expenses of the issue.48Item 10.Additional Information.48A.Share Capital.48B.Memorandum and Articles of Association.48C.Material Contracts.53D.Exchange Controls.54E.Taxation.61F.Dividends and Paying Agents.67G.Statement by Experts.67H.Documents on Display.67I.Subsidiary Information.68Item 11.Quantitative and Qualitative Disclosures about Market Risk.68Item 12.Description of Securities Other than Equity Securities.69A.Debt Securities.69B.Warrants and Rights.69C.Other Securities.69D.American Depositary Shares.69iPart IIItem 13.Defaults, Dividend Arrearages and Delinquencies.71Item 14.Material Modifications to the Rights of Security Holders and Use of Proceeds.71Item 15.Controls and Procedures.71Item 16.[Reserved.]72Item 16A.Audit Committee Financial Expert.72Item 16B.Code of Ethics.73Item 16C.Principal Accountant Fees and Services.73Item 16D.Exemptions from the Listing Standards for Audit Committees.73Item 16E.Purchases of Equity Securities by the Issuer and Affiliated Purchasers.73Item 16F.Change in Registrant’s Certifying Accountant.73Item 16G.Corporate Governance.73Item 16H.Mine Safety Disclosure.73Part IIIItem 17.Financial Statements.74Item 18.Financial Statements.74Item 19.Exhibits.74Index to Consolidated Financial StatementsF1iiPART IITEM 1. IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS.The directors of Luokung Technology Corp. are Xuesong Song, Kegang Peng, Dennis Galgano, Jin Shi, Jiming Ha, Zhihao Xu and Chuang Tao. Thebusiness address for our directors is LAB 32, SOHO 3Q, No 9, Guanghua Road, Chaoyang District, Beijing, People’s Republic of China.Moore Stephens CPA Limited has served as our auditor since October 5, 2018, and is located at 801806 Silvercord Tower 1, 30 Canton road, Tsimshatsui,Kowloon, Hong Kong. BDO China Shun Lun Pan Certified Public Accountants LLP served as our auditors for the last three years, and are located at 4F, No. 61Nanjing Road, Shanghai, People’s Republic of China.Garvey Schubert Barer, P.C., serves as our legal counsel in the United States, and is located at Flour Mill Building, 1000 Potomac Street NW, Suite 200,Washington, D.C., 200073501.Conyers Dill & Pearlman serves as our legal counsel with regard to the laws of the British Virgin Islands, and is located at 29th Floor, One Exchange Square,8 Connaught Place, Central, Hong Kong.ITEM 2. OFFER STATISTICS AND EXPECTED TIMETABLE.Not applicable.ITEM 3. KEY INFORMATION.A. SELECTED FINANCIAL DATA.Luokung Technology Corp. and its consolidated subsidiaries (“Luokung Technology”, “we”, “us”, or “the Company”) consummated an asset exchangeagreement pursuant to which we exchanged our existing assets with those of C Media Limited (the “Asset Exchange”) on August 17, 2018, and we changed ourname from Kingtone Wirelessinfo Solution Holding Ltd. to our current name on August 20, 2018. On October 4, 2018, in connection with the consummation of the Asset Exchange, we changed our fiscal year end from September 30 to December 31.1The selected financial data for the fiscal years ended December 31 2017 and 2016 have been derived from our audited consolidated and combined financialstatements. The selected consolidated and combined financial data should be read in conjunction with our audited financial statements and the accompanying notesand “Item 5 – Operating and Financial Review and Prospects.” Our consolidated and combined financial statements are prepared and presented in accordance withUnited States generally accepted accounting principles, or U.S. GAAP. Our historical results do not necessarily indicate our results expected for any future periods.You should not view our historical results as an indicator of our future performance.LK TECHNOLOGY LTD. AND SUBSIDIARIESSELECTED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS(IN U.S. DOLLARS)For the years ended December 31,20172016Revenues$26,082,417$5,233,145Less: Cost of revenues5,547,7796,315,504Less: Operating expenses:Selling and marketing23,908,7336,209,804General and administrative2,451,2492,108,854Research and development1,046,1982,882,202Total operating expenses27,406,18011,200,860Loss from operations(6,871,542)(12,283,219)Other income (expense):Interest expense(26,611)(4,412)Foreign exchange gains(losses)350,679(298,257)Loss from investment(428,571)Other income (expense), net(262,980)(34,572)Total other income (expense), net61,088(765,812)Loss before income taxes(6,810,454)(13,049,031)Income taxesNet loss$(6,810,454)$(13,049,031)Other comprehensive income:Foreign currency translation adjustment90,671387,375Total comprehensive loss$(6,719,783)$(12,661,656)2LK TECHNOLOGY LTD. AND SUBSIDIARIESSELECTED CONSOLIDATED BALANCE SHEETS(IN U.S. DOLLARS)As of December 31,20172016Accounts receivable, net of allowance for doubtful accounts9,729,6251,865,836Amounts due from related parties11,760,692Property and equipment, net5,044,8727,771,027Goodwill7,239,9367,239,936TOTAL ASSETS37,582,85821,114,832Accounts payable8,784,5186,446,584Accrued liabilities and other payables12,962,91211,329,613Total liabilities25,311,11333,905,520Total Shareholder’s Equity (Deficit)12,271,745(12,790,688)TOTAL LIABILITIES AND SHAREHOLDER’S EQUITY (DEFICIT)37,582,85821,114,832B. CAPITALIZATION AND INDEBTEDNESS.Not applicable.C. REASONS FOR THE OFFER AND USE OF PROCEEDS.Not applicable.D. RISK FACTORS.An investment in our ADSs and ordinary shares involves a high degree of risk. You should carefully consider the risks and uncertainties described belowtogether with all other information contained in this transition report, including the matters discussed under “Special Note Regarding ForwardLooking Statements,”before you decide to invest in our ADSs or ordinary shares. You should pay particular attention to the fact that we are a holding company with substantialoperations in China and are subject to legal and regulatory environments that in many respects differ from those of the United States. If any of the following risks, orany other risks and uncertainties that are not presently foreseeable to us, actually occur, our business, financial condition, results of operations, liquidity and ourfuture growth prospects would be materially and adversely affected. You should also consider all other information contained in this transition report beforedeciding to invest in our ADSs or ordinary shares.Risks Related to Our Company and Our IndustryThe Company had incurred negative cash flows from operating activities and net losses as of December 31, 2017. These matters raise substantial doubt aboutthe Company’s ability to continue as a going concern.The Company’s consolidated financial statements are prepared using generally accepted accounting principles in the United States of America applicableto a going concern, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. As of and for the year endedDecember 31, 2017, the Company had incurred significant operating losses and working capital deficit. The ability of the Company to continue as a going concern isdependent on the Company obtaining adequate capital to fund operating losses until it becomes profitable. If the Company is unable to obtain adequate capital, itcould be forced to cease operations. The accompanying consolidated financial statements do not include any adjustments that might be necessary if the Companyis unable to continue as a going concern.3We may undertake acquisitions, investments, joint ventures or other strategic alliances, which could have a material adverse effect on our ability to manageour business. In addition, such undertakings may not be successful.Our strategy includes plans to grow both organically and through acquisitions, participation in joint ventures or other strategic alliances. Joint venturesand strategic alliances may expose us to new operational, regulatory and market risks, as well as risks associated with additional capital requirements. We may not beable, however, to identify suitable future acquisition candidates or alliance partners. Even if we identify suitable candidates or partners, we may be unable tocomplete an acquisition or alliance on terms commercially acceptable to us. If we fail to identify appropriate candidates or partners, or complete desired acquisitions,we may not be able to implement our strategies effectively or efficiently. In addition, our ability to successfully integrate acquired companies and their operations may be adversely affected by several factors. These factorsinclude:1.diversion of management’s attention;2.difficulties in retaining customers of the acquired companies;3.difficulties in retaining personnel of the acquired companies;4.entry into unfamiliar markets;5.unanticipated problems or legal liabilities; and6.tax and accounting issues.If we fail to integrate acquired companies efficiently, our earnings, revenue growth and business could be negatively affected.Due to intense competition for highlyskilled personnel, we may fail to attract and retain enough sufficiently trained employees to support our operations; ourability to bid for and obtain new projects may be negatively affected and our revenues could decline as a result.The IT industry relies on skilled employees, and our success depends to a significant extent on our ability to attract, hire, train and retain qualifiedemployees. There is significant competition in China for professionals with the skills necessary to develop the products and perform the services we offer to ourcustomers. Increased competition for these professionals, in the mobile application design area or otherwise, could have an adverse effect on us if we experiencesignificant increase in the attrition rate among employees with specialized skills, which could decrease our operating efficiency and productivity and could lead to adecline in demand for our services.In addition, our ability to serve existing customers and business partners and obtain new business will depend, in large part, on our ability to attract, trainand retain skilled personnel that enable us to keep pace with growing demands for wifi connectivity and mobile applications, evolving industry standards andchanging customer preferences. Our failure to attract, train and retain personnel with the qualifications necessary to fulfill the needs of our existing and futurecustomers or to assimilate new employees successfully could have a material adverse effect on our business, financial condition and results of operations. Ourfailure to retain our key personnel on business development or find suitable replacements of the key personnel upon their departure may lead to shrinking newimplementation projects, which could materially adversely affect our business.4Our business depends substantially on the continuing efforts of our senior executives and other key personnel, and our business may be severely disrupted if welose their services.Our future success heavily depends upon the continued services of our senior executives and other key employees, particularly since we recentlyappointed a new chairman. We are reliant on the services of Mr. Xuesong Song, our chairman, chief executive officer and member of our board of directors. If one ormore of our senior executives or key employees is unable or unwilling to continue in his or her present position, we may not be able to replace such employee easily,or at all, we may incur additional expenses to recruit, train and retain replacement personnel, our business may be severely disrupted, and our financial condition andresults of operations may be materially adversely affected.Our business could suffer if our executives and directors compete against us and our noncompetition agreements with them cannot be enforced.If any of our senior executives or key employees joins a competitor or forms a competing company, we may lose customers, knowhow and keyprofessionals and staff members to them. Also, if any of our business development managers who keep a close relationship with our customers and businesspartners joins a competitor or forms a competing company, we may lose customers, and our revenues may be materially adversely affected. Most of our executiveshave entered, or will soon enter, into employment agreements with us that contain or will contain noncompetition provisions. However, if any dispute arisesbetween our executive officers and us, such noncompetition provisions may not be enforceable, especially in China, where all of these executive officers and keyemployees reside, in light of the uncertainties with China’s legal system. See “Risk Factors — Risks Related to Doing Business in China — Uncertainties withrespect to the PRC legal system could adversely affect us.”Our computer networks may be vulnerable to security risks that could disrupt our services and adversely affect our results of operations.Our computer networks may be vulnerable to unauthorized access, computer hackers, computer viruses and other security problems caused byunauthorized access to, or improper use of, systems by third parties or employees. A hacker who circumvents security measures could misappropriate proprietaryinformation or cause interruptions or malfunctions in operations. Computer attacks or disruptions may jeopardize the security of information stored in andtransmitted through computer systems and mobile devices of our customers. Actual or perceived concerns that our systems may be vulnerable to such attacks ordisruptions may deter customers from using our services. As a result, we may be required to expend significant resources to protect against the threat of thesesecurity breaches or to alleviate problems caused by these breaches, which could adversely affect our results of operations.If we do not continually enhance our solutions and service offerings, we may have difficulty in retaining existing customers and attracting new customers.We believe that our future success will depend, to a significant extent, upon our ability to enhance our existing applications and platform, and to introducenew features to meet the preferences and requirements of our customers in a rapidly developing and evolving market. Unexpected technical, operational, distributionor other problems could delay or prevent the introduction of one or more of these products or services, or any products or services that we may plan to introduce inthe future. Our present or future products may not satisfy the evolving preferences and tastes of our customers, and these solutions and services may not achieveanticipated market acceptance or generate incremental revenue. If we are unable to anticipate or respond adequately to the need for service or productenhancements due to resource, technological or other constraints, our business, financial condition and results of operations could be materially and adverselyaffected.5If we are unable to develop competitive new products and service offerings our future results of operations could be adversely affected.Our future revenue stream depends to a large degree on our ability to utilize our technology in a way that will allow us to offer new types of mobileapplications and services to a broader customer base. We will be required to make investments in research and development in order to continually develop newsoftware applications and related service offerings, enhance our existing platform, mobile applications and related service offerings and achieve market acceptanceof our mobile applications and service offerings. We may incur problems in the future in innovating and introducing new mobile applications and service offerings.Our developmentstage mobile applications may not be successfully completed or, if developed, may not achieve significant customer acceptance. If we are unableto successfully define, develop and introduce competitive new mobile applications, and enhance existing mobile applications, our future results of operations wouldbe adversely affected. The timely availability of new applications and their acceptance by customers are important to our future success. A delay in the developmentof new applications could have a significant impact on its results of operations.Changes in technology could adversely affect our business by increasing our costs, reducing our profit margins and causing a decline in our competitiveness.China’s wireless telecom industry, in which we operate, is characterized by rapidly changing technology, evolving industry standards, frequentintroductions of new services and solutions and enhancements as well as changing customer demands. New solutions and new technologies often render existingsolutions and services obsolete, excessively costly or otherwise unmarketable. As a result, our success depends on our ability to adapt to the latest technologicalprogress, such as the 5G standard and technologies, and to develop or acquire and integrate new technologies into our platform, mobile applications and relatedservices. Advances in technology also require us to commit substantial resources to developing or acquiring and then deploying new technologies for use in ouroperations. We must continuously train personnel in new technologies and in how to integrate existing hardware and software systems with these newtechnologies. We may not be able to adapt quickly to new technologies or commit sufficient resources to compete successfully against existing or new competitorsin bringing to market solutions and services that incorporate these new technologies. We may incur problems in the future in innovating and introducing new mobileapplications and service offerings. Our development of new mobile applications and platform enhancements may not be successfully completed or, if developed,may not achieve significant customer acceptance. If we fail to adapt to changes in technologies and compete successfully against established or new competitors,our business, financial condition and results of operations could be adversely affected.Problems with the quality or performance of our hardware, software or other systems may cause delays in the introduction of new solutions or result in the lossof customers and revenues, which could have a material and adverse effect on our business, financial condition and results of operations.Our hardware and software systems are complex and may contain defects, errors or bugs when first introduced to the market or to a particular customer, oras new versions are released. Because we cannot test for all possible scenarios, our systems may contain errors that are not discovered until after they have beeninstalled or implemented, and we may not be able to timely correct these problems. These defects, errors or bugs could interrupt or delay the completion of projectsor sales to our customers. In addition, our reputation may be damaged and we may fail to acquire new projects from existing customers or new customers. Errors mayoccur when we provide systems integration and maintenance services. Even in cases where we have agreements with our customers that contain provisionsdesigned to limit our exposure to potential claims and liabilities arising from customer problems, these provisions may not effectively protect us against such claimsin all cases and in all jurisdictions. In addition, as a result of business and other considerations, we may undertake to compensate our customers for damages arisingfrom the use of our solutions, even if our liability is limited by these provisions. Moreover, claims and liabilities arising from customer problems could also result inadverse publicity and materially and adversely affect our business, results of operations and financial condition. We currently do not carry any product or serviceliability insurance and any imposition of liability on us may materially and adversely affect our business and increase our costs, resulting in reduced revenues andprofitability.Our products may contain undetected software defects, which could negatively affect our revenues.Our software products are complex and may contain undetected defects. Although we test our products, it is possible that errors may be found or occur inour new or existing products after we have commenced commercial shipment of those products. Defects, whether actual or perceived, could result in adversepublicity, loss of revenues, product returns, a delay in market acceptance of our products, loss of competitive position or claims against us by customers. Any suchproblems could be costly to remedy and could cause interruptions, delays, or cessation of our product sales, which could cause us to lose existing or prospectivecustomers and could negatively affect our results of operations.6We may be subject to infringement, misappropriation and indemnity claims in the future, which may cause us to incur significant expenses, pay substantialdamages and be prevented from providing our services or technologies.Our success depends, in part, on our ability to carry out our business without infringing the intellectual property rights of third parties. Patent andcopyright law covering softwarerelated technologies is evolving rapidly and is subject to a great deal of uncertainty. Our selfdeveloped or licensed technologies,processes or methods may be covered by thirdparty patents or copyrights, either now existing or to be issued in the future. Any potential litigation may cause us toincur significant expenses. Thirdparty claims, if successfully asserted against us may cause us to pay substantial damages, seek licenses from third parties, payongoing royalties, redesign our services or technologies, or prevent us from providing services or technologies subject to these claims. Even if we were to prevail,any litigation would likely be costly and timeconsuming and divert the attention of our management and key personnel from our business operations.Our failure to protect our intellectual property rights may undermine our competitive position, and subject us to costly litigation to protect our intellectualproperty rights.Any misappropriation of our technology or the development of competitive technology could seriously harm our business. We regard a substantial portionof our hardware and software systems as proprietary and rely on statutory copyright, trademark, patent, trade secret laws, customer license agreements, employeeand thirdparty nondisclosure agreements and other methods to protect our proprietary rights. Nevertheless, these resources afford only limited protection and theactions we take to protect our intellectual property rights may not be adequate. In particular, third parties may infringe or misappropriate our proprietarytechnologies or other intellectual property rights, which could have a material adverse effect on our business, financial condition and results of operations. Inaddition, intellectual property rights and confidentiality protection in China may not be as effective as in the United States, and policing unauthorized use ofproprietary technology can be difficult and expensive. Further, litigation may be necessary to enforce our intellectual property rights, protect our trade secrets ordetermine the validity and scope of the proprietary rights of others. The outcome of any such litigation may not be in our favor. Any such litigation may be costlyand may divert management attention, as well as our other resources, away from our business. An adverse determination in any such litigation will impair ourintellectual property rights and may harm our business, prospects and reputation. In addition, we have no insurance coverage against litigation costs and wouldhave to bear all litigation costs in excess of the amount recoverable from other parties. The occurrence of any of the foregoing could have a material adverse effecton our business, financial condition and results of operations. Our solutions incorporate a portion of, and work in conjunction with, thirdparty hardware and software solutions. If these thirdparty hardware or softwaresolutions are not available to us at reasonable costs, or at all, our results of operations could be adversely impacted.Although our hardware and software systems and mobile applications primarily rely on our own core technologies, some elements of our systemsincorporate a small portion of thirdparty hardware and software solutions. If any third party were to discontinue making their intellectual property available to us orour customers on a timely basis, or increase materially the cost of their licensing such intellectual property, or if our systems or applications failed to properlyfunction or interoperate with replacement intellectual property, we may need to incur costs in finding replacement thirdparty solutions and/or redesigning oursystems or applications to replace or function with or on replacement thirdparty proprietary technology. Replacement technology may not be available on termsacceptable to us or at all, and we may be unable to develop alternative solutions or redesign our systems or applications on a timely basis or at a reasonable cost. Ifany of these were to occur, our results of operations could be adversely impacted.7Our ability to sell our products is highly dependent on the quality of our service and support offerings, and our failure to offer high quality service could have amaterial adverse effect on our ability to market and sell our products.Our customers depend upon our customer service and support staff to resolve issues relating to our products. Highquality support services are critical forthe successful marketing and sale of our products. If we fail to provide highquality support on an ongoing basis, our customers may react negatively and we maybe materially and adversely affected in our ability to sell additional products to these customers. This could also damage our reputation and prospects with potentialcustomers. Our failure to maintain highquality support services could have a material and adverse effect on our business, results of operations and financialcondition.Weaknesses in our internal controls over financial reporting or disclosure controls and procedures may have a material adverse effect on our business, theprice of our ordinary shares, operating results and financial condition.We are required to establish and maintain appropriate internal controls over financial reporting and disclosure controls and procedures. Pursuant to Section404 of the SarbanesOxley Act of 2002 and the related rules adopted by the Securities and Exchange Commission, every public company is required to include amanagement report on its internal controls over financial reporting in its transition report, which contains management’s assessment of the effectiveness of thecompany’s internal controls over financial reporting. This requirement first applied to our annual report on Form 20F for the fiscal year ended on September 30,2011. In connection with our assessments of our disclosure controls and procedures and internal controls over financial reporting, management concluded that as ofSeptember 30, 2018, our disclosure controls and procedures and our internal controls over financial reporting were not effective due to lack of U.S. generallyaccepted accounting principles (“U.S. GAAP”) expertise in our current accounting team. Please refer to the discussion under Item 15, “Controls and Procedures” forfurther discussion of our material weakness as of December 31, 2017. Should we be unable to remediate the material weakness promptly and effectively, suchweakness could harm our operating results, result in a material misstatement of our financial statements, cause us to fail to meet our financial reporting obligations orprevent us from providing reliable and accurate financial reports or avoiding or detecting fraud. This, in turn, could result in a loss of investor confidence in theaccuracy and completeness of our financial reports, which could have an adverse effect on the trading price of our ordinary shares. Any litigation or otherproceeding or adverse publicity relating to the material weaknesses could have a material adverse effect on our business and operating results. We have very limited insurance coverage which could expose us to significant costs and business disruption.We do not maintain any insurance coverage for our leased properties. Should any natural catastrophes such as earthquakes, floods, typhoons or any actsof terrorism occur in Beijing, China, where our head office is located and most of our employees are based, or elsewhere in China, we might suffer not onlysignificant property damages, but also loss of revenues due to interruptions in our business operations, which could have a material adverse effect on our business,operating results or financial condition.The insurance industry in China is still at an early stage of development. Insurance companies in China offer limited business insurance products, and donot, to our knowledge, offer business liability insurance. As a result, we do not have any business liability insurance coverage for our operations. Moreover, whilebusiness disruption insurance is available, we have determined that the risks of disruption and cost of the insurance are such that we do not require it at this time.Any business disruption, litigation or natural disaster might result in substantial costs and diversion of resources, particularly if it affects our technology platformswhich we depend on for delivery of our software and services, and could have a material adverse effect on our financial condition and results of operations.We may be liable to our customers for damages caused by unauthorized disclosure of sensitive and confidential information, whether through our employees orotherwise.We are typically required to manage, utilize and store sensitive or confidential customer data in connection with the products and services we provide.Under the terms of our customer contracts, we are required to keep such information strictly confidential. We seek to implement specific measures to protectsensitive and confidential customer data. We require our employees to enter into nondisclosure agreements to limit such employees’ access to, and distribution of,our customers’ sensitive and confidential information and our own trade secrets. We can give no assurance that the steps taken by us in this regard will be adequateto protect our customers’ confidential information. If our customers’ proprietary rights are misappropriated by our employees, in violation of any applicableconfidentiality agreements or otherwise, our customers may consider us liable for that act and seek damages and compensation from us. However, we currently donot have any insurance coverage for mismanagement or misappropriation of such information by our employees. Any litigation with respect to unauthorizeddisclosure of sensitive and confidential information might result in substantial costs and diversion of resources and management attention.8We may face intellectual property infringement claims that could be timeconsuming and costly to defend. If we fail to defend ourselves against such claims, wemay lose significant intellectual property rights and may be unable to continue providing our existing products and services.It is critical that we use and develop our technology and products without infringing upon the intellectual property rights of third parties, includingpatents, copyrights, trade secrets and trademarks. Intellectual property litigation is expensive and timeconsuming and could divert management’s attention from ourbusiness. A successful infringement claim against us, whether with or without merit, could, among others things, require us to pay substantial damages, developnoninfringing technology, or rebrand our name or enter into royalty or license agreements that may not be available on acceptable terms, if at all, and cease making,licensing or using products that have infringed a third party’s intellectual property rights. Protracted litigation could also result in existing or potential customersdeferring or limiting their purchase or use of our products until resolution of such litigation, or could require us to indemnify our customers against infringementclaims in certain instances. Also, we may be unaware of intellectual property registrations or applications relating to our services that may give rise to potentialinfringement claims against us. Parties making infringement claims may be able to obtain an injunction to prevent us from delivering our services or usingtechnology containing the allegedly infringing intellectual property. Any intellectual property litigation could have a material adverse effect on our business, resultsof operations or financial condition. Seasonality and fluctuations in our customers’ spending cycle and other factors can cause our revenues and operating results to vary significantly from quarterto quarter and from year to year.Our revenues and operating results will vary significantly from quarter to quarter and from year to year due to a number of factors, many of which areoutside of our control. Our new lines of business acquired upon the consummation of the asset exchange transaction discussed below see higher customer use andactivity during the Chinese New Year holiday than other times during the year when rail travel is high, which lead to higher revenue during this period as morecustomers would like to place more advertising. Due to these and other factors, our operating results may fluctuate significantly from quarter to quarter and fromyear to year. These fluctuations are likely to continue in the future, and operating results for any period may not be indicative of our future performance in any futureperiod.Our corporate actions are substantially controlled by our principal shareholders, who can cause us to take actions in ways you may not agree with.Mr. Xuesong Song, our chairman, chief executive officer and a member of our board of directors, beneficially owns 19.31% of our outstanding ordinaryshares and 1,000,000 preferred shares, and each preferred share has the right to 399 votes at a meeting of the members of the Company. Our officers and directors asa group beneficially own an aggregate of approximately 33.69% of our outstanding ordinary shares. These shareholders, acting individually or as a group, couldexert control and substantial influence over matters such as electing directors, amending our constitutional documents, and approving acquisitions, mergers or otherbusiness combination transactions. This concentration of ownership and voting power may also discourage, delay or prevent a change in control of our company,which could deprive our shareholders of an opportunity to receive a premium for their shares as part of a sale of our company and might reduce the price of ourshares. Alternatively, our controlling shareholders may cause a merger, consolidation or change of control transaction even if it is opposed by our othershareholders, including those who purchase shares in this offering.9We depend on a small number of customers to derive a significant portion of our revenues. If we were to become dependent again upon a few customers, suchdependency could negatively impact our business, operating results and financial condition.We derived a material portion of our revenues from a small number of customers. In the years ended December 31, 2017 and 2016, our five largestcustomers accounted for 99.8% and 78.5% of our total sales, respectively, and our largest customer Guangdong Zhanshi Media Advertising Co., Ltd. accounted forapproximately 80.8% of our total sales during for the fiscal year ended December 31, 2017. As our customer base may change from yeartoyear, during such yearsthat the customer base is highly concentrated, the fluctuation of our sales to any of such major customers could have a material adverse effect on our business,operating results and financial condition. Moreover, our high customer base concentration may also adversely affect our ability to negotiate contract prices withthese customers, which may in turn materially and adversely affect our results of operations.Our historical outstanding accounts receivable have been relatively high. Inability to collect our accounts receivable on a timely basis, if at all, couldmaterially and adversely affect our financial condition, liquidity and results of operations.Historically, our outstanding accounts receivable have been relatively high. As of December 31, 2017 and 2016, our outstanding accounts receivable beforeimpairment were $10.4 million and $2.10 million, respectively. Although we conduct credit evaluations of our customers, we generally do not require collateral orother security from our customers. In addition, we have had a relatively high customer concentration. The outstanding accounts receivable balance for our largestcustomer was 45.3% and 38.5% of our total accounts receivable balance as of December 31, 2017 and 2016, respectively. As a result, an extended delay or default inpayment relating to a significant account would likely have a material and adverse effect on the aging schedule and turnover days of our accounts receivable. Ourinability to collect our accounts receivable on a timely basis, if at all, could materially and adversely affect our financial condition, liquidity and results of operations.Risks Related to Doing Business in ChinaAdverse changes in political and economic policies of the PRC government could have a material adverse effect on the overall economic growth of China,which could reduce the demand for our services and materially and adversely affect our competitive position.Substantially all of our business operations are conducted in China. Accordingly, our business, results of operations, financial condition and prospects aresubject to a significant degree to economic, political and legal developments in China. Although the Chinese economy is no longer a planned economy, the PRCgovernment continues to exercise significant control over China’s economic growth through direct allocation of resources, monetary and tax policies, and a host ofother government policies such as those that encourage or restrict investment in certain industries by foreign investors, control the exchange between RMB andforeign currencies, and regulate the growth of the general or specific market. These government involvements have been instrumental in China’s significant growthin the past 30 years. The reorganization of the telecommunications industry encouraged by the PRC government has directly affected our industry and our growthprospect. In response to the recent global and Chinese economic downturn, the PRC government has adopted policy measures aimed at stimulating the economicgrowth in China. If the PRC government’s current or future policies fail to help the Chinese economy achieve further growth or if any aspect of the PRCgovernment’s policies limits the growth of the telecommunications industry in China or our industry or otherwise negatively affects our business, our growth rate orstrategy, our results of operations could be adversely affected as a result. Our business benefits from certain government tax incentives. Expiration, reduction or discontinuation of, or changes to, these incentives will increase our taxburden and reduce our net income.Under the PRC Enterprise Income Tax Law passed in 2007 and the implementing rules, both of which became effective on January 1, 2008, or the New EITLaw, a unified enterprise income tax rate of 25% and unified tax deduction standard is applied equally to both domesticinvested enterprises and foreigninvestedenterprises, or FIEs. Enterprises established prior to March 16, 2007 eligible for preferential tax treatment in accordance with the then tax laws and administrativeregulations shall gradually become subject to the New EIT Law rate over a fiveyear transition period starting from the date of effectiveness of the New EIT Law.However, certain qualifying hightechnology enterprises may still benefit from a preferential tax rate of 15% if they own their core intellectual properties and they areenterprises in certain Statesupported hightech industries to be later specified by the government. As a result, if our PRC subsidiaries qualify as “hightechnologyenterprises,” they will continue to benefit from the preferential tax rate of 15%, subject to transitional rules implemented from January 1, 2008. Our subsidiary, BeijingZhong Chuan Shi Xun Technology Limited, is qualified as a “hightechnology enterprise” until the end of the November 2018, and therefore it had benefited fromthe preferential tax rate of 15%, subject to transitional rules implemented on January 1, 2008. Although we intend to apply for a renewal of this qualification, if BeijingZhong Chuan Shi Xun ceases to qualify as a “hightechnology enterprise”, or the tax authorities change their position on our preferential tax treatments in thefuture, our future tax liabilities may materially increase, which could materially and adversely affect our financial condition and results of operations.10If we were deemed a “resident enterprise” by PRC tax authorities, we could be subject to tax on our global income at the rate of 25% under the New EIT Lawand our nonPRC shareholders could be subject to certain PRC taxes.Under the New EIT Law and the implementing rules, both of which became effective January 1, 2008, an enterprise established outside of the PRC with “defacto management bodies” within the PRC may be considered a PRC “resident enterprise” and will be subject to the enterprise income tax at the rate of 25% on itsglobal income as well as PRC enterprise income tax reporting obligations. The implementing rules of the New EIT Law define “de facto management” as “substantialand overall management and control over the production and operations, personnel, accounting, and properties” of the enterprise. However, as of the date of thistransition report, no final interpretations on the implementation of the “resident enterprise” designation are available. Moreover, any such designation, when madeby PRC tax authorities, will be determined based on the facts and circumstances of individual cases. Therefore, if we were to be considered a “resident enterprise”by the PRC tax authorities, our global income would be taxable under the New EIT Law at the rate of 25% and, to the extent we were to generate a substantial amountof income outside of PRC in the future, we would be subject to additional taxes. In addition, the dividends we pay to our nonPRC enterprise shareholders and gainsderived by such shareholders or ADS or ordinary share holders from the transfer of our shares or ADSs may also be subject to PRC withholding tax at the rate up to10%, if such income were regarded as Chinasourced income.Our holding company structure may limit the payment of dividends.We have no direct business operations, other than our ownership of our subsidiaries. While we have no current intention of paying dividends, should wedecide in the future to do so, as a holding company, our ability to pay dividends and meet other obligations depends upon the receipt of dividends or otherpayments from our operating subsidiaries and other holdings and investments. Current PRC regulations permit our PRC subsidiaries to pay dividends to us only outof their accumulated profits, if any, determined in accordance with Chinese accounting standards and regulations. In addition, each of our subsidiaries in China isrequired to set aside at least 10% of its aftertax profits each year, if any, to fund a statutory reserve until such reserve reaches 50% of its registered capital. Thesereserves are not distributable as cash dividends. Furthermore, if our subsidiaries in China incur debt on their own behalf in the future, the instruments governing thedebt may restrict their ability to pay dividends or make other payments to us. As a result, there may be limitations on the ability of our PRC subsidiaries to paydividends or make other investments or acquisitions that could be beneficial to our business or otherwise fund and conduct our business.In addition, under the New EIT Law and the implementing rules that became effective on January 1, 2008, dividends generated from the business of our PRCsubsidiaries after January 1, 2008 and payable to us may be subject to a withholding tax rate of 10% if the PRC tax authorities subsequently determine that we are anonresident enterprise, unless there is a tax treaty with China that provides for a different withholding arrangement.Uncertainties with respect to the PRC legal system could adversely affect us.We conduct all of our business through our subsidiaries in China. Our operations in China are governed by PRC laws and regulations. Our PRCsubsidiaries are generally subject to laws and regulations applicable to foreign investments in China and, in particular, laws and regulations applicable to whollyforeignowned enterprises. The PRC legal system is based on statutes. Prior court decisions may be cited for reference but have limited precedential value.11Since 1979, PRC legislation and regulations have significantly enhanced the protections afforded to various forms of foreign investments in China.However, China has not developed a fully integrated legal system and recently enacted laws and regulations may not sufficiently cover all aspects of economicactivities in China. In particular, because these laws and regulations are relatively new, and because of the limited volume of published decisions and theirnonbinding nature, the interpretation and enforcement of these laws and regulations involve uncertainties. In addition, the PRC legal system is based in part ongovernment policies and internal rules (some of which are not published on a timely basis or at all) that may have a retroactive effect. As a result, we may not beaware of our violation of these policies and rules until some time after the violation. In addition, any litigation in China may be protracted and result in substantialcosts and diversion of resources and management attention.PRC regulation of loans and direct investment by offshore holding companies to PRC entities may delay or prevent us from using the proceeds of our May2010 public offering to make loans or additional capital contributions to our PRC operating subsidiaries, which could materially and adversely affect ourliquidity and our ability to fund and expand our business.In utilizing the proceeds of our May 2010 public offering as an offshore holding company of our PRC operating subsidiaries, we may make loans to our PRCsubsidiaries, or we may make additional capital contributions to our PRC subsidiaries. Any loans to our PRC subsidiaries are subject to PRC regulations. Forexample, loans by us to our subsidiaries in China, which are FIEs, to finance their activities cannot exceed statutory limits and must be registered with the StateAdministration of Foreign Exchange, or SAFE. On August 29, 2008, SAFE promulgated Circular 142, a notice regulating the conversion by a foreigninvestedcompany of foreign currency into RMB by restricting how the converted RMB may be used. The notice requires that RMB converted from the foreign currencydenominated capital of a foreigninvested company may only be used for purposes within the business scope approved by the applicable governmental authorityand may not be used for equity investments within the PRC unless specifically provided for otherwise. The foreign currencydenominated capital shall be verified byan accounting firm before converting into RMB. In addition, SAFE strengthened its oversight over the flow and use of RMB funds converted from the foreigncurrencydenominated capital of a foreigninvested company. To convert such capital into RMB, the foreigninvested company must report the use of such RMB tothe bank, and the RMB must be used to the reported purposes. According to Circular 142, change of the use of such RMB without approval is prohibited. Inaddition, such RMB may not be used to repay RMB loans if the proceeds of such loans have not yet been used. Violations of Circular 142 may result in severepenalties, including substantial fines as set forth in the Foreign Exchange Administration Rules.We may also decide to finance our subsidiaries by means of capital contributions. These capital contributions may need approval from the PRC Ministry ofCommerce, or MOFCOM, or its local counterpart. We may not be able to obtain these government approvals on a timely basis, if at all, with respect to future capitalcontributions by us to our PRC subsidiaries. If we fail to receive such approvals in such cases when approval is required, our ability to use the proceeds of our May2010 public offering and to capitalize our PRC operations may be negatively affected, which could adversely affect our liquidity and our ability to fund and expandour business.Governmental control of currency conversion may affect the value of your investment.The PRC government imposes controls on the convertibility of the RMB into foreign currencies and, in certain cases, the remittance of currency out ofChina. We receive substantially all of our revenues in RMB. Under our current corporate structure, our income is primarily derived from dividend payments from ourPRC subsidiaries. Shortages in the availability of foreign currency may restrict the ability of our PRC subsidiaries to remit sufficient foreign currency to paydividends or other payments to us, or otherwise satisfy their foreign currency denominated obligations. Under existing PRC foreign exchange regulations, paymentsof current account items, including profit distributions, interest payments and expenditures from traderelated transactions, can be made in foreign currencieswithout prior approval from SAFE by complying with certain procedural requirements. However, approval from appropriate government authorities is required whereRMB is to be converted into foreign currency and remitted out of China to pay capital expenses such as the repayment of loans denominated in foreign currencies.The PRC government may also at its discretion restrict access in the future to foreign currencies for current account transactions. If the foreign exchange controlsystem prevents us from obtaining sufficient foreign currency to satisfy our currency demands, we may not be able to pay dividends in foreign currencies to ourshareholders, including holders of our ADSs or ordinary shares.12Fluctuation in the value of the RMB may have a material adverse effect on the value of your investment.The value of the RMB against the U.S. dollar and other currencies may fluctuate and is affected by, among other things, changes in political and economicconditions. On July 21, 2005, the PRC government changed its decadeold policy of pegging the value of the RMB to the U.S. dollar. Under the new policy, the RMBis permitted to fluctuate within a narrow and managed band against a basket of certain foreign currencies. This change in policy has resulted in an approximate26.8% appreciation of the RMB against the U.S. dollar between July 21, 2005 and September 30, 2015. Provisions on Administration of Foreign Exchange, asamended in August 2008, further changed China’s exchange regime to a managed floating exchange rate regime based on market supply and demand. Since reachinga high against the U.S. dollar in July 2008, however, the RMB has traded within a narrow band against the U.S. dollar, remaining within 1% of its July 2008 high butnever exceeding it. As a consequence, the RMB has fluctuated sharply since July 2008 against other freelytraded currencies, in tandem with the U.S. dollar. InAugust 2015, the PRC Government devalued its currency by approximately 3%, representing the largest yuan depreciation for 20 years. Concerns remain thatChina’s slowing economy, and in particular its exports, will need a stimulus that can only come from further cuts in the exchange rate.It is difficult to predict how long the current situation may continue and when and how it may change again as the People’s Bank of China may regularlyintervene in the foreign exchange market to achieve economic policy goals. Substantially all of our revenues and costs are denominated in the RMB, and asignificant portion of our financial assets are also denominated in RMB. We principally rely on dividends and other distributions paid to us by our subsidiaries inChina. Any significant revaluation of the RMB may materially and adversely affect our cash flows, revenues, earnings and financial position, and the value of, andany dividends payable on, our ADSs or ordinary shares in U.S. dollars. Any fluctuations of the exchange rate between the RMB and the U.S. dollar could also resultin foreign currency translation losses for financial reporting purposes.PRC laws and regulations governing our businesses. If we are found to be in violation of such PRC laws and regulations, we could be subject to sanctions. Inaddition, changes in such PRC laws and regulations may materially and adversely affect our business.There are substantial uncertainties regarding the interpretation and application of PRC laws and regulations, including, but not limited to, the laws andregulations governing our business. These laws and regulations are relatively new and may be subject to change, and their official interpretation and enforcementmay involve substantial uncertainty. The effectiveness of newly enacted laws, regulations or amendments may be delayed, resulting in detrimental reliance byforeign investors. New laws and regulations that affect existing and proposed future businesses may also be applied retroactively.The PRC government has broad discretion in dealing with violations of laws and regulations, including levying fines, revoking business and other licensesand requiring actions necessary for compliance. In particular, licenses and permits issued or granted to us by relevant governmental bodies may be revoked at a latertime by higher regulatory bodies. We cannot predict the effect of the interpretation of existing or new PRC laws or regulations on our businesses. We cannot assureyou that our current ownership and operating structure would not be found in violation of any current or future PRC laws or regulations. As a result, we may besubject to sanctions, including fines, and could be required to restructure our operations or cease to provide certain services. In addition, any litigation in China maybe protracted and result in substantial costs and diversion of resources and management attention. Any of these or similar actions could significantly disrupt ourbusiness operations or restrict us from conducting a substantial portion of our business operations, which could materially and adversely affect our business,financial condition and results of operations.13If we were required to obtain the prior approval of the China Securities Regulatory Commission, or CSRC, of the listing and trading of our ADSs on theNASDAQ Capital Market, we may face regulatory actions or other sanctions from the CSRC or other PRC regulatory agencies.On August 8, 2006, six PRC regulatory agencies, including the Ministry of Commerce, the State Assets Supervision and Administration Commission, theState Administration for Taxation, the State Administration for Industry and Commerce, the CSRC and the SAFE, jointly issued the Regulations on Mergers andAcquisitions of Domestic Enterprises by Foreign Investors, which became effective on September 8, 2006 (the “New M&A Rules”). This regulation, among otherthings, includes provisions that purport to require that an offshore special purpose vehicle formed for the purposes of overseas listing of equity interests in PRCcompanies and controlled directly or indirectly by PRC companies or individuals obtain the approval of the CSRC prior to the listing and trading of such specialpurpose vehicle’s securities on an overseas stock exchange. On September 21, 2006, the CSRC published on its official website procedures regarding its approval ofoverseas listings by special purpose vehicles. The CSRC approval procedures require the filing of a number of documents with the CSRC and it would take severalmonths to complete the approval process, if practicable at all. The application of this new PRC regulation remains unclear with no consensus currently existingamong leading PRC law firms regarding the scope of the applicability of the CSRC approval requirement. Prior to our May 2010 initial public offering, our PRC counsel has advised us that, based on its understanding of the current PRC laws and regulations aswell as the procedures announced on September 21, 2006: (i) Softech was directly incorporated by Topsky as a foreign investment enterprise under PRC law;therefore, there was no acquisition of the equity of a “PRC domestic company” as defined under the New M&A Rules; and (ii) the contractual arrangementsbetween Kingtone Information and Softech were not clearly defined and considered as the transaction which shall be applied to the New M&A Rules. Therefore, wedid not seek prior CSRC approval for our initial public offering.However, if the CSRC required that we obtain its approval prior to the completion of our initial public offering and the listing of our ADSs on the NASDAQCapital Market, we may face regulatory actions or other sanctions from the CSRC or other PRC regulatory agencies. These regulatory agencies may impose fines andpenalties on our operations in the PRC, limit our operating privileges in the PRC, delay or restrict the repatriation of the proceeds from our initial public offering intothe PRC, or take other actions that could have a material adverse effect on our business, financial condition, results of operations, reputation and prospects, as wellas the trading price of our shares.Also, if the CSRC requires that we obtain its approval, we may be unable to obtain a waiver of the CSRC approval requirements if and when procedures areestablished to obtain such a waiver. Any uncertainties and/or negative publicity regarding this CSRC approval requirement could have a material adverse effect onthe trading price of our shares.PRC regulations relating to the establishment of offshore special purpose companies by PRC residents may subject our PRC resident shareholders to penaltiesand limit our ability to inject capital into our PRC subsidiaries, limit our PRC subsidiaries’ ability to distribute profits to us, or otherwise adversely affect us.On October 21, 2005, the SAFE issued the Notice on Issues Relating to the Administration of Foreign Exchange in Fundraising and Reverse InvestmentActivities of Domestic Residents Conducted via Offshore Special Purpose Companies, or Notice 75, which became effective as of November 1, 2005. According toNotice 75, prior registration with the local SAFE branch is required for PRC residents to establish or to control an offshore company for the purposes of financingsuch offshore company with assets or equity interests in an onshore enterprise located in the PRC, or an offshore special purpose company. An amendment toregistration or filing with the local SAFE branch by such PRC resident is also required for the injection of equity interests or assets of an onshore enterprise in theoffshore special purpose company or overseas funds raised by such offshore company, or any other material change involving a change in the capital of theoffshore special purpose company. Moreover, Notice 75 applies retroactively. As a result, PRC residents who have established or acquired control of offshorespecial purpose companies that have made onshore investments in the PRC in the past are required to have completed the relevant registration procedures with thelocal SAFE branch by March 31, 2006. To further clarify the implementation of Notice 75, the SAFE issued Circular 106 on May 29, 2007. Under Circular 106, PRCsubsidiaries of an offshore special purpose company are required to coordinate and supervise the filing of SAFE registrations by the offshore holding company’sshareholders or beneficial owners who are PRC residents in a timely manner.14Some of our current shareholders and/or beneficial owners may fall within the ambit of the SAFE notice and be required to register with the local SAFEbranch as required under the SAFE notice. If so required, and if such shareholders and/or beneficial owners fail to timely register their SAFE registrations pursuantto the SAFE notice, or if future shareholders and/or beneficial owners of our company who are PRC residents fail to comply with the registration procedures setforth in the SAFE notice, this may subject such shareholders, beneficial owners and/or our PRC subsidiaries to fines and legal sanctions and may also limit ourability to contribute additional capital into our PRC subsidiaries, limit our PRC subsidiaries’ ability to distribute dividends to our company, or otherwise adverselyaffect our business.Risks Associated with our ADSs and Ordinary SharesOur securities are not currently traded on any United States public markets and you may not be able to resell your securities for some time.There is currently no public market for our ordinary shares or American Depository Shares (“ADSs”) in the United States or in any other jurisdiction. OurADSs were voluntarily delisted from the NASDAQ Capital Market on September 19, 2018. We have applied to NASDAQ for the listing of our ordinary shares on theNASDAQ Capital Market and received an approval for listing of Ordinary Shares on August 6, 2018, and as of the date of this transition report, that application andapproval are currently under review. We cannot assume that our ordinary shares will be accepted for listing on the NASDAQ Capital Market, or if listed, that wewould continue to meet the applicable minimum listing requriements. You may not be able to sell your ordinary shares quickly or at all if we are unable to gain listingon a public market in the United States.The market price of our ADSs has historically been highly volatile, and you may not be able to resell our ordinary shares at or above your initial purchaseprice.There may be a limited public market for our ordinary shares and, as discussed above, our ADSs are no longer listed on any public market in the UnitedStates or any other jurisdiction. We cannot assure you that there will be an active trading market for our ordinary shares in the future. If our ordinary shares areaccepted for listing on a public market, you may not be able to sell your ordinary shares quickly or at the market price if trading in our ordinary shares is not active. The trading price of our ADSs and ordinary shares may be volatile. The price of our ADSs and ordinary shares could be subject to wide fluctuations inresponse to a variety of factors, including the following:1.Introduction of new products, services or technologies offered by us or our competitors;2.Failure to meet or exceed revenue and financial projections we provide to the public;3.Actual or anticipated variations in quarterly operating results;4.Failure to meet or exceed the estimates and projections of the investment community;5.General market conditions and overall fluctuations in United States equity markets;6.Announcements of significant acquisitions, strategic partnerships, joint ventures or capital commitments by us or our competitors;7.Disputes or other developments relating to proprietary rights, including patents, litigation matters and our ability to obtain patent protection for ourtechnologies;8.Additions or departures of key management personnel;9.Issuances of debt or equity securities;10.Significant lawsuits, including patent or shareholder litigation;11.Changes in the market valuations of similar companies;12.Sales of additional ordinary shares or other securities by us or our shareholders in the future;13.Trading volume of our ordinary shares;14.Fluctuations in the exchange rate between the U.S. dollar and Renminbi;15.Negative market perception and media coverage of our company or other companies in the same or similar industry with us; and16.Other events or factors, many of which are beyond our control.15In addition, the stock market in general, and the NASDAQ Capital Market and software products and services companies in particular, have experiencedextreme price and volume fluctuations that have often been unrelated or disproportionate to the operating performance of these companies. Broad market andindustry factors may negatively affect the market price of our ordinary shares, regardless of our actual operating performance. Our ADSs and ordinary shares may be subject to the SEC’s penny stock rules which may make it difficult for brokerdealers to complete customer transactionsand trading activity in our securities.Our ADSs and ordinary shares may be deemed to be “penny stock” as that term is defined under the Securities Exchange Act of 1934, as amended. Pennystocks generally are equity securities with a price of less than $5.00 (other than securities registered on certain national securities exchanges or quoted on theNASDAQ system, provided that current price and volume information with respect to transactions in such securities is provided by the exchange or system). Pennystock rules impose additional sales practice requirements on brokerdealers who sell to persons other than established customers and “accredited investors.” Theterm “accredited investor” refers generally to institutions with assets in excess of $5,000,000 or individuals with a net worth in excess of $1,000,000 or annual incomeexceeding $200,000 or $300,000 jointly with their spouse in each of the prior two years.The penny stock rules require a brokerdealer, prior to a transaction in a penny stock not otherwise exempt from the rules, to deliver a standardized riskdisclosure document in a form prepared by the SEC, which provides information about penny stocks and the nature and level of risks in the penny stockmarket. Moreover, brokerdealers are required to determine whether an investment in a penny stock is a suitable investment for a prospective investor. A brokerdealer must receive a written agreement to the transaction from the investor setting forth the identity and quantity of the penny stock to be purchased. Theserequirements may make it more difficult for brokerdealers to effectuate customer transactions and trading activity in our securities. As a result, the market price ofour ADSs and ordinary shares may be depressed, and you may find it more difficult to sell our ADSs or ordinary shares.Sales of a substantial number of ordinary shares or ADSs in the public market by our existing shareholders could cause the price of our ADSs to fall.Sales of a substantial number of our ordinary shares or ADSs in the public market or the perception that these sales might occur, could depress the marketprice of our ADSs and could impair our ability to raise capital through the sale of additional equity securities. We are unable to predict the effect that sales may haveon the prevailing market price of our ADSs.All of our existing shareholders prior to our May 2010 offering were subject to lockup agreements with the underwriters of the offering that restricted theshareholders’ ability to transfer ordinary shares or ADSs until expiration of the lockup period in November 2010. The lockup agreements limited the number ofordinary shares or ADSs that may be sold immediately following the public offering. Subject to certain limitations, approximately 1,000,000 of our total outstandingshares are now eligible for sale. Sales of ordinary shares by these shareholders could have a material adverse effect on the trading price of our ADSs.Future sales and issuances of our ordinary shares, or rights to purchase our ordinary shares, including pursuant to our 2010 Omnibus Incentive Plan, couldresult in additional dilution of the percentage ownership of our shareholders and could cause the price of our ordinary shares to fall.We expect that significant additional capital will be needed in the future to continue our planned operations. To the extent we raise additional capital byissuing equity securities, our shareholders may experience substantial dilution. We may sell ordinary shares, convertible securities or other equity securities in oneor more transactions at prices and in a manner we determine from time to time. If we sell ordinary shares, convertible securities or other equity securities in more thanone transaction, investors may be materially diluted by subsequent sales. Such sales may also result in material dilution to our existing shareholders, and newinvestors could gain rights superior to our existing shareholders.16We do not intend to pay dividends on our ordinary shares, so any returns will be limited to the value of our ADSs and ordinary shares.We have never declared or paid any cash dividend on our ordinary shares. We currently anticipate that we will retain future earnings for the development,operation and expansion of our business and do not anticipate declaring or paying any cash dividends for the foreseeable future. Any return shareholders willtherefore be limited to the value of their ADSs or ordinary shares.As the rights of shareholders under British Virgin Islands law differ from those under U.S. law, you may have fewer protections as a shareholder.Our corporate affairs will be governed by our memorandum of association and articles of association, the BVI Business Companies Act, 2004, or the BVIAct, of the British Virgin Islands and the common law of the British Virgin Islands. The rights of shareholders to take legal action against our directors, actions byminority shareholders and the fiduciary responsibilities of our directors under British Virgin Islands law are to a large extent governed by the BVI Act and thecommon law of the British Virgin Islands. The common law of the British Virgin Islands is derived in part from comparatively limited judicial precedent in the BritishVirgin Islands as well as from English common law, which has persuasive, but not binding, authority on a court in the British Virgin Islands. The rights of ourshareholders and the fiduciary responsibilities of our directors under British Virgin Islands law are not as clearly established as they would be under statutes orjudicial precedents in some jurisdictions in the United States. In particular, the British Virgin Islands has a less developed body of securities laws as compared to theUnited States, and some states (such as Delaware) have more fully developed and judicially interpreted bodies of corporate law.As a result of all of the above, holders of our ADSs and ordinary shares may have more difficulty in protecting their interests through actions against ourmanagement, directors or major shareholders than they would as shareholders of a U.S. company.British Virgin Islands companies may not be able to initiate shareholder derivative actions, thereby depriving shareholders of the ability to protect theirinterests.British Virgin Islands companies may not have standing to initiate a shareholder derivative action in a federal court of the United States. The circumstancesin which any such action may be brought, and the procedures and defenses that may be available in respect to any such action, may result in the rights ofshareholders of a British Virgin Islands company being more limited than those of shareholders of a company organized in the United States. Accordingly,shareholders may have fewer alternatives available to them if they believe that corporate wrongdoing has occurred. The British Virgin Islands courts are alsounlikely to recognize or enforce against us judgments of courts in the United States based on certain liability provisions of U.S. securities law; and to imposeliabilities against us, in original actions brought in the British Virgin Islands, based on certain liability provisions of U.S. securities laws that are penal in nature.There is no statutory recognition in the British Virgin Islands of judgments obtained in the United States, although the courts of the British Virgin Islands willgenerally recognize and enforce the nonpenal judgment of a foreign court of competent jurisdiction without retrial on the merits.The laws of the British Virgin Islands provide little protection for minority shareholders, so minority shareholders will have little or no recourse if theshareholders are dissatisfied with the conduct of our affairs.Under the law of the British Virgin Islands, there is little statutory law for the protection of minority shareholders other than the provisions of the BVI Actdealing with shareholder remedies. The principal protection under statutory law is that shareholders may bring an action to enforce the constituent documents ofthe corporation, our memorandum of association and articles of association. Shareholders are entitled to have the affairs of the company conducted in accordancewith the general law and the memorandum of association and articles of association.17There are common law rights for the protection of shareholders that may be invoked, largely dependent on English company law, since the common law ofthe British Virgin Islands is limited. Under the general rule pursuant to English company law known as the rule in Foss v. Harbottle, a court will generally refuse tointerfere with the management of a company at the insistence of a minority of its shareholders who express dissatisfaction with the conduct of the company’s affairsby the majority or the board of directors. However, every shareholder is entitled to have the affairs of the company conducted properly according to law and thecompany’s constituent documents. As such, if those who control the company have persistently disregarded the requirements of company law or the provisions ofthe company’s memorandum of association and articles of association, then the courts will grant relief. Generally, the areas in which the courts will intervene are thefollowing: (1) an act complained of which is outside the scope of the authorized business or is illegal or not capable of ratification by the majority; (2) acts thatconstitute fraud on the minority where the wrongdoers control the company; (3) acts that infringe on the personal rights of the shareholders, such as the right tovote; and (4) where the company has not complied with provisions requiring approval of a majority of shareholders, which are more limited than the rights affordedminority shareholders under the laws of many states in the United States.Antitakeover provisions in our memorandum of association and articles of association and our right to issue preference shares could make a thirdpartyacquisition of us difficult.Some provisions of our memorandum of association and articles of association may discourage, delay or prevent a change in control of our company ormanagement that shareholders may consider favorable, including provisions that authorize our board of directors to issue preference shares in one or more seriesand to designate the price, rights, preferences, privileges and restrictions of such preference shares.If you hold our ADSs, you may not have the same voting rights as the holders of our ordinary shares and must act through the depositary to exercise your rights.Holders of our ADSs will not be able to exercise voting rights attaching to the shares evidenced by our ADSs on an individual basis. Holders of our ADSswill appoint the depositary or its nominee as their representative to exercise the voting rights attaching to the shares represented by the ADSs. You may not receivevoting materials in time to instruct the depositary to vote, and it is possible that you, or persons who hold their ADSs through brokers, dealers or other third parties,will not have the opportunity to exercise a right to vote. Upon our written request, the depositary will mail to you a shareholder meeting notice which contains,among other things, a statement as to the manner in which your voting instructions may be given, including an express indication that such instructions may begiven or deemed given to the depositary to give a discretionary proxy to a person designated by us if no instructions are received by the depositary from you on orbefore the response date established by the depositary. However, no voting instruction shall be deemed given and no such discretionary proxy shall be given withrespect to any matter as to which we inform the depositary that (i) we do not wish such proxy given, (ii) substantial opposition exists, or (iii) such matter materiallyand adversely affects the rights of shareholders. We will make all reasonable efforts to cause the depositary to extend voting rights to you in a timely manner, butyou may not receive the voting materials in time to ensure that you can instruct the depositary to vote your ADSs. Furthermore, the depositary and its agents willnot be responsible for any failure to carry out any instructions to vote, for the manner in which any vote is cast or for the effect of any such vote. As a result, youmay not be able to exercise your right to vote and you may lack recourse if your ADSs are not voted as you requested. In addition, in your capacity as an ADSholder, you will not be able to call a shareholders’ meeting.You may not be able to participate in rights offerings and may experience dilution of your holdings as a result.We may from time to time distribute rights to our shareholders, including rights to acquire our securities. However, we may not, and under the depositagreement for the ADSs, the depositary will not, offer those rights to ADS holders unless both the rights and the underlying securities to be distributed to ADSholders are registered under the Securities Act, or the distribution of them to ADS holders is exempted from registration under the Securities Act with respect to allholders of ADSs. We are under no obligation to file a registration statement with respect to any such rights or underlying securities or to endeavor to cause such aregistration statement to be declared effective. In addition, we may not be able to rely on an exemption from registration under the Securities Act to distribute suchrights and securities. Accordingly, holders of our ADSs may be unable to participate in our rights offerings and may experience dilution in their holdings as a result.You may be subject to limitations on transfer of your ADSs.Your ADSs are transferable on the books of the depositary. However, the depositary may close its transfer books at any time or from time to time when itdeems expedient in connection with the performance of its duties. In addition, the depositary may refuse to deliver, transfer or register transfers of ADSs generallywhen our books or the books of the depositary are closed, or at any time if we or the depositary deem it advisable to do so because of any requirement of law or ofany government or governmental body, or under any provision of the deposit agreement, or for any other reason.18We may be a passive foreign investment company, of PFIC, which could lead to additional taxes for U.S. holders of our ADSs or ordinary shares.We do not expect to be, for U.S. federal income tax purposes, a passive foreign investment company, or a PFIC, which is a foreign company for which, inany given taxable year, either at least 75% of its gross income is passive income, or investment income in general, or at least 50% of its assets produce or are held toproduce passive income, for the current taxable year, and we expect to operate in such a manner so as not to become a PFIC for any future taxable year. However,because the determination of PFIC status for any taxable year cannot be made until after the close of such year and requires extensive factual investigation,including ascertaining the fair market value of our assets on a quarterly basis and determining whether each item of gross income that we earn is passive income, wecannot assure you that we will not become a PFIC for the current taxable year or any future taxable year. If we are or become a PFIC, a U.S. holder of our ADSs orordinary shares could be subject to additional U.S. federal income taxes on gain recognized with respect to the ADSs or ordinary shares and on certain distributions,plus an interest charge on certain taxes treated as having been deferred under the PFIC rules. Noncorporate U.S. holders will not be eligible for reduced rates oftaxation on any dividends received from us if we are a PFIC in the taxable year in which such dividends are paid or in the preceding taxable year.If our ordinary shares are listed on the NASDAQ Capital Market and the trading price of our ordinary shares fails to comply with the continued listingrequirements of the NASDAQ Capital Market, we would face possible delisting, which would result in a limited public market for our ordinary shares andmake obtaining future debt or equity financing more difficult for us.Companies listed on NASDAQ are subject to delisting for, among other things, failure to maintain a minimum closing bid price of $1.00 per share for 30consecutive business days. On December 19, 2011, we received a letter from NASDAQ indicating that for the last 30 consecutive business days, the closing bidprice of our ADSs fell below the minimum $1.00 per share requirement pursuant to NASDAQ Listing Rule 5550(a)(2) for continued listing on the NASDAQ CapitalMarket. We regained compliance with the minimum bid price requirement for continued listing set forth in NASDAQ Listing Rule 5550(a)(2), as its ADS with itsunderlying ordinary share has achieved a closing bid price of $1.00 or greater for the 10 consecutive business days from November 6 to November 23, 2012 byimplementing a 1for10 combination, or reverse split of the ordinary shares effective November 6, 2012. When listed, we cannot be sure that the price of our ordinaryshares will comply with this requirement for continued listing on the NASDAQ Capital Market in the future. If we were not able to do so, our ordinary shares wouldbe subject to delisting and would likely trade on the overthecounter market. If our ordinary shares were to trade on the overthecounter market, selling ourordinary shares could be more difficult because smaller quantities of shares would likely be bought and sold, transactions could be delayed, and security analysts’coverage of us may be reduced. In addition, brokerdealers have certain regulatory burdens imposed upon them, which may discourage brokerdealers from effectingtransactions in our ordinary shares, further limiting the liquidity of our ordinary shares. As a result, the market price of our ordinary may be depressed, and you mayfind it more difficult to sell our ordinary shares. Such delisting from the NASDAQ Capital Market and continued or further declines in our share price could alsogreatly impair our ability to raise additional necessary capital through equity or debt financing.ITEM 4. INFORMATION ON THE COMPANY.A . HISTORY AND DEVELOPMENT OF THE COMPANY.OverviewWe are a holding company and conduct our operations through our whollyowned subsidiary named LK Technology Ltd., a British Virgin Islands limitedliability company (“LK Technology”), and its whollyowned subsidiaries, MMB Limited and Mobile Media (China) Limited and their respective subsidiaries, whichhold the rights to deploy WiFi systems on about 700 trains in China, including 290 trains in which WiFi systems have already been installed and are in operation. InMay 2010, we consummated an initial public offering of our American Depository Shares, or ADSs, for gross proceeds of $16 million, and our ADSs were listed onthe NASDAQ Capital Market under the ticker symbol “KONE”. Our ordinary shares are not currently listed on any trading market. Our American Depository Shares(“ADSs”) were voluntarily delisted from the NASDAQ Capital Market on September 19, 2018. We have applied to NASDAQ for the listing of our ordinary shares onthe NASDAQ Capital Market and received an approval for listing of Ordinary Shares on August 6, 2018, and as of the date of this transition report, that applicationand approval are currently under review.19On August 17, 2018, we consummated an asset exchange transaction, pursuant to which we exchanged all issued and outstanding capital stock in TopskyInfoTech Holdings Pte Ltd., the parent of Softech, for the issued and outstanding capital stock of LK Technology (the “Asset Exchange”). In connection with theAsset Exchange, we changed our name on August 20, 2018, and on September 20, 2018, issued to the shareholders of C Media Limited, the former parent of LKTechnology, (i) 185,412,599 of our ordinary shares, par value $0.01 per share and (ii) 1,000,000 of our preferred shares. Upon the consummation of the AssetExchange, we ceased our previous business operations and became a company focused on the provision of WiFi and mobile application products for long distancerail travelers in China.On August 25, 2018, LK Technology entered into a Stock Purchase Agreement (the “Agreement”) with the shareholders (“Shareholders”) of SuperengineHoldings Limited, a limited liability company organized under the laws of the British Virgin Islands (the “Superengine”), pursuant to which LK Technology acquiredall of the issued and outstanding capital stock of Superengine for an aggregate purchase price of US$60 million (the “Purchase Price”), which are paid by theissuance of our Ordinary Shares in an amount equal to the quotient of (x) the Purchase Price divided by (y) the average of the closing prices of the Ordinary Shareson the NASDAQ Capital Market over the 12 months period preceding July 31, 2018. We are a party to the Agreement in connection with the issuance of theOrdinary Shares and certain other limited purposes.Corporate InformationOur principal executive offices are located at LAB32, SOHO 3Q, No 9, Guanghua Road, Chaoyang District, Beijing, People’s Republic of China 100020. Ourwebsite is www.luokung.com. We routinely post important information on our website. The information contained on our website is not a part of this transitionreport.Our agent for service of process in the United States is Worldwide Stock Transfer, LLC, the current transfer agent of the Company, with a mailing address ofOne University Plaza, Suite 505, Hackensack, New Jersey 07601.B. BUSINESS OVERVIEW.We are a Chinabased provider of rail WiFi and mobile application products for long distance travelers in China. Our primary mobile application, theLuoKuang platform, consists of the LuoKuang mobile applications, a series of supporting software at the server end, and railWiFi hardware and equipment on thetrains that we serve. The LuoKuang platform incorporates technology covered by 22 patents and about 34 software copy rights, and serves as a content and servicedistribution platform that is tailored for particular travel stages featuring geographic location and social interaction. The content and services distributed byLuoKuang contain information, entertainment, travel, ecommerce, online to offline (“O2O”), advertisement and marketing features.LuoKuang mainly provides personalized and precise services to long distance travelers in two locations: on the train and at the destination. Based on thetravel environment, the core elements of our users’ needs include staving off boredom on trains and discovering and exploring new locations upon arrival. The mainservices contain entertainment services (videos and audio, digital readings, games specific and tailored to the travel stage) and social services (satisfying thedemand for value discovery of unfamiliar destinations through social interaction among strangers based on locations). As of December 31, 2017, the LuoKuangplatform featured about 38 million users.The setting services on the train focus on providing entertainment content for passengers to pass time during longdistance travel in closed environments.For example, we provide access to long video formats such as movies and TV shows, short videos, music, digital readings and games.20We use the most valuable WiFi location—the train WiFi setting—as the entrance of our LuoKuang platform and mobile applications. Passengers typicallyride trains for longdistance and interprovincial travel purposes. The long periods of monotonous journeys and the cost concerns for roaming traffic fees enable thecombination of entertainment content service needs and WiFi access needs. Our railWiFi becomes a valuable and sophisticated WiFi service in this setting—notjust WiFi connection service, but a provider of sophisticated services through a WiFi connection. In addition, the annual traffic of 800,000 passengers onboardeach train makes rail WiFi a huge entry point for mobile applications. We do not define ourselves as a train WiFi communication service operator but as a longdistance travel mobile service provider. We provide users with free WiFi access so that users are able to connect to the LuoKuang platform and thus access relatedentertainment services, services on the train and destination services. The rail WiFi is our access point to a significant pool of users and the entrance to acquiringadditional users.The setting services focus on providing targeted push services to users while travelling in unfamiliar cities. Information and service guidance are preciselypushed to appeal to the interests and tastes (eating, drinking, shopping, touring and culture) of individual users (cuisine specialties and local snacks, local events,viewing sights, culture, history, stories). The service guidance is generated, shared and distributed by individual users (travelers, local residents, local businesses)interacting with current locations and featuring users who generated contents from selfmedia and small and medium vertical contents providers).Based on the GIS (geoinformation system), Superengine is a provider of big spatialtemporal data, network graphic image technology and relevant service.Its super engine series includes computer graphic image engines and spatial database engines. Spatialtemporal cloud index is the core of the company’s spatialtemporal data engines. It is equivalent to the neural network of the big data and the Internet. It extends the value of its products and platform to its data serviceproviders. In cooperation, its service providers can be divided into three categories, namely, basic geographic data providers, industrial data providers andbehavioral data providers). Superengine’s industriesoriented spatialtemporal data engine was launched in 2016. The spatialtemporal GIS platform has been appliedin industries such as aerospace, power grid, surveying & mapping, agriculture, cultural relic preservation, water conservancy, public security, railway section, smartcities, and business location selection.Our primary sources of revenue are advertising and marketing promotion revenues.Our Industry — Mobile Internet IndustryOur products and services are engaged in the mobile internet industry. Our main services consist of entertainment services (videos, audio, digital readings,games that are tailormade for passengers on train) and other services including satisfying the demand for value discovery of unfamiliar destinations through socialinteractions among strangers based in such locations). The mobile internet industry in China is rapidly growing and is likely to be in a longterm growth trend.According to the Mobile Internet Blue Book of China Mobile Internet Report, in 2017 the market size of China mobile internet reached RMB 605 billion. Now China isin a leading position in terms of smartphone, mobile communication network and mobile application services. The pool of users is anticipated to keep expandingthrough the promotion and popularization of smartphones and the expansion of the mobile internet market.Video is the leading online entertainment format in China. According to the iResearch Report, over 80% of total time spent by users on online entertainmentin China in 2016 was internet video. Online entertainment, especially internet video, is attractive to Chinese users due to many favorable factors, including easyaccessibility, wide content selection, and innovative platforms with social features.For 2017, the transaction volume of China mobile ecommerce market reached to over RMB 4 trillion according to the China Mobile Ecommerce IndustryResearch Report from iResearch, representing an increase of 19.1%. For the next few years, China mobile online shopping will likely maintain steady growth. Thefocal point of competition in China mobile ecommerce market has shifted from infrastructure service providers to integrated and accurate services providers.Drawing in users with compelling content in diversified scenes has become a trend.21The revenue for China mobile gaming industry reached RMB 144.58 billion for the year of 2017, according to the China Mobile Game Industry ResearchReport from iResearch. With increased investment by largescale enterprises in the sector of mobile games and the strict enforcement of the mobile game industryrelated regulatory policy guidelines, the mobile game market as a whole will become more organized and standardized.According to the Annual Analysis of China Mobile Reading Industry from Analysis, for the year of 2017, the mobile reading market in China reached toRMB 14.04 billion. By the end of 2016, the size of China mobile's reading market reached RMB 11.86 billion, showing an increase of 18.38% in 2017.The closed and boring environment for passengers of longdistance travel and high roaming charges lead to a strong demand to use our rail WiFi services.Passengers, through their own mobile phone, have access to the free WiFi network in each carriage, access to our rich mobile internet entertainment content andtravel services. According to the annual statistical bulletin of China Railway Corporation in 2017, there were about 6,030 trains in operation in China in 2017,consisting of 2,935 high speed trains and 3,095 express trains. The rail WiFi system that we have installed are currently all on express trains. The market value will bemultiplied several times following the extended coverage of service on other trains.Our StrengthsWe believe the following strengths differentiate us from our competitors:Our strategy is to build up personalized and targeted service products for travelers through rail WiFi networks, enabling our services to evolve into a coredriving distribution platform that provides content, news, games, ecommerce, OTO service, travel services and advertising and marketing. In comparison, ourcompetitors offer simple forms of media services on trains. We focus on personalized and targeted matching between users on long distance trips and services. Ourcompetitors focus on operating and generating internet traffic.We possess a complete set of technology system including network, client end and service and operation platform. We have patent protections for WiFiequipment on trains. Our technology strengths are briefly summarized below.WiFi EquipmentPatent protected. Supports WiFi/3G/4G telecom modules; 4 core CPU with X86 architecture, and SSD hard disk with big storage for localcontents.InfrastructureThe technology infrastructures include the application program system, big data gathering and processing systems, intelligence cloudsservice deployment structure systems and our WiFi hardware server deployment structure system. The operation center, big data center,contents center and railWiFi server system are built on this infrastructure. On the above layer, the equipment management platform,account and payment platform, contents management platform and advertisement distribution platform are set up for daily managementpurpose.LuoKuang strengthens the connection of services among people, setting and locations. In catering to people on the move, we anticipate strengthening therelationship between users and their locations in a given moment. Currently, LuoKuang provides the link between users and thirdparty service providers andprovides value added services to both users and thirdparty service providers. The connection is not simply a traffic diversion, but also the direct presentation ofrelevant services in the LuoKuang platform. The open API interface and independent product software package allows easy access by service providers anddevelopers and supports data service, advertisement operations, billing, users promotion and product marketing services. As an API product, LuoKuang does notcreate content or services. The content and services are provided by our partners in the LuoKuang platform. Now, the majority of top mobile internet content andservices providers in China have a presence in the Luokuang platform. Those include, but are not limited to, Toutiao, Wangyi News, iqiyi, Letv, YoudianCinema(Hollywood films), Sohu video, Phoenix Video, Kugou Music, FM Qingting, iReader, Baidu Literature, Phoenix Novel, Baidu Game, Meituan, Dianping, andsimilar content providers.22Our StrategyLuoKuang is positioned to provide API interface services and geographic information social services. The API interface services are provided within thetypical BC model. LuoKuang pushes the content and services from thirdparty service providers to users. The local businesses, service practitioners, residents, andforeign travelers are all defined as a “user” and may participate in social interactions based on local value information and generate UGC content. The socalled localvalue information is defined as information, views, evaluations, experiences and experience sharing related to the local cultural scene, native products,entertainment, food, tourism and activities.The LuoKuang user growth strategy is to have access to users through the travelers’ use of mobile devices in connection with longdistance train travel.Through deploying WiFi systems on trains and providing free WiFi access to passengers, LuoKuang is able to have consistent access to longdistance travelers.The WiFi system on the train has become a powerful user portal at the early stage of LuoKuang and has gained substantial user traffic. We are in a leading positionin terms of numbers of trains contracted and trains in operation with our free WiFi system. We have contracted with about 700 trains, which cover almost 560 millionannual passenger trips. As of the date of this report, approximately 290 trains are operating our rail WiFi system. We will continue to install our rail WiFi system inthe following years.The development strategy for LuoKuang encompasses the following:1.Enhance our local cycle service (a recommendation service system based on the location of travelers after their arrival, recommendations includingtourist attractions, local specialties and other items of interest), strengthen services for arrivals in the form of social interaction and focus on the valueof relationships between users and their current locations.2.Focus on the development of geographic positioning technology. Get the business of local cycle and users on train mixed together. We will put oureffort to maximize the synergy effect.3.Big Data: Behavior data about passenger trips is obtained via the traffic entrance of rail WiFi and these data will help to optimize our product.4.While enhancing setting service experiences and optimizing entertainment experiences, we will enrich ecommerce services on trains featuringrecommendations of customized products and ecommerce shopping guidance of products labeled with specific geographic location (and trafficdiversion).5.Focus on API positioning and attract more premium vertical service providers (contents and services).Intellectual PropertyWe have registered the following software copyrights, patents and trademarks for our business operations. We believe this intellectual property forms anintegral part of our competitive strength.23Patents:We have been granted some inventions by the State Intellectual Property Office of PRC. We possess a complete set of technology system includingnetwork, client end and service and operation platform. We have patent protections for WiFi equipment on trains. We have received the following patents:No.Name of patentTypeRegistrationNumberDate of Insurance1.Wireless communication multimedia chip business consumer informationacquisition terminal deviceInventionZL 2010 2 0528767.9Sep 21, 20112.A user behavior processing method and device for intelligent terminalInventionZL 2013 1 0301728.3May 27, 20153.A global positioning system terminal deviceInventionZL 2010 2 0253452.8Nov 7, 20114.A wireless multimedia serverInventionZL 2013 2 0220183.9Nov 13, 20135.Ordering system of passengers on trainInventionZL 2015 2 0095381.6Aug 5, 20156.A wireless multimedia serverInventionZL 2015 2 0201382.4Oct 28, 20157.An antenna structureInventionZL 2016 2 0424352.4Mar 1, 20178.Spatial data progressive transmission method and deviceInvention201010617383.9Jun 15, 20169.Methods and devices for conflict detection and avoidance of spatial entity elementlabelingInvention201010617385.8Mar 26, 201410.Spatial data processing method and deviceInvention201010617399.XJun 26, 201311.Method and device of spatial data simplificationInvention201010617400.9Mar 13, 201312.Method and device for judging the occlusion type of space entityInvention201010617403.2Sep 25, 201313.A method and device for distributed mapping of 3d model dataInvention201110274924.7Mar 26, 201414.Data simplification of 3d model, gradual transmission method and deviceInvention201110275336.5Mar 25, 201515.Spatial data transmission method and deviceInvention201110306393.5Dec 13, 201416.Methods and devices for spatial data processing, simplification and progressivetransmissionInvention201210104250.0Jun 10, 201517.Spatial data progressive transmission method and deviceInvention201310367021.2Jun 23, 201718.Simplification method and device of spatial dataInvention201310367128.7Sep 22, 201719.The method and device to accelerate transmission and display of graphic dataacross platformsInvention201210116149.7Aug 10, 201620.Methods and devices related to spatial data compression, decompression andprogressive transmissionInvention201310136682.4Nov 10, 2017We also have two patents outside of China.No.Name of patentCountryNationalRegistrationNumberDate ofInsurance1.Spatial data processing method and deviceJapan2012547439Jun 20, 20142.Methods and devices related to spatial data compression, decompression andprogressive transmissionU.S.A14/394,610Sep 5, 201724Software Copyrights:We have received the following software copyrights from the National Copyright Administration (“NCA”) of PRC:No.Name of CopyrightAchievement approachRegistration numberTime of obtainExpire time1.WAP PUSH Business operation platformsystemIndependent research anddevelopment2007SRBJ1464Jul 23, 200750 years2.TDSCDMA Streaming media businessmanagement platform software V1.0Independent research anddevelopment2009SRBJ0412Jan 22, 200950 years3.Content management platform systemsoftware V1.0Independent research anddevelopment2009SRBJ1374Apr 1, 200950 years4.Mobile multimedia broadcast electronicservice guide system software V1.0Independent research anddevelopment2009SRBJ1365Apr 1, 200950 years5.Mobile video business operation platformsystem V1.0Independent research anddevelopment2007SRBJ1463Jul 23, 200750 years6.Mobile multimedia broadcast emergencybroadcast platform software V1.0Independent research anddevelopment2010SRBJ0720Mar 5, 201050 years7.Mobile multimedia broadcast audio richmedia interactive platform softwareV1.0Independent research anddevelopment2010SRBJ0719Mar 5, 201050 years8.Printer typesetting and printing softwareV1.0Independent research anddevelopment2011SRBJ4190Sep 28, 201150 years9.Electronic newspaper business supportplatform software V1.0Independent research anddevelopment2011SRBJ4186Sep 28, 201150 years10.Public information business platformsoftware V1.0Independent research anddevelopment2011SRBJ3810Sep 27, 201150 years11.User interface scripting software V1.0Independent research anddevelopment2011SRBJ3809Sep 27, 201150 years12.Integrated business management platformsoftware V1.0Independent research anddevelopment2012SR003002Jan 16, 201250 years13.Interactive business development platformsoftwareIndependent research anddevelopment2011SRBJ4593Nov 29, 201150 years14.Instant messaging and messaging systemsoftwareIndependent research anddevelopment2014SR122231Aug 5, 201450 years15.General statistical platform software forclient productsIndependent research anddevelopment2014SR216662Dec 30, 201450 years16.CMMB Data broadcast managementplatform softwareIndependent research anddevelopment2009SRBJ0391Jan 22, 200950 years17.Integrated passenger train service systemIndependent research anddevelopment2012SR083665Sep 5, 201250 years25No.Name of CopyrightAchievement approachRegistration numberTime of obtainExpire time18.JHBY Train inspection managementsystemIndependent research anddevelopment2013SR015105Feb 21, 201350 years19.Integrated information engine platformsoftware V1.0Independent research anddevelopment2014SR040347Nov 30, 200150 years20.Super information engine developmentplatform software V5.0Independent research anddevelopment2014SR036792Mar 5, 200350 years21.Core map super network informationengine platform software V1.0Independent research anddevelopment2014SR036772Sep 15, 200750 years22.Integrated management of the grid gissoftware V1.0Independent research anddevelopment2014SR036808Jun 20, 200850 years23.Core map rural power grid equipment GPSpatrol system software V1.0Independent research anddevelopment2014SR036810Dec 10, 200850 years24.Diagram grid patrol PDA system softwareV1.0Independent research anddevelopment2014SR036778Dec 12, 200850 years25.Core map geographic information enginedesktop platform software V1.0Independent research anddevelopment2014SR036614Jan 15, 200950 years26.Integrated management of the gridgeographic information Web systemsoftware V1.0Independent research anddevelopment2014SR036799Mar 10, 200950 years27.Core map railway power supply equipmentGPS patrol system software V1.0Independent research anddevelopment2014SR036783Mar 25, 201050 years28.Core map network 3 d map server softwareV1.0Independent research anddevelopment2014SR036788Feb 20, 201150 years29.Core map network 3d map clientsoftwareV1.0Independent research anddevelopment2014SR036637Feb 22, 201150 years30.Core map 3d map network publishingplatform software V1.0Independent research anddevelopment2014SR036633Mar 10, 201150 years31.Core map 3d map network release pluginsystem software V1.0Independent research anddevelopment2014SR036622Mar 15, 201150 years32.Core map network 3d map smartphoneplatform software V1.0Independent research anddevelopment2014SR036638Apr 28, 201150 years33.Core map network GIS Shared mobileplatform software V1.0Independent research anddevelopment2014SR036634Oct 31, 201150 years34.Core map network GIS sharing platformsoftware V1.0Independent research anddevelopment2014SR036639Dec 16, 201150 yearsTrademarks:We have registered the following trademarks with the Trademark Office, State Administration for Industry and Commerce in the PRC:NoTrademarkClassification NumberValid PeriodRegistration Number1Y图形382010.04.212020.04.2067460692Y图形412010.09.072020.09.0667460673YRADIO文字352010.07.212020.07.2067334374YRADIO文字382010.04.21.2020.04.2067334385YRADIO文字412010.09.072020.09.0667334396LookLook图形382009.04.072019.04.0646660517LookLook图形422008.12.212018.12.2046660508YTV文字352010.07.212020.07.2067335799YTV文字382010.05.282020.05.27673357810YTV文字412010.09.072020.09.06673358111YTV文字422010.09.072020.09.06673358012YOUTV文字352010.07.212020.07.20673344013YOUTV文字382010.05.282020.05.27673344114xfeng文字352012.03.282022.03.27922914526NoTrademarkClassification NumberValid PeriodRegistration Number15xfeng文字382012.03.282022.03.27922916016xfeng文字412012.03.282022.03.27922919017xfeng文字422012.03.282022.03.27922922118中传视讯文字+图形422008.12.212018.12.20466604719中传视讯文字422008.12.212018.12.20466604820中传视讯文字382008.12.212018.12.20466604921新蜂文字382011.08.212021.08.20853890722新蜂文字422012.01.282022.01.27853907823新蜂.潮文字382011.08.212021.08.20853910424新蜂.潮文字422012.01.282022.01.27853914125新影力412014.08.282024.08.271228864326小人图形352014.08.282024.08.271228798527小人图形382014.08.282024.08.271228858028小人图形412014.08.282024.08.271228862929小人图形422014.08.282024.08.271228843530中传文字382014.08.282024.08.271228826731中传图形382014.08.282024.08.271228828932中童文字412014.08.072024.08.061221408533中童在线文字412014.08.072024.08.061221409234翠鸟文字382014.08.072014.08.061221405835翠鸟文字422014.08.072014.08.061221412536爱翠鸟文字382014.08.072024.08.061221406637爱翠鸟文字412014.08.072024.08.061221409638爱翠鸟文字422014.08.072024.08.061221412639翠鸟图形352014.08.072024.08.061221404040翠鸟图形382014.08.072024.08.061221407441翠鸟图形412014.08.072024.08.061221410042翠鸟图形422014.08.072024.08.061221413143信号小喇叭图形+CMEDIA412015.03.212025.03.201248043944LookLook图形382015.11.142025.11.131153342845LookLook图形422014.06.212024.06.201153372046LookLook文字382014.07.142024.07.131153406747LookLook文字422014.04.142024.04.131153422748L图形352014.02.282024.02.271153500249L图形382014.02.282024.02.271153507350L图形412014.02.282024.02.271153518151L图形422014.02.282024.02.271153526252箩筐图形412016.06.142026.06.131658022853箩筐图形422016.06.142026.06.131658022754箩筐文字422016.09.282026.09.271658024955箩筐文字412016.06.142026.06.131658025056箩筐文字352016.09.212026.09.201658025257箩筐文字92016.06.142026.06.131658025327NoTrademarkClassification NumberValid PeriodRegistration Number58箩筐图形382016.06.142026.06.131658022959箩筐图形352016.06.142026.06.131658023060箩筐图形92016.06.142026.06.131658023161微时光文字422016.09.282026.09.271658024762传游录屏文字92016.06.142026.06.131678214463传游录屏文字352016.06.142026.06.131678214364传游录屏文字382016.06.142026.06.131678214265传游录屏文字412016.06.142026.06.131678214166传游录屏文字422016.06.142026.06.131678214067录游器文字92016.06.142026.06.131678213568录游器文字352016.06.142026.06.131678213669录游器文字382016.06.142026.06.131678213770录游器文字412016.06.142026.06.131678213871录游器文字422016.06.142026.06.131678213972畅联TV文字412016.01.212026.01.201579246773畅联TV文字382016.01.212026.01.201579246874SuperEngine92016.01.212026.01.20812572275SuperEngine422016.01.212026.01.20812572876超擎9/422016.01.212026.01.201647320577SUPERENGINE9/422016.01.212026.01.2016473185*See below for an explanation of each classification number used in the table above.Classification No. 9: data processing apparatus, couplers (data processing equipment), computer software (recorded), monitors (computer programs), smartcards (integrated circuit cards), electrodynamic apparatus for the remote control of signals, alarms, and electric installations for the remote control of industrialoperations.Classification No. 35: auctioneering, sales promotion for others, marketing analysis, marketing research, importexport agencies, advisory services forbusiness management, business management for franchise, personnel management consultancy, relocation services for businesses, and systemization ofinformation into computer databases.Classification No. 38: Include services that enable at least sensory communication between two people. Such services include that allow one person to talkto another, send messages from one person to another, Make verbal or visual contact between one person and the other. This classification especially include theservice for broadcasting radio or television programs. Except for radio advertising services and telemarketing services.Classification No. 41: instruction services, teaching, education information, tuition, arranging and conducting of colloquiums, publication of electronicbooks and journals online, amusements, and vocational guidance.Classification No. 42: technical research, studies (technical project), computer software design, updating of computer software, recovery of computer data,computer systems analysis, installation of computer software, computer antivirus protection, and research and development for others. 28Business Certificates and QualificationsWe have obtained all necessary regulatory certifications to conduct our business in the PRC, including without limitation, the following: SoftwareEnterprise Recognition Certificate, Computer Information System Integration Qualification Certificate, Construction Enterprise Qualification Certificate, and SecurityTechnology & Protection Enterprise Certificate. We have also been properly certified as a hightech enterprise and have met the ISO 9001:2000 qualificationmanagement system.Legal ProceedingsAlthough we may, from time to time, be involved in litigation and claims arising out of our operations in the normal course of business, we do not believethat we are a party to any litigation that will have a material adverse impact on our financial condition or results of operations. To our knowledge, other than asdescribed below there are no material legal proceedings threatened against us. From time to time, we may be subject to various claims and legal actions arising in theordinary course of business. Following the consummation of the AEA, we became successor in interest to the legal proceedings described below.Litigation with Shanghai Fusheng Weier Intelligent Control Technology Co., Ltd.On January 22, 2016, Zhong Chuan Rui You and Shanghai Fusheng Weier Intelligent Control Technology Co., Ltd. (“Fusheng Weier”) signed a contract forequipment of $1,652,842 (RMB10,800,000). Since Zhong Chuan Rui You did not make the payments of $1,126,381 (RMB7,360,000) on the due dates, Fusheng Weierfiled a lawsuit against Zhong Chuan Rui You in Shanghai Xuhui District People's Court on October 8, 2016. On March 9, 2017, Xuhui District People's Court issuedthe verdict requiring Zhong Chuan Rui You to pay the overdue debts. In August 2017, C Media Limited made the payment of $512,075 (RMB3,346,000). Theremaining balance has been accrued in accounts payable. The payment schedule for the remaining balance is being negotiated by the two parties. On February 5,2018, a hearing was held adding Zhong Chuan Shi Xun as a defendant. The Group plans to settle the remaining balance within one year.Lawsuit with Gansu Jinlun Culture Media Co., Ltd.On August 22, 2014, Zhong Chuan Rui You and Gansu Jinlun Culture Media Co., Ltd. (“Gansu Jinlun”) signed a “Lanzhou Railway Bureau AirconditionedTrain WiFi Network System Advertising Operation Rights Agreement” for advertising on 72 trains of $1,467,880 (RMB9,604,633). Due to the dispute on theproject implementation, Zhong Chuan Rui You did not pay the advertising fee. On August 23, 2017, Gansu Jinlun filed a lawsuit with Gansu Intermediate People'sCourt. On December 19, 2017, Gansu Intermediate People's Court issued a verdict, ruling that Zhong Chuan Rui You settle the overdue advertising fee. Since only 18out of 72 trains have been installed with Wifi network system, Zhong Chuan Rui You disputed and appealed to the verdict. The next court trial date has not yet beendetermined.C Media and Gansu Jinlun are negotiating a potential settlement to resume the contract. According to the legal counsel, it is probable that the settlementwill amount to approximately $459,000 (RMB3,000,000); therefore, this amount has been accrued in accounts payable as at December 31, 2017.Litigation with Shenzhen Hua Xun Fang Zhou Technology Co., Ltd.On June 16, 2015, Zhong Chuan Rui You signed a cooperation agreement with Shenzhen Hua Xun Fang Zhou Technology Co., Ltd. (“Shenzhen Hua Xun”)and Xuesong Song, a major shareholder of C Media Limited. Pursuant to this agreement, Zhong Chuan Rui You procures equipment from Shenzhen Hua Xun.Xuesong Song acts as a joint liability guarantor for the entire debts of Zhong Chuan Rui You under this agreement. As Zhong Chuan Rui You did not make thepayments on the due dates, Shenzhen Hua Xun filed a lawsuit with Shenzhen Baoan District People's Court on May 31, 2016. On November 1, 2016, Zhong ChuanRui You, Xuesong Song and Shenzhen Hua Xun reached a settlement in Shenzhen Baoan District People's Court to settle $1,735,389 (RMB11,355,000) in fourinstalments. On December 30, 2017, the debt was assigned to C Media Limited.29C. ORGANIZATIONAL STRUCTUREThe following diagram illustrates our corporate structure and the place of formation and affiliation of each of our subsidiaries and affiliates as of September30, 2018.30The following diagram illustrates our corporate structure and the place of formation and affiliation of each of our subsidiaries and affiliates as of December31, 2017.Contractual Arrangements with Beijing Zhong Chuan Shi Xun Technology Limited’s Subsidiaries and Their Respective ShareholdersTo comply with the PRC legal restrictions on foreign ownership of companies that operate mobile application services, our subsidiaries operate in suchrestricted service areas in the PRC through certain PRC domestic companies, whose equity interests are held by certain management members or founders of the LKTechnology Ltd. Part of the registered capital of these PRC domestic companies was funded by certain management members or founders of LK Technology Ltd. LKTechnology Ltd., through its subsidiary Zhong Chuan Tian Xia Information and Technology (Shenzhen) Limited (the “WFOE”), has entered into an exclusivebusiness cooperation agreement with Beijing Zhong Chuan Shi Xun Technology Limited (“Zhong Chuan Shi Xun” or the “VIE”) the PRC domestic company, whichentitle the WFOE to receive a majority of profit of Zhong Chuan Shi Xun. In addition, Zhong Chuan Tian Xia Information and Technology (Shenzhen) Limited hasentered into certain agreements with those management members or founders, including equity interest pledge agreement of the equity interests held by thosemanagement members or founders and exclusive option agreement to acquire the equity interests in these companies when permitted by the PRC laws, rules andregulations. Details of the typical VIE structure of our significant consolidated VIE, primarily domestic companies associated with the operations such as ZhongChuan Shi Xun and its subsidiaries of Zhong Chuan Rui You, Huoerguosi Luokuang and Jiu Zhou Shi Dai, are set forth below: Exclusive Business Cooperation AgreementThe VIE has entered into an exclusive business services agreement with the WFOE, pursuant to which the WFOE provides exclusive business services tothe VIE. In exchange, the VIE pays a service fee to the WFOE which amounts to be no less than the 80% of the VIE’s aftertax profit, resulting in a transfer ofsubstantially all of the profits from the VIE to the WFOE.Exclusive Option AgreementThe VIE equity holders have granted the WFOE exclusive call options to purchase their equity interest in the VIE at an exercise price equal to the minimumprice as permitted by applicable PRC laws. The WFOE may nominate another entity or individual to purchase the equity interest, if applicable, under the call options.Each call option is exercisable subject to the condition that applicable PRC laws, rules and regulations do not prohibit completion of the transfer of the equityinterest pursuant to the call option. The VIE agrees not to distribute any dividends to the VIE equity holders without the approval of WFOE.31Equity Interest Pledge AgreementPursuant to the equity pledge agreement, the VIE equity holders have pledged all of their interests in the equity of the VIE as a continuing first prioritysecurity interest in favor of the WFOE to secure the performance of obligations by the VIEs and/or the equity holders under the exclusive business cooperationagreement. The WFOE is entitled to exercise its right to dispose of the VIE equity holders’ pledged interests in the equity of the VIE and has priority in receivingpayment by the application of proceeds from the auction or sale of such pledged interests, in the event of any breach or default under the exclusive businesscooperation agreement, if applicable. These equity pledge agreement remain in force until all the obligations under the exclusive business cooperation agreementhave been fulfilled.The exclusive business cooperation agreement and equity interest pledge agreement described above also enable the Company to receive substantially allof the economic benefits from the VIE by typically entitling the WFOE to all dividends and other distributions declared by the VIE and to any distributions orproceeds from the disposal by the VIE equity holders of their equity interests in the VIE.D. PROPERTY AND EQUIPMENTWe lease offices located at Lab 30 & Lab 32, SOHO 3Q, No 9, Guanghua Road, Chaoyang District, Beijing, which covers a floor space of 600 square meters.These leases expire at different times throughout 2018 and are renewable upon negotiation.ITEM 4A. UNRESOLVED STAFF COMMENTSNone.ITEM 5. OPERATING AND FINANCIAL REVIEW AND PROSPECTSA . OPERATING RESULTS.The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our consolidatedfinancial statements and the notes to those financial statements appearing elsewhere in this report. This discussion and analysis contains forwardlookingstatements that involve significant risks and uncertainties. As a result of many factors, such as our anticipated growth strategy, our plans to recruit moreemployees, our plans to invest in research and development to enhance our product or service lines, our future business development, results of operations andfinancial condition, expected changes in our net revenues and certain cost or expense items, our ability to attract and retain customers, trends and competitionin the enterprise mobile software application market, and the factors set forth elsewhere in this report, our actual results may differ materially from thoseanticipated in these forwardlooking statements. In light of those risks and uncertainties, there can be no assurance that the forwardlooking statementscontained in this report will in fact occur. You should not place undue reliance on the forwardlooking statements contained in this report.The forwardlooking statements speak only as of the date on which they are made, and, except to the extent required by U.S. federal securities laws, weundertake no obligation to update any forwardlooking statement to reflect events or circumstances after the date on which the statement is made or to reflectthe occurrence of unanticipated events. Further, the information about our intentions contained in this report is a statement of our intention as of the date of thisreport and is based upon, among other things, the existing regulatory environment, industry conditions, market conditions and prices and our assumptions as ofsuch date. We may change our intentions, at any time and without notice, based upon any changes in such factors, in our assumptions or otherwise.32Unless the context otherwise requires, all references to (i) “PRC” and “China” are to the People’s Republic of China; (ii) “U.S. dollar,” “$” and “US$”are to United States dollars; and (iii) “RMB”, “Yuan” and Renminbi are to the currency of the PRC or China.OverviewLuokung Technology was incorporated on October 27, 2009 under the laws of the British Virgin Islands. We are a holding company and conduct ouroperations through LK Technology Ltd., a British Virgin Islands limited liability company (“LK Technology”) and its whollyowned subsidiaries, MMB Limited andMobile Media (China) Limited and their respective subsidiaries and a contractuallycontrolled entity in the PRC named Beijing Zhong Chuan Shi Xun Technology,which hold the rights to deploy WiFi systems on about 700 trains in China, including 290 trains in which WiFi systems have already been installed and are inoperation. In May 2010, we consummated an initial public offering of our American Depository Shares, or ADSs, for gross proceeds of $16 million, and our ADSswere listed on the NASDAQ Capital Market under the ticker symbol “KONE”. Our ordinary shares are not currently listed on any trading market. Our AmericanDepository Shares (“ADSs”) were voluntarily delisted from the NASDAQ Capital Market on September 19, 2018. We have applied to NASDAQ for the listing of ourordinary shares on the NASDAQ Capital Market and received an approval for listing of Ordinary Shares on August 6, 2018, and as of the date of this transitionreport, that application and approval are currently under review.On August 17, 2018, we consummated an asset exchange transaction, pursuant to which we exchanged all issued and outstanding capital stock in TopskyInfoTech Holdings Pte Ltd., the parent of Softech, for the issued and outstanding capital stock of LK Technology (the “Asset Exchange”). In connection with theAsset Exchange, we changed our name on August 20, 2018, and on September 20, 2018, completed the issuance to the shareholders of C Media Limited, the formerparent of LK Technology, of (i) 185,412,599 of our ordinary shares, par value $0.01 per share and (ii) 1,000,000 of our preferred shares. Upon the consummation of theAsset Exchange, we ceased our previous business operations and became a company focused on the provision of WiFi and mobile application products for longdistance travelers in China.On August 25, 2018, LK Technology entered into a Stock Purchase Agreement (the “Agreement”) with the shareholders (“Shareholders”) of SuperengineHoldings Limited, a limited liability company organized under the laws of the British Virgin Islands (the “Superengine”), pursuant to which LK Technology acquiredall of the issued and outstanding capital stock of Superengine for an aggregate purchase price of US$60 million (the “Purchase Price”), which are paid by theissuance of our Ordinary Shares in an amount equal to the quotient of (x) the Purchase Price divided by (y) the average of the closing prices of the Ordinary Shareson the NASDAQ Capital Market over the 12 months period preceding July 31, 2018. We are a party to the Agreement in connection with the issuance of theOrdinary Shares and certain other limited purposes.Results of operations for the fiscal year ended December 31, 2017 compared to the fiscal year ended December 31, 2016.RevenueWe provide displaybased online advertising services to customers by integrating text description, image and video, and displaying the advertisements in aprominent position of LuoKuang Application. We recognize revenue in accordance with ASC 605, over the contractual term based on the agreements andconfirmation letters signed by both parties, commencing on the date the customer’s advertisement is displayed on our platform.For the year ended December 31, 2017, we had revenue of $26,082,417, as compared to revenue of $5,233,145 for the year ended December 31, 2016, anincrease of $20,849,272, or 398.4%, which was primarily due to the increase of our advertising clients.Cost of revenueOur cost of revenue primarily consists of depreciation, labor cost, WiFi equipment installation fees, data charges, annual payments to local railway bureau,other overhead costs.33Cost of revenue for the year ended December 31, 2017 was $5,547,779, representing a decrease of $767,725 or 12.2% as compared to $6,315,504 for the yearended December 31, 2016. The decrease was primarily attributable to the decrease in labor cost as a result of our cost control and a decrease in the number ofmaintenance staff. Additionally, data charges decreased as train passengers prefer using their mobile data, leading to a decrease in 3G and 4G data.Selling and marketing expenseOur selling and marketing expense mainly include promotional and marketing expenses and compensation for our sales and marketing personnel.Selling expense totaled $23,908,733 for the year ended December 31, 2017, as compared to $6,209,804 for the year ended December 31, 2016, an increase of$17,698,929 or 285.0%. The increase was primarily attributable to the increase in promotional and marketing activities conducted by the Company.General and administrative expenseOur general and administrative expenses consist primarily of salaries and benefits for our general and administrative personnel, rent, fees and expenses forlegal, accounting and other professional servicesGeneral and administrative expense totaled $2,451,249 for the year ended December 31, 2017, as compared to $2,108,854 for the year ended December 31,2016, an increase of $342,395 or 16.2%.Research and development expenses.Research and development expenses primarily consist of salaries and benefits for research and development personnel.Research and development expenses totaled $1,046,198 for the year ended December 31, 2017, as compared to $2,882,202 for the year ended December 31,2016, a decrease of $1,836,004 or 63.7%. The decrease was primarily attributable to the Company reduced its expenses in research and development temporarily asour products are quite stable at present.Loss from operationsAs a result of the factors described above, for the year ended December 31, 2017, loss from operations amounted to $6,871,542, as compared to loss fromoperations of $12,283,219 for the year ended December 31, 2016, a decrease of $5,411,677, or 44.1%.Other income/expenseOther income/expense mainly include interest income from bank deposits, foreign currency transaction gain, and loss from investment.Net lossAs a result of the factors described above, our net loss was $6,810,454 for the year ended December 31, 2017, compared to net loss of $13,049,031 for theyear ended December 31, 2016, a decrease of $6,238,577 or 47.8%.Foreign currency translation adjustmentOur reporting currency is the U.S. dollar. The functional currency of our parent company and subsidiaries of Merchant Supreme and Prime Cheer is the U.S.dollar and the functional currency of the Company’s subsidiaries incorporated in China is the Chinese Renminbi (“RMB”). The financial statements of oursubsidiaries incorporated in China are translated to U.S. dollars using period end rates of exchange for assets and liabilities, and average rates of exchange (for theperiod) for revenue, costs, and expenses. Net gains and losses resulting from foreign exchange transactions are included in the consolidated statements ofoperations and comprehensive loss. As a result of foreign currency translations, which are a noncash adjustment, we reported a foreign currency translation gain of$90,671 for the year ended December 31, 2017, as compared to a foreign currency translation loss of $387,375 for the year ended December 31, 2016. This noncashgain had the effect of increasing/decreasing our reported comprehensive income/loss.34Comprehensive lossAs a result of our foreign currency translation adjustment, we had comprehensive loss for the year ended December 31, 2017 of $6,719,783, compared tocomprehensive loss of $12,661,656 for the year ended December 31, 2016.B. LIQUIDITY AND CAPITAL RESOURCESThe information contained in “Item 5. Operating and Financial Review and Prospects – A. Operating Results – Liquidity and Capital Resources” isincorporated herein by reference.C. RESEARCH AND DEVELOPMENT, PATENTS AND LICENSES, ETC.The discussions of our research and development activities were contained in “Item 4. Information about our Company – B. Business Overview –Research and Development” and “Item 5. Operating and Financial Review and Prospects – A. Operating Results – Operating Expenses – Research and DevelopmentExpenses” are incorporated herein by reference. In the years ended December 31, 2017 and 2016, we spent $1,046,198 and $2,882,202, respectively, on research anddevelopment activities.D. TREND INFORMATION.Industry and Market OutlookChina has awarded licenses to mobile phone companies to provide the superfast 4G network to customers. The licenses, which are designed to give mobilephone users faster access to services, were granted by the government to China Mobile, China Unicom Hong Kong and China Telecom. Since the grants, ChinaMobile has offered 4G to subscribers from December 18, 2013. China Unicom and China Telecom, the country's other two major carriers, also offer 4G wireless. Thenumber of China Mobile 4G customers has exceeded 900 million by the end of October in 2017. The move greatly bolstered business for telecom equipment makersand a range of other companies.Under China’s 12th FiveYear Plan, a key priority is for China to transition from “Made in China” to “Designed in China.” In order to achieve this goal, thegovernment plans to heavily invest in science and technology education and R&D so as to further develop China’s intellectual property rights system and support“NextGeneration IT” as a Strategic Emerging Industry (SEI). Additionally, China plans to upgrade the technological capabilities of private and public services,including “triple play” services (the convergence of telecom, broadcasting and Internet networks), ecommerce, and egovernment and statistics systems.Furthermore, the government plans to invest in R&D of the "Internet of things" and cloud computing, and develop digital and virtual technologies.E. OFFBALANCE SHEET ARRANGEMENTSWe have not entered into any financial guarantees or other commitments to guarantee the payment obligations of any third parties. We have not enteredinto any derivative contracts that are indexed to our shares and classified as shareholder’s equity, or that are not reflected in our consolidated financial statements.Furthermore, except for the mortgage referenced above, we do not have any retained or contingent interest in assets transferred to an unconsolidated entity thatserves as credit, liquidity or market risk support to such entity. We do not have any variable interest in any unconsolidated entity that provides financing, liquidity,market risk or credit support to us or engages in leasing, hedging or research and development services with us.35F. TABULAR DISCLOSURE OF CONTRACTUAL OBLIGATIONSAs of December 31, 2017, we did not have any contractual obligations required to be disclosed in this Item 5.F. ITEM 6. DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES.A. DIRECTORS AND SENIOR MANAGEMENT.Executive Officers and DirectorsThe following table sets forth the names and ages as of the date of this transition report of each of our executive officers and directors:NameAgePositionXuesong Song50Chief Executive Officer, Chairman and DirectorDongpu Zhang50PresidentJie Yu34Chief Financial OfficerKegang Peng46Vice President and DirectorChuang Tao51DirectorDennis Galgano (1)(2)69Director (Independent)Jin Shi (1)(2)49Director (Independent)Jiming Ha (1)(3)56Director (Independent)Zhihao Xu (3)42Director (Independent)(1)Member of the Audit Committee.(2)Member of the Compensation Committee.(3)Member of the Nominating and Corporate Governance Committee.Set forth below is biographical information concerning our executive officers and directors.Xuesong Song is a cofounder of C Media Limited and served as its chairman of the board of directors and chief executive officer from 2012 until theconsummation of the AEA. From February 2014 through April 2017, Mr. Song served as a director of Seven Stars Cloud Group, Inc. (NASDAQ: SSC) and fromJanuary 2013 through February 2015, Mr. Song served as a director of Pingtan Marine Enterprise Ltd. (NASDAQ: PME). From May 2006 through January 2009, Mr.Song served as the Chairman of the Board of ChinaGrowth North Acquisition Corporation, a special purpose acquisition company, which acquired UIB GroupLimited in January 2009, in which he remains a director. Mr. Song has been a principal of Chum Capital Group Limited since August 2001, a merchant banking firmthat invests in growth Chinese companies and advises them in financings, mergers & acquisitions and restructurings, and chief executive officer of Beijing ChumInvestment Co., Ltd. since December 2001. Mr. Song has been a director of Mobile Vision Communication Ltd. since July 2004. Mr. Song received a Master’s ofBusiness Administration degree from Oklahoma City/Tianjin Program.Dongpu Zhang was appointed as the President of the Company effective on August 25, 2018. Mr. Dongpu Zhang has served as the General Manager ofSuperEngine Graphics Software Technology Development (Suzhou) Co., Ltd. (“SuperEngine Suzou”) and the Chief Executive Officer of SuperEngine HoldingLimited since September 2016. From February, 2014 to August, 2016, Mr. Zhang served as vice president of Industrial Development Group under China Fortune LandDevelopment Co., Ltd. From March, 2009 to February, 2014, Mr. Zhang served as the vice president of Aerospace Science and Technology Holding Group Co., Ltd.Mr. Zhang receive his Master Degree of Computer Science from Harbin Institute of Technology in 1994 and his Bachelor Degree of information system fromChangsha Institute of technology in 1991.Jie Yu served as the chief financial officer of C Media Limited from January 2018 until the consummation of the asset exchange transactions. From June 2016to January 2018, Mr. Yu served as chief financial officer and secretary of the board of directors of MTI Environment Group Limited. Prior to joining MTI, Mr. Yuserved as the senior manager at DA HUA CPA from November 2012 to May 2016. Previously, Mr. Yu served as the manager at Crowe Horwath (Hong Kong) CPA.Mr. Yu holds a bachelor degree in accounting and finance from University of Auckland and postgraduate diploma in accounting from University of Auckland.36Kegang Peng served as the Vice Chairman of the board of directors C Media Limited from October 2014 to the consummation of the asset exchangetransactions, and is now a member of the Company’s board of directors. Previously, from 2012 to 2014, Mr. Peng was chairman of the board and founder of JiangsuSuqian Jinghaiboyuan Information and Technology Co., Ltd. Mr. Peng studied at Beijing University of Aeronautics and Astronautics majoring computer andapplication.20F 1 f20f2017_luokungtech.htm AMENDMENT NO. 1 TO FORM 20FUNITED STATESSECURITIES AND EXCHANGE COMMISSIONWASHINGTON, D.C. 20549FORM 20F☐ REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934OR☐ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934For the Fiscal year ended _____________OR☒ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934For the transition period from October 1, 2017 to December 31, 2017☐ SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934Date of event requiring this shell company report Commission file number: 00134738Luokung Technology Corp.(Exact name of Registrant as specified in its charter)Not applicable(Translation of Registrant’s name into English)British Virgin IslandsLAB 32, SOHO 3Q, No 9, Guanghua Road, Chaoyang District, BeijingPeople’s Republic of China, 100020(Jurisdiction of incorporation or organization)(Address of principal executive offices)Mr. Muqiao GengLAB32, SOHO 3Q, No 9, Guanghua Road, Chaoyang District, BeijingPeople’s Republic of China 100020Tel: (86) 1085866721(Name, telephone, Email and/or facsimile number and address of company contact person)Securities registered or to be registered pursuant to Section 12(b) of the Act:Title of each className of each exchange on which registeredOrdinary shares, par value $0.01 per shareNonePreferred shares, par value $0.01 per shareNoneSecurities registered or to be registered pursuant to Section 12(g) of the Act:none(Title of Class)Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act:none(Title of Class)Indicate the number of outstanding shares of each of the issuer’s classes of capital or common stock as of the close of the period covered by the transitionreport. 187,097,599 Ordinary Shares, including 186,383,224 Ordinary Shares represented by 714,375 American Depositary Shares, and 1,000,000 Preferred Sharesoutstanding as of September 20, 2018.Indicate by check mark if the registrant is a wellknown seasoned issuer, as defined in Rule 405 of the Securities Act. ☐ Yes ☒ NoIf this report is an annual or transition report, indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of theSecurities Exchange Act of 1934. ☐ Yes ☒ NoIndicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirementsfor the past 90 days. ☒ Yes ☐ NoIndicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File requiredto be submitted and posted pursuant to Rule 405 of Regulation ST (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that theregistrant was required to submit and post such files). ☒ Yes ☐ NoIndicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a nonaccelerated filer. See definition of “accelerated filer andlarge accelerated filer” in Rule 12b2 of the Exchange Act. (Check one):Large accelerated filer ☐ Accelerated filer ☐ Nonaccelerated filer ☒Indicate by check mark which basis of accounting the registrant has used to prepare the financial statements included in this filing.U.S. GAAP ☒International Financial Reporting Standards as issuedby the International Accounting Standards Board ☐Other ☐If “Other” has been checked in response to the previous question, indicate by check mark which financial statement item the registrant has elected tofollow. Item 17 ☐ Item 18 ☐If this is an transition report, indicate by check mark whether the registrant is a shell company (as defined in Rule 12b2 of the ExchangeAct). ☐ Yes ☒ NoExplanatory NoteLuokung Technology Corp. (the “Company”) is filing this transition report on Form 20F (“Transition Report”) in connection with the completion of theexchange of certain of its assets for substantially all of the assets of C Media Limited (“C Media”) pursuant to that Asset Exchange Agreement, dated January 25,2018 (the “Original AEA”), as supplemented by the Addendum to Asset Exchange Agreement, dated October 3, 2018 (the “Addendum” and together with theOriginal AEA, the “AEA”). Following the consummation of the AEA, on October 4, 2018, the Company changed its fiscal year end from September 30 to the fiscalyear end used by C Media, December 31. This Transition Report covers the threemonth period from Octorber 1, 2017 to December 31, 2017, and the fiscal yearsdescribed herein.In this transition report:●References to the “Company”, “we”, “our” and “us” are to Luokung Technology Corp. and its consolidated subsidiaries and variable interestentity, except as the context otherwise requires;●This transition report on Form 20F covers the threemonth period from October 1, 2017 through December 31, 2017 (the “Transition Period”) andreflects our financial results thereof. Prior to this transition report on Form 20F, our two most recent annual reports on Form 20F cover the fiscalyears ended September 30, 2017 and September 30, 2016, respectively, and reflect financial results for the respective twelvemonth periods fromOctober 1 to September 30. Unless otherwise noted, all references to years are to the calendar year from January 1 to December 31 and referencesto our fiscal year or years are to the fiscal year or years which, prior to the Transition Period, ended September 30, while from and after theTransition Period, ended December 31;●References to an “ADS” are to an American Depositary Share, each of which represents one of our Ordinary Shares with a par value of $.01 pershare.Special Note Regarding Forwardlooking StatementsThis transition report contains forwardlooking statements that involve risks and uncertainties. These statements involve known and unknown risks,uncertainties and other factors that may cause our actual results, performance or achievements to be materially different from those expressed or implied by theforwardlooking statements.You can identify these forwardlooking statements by words or phrases such as “may,” “will,” “expect,” “anticipate,” “aim,” “estimate,” “intend,” “plan,”“believe,” “likely to” or other similar expressions. We have based these forwardlooking statements largely on our current expectations and projections about futureevents and financial trends that we believe may affect our financial condition, results of operations, business strategy and financial needs. You should not placeundue reliance on these forwardlooking statements, which apply only as of the date of this transition report. These forwardlooking statements include:●our future business development, results of operations and financial condition;●expected changes in our net revenues and certain cost or expense items;●our ability to attract and retain customers; and●trends and competition in the enterprise mobile software application market.You should read this transition report thoroughly with the understanding that our actual future results may be materially different from, and/or worse, thanwhat we expect. We qualify all of our forwardlooking statements by these cautionary statements. Other sections of this transition report include additional factorswhich could adversely impact our business and financial performance. Moreover, we operate in an evolving environment. New risk factors and uncertainties emergefrom time to time and it is not possible for our management to predict all risk factors and uncertainties, nor can we assess the impact of all factors on our business orthe extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forwardlooking statements.This transition report also contains estimates, projections and statistical data related to the market for the provision of WiFi and mobile applications inChina. This market data, including data from IDC, a leading provider of market data and intelligence, speaks as of the date it was published and includes projectionsthat are based on a number of assumptions and are not representations of fact. The market for the provision of WiFi and mobile applications in China may not growat the rates projected by the market data, or at all. The failure of the market to grow at the projected rates may materially and adversely affect our business and themarket price of our ADSs. In addition, the rapidly changing nature of the market for the provision of WiFi and mobile applications subjects any projections orestimates relating to the growth prospects or future condition of our market to significant uncertainties. If any one or more of the assumptions underlying the marketdata proves to be incorrect, actual results may differ from the projections based on these assumptions.You should not rely upon forwardlooking statements as predictions of future events. We undertake no obligation to update or revise any forwardlookingstatements, whether as a result of new information, future events or otherwise.TABLE OF CONTENTSPart IItem 1.Identity of Directors, Senior Management and Advisers.1Item 2.Offer Statistics and Expected Timetable.1Item 3.Key Information.1A.Selected Financial Data.1B.Capitalization and Indebtedness.3C.Reasons for the Offer and Use of Proceeds.3D.Risk Factors.3Item 4.Information on the Company.19A.History and Development of the Company.19B.Business Overview.20C.Organizational Structure.30D.Property, Plants and Equipment.32Item 4A.Unresolved Staff Comments.32Item 5.Operating and Financial Review and Prospects.32A.Operating Results.32B.Liquidity and Capital Resources.35C.Research and Development, Patents and Licenses, etc.35D.Trend Information.35E.Offbalance Sheet Arrangements.35F.Tabular Disclosure of Contractual Obligations.36Item 6.Directors, Senior Management and Employees.36A.Directors and Senior Management.36B.Compensation.37C.Board Practices.40D.Employees.43E.Share Ownership.43Item 7.Major Shareholders and Related Party Transactions.44A.Major Shareholders.44B.Related Party Transactions.45C.Interests of Experts and Counsel.45Item 8.Financial Information.45A.Consolidated Statements and Other Financial Information.45B.Significant Changes.46Item 9.The Offer and Listing.46A.Offer and Listing Details.46B.Plan of Distribution.47C.Markets.47D.Selling shareholders.48E.Dilution.48F.Expenses of the issue.48Item 10.Additional Information.48A.Share Capital.48B.Memorandum and Articles of Association.48C.Material Contracts.53D.Exchange Controls.54E.Taxation.61F.Dividends and Paying Agents.67G.Statement by Experts.67H.Documents on Display.67I.Subsidiary Information.68Item 11.Quantitative and Qualitative Disclosures about Market Risk.68Item 12.Description of Securities Other than Equity Securities.69A.Debt Securities.69B.Warrants and Rights.69C.Other Securities.69D.American Depositary Shares.69iPart IIItem 13.Defaults, Dividend Arrearages and Delinquencies.71Item 14.Material Modifications to the Rights of Security Holders and Use of Proceeds.71Item 15.Controls and Procedures.71Item 16.[Reserved.]72Item 16A.Audit Committee Financial Expert.72Item 16B.Code of Ethics.73Item 16C.Principal Accountant Fees and Services.73Item 16D.Exemptions from the Listing Standards for Audit Committees.73Item 16E.Purchases of Equity Securities by the Issuer and Affiliated Purchasers.73Item 16F.Change in Registrant’s Certifying Accountant.73Item 16G.Corporate Governance.73Item 16H.Mine Safety Disclosure.73Part IIIItem 17.Financial Statements.74Item 18.Financial Statements.74Item 19.Exhibits.74Index to Consolidated Financial StatementsF1iiPART IITEM 1. IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS.The directors of Luokung Technology Corp. are Xuesong Song, Kegang Peng, Dennis Galgano, Jin Shi, Jiming Ha, Zhihao Xu and Chuang Tao. Thebusiness address for our directors is LAB 32, SOHO 3Q, No 9, Guanghua Road, Chaoyang District, Beijing, People’s Republic of China.Moore Stephens CPA Limited has served as our auditor since October 5, 2018, and is located at 801806 Silvercord Tower 1, 30 Canton road, Tsimshatsui,Kowloon, Hong Kong. BDO China Shun Lun Pan Certified Public Accountants LLP served as our auditors for the last three years, and are located at 4F, No. 61Nanjing Road, Shanghai, People’s Republic of China.Garvey Schubert Barer, P.C., serves as our legal counsel in the United States, and is located at Flour Mill Building, 1000 Potomac Street NW, Suite 200,Washington, D.C., 200073501.Conyers Dill & Pearlman serves as our legal counsel with regard to the laws of the British Virgin Islands, and is located at 29th Floor, One Exchange Square,8 Connaught Place, Central, Hong Kong.ITEM 2. OFFER STATISTICS AND EXPECTED TIMETABLE.Not applicable.ITEM 3. KEY INFORMATION.A. SELECTED FINANCIAL DATA.Luokung Technology Corp. and its consolidated subsidiaries (“Luokung Technology”, “we”, “us”, or “the Company”) consummated an asset exchangeagreement pursuant to which we exchanged our existing assets with those of C Media Limited (the “Asset Exchange”) on August 17, 2018, and we changed ourname from Kingtone Wirelessinfo Solution Holding Ltd. to our current name on August 20, 2018. On October 4, 2018, in connection with the consummation of the Asset Exchange, we changed our fiscal year end from September 30 to December 31.1The selected financial data for the fiscal years ended December 31 2017 and 2016 have been derived from our audited consolidated and combined financialstatements. The selected consolidated and combined financial data should be read in conjunction with our audited financial statements and the accompanying notesand “Item 5 – Operating and Financial Review and Prospects.” Our consolidated and combined financial statements are prepared and presented in accordance withUnited States generally accepted accounting principles, or U.S. GAAP. Our historical results do not necessarily indicate our results expected for any future periods.You should not view our historical results as an indicator of our future performance.LK TECHNOLOGY LTD. AND SUBSIDIARIESSELECTED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS(IN U.S. DOLLARS)For the years ended December 31,20172016Revenues$26,082,417$5,233,145Less: Cost of revenues5,547,7796,315,504Less: Operating expenses:Selling and marketing23,908,7336,209,804General and administrative2,451,2492,108,854Research and development1,046,1982,882,202Total operating expenses27,406,18011,200,860Loss from operations(6,871,542)(12,283,219)Other income (expense):Interest expense(26,611)(4,412)Foreign exchange gains(losses)350,679(298,257)Loss from investment(428,571)Other income (expense), net(262,980)(34,572)Total other income (expense), net61,088(765,812)Loss before income taxes(6,810,454)(13,049,031)Income taxesNet loss$(6,810,454)$(13,049,031)Other comprehensive income:Foreign currency translation adjustment90,671387,375Total comprehensive loss$(6,719,783)$(12,661,656)2LK TECHNOLOGY LTD. AND SUBSIDIARIESSELECTED CONSOLIDATED BALANCE SHEETS(IN U.S. DOLLARS)As of December 31,20172016Accounts receivable, net of allowance for doubtful accounts9,729,6251,865,836Amounts due from related parties11,760,692Property and equipment, net5,044,8727,771,027Goodwill7,239,9367,239,936TOTAL ASSETS37,582,85821,114,832Accounts payable8,784,5186,446,584Accrued liabilities and other payables12,962,91211,329,613Total liabilities25,311,11333,905,520Total Shareholder’s Equity (Deficit)12,271,745(12,790,688)TOTAL LIABILITIES AND SHAREHOLDER’S EQUITY (DEFICIT)37,582,85821,114,832B. CAPITALIZATION AND INDEBTEDNESS.Not applicable.C. REASONS FOR THE OFFER AND USE OF PROCEEDS.Not applicable.D. RISK FACTORS.An investment in our ADSs and ordinary shares involves a high degree of risk. You should carefully consider the risks and uncertainties described belowtogether with all other information contained in this transition report, including the matters discussed under “Special Note Regarding ForwardLooking Statements,”before you decide to invest in our ADSs or ordinary shares. You should pay particular attention to the fact that we are a holding company with substantialoperations in China and are subject to legal and regulatory environments that in many respects differ from those of the United States. If any of the following risks, orany other risks and uncertainties that are not presently foreseeable to us, actually occur, our business, financial condition, results of operations, liquidity and ourfuture growth prospects would be materially and adversely affected. You should also consider all other information contained in this transition report beforedeciding to invest in our ADSs or ordinary shares.Risks Related to Our Company and Our IndustryThe Company had incurred negative cash flows from operating activities and net losses as of December 31, 2017. These matters raise substantial doubt aboutthe Company’s ability to continue as a going concern.The Company’s consolidated financial statements are prepared using generally accepted accounting principles in the United States of America applicableto a going concern, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. As of and for the year endedDecember 31, 2017, the Company had incurred significant operating losses and working capital deficit. The ability of the Company to continue as a going concern isdependent on the Company obtaining adequate capital to fund operating losses until it becomes profitable. If the Company is unable to obtain adequate capital, itcould be forced to cease operations. The accompanying consolidated financial statements do not include any adjustments that might be necessary if the Companyis unable to continue as a going concern.3We may undertake acquisitions, investments, joint ventures or other strategic alliances, which could have a material adverse effect on our ability to manageour business. In addition, such undertakings may not be successful.Our strategy includes plans to grow both organically and through acquisitions, participation in joint ventures or other strategic alliances. Joint venturesand strategic alliances may expose us to new operational, regulatory and market risks, as well as risks associated with additional capital requirements. We may not beable, however, to identify suitable future acquisition candidates or alliance partners. Even if we identify suitable candidates or partners, we may be unable tocomplete an acquisition or alliance on terms commercially acceptable to us. If we fail to identify appropriate candidates or partners, or complete desired acquisitions,we may not be able to implement our strategies effectively or efficiently. In addition, our ability to successfully integrate acquired companies and their operations may be adversely affected by several factors. These factorsinclude:1.diversion of management’s attention;2.difficulties in retaining customers of the acquired companies;3.difficulties in retaining personnel of the acquired companies;4.entry into unfamiliar markets;5.unanticipated problems or legal liabilities; and6.tax and accounting issues.If we fail to integrate acquired companies efficiently, our earnings, revenue growth and business could be negatively affected.Due to intense competition for highlyskilled personnel, we may fail to attract and retain enough sufficiently trained employees to support our operations; ourability to bid for and obtain new projects may be negatively affected and our revenues could decline as a result.The IT industry relies on skilled employees, and our success depends to a significant extent on our ability to attract, hire, train and retain qualifiedemployees. There is significant competition in China for professionals with the skills necessary to develop the products and perform the services we offer to ourcustomers. Increased competition for these professionals, in the mobile application design area or otherwise, could have an adverse effect on us if we experiencesignificant increase in the attrition rate among employees with specialized skills, which could decrease our operating efficiency and productivity and could lead to adecline in demand for our services.In addition, our ability to serve existing customers and business partners and obtain new business will depend, in large part, on our ability to attract, trainand retain skilled personnel that enable us to keep pace with growing demands for wifi connectivity and mobile applications, evolving industry standards andchanging customer preferences. Our failure to attract, train and retain personnel with the qualifications necessary to fulfill the needs of our existing and futurecustomers or to assimilate new employees successfully could have a material adverse effect on our business, financial condition and results of operations. Ourfailure to retain our key personnel on business development or find suitable replacements of the key personnel upon their departure may lead to shrinking newimplementation projects, which could materially adversely affect our business.4Our business depends substantially on the continuing efforts of our senior executives and other key personnel, and our business may be severely disrupted if welose their services.Our future success heavily depends upon the continued services of our senior executives and other key employees, particularly since we recentlyappointed a new chairman. We are reliant on the services of Mr. Xuesong Song, our chairman, chief executive officer and member of our board of directors. If one ormore of our senior executives or key employees is unable or unwilling to continue in his or her present position, we may not be able to replace such employee easily,or at all, we may incur additional expenses to recruit, train and retain replacement personnel, our business may be severely disrupted, and our financial condition andresults of operations may be materially adversely affected.Our business could suffer if our executives and directors compete against us and our noncompetition agreements with them cannot be enforced.If any of our senior executives or key employees joins a competitor or forms a competing company, we may lose customers, knowhow and keyprofessionals and staff members to them. Also, if any of our business development managers who keep a close relationship with our customers and businesspartners joins a competitor or forms a competing company, we may lose customers, and our revenues may be materially adversely affected. Most of our executiveshave entered, or will soon enter, into employment agreements with us that contain or will contain noncompetition provisions. However, if any dispute arisesbetween our executive officers and us, such noncompetition provisions may not be enforceable, especially in China, where all of these executive officers and keyemployees reside, in light of the uncertainties with China’s legal system. See “Risk Factors — Risks Related to Doing Business in China — Uncertainties withrespect to the PRC legal system could adversely affect us.”Our computer networks may be vulnerable to security risks that could disrupt our services and adversely affect our results of operations.Our computer networks may be vulnerable to unauthorized access, computer hackers, computer viruses and other security problems caused byunauthorized access to, or improper use of, systems by third parties or employees. A hacker who circumvents security measures could misappropriate proprietaryinformation or cause interruptions or malfunctions in operations. Computer attacks or disruptions may jeopardize the security of information stored in andtransmitted through computer systems and mobile devices of our customers. Actual or perceived concerns that our systems may be vulnerable to such attacks ordisruptions may deter customers from using our services. As a result, we may be required to expend significant resources to protect against the threat of thesesecurity breaches or to alleviate problems caused by these breaches, which could adversely affect our results of operations.If we do not continually enhance our solutions and service offerings, we may have difficulty in retaining existing customers and attracting new customers.We believe that our future success will depend, to a significant extent, upon our ability to enhance our existing applications and platform, and to introducenew features to meet the preferences and requirements of our customers in a rapidly developing and evolving market. Unexpected technical, operational, distributionor other problems could delay or prevent the introduction of one or more of these products or services, or any products or services that we may plan to introduce inthe future. Our present or future products may not satisfy the evolving preferences and tastes of our customers, and these solutions and services may not achieveanticipated market acceptance or generate incremental revenue. If we are unable to anticipate or respond adequately to the need for service or productenhancements due to resource, technological or other constraints, our business, financial condition and results of operations could be materially and adverselyaffected.5If we are unable to develop competitive new products and service offerings our future results of operations could be adversely affected.Our future revenue stream depends to a large degree on our ability to utilize our technology in a way that will allow us to offer new types of mobileapplications and services to a broader customer base. We will be required to make investments in research and development in order to continually develop newsoftware applications and related service offerings, enhance our existing platform, mobile applications and related service offerings and achieve market acceptanceof our mobile applications and service offerings. We may incur problems in the future in innovating and introducing new mobile applications and service offerings.Our developmentstage mobile applications may not be successfully completed or, if developed, may not achieve significant customer acceptance. If we are unableto successfully define, develop and introduce competitive new mobile applications, and enhance existing mobile applications, our future results of operations wouldbe adversely affected. The timely availability of new applications and their acceptance by customers are important to our future success. A delay in the developmentof new applications could have a significant impact on its results of operations.Changes in technology could adversely affect our business by increasing our costs, reducing our profit margins and causing a decline in our competitiveness.China’s wireless telecom industry, in which we operate, is characterized by rapidly changing technology, evolving industry standards, frequentintroductions of new services and solutions and enhancements as well as changing customer demands. New solutions and new technologies often render existingsolutions and services obsolete, excessively costly or otherwise unmarketable. As a result, our success depends on our ability to adapt to the latest technologicalprogress, such as the 5G standard and technologies, and to develop or acquire and integrate new technologies into our platform, mobile applications and relatedservices. Advances in technology also require us to commit substantial resources to developing or acquiring and then deploying new technologies for use in ouroperations. We must continuously train personnel in new technologies and in how to integrate existing hardware and software systems with these newtechnologies. We may not be able to adapt quickly to new technologies or commit sufficient resources to compete successfully against existing or new competitorsin bringing to market solutions and services that incorporate these new technologies. We may incur problems in the future in innovating and introducing new mobileapplications and service offerings. Our development of new mobile applications and platform enhancements may not be successfully completed or, if developed,may not achieve significant customer acceptance. If we fail to adapt to changes in technologies and compete successfully against established or new competitors,our business, financial condition and results of operations could be adversely affected.Problems with the quality or performance of our hardware, software or other systems may cause delays in the introduction of new solutions or result in the lossof customers and revenues, which could have a material and adverse effect on our business, financial condition and results of operations.Our hardware and software systems are complex and may contain defects, errors or bugs when first introduced to the market or to a particular customer, oras new versions are released. Because we cannot test for all possible scenarios, our systems may contain errors that are not discovered until after they have beeninstalled or implemented, and we may not be able to timely correct these problems. These defects, errors or bugs could interrupt or delay the completion of projectsor sales to our customers. In addition, our reputation may be damaged and we may fail to acquire new projects from existing customers or new customers. Errors mayoccur when we provide systems integration and maintenance services. Even in cases where we have agreements with our customers that contain provisionsdesigned to limit our exposure to potential claims and liabilities arising from customer problems, these provisions may not effectively protect us against such claimsin all cases and in all jurisdictions. In addition, as a result of business and other considerations, we may undertake to compensate our customers for damages arisingfrom the use of our solutions, even if our liability is limited by these provisions. Moreover, claims and liabilities arising from customer problems could also result inadverse publicity and materially and adversely affect our business, results of operations and financial condition. We currently do not carry any product or serviceliability insurance and any imposition of liability on us may materially and adversely affect our business and increase our costs, resulting in reduced revenues andprofitability.Our products may contain undetected software defects, which could negatively affect our revenues.Our software products are complex and may contain undetected defects. Although we test our products, it is possible that errors may be found or occur inour new or existing products after we have commenced commercial shipment of those products. Defects, whether actual or perceived, could result in adversepublicity, loss of revenues, product returns, a delay in market acceptance of our products, loss of competitive position or claims against us by customers. Any suchproblems could be costly to remedy and could cause interruptions, delays, or cessation of our product sales, which could cause us to lose existing or prospectivecustomers and could negatively affect our results of operations.6We may be subject to infringement, misappropriation and indemnity claims in the future, which may cause us to incur significant expenses, pay substantialdamages and be prevented from providing our services or technologies.Our success depends, in part, on our ability to carry out our business without infringing the intellectual property rights of third parties. Patent andcopyright law covering softwarerelated technologies is evolving rapidly and is subject to a great deal of uncertainty. Our selfdeveloped or licensed technologies,processes or methods may be covered by thirdparty patents or copyrights, either now existing or to be issued in the future. Any potential litigation may cause us toincur significant expenses. Thirdparty claims, if successfully asserted against us may cause us to pay substantial damages, seek licenses from third parties, payongoing royalties, redesign our services or technologies, or prevent us from providing services or technologies subject to these claims. Even if we were to prevail,any litigation would likely be costly and timeconsuming and divert the attention of our management and key personnel from our business operations.Our failure to protect our intellectual property rights may undermine our competitive position, and subject us to costly litigation to protect our intellectualproperty rights.Any misappropriation of our technology or the development of competitive technology could seriously harm our business. We regard a substantial portionof our hardware and software systems as proprietary and rely on statutory copyright, trademark, patent, trade secret laws, customer license agreements, employeeand thirdparty nondisclosure agreements and other methods to protect our proprietary rights. Nevertheless, these resources afford only limited protection and theactions we take to protect our intellectual property rights may not be adequate. In particular, third parties may infringe or misappropriate our proprietarytechnologies or other intellectual property rights, which could have a material adverse effect on our business, financial condition and results of operations. Inaddition, intellectual property rights and confidentiality protection in China may not be as effective as in the United States, and policing unauthorized use ofproprietary technology can be difficult and expensive. Further, litigation may be necessary to enforce our intellectual property rights, protect our trade secrets ordetermine the validity and scope of the proprietary rights of others. The outcome of any such litigation may not be in our favor. Any such litigation may be costlyand may divert management attention, as well as our other resources, away from our business. An adverse determination in any such litigation will impair ourintellectual property rights and may harm our business, prospects and reputation. In addition, we have no insurance coverage against litigation costs and wouldhave to bear all litigation costs in excess of the amount recoverable from other parties. The occurrence of any of the foregoing could have a material adverse effecton our business, financial condition and results of operations. Our solutions incorporate a portion of, and work in conjunction with, thirdparty hardware and software solutions. If these thirdparty hardware or softwaresolutions are not available to us at reasonable costs, or at all, our results of operations could be adversely impacted.Although our hardware and software systems and mobile applications primarily rely on our own core technologies, some elements of our systemsincorporate a small portion of thirdparty hardware and software solutions. If any third party were to discontinue making their intellectual property available to us orour customers on a timely basis, or increase materially the cost of their licensing such intellectual property, or if our systems or applications failed to properlyfunction or interoperate with replacement intellectual property, we may need to incur costs in finding replacement thirdparty solutions and/or redesigning oursystems or applications to replace or function with or on replacement thirdparty proprietary technology. Replacement technology may not be available on termsacceptable to us or at all, and we may be unable to develop alternative solutions or redesign our systems or applications on a timely basis or at a reasonable cost. Ifany of these were to occur, our results of operations could be adversely impacted.7Our ability to sell our products is highly dependent on the quality of our service and support offerings, and our failure to offer high quality service could have amaterial adverse effect on our ability to market and sell our products.Our customers depend upon our customer service and support staff to resolve issues relating to our products. Highquality support services are critical forthe successful marketing and sale of our products. If we fail to provide highquality support on an ongoing basis, our customers may react negatively and we maybe materially and adversely affected in our ability to sell additional products to these customers. This could also damage our reputation and prospects with potentialcustomers. Our failure to maintain highquality support services could have a material and adverse effect on our business, results of operations and financialcondition.Weaknesses in our internal controls over financial reporting or disclosure controls and procedures may have a material adverse effect on our business, theprice of our ordinary shares, operating results and financial condition.We are required to establish and maintain appropriate internal controls over financial reporting and disclosure controls and procedures. Pursuant to Section404 of the SarbanesOxley Act of 2002 and the related rules adopted by the Securities and Exchange Commission, every public company is required to include amanagement report on its internal controls over financial reporting in its transition report, which contains management’s assessment of the effectiveness of thecompany’s internal controls over financial reporting. This requirement first applied to our annual report on Form 20F for the fiscal year ended on September 30,2011. In connection with our assessments of our disclosure controls and procedures and internal controls over financial reporting, management concluded that as ofSeptember 30, 2018, our disclosure controls and procedures and our internal controls over financial reporting were not effective due to lack of U.S. generallyaccepted accounting principles (“U.S. GAAP”) expertise in our current accounting team. Please refer to the discussion under Item 15, “Controls and Procedures” forfurther discussion of our material weakness as of December 31, 2017. Should we be unable to remediate the material weakness promptly and effectively, suchweakness could harm our operating results, result in a material misstatement of our financial statements, cause us to fail to meet our financial reporting obligations orprevent us from providing reliable and accurate financial reports or avoiding or detecting fraud. This, in turn, could result in a loss of investor confidence in theaccuracy and completeness of our financial reports, which could have an adverse effect on the trading price of our ordinary shares. Any litigation or otherproceeding or adverse publicity relating to the material weaknesses could have a material adverse effect on our business and operating results. We have very limited insurance coverage which could expose us to significant costs and business disruption.We do not maintain any insurance coverage for our leased properties. Should any natural catastrophes such as earthquakes, floods, typhoons or any actsof terrorism occur in Beijing, China, where our head office is located and most of our employees are based, or elsewhere in China, we might suffer not onlysignificant property damages, but also loss of revenues due to interruptions in our business operations, which could have a material adverse effect on our business,operating results or financial condition.The insurance industry in China is still at an early stage of development. Insurance companies in China offer limited business insurance products, and donot, to our knowledge, offer business liability insurance. As a result, we do not have any business liability insurance coverage for our operations. Moreover, whilebusiness disruption insurance is available, we have determined that the risks of disruption and cost of the insurance are such that we do not require it at this time.Any business disruption, litigation or natural disaster might result in substantial costs and diversion of resources, particularly if it affects our technology platformswhich we depend on for delivery of our software and services, and could have a material adverse effect on our financial condition and results of operations.We may be liable to our customers for damages caused by unauthorized disclosure of sensitive and confidential information, whether through our employees orotherwise.We are typically required to manage, utilize and store sensitive or confidential customer data in connection with the products and services we provide.Under the terms of our customer contracts, we are required to keep such information strictly confidential. We seek to implement specific measures to protectsensitive and confidential customer data. We require our employees to enter into nondisclosure agreements to limit such employees’ access to, and distribution of,our customers’ sensitive and confidential information and our own trade secrets. We can give no assurance that the steps taken by us in this regard will be adequateto protect our customers’ confidential information. If our customers’ proprietary rights are misappropriated by our employees, in violation of any applicableconfidentiality agreements or otherwise, our customers may consider us liable for that act and seek damages and compensation from us. However, we currently donot have any insurance coverage for mismanagement or misappropriation of such information by our employees. Any litigation with respect to unauthorizeddisclosure of sensitive and confidential information might result in substantial costs and diversion of resources and management attention.8We may face intellectual property infringement claims that could be timeconsuming and costly to defend. If we fail to defend ourselves against such claims, wemay lose significant intellectual property rights and may be unable to continue providing our existing products and services.It is critical that we use and develop our technology and products without infringing upon the intellectual property rights of third parties, includingpatents, copyrights, trade secrets and trademarks. Intellectual property litigation is expensive and timeconsuming and could divert management’s attention from ourbusiness. A successful infringement claim against us, whether with or without merit, could, among others things, require us to pay substantial damages, developnoninfringing technology, or rebrand our name or enter into royalty or license agreements that may not be available on acceptable terms, if at all, and cease making,licensing or using products that have infringed a third party’s intellectual property rights. Protracted litigation could also result in existing or potential customersdeferring or limiting their purchase or use of our products until resolution of such litigation, or could require us to indemnify our customers against infringementclaims in certain instances. Also, we may be unaware of intellectual property registrations or applications relating to our services that may give rise to potentialinfringement claims against us. Parties making infringement claims may be able to obtain an injunction to prevent us from delivering our services or usingtechnology containing the allegedly infringing intellectual property. Any intellectual property litigation could have a material adverse effect on our business, resultsof operations or financial condition. Seasonality and fluctuations in our customers’ spending cycle and other factors can cause our revenues and operating results to vary significantly from quarterto quarter and from year to year.Our revenues and operating results will vary significantly from quarter to quarter and from year to year due to a number of factors, many of which areoutside of our control. Our new lines of business acquired upon the consummation of the asset exchange transaction discussed below see higher customer use andactivity during the Chinese New Year holiday than other times during the year when rail travel is high, which lead to higher revenue during this period as morecustomers would like to place more advertising. Due to these and other factors, our operating results may fluctuate significantly from quarter to quarter and fromyear to year. These fluctuations are likely to continue in the future, and operating results for any period may not be indicative of our future performance in any futureperiod.Our corporate actions are substantially controlled by our principal shareholders, who can cause us to take actions in ways you may not agree with.Mr. Xuesong Song, our chairman, chief executive officer and a member of our board of directors, beneficially owns 19.31% of our outstanding ordinaryshares and 1,000,000 preferred shares, and each preferred share has the right to 399 votes at a meeting of the members of the Company. Our officers and directors asa group beneficially own an aggregate of approximately 33.69% of our outstanding ordinary shares. These shareholders, acting individually or as a group, couldexert control and substantial influence over matters such as electing directors, amending our constitutional documents, and approving acquisitions, mergers or otherbusiness combination transactions. This concentration of ownership and voting power may also discourage, delay or prevent a change in control of our company,which could deprive our shareholders of an opportunity to receive a premium for their shares as part of a sale of our company and might reduce the price of ourshares. Alternatively, our controlling shareholders may cause a merger, consolidation or change of control transaction even if it is opposed by our othershareholders, including those who purchase shares in this offering.9We depend on a small number of customers to derive a significant portion of our revenues. If we were to become dependent again upon a few customers, suchdependency could negatively impact our business, operating results and financial condition.We derived a material portion of our revenues from a small number of customers. In the years ended December 31, 2017 and 2016, our five largestcustomers accounted for 99.8% and 78.5% of our total sales, respectively, and our largest customer Guangdong Zhanshi Media Advertising Co., Ltd. accounted forapproximately 80.8% of our total sales during for the fiscal year ended December 31, 2017. As our customer base may change from yeartoyear, during such yearsthat the customer base is highly concentrated, the fluctuation of our sales to any of such major customers could have a material adverse effect on our business,operating results and financial condition. Moreover, our high customer base concentration may also adversely affect our ability to negotiate contract prices withthese customers, which may in turn materially and adversely affect our results of operations.Our historical outstanding accounts receivable have been relatively high. Inability to collect our accounts receivable on a timely basis, if at all, couldmaterially and adversely affect our financial condition, liquidity and results of operations.Historically, our outstanding accounts receivable have been relatively high. As of December 31, 2017 and 2016, our outstanding accounts receivable beforeimpairment were $10.4 million and $2.10 million, respectively. Although we conduct credit evaluations of our customers, we generally do not require collateral orother security from our customers. In addition, we have had a relatively high customer concentration. The outstanding accounts receivable balance for our largestcustomer was 45.3% and 38.5% of our total accounts receivable balance as of December 31, 2017 and 2016, respectively. As a result, an extended delay or default inpayment relating to a significant account would likely have a material and adverse effect on the aging schedule and turnover days of our accounts receivable. Ourinability to collect our accounts receivable on a timely basis, if at all, could materially and adversely affect our financial condition, liquidity and results of operations.Risks Related to Doing Business in ChinaAdverse changes in political and economic policies of the PRC government could have a material adverse effect on the overall economic growth of China,which could reduce the demand for our services and materially and adversely affect our competitive position.Substantially all of our business operations are conducted in China. Accordingly, our business, results of operations, financial condition and prospects aresubject to a significant degree to economic, political and legal developments in China. Although the Chinese economy is no longer a planned economy, the PRCgovernment continues to exercise significant control over China’s economic growth through direct allocation of resources, monetary and tax policies, and a host ofother government policies such as those that encourage or restrict investment in certain industries by foreign investors, control the exchange between RMB andforeign currencies, and regulate the growth of the general or specific market. These government involvements have been instrumental in China’s significant growthin the past 30 years. The reorganization of the telecommunications industry encouraged by the PRC government has directly affected our industry and our growthprospect. In response to the recent global and Chinese economic downturn, the PRC government has adopted policy measures aimed at stimulating the economicgrowth in China. If the PRC government’s current or future policies fail to help the Chinese economy achieve further growth or if any aspect of the PRCgovernment’s policies limits the growth of the telecommunications industry in China or our industry or otherwise negatively affects our business, our growth rate orstrategy, our results of operations could be adversely affected as a result. Our business benefits from certain government tax incentives. Expiration, reduction or discontinuation of, or changes to, these incentives will increase our taxburden and reduce our net income.Under the PRC Enterprise Income Tax Law passed in 2007 and the implementing rules, both of which became effective on January 1, 2008, or the New EITLaw, a unified enterprise income tax rate of 25% and unified tax deduction standard is applied equally to both domesticinvested enterprises and foreigninvestedenterprises, or FIEs. Enterprises established prior to March 16, 2007 eligible for preferential tax treatment in accordance with the then tax laws and administrativeregulations shall gradually become subject to the New EIT Law rate over a fiveyear transition period starting from the date of effectiveness of the New EIT Law.However, certain qualifying hightechnology enterprises may still benefit from a preferential tax rate of 15% if they own their core intellectual properties and they areenterprises in certain Statesupported hightech industries to be later specified by the government. As a result, if our PRC subsidiaries qualify as “hightechnologyenterprises,” they will continue to benefit from the preferential tax rate of 15%, subject to transitional rules implemented from January 1, 2008. Our subsidiary, BeijingZhong Chuan Shi Xun Technology Limited, is qualified as a “hightechnology enterprise” until the end of the November 2018, and therefore it had benefited fromthe preferential tax rate of 15%, subject to transitional rules implemented on January 1, 2008. Although we intend to apply for a renewal of this qualification, if BeijingZhong Chuan Shi Xun ceases to qualify as a “hightechnology enterprise”, or the tax authorities change their position on our preferential tax treatments in thefuture, our future tax liabilities may materially increase, which could materially and adversely affect our financial condition and results of operations.10If we were deemed a “resident enterprise” by PRC tax authorities, we could be subject to tax on our global income at the rate of 25% under the New EIT Lawand our nonPRC shareholders could be subject to certain PRC taxes.Under the New EIT Law and the implementing rules, both of which became effective January 1, 2008, an enterprise established outside of the PRC with “defacto management bodies” within the PRC may be considered a PRC “resident enterprise” and will be subject to the enterprise income tax at the rate of 25% on itsglobal income as well as PRC enterprise income tax reporting obligations. The implementing rules of the New EIT Law define “de facto management” as “substantialand overall management and control over the production and operations, personnel, accounting, and properties” of the enterprise. However, as of the date of thistransition report, no final interpretations on the implementation of the “resident enterprise” designation are available. Moreover, any such designation, when madeby PRC tax authorities, will be determined based on the facts and circumstances of individual cases. Therefore, if we were to be considered a “resident enterprise”by the PRC tax authorities, our global income would be taxable under the New EIT Law at the rate of 25% and, to the extent we were to generate a substantial amountof income outside of PRC in the future, we would be subject to additional taxes. In addition, the dividends we pay to our nonPRC enterprise shareholders and gainsderived by such shareholders or ADS or ordinary share holders from the transfer of our shares or ADSs may also be subject to PRC withholding tax at the rate up to10%, if such income were regarded as Chinasourced income.Our holding company structure may limit the payment of dividends.We have no direct business operations, other than our ownership of our subsidiaries. While we have no current intention of paying dividends, should wedecide in the future to do so, as a holding company, our ability to pay dividends and meet other obligations depends upon the receipt of dividends or otherpayments from our operating subsidiaries and other holdings and investments. Current PRC regulations permit our PRC subsidiaries to pay dividends to us only outof their accumulated profits, if any, determined in accordance with Chinese accounting standards and regulations. In addition, each of our subsidiaries in China isrequired to set aside at least 10% of its aftertax profits each year, if any, to fund a statutory reserve until such reserve reaches 50% of its registered capital. Thesereserves are not distributable as cash dividends. Furthermore, if our subsidiaries in China incur debt on their own behalf in the future, the instruments governing thedebt may restrict their ability to pay dividends or make other payments to us. As a result, there may be limitations on the ability of our PRC subsidiaries to paydividends or make other investments or acquisitions that could be beneficial to our business or otherwise fund and conduct our business.In addition, under the New EIT Law and the implementing rules that became effective on January 1, 2008, dividends generated from the business of our PRCsubsidiaries after January 1, 2008 and payable to us may be subject to a withholding tax rate of 10% if the PRC tax authorities subsequently determine that we are anonresident enterprise, unless there is a tax treaty with China that provides for a different withholding arrangement.Uncertainties with respect to the PRC legal system could adversely affect us.We conduct all of our business through our subsidiaries in China. Our operations in China are governed by PRC laws and regulations. Our PRCsubsidiaries are generally subject to laws and regulations applicable to foreign investments in China and, in particular, laws and regulations applicable to whollyforeignowned enterprises. The PRC legal system is based on statutes. Prior court decisions may be cited for reference but have limited precedential value.11Since 1979, PRC legislation and regulations have significantly enhanced the protections afforded to various forms of foreign investments in China.However, China has not developed a fully integrated legal system and recently enacted laws and regulations may not sufficiently cover all aspects of economicactivities in China. In particular, because these laws and regulations are relatively new, and because of the limited volume of published decisions and theirnonbinding nature, the interpretation and enforcement of these laws and regulations involve uncertainties. In addition, the PRC legal system is based in part ongovernment policies and internal rules (some of which are not published on a timely basis or at all) that may have a retroactive effect. As a result, we may not beaware of our violation of these policies and rules until some time after the violation. In addition, any litigation in China may be protracted and result in substantialcosts and diversion of resources and management attention.PRC regulation of loans and direct investment by offshore holding companies to PRC entities may delay or prevent us from using the proceeds of our May2010 public offering to make loans or additional capital contributions to our PRC operating subsidiaries, which could materially and adversely affect ourliquidity and our ability to fund and expand our business.In utilizing the proceeds of our May 2010 public offering as an offshore holding company of our PRC operating subsidiaries, we may make loans to our PRCsubsidiaries, or we may make additional capital contributions to our PRC subsidiaries. Any loans to our PRC subsidiaries are subject to PRC regulations. Forexample, loans by us to our subsidiaries in China, which are FIEs, to finance their activities cannot exceed statutory limits and must be registered with the StateAdministration of Foreign Exchange, or SAFE. On August 29, 2008, SAFE promulgated Circular 142, a notice regulating the conversion by a foreigninvestedcompany of foreign currency into RMB by restricting how the converted RMB may be used. The notice requires that RMB converted from the foreign currencydenominated capital of a foreigninvested company may only be used for purposes within the business scope approved by the applicable governmental authorityand may not be used for equity investments within the PRC unless specifically provided for otherwise. The foreign currencydenominated capital shall be verified byan accounting firm before converting into RMB. In addition, SAFE strengthened its oversight over the flow and use of RMB funds converted from the foreigncurrencydenominated capital of a foreigninvested company. To convert such capital into RMB, the foreigninvested company must report the use of such RMB tothe bank, and the RMB must be used to the reported purposes. According to Circular 142, change of the use of such RMB without approval is prohibited. Inaddition, such RMB may not be used to repay RMB loans if the proceeds of such loans have not yet been used. Violations of Circular 142 may result in severepenalties, including substantial fines as set forth in the Foreign Exchange Administration Rules.We may also decide to finance our subsidiaries by means of capital contributions. These capital contributions may need approval from the PRC Ministry ofCommerce, or MOFCOM, or its local counterpart. We may not be able to obtain these government approvals on a timely basis, if at all, with respect to future capitalcontributions by us to our PRC subsidiaries. If we fail to receive such approvals in such cases when approval is required, our ability to use the proceeds of our May2010 public offering and to capitalize our PRC operations may be negatively affected, which could adversely affect our liquidity and our ability to fund and expandour business.Governmental control of currency conversion may affect the value of your investment.The PRC government imposes controls on the convertibility of the RMB into foreign currencies and, in certain cases, the remittance of currency out ofChina. We receive substantially all of our revenues in RMB. Under our current corporate structure, our income is primarily derived from dividend payments from ourPRC subsidiaries. Shortages in the availability of foreign currency may restrict the ability of our PRC subsidiaries to remit sufficient foreign currency to paydividends or other payments to us, or otherwise satisfy their foreign currency denominated obligations. Under existing PRC foreign exchange regulations, paymentsof current account items, including profit distributions, interest payments and expenditures from traderelated transactions, can be made in foreign currencieswithout prior approval from SAFE by complying with certain procedural requirements. However, approval from appropriate government authorities is required whereRMB is to be converted into foreign currency and remitted out of China to pay capital expenses such as the repayment of loans denominated in foreign currencies.The PRC government may also at its discretion restrict access in the future to foreign currencies for current account transactions. If the foreign exchange controlsystem prevents us from obtaining sufficient foreign currency to satisfy our currency demands, we may not be able to pay dividends in foreign currencies to ourshareholders, including holders of our ADSs or ordinary shares.12Fluctuation in the value of the RMB may have a material adverse effect on the value of your investment.The value of the RMB against the U.S. dollar and other currencies may fluctuate and is affected by, among other things, changes in political and economicconditions. On July 21, 2005, the PRC government changed its decadeold policy of pegging the value of the RMB to the U.S. dollar. Under the new policy, the RMBis permitted to fluctuate within a narrow and managed band against a basket of certain foreign currencies. This change in policy has resulted in an approximate26.8% appreciation of the RMB against the U.S. dollar between July 21, 2005 and September 30, 2015. Provisions on Administration of Foreign Exchange, asamended in August 2008, further changed China’s exchange regime to a managed floating exchange rate regime based on market supply and demand. Since reachinga high against the U.S. dollar in July 2008, however, the RMB has traded within a narrow band against the U.S. dollar, remaining within 1% of its July 2008 high butnever exceeding it. As a consequence, the RMB has fluctuated sharply since July 2008 against other freelytraded currencies, in tandem with the U.S. dollar. InAugust 2015, the PRC Government devalued its currency by approximately 3%, representing the largest yuan depreciation for 20 years. Concerns remain thatChina’s slowing economy, and in particular its exports, will need a stimulus that can only come from further cuts in the exchange rate.It is difficult to predict how long the current situation may continue and when and how it may change again as the People’s Bank of China may regularlyintervene in the foreign exchange market to achieve economic policy goals. Substantially all of our revenues and costs are denominated in the RMB, and asignificant portion of our financial assets are also denominated in RMB. We principally rely on dividends and other distributions paid to us by our subsidiaries inChina. Any significant revaluation of the RMB may materially and adversely affect our cash flows, revenues, earnings and financial position, and the value of, andany dividends payable on, our ADSs or ordinary shares in U.S. dollars. Any fluctuations of the exchange rate between the RMB and the U.S. dollar could also resultin foreign currency translation losses for financial reporting purposes.PRC laws and regulations governing our businesses. If we are found to be in violation of such PRC laws and regulations, we could be subject to sanctions. Inaddition, changes in such PRC laws and regulations may materially and adversely affect our business.There are substantial uncertainties regarding the interpretation and application of PRC laws and regulations, including, but not limited to, the laws andregulations governing our business. These laws and regulations are relatively new and may be subject to change, and their official interpretation and enforcementmay involve substantial uncertainty. The effectiveness of newly enacted laws, regulations or amendments may be delayed, resulting in detrimental reliance byforeign investors. New laws and regulations that affect existing and proposed future businesses may also be applied retroactively.The PRC government has broad discretion in dealing with violations of laws and regulations, including levying fines, revoking business and other licensesand requiring actions necessary for compliance. In particular, licenses and permits issued or granted to us by relevant governmental bodies may be revoked at a latertime by higher regulatory bodies. We cannot predict the effect of the interpretation of existing or new PRC laws or regulations on our businesses. We cannot assureyou that our current ownership and operating structure would not be found in violation of any current or future PRC laws or regulations. As a result, we may besubject to sanctions, including fines, and could be required to restructure our operations or cease to provide certain services. In addition, any litigation in China maybe protracted and result in substantial costs and diversion of resources and management attention. Any of these or similar actions could significantly disrupt ourbusiness operations or restrict us from conducting a substantial portion of our business operations, which could materially and adversely affect our business,financial condition and results of operations.13If we were required to obtain the prior approval of the China Securities Regulatory Commission, or CSRC, of the listing and trading of our ADSs on theNASDAQ Capital Market, we may face regulatory actions or other sanctions from the CSRC or other PRC regulatory agencies.On August 8, 2006, six PRC regulatory agencies, including the Ministry of Commerce, the State Assets Supervision and Administration Commission, theState Administration for Taxation, the State Administration for Industry and Commerce, the CSRC and the SAFE, jointly issued the Regulations on Mergers andAcquisitions of Domestic Enterprises by Foreign Investors, which became effective on September 8, 2006 (the “New M&A Rules”). This regulation, among otherthings, includes provisions that purport to require that an offshore special purpose vehicle formed for the purposes of overseas listing of equity interests in PRCcompanies and controlled directly or indirectly by PRC companies or individuals obtain the approval of the CSRC prior to the listing and trading of such specialpurpose vehicle’s securities on an overseas stock exchange. On September 21, 2006, the CSRC published on its official website procedures regarding its approval ofoverseas listings by special purpose vehicles. The CSRC approval procedures require the filing of a number of documents with the CSRC and it would take severalmonths to complete the approval process, if practicable at all. The application of this new PRC regulation remains unclear with no consensus currently existingamong leading PRC law firms regarding the scope of the applicability of the CSRC approval requirement. Prior to our May 2010 initial public offering, our PRC counsel has advised us that, based on its understanding of the current PRC laws and regulations aswell as the procedures announced on September 21, 2006: (i) Softech was directly incorporated by Topsky as a foreign investment enterprise under PRC law;therefore, there was no acquisition of the equity of a “PRC domestic company” as defined under the New M&A Rules; and (ii) the contractual arrangementsbetween Kingtone Information and Softech were not clearly defined and considered as the transaction which shall be applied to the New M&A Rules. Therefore, wedid not seek prior CSRC approval for our initial public offering.However, if the CSRC required that we obtain its approval prior to the completion of our initial public offering and the listing of our ADSs on the NASDAQCapital Market, we may face regulatory actions or other sanctions from the CSRC or other PRC regulatory agencies. These regulatory agencies may impose fines andpenalties on our operations in the PRC, limit our operating privileges in the PRC, delay or restrict the repatriation of the proceeds from our initial public offering intothe PRC, or take other actions that could have a material adverse effect on our business, financial condition, results of operations, reputation and prospects, as wellas the trading price of our shares.Also, if the CSRC requires that we obtain its approval, we may be unable to obtain a waiver of the CSRC approval requirements if and when procedures areestablished to obtain such a waiver. Any uncertainties and/or negative publicity regarding this CSRC approval requirement could have a material adverse effect onthe trading price of our shares.PRC regulations relating to the establishment of offshore special purpose companies by PRC residents may subject our PRC resident shareholders to penaltiesand limit our ability to inject capital into our PRC subsidiaries, limit our PRC subsidiaries’ ability to distribute profits to us, or otherwise adversely affect us.On October 21, 2005, the SAFE issued the Notice on Issues Relating to the Administration of Foreign Exchange in Fundraising and Reverse InvestmentActivities of Domestic Residents Conducted via Offshore Special Purpose Companies, or Notice 75, which became effective as of November 1, 2005. According toNotice 75, prior registration with the local SAFE branch is required for PRC residents to establish or to control an offshore company for the purposes of financingsuch offshore company with assets or equity interests in an onshore enterprise located in the PRC, or an offshore special purpose company. An amendment toregistration or filing with the local SAFE branch by such PRC resident is also required for the injection of equity interests or assets of an onshore enterprise in theoffshore special purpose company or overseas funds raised by such offshore company, or any other material change involving a change in the capital of theoffshore special purpose company. Moreover, Notice 75 applies retroactively. As a result, PRC residents who have established or acquired control of offshorespecial purpose companies that have made onshore investments in the PRC in the past are required to have completed the relevant registration procedures with thelocal SAFE branch by March 31, 2006. To further clarify the implementation of Notice 75, the SAFE issued Circular 106 on May 29, 2007. Under Circular 106, PRCsubsidiaries of an offshore special purpose company are required to coordinate and supervise the filing of SAFE registrations by the offshore holding company’sshareholders or beneficial owners who are PRC residents in a timely manner.14Some of our current shareholders and/or beneficial owners may fall within the ambit of the SAFE notice and be required to register with the local SAFEbranch as required under the SAFE notice. If so required, and if such shareholders and/or beneficial owners fail to timely register their SAFE registrations pursuantto the SAFE notice, or if future shareholders and/or beneficial owners of our company who are PRC residents fail to comply with the registration procedures setforth in the SAFE notice, this may subject such shareholders, beneficial owners and/or our PRC subsidiaries to fines and legal sanctions and may also limit ourability to contribute additional capital into our PRC subsidiaries, limit our PRC subsidiaries’ ability to distribute dividends to our company, or otherwise adverselyaffect our business.Risks Associated with our ADSs and Ordinary SharesOur securities are not currently traded on any United States public markets and you may not be able to resell your securities for some time.There is currently no public market for our ordinary shares or American Depository Shares (“ADSs”) in the United States or in any other jurisdiction. OurADSs were voluntarily delisted from the NASDAQ Capital Market on September 19, 2018. We have applied to NASDAQ for the listing of our ordinary shares on theNASDAQ Capital Market and received an approval for listing of Ordinary Shares on August 6, 2018, and as of the date of this transition report, that application andapproval are currently under review. We cannot assume that our ordinary shares will be accepted for listing on the NASDAQ Capital Market, or if listed, that wewould continue to meet the applicable minimum listing requriements. You may not be able to sell your ordinary shares quickly or at all if we are unable to gain listingon a public market in the United States.The market price of our ADSs has historically been highly volatile, and you may not be able to resell our ordinary shares at or above your initial purchaseprice.There may be a limited public market for our ordinary shares and, as discussed above, our ADSs are no longer listed on any public market in the UnitedStates or any other jurisdiction. We cannot assure you that there will be an active trading market for our ordinary shares in the future. If our ordinary shares areaccepted for listing on a public market, you may not be able to sell your ordinary shares quickly or at the market price if trading in our ordinary shares is not active. The trading price of our ADSs and ordinary shares may be volatile. The price of our ADSs and ordinary shares could be subject to wide fluctuations inresponse to a variety of factors, including the following:1.Introduction of new products, services or technologies offered by us or our competitors;2.Failure to meet or exceed revenue and financial projections we provide to the public;3.Actual or anticipated variations in quarterly operating results;4.Failure to meet or exceed the estimates and projections of the investment community;5.General market conditions and overall fluctuations in United States equity markets;6.Announcements of significant acquisitions, strategic partnerships, joint ventures or capital commitments by us or our competitors;7.Disputes or other developments relating to proprietary rights, including patents, litigation matters and our ability to obtain patent protection for ourtechnologies;8.Additions or departures of key management personnel;9.Issuances of debt or equity securities;10.Significant lawsuits, including patent or shareholder litigation;11.Changes in the market valuations of similar companies;12.Sales of additional ordinary shares or other securities by us or our shareholders in the future;13.Trading volume of our ordinary shares;14.Fluctuations in the exchange rate between the U.S. dollar and Renminbi;15.Negative market perception and media coverage of our company or other companies in the same or similar industry with us; and16.Other events or factors, many of which are beyond our control.15In addition, the stock market in general, and the NASDAQ Capital Market and software products and services companies in particular, have experiencedextreme price and volume fluctuations that have often been unrelated or disproportionate to the operating performance of these companies. Broad market andindustry factors may negatively affect the market price of our ordinary shares, regardless of our actual operating performance. Our ADSs and ordinary shares may be subject to the SEC’s penny stock rules which may make it difficult for brokerdealers to complete customer transactionsand trading activity in our securities.Our ADSs and ordinary shares may be deemed to be “penny stock” as that term is defined under the Securities Exchange Act of 1934, as amended. Pennystocks generally are equity securities with a price of less than $5.00 (other than securities registered on certain national securities exchanges or quoted on theNASDAQ system, provided that current price and volume information with respect to transactions in such securities is provided by the exchange or system). Pennystock rules impose additional sales practice requirements on brokerdealers who sell to persons other than established customers and “accredited investors.” Theterm “accredited investor” refers generally to institutions with assets in excess of $5,000,000 or individuals with a net worth in excess of $1,000,000 or annual incomeexceeding $200,000 or $300,000 jointly with their spouse in each of the prior two years.The penny stock rules require a brokerdealer, prior to a transaction in a penny stock not otherwise exempt from the rules, to deliver a standardized riskdisclosure document in a form prepared by the SEC, which provides information about penny stocks and the nature and level of risks in the penny stockmarket. Moreover, brokerdealers are required to determine whether an investment in a penny stock is a suitable investment for a prospective investor. A brokerdealer must receive a written agreement to the transaction from the investor setting forth the identity and quantity of the penny stock to be purchased. Theserequirements may make it more difficult for brokerdealers to effectuate customer transactions and trading activity in our securities. As a result, the market price ofour ADSs and ordinary shares may be depressed, and you may find it more difficult to sell our ADSs or ordinary shares.Sales of a substantial number of ordinary shares or ADSs in the public market by our existing shareholders could cause the price of our ADSs to fall.Sales of a substantial number of our ordinary shares or ADSs in the public market or the perception that these sales might occur, could depress the marketprice of our ADSs and could impair our ability to raise capital through the sale of additional equity securities. We are unable to predict the effect that sales may haveon the prevailing market price of our ADSs.All of our existing shareholders prior to our May 2010 offering were subject to lockup agreements with the underwriters of the offering that restricted theshareholders’ ability to transfer ordinary shares or ADSs until expiration of the lockup period in November 2010. The lockup agreements limited the number ofordinary shares or ADSs that may be sold immediately following the public offering. Subject to certain limitations, approximately 1,000,000 of our total outstandingshares are now eligible for sale. Sales of ordinary shares by these shareholders could have a material adverse effect on the trading price of our ADSs.Future sales and issuances of our ordinary shares, or rights to purchase our ordinary shares, including pursuant to our 2010 Omnibus Incentive Plan, couldresult in additional dilution of the percentage ownership of our shareholders and could cause the price of our ordinary shares to fall.We expect that significant additional capital will be needed in the future to continue our planned operations. To the extent we raise additional capital byissuing equity securities, our shareholders may experience substantial dilution. We may sell ordinary shares, convertible securities or other equity securities in oneor more transactions at prices and in a manner we determine from time to time. If we sell ordinary shares, convertible securities or other equity securities in more thanone transaction, investors may be materially diluted by subsequent sales. Such sales may also result in material dilution to our existing shareholders, and newinvestors could gain rights superior to our existing shareholders.16We do not intend to pay dividends on our ordinary shares, so any returns will be limited to the value of our ADSs and ordinary shares.We have never declared or paid any cash dividend on our ordinary shares. We currently anticipate that we will retain future earnings for the development,operation and expansion of our business and do not anticipate declaring or paying any cash dividends for the foreseeable future. Any return shareholders willtherefore be limited to the value of their ADSs or ordinary shares.As the rights of shareholders under British Virgin Islands law differ from those under U.S. law, you may have fewer protections as a shareholder.Our corporate affairs will be governed by our memorandum of association and articles of association, the BVI Business Companies Act, 2004, or the BVIAct, of the British Virgin Islands and the common law of the British Virgin Islands. The rights of shareholders to take legal action against our directors, actions byminority shareholders and the fiduciary responsibilities of our directors under British Virgin Islands law are to a large extent governed by the BVI Act and thecommon law of the British Virgin Islands. The common law of the British Virgin Islands is derived in part from comparatively limited judicial precedent in the BritishVirgin Islands as well as from English common law, which has persuasive, but not binding, authority on a court in the British Virgin Islands. The rights of ourshareholders and the fiduciary responsibilities of our directors under British Virgin Islands law are not as clearly established as they would be under statutes orjudicial precedents in some jurisdictions in the United States. In particular, the British Virgin Islands has a less developed body of securities laws as compared to theUnited States, and some states (such as Delaware) have more fully developed and judicially interpreted bodies of corporate law.As a result of all of the above, holders of our ADSs and ordinary shares may have more difficulty in protecting their interests through actions against ourmanagement, directors or major shareholders than they would as shareholders of a U.S. company.British Virgin Islands companies may not be able to initiate shareholder derivative actions, thereby depriving shareholders of the ability to protect theirinterests.British Virgin Islands companies may not have standing to initiate a shareholder derivative action in a federal court of the United States. The circumstancesin which any such action may be brought, and the procedures and defenses that may be available in respect to any such action, may result in the rights ofshareholders of a British Virgin Islands company being more limited than those of shareholders of a company organized in the United States. Accordingly,shareholders may have fewer alternatives available to them if they believe that corporate wrongdoing has occurred. The British Virgin Islands courts are alsounlikely to recognize or enforce against us judgments of courts in the United States based on certain liability provisions of U.S. securities law; and to imposeliabilities against us, in original actions brought in the British Virgin Islands, based on certain liability provisions of U.S. securities laws that are penal in nature.There is no statutory recognition in the British Virgin Islands of judgments obtained in the United States, although the courts of the British Virgin Islands willgenerally recognize and enforce the nonpenal judgment of a foreign court of competent jurisdiction without retrial on the merits.The laws of the British Virgin Islands provide little protection for minority shareholders, so minority shareholders will have little or no recourse if theshareholders are dissatisfied with the conduct of our affairs.Under the law of the British Virgin Islands, there is little statutory law for the protection of minority shareholders other than the provisions of the BVI Actdealing with shareholder remedies. The principal protection under statutory law is that shareholders may bring an action to enforce the constituent documents ofthe corporation, our memorandum of association and articles of association. Shareholders are entitled to have the affairs of the company conducted in accordancewith the general law and the memorandum of association and articles of association.17There are common law rights for the protection of shareholders that may be invoked, largely dependent on English company law, since the common law ofthe British Virgin Islands is limited. Under the general rule pursuant to English company law known as the rule in Foss v. Harbottle, a court will generally refuse tointerfere with the management of a company at the insistence of a minority of its shareholders who express dissatisfaction with the conduct of the company’s affairsby the majority or the board of directors. However, every shareholder is entitled to have the affairs of the company conducted properly according to law and thecompany’s constituent documents. As such, if those who control the company have persistently disregarded the requirements of company law or the provisions ofthe company’s memorandum of association and articles of association, then the courts will grant relief. Generally, the areas in which the courts will intervene are thefollowing: (1) an act complained of which is outside the scope of the authorized business or is illegal or not capable of ratification by the majority; (2) acts thatconstitute fraud on the minority where the wrongdoers control the company; (3) acts that infringe on the personal rights of the shareholders, such as the right tovote; and (4) where the company has not complied with provisions requiring approval of a majority of shareholders, which are more limited than the rights affordedminority shareholders under the laws of many states in the United States.Antitakeover provisions in our memorandum of association and articles of association and our right to issue preference shares could make a thirdpartyacquisition of us difficult.Some provisions of our memorandum of association and articles of association may discourage, delay or prevent a change in control of our company ormanagement that shareholders may consider favorable, including provisions that authorize our board of directors to issue preference shares in one or more seriesand to designate the price, rights, preferences, privileges and restrictions of such preference shares.If you hold our ADSs, you may not have the same voting rights as the holders of our ordinary shares and must act through the depositary to exercise your rights.Holders of our ADSs will not be able to exercise voting rights attaching to the shares evidenced by our ADSs on an individual basis. Holders of our ADSswill appoint the depositary or its nominee as their representative to exercise the voting rights attaching to the shares represented by the ADSs. You may not receivevoting materials in time to instruct the depositary to vote, and it is possible that you, or persons who hold their ADSs through brokers, dealers or other third parties,will not have the opportunity to exercise a right to vote. Upon our written request, the depositary will mail to you a shareholder meeting notice which contains,among other things, a statement as to the manner in which your voting instructions may be given, including an express indication that such instructions may begiven or deemed given to the depositary to give a discretionary proxy to a person designated by us if no instructions are received by the depositary from you on orbefore the response date established by the depositary. However, no voting instruction shall be deemed given and no such discretionary proxy shall be given withrespect to any matter as to which we inform the depositary that (i) we do not wish such proxy given, (ii) substantial opposition exists, or (iii) such matter materiallyand adversely affects the rights of shareholders. We will make all reasonable efforts to cause the depositary to extend voting rights to you in a timely manner, butyou may not receive the voting materials in time to ensure that you can instruct the depositary to vote your ADSs. Furthermore, the depositary and its agents willnot be responsible for any failure to carry out any instructions to vote, for the manner in which any vote is cast or for the effect of any such vote. As a result, youmay not be able to exercise your right to vote and you may lack recourse if your ADSs are not voted as you requested. In addition, in your capacity as an ADSholder, you will not be able to call a shareholders’ meeting.You may not be able to participate in rights offerings and may experience dilution of your holdings as a result.We may from time to time distribute rights to our shareholders, including rights to acquire our securities. However, we may not, and under the depositagreement for the ADSs, the depositary will not, offer those rights to ADS holders unless both the rights and the underlying securities to be distributed to ADSholders are registered under the Securities Act, or the distribution of them to ADS holders is exempted from registration under the Securities Act with respect to allholders of ADSs. We are under no obligation to file a registration statement with respect to any such rights or underlying securities or to endeavor to cause such aregistration statement to be declared effective. In addition, we may not be able to rely on an exemption from registration under the Securities Act to distribute suchrights and securities. Accordingly, holders of our ADSs may be unable to participate in our rights offerings and may experience dilution in their holdings as a result.You may be subject to limitations on transfer of your ADSs.Your ADSs are transferable on the books of the depositary. However, the depositary may close its transfer books at any time or from time to time when itdeems expedient in connection with the performance of its duties. In addition, the depositary may refuse to deliver, transfer or register transfers of ADSs generallywhen our books or the books of the depositary are closed, or at any time if we or the depositary deem it advisable to do so because of any requirement of law or ofany government or governmental body, or under any provision of the deposit agreement, or for any other reason.18We may be a passive foreign investment company, of PFIC, which could lead to additional taxes for U.S. holders of our ADSs or ordinary shares.We do not expect to be, for U.S. federal income tax purposes, a passive foreign investment company, or a PFIC, which is a foreign company for which, inany given taxable year, either at least 75% of its gross income is passive income, or investment income in general, or at least 50% of its assets produce or are held toproduce passive income, for the current taxable year, and we expect to operate in such a manner so as not to become a PFIC for any future taxable year. However,because the determination of PFIC status for any taxable year cannot be made until after the close of such year and requires extensive factual investigation,including ascertaining the fair market value of our assets on a quarterly basis and determining whether each item of gross income that we earn is passive income, wecannot assure you that we will not become a PFIC for the current taxable year or any future taxable year. If we are or become a PFIC, a U.S. holder of our ADSs orordinary shares could be subject to additional U.S. federal income taxes on gain recognized with respect to the ADSs or ordinary shares and on certain distributions,plus an interest charge on certain taxes treated as having been deferred under the PFIC rules. Noncorporate U.S. holders will not be eligible for reduced rates oftaxation on any dividends received from us if we are a PFIC in the taxable year in which such dividends are paid or in the preceding taxable year.If our ordinary shares are listed on the NASDAQ Capital Market and the trading price of our ordinary shares fails to comply with the continued listingrequirements of the NASDAQ Capital Market, we would face possible delisting, which would result in a limited public market for our ordinary shares andmake obtaining future debt or equity financing more difficult for us.Companies listed on NASDAQ are subject to delisting for, among other things, failure to maintain a minimum closing bid price of $1.00 per share for 30consecutive business days. On December 19, 2011, we received a letter from NASDAQ indicating that for the last 30 consecutive business days, the closing bidprice of our ADSs fell below the minimum $1.00 per share requirement pursuant to NASDAQ Listing Rule 5550(a)(2) for continued listing on the NASDAQ CapitalMarket. We regained compliance with the minimum bid price requirement for continued listing set forth in NASDAQ Listing Rule 5550(a)(2), as its ADS with itsunderlying ordinary share has achieved a closing bid price of $1.00 or greater for the 10 consecutive business days from November 6 to November 23, 2012 byimplementing a 1for10 combination, or reverse split of the ordinary shares effective November 6, 2012. When listed, we cannot be sure that the price of our ordinaryshares will comply with this requirement for continued listing on the NASDAQ Capital Market in the future. If we were not able to do so, our ordinary shares wouldbe subject to delisting and would likely trade on the overthecounter market. If our ordinary shares were to trade on the overthecounter market, selling ourordinary shares could be more difficult because smaller quantities of shares would likely be bought and sold, transactions could be delayed, and security analysts’coverage of us may be reduced. In addition, brokerdealers have certain regulatory burdens imposed upon them, which may discourage brokerdealers from effectingtransactions in our ordinary shares, further limiting the liquidity of our ordinary shares. As a result, the market price of our ordinary may be depressed, and you mayfind it more difficult to sell our ordinary shares. Such delisting from the NASDAQ Capital Market and continued or further declines in our share price could alsogreatly impair our ability to raise additional necessary capital through equity or debt financing.ITEM 4. INFORMATION ON THE COMPANY.A . HISTORY AND DEVELOPMENT OF THE COMPANY.OverviewWe are a holding company and conduct our operations through our whollyowned subsidiary named LK Technology Ltd., a British Virgin Islands limitedliability company (“LK Technology”), and its whollyowned subsidiaries, MMB Limited and Mobile Media (China) Limited and their respective subsidiaries, whichhold the rights to deploy WiFi systems on about 700 trains in China, including 290 trains in which WiFi systems have already been installed and are in operation. InMay 2010, we consummated an initial public offering of our American Depository Shares, or ADSs, for gross proceeds of $16 million, and our ADSs were listed onthe NASDAQ Capital Market under the ticker symbol “KONE”. Our ordinary shares are not currently listed on any trading market. Our American Depository Shares(“ADSs”) were voluntarily delisted from the NASDAQ Capital Market on September 19, 2018. We have applied to NASDAQ for the listing of our ordinary shares onthe NASDAQ Capital Market and received an approval for listing of Ordinary Shares on August 6, 2018, and as of the date of this transition report, that applicationand approval are currently under review.19On August 17, 2018, we consummated an asset exchange transaction, pursuant to which we exchanged all issued and outstanding capital stock in TopskyInfoTech Holdings Pte Ltd., the parent of Softech, for the issued and outstanding capital stock of LK Technology (the “Asset Exchange”). In connection with theAsset Exchange, we changed our name on August 20, 2018, and on September 20, 2018, issued to the shareholders of C Media Limited, the former parent of LKTechnology, (i) 185,412,599 of our ordinary shares, par value $0.01 per share and (ii) 1,000,000 of our preferred shares. Upon the consummation of the AssetExchange, we ceased our previous business operations and became a company focused on the provision of WiFi and mobile application products for long distancerail travelers in China.On August 25, 2018, LK Technology entered into a Stock Purchase Agreement (the “Agreement”) with the shareholders (“Shareholders”) of SuperengineHoldings Limited, a limited liability company organized under the laws of the British Virgin Islands (the “Superengine”), pursuant to which LK Technology acquiredall of the issued and outstanding capital stock of Superengine for an aggregate purchase price of US$60 million (the “Purchase Price”), which are paid by theissuance of our Ordinary Shares in an amount equal to the quotient of (x) the Purchase Price divided by (y) the average of the closing prices of the Ordinary Shareson the NASDAQ Capital Market over the 12 months period preceding July 31, 2018. We are a party to the Agreement in connection with the issuance of theOrdinary Shares and certain other limited purposes.Corporate InformationOur principal executive offices are located at LAB32, SOHO 3Q, No 9, Guanghua Road, Chaoyang District, Beijing, People’s Republic of China 100020. Ourwebsite is www.luokung.com. We routinely post important information on our website. The information contained on our website is not a part of this transitionreport.Our agent for service of process in the United States is Worldwide Stock Transfer, LLC, the current transfer agent of the Company, with a mailing address ofOne University Plaza, Suite 505, Hackensack, New Jersey 07601.B. BUSINESS OVERVIEW.We are a Chinabased provider of rail WiFi and mobile application products for long distance travelers in China. Our primary mobile application, theLuoKuang platform, consists of the LuoKuang mobile applications, a series of supporting software at the server end, and railWiFi hardware and equipment on thetrains that we serve. The LuoKuang platform incorporates technology covered by 22 patents and about 34 software copy rights, and serves as a content and servicedistribution platform that is tailored for particular travel stages featuring geographic location and social interaction. The content and services distributed byLuoKuang contain information, entertainment, travel, ecommerce, online to offline (“O2O”), advertisement and marketing features.LuoKuang mainly provides personalized and precise services to long distance travelers in two locations: on the train and at the destination. Based on thetravel environment, the core elements of our users’ needs include staving off boredom on trains and discovering and exploring new locations upon arrival. The mainservices contain entertainment services (videos and audio, digital readings, games specific and tailored to the travel stage) and social services (satisfying thedemand for value discovery of unfamiliar destinations through social interaction among strangers based on locations). As of December 31, 2017, the LuoKuangplatform featured about 38 million users.The setting services on the train focus on providing entertainment content for passengers to pass time during longdistance travel in closed environments.For example, we provide access to long video formats such as movies and TV shows, short videos, music, digital readings and games.20We use the most valuable WiFi location—the train WiFi setting—as the entrance of our LuoKuang platform and mobile applications. Passengers typicallyride trains for longdistance and interprovincial travel purposes. The long periods of monotonous journeys and the cost concerns for roaming traffic fees enable thecombination of entertainment content service needs and WiFi access needs. Our railWiFi becomes a valuable and sophisticated WiFi service in this setting—notjust WiFi connection service, but a provider of sophisticated services through a WiFi connection. In addition, the annual traffic of 800,000 passengers onboardeach train makes rail WiFi a huge entry point for mobile applications. We do not define ourselves as a train WiFi communication service operator but as a longdistance travel mobile service provider. We provide users with free WiFi access so that users are able to connect to the LuoKuang platform and thus access relatedentertainment services, services on the train and destination services. The rail WiFi is our access point to a significant pool of users and the entrance to acquiringadditional users.The setting services focus on providing targeted push services to users while travelling in unfamiliar cities. Information and service guidance are preciselypushed to appeal to the interests and tastes (eating, drinking, shopping, touring and culture) of individual users (cuisine specialties and local snacks, local events,viewing sights, culture, history, stories). The service guidance is generated, shared and distributed by individual users (travelers, local residents, local businesses)interacting with current locations and featuring users who generated contents from selfmedia and small and medium vertical contents providers).Based on the GIS (geoinformation system), Superengine is a provider of big spatialtemporal data, network graphic image technology and relevant service.Its super engine series includes computer graphic image engines and spatial database engines. Spatialtemporal cloud index is the core of the company’s spatialtemporal data engines. It is equivalent to the neural network of the big data and the Internet. It extends the value of its products and platform to its data serviceproviders. In cooperation, its service providers can be divided into three categories, namely, basic geographic data providers, industrial data providers andbehavioral data providers). Superengine’s industriesoriented spatialtemporal data engine was launched in 2016. The spatialtemporal GIS platform has been appliedin industries such as aerospace, power grid, surveying & mapping, agriculture, cultural relic preservation, water conservancy, public security, railway section, smartcities, and business location selection.Our primary sources of revenue are advertising and marketing promotion revenues.Our Industry — Mobile Internet IndustryOur products and services are engaged in the mobile internet industry. Our main services consist of entertainment services (videos, audio, digital readings,games that are tailormade for passengers on train) and other services including satisfying the demand for value discovery of unfamiliar destinations through socialinteractions among strangers based in such locations). The mobile internet industry in China is rapidly growing and is likely to be in a longterm growth trend.According to the Mobile Internet Blue Book of China Mobile Internet Report, in 2017 the market size of China mobile internet reached RMB 605 billion. Now China isin a leading position in terms of smartphone, mobile communication network and mobile application services. The pool of users is anticipated to keep expandingthrough the promotion and popularization of smartphones and the expansion of the mobile internet market.Video is the leading online entertainment format in China. According to the iResearch Report, over 80% of total time spent by users on online entertainmentin China in 2016 was internet video. Online entertainment, especially internet video, is attractive to Chinese users due to many favorable factors, including easyaccessibility, wide content selection, and innovative platforms with social features.For 2017, the transaction volume of China mobile ecommerce market reached to over RMB 4 trillion according to the China Mobile Ecommerce IndustryResearch Report from iResearch, representing an increase of 19.1%. For the next few years, China mobile online shopping will likely maintain steady growth. Thefocal point of competition in China mobile ecommerce market has shifted from infrastructure service providers to integrated and accurate services providers.Drawing in users with compelling content in diversified scenes has become a trend.21The revenue for China mobile gaming industry reached RMB 144.58 billion for the year of 2017, according to the China Mobile Game Industry ResearchReport from iResearch. With increased investment by largescale enterprises in the sector of mobile games and the strict enforcement of the mobile game industryrelated regulatory policy guidelines, the mobile game market as a whole will become more organized and standardized.According to the Annual Analysis of China Mobile Reading Industry from Analysis, for the year of 2017, the mobile reading market in China reached toRMB 14.04 billion. By the end of 2016, the size of China mobile's reading market reached RMB 11.86 billion, showing an increase of 18.38% in 2017.The closed and boring environment for passengers of longdistance travel and high roaming charges lead to a strong demand to use our rail WiFi services.Passengers, through their own mobile phone, have access to the free WiFi network in each carriage, access to our rich mobile internet entertainment content andtravel services. According to the annual statistical bulletin of China Railway Corporation in 2017, there were about 6,030 trains in operation in China in 2017,consisting of 2,935 high speed trains and 3,095 express trains. The rail WiFi system that we have installed are currently all on express trains. The market value will bemultiplied several times following the extended coverage of service on other trains.Our StrengthsWe believe the following strengths differentiate us from our competitors:Our strategy is to build up personalized and targeted service products for travelers through rail WiFi networks, enabling our services to evolve into a coredriving distribution platform that provides content, news, games, ecommerce, OTO service, travel services and advertising and marketing. In comparison, ourcompetitors offer simple forms of media services on trains. We focus on personalized and targeted matching between users on long distance trips and services. Ourcompetitors focus on operating and generating internet traffic.We possess a complete set of technology system including network, client end and service and operation platform. We have patent protections for WiFiequipment on trains. Our technology strengths are briefly summarized below.WiFi EquipmentPatent protected. Supports WiFi/3G/4G telecom modules; 4 core CPU with X86 architecture, and SSD hard disk with big storage for localcontents.InfrastructureThe technology infrastructures include the application program system, big data gathering and processing systems, intelligence cloudsservice deployment structure systems and our WiFi hardware server deployment structure system. The operation center, big data center,contents center and railWiFi server system are built on this infrastructure. On the above layer, the equipment management platform,account and payment platform, contents management platform and advertisement distribution platform are set up for daily managementpurpose.LuoKuang strengthens the connection of services among people, setting and locations. In catering to people on the move, we anticipate strengthening therelationship between users and their locations in a given moment. Currently, LuoKuang provides the link between users and thirdparty service providers andprovides value added services to both users and thirdparty service providers. The connection is not simply a traffic diversion, but also the direct presentation ofrelevant services in the LuoKuang platform. The open API interface and independent product software package allows easy access by service providers anddevelopers and supports data service, advertisement operations, billing, users promotion and product marketing services. As an API product, LuoKuang does notcreate content or services. The content and services are provided by our partners in the LuoKuang platform. Now, the majority of top mobile internet content andservices providers in China have a presence in the Luokuang platform. Those include, but are not limited to, Toutiao, Wangyi News, iqiyi, Letv, YoudianCinema(Hollywood films), Sohu video, Phoenix Video, Kugou Music, FM Qingting, iReader, Baidu Literature, Phoenix Novel, Baidu Game, Meituan, Dianping, andsimilar content providers.22Our StrategyLuoKuang is positioned to provide API interface services and geographic information social services. The API interface services are provided within thetypical BC model. LuoKuang pushes the content and services from thirdparty service providers to users. The local businesses, service practitioners, residents, andforeign travelers are all defined as a “user” and may participate in social interactions based on local value information and generate UGC content. The socalled localvalue information is defined as information, views, evaluations, experiences and experience sharing related to the local cultural scene, native products,entertainment, food, tourism and activities.The LuoKuang user growth strategy is to have access to users through the travelers’ use of mobile devices in connection with longdistance train travel.Through deploying WiFi systems on trains and providing free WiFi access to passengers, LuoKuang is able to have consistent access to longdistance travelers.The WiFi system on the train has become a powerful user portal at the early stage of LuoKuang and has gained substantial user traffic. We are in a leading positionin terms of numbers of trains contracted and trains in operation with our free WiFi system. We have contracted with about 700 trains, which cover almost 560 millionannual passenger trips. As of the date of this report, approximately 290 trains are operating our rail WiFi system. We will continue to install our rail WiFi system inthe following years.The development strategy for LuoKuang encompasses the following:1.Enhance our local cycle service (a recommendation service system based on the location of travelers after their arrival, recommendations includingtourist attractions, local specialties and other items of interest), strengthen services for arrivals in the form of social interaction and focus on the valueof relationships between users and their current locations.2.Focus on the development of geographic positioning technology. Get the business of local cycle and users on train mixed together. We will put oureffort to maximize the synergy effect.3.Big Data: Behavior data about passenger trips is obtained via the traffic entrance of rail WiFi and these data will help to optimize our product.4.While enhancing setting service experiences and optimizing entertainment experiences, we will enrich ecommerce services on trains featuringrecommendations of customized products and ecommerce shopping guidance of products labeled with specific geographic location (and trafficdiversion).5.Focus on API positioning and attract more premium vertical service providers (contents and services).Intellectual PropertyWe have registered the following software copyrights, patents and trademarks for our business operations. We believe this intellectual property forms anintegral part of our competitive strength.23Patents:We have been granted some inventions by the State Intellectual Property Office of PRC. We possess a complete set of technology system includingnetwork, client end and service and operation platform. We have patent protections for WiFi equipment on trains. We have received the following patents:No.Name of patentTypeRegistrationNumberDate of Insurance1.Wireless communication multimedia chip business consumer informationacquisition terminal deviceInventionZL 2010 2 0528767.9Sep 21, 20112.A user behavior processing method and device for intelligent terminalInventionZL 2013 1 0301728.3May 27, 20153.A global positioning system terminal deviceInventionZL 2010 2 0253452.8Nov 7, 20114.A wireless multimedia serverInventionZL 2013 2 0220183.9Nov 13, 20135.Ordering system of passengers on trainInventionZL 2015 2 0095381.6Aug 5, 20156.A wireless multimedia serverInventionZL 2015 2 0201382.4Oct 28, 20157.An antenna structureInventionZL 2016 2 0424352.4Mar 1, 20178.Spatial data progressive transmission method and deviceInvention201010617383.9Jun 15, 20169.Methods and devices for conflict detection and avoidance of spatial entity elementlabelingInvention201010617385.8Mar 26, 201410.Spatial data processing method and deviceInvention201010617399.XJun 26, 201311.Method and device of spatial data simplificationInvention201010617400.9Mar 13, 201312.Method and device for judging the occlusion type of space entityInvention201010617403.2Sep 25, 201313.A method and device for distributed mapping of 3d model dataInvention201110274924.7Mar 26, 201414.Data simplification of 3d model, gradual transmission method and deviceInvention201110275336.5Mar 25, 201515.Spatial data transmission method and deviceInvention201110306393.5Dec 13, 201416.Methods and devices for spatial data processing, simplification and progressivetransmissionInvention201210104250.0Jun 10, 201517.Spatial data progressive transmission method and deviceInvention201310367021.2Jun 23, 201718.Simplification method and device of spatial dataInvention201310367128.7Sep 22, 201719.The method and device to accelerate transmission and display of graphic dataacross platformsInvention201210116149.7Aug 10, 201620.Methods and devices related to spatial data compression, decompression andprogressive transmissionInvention201310136682.4Nov 10, 2017We also have two patents outside of China.No.Name of patentCountryNationalRegistrationNumberDate ofInsurance1.Spatial data processing method and deviceJapan2012547439Jun 20, 20142.Methods and devices related to spatial data compression, decompression andprogressive transmissionU.S.A14/394,610Sep 5, 201724Software Copyrights:We have received the following software copyrights from the National Copyright Administration (“NCA”) of PRC:No.Name of CopyrightAchievement approachRegistration numberTime of obtainExpire time1.WAP PUSH Business operation platformsystemIndependent research anddevelopment2007SRBJ1464Jul 23, 200750 years2.TDSCDMA Streaming media businessmanagement platform software V1.0Independent research anddevelopment2009SRBJ0412Jan 22, 200950 years3.Content management platform systemsoftware V1.0Independent research anddevelopment2009SRBJ1374Apr 1, 200950 years4.Mobile multimedia broadcast electronicservice guide system software V1.0Independent research anddevelopment2009SRBJ1365Apr 1, 200950 years5.Mobile video business operation platformsystem V1.0Independent research anddevelopment2007SRBJ1463Jul 23, 200750 years6.Mobile multimedia broadcast emergencybroadcast platform software V1.0Independent research anddevelopment2010SRBJ0720Mar 5, 201050 years7.Mobile multimedia broadcast audio richmedia interactive platform softwareV1.0Independent research anddevelopment2010SRBJ0719Mar 5, 201050 years8.Printer typesetting and printing softwareV1.0Independent research anddevelopment2011SRBJ4190Sep 28, 201150 years9.Electronic newspaper business supportplatform software V1.0Independent research anddevelopment2011SRBJ4186Sep 28, 201150 years10.Public information business platformsoftware V1.0Independent research anddevelopment2011SRBJ3810Sep 27, 201150 years11.User interface scripting software V1.0Independent research anddevelopment2011SRBJ3809Sep 27, 201150 years12.Integrated business management platformsoftware V1.0Independent research anddevelopment2012SR003002Jan 16, 201250 years13.Interactive business development platformsoftwareIndependent research anddevelopment2011SRBJ4593Nov 29, 201150 years14.Instant messaging and messaging systemsoftwareIndependent research anddevelopment2014SR122231Aug 5, 201450 years15.General statistical platform software forclient productsIndependent research anddevelopment2014SR216662Dec 30, 201450 years16.CMMB Data broadcast managementplatform softwareIndependent research anddevelopment2009SRBJ0391Jan 22, 200950 years17.Integrated passenger train service systemIndependent research anddevelopment2012SR083665Sep 5, 201250 years25No.Name of CopyrightAchievement approachRegistration numberTime of obtainExpire time18.JHBY Train inspection managementsystemIndependent research anddevelopment2013SR015105Feb 21, 201350 years19.Integrated information engine platformsoftware V1.0Independent research anddevelopment2014SR040347Nov 30, 200150 years20.Super information engine developmentplatform software V5.0Independent research anddevelopment2014SR036792Mar 5, 200350 years21.Core map super network informationengine platform software V1.0Independent research anddevelopment2014SR036772Sep 15, 200750 years22.Integrated management of the grid gissoftware V1.0Independent research anddevelopment2014SR036808Jun 20, 200850 years23.Core map rural power grid equipment GPSpatrol system software V1.0Independent research anddevelopment2014SR036810Dec 10, 200850 years24.Diagram grid patrol PDA system softwareV1.0Independent research anddevelopment2014SR036778Dec 12, 200850 years25.Core map geographic information enginedesktop platform software V1.0Independent research anddevelopment2014SR036614Jan 15, 200950 years26.Integrated management of the gridgeographic information Web systemsoftware V1.0Independent research anddevelopment2014SR036799Mar 10, 200950 years27.Core map railway power supply equipmentGPS patrol system software V1.0Independent research anddevelopment2014SR036783Mar 25, 201050 years28.Core map network 3 d map server softwareV1.0Independent research anddevelopment2014SR036788Feb 20, 201150 years29.Core map network 3d map clientsoftwareV1.0Independent research anddevelopment2014SR036637Feb 22, 201150 years30.Core map 3d map network publishingplatform software V1.0Independent research anddevelopment2014SR036633Mar 10, 201150 years31.Core map 3d map network release pluginsystem software V1.0Independent research anddevelopment2014SR036622Mar 15, 201150 years32.Core map network 3d map smartphoneplatform software V1.0Independent research anddevelopment2014SR036638Apr 28, 201150 years33.Core map network GIS Shared mobileplatform software V1.0Independent research anddevelopment2014SR036634Oct 31, 201150 years34.Core map network GIS sharing platformsoftware V1.0Independent research anddevelopment2014SR036639Dec 16, 201150 yearsTrademarks:We have registered the following trademarks with the Trademark Office, State Administration for Industry and Commerce in the PRC:NoTrademarkClassification NumberValid PeriodRegistration Number1Y图形382010.04.212020.04.2067460692Y图形412010.09.072020.09.0667460673YRADIO文字352010.07.212020.07.2067334374YRADIO文字382010.04.21.2020.04.2067334385YRADIO文字412010.09.072020.09.0667334396LookLook图形382009.04.072019.04.0646660517LookLook图形422008.12.212018.12.2046660508YTV文字352010.07.212020.07.2067335799YTV文字382010.05.282020.05.27673357810YTV文字412010.09.072020.09.06673358111YTV文字422010.09.072020.09.06673358012YOUTV文字352010.07.212020.07.20673344013YOUTV文字382010.05.282020.05.27673344114xfeng文字352012.03.282022.03.27922914526NoTrademarkClassification NumberValid PeriodRegistration Number15xfeng文字382012.03.282022.03.27922916016xfeng文字412012.03.282022.03.27922919017xfeng文字422012.03.282022.03.27922922118中传视讯文字+图形422008.12.212018.12.20466604719中传视讯文字422008.12.212018.12.20466604820中传视讯文字382008.12.212018.12.20466604921新蜂文字382011.08.212021.08.20853890722新蜂文字422012.01.282022.01.27853907823新蜂.潮文字382011.08.212021.08.20853910424新蜂.潮文字422012.01.282022.01.27853914125新影力412014.08.282024.08.271228864326小人图形352014.08.282024.08.271228798527小人图形382014.08.282024.08.271228858028小人图形412014.08.282024.08.271228862929小人图形422014.08.282024.08.271228843530中传文字382014.08.282024.08.271228826731中传图形382014.08.282024.08.271228828932中童文字412014.08.072024.08.061221408533中童在线文字412014.08.072024.08.061221409234翠鸟文字382014.08.072014.08.061221405835翠鸟文字422014.08.072014.08.061221412536爱翠鸟文字382014.08.072024.08.061221406637爱翠鸟文字412014.08.072024.08.061221409638爱翠鸟文字422014.08.072024.08.061221412639翠鸟图形352014.08.072024.08.061221404040翠鸟图形382014.08.072024.08.061221407441翠鸟图形412014.08.072024.08.061221410042翠鸟图形422014.08.072024.08.061221413143信号小喇叭图形+CMEDIA412015.03.212025.03.201248043944LookLook图形382015.11.142025.11.131153342845LookLook图形422014.06.212024.06.201153372046LookLook文字382014.07.142024.07.131153406747LookLook文字422014.04.142024.04.131153422748L图形352014.02.282024.02.271153500249L图形382014.02.282024.02.271153507350L图形412014.02.282024.02.271153518151L图形422014.02.282024.02.271153526252箩筐图形412016.06.142026.06.131658022853箩筐图形422016.06.142026.06.131658022754箩筐文字422016.09.282026.09.271658024955箩筐文字412016.06.142026.06.131658025056箩筐文字352016.09.212026.09.201658025257箩筐文字92016.06.142026.06.131658025327NoTrademarkClassification NumberValid PeriodRegistration Number58箩筐图形382016.06.142026.06.131658022959箩筐图形352016.06.142026.06.131658023060箩筐图形92016.06.142026.06.131658023161微时光文字422016.09.282026.09.271658024762传游录屏文字92016.06.142026.06.131678214463传游录屏文字352016.06.142026.06.131678214364传游录屏文字382016.06.142026.06.131678214265传游录屏文字412016.06.142026.06.131678214166传游录屏文字422016.06.142026.06.131678214067录游器文字92016.06.142026.06.131678213568录游器文字352016.06.142026.06.131678213669录游器文字382016.06.142026.06.131678213770录游器文字412016.06.142026.06.131678213871录游器文字422016.06.142026.06.131678213972畅联TV文字412016.01.212026.01.201579246773畅联TV文字382016.01.212026.01.201579246874SuperEngine92016.01.212026.01.20812572275SuperEngine422016.01.212026.01.20812572876超擎9/422016.01.212026.01.201647320577SUPERENGINE9/422016.01.212026.01.2016473185*See below for an explanation of each classification number used in the table above.Classification No. 9: data processing apparatus, couplers (data processing equipment), computer software (recorded), monitors (computer programs), smartcards (integrated circuit cards), electrodynamic apparatus for the remote control of signals, alarms, and electric installations for the remote control of industrialoperations.Classification No. 35: auctioneering, sales promotion for others, marketing analysis, marketing research, importexport agencies, advisory services forbusiness management, business management for franchise, personnel management consultancy, relocation services for businesses, and systemization ofinformation into computer databases.Classification No. 38: Include services that enable at least sensory communication between two people. Such services include that allow one person to talkto another, send messages from one person to another, Make verbal or visual contact between one person and the other. This classification especially include theservice for broadcasting radio or television programs. Except for radio advertising services and telemarketing services.Classification No. 41: instruction services, teaching, education information, tuition, arranging and conducting of colloquiums, publication of electronicbooks and journals online, amusements, and vocational guidance.Classification No. 42: technical research, studies (technical project), computer software design, updating of computer software, recovery of computer data,computer systems analysis, installation of computer software, computer antivirus protection, and research and development for others. 28Business Certificates and QualificationsWe have obtained all necessary regulatory certifications to conduct our business in the PRC, including without limitation, the following: SoftwareEnterprise Recognition Certificate, Computer Information System Integration Qualification Certificate, Construction Enterprise Qualification Certificate, and SecurityTechnology & Protection Enterprise Certificate. We have also been properly certified as a hightech enterprise and have met the ISO 9001:2000 qualificationmanagement system.Legal ProceedingsAlthough we may, from time to time, be involved in litigation and claims arising out of our operations in the normal course of business, we do not believethat we are a party to any litigation that will have a material adverse impact on our financial condition or results of operations. To our knowledge, other than asdescribed below there are no material legal proceedings threatened against us. From time to time, we may be subject to various claims and legal actions arising in theordinary course of business. Following the consummation of the AEA, we became successor in interest to the legal proceedings described below.Litigation with Shanghai Fusheng Weier Intelligent Control Technology Co., Ltd.On January 22, 2016, Zhong Chuan Rui You and Shanghai Fusheng Weier Intelligent Control Technology Co., Ltd. (“Fusheng Weier”) signed a contract forequipment of $1,652,842 (RMB10,800,000). Since Zhong Chuan Rui You did not make the payments of $1,126,381 (RMB7,360,000) on the due dates, Fusheng Weierfiled a lawsuit against Zhong Chuan Rui You in Shanghai Xuhui District People's Court on October 8, 2016. On March 9, 2017, Xuhui District People's Court issuedthe verdict requiring Zhong Chuan Rui You to pay the overdue debts. In August 2017, C Media Limited made the payment of $512,075 (RMB3,346,000). Theremaining balance has been accrued in accounts payable. The payment schedule for the remaining balance is being negotiated by the two parties. On February 5,2018, a hearing was held adding Zhong Chuan Shi Xun as a defendant. The Group plans to settle the remaining balance within one year.Lawsuit with Gansu Jinlun Culture Media Co., Ltd.On August 22, 2014, Zhong Chuan Rui You and Gansu Jinlun Culture Media Co., Ltd. (“Gansu Jinlun”) signed a “Lanzhou Railway Bureau AirconditionedTrain WiFi Network System Advertising Operation Rights Agreement” for advertising on 72 trains of $1,467,880 (RMB9,604,633). Due to the dispute on theproject implementation, Zhong Chuan Rui You did not pay the advertising fee. On August 23, 2017, Gansu Jinlun filed a lawsuit with Gansu Intermediate People'sCourt. On December 19, 2017, Gansu Intermediate People's Court issued a verdict, ruling that Zhong Chuan Rui You settle the overdue advertising fee. Since only 18out of 72 trains have been installed with Wifi network system, Zhong Chuan Rui You disputed and appealed to the verdict. The next court trial date has not yet beendetermined.C Media and Gansu Jinlun are negotiating a potential settlement to resume the contract. According to the legal counsel, it is probable that the settlementwill amount to approximately $459,000 (RMB3,000,000); therefore, this amount has been accrued in accounts payable as at December 31, 2017.Litigation with Shenzhen Hua Xun Fang Zhou Technology Co., Ltd.On June 16, 2015, Zhong Chuan Rui You signed a cooperation agreement with Shenzhen Hua Xun Fang Zhou Technology Co., Ltd. (“Shenzhen Hua Xun”)and Xuesong Song, a major shareholder of C Media Limited. Pursuant to this agreement, Zhong Chuan Rui You procures equipment from Shenzhen Hua Xun.Xuesong Song acts as a joint liability guarantor for the entire debts of Zhong Chuan Rui You under this agreement. As Zhong Chuan Rui You did not make thepayments on the due dates, Shenzhen Hua Xun filed a lawsuit with Shenzhen Baoan District People's Court on May 31, 2016. On November 1, 2016, Zhong ChuanRui You, Xuesong Song and Shenzhen Hua Xun reached a settlement in Shenzhen Baoan District People's Court to settle $1,735,389 (RMB11,355,000) in fourinstalments. On December 30, 2017, the debt was assigned to C Media Limited.29C. ORGANIZATIONAL STRUCTUREThe following diagram illustrates our corporate structure and the place of formation and affiliation of each of our subsidiaries and affiliates as of September30, 2018.30The following diagram illustrates our corporate structure and the place of formation and affiliation of each of our subsidiaries and affiliates as of December31, 2017.Contractual Arrangements with Beijing Zhong Chuan Shi Xun Technology Limited’s Subsidiaries and Their Respective ShareholdersTo comply with the PRC legal restrictions on foreign ownership of companies that operate mobile application services, our subsidiaries operate in suchrestricted service areas in the PRC through certain PRC domestic companies, whose equity interests are held by certain management members or founders of the LKTechnology Ltd. Part of the registered capital of these PRC domestic companies was funded by certain management members or founders of LK Technology Ltd. LKTechnology Ltd., through its subsidiary Zhong Chuan Tian Xia Information and Technology (Shenzhen) Limited (the “WFOE”), has entered into an exclusivebusiness cooperation agreement with Beijing Zhong Chuan Shi Xun Technology Limited (“Zhong Chuan Shi Xun” or the “VIE”) the PRC domestic company, whichentitle the WFOE to receive a majority of profit of Zhong Chuan Shi Xun. In addition, Zhong Chuan Tian Xia Information and Technology (Shenzhen) Limited hasentered into certain agreements with those management members or founders, including equity interest pledge agreement of the equity interests held by thosemanagement members or founders and exclusive option agreement to acquire the equity interests in these companies when permitted by the PRC laws, rules andregulations. Details of the typical VIE structure of our significant consolidated VIE, primarily domestic companies associated with the operations such as ZhongChuan Shi Xun and its subsidiaries of Zhong Chuan Rui You, Huoerguosi Luokuang and Jiu Zhou Shi Dai, are set forth below: Exclusive Business Cooperation AgreementThe VIE has entered into an exclusive business services agreement with the WFOE, pursuant to which the WFOE provides exclusive business services tothe VIE. In exchange, the VIE pays a service fee to the WFOE which amounts to be no less than the 80% of the VIE’s aftertax profit, resulting in a transfer ofsubstantially all of the profits from the VIE to the WFOE.Exclusive Option AgreementThe VIE equity holders have granted the WFOE exclusive call options to purchase their equity interest in the VIE at an exercise price equal to the minimumprice as permitted by applicable PRC laws. The WFOE may nominate another entity or individual to purchase the equity interest, if applicable, under the call options.Each call option is exercisable subject to the condition that applicable PRC laws, rules and regulations do not prohibit completion of the transfer of the equityinterest pursuant to the call option. The VIE agrees not to distribute any dividends to the VIE equity holders without the approval of WFOE.31Equity Interest Pledge AgreementPursuant to the equity pledge agreement, the VIE equity holders have pledged all of their interests in the equity of the VIE as a continuing first prioritysecurity interest in favor of the WFOE to secure the performance of obligations by the VIEs and/or the equity holders under the exclusive business cooperationagreement. The WFOE is entitled to exercise its right to dispose of the VIE equity holders’ pledged interests in the equity of the VIE and has priority in receivingpayment by the application of proceeds from the auction or sale of such pledged interests, in the event of any breach or default under the exclusive businesscooperation agreement, if applicable. These equity pledge agreement remain in force until all the obligations under the exclusive business cooperation agreementhave been fulfilled.The exclusive business cooperation agreement and equity interest pledge agreement described above also enable the Company to receive substantially allof the economic benefits from the VIE by typically entitling the WFOE to all dividends and other distributions declared by the VIE and to any distributions orproceeds from the disposal by the VIE equity holders of their equity interests in the VIE.D. PROPERTY AND EQUIPMENTWe lease offices located at Lab 30 & Lab 32, SOHO 3Q, No 9, Guanghua Road, Chaoyang District, Beijing, which covers a floor space of 600 square meters.These leases expire at different times throughout 2018 and are renewable upon negotiation.ITEM 4A. UNRESOLVED STAFF COMMENTSNone.ITEM 5. OPERATING AND FINANCIAL REVIEW AND PROSPECTSA . OPERATING RESULTS.The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our consolidatedfinancial statements and the notes to those financial statements appearing elsewhere in this report. This discussion and analysis contains forwardlookingstatements that involve significant risks and uncertainties. As a result of many factors, such as our anticipated growth strategy, our plans to recruit moreemployees, our plans to invest in research and development to enhance our product or service lines, our future business development, results of operations andfinancial condition, expected changes in our net revenues and certain cost or expense items, our ability to attract and retain customers, trends and competitionin the enterprise mobile software application market, and the factors set forth elsewhere in this report, our actual results may differ materially from thoseanticipated in these forwardlooking statements. In light of those risks and uncertainties, there can be no assurance that the forwardlooking statementscontained in this report will in fact occur. You should not place undue reliance on the forwardlooking statements contained in this report.The forwardlooking statements speak only as of the date on which they are made, and, except to the extent required by U.S. federal securities laws, weundertake no obligation to update any forwardlooking statement to reflect events or circumstances after the date on which the statement is made or to reflectthe occurrence of unanticipated events. Further, the information about our intentions contained in this report is a statement of our intention as of the date of thisreport and is based upon, among other things, the existing regulatory environment, industry conditions, market conditions and prices and our assumptions as ofsuch date. We may change our intentions, at any time and without notice, based upon any changes in such factors, in our assumptions or otherwise.32Unless the context otherwise requires, all references to (i) “PRC” and “China” are to the People’s Republic of China; (ii) “U.S. dollar,” “$” and “US$”are to United States dollars; and (iii) “RMB”, “Yuan” and Renminbi are to the currency of the PRC or China.OverviewLuokung Technology was incorporated on October 27, 2009 under the laws of the British Virgin Islands. We are a holding company and conduct ouroperations through LK Technology Ltd., a British Virgin Islands limited liability company (“LK Technology”) and its whollyowned subsidiaries, MMB Limited andMobile Media (China) Limited and their respective subsidiaries and a contractuallycontrolled entity in the PRC named Beijing Zhong Chuan Shi Xun Technology,which hold the rights to deploy WiFi systems on about 700 trains in China, including 290 trains in which WiFi systems have already been installed and are inoperation. In May 2010, we consummated an initial public offering of our American Depository Shares, or ADSs, for gross proceeds of $16 million, and our ADSswere listed on the NASDAQ Capital Market under the ticker symbol “KONE”. Our ordinary shares are not currently listed on any trading market. Our AmericanDepository Shares (“ADSs”) were voluntarily delisted from the NASDAQ Capital Market on September 19, 2018. We have applied to NASDAQ for the listing of ourordinary shares on the NASDAQ Capital Market and received an approval for listing of Ordinary Shares on August 6, 2018, and as of the date of this transitionreport, that application and approval are currently under review.On August 17, 2018, we consummated an asset exchange transaction, pursuant to which we exchanged all issued and outstanding capital stock in TopskyInfoTech Holdings Pte Ltd., the parent of Softech, for the issued and outstanding capital stock of LK Technology (the “Asset Exchange”). In connection with theAsset Exchange, we changed our name on August 20, 2018, and on September 20, 2018, completed the issuance to the shareholders of C Media Limited, the formerparent of LK Technology, of (i) 185,412,599 of our ordinary shares, par value $0.01 per share and (ii) 1,000,000 of our preferred shares. Upon the consummation of theAsset Exchange, we ceased our previous business operations and became a company focused on the provision of WiFi and mobile application products for longdistance travelers in China.On August 25, 2018, LK Technology entered into a Stock Purchase Agreement (the “Agreement”) with the shareholders (“Shareholders”) of SuperengineHoldings Limited, a limited liability company organized under the laws of the British Virgin Islands (the “Superengine”), pursuant to which LK Technology acquiredall of the issued and outstanding capital stock of Superengine for an aggregate purchase price of US$60 million (the “Purchase Price”), which are paid by theissuance of our Ordinary Shares in an amount equal to the quotient of (x) the Purchase Price divided by (y) the average of the closing prices of the Ordinary Shareson the NASDAQ Capital Market over the 12 months period preceding July 31, 2018. We are a party to the Agreement in connection with the issuance of theOrdinary Shares and certain other limited purposes.Results of operations for the fiscal year ended December 31, 2017 compared to the fiscal year ended December 31, 2016.RevenueWe provide displaybased online advertising services to customers by integrating text description, image and video, and displaying the advertisements in aprominent position of LuoKuang Application. We recognize revenue in accordance with ASC 605, over the contractual term based on the agreements andconfirmation letters signed by both parties, commencing on the date the customer’s advertisement is displayed on our platform.For the year ended December 31, 2017, we had revenue of $26,082,417, as compared to revenue of $5,233,145 for the year ended December 31, 2016, anincrease of $20,849,272, or 398.4%, which was primarily due to the increase of our advertising clients.Cost of revenueOur cost of revenue primarily consists of depreciation, labor cost, WiFi equipment installation fees, data charges, annual payments to local railway bureau,other overhead costs.33Cost of revenue for the year ended December 31, 2017 was $5,547,779, representing a decrease of $767,725 or 12.2% as compared to $6,315,504 for the yearended December 31, 2016. The decrease was primarily attributable to the decrease in labor cost as a result of our cost control and a decrease in the number ofmaintenance staff. Additionally, data charges decreased as train passengers prefer using their mobile data, leading to a decrease in 3G and 4G data.Selling and marketing expenseOur selling and marketing expense mainly include promotional and marketing expenses and compensation for our sales and marketing personnel.Selling expense totaled $23,908,733 for the year ended December 31, 2017, as compared to $6,209,804 for the year ended December 31, 2016, an increase of$17,698,929 or 285.0%. The increase was primarily attributable to the increase in promotional and marketing activities conducted by the Company.General and administrative expenseOur general and administrative expenses consist primarily of salaries and benefits for our general and administrative personnel, rent, fees and expenses forlegal, accounting and other professional servicesGeneral and administrative expense totaled $2,451,249 for the year ended December 31, 2017, as compared to $2,108,854 for the year ended December 31,2016, an increase of $342,395 or 16.2%.Research and development expenses.Research and development expenses primarily consist of salaries and benefits for research and development personnel.Research and development expenses totaled $1,046,198 for the year ended December 31, 2017, as compared to $2,882,202 for the year ended December 31,2016, a decrease of $1,836,004 or 63.7%. The decrease was primarily attributable to the Company reduced its expenses in research and development temporarily asour products are quite stable at present.Loss from operationsAs a result of the factors described above, for the year ended December 31, 2017, loss from operations amounted to $6,871,542, as compared to loss fromoperations of $12,283,219 for the year ended December 31, 2016, a decrease of $5,411,677, or 44.1%.Other income/expenseOther income/expense mainly include interest income from bank deposits, foreign currency transaction gain, and loss from investment.Net lossAs a result of the factors described above, our net loss was $6,810,454 for the year ended December 31, 2017, compared to net loss of $13,049,031 for theyear ended December 31, 2016, a decrease of $6,238,577 or 47.8%.Foreign currency translation adjustmentOur reporting currency is the U.S. dollar. The functional currency of our parent company and subsidiaries of Merchant Supreme and Prime Cheer is the U.S.dollar and the functional currency of the Company’s subsidiaries incorporated in China is the Chinese Renminbi (“RMB”). The financial statements of oursubsidiaries incorporated in China are translated to U.S. dollars using period end rates of exchange for assets and liabilities, and average rates of exchange (for theperiod) for revenue, costs, and expenses. Net gains and losses resulting from foreign exchange transactions are included in the consolidated statements ofoperations and comprehensive loss. As a result of foreign currency translations, which are a noncash adjustment, we reported a foreign currency translation gain of$90,671 for the year ended December 31, 2017, as compared to a foreign currency translation loss of $387,375 for the year ended December 31, 2016. This noncashgain had the effect of increasing/decreasing our reported comprehensive income/loss.34Comprehensive lossAs a result of our foreign currency translation adjustment, we had comprehensive loss for the year ended December 31, 2017 of $6,719,783, compared tocomprehensive loss of $12,661,656 for the year ended December 31, 2016.B. LIQUIDITY AND CAPITAL RESOURCESThe information contained in “Item 5. Operating and Financial Review and Prospects – A. Operating Results – Liquidity and Capital Resources” isincorporated herein by reference.C. RESEARCH AND DEVELOPMENT, PATENTS AND LICENSES, ETC.The discussions of our research and development activities were contained in “Item 4. Information about our Company – B. Business Overview –Research and Development” and “Item 5. Operating and Financial Review and Prospects – A. Operating Results – Operating Expenses – Research and DevelopmentExpenses” are incorporated herein by reference. In the years ended December 31, 2017 and 2016, we spent $1,046,198 and $2,882,202, respectively, on research anddevelopment activities.D. TREND INFORMATION.Industry and Market OutlookChina has awarded licenses to mobile phone companies to provide the superfast 4G network to customers. The licenses, which are designed to give mobilephone users faster access to services, were granted by the government to China Mobile, China Unicom Hong Kong and China Telecom. Since the grants, ChinaMobile has offered 4G to subscribers from December 18, 2013. China Unicom and China Telecom, the country's other two major carriers, also offer 4G wireless. Thenumber of China Mobile 4G customers has exceeded 900 million by the end of October in 2017. The move greatly bolstered business for telecom equipment makersand a range of other companies.Under China’s 12th FiveYear Plan, a key priority is for China to transition from “Made in China” to “Designed in China.” In order to achieve this goal, thegovernment plans to heavily invest in science and technology education and R&D so as to further develop China’s intellectual property rights system and support“NextGeneration IT” as a Strategic Emerging Industry (SEI). Additionally, China plans to upgrade the technological capabilities of private and public services,including “triple play” services (the convergence of telecom, broadcasting and Internet networks), ecommerce, and egovernment and statistics systems.Furthermore, the government plans to invest in R&D of the "Internet of things" and cloud computing, and develop digital and virtual technologies.E. OFFBALANCE SHEET ARRANGEMENTSWe have not entered into any financial guarantees or other commitments to guarantee the payment obligations of any third parties. We have not enteredinto any derivative contracts that are indexed to our shares and classified as shareholder’s equity, or that are not reflected in our consolidated financial statements.Furthermore, except for the mortgage referenced above, we do not have any retained or contingent interest in assets transferred to an unconsolidated entity thatserves as credit, liquidity or market risk support to such entity. We do not have any variable interest in any unconsolidated entity that provides financing, liquidity,market risk or credit support to us or engages in leasing, hedging or research and development services with us.35F. TABULAR DISCLOSURE OF CONTRACTUAL OBLIGATIONSAs of December 31, 2017, we did not have any contractual obligations required to be disclosed in this Item 5.F. ITEM 6. DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES.A. DIRECTORS AND SENIOR MANAGEMENT.Executive Officers and DirectorsThe following table sets forth the names and ages as of the date of this transition report of each of our executive officers and directors:NameAgePositionXuesong Song50Chief Executive Officer, Chairman and DirectorDongpu Zhang50PresidentJie Yu34Chief Financial OfficerKegang Peng46Vice President and DirectorChuang Tao51DirectorDennis Galgano (1)(2)69Director (Independent)Jin Shi (1)(2)49Director (Independent)Jiming Ha (1)(3)56Director (Independent)Zhihao Xu (3)42Director (Independent)(1)Member of the Audit Committee.(2)Member of the Compensation Committee.(3)Member of the Nominating and Corporate Governance Committee.Set forth below is biographical information concerning our executive officers and directors.Xuesong Song is a cofounder of C Media Limited and served as its chairman of the board of directors and chief executive officer from 2012 until theconsummation of the AEA. From February 2014 through April 2017, Mr. Song served as a director of Seven Stars Cloud Group, Inc. (NASDAQ: SSC) and fromJanuary 2013 through February 2015, Mr. Song served as a director of Pingtan Marine Enterprise Ltd. (NASDAQ: PME). From May 2006 through January 2009, Mr.Song served as the Chairman of the Board of ChinaGrowth North Acquisition Corporation, a special purpose acquisition company, which acquired UIB GroupLimited in January 2009, in which he remains a director. Mr. Song has been a principal of Chum Capital Group Limited since August 2001, a merchant banking firmthat invests in growth Chinese companies and advises them in financings, mergers & acquisitions and restructurings, and chief executive officer of Beijing ChumInvestment Co., Ltd. since December 2001. Mr. Song has been a director of Mobile Vision Communication Ltd. since July 2004. Mr. Song received a Master’s ofBusiness Administration degree from Oklahoma City/Tianjin Program.Dongpu Zhang was appointed as the President of the Company effective on August 25, 2018. Mr. Dongpu Zhang has served as the General Manager ofSuperEngine Graphics Software Technology Development (Suzhou) Co., Ltd. (“SuperEngine Suzou”) and the Chief Executive Officer of SuperEngine HoldingLimited since September 2016. From February, 2014 to August, 2016, Mr. Zhang served as vice president of Industrial Development Group under China Fortune LandDevelopment Co., Ltd. From March, 2009 to February, 2014, Mr. Zhang served as the vice president of Aerospace Science and Technology Holding Group Co., Ltd.Mr. Zhang receive his Master Degree of Computer Science from Harbin Institute of Technology in 1994 and his Bachelor Degree of information system fromChangsha Institute of technology in 1991.Jie Yu served as the chief financial officer of C Media Limited from January 2018 until the consummation of the asset exchange transactions. From June 2016to January 2018, Mr. Yu served as chief financial officer and secretary of the board of directors of MTI Environment Group Limited. Prior to joining MTI, Mr. Yuserved as the senior manager at DA HUA CPA from November 2012 to May 2016. Previously, Mr. Yu served as the manager at Crowe Horwath (Hong Kong) CPA.Mr. Yu holds a bachelor degree in accounting and finance from University of Auckland and postgraduate diploma in accounting from University of Auckland.36Kegang Peng served as the Vice Chairman of the board of directors C Media Limited from October 2014 to the consummation of the asset exchangetransactions, and is now a member of the Company’s board of directors. Previously, from 2012 to 2014, Mr. Peng was chairman of the board and founder of JiangsuSuqian Jinghaiboyuan Information and Technology Co., Ltd. Mr. Peng studied at Beijing University of Aeronautics and Astronautics majoring computer andapplication.20F 1 f20f2017_luokungtech.htm AMENDMENT NO. 1 TO FORM 20FUNITED STATESSECURITIES AND EXCHANGE COMMISSIONWASHINGTON, D.C. 20549FORM 20F☐ REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934OR☐ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934For the Fiscal year ended _____________OR☒ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934For the transition period from October 1, 2017 to December 31, 2017☐ SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934Date of event requiring this shell company report Commission file number: 00134738Luokung Technology Corp.(Exact name of Registrant as specified in its charter)Not applicable(Translation of Registrant’s name into English)British Virgin IslandsLAB 32, SOHO 3Q, No 9, Guanghua Road, Chaoyang District, BeijingPeople’s Republic of China, 100020(Jurisdiction of incorporation or organization)(Address of principal executive offices)Mr. Muqiao GengLAB32, SOHO 3Q, No 9, Guanghua Road, Chaoyang District, BeijingPeople’s Republic of China 100020Tel: (86) 1085866721(Name, telephone, Email and/or facsimile number and address of company contact person)Securities registered or to be registered pursuant to Section 12(b) of the Act:Title of each className of each exchange on which registeredOrdinary shares, par value $0.01 per shareNonePreferred shares, par value $0.01 per shareNoneSecurities registered or to be registered pursuant to Section 12(g) of the Act:none(Title of Class)Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act:none(Title of Class)Indicate the number of outstanding shares of each of the issuer’s classes of capital or common stock as of the close of the period covered by the transitionreport. 187,097,599 Ordinary Shares, including 186,383,224 Ordinary Shares represented by 714,375 American Depositary Shares, and 1,000,000 Preferred Sharesoutstanding as of September 20, 2018.Indicate by check mark if the registrant is a wellknown seasoned issuer, as defined in Rule 405 of the Securities Act. ☐ Yes ☒ NoIf this report is an annual or transition report, indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of theSecurities Exchange Act of 1934. ☐ Yes ☒ NoIndicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirementsfor the past 90 days. ☒ Yes ☐ NoIndicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File requiredto be submitted and posted pursuant to Rule 405 of Regulation ST (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that theregistrant was required to submit and post such files). ☒ Yes ☐ NoIndicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a nonaccelerated filer. See definition of “accelerated filer andlarge accelerated filer” in Rule 12b2 of the Exchange Act. (Check one):Large accelerated filer ☐ Accelerated filer ☐ Nonaccelerated filer ☒Indicate by check mark which basis of accounting the registrant has used to prepare the financial statements included in this filing.U.S. GAAP ☒International Financial Reporting Standards as issuedby the International Accounting Standards Board ☐Other ☐If “Other” has been checked in response to the previous question, indicate by check mark which financial statement item the registrant has elected tofollow. Item 17 ☐ Item 18 ☐If this is an transition report, indicate by check mark whether the registrant is a shell company (as defined in Rule 12b2 of the ExchangeAct). ☐ Yes ☒ NoExplanatory NoteLuokung Technology Corp. (the “Company”) is filing this transition report on Form 20F (“Transition Report”) in connection with the completion of theexchange of certain of its assets for substantially all of the assets of C Media Limited (“C Media”) pursuant to that Asset Exchange Agreement, dated January 25,2018 (the “Original AEA”), as supplemented by the Addendum to Asset Exchange Agreement, dated October 3, 2018 (the “Addendum” and together with theOriginal AEA, the “AEA”). Following the consummation of the AEA, on October 4, 2018, the Company changed its fiscal year end from September 30 to the fiscalyear end used by C Media, December 31. This Transition Report covers the threemonth period from Octorber 1, 2017 to December 31, 2017, and the fiscal yearsdescribed herein.In this transition report:●References to the “Company”, “we”, “our” and “us” are to Luokung Technology Corp. and its consolidated subsidiaries and variable interestentity, except as the context otherwise requires;●This transition report on Form 20F covers the threemonth period from October 1, 2017 through December 31, 2017 (the “Transition Period”) andreflects our financial results thereof. Prior to this transition report on Form 20F, our two most recent annual reports on Form 20F cover the fiscalyears ended September 30, 2017 and September 30, 2016, respectively, and reflect financial results for the respective twelvemonth periods fromOctober 1 to September 30. Unless otherwise noted, all references to years are to the calendar year from January 1 to December 31 and referencesto our fiscal year or years are to the fiscal year or years which, prior to the Transition Period, ended September 30, while from and after theTransition Period, ended December 31;●References to an “ADS” are to an American Depositary Share, each of which represents one of our Ordinary Shares with a par value of $.01 pershare.Special Note Regarding Forwardlooking StatementsThis transition report contains forwardlooking statements that involve risks and uncertainties. These statements involve known and unknown risks,uncertainties and other factors that may cause our actual results, performance or achievements to be materially different from those expressed or implied by theforwardlooking statements.You can identify these forwardlooking statements by words or phrases such as “may,” “will,” “expect,” “anticipate,” “aim,” “estimate,” “intend,” “plan,”“believe,” “likely to” or other similar expressions. We have based these forwardlooking statements largely on our current expectations and projections about futureevents and financial trends that we believe may affect our financial condition, results of operations, business strategy and financial needs. You should not placeundue reliance on these forwardlooking statements, which apply only as of the date of this transition report. These forwardlooking statements include:●our future business development, results of operations and financial condition;●expected changes in our net revenues and certain cost or expense items;●our ability to attract and retain customers; and●trends and competition in the enterprise mobile software application market.You should read this transition report thoroughly with the understanding that our actual future results may be materially different from, and/or worse, thanwhat we expect. We qualify all of our forwardlooking statements by these cautionary statements. Other sections of this transition report include additional factorswhich could adversely impact our business and financial performance. Moreover, we operate in an evolving environment. New risk factors and uncertainties emergefrom time to time and it is not possible for our management to predict all risk factors and uncertainties, nor can we assess the impact of all factors on our business orthe extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forwardlooking statements.This transition report also contains estimates, projections and statistical data related to the market for the provision of WiFi and mobile applications inChina. This market data, including data from IDC, a leading provider of market data and intelligence, speaks as of the date it was published and includes projectionsthat are based on a number of assumptions and are not representations of fact. The market for the provision of WiFi and mobile applications in China may not growat the rates projected by the market data, or at all. The failure of the market to grow at the projected rates may materially and adversely affect our business and themarket price of our ADSs. In addition, the rapidly changing nature of the market for the provision of WiFi and mobile applications subjects any projections orestimates relating to the growth prospects or future condition of our market to significant uncertainties. If any one or more of the assumptions underlying the marketdata proves to be incorrect, actual results may differ from the projections based on these assumptions.You should not rely upon forwardlooking statements as predictions of future events. We undertake no obligation to update or revise any forwardlookingstatements, whether as a result of new information, future events or otherwise.TABLE OF CONTENTSPart IItem 1.Identity of Directors, Senior Management and Advisers.1Item 2.Offer Statistics and Expected Timetable.1Item 3.Key Information.1A.Selected Financial Data.1B.Capitalization and Indebtedness.3C.Reasons for the Offer and Use of Proceeds.3D.Risk Factors.3Item 4.Information on the Company.19A.History and Development of the Company.19B.Business Overview.20C.Organizational Structure.30D.Property, Plants and Equipment.32Item 4A.Unresolved Staff Comments.32Item 5.Operating and Financial Review and Prospects.32A.Operating Results.32B.Liquidity and Capital Resources.35C.Research and Development, Patents and Licenses, etc.35D.Trend Information.35E.Offbalance Sheet Arrangements.35F.Tabular Disclosure of Contractual Obligations.36Item 6.Directors, Senior Management and Employees.36A.Directors and Senior Management.36B.Compensation.37C.Board Practices.40D.Employees.43E.Share Ownership.43Item 7.Major Shareholders and Related Party Transactions.44A.Major Shareholders.44B.Related Party Transactions.45C.Interests of Experts and Counsel.45Item 8.Financial Information.45A.Consolidated Statements and Other Financial Information.45B.Significant Changes.46Item 9.The Offer and Listing.46A.Offer and Listing Details.46B.Plan of Distribution.47C.Markets.47D.Selling shareholders.48E.Dilution.48F.Expenses of the issue.48Item 10.Additional Information.48A.Share Capital.48B.Memorandum and Articles of Association.48C.Material Contracts.53D.Exchange Controls.54E.Taxation.61F.Dividends and Paying Agents.67G.Statement by Experts.67H.Documents on Display.67I.Subsidiary Information.68Item 11.Quantitative and Qualitative Disclosures about Market Risk.68Item 12.Description of Securities Other than Equity Securities.69A.Debt Securities.69B.Warrants and Rights.69C.Other Securities.69D.American Depositary Shares.69iPart IIItem 13.Defaults, Dividend Arrearages and Delinquencies.71Item 14.Material Modifications to the Rights of Security Holders and Use of Proceeds.71Item 15.Controls and Procedures.71Item 16.[Reserved.]72Item 16A.Audit Committee Financial Expert.72Item 16B.Code of Ethics.73Item 16C.Principal Accountant Fees and Services.73Item 16D.Exemptions from the Listing Standards for Audit Committees.73Item 16E.Purchases of Equity Securities by the Issuer and Affiliated Purchasers.73Item 16F.Change in Registrant’s Certifying Accountant.73Item 16G.Corporate Governance.73Item 16H.Mine Safety Disclosure.73Part IIIItem 17.Financial Statements.74Item 18.Financial Statements.74Item 19.Exhibits.74Index to Consolidated Financial StatementsF1iiPART IITEM 1. IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS.The directors of Luokung Technology Corp. are Xuesong Song, Kegang Peng, Dennis Galgano, Jin Shi, Jiming Ha, Zhihao Xu and Chuang Tao. Thebusiness address for our directors is LAB 32, SOHO 3Q, No 9, Guanghua Road, Chaoyang District, Beijing, People’s Republic of China.Moore Stephens CPA Limited has served as our auditor since October 5, 2018, and is located at 801806 Silvercord Tower 1, 30 Canton road, Tsimshatsui,Kowloon, Hong Kong. BDO China Shun Lun Pan Certified Public Accountants LLP served as our auditors for the last three years, and are located at 4F, No. 61Nanjing Road, Shanghai, People’s Republic of China.Garvey Schubert Barer, P.C., serves as our legal counsel in the United States, and is located at Flour Mill Building, 1000 Potomac Street NW, Suite 200,Washington, D.C., 200073501.Conyers Dill & Pearlman serves as our legal counsel with regard to the laws of the British Virgin Islands, and is located at 29th Floor, One Exchange Square,8 Connaught Place, Central, Hong Kong.ITEM 2. OFFER STATISTICS AND EXPECTED TIMETABLE.Not applicable.ITEM 3. KEY INFORMATION.A. SELECTED FINANCIAL DATA.Luokung Technology Corp. and its consolidated subsidiaries (“Luokung Technology”, “we”, “us”, or “the Company”) consummated an asset exchangeagreement pursuant to which we exchanged our existing assets with those of C Media Limited (the “Asset Exchange”) on August 17, 2018, and we changed ourname from Kingtone Wirelessinfo Solution Holding Ltd. to our current name on August 20, 2018. On October 4, 2018, in connection with the consummation of the Asset Exchange, we changed our fiscal year end from September 30 to December 31.1The selected financial data for the fiscal years ended December 31 2017 and 2016 have been derived from our audited consolidated and combined financialstatements. The selected consolidated and combined financial data should be read in conjunction with our audited financial statements and the accompanying notesand “Item 5 – Operating and Financial Review and Prospects.” Our consolidated and combined financial statements are prepared and presented in accordance withUnited States generally accepted accounting principles, or U.S. GAAP. Our historical results do not necessarily indicate our results expected for any future periods.You should not view our historical results as an indicator of our future performance.LK TECHNOLOGY LTD. AND SUBSIDIARIESSELECTED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS(IN U.S. DOLLARS)For the years ended December 31,20172016Revenues$26,082,417$5,233,145Less: Cost of revenues5,547,7796,315,504Less: Operating expenses:Selling and marketing23,908,7336,209,804General and administrative2,451,2492,108,854Research and development1,046,1982,882,202Total operating expenses27,406,18011,200,860Loss from operations(6,871,542)(12,283,219)Other income (expense):Interest expense(26,611)(4,412)Foreign exchange gains(losses)350,679(298,257)Loss from investment(428,571)Other income (expense), net(262,980)(34,572)Total other income (expense), net61,088(765,812)Loss before income taxes(6,810,454)(13,049,031)Income taxesNet loss$(6,810,454)$(13,049,031)Other comprehensive income:Foreign currency translation adjustment90,671387,375Total comprehensive loss$(6,719,783)$(12,661,656)2LK TECHNOLOGY LTD. AND SUBSIDIARIESSELECTED CONSOLIDATED BALANCE SHEETS(IN U.S. DOLLARS)As of December 31,20172016Accounts receivable, net of allowance for doubtful accounts9,729,6251,865,836Amounts due from related parties11,760,692Property and equipment, net5,044,8727,771,027Goodwill7,239,9367,239,936TOTAL ASSETS37,582,85821,114,832Accounts payable8,784,5186,446,584Accrued liabilities and other payables12,962,91211,329,613Total liabilities25,311,11333,905,520Total Shareholder’s Equity (Deficit)12,271,745(12,790,688)TOTAL LIABILITIES AND SHAREHOLDER’S EQUITY (DEFICIT)37,582,85821,114,832B. CAPITALIZATION AND INDEBTEDNESS.Not applicable.C. REASONS FOR THE OFFER AND USE OF PROCEEDS.Not applicable.D. RISK FACTORS.An investment in our ADSs and ordinary shares involves a high degree of risk. You should carefully consider the risks and uncertainties described belowtogether with all other information contained in this transition report, including the matters discussed under “Special Note Regarding ForwardLooking Statements,”before you decide to invest in our ADSs or ordinary shares. You should pay particular attention to the fact that we are a holding company with substantialoperations in China and are subject to legal and regulatory environments that in many respects differ from those of the United States. If any of the following risks, orany other risks and uncertainties that are not presently foreseeable to us, actually occur, our business, financial condition, results of operations, liquidity and ourfuture growth prospects would be materially and adversely affected. You should also consider all other information contained in this transition report beforedeciding to invest in our ADSs or ordinary shares.Risks Related to Our Company and Our IndustryThe Company had incurred negative cash flows from operating activities and net losses as of December 31, 2017. These matters raise substantial doubt aboutthe Company’s ability to continue as a going concern.The Company’s consolidated financial statements are prepared using generally accepted accounting principles in the United States of America applicableto a going concern, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. As of and for the year endedDecember 31, 2017, the Company had incurred significant operating losses and working capital deficit. The ability of the Company to continue as a going concern isdependent on the Company obtaining adequate capital to fund operating losses until it becomes profitable. If the Company is unable to obtain adequate capital, itcould be forced to cease operations. The accompanying consolidated financial statements do not include any adjustments that might be necessary if the Companyis unable to continue as a going concern.3We may undertake acquisitions, investments, joint ventures or other strategic alliances, which could have a material adverse effect on our ability to manageour business. In addition, such undertakings may not be successful.Our strategy includes plans to grow both organically and through acquisitions, participation in joint ventures or other strategic alliances. Joint venturesand strategic alliances may expose us to new operational, regulatory and market risks, as well as risks associated with additional capital requirements. We may not beable, however, to identify suitable future acquisition candidates or alliance partners. Even if we identify suitable candidates or partners, we may be unable tocomplete an acquisition or alliance on terms commercially acceptable to us. If we fail to identify appropriate candidates or partners, or complete desired acquisitions,we may not be able to implement our strategies effectively or efficiently. In addition, our ability to successfully integrate acquired companies and their operations may be adversely affected by several factors. These factorsinclude:1.diversion of management’s attention;2.difficulties in retaining customers of the acquired companies;3.difficulties in retaining personnel of the acquired companies;4.entry into unfamiliar markets;5.unanticipated problems or legal liabilities; and6.tax and accounting issues.If we fail to integrate acquired companies efficiently, our earnings, revenue growth and business could be negatively affected.Due to intense competition for highlyskilled personnel, we may fail to attract and retain enough sufficiently trained employees to support our operations; ourability to bid for and obtain new projects may be negatively affected and our revenues could decline as a result.The IT industry relies on skilled employees, and our success depends to a significant extent on our ability to attract, hire, train and retain qualifiedemployees. There is significant competition in China for professionals with the skills necessary to develop the products and perform the services we offer to ourcustomers. Increased competition for these professionals, in the mobile application design area or otherwise, could have an adverse effect on us if we experiencesignificant increase in the attrition rate among employees with specialized skills, which could decrease our operating efficiency and productivity and could lead to adecline in demand for our services.In addition, our ability to serve existing customers and business partners and obtain new business will depend, in large part, on our ability to attract, trainand retain skilled personnel that enable us to keep pace with growing demands for wifi connectivity and mobile applications, evolving industry standards andchanging customer preferences. Our failure to attract, train and retain personnel with the qualifications necessary to fulfill the needs of our existing and futurecustomers or to assimilate new employees successfully could have a material adverse effect on our business, financial condition and results of operations. Ourfailure to retain our key personnel on business development or find suitable replacements of the key personnel upon their departure may lead to shrinking newimplementation projects, which could materially adversely affect our business.4Our business depends substantially on the continuing efforts of our senior executives and other key personnel, and our business may be severely disrupted if welose their services.Our future success heavily depends upon the continued services of our senior executives and other key employees, particularly since we recentlyappointed a new chairman. We are reliant on the services of Mr. Xuesong Song, our chairman, chief executive officer and member of our board of directors. If one ormore of our senior executives or key employees is unable or unwilling to continue in his or her present position, we may not be able to replace such employee easily,or at all, we may incur additional expenses to recruit, train and retain replacement personnel, our business may be severely disrupted, and our financial condition andresults of operations may be materially adversely affected.Our business could suffer if our executives and directors compete against us and our noncompetition agreements with them cannot be enforced.If any of our senior executives or key employees joins a competitor or forms a competing company, we may lose customers, knowhow and keyprofessionals and staff members to them. Also, if any of our business development managers who keep a close relationship with our customers and businesspartners joins a competitor or forms a competing company, we may lose customers, and our revenues may be materially adversely affected. Most of our executiveshave entered, or will soon enter, into employment agreements with us that contain or will contain noncompetition provisions. However, if any dispute arisesbetween our executive officers and us, such noncompetition provisions may not be enforceable, especially in China, where all of these executive officers and keyemployees reside, in light of the uncertainties with China’s legal system. See “Risk Factors — Risks Related to Doing Business in China — Uncertainties withrespect to the PRC legal system could adversely affect us.”Our computer networks may be vulnerable to security risks that could disrupt our services and adversely affect our results of operations.Our computer networks may be vulnerable to unauthorized access, computer hackers, computer viruses and other security problems caused byunauthorized access to, or improper use of, systems by third parties or employees. A hacker who circumvents security measures could misappropriate proprietaryinformation or cause interruptions or malfunctions in operations. Computer attacks or disruptions may jeopardize the security of information stored in andtransmitted through computer systems and mobile devices of our customers. Actual or perceived concerns that our systems may be vulnerable to such attacks ordisruptions may deter customers from using our services. As a result, we may be required to expend significant resources to protect against the threat of thesesecurity breaches or to alleviate problems caused by these breaches, which could adversely affect our results of operations.If we do not continually enhance our solutions and service offerings, we may have difficulty in retaining existing customers and attracting new customers.We believe that our future success will depend, to a significant extent, upon our ability to enhance our existing applications and platform, and to introducenew features to meet the preferences and requirements of our customers in a rapidly developing and evolving market. Unexpected technical, operational, distributionor other problems could delay or prevent the introduction of one or more of these products or services, or any products or services that we may plan to introduce inthe future. Our present or future products may not satisfy the evolving preferences and tastes of our customers, and these solutions and services may not achieveanticipated market acceptance or generate incremental revenue. If we are unable to anticipate or respond adequately to the need for service or productenhancements due to resource, technological or other constraints, our business, financial condition and results of operations could be materially and adverselyaffected.5If we are unable to develop competitive new products and service offerings our future results of operations could be adversely affected.Our future revenue stream depends to a large degree on our ability to utilize our technology in a way that will allow us to offer new types of mobileapplications and services to a broader customer base. We will be required to make investments in research and development in order to continually develop newsoftware applications and related service offerings, enhance our existing platform, mobile applications and related service offerings and achieve market acceptanceof our mobile applications and service offerings. We may incur problems in the future in innovating and introducing new mobile applications and service offerings.Our developmentstage mobile applications may not be successfully completed or, if developed, may not achieve significant customer acceptance. If we are unableto successfully define, develop and introduce competitive new mobile applications, and enhance existing mobile applications, our future results of operations wouldbe adversely affected. The timely availability of new applications and their acceptance by customers are important to our future success. A delay in the developmentof new applications could have a significant impact on its results of operations.Changes in technology could adversely affect our business by increasing our costs, reducing our profit margins and causing a decline in our competitiveness.China’s wireless telecom industry, in which we operate, is characterized by rapidly changing technology, evolving industry standards, frequentintroductions of new services and solutions and enhancements as well as changing customer demands. New solutions and new technologies often render existingsolutions and services obsolete, excessively costly or otherwise unmarketable. As a result, our success depends on our ability to adapt to the latest technologicalprogress, such as the 5G standard and technologies, and to develop or acquire and integrate new technologies into our platform, mobile applications and relatedservices. Advances in technology also require us to commit substantial resources to developing or acquiring and then deploying new technologies for use in ouroperations. We must continuously train personnel in new technologies and in how to integrate existing hardware and software systems with these newtechnologies. We may not be able to adapt quickly to new technologies or commit sufficient resources to compete successfully against existing or new competitorsin bringing to market solutions and services that incorporate these new technologies. We may incur problems in the future in innovating and introducing new mobileapplications and service offerings. Our development of new mobile applications and platform enhancements may not be successfully completed or, if developed,may not achieve significant customer acceptance. If we fail to adapt to changes in technologies and compete successfully against established or new competitors,our business, financial condition and results of operations could be adversely affected.Problems with the quality or performance of our hardware, software or other systems may cause delays in the introduction of new solutions or result in the lossof customers and revenues, which could have a material and adverse effect on our business, financial condition and results of operations.Our hardware and software systems are complex and may contain defects, errors or bugs when first introduced to the market or to a particular customer, oras new versions are released. Because we cannot test for all possible scenarios, our systems may contain errors that are not discovered until after they have beeninstalled or implemented, and we may not be able to timely correct these problems. These defects, errors or bugs could interrupt or delay the completion of projectsor sales to our customers. In addition, our reputation may be damaged and we may fail to acquire new projects from existing customers or new customers. Errors mayoccur when we provide systems integration and maintenance services. Even in cases where we have agreements with our customers that contain provisionsdesigned to limit our exposure to potential claims and liabilities arising from customer problems, these provisions may not effectively protect us against such claimsin all cases and in all jurisdictions. In addition, as a result of business and other considerations, we may undertake to compensate our customers for damages arisingfrom the use of our solutions, even if our liability is limited by these provisions. Moreover, claims and liabilities arising from customer problems could also result inadverse publicity and materially and adversely affect our business, results of operations and financial condition. We currently do not carry any product or serviceliability insurance and any imposition of liability on us may materially and adversely affect our business and increase our costs, resulting in reduced revenues andprofitability.Our products may contain undetected software defects, which could negatively affect our revenues.Our software products are complex and may contain undetected defects. Although we test our products, it is possible that errors may be found or occur inour new or existing products after we have commenced commercial shipment of those products. Defects, whether actual or perceived, could result in adversepublicity, loss of revenues, product returns, a delay in market acceptance of our products, loss of competitive position or claims against us by customers. Any suchproblems could be costly to remedy and could cause interruptions, delays, or cessation of our product sales, which could cause us to lose existing or prospectivecustomers and could negatively affect our results of operations.6We may be subject to infringement, misappropriation and indemnity claims in the future, which may cause us to incur significant expenses, pay substantialdamages and be prevented from providing our services or technologies.Our success depends, in part, on our ability to carry out our business without infringing the intellectual property rights of third parties. Patent andcopyright law covering softwarerelated technologies is evolving rapidly and is subject to a great deal of uncertainty. Our selfdeveloped or licensed technologies,processes or methods may be covered by thirdparty patents or copyrights, either now existing or to be issued in the future. Any potential litigation may cause us toincur significant expenses. Thirdparty claims, if successfully asserted against us may cause us to pay substantial damages, seek licenses from third parties, payongoing royalties, redesign our services or technologies, or prevent us from providing services or technologies subject to these claims. Even if we were to prevail,any litigation would likely be costly and timeconsuming and divert the attention of our management and key personnel from our business operations.Our failure to protect our intellectual property rights may undermine our competitive position, and subject us to costly litigation to protect our intellectualproperty rights.Any misappropriation of our technology or the development of competitive technology could seriously harm our business. We regard a substantial portionof our hardware and software systems as proprietary and rely on statutory copyright, trademark, patent, trade secret laws, customer license agreements, employeeand thirdparty nondisclosure agreements and other methods to protect our proprietary rights. Nevertheless, these resources afford only limited protection and theactions we take to protect our intellectual property rights may not be adequate. In particular, third parties may infringe or misappropriate our proprietarytechnologies or other intellectual property rights, which could have a material adverse effect on our business, financial condition and results of operations. Inaddition, intellectual property rights and confidentiality protection in China may not be as effective as in the United States, and policing unauthorized use ofproprietary technology can be difficult and expensive. Further, litigation may be necessary to enforce our intellectual property rights, protect our trade secrets ordetermine the validity and scope of the proprietary rights of others. The outcome of any such litigation may not be in our favor. Any such litigation may be costlyand may divert management attention, as well as our other resources, away from our business. An adverse determination in any such litigation will impair ourintellectual property rights and may harm our business, prospects and reputation. In addition, we have no insurance coverage against litigation costs and wouldhave to bear all litigation costs in excess of the amount recoverable from other parties. The occurrence of any of the foregoing could have a material adverse effecton our business, financial condition and results of operations. Our solutions incorporate a portion of, and work in conjunction with, thirdparty hardware and software solutions. If these thirdparty hardware or softwaresolutions are not available to us at reasonable costs, or at all, our results of operations could be adversely impacted.Although our hardware and software systems and mobile applications primarily rely on our own core technologies, some elements of our systemsincorporate a small portion of thirdparty hardware and software solutions. If any third party were to discontinue making their intellectual property available to us orour customers on a timely basis, or increase materially the cost of their licensing such intellectual property, or if our systems or applications failed to properlyfunction or interoperate with replacement intellectual property, we may need to incur costs in finding replacement thirdparty solutions and/or redesigning oursystems or applications to replace or function with or on replacement thirdparty proprietary technology. Replacement technology may not be available on termsacceptable to us or at all, and we may be unable to develop alternative solutions or redesign our systems or applications on a timely basis or at a reasonable cost. Ifany of these were to occur, our results of operations could be adversely impacted.7Our ability to sell our products is highly dependent on the quality of our service and support offerings, and our failure to offer high quality service could have amaterial adverse effect on our ability to market and sell our products.Our customers depend upon our customer service and support staff to resolve issues relating to our products. Highquality support services are critical forthe successful marketing and sale of our products. If we fail to provide highquality support on an ongoing basis, our customers may react negatively and we maybe materially and adversely affected in our ability to sell additional products to these customers. This could also damage our reputation and prospects with potentialcustomers. Our failure to maintain highquality support services could have a material and adverse effect on our business, results of operations and financialcondition.Weaknesses in our internal controls over financial reporting or disclosure controls and procedures may have a material adverse effect on our business, theprice of our ordinary shares, operating results and financial condition.We are required to establish and maintain appropriate internal controls over financial reporting and disclosure controls and procedures. Pursuant to Section404 of the SarbanesOxley Act of 2002 and the related rules adopted by the Securities and Exchange Commission, every public company is required to include amanagement report on its internal controls over financial reporting in its transition report, which contains management’s assessment of the effectiveness of thecompany’s internal controls over financial reporting. This requirement first applied to our annual report on Form 20F for the fiscal year ended on September 30,2011. In connection with our assessments of our disclosure controls and procedures and internal controls over financial reporting, management concluded that as ofSeptember 30, 2018, our disclosure controls and procedures and our internal controls over financial reporting were not effective due to lack of U.S. generallyaccepted accounting principles (“U.S. GAAP”) expertise in our current accounting team. Please refer to the discussion under Item 15, “Controls and Procedures” forfurther discussion of our material weakness as of December 31, 2017. Should we be unable to remediate the material weakness promptly and effectively, suchweakness could harm our operating results, result in a material misstatement of our financial statements, cause us to fail to meet our financial reporting obligations orprevent us from providing reliable and accurate financial reports or avoiding or detecting fraud. This, in turn, could result in a loss of investor confidence in theaccuracy and completeness of our financial reports, which could have an adverse effect on the trading price of our ordinary shares. Any litigation or otherproceeding or adverse publicity relating to the material weaknesses could have a material adverse effect on our business and operating results. We have very limited insurance coverage which could expose us to significant costs and business disruption.We do not maintain any insurance coverage for our leased properties. Should any natural catastrophes such as earthquakes, floods, typhoons or any actsof terrorism occur in Beijing, China, where our head office is located and most of our employees are based, or elsewhere in China, we might suffer not onlysignificant property damages, but also loss of revenues due to interruptions in our business operations, which could have a material adverse effect on our business,operating results or financial condition.The insurance industry in China is still at an early stage of development. Insurance companies in China offer limited business insurance products, and donot, to our knowledge, offer business liability insurance. As a result, we do not have any business liability insurance coverage for our operations. Moreover, whilebusiness disruption insurance is available, we have determined that the risks of disruption and cost of the insurance are such that we do not require it at this time.Any business disruption, litigation or natural disaster might result in substantial costs and diversion of resources, particularly if it affects our technology platformswhich we depend on for delivery of our software and services, and could have a material adverse effect on our financial condition and results of operations.We may be liable to our customers for damages caused by unauthorized disclosure of sensitive and confidential information, whether through our employees orotherwise.We are typically required to manage, utilize and store sensitive or confidential customer data in connection with the products and services we provide.Under the terms of our customer contracts, we are required to keep such information strictly confidential. We seek to implement specific measures to protectsensitive and confidential customer data. We require our employees to enter into nondisclosure agreements to limit such employees’ access to, and distribution of,our customers’ sensitive and confidential information and our own trade secrets. We can give no assurance that the steps taken by us in this regard will be adequateto protect our customers’ confidential information. If our customers’ proprietary rights are misappropriated by our employees, in violation of any applicableconfidentiality agreements or otherwise, our customers may consider us liable for that act and seek damages and compensation from us. However, we currently donot have any insurance coverage for mismanagement or misappropriation of such information by our employees. Any litigation with respect to unauthorizeddisclosure of sensitive and confidential information might result in substantial costs and diversion of resources and management attention.8We may face intellectual property infringement claims that could be timeconsuming and costly to defend. If we fail to defend ourselves against such claims, wemay lose significant intellectual property rights and may be unable to continue providing our existing products and services.It is critical that we use and develop our technology and products without infringing upon the intellectual property rights of third parties, includingpatents, copyrights, trade secrets and trademarks. Intellectual property litigation is expensive and timeconsuming and could divert management’s attention from ourbusiness. A successful infringement claim against us, whether with or without merit, could, among others things, require us to pay substantial damages, developnoninfringing technology, or rebrand our name or enter into royalty or license agreements that may not be available on acceptable terms, if at all, and cease making,licensing or using products that have infringed a third party’s intellectual property rights. Protracted litigation could also result in existing or potential customersdeferring or limiting their purchase or use of our products until resolution of such litigation, or could require us to indemnify our customers against infringementclaims in certain instances. Also, we may be unaware of intellectual property registrations or applications relating to our services that may give rise to potentialinfringement claims against us. Parties making infringement claims may be able to obtain an injunction to prevent us from delivering our services or usingtechnology containing the allegedly infringing intellectual property. Any intellectual property litigation could have a material adverse effect on our business, resultsof operations or financial condition. Seasonality and fluctuations in our customers’ spending cycle and other factors can cause our revenues and operating results to vary significantly from quarterto quarter and from year to year.Our revenues and operating results will vary significantly from quarter to quarter and from year to year due to a number of factors, many of which areoutside of our control. Our new lines of business acquired upon the consummation of the asset exchange transaction discussed below see higher customer use andactivity during the Chinese New Year holiday than other times during the year when rail travel is high, which lead to higher revenue during this period as morecustomers would like to place more advertising. Due to these and other factors, our operating results may fluctuate significantly from quarter to quarter and fromyear to year. These fluctuations are likely to continue in the future, and operating results for any period may not be indicative of our future performance in any futureperiod.Our corporate actions are substantially controlled by our principal shareholders, who can cause us to take actions in ways you may not agree with.Mr. Xuesong Song, our chairman, chief executive officer and a member of our board of directors, beneficially owns 19.31% of our outstanding ordinaryshares and 1,000,000 preferred shares, and each preferred share has the right to 399 votes at a meeting of the members of the Company. Our officers and directors asa group beneficially own an aggregate of approximately 33.69% of our outstanding ordinary shares. These shareholders, acting individually or as a group, couldexert control and substantial influence over matters such as electing directors, amending our constitutional documents, and approving acquisitions, mergers or otherbusiness combination transactions. This concentration of ownership and voting power may also discourage, delay or prevent a change in control of our company,which could deprive our shareholders of an opportunity to receive a premium for their shares as part of a sale of our company and might reduce the price of ourshares. Alternatively, our controlling shareholders may cause a merger, consolidation or change of control transaction even if it is opposed by our othershareholders, including those who purchase shares in this offering.9We depend on a small number of customers to derive a significant portion of our revenues. If we were to become dependent again upon a few customers, suchdependency could negatively impact our business, operating results and financial condition.We derived a material portion of our revenues from a small number of customers. In the years ended December 31, 2017 and 2016, our five largestcustomers accounted for 99.8% and 78.5% of our total sales, respectively, and our largest customer Guangdong Zhanshi Media Advertising Co., Ltd. accounted forapproximately 80.8% of our total sales during for the fiscal year ended December 31, 2017. As our customer base may change from yeartoyear, during such yearsthat the customer base is highly concentrated, the fluctuation of our sales to any of such major customers could have a material adverse effect on our business,operating results and financial condition. Moreover, our high customer base concentration may also adversely affect our ability to negotiate contract prices withthese customers, which may in turn materially and adversely affect our results of operations.Our historical outstanding accounts receivable have been relatively high. Inability to collect our accounts receivable on a timely basis, if at all, couldmaterially and adversely affect our financial condition, liquidity and results of operations.Historically, our outstanding accounts receivable have been relatively high. As of December 31, 2017 and 2016, our outstanding accounts receivable beforeimpairment were $10.4 million and $2.10 million, respectively. Although we conduct credit evaluations of our customers, we generally do not require collateral orother security from our customers. In addition, we have had a relatively high customer concentration. The outstanding accounts receivable balance for our largestcustomer was 45.3% and 38.5% of our total accounts receivable balance as of December 31, 2017 and 2016, respectively. As a result, an extended delay or default inpayment relating to a significant account would likely have a material and adverse effect on the aging schedule and turnover days of our accounts receivable. Ourinability to collect our accounts receivable on a timely basis, if at all, could materially and adversely affect our financial condition, liquidity and results of operations.Risks Related to Doing Business in ChinaAdverse changes in political and economic policies of the PRC government could have a material adverse effect on the overall economic growth of China,which could reduce the demand for our services and materially and adversely affect our competitive position.Substantially all of our business operations are conducted in China. Accordingly, our business, results of operations, financial condition and prospects aresubject to a significant degree to economic, political and legal developments in China. Although the Chinese economy is no longer a planned economy, the PRCgovernment continues to exercise significant control over China’s economic growth through direct allocation of resources, monetary and tax policies, and a host ofother government policies such as those that encourage or restrict investment in certain industries by foreign investors, control the exchange between RMB andforeign currencies, and regulate the growth of the general or specific market. These government involvements have been instrumental in China’s significant growthin the past 30 years. The reorganization of the telecommunications industry encouraged by the PRC government has directly affected our industry and our growthprospect. In response to the recent global and Chinese economic downturn, the PRC government has adopted policy measures aimed at stimulating the economicgrowth in China. If the PRC government’s current or future policies fail to help the Chinese economy achieve further growth or if any aspect of the PRCgovernment’s policies limits the growth of the telecommunications industry in China or our industry or otherwise negatively affects our business, our growth rate orstrategy, our results of operations could be adversely affected as a result. Our business benefits from certain government tax incentives. Expiration, reduction or discontinuation of, or changes to, these incentives will increase our taxburden and reduce our net income.Under the PRC Enterprise Income Tax Law passed in 2007 and the implementing rules, both of which became effective on January 1, 2008, or the New EITLaw, a unified enterprise income tax rate of 25% and unified tax deduction standard is applied equally to both domesticinvested enterprises and foreigninvestedenterprises, or FIEs. Enterprises established prior to March 16, 2007 eligible for preferential tax treatment in accordance with the then tax laws and administrativeregulations shall gradually become subject to the New EIT Law rate over a fiveyear transition period starting from the date of effectiveness of the New EIT Law.However, certain qualifying hightechnology enterprises may still benefit from a preferential tax rate of 15% if they own their core intellectual properties and they areenterprises in certain Statesupported hightech industries to be later specified by the government. As a result, if our PRC subsidiaries qualify as “hightechnologyenterprises,” they will continue to benefit from the preferential tax rate of 15%, subject to transitional rules implemented from January 1, 2008. Our subsidiary, BeijingZhong Chuan Shi Xun Technology Limited, is qualified as a “hightechnology enterprise” until the end of the November 2018, and therefore it had benefited fromthe preferential tax rate of 15%, subject to transitional rules implemented on January 1, 2008. Although we intend to apply for a renewal of this qualification, if BeijingZhong Chuan Shi Xun ceases to qualify as a “hightechnology enterprise”, or the tax authorities change their position on our preferential tax treatments in thefuture, our future tax liabilities may materially increase, which could materially and adversely affect our financial condition and results of operations.10If we were deemed a “resident enterprise” by PRC tax authorities, we could be subject to tax on our global income at the rate of 25% under the New EIT Lawand our nonPRC shareholders could be subject to certain PRC taxes.Under the New EIT Law and the implementing rules, both of which became effective January 1, 2008, an enterprise established outside of the PRC with “defacto management bodies” within the PRC may be considered a PRC “resident enterprise” and will be subject to the enterprise income tax at the rate of 25% on itsglobal income as well as PRC enterprise income tax reporting obligations. The implementing rules of the New EIT Law define “de facto management” as “substantialand overall management and control over the production and operations, personnel, accounting, and properties” of the enterprise. However, as of the date of thistransition report, no final interpretations on the implementation of the “resident enterprise” designation are available. Moreover, any such designation, when madeby PRC tax authorities, will be determined based on the facts and circumstances of individual cases. Therefore, if we were to be considered a “resident enterprise”by the PRC tax authorities, our global income would be taxable under the New EIT Law at the rate of 25% and, to the extent we were to generate a substantial amountof income outside of PRC in the future, we would be subject to additional taxes. In addition, the dividends we pay to our nonPRC enterprise shareholders and gainsderived by such shareholders or ADS or ordinary share holders from the transfer of our shares or ADSs may also be subject to PRC withholding tax at the rate up to10%, if such income were regarded as Chinasourced income.Our holding company structure may limit the payment of dividends.We have no direct business operations, other than our ownership of our subsidiaries. While we have no current intention of paying dividends, should wedecide in the future to do so, as a holding company, our ability to pay dividends and meet other obligations depends upon the receipt of dividends or otherpayments from our operating subsidiaries and other holdings and investments. Current PRC regulations permit our PRC subsidiaries to pay dividends to us only outof their accumulated profits, if any, determined in accordance with Chinese accounting standards and regulations. In addition, each of our subsidiaries in China isrequired to set aside at least 10% of its aftertax profits each year, if any, to fund a statutory reserve until such reserve reaches 50% of its registered capital. Thesereserves are not distributable as cash dividends. Furthermore, if our subsidiaries in China incur debt on their own behalf in the future, the instruments governing thedebt may restrict their ability to pay dividends or make other payments to us. As a result, there may be limitations on the ability of our PRC subsidiaries to paydividends or make other investments or acquisitions that could be beneficial to our business or otherwise fund and conduct our business.In addition, under the New EIT Law and the implementing rules that became effective on January 1, 2008, dividends generated from the business of our PRCsubsidiaries after January 1, 2008 and payable to us may be subject to a withholding tax rate of 10% if the PRC tax authorities subsequently determine that we are anonresident enterprise, unless there is a tax treaty with China that provides for a different withholding arrangement.Uncertainties with respect to the PRC legal system could adversely affect us.We conduct all of our business through our subsidiaries in China. Our operations in China are governed by PRC laws and regulations. Our PRCsubsidiaries are generally subject to laws and regulations applicable to foreign investments in China and, in particular, laws and regulations applicable to whollyforeignowned enterprises. The PRC legal system is based on statutes. Prior court decisions may be cited for reference but have limited precedential value.11Since 1979, PRC legislation and regulations have significantly enhanced the protections afforded to various forms of foreign investments in China.However, China has not developed a fully integrated legal system and recently enacted laws and regulations may not sufficiently cover all aspects of economicactivities in China. In particular, because these laws and regulations are relatively new, and because of the limited volume of published decisions and theirnonbinding nature, the interpretation and enforcement of these laws and regulations involve uncertainties. In addition, the PRC legal system is based in part ongovernment policies and internal rules (some of which are not published on a timely basis or at all) that may have a retroactive effect. As a result, we may not beaware of our violation of these policies and rules until some time after the violation. In addition, any litigation in China may be protracted and result in substantialcosts and diversion of resources and management attention.PRC regulation of loans and direct investment by offshore holding companies to PRC entities may delay or prevent us from using the proceeds of our May2010 public offering to make loans or additional capital contributions to our PRC operating subsidiaries, which could materially and adversely affect ourliquidity and our ability to fund and expand our business.In utilizing the proceeds of our May 2010 public offering as an offshore holding company of our PRC operating subsidiaries, we may make loans to our PRCsubsidiaries, or we may make additional capital contributions to our PRC subsidiaries. Any loans to our PRC subsidiaries are subject to PRC regulations. Forexample, loans by us to our subsidiaries in China, which are FIEs, to finance their activities cannot exceed statutory limits and must be registered with the StateAdministration of Foreign Exchange, or SAFE. On August 29, 2008, SAFE promulgated Circular 142, a notice regulating the conversion by a foreigninvestedcompany of foreign currency into RMB by restricting how the converted RMB may be used. The notice requires that RMB converted from the foreign currencydenominated capital of a foreigninvested company may only be used for purposes within the business scope approved by the applicable governmental authorityand may not be used for equity investments within the PRC unless specifically provided for otherwise. The foreign currencydenominated capital shall be verified byan accounting firm before converting into RMB. In addition, SAFE strengthened its oversight over the flow and use of RMB funds converted from the foreigncurrencydenominated capital of a foreigninvested company. To convert such capital into RMB, the foreigninvested company must report the use of such RMB tothe bank, and the RMB must be used to the reported purposes. According to Circular 142, change of the use of such RMB without approval is prohibited. Inaddition, such RMB may not be used to repay RMB loans if the proceeds of such loans have not yet been used. Violations of Circular 142 may result in severepenalties, including substantial fines as set forth in the Foreign Exchange Administration Rules.We may also decide to finance our subsidiaries by means of capital contributions. These capital contributions may need approval from the PRC Ministry ofCommerce, or MOFCOM, or its local counterpart. We may not be able to obtain these government approvals on a timely basis, if at all, with respect to future capitalcontributions by us to our PRC subsidiaries. If we fail to receive such approvals in such cases when approval is required, our ability to use the proceeds of our May2010 public offering and to capitalize our PRC operations may be negatively affected, which could adversely affect our liquidity and our ability to fund and expandour business.Governmental control of currency conversion may affect the value of your investment.The PRC government imposes controls on the convertibility of the RMB into foreign currencies and, in certain cases, the remittance of currency out ofChina. We receive substantially all of our revenues in RMB. Under our current corporate structure, our income is primarily derived from dividend payments from ourPRC subsidiaries. Shortages in the availability of foreign currency may restrict the ability of our PRC subsidiaries to remit sufficient foreign currency to paydividends or other payments to us, or otherwise satisfy their foreign currency denominated obligations. Under existing PRC foreign exchange regulations, paymentsof current account items, including profit distributions, interest payments and expenditures from traderelated transactions, can be made in foreign currencieswithout prior approval from SAFE by complying with certain procedural requirements. However, approval from appropriate government authorities is required whereRMB is to be converted into foreign currency and remitted out of China to pay capital expenses such as the repayment of loans denominated in foreign currencies.The PRC government may also at its discretion restrict access in the future to foreign currencies for current account transactions. If the foreign exchange controlsystem prevents us from obtaining sufficient foreign currency to satisfy our currency demands, we may not be able to pay dividends in foreign currencies to ourshareholders, including holders of our ADSs or ordinary shares.12Fluctuation in the value of the RMB may have a material adverse effect on the value of your investment.The value of the RMB against the U.S. dollar and other currencies may fluctuate and is affected by, among other things, changes in political and economicconditions. On July 21, 2005, the PRC government changed its decadeold policy of pegging the value of the RMB to the U.S. dollar. Under the new policy, the RMBis permitted to fluctuate within a narrow and managed band against a basket of certain foreign currencies. This change in policy has resulted in an approximate26.8% appreciation of the RMB against the U.S. dollar between July 21, 2005 and September 30, 2015. Provisions on Administration of Foreign Exchange, asamended in August 2008, further changed China’s exchange regime to a managed floating exchange rate regime based on market supply and demand. Since reachinga high against the U.S. dollar in July 2008, however, the RMB has traded within a narrow band against the U.S. dollar, remaining within 1% of its July 2008 high butnever exceeding it. As a consequence, the RMB has fluctuated sharply since July 2008 against other freelytraded currencies, in tandem with the U.S. dollar. InAugust 2015, the PRC Government devalued its currency by approximately 3%, representing the largest yuan depreciation for 20 years. Concerns remain thatChina’s slowing economy, and in particular its exports, will need a stimulus that can only come from further cuts in the exchange rate.It is difficult to predict how long the current situation may continue and when and how it may change again as the People’s Bank of China may regularlyintervene in the foreign exchange market to achieve economic policy goals. Substantially all of our revenues and costs are denominated in the RMB, and asignificant portion of our financial assets are also denominated in RMB. We principally rely on dividends and other distributions paid to us by our subsidiaries inChina. Any significant revaluation of the RMB may materially and adversely affect our cash flows, revenues, earnings and financial position, and the value of, andany dividends payable on, our ADSs or ordinary shares in U.S. dollars. Any fluctuations of the exchange rate between the RMB and the U.S. dollar could also resultin foreign currency translation losses for financial reporting purposes.PRC laws and regulations governing our businesses. If we are found to be in violation of such PRC laws and regulations, we could be subject to sanctions. Inaddition, changes in such PRC laws and regulations may materially and adversely affect our business.There are substantial uncertainties regarding the interpretation and application of PRC laws and regulations, including, but not limited to, the laws andregulations governing our business. These laws and regulations are relatively new and may be subject to change, and their official interpretation and enforcementmay involve substantial uncertainty. The effectiveness of newly enacted laws, regulations or amendments may be delayed, resulting in detrimental reliance byforeign investors. New laws and regulations that affect existing and proposed future businesses may also be applied retroactively.The PRC government has broad discretion in dealing with violations of laws and regulations, including levying fines, revoking business and other licensesand requiring actions necessary for compliance. In particular, licenses and permits issued or granted to us by relevant governmental bodies may be revoked at a latertime by higher regulatory bodies. We cannot predict the effect of the interpretation of existing or new PRC laws or regulations on our businesses. We cannot assureyou that our current ownership and operating structure would not be found in violation of any current or future PRC laws or regulations. As a result, we may besubject to sanctions, including fines, and could be required to restructure our operations or cease to provide certain services. In addition, any litigation in China maybe protracted and result in substantial costs and diversion of resources and management attention. Any of these or similar actions could significantly disrupt ourbusiness operations or restrict us from conducting a substantial portion of our business operations, which could materially and adversely affect our business,financial condition and results of operations.13If we were required to obtain the prior approval of the China Securities Regulatory Commission, or CSRC, of the listing and trading of our ADSs on theNASDAQ Capital Market, we may face regulatory actions or other sanctions from the CSRC or other PRC regulatory agencies.On August 8, 2006, six PRC regulatory agencies, including the Ministry of Commerce, the State Assets Supervision and Administration Commission, theState Administration for Taxation, the State Administration for Industry and Commerce, the CSRC and the SAFE, jointly issued the Regulations on Mergers andAcquisitions of Domestic Enterprises by Foreign Investors, which became effective on September 8, 2006 (the “New M&A Rules”). This regulation, among otherthings, includes provisions that purport to require that an offshore special purpose vehicle formed for the purposes of overseas listing of equity interests in PRCcompanies and controlled directly or indirectly by PRC companies or individuals obtain the approval of the CSRC prior to the listing and trading of such specialpurpose vehicle’s securities on an overseas stock exchange. On September 21, 2006, the CSRC published on its official website procedures regarding its approval ofoverseas listings by special purpose vehicles. The CSRC approval procedures require the filing of a number of documents with the CSRC and it would take severalmonths to complete the approval process, if practicable at all. The application of this new PRC regulation remains unclear with no consensus currently existingamong leading PRC law firms regarding the scope of the applicability of the CSRC approval requirement. Prior to our May 2010 initial public offering, our PRC counsel has advised us that, based on its understanding of the current PRC laws and regulations aswell as the procedures announced on September 21, 2006: (i) Softech was directly incorporated by Topsky as a foreign investment enterprise under PRC law;therefore, there was no acquisition of the equity of a “PRC domestic company” as defined under the New M&A Rules; and (ii) the contractual arrangementsbetween Kingtone Information and Softech were not clearly defined and considered as the transaction which shall be applied to the New M&A Rules. Therefore, wedid not seek prior CSRC approval for our initial public offering.However, if the CSRC required that we obtain its approval prior to the completion of our initial public offering and the listing of our ADSs on the NASDAQCapital Market, we may face regulatory actions or other sanctions from the CSRC or other PRC regulatory agencies. These regulatory agencies may impose fines andpenalties on our operations in the PRC, limit our operating privileges in the PRC, delay or restrict the repatriation of the proceeds from our initial public offering intothe PRC, or take other actions that could have a material adverse effect on our business, financial condition, results of operations, reputation and prospects, as wellas the trading price of our shares.Also, if the CSRC requires that we obtain its approval, we may be unable to obtain a waiver of the CSRC approval requirements if and when procedures areestablished to obtain such a waiver. Any uncertainties and/or negative publicity regarding this CSRC approval requirement could have a material adverse effect onthe trading price of our shares.PRC regulations relating to the establishment of offshore special purpose companies by PRC residents may subject our PRC resident shareholders to penaltiesand limit our ability to inject capital into our PRC subsidiaries, limit our PRC subsidiaries’ ability to distribute profits to us, or otherwise adversely affect us.On October 21, 2005, the SAFE issued the Notice on Issues Relating to the Administration of Foreign Exchange in Fundraising and Reverse InvestmentActivities of Domestic Residents Conducted via Offshore Special Purpose Companies, or Notice 75, which became effective as of November 1, 2005. According toNotice 75, prior registration with the local SAFE branch is required for PRC residents to establish or to control an offshore company for the purposes of financingsuch offshore company with assets or equity interests in an onshore enterprise located in the PRC, or an offshore special purpose company. An amendment toregistration or filing with the local SAFE branch by such PRC resident is also required for the injection of equity interests or assets of an onshore enterprise in theoffshore special purpose company or overseas funds raised by such offshore company, or any other material change involving a change in the capital of theoffshore special purpose company. Moreover, Notice 75 applies retroactively. As a result, PRC residents who have established or acquired control of offshorespecial purpose companies that have made onshore investments in the PRC in the past are required to have completed the relevant registration procedures with thelocal SAFE branch by March 31, 2006. To further clarify the implementation of Notice 75, the SAFE issued Circular 106 on May 29, 2007. Under Circular 106, PRCsubsidiaries of an offshore special purpose company are required to coordinate and supervise the filing of SAFE registrations by the offshore holding company’sshareholders or beneficial owners who are PRC residents in a timely manner.14Some of our current shareholders and/or beneficial owners may fall within the ambit of the SAFE notice and be required to register with the local SAFEbranch as required under the SAFE notice. If so required, and if such shareholders and/or beneficial owners fail to timely register their SAFE registrations pursuantto the SAFE notice, or if future shareholders and/or beneficial owners of our company who are PRC residents fail to comply with the registration procedures setforth in the SAFE notice, this may subject such shareholders, beneficial owners and/or our PRC subsidiaries to fines and legal sanctions and may also limit ourability to contribute additional capital into our PRC subsidiaries, limit our PRC subsidiaries’ ability to distribute dividends to our company, or otherwise adverselyaffect our business.Risks Associated with our ADSs and Ordinary SharesOur securities are not currently traded on any United States public markets and you may not be able to resell your securities for some time.There is currently no public market for our ordinary shares or American Depository Shares (“ADSs”) in the United States or in any other jurisdiction. OurADSs were voluntarily delisted from the NASDAQ Capital Market on September 19, 2018. We have applied to NASDAQ for the listing of our ordinary shares on theNASDAQ Capital Market and received an approval for listing of Ordinary Shares on August 6, 2018, and as of the date of this transition report, that application andapproval are currently under review. We cannot assume that our ordinary shares will be accepted for listing on the NASDAQ Capital Market, or if listed, that wewould continue to meet the applicable minimum listing requriements. You may not be able to sell your ordinary shares quickly or at all if we are unable to gain listingon a public market in the United States.The market price of our ADSs has historically been highly volatile, and you may not be able to resell our ordinary shares at or above your initial purchaseprice.There may be a limited public market for our ordinary shares and, as discussed above, our ADSs are no longer listed on any public market in the UnitedStates or any other jurisdiction. We cannot assure you that there will be an active trading market for our ordinary shares in the future. If our ordinary shares areaccepted for listing on a public market, you may not be able to sell your ordinary shares quickly or at the market price if trading in our ordinary shares is not active. The trading price of our ADSs and ordinary shares may be volatile. The price of our ADSs and ordinary shares could be subject to wide fluctuations inresponse to a variety of factors, including the following:1.Introduction of new products, services or technologies offered by us or our competitors;2.Failure to meet or exceed revenue and financial projections we provide to the public;3.Actual or anticipated variations in quarterly operating results;4.Failure to meet or exceed the estimates and projections of the investment community;5.General market conditions and overall fluctuations in United States equity markets;6.Announcements of significant acquisitions, strategic partnerships, joint ventures or capital commitments by us or our competitors;7.Disputes or other developments relating to proprietary rights, including patents, litigation matters and our ability to obtain patent protection for ourtechnologies;8.Additions or departures of key management personnel;9.Issuances of debt or equity securities;10.Significant lawsuits, including patent or shareholder litigation;11.Changes in the market valuations of similar companies;12.Sales of additional ordinary shares or other securities by us or our shareholders in the future;13.Trading volume of our ordinary shares;14.Fluctuations in the exchange rate between the U.S. dollar and Renminbi;15.Negative market perception and media coverage of our company or other companies in the same or similar industry with us; and16.Other events or factors, many of which are beyond our control.15In addition, the stock market in general, and the NASDAQ Capital Market and software products and services companies in particular, have experiencedextreme price and volume fluctuations that have often been unrelated or disproportionate to the operating performance of these companies. Broad market andindustry factors may negatively affect the market price of our ordinary shares, regardless of our actual operating performance. Our ADSs and ordinary shares may be subject to the SEC’s penny stock rules which may make it difficult for brokerdealers to complete customer transactionsand trading activity in our securities.Our ADSs and ordinary shares may be deemed to be “penny stock” as that term is defined under the Securities Exchange Act of 1934, as amended. Pennystocks generally are equity securities with a price of less than $5.00 (other than securities registered on certain national securities exchanges or quoted on theNASDAQ system, provided that current price and volume information with respect to transactions in such securities is provided by the exchange or system). Pennystock rules impose additional sales practice requirements on brokerdealers who sell to persons other than established customers and “accredited investors.” Theterm “accredited investor” refers generally to institutions with assets in excess of $5,000,000 or individuals with a net worth in excess of $1,000,000 or annual incomeexceeding $200,000 or $300,000 jointly with their spouse in each of the prior two years.The penny stock rules require a brokerdealer, prior to a transaction in a penny stock not otherwise exempt from the rules, to deliver a standardized riskdisclosure document in a form prepared by the SEC, which provides information about penny stocks and the nature and level of risks in the penny stockmarket. Moreover, brokerdealers are required to determine whether an investment in a penny stock is a suitable investment for a prospective investor. A brokerdealer must receive a written agreement to the transaction from the investor setting forth the identity and quantity of the penny stock to be purchased. Theserequirements may make it more difficult for brokerdealers to effectuate customer transactions and trading activity in our securities. As a result, the market price ofour ADSs and ordinary shares may be depressed, and you may find it more difficult to sell our ADSs or ordinary shares.Sales of a substantial number of ordinary shares or ADSs in the public market by our existing shareholders could cause the price of our ADSs to fall.Sales of a substantial number of our ordinary shares or ADSs in the public market or the perception that these sales might occur, could depress the marketprice of our ADSs and could impair our ability to raise capital through the sale of additional equity securities. We are unable to predict the effect that sales may haveon the prevailing market price of our ADSs.All of our existing shareholders prior to our May 2010 offering were subject to lockup agreements with the underwriters of the offering that restricted theshareholders’ ability to transfer ordinary shares or ADSs until expiration of the lockup period in November 2010. The lockup agreements limited the number ofordinary shares or ADSs that may be sold immediately following the public offering. Subject to certain limitations, approximately 1,000,000 of our total outstandingshares are now eligible for sale. Sales of ordinary shares by these shareholders could have a material adverse effect on the trading price of our ADSs.Future sales and issuances of our ordinary shares, or rights to purchase our ordinary shares, including pursuant to our 2010 Omnibus Incentive Plan, couldresult in additional dilution of the percentage ownership of our shareholders and could cause the price of our ordinary shares to fall.We expect that significant additional capital will be needed in the future to continue our planned operations. To the extent we raise additional capital byissuing equity securities, our shareholders may experience substantial dilution. We may sell ordinary shares, convertible securities or other equity securities in oneor more transactions at prices and in a manner we determine from time to time. If we sell ordinary shares, convertible securities or other equity securities in more thanone transaction, investors may be materially diluted by subsequent sales. Such sales may also result in material dilution to our existing shareholders, and newinvestors could gain rights superior to our existing shareholders.16We do not intend to pay dividends on our ordinary shares, so any returns will be limited to the value of our ADSs and ordinary shares.We have never declared or paid any cash dividend on our ordinary shares. We currently anticipate that we will retain future earnings for the development,operation and expansion of our business and do not anticipate declaring or paying any cash dividends for the foreseeable future. Any return shareholders willtherefore be limited to the value of their ADSs or ordinary shares.As the rights of shareholders under British Virgin Islands law differ from those under U.S. law, you may have fewer protections as a shareholder.Our corporate affairs will be governed by our memorandum of association and articles of association, the BVI Business Companies Act, 2004, or the BVIAct, of the British Virgin Islands and the common law of the British Virgin Islands. The rights of shareholders to take legal action against our directors, actions byminority shareholders and the fiduciary responsibilities of our directors under British Virgin Islands law are to a large extent governed by the BVI Act and thecommon law of the British Virgin Islands. The common law of the British Virgin Islands is derived in part from comparatively limited judicial precedent in the BritishVirgin Islands as well as from English common law, which has persuasive, but not binding, authority on a court in the British Virgin Islands. The rights of ourshareholders and the fiduciary responsibilities of our directors under British Virgin Islands law are not as clearly established as they would be under statutes orjudicial precedents in some jurisdictions in the United States. In particular, the British Virgin Islands has a less developed body of securities laws as compared to theUnited States, and some states (such as Delaware) have more fully developed and judicially interpreted bodies of corporate law.As a result of all of the above, holders of our ADSs and ordinary shares may have more difficulty in protecting their interests through actions against ourmanagement, directors or major shareholders than they would as shareholders of a U.S. company.British Virgin Islands companies may not be able to initiate shareholder derivative actions, thereby depriving shareholders of the ability to protect theirinterests.British Virgin Islands companies may not have standing to initiate a shareholder derivative action in a federal court of the United States. The circumstancesin which any such action may be brought, and the procedures and defenses that may be available in respect to any such action, may result in the rights ofshareholders of a British Virgin Islands company being more limited than those of shareholders of a company organized in the United States. Accordingly,shareholders may have fewer alternatives available to them if they believe that corporate wrongdoing has occurred. The British Virgin Islands courts are alsounlikely to recognize or enforce against us judgments of courts in the United States based on certain liability provisions of U.S. securities law; and to imposeliabilities against us, in original actions brought in the British Virgin Islands, based on certain liability provisions of U.S. securities laws that are penal in nature.There is no statutory recognition in the British Virgin Islands of judgments obtained in the United States, although the courts of the British Virgin Islands willgenerally recognize and enforce the nonpenal judgment of a foreign court of competent jurisdiction without retrial on the merits.The laws of the British Virgin Islands provide little protection for minority shareholders, so minority shareholders will have little or no recourse if theshareholders are dissatisfied with the conduct of our affairs.Under the law of the British Virgin Islands, there is little statutory law for the protection of minority shareholders other than the provisions of the BVI Actdealing with shareholder remedies. The principal protection under statutory law is that shareholders may bring an action to enforce the constituent documents ofthe corporation, our memorandum of association and articles of association. Shareholders are entitled to have the affairs of the company conducted in accordancewith the general law and the memorandum of association and articles of association.17There are common law rights for the protection of shareholders that may be invoked, largely dependent on English company law, since the common law ofthe British Virgin Islands is limited. Under the general rule pursuant to English company law known as the rule in Foss v. Harbottle, a court will generally refuse tointerfere with the management of a company at the insistence of a minority of its shareholders who express dissatisfaction with the conduct of the company’s affairsby the majority or the board of directors. However, every shareholder is entitled to have the affairs of the company conducted properly according to law and thecompany’s constituent documents. As such, if those who control the company have persistently disregarded the requirements of company law or the provisions ofthe company’s memorandum of association and articles of association, then the courts will grant relief. Generally, the areas in which the courts will intervene are thefollowing: (1) an act complained of which is outside the scope of the authorized business or is illegal or not capable of ratification by the majority; (2) acts thatconstitute fraud on the minority where the wrongdoers control the company; (3) acts that infringe on the personal rights of the shareholders, such as the right tovote; and (4) where the company has not complied with provisions requiring approval of a majority of shareholders, which are more limited than the rights affordedminority shareholders under the laws of many states in the United States.Antitakeover provisions in our memorandum of association and articles of association and our right to issue preference shares could make a thirdpartyacquisition of us difficult.Some provisions of our memorandum of association and articles of association may discourage, delay or prevent a change in control of our company ormanagement that shareholders may consider favorable, including provisions that authorize our board of directors to issue preference shares in one or more seriesand to designate the price, rights, preferences, privileges and restrictions of such preference shares.If you hold our ADSs, you may not have the same voting rights as the holders of our ordinary shares and must act through the depositary to exercise your rights.Holders of our ADSs will not be able to exercise voting rights attaching to the shares evidenced by our ADSs on an individual basis. Holders of our ADSswill appoint the depositary or its nominee as their representative to exercise the voting rights attaching to the shares represented by the ADSs. You may not receivevoting materials in time to instruct the depositary to vote, and it is possible that you, or persons who hold their ADSs through brokers, dealers or other third parties,will not have the opportunity to exercise a right to vote. Upon our written request, the depositary will mail to you a shareholder meeting notice which contains,among other things, a statement as to the manner in which your voting instructions may be given, including an express indication that such instructions may begiven or deemed given to the depositary to give a discretionary proxy to a person designated by us if no instructions are received by the depositary from you on orbefore the response date established by the depositary. However, no voting instruction shall be deemed given and no such discretionary proxy shall be given withrespect to any matter as to which we inform the depositary that (i) we do not wish such proxy given, (ii) substantial opposition exists, or (iii) such matter materiallyand adversely affects the rights of shareholders. We will make all reasonable efforts to cause the depositary to extend voting rights to you in a timely manner, butyou may not receive the voting materials in time to ensure that you can instruct the depositary to vote your ADSs. Furthermore, the depositary and its agents willnot be responsible for any failure to carry out any instructions to vote, for the manner in which any vote is cast or for the effect of any such vote. As a result, youmay not be able to exercise your right to vote and you may lack recourse if your ADSs are not voted as you requested. In addition, in your capacity as an ADSholder, you will not be able to call a shareholders’ meeting.You may not be able to participate in rights offerings and may experience dilution of your holdings as a result.We may from time to time distribute rights to our shareholders, including rights to acquire our securities. However, we may not, and under the depositagreement for the ADSs, the depositary will not, offer those rights to ADS holders unless both the rights and the underlying securities to be distributed to ADSholders are registered under the Securities Act, or the distribution of them to ADS holders is exempted from registration under the Securities Act with respect to allholders of ADSs. We are under no obligation to file a registration statement with respect to any such rights or underlying securities or to endeavor to cause such aregistration statement to be declared effective. In addition, we may not be able to rely on an exemption from registration under the Securities Act to distribute suchrights and securities. Accordingly, holders of our ADSs may be unable to participate in our rights offerings and may experience dilution in their holdings as a result.You may be subject to limitations on transfer of your ADSs.Your ADSs are transferable on the books of the depositary. However, the depositary may close its transfer books at any time or from time to time when itdeems expedient in connection with the performance of its duties. In addition, the depositary may refuse to deliver, transfer or register transfers of ADSs generallywhen our books or the books of the depositary are closed, or at any time if we or the depositary deem it advisable to do so because of any requirement of law or ofany government or governmental body, or under any provision of the deposit agreement, or for any other reason.18We may be a passive foreign investment company, of PFIC, which could lead to additional taxes for U.S. holders of our ADSs or ordinary shares.We do not expect to be, for U.S. federal income tax purposes, a passive foreign investment company, or a PFIC, which is a foreign company for which, inany given taxable year, either at least 75% of its gross income is passive income, or investment income in general, or at least 50% of its assets produce or are held toproduce passive income, for the current taxable year, and we expect to operate in such a manner so as not to become a PFIC for any future taxable year. However,because the determination of PFIC status for any taxable year cannot be made until after the close of such year and requires extensive factual investigation,including ascertaining the fair market value of our assets on a quarterly basis and determining whether each item of gross income that we earn is passive income, wecannot assure you that we will not become a PFIC for the current taxable year or any future taxable year. If we are or become a PFIC, a U.S. holder of our ADSs orordinary shares could be subject to additional U.S. federal income taxes on gain recognized with respect to the ADSs or ordinary shares and on certain distributions,plus an interest charge on certain taxes treated as having been deferred under the PFIC rules. Noncorporate U.S. holders will not be eligible for reduced rates oftaxation on any dividends received from us if we are a PFIC in the taxable year in which such dividends are paid or in the preceding taxable year.If our ordinary shares are listed on the NASDAQ Capital Market and the trading price of our ordinary shares fails to comply with the continued listingrequirements of the NASDAQ Capital Market, we would face possible delisting, which would result in a limited public market for our ordinary shares andmake obtaining future debt or equity financing more difficult for us.Companies listed on NASDAQ are subject to delisting for, among other things, failure to maintain a minimum closing bid price of $1.00 per share for 30consecutive business days. On December 19, 2011, we received a letter from NASDAQ indicating that for the last 30 consecutive business days, the closing bidprice of our ADSs fell below the minimum $1.00 per share requirement pursuant to NASDAQ Listing Rule 5550(a)(2) for continued listing on the NASDAQ CapitalMarket. We regained compliance with the minimum bid price requirement for continued listing set forth in NASDAQ Listing Rule 5550(a)(2), as its ADS with itsunderlying ordinary share has achieved a closing bid price of $1.00 or greater for the 10 consecutive business days from November 6 to November 23, 2012 byimplementing a 1for10 combination, or reverse split of the ordinary shares effective November 6, 2012. When listed, we cannot be sure that the price of our ordinaryshares will comply with this requirement for continued listing on the NASDAQ Capital Market in the future. If we were not able to do so, our ordinary shares wouldbe subject to delisting and would likely trade on the overthecounter market. If our ordinary shares were to trade on the overthecounter market, selling ourordinary shares could be more difficult because smaller quantities of shares would likely be bought and sold, transactions could be delayed, and security analysts’coverage of us may be reduced. In addition, brokerdealers have certain regulatory burdens imposed upon them, which may discourage brokerdealers from effectingtransactions in our ordinary shares, further limiting the liquidity of our ordinary shares. As a result, the market price of our ordinary may be depressed, and you mayfind it more difficult to sell our ordinary shares. Such delisting from the NASDAQ Capital Market and continued or further declines in our share price could alsogreatly impair our ability to raise additional necessary capital through equity or debt financing.ITEM 4. INFORMATION ON THE COMPANY.A . HISTORY AND DEVELOPMENT OF THE COMPANY.OverviewWe are a holding company and conduct our operations through our whollyowned subsidiary named LK Technology Ltd., a British Virgin Islands limitedliability company (“LK Technology”), and its whollyowned subsidiaries, MMB Limited and Mobile Media (China) Limited and their respective subsidiaries, whichhold the rights to deploy WiFi systems on about 700 trains in China, including 290 trains in which WiFi systems have already been installed and are in operation. InMay 2010, we consummated an initial public offering of our American Depository Shares, or ADSs, for gross proceeds of $16 million, and our ADSs were listed onthe NASDAQ Capital Market under the ticker symbol “KONE”. Our ordinary shares are not currently listed on any trading market. Our American Depository Shares(“ADSs”) were voluntarily delisted from the NASDAQ Capital Market on September 19, 2018. We have applied to NASDAQ for the listing of our ordinary shares onthe NASDAQ Capital Market and received an approval for listing of Ordinary Shares on August 6, 2018, and as of the date of this transition report, that applicationand approval are currently under review.19On August 17, 2018, we consummated an asset exchange transaction, pursuant to which we exchanged all issued and outstanding capital stock in TopskyInfoTech Holdings Pte Ltd., the parent of Softech, for the issued and outstanding capital stock of LK Technology (the “Asset Exchange”). In connection with theAsset Exchange, we changed our name on August 20, 2018, and on September 20, 2018, issued to the shareholders of C Media Limited, the former parent of LKTechnology, (i) 185,412,599 of our ordinary shares, par value $0.01 per share and (ii) 1,000,000 of our preferred shares. Upon the consummation of the AssetExchange, we ceased our previous business operations and became a company focused on the provision of WiFi and mobile application products for long distancerail travelers in China.On August 25, 2018, LK Technology entered into a Stock Purchase Agreement (the “Agreement”) with the shareholders (“Shareholders”) of SuperengineHoldings Limited, a limited liability company organized under the laws of the British Virgin Islands (the “Superengine”), pursuant to which LK Technology acquiredall of the issued and outstanding capital stock of Superengine for an aggregate purchase price of US$60 million (the “Purchase Price”), which are paid by theissuance of our Ordinary Shares in an amount equal to the quotient of (x) the Purchase Price divided by (y) the average of the closing prices of the Ordinary Shareson the NASDAQ Capital Market over the 12 months period preceding July 31, 2018. We are a party to the Agreement in connection with the issuance of theOrdinary Shares and certain other limited purposes.Corporate InformationOur principal executive offices are located at LAB32, SOHO 3Q, No 9, Guanghua Road, Chaoyang District, Beijing, People’s Republic of China 100020. Ourwebsite is www.luokung.com. We routinely post important information on our website. The information contained on our website is not a part of this transitionreport.Our agent for service of process in the United States is Worldwide Stock Transfer, LLC, the current transfer agent of the Company, with a mailing address ofOne University Plaza, Suite 505, Hackensack, New Jersey 07601.B. BUSINESS OVERVIEW.We are a Chinabased provider of rail WiFi and mobile application products for long distance travelers in China. Our primary mobile application, theLuoKuang platform, consists of the LuoKuang mobile applications, a series of supporting software at the server end, and railWiFi hardware and equipment on thetrains that we serve. The LuoKuang platform incorporates technology covered by 22 patents and about 34 software copy rights, and serves as a content and servicedistribution platform that is tailored for particular travel stages featuring geographic location and social interaction. The content and services distributed byLuoKuang contain information, entertainment, travel, ecommerce, online to offline (“O2O”), advertisement and marketing features.LuoKuang mainly provides personalized and precise services to long distance travelers in two locations: on the train and at the destination. Based on thetravel environment, the core elements of our users’ needs include staving off boredom on trains and discovering and exploring new locations upon arrival. The mainservices contain entertainment services (videos and audio, digital readings, games specific and tailored to the travel stage) and social services (satisfying thedemand for value discovery of unfamiliar destinations through social interaction among strangers based on locations). As of December 31, 2017, the LuoKuangplatform featured about 38 million users.The setting services on the train focus on providing entertainment content for passengers to pass time during longdistance travel in closed environments.For example, we provide access to long video formats such as movies and TV shows, short videos, music, digital readings and games.20We use the most valuable WiFi location—the train WiFi setting—as the entrance of our LuoKuang platform and mobile applications. Passengers typicallyride trains for longdistance and interprovincial travel purposes. The long periods of monotonous journeys and the cost concerns for roaming traffic fees enable thecombination of entertainment content service needs and WiFi access needs. Our railWiFi becomes a valuable and sophisticated WiFi service in this setting—notjust WiFi connection service, but a provider of sophisticated services through a WiFi connection. In addition, the annual traffic of 800,000 passengers onboardeach train makes rail WiFi a huge entry point for mobile applications. We do not define ourselves as a train WiFi communication service operator but as a longdistance travel mobile service provider. We provide users with free WiFi access so that users are able to connect to the LuoKuang platform and thus access relatedentertainment services, services on the train and destination services. The rail WiFi is our access point to a significant pool of users and the entrance to acquiringadditional users.The setting services focus on providing targeted push services to users while travelling in unfamiliar cities. Information and service guidance are preciselypushed to appeal to the interests and tastes (eating, drinking, shopping, touring and culture) of individual users (cuisine specialties and local snacks, local events,viewing sights, culture, history, stories). The service guidance is generated, shared and distributed by individual users (travelers, local residents, local businesses)interacting with current locations and featuring users who generated contents from selfmedia and small and medium vertical contents providers).Based on the GIS (geoinformation system), Superengine is a provider of big spatialtemporal data, network graphic image technology and relevant service.Its super engine series includes computer graphic image engines and spatial database engines. Spatialtemporal cloud index is the core of the company’s spatialtemporal data engines. It is equivalent to the neural network of the big data and the Internet. It extends the value of its products and platform to its data serviceproviders. In cooperation, its service providers can be divided into three categories, namely, basic geographic data providers, industrial data providers andbehavioral data providers). Superengine’s industriesoriented spatialtemporal data engine was launched in 2016. The spatialtemporal GIS platform has been appliedin industries such as aerospace, power grid, surveying & mapping, agriculture, cultural relic preservation, water conservancy, public security, railway section, smartcities, and business location selection.Our primary sources of revenue are advertising and marketing promotion revenues.Our Industry — Mobile Internet IndustryOur products and services are engaged in the mobile internet industry. Our main services consist of entertainment services (videos, audio, digital readings,games that are tailormade for passengers on train) and other services including satisfying the demand for value discovery of unfamiliar destinations through socialinteractions among strangers based in such locations). The mobile internet industry in China is rapidly growing and is likely to be in a longterm growth trend.According to the Mobile Internet Blue Book of China Mobile Internet Report, in 2017 the market size of China mobile internet reached RMB 605 billion. Now China isin a leading position in terms of smartphone, mobile communication network and mobile application services. The pool of users is anticipated to keep expandingthrough the promotion and popularization of smartphones and the expansion of the mobile internet market.Video is the leading online entertainment format in China. According to the iResearch Report, over 80% of total time spent by users on online entertainmentin China in 2016 was internet video. Online entertainment, especially internet video, is attractive to Chinese users due to many favorable factors, including easyaccessibility, wide content selection, and innovative platforms with social features.For 2017, the transaction volume of China mobile ecommerce market reached to over RMB 4 trillion according to the China Mobile Ecommerce IndustryResearch Report from iResearch, representing an increase of 19.1%. For the next few years, China mobile online shopping will likely maintain steady growth. Thefocal point of competition in China mobile ecommerce market has shifted from infrastructure service providers to integrated and accurate services providers.Drawing in users with compelling content in diversified scenes has become a trend.21The revenue for China mobile gaming industry reached RMB 144.58 billion for the year of 2017, according to the China Mobile Game Industry ResearchReport from iResearch. With increased investment by largescale enterprises in the sector of mobile games and the strict enforcement of the mobile game industryrelated regulatory policy guidelines, the mobile game market as a whole will become more organized and standardized.According to the Annual Analysis of China Mobile Reading Industry from Analysis, for the year of 2017, the mobile reading market in China reached toRMB 14.04 billion. By the end of 2016, the size of China mobile's reading market reached RMB 11.86 billion, showing an increase of 18.38% in 2017.The closed and boring environment for passengers of longdistance travel and high roaming charges lead to a strong demand to use our rail WiFi services.Passengers, through their own mobile phone, have access to the free WiFi network in each carriage, access to our rich mobile internet entertainment content andtravel services. According to the annual statistical bulletin of China Railway Corporation in 2017, there were about 6,030 trains in operation in China in 2017,consisting of 2,935 high speed trains and 3,095 express trains. The rail WiFi system that we have installed are currently all on express trains. The market value will bemultiplied several times following the extended coverage of service on other trains.Our StrengthsWe believe the following strengths differentiate us from our competitors:Our strategy is to build up personalized and targeted service products for travelers through rail WiFi networks, enabling our services to evolve into a coredriving distribution platform that provides content, news, games, ecommerce, OTO service, travel services and advertising and marketing. In comparison, ourcompetitors offer simple forms of media services on trains. We focus on personalized and targeted matching between users on long distance trips and services. Ourcompetitors focus on operating and generating internet traffic.We possess a complete set of technology system including network, client end and service and operation platform. We have patent protections for WiFiequipment on trains. Our technology strengths are briefly summarized below.WiFi EquipmentPatent protected. Supports WiFi/3G/4G telecom modules; 4 core CPU with X86 architecture, and SSD hard disk with big storage for localcontents.InfrastructureThe technology infrastructures include the application program system, big data gathering and processing systems, intelligence cloudsservice deployment structure systems and our WiFi hardware server deployment structure system. The operation center, big data center,contents center and railWiFi server system are built on this infrastructure. On the above layer, the equipment management platform,account and payment platform, contents management platform and advertisement distribution platform are set up for daily managementpurpose.LuoKuang strengthens the connection of services among people, setting and locations. In catering to people on the move, we anticipate strengthening therelationship between users and their locations in a given moment. Currently, LuoKuang provides the link between users and thirdparty service providers andprovides value added services to both users and thirdparty service providers. The connection is not simply a traffic diversion, but also the direct presentation ofrelevant services in the LuoKuang platform. The open API interface and independent product software package allows easy access by service providers anddevelopers and supports data service, advertisement operations, billing, users promotion and product marketing services. As an API product, LuoKuang does notcreate content or services. The content and services are provided by our partners in the LuoKuang platform. Now, the majority of top mobile internet content andservices providers in China have a presence in the Luokuang platform. Those include, but are not limited to, Toutiao, Wangyi News, iqiyi, Letv, YoudianCinema(Hollywood films), Sohu video, Phoenix Video, Kugou Music, FM Qingting, iReader, Baidu Literature, Phoenix Novel, Baidu Game, Meituan, Dianping, andsimilar content providers.22Our StrategyLuoKuang is positioned to provide API interface services and geographic information social services. The API interface services are provided within thetypical BC model. LuoKuang pushes the content and services from thirdparty service providers to users. The local businesses, service practitioners, residents, andforeign travelers are all defined as a “user” and may participate in social interactions based on local value information and generate UGC content. The socalled localvalue information is defined as information, views, evaluations, experiences and experience sharing related to the local cultural scene, native products,entertainment, food, tourism and activities.The LuoKuang user growth strategy is to have access to users through the travelers’ use of mobile devices in connection with longdistance train travel.Through deploying WiFi systems on trains and providing free WiFi access to passengers, LuoKuang is able to have consistent access to longdistance travelers.The WiFi system on the train has become a powerful user portal at the early stage of LuoKuang and has gained substantial user traffic. We are in a leading positionin terms of numbers of trains contracted and trains in operation with our free WiFi system. We have contracted with about 700 trains, which cover almost 560 millionannual passenger trips. As of the date of this report, approximately 290 trains are operating our rail WiFi system. We will continue to install our rail WiFi system inthe following years.The development strategy for LuoKuang encompasses the following:1.Enhance our local cycle service (a recommendation service system based on the location of travelers after their arrival, recommendations includingtourist attractions, local specialties and other items of interest), strengthen services for arrivals in the form of social interaction and focus on the valueof relationships between users and their current locations.2.Focus on the development of geographic positioning technology. Get the business of local cycle and users on train mixed together. We will put oureffort to maximize the synergy effect.3.Big Data: Behavior data about passenger trips is obtained via the traffic entrance of rail WiFi and these data will help to optimize our product.4.While enhancing setting service experiences and optimizing entertainment experiences, we will enrich ecommerce services on trains featuringrecommendations of customized products and ecommerce shopping guidance of products labeled with specific geographic location (and trafficdiversion).5.Focus on API positioning and attract more premium vertical service providers (contents and services).Intellectual PropertyWe have registered the following software copyrights, patents and trademarks for our business operations. We believe this intellectual property forms anintegral part of our competitive strength.23Patents:We have been granted some inventions by the State Intellectual Property Office of PRC. We possess a complete set of technology system includingnetwork, client end and service and operation platform. We have patent protections for WiFi equipment on trains. We have received the following patents:No.Name of patentTypeRegistrationNumberDate of Insurance1.Wireless communication multimedia chip business consumer informationacquisition terminal deviceInventionZL 2010 2 0528767.9Sep 21, 20112.A user behavior processing method and device for intelligent terminalInventionZL 2013 1 0301728.3May 27, 20153.A global positioning system terminal deviceInventionZL 2010 2 0253452.8Nov 7, 20114.A wireless multimedia serverInventionZL 2013 2 0220183.9Nov 13, 20135.Ordering system of passengers on trainInventionZL 2015 2 0095381.6Aug 5, 20156.A wireless multimedia serverInventionZL 2015 2 0201382.4Oct 28, 20157.An antenna structureInventionZL 2016 2 0424352.4Mar 1, 20178.Spatial data progressive transmission method and deviceInvention201010617383.9Jun 15, 20169.Methods and devices for conflict detection and avoidance of spatial entity elementlabelingInvention201010617385.8Mar 26, 201410.Spatial data processing method and deviceInvention201010617399.XJun 26, 201311.Method and device of spatial data simplificationInvention201010617400.9Mar 13, 201312.Method and device for judging the occlusion type of space entityInvention201010617403.2Sep 25, 201313.A method and device for distributed mapping of 3d model dataInvention201110274924.7Mar 26, 201414.Data simplification of 3d model, gradual transmission method and deviceInvention201110275336.5Mar 25, 201515.Spatial data transmission method and deviceInvention201110306393.5Dec 13, 201416.Methods and devices for spatial data processing, simplification and progressivetransmissionInvention201210104250.0Jun 10, 201517.Spatial data progressive transmission method and deviceInvention201310367021.2Jun 23, 201718.Simplification method and device of spatial dataInvention201310367128.7Sep 22, 201719.The method and device to accelerate transmission and display of graphic dataacross platformsInvention201210116149.7Aug 10, 201620.Methods and devices related to spatial data compression, decompression andprogressive transmissionInvention201310136682.4Nov 10, 2017We also have two patents outside of China.No.Name of patentCountryNationalRegistrationNumberDate ofInsurance1.Spatial data processing method and deviceJapan2012547439Jun 20, 20142.Methods and devices related to spatial data compression, decompression andprogressive transmissionU.S.A14/394,610Sep 5, 201724Software Copyrights:We have received the following software copyrights from the National Copyright Administration (“NCA”) of PRC:No.Name of CopyrightAchievement approachRegistration numberTime of obtainExpire time1.WAP PUSH Business operation platformsystemIndependent research anddevelopment2007SRBJ1464Jul 23, 200750 years2.TDSCDMA Streaming media businessmanagement platform software V1.0Independent research anddevelopment2009SRBJ0412Jan 22, 200950 years3.Content management platform systemsoftware V1.0Independent research anddevelopment2009SRBJ1374Apr 1, 200950 years4.Mobile multimedia broadcast electronicservice guide system software V1.0Independent research anddevelopment2009SRBJ1365Apr 1, 200950 years5.Mobile video business operation platformsystem V1.0Independent research anddevelopment2007SRBJ1463Jul 23, 200750 years6.Mobile multimedia broadcast emergencybroadcast platform software V1.0Independent research anddevelopment2010SRBJ0720Mar 5, 201050 years7.Mobile multimedia broadcast audio richmedia interactive platform softwareV1.0Independent research anddevelopment2010SRBJ0719Mar 5, 201050 years8.Printer typesetting and printing softwareV1.0Independent research anddevelopment2011SRBJ4190Sep 28, 201150 years9.Electronic newspaper business supportplatform software V1.0Independent research anddevelopment2011SRBJ4186Sep 28, 201150 years10.Public information business platformsoftware V1.0Independent research anddevelopment2011SRBJ3810Sep 27, 201150 years11.User interface scripting software V1.0Independent research anddevelopment2011SRBJ3809Sep 27, 201150 years12.Integrated business management platformsoftware V1.0Independent research anddevelopment2012SR003002Jan 16, 201250 years13.Interactive business development platformsoftwareIndependent research anddevelopment2011SRBJ4593Nov 29, 201150 years14.Instant messaging and messaging systemsoftwareIndependent research anddevelopment2014SR122231Aug 5, 201450 years15.General statistical platform software forclient productsIndependent research anddevelopment2014SR216662Dec 30, 201450 years16.CMMB Data broadcast managementplatform softwareIndependent research anddevelopment2009SRBJ0391Jan 22, 200950 years17.Integrated passenger train service systemIndependent research anddevelopment2012SR083665Sep 5, 201250 years25No.Name of CopyrightAchievement approachRegistration numberTime of obtainExpire time18.JHBY Train inspection managementsystemIndependent research anddevelopment2013SR015105Feb 21, 201350 years19.Integrated information engine platformsoftware V1.0Independent research anddevelopment2014SR040347Nov 30, 200150 years20.Super information engine developmentplatform software V5.0Independent research anddevelopment2014SR036792Mar 5, 200350 years21.Core map super network informationengine platform software V1.0Independent research anddevelopment2014SR036772Sep 15, 200750 years22.Integrated management of the grid gissoftware V1.0Independent research anddevelopment2014SR036808Jun 20, 200850 years23.Core map rural power grid equipment GPSpatrol system software V1.0Independent research anddevelopment2014SR036810Dec 10, 200850 years24.Diagram grid patrol PDA system softwareV1.0Independent research anddevelopment2014SR036778Dec 12, 200850 years25.Core map geographic information enginedesktop platform software V1.0Independent research anddevelopment2014SR036614Jan 15, 200950 years26.Integrated management of the gridgeographic information Web systemsoftware V1.0Independent research anddevelopment2014SR036799Mar 10, 200950 years27.Core map railway power supply equipmentGPS patrol system software V1.0Independent research anddevelopment2014SR036783Mar 25, 201050 years28.Core map network 3 d map server softwareV1.0Independent research anddevelopment2014SR036788Feb 20, 201150 years29.Core map network 3d map clientsoftwareV1.0Independent research anddevelopment2014SR036637Feb 22, 201150 years30.Core map 3d map network publishingplatform software V1.0Independent research anddevelopment2014SR036633Mar 10, 201150 years31.Core map 3d map network release pluginsystem software V1.0Independent research anddevelopment2014SR036622Mar 15, 201150 years32.Core map network 3d map smartphoneplatform software V1.0Independent research anddevelopment2014SR036638Apr 28, 201150 years33.Core map network GIS Shared mobileplatform software V1.0Independent research anddevelopment2014SR036634Oct 31, 201150 years34.Core map network GIS sharing platformsoftware V1.0Independent research anddevelopment2014SR036639Dec 16, 201150 yearsTrademarks:We have registered the following trademarks with the Trademark Office, State Administration for Industry and Commerce in the PRC:NoTrademarkClassification NumberValid PeriodRegistration Number1Y图形382010.04.212020.04.2067460692Y图形412010.09.072020.09.0667460673YRADIO文字352010.07.212020.07.2067334374YRADIO文字382010.04.21.2020.04.2067334385YRADIO文字412010.09.072020.09.0667334396LookLook图形382009.04.072019.04.0646660517LookLook图形422008.12.212018.12.2046660508YTV文字352010.07.212020.07.2067335799YTV文字382010.05.282020.05.27673357810YTV文字412010.09.072020.09.06673358111YTV文字422010.09.072020.09.06673358012YOUTV文字352010.07.212020.07.20673344013YOUTV文字382010.05.282020.05.27673344114xfeng文字352012.03.282022.03.27922914526NoTrademarkClassification NumberValid PeriodRegistration Number15xfeng文字382012.03.282022.03.27922916016xfeng文字412012.03.282022.03.27922919017xfeng文字422012.03.282022.03.27922922118中传视讯文字+图形422008.12.212018.12.20466604719中传视讯文字422008.12.212018.12.20466604820中传视讯文字382008.12.212018.12.20466604921新蜂文字382011.08.212021.08.20853890722新蜂文字422012.01.282022.01.27853907823新蜂.潮文字382011.08.212021.08.20853910424新蜂.潮文字422012.01.282022.01.27853914125新影力412014.08.282024.08.271228864326小人图形352014.08.282024.08.271228798527小人图形382014.08.282024.08.271228858028小人图形412014.08.282024.08.271228862929小人图形422014.08.282024.08.271228843530中传文字382014.08.282024.08.271228826731中传图形382014.08.282024.08.271228828932中童文字412014.08.072024.08.061221408533中童在线文字412014.08.072024.08.061221409234翠鸟文字382014.08.072014.08.061221405835翠鸟文字422014.08.072014.08.061221412536爱翠鸟文字382014.08.072024.08.061221406637爱翠鸟文字412014.08.072024.08.061221409638爱翠鸟文字422014.08.072024.08.061221412639翠鸟图形352014.08.072024.08.061221404040翠鸟图形382014.08.072024.08.061221407441翠鸟图形412014.08.072024.08.061221410042翠鸟图形422014.08.072024.08.061221413143信号小喇叭图形+CMEDIA412015.03.212025.03.201248043944LookLook图形382015.11.142025.11.131153342845LookLook图形422014.06.212024.06.201153372046LookLook文字382014.07.142024.07.131153406747LookLook文字422014.04.142024.04.131153422748L图形352014.02.282024.02.271153500249L图形382014.02.282024.02.271153507350L图形412014.02.282024.02.271153518151L图形422014.02.282024.02.271153526252箩筐图形412016.06.142026.06.131658022853箩筐图形422016.06.142026.06.131658022754箩筐文字422016.09.282026.09.271658024955箩筐文字412016.06.142026.06.131658025056箩筐文字352016.09.212026.09.201658025257箩筐文字92016.06.142026.06.131658025327NoTrademarkClassification NumberValid PeriodRegistration Number58箩筐图形382016.06.142026.06.131658022959箩筐图形352016.06.142026.06.131658023060箩筐图形92016.06.142026.06.131658023161微时光文字422016.09.282026.09.271658024762传游录屏文字92016.06.142026.06.131678214463传游录屏文字352016.06.142026.06.131678214364传游录屏文字382016.06.142026.06.131678214265传游录屏文字412016.06.142026.06.131678214166传游录屏文字422016.06.142026.06.131678214067录游器文字92016.06.142026.06.131678213568录游器文字352016.06.142026.06.131678213669录游器文字382016.06.142026.06.131678213770录游器文字412016.06.142026.06.131678213871录游器文字422016.06.142026.06.131678213972畅联TV文字412016.01.212026.01.201579246773畅联TV文字382016.01.212026.01.201579246874SuperEngine92016.01.212026.01.20812572275SuperEngine422016.01.212026.01.20812572876超擎9/422016.01.212026.01.201647320577SUPERENGINE9/422016.01.212026.01.2016473185*See below for an explanation of each classification number used in the table above.Classification No. 9: data processing apparatus, couplers (data processing equipment), computer software (recorded), monitors (computer programs), smartcards (integrated circuit cards), electrodynamic apparatus for the remote control of signals, alarms, and electric installations for the remote control of industrialoperations.Classification No. 35: auctioneering, sales promotion for others, marketing analysis, marketing research, importexport agencies, advisory services forbusiness management, business management for franchise, personnel management consultancy, relocation services for businesses, and systemization ofinformation into computer databases.Classification No. 38: Include services that enable at least sensory communication between two people. Such services include that allow one person to talkto another, send messages from one person to another, Make verbal or visual contact between one person and the other. This classification especially include theservice for broadcasting radio or television programs. Except for radio advertising services and telemarketing services.Classification No. 41: instruction services, teaching, education information, tuition, arranging and conducting of colloquiums, publication of electronicbooks and journals online, amusements, and vocational guidance.Classification No. 42: technical research, studies (technical project), computer software design, updating of computer software, recovery of computer data,computer systems analysis, installation of computer software, computer antivirus protection, and research and development for others. 28Business Certificates and QualificationsWe have obtained all necessary regulatory certifications to conduct our business in the PRC, including without limitation, the following: SoftwareEnterprise Recognition Certificate, Computer Information System Integration Qualification Certificate, Construction Enterprise Qualification Certificate, and SecurityTechnology & Protection Enterprise Certificate. We have also been properly certified as a hightech enterprise and have met the ISO 9001:2000 qualificationmanagement system.Legal ProceedingsAlthough we may, from time to time, be involved in litigation and claims arising out of our operations in the normal course of business, we do not believethat we are a party to any litigation that will have a material adverse impact on our financial condition or results of operations. To our knowledge, other than asdescribed below there are no material legal proceedings threatened against us. From time to time, we may be subject to various claims and legal actions arising in theordinary course of business. Following the consummation of the AEA, we became successor in interest to the legal proceedings described below.Litigation with Shanghai Fusheng Weier Intelligent Control Technology Co., Ltd.On January 22, 2016, Zhong Chuan Rui You and Shanghai Fusheng Weier Intelligent Control Technology Co., Ltd. (“Fusheng Weier”) signed a contract forequipment of $1,652,842 (RMB10,800,000). Since Zhong Chuan Rui You did not make the payments of $1,126,381 (RMB7,360,000) on the due dates, Fusheng Weierfiled a lawsuit against Zhong Chuan Rui You in Shanghai Xuhui District People's Court on October 8, 2016. On March 9, 2017, Xuhui District People's Court issuedthe verdict requiring Zhong Chuan Rui You to pay the overdue debts. In August 2017, C Media Limited made the payment of $512,075 (RMB3,346,000). Theremaining balance has been accrued in accounts payable. The payment schedule for the remaining balance is being negotiated by the two parties. On February 5,2018, a hearing was held adding Zhong Chuan Shi Xun as a defendant. The Group plans to settle the remaining balance within one year.Lawsuit with Gansu Jinlun Culture Media Co., Ltd.On August 22, 2014, Zhong Chuan Rui You and Gansu Jinlun Culture Media Co., Ltd. (“Gansu Jinlun”) signed a “Lanzhou Railway Bureau AirconditionedTrain WiFi Network System Advertising Operation Rights Agreement” for advertising on 72 trains of $1,467,880 (RMB9,604,633). Due to the dispute on theproject implementation, Zhong Chuan Rui You did not pay the advertising fee. On August 23, 2017, Gansu Jinlun filed a lawsuit with Gansu Intermediate People'sCourt. On December 19, 2017, Gansu Intermediate People's Court issued a verdict, ruling that Zhong Chuan Rui You settle the overdue advertising fee. Since only 18out of 72 trains have been installed with Wifi network system, Zhong Chuan Rui You disputed and appealed to the verdict. The next court trial date has not yet beendetermined.C Media and Gansu Jinlun are negotiating a potential settlement to resume the contract. According to the legal counsel, it is probable that the settlementwill amount to approximately $459,000 (RMB3,000,000); therefore, this amount has been accrued in accounts payable as at December 31, 2017.Litigation with Shenzhen Hua Xun Fang Zhou Technology Co., Ltd.On June 16, 2015, Zhong Chuan Rui You signed a cooperation agreement with Shenzhen Hua Xun Fang Zhou Technology Co., Ltd. (“Shenzhen Hua Xun”)and Xuesong Song, a major shareholder of C Media Limited. Pursuant to this agreement, Zhong Chuan Rui You procures equipment from Shenzhen Hua Xun.Xuesong Song acts as a joint liability guarantor for the entire debts of Zhong Chuan Rui You under this agreement. As Zhong Chuan Rui You did not make thepayments on the due dates, Shenzhen Hua Xun filed a lawsuit with Shenzhen Baoan District People's Court on May 31, 2016. On November 1, 2016, Zhong ChuanRui You, Xuesong Song and Shenzhen Hua Xun reached a settlement in Shenzhen Baoan District People's Court to settle $1,735,389 (RMB11,355,000) in fourinstalments. On December 30, 2017, the debt was assigned to C Media Limited.29C. ORGANIZATIONAL STRUCTUREThe following diagram illustrates our corporate structure and the place of formation and affiliation of each of our subsidiaries and affiliates as of September30, 2018.30The following diagram illustrates our corporate structure and the place of formation and affiliation of each of our subsidiaries and affiliates as of December31, 2017.Contractual Arrangements with Beijing Zhong Chuan Shi Xun Technology Limited’s Subsidiaries and Their Respective ShareholdersTo comply with the PRC legal restrictions on foreign ownership of companies that operate mobile application services, our subsidiaries operate in suchrestricted service areas in the PRC through certain PRC domestic companies, whose equity interests are held by certain management members or founders of the LKTechnology Ltd. Part of the registered capital of these PRC domestic companies was funded by certain management members or founders of LK Technology Ltd. LKTechnology Ltd., through its subsidiary Zhong Chuan Tian Xia Information and Technology (Shenzhen) Limited (the “WFOE”), has entered into an exclusivebusiness cooperation agreement with Beijing Zhong Chuan Shi Xun Technology Limited (“Zhong Chuan Shi Xun” or the “VIE”) the PRC domestic company, whichentitle the WFOE to receive a majority of profit of Zhong Chuan Shi Xun. In addition, Zhong Chuan Tian Xia Information and Technology (Shenzhen) Limited hasentered into certain agreements with those management members or founders, including equity interest pledge agreement of the equity interests held by thosemanagement members or founders and exclusive option agreement to acquire the equity interests in these companies when permitted by the PRC laws, rules andregulations. Details of the typical VIE structure of our significant consolidated VIE, primarily domestic companies associated with the operations such as ZhongChuan Shi Xun and its subsidiaries of Zhong Chuan Rui You, Huoerguosi Luokuang and Jiu Zhou Shi Dai, are set forth below: Exclusive Business Cooperation AgreementThe VIE has entered into an exclusive business services agreement with the WFOE, pursuant to which the WFOE provides exclusive business services tothe VIE. In exchange, the VIE pays a service fee to the WFOE which amounts to be no less than the 80% of the VIE’s aftertax profit, resulting in a transfer ofsubstantially all of the profits from the VIE to the WFOE.Exclusive Option AgreementThe VIE equity holders have granted the WFOE exclusive call options to purchase their equity interest in the VIE at an exercise price equal to the minimumprice as permitted by applicable PRC laws. The WFOE may nominate another entity or individual to purchase the equity interest, if applicable, under the call options.Each call option is exercisable subject to the condition that applicable PRC laws, rules and regulations do not prohibit completion of the transfer of the equityinterest pursuant to the call option. The VIE agrees not to distribute any dividends to the VIE equity holders without the approval of WFOE.31Equity Interest Pledge AgreementPursuant to the equity pledge agreement, the VIE equity holders have pledged all of their interests in the equity of the VIE as a continuing first prioritysecurity interest in favor of the WFOE to secure the performance of obligations by the VIEs and/or the equity holders under the exclusive business cooperationagreement. The WFOE is entitled to exercise its right to dispose of the VIE equity holders’ pledged interests in the equity of the VIE and has priority in receivingpayment by the application of proceeds from the auction or sale of such pledged interests, in the event of any breach or default under the exclusive businesscooperation agreement, if applicable. These equity pledge agreement remain in force until all the obligations under the exclusive business cooperation agreementhave been fulfilled.The exclusive business cooperation agreement and equity interest pledge agreement described above also enable the Company to receive substantially allof the economic benefits from the VIE by typically entitling the WFOE to all dividends and other distributions declared by the VIE and to any distributions orproceeds from the disposal by the VIE equity holders of their equity interests in the VIE.D. PROPERTY AND EQUIPMENTWe lease offices located at Lab 30 & Lab 32, SOHO 3Q, No 9, Guanghua Road, Chaoyang District, Beijing, which covers a floor space of 600 square meters.These leases expire at different times throughout 2018 and are renewable upon negotiation.ITEM 4A. UNRESOLVED STAFF COMMENTSNone.ITEM 5. OPERATING AND FINANCIAL REVIEW AND PROSPECTSA . OPERATING RESULTS.The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our consolidatedfinancial statements and the notes to those financial statements appearing elsewhere in this report. This discussion and analysis contains forwardlookingstatements that involve significant risks and uncertainties. As a result of many factors, such as our anticipated growth strategy, our plans to recruit moreemployees, our plans to invest in research and development to enhance our product or service lines, our future business development, results of operations andfinancial condition, expected changes in our net revenues and certain cost or expense items, our ability to attract and retain customers, trends and competitionin the enterprise mobile software application market, and the factors set forth elsewhere in this report, our actual results may differ materially from thoseanticipated in these forwardlooking statements. In light of those risks and uncertainties, there can be no assurance that the forwardlooking statementscontained in this report will in fact occur. You should not place undue reliance on the forwardlooking statements contained in this report.The forwardlooking statements speak only as of the date on which they are made, and, except to the extent required by U.S. federal securities laws, weundertake no obligation to update any forwardlooking statement to reflect events or circumstances after the date on which the statement is made or to reflectthe occurrence of unanticipated events. Further, the information about our intentions contained in this report is a statement of our intention as of the date of thisreport and is based upon, among other things, the existing regulatory environment, industry conditions, market conditions and prices and our assumptions as ofsuch date. We may change our intentions, at any time and without notice, based upon any changes in such factors, in our assumptions or otherwise.32Unless the context otherwise requires, all references to (i) “PRC” and “China” are to the People’s Republic of China; (ii) “U.S. dollar,” “$” and “US$”are to United States dollars; and (iii) “RMB”, “Yuan” and Renminbi are to the currency of the PRC or China.OverviewLuokung Technology was incorporated on October 27, 2009 under the laws of the British Virgin Islands. We are a holding company and conduct ouroperations through LK Technology Ltd., a British Virgin Islands limited liability company (“LK Technology”) and its whollyowned subsidiaries, MMB Limited andMobile Media (China) Limited and their respective subsidiaries and a contractuallycontrolled entity in the PRC named Beijing Zhong Chuan Shi Xun Technology,which hold the rights to deploy WiFi systems on about 700 trains in China, including 290 trains in which WiFi systems have already been installed and are inoperation. In May 2010, we consummated an initial public offering of our American Depository Shares, or ADSs, for gross proceeds of $16 million, and our ADSswere listed on the NASDAQ Capital Market under the ticker symbol “KONE”. Our ordinary shares are not currently listed on any trading market. Our AmericanDepository Shares (“ADSs”) were voluntarily delisted from the NASDAQ Capital Market on September 19, 2018. We have applied to NASDAQ for the listing of ourordinary shares on the NASDAQ Capital Market and received an approval for listing of Ordinary Shares on August 6, 2018, and as of the date of this transitionreport, that application and approval are currently under review.On August 17, 2018, we consummated an asset exchange transaction, pursuant to which we exchanged all issued and outstanding capital stock in TopskyInfoTech Holdings Pte Ltd., the parent of Softech, for the issued and outstanding capital stock of LK Technology (the “Asset Exchange”). In connection with theAsset Exchange, we changed our name on August 20, 2018, and on September 20, 2018, completed the issuance to the shareholders of C Media Limited, the formerparent of LK Technology, of (i) 185,412,599 of our ordinary shares, par value $0.01 per share and (ii) 1,000,000 of our preferred shares. Upon the consummation of theAsset Exchange, we ceased our previous business operations and became a company focused on the provision of WiFi and mobile application products for longdistance travelers in China.On August 25, 2018, LK Technology entered into a Stock Purchase Agreement (the “Agreement”) with the shareholders (“Shareholders”) of SuperengineHoldings Limited, a limited liability company organized under the laws of the British Virgin Islands (the “Superengine”), pursuant to which LK Technology acquiredall of the issued and outstanding capital stock of Superengine for an aggregate purchase price of US$60 million (the “Purchase Price”), which are paid by theissuance of our Ordinary Shares in an amount equal to the quotient of (x) the Purchase Price divided by (y) the average of the closing prices of the Ordinary Shareson the NASDAQ Capital Market over the 12 months period preceding July 31, 2018. We are a party to the Agreement in connection with the issuance of theOrdinary Shares and certain other limited purposes.Results of operations for the fiscal year ended December 31, 2017 compared to the fiscal year ended December 31, 2016.RevenueWe provide displaybased online advertising services to customers by integrating text description, image and video, and displaying the advertisements in aprominent position of LuoKuang Application. We recognize revenue in accordance with ASC 605, over the contractual term based on the agreements andconfirmation letters signed by both parties, commencing on the date the customer’s advertisement is displayed on our platform.For the year ended December 31, 2017, we had revenue of $26,082,417, as compared to revenue of $5,233,145 for the year ended December 31, 2016, anincrease of $20,849,272, or 398.4%, which was primarily due to the increase of our advertising clients.Cost of revenueOur cost of revenue primarily consists of depreciation, labor cost, WiFi equipment installation fees, data charges, annual payments to local railway bureau,other overhead costs.33Cost of revenue for the year ended December 31, 2017 was $5,547,779, representing a decrease of $767,725 or 12.2% as compared to $6,315,504 for the yearended December 31, 2016. The decrease was primarily attributable to the decrease in labor cost as a result of our cost control and a decrease in the number ofmaintenance staff. Additionally, data charges decreased as train passengers prefer using their mobile data, leading to a decrease in 3G and 4G data.Selling and marketing expenseOur selling and marketing expense mainly include promotional and marketing expenses and compensation for our sales and marketing personnel.Selling expense totaled $23,908,733 for the year ended December 31, 2017, as compared to $6,209,804 for the year ended December 31, 2016, an increase of$17,698,929 or 285.0%. The increase was primarily attributable to the increase in promotional and marketing activities conducted by the Company.General and administrative expenseOur general and administrative expenses consist primarily of salaries and benefits for our general and administrative personnel, rent, fees and expenses forlegal, accounting and other professional servicesGeneral and administrative expense totaled $2,451,249 for the year ended December 31, 2017, as compared to $2,108,854 for the year ended December 31,2016, an increase of $342,395 or 16.2%.Research and development expenses.Research and development expenses primarily consist of salaries and benefits for research and development personnel.Research and development expenses totaled $1,046,198 for the year ended December 31, 2017, as compared to $2,882,202 for the year ended December 31,2016, a decrease of $1,836,004 or 63.7%. The decrease was primarily attributable to the Company reduced its expenses in research and development temporarily asour products are quite stable at present.Loss from operationsAs a result of the factors described above, for the year ended December 31, 2017, loss from operations amounted to $6,871,542, as compared to loss fromoperations of $12,283,219 for the year ended December 31, 2016, a decrease of $5,411,677, or 44.1%.Other income/expenseOther income/expense mainly include interest income from bank deposits, foreign currency transaction gain, and loss from investment.Net lossAs a result of the factors described above, our net loss was $6,810,454 for the year ended December 31, 2017, compared to net loss of $13,049,031 for theyear ended December 31, 2016, a decrease of $6,238,577 or 47.8%.Foreign currency translation adjustmentOur reporting currency is the U.S. dollar. The functional currency of our parent company and subsidiaries of Merchant Supreme and Prime Cheer is the U.S.dollar and the functional currency of the Company’s subsidiaries incorporated in China is the Chinese Renminbi (“RMB”). The financial statements of oursubsidiaries incorporated in China are translated to U.S. dollars using period end rates of exchange for assets and liabilities, and average rates of exchange (for theperiod) for revenue, costs, and expenses. Net gains and losses resulting from foreign exchange transactions are included in the consolidated statements ofoperations and comprehensive loss. As a result of foreign currency translations, which are a noncash adjustment, we reported a foreign currency translation gain of$90,671 for the year ended December 31, 2017, as compared to a foreign currency translation loss of $387,375 for the year ended December 31, 2016. This noncashgain had the effect of increasing/decreasing our reported comprehensive income/loss.34Comprehensive lossAs a result of our foreign currency translation adjustment, we had comprehensive loss for the year ended December 31, 2017 of $6,719,783, compared tocomprehensive loss of $12,661,656 for the year ended December 31, 2016.B. LIQUIDITY AND CAPITAL RESOURCESThe information contained in “Item 5. Operating and Financial Review and Prospects – A. Operating Results – Liquidity and Capital Resources” isincorporated herein by reference.C. RESEARCH AND DEVELOPMENT, PATENTS AND LICENSES, ETC.The discussions of our research and development activities were contained in “Item 4. Information about our Company – B. Business Overview –Research and Development” and “Item 5. Operating and Financial Review and Prospects – A. Operating Results – Operating Expenses – Research and DevelopmentExpenses” are incorporated herein by reference. In the years ended December 31, 2017 and 2016, we spent $1,046,198 and $2,882,202, respectively, on research anddevelopment activities.D. TREND INFORMATION.Industry and Market OutlookChina has awarded licenses to mobile phone companies to provide the superfast 4G network to customers. The licenses, which are designed to give mobilephone users faster access to services, were granted by the government to China Mobile, China Unicom Hong Kong and China Telecom. Since the grants, ChinaMobile has offered 4G to subscribers from December 18, 2013. China Unicom and China Telecom, the country's other two major carriers, also offer 4G wireless. Thenumber of China Mobile 4G customers has exceeded 900 million by the end of October in 2017. The move greatly bolstered business for telecom equipment makersand a range of other companies.Under China’s 12th FiveYear Plan, a key priority is for China to transition from “Made in China” to “Designed in China.” In order to achieve this goal, thegovernment plans to heavily invest in science and technology education and R&D so as to further develop China’s intellectual property rights system and support“NextGeneration IT” as a Strategic Emerging Industry (SEI). Additionally, China plans to upgrade the technological capabilities of private and public services,including “triple play” services (the convergence of telecom, broadcasting and Internet networks), ecommerce, and egovernment and statistics systems.Furthermore, the government plans to invest in R&D of the "Internet of things" and cloud computing, and develop digital and virtual technologies.E. OFFBALANCE SHEET ARRANGEMENTSWe have not entered into any financial guarantees or other commitments to guarantee the payment obligations of any third parties. We have not enteredinto any derivative contracts that are indexed to our shares and classified as shareholder’s equity, or that are not reflected in our consolidated financial statements.Furthermore, except for the mortgage referenced above, we do not have any retained or contingent interest in assets transferred to an unconsolidated entity thatserves as credit, liquidity or market risk support to such entity. We do not have any variable interest in any unconsolidated entity that provides financing, liquidity,market risk or credit support to us or engages in leasing, hedging or research and development services with us.35F. TABULAR DISCLOSURE OF CONTRACTUAL OBLIGATIONSAs of December 31, 2017, we did not have any contractual obligations required to be disclosed in this Item 5.F. ITEM 6. DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES.A. DIRECTORS AND SENIOR MANAGEMENT.Executive Officers and DirectorsThe following table sets forth the names and ages as of the date of this transition report of each of our executive officers and directors:NameAgePositionXuesong Song50Chief Executive Officer, Chairman and DirectorDongpu Zhang50PresidentJie Yu34Chief Financial OfficerKegang Peng46Vice President and DirectorChuang Tao51DirectorDennis Galgano (1)(2)69Director (Independent)Jin Shi (1)(2)49Director (Independent)Jiming Ha (1)(3)56Director (Independent)Zhihao Xu (3)42Director (Independent)(1)Member of the Audit Committee.(2)Member of the Compensation Committee.(3)Member of the Nominating and Corporate Governance Committee.Set forth below is biographical information concerning our executive officers and directors.Xuesong Song is a cofounder of C Media Limited and served as its chairman of the board of directors and chief executive officer from 2012 until theconsummation of the AEA. From February 2014 through April 2017, Mr. Song served as a director of Seven Stars Cloud Group, Inc. (NASDAQ: SSC) and fromJanuary 2013 through February 2015, Mr. Song served as a director of Pingtan Marine Enterprise Ltd. (NASDAQ: PME). From May 2006 through January 2009, Mr.Song served as the Chairman of the Board of ChinaGrowth North Acquisition Corporation, a special purpose acquisition company, which acquired UIB GroupLimited in January 2009, in which he remains a director. Mr. Song has been a principal of Chum Capital Group Limited since August 2001, a merchant banking firmthat invests in growth Chinese companies and advises them in financings, mergers & acquisitions and restructurings, and chief executive officer of Beijing ChumInvestment Co., Ltd. since December 2001. Mr. Song has been a director of Mobile Vision Communication Ltd. since July 2004. Mr. Song received a Master’s ofBusiness Administration degree from Oklahoma City/Tianjin Program.Dongpu Zhang was appointed as the President of the Company effective on August 25, 2018. Mr. Dongpu Zhang has served as the General Manager ofSuperEngine Graphics Software Technology Development (Suzhou) Co., Ltd. (“SuperEngine Suzou”) and the Chief Executive Officer of SuperEngine HoldingLimited since September 2016. From February, 2014 to August, 2016, Mr. Zhang served as vice president of Industrial Development Group under China Fortune LandDevelopment Co., Ltd. From March, 2009 to February, 2014, Mr. Zhang served as the vice president of Aerospace Science and Technology Holding Group Co., Ltd.Mr. Zhang receive his Master Degree of Computer Science from Harbin Institute of Technology in 1994 and his Bachelor Degree of information system fromChangsha Institute of technology in 1991.Jie Yu served as the chief financial officer of C Media Limited from January 2018 until the consummation of the asset exchange transactions. From June 2016to January 2018, Mr. Yu served as chief financial officer and secretary of the board of directors of MTI Environment Group Limited. Prior to joining MTI, Mr. Yuserved as the senior manager at DA HUA CPA from November 2012 to May 2016. Previously, Mr. Yu served as the manager at Crowe Horwath (Hong Kong) CPA.Mr. Yu holds a bachelor degree in accounting and finance from University of Auckland and postgraduate diploma in accounting from University of Auckland.36Kegang Peng served as the Vice Chairman of the board of directors C Media Limited from October 2014 to the consummation of the asset exchangetransactions, and is now a member of the Company’s board of directors. Previously, from 2012 to 2014, Mr. Peng was chairman of the board and founder of JiangsuSuqian Jinghaiboyuan Information and Technology Co., Ltd. Mr. Peng studied at Beijing University of Aeronautics and Astronautics majoring computer andapplication.20F 1 f20f2017_luokungtech.htm AMENDMENT NO. 1 TO FORM 20FUNITED STATESSECURITIES AND EXCHANGE COMMISSIONWASHINGTON, D.C. 20549FORM 20F☐ REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934OR☐ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934For the Fiscal year ended _____________OR☒ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934For the transition period from October 1, 2017 to December 31, 2017☐ SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934Date of event requiring this shell company report Commission file number: 00134738Luokung Technology Corp.(Exact name of Registrant as specified in its charter)Not applicable(Translation of Registrant’s name into English)British Virgin IslandsLAB 32, SOHO 3Q, No 9, Guanghua Road, Chaoyang District, BeijingPeople’s Republic of China, 100020(Jurisdiction of incorporation or organization)(Address of principal executive offices)Mr. Muqiao GengLAB32, SOHO 3Q, No 9, Guanghua Road, Chaoyang District, BeijingPeople’s Republic of China 100020Tel: (86) 1085866721(Name, telephone, Email and/or facsimile number and address of company contact person)Securities registered or to be registered pursuant to Section 12(b) of the Act:Title of each className of each exchange on which registeredOrdinary shares, par value $0.01 per shareNonePreferred shares, par value $0.01 per shareNoneSecurities registered or to be registered pursuant to Section 12(g) of the Act:none(Title of Class)Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act:none(Title of Class)Indicate the number of outstanding shares of each of the issuer’s classes of capital or common stock as of the close of the period covered by the transitionreport. 187,097,599 Ordinary Shares, including 186,383,224 Ordinary Shares represented by 714,375 American Depositary Shares, and 1,000,000 Preferred Sharesoutstanding as of September 20, 2018.Indicate by check mark if the registrant is a wellknown seasoned issuer, as defined in Rule 405 of the Securities Act. ☐ Yes ☒ NoIf this report is an annual or transition report, indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of theSecurities Exchange Act of 1934. ☐ Yes ☒ NoIndicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirementsfor the past 90 days. ☒ Yes ☐ NoIndicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File requiredto be submitted and posted pursuant to Rule 405 of Regulation ST (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that theregistrant was required to submit and post such files). ☒ Yes ☐ NoIndicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a nonaccelerated filer. See definition of “accelerated filer andlarge accelerated filer” in Rule 12b2 of the Exchange Act. (Check one):Large accelerated filer ☐ Accelerated filer ☐ Nonaccelerated filer ☒Indicate by check mark which basis of accounting the registrant has used to prepare the financial statements included in this filing.U.S. GAAP ☒International Financial Reporting Standards as issuedby the International Accounting Standards Board ☐Other ☐If “Other” has been checked in response to the previous question, indicate by check mark which financial statement item the registrant has elected tofollow. Item 17 ☐ Item 18 ☐If this is an transition report, indicate by check mark whether the registrant is a shell company (as defined in Rule 12b2 of the ExchangeAct). ☐ Yes ☒ NoExplanatory NoteLuokung Technology Corp. (the “Company”) is filing this transition report on Form 20F (“Transition Report”) in connection with the completion of theexchange of certain of its assets for substantially all of the assets of C Media Limited (“C Media”) pursuant to that Asset Exchange Agreement, dated January 25,2018 (the “Original AEA”), as supplemented by the Addendum to Asset Exchange Agreement, dated October 3, 2018 (the “Addendum” and together with theOriginal AEA, the “AEA”). Following the consummation of the AEA, on October 4, 2018, the Company changed its fiscal year end from September 30 to the fiscalyear end used by C Media, December 31. This Transition Report covers the threemonth period from Octorber 1, 2017 to December 31, 2017, and the fiscal yearsdescribed herein.In this transition report:●References to the “Company”, “we”, “our” and “us” are to Luokung Technology Corp. and its consolidated subsidiaries and variable interestentity, except as the context otherwise requires;●This transition report on Form 20F covers the threemonth period from October 1, 2017 through December 31, 2017 (the “Transition Period”) andreflects our financial results thereof. Prior to this transition report on Form 20F, our two most recent annual reports on Form 20F cover the fiscalyears ended September 30, 2017 and September 30, 2016, respectively, and reflect financial results for the respective twelvemonth periods fromOctober 1 to September 30. Unless otherwise noted, all references to years are to the calendar year from January 1 to December 31 and referencesto our fiscal year or years are to the fiscal year or years which, prior to the Transition Period, ended September 30, while from and after theTransition Period, ended December 31;●References to an “ADS” are to an American Depositary Share, each of which represents one of our Ordinary Shares with a par value of $.01 pershare.Special Note Regarding Forwardlooking StatementsThis transition report contains forwardlooking statements that involve risks and uncertainties. These statements involve known and unknown risks,uncertainties and other factors that may cause our actual results, performance or achievements to be materially different from those expressed or implied by theforwardlooking statements.You can identify these forwardlooking statements by words or phrases such as “may,” “will,” “expect,” “anticipate,” “aim,” “estimate,” “intend,” “plan,”“believe,” “likely to” or other similar expressions. We have based these forwardlooking statements largely on our current expectations and projections about futureevents and financial trends that we believe may affect our financial condition, results of operations, business strategy and financial needs. You should not placeundue reliance on these forwardlooking statements, which apply only as of the date of this transition report. These forwardlooking statements include:●our future business development, results of operations and financial condition;●expected changes in our net revenues and certain cost or expense items;●our ability to attract and retain customers; and●trends and competition in the enterprise mobile software application market.You should read this transition report thoroughly with the understanding that our actual future results may be materially different from, and/or worse, thanwhat we expect. We qualify all of our forwardlooking statements by these cautionary statements. Other sections of this transition report include additional factorswhich could adversely impact our business and financial performance. Moreover, we operate in an evolving environment. New risk factors and uncertainties emergefrom time to time and it is not possible for our management to predict all risk factors and uncertainties, nor can we assess the impact of all factors on our business orthe extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forwardlooking statements.This transition report also contains estimates, projections and statistical data related to the market for the provision of WiFi and mobile applications inChina. This market data, including data from IDC, a leading provider of market data and intelligence, speaks as of the date it was published and includes projectionsthat are based on a number of assumptions and are not representations of fact. The market for the provision of WiFi and mobile applications in China may not growat the rates projected by the market data, or at all. The failure of the market to grow at the projected rates may materially and adversely affect our business and themarket price of our ADSs. In addition, the rapidly changing nature of the market for the provision of WiFi and mobile applications subjects any projections orestimates relating to the growth prospects or future condition of our market to significant uncertainties. If any one or more of the assumptions underlying the marketdata proves to be incorrect, actual results may differ from the projections based on these assumptions.You should not rely upon forwardlooking statements as predictions of future events. We undertake no obligation to update or revise any forwardlookingstatements, whether as a result of new information, future events or otherwise.TABLE OF CONTENTSPart IItem 1.Identity of Directors, Senior Management and Advisers.1Item 2.Offer Statistics and Expected Timetable.1Item 3.Key Information.1A.Selected Financial Data.1B.Capitalization and Indebtedness.3C.Reasons for the Offer and Use of Proceeds.3D.Risk Factors.3Item 4.Information on the Company.19A.History and Development of the Company.19B.Business Overview.20C.Organizational Structure.30D.Property, Plants and Equipment.32Item 4A.Unresolved Staff Comments.32Item 5.Operating and Financial Review and Prospects.32A.Operating Results.32B.Liquidity and Capital Resources.35C.Research and Development, Patents and Licenses, etc.35D.Trend Information.35E.Offbalance Sheet Arrangements.35F.Tabular Disclosure of Contractual Obligations.36Item 6.Directors, Senior Management and Employees.36A.Directors and Senior Management.36B.Compensation.37C.Board Practices.40D.Employees.43E.Share Ownership.43Item 7.Major Shareholders and Related Party Transactions.44A.Major Shareholders.44B.Related Party Transactions.45C.Interests of Experts and Counsel.45Item 8.Financial Information.45A.Consolidated Statements and Other Financial Information.45B.Significant Changes.46Item 9.The Offer and Listing.46A.Offer and Listing Details.46B.Plan of Distribution.47C.Markets.47D.Selling shareholders.48E.Dilution.48F.Expenses of the issue.48Item 10.Additional Information.48A.Share Capital.48B.Memorandum and Articles of Association.48C.Material Contracts.53D.Exchange Controls.54E.Taxation.61F.Dividends and Paying Agents.67G.Statement by Experts.67H.Documents on Display.67I.Subsidiary Information.68Item 11.Quantitative and Qualitative Disclosures about Market Risk.68Item 12.Description of Securities Other than Equity Securities.69A.Debt Securities.69B.Warrants and Rights.69C.Other Securities.69D.American Depositary Shares.69iPart IIItem 13.Defaults, Dividend Arrearages and Delinquencies.71Item 14.Material Modifications to the Rights of Security Holders and Use of Proceeds.71Item 15.Controls and Procedures.71Item 16.[Reserved.]72Item 16A.Audit Committee Financial Expert.72Item 16B.Code of Ethics.73Item 16C.Principal Accountant Fees and Services.73Item 16D.Exemptions from the Listing Standards for Audit Committees.73Item 16E.Purchases of Equity Securities by the Issuer and Affiliated Purchasers.73Item 16F.Change in Registrant’s Certifying Accountant.73Item 16G.Corporate Governance.73Item 16H.Mine Safety Disclosure.73Part IIIItem 17.Financial Statements.74Item 18.Financial Statements.74Item 19.Exhibits.74Index to Consolidated Financial StatementsF1iiPART IITEM 1. IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS.The directors of Luokung Technology Corp. are Xuesong Song, Kegang Peng, Dennis Galgano, Jin Shi, Jiming Ha, Zhihao Xu and Chuang Tao. Thebusiness address for our directors is LAB 32, SOHO 3Q, No 9, Guanghua Road, Chaoyang District, Beijing, People’s Republic of China.Moore Stephens CPA Limited has served as our auditor since October 5, 2018, and is located at 801806 Silvercord Tower 1, 30 Canton road, Tsimshatsui,Kowloon, Hong Kong. BDO China Shun Lun Pan Certified Public Accountants LLP served as our auditors for the last three years, and are located at 4F, No. 61Nanjing Road, Shanghai, People’s Republic of China.Garvey Schubert Barer, P.C., serves as our legal counsel in the United States, and is located at Flour Mill Building, 1000 Potomac Street NW, Suite 200,Washington, D.C., 200073501.Conyers Dill & Pearlman serves as our legal counsel with regard to the laws of the British Virgin Islands, and is located at 29th Floor, One Exchange Square,8 Connaught Place, Central, Hong Kong.ITEM 2. OFFER STATISTICS AND EXPECTED TIMETABLE.Not applicable.ITEM 3. KEY INFORMATION.A. SELECTED FINANCIAL DATA.Luokung Technology Corp. and its consolidated subsidiaries (“Luokung Technology”, “we”, “us”, or “the Company”) consummated an asset exchangeagreement pursuant to which we exchanged our existing assets with those of C Media Limited (the “Asset Exchange”) on August 17, 2018, and we changed ourname from Kingtone Wirelessinfo Solution Holding Ltd. to our current name on August 20, 2018. On October 4, 2018, in connection with the consummation of the Asset Exchange, we changed our fiscal year end from September 30 to December 31.1The selected financial data for the fiscal years ended December 31 2017 and 2016 have been derived from our audited consolidated and combined financialstatements. The selected consolidated and combined financial data should be read in conjunction with our audited financial statements and the accompanying notesand “Item 5 – Operating and Financial Review and Prospects.” Our consolidated and combined financial statements are prepared and presented in accordance withUnited States generally accepted accounting principles, or U.S. GAAP. Our historical results do not necessarily indicate our results expected for any future periods.You should not view our historical results as an indicator of our future performance.LK TECHNOLOGY LTD. AND SUBSIDIARIESSELECTED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS(IN U.S. DOLLARS)For the years ended December 31,20172016Revenues$26,082,417$5,233,145Less: Cost of revenues5,547,7796,315,504Less: Operating expenses:Selling and marketing23,908,7336,209,804General and administrative2,451,2492,108,854Research and development1,046,1982,882,202Total operating expenses27,406,18011,200,860Loss from operations(6,871,542)(12,283,219)Other income (expense):Interest expense(26,611)(4,412)Foreign exchange gains(losses)350,679(298,257)Loss from investment(428,571)Other income (expense), net(262,980)(34,572)Total other income (expense), net61,088(765,812)Loss before income taxes(6,810,454)(13,049,031)Income taxesNet loss$(6,810,454)$(13,049,031)Other comprehensive income:Foreign currency translation adjustment90,671387,375Total comprehensive loss$(6,719,783)$(12,661,656)2LK TECHNOLOGY LTD. AND SUBSIDIARIESSELECTED CONSOLIDATED BALANCE SHEETS(IN U.S. DOLLARS)As of December 31,20172016Accounts receivable, net of allowance for doubtful accounts9,729,6251,865,836Amounts due from related parties11,760,692Property and equipment, net5,044,8727,771,027Goodwill7,239,9367,239,936TOTAL ASSETS37,582,85821,114,832Accounts payable8,784,5186,446,584Accrued liabilities and other payables12,962,91211,329,613Total liabilities25,311,11333,905,520Total Shareholder’s Equity (Deficit)12,271,745(12,790,688)TOTAL LIABILITIES AND SHAREHOLDER’S EQUITY (DEFICIT)37,582,85821,114,832B. CAPITALIZATION AND INDEBTEDNESS.Not applicable.C. REASONS FOR THE OFFER AND USE OF PROCEEDS.Not applicable.D. RISK FACTORS.An investment in our ADSs and ordinary shares involves a high degree of risk. You should carefully consider the risks and uncertainties described belowtogether with all other information contained in this transition report, including the matters discussed under “Special Note Regarding ForwardLooking Statements,”before you decide to invest in our ADSs or ordinary shares. You should pay particular attention to the fact that we are a holding company with substantialoperations in China and are subject to legal and regulatory environments that in many respects differ from those of the United States. If any of the following risks, orany other risks and uncertainties that are not presently foreseeable to us, actually occur, our business, financial condition, results of operations, liquidity and ourfuture growth prospects would be materially and adversely affected. You should also consider all other information contained in this transition report beforedeciding to invest in our ADSs or ordinary shares.Risks Related to Our Company and Our IndustryThe Company had incurred negative cash flows from operating activities and net losses as of December 31, 2017. These matters raise substantial doubt aboutthe Company’s ability to continue as a going concern.The Company’s consolidated financial statements are prepared using generally accepted accounting principles in the United States of America applicableto a going concern, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. As of and for the year endedDecember 31, 2017, the Company had incurred significant operating losses and working capital deficit. The ability of the Company to continue as a going concern isdependent on the Company obtaining adequate capital to fund operating losses until it becomes profitable. If the Company is unable to obtain adequate capital, itcould be forced to cease operations. The accompanying consolidated financial statements do not include any adjustments that might be necessary if the Companyis unable to continue as a going concern.3We may undertake acquisitions, investments, joint ventures or other strategic alliances, which could have a material adverse effect on our ability to manageour business. In addition, such undertakings may not be successful.Our strategy includes plans to grow both organically and through acquisitions, participation in joint ventures or other strategic alliances. Joint venturesand strategic alliances may expose us to new operational, regulatory and market risks, as well as risks associated with additional capital requirements. We may not beable, however, to identify suitable future acquisition candidates or alliance partners. Even if we identify suitable candidates or partners, we may be unable tocomplete an acquisition or alliance on terms commercially acceptable to us. If we fail to identify appropriate candidates or partners, or complete desired acquisitions,we may not be able to implement our strategies effectively or efficiently. In addition, our ability to successfully integrate acquired companies and their operations may be adversely affected by several factors. These factorsinclude:1.diversion of management’s attention;2.difficulties in retaining customers of the acquired companies;3.difficulties in retaining personnel of the acquired companies;4.entry into unfamiliar markets;5.unanticipated problems or legal liabilities; and6.tax and accounting issues.If we fail to integrate acquired companies efficiently, our earnings, revenue growth and business could be negatively affected.Due to intense competition for highlyskilled personnel, we may fail to attract and retain enough sufficiently trained employees to support our operations; ourability to bid for and obtain new projects may be negatively affected and our revenues could decline as a result.The IT industry relies on skilled employees, and our success depends to a significant extent on our ability to attract, hire, train and retain qualifiedemployees. There is significant competition in China for professionals with the skills necessary to develop the products and perform the services we offer to ourcustomers. Increased competition for these professionals, in the mobile application design area or otherwise, could have an adverse effect on us if we experiencesignificant increase in the attrition rate among employees with specialized skills, which could decrease our operating efficiency and productivity and could lead to adecline in demand for our services.In addition, our ability to serve existing customers and business partners and obtain new business will depend, in large part, on our ability to attract, trainand retain skilled personnel that enable us to keep pace with growing demands for wifi connectivity and mobile applications, evolving industry standards andchanging customer preferences. Our failure to attract, train and retain personnel with the qualifications necessary to fulfill the needs of our existing and futurecustomers or to assimilate new employees successfully could have a material adverse effect on our business, financial condition and results of operations. Ourfailure to retain our key personnel on business development or find suitable replacements of the key personnel upon their departure may lead to shrinking newimplementation projects, which could materially adversely affect our business.4Our business depends substantially on the continuing efforts of our senior executives and other key personnel, and our business may be severely disrupted if welose their services.Our future success heavily depends upon the continued services of our senior executives and other key employees, particularly since we recentlyappointed a new chairman. We are reliant on the services of Mr. Xuesong Song, our chairman, chief executive officer and member of our board of directors. If one ormore of our senior executives or key employees is unable or unwilling to continue in his or her present position, we may not be able to replace such employee easily,or at all, we may incur additional expenses to recruit, train and retain replacement personnel, our business may be severely disrupted, and our financial condition andresults of operations may be materially adversely affected.Our business could suffer if our executives and directors compete against us and our noncompetition agreements with them cannot be enforced.If any of our senior executives or key employees joins a competitor or forms a competing company, we may lose customers, knowhow and keyprofessionals and staff members to them. Also, if any of our business development managers who keep a close relationship with our customers and businesspartners joins a competitor or forms a competing company, we may lose customers, and our revenues may be materially adversely affected. Most of our executiveshave entered, or will soon enter, into employment agreements with us that contain or will contain noncompetition provisions. However, if any dispute arisesbetween our executive officers and us, such noncompetition provisions may not be enforceable, especially in China, where all of these executive officers and keyemployees reside, in light of the uncertainties with China’s legal system. See “Risk Factors — Risks Related to Doing Business in China — Uncertainties withrespect to the PRC legal system could adversely affect us.”Our computer networks may be vulnerable to security risks that could disrupt our services and adversely affect our results of operations.Our computer networks may be vulnerable to unauthorized access, computer hackers, computer viruses and other security problems caused byunauthorized access to, or improper use of, systems by third parties or employees. A hacker who circumvents security measures could misappropriate proprietaryinformation or cause interruptions or malfunctions in operations. Computer attacks or disruptions may jeopardize the security of information stored in andtransmitted through computer systems and mobile devices of our customers. Actual or perceived concerns that our systems may be vulnerable to such attacks ordisruptions may deter customers from using our services. As a result, we may be required to expend significant resources to protect against the threat of thesesecurity breaches or to alleviate problems caused by these breaches, which could adversely affect our results of operations.If we do not continually enhance our solutions and service offerings, we may have difficulty in retaining existing customers and attracting new customers.We believe that our future success will depend, to a significant extent, upon our ability to enhance our existing applications and platform, and to introducenew features to meet the preferences and requirements of our customers in a rapidly developing and evolving market. Unexpected technical, operational, distributionor other problems could delay or prevent the introduction of one or more of these products or services, or any products or services that we may plan to introduce inthe future. Our present or future products may not satisfy the evolving preferences and tastes of our customers, and these solutions and services may not achieveanticipated market acceptance or generate incremental revenue. If we are unable to anticipate or respond adequately to the need for service or productenhancements due to resource, technological or other constraints, our business, financial condition and results of operations could be materially and adverselyaffected.5If we are unable to develop competitive new products and service offerings our future results of operations could be adversely affected.Our future revenue stream depends to a large degree on our ability to utilize our technology in a way that will allow us to offer new types of mobileapplications and services to a broader customer base. We will be required to make investments in research and development in order to continually develop newsoftware applications and related service offerings, enhance our existing platform, mobile applications and related service offerings and achieve market acceptanceof our mobile applications and service offerings. We may incur problems in the future in innovating and introducing new mobile applications and service offerings.Our developmentstage mobile applications may not be successfully completed or, if developed, may not achieve significant customer acceptance. If we are unableto successfully define, develop and introduce competitive new mobile applications, and enhance existing mobile applications, our future results of operations wouldbe adversely affected. The timely availability of new applications and their acceptance by customers are important to our future success. A delay in the developmentof new applications could have a significant impact on its results of operations.Changes in technology could adversely affect our business by increasing our costs, reducing our profit margins and causing a decline in our competitiveness.China’s wireless telecom industry, in which we operate, is characterized by rapidly changing technology, evolving industry standards, frequentintroductions of new services and solutions and enhancements as well as changing customer demands. New solutions and new technologies often render existingsolutions and services obsolete, excessively costly or otherwise unmarketable. As a result, our success depends on our ability to adapt to the latest technologicalprogress, such as the 5G standard and technologies, and to develop or acquire and integrate new technologies into our platform, mobile applications and relatedservices. Advances in technology also require us to commit substantial resources to developing or acquiring and then deploying new technologies for use in ouroperations. We must continuously train personnel in new technologies and in how to integrate existing hardware and software systems with these newtechnologies. We may not be able to adapt quickly to new technologies or commit sufficient resources to compete successfully against existing or new competitorsin bringing to market solutions and services that incorporate these new technologies. We may incur problems in the future in innovating and introducing new mobileapplications and service offerings. Our development of new mobile applications and platform enhancements may not be successfully completed or, if developed,may not achieve significant customer acceptance. If we fail to adapt to changes in technologies and compete successfully against established or new competitors,our business, financial condition and results of operations could be adversely affected.Problems with the quality or performance of our hardware, software or other systems may cause delays in the introduction of new solutions or result in the lossof customers and revenues, which could have a material and adverse effect on our business, financial condition and results of operations.Our hardware and software systems are complex and may contain defects, errors or bugs when first introduced to the market or to a particular customer, oras new versions are released. Because we cannot test for all possible scenarios, our systems may contain errors that are not discovered until after they have beeninstalled or implemented, and we may not be able to timely correct these problems. These defects, errors or bugs could interrupt or delay the completion of projectsor sales to our customers. In addition, our reputation may be damaged and we may fail to acquire new projects from existing customers or new customers. Errors mayoccur when we provide systems integration and maintenance services. Even in cases where we have agreements with our customers that contain provisionsdesigned to limit our exposure to potential claims and liabilities arising from customer problems, these provisions may not effectively protect us against such claimsin all cases and in all jurisdictions. In addition, as a result of business and other considerations, we may undertake to compensate our customers for damages arisingfrom the use of our solutions, even if our liability is limited by these provisions. Moreover, claims and liabilities arising from customer problems could also result inadverse publicity and materially and adversely affect our business, results of operations and financial condition. We currently do not carry any product or serviceliability insurance and any imposition of liability on us may materially and adversely affect our business and increase our costs, resulting in reduced revenues andprofitability.Our products may contain undetected software defects, which could negatively affect our revenues.Our software products are complex and may contain undetected defects. Although we test our products, it is possible that errors may be found or occur inour new or existing products after we have commenced commercial shipment of those products. Defects, whether actual or perceived, could result in adversepublicity, loss of revenues, product returns, a delay in market acceptance of our products, loss of competitive position or claims against us by customers. Any suchproblems could be costly to remedy and could cause interruptions, delays, or cessation of our product sales, which could cause us to lose existing or prospectivecustomers and could negatively affect our results of operations.6We may be subject to infringement, misappropriation and indemnity claims in the future, which may cause us to incur significant expenses, pay substantialdamages and be prevented from providing our services or technologies.Our success depends, in part, on our ability to carry out our business without infringing the intellectual property rights of third parties. Patent andcopyright law covering softwarerelated technologies is evolving rapidly and is subject to a great deal of uncertainty. Our selfdeveloped or licensed technologies,processes or methods may be covered by thirdparty patents or copyrights, either now existing or to be issued in the future. Any potential litigation may cause us toincur significant expenses. Thirdparty claims, if successfully asserted against us may cause us to pay substantial damages, seek licenses from third parties, payongoing royalties, redesign our services or technologies, or prevent us from providing services or technologies subject to these claims. Even if we were to prevail,any litigation would likely be costly and timeconsuming and divert the attention of our management and key personnel from our business operations.Our failure to protect our intellectual property rights may undermine our competitive position, and subject us to costly litigation to protect our intellectualproperty rights.Any misappropriation of our technology or the development of competitive technology could seriously harm our business. We regard a substantial portionof our hardware and software systems as proprietary and rely on statutory copyright, trademark, patent, trade secret laws, customer license agreements, employeeand thirdparty nondisclosure agreements and other methods to protect our proprietary rights. Nevertheless, these resources afford only limited protection and theactions we take to protect our intellectual property rights may not be adequate. In particular, third parties may infringe or misappropriate our proprietarytechnologies or other intellectual property rights, which could have a material adverse effect on our business, financial condition and results of operations. Inaddition, intellectual property rights and confidentiality protection in China may not be as effective as in the United States, and policing unauthorized use ofproprietary technology can be difficult and expensive. Further, litigation may be necessary to enforce our intellectual property rights, protect our trade secrets ordetermine the validity and scope of the proprietary rights of others. The outcome of any such litigation may not be in our favor. Any such litigation may be costlyand may divert management attention, as well as our other resources, away from our business. An adverse determination in any such litigation will impair ourintellectual property rights and may harm our business, prospects and reputation. In addition, we have no insurance coverage against litigation costs and wouldhave to bear all litigation costs in excess of the amount recoverable from other parties. The occurrence of any of the foregoing could have a material adverse effecton our business, financial condition and results of operations. Our solutions incorporate a portion of, and work in conjunction with, thirdparty hardware and software solutions. If these thirdparty hardware or softwaresolutions are not available to us at reasonable costs, or at all, our results of operations could be adversely impacted.Although our hardware and software systems and mobile applications primarily rely on our own core technologies, some elements of our systemsincorporate a small portion of thirdparty hardware and software solutions. If any third party were to discontinue making their intellectual property available to us orour customers on a timely basis, or increase materially the cost of their licensing such intellectual property, or if our systems or applications failed to properlyfunction or interoperate with replacement intellectual property, we may need to incur costs in finding replacement thirdparty solutions and/or redesigning oursystems or applications to replace or function with or on replacement thirdparty proprietary technology. Replacement technology may not be available on termsacceptable to us or at all, and we may be unable to develop alternative solutions or redesign our systems or applications on a timely basis or at a reasonable cost. Ifany of these were to occur, our results of operations could be adversely impacted.7Our ability to sell our products is highly dependent on the quality of our service and support offerings, and our failure to offer high quality service could have amaterial adverse effect on our ability to market and sell our products.Our customers depend upon our customer service and support staff to resolve issues relating to our products. Highquality support services are critical forthe successful marketing and sale of our products. If we fail to provide highquality support on an ongoing basis, our customers may react negatively and we maybe materially and adversely affected in our ability to sell additional products to these customers. This could also damage our reputation and prospects with potentialcustomers. Our failure to maintain highquality support services could have a material and adverse effect on our business, results of operations and financialcondition.Weaknesses in our internal controls over financial reporting or disclosure controls and procedures may have a material adverse effect on our business, theprice of our ordinary shares, operating results and financial condition.We are required to establish and maintain appropriate internal controls over financial reporting and disclosure controls and procedures. Pursuant to Section404 of the SarbanesOxley Act of 2002 and the related rules adopted by the Securities and Exchange Commission, every public company is required to include amanagement report on its internal controls over financial reporting in its transition report, which contains management’s assessment of the effectiveness of thecompany’s internal controls over financial reporting. This requirement first applied to our annual report on Form 20F for the fiscal year ended on September 30,2011. In connection with our assessments of our disclosure controls and procedures and internal controls over financial reporting, management concluded that as ofSeptember 30, 2018, our disclosure controls and procedures and our internal controls over financial reporting were not effective due to lack of U.S. generallyaccepted accounting principles (“U.S. GAAP”) expertise in our current accounting team. Please refer to the discussion under Item 15, “Controls and Procedures” forfurther discussion of our material weakness as of December 31, 2017. Should we be unable to remediate the material weakness promptly and effectively, suchweakness could harm our operating results, result in a material misstatement of our financial statements, cause us to fail to meet our financial reporting obligations orprevent us from providing reliable and accurate financial reports or avoiding or detecting fraud. This, in turn, could result in a loss of investor confidence in theaccuracy and completeness of our financial reports, which could have an adverse effect on the trading price of our ordinary shares. Any litigation or otherproceeding or adverse publicity relating to the material weaknesses could have a material adverse effect on our business and operating results. We have very limited insurance coverage which could expose us to significant costs and business disruption.We do not maintain any insurance coverage for our leased properties. Should any natural catastrophes such as earthquakes, floods, typhoons or any actsof terrorism occur in Beijing, China, where our head office is located and most of our employees are based, or elsewhere in China, we might suffer not onlysignificant property damages, but also loss of revenues due to interruptions in our business operations, which could have a material adverse effect on our business,operating results or financial condition.The insurance industry in China is still at an early stage of development. Insurance companies in China offer limited business insurance products, and donot, to our knowledge, offer business liability insurance. As a result, we do not have any business liability insurance coverage for our operations. Moreover, whilebusiness disruption insurance is available, we have determined that the risks of disruption and cost of the insurance are such that we do not require it at this time.Any business disruption, litigation or natural disaster might result in substantial costs and diversion of resources, particularly if it affects our technology platformswhich we depend on for delivery of our software and services, and could have a material adverse effect on our financial condition and results of operations.We may be liable to our customers for damages caused by unauthorized disclosure of sensitive and confidential information, whether through our employees orotherwise.We are typically required to manage, utilize and store sensitive or confidential customer data in connection with the products and services we provide.Under the terms of our customer contracts, we are required to keep such information strictly confidential. We seek to implement specific measures to protectsensitive and confidential customer data. We require our employees to enter into nondisclosure agreements to limit such employees’ access to, and distribution of,our customers’ sensitive and confidential information and our own trade secrets. We can give no assurance that the steps taken by us in this regard will be adequateto protect our customers’ confidential information. If our customers’ proprietary rights are misappropriated by our employees, in violation of any applicableconfidentiality agreements or otherwise, our customers may consider us liable for that act and seek damages and compensation from us. However, we currently donot have any insurance coverage for mismanagement or misappropriation of such information by our employees. Any litigation with respect to unauthorizeddisclosure of sensitive and confidential information might result in substantial costs and diversion of resources and management attention.8We may face intellectual property infringement claims that could be timeconsuming and costly to defend. If we fail to defend ourselves against such claims, wemay lose significant intellectual property rights and may be unable to continue providing our existing products and services.It is critical that we use and develop our technology and products without infringing upon the intellectual property rights of third parties, includingpatents, copyrights, trade secrets and trademarks. Intellectual property litigation is expensive and timeconsuming and could divert management’s attention from ourbusiness. A successful infringement claim against us, whether with or without merit, could, among others things, require us to pay substantial damages, developnoninfringing technology, or rebrand our name or enter into royalty or license agreements that may not be available on acceptable terms, if at all, and cease making,licensing or using products that have infringed a third party’s intellectual property rights. Protracted litigation could also result in existing or potential customersdeferring or limiting their purchase or use of our products until resolution of such litigation, or could require us to indemnify our customers against infringementclaims in certain instances. Also, we may be unaware of intellectual property registrations or applications relating to our services that may give rise to potentialinfringement claims against us. Parties making infringement claims may be able to obtain an injunction to prevent us from delivering our services or usingtechnology containing the allegedly infringing intellectual property. Any intellectual property litigation could have a material adverse effect on our business, resultsof operations or financial condition. Seasonality and fluctuations in our customers’ spending cycle and other factors can cause our revenues and operating results to vary significantly from quarterto quarter and from year to year.Our revenues and operating results will vary significantly from quarter to quarter and from year to year due to a number of factors, many of which areoutside of our control. Our new lines of business acquired upon the consummation of the asset exchange transaction discussed below see higher customer use andactivity during the Chinese New Year holiday than other times during the year when rail travel is high, which lead to higher revenue during this period as morecustomers would like to place more advertising. Due to these and other factors, our operating results may fluctuate significantly from quarter to quarter and fromyear to year. These fluctuations are likely to continue in the future, and operating results for any period may not be indicative of our future performance in any futureperiod.Our corporate actions are substantially controlled by our principal shareholders, who can cause us to take actions in ways you may not agree with.Mr. Xuesong Song, our chairman, chief executive officer and a member of our board of directors, beneficially owns 19.31% of our outstanding ordinaryshares and 1,000,000 preferred shares, and each preferred share has the right to 399 votes at a meeting of the members of the Company. Our officers and directors asa group beneficially own an aggregate of approximately 33.69% of our outstanding ordinary shares. These shareholders, acting individually or as a group, couldexert control and substantial influence over matters such as electing directors, amending our constitutional documents, and approving acquisitions, mergers or otherbusiness combination transactions. This concentration of ownership and voting power may also discourage, delay or prevent a change in control of our company,which could deprive our shareholders of an opportunity to receive a premium for their shares as part of a sale of our company and might reduce the price of ourshares. Alternatively, our controlling shareholders may cause a merger, consolidation or change of control transaction even if it is opposed by our othershareholders, including those who purchase shares in this offering.9We depend on a small number of customers to derive a significant portion of our revenues. If we were to become dependent again upon a few customers, suchdependency could negatively impact our business, operating results and financial condition.We derived a material portion of our revenues from a small number of customers. In the years ended December 31, 2017 and 2016, our five largestcustomers accounted for 99.8% and 78.5% of our total sales, respectively, and our largest customer Guangdong Zhanshi Media Advertising Co., Ltd. accounted forapproximately 80.8% of our total sales during for the fiscal year ended December 31, 2017. As our customer base may change from yeartoyear, during such yearsthat the customer base is highly concentrated, the fluctuation of our sales to any of such major customers could have a material adverse effect on our business,operating results and financial condition. Moreover, our high customer base concentration may also adversely affect our ability to negotiate contract prices withthese customers, which may in turn materially and adversely affect our results of operations.Our historical outstanding accounts receivable have been relatively high. Inability to collect our accounts receivable on a timely basis, if at all, couldmaterially and adversely affect our financial condition, liquidity and results of operations.Historically, our outstanding accounts receivable have been relatively high. As of December 31, 2017 and 2016, our outstanding accounts receivable beforeimpairment were $10.4 million and $2.10 million, respectively. Although we conduct credit evaluations of our customers, we generally do not require collateral orother security from our customers. In addition, we have had a relatively high customer concentration. The outstanding accounts receivable balance for our largestcustomer was 45.3% and 38.5% of our total accounts receivable balance as of December 31, 2017 and 2016, respectively. As a result, an extended delay or default inpayment relating to a significant account would likely have a material and adverse effect on the aging schedule and turnover days of our accounts receivable. Ourinability to collect our accounts receivable on a timely basis, if at all, could materially and adversely affect our financial condition, liquidity and results of operations.Risks Related to Doing Business in ChinaAdverse changes in political and economic policies of the PRC government could have a material adverse effect on the overall economic growth of China,which could reduce the demand for our services and materially and adversely affect our competitive position.Substantially all of our business operations are conducted in China. Accordingly, our business, results of operations, financial condition and prospects aresubject to a significant degree to economic, political and legal developments in China. Although the Chinese economy is no longer a planned economy, the PRCgovernment continues to exercise significant control over China’s economic growth through direct allocation of resources, monetary and tax policies, and a host ofother government policies such as those that encourage or restrict investment in certain industries by foreign investors, control the exchange between RMB andforeign currencies, and regulate the growth of the general or specific market. These government involvements have been instrumental in China’s significant growthin the past 30 years. The reorganization of the telecommunications industry encouraged by the PRC government has directly affected our industry and our growthprospect. In response to the recent global and Chinese economic downturn, the PRC government has adopted policy measures aimed at stimulating the economicgrowth in China. If the PRC government’s current or future policies fail to help the Chinese economy achieve further growth or if any aspect of the PRCgovernment’s policies limits the growth of the telecommunications industry in China or our industry or otherwise negatively affects our business, our growth rate orstrategy, our results of operations could be adversely affected as a result. Our business benefits from certain government tax incentives. Expiration, reduction or discontinuation of, or changes to, these incentives will increase our taxburden and reduce our net income.Under the PRC Enterprise Income Tax Law passed in 2007 and the implementing rules, both of which became effective on January 1, 2008, or the New EITLaw, a unified enterprise income tax rate of 25% and unified tax deduction standard is applied equally to both domesticinvested enterprises and foreigninvestedenterprises, or FIEs. Enterprises established prior to March 16, 2007 eligible for preferential tax treatment in accordance with the then tax laws and administrativeregulations shall gradually become subject to the New EIT Law rate over a fiveyear transition period starting from the date of effectiveness of the New EIT Law.However, certain qualifying hightechnology enterprises may still benefit from a preferential tax rate of 15% if they own their core intellectual properties and they areenterprises in certain Statesupported hightech industries to be later specified by the government. As a result, if our PRC subsidiaries qualify as “hightechnologyenterprises,” they will continue to benefit from the preferential tax rate of 15%, subject to transitional rules implemented from January 1, 2008. Our subsidiary, BeijingZhong Chuan Shi Xun Technology Limited, is qualified as a “hightechnology enterprise” until the end of the November 2018, and therefore it had benefited fromthe preferential tax rate of 15%, subject to transitional rules implemented on January 1, 2008. Although we intend to apply for a renewal of this qualification, if BeijingZhong Chuan Shi Xun ceases to qualify as a “hightechnology enterprise”, or the tax authorities change their position on our preferential tax treatments in thefuture, our future tax liabilities may materially increase, which could materially and adversely affect our financial condition and results of operations.10If we were deemed a “resident enterprise” by PRC tax authorities, we could be subject to tax on our global income at the rate of 25% under the New EIT Lawand our nonPRC shareholders could be subject to certain PRC taxes.Under the New EIT Law and the implementing rules, both of which became effective January 1, 2008, an enterprise established outside of the PRC with “defacto management bodies” within the PRC may be considered a PRC “resident enterprise” and will be subject to the enterprise income tax at the rate of 25% on itsglobal income as well as PRC enterprise income tax reporting obligations. The implementing rules of the New EIT Law define “de facto management” as “substantialand overall management and control over the production and operations, personnel, accounting, and properties” of the enterprise. However, as of the date of thistransition report, no final interpretations on the implementation of the “resident enterprise” designation are available. Moreover, any such designation, when madeby PRC tax authorities, will be determined based on the facts and circumstances of individual cases. Therefore, if we were to be considered a “resident enterprise”by the PRC tax authorities, our global income would be taxable under the New EIT Law at the rate of 25% and, to the extent we were to generate a substantial amountof income outside of PRC in the future, we would be subject to additional taxes. In addition, the dividends we pay to our nonPRC enterprise shareholders and gainsderived by such shareholders or ADS or ordinary share holders from the transfer of our shares or ADSs may also be subject to PRC withholding tax at the rate up to10%, if such income were regarded as Chinasourced income.Our holding company structure may limit the payment of dividends.We have no direct business operations, other than our ownership of our subsidiaries. While we have no current intention of paying dividends, should wedecide in the future to do so, as a holding company, our ability to pay dividends and meet other obligations depends upon the receipt of dividends or otherpayments from our operating subsidiaries and other holdings and investments. Current PRC regulations permit our PRC subsidiaries to pay dividends to us only outof their accumulated profits, if any, determined in accordance with Chinese accounting standards and regulations. In addition, each of our subsidiaries in China isrequired to set aside at least 10% of its aftertax profits each year, if any, to fund a statutory reserve until such reserve reaches 50% of its registered capital. Thesereserves are not distributable as cash dividends. Furthermore, if our subsidiaries in China incur debt on their own behalf in the future, the instruments governing thedebt may restrict their ability to pay dividends or make other payments to us. As a result, there may be limitations on the ability of our PRC subsidiaries to paydividends or make other investments or acquisitions that could be beneficial to our business or otherwise fund and conduct our business.In addition, under the New EIT Law and the implementing rules that became effective on January 1, 2008, dividends generated from the business of our PRCsubsidiaries after January 1, 2008 and payable to us may be subject to a withholding tax rate of 10% if the PRC tax authorities subsequently determine that we are anonresident enterprise, unless there is a tax treaty with China that provides for a different withholding arrangement.Uncertainties with respect to the PRC legal system could adversely affect us.We conduct all of our business through our subsidiaries in China. Our operations in China are governed by PRC laws and regulations. Our PRCsubsidiaries are generally subject to laws and regulations applicable to foreign investments in China and, in particular, laws and regulations applicable to whollyforeignowned enterprises. The PRC legal system is based on statutes. Prior court decisions may be cited for reference but have limited precedential value.11Since 1979, PRC legislation and regulations have significantly enhanced the protections afforded to various forms of foreign investments in China.However, China has not developed a fully integrated legal system and recently enacted laws and regulations may not sufficiently cover all aspects of economicactivities in China. In particular, because these laws and regulations are relatively new, and because of the limited volume of published decisions and theirnonbinding nature, the interpretation and enforcement of these laws and regulations involve uncertainties. In addition, the PRC legal system is based in part ongovernment policies and internal rules (some of which are not published on a timely basis or at all) that may have a retroactive effect. As a result, we may not beaware of our violation of these policies and rules until some time after the violation. In addition, any litigation in China may be protracted and result in substantialcosts and diversion of resources and management attention.PRC regulation of loans and direct investment by offshore holding companies to PRC entities may delay or prevent us from using the proceeds of our May2010 public offering to make loans or additional capital contributions to our PRC operating subsidiaries, which could materially and adversely affect ourliquidity and our ability to fund and expand our business.In utilizing the proceeds of our May 2010 public offering as an offshore holding company of our PRC operating subsidiaries, we may make loans to our PRCsubsidiaries, or we may make additional capital contributions to our PRC subsidiaries. Any loans to our PRC subsidiaries are subject to PRC regulations. Forexample, loans by us to our subsidiaries in China, which are FIEs, to finance their activities cannot exceed statutory limits and must be registered with the StateAdministration of Foreign Exchange, or SAFE. On August 29, 2008, SAFE promulgated Circular 142, a notice regulating the conversion by a foreigninvestedcompany of foreign currency into RMB by restricting how the converted RMB may be used. The notice requires that RMB converted from the foreign currencydenominated capital of a foreigninvested company may only be used for purposes within the business scope approved by the applicable governmental authorityand may not be used for equity investments within the PRC unless specifically provided for otherwise. The foreign currencydenominated capital shall be verified byan accounting firm before converting into RMB. In addition, SAFE strengthened its oversight over the flow and use of RMB funds converted from the foreigncurrencydenominated capital of a foreigninvested company. To convert such capital into RMB, the foreigninvested company must report the use of such RMB tothe bank, and the RMB must be used to the reported purposes. According to Circular 142, change of the use of such RMB without approval is prohibited. Inaddition, such RMB may not be used to repay RMB loans if the proceeds of such loans have not yet been used. Violations of Circular 142 may result in severepenalties, including substantial fines as set forth in the Foreign Exchange Administration Rules.We may also decide to finance our subsidiaries by means of capital contributions. These capital contributions may need approval from the PRC Ministry ofCommerce, or MOFCOM, or its local counterpart. We may not be able to obtain these government approvals on a timely basis, if at all, with respect to future capitalcontributions by us to our PRC subsidiaries. If we fail to receive such approvals in such cases when approval is required, our ability to use the proceeds of our May2010 public offering and to capitalize our PRC operations may be negatively affected, which could adversely affect our liquidity and our ability to fund and expandour business.Governmental control of currency conversion may affect the value of your investment.The PRC government imposes controls on the convertibility of the RMB into foreign currencies and, in certain cases, the remittance of currency out ofChina. We receive substantially all of our revenues in RMB. Under our current corporate structure, our income is primarily derived from dividend payments from ourPRC subsidiaries. Shortages in the availability of foreign currency may restrict the ability of our PRC subsidiaries to remit sufficient foreign currency to paydividends or other payments to us, or otherwise satisfy their foreign currency denominated obligations. Under existing PRC foreign exchange regulations, paymentsof current account items, including profit distributions, interest payments and expenditures from traderelated transactions, can be made in foreign currencieswithout prior approval from SAFE by complying with certain procedural requirements. However, approval from appropriate government authorities is required whereRMB is to be converted into foreign currency and remitted out of China to pay capital expenses such as the repayment of loans denominated in foreign currencies.The PRC government may also at its discretion restrict access in the future to foreign currencies for current account transactions. If the foreign exchange controlsystem prevents us from obtaining sufficient foreign currency to satisfy our currency demands, we may not be able to pay dividends in foreign currencies to ourshareholders, including holders of our ADSs or ordinary shares.12Fluctuation in the value of the RMB may have a material adverse effect on the value of your investment.The value of the RMB against the U.S. dollar and other currencies may fluctuate and is affected by, among other things, changes in political and economicconditions. On July 21, 2005, the PRC government changed its decadeold policy of pegging the value of the RMB to the U.S. dollar. Under the new policy, the RMBis permitted to fluctuate within a narrow and managed band against a basket of certain foreign currencies. This change in policy has resulted in an approximate26.8% appreciation of the RMB against the U.S. dollar between July 21, 2005 and September 30, 2015. Provisions on Administration of Foreign Exchange, asamended in August 2008, further changed China’s exchange regime to a managed floating exchange rate regime based on market supply and demand. Since reachinga high against the U.S. dollar in July 2008, however, the RMB has traded within a narrow band against the U.S. dollar, remaining within 1% of its July 2008 high butnever exceeding it. As a consequence, the RMB has fluctuated sharply since July 2008 against other freelytraded currencies, in tandem with the U.S. dollar. InAugust 2015, the PRC Government devalued its currency by approximately 3%, representing the largest yuan depreciation for 20 years. Concerns remain thatChina’s slowing economy, and in particular its exports, will need a stimulus that can only come from further cuts in the exchange rate.It is difficult to predict how long the current situation may continue and when and how it may change again as the People’s Bank of China may regularlyintervene in the foreign exchange market to achieve economic policy goals. Substantially all of our revenues and costs are denominated in the RMB, and asignificant portion of our financial assets are also denominated in RMB. We principally rely on dividends and other distributions paid to us by our subsidiaries inChina. Any significant revaluation of the RMB may materially and adversely affect our cash flows, revenues, earnings and financial position, and the value of, andany dividends payable on, our ADSs or ordinary shares in U.S. dollars. Any fluctuations of the exchange rate between the RMB and the U.S. dollar could also resultin foreign currency translation losses for financial reporting purposes.PRC laws and regulations governing our businesses. If we are found to be in violation of such PRC laws and regulations, we could be subject to sanctions. Inaddition, changes in such PRC laws and regulations may materially and adversely affect our business.There are substantial uncertainties regarding the interpretation and application of PRC laws and regulations, including, but not limited to, the laws andregulations governing our business. These laws and regulations are relatively new and may be subject to change, and their official interpretation and enforcementmay involve substantial uncertainty. The effectiveness of newly enacted laws, regulations or amendments may be delayed, resulting in detrimental reliance byforeign investors. New laws and regulations that affect existing and proposed future businesses may also be applied retroactively.The PRC government has broad discretion in dealing with violations of laws and regulations, including levying fines, revoking business and other licensesand requiring actions necessary for compliance. In particular, licenses and permits issued or granted to us by relevant governmental bodies may be revoked at a latertime by higher regulatory bodies. We cannot predict the effect of the interpretation of existing or new PRC laws or regulations on our businesses. We cannot assureyou that our current ownership and operating structure would not be found in violation of any current or future PRC laws or regulations. As a result, we may besubject to sanctions, including fines, and could be required to restructure our operations or cease to provide certain services. In addition, any litigation in China maybe protracted and result in substantial costs and diversion of resources and management attention. Any of these or similar actions could significantly disrupt ourbusiness operations or restrict us from conducting a substantial portion of our business operations, which could materially and adversely affect our business,financial condition and results of operations.13If we were required to obtain the prior approval of the China Securities Regulatory Commission, or CSRC, of the listing and trading of our ADSs on theNASDAQ Capital Market, we may face regulatory actions or other sanctions from the CSRC or other PRC regulatory agencies.On August 8, 2006, six PRC regulatory agencies, including the Ministry of Commerce, the State Assets Supervision and Administration Commission, theState Administration for Taxation, the State Administration for Industry and Commerce, the CSRC and the SAFE, jointly issued the Regulations on Mergers andAcquisitions of Domestic Enterprises by Foreign Investors, which became effective on September 8, 2006 (the “New M&A Rules”). This regulation, among otherthings, includes provisions that purport to require that an offshore special purpose vehicle formed for the purposes of overseas listing of equity interests in PRCcompanies and controlled directly or indirectly by PRC companies or individuals obtain the approval of the CSRC prior to the listing and trading of such specialpurpose vehicle’s securities on an overseas stock exchange. On September 21, 2006, the CSRC published on its official website procedures regarding its approval ofoverseas listings by special purpose vehicles. The CSRC approval procedures require the filing of a number of documents with the CSRC and it would take severalmonths to complete the approval process, if practicable at all. The application of this new PRC regulation remains unclear with no consensus currently existingamong leading PRC law firms regarding the scope of the applicability of the CSRC approval requirement. Prior to our May 2010 initial public offering, our PRC counsel has advised us that, based on its understanding of the current PRC laws and regulations aswell as the procedures announced on September 21, 2006: (i) Softech was directly incorporated by Topsky as a foreign investment enterprise under PRC law;therefore, there was no acquisition of the equity of a “PRC domestic company” as defined under the New M&A Rules; and (ii) the contractual arrangementsbetween Kingtone Information and Softech were not clearly defined and considered as the transaction which shall be applied to the New M&A Rules. Therefore, wedid not seek prior CSRC approval for our initial public offering.However, if the CSRC required that we obtain its approval prior to the completion of our initial public offering and the listing of our ADSs on the NASDAQCapital Market, we may face regulatory actions or other sanctions from the CSRC or other PRC regulatory agencies. These regulatory agencies may impose fines andpenalties on our operations in the PRC, limit our operating privileges in the PRC, delay or restrict the repatriation of the proceeds from our initial public offering intothe PRC, or take other actions that could have a material adverse effect on our business, financial condition, results of operations, reputation and prospects, as wellas the trading price of our shares.Also, if the CSRC requires that we obtain its approval, we may be unable to obtain a waiver of the CSRC approval requirements if and when procedures areestablished to obtain such a waiver. Any uncertainties and/or negative publicity regarding this CSRC approval requirement could have a material adverse effect onthe trading price of our shares.PRC regulations relating to the establishment of offshore special purpose companies by PRC residents may subject our PRC resident shareholders to penaltiesand limit our ability to inject capital into our PRC subsidiaries, limit our PRC subsidiaries’ ability to distribute profits to us, or otherwise adversely affect us.On October 21, 2005, the SAFE issued the Notice on Issues Relating to the Administration of Foreign Exchange in Fundraising and Reverse InvestmentActivities of Domestic Residents Conducted via Offshore Special Purpose Companies, or Notice 75, which became effective as of November 1, 2005. According toNotice 75, prior registration with the local SAFE branch is required for PRC residents to establish or to control an offshore company for the purposes of financingsuch offshore company with assets or equity interests in an onshore enterprise located in the PRC, or an offshore special purpose company. An amendment toregistration or filing with the local SAFE branch by such PRC resident is also required for the injection of equity interests or assets of an onshore enterprise in theoffshore special purpose company or overseas funds raised by such offshore company, or any other material change involving a change in the capital of theoffshore special purpose company. Moreover, Notice 75 applies retroactively. As a result, PRC residents who have established or acquired control of offshorespecial purpose companies that have made onshore investments in the PRC in the past are required to have completed the relevant registration procedures with thelocal SAFE branch by March 31, 2006. To further clarify the implementation of Notice 75, the SAFE issued Circular 106 on May 29, 2007. Under Circular 106, PRCsubsidiaries of an offshore special purpose company are required to coordinate and supervise the filing of SAFE registrations by the offshore holding company’sshareholders or beneficial owners who are PRC residents in a timely manner.14Some of our current shareholders and/or beneficial owners may fall within the ambit of the SAFE notice and be required to register with the local SAFEbranch as required under the SAFE notice. If so required, and if such shareholders and/or beneficial owners fail to timely register their SAFE registrations pursuantto the SAFE notice, or if future shareholders and/or beneficial owners of our company who are PRC residents fail to comply with the registration procedures setforth in the SAFE notice, this may subject such shareholders, beneficial owners and/or our PRC subsidiaries to fines and legal sanctions and may also limit ourability to contribute additional capital into our PRC subsidiaries, limit our PRC subsidiaries’ ability to distribute dividends to our company, or otherwise adverselyaffect our business.Risks Associated with our ADSs and Ordinary SharesOur securities are not currently traded on any United States public markets and you may not be able to resell your securities for some time.There is currently no public market for our ordinary shares or American Depository Shares (“ADSs”) in the United States or in any other jurisdiction. OurADSs were voluntarily delisted from the NASDAQ Capital Market on September 19, 2018. We have applied to NASDAQ for the listing of our ordinary shares on theNASDAQ Capital Market and received an approval for listing of Ordinary Shares on August 6, 2018, and as of the date of this transition report, that application andapproval are currently under review. We cannot assume that our ordinary shares will be accepted for listing on the NASDAQ Capital Market, or if listed, that wewould continue to meet the applicable minimum listing requriements. You may not be able to sell your ordinary shares quickly or at all if we are unable to gain listingon a public market in the United States.The market price of our ADSs has historically been highly volatile, and you may not be able to resell our ordinary shares at or above your initial purchaseprice.There may be a limited public market for our ordinary shares and, as discussed above, our ADSs are no longer listed on any public market in the UnitedStates or any other jurisdiction. We cannot assure you that there will be an active trading market for our ordinary shares in the future. If our ordinary shares areaccepted for listing on a public market, you may not be able to sell your ordinary shares quickly or at the market price if trading in our ordinary shares is not active. The trading price of our ADSs and ordinary shares may be volatile. The price of our ADSs and ordinary shares could be subject to wide fluctuations inresponse to a variety of factors, including the following:1.Introduction of new products, services or technologies offered by us or our competitors;2.Failure to meet or exceed revenue and financial projections we provide to the public;3.Actual or anticipated variations in quarterly operating results;4.Failure to meet or exceed the estimates and projections of the investment community;5.General market conditions and overall fluctuations in United States equity markets;6.Announcements of significant acquisitions, strategic partnerships, joint ventures or capital commitments by us or our competitors;7.Disputes or other developments relating to proprietary rights, including patents, litigation matters and our ability to obtain patent protection for ourtechnologies;8.Additions or departures of key management personnel;9.Issuances of debt or equity securities;10.Significant lawsuits, including patent or shareholder litigation;11.Changes in the market valuations of similar companies;12.Sales of additional ordinary shares or other securities by us or our shareholders in the future;13.Trading volume of our ordinary shares;14.Fluctuations in the exchange rate between the U.S. dollar and Renminbi;15.Negative market perception and media coverage of our company or other companies in the same or similar industry with us; and16.Other events or factors, many of which are beyond our control.15In addition, the stock market in general, and the NASDAQ Capital Market and software products and services companies in particular, have experiencedextreme price and volume fluctuations that have often been unrelated or disproportionate to the operating performance of these companies. Broad market andindustry factors may negatively affect the market price of our ordinary shares, regardless of our actual operating performance. Our ADSs and ordinary shares may be subject to the SEC’s penny stock rules which may make it difficult for brokerdealers to complete customer transactionsand trading activity in our securities.Our ADSs and ordinary shares may be deemed to be “penny stock” as that term is defined under the Securities Exchange Act of 1934, as amended. Pennystocks generally are equity securities with a price of less than $5.00 (other than securities registered on certain national securities exchanges or quoted on theNASDAQ system, provided that current price and volume information with respect to transactions in such securities is provided by the exchange or system). Pennystock rules impose additional sales practice requirements on brokerdealers who sell to persons other than established customers and “accredited investors.” Theterm “accredited investor” refers generally to institutions with assets in excess of $5,000,000 or individuals with a net worth in excess of $1,000,000 or annual incomeexceeding $200,000 or $300,000 jointly with their spouse in each of the prior two years.The penny stock rules require a brokerdealer, prior to a transaction in a penny stock not otherwise exempt from the rules, to deliver a standardized riskdisclosure document in a form prepared by the SEC, which provides information about penny stocks and the nature and level of risks in the penny stockmarket. Moreover, brokerdealers are required to determine whether an investment in a penny stock is a suitable investment for a prospective investor. A brokerdealer must receive a written agreement to the transaction from the investor setting forth the identity and quantity of the penny stock to be purchased. Theserequirements may make it more difficult for brokerdealers to effectuate customer transactions and trading activity in our securities. As a result, the market price ofour ADSs and ordinary shares may be depressed, and you may find it more difficult to sell our ADSs or ordinary shares.Sales of a substantial number of ordinary shares or ADSs in the public market by our existing shareholders could cause the price of our ADSs to fall.Sales of a substantial number of our ordinary shares or ADSs in the public market or the perception that these sales might occur, could depress the marketprice of our ADSs and could impair our ability to raise capital through the sale of additional equity securities. We are unable to predict the effect that sales may haveon the prevailing market price of our ADSs.All of our existing shareholders prior to our May 2010 offering were subject to lockup agreements with the underwriters of the offering that restricted theshareholders’ ability to transfer ordinary shares or ADSs until expiration of the lockup period in November 2010. The lockup agreements limited the number ofordinary shares or ADSs that may be sold immediately following the public offering. Subject to certain limitations, approximately 1,000,000 of our total outstandingshares are now eligible for sale. Sales of ordinary shares by these shareholders could have a material adverse effect on the trading price of our ADSs.Future sales and issuances of our ordinary shares, or rights to purchase our ordinary shares, including pursuant to our 2010 Omnibus Incentive Plan, couldresult in additional dilution of the percentage ownership of our shareholders and could cause the price of our ordinary shares to fall.We expect that significant additional capital will be needed in the future to continue our planned operations. To the extent we raise additional capital byissuing equity securities, our shareholders may experience substantial dilution. We may sell ordinary shares, convertible securities or other equity securities in oneor more transactions at prices and in a manner we determine from time to time. If we sell ordinary shares, convertible securities or other equity securities in more thanone transaction, investors may be materially diluted by subsequent sales. Such sales may also result in material dilution to our existing shareholders, and newinvestors could gain rights superior to our existing shareholders.16We do not intend to pay dividends on our ordinary shares, so any returns will be limited to the value of our ADSs and ordinary shares.We have never declared or paid any cash dividend on our ordinary shares. We currently anticipate that we will retain future earnings for the development,operation and expansion of our business and do not anticipate declaring or paying any cash dividends for the foreseeable future. Any return shareholders willtherefore be limited to the value of their ADSs or ordinary shares.As the rights of shareholders under British Virgin Islands law differ from those under U.S. law, you may have fewer protections as a shareholder.Our corporate affairs will be governed by our memorandum of association and articles of association, the BVI Business Companies Act, 2004, or the BVIAct, of the British Virgin Islands and the common law of the British Virgin Islands. The rights of shareholders to take legal action against our directors, actions byminority shareholders and the fiduciary responsibilities of our directors under British Virgin Islands law are to a large extent governed by the BVI Act and thecommon law of the British Virgin Islands. The common law of the British Virgin Islands is derived in part from comparatively limited judicial precedent in the BritishVirgin Islands as well as from English common law, which has persuasive, but not binding, authority on a court in the British Virgin Islands. The rights of ourshareholders and the fiduciary responsibilities of our directors under British Virgin Islands law are not as clearly established as they would be under statutes orjudicial precedents in some jurisdictions in the United States. In particular, the British Virgin Islands has a less developed body of securities laws as compared to theUnited States, and some states (such as Delaware) have more fully developed and judicially interpreted bodies of corporate law.As a result of all of the above, holders of our ADSs and ordinary shares may have more difficulty in protecting their interests through actions against ourmanagement, directors or major shareholders than they would as shareholders of a U.S. company.British Virgin Islands companies may not be able to initiate shareholder derivative actions, thereby depriving shareholders of the ability to protect theirinterests.British Virgin Islands companies may not have standing to initiate a shareholder derivative action in a federal court of the United States. The circumstancesin which any such action may be brought, and the procedures and defenses that may be available in respect to any such action, may result in the rights ofshareholders of a British Virgin Islands company being more limited than those of shareholders of a company organized in the United States. Accordingly,shareholders may have fewer alternatives available to them if they believe that corporate wrongdoing has occurred. The British Virgin Islands courts are alsounlikely to recognize or enforce against us judgments of courts in the United States based on certain liability provisions of U.S. securities law; and to imposeliabilities against us, in original actions brought in the British Virgin Islands, based on certain liability provisions of U.S. securities laws that are penal in nature.There is no statutory recognition in the British Virgin Islands of judgments obtained in the United States, although the courts of the British Virgin Islands willgenerally recognize and enforce the nonpenal judgment of a foreign court of competent jurisdiction without retrial on the merits.The laws of the British Virgin Islands provide little protection for minority shareholders, so minority shareholders will have little or no recourse if theshareholders are dissatisfied with the conduct of our affairs.Under the law of the British Virgin Islands, there is little statutory law for the protection of minority shareholders other than the provisions of the BVI Actdealing with shareholder remedies. The principal protection under statutory law is that shareholders may bring an action to enforce the constituent documents ofthe corporation, our memorandum of association and articles of association. Shareholders are entitled to have the affairs of the company conducted in accordancewith the general law and the memorandum of association and articles of association.17There are common law rights for the protection of shareholders that may be invoked, largely dependent on English company law, since the common law ofthe British Virgin Islands is limited. Under the general rule pursuant to English company law known as the rule in Foss v. Harbottle, a court will generally refuse tointerfere with the management of a company at the insistence of a minority of its shareholders who express dissatisfaction with the conduct of the company’s affairsby the majority or the board of directors. However, every shareholder is entitled to have the affairs of the company conducted properly according to law and thecompany’s constituent documents. As such, if those who control the company have persistently disregarded the requirements of company law or the provisions ofthe company’s memorandum of association and articles of association, then the courts will grant relief. Generally, the areas in which the courts will intervene are thefollowing: (1) an act complained of which is outside the scope of the authorized business or is illegal or not capable of ratification by the majority; (2) acts thatconstitute fraud on the minority where the wrongdoers control the company; (3) acts that infringe on the personal rights of the shareholders, such as the right tovote; and (4) where the company has not complied with provisions requiring approval of a majority of shareholders, which are more limited than the rights affordedminority shareholders under the laws of many states in the United States.Antitakeover provisions in our memorandum of association and articles of association and our right to issue preference shares could make a thirdpartyacquisition of us difficult.Some provisions of our memorandum of association and articles of association may discourage, delay or prevent a change in control of our company ormanagement that shareholders may consider favorable, including provisions that authorize our board of directors to issue preference shares in one or more seriesand to designate the price, rights, preferences, privileges and restrictions of such preference shares.If you hold our ADSs, you may not have the same voting rights as the holders of our ordinary shares and must act through the depositary to exercise your rights.Holders of our ADSs will not be able to exercise voting rights attaching to the shares evidenced by our ADSs on an individual basis. Holders of our ADSswill appoint the depositary or its nominee as their representative to exercise the voting rights attaching to the shares represented by the ADSs. You may not receivevoting materials in time to instruct the depositary to vote, and it is possible that you, or persons who hold their ADSs through brokers, dealers or other third parties,will not have the opportunity to exercise a right to vote. Upon our written request, the depositary will mail to you a shareholder meeting notice which contains,among other things, a statement as to the manner in which your voting instructions may be given, including an express indication that such instructions may begiven or deemed given to the depositary to give a discretionary proxy to a person designated by us if no instructions are received by the depositary from you on orbefore the response date established by the depositary. However, no voting instruction shall be deemed given and no such discretionary proxy shall be given withrespect to any matter as to which we inform the depositary that (i) we do not wish such proxy given, (ii) substantial opposition exists, or (iii) such matter materiallyand adversely affects the rights of shareholders. We will make all reasonable efforts to cause the depositary to extend voting rights to you in a timely manner, butyou may not receive the voting materials in time to ensure that you can instruct the depositary to vote your ADSs. Furthermore, the depositary and its agents willnot be responsible for any failure to carry out any instructions to vote, for the manner in which any vote is cast or for the effect of any such vote. As a result, youmay not be able to exercise your right to vote and you may lack recourse if your ADSs are not voted as you requested. In addition, in your capacity as an ADSholder, you will not be able to call a shareholders’ meeting.You may not be able to participate in rights offerings and may experience dilution of your holdings as a result.We may from time to time distribute rights to our shareholders, including rights to acquire our securities. However, we may not, and under the depositagreement for the ADSs, the depositary will not, offer those rights to ADS holders unless both the rights and the underlying securities to be distributed to ADSholders are registered under the Securities Act, or the distribution of them to ADS holders is exempted from registration under the Securities Act with respect to allholders of ADSs. We are under no obligation to file a registration statement with respect to any such rights or underlying securities or to endeavor to cause such aregistration statement to be declared effective. In addition, we may not be able to rely on an exemption from registration under the Securities Act to distribute suchrights and securities. Accordingly, holders of our ADSs may be unable to participate in our rights offerings and may experience dilution in their holdings as a result.You may be subject to limitations on transfer of your ADSs.Your ADSs are transferable on the books of the depositary. However, the depositary may close its transfer books at any time or from time to time when itdeems expedient in connection with the performance of its duties. In addition, the depositary may refuse to deliver, transfer or register transfers of ADSs generallywhen our books or the books of the depositary are closed, or at any time if we or the depositary deem it advisable to do so because of any requirement of law or ofany government or governmental body, or under any provision of the deposit agreement, or for any other reason.18We may be a passive foreign investment company, of PFIC, which could lead to additional taxes for U.S. holders of our ADSs or ordinary shares.We do not expect to be, for U.S. federal income tax purposes, a passive foreign investment company, or a PFIC, which is a foreign company for which, inany given taxable year, either at least 75% of its gross income is passive income, or investment income in general, or at least 50% of its assets produce or are held toproduce passive income, for the current taxable year, and we expect to operate in such a manner so as not to become a PFIC for any future taxable year. However,because the determination of PFIC status for any taxable year cannot be made until after the close of such year and requires extensive factual investigation,including ascertaining the fair market value of our assets on a quarterly basis and determining whether each item of gross income that we earn is passive income, wecannot assure you that we will not become a PFIC for the current taxable year or any future taxable year. If we are or become a PFIC, a U.S. holder of our ADSs orordinary shares could be subject to additional U.S. federal income taxes on gain recognized with respect to the ADSs or ordinary shares and on certain distributions,plus an interest charge on certain taxes treated as having been deferred under the PFIC rules. Noncorporate U.S. holders will not be eligible for reduced rates oftaxation on any dividends received from us if we are a PFIC in the taxable year in which such dividends are paid or in the preceding taxable year.If our ordinary shares are listed on the NASDAQ Capital Market and the trading price of our ordinary shares fails to comply with the continued listingrequirements of the NASDAQ Capital Market, we would face possible delisting, which would result in a limited public market for our ordinary shares andmake obtaining future debt or equity financing more difficult for us.Companies listed on NASDAQ are subject to delisting for, among other things, failure to maintain a minimum closing bid price of $1.00 per share for 30consecutive business days. On December 19, 2011, we received a letter from NASDAQ indicating that for the last 30 consecutive business days, the closing bidprice of our ADSs fell below the minimum $1.00 per share requirement pursuant to NASDAQ Listing Rule 5550(a)(2) for continued listing on the NASDAQ CapitalMarket. We regained compliance with the minimum bid price requirement for continued listing set forth in NASDAQ Listing Rule 5550(a)(2), as its ADS with itsunderlying ordinary share has achieved a closing bid price of $1.00 or greater for the 10 consecutive business days from November 6 to November 23, 2012 byimplementing a 1for10 combination, or reverse split of the ordinary shares effective November 6, 2012. When listed, we cannot be sure that the price of our ordinaryshares will comply with this requirement for continued listing on the NASDAQ Capital Market in the future. If we were not able to do so, our ordinary shares wouldbe subject to delisting and would likely trade on the overthecounter market. If our ordinary shares were to trade on the overthecounter market, selling ourordinary shares could be more difficult because smaller quantities of shares would likely be bought and sold, transactions could be delayed, and security analysts’coverage of us may be reduced. In addition, brokerdealers have certain regulatory burdens imposed upon them, which may discourage brokerdealers from effectingtransactions in our ordinary shares, further limiting the liquidity of our ordinary shares. As a result, the market price of our ordinary may be depressed, and you mayfind it more difficult to sell our ordinary shares. Such delisting from the NASDAQ Capital Market and continued or further declines in our share price could alsogreatly impair our ability to raise additional necessary capital through equity or debt financing.ITEM 4. INFORMATION ON THE COMPANY.A . HISTORY AND DEVELOPMENT OF THE COMPANY.OverviewWe are a holding company and conduct our operations through our whollyowned subsidiary named LK Technology Ltd., a British Virgin Islands limitedliability company (“LK Technology”), and its whollyowned subsidiaries, MMB Limited and Mobile Media (China) Limited and their respective subsidiaries, whichhold the rights to deploy WiFi systems on about 700 trains in China, including 290 trains in which WiFi systems have already been installed and are in operation. InMay 2010, we consummated an initial public offering of our American Depository Shares, or ADSs, for gross proceeds of $16 million, and our ADSs were listed onthe NASDAQ Capital Market under the ticker symbol “KONE”. Our ordinary shares are not currently listed on any trading market. Our American Depository Shares(“ADSs”) were voluntarily delisted from the NASDAQ Capital Market on September 19, 2018. We have applied to NASDAQ for the listing of our ordinary shares onthe NASDAQ Capital Market and received an approval for listing of Ordinary Shares on August 6, 2018, and as of the date of this transition report, that applicationand approval are currently under review.19On August 17, 2018, we consummated an asset exchange transaction, pursuant to which we exchanged all issued and outstanding capital stock in TopskyInfoTech Holdings Pte Ltd., the parent of Softech, for the issued and outstanding capital stock of LK Technology (the “Asset Exchange”). In connection with theAsset Exchange, we changed our name on August 20, 2018, and on September 20, 2018, issued to the shareholders of C Media Limited, the former parent of LKTechnology, (i) 185,412,599 of our ordinary shares, par value $0.01 per share and (ii) 1,000,000 of our preferred shares. Upon the consummation of the AssetExchange, we ceased our previous business operations and became a company focused on the provision of WiFi and mobile application products for long distancerail travelers in China.On August 25, 2018, LK Technology entered into a Stock Purchase Agreement (the “Agreement”) with the shareholders (“Shareholders”) of SuperengineHoldings Limited, a limited liability company organized under the laws of the British Virgin Islands (the “Superengine”), pursuant to which LK Technology acquiredall of the issued and outstanding capital stock of Superengine for an aggregate purchase price of US$60 million (the “Purchase Price”), which are paid by theissuance of our Ordinary Shares in an amount equal to the quotient of (x) the Purchase Price divided by (y) the average of the closing prices of the Ordinary Shareson the NASDAQ Capital Market over the 12 months period preceding July 31, 2018. We are a party to the Agreement in connection with the issuance of theOrdinary Shares and certain other limited purposes.Corporate InformationOur principal executive offices are located at LAB32, SOHO 3Q, No 9, Guanghua Road, Chaoyang District, Beijing, People’s Republic of China 100020. Ourwebsite is www.luokung.com. We routinely post important information on our website. The information contained on our website is not a part of this transitionreport.Our agent for service of process in the United States is Worldwide Stock Transfer, LLC, the current transfer agent of the Company, with a mailing address ofOne University Plaza, Suite 505, Hackensack, New Jersey 07601.B. BUSINESS OVERVIEW.We are a Chinabased provider of rail WiFi and mobile application products for long distance travelers in China. Our primary mobile application, theLuoKuang platform, consists of the LuoKuang mobile applications, a series of supporting software at the server end, and railWiFi hardware and equipment on thetrains that we serve. The LuoKuang platform incorporates technology covered by 22 patents and about 34 software copy rights, and serves as a content and servicedistribution platform that is tailored for particular travel stages featuring geographic location and social interaction. The content and services distributed byLuoKuang contain information, entertainment, travel, ecommerce, online to offline (“O2O”), advertisement and marketing features.LuoKuang mainly provides personalized and precise services to long distance travelers in two locations: on the train and at the destination. Based on thetravel environment, the core elements of our users’ needs include staving off boredom on trains and discovering and exploring new locations upon arrival. The mainservices contain entertainment services (videos and audio, digital readings, games specific and tailored to the travel stage) and social services (satisfying thedemand for value discovery of unfamiliar destinations through social interaction among strangers based on locations). As of December 31, 2017, the LuoKuangplatform featured about 38 million users.The setting services on the train focus on providing entertainment content for passengers to pass time during longdistance travel in closed environments.For example, we provide access to long video formats such as movies and TV shows, short videos, music, digital readings and games.20We use the most valuable WiFi location—the train WiFi setting—as the entrance of our LuoKuang platform and mobile applications. Passengers typicallyride trains for longdistance and interprovincial travel purposes. The long periods of monotonous journeys and the cost concerns for roaming traffic fees enable thecombination of entertainment content service needs and WiFi access needs. Our railWiFi becomes a valuable and sophisticated WiFi service in this setting—notjust WiFi connection service, but a provider of sophisticated services through a WiFi connection. In addition, the annual traffic of 800,000 passengers onboardeach train makes rail WiFi a huge entry point for mobile applications. We do not define ourselves as a train WiFi communication service operator but as a longdistance travel mobile service provider. We provide users with free WiFi access so that users are able to connect to the LuoKuang platform and thus access relatedentertainment services, services on the train and destination services. The rail WiFi is our access point to a significant pool of users and the entrance to acquiringadditional users.The setting services focus on providing targeted push services to users while travelling in unfamiliar cities. Information and service guidance are preciselypushed to appeal to the interests and tastes (eating, drinking, shopping, touring and culture) of individual users (cuisine specialties and local snacks, local events,viewing sights, culture, history, stories). The service guidance is generated, shared and distributed by individual users (travelers, local residents, local businesses)interacting with current locations and featuring users who generated contents from selfmedia and small and medium vertical contents providers).Based on the GIS (geoinformation system), Superengine is a provider of big spatialtemporal data, network graphic image technology and relevant service.Its super engine series includes computer graphic image engines and spatial database engines. Spatialtemporal cloud index is the core of the company’s spatialtemporal data engines. It is equivalent to the neural network of the big data and the Internet. It extends the value of its products and platform to its data serviceproviders. In cooperation, its service providers can be divided into three categories, namely, basic geographic data providers, industrial data providers andbehavioral data providers). Superengine’s industriesoriented spatialtemporal data engine was launched in 2016. The spatialtemporal GIS platform has been appliedin industries such as aerospace, power grid, surveying & mapping, agriculture, cultural relic preservation, water conservancy, public security, railway section, smartcities, and business location selection.Our primary sources of revenue are advertising and marketing promotion revenues.Our Industry — Mobile Internet IndustryOur products and services are engaged in the mobile internet industry. Our main services consist of entertainment services (videos, audio, digital readings,games that are tailormade for passengers on train) and other services including satisfying the demand for value discovery of unfamiliar destinations through socialinteractions among strangers based in such locations). The mobile internet industry in China is rapidly growing and is likely to be in a longterm growth trend.According to the Mobile Internet Blue Book of China Mobile Internet Report, in 2017 the market size of China mobile internet reached RMB 605 billion. Now China isin a leading position in terms of smartphone, mobile communication network and mobile application services. The pool of users is anticipated to keep expandingthrough the promotion and popularization of smartphones and the expansion of the mobile internet market.Video is the leading online entertainment format in China. According to the iResearch Report, over 80% of total time spent by users on online entertainmentin China in 2016 was internet video. Online entertainment, especially internet video, is attractive to Chinese users due to many favorable factors, including easyaccessibility, wide content selection, and innovative platforms with social features.For 2017, the transaction volume of China mobile ecommerce market reached to over RMB 4 trillion according to the China Mobile Ecommerce IndustryResearch Report from iResearch, representing an increase of 19.1%. For the next few years, China mobile online shopping will likely maintain steady growth. Thefocal point of competition in China mobile ecommerce market has shifted from infrastructure service providers to integrated and accurate services providers.Drawing in users with compelling content in diversified scenes has become a trend.21The revenue for China mobile gaming industry reached RMB 144.58 billion for the year of 2017, according to the China Mobile Game Industry ResearchReport from iResearch. With increased investment by largescale enterprises in the sector of mobile games and the strict enforcement of the mobile game industryrelated regulatory policy guidelines, the mobile game market as a whole will become more organized and standardized.According to the Annual Analysis of China Mobile Reading Industry from Analysis, for the year of 2017, the mobile reading market in China reached toRMB 14.04 billion. By the end of 2016, the size of China mobile's reading market reached RMB 11.86 billion, showing an increase of 18.38% in 2017.The closed and boring environment for passengers of longdistance travel and high roaming charges lead to a strong demand to use our rail WiFi services.Passengers, through their own mobile phone, have access to the free WiFi network in each carriage, access to our rich mobile internet entertainment content andtravel services. According to the annual statistical bulletin of China Railway Corporation in 2017, there were about 6,030 trains in operation in China in 2017,consisting of 2,935 high speed trains and 3,095 express trains. The rail WiFi system that we have installed are currently all on express trains. The market value will bemultiplied several times following the extended coverage of service on other trains.Our StrengthsWe believe the following strengths differentiate us from our competitors:Our strategy is to build up personalized and targeted service products for travelers through rail WiFi networks, enabling our services to evolve into a coredriving distribution platform that provides content, news, games, ecommerce, OTO service, travel services and advertising and marketing. In comparison, ourcompetitors offer simple forms of media services on trains. We focus on personalized and targeted matching between users on long distance trips and services. Ourcompetitors focus on operating and generating internet traffic.We possess a complete set of technology system including network, client end and service and operation platform. We have patent protections for WiFiequipment on trains. Our technology strengths are briefly summarized below.WiFi EquipmentPatent protected. Supports WiFi/3G/4G telecom modules; 4 core CPU with X86 architecture, and SSD hard disk with big storage for localcontents.InfrastructureThe technology infrastructures include the application program system, big data gathering and processing systems, intelligence cloudsservice deployment structure systems and our WiFi hardware server deployment structure system. The operation center, big data center,contents center and railWiFi server system are built on this infrastructure. On the above layer, the equipment management platform,account and payment platform, contents management platform and advertisement distribution platform are set up for daily managementpurpose.LuoKuang strengthens the connection of services among people, setting and locations. In catering to people on the move, we anticipate strengthening therelationship between users and their locations in a given moment. Currently, LuoKuang provides the link between users and thirdparty service providers andprovides value added services to both users and thirdparty service providers. The connection is not simply a traffic diversion, but also the direct presentation ofrelevant services in the LuoKuang platform. The open API interface and independent product software package allows easy access by service providers anddevelopers and supports data service, advertisement operations, billing, users promotion and product marketing services. As an API product, LuoKuang does notcreate content or services. The content and services are provided by our partners in the LuoKuang platform. Now, the majority of top mobile internet content andservices providers in China have a presence in the Luokuang platform. Those include, but are not limited to, Toutiao, Wangyi News, iqiyi, Letv, YoudianCinema(Hollywood films), Sohu video, Phoenix Video, Kugou Music, FM Qingting, iReader, Baidu Literature, Phoenix Novel, Baidu Game, Meituan, Dianping, andsimilar content providers.22Our StrategyLuoKuang is positioned to provide API interface services and geographic information social services. The API interface services are provided within thetypical BC model. LuoKuang pushes the content and services from thirdparty service providers to users. The local businesses, service practitioners, residents, andforeign travelers are all defined as a “user” and may participate in social interactions based on local value information and generate UGC content. The socalled localvalue information is defined as information, views, evaluations, experiences and experience sharing related to the local cultural scene, native products,entertainment, food, tourism and activities.The LuoKuang user growth strategy is to have access to users through the travelers’ use of mobile devices in connection with longdistance train travel.Through deploying WiFi systems on trains and providing free WiFi access to passengers, LuoKuang is able to have consistent access to longdistance travelers.The WiFi system on the train has become a powerful user portal at the early stage of LuoKuang and has gained substantial user traffic. We are in a leading positionin terms of numbers of trains contracted and trains in operation with our free WiFi system. We have contracted with about 700 trains, which cover almost 560 millionannual passenger trips. As of the date of this report, approximately 290 trains are operating our rail WiFi system. We will continue to install our rail WiFi system inthe following years.The development strategy for LuoKuang encompasses the following:1.Enhance our local cycle service (a recommendation service system based on the location of travelers after their arrival, recommendations includingtourist attractions, local specialties and other items of interest), strengthen services for arrivals in the form of social interaction and focus on the valueof relationships between users and their current locations.2.Focus on the development of geographic positioning technology. Get the business of local cycle and users on train mixed together. We will put oureffort to maximize the synergy effect.3.Big Data: Behavior data about passenger trips is obtained via the traffic entrance of rail WiFi and these data will help to optimize our product.4.While enhancing setting service experiences and optimizing entertainment experiences, we will enrich ecommerce services on trains featuringrecommendations of customized products and ecommerce shopping guidance of products labeled with specific geographic location (and trafficdiversion).5.Focus on API positioning and attract more premium vertical service providers (contents and services).Intellectual PropertyWe have registered the following software copyrights, patents and trademarks for our business operations. We believe this intellectual property forms anintegral part of our competitive strength.23Patents:We have been granted some inventions by the State Intellectual Property Office of PRC. We possess a complete set of technology system includingnetwork, client end and service and operation platform. We have patent protections for WiFi equipment on trains. We have received the following patents:No.Name of patentTypeRegistrationNumberDate of Insurance1.Wireless communication multimedia chip business consumer informationacquisition terminal deviceInventionZL 2010 2 0528767.9Sep 21, 20112.A user behavior processing method and device for intelligent terminalInventionZL 2013 1 0301728.3May 27, 20153.A global positioning system terminal deviceInventionZL 2010 2 0253452.8Nov 7, 20114.A wireless multimedia serverInventionZL 2013 2 0220183.9Nov 13, 20135.Ordering system of passengers on trainInventionZL 2015 2 0095381.6Aug 5, 20156.A wireless multimedia serverInventionZL 2015 2 0201382.4Oct 28, 20157.An antenna structureInventionZL 2016 2 0424352.4Mar 1, 20178.Spatial data progressive transmission method and deviceInvention201010617383.9Jun 15, 20169.Methods and devices for conflict detection and avoidance of spatial entity elementlabelingInvention201010617385.8Mar 26, 201410.Spatial data processing method and deviceInvention201010617399.XJun 26, 201311.Method and device of spatial data simplificationInvention201010617400.9Mar 13, 201312.Method and device for judging the occlusion type of space entityInvention201010617403.2Sep 25, 201313.A method and device for distributed mapping of 3d model dataInvention201110274924.7Mar 26, 201414.Data simplification of 3d model, gradual transmission method and deviceInvention201110275336.5Mar 25, 201515.Spatial data transmission method and deviceInvention201110306393.5Dec 13, 201416.Methods and devices for spatial data processing, simplification and progressivetransmissionInvention201210104250.0Jun 10, 201517.Spatial data progressive transmission method and deviceInvention201310367021.2Jun 23, 201718.Simplification method and device of spatial dataInvention201310367128.7Sep 22, 201719.The method and device to accelerate transmission and display of graphic dataacross platformsInvention201210116149.7Aug 10, 201620.Methods and devices related to spatial data compression, decompression andprogressive transmissionInvention201310136682.4Nov 10, 2017We also have two patents outside of China.No.Name of patentCountryNationalRegistrationNumberDate ofInsurance1.Spatial data processing method and deviceJapan2012547439Jun 20, 20142.Methods and devices related to spatial data compression, decompression andprogressive transmissionU.S.A14/394,610Sep 5, 201724Software Copyrights:We have received the following software copyrights from the National Copyright Administration (“NCA”) of PRC:No.Name of CopyrightAchievement approachRegistration numberTime of obtainExpire time1.WAP PUSH Business operation platformsystemIndependent research anddevelopment2007SRBJ1464Jul 23, 200750 years2.TDSCDMA Streaming media businessmanagement platform software V1.0Independent research anddevelopment2009SRBJ0412Jan 22, 200950 years3.Content management platform systemsoftware V1.0Independent research anddevelopment2009SRBJ1374Apr 1, 200950 years4.Mobile multimedia broadcast electronicservice guide system software V1.0Independent research anddevelopment2009SRBJ1365Apr 1, 200950 years5.Mobile video business operation platformsystem V1.0Independent research anddevelopment2007SRBJ1463Jul 23, 200750 years6.Mobile multimedia broadcast emergencybroadcast platform software V1.0Independent research anddevelopment2010SRBJ0720Mar 5, 201050 years7.Mobile multimedia broadcast audio richmedia interactive platform softwareV1.0Independent research anddevelopment2010SRBJ0719Mar 5, 201050 years8.Printer typesetting and printing softwareV1.0Independent research anddevelopment2011SRBJ4190Sep 28, 201150 years9.Electronic newspaper business supportplatform software V1.0Independent research anddevelopment2011SRBJ4186Sep 28, 201150 years10.Public information business platformsoftware V1.0Independent research anddevelopment2011SRBJ3810Sep 27, 201150 years11.User interface scripting software V1.0Independent research anddevelopment2011SRBJ3809Sep 27, 201150 years12.Integrated business management platformsoftware V1.0Independent research anddevelopment2012SR003002Jan 16, 201250 years13.Interactive business development platformsoftwareIndependent research anddevelopment2011SRBJ4593Nov 29, 201150 years14.Instant messaging and messaging systemsoftwareIndependent research anddevelopment2014SR122231Aug 5, 201450 years15.General statistical platform software forclient productsIndependent research anddevelopment2014SR216662Dec 30, 201450 years16.CMMB Data broadcast managementplatform softwareIndependent research anddevelopment2009SRBJ0391Jan 22, 200950 years17.Integrated passenger train service systemIndependent research anddevelopment2012SR083665Sep 5, 201250 years25No.Name of CopyrightAchievement approachRegistration numberTime of obtainExpire time18.JHBY Train inspection managementsystemIndependent research anddevelopment2013SR015105Feb 21, 201350 years19.Integrated information engine platformsoftware V1.0Independent research anddevelopment2014SR040347Nov 30, 200150 years20.Super information engine developmentplatform software V5.0Independent research anddevelopment2014SR036792Mar 5, 200350 years21.Core map super network informationengine platform software V1.0Independent research anddevelopment2014SR036772Sep 15, 200750 years22.Integrated management of the grid gissoftware V1.0Independent research anddevelopment2014SR036808Jun 20, 200850 years23.Core map rural power grid equipment GPSpatrol system software V1.0Independent research anddevelopment2014SR036810Dec 10, 200850 years24.Diagram grid patrol PDA system softwareV1.0Independent research anddevelopment2014SR036778Dec 12, 200850 years25.Core map geographic information enginedesktop platform software V1.0Independent research anddevelopment2014SR036614Jan 15, 200950 years26.Integrated management of the gridgeographic information Web systemsoftware V1.0Independent research anddevelopment2014SR036799Mar 10, 200950 years27.Core map railway power supply equipmentGPS patrol system software V1.0Independent research anddevelopment2014SR036783Mar 25, 201050 years28.Core map network 3 d map server softwareV1.0Independent research anddevelopment2014SR036788Feb 20, 201150 years29.Core map network 3d map clientsoftwareV1.0Independent research anddevelopment2014SR036637Feb 22, 201150 years30.Core map 3d map network publishingplatform software V1.0Independent research anddevelopment2014SR036633Mar 10, 201150 years31.Core map 3d map network release pluginsystem software V1.0Independent research anddevelopment2014SR036622Mar 15, 201150 years32.Core map network 3d map smartphoneplatform software V1.0Independent research anddevelopment2014SR036638Apr 28, 201150 years33.Core map network GIS Shared mobileplatform software V1.0Independent research anddevelopment2014SR036634Oct 31, 201150 years34.Core map network GIS sharing platformsoftware V1.0Independent research anddevelopment2014SR036639Dec 16, 201150 yearsTrademarks:We have registered the following trademarks with the Trademark Office, State Administration for Industry and Commerce in the PRC:NoTrademarkClassification NumberValid PeriodRegistration Number1Y图形382010.04.212020.04.2067460692Y图形412010.09.072020.09.0667460673YRADIO文字352010.07.212020.07.2067334374YRADIO文字382010.04.21.2020.04.2067334385YRADIO文字412010.09.072020.09.0667334396LookLook图形382009.04.072019.04.0646660517LookLook图形422008.12.212018.12.2046660508YTV文字352010.07.212020.07.2067335799YTV文字382010.05.282020.05.27673357810YTV文字412010.09.072020.09.06673358111YTV文字422010.09.072020.09.06673358012YOUTV文字352010.07.212020.07.20673344013YOUTV文字382010.05.282020.05.27673344114xfeng文字352012.03.282022.03.27922914526NoTrademarkClassification NumberValid PeriodRegistration Number15xfeng文字382012.03.282022.03.27922916016xfeng文字412012.03.282022.03.27922919017xfeng文字422012.03.282022.03.27922922118中传视讯文字+图形422008.12.212018.12.20466604719中传视讯文字422008.12.212018.12.20466604820中传视讯文字382008.12.212018.12.20466604921新蜂文字382011.08.212021.08.20853890722新蜂文字422012.01.282022.01.27853907823新蜂.潮文字382011.08.212021.08.20853910424新蜂.潮文字422012.01.282022.01.27853914125新影力412014.08.282024.08.271228864326小人图形352014.08.282024.08.271228798527小人图形382014.08.282024.08.271228858028小人图形412014.08.282024.08.271228862929小人图形422014.08.282024.08.271228843530中传文字382014.08.282024.08.271228826731中传图形382014.08.282024.08.271228828932中童文字412014.08.072024.08.061221408533中童在线文字412014.08.072024.08.061221409234翠鸟文字382014.08.072014.08.061221405835翠鸟文字422014.08.072014.08.061221412536爱翠鸟文字382014.08.072024.08.061221406637爱翠鸟文字412014.08.072024.08.061221409638爱翠鸟文字422014.08.072024.08.061221412639翠鸟图形352014.08.072024.08.061221404040翠鸟图形382014.08.072024.08.061221407441翠鸟图形412014.08.072024.08.061221410042翠鸟图形422014.08.072024.08.061221413143信号小喇叭图形+CMEDIA412015.03.212025.03.201248043944LookLook图形382015.11.142025.11.131153342845LookLook图形422014.06.212024.06.201153372046LookLook文字382014.07.142024.07.131153406747LookLook文字422014.04.142024.04.131153422748L图形352014.02.282024.02.271153500249L图形382014.02.282024.02.271153507350L图形412014.02.282024.02.271153518151L图形422014.02.282024.02.271153526252箩筐图形412016.06.142026.06.131658022853箩筐图形422016.06.142026.06.131658022754箩筐文字422016.09.282026.09.271658024955箩筐文字412016.06.142026.06.131658025056箩筐文字352016.09.212026.09.201658025257箩筐文字92016.06.142026.06.131658025327NoTrademarkClassification NumberValid PeriodRegistration Number58箩筐图形382016.06.142026.06.131658022959箩筐图形352016.06.142026.06.131658023060箩筐图形92016.06.142026.06.131658023161微时光文字422016.09.282026.09.271658024762传游录屏文字92016.06.142026.06.131678214463传游录屏文字352016.06.142026.06.131678214364传游录屏文字382016.06.142026.06.131678214265传游录屏文字412016.06.142026.06.131678214166传游录屏文字422016.06.142026.06.131678214067录游器文字92016.06.142026.06.131678213568录游器文字352016.06.142026.06.131678213669录游器文字382016.06.142026.06.131678213770录游器文字412016.06.142026.06.131678213871录游器文字422016.06.142026.06.131678213972畅联TV文字412016.01.212026.01.201579246773畅联TV文字382016.01.212026.01.201579246874SuperEngine92016.01.212026.01.20812572275SuperEngine422016.01.212026.01.20812572876超擎9/422016.01.212026.01.201647320577SUPERENGINE9/422016.01.212026.01.2016473185*See below for an explanation of each classification number used in the table above.Classification No. 9: data processing apparatus, couplers (data processing equipment), computer software (recorded), monitors (computer programs), smartcards (integrated circuit cards), electrodynamic apparatus for the remote control of signals, alarms, and electric installations for the remote control of industrialoperations.Classification No. 35: auctioneering, sales promotion for others, marketing analysis, marketing research, importexport agencies, advisory services forbusiness management, business management for franchise, personnel management consultancy, relocation services for businesses, and systemization ofinformation into computer databases.Classification No. 38: Include services that enable at least sensory communication between two people. Such services include that allow one person to talkto another, send messages from one person to another, Make verbal or visual contact between one person and the other. This classification especially include theservice for broadcasting radio or television programs. Except for radio advertising services and telemarketing services.Classification No. 41: instruction services, teaching, education information, tuition, arranging and conducting of colloquiums, publication of electronicbooks and journals online, amusements, and vocational guidance.Classification No. 42: technical research, studies (technical project), computer software design, updating of computer software, recovery of computer data,computer systems analysis, installation of computer software, computer antivirus protection, and research and development for others. 28Business Certificates and QualificationsWe have obtained all necessary regulatory certifications to conduct our business in the PRC, including without limitation, the following: SoftwareEnterprise Recognition Certificate, Computer Information System Integration Qualification Certificate, Construction Enterprise Qualification Certificate, and SecurityTechnology & Protection Enterprise Certificate. We have also been properly certified as a hightech enterprise and have met the ISO 9001:2000 qualificationmanagement system.Legal ProceedingsAlthough we may, from time to time, be involved in litigation and claims arising out of our operations in the normal course of business, we do not believethat we are a party to any litigation that will have a material adverse impact on our financial condition or results of operations. To our knowledge, other than asdescribed below there are no material legal proceedings threatened against us. From time to time, we may be subject to various claims and legal actions arising in theordinary course of business. Following the consummation of the AEA, we became successor in interest to the legal proceedings described below.Litigation with Shanghai Fusheng Weier Intelligent Control Technology Co., Ltd.On January 22, 2016, Zhong Chuan Rui You and Shanghai Fusheng Weier Intelligent Control Technology Co., Ltd. (“Fusheng Weier”) signed a contract forequipment of $1,652,842 (RMB10,800,000). Since Zhong Chuan Rui You did not make the payments of $1,126,381 (RMB7,360,000) on the due dates, Fusheng Weierfiled a lawsuit against Zhong Chuan Rui You in Shanghai Xuhui District People's Court on October 8, 2016. On March 9, 2017, Xuhui District People's Court issuedthe verdict requiring Zhong Chuan Rui You to pay the overdue debts. In August 2017, C Media Limited made the payment of $512,075 (RMB3,346,000). Theremaining balance has been accrued in accounts payable. The payment schedule for the remaining balance is being negotiated by the two parties. On February 5,2018, a hearing was held adding Zhong Chuan Shi Xun as a defendant. The Group plans to settle the remaining balance within one year.Lawsuit with Gansu Jinlun Culture Media Co., Ltd.On August 22, 2014, Zhong Chuan Rui You and Gansu Jinlun Culture Media Co., Ltd. (“Gansu Jinlun”) signed a “Lanzhou Railway Bureau AirconditionedTrain WiFi Network System Advertising Operation Rights Agreement” for advertising on 72 trains of $1,467,880 (RMB9,604,633). Due to the dispute on theproject implementation, Zhong Chuan Rui You did not pay the advertising fee. On August 23, 2017, Gansu Jinlun filed a lawsuit with Gansu Intermediate People'sCourt. On December 19, 2017, Gansu Intermediate People's Court issued a verdict, ruling that Zhong Chuan Rui You settle the overdue advertising fee. Since only 18out of 72 trains have been installed with Wifi network system, Zhong Chuan Rui You disputed and appealed to the verdict. The next court trial date has not yet beendetermined.C Media and Gansu Jinlun are negotiating a potential settlement to resume the contract. According to the legal counsel, it is probable that the settlementwill amount to approximately $459,000 (RMB3,000,000); therefore, this amount has been accrued in accounts payable as at December 31, 2017.Litigation with Shenzhen Hua Xun Fang Zhou Technology Co., Ltd.On June 16, 2015, Zhong Chuan Rui You signed a cooperation agreement with Shenzhen Hua Xun Fang Zhou Technology Co., Ltd. (“Shenzhen Hua Xun”)and Xuesong Song, a major shareholder of C Media Limited. Pursuant to this agreement, Zhong Chuan Rui You procures equipment from Shenzhen Hua Xun.Xuesong Song acts as a joint liability guarantor for the entire debts of Zhong Chuan Rui You under this agreement. As Zhong Chuan Rui You did not make thepayments on the due dates, Shenzhen Hua Xun filed a lawsuit with Shenzhen Baoan District People's Court on May 31, 2016. On November 1, 2016, Zhong ChuanRui You, Xuesong Song and Shenzhen Hua Xun reached a settlement in Shenzhen Baoan District People's Court to settle $1,735,389 (RMB11,355,000) in fourinstalments. On December 30, 2017, the debt was assigned to C Media Limited.29C. ORGANIZATIONAL STRUCTUREThe following diagram illustrates our corporate structure and the place of formation and affiliation of each of our subsidiaries and affiliates as of September30, 2018.30The following diagram illustrates our corporate structure and the place of formation and affiliation of each of our subsidiaries and affiliates as of December31, 2017.Contractual Arrangements with Beijing Zhong Chuan Shi Xun Technology Limited’s Subsidiaries and Their Respective ShareholdersTo comply with the PRC legal restrictions on foreign ownership of companies that operate mobile application services, our subsidiaries operate in suchrestricted service areas in the PRC through certain PRC domestic companies, whose equity interests are held by certain management members or founders of the LKTechnology Ltd. Part of the registered capital of these PRC domestic companies was funded by certain management members or founders of LK Technology Ltd. LKTechnology Ltd., through its subsidiary Zhong Chuan Tian Xia Information and Technology (Shenzhen) Limited (the “WFOE”), has entered into an exclusivebusiness cooperation agreement with Beijing Zhong Chuan Shi Xun Technology Limited (“Zhong Chuan Shi Xun” or the “VIE”) the PRC domestic company, whichentitle the WFOE to receive a majority of profit of Zhong Chuan Shi Xun. In addition, Zhong Chuan Tian Xia Information and Technology (Shenzhen) Limited hasentered into certain agreements with those management members or founders, including equity interest pledge agreement of the equity interests held by thosemanagement members or founders and exclusive option agreement to acquire the equity interests in these companies when permitted by the PRC laws, rules andregulations. Details of the typical VIE structure of our significant consolidated VIE, primarily domestic companies associated with the operations such as ZhongChuan Shi Xun and its subsidiaries of Zhong Chuan Rui You, Huoerguosi Luokuang and Jiu Zhou Shi Dai, are set forth below: Exclusive Business Cooperation AgreementThe VIE has entered into an exclusive business services agreement with the WFOE, pursuant to which the WFOE provides exclusive business services tothe VIE. In exchange, the VIE pays a service fee to the WFOE which amounts to be no less than the 80% of the VIE’s aftertax profit, resulting in a transfer ofsubstantially all of the profits from the VIE to the WFOE.Exclusive Option AgreementThe VIE equity holders have granted the WFOE exclusive call options to purchase their equity interest in the VIE at an exercise price equal to the minimumprice as permitted by applicable PRC laws. The WFOE may nominate another entity or individual to purchase the equity interest, if applicable, under the call options.Each call option is exercisable subject to the condition that applicable PRC laws, rules and regulations do not prohibit completion of the transfer of the equityinterest pursuant to the call option. The VIE agrees not to distribute any dividends to the VIE equity holders without the approval of WFOE.31Equity Interest Pledge AgreementPursuant to the equity pledge agreement, the VIE equity holders have pledged all of their interests in the equity of the VIE as a continuing first prioritysecurity interest in favor of the WFOE to secure the performance of obligations by the VIEs and/or the equity holders under the exclusive business cooperationagreement. The WFOE is entitled to exercise its right to dispose of the VIE equity holders’ pledged interests in the equity of the VIE and has priority in receivingpayment by the application of proceeds from the auction or sale of such pledged interests, in the event of any breach or default under the exclusive businesscooperation agreement, if applicable. These equity pledge agreement remain in force until all the obligations under the exclusive business cooperation agreementhave been fulfilled.The exclusive business cooperation agreement and equity interest pledge agreement described above also enable the Company to receive substantially allof the economic benefits from the VIE by typically entitling the WFOE to all dividends and other distributions declared by the VIE and to any distributions orproceeds from the disposal by the VIE equity holders of their equity interests in the VIE.D. PROPERTY AND EQUIPMENTWe lease offices located at Lab 30 & Lab 32, SOHO 3Q, No 9, Guanghua Road, Chaoyang District, Beijing, which covers a floor space of 600 square meters.These leases expire at different times throughout 2018 and are renewable upon negotiation.ITEM 4A. UNRESOLVED STAFF COMMENTSNone.ITEM 5. OPERATING AND FINANCIAL REVIEW AND PROSPECTSA . OPERATING RESULTS.The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our consolidatedfinancial statements and the notes to those financial statements appearing elsewhere in this report. This discussion and analysis contains forwardlookingstatements that involve significant risks and uncertainties. As a result of many factors, such as our anticipated growth strategy, our plans to recruit moreemployees, our plans to invest in research and development to enhance our product or service lines, our future business development, results of operations andfinancial condition, expected changes in our net revenues and certain cost or expense items, our ability to attract and retain customers, trends and competitionin the enterprise mobile software application market, and the factors set forth elsewhere in this report, our actual results may differ materially from thoseanticipated in these forwardlooking statements. In light of those risks and uncertainties, there can be no assurance that the forwardlooking statementscontained in this report will in fact occur. You should not place undue reliance on the forwardlooking statements contained in this report.The forwardlooking statements speak only as of the date on which they are made, and, except to the extent required by U.S. federal securities laws, weundertake no obligation to update any forwardlooking statement to reflect events or circumstances after the date on which the statement is made or to reflectthe occurrence of unanticipated events. Further, the information about our intentions contained in this report is a statement of our intention as of the date of thisreport and is based upon, among other things, the existing regulatory environment, industry conditions, market conditions and prices and our assumptions as ofsuch date. We may change our intentions, at any time and without notice, based upon any changes in such factors, in our assumptions or otherwise.32Unless the context otherwise requires, all references to (i) “PRC” and “China” are to the People’s Republic of China; (ii) “U.S. dollar,” “$” and “US$”are to United States dollars; and (iii) “RMB”, “Yuan” and Renminbi are to the currency of the PRC or China.OverviewLuokung Technology was incorporated on October 27, 2009 under the laws of the British Virgin Islands. We are a holding company and conduct ouroperations through LK Technology Ltd., a British Virgin Islands limited liability company (“LK Technology”) and its whollyowned subsidiaries, MMB Limited andMobile Media (China) Limited and their respective subsidiaries and a contractuallycontrolled entity in the PRC named Beijing Zhong Chuan Shi Xun Technology,which hold the rights to deploy WiFi systems on about 700 trains in China, including 290 trains in which WiFi systems have already been installed and are inoperation. In May 2010, we consummated an initial public offering of our American Depository Shares, or ADSs, for gross proceeds of $16 million, and our ADSswere listed on the NASDAQ Capital Market under the ticker symbol “KONE”. Our ordinary shares are not currently listed on any trading market. Our AmericanDepository Shares (“ADSs”) were voluntarily delisted from the NASDAQ Capital Market on September 19, 2018. We have applied to NASDAQ for the listing of ourordinary shares on the NASDAQ Capital Market and received an approval for listing of Ordinary Shares on August 6, 2018, and as of the date of this transitionreport, that application and approval are currently under review.On August 17, 2018, we consummated an asset exchange transaction, pursuant to which we exchanged all issued and outstanding capital stock in TopskyInfoTech Holdings Pte Ltd., the parent of Softech, for the issued and outstanding capital stock of LK Technology (the “Asset Exchange”). In connection with theAsset Exchange, we changed our name on August 20, 2018, and on September 20, 2018, completed the issuance to the shareholders of C Media Limited, the formerparent of LK Technology, of (i) 185,412,599 of our ordinary shares, par value $0.01 per share and (ii) 1,000,000 of our preferred shares. Upon the consummation of theAsset Exchange, we ceased our previous business operations and became a company focused on the provision of WiFi and mobile application products for longdistance travelers in China.On August 25, 2018, LK Technology entered into a Stock Purchase Agreement (the “Agreement”) with the shareholders (“Shareholders”) of SuperengineHoldings Limited, a limited liability company organized under the laws of the British Virgin Islands (the “Superengine”), pursuant to which LK Technology acquiredall of the issued and outstanding capital stock of Superengine for an aggregate purchase price of US$60 million (the “Purchase Price”), which are paid by theissuance of our Ordinary Shares in an amount equal to the quotient of (x) the Purchase Price divided by (y) the average of the closing prices of the Ordinary Shareson the NASDAQ Capital Market over the 12 months period preceding July 31, 2018. We are a party to the Agreement in connection with the issuance of theOrdinary Shares and certain other limited purposes.Results of operations for the fiscal year ended December 31, 2017 compared to the fiscal year ended December 31, 2016.RevenueWe provide displaybased online advertising services to customers by integrating text description, image and video, and displaying the advertisements in aprominent position of LuoKuang Application. We recognize revenue in accordance with ASC 605, over the contractual term based on the agreements andconfirmation letters signed by both parties, commencing on the date the customer’s advertisement is displayed on our platform.For the year ended December 31, 2017, we had revenue of $26,082,417, as compared to revenue of $5,233,145 for the year ended December 31, 2016, anincrease of $20,849,272, or 398.4%, which was primarily due to the increase of our advertising clients.Cost of revenueOur cost of revenue primarily consists of depreciation, labor cost, WiFi equipment installation fees, data charges, annual payments to local railway bureau,other overhead costs.33Cost of revenue for the year ended December 31, 2017 was $5,547,779, representing a decrease of $767,725 or 12.2% as compared to $6,315,504 for the yearended December 31, 2016. The decrease was primarily attributable to the decrease in labor cost as a result of our cost control and a decrease in the number ofmaintenance staff. Additionally, data charges decreased as train passengers prefer using their mobile data, leading to a decrease in 3G and 4G data.Selling and marketing expenseOur selling and marketing expense mainly include promotional and marketing expenses and compensation for our sales and marketing personnel.Selling expense totaled $23,908,733 for the year ended December 31, 2017, as compared to $6,209,804 for the year ended December 31, 2016, an increase of$17,698,929 or 285.0%. The increase was primarily attributable to the increase in promotional and marketing activities conducted by the Company.General and administrative expenseOur general and administrative expenses consist primarily of salaries and benefits for our general and administrative personnel, rent, fees and expenses forlegal, accounting and other professional servicesGeneral and administrative expense totaled $2,451,249 for the year ended December 31, 2017, as compared to $2,108,854 for the year ended December 31,2016, an increase of $342,395 or 16.2%.Research and development expenses.Research and development expenses primarily consist of salaries and benefits for research and development personnel.Research and development expenses totaled $1,046,198 for the year ended December 31, 2017, as compared to $2,882,202 for the year ended December 31,2016, a decrease of $1,836,004 or 63.7%. The decrease was primarily attributable to the Company reduced its expenses in research and development temporarily asour products are quite stable at present.Loss from operationsAs a result of the factors described above, for the year ended December 31, 2017, loss from operations amounted to $6,871,542, as compared to loss fromoperations of $12,283,219 for the year ended December 31, 2016, a decrease of $5,411,677, or 44.1%.Other income/expenseOther income/expense mainly include interest income from bank deposits, foreign currency transaction gain, and loss from investment.Net lossAs a result of the factors described above, our net loss was $6,810,454 for the year ended December 31, 2017, compared to net loss of $13,049,031 for theyear ended December 31, 2016, a decrease of $6,238,577 or 47.8%.Foreign currency translation adjustmentOur reporting currency is the U.S. dollar. The functional currency of our parent company and subsidiaries of Merchant Supreme and Prime Cheer is the U.S.dollar and the functional currency of the Company’s subsidiaries incorporated in China is the Chinese Renminbi (“RMB”). The financial statements of oursubsidiaries incorporated in China are translated to U.S. dollars using period end rates of exchange for assets and liabilities, and average rates of exchange (for theperiod) for revenue, costs, and expenses. Net gains and losses resulting from foreign exchange transactions are included in the consolidated statements ofoperations and comprehensive loss. As a result of foreign currency translations, which are a noncash adjustment, we reported a foreign currency translation gain of$90,671 for the year ended December 31, 2017, as compared to a foreign currency translation loss of $387,375 for the year ended December 31, 2016. This noncashgain had the effect of increasing/decreasing our reported comprehensive income/loss.34Comprehensive lossAs a result of our foreign currency translation adjustment, we had comprehensive loss for the year ended December 31, 2017 of $6,719,783, compared tocomprehensive loss of $12,661,656 for the year ended December 31, 2016.B. LIQUIDITY AND CAPITAL RESOURCESThe information contained in “Item 5. Operating and Financial Review and Prospects – A. Operating Results – Liquidity and Capital Resources” isincorporated herein by reference.C. RESEARCH AND DEVELOPMENT, PATENTS AND LICENSES, ETC.The discussions of our research and development activities were contained in “Item 4. Information about our Company – B. Business Overview –Research and Development” and “Item 5. Operating and Financial Review and Prospects – A. Operating Results – Operating Expenses – Research and DevelopmentExpenses” are incorporated herein by reference. In the years ended December 31, 2017 and 2016, we spent $1,046,198 and $2,882,202, respectively, on research anddevelopment activities.D. TREND INFORMATION.Industry and Market OutlookChina has awarded licenses to mobile phone companies to provide the superfast 4G network to customers. The licenses, which are designed to give mobilephone users faster access to services, were granted by the government to China Mobile, China Unicom Hong Kong and China Telecom. Since the grants, ChinaMobile has offered 4G to subscribers from December 18, 2013. China Unicom and China Telecom, the country's other two major carriers, also offer 4G wireless. Thenumber of China Mobile 4G customers has exceeded 900 million by the end of October in 2017. The move greatly bolstered business for telecom equipment makersand a range of other companies.Under China’s 12th FiveYear Plan, a key priority is for China to transition from “Made in China” to “Designed in China.” In order to achieve this goal, thegovernment plans to heavily invest in science and technology education and R&D so as to further develop China’s intellectual property rights system and support“NextGeneration IT” as a Strategic Emerging Industry (SEI). Additionally, China plans to upgrade the technological capabilities of private and public services,including “triple play” services (the convergence of telecom, broadcasting and Internet networks), ecommerce, and egovernment and statistics systems.Furthermore, the government plans to invest in R&D of the "Internet of things" and cloud computing, and develop digital and virtual technologies.E. OFFBALANCE SHEET ARRANGEMENTSWe have not entered into any financial guarantees or other commitments to guarantee the payment obligations of any third parties. We have not enteredinto any derivative contracts that are indexed to our shares and classified as shareholder’s equity, or that are not reflected in our consolidated financial statements.Furthermore, except for the mortgage referenced above, we do not have any retained or contingent interest in assets transferred to an unconsolidated entity thatserves as credit, liquidity or market risk support to such entity. We do not have any variable interest in any unconsolidated entity that provides financing, liquidity,market risk or credit support to us or engages in leasing, hedging or research and development services with us.35F. TABULAR DISCLOSURE OF CONTRACTUAL OBLIGATIONSAs of December 31, 2017, we did not have any contractual obligations required to be disclosed in this Item 5.F. ITEM 6. DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES.A. DIRECTORS AND SENIOR MANAGEMENT.Executive Officers and DirectorsThe following table sets forth the names and ages as of the date of this transition report of each of our executive officers and directors:NameAgePositionXuesong Song50Chief Executive Officer, Chairman and DirectorDongpu Zhang50PresidentJie Yu34Chief Financial OfficerKegang Peng46Vice President and DirectorChuang Tao51DirectorDennis Galgano (1)(2)69Director (Independent)Jin Shi (1)(2)49Director (Independent)Jiming Ha (1)(3)56Director (Independent)Zhihao Xu (3)42Director (Independent)(1)Member of the Audit Committee.(2)Member of the Compensation Committee.(3)Member of the Nominating and Corporate Governance Committee.Set forth below is biographical information concerning our executive officers and directors.Xuesong Song is a cofounder of C Media Limited and served as its chairman of the board of directors and chief executive officer from 2012 until theconsummation of the AEA. From February 2014 through April 2017, Mr. Song served as a director of Seven Stars Cloud Group, Inc. (NASDAQ: SSC) and fromJanuary 2013 through February 2015, Mr. Song served as a director of Pingtan Marine Enterprise Ltd. (NASDAQ: PME). From May 2006 through January 2009, Mr.Song served as the Chairman of the Board of ChinaGrowth North Acquisition Corporation, a special purpose acquisition company, which acquired UIB GroupLimited in January 2009, in which he remains a director. Mr. Song has been a principal of Chum Capital Group Limited since August 2001, a merchant banking firmthat invests in growth Chinese companies and advises them in financings, mergers & acquisitions and restructurings, and chief executive officer of Beijing ChumInvestment Co., Ltd. since December 2001. Mr. Song has been a director of Mobile Vision Communication Ltd. since July 2004. Mr. Song received a Master’s ofBusiness Administration degree from Oklahoma City/Tianjin Program.Dongpu Zhang was appointed as the President of the Company effective on August 25, 2018. Mr. Dongpu Zhang has served as the General Manager ofSuperEngine Graphics Software Technology Development (Suzhou) Co., Ltd. (“SuperEngine Suzou”) and the Chief Executive Officer of SuperEngine HoldingLimited since September 2016. From February, 2014 to August, 2016, Mr. Zhang served as vice president of Industrial Development Group under China Fortune LandDevelopment Co., Ltd. From March, 2009 to February, 2014, Mr. Zhang served as the vice president of Aerospace Science and Technology Holding Group Co., Ltd.Mr. Zhang receive his Master Degree of Computer Science from Harbin Institute of Technology in 1994 and his Bachelor Degree of information system fromChangsha Institute of technology in 1991.Jie Yu served as the chief financial officer of C Media Limited from January 2018 until the consummation of the asset exchange transactions. From June 2016to January 2018, Mr. Yu served as chief financial officer and secretary of the board of directors of MTI Environment Group Limited. Prior to joining MTI, Mr. Yuserved as the senior manager at DA HUA CPA from November 2012 to May 2016. Previously, Mr. Yu served as the manager at Crowe Horwath (Hong Kong) CPA.Mr. Yu holds a bachelor degree in accounting and finance from University of Auckland and postgraduate diploma in accounting from University of Auckland.36Kegang Peng served as the Vice Chairman of the board of directors C Media Limited from October 2014 to the consummation of the asset exchangetransactions, and is now a member of the Company’s board of directors. Previously, from 2012 to 2014, Mr. Peng was chairman of the board and founder of JiangsuSuqian Jinghaiboyuan Information and Technology Co., Ltd. Mr. Peng studied at Beijing University of Aeronautics and Astronautics majoring computer andapplication.20F 1 f20f2017_luokungtech.htm AMENDMENT NO. 1 TO FORM 20FUNITED STATESSECURITIES AND EXCHANGE COMMISSIONWASHINGTON, D.C. 20549FORM 20F☐ REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934OR☐ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934For the Fiscal year ended _____________OR☒ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934For the transition period from October 1, 2017 to December 31, 2017☐ SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934Date of event requiring this shell company report Commission file number: 00134738Luokung Technology Corp.(Exact name of Registrant as specified in its charter)Not applicable(Translation of Registrant’s name into English)British Virgin IslandsLAB 32, SOHO 3Q, No 9, Guanghua Road, Chaoyang District, BeijingPeople’s Republic of China, 100020(Jurisdiction of incorporation or organization)(Address of principal executive offices)Mr. Muqiao GengLAB32, SOHO 3Q, No 9, Guanghua Road, Chaoyang District, BeijingPeople’s Republic of China 100020Tel: (86) 1085866721(Name, telephone, Email and/or facsimile number and address of company contact person)Securities registered or to be registered pursuant to Section 12(b) of the Act:Title of each className of each exchange on which registeredOrdinary shares, par value $0.01 per shareNonePreferred shares, par value $0.01 per shareNoneSecurities registered or to be registered pursuant to Section 12(g) of the Act:none(Title of Class)Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act:none(Title of Class)Indicate the number of outstanding shares of each of the issuer’s classes of capital or common stock as of the close of the period covered by the transitionreport. 187,097,599 Ordinary Shares, including 186,383,224 Ordinary Shares represented by 714,375 American Depositary Shares, and 1,000,000 Preferred Sharesoutstanding as of September 20, 2018.Indicate by check mark if the registrant is a wellknown seasoned issuer, as defined in Rule 405 of the Securities Act. ☐ Yes ☒ NoIf this report is an annual or transition report, indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of theSecurities Exchange Act of 1934. ☐ Yes ☒ NoIndicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirementsfor the past 90 days. ☒ Yes ☐ NoIndicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File requiredto be submitted and posted pursuant to Rule 405 of Regulation ST (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that theregistrant was required to submit and post such files). ☒ Yes ☐ NoIndicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a nonaccelerated filer. See definition of “accelerated filer andlarge accelerated filer” in Rule 12b2 of the Exchange Act. (Check one):Large accelerated filer ☐ Accelerated filer ☐ Nonaccelerated filer ☒Indicate by check mark which basis of accounting the registrant has used to prepare the financial statements included in this filing.U.S. GAAP ☒International Financial Reporting Standards as issuedby the International Accounting Standards Board ☐Other ☐If “Other” has been checked in response to the previous question, indicate by check mark which financial statement item the registrant has elected tofollow. Item 17 ☐ Item 18 ☐If this is an transition report, indicate by check mark whether the registrant is a shell company (as defined in Rule 12b2 of the ExchangeAct). ☐ Yes ☒ NoExplanatory NoteLuokung Technology Corp. (the “Company”) is filing this transition report on Form 20F (“Transition Report”) in connection with the completion of theexchange of certain of its assets for substantially all of the assets of C Media Limited (“C Media”) pursuant to that Asset Exchange Agreement, dated January 25,2018 (the “Original AEA”), as supplemented by the Addendum to Asset Exchange Agreement, dated October 3, 2018 (the “Addendum” and together with theOriginal AEA, the “AEA”). Following the consummation of the AEA, on October 4, 2018, the Company changed its fiscal year end from September 30 to the fiscalyear end used by C Media, December 31. This Transition Report covers the threemonth period from Octorber 1, 2017 to December 31, 2017, and the fiscal yearsdescribed herein.In this transition report:●References to the “Company”, “we”, “our” and “us” are to Luokung Technology Corp. and its consolidated subsidiaries and variable interestentity, except as the context otherwise requires;●This transition report on Form 20F covers the threemonth period from October 1, 2017 through December 31, 2017 (the “Transition Period”) andreflects our financial results thereof. Prior to this transition report on Form 20F, our two most recent annual reports on Form 20F cover the fiscalyears ended September 30, 2017 and September 30, 2016, respectively, and reflect financial results for the respective twelvemonth periods fromOctober 1 to September 30. Unless otherwise noted, all references to years are to the calendar year from January 1 to December 31 and referencesto our fiscal year or years are to the fiscal year or years which, prior to the Transition Period, ended September 30, while from and after theTransition Period, ended December 31;●References to an “ADS” are to an American Depositary Share, each of which represents one of our Ordinary Shares with a par value of $.01 pershare.Special Note Regarding Forwardlooking StatementsThis transition report contains forwardlooking statements that involve risks and uncertainties. These statements involve known and unknown risks,uncertainties and other factors that may cause our actual results, performance or achievements to be materially different from those expressed or implied by theforwardlooking statements.You can identify these forwardlooking statements by words or phrases such as “may,” “will,” “expect,” “anticipate,” “aim,” “estimate,” “intend,” “plan,”“believe,” “likely to” or other similar expressions. We have based these forwardlooking statements largely on our current expectations and projections about futureevents and financial trends that we believe may affect our financial condition, results of operations, business strategy and financial needs. You should not placeundue reliance on these forwardlooking statements, which apply only as of the date of this transition report. These forwardlooking statements include:●our future business development, results of operations and financial condition;●expected changes in our net revenues and certain cost or expense items;●our ability to attract and retain customers; and●trends and competition in the enterprise mobile software application market.You should read this transition report thoroughly with the understanding that our actual future results may be materially different from, and/or worse, thanwhat we expect. We qualify all of our forwardlooking statements by these cautionary statements. Other sections of this transition report include additional factorswhich could adversely impact our business and financial performance. Moreover, we operate in an evolving environment. New risk factors and uncertainties emergefrom time to time and it is not possible for our management to predict all risk factors and uncertainties, nor can we assess the impact of all factors on our business orthe extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forwardlooking statements.This transition report also contains estimates, projections and statistical data related to the market for the provision of WiFi and mobile applications inChina. This market data, including data from IDC, a leading provider of market data and intelligence, speaks as of the date it was published and includes projectionsthat are based on a number of assumptions and are not representations of fact. The market for the provision of WiFi and mobile applications in China may not growat the rates projected by the market data, or at all. The failure of the market to grow at the projected rates may materially and adversely affect our business and themarket price of our ADSs. In addition, the rapidly changing nature of the market for the provision of WiFi and mobile applications subjects any projections orestimates relating to the growth prospects or future condition of our market to significant uncertainties. If any one or more of the assumptions underlying the marketdata proves to be incorrect, actual results may differ from the projections based on these assumptions.You should not rely upon forwardlooking statements as predictions of future events. We undertake no obligation to update or revise any forwardlookingstatements, whether as a result of new information, future events or otherwise.TABLE OF CONTENTSPart IItem 1.Identity of Directors, Senior Management and Advisers.1Item 2.Offer Statistics and Expected Timetable.1Item 3.Key Information.1A.Selected Financial Data.1B.Capitalization and Indebtedness.3C.Reasons for the Offer and Use of Proceeds.3D.Risk Factors.3Item 4.Information on the Company.19A.History and Development of the Company.19B.Business Overview.20C.Organizational Structure.30D.Property, Plants and Equipment.32Item 4A.Unresolved Staff Comments.32Item 5.Operating and Financial Review and Prospects.32A.Operating Results.32B.Liquidity and Capital Resources.35C.Research and Development, Patents and Licenses, etc.35D.Trend Information.35E.Offbalance Sheet Arrangements.35F.Tabular Disclosure of Contractual Obligations.36Item 6.Directors, Senior Management and Employees.36A.Directors and Senior Management.36B.Compensation.37C.Board Practices.40D.Employees.43E.Share Ownership.43Item 7.Major Shareholders and Related Party Transactions.44A.Major Shareholders.44B.Related Party Transactions.45C.Interests of Experts and Counsel.45Item 8.Financial Information.45A.Consolidated Statements and Other Financial Information.45B.Significant Changes.46Item 9.The Offer and Listing.46A.Offer and Listing Details.46B.Plan of Distribution.47C.Markets.47D.Selling shareholders.48E.Dilution.48F.Expenses of the issue.48Item 10.Additional Information.48A.Share Capital.48B.Memorandum and Articles of Association.48C.Material Contracts.53D.Exchange Controls.54E.Taxation.61F.Dividends and Paying Agents.67G.Statement by Experts.67H.Documents on Display.67I.Subsidiary Information.68Item 11.Quantitative and Qualitative Disclosures about Market Risk.68Item 12.Description of Securities Other than Equity Securities.69A.Debt Securities.69B.Warrants and Rights.69C.Other Securities.69D.American Depositary Shares.69iPart IIItem 13.Defaults, Dividend Arrearages and Delinquencies.71Item 14.Material Modifications to the Rights of Security Holders and Use of Proceeds.71Item 15.Controls and Procedures.71Item 16.[Reserved.]72Item 16A.Audit Committee Financial Expert.72Item 16B.Code of Ethics.73Item 16C.Principal Accountant Fees and Services.73Item 16D.Exemptions from the Listing Standards for Audit Committees.73Item 16E.Purchases of Equity Securities by the Issuer and Affiliated Purchasers.73Item 16F.Change in Registrant’s Certifying Accountant.73Item 16G.Corporate Governance.73Item 16H.Mine Safety Disclosure.73Part IIIItem 17.Financial Statements.74Item 18.Financial Statements.74Item 19.Exhibits.74Index to Consolidated Financial StatementsF1iiPART IITEM 1. IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS.The directors of Luokung Technology Corp. are Xuesong Song, Kegang Peng, Dennis Galgano, Jin Shi, Jiming Ha, Zhihao Xu and Chuang Tao. Thebusiness address for our directors is LAB 32, SOHO 3Q, No 9, Guanghua Road, Chaoyang District, Beijing, People’s Republic of China.Moore Stephens CPA Limited has served as our auditor since October 5, 2018, and is located at 801806 Silvercord Tower 1, 30 Canton road, Tsimshatsui,Kowloon, Hong Kong. BDO China Shun Lun Pan Certified Public Accountants LLP served as our auditors for the last three years, and are located at 4F, No. 61Nanjing Road, Shanghai, People’s Republic of China.Garvey Schubert Barer, P.C., serves as our legal counsel in the United States, and is located at Flour Mill Building, 1000 Potomac Street NW, Suite 200,Washington, D.C., 200073501.Conyers Dill & Pearlman serves as our legal counsel with regard to the laws of the British Virgin Islands, and is located at 29th Floor, One Exchange Square,8 Connaught Place, Central, Hong Kong.ITEM 2. OFFER STATISTICS AND EXPECTED TIMETABLE.Not applicable.ITEM 3. KEY INFORMATION.A. SELECTED FINANCIAL DATA.Luokung Technology Corp. and its consolidated subsidiaries (“Luokung Technology”, “we”, “us”, or “the Company”) consummated an asset exchangeagreement pursuant to which we exchanged our existing assets with those of C Media Limited (the “Asset Exchange”) on August 17, 2018, and we changed ourname from Kingtone Wirelessinfo Solution Holding Ltd. to our current name on August 20, 2018. On October 4, 2018, in connection with the consummation of the Asset Exchange, we changed our fiscal year end from September 30 to December 31.1The selected financial data for the fiscal years ended December 31 2017 and 2016 have been derived from our audited consolidated and combined financialstatements. The selected consolidated and combined financial data should be read in conjunction with our audited financial statements and the accompanying notesand “Item 5 – Operating and Financial Review and Prospects.” Our consolidated and combined financial statements are prepared and presented in accordance withUnited States generally accepted accounting principles, or U.S. GAAP. Our historical results do not necessarily indicate our results expected for any future periods.You should not view our historical results as an indicator of our future performance.LK TECHNOLOGY LTD. AND SUBSIDIARIESSELECTED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS(IN U.S. DOLLARS)For the years ended December 31,20172016Revenues$26,082,417$5,233,145Less: Cost of revenues5,547,7796,315,504Less: Operating expenses:Selling and marketing23,908,7336,209,804General and administrative2,451,2492,108,854Research and development1,046,1982,882,202Total operating expenses27,406,18011,200,860Loss from operations(6,871,542)(12,283,219)Other income (expense):Interest expense(26,611)(4,412)Foreign exchange gains(losses)350,679(298,257)Loss from investment(428,571)Other income (expense), net(262,980)(34,572)Total other income (expense), net61,088(765,812)Loss before income taxes(6,810,454)(13,049,031)Income taxesNet loss$(6,810,454)$(13,049,031)Other comprehensive income:Foreign currency translation adjustment90,671387,375Total comprehensive loss$(6,719,783)$(12,661,656)2LK TECHNOLOGY LTD. AND SUBSIDIARIESSELECTED CONSOLIDATED BALANCE SHEETS(IN U.S. DOLLARS)As of December 31,20172016Accounts receivable, net of allowance for doubtful accounts9,729,6251,865,836Amounts due from related parties11,760,692Property and equipment, net5,044,8727,771,027Goodwill7,239,9367,239,936TOTAL ASSETS37,582,85821,114,832Accounts payable8,784,5186,446,584Accrued liabilities and other payables12,962,91211,329,613Total liabilities25,311,11333,905,520Total Shareholder’s Equity (Deficit)12,271,745(12,790,688)TOTAL LIABILITIES AND SHAREHOLDER’S EQUITY (DEFICIT)37,582,85821,114,832B. CAPITALIZATION AND INDEBTEDNESS.Not applicable.C. REASONS FOR THE OFFER AND USE OF PROCEEDS.Not applicable.D. RISK FACTORS.An investment in our ADSs and ordinary shares involves a high degree of risk. You should carefully consider the risks and uncertainties described belowtogether with all other information contained in this transition report, including the matters discussed under “Special Note Regarding ForwardLooking Statements,”before you decide to invest in our ADSs or ordinary shares. You should pay particular attention to the fact that we are a holding company with substantialoperations in China and are subject to legal and regulatory environments that in many respects differ from those of the United States. If any of the following risks, orany other risks and uncertainties that are not presently foreseeable to us, actually occur, our business, financial condition, results of operations, liquidity and ourfuture growth prospects would be materially and adversely affected. You should also consider all other information contained in this transition report beforedeciding to invest in our ADSs or ordinary shares.Risks Related to Our Company and Our IndustryThe Company had incurred negative cash flows from operating activities and net losses as of December 31, 2017. These matters raise substantial doubt aboutthe Company’s ability to continue as a going concern.The Company’s consolidated financial statements are prepared using generally accepted accounting principles in the United States of America applicableto a going concern, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. As of and for the year endedDecember 31, 2017, the Company had incurred significant operating losses and working capital deficit. The ability of the Company to continue as a going concern isdependent on the Company obtaining adequate capital to fund operating losses until it becomes profitable. If the Company is unable to obtain adequate capital, itcould be forced to cease operations. The accompanying consolidated financial statements do not include any adjustments that might be necessary if the Companyis unable to continue as a going concern.3We may undertake acquisitions, investments, joint ventures or other strategic alliances, which could have a material adverse effect on our ability to manageour business. In addition, such undertakings may not be successful.Our strategy includes plans to grow both organically and through acquisitions, participation in joint ventures or other strategic alliances. Joint venturesand strategic alliances may expose us to new operational, regulatory and market risks, as well as risks associated with additional capital requirements. We may not beable, however, to identify suitable future acquisition candidates or alliance partners. Even if we identify suitable candidates or partners, we may be unable tocomplete an acquisition or alliance on terms commercially acceptable to us. If we fail to identify appropriate candidates or partners, or complete desired acquisitions,we may not be able to implement our strategies effectively or efficiently. In addition, our ability to successfully integrate acquired companies and their operations may be adversely affected by several factors. These factorsinclude:1.diversion of management’s attention;2.difficulties in retaining customers of the acquired companies;3.difficulties in retaining personnel of the acquired companies;4.entry into unfamiliar markets;5.unanticipated problems or legal liabilities; and6.tax and accounting issues.If we fail to integrate acquired companies efficiently, our earnings, revenue growth and business could be negatively affected.Due to intense competition for highlyskilled personnel, we may fail to attract and retain enough sufficiently trained employees to support our operations; ourability to bid for and obtain new projects may be negatively affected and our revenues could decline as a result.The IT industry relies on skilled employees, and our success depends to a significant extent on our ability to attract, hire, train and retain qualifiedemployees. There is significant competition in China for professionals with the skills necessary to develop the products and perform the services we offer to ourcustomers. Increased competition for these professionals, in the mobile application design area or otherwise, could have an adverse effect on us if we experiencesignificant increase in the attrition rate among employees with specialized skills, which could decrease our operating efficiency and productivity and could lead to adecline in demand for our services.In addition, our ability to serve existing customers and business partners and obtain new business will depend, in large part, on our ability to attract, trainand retain skilled personnel that enable us to keep pace with growing demands for wifi connectivity and mobile applications, evolving industry standards andchanging customer preferences. Our failure to attract, train and retain personnel with the qualifications necessary to fulfill the needs of our existing and futurecustomers or to assimilate new employees successfully could have a material adverse effect on our business, financial condition and results of operations. Ourfailure to retain our key personnel on business development or find suitable replacements of the key personnel upon their departure may lead to shrinking newimplementation projects, which could materially adversely affect our business.4Our business depends substantially on the continuing efforts of our senior executives and other key personnel, and our business may be severely disrupted if welose their services.Our future success heavily depends upon the continued services of our senior executives and other key employees, particularly since we recentlyappointed a new chairman. We are reliant on the services of Mr. Xuesong Song, our chairman, chief executive officer and member of our board of directors. If one ormore of our senior executives or key employees is unable or unwilling to continue in his or her present position, we may not be able to replace such employee easily,or at all, we may incur additional expenses to recruit, train and retain replacement personnel, our business may be severely disrupted, and our financial condition andresults of operations may be materially adversely affected.Our business could suffer if our executives and directors compete against us and our noncompetition agreements with them cannot be enforced.If any of our senior executives or key employees joins a competitor or forms a competing company, we may lose customers, knowhow and keyprofessionals and staff members to them. Also, if any of our business development managers who keep a close relationship with our customers and businesspartners joins a competitor or forms a competing company, we may lose customers, and our revenues may be materially adversely affected. Most of our executiveshave entered, or will soon enter, into employment agreements with us that contain or will contain noncompetition provisions. However, if any dispute arisesbetween our executive officers and us, such noncompetition provisions may not be enforceable, especially in China, where all of these executive officers and keyemployees reside, in light of the uncertainties with China’s legal system. See “Risk Factors — Risks Related to Doing Business in China — Uncertainties withrespect to the PRC legal system could adversely affect us.”Our computer networks may be vulnerable to security risks that could disrupt our services and adversely affect our results of operations.Our computer networks may be vulnerable to unauthorized access, computer hackers, computer viruses and other security problems caused byunauthorized access to, or improper use of, systems by third parties or employees. A hacker who circumvents security measures could misappropriate proprietaryinformation or cause interruptions or malfunctions in operations. Computer attacks or disruptions may jeopardize the security of information stored in andtransmitted through computer systems and mobile devices of our customers. Actual or perceived concerns that our systems may be vulnerable to such attacks ordisruptions may deter customers from using our services. As a result, we may be required to expend significant resources to protect against the threat of thesesecurity breaches or to alleviate problems caused by these breaches, which could adversely affect our results of operations.If we do not continually enhance our solutions and service offerings, we may have difficulty in retaining existing customers and attracting new customers.We believe that our future success will depend, to a significant extent, upon our ability to enhance our existing applications and platform, and to introducenew features to meet the preferences and requirements of our customers in a rapidly developing and evolving market. Unexpected technical, operational, distributionor other problems could delay or prevent the introduction of one or more of these products or services, or any products or services that we may plan to introduce inthe future. Our present or future products may not satisfy the evolving preferences and tastes of our customers, and these solutions and services may not achieveanticipated market acceptance or generate incremental revenue. If we are unable to anticipate or respond adequately to the need for service or productenhancements due to resource, technological or other constraints, our business, financial condition and results of operations could be materially and adverselyaffected.5If we are unable to develop competitive new products and service offerings our future results of operations could be adversely affected.Our future revenue stream depends to a large degree on our ability to utilize our technology in a way that will allow us to offer new types of mobileapplications and services to a broader customer base. We will be required to make investments in research and development in order to continually develop newsoftware applications and related service offerings, enhance our existing platform, mobile applications and related service offerings and achieve market acceptanceof our mobile applications and service offerings. We may incur problems in the future in innovating and introducing new mobile applications and service offerings.Our developmentstage mobile applications may not be successfully completed or, if developed, may not achieve significant customer acceptance. If we are unableto successfully define, develop and introduce competitive new mobile applications, and enhance existing mobile applications, our future results of operations wouldbe adversely affected. The timely availability of new applications and their acceptance by customers are important to our future success. A delay in the developmentof new applications could have a significant impact on its results of operations.Changes in technology could adversely affect our business by increasing our costs, reducing our profit margins and causing a decline in our competitiveness.China’s wireless telecom industry, in which we operate, is characterized by rapidly changing technology, evolving industry standards, frequentintroductions of new services and solutions and enhancements as well as changing customer demands. New solutions and new technologies often render existingsolutions and services obsolete, excessively costly or otherwise unmarketable. As a result, our success depends on our ability to adapt to the latest technologicalprogress, such as the 5G standard and technologies, and to develop or acquire and integrate new technologies into our platform, mobile applications and relatedservices. Advances in technology also require us to commit substantial resources to developing or acquiring and then deploying new technologies for use in ouroperations. We must continuously train personnel in new technologies and in how to integrate existing hardware and software systems with these newtechnologies. We may not be able to adapt quickly to new technologies or commit sufficient resources to compete successfully against existing or new competitorsin bringing to market solutions and services that incorporate these new technologies. We may incur problems in the future in innovating and introducing new mobileapplications and service offerings. Our development of new mobile applications and platform enhancements may not be successfully completed or, if developed,may not achieve significant customer acceptance. If we fail to adapt to changes in technologies and compete successfully against established or new competitors,our business, financial condition and results of operations could be adversely affected.Problems with the quality or performance of our hardware, software or other systems may cause delays in the introduction of new solutions or result in the lossof customers and revenues, which could have a material and adverse effect on our business, financial condition and results of operations.Our hardware and software systems are complex and may contain defects, errors or bugs when first introduced to the market or to a particular customer, oras new versions are released. Because we cannot test for all possible scenarios, our systems may contain errors that are not discovered until after they have beeninstalled or implemented, and we may not be able to timely correct these problems. These defects, errors or bugs could interrupt or delay the completion of projectsor sales to our customers. In addition, our reputation may be damaged and we may fail to acquire new projects from existing customers or new customers. Errors mayoccur when we provide systems integration and maintenance services. Even in cases where we have agreements with our customers that contain provisionsdesigned to limit our exposure to potential claims and liabilities arising from customer problems, these provisions may not effectively protect us against such claimsin all cases and in all jurisdictions. In addition, as a result of business and other considerations, we may undertake to compensate our customers for damages arisingfrom the use of our solutions, even if our liability is limited by these provisions. Moreover, claims and liabilities arising from customer problems could also result inadverse publicity and materially and adversely affect our business, results of operations and financial condition. We currently do not carry any product or serviceliability insurance and any imposition of liability on us may materially and adversely affect our business and increase our costs, resulting in reduced revenues andprofitability.Our products may contain undetected software defects, which could negatively affect our revenues.Our software products are complex and may contain undetected defects. Although we test our products, it is possible that errors may be found or occur inour new or existing products after we have commenced commercial shipment of those products. Defects, whether actual or perceived, could result in adversepublicity, loss of revenues, product returns, a delay in market acceptance of our products, loss of competitive position or claims against us by customers. Any suchproblems could be costly to remedy and could cause interruptions, delays, or cessation of our product sales, which could cause us to lose existing or prospectivecustomers and could negatively affect our results of operations.6We may be subject to infringement, misappropriation and indemnity claims in the future, which may cause us to incur significant expenses, pay substantialdamages and be prevented from providing our services or technologies.Our success depends, in part, on our ability to carry out our business without infringing the intellectual property rights of third parties. Patent andcopyright law covering softwarerelated technologies is evolving rapidly and is subject to a great deal of uncertainty. Our selfdeveloped or licensed technologies,processes or methods may be covered by thirdparty patents or copyrights, either now existing or to be issued in the future. Any potential litigation may cause us toincur significant expenses. Thirdparty claims, if successfully asserted against us may cause us to pay substantial damages, seek licenses from third parties, payongoing royalties, redesign our services or technologies, or prevent us from providing services or technologies subject to these claims. Even if we were to prevail,any litigation would likely be costly and timeconsuming and divert the attention of our management and key personnel from our business operations.Our failure to protect our intellectual property rights may undermine our competitive position, and subject us to costly litigation to protect our intellectualproperty rights.Any misappropriation of our technology or the development of competitive technology could seriously harm our business. We regard a substantial portionof our hardware and software systems as proprietary and rely on statutory copyright, trademark, patent, trade secret laws, customer license agreements, employeeand thirdparty nondisclosure agreements and other methods to protect our proprietary rights. Nevertheless, these resources afford only limited protection and theactions we take to protect our intellectual property rights may not be adequate. In particular, third parties may infringe or misappropriate our proprietarytechnologies or other intellectual property rights, which could have a material adverse effect on our business, financial condition and results of operations. Inaddition, intellectual property rights and confidentiality protection in China may not be as effective as in the United States, and policing unauthorized use ofproprietary technology can be difficult and expensive. Further, litigation may be necessary to enforce our intellectual property rights, protect our trade secrets ordetermine the validity and scope of the proprietary rights of others. The outcome of any such litigation may not be in our favor. Any such litigation may be costlyand may divert management attention, as well as our other resources, away from our business. An adverse determination in any such litigation will impair ourintellectual property rights and may harm our business, prospects and reputation. In addition, we have no insurance coverage against litigation costs and wouldhave to bear all litigation costs in excess of the amount recoverable from other parties. The occurrence of any of the foregoing could have a material adverse effecton our business, financial condition and results of operations. Our solutions incorporate a portion of, and work in conjunction with, thirdparty hardware and software solutions. If these thirdparty hardware or softwaresolutions are not available to us at reasonable costs, or at all, our results of operations could be adversely impacted.Although our hardware and software systems and mobile applications primarily rely on our own core technologies, some elements of our systemsincorporate a small portion of thirdparty hardware and software solutions. If any third party were to discontinue making their intellectual property available to us orour customers on a timely basis, or increase materially the cost of their licensing such intellectual property, or if our systems or applications failed to properlyfunction or interoperate with replacement intellectual property, we may need to incur costs in finding replacement thirdparty solutions and/or redesigning oursystems or applications to replace or function with or on replacement thirdparty proprietary technology. Replacement technology may not be available on termsacceptable to us or at all, and we may be unable to develop alternative solutions or redesign our systems or applications on a timely basis or at a reasonable cost. Ifany of these were to occur, our results of operations could be adversely impacted.7Our ability to sell our products is highly dependent on the quality of our service and support offerings, and our failure to offer high quality service could have amaterial adverse effect on our ability to market and sell our products.Our customers depend upon our customer service and support staff to resolve issues relating to our products. Highquality support services are critical forthe successful marketing and sale of our products. If we fail to provide highquality support on an ongoing basis, our customers may react negatively and we maybe materially and adversely affected in our ability to sell additional products to these customers. This could also damage our reputation and prospects with potentialcustomers. Our failure to maintain highquality support services could have a material and adverse effect on our business, results of operations and financialcondition.Weaknesses in our internal controls over financial reporting or disclosure controls and procedures may have a material adverse effect on our business, theprice of our ordinary shares, operating results and financial condition.We are required to establish and maintain appropriate internal controls over financial reporting and disclosure controls and procedures. Pursuant to Section404 of the SarbanesOxley Act of 2002 and the related rules adopted by the Securities and Exchange Commission, every public company is required to include amanagement report on its internal controls over financial reporting in its transition report, which contains management’s assessment of the effectiveness of thecompany’s internal controls over financial reporting. This requirement first applied to our annual report on Form 20F for the fiscal year ended on September 30,2011. In connection with our assessments of our disclosure controls and procedures and internal controls over financial reporting, management concluded that as ofSeptember 30, 2018, our disclosure controls and procedures and our internal controls over financial reporting were not effective due to lack of U.S. generallyaccepted accounting principles (“U.S. GAAP”) expertise in our current accounting team. Please refer to the discussion under Item 15, “Controls and Procedures” forfurther discussion of our material weakness as of December 31, 2017. Should we be unable to remediate the material weakness promptly and effectively, suchweakness could harm our operating results, result in a material misstatement of our financial statements, cause us to fail to meet our financial reporting obligations orprevent us from providing reliable and accurate financial reports or avoiding or detecting fraud. This, in turn, could result in a loss of investor confidence in theaccuracy and completeness of our financial reports, which could have an adverse effect on the trading price of our ordinary shares. Any litigation or otherproceeding or adverse publicity relating to the material weaknesses could have a material adverse effect on our business and operating results. We have very limited insurance coverage which could expose us to significant costs and business disruption.We do not maintain any insurance coverage for our leased properties. Should any natural catastrophes such as earthquakes, floods, typhoons or any actsof terrorism occur in Beijing, China, where our head office is located and most of our employees are based, or elsewhere in China, we might suffer not onlysignificant property damages, but also loss of revenues due to interruptions in our business operations, which could have a material adverse effect on our business,operating results or financial condition.The insurance industry in China is still at an early stage of development. Insurance companies in China offer limited business insurance products, and donot, to our knowledge, offer business liability insurance. As a result, we do not have any business liability insurance coverage for our operations. Moreover, whilebusiness disruption insurance is available, we have determined that the risks of disruption and cost of the insurance are such that we do not require it at this time.Any business disruption, litigation or natural disaster might result in substantial costs and diversion of resources, particularly if it affects our technology platformswhich we depend on for delivery of our software and services, and could have a material adverse effect on our financial condition and results of operations.We may be liable to our customers for damages caused by unauthorized disclosure of sensitive and confidential information, whether through our employees orotherwise.We are typically required to manage, utilize and store sensitive or confidential customer data in connection with the products and services we provide.Under the terms of our customer contracts, we are required to keep such information strictly confidential. We seek to implement specific measures to protectsensitive and confidential customer data. We require our employees to enter into nondisclosure agreements to limit such employees’ access to, and distribution of,our customers’ sensitive and confidential information and our own trade secrets. We can give no assurance that the steps taken by us in this regard will be adequateto protect our customers’ confidential information. If our customers’ proprietary rights are misappropriated by our employees, in violation of any applicableconfidentiality agreements or otherwise, our customers may consider us liable for that act and seek damages and compensation from us. However, we currently donot have any insurance coverage for mismanagement or misappropriation of such information by our employees. Any litigation with respect to unauthorizeddisclosure of sensitive and confidential information might result in substantial costs and diversion of resources and management attention.8We may face intellectual property infringement claims that could be timeconsuming and costly to defend. If we fail to defend ourselves against such claims, wemay lose significant intellectual property rights and may be unable to continue providing our existing products and services.It is critical that we use and develop our technology and products without infringing upon the intellectual property rights of third parties, includingpatents, copyrights, trade secrets and trademarks. Intellectual property litigation is expensive and timeconsuming and could divert management’s attention from ourbusiness. A successful infringement claim against us, whether with or without merit, could, among others things, require us to pay substantial damages, developnoninfringing technology, or rebrand our name or enter into royalty or license agreements that may not be available on acceptable terms, if at all, and cease making,licensing or using products that have infringed a third party’s intellectual property rights. Protracted litigation could also result in existing or potential customersdeferring or limiting their purchase or use of our products until resolution of such litigation, or could require us to indemnify our customers against infringementclaims in certain instances. Also, we may be unaware of intellectual property registrations or applications relating to our services that may give rise to potentialinfringement claims against us. Parties making infringement claims may be able to obtain an injunction to prevent us from delivering our services or usingtechnology containing the allegedly infringing intellectual property. Any intellectual property litigation could have a material adverse effect on our business, resultsof operations or financial condition. Seasonality and fluctuations in our customers’ spending cycle and other factors can cause our revenues and operating results to vary significantly from quarterto quarter and from year to year.Our revenues and operating results will vary significantly from quarter to quarter and from year to year due to a number of factors, many of which areoutside of our control. Our new lines of business acquired upon the consummation of the asset exchange transaction discussed below see higher customer use andactivity during the Chinese New Year holiday than other times during the year when rail travel is high, which lead to higher revenue during this period as morecustomers would like to place more advertising. Due to these and other factors, our operating results may fluctuate significantly from quarter to quarter and fromyear to year. These fluctuations are likely to continue in the future, and operating results for any period may not be indicative of our future performance in any futureperiod.Our corporate actions are substantially controlled by our principal shareholders, who can cause us to take actions in ways you may not agree with.Mr. Xuesong Song, our chairman, chief executive officer and a member of our board of directors, beneficially owns 19.31% of our outstanding ordinaryshares and 1,000,000 preferred shares, and each preferred share has the right to 399 votes at a meeting of the members of the Company. Our officers and directors asa group beneficially own an aggregate of approximately 33.69% of our outstanding ordinary shares. These shareholders, acting individually or as a group, couldexert control and substantial influence over matters such as electing directors, amending our constitutional documents, and approving acquisitions, mergers or otherbusiness combination transactions. This concentration of ownership and voting power may also discourage, delay or prevent a change in control of our company,which could deprive our shareholders of an opportunity to receive a premium for their shares as part of a sale of our company and might reduce the price of ourshares. Alternatively, our controlling shareholders may cause a merger, consolidation or change of control transaction even if it is opposed by our othershareholders, including those who purchase shares in this offering.9We depend on a small number of customers to derive a significant portion of our revenues. If we were to become dependent again upon a few customers, suchdependency could negatively impact our business, operating results and financial condition.We derived a material portion of our revenues from a small number of customers. In the years ended December 31, 2017 and 2016, our five largestcustomers accounted for 99.8% and 78.5% of our total sales, respectively, and our largest customer Guangdong Zhanshi Media Advertising Co., Ltd. accounted forapproximately 80.8% of our total sales during for the fiscal year ended December 31, 2017. As our customer base may change from yeartoyear, during such yearsthat the customer base is highly concentrated, the fluctuation of our sales to any of such major customers could have a material adverse effect on our business,operating results and financial condition. Moreover, our high customer base concentration may also adversely affect our ability to negotiate contract prices withthese customers, which may in turn materially and adversely affect our results of operations.Our historical outstanding accounts receivable have been relatively high. Inability to collect our accounts receivable on a timely basis, if at all, couldmaterially and adversely affect our financial condition, liquidity and results of operations.Historically, our outstanding accounts receivable have been relatively high. As of December 31, 2017 and 2016, our outstanding accounts receivable beforeimpairment were $10.4 million and $2.10 million, respectively. Although we conduct credit evaluations of our customers, we generally do not require collateral orother security from our customers. In addition, we have had a relatively high customer concentration. The outstanding accounts receivable balance for our largestcustomer was 45.3% and 38.5% of our total accounts receivable balance as of December 31, 2017 and 2016, respectively. As a result, an extended delay or default inpayment relating to a significant account would likely have a material and adverse effect on the aging schedule and turnover days of our accounts receivable. Ourinability to collect our accounts receivable on a timely basis, if at all, could materially and adversely affect our financial condition, liquidity and results of operations.Risks Related to Doing Business in ChinaAdverse changes in political and economic policies of the PRC government could have a material adverse effect on the overall economic growth of China,which could reduce the demand for our services and materially and adversely affect our competitive position.Substantially all of our business operations are conducted in China. Accordingly, our business, results of operations, financial condition and prospects aresubject to a significant degree to economic, political and legal developments in China. Although the Chinese economy is no longer a planned economy, the PRCgovernment continues to exercise significant control over China’s economic growth through direct allocation of resources, monetary and tax policies, and a host ofother government policies such as those that encourage or restrict investment in certain industries by foreign investors, control the exchange between RMB andforeign currencies, and regulate the growth of the general or specific market. These government involvements have been instrumental in China’s significant growthin the past 30 years. The reorganization of the telecommunications industry encouraged by the PRC government has directly affected our industry and our growthprospect. In response to the recent global and Chinese economic downturn, the PRC government has adopted policy measures aimed at stimulating the economicgrowth in China. If the PRC government’s current or future policies fail to help the Chinese economy achieve further growth or if any aspect of the PRCgovernment’s policies limits the growth of the telecommunications industry in China or our industry or otherwise negatively affects our business, our growth rate orstrategy, our results of operations could be adversely affected as a result. Our business benefits from certain government tax incentives. Expiration, reduction or discontinuation of, or changes to, these incentives will increase our taxburden and reduce our net income.Under the PRC Enterprise Income Tax Law passed in 2007 and the implementing rules, both of which became effective on January 1, 2008, or the New EITLaw, a unified enterprise income tax rate of 25% and unified tax deduction standard is applied equally to both domesticinvested enterprises and foreigninvestedenterprises, or FIEs. Enterprises established prior to March 16, 2007 eligible for preferential tax treatment in accordance with the then tax laws and administrativeregulations shall gradually become subject to the New EIT Law rate over a fiveyear transition period starting from the date of effectiveness of the New EIT Law.However, certain qualifying hightechnology enterprises may still benefit from a preferential tax rate of 15% if they own their core intellectual properties and they areenterprises in certain Statesupported hightech industries to be later specified by the government. As a result, if our PRC subsidiaries qualify as “hightechnologyenterprises,” they will continue to benefit from the preferential tax rate of 15%, subject to transitional rules implemented from January 1, 2008. Our subsidiary, BeijingZhong Chuan Shi Xun Technology Limited, is qualified as a “hightechnology enterprise” until the end of the November 2018, and therefore it had benefited fromthe preferential tax rate of 15%, subject to transitional rules implemented on January 1, 2008. Although we intend to apply for a renewal of this qualification, if BeijingZhong Chuan Shi Xun ceases to qualify as a “hightechnology enterprise”, or the tax authorities change their position on our preferential tax treatments in thefuture, our future tax liabilities may materially increase, which could materially and adversely affect our financial condition and results of operations.10If we were deemed a “resident enterprise” by PRC tax authorities, we could be subject to tax on our global income at the rate of 25% under the New EIT Lawand our nonPRC shareholders could be subject to certain PRC taxes.Under the New EIT Law and the implementing rules, both of which became effective January 1, 2008, an enterprise established outside of the PRC with “defacto management bodies” within the PRC may be considered a PRC “resident enterprise” and will be subject to the enterprise income tax at the rate of 25% on itsglobal income as well as PRC enterprise income tax reporting obligations. The implementing rules of the New EIT Law define “de facto management” as “substantialand overall management and control over the production and operations, personnel, accounting, and properties” of the enterprise. However, as of the date of thistransition report, no final interpretations on the implementation of the “resident enterprise” designation are available. Moreover, any such designation, when madeby PRC tax authorities, will be determined based on the facts and circumstances of individual cases. Therefore, if we were to be considered a “resident enterprise”by the PRC tax authorities, our global income would be taxable under the New EIT Law at the rate of 25% and, to the extent we were to generate a substantial amountof income outside of PRC in the future, we would be subject to additional taxes. In addition, the dividends we pay to our nonPRC enterprise shareholders and gainsderived by such shareholders or ADS or ordinary share holders from the transfer of our shares or ADSs may also be subject to PRC withholding tax at the rate up to10%, if such income were regarded as Chinasourced income.Our holding company structure may limit the payment of dividends.We have no direct business operations, other than our ownership of our subsidiaries. While we have no current intention of paying dividends, should wedecide in the future to do so, as a holding company, our ability to pay dividends and meet other obligations depends upon the receipt of dividends or otherpayments from our operating subsidiaries and other holdings and investments. Current PRC regulations permit our PRC subsidiaries to pay dividends to us only outof their accumulated profits, if any, determined in accordance with Chinese accounting standards and regulations. In addition, each of our subsidiaries in China isrequired to set aside at least 10% of its aftertax profits each year, if any, to fund a statutory reserve until such reserve reaches 50% of its registered capital. Thesereserves are not distributable as cash dividends. Furthermore, if our subsidiaries in China incur debt on their own behalf in the future, the instruments governing thedebt may restrict their ability to pay dividends or make other payments to us. As a result, there may be limitations on the ability of our PRC subsidiaries to paydividends or make other investments or acquisitions that could be beneficial to our business or otherwise fund and conduct our business.In addition, under the New EIT Law and the implementing rules that became effective on January 1, 2008, dividends generated from the business of our PRCsubsidiaries after January 1, 2008 and payable to us may be subject to a withholding tax rate of 10% if the PRC tax authorities subsequently determine that we are anonresident enterprise, unless there is a tax treaty with China that provides for a different withholding arrangement.Uncertainties with respect to the PRC legal system could adversely affect us.We conduct all of our business through our subsidiaries in China. Our operations in China are governed by PRC laws and regulations. Our PRCsubsidiaries are generally subject to laws and regulations applicable to foreign investments in China and, in particular, laws and regulations applicable to whollyforeignowned enterprises. The PRC legal system is based on statutes. Prior court decisions may be cited for reference but have limited precedential value.11Since 1979, PRC legislation and regulations have significantly enhanced the protections afforded to various forms of foreign investments in China.However, China has not developed a fully integrated legal system and recently enacted laws and regulations may not sufficiently cover all aspects of economicactivities in China. In particular, because these laws and regulations are relatively new, and because of the limited volume of published decisions and theirnonbinding nature, the interpretation and enforcement of these laws and regulations involve uncertainties. In addition, the PRC legal system is based in part ongovernment policies and internal rules (some of which are not published on a timely basis or at all) that may have a retroactive effect. As a result, we may not beaware of our violation of these policies and rules until some time after the violation. In addition, any litigation in China may be protracted and result in substantialcosts and diversion of resources and management attention.PRC regulation of loans and direct investment by offshore holding companies to PRC entities may delay or prevent us from using the proceeds of our May2010 public offering to make loans or additional capital contributions to our PRC operating subsidiaries, which could materially and adversely affect ourliquidity and our ability to fund and expand our business.In utilizing the proceeds of our May 2010 public offering as an offshore holding company of our PRC operating subsidiaries, we may make loans to our PRCsubsidiaries, or we may make additional capital contributions to our PRC subsidiaries. Any loans to our PRC subsidiaries are subject to PRC regulations. Forexample, loans by us to our subsidiaries in China, which are FIEs, to finance their activities cannot exceed statutory limits and must be registered with the StateAdministration of Foreign Exchange, or SAFE. On August 29, 2008, SAFE promulgated Circular 142, a notice regulating the conversion by a foreigninvestedcompany of foreign currency into RMB by restricting how the converted RMB may be used. The notice requires that RMB converted from the foreign currencydenominated capital of a foreigninvested company may only be used for purposes within the business scope approved by the applicable governmental authorityand may not be used for equity investments within the PRC unless specifically provided for otherwise. The foreign currencydenominated capital shall be verified byan accounting firm before converting into RMB. In addition, SAFE strengthened its oversight over the flow and use of RMB funds converted from the foreigncurrencydenominated capital of a foreigninvested company. To convert such capital into RMB, the foreigninvested company must report the use of such RMB tothe bank, and the RMB must be used to the reported purposes. According to Circular 142, change of the use of such RMB without approval is prohibited. Inaddition, such RMB may not be used to repay RMB loans if the proceeds of such loans have not yet been used. Violations of Circular 142 may result in severepenalties, including substantial fines as set forth in the Foreign Exchange Administration Rules.We may also decide to finance our subsidiaries by means of capital contributions. These capital contributions may need approval from the PRC Ministry ofCommerce, or MOFCOM, or its local counterpart. We may not be able to obtain these government approvals on a timely basis, if at all, with respect to future capitalcontributions by us to our PRC subsidiaries. If we fail to receive such approvals in such cases when approval is required, our ability to use the proceeds of our May2010 public offering and to capitalize our PRC operations may be negatively affected, which could adversely affect our liquidity and our ability to fund and expandour business.Governmental control of currency conversion may affect the value of your investment.The PRC government imposes controls on the convertibility of the RMB into foreign currencies and, in certain cases, the remittance of currency out ofChina. We receive substantially all of our revenues in RMB. Under our current corporate structure, our income is primarily derived from dividend payments from ourPRC subsidiaries. Shortages in the availability of foreign currency may restrict the ability of our PRC subsidiaries to remit sufficient foreign currency to paydividends or other payments to us, or otherwise satisfy their foreign currency denominated obligations. Under existing PRC foreign exchange regulations, paymentsof current account items, including profit distributions, interest payments and expenditures from traderelated transactions, can be made in foreign currencieswithout prior approval from SAFE by complying with certain procedural requirements. However, approval from appropriate government authorities is required whereRMB is to be converted into foreign currency and remitted out of China to pay capital expenses such as the repayment of loans denominated in foreign currencies.The PRC government may also at its discretion restrict access in the future to foreign currencies for current account transactions. If the foreign exchange controlsystem prevents us from obtaining sufficient foreign currency to satisfy our currency demands, we may not be able to pay dividends in foreign currencies to ourshareholders, including holders of our ADSs or ordinary shares.12Fluctuation in the value of the RMB may have a material adverse effect on the value of your investment.The value of the RMB against the U.S. dollar and other currencies may fluctuate and is affected by, among other things, changes in political and economicconditions. On July 21, 2005, the PRC government changed its decadeold policy of pegging the value of the RMB to the U.S. dollar. Under the new policy, the RMBis permitted to fluctuate within a narrow and managed band against a basket of certain foreign currencies. This change in policy has resulted in an approximate26.8% appreciation of the RMB against the U.S. dollar between July 21, 2005 and September 30, 2015. Provisions on Administration of Foreign Exchange, asamended in August 2008, further changed China’s exchange regime to a managed floating exchange rate regime based on market supply and demand. Since reachinga high against the U.S. dollar in July 2008, however, the RMB has traded within a narrow band against the U.S. dollar, remaining within 1% of its July 2008 high butnever exceeding it. As a consequence, the RMB has fluctuated sharply since July 2008 against other freelytraded currencies, in tandem with the U.S. dollar. InAugust 2015, the PRC Government devalued its currency by approximately 3%, representing the largest yuan depreciation for 20 years. Concerns remain thatChina’s slowing economy, and in particular its exports, will need a stimulus that can only come from further cuts in the exchange rate.It is difficult to predict how long the current situation may continue and when and how it may change again as the People’s Bank of China may regularlyintervene in the foreign exchange market to achieve economic policy goals. Substantially all of our revenues and costs are denominated in the RMB, and asignificant portion of our financial assets are also denominated in RMB. We principally rely on dividends and other distributions paid to us by our subsidiaries inChina. Any significant revaluation of the RMB may materially and adversely affect our cash flows, revenues, earnings and financial position, and the value of, andany dividends payable on, our ADSs or ordinary shares in U.S. dollars. Any fluctuations of the exchange rate between the RMB and the U.S. dollar could also resultin foreign currency translation losses for financial reporting purposes.PRC laws and regulations governing our businesses. If we are found to be in violation of such PRC laws and regulations, we could be subject to sanctions. Inaddition, changes in such PRC laws and regulations may materially and adversely affect our business.There are substantial uncertainties regarding the interpretation and application of PRC laws and regulations, including, but not limited to, the laws andregulations governing our business. These laws and regulations are relatively new and may be subject to change, and their official interpretation and enforcementmay involve substantial uncertainty. The effectiveness of newly enacted laws, regulations or amendments may be delayed, resulting in detrimental reliance byforeign investors. New laws and regulations that affect existing and proposed future businesses may also be applied retroactively.The PRC government has broad discretion in dealing with violations of laws and regulations, including levying fines, revoking business and other licensesand requiring actions necessary for compliance. In particular, licenses and permits issued or granted to us by relevant governmental bodies may be revoked at a latertime by higher regulatory bodies. We cannot predict the effect of the interpretation of existing or new PRC laws or regulations on our businesses. We cannot assureyou that our current ownership and operating structure would not be found in violation of any current or future PRC laws or regulations. As a result, we may besubject to sanctions, including fines, and could be required to restructure our operations or cease to provide certain services. In addition, any litigation in China maybe protracted and result in substantial costs and diversion of resources and management attention. Any of these or similar actions could significantly disrupt ourbusiness operations or restrict us from conducting a substantial portion of our business operations, which could materially and adversely affect our business,financial condition and results of operations.13If we were required to obtain the prior approval of the China Securities Regulatory Commission, or CSRC, of the listing and trading of our ADSs on theNASDAQ Capital Market, we may face regulatory actions or other sanctions from the CSRC or other PRC regulatory agencies.On August 8, 2006, six PRC regulatory agencies, including the Ministry of Commerce, the State Assets Supervision and Administration Commission, theState Administration for Taxation, the State Administration for Industry and Commerce, the CSRC and the SAFE, jointly issued the Regulations on Mergers andAcquisitions of Domestic Enterprises by Foreign Investors, which became effective on September 8, 2006 (the “New M&A Rules”). This regulation, among otherthings, includes provisions that purport to require that an offshore special purpose vehicle formed for the purposes of overseas listing of equity interests in PRCcompanies and controlled directly or indirectly by PRC companies or individuals obtain the approval of the CSRC prior to the listing and trading of such specialpurpose vehicle’s securities on an overseas stock exchange. On September 21, 2006, the CSRC published on its official website procedures regarding its approval ofoverseas listings by special purpose vehicles. The CSRC approval procedures require the filing of a number of documents with the CSRC and it would take severalmonths to complete the approval process, if practicable at all. The application of this new PRC regulation remains unclear with no consensus currently existingamong leading PRC law firms regarding the scope of the applicability of the CSRC approval requirement. Prior to our May 2010 initial public offering, our PRC counsel has advised us that, based on its understanding of the current PRC laws and regulations aswell as the procedures announced on September 21, 2006: (i) Softech was directly incorporated by Topsky as a foreign investment enterprise under PRC law;therefore, there was no acquisition of the equity of a “PRC domestic company” as defined under the New M&A Rules; and (ii) the contractual arrangementsbetween Kingtone Information and Softech were not clearly defined and considered as the transaction which shall be applied to the New M&A Rules. Therefore, wedid not seek prior CSRC approval for our initial public offering.However, if the CSRC required that we obtain its approval prior to the completion of our initial public offering and the listing of our ADSs on the NASDAQCapital Market, we may face regulatory actions or other sanctions from the CSRC or other PRC regulatory agencies. These regulatory agencies may impose fines andpenalties on our operations in the PRC, limit our operating privileges in the PRC, delay or restrict the repatriation of the proceeds from our initial public offering intothe PRC, or take other actions that could have a material adverse effect on our business, financial condition, results of operations, reputation and prospects, as wellas the trading price of our shares.Also, if the CSRC requires that we obtain its approval, we may be unable to obtain a waiver of the CSRC approval requirements if and when procedures areestablished to obtain such a waiver. Any uncertainties and/or negative publicity regarding this CSRC approval requirement could have a material adverse effect onthe trading price of our shares.PRC regulations relating to the establishment of offshore special purpose companies by PRC residents may subject our PRC resident shareholders to penaltiesand limit our ability to inject capital into our PRC subsidiaries, limit our PRC subsidiaries’ ability to distribute profits to us, or otherwise adversely affect us.On October 21, 2005, the SAFE issued the Notice on Issues Relating to the Administration of Foreign Exchange in Fundraising and Reverse InvestmentActivities of Domestic Residents Conducted via Offshore Special Purpose Companies, or Notice 75, which became effective as of November 1, 2005. According toNotice 75, prior registration with the local SAFE branch is required for PRC residents to establish or to control an offshore company for the purposes of financingsuch offshore company with assets or equity interests in an onshore enterprise located in the PRC, or an offshore special purpose company. An amendment toregistration or filing with the local SAFE branch by such PRC resident is also required for the injection of equity interests or assets of an onshore enterprise in theoffshore special purpose company or overseas funds raised by such offshore company, or any other material change involving a change in the capital of theoffshore special purpose company. Moreover, Notice 75 applies retroactively. As a result, PRC residents who have established or acquired control of offshorespecial purpose companies that have made onshore investments in the PRC in the past are required to have completed the relevant registration procedures with thelocal SAFE branch by March 31, 2006. To further clarify the implementation of Notice 75, the SAFE issued Circular 106 on May 29, 2007. Under Circular 106, PRCsubsidiaries of an offshore special purpose company are required to coordinate and supervise the filing of SAFE registrations by the offshore holding company’sshareholders or beneficial owners who are PRC residents in a timely manner.14Some of our current shareholders and/or beneficial owners may fall within the ambit of the SAFE notice and be required to register with the local SAFEbranch as required under the SAFE notice. If so required, and if such shareholders and/or beneficial owners fail to timely register their SAFE registrations pursuantto the SAFE notice, or if future shareholders and/or beneficial owners of our company who are PRC residents fail to comply with the registration procedures setforth in the SAFE notice, this may subject such shareholders, beneficial owners and/or our PRC subsidiaries to fines and legal sanctions and may also limit ourability to contribute additional capital into our PRC subsidiaries, limit our PRC subsidiaries’ ability to distribute dividends to our company, or otherwise adverselyaffect our business.Risks Associated with our ADSs and Ordinary SharesOur securities are not currently traded on any United States public markets and you may not be able to resell your securities for some time.There is currently no public market for our ordinary shares or American Depository Shares (“ADSs”) in the United States or in any other jurisdiction. OurADSs were voluntarily delisted from the NASDAQ Capital Market on September 19, 2018. We have applied to NASDAQ for the listing of our ordinary shares on theNASDAQ Capital Market and received an approval for listing of Ordinary Shares on August 6, 2018, and as of the date of this transition report, that application andapproval are currently under review. We cannot assume that our ordinary shares will be accepted for listing on the NASDAQ Capital Market, or if listed, that wewould continue to meet the applicable minimum listing requriements. You may not be able to sell your ordinary shares quickly or at all if we are unable to gain listingon a public market in the United States.The market price of our ADSs has historically been highly volatile, and you may not be able to resell our ordinary shares at or above your initial purchaseprice.There may be a limited public market for our ordinary shares and, as discussed above, our ADSs are no longer listed on any public market in the UnitedStates or any other jurisdiction. We cannot assure you that there will be an active trading market for our ordinary shares in the future. If our ordinary shares areaccepted for listing on a public market, you may not be able to sell your ordinary shares quickly or at the market price if trading in our ordinary shares is not active. The trading price of our ADSs and ordinary shares may be volatile. The price of our ADSs and ordinary shares could be subject to wide fluctuations inresponse to a variety of factors, including the following:1.Introduction of new products, services or technologies offered by us or our competitors;2.Failure to meet or exceed revenue and financial projections we provide to the public;3.Actual or anticipated variations in quarterly operating results;4.Failure to meet or exceed the estimates and projections of the investment community;5.General market conditions and overall fluctuations in United States equity markets;6.Announcements of significant acquisitions, strategic partnerships, joint ventures or capital commitments by us or our competitors;7.Disputes or other developments relating to proprietary rights, including patents, litigation matters and our ability to obtain patent protection for ourtechnologies;8.Additions or departures of key management personnel;9.Issuances of debt or equity securities;10.Significant lawsuits, including patent or shareholder litigation;11.Changes in the market valuations of similar companies;12.Sales of additional ordinary shares or other securities by us or our shareholders in the future;13.Trading volume of our ordinary shares;14.Fluctuations in the exchange rate between the U.S. dollar and Renminbi;15.Negative market perception and media coverage of our company or other companies in the same or similar industry with us; and16.Other events or factors, many of which are beyond our control.15In addition, the stock market in general, and the NASDAQ Capital Market and software products and services companies in particular, have experiencedextreme price and volume fluctuations that have often been unrelated or disproportionate to the operating performance of these companies. Broad market andindustry factors may negatively affect the market price of our ordinary shares, regardless of our actual operating performance. Our ADSs and ordinary shares may be subject to the SEC’s penny stock rules which may make it difficult for brokerdealers to complete customer transactionsand trading activity in our securities.Our ADSs and ordinary shares may be deemed to be “penny stock” as that term is defined under the Securities Exchange Act of 1934, as amended. Pennystocks generally are equity securities with a price of less than $5.00 (other than securities registered on certain national securities exchanges or quoted on theNASDAQ system, provided that current price and volume information with respect to transactions in such securities is provided by the exchange or system). Pennystock rules impose additional sales practice requirements on brokerdealers who sell to persons other than established customers and “accredited investors.” Theterm “accredited investor” refers generally to institutions with assets in excess of $5,000,000 or individuals with a net worth in excess of $1,000,000 or annual incomeexceeding $200,000 or $300,000 jointly with their spouse in each of the prior two years.The penny stock rules require a brokerdealer, prior to a transaction in a penny stock not otherwise exempt from the rules, to deliver a standardized riskdisclosure document in a form prepared by the SEC, which provides information about penny stocks and the nature and level of risks in the penny stockmarket. Moreover, brokerdealers are required to determine whether an investment in a penny stock is a suitable investment for a prospective investor. A brokerdealer must receive a written agreement to the transaction from the investor setting forth the identity and quantity of the penny stock to be purchased. Theserequirements may make it more difficult for brokerdealers to effectuate customer transactions and trading activity in our securities. As a result, the market price ofour ADSs and ordinary shares may be depressed, and you may find it more difficult to sell our ADSs or ordinary shares.Sales of a substantial number of ordinary shares or ADSs in the public market by our existing shareholders could cause the price of our ADSs to fall.Sales of a substantial number of our ordinary shares or ADSs in the public market or the perception that these sales might occur, could depress the marketprice of our ADSs and could impair our ability to raise capital through the sale of additional equity securities. We are unable to predict the effect that sales may haveon the prevailing market price of our ADSs.All of our existing shareholders prior to our May 2010 offering were subject to lockup agreements with the underwriters of the offering that restricted theshareholders’ ability to transfer ordinary shares or ADSs until expiration of the lockup period in November 2010. The lockup agreements limited the number ofordinary shares or ADSs that may be sold immediately following the public offering. Subject to certain limitations, approximately 1,000,000 of our total outstandingshares are now eligible for sale. Sales of ordinary shares by these shareholders could have a material adverse effect on the trading price of our ADSs.Future sales and issuances of our ordinary shares, or rights to purchase our ordinary shares, including pursuant to our 2010 Omnibus Incentive Plan, couldresult in additional dilution of the percentage ownership of our shareholders and could cause the price of our ordinary shares to fall.We expect that significant additional capital will be needed in the future to continue our planned operations. To the extent we raise additional capital byissuing equity securities, our shareholders may experience substantial dilution. We may sell ordinary shares, convertible securities or other equity securities in oneor more transactions at prices and in a manner we determine from time to time. If we sell ordinary shares, convertible securities or other equity securities in more thanone transaction, investors may be materially diluted by subsequent sales. Such sales may also result in material dilution to our existing shareholders, and newinvestors could gain rights superior to our existing shareholders.16We do not intend to pay dividends on our ordinary shares, so any returns will be limited to the value of our ADSs and ordinary shares.We have never declared or paid any cash dividend on our ordinary shares. We currently anticipate that we will retain future earnings for the development,operation and expansion of our business and do not anticipate declaring or paying any cash dividends for the foreseeable future. Any return shareholders willtherefore be limited to the value of their ADSs or ordinary shares.As the rights of shareholders under British Virgin Islands law differ from those under U.S. law, you may have fewer protections as a shareholder.Our corporate affairs will be governed by our memorandum of association and articles of association, the BVI Business Companies Act, 2004, or the BVIAct, of the British Virgin Islands and the common law of the British Virgin Islands. The rights of shareholders to take legal action against our directors, actions byminority shareholders and the fiduciary responsibilities of our directors under British Virgin Islands law are to a large extent governed by the BVI Act and thecommon law of the British Virgin Islands. The common law of the British Virgin Islands is derived in part from comparatively limited judicial precedent in the BritishVirgin Islands as well as from English common law, which has persuasive, but not binding, authority on a court in the British Virgin Islands. The rights of ourshareholders and the fiduciary responsibilities of our directors under British Virgin Islands law are not as clearly established as they would be under statutes orjudicial precedents in some jurisdictions in the United States. In particular, the British Virgin Islands has a less developed body of securities laws as compared to theUnited States, and some states (such as Delaware) have more fully developed and judicially interpreted bodies of corporate law.As a result of all of the above, holders of our ADSs and ordinary shares may have more difficulty in protecting their interests through actions against ourmanagement, directors or major shareholders than they would as shareholders of a U.S. company.British Virgin Islands companies may not be able to initiate shareholder derivative actions, thereby depriving shareholders of the ability to protect theirinterests.British Virgin Islands companies may not have standing to initiate a shareholder derivative action in a federal court of the United States. The circumstancesin which any such action may be brought, and the procedures and defenses that may be available in respect to any such action, may result in the rights ofshareholders of a British Virgin Islands company being more limited than those of shareholders of a company organized in the United States. Accordingly,shareholders may have fewer alternatives available to them if they believe that corporate wrongdoing has occurred. The British Virgin Islands courts are alsounlikely to recognize or enforce against us judgments of courts in the United States based on certain liability provisions of U.S. securities law; and to imposeliabilities against us, in original actions brought in the British Virgin Islands, based on certain liability provisions of U.S. securities laws that are penal in nature.There is no statutory recognition in the British Virgin Islands of judgments obtained in the United States, although the courts of the British Virgin Islands willgenerally recognize and enforce the nonpenal judgment of a foreign court of competent jurisdiction without retrial on the merits.The laws of the British Virgin Islands provide little protection for minority shareholders, so minority shareholders will have little or no recourse if theshareholders are dissatisfied with the conduct of our affairs.Under the law of the British Virgin Islands, there is little statutory law for the protection of minority shareholders other than the provisions of the BVI Actdealing with shareholder remedies. The principal protection under statutory law is that shareholders may bring an action to enforce the constituent documents ofthe corporation, our memorandum of association and articles of association. Shareholders are entitled to have the affairs of the company conducted in accordancewith the general law and the memorandum of association and articles of association.17There are common law rights for the protection of shareholders that may be invoked, largely dependent on English company law, since the common law ofthe British Virgin Islands is limited. Under the general rule pursuant to English company law known as the rule in Foss v. Harbottle, a court will generally refuse tointerfere with the management of a company at the insistence of a minority of its shareholders who express dissatisfaction with the conduct of the company’s affairsby the majority or the board of directors. However, every shareholder is entitled to have the affairs of the company conducted properly according to law and thecompany’s constituent documents. As such, if those who control the company have persistently disregarded the requirements of company law or the provisions ofthe company’s memorandum of association and articles of association, then the courts will grant relief. Generally, the areas in which the courts will intervene are thefollowing: (1) an act complained of which is outside the scope of the authorized business or is illegal or not capable of ratification by the majority; (2) acts thatconstitute fraud on the minority where the wrongdoers control the company; (3) acts that infringe on the personal rights of the shareholders, such as the right tovote; and (4) where the company has not complied with provisions requiring approval of a majority of shareholders, which are more limited than the rights affordedminority shareholders under the laws of many states in the United States.Antitakeover provisions in our memorandum of association and articles of association and our right to issue preference shares could make a thirdpartyacquisition of us difficult.Some provisions of our memorandum of association and articles of association may discourage, delay or prevent a change in control of our company ormanagement that shareholders may consider favorable, including provisions that authorize our board of directors to issue preference shares in one or more seriesand to designate the price, rights, preferences, privileges and restrictions of such preference shares.If you hold our ADSs, you may not have the same voting rights as the holders of our ordinary shares and must act through the depositary to exercise your rights.Holders of our ADSs will not be able to exercise voting rights attaching to the shares evidenced by our ADSs on an individual basis. Holders of our ADSswill appoint the depositary or its nominee as their representative to exercise the voting rights attaching to the shares represented by the ADSs. You may not receivevoting materials in time to instruct the depositary to vote, and it is possible that you, or persons who hold their ADSs through brokers, dealers or other third parties,will not have the opportunity to exercise a right to vote. Upon our written request, the depositary will mail to you a shareholder meeting notice which contains,among other things, a statement as to the manner in which your voting instructions may be given, including an express indication that such instructions may begiven or deemed given to the depositary to give a discretionary proxy to a person designated by us if no instructions are received by the depositary from you on orbefore the response date established by the depositary. However, no voting instruction shall be deemed given and no such discretionary proxy shall be given withrespect to any matter as to which we inform the depositary that (i) we do not wish such proxy given, (ii) substantial opposition exists, or (iii) such matter materiallyand adversely affects the rights of shareholders. We will make all reasonable efforts to cause the depositary to extend voting rights to you in a timely manner, butyou may not receive the voting materials in time to ensure that you can instruct the depositary to vote your ADSs. Furthermore, the depositary and its agents willnot be responsible for any failure to carry out any instructions to vote, for the manner in which any vote is cast or for the effect of any such vote. As a result, youmay not be able to exercise your right to vote and you may lack recourse if your ADSs are not voted as you requested. In addition, in your capacity as an ADSholder, you will not be able to call a shareholders’ meeting.You may not be able to participate in rights offerings and may experience dilution of your holdings as a result.We may from time to time distribute rights to our shareholders, including rights to acquire our securities. However, we may not, and under the depositagreement for the ADSs, the depositary will not, offer those rights to ADS holders unless both the rights and the underlying securities to be distributed to ADSholders are registered under the Securities Act, or the distribution of them to ADS holders is exempted from registration under the Securities Act with respect to allholders of ADSs. We are under no obligation to file a registration statement with respect to any such rights or underlying securities or to endeavor to cause such aregistration statement to be declared effective. In addition, we may not be able to rely on an exemption from registration under the Securities Act to distribute suchrights and securities. Accordingly, holders of our ADSs may be unable to participate in our rights offerings and may experience dilution in their holdings as a result.You may be subject to limitations on transfer of your ADSs.Your ADSs are transferable on the books of the depositary. However, the depositary may close its transfer books at any time or from time to time when itdeems expedient in connection with the performance of its duties. In addition, the depositary may refuse to deliver, transfer or register transfers of ADSs generallywhen our books or the books of the depositary are closed, or at any time if we or the depositary deem it advisable to do so because of any requirement of law or ofany government or governmental body, or under any provision of the deposit agreement, or for any other reason.18We may be a passive foreign investment company, of PFIC, which could lead to additional taxes for U.S. holders of our ADSs or ordinary shares.We do not expect to be, for U.S. federal income tax purposes, a passive foreign investment company, or a PFIC, which is a foreign company for which, inany given taxable year, either at least 75% of its gross income is passive income, or investment income in general, or at least 50% of its assets produce or are held toproduce passive income, for the current taxable year, and we expect to operate in such a manner so as not to become a PFIC for any future taxable year. However,because the determination of PFIC status for any taxable year cannot be made until after the close of such year and requires extensive factual investigation,including ascertaining the fair market value of our assets on a quarterly basis and determining whether each item of gross income that we earn is passive income, wecannot assure you that we will not become a PFIC for the current taxable year or any future taxable year. If we are or become a PFIC, a U.S. holder of our ADSs orordinary shares could be subject to additional U.S. federal income taxes on gain recognized with respect to the ADSs or ordinary shares and on certain distributions,plus an interest charge on certain taxes treated as having been deferred under the PFIC rules. Noncorporate U.S. holders will not be eligible for reduced rates oftaxation on any dividends received from us if we are a PFIC in the taxable year in which such dividends are paid or in the preceding taxable year.If our ordinary shares are listed on the NASDAQ Capital Market and the trading price of our ordinary shares fails to comply with the continued listingrequirements of the NASDAQ Capital Market, we would face possible delisting, which would result in a limited public market for our ordinary shares andmake obtaining future debt or equity financing more difficult for us.Companies listed on NASDAQ are subject to delisting for, among other things, failure to maintain a minimum closing bid price of $1.00 per share for 30consecutive business days. On December 19, 2011, we received a letter from NASDAQ indicating that for the last 30 consecutive business days, the closing bidprice of our ADSs fell below the minimum $1.00 per share requirement pursuant to NASDAQ Listing Rule 5550(a)(2) for continued listing on the NASDAQ CapitalMarket. We regained compliance with the minimum bid price requirement for continued listing set forth in NASDAQ Listing Rule 5550(a)(2), as its ADS with itsunderlying ordinary share has achieved a closing bid price of $1.00 or greater for the 10 consecutive business days from November 6 to November 23, 2012 byimplementing a 1for10 combination, or reverse split of the ordinary shares effective November 6, 2012. When listed, we cannot be sure that the price of our ordinaryshares will comply with this requirement for continued listing on the NASDAQ Capital Market in the future. If we were not able to do so, our ordinary shares wouldbe subject to delisting and would likely trade on the overthecounter market. If our ordinary shares were to trade on the overthecounter market, selling ourordinary shares could be more difficult because smaller quantities of shares would likely be bought and sold, transactions could be delayed, and security analysts’coverage of us may be reduced. In addition, brokerdealers have certain regulatory burdens imposed upon them, which may discourage brokerdealers from effectingtransactions in our ordinary shares, further limiting the liquidity of our ordinary shares. As a result, the market price of our ordinary may be depressed, and you mayfind it more difficult to sell our ordinary shares. Such delisting from the NASDAQ Capital Market and continued or further declines in our share price could alsogreatly impair our ability to raise additional necessary capital through equity or debt financing.ITEM 4. INFORMATION ON THE COMPANY.A . HISTORY AND DEVELOPMENT OF THE COMPANY.OverviewWe are a holding company and conduct our operations through our whollyowned subsidiary named LK Technology Ltd., a British Virgin Islands limitedliability company (“LK Technology”), and its whollyowned subsidiaries, MMB Limited and Mobile Media (China) Limited and their respective subsidiaries, whichhold the rights to deploy WiFi systems on about 700 trains in China, including 290 trains in which WiFi systems have already been installed and are in operation. InMay 2010, we consummated an initial public offering of our American Depository Shares, or ADSs, for gross proceeds of $16 million, and our ADSs were listed onthe NASDAQ Capital Market under the ticker symbol “KONE”. Our ordinary shares are not currently listed on any trading market. Our American Depository Shares(“ADSs”) were voluntarily delisted from the NASDAQ Capital Market on September 19, 2018. We have applied to NASDAQ for the listing of our ordinary shares onthe NASDAQ Capital Market and received an approval for listing of Ordinary Shares on August 6, 2018, and as of the date of this transition report, that applicationand approval are currently under review.19On August 17, 2018, we consummated an asset exchange transaction, pursuant to which we exchanged all issued and outstanding capital stock in TopskyInfoTech Holdings Pte Ltd., the parent of Softech, for the issued and outstanding capital stock of LK Technology (the “Asset Exchange”). In connection with theAsset Exchange, we changed our name on August 20, 2018, and on September 20, 2018, issued to the shareholders of C Media Limited, the former parent of LKTechnology, (i) 185,412,599 of our ordinary shares, par value $0.01 per share and (ii) 1,000,000 of our preferred shares. Upon the consummation of the AssetExchange, we ceased our previous business operations and became a company focused on the provision of WiFi and mobile application products for long distancerail travelers in China.On August 25, 2018, LK Technology entered into a Stock Purchase Agreement (the “Agreement”) with the shareholders (“Shareholders”) of SuperengineHoldings Limited, a limited liability company organized under the laws of the British Virgin Islands (the “Superengine”), pursuant to which LK Technology acquiredall of the issued and outstanding capital stock of Superengine for an aggregate purchase price of US$60 million (the “Purchase Price”), which are paid by theissuance of our Ordinary Shares in an amount equal to the quotient of (x) the Purchase Price divided by (y) the average of the closing prices of the Ordinary Shareson the NASDAQ Capital Market over the 12 months period preceding July 31, 2018. We are a party to the Agreement in connection with the issuance of theOrdinary Shares and certain other limited purposes.Corporate InformationOur principal executive offices are located at LAB32, SOHO 3Q, No 9, Guanghua Road, Chaoyang District, Beijing, People’s Republic of China 100020. Ourwebsite is www.luokung.com. We routinely post important information on our website. The information contained on our website is not a part of this transitionreport.Our agent for service of process in the United States is Worldwide Stock Transfer, LLC, the current transfer agent of the Company, with a mailing address ofOne University Plaza, Suite 505, Hackensack, New Jersey 07601.B. BUSINESS OVERVIEW.We are a Chinabased provider of rail WiFi and mobile application products for long distance travelers in China. Our primary mobile application, theLuoKuang platform, consists of the LuoKuang mobile applications, a series of supporting software at the server end, and railWiFi hardware and equipment on thetrains that we serve. The LuoKuang platform incorporates technology covered by 22 patents and about 34 software copy rights, and serves as a content and servicedistribution platform that is tailored for particular travel stages featuring geographic location and social interaction. The content and services distributed byLuoKuang contain information, entertainment, travel, ecommerce, online to offline (“O2O”), advertisement and marketing features.LuoKuang mainly provides personalized and precise services to long distance travelers in two locations: on the train and at the destination. Based on thetravel environment, the core elements of our users’ needs include staving off boredom on trains and discovering and exploring new locations upon arrival. The mainservices contain entertainment services (videos and audio, digital readings, games specific and tailored to the travel stage) and social services (satisfying thedemand for value discovery of unfamiliar destinations through social interaction among strangers based on locations). As of December 31, 2017, the LuoKuangplatform featured about 38 million users.The setting services on the train focus on providing entertainment content for passengers to pass time during longdistance travel in closed environments.For example, we provide access to long video formats such as movies and TV shows, short videos, music, digital readings and games.20We use the most valuable WiFi location—the train WiFi setting—as the entrance of our LuoKuang platform and mobile applications. Passengers typicallyride trains for longdistance and interprovincial travel purposes. The long periods of monotonous journeys and the cost concerns for roaming traffic fees enable thecombination of entertainment content service needs and WiFi access needs. Our railWiFi becomes a valuable and sophisticated WiFi service in this setting—notjust WiFi connection service, but a provider of sophisticated services through a WiFi connection. In addition, the annual traffic of 800,000 passengers onboardeach train makes rail WiFi a huge entry point for mobile applications. We do not define ourselves as a train WiFi communication service operator but as a longdistance travel mobile service provider. We provide users with free WiFi access so that users are able to connect to the LuoKuang platform and thus access relatedentertainment services, services on the train and destination services. The rail WiFi is our access point to a significant pool of users and the entrance to acquiringadditional users.The setting services focus on providing targeted push services to users while travelling in unfamiliar cities. Information and service guidance are preciselypushed to appeal to the interests and tastes (eating, drinking, shopping, touring and culture) of individual users (cuisine specialties and local snacks, local events,viewing sights, culture, history, stories). The service guidance is generated, shared and distributed by individual users (travelers, local residents, local businesses)interacting with current locations and featuring users who generated contents from selfmedia and small and medium vertical contents providers).Based on the GIS (geoinformation system), Superengine is a provider of big spatialtemporal data, network graphic image technology and relevant service.Its super engine series includes computer graphic image engines and spatial database engines. Spatialtemporal cloud index is the core of the company’s spatialtemporal data engines. It is equivalent to the neural network of the big data and the Internet. It extends the value of its products and platform to its data serviceproviders. In cooperation, its service providers can be divided into three categories, namely, basic geographic data providers, industrial data providers andbehavioral data providers). Superengine’s industriesoriented spatialtemporal data engine was launched in 2016. The spatialtemporal GIS platform has been appliedin industries such as aerospace, power grid, surveying & mapping, agriculture, cultural relic preservation, water conservancy, public security, railway section, smartcities, and business location selection.Our primary sources of revenue are advertising and marketing promotion revenues.Our Industry — Mobile Internet IndustryOur products and services are engaged in the mobile internet industry. Our main services consist of entertainment services (videos, audio, digital readings,games that are tailormade for passengers on train) and other services including satisfying the demand for value discovery of unfamiliar destinations through socialinteractions among strangers based in such locations). The mobile internet industry in China is rapidly growing and is likely to be in a longterm growth trend.According to the Mobile Internet Blue Book of China Mobile Internet Report, in 2017 the market size of China mobile internet reached RMB 605 billion. Now China isin a leading position in terms of smartphone, mobile communication network and mobile application services. The pool of users is anticipated to keep expandingthrough the promotion and popularization of smartphones and the expansion of the mobile internet market.Video is the leading online entertainment format in China. According to the iResearch Report, over 80% of total time spent by users on online entertainmentin China in 2016 was internet video. Online entertainment, especially internet video, is attractive to Chinese users due to many favorable factors, including easyaccessibility, wide content selection, and innovative platforms with social features.For 2017, the transaction volume of China mobile ecommerce market reached to over RMB 4 trillion according to the China Mobile Ecommerce IndustryResearch Report from iResearch, representing an increase of 19.1%. For the next few years, China mobile online shopping will likely maintain steady growth. Thefocal point of competition in China mobile ecommerce market has shifted from infrastructure service providers to integrated and accurate services providers.Drawing in users with compelling content in diversified scenes has become a trend.21The revenue for China mobile gaming industry reached RMB 144.58 billion for the year of 2017, according to the China Mobile Game Industry ResearchReport from iResearch. With increased investment by largescale enterprises in the sector of mobile games and the strict enforcement of the mobile game industryrelated regulatory policy guidelines, the mobile game market as a whole will become more organized and standardized.According to the Annual Analysis of China Mobile Reading Industry from Analysis, for the year of 2017, the mobile reading market in China reached toRMB 14.04 billion. By the end of 2016, the size of China mobile's reading market reached RMB 11.86 billion, showing an increase of 18.38% in 2017.The closed and boring environment for passengers of longdistance travel and high roaming charges lead to a strong demand to use our rail WiFi services.Passengers, through their own mobile phone, have access to the free WiFi network in each carriage, access to our rich mobile internet entertainment content andtravel services. According to the annual statistical bulletin of China Railway Corporation in 2017, there were about 6,030 trains in operation in China in 2017,consisting of 2,935 high speed trains and 3,095 express trains. The rail WiFi system that we have installed are currently all on express trains. The market value will bemultiplied several times following the extended coverage of service on other trains.Our StrengthsWe believe the following strengths differentiate us from our competitors:Our strategy is to build up personalized and targeted service products for travelers through rail WiFi networks, enabling our services to evolve into a coredriving distribution platform that provides content, news, games, ecommerce, OTO service, travel services and advertising and marketing. In comparison, ourcompetitors offer simple forms of media services on trains. We focus on personalized and targeted matching between users on long distance trips and services. Ourcompetitors focus on operating and generating internet traffic.We possess a complete set of technology system including network, client end and service and operation platform. We have patent protections for WiFiequipment on trains. Our technology strengths are briefly summarized below.WiFi EquipmentPatent protected. Supports WiFi/3G/4G telecom modules; 4 core CPU with X86 architecture, and SSD hard disk with big storage for localcontents.InfrastructureThe technology infrastructures include the application program system, big data gathering and processing systems, intelligence cloudsservice deployment structure systems and our WiFi hardware server deployment structure system. The operation center, big data center,contents center and railWiFi server system are built on this infrastructure. On the above layer, the equipment management platform,account and payment platform, contents management platform and advertisement distribution platform are set up for daily managementpurpose.LuoKuang strengthens the connection of services among people, setting and locations. In catering to people on the move, we anticipate strengthening therelationship between users and their locations in a given moment. Currently, LuoKuang provides the link between users and thirdparty service providers andprovides value added services to both users and thirdparty service providers. The connection is not simply a traffic diversion, but also the direct presentation ofrelevant services in the LuoKuang platform. The open API interface and independent product software package allows easy access by service providers anddevelopers and supports data service, advertisement operations, billing, users promotion and product marketing services. As an API product, LuoKuang does notcreate content or services. The content and services are provided by our partners in the LuoKuang platform. Now, the majority of top mobile internet content andservices providers in China have a presence in the Luokuang platform. Those include, but are not limited to, Toutiao, Wangyi News, iqiyi, Letv, YoudianCinema(Hollywood films), Sohu video, Phoenix Video, Kugou Music, FM Qingting, iReader, Baidu Literature, Phoenix Novel, Baidu Game, Meituan, Dianping, andsimilar content providers.22Our StrategyLuoKuang is positioned to provide API interface services and geographic information social services. The API interface services are provided within thetypical BC model. LuoKuang pushes the content and services from thirdparty service providers to users. The local businesses, service practitioners, residents, andforeign travelers are all defined as a “user” and may participate in social interactions based on local value information and generate UGC content. The socalled localvalue information is defined as information, views, evaluations, experiences and experience sharing related to the local cultural scene, native products,entertainment, food, tourism and activities.The LuoKuang user growth strategy is to have access to users through the travelers’ use of mobile devices in connection with longdistance train travel.Through deploying WiFi systems on trains and providing free WiFi access to passengers, LuoKuang is able to have consistent access to longdistance travelers.The WiFi system on the train has become a powerful user portal at the early stage of LuoKuang and has gained substantial user traffic. We are in a leading positionin terms of numbers of trains contracted and trains in operation with our free WiFi system. We have contracted with about 700 trains, which cover almost 560 millionannual passenger trips. As of the date of this report, approximately 290 trains are operating our rail WiFi system. We will continue to install our rail WiFi system inthe following years.The development strategy for LuoKuang encompasses the following:1.Enhance our local cycle service (a recommendation service system based on the location of travelers after their arrival, recommendations includingtourist attractions, local specialties and other items of interest), strengthen services for arrivals in the form of social interaction and focus on the valueof relationships between users and their current locations.2.Focus on the development of geographic positioning technology. Get the business of local cycle and users on train mixed together. We will put oureffort to maximize the synergy effect.3.Big Data: Behavior data about passenger trips is obtained via the traffic entrance of rail WiFi and these data will help to optimize our product.4.While enhancing setting service experiences and optimizing entertainment experiences, we will enrich ecommerce services on trains featuringrecommendations of customized products and ecommerce shopping guidance of products labeled with specific geographic location (and trafficdiversion).5.Focus on API positioning and attract more premium vertical service providers (contents and services).Intellectual PropertyWe have registered the following software copyrights, patents and trademarks for our business operations. We believe this intellectual property forms anintegral part of our competitive strength.23Patents:We have been granted some inventions by the State Intellectual Property Office of PRC. We possess a complete set of technology system includingnetwork, client end and service and operation platform. We have patent protections for WiFi equipment on trains. We have received the following patents:No.Name of patentTypeRegistrationNumberDate of Insurance1.Wireless communication multimedia chip business consumer informationacquisition terminal deviceInventionZL 2010 2 0528767.9Sep 21, 20112.A user behavior processing method and device for intelligent terminalInventionZL 2013 1 0301728.3May 27, 20153.A global positioning system terminal deviceInventionZL 2010 2 0253452.8Nov 7, 20114.A wireless multimedia serverInventionZL 2013 2 0220183.9Nov 13, 20135.Ordering system of passengers on trainInventionZL 2015 2 0095381.6Aug 5, 20156.A wireless multimedia serverInventionZL 2015 2 0201382.4Oct 28, 20157.An antenna structureInventionZL 2016 2 0424352.4Mar 1, 20178.Spatial data progressive transmission method and deviceInvention201010617383.9Jun 15, 20169.Methods and devices for conflict detection and avoidance of spatial entity elementlabelingInvention201010617385.8Mar 26, 201410.Spatial data processing method and deviceInvention201010617399.XJun 26, 201311.Method and device of spatial data simplificationInvention201010617400.9Mar 13, 201312.Method and device for judging the occlusion type of space entityInvention201010617403.2Sep 25, 201313.A method and device for distributed mapping of 3d model dataInvention201110274924.7Mar 26, 201414.Data simplification of 3d model, gradual transmission method and deviceInvention201110275336.5Mar 25, 201515.Spatial data transmission method and deviceInvention201110306393.5Dec 13, 201416.Methods and devices for spatial data processing, simplification and progressivetransmissionInvention201210104250.0Jun 10, 201517.Spatial data progressive transmission method and deviceInvention201310367021.2Jun 23, 201718.Simplification method and device of spatial dataInvention201310367128.7Sep 22, 201719.The method and device to accelerate transmission and display of graphic dataacross platformsInvention201210116149.7Aug 10, 201620.Methods and devices related to spatial data compression, decompression andprogressive transmissionInvention201310136682.4Nov 10, 2017We also have two patents outside of China.No.Name of patentCountryNationalRegistrationNumberDate ofInsurance1.Spatial data processing method and deviceJapan2012547439Jun 20, 20142.Methods and devices related to spatial data compression, decompression andprogressive transmissionU.S.A14/394,610Sep 5, 201724Software Copyrights:We have received the following software copyrights from the National Copyright Administration (“NCA”) of PRC:No.Name of CopyrightAchievement approachRegistration numberTime of obtainExpire time1.WAP PUSH Business operation platformsystemIndependent research anddevelopment2007SRBJ1464Jul 23, 200750 years2.TDSCDMA Streaming media businessmanagement platform software V1.0Independent research anddevelopment2009SRBJ0412Jan 22, 200950 years3.Content management platform systemsoftware V1.0Independent research anddevelopment2009SRBJ1374Apr 1, 200950 years4.Mobile multimedia broadcast electronicservice guide system software V1.0Independent research anddevelopment2009SRBJ1365Apr 1, 200950 years5.Mobile video business operation platformsystem V1.0Independent research anddevelopment2007SRBJ1463Jul 23, 200750 years6.Mobile multimedia broadcast emergencybroadcast platform software V1.0Independent research anddevelopment2010SRBJ0720Mar 5, 201050 years7.Mobile multimedia broadcast audio richmedia interactive platform softwareV1.0Independent research anddevelopment2010SRBJ0719Mar 5, 201050 years8.Printer typesetting and printing softwareV1.0Independent research anddevelopment2011SRBJ4190Sep 28, 201150 years9.Electronic newspaper business supportplatform software V1.0Independent research anddevelopment2011SRBJ4186Sep 28, 201150 years10.Public information business platformsoftware V1.0Independent research anddevelopment2011SRBJ3810Sep 27, 201150 years11.User interface scripting software V1.0Independent research anddevelopment2011SRBJ3809Sep 27, 201150 years12.Integrated business management platformsoftware V1.0Independent research anddevelopment2012SR003002Jan 16, 201250 years13.Interactive business development platformsoftwareIndependent research anddevelopment2011SRBJ4593Nov 29, 201150 years14.Instant messaging and messaging systemsoftwareIndependent research anddevelopment2014SR122231Aug 5, 201450 years15.General statistical platform software forclient productsIndependent research anddevelopment2014SR216662Dec 30, 201450 years16.CMMB Data broadcast managementplatform softwareIndependent research anddevelopment2009SRBJ0391Jan 22, 200950 years17.Integrated passenger train service systemIndependent research anddevelopment2012SR083665Sep 5, 201250 years25No.Name of CopyrightAchievement approachRegistration numberTime of obtainExpire time18.JHBY Train inspection managementsystemIndependent research anddevelopment2013SR015105Feb 21, 201350 years19.Integrated information engine platformsoftware V1.0Independent research anddevelopment2014SR040347Nov 30, 200150 years20.Super information engine developmentplatform software V5.0Independent research anddevelopment2014SR036792Mar 5, 200350 years21.Core map super network informationengine platform software V1.0Independent research anddevelopment2014SR036772Sep 15, 200750 years22.Integrated management of the grid gissoftware V1.0Independent research anddevelopment2014SR036808Jun 20, 200850 years23.Core map rural power grid equipment GPSpatrol system software V1.0Independent research anddevelopment2014SR036810Dec 10, 200850 years24.Diagram grid patrol PDA system softwareV1.0Independent research anddevelopment2014SR036778Dec 12, 200850 years25.Core map geographic information enginedesktop platform software V1.0Independent research anddevelopment2014SR036614Jan 15, 200950 years26.Integrated management of the gridgeographic information Web systemsoftware V1.0Independent research anddevelopment2014SR036799Mar 10, 200950 years27.Core map railway power supply equipmentGPS patrol system software V1.0Independent research anddevelopment2014SR036783Mar 25, 201050 years28.Core map network 3 d map server softwareV1.0Independent research anddevelopment2014SR036788Feb 20, 201150 years29.Core map network 3d map clientsoftwareV1.0Independent research anddevelopment2014SR036637Feb 22, 201150 years30.Core map 3d map network publishingplatform software V1.0Independent research anddevelopment2014SR036633Mar 10, 201150 years31.Core map 3d map network release pluginsystem software V1.0Independent research anddevelopment2014SR036622Mar 15, 201150 years32.Core map network 3d map smartphoneplatform software V1.0Independent research anddevelopment2014SR036638Apr 28, 201150 years33.Core map network GIS Shared mobileplatform software V1.0Independent research anddevelopment2014SR036634Oct 31, 201150 years34.Core map network GIS sharing platformsoftware V1.0Independent research anddevelopment2014SR036639Dec 16, 201150 yearsTrademarks:We have registered the following trademarks with the Trademark Office, State Administration for Industry and Commerce in the PRC:NoTrademarkClassification NumberValid PeriodRegistration Number1Y图形382010.04.212020.04.2067460692Y图形412010.09.072020.09.0667460673YRADIO文字352010.07.212020.07.2067334374YRADIO文字382010.04.21.2020.04.2067334385YRADIO文字412010.09.072020.09.0667334396LookLook图形382009.04.072019.04.0646660517LookLook图形422008.12.212018.12.2046660508YTV文字352010.07.212020.07.2067335799YTV文字382010.05.282020.05.27673357810YTV文字412010.09.072020.09.06673358111YTV文字422010.09.072020.09.06673358012YOUTV文字352010.07.212020.07.20673344013YOUTV文字382010.05.282020.05.27673344114xfeng文字352012.03.282022.03.27922914526NoTrademarkClassification NumberValid PeriodRegistration Number15xfeng文字382012.03.282022.03.27922916016xfeng文字412012.03.282022.03.27922919017xfeng文字422012.03.282022.03.27922922118中传视讯文字+图形422008.12.212018.12.20466604719中传视讯文字422008.12.212018.12.20466604820中传视讯文字382008.12.212018.12.20466604921新蜂文字382011.08.212021.08.20853890722新蜂文字422012.01.282022.01.27853907823新蜂.潮文字382011.08.212021.08.20853910424新蜂.潮文字422012.01.282022.01.27853914125新影力412014.08.282024.08.271228864326小人图形352014.08.282024.08.271228798527小人图形382014.08.282024.08.271228858028小人图形412014.08.282024.08.271228862929小人图形422014.08.282024.08.271228843530中传文字382014.08.282024.08.271228826731中传图形382014.08.282024.08.271228828932中童文字412014.08.072024.08.061221408533中童在线文字412014.08.072024.08.061221409234翠鸟文字382014.08.072014.08.061221405835翠鸟文字422014.08.072014.08.061221412536爱翠鸟文字382014.08.072024.08.061221406637爱翠鸟文字412014.08.072024.08.061221409638爱翠鸟文字422014.08.072024.08.061221412639翠鸟图形352014.08.072024.08.061221404040翠鸟图形382014.08.072024.08.061221407441翠鸟图形412014.08.072024.08.061221410042翠鸟图形422014.08.072024.08.061221413143信号小喇叭图形+CMEDIA412015.03.212025.03.201248043944LookLook图形382015.11.142025.11.131153342845LookLook图形422014.06.212024.06.201153372046LookLook文字382014.07.142024.07.131153406747LookLook文字422014.04.142024.04.131153422748L图形352014.02.282024.02.271153500249L图形382014.02.282024.02.271153507350L图形412014.02.282024.02.271153518151L图形422014.02.282024.02.271153526252箩筐图形412016.06.142026.06.131658022853箩筐图形422016.06.142026.06.131658022754箩筐文字422016.09.282026.09.271658024955箩筐文字412016.06.142026.06.131658025056箩筐文字352016.09.212026.09.201658025257箩筐文字92016.06.142026.06.131658025327NoTrademarkClassification NumberValid PeriodRegistration Number58箩筐图形382016.06.142026.06.131658022959箩筐图形352016.06.142026.06.131658023060箩筐图形92016.06.142026.06.131658023161微时光文字422016.09.282026.09.271658024762传游录屏文字92016.06.142026.06.131678214463传游录屏文字352016.06.142026.06.131678214364传游录屏文字382016.06.142026.06.131678214265传游录屏文字412016.06.142026.06.131678214166传游录屏文字422016.06.142026.06.131678214067录游器文字92016.06.142026.06.131678213568录游器文字352016.06.142026.06.131678213669录游器文字382016.06.142026.06.131678213770录游器文字412016.06.142026.06.131678213871录游器文字422016.06.142026.06.131678213972畅联TV文字412016.01.212026.01.201579246773畅联TV文字382016.01.212026.01.201579246874SuperEngine92016.01.212026.01.20812572275SuperEngine422016.01.212026.01.20812572876超擎9/422016.01.212026.01.201647320577SUPERENGINE9/422016.01.212026.01.2016473185*See below for an explanation of each classification number used in the table above.Classification No. 9: data processing apparatus, couplers (data processing equipment), computer software (recorded), monitors (computer programs), smartcards (integrated circuit cards), electrodynamic apparatus for the remote control of signals, alarms, and electric installations for the remote control of industrialoperations.Classification No. 35: auctioneering, sales promotion for others, marketing analysis, marketing research, importexport agencies, advisory services forbusiness management, business management for franchise, personnel management consultancy, relocation services for businesses, and systemization ofinformation into computer databases.Classification No. 38: Include services that enable at least sensory communication between two people. Such services include that allow one person to talkto another, send messages from one person to another, Make verbal or visual contact between one person and the other. This classification especially include theservice for broadcasting radio or television programs. Except for radio advertising services and telemarketing services.Classification No. 41: instruction services, teaching, education information, tuition, arranging and conducting of colloquiums, publication of electronicbooks and journals online, amusements, and vocational guidance.Classification No. 42: technical research, studies (technical project), computer software design, updating of computer software, recovery of computer data,computer systems analysis, installation of computer software, computer antivirus protection, and research and development for others. 28Business Certificates and QualificationsWe have obtained all necessary regulatory certifications to conduct our business in the PRC, including without limitation, the following: SoftwareEnterprise Recognition Certificate, Computer Information System Integration Qualification Certificate, Construction Enterprise Qualification Certificate, and SecurityTechnology & Protection Enterprise Certificate. We have also been properly certified as a hightech enterprise and have met the ISO 9001:2000 qualificationmanagement system.Legal ProceedingsAlthough we may, from time to time, be involved in litigation and claims arising out of our operations in the normal course of business, we do not believethat we are a party to any litigation that will have a material adverse impact on our financial condition or results of operations. To our knowledge, other than asdescribed below there are no material legal proceedings threatened against us. From time to time, we may be subject to various claims and legal actions arising in theordinary course of business. Following the consummation of the AEA, we became successor in interest to the legal proceedings described below.Litigation with Shanghai Fusheng Weier Intelligent Control Technology Co., Ltd.On January 22, 2016, Zhong Chuan Rui You and Shanghai Fusheng Weier Intelligent Control Technology Co., Ltd. (“Fusheng Weier”) signed a contract forequipment of $1,652,842 (RMB10,800,000). Since Zhong Chuan Rui You did not make the payments of $1,126,381 (RMB7,360,000) on the due dates, Fusheng Weierfiled a lawsuit against Zhong Chuan Rui You in Shanghai Xuhui District People's Court on October 8, 2016. On March 9, 2017, Xuhui District People's Court issuedthe verdict requiring Zhong Chuan Rui You to pay the overdue debts. In August 2017, C Media Limited made the payment of $512,075 (RMB3,346,000). Theremaining balance has been accrued in accounts payable. The payment schedule for the remaining balance is being negotiated by the two parties. On February 5,2018, a hearing was held adding Zhong Chuan Shi Xun as a defendant. The Group plans to settle the remaining balance within one year.Lawsuit with Gansu Jinlun Culture Media Co., Ltd.On August 22, 2014, Zhong Chuan Rui You and Gansu Jinlun Culture Media Co., Ltd. (“Gansu Jinlun”) signed a “Lanzhou Railway Bureau AirconditionedTrain WiFi Network System Advertising Operation Rights Agreement” for advertising on 72 trains of $1,467,880 (RMB9,604,633). Due to the dispute on theproject implementation, Zhong Chuan Rui You did not pay the advertising fee. On August 23, 2017, Gansu Jinlun filed a lawsuit with Gansu Intermediate People'sCourt. On December 19, 2017, Gansu Intermediate People's Court issued a verdict, ruling that Zhong Chuan Rui You settle the overdue advertising fee. Since only 18out of 72 trains have been installed with Wifi network system, Zhong Chuan Rui You disputed and appealed to the verdict. The next court trial date has not yet beendetermined.C Media and Gansu Jinlun are negotiating a potential settlement to resume the contract. According to the legal counsel, it is probable that the settlementwill amount to approximately $459,000 (RMB3,000,000); therefore, this amount has been accrued in accounts payable as at December 31, 2017.Litigation with Shenzhen Hua Xun Fang Zhou Technology Co., Ltd.On June 16, 2015, Zhong Chuan Rui You signed a cooperation agreement with Shenzhen Hua Xun Fang Zhou Technology Co., Ltd. (“Shenzhen Hua Xun”)and Xuesong Song, a major shareholder of C Media Limited. Pursuant to this agreement, Zhong Chuan Rui You procures equipment from Shenzhen Hua Xun.Xuesong Song acts as a joint liability guarantor for the entire debts of Zhong Chuan Rui You under this agreement. As Zhong Chuan Rui You did not make thepayments on the due dates, Shenzhen Hua Xun filed a lawsuit with Shenzhen Baoan District People's Court on May 31, 2016. On November 1, 2016, Zhong ChuanRui You, Xuesong Song and Shenzhen Hua Xun reached a settlement in Shenzhen Baoan District People's Court to settle $1,735,389 (RMB11,355,000) in fourinstalments. On December 30, 2017, the debt was assigned to C Media Limited.29C. ORGANIZATIONAL STRUCTUREThe following diagram illustrates our corporate structure and the place of formation and affiliation of each of our subsidiaries and affiliates as of September30, 2018.30The following diagram illustrates our corporate structure and the place of formation and affiliation of each of our subsidiaries and affiliates as of December31, 2017.Contractual Arrangements with Beijing Zhong Chuan Shi Xun Technology Limited’s Subsidiaries and Their Respective ShareholdersTo comply with the PRC legal restrictions on foreign ownership of companies that operate mobile application services, our subsidiaries operate in suchrestricted service areas in the PRC through certain PRC domestic companies, whose equity interests are held by certain management members or founders of the LKTechnology Ltd. Part of the registered capital of these PRC domestic companies was funded by certain management members or founders of LK Technology Ltd. LKTechnology Ltd., through its subsidiary Zhong Chuan Tian Xia Information and Technology (Shenzhen) Limited (the “WFOE”), has entered into an exclusivebusiness cooperation agreement with Beijing Zhong Chuan Shi Xun Technology Limited (“Zhong Chuan Shi Xun” or the “VIE”) the PRC domestic company, whichentitle the WFOE to receive a majority of profit of Zhong Chuan Shi Xun. In addition, Zhong Chuan Tian Xia Information and Technology (Shenzhen) Limited hasentered into certain agreements with those management members or founders, including equity interest pledge agreement of the equity interests held by thosemanagement members or founders and exclusive option agreement to acquire the equity interests in these companies when permitted by the PRC laws, rules andregulations. Details of the typical VIE structure of our significant consolidated VIE, primarily domestic companies associated with the operations such as ZhongChuan Shi Xun and its subsidiaries of Zhong Chuan Rui You, Huoerguosi Luokuang and Jiu Zhou Shi Dai, are set forth below: Exclusive Business Cooperation AgreementThe VIE has entered into an exclusive business services agreement with the WFOE, pursuant to which the WFOE provides exclusive business services tothe VIE. In exchange, the VIE pays a service fee to the WFOE which amounts to be no less than the 80% of the VIE’s aftertax profit, resulting in a transfer ofsubstantially all of the profits from the VIE to the WFOE.Exclusive Option AgreementThe VIE equity holders have granted the WFOE exclusive call options to purchase their equity interest in the VIE at an exercise price equal to the minimumprice as permitted by applicable PRC laws. The WFOE may nominate another entity or individual to purchase the equity interest, if applicable, under the call options.Each call option is exercisable subject to the condition that applicable PRC laws, rules and regulations do not prohibit completion of the transfer of the equityinterest pursuant to the call option. The VIE agrees not to distribute any dividends to the VIE equity holders without the approval of WFOE.31Equity Interest Pledge AgreementPursuant to the equity pledge agreement, the VIE equity holders have pledged all of their interests in the equity of the VIE as a continuing first prioritysecurity interest in favor of the WFOE to secure the performance of obligations by the VIEs and/or the equity holders under the exclusive business cooperationagreement. The WFOE is entitled to exercise its right to dispose of the VIE equity holders’ pledged interests in the equity of the VIE and has priority in receivingpayment by the application of proceeds from the auction or sale of such pledged interests, in the event of any breach or default under the exclusive businesscooperation agreement, if applicable. These equity pledge agreement remain in force until all the obligations under the exclusive business cooperation agreementhave been fulfilled.The exclusive business cooperation agreement and equity interest pledge agreement described above also enable the Company to receive substantially allof the economic benefits from the VIE by typically entitling the WFOE to all dividends and other distributions declared by the VIE and to any distributions orproceeds from the disposal by the VIE equity holders of their equity interests in the VIE.D. PROPERTY AND EQUIPMENTWe lease offices located at Lab 30 & Lab 32, SOHO 3Q, No 9, Guanghua Road, Chaoyang District, Beijing, which covers a floor space of 600 square meters.These leases expire at different times throughout 2018 and are renewable upon negotiation.ITEM 4A. UNRESOLVED STAFF COMMENTSNone.ITEM 5. OPERATING AND FINANCIAL REVIEW AND PROSPECTSA . OPERATING RESULTS.The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our consolidatedfinancial statements and the notes to those financial statements appearing elsewhere in this report. This discussion and analysis contains forwardlookingstatements that involve significant risks and uncertainties. As a result of many factors, such as our anticipated growth strategy, our plans to recruit moreemployees, our plans to invest in research and development to enhance our product or service lines, our future business development, results of operations andfinancial condition, expected changes in our net revenues and certain cost or expense items, our ability to attract and retain customers, trends and competitionin the enterprise mobile software application market, and the factors set forth elsewhere in this report, our actual results may differ materially from thoseanticipated in these forwardlooking statements. In light of those risks and uncertainties, there can be no assurance that the forwardlooking statementscontained in this report will in fact occur. You should not place undue reliance on the forwardlooking statements contained in this report.The forwardlooking statements speak only as of the date on which they are made, and, except to the extent required by U.S. federal securities laws, weundertake no obligation to update any forwardlooking statement to reflect events or circumstances after the date on which the statement is made or to reflectthe occurrence of unanticipated events. Further, the information about our intentions contained in this report is a statement of our intention as of the date of thisreport and is based upon, among other things, the existing regulatory environment, industry conditions, market conditions and prices and our assumptions as ofsuch date. We may change our intentions, at any time and without notice, based upon any changes in such factors, in our assumptions or otherwise.32Unless the context otherwise requires, all references to (i) “PRC” and “China” are to the People’s Republic of China; (ii) “U.S. dollar,” “$” and “US$”are to United States dollars; and (iii) “RMB”, “Yuan” and Renminbi are to the currency of the PRC or China.OverviewLuokung Technology was incorporated on October 27, 2009 under the laws of the British Virgin Islands. We are a holding company and conduct ouroperations through LK Technology Ltd., a British Virgin Islands limited liability company (“LK Technology”) and its whollyowned subsidiaries, MMB Limited andMobile Media (China) Limited and their respective subsidiaries and a contractuallycontrolled entity in the PRC named Beijing Zhong Chuan Shi Xun Technology,which hold the rights to deploy WiFi systems on about 700 trains in China, including 290 trains in which WiFi systems have already been installed and are inoperation. In May 2010, we consummated an initial public offering of our American Depository Shares, or ADSs, for gross proceeds of $16 million, and our ADSswere listed on the NASDAQ Capital Market under the ticker symbol “KONE”. Our ordinary shares are not currently listed on any trading market. Our AmericanDepository Shares (“ADSs”) were voluntarily delisted from the NASDAQ Capital Market on September 19, 2018. We have applied to NASDAQ for the listing of ourordinary shares on the NASDAQ Capital Market and received an approval for listing of Ordinary Shares on August 6, 2018, and as of the date of this transitionreport, that application and approval are currently under review.On August 17, 2018, we consummated an asset exchange transaction, pursuant to which we exchanged all issued and outstanding capital stock in TopskyInfoTech Holdings Pte Ltd., the parent of Softech, for the issued and outstanding capital stock of LK Technology (the “Asset Exchange”). In connection with theAsset Exchange, we changed our name on August 20, 2018, and on September 20, 2018, completed the issuance to the shareholders of C Media Limited, the formerparent of LK Technology, of (i) 185,412,599 of our ordinary shares, par value $0.01 per share and (ii) 1,000,000 of our preferred shares. Upon the consummation of theAsset Exchange, we ceased our previous business operations and became a company focused on the provision of WiFi and mobile application products for longdistance travelers in China.On August 25, 2018, LK Technology entered into a Stock Purchase Agreement (the “Agreement”) with the shareholders (“Shareholders”) of SuperengineHoldings Limited, a limited liability company organized under the laws of the British Virgin Islands (the “Superengine”), pursuant to which LK Technology acquiredall of the issued and outstanding capital stock of Superengine for an aggregate purchase price of US$60 million (the “Purchase Price”), which are paid by theissuance of our Ordinary Shares in an amount equal to the quotient of (x) the Purchase Price divided by (y) the average of the closing prices of the Ordinary Shareson the NASDAQ Capital Market over the 12 months period preceding July 31, 2018. We are a party to the Agreement in connection with the issuance of theOrdinary Shares and certain other limited purposes.Results of operations for the fiscal year ended December 31, 2017 compared to the fiscal year ended December 31, 2016.RevenueWe provide displaybased online advertising services to customers by integrating text description, image and video, and displaying the advertisements in aprominent position of LuoKuang Application. We recognize revenue in accordance with ASC 605, over the contractual term based on the agreements andconfirmation letters signed by both parties, commencing on the date the customer’s advertisement is displayed on our platform.For the year ended December 31, 2017, we had revenue of $26,082,417, as compared to revenue of $5,233,145 for the year ended December 31, 2016, anincrease of $20,849,272, or 398.4%, which was primarily due to the increase of our advertising clients.Cost of revenueOur cost of revenue primarily consists of depreciation, labor cost, WiFi equipment installation fees, data charges, annual payments to local railway bureau,other overhead costs.33Cost of revenue for the year ended December 31, 2017 was $5,547,779, representing a decrease of $767,725 or 12.2% as compared to $6,315,504 for the yearended December 31, 2016. The decrease was primarily attributable to the decrease in labor cost as a result of our cost control and a decrease in the number ofmaintenance staff. Additionally, data charges decreased as train passengers prefer using their mobile data, leading to a decrease in 3G and 4G data.Selling and marketing expenseOur selling and marketing expense mainly include promotional and marketing expenses and compensation for our sales and marketing personnel.Selling expense totaled $23,908,733 for the year ended December 31, 2017, as compared to $6,209,804 for the year ended December 31, 2016, an increase of$17,698,929 or 285.0%. The increase was primarily attributable to the increase in promotional and marketing activities conducted by the Company.General and administrative expenseOur general and administrative expenses consist primarily of salaries and benefits for our general and administrative personnel, rent, fees and expenses forlegal, accounting and other professional servicesGeneral and administrative expense totaled $2,451,249 for the year ended December 31, 2017, as compared to $2,108,854 for the year ended December 31,2016, an increase of $342,395 or 16.2%.Research and development expenses.Research and development expenses primarily consist of salaries and benefits for research and development personnel.Research and development expenses totaled $1,046,198 for the year ended December 31, 2017, as compared to $2,882,202 for the year ended December 31,2016, a decrease of $1,836,004 or 63.7%. The decrease was primarily attributable to the Company reduced its expenses in research and development temporarily asour products are quite stable at present.Loss from operationsAs a result of the factors described above, for the year ended December 31, 2017, loss from operations amounted to $6,871,542, as compared to loss fromoperations of $12,283,219 for the year ended December 31, 2016, a decrease of $5,411,677, or 44.1%.Other income/expenseOther income/expense mainly include interest income from bank deposits, foreign currency transaction gain, and loss from investment.Net lossAs a result of the factors described above, our net loss was $6,810,454 for the year ended December 31, 2017, compared to net loss of $13,049,031 for theyear ended December 31, 2016, a decrease of $6,238,577 or 47.8%.Foreign currency translation adjustmentOur reporting currency is the U.S. dollar. The functional currency of our parent company and subsidiaries of Merchant Supreme and Prime Cheer is the U.S.dollar and the functional currency of the Company’s subsidiaries incorporated in China is the Chinese Renminbi (“RMB”). The financial statements of oursubsidiaries incorporated in China are translated to U.S. dollars using period end rates of exchange for assets and liabilities, and average rates of exchange (for theperiod) for revenue, costs, and expenses. Net gains and losses resulting from foreign exchange transactions are included in the consolidated statements ofoperations and comprehensive loss. As a result of foreign currency translations, which are a noncash adjustment, we reported a foreign currency translation gain of$90,671 for the year ended December 31, 2017, as compared to a foreign currency translation loss of $387,375 for the year ended December 31, 2016. This noncashgain had the effect of increasing/decreasing our reported comprehensive income/loss.34Comprehensive lossAs a result of our foreign currency translation adjustment, we had comprehensive loss for the year ended December 31, 2017 of $6,719,783, compared tocomprehensive loss of $12,661,656 for the year ended December 31, 2016.B. LIQUIDITY AND CAPITAL RESOURCESThe information contained in “Item 5. Operating and Financial Review and Prospects – A. Operating Results – Liquidity and Capital Resources” isincorporated herein by reference.C. RESEARCH AND DEVELOPMENT, PATENTS AND LICENSES, ETC.The discussions of our research and development activities were contained in “Item 4. Information about our Company – B. Business Overview –Research and Development” and “Item 5. Operating and Financial Review and Prospects – A. Operating Results – Operating Expenses – Research and DevelopmentExpenses” are incorporated herein by reference. In the years ended December 31, 2017 and 2016, we spent $1,046,198 and $2,882,202, respectively, on research anddevelopment activities.D. TREND INFORMATION.Industry and Market OutlookChina has awarded licenses to mobile phone companies to provide the superfast 4G network to customers. The licenses, which are designed to give mobilephone users faster access to services, were granted by the government to China Mobile, China Unicom Hong Kong and China Telecom. Since the grants, ChinaMobile has offered 4G to subscribers from December 18, 2013. China Unicom and China Telecom, the country's other two major carriers, also offer 4G wireless. Thenumber of China Mobile 4G customers has exceeded 900 million by the end of October in 2017. The move greatly bolstered business for telecom equipment makersand a range of other companies.Under China’s 12th FiveYear Plan, a key priority is for China to transition from “Made in China” to “Designed in China.” In order to achieve this goal, thegovernment plans to heavily invest in science and technology education and R&D so as to further develop China’s intellectual property rights system and support“NextGeneration IT” as a Strategic Emerging Industry (SEI). Additionally, China plans to upgrade the technological capabilities of private and public services,including “triple play” services (the convergence of telecom, broadcasting and Internet networks), ecommerce, and egovernment and statistics systems.Furthermore, the government plans to invest in R&D of the "Internet of things" and cloud computing, and develop digital and virtual technologies.E. OFFBALANCE SHEET ARRANGEMENTSWe have not entered into any financial guarantees or other commitments to guarantee the payment obligations of any third parties. We have not enteredinto any derivative contracts that are indexed to our shares and classified as shareholder’s equity, or that are not reflected in our consolidated financial statements.Furthermore, except for the mortgage referenced above, we do not have any retained or contingent interest in assets transferred to an unconsolidated entity thatserves as credit, liquidity or market risk support to such entity. We do not have any variable interest in any unconsolidated entity that provides financing, liquidity,market risk or credit support to us or engages in leasing, hedging or research and development services with us.35F. TABULAR DISCLOSURE OF CONTRACTUAL OBLIGATIONSAs of December 31, 2017, we did not have any contractual obligations required to be disclosed in this Item 5.F. ITEM 6. DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES.A. DIRECTORS AND SENIOR MANAGEMENT.Executive Officers and DirectorsThe following table sets forth the names and ages as of the date of this transition report of each of our executive officers and directors:NameAgePositionXuesong Song50Chief Executive Officer, Chairman and DirectorDongpu Zhang50PresidentJie Yu34Chief Financial OfficerKegang Peng46Vice President and DirectorChuang Tao51DirectorDennis Galgano (1)(2)69Director (Independent)Jin Shi (1)(2)49Director (Independent)Jiming Ha (1)(3)56Director (Independent)Zhihao Xu (3)42Director (Independent)(1)Member of the Audit Committee.(2)Member of the Compensation Committee.(3)Member of the Nominating and Corporate Governance Committee.Set forth below is biographical information concerning our executive officers and directors.Xuesong Song is a cofounder of C Media Limited and served as its chairman of the board of directors and chief executive officer from 2012 until theconsummation of the AEA. From February 2014 through April 2017, Mr. Song served as a director of Seven Stars Cloud Group, Inc. (NASDAQ: SSC) and fromJanuary 2013 through February 2015, Mr. Song served as a director of Pingtan Marine Enterprise Ltd. (NASDAQ: PME). From May 2006 through January 2009, Mr.Song served as the Chairman of the Board of ChinaGrowth North Acquisition Corporation, a special purpose acquisition company, which acquired UIB GroupLimited in January 2009, in which he remains a director. Mr. Song has been a principal of Chum Capital Group Limited since August 2001, a merchant banking firmthat invests in growth Chinese companies and advises them in financings, mergers & acquisitions and restructurings, and chief executive officer of Beijing ChumInvestment Co., Ltd. since December 2001. Mr. Song has been a director of Mobile Vision Communication Ltd. since July 2004. Mr. Song received a Master’s ofBusiness Administration degree from Oklahoma City/Tianjin Program.Dongpu Zhang was appointed as the President of the Company effective on August 25, 2018. Mr. Dongpu Zhang has served as the General Manager ofSuperEngine Graphics Software Technology Development (Suzhou) Co., Ltd. (“SuperEngine Suzou”) and the Chief Executive Officer of SuperEngine HoldingLimited since September 2016. From February, 2014 to August, 2016, Mr. Zhang served as vice president of Industrial Development Group under China Fortune LandDevelopment Co., Ltd. From March, 2009 to February, 2014, Mr. Zhang served as the vice president of Aerospace Science and Technology Holding Group Co., Ltd.Mr. Zhang receive his Master Degree of Computer Science from Harbin Institute of Technology in 1994 and his Bachelor Degree of information system fromChangsha Institute of technology in 1991.Jie Yu served as the chief financial officer of C Media Limited from January 2018 until the consummation of the asset exchange transactions. From June 2016to January 2018, Mr. Yu served as chief financial officer and secretary of the board of directors of MTI Environment Group Limited. Prior to joining MTI, Mr. Yuserved as the senior manager at DA HUA CPA from November 2012 to May 2016. Previously, Mr. Yu served as the manager at Crowe Horwath (Hong Kong) CPA.Mr. Yu holds a bachelor degree in accounting and finance from University of Auckland and postgraduate diploma in accounting from University of Auckland.36Kegang Peng served as the Vice Chairman of the board of directors C Media Limited from October 2014 to the consummation of the asset exchangetransactions, and is now a member of the Company’s board of directors. Previously, from 2012 to 2014, Mr. Peng was chairman of the board and founder of JiangsuSuqian Jinghaiboyuan Information and Technology Co., Ltd. Mr. Peng studied at Beijing University of Aeronautics and Astronautics majoring computer andapplication.20F 1 f20f2017_luokungtech.htm AMENDMENT NO. 1 TO FORM 20FUNITED STATESSECURITIES AND EXCHANGE COMMISSIONWASHINGTON, D.C. 20549FORM 20F☐ REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934OR☐ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934For the Fiscal year ended _____________OR☒ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934For the transition period from October 1, 2017 to December 31, 2017☐ SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934Date of event requiring this shell company report Commission file number: 00134738Luokung Technology Corp.(Exact name of Registrant as specified in its charter)Not applicable(Translation of Registrant’s name into English)British Virgin IslandsLAB 32, SOHO 3Q, No 9, Guanghua Road, Chaoyang District, BeijingPeople’s Republic of China, 100020(Jurisdiction of incorporation or organization)(Address of principal executive offices)Mr. Muqiao GengLAB32, SOHO 3Q, No 9, Guanghua Road, Chaoyang District, BeijingPeople’s Republic of China 100020Tel: (86) 1085866721(Name, telephone, Email and/or facsimile number and address of company contact person)Securities registered or to be registered pursuant to Section 12(b) of the Act:Title of each className of each exchange on which registeredOrdinary shares, par value $0.01 per shareNonePreferred shares, par value $0.01 per shareNoneSecurities registered or to be registered pursuant to Section 12(g) of the Act:none(Title of Class)Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act:none(Title of Class)Indicate the number of outstanding shares of each of the issuer’s classes of capital or common stock as of the close of the period covered by the transitionreport. 187,097,599 Ordinary Shares, including 186,383,224 Ordinary Shares represented by 714,375 American Depositary Shares, and 1,000,000 Preferred Sharesoutstanding as of September 20, 2018.Indicate by check mark if the registrant is a wellknown seasoned issuer, as defined in Rule 405 of the Securities Act. ☐ Yes ☒ NoIf this report is an annual or transition report, indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of theSecurities Exchange Act of 1934. ☐ Yes ☒ NoIndicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirementsfor the past 90 days. ☒ Yes ☐ NoIndicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File requiredto be submitted and posted pursuant to Rule 405 of Regulation ST (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that theregistrant was required to submit and post such files). ☒ Yes ☐ NoIndicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a nonaccelerated filer. See definition of “accelerated filer andlarge accelerated filer” in Rule 12b2 of the Exchange Act. (Check one):Large accelerated filer ☐ Accelerated filer ☐ Nonaccelerated filer ☒Indicate by check mark which basis of accounting the registrant has used to prepare the financial statements included in this filing.U.S. GAAP ☒International Financial Reporting Standards as issuedby the International Accounting Standards Board ☐Other ☐If “Other” has been checked in response to the previous question, indicate by check mark which financial statement item the registrant has elected tofollow. Item 17 ☐ Item 18 ☐If this is an transition report, indicate by check mark whether the registrant is a shell company (as defined in Rule 12b2 of the ExchangeAct). ☐ Yes ☒ NoExplanatory NoteLuokung Technology Corp. (the “Company”) is filing this transition report on Form 20F (“Transition Report”) in connection with the completion of theexchange of certain of its assets for substantially all of the assets of C Media Limited (“C Media”) pursuant to that Asset Exchange Agreement, dated January 25,2018 (the “Original AEA”), as supplemented by the Addendum to Asset Exchange Agreement, dated October 3, 2018 (the “Addendum” and together with theOriginal AEA, the “AEA”). Following the consummation of the AEA, on October 4, 2018, the Company changed its fiscal year end from September 30 to the fiscalyear end used by C Media, December 31. This Transition Report covers the threemonth period from Octorber 1, 2017 to December 31, 2017, and the fiscal yearsdescribed herein.In this transition report:●References to the “Company”, “we”, “our” and “us” are to Luokung Technology Corp. and its consolidated subsidiaries and variable interestentity, except as the context otherwise requires;●This transition report on Form 20F covers the threemonth period from October 1, 2017 through December 31, 2017 (the “Transition Period”) andreflects our financial results thereof. Prior to this transition report on Form 20F, our two most recent annual reports on Form 20F cover the fiscalyears ended September 30, 2017 and September 30, 2016, respectively, and reflect financial results for the respective twelvemonth periods fromOctober 1 to September 30. Unless otherwise noted, all references to years are to the calendar year from January 1 to December 31 and referencesto our fiscal year or years are to the fiscal year or years which, prior to the Transition Period, ended September 30, while from and after theTransition Period, ended December 31;●References to an “ADS” are to an American Depositary Share, each of which represents one of our Ordinary Shares with a par value of $.01 pershare.Special Note Regarding Forwardlooking StatementsThis transition report contains forwardlooking statements that involve risks and uncertainties. These statements involve known and unknown risks,uncertainties and other factors that may cause our actual results, performance or achievements to be materially different from those expressed or implied by theforwardlooking statements.You can identify these forwardlooking statements by words or phrases such as “may,” “will,” “expect,” “anticipate,” “aim,” “estimate,” “intend,” “plan,”“believe,” “likely to” or other similar expressions. We have based these forwardlooking statements largely on our current expectations and projections about futureevents and financial trends that we believe may affect our financial condition, results of operations, business strategy and financial needs. You should not placeundue reliance on these forwardlooking statements, which apply only as of the date of this transition report. These forwardlooking statements include:●our future business development, results of operations and financial condition;●expected changes in our net revenues and certain cost or expense items;●our ability to attract and retain customers; and●trends and competition in the enterprise mobile software application market.You should read this transition report thoroughly with the understanding that our actual future results may be materially different from, and/or worse, thanwhat we expect. We qualify all of our forwardlooking statements by these cautionary statements. Other sections of this transition report include additional factorswhich could adversely impact our business and financial performance. Moreover, we operate in an evolving environment. New risk factors and uncertainties emergefrom time to time and it is not possible for our management to predict all risk factors and uncertainties, nor can we assess the impact of all factors on our business orthe extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forwardlooking statements.This transition report also contains estimates, projections and statistical data related to the market for the provision of WiFi and mobile applications inChina. This market data, including data from IDC, a leading provider of market data and intelligence, speaks as of the date it was published and includes projectionsthat are based on a number of assumptions and are not representations of fact. The market for the provision of WiFi and mobile applications in China may not growat the rates projected by the market data, or at all. The failure of the market to grow at the projected rates may materially and adversely affect our business and themarket price of our ADSs. In addition, the rapidly changing nature of the market for the provision of WiFi and mobile applications subjects any projections orestimates relating to the growth prospects or future condition of our market to significant uncertainties. If any one or more of the assumptions underlying the marketdata proves to be incorrect, actual results may differ from the projections based on these assumptions.You should not rely upon forwardlooking statements as predictions of future events. We undertake no obligation to update or revise any forwardlookingstatements, whether as a result of new information, future events or otherwise.TABLE OF CONTENTSPart IItem 1.Identity of Directors, Senior Management and Advisers.1Item 2.Offer Statistics and Expected Timetable.1Item 3.Key Information.1A.Selected Financial Data.1B.Capitalization and Indebtedness.3C.Reasons for the Offer and Use of Proceeds.3D.Risk Factors.3Item 4.Information on the Company.19A.History and Development of the Company.19B.Business Overview.20C.Organizational Structure.30D.Property, Plants and Equipment.32Item 4A.Unresolved Staff Comments.32Item 5.Operating and Financial Review and Prospects.32A.Operating Results.32B.Liquidity and Capital Resources.35C.Research and Development, Patents and Licenses, etc.35D.Trend Information.35E.Offbalance Sheet Arrangements.35F.Tabular Disclosure of Contractual Obligations.36Item 6.Directors, Senior Management and Employees.36A.Directors and Senior Management.36B.Compensation.37C.Board Practices.40D.Employees.43E.Share Ownership.43Item 7.Major Shareholders and Related Party Transactions.44A.Major Shareholders.44B.Related Party Transactions.45C.Interests of Experts and Counsel.45Item 8.Financial Information.45A.Consolidated Statements and Other Financial Information.45B.Significant Changes.46Item 9.The Offer and Listing.46A.Offer and Listing Details.46B.Plan of Distribution.47C.Markets.47D.Selling shareholders.48E.Dilution.48F.Expenses of the issue.48Item 10.Additional Information.48A.Share Capital.48B.Memorandum and Articles of Association.48C.Material Contracts.53D.Exchange Controls.54E.Taxation.61F.Dividends and Paying Agents.67G.Statement by Experts.67H.Documents on Display.67I.Subsidiary Information.68Item 11.Quantitative and Qualitative Disclosures about Market Risk.68Item 12.Description of Securities Other than Equity Securities.69A.Debt Securities.69B.Warrants and Rights.69C.Other Securities.69D.American Depositary Shares.69iPart IIItem 13.Defaults, Dividend Arrearages and Delinquencies.71Item 14.Material Modifications to the Rights of Security Holders and Use of Proceeds.71Item 15.Controls and Procedures.71Item 16.[Reserved.]72Item 16A.Audit Committee Financial Expert.72Item 16B.Code of Ethics.73Item 16C.Principal Accountant Fees and Services.73Item 16D.Exemptions from the Listing Standards for Audit Committees.73Item 16E.Purchases of Equity Securities by the Issuer and Affiliated Purchasers.73Item 16F.Change in Registrant’s Certifying Accountant.73Item 16G.Corporate Governance.73Item 16H.Mine Safety Disclosure.73Part IIIItem 17.Financial Statements.74Item 18.Financial Statements.74Item 19.Exhibits.74Index to Consolidated Financial StatementsF1iiPART IITEM 1. IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS.The directors of Luokung Technology Corp. are Xuesong Song, Kegang Peng, Dennis Galgano, Jin Shi, Jiming Ha, Zhihao Xu and Chuang Tao. Thebusiness address for our directors is LAB 32, SOHO 3Q, No 9, Guanghua Road, Chaoyang District, Beijing, People’s Republic of China.Moore Stephens CPA Limited has served as our auditor since October 5, 2018, and is located at 801806 Silvercord Tower 1, 30 Canton road, Tsimshatsui,Kowloon, Hong Kong. BDO China Shun Lun Pan Certified Public Accountants LLP served as our auditors for the last three years, and are located at 4F, No. 61Nanjing Road, Shanghai, People’s Republic of China.Garvey Schubert Barer, P.C., serves as our legal counsel in the United States, and is located at Flour Mill Building, 1000 Potomac Street NW, Suite 200,Washington, D.C., 200073501.Conyers Dill & Pearlman serves as our legal counsel with regard to the laws of the British Virgin Islands, and is located at 29th Floor, One Exchange Square,8 Connaught Place, Central, Hong Kong.ITEM 2. OFFER STATISTICS AND EXPECTED TIMETABLE.Not applicable.ITEM 3. KEY INFORMATION.A. SELECTED FINANCIAL DATA.Luokung Technology Corp. and its consolidated subsidiaries (“Luokung Technology”, “we”, “us”, or “the Company”) consummated an asset exchangeagreement pursuant to which we exchanged our existing assets with those of C Media Limited (the “Asset Exchange”) on August 17, 2018, and we changed ourname from Kingtone Wirelessinfo Solution Holding Ltd. to our current name on August 20, 2018. On October 4, 2018, in connection with the consummation of the Asset Exchange, we changed our fiscal year end from September 30 to December 31.1The selected financial data for the fiscal years ended December 31 2017 and 2016 have been derived from our audited consolidated and combined financialstatements. The selected consolidated and combined financial data should be read in conjunction with our audited financial statements and the accompanying notesand “Item 5 – Operating and Financial Review and Prospects.” Our consolidated and combined financial statements are prepared and presented in accordance withUnited States generally accepted accounting principles, or U.S. GAAP. Our historical results do not necessarily indicate our results expected for any future periods.You should not view our historical results as an indicator of our future performance.LK TECHNOLOGY LTD. AND SUBSIDIARIESSELECTED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS(IN U.S. DOLLARS)For the years ended December 31,20172016Revenues$26,082,417$5,233,145Less: Cost of revenues5,547,7796,315,504Less: Operating expenses:Selling and marketing23,908,7336,209,804General and administrative2,451,2492,108,854Research and development1,046,1982,882,202Total operating expenses27,406,18011,200,860Loss from operations(6,871,542)(12,283,219)Other income (expense):Interest expense(26,611)(4,412)Foreign exchange gains(losses)350,679(298,257)Loss from investment(428,571)Other income (expense), net(262,980)(34,572)Total other income (expense), net61,088(765,812)Loss before income taxes(6,810,454)(13,049,031)Income taxesNet loss$(6,810,454)$(13,049,031)Other comprehensive income:Foreign currency translation adjustment90,671387,375Total comprehensive loss$(6,719,783)$(12,661,656)2LK TECHNOLOGY LTD. AND SUBSIDIARIESSELECTED CONSOLIDATED BALANCE SHEETS(IN U.S. DOLLARS)As of December 31,20172016Accounts receivable, net of allowance for doubtful accounts9,729,6251,865,836Amounts due from related parties11,760,692Property and equipment, net5,044,8727,771,027Goodwill7,239,9367,239,936TOTAL ASSETS37,582,85821,114,832Accounts payable8,784,5186,446,584Accrued liabilities and other payables12,962,91211,329,613Total liabilities25,311,11333,905,520Total Shareholder’s Equity (Deficit)12,271,745(12,790,688)TOTAL LIABILITIES AND SHAREHOLDER’S EQUITY (DEFICIT)37,582,85821,114,832B. CAPITALIZATION AND INDEBTEDNESS.Not applicable.C. REASONS FOR THE OFFER AND USE OF PROCEEDS.Not applicable.D. RISK FACTORS.An investment in our ADSs and ordinary shares involves a high degree of risk. You should carefully consider the risks and uncertainties described belowtogether with all other information contained in this transition report, including the matters discussed under “Special Note Regarding ForwardLooking Statements,”before you decide to invest in our ADSs or ordinary shares. You should pay particular attention to the fact that we are a holding company with substantialoperations in China and are subject to legal and regulatory environments that in many respects differ from those of the United States. If any of the following risks, orany other risks and uncertainties that are not presently foreseeable to us, actually occur, our business, financial condition, results of operations, liquidity and ourfuture growth prospects would be materially and adversely affected. You should also consider all other information contained in this transition report beforedeciding to invest in our ADSs or ordinary shares.Risks Related to Our Company and Our IndustryThe Company had incurred negative cash flows from operating activities and net losses as of December 31, 2017. These matters raise substantial doubt aboutthe Company’s ability to continue as a going concern.The Company’s consolidated financial statements are prepared using generally accepted accounting principles in the United States of America applicableto a going concern, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. As of and for the year endedDecember 31, 2017, the Company had incurred significant operating losses and working capital deficit. The ability of the Company to continue as a going concern isdependent on the Company obtaining adequate capital to fund operating losses until it becomes profitable. If the Company is unable to obtain adequate capital, itcould be forced to cease operations. The accompanying consolidated financial statements do not include any adjustments that might be necessary if the Companyis unable to continue as a going concern.3We may undertake acquisitions, investments, joint ventures or other strategic alliances, which could have a material adverse effect on our ability to manageour business. In addition, such undertakings may not be successful.Our strategy includes plans to grow both organically and through acquisitions, participation in joint ventures or other strategic alliances. Joint venturesand strategic alliances may expose us to new operational, regulatory and market risks, as well as risks associated with additional capital requirements. We may not beable, however, to identify suitable future acquisition candidates or alliance partners. Even if we identify suitable candidates or partners, we may be unable tocomplete an acquisition or alliance on terms commercially acceptable to us. If we fail to identify appropriate candidates or partners, or complete desired acquisitions,we may not be able to implement our strategies effectively or efficiently. In addition, our ability to successfully integrate acquired companies and their operations may be adversely affected by several factors. These factorsinclude:1.diversion of management’s attention;2.difficulties in retaining customers of the acquired companies;3.difficulties in retaining personnel of the acquired companies;4.entry into unfamiliar markets;5.unanticipated problems or legal liabilities; and6.tax and accounting issues.If we fail to integrate acquired companies efficiently, our earnings, revenue growth and business could be negatively affected.Due to intense competition for highlyskilled personnel, we may fail to attract and retain enough sufficiently trained employees to support our operations; ourability to bid for and obtain new projects may be negatively affected and our revenues could decline as a result.The IT industry relies on skilled employees, and our success depends to a significant extent on our ability to attract, hire, train and retain qualifiedemployees. There is significant competition in China for professionals with the skills necessary to develop the products and perform the services we offer to ourcustomers. Increased competition for these professionals, in the mobile application design area or otherwise, could have an adverse effect on us if we experiencesignificant increase in the attrition rate among employees with specialized skills, which could decrease our operating efficiency and productivity and could lead to adecline in demand for our services.In addition, our ability to serve existing customers and business partners and obtain new business will depend, in large part, on our ability to attract, trainand retain skilled personnel that enable us to keep pace with growing demands for wifi connectivity and mobile applications, evolving industry standards andchanging customer preferences. Our failure to attract, train and retain personnel with the qualifications necessary to fulfill the needs of our existing and futurecustomers or to assimilate new employees successfully could have a material adverse effect on our business, financial condition and results of operations. Ourfailure to retain our key personnel on business development or find suitable replacements of the key personnel upon their departure may lead to shrinking newimplementation projects, which could materially adversely affect our business.4Our business depends substantially on the continuing efforts of our senior executives and other key personnel, and our business may be severely disrupted if welose their services.Our future success heavily depends upon the continued services of our senior executives and other key employees, particularly since we recentlyappointed a new chairman. We are reliant on the services of Mr. Xuesong Song, our chairman, chief executive officer and member of our board of directors. If one ormore of our senior executives or key employees is unable or unwilling to continue in his or her present position, we may not be able to replace such employee easily,or at all, we may incur additional expenses to recruit, train and retain replacement personnel, our business may be severely disrupted, and our financial condition andresults of operations may be materially adversely affected.Our business could suffer if our executives and directors compete against us and our noncompetition agreements with them cannot be enforced.If any of our senior executives or key employees joins a competitor or forms a competing company, we may lose customers, knowhow and keyprofessionals and staff members to them. Also, if any of our business development managers who keep a close relationship with our customers and businesspartners joins a competitor or forms a competing company, we may lose customers, and our revenues may be materially adversely affected. Most of our executiveshave entered, or will soon enter, into employment agreements with us that contain or will contain noncompetition provisions. However, if any dispute arisesbetween our executive officers and us, such noncompetition provisions may not be enforceable, especially in China, where all of these executive officers and keyemployees reside, in light of the uncertainties with China’s legal system. See “Risk Factors — Risks Related to Doing Business in China — Uncertainties withrespect to the PRC legal system could adversely affect us.”Our computer networks may be vulnerable to security risks that could disrupt our services and adversely affect our results of operations.Our computer networks may be vulnerable to unauthorized access, computer hackers, computer viruses and other security problems caused byunauthorized access to, or improper use of, systems by third parties or employees. A hacker who circumvents security measures could misappropriate proprietaryinformation or cause interruptions or malfunctions in operations. Computer attacks or disruptions may jeopardize the security of information stored in andtransmitted through computer systems and mobile devices of our customers. Actual or perceived concerns that our systems may be vulnerable to such attacks ordisruptions may deter customers from using our services. As a result, we may be required to expend significant resources to protect against the threat of thesesecurity breaches or to alleviate problems caused by these breaches, which could adversely affect our results of operations.If we do not continually enhance our solutions and service offerings, we may have difficulty in retaining existing customers and attracting new customers.We believe that our future success will depend, to a significant extent, upon our ability to enhance our existing applications and platform, and to introducenew features to meet the preferences and requirements of our customers in a rapidly developing and evolving market. Unexpected technical, operational, distributionor other problems could delay or prevent the introduction of one or more of these products or services, or any products or services that we may plan to introduce inthe future. Our present or future products may not satisfy the evolving preferences and tastes of our customers, and these solutions and services may not achieveanticipated market acceptance or generate incremental revenue. If we are unable to anticipate or respond adequately to the need for service or productenhancements due to resource, technological or other constraints, our business, financial condition and results of operations could be materially and adverselyaffected.5If we are unable to develop competitive new products and service offerings our future results of operations could be adversely affected.Our future revenue stream depends to a large degree on our ability to utilize our technology in a way that will allow us to offer new types of mobileapplications and services to a broader customer base. We will be required to make investments in research and development in order to continually develop newsoftware applications and related service offerings, enhance our existing platform, mobile applications and related service offerings and achieve market acceptanceof our mobile applications and service offerings. We may incur problems in the future in innovating and introducing new mobile applications and service offerings.Our developmentstage mobile applications may not be successfully completed or, if developed, may not achieve significant customer acceptance. If we are unableto successfully define, develop and introduce competitive new mobile applications, and enhance existing mobile applications, our future results of operations wouldbe adversely affected. The timely availability of new applications and their acceptance by customers are important to our future success. A delay in the developmentof new applications could have a significant impact on its results of operations.Changes in technology could adversely affect our business by increasing our costs, reducing our profit margins and causing a decline in our competitiveness.China’s wireless telecom industry, in which we operate, is characterized by rapidly changing technology, evolving industry standards, frequentintroductions of new services and solutions and enhancements as well as changing customer demands. New solutions and new technologies often render existingsolutions and services obsolete, excessively costly or otherwise unmarketable. As a result, our success depends on our ability to adapt to the latest technologicalprogress, such as the 5G standard and technologies, and to develop or acquire and integrate new technologies into our platform, mobile applications and relatedservices. Advances in technology also require us to commit substantial resources to developing or acquiring and then deploying new technologies for use in ouroperations. We must continuously train personnel in new technologies and in how to integrate existing hardware and software systems with these newtechnologies. We may not be able to adapt quickly to new technologies or commit sufficient resources to compete successfully against existing or new competitorsin bringing to market solutions and services that incorporate these new technologies. We may incur problems in the future in innovating and introducing new mobileapplications and service offerings. Our development of new mobile applications and platform enhancements may not be successfully completed or, if developed,may not achieve significant customer acceptance. If we fail to adapt to changes in technologies and compete successfully against established or new competitors,our business, financial condition and results of operations could be adversely affected.Problems with the quality or performance of our hardware, software or other systems may cause delays in the introduction of new solutions or result in the lossof customers and revenues, which could have a material and adverse effect on our business, financial condition and results of operations.Our hardware and software systems are complex and may contain defects, errors or bugs when first introduced to the market or to a particular customer, oras new versions are released. Because we cannot test for all possible scenarios, our systems may contain errors that are not discovered until after they have beeninstalled or implemented, and we may not be able to timely correct these problems. These defects, errors or bugs could interrupt or delay the completion of projectsor sales to our customers. In addition, our reputation may be damaged and we may fail to acquire new projects from existing customers or new customers. Errors mayoccur when we provide systems integration and maintenance services. Even in cases where we have agreements with our customers that contain provisionsdesigned to limit our exposure to potential claims and liabilities arising from customer problems, these provisions may not effectively protect us against such claimsin all cases and in all jurisdictions. In addition, as a result of business and other considerations, we may undertake to compensate our customers for damages arisingfrom the use of our solutions, even if our liability is limited by these provisions. Moreover, claims and liabilities arising from customer problems could also result inadverse publicity and materially and adversely affect our business, results of operations and financial condition. We currently do not carry any product or serviceliability insurance and any imposition of liability on us may materially and adversely affect our business and increase our costs, resulting in reduced revenues andprofitability.Our products may contain undetected software defects, which could negatively affect our revenues.Our software products are complex and may contain undetected defects. Although we test our products, it is possible that errors may be found or occur inour new or existing products after we have commenced commercial shipment of those products. Defects, whether actual or perceived, could result in adversepublicity, loss of revenues, product returns, a delay in market acceptance of our products, loss of competitive position or claims against us by customers. Any suchproblems could be costly to remedy and could cause interruptions, delays, or cessation of our product sales, which could cause us to lose existing or prospectivecustomers and could negatively affect our results of operations.6We may be subject to infringement, misappropriation and indemnity claims in the future, which may cause us to incur significant expenses, pay substantialdamages and be prevented from providing our services or technologies.Our success depends, in part, on our ability to carry out our business without infringing the intellectual property rights of third parties. Patent andcopyright law covering softwarerelated technologies is evolving rapidly and is subject to a great deal of uncertainty. Our selfdeveloped or licensed technologies,processes or methods may be covered by thirdparty patents or copyrights, either now existing or to be issued in the future. Any potential litigation may cause us toincur significant expenses. Thirdparty claims, if successfully asserted against us may cause us to pay substantial damages, seek licenses from third parties, payongoing royalties, redesign our services or technologies, or prevent us from providing services or technologies subject to these claims. Even if we were to prevail,any litigation would likely be costly and timeconsuming and divert the attention of our management and key personnel from our business operations.Our failure to protect our intellectual property rights may undermine our competitive position, and subject us to costly litigation to protect our intellectualproperty rights.Any misappropriation of our technology or the development of competitive technology could seriously harm our business. We regard a substantial portionof our hardware and software systems as proprietary and rely on statutory copyright, trademark, patent, trade secret laws, customer license agreements, employeeand thirdparty nondisclosure agreements and other methods to protect our proprietary rights. Nevertheless, these resources afford only limited protection and theactions we take to protect our intellectual property rights may not be adequate. In particular, third parties may infringe or misappropriate our proprietarytechnologies or other intellectual property rights, which could have a material adverse effect on our business, financial condition and results of operations. Inaddition, intellectual property rights and confidentiality protection in China may not be as effective as in the United States, and policing unauthorized use ofproprietary technology can be difficult and expensive. Further, litigation may be necessary to enforce our intellectual property rights, protect our trade secrets ordetermine the validity and scope of the proprietary rights of others. The outcome of any such litigation may not be in our favor. Any such litigation may be costlyand may divert management attention, as well as our other resources, away from our business. An adverse determination in any such litigation will impair ourintellectual property rights and may harm our business, prospects and reputation. In addition, we have no insurance coverage against litigation costs and wouldhave to bear all litigation costs in excess of the amount recoverable from other parties. The occurrence of any of the foregoing could have a material adverse effecton our business, financial condition and results of operations. Our solutions incorporate a portion of, and work in conjunction with, thirdparty hardware and software solutions. If these thirdparty hardware or softwaresolutions are not available to us at reasonable costs, or at all, our results of operations could be adversely impacted.Although our hardware and software systems and mobile applications primarily rely on our own core technologies, some elements of our systemsincorporate a small portion of thirdparty hardware and software solutions. If any third party were to discontinue making their intellectual property available to us orour customers on a timely basis, or increase materially the cost of their licensing such intellectual property, or if our systems or applications failed to properlyfunction or interoperate with replacement intellectual property, we may need to incur costs in finding replacement thirdparty solutions and/or redesigning oursystems or applications to replace or function with or on replacement thirdparty proprietary technology. Replacement technology may not be available on termsacceptable to us or at all, and we may be unable to develop alternative solutions or redesign our systems or applications on a timely basis or at a reasonable cost. Ifany of these were to occur, our results of operations could be adversely impacted.7Our ability to sell our products is highly dependent on the quality of our service and support offerings, and our failure to offer high quality service could have amaterial adverse effect on our ability to market and sell our products.Our customers depend upon our customer service and support staff to resolve issues relating to our products. Highquality support services are critical forthe successful marketing and sale of our products. If we fail to provide highquality support on an ongoing basis, our customers may react negatively and we maybe materially and adversely affected in our ability to sell additional products to these customers. This could also damage our reputation and prospects with potentialcustomers. Our failure to maintain highquality support services could have a material and adverse effect on our business, results of operations and financialcondition.Weaknesses in our internal controls over financial reporting or disclosure controls and procedures may have a material adverse effect on our business, theprice of our ordinary shares, operating results and financial condition.We are required to establish and maintain appropriate internal controls over financial reporting and disclosure controls and procedures. Pursuant to Section404 of the SarbanesOxley Act of 2002 and the related rules adopted by the Securities and Exchange Commission, every public company is required to include amanagement report on its internal controls over financial reporting in its transition report, which contains management’s assessment of the effectiveness of thecompany’s internal controls over financial reporting. This requirement first applied to our annual report on Form 20F for the fiscal year ended on September 30,2011. In connection with our assessments of our disclosure controls and procedures and internal controls over financial reporting, management concluded that as ofSeptember 30, 2018, our disclosure controls and procedures and our internal controls over financial reporting were not effective due to lack of U.S. generallyaccepted accounting principles (“U.S. GAAP”) expertise in our current accounting team. Please refer to the discussion under Item 15, “Controls and Procedures” forfurther discussion of our material weakness as of December 31, 2017. Should we be unable to remediate the material weakness promptly and effectively, suchweakness could harm our operating results, result in a material misstatement of our financial statements, cause us to fail to meet our financial reporting obligations orprevent us from providing reliable and accurate financial reports or avoiding or detecting fraud. This, in turn, could result in a loss of investor confidence in theaccuracy and completeness of our financial reports, which could have an adverse effect on the trading price of our ordinary shares. Any litigation or otherproceeding or adverse publicity relating to the material weaknesses could have a material adverse effect on our business and operating results. We have very limited insurance coverage which could expose us to significant costs and business disruption.We do not maintain any insurance coverage for our leased properties. Should any natural catastrophes such as earthquakes, floods, typhoons or any actsof terrorism occur in Beijing, China, where our head office is located and most of our employees are based, or elsewhere in China, we might suffer not onlysignificant property damages, but also loss of revenues due to interruptions in our business operations, which could have a material adverse effect on our business,operating results or financial condition.The insurance industry in China is still at an early stage of development. Insurance companies in China offer limited business insurance products, and donot, to our knowledge, offer business liability insurance. As a result, we do not have any business liability insurance coverage for our operations. Moreover, whilebusiness disruption insurance is available, we have determined that the risks of disruption and cost of the insurance are such that we do not require it at this time.Any business disruption, litigation or natural disaster might result in substantial costs and diversion of resources, particularly if it affects our technology platformswhich we depend on for delivery of our software and services, and could have a material adverse effect on our financial condition and results of operations.We may be liable to our customers for damages caused by unauthorized disclosure of sensitive and confidential information, whether through our employees orotherwise.We are typically required to manage, utilize and store sensitive or confidential customer data in connection with the products and services we provide.Under the terms of our customer contracts, we are required to keep such information strictly confidential. We seek to implement specific measures to protectsensitive and confidential customer data. We require our employees to enter into nondisclosure agreements to limit such employees’ access to, and distribution of,our customers’ sensitive and confidential information and our own trade secrets. We can give no assurance that the steps taken by us in this regard will be adequateto protect our customers’ confidential information. If our customers’ proprietary rights are misappropriated by our employees, in violation of any applicableconfidentiality agreements or otherwise, our customers may consider us liable for that act and seek damages and compensation from us. However, we currently donot have any insurance coverage for mismanagement or misappropriation of such information by our employees. Any litigation with respect to unauthorizeddisclosure of sensitive and confidential information might result in substantial costs and diversion of resources and management attention.8We may face intellectual property infringement claims that could be timeconsuming and costly to defend. If we fail to defend ourselves against such claims, wemay lose significant intellectual property rights and may be unable to continue providing our existing products and services.It is critical that we use and develop our technology and products without infringing upon the intellectual property rights of third parties, includingpatents, copyrights, trade secrets and trademarks. Intellectual property litigation is expensive and timeconsuming and could divert management’s attention from ourbusiness. A successful infringement claim against us, whether with or without merit, could, among others things, require us to pay substantial damages, developnoninfringing technology, or rebrand our name or enter into royalty or license agreements that may not be available on acceptable terms, if at all, and cease making,licensing or using products that have infringed a third party’s intellectual property rights. Protracted litigation could also result in existing or potential customersdeferring or limiting their purchase or use of our products until resolution of such litigation, or could require us to indemnify our customers against infringementclaims in certain instances. Also, we may be unaware of intellectual property registrations or applications relating to our services that may give rise to potentialinfringement claims against us. Parties making infringement claims may be able to obtain an injunction to prevent us from delivering our services or usingtechnology containing the allegedly infringing intellectual property. Any intellectual property litigation could have a material adverse effect on our business, resultsof operations or financial condition. Seasonality and fluctuations in our customers’ spending cycle and other factors can cause our revenues and operating results to vary significantly from quarterto quarter and from year to year.Our revenues and operating results will vary significantly from quarter to quarter and from year to year due to a number of factors, many of which areoutside of our control. Our new lines of business acquired upon the consummation of the asset exchange transaction discussed below see higher customer use andactivity during the Chinese New Year holiday than other times during the year when rail travel is high, which lead to higher revenue during this period as morecustomers would like to place more advertising. Due to these and other factors, our operating results may fluctuate significantly from quarter to quarter and fromyear to year. These fluctuations are likely to continue in the future, and operating results for any period may not be indicative of our future performance in any futureperiod.Our corporate actions are substantially controlled by our principal shareholders, who can cause us to take actions in ways you may not agree with.Mr. Xuesong Song, our chairman, chief executive officer and a member of our board of directors, beneficially owns 19.31% of our outstanding ordinaryshares and 1,000,000 preferred shares, and each preferred share has the right to 399 votes at a meeting of the members of the Company. Our officers and directors asa group beneficially own an aggregate of approximately 33.69% of our outstanding ordinary shares. These shareholders, acting individually or as a group, couldexert control and substantial influence over matters such as electing directors, amending our constitutional documents, and approving acquisitions, mergers or otherbusiness combination transactions. This concentration of ownership and voting power may also discourage, delay or prevent a change in control of our company,which could deprive our shareholders of an opportunity to receive a premium for their shares as part of a sale of our company and might reduce the price of ourshares. Alternatively, our controlling shareholders may cause a merger, consolidation or change of control transaction even if it is opposed by our othershareholders, including those who purchase shares in this offering.9We depend on a small number of customers to derive a significant portion of our revenues. If we were to become dependent again upon a few customers, suchdependency could negatively impact our business, operating results and financial condition.We derived a material portion of our revenues from a small number of customers. In the years ended December 31, 2017 and 2016, our five largestcustomers accounted for 99.8% and 78.5% of our total sales, respectively, and our largest customer Guangdong Zhanshi Media Advertising Co., Ltd. accounted forapproximately 80.8% of our total sales during for the fiscal year ended December 31, 2017. As our customer base may change from yeartoyear, during such yearsthat the customer base is highly concentrated, the fluctuation of our sales to any of such major customers could have a material adverse effect on our business,operating results and financial condition. Moreover, our high customer base concentration may also adversely affect our ability to negotiate contract prices withthese customers, which may in turn materially and adversely affect our results of operations.Our historical outstanding accounts receivable have been relatively high. Inability to collect our accounts receivable on a timely basis, if at all, couldmaterially and adversely affect our financial condition, liquidity and results of operations.Historically, our outstanding accounts receivable have been relatively high. As of December 31, 2017 and 2016, our outstanding accounts receivable beforeimpairment were $10.4 million and $2.10 million, respectively. Although we conduct credit evaluations of our customers, we generally do not require collateral orother security from our customers. In addition, we have had a relatively high customer concentration. The outstanding accounts receivable balance for our largestcustomer was 45.3% and 38.5% of our total accounts receivable balance as of December 31, 2017 and 2016, respectively. As a result, an extended delay or default inpayment relating to a significant account would likely have a material and adverse effect on the aging schedule and turnover days of our accounts receivable. Ourinability to collect our accounts receivable on a timely basis, if at all, could materially and adversely affect our financial condition, liquidity and results of operations.Risks Related to Doing Business in ChinaAdverse changes in political and economic policies of the PRC government could have a material adverse effect on the overall economic growth of China,which could reduce the demand for our services and materially and adversely affect our competitive position.Substantially all of our business operations are conducted in China. Accordingly, our business, results of operations, financial condition and prospects aresubject to a significant degree to economic, political and legal developments in China. Although the Chinese economy is no longer a planned economy, the PRCgovernment continues to exercise significant control over China’s economic growth through direct allocation of resources, monetary and tax policies, and a host ofother government policies such as those that encourage or restrict investment in certain industries by foreign investors, control the exchange between RMB andforeign currencies, and regulate the growth of the general or specific market. These government involvements have been instrumental in China’s significant growthin the past 30 years. The reorganization of the telecommunications industry encouraged by the PRC government has directly affected our industry and our growthprospect. In response to the recent global and Chinese economic downturn, the PRC government has adopted policy measures aimed at stimulating the economicgrowth in China. If the PRC government’s current or future policies fail to help the Chinese economy achieve further growth or if any aspect of the PRCgovernment’s policies limits the growth of the telecommunications industry in China or our industry or otherwise negatively affects our business, our growth rate orstrategy, our results of operations could be adversely affected as a result. Our business benefits from certain government tax incentives. Expiration, reduction or discontinuation of, or changes to, these incentives will increase our taxburden and reduce our net income.Under the PRC Enterprise Income Tax Law passed in 2007 and the implementing rules, both of which became effective on January 1, 2008, or the New EITLaw, a unified enterprise income tax rate of 25% and unified tax deduction standard is applied equally to both domesticinvested enterprises and foreigninvestedenterprises, or FIEs. Enterprises established prior to March 16, 2007 eligible for preferential tax treatment in accordance with the then tax laws and administrativeregulations shall gradually become subject to the New EIT Law rate over a fiveyear transition period starting from the date of effectiveness of the New EIT Law.However, certain qualifying hightechnology enterprises may still benefit from a preferential tax rate of 15% if they own their core intellectual properties and they areenterprises in certain Statesupported hightech industries to be later specified by the government. As a result, if our PRC subsidiaries qualify as “hightechnologyenterprises,” they will continue to benefit from the preferential tax rate of 15%, subject to transitional rules implemented from January 1, 2008. Our subsidiary, BeijingZhong Chuan Shi Xun Technology Limited, is qualified as a “hightechnology enterprise” until the end of the November 2018, and therefore it had benefited fromthe preferential tax rate of 15%, subject to transitional rules implemented on January 1, 2008. Although we intend to apply for a renewal of this qualification, if BeijingZhong Chuan Shi Xun ceases to qualify as a “hightechnology enterprise”, or the tax authorities change their position on our preferential tax treatments in thefuture, our future tax liabilities may materially increase, which could materially and adversely affect our financial condition and results of operations.10If we were deemed a “resident enterprise” by PRC tax authorities, we could be subject to tax on our global income at the rate of 25% under the New EIT Lawand our nonPRC shareholders could be subject to certain PRC taxes.Under the New EIT Law and the implementing rules, both of which became effective January 1, 2008, an enterprise established outside of the PRC with “defacto management bodies” within the PRC may be considered a PRC “resident enterprise” and will be subject to the enterprise income tax at the rate of 25% on itsglobal income as well as PRC enterprise income tax reporting obligations. The implementing rules of the New EIT Law define “de facto management” as “substantialand overall management and control over the production and operations, personnel, accounting, and properties” of the enterprise. However, as of the date of thistransition report, no final interpretations on the implementation of the “resident enterprise” designation are available. Moreover, any such designation, when madeby PRC tax authorities, will be determined based on the facts and circumstances of individual cases. Therefore, if we were to be considered a “resident enterprise”by the PRC tax authorities, our global income would be taxable under the New EIT Law at the rate of 25% and, to the extent we were to generate a substantial amountof income outside of PRC in the future, we would be subject to additional taxes. In addition, the dividends we pay to our nonPRC enterprise shareholders and gainsderived by such shareholders or ADS or ordinary share holders from the transfer of our shares or ADSs may also be subject to PRC withholding tax at the rate up to10%, if such income were regarded as Chinasourced income.Our holding company structure may limit the payment of dividends.We have no direct business operations, other than our ownership of our subsidiaries. While we have no current intention of paying dividends, should wedecide in the future to do so, as a holding company, our ability to pay dividends and meet other obligations depends upon the receipt of dividends or otherpayments from our operating subsidiaries and other holdings and investments. Current PRC regulations permit our PRC subsidiaries to pay dividends to us only outof their accumulated profits, if any, determined in accordance with Chinese accounting standards and regulations. In addition, each of our subsidiaries in China isrequired to set aside at least 10% of its aftertax profits each year, if any, to fund a statutory reserve until such reserve reaches 50% of its registered capital. Thesereserves are not distributable as cash dividends. Furthermore, if our subsidiaries in China incur debt on their own behalf in the future, the instruments governing thedebt may restrict their ability to pay dividends or make other payments to us. As a result, there may be limitations on the ability of our PRC subsidiaries to paydividends or make other investments or acquisitions that could be beneficial to our business or otherwise fund and conduct our business.In addition, under the New EIT Law and the implementing rules that became effective on January 1, 2008, dividends generated from the business of our PRCsubsidiaries after January 1, 2008 and payable to us may be subject to a withholding tax rate of 10% if the PRC tax authorities subsequently determine that we are anonresident enterprise, unless there is a tax treaty with China that provides for a different withholding arrangement.Uncertainties with respect to the PRC legal system could adversely affect us.We conduct all of our business through our subsidiaries in China. Our operations in China are governed by PRC laws and regulations. Our PRCsubsidiaries are generally subject to laws and regulations applicable to foreign investments in China and, in particular, laws and regulations applicable to whollyforeignowned enterprises. The PRC legal system is based on statutes. Prior court decisions may be cited for reference but have limited precedential value.11Since 1979, PRC legislation and regulations have significantly enhanced the protections afforded to various forms of foreign investments in China.However, China has not developed a fully integrated legal system and recently enacted laws and regulations may not sufficiently cover all aspects of economicactivities in China. In particular, because these laws and regulations are relatively new, and because of the limited volume of published decisions and theirnonbinding nature, the interpretation and enforcement of these laws and regulations involve uncertainties. In addition, the PRC legal system is based in part ongovernment policies and internal rules (some of which are not published on a timely basis or at all) that may have a retroactive effect. As a result, we may not beaware of our violation of these policies and rules until some time after the violation. In addition, any litigation in China may be protracted and result in substantialcosts and diversion of resources and management attention.PRC regulation of loans and direct investment by offshore holding companies to PRC entities may delay or prevent us from using the proceeds of our May2010 public offering to make loans or additional capital contributions to our PRC operating subsidiaries, which could materially and adversely affect ourliquidity and our ability to fund and expand our business.In utilizing the proceeds of our May 2010 public offering as an offshore holding company of our PRC operating subsidiaries, we may make loans to our PRCsubsidiaries, or we may make additional capital contributions to our PRC subsidiaries. Any loans to our PRC subsidiaries are subject to PRC regulations. Forexample, loans by us to our subsidiaries in China, which are FIEs, to finance their activities cannot exceed statutory limits and must be registered with the StateAdministration of Foreign Exchange, or SAFE. On August 29, 2008, SAFE promulgated Circular 142, a notice regulating the conversion by a foreigninvestedcompany of foreign currency into RMB by restricting how the converted RMB may be used. The notice requires that RMB converted from the foreign currencydenominated capital of a foreigninvested company may only be used for purposes within the business scope approved by the applicable governmental authorityand may not be used for equity investments within the PRC unless specifically provided for otherwise. The foreign currencydenominated capital shall be verified byan accounting firm before converting into RMB. In addition, SAFE strengthened its oversight over the flow and use of RMB funds converted from the foreigncurrencydenominated capital of a foreigninvested company. To convert such capital into RMB, the foreigninvested company must report the use of such RMB tothe bank, and the RMB must be used to the reported purposes. According to Circular 142, change of the use of such RMB without approval is prohibited. Inaddition, such RMB may not be used to repay RMB loans if the proceeds of such loans have not yet been used. Violations of Circular 142 may result in severepenalties, including substantial fines as set forth in the Foreign Exchange Administration Rules.We may also decide to finance our subsidiaries by means of capital contributions. These capital contributions may need approval from the PRC Ministry ofCommerce, or MOFCOM, or its local counterpart. We may not be able to obtain these government approvals on a timely basis, if at all, with respect to future capitalcontributions by us to our PRC subsidiaries. If we fail to receive such approvals in such cases when approval is required, our ability to use the proceeds of our May2010 public offering and to capitalize our PRC operations may be negatively affected, which could adversely affect our liquidity and our ability to fund and expandour business.Governmental control of currency conversion may affect the value of your investment.The PRC government imposes controls on the convertibility of the RMB into foreign currencies and, in certain cases, the remittance of currency out ofChina. We receive substantially all of our revenues in RMB. Under our current corporate structure, our income is primarily derived from dividend payments from ourPRC subsidiaries. Shortages in the availability of foreign currency may restrict the ability of our PRC subsidiaries to remit sufficient foreign currency to paydividends or other payments to us, or otherwise satisfy their foreign currency denominated obligations. Under existing PRC foreign exchange regulations, paymentsof current account items, including profit distributions, interest payments and expenditures from traderelated transactions, can be made in foreign currencieswithout prior approval from SAFE by complying with certain procedural requirements. However, approval from appropriate government authorities is required whereRMB is to be converted into foreign currency and remitted out of China to pay capital expenses such as the repayment of loans denominated in foreign currencies.The PRC government may also at its discretion restrict access in the future to foreign currencies for current account transactions. If the foreign exchange controlsystem prevents us from obtaining sufficient foreign currency to satisfy our currency demands, we may not be able to pay dividends in foreign currencies to ourshareholders, including holders of our ADSs or ordinary shares.12Fluctuation in the value of the RMB may have a material adverse effect on the value of your investment.The value of the RMB against the U.S. dollar and other currencies may fluctuate and is affected by, among other things, changes in political and economicconditions. On July 21, 2005, the PRC government changed its decadeold policy of pegging the value of the RMB to the U.S. dollar. Under the new policy, the RMBis permitted to fluctuate within a narrow and managed band against a basket of certain foreign currencies. This change in policy has resulted in an approximate26.8% appreciation of the RMB against the U.S. dollar between July 21, 2005 and September 30, 2015. Provisions on Administration of Foreign Exchange, asamended in August 2008, further changed China’s exchange regime to a managed floating exchange rate regime based on market supply and demand. Since reachinga high against the U.S. dollar in July 2008, however, the RMB has traded within a narrow band against the U.S. dollar, remaining within 1% of its July 2008 high butnever exceeding it. As a consequence, the RMB has fluctuated sharply since July 2008 against other freelytraded currencies, in tandem with the U.S. dollar. InAugust 2015, the PRC Government devalued its currency by approximately 3%, representing the largest yuan depreciation for 20 years. Concerns remain thatChina’s slowing economy, and in particular its exports, will need a stimulus that can only come from further cuts in the exchange rate.It is difficult to predict how long the current situation may continue and when and how it may change again as the People’s Bank of China may regularlyintervene in the foreign exchange market to achieve economic policy goals. Substantially all of our revenues and costs are denominated in the RMB, and asignificant portion of our financial assets are also denominated in RMB. We principally rely on dividends and other distributions paid to us by our subsidiaries inChina. Any significant revaluation of the RMB may materially and adversely affect our cash flows, revenues, earnings and financial position, and the value of, andany dividends payable on, our ADSs or ordinary shares in U.S. dollars. Any fluctuations of the exchange rate between the RMB and the U.S. dollar could also resultin foreign currency translation losses for financial reporting purposes.PRC laws and regulations governing our businesses. If we are found to be in violation of such PRC laws and regulations, we could be subject to sanctions. Inaddition, changes in such PRC laws and regulations may materially and adversely affect our business.There are substantial uncertainties regarding the interpretation and application of PRC laws and regulations, including, but not limited to, the laws andregulations governing our business. These laws and regulations are relatively new and may be subject to change, and their official interpretation and enforcementmay involve substantial uncertainty. The effectiveness of newly enacted laws, regulations or amendments may be delayed, resulting in detrimental reliance byforeign investors. New laws and regulations that affect existing and proposed future businesses may also be applied retroactively.The PRC government has broad discretion in dealing with violations of laws and regulations, including levying fines, revoking business and other licensesand requiring actions necessary for compliance. In particular, licenses and permits issued or granted to us by relevant governmental bodies may be revoked at a latertime by higher regulatory bodies. We cannot predict the effect of the interpretation of existing or new PRC laws or regulations on our businesses. We cannot assureyou that our current ownership and operating structure would not be found in violation of any current or future PRC laws or regulations. As a result, we may besubject to sanctions, including fines, and could be required to restructure our operations or cease to provide certain services. In addition, any litigation in China maybe protracted and result in substantial costs and diversion of resources and management attention. Any of these or similar actions could significantly disrupt ourbusiness operations or restrict us from conducting a substantial portion of our business operations, which could materially and adversely affect our business,financial condition and results of operations.13If we were required to obtain the prior approval of the China Securities Regulatory Commission, or CSRC, of the listing and trading of our ADSs on theNASDAQ Capital Market, we may face regulatory actions or other sanctions from the CSRC or other PRC regulatory agencies.On August 8, 2006, six PRC regulatory agencies, including the Ministry of Commerce, the State Assets Supervision and Administration Commission, theState Administration for Taxation, the State Administration for Industry and Commerce, the CSRC and the SAFE, jointly issued the Regulations on Mergers andAcquisitions of Domestic Enterprises by Foreign Investors, which became effective on September 8, 2006 (the “New M&A Rules”). This regulation, among otherthings, includes provisions that purport to require that an offshore special purpose vehicle formed for the purposes of overseas listing of equity interests in PRCcompanies and controlled directly or indirectly by PRC companies or individuals obtain the approval of the CSRC prior to the listing and trading of such specialpurpose vehicle’s securities on an overseas stock exchange. On September 21, 2006, the CSRC published on its official website procedures regarding its approval ofoverseas listings by special purpose vehicles. The CSRC approval procedures require the filing of a number of documents with the CSRC and it would take severalmonths to complete the approval process, if practicable at all. The application of this new PRC regulation remains unclear with no consensus currently existingamong leading PRC law firms regarding the scope of the applicability of the CSRC approval requirement. Prior to our May 2010 initial public offering, our PRC counsel has advised us that, based on its understanding of the current PRC laws and regulations aswell as the procedures announced on September 21, 2006: (i) Softech was directly incorporated by Topsky as a foreign investment enterprise under PRC law;therefore, there was no acquisition of the equity of a “PRC domestic company” as defined under the New M&A Rules; and (ii) the contractual arrangementsbetween Kingtone Information and Softech were not clearly defined and considered as the transaction which shall be applied to the New M&A Rules. Therefore, wedid not seek prior CSRC approval for our initial public offering.However, if the CSRC required that we obtain its approval prior to the completion of our initial public offering and the listing of our ADSs on the NASDAQCapital Market, we may face regulatory actions or other sanctions from the CSRC or other PRC regulatory agencies. These regulatory agencies may impose fines andpenalties on our operations in the PRC, limit our operating privileges in the PRC, delay or restrict the repatriation of the proceeds from our initial public offering intothe PRC, or take other actions that could have a material adverse effect on our business, financial condition, results of operations, reputation and prospects, as wellas the trading price of our shares.Also, if the CSRC requires that we obtain its approval, we may be unable to obtain a waiver of the CSRC approval requirements if and when procedures areestablished to obtain such a waiver. Any uncertainties and/or negative publicity regarding this CSRC approval requirement could have a material adverse effect onthe trading price of our shares.PRC regulations relating to the establishment of offshore special purpose companies by PRC residents may subject our PRC resident shareholders to penaltiesand limit our ability to inject capital into our PRC subsidiaries, limit our PRC subsidiaries’ ability to distribute profits to us, or otherwise adversely affect us.On October 21, 2005, the SAFE issued the Notice on Issues Relating to the Administration of Foreign Exchange in Fundraising and Reverse InvestmentActivities of Domestic Residents Conducted via Offshore Special Purpose Companies, or Notice 75, which became effective as of November 1, 2005. According toNotice 75, prior registration with the local SAFE branch is required for PRC residents to establish or to control an offshore company for the purposes of financingsuch offshore company with assets or equity interests in an onshore enterprise located in the PRC, or an offshore special purpose company. An amendment toregistration or filing with the local SAFE branch by such PRC resident is also required for the injection of equity interests or assets of an onshore enterprise in theoffshore special purpose company or overseas funds raised by such offshore company, or any other material change involving a change in the capital of theoffshore special purpose company. Moreover, Notice 75 applies retroactively. As a result, PRC residents who have established or acquired control of offshorespecial purpose companies that have made onshore investments in the PRC in the past are required to have completed the relevant registration procedures with thelocal SAFE branch by March 31, 2006. To further clarify the implementation of Notice 75, the SAFE issued Circular 106 on May 29, 2007. Under Circular 106, PRCsubsidiaries of an offshore special purpose company are required to coordinate and supervise the filing of SAFE registrations by the offshore holding company’sshareholders or beneficial owners who are PRC residents in a timely manner.14Some of our current shareholders and/or beneficial owners may fall within the ambit of the SAFE notice and be required to register with the local SAFEbranch as required under the SAFE notice. If so required, and if such shareholders and/or beneficial owners fail to timely register their SAFE registrations pursuantto the SAFE notice, or if future shareholders and/or beneficial owners of our company who are PRC residents fail to comply with the registration procedures setforth in the SAFE notice, this may subject such shareholders, beneficial owners and/or our PRC subsidiaries to fines and legal sanctions and may also limit ourability to contribute additional capital into our PRC subsidiaries, limit our PRC subsidiaries’ ability to distribute dividends to our company, or otherwise adverselyaffect our business.Risks Associated with our ADSs and Ordinary SharesOur securities are not currently traded on any United States public markets and you may not be able to resell your securities for some time.There is currently no public market for our ordinary shares or American Depository Shares (“ADSs”) in the United States or in any other jurisdiction. OurADSs were voluntarily delisted from the NASDAQ Capital Market on September 19, 2018. We have applied to NASDAQ for the listing of our ordinary shares on theNASDAQ Capital Market and received an approval for listing of Ordinary Shares on August 6, 2018, and as of the date of this transition report, that application andapproval are currently under review. We cannot assume that our ordinary shares will be accepted for listing on the NASDAQ Capital Market, or if listed, that wewould continue to meet the applicable minimum listing requriements. You may not be able to sell your ordinary shares quickly or at all if we are unable to gain listingon a public market in the United States.The market price of our ADSs has historically been highly volatile, and you may not be able to resell our ordinary shares at or above your initial purchaseprice.There may be a limited public market for our ordinary shares and, as discussed above, our ADSs are no longer listed on any public market in the UnitedStates or any other jurisdiction. We cannot assure you that there will be an active trading market for our ordinary shares in the future. If our ordinary shares areaccepted for listing on a public market, you may not be able to sell your ordinary shares quickly or at the market price if trading in our ordinary shares is not active. The trading price of our ADSs and ordinary shares may be volatile. The price of our ADSs and ordinary shares could be subject to wide fluctuations inresponse to a variety of factors, including the following:1.Introduction of new products, services or technologies offered by us or our competitors;2.Failure to meet or exceed revenue and financial projections we provide to the public;3.Actual or anticipated variations in quarterly operating results;4.Failure to meet or exceed the estimates and projections of the investment community;5.General market conditions and overall fluctuations in United States equity markets;6.Announcements of significant acquisitions, strategic partnerships, joint ventures or capital commitments by us or our competitors;7.Disputes or other developments relating to proprietary rights, including patents, litigation matters and our ability to obtain patent protection for ourtechnologies;8.Additions or departures of key management personnel;9.Issuances of debt or equity securities;10.Significant lawsuits, including patent or shareholder litigation;11.Changes in the market valuations of similar companies;12.Sales of additional ordinary shares or other securities by us or our shareholders in the future;13.Trading volume of our ordinary shares;14.Fluctuations in the exchange rate between the U.S. dollar and Renminbi;15.Negative market perception and media coverage of our company or other companies in the same or similar industry with us; and16.Other events or factors, many of which are beyond our control.15In addition, the stock market in general, and the NASDAQ Capital Market and software products and services companies in particular, have experiencedextreme price and volume fluctuations that have often been unrelated or disproportionate to the operating performance of these companies. Broad market andindustry factors may negatively affect the market price of our ordinary shares, regardless of our actual operating performance. Our ADSs and ordinary shares may be subject to the SEC’s penny stock rules which may make it difficult for brokerdealers to complete customer transactionsand trading activity in our securities.Our ADSs and ordinary shares may be deemed to be “penny stock” as that term is defined under the Securities Exchange Act of 1934, as amended. Pennystocks generally are equity securities with a price of less than $5.00 (other than securities registered on certain national securities exchanges or quoted on theNASDAQ system, provided that current price and volume information with respect to transactions in such securities is provided by the exchange or system). Pennystock rules impose additional sales practice requirements on brokerdealers who sell to persons other than established customers and “accredited investors.” Theterm “accredited investor” refers generally to institutions with assets in excess of $5,000,000 or individuals with a net worth in excess of $1,000,000 or annual incomeexceeding $200,000 or $300,000 jointly with their spouse in each of the prior two years.The penny stock rules require a brokerdealer, prior to a transaction in a penny stock not otherwise exempt from the rules, to deliver a standardized riskdisclosure document in a form prepared by the SEC, which provides information about penny stocks and the nature and level of risks in the penny stockmarket. Moreover, brokerdealers are required to determine whether an investment in a penny stock is a suitable investment for a prospective investor. A brokerdealer must receive a written agreement to the transaction from the investor setting forth the identity and quantity of the penny stock to be purchased. Theserequirements may make it more difficult for brokerdealers to effectuate customer transactions and trading activity in our securities. As a result, the market price ofour ADSs and ordinary shares may be depressed, and you may find it more difficult to sell our ADSs or ordinary shares.Sales of a substantial number of ordinary shares or ADSs in the public market by our existing shareholders could cause the price of our ADSs to fall.Sales of a substantial number of our ordinary shares or ADSs in the public market or the perception that these sales might occur, could depress the marketprice of our ADSs and could impair our ability to raise capital through the sale of additional equity securities. We are unable to predict the effect that sales may haveon the prevailing market price of our ADSs.All of our existing shareholders prior to our May 2010 offering were subject to lockup agreements with the underwriters of the offering that restricted theshareholders’ ability to transfer ordinary shares or ADSs until expiration of the lockup period in November 2010. The lockup agreements limited the number ofordinary shares or ADSs that may be sold immediately following the public offering. Subject to certain limitations, approximately 1,000,000 of our total outstandingshares are now eligible for sale. Sales of ordinary shares by these shareholders could have a material adverse effect on the trading price of our ADSs.Future sales and issuances of our ordinary shares, or rights to purchase our ordinary shares, including pursuant to our 2010 Omnibus Incentive Plan, couldresult in additional dilution of the percentage ownership of our shareholders and could cause the price of our ordinary shares to fall.We expect that significant additional capital will be needed in the future to continue our planned operations. To the extent we raise additional capital byissuing equity securities, our shareholders may experience substantial dilution. We may sell ordinary shares, convertible securities or other equity securities in oneor more transactions at prices and in a manner we determine from time to time. If we sell ordinary shares, convertible securities or other equity securities in more thanone transaction, investors may be materially diluted by subsequent sales. Such sales may also result in material dilution to our existing shareholders, and newinvestors could gain rights superior to our existing shareholders.16We do not intend to pay dividends on our ordinary shares, so any returns will be limited to the value of our ADSs and ordinary shares.We have never declared or paid any cash dividend on our ordinary shares. We currently anticipate that we will retain future earnings for the development,operation and expansion of our business and do not anticipate declaring or paying any cash dividends for the foreseeable future. Any return shareholders willtherefore be limited to the value of their ADSs or ordinary shares.As the rights of shareholders under British Virgin Islands law differ from those under U.S. law, you may have fewer protections as a shareholder.Our corporate affairs will be governed by our memorandum of association and articles of association, the BVI Business Companies Act, 2004, or the BVIAct, of the British Virgin Islands and the common law of the British Virgin Islands. The rights of shareholders to take legal action against our directors, actions byminority shareholders and the fiduciary responsibilities of our directors under British Virgin Islands law are to a large extent governed by the BVI Act and thecommon law of the British Virgin Islands. The common law of the British Virgin Islands is derived in part from comparatively limited judicial precedent in the BritishVirgin Islands as well as from English common law, which has persuasive, but not binding, authority on a court in the British Virgin Islands. The rights of ourshareholders and the fiduciary responsibilities of our directors under British Virgin Islands law are not as clearly established as they would be under statutes orjudicial precedents in some jurisdictions in the United States. In particular, the British Virgin Islands has a less developed body of securities laws as compared to theUnited States, and some states (such as Delaware) have more fully developed and judicially interpreted bodies of corporate law.As a result of all of the above, holders of our ADSs and ordinary shares may have more difficulty in protecting their interests through actions against ourmanagement, directors or major shareholders than they would as shareholders of a U.S. company.British Virgin Islands companies may not be able to initiate shareholder derivative actions, thereby depriving shareholders of the ability to protect theirinterests.British Virgin Islands companies may not have standing to initiate a shareholder derivative action in a federal court of the United States. The circumstancesin which any such action may be brought, and the procedures and defenses that may be available in respect to any such action, may result in the rights ofshareholders of a British Virgin Islands company being more limited than those of shareholders of a company organized in the United States. Accordingly,shareholders may have fewer alternatives available to them if they believe that corporate wrongdoing has occurred. The British Virgin Islands courts are alsounlikely to recognize or enforce against us judgments of courts in the United States based on certain liability provisions of U.S. securities law; and to imposeliabilities against us, in original actions brought in the British Virgin Islands, based on certain liability provisions of U.S. securities laws that are penal in nature.There is no statutory recognition in the British Virgin Islands of judgments obtained in the United States, although the courts of the British Virgin Islands willgenerally recognize and enforce the nonpenal judgment of a foreign court of competent jurisdiction without retrial on the merits.The laws of the British Virgin Islands provide little protection for minority shareholders, so minority shareholders will have little or no recourse if theshareholders are dissatisfied with the conduct of our affairs.Under the law of the British Virgin Islands, there is little statutory law for the protection of minority shareholders other than the provisions of the BVI Actdealing with shareholder remedies. The principal protection under statutory law is that shareholders may bring an action to enforce the constituent documents ofthe corporation, our memorandum of association and articles of association. Shareholders are entitled to have the affairs of the company conducted in accordancewith the general law and the memorandum of association and articles of association.17There are common law rights for the protection of shareholders that may be invoked, largely dependent on English company law, since the common law ofthe British Virgin Islands is limited. Under the general rule pursuant to English company law known as the rule in Foss v. Harbottle, a court will generally refuse tointerfere with the management of a company at the insistence of a minority of its shareholders who express dissatisfaction with the conduct of the company’s affairsby the majority or the board of directors. However, every shareholder is entitled to have the affairs of the company conducted properly according to law and thecompany’s constituent documents. As such, if those who control the company have persistently disregarded the requirements of company law or the provisions ofthe company’s memorandum of association and articles of association, then the courts will grant relief. Generally, the areas in which the courts will intervene are thefollowing: (1) an act complained of which is outside the scope of the authorized business or is illegal or not capable of ratification by the majority; (2) acts thatconstitute fraud on the minority where the wrongdoers control the company; (3) acts that infringe on the personal rights of the shareholders, such as the right tovote; and (4) where the company has not complied with provisions requiring approval of a majority of shareholders, which are more limited than the rights affordedminority shareholders under the laws of many states in the United States.Antitakeover provisions in our memorandum of association and articles of association and our right to issue preference shares could make a thirdpartyacquisition of us difficult.Some provisions of our memorandum of association and articles of association may discourage, delay or prevent a change in control of our company ormanagement that shareholders may consider favorable, including provisions that authorize our board of directors to issue preference shares in one or more seriesand to designate the price, rights, preferences, privileges and restrictions of such preference shares.If you hold our ADSs, you may not have the same voting rights as the holders of our ordinary shares and must act through the depositary to exercise your rights.Holders of our ADSs will not be able to exercise voting rights attaching to the shares evidenced by our ADSs on an individual basis. Holders of our ADSswill appoint the depositary or its nominee as their representative to exercise the voting rights attaching to the shares represented by the ADSs. You may not receivevoting materials in time to instruct the depositary to vote, and it is possible that you, or persons who hold their ADSs through brokers, dealers or other third parties,will not have the opportunity to exercise a right to vote. Upon our written request, the depositary will mail to you a shareholder meeting notice which contains,among other things, a statement as to the manner in which your voting instructions may be given, including an express indication that such instructions may begiven or deemed given to the depositary to give a discretionary proxy to a person designated by us if no instructions are received by the depositary from you on orbefore the response date established by the depositary. However, no voting instruction shall be deemed given and no such discretionary proxy shall be given withrespect to any matter as to which we inform the depositary that (i) we do not wish such proxy given, (ii) substantial opposition exists, or (iii) such matter materiallyand adversely affects the rights of shareholders. We will make all reasonable efforts to cause the depositary to extend voting rights to you in a timely manner, butyou may not receive the voting materials in time to ensure that you can instruct the depositary to vote your ADSs. Furthermore, the depositary and its agents willnot be responsible for any failure to carry out any instructions to vote, for the manner in which any vote is cast or for the effect of any such vote. As a result, youmay not be able to exercise your right to vote and you may lack recourse if your ADSs are not voted as you requested. In addition, in your capacity as an ADSholder, you will not be able to call a shareholders’ meeting.You may not be able to participate in rights offerings and may experience dilution of your holdings as a result.We may from time to time distribute rights to our shareholders, including rights to acquire our securities. However, we may not, and under the depositagreement for the ADSs, the depositary will not, offer those rights to ADS holders unless both the rights and the underlying securities to be distributed to ADSholders are registered under the Securities Act, or the distribution of them to ADS holders is exempted from registration under the Securities Act with respect to allholders of ADSs. We are under no obligation to file a registration statement with respect to any such rights or underlying securities or to endeavor to cause such aregistration statement to be declared effective. In addition, we may not be able to rely on an exemption from registration under the Securities Act to distribute suchrights and securities. Accordingly, holders of our ADSs may be unable to participate in our rights offerings and may experience dilution in their holdings as a result.You may be subject to limitations on transfer of your ADSs.Your ADSs are transferable on the books of the depositary. However, the depositary may close its transfer books at any time or from time to time when itdeems expedient in connection with the performance of its duties. In addition, the depositary may refuse to deliver, transfer or register transfers of ADSs generallywhen our books or the books of the depositary are closed, or at any time if we or the depositary deem it advisable to do so because of any requirement of law or ofany government or governmental body, or under any provision of the deposit agreement, or for any other reason.18We may be a passive foreign investment company, of PFIC, which could lead to additional taxes for U.S. holders of our ADSs or ordinary shares.We do not expect to be, for U.S. federal income tax purposes, a passive foreign investment company, or a PFIC, which is a foreign company for which, inany given taxable year, either at least 75% of its gross income is passive income, or investment income in general, or at least 50% of its assets produce or are held toproduce passive income, for the current taxable year, and we expect to operate in such a manner so as not to become a PFIC for any future taxable year. However,because the determination of PFIC status for any taxable year cannot be made until after the close of such year and requires extensive factual investigation,including ascertaining the fair market value of our assets on a quarterly basis and determining whether each item of gross income that we earn is passive income, wecannot assure you that we will not become a PFIC for the current taxable year or any future taxable year. If we are or become a PFIC, a U.S. holder of our ADSs orordinary shares could be subject to additional U.S. federal income taxes on gain recognized with respect to the ADSs or ordinary shares and on certain distributions,plus an interest charge on certain taxes treated as having been deferred under the PFIC rules. Noncorporate U.S. holders will not be eligible for reduced rates oftaxation on any dividends received from us if we are a PFIC in the taxable year in which such dividends are paid or in the preceding taxable year.If our ordinary shares are listed on the NASDAQ Capital Market and the trading price of our ordinary shares fails to comply with the continued listingrequirements of the NASDAQ Capital Market, we would face possible delisting, which would result in a limited public market for our ordinary shares andmake obtaining future debt or equity financing more difficult for us.Companies listed on NASDAQ are subject to delisting for, among other things, failure to maintain a minimum closing bid price of $1.00 per share for 30consecutive business days. On December 19, 2011, we received a letter from NASDAQ indicating that for the last 30 consecutive business days, the closing bidprice of our ADSs fell below the minimum $1.00 per share requirement pursuant to NASDAQ Listing Rule 5550(a)(2) for continued listing on the NASDAQ CapitalMarket. We regained compliance with the minimum bid price requirement for continued listing set forth in NASDAQ Listing Rule 5550(a)(2), as its ADS with itsunderlying ordinary share has achieved a closing bid price of $1.00 or greater for the 10 consecutive business days from November 6 to November 23, 2012 byimplementing a 1for10 combination, or reverse split of the ordinary shares effective November 6, 2012. When listed, we cannot be sure that the price of our ordinaryshares will comply with this requirement for continued listing on the NASDAQ Capital Market in the future. If we were not able to do so, our ordinary shares wouldbe subject to delisting and would likely trade on the overthecounter market. If our ordinary shares were to trade on the overthecounter market, selling ourordinary shares could be more difficult because smaller quantities of shares would likely be bought and sold, transactions could be delayed, and security analysts’coverage of us may be reduced. In addition, brokerdealers have certain regulatory burdens imposed upon them, which may discourage brokerdealers from effectingtransactions in our ordinary shares, further limiting the liquidity of our ordinary shares. As a result, the market price of our ordinary may be depressed, and you mayfind it more difficult to sell our ordinary shares. Such delisting from the NASDAQ Capital Market and continued or further declines in our share price could alsogreatly impair our ability to raise additional necessary capital through equity or debt financing.ITEM 4. INFORMATION ON THE COMPANY.A . HISTORY AND DEVELOPMENT OF THE COMPANY.OverviewWe are a holding company and conduct our operations through our whollyowned subsidiary named LK Technology Ltd., a British Virgin Islands limitedliability company (“LK Technology”), and its whollyowned subsidiaries, MMB Limited and Mobile Media (China) Limited and their respective subsidiaries, whichhold the rights to deploy WiFi systems on about 700 trains in China, including 290 trains in which WiFi systems have already been installed and are in operation. InMay 2010, we consummated an initial public offering of our American Depository Shares, or ADSs, for gross proceeds of $16 million, and our ADSs were listed onthe NASDAQ Capital Market under the ticker symbol “KONE”. Our ordinary shares are not currently listed on any trading market. Our American Depository Shares(“ADSs”) were voluntarily delisted from the NASDAQ Capital Market on September 19, 2018. We have applied to NASDAQ for the listing of our ordinary shares onthe NASDAQ Capital Market and received an approval for listing of Ordinary Shares on August 6, 2018, and as of the date of this transition report, that applicationand approval are currently under review.19On August 17, 2018, we consummated an asset exchange transaction, pursuant to which we exchanged all issued and outstanding capital stock in TopskyInfoTech Holdings Pte Ltd., the parent of Softech, for the issued and outstanding capital stock of LK Technology (the “Asset Exchange”). In connection with theAsset Exchange, we changed our name on August 20, 2018, and on September 20, 2018, issued to the shareholders of C Media Limited, the former parent of LKTechnology, (i) 185,412,599 of our ordinary shares, par value $0.01 per share and (ii) 1,000,000 of our preferred shares. Upon the consummation of the AssetExchange, we ceased our previous business operations and became a company focused on the provision of WiFi and mobile application products for long distancerail travelers in China.On August 25, 2018, LK Technology entered into a Stock Purchase Agreement (the “Agreement”) with the shareholders (“Shareholders”) of SuperengineHoldings Limited, a limited liability company organized under the laws of the British Virgin Islands (the “Superengine”), pursuant to which LK Technology acquiredall of the issued and outstanding capital stock of Superengine for an aggregate purchase price of US$60 million (the “Purchase Price”), which are paid by theissuance of our Ordinary Shares in an amount equal to the quotient of (x) the Purchase Price divided by (y) the average of the closing prices of the Ordinary Shareson the NASDAQ Capital Market over the 12 months period preceding July 31, 2018. We are a party to the Agreement in connection with the issuance of theOrdinary Shares and certain other limited purposes.Corporate InformationOur principal executive offices are located at LAB32, SOHO 3Q, No 9, Guanghua Road, Chaoyang District, Beijing, People’s Republic of China 100020. Ourwebsite is www.luokung.com. We routinely post important information on our website. The information contained on our website is not a part of this transitionreport.Our agent for service of process in the United States is Worldwide Stock Transfer, LLC, the current transfer agent of the Company, with a mailing address ofOne University Plaza, Suite 505, Hackensack, New Jersey 07601.B. BUSINESS OVERVIEW.We are a Chinabased provider of rail WiFi and mobile application products for long distance travelers in China. Our primary mobile application, theLuoKuang platform, consists of the LuoKuang mobile applications, a series of supporting software at the server end, and railWiFi hardware and equipment on thetrains that we serve. The LuoKuang platform incorporates technology covered by 22 patents and about 34 software copy rights, and serves as a content and servicedistribution platform that is tailored for particular travel stages featuring geographic location and social interaction. The content and services distributed byLuoKuang contain information, entertainment, travel, ecommerce, online to offline (“O2O”), advertisement and marketing features.LuoKuang mainly provides personalized and precise services to long distance travelers in two locations: on the train and at the destination. Based on thetravel environment, the core elements of our users’ needs include staving off boredom on trains and discovering and exploring new locations upon arrival. The mainservices contain entertainment services (videos and audio, digital readings, games specific and tailored to the travel stage) and social services (satisfying thedemand for value discovery of unfamiliar destinations through social interaction among strangers based on locations). As of December 31, 2017, the LuoKuangplatform featured about 38 million users.The setting services on the train focus on providing entertainment content for passengers to pass time during longdistance travel in closed environments.For example, we provide access to long video formats such as movies and TV shows, short videos, music, digital readings and games.20We use the most valuable WiFi location—the train WiFi setting—as the entrance of our LuoKuang platform and mobile applications. Passengers typicallyride trains for longdistance and interprovincial travel purposes. The long periods of monotonous journeys and the cost concerns for roaming traffic fees enable thecombination of entertainment content service needs and WiFi access needs. Our railWiFi becomes a valuable and sophisticated WiFi service in this setting—notjust WiFi connection service, but a provider of sophisticated services through a WiFi connection. In addition, the annual traffic of 800,000 passengers onboardeach train makes rail WiFi a huge entry point for mobile applications. We do not define ourselves as a train WiFi communication service operator but as a longdistance travel mobile service provider. We provide users with free WiFi access so that users are able to connect to the LuoKuang platform and thus access relatedentertainment services, services on the train and destination services. The rail WiFi is our access point to a significant pool of users and the entrance to acquiringadditional users.The setting services focus on providing targeted push services to users while travelling in unfamiliar cities. Information and service guidance are preciselypushed to appeal to the interests and tastes (eating, drinking, shopping, touring and culture) of individual users (cuisine specialties and local snacks, local events,viewing sights, culture, history, stories). The service guidance is generated, shared and distributed by individual users (travelers, local residents, local businesses)interacting with current locations and featuring users who generated contents from selfmedia and small and medium vertical contents providers).Based on the GIS (geoinformation system), Superengine is a provider of big spatialtemporal data, network graphic image technology and relevant service.Its super engine series includes computer graphic image engines and spatial database engines. Spatialtemporal cloud index is the core of the company’s spatialtemporal data engines. It is equivalent to the neural network of the big data and the Internet. It extends the value of its products and platform to its data serviceproviders. In cooperation, its service providers can be divided into three categories, namely, basic geographic data providers, industrial data providers andbehavioral data providers). Superengine’s industriesoriented spatialtemporal data engine was launched in 2016. The spatialtemporal GIS platform has been appliedin industries such as aerospace, power grid, surveying & mapping, agriculture, cultural relic preservation, water conservancy, public security, railway section, smartcities, and business location selection.Our primary sources of revenue are advertising and marketing promotion revenues.Our Industry — Mobile Internet IndustryOur products and services are engaged in the mobile internet industry. Our main services consist of entertainment services (videos, audio, digital readings,games that are tailormade for passengers on train) and other services including satisfying the demand for value discovery of unfamiliar destinations through socialinteractions among strangers based in such locations). The mobile internet industry in China is rapidly growing and is likely to be in a longterm growth trend.According to the Mobile Internet Blue Book of China Mobile Internet Report, in 2017 the market size of China mobile internet reached RMB 605 billion. Now China isin a leading position in terms of smartphone, mobile communication network and mobile application services. The pool of users is anticipated to keep expandingthrough the promotion and popularization of smartphones and the expansion of the mobile internet market.Video is the leading online entertainment format in China. According to the iResearch Report, over 80% of total time spent by users on online entertainmentin China in 2016 was internet video. Online entertainment, especially internet video, is attractive to Chinese users due to many favorable factors, including easyaccessibility, wide content selection, and innovative platforms with social features.For 2017, the transaction volume of China mobile ecommerce market reached to over RMB 4 trillion according to the China Mobile Ecommerce IndustryResearch Report from iResearch, representing an increase of 19.1%. For the next few years, China mobile online shopping will likely maintain steady growth. Thefocal point of competition in China mobile ecommerce market has shifted from infrastructure service providers to integrated and accurate services providers.Drawing in users with compelling content in diversified scenes has become a trend.21The revenue for China mobile gaming industry reached RMB 144.58 billion for the year of 2017, according to the China Mobile Game Industry ResearchReport from iResearch. With increased investment by largescale enterprises in the sector of mobile games and the strict enforcement of the mobile game industryrelated regulatory policy guidelines, the mobile game market as a whole will become more organized and standardized.According to the Annual Analysis of China Mobile Reading Industry from Analysis, for the year of 2017, the mobile reading market in China reached toRMB 14.04 billion. By the end of 2016, the size of China mobile's reading market reached RMB 11.86 billion, showing an increase of 18.38% in 2017.The closed and boring environment for passengers of longdistance travel and high roaming charges lead to a strong demand to use our rail WiFi services.Passengers, through their own mobile phone, have access to the free WiFi network in each carriage, access to our rich mobile internet entertainment content andtravel services. According to the annual statistical bulletin of China Railway Corporation in 2017, there were about 6,030 trains in operation in China in 2017,consisting of 2,935 high speed trains and 3,095 express trains. The rail WiFi system that we have installed are currently all on express trains. The market value will bemultiplied several times following the extended coverage of service on other trains.Our StrengthsWe believe the following strengths differentiate us from our competitors:Our strategy is to build up personalized and targeted service products for travelers through rail WiFi networks, enabling our services to evolve into a coredriving distribution platform that provides content, news, games, ecommerce, OTO service, travel services and advertising and marketing. In comparison, ourcompetitors offer simple forms of media services on trains. We focus on personalized and targeted matching between users on long distance trips and services. Ourcompetitors focus on operating and generating internet traffic.We possess a complete set of technology system including network, client end and service and operation platform. We have patent protections for WiFiequipment on trains. Our technology strengths are briefly summarized below.WiFi EquipmentPatent protected. Supports WiFi/3G/4G telecom modules; 4 core CPU with X86 architecture, and SSD hard disk with big storage for localcontents.InfrastructureThe technology infrastructures include the application program system, big data gathering and processing systems, intelligence cloudsservice deployment structure systems and our WiFi hardware server deployment structure system. The operation center, big data center,contents center and railWiFi server system are built on this infrastructure. On the above layer, the equipment management platform,account and payment platform, contents management platform and advertisement distribution platform are set up for daily managementpurpose.LuoKuang strengthens the connection of services among people, setting and locations. In catering to people on the move, we anticipate strengthening therelationship between users and their locations in a given moment. Currently, LuoKuang provides the link between users and thirdparty service providers andprovides value added services to both users and thirdparty service providers. The connection is not simply a traffic diversion, but also the direct presentation ofrelevant services in the LuoKuang platform. The open API interface and independent product software package allows easy access by service providers anddevelopers and supports data service, advertisement operations, billing, users promotion and product marketing services. As an API product, LuoKuang does notcreate content or services. The content and services are provided by our partners in the LuoKuang platform. Now, the majority of top mobile internet content andservices providers in China have a presence in the Luokuang platform. Those include, but are not limited to, Toutiao, Wangyi News, iqiyi, Letv, YoudianCinema(Hollywood films), Sohu video, Phoenix Video, Kugou Music, FM Qingting, iReader, Baidu Literature, Phoenix Novel, Baidu Game, Meituan, Dianping, andsimilar content providers.22Our StrategyLuoKuang is positioned to provide API interface services and geographic information social services. The API interface services are provided within thetypical BC model. LuoKuang pushes the content and services from thirdparty service providers to users. The local businesses, service practitioners, residents, andforeign travelers are all defined as a “user” and may participate in social interactions based on local value information and generate UGC content. The socalled localvalue information is defined as information, views, evaluations, experiences and experience sharing related to the local cultural scene, native products,entertainment, food, tourism and activities.The LuoKuang user growth strategy is to have access to users through the travelers’ use of mobile devices in connection with longdistance train travel.Through deploying WiFi systems on trains and providing free WiFi access to passengers, LuoKuang is able to have consistent access to longdistance travelers.The WiFi system on the train has become a powerful user portal at the early stage of LuoKuang and has gained substantial user traffic. We are in a leading positionin terms of numbers of trains contracted and trains in operation with our free WiFi system. We have contracted with about 700 trains, which cover almost 560 millionannual passenger trips. As of the date of this report, approximately 290 trains are operating our rail WiFi system. We will continue to install our rail WiFi system inthe following years.The development strategy for LuoKuang encompasses the following:1.Enhance our local cycle service (a recommendation service system based on the location of travelers after their arrival, recommendations includingtourist attractions, local specialties and other items of interest), strengthen services for arrivals in the form of social interaction and focus on the valueof relationships between users and their current locations.2.Focus on the development of geographic positioning technology. Get the business of local cycle and users on train mixed together. We will put oureffort to maximize the synergy effect.3.Big Data: Behavior data about passenger trips is obtained via the traffic entrance of rail WiFi and these data will help to optimize our product.4.While enhancing setting service experiences and optimizing entertainment experiences, we will enrich ecommerce services on trains featuringrecommendations of customized products and ecommerce shopping guidance of products labeled with specific geographic location (and trafficdiversion).5.Focus on API positioning and attract more premium vertical service providers (contents and services).Intellectual PropertyWe have registered the following software copyrights, patents and trademarks for our business operations. We believe this intellectual property forms anintegral part of our competitive strength.23Patents:We have been granted some inventions by the State Intellectual Property Office of PRC. We possess a complete set of technology system includingnetwork, client end and service and operation platform. We have patent protections for WiFi equipment on trains. We have received the following patents:No.Name of patentTypeRegistrationNumberDate of Insurance1.Wireless communication multimedia chip business consumer informationacquisition terminal deviceInventionZL 2010 2 0528767.9Sep 21, 20112.A user behavior processing method and device for intelligent terminalInventionZL 2013 1 0301728.3May 27, 20153.A global positioning system terminal deviceInventionZL 2010 2 0253452.8Nov 7, 20114.A wireless multimedia serverInventionZL 2013 2 0220183.9Nov 13, 20135.Ordering system of passengers on trainInventionZL 2015 2 0095381.6Aug 5, 20156.A wireless multimedia serverInventionZL 2015 2 0201382.4Oct 28, 20157.An antenna structureInventionZL 2016 2 0424352.4Mar 1, 20178.Spatial data progressive transmission method and deviceInvention201010617383.9Jun 15, 20169.Methods and devices for conflict detection and avoidance of spatial entity elementlabelingInvention201010617385.8Mar 26, 201410.Spatial data processing method and deviceInvention201010617399.XJun 26, 201311.Method and device of spatial data simplificationInvention201010617400.9Mar 13, 201312.Method and device for judging the occlusion type of space entityInvention201010617403.2Sep 25, 201313.A method and device for distributed mapping of 3d model dataInvention201110274924.7Mar 26, 201414.Data simplification of 3d model, gradual transmission method and deviceInvention201110275336.5Mar 25, 201515.Spatial data transmission method and deviceInvention201110306393.5Dec 13, 201416.Methods and devices for spatial data processing, simplification and progressivetransmissionInvention201210104250.0Jun 10, 201517.Spatial data progressive transmission method and deviceInvention201310367021.2Jun 23, 201718.Simplification method and device of spatial dataInvention201310367128.7Sep 22, 201719.The method and device to accelerate transmission and display of graphic dataacross platformsInvention201210116149.7Aug 10, 201620.Methods and devices related to spatial data compression, decompression andprogressive transmissionInvention201310136682.4Nov 10, 2017We also have two patents outside of China.No.Name of patentCountryNationalRegistrationNumberDate ofInsurance1.Spatial data processing method and deviceJapan2012547439Jun 20, 20142.Methods and devices related to spatial data compression, decompression andprogressive transmissionU.S.A14/394,610Sep 5, 201724Software Copyrights:We have received the following software copyrights from the National Copyright Administration (“NCA”) of PRC:No.Name of CopyrightAchievement approachRegistration numberTime of obtainExpire time1.WAP PUSH Business operation platformsystemIndependent research anddevelopment2007SRBJ1464Jul 23, 200750 years2.TDSCDMA Streaming media businessmanagement platform software V1.0Independent research anddevelopment2009SRBJ0412Jan 22, 200950 years3.Content management platform systemsoftware V1.0Independent research anddevelopment2009SRBJ1374Apr 1, 200950 years4.Mobile multimedia broadcast electronicservice guide system software V1.0Independent research anddevelopment2009SRBJ1365Apr 1, 200950 years5.Mobile video business operation platformsystem V1.0Independent research anddevelopment2007SRBJ1463Jul 23, 200750 years6.Mobile multimedia broadcast emergencybroadcast platform software V1.0Independent research anddevelopment2010SRBJ0720Mar 5, 201050 years7.Mobile multimedia broadcast audio richmedia interactive platform softwareV1.0Independent research anddevelopment2010SRBJ0719Mar 5, 201050 years8.Printer typesetting and printing softwareV1.0Independent research anddevelopment2011SRBJ4190Sep 28, 201150 years9.Electronic newspaper business supportplatform software V1.0Independent research anddevelopment2011SRBJ4186Sep 28, 201150 years10.Public information business platformsoftware V1.0Independent research anddevelopment2011SRBJ3810Sep 27, 201150 years11.User interface scripting software V1.0Independent research anddevelopment2011SRBJ3809Sep 27, 201150 years12.Integrated business management platformsoftware V1.0Independent research anddevelopment2012SR003002Jan 16, 201250 years13.Interactive business development platformsoftwareIndependent research anddevelopment2011SRBJ4593Nov 29, 201150 years14.Instant messaging and messaging systemsoftwareIndependent research anddevelopment2014SR122231Aug 5, 201450 years15.General statistical platform software forclient productsIndependent research anddevelopment2014SR216662Dec 30, 201450 years16.CMMB Data broadcast managementplatform softwareIndependent research anddevelopment2009SRBJ0391Jan 22, 200950 years17.Integrated passenger train service systemIndependent research anddevelopment2012SR083665Sep 5, 201250 years25No.Name of CopyrightAchievement approachRegistration numberTime of obtainExpire time18.JHBY Train inspection managementsystemIndependent research anddevelopment2013SR015105Feb 21, 201350 years19.Integrated information engine platformsoftware V1.0Independent research anddevelopment2014SR040347Nov 30, 200150 years20.Super information engine developmentplatform software V5.0Independent research anddevelopment2014SR036792Mar 5, 200350 years21.Core map super network informationengine platform software V1.0Independent research anddevelopment2014SR036772Sep 15, 200750 years22.Integrated management of the grid gissoftware V1.0Independent research anddevelopment2014SR036808Jun 20, 200850 years23.Core map rural power grid equipment GPSpatrol system software V1.0Independent research anddevelopment2014SR036810Dec 10, 200850 years24.Diagram grid patrol PDA system softwareV1.0Independent research anddevelopment2014SR036778Dec 12, 200850 years25.Core map geographic information enginedesktop platform software V1.0Independent research anddevelopment2014SR036614Jan 15, 200950 years26.Integrated management of the gridgeographic information Web systemsoftware V1.0Independent research anddevelopment2014SR036799Mar 10, 200950 years27.Core map railway power supply equipmentGPS patrol system software V1.0Independent research anddevelopment2014SR036783Mar 25, 201050 years28.Core map network 3 d map server softwareV1.0Independent research anddevelopment2014SR036788Feb 20, 201150 years29.Core map network 3d map clientsoftwareV1.0Independent research anddevelopment2014SR036637Feb 22, 201150 years30.Core map 3d map network publishingplatform software V1.0Independent research anddevelopment2014SR036633Mar 10, 201150 years31.Core map 3d map network release pluginsystem software V1.0Independent research anddevelopment2014SR036622Mar 15, 201150 years32.Core map network 3d map smartphoneplatform software V1.0Independent research anddevelopment2014SR036638Apr 28, 201150 years33.Core map network GIS Shared mobileplatform software V1.0Independent research anddevelopment2014SR036634Oct 31, 201150 years34.Core map network GIS sharing platformsoftware V1.0Independent research anddevelopment2014SR036639Dec 16, 201150 yearsTrademarks:We have registered the following trademarks with the Trademark Office, State Administration for Industry and Commerce in the PRC:NoTrademarkClassification NumberValid PeriodRegistration Number1Y图形382010.04.212020.04.2067460692Y图形412010.09.072020.09.0667460673YRADIO文字352010.07.212020.07.2067334374YRADIO文字382010.04.21.2020.04.2067334385YRADIO文字412010.09.072020.09.0667334396LookLook图形382009.04.072019.04.0646660517LookLook图形422008.12.212018.12.2046660508YTV文字352010.07.212020.07.2067335799YTV文字382010.05.282020.05.27673357810YTV文字412010.09.072020.09.06673358111YTV文字422010.09.072020.09.06673358012YOUTV文字352010.07.212020.07.20673344013YOUTV文字382010.05.282020.05.27673344114xfeng文字352012.03.282022.03.27922914526NoTrademarkClassification NumberValid PeriodRegistration Number15xfeng文字382012.03.282022.03.27922916016xfeng文字412012.03.282022.03.27922919017xfeng文字422012.03.282022.03.27922922118中传视讯文字+图形422008.12.212018.12.20466604719中传视讯文字422008.12.212018.12.20466604820中传视讯文字382008.12.212018.12.20466604921新蜂文字382011.08.212021.08.20853890722新蜂文字422012.01.282022.01.27853907823新蜂.潮文字382011.08.212021.08.20853910424新蜂.潮文字422012.01.282022.01.27853914125新影力412014.08.282024.08.271228864326小人图形352014.08.282024.08.271228798527小人图形382014.08.282024.08.271228858028小人图形412014.08.282024.08.271228862929小人图形422014.08.282024.08.271228843530中传文字382014.08.282024.08.271228826731中传图形382014.08.282024.08.271228828932中童文字412014.08.072024.08.061221408533中童在线文字412014.08.072024.08.061221409234翠鸟文字382014.08.072014.08.061221405835翠鸟文字422014.08.072014.08.061221412536爱翠鸟文字382014.08.072024.08.061221406637爱翠鸟文字412014.08.072024.08.061221409638爱翠鸟文字422014.08.072024.08.061221412639翠鸟图形352014.08.072024.08.061221404040翠鸟图形382014.08.072024.08.061221407441翠鸟图形412014.08.072024.08.061221410042翠鸟图形422014.08.072024.08.061221413143信号小喇叭图形+CMEDIA412015.03.212025.03.201248043944LookLook图形382015.11.142025.11.131153342845LookLook图形422014.06.212024.06.201153372046LookLook文字382014.07.142024.07.131153406747LookLook文字422014.04.142024.04.131153422748L图形352014.02.282024.02.271153500249L图形382014.02.282024.02.271153507350L图形412014.02.282024.02.271153518151L图形422014.02.282024.02.271153526252箩筐图形412016.06.142026.06.131658022853箩筐图形422016.06.142026.06.131658022754箩筐文字422016.09.282026.09.271658024955箩筐文字412016.06.142026.06.131658025056箩筐文字352016.09.212026.09.201658025257箩筐文字92016.06.142026.06.131658025327NoTrademarkClassification NumberValid PeriodRegistration Number58箩筐图形382016.06.142026.06.131658022959箩筐图形352016.06.142026.06.131658023060箩筐图形92016.06.142026.06.131658023161微时光文字422016.09.282026.09.271658024762传游录屏文字92016.06.142026.06.131678214463传游录屏文字352016.06.142026.06.131678214364传游录屏文字382016.06.142026.06.131678214265传游录屏文字412016.06.142026.06.131678214166传游录屏文字422016.06.142026.06.131678214067录游器文字92016.06.142026.06.131678213568录游器文字352016.06.142026.06.131678213669录游器文字382016.06.142026.06.131678213770录游器文字412016.06.142026.06.131678213871录游器文字422016.06.142026.06.131678213972畅联TV文字412016.01.212026.01.201579246773畅联TV文字382016.01.212026.01.201579246874SuperEngine92016.01.212026.01.20812572275SuperEngine422016.01.212026.01.20812572876超擎9/422016.01.212026.01.201647320577SUPERENGINE9/422016.01.212026.01.2016473185*See below for an explanation of each classification number used in the table above.Classification No. 9: data processing apparatus, couplers (data processing equipment), computer software (recorded), monitors (computer programs), smartcards (integrated circuit cards), electrodynamic apparatus for the remote control of signals, alarms, and electric installations for the remote control of industrialoperations.Classification No. 35: auctioneering, sales promotion for others, marketing analysis, marketing research, importexport agencies, advisory services forbusiness management, business management for franchise, personnel management consultancy, relocation services for businesses, and systemization ofinformation into computer databases.Classification No. 38: Include services that enable at least sensory communication between two people. Such services include that allow one person to talkto another, send messages from one person to another, Make verbal or visual contact between one person and the other. This classification especially include theservice for broadcasting radio or television programs. Except for radio advertising services and telemarketing services.Classification No. 41: instruction services, teaching, education information, tuition, arranging and conducting of colloquiums, publication of electronicbooks and journals online, amusements, and vocational guidance.Classification No. 42: technical research, studies (technical project), computer software design, updating of computer software, recovery of computer data,computer systems analysis, installation of computer software, computer antivirus protection, and research and development for others. 28Business Certificates and QualificationsWe have obtained all necessary regulatory certifications to conduct our business in the PRC, including without limitation, the following: SoftwareEnterprise Recognition Certificate, Computer Information System Integration Qualification Certificate, Construction Enterprise Qualification Certificate, and SecurityTechnology & Protection Enterprise Certificate. We have also been properly certified as a hightech enterprise and have met the ISO 9001:2000 qualificationmanagement system.Legal ProceedingsAlthough we may, from time to time, be involved in litigation and claims arising out of our operations in the normal course of business, we do not believethat we are a party to any litigation that will have a material adverse impact on our financial condition or results of operations. To our knowledge, other than asdescribed below there are no material legal proceedings threatened against us. From time to time, we may be subject to various claims and legal actions arising in theordinary course of business. Following the consummation of the AEA, we became successor in interest to the legal proceedings described below.Litigation with Shanghai Fusheng Weier Intelligent Control Technology Co., Ltd.On January 22, 2016, Zhong Chuan Rui You and Shanghai Fusheng Weier Intelligent Control Technology Co., Ltd. (“Fusheng Weier”) signed a contract forequipment of $1,652,842 (RMB10,800,000). Since Zhong Chuan Rui You did not make the payments of $1,126,381 (RMB7,360,000) on the due dates, Fusheng Weierfiled a lawsuit against Zhong Chuan Rui You in Shanghai Xuhui District People's Court on October 8, 2016. On March 9, 2017, Xuhui District People's Court issuedthe verdict requiring Zhong Chuan Rui You to pay the overdue debts. In August 2017, C Media Limited made the payment of $512,075 (RMB3,346,000). Theremaining balance has been accrued in accounts payable. The payment schedule for the remaining balance is being negotiated by the two parties. On February 5,2018, a hearing was held adding Zhong Chuan Shi Xun as a defendant. The Group plans to settle the remaining balance within one year.Lawsuit with Gansu Jinlun Culture Media Co., Ltd.On August 22, 2014, Zhong Chuan Rui You and Gansu Jinlun Culture Media Co., Ltd. (“Gansu Jinlun”) signed a “Lanzhou Railway Bureau AirconditionedTrain WiFi Network System Advertising Operation Rights Agreement” for advertising on 72 trains of $1,467,880 (RMB9,604,633). Due to the dispute on theproject implementation, Zhong Chuan Rui You did not pay the advertising fee. On August 23, 2017, Gansu Jinlun filed a lawsuit with Gansu Intermediate People'sCourt. On December 19, 2017, Gansu Intermediate People's Court issued a verdict, ruling that Zhong Chuan Rui You settle the overdue advertising fee. Since only 18out of 72 trains have been installed with Wifi network system, Zhong Chuan Rui You disputed and appealed to the verdict. The next court trial date has not yet beendetermined.C Media and Gansu Jinlun are negotiating a potential settlement to resume the contract. According to the legal counsel, it is probable that the settlementwill amount to approximately $459,000 (RMB3,000,000); therefore, this amount has been accrued in accounts payable as at December 31, 2017.Litigation with Shenzhen Hua Xun Fang Zhou Technology Co., Ltd.On June 16, 2015, Zhong Chuan Rui You signed a cooperation agreement with Shenzhen Hua Xun Fang Zhou Technology Co., Ltd. (“Shenzhen Hua Xun”)and Xuesong Song, a major shareholder of C Media Limited. Pursuant to this agreement, Zhong Chuan Rui You procures equipment from Shenzhen Hua Xun.Xuesong Song acts as a joint liability guarantor for the entire debts of Zhong Chuan Rui You under this agreement. As Zhong Chuan Rui You did not make thepayments on the due dates, Shenzhen Hua Xun filed a lawsuit with Shenzhen Baoan District People's Court on May 31, 2016. On November 1, 2016, Zhong ChuanRui You, Xuesong Song and Shenzhen Hua Xun reached a settlement in Shenzhen Baoan District People's Court to settle $1,735,389 (RMB11,355,000) in fourinstalments. On December 30, 2017, the debt was assigned to C Media Limited.29C. ORGANIZATIONAL STRUCTUREThe following diagram illustrates our corporate structure and the place of formation and affiliation of each of our subsidiaries and affiliates as of September30, 2018.30The following diagram illustrates our corporate structure and the place of formation and affiliation of each of our subsidiaries and affiliates as of December31, 2017.Contractual Arrangements with Beijing Zhong Chuan Shi Xun Technology Limited’s Subsidiaries and Their Respective ShareholdersTo comply with the PRC legal restrictions on foreign ownership of companies that operate mobile application services, our subsidiaries operate in suchrestricted service areas in the PRC through certain PRC domestic companies, whose equity interests are held by certain management members or founders of the LKTechnology Ltd. Part of the registered capital of these PRC domestic companies was funded by certain management members or founders of LK Technology Ltd. LKTechnology Ltd., through its subsidiary Zhong Chuan Tian Xia Information and Technology (Shenzhen) Limited (the “WFOE”), has entered into an exclusivebusiness cooperation agreement with Beijing Zhong Chuan Shi Xun Technology Limited (“Zhong Chuan Shi Xun” or the “VIE”) the PRC domestic company, whichentitle the WFOE to receive a majority of profit of Zhong Chuan Shi Xun. In addition, Zhong Chuan Tian Xia Information and Technology (Shenzhen) Limited hasentered into certain agreements with those management members or founders, including equity interest pledge agreement of the equity interests held by thosemanagement members or founders and exclusive option agreement to acquire the equity interests in these companies when permitted by the PRC laws, rules andregulations. Details of the typical VIE structure of our significant consolidated VIE, primarily domestic companies associated with the operations such as ZhongChuan Shi Xun and its subsidiaries of Zhong Chuan Rui You, Huoerguosi Luokuang and Jiu Zhou Shi Dai, are set forth below: Exclusive Business Cooperation AgreementThe VIE has entered into an exclusive business services agreement with the WFOE, pursuant to which the WFOE provides exclusive business services tothe VIE. In exchange, the VIE pays a service fee to the WFOE which amounts to be no less than the 80% of the VIE’s aftertax profit, resulting in a transfer ofsubstantially all of the profits from the VIE to the WFOE.Exclusive Option AgreementThe VIE equity holders have granted the WFOE exclusive call options to purchase their equity interest in the VIE at an exercise price equal to the minimumprice as permitted by applicable PRC laws. The WFOE may nominate another entity or individual to purchase the equity interest, if applicable, under the call options.Each call option is exercisable subject to the condition that applicable PRC laws, rules and regulations do not prohibit completion of the transfer of the equityinterest pursuant to the call option. The VIE agrees not to distribute any dividends to the VIE equity holders without the approval of WFOE.31Equity Interest Pledge AgreementPursuant to the equity pledge agreement, the VIE equity holders have pledged all of their interests in the equity of the VIE as a continuing first prioritysecurity interest in favor of the WFOE to secure the performance of obligations by the VIEs and/or the equity holders under the exclusive business cooperationagreement. The WFOE is entitled to exercise its right to dispose of the VIE equity holders’ pledged interests in the equity of the VIE and has priority in receivingpayment by the application of proceeds from the auction or sale of such pledged interests, in the event of any breach or default under the exclusive businesscooperation agreement, if applicable. These equity pledge agreement remain in force until all the obligations under the exclusive business cooperation agreementhave been fulfilled.The exclusive business cooperation agreement and equity interest pledge agreement described above also enable the Company to receive substantially allof the economic benefits from the VIE by typically entitling the WFOE to all dividends and other distributions declared by the VIE and to any distributions orproceeds from the disposal by the VIE equity holders of their equity interests in the VIE.D. PROPERTY AND EQUIPMENTWe lease offices located at Lab 30 & Lab 32, SOHO 3Q, No 9, Guanghua Road, Chaoyang District, Beijing, which covers a floor space of 600 square meters.These leases expire at different times throughout 2018 and are renewable upon negotiation.ITEM 4A. UNRESOLVED STAFF COMMENTSNone.ITEM 5. OPERATING AND FINANCIAL REVIEW AND PROSPECTSA . OPERATING RESULTS.The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our consolidatedfinancial statements and the notes to those financial statements appearing elsewhere in this report. This discussion and analysis contains forwardlookingstatements that involve significant risks and uncertainties. As a result of many factors, such as our anticipated growth strategy, our plans to recruit moreemployees, our plans to invest in research and development to enhance our product or service lines, our future business development, results of operations andfinancial condition, expected changes in our net revenues and certain cost or expense items, our ability to attract and retain customers, trends and competitionin the enterprise mobile software application market, and the factors set forth elsewhere in this report, our actual results may differ materially from thoseanticipated in these forwardlooking statements. In light of those risks and uncertainties, there can be no assurance that the forwardlooking statementscontained in this report will in fact occur. You should not place undue reliance on the forwardlooking statements contained in this report.The forwardlooking statements speak only as of the date on which they are made, and, except to the extent required by U.S. federal securities laws, weundertake no obligation to update any forwardlooking statement to reflect events or circumstances after the date on which the statement is made or to reflectthe occurrence of unanticipated events. Further, the information about our intentions contained in this report is a statement of our intention as of the date of thisreport and is based upon, among other things, the existing regulatory environment, industry conditions, market conditions and prices and our assumptions as ofsuch date. We may change our intentions, at any time and without notice, based upon any changes in such factors, in our assumptions or otherwise.32Unless the context otherwise requires, all references to (i) “PRC” and “China” are to the People’s Republic of China; (ii) “U.S. dollar,” “$” and “US$”are to United States dollars; and (iii) “RMB”, “Yuan” and Renminbi are to the currency of the PRC or China.OverviewLuokung Technology was incorporated on October 27, 2009 under the laws of the British Virgin Islands. We are a holding company and conduct ouroperations through LK Technology Ltd., a British Virgin Islands limited liability company (“LK Technology”) and its whollyowned subsidiaries, MMB Limited andMobile Media (China) Limited and their respective subsidiaries and a contractuallycontrolled entity in the PRC named Beijing Zhong Chuan Shi Xun Technology,which hold the rights to deploy WiFi systems on about 700 trains in China, including 290 trains in which WiFi systems have already been installed and are inoperation. In May 2010, we consummated an initial public offering of our American Depository Shares, or ADSs, for gross proceeds of $16 million, and our ADSswere listed on the NASDAQ Capital Market under the ticker symbol “KONE”. Our ordinary shares are not currently listed on any trading market. Our AmericanDepository Shares (“ADSs”) were voluntarily delisted from the NASDAQ Capital Market on September 19, 2018. We have applied to NASDAQ for the listing of ourordinary shares on the NASDAQ Capital Market and received an approval for listing of Ordinary Shares on August 6, 2018, and as of the date of this transitionreport, that application and approval are currently under review.On August 17, 2018, we consummated an asset exchange transaction, pursuant to which we exchanged all issued and outstanding capital stock in TopskyInfoTech Holdings Pte Ltd., the parent of Softech, for the issued and outstanding capital stock of LK Technology (the “Asset Exchange”). In connection with theAsset Exchange, we changed our name on August 20, 2018, and on September 20, 2018, completed the issuance to the shareholders of C Media Limited, the formerparent of LK Technology, of (i) 185,412,599 of our ordinary shares, par value $0.01 per share and (ii) 1,000,000 of our preferred shares. Upon the consummation of theAsset Exchange, we ceased our previous business operations and became a company focused on the provision of WiFi and mobile application products for longdistance travelers in China.On August 25, 2018, LK Technology entered into a Stock Purchase Agreement (the “Agreement”) with the shareholders (“Shareholders”) of SuperengineHoldings Limited, a limited liability company organized under the laws of the British Virgin Islands (the “Superengine”), pursuant to which LK Technology acquiredall of the issued and outstanding capital stock of Superengine for an aggregate purchase price of US$60 million (the “Purchase Price”), which are paid by theissuance of our Ordinary Shares in an amount equal to the quotient of (x) the Purchase Price divided by (y) the average of the closing prices of the Ordinary Shareson the NASDAQ Capital Market over the 12 months period preceding July 31, 2018. We are a party to the Agreement in connection with the issuance of theOrdinary Shares and certain other limited purposes.Results of operations for the fiscal year ended December 31, 2017 compared to the fiscal year ended December 31, 2016.RevenueWe provide displaybased online advertising services to customers by integrating text description, image and video, and displaying the advertisements in aprominent position of LuoKuang Application. We recognize revenue in accordance with ASC 605, over the contractual term based on the agreements andconfirmation letters signed by both parties, commencing on the date the customer’s advertisement is displayed on our platform.For the year ended December 31, 2017, we had revenue of $26,082,417, as compared to revenue of $5,233,145 for the year ended December 31, 2016, anincrease of $20,849,272, or 398.4%, which was primarily due to the increase of our advertising clients.Cost of revenueOur cost of revenue primarily consists of depreciation, labor cost, WiFi equipment installation fees, data charges, annual payments to local railway bureau,other overhead costs.33Cost of revenue for the year ended December 31, 2017 was $5,547,779, representing a decrease of $767,725 or 12.2% as compared to $6,315,504 for the yearended December 31, 2016. The decrease was primarily attributable to the decrease in labor cost as a result of our cost control and a decrease in the number ofmaintenance staff. Additionally, data charges decreased as train passengers prefer using their mobile data, leading to a decrease in 3G and 4G data.Selling and marketing expenseOur selling and marketing expense mainly include promotional and marketing expenses and compensation for our sales and marketing personnel.Selling expense totaled $23,908,733 for the year ended December 31, 2017, as compared to $6,209,804 for the year ended December 31, 2016, an increase of$17,698,929 or 285.0%. The increase was primarily attributable to the increase in promotional and marketing activities conducted by the Company.General and administrative expenseOur general and administrative expenses consist primarily of salaries and benefits for our general and administrative personnel, rent, fees and expenses forlegal, accounting and other professional servicesGeneral and administrative expense totaled $2,451,249 for the year ended December 31, 2017, as compared to $2,108,854 for the year ended December 31,2016, an increase of $342,395 or 16.2%.Research and development expenses.Research and development expenses primarily consist of salaries and benefits for research and development personnel.Research and development expenses totaled $1,046,198 for the year ended December 31, 2017, as compared to $2,882,202 for the year ended December 31,2016, a decrease of $1,836,004 or 63.7%. The decrease was primarily attributable to the Company reduced its expenses in research and development temporarily asour products are quite stable at present.Loss from operationsAs a result of the factors described above, for the year ended December 31, 2017, loss from operations amounted to $6,871,542, as compared to loss fromoperations of $12,283,219 for the year ended December 31, 2016, a decrease of $5,411,677, or 44.1%.Other income/expenseOther income/expense mainly include interest income from bank deposits, foreign currency transaction gain, and loss from investment.Net lossAs a result of the factors described above, our net loss was $6,810,454 for the year ended December 31, 2017, compared to net loss of $13,049,031 for theyear ended December 31, 2016, a decrease of $6,238,577 or 47.8%.Foreign currency translation adjustmentOur reporting currency is the U.S. dollar. The functional currency of our parent company and subsidiaries of Merchant Supreme and Prime Cheer is the U.S.dollar and the functional currency of the Company’s subsidiaries incorporated in China is the Chinese Renminbi (“RMB”). The financial statements of oursubsidiaries incorporated in China are translated to U.S. dollars using period end rates of exchange for assets and liabilities, and average rates of exchange (for theperiod) for revenue, costs, and expenses. Net gains and losses resulting from foreign exchange transactions are included in the consolidated statements ofoperations and comprehensive loss. As a result of foreign currency translations, which are a noncash adjustment, we reported a foreign currency translation gain of$90,671 for the year ended December 31, 2017, as compared to a foreign currency translation loss of $387,375 for the year ended December 31, 2016. This noncashgain had the effect of increasing/decreasing our reported comprehensive income/loss.34Comprehensive lossAs a result of our foreign currency translation adjustment, we had comprehensive loss for the year ended December 31, 2017 of $6,719,783, compared tocomprehensive loss of $12,661,656 for the year ended December 31, 2016.B. LIQUIDITY AND CAPITAL RESOURCESThe information contained in “Item 5. Operating and Financial Review and Prospects – A. Operating Results – Liquidity and Capital Resources” isincorporated herein by reference.C. RESEARCH AND DEVELOPMENT, PATENTS AND LICENSES, ETC.The discussions of our research and development activities were contained in “Item 4. Information about our Company – B. Business Overview –Research and Development” and “Item 5. Operating and Financial Review and Prospects – A. Operating Results – Operating Expenses – Research and DevelopmentExpenses” are incorporated herein by reference. In the years ended December 31, 2017 and 2016, we spent $1,046,198 and $2,882,202, respectively, on research anddevelopment activities.D. TREND INFORMATION.Industry and Market OutlookChina has awarded licenses to mobile phone companies to provide the superfast 4G network to customers. The licenses, which are designed to give mobilephone users faster access to services, were granted by the government to China Mobile, China Unicom Hong Kong and China Telecom. Since the grants, ChinaMobile has offered 4G to subscribers from December 18, 2013. China Unicom and China Telecom, the country's other two major carriers, also offer 4G wireless. Thenumber of China Mobile 4G customers has exceeded 900 million by the end of October in 2017. The move greatly bolstered business for telecom equipment makersand a range of other companies.Under China’s 12th FiveYear Plan, a key priority is for China to transition from “Made in China” to “Designed in China.” In order to achieve this goal, thegovernment plans to heavily invest in science and technology education and R&D so as to further develop China’s intellectual property rights system and support“NextGeneration IT” as a Strategic Emerging Industry (SEI). Additionally, China plans to upgrade the technological capabilities of private and public services,including “triple play” services (the convergence of telecom, broadcasting and Internet networks), ecommerce, and egovernment and statistics systems.Furthermore, the government plans to invest in R&D of the "Internet of things" and cloud computing, and develop digital and virtual technologies.E. OFFBALANCE SHEET ARRANGEMENTSWe have not entered into any financial guarantees or other commitments to guarantee the payment obligations of any third parties. We have not enteredinto any derivative contracts that are indexed to our shares and classified as shareholder’s equity, or that are not reflected in our consolidated financial statements.Furthermore, except for the mortgage referenced above, we do not have any retained or contingent interest in assets transferred to an unconsolidated entity thatserves as credit, liquidity or market risk support to such entity. We do not have any variable interest in any unconsolidated entity that provides financing, liquidity,market risk or credit support to us or engages in leasing, hedging or research and development services with us.35F. TABULAR DISCLOSURE OF CONTRACTUAL OBLIGATIONSAs of December 31, 2017, we did not have any contractual obligations required to be disclosed in this Item 5.F. ITEM 6. DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES.A. DIRECTORS AND SENIOR MANAGEMENT.Executive Officers and DirectorsThe following table sets forth the names and ages as of the date of this transition report of each of our executive officers and directors:NameAgePositionXuesong Song50Chief Executive Officer, Chairman and DirectorDongpu Zhang50PresidentJie Yu34Chief Financial OfficerKegang Peng46Vice President and DirectorChuang Tao51DirectorDennis Galgano (1)(2)69Director (Independent)Jin Shi (1)(2)49Director (Independent)Jiming Ha (1)(3)56Director (Independent)Zhihao Xu (3)42Director (Independent)(1)Member of the Audit Committee.(2)Member of the Compensation Committee.(3)Member of the Nominating and Corporate Governance Committee.Set forth below is biographical information concerning our executive officers and directors.Xuesong Song is a cofounder of C Media Limited and served as its chairman of the board of directors and chief executive officer from 2012 until theconsummation of the AEA. From February 2014 through April 2017, Mr. Song served as a director of Seven Stars Cloud Group, Inc. (NASDAQ: SSC) and fromJanuary 2013 through February 2015, Mr. Song served as a director of Pingtan Marine Enterprise Ltd. (NASDAQ: PME). From May 2006 through January 2009, Mr.Song served as the Chairman of the Board of ChinaGrowth North Acquisition Corporation, a special purpose acquisition company, which acquired UIB GroupLimited in January 2009, in which he remains a director. Mr. Song has been a principal of Chum Capital Group Limited since August 2001, a merchant banking firmthat invests in growth Chinese companies and advises them in financings, mergers & acquisitions and restructurings, and chief executive officer of Beijing ChumInvestment Co., Ltd. since December 2001. Mr. Song has been a director of Mobile Vision Communication Ltd. since July 2004. Mr. Song received a Master’s ofBusiness Administration degree from Oklahoma City/Tianjin Program.Dongpu Zhang was appointed as the President of the Company effective on August 25, 2018. Mr. Dongpu Zhang has served as the General Manager ofSuperEngine Graphics Software Technology Development (Suzhou) Co., Ltd. (“SuperEngine Suzou”) and the Chief Executive Officer of SuperEngine HoldingLimited since September 2016. From February, 2014 to August, 2016, Mr. Zhang served as vice president of Industrial Development Group under China Fortune LandDevelopment Co., Ltd. From March, 2009 to February, 2014, Mr. Zhang served as the vice president of Aerospace Science and Technology Holding Group Co., Ltd.Mr. Zhang receive his Master Degree of Computer Science from Harbin Institute of Technology in 1994 and his Bachelor Degree of information system fromChangsha Institute of technology in 1991.Jie Yu served as the chief financial officer of C Media Limited from January 2018 until the consummation of the asset exchange transactions. From June 2016to January 2018, Mr. Yu served as chief financial officer and secretary of the board of directors of MTI Environment Group Limited. Prior to joining MTI, Mr. Yuserved as the senior manager at DA HUA CPA from November 2012 to May 2016. Previously, Mr. Yu served as the manager at Crowe Horwath (Hong Kong) CPA.Mr. Yu holds a bachelor degree in accounting and finance from University of Auckland and postgraduate diploma in accounting from University of Auckland.36Kegang Peng served as the Vice Chairman of the board of directors C Media Limited from October 2014 to the consummation of the asset exchangetransactions, and is now a member of the Company’s board of directors. Previously, from 2012 to 2014, Mr. Peng was chairman of the board and founder of JiangsuSuqian Jinghaiboyuan Information and Technology Co., Ltd. Mr. Peng studied at Beijing University of Aeronautics and Astronautics majoring computer andapplication.20F 1 f20f2017_luokungtech.htm AMENDMENT NO. 1 TO FORM 20FUNITED STATESSECURITIES AND EXCHANGE COMMISSIONWASHINGTON, D.C. 20549FORM 20F☐ REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934OR☐ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934For the Fiscal year ended _____________OR☒ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934For the transition period from October 1, 2017 to December 31, 2017☐ SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934Date of event requiring this shell company report Commission file number: 00134738Luokung Technology Corp.(Exact name of Registrant as specified in its charter)Not applicable(Translation of Registrant’s name into English)British Virgin IslandsLAB 32, SOHO 3Q, No 9, Guanghua Road, Chaoyang District, BeijingPeople’s Republic of China, 100020(Jurisdiction of incorporation or organization)(Address of principal executive offices)Mr. Muqiao GengLAB32, SOHO 3Q, No 9, Guanghua Road, Chaoyang District, BeijingPeople’s Republic of China 100020Tel: (86) 1085866721(Name, telephone, Email and/or facsimile number and address of company contact person)Securities registered or to be registered pursuant to Section 12(b) of the Act:Title of each className of each exchange on which registeredOrdinary shares, par value $0.01 per shareNonePreferred shares, par value $0.01 per shareNoneSecurities registered or to be registered pursuant to Section 12(g) of the Act:none(Title of Class)Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act:none(Title of Class)Indicate the number of outstanding shares of each of the issuer’s classes of capital or common stock as of the close of the period covered by the transitionreport. 187,097,599 Ordinary Shares, including 186,383,224 Ordinary Shares represented by 714,375 American Depositary Shares, and 1,000,000 Preferred Sharesoutstanding as of September 20, 2018.Indicate by check mark if the registrant is a wellknown seasoned issuer, as defined in Rule 405 of the Securities Act. ☐ Yes ☒ NoIf this report is an annual or transition report, indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of theSecurities Exchange Act of 1934. ☐ Yes ☒ NoIndicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirementsfor the past 90 days. ☒ Yes ☐ NoIndicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File requiredto be submitted and posted pursuant to Rule 405 of Regulation ST (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that theregistrant was required to submit and post such files). ☒ Yes ☐ NoIndicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a nonaccelerated filer. See definition of “accelerated filer andlarge accelerated filer” in Rule 12b2 of the Exchange Act. (Check one):Large accelerated filer ☐ Accelerated filer ☐ Nonaccelerated filer ☒Indicate by check mark which basis of accounting the registrant has used to prepare the financial statements included in this filing.U.S. GAAP ☒International Financial Reporting Standards as issuedby the International Accounting Standards Board ☐Other ☐If “Other” has been checked in response to the previous question, indicate by check mark which financial statement item the registrant has elected tofollow. Item 17 ☐ Item 18 ☐If this is an transition report, indicate by check mark whether the registrant is a shell company (as defined in Rule 12b2 of the ExchangeAct). ☐ Yes ☒ NoExplanatory NoteLuokung Technology Corp. (the “Company”) is filing this transition report on Form 20F (“Transition Report”) in connection with the completion of theexchange of certain of its assets for substantially all of the assets of C Media Limited (“C Media”) pursuant to that Asset Exchange Agreement, dated January 25,2018 (the “Original AEA”), as supplemented by the Addendum to Asset Exchange Agreement, dated October 3, 2018 (the “Addendum” and together with theOriginal AEA, the “AEA”). Following the consummation of the AEA, on October 4, 2018, the Company changed its fiscal year end from September 30 to the fiscalyear end used by C Media, December 31. This Transition Report covers the threemonth period from Octorber 1, 2017 to December 31, 2017, and the fiscal yearsdescribed herein.In this transition report:●References to the “Company”, “we”, “our” and “us” are to Luokung Technology Corp. and its consolidated subsidiaries and variable interestentity, except as the context otherwise requires;●This transition report on Form 20F covers the threemonth period from October 1, 2017 through December 31, 2017 (the “Transition Period”) andreflects our financial results thereof. Prior to this transition report on Form 20F, our two most recent annual reports on Form 20F cover the fiscalyears ended September 30, 2017 and September 30, 2016, respectively, and reflect financial results for the respective twelvemonth periods fromOctober 1 to September 30. Unless otherwise noted, all references to years are to the calendar year from January 1 to December 31 and referencesto our fiscal year or years are to the fiscal year or years which, prior to the Transition Period, ended September 30, while from and after theTransition Period, ended December 31;●References to an “ADS” are to an American Depositary Share, each of which represents one of our Ordinary Shares with a par value of $.01 pershare.Special Note Regarding Forwardlooking StatementsThis transition report contains forwardlooking statements that involve risks and uncertainties. These statements involve known and unknown risks,uncertainties and other factors that may cause our actual results, performance or achievements to be materially different from those expressed or implied by theforwardlooking statements.You can identify these forwardlooking statements by words or phrases such as “may,” “will,” “expect,” “anticipate,” “aim,” “estimate,” “intend,” “plan,”“believe,” “likely to” or other similar expressions. We have based these forwardlooking statements largely on our current expectations and projections about futureevents and financial trends that we believe may affect our financial condition, results of operations, business strategy and financial needs. You should not placeundue reliance on these forwardlooking statements, which apply only as of the date of this transition report. These forwardlooking statements include:●our future business development, results of operations and financial condition;●expected changes in our net revenues and certain cost or expense items;●our ability to attract and retain customers; and●trends and competition in the enterprise mobile software application market.You should read this transition report thoroughly with the understanding that our actual future results may be materially different from, and/or worse, thanwhat we expect. We qualify all of our forwardlooking statements by these cautionary statements. Other sections of this transition report include additional factorswhich could adversely impact our business and financial performance. Moreover, we operate in an evolving environment. New risk factors and uncertainties emergefrom time to time and it is not possible for our management to predict all risk factors and uncertainties, nor can we assess the impact of all factors on our business orthe extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forwardlooking statements.This transition report also contains estimates, projections and statistical data related to the market for the provision of WiFi and mobile applications inChina. This market data, including data from IDC, a leading provider of market data and intelligence, speaks as of the date it was published and includes projectionsthat are based on a number of assumptions and are not representations of fact. The market for the provision of WiFi and mobile applications in China may not growat the rates projected by the market data, or at all. The failure of the market to grow at the projected rates may materially and adversely affect our business and themarket price of our ADSs. In addition, the rapidly changing nature of the market for the provision of WiFi and mobile applications subjects any projections orestimates relating to the growth prospects or future condition of our market to significant uncertainties. If any one or more of the assumptions underlying the marketdata proves to be incorrect, actual results may differ from the projections based on these assumptions.You should not rely upon forwardlooking statements as predictions of future events. We undertake no obligation to update or revise any forwardlookingstatements, whether as a result of new information, future events or otherwise.TABLE OF CONTENTSPart IItem 1.Identity of Directors, Senior Management and Advisers.1Item 2.Offer Statistics and Expected Timetable.1Item 3.Key Information.1A.Selected Financial Data.1B.Capitalization and Indebtedness.3C.Reasons for the Offer and Use of Proceeds.3D.Risk Factors.3Item 4.Information on the Company.19A.History and Development of the Company.19B.Business Overview.20C.Organizational Structure.30D.Property, Plants and Equipment.32Item 4A.Unresolved Staff Comments.32Item 5.Operating and Financial Review and Prospects.32A.Operating Results.32B.Liquidity and Capital Resources.35C.Research and Development, Patents and Licenses, etc.35D.Trend Information.35E.Offbalance Sheet Arrangements.35F.Tabular Disclosure of Contractual Obligations.36Item 6.Directors, Senior Management and Employees.36A.Directors and Senior Management.36B.Compensation.37C.Board Practices.40D.Employees.43E.Share Ownership.43Item 7.Major Shareholders and Related Party Transactions.44A.Major Shareholders.44B.Related Party Transactions.45C.Interests of Experts and Counsel.45Item 8.Financial Information.45A.Consolidated Statements and Other Financial Information.45B.Significant Changes.46Item 9.The Offer and Listing.46A.Offer and Listing Details.46B.Plan of Distribution.47C.Markets.47D.Selling shareholders.48E.Dilution.48F.Expenses of the issue.48Item 10.Additional Information.48A.Share Capital.48B.Memorandum and Articles of Association.48C.Material Contracts.53D.Exchange Controls.54E.Taxation.61F.Dividends and Paying Agents.67G.Statement by Experts.67H.Documents on Display.67I.Subsidiary Information.68Item 11.Quantitative and Qualitative Disclosures about Market Risk.68Item 12.Description of Securities Other than Equity Securities.69A.Debt Securities.69B.Warrants and Rights.69C.Other Securities.69D.American Depositary Shares.69iPart IIItem 13.Defaults, Dividend Arrearages and Delinquencies.71Item 14.Material Modifications to the Rights of Security Holders and Use of Proceeds.71Item 15.Controls and Procedures.71Item 16.[Reserved.]72Item 16A.Audit Committee Financial Expert.72Item 16B.Code of Ethics.73Item 16C.Principal Accountant Fees and Services.73Item 16D.Exemptions from the Listing Standards for Audit Committees.73Item 16E.Purchases of Equity Securities by the Issuer and Affiliated Purchasers.73Item 16F.Change in Registrant’s Certifying Accountant.73Item 16G.Corporate Governance.73Item 16H.Mine Safety Disclosure.73Part IIIItem 17.Financial Statements.74Item 18.Financial Statements.74Item 19.Exhibits.74Index to Consolidated Financial StatementsF1iiPART IITEM 1. IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS.The directors of Luokung Technology Corp. are Xuesong Song, Kegang Peng, Dennis Galgano, Jin Shi, Jiming Ha, Zhihao Xu and Chuang Tao. Thebusiness address for our directors is LAB 32, SOHO 3Q, No 9, Guanghua Road, Chaoyang District, Beijing, People’s Republic of China.Moore Stephens CPA Limited has served as our auditor since October 5, 2018, and is located at 801806 Silvercord Tower 1, 30 Canton road, Tsimshatsui,Kowloon, Hong Kong. BDO China Shun Lun Pan Certified Public Accountants LLP served as our auditors for the last three years, and are located at 4F, No. 61Nanjing Road, Shanghai, People’s Republic of China.Garvey Schubert Barer, P.C., serves as our legal counsel in the United States, and is located at Flour Mill Building, 1000 Potomac Street NW, Suite 200,Washington, D.C., 200073501.Conyers Dill & Pearlman serves as our legal counsel with regard to the laws of the British Virgin Islands, and is located at 29th Floor, One Exchange Square,8 Connaught Place, Central, Hong Kong.ITEM 2. OFFER STATISTICS AND EXPECTED TIMETABLE.Not applicable.ITEM 3. KEY INFORMATION.A. SELECTED FINANCIAL DATA.Luokung Technology Corp. and its consolidated subsidiaries (“Luokung Technology”, “we”, “us”, or “the Company”) consummated an asset exchangeagreement pursuant to which we exchanged our existing assets with those of C Media Limited (the “Asset Exchange”) on August 17, 2018, and we changed ourname from Kingtone Wirelessinfo Solution Holding Ltd. to our current name on August 20, 2018. On October 4, 2018, in connection with the consummation of the Asset Exchange, we changed our fiscal year end from September 30 to December 31.1The selected financial data for the fiscal years ended December 31 2017 and 2016 have been derived from our audited consolidated and combined financialstatements. The selected consolidated and combined financial data should be read in conjunction with our audited financial statements and the accompanying notesand “Item 5 – Operating and Financial Review and Prospects.” Our consolidated and combined financial statements are prepared and presented in accordance withUnited States generally accepted accounting principles, or U.S. GAAP. Our historical results do not necessarily indicate our results expected for any future periods.You should not view our historical results as an indicator of our future performance.LK TECHNOLOGY LTD. AND SUBSIDIARIESSELECTED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS(IN U.S. DOLLARS)For the years ended December 31,20172016Revenues$26,082,417$5,233,145Less: Cost of revenues5,547,7796,315,504Less: Operating expenses:Selling and marketing23,908,7336,209,804General and administrative2,451,2492,108,854Research and development1,046,1982,882,202Total operating expenses27,406,18011,200,860Loss from operations(6,871,542)(12,283,219)Other income (expense):Interest expense(26,611)(4,412)Foreign exchange gains(losses)350,679(298,257)Loss from investment(428,571)Other income (expense), net(262,980)(34,572)Total other income (expense), net61,088(765,812)Loss before income taxes(6,810,454)(13,049,031)Income taxesNet loss$(6,810,454)$(13,049,031)Other comprehensive income:Foreign currency translation adjustment90,671387,375Total comprehensive loss$(6,719,783)$(12,661,656)2LK TECHNOLOGY LTD. AND SUBSIDIARIESSELECTED CONSOLIDATED BALANCE SHEETS(IN U.S. DOLLARS)As of December 31,20172016Accounts receivable, net of allowance for doubtful accounts9,729,6251,865,836Amounts due from related parties11,760,692Property and equipment, net5,044,8727,771,027Goodwill7,239,9367,239,936TOTAL ASSETS37,582,85821,114,832Accounts payable8,784,5186,446,584Accrued liabilities and other payables12,962,91211,329,613Total liabilities25,311,11333,905,520Total Shareholder’s Equity (Deficit)12,271,745(12,790,688)TOTAL LIABILITIES AND SHAREHOLDER’S EQUITY (DEFICIT)37,582,85821,114,832B. CAPITALIZATION AND INDEBTEDNESS.Not applicable.C. REASONS FOR THE OFFER AND USE OF PROCEEDS.Not applicable.D. RISK FACTORS.An investment in our ADSs and ordinary shares involves a high degree of risk. You should carefully consider the risks and uncertainties described belowtogether with all other information contained in this transition report, including the matters discussed under “Special Note Regarding ForwardLooking Statements,”before you decide to invest in our ADSs or ordinary shares. You should pay particular attention to the fact that we are a holding company with substantialoperations in China and are subject to legal and regulatory environments that in many respects differ from those of the United States. If any of the following risks, orany other risks and uncertainties that are not presently foreseeable to us, actually occur, our business, financial condition, results of operations, liquidity and ourfuture growth prospects would be materially and adversely affected. You should also consider all other information contained in this transition report beforedeciding to invest in our ADSs or ordinary shares.Risks Related to Our Company and Our IndustryThe Company had incurred negative cash flows from operating activities and net losses as of December 31, 2017. These matters raise substantial doubt aboutthe Company’s ability to continue as a going concern.The Company’s consolidated financial statements are prepared using generally accepted accounting principles in the United States of America applicableto a going concern, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. As of and for the year endedDecember 31, 2017, the Company had incurred significant operating losses and working capital deficit. The ability of the Company to continue as a going concern isdependent on the Company obtaining adequate capital to fund operating losses until it becomes profitable. If the Company is unable to obtain adequate capital, itcould be forced to cease operations. The accompanying consolidated financial statements do not include any adjustments that might be necessary if the Companyis unable to continue as a going concern.3We may undertake acquisitions, investments, joint ventures or other strategic alliances, which could have a material adverse effect on our ability to manageour business. In addition, such undertakings may not be successful.Our strategy includes plans to grow both organically and through acquisitions, participation in joint ventures or other strategic alliances. Joint venturesand strategic alliances may expose us to new operational, regulatory and market risks, as well as risks associated with additional capital requirements. We may not beable, however, to identify suitable future acquisition candidates or alliance partners. Even if we identify suitable candidates or partners, we may be unable tocomplete an acquisition or alliance on terms commercially acceptable to us. If we fail to identify appropriate candidates or partners, or complete desired acquisitions,we may not be able to implement our strategies effectively or efficiently. In addition, our ability to successfully integrate acquired companies and their operations may be adversely affected by several factors. These factorsinclude:1.diversion of management’s attention;2.difficulties in retaining customers of the acquired companies;3.difficulties in retaining personnel of the acquired companies;4.entry into unfamiliar markets;5.unanticipated problems or legal liabilities; and6.tax and accounting issues.If we fail to integrate acquired companies efficiently, our earnings, revenue growth and business could be negatively affected.Due to intense competition for highlyskilled personnel, we may fail to attract and retain enough sufficiently trained employees to support our operations; ourability to bid for and obtain new projects may be negatively affected and our revenues could decline as a result.The IT industry relies on skilled employees, and our success depends to a significant extent on our ability to attract, hire, train and retain qualifiedemployees. There is significant competition in China for professionals with the skills necessary to develop the products and perform the services we offer to ourcustomers. Increased competition for these professionals, in the mobile application design area or otherwise, could have an adverse effect on us if we experiencesignificant increase in the attrition rate among employees with specialized skills, which could decrease our operating efficiency and productivity and could lead to adecline in demand for our services.In addition, our ability to serve existing customers and business partners and obtain new business will depend, in large part, on our ability to attract, trainand retain skilled personnel that enable us to keep pace with growing demands for wifi connectivity and mobile applications, evolving industry standards andchanging customer preferences. Our failure to attract, train and retain personnel with the qualifications necessary to fulfill the needs of our existing and futurecustomers or to assimilate new employees successfully could have a material adverse effect on our business, financial condition and results of operations. Ourfailure to retain our key personnel on business development or find suitable replacements of the key personnel upon their departure may lead to shrinking newimplementation projects, which could materially adversely affect our business.4Our business depends substantially on the continuing efforts of our senior executives and other key personnel, and our business may be severely disrupted if welose their services.Our future success heavily depends upon the continued services of our senior executives and other key employees, particularly since we recentlyappointed a new chairman. We are reliant on the services of Mr. Xuesong Song, our chairman, chief executive officer and member of our board of directors. If one ormore of our senior executives or key employees is unable or unwilling to continue in his or her present position, we may not be able to replace such employee easily,or at all, we may incur additional expenses to recruit, train and retain replacement personnel, our business may be severely disrupted, and our financial condition andresults of operations may be materially adversely affected.Our business could suffer if our executives and directors compete against us and our noncompetition agreements with them cannot be enforced.If any of our senior executives or key employees joins a competitor or forms a competing company, we may lose customers, knowhow and keyprofessionals and staff members to them. Also, if any of our business development managers who keep a close relationship with our customers and businesspartners joins a competitor or forms a competing company, we may lose customers, and our revenues may be materially adversely affected. Most of our executiveshave entered, or will soon enter, into employment agreements with us that contain or will contain noncompetition provisions. However, if any dispute arisesbetween our executive officers and us, such noncompetition provisions may not be enforceable, especially in China, where all of these executive officers and keyemployees reside, in light of the uncertainties with China’s legal system. See “Risk Factors — Risks Related to Doing Business in China — Uncertainties withrespect to the PRC legal system could adversely affect us.”Our computer networks may be vulnerable to security risks that could disrupt our services and adversely affect our results of operations.Our computer networks may be vulnerable to unauthorized access, computer hackers, computer viruses and other security problems caused byunauthorized access to, or improper use of, systems by third parties or employees. A hacker who circumvents security measures could misappropriate proprietaryinformation or cause interruptions or malfunctions in operations. Computer attacks or disruptions may jeopardize the security of information stored in andtransmitted through computer systems and mobile devices of our customers. Actual or perceived concerns that our systems may be vulnerable to such attacks ordisruptions may deter customers from using our services. As a result, we may be required to expend significant resources to protect against the threat of thesesecurity breaches or to alleviate problems caused by these breaches, which could adversely affect our results of operations.If we do not continually enhance our solutions and service offerings, we may have difficulty in retaining existing customers and attracting new customers.We believe that our future success will depend, to a significant extent, upon our ability to enhance our existing applications and platform, and to introducenew features to meet the preferences and requirements of our customers in a rapidly developing and evolving market. Unexpected technical, operational, distributionor other problems could delay or prevent the introduction of one or more of these products or services, or any products or services that we may plan to introduce inthe future. Our present or future products may not satisfy the evolving preferences and tastes of our customers, and these solutions and services may not achieveanticipated market acceptance or generate incremental revenue. If we are unable to anticipate or respond adequately to the need for service or productenhancements due to resource, technological or other constraints, our business, financial condition and results of operations could be materially and adverselyaffected.5If we are unable to develop competitive new products and service offerings our future results of operations could be adversely affected.Our future revenue stream depends to a large degree on our ability to utilize our technology in a way that will allow us to offer new types of mobileapplications and services to a broader customer base. We will be required to make investments in research and development in order to continually develop newsoftware applications and related service offerings, enhance our existing platform, mobile applications and related service offerings and achieve market acceptanceof our mobile applications and service offerings. We may incur problems in the future in innovating and introducing new mobile applications and service offerings.Our developmentstage mobile applications may not be successfully completed or, if developed, may not achieve significant customer acceptance. If we are unableto successfully define, develop and introduce competitive new mobile applications, and enhance existing mobile applications, our future results of operations wouldbe adversely affected. The timely availability of new applications and their acceptance by customers are important to our future success. A delay in the developmentof new applications could have a significant impact on its results of operations.Changes in technology could adversely affect our business by increasing our costs, reducing our profit margins and causing a decline in our competitiveness.China’s wireless telecom industry, in which we operate, is characterized by rapidly changing technology, evolving industry standards, frequentintroductions of new services and solutions and enhancements as well as changing customer demands. New solutions and new technologies often render existingsolutions and services obsolete, excessively costly or otherwise unmarketable. As a result, our success depends on our ability to adapt to the latest technologicalprogress, such as the 5G standard and technologies, and to develop or acquire and integrate new technologies into our platform, mobile applications and relatedservices. Advances in technology also require us to commit substantial resources to developing or acquiring and then deploying new technologies for use in ouroperations. We must continuously train personnel in new technologies and in how to integrate existing hardware and software systems with these newtechnologies. We may not be able to adapt quickly to new technologies or commit sufficient resources to compete successfully against existing or new competitorsin bringing to market solutions and services that incorporate these new technologies. We may incur problems in the future in innovating and introducing new mobileapplications and service offerings. Our development of new mobile applications and platform enhancements may not be successfully completed or, if developed,may not achieve significant customer acceptance. If we fail to adapt to changes in technologies and compete successfully against established or new competitors,our business, financial condition and results of operations could be adversely affected.Problems with the quality or performance of our hardware, software or other systems may cause delays in the introduction of new solutions or result in the lossof customers and revenues, which could have a material and adverse effect on our business, financial condition and results of operations.Our hardware and software systems are complex and may contain defects, errors or bugs when first introduced to the market or to a particular customer, oras new versions are released. Because we cannot test for all possible scenarios, our systems may contain errors that are not discovered until after they have beeninstalled or implemented, and we may not be able to timely correct these problems. These defects, errors or bugs could interrupt or delay the completion of projectsor sales to our customers. In addition, our reputation may be damaged and we may fail to acquire new projects from existing customers or new customers. Errors mayoccur when we provide systems integration and maintenance services. Even in cases where we have agreements with our customers that contain provisionsdesigned to limit our exposure to potential claims and liabilities arising from customer problems, these provisions may not effectively protect us against such claimsin all cases and in all jurisdictions. In addition, as a result of business and other considerations, we may undertake to compensate our customers for damages arisingfrom the use of our solutions, even if our liability is limited by these provisions. Moreover, claims and liabilities arising from customer problems could also result inadverse publicity and materially and adversely affect our business, results of operations and financial condition. We currently do not carry any product or serviceliability insurance and any imposition of liability on us may materially and adversely affect our business and increase our costs, resulting in reduced revenues andprofitability.Our products may contain undetected software defects, which could negatively affect our revenues.Our software products are complex and may contain undetected defects. Although we test our products, it is possible that errors may be found or occur inour new or existing products after we have commenced commercial shipment of those products. Defects, whether actual or perceived, could result in adversepublicity, loss of revenues, product returns, a delay in market acceptance of our products, loss of competitive position or claims against us by customers. Any suchproblems could be costly to remedy and could cause interruptions, delays, or cessation of our product sales, which could cause us to lose existing or prospectivecustomers and could negatively affect our results of operations.6We may be subject to infringement, misappropriation and indemnity claims in the future, which may cause us to incur significant expenses, pay substantialdamages and be prevented from providing our services or technologies.Our success depends, in part, on our ability to carry out our business without infringing the intellectual property rights of third parties. Patent andcopyright law covering softwarerelated technologies is evolving rapidly and is subject to a great deal of uncertainty. Our selfdeveloped or licensed technologies,processes or methods may be covered by thirdparty patents or copyrights, either now existing or to be issued in the future. Any potential litigation may cause us toincur significant expenses. Thirdparty claims, if successfully asserted against us may cause us to pay substantial damages, seek licenses from third parties, payongoing royalties, redesign our services or technologies, or prevent us from providing services or technologies subject to these claims. Even if we were to prevail,any litigation would likely be costly and timeconsuming and divert the attention of our management and key personnel from our business operations.Our failure to protect our intellectual property rights may undermine our competitive position, and subject us to costly litigation to protect our intellectualproperty rights.Any misappropriation of our technology or the development of competitive technology could seriously harm our business. We regard a substantial portionof our hardware and software systems as proprietary and rely on statutory copyright, trademark, patent, trade secret laws, customer license agreements, employeeand thirdparty nondisclosure agreements and other methods to protect our proprietary rights. Nevertheless, these resources afford only limited protection and theactions we take to protect our intellectual property rights may not be adequate. In particular, third parties may infringe or misappropriate our proprietarytechnologies or other intellectual property rights, which could have a material adverse effect on our business, financial condition and results of operations. Inaddition, intellectual property rights and confidentiality protection in China may not be as effective as in the United States, and policing unauthorized use ofproprietary technology can be difficult and expensive. Further, litigation may be necessary to enforce our intellectual property rights, protect our trade secrets ordetermine the validity and scope of the proprietary rights of others. The outcome of any such litigation may not be in our favor. Any such litigation may be costlyand may divert management attention, as well as our other resources, away from our business. An adverse determination in any such litigation will impair ourintellectual property rights and may harm our business, prospects and reputation. In addition, we have no insurance coverage against litigation costs and wouldhave to bear all litigation costs in excess of the amount recoverable from other parties. The occurrence of any of the foregoing could have a material adverse effecton our business, financial condition and results of operations. Our solutions incorporate a portion of, and work in conjunction with, thirdparty hardware and software solutions. If these thirdparty hardware or softwaresolutions are not available to us at reasonable costs, or at all, our results of operations could be adversely impacted.Although our hardware and software systems and mobile applications primarily rely on our own core technologies, some elements of our systemsincorporate a small portion of thirdparty hardware and software solutions. If any third party were to discontinue making their intellectual property available to us orour customers on a timely basis, or increase materially the cost of their licensing such intellectual property, or if our systems or applications failed to properlyfunction or interoperate with replacement intellectual property, we may need to incur costs in finding replacement thirdparty solutions and/or redesigning oursystems or applications to replace or function with or on replacement thirdparty proprietary technology. Replacement technology may not be available on termsacceptable to us or at all, and we may be unable to develop alternative solutions or redesign our systems or applications on a timely basis or at a reasonable cost. Ifany of these were to occur, our results of operations could be adversely impacted.7Our ability to sell our products is highly dependent on the quality of our service and support offerings, and our failure to offer high quality service could have amaterial adverse effect on our ability to market and sell our products.Our customers depend upon our customer service and support staff to resolve issues relating to our products. Highquality support services are critical forthe successful marketing and sale of our products. If we fail to provide highquality support on an ongoing basis, our customers may react negatively and we maybe materially and adversely affected in our ability to sell additional products to these customers. This could also damage our reputation and prospects with potentialcustomers. Our failure to maintain highquality support services could have a material and adverse effect on our business, results of operations and financialcondition.Weaknesses in our internal controls over financial reporting or disclosure controls and procedures may have a material adverse effect on our business, theprice of our ordinary shares, operating results and financial condition.We are required to establish and maintain appropriate internal controls over financial reporting and disclosure controls and procedures. Pursuant to Section404 of the SarbanesOxley Act of 2002 and the related rules adopted by the Securities and Exchange Commission, every public company is required to include amanagement report on its internal controls over financial reporting in its transition report, which contains management’s assessment of the effectiveness of thecompany’s internal controls over financial reporting. This requirement first applied to our annual report on Form 20F for the fiscal year ended on September 30,2011. In connection with our assessments of our disclosure controls and procedures and internal controls over financial reporting, management concluded that as ofSeptember 30, 2018, our disclosure controls and procedures and our internal controls over financial reporting were not effective due to lack of U.S. generallyaccepted accounting principles (“U.S. GAAP”) expertise in our current accounting team. Please refer to the discussion under Item 15, “Controls and Procedures” forfurther discussion of our material weakness as of December 31, 2017. Should we be unable to remediate the material weakness promptly and effectively, suchweakness could harm our operating results, result in a material misstatement of our financial statements, cause us to fail to meet our financial reporting obligations orprevent us from providing reliable and accurate financial reports or avoiding or detecting fraud. This, in turn, could result in a loss of investor confidence in theaccuracy and completeness of our financial reports, which could have an adverse effect on the trading price of our ordinary shares. Any litigation or otherproceeding or adverse publicity relating to the material weaknesses could have a material adverse effect on our business and operating results. We have very limited insurance coverage which could expose us to significant costs and business disruption.We do not maintain any insurance coverage for our leased properties. Should any natural catastrophes such as earthquakes, floods, typhoons or any actsof terrorism occur in Beijing, China, where our head office is located and most of our employees are based, or elsewhere in China, we might suffer not onlysignificant property damages, but also loss of revenues due to interruptions in our business operations, which could have a material adverse effect on our business,operating results or financial condition.The insurance industry in China is still at an early stage of development. Insurance companies in China offer limited business insurance products, and donot, to our knowledge, offer business liability insurance. As a result, we do not have any business liability insurance coverage for our operations. Moreover, whilebusiness disruption insurance is available, we have determined that the risks of disruption and cost of the insurance are such that we do not require it at this time.Any business disruption, litigation or natural disaster might result in substantial costs and diversion of resources, particularly if it affects our technology platformswhich we depend on for delivery of our software and services, and could have a material adverse effect on our financial condition and results of operations.We may be liable to our customers for damages caused by unauthorized disclosure of sensitive and confidential information, whether through our employees orotherwise.We are typically required to manage, utilize and store sensitive or confidential customer data in connection with the products and services we provide.Under the terms of our customer contracts, we are required to keep such information strictly confidential. We seek to implement specific measures to protectsensitive and confidential customer data. We require our employees to enter into nondisclosure agreements to limit such employees’ access to, and distribution of,our customers’ sensitive and confidential information and our own trade secrets. We can give no assurance that the steps taken by us in this regard will be adequateto protect our customers’ confidential information. If our customers’ proprietary rights are misappropriated by our employees, in violation of any applicableconfidentiality agreements or otherwise, our customers may consider us liable for that act and seek damages and compensation from us. However, we currently donot have any insurance coverage for mismanagement or misappropriation of such information by our employees. Any litigation with respect to unauthorizeddisclosure of sensitive and confidential information might result in substantial costs and diversion of resources and management attention.8We may face intellectual property infringement claims that could be timeconsuming and costly to defend. If we fail to defend ourselves against such claims, wemay lose significant intellectual property rights and may be unable to continue providing our existing products and services.It is critical that we use and develop our technology and products without infringing upon the intellectual property rights of third parties, includingpatents, copyrights, trade secrets and trademarks. Intellectual property litigation is expensive and timeconsuming and could divert management’s attention from ourbusiness. A successful infringement claim against us, whether with or without merit, could, among others things, require us to pay substantial damages, developnoninfringing technology, or rebrand our name or enter into royalty or license agreements that may not be available on acceptable terms, if at all, and cease making,licensing or using products that have infringed a third party’s intellectual property rights. Protracted litigation could also result in existing or potential customersdeferring or limiting their purchase or use of our products until resolution of such litigation, or could require us to indemnify our customers against infringementclaims in certain instances. Also, we may be unaware of intellectual property registrations or applications relating to our services that may give rise to potentialinfringement claims against us. Parties making infringement claims may be able to obtain an injunction to prevent us from delivering our services or usingtechnology containing the allegedly infringing intellectual property. Any intellectual property litigation could have a material adverse effect on our business, resultsof operations or financial condition. Seasonality and fluctuations in our customers’ spending cycle and other factors can cause our revenues and operating results to vary significantly from quarterto quarter and from year to year.Our revenues and operating results will vary significantly from quarter to quarter and from year to year due to a number of factors, many of which areoutside of our control. Our new lines of business acquired upon the consummation of the asset exchange transaction discussed below see higher customer use andactivity during the Chinese New Year holiday than other times during the year when rail travel is high, which lead to higher revenue during this period as morecustomers would like to place more advertising. Due to these and other factors, our operating results may fluctuate significantly from quarter to quarter and fromyear to year. These fluctuations are likely to continue in the future, and operating results for any period may not be indicative of our future performance in any futureperiod.Our corporate actions are substantially controlled by our principal shareholders, who can cause us to take actions in ways you may not agree with.Mr. Xuesong Song, our chairman, chief executive officer and a member of our board of directors, beneficially owns 19.31% of our outstanding ordinaryshares and 1,000,000 preferred shares, and each preferred share has the right to 399 votes at a meeting of the members of the Company. Our officers and directors asa group beneficially own an aggregate of approximately 33.69% of our outstanding ordinary shares. These shareholders, acting individually or as a group, couldexert control and substantial influence over matters such as electing directors, amending our constitutional documents, and approving acquisitions, mergers or otherbusiness combination transactions. This concentration of ownership and voting power may also discourage, delay or prevent a change in control of our company,which could deprive our shareholders of an opportunity to receive a premium for their shares as part of a sale of our company and might reduce the price of ourshares. Alternatively, our controlling shareholders may cause a merger, consolidation or change of control transaction even if it is opposed by our othershareholders, including those who purchase shares in this offering.9We depend on a small number of customers to derive a significant portion of our revenues. If we were to become dependent again upon a few customers, suchdependency could negatively impact our business, operating results and financial condition.We derived a material portion of our revenues from a small number of customers. In the years ended December 31, 2017 and 2016, our five largestcustomers accounted for 99.8% and 78.5% of our total sales, respectively, and our largest customer Guangdong Zhanshi Media Advertising Co., Ltd. accounted forapproximately 80.8% of our total sales during for the fiscal year ended December 31, 2017. As our customer base may change from yeartoyear, during such yearsthat the customer base is highly concentrated, the fluctuation of our sales to any of such major customers could have a material adverse effect on our business,operating results and financial condition. Moreover, our high customer base concentration may also adversely affect our ability to negotiate contract prices withthese customers, which may in turn materially and adversely affect our results of operations.Our historical outstanding accounts receivable have been relatively high. Inability to collect our accounts receivable on a timely basis, if at all, couldmaterially and adversely affect our financial condition, liquidity and results of operations.Historically, our outstanding accounts receivable have been relatively high. As of December 31, 2017 and 2016, our outstanding accounts receivable beforeimpairment were $10.4 million and $2.10 million, respectively. Although we conduct credit evaluations of our customers, we generally do not require collateral orother security from our customers. In addition, we have had a relatively high customer concentration. The outstanding accounts receivable balance for our largestcustomer was 45.3% and 38.5% of our total accounts receivable balance as of December 31, 2017 and 2016, respectively. As a result, an extended delay or default inpayment relating to a significant account would likely have a material and adverse effect on the aging schedule and turnover days of our accounts receivable. Ourinability to collect our accounts receivable on a timely basis, if at all, could materially and adversely affect our financial condition, liquidity and results of operations.Risks Related to Doing Business in ChinaAdverse changes in political and economic policies of the PRC government could have a material adverse effect on the overall economic growth of China,which could reduce the demand for our services and materially and adversely affect our competitive position.Substantially all of our business operations are conducted in China. Accordingly, our business, results of operations, financial condition and prospects aresubject to a significant degree to economic, political and legal developments in China. Although the Chinese economy is no longer a planned economy, the PRCgovernment continues to exercise significant control over China’s economic growth through direct allocation of resources, monetary and tax policies, and a host ofother government policies such as those that encourage or restrict investment in certain industries by foreign investors, control the exchange between RMB andforeign currencies, and regulate the growth of the general or specific market. These government involvements have been instrumental in China’s significant growthin the past 30 years. The reorganization of the telecommunications industry encouraged by the PRC government has directly affected our industry and our growthprospect. In response to the recent global and Chinese economic downturn, the PRC government has adopted policy measures aimed at stimulating the economicgrowth in China. If the PRC government’s current or future policies fail to help the Chinese economy achieve further growth or if any aspect of the PRCgovernment’s policies limits the growth of the telecommunications industry in China or our industry or otherwise negatively affects our business, our growth rate orstrategy, our results of operations could be adversely affected as a result. Our business benefits from certain government tax incentives. Expiration, reduction or discontinuation of, or changes to, these incentives will increase our taxburden and reduce our net income.Under the PRC Enterprise Income Tax Law passed in 2007 and the implementing rules, both of which became effective on January 1, 2008, or the New EITLaw, a unified enterprise income tax rate of 25% and unified tax deduction standard is applied equally to both domesticinvested enterprises and foreigninvestedenterprises, or FIEs. Enterprises established prior to March 16, 2007 eligible for preferential tax treatment in accordance with the then tax laws and administrativeregulations shall gradually become subject to the New EIT Law rate over a fiveyear transition period starting from the date of effectiveness of the New EIT Law.However, certain qualifying hightechnology enterprises may still benefit from a preferential tax rate of 15% if they own their core intellectual properties and they areenterprises in certain Statesupported hightech industries to be later specified by the government. As a result, if our PRC subsidiaries qualify as “hightechnologyenterprises,” they will continue to benefit from the preferential tax rate of 15%, subject to transitional rules implemented from January 1, 2008. Our subsidiary, BeijingZhong Chuan Shi Xun Technology Limited, is qualified as a “hightechnology enterprise” until the end of the November 2018, and therefore it had benefited fromthe preferential tax rate of 15%, subject to transitional rules implemented on January 1, 2008. Although we intend to apply for a renewal of this qualification, if BeijingZhong Chuan Shi Xun ceases to qualify as a “hightechnology enterprise”, or the tax authorities change their position on our preferential tax treatments in thefuture, our future tax liabilities may materially increase, which could materially and adversely affect our financial condition and results of operations.10If we were deemed a “resident enterprise” by PRC tax authorities, we could be subject to tax on our global income at the rate of 25% under the New EIT Lawand our nonPRC shareholders could be subject to certain PRC taxes.Under the New EIT Law and the implementing rules, both of which became effective January 1, 2008, an enterprise established outside of the PRC with “defacto management bodies” within the PRC may be considered a PRC “resident enterprise” and will be subject to the enterprise income tax at the rate of 25% on itsglobal income as well as PRC enterprise income tax reporting obligations. The implementing rules of the New EIT Law define “de facto management” as “substantialand overall management and control over the production and operations, personnel, accounting, and properties” of the enterprise. However, as of the date of thistransition report, no final interpretations on the implementation of the “resident enterprise” designation are available. Moreover, any such designation, when madeby PRC tax authorities, will be determined based on the facts and circumstances of individual cases. Therefore, if we were to be considered a “resident enterprise”by the PRC tax authorities, our global income would be taxable under the New EIT Law at the rate of 25% and, to the extent we were to generate a substantial amountof income outside of PRC in the future, we would be subject to additional taxes. In addition, the dividends we pay to our nonPRC enterprise shareholders and gainsderived by such shareholders or ADS or ordinary share holders from the transfer of our shares or ADSs may also be subject to PRC withholding tax at the rate up to10%, if such income were regarded as Chinasourced income.Our holding company structure may limit the payment of dividends.We have no direct business operations, other than our ownership of our subsidiaries. While we have no current intention of paying dividends, should wedecide in the future to do so, as a holding company, our ability to pay dividends and meet other obligations depends upon the receipt of dividends or otherpayments from our operating subsidiaries and other holdings and investments. Current PRC regulations permit our PRC subsidiaries to pay dividends to us only outof their accumulated profits, if any, determined in accordance with Chinese accounting standards and regulations. In addition, each of our subsidiaries in China isrequired to set aside at least 10% of its aftertax profits each year, if any, to fund a statutory reserve until such reserve reaches 50% of its registered capital. Thesereserves are not distributable as cash dividends. Furthermore, if our subsidiaries in China incur debt on their own behalf in the future, the instruments governing thedebt may restrict their ability to pay dividends or make other payments to us. As a result, there may be limitations on the ability of our PRC subsidiaries to paydividends or make other investments or acquisitions that could be beneficial to our business or otherwise fund and conduct our business.In addition, under the New EIT Law and the implementing rules that became effective on January 1, 2008, dividends generated from the business of our PRCsubsidiaries after January 1, 2008 and payable to us may be subject to a withholding tax rate of 10% if the PRC tax authorities subsequently determine that we are anonresident enterprise, unless there is a tax treaty with China that provides for a different withholding arrangement.Uncertainties with respect to the PRC legal system could adversely affect us.We conduct all of our business through our subsidiaries in China. Our operations in China are governed by PRC laws and regulations. Our PRCsubsidiaries are generally subject to laws and regulations applicable to foreign investments in China and, in particular, laws and regulations applicable to whollyforeignowned enterprises. The PRC legal system is based on statutes. Prior court decisions may be cited for reference but have limited precedential value.11Since 1979, PRC legislation and regulations have significantly enhanced the protections afforded to various forms of foreign investments in China.However, China has not developed a fully integrated legal system and recently enacted laws and regulations may not sufficiently cover all aspects of economicactivities in China. In particular, because these laws and regulations are relatively new, and because of the limited volume of published decisions and theirnonbinding nature, the interpretation and enforcement of these laws and regulations involve uncertainties. In addition, the PRC legal system is based in part ongovernment policies and internal rules (some of which are not published on a timely basis or at all) that may have a retroactive effect. As a result, we may not beaware of our violation of these policies and rules until some time after the violation. In addition, any litigation in China may be protracted and result in substantialcosts and diversion of resources and management attention.PRC regulation of loans and direct investment by offshore holding companies to PRC entities may delay or prevent us from using the proceeds of our May2010 public offering to make loans or additional capital contributions to our PRC operating subsidiaries, which could materially and adversely affect ourliquidity and our ability to fund and expand our business.In utilizing the proceeds of our May 2010 public offering as an offshore holding company of our PRC operating subsidiaries, we may make loans to our PRCsubsidiaries, or we may make additional capital contributions to our PRC subsidiaries. Any loans to our PRC subsidiaries are subject to PRC regulations. Forexample, loans by us to our subsidiaries in China, which are FIEs, to finance their activities cannot exceed statutory limits and must be registered with the StateAdministration of Foreign Exchange, or SAFE. On August 29, 2008, SAFE promulgated Circular 142, a notice regulating the conversion by a foreigninvestedcompany of foreign currency into RMB by restricting how the converted RMB may be used. The notice requires that RMB converted from the foreign currencydenominated capital of a foreigninvested company may only be used for purposes within the business scope approved by the applicable governmental authorityand may not be used for equity investments within the PRC unless specifically provided for otherwise. The foreign currencydenominated capital shall be verified byan accounting firm before converting into RMB. In addition, SAFE strengthened its oversight over the flow and use of RMB funds converted from the foreigncurrencydenominated capital of a foreigninvested company. To convert such capital into RMB, the foreigninvested company must report the use of such RMB tothe bank, and the RMB must be used to the reported purposes. According to Circular 142, change of the use of such RMB without approval is prohibited. Inaddition, such RMB may not be used to repay RMB loans if the proceeds of such loans have not yet been used. Violations of Circular 142 may result in severepenalties, including substantial fines as set forth in the Foreign Exchange Administration Rules.We may also decide to finance our subsidiaries by means of capital contributions. These capital contributions may need approval from the PRC Ministry ofCommerce, or MOFCOM, or its local counterpart. We may not be able to obtain these government approvals on a timely basis, if at all, with respect to future capitalcontributions by us to our PRC subsidiaries. If we fail to receive such approvals in such cases when approval is required, our ability to use the proceeds of our May2010 public offering and to capitalize our PRC operations may be negatively affected, which could adversely affect our liquidity and our ability to fund and expandour business.Governmental control of currency conversion may affect the value of your investment.The PRC government imposes controls on the convertibility of the RMB into foreign currencies and, in certain cases, the remittance of currency out ofChina. We receive substantially all of our revenues in RMB. Under our current corporate structure, our income is primarily derived from dividend payments from ourPRC subsidiaries. Shortages in the availability of foreign currency may restrict the ability of our PRC subsidiaries to remit sufficient foreign currency to paydividends or other payments to us, or otherwise satisfy their foreign currency denominated obligations. Under existing PRC foreign exchange regulations, paymentsof current account items, including profit distributions, interest payments and expenditures from traderelated transactions, can be made in foreign currencieswithout prior approval from SAFE by complying with certain procedural requirements. However, approval from appropriate government authorities is required whereRMB is to be converted into foreign currency and remitted out of China to pay capital expenses such as the repayment of loans denominated in foreign currencies.The PRC government may also at its discretion restrict access in the future to foreign currencies for current account transactions. If the foreign exchange controlsystem prevents us from obtaining sufficient foreign currency to satisfy our currency demands, we may not be able to pay dividends in foreign currencies to ourshareholders, including holders of our ADSs or ordinary shares.12Fluctuation in the value of the RMB may have a material adverse effect on the value of your investment.The value of the RMB against the U.S. dollar and other currencies may fluctuate and is affected by, among other things, changes in political and economicconditions. On July 21, 2005, the PRC government changed its decadeold policy of pegging the value of the RMB to the U.S. dollar. Under the new policy, the RMBis permitted to fluctuate within a narrow and managed band against a basket of certain foreign currencies. This change in policy has resulted in an approximate26.8% appreciation of the RMB against the U.S. dollar between July 21, 2005 and September 30, 2015. Provisions on Administration of Foreign Exchange, asamended in August 2008, further changed China’s exchange regime to a managed floating exchange rate regime based on market supply and demand. Since reachinga high against the U.S. dollar in July 2008, however, the RMB has traded within a narrow band against the U.S. dollar, remaining within 1% of its July 2008 high butnever exceeding it. As a consequence, the RMB has fluctuated sharply since July 2008 against other freelytraded currencies, in tandem with the U.S. dollar. InAugust 2015, the PRC Government devalued its currency by approximately 3%, representing the largest yuan depreciation for 20 years. Concerns remain thatChina’s slowing economy, and in particular its exports, will need a stimulus that can only come from further cuts in the exchange rate.It is difficult to predict how long the current situation may continue and when and how it may change again as the People’s Bank of China may regularlyintervene in the foreign exchange market to achieve economic policy goals. Substantially all of our revenues and costs are denominated in the RMB, and asignificant portion of our financial assets are also denominated in RMB. We principally rely on dividends and other distributions paid to us by our subsidiaries inChina. Any significant revaluation of the RMB may materially and adversely affect our cash flows, revenues, earnings and financial position, and the value of, andany dividends payable on, our ADSs or ordinary shares in U.S. dollars. Any fluctuations of the exchange rate between the RMB and the U.S. dollar could also resultin foreign currency translation losses for financial reporting purposes.PRC laws and regulations governing our businesses. If we are found to be in violation of such PRC laws and regulations, we could be subject to sanctions. Inaddition, changes in such PRC laws and regulations may materially and adversely affect our business.There are substantial uncertainties regarding the interpretation and application of PRC laws and regulations, including, but not limited to, the laws andregulations governing our business. These laws and regulations are relatively new and may be subject to change, and their official interpretation and enforcementmay involve substantial uncertainty. The effectiveness of newly enacted laws, regulations or amendments may be delayed, resulting in detrimental reliance byforeign investors. New laws and regulations that affect existing and proposed future businesses may also be applied retroactively.The PRC government has broad discretion in dealing with violations of laws and regulations, including levying fines, revoking business and other licensesand requiring actions necessary for compliance. In particular, licenses and permits issued or granted to us by relevant governmental bodies may be revoked at a latertime by higher regulatory bodies. We cannot predict the effect of the interpretation of existing or new PRC laws or regulations on our businesses. We cannot assureyou that our current ownership and operating structure would not be found in violation of any current or future PRC laws or regulations. As a result, we may besubject to sanctions, including fines, and could be required to restructure our operations or cease to provide certain services. In addition, any litigation in China maybe protracted and result in substantial costs and diversion of resources and management attention. Any of these or similar actions could significantly disrupt ourbusiness operations or restrict us from conducting a substantial portion of our business operations, which could materially and adversely affect our business,financial condition and results of operations.13If we were required to obtain the prior approval of the China Securities Regulatory Commission, or CSRC, of the listing and trading of our ADSs on theNASDAQ Capital Market, we may face regulatory actions or other sanctions from the CSRC or other PRC regulatory agencies.On August 8, 2006, six PRC regulatory agencies, including the Ministry of Commerce, the State Assets Supervision and Administration Commission, theState Administration for Taxation, the State Administration for Industry and Commerce, the CSRC and the SAFE, jointly issued the Regulations on Mergers andAcquisitions of Domestic Enterprises by Foreign Investors, which became effective on September 8, 2006 (the “New M&A Rules”). This regulation, among otherthings, includes provisions that purport to require that an offshore special purpose vehicle formed for the purposes of overseas listing of equity interests in PRCcompanies and controlled directly or indirectly by PRC companies or individuals obtain the approval of the CSRC prior to the listing and trading of such specialpurpose vehicle’s securities on an overseas stock exchange. On September 21, 2006, the CSRC published on its official website procedures regarding its approval ofoverseas listings by special purpose vehicles. The CSRC approval procedures require the filing of a number of documents with the CSRC and it would take severalmonths to complete the approval process, if practicable at all. The application of this new PRC regulation remains unclear with no consensus currently existingamong leading PRC law firms regarding the scope of the applicability of the CSRC approval requirement. Prior to our May 2010 initial public offering, our PRC counsel has advised us that, based on its understanding of the current PRC laws and regulations aswell as the procedures announced on September 21, 2006: (i) Softech was directly incorporated by Topsky as a foreign investment enterprise under PRC law;therefore, there was no acquisition of the equity of a “PRC domestic company” as defined under the New M&A Rules; and (ii) the contractual arrangementsbetween Kingtone Information and Softech were not clearly defined and considered as the transaction which shall be applied to the New M&A Rules. Therefore, wedid not seek prior CSRC approval for our initial public offering.However, if the CSRC required that we obtain its approval prior to the completion of our initial public offering and the listing of our ADSs on the NASDAQCapital Market, we may face regulatory actions or other sanctions from the CSRC or other PRC regulatory agencies. These regulatory agencies may impose fines andpenalties on our operations in the PRC, limit our operating privileges in the PRC, delay or restrict the repatriation of the proceeds from our initial public offering intothe PRC, or take other actions that could have a material adverse effect on our business, financial condition, results of operations, reputation and prospects, as wellas the trading price of our shares.Also, if the CSRC requires that we obtain its approval, we may be unable to obtain a waiver of the CSRC approval requirements if and when procedures areestablished to obtain such a waiver. Any uncertainties and/or negative publicity regarding this CSRC approval requirement could have a material adverse effect onthe trading price of our shares.PRC regulations relating to the establishment of offshore special purpose companies by PRC residents may subject our PRC resident shareholders to penaltiesand limit our ability to inject capital into our PRC subsidiaries, limit our PRC subsidiaries’ ability to distribute profits to us, or otherwise adversely affect us.On October 21, 2005, the SAFE issued the Notice on Issues Relating to the Administration of Foreign Exchange in Fundraising and Reverse InvestmentActivities of Domestic Residents Conducted via Offshore Special Purpose Companies, or Notice 75, which became effective as of November 1, 2005. According toNotice 75, prior registration with the local SAFE branch is required for PRC residents to establish or to control an offshore company for the purposes of financingsuch offshore company with assets or equity interests in an onshore enterprise located in the PRC, or an offshore special purpose company. An amendment toregistration or filing with the local SAFE branch by such PRC resident is also required for the injection of equity interests or assets of an onshore enterprise in theoffshore special purpose company or overseas funds raised by such offshore company, or any other material change involving a change in the capital of theoffshore special purpose company. Moreover, Notice 75 applies retroactively. As a result, PRC residents who have established or acquired control of offshorespecial purpose companies that have made onshore investments in the PRC in the past are required to have completed the relevant registration procedures with thelocal SAFE branch by March 31, 2006. To further clarify the implementation of Notice 75, the SAFE issued Circular 106 on May 29, 2007. Under Circular 106, PRCsubsidiaries of an offshore special purpose company are required to coordinate and supervise the filing of SAFE registrations by the offshore holding company’sshareholders or beneficial owners who are PRC residents in a timely manner.14Some of our current shareholders and/or beneficial owners may fall within the ambit of the SAFE notice and be required to register with the local SAFEbranch as required under the SAFE notice. If so required, and if such shareholders and/or beneficial owners fail to timely register their SAFE registrations pursuantto the SAFE notice, or if future shareholders and/or beneficial owners of our company who are PRC residents fail to comply with the registration procedures setforth in the SAFE notice, this may subject such shareholders, beneficial owners and/or our PRC subsidiaries to fines and legal sanctions and may also limit ourability to contribute additional capital into our PRC subsidiaries, limit our PRC subsidiaries’ ability to distribute dividends to our company, or otherwise adverselyaffect our business.Risks Associated with our ADSs and Ordinary SharesOur securities are not currently traded on any United States public markets and you may not be able to resell your securities for some time.There is currently no public market for our ordinary shares or American Depository Shares (“ADSs”) in the United States or in any other jurisdiction. OurADSs were voluntarily delisted from the NASDAQ Capital Market on September 19, 2018. We have applied to NASDAQ for the listing of our ordinary shares on theNASDAQ Capital Market and received an approval for listing of Ordinary Shares on August 6, 2018, and as of the date of this transition report, that application andapproval are currently under review. We cannot assume that our ordinary shares will be accepted for listing on the NASDAQ Capital Market, or if listed, that wewould continue to meet the applicable minimum listing requriements. You may not be able to sell your ordinary shares quickly or at all if we are unable to gain listingon a public market in the United States.The market price of our ADSs has historically been highly volatile, and you may not be able to resell our ordinary shares at or above your initial purchaseprice.There may be a limited public market for our ordinary shares and, as discussed above, our ADSs are no longer listed on any public market in the UnitedStates or any other jurisdiction. We cannot assure you that there will be an active trading market for our ordinary shares in the future. If our ordinary shares areaccepted for listing on a public market, you may not be able to sell your ordinary shares quickly or at the market price if trading in our ordinary shares is not active. The trading price of our ADSs and ordinary shares may be volatile. The price of our ADSs and ordinary shares could be subject to wide fluctuations inresponse to a variety of factors, including the following:1.Introduction of new products, services or technologies offered by us or our competitors;2.Failure to meet or exceed revenue and financial projections we provide to the public;3.Actual or anticipated variations in quarterly operating results;4.Failure to meet or exceed the estimates and projections of the investment community;5.General market conditions and overall fluctuations in United States equity markets;6.Announcements of significant acquisitions, strategic partnerships, joint ventures or capital commitments by us or our competitors;7.Disputes or other developments relating to proprietary rights, including patents, litigation matters and our ability to obtain patent protection for ourtechnologies;8.Additions or departures of key management personnel;9.Issuances of debt or equity securities;10.Significant lawsuits, including patent or shareholder litigation;11.Changes in the market valuations of similar companies;12.Sales of additional ordinary shares or other securities by us or our shareholders in the future;13.Trading volume of our ordinary shares;14.Fluctuations in the exchange rate between the U.S. dollar and Renminbi;15.Negative market perception and media coverage of our company or other companies in the same or similar industry with us; and16.Other events or factors, many of which are beyond our control.15In addition, the stock market in general, and the NASDAQ Capital Market and software products and services companies in particular, have experiencedextreme price and volume fluctuations that have often been unrelated or disproportionate to the operating performance of these companies. Broad market andindustry factors may negatively affect the market price of our ordinary shares, regardless of our actual operating performance. Our ADSs and ordinary shares may be subject to the SEC’s penny stock rules which may make it difficult for brokerdealers to complete customer transactionsand trading activity in our securities.Our ADSs and ordinary shares may be deemed to be “penny stock” as that term is defined under the Securities Exchange Act of 1934, as amended. Pennystocks generally are equity securities with a price of less than $5.00 (other than securities registered on certain national securities exchanges or quoted on theNASDAQ system, provided that current price and volume information with respect to transactions in such securities is provided by the exchange or system). Pennystock rules impose additional sales practice requirements on brokerdealers who sell to persons other than established customers and “accredited investors.” Theterm “accredited investor” refers generally to institutions with assets in excess of $5,000,000 or individuals with a net worth in excess of $1,000,000 or annual incomeexceeding $200,000 or $300,000 jointly with their spouse in each of the prior two years.The penny stock rules require a brokerdealer, prior to a transaction in a penny stock not otherwise exempt from the rules, to deliver a standardized riskdisclosure document in a form prepared by the SEC, which provides information about penny stocks and the nature and level of risks in the penny stockmarket. Moreover, brokerdealers are required to determine whether an investment in a penny stock is a suitable investment for a prospective investor. A brokerdealer must receive a written agreement to the transaction from the investor setting forth the identity and quantity of the penny stock to be purchased. Theserequirements may make it more difficult for brokerdealers to effectuate customer transactions and trading activity in our securities. As a result, the market price ofour ADSs and ordinary shares may be depressed, and you may find it more difficult to sell our ADSs or ordinary shares.Sales of a substantial number of ordinary shares or ADSs in the public market by our existing shareholders could cause the price of our ADSs to fall.Sales of a substantial number of our ordinary shares or ADSs in the public market or the perception that these sales might occur, could depress the marketprice of our ADSs and could impair our ability to raise capital through the sale of additional equity securities. We are unable to predict the effect that sales may haveon the prevailing market price of our ADSs.All of our existing shareholders prior to our May 2010 offering were subject to lockup agreements with the underwriters of the offering that restricted theshareholders’ ability to transfer ordinary shares or ADSs until expiration of the lockup period in November 2010. The lockup agreements limited the number ofordinary shares or ADSs that may be sold immediately following the public offering. Subject to certain limitations, approximately 1,000,000 of our total outstandingshares are now eligible for sale. Sales of ordinary shares by these shareholders could have a material adverse effect on the trading price of our ADSs.Future sales and issuances of our ordinary shares, or rights to purchase our ordinary shares, including pursuant to our 2010 Omnibus Incentive Plan, couldresult in additional dilution of the percentage ownership of our shareholders and could cause the price of our ordinary shares to fall.We expect that significant additional capital will be needed in the future to continue our planned operations. To the extent we raise additional capital byissuing equity securities, our shareholders may experience substantial dilution. We may sell ordinary shares, convertible securities or other equity securities in oneor more transactions at prices and in a manner we determine from time to time. If we sell ordinary shares, convertible securities or other equity securities in more thanone transaction, investors may be materially diluted by subsequent sales. Such sales may also result in material dilution to our existing shareholders, and newinvestors could gain rights superior to our existing shareholders.16We do not intend to pay dividends on our ordinary shares, so any returns will be limited to the value of our ADSs and ordinary shares.We have never declared or paid any cash dividend on our ordinary shares. We currently anticipate that we will retain future earnings for the development,operation and expansion of our business and do not anticipate declaring or paying any cash dividends for the foreseeable future. Any return shareholders willtherefore be limited to the value of their ADSs or ordinary shares.As the rights of shareholders under British Virgin Islands law differ from those under U.S. law, you may have fewer protections as a shareholder.Our corporate affairs will be governed by our memorandum of association and articles of association, the BVI Business Companies Act, 2004, or the BVIAct, of the British Virgin Islands and the common law of the British Virgin Islands. The rights of shareholders to take legal action against our directors, actions byminority shareholders and the fiduciary responsibilities of our directors under British Virgin Islands law are to a large extent governed by the BVI Act and thecommon law of the British Virgin Islands. The common law of the British Virgin Islands is derived in part from comparatively limited judicial precedent in the BritishVirgin Islands as well as from English common law, which has persuasive, but not binding, authority on a court in the British Virgin Islands. The rights of ourshareholders and the fiduciary responsibilities of our directors under British Virgin Islands law are not as clearly established as they would be under statutes orjudicial precedents in some jurisdictions in the United States. In particular, the British Virgin Islands has a less developed body of securities laws as compared to theUnited States, and some states (such as Delaware) have more fully developed and judicially interpreted bodies of corporate law.As a result of all of the above, holders of our ADSs and ordinary shares may have more difficulty in protecting their interests through actions against ourmanagement, directors or major shareholders than they would as shareholders of a U.S. company.British Virgin Islands companies may not be able to initiate shareholder derivative actions, thereby depriving shareholders of the ability to protect theirinterests.British Virgin Islands companies may not have standing to initiate a shareholder derivative action in a federal court of the United States. The circumstancesin which any such action may be brought, and the procedures and defenses that may be available in respect to any such action, may result in the rights ofshareholders of a British Virgin Islands company being more limited than those of shareholders of a company organized in the United States. Accordingly,shareholders may have fewer alternatives available to them if they believe that corporate wrongdoing has occurred. The British Virgin Islands courts are alsounlikely to recognize or enforce against us judgments of courts in the United States based on certain liability provisions of U.S. securities law; and to imposeliabilities against us, in original actions brought in the British Virgin Islands, based on certain liability provisions of U.S. securities laws that are penal in nature.There is no statutory recognition in the British Virgin Islands of judgments obtained in the United States, although the courts of the British Virgin Islands willgenerally recognize and enforce the nonpenal judgment of a foreign court of competent jurisdiction without retrial on the merits.The laws of the British Virgin Islands provide little protection for minority shareholders, so minority shareholders will have little or no recourse if theshareholders are dissatisfied with the conduct of our affairs.Under the law of the British Virgin Islands, there is little statutory law for the protection of minority shareholders other than the provisions of the BVI Actdealing with shareholder remedies. The principal protection under statutory law is that shareholders may bring an action to enforce the constituent documents ofthe corporation, our memorandum of association and articles of association. Shareholders are entitled to have the affairs of the company conducted in accordancewith the general law and the memorandum of association and articles of association.17There are common law rights for the protection of shareholders that may be invoked, largely dependent on English company law, since the common law ofthe British Virgin Islands is limited. Under the general rule pursuant to English company law known as the rule in Foss v. Harbottle, a court will generally refuse tointerfere with the management of a company at the insistence of a minority of its shareholders who express dissatisfaction with the conduct of the company’s affairsby the majority or the board of directors. However, every shareholder is entitled to have the affairs of the company conducted properly according to law and thecompany’s constituent documents. As such, if those who control the company have persistently disregarded the requirements of company law or the provisions ofthe company’s memorandum of association and articles of association, then the courts will grant relief. Generally, the areas in which the courts will intervene are thefollowing: (1) an act complained of which is outside the scope of the authorized business or is illegal or not capable of ratification by the majority; (2) acts thatconstitute fraud on the minority where the wrongdoers control the company; (3) acts that infringe on the personal rights of the shareholders, such as the right tovote; and (4) where the company has not complied with provisions requiring approval of a majority of shareholders, which are more limited than the rights affordedminority shareholders under the laws of many states in the United States.Antitakeover provisions in our memorandum of association and articles of association and our right to issue preference shares could make a thirdpartyacquisition of us difficult.Some provisions of our memorandum of association and articles of association may discourage, delay or prevent a change in control of our company ormanagement that shareholders may consider favorable, including provisions that authorize our board of directors to issue preference shares in one or more seriesand to designate the price, rights, preferences, privileges and restrictions of such preference shares.If you hold our ADSs, you may not have the same voting rights as the holders of our ordinary shares and must act through the depositary to exercise your rights.Holders of our ADSs will not be able to exercise voting rights attaching to the shares evidenced by our ADSs on an individual basis. Holders of our ADSswill appoint the depositary or its nominee as their representative to exercise the voting rights attaching to the shares represented by the ADSs. You may not receivevoting materials in time to instruct the depositary to vote, and it is possible that you, or persons who hold their ADSs through brokers, dealers or other third parties,will not have the opportunity to exercise a right to vote. Upon our written request, the depositary will mail to you a shareholder meeting notice which contains,among other things, a statement as to the manner in which your voting instructions may be given, including an express indication that such instructions may begiven or deemed given to the depositary to give a discretionary proxy to a person designated by us if no instructions are received by the depositary from you on orbefore the response date established by the depositary. However, no voting instruction shall be deemed given and no such discretionary proxy shall be given withrespect to any matter as to which we inform the depositary that (i) we do not wish such proxy given, (ii) substantial opposition exists, or (iii) such matter materiallyand adversely affects the rights of shareholders. We will make all reasonable efforts to cause the depositary to extend voting rights to you in a timely manner, butyou may not receive the voting materials in time to ensure that you can instruct the depositary to vote your ADSs. Furthermore, the depositary and its agents willnot be responsible for any failure to carry out any instructions to vote, for the manner in which any vote is cast or for the effect of any such vote. As a result, youmay not be able to exercise your right to vote and you may lack recourse if your ADSs are not voted as you requested. In addition, in your capacity as an ADSholder, you will not be able to call a shareholders’ meeting.You may not be able to participate in rights offerings and may experience dilution of your holdings as a result.We may from time to time distribute rights to our shareholders, including rights to acquire our securities. However, we may not, and under the depositagreement for the ADSs, the depositary will not, offer those rights to ADS holders unless both the rights and the underlying securities to be distributed to ADSholders are registered under the Securities Act, or the distribution of them to ADS holders is exempted from registration under the Securities Act with respect to allholders of ADSs. We are under no obligation to file a registration statement with respect to any such rights or underlying securities or to endeavor to cause such aregistration statement to be declared effective. In addition, we may not be able to rely on an exemption from registration under the Securities Act to distribute suchrights and securities. Accordingly, holders of our ADSs may be unable to participate in our rights offerings and may experience dilution in their holdings as a result.You may be subject to limitations on transfer of your ADSs.Your ADSs are transferable on the books of the depositary. However, the depositary may close its transfer books at any time or from time to time when itdeems expedient in connection with the performance of its duties. In addition, the depositary may refuse to deliver, transfer or register transfers of ADSs generallywhen our books or the books of the depositary are closed, or at any time if we or the depositary deem it advisable to do so because of any requirement of law or ofany government or governmental body, or under any provision of the deposit agreement, or for any other reason.18We may be a passive foreign investment company, of PFIC, which could lead to additional taxes for U.S. holders of our ADSs or ordinary shares.We do not expect to be, for U.S. federal income tax purposes, a passive foreign investment company, or a PFIC, which is a foreign company for which, inany given taxable year, either at least 75% of its gross income is passive income, or investment income in general, or at least 50% of its assets produce or are held toproduce passive income, for the current taxable year, and we expect to operate in such a manner so as not to become a PFIC for any future taxable year. However,because the determination of PFIC status for any taxable year cannot be made until after the close of such year and requires extensive factual investigation,including ascertaining the fair market value of our assets on a quarterly basis and determining whether each item of gross income that we earn is passive income, wecannot assure you that we will not become a PFIC for the current taxable year or any future taxable year. If we are or become a PFIC, a U.S. holder of our ADSs orordinary shares could be subject to additional U.S. federal income taxes on gain recognized with respect to the ADSs or ordinary shares and on certain distributions,plus an interest charge on certain taxes treated as having been deferred under the PFIC rules. Noncorporate U.S. holders will not be eligible for reduced rates oftaxation on any dividends received from us if we are a PFIC in the taxable year in which such dividends are paid or in the preceding taxable year.If our ordinary shares are listed on the NASDAQ Capital Market and the trading price of our ordinary shares fails to comply with the continued listingrequirements of the NASDAQ Capital Market, we would face possible delisting, which would result in a limited public market for our ordinary shares andmake obtaining future debt or equity financing more difficult for us.Companies listed on NASDAQ are subject to delisting for, among other things, failure to maintain a minimum closing bid price of $1.00 per share for 30consecutive business days. On December 19, 2011, we received a letter from NASDAQ indicating that for the last 30 consecutive business days, the closing bidprice of our ADSs fell below the minimum $1.00 per share requirement pursuant to NASDAQ Listing Rule 5550(a)(2) for continued listing on the NASDAQ CapitalMarket. We regained compliance with the minimum bid price requirement for continued listing set forth in NASDAQ Listing Rule 5550(a)(2), as its ADS with itsunderlying ordinary share has achieved a closing bid price of $1.00 or greater for the 10 consecutive business days from November 6 to November 23, 2012 byimplementing a 1for10 combination, or reverse split of the ordinary shares effective November 6, 2012. When listed, we cannot be sure that the price of our ordinaryshares will comply with this requirement for continued listing on the NASDAQ Capital Market in the future. If we were not able to do so, our ordinary shares wouldbe subject to delisting and would likely trade on the overthecounter market. If our ordinary shares were to trade on the overthecounter market, selling ourordinary shares could be more difficult because smaller quantities of shares would likely be bought and sold, transactions could be delayed, and security analysts’coverage of us may be reduced. In addition, brokerdealers have certain regulatory burdens imposed upon them, which may discourage brokerdealers from effectingtransactions in our ordinary shares, further limiting the liquidity of our ordinary shares. As a result, the market price of our ordinary may be depressed, and you mayfind it more difficult to sell our ordinary shares. Such delisting from the NASDAQ Capital Market and continued or further declines in our share price could alsogreatly impair our ability to raise additional necessary capital through equity or debt financing.ITEM 4. INFORMATION ON THE COMPANY.A . HISTORY AND DEVELOPMENT OF THE COMPANY.OverviewWe are a holding company and conduct our operations through our whollyowned subsidiary named LK Technology Ltd., a British Virgin Islands limitedliability company (“LK Technology”), and its whollyowned subsidiaries, MMB Limited and Mobile Media (China) Limited and their respective subsidiaries, whichhold the rights to deploy WiFi systems on about 700 trains in China, including 290 trains in which WiFi systems have already been installed and are in operation. InMay 2010, we consummated an initial public offering of our American Depository Shares, or ADSs, for gross proceeds of $16 million, and our ADSs were listed onthe NASDAQ Capital Market under the ticker symbol “KONE”. Our ordinary shares are not currently listed on any trading market. Our American Depository Shares(“ADSs”) were voluntarily delisted from the NASDAQ Capital Market on September 19, 2018. We have applied to NASDAQ for the listing of our ordinary shares onthe NASDAQ Capital Market and received an approval for listing of Ordinary Shares on August 6, 2018, and as of the date of this transition report, that applicationand approval are currently under review.19On August 17, 2018, we consummated an asset exchange transaction, pursuant to which we exchanged all issued and outstanding capital stock in TopskyInfoTech Holdings Pte Ltd., the parent of Softech, for the issued and outstanding capital stock of LK Technology (the “Asset Exchange”). In connection with theAsset Exchange, we changed our name on August 20, 2018, and on September 20, 2018, issued to the shareholders of C Media Limited, the former parent of LKTechnology, (i) 185,412,599 of our ordinary shares, par value $0.01 per share and (ii) 1,000,000 of our preferred shares. Upon the consummation of the AssetExchange, we ceased our previous business operations and became a company focused on the provision of WiFi and mobile application products for long distancerail travelers in China.On August 25, 2018, LK Technology entered into a Stock Purchase Agreement (the “Agreement”) with the shareholders (“Shareholders”) of SuperengineHoldings Limited, a limited liability company organized under the laws of the British Virgin Islands (the “Superengine”), pursuant to which LK Technology acquiredall of the issued and outstanding capital stock of Superengine for an aggregate purchase price of US$60 million (the “Purchase Price”), which are paid by theissuance of our Ordinary Shares in an amount equal to the quotient of (x) the Purchase Price divided by (y) the average of the closing prices of the Ordinary Shareson the NASDAQ Capital Market over the 12 months period preceding July 31, 2018. We are a party to the Agreement in connection with the issuance of theOrdinary Shares and certain other limited purposes.Corporate InformationOur principal executive offices are located at LAB32, SOHO 3Q, No 9, Guanghua Road, Chaoyang District, Beijing, People’s Republic of China 100020. Ourwebsite is www.luokung.com. We routinely post important information on our website. The information contained on our website is not a part of this transitionreport.Our agent for service of process in the United States is Worldwide Stock Transfer, LLC, the current transfer agent of the Company, with a mailing address ofOne University Plaza, Suite 505, Hackensack, New Jersey 07601.B. BUSINESS OVERVIEW.We are a Chinabased provider of rail WiFi and mobile application products for long distance travelers in China. Our primary mobile application, theLuoKuang platform, consists of the LuoKuang mobile applications, a series of supporting software at the server end, and railWiFi hardware and equipment on thetrains that we serve. The LuoKuang platform incorporates technology covered by 22 patents and about 34 software copy rights, and serves as a content and servicedistribution platform that is tailored for particular travel stages featuring geographic location and social interaction. The content and services distributed byLuoKuang contain information, entertainment, travel, ecommerce, online to offline (“O2O”), advertisement and marketing features.LuoKuang mainly provides personalized and precise services to long distance travelers in two locations: on the train and at the destination. Based on thetravel environment, the core elements of our users’ needs include staving off boredom on trains and discovering and exploring new locations upon arrival. The mainservices contain entertainment services (videos and audio, digital readings, games specific and tailored to the travel stage) and social services (satisfying thedemand for value discovery of unfamiliar destinations through social interaction among strangers based on locations). As of December 31, 2017, the LuoKuangplatform featured about 38 million users.The setting services on the train focus on providing entertainment content for passengers to pass time during longdistance travel in closed environments.For example, we provide access to long video formats such as movies and TV shows, short videos, music, digital readings and games.20We use the most valuable WiFi location—the train WiFi setting—as the entrance of our LuoKuang platform and mobile applications. Passengers typicallyride trains for longdistance and interprovincial travel purposes. The long periods of monotonous journeys and the cost concerns for roaming traffic fees enable thecombination of entertainment content service needs and WiFi access needs. Our railWiFi becomes a valuable and sophisticated WiFi service in this setting—notjust WiFi connection service, but a provider of sophisticated services through a WiFi connection. In addition, the annual traffic of 800,000 passengers onboardeach train makes rail WiFi a huge entry point for mobile applications. We do not define ourselves as a train WiFi communication service operator but as a longdistance travel mobile service provider. We provide users with free WiFi access so that users are able to connect to the LuoKuang platform and thus access relatedentertainment services, services on the train and destination services. The rail WiFi is our access point to a significant pool of users and the entrance to acquiringadditional users.The setting services focus on providing targeted push services to users while travelling in unfamiliar cities. Information and service guidance are preciselypushed to appeal to the interests and tastes (eating, drinking, shopping, touring and culture) of individual users (cuisine specialties and local snacks, local events,viewing sights, culture, history, stories). The service guidance is generated, shared and distributed by individual users (travelers, local residents, local businesses)interacting with current locations and featuring users who generated contents from selfmedia and small and medium vertical contents providers).Based on the GIS (geoinformation system), Superengine is a provider of big spatialtemporal data, network graphic image technology and relevant service.Its super engine series includes computer graphic image engines and spatial database engines. Spatialtemporal cloud index is the core of the company’s spatialtemporal data engines. It is equivalent to the neural network of the big data and the Internet. It extends the value of its products and platform to its data serviceproviders. In cooperation, its service providers can be divided into three categories, namely, basic geographic data providers, industrial data providers andbehavioral data providers). Superengine’s industriesoriented spatialtemporal data engine was launched in 2016. The spatialtemporal GIS platform has been appliedin industries such as aerospace, power grid, surveying & mapping, agriculture, cultural relic preservation, water conservancy, public security, railway section, smartcities, and business location selection.Our primary sources of revenue are advertising and marketing promotion revenues.Our Industry — Mobile Internet IndustryOur products and services are engaged in the mobile internet industry. Our main services consist of entertainment services (videos, audio, digital readings,games that are tailormade for passengers on train) and other services including satisfying the demand for value discovery of unfamiliar destinations through socialinteractions among strangers based in such locations). The mobile internet industry in China is rapidly growing and is likely to be in a longterm growth trend.According to the Mobile Internet Blue Book of China Mobile Internet Report, in 2017 the market size of China mobile internet reached RMB 605 billion. Now China isin a leading position in terms of smartphone, mobile communication network and mobile application services. The pool of users is anticipated to keep expandingthrough the promotion and popularization of smartphones and the expansion of the mobile internet market.Video is the leading online entertainment format in China. According to the iResearch Report, over 80% of total time spent by users on online entertainmentin China in 2016 was internet video. Online entertainment, especially internet video, is attractive to Chinese users due to many favorable factors, including easyaccessibility, wide content selection, and innovative platforms with social features.For 2017, the transaction volume of China mobile ecommerce market reached to over RMB 4 trillion according to the China Mobile Ecommerce IndustryResearch Report from iResearch, representing an increase of 19.1%. For the next few years, China mobile online shopping will likely maintain steady growth. Thefocal point of competition in China mobile ecommerce market has shifted from infrastructure service providers to integrated and accurate services providers.Drawing in users with compelling content in diversified scenes has become a trend.21The revenue for China mobile gaming industry reached RMB 144.58 billion for the year of 2017, according to the China Mobile Game Industry ResearchReport from iResearch. With increased investment by largescale enterprises in the sector of mobile games and the strict enforcement of the mobile game industryrelated regulatory policy guidelines, the mobile game market as a whole will become more organized and standardized.According to the Annual Analysis of China Mobile Reading Industry from Analysis, for the year of 2017, the mobile reading market in China reached toRMB 14.04 billion. By the end of 2016, the size of China mobile's reading market reached RMB 11.86 billion, showing an increase of 18.38% in 2017.The closed and boring environment for passengers of longdistance travel and high roaming charges lead to a strong demand to use our rail WiFi services.Passengers, through their own mobile phone, have access to the free WiFi network in each carriage, access to our rich mobile internet entertainment content andtravel services. According to the annual statistical bulletin of China Railway Corporation in 2017, there were about 6,030 trains in operation in China in 2017,consisting of 2,935 high speed trains and 3,095 express trains. The rail WiFi system that we have installed are currently all on express trains. The market value will bemultiplied several times following the extended coverage of service on other trains.Our StrengthsWe believe the following strengths differentiate us from our competitors:Our strategy is to build up personalized and targeted service products for travelers through rail WiFi networks, enabling our services to evolve into a coredriving distribution platform that provides content, news, games, ecommerce, OTO service, travel services and advertising and marketing. In comparison, ourcompetitors offer simple forms of media services on trains. We focus on personalized and targeted matching between users on long distance trips and services. Ourcompetitors focus on operating and generating internet traffic.We possess a complete set of technology system including network, client end and service and operation platform. We have patent protections for WiFiequipment on trains. Our technology strengths are briefly summarized below.WiFi EquipmentPatent protected. Supports WiFi/3G/4G telecom modules; 4 core CPU with X86 architecture, and SSD hard disk with big storage for localcontents.InfrastructureThe technology infrastructures include the application program system, big data gathering and processing systems, intelligence cloudsservice deployment structure systems and our WiFi hardware server deployment structure system. The operation center, big data center,contents center and railWiFi server system are built on this infrastructure. On the above layer, the equipment management platform,account and payment platform, contents management platform and advertisement distribution platform are set up for daily managementpurpose.LuoKuang strengthens the connection of services among people, setting and locations. In catering to people on the move, we anticipate strengthening therelationship between users and their locations in a given moment. Currently, LuoKuang provides the link between users and thirdparty service providers andprovides value added services to both users and thirdparty service providers. The connection is not simply a traffic diversion, but also the direct presentation ofrelevant services in the LuoKuang platform. The open API interface and independent product software package allows easy access by service providers anddevelopers and supports data service, advertisement operations, billing, users promotion and product marketing services. As an API product, LuoKuang does notcreate content or services. The content and services are provided by our partners in the LuoKuang platform. Now, the majority of top mobile internet content andservices providers in China have a presence in the Luokuang platform. Those include, but are not limited to, Toutiao, Wangyi News, iqiyi, Letv, YoudianCinema(Hollywood films), Sohu video, Phoenix Video, Kugou Music, FM Qingting, iReader, Baidu Literature, Phoenix Novel, Baidu Game, Meituan, Dianping, andsimilar content providers.22Our StrategyLuoKuang is positioned to provide API interface services and geographic information social services. The API interface services are provided within thetypical BC model. LuoKuang pushes the content and services from thirdparty service providers to users. The local businesses, service practitioners, residents, andforeign travelers are all defined as a “user” and may participate in social interactions based on local value information and generate UGC content. The socalled localvalue information is defined as information, views, evaluations, experiences and experience sharing related to the local cultural scene, native products,entertainment, food, tourism and activities.The LuoKuang user growth strategy is to have access to users through the travelers’ use of mobile devices in connection with longdistance train travel.Through deploying WiFi systems on trains and providing free WiFi access to passengers, LuoKuang is able to have consistent access to longdistance travelers.The WiFi system on the train has become a powerful user portal at the early stage of LuoKuang and has gained substantial user traffic. We are in a leading positionin terms of numbers of trains contracted and trains in operation with our free WiFi system. We have contracted with about 700 trains, which cover almost 560 millionannual passenger trips. As of the date of this report, approximately 290 trains are operating our rail WiFi system. We will continue to install our rail WiFi system inthe following years.The development strategy for LuoKuang encompasses the following:1.Enhance our local cycle service (a recommendation service system based on the location of travelers after their arrival, recommendations includingtourist attractions, local specialties and other items of interest), strengthen services for arrivals in the form of social interaction and focus on the valueof relationships between users and their current locations.2.Focus on the development of geographic positioning technology. Get the business of local cycle and users on train mixed together. We will put oureffort to maximize the synergy effect.3.Big Data: Behavior data about passenger trips is obtained via the traffic entrance of rail WiFi and these data will help to optimize our product.4.While enhancing setting service experiences and optimizing entertainment experiences, we will enrich ecommerce services on trains featuringrecommendations of customized products and ecommerce shopping guidance of products labeled with specific geographic location (and trafficdiversion).5.Focus on API positioning and attract more premium vertical service providers (contents and services).Intellectual PropertyWe have registered the following software copyrights, patents and trademarks for our business operations. We believe this intellectual property forms anintegral part of our competitive strength.23Patents:We have been granted some inventions by the State Intellectual Property Office of PRC. We possess a complete set of technology system includingnetwork, client end and service and operation platform. We have patent protections for WiFi equipment on trains. We have received the following patents:No.Name of patentTypeRegistrationNumberDate of Insurance1.Wireless communication multimedia chip business consumer informationacquisition terminal deviceInventionZL 2010 2 0528767.9Sep 21, 20112.A user behavior processing method and device for intelligent terminalInventionZL 2013 1 0301728.3May 27, 20153.A global positioning system terminal deviceInventionZL 2010 2 0253452.8Nov 7, 20114.A wireless multimedia serverInventionZL 2013 2 0220183.9Nov 13, 20135.Ordering system of passengers on trainInventionZL 2015 2 0095381.6Aug 5, 20156.A wireless multimedia serverInventionZL 2015 2 0201382.4Oct 28, 20157.An antenna structureInventionZL 2016 2 0424352.4Mar 1, 20178.Spatial data progressive transmission method and deviceInvention201010617383.9Jun 15, 20169.Methods and devices for conflict detection and avoidance of spatial entity elementlabelingInvention201010617385.8Mar 26, 201410.Spatial data processing method and deviceInvention201010617399.XJun 26, 201311.Method and device of spatial data simplificationInvention201010617400.9Mar 13, 201312.Method and device for judging the occlusion type of space entityInvention201010617403.2Sep 25, 201313.A method and device for distributed mapping of 3d model dataInvention201110274924.7Mar 26, 201414.Data simplification of 3d model, gradual transmission method and deviceInvention201110275336.5Mar 25, 201515.Spatial data transmission method and deviceInvention201110306393.5Dec 13, 201416.Methods and devices for spatial data processing, simplification and progressivetransmissionInvention201210104250.0Jun 10, 201517.Spatial data progressive transmission method and deviceInvention201310367021.2Jun 23, 201718.Simplification method and device of spatial dataInvention201310367128.7Sep 22, 201719.The method and device to accelerate transmission and display of graphic dataacross platformsInvention201210116149.7Aug 10, 201620.Methods and devices related to spatial data compression, decompression andprogressive transmissionInvention201310136682.4Nov 10, 2017We also have two patents outside of China.No.Name of patentCountryNationalRegistrationNumberDate ofInsurance1.Spatial data processing method and deviceJapan2012547439Jun 20, 20142.Methods and devices related to spatial data compression, decompression andprogressive transmissionU.S.A14/394,610Sep 5, 201724Software Copyrights:We have received the following software copyrights from the National Copyright Administration (“NCA”) of PRC:No.Name of CopyrightAchievement approachRegistration numberTime of obtainExpire time1.WAP PUSH Business operation platformsystemIndependent research anddevelopment2007SRBJ1464Jul 23, 200750 years2.TDSCDMA Streaming media businessmanagement platform software V1.0Independent research anddevelopment2009SRBJ0412Jan 22, 200950 years3.Content management platform systemsoftware V1.0Independent research anddevelopment2009SRBJ1374Apr 1, 200950 years4.Mobile multimedia broadcast electronicservice guide system software V1.0Independent research anddevelopment2009SRBJ1365Apr 1, 200950 years5.Mobile video business operation platformsystem V1.0Independent research anddevelopment2007SRBJ1463Jul 23, 200750 years6.Mobile multimedia broadcast emergencybroadcast platform software V1.0Independent research anddevelopment2010SRBJ0720Mar 5, 201050 years7.Mobile multimedia broadcast audio richmedia interactive platform softwareV1.0Independent research anddevelopment2010SRBJ0719Mar 5, 201050 years8.Printer typesetting and printing softwareV1.0Independent research anddevelopment2011SRBJ4190Sep 28, 201150 years9.Electronic newspaper business supportplatform software V1.0Independent research anddevelopment2011SRBJ4186Sep 28, 201150 years10.Public information business platformsoftware V1.0Independent research anddevelopment2011SRBJ3810Sep 27, 201150 years11.User interface scripting software V1.0Independent research anddevelopment2011SRBJ3809Sep 27, 201150 years12.Integrated business management platformsoftware V1.0Independent research anddevelopment2012SR003002Jan 16, 201250 years13.Interactive business development platformsoftwareIndependent research anddevelopment2011SRBJ4593Nov 29, 201150 years14.Instant messaging and messaging systemsoftwareIndependent research anddevelopment2014SR122231Aug 5, 201450 years15.General statistical platform software forclient productsIndependent research anddevelopment2014SR216662Dec 30, 201450 years16.CMMB Data broadcast managementplatform softwareIndependent research anddevelopment2009SRBJ0391Jan 22, 200950 years17.Integrated passenger train service systemIndependent research anddevelopment2012SR083665Sep 5, 201250 years25No.Name of CopyrightAchievement approachRegistration numberTime of obtainExpire time18.JHBY Train inspection managementsystemIndependent research anddevelopment2013SR015105Feb 21, 201350 years19.Integrated information engine platformsoftware V1.0Independent research anddevelopment2014SR040347Nov 30, 200150 years20.Super information engine developmentplatform software V5.0Independent research anddevelopment2014SR036792Mar 5, 200350 years21.Core map super network informationengine platform software V1.0Independent research anddevelopment2014SR036772Sep 15, 200750 years22.Integrated management of the grid gissoftware V1.0Independent research anddevelopment2014SR036808Jun 20, 200850 years23.Core map rural power grid equipment GPSpatrol system software V1.0Independent research anddevelopment2014SR036810Dec 10, 200850 years24.Diagram grid patrol PDA system softwareV1.0Independent research anddevelopment2014SR036778Dec 12, 200850 years25.Core map geographic information enginedesktop platform software V1.0Independent research anddevelopment2014SR036614Jan 15, 200950 years26.Integrated management of the gridgeographic information Web systemsoftware V1.0Independent research anddevelopment2014SR036799Mar 10, 200950 years27.Core map railway power supply equipmentGPS patrol system software V1.0Independent research anddevelopment2014SR036783Mar 25, 201050 years28.Core map network 3 d map server softwareV1.0Independent research anddevelopment2014SR036788Feb 20, 201150 years29.Core map network 3d map clientsoftwareV1.0Independent research anddevelopment2014SR036637Feb 22, 201150 years30.Core map 3d map network publishingplatform software V1.0Independent research anddevelopment2014SR036633Mar 10, 201150 years31.Core map 3d map network release pluginsystem software V1.0Independent research anddevelopment2014SR036622Mar 15, 201150 years32.Core map network 3d map smartphoneplatform software V1.0Independent research anddevelopment2014SR036638Apr 28, 201150 years33.Core map network GIS Shared mobileplatform software V1.0Independent research anddevelopment2014SR036634Oct 31, 201150 years34.Core map network GIS sharing platformsoftware V1.0Independent research anddevelopment2014SR036639Dec 16, 201150 yearsTrademarks:We have registered the following trademarks with the Trademark Office, State Administration for Industry and Commerce in the PRC:NoTrademarkClassification NumberValid PeriodRegistration Number1Y图形382010.04.212020.04.2067460692Y图形412010.09.072020.09.0667460673YRADIO文字352010.07.212020.07.2067334374YRADIO文字382010.04.21.2020.04.2067334385YRADIO文字412010.09.072020.09.0667334396LookLook图形382009.04.072019.04.0646660517LookLook图形422008.12.212018.12.2046660508YTV文字352010.07.212020.07.2067335799YTV文字382010.05.282020.05.27673357810YTV文字412010.09.072020.09.06673358111YTV文字422010.09.072020.09.06673358012YOUTV文字352010.07.212020.07.20673344013YOUTV文字382010.05.282020.05.27673344114xfeng文字352012.03.282022.03.27922914526NoTrademarkClassification NumberValid PeriodRegistration Number15xfeng文字382012.03.282022.03.27922916016xfeng文字412012.03.282022.03.27922919017xfeng文字422012.03.282022.03.27922922118中传视讯文字+图形422008.12.212018.12.20466604719中传视讯文字422008.12.212018.12.20466604820中传视讯文字382008.12.212018.12.20466604921新蜂文字382011.08.212021.08.20853890722新蜂文字422012.01.282022.01.27853907823新蜂.潮文字382011.08.212021.08.20853910424新蜂.潮文字422012.01.282022.01.27853914125新影力412014.08.282024.08.271228864326小人图形352014.08.282024.08.271228798527小人图形382014.08.282024.08.271228858028小人图形412014.08.282024.08.271228862929小人图形422014.08.282024.08.271228843530中传文字382014.08.282024.08.271228826731中传图形382014.08.282024.08.271228828932中童文字412014.08.072024.08.061221408533中童在线文字412014.08.072024.08.061221409234翠鸟文字382014.08.072014.08.061221405835翠鸟文字422014.08.072014.08.061221412536爱翠鸟文字382014.08.072024.08.061221406637爱翠鸟文字412014.08.072024.08.061221409638爱翠鸟文字422014.08.072024.08.061221412639翠鸟图形352014.08.072024.08.061221404040翠鸟图形382014.08.072024.08.061221407441翠鸟图形412014.08.072024.08.061221410042翠鸟图形422014.08.072024.08.061221413143信号小喇叭图形+CMEDIA412015.03.212025.03.201248043944LookLook图形382015.11.142025.11.131153342845LookLook图形422014.06.212024.06.201153372046LookLook文字382014.07.142024.07.131153406747LookLook文字422014.04.142024.04.131153422748L图形352014.02.282024.02.271153500249L图形382014.02.282024.02.271153507350L图形412014.02.282024.02.271153518151L图形422014.02.282024.02.271153526252箩筐图形412016.06.142026.06.131658022853箩筐图形422016.06.142026.06.131658022754箩筐文字422016.09.282026.09.271658024955箩筐文字412016.06.142026.06.131658025056箩筐文字352016.09.212026.09.201658025257箩筐文字92016.06.142026.06.131658025327NoTrademarkClassification NumberValid PeriodRegistration Number58箩筐图形382016.06.142026.06.131658022959箩筐图形352016.06.142026.06.131658023060箩筐图形92016.06.142026.06.131658023161微时光文字422016.09.282026.09.271658024762传游录屏文字92016.06.142026.06.131678214463传游录屏文字352016.06.142026.06.131678214364传游录屏文字382016.06.142026.06.131678214265传游录屏文字412016.06.142026.06.131678214166传游录屏文字422016.06.142026.06.131678214067录游器文字92016.06.142026.06.131678213568录游器文字352016.06.142026.06.131678213669录游器文字382016.06.142026.06.131678213770录游器文字412016.06.142026.06.131678213871录游器文字422016.06.142026.06.131678213972畅联TV文字412016.01.212026.01.201579246773畅联TV文字382016.01.212026.01.201579246874SuperEngine92016.01.212026.01.20812572275SuperEngine422016.01.212026.01.20812572876超擎9/422016.01.212026.01.201647320577SUPERENGINE9/422016.01.212026.01.2016473185*See below for an explanation of each classification number used in the table above.Classification No. 9: data processing apparatus, couplers (data processing equipment), computer software (recorded), monitors (computer programs), smartcards (integrated circuit cards), electrodynamic apparatus for the remote control of signals, alarms, and electric installations for the remote control of industrialoperations.Classification No. 35: auctioneering, sales promotion for others, marketing analysis, marketing research, importexport agencies, advisory services forbusiness management, business management for franchise, personnel management consultancy, relocation services for businesses, and systemization ofinformation into computer databases.Classification No. 38: Include services that enable at least sensory communication between two people. Such services include that allow one person to talkto another, send messages from one person to another, Make verbal or visual contact between one person and the other. This classification especially include theservice for broadcasting radio or television programs. Except for radio advertising services and telemarketing services.Classification No. 41: instruction services, teaching, education information, tuition, arranging and conducting of colloquiums, publication of electronicbooks and journals online, amusements, and vocational guidance.Classification No. 42: technical research, studies (technical project), computer software design, updating of computer software, recovery of computer data,computer systems analysis, installation of computer software, computer antivirus protection, and research and development for others. 28Business Certificates and QualificationsWe have obtained all necessary regulatory certifications to conduct our business in the PRC, including without limitation, the following: SoftwareEnterprise Recognition Certificate, Computer Information System Integration Qualification Certificate, Construction Enterprise Qualification Certificate, and SecurityTechnology & Protection Enterprise Certificate. We have also been properly certified as a hightech enterprise and have met the ISO 9001:2000 qualificationmanagement system.Legal ProceedingsAlthough we may, from time to time, be involved in litigation and claims arising out of our operations in the normal course of business, we do not believethat we are a party to any litigation that will have a material adverse impact on our financial condition or results of operations. To our knowledge, other than asdescribed below there are no material legal proceedings threatened against us. From time to time, we may be subject to various claims and legal actions arising in theordinary course of business. Following the consummation of the AEA, we became successor in interest to the legal proceedings described below.Litigation with Shanghai Fusheng Weier Intelligent Control Technology Co., Ltd.On January 22, 2016, Zhong Chuan Rui You and Shanghai Fusheng Weier Intelligent Control Technology Co., Ltd. (“Fusheng Weier”) signed a contract forequipment of $1,652,842 (RMB10,800,000). Since Zhong Chuan Rui You did not make the payments of $1,126,381 (RMB7,360,000) on the due dates, Fusheng Weierfiled a lawsuit against Zhong Chuan Rui You in Shanghai Xuhui District People's Court on October 8, 2016. On March 9, 2017, Xuhui District People's Court issuedthe verdict requiring Zhong Chuan Rui You to pay the overdue debts. In August 2017, C Media Limited made the payment of $512,075 (RMB3,346,000). Theremaining balance has been accrued in accounts payable. The payment schedule for the remaining balance is being negotiated by the two parties. On February 5,2018, a hearing was held adding Zhong Chuan Shi Xun as a defendant. The Group plans to settle the remaining balance within one year.Lawsuit with Gansu Jinlun Culture Media Co., Ltd.On August 22, 2014, Zhong Chuan Rui You and Gansu Jinlun Culture Media Co., Ltd. (“Gansu Jinlun”) signed a “Lanzhou Railway Bureau AirconditionedTrain WiFi Network System Advertising Operation Rights Agreement” for advertising on 72 trains of $1,467,880 (RMB9,604,633). Due to the dispute on theproject implementation, Zhong Chuan Rui You did not pay the advertising fee. On August 23, 2017, Gansu Jinlun filed a lawsuit with Gansu Intermediate People'sCourt. On December 19, 2017, Gansu Intermediate People's Court issued a verdict, ruling that Zhong Chuan Rui You settle the overdue advertising fee. Since only 18out of 72 trains have been installed with Wifi network system, Zhong Chuan Rui You disputed and appealed to the verdict. The next court trial date has not yet beendetermined.C Media and Gansu Jinlun are negotiating a potential settlement to resume the contract. According to the legal counsel, it is probable that the settlementwill amount to approximately $459,000 (RMB3,000,000); therefore, this amount has been accrued in accounts payable as at December 31, 2017.Litigation with Shenzhen Hua Xun Fang Zhou Technology Co., Ltd.On June 16, 2015, Zhong Chuan Rui You signed a cooperation agreement with Shenzhen Hua Xun Fang Zhou Technology Co., Ltd. (“Shenzhen Hua Xun”)and Xuesong Song, a major shareholder of C Media Limited. Pursuant to this agreement, Zhong Chuan Rui You procures equipment from Shenzhen Hua Xun.Xuesong Song acts as a joint liability guarantor for the entire debts of Zhong Chuan Rui You under this agreement. As Zhong Chuan Rui You did not make thepayments on the due dates, Shenzhen Hua Xun filed a lawsuit with Shenzhen Baoan District People's Court on May 31, 2016. On November 1, 2016, Zhong ChuanRui You, Xuesong Song and Shenzhen Hua Xun reached a settlement in Shenzhen Baoan District People's Court to settle $1,735,389 (RMB11,355,000) in fourinstalments. On December 30, 2017, the debt was assigned to C Media Limited.29C. ORGANIZATIONAL STRUCTUREThe following diagram illustrates our corporate structure and the place of formation and affiliation of each of our subsidiaries and affiliates as of September30, 2018.30The following diagram illustrates our corporate structure and the place of formation and affiliation of each of our subsidiaries and affiliates as of December31, 2017.Contractual Arrangements with Beijing Zhong Chuan Shi Xun Technology Limited’s Subsidiaries and Their Respective ShareholdersTo comply with the PRC legal restrictions on foreign ownership of companies that operate mobile application services, our subsidiaries operate in suchrestricted service areas in the PRC through certain PRC domestic companies, whose equity interests are held by certain management members or founders of the LKTechnology Ltd. Part of the registered capital of these PRC domestic companies was funded by certain management members or founders of LK Technology Ltd. LKTechnology Ltd., through its subsidiary Zhong Chuan Tian Xia Information and Technology (Shenzhen) Limited (the “WFOE”), has entered into an exclusivebusiness cooperation agreement with Beijing Zhong Chuan Shi Xun Technology Limited (“Zhong Chuan Shi Xun” or the “VIE”) the PRC domestic company, whichentitle the WFOE to receive a majority of profit of Zhong Chuan Shi Xun. In addition, Zhong Chuan Tian Xia Information and Technology (Shenzhen) Limited hasentered into certain agreements with those management members or founders, including equity interest pledge agreement of the equity interests held by thosemanagement members or founders and exclusive option agreement to acquire the equity interests in these companies when permitted by the PRC laws, rules andregulations. Details of the typical VIE structure of our significant consolidated VIE, primarily domestic companies associated with the operations such as ZhongChuan Shi Xun and its subsidiaries of Zhong Chuan Rui You, Huoerguosi Luokuang and Jiu Zhou Shi Dai, are set forth below: Exclusive Business Cooperation AgreementThe VIE has entered into an exclusive business services agreement with the WFOE, pursuant to which the WFOE provides exclusive business services tothe VIE. In exchange, the VIE pays a service fee to the WFOE which amounts to be no less than the 80% of the VIE’s aftertax profit, resulting in a transfer ofsubstantially all of the profits from the VIE to the WFOE.Exclusive Option AgreementThe VIE equity holders have granted the WFOE exclusive call options to purchase their equity interest in the VIE at an exercise price equal to the minimumprice as permitted by applicable PRC laws. The WFOE may nominate another entity or individual to purchase the equity interest, if applicable, under the call options.Each call option is exercisable subject to the condition that applicable PRC laws, rules and regulations do not prohibit completion of the transfer of the equityinterest pursuant to the call option. The VIE agrees not to distribute any dividends to the VIE equity holders without the approval of WFOE.31Equity Interest Pledge AgreementPursuant to the equity pledge agreement, the VIE equity holders have pledged all of their interests in the equity of the VIE as a continuing first prioritysecurity interest in favor of the WFOE to secure the performance of obligations by the VIEs and/or the equity holders under the exclusive business cooperationagreement. The WFOE is entitled to exercise its right to dispose of the VIE equity holders’ pledged interests in the equity of the VIE and has priority in receivingpayment by the application of proceeds from the auction or sale of such pledged interests, in the event of any breach or default under the exclusive businesscooperation agreement, if applicable. These equity pledge agreement remain in force until all the obligations under the exclusive business cooperation agreementhave been fulfilled.The exclusive business cooperation agreement and equity interest pledge agreement described above also enable the Company to receive substantially allof the economic benefits from the VIE by typically entitling the WFOE to all dividends and other distributions declared by the VIE and to any distributions orproceeds from the disposal by the VIE equity holders of their equity interests in the VIE.D. PROPERTY AND EQUIPMENTWe lease offices located at Lab 30 & Lab 32, SOHO 3Q, No 9, Guanghua Road, Chaoyang District, Beijing, which covers a floor space of 600 square meters.These leases expire at different times throughout 2018 and are renewable upon negotiation.ITEM 4A. UNRESOLVED STAFF COMMENTSNone.ITEM 5. OPERATING AND FINANCIAL REVIEW AND PROSPECTSA . OPERATING RESULTS.The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our consolidatedfinancial statements and the notes to those financial statements appearing elsewhere in this report. This discussion and analysis contains forwardlookingstatements that involve significant risks and uncertainties. As a result of many factors, such as our anticipated growth strategy, our plans to recruit moreemployees, our plans to invest in research and development to enhance our product or service lines, our future business development, results of operations andfinancial condition, expected changes in our net revenues and certain cost or expense items, our ability to attract and retain customers, trends and competitionin the enterprise mobile software application market, and the factors set forth elsewhere in this report, our actual results may differ materially from thoseanticipated in these forwardlooking statements. In light of those risks and uncertainties, there can be no assurance that the forwardlooking statementscontained in this report will in fact occur. You should not place undue reliance on the forwardlooking statements contained in this report.The forwardlooking statements speak only as of the date on which they are made, and, except to the extent required by U.S. federal securities laws, weundertake no obligation to update any forwardlooking statement to reflect events or circumstances after the date on which the statement is made or to reflectthe occurrence of unanticipated events. Further, the information about our intentions contained in this report is a statement of our intention as of the date of thisreport and is based upon, among other things, the existing regulatory environment, industry conditions, market conditions and prices and our assumptions as ofsuch date. We may change our intentions, at any time and without notice, based upon any changes in such factors, in our assumptions or otherwise.32Unless the context otherwise requires, all references to (i) “PRC” and “China” are to the People’s Republic of China; (ii) “U.S. dollar,” “$” and “US$”are to United States dollars; and (iii) “RMB”, “Yuan” and Renminbi are to the currency of the PRC or China.OverviewLuokung Technology was incorporated on October 27, 2009 under the laws of the British Virgin Islands. We are a holding company and conduct ouroperations through LK Technology Ltd., a British Virgin Islands limited liability company (“LK Technology”) and its whollyowned subsidiaries, MMB Limited andMobile Media (China) Limited and their respective subsidiaries and a contractuallycontrolled entity in the PRC named Beijing Zhong Chuan Shi Xun Technology,which hold the rights to deploy WiFi systems on about 700 trains in China, including 290 trains in which WiFi systems have already been installed and are inoperation. In May 2010, we consummated an initial public offering of our American Depository Shares, or ADSs, for gross proceeds of $16 million, and our ADSswere listed on the NASDAQ Capital Market under the ticker symbol “KONE”. Our ordinary shares are not currently listed on any trading market. Our AmericanDepository Shares (“ADSs”) were voluntarily delisted from the NASDAQ Capital Market on September 19, 2018. We have applied to NASDAQ for the listing of ourordinary shares on the NASDAQ Capital Market and received an approval for listing of Ordinary Shares on August 6, 2018, and as of the date of this transitionreport, that application and approval are currently under review.On August 17, 2018, we consummated an asset exchange transaction, pursuant to which we exchanged all issued and outstanding capital stock in TopskyInfoTech Holdings Pte Ltd., the parent of Softech, for the issued and outstanding capital stock of LK Technology (the “Asset Exchange”). In connection with theAsset Exchange, we changed our name on August 20, 2018, and on September 20, 2018, completed the issuance to the shareholders of C Media Limited, the formerparent of LK Technology, of (i) 185,412,599 of our ordinary shares, par value $0.01 per share and (ii) 1,000,000 of our preferred shares. Upon the consummation of theAsset Exchange, we ceased our previous business operations and became a company focused on the provision of WiFi and mobile application products for longdistance travelers in China.On August 25, 2018, LK Technology entered into a Stock Purchase Agreement (the “Agreement”) with the shareholders (“Shareholders”) of SuperengineHoldings Limited, a limited liability company organized under the laws of the British Virgin Islands (the “Superengine”), pursuant to which LK Technology acquiredall of the issued and outstanding capital stock of Superengine for an aggregate purchase price of US$60 million (the “Purchase Price”), which are paid by theissuance of our Ordinary Shares in an amount equal to the quotient of (x) the Purchase Price divided by (y) the average of the closing prices of the Ordinary Shareson the NASDAQ Capital Market over the 12 months period preceding July 31, 2018. We are a party to the Agreement in connection with the issuance of theOrdinary Shares and certain other limited purposes.Results of operations for the fiscal year ended December 31, 2017 compared to the fiscal year ended December 31, 2016.RevenueWe provide displaybased online advertising services to customers by integrating text description, image and video, and displaying the advertisements in aprominent position of LuoKuang Application. We recognize revenue in accordance with ASC 605, over the contractual term based on the agreements andconfirmation letters signed by both parties, commencing on the date the customer’s advertisement is displayed on our platform.For the year ended December 31, 2017, we had revenue of $26,082,417, as compared to revenue of $5,233,145 for the year ended December 31, 2016, anincrease of $20,849,272, or 398.4%, which was primarily due to the increase of our advertising clients.Cost of revenueOur cost of revenue primarily consists of depreciation, labor cost, WiFi equipment installation fees, data charges, annual payments to local railway bureau,other overhead costs.33Cost of revenue for the year ended December 31, 2017 was $5,547,779, representing a decrease of $767,725 or 12.2% as compared to $6,315,504 for the yearended December 31, 2016. The decrease was primarily attributable to the decrease in labor cost as a result of our cost control and a decrease in the number ofmaintenance staff. Additionally, data charges decreased as train passengers prefer using their mobile data, leading to a decrease in 3G and 4G data.Selling and marketing expenseOur selling and marketing expense mainly include promotional and marketing expenses and compensation for our sales and marketing personnel.Selling expense totaled $23,908,733 for the year ended December 31, 2017, as compared to $6,209,804 for the year ended December 31, 2016, an increase of$17,698,929 or 285.0%. The increase was primarily attributable to the increase in promotional and marketing activities conducted by the Company.General and administrative expenseOur general and administrative expenses consist primarily of salaries and benefits for our general and administrative personnel, rent, fees and expenses forlegal, accounting and other professional servicesGeneral and administrative expense totaled $2,451,249 for the year ended December 31, 2017, as compared to $2,108,854 for the year ended December 31,2016, an increase of $342,395 or 16.2%.Research and development expenses.Research and development expenses primarily consist of salaries and benefits for research and development personnel.Research and development expenses totaled $1,046,198 for the year ended December 31, 2017, as compared to $2,882,202 for the year ended December 31,2016, a decrease of $1,836,004 or 63.7%. The decrease was primarily attributable to the Company reduced its expenses in research and development temporarily asour products are quite stable at present.Loss from operationsAs a result of the factors described above, for the year ended December 31, 2017, loss from operations amounted to $6,871,542, as compared to loss fromoperations of $12,283,219 for the year ended December 31, 2016, a decrease of $5,411,677, or 44.1%.Other income/expenseOther income/expense mainly include interest income from bank deposits, foreign currency transaction gain, and loss from investment.Net lossAs a result of the factors described above, our net loss was $6,810,454 for the year ended December 31, 2017, compared to net loss of $13,049,031 for theyear ended December 31, 2016, a decrease of $6,238,577 or 47.8%.Foreign currency translation adjustmentOur reporting currency is the U.S. dollar. The functional currency of our parent company and subsidiaries of Merchant Supreme and Prime Cheer is the U.S.dollar and the functional currency of the Company’s subsidiaries incorporated in China is the Chinese Renminbi (“RMB”). The financial statements of oursubsidiaries incorporated in China are translated to U.S. dollars using period end rates of exchange for assets and liabilities, and average rates of exchange (for theperiod) for revenue, costs, and expenses. Net gains and losses resulting from foreign exchange transactions are included in the consolidated statements ofoperations and comprehensive loss. As a result of foreign currency translations, which are a noncash adjustment, we reported a foreign currency translation gain of$90,671 for the year ended December 31, 2017, as compared to a foreign currency translation loss of $387,375 for the year ended December 31, 2016. This noncashgain had the effect of increasing/decreasing our reported comprehensive income/loss.34Comprehensive lossAs a result of our foreign currency translation adjustment, we had comprehensive loss for the year ended December 31, 2017 of $6,719,783, compared tocomprehensive loss of $12,661,656 for the year ended December 31, 2016.B. LIQUIDITY AND CAPITAL RESOURCESThe information contained in “Item 5. Operating and Financial Review and Prospects – A. Operating Results – Liquidity and Capital Resources” isincorporated herein by reference.C. RESEARCH AND DEVELOPMENT, PATENTS AND LICENSES, ETC.The discussions of our research and development activities were contained in “Item 4. Information about our Company – B. Business Overview –Research and Development” and “Item 5. Operating and Financial Review and Prospects – A. Operating Results – Operating Expenses – Research and DevelopmentExpenses” are incorporated herein by reference. In the years ended December 31, 2017 and 2016, we spent $1,046,198 and $2,882,202, respectively, on research anddevelopment activities.D. TREND INFORMATION.Industry and Market OutlookChina has awarded licenses to mobile phone companies to provide the superfast 4G network to customers. The licenses, which are designed to give mobilephone users faster access to services, were granted by the government to China Mobile, China Unicom Hong Kong and China Telecom. Since the grants, ChinaMobile has offered 4G to subscribers from December 18, 2013. China Unicom and China Telecom, the country's other two major carriers, also offer 4G wireless. Thenumber of China Mobile 4G customers has exceeded 900 million by the end of October in 2017. The move greatly bolstered business for telecom equipment makersand a range of other companies.Under China’s 12th FiveYear Plan, a key priority is for China to transition from “Made in China” to “Designed in China.” In order to achieve this goal, thegovernment plans to heavily invest in science and technology education and R&D so as to further develop China’s intellectual property rights system and support“NextGeneration IT” as a Strategic Emerging Industry (SEI). Additionally, China plans to upgrade the technological capabilities of private and public services,including “triple play” services (the convergence of telecom, broadcasting and Internet networks), ecommerce, and egovernment and statistics systems.Furthermore, the government plans to invest in R&D of the "Internet of things" and cloud computing, and develop digital and virtual technologies.E. OFFBALANCE SHEET ARRANGEMENTSWe have not entered into any financial guarantees or other commitments to guarantee the payment obligations of any third parties. We have not enteredinto any derivative contracts that are indexed to our shares and classified as shareholder’s equity, or that are not reflected in our consolidated financial statements.Furthermore, except for the mortgage referenced above, we do not have any retained or contingent interest in assets transferred to an unconsolidated entity thatserves as credit, liquidity or market risk support to such entity. We do not have any variable interest in any unconsolidated entity that provides financing, liquidity,market risk or credit support to us or engages in leasing, hedging or research and development services with us.35F. TABULAR DISCLOSURE OF CONTRACTUAL OBLIGATIONSAs of December 31, 2017, we did not have any contractual obligations required to be disclosed in this Item 5.F. ITEM 6. DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES.A. DIRECTORS AND SENIOR MANAGEMENT.Executive Officers and DirectorsThe following table sets forth the names and ages as of the date of this transition report of each of our executive officers and directors:NameAgePositionXuesong Song50Chief Executive Officer, Chairman and DirectorDongpu Zhang50PresidentJie Yu34Chief Financial OfficerKegang Peng46Vice President and DirectorChuang Tao51DirectorDennis Galgano (1)(2)69Director (Independent)Jin Shi (1)(2)49Director (Independent)Jiming Ha (1)(3)56Director (Independent)Zhihao Xu (3)42Director (Independent)(1)Member of the Audit Committee.(2)Member of the Compensation Committee.(3)Member of the Nominating and Corporate Governance Committee.Set forth below is biographical information concerning our executive officers and directors.Xuesong Song is a cofounder of C Media Limited and served as its chairman of the board of directors and chief executive officer from 2012 until theconsummation of the AEA. From February 2014 through April 2017, Mr. Song served as a director of Seven Stars Cloud Group, Inc. (NASDAQ: SSC) and fromJanuary 2013 through February 2015, Mr. Song served as a director of Pingtan Marine Enterprise Ltd. (NASDAQ: PME). From May 2006 through January 2009, Mr.Song served as the Chairman of the Board of ChinaGrowth North Acquisition Corporation, a special purpose acquisition company, which acquired UIB GroupLimited in January 2009, in which he remains a director. Mr. Song has been a principal of Chum Capital Group Limited since August 2001, a merchant banking firmthat invests in growth Chinese companies and advises them in financings, mergers & acquisitions and restructurings, and chief executive officer of Beijing ChumInvestment Co., Ltd. since December 2001. Mr. Song has been a director of Mobile Vision Communication Ltd. since July 2004. Mr. Song received a Master’s ofBusiness Administration degree from Oklahoma City/Tianjin Program.Dongpu Zhang was appointed as the President of the Company effective on August 25, 2018. Mr. Dongpu Zhang has served as the General Manager ofSuperEngine Graphics Software Technology Development (Suzhou) Co., Ltd. (“SuperEngine Suzou”) and the Chief Executive Officer of SuperEngine HoldingLimited since September 2016. From February, 2014 to August, 2016, Mr. Zhang served as vice president of Industrial Development Group under China Fortune LandDevelopment Co., Ltd. From March, 2009 to February, 2014, Mr. Zhang served as the vice president of Aerospace Science and Technology Holding Group Co., Ltd.Mr. Zhang receive his Master Degree of Computer Science from Harbin Institute of Technology in 1994 and his Bachelor Degree of information system fromChangsha Institute of technology in 1991.Jie Yu served as the chief financial officer of C Media Limited from January 2018 until the consummation of the asset exchange transactions. From June 2016to January 2018, Mr. Yu served as chief financial officer and secretary of the board of directors of MTI Environment Group Limited. Prior to joining MTI, Mr. Yuserved as the senior manager at DA HUA CPA from November 2012 to May 2016. Previously, Mr. Yu served as the manager at Crowe Horwath (Hong Kong) CPA.Mr. Yu holds a bachelor degree in accounting and finance from University of Auckland and postgraduate diploma in accounting from University of Auckland.36Kegang Peng served as the Vice Chairman of the board of directors C Media Limited from October 2014 to the consummation of the asset exchangetransactions, and is now a member of the Company’s board of directors. Previously, from 2012 to 2014, Mr. Peng was chairman of the board and founder of JiangsuSuqian Jinghaiboyuan Information and Technology Co., Ltd. Mr. Peng studied at Beijing University of Aeronautics and Astronautics majoring computer andapplication.20F 1 f20f2017_luokungtech.htm AMENDMENT NO. 1 TO FORM 20FUNITED STATESSECURITIES AND EXCHANGE COMMISSIONWASHINGTON, D.C. 20549FORM 20F☐ REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934OR☐ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934For the Fiscal year ended _____________OR☒ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934For the transition period from October 1, 2017 to December 31, 2017☐ SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934Date of event requiring this shell company report Commission file number: 00134738Luokung Technology Corp.(Exact name of Registrant as specified in its charter)Not applicable(Translation of Registrant’s name into English)British Virgin IslandsLAB 32, SOHO 3Q, No 9, Guanghua Road, Chaoyang District, BeijingPeople’s Republic of China, 100020(Jurisdiction of incorporation or organization)(Address of principal executive offices)Mr. Muqiao GengLAB32, SOHO 3Q, No 9, Guanghua Road, Chaoyang District, BeijingPeople’s Republic of China 100020Tel: (86) 1085866721(Name, telephone, Email and/or facsimile number and address of company contact person)Securities registered or to be registered pursuant to Section 12(b) of the Act:Title of each className of each exchange on which registeredOrdinary shares, par value $0.01 per shareNonePreferred shares, par value $0.01 per shareNoneSecurities registered or to be registered pursuant to Section 12(g) of the Act:none(Title of Class)Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act:none(Title of Class)Indicate the number of outstanding shares of each of the issuer’s classes of capital or common stock as of the close of the period covered by the transitionreport. 187,097,599 Ordinary Shares, including 186,383,224 Ordinary Shares represented by 714,375 American Depositary Shares, and 1,000,000 Preferred Sharesoutstanding as of September 20, 2018.Indicate by check mark if the registrant is a wellknown seasoned issuer, as defined in Rule 405 of the Securities Act. ☐ Yes ☒ NoIf this report is an annual or transition report, indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of theSecurities Exchange Act of 1934. ☐ Yes ☒ NoIndicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirementsfor the past 90 days. ☒ Yes ☐ NoIndicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File requiredto be submitted and posted pursuant to Rule 405 of Regulation ST (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that theregistrant was required to submit and post such files). ☒ Yes ☐ NoIndicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a nonaccelerated filer. See definition of “accelerated filer andlarge accelerated filer” in Rule 12b2 of the Exchange Act. (Check one):Large accelerated filer ☐ Accelerated filer ☐ Nonaccelerated filer ☒Indicate by check mark which basis of accounting the registrant has used to prepare the financial statements included in this filing.U.S. GAAP ☒International Financial Reporting Standards as issuedby the International Accounting Standards Board ☐Other ☐If “Other” has been checked in response to the previous question, indicate by check mark which financial statement item the registrant has elected tofollow. Item 17 ☐ Item 18 ☐If this is an transition report, indicate by check mark whether the registrant is a shell company (as defined in Rule 12b2 of the ExchangeAct). ☐ Yes ☒ NoExplanatory NoteLuokung Technology Corp. (the “Company”) is filing this transition report on Form 20F (“Transition Report”) in connection with the completion of theexchange of certain of its assets for substantially all of the assets of C Media Limited (“C Media”) pursuant to that Asset Exchange Agreement, dated January 25,2018 (the “Original AEA”), as supplemented by the Addendum to Asset Exchange Agreement, dated October 3, 2018 (the “Addendum” and together with theOriginal AEA, the “AEA”). Following the consummation of the AEA, on October 4, 2018, the Company changed its fiscal year end from September 30 to the fiscalyear end used by C Media, December 31. This Transition Report covers the threemonth period from Octorber 1, 2017 to December 31, 2017, and the fiscal yearsdescribed herein.In this transition report:●References to the “Company”, “we”, “our” and “us” are to Luokung Technology Corp. and its consolidated subsidiaries and variable interestentity, except as the context otherwise requires;●This transition report on Form 20F covers the threemonth period from October 1, 2017 through December 31, 2017 (the “Transition Period”) andreflects our financial results thereof. Prior to this transition report on Form 20F, our two most recent annual reports on Form 20F cover the fiscalyears ended September 30, 2017 and September 30, 2016, respectively, and reflect financial results for the respective twelvemonth periods fromOctober 1 to September 30. Unless otherwise noted, all references to years are to the calendar year from January 1 to December 31 and referencesto our fiscal year or years are to the fiscal year or years which, prior to the Transition Period, ended September 30, while from and after theTransition Period, ended December 31;●References to an “ADS” are to an American Depositary Share, each of which represents one of our Ordinary Shares with a par value of $.01 pershare.Special Note Regarding Forwardlooking StatementsThis transition report contains forwardlooking statements that involve risks and uncertainties. These statements involve known and unknown risks,uncertainties and other factors that may cause our actual results, performance or achievements to be materially different from those expressed or implied by theforwardlooking statements.You can identify these forwardlooking statements by words or phrases such as “may,” “will,” “expect,” “anticipate,” “aim,” “estimate,” “intend,” “plan,”“believe,” “likely to” or other similar expressions. We have based these forwardlooking statements largely on our current expectations and projections about futureevents and financial trends that we believe may affect our financial condition, results of operations, business strategy and financial needs. You should not placeundue reliance on these forwardlooking statements, which apply only as of the date of this transition report. These forwardlooking statements include:●our future business development, results of operations and financial condition;●expected changes in our net revenues and certain cost or expense items;●our ability to attract and retain customers; and●trends and competition in the enterprise mobile software application market.You should read this transition report thoroughly with the understanding that our actual future results may be materially different from, and/or worse, thanwhat we expect. We qualify all of our forwardlooking statements by these cautionary statements. Other sections of this transition report include additional factorswhich could adversely impact our business and financial performance. Moreover, we operate in an evolving environment. New risk factors and uncertainties emergefrom time to time and it is not possible for our management to predict all risk factors and uncertainties, nor can we assess the impact of all factors on our business orthe extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forwardlooking statements.This transition report also contains estimates, projections and statistical data related to the market for the provision of WiFi and mobile applications inChina. This market data, including data from IDC, a leading provider of market data and intelligence, speaks as of the date it was published and includes projectionsthat are based on a number of assumptions and are not representations of fact. The market for the provision of WiFi and mobile applications in China may not growat the rates projected by the market data, or at all. The failure of the market to grow at the projected rates may materially and adversely affect our business and themarket price of our ADSs. In addition, the rapidly changing nature of the market for the provision of WiFi and mobile applications subjects any projections orestimates relating to the growth prospects or future condition of our market to significant uncertainties. If any one or more of the assumptions underlying the marketdata proves to be incorrect, actual results may differ from the projections based on these assumptions.You should not rely upon forwardlooking statements as predictions of future events. We undertake no obligation to update or revise any forwardlookingstatements, whether as a result of new information, future events or otherwise.TABLE OF CONTENTSPart IItem 1.Identity of Directors, Senior Management and Advisers.1Item 2.Offer Statistics and Expected Timetable.1Item 3.Key Information.1A.Selected Financial Data.1B.Capitalization and Indebtedness.3C.Reasons for the Offer and Use of Proceeds.3D.Risk Factors.3Item 4.Information on the Company.19A.History and Development of the Company.19B.Business Overview.20C.Organizational Structure.30D.Property, Plants and Equipment.32Item 4A.Unresolved Staff Comments.32Item 5.Operating and Financial Review and Prospects.32A.Operating Results.32B.Liquidity and Capital Resources.35C.Research and Development, Patents and Licenses, etc.35D.Trend Information.35E.Offbalance Sheet Arrangements.35F.Tabular Disclosure of Contractual Obligations.36Item 6.Directors, Senior Management and Employees.36A.Directors and Senior Management.36B.Compensation.37C.Board Practices.40D.Employees.43E.Share Ownership.43Item 7.Major Shareholders and Related Party Transactions.44A.Major Shareholders.44B.Related Party Transactions.45C.Interests of Experts and Counsel.45Item 8.Financial Information.45A.Consolidated Statements and Other Financial Information.45B.Significant Changes.46Item 9.The Offer and Listing.46A.Offer and Listing Details.46B.Plan of Distribution.47C.Markets.47D.Selling shareholders.48E.Dilution.48F.Expenses of the issue.48Item 10.Additional Information.48A.Share Capital.48B.Memorandum and Articles of Association.48C.Material Contracts.53D.Exchange Controls.54E.Taxation.61F.Dividends and Paying Agents.67G.Statement by Experts.67H.Documents on Display.67I.Subsidiary Information.68Item 11.Quantitative and Qualitative Disclosures about Market Risk.68Item 12.Description of Securities Other than Equity Securities.69A.Debt Securities.69B.Warrants and Rights.69C.Other Securities.69D.American Depositary Shares.69iPart IIItem 13.Defaults, Dividend Arrearages and Delinquencies.71Item 14.Material Modifications to the Rights of Security Holders and Use of Proceeds.71Item 15.Controls and Procedures.71Item 16.[Reserved.]72Item 16A.Audit Committee Financial Expert.72Item 16B.Code of Ethics.73Item 16C.Principal Accountant Fees and Services.73Item 16D.Exemptions from the Listing Standards for Audit Committees.73Item 16E.Purchases of Equity Securities by the Issuer and Affiliated Purchasers.73Item 16F.Change in Registrant’s Certifying Accountant.73Item 16G.Corporate Governance.73Item 16H.Mine Safety Disclosure.73Part IIIItem 17.Financial Statements.74Item 18.Financial Statements.74Item 19.Exhibits.74Index to Consolidated Financial StatementsF1iiPART IITEM 1. IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS.The directors of Luokung Technology Corp. are Xuesong Song, Kegang Peng, Dennis Galgano, Jin Shi, Jiming Ha, Zhihao Xu and Chuang Tao. Thebusiness address for our directors is LAB 32, SOHO 3Q, No 9, Guanghua Road, Chaoyang District, Beijing, People’s Republic of China.Moore Stephens CPA Limited has served as our auditor since October 5, 2018, and is located at 801806 Silvercord Tower 1, 30 Canton road, Tsimshatsui,Kowloon, Hong Kong. BDO China Shun Lun Pan Certified Public Accountants LLP served as our auditors for the last three years, and are located at 4F, No. 61Nanjing Road, Shanghai, People’s Republic of China.Garvey Schubert Barer, P.C., serves as our legal counsel in the United States, and is located at Flour Mill Building, 1000 Potomac Street NW, Suite 200,Washington, D.C., 200073501.Conyers Dill & Pearlman serves as our legal counsel with regard to the laws of the British Virgin Islands, and is located at 29th Floor, One Exchange Square,8 Connaught Place, Central, Hong Kong.ITEM 2. OFFER STATISTICS AND EXPECTED TIMETABLE.Not applicable.ITEM 3. KEY INFORMATION.A. SELECTED FINANCIAL DATA.Luokung Technology Corp. and its consolidated subsidiaries (“Luokung Technology”, “we”, “us”, or “the Company”) consummated an asset exchangeagreement pursuant to which we exchanged our existing assets with those of C Media Limited (the “Asset Exchange”) on August 17, 2018, and we changed ourname from Kingtone Wirelessinfo Solution Holding Ltd. to our current name on August 20, 2018. On October 4, 2018, in connection with the consummation of the Asset Exchange, we changed our fiscal year end from September 30 to December 31.1The selected financial data for the fiscal years ended December 31 2017 and 2016 have been derived from our audited consolidated and combined financialstatements. The selected consolidated and combined financial data should be read in conjunction with our audited financial statements and the accompanying notesand “Item 5 – Operating and Financial Review and Prospects.” Our consolidated and combined financial statements are prepared and presented in accordance withUnited States generally accepted accounting principles, or U.S. GAAP. Our historical results do not necessarily indicate our results expected for any future periods.You should not view our historical results as an indicator of our future performance.LK TECHNOLOGY LTD. AND SUBSIDIARIESSELECTED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS(IN U.S. DOLLARS)For the years ended December 31,20172016Revenues$26,082,417$5,233,145Less: Cost of revenues5,547,7796,315,504Less: Operating expenses:Selling and marketing23,908,7336,209,804General and administrative2,451,2492,108,854Research and development1,046,1982,882,202Total operating expenses27,406,18011,200,860Loss from operations(6,871,542)(12,283,219)Other income (expense):Interest expense(26,611)(4,412)Foreign exchange gains(losses)350,679(298,257)Loss from investment(428,571)Other income (expense), net(262,980)(34,572)Total other income (expense), net61,088(765,812)Loss before income taxes(6,810,454)(13,049,031)Income taxesNet loss$(6,810,454)$(13,049,031)Other comprehensive income:Foreign currency translation adjustment90,671387,375Total comprehensive loss$(6,719,783)$(12,661,656)2LK TECHNOLOGY LTD. AND SUBSIDIARIESSELECTED CONSOLIDATED BALANCE SHEETS(IN U.S. DOLLARS)As of December 31,20172016Accounts receivable, net of allowance for doubtful accounts9,729,6251,865,836Amounts due from related parties11,760,692Property and equipment, net5,044,8727,771,027Goodwill7,239,9367,239,936TOTAL ASSETS37,582,85821,114,832Accounts payable8,784,5186,446,584Accrued liabilities and other payables12,962,91211,329,613Total liabilities25,311,11333,905,520Total Shareholder’s Equity (Deficit)12,271,745(12,790,688)TOTAL LIABILITIES AND SHAREHOLDER’S EQUITY (DEFICIT)37,582,85821,114,832B. CAPITALIZATION AND INDEBTEDNESS.Not applicable.C. REASONS FOR THE OFFER AND USE OF PROCEEDS.Not applicable.D. RISK FACTORS.An investment in our ADSs and ordinary shares involves a high degree of risk. You should carefully consider the risks and uncertainties described belowtogether with all other information contained in this transition report, including the matters discussed under “Special Note Regarding ForwardLooking Statements,”before you decide to invest in our ADSs or ordinary shares. You should pay particular attention to the fact that we are a holding company with substantialoperations in China and are subject to legal and regulatory environments that in many respects differ from those of the United States. If any of the following risks, orany other risks and uncertainties that are not presently foreseeable to us, actually occur, our business, financial condition, results of operations, liquidity and ourfuture growth prospects would be materially and adversely affected. You should also consider all other information contained in this transition report beforedeciding to invest in our ADSs or ordinary shares.Risks Related to Our Company and Our IndustryThe Company had incurred negative cash flows from operating activities and net losses as of December 31, 2017. These matters raise substantial doubt aboutthe Company’s ability to continue as a going concern.The Company’s consolidated financial statements are prepared using generally accepted accounting principles in the United States of America applicableto a going concern, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. As of and for the year endedDecember 31, 2017, the Company had incurred significant operating losses and working capital deficit. The ability of the Company to continue as a going concern isdependent on the Company obtaining adequate capital to fund operating losses until it becomes profitable. If the Company is unable to obtain adequate capital, itcould be forced to cease operations. The accompanying consolidated financial statements do not include any adjustments that might be necessary if the Companyis unable to continue as a going concern.3We may undertake acquisitions, investments, joint ventures or other strategic alliances, which could have a material adverse effect on our ability to manageour business. In addition, such undertakings may not be successful.Our strategy includes plans to grow both organically and through acquisitions, participation in joint ventures or other strategic alliances. Joint venturesand strategic alliances may expose us to new operational, regulatory and market risks, as well as risks associated with additional capital requirements. We may not beable, however, to identify suitable future acquisition candidates or alliance partners. Even if we identify suitable candidates or partners, we may be unable tocomplete an acquisition or alliance on terms commercially acceptable to us. If we fail to identify appropriate candidates or partners, or complete desired acquisitions,we may not be able to implement our strategies effectively or efficiently. In addition, our ability to successfully integrate acquired companies and their operations may be adversely affected by several factors. These factorsinclude:1.diversion of management’s attention;2.difficulties in retaining customers of the acquired companies;3.difficulties in retaining personnel of the acquired companies;4.entry into unfamiliar markets;5.unanticipated problems or legal liabilities; and6.tax and accounting issues.If we fail to integrate acquired companies efficiently, our earnings, revenue growth and business could be negatively affected.Due to intense competition for highlyskilled personnel, we may fail to attract and retain enough sufficiently trained employees to support our operations; ourability to bid for and obtain new projects may be negatively affected and our revenues could decline as a result.The IT industry relies on skilled employees, and our success depends to a significant extent on our ability to attract, hire, train and retain qualifiedemployees. There is significant competition in China for professionals with the skills necessary to develop the products and perform the services we offer to ourcustomers. Increased competition for these professionals, in the mobile application design area or otherwise, could have an adverse effect on us if we experiencesignificant increase in the attrition rate among employees with specialized skills, which could decrease our operating efficiency and productivity and could lead to adecline in demand for our services.In addition, our ability to serve existing customers and business partners and obtain new business will depend, in large part, on our ability to attract, trainand retain skilled personnel that enable us to keep pace with growing demands for wifi connectivity and mobile applications, evolving industry standards andchanging customer preferences. Our failure to attract, train and retain personnel with the qualifications necessary to fulfill the needs of our existing and futurecustomers or to assimilate new employees successfully could have a material adverse effect on our business, financial condition and results of operations. Ourfailure to retain our key personnel on business development or find suitable replacements of the key personnel upon their departure may lead to shrinking newimplementation projects, which could materially adversely affect our business.4Our business depends substantially on the continuing efforts of our senior executives and other key personnel, and our business may be severely disrupted if welose their services.Our future success heavily depends upon the continued services of our senior executives and other key employees, particularly since we recentlyappointed a new chairman. We are reliant on the services of Mr. Xuesong Song, our chairman, chief executive officer and member of our board of directors. If one ormore of our senior executives or key employees is unable or unwilling to continue in his or her present position, we may not be able to replace such employee easily,or at all, we may incur additional expenses to recruit, train and retain replacement personnel, our business may be severely disrupted, and our financial condition andresults of operations may be materially adversely affected.Our business could suffer if our executives and directors compete against us and our noncompetition agreements with them cannot be enforced.If any of our senior executives or key employees joins a competitor or forms a competing company, we may lose customers, knowhow and keyprofessionals and staff members to them. Also, if any of our business development managers who keep a close relationship with our customers and businesspartners joins a competitor or forms a competing company, we may lose customers, and our revenues may be materially adversely affected. Most of our executiveshave entered, or will soon enter, into employment agreements with us that contain or will contain noncompetition provisions. However, if any dispute arisesbetween our executive officers and us, such noncompetition provisions may not be enforceable, especially in China, where all of these executive officers and keyemployees reside, in light of the uncertainties with China’s legal system. See “Risk Factors — Risks Related to Doing Business in China — Uncertainties withrespect to the PRC legal system could adversely affect us.”Our computer networks may be vulnerable to security risks that could disrupt our services and adversely affect our results of operations.Our computer networks may be vulnerable to unauthorized access, computer hackers, computer viruses and other security problems caused byunauthorized access to, or improper use of, systems by third parties or employees. A hacker who circumvents security measures could misappropriate proprietaryinformation or cause interruptions or malfunctions in operations. Computer attacks or disruptions may jeopardize the security of information stored in andtransmitted through computer systems and mobile devices of our customers. Actual or perceived concerns that our systems may be vulnerable to such attacks ordisruptions may deter customers from using our services. As a result, we may be required to expend significant resources to protect against the threat of thesesecurity breaches or to alleviate problems caused by these breaches, which could adversely affect our results of operations.If we do not continually enhance our solutions and service offerings, we may have difficulty in retaining existing customers and attracting new customers.We believe that our future success will depend, to a significant extent, upon our ability to enhance our existing applications and platform, and to introducenew features to meet the preferences and requirements of our customers in a rapidly developing and evolving market. Unexpected technical, operational, distributionor other problems could delay or prevent the introduction of one or more of these products or services, or any products or services that we may plan to introduce inthe future. Our present or future products may not satisfy the evolving preferences and tastes of our customers, and these solutions and services may not achieveanticipated market acceptance or generate incremental revenue. If we are unable to anticipate or respond adequately to the need for service or productenhancements due to resource, technological or other constraints, our business, financial condition and results of operations could be materially and adverselyaffected.5If we are unable to develop competitive new products and service offerings our future results of operations could be adversely affected.Our future revenue stream depends to a large degree on our ability to utilize our technology in a way that will allow us to offer new types of mobileapplications and services to a broader customer base. We will be required to make investments in research and development in order to continually develop newsoftware applications and related service offerings, enhance our existing platform, mobile applications and related service offerings and achieve market acceptanceof our mobile applications and service offerings. We may incur problems in the future in innovating and introducing new mobile applications and service offerings.Our developmentstage mobile applications may not be successfully completed or, if developed, may not achieve significant customer acceptance. If we are unableto successfully define, develop and introduce competitive new mobile applications, and enhance existing mobile applications, our future results of operations wouldbe adversely affected. The timely availability of new applications and their acceptance by customers are important to our future success. A delay in the developmentof new applications could have a significant impact on its results of operations.Changes in technology could adversely affect our business by increasing our costs, reducing our profit margins and causing a decline in our competitiveness.China’s wireless telecom industry, in which we operate, is characterized by rapidly changing technology, evolving industry standards, frequentintroductions of new services and solutions and enhancements as well as changing customer demands. New solutions and new technologies often render existingsolutions and services obsolete, excessively costly or otherwise unmarketable. As a result, our success depends on our ability to adapt to the latest technologicalprogress, such as the 5G standard and technologies, and to develop or acquire and integrate new technologies into our platform, mobile applications and relatedservices. Advances in technology also require us to commit substantial resources to developing or acquiring and then deploying new technologies for use in ouroperations. We must continuously train personnel in new technologies and in how to integrate existing hardware and software systems with these newtechnologies. We may not be able to adapt quickly to new technologies or commit sufficient resources to compete successfully against existing or new competitorsin bringing to market solutions and services that incorporate these new technologies. We may incur problems in the future in innovating and introducing new mobileapplications and service offerings. Our development of new mobile applications and platform enhancements may not be successfully completed or, if developed,may not achieve significant customer acceptance. If we fail to adapt to changes in technologies and compete successfully against established or new competitors,our business, financial condition and results of operations could be adversely affected.Problems with the quality or performance of our hardware, software or other systems may cause delays in the introduction of new solutions or result in the lossof customers and revenues, which could have a material and adverse effect on our business, financial condition and results of operations.Our hardware and software systems are complex and may contain defects, errors or bugs when first introduced to the market or to a particular customer, oras new versions are released. Because we cannot test for all possible scenarios, our systems may contain errors that are not discovered until after they have beeninstalled or implemented, and we may not be able to timely correct these problems. These defects, errors or bugs could interrupt or delay the completion of projectsor sales to our customers. In addition, our reputation may be damaged and we may fail to acquire new projects from existing customers or new customers. Errors mayoccur when we provide systems integration and maintenance services. Even in cases where we have agreements with our customers that contain provisionsdesigned to limit our exposure to potential claims and liabilities arising from customer problems, these provisions may not effectively protect us against such claimsin all cases and in all jurisdictions. In addition, as a result of business and other considerations, we may undertake to compensate our customers for damages arisingfrom the use of our solutions, even if our liability is limited by these provisions. Moreover, claims and liabilities arising from customer problems could also result inadverse publicity and materially and adversely affect our business, results of operations and financial condition. We currently do not carry any product or serviceliability insurance and any imposition of liability on us may materially and adversely affect our business and increase our costs, resulting in reduced revenues andprofitability.Our products may contain undetected software defects, which could negatively affect our revenues.Our software products are complex and may contain undetected defects. Although we test our products, it is possible that errors may be found or occur inour new or existing products after we have commenced commercial shipment of those products. Defects, whether actual or perceived, could result in adversepublicity, loss of revenues, product returns, a delay in market acceptance of our products, loss of competitive position or claims against us by customers. Any suchproblems could be costly to remedy and could cause interruptions, delays, or cessation of our product sales, which could cause us to lose existing or prospectivecustomers and could negatively affect our results of operations.6We may be subject to infringement, misappropriation and indemnity claims in the future, which may cause us to incur significant expenses, pay substantialdamages and be prevented from providing our services or technologies.Our success depends, in part, on our ability to carry out our business without infringing the intellectual property rights of third parties. Patent andcopyright law covering softwarerelated technologies is evolving rapidly and is subject to a great deal of uncertainty. Our selfdeveloped or licensed technologies,processes or methods may be covered by thirdparty patents or copyrights, either now existing or to be issued in the future. Any potential litigation may cause us toincur significant expenses. Thirdparty claims, if successfully asserted against us may cause us to pay substantial damages, seek licenses from third parties, payongoing royalties, redesign our services or technologies, or prevent us from providing services or technologies subject to these claims. Even if we were to prevail,any litigation would likely be costly and timeconsuming and divert the attention of our management and key personnel from our business operations.Our failure to protect our intellectual property rights may undermine our competitive position, and subject us to costly litigation to protect our intellectualproperty rights.Any misappropriation of our technology or the development of competitive technology could seriously harm our business. We regard a substantial portionof our hardware and software systems as proprietary and rely on statutory copyright, trademark, patent, trade secret laws, customer license agreements, employeeand thirdparty nondisclosure agreements and other methods to protect our proprietary rights. Nevertheless, these resources afford only limited protection and theactions we take to protect our intellectual property rights may not be adequate. In particular, third parties may infringe or misappropriate our proprietarytechnologies or other intellectual property rights, which could have a material adverse effect on our business, financial condition and results of operations. Inaddition, intellectual property rights and confidentiality protection in China may not be as effective as in the United States, and policing unauthorized use ofproprietary technology can be difficult and expensive. Further, litigation may be necessary to enforce our intellectual property rights, protect our trade secrets ordetermine the validity and scope of the proprietary rights of others. The outcome of any such litigation may not be in our favor. Any such litigation may be costlyand may divert management attention, as well as our other resources, away from our business. An adverse determination in any such litigation will impair ourintellectual property rights and may harm our business, prospects and reputation. In addition, we have no insurance coverage against litigation costs and wouldhave to bear all litigation costs in excess of the amount recoverable from other parties. The occurrence of any of the foregoing could have a material adverse effecton our business, financial condition and results of operations. Our solutions incorporate a portion of, and work in conjunction with, thirdparty hardware and software solutions. If these thirdparty hardware or softwaresolutions are not available to us at reasonable costs, or at all, our results of operations could be adversely impacted.Although our hardware and software systems and mobile applications primarily rely on our own core technologies, some elements of our systemsincorporate a small portion of thirdparty hardware and software solutions. If any third party were to discontinue making their intellectual property available to us orour customers on a timely basis, or increase materially the cost of their licensing such intellectual property, or if our systems or applications failed to properlyfunction or interoperate with replacement intellectual property, we may need to incur costs in finding replacement thirdparty solutions and/or redesigning oursystems or applications to replace or function with or on replacement thirdparty proprietary technology. Replacement technology may not be available on termsacceptable to us or at all, and we may be unable to develop alternative solutions or redesign our systems or applications on a timely basis or at a reasonable cost. Ifany of these were to occur, our results of operations could be adversely impacted.7Our ability to sell our products is highly dependent on the quality of our service and support offerings, and our failure to offer high quality service could have amaterial adverse effect on our ability to market and sell our products.Our customers depend upon our customer service and support staff to resolve issues relating to our products. Highquality support services are critical forthe successful marketing and sale of our products. If we fail to provide highquality support on an ongoing basis, our customers may react negatively and we maybe materially and adversely affected in our ability to sell additional products to these customers. This could also damage our reputation and prospects with potentialcustomers. Our failure to maintain highquality support services could have a material and adverse effect on our business, results of operations and financialcondition.Weaknesses in our internal controls over financial reporting or disclosure controls and procedures may have a material adverse effect on our business, theprice of our ordinary shares, operating results and financial condition.We are required to establish and maintain appropriate internal controls over financial reporting and disclosure controls and procedures. Pursuant to Section404 of the SarbanesOxley Act of 2002 and the related rules adopted by the Securities and Exchange Commission, every public company is required to include amanagement report on its internal controls over financial reporting in its transition report, which contains management’s assessment of the effectiveness of thecompany’s internal controls over financial reporting. This requirement first applied to our annual report on Form 20F for the fiscal year ended on September 30,2011. In connection with our assessments of our disclosure controls and procedures and internal controls over financial reporting, management concluded that as ofSeptember 30, 2018, our disclosure controls and procedures and our internal controls over financial reporting were not effective due to lack of U.S. generallyaccepted accounting principles (“U.S. GAAP”) expertise in our current accounting team. Please refer to the discussion under Item 15, “Controls and Procedures” forfurther discussion of our material weakness as of December 31, 2017. Should we be unable to remediate the material weakness promptly and effectively, suchweakness could harm our operating results, result in a material misstatement of our financial statements, cause us to fail to meet our financial reporting obligations orprevent us from providing reliable and accurate financial reports or avoiding or detecting fraud. This, in turn, could result in a loss of investor confidence in theaccuracy and completeness of our financial reports, which could have an adverse effect on the trading price of our ordinary shares. Any litigation or otherproceeding or adverse publicity relating to the material weaknesses could have a material adverse effect on our business and operating results. We have very limited insurance coverage which could expose us to significant costs and business disruption.We do not maintain any insurance coverage for our leased properties. Should any natural catastrophes such as earthquakes, floods, typhoons or any actsof terrorism occur in Beijing, China, where our head office is located and most of our employees are based, or elsewhere in China, we might suffer not onlysignificant property damages, but also loss of revenues due to interruptions in our business operations, which could have a material adverse effect on our business,operating results or financial condition.The insurance industry in China is still at an early stage of development. Insurance companies in China offer limited business insurance products, and donot, to our knowledge, offer business liability insurance. As a result, we do not have any business liability insurance coverage for our operations. Moreover, whilebusiness disruption insurance is available, we have determined that the risks of disruption and cost of the insurance are such that we do not require it at this time.Any business disruption, litigation or natural disaster might result in substantial costs and diversion of resources, particularly if it affects our technology platformswhich we depend on for delivery of our software and services, and could have a material adverse effect on our financial condition and results of operations.We may be liable to our customers for damages caused by unauthorized disclosure of sensitive and confidential information, whether through our employees orotherwise.We are typically required to manage, utilize and store sensitive or confidential customer data in connection with the products and services we provide.Under the terms of our customer contracts, we are required to keep such information strictly confidential. We seek to implement specific measures to protectsensitive and confidential customer data. We require our employees to enter into nondisclosure agreements to limit such employees’ access to, and distribution of,our customers’ sensitive and confidential information and our own trade secrets. We can give no assurance that the steps taken by us in this regard will be adequateto protect our customers’ confidential information. If our customers’ proprietary rights are misappropriated by our employees, in violation of any applicableconfidentiality agreements or otherwise, our customers may consider us liable for that act and seek damages and compensation from us. However, we currently donot have any insurance coverage for mismanagement or misappropriation of such information by our employees. Any litigation with respect to unauthorizeddisclosure of sensitive and confidential information might result in substantial costs and diversion of resources and management attention.8We may face intellectual property infringement claims that could be timeconsuming and costly to defend. If we fail to defend ourselves against such claims, wemay lose significant intellectual property rights and may be unable to continue providing our existing products and services.It is critical that we use and develop our technology and products without infringing upon the intellectual property rights of third parties, includingpatents, copyrights, trade secrets and trademarks. Intellectual property litigation is expensive and timeconsuming and could divert management’s attention from ourbusiness. A successful infringement claim against us, whether with or without merit, could, among others things, require us to pay substantial damages, developnoninfringing technology, or rebrand our name or enter into royalty or license agreements that may not be available on acceptable terms, if at all, and cease making,licensing or using products that have infringed a third party’s intellectual property rights. Protracted litigation could also result in existing or potential customersdeferring or limiting their purchase or use of our products until resolution of such litigation, or could require us to indemnify our customers against infringementclaims in certain instances. Also, we may be unaware of intellectual property registrations or applications relating to our services that may give rise to potentialinfringement claims against us. Parties making infringement claims may be able to obtain an injunction to prevent us from delivering our services or usingtechnology containing the allegedly infringing intellectual property. Any intellectual property litigation could have a material adverse effect on our business, resultsof operations or financial condition. Seasonality and fluctuations in our customers’ spending cycle and other factors can cause our revenues and operating results to vary significantly from quarterto quarter and from year to year.Our revenues and operating results will vary significantly from quarter to quarter and from year to year due to a number of factors, many of which areoutside of our control. Our new lines of business acquired upon the consummation of the asset exchange transaction discussed below see higher customer use andactivity during the Chinese New Year holiday than other times during the year when rail travel is high, which lead to higher revenue during this period as morecustomers would like to place more advertising. Due to these and other factors, our operating results may fluctuate significantly from quarter to quarter and fromyear to year. These fluctuations are likely to continue in the future, and operating results for any period may not be indicative of our future performance in any futureperiod.Our corporate actions are substantially controlled by our principal shareholders, who can cause us to take actions in ways you may not agree with.Mr. Xuesong Song, our chairman, chief executive officer and a member of our board of directors, beneficially owns 19.31% of our outstanding ordinaryshares and 1,000,000 preferred shares, and each preferred share has the right to 399 votes at a meeting of the members of the Company. Our officers and directors asa group beneficially own an aggregate of approximately 33.69% of our outstanding ordinary shares. These shareholders, acting individually or as a group, couldexert control and substantial influence over matters such as electing directors, amending our constitutional documents, and approving acquisitions, mergers or otherbusiness combination transactions. This concentration of ownership and voting power may also discourage, delay or prevent a change in control of our company,which could deprive our shareholders of an opportunity to receive a premium for their shares as part of a sale of our company and might reduce the price of ourshares. Alternatively, our controlling shareholders may cause a merger, consolidation or change of control transaction even if it is opposed by our othershareholders, including those who purchase shares in this offering.9We depend on a small number of customers to derive a significant portion of our revenues. If we were to become dependent again upon a few customers, suchdependency could negatively impact our business, operating results and financial condition.We derived a material portion of our revenues from a small number of customers. In the years ended December 31, 2017 and 2016, our five largestcustomers accounted for 99.8% and 78.5% of our total sales, respectively, and our largest customer Guangdong Zhanshi Media Advertising Co., Ltd. accounted forapproximately 80.8% of our total sales during for the fiscal year ended December 31, 2017. As our customer base may change from yeartoyear, during such yearsthat the customer base is highly concentrated, the fluctuation of our sales to any of such major customers could have a material adverse effect on our business,operating results and financial condition. Moreover, our high customer base concentration may also adversely affect our ability to negotiate contract prices withthese customers, which may in turn materially and adversely affect our results of operations.Our historical outstanding accounts receivable have been relatively high. Inability to collect our accounts receivable on a timely basis, if at all, couldmaterially and adversely affect our financial condition, liquidity and results of operations.Historically, our outstanding accounts receivable have been relatively high. As of December 31, 2017 and 2016, our outstanding accounts receivable beforeimpairment were $10.4 million and $2.10 million, respectively. Although we conduct credit evaluations of our customers, we generally do not require collateral orother security from our customers. In addition, we have had a relatively high customer concentration. The outstanding accounts receivable balance for our largestcustomer was 45.3% and 38.5% of our total accounts receivable balance as of December 31, 2017 and 2016, respectively. As a result, an extended delay or default inpayment relating to a significant account would likely have a material and adverse effect on the aging schedule and turnover days of our accounts receivable. Ourinability to collect our accounts receivable on a timely basis, if at all, could materially and adversely affect our financial condition, liquidity and results of operations.Risks Related to Doing Business in ChinaAdverse changes in political and economic policies of the PRC government could have a material adverse effect on the overall economic growth of China,which could reduce the demand for our services and materially and adversely affect our competitive position.Substantially all of our business operations are conducted in China. Accordingly, our business, results of operations, financial condition and prospects aresubject to a significant degree to economic, political and legal developments in China. Although the Chinese economy is no longer a planned economy, the PRCgovernment continues to exercise significant control over China’s economic growth through direct allocation of resources, monetary and tax policies, and a host ofother government policies such as those that encourage or restrict investment in certain industries by foreign investors, control the exchange between RMB andforeign currencies, and regulate the growth of the general or specific market. These government involvements have been instrumental in China’s significant growthin the past 30 years. The reorganization of the telecommunications industry encouraged by the PRC government has directly affected our industry and our growthprospect. In response to the recent global and Chinese economic downturn, the PRC government has adopted policy measures aimed at stimulating the economicgrowth in China. If the PRC government’s current or future policies fail to help the Chinese economy achieve further growth or if any aspect of the PRCgovernment’s policies limits the growth of the telecommunications industry in China or our industry or otherwise negatively affects our business, our growth rate orstrategy, our results of operations could be adversely affected as a result. Our business benefits from certain government tax incentives. Expiration, reduction or discontinuation of, or changes to, these incentives will increase our taxburden and reduce our net income.Under the PRC Enterprise Income Tax Law passed in 2007 and the implementing rules, both of which became effective on January 1, 2008, or the New EITLaw, a unified enterprise income tax rate of 25% and unified tax deduction standard is applied equally to both domesticinvested enterprises and foreigninvestedenterprises, or FIEs. Enterprises established prior to March 16, 2007 eligible for preferential tax treatment in accordance with the then tax laws and administrativeregulations shall gradually become subject to the New EIT Law rate over a fiveyear transition period starting from the date of effectiveness of the New EIT Law.However, certain qualifying hightechnology enterprises may still benefit from a preferential tax rate of 15% if they own their core intellectual properties and they areenterprises in certain Statesupported hightech industries to be later specified by the government. As a result, if our PRC subsidiaries qualify as “hightechnologyenterprises,” they will continue to benefit from the preferential tax rate of 15%, subject to transitional rules implemented from January 1, 2008. Our subsidiary, BeijingZhong Chuan Shi Xun Technology Limited, is qualified as a “hightechnology enterprise” until the end of the November 2018, and therefore it had benefited fromthe preferential tax rate of 15%, subject to transitional rules implemented on January 1, 2008. Although we intend to apply for a renewal of this qualification, if BeijingZhong Chuan Shi Xun ceases to qualify as a “hightechnology enterprise”, or the tax authorities change their position on our preferential tax treatments in thefuture, our future tax liabilities may materially increase, which could materially and adversely affect our financial condition and results of operations.10If we were deemed a “resident enterprise” by PRC tax authorities, we could be subject to tax on our global income at the rate of 25% under the New EIT Lawand our nonPRC shareholders could be subject to certain PRC taxes.Under the New EIT Law and the implementing rules, both of which became effective January 1, 2008, an enterprise established outside of the PRC with “defacto management bodies” within the PRC may be considered a PRC “resident enterprise” and will be subject to the enterprise income tax at the rate of 25% on itsglobal income as well as PRC enterprise income tax reporting obligations. The implementing rules of the New EIT Law define “de facto management” as “substantialand overall management and control over the production and operations, personnel, accounting, and properties” of the enterprise. However, as of the date of thistransition report, no final interpretations on the implementation of the “resident enterprise” designation are available. Moreover, any such designation, when madeby PRC tax authorities, will be determined based on the facts and circumstances of individual cases. Therefore, if we were to be considered a “resident enterprise”by the PRC tax authorities, our global income would be taxable under the New EIT Law at the rate of 25% and, to the extent we were to generate a substantial amountof income outside of PRC in the future, we would be subject to additional taxes. In addition, the dividends we pay to our nonPRC enterprise shareholders and gainsderived by such shareholders or ADS or ordinary share holders from the transfer of our shares or ADSs may also be subject to PRC withholding tax at the rate up to10%, if such income were regarded as Chinasourced income.Our holding company structure may limit the payment of dividends.We have no direct business operations, other than our ownership of our subsidiaries. While we have no current intention of paying dividends, should wedecide in the future to do so, as a holding company, our ability to pay dividends and meet other obligations depends upon the receipt of dividends or otherpayments from our operating subsidiaries and other holdings and investments. Current PRC regulations permit our PRC subsidiaries to pay dividends to us only outof their accumulated profits, if any, determined in accordance with Chinese accounting standards and regulations. In addition, each of our subsidiaries in China isrequired to set aside at least 10% of its aftertax profits each year, if any, to fund a statutory reserve until such reserve reaches 50% of its registered capital. Thesereserves are not distributable as cash dividends. Furthermore, if our subsidiaries in China incur debt on their own behalf in the future, the instruments governing thedebt may restrict their ability to pay dividends or make other payments to us. As a result, there may be limitations on the ability of our PRC subsidiaries to paydividends or make other investments or acquisitions that could be beneficial to our business or otherwise fund and conduct our business.In addition, under the New EIT Law and the implementing rules that became effective on January 1, 2008, dividends generated from the business of our PRCsubsidiaries after January 1, 2008 and payable to us may be subject to a withholding tax rate of 10% if the PRC tax authorities subsequently determine that we are anonresident enterprise, unless there is a tax treaty with China that provides for a different withholding arrangement.Uncertainties with respect to the PRC legal system could adversely affect us.We conduct all of our business through our subsidiaries in China. Our operations in China are governed by PRC laws and regulations. Our PRCsubsidiaries are generally subject to laws and regulations applicable to foreign investments in China and, in particular, laws and regulations applicable to whollyforeignowned enterprises. The PRC legal system is based on statutes. Prior court decisions may be cited for reference but have limited precedential value.11Since 1979, PRC legislation and regulations have significantly enhanced the protections afforded to various forms of foreign investments in China.However, China has not developed a fully integrated legal system and recently enacted laws and regulations may not sufficiently cover all aspects of economicactivities in China. In particular, because these laws and regulations are relatively new, and because of the limited volume of published decisions and theirnonbinding nature, the interpretation and enforcement of these laws and regulations involve uncertainties. In addition, the PRC legal system is based in part ongovernment policies and internal rules (some of which are not published on a timely basis or at all) that may have a retroactive effect. As a result, we may not beaware of our violation of these policies and rules until some time after the violation. In addition, any litigation in China may be protracted and result in substantialcosts and diversion of resources and management attention.PRC regulation of loans and direct investment by offshore holding companies to PRC entities may delay or prevent us from using the proceeds of our May2010 public offering to make loans or additional capital contributions to our PRC operating subsidiaries, which could materially and adversely affect ourliquidity and our ability to fund and expand our business.In utilizing the proceeds of our May 2010 public offering as an offshore holding company of our PRC operating subsidiaries, we may make loans to our PRCsubsidiaries, or we may make additional capital contributions to our PRC subsidiaries. Any loans to our PRC subsidiaries are subject to PRC regulations. Forexample, loans by us to our subsidiaries in China, which are FIEs, to finance their activities cannot exceed statutory limits and must be registered with the StateAdministration of Foreign Exchange, or SAFE. On August 29, 2008, SAFE promulgated Circular 142, a notice regulating the conversion by a foreigninvestedcompany of foreign currency into RMB by restricting how the converted RMB may be used. The notice requires that RMB converted from the foreign currencydenominated capital of a foreigninvested company may only be used for purposes within the business scope approved by the applicable governmental authorityand may not be used for equity investments within the PRC unless specifically provided for otherwise. The foreign currencydenominated capital shall be verified byan accounting firm before converting into RMB. In addition, SAFE strengthened its oversight over the flow and use of RMB funds converted from the foreigncurrencydenominated capital of a foreigninvested company. To convert such capital into RMB, the foreigninvested company must report the use of such RMB tothe bank, and the RMB must be used to the reported purposes. According to Circular 142, change of the use of such RMB without approval is prohibited. Inaddition, such RMB may not be used to repay RMB loans if the proceeds of such loans have not yet been used. Violations of Circular 142 may result in severepenalties, including substantial fines as set forth in the Foreign Exchange Administration Rules.We may also decide to finance our subsidiaries by means of capital contributions. These capital contributions may need approval from the PRC Ministry ofCommerce, or MOFCOM, or its local counterpart. We may not be able to obtain these government approvals on a timely basis, if at all, with respect to future capitalcontributions by us to our PRC subsidiaries. If we fail to receive such approvals in such cases when approval is required, our ability to use the proceeds of our May2010 public offering and to capitalize our PRC operations may be negatively affected, which could adversely affect our liquidity and our ability to fund and expandour business.Governmental control of currency conversion may affect the value of your investment.The PRC government imposes controls on the convertibility of the RMB into foreign currencies and, in certain cases, the remittance of currency out ofChina. We receive substantially all of our revenues in RMB. Under our current corporate structure, our income is primarily derived from dividend payments from ourPRC subsidiaries. Shortages in the availability of foreign currency may restrict the ability of our PRC subsidiaries to remit sufficient foreign currency to paydividends or other payments to us, or otherwise satisfy their foreign currency denominated obligations. Under existing PRC foreign exchange regulations, paymentsof current account items, including profit distributions, interest payments and expenditures from traderelated transactions, can be made in foreign currencieswithout prior approval from SAFE by complying with certain procedural requirements. However, approval from appropriate government authorities is required whereRMB is to be converted into foreign currency and remitted out of China to pay capital expenses such as the repayment of loans denominated in foreign currencies.The PRC government may also at its discretion restrict access in the future to foreign currencies for current account transactions. If the foreign exchange controlsystem prevents us from obtaining sufficient foreign currency to satisfy our currency demands, we may not be able to pay dividends in foreign currencies to ourshareholders, including holders of our ADSs or ordinary shares.12Fluctuation in the value of the RMB may have a material adverse effect on the value of your investment.The value of the RMB against the U.S. dollar and other currencies may fluctuate and is affected by, among other things, changes in political and economicconditions. On July 21, 2005, the PRC government changed its decadeold policy of pegging the value of the RMB to the U.S. dollar. Under the new policy, the RMBis permitted to fluctuate within a narrow and managed band against a basket of certain foreign currencies. This change in policy has resulted in an approximate26.8% appreciation of the RMB against the U.S. dollar between July 21, 2005 and September 30, 2015. Provisions on Administration of Foreign Exchange, asamended in August 2008, further changed China’s exchange regime to a managed floating exchange rate regime based on market supply and demand. Since reachinga high against the U.S. dollar in July 2008, however, the RMB has traded within a narrow band against the U.S. dollar, remaining within 1% of its July 2008 high butnever exceeding it. As a consequence, the RMB has fluctuated sharply since July 2008 against other freelytraded currencies, in tandem with the U.S. dollar. InAugust 2015, the PRC Government devalued its currency by approximately 3%, representing the largest yuan depreciation for 20 years. Concerns remain thatChina’s slowing economy, and in particular its exports, will need a stimulus that can only come from further cuts in the exchange rate.It is difficult to predict how long the current situation may continue and when and how it may change again as the People’s Bank of China may regularlyintervene in the foreign exchange market to achieve economic policy goals. Substantially all of our revenues and costs are denominated in the RMB, and asignificant portion of our financial assets are also denominated in RMB. We principally rely on dividends and other distributions paid to us by our subsidiaries inChina. Any significant revaluation of the RMB may materially and adversely affect our cash flows, revenues, earnings and financial position, and the value of, andany dividends payable on, our ADSs or ordinary shares in U.S. dollars. Any fluctuations of the exchange rate between the RMB and the U.S. dollar could also resultin foreign currency translation losses for financial reporting purposes.PRC laws and regulations governing our businesses. If we are found to be in violation of such PRC laws and regulations, we could be subject to sanctions. Inaddition, changes in such PRC laws and regulations may materially and adversely affect our business.There are substantial uncertainties regarding the interpretation and application of PRC laws and regulations, including, but not limited to, the laws andregulations governing our business. These laws and regulations are relatively new and may be subject to change, and their official interpretation and enforcementmay involve substantial uncertainty. The effectiveness of newly enacted laws, regulations or amendments may be delayed, resulting in detrimental reliance byforeign investors. New laws and regulations that affect existing and proposed future businesses may also be applied retroactively.The PRC government has broad discretion in dealing with violations of laws and regulations, including levying fines, revoking business and other licensesand requiring actions necessary for compliance. In particular, licenses and permits issued or granted to us by relevant governmental bodies may be revoked at a latertime by higher regulatory bodies. We cannot predict the effect of the interpretation of existing or new PRC laws or regulations on our businesses. We cannot assureyou that our current ownership and operating structure would not be found in violation of any current or future PRC laws or regulations. As a result, we may besubject to sanctions, including fines, and could be required to restructure our operations or cease to provide certain services. In addition, any litigation in China maybe protracted and result in substantial costs and diversion of resources and management attention. Any of these or similar actions could significantly disrupt ourbusiness operations or restrict us from conducting a substantial portion of our business operations, which could materially and adversely affect our business,financial condition and results of operations.13If we were required to obtain the prior approval of the China Securities Regulatory Commission, or CSRC, of the listing and trading of our ADSs on theNASDAQ Capital Market, we may face regulatory actions or other sanctions from the CSRC or other PRC regulatory agencies.On August 8, 2006, six PRC regulatory agencies, including the Ministry of Commerce, the State Assets Supervision and Administration Commission, theState Administration for Taxation, the State Administration for Industry and Commerce, the CSRC and the SAFE, jointly issued the Regulations on Mergers andAcquisitions of Domestic Enterprises by Foreign Investors, which became effective on September 8, 2006 (the “New M&A Rules”). This regulation, among otherthings, includes provisions that purport to require that an offshore special purpose vehicle formed for the purposes of overseas listing of equity interests in PRCcompanies and controlled directly or indirectly by PRC companies or individuals obtain the approval of the CSRC prior to the listing and trading of such specialpurpose vehicle’s securities on an overseas stock exchange. On September 21, 2006, the CSRC published on its official website procedures regarding its approval ofoverseas listings by special purpose vehicles. The CSRC approval procedures require the filing of a number of documents with the CSRC and it would take severalmonths to complete the approval process, if practicable at all. The application of this new PRC regulation remains unclear with no consensus currently existingamong leading PRC law firms regarding the scope of the applicability of the CSRC approval requirement. Prior to our May 2010 initial public offering, our PRC counsel has advised us that, based on its understanding of the current PRC laws and regulations aswell as the procedures announced on September 21, 2006: (i) Softech was directly incorporated by Topsky as a foreign investment enterprise under PRC law;therefore, there was no acquisition of the equity of a “PRC domestic company” as defined under the New M&A Rules; and (ii) the contractual arrangementsbetween Kingtone Information and Softech were not clearly defined and considered as the transaction which shall be applied to the New M&A Rules. Therefore, wedid not seek prior CSRC approval for our initial public offering.However, if the CSRC required that we obtain its approval prior to the completion of our initial public offering and the listing of our ADSs on the NASDAQCapital Market, we may face regulatory actions or other sanctions from the CSRC or other PRC regulatory agencies. These regulatory agencies may impose fines andpenalties on our operations in the PRC, limit our operating privileges in the PRC, delay or restrict the repatriation of the proceeds from our initial public offering intothe PRC, or take other actions that could have a material adverse effect on our business, financial condition, results of operations, reputation and prospects, as wellas the trading price of our shares.Also, if the CSRC requires that we obtain its approval, we may be unable to obtain a waiver of the CSRC approval requirements if and when procedures areestablished to obtain such a waiver. Any uncertainties and/or negative publicity regarding this CSRC approval requirement could have a material adverse effect onthe trading price of our shares.PRC regulations relating to the establishment of offshore special purpose companies by PRC residents may subject our PRC resident shareholders to penaltiesand limit our ability to inject capital into our PRC subsidiaries, limit our PRC subsidiaries’ ability to distribute profits to us, or otherwise adversely affect us.On October 21, 2005, the SAFE issued the Notice on Issues Relating to the Administration of Foreign Exchange in Fundraising and Reverse InvestmentActivities of Domestic Residents Conducted via Offshore Special Purpose Companies, or Notice 75, which became effective as of November 1, 2005. According toNotice 75, prior registration with the local SAFE branch is required for PRC residents to establish or to control an offshore company for the purposes of financingsuch offshore company with assets or equity interests in an onshore enterprise located in the PRC, or an offshore special purpose company. An amendment toregistration or filing with the local SAFE branch by such PRC resident is also required for the injection of equity interests or assets of an onshore enterprise in theoffshore special purpose company or overseas funds raised by such offshore company, or any other material change involving a change in the capital of theoffshore special purpose company. Moreover, Notice 75 applies retroactively. As a result, PRC residents who have established or acquired control of offshorespecial purpose companies that have made onshore investments in the PRC in the past are required to have completed the relevant registration procedures with thelocal SAFE branch by March 31, 2006. To further clarify the implementation of Notice 75, the SAFE issued Circular 106 on May 29, 2007. Under Circular 106, PRCsubsidiaries of an offshore special purpose company are required to coordinate and supervise the filing of SAFE registrations by the offshore holding company’sshareholders or beneficial owners who are PRC residents in a timely manner.14Some of our current shareholders and/or beneficial owners may fall within the ambit of the SAFE notice and be required to register with the local SAFEbranch as required under the SAFE notice. If so required, and if such shareholders and/or beneficial owners fail to timely register their SAFE registrations pursuantto the SAFE notice, or if future shareholders and/or beneficial owners of our company who are PRC residents fail to comply with the registration procedures setforth in the SAFE notice, this may subject such shareholders, beneficial owners and/or our PRC subsidiaries to fines and legal sanctions and may also limit ourability to contribute additional capital into our PRC subsidiaries, limit our PRC subsidiaries’ ability to distribute dividends to our company, or otherwise adverselyaffect our business.Risks Associated with our ADSs and Ordinary SharesOur securities are not currently traded on any United States public markets and you may not be able to resell your securities for some time.There is currently no public market for our ordinary shares or American Depository Shares (“ADSs”) in the United States or in any other jurisdiction. OurADSs were voluntarily delisted from the NASDAQ Capital Market on September 19, 2018. We have applied to NASDAQ for the listing of our ordinary shares on theNASDAQ Capital Market and received an approval for listing of Ordinary Shares on August 6, 2018, and as of the date of this transition report, that application andapproval are currently under review. We cannot assume that our ordinary shares will be accepted for listing on the NASDAQ Capital Market, or if listed, that wewould continue to meet the applicable minimum listing requriements. You may not be able to sell your ordinary shares quickly or at all if we are unable to gain listingon a public market in the United States.The market price of our ADSs has historically been highly volatile, and you may not be able to resell our ordinary shares at or above your initial purchaseprice.There may be a limited public market for our ordinary shares and, as discussed above, our ADSs are no longer listed on any public market in the UnitedStates or any other jurisdiction. We cannot assure you that there will be an active trading market for our ordinary shares in the future. If our ordinary shares areaccepted for listing on a public market, you may not be able to sell your ordinary shares quickly or at the market price if trading in our ordinary shares is not active. The trading price of our ADSs and ordinary shares may be volatile. The price of our ADSs and ordinary shares could be subject to wide fluctuations inresponse to a variety of factors, including the following:1.Introduction of new products, services or technologies offered by us or our competitors;2.Failure to meet or exceed revenue and financial projections we provide to the public;3.Actual or anticipated variations in quarterly operating results;4.Failure to meet or exceed the estimates and projections of the investment community;5.General market conditions and overall fluctuations in United States equity markets;6.Announcements of significant acquisitions, strategic partnerships, joint ventures or capital commitments by us or our competitors;7.Disputes or other developments relating to proprietary rights, including patents, litigation matters and our ability to obtain patent protection for ourtechnologies;8.Additions or departures of key management personnel;9.Issuances of debt or equity securities;10.Significant lawsuits, including patent or shareholder litigation;11.Changes in the market valuations of similar companies;12.Sales of additional ordinary shares or other securities by us or our shareholders in the future;13.Trading volume of our ordinary shares;14.Fluctuations in the exchange rate between the U.S. dollar and Renminbi;15.Negative market perception and media coverage of our company or other companies in the same or similar industry with us; and16.Other events or factors, many of which are beyond our control.15In addition, the stock market in general, and the NASDAQ Capital Market and software products and services companies in particular, have experiencedextreme price and volume fluctuations that have often been unrelated or disproportionate to the operating performance of these companies. Broad market andindustry factors may negatively affect the market price of our ordinary shares, regardless of our actual operating performance. Our ADSs and ordinary shares may be subject to the SEC’s penny stock rules which may make it difficult for brokerdealers to complete customer transactionsand trading activity in our securities.Our ADSs and ordinary shares may be deemed to be “penny stock” as that term is defined under the Securities Exchange Act of 1934, as amended. Pennystocks generally are equity securities with a price of less than $5.00 (other than securities registered on certain national securities exchanges or quoted on theNASDAQ system, provided that current price and volume information with respect to transactions in such securities is provided by the exchange or system). Pennystock rules impose additional sales practice requirements on brokerdealers who sell to persons other than established customers and “accredited investors.” Theterm “accredited investor” refers generally to institutions with assets in excess of $5,000,000 or individuals with a net worth in excess of $1,000,000 or annual incomeexceeding $200,000 or $300,000 jointly with their spouse in each of the prior two years.The penny stock rules require a brokerdealer, prior to a transaction in a penny stock not otherwise exempt from the rules, to deliver a standardized riskdisclosure document in a form prepared by the SEC, which provides information about penny stocks and the nature and level of risks in the penny stockmarket. Moreover, brokerdealers are required to determine whether an investment in a penny stock is a suitable investment for a prospective investor. A brokerdealer must receive a written agreement to the transaction from the investor setting forth the identity and quantity of the penny stock to be purchased. Theserequirements may make it more difficult for brokerdealers to effectuate customer transactions and trading activity in our securities. As a result, the market price ofour ADSs and ordinary shares may be depressed, and you may find it more difficult to sell our ADSs or ordinary shares.Sales of a substantial number of ordinary shares or ADSs in the public market by our existing shareholders could cause the price of our ADSs to fall.Sales of a substantial number of our ordinary shares or ADSs in the public market or the perception that these sales might occur, could depress the marketprice of our ADSs and could impair our ability to raise capital through the sale of additional equity securities. We are unable to predict the effect that sales may haveon the prevailing market price of our ADSs.All of our existing shareholders prior to our May 2010 offering were subject to lockup agreements with the underwriters of the offering that restricted theshareholders’ ability to transfer ordinary shares or ADSs until expiration of the lockup period in November 2010. The lockup agreements limited the number ofordinary shares or ADSs that may be sold immediately following the public offering. Subject to certain limitations, approximately 1,000,000 of our total outstandingshares are now eligible for sale. Sales of ordinary shares by these shareholders could have a material adverse effect on the trading price of our ADSs.Future sales and issuances of our ordinary shares, or rights to purchase our ordinary shares, including pursuant to our 2010 Omnibus Incentive Plan, couldresult in additional dilution of the percentage ownership of our shareholders and could cause the price of our ordinary shares to fall.We expect that significant additional capital will be needed in the future to continue our planned operations. To the extent we raise additional capital byissuing equity securities, our shareholders may experience substantial dilution. We may sell ordinary shares, convertible securities or other equity securities in oneor more transactions at prices and in a manner we determine from time to time. If we sell ordinary shares, convertible securities or other equity securities in more thanone transaction, investors may be materially diluted by subsequent sales. Such sales may also result in material dilution to our existing shareholders, and newinvestors could gain rights superior to our existing shareholders.16We do not intend to pay dividends on our ordinary shares, so any returns will be limited to the value of our ADSs and ordinary shares.We have never declared or paid any cash dividend on our ordinary shares. We currently anticipate that we will retain future earnings for the development,operation and expansion of our business and do not anticipate declaring or paying any cash dividends for the foreseeable future. Any return shareholders willtherefore be limited to the value of their ADSs or ordinary shares.As the rights of shareholders under British Virgin Islands law differ from those under U.S. law, you may have fewer protections as a shareholder.Our corporate affairs will be governed by our memorandum of association and articles of association, the BVI Business Companies Act, 2004, or the BVIAct, of the British Virgin Islands and the common law of the British Virgin Islands. The rights of shareholders to take legal action against our directors, actions byminority shareholders and the fiduciary responsibilities of our directors under British Virgin Islands law are to a large extent governed by the BVI Act and thecommon law of the British Virgin Islands. The common law of the British Virgin Islands is derived in part from comparatively limited judicial precedent in the BritishVirgin Islands as well as from English common law, which has persuasive, but not binding, authority on a court in the British Virgin Islands. The rights of ourshareholders and the fiduciary responsibilities of our directors under British Virgin Islands law are not as clearly established as they would be under statutes orjudicial precedents in some jurisdictions in the United States. In particular, the British Virgin Islands has a less developed body of securities laws as compared to theUnited States, and some states (such as Delaware) have more fully developed and judicially interpreted bodies of corporate law.As a result of all of the above, holders of our ADSs and ordinary shares may have more difficulty in protecting their interests through actions against ourmanagement, directors or major shareholders than they would as shareholders of a U.S. company.British Virgin Islands companies may not be able to initiate shareholder derivative actions, thereby depriving shareholders of the ability to protect theirinterests.British Virgin Islands companies may not have standing to initiate a shareholder derivative action in a federal court of the United States. The circumstancesin which any such action may be brought, and the procedures and defenses that may be available in respect to any such action, may result in the rights ofshareholders of a British Virgin Islands company being more limited than those of shareholders of a company organized in the United States. Accordingly,shareholders may have fewer alternatives available to them if they believe that corporate wrongdoing has occurred. The British Virgin Islands courts are alsounlikely to recognize or enforce against us judgments of courts in the United States based on certain liability provisions of U.S. securities law; and to imposeliabilities against us, in original actions brought in the British Virgin Islands, based on certain liability provisions of U.S. securities laws that are penal in nature.There is no statutory recognition in the British Virgin Islands of judgments obtained in the United States, although the courts of the British Virgin Islands willgenerally recognize and enforce the nonpenal judgment of a foreign court of competent jurisdiction without retrial on the merits.The laws of the British Virgin Islands provide little protection for minority shareholders, so minority shareholders will have little or no recourse if theshareholders are dissatisfied with the conduct of our affairs.Under the law of the British Virgin Islands, there is little statutory law for the protection of minority shareholders other than the provisions of the BVI Actdealing with shareholder remedies. The principal protection under statutory law is that shareholders may bring an action to enforce the constituent documents ofthe corporation, our memorandum of association and articles of association. Shareholders are entitled to have the affairs of the company conducted in accordancewith the general law and the memorandum of association and articles of association.17There are common law rights for the protection of shareholders that may be invoked, largely dependent on English company law, since the common law ofthe British Virgin Islands is limited. Under the general rule pursuant to English company law known as the rule in Foss v. Harbottle, a court will generally refuse tointerfere with the management of a company at the insistence of a minority of its shareholders who express dissatisfaction with the conduct of the company’s affairsby the majority or the board of directors. However, every shareholder is entitled to have the affairs of the company conducted properly according to law and thecompany’s constituent documents. As such, if those who control the company have persistently disregarded the requirements of company law or the provisions ofthe company’s memorandum of association and articles of association, then the courts will grant relief. Generally, the areas in which the courts will intervene are thefollowing: (1) an act complained of which is outside the scope of the authorized business or is illegal or not capable of ratification by the majority; (2) acts thatconstitute fraud on the minority where the wrongdoers control the company; (3) acts that infringe on the personal rights of the shareholders, such as the right tovote; and (4) where the company has not complied with provisions requiring approval of a majority of shareholders, which are more limited than the rights affordedminority shareholders under the laws of many states in the United States.Antitakeover provisions in our memorandum of association and articles of association and our right to issue preference shares could make a thirdpartyacquisition of us difficult.Some provisions of our memorandum of association and articles of association may discourage, delay or prevent a change in control of our company ormanagement that shareholders may consider favorable, including provisions that authorize our board of directors to issue preference shares in one or more seriesand to designate the price, rights, preferences, privileges and restrictions of such preference shares.If you hold our ADSs, you may not have the same voting rights as the holders of our ordinary shares and must act through the depositary to exercise your rights.Holders of our ADSs will not be able to exercise voting rights attaching to the shares evidenced by our ADSs on an individual basis. Holders of our ADSswill appoint the depositary or its nominee as their representative to exercise the voting rights attaching to the shares represented by the ADSs. You may not receivevoting materials in time to instruct the depositary to vote, and it is possible that you, or persons who hold their ADSs through brokers, dealers or other third parties,will not have the opportunity to exercise a right to vote. Upon our written request, the depositary will mail to you a shareholder meeting notice which contains,among other things, a statement as to the manner in which your voting instructions may be given, including an express indication that such instructions may begiven or deemed given to the depositary to give a discretionary proxy to a person designated by us if no instructions are received by the depositary from you on orbefore the response date established by the depositary. However, no voting instruction shall be deemed given and no such discretionary proxy shall be given withrespect to any matter as to which we inform the depositary that (i) we do not wish such proxy given, (ii) substantial opposition exists, or (iii) such matter materiallyand adversely affects the rights of shareholders. We will make all reasonable efforts to cause the depositary to extend voting rights to you in a timely manner, butyou may not receive the voting materials in time to ensure that you can instruct the depositary to vote your ADSs. Furthermore, the depositary and its agents willnot be responsible for any failure to carry out any instructions to vote, for the manner in which any vote is cast or for the effect of any such vote. As a result, youmay not be able to exercise your right to vote and you may lack recourse if your ADSs are not voted as you requested. In addition, in your capacity as an ADSholder, you will not be able to call a shareholders’ meeting.You may not be able to participate in rights offerings and may experience dilution of your holdings as a result.We may from time to time distribute rights to our shareholders, including rights to acquire our securities. However, we may not, and under the depositagreement for the ADSs, the depositary will not, offer those rights to ADS holders unless both the rights and the underlying securities to be distributed to ADSholders are registered under the Securities Act, or the distribution of them to ADS holders is exempted from registration under the Securities Act with respect to allholders of ADSs. We are under no obligation to file a registration statement with respect to any such rights or underlying securities or to endeavor to cause such aregistration statement to be declared effective. In addition, we may not be able to rely on an exemption from registration under the Securities Act to distribute suchrights and securities. Accordingly, holders of our ADSs may be unable to participate in our rights offerings and may experience dilution in their holdings as a result.You may be subject to limitations on transfer of your ADSs.Your ADSs are transferable on the books of the depositary. However, the depositary may close its transfer books at any time or from time to time when itdeems expedient in connection with the performance of its duties. In addition, the depositary may refuse to deliver, transfer or register transfers of ADSs generallywhen our books or the books of the depositary are closed, or at any time if we or the depositary deem it advisable to do so because of any requirement of law or ofany government or governmental body, or under any provision of the deposit agreement, or for any other reason.18We may be a passive foreign investment company, of PFIC, which could lead to additional taxes for U.S. holders of our ADSs or ordinary shares.We do not expect to be, for U.S. federal income tax purposes, a passive foreign investment company, or a PFIC, which is a foreign company for which, inany given taxable year, either at least 75% of its gross income is passive income, or investment income in general, or at least 50% of its assets produce or are held toproduce passive income, for the current taxable year, and we expect to operate in such a manner so as not to become a PFIC for any future taxable year. However,because the determination of PFIC status for any taxable year cannot be made until after the close of such year and requires extensive factual investigation,including ascertaining the fair market value of our assets on a quarterly basis and determining whether each item of gross income that we earn is passive income, wecannot assure you that we will not become a PFIC for the current taxable year or any future taxable year. If we are or become a PFIC, a U.S. holder of our ADSs orordinary shares could be subject to additional U.S. federal income taxes on gain recognized with respect to the ADSs or ordinary shares and on certain distributions,plus an interest charge on certain taxes treated as having been deferred under the PFIC rules. Noncorporate U.S. holders will not be eligible for reduced rates oftaxation on any dividends received from us if we are a PFIC in the taxable year in which such dividends are paid or in the preceding taxable year.If our ordinary shares are listed on the NASDAQ Capital Market and the trading price of our ordinary shares fails to comply with the continued listingrequirements of the NASDAQ Capital Market, we would face possible delisting, which would result in a limited public market for our ordinary shares andmake obtaining future debt or equity financing more difficult for us.Companies listed on NASDAQ are subject to delisting for, among other things, failure to maintain a minimum closing bid price of $1.00 per share for 30consecutive business days. On December 19, 2011, we received a letter from NASDAQ indicating that for the last 30 consecutive business days, the closing bidprice of our ADSs fell below the minimum $1.00 per share requirement pursuant to NASDAQ Listing Rule 5550(a)(2) for continued listing on the NASDAQ CapitalMarket. We regained compliance with the minimum bid price requirement for continued listing set forth in NASDAQ Listing Rule 5550(a)(2), as its ADS with itsunderlying ordinary share has achieved a closing bid price of $1.00 or greater for the 10 consecutive business days from November 6 to November 23, 2012 byimplementing a 1for10 combination, or reverse split of the ordinary shares effective November 6, 2012. When listed, we cannot be sure that the price of our ordinaryshares will comply with this requirement for continued listing on the NASDAQ Capital Market in the future. If we were not able to do so, our ordinary shares wouldbe subject to delisting and would likely trade on the overthecounter market. If our ordinary shares were to trade on the overthecounter market, selling ourordinary shares could be more difficult because smaller quantities of shares would likely be bought and sold, transactions could be delayed, and security analysts’coverage of us may be reduced. In addition, brokerdealers have certain regulatory burdens imposed upon them, which may discourage brokerdealers from effectingtransactions in our ordinary shares, further limiting the liquidity of our ordinary shares. As a result, the market price of our ordinary may be depressed, and you mayfind it more difficult to sell our ordinary shares. Such delisting from the NASDAQ Capital Market and continued or further declines in our share price could alsogreatly impair our ability to raise additional necessary capital through equity or debt financing.ITEM 4. INFORMATION ON THE COMPANY.A . HISTORY AND DEVELOPMENT OF THE COMPANY.OverviewWe are a holding company and conduct our operations through our whollyowned subsidiary named LK Technology Ltd., a British Virgin Islands limitedliability company (“LK Technology”), and its whollyowned subsidiaries, MMB Limited and Mobile Media (China) Limited and their respective subsidiaries, whichhold the rights to deploy WiFi systems on about 700 trains in China, including 290 trains in which WiFi systems have already been installed and are in operation. InMay 2010, we consummated an initial public offering of our American Depository Shares, or ADSs, for gross proceeds of $16 million, and our ADSs were listed onthe NASDAQ Capital Market under the ticker symbol “KONE”. Our ordinary shares are not currently listed on any trading market. Our American Depository Shares(“ADSs”) were voluntarily delisted from the NASDAQ Capital Market on September 19, 2018. We have applied to NASDAQ for the listing of our ordinary shares onthe NASDAQ Capital Market and received an approval for listing of Ordinary Shares on August 6, 2018, and as of the date of this transition report, that applicationand approval are currently under review.19On August 17, 2018, we consummated an asset exchange transaction, pursuant to which we exchanged all issued and outstanding capital stock in TopskyInfoTech Holdings Pte Ltd., the parent of Softech, for the issued and outstanding capital stock of LK Technology (the “Asset Exchange”). In connection with theAsset Exchange, we changed our name on August 20, 2018, and on September 20, 2018, issued to the shareholders of C Media Limited, the former parent of LKTechnology, (i) 185,412,599 of our ordinary shares, par value $0.01 per share and (ii) 1,000,000 of our preferred shares. Upon the consummation of the AssetExchange, we ceased our previous business operations and became a company focused on the provision of WiFi and mobile application products for long distancerail travelers in China.On August 25, 2018, LK Technology entered into a Stock Purchase Agreement (the “Agreement”) with the shareholders (“Shareholders”) of SuperengineHoldings Limited, a limited liability company organized under the laws of the British Virgin Islands (the “Superengine”), pursuant to which LK Technology acquiredall of the issued and outstanding capital stock of Superengine for an aggregate purchase price of US$60 million (the “Purchase Price”), which are paid by theissuance of our Ordinary Shares in an amount equal to the quotient of (x) the Purchase Price divided by (y) the average of the closing prices of the Ordinary Shareson the NASDAQ Capital Market over the 12 months period preceding July 31, 2018. We are a party to the Agreement in connection with the issuance of theOrdinary Shares and certain other limited purposes.Corporate InformationOur principal executive offices are located at LAB32, SOHO 3Q, No 9, Guanghua Road, Chaoyang District, Beijing, People’s Republic of China 100020. Ourwebsite is www.luokung.com. We routinely post important information on our website. The information contained on our website is not a part of this transitionreport.Our agent for service of process in the United States is Worldwide Stock Transfer, LLC, the current transfer agent of the Company, with a mailing address ofOne University Plaza, Suite 505, Hackensack, New Jersey 07601.B. BUSINESS OVERVIEW.We are a Chinabased provider of rail WiFi and mobile application products for long distance travelers in China. Our primary mobile application, theLuoKuang platform, consists of the LuoKuang mobile applications, a series of supporting software at the server end, and railWiFi hardware and equipment on thetrains that we serve. The LuoKuang platform incorporates technology covered by 22 patents and about 34 software copy rights, and serves as a content and servicedistribution platform that is tailored for particular travel stages featuring geographic location and social interaction. The content and services distributed byLuoKuang contain information, entertainment, travel, ecommerce, online to offline (“O2O”), advertisement and marketing features.LuoKuang mainly provides personalized and precise services to long distance travelers in two locations: on the train and at the destination. Based on thetravel environment, the core elements of our users’ needs include staving off boredom on trains and discovering and exploring new locations upon arrival. The mainservices contain entertainment services (videos and audio, digital readings, games specific and tailored to the travel stage) and social services (satisfying thedemand for value discovery of unfamiliar destinations through social interaction among strangers based on locations). As of December 31, 2017, the LuoKuangplatform featured about 38 million users.The setting services on the train focus on providing entertainment content for passengers to pass time during longdistance travel in closed environments.For example, we provide access to long video formats such as movies and TV shows, short videos, music, digital readings and games.20We use the most valuable WiFi location—the train WiFi setting—as the entrance of our LuoKuang platform and mobile applications. Passengers typicallyride trains for longdistance and interprovincial travel purposes. The long periods of monotonous journeys and the cost concerns for roaming traffic fees enable thecombination of entertainment content service needs and WiFi access needs. Our railWiFi becomes a valuable and sophisticated WiFi service in this setting—notjust WiFi connection service, but a provider of sophisticated services through a WiFi connection. In addition, the annual traffic of 800,000 passengers onboardeach train makes rail WiFi a huge entry point for mobile applications. We do not define ourselves as a train WiFi communication service operator but as a longdistance travel mobile service provider. We provide users with free WiFi access so that users are able to connect to the LuoKuang platform and thus access relatedentertainment services, services on the train and destination services. The rail WiFi is our access point to a significant pool of users and the entrance to acquiringadditional users.The setting services focus on providing targeted push services to users while travelling in unfamiliar cities. Information and service guidance are preciselypushed to appeal to the interests and tastes (eating, drinking, shopping, touring and culture) of individual users (cuisine specialties and local snacks, local events,viewing sights, culture, history, stories). The service guidance is generated, shared and distributed by individual users (travelers, local residents, local businesses)interacting with current locations and featuring users who generated contents from selfmedia and small and medium vertical contents providers).Based on the GIS (geoinformation system), Superengine is a provider of big spatialtemporal data, network graphic image technology and relevant service.Its super engine series includes computer graphic image engines and spatial database engines. Spatialtemporal cloud index is the core of the company’s spatialtemporal data engines. It is equivalent to the neural network of the big data and the Internet. It extends the value of its products and platform to its data serviceproviders. In cooperation, its service providers can be divided into three categories, namely, basic geographic data providers, industrial data providers andbehavioral data providers). Superengine’s industriesoriented spatialtemporal data engine was launched in 2016. The spatialtemporal GIS platform has been appliedin industries such as aerospace, power grid, surveying & mapping, agriculture, cultural relic preservation, water conservancy, public security, railway section, smartcities, and business location selection.Our primary sources of revenue are advertising and marketing promotion revenues.Our Industry — Mobile Internet IndustryOur products and services are engaged in the mobile internet industry. Our main services consist of entertainment services (videos, audio, digital readings,games that are tailormade for passengers on train) and other services including satisfying the demand for value discovery of unfamiliar destinations through socialinteractions among strangers based in such locations). The mobile internet industry in China is rapidly growing and is likely to be in a longterm growth trend.According to the Mobile Internet Blue Book of China Mobile Internet Report, in 2017 the market size of China mobile internet reached RMB 605 billion. Now China isin a leading position in terms of smartphone, mobile communication network and mobile application services. The pool of users is anticipated to keep expandingthrough the promotion and popularization of smartphones and the expansion of the mobile internet market.Video is the leading online entertainment format in China. According to the iResearch Report, over 80% of total time spent by users on online entertainmentin China in 2016 was internet video. Online entertainment, especially internet video, is attractive to Chinese users due to many favorable factors, including easyaccessibility, wide content selection, and innovative platforms with social features.For 2017, the transaction volume of China mobile ecommerce market reached to over RMB 4 trillion according to the China Mobile Ecommerce IndustryResearch Report from iResearch, representing an increase of 19.1%. For the next few years, China mobile online shopping will likely maintain steady growth. Thefocal point of competition in China mobile ecommerce market has shifted from infrastructure service providers to integrated and accurate services providers.Drawing in users with compelling content in diversified scenes has become a trend.21The revenue for China mobile gaming industry reached RMB 144.58 billion for the year of 2017, according to the China Mobile Game Industry ResearchReport from iResearch. With increased investment by largescale enterprises in the sector of mobile games and the strict enforcement of the mobile game industryrelated regulatory policy guidelines, the mobile game market as a whole will become more organized and standardized.According to the Annual Analysis of China Mobile Reading Industry from Analysis, for the year of 2017, the mobile reading market in China reached toRMB 14.04 billion. By the end of 2016, the size of China mobile's reading market reached RMB 11.86 billion, showing an increase of 18.38% in 2017.The closed and boring environment for passengers of longdistance travel and high roaming charges lead to a strong demand to use our rail WiFi services.Passengers, through their own mobile phone, have access to the free WiFi network in each carriage, access to our rich mobile internet entertainment content andtravel services. According to the annual statistical bulletin of China Railway Corporation in 2017, there were about 6,030 trains in operation in China in 2017,consisting of 2,935 high speed trains and 3,095 express trains. The rail WiFi system that we have installed are currently all on express trains. The market value will bemultiplied several times following the extended coverage of service on other trains.Our StrengthsWe believe the following strengths differentiate us from our competitors:Our strategy is to build up personalized and targeted service products for travelers through rail WiFi networks, enabling our services to evolve into a coredriving distribution platform that provides content, news, games, ecommerce, OTO service, travel services and advertising and marketing. In comparison, ourcompetitors offer simple forms of media services on trains. We focus on personalized and targeted matching between users on long distance trips and services. Ourcompetitors focus on operating and generating internet traffic.We possess a complete set of technology system including network, client end and service and operation platform. We have patent protections for WiFiequipment on trains. Our technology strengths are briefly summarized below.WiFi EquipmentPatent protected. Supports WiFi/3G/4G telecom modules; 4 core CPU with X86 architecture, and SSD hard disk with big storage for localcontents.InfrastructureThe technology infrastructures include the application program system, big data gathering and processing systems, intelligence cloudsservice deployment structure systems and our WiFi hardware server deployment structure system. The operation center, big data center,contents center and railWiFi server system are built on this infrastructure. On the above layer, the equipment management platform,account and payment platform, contents management platform and advertisement distribution platform are set up for daily managementpurpose.LuoKuang strengthens the connection of services among people, setting and locations. In catering to people on the move, we anticipate strengthening therelationship between users and their locations in a given moment. Currently, LuoKuang provides the link between users and thirdparty service providers andprovides value added services to both users and thirdparty service providers. The connection is not simply a traffic diversion, but also the direct presentation ofrelevant services in the LuoKuang platform. The open API interface and independent product software package allows easy access by service providers anddevelopers and supports data service, advertisement operations, billing, users promotion and product marketing services. As an API product, LuoKuang does notcreate content or services. The content and services are provided by our partners in the LuoKuang platform. Now, the majority of top mobile internet content andservices providers in China have a presence in the Luokuang platform. Those include, but are not limited to, Toutiao, Wangyi News, iqiyi, Letv, YoudianCinema(Hollywood films), Sohu video, Phoenix Video, Kugou Music, FM Qingting, iReader, Baidu Literature, Phoenix Novel, Baidu Game, Meituan, Dianping, andsimilar content providers.22Our StrategyLuoKuang is positioned to provide API interface services and geographic information social services. The API interface services are provided within thetypical BC model. LuoKuang pushes the content and services from thirdparty service providers to users. The local businesses, service practitioners, residents, andforeign travelers are all defined as a “user” and may participate in social interactions based on local value information and generate UGC content. The socalled localvalue information is defined as information, views, evaluations, experiences and experience sharing related to the local cultural scene, native products,entertainment, food, tourism and activities.The LuoKuang user growth strategy is to have access to users through the travelers’ use of mobile devices in connection with longdistance train travel.Through deploying WiFi systems on trains and providing free WiFi access to passengers, LuoKuang is able to have consistent access to longdistance travelers.The WiFi system on the train has become a powerful user portal at the early stage of LuoKuang and has gained substantial user traffic. We are in a leading positionin terms of numbers of trains contracted and trains in operation with our free WiFi system. We have contracted with about 700 trains, which cover almost 560 millionannual passenger trips. As of the date of this report, approximately 290 trains are operating our rail WiFi system. We will continue to install our rail WiFi system inthe following years.The development strategy for LuoKuang encompasses the following:1.Enhance our local cycle service (a recommendation service system based on the location of travelers after their arrival, recommendations includingtourist attractions, local specialties and other items of interest), strengthen services for arrivals in the form of social interaction and focus on the valueof relationships between users and their current locations.2.Focus on the development of geographic positioning technology. Get the business of local cycle and users on train mixed together. We will put oureffort to maximize the synergy effect.3.Big Data: Behavior data about passenger trips is obtained via the traffic entrance of rail WiFi and these data will help to optimize our product.4.While enhancing setting service experiences and optimizing entertainment experiences, we will enrich ecommerce services on trains featuringrecommendations of customized products and ecommerce shopping guidance of products labeled with specific geographic location (and trafficdiversion).5.Focus on API positioning and attract more premium vertical service providers (contents and services).Intellectual PropertyWe have registered the following software copyrights, patents and trademarks for our business operations. We believe this intellectual property forms anintegral part of our competitive strength.23Patents:We have been granted some inventions by the State Intellectual Property Office of PRC. We possess a complete set of technology system includingnetwork, client end and service and operation platform. We have patent protections for WiFi equipment on trains. We have received the following patents:No.Name of patentTypeRegistrationNumberDate of Insurance1.Wireless communication multimedia chip business consumer informationacquisition terminal deviceInventionZL 2010 2 0528767.9Sep 21, 20112.A user behavior processing method and device for intelligent terminalInventionZL 2013 1 0301728.3May 27, 20153.A global positioning system terminal deviceInventionZL 2010 2 0253452.8Nov 7, 20114.A wireless multimedia serverInventionZL 2013 2 0220183.9Nov 13, 20135.Ordering system of passengers on trainInventionZL 2015 2 0095381.6Aug 5, 20156.A wireless multimedia serverInventionZL 2015 2 0201382.4Oct 28, 20157.An antenna structureInventionZL 2016 2 0424352.4Mar 1, 20178.Spatial data progressive transmission method and deviceInvention201010617383.9Jun 15, 20169.Methods and devices for conflict detection and avoidance of spatial entity elementlabelingInvention201010617385.8Mar 26, 201410.Spatial data processing method and deviceInvention201010617399.XJun 26, 201311.Method and device of spatial data simplificationInvention201010617400.9Mar 13, 201312.Method and device for judging the occlusion type of space entityInvention201010617403.2Sep 25, 201313.A method and device for distributed mapping of 3d model dataInvention201110274924.7Mar 26, 201414.Data simplification of 3d model, gradual transmission method and deviceInvention201110275336.5Mar 25, 201515.Spatial data transmission method and deviceInvention201110306393.5Dec 13, 201416.Methods and devices for spatial data processing, simplification and progressivetransmissionInvention201210104250.0Jun 10, 201517.Spatial data progressive transmission method and deviceInvention201310367021.2Jun 23, 201718.Simplification method and device of spatial dataInvention201310367128.7Sep 22, 201719.The method and device to accelerate transmission and display of graphic dataacross platformsInvention201210116149.7Aug 10, 201620.Methods and devices related to spatial data compression, decompression andprogressive transmissionInvention201310136682.4Nov 10, 2017We also have two patents outside of China.No.Name of patentCountryNationalRegistrationNumberDate ofInsurance1.Spatial data processing method and deviceJapan2012547439Jun 20, 20142.Methods and devices related to spatial data compression, decompression andprogressive transmissionU.S.A14/394,610Sep 5, 201724Software Copyrights:We have received the following software copyrights from the National Copyright Administration (“NCA”) of PRC:No.Name of CopyrightAchievement approachRegistration numberTime of obtainExpire time1.WAP PUSH Business operation platformsystemIndependent research anddevelopment2007SRBJ1464Jul 23, 200750 years2.TDSCDMA Streaming media businessmanagement platform software V1.0Independent research anddevelopment2009SRBJ0412Jan 22, 200950 years3.Content management platform systemsoftware V1.0Independent research anddevelopment2009SRBJ1374Apr 1, 200950 years4.Mobile multimedia broadcast electronicservice guide system software V1.0Independent research anddevelopment2009SRBJ1365Apr 1, 200950 years5.Mobile video business operation platformsystem V1.0Independent research anddevelopment2007SRBJ1463Jul 23, 200750 years6.Mobile multimedia broadcast emergencybroadcast platform software V1.0Independent research anddevelopment2010SRBJ0720Mar 5, 201050 years7.Mobile multimedia broadcast audio richmedia interactive platform softwareV1.0Independent research anddevelopment2010SRBJ0719Mar 5, 201050 years8.Printer typesetting and printing softwareV1.0Independent research anddevelopment2011SRBJ4190Sep 28, 201150 years9.Electronic newspaper business supportplatform software V1.0Independent research anddevelopment2011SRBJ4186Sep 28, 201150 years10.Public information business platformsoftware V1.0Independent research anddevelopment2011SRBJ3810Sep 27, 201150 years11.User interface scripting software V1.0Independent research anddevelopment2011SRBJ3809Sep 27, 201150 years12.Integrated business management platformsoftware V1.0Independent research anddevelopment2012SR003002Jan 16, 201250 years13.Interactive business development platformsoftwareIndependent research anddevelopment2011SRBJ4593Nov 29, 201150 years14.Instant messaging and messaging systemsoftwareIndependent research anddevelopment2014SR122231Aug 5, 201450 years15.General statistical platform software forclient productsIndependent research anddevelopment2014SR216662Dec 30, 201450 years16.CMMB Data broadcast managementplatform softwareIndependent research anddevelopment2009SRBJ0391Jan 22, 200950 years17.Integrated passenger train service systemIndependent research anddevelopment2012SR083665Sep 5, 201250 years25No.Name of CopyrightAchievement approachRegistration numberTime of obtainExpire time18.JHBY Train inspection managementsystemIndependent research anddevelopment2013SR015105Feb 21, 201350 years19.Integrated information engine platformsoftware V1.0Independent research anddevelopment2014SR040347Nov 30, 200150 years20.Super information engine developmentplatform software V5.0Independent research anddevelopment2014SR036792Mar 5, 200350 years21.Core map super network informationengine platform software V1.0Independent research anddevelopment2014SR036772Sep 15, 200750 years22.Integrated management of the grid gissoftware V1.0Independent research anddevelopment2014SR036808Jun 20, 200850 years23.Core map rural power grid equipment GPSpatrol system software V1.0Independent research anddevelopment2014SR036810Dec 10, 200850 years24.Diagram grid patrol PDA system softwareV1.0Independent research anddevelopment2014SR036778Dec 12, 200850 years25.Core map geographic information enginedesktop platform software V1.0Independent research anddevelopment2014SR036614Jan 15, 200950 years26.Integrated management of the gridgeographic information Web systemsoftware V1.0Independent research anddevelopment2014SR036799Mar 10, 200950 years27.Core map railway power supply equipmentGPS patrol system software V1.0Independent research anddevelopment2014SR036783Mar 25, 201050 years28.Core map network 3 d map server softwareV1.0Independent research anddevelopment2014SR036788Feb 20, 201150 years29.Core map network 3d map clientsoftwareV1.0Independent research anddevelopment2014SR036637Feb 22, 201150 years30.Core map 3d map network publishingplatform software V1.0Independent research anddevelopment2014SR036633Mar 10, 201150 years31.Core map 3d map network release pluginsystem software V1.0Independent research anddevelopment2014SR036622Mar 15, 201150 years32.Core map network 3d map smartphoneplatform software V1.0Independent research anddevelopment2014SR036638Apr 28, 201150 years33.Core map network GIS Shared mobileplatform software V1.0Independent research anddevelopment2014SR036634Oct 31, 201150 years34.Core map network GIS sharing platformsoftware V1.0Independent research anddevelopment2014SR036639Dec 16, 201150 yearsTrademarks:We have registered the following trademarks with the Trademark Office, State Administration for Industry and Commerce in the PRC:NoTrademarkClassification NumberValid PeriodRegistration Number1Y图形382010.04.212020.04.2067460692Y图形412010.09.072020.09.0667460673YRADIO文字352010.07.212020.07.2067334374YRADIO文字382010.04.21.2020.04.2067334385YRADIO文字412010.09.072020.09.0667334396LookLook图形382009.04.072019.04.0646660517LookLook图形422008.12.212018.12.2046660508YTV文字352010.07.212020.07.2067335799YTV文字382010.05.282020.05.27673357810YTV文字412010.09.072020.09.06673358111YTV文字422010.09.072020.09.06673358012YOUTV文字352010.07.212020.07.20673344013YOUTV文字382010.05.282020.05.27673344114xfeng文字352012.03.282022.03.27922914526NoTrademarkClassification NumberValid PeriodRegistration Number15xfeng文字382012.03.282022.03.27922916016xfeng文字412012.03.282022.03.27922919017xfeng文字422012.03.282022.03.27922922118中传视讯文字+图形422008.12.212018.12.20466604719中传视讯文字422008.12.212018.12.20466604820中传视讯文字382008.12.212018.12.20466604921新蜂文字382011.08.212021.08.20853890722新蜂文字422012.01.282022.01.27853907823新蜂.潮文字382011.08.212021.08.20853910424新蜂.潮文字422012.01.282022.01.27853914125新影力412014.08.282024.08.271228864326小人图形352014.08.282024.08.271228798527小人图形382014.08.282024.08.271228858028小人图形412014.08.282024.08.271228862929小人图形422014.08.282024.08.271228843530中传文字382014.08.282024.08.271228826731中传图形382014.08.282024.08.271228828932中童文字412014.08.072024.08.061221408533中童在线文字412014.08.072024.08.061221409234翠鸟文字382014.08.072014.08.061221405835翠鸟文字422014.08.072014.08.061221412536爱翠鸟文字382014.08.072024.08.061221406637爱翠鸟文字412014.08.072024.08.061221409638爱翠鸟文字422014.08.072024.08.061221412639翠鸟图形352014.08.072024.08.061221404040翠鸟图形382014.08.072024.08.061221407441翠鸟图形412014.08.072024.08.061221410042翠鸟图形422014.08.072024.08.061221413143信号小喇叭图形+CMEDIA412015.03.212025.03.201248043944LookLook图形382015.11.142025.11.131153342845LookLook图形422014.06.212024.06.201153372046LookLook文字382014.07.142024.07.131153406747LookLook文字422014.04.142024.04.131153422748L图形352014.02.282024.02.271153500249L图形382014.02.282024.02.271153507350L图形412014.02.282024.02.271153518151L图形422014.02.282024.02.271153526252箩筐图形412016.06.142026.06.131658022853箩筐图形422016.06.142026.06.131658022754箩筐文字422016.09.282026.09.271658024955箩筐文字412016.06.142026.06.131658025056箩筐文字352016.09.212026.09.201658025257箩筐文字92016.06.142026.06.131658025327NoTrademarkClassification NumberValid PeriodRegistration Number58箩筐图形382016.06.142026.06.131658022959箩筐图形352016.06.142026.06.131658023060箩筐图形92016.06.142026.06.131658023161微时光文字422016.09.282026.09.271658024762传游录屏文字92016.06.142026.06.131678214463传游录屏文字352016.06.142026.06.131678214364传游录屏文字382016.06.142026.06.131678214265传游录屏文字412016.06.142026.06.131678214166传游录屏文字422016.06.142026.06.131678214067录游器文字92016.06.142026.06.131678213568录游器文字352016.06.142026.06.131678213669录游器文字382016.06.142026.06.131678213770录游器文字412016.06.142026.06.131678213871录游器文字422016.06.142026.06.131678213972畅联TV文字412016.01.212026.01.201579246773畅联TV文字382016.01.212026.01.201579246874SuperEngine92016.01.212026.01.20812572275SuperEngine422016.01.212026.01.20812572876超擎9/422016.01.212026.01.201647320577SUPERENGINE9/422016.01.212026.01.2016473185*See below for an explanation of each classification number used in the table above.Classification No. 9: data processing apparatus, couplers (data processing equipment), computer software (recorded), monitors (computer programs), smartcards (integrated circuit cards), electrodynamic apparatus for the remote control of signals, alarms, and electric installations for the remote control of industrialoperations.Classification No. 35: auctioneering, sales promotion for others, marketing analysis, marketing research, importexport agencies, advisory services forbusiness management, business management for franchise, personnel management consultancy, relocation services for businesses, and systemization ofinformation into computer databases.Classification No. 38: Include services that enable at least sensory communication between two people. Such services include that allow one person to talkto another, send messages from one person to another, Make verbal or visual contact between one person and the other. This classification especially include theservice for broadcasting radio or television programs. Except for radio advertising services and telemarketing services.Classification No. 41: instruction services, teaching, education information, tuition, arranging and conducting of colloquiums, publication of electronicbooks and journals online, amusements, and vocational guidance.Classification No. 42: technical research, studies (technical project), computer software design, updating of computer software, recovery of computer data,computer systems analysis, installation of computer software, computer antivirus protection, and research and development for others. 28Business Certificates and QualificationsWe have obtained all necessary regulatory certifications to conduct our business in the PRC, including without limitation, the following: SoftwareEnterprise Recognition Certificate, Computer Information System Integration Qualification Certificate, Construction Enterprise Qualification Certificate, and SecurityTechnology & Protection Enterprise Certificate. We have also been properly certified as a hightech enterprise and have met the ISO 9001:2000 qualificationmanagement system.Legal ProceedingsAlthough we may, from time to time, be involved in litigation and claims arising out of our operations in the normal course of business, we do not believethat we are a party to any litigation that will have a material adverse impact on our financial condition or results of operations. To our knowledge, other than asdescribed below there are no material legal proceedings threatened against us. From time to time, we may be subject to various claims and legal actions arising in theordinary course of business. Following the consummation of the AEA, we became successor in interest to the legal proceedings described below.Litigation with Shanghai Fusheng Weier Intelligent Control Technology Co., Ltd.On January 22, 2016, Zhong Chuan Rui You and Shanghai Fusheng Weier Intelligent Control Technology Co., Ltd. (“Fusheng Weier”) signed a contract forequipment of $1,652,842 (RMB10,800,000). Since Zhong Chuan Rui You did not make the payments of $1,126,381 (RMB7,360,000) on the due dates, Fusheng Weierfiled a lawsuit against Zhong Chuan Rui You in Shanghai Xuhui District People's Court on October 8, 2016. On March 9, 2017, Xuhui District People's Court issuedthe verdict requiring Zhong Chuan Rui You to pay the overdue debts. In August 2017, C Media Limited made the payment of $512,075 (RMB3,346,000). Theremaining balance has been accrued in accounts payable. The payment schedule for the remaining balance is being negotiated by the two parties. On February 5,2018, a hearing was held adding Zhong Chuan Shi Xun as a defendant. The Group plans to settle the remaining balance within one year.Lawsuit with Gansu Jinlun Culture Media Co., Ltd.On August 22, 2014, Zhong Chuan Rui You and Gansu Jinlun Culture Media Co., Ltd. (“Gansu Jinlun”) signed a “Lanzhou Railway Bureau AirconditionedTrain WiFi Network System Advertising Operation Rights Agreement” for advertising on 72 trains of $1,467,880 (RMB9,604,633). Due to the dispute on theproject implementation, Zhong Chuan Rui You did not pay the advertising fee. On August 23, 2017, Gansu Jinlun filed a lawsuit with Gansu Intermediate People'sCourt. On December 19, 2017, Gansu Intermediate People's Court issued a verdict, ruling that Zhong Chuan Rui You settle the overdue advertising fee. Since only 18out of 72 trains have been installed with Wifi network system, Zhong Chuan Rui You disputed and appealed to the verdict. The next court trial date has not yet beendetermined.C Media and Gansu Jinlun are negotiating a potential settlement to resume the contract. According to the legal counsel, it is probable that the settlementwill amount to approximately $459,000 (RMB3,000,000); therefore, this amount has been accrued in accounts payable as at December 31, 2017.Litigation with Shenzhen Hua Xun Fang Zhou Technology Co., Ltd.On June 16, 2015, Zhong Chuan Rui You signed a cooperation agreement with Shenzhen Hua Xun Fang Zhou Technology Co., Ltd. (“Shenzhen Hua Xun”)and Xuesong Song, a major shareholder of C Media Limited. Pursuant to this agreement, Zhong Chuan Rui You procures equipment from Shenzhen Hua Xun.Xuesong Song acts as a joint liability guarantor for the entire debts of Zhong Chuan Rui You under this agreement. As Zhong Chuan Rui You did not make thepayments on the due dates, Shenzhen Hua Xun filed a lawsuit with Shenzhen Baoan District People's Court on May 31, 2016. On November 1, 2016, Zhong ChuanRui You, Xuesong Song and Shenzhen Hua Xun reached a settlement in Shenzhen Baoan District People's Court to settle $1,735,389 (RMB11,355,000) in fourinstalments. On December 30, 2017, the debt was assigned to C Media Limited.29C. ORGANIZATIONAL STRUCTUREThe following diagram illustrates our corporate structure and the place of formation and affiliation of each of our subsidiaries and affiliates as of September30, 2018.30The following diagram illustrates our corporate structure and the place of formation and affiliation of each of our subsidiaries and affiliates as of December31, 2017.Contractual Arrangements with Beijing Zhong Chuan Shi Xun Technology Limited’s Subsidiaries and Their Respective ShareholdersTo comply with the PRC legal restrictions on foreign ownership of companies that operate mobile application services, our subsidiaries operate in suchrestricted service areas in the PRC through certain PRC domestic companies, whose equity interests are held by certain management members or founders of the LKTechnology Ltd. Part of the registered capital of these PRC domestic companies was funded by certain management members or founders of LK Technology Ltd. LKTechnology Ltd., through its subsidiary Zhong Chuan Tian Xia Information and Technology (Shenzhen) Limited (the “WFOE”), has entered into an exclusivebusiness cooperation agreement with Beijing Zhong Chuan Shi Xun Technology Limited (“Zhong Chuan Shi Xun” or the “VIE”) the PRC domestic company, whichentitle the WFOE to receive a majority of profit of Zhong Chuan Shi Xun. In addition, Zhong Chuan Tian Xia Information and Technology (Shenzhen) Limited hasentered into certain agreements with those management members or founders, including equity interest pledge agreement of the equity interests held by thosemanagement members or founders and exclusive option agreement to acquire the equity interests in these companies when permitted by the PRC laws, rules andregulations. Details of the typical VIE structure of our significant consolidated VIE, primarily domestic companies associated with the operations such as ZhongChuan Shi Xun and its subsidiaries of Zhong Chuan Rui You, Huoerguosi Luokuang and Jiu Zhou Shi Dai, are set forth below: Exclusive Business Cooperation AgreementThe VIE has entered into an exclusive business services agreement with the WFOE, pursuant to which the WFOE provides exclusive business services tothe VIE. In exchange, the VIE pays a service fee to the WFOE which amounts to be no less than the 80% of the VIE’s aftertax profit, resulting in a transfer ofsubstantially all of the profits from the VIE to the WFOE.Exclusive Option AgreementThe VIE equity holders have granted the WFOE exclusive call options to purchase their equity interest in the VIE at an exercise price equal to the minimumprice as permitted by applicable PRC laws. The WFOE may nominate another entity or individual to purchase the equity interest, if applicable, under the call options.Each call option is exercisable subject to the condition that applicable PRC laws, rules and regulations do not prohibit completion of the transfer of the equityinterest pursuant to the call option. The VIE agrees not to distribute any dividends to the VIE equity holders without the approval of WFOE.31Equity Interest Pledge AgreementPursuant to the equity pledge agreement, the VIE equity holders have pledged all of their interests in the equity of the VIE as a continuing first prioritysecurity interest in favor of the WFOE to secure the performance of obligations by the VIEs and/or the equity holders under the exclusive business cooperationagreement. The WFOE is entitled to exercise its right to dispose of the VIE equity holders’ pledged interests in the equity of the VIE and has priority in receivingpayment by the application of proceeds from the auction or sale of such pledged interests, in the event of any breach or default under the exclusive businesscooperation agreement, if applicable. These equity pledge agreement remain in force until all the obligations under the exclusive business cooperation agreementhave been fulfilled.The exclusive business cooperation agreement and equity interest pledge agreement described above also enable the Company to receive substantially allof the economic benefits from the VIE by typically entitling the WFOE to all dividends and other distributions declared by the VIE and to any distributions orproceeds from the disposal by the VIE equity holders of their equity interests in the VIE.D. PROPERTY AND EQUIPMENTWe lease offices located at Lab 30 & Lab 32, SOHO 3Q, No 9, Guanghua Road, Chaoyang District, Beijing, which covers a floor space of 600 square meters.These leases expire at different times throughout 2018 and are renewable upon negotiation.ITEM 4A. UNRESOLVED STAFF COMMENTSNone.ITEM 5. OPERATING AND FINANCIAL REVIEW AND PROSPECTSA . OPERATING RESULTS.The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our consolidatedfinancial statements and the notes to those financial statements appearing elsewhere in this report. This discussion and analysis contains forwardlookingstatements that involve significant risks and uncertainties. As a result of many factors, such as our anticipated growth strategy, our plans to recruit moreemployees, our plans to invest in research and development to enhance our product or service lines, our future business development, results of operations andfinancial condition, expected changes in our net revenues and certain cost or expense items, our ability to attract and retain customers, trends and competitionin the enterprise mobile software application market, and the factors set forth elsewhere in this report, our actual results may differ materially from thoseanticipated in these forwardlooking statements. In light of those risks and uncertainties, there can be no assurance that the forwardlooking statementscontained in this report will in fact occur. You should not place undue reliance on the forwardlooking statements contained in this report.The forwardlooking statements speak only as of the date on which they are made, and, except to the extent required by U.S. federal securities laws, weundertake no obligation to update any forwardlooking statement to reflect events or circumstances after the date on which the statement is made or to reflectthe occurrence of unanticipated events. Further, the information about our intentions contained in this report is a statement of our intention as of the date of thisreport and is based upon, among other things, the existing regulatory environment, industry conditions, market conditions and prices and our assumptions as ofsuch date. We may change our intentions, at any time and without notice, based upon any changes in such factors, in our assumptions or otherwise.32Unless the context otherwise requires, all references to (i) “PRC” and “China” are to the People’s Republic of China; (ii) “U.S. dollar,” “$” and “US$”are to United States dollars; and (iii) “RMB”, “Yuan” and Renminbi are to the currency of the PRC or China.OverviewLuokung Technology was incorporated on October 27, 2009 under the laws of the British Virgin Islands. We are a holding company and conduct ouroperations through LK Technology Ltd., a British Virgin Islands limited liability company (“LK Technology”) and its whollyowned subsidiaries, MMB Limited andMobile Media (China) Limited and their respective subsidiaries and a contractuallycontrolled entity in the PRC named Beijing Zhong Chuan Shi Xun Technology,which hold the rights to deploy WiFi systems on about 700 trains in China, including 290 trains in which WiFi systems have already been installed and are inoperation. In May 2010, we consummated an initial public offering of our American Depository Shares, or ADSs, for gross proceeds of $16 million, and our ADSswere listed on the NASDAQ Capital Market under the ticker symbol “KONE”. Our ordinary shares are not currently listed on any trading market. Our AmericanDepository Shares (“ADSs”) were voluntarily delisted from the NASDAQ Capital Market on September 19, 2018. We have applied to NASDAQ for the listing of ourordinary shares on the NASDAQ Capital Market and received an approval for listing of Ordinary Shares on August 6, 2018, and as of the date of this transitionreport, that application and approval are currently under review.On August 17, 2018, we consummated an asset exchange transaction, pursuant to which we exchanged all issued and outstanding capital stock in TopskyInfoTech Holdings Pte Ltd., the parent of Softech, for the issued and outstanding capital stock of LK Technology (the “Asset Exchange”). In connection with theAsset Exchange, we changed our name on August 20, 2018, and on September 20, 2018, completed the issuance to the shareholders of C Media Limited, the formerparent of LK Technology, of (i) 185,412,599 of our ordinary shares, par value $0.01 per share and (ii) 1,000,000 of our preferred shares. Upon the consummation of theAsset Exchange, we ceased our previous business operations and became a company focused on the provision of WiFi and mobile application products for longdistance travelers in China.On August 25, 2018, LK Technology entered into a Stock Purchase Agreement (the “Agreement”) with the shareholders (“Shareholders”) of SuperengineHoldings Limited, a limited liability company organized under the laws of the British Virgin Islands (the “Superengine”), pursuant to which LK Technology acquiredall of the issued and outstanding capital stock of Superengine for an aggregate purchase price of US$60 million (the “Purchase Price”), which are paid by theissuance of our Ordinary Shares in an amount equal to the quotient of (x) the Purchase Price divided by (y) the average of the closing prices of the Ordinary Shareson the NASDAQ Capital Market over the 12 months period preceding July 31, 2018. We are a party to the Agreement in connection with the issuance of theOrdinary Shares and certain other limited purposes.Results of operations for the fiscal year ended December 31, 2017 compared to the fiscal year ended December 31, 2016.RevenueWe provide displaybased online advertising services to customers by integrating text description, image and video, and displaying the advertisements in aprominent position of LuoKuang Application. We recognize revenue in accordance with ASC 605, over the contractual term based on the agreements andconfirmation letters signed by both parties, commencing on the date the customer’s advertisement is displayed on our platform.For the year ended December 31, 2017, we had revenue of $26,082,417, as compared to revenue of $5,233,145 for the year ended December 31, 2016, anincrease of $20,849,272, or 398.4%, which was primarily due to the increase of our advertising clients.Cost of revenueOur cost of revenue primarily consists of depreciation, labor cost, WiFi equipment installation fees, data charges, annual payments to local railway bureau,other overhead costs.33Cost of revenue for the year ended December 31, 2017 was $5,547,779, representing a decrease of $767,725 or 12.2% as compared to $6,315,504 for the yearended December 31, 2016. The decrease was primarily attributable to the decrease in labor cost as a result of our cost control and a decrease in the number ofmaintenance staff. Additionally, data charges decreased as train passengers prefer using their mobile data, leading to a decrease in 3G and 4G data.Selling and marketing expenseOur selling and marketing expense mainly include promotional and marketing expenses and compensation for our sales and marketing personnel.Selling expense totaled $23,908,733 for the year ended December 31, 2017, as compared to $6,209,804 for the year ended December 31, 2016, an increase of$17,698,929 or 285.0%. The increase was primarily attributable to the increase in promotional and marketing activities conducted by the Company.General and administrative expenseOur general and administrative expenses consist primarily of salaries and benefits for our general and administrative personnel, rent, fees and expenses forlegal, accounting and other professional servicesGeneral and administrative expense totaled $2,451,249 for the year ended December 31, 2017, as compared to $2,108,854 for the year ended December 31,2016, an increase of $342,395 or 16.2%.Research and development expenses.Research and development expenses primarily consist of salaries and benefits for research and development personnel.Research and development expenses totaled $1,046,198 for the year ended December 31, 2017, as compared to $2,882,202 for the year ended December 31,2016, a decrease of $1,836,004 or 63.7%. The decrease was primarily attributable to the Company reduced its expenses in research and development temporarily asour products are quite stable at present.Loss from operationsAs a result of the factors described above, for the year ended December 31, 2017, loss from operations amounted to $6,871,542, as compared to loss fromoperations of $12,283,219 for the year ended December 31, 2016, a decrease of $5,411,677, or 44.1%.Other income/expenseOther income/expense mainly include interest income from bank deposits, foreign currency transaction gain, and loss from investment.Net lossAs a result of the factors described above, our net loss was $6,810,454 for the year ended December 31, 2017, compared to net loss of $13,049,031 for theyear ended December 31, 2016, a decrease of $6,238,577 or 47.8%.Foreign currency translation adjustmentOur reporting currency is the U.S. dollar. The functional currency of our parent company and subsidiaries of Merchant Supreme and Prime Cheer is the U.S.dollar and the functional currency of the Company’s subsidiaries incorporated in China is the Chinese Renminbi (“RMB”). The financial statements of oursubsidiaries incorporated in China are translated to U.S. dollars using period end rates of exchange for assets and liabilities, and average rates of exchange (for theperiod) for revenue, costs, and expenses. Net gains and losses resulting from foreign exchange transactions are included in the consolidated statements ofoperations and comprehensive loss. As a result of foreign currency translations, which are a noncash adjustment, we reported a foreign currency translation gain of$90,671 for the year ended December 31, 2017, as compared to a foreign currency translation loss of $387,375 for the year ended December 31, 2016. This noncashgain had the effect of increasing/decreasing our reported comprehensive income/loss.34Comprehensive lossAs a result of our foreign currency translation adjustment, we had comprehensive loss for the year ended December 31, 2017 of $6,719,783, compared tocomprehensive loss of $12,661,656 for the year ended December 31, 2016.B. LIQUIDITY AND CAPITAL RESOURCESThe information contained in “Item 5. Operating and Financial Review and Prospects – A. Operating Results – Liquidity and Capital Resources” isincorporated herein by reference.C. RESEARCH AND DEVELOPMENT, PATENTS AND LICENSES, ETC.The discussions of our research and development activities were contained in “Item 4. Information about our Company – B. Business Overview –Research and Development” and “Item 5. Operating and Financial Review and Prospects – A. Operating Results – Operating Expenses – Research and DevelopmentExpenses” are incorporated herein by reference. In the years ended December 31, 2017 and 2016, we spent $1,046,198 and $2,882,202, respectively, on research anddevelopment activities.D. TREND INFORMATION.Industry and Market OutlookChina has awarded licenses to mobile phone companies to provide the superfast 4G network to customers. The licenses, which are designed to give mobilephone users faster access to services, were granted by the government to China Mobile, China Unicom Hong Kong and China Telecom. Since the grants, ChinaMobile has offered 4G to subscribers from December 18, 2013. China Unicom and China Telecom, the country's other two major carriers, also offer 4G wireless. Thenumber of China Mobile 4G customers has exceeded 900 million by the end of October in 2017. The move greatly bolstered business for telecom equipment makersand a range of other companies.Under China’s 12th FiveYear Plan, a key priority is for China to transition from “Made in China” to “Designed in China.” In order to achieve this goal, thegovernment plans to heavily invest in science and technology education and R&D so as to further develop China’s intellectual property rights system and support“NextGeneration IT” as a Strategic Emerging Industry (SEI). Additionally, China plans to upgrade the technological capabilities of private and public services,including “triple play” services (the convergence of telecom, broadcasting and Internet networks), ecommerce, and egovernment and statistics systems.Furthermore, the government plans to invest in R&D of the "Internet of things" and cloud computing, and develop digital and virtual technologies.E. OFFBALANCE SHEET ARRANGEMENTSWe have not entered into any financial guarantees or other commitments to guarantee the payment obligations of any third parties. We have not enteredinto any derivative contracts that are indexed to our shares and classified as shareholder’s equity, or that are not reflected in our consolidated financial statements.Furthermore, except for the mortgage referenced above, we do not have any retained or contingent interest in assets transferred to an unconsolidated entity thatserves as credit, liquidity or market risk support to such entity. We do not have any variable interest in any unconsolidated entity that provides financing, liquidity,market risk or credit support to us or engages in leasing, hedging or research and development services with us.35F. TABULAR DISCLOSURE OF CONTRACTUAL OBLIGATIONSAs of December 31, 2017, we did not have any contractual obligations required to be disclosed in this Item 5.F. ITEM 6. DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES.A. DIRECTORS AND SENIOR MANAGEMENT.Executive Officers and DirectorsThe following table sets forth the names and ages as of the date of this transition report of each of our executive officers and directors:NameAgePositionXuesong Song50Chief Executive Officer, Chairman and DirectorDongpu Zhang50PresidentJie Yu34Chief Financial OfficerKegang Peng46Vice President and DirectorChuang Tao51DirectorDennis Galgano (1)(2)69Director (Independent)Jin Shi (1)(2)49Director (Independent)Jiming Ha (1)(3)56Director (Independent)Zhihao Xu (3)42Director (Independent)(1)Member of the Audit Committee.(2)Member of the Compensation Committee.(3)Member of the Nominating and Corporate Governance Committee.Set forth below is biographical information concerning our executive officers and directors.Xuesong Song is a cofounder of C Media Limited and served as its chairman of the board of directors and chief executive officer from 2012 until theconsummation of the AEA. From February 2014 through April 2017, Mr. Song served as a director of Seven Stars Cloud Group, Inc. (NASDAQ: SSC) and fromJanuary 2013 through February 2015, Mr. Song served as a director of Pingtan Marine Enterprise Ltd. (NASDAQ: PME). From May 2006 through January 2009, Mr.Song served as the Chairman of the Board of ChinaGrowth North Acquisition Corporation, a special purpose acquisition company, which acquired UIB GroupLimited in January 2009, in which he remains a director. Mr. Song has been a principal of Chum Capital Group Limited since August 2001, a merchant banking firmthat invests in growth Chinese companies and advises them in financings, mergers & acquisitions and restructurings, and chief executive officer of Beijing ChumInvestment Co., Ltd. since December 2001. Mr. Song has been a director of Mobile Vision Communication Ltd. since July 2004. Mr. Song received a Master’s ofBusiness Administration degree from Oklahoma City/Tianjin Program.Dongpu Zhang was appointed as the President of the Company effective on August 25, 2018. Mr. Dongpu Zhang has served as the General Manager ofSuperEngine Graphics Software Technology Development (Suzhou) Co., Ltd. (“SuperEngine Suzou”) and the Chief Executive Officer of SuperEngine HoldingLimited since September 2016. From February, 2014 to August, 2016, Mr. Zhang served as vice president of Industrial Development Group under China Fortune LandDevelopment Co., Ltd. From March, 2009 to February, 2014, Mr. Zhang served as the vice president of Aerospace Science and Technology Holding Group Co., Ltd.Mr. Zhang receive his Master Degree of Computer Science from Harbin Institute of Technology in 1994 and his Bachelor Degree of information system fromChangsha Institute of technology in 1991.Jie Yu served as the chief financial officer of C Media Limited from January 2018 until the consummation of the asset exchange transactions. From June 2016to January 2018, Mr. Yu served as chief financial officer and secretary of the board of directors of MTI Environment Group Limited. Prior to joining MTI, Mr. Yuserved as the senior manager at DA HUA CPA from November 2012 to May 2016. Previously, Mr. Yu served as the manager at Crowe Horwath (Hong Kong) CPA.Mr. Yu holds a bachelor degree in accounting and finance from University of Auckland and postgraduate diploma in accounting from University of Auckland.36Kegang Peng served as the Vice Chairman of the board of directors C Media Limited from October 2014 to the consummation of the asset exchangetransactions, and is now a member of the Company’s board of directors. Previously, from 2012 to 2014, Mr. Peng was chairman of the board and founder of JiangsuSuqian Jinghaiboyuan Information and Technology Co., Ltd. Mr. Peng studied at Beijing University of Aeronautics and Astronautics majoring computer andapplication.20F 1 f20f2017_luokungtech.htm AMENDMENT NO. 1 TO FORM 20FUNITED STATESSECURITIES AND EXCHANGE COMMISSIONWASHINGTON, D.C. 20549FORM 20F☐ REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934OR☐ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934For the Fiscal year ended _____________OR☒ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934For the transition period from October 1, 2017 to December 31, 2017☐ SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934Date of event requiring this shell company report Commission file number: 00134738Luokung Technology Corp.(Exact name of Registrant as specified in its charter)Not applicable(Translation of Registrant’s name into English)British Virgin IslandsLAB 32, SOHO 3Q, No 9, Guanghua Road, Chaoyang District, BeijingPeople’s Republic of China, 100020(Jurisdiction of incorporation or organization)(Address of principal executive offices)Mr. Muqiao GengLAB32, SOHO 3Q, No 9, Guanghua Road, Chaoyang District, BeijingPeople’s Republic of China 100020Tel: (86) 1085866721(Name, telephone, Email and/or facsimile number and address of company contact person)Securities registered or to be registered pursuant to Section 12(b) of the Act:Title of each className of each exchange on which registeredOrdinary shares, par value $0.01 per shareNonePreferred shares, par value $0.01 per shareNoneSecurities registered or to be registered pursuant to Section 12(g) of the Act:none(Title of Class)Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act:none(Title of Class)Indicate the number of outstanding shares of each of the issuer’s classes of capital or common stock as of the close of the period covered by the transitionreport. 187,097,599 Ordinary Shares, including 186,383,224 Ordinary Shares represented by 714,375 American Depositary Shares, and 1,000,000 Preferred Sharesoutstanding as of September 20, 2018.Indicate by check mark if the registrant is a wellknown seasoned issuer, as defined in Rule 405 of the Securities Act. ☐ Yes ☒ NoIf this report is an annual or transition report, indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of theSecurities Exchange Act of 1934. ☐ Yes ☒ NoIndicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirementsfor the past 90 days. ☒ Yes ☐ NoIndicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File requiredto be submitted and posted pursuant to Rule 405 of Regulation ST (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that theregistrant was required to submit and post such files). ☒ Yes ☐ NoIndicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a nonaccelerated filer. See definition of “accelerated filer andlarge accelerated filer” in Rule 12b2 of the Exchange Act. (Check one):Large accelerated filer ☐ Accelerated filer ☐ Nonaccelerated filer ☒Indicate by check mark which basis of accounting the registrant has used to prepare the financial statements included in this filing.U.S. GAAP ☒International Financial Reporting Standards as issuedby the International Accounting Standards Board ☐Other ☐If “Other” has been checked in response to the previous question, indicate by check mark which financial statement item the registrant has elected tofollow. Item 17 ☐ Item 18 ☐If this is an transition report, indicate by check mark whether the registrant is a shell company (as defined in Rule 12b2 of the ExchangeAct). ☐ Yes ☒ NoExplanatory NoteLuokung Technology Corp. (the “Company”) is filing this transition report on Form 20F (“Transition Report”) in connection with the completion of theexchange of certain of its assets for substantially all of the assets of C Media Limited (“C Media”) pursuant to that Asset Exchange Agreement, dated January 25,2018 (the “Original AEA”), as supplemented by the Addendum to Asset Exchange Agreement, dated October 3, 2018 (the “Addendum” and together with theOriginal AEA, the “AEA”). Following the consummation of the AEA, on October 4, 2018, the Company changed its fiscal year end from September 30 to the fiscalyear end used by C Media, December 31. This Transition Report covers the threemonth period from Octorber 1, 2017 to December 31, 2017, and the fiscal yearsdescribed herein.In this transition report:●References to the “Company”, “we”, “our” and “us” are to Luokung Technology Corp. and its consolidated subsidiaries and variable interestentity, except as the context otherwise requires;●This transition report on Form 20F covers the threemonth period from October 1, 2017 through December 31, 2017 (the “Transition Period”) andreflects our financial results thereof. Prior to this transition report on Form 20F, our two most recent annual reports on Form 20F cover the fiscalyears ended September 30, 2017 and September 30, 2016, respectively, and reflect financial results for the respective twelvemonth periods fromOctober 1 to September 30. Unless otherwise noted, all references to years are to the calendar year from January 1 to December 31 and referencesto our fiscal year or years are to the fiscal year or years which, prior to the Transition Period, ended September 30, while from and after theTransition Period, ended December 31;●References to an “ADS” are to an American Depositary Share, each of which represents one of our Ordinary Shares with a par value of $.01 pershare.Special Note Regarding Forwardlooking StatementsThis transition report contains forwardlooking statements that involve risks and uncertainties. These statements involve known and unknown risks,uncertainties and other factors that may cause our actual results, performance or achievements to be materially different from those expressed or implied by theforwardlooking statements.You can identify these forwardlooking statements by words or phrases such as “may,” “will,” “expect,” “anticipate,” “aim,” “estimate,” “intend,” “plan,”“believe,” “likely to” or other similar expressions. We have based these forwardlooking statements largely on our current expectations and projections about futureevents and financial trends that we believe may affect our financial condition, results of operations, business strategy and financial needs. You should not placeundue reliance on these forwardlooking statements, which apply only as of the date of this transition report. These forwardlooking statements include:●our future business development, results of operations and financial condition;●expected changes in our net revenues and certain cost or expense items;●our ability to attract and retain customers; and●trends and competition in the enterprise mobile software application market.You should read this transition report thoroughly with the understanding that our actual future results may be materially different from, and/or worse, thanwhat we expect. We qualify all of our forwardlooking statements by these cautionary statements. Other sections of this transition report include additional factorswhich could adversely impact our business and financial performance. Moreover, we operate in an evolving environment. New risk factors and uncertainties emergefrom time to time and it is not possible for our management to predict all risk factors and uncertainties, nor can we assess the impact of all factors on our business orthe extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forwardlooking statements.This transition report also contains estimates, projections and statistical data related to the market for the provision of WiFi and mobile applications inChina. This market data, including data from IDC, a leading provider of market data and intelligence, speaks as of the date it was published and includes projectionsthat are based on a number of assumptions and are not representations of fact. The market for the provision of WiFi and mobile applications in China may not growat the rates projected by the market data, or at all. The failure of the market to grow at the projected rates may materially and adversely affect our business and themarket price of our ADSs. In addition, the rapidly changing nature of the market for the provision of WiFi and mobile applications subjects any projections orestimates relating to the growth prospects or future condition of our market to significant uncertainties. If any one or more of the assumptions underlying the marketdata proves to be incorrect, actual results may differ from the projections based on these assumptions.You should not rely upon forwardlooking statements as predictions of future events. We undertake no obligation to update or revise any forwardlookingstatements, whether as a result of new information, future events or otherwise.TABLE OF CONTENTSPart IItem 1.Identity of Directors, Senior Management and Advisers.1Item 2.Offer Statistics and Expected Timetable.1Item 3.Key Information.1A.Selected Financial Data.1B.Capitalization and Indebtedness.3C.Reasons for the Offer and Use of Proceeds.3D.Risk Factors.3Item 4.Information on the Company.19A.History and Development of the Company.19B.Business Overview.20C.Organizational Structure.30D.Property, Plants and Equipment.32Item 4A.Unresolved Staff Comments.32Item 5.Operating and Financial Review and Prospects.32A.Operating Results.32B.Liquidity and Capital Resources.35C.Research and Development, Patents and Licenses, etc.35D.Trend Information.35E.Offbalance Sheet Arrangements.35F.Tabular Disclosure of Contractual Obligations.36Item 6.Directors, Senior Management and Employees.36A.Directors and Senior Management.36B.Compensation.37C.Board Practices.40D.Employees.43E.Share Ownership.43Item 7.Major Shareholders and Related Party Transactions.44A.Major Shareholders.44B.Related Party Transactions.45C.Interests of Experts and Counsel.45Item 8.Financial Information.45A.Consolidated Statements and Other Financial Information.45B.Significant Changes.46Item 9.The Offer and Listing.46A.Offer and Listing Details.46B.Plan of Distribution.47C.Markets.47D.Selling shareholders.48E.Dilution.48F.Expenses of the issue.48Item 10.Additional Information.48A.Share Capital.48B.Memorandum and Articles of Association.48C.Material Contracts.53D.Exchange Controls.54E.Taxation.61F.Dividends and Paying Agents.67G.Statement by Experts.67H.Documents on Display.67I.Subsidiary Information.68Item 11.Quantitative and Qualitative Disclosures about Market Risk.68Item 12.Description of Securities Other than Equity Securities.69A.Debt Securities.69B.Warrants and Rights.69C.Other Securities.69D.American Depositary Shares.69iPart IIItem 13.Defaults, Dividend Arrearages and Delinquencies.71Item 14.Material Modifications to the Rights of Security Holders and Use of Proceeds.71Item 15.Controls and Procedures.71Item 16.[Reserved.]72Item 16A.Audit Committee Financial Expert.72Item 16B.Code of Ethics.73Item 16C.Principal Accountant Fees and Services.73Item 16D.Exemptions from the Listing Standards for Audit Committees.73Item 16E.Purchases of Equity Securities by the Issuer and Affiliated Purchasers.73Item 16F.Change in Registrant’s Certifying Accountant.73Item 16G.Corporate Governance.73Item 16H.Mine Safety Disclosure.73Part IIIItem 17.Financial Statements.74Item 18.Financial Statements.74Item 19.Exhibits.74Index to Consolidated Financial StatementsF1iiPART IITEM 1. IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS.The directors of Luokung Technology Corp. are Xuesong Song, Kegang Peng, Dennis Galgano, Jin Shi, Jiming Ha, Zhihao Xu and Chuang Tao. Thebusiness address for our directors is LAB 32, SOHO 3Q, No 9, Guanghua Road, Chaoyang District, Beijing, People’s Republic of China.Moore Stephens CPA Limited has served as our auditor since October 5, 2018, and is located at 801806 Silvercord Tower 1, 30 Canton road, Tsimshatsui,Kowloon, Hong Kong. BDO China Shun Lun Pan Certified Public Accountants LLP served as our auditors for the last three years, and are located at 4F, No. 61Nanjing Road, Shanghai, People’s Republic of China.Garvey Schubert Barer, P.C., serves as our legal counsel in the United States, and is located at Flour Mill Building, 1000 Potomac Street NW, Suite 200,Washington, D.C., 200073501.Conyers Dill & Pearlman serves as our legal counsel with regard to the laws of the British Virgin Islands, and is located at 29th Floor, One Exchange Square,8 Connaught Place, Central, Hong Kong.ITEM 2. OFFER STATISTICS AND EXPECTED TIMETABLE.Not applicable.ITEM 3. KEY INFORMATION.A. SELECTED FINANCIAL DATA.Luokung Technology Corp. and its consolidated subsidiaries (“Luokung Technology”, “we”, “us”, or “the Company”) consummated an asset exchangeagreement pursuant to which we exchanged our existing assets with those of C Media Limited (the “Asset Exchange”) on August 17, 2018, and we changed ourname from Kingtone Wirelessinfo Solution Holding Ltd. to our current name on August 20, 2018. On October 4, 2018, in connection with the consummation of the Asset Exchange, we changed our fiscal year end from September 30 to December 31.1The selected financial data for the fiscal years ended December 31 2017 and 2016 have been derived from our audited consolidated and combined financialstatements. The selected consolidated and combined financial data should be read in conjunction with our audited financial statements and the accompanying notesand “Item 5 – Operating and Financial Review and Prospects.” Our consolidated and combined financial statements are prepared and presented in accordance withUnited States generally accepted accounting principles, or U.S. GAAP. Our historical results do not necessarily indicate our results expected for any future periods.You should not view our historical results as an indicator of our future performance.LK TECHNOLOGY LTD. AND SUBSIDIARIESSELECTED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS(IN U.S. DOLLARS)For the years ended December 31,20172016Revenues$26,082,417$5,233,145Less: Cost of revenues5,547,7796,315,504Less: Operating expenses:Selling and marketing23,908,7336,209,804General and administrative2,451,2492,108,854Research and development1,046,1982,882,202Total operating expenses27,406,18011,200,860Loss from operations(6,871,542)(12,283,219)Other income (expense):Interest expense(26,611)(4,412)Foreign exchange gains(losses)350,679(298,257)Loss from investment(428,571)Other income (expense), net(262,980)(34,572)Total other income (expense), net61,088(765,812)Loss before income taxes(6,810,454)(13,049,031)Income taxesNet loss$(6,810,454)$(13,049,031)Other comprehensive income:Foreign currency translation adjustment90,671387,375Total comprehensive loss$(6,719,783)$(12,661,656)2LK TECHNOLOGY LTD. AND SUBSIDIARIESSELECTED CONSOLIDATED BALANCE SHEETS(IN U.S. DOLLARS)As of December 31,20172016Accounts receivable, net of allowance for doubtful accounts9,729,6251,865,836Amounts due from related parties11,760,692Property and equipment, net5,044,8727,771,027Goodwill7,239,9367,239,936TOTAL ASSETS37,582,85821,114,832Accounts payable8,784,5186,446,584Accrued liabilities and other payables12,962,91211,329,613Total liabilities25,311,11333,905,520Total Shareholder’s Equity (Deficit)12,271,745(12,790,688)TOTAL LIABILITIES AND SHAREHOLDER’S EQUITY (DEFICIT)37,582,85821,114,832B. CAPITALIZATION AND INDEBTEDNESS.Not applicable.C. REASONS FOR THE OFFER AND USE OF PROCEEDS.Not applicable.D. RISK FACTORS.An investment in our ADSs and ordinary shares involves a high degree of risk. You should carefully consider the risks and uncertainties described belowtogether with all other information contained in this transition report, including the matters discussed under “Special Note Regarding ForwardLooking Statements,”before you decide to invest in our ADSs or ordinary shares. You should pay particular attention to the fact that we are a holding company with substantialoperations in China and are subject to legal and regulatory environments that in many respects differ from those of the United States. If any of the following risks, orany other risks and uncertainties that are not presently foreseeable to us, actually occur, our business, financial condition, results of operations, liquidity and ourfuture growth prospects would be materially and adversely affected. You should also consider all other information contained in this transition report beforedeciding to invest in our ADSs or ordinary shares.Risks Related to Our Company and Our IndustryThe Company had incurred negative cash flows from operating activities and net losses as of December 31, 2017. These matters raise substantial doubt aboutthe Company’s ability to continue as a going concern.The Company’s consolidated financial statements are prepared using generally accepted accounting principles in the United States of America applicableto a going concern, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. As of and for the year endedDecember 31, 2017, the Company had incurred significant operating losses and working capital deficit. The ability of the Company to continue as a going concern isdependent on the Company obtaining adequate capital to fund operating losses until it becomes profitable. If the Company is unable to obtain adequate capital, itcould be forced to cease operations. The accompanying consolidated financial statements do not include any adjustments that might be necessary if the Companyis unable to continue as a going concern.3We may undertake acquisitions, investments, joint ventures or other strategic alliances, which could have a material adverse effect on our ability to manageour business. In addition, such undertakings may not be successful.Our strategy includes plans to grow both organically and through acquisitions, participation in joint ventures or other strategic alliances. Joint venturesand strategic alliances may expose us to new operational, regulatory and market risks, as well as risks associated with additional capital requirements. We may not beable, however, to identify suitable future acquisition candidates or alliance partners. Even if we identify suitable candidates or partners, we may be unable tocomplete an acquisition or alliance on terms commercially acceptable to us. If we fail to identify appropriate candidates or partners, or complete desired acquisitions,we may not be able to implement our strategies effectively or efficiently. In addition, our ability to successfully integrate acquired companies and their operations may be adversely affected by several factors. These factorsinclude:1.diversion of management’s attention;2.difficulties in retaining customers of the acquired companies;3.difficulties in retaining personnel of the acquired companies;4.entry into unfamiliar markets;5.unanticipated problems or legal liabilities; and6.tax and accounting issues.If we fail to integrate acquired companies efficiently, our earnings, revenue growth and business could be negatively affected.Due to intense competition for highlyskilled personnel, we may fail to attract and retain enough sufficiently trained employees to support our operations; ourability to bid for and obtain new projects may be negatively affected and our revenues could decline as a result.The IT industry relies on skilled employees, and our success depends to a significant extent on our ability to attract, hire, train and retain qualifiedemployees. There is significant competition in China for professionals with the skills necessary to develop the products and perform the services we offer to ourcustomers. Increased competition for these professionals, in the mobile application design area or otherwise, could have an adverse effect on us if we experiencesignificant increase in the attrition rate among employees with specialized skills, which could decrease our operating efficiency and productivity and could lead to adecline in demand for our services.In addition, our ability to serve existing customers and business partners and obtain new business will depend, in large part, on our ability to attract, trainand retain skilled personnel that enable us to keep pace with growing demands for wifi connectivity and mobile applications, evolving industry standards andchanging customer preferences. Our failure to attract, train and retain personnel with the qualifications necessary to fulfill the needs of our existing and futurecustomers or to assimilate new employees successfully could have a material adverse effect on our business, financial condition and results of operations. Ourfailure to retain our key personnel on business development or find suitable replacements of the key personnel upon their departure may lead to shrinking newimplementation projects, which could materially adversely affect our business.4Our business depends substantially on the continuing efforts of our senior executives and other key personnel, and our business may be severely disrupted if welose their services.Our future success heavily depends upon the continued services of our senior executives and other key employees, particularly since we recentlyappointed a new chairman. We are reliant on the services of Mr. Xuesong Song, our chairman, chief executive officer and member of our board of directors. If one ormore of our senior executives or key employees is unable or unwilling to continue in his or her present position, we may not be able to replace such employee easily,or at all, we may incur additional expenses to recruit, train and retain replacement personnel, our business may be severely disrupted, and our financial condition andresults of operations may be materially adversely affected.Our business could suffer if our executives and directors compete against us and our noncompetition agreements with them cannot be enforced.If any of our senior executives or key employees joins a competitor or forms a competing company, we may lose customers, knowhow and keyprofessionals and staff members to them. Also, if any of our business development managers who keep a close relationship with our customers and businesspartners joins a competitor or forms a competing company, we may lose customers, and our revenues may be materially adversely affected. Most of our executiveshave entered, or will soon enter, into employment agreements with us that contain or will contain noncompetition provisions. However, if any dispute arisesbetween our executive officers and us, such noncompetition provisions may not be enforceable, especially in China, where all of these executive officers and keyemployees reside, in light of the uncertainties with China’s legal system. See “Risk Factors — Risks Related to Doing Business in China — Uncertainties withrespect to the PRC legal system could adversely affect us.”Our computer networks may be vulnerable to security risks that could disrupt our services and adversely affect our results of operations.Our computer networks may be vulnerable to unauthorized access, computer hackers, computer viruses and other security problems caused byunauthorized access to, or improper use of, systems by third parties or employees. A hacker who circumvents security measures could misappropriate proprietaryinformation or cause interruptions or malfunctions in operations. Computer attacks or disruptions may jeopardize the security of information stored in andtransmitted through computer systems and mobile devices of our customers. Actual or perceived concerns that our systems may be vulnerable to such attacks ordisruptions may deter customers from using our services. As a result, we may be required to expend significant resources to protect against the threat of thesesecurity breaches or to alleviate problems caused by these breaches, which could adversely affect our results of operations.If we do not continually enhance our solutions and service offerings, we may have difficulty in retaining existing customers and attracting new customers.We believe that our future success will depend, to a significant extent, upon our ability to enhance our existing applications and platform, and to introducenew features to meet the preferences and requirements of our customers in a rapidly developing and evolving market. Unexpected technical, operational, distributionor other problems could delay or prevent the introduction of one or more of these products or services, or any products or services that we may plan to introduce inthe future. Our present or future products may not satisfy the evolving preferences and tastes of our customers, and these solutions and services may not achieveanticipated market acceptance or generate incremental revenue. If we are unable to anticipate or respond adequately to the need for service or productenhancements due to resource, technological or other constraints, our business, financial condition and results of operations could be materially and adverselyaffected.5If we are unable to develop competitive new products and service offerings our future results of operations could be adversely affected.Our future revenue stream depends to a large degree on our ability to utilize our technology in a way that will allow us to offer new types of mobileapplications and services to a broader customer base. We will be required to make investments in research and development in order to continually develop newsoftware applications and related service offerings, enhance our existing platform, mobile applications and related service offerings and achieve market acceptanceof our mobile applications and service offerings. We may incur problems in the future in innovating and introducing new mobile applications and service offerings.Our developmentstage mobile applications may not be successfully completed or, if developed, may not achieve significant customer acceptance. If we are unableto successfully define, develop and introduce competitive new mobile applications, and enhance existing mobile applications, our future results of operations wouldbe adversely affected. The timely availability of new applications and their acceptance by customers are important to our future success. A delay in the developmentof new applications could have a significant impact on its results of operations.Changes in technology could adversely affect our business by increasing our costs, reducing our profit margins and causing a decline in our competitiveness.China’s wireless telecom industry, in which we operate, is characterized by rapidly changing technology, evolving industry standards, frequentintroductions of new services and solutions and enhancements as well as changing customer demands. New solutions and new technologies often render existingsolutions and services obsolete, excessively costly or otherwise unmarketable. As a result, our success depends on our ability to adapt to the latest technologicalprogress, such as the 5G standard and technologies, and to develop or acquire and integrate new technologies into our platform, mobile applications and relatedservices. Advances in technology also require us to commit substantial resources to developing or acquiring and then deploying new technologies for use in ouroperations. We must continuously train personnel in new technologies and in how to integrate existing hardware and software systems with these newtechnologies. We may not be able to adapt quickly to new technologies or commit sufficient resources to compete successfully against existing or new competitorsin bringing to market solutions and services that incorporate these new technologies. We may incur problems in the future in innovating and introducing new mobileapplications and service offerings. Our development of new mobile applications and platform enhancements may not be successfully completed or, if developed,may not achieve significant customer acceptance. If we fail to adapt to changes in technologies and compete successfully against established or new competitors,our business, financial condition and results of operations could be adversely affected.Problems with the quality or performance of our hardware, software or other systems may cause delays in the introduction of new solutions or result in the lossof customers and revenues, which could have a material and adverse effect on our business, financial condition and results of operations.Our hardware and software systems are complex and may contain defects, errors or bugs when first introduced to the market or to a particular customer, oras new versions are released. Because we cannot test for all possible scenarios, our systems may contain errors that are not discovered until after they have beeninstalled or implemented, and we may not be able to timely correct these problems. These defects, errors or bugs could interrupt or delay the completion of projectsor sales to our customers. In addition, our reputation may be damaged and we may fail to acquire new projects from existing customers or new customers. Errors mayoccur when we provide systems integration and maintenance services. Even in cases where we have agreements with our customers that contain provisionsdesigned to limit our exposure to potential claims and liabilities arising from customer problems, these provisions may not effectively protect us against such claimsin all cases and in all jurisdictions. In addition, as a result of business and other considerations, we may undertake to compensate our customers for damages arisingfrom the use of our solutions, even if our liability is limited by these provisions. Moreover, claims and liabilities arising from customer problems could also result inadverse publicity and materially and adversely affect our business, results of operations and financial condition. We currently do not carry any product or serviceliability insurance and any imposition of liability on us may materially and adversely affect our business and increase our costs, resulting in reduced revenues andprofitability.Our products may contain undetected software defects, which could negatively affect our revenues.Our software products are complex and may contain undetected defects. Although we test our products, it is possible that errors may be found or occur inour new or existing products after we have commenced commercial shipment of those products. Defects, whether actual or perceived, could result in adversepublicity, loss of revenues, product returns, a delay in market acceptance of our products, loss of competitive position or claims against us by customers. Any suchproblems could be costly to remedy and could cause interruptions, delays, or cessation of our product sales, which could cause us to lose existing or prospectivecustomers and could negatively affect our results of operations.6We may be subject to infringement, misappropriation and indemnity claims in the future, which may cause us to incur significant expenses, pay substantialdamages and be prevented from providing our services or technologies.Our success depends, in part, on our ability to carry out our business without infringing the intellectual property rights of third parties. Patent andcopyright law covering softwarerelated technologies is evolving rapidly and is subject to a great deal of uncertainty. Our selfdeveloped or licensed technologies,processes or methods may be covered by thirdparty patents or copyrights, either now existing or to be issued in the future. Any potential litigation may cause us toincur significant expenses. Thirdparty claims, if successfully asserted against us may cause us to pay substantial damages, seek licenses from third parties, payongoing royalties, redesign our services or technologies, or prevent us from providing services or technologies subject to these claims. Even if we were to prevail,any litigation would likely be costly and timeconsuming and divert the attention of our management and key personnel from our business operations.Our failure to protect our intellectual property rights may undermine our competitive position, and subject us to costly litigation to protect our intellectualproperty rights.Any misappropriation of our technology or the development of competitive technology could seriously harm our business. We regard a substantial portionof our hardware and software systems as proprietary and rely on statutory copyright, trademark, patent, trade secret laws, customer license agreements, employeeand thirdparty nondisclosure agreements and other methods to protect our proprietary rights. Nevertheless, these resources afford only limited protection and theactions we take to protect our intellectual property rights may not be adequate. In particular, third parties may infringe or misappropriate our proprietarytechnologies or other intellectual property rights, which could have a material adverse effect on our business, financial condition and results of operations. Inaddition, intellectual property rights and confidentiality protection in China may not be as effective as in the United States, and policing unauthorized use ofproprietary technology can be difficult and expensive. Further, litigation may be necessary to enforce our intellectual property rights, protect our trade secrets ordetermine the validity and scope of the proprietary rights of others. The outcome of any such litigation may not be in our favor. Any such litigation may be costlyand may divert management attention, as well as our other resources, away from our business. An adverse determination in any such litigation will impair ourintellectual property rights and may harm our business, prospects and reputation. In addition, we have no insurance coverage against litigation costs and wouldhave to bear all litigation costs in excess of the amount recoverable from other parties. The occurrence of any of the foregoing could have a material adverse effecton our business, financial condition and results of operations. Our solutions incorporate a portion of, and work in conjunction with, thirdparty hardware and software solutions. If these thirdparty hardware or softwaresolutions are not available to us at reasonable costs, or at all, our results of operations could be adversely impacted.Although our hardware and software systems and mobile applications primarily rely on our own core technologies, some elements of our systemsincorporate a small portion of thirdparty hardware and software solutions. If any third party were to discontinue making their intellectual property available to us orour customers on a timely basis, or increase materially the cost of their licensing such intellectual property, or if our systems or applications failed to properlyfunction or interoperate with replacement intellectual property, we may need to incur costs in finding replacement thirdparty solutions and/or redesigning oursystems or applications to replace or function with or on replacement thirdparty proprietary technology. Replacement technology may not be available on termsacceptable to us or at all, and we may be unable to develop alternative solutions or redesign our systems or applications on a timely basis or at a reasonable cost. Ifany of these were to occur, our results of operations could be adversely impacted.7Our ability to sell our products is highly dependent on the quality of our service and support offerings, and our failure to offer high quality service could have amaterial adverse effect on our ability to market and sell our products.Our customers depend upon our customer service and support staff to resolve issues relating to our products. Highquality support services are critical forthe successful marketing and sale of our products. If we fail to provide highquality support on an ongoing basis, our customers may react negatively and we maybe materially and adversely affected in our ability to sell additional products to these customers. This could also damage our reputation and prospects with potentialcustomers. Our failure to maintain highquality support services could have a material and adverse effect on our business, results of operations and financialcondition.Weaknesses in our internal controls over financial reporting or disclosure controls and procedures may have a material adverse effect on our business, theprice of our ordinary shares, operating results and financial condition.We are required to establish and maintain appropriate internal controls over financial reporting and disclosure controls and procedures. Pursuant to Section404 of the SarbanesOxley Act of 2002 and the related rules adopted by the Securities and Exchange Commission, every public company is required to include amanagement report on its internal controls over financial reporting in its transition report, which contains management’s assessment of the effectiveness of thecompany’s internal controls over financial reporting. This requirement first applied to our annual report on Form 20F for the fiscal year ended on September 30,2011. In connection with our assessments of our disclosure controls and procedures and internal controls over financial reporting, management concluded that as ofSeptember 30, 2018, our disclosure controls and procedures and our internal controls over financial reporting were not effective due to lack of U.S. generallyaccepted accounting principles (“U.S. GAAP”) expertise in our current accounting team. Please refer to the discussion under Item 15, “Controls and Procedures” forfurther discussion of our material weakness as of December 31, 2017. Should we be unable to remediate the material weakness promptly and effectively, suchweakness could harm our operating results, result in a material misstatement of our financial statements, cause us to fail to meet our financial reporting obligations orprevent us from providing reliable and accurate financial reports or avoiding or detecting fraud. This, in turn, could result in a loss of investor confidence in theaccuracy and completeness of our financial reports, which could have an adverse effect on the trading price of our ordinary shares. Any litigation or otherproceeding or adverse publicity relating to the material weaknesses could have a material adverse effect on our business and operating results. We have very limited insurance coverage which could expose us to significant costs and business disruption.We do not maintain any insurance coverage for our leased properties. Should any natural catastrophes such as earthquakes, floods, typhoons or any actsof terrorism occur in Beijing, China, where our head office is located and most of our employees are based, or elsewhere in China, we might suffer not onlysignificant property damages, but also loss of revenues due to interruptions in our business operations, which could have a material adverse effect on our business,operating results or financial condition.The insurance industry in China is still at an early stage of development. Insurance companies in China offer limited business insurance products, and donot, to our knowledge, offer business liability insurance. As a result, we do not have any business liability insurance coverage for our operations. Moreover, whilebusiness disruption insurance is available, we have determined that the risks of disruption and cost of the insurance are such that we do not require it at this time.Any business disruption, litigation or natural disaster might result in substantial costs and diversion of resources, particularly if it affects our technology platformswhich we depend on for delivery of our software and services, and could have a material adverse effect on our financial condition and results of operations.We may be liable to our customers for damages caused by unauthorized disclosure of sensitive and confidential information, whether through our employees orotherwise.We are typically required to manage, utilize and store sensitive or confidential customer data in connection with the products and services we provide.Under the terms of our customer contracts, we are required to keep such information strictly confidential. We seek to implement specific measures to protectsensitive and confidential customer data. We require our employees to enter into nondisclosure agreements to limit such employees’ access to, and distribution of,our customers’ sensitive and confidential information and our own trade secrets. We can give no assurance that the steps taken by us in this regard will be adequateto protect our customers’ confidential information. If our customers’ proprietary rights are misappropriated by our employees, in violation of any applicableconfidentiality agreements or otherwise, our customers may consider us liable for that act and seek damages and compensation from us. However, we currently donot have any insurance coverage for mismanagement or misappropriation of such information by our employees. Any litigation with respect to unauthorizeddisclosure of sensitive and confidential information might result in substantial costs and diversion of resources and management attention.8We may face intellectual property infringement claims that could be timeconsuming and costly to defend. If we fail to defend ourselves against such claims, wemay lose significant intellectual property rights and may be unable to continue providing our existing products and services.It is critical that we use and develop our technology and products without infringing upon the intellectual property rights of third parties, includingpatents, copyrights, trade secrets and trademarks. Intellectual property litigation is expensive and timeconsuming and could divert management’s attention from ourbusiness. A successful infringement claim against us, whether with or without merit, could, among others things, require us to pay substantial damages, developnoninfringing technology, or rebrand our name or enter into royalty or license agreements that may not be available on acceptable terms, if at all, and cease making,licensing or using products that have infringed a third party’s intellectual property rights. Protracted litigation could also result in existing or potential customersdeferring or limiting their purchase or use of our products until resolution of such litigation, or could require us to indemnify our customers against infringementclaims in certain instances. Also, we may be unaware of intellectual property registrations or applications relating to our services that may give rise to potentialinfringement claims against us. Parties making infringement claims may be able to obtain an injunction to prevent us from delivering our services or usingtechnology containing the allegedly infringing intellectual property. Any intellectual property litigation could have a material adverse effect on our business, resultsof operations or financial condition. Seasonality and fluctuations in our customers’ spending cycle and other factors can cause our revenues and operating results to vary significantly from quarterto quarter and from year to year.Our revenues and operating results will vary significantly from quarter to quarter and from year to year due to a number of factors, many of which areoutside of our control. Our new lines of business acquired upon the consummation of the asset exchange transaction discussed below see higher customer use andactivity during the Chinese New Year holiday than other times during the year when rail travel is high, which lead to higher revenue during this period as morecustomers would like to place more advertising. Due to these and other factors, our operating results may fluctuate significantly from quarter to quarter and fromyear to year. These fluctuations are likely to continue in the future, and operating results for any period may not be indicative of our future performance in any futureperiod.Our corporate actions are substantially controlled by our principal shareholders, who can cause us to take actions in ways you may not agree with.Mr. Xuesong Song, our chairman, chief executive officer and a member of our board of directors, beneficially owns 19.31% of our outstanding ordinaryshares and 1,000,000 preferred shares, and each preferred share has the right to 399 votes at a meeting of the members of the Company. Our officers and directors asa group beneficially own an aggregate of approximately 33.69% of our outstanding ordinary shares. These shareholders, acting individually or as a group, couldexert control and substantial influence over matters such as electing directors, amending our constitutional documents, and approving acquisitions, mergers or otherbusiness combination transactions. This concentration of ownership and voting power may also discourage, delay or prevent a change in control of our company,which could deprive our shareholders of an opportunity to receive a premium for their shares as part of a sale of our company and might reduce the price of ourshares. Alternatively, our controlling shareholders may cause a merger, consolidation or change of control transaction even if it is opposed by our othershareholders, including those who purchase shares in this offering.9We depend on a small number of customers to derive a significant portion of our revenues. If we were to become dependent again upon a few customers, suchdependency could negatively impact our business, operating results and financial condition.We derived a material portion of our revenues from a small number of customers. In the years ended December 31, 2017 and 2016, our five largestcustomers accounted for 99.8% and 78.5% of our total sales, respectively, and our largest customer Guangdong Zhanshi Media Advertising Co., Ltd. accounted forapproximately 80.8% of our total sales during for the fiscal year ended December 31, 2017. As our customer base may change from yeartoyear, during such yearsthat the customer base is highly concentrated, the fluctuation of our sales to any of such major customers could have a material adverse effect on our business,operating results and financial condition. Moreover, our high customer base concentration may also adversely affect our ability to negotiate contract prices withthese customers, which may in turn materially and adversely affect our results of operations.Our historical outstanding accounts receivable have been relatively high. Inability to collect our accounts receivable on a timely basis, if at all, couldmaterially and adversely affect our financial condition, liquidity and results of operations.Historically, our outstanding accounts receivable have been relatively high. As of December 31, 2017 and 2016, our outstanding accounts receivable beforeimpairment were $10.4 million and $2.10 million, respectively. Although we conduct credit evaluations of our customers, we generally do not require collateral orother security from our customers. In addition, we have had a relatively high customer concentration. The outstanding accounts receivable balance for our largestcustomer was 45.3% and 38.5% of our total accounts receivable balance as of December 31, 2017 and 2016, respectively. As a result, an extended delay or default inpayment relating to a significant account would likely have a material and adverse effect on the aging schedule and turnover days of our accounts receivable. Ourinability to collect our accounts receivable on a timely basis, if at all, could materially and adversely affect our financial condition, liquidity and results of operations.Risks Related to Doing Business in ChinaAdverse changes in political and economic policies of the PRC government could have a material adverse effect on the overall economic growth of China,which could reduce the demand for our services and materially and adversely affect our competitive position.Substantially all of our business operations are conducted in China. Accordingly, our business, results of operations, financial condition and prospects aresubject to a significant degree to economic, political and legal developments in China. Although the Chinese economy is no longer a planned economy, the PRCgovernment continues to exercise significant control over China’s economic growth through direct allocation of resources, monetary and tax policies, and a host ofother government policies such as those that encourage or restrict investment in certain industries by foreign investors, control the exchange between RMB andforeign currencies, and regulate the growth of the general or specific market. These government involvements have been instrumental in China’s significant growthin the past 30 years. The reorganization of the telecommunications industry encouraged by the PRC government has directly affected our industry and our growthprospect. In response to the recent global and Chinese economic downturn, the PRC government has adopted policy measures aimed at stimulating the economicgrowth in China. If the PRC government’s current or future policies fail to help the Chinese economy achieve further growth or if any aspect of the PRCgovernment’s policies limits the growth of the telecommunications industry in China or our industry or otherwise negatively affects our business, our growth rate orstrategy, our results of operations could be adversely affected as a result. Our business benefits from certain government tax incentives. Expiration, reduction or discontinuation of, or changes to, these incentives will increase our taxburden and reduce our net income.Under the PRC Enterprise Income Tax Law passed in 2007 and the implementing rules, both of which became effective on January 1, 2008, or the New EITLaw, a unified enterprise income tax rate of 25% and unified tax deduction standard is applied equally to both domesticinvested enterprises and foreigninvestedenterprises, or FIEs. Enterprises established prior to March 16, 2007 eligible for preferential tax treatment in accordance with the then tax laws and administrativeregulations shall gradually become subject to the New EIT Law rate over a fiveyear transition period starting from the date of effectiveness of the New EIT Law.However, certain qualifying hightechnology enterprises may still benefit from a preferential tax rate of 15% if they own their core intellectual properties and they areenterprises in certain Statesupported hightech industries to be later specified by the government. As a result, if our PRC subsidiaries qualify as “hightechnologyenterprises,” they will continue to benefit from the preferential tax rate of 15%, subject to transitional rules implemented from January 1, 2008. Our subsidiary, BeijingZhong Chuan Shi Xun Technology Limited, is qualified as a “hightechnology enterprise” until the end of the November 2018, and therefore it had benefited fromthe preferential tax rate of 15%, subject to transitional rules implemented on January 1, 2008. Although we intend to apply for a renewal of this qualification, if BeijingZhong Chuan Shi Xun ceases to qualify as a “hightechnology enterprise”, or the tax authorities change their position on our preferential tax treatments in thefuture, our future tax liabilities may materially increase, which could materially and adversely affect our financial condition and results of operations.10If we were deemed a “resident enterprise” by PRC tax authorities, we could be subject to tax on our global income at the rate of 25% under the New EIT Lawand our nonPRC shareholders could be subject to certain PRC taxes.Under the New EIT Law and the implementing rules, both of which became effective January 1, 2008, an enterprise established outside of the PRC with “defacto management bodies” within the PRC may be considered a PRC “resident enterprise” and will be subject to the enterprise income tax at the rate of 25% on itsglobal income as well as PRC enterprise income tax reporting obligations. The implementing rules of the New EIT Law define “de facto management” as “substantialand overall management and control over the production and operations, personnel, accounting, and properties” of the enterprise. However, as of the date of thistransition report, no final interpretations on the implementation of the “resident enterprise” designation are available. Moreover, any such designation, when madeby PRC tax authorities, will be determined based on the facts and circumstances of individual cases. Therefore, if we were to be considered a “resident enterprise”by the PRC tax authorities, our global income would be taxable under the New EIT Law at the rate of 25% and, to the extent we were to generate a substantial amountof income outside of PRC in the future, we would be subject to additional taxes. In addition, the dividends we pay to our nonPRC enterprise shareholders and gainsderived by such shareholders or ADS or ordinary share holders from the transfer of our shares or ADSs may also be subject to PRC withholding tax at the rate up to10%, if such income were regarded as Chinasourced income.Our holding company structure may limit the payment of dividends.We have no direct business operations, other than our ownership of our subsidiaries. While we have no current intention of paying dividends, should wedecide in the future to do so, as a holding company, our ability to pay dividends and meet other obligations depends upon the receipt of dividends or otherpayments from our operating subsidiaries and other holdings and investments. Current PRC regulations permit our PRC subsidiaries to pay dividends to us only outof their accumulated profits, if any, determined in accordance with Chinese accounting standards and regulations. In addition, each of our subsidiaries in China isrequired to set aside at least 10% of its aftertax profits each year, if any, to fund a statutory reserve until such reserve reaches 50% of its registered capital. Thesereserves are not distributable as cash dividends. Furthermore, if our subsidiaries in China incur debt on their own behalf in the future, the instruments governing thedebt may restrict their ability to pay dividends or make other payments to us. As a result, there may be limitations on the ability of our PRC subsidiaries to paydividends or make other investments or acquisitions that could be beneficial to our business or otherwise fund and conduct our business.In addition, under the New EIT Law and the implementing rules that became effective on January 1, 2008, dividends generated from the business of our PRCsubsidiaries after January 1, 2008 and payable to us may be subject to a withholding tax rate of 10% if the PRC tax authorities subsequently determine that we are anonresident enterprise, unless there is a tax treaty with China that provides for a different withholding arrangement.Uncertainties with respect to the PRC legal system could adversely affect us.We conduct all of our business through our subsidiaries in China. Our operations in China are governed by PRC laws and regulations. Our PRCsubsidiaries are generally subject to laws and regulations applicable to foreign investments in China and, in particular, laws and regulations applicable to whollyforeignowned enterprises. The PRC legal system is based on statutes. Prior court decisions may be cited for reference but have limited precedential value.11Since 1979, PRC legislation and regulations have significantly enhanced the protections afforded to various forms of foreign investments in China.However, China has not developed a fully integrated legal system and recently enacted laws and regulations may not sufficiently cover all aspects of economicactivities in China. In particular, because these laws and regulations are relatively new, and because of the limited volume of published decisions and theirnonbinding nature, the interpretation and enforcement of these laws and regulations involve uncertainties. In addition, the PRC legal system is based in part ongovernment policies and internal rules (some of which are not published on a timely basis or at all) that may have a retroactive effect. As a result, we may not beaware of our violation of these policies and rules until some time after the violation. In addition, any litigation in China may be protracted and result in substantialcosts and diversion of resources and management attention.PRC regulation of loans and direct investment by offshore holding companies to PRC entities may delay or prevent us from using the proceeds of our May2010 public offering to make loans or additional capital contributions to our PRC operating subsidiaries, which could materially and adversely affect ourliquidity and our ability to fund and expand our business.In utilizing the proceeds of our May 2010 public offering as an offshore holding company of our PRC operating subsidiaries, we may make loans to our PRCsubsidiaries, or we may make additional capital contributions to our PRC subsidiaries. Any loans to our PRC subsidiaries are subject to PRC regulations. Forexample, loans by us to our subsidiaries in China, which are FIEs, to finance their activities cannot exceed statutory limits and must be registered with the StateAdministration of Foreign Exchange, or SAFE. On August 29, 2008, SAFE promulgated Circular 142, a notice regulating the conversion by a foreigninvestedcompany of foreign currency into RMB by restricting how the converted RMB may be used. The notice requires that RMB converted from the foreign currencydenominated capital of a foreigninvested company may only be used for purposes within the business scope approved by the applicable governmental authorityand may not be used for equity investments within the PRC unless specifically provided for otherwise. The foreign currencydenominated capital shall be verified byan accounting firm before converting into RMB. In addition, SAFE strengthened its oversight over the flow and use of RMB funds converted from the foreigncurrencydenominated capital of a foreigninvested company. To convert such capital into RMB, the foreigninvested company must report the use of such RMB tothe bank, and the RMB must be used to the reported purposes. According to Circular 142, change of the use of such RMB without approval is prohibited. Inaddition, such RMB may not be used to repay RMB loans if the proceeds of such loans have not yet been used. Violations of Circular 142 may result in severepenalties, including substantial fines as set forth in the Foreign Exchange Administration Rules.We may also decide to finance our subsidiaries by means of capital contributions. These capital contributions may need approval from the PRC Ministry ofCommerce, or MOFCOM, or its local counterpart. We may not be able to obtain these government approvals on a timely basis, if at all, with respect to future capitalcontributions by us to our PRC subsidiaries. If we fail to receive such approvals in such cases when approval is required, our ability to use the proceeds of our May2010 public offering and to capitalize our PRC operations may be negatively affected, which could adversely affect our liquidity and our ability to fund and expandour business.Governmental control of currency conversion may affect the value of your investment.The PRC government imposes controls on the convertibility of the RMB into foreign currencies and, in certain cases, the remittance of currency out ofChina. We receive substantially all of our revenues in RMB. Under our current corporate structure, our income is primarily derived from dividend payments from ourPRC subsidiaries. Shortages in the availability of foreign currency may restrict the ability of our PRC subsidiaries to remit sufficient foreign currency to paydividends or other payments to us, or otherwise satisfy their foreign currency denominated obligations. Under existing PRC foreign exchange regulations, paymentsof current account items, including profit distributions, interest payments and expenditures from traderelated transactions, can be made in foreign currencieswithout prior approval from SAFE by complying with certain procedural requirements. However, approval from appropriate government authorities is required whereRMB is to be converted into foreign currency and remitted out of China to pay capital expenses such as the repayment of loans denominated in foreign currencies.The PRC government may also at its discretion restrict access in the future to foreign currencies for current account transactions. If the foreign exchange controlsystem prevents us from obtaining sufficient foreign currency to satisfy our currency demands, we may not be able to pay dividends in foreign currencies to ourshareholders, including holders of our ADSs or ordinary shares.12Fluctuation in the value of the RMB may have a material adverse effect on the value of your investment.The value of the RMB against the U.S. dollar and other currencies may fluctuate and is affected by, among other things, changes in political and economicconditions. On July 21, 2005, the PRC government changed its decadeold policy of pegging the value of the RMB to the U.S. dollar. Under the new policy, the RMBis permitted to fluctuate within a narrow and managed band against a basket of certain foreign currencies. This change in policy has resulted in an approximate26.8% appreciation of the RMB against the U.S. dollar between July 21, 2005 and September 30, 2015. Provisions on Administration of Foreign Exchange, asamended in August 2008, further changed China’s exchange regime to a managed floating exchange rate regime based on market supply and demand. Since reachinga high against the U.S. dollar in July 2008, however, the RMB has traded within a narrow band against the U.S. dollar, remaining within 1% of its July 2008 high butnever exceeding it. As a consequence, the RMB has fluctuated sharply since July 2008 against other freelytraded currencies, in tandem with the U.S. dollar. InAugust 2015, the PRC Government devalued its currency by approximately 3%, representing the largest yuan depreciation for 20 years. Concerns remain thatChina’s slowing economy, and in particular its exports, will need a stimulus that can only come from further cuts in the exchange rate.It is difficult to predict how long the current situation may continue and when and how it may change again as the People’s Bank of China may regularlyintervene in the foreign exchange market to achieve economic policy goals. Substantially all of our revenues and costs are denominated in the RMB, and asignificant portion of our financial assets are also denominated in RMB. We principally rely on dividends and other distributions paid to us by our subsidiaries inChina. Any significant revaluation of the RMB may materially and adversely affect our cash flows, revenues, earnings and financial position, and the value of, andany dividends payable on, our ADSs or ordinary shares in U.S. dollars. Any fluctuations of the exchange rate between the RMB and the U.S. dollar could also resultin foreign currency translation losses for financial reporting purposes.PRC laws and regulations governing our businesses. If we are found to be in violation of such PRC laws and regulations, we could be subject to sanctions. Inaddition, changes in such PRC laws and regulations may materially and adversely affect our business.There are substantial uncertainties regarding the interpretation and application of PRC laws and regulations, including, but not limited to, the laws andregulations governing our business. These laws and regulations are relatively new and may be subject to change, and their official interpretation and enforcementmay involve substantial uncertainty. The effectiveness of newly enacted laws, regulations or amendments may be delayed, resulting in detrimental reliance byforeign investors. New laws and regulations that affect existing and proposed future businesses may also be applied retroactively.The PRC government has broad discretion in dealing with violations of laws and regulations, including levying fines, revoking business and other licensesand requiring actions necessary for compliance. In particular, licenses and permits issued or granted to us by relevant governmental bodies may be revoked at a latertime by higher regulatory bodies. We cannot predict the effect of the interpretation of existing or new PRC laws or regulations on our businesses. We cannot assureyou that our current ownership and operating structure would not be found in violation of any current or future PRC laws or regulations. As a result, we may besubject to sanctions, including fines, and could be required to restructure our operations or cease to provide certain services. In addition, any litigation in China maybe protracted and result in substantial costs and diversion of resources and management attention. Any of these or similar actions could significantly disrupt ourbusiness operations or restrict us from conducting a substantial portion of our business operations, which could materially and adversely affect our business,financial condition and results of operations.13If we were required to obtain the prior approval of the China Securities Regulatory Commission, or CSRC, of the listing and trading of our ADSs on theNASDAQ Capital Market, we may face regulatory actions or other sanctions from the CSRC or other PRC regulatory agencies.On August 8, 2006, six PRC regulatory agencies, including the Ministry of Commerce, the State Assets Supervision and Administration Commission, theState Administration for Taxation, the State Administration for Industry and Commerce, the CSRC and the SAFE, jointly issued the Regulations on Mergers andAcquisitions of Domestic Enterprises by Foreign Investors, which became effective on September 8, 2006 (the “New M&A Rules”). This regulation, among otherthings, includes provisions that purport to require that an offshore special purpose vehicle formed for the purposes of overseas listing of equity interests in PRCcompanies and controlled directly or indirectly by PRC companies or individuals obtain the approval of the CSRC prior to the listing and trading of such specialpurpose vehicle’s securities on an overseas stock exchange. On September 21, 2006, the CSRC published on its official website procedures regarding its approval ofoverseas listings by special purpose vehicles. The CSRC approval procedures require the filing of a number of documents with the CSRC and it would take severalmonths to complete the approval process, if practicable at all. The application of this new PRC regulation remains unclear with no consensus currently existingamong leading PRC law firms regarding the scope of the applicability of the CSRC approval requirement. Prior to our May 2010 initial public offering, our PRC counsel has advised us that, based on its understanding of the current PRC laws and regulations aswell as the procedures announced on September 21, 2006: (i) Softech was directly incorporated by Topsky as a foreign investment enterprise under PRC law;therefore, there was no acquisition of the equity of a “PRC domestic company” as defined under the New M&A Rules; and (ii) the contractual arrangementsbetween Kingtone Information and Softech were not clearly defined and considered as the transaction which shall be applied to the New M&A Rules. Therefore, wedid not seek prior CSRC approval for our initial public offering.However, if the CSRC required that we obtain its approval prior to the completion of our initial public offering and the listing of our ADSs on the NASDAQCapital Market, we may face regulatory actions or other sanctions from the CSRC or other PRC regulatory agencies. These regulatory agencies may impose fines andpenalties on our operations in the PRC, limit our operating privileges in the PRC, delay or restrict the repatriation of the proceeds from our initial public offering intothe PRC, or take other actions that could have a material adverse effect on our business, financial condition, results of operations, reputation and prospects, as wellas the trading price of our shares.Also, if the CSRC requires that we obtain its approval, we may be unable to obtain a waiver of the CSRC approval requirements if and when procedures areestablished to obtain such a waiver. Any uncertainties and/or negative publicity regarding this CSRC approval requirement could have a material adverse effect onthe trading price of our shares.PRC regulations relating to the establishment of offshore special purpose companies by PRC residents may subject our PRC resident shareholders to penaltiesand limit our ability to inject capital into our PRC subsidiaries, limit our PRC subsidiaries’ ability to distribute profits to us, or otherwise adversely affect us.On October 21, 2005, the SAFE issued the Notice on Issues Relating to the Administration of Foreign Exchange in Fundraising and Reverse InvestmentActivities of Domestic Residents Conducted via Offshore Special Purpose Companies, or Notice 75, which became effective as of November 1, 2005. According toNotice 75, prior registration with the local SAFE branch is required for PRC residents to establish or to control an offshore company for the purposes of financingsuch offshore company with assets or equity interests in an onshore enterprise located in the PRC, or an offshore special purpose company. An amendment toregistration or filing with the local SAFE branch by such PRC resident is also required for the injection of equity interests or assets of an onshore enterprise in theoffshore special purpose company or overseas funds raised by such offshore company, or any other material change involving a change in the capital of theoffshore special purpose company. Moreover, Notice 75 applies retroactively. As a result, PRC residents who have established or acquired control of offshorespecial purpose companies that have made onshore investments in the PRC in the past are required to have completed the relevant registration procedures with thelocal SAFE branch by March 31, 2006. To further clarify the implementation of Notice 75, the SAFE issued Circular 106 on May 29, 2007. Under Circular 106, PRCsubsidiaries of an offshore special purpose company are required to coordinate and supervise the filing of SAFE registrations by the offshore holding company’sshareholders or beneficial owners who are PRC residents in a timely manner.14Some of our current shareholders and/or beneficial owners may fall within the ambit of the SAFE notice and be required to register with the local SAFEbranch as required under the SAFE notice. If so required, and if such shareholders and/or beneficial owners fail to timely register their SAFE registrations pursuantto the SAFE notice, or if future shareholders and/or beneficial owners of our company who are PRC residents fail to comply with the registration procedures setforth in the SAFE notice, this may subject such shareholders, beneficial owners and/or our PRC subsidiaries to fines and legal sanctions and may also limit ourability to contribute additional capital into our PRC subsidiaries, limit our PRC subsidiaries’ ability to distribute dividends to our company, or otherwise adverselyaffect our business.Risks Associated with our ADSs and Ordinary SharesOur securities are not currently traded on any United States public markets and you may not be able to resell your securities for some time.There is currently no public market for our ordinary shares or American Depository Shares (“ADSs”) in the United States or in any other jurisdiction. OurADSs were voluntarily delisted from the NASDAQ Capital Market on September 19, 2018. We have applied to NASDAQ for the listing of our ordinary shares on theNASDAQ Capital Market and received an approval for listing of Ordinary Shares on August 6, 2018, and as of the date of this transition report, that application andapproval are currently under review. We cannot assume that our ordinary shares will be accepted for listing on the NASDAQ Capital Market, or if listed, that wewould continue to meet the applicable minimum listing requriements. You may not be able to sell your ordinary shares quickly or at all if we are unable to gain listingon a public market in the United States.The market price of our ADSs has historically been highly volatile, and you may not be able to resell our ordinary shares at or above your initial purchaseprice.There may be a limited public market for our ordinary shares and, as discussed above, our ADSs are no longer listed on any public market in the UnitedStates or any other jurisdiction. We cannot assure you that there will be an active trading market for our ordinary shares in the future. If our ordinary shares areaccepted for listing on a public market, you may not be able to sell your ordinary shares quickly or at the market price if trading in our ordinary shares is not active. The trading price of our ADSs and ordinary shares may be volatile. The price of our ADSs and ordinary shares could be subject to wide fluctuations inresponse to a variety of factors, including the following:1.Introduction of new products, services or technologies offered by us or our competitors;2.Failure to meet or exceed revenue and financial projections we provide to the public;3.Actual or anticipated variations in quarterly operating results;4.Failure to meet or exceed the estimates and projections of the investment community;5.General market conditions and overall fluctuations in United States equity markets;6.Announcements of significant acquisitions, strategic partnerships, joint ventures or capital commitments by us or our competitors;7.Disputes or other developments relating to proprietary rights, including patents, litigation matters and our ability to obtain patent protection for ourtechnologies;8.Additions or departures of key management personnel;9.Issuances of debt or equity securities;10.Significant lawsuits, including patent or shareholder litigation;11.Changes in the market valuations of similar companies;12.Sales of additional ordinary shares or other securities by us or our shareholders in the future;13.Trading volume of our ordinary shares;14.Fluctuations in the exchange rate between the U.S. dollar and Renminbi;15.Negative market perception and media coverage of our company or other companies in the same or similar industry with us; and16.Other events or factors, many of which are beyond our control.15In addition, the stock market in general, and the NASDAQ Capital Market and software products and services companies in particular, have experiencedextreme price and volume fluctuations that have often been unrelated or disproportionate to the operating performance of these companies. Broad market andindustry factors may negatively affect the market price of our ordinary shares, regardless of our actual operating performance. Our ADSs and ordinary shares may be subject to the SEC’s penny stock rules which may make it difficult for brokerdealers to complete customer transactionsand trading activity in our securities.Our ADSs and ordinary shares may be deemed to be “penny stock” as that term is defined under the Securities Exchange Act of 1934, as amended. Pennystocks generally are equity securities with a price of less than $5.00 (other than securities registered on certain national securities exchanges or quoted on theNASDAQ system, provided that current price and volume information with respect to transactions in such securities is provided by the exchange or system). Pennystock rules impose additional sales practice requirements on brokerdealers who sell to persons other than established customers and “accredited investors.” Theterm “accredited investor” refers generally to institutions with assets in excess of $5,000,000 or individuals with a net worth in excess of $1,000,000 or annual incomeexceeding $200,000 or $300,000 jointly with their spouse in each of the prior two years.The penny stock rules require a brokerdealer, prior to a transaction in a penny stock not otherwise exempt from the rules, to deliver a standardized riskdisclosure document in a form prepared by the SEC, which provides information about penny stocks and the nature and level of risks in the penny stockmarket. Moreover, brokerdealers are required to determine whether an investment in a penny stock is a suitable investment for a prospective investor. A brokerdealer must receive a written agreement to the transaction from the investor setting forth the identity and quantity of the penny stock to be purchased. Theserequirements may make it more difficult for brokerdealers to effectuate customer transactions and trading activity in our securities. As a result, the market price ofour ADSs and ordinary shares may be depressed, and you may find it more difficult to sell our ADSs or ordinary shares.Sales of a substantial number of ordinary shares or ADSs in the public market by our existing shareholders could cause the price of our ADSs to fall.Sales of a substantial number of our ordinary shares or ADSs in the public market or the perception that these sales might occur, could depress the marketprice of our ADSs and could impair our ability to raise capital through the sale of additional equity securities. We are unable to predict the effect that sales may haveon the prevailing market price of our ADSs.All of our existing shareholders prior to our May 2010 offering were subject to lockup agreements with the underwriters of the offering that restricted theshareholders’ ability to transfer ordinary shares or ADSs until expiration of the lockup period in November 2010. The lockup agreements limited the number ofordinary shares or ADSs that may be sold immediately following the public offering. Subject to certain limitations, approximately 1,000,000 of our total outstandingshares are now eligible for sale. Sales of ordinary shares by these shareholders could have a material adverse effect on the trading price of our ADSs.Future sales and issuances of our ordinary shares, or rights to purchase our ordinary shares, including pursuant to our 2010 Omnibus Incentive Plan, couldresult in additional dilution of the percentage ownership of our shareholders and could cause the price of our ordinary shares to fall.We expect that significant additional capital will be needed in the future to continue our planned operations. To the extent we raise additional capital byissuing equity securities, our shareholders may experience substantial dilution. We may sell ordinary shares, convertible securities or other equity securities in oneor more transactions at prices and in a manner we determine from time to time. If we sell ordinary shares, convertible securities or other equity securities in more thanone transaction, investors may be materially diluted by subsequent sales. Such sales may also result in material dilution to our existing shareholders, and newinvestors could gain rights superior to our existing shareholders.16We do not intend to pay dividends on our ordinary shares, so any returns will be limited to the value of our ADSs and ordinary shares.We have never declared or paid any cash dividend on our ordinary shares. We currently anticipate that we will retain future earnings for the development,operation and expansion of our business and do not anticipate declaring or paying any cash dividends for the foreseeable future. Any return shareholders willtherefore be limited to the value of their ADSs or ordinary shares.As the rights of shareholders under British Virgin Islands law differ from those under U.S. law, you may have fewer protections as a shareholder.Our corporate affairs will be governed by our memorandum of association and articles of association, the BVI Business Companies Act, 2004, or the BVIAct, of the British Virgin Islands and the common law of the British Virgin Islands. The rights of shareholders to take legal action against our directors, actions byminority shareholders and the fiduciary responsibilities of our directors under British Virgin Islands law are to a large extent governed by the BVI Act and thecommon law of the British Virgin Islands. The common law of the British Virgin Islands is derived in part from comparatively limited judicial precedent in the BritishVirgin Islands as well as from English common law, which has persuasive, but not binding, authority on a court in the British Virgin Islands. The rights of ourshareholders and the fiduciary responsibilities of our directors under British Virgin Islands law are not as clearly established as they would be under statutes orjudicial precedents in some jurisdictions in the United States. In particular, the British Virgin Islands has a less developed body of securities laws as compared to theUnited States, and some states (such as Delaware) have more fully developed and judicially interpreted bodies of corporate law.As a result of all of the above, holders of our ADSs and ordinary shares may have more difficulty in protecting their interests through actions against ourmanagement, directors or major shareholders than they would as shareholders of a U.S. company.British Virgin Islands companies may not be able to initiate shareholder derivative actions, thereby depriving shareholders of the ability to protect theirinterests.British Virgin Islands companies may not have standing to initiate a shareholder derivative action in a federal court of the United States. The circumstancesin which any such action may be brought, and the procedures and defenses that may be available in respect to any such action, may result in the rights ofshareholders of a British Virgin Islands company being more limited than those of shareholders of a company organized in the United States. Accordingly,shareholders may have fewer alternatives available to them if they believe that corporate wrongdoing has occurred. The British Virgin Islands courts are alsounlikely to recognize or enforce against us judgments of courts in the United States based on certain liability provisions of U.S. securities law; and to imposeliabilities against us, in original actions brought in the British Virgin Islands, based on certain liability provisions of U.S. securities laws that are penal in nature.There is no statutory recognition in the British Virgin Islands of judgments obtained in the United States, although the courts of the British Virgin Islands willgenerally recognize and enforce the nonpenal judgment of a foreign court of competent jurisdiction without retrial on the merits.The laws of the British Virgin Islands provide little protection for minority shareholders, so minority shareholders will have little or no recourse if theshareholders are dissatisfied with the conduct of our affairs.Under the law of the British Virgin Islands, there is little statutory law for the protection of minority shareholders other than the provisions of the BVI Actdealing with shareholder remedies. The principal protection under statutory law is that shareholders may bring an action to enforce the constituent documents ofthe corporation, our memorandum of association and articles of association. Shareholders are entitled to have the affairs of the company conducted in accordancewith the general law and the memorandum of association and articles of association.17There are common law rights for the protection of shareholders that may be invoked, largely dependent on English company law, since the common law ofthe British Virgin Islands is limited. Under the general rule pursuant to English company law known as the rule in Foss v. Harbottle, a court will generally refuse tointerfere with the management of a company at the insistence of a minority of its shareholders who express dissatisfaction with the conduct of the company’s affairsby the majority or the board of directors. However, every shareholder is entitled to have the affairs of the company conducted properly according to law and thecompany’s constituent documents. As such, if those who control the company have persistently disregarded the requirements of company law or the provisions ofthe company’s memorandum of association and articles of association, then the courts will grant relief. Generally, the areas in which the courts will intervene are thefollowing: (1) an act complained of which is outside the scope of the authorized business or is illegal or not capable of ratification by the majority; (2) acts thatconstitute fraud on the minority where the wrongdoers control the company; (3) acts that infringe on the personal rights of the shareholders, such as the right tovote; and (4) where the company has not complied with provisions requiring approval of a majority of shareholders, which are more limited than the rights affordedminority shareholders under the laws of many states in the United States.Antitakeover provisions in our memorandum of association and articles of association and our right to issue preference shares could make a thirdpartyacquisition of us difficult.Some provisions of our memorandum of association and articles of association may discourage, delay or prevent a change in control of our company ormanagement that shareholders may consider favorable, including provisions that authorize our board of directors to issue preference shares in one or more seriesand to designate the price, rights, preferences, privileges and restrictions of such preference shares.If you hold our ADSs, you may not have the same voting rights as the holders of our ordinary shares and must act through the depositary to exercise your rights.Holders of our ADSs will not be able to exercise voting rights attaching to the shares evidenced by our ADSs on an individual basis. Holders of our ADSswill appoint the depositary or its nominee as their representative to exercise the voting rights attaching to the shares represented by the ADSs. You may not receivevoting materials in time to instruct the depositary to vote, and it is possible that you, or persons who hold their ADSs through brokers, dealers or other third parties,will not have the opportunity to exercise a right to vote. Upon our written request, the depositary will mail to you a shareholder meeting notice which contains,among other things, a statement as to the manner in which your voting instructions may be given, including an express indication that such instructions may begiven or deemed given to the depositary to give a discretionary proxy to a person designated by us if no instructions are received by the depositary from you on orbefore the response date established by the depositary. However, no voting instruction shall be deemed given and no such discretionary proxy shall be given withrespect to any matter as to which we inform the depositary that (i) we do not wish such proxy given, (ii) substantial opposition exists, or (iii) such matter materiallyand adversely affects the rights of shareholders. We will make all reasonable efforts to cause the depositary to extend voting rights to you in a timely manner, butyou may not receive the voting materials in time to ensure that you can instruct the depositary to vote your ADSs. Furthermore, the depositary and its agents willnot be responsible for any failure to carry out any instructions to vote, for the manner in which any vote is cast or for the effect of any such vote. As a result, youmay not be able to exercise your right to vote and you may lack recourse if your ADSs are not voted as you requested. In addition, in your capacity as an ADSholder, you will not be able to call a shareholders’ meeting.You may not be able to participate in rights offerings and may experience dilution of your holdings as a result.We may from time to time distribute rights to our shareholders, including rights to acquire our securities. However, we may not, and under the depositagreement for the ADSs, the depositary will not, offer those rights to ADS holders unless both the rights and the underlying securities to be distributed to ADSholders are registered under the Securities Act, or the distribution of them to ADS holders is exempted from registration under the Securities Act with respect to allholders of ADSs. We are under no obligation to file a registration statement with respect to any such rights or underlying securities or to endeavor to cause such aregistration statement to be declared effective. In addition, we may not be able to rely on an exemption from registration under the Securities Act to distribute suchrights and securities. Accordingly, holders of our ADSs may be unable to participate in our rights offerings and may experience dilution in their holdings as a result.You may be subject to limitations on transfer of your ADSs.Your ADSs are transferable on the books of the depositary. However, the depositary may close its transfer books at any time or from time to time when itdeems expedient in connection with the performance of its duties. In addition, the depositary may refuse to deliver, transfer or register transfers of ADSs generallywhen our books or the books of the depositary are closed, or at any time if we or the depositary deem it advisable to do so because of any requirement of law or ofany government or governmental body, or under any provision of the deposit agreement, or for any other reason.18We may be a passive foreign investment company, of PFIC, which could lead to additional taxes for U.S. holders of our ADSs or ordinary shares.We do not expect to be, for U.S. federal income tax purposes, a passive foreign investment company, or a PFIC, which is a foreign company for which, inany given taxable year, either at least 75% of its gross income is passive income, or investment income in general, or at least 50% of its assets produce or are held toproduce passive income, for the current taxable year, and we expect to operate in such a manner so as not to become a PFIC for any future taxable year. However,because the determination of PFIC status for any taxable year cannot be made until after the close of such year and requires extensive factual investigation,including ascertaining the fair market value of our assets on a quarterly basis and determining whether each item of gross income that we earn is passive income, wecannot assure you that we will not become a PFIC for the current taxable year or any future taxable year. If we are or become a PFIC, a U.S. holder of our ADSs orordinary shares could be subject to additional U.S. federal income taxes on gain recognized with respect to the ADSs or ordinary shares and on certain distributions,plus an interest charge on certain taxes treated as having been deferred under the PFIC rules. Noncorporate U.S. holders will not be eligible for reduced rates oftaxation on any dividends received from us if we are a PFIC in the taxable year in which such dividends are paid or in the preceding taxable year.If our ordinary shares are listed on the NASDAQ Capital Market and the trading price of our ordinary shares fails to comply with the continued listingrequirements of the NASDAQ Capital Market, we would face possible delisting, which would result in a limited public market for our ordinary shares andmake obtaining future debt or equity financing more difficult for us.Companies listed on NASDAQ are subject to delisting for, among other things, failure to maintain a minimum closing bid price of $1.00 per share for 30consecutive business days. On December 19, 2011, we received a letter from NASDAQ indicating that for the last 30 consecutive business days, the closing bidprice of our ADSs fell below the minimum $1.00 per share requirement pursuant to NASDAQ Listing Rule 5550(a)(2) for continued listing on the NASDAQ CapitalMarket. We regained compliance with the minimum bid price requirement for continued listing set forth in NASDAQ Listing Rule 5550(a)(2), as its ADS with itsunderlying ordinary share has achieved a closing bid price of $1.00 or greater for the 10 consecutive business days from November 6 to November 23, 2012 byimplementing a 1for10 combination, or reverse split of the ordinary shares effective November 6, 2012. When listed, we cannot be sure that the price of our ordinaryshares will comply with this requirement for continued listing on the NASDAQ Capital Market in the future. If we were not able to do so, our ordinary shares wouldbe subject to delisting and would likely trade on the overthecounter market. If our ordinary shares were to trade on the overthecounter market, selling ourordinary shares could be more difficult because smaller quantities of shares would likely be bought and sold, transactions could be delayed, and security analysts’coverage of us may be reduced. In addition, brokerdealers have certain regulatory burdens imposed upon them, which may discourage brokerdealers from effectingtransactions in our ordinary shares, further limiting the liquidity of our ordinary shares. As a result, the market price of our ordinary may be depressed, and you mayfind it more difficult to sell our ordinary shares. Such delisting from the NASDAQ Capital Market and continued or further declines in our share price could alsogreatly impair our ability to raise additional necessary capital through equity or debt financing.ITEM 4. INFORMATION ON THE COMPANY.A . HISTORY AND DEVELOPMENT OF THE COMPANY.OverviewWe are a holding company and conduct our operations through our whollyowned subsidiary named LK Technology Ltd., a British Virgin Islands limitedliability company (“LK Technology”), and its whollyowned subsidiaries, MMB Limited and Mobile Media (China) Limited and their respective subsidiaries, whichhold the rights to deploy WiFi systems on about 700 trains in China, including 290 trains in which WiFi systems have already been installed and are in operation. InMay 2010, we consummated an initial public offering of our American Depository Shares, or ADSs, for gross proceeds of $16 million, and our ADSs were listed onthe NASDAQ Capital Market under the ticker symbol “KONE”. Our ordinary shares are not currently listed on any trading market. Our American Depository Shares(“ADSs”) were voluntarily delisted from the NASDAQ Capital Market on September 19, 2018. We have applied to NASDAQ for the listing of our ordinary shares onthe NASDAQ Capital Market and received an approval for listing of Ordinary Shares on August 6, 2018, and as of the date of this transition report, that applicationand approval are currently under review.19On August 17, 2018, we consummated an asset exchange transaction, pursuant to which we exchanged all issued and outstanding capital stock in TopskyInfoTech Holdings Pte Ltd., the parent of Softech, for the issued and outstanding capital stock of LK Technology (the “Asset Exchange”). In connection with theAsset Exchange, we changed our name on August 20, 2018, and on September 20, 2018, issued to the shareholders of C Media Limited, the former parent of LKTechnology, (i) 185,412,599 of our ordinary shares, par value $0.01 per share and (ii) 1,000,000 of our preferred shares. Upon the consummation of the AssetExchange, we ceased our previous business operations and became a company focused on the provision of WiFi and mobile application products for long distancerail travelers in China.On August 25, 2018, LK Technology entered into a Stock Purchase Agreement (the “Agreement”) with the shareholders (“Shareholders”) of SuperengineHoldings Limited, a limited liability company organized under the laws of the British Virgin Islands (the “Superengine”), pursuant to which LK Technology acquiredall of the issued and outstanding capital stock of Superengine for an aggregate purchase price of US$60 million (the “Purchase Price”), which are paid by theissuance of our Ordinary Shares in an amount equal to the quotient of (x) the Purchase Price divided by (y) the average of the closing prices of the Ordinary Shareson the NASDAQ Capital Market over the 12 months period preceding July 31, 2018. We are a party to the Agreement in connection with the issuance of theOrdinary Shares and certain other limited purposes.Corporate InformationOur principal executive offices are located at LAB32, SOHO 3Q, No 9, Guanghua Road, Chaoyang District, Beijing, People’s Republic of China 100020. Ourwebsite is www.luokung.com. We routinely post important information on our website. The information contained on our website is not a part of this transitionreport.Our agent for service of process in the United States is Worldwide Stock Transfer, LLC, the current transfer agent of the Company, with a mailing address ofOne University Plaza, Suite 505, Hackensack, New Jersey 07601.B. BUSINESS OVERVIEW.We are a Chinabased provider of rail WiFi and mobile application products for long distance travelers in China. Our primary mobile application, theLuoKuang platform, consists of the LuoKuang mobile applications, a series of supporting software at the server end, and railWiFi hardware and equipment on thetrains that we serve. The LuoKuang platform incorporates technology covered by 22 patents and about 34 software copy rights, and serves as a content and servicedistribution platform that is tailored for particular travel stages featuring geographic location and social interaction. The content and services distributed byLuoKuang contain information, entertainment, travel, ecommerce, online to offline (“O2O”), advertisement and marketing features.LuoKuang mainly provides personalized and precise services to long distance travelers in two locations: on the train and at the destination. Based on thetravel environment, the core elements of our users’ needs include staving off boredom on trains and discovering and exploring new locations upon arrival. The mainservices contain entertainment services (videos and audio, digital readings, games specific and tailored to the travel stage) and social services (satisfying thedemand for value discovery of unfamiliar destinations through social interaction among strangers based on locations). As of December 31, 2017, the LuoKuangplatform featured about 38 million users.The setting services on the train focus on providing entertainment content for passengers to pass time during longdistance travel in closed environments.For example, we provide access to long video formats such as movies and TV shows, short videos, music, digital readings and games.20We use the most valuable WiFi location—the train WiFi setting—as the entrance of our LuoKuang platform and mobile applications. Passengers typicallyride trains for longdistance and interprovincial travel purposes. The long periods of monotonous journeys and the cost concerns for roaming traffic fees enable thecombination of entertainment content service needs and WiFi access needs. Our railWiFi becomes a valuable and sophisticated WiFi service in this setting—notjust WiFi connection service, but a provider of sophisticated services through a WiFi connection. In addition, the annual traffic of 800,000 passengers onboardeach train makes rail WiFi a huge entry point for mobile applications. We do not define ourselves as a train WiFi communication service operator but as a longdistance travel mobile service provider. We provide users with free WiFi access so that users are able to connect to the LuoKuang platform and thus access relatedentertainment services, services on the train and destination services. The rail WiFi is our access point to a significant pool of users and the entrance to acquiringadditional users.The setting services focus on providing targeted push services to users while travelling in unfamiliar cities. Information and service guidance are preciselypushed to appeal to the interests and tastes (eating, drinking, shopping, touring and culture) of individual users (cuisine specialties and local snacks, local events,viewing sights, culture, history, stories). The service guidance is generated, shared and distributed by individual users (travelers, local residents, local businesses)interacting with current locations and featuring users who generated contents from selfmedia and small and medium vertical contents providers).Based on the GIS (geoinformation system), Superengine is a provider of big spatialtemporal data, network graphic image technology and relevant service.Its super engine series includes computer graphic image engines and spatial database engines. Spatialtemporal cloud index is the core of the company’s spatialtemporal data engines. It is equivalent to the neural network of the big data and the Internet. It extends the value of its products and platform to its data serviceproviders. In cooperation, its service providers can be divided into three categories, namely, basic geographic data providers, industrial data providers andbehavioral data providers). Superengine’s industriesoriented spatialtemporal data engine was launched in 2016. The spatialtemporal GIS platform has been appliedin industries such as aerospace, power grid, surveying & mapping, agriculture, cultural relic preservation, water conservancy, public security, railway section, smartcities, and business location selection.Our primary sources of revenue are advertising and marketing promotion revenues.Our Industry — Mobile Internet IndustryOur products and services are engaged in the mobile internet industry. Our main services consist of entertainment services (videos, audio, digital readings,games that are tailormade for passengers on train) and other services including satisfying the demand for value discovery of unfamiliar destinations through socialinteractions among strangers based in such locations). The mobile internet industry in China is rapidly growing and is likely to be in a longterm growth trend.According to the Mobile Internet Blue Book of China Mobile Internet Report, in 2017 the market size of China mobile internet reached RMB 605 billion. Now China isin a leading position in terms of smartphone, mobile communication network and mobile application services. The pool of users is anticipated to keep expandingthrough the promotion and popularization of smartphones and the expansion of the mobile internet market.Video is the leading online entertainment format in China. According to the iResearch Report, over 80% of total time spent by users on online entertainmentin China in 2016 was internet video. Online entertainment, especially internet video, is attractive to Chinese users due to many favorable factors, including easyaccessibility, wide content selection, and innovative platforms with social features.For 2017, the transaction volume of China mobile ecommerce market reached to over RMB 4 trillion according to the China Mobile Ecommerce IndustryResearch Report from iResearch, representing an increase of 19.1%. For the next few years, China mobile online shopping will likely maintain steady growth. Thefocal point of competition in China mobile ecommerce market has shifted from infrastructure service providers to integrated and accurate services providers.Drawing in users with compelling content in diversified scenes has become a trend.21The revenue for China mobile gaming industry reached RMB 144.58 billion for the year of 2017, according to the China Mobile Game Industry ResearchReport from iResearch. With increased investment by largescale enterprises in the sector of mobile games and the strict enforcement of the mobile game industryrelated regulatory policy guidelines, the mobile game market as a whole will become more organized and standardized.According to the Annual Analysis of China Mobile Reading Industry from Analysis, for the year of 2017, the mobile reading market in China reached toRMB 14.04 billion. By the end of 2016, the size of China mobile's reading market reached RMB 11.86 billion, showing an increase of 18.38% in 2017.The closed and boring environment for passengers of longdistance travel and high roaming charges lead to a strong demand to use our rail WiFi services.Passengers, through their own mobile phone, have access to the free WiFi network in each carriage, access to our rich mobile internet entertainment content andtravel services. According to the annual statistical bulletin of China Railway Corporation in 2017, there were about 6,030 trains in operation in China in 2017,consisting of 2,935 high speed trains and 3,095 express trains. The rail WiFi system that we have installed are currently all on express trains. The market value will bemultiplied several times following the extended coverage of service on other trains.Our StrengthsWe believe the following strengths differentiate us from our competitors:Our strategy is to build up personalized and targeted service products for travelers through rail WiFi networks, enabling our services to evolve into a coredriving distribution platform that provides content, news, games, ecommerce, OTO service, travel services and advertising and marketing. In comparison, ourcompetitors offer simple forms of media services on trains. We focus on personalized and targeted matching between users on long distance trips and services. Ourcompetitors focus on operating and generating internet traffic.We possess a complete set of technology system including network, client end and service and operation platform. We have patent protections for WiFiequipment on trains. Our technology strengths are briefly summarized below.WiFi EquipmentPatent protected. Supports WiFi/3G/4G telecom modules; 4 core CPU with X86 architecture, and SSD hard disk with big storage for localcontents.InfrastructureThe technology infrastructures include the application program system, big data gathering and processing systems, intelligence cloudsservice deployment structure systems and our WiFi hardware server deployment structure system. The operation center, big data center,contents center and railWiFi server system are built on this infrastructure. On the above layer, the equipment management platform,account and payment platform, contents management platform and advertisement distribution platform are set up for daily managementpurpose.LuoKuang strengthens the connection of services among people, setting and locations. In catering to people on the move, we anticipate strengthening therelationship between users and their locations in a given moment. Currently, LuoKuang provides the link between users and thirdparty service providers andprovides value added services to both users and thirdparty service providers. The connection is not simply a traffic diversion, but also the direct presentation ofrelevant services in the LuoKuang platform. The open API interface and independent product software package allows easy access by service providers anddevelopers and supports data service, advertisement operations, billing, users promotion and product marketing services. As an API product, LuoKuang does notcreate content or services. The content and services are provided by our partners in the LuoKuang platform. Now, the majority of top mobile internet content andservices providers in China have a presence in the Luokuang platform. Those include, but are not limited to, Toutiao, Wangyi News, iqiyi, Letv, YoudianCinema(Hollywood films), Sohu video, Phoenix Video, Kugou Music, FM Qingting, iReader, Baidu Literature, Phoenix Novel, Baidu Game, Meituan, Dianping, andsimilar content providers.22Our StrategyLuoKuang is positioned to provide API interface services and geographic information social services. The API interface services are provided within thetypical BC model. LuoKuang pushes the content and services from thirdparty service providers to users. The local businesses, service practitioners, residents, andforeign travelers are all defined as a “user” and may participate in social interactions based on local value information and generate UGC content. The socalled localvalue information is defined as information, views, evaluations, experiences and experience sharing related to the local cultural scene, native products,entertainment, food, tourism and activities.The LuoKuang user growth strategy is to have access to users through the travelers’ use of mobile devices in connection with longdistance train travel.Through deploying WiFi systems on trains and providing free WiFi access to passengers, LuoKuang is able to have consistent access to longdistance travelers.The WiFi system on the train has become a powerful user portal at the early stage of LuoKuang and has gained substantial user traffic. We are in a leading positionin terms of numbers of trains contracted and trains in operation with our free WiFi system. We have contracted with about 700 trains, which cover almost 560 millionannual passenger trips. As of the date of this report, approximately 290 trains are operating our rail WiFi system. We will continue to install our rail WiFi system inthe following years.The development strategy for LuoKuang encompasses the following:1.Enhance our local cycle service (a recommendation service system based on the location of travelers after their arrival, recommendations includingtourist attractions, local specialties and other items of interest), strengthen services for arrivals in the form of social interaction and focus on the valueof relationships between users and their current locations.2.Focus on the development of geographic positioning technology. Get the business of local cycle and users on train mixed together. We will put oureffort to maximize the synergy effect.3.Big Data: Behavior data about passenger trips is obtained via the traffic entrance of rail WiFi and these data will help to optimize our product.4.While enhancing setting service experiences and optimizing entertainment experiences, we will enrich ecommerce services on trains featuringrecommendations of customized products and ecommerce shopping guidance of products labeled with specific geographic location (and trafficdiversion).5.Focus on API positioning and attract more premium vertical service providers (contents and services).Intellectual PropertyWe have registered the following software copyrights, patents and trademarks for our business operations. We believe this intellectual property forms anintegral part of our competitive strength.23Patents:We have been granted some inventions by the State Intellectual Property Office of PRC. We possess a complete set of technology system includingnetwork, client end and service and operation platform. We have patent protections for WiFi equipment on trains. We have received the following patents:No.Name of patentTypeRegistrationNumberDate of Insurance1.Wireless communication multimedia chip business consumer informationacquisition terminal deviceInventionZL 2010 2 0528767.9Sep 21, 20112.A user behavior processing method and device for intelligent terminalInventionZL 2013 1 0301728.3May 27, 20153.A global positioning system terminal deviceInventionZL 2010 2 0253452.8Nov 7, 20114.A wireless multimedia serverInventionZL 2013 2 0220183.9Nov 13, 20135.Ordering system of passengers on trainInventionZL 2015 2 0095381.6Aug 5, 20156.A wireless multimedia serverInventionZL 2015 2 0201382.4Oct 28, 20157.An antenna structureInventionZL 2016 2 0424352.4Mar 1, 20178.Spatial data progressive transmission method and deviceInvention201010617383.9Jun 15, 20169.Methods and devices for conflict detection and avoidance of spatial entity elementlabelingInvention201010617385.8Mar 26, 201410.Spatial data processing method and deviceInvention201010617399.XJun 26, 201311.Method and device of spatial data simplificationInvention201010617400.9Mar 13, 201312.Method and device for judging the occlusion type of space entityInvention201010617403.2Sep 25, 201313.A method and device for distributed mapping of 3d model dataInvention201110274924.7Mar 26, 201414.Data simplification of 3d model, gradual transmission method and deviceInvention201110275336.5Mar 25, 201515.Spatial data transmission method and deviceInvention201110306393.5Dec 13, 201416.Methods and devices for spatial data processing, simplification and progressivetransmissionInvention201210104250.0Jun 10, 201517.Spatial data progressive transmission method and deviceInvention201310367021.2Jun 23, 201718.Simplification method and device of spatial dataInvention201310367128.7Sep 22, 201719.The method and device to accelerate transmission and display of graphic dataacross platformsInvention201210116149.7Aug 10, 201620.Methods and devices related to spatial data compression, decompression andprogressive transmissionInvention201310136682.4Nov 10, 2017We also have two patents outside of China.No.Name of patentCountryNationalRegistrationNumberDate ofInsurance1.Spatial data processing method and deviceJapan2012547439Jun 20, 20142.Methods and devices related to spatial data compression, decompression andprogressive transmissionU.S.A14/394,610Sep 5, 201724Software Copyrights:We have received the following software copyrights from the National Copyright Administration (“NCA”) of PRC:No.Name of CopyrightAchievement approachRegistration numberTime of obtainExpire time1.WAP PUSH Business operation platformsystemIndependent research anddevelopment2007SRBJ1464Jul 23, 200750 years2.TDSCDMA Streaming media businessmanagement platform software V1.0Independent research anddevelopment2009SRBJ0412Jan 22, 200950 years3.Content management platform systemsoftware V1.0Independent research anddevelopment2009SRBJ1374Apr 1, 200950 years4.Mobile multimedia broadcast electronicservice guide system software V1.0Independent research anddevelopment2009SRBJ1365Apr 1, 200950 years5.Mobile video business operation platformsystem V1.0Independent research anddevelopment2007SRBJ1463Jul 23, 200750 years6.Mobile multimedia broadcast emergencybroadcast platform software V1.0Independent research anddevelopment2010SRBJ0720Mar 5, 201050 years7.Mobile multimedia broadcast audio richmedia interactive platform softwareV1.0Independent research anddevelopment2010SRBJ0719Mar 5, 201050 years8.Printer typesetting and printing softwareV1.0Independent research anddevelopment2011SRBJ4190Sep 28, 201150 years9.Electronic newspaper business supportplatform software V1.0Independent research anddevelopment2011SRBJ4186Sep 28, 201150 years10.Public information business platformsoftware V1.0Independent research anddevelopment2011SRBJ3810Sep 27, 201150 years11.User interface scripting software V1.0Independent research anddevelopment2011SRBJ3809Sep 27, 201150 years12.Integrated business management platformsoftware V1.0Independent research anddevelopment2012SR003002Jan 16, 201250 years13.Interactive business development platformsoftwareIndependent research anddevelopment2011SRBJ4593Nov 29, 201150 years14.Instant messaging and messaging systemsoftwareIndependent research anddevelopment2014SR122231Aug 5, 201450 years15.General statistical platform software forclient productsIndependent research anddevelopment2014SR216662Dec 30, 201450 years16.CMMB Data broadcast managementplatform softwareIndependent research anddevelopment2009SRBJ0391Jan 22, 200950 years17.Integrated passenger train service systemIndependent research anddevelopment2012SR083665Sep 5, 201250 years25No.Name of CopyrightAchievement approachRegistration numberTime of obtainExpire time18.JHBY Train inspection managementsystemIndependent research anddevelopment2013SR015105Feb 21, 201350 years19.Integrated information engine platformsoftware V1.0Independent research anddevelopment2014SR040347Nov 30, 200150 years20.Super information engine developmentplatform software V5.0Independent research anddevelopment2014SR036792Mar 5, 200350 years21.Core map super network informationengine platform software V1.0Independent research anddevelopment2014SR036772Sep 15, 200750 years22.Integrated management of the grid gissoftware V1.0Independent research anddevelopment2014SR036808Jun 20, 200850 years23.Core map rural power grid equipment GPSpatrol system software V1.0Independent research anddevelopment2014SR036810Dec 10, 200850 years24.Diagram grid patrol PDA system softwareV1.0Independent research anddevelopment2014SR036778Dec 12, 200850 years25.Core map geographic information enginedesktop platform software V1.0Independent research anddevelopment2014SR036614Jan 15, 200950 years26.Integrated management of the gridgeographic information Web systemsoftware V1.0Independent research anddevelopment2014SR036799Mar 10, 200950 years27.Core map railway power supply equipmentGPS patrol system software V1.0Independent research anddevelopment2014SR036783Mar 25, 201050 years28.Core map network 3 d map server softwareV1.0Independent research anddevelopment2014SR036788Feb 20, 201150 years29.Core map network 3d map clientsoftwareV1.0Independent research anddevelopment2014SR036637Feb 22, 201150 years30.Core map 3d map network publishingplatform software V1.0Independent research anddevelopment2014SR036633Mar 10, 201150 years31.Core map 3d map network release pluginsystem software V1.0Independent research anddevelopment2014SR036622Mar 15, 201150 years32.Core map network 3d map smartphoneplatform software V1.0Independent research anddevelopment2014SR036638Apr 28, 201150 years33.Core map network GIS Shared mobileplatform software V1.0Independent research anddevelopment2014SR036634Oct 31, 201150 years34.Core map network GIS sharing platformsoftware V1.0Independent research anddevelopment2014SR036639Dec 16, 201150 yearsTrademarks:We have registered the following trademarks with the Trademark Office, State Administration for Industry and Commerce in the PRC:NoTrademarkClassification NumberValid PeriodRegistration Number1Y图形382010.04.212020.04.2067460692Y图形412010.09.072020.09.0667460673YRADIO文字352010.07.212020.07.2067334374YRADIO文字382010.04.21.2020.04.2067334385YRADIO文字412010.09.072020.09.0667334396LookLook图形382009.04.072019.04.0646660517LookLook图形422008.12.212018.12.2046660508YTV文字352010.07.212020.07.2067335799YTV文字382010.05.282020.05.27673357810YTV文字412010.09.072020.09.06673358111YTV文字422010.09.072020.09.06673358012YOUTV文字352010.07.212020.07.20673344013YOUTV文字382010.05.282020.05.27673344114xfeng文字352012.03.282022.03.27922914526NoTrademarkClassification NumberValid PeriodRegistration Number15xfeng文字382012.03.282022.03.27922916016xfeng文字412012.03.282022.03.27922919017xfeng文字422012.03.282022.03.27922922118中传视讯文字+图形422008.12.212018.12.20466604719中传视讯文字422008.12.212018.12.20466604820中传视讯文字382008.12.212018.12.20466604921新蜂文字382011.08.212021.08.20853890722新蜂文字422012.01.282022.01.27853907823新蜂.潮文字382011.08.212021.08.20853910424新蜂.潮文字422012.01.282022.01.27853914125新影力412014.08.282024.08.271228864326小人图形352014.08.282024.08.271228798527小人图形382014.08.282024.08.271228858028小人图形412014.08.282024.08.271228862929小人图形422014.08.282024.08.271228843530中传文字382014.08.282024.08.271228826731中传图形382014.08.282024.08.271228828932中童文字412014.08.072024.08.061221408533中童在线文字412014.08.072024.08.061221409234翠鸟文字382014.08.072014.08.061221405835翠鸟文字422014.08.072014.08.061221412536爱翠鸟文字382014.08.072024.08.061221406637爱翠鸟文字412014.08.072024.08.061221409638爱翠鸟文字422014.08.072024.08.061221412639翠鸟图形352014.08.072024.08.061221404040翠鸟图形382014.08.072024.08.061221407441翠鸟图形412014.08.072024.08.061221410042翠鸟图形422014.08.072024.08.061221413143信号小喇叭图形+CMEDIA412015.03.212025.03.201248043944LookLook图形382015.11.142025.11.131153342845LookLook图形422014.06.212024.06.201153372046LookLook文字382014.07.142024.07.131153406747LookLook文字422014.04.142024.04.131153422748L图形352014.02.282024.02.271153500249L图形382014.02.282024.02.271153507350L图形412014.02.282024.02.271153518151L图形422014.02.282024.02.271153526252箩筐图形412016.06.142026.06.131658022853箩筐图形422016.06.142026.06.131658022754箩筐文字422016.09.282026.09.271658024955箩筐文字412016.06.142026.06.131658025056箩筐文字352016.09.212026.09.201658025257箩筐文字92016.06.142026.06.131658025327NoTrademarkClassification NumberValid PeriodRegistration Number58箩筐图形382016.06.142026.06.131658022959箩筐图形352016.06.142026.06.131658023060箩筐图形92016.06.142026.06.131658023161微时光文字422016.09.282026.09.271658024762传游录屏文字92016.06.142026.06.131678214463传游录屏文字352016.06.142026.06.131678214364传游录屏文字382016.06.142026.06.131678214265传游录屏文字412016.06.142026.06.131678214166传游录屏文字422016.06.142026.06.131678214067录游器文字92016.06.142026.06.131678213568录游器文字352016.06.142026.06.131678213669录游器文字382016.06.142026.06.131678213770录游器文字412016.06.142026.06.131678213871录游器文字422016.06.142026.06.131678213972畅联TV文字412016.01.212026.01.201579246773畅联TV文字382016.01.212026.01.201579246874SuperEngine92016.01.212026.01.20812572275SuperEngine422016.01.212026.01.20812572876超擎9/422016.01.212026.01.201647320577SUPERENGINE9/422016.01.212026.01.2016473185*See below for an explanation of each classification number used in the table above.Classification No. 9: data processing apparatus, couplers (data processing equipment), computer software (recorded), monitors (computer programs), smartcards (integrated circuit cards), electrodynamic apparatus for the remote control of signals, alarms, and electric installations for the remote control of industrialoperations.Classification No. 35: auctioneering, sales promotion for others, marketing analysis, marketing research, importexport agencies, advisory services forbusiness management, business management for franchise, personnel management consultancy, relocation services for businesses, and systemization ofinformation into computer databases.Classification No. 38: Include services that enable at least sensory communication between two people. Such services include that allow one person to talkto another, send messages from one person to another, Make verbal or visual contact between one person and the other. This classification especially include theservice for broadcasting radio or television programs. Except for radio advertising services and telemarketing services.Classification No. 41: instruction services, teaching, education information, tuition, arranging and conducting of colloquiums, publication of electronicbooks and journals online, amusements, and vocational guidance.Classification No. 42: technical research, studies (technical project), computer software design, updating of computer software, recovery of computer data,computer systems analysis, installation of computer software, computer antivirus protection, and research and development for others. 28Business Certificates and QualificationsWe have obtained all necessary regulatory certifications to conduct our business in the PRC, including without limitation, the following: SoftwareEnterprise Recognition Certificate, Computer Information System Integration Qualification Certificate, Construction Enterprise Qualification Certificate, and SecurityTechnology & Protection Enterprise Certificate. We have also been properly certified as a hightech enterprise and have met the ISO 9001:2000 qualificationmanagement system.Legal ProceedingsAlthough we may, from time to time, be involved in litigation and claims arising out of our operations in the normal course of business, we do not believethat we are a party to any litigation that will have a material adverse impact on our financial condition or results of operations. To our knowledge, other than asdescribed below there are no material legal proceedings threatened against us. From time to time, we may be subject to various claims and legal actions arising in theordinary course of business. Following the consummation of the AEA, we became successor in interest to the legal proceedings described below.Litigation with Shanghai Fusheng Weier Intelligent Control Technology Co., Ltd.On January 22, 2016, Zhong Chuan Rui You and Shanghai Fusheng Weier Intelligent Control Technology Co., Ltd. (“Fusheng Weier”) signed a contract forequipment of $1,652,842 (RMB10,800,000). Since Zhong Chuan Rui You did not make the payments of $1,126,381 (RMB7,360,000) on the due dates, Fusheng Weierfiled a lawsuit against Zhong Chuan Rui You in Shanghai Xuhui District People's Court on October 8, 2016. On March 9, 2017, Xuhui District People's Court issuedthe verdict requiring Zhong Chuan Rui You to pay the overdue debts. In August 2017, C Media Limited made the payment of $512,075 (RMB3,346,000). Theremaining balance has been accrued in accounts payable. The payment schedule for the remaining balance is being negotiated by the two parties. On February 5,2018, a hearing was held adding Zhong Chuan Shi Xun as a defendant. The Group plans to settle the remaining balance within one year.Lawsuit with Gansu Jinlun Culture Media Co., Ltd.On August 22, 2014, Zhong Chuan Rui You and Gansu Jinlun Culture Media Co., Ltd. (“Gansu Jinlun”) signed a “Lanzhou Railway Bureau AirconditionedTrain WiFi Network System Advertising Operation Rights Agreement” for advertising on 72 trains of $1,467,880 (RMB9,604,633). Due to the dispute on theproject implementation, Zhong Chuan Rui You did not pay the advertising fee. On August 23, 2017, Gansu Jinlun filed a lawsuit with Gansu Intermediate People'sCourt. On December 19, 2017, Gansu Intermediate People's Court issued a verdict, ruling that Zhong Chuan Rui You settle the overdue advertising fee. Since only 18out of 72 trains have been installed with Wifi network system, Zhong Chuan Rui You disputed and appealed to the verdict. The next court trial date has not yet beendetermined.C Media and Gansu Jinlun are negotiating a potential settlement to resume the contract. According to the legal counsel, it is probable that the settlementwill amount to approximately $459,000 (RMB3,000,000); therefore, this amount has been accrued in accounts payable as at December 31, 2017.Litigation with Shenzhen Hua Xun Fang Zhou Technology Co., Ltd.On June 16, 2015, Zhong Chuan Rui You signed a cooperation agreement with Shenzhen Hua Xun Fang Zhou Technology Co., Ltd. (“Shenzhen Hua Xun”)and Xuesong Song, a major shareholder of C Media Limited. Pursuant to this agreement, Zhong Chuan Rui You procures equipment from Shenzhen Hua Xun.Xuesong Song acts as a joint liability guarantor for the entire debts of Zhong Chuan Rui You under this agreement. As Zhong Chuan Rui You did not make thepayments on the due dates, Shenzhen Hua Xun filed a lawsuit with Shenzhen Baoan District People's Court on May 31, 2016. On November 1, 2016, Zhong ChuanRui You, Xuesong Song and Shenzhen Hua Xun reached a settlement in Shenzhen Baoan District People's Court to settle $1,735,389 (RMB11,355,000) in fourinstalments. On December 30, 2017, the debt was assigned to C Media Limited.29C. ORGANIZATIONAL STRUCTUREThe following diagram illustrates our corporate structure and the place of formation and affiliation of each of our subsidiaries and affiliates as of September30, 2018.30The following diagram illustrates our corporate structure and the place of formation and affiliation of each of our subsidiaries and affiliates as of December31, 2017.Contractual Arrangements with Beijing Zhong Chuan Shi Xun Technology Limited’s Subsidiaries and Their Respective ShareholdersTo comply with the PRC legal restrictions on foreign ownership of companies that operate mobile application services, our subsidiaries operate in suchrestricted service areas in the PRC through certain PRC domestic companies, whose equity interests are held by certain management members or founders of the LKTechnology Ltd. Part of the registered capital of these PRC domestic companies was funded by certain management members or founders of LK Technology Ltd. LKTechnology Ltd., through its subsidiary Zhong Chuan Tian Xia Information and Technology (Shenzhen) Limited (the “WFOE”), has entered into an exclusivebusiness cooperation agreement with Beijing Zhong Chuan Shi Xun Technology Limited (“Zhong Chuan Shi Xun” or the “VIE”) the PRC domestic company, whichentitle the WFOE to receive a majority of profit of Zhong Chuan Shi Xun. In addition, Zhong Chuan Tian Xia Information and Technology (Shenzhen) Limited hasentered into certain agreements with those management members or founders, including equity interest pledge agreement of the equity interests held by thosemanagement members or founders and exclusive option agreement to acquire the equity interests in these companies when permitted by the PRC laws, rules andregulations. Details of the typical VIE structure of our significant consolidated VIE, primarily domestic companies associated with the operations such as ZhongChuan Shi Xun and its subsidiaries of Zhong Chuan Rui You, Huoerguosi Luokuang and Jiu Zhou Shi Dai, are set forth below: Exclusive Business Cooperation AgreementThe VIE has entered into an exclusive business services agreement with the WFOE, pursuant to which the WFOE provides exclusive business services tothe VIE. In exchange, the VIE pays a service fee to the WFOE which amounts to be no less than the 80% of the VIE’s aftertax profit, resulting in a transfer ofsubstantially all of the profits from the VIE to the WFOE.Exclusive Option AgreementThe VIE equity holders have granted the WFOE exclusive call options to purchase their equity interest in the VIE at an exercise price equal to the minimumprice as permitted by applicable PRC laws. The WFOE may nominate another entity or individual to purchase the equity interest, if applicable, under the call options.Each call option is exercisable subject to the condition that applicable PRC laws, rules and regulations do not prohibit completion of the transfer of the equityinterest pursuant to the call option. The VIE agrees not to distribute any dividends to the VIE equity holders without the approval of WFOE.31Equity Interest Pledge AgreementPursuant to the equity pledge agreement, the VIE equity holders have pledged all of their interests in the equity of the VIE as a continuing first prioritysecurity interest in favor of the WFOE to secure the performance of obligations by the VIEs and/or the equity holders under the exclusive business cooperationagreement. The WFOE is entitled to exercise its right to dispose of the VIE equity holders’ pledged interests in the equity of the VIE and has priority in receivingpayment by the application of proceeds from the auction or sale of such pledged interests, in the event of any breach or default under the exclusive businesscooperation agreement, if applicable. These equity pledge agreement remain in force until all the obligations under the exclusive business cooperation agreementhave been fulfilled.The exclusive business cooperation agreement and equity interest pledge agreement described above also enable the Company to receive substantially allof the economic benefits from the VIE by typically entitling the WFOE to all dividends and other distributions declared by the VIE and to any distributions orproceeds from the disposal by the VIE equity holders of their equity interests in the VIE.D. PROPERTY AND EQUIPMENTWe lease offices located at Lab 30 & Lab 32, SOHO 3Q, No 9, Guanghua Road, Chaoyang District, Beijing, which covers a floor space of 600 square meters.These leases expire at different times throughout 2018 and are renewable upon negotiation.ITEM 4A. UNRESOLVED STAFF COMMENTSNone.ITEM 5. OPERATING AND FINANCIAL REVIEW AND PROSPECTSA . OPERATING RESULTS.The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our consolidatedfinancial statements and the notes to those financial statements appearing elsewhere in this report. This discussion and analysis contains forwardlookingstatements that involve significant risks and uncertainties. As a result of many factors, such as our anticipated growth strategy, our plans to recruit moreemployees, our plans to invest in research and development to enhance our product or service lines, our future business development, results of operations andfinancial condition, expected changes in our net revenues and certain cost or expense items, our ability to attract and retain customers, trends and competitionin the enterprise mobile software application market, and the factors set forth elsewhere in this report, our actual results may differ materially from thoseanticipated in these forwardlooking statements. In light of those risks and uncertainties, there can be no assurance that the forwardlooking statementscontained in this report will in fact occur. You should not place undue reliance on the forwardlooking statements contained in this report.The forwardlooking statements speak only as of the date on which they are made, and, except to the extent required by U.S. federal securities laws, weundertake no obligation to update any forwardlooking statement to reflect events or circumstances after the date on which the statement is made or to reflectthe occurrence of unanticipated events. Further, the information about our intentions contained in this report is a statement of our intention as of the date of thisreport and is based upon, among other things, the existing regulatory environment, industry conditions, market conditions and prices and our assumptions as ofsuch date. We may change our intentions, at any time and without notice, based upon any changes in such factors, in our assumptions or otherwise.32Unless the context otherwise requires, all references to (i) “PRC” and “China” are to the People’s Republic of China; (ii) “U.S. dollar,” “$” and “US$”are to United States dollars; and (iii) “RMB”, “Yuan” and Renminbi are to the currency of the PRC or China.OverviewLuokung Technology was incorporated on October 27, 2009 under the laws of the British Virgin Islands. We are a holding company and conduct ouroperations through LK Technology Ltd., a British Virgin Islands limited liability company (“LK Technology”) and its whollyowned subsidiaries, MMB Limited andMobile Media (China) Limited and their respective subsidiaries and a contractuallycontrolled entity in the PRC named Beijing Zhong Chuan Shi Xun Technology,which hold the rights to deploy WiFi systems on about 700 trains in China, including 290 trains in which WiFi systems have already been installed and are inoperation. In May 2010, we consummated an initial public offering of our American Depository Shares, or ADSs, for gross proceeds of $16 million, and our ADSswere listed on the NASDAQ Capital Market under the ticker symbol “KONE”. Our ordinary shares are not currently listed on any trading market. Our AmericanDepository Shares (“ADSs”) were voluntarily delisted from the NASDAQ Capital Market on September 19, 2018. We have applied to NASDAQ for the listing of ourordinary shares on the NASDAQ Capital Market and received an approval for listing of Ordinary Shares on August 6, 2018, and as of the date of this transitionreport, that application and approval are currently under review.On August 17, 2018, we consummated an asset exchange transaction, pursuant to which we exchanged all issued and outstanding capital stock in TopskyInfoTech Holdings Pte Ltd., the parent of Softech, for the issued and outstanding capital stock of LK Technology (the “Asset Exchange”). In connection with theAsset Exchange, we changed our name on August 20, 2018, and on September 20, 2018, completed the issuance to the shareholders of C Media Limited, the formerparent of LK Technology, of (i) 185,412,599 of our ordinary shares, par value $0.01 per share and (ii) 1,000,000 of our preferred shares. Upon the consummation of theAsset Exchange, we ceased our previous business operations and became a company focused on the provision of WiFi and mobile application products for longdistance travelers in China.On August 25, 2018, LK Technology entered into a Stock Purchase Agreement (the “Agreement”) with the shareholders (“Shareholders”) of SuperengineHoldings Limited, a limited liability company organized under the laws of the British Virgin Islands (the “Superengine”), pursuant to which LK Technology acquiredall of the issued and outstanding capital stock of Superengine for an aggregate purchase price of US$60 million (the “Purchase Price”), which are paid by theissuance of our Ordinary Shares in an amount equal to the quotient of (x) the Purchase Price divided by (y) the average of the closing prices of the Ordinary Shareson the NASDAQ Capital Market over the 12 months period preceding July 31, 2018. We are a party to the Agreement in connection with the issuance of theOrdinary Shares and certain other limited purposes.Results of operations for the fiscal year ended December 31, 2017 compared to the fiscal year ended December 31, 2016.RevenueWe provide displaybased online advertising services to customers by integrating text description, image and video, and displaying the advertisements in aprominent position of LuoKuang Application. We recognize revenue in accordance with ASC 605, over the contractual term based on the agreements andconfirmation letters signed by both parties, commencing on the date the customer’s advertisement is displayed on our platform.For the year ended December 31, 2017, we had revenue of $26,082,417, as compared to revenue of $5,233,145 for the year ended December 31, 2016, anincrease of $20,849,272, or 398.4%, which was primarily due to the increase of our advertising clients.Cost of revenueOur cost of revenue primarily consists of depreciation, labor cost, WiFi equipment installation fees, data charges, annual payments to local railway bureau,other overhead costs.33Cost of revenue for the year ended December 31, 2017 was $5,547,779, representing a decrease of $767,725 or 12.2% as compared to $6,315,504 for the yearended December 31, 2016. The decrease was primarily attributable to the decrease in labor cost as a result of our cost control and a decrease in the number ofmaintenance staff. Additionally, data charges decreased as train passengers prefer using their mobile data, leading to a decrease in 3G and 4G data.Selling and marketing expenseOur selling and marketing expense mainly include promotional and marketing expenses and compensation for our sales and marketing personnel.Selling expense totaled $23,908,733 for the year ended December 31, 2017, as compared to $6,209,804 for the year ended December 31, 2016, an increase of$17,698,929 or 285.0%. The increase was primarily attributable to the increase in promotional and marketing activities conducted by the Company.General and administrative expenseOur general and administrative expenses consist primarily of salaries and benefits for our general and administrative personnel, rent, fees and expenses forlegal, accounting and other professional servicesGeneral and administrative expense totaled $2,451,249 for the year ended December 31, 2017, as compared to $2,108,854 for the year ended December 31,2016, an increase of $342,395 or 16.2%.Research and development expenses.Research and development expenses primarily consist of salaries and benefits for research and development personnel.Research and development expenses totaled $1,046,198 for the year ended December 31, 2017, as compared to $2,882,202 for the year ended December 31,2016, a decrease of $1,836,004 or 63.7%. The decrease was primarily attributable to the Company reduced its expenses in research and development temporarily asour products are quite stable at present.Loss from operationsAs a result of the factors described above, for the year ended December 31, 2017, loss from operations amounted to $6,871,542, as compared to loss fromoperations of $12,283,219 for the year ended December 31, 2016, a decrease of $5,411,677, or 44.1%.Other income/expenseOther income/expense mainly include interest income from bank deposits, foreign currency transaction gain, and loss from investment.Net lossAs a result of the factors described above, our net loss was $6,810,454 for the year ended December 31, 2017, compared to net loss of $13,049,031 for theyear ended December 31, 2016, a decrease of $6,238,577 or 47.8%.Foreign currency translation adjustmentOur reporting currency is the U.S. dollar. The functional currency of our parent company and subsidiaries of Merchant Supreme and Prime Cheer is the U.S.dollar and the functional currency of the Company’s subsidiaries incorporated in China is the Chinese Renminbi (“RMB”). The financial statements of oursubsidiaries incorporated in China are translated to U.S. dollars using period end rates of exchange for assets and liabilities, and average rates of exchange (for theperiod) for revenue, costs, and expenses. Net gains and losses resulting from foreign exchange transactions are included in the consolidated statements ofoperations and comprehensive loss. As a result of foreign currency translations, which are a noncash adjustment, we reported a foreign currency translation gain of$90,671 for the year ended December 31, 2017, as compared to a foreign currency translation loss of $387,375 for the year ended December 31, 2016. This noncashgain had the effect of increasing/decreasing our reported comprehensive income/loss.34Comprehensive lossAs a result of our foreign currency translation adjustment, we had comprehensive loss for the year ended December 31, 2017 of $6,719,783, compared tocomprehensive loss of $12,661,656 for the year ended December 31, 2016.B. LIQUIDITY AND CAPITAL RESOURCESThe information contained in “Item 5. Operating and Financial Review and Prospects – A. Operating Results – Liquidity and Capital Resources” isincorporated herein by reference.C. RESEARCH AND DEVELOPMENT, PATENTS AND LICENSES, ETC.The discussions of our research and development activities were contained in “Item 4. Information about our Company – B. Business Overview –Research and Development” and “Item 5. Operating and Financial Review and Prospects – A. Operating Results – Operating Expenses – Research and DevelopmentExpenses” are incorporated herein by reference. In the years ended December 31, 2017 and 2016, we spent $1,046,198 and $2,882,202, respectively, on research anddevelopment activities.D. TREND INFORMATION.Industry and Market OutlookChina has awarded licenses to mobile phone companies to provide the superfast 4G network to customers. The licenses, which are designed to give mobilephone users faster access to services, were granted by the government to China Mobile, China Unicom Hong Kong and China Telecom. Since the grants, ChinaMobile has offered 4G to subscribers from December 18, 2013. China Unicom and China Telecom, the country's other two major carriers, also offer 4G wireless. Thenumber of China Mobile 4G customers has exceeded 900 million by the end of October in 2017. The move greatly bolstered business for telecom equipment makersand a range of other companies.Under China’s 12th FiveYear Plan, a key priority is for China to transition from “Made in China” to “Designed in China.” In order to achieve this goal, thegovernment plans to heavily invest in science and technology education and R&D so as to further develop China’s intellectual property rights system and support“NextGeneration IT” as a Strategic Emerging Industry (SEI). Additionally, China plans to upgrade the technological capabilities of private and public services,including “triple play” services (the convergence of telecom, broadcasting and Internet networks), ecommerce, and egovernment and statistics systems.Furthermore, the government plans to invest in R&D of the "Internet of things" and cloud computing, and develop digital and virtual technologies.E. OFFBALANCE SHEET ARRANGEMENTSWe have not entered into any financial guarantees or other commitments to guarantee the payment obligations of any third parties. We have not enteredinto any derivative contracts that are indexed to our shares and classified as shareholder’s equity, or that are not reflected in our consolidated financial statements.Furthermore, except for the mortgage referenced above, we do not have any retained or contingent interest in assets transferred to an unconsolidated entity thatserves as credit, liquidity or market risk support to such entity. We do not have any variable interest in any unconsolidated entity that provides financing, liquidity,market risk or credit support to us or engages in leasing, hedging or research and development services with us.35F. TABULAR DISCLOSURE OF CONTRACTUAL OBLIGATIONSAs of December 31, 2017, we did not have any contractual obligations required to be disclosed in this Item 5.F. ITEM 6. DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES.A. DIRECTORS AND SENIOR MANAGEMENT.Executive Officers and DirectorsThe following table sets forth the names and ages as of the date of this transition report of each of our executive officers and directors:NameAgePositionXuesong Song50Chief Executive Officer, Chairman and DirectorDongpu Zhang50PresidentJie Yu34Chief Financial OfficerKegang Peng46Vice President and DirectorChuang Tao51DirectorDennis Galgano (1)(2)69Director (Independent)Jin Shi (1)(2)49Director (Independent)Jiming Ha (1)(3)56Director (Independent)Zhihao Xu (3)42Director (Independent)(1)Member of the Audit Committee.(2)Member of the Compensation Committee.(3)Member of the Nominating and Corporate Governance Committee.Set forth below is biographical information concerning our executive officers and directors.Xuesong Song is a cofounder of C Media Limited and served as its chairman of the board of directors and chief executive officer from 2012 until theconsummation of the AEA. From February 2014 through April 2017, Mr. Song served as a director of Seven Stars Cloud Group, Inc. (NASDAQ: SSC) and fromJanuary 2013 through February 2015, Mr. Song served as a director of Pingtan Marine Enterprise Ltd. (NASDAQ: PME). From May 2006 through January 2009, Mr.Song served as the Chairman of the Board of ChinaGrowth North Acquisition Corporation, a special purpose acquisition company, which acquired UIB GroupLimited in January 2009, in which he remains a director. Mr. Song has been a principal of Chum Capital Group Limited since August 2001, a merchant banking firmthat invests in growth Chinese companies and advises them in financings, mergers & acquisitions and restructurings, and chief executive officer of Beijing ChumInvestment Co., Ltd. since December 2001. Mr. Song has been a director of Mobile Vision Communication Ltd. since July 2004. Mr. Song received a Master’s ofBusiness Administration degree from Oklahoma City/Tianjin Program.Dongpu Zhang was appointed as the President of the Company effective on August 25, 2018. Mr. Dongpu Zhang has served as the General Manager ofSuperEngine Graphics Software Technology Development (Suzhou) Co., Ltd. (“SuperEngine Suzou”) and the Chief Executive Officer of SuperEngine HoldingLimited since September 2016. From February, 2014 to August, 2016, Mr. Zhang served as vice president of Industrial Development Group under China Fortune LandDevelopment Co., Ltd. From March, 2009 to February, 2014, Mr. Zhang served as the vice president of Aerospace Science and Technology Holding Group Co., Ltd.Mr. Zhang receive his Master Degree of Computer Science from Harbin Institute of Technology in 1994 and his Bachelor Degree of information system fromChangsha Institute of technology in 1991.Jie Yu served as the chief financial officer of C Media Limited from January 2018 until the consummation of the asset exchange transactions. From June 2016to January 2018, Mr. Yu served as chief financial officer and secretary of the board of directors of MTI Environment Group Limited. Prior to joining MTI, Mr. Yuserved as the senior manager at DA HUA CPA from November 2012 to May 2016. Previously, Mr. Yu served as the manager at Crowe Horwath (Hong Kong) CPA.Mr. Yu holds a bachelor degree in accounting and finance from University of Auckland and postgraduate diploma in accounting from University of Auckland.36Kegang Peng served as the Vice Chairman of the board of directors C Media Limited from October 2014 to the consummation of the asset exchangetransactions, and is now a member of the Company’s board of directors. Previously, from 2012 to 2014, Mr. Peng was chairman of the board and founder of JiangsuSuqian Jinghaiboyuan Information and Technology Co., Ltd. Mr. Peng studied at Beijing University of Aeronautics and Astronautics majoring computer andapplication.20F 1 f20f2017_luokungtech.htm AMENDMENT NO. 1 TO FORM 20FUNITED STATESSECURITIES AND EXCHANGE COMMISSIONWASHINGTON, D.C. 20549FORM 20F☐ REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934OR☐ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934For the Fiscal year ended _____________OR☒ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934For the transition period from October 1, 2017 to December 31, 2017☐ SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934Date of event requiring this shell company report Commission file number: 00134738Luokung Technology Corp.(Exact name of Registrant as specified in its charter)Not applicable(Translation of Registrant’s name into English)British Virgin IslandsLAB 32, SOHO 3Q, No 9, Guanghua Road, Chaoyang District, BeijingPeople’s Republic of China, 100020(Jurisdiction of incorporation or organization)(Address of principal executive offices)Mr. Muqiao GengLAB32, SOHO 3Q, No 9, Guanghua Road, Chaoyang District, BeijingPeople’s Republic of China 100020Tel: (86) 1085866721(Name, telephone, Email and/or facsimile number and address of company contact person)Securities registered or to be registered pursuant to Section 12(b) of the Act:Title of each className of each exchange on which registeredOrdinary shares, par value $0.01 per shareNonePreferred shares, par value $0.01 per shareNoneSecurities registered or to be registered pursuant to Section 12(g) of the Act:none(Title of Class)Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act:none(Title of Class)Indicate the number of outstanding shares of each of the issuer’s classes of capital or common stock as of the close of the period covered by the transitionreport. 187,097,599 Ordinary Shares, including 186,383,224 Ordinary Shares represented by 714,375 American Depositary Shares, and 1,000,000 Preferred Sharesoutstanding as of September 20, 2018.Indicate by check mark if the registrant is a wellknown seasoned issuer, as defined in Rule 405 of the Securities Act. ☐ Yes ☒ NoIf this report is an annual or transition report, indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of theSecurities Exchange Act of 1934. ☐ Yes ☒ NoIndicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirementsfor the past 90 days. ☒ Yes ☐ NoIndicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File requiredto be submitted and posted pursuant to Rule 405 of Regulation ST (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that theregistrant was required to submit and post such files). ☒ Yes ☐ NoIndicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a nonaccelerated filer. See definition of “accelerated filer andlarge accelerated filer” in Rule 12b2 of the Exchange Act. (Check one):Large accelerated filer ☐ Accelerated filer ☐ Nonaccelerated filer ☒Indicate by check mark which basis of accounting the registrant has used to prepare the financial statements included in this filing.U.S. GAAP ☒International Financial Reporting Standards as issuedby the International Accounting Standards Board ☐Other ☐If “Other” has been checked in response to the previous question, indicate by check mark which financial statement item the registrant has elected tofollow. Item 17 ☐ Item 18 ☐If this is an transition report, indicate by check mark whether the registrant is a shell company (as defined in Rule 12b2 of the ExchangeAct). ☐ Yes ☒ NoExplanatory NoteLuokung Technology Corp. (the “Company”) is filing this transition report on Form 20F (“Transition Report”) in connection with the completion of theexchange of certain of its assets for substantially all of the assets of C Media Limited (“C Media”) pursuant to that Asset Exchange Agreement, dated January 25,2018 (the “Original AEA”), as supplemented by the Addendum to Asset Exchange Agreement, dated October 3, 2018 (the “Addendum” and together with theOriginal AEA, the “AEA”). Following the consummation of the AEA, on October 4, 2018, the Company changed its fiscal year end from September 30 to the fiscalyear end used by C Media, December 31. This Transition Report covers the threemonth period from Octorber 1, 2017 to December 31, 2017, and the fiscal yearsdescribed herein.In this transition report:●References to the “Company”, “we”, “our” and “us” are to Luokung Technology Corp. and its consolidated subsidiaries and variable interestentity, except as the context otherwise requires;●This transition report on Form 20F covers the threemonth period from October 1, 2017 through December 31, 2017 (the “Transition Period”) andreflects our financial results thereof. Prior to this transition report on Form 20F, our two most recent annual reports on Form 20F cover the fiscalyears ended September 30, 2017 and September 30, 2016, respectively, and reflect financial results for the respective twelvemonth periods fromOctober 1 to September 30. Unless otherwise noted, all references to years are to the calendar year from January 1 to December 31 and referencesto our fiscal year or years are to the fiscal year or years which, prior to the Transition Period, ended September 30, while from and after theTransition Period, ended December 31;●References to an “ADS” are to an American Depositary Share, each of which represents one of our Ordinary Shares with a par value of $.01 pershare.Special Note Regarding Forwardlooking StatementsThis transition report contains forwardlooking statements that involve risks and uncertainties. These statements involve known and unknown risks,uncertainties and other factors that may cause our actual results, performance or achievements to be materially different from those expressed or implied by theforwardlooking statements.You can identify these forwardlooking statements by words or phrases such as “may,” “will,” “expect,” “anticipate,” “aim,” “estimate,” “intend,” “plan,”“believe,” “likely to” or other similar expressions. We have based these forwardlooking statements largely on our current expectations and projections about futureevents and financial trends that we believe may affect our financial condition, results of operations, business strategy and financial needs. You should not placeundue reliance on these forwardlooking statements, which apply only as of the date of this transition report. These forwardlooking statements include:●our future business development, results of operations and financial condition;●expected changes in our net revenues and certain cost or expense items;●our ability to attract and retain customers; and●trends and competition in the enterprise mobile software application market.You should read this transition report thoroughly with the understanding that our actual future results may be materially different from, and/or worse, thanwhat we expect. We qualify all of our forwardlooking statements by these cautionary statements. Other sections of this transition report include additional factorswhich could adversely impact our business and financial performance. Moreover, we operate in an evolving environment. New risk factors and uncertainties emergefrom time to time and it is not possible for our management to predict all risk factors and uncertainties, nor can we assess the impact of all factors on our business orthe extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forwardlooking statements.This transition report also contains estimates, projections and statistical data related to the market for the provision of WiFi and mobile applications inChina. This market data, including data from IDC, a leading provider of market data and intelligence, speaks as of the date it was published and includes projectionsthat are based on a number of assumptions and are not representations of fact. The market for the provision of WiFi and mobile applications in China may not growat the rates projected by the market data, or at all. The failure of the market to grow at the projected rates may materially and adversely affect our business and themarket price of our ADSs. In addition, the rapidly changing nature of the market for the provision of WiFi and mobile applications subjects any projections orestimates relating to the growth prospects or future condition of our market to significant uncertainties. If any one or more of the assumptions underlying the marketdata proves to be incorrect, actual results may differ from the projections based on these assumptions.You should not rely upon forwardlooking statements as predictions of future events. We undertake no obligation to update or revise any forwardlookingstatements, whether as a result of new information, future events or otherwise.TABLE OF CONTENTSPart IItem 1.Identity of Directors, Senior Management and Advisers.1Item 2.Offer Statistics and Expected Timetable.1Item 3.Key Information.1A.Selected Financial Data.1B.Capitalization and Indebtedness.3C.Reasons for the Offer and Use of Proceeds.3D.Risk Factors.3Item 4.Information on the Company.19A.History and Development of the Company.19B.Business Overview.20C.Organizational Structure.30D.Property, Plants and Equipment.32Item 4A.Unresolved Staff Comments.32Item 5.Operating and Financial Review and Prospects.32A.Operating Results.32B.Liquidity and Capital Resources.35C.Research and Development, Patents and Licenses, etc.35D.Trend Information.35E.Offbalance Sheet Arrangements.35F.Tabular Disclosure of Contractual Obligations.36Item 6.Directors, Senior Management and Employees.36A.Directors and Senior Management.36B.Compensation.37C.Board Practices.40D.Employees.43E.Share Ownership.43Item 7.Major Shareholders and Related Party Transactions.44A.Major Shareholders.44B.Related Party Transactions.45C.Interests of Experts and Counsel.45Item 8.Financial Information.45A.Consolidated Statements and Other Financial Information.45B.Significant Changes.46Item 9.The Offer and Listing.46A.Offer and Listing Details.46B.Plan of Distribution.47C.Markets.47D.Selling shareholders.48E.Dilution.48F.Expenses of the issue.48Item 10.Additional Information.48A.Share Capital.48B.Memorandum and Articles of Association.48C.Material Contracts.53D.Exchange Controls.54E.Taxation.61F.Dividends and Paying Agents.67G.Statement by Experts.67H.Documents on Display.67I.Subsidiary Information.68Item 11.Quantitative and Qualitative Disclosures about Market Risk.68Item 12.Description of Securities Other than Equity Securities.69A.Debt Securities.69B.Warrants and Rights.69C.Other Securities.69D.American Depositary Shares.69iPart IIItem 13.Defaults, Dividend Arrearages and Delinquencies.71Item 14.Material Modifications to the Rights of Security Holders and Use of Proceeds.71Item 15.Controls and Procedures.71Item 16.[Reserved.]72Item 16A.Audit Committee Financial Expert.72Item 16B.Code of Ethics.73Item 16C.Principal Accountant Fees and Services.73Item 16D.Exemptions from the Listing Standards for Audit Committees.73Item 16E.Purchases of Equity Securities by the Issuer and Affiliated Purchasers.73Item 16F.Change in Registrant’s Certifying Accountant.73Item 16G.Corporate Governance.73Item 16H.Mine Safety Disclosure.73Part IIIItem 17.Financial Statements.74Item 18.Financial Statements.74Item 19.Exhibits.74Index to Consolidated Financial StatementsF1iiPART IITEM 1. IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS.The directors of Luokung Technology Corp. are Xuesong Song, Kegang Peng, Dennis Galgano, Jin Shi, Jiming Ha, Zhihao Xu and Chuang Tao. Thebusiness address for our directors is LAB 32, SOHO 3Q, No 9, Guanghua Road, Chaoyang District, Beijing, People’s Republic of China.Moore Stephens CPA Limited has served as our auditor since October 5, 2018, and is located at 801806 Silvercord Tower 1, 30 Canton road, Tsimshatsui,Kowloon, Hong Kong. BDO China Shun Lun Pan Certified Public Accountants LLP served as our auditors for the last three years, and are located at 4F, No. 61Nanjing Road, Shanghai, People’s Republic of China.Garvey Schubert Barer, P.C., serves as our legal counsel in the United States, and is located at Flour Mill Building, 1000 Potomac Street NW, Suite 200,Washington, D.C., 200073501.Conyers Dill & Pearlman serves as our legal counsel with regard to the laws of the British Virgin Islands, and is located at 29th Floor, One Exchange Square,8 Connaught Place, Central, Hong Kong.ITEM 2. OFFER STATISTICS AND EXPECTED TIMETABLE.Not applicable.ITEM 3. KEY INFORMATION.A. SELECTED FINANCIAL DATA.Luokung Technology Corp. and its consolidated subsidiaries (“Luokung Technology”, “we”, “us”, or “the Company”) consummated an asset exchangeagreement pursuant to which we exchanged our existing assets with those of C Media Limited (the “Asset Exchange”) on August 17, 2018, and we changed ourname from Kingtone Wirelessinfo Solution Holding Ltd. to our current name on August 20, 2018. On October 4, 2018, in connection with the consummation of the Asset Exchange, we changed our fiscal year end from September 30 to December 31.1The selected financial data for the fiscal years ended December 31 2017 and 2016 have been derived from our audited consolidated and combined financialstatements. The selected consolidated and combined financial data should be read in conjunction with our audited financial statements and the accompanying notesand “Item 5 – Operating and Financial Review and Prospects.” Our consolidated and combined financial statements are prepared and presented in accordance withUnited States generally accepted accounting principles, or U.S. GAAP. Our historical results do not necessarily indicate our results expected for any future periods.You should not view our historical results as an indicator of our future performance.LK TECHNOLOGY LTD. AND SUBSIDIARIESSELECTED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS(IN U.S. DOLLARS)For the years ended December 31,20172016Revenues$26,082,417$5,233,145Less: Cost of revenues5,547,7796,315,504Less: Operating expenses:Selling and marketing23,908,7336,209,804General and administrative2,451,2492,108,854Research and development1,046,1982,882,202Total operating expenses27,406,18011,200,860Loss from operations(6,871,542)(12,283,219)Other income (expense):Interest expense(26,611)(4,412)Foreign exchange gains(losses)350,679(298,257)Loss from investment(428,571)Other income (expense), net(262,980)(34,572)Total other income (expense), net61,088(765,812)Loss before income taxes(6,810,454)(13,049,031)Income taxesNet loss$(6,810,454)$(13,049,031)Other comprehensive income:Foreign currency translation adjustment90,671387,375Total comprehensive loss$(6,719,783)$(12,661,656)2LK TECHNOLOGY LTD. AND SUBSIDIARIESSELECTED CONSOLIDATED BALANCE SHEETS(IN U.S. DOLLARS)As of December 31,20172016Accounts receivable, net of allowance for doubtful accounts9,729,6251,865,836Amounts due from related parties11,760,692Property and equipment, net5,044,8727,771,027Goodwill7,239,9367,239,936TOTAL ASSETS37,582,85821,114,832Accounts payable8,784,5186,446,584Accrued liabilities and other payables12,962,91211,329,613Total liabilities25,311,11333,905,520Total Shareholder’s Equity (Deficit)12,271,745(12,790,688)TOTAL LIABILITIES AND SHAREHOLDER’S EQUITY (DEFICIT)37,582,85821,114,832B. CAPITALIZATION AND INDEBTEDNESS.Not applicable.C. REASONS FOR THE OFFER AND USE OF PROCEEDS.Not applicable.D. RISK FACTORS.An investment in our ADSs and ordinary shares involves a high degree of risk. You should carefully consider the risks and uncertainties described belowtogether with all other information contained in this transition report, including the matters discussed under “Special Note Regarding ForwardLooking Statements,”before you decide to invest in our ADSs or ordinary shares. You should pay particular attention to the fact that we are a holding company with substantialoperations in China and are subject to legal and regulatory environments that in many respects differ from those of the United States. If any of the following risks, orany other risks and uncertainties that are not presently foreseeable to us, actually occur, our business, financial condition, results of operations, liquidity and ourfuture growth prospects would be materially and adversely affected. You should also consider all other information contained in this transition report beforedeciding to invest in our ADSs or ordinary shares.Risks Related to Our Company and Our IndustryThe Company had incurred negative cash flows from operating activities and net losses as of December 31, 2017. These matters raise substantial doubt aboutthe Company’s ability to continue as a going concern.The Company’s consolidated financial statements are prepared using generally accepted accounting principles in the United States of America applicableto a going concern, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. As of and for the year endedDecember 31, 2017, the Company had incurred significant operating losses and working capital deficit. The ability of the Company to continue as a going concern isdependent on the Company obtaining adequate capital to fund operating losses until it becomes profitable. If the Company is unable to obtain adequate capital, itcould be forced to cease operations. The accompanying consolidated financial statements do not include any adjustments that might be necessary if the Companyis unable to continue as a going concern.3We may undertake acquisitions, investments, joint ventures or other strategic alliances, which could have a material adverse effect on our ability to manageour business. In addition, such undertakings may not be successful.Our strategy includes plans to grow both organically and through acquisitions, participation in joint ventures or other strategic alliances. Joint venturesand strategic alliances may expose us to new operational, regulatory and market risks, as well as risks associated with additional capital requirements. We may not beable, however, to identify suitable future acquisition candidates or alliance partners. Even if we identify suitable candidates or partners, we may be unable tocomplete an acquisition or alliance on terms commercially acceptable to us. If we fail to identify appropriate candidates or partners, or complete desired acquisitions,we may not be able to implement our strategies effectively or efficiently. In addition, our ability to successfully integrate acquired companies and their operations may be adversely affected by several factors. These factorsinclude:1.diversion of management’s attention;2.difficulties in retaining customers of the acquired companies;3.difficulties in retaining personnel of the acquired companies;4.entry into unfamiliar markets;5.unanticipated problems or legal liabilities; and6.tax and accounting issues.If we fail to integrate acquired companies efficiently, our earnings, revenue growth and business could be negatively affected.Due to intense competition for highlyskilled personnel, we may fail to attract and retain enough sufficiently trained employees to support our operations; ourability to bid for and obtain new projects may be negatively affected and our revenues could decline as a result.The IT industry relies on skilled employees, and our success depends to a significant extent on our ability to attract, hire, train and retain qualifiedemployees. There is significant competition in China for professionals with the skills necessary to develop the products and perform the services we offer to ourcustomers. Increased competition for these professionals, in the mobile application design area or otherwise, could have an adverse effect on us if we experiencesignificant increase in the attrition rate among employees with specialized skills, which could decrease our operating efficiency and productivity and could lead to adecline in demand for our services.In addition, our ability to serve existing customers and business partners and obtain new business will depend, in large part, on our ability to attract, trainand retain skilled personnel that enable us to keep pace with growing demands for wifi connectivity and mobile applications, evolving industry standards andchanging customer preferences. Our failure to attract, train and retain personnel with the qualifications necessary to fulfill the needs of our existing and futurecustomers or to assimilate new employees successfully could have a material adverse effect on our business, financial condition and results of operations. Ourfailure to retain our key personnel on business development or find suitable replacements of the key personnel upon their departure may lead to shrinking newimplementation projects, which could materially adversely affect our business.4Our business depends substantially on the continuing efforts of our senior executives and other key personnel, and our business may be severely disrupted if welose their services.Our future success heavily depends upon the continued services of our senior executives and other key employees, particularly since we recentlyappointed a new chairman. We are reliant on the services of Mr. Xuesong Song, our chairman, chief executive officer and member of our board of directors. If one ormore of our senior executives or key employees is unable or unwilling to continue in his or her present position, we may not be able to replace such employee easily,or at all, we may incur additional expenses to recruit, train and retain replacement personnel, our business may be severely disrupted, and our financial condition andresults of operations may be materially adversely affected.Our business could suffer if our executives and directors compete against us and our noncompetition agreements with them cannot be enforced.If any of our senior executives or key employees joins a competitor or forms a competing company, we may lose customers, knowhow and keyprofessionals and staff members to them. Also, if any of our business development managers who keep a close relationship with our customers and businesspartners joins a competitor or forms a competing company, we may lose customers, and our revenues may be materially adversely affected. Most of our executiveshave entered, or will soon enter, into employment agreements with us that contain or will contain noncompetition provisions. However, if any dispute arisesbetween our executive officers and us, such noncompetition provisions may not be enforceable, especially in China, where all of these executive officers and keyemployees reside, in light of the uncertainties with China’s legal system. See “Risk Factors — Risks Related to Doing Business in China — Uncertainties withrespect to the PRC legal system could adversely affect us.”Our computer networks may be vulnerable to security risks that could disrupt our services and adversely affect our results of operations.Our computer networks may be vulnerable to unauthorized access, computer hackers, computer viruses and other security problems caused byunauthorized access to, or improper use of, systems by third parties or employees. A hacker who circumvents security measures could misappropriate proprietaryinformation or cause interruptions or malfunctions in operations. Computer attacks or disruptions may jeopardize the security of information stored in andtransmitted through computer systems and mobile devices of our customers. Actual or perceived concerns that our systems may be vulnerable to such attacks ordisruptions may deter customers from using our services. As a result, we may be required to expend significant resources to protect against the threat of thesesecurity breaches or to alleviate problems caused by these breaches, which could adversely affect our results of operations.If we do not continually enhance our solutions and service offerings, we may have difficulty in retaining existing customers and attracting new customers.We believe that our future success will depend, to a significant extent, upon our ability to enhance our existing applications and platform, and to introducenew features to meet the preferences and requirements of our customers in a rapidly developing and evolving market. Unexpected technical, operational, distributionor other problems could delay or prevent the introduction of one or more of these products or services, or any products or services that we may plan to introduce inthe future. Our present or future products may not satisfy the evolving preferences and tastes of our customers, and these solutions and services may not achieveanticipated market acceptance or generate incremental revenue. If we are unable to anticipate or respond adequately to the need for service or productenhancements due to resource, technological or other constraints, our business, financial condition and results of operations could be materially and adverselyaffected.5If we are unable to develop competitive new products and service offerings our future results of operations could be adversely affected.Our future revenue stream depends to a large degree on our ability to utilize our technology in a way that will allow us to offer new types of mobileapplications and services to a broader customer base. We will be required to make investments in research and development in order to continually develop newsoftware applications and related service offerings, enhance our existing platform, mobile applications and related service offerings and achieve market acceptanceof our mobile applications and service offerings. We may incur problems in the future in innovating and introducing new mobile applications and service offerings.Our developmentstage mobile applications may not be successfully completed or, if developed, may not achieve significant customer acceptance. If we are unableto successfully define, develop and introduce competitive new mobile applications, and enhance existing mobile applications, our future results of operations wouldbe adversely affected. The timely availability of new applications and their acceptance by customers are important to our future success. A delay in the developmentof new applications could have a significant impact on its results of operations.Changes in technology could adversely affect our business by increasing our costs, reducing our profit margins and causing a decline in our competitiveness.China’s wireless telecom industry, in which we operate, is characterized by rapidly changing technology, evolving industry standards, frequentintroductions of new services and solutions and enhancements as well as changing customer demands. New solutions and new technologies often render existingsolutions and services obsolete, excessively costly or otherwise unmarketable. As a result, our success depends on our ability to adapt to the latest technologicalprogress, such as the 5G standard and technologies, and to develop or acquire and integrate new technologies into our platform, mobile applications and relatedservices. Advances in technology also require us to commit substantial resources to developing or acquiring and then deploying new technologies for use in ouroperations. We must continuously train personnel in new technologies and in how to integrate existing hardware and software systems with these newtechnologies. We may not be able to adapt quickly to new technologies or commit sufficient resources to compete successfully against existing or new competitorsin bringing to market solutions and services that incorporate these new technologies. We may incur problems in the future in innovating and introducing new mobileapplications and service offerings. Our development of new mobile applications and platform enhancements may not be successfully completed or, if developed,may not achieve significant customer acceptance. If we fail to adapt to changes in technologies and compete successfully against established or new competitors,our business, financial condition and results of operations could be adversely affected.Problems with the quality or performance of our hardware, software or other systems may cause delays in the introduction of new solutions or result in the lossof customers and revenues, which could have a material and adverse effect on our business, financial condition and results of operations.Our hardware and software systems are complex and may contain defects, errors or bugs when first introduced to the market or to a particular customer, oras new versions are released. Because we cannot test for all possible scenarios, our systems may contain errors that are not discovered until after they have beeninstalled or implemented, and we may not be able to timely correct these problems. These defects, errors or bugs could interrupt or delay the completion of projectsor sales to our customers. In addition, our reputation may be damaged and we may fail to acquire new projects from existing customers or new customers. Errors mayoccur when we provide systems integration and maintenance services. Even in cases where we have agreements with our customers that contain provisionsdesigned to limit our exposure to potential claims and liabilities arising from customer problems, these provisions may not effectively protect us against such claimsin all cases and in all jurisdictions. In addition, as a result of business and other considerations, we may undertake to compensate our customers for damages arisingfrom the use of our solutions, even if our liability is limited by these provisions. Moreover, claims and liabilities arising from customer problems could also result inadverse publicity and materially and adversely affect our business, results of operations and financial condition. We currently do not carry any product or serviceliability insurance and any imposition of liability on us may materially and adversely affect our business and increase our costs, resulting in reduced revenues andprofitability.Our products may contain undetected software defects, which could negatively affect our revenues.Our software products are complex and may contain undetected defects. Although we test our products, it is possible that errors may be found or occur inour new or existing products after we have commenced commercial shipment of those products. Defects, whether actual or perceived, could result in adversepublicity, loss of revenues, product returns, a delay in market acceptance of our products, loss of competitive position or claims against us by customers. Any suchproblems could be costly to remedy and could cause interruptions, delays, or cessation of our product sales, which could cause us to lose existing or prospectivecustomers and could negatively affect our results of operations.6We may be subject to infringement, misappropriation and indemnity claims in the future, which may cause us to incur significant expenses, pay substantialdamages and be prevented from providing our services or technologies.Our success depends, in part, on our ability to carry out our business without infringing the intellectual property rights of third parties. Patent andcopyright law covering softwarerelated technologies is evolving rapidly and is subject to a great deal of uncertainty. Our selfdeveloped or licensed technologies,processes or methods may be covered by thirdparty patents or copyrights, either now existing or to be issued in the future. Any potential litigation may cause us toincur significant expenses. Thirdparty claims, if successfully asserted against us may cause us to pay substantial damages, seek licenses from third parties, payongoing royalties, redesign our services or technologies, or prevent us from providing services or technologies subject to these claims. Even if we were to prevail,any litigation would likely be costly and timeconsuming and divert the attention of our management and key personnel from our business operations.Our failure to protect our intellectual property rights may undermine our competitive position, and subject us to costly litigation to protect our intellectualproperty rights.Any misappropriation of our technology or the development of competitive technology could seriously harm our business. We regard a substantial portionof our hardware and software systems as proprietary and rely on statutory copyright, trademark, patent, trade secret laws, customer license agreements, employeeand thirdparty nondisclosure agreements and other methods to protect our proprietary rights. Nevertheless, these resources afford only limited protection and theactions we take to protect our intellectual property rights may not be adequate. In particular, third parties may infringe or misappropriate our proprietarytechnologies or other intellectual property rights, which could have a material adverse effect on our business, financial condition and results of operations. Inaddition, intellectual property rights and confidentiality protection in China may not be as effective as in the United States, and policing unauthorized use ofproprietary technology can be difficult and expensive. Further, litigation may be necessary to enforce our intellectual property rights, protect our trade secrets ordetermine the validity and scope of the proprietary rights of others. The outcome of any such litigation may not be in our favor. Any such litigation may be costlyand may divert management attention, as well as our other resources, away from our business. An adverse determination in any such litigation will impair ourintellectual property rights and may harm our business, prospects and reputation. In addition, we have no insurance coverage against litigation costs and wouldhave to bear all litigation costs in excess of the amount recoverable from other parties. The occurrence of any of the foregoing could have a material adverse effecton our business, financial condition and results of operations. Our solutions incorporate a portion of, and work in conjunction with, thirdparty hardware and software solutions. If these thirdparty hardware or softwaresolutions are not available to us at reasonable costs, or at all, our results of operations could be adversely impacted.Although our hardware and software systems and mobile applications primarily rely on our own core technologies, some elements of our systemsincorporate a small portion of thirdparty hardware and software solutions. If any third party were to discontinue making their intellectual property available to us orour customers on a timely basis, or increase materially the cost of their licensing such intellectual property, or if our systems or applications failed to properlyfunction or interoperate with replacement intellectual property, we may need to incur costs in finding replacement thirdparty solutions and/or redesigning oursystems or applications to replace or function with or on replacement thirdparty proprietary technology. Replacement technology may not be available on termsacceptable to us or at all, and we may be unable to develop alternative solutions or redesign our systems or applications on a timely basis or at a reasonable cost. Ifany of these were to occur, our results of operations could be adversely impacted.7Our ability to sell our products is highly dependent on the quality of our service and support offerings, and our failure to offer high quality service could have amaterial adverse effect on our ability to market and sell our products.Our customers depend upon our customer service and support staff to resolve issues relating to our products. Highquality support services are critical forthe successful marketing and sale of our products. If we fail to provide highquality support on an ongoing basis, our customers may react negatively and we maybe materially and adversely affected in our ability to sell additional products to these customers. This could also damage our reputation and prospects with potentialcustomers. Our failure to maintain highquality support services could have a material and adverse effect on our business, results of operations and financialcondition.Weaknesses in our internal controls over financial reporting or disclosure controls and procedures may have a material adverse effect on our business, theprice of our ordinary shares, operating results and financial condition.We are required to establish and maintain appropriate internal controls over financial reporting and disclosure controls and procedures. Pursuant to Section404 of the SarbanesOxley Act of 2002 and the related rules adopted by the Securities and Exchange Commission, every public company is required to include amanagement report on its internal controls over financial reporting in its transition report, which contains management’s assessment of the effectiveness of thecompany’s internal controls over financial reporting. This requirement first applied to our annual report on Form 20F for the fiscal year ended on September 30,2011. In connection with our assessments of our disclosure controls and procedures and internal controls over financial reporting, management concluded that as ofSeptember 30, 2018, our disclosure controls and procedures and our internal controls over financial reporting were not effective due to lack of U.S. generallyaccepted accounting principles (“U.S. GAAP”) expertise in our current accounting team. Please refer to the discussion under Item 15, “Controls and Procedures” forfurther discussion of our material weakness as of December 31, 2017. Should we be unable to remediate the material weakness promptly and effectively, suchweakness could harm our operating results, result in a material misstatement of our financial statements, cause us to fail to meet our financial reporting obligations orprevent us from providing reliable and accurate financial reports or avoiding or detecting fraud. This, in turn, could result in a loss of investor confidence in theaccuracy and completeness of our financial reports, which could have an adverse effect on the trading price of our ordinary shares. Any litigation or otherproceeding or adverse publicity relating to the material weaknesses could have a material adverse effect on our business and operating results. We have very limited insurance coverage which could expose us to significant costs and business disruption.We do not maintain any insurance coverage for our leased properties. Should any natural catastrophes such as earthquakes, floods, typhoons or any actsof terrorism occur in Beijing, China, where our head office is located and most of our employees are based, or elsewhere in China, we might suffer not onlysignificant property damages, but also loss of revenues due to interruptions in our business operations, which could have a material adverse effect on our business,operating results or financial condition.The insurance industry in China is still at an early stage of development. Insurance companies in China offer limited business insurance products, and donot, to our knowledge, offer business liability insurance. As a result, we do not have any business liability insurance coverage for our operations. Moreover, whilebusiness disruption insurance is available, we have determined that the risks of disruption and cost of the insurance are such that we do not require it at this time.Any business disruption, litigation or natural disaster might result in substantial costs and diversion of resources, particularly if it affects our technology platformswhich we depend on for delivery of our software and services, and could have a material adverse effect on our financial condition and results of operations.We may be liable to our customers for damages caused by unauthorized disclosure of sensitive and confidential information, whether through our employees orotherwise.We are typically required to manage, utilize and store sensitive or confidential customer data in connection with the products and services we provide.Under the terms of our customer contracts, we are required to keep such information strictly confidential. We seek to implement specific measures to protectsensitive and confidential customer data. We require our employees to enter into nondisclosure agreements to limit such employees’ access to, and distribution of,our customers’ sensitive and confidential information and our own trade secrets. We can give no assurance that the steps taken by us in this regard will be adequateto protect our customers’ confidential information. If our customers’ proprietary rights are misappropriated by our employees, in violation of any applicableconfidentiality agreements or otherwise, our customers may consider us liable for that act and seek damages and compensation from us. However, we currently donot have any insurance coverage for mismanagement or misappropriation of such information by our employees. Any litigation with respect to unauthorizeddisclosure of sensitive and confidential information might result in substantial costs and diversion of resources and management attention.8We may face intellectual property infringement claims that could be timeconsuming and costly to defend. If we fail to defend ourselves against such claims, wemay lose significant intellectual property rights and may be unable to continue providing our existing products and services.It is critical that we use and develop our technology and products without infringing upon the intellectual property rights of third parties, includingpatents, copyrights, trade secrets and trademarks. Intellectual property litigation is expensive and timeconsuming and could divert management’s attention from ourbusiness. A successful infringement claim against us, whether with or without merit, could, among others things, require us to pay substantial damages, developnoninfringing technology, or rebrand our name or enter into royalty or license agreements that may not be available on acceptable terms, if at all, and cease making,licensing or using products that have infringed a third party’s intellectual property rights. Protracted litigation could also result in existing or potential customersdeferring or limiting their purchase or use of our products until resolution of such litigation, or could require us to indemnify our customers against infringementclaims in certain instances. Also, we may be unaware of intellectual property registrations or applications relating to our services that may give rise to potentialinfringement claims against us. Parties making infringement claims may be able to obtain an injunction to prevent us from delivering our services or usingtechnology containing the allegedly infringing intellectual property. Any intellectual property litigation could have a material adverse effect on our business, resultsof operations or financial condition. Seasonality and fluctuations in our customers’ spending cycle and other factors can cause our revenues and operating results to vary significantly from quarterto quarter and from year to year.Our revenues and operating results will vary significantly from quarter to quarter and from year to year due to a number of factors, many of which areoutside of our control. Our new lines of business acquired upon the consummation of the asset exchange transaction discussed below see higher customer use andactivity during the Chinese New Year holiday than other times during the year when rail travel is high, which lead to higher revenue during this period as morecustomers would like to place more advertising. Due to these and other factors, our operating results may fluctuate significantly from quarter to quarter and fromyear to year. These fluctuations are likely to continue in the future, and operating results for any period may not be indicative of our future performance in any futureperiod.Our corporate actions are substantially controlled by our principal shareholders, who can cause us to take actions in ways you may not agree with.Mr. Xuesong Song, our chairman, chief executive officer and a member of our board of directors, beneficially owns 19.31% of our outstanding ordinaryshares and 1,000,000 preferred shares, and each preferred share has the right to 399 votes at a meeting of the members of the Company. Our officers and directors asa group beneficially own an aggregate of approximately 33.69% of our outstanding ordinary shares. These shareholders, acting individually or as a group, couldexert control and substantial influence over matters such as electing directors, amending our constitutional documents, and approving acquisitions, mergers or otherbusiness combination transactions. This concentration of ownership and voting power may also discourage, delay or prevent a change in control of our company,which could deprive our shareholders of an opportunity to receive a premium for their shares as part of a sale of our company and might reduce the price of ourshares. Alternatively, our controlling shareholders may cause a merger, consolidation or change of control transaction even if it is opposed by our othershareholders, including those who purchase shares in this offering.9We depend on a small number of customers to derive a significant portion of our revenues. If we were to become dependent again upon a few customers, suchdependency could negatively impact our business, operating results and financial condition.We derived a material portion of our revenues from a small number of customers. In the years ended December 31, 2017 and 2016, our five largestcustomers accounted for 99.8% and 78.5% of our total sales, respectively, and our largest customer Guangdong Zhanshi Media Advertising Co., Ltd. accounted forapproximately 80.8% of our total sales during for the fiscal year ended December 31, 2017. As our customer base may change from yeartoyear, during such yearsthat the customer base is highly concentrated, the fluctuation of our sales to any of such major customers could have a material adverse effect on our business,operating results and financial condition. Moreover, our high customer base concentration may also adversely affect our ability to negotiate contract prices withthese customers, which may in turn materially and adversely affect our results of operations.Our historical outstanding accounts receivable have been relatively high. Inability to collect our accounts receivable on a timely basis, if at all, couldmaterially and adversely affect our financial condition, liquidity and results of operations.Historically, our outstanding accounts receivable have been relatively high. As of December 31, 2017 and 2016, our outstanding accounts receivable beforeimpairment were $10.4 million and $2.10 million, respectively. Although we conduct credit evaluations of our customers, we generally do not require collateral orother security from our customers. In addition, we have had a relatively high customer concentration. The outstanding accounts receivable balance for our largestcustomer was 45.3% and 38.5% of our total accounts receivable balance as of December 31, 2017 and 2016, respectively. As a result, an extended delay or default inpayment relating to a significant account would likely have a material and adverse effect on the aging schedule and turnover days of our accounts receivable. Ourinability to collect our accounts receivable on a timely basis, if at all, could materially and adversely affect our financial condition, liquidity and results of operations.Risks Related to Doing Business in ChinaAdverse changes in political and economic policies of the PRC government could have a material adverse effect on the overall economic growth of China,which could reduce the demand for our services and materially and adversely affect our competitive position.Substantially all of our business operations are conducted in China. Accordingly, our business, results of operations, financial condition and prospects aresubject to a significant degree to economic, political and legal developments in China. Although the Chinese economy is no longer a planned economy, the PRCgovernment continues to exercise significant control over China’s economic growth through direct allocation of resources, monetary and tax policies, and a host ofother government policies such as those that encourage or restrict investment in certain industries by foreign investors, control the exchange between RMB andforeign currencies, and regulate the growth of the general or specific market. These government involvements have been instrumental in China’s significant growthin the past 30 years. The reorganization of the telecommunications industry encouraged by the PRC government has directly affected our industry and our growthprospect. In response to the recent global and Chinese economic downturn, the PRC government has adopted policy measures aimed at stimulating the economicgrowth in China. If the PRC government’s current or future policies fail to help the Chinese economy achieve further growth or if any aspect of the PRCgovernment’s policies limits the growth of the telecommunications industry in China or our industry or otherwise negatively affects our business, our growth rate orstrategy, our results of operations could be adversely affected as a result. Our business benefits from certain government tax incentives. Expiration, reduction or discontinuation of, or changes to, these incentives will increase our taxburden and reduce our net income.Under the PRC Enterprise Income Tax Law passed in 2007 and the implementing rules, both of which became effective on January 1, 2008, or the New EITLaw, a unified enterprise income tax rate of 25% and unified tax deduction standard is applied equally to both domesticinvested enterprises and foreigninvestedenterprises, or FIEs. Enterprises established prior to March 16, 2007 eligible for preferential tax treatment in accordance with the then tax laws and administrativeregulations shall gradually become subject to the New EIT Law rate over a fiveyear transition period starting from the date of effectiveness of the New EIT Law.However, certain qualifying hightechnology enterprises may still benefit from a preferential tax rate of 15% if they own their core intellectual properties and they areenterprises in certain Statesupported hightech industries to be later specified by the government. As a result, if our PRC subsidiaries qualify as “hightechnologyenterprises,” they will continue to benefit from the preferential tax rate of 15%, subject to transitional rules implemented from January 1, 2008. Our subsidiary, BeijingZhong Chuan Shi Xun Technology Limited, is qualified as a “hightechnology enterprise” until the end of the November 2018, and therefore it had benefited fromthe preferential tax rate of 15%, subject to transitional rules implemented on January 1, 2008. Although we intend to apply for a renewal of this qualification, if BeijingZhong Chuan Shi Xun ceases to qualify as a “hightechnology enterprise”, or the tax authorities change their position on our preferential tax treatments in thefuture, our future tax liabilities may materially increase, which could materially and adversely affect our financial condition and results of operations.10If we were deemed a “resident enterprise” by PRC tax authorities, we could be subject to tax on our global income at the rate of 25% under the New EIT Lawand our nonPRC shareholders could be subject to certain PRC taxes.Under the New EIT Law and the implementing rules, both of which became effective January 1, 2008, an enterprise established outside of the PRC with “defacto management bodies” within the PRC may be considered a PRC “resident enterprise” and will be subject to the enterprise income tax at the rate of 25% on itsglobal income as well as PRC enterprise income tax reporting obligations. The implementing rules of the New EIT Law define “de facto management” as “substantialand overall management and control over the production and operations, personnel, accounting, and properties” of the enterprise. However, as of the date of thistransition report, no final interpretations on the implementation of the “resident enterprise” designation are available. Moreover, any such designation, when madeby PRC tax authorities, will be determined based on the facts and circumstances of individual cases. Therefore, if we were to be considered a “resident enterprise”by the PRC tax authorities, our global income would be taxable under the New EIT Law at the rate of 25% and, to the extent we were to generate a substantial amountof income outside of PRC in the future, we would be subject to additional taxes. In addition, the dividends we pay to our nonPRC enterprise shareholders and gainsderived by such shareholders or ADS or ordinary share holders from the transfer of our shares or ADSs may also be subject to PRC withholding tax at the rate up to10%, if such income were regarded as Chinasourced income.Our holding company structure may limit the payment of dividends.We have no direct business operations, other than our ownership of our subsidiaries. While we have no current intention of paying dividends, should wedecide in the future to do so, as a holding company, our ability to pay dividends and meet other obligations depends upon the receipt of dividends or otherpayments from our operating subsidiaries and other holdings and investments. Current PRC regulations permit our PRC subsidiaries to pay dividends to us only outof their accumulated profits, if any, determined in accordance with Chinese accounting standards and regulations. In addition, each of our subsidiaries in China isrequired to set aside at least 10% of its aftertax profits each year, if any, to fund a statutory reserve until such reserve reaches 50% of its registered capital. Thesereserves are not distributable as cash dividends. Furthermore, if our subsidiaries in China incur debt on their own behalf in the future, the instruments governing thedebt may restrict their ability to pay dividends or make other payments to us. As a result, there may be limitations on the ability of our PRC subsidiaries to paydividends or make other investments or acquisitions that could be beneficial to our business or otherwise fund and conduct our business.In addition, under the New EIT Law and the implementing rules that became effective on January 1, 2008, dividends generated from the business of our PRCsubsidiaries after January 1, 2008 and payable to us may be subject to a withholding tax rate of 10% if the PRC tax authorities subsequently determine that we are anonresident enterprise, unless there is a tax treaty with China that provides for a different withholding arrangement.Uncertainties with respect to the PRC legal system could adversely affect us.We conduct all of our business through our subsidiaries in China. Our operations in China are governed by PRC laws and regulations. Our PRCsubsidiaries are generally subject to laws and regulations applicable to foreign investments in China and, in particular, laws and regulations applicable to whollyforeignowned enterprises. The PRC legal system is based on statutes. Prior court decisions may be cited for reference but have limited precedential value.11Since 1979, PRC legislation and regulations have significantly enhanced the protections afforded to various forms of foreign investments in China.However, China has not developed a fully integrated legal system and recently enacted laws and regulations may not sufficiently cover all aspects of economicactivities in China. In particular, because these laws and regulations are relatively new, and because of the limited volume of published decisions and theirnonbinding nature, the interpretation and enforcement of these laws and regulations involve uncertainties. In addition, the PRC legal system is based in part ongovernment policies and internal rules (some of which are not published on a timely basis or at all) that may have a retroactive effect. As a result, we may not beaware of our violation of these policies and rules until some time after the violation. In addition, any litigation in China may be protracted and result in substantialcosts and diversion of resources and management attention.PRC regulation of loans and direct investment by offshore holding companies to PRC entities may delay or prevent us from using the proceeds of our May2010 public offering to make loans or additional capital contributions to our PRC operating subsidiaries, which could materially and adversely affect ourliquidity and our ability to fund and expand our business.In utilizing the proceeds of our May 2010 public offering as an offshore holding company of our PRC operating subsidiaries, we may make loans to our PRCsubsidiaries, or we may make additional capital contributions to our PRC subsidiaries. Any loans to our PRC subsidiaries are subject to PRC regulations. Forexample, loans by us to our subsidiaries in China, which are FIEs, to finance their activities cannot exceed statutory limits and must be registered with the StateAdministration of Foreign Exchange, or SAFE. On August 29, 2008, SAFE promulgated Circular 142, a notice regulating the conversion by a foreigninvestedcompany of foreign currency into RMB by restricting how the converted RMB may be used. The notice requires that RMB converted from the foreign currencydenominated capital of a foreigninvested company may only be used for purposes within the business scope approved by the applicable governmental authorityand may not be used for equity investments within the PRC unless specifically provided for otherwise. The foreign currencydenominated capital shall be verified byan accounting firm before converting into RMB. In addition, SAFE strengthened its oversight over the flow and use of RMB funds converted from the foreigncurrencydenominated capital of a foreigninvested company. To convert such capital into RMB, the foreigninvested company must report the use of such RMB tothe bank, and the RMB must be used to the reported purposes. According to Circular 142, change of the use of such RMB without approval is prohibited. Inaddition, such RMB may not be used to repay RMB loans if the proceeds of such loans have not yet been used. Violations of Circular 142 may result in severepenalties, including substantial fines as set forth in the Foreign Exchange Administration Rules.We may also decide to finance our subsidiaries by means of capital contributions. These capital contributions may need approval from the PRC Ministry ofCommerce, or MOFCOM, or its local counterpart. We may not be able to obtain these government approvals on a timely basis, if at all, with respect to future capitalcontributions by us to our PRC subsidiaries. If we fail to receive such approvals in such cases when approval is required, our ability to use the proceeds of our May2010 public offering and to capitalize our PRC operations may be negatively affected, which could adversely affect our liquidity and our ability to fund and expandour business.Governmental control of currency conversion may affect the value of your investment.The PRC government imposes controls on the convertibility of the RMB into foreign currencies and, in certain cases, the remittance of currency out ofChina. We receive substantially all of our revenues in RMB. Under our current corporate structure, our income is primarily derived from dividend payments from ourPRC subsidiaries. Shortages in the availability of foreign currency may restrict the ability of our PRC subsidiaries to remit sufficient foreign currency to paydividends or other payments to us, or otherwise satisfy their foreign currency denominated obligations. Under existing PRC foreign exchange regulations, paymentsof current account items, including profit distributions, interest payments and expenditures from traderelated transactions, can be made in foreign currencieswithout prior approval from SAFE by complying with certain procedural requirements. However, approval from appropriate government authorities is required whereRMB is to be converted into foreign currency and remitted out of China to pay capital expenses such as the repayment of loans denominated in foreign currencies.The PRC government may also at its discretion restrict access in the future to foreign currencies for current account transactions. If the foreign exchange controlsystem prevents us from obtaining sufficient foreign currency to satisfy our currency demands, we may not be able to pay dividends in foreign currencies to ourshareholders, including holders of our ADSs or ordinary shares.12Fluctuation in the value of the RMB may have a material adverse effect on the value of your investment.The value of the RMB against the U.S. dollar and other currencies may fluctuate and is affected by, among other things, changes in political and economicconditions. On July 21, 2005, the PRC government changed its decadeold policy of pegging the value of the RMB to the U.S. dollar. Under the new policy, the RMBis permitted to fluctuate within a narrow and managed band against a basket of certain foreign currencies. This change in policy has resulted in an approximate26.8% appreciation of the RMB against the U.S. dollar between July 21, 2005 and September 30, 2015. Provisions on Administration of Foreign Exchange, asamended in August 2008, further changed China’s exchange regime to a managed floating exchange rate regime based on market supply and demand. Since reachinga high against the U.S. dollar in July 2008, however, the RMB has traded within a narrow band against the U.S. dollar, remaining within 1% of its July 2008 high butnever exceeding it. As a consequence, the RMB has fluctuated sharply since July 2008 against other freelytraded currencies, in tandem with the U.S. dollar. InAugust 2015, the PRC Government devalued its currency by approximately 3%, representing the largest yuan depreciation for 20 years. Concerns remain thatChina’s slowing economy, and in particular its exports, will need a stimulus that can only come from further cuts in the exchange rate.It is difficult to predict how long the current situation may continue and when and how it may change again as the People’s Bank of China may regularlyintervene in the foreign exchange market to achieve economic policy goals. Substantially all of our revenues and costs are denominated in the RMB, and asignificant portion of our financial assets are also denominated in RMB. We principally rely on dividends and other distributions paid to us by our subsidiaries inChina. Any significant revaluation of the RMB may materially and adversely affect our cash flows, revenues, earnings and financial position, and the value of, andany dividends payable on, our ADSs or ordinary shares in U.S. dollars. Any fluctuations of the exchange rate between the RMB and the U.S. dollar could also resultin foreign currency translation losses for financial reporting purposes.PRC laws and regulations governing our businesses. If we are found to be in violation of such PRC laws and regulations, we could be subject to sanctions. Inaddition, changes in such PRC laws and regulations may materially and adversely affect our business.There are substantial uncertainties regarding the interpretation and application of PRC laws and regulations, including, but not limited to, the laws andregulations governing our business. These laws and regulations are relatively new and may be subject to change, and their official interpretation and enforcementmay involve substantial uncertainty. The effectiveness of newly enacted laws, regulations or amendments may be delayed, resulting in detrimental reliance byforeign investors. New laws and regulations that affect existing and proposed future businesses may also be applied retroactively.The PRC government has broad discretion in dealing with violations of laws and regulations, including levying fines, revoking business and other licensesand requiring actions necessary for compliance. In particular, licenses and permits issued or granted to us by relevant governmental bodies may be revoked at a latertime by higher regulatory bodies. We cannot predict the effect of the interpretation of existing or new PRC laws or regulations on our businesses. We cannot assureyou that our current ownership and operating structure would not be found in violation of any current or future PRC laws or regulations. As a result, we may besubject to sanctions, including fines, and could be required to restructure our operations or cease to provide certain services. In addition, any litigation in China maybe protracted and result in substantial costs and diversion of resources and management attention. Any of these or similar actions could significantly disrupt ourbusiness operations or restrict us from conducting a substantial portion of our business operations, which could materially and adversely affect our business,financial condition and results of operations.13If we were required to obtain the prior approval of the China Securities Regulatory Commission, or CSRC, of the listing and trading of our ADSs on theNASDAQ Capital Market, we may face regulatory actions or other sanctions from the CSRC or other PRC regulatory agencies.On August 8, 2006, six PRC regulatory agencies, including the Ministry of Commerce, the State Assets Supervision and Administration Commission, theState Administration for Taxation, the State Administration for Industry and Commerce, the CSRC and the SAFE, jointly issued the Regulations on Mergers andAcquisitions of Domestic Enterprises by Foreign Investors, which became effective on September 8, 2006 (the “New M&A Rules”). This regulation, among otherthings, includes provisions that purport to require that an offshore special purpose vehicle formed for the purposes of overseas listing of equity interests in PRCcompanies and controlled directly or indirectly by PRC companies or individuals obtain the approval of the CSRC prior to the listing and trading of such specialpurpose vehicle’s securities on an overseas stock exchange. On September 21, 2006, the CSRC published on its official website procedures regarding its approval ofoverseas listings by special purpose vehicles. The CSRC approval procedures require the filing of a number of documents with the CSRC and it would take severalmonths to complete the approval process, if practicable at all. The application of this new PRC regulation remains unclear with no consensus currently existingamong leading PRC law firms regarding the scope of the applicability of the CSRC approval requirement. Prior to our May 2010 initial public offering, our PRC counsel has advised us that, based on its understanding of the current PRC laws and regulations aswell as the procedures announced on September 21, 2006: (i) Softech was directly incorporated by Topsky as a foreign investment enterprise under PRC law;therefore, there was no acquisition of the equity of a “PRC domestic company” as defined under the New M&A Rules; and (ii) the contractual arrangementsbetween Kingtone Information and Softech were not clearly defined and considered as the transaction which shall be applied to the New M&A Rules. Therefore, wedid not seek prior CSRC approval for our initial public offering.However, if the CSRC required that we obtain its approval prior to the completion of our initial public offering and the listing of our ADSs on the NASDAQCapital Market, we may face regulatory actions or other sanctions from the CSRC or other PRC regulatory agencies. These regulatory agencies may impose fines andpenalties on our operations in the PRC, limit our operating privileges in the PRC, delay or restrict the repatriation of the proceeds from our initial public offering intothe PRC, or take other actions that could have a material adverse effect on our business, financial condition, results of operations, reputation and prospects, as wellas the trading price of our shares.Also, if the CSRC requires that we obtain its approval, we may be unable to obtain a waiver of the CSRC approval requirements if and when procedures areestablished to obtain such a waiver. Any uncertainties and/or negative publicity regarding this CSRC approval requirement could have a material adverse effect onthe trading price of our shares.PRC regulations relating to the establishment of offshore special purpose companies by PRC residents may subject our PRC resident shareholders to penaltiesand limit our ability to inject capital into our PRC subsidiaries, limit our PRC subsidiaries’ ability to distribute profits to us, or otherwise adversely affect us.On October 21, 2005, the SAFE issued the Notice on Issues Relating to the Administration of Foreign Exchange in Fundraising and Reverse InvestmentActivities of Domestic Residents Conducted via Offshore Special Purpose Companies, or Notice 75, which became effective as of November 1, 2005. According toNotice 75, prior registration with the local SAFE branch is required for PRC residents to establish or to control an offshore company for the purposes of financingsuch offshore company with assets or equity interests in an onshore enterprise located in the PRC, or an offshore special purpose company. An amendment toregistration or filing with the local SAFE branch by such PRC resident is also required for the injection of equity interests or assets of an onshore enterprise in theoffshore special purpose company or overseas funds raised by such offshore company, or any other material change involving a change in the capital of theoffshore special purpose company. Moreover, Notice 75 applies retroactively. As a result, PRC residents who have established or acquired control of offshorespecial purpose companies that have made onshore investments in the PRC in the past are required to have completed the relevant registration procedures with thelocal SAFE branch by March 31, 2006. To further clarify the implementation of Notice 75, the SAFE issued Circular 106 on May 29, 2007. Under Circular 106, PRCsubsidiaries of an offshore special purpose company are required to coordinate and supervise the filing of SAFE registrations by the offshore holding company’sshareholders or beneficial owners who are PRC residents in a timely manner.14Some of our current shareholders and/or beneficial owners may fall within the ambit of the SAFE notice and be required to register with the local SAFEbranch as required under the SAFE notice. If so required, and if such shareholders and/or beneficial owners fail to timely register their SAFE registrations pursuantto the SAFE notice, or if future shareholders and/or beneficial owners of our company who are PRC residents fail to comply with the registration procedures setforth in the SAFE notice, this may subject such shareholders, beneficial owners and/or our PRC subsidiaries to fines and legal sanctions and may also limit ourability to contribute additional capital into our PRC subsidiaries, limit our PRC subsidiaries’ ability to distribute dividends to our company, or otherwise adverselyaffect our business.Risks Associated with our ADSs and Ordinary SharesOur securities are not currently traded on any United States public markets and you may not be able to resell your securities for some time.There is currently no public market for our ordinary shares or American Depository Shares (“ADSs”) in the United States or in any other jurisdiction. OurADSs were voluntarily delisted from the NASDAQ Capital Market on September 19, 2018. We have applied to NASDAQ for the listing of our ordinary shares on theNASDAQ Capital Market and received an approval for listing of Ordinary Shares on August 6, 2018, and as of the date of this transition report, that application andapproval are currently under review. We cannot assume that our ordinary shares will be accepted for listing on the NASDAQ Capital Market, or if listed, that wewould continue to meet the applicable minimum listing requriements. You may not be able to sell your ordinary shares quickly or at all if we are unable to gain listingon a public market in the United States.The market price of our ADSs has historically been highly volatile, and you may not be able to resell our ordinary shares at or above your initial purchaseprice.There may be a limited public market for our ordinary shares and, as discussed above, our ADSs are no longer listed on any public market in the UnitedStates or any other jurisdiction. We cannot assure you that there will be an active trading market for our ordinary shares in the future. If our ordinary shares areaccepted for listing on a public market, you may not be able to sell your ordinary shares quickly or at the market price if trading in our ordinary shares is not active. The trading price of our ADSs and ordinary shares may be volatile. The price of our ADSs and ordinary shares could be subject to wide fluctuations inresponse to a variety of factors, including the following:1.Introduction of new products, services or technologies offered by us or our competitors;2.Failure to meet or exceed revenue and financial projections we provide to the public;3.Actual or anticipated variations in quarterly operating results;4.Failure to meet or exceed the estimates and projections of the investment community;5.General market conditions and overall fluctuations in United States equity markets;6.Announcements of significant acquisitions, strategic partnerships, joint ventures or capital commitments by us or our competitors;7.Disputes or other developments relating to proprietary rights, including patents, litigation matters and our ability to obtain patent protection for ourtechnologies;8.Additions or departures of key management personnel;9.Issuances of debt or equity securities;10.Significant lawsuits, including patent or shareholder litigation;11.Changes in the market valuations of similar companies;12.Sales of additional ordinary shares or other securities by us or our shareholders in the future;13.Trading volume of our ordinary shares;14.Fluctuations in the exchange rate between the U.S. dollar and Renminbi;15.Negative market perception and media coverage of our company or other companies in the same or similar industry with us; and16.Other events or factors, many of which are beyond our control.15In addition, the stock market in general, and the NASDAQ Capital Market and software products and services companies in particular, have experiencedextreme price and volume fluctuations that have often been unrelated or disproportionate to the operating performance of these companies. Broad market andindustry factors may negatively affect the market price of our ordinary shares, regardless of our actual operating performance. Our ADSs and ordinary shares may be subject to the SEC’s penny stock rules which may make it difficult for brokerdealers to complete customer transactionsand trading activity in our securities.Our ADSs and ordinary shares may be deemed to be “penny stock” as that term is defined under the Securities Exchange Act of 1934, as amended. Pennystocks generally are equity securities with a price of less than $5.00 (other than securities registered on certain national securities exchanges or quoted on theNASDAQ system, provided that current price and volume information with respect to transactions in such securities is provided by the exchange or system). Pennystock rules impose additional sales practice requirements on brokerdealers who sell to persons other than established customers and “accredited investors.” Theterm “accredited investor” refers generally to institutions with assets in excess of $5,000,000 or individuals with a net worth in excess of $1,000,000 or annual incomeexceeding $200,000 or $300,000 jointly with their spouse in each of the prior two years.The penny stock rules require a brokerdealer, prior to a transaction in a penny stock not otherwise exempt from the rules, to deliver a standardized riskdisclosure document in a form prepared by the SEC, which provides information about penny stocks and the nature and level of risks in the penny stockmarket. Moreover, brokerdealers are required to determine whether an investment in a penny stock is a suitable investment for a prospective investor. A brokerdealer must receive a written agreement to the transaction from the investor setting forth the identity and quantity of the penny stock to be purchased. Theserequirements may make it more difficult for brokerdealers to effectuate customer transactions and trading activity in our securities. As a result, the market price ofour ADSs and ordinary shares may be depressed, and you may find it more difficult to sell our ADSs or ordinary shares.Sales of a substantial number of ordinary shares or ADSs in the public market by our existing shareholders could cause the price of our ADSs to fall.Sales of a substantial number of our ordinary shares or ADSs in the public market or the perception that these sales might occur, could depress the marketprice of our ADSs and could impair our ability to raise capital through the sale of additional equity securities. We are unable to predict the effect that sales may haveon the prevailing market price of our ADSs.All of our existing shareholders prior to our May 2010 offering were subject to lockup agreements with the underwriters of the offering that restricted theshareholders’ ability to transfer ordinary shares or ADSs until expiration of the lockup period in November 2010. The lockup agreements limited the number ofordinary shares or ADSs that may be sold immediately following the public offering. Subject to certain limitations, approximately 1,000,000 of our total outstandingshares are now eligible for sale. Sales of ordinary shares by these shareholders could have a material adverse effect on the trading price of our ADSs.Future sales and issuances of our ordinary shares, or rights to purchase our ordinary shares, including pursuant to our 2010 Omnibus Incentive Plan, couldresult in additional dilution of the percentage ownership of our shareholders and could cause the price of our ordinary shares to fall.We expect that significant additional capital will be needed in the future to continue our planned operations. To the extent we raise additional capital byissuing equity securities, our shareholders may experience substantial dilution. We may sell ordinary shares, convertible securities or other equity securities in oneor more transactions at prices and in a manner we determine from time to time. If we sell ordinary shares, convertible securities or other equity securities in more thanone transaction, investors may be materially diluted by subsequent sales. Such sales may also result in material dilution to our existing shareholders, and newinvestors could gain rights superior to our existing shareholders.16We do not intend to pay dividends on our ordinary shares, so any returns will be limited to the value of our ADSs and ordinary shares.We have never declared or paid any cash dividend on our ordinary shares. We currently anticipate that we will retain future earnings for the development,operation and expansion of our business and do not anticipate declaring or paying any cash dividends for the foreseeable future. Any return shareholders willtherefore be limited to the value of their ADSs or ordinary shares.As the rights of shareholders under British Virgin Islands law differ from those under U.S. law, you may have fewer protections as a shareholder.Our corporate affairs will be governed by our memorandum of association and articles of association, the BVI Business Companies Act, 2004, or the BVIAct, of the British Virgin Islands and the common law of the British Virgin Islands. The rights of shareholders to take legal action against our directors, actions byminority shareholders and the fiduciary responsibilities of our directors under British Virgin Islands law are to a large extent governed by the BVI Act and thecommon law of the British Virgin Islands. The common law of the British Virgin Islands is derived in part from comparatively limited judicial precedent in the BritishVirgin Islands as well as from English common law, which has persuasive, but not binding, authority on a court in the British Virgin Islands. The rights of ourshareholders and the fiduciary responsibilities of our directors under British Virgin Islands law are not as clearly established as they would be under statutes orjudicial precedents in some jurisdictions in the United States. In particular, the British Virgin Islands has a less developed body of securities laws as compared to theUnited States, and some states (such as Delaware) have more fully developed and judicially interpreted bodies of corporate law.As a result of all of the above, holders of our ADSs and ordinary shares may have more difficulty in protecting their interests through actions against ourmanagement, directors or major shareholders than they would as shareholders of a U.S. company.British Virgin Islands companies may not be able to initiate shareholder derivative actions, thereby depriving shareholders of the ability to protect theirinterests.British Virgin Islands companies may not have standing to initiate a shareholder derivative action in a federal court of the United States. The circumstancesin which any such action may be brought, and the procedures and defenses that may be available in respect to any such action, may result in the rights ofshareholders of a British Virgin Islands company being more limited than those of shareholders of a company organized in the United States. Accordingly,shareholders may have fewer alternatives available to them if they believe that corporate wrongdoing has occurred. The British Virgin Islands courts are alsounlikely to recognize or enforce against us judgments of courts in the United States based on certain liability provisions of U.S. securities law; and to imposeliabilities against us, in original actions brought in the British Virgin Islands, based on certain liability provisions of U.S. securities laws that are penal in nature.There is no statutory recognition in the British Virgin Islands of judgments obtained in the United States, although the courts of the British Virgin Islands willgenerally recognize and enforce the nonpenal judgment of a foreign court of competent jurisdiction without retrial on the merits.The laws of the British Virgin Islands provide little protection for minority shareholders, so minority shareholders will have little or no recourse if theshareholders are dissatisfied with the conduct of our affairs.Under the law of the British Virgin Islands, there is little statutory law for the protection of minority shareholders other than the provisions of the BVI Actdealing with shareholder remedies. The principal protection under statutory law is that shareholders may bring an action to enforce the constituent documents ofthe corporation, our memorandum of association and articles of association. Shareholders are entitled to have the affairs of the company conducted in accordancewith the general law and the memorandum of association and articles of association.17There are common law rights for the protection of shareholders that may be invoked, largely dependent on English company law, since the common law ofthe British Virgin Islands is limited. Under the general rule pursuant to English company law known as the rule in Foss v. Harbottle, a court will generally refuse tointerfere with the management of a company at the insistence of a minority of its shareholders who express dissatisfaction with the conduct of the company’s affairsby the majority or the board of directors. However, every shareholder is entitled to have the affairs of the company conducted properly according to law and thecompany’s constituent documents. As such, if those who control the company have persistently disregarded the requirements of company law or the provisions ofthe company’s memorandum of association and articles of association, then the courts will grant relief. Generally, the areas in which the courts will intervene are thefollowing: (1) an act complained of which is outside the scope of the authorized business or is illegal or not capable of ratification by the majority; (2) acts thatconstitute fraud on the minority where the wrongdoers control the company; (3) acts that infringe on the personal rights of the shareholders, such as the right tovote; and (4) where the company has not complied with provisions requiring approval of a majority of shareholders, which are more limited than the rights affordedminority shareholders under the laws of many states in the United States.Antitakeover provisions in our memorandum of association and articles of association and our right to issue preference shares could make a thirdpartyacquisition of us difficult.Some provisions of our memorandum of association and articles of association may discourage, delay or prevent a change in control of our company ormanagement that shareholders may consider favorable, including provisions that authorize our board of directors to issue preference shares in one or more seriesand to designate the price, rights, preferences, privileges and restrictions of such preference shares.If you hold our ADSs, you may not have the same voting rights as the holders of our ordinary shares and must act through the depositary to exercise your rights.Holders of our ADSs will not be able to exercise voting rights attaching to the shares evidenced by our ADSs on an individual basis. Holders of our ADSswill appoint the depositary or its nominee as their representative to exercise the voting rights attaching to the shares represented by the ADSs. You may not receivevoting materials in time to instruct the depositary to vote, and it is possible that you, or persons who hold their ADSs through brokers, dealers or other third parties,will not have the opportunity to exercise a right to vote. Upon our written request, the depositary will mail to you a shareholder meeting notice which contains,among other things, a statement as to the manner in which your voting instructions may be given, including an express indication that such instructions may begiven or deemed given to the depositary to give a discretionary proxy to a person designated by us if no instructions are received by the depositary from you on orbefore the response date established by the depositary. However, no voting instruction shall be deemed given and no such discretionary proxy shall be given withrespect to any matter as to which we inform the depositary that (i) we do not wish such proxy given, (ii) substantial opposition exists, or (iii) such matter materiallyand adversely affects the rights of shareholders. We will make all reasonable efforts to cause the depositary to extend voting rights to you in a timely manner, butyou may not receive the voting materials in time to ensure that you can instruct the depositary to vote your ADSs. Furthermore, the depositary and its agents willnot be responsible for any failure to carry out any instructions to vote, for the manner in which any vote is cast or for the effect of any such vote. As a result, youmay not be able to exercise your right to vote and you may lack recourse if your ADSs are not voted as you requested. In addition, in your capacity as an ADSholder, you will not be able to call a shareholders’ meeting.You may not be able to participate in rights offerings and may experience dilution of your holdings as a result.We may from time to time distribute rights to our shareholders, including rights to acquire our securities. However, we may not, and under the depositagreement for the ADSs, the depositary will not, offer those rights to ADS holders unless both the rights and the underlying securities to be distributed to ADSholders are registered under the Securities Act, or the distribution of them to ADS holders is exempted from registration under the Securities Act with respect to allholders of ADSs. We are under no obligation to file a registration statement with respect to any such rights or underlying securities or to endeavor to cause such aregistration statement to be declared effective. In addition, we may not be able to rely on an exemption from registration under the Securities Act to distribute suchrights and securities. Accordingly, holders of our ADSs may be unable to participate in our rights offerings and may experience dilution in their holdings as a result.You may be subject to limitations on transfer of your ADSs.Your ADSs are transferable on the books of the depositary. However, the depositary may close its transfer books at any time or from time to time when itdeems expedient in connection with the performance of its duties. In addition, the depositary may refuse to deliver, transfer or register transfers of ADSs generallywhen our books or the books of the depositary are closed, or at any time if we or the depositary deem it advisable to do so because of any requirement of law or ofany government or governmental body, or under any provision of the deposit agreement, or for any other reason.18We may be a passive foreign investment company, of PFIC, which could lead to additional taxes for U.S. holders of our ADSs or ordinary shares.We do not expect to be, for U.S. federal income tax purposes, a passive foreign investment company, or a PFIC, which is a foreign company for which, inany given taxable year, either at least 75% of its gross income is passive income, or investment income in general, or at least 50% of its assets produce or are held toproduce passive income, for the current taxable year, and we expect to operate in such a manner so as not to become a PFIC for any future taxable year. However,because the determination of PFIC status for any taxable year cannot be made until after the close of such year and requires extensive factual investigation,including ascertaining the fair market value of our assets on a quarterly basis and determining whether each item of gross income that we earn is passive income, wecannot assure you that we will not become a PFIC for the current taxable year or any future taxable year. If we are or become a PFIC, a U.S. holder of our ADSs orordinary shares could be subject to additional U.S. federal income taxes on gain recognized with respect to the ADSs or ordinary shares and on certain distributions,plus an interest charge on certain taxes treated as having been deferred under the PFIC rules. Noncorporate U.S. holders will not be eligible for reduced rates oftaxation on any dividends received from us if we are a PFIC in the taxable year in which such dividends are paid or in the preceding taxable year.If our ordinary shares are listed on the NASDAQ Capital Market and the trading price of our ordinary shares fails to comply with the continued listingrequirements of the NASDAQ Capital Market, we would face possible delisting, which would result in a limited public market for our ordinary shares andmake obtaining future debt or equity financing more difficult for us.Companies listed on NASDAQ are subject to delisting for, among other things, failure to maintain a minimum closing bid price of $1.00 per share for 30consecutive business days. On December 19, 2011, we received a letter from NASDAQ indicating that for the last 30 consecutive business days, the closing bidprice of our ADSs fell below the minimum $1.00 per share requirement pursuant to NASDAQ Listing Rule 5550(a)(2) for continued listing on the NASDAQ CapitalMarket. We regained compliance with the minimum bid price requirement for continued listing set forth in NASDAQ Listing Rule 5550(a)(2), as its ADS with itsunderlying ordinary share has achieved a closing bid price of $1.00 or greater for the 10 consecutive business days from November 6 to November 23, 2012 byimplementing a 1for10 combination, or reverse split of the ordinary shares effective November 6, 2012. When listed, we cannot be sure that the price of our ordinaryshares will comply with this requirement for continued listing on the NASDAQ Capital Market in the future. If we were not able to do so, our ordinary shares wouldbe subject to delisting and would likely trade on the overthecounter market. If our ordinary shares were to trade on the overthecounter market, selling ourordinary shares could be more difficult because smaller quantities of shares would likely be bought and sold, transactions could be delayed, and security analysts’coverage of us may be reduced. In addition, brokerdealers have certain regulatory burdens imposed upon them, which may discourage brokerdealers from effectingtransactions in our ordinary shares, further limiting the liquidity of our ordinary shares. As a result, the market price of our ordinary may be depressed, and you mayfind it more difficult to sell our ordinary shares. Such delisting from the NASDAQ Capital Market and continued or further declines in our share price could alsogreatly impair our ability to raise additional necessary capital through equity or debt financing.ITEM 4. INFORMATION ON THE COMPANY.A . HISTORY AND DEVELOPMENT OF THE COMPANY.OverviewWe are a holding company and conduct our operations through our whollyowned subsidiary named LK Technology Ltd., a British Virgin Islands limitedliability company (“LK Technology”), and its whollyowned subsidiaries, MMB Limited and Mobile Media (China) Limited and their respective subsidiaries, whichhold the rights to deploy WiFi systems on about 700 trains in China, including 290 trains in which WiFi systems have already been installed and are in operation. InMay 2010, we consummated an initial public offering of our American Depository Shares, or ADSs, for gross proceeds of $16 million, and our ADSs were listed onthe NASDAQ Capital Market under the ticker symbol “KONE”. Our ordinary shares are not currently listed on any trading market. Our American Depository Shares(“ADSs”) were voluntarily delisted from the NASDAQ Capital Market on September 19, 2018. We have applied to NASDAQ for the listing of our ordinary shares onthe NASDAQ Capital Market and received an approval for listing of Ordinary Shares on August 6, 2018, and as of the date of this transition report, that applicationand approval are currently under review.19On August 17, 2018, we consummated an asset exchange transaction, pursuant to which we exchanged all issued and outstanding capital stock in TopskyInfoTech Holdings Pte Ltd., the parent of Softech, for the issued and outstanding capital stock of LK Technology (the “Asset Exchange”). In connection with theAsset Exchange, we changed our name on August 20, 2018, and on September 20, 2018, issued to the shareholders of C Media Limited, the former parent of LKTechnology, (i) 185,412,599 of our ordinary shares, par value $0.01 per share and (ii) 1,000,000 of our preferred shares. Upon the consummation of the AssetExchange, we ceased our previous business operations and became a company focused on the provision of WiFi and mobile application products for long distancerail travelers in China.On August 25, 2018, LK Technology entered into a Stock Purchase Agreement (the “Agreement”) with the shareholders (“Shareholders”) of SuperengineHoldings Limited, a limited liability company organized under the laws of the British Virgin Islands (the “Superengine”), pursuant to which LK Technology acquiredall of the issued and outstanding capital stock of Superengine for an aggregate purchase price of US$60 million (the “Purchase Price”), which are paid by theissuance of our Ordinary Shares in an amount equal to the quotient of (x) the Purchase Price divided by (y) the average of the closing prices of the Ordinary Shareson the NASDAQ Capital Market over the 12 months period preceding July 31, 2018. We are a party to the Agreement in connection with the issuance of theOrdinary Shares and certain other limited purposes.Corporate InformationOur principal executive offices are located at LAB32, SOHO 3Q, No 9, Guanghua Road, Chaoyang District, Beijing, People’s Republic of China 100020. Ourwebsite is www.luokung.com. We routinely post important information on our website. The information contained on our website is not a part of this transitionreport.Our agent for service of process in the United States is Worldwide Stock Transfer, LLC, the current transfer agent of the Company, with a mailing address ofOne University Plaza, Suite 505, Hackensack, New Jersey 07601.B. BUSINESS OVERVIEW.We are a Chinabased provider of rail WiFi and mobile application products for long distance travelers in China. Our primary mobile application, theLuoKuang platform, consists of the LuoKuang mobile applications, a series of supporting software at the server end, and railWiFi hardware and equipment on thetrains that we serve. The LuoKuang platform incorporates technology covered by 22 patents and about 34 software copy rights, and serves as a content and servicedistribution platform that is tailored for particular travel stages featuring geographic location and social interaction. The content and services distributed byLuoKuang contain information, entertainment, travel, ecommerce, online to offline (“O2O”), advertisement and marketing features.LuoKuang mainly provides personalized and precise services to long distance travelers in two locations: on the train and at the destination. Based on thetravel environment, the core elements of our users’ needs include staving off boredom on trains and discovering and exploring new locations upon arrival. The mainservices contain entertainment services (videos and audio, digital readings, games specific and tailored to the travel stage) and social services (satisfying thedemand for value discovery of unfamiliar destinations through social interaction among strangers based on locations). As of December 31, 2017, the LuoKuangplatform featured about 38 million users.The setting services on the train focus on providing entertainment content for passengers to pass time during longdistance travel in closed environments.For example, we provide access to long video formats such as movies and TV shows, short videos, music, digital readings and games.20We use the most valuable WiFi location—the train WiFi setting—as the entrance of our LuoKuang platform and mobile applications. Passengers typicallyride trains for longdistance and interprovincial travel purposes. The long periods of monotonous journeys and the cost concerns for roaming traffic fees enable thecombination of entertainment content service needs and WiFi access needs. Our railWiFi becomes a valuable and sophisticated WiFi service in this setting—notjust WiFi connection service, but a provider of sophisticated services through a WiFi connection. In addition, the annual traffic of 800,000 passengers onboardeach train makes rail WiFi a huge entry point for mobile applications. We do not define ourselves as a train WiFi communication service operator but as a longdistance travel mobile service provider. We provide users with free WiFi access so that users are able to connect to the LuoKuang platform and thus access relatedentertainment services, services on the train and destination services. The rail WiFi is our access point to a significant pool of users and the entrance to acquiringadditional users.The setting services focus on providing targeted push services to users while travelling in unfamiliar cities. Information and service guidance are preciselypushed to appeal to the interests and tastes (eating, drinking, shopping, touring and culture) of individual users (cuisine specialties and local snacks, local events,viewing sights, culture, history, stories). The service guidance is generated, shared and distributed by individual users (travelers, local residents, local businesses)interacting with current locations and featuring users who generated contents from selfmedia and small and medium vertical contents providers).Based on the GIS (geoinformation system), Superengine is a provider of big spatialtemporal data, network graphic image technology and relevant service.Its super engine series includes computer graphic image engines and spatial database engines. Spatialtemporal cloud index is the core of the company’s spatialtemporal data engines. It is equivalent to the neural network of the big data and the Internet. It extends the value of its products and platform to its data serviceproviders. In cooperation, its service providers can be divided into three categories, namely, basic geographic data providers, industrial data providers andbehavioral data providers). Superengine’s industriesoriented spatialtemporal data engine was launched in 2016. The spatialtemporal GIS platform has been appliedin industries such as aerospace, power grid, surveying & mapping, agriculture, cultural relic preservation, water conservancy, public security, railway section, smartcities, and business location selection.Our primary sources of revenue are advertising and marketing promotion revenues.Our Industry — Mobile Internet IndustryOur products and services are engaged in the mobile internet industry. Our main services consist of entertainment services (videos, audio, digital readings,games that are tailormade for passengers on train) and other services including satisfying the demand for value discovery of unfamiliar destinations through socialinteractions among strangers based in such locations). The mobile internet industry in China is rapidly growing and is likely to be in a longterm growth trend.According to the Mobile Internet Blue Book of China Mobile Internet Report, in 2017 the market size of China mobile internet reached RMB 605 billion. Now China isin a leading position in terms of smartphone, mobile communication network and mobile application services. The pool of users is anticipated to keep expandingthrough the promotion and popularization of smartphones and the expansion of the mobile internet market.Video is the leading online entertainment format in China. According to the iResearch Report, over 80% of total time spent by users on online entertainmentin China in 2016 was internet video. Online entertainment, especially internet video, is attractive to Chinese users due to many favorable factors, including easyaccessibility, wide content selection, and innovative platforms with social features.For 2017, the transaction volume of China mobile ecommerce market reached to over RMB 4 trillion according to the China Mobile Ecommerce IndustryResearch Report from iResearch, representing an increase of 19.1%. For the next few years, China mobile online shopping will likely maintain steady growth. Thefocal point of competition in China mobile ecommerce market has shifted from infrastructure service providers to integrated and accurate services providers.Drawing in users with compelling content in diversified scenes has become a trend.21The revenue for China mobile gaming industry reached RMB 144.58 billion for the year of 2017, according to the China Mobile Game Industry ResearchReport from iResearch. With increased investment by largescale enterprises in the sector of mobile games and the strict enforcement of the mobile game industryrelated regulatory policy guidelines, the mobile game market as a whole will become more organized and standardized.According to the Annual Analysis of China Mobile Reading Industry from Analysis, for the year of 2017, the mobile reading market in China reached toRMB 14.04 billion. By the end of 2016, the size of China mobile's reading market reached RMB 11.86 billion, showing an increase of 18.38% in 2017.The closed and boring environment for passengers of longdistance travel and high roaming charges lead to a strong demand to use our rail WiFi services.Passengers, through their own mobile phone, have access to the free WiFi network in each carriage, access to our rich mobile internet entertainment content andtravel services. According to the annual statistical bulletin of China Railway Corporation in 2017, there were about 6,030 trains in operation in China in 2017,consisting of 2,935 high speed trains and 3,095 express trains. The rail WiFi system that we have installed are currently all on express trains. The market value will bemultiplied several times following the extended coverage of service on other trains.Our StrengthsWe believe the following strengths differentiate us from our competitors:Our strategy is to build up personalized and targeted service products for travelers through rail WiFi networks, enabling our services to evolve into a coredriving distribution platform that provides content, news, games, ecommerce, OTO service, travel services and advertising and marketing. In comparison, ourcompetitors offer simple forms of media services on trains. We focus on personalized and targeted matching between users on long distance trips and services. Ourcompetitors focus on operating and generating internet traffic.We possess a complete set of technology system including network, client end and service and operation platform. We have patent protections for WiFiequipment on trains. Our technology strengths are briefly summarized below.WiFi EquipmentPatent protected. Supports WiFi/3G/4G telecom modules; 4 core CPU with X86 architecture, and SSD hard disk with big storage for localcontents.InfrastructureThe technology infrastructures include the application program system, big data gathering and processing systems, intelligence cloudsservice deployment structure systems and our WiFi hardware server deployment structure system. The operation center, big data center,contents center and railWiFi server system are built on this infrastructure. On the above layer, the equipment management platform,account and payment platform, contents management platform and advertisement distribution platform are set up for daily managementpurpose.LuoKuang strengthens the connection of services among people, setting and locations. In catering to people on the move, we anticipate strengthening therelationship between users and their locations in a given moment. Currently, LuoKuang provides the link between users and thirdparty service providers andprovides value added services to both users and thirdparty service providers. The connection is not simply a traffic diversion, but also the direct presentation ofrelevant services in the LuoKuang platform. The open API interface and independent product software package allows easy access by service providers anddevelopers and supports data service, advertisement operations, billing, users promotion and product marketing services. As an API product, LuoKuang does notcreate content or services. The content and services are provided by our partners in the LuoKuang platform. Now, the majority of top mobile internet content andservices providers in China have a presence in the Luokuang platform. Those include, but are not limited to, Toutiao, Wangyi News, iqiyi, Letv, YoudianCinema(Hollywood films), Sohu video, Phoenix Video, Kugou Music, FM Qingting, iReader, Baidu Literature, Phoenix Novel, Baidu Game, Meituan, Dianping, andsimilar content providers.22Our StrategyLuoKuang is positioned to provide API interface services and geographic information social services. The API interface services are provided within thetypical BC model. LuoKuang pushes the content and services from thirdparty service providers to users. The local businesses, service practitioners, residents, andforeign travelers are all defined as a “user” and may participate in social interactions based on local value information and generate UGC content. The socalled localvalue information is defined as information, views, evaluations, experiences and experience sharing related to the local cultural scene, native products,entertainment, food, tourism and activities.The LuoKuang user growth strategy is to have access to users through the travelers’ use of mobile devices in connection with longdistance train travel.Through deploying WiFi systems on trains and providing free WiFi access to passengers, LuoKuang is able to have consistent access to longdistance travelers.The WiFi system on the train has become a powerful user portal at the early stage of LuoKuang and has gained substantial user traffic. We are in a leading positionin terms of numbers of trains contracted and trains in operation with our free WiFi system. We have contracted with about 700 trains, which cover almost 560 millionannual passenger trips. As of the date of this report, approximately 290 trains are operating our rail WiFi system. We will continue to install our rail WiFi system inthe following years.The development strategy for LuoKuang encompasses the following:1.Enhance our local cycle service (a recommendation service system based on the location of travelers after their arrival, recommendations includingtourist attractions, local specialties and other items of interest), strengthen services for arrivals in the form of social interaction and focus on the valueof relationships between users and their current locations.2.Focus on the development of geographic positioning technology. Get the business of local cycle and users on train mixed together. We will put oureffort to maximize the synergy effect.3.Big Data: Behavior data about passenger trips is obtained via the traffic entrance of rail WiFi and these data will help to optimize our product.4.While enhancing setting service experiences and optimizing entertainment experiences, we will enrich ecommerce services on trains featuringrecommendations of customized products and ecommerce shopping guidance of products labeled with specific geographic location (and trafficdiversion).5.Focus on API positioning and attract more premium vertical service providers (contents and services).Intellectual PropertyWe have registered the following software copyrights, patents and trademarks for our business operations. We believe this intellectual property forms anintegral part of our competitive strength.23Patents:We have been granted some inventions by the State Intellectual Property Office of PRC. We possess a complete set of technology system includingnetwork, client end and service and operation platform. We have patent protections for WiFi equipment on trains. We have received the following patents:No.Name of patentTypeRegistrationNumberDate of Insurance1.Wireless communication multimedia chip business consumer informationacquisition terminal deviceInventionZL 2010 2 0528767.9Sep 21, 20112.A user behavior processing method and device for intelligent terminalInventionZL 2013 1 0301728.3May 27, 20153.A global positioning system terminal deviceInventionZL 2010 2 0253452.8Nov 7, 20114.A wireless multimedia serverInventionZL 2013 2 0220183.9Nov 13, 20135.Ordering system of passengers on trainInventionZL 2015 2 0095381.6Aug 5, 20156.A wireless multimedia serverInventionZL 2015 2 0201382.4Oct 28, 20157.An antenna structureInventionZL 2016 2 0424352.4Mar 1, 20178.Spatial data progressive transmission method and deviceInvention201010617383.9Jun 15, 20169.Methods and devices for conflict detection and avoidance of spatial entity elementlabelingInvention201010617385.8Mar 26, 201410.Spatial data processing method and deviceInvention201010617399.XJun 26, 201311.Method and device of spatial data simplificationInvention201010617400.9Mar 13, 201312.Method and device for judging the occlusion type of space entityInvention201010617403.2Sep 25, 201313.A method and device for distributed mapping of 3d model dataInvention201110274924.7Mar 26, 201414.Data simplification of 3d model, gradual transmission method and deviceInvention201110275336.5Mar 25, 201515.Spatial data transmission method and deviceInvention201110306393.5Dec 13, 201416.Methods and devices for spatial data processing, simplification and progressivetransmissionInvention201210104250.0Jun 10, 201517.Spatial data progressive transmission method and deviceInvention201310367021.2Jun 23, 201718.Simplification method and device of spatial dataInvention201310367128.7Sep 22, 201719.The method and device to accelerate transmission and display of graphic dataacross platformsInvention201210116149.7Aug 10, 201620.Methods and devices related to spatial data compression, decompression andprogressive transmissionInvention201310136682.4Nov 10, 2017We also have two patents outside of China.No.Name of patentCountryNationalRegistrationNumberDate ofInsurance1.Spatial data processing method and deviceJapan2012547439Jun 20, 20142.Methods and devices related to spatial data compression, decompression andprogressive transmissionU.S.A14/394,610Sep 5, 201724Software Copyrights:We have received the following software copyrights from the National Copyright Administration (“NCA”) of PRC:No.Name of CopyrightAchievement approachRegistration numberTime of obtainExpire time1.WAP PUSH Business operation platformsystemIndependent research anddevelopment2007SRBJ1464Jul 23, 200750 years2.TDSCDMA Streaming media businessmanagement platform software V1.0Independent research anddevelopment2009SRBJ0412Jan 22, 200950 years3.Content management platform systemsoftware V1.0Independent research anddevelopment2009SRBJ1374Apr 1, 200950 years4.Mobile multimedia broadcast electronicservice guide system software V1.0Independent research anddevelopment2009SRBJ1365Apr 1, 200950 years5.Mobile video business operation platformsystem V1.0Independent research anddevelopment2007SRBJ1463Jul 23, 200750 years6.Mobile multimedia broadcast emergencybroadcast platform software V1.0Independent research anddevelopment2010SRBJ0720Mar 5, 201050 years7.Mobile multimedia broadcast audio richmedia interactive platform softwareV1.0Independent research anddevelopment2010SRBJ0719Mar 5, 201050 years8.Printer typesetting and printing softwareV1.0Independent research anddevelopment2011SRBJ4190Sep 28, 201150 years9.Electronic newspaper business supportplatform software V1.0Independent research anddevelopment2011SRBJ4186Sep 28, 201150 years10.Public information business platformsoftware V1.0Independent research anddevelopment2011SRBJ3810Sep 27, 201150 years11.User interface scripting software V1.0Independent research anddevelopment2011SRBJ3809Sep 27, 201150 years12.Integrated business management platformsoftware V1.0Independent research anddevelopment2012SR003002Jan 16, 201250 years13.Interactive business development platformsoftwareIndependent research anddevelopment2011SRBJ4593Nov 29, 201150 years14.Instant messaging and messaging systemsoftwareIndependent research anddevelopment2014SR122231Aug 5, 201450 years15.General statistical platform software forclient productsIndependent research anddevelopment2014SR216662Dec 30, 201450 years16.CMMB Data broadcast managementplatform softwareIndependent research anddevelopment2009SRBJ0391Jan 22, 200950 years17.Integrated passenger train service systemIndependent research anddevelopment2012SR083665Sep 5, 201250 years25No.Name of CopyrightAchievement approachRegistration numberTime of obtainExpire time18.JHBY Train inspection managementsystemIndependent research anddevelopment2013SR015105Feb 21, 201350 years19.Integrated information engine platformsoftware V1.0Independent research anddevelopment2014SR040347Nov 30, 200150 years20.Super information engine developmentplatform software V5.0Independent research anddevelopment2014SR036792Mar 5, 200350 years21.Core map super network informationengine platform software V1.0Independent research anddevelopment2014SR036772Sep 15, 200750 years22.Integrated management of the grid gissoftware V1.0Independent research anddevelopment2014SR036808Jun 20, 200850 years23.Core map rural power grid equipment GPSpatrol system software V1.0Independent research anddevelopment2014SR036810Dec 10, 200850 years24.Diagram grid patrol PDA system softwareV1.0Independent research anddevelopment2014SR036778Dec 12, 200850 years25.Core map geographic information enginedesktop platform software V1.0Independent research anddevelopment2014SR036614Jan 15, 200950 years26.Integrated management of the gridgeographic information Web systemsoftware V1.0Independent research anddevelopment2014SR036799Mar 10, 200950 years27.Core map railway power supply equipmentGPS patrol system software V1.0Independent research anddevelopment2014SR036783Mar 25, 201050 years28.Core map network 3 d map server softwareV1.0Independent research anddevelopment2014SR036788Feb 20, 201150 years29.Core map network 3d map clientsoftwareV1.0Independent research anddevelopment2014SR036637Feb 22, 201150 years30.Core map 3d map network publishingplatform software V1.0Independent research anddevelopment2014SR036633Mar 10, 201150 years31.Core map 3d map network release pluginsystem software V1.0Independent research anddevelopment2014SR036622Mar 15, 201150 years32.Core map network 3d map smartphoneplatform software V1.0Independent research anddevelopment2014SR036638Apr 28, 201150 years33.Core map network GIS Shared mobileplatform software V1.0Independent research anddevelopment2014SR036634Oct 31, 201150 years34.Core map network GIS sharing platformsoftware V1.0Independent research anddevelopment2014SR036639Dec 16, 201150 yearsTrademarks:We have registered the following trademarks with the Trademark Office, State Administration 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NumberValid PeriodRegistration Number58箩筐图形382016.06.142026.06.131658022959箩筐图形352016.06.142026.06.131658023060箩筐图形92016.06.142026.06.131658023161微时光文字422016.09.282026.09.271658024762传游录屏文字92016.06.142026.06.131678214463传游录屏文字352016.06.142026.06.131678214364传游录屏文字382016.06.142026.06.131678214265传游录屏文字412016.06.142026.06.131678214166传游录屏文字422016.06.142026.06.131678214067录游器文字92016.06.142026.06.131678213568录游器文字352016.06.142026.06.131678213669录游器文字382016.06.142026.06.131678213770录游器文字412016.06.142026.06.131678213871录游器文字422016.06.142026.06.131678213972畅联TV文字412016.01.212026.01.201579246773畅联TV文字382016.01.212026.01.201579246874SuperEngine92016.01.212026.01.20812572275SuperEngine422016.01.212026.01.20812572876超擎9/422016.01.212026.01.201647320577SUPERENGINE9/422016.01.212026.01.2016473185*See below for an explanation of each classification number used in the table above.Classification No. 9: data processing apparatus, couplers (data processing equipment), computer software (recorded), monitors (computer programs), smartcards (integrated circuit cards), electrodynamic apparatus for the remote control of signals, alarms, and electric installations for the remote control of industrialoperations.Classification No. 35: auctioneering, sales promotion for others, marketing analysis, marketing research, importexport agencies, advisory services forbusiness management, business management for franchise, personnel management consultancy, relocation services for businesses, and systemization ofinformation into computer databases.Classification No. 38: Include services that enable at least sensory communication between two people. Such services include that allow one person to talkto another, send messages from one person to another, Make verbal or visual contact between one person and the other. This classification especially include theservice for broadcasting radio or television programs. Except for radio advertising services and telemarketing services.Classification No. 41: instruction services, teaching, education information, tuition, arranging and conducting of colloquiums, publication of electronicbooks and journals online, amusements, and vocational guidance.Classification No. 42: technical research, studies (technical project), computer software design, updating of computer software, recovery of computer data,computer systems analysis, installation of computer software, computer antivirus protection, and research and development for others. 28Business Certificates and QualificationsWe have obtained all necessary regulatory certifications to conduct our business in the PRC, including without limitation, the following: SoftwareEnterprise Recognition Certificate, Computer Information System Integration Qualification Certificate, Construction Enterprise Qualification Certificate, and SecurityTechnology & Protection Enterprise Certificate. We have also been properly certified as a hightech enterprise and have met the ISO 9001:2000 qualificationmanagement system.Legal ProceedingsAlthough we may, from time to time, be involved in litigation and claims arising out of our operations in the normal course of business, we do not believethat we are a party to any litigation that will have a material adverse impact on our financial condition or results of operations. To our knowledge, other than asdescribed below there are no material legal proceedings threatened against us. From time to time, we may be subject to various claims and legal actions arising in theordinary course of business. Following the consummation of the AEA, we became successor in interest to the legal proceedings described below.Litigation with Shanghai Fusheng Weier Intelligent Control Technology Co., Ltd.On January 22, 2016, Zhong Chuan Rui You and Shanghai Fusheng Weier Intelligent Control Technology Co., Ltd. (“Fusheng Weier”) signed a contract forequipment of $1,652,842 (RMB10,800,000). Since Zhong Chuan Rui You did not make the payments of $1,126,381 (RMB7,360,000) on the due dates, Fusheng Weierfiled a lawsuit against Zhong Chuan Rui You in Shanghai Xuhui District People's Court on October 8, 2016. On March 9, 2017, Xuhui District People's Court issuedthe verdict requiring Zhong Chuan Rui You to pay the overdue debts. In August 2017, C Media Limited made the payment of $512,075 (RMB3,346,000). Theremaining balance has been accrued in accounts payable. The payment schedule for the remaining balance is being negotiated by the two parties. On February 5,2018, a hearing was held adding Zhong Chuan Shi Xun as a defendant. The Group plans to settle the remaining balance within one year.Lawsuit with Gansu Jinlun Culture Media Co., Ltd.On August 22, 2014, Zhong Chuan Rui You and Gansu Jinlun Culture Media Co., Ltd. (“Gansu Jinlun”) signed a “Lanzhou Railway Bureau AirconditionedTrain WiFi Network System Advertising Operation Rights Agreement” for advertising on 72 trains of $1,467,880 (RMB9,604,633). Due to the dispute on theproject implementation, Zhong Chuan Rui You did not pay the advertising fee. On August 23, 2017, Gansu Jinlun filed a lawsuit with Gansu Intermediate People'sCourt. On December 19, 2017, Gansu Intermediate People's Court issued a verdict, ruling that Zhong Chuan Rui You settle the overdue advertising fee. Since only 18out of 72 trains have been installed with Wifi network system, Zhong Chuan Rui You disputed and appealed to the verdict. The next court trial date has not yet beendetermined.C Media and Gansu Jinlun are negotiating a potential settlement to resume the contract. According to the legal counsel, it is probable that the settlementwill amount to approximately $459,000 (RMB3,000,000); therefore, this amount has been accrued in accounts payable as at December 31, 2017.Litigation with Shenzhen Hua Xun Fang Zhou Technology Co., Ltd.On June 16, 2015, Zhong Chuan Rui You signed a cooperation agreement with Shenzhen Hua Xun Fang Zhou Technology Co., Ltd. (“Shenzhen Hua Xun”)and Xuesong Song, a major shareholder of C Media Limited. Pursuant to this agreement, Zhong Chuan Rui You procures equipment from Shenzhen Hua Xun.Xuesong Song acts as a joint liability guarantor for the entire debts of Zhong Chuan Rui You under this agreement. As Zhong Chuan Rui You did not make thepayments on the due dates, Shenzhen Hua Xun filed a lawsuit with Shenzhen Baoan District People's Court on May 31, 2016. On November 1, 2016, Zhong ChuanRui You, Xuesong Song and Shenzhen Hua Xun reached a settlement in Shenzhen Baoan District People's Court to settle $1,735,389 (RMB11,355,000) in fourinstalments. On December 30, 2017, the debt was assigned to C Media Limited.29C. ORGANIZATIONAL STRUCTUREThe following diagram illustrates our corporate structure and the place of formation and affiliation of each of our subsidiaries and affiliates as of September30, 2018.30The following diagram illustrates our corporate structure and the place of formation and affiliation of each of our subsidiaries and affiliates as of December31, 2017.Contractual Arrangements with Beijing Zhong Chuan Shi Xun Technology Limited’s Subsidiaries and Their Respective ShareholdersTo comply with the PRC legal restrictions on foreign ownership of companies that operate mobile application services, our subsidiaries operate in suchrestricted service areas in the PRC through certain PRC domestic companies, whose equity interests are held by certain management members or founders of the LKTechnology Ltd. Part of the registered capital of these PRC domestic companies was funded by certain management members or founders of LK Technology Ltd. LKTechnology Ltd., through its subsidiary Zhong Chuan Tian Xia Information and Technology (Shenzhen) Limited (the “WFOE”), has entered into an exclusivebusiness cooperation agreement with Beijing Zhong Chuan Shi Xun Technology Limited (“Zhong Chuan Shi Xun” or the “VIE”) the PRC domestic company, whichentitle the WFOE to receive a majority of profit of Zhong Chuan Shi Xun. In addition, Zhong Chuan Tian Xia Information and Technology (Shenzhen) Limited hasentered into certain agreements with those management members or founders, including equity interest pledge agreement of the equity interests held by thosemanagement members or founders and exclusive option agreement to acquire the equity interests in these companies when permitted by the PRC laws, rules andregulations. Details of the typical VIE structure of our significant consolidated VIE, primarily domestic companies associated with the operations such as ZhongChuan Shi Xun and its subsidiaries of Zhong Chuan Rui You, Huoerguosi Luokuang and Jiu Zhou Shi Dai, are set forth below: Exclusive Business Cooperation AgreementThe VIE has entered into an exclusive business services agreement with the WFOE, pursuant to which the WFOE provides exclusive business services tothe VIE. In exchange, the VIE pays a service fee to the WFOE which amounts to be no less than the 80% of the VIE’s aftertax profit, resulting in a transfer ofsubstantially all of the profits from the VIE to the WFOE.Exclusive Option AgreementThe VIE equity holders have granted the WFOE exclusive call options to purchase their equity interest in the VIE at an exercise price equal to the minimumprice as permitted by applicable PRC laws. The WFOE may nominate another entity or individual to purchase the equity interest, if applicable, under the call options.Each call option is exercisable subject to the condition that applicable PRC laws, rules and regulations do not prohibit completion of the transfer of the equityinterest pursuant to the call option. The VIE agrees not to distribute any dividends to the VIE equity holders without the approval of WFOE.31Equity Interest Pledge AgreementPursuant to the equity pledge agreement, the VIE equity holders have pledged all of their interests in the equity of the VIE as a continuing first prioritysecurity interest in favor of the WFOE to secure the performance of obligations by the VIEs and/or the equity holders under the exclusive business cooperationagreement. The WFOE is entitled to exercise its right to dispose of the VIE equity holders’ pledged interests in the equity of the VIE and has priority in receivingpayment by the application of proceeds from the auction or sale of such pledged interests, in the event of any breach or default under the exclusive businesscooperation agreement, if applicable. These equity pledge agreement remain in force until all the obligations under the exclusive business cooperation agreementhave been fulfilled.The exclusive business cooperation agreement and equity interest pledge agreement described above also enable the Company to receive substantially allof the economic benefits from the VIE by typically entitling the WFOE to all dividends and other distributions declared by the VIE and to any distributions orproceeds from the disposal by the VIE equity holders of their equity interests in the VIE.D. PROPERTY AND EQUIPMENTWe lease offices located at Lab 30 & Lab 32, SOHO 3Q, No 9, Guanghua Road, Chaoyang District, Beijing, which covers a floor space of 600 square meters.These leases expire at different times throughout 2018 and are renewable upon negotiation.ITEM 4A. UNRESOLVED STAFF COMMENTSNone.ITEM 5. OPERATING AND FINANCIAL REVIEW AND PROSPECTSA . OPERATING RESULTS.The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our consolidatedfinancial statements and the notes to those financial statements appearing elsewhere in this report. This discussion and analysis contains forwardlookingstatements that involve significant risks and uncertainties. As a result of many factors, such as our anticipated growth strategy, our plans to recruit moreemployees, our plans to invest in research and development to enhance our product or service lines, our future business development, results of operations andfinancial condition, expected changes in our net revenues and certain cost or expense items, our ability to attract and retain customers, trends and competitionin the enterprise mobile software application market, and the factors set forth elsewhere in this report, our actual results may differ materially from thoseanticipated in these forwardlooking statements. In light of those risks and uncertainties, there can be no assurance that the forwardlooking statementscontained in this report will in fact occur. You should not place undue reliance on the forwardlooking statements contained in this report.The forwardlooking statements speak only as of the date on which they are made, and, except to the extent required by U.S. federal securities laws, weundertake no obligation to update any forwardlooking statement to reflect events or circumstances after the date on which the statement is made or to reflectthe occurrence of unanticipated events. Further, the information about our intentions contained in this report is a statement of our intention as of the date of thisreport and is based upon, among other things, the existing regulatory environment, industry conditions, market conditions and prices and our assumptions as ofsuch date. We may change our intentions, at any time and without notice, based upon any changes in such factors, in our assumptions or otherwise.32Unless the context otherwise requires, all references to (i) “PRC” and “China” are to the People’s Republic of China; (ii) “U.S. dollar,” “$” and “US$”are to United States dollars; and (iii) “RMB”, “Yuan” and Renminbi are to the currency of the PRC or China.OverviewLuokung Technology was incorporated on October 27, 2009 under the laws of the British Virgin Islands. We are a holding company and conduct ouroperations through LK Technology Ltd., a British Virgin Islands limited liability company (“LK Technology”) and its whollyowned subsidiaries, MMB Limited andMobile Media (China) Limited and their respective subsidiaries and a contractuallycontrolled entity in the PRC named Beijing Zhong Chuan Shi Xun Technology,which hold the rights to deploy WiFi systems on about 700 trains in China, including 290 trains in which WiFi systems have already been installed and are inoperation. In May 2010, we consummated an initial public offering of our American Depository Shares, or ADSs, for gross proceeds of $16 million, and our ADSswere listed on the NASDAQ Capital Market under the ticker symbol “KONE”. Our ordinary shares are not currently listed on any trading market. Our AmericanDepository Shares (“ADSs”) were voluntarily delisted from the NASDAQ Capital Market on September 19, 2018. We have applied to NASDAQ for the listing of ourordinary shares on the NASDAQ Capital Market and received an approval for listing of Ordinary Shares on August 6, 2018, and as of the date of this transitionreport, that application and approval are currently under review.On August 17, 2018, we consummated an asset exchange transaction, pursuant to which we exchanged all issued and outstanding capital stock in TopskyInfoTech Holdings Pte Ltd., the parent of Softech, for the issued and outstanding capital stock of LK Technology (the “Asset Exchange”). In connection with theAsset Exchange, we changed our name on August 20, 2018, and on September 20, 2018, completed the issuance to the shareholders of C Media Limited, the formerparent of LK Technology, of (i) 185,412,599 of our ordinary shares, par value $0.01 per share and (ii) 1,000,000 of our preferred shares. Upon the consummation of theAsset Exchange, we ceased our previous business operations and became a company focused on the provision of WiFi and mobile application products for longdistance travelers in China.On August 25, 2018, LK Technology entered into a Stock Purchase Agreement (the “Agreement”) with the shareholders (“Shareholders”) of SuperengineHoldings Limited, a limited liability company organized under the laws of the British Virgin Islands (the “Superengine”), pursuant to which LK Technology acquiredall of the issued and outstanding capital stock of Superengine for an aggregate purchase price of US$60 million (the “Purchase Price”), which are paid by theissuance of our Ordinary Shares in an amount equal to the quotient of (x) the Purchase Price divided by (y) the average of the closing prices of the Ordinary Shareson the NASDAQ Capital Market over the 12 months period preceding July 31, 2018. We are a party to the Agreement in connection with the issuance of theOrdinary Shares and certain other limited purposes.Results of operations for the fiscal year ended December 31, 2017 compared to the fiscal year ended December 31, 2016.RevenueWe provide displaybased online advertising services to customers by integrating text description, image and video, and displaying the advertisements in aprominent position of LuoKuang Application. We recognize revenue in accordance with ASC 605, over the contractual term based on the agreements andconfirmation letters signed by both parties, commencing on the date the customer’s advertisement is displayed on our platform.For the year ended December 31, 2017, we had revenue of $26,082,417, as compared to revenue of $5,233,145 for the year ended December 31, 2016, anincrease of $20,849,272, or 398.4%, which was primarily due to the increase of our advertising clients.Cost of revenueOur cost of revenue primarily consists of depreciation, labor cost, WiFi equipment installation fees, data charges, annual payments to local railway bureau,other overhead costs.33Cost of revenue for the year ended December 31, 2017 was $5,547,779, representing a decrease of $767,725 or 12.2% as compared to $6,315,504 for the yearended December 31, 2016. The decrease was primarily attributable to the decrease in labor cost as a result of our cost control and a decrease in the number ofmaintenance staff. Additionally, data charges decreased as train passengers prefer using their mobile data, leading to a decrease in 3G and 4G data.Selling and marketing expenseOur selling and marketing expense mainly include promotional and marketing expenses and compensation for our sales and marketing personnel.Selling expense totaled $23,908,733 for the year ended December 31, 2017, as compared to $6,209,804 for the year ended December 31, 2016, an increase of$17,698,929 or 285.0%. The increase was primarily attributable to the increase in promotional and marketing activities conducted by the Company.General and administrative expenseOur general and administrative expenses consist primarily of salaries and benefits for our general and administrative personnel, rent, fees and expenses forlegal, accounting and other professional servicesGeneral and administrative expense totaled $2,451,249 for the year ended December 31, 2017, as compared to $2,108,854 for the year ended December 31,2016, an increase of $342,395 or 16.2%.Research and development expenses.Research and development expenses primarily consist of salaries and benefits for research and development personnel.Research and development expenses totaled $1,046,198 for the year ended December 31, 2017, as compared to $2,882,202 for the year ended December 31,2016, a decrease of $1,836,004 or 63.7%. The decrease was primarily attributable to the Company reduced its expenses in research and development temporarily asour products are quite stable at present.Loss from operationsAs a result of the factors described above, for the year ended December 31, 2017, loss from operations amounted to $6,871,542, as compared to loss fromoperations of $12,283,219 for the year ended December 31, 2016, a decrease of $5,411,677, or 44.1%.Other income/expenseOther income/expense mainly include interest income from bank deposits, foreign currency transaction gain, and loss from investment.Net lossAs a result of the factors described above, our net loss was $6,810,454 for the year ended December 31, 2017, compared to net loss of $13,049,031 for theyear ended December 31, 2016, a decrease of $6,238,577 or 47.8%.Foreign currency translation adjustmentOur reporting currency is the U.S. dollar. The functional currency of our parent company and subsidiaries of Merchant Supreme and Prime Cheer is the U.S.dollar and the functional currency of the Company’s subsidiaries incorporated in China is the Chinese Renminbi (“RMB”). The financial statements of oursubsidiaries incorporated in China are translated to U.S. dollars using period end rates of exchange for assets and liabilities, and average rates of exchange (for theperiod) for revenue, costs, and expenses. Net gains and losses resulting from foreign exchange transactions are included in the consolidated statements ofoperations and comprehensive loss. As a result of foreign currency translations, which are a noncash adjustment, we reported a foreign currency translation gain of$90,671 for the year ended December 31, 2017, as compared to a foreign currency translation loss of $387,375 for the year ended December 31, 2016. This noncashgain had the effect of increasing/decreasing our reported comprehensive income/loss.34Comprehensive lossAs a result of our foreign currency translation adjustment, we had comprehensive loss for the year ended December 31, 2017 of $6,719,783, compared tocomprehensive loss of $12,661,656 for the year ended December 31, 2016.B. LIQUIDITY AND CAPITAL RESOURCESThe information contained in “Item 5. Operating and Financial Review and Prospects – A. Operating Results – Liquidity and Capital Resources” isincorporated herein by reference.C. RESEARCH AND DEVELOPMENT, PATENTS AND LICENSES, ETC.The discussions of our research and development activities were contained in “Item 4. Information about our Company – B. Business Overview –Research and Development” and “Item 5. Operating and Financial Review and Prospects – A. Operating Results – Operating Expenses – Research and DevelopmentExpenses” are incorporated herein by reference. In the years ended December 31, 2017 and 2016, we spent $1,046,198 and $2,882,202, respectively, on research anddevelopment activities.D. TREND INFORMATION.Industry and Market OutlookChina has awarded licenses to mobile phone companies to provide the superfast 4G network to customers. The licenses, which are designed to give mobilephone users faster access to services, were granted by the government to China Mobile, China Unicom Hong Kong and China Telecom. Since the grants, ChinaMobile has offered 4G to subscribers from December 18, 2013. China Unicom and China Telecom, the country's other two major carriers, also offer 4G wireless. Thenumber of China Mobile 4G customers has exceeded 900 million by the end of October in 2017. The move greatly bolstered business for telecom equipment makersand a range of other companies.Under China’s 12th FiveYear Plan, a key priority is for China to transition from “Made in China” to “Designed in China.” In order to achieve this goal, thegovernment plans to heavily invest in science and technology education and R&D so as to further develop China’s intellectual property rights system and support“NextGeneration IT” as a Strategic Emerging Industry (SEI). Additionally, China plans to upgrade the technological capabilities of private and public services,including “triple play” services (the convergence of telecom, broadcasting and Internet networks), ecommerce, and egovernment and statistics systems.Furthermore, the government plans to invest in R&D of the "Internet of things" and cloud computing, and develop digital and virtual technologies.E. OFFBALANCE SHEET ARRANGEMENTSWe have not entered into any financial guarantees or other commitments to guarantee the payment obligations of any third parties. We have not enteredinto any derivative contracts that are indexed to our shares and classified as shareholder’s equity, or that are not reflected in our consolidated financial statements.Furthermore, except for the mortgage referenced above, we do not have any retained or contingent interest in assets transferred to an unconsolidated entity thatserves as credit, liquidity or market risk support to such entity. We do not have any variable interest in any unconsolidated entity that provides financing, liquidity,market risk or credit support to us or engages in leasing, hedging or research and development services with us.35F. TABULAR DISCLOSURE OF CONTRACTUAL OBLIGATIONSAs of December 31, 2017, we did not have any contractual obligations required to be disclosed in this Item 5.F. ITEM 6. DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES.A. DIRECTORS AND SENIOR MANAGEMENT.Executive Officers and DirectorsThe following table sets forth the names and ages as of the date of this transition report of each of our executive officers and directors:NameAgePositionXuesong Song50Chief Executive Officer, Chairman and DirectorDongpu Zhang50PresidentJie Yu34Chief Financial OfficerKegang Peng46Vice President and DirectorChuang Tao51DirectorDennis Galgano (1)(2)69Director (Independent)Jin Shi (1)(2)49Director (Independent)Jiming Ha (1)(3)56Director (Independent)Zhihao Xu (3)42Director (Independent)(1)Member of the Audit Committee.(2)Member of the Compensation Committee.(3)Member of the Nominating and Corporate Governance Committee.Set forth below is biographical information concerning our executive officers and directors.Xuesong Song is a cofounder of C Media Limited and served as its chairman of the board of directors and chief executive officer from 2012 until theconsummation of the AEA. From February 2014 through April 2017, Mr. Song served as a director of Seven Stars Cloud Group, Inc. (NASDAQ: SSC) and fromJanuary 2013 through February 2015, Mr. Song served as a director of Pingtan Marine Enterprise Ltd. (NASDAQ: PME). From May 2006 through January 2009, Mr.Song served as the Chairman of the Board of ChinaGrowth North Acquisition Corporation, a special purpose acquisition company, which acquired UIB GroupLimited in January 2009, in which he remains a director. Mr. Song has been a principal of Chum Capital Group Limited since August 2001, a merchant banking firmthat invests in growth Chinese companies and advises them in financings, mergers & acquisitions and restructurings, and chief executive officer of Beijing ChumInvestment Co., Ltd. since December 2001. Mr. Song has been a director of Mobile Vision Communication Ltd. since July 2004. Mr. Song received a Master’s ofBusiness Administration degree from Oklahoma City/Tianjin Program.Dongpu Zhang was appointed as the President of the Company effective on August 25, 2018. Mr. Dongpu Zhang has served as the General Manager ofSuperEngine Graphics Software Technology Development (Suzhou) Co., Ltd. (“SuperEngine Suzou”) and the Chief Executive Officer of SuperEngine HoldingLimited since September 2016. From February, 2014 to August, 2016, Mr. Zhang served as vice president of Industrial Development Group under China Fortune LandDevelopment Co., Ltd. From March, 2009 to February, 2014, Mr. Zhang served as the vice president of Aerospace Science and Technology Holding Group Co., Ltd.Mr. Zhang receive his Master Degree of Computer Science from Harbin Institute of Technology in 1994 and his Bachelor Degree of information system fromChangsha Institute of technology in 1991.Jie Yu served as the chief financial officer of C Media Limited from January 2018 until the consummation of the asset exchange transactions. From June 2016to January 2018, Mr. Yu served as chief financial officer and secretary of the board of directors of MTI Environment Group Limited. Prior to joining MTI, Mr. Yuserved as the senior manager at DA HUA CPA from November 2012 to May 2016. Previously, Mr. Yu served as the manager at Crowe Horwath (Hong Kong) CPA.Mr. Yu holds a bachelor degree in accounting and finance from University of Auckland and postgraduate diploma in accounting from University of Auckland.36Kegang Peng served as the Vice Chairman of the board of directors C Media Limited from October 2014 to the consummation of the asset exchangetransactions, and is now a member of the Company’s board of directors. Previously, from 2012 to 2014, Mr. Peng was chairman of the board and founder of JiangsuSuqian Jinghaiboyuan Information and Technology Co., Ltd. Mr. Peng studied at Beijing University of Aeronautics and Astronautics majoring computer andapplication.application.Chuang (Vincent) Tao was appointed as a member of the Board effective on August 25, 2018. Dr. Tao was the Chairman of SuperEngine Suzhou from 2014to 2017. Dr. Tao has been the president of the Seasky Angel Investment Alliance of Shanghai since 2015. Dr. Tao received his Bachelor Degree of geographicinformation and telemetry from Wuhan University in China in 1990 and received his Ph.D. from University of Calgary, Canada in 1997.Dennis Galgano was appointed as a director of the Company following the consummation of the asset exchange agreement. He was a registered consultantwith Morgan Joseph Triartisan LLC from November 2016 until October 2017, and previously served as vice chairman and head of international investment bankingfor Morgan Joseph Triartisan LLC, which is a registered broker dealer engaged in the investment banking and financial advisory industry. Mr. Galgano received aB.S. degree in Chemistry from St. John’s University and an M.B.A. from The Wharton School in 1972.Jin Shi was appointed as a director of the Company following the consummation of the asset exchange transactions. Mr. Shi has served as the managingpartner of Chum Capital Group, a merchant bank focused on helping Chinese growth companies to access global capital, since January 2013. Mr. Shi has also servedas a director of Seven Stars Cloud Group, Inc. (NASDAQ: SSC), a premium video on demand service provider, since January 2014, and joined the audit committee ofits board of directors in March 2016. He also served as a director and member of the audit committee of Pingtan Marine Enterprise, Ltd. (NASDAQ: PME), a marineenterprise group primarily engaged in ocean fishing through its subsidiaries. Mr. Shi received an EMBA degree from the Guanghua Management School of BeijingUniversity, and a Bachelor’s degree of science in Chemical Engineering from Tianjin University.Jiming Ha was appointed as a director of the Company following the consummation of the asset exchange agreement, and has also served as a seniorresearch fellow for the China Finance 40 Forum since March 1, 2018, and previously served as a managing director of Goldman Sachs from January 2017 to April2017. Mr. Ha served as a vice chairman and chief investment strategist of the Investment Strategy Group for Private Wealth Management at Goldman Sachs from2010 to January 2017. Mr. Ha holds a PhD in Economics from the University of Kansas and Master’s and Bachelor’s degrees of science from Fudan University.Zhihao Xu was appointed as a director of the Company following the consummation of the asset exchange transactions. Mr. Xu has served as the chiefexecutive officer of Geely Group Co., Ltd., in Hangzhou, China, since December 2017, and previously served as the chairman and chief executive officer of BeijingDingchengrenhe Investment Co., Ltd., a funds management company, from January 2017 to December 2017. Mr. Xu served as the chairman of president of HNAUSOLV CO., LTD., and the chief innovation officer of HNA Logistics Group from January 2014 to December 2016, and prior to that as the chairman of GopayInnovation Technology Co. Ltd., an online payment system operator supporting online money transfers, from April 2012 to January 2014. Mr. Xu graduated from theBusiness School of Renmin University of China and from the Wudaokou Finance College of Tsinghua University with a fund qualification certificate and securitiesqualification certificate.B. COMPENSATION.Compensation of Directors and Executive OfficersFor the ninemonth transition period ended September 30, 2018 and the fiscal year ended December 31, 2017, we did not pay any cash compensation to ourexecutive officers of LK Technology Ltd. and a to our directors for serving on our board of directors of LK Technology Ltd.37Other than nonemployee directors, we do not intend to compensate directors for serving on our board of directors or any of its committees. We do,however, intend to reimburse each member of our board of directors for outofpocket expenses incurred by each director in connection with attending meetings ofthe board of directors and its committees.AdministrationThe Incentive Plan is administered by our board of directors, or at the discretion of the board, by our compensation committee. Our board of directors hasdelegated authority to our compensation committee to administer the Incentive Plan. Subject to the terms of the Incentive Plan, the compensation committee mayselect participants to receive awards, determine the types of awards and terms and conditions of awards, and interpret provisions of the Incentive Plan.The ordinary shares issued or to be issued under the Incentive Plan consist of authorized but unissued shares. If any ordinary shares covered by an awardare not purchased or are forfeited, or if an award otherwise terminates without delivery of any ordinary shares, then the number of ordinary shares counted againstthe aggregate number of ordinary shares available under the plan with respect to the award will, to the extent of any such forfeiture or termination, again be availablefor making awards under the Incentive Plan.EligibilityAwards may be made under the Incentive Plan to our employees, officers, directors, consultants or advisers or to any of our affiliates, and to any otherindividual whose participation in the Incentive Plan is determined to be in our best interests by our board of directors.Amendment or Termination of the PlanOur board of directors may terminate or amend the Incentive Plan at any time and for any reason. No amendment, however, may adversely impair the rightsof grantees with respect to outstanding awards. The Incentive Plan has a term of ten years. Amendments will be submitted for shareholder approval to the extentrequired by applicable stock exchange listing requirements or other applicable laws.OptionsThe Incentive Plan permits the granting of options to purchase ordinary shares intended to qualify as incentive share options under the Internal RevenueCode and share options that do not qualify as incentive share options, or nonqualified share options.The exercise price of each share option may not be less than 100% of the fair market value of our ADSs representing ordinary shares on the date of grant.In the case of certain 10% shareholders who receive incentive share options, the exercise price may not be less than 110% of the fair market value of our ADSsrepresenting ordinary shares on the date of grant. An exception to these requirements is made for options that we grant in substitution for options held byemployees of companies that we acquire. In such a case the exercise price is adjusted to preserve the economic value of the employee’s share option from his or herformer employer.The term of each share option is fixed by the compensation committee and may not exceed ten years from the date of grant. The compensation committeedetermines at what time or times each option may be exercised and the period of time, if any, after retirement, death, disability or termination of employment duringwhich options may be exercised.Options may be made exercisable in installments. The award agreement provides the vesting of the options. Exercisability of options may be accelerated bythe compensation committee.38In general, an optionee may pay the exercise price of an option by (1) cash or check (in U.S. dollars or Renminbi or other local currency as approved by thecompensation committee), (2) ordinary shares held for such period of time as may be required by the compensation committee, (3) delivery of a notice of a marketorder with a broker with respect to ordinary shares then issuable upon exercise of an option, and that the broker has been directed to pay us a sufficient portion ofnet proceeds of the sale in satisfaction of the exercise price, provided that payment of such proceeds is then made to us upon settlement of such sale, (4) otherproperty acceptable to the compensation committee with a fair market value equal to the exercise price, (5) cashless exercise or (6) any combination of the foregoing.Share options granted under the Incentive Plan may not be sold, transferred, pledged, or assigned other than by will or under applicable laws of descentand distribution. However, we may permit limited transfers of nonqualified options for the benefit of immediate family members of grantees to help with estateplanning concerns or pursuant to a domestic relations order in settlement of marital property rights.Other AwardsThe compensation committee may also award under the Incentive Plan:1.ordinary shares subject to restrictions;2.deferred ordinary shares, credited as deferred ordinary share units, but ultimately payable in the form of unrestricted ordinary shares inaccordance with the terms of the grant or with the participant’s deferral election;3.ordinary share units subject to restrictions;4.unrestricted ordinary shares, which are ordinary shares issued at no cost or for a purchase price determined by the compensation committee whichare free from any restrictions under the 2011 Omnibus Incentive Plan;5.dividend equivalent rights entitling the grantee to receive credits for dividends that would be paid if the grantee had held a specified number ofordinary shares; or6.a right to receive a number of ordinary shares or, in the discretion of the compensation committee, an amount in cash or a combination of ordinaryshares and cash, based on the increase in the fair market value of the ADSs representing ordinary shares underlying the right during a statedperiod specified by the compensation committee.Effect of Certain Corporate TransactionsCertain change of control transactions involving us may cause awards granted under the Incentive Plan to vest, unless the awards are continued orsubstituted for by the surviving company in connection with the corporate transaction.Unless otherwise provided in the appropriate option agreement on the date of grant or provided by our board of directors thereafter with the consent of thegrantee, options granted under the Incentive Plan become exercisable in full following (1) a dissolution of our company or a merger, consolidation or reorganizationof our company with one or more other entities in which we are not the surviving entity, (2) a sale of substantially all of our assets to another person or entity, or (3)any transaction (including without limitation a merger or reorganization in which we are the surviving entity) which results in any person or entity owning 50% ormore of the combined voting power of all classes of our shares.39Adjustments for Dividends and Similar EventsThe compensation committee will make appropriate adjustments in outstanding awards and the number of ordinary shares available for issuance under theIncentive Plan, including the individual limitations on awards, to reflect ordinary share dividends, stock splits and other similar events.C. BOARD PRACTICES.Board of DirectorsOur board of directors consists of six members being Messrs. Xuesong Song, Kegang Peng, Dennis Galgano, Jin Shi, Jiming Ha and Zhiaho Xu. Ourdirectors hold office until our annual meeting of shareholders, where their successors will be duly elected and qualified, or until the directors’ death, resignation orremoval, whichever is earlier. Our directors are not subject to a term of office and hold office until their resignation, death or incapacity or until their respectivesuccessors have been elected and qualified in accordance with our fourth amended and restated memorandum of association and articles of association. A directorwill be removed from office if, among other things, the director (1) becomes bankrupt, (2) dies or becomes of unsound mind, or (3) is absent from meetings of ourboard of directors for six consecutive months without leave and our board of directors resolves that the office is vacated. A director is not entitled to any specialbenefits upon termination of service with the company.Director IndependenceOur board of directors consists of six members; Messrs. Dennis Galgano, Jin Shi, Jiming Ha and Zhihao Xu have been determined by us to be independentdirectors within the meaning of the independent director guidelines of the NASDAQ Corporate Governance Rules (the “NASDAQ Rules”).Committees of Our Board of DirectorsTo enhance our corporate governance, we established three committees under our board of directors: an audit committee, a compensation committee, and anominating and corporate governance committee. We have adopted a charter for each of these committees. The committees have the following functions andmembers.Audit CommitteeOur audit committee reports to our board of directors regarding the appointment of our independent public accountants, the scope and results of ourannual audits, compliance with our accounting and financial policies and management’s procedures and policies relating to the adequacy of our internal accountingcontrols. Our audit committee consists of Messrs. Dennis Galgano, Jin Shi, and Jiming Ha. Mr. Galgano, having accounting and financial management expertise,serves as the chairman of the audit committee and is an “audit committee financial expert” as defined by the rules and regulations of the SEC. Our board of directorshas determined that each of these persons meet the definition of an “independent director” under the applicable NASDAQ Rules and under Rule 10A3 of theSecurities Exchange Act of 1934, as amended (the “Exchange Act”).Our audit committee is responsible for, among other things:●the appointment, evaluation, compensation, oversight and termination of the work of our independent auditor (including resolution of disagreementsbetween management and the independent auditor regarding financial reporting);●an annual performance evaluation of the audit committee;●establishing procedures for the receipt, retention and treatment of complaints regarding accounting, internal accounting controls, auditing matters orpotential violations of law, and the confidential, anonymous submission by our employees of concerns regarding questionable accounting or auditingmatters or potential violations of law;40●ensuring that it receives an transition report from our independent auditor describing our internal control procedures and any steps taken to deal withmaterial control deficiencies and attesting to the auditor’s independence and describing all relationships between the auditor and us;●reviewing our annual audited financial statements and quarterly financial statements with management and our independent auditor;●reviewing and approving all proposed related party transactions;●reviewing our policies with respect to risk assessment and risk management;●meeting separately and periodically with management and our independent auditor; and●reporting regularly to our board of directors.Compensation CommitteeOur compensation committee assists the board of directors in reviewing and approving the compensation structure of our directors and executive officers,including all forms of compensation to be provided to our directors and executive officers. In addition, the compensation committee reviews share compensationarrangements for all of our other employees. Members of the compensation committee are not prohibited from direct involvement in determining their owncompensation. Our chief executive officer is not permitted to be present at any committee meeting during which his or her compensation is deliberated. Ourcompensation committee consists of Dennis Galgano and Jin Shi, with Mr. Shi serving as the chairman of the compensation committee. Our board of directors hasdetermined that each of these persons meet the definition of “independent director” under the applicable requirements of the NASDAQ Rules.Our compensation committee is responsible for, among other things:●reviewing and approving corporate goals and objectives relevant to the compensation of our chief executive officer, evaluating the performance of ourchief executive officer in light of those goals and objectives and setting the compensation level of our chief executive officer based on this evaluation;●reviewing and making recommendations to the board with respect to the compensation of our executives, incentive compensation and equitybasedplans that are subject to board approval; and●providing annual performance evaluations of the compensation committee.Nominating and Corporate Governance CommitteeOur nominating and corporate governance committee assists the board of directors in identifying and selecting or recommending individuals qualified tobecome our directors, developing and recommending corporate governance principles and overseeing the evaluation of our board of directors and management. Ournominating and corporate governance committee consists of Jiming Ha and Zhihao Xue, with Mr. Ha serving as the chairman of the nominating and corporategovernance committee. Our board of directors has determined that each of these persons meet the definition of “independent director” under the applicablerequirements of the NASDAQ Rules.Our nominating and corporate governance committee is responsible for, among other things:●selecting and recommending to our board nominees for election or reelection to our board, or for appointment to fill any vacancy;●reviewing annually with our board the current composition of the board of directors with regards to characteristics such as independence, age, skills,experience and availability of service to us;●selecting and recommending to our board the names of directors to serve as members of the audit committee and the compensation committee, as wellas the nominating and corporate governance committee itself; advising our board of directors periodically with regards to significant developments inthe law and practice of corporate governance as well as our compliance with applicable laws and regulations, and making recommendations to ourboard of directors on all matters of corporate governance and on any remedial action to be taken; and●monitoring compliance with our code of business conduct and ethics, including reviewing the adequacy and effectiveness of our procedures to ensureproper compliance.41Code of Business Conduct and EthicsOur board of directors adopted a code of business conduct and ethics applicable to our directors, officers and employees.Duties of DirectorsUnder British Virgin Islands law, our directors have a duty to act honestly, in good faith and with a view to our best interests. Our directors also have a dutyto exercise care, diligence and skills that a reasonably prudent person would exercise in comparable circumstances. In fulfilling their duty of care to us, our directorsmust ensure compliance with our memorandum of association and articles of association. We have the right to seek damages if a duty owed by our directors isbreached.The functions and powers of our board of directors include, among others:●appointing officers and determining the term of office of the officers;●authorizing the payment of donations to religious, charitable, public or other bodies, clubs, funds or associations as deemed advisable;●exercising the borrowing powers of the company and mortgaging the property of the company;●executing cheques, promissory notes and other negotiable instruments on behalf of the company; and●maintaining or registering a register of mortgages, charges or other encumbrances of the company.Remuneration and BorrowingThe directors may receive such remuneration as our board of directors may determine from time to time. Each director is entitled to be repaid or prepaid alltraveling, hotel and incidental expenses reasonably incurred or expected to be incurred in attending meetings of our board of directors or committees of our board ofdirectors or shareholder meetings or otherwise in connection with the discharge of his or her duties as a director. The compensation committee will assist thedirectors in reviewing and approving the compensation structure for the directors.Our board of directors may exercise all the powers of the company to borrow money and to mortgage or charge our undertakings and property or any partthereof, to issue debentures, debenture stock and other securities whenever money is borrowed or as security for any debt, liability or obligation of the company orof any third party.QualificationA director is not required to hold shares as a qualification to office.42Limitation on Liability and Other Indemnification MattersBritish Virgin Islands law does not limit the extent to which a company’s memorandum of association and articles of association may provide forindemnification of officers and directors, except to the extent any such provision may be held by the British Virgin Islands courts to be contrary to public policy,such as to provide indemnification against civil fraud or the consequences of committing a crime.Under our memorandum of association and articles of association, we may indemnify our directors, officers and liquidators against all expenses, includinglegal fees, and against all judgments, fines and amounts paid in settlement and reasonably incurred in connection with civil, criminal, administrative or investigativeproceedings to which they are party or are threatened to be made a party by reason of their acting as our director, officer or liquidator. To be entitled toindemnification, these persons must have acted honestly and in good faith with a view to the best interest of the company and, in the case of criminal proceedings,they must have had no reasonable cause to believe their conduct was unlawful.Compensation Committee Interlocks and Insider ParticipationNone of the members of our compensation committee is an officer or employee of our company. None of our executive officers currently serves, or in thepast year has served, as a member of the board of directors or compensation committee of any entity that has one or more executive officers serving on our board ofdirectors or compensation committee.Employment AgreementsOn August 19, 2018, the Company entered into an Employment Agreement (the “Song Agreement”) with Mr. Xuesong Song, to serve as the ChiefExecutive Officer of the Company for a fouryear term, subject to renewal. Under the terms of the Song Agreement, Mr. Song will receive no salary for his servicesbut will be eligible for an annual cash bonus in the Board’s sole discretion.On August 19, 2018, the Company entered into an Employment Agreement (the “Yu Agreement”) with Mr. Jie Yu, to serve as the Chief Financial Officer ofthe Company for a fouryear term, subject to renewal. Under the terms of the Yu Agreement, Mr. Yu will receive an annual salary of RMB700,000, and will be eligiblefor an annual cash bonus in the Board’s sole discretion.D. EMPLOYEES.As of September 30, 2018 and December 31, 2017, we had a total of 107 and 37 fulltime employees, including 48 and 13 in research and development, 9 and 2in sales and marketing and the rest in a variety of other divisions, respectively. All of our employees are fulltime employees. None of our employees is currentlyrepresented by a union and/or collective bargaining agreements. We believe that we have good relations with our employees and since our inception we have hadno history of work stoppages or union organizing campaigns.E. SHARE OWNERSHIP.The following table provides information as to the beneficial ownership of our ordinary shares as of October 10, 2018, by the persons listed. Beneficialownership of shares is determined under the rules of the SEC and generally includes any shares over which a person exercises sole or shared voting or investmentpower. For purposes of the following table, a person is deemed to have beneficial ownership of any ordinary shares if such person has the right to acquire suchshares within 60 days of October 10, 2018. For purposes of computing the percentage of outstanding shares held by each person, any shares that such person hasthe right to acquire within 60 days after of October 10, 2018 are deemed to be outstanding, but are not deemed to be outstanding for the purpose of computing thepercentage ownership of any other person. Except as otherwise noted, the persons named in the table have sole voting and investment power with respect to all ofthe ordinary shares beneficially owned by them. Unless otherwise indicated, the address of each person listed is c/o Luokung Technologies, LAB 32, SOHO 3Q, No9, Guanghua Road, Chaoyang District, Beijing, People’s Republic of China.43Percentage ownership in the following table is based on 199,317,558 ordinary shares outstanding on October 10, 2018.Number ofsharesPercent ofclassDirectors and named executive officersCharm Dragon International Limited (1)4,030,8822.03%Xuesong Song, Chairman, Chief Executive Officer and Director(2)38,156,43019.30%Kegang Peng, Vice President and Director (3)17,231,9558.71%Dennis Galgano, Director75,796*%Jin Shi, DirectorJiming Ha, DirectorZhihao Xu, Director (4)7,579,1843.83%Dongpu Zhang, President (5)2,321,7921.17%Chuang Tao, Director (6)1,221,996*%Directors and executive officers as a group (10 persons)66,587,15233.69%(1)Charm Dragon International Limited is a British Virgin Islands company controlled by Mr. Xuesong Song.(2)Consists of (i) 4,030,882 shares owned directly by Charm Dragon International Limited, a British Virgin Islands company and (ii) 22,624,793 shares owneddirectly by Bravo First Development Limited, a British Virgin Islands company. Mr. Xuesong Song is the controlling shareholder of Bravo First DevelopmentLimited. Mr. Xuesong Song is the sole director of Charm Dragon International Limited.(3)Consists of 17,231,955 shares owned directly by Plenty Prestige Enterprises Limited, a British Virgin Islands company. Mr. Kegang Peng is the sole director ofPlenty Prestige Enterprises Limited.(4)Consists of 7,579,184 shares directly owned by Geely Group Limited., a Chinese company. Mr. Zhihao Xu is the Chief Executive Officer of Geely GroupLimited.(5)Consists of 2,321,792 shares owned directly by Genoa Peak Limited, a British Virgin Islands company. Mr. Dongpu Zhang controls Genoa Peak Limited.(6)Consists of 1,221,996 shares owned directly by Globalearth Holdings Limited, a British Virgin Islands company. Mr. Chuang Tao controls Globalearth HoldingsLimited.*Represents less than 1% of shares outstandingITEM 7. MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS.A. MAJOR SHAREHOLDERSPlease refer to Item 6.E “Directors, Senior Management and Employees — Share Ownership.”To our knowledge, (A) we are not directly or indirectly owned or controlled by (i) another corporation or (ii) any foreign government and (B) there are noarrangements (including any announced or expected takeover bid), the operation of which may at a subsequent date result in a change in our control.The voting rights of our major shareholders do not differ from the voting rights of other holders of the same class of shares.44B. RELATED PARTY TRANSACTIONS. BUSINESS RELATIONSHIPS.Our subsidiaries, consolidated affiliated entities, and the subsidiaries of the consolidated affiliated entities have engaged, during the ordinary course ofbusiness, in a number of customary transactions with each other. All of these intercompany balances have been eliminated in consolidation.As of December 31, 2017, we had amounts due from related parties, C Media Limited and Ya Tuo Ji International Consultancy (Beijing) Limited, in theamounts of $11.8 million and $0.2 million, respectively. These amounts due from related parties are short term in nature, noninterest bearing, unsecured andrepayable on demand.As of December 31, 2017, we had amounts due to related parties, Mr. Xuesong Song, our chairman and chief executive officer, Thumb Beijing Branch andThumb Shenzhen Branch, in the amounts of $2.9 million, $0.6 million and $0.03 million, respectively. These amounts due to related parties are short term in nature,noninterest bearing, unsecured and payable on demand.We are party to a series of control agreements with Beijing Zhong Chuan Shi Xun. In addition, our chief executive officer, Mr. Xuesong Song, serves as andofficer of Beijing Zhong Chuan Shi Xun and is a shareholder of Beijing Zhong Chuan Shi Xun. The following table sets forth the relationship of Mr. Song withBeijing Zhong Chuan Shi Xun:NameRelationship withLuokung TechnologyRelationship withBeijing Zhong Chuan Shi XunPercentageOwnership Interest inBeijing Zhong Chuan Shi XunXuesong SongChief Executive OfficerChief Executive Officer61.83%C. INTERESTS OF EXPERTS AND COUNSEL.None.ITEM 8. FINANCIAL INFORMATION.A. CONSOLIDATED STATEMENTS AND OTHER FINANCIAL INFORMATION.See “Item 18. Financial Statements.”Legal ProceedingsTo our knowledge, other than as described below there are no material legal proceedings threatened against us. From time to time, we may be subject tovarious claims and legal actions arising in the ordinary course of business. Following the consummation of the AEA, we became successor in interest to the legalproceedings described below.Litigation with Shanghai Fusheng Weier Intelligent Control Technology Co., Ltd.On January 22, 2016, Zhong Chuan Rui You and Shanghai Fusheng Weier Intelligent Control Technology Co., Ltd. (“Fusheng Weier”) signed a contract forequipment of $1,652,842 (RMB10,800,000). Since Zhong Chuan Rui You did not make the payments of $1,126,381 (RMB7,360,000) on the due dates, Fusheng Weierfiled a lawsuit against Zhong Chuan Rui You in Shanghai Xuhui District People's Court on October 8, 2016. On March 9, 2017, Xuhui District People's Court issuedthe verdict requiring Zhong Chuan Rui You to pay the overdue debts. In August 2017, C Media Limited made the payment of $512,075 (RMB3,346,000). Theremaining balance has been accrued in accounts payable. The payment schedule for the remaining balance is being negotiated by the two parties. On February 5,2018, a hearing was held adding Zhong Chuan Shi Xun as a defendant. The Group plans to settle the remaining balance within one year.45Lawsuit with Gansu Jinlun Culture Media Co., Ltd.On August 22, 2014, Zhong Chuan Rui You and Gansu Jinlun Culture Media Co., Ltd. (“Gansu Jinlun”) signed a “Lanzhou Railway Bureau AirconditionedTrain WiFi Network System Advertising Operation Rights Agreement” for advertising on 72 trains of $1,467,880 (RMB9,604,633). Due to the dispute on theproject implementation, Zhong Chuan Rui You did not pay the advertising fee. On August 23, 2017, Gansu Jinlun filed a lawsuit with Gansu Intermediate People'sCourt. On December 19, 2017, Gansu Intermediate People's Court issued a verdict, ruling that Zhong Chuan Rui You settle the overdue advertising fee. Since only 18out of 72 trains have been installed with Wifi network system, Zhong Chuan Rui You disputed and appealed to the verdict. The next court trial date has not yet beendetermined. C Media and Gansu Jinlun are negotiating a potential settlement to resume the contract. According to the legal counsel, it is probable that the settlementwill amount to approximately $459,000 (RMB3,000,000); therefore, this amount has been accrued in accounts payable as at December 31, 2017.Litigation with Shenzhen Hua Xun Fang Zhou Technology Co., Ltd.On June 16, 2015, Zhong Chuan Rui You signed a cooperation agreement with Shenzhen Hua Xun Fang Zhou Technology Co., Ltd. (“Shenzhen Hua Xun”)and Xuesong Song, a major shareholder of C Media Limited. Pursuant to this agreement, Zhong Chuan Rui You procures equipment from Shenzhen Hua Xun.Xuesong Song acts as a joint liability guarantor for the entire debts of Zhong Chuan Rui You under this agreement. As Zhong Chuan Rui You did not make thepayments on the due dates, Shenzhen Hua Xun filed a lawsuit with Shenzhen Baoan District People's Court on May 31, 2016. On November 1, 2016, Zhong ChuanRui You, Xuesong Song and Shenzhen Hua Xun reached a settlement in Shenzhen Baoan District People's Court to settle $1,735,389 (RMB11,355,000) in fourinstalments. On December 30, 2017, the debt was assigned to C Media Limited.Dividend PolicyWe currently intend to retain all of our available funds and future earnings for use in the operation and expansion of our business and do not anticipatepaying cash dividends in the foreseeable future. Under the terms of our Amended and Restated Memorandum and Articles of Association the declaration andpayment of any dividends in the future will be determined by our board of directors, in its discretion, and will depend on a number of factors, including our earnings,capital requirements and overall financial condition and our ability to receive dividends from our subsidiaries. If we pay any dividends, we will pay our ADS holders’dividends with respect to their underlying shares to the same extent as holders of our ordinary shares, subject to the terms of the deposit agreement, including thefees and expenses payable thereunder. Cash dividends on our ordinary shares, if any, will be paid in U.S. dollars.Our ability to receive dividends from our subsidiaries may limit our ability to pay dividends on our ordinary shares. See Risk Factors – Risks Related toDoing Business in China – Our holding company structure may limit the payment of dividends” and “Item 10. Additional Information – D. Exchange Controls –Dividend Distribution”.B. SIGNIFICANT CHANGES.N/AITEM 9. THE OFFER AND LISTINGA. OFFER AND LISTING DETAILS.Markets and Share Price HistoryOur ordinary shares are not currently listed on any trading market. Our American Depository Shares (“ADSs”) were voluntarily delisted from the NASDAQCapital Market on September 19, 2018. We have applied to NASDAQ for the listing of our ordinary shares on the NASDAQ Capital Market and received an approvalfor listing of Ordinary Shares on August 6, 2018, and as of the date of this transition report, that application and approval are currently under review.46The table below sets forth the high and low reported sales prices in dollars of our ordinary shares, which are represented by ADSs, as reported byNASDAQ in the periods as indicated:ADSHighLowAnnual Highs and Lows (as of the fiscal year end 09/30 for the five most recent full financial years)*20175.592.67201610.21.62Quarterly Highs and Lows (for the two most recent full financial years and any subsequent period, based on calendarquarter end)*2018Third Quarter8.006.30Second Quarter8.824.25First Quarter6.403.702017Fourth Quarter5.592.91Third Quarter3.992.67Second Quarter4.063.07First Quarter5.152.832016Fourth Quarter6.594.20Third Quarter10.201.62Second Quarter3.101.97First Quarter3.602.12Monthly Highs and Lows (for the most recent six months)September 20188.006.41August 20187.706.63July 20187.506.30June 20188.827.55May 20187.805.92April 20187.454.25*The Company effected a 1for10 reverse stock split of its ordinary shares on November 6, 2012 (the “Reverse Split”). The ratio between each AmericanDepositary Share (“ADS”) and its underlying ordinary share postReverse Split remains the same, namely, one ADR remains to represent one ordinary sharepost the Reverse Split. The price listed here after November 6, 2012 reflected the effect from the Reverse Split.B. PLAN OF DISTRIBUTION.Not Applicable.C. MARKETS.Our ordinary shares are not currently listed on any trading market. Our ADSs were voluntarily delisted from the NASDAQ Capital Market on September 19,2018. We have applied to NASDAQ for the listing of our ordinary shares on the NASDAQ Capital Market and received an approval for listing of Ordinary Shares onAugust 6, 2018, and as of the date of this transition report, that application and approval are currently under review.47D. SELLING SHAREHOLDERS.Not applicable.E. DILUTION.Not applicable.F. EXPENSES OF THE ISSUE.Not applicable.ITEM 10. ADDITIONAL INFORMATION.A. SHARE CAPITALNot applicable.B. MEMORANDUM AND ARTICLES OF ASSOCIATIONWe are a British Virgin Islands company incorporated with limited liability and our affairs are governed by the provisions of our memorandum of associationand articles of association, as amended and restated from time to time, and by the provisions of applicable British Virgin Islands law.Our memorandum of association and articles of association authorize the issuance of up to 251,000,000 shares, which are designated into (i) 250,000,000 ofordinary shares of the Company (“Ordinary Shares”), and (ii) 1,000,000 preferred shares of the Company (“Preferred Shares”), in each case with the rights,preferences and privileges as set out in the memorandum and articles of association of the Company.Please see below for a description of our ADSs under “Item 12. Description of Securities Other Than Equity Securities – D. American Depository Shares.”The following is a summary of the material provisions of our ordinary shares and our memorandum of association and articles of association.Ordinary SharesAll of our issued and outstanding ordinary shares are fully paid and nonassessable. Holders of our ordinary shares who are nonresidents of the BritishVirgin Islands may freely hold and vote their shares.Subject to the memorandum and articles of association (and, for greater clarity, without prejudice to any special rights conferred thereby on the holders ofany other shares), an Ordinary Share of the Company confers on the holder:(a)the right to one vote per Ordinary Share at a meeting of the members or on any resolution of members;(b)the right to an equal share in any distribution paid by the Company; and(c)the right to an equal share in the distribution of the surplus assets of the Company on a winding up;48Subject to the memorandum and articles of association (and, for greater clarity, without prejudice to any special rights conferred thereby on the holders ofany other shares), a Preferred Share of the Company confers on the holder:(a)the right to 399 votes per Preferred Share at a meeting of the members or on any resolution of members;(b)the right to an equal share in any distribution paid by the Company;(c)the right to an equal share in the distribution of the surplus assets of the Company on a winding up;(d)be freely transferable, in whole or in part, by Mr. Xuesong Song to any third party through one or more Private Transactions, subject toApplicable Law; and(e)be freely transferable, in whole or in part, by Mr. Xuesong Song to any third party through one or more Public Transactions, subject to ApplicableLaw and Automatic Conversion of such Preferred Share(s) into Ordinary Share(s).Each Preferred Share shall be automatically converted at any time after issue and without the payment of any additional sum into an equal number of fullypaid Ordinary Shares upon the conclusion of any transfer by Mr. Xuesong Song to any third party through one or more Public Transactions.Limitation on Liability and Indemnification MattersUnder British Virgin Islands law, each of our directors and officers, in performing his or her functions, is required to act honestly and in good faith with aview to our best interests and exercise the care, diligence and skill that a reasonably prudent person would exercise in comparable circumstances. Our memorandumof association and articles of association provide that, to the fullest extent permitted by British Virgin Islands law or any other applicable laws, our directors will notbe personally liable to us or our shareholders for any acts or omissions in the performance of their duties. Such limitation of liability does not affect the availabilityof equitable remedies such as injunctive relief or rescission. These provisions will not limit the liability of directors under United States federal securities laws.We may indemnify any of our directors or anyone serving at our request as a director of another entity against all expenses, including legal fees, andagainst all judgments, fines and amounts paid in settlement and reasonably incurred in connection with legal, administrative or investigative proceedings. We mayonly indemnify a director if he or she acted honestly and in good faith with the view to our best interests and, in the case of criminal proceedings, the director hadno reasonable cause to believe that his or her conduct was unlawful. The decision of our board of directors as to whether the director acted honestly and in goodfaith with a view to our best interests and as to whether the director had no reasonable cause to believe that his or her conduct was unlawful, is in the absence offraud sufficient for the purposes of indemnification, unless a question of law is involved. The termination of any proceedings by any judgment, order, settlement,conviction or the entry of no plea does not, by itself, create a presumption that a director did not act honestly and in good faith and with a view to our best interestsor that the director had reasonable cause to believe that his or her conduct was unlawful. If a director to be indemnified has been successful in defense of anyproceedings referred to above, the director is entitled to be indemnified against all expenses, including legal fees, and against all judgments, fines and amounts paidin settlement and reasonably incurred by the director or officer in connection with the proceedings.We may purchase and maintain insurance in relation to any of our directors or officers against any liability asserted against the directors or officers andincurred by the directors or officers in that capacity, whether or not we have or would have had the power to indemnify the directors or officers against the liabilityas provided in our memorandum of association and articles of association.Insofar as indemnification for liabilities arising under the Securities Act may be permitted for our directors or officers under the foregoing provisions, wehave been informed that in the opinion of the Securities and Exchange Commission, such indemnification is against public policy as expressed in the Securities Actand is therefore unenforceable as a matter of United States law.49Differences in Corporate LawWe were incorporated under, and are governed by, the laws of the British Virgin Islands. The corporate statutes of the State of Delaware and the BritishVirgin Islands are similar, and the flexibility available under British Virgin Islands law has enabled us to adopt memorandum of association and articles of associationthat will provide shareholders with rights that do not vary in any material respect from those they would enjoy if we were incorporated under the Delaware GeneralCorporation Law, or Delaware corporate law. Set forth below is a summary of some of the differences between provisions of the BVI Act applicable to us and thelaws application to companies incorporated in Delaware and their shareholders.Director’s Fiduciary DutiesUnder Delaware corporate law, a director of a Delaware corporation has a fiduciary duty to the corporation and its stockholders. This duty has twocomponents: the duty of care and the duty of loyalty. The duty of care requires that a director act in good faith, with the care that an ordinarily prudent personwould exercise under similar circumstances. Under this duty, a director must inform himself of, and disclose to stockholders, all material information reasonablyavailable regarding a significant transaction. The duty of loyalty requires that a director act in a manner he reasonably believes to be in the best interests of thecorporation. He must not use his corporate position for personal gain or advantage. This duty prohibits selfdealing by a director and mandates that the bestinterest of the corporation and its stockholders take precedence over any interest possessed by a director, officer or controlling stockholder and not shared by thestockholders generally. In general, actions of a director are presumed to have been made on an informed basis, in good faith and in the honest belief that the actiontaken was in the best interests of the corporation. However, this presumption may be rebutted by evidence of a breach of one of the fiduciary duties. Should suchevidence be presented concerning a transaction by a director, a director must prove the procedural fairness of the transaction, and that the transaction was of fairvalue to the corporation.British Virgin Islands law provides that every director of a British Virgin Islands company in exercising his powers or performing his duties shall acthonestly and in good faith and in what the director believes to be in the best interests of the company. Additionally, the director shall exercise the care, diligence andskill that a reasonable director would exercise in the same circumstances taking into account the nature of the company, the nature of the decision and the positionof the director and his responsibilities. In addition, British Virgin Islands law provides that a director shall exercise his powers as a director for a proper purpose andshall not act, or agree to the company acting, in a manner that contravenes British Virgin Islands law or the memorandum association or articles of association of thecompany.Amendment of Governing DocumentsUnder Delaware corporate law, with very limited exceptions, a vote of the stockholders is required to amend the certificate of incorporation. Under BritishVirgin Islands law and our memorandum of association and articles of association, (i) our shareholders may amend our memorandum of association and articles ofassociation by a resolution of shareholders, or (ii) our board of directors may amend our memorandum of association and articles of association by a resolution ofdirectors without a requirement for a resolution of shareholders so long as the amendment does not:●restrict the rights of the shareholders to amend the memorandum of association and articles of association;●change the percentage of shareholders required to pass a resolution of shareholders to amend the memorandum of association and articles ofassociation;●amend the memorandum of association and articles of association in circumstances where the memorandum of association and articles ofassociation cannot be amended by the shareholders; or●amend the provisions of memorandum of association or the articles of association pertaining to “rights attaching to shares,” “rights not varied bythe issue of the shares pari passu,” “variation of rights” and “amendment of memorandum and articles”.50Written Consent of DirectorsUnder Delaware corporate law, directors may act by written consent only on the basis of a unanimous vote. Under British Virgin Islands law, directors’consents need only a majority of directors signing to take effect.Written Consent of ShareholdersUnder Delaware corporate law, unless otherwise provided in the certificate of incorporation, any action to be taken at any annual or special meeting ofstockholders of a corporation, may be taken by written consent of the holders of outstanding stock having not less than the minimum number of votes that wouldbe necessary to take such action at a meeting. As permitted by British Virgin Islands law, shareholders’ consents need only a majority of shareholders signing totake effect. Our memorandum of association and articles of association provide that shareholders may approve corporate matters by way of a resolution consentedto at a meeting of shareholders or in writing by a majority of shareholders entitled to vote thereon.Shareholder ProposalsUnder Delaware corporate law, a shareholder has the right to put any proposal before the annual meeting of shareholders, provided it complies with thenotice provisions in the governing documents. A special meeting may be called by the board of directors or any other person authorized to do so in the governingdocuments, but shareholders may be precluded from calling special meetings. British Virgin Islands law and our memorandum of association and articles ofassociation provide that our directors shall call a meeting of the shareholders if requested in writing to do so by shareholders entitled to exercise at least 30% of thevoting rights in respect of the matter for which the meeting is requested.Sale of AssetsUnder Delaware corporate law, a vote of the stockholders is required to approve the sale of assets only when all or substantially all assets are being sold. Inthe British Virgin Islands, shareholder approval is required when more than 50% of the company’s total assets by value are being disposed of or sold.Dissolution; Winding UpUnder Delaware corporate law, unless the board of directors approves the proposal to dissolve, dissolution must be approved by shareholders holding100% of the total voting power of the corporation. Only if the dissolution is initiated by the board of directors may it be approved by a simple majority of thecorporation’s outstanding shares. Delaware corporate law allows a Delaware corporation to include in its certificate of incorporation a supermajority votingrequirement in connection with dissolutions initiated by the board. As permitted by British Virgin Islands law and our memorandum of association and articles ofassociation, we may be voluntarily liquidated under Part XII of the BVI Act by resolution of directors and resolution of shareholders if we have no liabilities and weare able to pay our debts as they fall due.Redemption of SharesUnder Delaware corporate law, any stock may be made subject to redemption by the corporation at its option or at the option of the holders of such stockprovided there remains outstanding shares with full voting power. Such stock may be made redeemable for cash, property or rights, as specified in the certificate ofincorporation or in the resolution of the board of directors providing for the issue of such stock. As permitted by British Virgin Islands law, and our memorandum ofassociation and articles of association, shares may be repurchased, redeemed or otherwise acquired by us. Our directors must determine that immediately followingthe redemption or repurchase we will be able to satisfy our debts as they fall due and the value of our assets exceeds our liabilities.51Variation of Rights of SharesUnder Delaware corporate law, a corporation may vary the rights of a class of shares with the approval of a majority of the outstanding shares of suchclass, unless the certificate of incorporation provides otherwise. As permitted by British Virgin Islands law, and our memorandum of association and articles ofassociation, if our share capital is divided into more than one class of shares, we may vary the rights attached to any class only with the consent in writing ofholders of not less than threefourths of the issued shares of that class and holders of not less than threefourths of the issued shares of any other class of shareswhich may be affected by the variation.Removal of DirectorsUnder Delaware corporate law, a director of a corporation with a classified board may be removed only for cause with the approval of a majority of theoutstanding shares entitled to vote, unless the certificate provides otherwise. As permitted by British Virgin Islands law and our memorandum of association andarticles of association, directors may be removed by resolution of directors or resolution of shareholders.MergersUnder the BVI Act, two or more companies may merge or consolidate in accordance with the statutory provisions. A merger means the merging of two ormore constituent companies into one of the constituent companies, and a consolidation means the uniting of two or more constituent companies into a newcompany. In order to merger or consolidate, the directors of each constituent company must approve a written plan of merger or consolidation which must beauthorized by a resolution of shareholders.Shareholders not otherwise entitled to vote on the merger or consolidation may still acquire the right to vote if the plan of merger or consolidation containsany provision which, if proposed as an amendment to the memorandum association or articles of association, would entitle them to vote as a class or series on theproposed amendment. In any event, all shareholders must be given a copy of the plan of merger or consolidation irrespective of whether they are entitled to vote atthe meeting or consent to the written resolution to approve the plan of merger or consolidation.Inspection of Books and RecordsUnder Delaware corporate law, any shareholder of a corporation may for any proper purpose inspect or make copies of the corporation’s stock ledger, list ofshareholders and other books and records. Holders of our shares have no general right under British Virgin Islands law to inspect or obtain copies of our list ofshareholders or our corporate records. However, we will provide holders of our shares with annual audited financial statements. See “Where You Can FindAdditional Information.”Conflict of InterestThe BVI Act provides that a director shall, after becoming aware that he is interested in a transaction entered into or to be entered into by the company,disclose that interest to the board of directors of the company. The failure of a director to disclose that interest does not affect the validity of a transaction enteredinto by the director or the company, so long as the director’s interest was disclosed to the board prior to the company’s entry into the transaction or was notrequired to be disclosed (for example where the transaction is between the company and the director himself or is otherwise in the ordinary course of business andon usual terms and conditions). As permitted by British Virgin Islands law and our memorandum of association and articles of association, a director interested in aparticular transaction may vote on it, attend meetings at which it is considered, and sign documents on our behalf which relate to the transaction.52Transactions with Interested ShareholdersDelaware corporate law contains a business combination statute applicable to Delaware public corporations whereby, unless the corporation hasspecifically elected not to be governed by such statute by amendment to its certificate of incorporation, it is prohibited from engaging in certain businesscombinations with an “interested shareholder” for three years following the date that such person becomes an interested shareholder. An interested shareholdergenerally is a person or group who or that owns or owned 15% or more of the target’s outstanding voting stock within the past three years. This has the effect oflimiting the ability of a potential acquirer to make a twotiered bid for the target in which all shareholders would not be treated equally. The statute does not apply if,among other things, prior to the date on which such shareholder becomes an interested shareholder, the board of directors approves either the businesscombination or the transaction that resulted in the person becoming an interested shareholder. This encourages any potential acquirer of a Delaware publiccorporation to negotiate the terms of any acquisition transaction with the target’s board of directors.British Virgin Islands law has no comparable provision. As a result, we cannot avail ourselves of the types of protections afforded by the Delawarebusiness combination statute. However, although British Virgin Islands law does not regulate transactions between a company and its significant shareholders, itdoes provide that such transactions must be entered into bona fide in the best interests of the company and not with the effect of constituting a fraud on theminority shareholders.Independent DirectorsThere are no provisions under Delaware corporate law or under the BVI Act that require a majority of our directors to be independent.Cumulative VotingUnder Delaware corporate law, cumulative voting for elections of directors is not permitted unless the company’s certificate of incorporation specificallyprovides for it. Cumulative voting potentially facilitates the representation of minority shareholders on a board of directors since it permits the minority shareholderto cast all the votes to which the shareholder is entitled on a single director, which increases the shareholder’s voting power with respect to electing such director.There are no prohibitions to cumulative voting under the laws of the British Virgin Islands, but our memorandum of association and articles of association do notprovide for cumulative votingAntitakeover Provisions in Our Memorandum of association and articles of associationSome provisions of our memorandum of association and articles of association may discourage, delay or prevent a change in control of our company ormanagement that shareholders may consider favorable, including provisions that authorize our board of directors to issue preference shares in one or more seriesand to designate the price, rights, preferences, privileges and restrictions of such preference shares.C. MATERIAL CONTRACTS.On January 25, 2018, the Company executed an Asset Exchange Agreement (“AEA”) with C Media Limited, a corporation organized under the laws of theCayman Islands (“C Media”), whereby the Company agreed to purchase all the capital stock and equity interests of LK Technology Ltd, together with its whollyowned subsidiaries MMB Limited and Mobile Media (China) Limited and all respective subsidiaries from C Media in exchange for (i) 185,412,599 ordinary shares ofthe Company, par value $0.01 per share (“Ordinary Shares”), (ii) 1,000,000 preferred shares of Kingtone (“Preferred Shares”) and (iii) all issued and outstandingcapital stock or equity interests of the Company’s subsidiary, Topsky InfoTech Holdings Pte Ltd., and its whollyowned subsidiary Xi’an Softech Co., Ltd.,including all entities effectively controlled by Xi’an Softech Co., Ltd. through contractual arrangements and variable business entities.To consummate the contemplated transactions described above, the Company obtained shareholder consent at a special meeting held on May 20, 2018, (i)to authorize 1,000,000 Preferred Shares, (ii) to authorize additional Ordinary Shares so that total authorized Ordinary Shares is equal to 250,000,000 shares, (iii) to listsuch Ordinary Shares on NASDAQ, and (iv) to approve the transactions contemplated in the Asset Exchange Agreement. Additionally, NASDAQ needed toapprove the contemplated transactions prior to consummation thereof. C Media had the right to terminate the AEA if the closing had not occurred (other thanthrough the failure of C Media to comply fully with its obligations under the AEA) on or before July 31, 2018. The transactions contemplated by the AEA wereconsummated on August 17, 2018.53On January 25, 2018, five shareholders of the Company including its largest shareholder and its Chief Executive Officer executed a Securities PurchaseAgreement, whereby such shareholders agreed to sell a total of 617,988 Ordinary Shares and 282,694 American Depository Shares of the Company to Redstone YYLManagement Limited, a company incorporated in the British Virgin Islands, in exchange for an aggregate purchase price of $1,897,860.09.On August 25, 2018, LK Technology entered into a Stock Purchase Agreement (the “Agreement”) with the shareholders (“Shareholders”) of SuperengineHoldings Limited, a limited liability company organized under the laws of the British Virgin Islands (the “Superengine”), pursuant to which LK Technology acquiredall of the issued and outstanding capital stock of Superengine for an aggregate purchase price of US$60 million (the “Purchase Price”), which are paid by theissuance of our Ordinary Shares in an amount equal to the quotient of (x) the Purchase Price divided by (y) the average of the closing prices of the Ordinary Shareson the NASDAQ Capital Market over the 12 months period preceding July 31, 2018. We are a party to the Agreement in connection with the issuance of theOrdinary Shares and certain other limited purposes.D. EXCHANGE CONTROLS.This section sets forth a summary of the most significant regulations or requirements that affect our business activities in China or our shareholders’ rightto receive dividends and other distributions from us.Regulations on Internet Content ProvidersThe Administrative Measures on Internet Information Services, or the Internet Content Measures, which was promulgated by the State Council onSeptember 25, 2000 and amended on January 8, 2011, set out guidelines on the provision of internet information services. The Internet Content Measures specifiesthat internet information services regarding news, publications, education, medical and health care, pharmacy and medical appliances, among other things, arerequired to be examined, approved and regulated by the relevant authorities. Internet information providers are prohibited from providing services beyond thoseincluded in the scope of their licenses or filings. Furthermore, the Internet Content Measures specifies a list of prohibited content. Internet information providers areprohibited from producing, copying, publishing or distributing information that is humiliating or defamatory to others or that infringes the legal rights of others.Internet information providers that violate such prohibition may face criminal charges or administrative sanctions. Internet information providers must monitor andcontrol the information posted on their websites. If any prohibited content is found, they must remove the content immediately, keep a record of such content andreport to the relevant authorities.The Internet Content Measures classifies internet information services into commercial internet information services and noncommercial internetinformation services. Commercial internet information services refer to services that provide information or services to internet users with charge. A provider ofcommercial internet information services must obtain an ICP License.Regulations on Internet Audiovideo Program ServicesOn December 20, 2007, the MII and the State Administration of Press, Publication, Radio, Film and Television, or the SAPPRFT, jointly issued theAdministrative Provisions for the Internet AudioVideo Program Service, or the Audiovideo Program Provisions, which came into effect on January 31, 2008 andwas amended on August 28, 2015. The Audiovideo Program Provisions defines “internet audiovideo program services” as producing, editing and integrating ofaudiovideo programs, supplying audiovideo programs to the public via the internet, and providing audiovideo programs uploading and transmission services to athird party. Entities providing internet audiovideo programs services must obtain an internet audiovideo program transmission license. Applicants for such licensesshall be stateowned or statecontrolled entities unless an internet audiovideo program transmission license has been obtained prior to the effectiveness of theAudiovideo Program Provisions in accordance with the thenineffect laws and regulations. In addition, foreigninvested enterprises are not allowed to engage inthe abovementioned services. According to the Audiovideo Program Provisions and other relevant laws and regulations, audiovideo programs provided by theentities supplying Internet audiovideo program services shall not contain any illegal content or other content prohibited by the laws and regulations, such as anycontent against the basic principles in the PRC Constitution, any content that damages the sovereignty of the country or national security, and any content thatdisturbs social order or undermine social stability. An audiovideo program that has already been broadcast shall be retained in full for at least 60 days. Movies,television programs and other media content used as Internet audiovideo programs shall comply with relevant administrative regulations on programs broadcaststhrough radio, movie and television channels. Entities providing services related to Internet audiovideo programs shall immediately delete the audiovideoprograms violating laws and regulations, keep relevant records, report relevant authorities and implement other regulatory requirements.54The Categories of the Internet AudioVideo Program Services, or the Audiovideo Program Categories, promulgated by SAPPRFT on March 10, 2017,classifies internet audio/video programs into four categories: (I) Category I internet audio/video program service, which is carried out with a form of radio station ortelevision station; (II) Category II internet audio/video program service, including (a) rebroadcasting service of current political news audio/video programs; (b)hosting, interviewing, reporting and commenting service of arts, entertainment, technology, finance and economics, sports, education and other specializedaudio/video programs; (c) producing (interviewing not included) and broadcasting service of arts, entertainment, technology, finance and economics, sports,education and other specialized audio/video programs; (d) producing and broadcasting service of internet films/dramas; (e) aggregating and broadcasting service offilms, television dramas and cartoons; (f) aggregating and broadcasting service of arts, entertainment, technology, finance and economics, sports, education andother specialized audio/video programs; and (g) live audio/video broadcasting service of cultural activities of common social organizations, sport events or otherorganization activities; and (III) Category III internet audio/video program service, including (a) aggregating service of online audio/video contents, and (b) rebroadcasting service of the audio/video programs uploaded by internet users; and (IV) Category III internet audio/video program service, including (a) rebroadcasting of the radio/television program channels; and (b) rebroadcasting of internet audio/video program channels.On May 27, 2016, the SAPPRFT issued the Notice on Relevant Issues concerning Implementing the Approval Works of Upgrading Mobile Internet AudioVideo Program Service, or the Mobile AudioVideo Program Notice. The Mobile AudioVideo Program Notice provides that the mobile Internet audiovideo programservices shall be deemed Internet audiovideo program service. Entities which have obtained the approvals to provide the Internet audiovideo program servicesmay use mobile WAP websites or mobile applications to provide audiovideo program services. Entities with regulatory approvals may operate mobile applicationsto provide the audiovideo program services The types of the programs shall be within the permitted scope as provided in the licenses and such mobile applicationsshall be filed with the SAPPRFT.Regulations on Production and Operation of Radio/Television ProgramsOn July 19, 2004, the SAPPRFT promulgated the Administrative Measures on the Production and Operation of Radio and Television Programs, or the Radioand Television Program Production Measures, which came into effect on August 20, 2004 and was amended on August 28, 2015. The Radio and Television ProgramProduction Measures provides that any business that produces or operates radio or television programs must first obtain a Radio and Television ProgramProduction and Operation Permit. Entities holding such permits shall conduct their business within the permitted scope as provided in their permits. In addition,foreigninvested enterprises are not allowed to engage in the abovementioned services.Regulations on Online Advertising ServicesOn April 24, 2015, the Standing Committee of the National People’s Congress enacted the Advertising Law of the People’s Republic of China, or the NewAdvertising Law, effective on September 1, 2015. The New Advertising Law increases the potential legal liability of advertising services providers and strengthensregulations of false advertising. On July 4, 2016, the State Administration for Industry and Commerce, or the SAIC, issued the Interim Measures of theAdministration of Online Advertising, or the SAIC Interim Measures, effective on September 1, 2016. The New Advertising Law and the SAIC Interim Measuresrequire that online advertisements may not affect users’ normal internet use and internet popup ads must display a “close” sign prominently and ensure onekeyclosing of the popup windows. The SAIC Interim Measures provides that all online advertisements must be marked “Advertisement” so that viewers can easilyidentify them as such. Moreover, the SAIC Interim Measures treats paid search results as advertisements that are subject to PRC advertisement laws, and requiresthat paid search results be conspicuously identified on search result pages as advertisements. The New Advertising Law and SAIC Interim Measures require us toconduct more stringent examination and monitoring of our advertisers and the content of their advertisements.55Regulations on Online GamesIn September 2009, the GAPP (currently known as the SAPPRFT), together with the National Copyright Administration, and the National Office ofCombating Pornography and Illegal Publications jointly issued the Notice on Further Strengthening on the Administration of Preexamination and Approval ofOnline Game and the Examination and Approval of Imported Online Game, or the Circular 13. The Circular 13 states that foreign investors are not permitted to investin online game operating businesses in the PRC via wholly foreignowned entities, Sinoforeign equity joint ventures or cooperative joint ventures or to exercisecontrol over or participate in the operation of domestic online game businesses through indirect means, such as other joint venture companies or contractual ortechnical arrangements. If the our contractual arrangements were deemed under the Circular 13 to be an “indirect means” for foreign investors to exercise controlover or participate in the operation of a domestic online game business, our contractual arrangements might be challenged by the SAPPRFT. We are not aware ofany online game companies which use the same or similar contractual arrangements having been challenged by the SAPPRFT as using those contractualarrangements as an “indirect means” for foreign investors to exercise control over or participate in the operation of a domestic online game business or having beenpenalized or ordered to terminate operations since the Circular 13 became effective. However it is unclear whether and how the Circular 13 might be interpreted orimplemented in the future. See “Risk Factors—If the PRC government finds that the agreements that establish the structure for operating certain of our operations inChina do not comply with PRC regulations relating to the relevant industries, or if these regulations or the interpretation of existing regulations change in the future,we could be subject to severe penalties or be forced to relinquish our interests in those operations.”The Interim Measures for the Administration of Online Games, or the Online Game Measures, issued by the MOC, which took effect on August 1, 2010 andamended on December 15, 2017, regulates a broad range of activities related to the online games business, including the development, production and operation ofonline games, the issuance of virtual currencies used for online games, and the provision of virtual currency trading services. The Online Game Measures providesthat any entity that is engaged in online game operations must obtain an Network Cultural Business Permit, and require the content of an imported online game to beexamined and approved by the MOC prior to the game’s launch and require a domestic online game to be filed with the MOC within 30 days after its launch. TheNotice of the Ministry of Culture on the Implementation of the Interim Measures for the Administration of Online Games, which was issued by the MOC on July 29,2010 to implement the Online Game Measures, (i) requires online game operators to protect the interests of online game users and specifies that certain terms thatmust be included in service agreements between online game operators and the users of their online games, (ii) requires content review of imported online gamesand filing procedures for domestic online games, (iii) emphasizes the protection of minors playing online games, and (iv) requests online game operators to promoterealname registration by their game users.Regulations on Information Security, Censorship and PrivacyThe Standing Committee of the National People’s Congress, China’s national legislative body, enacted the Decisions on the Maintenance of InternetSecurity on December 28, 2000 that may subject persons to criminal liabilities in China for any attempt to use the internet to: (i) gain improper entry to a computer orsystem of strategic importance; (ii) disseminate politically disruptive information; (iii) leak state secrets; (iv) spread false commercial information or (v) infringe uponintellectual property rights. In 1997, the Ministry of Public Security issued the Administration Measures on the Security Protection of Computer InformationNetwork with International Connections which prohibits using the internet to leak state secrets or to spread socially destabilizing materials. If an ICP license holderviolates these measures, the PRC government may revoke its ICP license and shut down its websites. Pursuant to the Ninth Amendment to the Criminal Law issuedby the Standing Committee of the National People’s Congress on August 29, 2015, effective on November 1, 2015, any ICP provider that fails to fulfill the obligationsrelated to internet information security as required by applicable laws and refuses to take corrective measures, will be subject to criminal liability for (i) any largescale dissemination of illegal information; (ii) any severe effect due to the leakage of users’ personal information; (iii) any serious loss of evidence of criminalactivities; or (iv) other severe situations, and any individual or entity that (i) sells or provides personal information to others unlawfully or (ii) steals or illegallyobtains any personal information will be subject to criminal liability in severe situations.56The Cybersecurity Law of the PRC, or the Cybersecurity Law, which was promulgated on November 7, 2016 by the Standing Committee of the NationalPeople’s Congress and came into effect on June 1, 2017, provides that network operators shall meet their cyber security obligations and shall take technicalmeasures and other necessary measures to protect the safety and stability of their networks. Under the Cybersecurity Law, network operators are subject to varioussecurity protectionrelated obligations, including: (i) network operators shall comply with certain obligations regarding maintenance of the security of internetsystems; (ii) network operators shall verify users’ identities before signing agreements or providing certain services such as information publishing or realtimecommunication services; (iii) when collecting or using personal information, network operators shall clearly indicate the purposes, methods and scope of theinformation collection, the use of information collection, and obtain the consent of those from whom the information is collected; (iv) network operators shall strictlypreserve the privacy of user information they collect, and establish and maintain systems to protect user privacy; (v) network operators shall strengthenmanagement of information published by users, and when they discover information prohibited by laws and regulations from publication or dissemination, theyshall immediately stop dissemination of that information, including taking measures such as deleting the information, preventing the information from spreading,saving relevant records, and reporting to the relevant governmental agencies.Regulations on Intellectual Property RightsRegulations on CopyrightThe Copyright Law of the PRC, or the Copyright Law, which took effect on June 1, 1991 and was amended in 2001 and in 2010, provides that Chinesecitizens, legal persons, or other organizations shall, whether published or not, own copyright in their copyrightable works, which include, among others, works ofliterature, art, natural science, social science, engineering technology and computer software. Copyright owners enjoy certain legal rights, including right ofpublication, right of authorship and right of reproduction. The Copyright Law as revised in 2010 extends copyright protection to Internet activities, productsdisseminated over the Internet and software products. In addition, Copyright Law provides for a voluntary registration system administered by the China CopyrightProtection Center, or the CPCC. According to the Copyright Law, an infringer of the copyrights shall be subject to various civil liabilities, which include ceasinginfringement activities, apologizing to the copyright owners and compensating the loss of copyright owner. Infringers of copyright may also subject to fines and/oradministrative or criminal liabilities in severe situations.The Computer Software Copyright Registration Measures, or the Software Copyright Measures, promulgated by the State Council on December 20, 2001and amended on January 30, 2013, regulates registrations of software copyright, exclusive licensing contracts for software copyright and assignment agreements.The National Copyright Administration, or the NCA administers software copyright registration and the CPCC, is designated as the software registration authority.The CPCC shall grant registration certificates to the Computer Software Copyrights applicants which meet the requirements of both the Software CopyrightMeasures and the Computer Software Protection Regulations (Revised in 2013).The Provisions of the Supreme People’s Court on Certain Issues Related to the Application of Law in the Trial of Civil Cases Involving Disputes onInfringement of the Information Network Dissemination Rights specifies that disseminating works, performances or audiovideo products by the internet users orthe internet service providers via the internet without the permission of the copyright owners shall be deemed to have infringed the right of dissemination of thecopyright owner.57The Measures for Administrative Protection of Copyright Related to Internet, which was jointly promulgated by the NCA and the MIIT on April 29, 2005and became effective on May 30, 2005, provides that upon receipt of an infringement notice from a legitimate copyright holder, an ICP operator must take remedialactions immediately by removing or disabling access to the infringing content. If an ICP operator knowingly transmits infringing content or fails to take remedialactions after receipt of a notice of infringement that harms public interest, the ICP operator could be subject to administrative penalties, including an order to ceaseinfringing activities, confiscation by the authorities of all income derived from the infringement activities, or payment of fines.On May 18, 2006, the State Council promulgated the Regulations on the Protection of the Right to Network Dissemination of Information (as amended in2013). Under these regulations, an owner of the network dissemination rights with respect to written works or audio or video recordings who believes thatinformation storage, search or link services provided by an Internet service provider infringe his or her rights may require that the Internet service provider delete, ordisconnect the links to, such works or recordings.Patent LawsAccording to the Patent Law of the PRC (Revised in 2008), the State Intellectual Property Office is responsible for administering patent law in the PRC. Thepatent administration departments of provincial, autonomous region or municipal governments are responsible for administering patent law within their respectivejurisdictions. The Chinese patent system adopts a firsttofile principle, which means that when more than one person file different patent applications for the sameinvention, only the person who files the application first is entitled to obtain a patent of the invention. To be patentable, an invention or a utility model must meetthree criteria: novelty, inventiveness and practicability. A patent is valid for twenty years in the case of an invention and ten years in the case of utility models anddesigns.Trademark LawsTrademarks are protected by the Trademark Law of the PRC (Revised in 2013) which was adopted in 1982 and subsequently amended in 1993, 2001 and 2013respectively as well as by the Implementation Regulations of the PRC Trademark Law adopted by the State Council in 2002 and as most recently amended on April29, 2014. The Trademark Office under the SAIC handles trademark registrations. The Trademark Office grants a tenyear term to registered trademarks and the termmay be renewed for another tenyear period upon request by the trademark owner. A trademark registrant may license its registered trademarks to another party byentering into trademark license agreements, which must be filed with the Trademark Office for its record. As with patents, the Trademark Law has adopted a firsttofile principle with respect to trademark registration. If a trademark applied for is identical or similar to another trademark which has already been registered or subjectto a preliminary examination and approval for use on the same or similar kinds of products or services, such trademark application may be rejected. Any personapplying for the registration of a trademark may not injure existing trademark rights first obtained by others, nor may any person register in advance a trademark thathas already been used by another party and has already gained a “sufficient degree of reputation” through such party’s use.Regulations on Domain NamesThe MIIT promulgated the Measures on Administration of Internet Domain Names, or the Domain Name Measures, on August 24, 2017, which took effecton November 1, 2017 and replaced the Administrative Measures on China Internet Domain Name promulgated by MII on November 5, 2004. According to theDomain Name Measures, the MIIT is in charge of the administration of PRC internet domain names. The domain name registration follows a firsttofile principle.Applicants for registration of domain names shall provide the true, accurate and complete information of their identities to domain name registration serviceinstitutions. The applicants will become the holder of such domain names upon the completion of the registration procedure.Relevant Regulations of the Hightech EnterpriseThe Ministry of Information Industry, the Ministry of Science and Technology and the State Tax Bureau collectively promulgated and issued the“Certifying Standard and Managing Measures for Hightech Enterprises” and “the Hightech Areas of Main National Support” on April 14, 2008 to certify the Hightech enterprise and encourage and support the development of the Chinese Hightech enterprises. Under the Hightech Enterprises Measures, the enterprise canenjoy the favorable tax policy when it is certified as a Hightech enterprise by the Ministry of Information Industry, the Ministry of Science and Technology and theState Tax Bureau or with its provincial branch according to the stipulated standard. The software and computer and network technology are recognized as the mainnational supported Hightech field. Kingtone Information is a Hightech enterprise and enjoys a favorable income tax rate of 15%.58Laws and Regulations of Intellectual Property RightsChina has adopted legislation governing intellectual property rights, including patents, copyrights and trademarks. China is a signatory to the maininternational conventions on intellectual property rights and became a member of the Agreement on Trade Related Aspects of Intellectual Property Rights upon itsaccession to the WTO in December 2001.PatentsThe “Patent Law of the People’s Republic of China” promulgated by the Standing Committee of the National People's Congress, adopted in 1985 andrevised in 1992, 2001 and 2008, protects registered patents. The State Intellectual Property Office of PRC handles granting patent rights, providing for a twentyyearpatent term for inventions and a tenyear patent term for utility models and designs. As we disclosed in Item 4, of this transition report on Form 20F, throughKingtone Information, we have been granted one invention patent “wireless video transmission system based on BREW platform” by the State Intellectual PropertyOffice (“SIPO”) of PRC on September 23, 2009 and therefore such invention is entitled to all the protections provided under the Patent Law for twenty years.Computer Software Copyright and AdministrationOn December 20, 2001, the State Council of PRC issued the “Regulation for Computer Software Protection of the People’s Republic of China” (the“Regulation for Computer Software Protection”) which became effective on January 1, 2002 to protect the interests of copyright owners, to promote the research andapplication and to encourage the development of the Chinese software industry. Under the Regulation for Computer Software Protection, natural persons, legalpersons or any other organizations shall have a copyright on the software developed by such persons no matter whether such software has been published. Theprotection period of software copyrights owned by the legal person or other organization is fifty years and expires on December 31 of the fiftieth year from the initialpublication date of such computer software. Currently, Kingtone Information has twelve registration certificates for software copyrights.TrademarksThe “Trademark Law of the People’s Republic of China” promulgated by the State Council of PRC, adopted in 1982 and revised in 1993 and 2001, protectsregistered trademarks. The Trademark Office under the Chinese State Administration for Industry and Commerce handles trademark registrations and grants a termof ten years to registered trademarks which are renewable for another ten years after the application to the Trademark Office by the owners of the trademarks.Trademark license agreements must be filed with the Trademark Office for record. China has a “firsttoregister” system that requires no evidence of prior use orownership. Kingtone Information has its registered trademarks as described in Item 4 of this transition report on Form 20F. Accordingly, such trademarks areentitled to the protection under the Trademark Law.Foreign Currency ExchangeOn August 29, 2008, the SAFE issued the Notice of the General Affairs Department of the State Administration of Foreign Exchange on the RelevantOperating Issues concerning the Improvement of the Administration of Payment and Settlement of Foreign Currency Capital of Foreignfunded Enterprises, orCircular 142. Pursuant to Circular 142, RMB converted from the foreign currencydenominated capital of a foreigninvested company may only be used for purposeswithin the business scope approved by the applicable governmental authority and may not be used for equity investments within the PRC unless specificallyprovided for otherwise. The use of such Renminbi capital may not be changed without SAFE’s approval and may not in any case be used to repay Renminbi loans ifthe proceeds of such loans have not been used.59See “Risk Factors — Risks Related to Doing Business in China — PRC regulation of loans and direct investment by offshore holding companies to PRCentities may delay or prevent us from using the proceeds of our initial public offering to make loans or additional capital contributions to our PRC operatingsubsidiaries, which could materially and adversely affect our liquidity and our ability to fund and expand our business”.Dividend DistributionWe are a British Virgin Islands holding company and substantially all of our operations are conducted through LK Technology. We rely on dividends andother distributions from our LK Technology and its subsidiaries to provide us with our cash flow and allow us to pay dividends on the shares underlying our ADSsand meet our other obligations. The principal regulations governing distribution of dividends paid by wholly foreignowned enterprises include:1.Wholly ForeignOwned Enterprise Law (1986), as amended; and2.Implementation Rules on Wholly ForeignOwned Enterprise Law (1990), as amended.Under these regulations, wholly foreignowned enterprises in China may pay dividends only out of their accumulated profits, if any, determined inaccordance with PRC accounting standards and regulations. In addition, wholly foreignowned enterprises in China are required to set aside at least 10% of theiraftertax profit based on PRC accounting standards each year to its general reserves until the accumulative amount of such reserves reach 50% of its registeredcapital. These reserves are not distributable as cash dividends. The board of directors of a FIE has the discretion to allocate a portion of its aftertax profits to staffwelfare and bonus funds, which may not be distributed to equity owners except in the event of liquidation.Regulation of Foreign Exchange in Certain Onshore and Offshore TransactionsIn October 2005, the SAFE issued the Notice on Issues Relating to the Administration of Foreign Exchange in Fundraising and Return InvestmentActivities of Domestic Residents Conducted via Offshore Special Purpose Companies, or SAFE Notice 75, which became effective as of November 1, 2005, and wasfurther supplemented by two implementation notices issued by the SAFE on November 24, 2005 and May 29, 2007, respectively. Under Circular 75, prior registrationwith the local SAFE branch is required for PRC residents to establish or to control an offshore company for the purposes of financing that offshore company withassets or equity interests in an onshore enterprise located in the PRC. An amendment to the registration or filing with the local SAFE branch by such PRC resident isalso required for the injection of equity interests or assets of an onshore enterprise in the offshore company or overseas funds raised by such offshore company, orany other material change with respect to the offshore company in connection with any increase or decrease of capital, transfer of shares, merger, division, equityinvestment, debt investment, or creation of any security interest over any assets located in the PRC.Under SAFE Notice 75, PRC residents are further required to repatriate into the PRC all of their dividends, profits or capital gains obtained from theirshareholdings in the offshore entity within 180 days of their receipt of such dividends, profits or capital gains. The registration and filing procedures under SAFENotice 75 are prerequisites for other approval and registration procedures necessary for capital inflow from the offshore entity, such as inbound investments orshareholders loans, or capital outflow to the offshore entity, such as the payment of profits or dividends, liquidating distributions, equity sale proceeds, or thereturn of funds upon a capital reduction. Therefore, failure to comply with such registration may subject us to certain restrictions on, including but not limited to, theincrease of the registered capital of our PRC subsidiary, making loans to our PRC subsidiary, and making distributions to us from our onshore companies.Regulations of Overseas Investments and ListingsOn August 8, 2006, six PRC regulatory agencies, including the MOFCOM, the State Assets Supervision and Administration Commission, the StateAdministration for Taxation, the State Administration for Industry and Commerce, the CSRC and the SAFE, jointly adopted the New M&A Rule, which becameeffective on September 8, 2006. This regulation, among other things, includes provisions that purport to require that an offshore SPV formed for purposes ofoverseas listing of equity interests in PRC companies and controlled directly or indirectly by PRC companies or individuals obtain the approval of the CSRC prior tothe listing and trading of such SPV’s securities on an overseas stock exchange.60On September 21, 2006, the CSRC published on its official website procedures regarding its approval of overseas listings by SPVs. The CSRC approvalprocedures require the filing of a number of documents with the CSRC and it would take several months to complete the approval process.The application of the New M&A Rule with respect to overseas listings of SPVs remains unclear with no consensus currently existing among the leadingPRC law firms regarding the scope of the applicability of the CSRC approval requirement.We believe that, based on our understanding of the current PRC laws, regulations and rules and the procedures announced on September 21, 2006, there isno requirement in this regulation that would require an application to be submitted to the MOFCOM or the CSRC for the approval of the listing and trading of ourADSs on the NASDAQ Capital Market.See “Risk Factors — Risks Related to Doing Business in China — If we were required to obtain the prior approval of the China Securities RegulatoryCommission, or CSRC, of the listing and trading of our ADSs on the NASDAQ Capital Market, we may face regulatory actions or other sanctions from the CSRC orother PRC regulatory agencies.”E. TAXATIONThe following discussion sets forth the material British Virgin Islands, PRC and U.S. federal income tax consequences of an investment in our ADSs andthe ordinary shares represented by our ADSs, sometimes referred to collectively as the “securities”. It is based upon laws and relevant interpretations thereof ineffect as of the date of this report, all of which are subject to change. This discussion does not deal with all possible tax consequences relating to an investment inthe securities, such as the tax consequences under state, local and other tax laws. As used in this discussion, “we,” “our” and “us” refers only to LuokungTechnology Ltd.British Virgin Islands TaxationUnder the law of the British Virgin Islands as currently in effect, a holder of the securities who is not a resident of the British Virgin Islands is not liable forBritish Virgin Islands tax on dividends paid with respect to the securities and all holders of the securities are not liable to the British Virgin Islands for tax on gainsrealized during that year on the sale or disposal of such ordinary shares. The British Virgin Islands does not impose a withholding tax on dividends paid by acompany incorporated or reregistered under the BVI Act.There are no capital gains, gift or inheritance taxes levied by the British Virgin Islands on companies incorporated under the BVI Act. In addition, shares ofcompanies incorporated under the BVI Act are not subject to transfer taxes, stamp duties or similar charges.There is no income tax treaty or convention currently in effect between the United States and the British Virgin Islands or between China and the BritishVirgin Islands.61People’s Republic of China TaxationIn 2007, the PRC National People’s Congress enacted the new Enterprise Income Tax Law (the “EIT Law”), which became effective on January 1, 2008. Thenew EIT Law imposes a single uniform income tax rate of 25% on all Chinese enterprises, including foreigninvested enterprises, and levies a withholding tax rate of10% on dividends payable by Chinese subsidiaries to their foreign shareholders unless any such foreign shareholders’ jurisdiction of incorporation has a tax treatywith China that provides for a different withholding agreement. Under the new EIT Law, enterprises established outside China but deemed to have a “de factomanagement body” within the country may be considered “resident enterprises” for Chinese tax purposes and, therefore, may be subject to an enterprise income taxrate of 25% on their worldwide income. Pursuant to the implementation rules of the new EIT Law, a “de facto management body” is defined as a body that hasmaterial and overall management control over the business, personnel, accounts and properties of the enterprise. Although substantially all members of ourmanagement are located in China, it is unclear whether Chinese tax authorities would require (or permit) us to be treated as PRC resident enterprises. If we aredeemed a Chinese tax resident enterprise, we may be subject to an enterprise income tax rate of 25% on our worldwide income, excluding dividends received directlyfrom another Chinese tax resident enterprise, as well as PRC enterprise income tax reporting obligations. If we are not deemed to be a Chinese tax resident enterprise,we may be subject to certain PRC withholding taxes. See “Risk Factors — Risks Related to Doing Business in China — Our holding company structure may limit thepayment of dividends.” As a result of such changes, our historical tax rates may not be indicative of our tax rates for future periods and the value of our ADSs orordinary shares may be adversely affected. If we are deemed a PRC resident enterprise and investors’ gain from the sales of the securities and dividends payable byus are deemed sourced from China, such gains and dividends payable by us may be subject to PRC tax. See “Risk Factors — Risks Related to Doing Business inChina — If we were deemed a “resident enterprise” by PRC tax authorities, we could be subject to tax on our global income at the rate of 25% under the New EITLaw and our nonPRC shareholders could be subject to certain PRC taxes.United States Federal Income TaxationGeneralThe following is a discussion of the material U.S. federal income tax consequences to an investor of purchasing, owning and disposing of our securities.This discussion does not address any aspects of U.S. federal gift or estate tax or the state, local or nonU.S. tax consequences of an investment in the securities.YOU SHOULD CONSULT YOUR OWN TAX ADVISORS CONCERNING THE U.S. FEDERAL, STATE, LOCAL AND NONU.S. TAX CONSEQUENCES OFPURCHASING, OWNING AND DISPOSING OF THE SECURITIES IN YOUR PARTICULAR SITUATION.This discussion applies only to those investors that purchase the securities in this offering and that hold the securities as capital assets within the meaningof section 1221 of the Internal Revenue Code of 1986, as amended (the “Code”). This section does not apply to holders that may be subject to special tax rules,including but not limited to:1.dealers in securities or currencies;2.traders in securities that elect to use a marktomarket method of accounting;3.banks, insurance companies or certain financial institutions;4.taxexempt organizations;5.governments or agencies or instrumentalities thereof;6.partnerships or other entities treated as partnerships or other passthrough entities for U.S. federal income tax purposes or persons holding thesecurities through such entities;7.regulated investment companies or real estate investment trusts;8.holders subject to the alternative minimum tax;9.holders that actually or constructively own 10% or more of the total combined voting power of all classes of our shares entitled to vote;10.holders that acquired the securities pursuant to the exercise of employee stock options, in connection with employee stock incentive plans orotherwise as compensation;11.holders that hold the securities as part of a straddle, hedging or conversion transaction; or12.holders whose functional currency is not the U.S. dollar.62This section is based on the Code, its legislative history, existing and proposed U.S. Treasury regulations, published rulings and other administrativeguidance of the U.S. Internal Revenue Service (the “IRS”) and court decisions, all as in effect on the date hereof. These laws are subject to change or differentinterpretation by the IRS or a court, possibly on a retroactive basis.We have not sought, and will not seek, a ruling from the IRS as to any U.S. federal income tax consequence described herein. The IRS may disagree withthe discussion herein, and its determination may be upheld by a court. Moreover, there can be no assurance that future legislation, regulation, administrative rulingsor court decisions will not adversely affect the accuracy of the statements in this discussion.The discussion below of the U.S. federal income tax consequences to “U.S. Holders” will apply to a beneficial owner of the securities that is for U.S. federalincome tax purposes:1.a citizen or resident of the United States;2.a corporation (or other entity treated as a corporation) that is created or organized (or treated as created or3.organized) under the laws of the United States, any state thereof or the District of Columbia;4.an estate whose income is subject to U.S. federal income tax regardless of its source; or5.a trust if (a) a U.S. court can exercise primary supervision over the trust’s administration and one or more U.S.6.persons are authorized to control all substantial decisions of the trust, or (b) if the trust has a valid election in effect under applicable U.S.Treasury regulations to be treated as a U.S. person.If a beneficial owner of the securities is not described as a U.S. Holder and is not an entity treated as a partnership or other passthrough entity for U.S.federal income tax purposes, such owner will be considered a “NonU.S. Holder.” The material U.S. federal income tax consequences applicable specifically to NonU.S. Holders are described below under the heading “Tax Consequences to NonU.S. Holders.”If a partnership (including for this purpose any entity treated as a partnership for U.S. tax purposes) is a beneficial owner of the securities, the U.S. taxtreatment of a partner in the partnership generally will depend on the status of the partner and the activities of the partnership. A holder of the securities that is apartnership or partners in such a partnership should consult their own tax advisors about the U.S. federal income tax consequences of holding and disposing of thesecurities.This discussion assumes that any distributions made (or deemed made) on the securities and any consideration received by a holder in consideration forthe sale or other disposition of the securities will be in U.S. dollars. This discussion also assumes that the representations contained in the Deposit Agreement aretrue and that the obligations in the Deposit Agreement and any related agreement will be complied with in accordance with their terms. Finally, this discussionassumes that each ADS will only represent ordinary shares in us, and will not represent any other type of security, such as a bond, cash or other property.63For U.S. federal income tax purposes, a holder of an ADS will be treated as the beneficial owner of the shares represented by such ADS and an exchange ofan ADS for ordinary shares will not be subject to U.S. federal income tax. The U.S. Treasury has expressed concerns that parties to whom ADSs are prereleased, orintermediaries in the chain of ownership between holders of ADSs and the issuer of the securities underlying the ADSs may be taking actions that are inconsistentwith the claiming of foreign tax credits by U.S. Holders of ADSs. Such actions would also be inconsistent with the claiming of the reduced rate of tax applicable todividends received by certain noncorporate U.S. Holders, including individual U.S. Holders, as described below under “Tax Consequences to U.S.Holders — Taxation of Distributions.” Accordingly, the availability of foreign tax credits or the reduced tax rate for dividends received by certain noncorporate U.S.Holders, including individual U.S. Holders, could be affected by actions taken by parties to whom the ADSs are released, or by future actions by the U.S. Treasury.Tax Consequences to U.S. HoldersTaxation of DistributionsSubject to the passive foreign investment company, or PFIC, rules discussed below, the gross amount of any cash distributions we make with respect to aU.S. Holder in respect of such U.S. Holder’s ADSs or shares will generally be treated as dividend income if the distributions are made from our current oraccumulated earnings and profits, calculated according to U.S. federal income tax principles. Cash dividends will generally be subject to U.S. federal income tax asordinary income on the day the U.S. Holder actually or constructively receives such income. With respect to noncorporate U.S. Holders for taxable years beginningbefore January 1, 2011, dividends may be taxed at the lower applicable longterm capital gains rate provided that (a) our ADSs or shares are readily tradable on anestablished securities market in the United States, or, in the event we are deemed to be a Chinese “resident enterprise” under the EIT Law (as described above under“People’s Republic of China Taxation”), we are eligible for the benefits of the income tax treaty between the United States and the PRC (the “U.S.PRC Tax Treaty”),(b) we are not a PFIC, as discussed below, for either the taxable year in which the dividend was paid or the preceding taxable year, and (c) certain holding periodrequirements are met. Under published IRS authority, ADSs are considered for purposes of clause (a) above to be readily tradable on an established securitiesmarket in the United States only if they are listed on certain exchanges, which presently include the NASDAQ Capital Market. U.S. Holders should consult their owntax advisors regarding the availability of the lower rate for any dividends paid with respect to our ADSs or shares.Dividends will not be eligible for the dividendsreceived deduction allowed to U.S. corporations in respect of dividends received from other U.S.corporations. Generally, if we distribute noncash property as a dividend (other than pro rata distributions of our shares) out of our current or accumulated earningsand profits (as determined for U.S. federal income tax purposes), a U.S. Holder generally will include in income an amount equal to the fair market value of theproperty, on the date that it is distributed.Distributions in excess of current and accumulated earnings and profits, as determined for U.S. federal income tax purposes, will be treated as a nontaxablereturn of capital to the extent of the U.S. Holder’s basis in its shares or ADSs and thereafter as capital gain. However, we do not plan on calculating our earnings andprofits in accordance with U.S. federal income tax principles. U.S. holders therefore should generally assume that any distributions paid by us will be treated asdividends for U.S. federal income tax purposes.If PRC taxes apply to dividends paid by us to a U.S. Holder (see “People’s Republic of China Taxation,” above), such taxes may be treated as foreign taxeseligible for credit against such holder’s U.S. federal income tax liability (subject to certain limitations), and a U.S. Holder may be entitled to certain benefits under theU.S.PRC Tax Treaty. The rules relating to the U.S. foreign tax credit are complex. U.S. Holders should consult their own tax advisors regarding the creditability ofany such PRC tax and their eligibility for the benefits of the U.S.PRC Tax Treaty.64Taxation of Dispositions of SharesSubject to the PFIC rules discussed below, a U.S. holder that sells or otherwise disposes of its shares will recognize capital gain or loss for U.S. federalincome tax purposes equal to the difference between the amount realized and such U.S. Holder’s tax basis in its shares. Prior to January 1, 2011, capital gains of anoncorporate U.S. holder are generally taxed at a maximum rate of 15% where the property is held for more than one year (and 20% thereafter). The ability to deductcapital losses is subject to limitations.If PRC taxes apply to any gain from the disposition of our shares by a U.S. Holder, such taxes may be treated as foreign taxes eligible for credit against suchholder’s U.S. federal income tax liability (subject to certain limitations), and a U.S. Holder may be entitled to certain benefits under the U.S.PRC Tax Treaty. U.S.Holders should consult their own tax advisors regarding the creditability of any such PRC tax and their eligibility for the benefits of the U.S.PRC Tax Treaty.Passive Foreign Investment CompanyWe do not expect to be a PFIC for U.S. federal income tax purposes for our current tax year or in the foreseeable future. The determination of whether or notwe are a PFIC in respect of any of our taxable years is a factual determination that cannot be made until the close of the applicable tax year and that is based on thetypes of income we earn and the value and composition of our assets (including goodwill), all of which are subject to change. Therefore, we can make no assurancesthat we will not be a PFIC in respect of our current taxable year or in the future.In general, we will be a PFIC in any taxable year if either:1.at least 75% of our gross income for the taxable year is passive income; or2.at least 50% of the value, determined on the basis of a quarterly average, of our assets is attributable to assets that produce or are held for theproduction of passive income.Passive income includes dividends, interest, royalties, rents (other than certain rents and royalties derived in the active conduct of a trade or business), theexcess of gains over losses from certain types of transactions in commodities, annuities and gains from assets that produce passive income. We will be treated asowning our proportionate share of the assets and earning our proportionate share of the income of any corporation in which we own, directly or indirectly, at least25% (by value) of the stock.If we are treated as a PFIC in any year during which a U.S. Holder owns the securities, and such U.S. Holder did not make a marktomarket election, asdescribed below, the U.S. Holder will be subject to special rules with respect to:1.any gain recognized by the U.S. Holder on the sale or other disposition of its shares; and any excess distribution that we make to the U.S. Holder(generally, the excess of the amount of any distributions to such U.S. Holder during a single taxable year of such U.S. Holder over 125% of theaverage annual distributions received by such U.S. Holder in respect of the shares during the three preceding taxable years of such U.S. Holder or,if shorter, such U.S. Holder holding period for the shares).Under these rules:2.the gain or excess distribution will be allocated ratably over the U.S. Holder’s holding period for the shares;3.the amount allocated to the U.S. Holder’s taxable year in which it realized the gain or excess distribution or to the period in the U.S. Holder’sholding period before the first day of our first taxable year in which we are a PFIC will be taxed as ordinary income;4.the amount allocated to other taxable years (or portions thereof) of the U.S. Holder and included in its holding period will be taxed at the highesttax rate in effect for that year; and5.the interest charge generally applicable to underpayments of tax will be imposed in respect of the tax attributable to each such other taxable yearof the U.S. Holder. 6.Special rules apply for calculating the amount of the foreign tax credit with respect to excess distributions by a PFIC.65Alternatively, if a U.S. Holder, at the close of its taxable year, owns ordinary shares in a PFIC that are treated as marketable stock, the U.S. Holder may makea marktomarket election with respect to such shares for such taxable year. Our shares will be “marketable” to the extent that they remain regularly traded on anational securities exchange, such as the NASDAQ Capital Market. If a U.S. Holder makes this election in a timely fashion, it will not be subject to the PFIC rulesdescribed above. Instead, in general, the U.S. Holder will include as ordinary income each year the excess, if any, of the fair market value of its shares at the end ofthe taxable year over its adjusted basis in its shares. Any ordinary income resulting from this election would generally be taxed at ordinary income tax rates andwould not be eligible for the reduced rate of tax applicable to qualified dividend income. The U.S. Holder will also be allowed to take an ordinary loss in respect ofthe excess, if any, of the adjusted basis of its shares over the fair market value at the end of the taxable year (but only to the extent of the net amount of previouslyincluded income as a result of the marktomarket election). The U.S. Holder’s basis in the shares will be adjusted to reflect any such income or loss amounts. U.S.Holders should consult their own tax advisor regarding potential advantages and disadvantages of making a marktomarket election with respect to their shares.Alternatively, a U.S. Holder of stock in a PFIC may avoid the PFIC tax consequences described above in respect to our or shares by making a timely“qualified electing fund” election to include in income its pro rata share of our net capital gains (as longterm capital gain) and other earnings and profits (asordinary income), on a current basis, in each case whether or not distributed, in the taxable year of the U.S. Holder in which or with which our taxable year ends.However, the qualified electing fund election is available only if the PFIC provides such U.S. Holder with certain information regarding its earnings and profits asrequired under applicable U.S. Treasury regulations. We do not intend to furnish the information that a U.S. Holder would need in order to make a qualified electingfund election. Therefore, U.S. Holders will not be able to make or maintain such election with respect to their or shares.If a U.S. Holder owns our shares or during any year that we are a PFIC, such holder must file U.S. Internal Revenue Service Form 8621 regarding suchholder’s shares or and the gain realized on the disposition of the shares. The reduced tax rate for dividend income, discussed in “Taxation of Distributions,” is notapplicable to dividends paid by a PFIC. U.S. Holders should consult with their own tax advisors regarding reporting requirements with respect to their shares.Tax Consequences to NonU.S. HoldersDividends paid to a NonU.S. Holder in respect of our or shares generally will not be subject to U.S. federal income tax, unless the dividends are effectivelyconnected with the NonU.S. Holder’s conduct of a trade or business within the United States (and, if required by an applicable income tax treaty, are attributable toa permanent establishment or fixed base that such holder maintains in the United States).In addition, a NonU.S. Holder generally will not be subject to U.S. federal income tax on any gain attributable to a sale or other disposition of our or sharesunless such gain is effectively connected with its conduct of a trade or business in the United States (and, if required by an applicable income tax treaty, isattributable to a permanent establishment or fixed base that such holder maintains in the United States) or the NonU.S. Holder is an individual who is present in theUnited States for 183 days or more in the taxable year of sale or other disposition and certain other conditions are met (in which case, such gain from United Statessources generally is subject to tax at a 30% rate or a lower applicable tax treaty rate).Dividends and gains that are effectively connected with the NonU.S. Holder’s conduct of a trade or business in the United States (and, if required by anapplicable income tax treaty, are attributable to a permanent establishment or fixed base in the United States) generally will be subject to tax in the same manner as fora U.S. Holder and, in the case of a NonU.S. Holder that is a corporation for U.S. federal income tax purposes, may also be subject to an additional branch profits taxat a 30% rate or a lower applicable tax treaty rate.66Information Reporting and Backup Withholding In general, information reporting for U.S. federal income tax purposes generally should apply to distributions made on the securities within the UnitedStates to a noncorporate U.S. Holder and to the proceeds from sales and other dispositions of the securities by a noncorporate U.S. Holder to or through a U.S.office of a broker. Payments made (and sales and other dispositions effected at an office) outside the United States generally should be subject to informationreporting in limited circumstances.Dividend payments made to U.S. Holders and proceeds paid from the sale or other disposition the securities may be subject to information reporting to theIRS and possible U.S. federal backup withholding at a current rate of 28%. Certain exempt recipients, such as corporations, are not subject to these informationreporting requirements. Backup withholding will not apply to a U.S. Holder who furnishes a correct taxpayer identification number and makes any other requiredcertification, or who is otherwise exempt from backup withholding. U.S. Holders who are required to establish their exempt status must provide a duly executed IRSForm W9.A NonU.S. Holder generally may eliminate the requirement for information reporting and backup withholding by providing certification of its foreignstatus, under penalties of perjury, on a duly executed applicable IRS Form W8 or by otherwise establishing an exemption.Backup withholding is not an additional tax. Rather, the amount of any backup withholding will be allowed as a credit against a U.S. Holder’s or a nonU.S.Holder’s U.S. federal income tax liability and may entitle such holder to a refund, provided that certain required information is timely furnished to the IRS.PROSPECTIVE PURCHASERS OF OUR SECURITIES SHOULD CONSULT WITH THEIR OWN TAX ADVISORS REGARDING THE APPLICATION OFTHE U.S. FEDERAL INCOME TAX LAWS TO THEIR PARTICULAR SITUATIONS AS WELL AS ANY ADDITIONAL TAX CONSEQUENCES RESULTING FROMPURCHASING, HOLDING OR DISPOSING OF OUR SECURITIES, INCLUDING THE APPLICABILITY AND EFFECT OF THE TAX LAWS OF ANY STATE, LOCALOR NONU.S. JURISDICTION, INCLUDING ESTATE, GIFT, AND INHERITANCE LAWS AND APPLICABLE TAX TREATIES.F. DIVIDENDS AND PAYING AGENTS.Not applicable.G. STATEMENT BY EXPERTS.None.H. DOCUMENTS ON DISPLAY.We previously filed a registration statement on Form F1 (File No. 333166056) with the SEC relating to our initial public offering in May 2010. This transition reportdoes not contain all of the information in the registration statement and the exhibits and financial statements included with the registration statement. References inthis transition report to any of our contracts, agreements or other documents are not necessarily complete, and you should refer to the exhibits attached to theregistration statement for copies of the actual contracts, agreements or documents. In addition, we will file transition reports on Form 20F and submit otherinformation under cover of Form 6K. As a foreign private issuer, we are exempt from the proxy requirements of Section 14 of the Exchange Act and our officers,directors and principal shareholders will be exempt from the insider shortswing disclosure and profit recovery rules of Section 16 of the Exchange Act. You may readand copy the registration statement, the related exhibits and other materials we file with the SEC at the SEC's public reference room in Washington, D.C. at 100 FStreet, Room 1580, N.E., Washington, D.C.20549. You can also request copies of those documents, upon payment of a duplicating fee, by writing to the SEC. Pleasecall the SEC at 1800SEC0330 for further information on the operation of the public reference rooms. The SEC also maintains an Internet site that contains reports,proxy and information statements and other information regarding issuers that file with the SEC. The website address is http://www.sec.gov. You may also request acopy of these filings, at no cost, by writing us at LAB 32, SOHO 3Q, No 9, Guanghua Road, Chaoyang District, Beijing, People’s Republic of China, 100020 ortelephoning us at (86) 1085866721.67I. SUBSIDIARY INFORMATIONFor a listing of our subsidiaries, see “Item 4. Information on the Company – C. Organizational Structure.”ITEM 11. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.Interest Rate RiskAs of December 31, 2017, we had no shortterm or longterm borrowings. If we borrow money in future periods, we may be exposed to interest rate risk. Ourexposure to market risk for changes in interest rates relates primarily to the interest income generated by our cash deposits with our banks and heldtomaturityinvestments. We have not used any derivative financial instruments in our investment portfolio. Interest earnings instruments carry a degree of interest rate risk. Wehave not been exposed, nor do we anticipate being exposed to material risks due to changes in interest rates. However, our future interest income may fall short ofexpectations due to changes in interest rates. Foreign Exchange RiskTranslation adjustments amounted to $90,671 and $387,375 gain as of the fiscal year ended December 31, 2017 and 2016, respectively. The Companytranslated balance sheet amounts with the exception of equity at December 31, 2017 at RMB 6.5342 to $1.00 as compared to RMB 6.9370 to $1.00 at December 31,2016. The Company stated equity accounts at their historical rate. The average translation rates applied to income statement accounts for the fiscal year endedDecember 31, 2017 and 2016 were RMB6.7356 and RMB 6.7153 to US$1.00, respectively. So far, the PRC government has been able to manage a stable exchange ratebetween RMB and the U.S. Dollar. Our future downward translation adjustments may occur and can be significant due to changes in such exchange rate.If we decide to convert our RMB into U.S. dollars for the purpose of making payments for dividends on our ordinary shares or for other business purposes,appreciation of the U.S. dollar against the RMB would have a negative effect on the U.S. dollar amount available to us.The PRC government imposes strict restrictions on PRC resident companies regarding converting RMB into foreign currencies and vice versa under capitalaccount transactions, such as receiving equity investments from outside of the PRC, making equity investments outside of the PRC, borrowing money from orlending money outside of the PRC, and repaying debt or remitting liquidated assets and/or accumulated profits outside of the PRC. These transactions have to beapproved by the relevant PRC government authorities, including but not limited to the commerce bureau, the tax bureau and the State Administration of ForeignExchange, or SAFE, and have to be conducted at banks entrusted by the local SAFE branch. As our business continues to grow, we may need to continuouslyfinance our PRC subsidiaries by raising capital from outside of the PRC. The restriction on converting RMB into foreign currencies, and vice versa, may limit ourability to use capital resources from outside of the PRC. Such restrictions may also limit our ability to remit profits from our PRC subsidiaries outside of the PRC,therefore potentially limiting our ability to pay dividends to our shareholders. In addition, such restrictions will limit our ability to freely transfer temporary excesscash in our or our subsidiaries’ bank accounts in and out of the PRC, therefore limiting our ability to conduct crossborder cash management activities to optimizethe utilization of our cash.InflationAlthough China has experienced an increasing inflation rate, inflation has not had a material impact on our results of operations in recent years. Accordingto the National Bureau of Statistics of China, the change in the consumer price index in China was 0.46%, (0.77%), and 1.16% in 2001, 2002 and 2003, respectively.However, in connection with a 3.9% increase in 2004, the PRC government announced measures to restrict lending and investment in China in order to reduceinflationary pressures in China’s economy. Following the government’s actions, the consumer price index decreased to 1.8% in 2005 and to 1.5% in 2006. In 2007, theconsumer price index increased to 4.8%. In response, China’s central bank, the People’s Bank of China, announced that the bank reserve ratio would rise half apercentage point to 15.5% in an effort to reduce inflation pressures. China’s consumer price index growth rate reached 8.7% year over year in 2008. In 2009 and 2010,the change in the consumer price index in China was minus 0.7% and 3.3%.China consumer price index in November 2017 was 3.8% higher than that of the same period in 2016. China consumer price index in December 2016 was2.4% higher than that of the same period in 2015. China consumer price index in December 2015 was 4.8% higher than that of the same period in 2014. Chinaconsumer price index in December 2014 was 3.3% higher than that of the same period in 2013. The results of the PRC government’s actions to combat inflation aredifficult to predict. Adverse changes in the Chinese economy, if any, will likely impact the financial performance of a variety of industries in China that use, or wouldbe candidates to use, our software products and services.68ITEM 12. DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES.A. DEBT SECURITIES.Not applicable. B. WARRANTS AND RIGHTS.Not applicable.C. OTHER SECURITIES.Not applicable.D. AMERICAN DEPOSITARY SHARES.The Bank of New York Mellon, as depositary (the “Depositary”) for the Company’s ADR facility, notified the owners and holders of the Company’s ADSsthat the ADS facility will terminate effective at 5:00 p.m. (Eastern Time) on September 19, 2018. Under the terms of the Deposit Agreement among the Company, theDepositary and the owners and holders of ADSs of the Company (the “Deposit Agreement”), owners and holders of the Company’s ADSs have until at leastJanuary 21, 2019 to surrender their ADSs to the Depositary for delivery of the underlying ordinary shares of the Company. Subsequent to January 21, 2019, underthe terms of the Deposit Agreement, the Depositary may attempt to sell any ordinary shares remaining on deposit with the Depositary. If the Depositary sells suchunderlying ordinary shares or receives value for such shares, holders must surrender their ADSs to obtain payment of the sale proceeds, net of expenses andapplicable tax and charges. We completed the voluntary delisting of our ADSs from the NASDAQ Capital Market on September 19, 2018.You may hold ADSs either (A) directly (i) by having ADSs registered in your name in the Direct Registration System, or (ii) by having an Americandepositary receipt, also referred to as an ADR, which is a certificate evidencing a specific number of ADSs, registered in your name, or (B) indirectly by holding asecurity entitlement in ADSs through your broker or other financial institution. If you hold ADSs directly, you are a registered ADS holder, also referred to as anADS holder. This description assumes you are an ADS holder. If you hold the ADSs indirectly, you must rely on the procedures of your broker or other financialinstitution to assert the rights of ADS holders described in this section. You should consult with your broker or financial institution to find out what thoseprocedures are.The Direct Registration System, or DRS, is a system administered by The Depository Trust Company, also referred to as DTC, pursuant to which thedepositary may register the ownership of uncertificated ADSs, which ownership will be confirmed by periodic statements sent by the depositary to the registeredholders of uncertificated ADSs.69As an ADS holder, you will not be treated as one of our registered shareholders and you will not have direct shareholder rights. British Virgin Island’s lawgoverns our direct shareholders’ rights. The depositary will be the holder of the shares underlying your ADSs. As a registered holder of ADSs, you will have ADSholder rights. A Deposit Agreement among us, the depositary and you, as an ADS holder, and all other persons indirectly holding ADSs, sets out ADS holder rightsas well as the rights and obligations of the depositary. New York law governs the Deposit Agreement and the ADSs.The following is a summary of the material provisions of the Deposit Agreement. For more complete information, you should read the entire DepositAgreement and the form of ADS, which contains the terms of the ADSs. The Deposit Agreement is filed as an exhibit to our registration statement filed on Form F1.You may obtain the registration statement and the attached Deposit Agreement from the SEC’s website at http://www.sec.gov. You may also obtain a copy of theDeposit Agreement at the SEC’s Public Reference Room, which is located at 100 F Street, NE, Washington, DC 20549. You may obtain information on the operationof the Public Reference Room by calling the SEC at 18007320330. Fees and ExpensesPersons depositing or withdrawing shares or ADS holders must pay:For:$5.00 (or less) per 100 ADSs (or portion of 100 ADSs)Issuance of ADSs, including issuances resulting from a distribution of shares orrights or other propertyCancellation of ADSs for the purpose of withdrawal, including if the DepositAgreement terminates$.05 (or less) per ADSAny cash distribution to ADS holdersA fee equivalent to the fee that would be payable if securities distributed to youhad been shares and the shares had been deposited for issuance of ADSsDistribution of securities distributed to holders of deposited securities whichare distributed by the depositary to ADS holders$.05 (or less) per ADSs per calendar yearDepositary servicesRegistration or transfer feesTransfer and registration of shares on our share register to or from the name ofthe depositary or its agent when you deposit or withdraw sharesExpenses of the depositaryCable, telex and facsimile transmissions (when expressly provided in the DepositAgreement) converting foreign currency to U.S. dollarsTaxes and other governmental charges the depositary or the custodian have topay on any ADS or share underlying an ADS, for example, share transfer taxes,stamp duty or withholding taxesAs necessaryAny charges incurred by the depositary or its agents for servicing the depositedsecuritiesAs necessaryPayment of TaxesHolders of our ADSs are responsible for any taxes or other governmental charges payable on their ADSs or on the deposited securities represented by anyof their ADSs. The depositary may refuse to register any transfer of a holder’s ADSs or allow withdrawal of the deposited securities represented by the ADSs untilsuch taxes or other charges are paid. It may apply payments owed to the holder or sell deposited securities represented by the ADSs to pay any taxes owed and theholder will remain liable for any deficiency. If the depositary sells deposited securities, it will, if appropriate, reduce the number of ADSs to reflect the sale and pay toADS holders any proceeds, or send to ADS holders any property, remaining after it has paid the taxes.70PART IIITEM 13. DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES.None.ITEM 14. MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS.Use of Proceeds.We completed our initial public offering on May 14, 2010 (the “IPO”), which generated net proceeds of approximately $14.6 million. All remaining cash onhand from the proceeds of our IPO was transferred to C Media Limited and its subsidiaries following the completion of the asset exchange transactions on August17, 2018.ITEM 15. CONTROLS AND PROCEDURES.Disclosure Controls and ProceduresOur Chief Executive Officer and Chief Financial Officer have reviewed and evaluated the effectiveness of our disclosure controls and procedures, whichincluded inquiries made to certain other of our employees. The term “disclosure controls and procedures,” as defined in Rules 13a15(e) and 15d15(e) under theExchange Act, means controls and other procedures of a company that are designed to ensure that information required to be disclosed by a company in thereports, such as this report, that it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in theSEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to bedisclosed by a company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the company’s management, including itsprincipal executive and principal financial officers, as appropriate to allow timely decisions regarding required disclosure. Management recognizes that any controlsand procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives and management necessarilyapplies its judgment in evaluating the costbenefit relationship of possible controls and procedures. Based on that evaluation, our Chief Executive Officer and ChiefFinancial Officer have each concluded that, as of December 31, 2017, the Company’s disclosure controls and procedures were not effective due to the materialweakness described in the “Management’s Report on Internal Control over Financial Reporting” section below.Management’s Report on Internal Control Over Financial ReportingOur management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Exchange ActRules 13a15(f) and 15d15(f). Internal control over financial reporting refers to the process designed by, or under the supervision of, our principal executive officerand principal financial officer, and effected by our Board of Directors, management and other personnel, to provide reasonable assurance regarding the reliability offinancial reporting and the preparation of financial statements for external purposes in accordance with U.S. GAAP and includes those policies and procedures that(i) pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of the assets of the Company; (ii)provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with U.S. GAAP, and thatreceipts and expenditures of the Company are being made only in accordance with authorizations of management and directors of the Company; and (iii) providereasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the Company’s assets that could have a materialeffect on the financial statements.71Any system of internal control, no matter how well designed, has inherent limitations. Therefore, even those systems determined to be effective canprovide only reasonable assurance with respect to financial statement preparation and presentation. Because of the inherent limitations of internal control, there is arisk that material misstatements may not be prevented or detected on a timely basis by internal control over financial reporting. However, these inherent limitationsare known features of the financial reporting process. Therefore, it is possible to design into the process safeguards to reduce, though not eliminate, this risk.Management assessed our internal control over financial reporting as of the year ended December 31, 2017. In making this assessment, management usedthe criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in the 2014 report entitled "Internal ControlIntegratedFramework." The COSO framework summarizes each of the components of a company’s internal control system, including (i) the control environment, (ii) riskassessment, (iii) control activities, (iv) information and communication, and (v) monitoring. Based on such assessment, management concluded that its internalcontrol over financial reporting as of December 31, 2017 was not effective because of the following material weakness:Lack of U.S. GAAP expertise. Although our accounting personnel are professional and experienced in accounting requirements and procedures generallyaccepted in the PRC, they do not have sufficient knowledge, experience and training in maintaining our books and records and preparing financial statements inaccordance with U.S. GAAP standards and SEC rules and regulations. The staff needs additional training to become experienced in U.S. GAAPbased reporting,including the skills of U.S. GAAPbased period end closing, consolidation of financial statements, and U.S. GAAP conversion.In order to address the above material weakness, our management plans to take the following steps:We will employ, as needed, outside professionals to provide key accounting personnel ongoing technical trainings to ensure their proper understanding ofU.S. GAAP and newly announced accounting standards.The Company believes the foregoing measures will remediate the identified material weakness in future periods. The Company is committed to monitoringthe effectiveness of these measures and making any changes that are necessary and appropriate.Notwithstanding the conclusion that its internal control over financial reporting was not effective as of the end of the period covered by this report, ourChief Executive Officer and Chief Financial Officer believe that the financial statements and other information contained in this report present fairly, in all materialrespects, its business, financial condition and results of operations. Nothing has come to the attention of management that causes them to believe that any materialinaccuracies or errors exist in the Company’s financial statements as of December 31, 2017.Attestation report of the registered public accounting firm.This transition report does not include an attestation report of the Company’s registered public accounting firm on internal control over financial reportingbecause the Company is a nonaccelerated filer permanently exempted from section 404(b) of the SarbanesOxley Act.Changes in Internal Control over Financial ReportingThere were no changes in the Company’s internal control over financial reporting that occurred during our fiscal year ended December 31, 2017 that hasmaterially affected or is reasonably likely to materially affect our internal control over financial reporting.ITEM 16. [RESERVED]ITEM 16A. AUDIT COMMITTEE FINANCIAL EXPERT.Our board of directors has determined that Mr. Dennis Galgano qualifies as an audit committee financial expert. Our board of directors has determined thatMessrs. Dennis Galgano, Jin Shi, Jiming Ha and Zhihao Xu meet the definition of an “independent director” under the applicable NASDAQ Rules and under Rule10A3 of the Securities Exchange Act of 1934, as amended.72ITEM 16B. CODE OF ETHICS.Our board of directors has adopted a code of business conduct and ethics applicable to our directors, officers and employees. We have posted the code onour website at http://www.luokung.com.ITEM 16C. PRINCIPAL ACCOUNTANT FEES AND SERVICES.Audit FeesThe aggregate fees billed by Moore Stephens CPA Limited for professional services rendered for the audit of our financial information disclosed in thistransition report on Form 20F was $280,000 for the two years ended December 31, 2017 and 2016.The aggregate fees billed by our previous auditor, BDO China Shu Lun Pan Certified Public Accountants LLP for professional services rendered for theaudit of our annual financial information included in our annual reports on Form 20F was $105,500 for each of the fiscal years ended September 30, 2017, 2016 and2015.Tax FeesWe did not engage our principal accountants to provide tax or related services during the last two fiscal years.All Other FeesWe did not engage our principal accountants to render services to us during the last two fiscal years, other than as reported above.ITEM 16D. EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES.Not applicable.ITEM 16E. PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS.Not applicable.ITEM 16F. CHANGE IN REGISTRANT’S CERTIFYING ACCOUNTANT.Not applicable.ITEM 16G. CORPORATE GOVERNANCE.We are incorporated in the BVI and our corporate governance practices are governed by applicable BVI law as well as our memorandum and articles ofassociation. In addition, because our ADSs are listed on NASDAQ, we are subject to NASDAQ’s corporate governance requirements. NASDAQ Listing Rule5620(a) requires each issuer to hold an annual meeting of shareholders no later than one year after the end of the issuer’s fiscal year end. However, NASDAQ ListingRule 5615(a)(3) permits a foreign private issuer like us to follow home country practices in lieu of certain requirements of Listing Rule 5600, provided that suchforeign private issuer discloses in its transition report filed with the SEC each requirement of Rule 5600 that it does not follow and describes the home countrypractice followed in lieu of such requirement. We follow home country practice with respect to annual meetings and did not hold an annual shareholder meeting inthe year ended December 31, 2017. We may, however, hold annual shareholder meetings in the future if there are significant issues that require shareholders’approvals.ITEM 16H. MINE SAFETY DISCLOSURE.Not applicable.73PART IIIITEM 17. FINANCIAL STATEMENTS.We have elected to provide financial statements and related information specified in Item 18.ITEM 18. FINANCIAL STATEMENTS.See “Index to Consolidated Financial Statements” for a list of all financial statements filed as part of this transition report. The Financial Statements arebeginning on page F1.ITEM 19. EXHIBITS.See the Exhibit Index following the signature page of this report, which is incorporated herein by reference.74SIGNATURESThe registrant hereby certifies that it meets all of the requirements for filing on Form 20F and that it has duly caused and authorized the undersigned tosign this transition report on its behalf.LUOKUNG TECHNOLOGY CORP.By:/s/ Xuesong Song Xuesong SongChief Executive Officer(principal executive officer)October 12, 201875EXHIBIT INDEXThe following documents are filed as part of this transition report on Form 20F.ExhibitNumberDescription1.1Amended and Restated Memorandum of Association and Articles of Association of Luokung Technology Corp., dated August 20, 2018, and ascurrently in effect.2.1*Deposit Agreement among the Company, depositary and holders of the American Depositary Receipts.2.2*Form of American Depositary Receipt.2.3*English translation of Entrusted Management Agreement dated December 15, 2009 between Xi’an Softech Co., Ltd., Xi’an Kingtone InformationTechnology Co., Ltd. and the shareholders of Xi’an Kingtone Information Technology Co., Ltd.3.1*English translation of Shareholder’s Voting Proxy Agreement dated December 15, 2009 between Xi’an Softech Co., Ltd., Xi’an Kingtone InformationTechnology Co., Ltd. and the shareholders of Xi’an Kingtone Information Technology Co., Ltd.4.1*English translation of Exclusive Technology Service Agreement dated December 15, 2009 between Xi’an Softech Co., Ltd. and Xi’an KingtoneInformation Technology Co., Ltd.4.2*English translation of Exclusive Option Agreement dated December 15, 2009 between Xi’an Softech Co., Ltd., Xi’an Kingtone InformationTechnology Co., Ltd. and the shareholders of Xi’an Kingtone Information Technology Co., Ltd.4.3*English translation of Equity Pledge Agreement dated December 15, 2009 between Xi’an Softech Co., Ltd., Xi’an Kingtone Information TechnologyCo., Ltd. and the shareholders of Xi’an Kingtone Information Technology Co., Ltd.4.4*English translation of Loan Agreement dated September 14, 2009 between Xi’an Kingtone Information Technology Co., Ltd. and Xian CityCommercial Bank.4.5*English translation of Mortgage Agreement dated September 14, 2009 between Xi’an Kingtone Information Technology Co., Ltd. and Xian CityCommercial Bank.4.6*English translation of Form of Employment Agreement entered into between the Company and the Company’s executive officers.4.7*2010 Omnibus Incentive Plan of the Company.4.8**English translation of Project Construction Contract dated August 10, 2010 between Xi’an Hu County Yuxing Agriculture Science & TechnologyCo., Ltd. and Xi’an Kingtone Information Technology Co., Ltd.4.9***Asset Exchange Agreement by and between C Media Limited and the Company dated as of January 25, 2018.4.10***Securities Purchase Agreement by and among Redstone YYL Management Limited and five shareholders holding majority of the shares of theCompany dated as of January 25, 2018.4.15Exclusive Business Cooperation Agreement by and between Zhongchuan Tianxia Information Technology (Shenzhen) Co., Ltd., and Beijing MobileVision Technology Co., Ltd., dated August 31, 2015.764.16Exclusive Option Agreement by and among Zhongchuan Tianxia Information Technology (Shenzhen) Co., Ltd., Xuesong Song, Weili Chen, PingWang, Donglai Liu, and Beijing Mobile Vision Technology Co., Ltd., dated August 31, 2015.4.17Equity Interest Pledge Agreement by and among Zhongchuan Tianxia Information Technology (Shenzhen) Co., Ltd., Xuesong Song, Weili Chen, PingWang, Donglai Liu, and Beijing Mobile Vision Technology Co., Ltd., dated August 31, 2015.4.18Addendum to Asset Exchange Agreement by and among the Company, Topsky Infotech Holdings Pte Ltd. and C Media Limited, dated October 3,2018. Incorporated by reference to the Company’s Current Report on Form 6K filed on October 4, 2018.4.19Stock Purchase Agreement, dated August 25, 2018, by and among the Company, LK Technology Ltd., and the shareholders listedtherein. Incorporated by reference to the Company’s Current Report on Form 6K filed on August 27, 2018.4.20Power of Attorney by Weili Chen, dated August 31, 2015.4.21Power of Attorney by Ping Wang, dated August 31, 2015.4.22Power of Attorney by Donglai Liu, dated August 31, 2015.4.23Power of Attorney by Xuesong Song, dated August 31, 2015.8.1List of Subsidiaries and Consolidated Variable Interest Entities10.1Employment Agreement, dated August 19, 2018, between Luokung Technology Corp. and Xuesong Song.†10.2Employment Agreement, dated August 19, 2018, by and between Luokung Technology Corp. and Jie Yu.†12.1Certification of Chief Executive Officer required by Rule 13a14(a).12.2Certification of Chief Financial Officer required by Rule 13a14(a).13.1Certification of Chief Executive Officer required by Rule 13a14(a).13.2Certification of Chief Financial Officer required by Rule 13a14(a).101.INSXBRL Instance Document.101.SCHXBRL Taxonomy Extension Schema Document.101.CALXBRL Taxonomy Extension Calculation Linkbase Document.101.DEFXBRL Taxonomy Extension Definition Linkbase Document.101.LABXBRL Taxonomy Extension Label Linkbase Document.101.PREXBRL Taxonomy Extension Presentation Linkbase Document.*Previously filed as an exhibit to the Company’s Registration Statement on Form F1 (Reg. No. 333166056) filed with the Commission and incorporated hereinby reference.**Previously filed as exhibits to the Company’s Transition Report on Form 20F filed with the Commission on January 20, 2011 and incorporated herein byreference.***Previously filed as exhibits to the Company’s Annual Report on Form 20F filed with the Commission on February 9, 2018 and incorporated herein byreference.†Indicates management contract or compensatory plan, contract or arrangement.77LK Technology Ltd. and SubsidiariesCONSOLIDATED FINANCIAL STATEMENTSTABLE OF CONTENTSPage(s)Report of Independent Registered Public Accounting FirmF2Consolidated Financial StatementsConsolidated Balance SheetsF3Consolidated Statements of Operations and Comprehensive LossF4application.Chuang (Vincent) Tao was appointed as a member of the Board effective on August 25, 2018. Dr. Tao was the Chairman of SuperEngine Suzhou from 2014to 2017. Dr. Tao has been the president of the Seasky Angel Investment Alliance of Shanghai since 2015. Dr. Tao received his Bachelor Degree of geographicinformation and telemetry from Wuhan University in China in 1990 and received his Ph.D. from University of Calgary, Canada in 1997.Dennis Galgano was appointed as a director of the Company following the consummation of the asset exchange agreement. He was a registered consultantwith Morgan Joseph Triartisan LLC from November 2016 until October 2017, and previously served as vice chairman and head of international investment bankingfor Morgan Joseph Triartisan LLC, which is a registered broker dealer engaged in the investment banking and financial advisory industry. Mr. Galgano received aB.S. degree in Chemistry from St. John’s University and an M.B.A. from The Wharton School in 1972.Jin Shi was appointed as a director of the Company following the consummation of the asset exchange transactions. Mr. Shi has served as the managingpartner of Chum Capital Group, a merchant bank focused on helping Chinese growth companies to access global capital, since January 2013. Mr. Shi has also servedas a director of Seven Stars Cloud Group, Inc. (NASDAQ: SSC), a premium video on demand service provider, since January 2014, and joined the audit committee ofits board of directors in March 2016. He also served as a director and member of the audit committee of Pingtan Marine Enterprise, Ltd. (NASDAQ: PME), a marineenterprise group primarily engaged in ocean fishing through its subsidiaries. Mr. Shi received an EMBA degree from the Guanghua Management School of BeijingUniversity, and a Bachelor’s degree of science in Chemical Engineering from Tianjin University.Jiming Ha was appointed as a director of the Company following the consummation of the asset exchange agreement, and has also served as a seniorresearch fellow for the China Finance 40 Forum since March 1, 2018, and previously served as a managing director of Goldman Sachs from January 2017 to April2017. Mr. Ha served as a vice chairman and chief investment strategist of the Investment Strategy Group for Private Wealth Management at Goldman Sachs from2010 to January 2017. Mr. Ha holds a PhD in Economics from the University of Kansas and Master’s and Bachelor’s degrees of science from Fudan University.Zhihao Xu was appointed as a director of the Company following the consummation of the asset exchange transactions. Mr. Xu has served as the chiefexecutive officer of Geely Group Co., Ltd., in Hangzhou, China, since December 2017, and previously served as the chairman and chief executive officer of BeijingDingchengrenhe Investment Co., Ltd., a funds management company, from January 2017 to December 2017. Mr. Xu served as the chairman of president of HNAUSOLV CO., LTD., and the chief innovation officer of HNA Logistics Group from January 2014 to December 2016, and prior to that as the chairman of GopayInnovation Technology Co. Ltd., an online payment system operator supporting online money transfers, from April 2012 to January 2014. Mr. Xu graduated from theBusiness School of Renmin University of China and from the Wudaokou Finance College of Tsinghua University with a fund qualification certificate and securitiesqualification certificate.B. COMPENSATION.Compensation of Directors and Executive OfficersFor the ninemonth transition period ended September 30, 2018 and the fiscal year ended December 31, 2017, we did not pay any cash compensation to ourexecutive officers of LK Technology Ltd. and a to our directors for serving on our board of directors of LK Technology Ltd.37Other than nonemployee directors, we do not intend to compensate directors for serving on our board of directors or any of its committees. We do,however, intend to reimburse each member of our board of directors for outofpocket expenses incurred by each director in connection with attending meetings ofthe board of directors and its committees.AdministrationThe Incentive Plan is administered by our board of directors, or at the discretion of the board, by our compensation committee. Our board of directors hasdelegated authority to our compensation committee to administer the Incentive Plan. Subject to the terms of the Incentive Plan, the compensation committee mayselect participants to receive awards, determine the types of awards and terms and conditions of awards, and interpret provisions of the Incentive Plan.The ordinary shares issued or to be issued under the Incentive Plan consist of authorized but unissued shares. If any ordinary shares covered by an awardare not purchased or are forfeited, or if an award otherwise terminates without delivery of any ordinary shares, then the number of ordinary shares counted againstthe aggregate number of ordinary shares available under the plan with respect to the award will, to the extent of any such forfeiture or termination, again be availablefor making awards under the Incentive Plan.EligibilityAwards may be made under the Incentive Plan to our employees, officers, directors, consultants or advisers or to any of our affiliates, and to any otherindividual whose participation in the Incentive Plan is determined to be in our best interests by our board of directors.Amendment or Termination of the PlanOur board of directors may terminate or amend the Incentive Plan at any time and for any reason. No amendment, however, may adversely impair the rightsof grantees with respect to outstanding awards. The Incentive Plan has a term of ten years. Amendments will be submitted for shareholder approval to the extentrequired by applicable stock exchange listing requirements or other applicable laws.OptionsThe Incentive Plan permits the granting of options to purchase ordinary shares intended to qualify as incentive share options under the Internal RevenueCode and share options that do not qualify as incentive share options, or nonqualified share options.The exercise price of each share option may not be less than 100% of the fair market value of our ADSs representing ordinary shares on the date of grant.In the case of certain 10% shareholders who receive incentive share options, the exercise price may not be less than 110% of the fair market value of our ADSsrepresenting ordinary shares on the date of grant. An exception to these requirements is made for options that we grant in substitution for options held byemployees of companies that we acquire. In such a case the exercise price is adjusted to preserve the economic value of the employee’s share option from his or herformer employer.The term of each share option is fixed by the compensation committee and may not exceed ten years from the date of grant. The compensation committeedetermines at what time or times each option may be exercised and the period of time, if any, after retirement, death, disability or termination of employment duringwhich options may be exercised.Options may be made exercisable in installments. The award agreement provides the vesting of the options. Exercisability of options may be accelerated bythe compensation committee.38In general, an optionee may pay the exercise price of an option by (1) cash or check (in U.S. dollars or Renminbi or other local currency as approved by thecompensation committee), (2) ordinary shares held for such period of time as may be required by the compensation committee, (3) delivery of a notice of a marketorder with a broker with respect to ordinary shares then issuable upon exercise of an option, and that the broker has been directed to pay us a sufficient portion ofnet proceeds of the sale in satisfaction of the exercise price, provided that payment of such proceeds is then made to us upon settlement of such sale, (4) otherproperty acceptable to the compensation committee with a fair market value equal to the exercise price, (5) cashless exercise or (6) any combination of the foregoing.Share options granted under the Incentive Plan may not be sold, transferred, pledged, or assigned other than by will or under applicable laws of descentand distribution. However, we may permit limited transfers of nonqualified options for the benefit of immediate family members of grantees to help with estateplanning concerns or pursuant to a domestic relations order in settlement of marital property rights.Other AwardsThe compensation committee may also award under the Incentive Plan:1.ordinary shares subject to restrictions;2.deferred ordinary shares, credited as deferred ordinary share units, but ultimately payable in the form of unrestricted ordinary shares inaccordance with the terms of the grant or with the participant’s deferral election;3.ordinary share units subject to restrictions;4.unrestricted ordinary shares, which are ordinary shares issued at no cost or for a purchase price determined by the compensation committee whichare free from any restrictions under the 2011 Omnibus Incentive Plan;5.dividend equivalent rights entitling the grantee to receive credits for dividends that would be paid if the grantee had held a specified number ofordinary shares; or6.a right to receive a number of ordinary shares or, in the discretion of the compensation committee, an amount in cash or a combination of ordinaryshares and cash, based on the increase in the fair market value of the ADSs representing ordinary shares underlying the right during a statedperiod specified by the compensation committee.Effect of Certain Corporate TransactionsCertain change of control transactions involving us may cause awards granted under the Incentive Plan to vest, unless the awards are continued orsubstituted for by the surviving company in connection with the corporate transaction.Unless otherwise provided in the appropriate option agreement on the date of grant or provided by our board of directors thereafter with the consent of thegrantee, options granted under the Incentive Plan become exercisable in full following (1) a dissolution of our company or a merger, consolidation or reorganizationof our company with one or more other entities in which we are not the surviving entity, (2) a sale of substantially all of our assets to another person or entity, or (3)any transaction (including without limitation a merger or reorganization in which we are the surviving entity) which results in any person or entity owning 50% ormore of the combined voting power of all classes of our shares.39Adjustments for Dividends and Similar EventsThe compensation committee will make appropriate adjustments in outstanding awards and the number of ordinary shares available for issuance under theIncentive Plan, including the individual limitations on awards, to reflect ordinary share dividends, stock splits and other similar events.C. BOARD PRACTICES.Board of DirectorsOur board of directors consists of six members being Messrs. Xuesong Song, Kegang Peng, Dennis Galgano, Jin Shi, Jiming Ha and Zhiaho Xu. Ourdirectors hold office until our annual meeting of shareholders, where their successors will be duly elected and qualified, or until the directors’ death, resignation orremoval, whichever is earlier. Our directors are not subject to a term of office and hold office until their resignation, death or incapacity or until their respectivesuccessors have been elected and qualified in accordance with our fourth amended and restated memorandum of association and articles of association. A directorwill be removed from office if, among other things, the director (1) becomes bankrupt, (2) dies or becomes of unsound mind, or (3) is absent from meetings of ourboard of directors for six consecutive months without leave and our board of directors resolves that the office is vacated. A director is not entitled to any specialbenefits upon termination of service with the company.Director IndependenceOur board of directors consists of six members; Messrs. Dennis Galgano, Jin Shi, Jiming Ha and Zhihao Xu have been determined by us to be independentdirectors within the meaning of the independent director guidelines of the NASDAQ Corporate Governance Rules (the “NASDAQ Rules”).Committees of Our Board of DirectorsTo enhance our corporate governance, we established three committees under our board of directors: an audit committee, a compensation committee, and anominating and corporate governance committee. We have adopted a charter for each of these committees. The committees have the following functions andmembers.Audit CommitteeOur audit committee reports to our board of directors regarding the appointment of our independent public accountants, the scope and results of ourannual audits, compliance with our accounting and financial policies and management’s procedures and policies relating to the adequacy of our internal accountingcontrols. Our audit committee consists of Messrs. Dennis Galgano, Jin Shi, and Jiming Ha. Mr. Galgano, having accounting and financial management expertise,serves as the chairman of the audit committee and is an “audit committee financial expert” as defined by the rules and regulations of the SEC. Our board of directorshas determined that each of these persons meet the definition of an “independent director” under the applicable NASDAQ Rules and under Rule 10A3 of theSecurities Exchange Act of 1934, as amended (the “Exchange Act”).Our audit committee is responsible for, among other things:●the appointment, evaluation, compensation, oversight and termination of the work of our independent auditor (including resolution of disagreementsbetween management and the independent auditor regarding financial reporting);●an annual performance evaluation of the audit committee;●establishing procedures for the receipt, retention and treatment of complaints regarding accounting, internal accounting controls, auditing matters orpotential violations of law, and the confidential, anonymous submission by our employees of concerns regarding questionable accounting or auditingmatters or potential violations of law;40●ensuring that it receives an transition report from our independent auditor describing our internal control procedures and any steps taken to deal withmaterial control deficiencies and attesting to the auditor’s independence and describing all relationships between the auditor and us;●reviewing our annual audited financial statements and quarterly financial statements with management and our independent auditor;●reviewing and approving all proposed related party transactions;●reviewing our policies with respect to risk assessment and risk management;●meeting separately and periodically with management and our independent auditor; and●reporting regularly to our board of directors.Compensation CommitteeOur compensation committee assists the board of directors in reviewing and approving the compensation structure of our directors and executive officers,including all forms of compensation to be provided to our directors and executive officers. In addition, the compensation committee reviews share compensationarrangements for all of our other employees. Members of the compensation committee are not prohibited from direct involvement in determining their owncompensation. Our chief executive officer is not permitted to be present at any committee meeting during which his or her compensation is deliberated. Ourcompensation committee consists of Dennis Galgano and Jin Shi, with Mr. Shi serving as the chairman of the compensation committee. Our board of directors hasdetermined that each of these persons meet the definition of “independent director” under the applicable requirements of the NASDAQ Rules.Our compensation committee is responsible for, among other things:●reviewing and approving corporate goals and objectives relevant to the compensation of our chief executive officer, evaluating the performance of ourchief executive officer in light of those goals and objectives and setting the compensation level of our chief executive officer based on this evaluation;●reviewing and making recommendations to the board with respect to the compensation of our executives, incentive compensation and equitybasedplans that are subject to board approval; and●providing annual performance evaluations of the compensation committee.Nominating and Corporate Governance CommitteeOur nominating and corporate governance committee assists the board of directors in identifying and selecting or recommending individuals qualified tobecome our directors, developing and recommending corporate governance principles and overseeing the evaluation of our board of directors and management. Ournominating and corporate governance committee consists of Jiming Ha and Zhihao Xue, with Mr. Ha serving as the chairman of the nominating and corporategovernance committee. Our board of directors has determined that each of these persons meet the definition of “independent director” under the applicablerequirements of the NASDAQ Rules.Our nominating and corporate governance committee is responsible for, among other things:●selecting and recommending to our board nominees for election or reelection to our board, or for appointment to fill any vacancy;●reviewing annually with our board the current composition of the board of directors with regards to characteristics such as independence, age, skills,experience and availability of service to us;●selecting and recommending to our board the names of directors to serve as members of the audit committee and the compensation committee, as wellas the nominating and corporate governance committee itself; advising our board of directors periodically with regards to significant developments inthe law and practice of corporate governance as well as our compliance with applicable laws and regulations, and making recommendations to ourboard of directors on all matters of corporate governance and on any remedial action to be taken; and●monitoring compliance with our code of business conduct and ethics, including reviewing the adequacy and effectiveness of our procedures to ensureproper compliance.41Code of Business Conduct and EthicsOur board of directors adopted a code of business conduct and ethics applicable to our directors, officers and employees.Duties of DirectorsUnder British Virgin Islands law, our directors have a duty to act honestly, in good faith and with a view to our best interests. Our directors also have a dutyto exercise care, diligence and skills that a reasonably prudent person would exercise in comparable circumstances. In fulfilling their duty of care to us, our directorsmust ensure compliance with our memorandum of association and articles of association. We have the right to seek damages if a duty owed by our directors isbreached.The functions and powers of our board of directors include, among others:●appointing officers and determining the term of office of the officers;●authorizing the payment of donations to religious, charitable, public or other bodies, clubs, funds or associations as deemed advisable;●exercising the borrowing powers of the company and mortgaging the property of the company;●executing cheques, promissory notes and other negotiable instruments on behalf of the company; and●maintaining or registering a register of mortgages, charges or other encumbrances of the company.Remuneration and BorrowingThe directors may receive such remuneration as our board of directors may determine from time to time. Each director is entitled to be repaid or prepaid alltraveling, hotel and incidental expenses reasonably incurred or expected to be incurred in attending meetings of our board of directors or committees of our board ofdirectors or shareholder meetings or otherwise in connection with the discharge of his or her duties as a director. The compensation committee will assist thedirectors in reviewing and approving the compensation structure for the directors.Our board of directors may exercise all the powers of the company to borrow money and to mortgage or charge our undertakings and property or any partthereof, to issue debentures, debenture stock and other securities whenever money is borrowed or as security for any debt, liability or obligation of the company orof any third party.QualificationA director is not required to hold shares as a qualification to office.42Limitation on Liability and Other Indemnification MattersBritish Virgin Islands law does not limit the extent to which a company’s memorandum of association and articles of association may provide forindemnification of officers and directors, except to the extent any such provision may be held by the British Virgin Islands courts to be contrary to public policy,such as to provide indemnification against civil fraud or the consequences of committing a crime.Under our memorandum of association and articles of association, we may indemnify our directors, officers and liquidators against all expenses, includinglegal fees, and against all judgments, fines and amounts paid in settlement and reasonably incurred in connection with civil, criminal, administrative or investigativeproceedings to which they are party or are threatened to be made a party by reason of their acting as our director, officer or liquidator. To be entitled toindemnification, these persons must have acted honestly and in good faith with a view to the best interest of the company and, in the case of criminal proceedings,they must have had no reasonable cause to believe their conduct was unlawful.Compensation Committee Interlocks and Insider ParticipationNone of the members of our compensation committee is an officer or employee of our company. None of our executive officers currently serves, or in thepast year has served, as a member of the board of directors or compensation committee of any entity that has one or more executive officers serving on our board ofdirectors or compensation committee.Employment AgreementsOn August 19, 2018, the Company entered into an Employment Agreement (the “Song Agreement”) with Mr. Xuesong Song, to serve as the ChiefExecutive Officer of the Company for a fouryear term, subject to renewal. Under the terms of the Song Agreement, Mr. Song will receive no salary for his servicesbut will be eligible for an annual cash bonus in the Board’s sole discretion.On August 19, 2018, the Company entered into an Employment Agreement (the “Yu Agreement”) with Mr. Jie Yu, to serve as the Chief Financial Officer ofthe Company for a fouryear term, subject to renewal. Under the terms of the Yu Agreement, Mr. Yu will receive an annual salary of RMB700,000, and will be eligiblefor an annual cash bonus in the Board’s sole discretion.D. EMPLOYEES.As of September 30, 2018 and December 31, 2017, we had a total of 107 and 37 fulltime employees, including 48 and 13 in research and development, 9 and 2in sales and marketing and the rest in a variety of other divisions, respectively. All of our employees are fulltime employees. None of our employees is currentlyrepresented by a union and/or collective bargaining agreements. We believe that we have good relations with our employees and since our inception we have hadno history of work stoppages or union organizing campaigns.E. SHARE OWNERSHIP.The following table provides information as to the beneficial ownership of our ordinary shares as of October 10, 2018, by the persons listed. Beneficialownership of shares is determined under the rules of the SEC and generally includes any shares over which a person exercises sole or shared voting or investmentpower. For purposes of the following table, a person is deemed to have beneficial ownership of any ordinary shares if such person has the right to acquire suchshares within 60 days of October 10, 2018. For purposes of computing the percentage of outstanding shares held by each person, any shares that such person hasthe right to acquire within 60 days after of October 10, 2018 are deemed to be outstanding, but are not deemed to be outstanding for the purpose of computing thepercentage ownership of any other person. Except as otherwise noted, the persons named in the table have sole voting and investment power with respect to all ofthe ordinary shares beneficially owned by them. Unless otherwise indicated, the address of each person listed is c/o Luokung Technologies, LAB 32, SOHO 3Q, No9, Guanghua Road, Chaoyang District, Beijing, People’s Republic of China.43Percentage ownership in the following table is based on 199,317,558 ordinary shares outstanding on October 10, 2018.Number ofsharesPercent ofclassDirectors and named executive officersCharm Dragon International Limited (1)4,030,8822.03%Xuesong Song, Chairman, Chief Executive Officer and Director(2)38,156,43019.30%Kegang Peng, Vice President and Director (3)17,231,9558.71%Dennis Galgano, Director75,796*%Jin Shi, DirectorJiming Ha, DirectorZhihao Xu, Director (4)7,579,1843.83%Dongpu Zhang, President (5)2,321,7921.17%Chuang Tao, Director (6)1,221,996*%Directors and executive officers as a group (10 persons)66,587,15233.69%(1)Charm Dragon International Limited is a British Virgin Islands company controlled by Mr. Xuesong Song.(2)Consists of (i) 4,030,882 shares owned directly by Charm Dragon International Limited, a British Virgin Islands company and (ii) 22,624,793 shares owneddirectly by Bravo First Development Limited, a British Virgin Islands company. Mr. Xuesong Song is the controlling shareholder of Bravo First DevelopmentLimited. Mr. Xuesong Song is the sole director of Charm Dragon International Limited.(3)Consists of 17,231,955 shares owned directly by Plenty Prestige Enterprises Limited, a British Virgin Islands company. Mr. Kegang Peng is the sole director ofPlenty Prestige Enterprises Limited.(4)Consists of 7,579,184 shares directly owned by Geely Group Limited., a Chinese company. Mr. Zhihao Xu is the Chief Executive Officer of Geely GroupLimited.(5)Consists of 2,321,792 shares owned directly by Genoa Peak Limited, a British Virgin Islands company. Mr. Dongpu Zhang controls Genoa Peak Limited.(6)Consists of 1,221,996 shares owned directly by Globalearth Holdings Limited, a British Virgin Islands company. Mr. Chuang Tao controls Globalearth HoldingsLimited.*Represents less than 1% of shares outstandingITEM 7. MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS.A. MAJOR SHAREHOLDERSPlease refer to Item 6.E “Directors, Senior Management and Employees — Share Ownership.”To our knowledge, (A) we are not directly or indirectly owned or controlled by (i) another corporation or (ii) any foreign government and (B) there are noarrangements (including any announced or expected takeover bid), the operation of which may at a subsequent date result in a change in our control.The voting rights of our major shareholders do not differ from the voting rights of other holders of the same class of shares.44B. RELATED PARTY TRANSACTIONS. BUSINESS RELATIONSHIPS.Our subsidiaries, consolidated affiliated entities, and the subsidiaries of the consolidated affiliated entities have engaged, during the ordinary course ofbusiness, in a number of customary transactions with each other. All of these intercompany balances have been eliminated in consolidation.As of December 31, 2017, we had amounts due from related parties, C Media Limited and Ya Tuo Ji International Consultancy (Beijing) Limited, in theamounts of $11.8 million and $0.2 million, respectively. These amounts due from related parties are short term in nature, noninterest bearing, unsecured andrepayable on demand.As of December 31, 2017, we had amounts due to related parties, Mr. Xuesong Song, our chairman and chief executive officer, Thumb Beijing Branch andThumb Shenzhen Branch, in the amounts of $2.9 million, $0.6 million and $0.03 million, respectively. These amounts due to related parties are short term in nature,noninterest bearing, unsecured and payable on demand.We are party to a series of control agreements with Beijing Zhong Chuan Shi Xun. In addition, our chief executive officer, Mr. Xuesong Song, serves as andofficer of Beijing Zhong Chuan Shi Xun and is a shareholder of Beijing Zhong Chuan Shi Xun. The following table sets forth the relationship of Mr. Song withBeijing Zhong Chuan Shi Xun:NameRelationship withLuokung TechnologyRelationship withBeijing Zhong Chuan Shi XunPercentageOwnership Interest inBeijing Zhong Chuan Shi XunXuesong SongChief Executive OfficerChief Executive Officer61.83%C. INTERESTS OF EXPERTS AND COUNSEL.None.ITEM 8. FINANCIAL INFORMATION.A. CONSOLIDATED STATEMENTS AND OTHER FINANCIAL INFORMATION.See “Item 18. Financial Statements.”Legal ProceedingsTo our knowledge, other than as described below there are no material legal proceedings threatened against us. From time to time, we may be subject tovarious claims and legal actions arising in the ordinary course of business. Following the consummation of the AEA, we became successor in interest to the legalproceedings described below.Litigation with Shanghai Fusheng Weier Intelligent Control Technology Co., Ltd.On January 22, 2016, Zhong Chuan Rui You and Shanghai Fusheng Weier Intelligent Control Technology Co., Ltd. (“Fusheng Weier”) signed a contract forequipment of $1,652,842 (RMB10,800,000). Since Zhong Chuan Rui You did not make the payments of $1,126,381 (RMB7,360,000) on the due dates, Fusheng Weierfiled a lawsuit against Zhong Chuan Rui You in Shanghai Xuhui District People's Court on October 8, 2016. On March 9, 2017, Xuhui District People's Court issuedthe verdict requiring Zhong Chuan Rui You to pay the overdue debts. In August 2017, C Media Limited made the payment of $512,075 (RMB3,346,000). Theremaining balance has been accrued in accounts payable. The payment schedule for the remaining balance is being negotiated by the two parties. On February 5,2018, a hearing was held adding Zhong Chuan Shi Xun as a defendant. The Group plans to settle the remaining balance within one year.45Lawsuit with Gansu Jinlun Culture Media Co., Ltd.On August 22, 2014, Zhong Chuan Rui You and Gansu Jinlun Culture Media Co., Ltd. (“Gansu Jinlun”) signed a “Lanzhou Railway Bureau AirconditionedTrain WiFi Network System Advertising Operation Rights Agreement” for advertising on 72 trains of $1,467,880 (RMB9,604,633). Due to the dispute on theproject implementation, Zhong Chuan Rui You did not pay the advertising fee. On August 23, 2017, Gansu Jinlun filed a lawsuit with Gansu Intermediate People'sCourt. On December 19, 2017, Gansu Intermediate People's Court issued a verdict, ruling that Zhong Chuan Rui You settle the overdue advertising fee. Since only 18out of 72 trains have been installed with Wifi network system, Zhong Chuan Rui You disputed and appealed to the verdict. The next court trial date has not yet beendetermined. C Media and Gansu Jinlun are negotiating a potential settlement to resume the contract. According to the legal counsel, it is probable that the settlementwill amount to approximately $459,000 (RMB3,000,000); therefore, this amount has been accrued in accounts payable as at December 31, 2017.Litigation with Shenzhen Hua Xun Fang Zhou Technology Co., Ltd.On June 16, 2015, Zhong Chuan Rui You signed a cooperation agreement with Shenzhen Hua Xun Fang Zhou Technology Co., Ltd. (“Shenzhen Hua Xun”)and Xuesong Song, a major shareholder of C Media Limited. Pursuant to this agreement, Zhong Chuan Rui You procures equipment from Shenzhen Hua Xun.Xuesong Song acts as a joint liability guarantor for the entire debts of Zhong Chuan Rui You under this agreement. As Zhong Chuan Rui You did not make thepayments on the due dates, Shenzhen Hua Xun filed a lawsuit with Shenzhen Baoan District People's Court on May 31, 2016. On November 1, 2016, Zhong ChuanRui You, Xuesong Song and Shenzhen Hua Xun reached a settlement in Shenzhen Baoan District People's Court to settle $1,735,389 (RMB11,355,000) in fourinstalments. On December 30, 2017, the debt was assigned to C Media Limited.Dividend PolicyWe currently intend to retain all of our available funds and future earnings for use in the operation and expansion of our business and do not anticipatepaying cash dividends in the foreseeable future. Under the terms of our Amended and Restated Memorandum and Articles of Association the declaration andpayment of any dividends in the future will be determined by our board of directors, in its discretion, and will depend on a number of factors, including our earnings,capital requirements and overall financial condition and our ability to receive dividends from our subsidiaries. If we pay any dividends, we will pay our ADS holders’dividends with respect to their underlying shares to the same extent as holders of our ordinary shares, subject to the terms of the deposit agreement, including thefees and expenses payable thereunder. Cash dividends on our ordinary shares, if any, will be paid in U.S. dollars.Our ability to receive dividends from our subsidiaries may limit our ability to pay dividends on our ordinary shares. See Risk Factors – Risks Related toDoing Business in China – Our holding company structure may limit the payment of dividends” and “Item 10. Additional Information – D. Exchange Controls –Dividend Distribution”.B. SIGNIFICANT CHANGES.N/AITEM 9. THE OFFER AND LISTINGA. OFFER AND LISTING DETAILS.Markets and Share Price HistoryOur ordinary shares are not currently listed on any trading market. Our American Depository Shares (“ADSs”) were voluntarily delisted from the NASDAQCapital Market on September 19, 2018. We have applied to NASDAQ for the listing of our ordinary shares on the NASDAQ Capital Market and received an approvalfor listing of Ordinary Shares on August 6, 2018, and as of the date of this transition report, that application and approval are currently under review.46The table below sets forth the high and low reported sales prices in dollars of our ordinary shares, which are represented by ADSs, as reported byNASDAQ in the periods as indicated:ADSHighLowAnnual Highs and Lows (as of the fiscal year end 09/30 for the five most recent full financial years)*20175.592.67201610.21.62Quarterly Highs and Lows (for the two most recent full financial years and any subsequent period, based on calendarquarter end)*2018Third Quarter8.006.30Second Quarter8.824.25First Quarter6.403.702017Fourth Quarter5.592.91Third Quarter3.992.67Second Quarter4.063.07First Quarter5.152.832016Fourth Quarter6.594.20Third Quarter10.201.62Second Quarter3.101.97First Quarter3.602.12Monthly Highs and Lows (for the most recent six months)September 20188.006.41August 20187.706.63July 20187.506.30June 20188.827.55May 20187.805.92April 20187.454.25*The Company effected a 1for10 reverse stock split of its ordinary shares on November 6, 2012 (the “Reverse Split”). The ratio between each AmericanDepositary Share (“ADS”) and its underlying ordinary share postReverse Split remains the same, namely, one ADR remains to represent one ordinary sharepost the Reverse Split. The price listed here after November 6, 2012 reflected the effect from the Reverse Split.B. PLAN OF DISTRIBUTION.Not Applicable.C. MARKETS.Our ordinary shares are not currently listed on any trading market. Our ADSs were voluntarily delisted from the NASDAQ Capital Market on September 19,2018. We have applied to NASDAQ for the listing of our ordinary shares on the NASDAQ Capital Market and received an approval for listing of Ordinary Shares onAugust 6, 2018, and as of the date of this transition report, that application and approval are currently under review.47D. SELLING SHAREHOLDERS.Not applicable.E. DILUTION.Not applicable.F. EXPENSES OF THE ISSUE.Not applicable.ITEM 10. ADDITIONAL INFORMATION.A. SHARE CAPITALNot applicable.B. MEMORANDUM AND ARTICLES OF ASSOCIATIONWe are a British Virgin Islands company incorporated with limited liability and our affairs are governed by the provisions of our memorandum of associationand articles of association, as amended and restated from time to time, and by the provisions of applicable British Virgin Islands law.Our memorandum of association and articles of association authorize the issuance of up to 251,000,000 shares, which are designated into (i) 250,000,000 ofordinary shares of the Company (“Ordinary Shares”), and (ii) 1,000,000 preferred shares of the Company (“Preferred Shares”), in each case with the rights,preferences and privileges as set out in the memorandum and articles of association of the Company.Please see below for a description of our ADSs under “Item 12. Description of Securities Other Than Equity Securities – D. American Depository Shares.”The following is a summary of the material provisions of our ordinary shares and our memorandum of association and articles of association.Ordinary SharesAll of our issued and outstanding ordinary shares are fully paid and nonassessable. Holders of our ordinary shares who are nonresidents of the BritishVirgin Islands may freely hold and vote their shares.Subject to the memorandum and articles of association (and, for greater clarity, without prejudice to any special rights conferred thereby on the holders ofany other shares), an Ordinary Share of the Company confers on the holder:(a)the right to one vote per Ordinary Share at a meeting of the members or on any resolution of members;(b)the right to an equal share in any distribution paid by the Company; and(c)the right to an equal share in the distribution of the surplus assets of the Company on a winding up;48Subject to the memorandum and articles of association (and, for greater clarity, without prejudice to any special rights conferred thereby on the holders ofany other shares), a Preferred Share of the Company confers on the holder:(a)the right to 399 votes per Preferred Share at a meeting of the members or on any resolution of members;(b)the right to an equal share in any distribution paid by the Company;(c)the right to an equal share in the distribution of the surplus assets of the Company on a winding up;(d)be freely transferable, in whole or in part, by Mr. Xuesong Song to any third party through one or more Private Transactions, subject toApplicable Law; and(e)be freely transferable, in whole or in part, by Mr. Xuesong Song to any third party through one or more Public Transactions, subject to ApplicableLaw and Automatic Conversion of such Preferred Share(s) into Ordinary Share(s).Each Preferred Share shall be automatically converted at any time after issue and without the payment of any additional sum into an equal number of fullypaid Ordinary Shares upon the conclusion of any transfer by Mr. Xuesong Song to any third party through one or more Public Transactions.Limitation on Liability and Indemnification MattersUnder British Virgin Islands law, each of our directors and officers, in performing his or her functions, is required to act honestly and in good faith with aview to our best interests and exercise the care, diligence and skill that a reasonably prudent person would exercise in comparable circumstances. Our memorandumof association and articles of association provide that, to the fullest extent permitted by British Virgin Islands law or any other applicable laws, our directors will notbe personally liable to us or our shareholders for any acts or omissions in the performance of their duties. Such limitation of liability does not affect the availabilityof equitable remedies such as injunctive relief or rescission. These provisions will not limit the liability of directors under United States federal securities laws.We may indemnify any of our directors or anyone serving at our request as a director of another entity against all expenses, including legal fees, andagainst all judgments, fines and amounts paid in settlement and reasonably incurred in connection with legal, administrative or investigative proceedings. We mayonly indemnify a director if he or she acted honestly and in good faith with the view to our best interests and, in the case of criminal proceedings, the director hadno reasonable cause to believe that his or her conduct was unlawful. The decision of our board of directors as to whether the director acted honestly and in goodfaith with a view to our best interests and as to whether the director had no reasonable cause to believe that his or her conduct was unlawful, is in the absence offraud sufficient for the purposes of indemnification, unless a question of law is involved. The termination of any proceedings by any judgment, order, settlement,conviction or the entry of no plea does not, by itself, create a presumption that a director did not act honestly and in good faith and with a view to our best interestsor that the director had reasonable cause to believe that his or her conduct was unlawful. If a director to be indemnified has been successful in defense of anyproceedings referred to above, the director is entitled to be indemnified against all expenses, including legal fees, and against all judgments, fines and amounts paidin settlement and reasonably incurred by the director or officer in connection with the proceedings.We may purchase and maintain insurance in relation to any of our directors or officers against any liability asserted against the directors or officers andincurred by the directors or officers in that capacity, whether or not we have or would have had the power to indemnify the directors or officers against the liabilityas provided in our memorandum of association and articles of association.Insofar as indemnification for liabilities arising under the Securities Act may be permitted for our directors or officers under the foregoing provisions, wehave been informed that in the opinion of the Securities and Exchange Commission, such indemnification is against public policy as expressed in the Securities Actand is therefore unenforceable as a matter of United States law.49Differences in Corporate LawWe were incorporated under, and are governed by, the laws of the British Virgin Islands. The corporate statutes of the State of Delaware and the BritishVirgin Islands are similar, and the flexibility available under British Virgin Islands law has enabled us to adopt memorandum of association and articles of associationthat will provide shareholders with rights that do not vary in any material respect from those they would enjoy if we were incorporated under the Delaware GeneralCorporation Law, or Delaware corporate law. Set forth below is a summary of some of the differences between provisions of the BVI Act applicable to us and thelaws application to companies incorporated in Delaware and their shareholders.Director’s Fiduciary DutiesUnder Delaware corporate law, a director of a Delaware corporation has a fiduciary duty to the corporation and its stockholders. This duty has twocomponents: the duty of care and the duty of loyalty. The duty of care requires that a director act in good faith, with the care that an ordinarily prudent personwould exercise under similar circumstances. Under this duty, a director must inform himself of, and disclose to stockholders, all material information reasonablyavailable regarding a significant transaction. The duty of loyalty requires that a director act in a manner he reasonably believes to be in the best interests of thecorporation. He must not use his corporate position for personal gain or advantage. This duty prohibits selfdealing by a director and mandates that the bestinterest of the corporation and its stockholders take precedence over any interest possessed by a director, officer or controlling stockholder and not shared by thestockholders generally. In general, actions of a director are presumed to have been made on an informed basis, in good faith and in the honest belief that the actiontaken was in the best interests of the corporation. However, this presumption may be rebutted by evidence of a breach of one of the fiduciary duties. Should suchevidence be presented concerning a transaction by a director, a director must prove the procedural fairness of the transaction, and that the transaction was of fairvalue to the corporation.British Virgin Islands law provides that every director of a British Virgin Islands company in exercising his powers or performing his duties shall acthonestly and in good faith and in what the director believes to be in the best interests of the company. Additionally, the director shall exercise the care, diligence andskill that a reasonable director would exercise in the same circumstances taking into account the nature of the company, the nature of the decision and the positionof the director and his responsibilities. In addition, British Virgin Islands law provides that a director shall exercise his powers as a director for a proper purpose andshall not act, or agree to the company acting, in a manner that contravenes British Virgin Islands law or the memorandum association or articles of association of thecompany.Amendment of Governing DocumentsUnder Delaware corporate law, with very limited exceptions, a vote of the stockholders is required to amend the certificate of incorporation. Under BritishVirgin Islands law and our memorandum of association and articles of association, (i) our shareholders may amend our memorandum of association and articles ofassociation by a resolution of shareholders, or (ii) our board of directors may amend our memorandum of association and articles of association by a resolution ofdirectors without a requirement for a resolution of shareholders so long as the amendment does not:●restrict the rights of the shareholders to amend the memorandum of association and articles of association;●change the percentage of shareholders required to pass a resolution of shareholders to amend the memorandum of association and articles ofassociation;●amend the memorandum of association and articles of association in circumstances where the memorandum of association and articles ofassociation cannot be amended by the shareholders; or●amend the provisions of memorandum of association or the articles of association pertaining to “rights attaching to shares,” “rights not varied bythe issue of the shares pari passu,” “variation of rights” and “amendment of memorandum and articles”.50Written Consent of DirectorsUnder Delaware corporate law, directors may act by written consent only on the basis of a unanimous vote. Under British Virgin Islands law, directors’consents need only a majority of directors signing to take effect.Written Consent of ShareholdersUnder Delaware corporate law, unless otherwise provided in the certificate of incorporation, any action to be taken at any annual or special meeting ofstockholders of a corporation, may be taken by written consent of the holders of outstanding stock having not less than the minimum number of votes that wouldbe necessary to take such action at a meeting. As permitted by British Virgin Islands law, shareholders’ consents need only a majority of shareholders signing totake effect. Our memorandum of association and articles of association provide that shareholders may approve corporate matters by way of a resolution consentedto at a meeting of shareholders or in writing by a majority of shareholders entitled to vote thereon.Shareholder ProposalsUnder Delaware corporate law, a shareholder has the right to put any proposal before the annual meeting of shareholders, provided it complies with thenotice provisions in the governing documents. A special meeting may be called by the board of directors or any other person authorized to do so in the governingdocuments, but shareholders may be precluded from calling special meetings. British Virgin Islands law and our memorandum of association and articles ofassociation provide that our directors shall call a meeting of the shareholders if requested in writing to do so by shareholders entitled to exercise at least 30% of thevoting rights in respect of the matter for which the meeting is requested.Sale of AssetsUnder Delaware corporate law, a vote of the stockholders is required to approve the sale of assets only when all or substantially all assets are being sold. Inthe British Virgin Islands, shareholder approval is required when more than 50% of the company’s total assets by value are being disposed of or sold.Dissolution; Winding UpUnder Delaware corporate law, unless the board of directors approves the proposal to dissolve, dissolution must be approved by shareholders holding100% of the total voting power of the corporation. Only if the dissolution is initiated by the board of directors may it be approved by a simple majority of thecorporation’s outstanding shares. Delaware corporate law allows a Delaware corporation to include in its certificate of incorporation a supermajority votingrequirement in connection with dissolutions initiated by the board. As permitted by British Virgin Islands law and our memorandum of association and articles ofassociation, we may be voluntarily liquidated under Part XII of the BVI Act by resolution of directors and resolution of shareholders if we have no liabilities and weare able to pay our debts as they fall due.Redemption of SharesUnder Delaware corporate law, any stock may be made subject to redemption by the corporation at its option or at the option of the holders of such stockprovided there remains outstanding shares with full voting power. Such stock may be made redeemable for cash, property or rights, as specified in the certificate ofincorporation or in the resolution of the board of directors providing for the issue of such stock. As permitted by British Virgin Islands law, and our memorandum ofassociation and articles of association, shares may be repurchased, redeemed or otherwise acquired by us. Our directors must determine that immediately followingthe redemption or repurchase we will be able to satisfy our debts as they fall due and the value of our assets exceeds our liabilities.51Variation of Rights of SharesUnder Delaware corporate law, a corporation may vary the rights of a class of shares with the approval of a majority of the outstanding shares of suchclass, unless the certificate of incorporation provides otherwise. As permitted by British Virgin Islands law, and our memorandum of association and articles ofassociation, if our share capital is divided into more than one class of shares, we may vary the rights attached to any class only with the consent in writing ofholders of not less than threefourths of the issued shares of that class and holders of not less than threefourths of the issued shares of any other class of shareswhich may be affected by the variation.Removal of DirectorsUnder Delaware corporate law, a director of a corporation with a classified board may be removed only for cause with the approval of a majority of theoutstanding shares entitled to vote, unless the certificate provides otherwise. As permitted by British Virgin Islands law and our memorandum of association andarticles of association, directors may be removed by resolution of directors or resolution of shareholders.MergersUnder the BVI Act, two or more companies may merge or consolidate in accordance with the statutory provisions. A merger means the merging of two ormore constituent companies into one of the constituent companies, and a consolidation means the uniting of two or more constituent companies into a newcompany. In order to merger or consolidate, the directors of each constituent company must approve a written plan of merger or consolidation which must beauthorized by a resolution of shareholders.Shareholders not otherwise entitled to vote on the merger or consolidation may still acquire the right to vote if the plan of merger or consolidation containsany provision which, if proposed as an amendment to the memorandum association or articles of association, would entitle them to vote as a class or series on theproposed amendment. In any event, all shareholders must be given a copy of the plan of merger or consolidation irrespective of whether they are entitled to vote atthe meeting or consent to the written resolution to approve the plan of merger or consolidation.Inspection of Books and RecordsUnder Delaware corporate law, any shareholder of a corporation may for any proper purpose inspect or make copies of the corporation’s stock ledger, list ofshareholders and other books and records. Holders of our shares have no general right under British Virgin Islands law to inspect or obtain copies of our list ofshareholders or our corporate records. However, we will provide holders of our shares with annual audited financial statements. See “Where You Can FindAdditional Information.”Conflict of InterestThe BVI Act provides that a director shall, after becoming aware that he is interested in a transaction entered into or to be entered into by the company,disclose that interest to the board of directors of the company. The failure of a director to disclose that interest does not affect the validity of a transaction enteredinto by the director or the company, so long as the director’s interest was disclosed to the board prior to the company’s entry into the transaction or was notrequired to be disclosed (for example where the transaction is between the company and the director himself or is otherwise in the ordinary course of business andon usual terms and conditions). As permitted by British Virgin Islands law and our memorandum of association and articles of association, a director interested in aparticular transaction may vote on it, attend meetings at which it is considered, and sign documents on our behalf which relate to the transaction.52Transactions with Interested ShareholdersDelaware corporate law contains a business combination statute applicable to Delaware public corporations whereby, unless the corporation hasspecifically elected not to be governed by such statute by amendment to its certificate of incorporation, it is prohibited from engaging in certain businesscombinations with an “interested shareholder” for three years following the date that such person becomes an interested shareholder. An interested shareholdergenerally is a person or group who or that owns or owned 15% or more of the target’s outstanding voting stock within the past three years. This has the effect oflimiting the ability of a potential acquirer to make a twotiered bid for the target in which all shareholders would not be treated equally. The statute does not apply if,among other things, prior to the date on which such shareholder becomes an interested shareholder, the board of directors approves either the businesscombination or the transaction that resulted in the person becoming an interested shareholder. This encourages any potential acquirer of a Delaware publiccorporation to negotiate the terms of any acquisition transaction with the target’s board of directors.British Virgin Islands law has no comparable provision. As a result, we cannot avail ourselves of the types of protections afforded by the Delawarebusiness combination statute. However, although British Virgin Islands law does not regulate transactions between a company and its significant shareholders, itdoes provide that such transactions must be entered into bona fide in the best interests of the company and not with the effect of constituting a fraud on theminority shareholders.Independent DirectorsThere are no provisions under Delaware corporate law or under the BVI Act that require a majority of our directors to be independent.Cumulative VotingUnder Delaware corporate law, cumulative voting for elections of directors is not permitted unless the company’s certificate of incorporation specificallyprovides for it. Cumulative voting potentially facilitates the representation of minority shareholders on a board of directors since it permits the minority shareholderto cast all the votes to which the shareholder is entitled on a single director, which increases the shareholder’s voting power with respect to electing such director.There are no prohibitions to cumulative voting under the laws of the British Virgin Islands, but our memorandum of association and articles of association do notprovide for cumulative votingAntitakeover Provisions in Our Memorandum of association and articles of associationSome provisions of our memorandum of association and articles of association may discourage, delay or prevent a change in control of our company ormanagement that shareholders may consider favorable, including provisions that authorize our board of directors to issue preference shares in one or more seriesand to designate the price, rights, preferences, privileges and restrictions of such preference shares.C. MATERIAL CONTRACTS.On January 25, 2018, the Company executed an Asset Exchange Agreement (“AEA”) with C Media Limited, a corporation organized under the laws of theCayman Islands (“C Media”), whereby the Company agreed to purchase all the capital stock and equity interests of LK Technology Ltd, together with its whollyowned subsidiaries MMB Limited and Mobile Media (China) Limited and all respective subsidiaries from C Media in exchange for (i) 185,412,599 ordinary shares ofthe Company, par value $0.01 per share (“Ordinary Shares”), (ii) 1,000,000 preferred shares of Kingtone (“Preferred Shares”) and (iii) all issued and outstandingcapital stock or equity interests of the Company’s subsidiary, Topsky InfoTech Holdings Pte Ltd., and its whollyowned subsidiary Xi’an Softech Co., Ltd.,including all entities effectively controlled by Xi’an Softech Co., Ltd. through contractual arrangements and variable business entities.To consummate the contemplated transactions described above, the Company obtained shareholder consent at a special meeting held on May 20, 2018, (i)to authorize 1,000,000 Preferred Shares, (ii) to authorize additional Ordinary Shares so that total authorized Ordinary Shares is equal to 250,000,000 shares, (iii) to listsuch Ordinary Shares on NASDAQ, and (iv) to approve the transactions contemplated in the Asset Exchange Agreement. Additionally, NASDAQ needed toapprove the contemplated transactions prior to consummation thereof. C Media had the right to terminate the AEA if the closing had not occurred (other thanthrough the failure of C Media to comply fully with its obligations under the AEA) on or before July 31, 2018. The transactions contemplated by the AEA wereconsummated on August 17, 2018.53On January 25, 2018, five shareholders of the Company including its largest shareholder and its Chief Executive Officer executed a Securities PurchaseAgreement, whereby such shareholders agreed to sell a total of 617,988 Ordinary Shares and 282,694 American Depository Shares of the Company to Redstone YYLManagement Limited, a company incorporated in the British Virgin Islands, in exchange for an aggregate purchase price of $1,897,860.09.On August 25, 2018, LK Technology entered into a Stock Purchase Agreement (the “Agreement”) with the shareholders (“Shareholders”) of SuperengineHoldings Limited, a limited liability company organized under the laws of the British Virgin Islands (the “Superengine”), pursuant to which LK Technology acquiredall of the issued and outstanding capital stock of Superengine for an aggregate purchase price of US$60 million (the “Purchase Price”), which are paid by theissuance of our Ordinary Shares in an amount equal to the quotient of (x) the Purchase Price divided by (y) the average of the closing prices of the Ordinary Shareson the NASDAQ Capital Market over the 12 months period preceding July 31, 2018. We are a party to the Agreement in connection with the issuance of theOrdinary Shares and certain other limited purposes.D. EXCHANGE CONTROLS.This section sets forth a summary of the most significant regulations or requirements that affect our business activities in China or our shareholders’ rightto receive dividends and other distributions from us.Regulations on Internet Content ProvidersThe Administrative Measures on Internet Information Services, or the Internet Content Measures, which was promulgated by the State Council onSeptember 25, 2000 and amended on January 8, 2011, set out guidelines on the provision of internet information services. The Internet Content Measures specifiesthat internet information services regarding news, publications, education, medical and health care, pharmacy and medical appliances, among other things, arerequired to be examined, approved and regulated by the relevant authorities. Internet information providers are prohibited from providing services beyond thoseincluded in the scope of their licenses or filings. Furthermore, the Internet Content Measures specifies a list of prohibited content. Internet information providers areprohibited from producing, copying, publishing or distributing information that is humiliating or defamatory to others or that infringes the legal rights of others.Internet information providers that violate such prohibition may face criminal charges or administrative sanctions. Internet information providers must monitor andcontrol the information posted on their websites. If any prohibited content is found, they must remove the content immediately, keep a record of such content andreport to the relevant authorities.The Internet Content Measures classifies internet information services into commercial internet information services and noncommercial internetinformation services. Commercial internet information services refer to services that provide information or services to internet users with charge. A provider ofcommercial internet information services must obtain an ICP License.Regulations on Internet Audiovideo Program ServicesOn December 20, 2007, the MII and the State Administration of Press, Publication, Radio, Film and Television, or the SAPPRFT, jointly issued theAdministrative Provisions for the Internet AudioVideo Program Service, or the Audiovideo Program Provisions, which came into effect on January 31, 2008 andwas amended on August 28, 2015. The Audiovideo Program Provisions defines “internet audiovideo program services” as producing, editing and integrating ofaudiovideo programs, supplying audiovideo programs to the public via the internet, and providing audiovideo programs uploading and transmission services to athird party. Entities providing internet audiovideo programs services must obtain an internet audiovideo program transmission license. Applicants for such licensesshall be stateowned or statecontrolled entities unless an internet audiovideo program transmission license has been obtained prior to the effectiveness of theAudiovideo Program Provisions in accordance with the thenineffect laws and regulations. In addition, foreigninvested enterprises are not allowed to engage inthe abovementioned services. According to the Audiovideo Program Provisions and other relevant laws and regulations, audiovideo programs provided by theentities supplying Internet audiovideo program services shall not contain any illegal content or other content prohibited by the laws and regulations, such as anycontent against the basic principles in the PRC Constitution, any content that damages the sovereignty of the country or national security, and any content thatdisturbs social order or undermine social stability. An audiovideo program that has already been broadcast shall be retained in full for at least 60 days. Movies,television programs and other media content used as Internet audiovideo programs shall comply with relevant administrative regulations on programs broadcaststhrough radio, movie and television channels. Entities providing services related to Internet audiovideo programs shall immediately delete the audiovideoprograms violating laws and regulations, keep relevant records, report relevant authorities and implement other regulatory requirements.54The Categories of the Internet AudioVideo Program Services, or the Audiovideo Program Categories, promulgated by SAPPRFT on March 10, 2017,classifies internet audio/video programs into four categories: (I) Category I internet audio/video program service, which is carried out with a form of radio station ortelevision station; (II) Category II internet audio/video program service, including (a) rebroadcasting service of current political news audio/video programs; (b)hosting, interviewing, reporting and commenting service of arts, entertainment, technology, finance and economics, sports, education and other specializedaudio/video programs; (c) producing (interviewing not included) and broadcasting service of arts, entertainment, technology, finance and economics, sports,education and other specialized audio/video programs; (d) producing and broadcasting service of internet films/dramas; (e) aggregating and broadcasting service offilms, television dramas and cartoons; (f) aggregating and broadcasting service of arts, entertainment, technology, finance and economics, sports, education andother specialized audio/video programs; and (g) live audio/video broadcasting service of cultural activities of common social organizations, sport events or otherorganization activities; and (III) Category III internet audio/video program service, including (a) aggregating service of online audio/video contents, and (b) rebroadcasting service of the audio/video programs uploaded by internet users; and (IV) Category III internet audio/video program service, including (a) rebroadcasting of the radio/television program channels; and (b) rebroadcasting of internet audio/video program channels.On May 27, 2016, the SAPPRFT issued the Notice on Relevant Issues concerning Implementing the Approval Works of Upgrading Mobile Internet AudioVideo Program Service, or the Mobile AudioVideo Program Notice. The Mobile AudioVideo Program Notice provides that the mobile Internet audiovideo programservices shall be deemed Internet audiovideo program service. Entities which have obtained the approvals to provide the Internet audiovideo program servicesmay use mobile WAP websites or mobile applications to provide audiovideo program services. Entities with regulatory approvals may operate mobile applicationsto provide the audiovideo program services The types of the programs shall be within the permitted scope as provided in the licenses and such mobile applicationsshall be filed with the SAPPRFT.Regulations on Production and Operation of Radio/Television ProgramsOn July 19, 2004, the SAPPRFT promulgated the Administrative Measures on the Production and Operation of Radio and Television Programs, or the Radioand Television Program Production Measures, which came into effect on August 20, 2004 and was amended on August 28, 2015. The Radio and Television ProgramProduction Measures provides that any business that produces or operates radio or television programs must first obtain a Radio and Television ProgramProduction and Operation Permit. Entities holding such permits shall conduct their business within the permitted scope as provided in their permits. In addition,foreigninvested enterprises are not allowed to engage in the abovementioned services.Regulations on Online Advertising ServicesOn April 24, 2015, the Standing Committee of the National People’s Congress enacted the Advertising Law of the People’s Republic of China, or the NewAdvertising Law, effective on September 1, 2015. The New Advertising Law increases the potential legal liability of advertising services providers and strengthensregulations of false advertising. On July 4, 2016, the State Administration for Industry and Commerce, or the SAIC, issued the Interim Measures of theAdministration of Online Advertising, or the SAIC Interim Measures, effective on September 1, 2016. The New Advertising Law and the SAIC Interim Measuresrequire that online advertisements may not affect users’ normal internet use and internet popup ads must display a “close” sign prominently and ensure onekeyclosing of the popup windows. The SAIC Interim Measures provides that all online advertisements must be marked “Advertisement” so that viewers can easilyidentify them as such. Moreover, the SAIC Interim Measures treats paid search results as advertisements that are subject to PRC advertisement laws, and requiresthat paid search results be conspicuously identified on search result pages as advertisements. The New Advertising Law and SAIC Interim Measures require us toconduct more stringent examination and monitoring of our advertisers and the content of their advertisements.55Regulations on Online GamesIn September 2009, the GAPP (currently known as the SAPPRFT), together with the National Copyright Administration, and the National Office ofCombating Pornography and Illegal Publications jointly issued the Notice on Further Strengthening on the Administration of Preexamination and Approval ofOnline Game and the Examination and Approval of Imported Online Game, or the Circular 13. The Circular 13 states that foreign investors are not permitted to investin online game operating businesses in the PRC via wholly foreignowned entities, Sinoforeign equity joint ventures or cooperative joint ventures or to exercisecontrol over or participate in the operation of domestic online game businesses through indirect means, such as other joint venture companies or contractual ortechnical arrangements. If the our contractual arrangements were deemed under the Circular 13 to be an “indirect means” for foreign investors to exercise controlover or participate in the operation of a domestic online game business, our contractual arrangements might be challenged by the SAPPRFT. We are not aware ofany online game companies which use the same or similar contractual arrangements having been challenged by the SAPPRFT as using those contractualarrangements as an “indirect means” for foreign investors to exercise control over or participate in the operation of a domestic online game business or having beenpenalized or ordered to terminate operations since the Circular 13 became effective. However it is unclear whether and how the Circular 13 might be interpreted orimplemented in the future. See “Risk Factors—If the PRC government finds that the agreements that establish the structure for operating certain of our operations inChina do not comply with PRC regulations relating to the relevant industries, or if these regulations or the interpretation of existing regulations change in the future,we could be subject to severe penalties or be forced to relinquish our interests in those operations.”The Interim Measures for the Administration of Online Games, or the Online Game Measures, issued by the MOC, which took effect on August 1, 2010 andamended on December 15, 2017, regulates a broad range of activities related to the online games business, including the development, production and operation ofonline games, the issuance of virtual currencies used for online games, and the provision of virtual currency trading services. The Online Game Measures providesthat any entity that is engaged in online game operations must obtain an Network Cultural Business Permit, and require the content of an imported online game to beexamined and approved by the MOC prior to the game’s launch and require a domestic online game to be filed with the MOC within 30 days after its launch. TheNotice of the Ministry of Culture on the Implementation of the Interim Measures for the Administration of Online Games, which was issued by the MOC on July 29,2010 to implement the Online Game Measures, (i) requires online game operators to protect the interests of online game users and specifies that certain terms thatmust be included in service agreements between online game operators and the users of their online games, (ii) requires content review of imported online gamesand filing procedures for domestic online games, (iii) emphasizes the protection of minors playing online games, and (iv) requests online game operators to promoterealname registration by their game users.Regulations on Information Security, Censorship and PrivacyThe Standing Committee of the National People’s Congress, China’s national legislative body, enacted the Decisions on the Maintenance of InternetSecurity on December 28, 2000 that may subject persons to criminal liabilities in China for any attempt to use the internet to: (i) gain improper entry to a computer orsystem of strategic importance; (ii) disseminate politically disruptive information; (iii) leak state secrets; (iv) spread false commercial information or (v) infringe uponintellectual property rights. In 1997, the Ministry of Public Security issued the Administration Measures on the Security Protection of Computer InformationNetwork with International Connections which prohibits using the internet to leak state secrets or to spread socially destabilizing materials. If an ICP license holderviolates these measures, the PRC government may revoke its ICP license and shut down its websites. Pursuant to the Ninth Amendment to the Criminal Law issuedby the Standing Committee of the National People’s Congress on August 29, 2015, effective on November 1, 2015, any ICP provider that fails to fulfill the obligationsrelated to internet information security as required by applicable laws and refuses to take corrective measures, will be subject to criminal liability for (i) any largescale dissemination of illegal information; (ii) any severe effect due to the leakage of users’ personal information; (iii) any serious loss of evidence of criminalactivities; or (iv) other severe situations, and any individual or entity that (i) sells or provides personal information to others unlawfully or (ii) steals or illegallyobtains any personal information will be subject to criminal liability in severe situations.56The Cybersecurity Law of the PRC, or the Cybersecurity Law, which was promulgated on November 7, 2016 by the Standing Committee of the NationalPeople’s Congress and came into effect on June 1, 2017, provides that network operators shall meet their cyber security obligations and shall take technicalmeasures and other necessary measures to protect the safety and stability of their networks. Under the Cybersecurity Law, network operators are subject to varioussecurity protectionrelated obligations, including: (i) network operators shall comply with certain obligations regarding maintenance of the security of internetsystems; (ii) network operators shall verify users’ identities before signing agreements or providing certain services such as information publishing or realtimecommunication services; (iii) when collecting or using personal information, network operators shall clearly indicate the purposes, methods and scope of theinformation collection, the use of information collection, and obtain the consent of those from whom the information is collected; (iv) network operators shall strictlypreserve the privacy of user information they collect, and establish and maintain systems to protect user privacy; (v) network operators shall strengthenmanagement of information published by users, and when they discover information prohibited by laws and regulations from publication or dissemination, theyshall immediately stop dissemination of that information, including taking measures such as deleting the information, preventing the information from spreading,saving relevant records, and reporting to the relevant governmental agencies.Regulations on Intellectual Property RightsRegulations on CopyrightThe Copyright Law of the PRC, or the Copyright Law, which took effect on June 1, 1991 and was amended in 2001 and in 2010, provides that Chinesecitizens, legal persons, or other organizations shall, whether published or not, own copyright in their copyrightable works, which include, among others, works ofliterature, art, natural science, social science, engineering technology and computer software. Copyright owners enjoy certain legal rights, including right ofpublication, right of authorship and right of reproduction. The Copyright Law as revised in 2010 extends copyright protection to Internet activities, productsdisseminated over the Internet and software products. In addition, Copyright Law provides for a voluntary registration system administered by the China CopyrightProtection Center, or the CPCC. According to the Copyright Law, an infringer of the copyrights shall be subject to various civil liabilities, which include ceasinginfringement activities, apologizing to the copyright owners and compensating the loss of copyright owner. Infringers of copyright may also subject to fines and/oradministrative or criminal liabilities in severe situations.The Computer Software Copyright Registration Measures, or the Software Copyright Measures, promulgated by the State Council on December 20, 2001and amended on January 30, 2013, regulates registrations of software copyright, exclusive licensing contracts for software copyright and assignment agreements.The National Copyright Administration, or the NCA administers software copyright registration and the CPCC, is designated as the software registration authority.The CPCC shall grant registration certificates to the Computer Software Copyrights applicants which meet the requirements of both the Software CopyrightMeasures and the Computer Software Protection Regulations (Revised in 2013).The Provisions of the Supreme People’s Court on Certain Issues Related to the Application of Law in the Trial of Civil Cases Involving Disputes onInfringement of the Information Network Dissemination Rights specifies that disseminating works, performances or audiovideo products by the internet users orthe internet service providers via the internet without the permission of the copyright owners shall be deemed to have infringed the right of dissemination of thecopyright owner.57The Measures for Administrative Protection of Copyright Related to Internet, which was jointly promulgated by the NCA and the MIIT on April 29, 2005and became effective on May 30, 2005, provides that upon receipt of an infringement notice from a legitimate copyright holder, an ICP operator must take remedialactions immediately by removing or disabling access to the infringing content. If an ICP operator knowingly transmits infringing content or fails to take remedialactions after receipt of a notice of infringement that harms public interest, the ICP operator could be subject to administrative penalties, including an order to ceaseinfringing activities, confiscation by the authorities of all income derived from the infringement activities, or payment of fines.On May 18, 2006, the State Council promulgated the Regulations on the Protection of the Right to Network Dissemination of Information (as amended in2013). Under these regulations, an owner of the network dissemination rights with respect to written works or audio or video recordings who believes thatinformation storage, search or link services provided by an Internet service provider infringe his or her rights may require that the Internet service provider delete, ordisconnect the links to, such works or recordings.Patent LawsAccording to the Patent Law of the PRC (Revised in 2008), the State Intellectual Property Office is responsible for administering patent law in the PRC. Thepatent administration departments of provincial, autonomous region or municipal governments are responsible for administering patent law within their respectivejurisdictions. The Chinese patent system adopts a firsttofile principle, which means that when more than one person file different patent applications for the sameinvention, only the person who files the application first is entitled to obtain a patent of the invention. To be patentable, an invention or a utility model must meetthree criteria: novelty, inventiveness and practicability. A patent is valid for twenty years in the case of an invention and ten years in the case of utility models anddesigns.Trademark LawsTrademarks are protected by the Trademark Law of the PRC (Revised in 2013) which was adopted in 1982 and subsequently amended in 1993, 2001 and 2013respectively as well as by the Implementation Regulations of the PRC Trademark Law adopted by the State Council in 2002 and as most recently amended on April29, 2014. The Trademark Office under the SAIC handles trademark registrations. The Trademark Office grants a tenyear term to registered trademarks and the termmay be renewed for another tenyear period upon request by the trademark owner. A trademark registrant may license its registered trademarks to another party byentering into trademark license agreements, which must be filed with the Trademark Office for its record. As with patents, the Trademark Law has adopted a firsttofile principle with respect to trademark registration. If a trademark applied for is identical or similar to another trademark which has already been registered or subjectto a preliminary examination and approval for use on the same or similar kinds of products or services, such trademark application may be rejected. Any personapplying for the registration of a trademark may not injure existing trademark rights first obtained by others, nor may any person register in advance a trademark thathas already been used by another party and has already gained a “sufficient degree of reputation” through such party’s use.Regulations on Domain NamesThe MIIT promulgated the Measures on Administration of Internet Domain Names, or the Domain Name Measures, on August 24, 2017, which took effecton November 1, 2017 and replaced the Administrative Measures on China Internet Domain Name promulgated by MII on November 5, 2004. According to theDomain Name Measures, the MIIT is in charge of the administration of PRC internet domain names. The domain name registration follows a firsttofile principle.Applicants for registration of domain names shall provide the true, accurate and complete information of their identities to domain name registration serviceinstitutions. The applicants will become the holder of such domain names upon the completion of the registration procedure.Relevant Regulations of the Hightech EnterpriseThe Ministry of Information Industry, the Ministry of Science and Technology and the State Tax Bureau collectively promulgated and issued the“Certifying Standard and Managing Measures for Hightech Enterprises” and “the Hightech Areas of Main National Support” on April 14, 2008 to certify the Hightech enterprise and encourage and support the development of the Chinese Hightech enterprises. Under the Hightech Enterprises Measures, the enterprise canenjoy the favorable tax policy when it is certified as a Hightech enterprise by the Ministry of Information Industry, the Ministry of Science and Technology and theState Tax Bureau or with its provincial branch according to the stipulated standard. The software and computer and network technology are recognized as the mainnational supported Hightech field. Kingtone Information is a Hightech enterprise and enjoys a favorable income tax rate of 15%.58Laws and Regulations of Intellectual Property RightsChina has adopted legislation governing intellectual property rights, including patents, copyrights and trademarks. China is a signatory to the maininternational conventions on intellectual property rights and became a member of the Agreement on Trade Related Aspects of Intellectual Property Rights upon itsaccession to the WTO in December 2001.PatentsThe “Patent Law of the People’s Republic of China” promulgated by the Standing Committee of the National People's Congress, adopted in 1985 andrevised in 1992, 2001 and 2008, protects registered patents. The State Intellectual Property Office of PRC handles granting patent rights, providing for a twentyyearpatent term for inventions and a tenyear patent term for utility models and designs. As we disclosed in Item 4, of this transition report on Form 20F, throughKingtone Information, we have been granted one invention patent “wireless video transmission system based on BREW platform” by the State Intellectual PropertyOffice (“SIPO”) of PRC on September 23, 2009 and therefore such invention is entitled to all the protections provided under the Patent Law for twenty years.Computer Software Copyright and AdministrationOn December 20, 2001, the State Council of PRC issued the “Regulation for Computer Software Protection of the People’s Republic of China” (the“Regulation for Computer Software Protection”) which became effective on January 1, 2002 to protect the interests of copyright owners, to promote the research andapplication and to encourage the development of the Chinese software industry. Under the Regulation for Computer Software Protection, natural persons, legalpersons or any other organizations shall have a copyright on the software developed by such persons no matter whether such software has been published. Theprotection period of software copyrights owned by the legal person or other organization is fifty years and expires on December 31 of the fiftieth year from the initialpublication date of such computer software. Currently, Kingtone Information has twelve registration certificates for software copyrights.TrademarksThe “Trademark Law of the People’s Republic of China” promulgated by the State Council of PRC, adopted in 1982 and revised in 1993 and 2001, protectsregistered trademarks. The Trademark Office under the Chinese State Administration for Industry and Commerce handles trademark registrations and grants a termof ten years to registered trademarks which are renewable for another ten years after the application to the Trademark Office by the owners of the trademarks.Trademark license agreements must be filed with the Trademark Office for record. China has a “firsttoregister” system that requires no evidence of prior use orownership. Kingtone Information has its registered trademarks as described in Item 4 of this transition report on Form 20F. Accordingly, such trademarks areentitled to the protection under the Trademark Law.Foreign Currency ExchangeOn August 29, 2008, the SAFE issued the Notice of the General Affairs Department of the State Administration of Foreign Exchange on the RelevantOperating Issues concerning the Improvement of the Administration of Payment and Settlement of Foreign Currency Capital of Foreignfunded Enterprises, orCircular 142. Pursuant to Circular 142, RMB converted from the foreign currencydenominated capital of a foreigninvested company may only be used for purposeswithin the business scope approved by the applicable governmental authority and may not be used for equity investments within the PRC unless specificallyprovided for otherwise. The use of such Renminbi capital may not be changed without SAFE’s approval and may not in any case be used to repay Renminbi loans ifthe proceeds of such loans have not been used.59See “Risk Factors — Risks Related to Doing Business in China — PRC regulation of loans and direct investment by offshore holding companies to PRCentities may delay or prevent us from using the proceeds of our initial public offering to make loans or additional capital contributions to our PRC operatingsubsidiaries, which could materially and adversely affect our liquidity and our ability to fund and expand our business”.Dividend DistributionWe are a British Virgin Islands holding company and substantially all of our operations are conducted through LK Technology. We rely on dividends andother distributions from our LK Technology and its subsidiaries to provide us with our cash flow and allow us to pay dividends on the shares underlying our ADSsand meet our other obligations. The principal regulations governing distribution of dividends paid by wholly foreignowned enterprises include:1.Wholly ForeignOwned Enterprise Law (1986), as amended; and2.Implementation Rules on Wholly ForeignOwned Enterprise Law (1990), as amended.Under these regulations, wholly foreignowned enterprises in China may pay dividends only out of their accumulated profits, if any, determined inaccordance with PRC accounting standards and regulations. In addition, wholly foreignowned enterprises in China are required to set aside at least 10% of theiraftertax profit based on PRC accounting standards each year to its general reserves until the accumulative amount of such reserves reach 50% of its registeredcapital. These reserves are not distributable as cash dividends. The board of directors of a FIE has the discretion to allocate a portion of its aftertax profits to staffwelfare and bonus funds, which may not be distributed to equity owners except in the event of liquidation.Regulation of Foreign Exchange in Certain Onshore and Offshore TransactionsIn October 2005, the SAFE issued the Notice on Issues Relating to the Administration of Foreign Exchange in Fundraising and Return InvestmentActivities of Domestic Residents Conducted via Offshore Special Purpose Companies, or SAFE Notice 75, which became effective as of November 1, 2005, and wasfurther supplemented by two implementation notices issued by the SAFE on November 24, 2005 and May 29, 2007, respectively. Under Circular 75, prior registrationwith the local SAFE branch is required for PRC residents to establish or to control an offshore company for the purposes of financing that offshore company withassets or equity interests in an onshore enterprise located in the PRC. An amendment to the registration or filing with the local SAFE branch by such PRC resident isalso required for the injection of equity interests or assets of an onshore enterprise in the offshore company or overseas funds raised by such offshore company, orany other material change with respect to the offshore company in connection with any increase or decrease of capital, transfer of shares, merger, division, equityinvestment, debt investment, or creation of any security interest over any assets located in the PRC.Under SAFE Notice 75, PRC residents are further required to repatriate into the PRC all of their dividends, profits or capital gains obtained from theirshareholdings in the offshore entity within 180 days of their receipt of such dividends, profits or capital gains. The registration and filing procedures under SAFENotice 75 are prerequisites for other approval and registration procedures necessary for capital inflow from the offshore entity, such as inbound investments orshareholders loans, or capital outflow to the offshore entity, such as the payment of profits or dividends, liquidating distributions, equity sale proceeds, or thereturn of funds upon a capital reduction. Therefore, failure to comply with such registration may subject us to certain restrictions on, including but not limited to, theincrease of the registered capital of our PRC subsidiary, making loans to our PRC subsidiary, and making distributions to us from our onshore companies.Regulations of Overseas Investments and ListingsOn August 8, 2006, six PRC regulatory agencies, including the MOFCOM, the State Assets Supervision and Administration Commission, the StateAdministration for Taxation, the State Administration for Industry and Commerce, the CSRC and the SAFE, jointly adopted the New M&A Rule, which becameeffective on September 8, 2006. This regulation, among other things, includes provisions that purport to require that an offshore SPV formed for purposes ofoverseas listing of equity interests in PRC companies and controlled directly or indirectly by PRC companies or individuals obtain the approval of the CSRC prior tothe listing and trading of such SPV’s securities on an overseas stock exchange.60On September 21, 2006, the CSRC published on its official website procedures regarding its approval of overseas listings by SPVs. The CSRC approvalprocedures require the filing of a number of documents with the CSRC and it would take several months to complete the approval process.The application of the New M&A Rule with respect to overseas listings of SPVs remains unclear with no consensus currently existing among the leadingPRC law firms regarding the scope of the applicability of the CSRC approval requirement.We believe that, based on our understanding of the current PRC laws, regulations and rules and the procedures announced on September 21, 2006, there isno requirement in this regulation that would require an application to be submitted to the MOFCOM or the CSRC for the approval of the listing and trading of ourADSs on the NASDAQ Capital Market.See “Risk Factors — Risks Related to Doing Business in China — If we were required to obtain the prior approval of the China Securities RegulatoryCommission, or CSRC, of the listing and trading of our ADSs on the NASDAQ Capital Market, we may face regulatory actions or other sanctions from the CSRC orother PRC regulatory agencies.”E. TAXATIONThe following discussion sets forth the material British Virgin Islands, PRC and U.S. federal income tax consequences of an investment in our ADSs andthe ordinary shares represented by our ADSs, sometimes referred to collectively as the “securities”. It is based upon laws and relevant interpretations thereof ineffect as of the date of this report, all of which are subject to change. This discussion does not deal with all possible tax consequences relating to an investment inthe securities, such as the tax consequences under state, local and other tax laws. As used in this discussion, “we,” “our” and “us” refers only to LuokungTechnology Ltd.British Virgin Islands TaxationUnder the law of the British Virgin Islands as currently in effect, a holder of the securities who is not a resident of the British Virgin Islands is not liable forBritish Virgin Islands tax on dividends paid with respect to the securities and all holders of the securities are not liable to the British Virgin Islands for tax on gainsrealized during that year on the sale or disposal of such ordinary shares. The British Virgin Islands does not impose a withholding tax on dividends paid by acompany incorporated or reregistered under the BVI Act.There are no capital gains, gift or inheritance taxes levied by the British Virgin Islands on companies incorporated under the BVI Act. In addition, shares ofcompanies incorporated under the BVI Act are not subject to transfer taxes, stamp duties or similar charges.There is no income tax treaty or convention currently in effect between the United States and the British Virgin Islands or between China and the BritishVirgin Islands.61People’s Republic of China TaxationIn 2007, the PRC National People’s Congress enacted the new Enterprise Income Tax Law (the “EIT Law”), which became effective on January 1, 2008. Thenew EIT Law imposes a single uniform income tax rate of 25% on all Chinese enterprises, including foreigninvested enterprises, and levies a withholding tax rate of10% on dividends payable by Chinese subsidiaries to their foreign shareholders unless any such foreign shareholders’ jurisdiction of incorporation has a tax treatywith China that provides for a different withholding agreement. Under the new EIT Law, enterprises established outside China but deemed to have a “de factomanagement body” within the country may be considered “resident enterprises” for Chinese tax purposes and, therefore, may be subject to an enterprise income taxrate of 25% on their worldwide income. Pursuant to the implementation rules of the new EIT Law, a “de facto management body” is defined as a body that hasmaterial and overall management control over the business, personnel, accounts and properties of the enterprise. Although substantially all members of ourmanagement are located in China, it is unclear whether Chinese tax authorities would require (or permit) us to be treated as PRC resident enterprises. If we aredeemed a Chinese tax resident enterprise, we may be subject to an enterprise income tax rate of 25% on our worldwide income, excluding dividends received directlyfrom another Chinese tax resident enterprise, as well as PRC enterprise income tax reporting obligations. If we are not deemed to be a Chinese tax resident enterprise,we may be subject to certain PRC withholding taxes. See “Risk Factors — Risks Related to Doing Business in China — Our holding company structure may limit thepayment of dividends.” As a result of such changes, our historical tax rates may not be indicative of our tax rates for future periods and the value of our ADSs orordinary shares may be adversely affected. If we are deemed a PRC resident enterprise and investors’ gain from the sales of the securities and dividends payable byus are deemed sourced from China, such gains and dividends payable by us may be subject to PRC tax. See “Risk Factors — Risks Related to Doing Business inChina — If we were deemed a “resident enterprise” by PRC tax authorities, we could be subject to tax on our global income at the rate of 25% under the New EITLaw and our nonPRC shareholders could be subject to certain PRC taxes.United States Federal Income TaxationGeneralThe following is a discussion of the material U.S. federal income tax consequences to an investor of purchasing, owning and disposing of our securities.This discussion does not address any aspects of U.S. federal gift or estate tax or the state, local or nonU.S. tax consequences of an investment in the securities.YOU SHOULD CONSULT YOUR OWN TAX ADVISORS CONCERNING THE U.S. FEDERAL, STATE, LOCAL AND NONU.S. TAX CONSEQUENCES OFPURCHASING, OWNING AND DISPOSING OF THE SECURITIES IN YOUR PARTICULAR SITUATION.This discussion applies only to those investors that purchase the securities in this offering and that hold the securities as capital assets within the meaningof section 1221 of the Internal Revenue Code of 1986, as amended (the “Code”). This section does not apply to holders that may be subject to special tax rules,including but not limited to:1.dealers in securities or currencies;2.traders in securities that elect to use a marktomarket method of accounting;3.banks, insurance companies or certain financial institutions;4.taxexempt organizations;5.governments or agencies or instrumentalities thereof;6.partnerships or other entities treated as partnerships or other passthrough entities for U.S. federal income tax purposes or persons holding thesecurities through such entities;7.regulated investment companies or real estate investment trusts;8.holders subject to the alternative minimum tax;9.holders that actually or constructively own 10% or more of the total combined voting power of all classes of our shares entitled to vote;10.holders that acquired the securities pursuant to the exercise of employee stock options, in connection with employee stock incentive plans orotherwise as compensation;11.holders that hold the securities as part of a straddle, hedging or conversion transaction; or12.holders whose functional currency is not the U.S. dollar.62This section is based on the Code, its legislative history, existing and proposed U.S. Treasury regulations, published rulings and other administrativeguidance of the U.S. Internal Revenue Service (the “IRS”) and court decisions, all as in effect on the date hereof. These laws are subject to change or differentinterpretation by the IRS or a court, possibly on a retroactive basis.We have not sought, and will not seek, a ruling from the IRS as to any U.S. federal income tax consequence described herein. The IRS may disagree withthe discussion herein, and its determination may be upheld by a court. Moreover, there can be no assurance that future legislation, regulation, administrative rulingsor court decisions will not adversely affect the accuracy of the statements in this discussion.The discussion below of the U.S. federal income tax consequences to “U.S. Holders” will apply to a beneficial owner of the securities that is for U.S. federalincome tax purposes:1.a citizen or resident of the United States;2.a corporation (or other entity treated as a corporation) that is created or organized (or treated as created or3.organized) under the laws of the United States, any state thereof or the District of Columbia;4.an estate whose income is subject to U.S. federal income tax regardless of its source; or5.a trust if (a) a U.S. court can exercise primary supervision over the trust’s administration and one or more U.S.6.persons are authorized to control all substantial decisions of the trust, or (b) if the trust has a valid election in effect under applicable U.S.Treasury regulations to be treated as a U.S. person.If a beneficial owner of the securities is not described as a U.S. Holder and is not an entity treated as a partnership or other passthrough entity for U.S.federal income tax purposes, such owner will be considered a “NonU.S. Holder.” The material U.S. federal income tax consequences applicable specifically to NonU.S. Holders are described below under the heading “Tax Consequences to NonU.S. Holders.”If a partnership (including for this purpose any entity treated as a partnership for U.S. tax purposes) is a beneficial owner of the securities, the U.S. taxtreatment of a partner in the partnership generally will depend on the status of the partner and the activities of the partnership. A holder of the securities that is apartnership or partners in such a partnership should consult their own tax advisors about the U.S. federal income tax consequences of holding and disposing of thesecurities.This discussion assumes that any distributions made (or deemed made) on the securities and any consideration received by a holder in consideration forthe sale or other disposition of the securities will be in U.S. dollars. This discussion also assumes that the representations contained in the Deposit Agreement aretrue and that the obligations in the Deposit Agreement and any related agreement will be complied with in accordance with their terms. Finally, this discussionassumes that each ADS will only represent ordinary shares in us, and will not represent any other type of security, such as a bond, cash or other property.63For U.S. federal income tax purposes, a holder of an ADS will be treated as the beneficial owner of the shares represented by such ADS and an exchange ofan ADS for ordinary shares will not be subject to U.S. federal income tax. The U.S. Treasury has expressed concerns that parties to whom ADSs are prereleased, orintermediaries in the chain of ownership between holders of ADSs and the issuer of the securities underlying the ADSs may be taking actions that are inconsistentwith the claiming of foreign tax credits by U.S. Holders of ADSs. Such actions would also be inconsistent with the claiming of the reduced rate of tax applicable todividends received by certain noncorporate U.S. Holders, including individual U.S. Holders, as described below under “Tax Consequences to U.S.Holders — Taxation of Distributions.” Accordingly, the availability of foreign tax credits or the reduced tax rate for dividends received by certain noncorporate U.S.Holders, including individual U.S. Holders, could be affected by actions taken by parties to whom the ADSs are released, or by future actions by the U.S. Treasury.Tax Consequences to U.S. HoldersTaxation of DistributionsSubject to the passive foreign investment company, or PFIC, rules discussed below, the gross amount of any cash distributions we make with respect to aU.S. Holder in respect of such U.S. Holder’s ADSs or shares will generally be treated as dividend income if the distributions are made from our current oraccumulated earnings and profits, calculated according to U.S. federal income tax principles. Cash dividends will generally be subject to U.S. federal income tax asordinary income on the day the U.S. Holder actually or constructively receives such income. With respect to noncorporate U.S. Holders for taxable years beginningbefore January 1, 2011, dividends may be taxed at the lower applicable longterm capital gains rate provided that (a) our ADSs or shares are readily tradable on anestablished securities market in the United States, or, in the event we are deemed to be a Chinese “resident enterprise” under the EIT Law (as described above under“People’s Republic of China Taxation”), we are eligible for the benefits of the income tax treaty between the United States and the PRC (the “U.S.PRC Tax Treaty”),(b) we are not a PFIC, as discussed below, for either the taxable year in which the dividend was paid or the preceding taxable year, and (c) certain holding periodrequirements are met. Under published IRS authority, ADSs are considered for purposes of clause (a) above to be readily tradable on an established securitiesmarket in the United States only if they are listed on certain exchanges, which presently include the NASDAQ Capital Market. U.S. Holders should consult their owntax advisors regarding the availability of the lower rate for any dividends paid with respect to our ADSs or shares.Dividends will not be eligible for the dividendsreceived deduction allowed to U.S. corporations in respect of dividends received from other U.S.corporations. Generally, if we distribute noncash property as a dividend (other than pro rata distributions of our shares) out of our current or accumulated earningsand profits (as determined for U.S. federal income tax purposes), a U.S. Holder generally will include in income an amount equal to the fair market value of theproperty, on the date that it is distributed.Distributions in excess of current and accumulated earnings and profits, as determined for U.S. federal income tax purposes, will be treated as a nontaxablereturn of capital to the extent of the U.S. Holder’s basis in its shares or ADSs and thereafter as capital gain. However, we do not plan on calculating our earnings andprofits in accordance with U.S. federal income tax principles. U.S. holders therefore should generally assume that any distributions paid by us will be treated asdividends for U.S. federal income tax purposes.If PRC taxes apply to dividends paid by us to a U.S. Holder (see “People’s Republic of China Taxation,” above), such taxes may be treated as foreign taxeseligible for credit against such holder’s U.S. federal income tax liability (subject to certain limitations), and a U.S. Holder may be entitled to certain benefits under theU.S.PRC Tax Treaty. The rules relating to the U.S. foreign tax credit are complex. U.S. Holders should consult their own tax advisors regarding the creditability ofany such PRC tax and their eligibility for the benefits of the U.S.PRC Tax Treaty.64Taxation of Dispositions of SharesSubject to the PFIC rules discussed below, a U.S. holder that sells or otherwise disposes of its shares will recognize capital gain or loss for U.S. federalincome tax purposes equal to the difference between the amount realized and such U.S. Holder’s tax basis in its shares. Prior to January 1, 2011, capital gains of anoncorporate U.S. holder are generally taxed at a maximum rate of 15% where the property is held for more than one year (and 20% thereafter). The ability to deductcapital losses is subject to limitations.If PRC taxes apply to any gain from the disposition of our shares by a U.S. Holder, such taxes may be treated as foreign taxes eligible for credit against suchholder’s U.S. federal income tax liability (subject to certain limitations), and a U.S. Holder may be entitled to certain benefits under the U.S.PRC Tax Treaty. U.S.Holders should consult their own tax advisors regarding the creditability of any such PRC tax and their eligibility for the benefits of the U.S.PRC Tax Treaty.Passive Foreign Investment CompanyWe do not expect to be a PFIC for U.S. federal income tax purposes for our current tax year or in the foreseeable future. The determination of whether or notwe are a PFIC in respect of any of our taxable years is a factual determination that cannot be made until the close of the applicable tax year and that is based on thetypes of income we earn and the value and composition of our assets (including goodwill), all of which are subject to change. Therefore, we can make no assurancesthat we will not be a PFIC in respect of our current taxable year or in the future.In general, we will be a PFIC in any taxable year if either:1.at least 75% of our gross income for the taxable year is passive income; or2.at least 50% of the value, determined on the basis of a quarterly average, of our assets is attributable to assets that produce or are held for theproduction of passive income.Passive income includes dividends, interest, royalties, rents (other than certain rents and royalties derived in the active conduct of a trade or business), theexcess of gains over losses from certain types of transactions in commodities, annuities and gains from assets that produce passive income. We will be treated asowning our proportionate share of the assets and earning our proportionate share of the income of any corporation in which we own, directly or indirectly, at least25% (by value) of the stock.If we are treated as a PFIC in any year during which a U.S. Holder owns the securities, and such U.S. Holder did not make a marktomarket election, asdescribed below, the U.S. Holder will be subject to special rules with respect to:1.any gain recognized by the U.S. Holder on the sale or other disposition of its shares; and any excess distribution that we make to the U.S. Holder(generally, the excess of the amount of any distributions to such U.S. Holder during a single taxable year of such U.S. Holder over 125% of theaverage annual distributions received by such U.S. Holder in respect of the shares during the three preceding taxable years of such U.S. Holder or,if shorter, such U.S. Holder holding period for the shares).Under these rules:2.the gain or excess distribution will be allocated ratably over the U.S. Holder’s holding period for the shares;3.the amount allocated to the U.S. Holder’s taxable year in which it realized the gain or excess distribution or to the period in the U.S. Holder’sholding period before the first day of our first taxable year in which we are a PFIC will be taxed as ordinary income;4.the amount allocated to other taxable years (or portions thereof) of the U.S. Holder and included in its holding period will be taxed at the highesttax rate in effect for that year; and5.the interest charge generally applicable to underpayments of tax will be imposed in respect of the tax attributable to each such other taxable yearof the U.S. Holder. 6.Special rules apply for calculating the amount of the foreign tax credit with respect to excess distributions by a PFIC.65Alternatively, if a U.S. Holder, at the close of its taxable year, owns ordinary shares in a PFIC that are treated as marketable stock, the U.S. Holder may makea marktomarket election with respect to such shares for such taxable year. Our shares will be “marketable” to the extent that they remain regularly traded on anational securities exchange, such as the NASDAQ Capital Market. If a U.S. Holder makes this election in a timely fashion, it will not be subject to the PFIC rulesdescribed above. Instead, in general, the U.S. Holder will include as ordinary income each year the excess, if any, of the fair market value of its shares at the end ofthe taxable year over its adjusted basis in its shares. Any ordinary income resulting from this election would generally be taxed at ordinary income tax rates andwould not be eligible for the reduced rate of tax applicable to qualified dividend income. The U.S. Holder will also be allowed to take an ordinary loss in respect ofthe excess, if any, of the adjusted basis of its shares over the fair market value at the end of the taxable year (but only to the extent of the net amount of previouslyincluded income as a result of the marktomarket election). The U.S. Holder’s basis in the shares will be adjusted to reflect any such income or loss amounts. U.S.Holders should consult their own tax advisor regarding potential advantages and disadvantages of making a marktomarket election with respect to their shares.Alternatively, a U.S. Holder of stock in a PFIC may avoid the PFIC tax consequences described above in respect to our or shares by making a timely“qualified electing fund” election to include in income its pro rata share of our net capital gains (as longterm capital gain) and other earnings and profits (asordinary income), on a current basis, in each case whether or not distributed, in the taxable year of the U.S. Holder in which or with which our taxable year ends.However, the qualified electing fund election is available only if the PFIC provides such U.S. Holder with certain information regarding its earnings and profits asrequired under applicable U.S. Treasury regulations. We do not intend to furnish the information that a U.S. Holder would need in order to make a qualified electingfund election. Therefore, U.S. Holders will not be able to make or maintain such election with respect to their or shares.If a U.S. Holder owns our shares or during any year that we are a PFIC, such holder must file U.S. Internal Revenue Service Form 8621 regarding suchholder’s shares or and the gain realized on the disposition of the shares. The reduced tax rate for dividend income, discussed in “Taxation of Distributions,” is notapplicable to dividends paid by a PFIC. U.S. Holders should consult with their own tax advisors regarding reporting requirements with respect to their shares.Tax Consequences to NonU.S. HoldersDividends paid to a NonU.S. Holder in respect of our or shares generally will not be subject to U.S. federal income tax, unless the dividends are effectivelyconnected with the NonU.S. Holder’s conduct of a trade or business within the United States (and, if required by an applicable income tax treaty, are attributable toa permanent establishment or fixed base that such holder maintains in the United States).In addition, a NonU.S. Holder generally will not be subject to U.S. federal income tax on any gain attributable to a sale or other disposition of our or sharesunless such gain is effectively connected with its conduct of a trade or business in the United States (and, if required by an applicable income tax treaty, isattributable to a permanent establishment or fixed base that such holder maintains in the United States) or the NonU.S. Holder is an individual who is present in theUnited States for 183 days or more in the taxable year of sale or other disposition and certain other conditions are met (in which case, such gain from United Statessources generally is subject to tax at a 30% rate or a lower applicable tax treaty rate).Dividends and gains that are effectively connected with the NonU.S. Holder’s conduct of a trade or business in the United States (and, if required by anapplicable income tax treaty, are attributable to a permanent establishment or fixed base in the United States) generally will be subject to tax in the same manner as fora U.S. Holder and, in the case of a NonU.S. Holder that is a corporation for U.S. federal income tax purposes, may also be subject to an additional branch profits taxat a 30% rate or a lower applicable tax treaty rate.66Information Reporting and Backup Withholding In general, information reporting for U.S. federal income tax purposes generally should apply to distributions made on the securities within the UnitedStates to a noncorporate U.S. Holder and to the proceeds from sales and other dispositions of the securities by a noncorporate U.S. Holder to or through a U.S.office of a broker. Payments made (and sales and other dispositions effected at an office) outside the United States generally should be subject to informationreporting in limited circumstances.Dividend payments made to U.S. Holders and proceeds paid from the sale or other disposition the securities may be subject to information reporting to theIRS and possible U.S. federal backup withholding at a current rate of 28%. Certain exempt recipients, such as corporations, are not subject to these informationreporting requirements. Backup withholding will not apply to a U.S. Holder who furnishes a correct taxpayer identification number and makes any other requiredcertification, or who is otherwise exempt from backup withholding. U.S. Holders who are required to establish their exempt status must provide a duly executed IRSForm W9.A NonU.S. Holder generally may eliminate the requirement for information reporting and backup withholding by providing certification of its foreignstatus, under penalties of perjury, on a duly executed applicable IRS Form W8 or by otherwise establishing an exemption.Backup withholding is not an additional tax. Rather, the amount of any backup withholding will be allowed as a credit against a U.S. Holder’s or a nonU.S.Holder’s U.S. federal income tax liability and may entitle such holder to a refund, provided that certain required information is timely furnished to the IRS.PROSPECTIVE PURCHASERS OF OUR SECURITIES SHOULD CONSULT WITH THEIR OWN TAX ADVISORS REGARDING THE APPLICATION OFTHE U.S. FEDERAL INCOME TAX LAWS TO THEIR PARTICULAR SITUATIONS AS WELL AS ANY ADDITIONAL TAX CONSEQUENCES RESULTING FROMPURCHASING, HOLDING OR DISPOSING OF OUR SECURITIES, INCLUDING THE APPLICABILITY AND EFFECT OF THE TAX LAWS OF ANY STATE, LOCALOR NONU.S. JURISDICTION, INCLUDING ESTATE, GIFT, AND INHERITANCE LAWS AND APPLICABLE TAX TREATIES.F. DIVIDENDS AND PAYING AGENTS.Not applicable.G. STATEMENT BY EXPERTS.None.H. DOCUMENTS ON DISPLAY.We previously filed a registration statement on Form F1 (File No. 333166056) with the SEC relating to our initial public offering in May 2010. This transition reportdoes not contain all of the information in the registration statement and the exhibits and financial statements included with the registration statement. References inthis transition report to any of our contracts, agreements or other documents are not necessarily complete, and you should refer to the exhibits attached to theregistration statement for copies of the actual contracts, agreements or documents. In addition, we will file transition reports on Form 20F and submit otherinformation under cover of Form 6K. As a foreign private issuer, we are exempt from the proxy requirements of Section 14 of the Exchange Act and our officers,directors and principal shareholders will be exempt from the insider shortswing disclosure and profit recovery rules of Section 16 of the Exchange Act. You may readand copy the registration statement, the related exhibits and other materials we file with the SEC at the SEC's public reference room in Washington, D.C. at 100 FStreet, Room 1580, N.E., Washington, D.C.20549. You can also request copies of those documents, upon payment of a duplicating fee, by writing to the SEC. Pleasecall the SEC at 1800SEC0330 for further information on the operation of the public reference rooms. The SEC also maintains an Internet site that contains reports,proxy and information statements and other information regarding issuers that file with the SEC. The website address is http://www.sec.gov. You may also request acopy of these filings, at no cost, by writing us at LAB 32, SOHO 3Q, No 9, Guanghua Road, Chaoyang District, Beijing, People’s Republic of China, 100020 ortelephoning us at (86) 1085866721.67I. SUBSIDIARY INFORMATIONFor a listing of our subsidiaries, see “Item 4. Information on the Company – C. Organizational Structure.”ITEM 11. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.Interest Rate RiskAs of December 31, 2017, we had no shortterm or longterm borrowings. If we borrow money in future periods, we may be exposed to interest rate risk. Ourexposure to market risk for changes in interest rates relates primarily to the interest income generated by our cash deposits with our banks and heldtomaturityinvestments. We have not used any derivative financial instruments in our investment portfolio. Interest earnings instruments carry a degree of interest rate risk. Wehave not been exposed, nor do we anticipate being exposed to material risks due to changes in interest rates. However, our future interest income may fall short ofexpectations due to changes in interest rates. Foreign Exchange RiskTranslation adjustments amounted to $90,671 and $387,375 gain as of the fiscal year ended December 31, 2017 and 2016, respectively. The Companytranslated balance sheet amounts with the exception of equity at December 31, 2017 at RMB 6.5342 to $1.00 as compared to RMB 6.9370 to $1.00 at December 31,2016. The Company stated equity accounts at their historical rate. The average translation rates applied to income statement accounts for the fiscal year endedDecember 31, 2017 and 2016 were RMB6.7356 and RMB 6.7153 to US$1.00, respectively. So far, the PRC government has been able to manage a stable exchange ratebetween RMB and the U.S. Dollar. Our future downward translation adjustments may occur and can be significant due to changes in such exchange rate.If we decide to convert our RMB into U.S. dollars for the purpose of making payments for dividends on our ordinary shares or for other business purposes,appreciation of the U.S. dollar against the RMB would have a negative effect on the U.S. dollar amount available to us.The PRC government imposes strict restrictions on PRC resident companies regarding converting RMB into foreign currencies and vice versa under capitalaccount transactions, such as receiving equity investments from outside of the PRC, making equity investments outside of the PRC, borrowing money from orlending money outside of the PRC, and repaying debt or remitting liquidated assets and/or accumulated profits outside of the PRC. These transactions have to beapproved by the relevant PRC government authorities, including but not limited to the commerce bureau, the tax bureau and the State Administration of ForeignExchange, or SAFE, and have to be conducted at banks entrusted by the local SAFE branch. As our business continues to grow, we may need to continuouslyfinance our PRC subsidiaries by raising capital from outside of the PRC. The restriction on converting RMB into foreign currencies, and vice versa, may limit ourability to use capital resources from outside of the PRC. Such restrictions may also limit our ability to remit profits from our PRC subsidiaries outside of the PRC,therefore potentially limiting our ability to pay dividends to our shareholders. In addition, such restrictions will limit our ability to freely transfer temporary excesscash in our or our subsidiaries’ bank accounts in and out of the PRC, therefore limiting our ability to conduct crossborder cash management activities to optimizethe utilization of our cash.InflationAlthough China has experienced an increasing inflation rate, inflation has not had a material impact on our results of operations in recent years. Accordingto the National Bureau of Statistics of China, the change in the consumer price index in China was 0.46%, (0.77%), and 1.16% in 2001, 2002 and 2003, respectively.However, in connection with a 3.9% increase in 2004, the PRC government announced measures to restrict lending and investment in China in order to reduceinflationary pressures in China’s economy. Following the government’s actions, the consumer price index decreased to 1.8% in 2005 and to 1.5% in 2006. In 2007, theconsumer price index increased to 4.8%. In response, China’s central bank, the People’s Bank of China, announced that the bank reserve ratio would rise half apercentage point to 15.5% in an effort to reduce inflation pressures. China’s consumer price index growth rate reached 8.7% year over year in 2008. In 2009 and 2010,the change in the consumer price index in China was minus 0.7% and 3.3%.China consumer price index in November 2017 was 3.8% higher than that of the same period in 2016. China consumer price index in December 2016 was2.4% higher than that of the same period in 2015. China consumer price index in December 2015 was 4.8% higher than that of the same period in 2014. Chinaconsumer price index in December 2014 was 3.3% higher than that of the same period in 2013. The results of the PRC government’s actions to combat inflation aredifficult to predict. Adverse changes in the Chinese economy, if any, will likely impact the financial performance of a variety of industries in China that use, or wouldbe candidates to use, our software products and services.68ITEM 12. DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES.A. DEBT SECURITIES.Not applicable. B. WARRANTS AND RIGHTS.Not applicable.C. OTHER SECURITIES.Not applicable.D. AMERICAN DEPOSITARY SHARES.The Bank of New York Mellon, as depositary (the “Depositary”) for the Company’s ADR facility, notified the owners and holders of the Company’s ADSsthat the ADS facility will terminate effective at 5:00 p.m. (Eastern Time) on September 19, 2018. Under the terms of the Deposit Agreement among the Company, theDepositary and the owners and holders of ADSs of the Company (the “Deposit Agreement”), owners and holders of the Company’s ADSs have until at leastJanuary 21, 2019 to surrender their ADSs to the Depositary for delivery of the underlying ordinary shares of the Company. Subsequent to January 21, 2019, underthe terms of the Deposit Agreement, the Depositary may attempt to sell any ordinary shares remaining on deposit with the Depositary. If the Depositary sells suchunderlying ordinary shares or receives value for such shares, holders must surrender their ADSs to obtain payment of the sale proceeds, net of expenses andapplicable tax and charges. We completed the voluntary delisting of our ADSs from the NASDAQ Capital Market on September 19, 2018.You may hold ADSs either (A) directly (i) by having ADSs registered in your name in the Direct Registration System, or (ii) by having an Americandepositary receipt, also referred to as an ADR, which is a certificate evidencing a specific number of ADSs, registered in your name, or (B) indirectly by holding asecurity entitlement in ADSs through your broker or other financial institution. If you hold ADSs directly, you are a registered ADS holder, also referred to as anADS holder. This description assumes you are an ADS holder. If you hold the ADSs indirectly, you must rely on the procedures of your broker or other financialinstitution to assert the rights of ADS holders described in this section. You should consult with your broker or financial institution to find out what thoseprocedures are.The Direct Registration System, or DRS, is a system administered by The Depository Trust Company, also referred to as DTC, pursuant to which thedepositary may register the ownership of uncertificated ADSs, which ownership will be confirmed by periodic statements sent by the depositary to the registeredholders of uncertificated ADSs.69As an ADS holder, you will not be treated as one of our registered shareholders and you will not have direct shareholder rights. British Virgin Island’s lawgoverns our direct shareholders’ rights. The depositary will be the holder of the shares underlying your ADSs. As a registered holder of ADSs, you will have ADSholder rights. A Deposit Agreement among us, the depositary and you, as an ADS holder, and all other persons indirectly holding ADSs, sets out ADS holder rightsas well as the rights and obligations of the depositary. New York law governs the Deposit Agreement and the ADSs.The following is a summary of the material provisions of the Deposit Agreement. For more complete information, you should read the entire DepositAgreement and the form of ADS, which contains the terms of the ADSs. The Deposit Agreement is filed as an exhibit to our registration statement filed on Form F1.You may obtain the registration statement and the attached Deposit Agreement from the SEC’s website at http://www.sec.gov. You may also obtain a copy of theDeposit Agreement at the SEC’s Public Reference Room, which is located at 100 F Street, NE, Washington, DC 20549. You may obtain information on the operationof the Public Reference Room by calling the SEC at 18007320330. Fees and ExpensesPersons depositing or withdrawing shares or ADS holders must pay:For:$5.00 (or less) per 100 ADSs (or portion of 100 ADSs)Issuance of ADSs, including issuances resulting from a distribution of shares orrights or other propertyCancellation of ADSs for the purpose of withdrawal, including if the DepositAgreement terminates$.05 (or less) per ADSAny cash distribution to ADS holdersA fee equivalent to the fee that would be payable if securities distributed to youhad been shares and the shares had been deposited for issuance of ADSsDistribution of securities distributed to holders of deposited securities whichare distributed by the depositary to ADS holders$.05 (or less) per ADSs per calendar yearDepositary servicesRegistration or transfer feesTransfer and registration of shares on our share register to or from the name ofthe depositary or its agent when you deposit or withdraw sharesExpenses of the depositaryCable, telex and facsimile transmissions (when expressly provided in the DepositAgreement) converting foreign currency to U.S. dollarsTaxes and other governmental charges the depositary or the custodian have topay on any ADS or share underlying an ADS, for example, share transfer taxes,stamp duty or withholding taxesAs necessaryAny charges incurred by the depositary or its agents for servicing the depositedsecuritiesAs necessaryPayment of TaxesHolders of our ADSs are responsible for any taxes or other governmental charges payable on their ADSs or on the deposited securities represented by anyof their ADSs. The depositary may refuse to register any transfer of a holder’s ADSs or allow withdrawal of the deposited securities represented by the ADSs untilsuch taxes or other charges are paid. It may apply payments owed to the holder or sell deposited securities represented by the ADSs to pay any taxes owed and theholder will remain liable for any deficiency. If the depositary sells deposited securities, it will, if appropriate, reduce the number of ADSs to reflect the sale and pay toADS holders any proceeds, or send to ADS holders any property, remaining after it has paid the taxes.70PART IIITEM 13. DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES.None.ITEM 14. MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS.Use of Proceeds.We completed our initial public offering on May 14, 2010 (the “IPO”), which generated net proceeds of approximately $14.6 million. All remaining cash onhand from the proceeds of our IPO was transferred to C Media Limited and its subsidiaries following the completion of the asset exchange transactions on August17, 2018.ITEM 15. CONTROLS AND PROCEDURES.Disclosure Controls and ProceduresOur Chief Executive Officer and Chief Financial Officer have reviewed and evaluated the effectiveness of our disclosure controls and procedures, whichincluded inquiries made to certain other of our employees. The term “disclosure controls and procedures,” as defined in Rules 13a15(e) and 15d15(e) under theExchange Act, means controls and other procedures of a company that are designed to ensure that information required to be disclosed by a company in thereports, such as this report, that it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in theSEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to bedisclosed by a company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the company’s management, including itsprincipal executive and principal financial officers, as appropriate to allow timely decisions regarding required disclosure. Management recognizes that any controlsand procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives and management necessarilyapplies its judgment in evaluating the costbenefit relationship of possible controls and procedures. Based on that evaluation, our Chief Executive Officer and ChiefFinancial Officer have each concluded that, as of December 31, 2017, the Company’s disclosure controls and procedures were not effective due to the materialweakness described in the “Management’s Report on Internal Control over Financial Reporting” section below.Management’s Report on Internal Control Over Financial ReportingOur management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Exchange ActRules 13a15(f) and 15d15(f). Internal control over financial reporting refers to the process designed by, or under the supervision of, our principal executive officerand principal financial officer, and effected by our Board of Directors, management and other personnel, to provide reasonable assurance regarding the reliability offinancial reporting and the preparation of financial statements for external purposes in accordance with U.S. GAAP and includes those policies and procedures that(i) pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of the assets of the Company; (ii)provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with U.S. GAAP, and thatreceipts and expenditures of the Company are being made only in accordance with authorizations of management and directors of the Company; and (iii) providereasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the Company’s assets that could have a materialeffect on the financial statements.71Any system of internal control, no matter how well designed, has inherent limitations. Therefore, even those systems determined to be effective canprovide only reasonable assurance with respect to financial statement preparation and presentation. Because of the inherent limitations of internal control, there is arisk that material misstatements may not be prevented or detected on a timely basis by internal control over financial reporting. However, these inherent limitationsare known features of the financial reporting process. Therefore, it is possible to design into the process safeguards to reduce, though not eliminate, this risk.Management assessed our internal control over financial reporting as of the year ended December 31, 2017. In making this assessment, management usedthe criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in the 2014 report entitled "Internal ControlIntegratedFramework." The COSO framework summarizes each of the components of a company’s internal control system, including (i) the control environment, (ii) riskassessment, (iii) control activities, (iv) information and communication, and (v) monitoring. Based on such assessment, management concluded that its internalcontrol over financial reporting as of December 31, 2017 was not effective because of the following material weakness:Lack of U.S. GAAP expertise. Although our accounting personnel are professional and experienced in accounting requirements and procedures generallyaccepted in the PRC, they do not have sufficient knowledge, experience and training in maintaining our books and records and preparing financial statements inaccordance with U.S. GAAP standards and SEC rules and regulations. The staff needs additional training to become experienced in U.S. GAAPbased reporting,including the skills of U.S. GAAPbased period end closing, consolidation of financial statements, and U.S. GAAP conversion.In order to address the above material weakness, our management plans to take the following steps:We will employ, as needed, outside professionals to provide key accounting personnel ongoing technical trainings to ensure their proper understanding ofU.S. GAAP and newly announced accounting standards.The Company believes the foregoing measures will remediate the identified material weakness in future periods. The Company is committed to monitoringthe effectiveness of these measures and making any changes that are necessary and appropriate.Notwithstanding the conclusion that its internal control over financial reporting was not effective as of the end of the period covered by this report, ourChief Executive Officer and Chief Financial Officer believe that the financial statements and other information contained in this report present fairly, in all materialrespects, its business, financial condition and results of operations. Nothing has come to the attention of management that causes them to believe that any materialinaccuracies or errors exist in the Company’s financial statements as of December 31, 2017.Attestation report of the registered public accounting firm.This transition report does not include an attestation report of the Company’s registered public accounting firm on internal control over financial reportingbecause the Company is a nonaccelerated filer permanently exempted from section 404(b) of the SarbanesOxley Act.Changes in Internal Control over Financial ReportingThere were no changes in the Company’s internal control over financial reporting that occurred during our fiscal year ended December 31, 2017 that hasmaterially affected or is reasonably likely to materially affect our internal control over financial reporting.ITEM 16. [RESERVED]ITEM 16A. AUDIT COMMITTEE FINANCIAL EXPERT.Our board of directors has determined that Mr. Dennis Galgano qualifies as an audit committee financial expert. Our board of directors has determined thatMessrs. Dennis Galgano, Jin Shi, Jiming Ha and Zhihao Xu meet the definition of an “independent director” under the applicable NASDAQ Rules and under Rule10A3 of the Securities Exchange Act of 1934, as amended.72ITEM 16B. CODE OF ETHICS.Our board of directors has adopted a code of business conduct and ethics applicable to our directors, officers and employees. We have posted the code onour website at http://www.luokung.com.ITEM 16C. PRINCIPAL ACCOUNTANT FEES AND SERVICES.Audit FeesThe aggregate fees billed by Moore Stephens CPA Limited for professional services rendered for the audit of our financial information disclosed in thistransition report on Form 20F was $280,000 for the two years ended December 31, 2017 and 2016.The aggregate fees billed by our previous auditor, BDO China Shu Lun Pan Certified Public Accountants LLP for professional services rendered for theaudit of our annual financial information included in our annual reports on Form 20F was $105,500 for each of the fiscal years ended September 30, 2017, 2016 and2015.Tax FeesWe did not engage our principal accountants to provide tax or related services during the last two fiscal years.All Other FeesWe did not engage our principal accountants to render services to us during the last two fiscal years, other than as reported above.ITEM 16D. EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES.Not applicable.ITEM 16E. PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS.Not applicable.ITEM 16F. CHANGE IN REGISTRANT’S CERTIFYING ACCOUNTANT.Not applicable.ITEM 16G. CORPORATE GOVERNANCE.We are incorporated in the BVI and our corporate governance practices are governed by applicable BVI law as well as our memorandum and articles ofassociation. In addition, because our ADSs are listed on NASDAQ, we are subject to NASDAQ’s corporate governance requirements. NASDAQ Listing Rule5620(a) requires each issuer to hold an annual meeting of shareholders no later than one year after the end of the issuer’s fiscal year end. However, NASDAQ ListingRule 5615(a)(3) permits a foreign private issuer like us to follow home country practices in lieu of certain requirements of Listing Rule 5600, provided that suchforeign private issuer discloses in its transition report filed with the SEC each requirement of Rule 5600 that it does not follow and describes the home countrypractice followed in lieu of such requirement. We follow home country practice with respect to annual meetings and did not hold an annual shareholder meeting inthe year ended December 31, 2017. We may, however, hold annual shareholder meetings in the future if there are significant issues that require shareholders’approvals.ITEM 16H. MINE SAFETY DISCLOSURE.Not applicable.73PART IIIITEM 17. FINANCIAL STATEMENTS.We have elected to provide financial statements and related information specified in Item 18.ITEM 18. FINANCIAL STATEMENTS.See “Index to Consolidated Financial Statements” for a list of all financial statements filed as part of this transition report. The Financial Statements arebeginning on page F1.ITEM 19. EXHIBITS.See the Exhibit Index following the signature page of this report, which is incorporated herein by reference.74SIGNATURESThe registrant hereby certifies that it meets all of the requirements for filing on Form 20F and that it has duly caused and authorized the undersigned tosign this transition report on its behalf.LUOKUNG TECHNOLOGY CORP.By:/s/ Xuesong Song Xuesong SongChief Executive Officer(principal executive officer)October 12, 201875EXHIBIT INDEXThe following documents are filed as part of this transition report on Form 20F.ExhibitNumberDescription1.1Amended and Restated Memorandum of Association and Articles of Association of Luokung Technology Corp., dated August 20, 2018, and ascurrently in effect.2.1*Deposit Agreement among the Company, depositary and holders of the American Depositary Receipts.2.2*Form of American Depositary Receipt.2.3*English translation of Entrusted Management Agreement dated December 15, 2009 between Xi’an Softech Co., Ltd., Xi’an Kingtone InformationTechnology Co., Ltd. and the shareholders of Xi’an Kingtone Information Technology Co., Ltd.3.1*English translation of Shareholder’s Voting Proxy Agreement dated December 15, 2009 between Xi’an Softech Co., Ltd., Xi’an Kingtone InformationTechnology Co., Ltd. and the shareholders of Xi’an Kingtone Information Technology Co., Ltd.4.1*English translation of Exclusive Technology Service Agreement dated December 15, 2009 between Xi’an Softech Co., Ltd. and Xi’an KingtoneInformation Technology Co., Ltd.4.2*English translation of Exclusive Option Agreement dated December 15, 2009 between Xi’an Softech Co., Ltd., Xi’an Kingtone InformationTechnology Co., Ltd. and the shareholders of Xi’an Kingtone Information Technology Co., Ltd.4.3*English translation of Equity Pledge Agreement dated December 15, 2009 between Xi’an Softech Co., Ltd., Xi’an Kingtone Information TechnologyCo., Ltd. and the shareholders of Xi’an Kingtone Information Technology Co., Ltd.4.4*English translation of Loan Agreement dated September 14, 2009 between Xi’an Kingtone Information Technology Co., Ltd. and Xian CityCommercial Bank.4.5*English translation of Mortgage Agreement dated September 14, 2009 between Xi’an Kingtone Information Technology Co., Ltd. and Xian CityCommercial Bank.4.6*English translation of Form of Employment Agreement entered into between the Company and the Company’s executive officers.4.7*2010 Omnibus Incentive Plan of the Company.4.8**English translation of Project Construction Contract dated August 10, 2010 between Xi’an Hu County Yuxing Agriculture Science & TechnologyCo., Ltd. and Xi’an Kingtone Information Technology Co., Ltd.4.9***Asset Exchange Agreement by and between C Media Limited and the Company dated as of January 25, 2018.4.10***Securities Purchase Agreement by and among Redstone YYL Management Limited and five shareholders holding majority of the shares of theCompany dated as of January 25, 2018.4.15Exclusive Business Cooperation Agreement by and between Zhongchuan Tianxia Information Technology (Shenzhen) Co., Ltd., and Beijing MobileVision Technology Co., Ltd., dated August 31, 2015.764.16Exclusive Option Agreement by and among Zhongchuan Tianxia Information Technology (Shenzhen) Co., Ltd., Xuesong Song, Weili Chen, PingWang, Donglai Liu, and Beijing Mobile Vision Technology Co., Ltd., dated August 31, 2015.4.17Equity Interest Pledge Agreement by and among Zhongchuan Tianxia Information Technology (Shenzhen) Co., Ltd., Xuesong Song, Weili Chen, PingWang, Donglai Liu, and Beijing Mobile Vision Technology Co., Ltd., dated August 31, 2015.4.18Addendum to Asset Exchange Agreement by and among the Company, Topsky Infotech Holdings Pte Ltd. and C Media Limited, dated October 3,2018. Incorporated by reference to the Company’s Current Report on Form 6K filed on October 4, 2018.4.19Stock Purchase Agreement, dated August 25, 2018, by and among the Company, LK Technology Ltd., and the shareholders listedtherein. Incorporated by reference to the Company’s Current Report on Form 6K filed on August 27, 2018.4.20Power of Attorney by Weili Chen, dated August 31, 2015.4.21Power of Attorney by Ping Wang, dated August 31, 2015.4.22Power of Attorney by Donglai Liu, dated August 31, 2015.4.23Power of Attorney by Xuesong Song, dated August 31, 2015.8.1List of Subsidiaries and Consolidated Variable Interest Entities10.1Employment Agreement, dated August 19, 2018, between Luokung Technology Corp. and Xuesong Song.†10.2Employment Agreement, dated August 19, 2018, by and between Luokung Technology Corp. and Jie Yu.†12.1Certification of Chief Executive Officer required by Rule 13a14(a).12.2Certification of Chief Financial Officer required by Rule 13a14(a).13.1Certification of Chief Executive Officer required by Rule 13a14(a).13.2Certification of Chief Financial Officer required by Rule 13a14(a).101.INSXBRL Instance Document.101.SCHXBRL Taxonomy Extension Schema Document.101.CALXBRL Taxonomy Extension Calculation Linkbase Document.101.DEFXBRL Taxonomy Extension Definition Linkbase Document.101.LABXBRL Taxonomy Extension Label Linkbase Document.101.PREXBRL Taxonomy Extension Presentation Linkbase Document.*Previously filed as an exhibit to the Company’s Registration Statement on Form F1 (Reg. No. 333166056) filed with the Commission and incorporated hereinby reference.**Previously filed as exhibits to the Company’s Transition Report on Form 20F filed with the Commission on January 20, 2011 and incorporated herein byreference.***Previously filed as exhibits to the Company’s Annual Report on Form 20F filed with the Commission on February 9, 2018 and incorporated herein byreference.†Indicates management contract or compensatory plan, contract or arrangement.77LK Technology Ltd. and SubsidiariesCONSOLIDATED FINANCIAL STATEMENTSTABLE OF CONTENTSPage(s)Report of Independent Registered Public Accounting FirmF2Consolidated Financial StatementsConsolidated Balance SheetsF3Consolidated Statements of Operations and Comprehensive LossF4application.Chuang (Vincent) Tao was appointed as a member of the Board effective on August 25, 2018. Dr. Tao was the Chairman of SuperEngine Suzhou from 2014to 2017. Dr. Tao has been the president of the Seasky Angel Investment Alliance of Shanghai since 2015. Dr. Tao received his Bachelor Degree of geographicinformation and telemetry from Wuhan University in China in 1990 and received his Ph.D. from University of Calgary, Canada in 1997.Dennis Galgano was appointed as a director of the Company following the consummation of the asset exchange agreement. He was a registered consultantwith Morgan Joseph Triartisan LLC from November 2016 until October 2017, and previously served as vice chairman and head of international investment bankingfor Morgan Joseph Triartisan LLC, which is a registered broker dealer engaged in the investment banking and financial advisory industry. Mr. Galgano received aB.S. degree in Chemistry from St. John’s University and an M.B.A. from The Wharton School in 1972.Jin Shi was appointed as a director of the Company following the consummation of the asset exchange transactions. Mr. Shi has served as the managingpartner of Chum Capital Group, a merchant bank focused on helping Chinese growth companies to access global capital, since January 2013. Mr. Shi has also servedas a director of Seven Stars Cloud Group, Inc. (NASDAQ: SSC), a premium video on demand service provider, since January 2014, and joined the audit committee ofits board of directors in March 2016. He also served as a director and member of the audit committee of Pingtan Marine Enterprise, Ltd. (NASDAQ: PME), a marineenterprise group primarily engaged in ocean fishing through its subsidiaries. Mr. Shi received an EMBA degree from the Guanghua Management School of BeijingUniversity, and a Bachelor’s degree of science in Chemical Engineering from Tianjin University.Jiming Ha was appointed as a director of the Company following the consummation of the asset exchange agreement, and has also served as a seniorresearch fellow for the China Finance 40 Forum since March 1, 2018, and previously served as a managing director of Goldman Sachs from January 2017 to April2017. Mr. Ha served as a vice chairman and chief investment strategist of the Investment Strategy Group for Private Wealth Management at Goldman Sachs from2010 to January 2017. Mr. Ha holds a PhD in Economics from the University of Kansas and Master’s and Bachelor’s degrees of science from Fudan University.Zhihao Xu was appointed as a director of the Company following the consummation of the asset exchange transactions. Mr. Xu has served as the chiefexecutive officer of Geely Group Co., Ltd., in Hangzhou, China, since December 2017, and previously served as the chairman and chief executive officer of BeijingDingchengrenhe Investment Co., Ltd., a funds management company, from January 2017 to December 2017. Mr. Xu served as the chairman of president of HNAUSOLV CO., LTD., and the chief innovation officer of HNA Logistics Group from January 2014 to December 2016, and prior to that as the chairman of GopayInnovation Technology Co. Ltd., an online payment system operator supporting online money transfers, from April 2012 to January 2014. Mr. Xu graduated from theBusiness School of Renmin University of China and from the Wudaokou Finance College of Tsinghua University with a fund qualification certificate and securitiesqualification certificate.B. COMPENSATION.Compensation of Directors and Executive OfficersFor the ninemonth transition period ended September 30, 2018 and the fiscal year ended December 31, 2017, we did not pay any cash compensation to ourexecutive officers of LK Technology Ltd. and a to our directors for serving on our board of directors of LK Technology Ltd.37Other than nonemployee directors, we do not intend to compensate directors for serving on our board of directors or any of its committees. We do,however, intend to reimburse each member of our board of directors for outofpocket expenses incurred by each director in connection with attending meetings ofthe board of directors and its committees.AdministrationThe Incentive Plan is administered by our board of directors, or at the discretion of the board, by our compensation committee. Our board of directors hasdelegated authority to our compensation committee to administer the Incentive Plan. Subject to the terms of the Incentive Plan, the compensation committee mayselect participants to receive awards, determine the types of awards and terms and conditions of awards, and interpret provisions of the Incentive Plan.The ordinary shares issued or to be issued under the Incentive Plan consist of authorized but unissued shares. If any ordinary shares covered by an awardare not purchased or are forfeited, or if an award otherwise terminates without delivery of any ordinary shares, then the number of ordinary shares counted againstthe aggregate number of ordinary shares available under the plan with respect to the award will, to the extent of any such forfeiture or termination, again be availablefor making awards under the Incentive Plan.EligibilityAwards may be made under the Incentive Plan to our employees, officers, directors, consultants or advisers or to any of our affiliates, and to any otherindividual whose participation in the Incentive Plan is determined to be in our best interests by our board of directors.Amendment or Termination of the PlanOur board of directors may terminate or amend the Incentive Plan at any time and for any reason. No amendment, however, may adversely impair the rightsof grantees with respect to outstanding awards. The Incentive Plan has a term of ten years. Amendments will be submitted for shareholder approval to the extentrequired by applicable stock exchange listing requirements or other applicable laws.OptionsThe Incentive Plan permits the granting of options to purchase ordinary shares intended to qualify as incentive share options under the Internal RevenueCode and share options that do not qualify as incentive share options, or nonqualified share options.The exercise price of each share option may not be less than 100% of the fair market value of our ADSs representing ordinary shares on the date of grant.In the case of certain 10% shareholders who receive incentive share options, the exercise price may not be less than 110% of the fair market value of our ADSsrepresenting ordinary shares on the date of grant. An exception to these requirements is made for options that we grant in substitution for options held byemployees of companies that we acquire. In such a case the exercise price is adjusted to preserve the economic value of the employee’s share option from his or herformer employer.The term of each share option is fixed by the compensation committee and may not exceed ten years from the date of grant. The compensation committeedetermines at what time or times each option may be exercised and the period of time, if any, after retirement, death, disability or termination of employment duringwhich options may be exercised.Options may be made exercisable in installments. The award agreement provides the vesting of the options. Exercisability of options may be accelerated bythe compensation committee.38In general, an optionee may pay the exercise price of an option by (1) cash or check (in U.S. dollars or Renminbi or other local currency as approved by thecompensation committee), (2) ordinary shares held for such period of time as may be required by the compensation committee, (3) delivery of a notice of a marketorder with a broker with respect to ordinary shares then issuable upon exercise of an option, and that the broker has been directed to pay us a sufficient portion ofnet proceeds of the sale in satisfaction of the exercise price, provided that payment of such proceeds is then made to us upon settlement of such sale, (4) otherproperty acceptable to the compensation committee with a fair market value equal to the exercise price, (5) cashless exercise or (6) any combination of the foregoing.Share options granted under the Incentive Plan may not be sold, transferred, pledged, or assigned other than by will or under applicable laws of descentand distribution. However, we may permit limited transfers of nonqualified options for the benefit of immediate family members of grantees to help with estateplanning concerns or pursuant to a domestic relations order in settlement of marital property rights.Other AwardsThe compensation committee may also award under the Incentive Plan:1.ordinary shares subject to restrictions;2.deferred ordinary shares, credited as deferred ordinary share units, but ultimately payable in the form of unrestricted ordinary shares inaccordance with the terms of the grant or with the participant’s deferral election;3.ordinary share units subject to restrictions;4.unrestricted ordinary shares, which are ordinary shares issued at no cost or for a purchase price determined by the compensation committee whichare free from any restrictions under the 2011 Omnibus Incentive Plan;5.dividend equivalent rights entitling the grantee to receive credits for dividends that would be paid if the grantee had held a specified number ofordinary shares; or6.a right to receive a number of ordinary shares or, in the discretion of the compensation committee, an amount in cash or a combination of ordinaryshares and cash, based on the increase in the fair market value of the ADSs representing ordinary shares underlying the right during a statedperiod specified by the compensation committee.Effect of Certain Corporate TransactionsCertain change of control transactions involving us may cause awards granted under the Incentive Plan to vest, unless the awards are continued orsubstituted for by the surviving company in connection with the corporate transaction.Unless otherwise provided in the appropriate option agreement on the date of grant or provided by our board of directors thereafter with the consent of thegrantee, options granted under the Incentive Plan become exercisable in full following (1) a dissolution of our company or a merger, consolidation or reorganizationof our company with one or more other entities in which we are not the surviving entity, (2) a sale of substantially all of our assets to another person or entity, or (3)any transaction (including without limitation a merger or reorganization in which we are the surviving entity) which results in any person or entity owning 50% ormore of the combined voting power of all classes of our shares.39Adjustments for Dividends and Similar EventsThe compensation committee will make appropriate adjustments in outstanding awards and the number of ordinary shares available for issuance under theIncentive Plan, including the individual limitations on awards, to reflect ordinary share dividends, stock splits and other similar events.C. BOARD PRACTICES.Board of DirectorsOur board of directors consists of six members being Messrs. Xuesong Song, Kegang Peng, Dennis Galgano, Jin Shi, Jiming Ha and Zhiaho Xu. Ourdirectors hold office until our annual meeting of shareholders, where their successors will be duly elected and qualified, or until the directors’ death, resignation orremoval, whichever is earlier. Our directors are not subject to a term of office and hold office until their resignation, death or incapacity or until their respectivesuccessors have been elected and qualified in accordance with our fourth amended and restated memorandum of association and articles of association. A directorwill be removed from office if, among other things, the director (1) becomes bankrupt, (2) dies or becomes of unsound mind, or (3) is absent from meetings of ourboard of directors for six consecutive months without leave and our board of directors resolves that the office is vacated. A director is not entitled to any specialbenefits upon termination of service with the company.Director IndependenceOur board of directors consists of six members; Messrs. Dennis Galgano, Jin Shi, Jiming Ha and Zhihao Xu have been determined by us to be independentdirectors within the meaning of the independent director guidelines of the NASDAQ Corporate Governance Rules (the “NASDAQ Rules”).Committees of Our Board of DirectorsTo enhance our corporate governance, we established three committees under our board of directors: an audit committee, a compensation committee, and anominating and corporate governance committee. We have adopted a charter for each of these committees. The committees have the following functions andmembers.Audit CommitteeOur audit committee reports to our board of directors regarding the appointment of our independent public accountants, the scope and results of ourannual audits, compliance with our accounting and financial policies and management’s procedures and policies relating to the adequacy of our internal accountingcontrols. Our audit committee consists of Messrs. Dennis Galgano, Jin Shi, and Jiming Ha. Mr. Galgano, having accounting and financial management expertise,serves as the chairman of the audit committee and is an “audit committee financial expert” as defined by the rules and regulations of the SEC. Our board of directorshas determined that each of these persons meet the definition of an “independent director” under the applicable NASDAQ Rules and under Rule 10A3 of theSecurities Exchange Act of 1934, as amended (the “Exchange Act”).Our audit committee is responsible for, among other things:●the appointment, evaluation, compensation, oversight and termination of the work of our independent auditor (including resolution of disagreementsbetween management and the independent auditor regarding financial reporting);●an annual performance evaluation of the audit committee;●establishing procedures for the receipt, retention and treatment of complaints regarding accounting, internal accounting controls, auditing matters orpotential violations of law, and the confidential, anonymous submission by our employees of concerns regarding questionable accounting or auditingmatters or potential violations of law;40●ensuring that it receives an transition report from our independent auditor describing our internal control procedures and any steps taken to deal withmaterial control deficiencies and attesting to the auditor’s independence and describing all relationships between the auditor and us;●reviewing our annual audited financial statements and quarterly financial statements with management and our independent auditor;●reviewing and approving all proposed related party transactions;●reviewing our policies with respect to risk assessment and risk management;●meeting separately and periodically with management and our independent auditor; and●reporting regularly to our board of directors.Compensation CommitteeOur compensation committee assists the board of directors in reviewing and approving the compensation structure of our directors and executive officers,including all forms of compensation to be provided to our directors and executive officers. In addition, the compensation committee reviews share compensationarrangements for all of our other employees. Members of the compensation committee are not prohibited from direct involvement in determining their owncompensation. Our chief executive officer is not permitted to be present at any committee meeting during which his or her compensation is deliberated. Ourcompensation committee consists of Dennis Galgano and Jin Shi, with Mr. Shi serving as the chairman of the compensation committee. Our board of directors hasdetermined that each of these persons meet the definition of “independent director” under the applicable requirements of the NASDAQ Rules.Our compensation committee is responsible for, among other things:●reviewing and approving corporate goals and objectives relevant to the compensation of our chief executive officer, evaluating the performance of ourchief executive officer in light of those goals and objectives and setting the compensation level of our chief executive officer based on this evaluation;●reviewing and making recommendations to the board with respect to the compensation of our executives, incentive compensation and equitybasedplans that are subject to board approval; and●providing annual performance evaluations of the compensation committee.Nominating and Corporate Governance CommitteeOur nominating and corporate governance committee assists the board of directors in identifying and selecting or recommending individuals qualified tobecome our directors, developing and recommending corporate governance principles and overseeing the evaluation of our board of directors and management. Ournominating and corporate governance committee consists of Jiming Ha and Zhihao Xue, with Mr. Ha serving as the chairman of the nominating and corporategovernance committee. Our board of directors has determined that each of these persons meet the definition of “independent director” under the applicablerequirements of the NASDAQ Rules.Our nominating and corporate governance committee is responsible for, among other things:●selecting and recommending to our board nominees for election or reelection to our board, or for appointment to fill any vacancy;●reviewing annually with our board the current composition of the board of directors with regards to characteristics such as independence, age, skills,experience and availability of service to us;●selecting and recommending to our board the names of directors to serve as members of the audit committee and the compensation committee, as wellas the nominating and corporate governance committee itself; advising our board of directors periodically with regards to significant developments inthe law and practice of corporate governance as well as our compliance with applicable laws and regulations, and making recommendations to ourboard of directors on all matters of corporate governance and on any remedial action to be taken; and●monitoring compliance with our code of business conduct and ethics, including reviewing the adequacy and effectiveness of our procedures to ensureproper compliance.41Code of Business Conduct and EthicsOur board of directors adopted a code of business conduct and ethics applicable to our directors, officers and employees.Duties of DirectorsUnder British Virgin Islands law, our directors have a duty to act honestly, in good faith and with a view to our best interests. Our directors also have a dutyto exercise care, diligence and skills that a reasonably prudent person would exercise in comparable circumstances. In fulfilling their duty of care to us, our directorsmust ensure compliance with our memorandum of association and articles of association. We have the right to seek damages if a duty owed by our directors isbreached.The functions and powers of our board of directors include, among others:●appointing officers and determining the term of office of the officers;●authorizing the payment of donations to religious, charitable, public or other bodies, clubs, funds or associations as deemed advisable;●exercising the borrowing powers of the company and mortgaging the property of the company;●executing cheques, promissory notes and other negotiable instruments on behalf of the company; and●maintaining or registering a register of mortgages, charges or other encumbrances of the company.Remuneration and BorrowingThe directors may receive such remuneration as our board of directors may determine from time to time. Each director is entitled to be repaid or prepaid alltraveling, hotel and incidental expenses reasonably incurred or expected to be incurred in attending meetings of our board of directors or committees of our board ofdirectors or shareholder meetings or otherwise in connection with the discharge of his or her duties as a director. The compensation committee will assist thedirectors in reviewing and approving the compensation structure for the directors.Our board of directors may exercise all the powers of the company to borrow money and to mortgage or charge our undertakings and property or any partthereof, to issue debentures, debenture stock and other securities whenever money is borrowed or as security for any debt, liability or obligation of the company orof any third party.QualificationA director is not required to hold shares as a qualification to office.42Limitation on Liability and Other Indemnification MattersBritish Virgin Islands law does not limit the extent to which a company’s memorandum of association and articles of association may provide forindemnification of officers and directors, except to the extent any such provision may be held by the British Virgin Islands courts to be contrary to public policy,such as to provide indemnification against civil fraud or the consequences of committing a crime.Under our memorandum of association and articles of association, we may indemnify our directors, officers and liquidators against all expenses, includinglegal fees, and against all judgments, fines and amounts paid in settlement and reasonably incurred in connection with civil, criminal, administrative or investigativeproceedings to which they are party or are threatened to be made a party by reason of their acting as our director, officer or liquidator. To be entitled toindemnification, these persons must have acted honestly and in good faith with a view to the best interest of the company and, in the case of criminal proceedings,they must have had no reasonable cause to believe their conduct was unlawful.Compensation Committee Interlocks and Insider ParticipationNone of the members of our compensation committee is an officer or employee of our company. None of our executive officers currently serves, or in thepast year has served, as a member of the board of directors or compensation committee of any entity that has one or more executive officers serving on our board ofdirectors or compensation committee.Employment AgreementsOn August 19, 2018, the Company entered into an Employment Agreement (the “Song Agreement”) with Mr. Xuesong Song, to serve as the ChiefExecutive Officer of the Company for a fouryear term, subject to renewal. Under the terms of the Song Agreement, Mr. Song will receive no salary for his servicesbut will be eligible for an annual cash bonus in the Board’s sole discretion.On August 19, 2018, the Company entered into an Employment Agreement (the “Yu Agreement”) with Mr. Jie Yu, to serve as the Chief Financial Officer ofthe Company for a fouryear term, subject to renewal. Under the terms of the Yu Agreement, Mr. Yu will receive an annual salary of RMB700,000, and will be eligiblefor an annual cash bonus in the Board’s sole discretion.D. EMPLOYEES.As of September 30, 2018 and December 31, 2017, we had a total of 107 and 37 fulltime employees, including 48 and 13 in research and development, 9 and 2in sales and marketing and the rest in a variety of other divisions, respectively. All of our employees are fulltime employees. None of our employees is currentlyrepresented by a union and/or collective bargaining agreements. We believe that we have good relations with our employees and since our inception we have hadno history of work stoppages or union organizing campaigns.E. SHARE OWNERSHIP.The following table provides information as to the beneficial ownership of our ordinary shares as of October 10, 2018, by the persons listed. Beneficialownership of shares is determined under the rules of the SEC and generally includes any shares over which a person exercises sole or shared voting or investmentpower. For purposes of the following table, a person is deemed to have beneficial ownership of any ordinary shares if such person has the right to acquire suchshares within 60 days of October 10, 2018. For purposes of computing the percentage of outstanding shares held by each person, any shares that such person hasthe right to acquire within 60 days after of October 10, 2018 are deemed to be outstanding, but are not deemed to be outstanding for the purpose of computing thepercentage ownership of any other person. Except as otherwise noted, the persons named in the table have sole voting and investment power with respect to all ofthe ordinary shares beneficially owned by them. Unless otherwise indicated, the address of each person listed is c/o Luokung Technologies, LAB 32, SOHO 3Q, No9, Guanghua Road, Chaoyang District, Beijing, People’s Republic of China.43Percentage ownership in the following table is based on 199,317,558 ordinary shares outstanding on October 10, 2018.Number ofsharesPercent ofclassDirectors and named executive officersCharm Dragon International Limited (1)4,030,8822.03%Xuesong Song, Chairman, Chief Executive Officer and Director(2)38,156,43019.30%Kegang Peng, Vice President and Director (3)17,231,9558.71%Dennis Galgano, Director75,796*%Jin Shi, DirectorJiming Ha, DirectorZhihao Xu, Director (4)7,579,1843.83%Dongpu Zhang, President (5)2,321,7921.17%Chuang Tao, Director (6)1,221,996*%Directors and executive officers as a group (10 persons)66,587,15233.69%(1)Charm Dragon International Limited is a British Virgin Islands company controlled by Mr. Xuesong Song.(2)Consists of (i) 4,030,882 shares owned directly by Charm Dragon International Limited, a British Virgin Islands company and (ii) 22,624,793 shares owneddirectly by Bravo First Development Limited, a British Virgin Islands company. Mr. Xuesong Song is the controlling shareholder of Bravo First DevelopmentLimited. Mr. Xuesong Song is the sole director of Charm Dragon International Limited.(3)Consists of 17,231,955 shares owned directly by Plenty Prestige Enterprises Limited, a British Virgin Islands company. Mr. Kegang Peng is the sole director ofPlenty Prestige Enterprises Limited.(4)Consists of 7,579,184 shares directly owned by Geely Group Limited., a Chinese company. Mr. Zhihao Xu is the Chief Executive Officer of Geely GroupLimited.(5)Consists of 2,321,792 shares owned directly by Genoa Peak Limited, a British Virgin Islands company. Mr. Dongpu Zhang controls Genoa Peak Limited.(6)Consists of 1,221,996 shares owned directly by Globalearth Holdings Limited, a British Virgin Islands company. Mr. Chuang Tao controls Globalearth HoldingsLimited.*Represents less than 1% of shares outstandingITEM 7. MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS.A. MAJOR SHAREHOLDERSPlease refer to Item 6.E “Directors, Senior Management and Employees — Share Ownership.”To our knowledge, (A) we are not directly or indirectly owned or controlled by (i) another corporation or (ii) any foreign government and (B) there are noarrangements (including any announced or expected takeover bid), the operation of which may at a subsequent date result in a change in our control.The voting rights of our major shareholders do not differ from the voting rights of other holders of the same class of shares.44B. RELATED PARTY TRANSACTIONS. BUSINESS RELATIONSHIPS.Our subsidiaries, consolidated affiliated entities, and the subsidiaries of the consolidated affiliated entities have engaged, during the ordinary course ofbusiness, in a number of customary transactions with each other. All of these intercompany balances have been eliminated in consolidation.As of December 31, 2017, we had amounts due from related parties, C Media Limited and Ya Tuo Ji International Consultancy (Beijing) Limited, in theamounts of $11.8 million and $0.2 million, respectively. These amounts due from related parties are short term in nature, noninterest bearing, unsecured andrepayable on demand.As of December 31, 2017, we had amounts due to related parties, Mr. Xuesong Song, our chairman and chief executive officer, Thumb Beijing Branch andThumb Shenzhen Branch, in the amounts of $2.9 million, $0.6 million and $0.03 million, respectively. These amounts due to related parties are short term in nature,noninterest bearing, unsecured and payable on demand.We are party to a series of control agreements with Beijing Zhong Chuan Shi Xun. In addition, our chief executive officer, Mr. Xuesong Song, serves as andofficer of Beijing Zhong Chuan Shi Xun and is a shareholder of Beijing Zhong Chuan Shi Xun. The following table sets forth the relationship of Mr. Song withBeijing Zhong Chuan Shi Xun:NameRelationship withLuokung TechnologyRelationship withBeijing Zhong Chuan Shi XunPercentageOwnership Interest inBeijing Zhong Chuan Shi XunXuesong SongChief Executive OfficerChief Executive Officer61.83%C. INTERESTS OF EXPERTS AND COUNSEL.None.ITEM 8. FINANCIAL INFORMATION.A. CONSOLIDATED STATEMENTS AND OTHER FINANCIAL INFORMATION.See “Item 18. Financial Statements.”Legal ProceedingsTo our knowledge, other than as described below there are no material legal proceedings threatened against us. From time to time, we may be subject tovarious claims and legal actions arising in the ordinary course of business. Following the consummation of the AEA, we became successor in interest to the legalproceedings described below.Litigation with Shanghai Fusheng Weier Intelligent Control Technology Co., Ltd.On January 22, 2016, Zhong Chuan Rui You and Shanghai Fusheng Weier Intelligent Control Technology Co., Ltd. (“Fusheng Weier”) signed a contract forequipment of $1,652,842 (RMB10,800,000). Since Zhong Chuan Rui You did not make the payments of $1,126,381 (RMB7,360,000) on the due dates, Fusheng Weierfiled a lawsuit against Zhong Chuan Rui You in Shanghai Xuhui District People's Court on October 8, 2016. On March 9, 2017, Xuhui District People's Court issuedthe verdict requiring Zhong Chuan Rui You to pay the overdue debts. In August 2017, C Media Limited made the payment of $512,075 (RMB3,346,000). Theremaining balance has been accrued in accounts payable. The payment schedule for the remaining balance is being negotiated by the two parties. On February 5,2018, a hearing was held adding Zhong Chuan Shi Xun as a defendant. The Group plans to settle the remaining balance within one year.45Lawsuit with Gansu Jinlun Culture Media Co., Ltd.On August 22, 2014, Zhong Chuan Rui You and Gansu Jinlun Culture Media Co., Ltd. (“Gansu Jinlun”) signed a “Lanzhou Railway Bureau AirconditionedTrain WiFi Network System Advertising Operation Rights Agreement” for advertising on 72 trains of $1,467,880 (RMB9,604,633). Due to the dispute on theproject implementation, Zhong Chuan Rui You did not pay the advertising fee. On August 23, 2017, Gansu Jinlun filed a lawsuit with Gansu Intermediate People'sCourt. On December 19, 2017, Gansu Intermediate People's Court issued a verdict, ruling that Zhong Chuan Rui You settle the overdue advertising fee. Since only 18out of 72 trains have been installed with Wifi network system, Zhong Chuan Rui You disputed and appealed to the verdict. The next court trial date has not yet beendetermined. C Media and Gansu Jinlun are negotiating a potential settlement to resume the contract. According to the legal counsel, it is probable that the settlementwill amount to approximately $459,000 (RMB3,000,000); therefore, this amount has been accrued in accounts payable as at December 31, 2017.Litigation with Shenzhen Hua Xun Fang Zhou Technology Co., Ltd.On June 16, 2015, Zhong Chuan Rui You signed a cooperation agreement with Shenzhen Hua Xun Fang Zhou Technology Co., Ltd. (“Shenzhen Hua Xun”)and Xuesong Song, a major shareholder of C Media Limited. Pursuant to this agreement, Zhong Chuan Rui You procures equipment from Shenzhen Hua Xun.Xuesong Song acts as a joint liability guarantor for the entire debts of Zhong Chuan Rui You under this agreement. As Zhong Chuan Rui You did not make thepayments on the due dates, Shenzhen Hua Xun filed a lawsuit with Shenzhen Baoan District People's Court on May 31, 2016. On November 1, 2016, Zhong ChuanRui You, Xuesong Song and Shenzhen Hua Xun reached a settlement in Shenzhen Baoan District People's Court to settle $1,735,389 (RMB11,355,000) in fourinstalments. On December 30, 2017, the debt was assigned to C Media Limited.Dividend PolicyWe currently intend to retain all of our available funds and future earnings for use in the operation and expansion of our business and do not anticipatepaying cash dividends in the foreseeable future. Under the terms of our Amended and Restated Memorandum and Articles of Association the declaration andpayment of any dividends in the future will be determined by our board of directors, in its discretion, and will depend on a number of factors, including our earnings,capital requirements and overall financial condition and our ability to receive dividends from our subsidiaries. If we pay any dividends, we will pay our ADS holders’dividends with respect to their underlying shares to the same extent as holders of our ordinary shares, subject to the terms of the deposit agreement, including thefees and expenses payable thereunder. Cash dividends on our ordinary shares, if any, will be paid in U.S. dollars.Our ability to receive dividends from our subsidiaries may limit our ability to pay dividends on our ordinary shares. See Risk Factors – Risks Related toDoing Business in China – Our holding company structure may limit the payment of dividends” and “Item 10. Additional Information – D. Exchange Controls –Dividend Distribution”.B. SIGNIFICANT CHANGES.N/AITEM 9. THE OFFER AND LISTINGA. OFFER AND LISTING DETAILS.Markets and Share Price HistoryOur ordinary shares are not currently listed on any trading market. Our American Depository Shares (“ADSs”) were voluntarily delisted from the NASDAQCapital Market on September 19, 2018. We have applied to NASDAQ for the listing of our ordinary shares on the NASDAQ Capital Market and received an approvalfor listing of Ordinary Shares on August 6, 2018, and as of the date of this transition report, that application and approval are currently under review.46The table below sets forth the high and low reported sales prices in dollars of our ordinary shares, which are represented by ADSs, as reported byNASDAQ in the periods as indicated:ADSHighLowAnnual Highs and Lows (as of the fiscal year end 09/30 for the five most recent full financial years)*20175.592.67201610.21.62Quarterly Highs and Lows (for the two most recent full financial years and any subsequent period, based on calendarquarter end)*2018Third Quarter8.006.30Second Quarter8.824.25First Quarter6.403.702017Fourth Quarter5.592.91Third Quarter3.992.67Second Quarter4.063.07First Quarter5.152.832016Fourth Quarter6.594.20Third Quarter10.201.62Second Quarter3.101.97First Quarter3.602.12Monthly Highs and Lows (for the most recent six months)September 20188.006.41August 20187.706.63July 20187.506.30June 20188.827.55May 20187.805.92April 20187.454.25*The Company effected a 1for10 reverse stock split of its ordinary shares on November 6, 2012 (the “Reverse Split”). The ratio between each AmericanDepositary Share (“ADS”) and its underlying ordinary share postReverse Split remains the same, namely, one ADR remains to represent one ordinary sharepost the Reverse Split. The price listed here after November 6, 2012 reflected the effect from the Reverse Split.B. PLAN OF DISTRIBUTION.Not Applicable.C. MARKETS.Our ordinary shares are not currently listed on any trading market. Our ADSs were voluntarily delisted from the NASDAQ Capital Market on September 19,2018. We have applied to NASDAQ for the listing of our ordinary shares on the NASDAQ Capital Market and received an approval for listing of Ordinary Shares onAugust 6, 2018, and as of the date of this transition report, that application and approval are currently under review.47D. SELLING SHAREHOLDERS.Not applicable.E. DILUTION.Not applicable.F. EXPENSES OF THE ISSUE.Not applicable.ITEM 10. ADDITIONAL INFORMATION.A. SHARE CAPITALNot applicable.B. MEMORANDUM AND ARTICLES OF ASSOCIATIONWe are a British Virgin Islands company incorporated with limited liability and our affairs are governed by the provisions of our memorandum of associationand articles of association, as amended and restated from time to time, and by the provisions of applicable British Virgin Islands law.Our memorandum of association and articles of association authorize the issuance of up to 251,000,000 shares, which are designated into (i) 250,000,000 ofordinary shares of the Company (“Ordinary Shares”), and (ii) 1,000,000 preferred shares of the Company (“Preferred Shares”), in each case with the rights,preferences and privileges as set out in the memorandum and articles of association of the Company.Please see below for a description of our ADSs under “Item 12. Description of Securities Other Than Equity Securities – D. American Depository Shares.”The following is a summary of the material provisions of our ordinary shares and our memorandum of association and articles of association.Ordinary SharesAll of our issued and outstanding ordinary shares are fully paid and nonassessable. Holders of our ordinary shares who are nonresidents of the BritishVirgin Islands may freely hold and vote their shares.Subject to the memorandum and articles of association (and, for greater clarity, without prejudice to any special rights conferred thereby on the holders ofany other shares), an Ordinary Share of the Company confers on the holder:(a)the right to one vote per Ordinary Share at a meeting of the members or on any resolution of members;(b)the right to an equal share in any distribution paid by the Company; and(c)the right to an equal share in the distribution of the surplus assets of the Company on a winding up;48Subject to the memorandum and articles of association (and, for greater clarity, without prejudice to any special rights conferred thereby on the holders ofany other shares), a Preferred Share of the Company confers on the holder:(a)the right to 399 votes per Preferred Share at a meeting of the members or on any resolution of members;(b)the right to an equal share in any distribution paid by the Company;(c)the right to an equal share in the distribution of the surplus assets of the Company on a winding up;(d)be freely transferable, in whole or in part, by Mr. Xuesong Song to any third party through one or more Private Transactions, subject toApplicable Law; and(e)be freely transferable, in whole or in part, by Mr. Xuesong Song to any third party through one or more Public Transactions, subject to ApplicableLaw and Automatic Conversion of such Preferred Share(s) into Ordinary Share(s).Each Preferred Share shall be automatically converted at any time after issue and without the payment of any additional sum into an equal number of fullypaid Ordinary Shares upon the conclusion of any transfer by Mr. Xuesong Song to any third party through one or more Public Transactions.Limitation on Liability and Indemnification MattersUnder British Virgin Islands law, each of our directors and officers, in performing his or her functions, is required to act honestly and in good faith with aview to our best interests and exercise the care, diligence and skill that a reasonably prudent person would exercise in comparable circumstances. Our memorandumof association and articles of association provide that, to the fullest extent permitted by British Virgin Islands law or any other applicable laws, our directors will notbe personally liable to us or our shareholders for any acts or omissions in the performance of their duties. Such limitation of liability does not affect the availabilityof equitable remedies such as injunctive relief or rescission. These provisions will not limit the liability of directors under United States federal securities laws.We may indemnify any of our directors or anyone serving at our request as a director of another entity against all expenses, including legal fees, andagainst all judgments, fines and amounts paid in settlement and reasonably incurred in connection with legal, administrative or investigative proceedings. We mayonly indemnify a director if he or she acted honestly and in good faith with the view to our best interests and, in the case of criminal proceedings, the director hadno reasonable cause to believe that his or her conduct was unlawful. The decision of our board of directors as to whether the director acted honestly and in goodfaith with a view to our best interests and as to whether the director had no reasonable cause to believe that his or her conduct was unlawful, is in the absence offraud sufficient for the purposes of indemnification, unless a question of law is involved. The termination of any proceedings by any judgment, order, settlement,conviction or the entry of no plea does not, by itself, create a presumption that a director did not act honestly and in good faith and with a view to our best interestsor that the director had reasonable cause to believe that his or her conduct was unlawful. If a director to be indemnified has been successful in defense of anyproceedings referred to above, the director is entitled to be indemnified against all expenses, including legal fees, and against all judgments, fines and amounts paidin settlement and reasonably incurred by the director or officer in connection with the proceedings.We may purchase and maintain insurance in relation to any of our directors or officers against any liability asserted against the directors or officers andincurred by the directors or officers in that capacity, whether or not we have or would have had the power to indemnify the directors or officers against the liabilityas provided in our memorandum of association and articles of association.Insofar as indemnification for liabilities arising under the Securities Act may be permitted for our directors or officers under the foregoing provisions, wehave been informed that in the opinion of the Securities and Exchange Commission, such indemnification is against public policy as expressed in the Securities Actand is therefore unenforceable as a matter of United States law.49Differences in Corporate LawWe were incorporated under, and are governed by, the laws of the British Virgin Islands. The corporate statutes of the State of Delaware and the BritishVirgin Islands are similar, and the flexibility available under British Virgin Islands law has enabled us to adopt memorandum of association and articles of associationthat will provide shareholders with rights that do not vary in any material respect from those they would enjoy if we were incorporated under the Delaware GeneralCorporation Law, or Delaware corporate law. Set forth below is a summary of some of the differences between provisions of the BVI Act applicable to us and thelaws application to companies incorporated in Delaware and their shareholders.Director’s Fiduciary DutiesUnder Delaware corporate law, a director of a Delaware corporation has a fiduciary duty to the corporation and its stockholders. This duty has twocomponents: the duty of care and the duty of loyalty. The duty of care requires that a director act in good faith, with the care that an ordinarily prudent personwould exercise under similar circumstances. Under this duty, a director must inform himself of, and disclose to stockholders, all material information reasonablyavailable regarding a significant transaction. The duty of loyalty requires that a director act in a manner he reasonably believes to be in the best interests of thecorporation. He must not use his corporate position for personal gain or advantage. This duty prohibits selfdealing by a director and mandates that the bestinterest of the corporation and its stockholders take precedence over any interest possessed by a director, officer or controlling stockholder and not shared by thestockholders generally. In general, actions of a director are presumed to have been made on an informed basis, in good faith and in the honest belief that the actiontaken was in the best interests of the corporation. However, this presumption may be rebutted by evidence of a breach of one of the fiduciary duties. Should suchevidence be presented concerning a transaction by a director, a director must prove the procedural fairness of the transaction, and that the transaction was of fairvalue to the corporation.British Virgin Islands law provides that every director of a British Virgin Islands company in exercising his powers or performing his duties shall acthonestly and in good faith and in what the director believes to be in the best interests of the company. Additionally, the director shall exercise the care, diligence andskill that a reasonable director would exercise in the same circumstances taking into account the nature of the company, the nature of the decision and the positionof the director and his responsibilities. In addition, British Virgin Islands law provides that a director shall exercise his powers as a director for a proper purpose andshall not act, or agree to the company acting, in a manner that contravenes British Virgin Islands law or the memorandum association or articles of association of thecompany.Amendment of Governing DocumentsUnder Delaware corporate law, with very limited exceptions, a vote of the stockholders is required to amend the certificate of incorporation. Under BritishVirgin Islands law and our memorandum of association and articles of association, (i) our shareholders may amend our memorandum of association and articles ofassociation by a resolution of shareholders, or (ii) our board of directors may amend our memorandum of association and articles of association by a resolution ofdirectors without a requirement for a resolution of shareholders so long as the amendment does not:●restrict the rights of the shareholders to amend the memorandum of association and articles of association;●change the percentage of shareholders required to pass a resolution of shareholders to amend the memorandum of association and articles ofassociation;●amend the memorandum of association and articles of association in circumstances where the memorandum of association and articles ofassociation cannot be amended by the shareholders; or●amend the provisions of memorandum of association or the articles of association pertaining to “rights attaching to shares,” “rights not varied bythe issue of the shares pari passu,” “variation of rights” and “amendment of memorandum and articles”.50Written Consent of DirectorsUnder Delaware corporate law, directors may act by written consent only on the basis of a unanimous vote. Under British Virgin Islands law, directors’consents need only a majority of directors signing to take effect.Written Consent of ShareholdersUnder Delaware corporate law, unless otherwise provided in the certificate of incorporation, any action to be taken at any annual or special meeting ofstockholders of a corporation, may be taken by written consent of the holders of outstanding stock having not less than the minimum number of votes that wouldbe necessary to take such action at a meeting. As permitted by British Virgin Islands law, shareholders’ consents need only a majority of shareholders signing totake effect. Our memorandum of association and articles of association provide that shareholders may approve corporate matters by way of a resolution consentedto at a meeting of shareholders or in writing by a majority of shareholders entitled to vote thereon.Shareholder ProposalsUnder Delaware corporate law, a shareholder has the right to put any proposal before the annual meeting of shareholders, provided it complies with thenotice provisions in the governing documents. A special meeting may be called by the board of directors or any other person authorized to do so in the governingdocuments, but shareholders may be precluded from calling special meetings. British Virgin Islands law and our memorandum of association and articles ofassociation provide that our directors shall call a meeting of the shareholders if requested in writing to do so by shareholders entitled to exercise at least 30% of thevoting rights in respect of the matter for which the meeting is requested.Sale of AssetsUnder Delaware corporate law, a vote of the stockholders is required to approve the sale of assets only when all or substantially all assets are being sold. Inthe British Virgin Islands, shareholder approval is required when more than 50% of the company’s total assets by value are being disposed of or sold.Dissolution; Winding UpUnder Delaware corporate law, unless the board of directors approves the proposal to dissolve, dissolution must be approved by shareholders holding100% of the total voting power of the corporation. Only if the dissolution is initiated by the board of directors may it be approved by a simple majority of thecorporation’s outstanding shares. Delaware corporate law allows a Delaware corporation to include in its certificate of incorporation a supermajority votingrequirement in connection with dissolutions initiated by the board. As permitted by British Virgin Islands law and our memorandum of association and articles ofassociation, we may be voluntarily liquidated under Part XII of the BVI Act by resolution of directors and resolution of shareholders if we have no liabilities and weare able to pay our debts as they fall due.Redemption of SharesUnder Delaware corporate law, any stock may be made subject to redemption by the corporation at its option or at the option of the holders of such stockprovided there remains outstanding shares with full voting power. Such stock may be made redeemable for cash, property or rights, as specified in the certificate ofincorporation or in the resolution of the board of directors providing for the issue of such stock. As permitted by British Virgin Islands law, and our memorandum ofassociation and articles of association, shares may be repurchased, redeemed or otherwise acquired by us. Our directors must determine that immediately followingthe redemption or repurchase we will be able to satisfy our debts as they fall due and the value of our assets exceeds our liabilities.51Variation of Rights of SharesUnder Delaware corporate law, a corporation may vary the rights of a class of shares with the approval of a majority of the outstanding shares of suchclass, unless the certificate of incorporation provides otherwise. As permitted by British Virgin Islands law, and our memorandum of association and articles ofassociation, if our share capital is divided into more than one class of shares, we may vary the rights attached to any class only with the consent in writing ofholders of not less than threefourths of the issued shares of that class and holders of not less than threefourths of the issued shares of any other class of shareswhich may be affected by the variation.Removal of DirectorsUnder Delaware corporate law, a director of a corporation with a classified board may be removed only for cause with the approval of a majority of theoutstanding shares entitled to vote, unless the certificate provides otherwise. As permitted by British Virgin Islands law and our memorandum of association andarticles of association, directors may be removed by resolution of directors or resolution of shareholders.MergersUnder the BVI Act, two or more companies may merge or consolidate in accordance with the statutory provisions. A merger means the merging of two ormore constituent companies into one of the constituent companies, and a consolidation means the uniting of two or more constituent companies into a newcompany. In order to merger or consolidate, the directors of each constituent company must approve a written plan of merger or consolidation which must beauthorized by a resolution of shareholders.Shareholders not otherwise entitled to vote on the merger or consolidation may still acquire the right to vote if the plan of merger or consolidation containsany provision which, if proposed as an amendment to the memorandum association or articles of association, would entitle them to vote as a class or series on theproposed amendment. In any event, all shareholders must be given a copy of the plan of merger or consolidation irrespective of whether they are entitled to vote atthe meeting or consent to the written resolution to approve the plan of merger or consolidation.Inspection of Books and RecordsUnder Delaware corporate law, any shareholder of a corporation may for any proper purpose inspect or make copies of the corporation’s stock ledger, list ofshareholders and other books and records. Holders of our shares have no general right under British Virgin Islands law to inspect or obtain copies of our list ofshareholders or our corporate records. However, we will provide holders of our shares with annual audited financial statements. See “Where You Can FindAdditional Information.”Conflict of InterestThe BVI Act provides that a director shall, after becoming aware that he is interested in a transaction entered into or to be entered into by the company,disclose that interest to the board of directors of the company. The failure of a director to disclose that interest does not affect the validity of a transaction enteredinto by the director or the company, so long as the director’s interest was disclosed to the board prior to the company’s entry into the transaction or was notrequired to be disclosed (for example where the transaction is between the company and the director himself or is otherwise in the ordinary course of business andon usual terms and conditions). As permitted by British Virgin Islands law and our memorandum of association and articles of association, a director interested in aparticular transaction may vote on it, attend meetings at which it is considered, and sign documents on our behalf which relate to the transaction.52Transactions with Interested ShareholdersDelaware corporate law contains a business combination statute applicable to Delaware public corporations whereby, unless the corporation hasspecifically elected not to be governed by such statute by amendment to its certificate of incorporation, it is prohibited from engaging in certain businesscombinations with an “interested shareholder” for three years following the date that such person becomes an interested shareholder. An interested shareholdergenerally is a person or group who or that owns or owned 15% or more of the target’s outstanding voting stock within the past three years. This has the effect oflimiting the ability of a potential acquirer to make a twotiered bid for the target in which all shareholders would not be treated equally. The statute does not apply if,among other things, prior to the date on which such shareholder becomes an interested shareholder, the board of directors approves either the businesscombination or the transaction that resulted in the person becoming an interested shareholder. This encourages any potential acquirer of a Delaware publiccorporation to negotiate the terms of any acquisition transaction with the target’s board of directors.British Virgin Islands law has no comparable provision. As a result, we cannot avail ourselves of the types of protections afforded by the Delawarebusiness combination statute. However, although British Virgin Islands law does not regulate transactions between a company and its significant shareholders, itdoes provide that such transactions must be entered into bona fide in the best interests of the company and not with the effect of constituting a fraud on theminority shareholders.Independent DirectorsThere are no provisions under Delaware corporate law or under the BVI Act that require a majority of our directors to be independent.Cumulative VotingUnder Delaware corporate law, cumulative voting for elections of directors is not permitted unless the company’s certificate of incorporation specificallyprovides for it. Cumulative voting potentially facilitates the representation of minority shareholders on a board of directors since it permits the minority shareholderto cast all the votes to which the shareholder is entitled on a single director, which increases the shareholder’s voting power with respect to electing such director.There are no prohibitions to cumulative voting under the laws of the British Virgin Islands, but our memorandum of association and articles of association do notprovide for cumulative votingAntitakeover Provisions in Our Memorandum of association and articles of associationSome provisions of our memorandum of association and articles of association may discourage, delay or prevent a change in control of our company ormanagement that shareholders may consider favorable, including provisions that authorize our board of directors to issue preference shares in one or more seriesand to designate the price, rights, preferences, privileges and restrictions of such preference shares.C. MATERIAL CONTRACTS.On January 25, 2018, the Company executed an Asset Exchange Agreement (“AEA”) with C Media Limited, a corporation organized under the laws of theCayman Islands (“C Media”), whereby the Company agreed to purchase all the capital stock and equity interests of LK Technology Ltd, together with its whollyowned subsidiaries MMB Limited and Mobile Media (China) Limited and all respective subsidiaries from C Media in exchange for (i) 185,412,599 ordinary shares ofthe Company, par value $0.01 per share (“Ordinary Shares”), (ii) 1,000,000 preferred shares of Kingtone (“Preferred Shares”) and (iii) all issued and outstandingcapital stock or equity interests of the Company’s subsidiary, Topsky InfoTech Holdings Pte Ltd., and its whollyowned subsidiary Xi’an Softech Co., Ltd.,including all entities effectively controlled by Xi’an Softech Co., Ltd. through contractual arrangements and variable business entities.To consummate the contemplated transactions described above, the Company obtained shareholder consent at a special meeting held on May 20, 2018, (i)to authorize 1,000,000 Preferred Shares, (ii) to authorize additional Ordinary Shares so that total authorized Ordinary Shares is equal to 250,000,000 shares, (iii) to listsuch Ordinary Shares on NASDAQ, and (iv) to approve the transactions contemplated in the Asset Exchange Agreement. Additionally, NASDAQ needed toapprove the contemplated transactions prior to consummation thereof. C Media had the right to terminate the AEA if the closing had not occurred (other thanthrough the failure of C Media to comply fully with its obligations under the AEA) on or before July 31, 2018. The transactions contemplated by the AEA wereconsummated on August 17, 2018.53On January 25, 2018, five shareholders of the Company including its largest shareholder and its Chief Executive Officer executed a Securities PurchaseAgreement, whereby such shareholders agreed to sell a total of 617,988 Ordinary Shares and 282,694 American Depository Shares of the Company to Redstone YYLManagement Limited, a company incorporated in the British Virgin Islands, in exchange for an aggregate purchase price of $1,897,860.09.On August 25, 2018, LK Technology entered into a Stock Purchase Agreement (the “Agreement”) with the shareholders (“Shareholders”) of SuperengineHoldings Limited, a limited liability company organized under the laws of the British Virgin Islands (the “Superengine”), pursuant to which LK Technology acquiredall of the issued and outstanding capital stock of Superengine for an aggregate purchase price of US$60 million (the “Purchase Price”), which are paid by theissuance of our Ordinary Shares in an amount equal to the quotient of (x) the Purchase Price divided by (y) the average of the closing prices of the Ordinary Shareson the NASDAQ Capital Market over the 12 months period preceding July 31, 2018. We are a party to the Agreement in connection with the issuance of theOrdinary Shares and certain other limited purposes.D. EXCHANGE CONTROLS.This section sets forth a summary of the most significant regulations or requirements that affect our business activities in China or our shareholders’ rightto receive dividends and other distributions from us.Regulations on Internet Content ProvidersThe Administrative Measures on Internet Information Services, or the Internet Content Measures, which was promulgated by the State Council onSeptember 25, 2000 and amended on January 8, 2011, set out guidelines on the provision of internet information services. The Internet Content Measures specifiesthat internet information services regarding news, publications, education, medical and health care, pharmacy and medical appliances, among other things, arerequired to be examined, approved and regulated by the relevant authorities. Internet information providers are prohibited from providing services beyond thoseincluded in the scope of their licenses or filings. Furthermore, the Internet Content Measures specifies a list of prohibited content. Internet information providers areprohibited from producing, copying, publishing or distributing information that is humiliating or defamatory to others or that infringes the legal rights of others.Internet information providers that violate such prohibition may face criminal charges or administrative sanctions. Internet information providers must monitor andcontrol the information posted on their websites. If any prohibited content is found, they must remove the content immediately, keep a record of such content andreport to the relevant authorities.The Internet Content Measures classifies internet information services into commercial internet information services and noncommercial internetinformation services. Commercial internet information services refer to services that provide information or services to internet users with charge. A provider ofcommercial internet information services must obtain an ICP License.Regulations on Internet Audiovideo Program ServicesOn December 20, 2007, the MII and the State Administration of Press, Publication, Radio, Film and Television, or the SAPPRFT, jointly issued theAdministrative Provisions for the Internet AudioVideo Program Service, or the Audiovideo Program Provisions, which came into effect on January 31, 2008 andwas amended on August 28, 2015. The Audiovideo Program Provisions defines “internet audiovideo program services” as producing, editing and integrating ofaudiovideo programs, supplying audiovideo programs to the public via the internet, and providing audiovideo programs uploading and transmission services to athird party. Entities providing internet audiovideo programs services must obtain an internet audiovideo program transmission license. Applicants for such licensesshall be stateowned or statecontrolled entities unless an internet audiovideo program transmission license has been obtained prior to the effectiveness of theAudiovideo Program Provisions in accordance with the thenineffect laws and regulations. In addition, foreigninvested enterprises are not allowed to engage inthe abovementioned services. According to the Audiovideo Program Provisions and other relevant laws and regulations, audiovideo programs provided by theentities supplying Internet audiovideo program services shall not contain any illegal content or other content prohibited by the laws and regulations, such as anycontent against the basic principles in the PRC Constitution, any content that damages the sovereignty of the country or national security, and any content thatdisturbs social order or undermine social stability. An audiovideo program that has already been broadcast shall be retained in full for at least 60 days. Movies,television programs and other media content used as Internet audiovideo programs shall comply with relevant administrative regulations on programs broadcaststhrough radio, movie and television channels. Entities providing services related to Internet audiovideo programs shall immediately delete the audiovideoprograms violating laws and regulations, keep relevant records, report relevant authorities and implement other regulatory requirements.54The Categories of the Internet AudioVideo Program Services, or the Audiovideo Program Categories, promulgated by SAPPRFT on March 10, 2017,classifies internet audio/video programs into four categories: (I) Category I internet audio/video program service, which is carried out with a form of radio station ortelevision station; (II) Category II internet audio/video program service, including (a) rebroadcasting service of current political news audio/video programs; (b)hosting, interviewing, reporting and commenting service of arts, entertainment, technology, finance and economics, sports, education and other specializedaudio/video programs; (c) producing (interviewing not included) and broadcasting service of arts, entertainment, technology, finance and economics, sports,education and other specialized audio/video programs; (d) producing and broadcasting service of internet films/dramas; (e) aggregating and broadcasting service offilms, television dramas and cartoons; (f) aggregating and broadcasting service of arts, entertainment, technology, finance and economics, sports, education andother specialized audio/video programs; and (g) live audio/video broadcasting service of cultural activities of common social organizations, sport events or otherorganization activities; and (III) Category III internet audio/video program service, including (a) aggregating service of online audio/video contents, and (b) rebroadcasting service of the audio/video programs uploaded by internet users; and (IV) Category III internet audio/video program service, including (a) rebroadcasting of the radio/television program channels; and (b) rebroadcasting of internet audio/video program channels.On May 27, 2016, the SAPPRFT issued the Notice on Relevant Issues concerning Implementing the Approval Works of Upgrading Mobile Internet AudioVideo Program Service, or the Mobile AudioVideo Program Notice. The Mobile AudioVideo Program Notice provides that the mobile Internet audiovideo programservices shall be deemed Internet audiovideo program service. Entities which have obtained the approvals to provide the Internet audiovideo program servicesmay use mobile WAP websites or mobile applications to provide audiovideo program services. Entities with regulatory approvals may operate mobile applicationsto provide the audiovideo program services The types of the programs shall be within the permitted scope as provided in the licenses and such mobile applicationsshall be filed with the SAPPRFT.Regulations on Production and Operation of Radio/Television ProgramsOn July 19, 2004, the SAPPRFT promulgated the Administrative Measures on the Production and Operation of Radio and Television Programs, or the Radioand Television Program Production Measures, which came into effect on August 20, 2004 and was amended on August 28, 2015. The Radio and Television ProgramProduction Measures provides that any business that produces or operates radio or television programs must first obtain a Radio and Television ProgramProduction and Operation Permit. Entities holding such permits shall conduct their business within the permitted scope as provided in their permits. In addition,foreigninvested enterprises are not allowed to engage in the abovementioned services.Regulations on Online Advertising ServicesOn April 24, 2015, the Standing Committee of the National People’s Congress enacted the Advertising Law of the People’s Republic of China, or the NewAdvertising Law, effective on September 1, 2015. The New Advertising Law increases the potential legal liability of advertising services providers and strengthensregulations of false advertising. On July 4, 2016, the State Administration for Industry and Commerce, or the SAIC, issued the Interim Measures of theAdministration of Online Advertising, or the SAIC Interim Measures, effective on September 1, 2016. The New Advertising Law and the SAIC Interim Measuresrequire that online advertisements may not affect users’ normal internet use and internet popup ads must display a “close” sign prominently and ensure onekeyclosing of the popup windows. The SAIC Interim Measures provides that all online advertisements must be marked “Advertisement” so that viewers can easilyidentify them as such. Moreover, the SAIC Interim Measures treats paid search results as advertisements that are subject to PRC advertisement laws, and requiresthat paid search results be conspicuously identified on search result pages as advertisements. The New Advertising Law and SAIC Interim Measures require us toconduct more stringent examination and monitoring of our advertisers and the content of their advertisements.55Regulations on Online GamesIn September 2009, the GAPP (currently known as the SAPPRFT), together with the National Copyright Administration, and the National Office ofCombating Pornography and Illegal Publications jointly issued the Notice on Further Strengthening on the Administration of Preexamination and Approval ofOnline Game and the Examination and Approval of Imported Online Game, or the Circular 13. The Circular 13 states that foreign investors are not permitted to investin online game operating businesses in the PRC via wholly foreignowned entities, Sinoforeign equity joint ventures or cooperative joint ventures or to exercisecontrol over or participate in the operation of domestic online game businesses through indirect means, such as other joint venture companies or contractual ortechnical arrangements. If the our contractual arrangements were deemed under the Circular 13 to be an “indirect means” for foreign investors to exercise controlover or participate in the operation of a domestic online game business, our contractual arrangements might be challenged by the SAPPRFT. We are not aware ofany online game companies which use the same or similar contractual arrangements having been challenged by the SAPPRFT as using those contractualarrangements as an “indirect means” for foreign investors to exercise control over or participate in the operation of a domestic online game business or having beenpenalized or ordered to terminate operations since the Circular 13 became effective. However it is unclear whether and how the Circular 13 might be interpreted orimplemented in the future. See “Risk Factors—If the PRC government finds that the agreements that establish the structure for operating certain of our operations inChina do not comply with PRC regulations relating to the relevant industries, or if these regulations or the interpretation of existing regulations change in the future,we could be subject to severe penalties or be forced to relinquish our interests in those operations.”The Interim Measures for the Administration of Online Games, or the Online Game Measures, issued by the MOC, which took effect on August 1, 2010 andamended on December 15, 2017, regulates a broad range of activities related to the online games business, including the development, production and operation ofonline games, the issuance of virtual currencies used for online games, and the provision of virtual currency trading services. The Online Game Measures providesthat any entity that is engaged in online game operations must obtain an Network Cultural Business Permit, and require the content of an imported online game to beexamined and approved by the MOC prior to the game’s launch and require a domestic online game to be filed with the MOC within 30 days after its launch. TheNotice of the Ministry of Culture on the Implementation of the Interim Measures for the Administration of Online Games, which was issued by the MOC on July 29,2010 to implement the Online Game Measures, (i) requires online game operators to protect the interests of online game users and specifies that certain terms thatmust be included in service agreements between online game operators and the users of their online games, (ii) requires content review of imported online gamesand filing procedures for domestic online games, (iii) emphasizes the protection of minors playing online games, and (iv) requests online game operators to promoterealname registration by their game users.Regulations on Information Security, Censorship and PrivacyThe Standing Committee of the National People’s Congress, China’s national legislative body, enacted the Decisions on the Maintenance of InternetSecurity on December 28, 2000 that may subject persons to criminal liabilities in China for any attempt to use the internet to: (i) gain improper entry to a computer orsystem of strategic importance; (ii) disseminate politically disruptive information; (iii) leak state secrets; (iv) spread false commercial information or (v) infringe uponintellectual property rights. In 1997, the Ministry of Public Security issued the Administration Measures on the Security Protection of Computer InformationNetwork with International Connections which prohibits using the internet to leak state secrets or to spread socially destabilizing materials. If an ICP license holderviolates these measures, the PRC government may revoke its ICP license and shut down its websites. Pursuant to the Ninth Amendment to the Criminal Law issuedby the Standing Committee of the National People’s Congress on August 29, 2015, effective on November 1, 2015, any ICP provider that fails to fulfill the obligationsrelated to internet information security as required by applicable laws and refuses to take corrective measures, will be subject to criminal liability for (i) any largescale dissemination of illegal information; (ii) any severe effect due to the leakage of users’ personal information; (iii) any serious loss of evidence of criminalactivities; or (iv) other severe situations, and any individual or entity that (i) sells or provides personal information to others unlawfully or (ii) steals or illegallyobtains any personal information will be subject to criminal liability in severe situations.56The Cybersecurity Law of the PRC, or the Cybersecurity Law, which was promulgated on November 7, 2016 by the Standing Committee of the NationalPeople’s Congress and came into effect on June 1, 2017, provides that network operators shall meet their cyber security obligations and shall take technicalmeasures and other necessary measures to protect the safety and stability of their networks. Under the Cybersecurity Law, network operators are subject to varioussecurity protectionrelated obligations, including: (i) network operators shall comply with certain obligations regarding maintenance of the security of internetsystems; (ii) network operators shall verify users’ identities before signing agreements or providing certain services such as information publishing or realtimecommunication services; (iii) when collecting or using personal information, network operators shall clearly indicate the purposes, methods and scope of theinformation collection, the use of information collection, and obtain the consent of those from whom the information is collected; (iv) network operators shall strictlypreserve the privacy of user information they collect, and establish and maintain systems to protect user privacy; (v) network operators shall strengthenmanagement of information published by users, and when they discover information prohibited by laws and regulations from publication or dissemination, theyshall immediately stop dissemination of that information, including taking measures such as deleting the information, preventing the information from spreading,saving relevant records, and reporting to the relevant governmental agencies.Regulations on Intellectual Property RightsRegulations on CopyrightThe Copyright Law of the PRC, or the Copyright Law, which took effect on June 1, 1991 and was amended in 2001 and in 2010, provides that Chinesecitizens, legal persons, or other organizations shall, whether published or not, own copyright in their copyrightable works, which include, among others, works ofliterature, art, natural science, social science, engineering technology and computer software. Copyright owners enjoy certain legal rights, including right ofpublication, right of authorship and right of reproduction. The Copyright Law as revised in 2010 extends copyright protection to Internet activities, productsdisseminated over the Internet and software products. In addition, Copyright Law provides for a voluntary registration system administered by the China CopyrightProtection Center, or the CPCC. According to the Copyright Law, an infringer of the copyrights shall be subject to various civil liabilities, which include ceasinginfringement activities, apologizing to the copyright owners and compensating the loss of copyright owner. Infringers of copyright may also subject to fines and/oradministrative or criminal liabilities in severe situations.The Computer Software Copyright Registration Measures, or the Software Copyright Measures, promulgated by the State Council on December 20, 2001and amended on January 30, 2013, regulates registrations of software copyright, exclusive licensing contracts for software copyright and assignment agreements.The National Copyright Administration, or the NCA administers software copyright registration and the CPCC, is designated as the software registration authority.The CPCC shall grant registration certificates to the Computer Software Copyrights applicants which meet the requirements of both the Software CopyrightMeasures and the Computer Software Protection Regulations (Revised in 2013).The Provisions of the Supreme People’s Court on Certain Issues Related to the Application of Law in the Trial of Civil Cases Involving Disputes onInfringement of the Information Network Dissemination Rights specifies that disseminating works, performances or audiovideo products by the internet users orthe internet service providers via the internet without the permission of the copyright owners shall be deemed to have infringed the right of dissemination of thecopyright owner.57The Measures for Administrative Protection of Copyright Related to Internet, which was jointly promulgated by the NCA and the MIIT on April 29, 2005and became effective on May 30, 2005, provides that upon receipt of an infringement notice from a legitimate copyright holder, an ICP operator must take remedialactions immediately by removing or disabling access to the infringing content. If an ICP operator knowingly transmits infringing content or fails to take remedialactions after receipt of a notice of infringement that harms public interest, the ICP operator could be subject to administrative penalties, including an order to ceaseinfringing activities, confiscation by the authorities of all income derived from the infringement activities, or payment of fines.On May 18, 2006, the State Council promulgated the Regulations on the Protection of the Right to Network Dissemination of Information (as amended in2013). Under these regulations, an owner of the network dissemination rights with respect to written works or audio or video recordings who believes thatinformation storage, search or link services provided by an Internet service provider infringe his or her rights may require that the Internet service provider delete, ordisconnect the links to, such works or recordings.Patent LawsAccording to the Patent Law of the PRC (Revised in 2008), the State Intellectual Property Office is responsible for administering patent law in the PRC. Thepatent administration departments of provincial, autonomous region or municipal governments are responsible for administering patent law within their respectivejurisdictions. The Chinese patent system adopts a firsttofile principle, which means that when more than one person file different patent applications for the sameinvention, only the person who files the application first is entitled to obtain a patent of the invention. To be patentable, an invention or a utility model must meetthree criteria: novelty, inventiveness and practicability. A patent is valid for twenty years in the case of an invention and ten years in the case of utility models anddesigns.Trademark LawsTrademarks are protected by the Trademark Law of the PRC (Revised in 2013) which was adopted in 1982 and subsequently amended in 1993, 2001 and 2013respectively as well as by the Implementation Regulations of the PRC Trademark Law adopted by the State Council in 2002 and as most recently amended on April29, 2014. The Trademark Office under the SAIC handles trademark registrations. The Trademark Office grants a tenyear term to registered trademarks and the termmay be renewed for another tenyear period upon request by the trademark owner. A trademark registrant may license its registered trademarks to another party byentering into trademark license agreements, which must be filed with the Trademark Office for its record. As with patents, the Trademark Law has adopted a firsttofile principle with respect to trademark registration. If a trademark applied for is identical or similar to another trademark which has already been registered or subjectto a preliminary examination and approval for use on the same or similar kinds of products or services, such trademark application may be rejected. Any personapplying for the registration of a trademark may not injure existing trademark rights first obtained by others, nor may any person register in advance a trademark thathas already been used by another party and has already gained a “sufficient degree of reputation” through such party’s use.Regulations on Domain NamesThe MIIT promulgated the Measures on Administration of Internet Domain Names, or the Domain Name Measures, on August 24, 2017, which took effecton November 1, 2017 and replaced the Administrative Measures on China Internet Domain Name promulgated by MII on November 5, 2004. According to theDomain Name Measures, the MIIT is in charge of the administration of PRC internet domain names. The domain name registration follows a firsttofile principle.Applicants for registration of domain names shall provide the true, accurate and complete information of their identities to domain name registration serviceinstitutions. The applicants will become the holder of such domain names upon the completion of the registration procedure.Relevant Regulations of the Hightech EnterpriseThe Ministry of Information Industry, the Ministry of Science and Technology and the State Tax Bureau collectively promulgated and issued the“Certifying Standard and Managing Measures for Hightech Enterprises” and “the Hightech Areas of Main National Support” on April 14, 2008 to certify the Hightech enterprise and encourage and support the development of the Chinese Hightech enterprises. Under the Hightech Enterprises Measures, the enterprise canenjoy the favorable tax policy when it is certified as a Hightech enterprise by the Ministry of Information Industry, the Ministry of Science and Technology and theState Tax Bureau or with its provincial branch according to the stipulated standard. The software and computer and network technology are recognized as the mainnational supported Hightech field. Kingtone Information is a Hightech enterprise and enjoys a favorable income tax rate of 15%.58Laws and Regulations of Intellectual Property RightsChina has adopted legislation governing intellectual property rights, including patents, copyrights and trademarks. China is a signatory to the maininternational conventions on intellectual property rights and became a member of the Agreement on Trade Related Aspects of Intellectual Property Rights upon itsaccession to the WTO in December 2001.PatentsThe “Patent Law of the People’s Republic of China” promulgated by the Standing Committee of the National People's Congress, adopted in 1985 andrevised in 1992, 2001 and 2008, protects registered patents. The State Intellectual Property Office of PRC handles granting patent rights, providing for a twentyyearpatent term for inventions and a tenyear patent term for utility models and designs. As we disclosed in Item 4, of this transition report on Form 20F, throughKingtone Information, we have been granted one invention patent “wireless video transmission system based on BREW platform” by the State Intellectual PropertyOffice (“SIPO”) of PRC on September 23, 2009 and therefore such invention is entitled to all the protections provided under the Patent Law for twenty years.Computer Software Copyright and AdministrationOn December 20, 2001, the State Council of PRC issued the “Regulation for Computer Software Protection of the People’s Republic of China” (the“Regulation for Computer Software Protection”) which became effective on January 1, 2002 to protect the interests of copyright owners, to promote the research andapplication and to encourage the development of the Chinese software industry. Under the Regulation for Computer Software Protection, natural persons, legalpersons or any other organizations shall have a copyright on the software developed by such persons no matter whether such software has been published. Theprotection period of software copyrights owned by the legal person or other organization is fifty years and expires on December 31 of the fiftieth year from the initialpublication date of such computer software. Currently, Kingtone Information has twelve registration certificates for software copyrights.TrademarksThe “Trademark Law of the People’s Republic of China” promulgated by the State Council of PRC, adopted in 1982 and revised in 1993 and 2001, protectsregistered trademarks. The Trademark Office under the Chinese State Administration for Industry and Commerce handles trademark registrations and grants a termof ten years to registered trademarks which are renewable for another ten years after the application to the Trademark Office by the owners of the trademarks.Trademark license agreements must be filed with the Trademark Office for record. China has a “firsttoregister” system that requires no evidence of prior use orownership. Kingtone Information has its registered trademarks as described in Item 4 of this transition report on Form 20F. Accordingly, such trademarks areentitled to the protection under the Trademark Law.Foreign Currency ExchangeOn August 29, 2008, the SAFE issued the Notice of the General Affairs Department of the State Administration of Foreign Exchange on the RelevantOperating Issues concerning the Improvement of the Administration of Payment and Settlement of Foreign Currency Capital of Foreignfunded Enterprises, orCircular 142. Pursuant to Circular 142, RMB converted from the foreign currencydenominated capital of a foreigninvested company may only be used for purposeswithin the business scope approved by the applicable governmental authority and may not be used for equity investments within the PRC unless specificallyprovided for otherwise. The use of such Renminbi capital may not be changed without SAFE’s approval and may not in any case be used to repay Renminbi loans ifthe proceeds of such loans have not been used.59See “Risk Factors — Risks Related to Doing Business in China — PRC regulation of loans and direct investment by offshore holding companies to PRCentities may delay or prevent us from using the proceeds of our initial public offering to make loans or additional capital contributions to our PRC operatingsubsidiaries, which could materially and adversely affect our liquidity and our ability to fund and expand our business”.Dividend DistributionWe are a British Virgin Islands holding company and substantially all of our operations are conducted through LK Technology. We rely on dividends andother distributions from our LK Technology and its subsidiaries to provide us with our cash flow and allow us to pay dividends on the shares underlying our ADSsand meet our other obligations. The principal regulations governing distribution of dividends paid by wholly foreignowned enterprises include:1.Wholly ForeignOwned Enterprise Law (1986), as amended; and2.Implementation Rules on Wholly ForeignOwned Enterprise Law (1990), as amended.Under these regulations, wholly foreignowned enterprises in China may pay dividends only out of their accumulated profits, if any, determined inaccordance with PRC accounting standards and regulations. In addition, wholly foreignowned enterprises in China are required to set aside at least 10% of theiraftertax profit based on PRC accounting standards each year to its general reserves until the accumulative amount of such reserves reach 50% of its registeredcapital. These reserves are not distributable as cash dividends. The board of directors of a FIE has the discretion to allocate a portion of its aftertax profits to staffwelfare and bonus funds, which may not be distributed to equity owners except in the event of liquidation.Regulation of Foreign Exchange in Certain Onshore and Offshore TransactionsIn October 2005, the SAFE issued the Notice on Issues Relating to the Administration of Foreign Exchange in Fundraising and Return InvestmentActivities of Domestic Residents Conducted via Offshore Special Purpose Companies, or SAFE Notice 75, which became effective as of November 1, 2005, and wasfurther supplemented by two implementation notices issued by the SAFE on November 24, 2005 and May 29, 2007, respectively. Under Circular 75, prior registrationwith the local SAFE branch is required for PRC residents to establish or to control an offshore company for the purposes of financing that offshore company withassets or equity interests in an onshore enterprise located in the PRC. An amendment to the registration or filing with the local SAFE branch by such PRC resident isalso required for the injection of equity interests or assets of an onshore enterprise in the offshore company or overseas funds raised by such offshore company, orany other material change with respect to the offshore company in connection with any increase or decrease of capital, transfer of shares, merger, division, equityinvestment, debt investment, or creation of any security interest over any assets located in the PRC.Under SAFE Notice 75, PRC residents are further required to repatriate into the PRC all of their dividends, profits or capital gains obtained from theirshareholdings in the offshore entity within 180 days of their receipt of such dividends, profits or capital gains. The registration and filing procedures under SAFENotice 75 are prerequisites for other approval and registration procedures necessary for capital inflow from the offshore entity, such as inbound investments orshareholders loans, or capital outflow to the offshore entity, such as the payment of profits or dividends, liquidating distributions, equity sale proceeds, or thereturn of funds upon a capital reduction. Therefore, failure to comply with such registration may subject us to certain restrictions on, including but not limited to, theincrease of the registered capital of our PRC subsidiary, making loans to our PRC subsidiary, and making distributions to us from our onshore companies.Regulations of Overseas Investments and ListingsOn August 8, 2006, six PRC regulatory agencies, including the MOFCOM, the State Assets Supervision and Administration Commission, the StateAdministration for Taxation, the State Administration for Industry and Commerce, the CSRC and the SAFE, jointly adopted the New M&A Rule, which becameeffective on September 8, 2006. This regulation, among other things, includes provisions that purport to require that an offshore SPV formed for purposes ofoverseas listing of equity interests in PRC companies and controlled directly or indirectly by PRC companies or individuals obtain the approval of the CSRC prior tothe listing and trading of such SPV’s securities on an overseas stock exchange.60On September 21, 2006, the CSRC published on its official website procedures regarding its approval of overseas listings by SPVs. The CSRC approvalprocedures require the filing of a number of documents with the CSRC and it would take several months to complete the approval process.The application of the New M&A Rule with respect to overseas listings of SPVs remains unclear with no consensus currently existing among the leadingPRC law firms regarding the scope of the applicability of the CSRC approval requirement.We believe that, based on our understanding of the current PRC laws, regulations and rules and the procedures announced on September 21, 2006, there isno requirement in this regulation that would require an application to be submitted to the MOFCOM or the CSRC for the approval of the listing and trading of ourADSs on the NASDAQ Capital Market.See “Risk Factors — Risks Related to Doing Business in China — If we were required to obtain the prior approval of the China Securities RegulatoryCommission, or CSRC, of the listing and trading of our ADSs on the NASDAQ Capital Market, we may face regulatory actions or other sanctions from the CSRC orother PRC regulatory agencies.”E. TAXATIONThe following discussion sets forth the material British Virgin Islands, PRC and U.S. federal income tax consequences of an investment in our ADSs andthe ordinary shares represented by our ADSs, sometimes referred to collectively as the “securities”. It is based upon laws and relevant interpretations thereof ineffect as of the date of this report, all of which are subject to change. This discussion does not deal with all possible tax consequences relating to an investment inthe securities, such as the tax consequences under state, local and other tax laws. As used in this discussion, “we,” “our” and “us” refers only to LuokungTechnology Ltd.British Virgin Islands TaxationUnder the law of the British Virgin Islands as currently in effect, a holder of the securities who is not a resident of the British Virgin Islands is not liable forBritish Virgin Islands tax on dividends paid with respect to the securities and all holders of the securities are not liable to the British Virgin Islands for tax on gainsrealized during that year on the sale or disposal of such ordinary shares. The British Virgin Islands does not impose a withholding tax on dividends paid by acompany incorporated or reregistered under the BVI Act.There are no capital gains, gift or inheritance taxes levied by the British Virgin Islands on companies incorporated under the BVI Act. In addition, shares ofcompanies incorporated under the BVI Act are not subject to transfer taxes, stamp duties or similar charges.There is no income tax treaty or convention currently in effect between the United States and the British Virgin Islands or between China and the BritishVirgin Islands.61People’s Republic of China TaxationIn 2007, the PRC National People’s Congress enacted the new Enterprise Income Tax Law (the “EIT Law”), which became effective on January 1, 2008. Thenew EIT Law imposes a single uniform income tax rate of 25% on all Chinese enterprises, including foreigninvested enterprises, and levies a withholding tax rate of10% on dividends payable by Chinese subsidiaries to their foreign shareholders unless any such foreign shareholders’ jurisdiction of incorporation has a tax treatywith China that provides for a different withholding agreement. Under the new EIT Law, enterprises established outside China but deemed to have a “de factomanagement body” within the country may be considered “resident enterprises” for Chinese tax purposes and, therefore, may be subject to an enterprise income taxrate of 25% on their worldwide income. Pursuant to the implementation rules of the new EIT Law, a “de facto management body” is defined as a body that hasmaterial and overall management control over the business, personnel, accounts and properties of the enterprise. Although substantially all members of ourmanagement are located in China, it is unclear whether Chinese tax authorities would require (or permit) us to be treated as PRC resident enterprises. If we aredeemed a Chinese tax resident enterprise, we may be subject to an enterprise income tax rate of 25% on our worldwide income, excluding dividends received directlyfrom another Chinese tax resident enterprise, as well as PRC enterprise income tax reporting obligations. If we are not deemed to be a Chinese tax resident enterprise,we may be subject to certain PRC withholding taxes. See “Risk Factors — Risks Related to Doing Business in China — Our holding company structure may limit thepayment of dividends.” As a result of such changes, our historical tax rates may not be indicative of our tax rates for future periods and the value of our ADSs orordinary shares may be adversely affected. If we are deemed a PRC resident enterprise and investors’ gain from the sales of the securities and dividends payable byus are deemed sourced from China, such gains and dividends payable by us may be subject to PRC tax. See “Risk Factors — Risks Related to Doing Business inChina — If we were deemed a “resident enterprise” by PRC tax authorities, we could be subject to tax on our global income at the rate of 25% under the New EITLaw and our nonPRC shareholders could be subject to certain PRC taxes.United States Federal Income TaxationGeneralThe following is a discussion of the material U.S. federal income tax consequences to an investor of purchasing, owning and disposing of our securities.This discussion does not address any aspects of U.S. federal gift or estate tax or the state, local or nonU.S. tax consequences of an investment in the securities.YOU SHOULD CONSULT YOUR OWN TAX ADVISORS CONCERNING THE U.S. FEDERAL, STATE, LOCAL AND NONU.S. TAX CONSEQUENCES OFPURCHASING, OWNING AND DISPOSING OF THE SECURITIES IN YOUR PARTICULAR SITUATION.This discussion applies only to those investors that purchase the securities in this offering and that hold the securities as capital assets within the meaningof section 1221 of the Internal Revenue Code of 1986, as amended (the “Code”). This section does not apply to holders that may be subject to special tax rules,including but not limited to:1.dealers in securities or currencies;2.traders in securities that elect to use a marktomarket method of accounting;3.banks, insurance companies or certain financial institutions;4.taxexempt organizations;5.governments or agencies or instrumentalities thereof;6.partnerships or other entities treated as partnerships or other passthrough entities for U.S. federal income tax purposes or persons holding thesecurities through such entities;7.regulated investment companies or real estate investment trusts;8.holders subject to the alternative minimum tax;9.holders that actually or constructively own 10% or more of the total combined voting power of all classes of our shares entitled to vote;10.holders that acquired the securities pursuant to the exercise of employee stock options, in connection with employee stock incentive plans orotherwise as compensation;11.holders that hold the securities as part of a straddle, hedging or conversion transaction; or12.holders whose functional currency is not the U.S. dollar.62This section is based on the Code, its legislative history, existing and proposed U.S. Treasury regulations, published rulings and other administrativeguidance of the U.S. Internal Revenue Service (the “IRS”) and court decisions, all as in effect on the date hereof. These laws are subject to change or differentinterpretation by the IRS or a court, possibly on a retroactive basis.We have not sought, and will not seek, a ruling from the IRS as to any U.S. federal income tax consequence described herein. The IRS may disagree withthe discussion herein, and its determination may be upheld by a court. Moreover, there can be no assurance that future legislation, regulation, administrative rulingsor court decisions will not adversely affect the accuracy of the statements in this discussion.The discussion below of the U.S. federal income tax consequences to “U.S. Holders” will apply to a beneficial owner of the securities that is for U.S. federalincome tax purposes:1.a citizen or resident of the United States;2.a corporation (or other entity treated as a corporation) that is created or organized (or treated as created or3.organized) under the laws of the United States, any state thereof or the District of Columbia;4.an estate whose income is subject to U.S. federal income tax regardless of its source; or5.a trust if (a) a U.S. court can exercise primary supervision over the trust’s administration and one or more U.S.6.persons are authorized to control all substantial decisions of the trust, or (b) if the trust has a valid election in effect under applicable U.S.Treasury regulations to be treated as a U.S. person.If a beneficial owner of the securities is not described as a U.S. Holder and is not an entity treated as a partnership or other passthrough entity for U.S.federal income tax purposes, such owner will be considered a “NonU.S. Holder.” The material U.S. federal income tax consequences applicable specifically to NonU.S. Holders are described below under the heading “Tax Consequences to NonU.S. Holders.”If a partnership (including for this purpose any entity treated as a partnership for U.S. tax purposes) is a beneficial owner of the securities, the U.S. taxtreatment of a partner in the partnership generally will depend on the status of the partner and the activities of the partnership. A holder of the securities that is apartnership or partners in such a partnership should consult their own tax advisors about the U.S. federal income tax consequences of holding and disposing of thesecurities.This discussion assumes that any distributions made (or deemed made) on the securities and any consideration received by a holder in consideration forthe sale or other disposition of the securities will be in U.S. dollars. This discussion also assumes that the representations contained in the Deposit Agreement aretrue and that the obligations in the Deposit Agreement and any related agreement will be complied with in accordance with their terms. Finally, this discussionassumes that each ADS will only represent ordinary shares in us, and will not represent any other type of security, such as a bond, cash or other property.63For U.S. federal income tax purposes, a holder of an ADS will be treated as the beneficial owner of the shares represented by such ADS and an exchange ofan ADS for ordinary shares will not be subject to U.S. federal income tax. The U.S. Treasury has expressed concerns that parties to whom ADSs are prereleased, orintermediaries in the chain of ownership between holders of ADSs and the issuer of the securities underlying the ADSs may be taking actions that are inconsistentwith the claiming of foreign tax credits by U.S. Holders of ADSs. Such actions would also be inconsistent with the claiming of the reduced rate of tax applicable todividends received by certain noncorporate U.S. Holders, including individual U.S. Holders, as described below under “Tax Consequences to U.S.Holders — Taxation of Distributions.” Accordingly, the availability of foreign tax credits or the reduced tax rate for dividends received by certain noncorporate U.S.Holders, including individual U.S. Holders, could be affected by actions taken by parties to whom the ADSs are released, or by future actions by the U.S. Treasury.Tax Consequences to U.S. HoldersTaxation of DistributionsSubject to the passive foreign investment company, or PFIC, rules discussed below, the gross amount of any cash distributions we make with respect to aU.S. Holder in respect of such U.S. Holder’s ADSs or shares will generally be treated as dividend income if the distributions are made from our current oraccumulated earnings and profits, calculated according to U.S. federal income tax principles. Cash dividends will generally be subject to U.S. federal income tax asordinary income on the day the U.S. Holder actually or constructively receives such income. With respect to noncorporate U.S. Holders for taxable years beginningbefore January 1, 2011, dividends may be taxed at the lower applicable longterm capital gains rate provided that (a) our ADSs or shares are readily tradable on anestablished securities market in the United States, or, in the event we are deemed to be a Chinese “resident enterprise” under the EIT Law (as described above under“People’s Republic of China Taxation”), we are eligible for the benefits of the income tax treaty between the United States and the PRC (the “U.S.PRC Tax Treaty”),(b) we are not a PFIC, as discussed below, for either the taxable year in which the dividend was paid or the preceding taxable year, and (c) certain holding periodrequirements are met. Under published IRS authority, ADSs are considered for purposes of clause (a) above to be readily tradable on an established securitiesmarket in the United States only if they are listed on certain exchanges, which presently include the NASDAQ Capital Market. U.S. Holders should consult their owntax advisors regarding the availability of the lower rate for any dividends paid with respect to our ADSs or shares.Dividends will not be eligible for the dividendsreceived deduction allowed to U.S. corporations in respect of dividends received from other U.S.corporations. Generally, if we distribute noncash property as a dividend (other than pro rata distributions of our shares) out of our current or accumulated earningsand profits (as determined for U.S. federal income tax purposes), a U.S. Holder generally will include in income an amount equal to the fair market value of theproperty, on the date that it is distributed.Distributions in excess of current and accumulated earnings and profits, as determined for U.S. federal income tax purposes, will be treated as a nontaxablereturn of capital to the extent of the U.S. Holder’s basis in its shares or ADSs and thereafter as capital gain. However, we do not plan on calculating our earnings andprofits in accordance with U.S. federal income tax principles. U.S. holders therefore should generally assume that any distributions paid by us will be treated asdividends for U.S. federal income tax purposes.If PRC taxes apply to dividends paid by us to a U.S. Holder (see “People’s Republic of China Taxation,” above), such taxes may be treated as foreign taxeseligible for credit against such holder’s U.S. federal income tax liability (subject to certain limitations), and a U.S. Holder may be entitled to certain benefits under theU.S.PRC Tax Treaty. The rules relating to the U.S. foreign tax credit are complex. U.S. Holders should consult their own tax advisors regarding the creditability ofany such PRC tax and their eligibility for the benefits of the U.S.PRC Tax Treaty.64Taxation of Dispositions of SharesSubject to the PFIC rules discussed below, a U.S. holder that sells or otherwise disposes of its shares will recognize capital gain or loss for U.S. federalincome tax purposes equal to the difference between the amount realized and such U.S. Holder’s tax basis in its shares. Prior to January 1, 2011, capital gains of anoncorporate U.S. holder are generally taxed at a maximum rate of 15% where the property is held for more than one year (and 20% thereafter). The ability to deductcapital losses is subject to limitations.If PRC taxes apply to any gain from the disposition of our shares by a U.S. Holder, such taxes may be treated as foreign taxes eligible for credit against suchholder’s U.S. federal income tax liability (subject to certain limitations), and a U.S. Holder may be entitled to certain benefits under the U.S.PRC Tax Treaty. U.S.Holders should consult their own tax advisors regarding the creditability of any such PRC tax and their eligibility for the benefits of the U.S.PRC Tax Treaty.Passive Foreign Investment CompanyWe do not expect to be a PFIC for U.S. federal income tax purposes for our current tax year or in the foreseeable future. The determination of whether or notwe are a PFIC in respect of any of our taxable years is a factual determination that cannot be made until the close of the applicable tax year and that is based on thetypes of income we earn and the value and composition of our assets (including goodwill), all of which are subject to change. Therefore, we can make no assurancesthat we will not be a PFIC in respect of our current taxable year or in the future.In general, we will be a PFIC in any taxable year if either:1.at least 75% of our gross income for the taxable year is passive income; or2.at least 50% of the value, determined on the basis of a quarterly average, of our assets is attributable to assets that produce or are held for theproduction of passive income.Passive income includes dividends, interest, royalties, rents (other than certain rents and royalties derived in the active conduct of a trade or business), theexcess of gains over losses from certain types of transactions in commodities, annuities and gains from assets that produce passive income. We will be treated asowning our proportionate share of the assets and earning our proportionate share of the income of any corporation in which we own, directly or indirectly, at least25% (by value) of the stock.If we are treated as a PFIC in any year during which a U.S. Holder owns the securities, and such U.S. Holder did not make a marktomarket election, asdescribed below, the U.S. Holder will be subject to special rules with respect to:1.any gain recognized by the U.S. Holder on the sale or other disposition of its shares; and any excess distribution that we make to the U.S. Holder(generally, the excess of the amount of any distributions to such U.S. Holder during a single taxable year of such U.S. Holder over 125% of theaverage annual distributions received by such U.S. Holder in respect of the shares during the three preceding taxable years of such U.S. Holder or,if shorter, such U.S. Holder holding period for the shares).Under these rules:2.the gain or excess distribution will be allocated ratably over the U.S. Holder’s holding period for the shares;3.the amount allocated to the U.S. Holder’s taxable year in which it realized the gain or excess distribution or to the period in the U.S. Holder’sholding period before the first day of our first taxable year in which we are a PFIC will be taxed as ordinary income;4.the amount allocated to other taxable years (or portions thereof) of the U.S. Holder and included in its holding period will be taxed at the highesttax rate in effect for that year; and5.the interest charge generally applicable to underpayments of tax will be imposed in respect of the tax attributable to each such other taxable yearof the U.S. Holder. 6.Special rules apply for calculating the amount of the foreign tax credit with respect to excess distributions by a PFIC.65Alternatively, if a U.S. Holder, at the close of its taxable year, owns ordinary shares in a PFIC that are treated as marketable stock, the U.S. Holder may makea marktomarket election with respect to such shares for such taxable year. Our shares will be “marketable” to the extent that they remain regularly traded on anational securities exchange, such as the NASDAQ Capital Market. If a U.S. Holder makes this election in a timely fashion, it will not be subject to the PFIC rulesdescribed above. Instead, in general, the U.S. Holder will include as ordinary income each year the excess, if any, of the fair market value of its shares at the end ofthe taxable year over its adjusted basis in its shares. Any ordinary income resulting from this election would generally be taxed at ordinary income tax rates andwould not be eligible for the reduced rate of tax applicable to qualified dividend income. The U.S. Holder will also be allowed to take an ordinary loss in respect ofthe excess, if any, of the adjusted basis of its shares over the fair market value at the end of the taxable year (but only to the extent of the net amount of previouslyincluded income as a result of the marktomarket election). The U.S. Holder’s basis in the shares will be adjusted to reflect any such income or loss amounts. U.S.Holders should consult their own tax advisor regarding potential advantages and disadvantages of making a marktomarket election with respect to their shares.Alternatively, a U.S. Holder of stock in a PFIC may avoid the PFIC tax consequences described above in respect to our or shares by making a timely“qualified electing fund” election to include in income its pro rata share of our net capital gains (as longterm capital gain) and other earnings and profits (asordinary income), on a current basis, in each case whether or not distributed, in the taxable year of the U.S. Holder in which or with which our taxable year ends.However, the qualified electing fund election is available only if the PFIC provides such U.S. Holder with certain information regarding its earnings and profits asrequired under applicable U.S. Treasury regulations. We do not intend to furnish the information that a U.S. Holder would need in order to make a qualified electingfund election. Therefore, U.S. Holders will not be able to make or maintain such election with respect to their or shares.If a U.S. Holder owns our shares or during any year that we are a PFIC, such holder must file U.S. Internal Revenue Service Form 8621 regarding suchholder’s shares or and the gain realized on the disposition of the shares. The reduced tax rate for dividend income, discussed in “Taxation of Distributions,” is notapplicable to dividends paid by a PFIC. U.S. Holders should consult with their own tax advisors regarding reporting requirements with respect to their shares.Tax Consequences to NonU.S. HoldersDividends paid to a NonU.S. Holder in respect of our or shares generally will not be subject to U.S. federal income tax, unless the dividends are effectivelyconnected with the NonU.S. Holder’s conduct of a trade or business within the United States (and, if required by an applicable income tax treaty, are attributable toa permanent establishment or fixed base that such holder maintains in the United States).In addition, a NonU.S. Holder generally will not be subject to U.S. federal income tax on any gain attributable to a sale or other disposition of our or sharesunless such gain is effectively connected with its conduct of a trade or business in the United States (and, if required by an applicable income tax treaty, isattributable to a permanent establishment or fixed base that such holder maintains in the United States) or the NonU.S. Holder is an individual who is present in theUnited States for 183 days or more in the taxable year of sale or other disposition and certain other conditions are met (in which case, such gain from United Statessources generally is subject to tax at a 30% rate or a lower applicable tax treaty rate).Dividends and gains that are effectively connected with the NonU.S. Holder’s conduct of a trade or business in the United States (and, if required by anapplicable income tax treaty, are attributable to a permanent establishment or fixed base in the United States) generally will be subject to tax in the same manner as fora U.S. Holder and, in the case of a NonU.S. Holder that is a corporation for U.S. federal income tax purposes, may also be subject to an additional branch profits taxat a 30% rate or a lower applicable tax treaty rate.66Information Reporting and Backup Withholding In general, information reporting for U.S. federal income tax purposes generally should apply to distributions made on the securities within the UnitedStates to a noncorporate U.S. Holder and to the proceeds from sales and other dispositions of the securities by a noncorporate U.S. Holder to or through a U.S.office of a broker. Payments made (and sales and other dispositions effected at an office) outside the United States generally should be subject to informationreporting in limited circumstances.Dividend payments made to U.S. Holders and proceeds paid from the sale or other disposition the securities may be subject to information reporting to theIRS and possible U.S. federal backup withholding at a current rate of 28%. Certain exempt recipients, such as corporations, are not subject to these informationreporting requirements. Backup withholding will not apply to a U.S. Holder who furnishes a correct taxpayer identification number and makes any other requiredcertification, or who is otherwise exempt from backup withholding. U.S. Holders who are required to establish their exempt status must provide a duly executed IRSForm W9.A NonU.S. Holder generally may eliminate the requirement for information reporting and backup withholding by providing certification of its foreignstatus, under penalties of perjury, on a duly executed applicable IRS Form W8 or by otherwise establishing an exemption.Backup withholding is not an additional tax. Rather, the amount of any backup withholding will be allowed as a credit against a U.S. Holder’s or a nonU.S.Holder’s U.S. federal income tax liability and may entitle such holder to a refund, provided that certain required information is timely furnished to the IRS.PROSPECTIVE PURCHASERS OF OUR SECURITIES SHOULD CONSULT WITH THEIR OWN TAX ADVISORS REGARDING THE APPLICATION OFTHE U.S. FEDERAL INCOME TAX LAWS TO THEIR PARTICULAR SITUATIONS AS WELL AS ANY ADDITIONAL TAX CONSEQUENCES RESULTING FROMPURCHASING, HOLDING OR DISPOSING OF OUR SECURITIES, INCLUDING THE APPLICABILITY AND EFFECT OF THE TAX LAWS OF ANY STATE, LOCALOR NONU.S. JURISDICTION, INCLUDING ESTATE, GIFT, AND INHERITANCE LAWS AND APPLICABLE TAX TREATIES.F. DIVIDENDS AND PAYING AGENTS.Not applicable.G. STATEMENT BY EXPERTS.None.H. DOCUMENTS ON DISPLAY.We previously filed a registration statement on Form F1 (File No. 333166056) with the SEC relating to our initial public offering in May 2010. This transition reportdoes not contain all of the information in the registration statement and the exhibits and financial statements included with the registration statement. References inthis transition report to any of our contracts, agreements or other documents are not necessarily complete, and you should refer to the exhibits attached to theregistration statement for copies of the actual contracts, agreements or documents. In addition, we will file transition reports on Form 20F and submit otherinformation under cover of Form 6K. As a foreign private issuer, we are exempt from the proxy requirements of Section 14 of the Exchange Act and our officers,directors and principal shareholders will be exempt from the insider shortswing disclosure and profit recovery rules of Section 16 of the Exchange Act. You may readand copy the registration statement, the related exhibits and other materials we file with the SEC at the SEC's public reference room in Washington, D.C. at 100 FStreet, Room 1580, N.E., Washington, D.C.20549. You can also request copies of those documents, upon payment of a duplicating fee, by writing to the SEC. Pleasecall the SEC at 1800SEC0330 for further information on the operation of the public reference rooms. The SEC also maintains an Internet site that contains reports,proxy and information statements and other information regarding issuers that file with the SEC. The website address is http://www.sec.gov. You may also request acopy of these filings, at no cost, by writing us at LAB 32, SOHO 3Q, No 9, Guanghua Road, Chaoyang District, Beijing, People’s Republic of China, 100020 ortelephoning us at (86) 1085866721.67I. SUBSIDIARY INFORMATIONFor a listing of our subsidiaries, see “Item 4. Information on the Company – C. Organizational Structure.”ITEM 11. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.Interest Rate RiskAs of December 31, 2017, we had no shortterm or longterm borrowings. If we borrow money in future periods, we may be exposed to interest rate risk. Ourexposure to market risk for changes in interest rates relates primarily to the interest income generated by our cash deposits with our banks and heldtomaturityinvestments. We have not used any derivative financial instruments in our investment portfolio. Interest earnings instruments carry a degree of interest rate risk. Wehave not been exposed, nor do we anticipate being exposed to material risks due to changes in interest rates. However, our future interest income may fall short ofexpectations due to changes in interest rates. Foreign Exchange RiskTranslation adjustments amounted to $90,671 and $387,375 gain as of the fiscal year ended December 31, 2017 and 2016, respectively. The Companytranslated balance sheet amounts with the exception of equity at December 31, 2017 at RMB 6.5342 to $1.00 as compared to RMB 6.9370 to $1.00 at December 31,2016. The Company stated equity accounts at their historical rate. The average translation rates applied to income statement accounts for the fiscal year endedDecember 31, 2017 and 2016 were RMB6.7356 and RMB 6.7153 to US$1.00, respectively. So far, the PRC government has been able to manage a stable exchange ratebetween RMB and the U.S. Dollar. Our future downward translation adjustments may occur and can be significant due to changes in such exchange rate.If we decide to convert our RMB into U.S. dollars for the purpose of making payments for dividends on our ordinary shares or for other business purposes,appreciation of the U.S. dollar against the RMB would have a negative effect on the U.S. dollar amount available to us.The PRC government imposes strict restrictions on PRC resident companies regarding converting RMB into foreign currencies and vice versa under capitalaccount transactions, such as receiving equity investments from outside of the PRC, making equity investments outside of the PRC, borrowing money from orlending money outside of the PRC, and repaying debt or remitting liquidated assets and/or accumulated profits outside of the PRC. These transactions have to beapproved by the relevant PRC government authorities, including but not limited to the commerce bureau, the tax bureau and the State Administration of ForeignExchange, or SAFE, and have to be conducted at banks entrusted by the local SAFE branch. As our business continues to grow, we may need to continuouslyfinance our PRC subsidiaries by raising capital from outside of the PRC. The restriction on converting RMB into foreign currencies, and vice versa, may limit ourability to use capital resources from outside of the PRC. Such restrictions may also limit our ability to remit profits from our PRC subsidiaries outside of the PRC,therefore potentially limiting our ability to pay dividends to our shareholders. In addition, such restrictions will limit our ability to freely transfer temporary excesscash in our or our subsidiaries’ bank accounts in and out of the PRC, therefore limiting our ability to conduct crossborder cash management activities to optimizethe utilization of our cash.InflationAlthough China has experienced an increasing inflation rate, inflation has not had a material impact on our results of operations in recent years. Accordingto the National Bureau of Statistics of China, the change in the consumer price index in China was 0.46%, (0.77%), and 1.16% in 2001, 2002 and 2003, respectively.However, in connection with a 3.9% increase in 2004, the PRC government announced measures to restrict lending and investment in China in order to reduceinflationary pressures in China’s economy. Following the government’s actions, the consumer price index decreased to 1.8% in 2005 and to 1.5% in 2006. In 2007, theconsumer price index increased to 4.8%. In response, China’s central bank, the People’s Bank of China, announced that the bank reserve ratio would rise half apercentage point to 15.5% in an effort to reduce inflation pressures. China’s consumer price index growth rate reached 8.7% year over year in 2008. In 2009 and 2010,the change in the consumer price index in China was minus 0.7% and 3.3%.China consumer price index in November 2017 was 3.8% higher than that of the same period in 2016. China consumer price index in December 2016 was2.4% higher than that of the same period in 2015. China consumer price index in December 2015 was 4.8% higher than that of the same period in 2014. Chinaconsumer price index in December 2014 was 3.3% higher than that of the same period in 2013. The results of the PRC government’s actions to combat inflation aredifficult to predict. Adverse changes in the Chinese economy, if any, will likely impact the financial performance of a variety of industries in China that use, or wouldbe candidates to use, our software products and services.68ITEM 12. DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES.A. DEBT SECURITIES.Not applicable. B. WARRANTS AND RIGHTS.Not applicable.C. OTHER SECURITIES.Not applicable.D. AMERICAN DEPOSITARY SHARES.The Bank of New York Mellon, as depositary (the “Depositary”) for the Company’s ADR facility, notified the owners and holders of the Company’s ADSsthat the ADS facility will terminate effective at 5:00 p.m. (Eastern Time) on September 19, 2018. Under the terms of the Deposit Agreement among the Company, theDepositary and the owners and holders of ADSs of the Company (the “Deposit Agreement”), owners and holders of the Company’s ADSs have until at leastJanuary 21, 2019 to surrender their ADSs to the Depositary for delivery of the underlying ordinary shares of the Company. Subsequent to January 21, 2019, underthe terms of the Deposit Agreement, the Depositary may attempt to sell any ordinary shares remaining on deposit with the Depositary. If the Depositary sells suchunderlying ordinary shares or receives value for such shares, holders must surrender their ADSs to obtain payment of the sale proceeds, net of expenses andapplicable tax and charges. We completed the voluntary delisting of our ADSs from the NASDAQ Capital Market on September 19, 2018.You may hold ADSs either (A) directly (i) by having ADSs registered in your name in the Direct Registration System, or (ii) by having an Americandepositary receipt, also referred to as an ADR, which is a certificate evidencing a specific number of ADSs, registered in your name, or (B) indirectly by holding asecurity entitlement in ADSs through your broker or other financial institution. If you hold ADSs directly, you are a registered ADS holder, also referred to as anADS holder. This description assumes you are an ADS holder. If you hold the ADSs indirectly, you must rely on the procedures of your broker or other financialinstitution to assert the rights of ADS holders described in this section. You should consult with your broker or financial institution to find out what thoseprocedures are.The Direct Registration System, or DRS, is a system administered by The Depository Trust Company, also referred to as DTC, pursuant to which thedepositary may register the ownership of uncertificated ADSs, which ownership will be confirmed by periodic statements sent by the depositary to the registeredholders of uncertificated ADSs.69As an ADS holder, you will not be treated as one of our registered shareholders and you will not have direct shareholder rights. British Virgin Island’s lawgoverns our direct shareholders’ rights. The depositary will be the holder of the shares underlying your ADSs. As a registered holder of ADSs, you will have ADSholder rights. A Deposit Agreement among us, the depositary and you, as an ADS holder, and all other persons indirectly holding ADSs, sets out ADS holder rightsas well as the rights and obligations of the depositary. New York law governs the Deposit Agreement and the ADSs.The following is a summary of the material provisions of the Deposit Agreement. For more complete information, you should read the entire DepositAgreement and the form of ADS, which contains the terms of the ADSs. The Deposit Agreement is filed as an exhibit to our registration statement filed on Form F1.You may obtain the registration statement and the attached Deposit Agreement from the SEC’s website at http://www.sec.gov. You may also obtain a copy of theDeposit Agreement at the SEC’s Public Reference Room, which is located at 100 F Street, NE, Washington, DC 20549. You may obtain information on the operationof the Public Reference Room by calling the SEC at 18007320330. Fees and ExpensesPersons depositing or withdrawing shares or ADS holders must pay:For:$5.00 (or less) per 100 ADSs (or portion of 100 ADSs)Issuance of ADSs, including issuances resulting from a distribution of shares orrights or other propertyCancellation of ADSs for the purpose of withdrawal, including if the DepositAgreement terminates$.05 (or less) per ADSAny cash distribution to ADS holdersA fee equivalent to the fee that would be payable if securities distributed to youhad been shares and the shares had been deposited for issuance of ADSsDistribution of securities distributed to holders of deposited securities whichare distributed by the depositary to ADS holders$.05 (or less) per ADSs per calendar yearDepositary servicesRegistration or transfer feesTransfer and registration of shares on our share register to or from the name ofthe depositary or its agent when you deposit or withdraw sharesExpenses of the depositaryCable, telex and facsimile transmissions (when expressly provided in the DepositAgreement) converting foreign currency to U.S. dollarsTaxes and other governmental charges the depositary or the custodian have topay on any ADS or share underlying an ADS, for example, share transfer taxes,stamp duty or withholding taxesAs necessaryAny charges incurred by the depositary or its agents for servicing the depositedsecuritiesAs necessaryPayment of TaxesHolders of our ADSs are responsible for any taxes or other governmental charges payable on their ADSs or on the deposited securities represented by anyof their ADSs. The depositary may refuse to register any transfer of a holder’s ADSs or allow withdrawal of the deposited securities represented by the ADSs untilsuch taxes or other charges are paid. It may apply payments owed to the holder or sell deposited securities represented by the ADSs to pay any taxes owed and theholder will remain liable for any deficiency. If the depositary sells deposited securities, it will, if appropriate, reduce the number of ADSs to reflect the sale and pay toADS holders any proceeds, or send to ADS holders any property, remaining after it has paid the taxes.70PART IIITEM 13. DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES.None.ITEM 14. MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS.Use of Proceeds.We completed our initial public offering on May 14, 2010 (the “IPO”), which generated net proceeds of approximately $14.6 million. All remaining cash onhand from the proceeds of our IPO was transferred to C Media Limited and its subsidiaries following the completion of the asset exchange transactions on August17, 2018.ITEM 15. CONTROLS AND PROCEDURES.Disclosure Controls and ProceduresOur Chief Executive Officer and Chief Financial Officer have reviewed and evaluated the effectiveness of our disclosure controls and procedures, whichincluded inquiries made to certain other of our employees. The term “disclosure controls and procedures,” as defined in Rules 13a15(e) and 15d15(e) under theExchange Act, means controls and other procedures of a company that are designed to ensure that information required to be disclosed by a company in thereports, such as this report, that it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in theSEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to bedisclosed by a company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the company’s management, including itsprincipal executive and principal financial officers, as appropriate to allow timely decisions regarding required disclosure. Management recognizes that any controlsand procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives and management necessarilyapplies its judgment in evaluating the costbenefit relationship of possible controls and procedures. Based on that evaluation, our Chief Executive Officer and ChiefFinancial Officer have each concluded that, as of December 31, 2017, the Company’s disclosure controls and procedures were not effective due to the materialweakness described in the “Management’s Report on Internal Control over Financial Reporting” section below.Management’s Report on Internal Control Over Financial ReportingOur management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Exchange ActRules 13a15(f) and 15d15(f). Internal control over financial reporting refers to the process designed by, or under the supervision of, our principal executive officerand principal financial officer, and effected by our Board of Directors, management and other personnel, to provide reasonable assurance regarding the reliability offinancial reporting and the preparation of financial statements for external purposes in accordance with U.S. GAAP and includes those policies and procedures that(i) pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of the assets of the Company; (ii)provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with U.S. GAAP, and thatreceipts and expenditures of the Company are being made only in accordance with authorizations of management and directors of the Company; and (iii) providereasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the Company’s assets that could have a materialeffect on the financial statements.71Any system of internal control, no matter how well designed, has inherent limitations. Therefore, even those systems determined to be effective canprovide only reasonable assurance with respect to financial statement preparation and presentation. Because of the inherent limitations of internal control, there is arisk that material misstatements may not be prevented or detected on a timely basis by internal control over financial reporting. However, these inherent limitationsare known features of the financial reporting process. Therefore, it is possible to design into the process safeguards to reduce, though not eliminate, this risk.Management assessed our internal control over financial reporting as of the year ended December 31, 2017. In making this assessment, management usedthe criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in the 2014 report entitled "Internal ControlIntegratedFramework." The COSO framework summarizes each of the components of a company’s internal control system, including (i) the control environment, (ii) riskassessment, (iii) control activities, (iv) information and communication, and (v) monitoring. Based on such assessment, management concluded that its internalcontrol over financial reporting as of December 31, 2017 was not effective because of the following material weakness:Lack of U.S. GAAP expertise. Although our accounting personnel are professional and experienced in accounting requirements and procedures generallyaccepted in the PRC, they do not have sufficient knowledge, experience and training in maintaining our books and records and preparing financial statements inaccordance with U.S. GAAP standards and SEC rules and regulations. The staff needs additional training to become experienced in U.S. GAAPbased reporting,including the skills of U.S. GAAPbased period end closing, consolidation of financial statements, and U.S. GAAP conversion.In order to address the above material weakness, our management plans to take the following steps:We will employ, as needed, outside professionals to provide key accounting personnel ongoing technical trainings to ensure their proper understanding ofU.S. GAAP and newly announced accounting standards.The Company believes the foregoing measures will remediate the identified material weakness in future periods. The Company is committed to monitoringthe effectiveness of these measures and making any changes that are necessary and appropriate.Notwithstanding the conclusion that its internal control over financial reporting was not effective as of the end of the period covered by this report, ourChief Executive Officer and Chief Financial Officer believe that the financial statements and other information contained in this report present fairly, in all materialrespects, its business, financial condition and results of operations. Nothing has come to the attention of management that causes them to believe that any materialinaccuracies or errors exist in the Company’s financial statements as of December 31, 2017.Attestation report of the registered public accounting firm.This transition report does not include an attestation report of the Company’s registered public accounting firm on internal control over financial reportingbecause the Company is a nonaccelerated filer permanently exempted from section 404(b) of the SarbanesOxley Act.Changes in Internal Control over Financial ReportingThere were no changes in the Company’s internal control over financial reporting that occurred during our fiscal year ended December 31, 2017 that hasmaterially affected or is reasonably likely to materially affect our internal control over financial reporting.ITEM 16. [RESERVED]ITEM 16A. AUDIT COMMITTEE FINANCIAL EXPERT.Our board of directors has determined that Mr. Dennis Galgano qualifies as an audit committee financial expert. Our board of directors has determined thatMessrs. Dennis Galgano, Jin Shi, Jiming Ha and Zhihao Xu meet the definition of an “independent director” under the applicable NASDAQ Rules and under Rule10A3 of the Securities Exchange Act of 1934, as amended.72ITEM 16B. CODE OF ETHICS.Our board of directors has adopted a code of business conduct and ethics applicable to our directors, officers and employees. We have posted the code onour website at http://www.luokung.com.ITEM 16C. PRINCIPAL ACCOUNTANT FEES AND SERVICES.Audit FeesThe aggregate fees billed by Moore Stephens CPA Limited for professional services rendered for the audit of our financial information disclosed in thistransition report on Form 20F was $280,000 for the two years ended December 31, 2017 and 2016.The aggregate fees billed by our previous auditor, BDO China Shu Lun Pan Certified Public Accountants LLP for professional services rendered for theaudit of our annual financial information included in our annual reports on Form 20F was $105,500 for each of the fiscal years ended September 30, 2017, 2016 and2015.Tax FeesWe did not engage our principal accountants to provide tax or related services during the last two fiscal years.All Other FeesWe did not engage our principal accountants to render services to us during the last two fiscal years, other than as reported above.ITEM 16D. EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES.Not applicable.ITEM 16E. PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS.Not applicable.ITEM 16F. CHANGE IN REGISTRANT’S CERTIFYING ACCOUNTANT.Not applicable.ITEM 16G. CORPORATE GOVERNANCE.We are incorporated in the BVI and our corporate governance practices are governed by applicable BVI law as well as our memorandum and articles ofassociation. In addition, because our ADSs are listed on NASDAQ, we are subject to NASDAQ’s corporate governance requirements. NASDAQ Listing Rule5620(a) requires each issuer to hold an annual meeting of shareholders no later than one year after the end of the issuer’s fiscal year end. However, NASDAQ ListingRule 5615(a)(3) permits a foreign private issuer like us to follow home country practices in lieu of certain requirements of Listing Rule 5600, provided that suchforeign private issuer discloses in its transition report filed with the SEC each requirement of Rule 5600 that it does not follow and describes the home countrypractice followed in lieu of such requirement. We follow home country practice with respect to annual meetings and did not hold an annual shareholder meeting inthe year ended December 31, 2017. We may, however, hold annual shareholder meetings in the future if there are significant issues that require shareholders’approvals.ITEM 16H. MINE SAFETY DISCLOSURE.Not applicable.73PART IIIITEM 17. FINANCIAL STATEMENTS.We have elected to provide financial statements and related information specified in Item 18.ITEM 18. FINANCIAL STATEMENTS.See “Index to Consolidated Financial Statements” for a list of all financial statements filed as part of this transition report. The Financial Statements arebeginning on page F1.ITEM 19. EXHIBITS.See the Exhibit Index following the signature page of this report, which is incorporated herein by reference.74SIGNATURESThe registrant hereby certifies that it meets all of the requirements for filing on Form 20F and that it has duly caused and authorized the undersigned tosign this transition report on its behalf.LUOKUNG TECHNOLOGY CORP.By:/s/ Xuesong Song Xuesong SongChief Executive Officer(principal executive officer)October 12, 201875EXHIBIT INDEXThe following documents are filed as part of this transition report on Form 20F.ExhibitNumberDescription1.1Amended and Restated Memorandum of Association and Articles of Association of Luokung Technology Corp., dated August 20, 2018, and ascurrently in effect.2.1*Deposit Agreement among the Company, depositary and holders of the American Depositary Receipts.2.2*Form of American Depositary Receipt.2.3*English translation of Entrusted Management Agreement dated December 15, 2009 between Xi’an Softech Co., Ltd., Xi’an Kingtone InformationTechnology Co., Ltd. and the shareholders of Xi’an Kingtone Information Technology Co., Ltd.3.1*English translation of Shareholder’s Voting Proxy Agreement dated December 15, 2009 between Xi’an Softech Co., Ltd., Xi’an Kingtone InformationTechnology Co., Ltd. and the shareholders of Xi’an Kingtone Information Technology Co., Ltd.4.1*English translation of Exclusive Technology Service Agreement dated December 15, 2009 between Xi’an Softech Co., Ltd. and Xi’an KingtoneInformation Technology Co., Ltd.4.2*English translation of Exclusive Option Agreement dated December 15, 2009 between Xi’an Softech Co., Ltd., Xi’an Kingtone InformationTechnology Co., Ltd. and the shareholders of Xi’an Kingtone Information Technology Co., Ltd.4.3*English translation of Equity Pledge Agreement dated December 15, 2009 between Xi’an Softech Co., Ltd., Xi’an Kingtone Information TechnologyCo., Ltd. and the shareholders of Xi’an Kingtone Information Technology Co., Ltd.4.4*English translation of Loan Agreement dated September 14, 2009 between Xi’an Kingtone Information Technology Co., Ltd. and Xian CityCommercial Bank.4.5*English translation of Mortgage Agreement dated September 14, 2009 between Xi’an Kingtone Information Technology Co., Ltd. and Xian CityCommercial Bank.4.6*English translation of Form of Employment Agreement entered into between the Company and the Company’s executive officers.4.7*2010 Omnibus Incentive Plan of the Company.4.8**English translation of Project Construction Contract dated August 10, 2010 between Xi’an Hu County Yuxing Agriculture Science & TechnologyCo., Ltd. and Xi’an Kingtone Information Technology Co., Ltd.4.9***Asset Exchange Agreement by and between C Media Limited and the Company dated as of January 25, 2018.4.10***Securities Purchase Agreement by and among Redstone YYL Management Limited and five shareholders holding majority of the shares of theCompany dated as of January 25, 2018.4.15Exclusive Business Cooperation Agreement by and between Zhongchuan Tianxia Information Technology (Shenzhen) Co., Ltd., and Beijing MobileVision Technology Co., Ltd., dated August 31, 2015.764.16Exclusive Option Agreement by and among Zhongchuan Tianxia Information Technology (Shenzhen) Co., Ltd., Xuesong Song, Weili Chen, PingWang, Donglai Liu, and Beijing Mobile Vision Technology Co., Ltd., dated August 31, 2015.4.17Equity Interest Pledge Agreement by and among Zhongchuan Tianxia Information Technology (Shenzhen) Co., Ltd., Xuesong Song, Weili Chen, PingWang, Donglai Liu, and Beijing Mobile Vision Technology Co., Ltd., dated August 31, 2015.4.18Addendum to Asset Exchange Agreement by and among the Company, Topsky Infotech Holdings Pte Ltd. and C Media Limited, dated October 3,2018. Incorporated by reference to the Company’s Current Report on Form 6K filed on October 4, 2018.4.19Stock Purchase Agreement, dated August 25, 2018, by and among the Company, LK Technology Ltd., and the shareholders listedtherein. Incorporated by reference to the Company’s Current Report on Form 6K filed on August 27, 2018.4.20Power of Attorney by Weili Chen, dated August 31, 2015.4.21Power of Attorney by Ping Wang, dated August 31, 2015.4.22Power of Attorney by Donglai Liu, dated August 31, 2015.4.23Power of Attorney by Xuesong Song, dated August 31, 2015.8.1List of Subsidiaries and Consolidated Variable Interest Entities10.1Employment Agreement, dated August 19, 2018, between Luokung Technology Corp. and Xuesong Song.†10.2Employment Agreement, dated August 19, 2018, by and between Luokung Technology Corp. and Jie Yu.†12.1Certification of Chief Executive Officer required by Rule 13a14(a).12.2Certification of Chief Financial Officer required by Rule 13a14(a).13.1Certification of Chief Executive Officer required by Rule 13a14(a).13.2Certification of Chief Financial Officer required by Rule 13a14(a).101.INSXBRL Instance Document.101.SCHXBRL Taxonomy Extension Schema Document.101.CALXBRL Taxonomy Extension Calculation Linkbase Document.101.DEFXBRL Taxonomy Extension Definition Linkbase Document.101.LABXBRL Taxonomy Extension Label Linkbase Document.101.PREXBRL Taxonomy Extension Presentation Linkbase Document.*Previously filed as an exhibit to the Company’s Registration Statement on Form F1 (Reg. No. 333166056) filed with the Commission and incorporated hereinby reference.**Previously filed as exhibits to the Company’s Transition Report on Form 20F filed with the Commission on January 20, 2011 and incorporated herein byreference.***Previously filed as exhibits to the Company’s Annual Report on Form 20F filed with the Commission on February 9, 2018 and incorporated herein byreference.†Indicates management contract or compensatory plan, contract or arrangement.77LK Technology Ltd. and SubsidiariesCONSOLIDATED FINANCIAL STATEMENTSTABLE OF CONTENTSPage(s)Report of Independent Registered Public Accounting FirmF2Consolidated Financial StatementsConsolidated Balance SheetsF3Consolidated Statements of Operations and Comprehensive LossF4application.Chuang (Vincent) Tao was appointed as a member of the Board effective on August 25, 2018. Dr. Tao was the Chairman of SuperEngine Suzhou from 2014to 2017. Dr. Tao has been the president of the Seasky Angel Investment Alliance of Shanghai since 2015. Dr. Tao received his Bachelor Degree of geographicinformation and telemetry from Wuhan University in China in 1990 and received his Ph.D. from University of Calgary, Canada in 1997.Dennis Galgano was appointed as a director of the Company following the consummation of the asset exchange agreement. He was a registered consultantwith Morgan Joseph Triartisan LLC from November 2016 until October 2017, and previously served as vice chairman and head of international investment bankingfor Morgan Joseph Triartisan LLC, which is a registered broker dealer engaged in the investment banking and financial advisory industry. Mr. Galgano received aB.S. degree in Chemistry from St. John’s University and an M.B.A. from The Wharton School in 1972.Jin Shi was appointed as a director of the Company following the consummation of the asset exchange transactions. Mr. Shi has served as the managingpartner of Chum Capital Group, a merchant bank focused on helping Chinese growth companies to access global capital, since January 2013. Mr. Shi has also servedas a director of Seven Stars Cloud Group, Inc. (NASDAQ: SSC), a premium video on demand service provider, since January 2014, and joined the audit committee ofits board of directors in March 2016. He also served as a director and member of the audit committee of Pingtan Marine Enterprise, Ltd. (NASDAQ: PME), a marineenterprise group primarily engaged in ocean fishing through its subsidiaries. Mr. Shi received an EMBA degree from the Guanghua Management School of BeijingUniversity, and a Bachelor’s degree of science in Chemical Engineering from Tianjin University.Jiming Ha was appointed as a director of the Company following the consummation of the asset exchange agreement, and has also served as a seniorresearch fellow for the China Finance 40 Forum since March 1, 2018, and previously served as a managing director of Goldman Sachs from January 2017 to April2017. Mr. Ha served as a vice chairman and chief investment strategist of the Investment Strategy Group for Private Wealth Management at Goldman Sachs from2010 to January 2017. Mr. Ha holds a PhD in Economics from the University of Kansas and Master’s and Bachelor’s degrees of science from Fudan University.Zhihao Xu was appointed as a director of the Company following the consummation of the asset exchange transactions. Mr. Xu has served as the chiefexecutive officer of Geely Group Co., Ltd., in Hangzhou, China, since December 2017, and previously served as the chairman and chief executive officer of BeijingDingchengrenhe Investment Co., Ltd., a funds management company, from January 2017 to December 2017. Mr. Xu served as the chairman of president of HNAUSOLV CO., LTD., and the chief innovation officer of HNA Logistics Group from January 2014 to December 2016, and prior to that as the chairman of GopayInnovation Technology Co. Ltd., an online payment system operator supporting online money transfers, from April 2012 to January 2014. Mr. Xu graduated from theBusiness School of Renmin University of China and from the Wudaokou Finance College of Tsinghua University with a fund qualification certificate and securitiesqualification certificate.B. COMPENSATION.Compensation of Directors and Executive OfficersFor the ninemonth transition period ended September 30, 2018 and the fiscal year ended December 31, 2017, we did not pay any cash compensation to ourexecutive officers of LK Technology Ltd. and a to our directors for serving on our board of directors of LK Technology Ltd.37Other than nonemployee directors, we do not intend to compensate directors for serving on our board of directors or any of its committees. We do,however, intend to reimburse each member of our board of directors for outofpocket expenses incurred by each director in connection with attending meetings ofthe board of directors and its committees.AdministrationThe Incentive Plan is administered by our board of directors, or at the discretion of the board, by our compensation committee. Our board of directors hasdelegated authority to our compensation committee to administer the Incentive Plan. Subject to the terms of the Incentive Plan, the compensation committee mayselect participants to receive awards, determine the types of awards and terms and conditions of awards, and interpret provisions of the Incentive Plan.The ordinary shares issued or to be issued under the Incentive Plan consist of authorized but unissued shares. If any ordinary shares covered by an awardare not purchased or are forfeited, or if an award otherwise terminates without delivery of any ordinary shares, then the number of ordinary shares counted againstthe aggregate number of ordinary shares available under the plan with respect to the award will, to the extent of any such forfeiture or termination, again be availablefor making awards under the Incentive Plan.EligibilityAwards may be made under the Incentive Plan to our employees, officers, directors, consultants or advisers or to any of our affiliates, and to any otherindividual whose participation in the Incentive Plan is determined to be in our best interests by our board of directors.Amendment or Termination of the PlanOur board of directors may terminate or amend the Incentive Plan at any time and for any reason. No amendment, however, may adversely impair the rightsof grantees with respect to outstanding awards. The Incentive Plan has a term of ten years. Amendments will be submitted for shareholder approval to the extentrequired by applicable stock exchange listing requirements or other applicable laws.OptionsThe Incentive Plan permits the granting of options to purchase ordinary shares intended to qualify as incentive share options under the Internal RevenueCode and share options that do not qualify as incentive share options, or nonqualified share options.The exercise price of each share option may not be less than 100% of the fair market value of our ADSs representing ordinary shares on the date of grant.In the case of certain 10% shareholders who receive incentive share options, the exercise price may not be less than 110% of the fair market value of our ADSsrepresenting ordinary shares on the date of grant. An exception to these requirements is made for options that we grant in substitution for options held byemployees of companies that we acquire. In such a case the exercise price is adjusted to preserve the economic value of the employee’s share option from his or herformer employer.The term of each share option is fixed by the compensation committee and may not exceed ten years from the date of grant. The compensation committeedetermines at what time or times each option may be exercised and the period of time, if any, after retirement, death, disability or termination of employment duringwhich options may be exercised.Options may be made exercisable in installments. The award agreement provides the vesting of the options. Exercisability of options may be accelerated bythe compensation committee.38In general, an optionee may pay the exercise price of an option by (1) cash or check (in U.S. dollars or Renminbi or other local currency as approved by thecompensation committee), (2) ordinary shares held for such period of time as may be required by the compensation committee, (3) delivery of a notice of a marketorder with a broker with respect to ordinary shares then issuable upon exercise of an option, and that the broker has been directed to pay us a sufficient portion ofnet proceeds of the sale in satisfaction of the exercise price, provided that payment of such proceeds is then made to us upon settlement of such sale, (4) otherproperty acceptable to the compensation committee with a fair market value equal to the exercise price, (5) cashless exercise or (6) any combination of the foregoing.Share options granted under the Incentive Plan may not be sold, transferred, pledged, or assigned other than by will or under applicable laws of descentand distribution. However, we may permit limited transfers of nonqualified options for the benefit of immediate family members of grantees to help with estateplanning concerns or pursuant to a domestic relations order in settlement of marital property rights.Other AwardsThe compensation committee may also award under the Incentive Plan:1.ordinary shares subject to restrictions;2.deferred ordinary shares, credited as deferred ordinary share units, but ultimately payable in the form of unrestricted ordinary shares inaccordance with the terms of the grant or with the participant’s deferral election;3.ordinary share units subject to restrictions;4.unrestricted ordinary shares, which are ordinary shares issued at no cost or for a purchase price determined by the compensation committee whichare free from any restrictions under the 2011 Omnibus Incentive Plan;5.dividend equivalent rights entitling the grantee to receive credits for dividends that would be paid if the grantee had held a specified number ofordinary shares; or6.a right to receive a number of ordinary shares or, in the discretion of the compensation committee, an amount in cash or a combination of ordinaryshares and cash, based on the increase in the fair market value of the ADSs representing ordinary shares underlying the right during a statedperiod specified by the compensation committee.Effect of Certain Corporate TransactionsCertain change of control transactions involving us may cause awards granted under the Incentive Plan to vest, unless the awards are continued orsubstituted for by the surviving company in connection with the corporate transaction.Unless otherwise provided in the appropriate option agreement on the date of grant or provided by our board of directors thereafter with the consent of thegrantee, options granted under the Incentive Plan become exercisable in full following (1) a dissolution of our company or a merger, consolidation or reorganizationof our company with one or more other entities in which we are not the surviving entity, (2) a sale of substantially all of our assets to another person or entity, or (3)any transaction (including without limitation a merger or reorganization in which we are the surviving entity) which results in any person or entity owning 50% ormore of the combined voting power of all classes of our shares.39Adjustments for Dividends and Similar EventsThe compensation committee will make appropriate adjustments in outstanding awards and the number of ordinary shares available for issuance under theIncentive Plan, including the individual limitations on awards, to reflect ordinary share dividends, stock splits and other similar events.C. BOARD PRACTICES.Board of DirectorsOur board of directors consists of six members being Messrs. Xuesong Song, Kegang Peng, Dennis Galgano, Jin Shi, Jiming Ha and Zhiaho Xu. Ourdirectors hold office until our annual meeting of shareholders, where their successors will be duly elected and qualified, or until the directors’ death, resignation orremoval, whichever is earlier. Our directors are not subject to a term of office and hold office until their resignation, death or incapacity or until their respectivesuccessors have been elected and qualified in accordance with our fourth amended and restated memorandum of association and articles of association. A directorwill be removed from office if, among other things, the director (1) becomes bankrupt, (2) dies or becomes of unsound mind, or (3) is absent from meetings of ourboard of directors for six consecutive months without leave and our board of directors resolves that the office is vacated. A director is not entitled to any specialbenefits upon termination of service with the company.Director IndependenceOur board of directors consists of six members; Messrs. Dennis Galgano, Jin Shi, Jiming Ha and Zhihao Xu have been determined by us to be independentdirectors within the meaning of the independent director guidelines of the NASDAQ Corporate Governance Rules (the “NASDAQ Rules”).Committees of Our Board of DirectorsTo enhance our corporate governance, we established three committees under our board of directors: an audit committee, a compensation committee, and anominating and corporate governance committee. We have adopted a charter for each of these committees. The committees have the following functions andmembers.Audit CommitteeOur audit committee reports to our board of directors regarding the appointment of our independent public accountants, the scope and results of ourannual audits, compliance with our accounting and financial policies and management’s procedures and policies relating to the adequacy of our internal accountingcontrols. Our audit committee consists of Messrs. Dennis Galgano, Jin Shi, and Jiming Ha. Mr. Galgano, having accounting and financial management expertise,serves as the chairman of the audit committee and is an “audit committee financial expert” as defined by the rules and regulations of the SEC. Our board of directorshas determined that each of these persons meet the definition of an “independent director” under the applicable NASDAQ Rules and under Rule 10A3 of theSecurities Exchange Act of 1934, as amended (the “Exchange Act”).Our audit committee is responsible for, among other things:●the appointment, evaluation, compensation, oversight and termination of the work of our independent auditor (including resolution of disagreementsbetween management and the independent auditor regarding financial reporting);●an annual performance evaluation of the audit committee;●establishing procedures for the receipt, retention and treatment of complaints regarding accounting, internal accounting controls, auditing matters orpotential violations of law, and the confidential, anonymous submission by our employees of concerns regarding questionable accounting or auditingmatters or potential violations of law;40●ensuring that it receives an transition report from our independent auditor describing our internal control procedures and any steps taken to deal withmaterial control deficiencies and attesting to the auditor’s independence and describing all relationships between the auditor and us;●reviewing our annual audited financial statements and quarterly financial statements with management and our independent auditor;●reviewing and approving all proposed related party transactions;●reviewing our policies with respect to risk assessment and risk management;●meeting separately and periodically with management and our independent auditor; and●reporting regularly to our board of directors.Compensation CommitteeOur compensation committee assists the board of directors in reviewing and approving the compensation structure of our directors and executive officers,including all forms of compensation to be provided to our directors and executive officers. In addition, the compensation committee reviews share compensationarrangements for all of our other employees. Members of the compensation committee are not prohibited from direct involvement in determining their owncompensation. Our chief executive officer is not permitted to be present at any committee meeting during which his or her compensation is deliberated. Ourcompensation committee consists of Dennis Galgano and Jin Shi, with Mr. Shi serving as the chairman of the compensation committee. Our board of directors hasdetermined that each of these persons meet the definition of “independent director” under the applicable requirements of the NASDAQ Rules.Our compensation committee is responsible for, among other things:●reviewing and approving corporate goals and objectives relevant to the compensation of our chief executive officer, evaluating the performance of ourchief executive officer in light of those goals and objectives and setting the compensation level of our chief executive officer based on this evaluation;●reviewing and making recommendations to the board with respect to the compensation of our executives, incentive compensation and equitybasedplans that are subject to board approval; and●providing annual performance evaluations of the compensation committee.Nominating and Corporate Governance CommitteeOur nominating and corporate governance committee assists the board of directors in identifying and selecting or recommending individuals qualified tobecome our directors, developing and recommending corporate governance principles and overseeing the evaluation of our board of directors and management. Ournominating and corporate governance committee consists of Jiming Ha and Zhihao Xue, with Mr. Ha serving as the chairman of the nominating and corporategovernance committee. Our board of directors has determined that each of these persons meet the definition of “independent director” under the applicablerequirements of the NASDAQ Rules.Our nominating and corporate governance committee is responsible for, among other things:●selecting and recommending to our board nominees for election or reelection to our board, or for appointment to fill any vacancy;●reviewing annually with our board the current composition of the board of directors with regards to characteristics such as independence, age, skills,experience and availability of service to us;●selecting and recommending to our board the names of directors to serve as members of the audit committee and the compensation committee, as wellas the nominating and corporate governance committee itself; advising our board of directors periodically with regards to significant developments inthe law and practice of corporate governance as well as our compliance with applicable laws and regulations, and making recommendations to ourboard of directors on all matters of corporate governance and on any remedial action to be taken; and●monitoring compliance with our code of business conduct and ethics, including reviewing the adequacy and effectiveness of our procedures to ensureproper compliance.41Code of Business Conduct and EthicsOur board of directors adopted a code of business conduct and ethics applicable to our directors, officers and employees.Duties of DirectorsUnder British Virgin Islands law, our directors have a duty to act honestly, in good faith and with a view to our best interests. Our directors also have a dutyto exercise care, diligence and skills that a reasonably prudent person would exercise in comparable circumstances. In fulfilling their duty of care to us, our directorsmust ensure compliance with our memorandum of association and articles of association. We have the right to seek damages if a duty owed by our directors isbreached.The functions and powers of our board of directors include, among others:●appointing officers and determining the term of office of the officers;●authorizing the payment of donations to religious, charitable, public or other bodies, clubs, funds or associations as deemed advisable;●exercising the borrowing powers of the company and mortgaging the property of the company;●executing cheques, promissory notes and other negotiable instruments on behalf of the company; and●maintaining or registering a register of mortgages, charges or other encumbrances of the company.Remuneration and BorrowingThe directors may receive such remuneration as our board of directors may determine from time to time. Each director is entitled to be repaid or prepaid alltraveling, hotel and incidental expenses reasonably incurred or expected to be incurred in attending meetings of our board of directors or committees of our board ofdirectors or shareholder meetings or otherwise in connection with the discharge of his or her duties as a director. The compensation committee will assist thedirectors in reviewing and approving the compensation structure for the directors.Our board of directors may exercise all the powers of the company to borrow money and to mortgage or charge our undertakings and property or any partthereof, to issue debentures, debenture stock and other securities whenever money is borrowed or as security for any debt, liability or obligation of the company orof any third party.QualificationA director is not required to hold shares as a qualification to office.42Limitation on Liability and Other Indemnification MattersBritish Virgin Islands law does not limit the extent to which a company’s memorandum of association and articles of association may provide forindemnification of officers and directors, except to the extent any such provision may be held by the British Virgin Islands courts to be contrary to public policy,such as to provide indemnification against civil fraud or the consequences of committing a crime.Under our memorandum of association and articles of association, we may indemnify our directors, officers and liquidators against all expenses, includinglegal fees, and against all judgments, fines and amounts paid in settlement and reasonably incurred in connection with civil, criminal, administrative or investigativeproceedings to which they are party or are threatened to be made a party by reason of their acting as our director, officer or liquidator. To be entitled toindemnification, these persons must have acted honestly and in good faith with a view to the best interest of the company and, in the case of criminal proceedings,they must have had no reasonable cause to believe their conduct was unlawful.Compensation Committee Interlocks and Insider ParticipationNone of the members of our compensation committee is an officer or employee of our company. None of our executive officers currently serves, or in thepast year has served, as a member of the board of directors or compensation committee of any entity that has one or more executive officers serving on our board ofdirectors or compensation committee.Employment AgreementsOn August 19, 2018, the Company entered into an Employment Agreement (the “Song Agreement”) with Mr. Xuesong Song, to serve as the ChiefExecutive Officer of the Company for a fouryear term, subject to renewal. Under the terms of the Song Agreement, Mr. Song will receive no salary for his servicesbut will be eligible for an annual cash bonus in the Board’s sole discretion.On August 19, 2018, the Company entered into an Employment Agreement (the “Yu Agreement”) with Mr. Jie Yu, to serve as the Chief Financial Officer ofthe Company for a fouryear term, subject to renewal. Under the terms of the Yu Agreement, Mr. Yu will receive an annual salary of RMB700,000, and will be eligiblefor an annual cash bonus in the Board’s sole discretion.D. EMPLOYEES.As of September 30, 2018 and December 31, 2017, we had a total of 107 and 37 fulltime employees, including 48 and 13 in research and development, 9 and 2in sales and marketing and the rest in a variety of other divisions, respectively. All of our employees are fulltime employees. None of our employees is currentlyrepresented by a union and/or collective bargaining agreements. We believe that we have good relations with our employees and since our inception we have hadno history of work stoppages or union organizing campaigns.E. SHARE OWNERSHIP.The following table provides information as to the beneficial ownership of our ordinary shares as of October 10, 2018, by the persons listed. Beneficialownership of shares is determined under the rules of the SEC and generally includes any shares over which a person exercises sole or shared voting or investmentpower. For purposes of the following table, a person is deemed to have beneficial ownership of any ordinary shares if such person has the right to acquire suchshares within 60 days of October 10, 2018. For purposes of computing the percentage of outstanding shares held by each person, any shares that such person hasthe right to acquire within 60 days after of October 10, 2018 are deemed to be outstanding, but are not deemed to be outstanding for the purpose of computing thepercentage ownership of any other person. Except as otherwise noted, the persons named in the table have sole voting and investment power with respect to all ofthe ordinary shares beneficially owned by them. Unless otherwise indicated, the address of each person listed is c/o Luokung Technologies, LAB 32, SOHO 3Q, No9, Guanghua Road, Chaoyang District, Beijing, People’s Republic of China.43Percentage ownership in the following table is based on 199,317,558 ordinary shares outstanding on October 10, 2018.Number ofsharesPercent ofclassDirectors and named executive officersCharm Dragon International Limited (1)4,030,8822.03%Xuesong Song, Chairman, Chief Executive Officer and Director(2)38,156,43019.30%Kegang Peng, Vice President and Director (3)17,231,9558.71%Dennis Galgano, Director75,796*%Jin Shi, DirectorJiming Ha, DirectorZhihao Xu, Director (4)7,579,1843.83%Dongpu Zhang, President (5)2,321,7921.17%Chuang Tao, Director (6)1,221,996*%Directors and executive officers as a group (10 persons)66,587,15233.69%(1)Charm Dragon International Limited is a British Virgin Islands company controlled by Mr. Xuesong Song.(2)Consists of (i) 4,030,882 shares owned directly by Charm Dragon International Limited, a British Virgin Islands company and (ii) 22,624,793 shares owneddirectly by Bravo First Development Limited, a British Virgin Islands company. Mr. Xuesong Song is the controlling shareholder of Bravo First DevelopmentLimited. Mr. Xuesong Song is the sole director of Charm Dragon International Limited.(3)Consists of 17,231,955 shares owned directly by Plenty Prestige Enterprises Limited, a British Virgin Islands company. Mr. Kegang Peng is the sole director ofPlenty Prestige Enterprises Limited.(4)Consists of 7,579,184 shares directly owned by Geely Group Limited., a Chinese company. Mr. Zhihao Xu is the Chief Executive Officer of Geely GroupLimited.(5)Consists of 2,321,792 shares owned directly by Genoa Peak Limited, a British Virgin Islands company. Mr. Dongpu Zhang controls Genoa Peak Limited.(6)Consists of 1,221,996 shares owned directly by Globalearth Holdings Limited, a British Virgin Islands company. Mr. Chuang Tao controls Globalearth HoldingsLimited.*Represents less than 1% of shares outstandingITEM 7. MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS.A. MAJOR SHAREHOLDERSPlease refer to Item 6.E “Directors, Senior Management and Employees — Share Ownership.”To our knowledge, (A) we are not directly or indirectly owned or controlled by (i) another corporation or (ii) any foreign government and (B) there are noarrangements (including any announced or expected takeover bid), the operation of which may at a subsequent date result in a change in our control.The voting rights of our major shareholders do not differ from the voting rights of other holders of the same class of shares.44B. RELATED PARTY TRANSACTIONS. BUSINESS RELATIONSHIPS.Our subsidiaries, consolidated affiliated entities, and the subsidiaries of the consolidated affiliated entities have engaged, during the ordinary course ofbusiness, in a number of customary transactions with each other. All of these intercompany balances have been eliminated in consolidation.As of December 31, 2017, we had amounts due from related parties, C Media Limited and Ya Tuo Ji International Consultancy (Beijing) Limited, in theamounts of $11.8 million and $0.2 million, respectively. These amounts due from related parties are short term in nature, noninterest bearing, unsecured andrepayable on demand.As of December 31, 2017, we had amounts due to related parties, Mr. Xuesong Song, our chairman and chief executive officer, Thumb Beijing Branch andThumb Shenzhen Branch, in the amounts of $2.9 million, $0.6 million and $0.03 million, respectively. These amounts due to related parties are short term in nature,noninterest bearing, unsecured and payable on demand.We are party to a series of control agreements with Beijing Zhong Chuan Shi Xun. In addition, our chief executive officer, Mr. Xuesong Song, serves as andofficer of Beijing Zhong Chuan Shi Xun and is a shareholder of Beijing Zhong Chuan Shi Xun. The following table sets forth the relationship of Mr. Song withBeijing Zhong Chuan Shi Xun:NameRelationship withLuokung TechnologyRelationship withBeijing Zhong Chuan Shi XunPercentageOwnership Interest inBeijing Zhong Chuan Shi XunXuesong SongChief Executive OfficerChief Executive Officer61.83%C. INTERESTS OF EXPERTS AND COUNSEL.None.ITEM 8. FINANCIAL INFORMATION.A. CONSOLIDATED STATEMENTS AND OTHER FINANCIAL INFORMATION.See “Item 18. Financial Statements.”Legal ProceedingsTo our knowledge, other than as described below there are no material legal proceedings threatened against us. From time to time, we may be subject tovarious claims and legal actions arising in the ordinary course of business. Following the consummation of the AEA, we became successor in interest to the legalproceedings described below.Litigation with Shanghai Fusheng Weier Intelligent Control Technology Co., Ltd.On January 22, 2016, Zhong Chuan Rui You and Shanghai Fusheng Weier Intelligent Control Technology Co., Ltd. (“Fusheng Weier”) signed a contract forequipment of $1,652,842 (RMB10,800,000). Since Zhong Chuan Rui You did not make the payments of $1,126,381 (RMB7,360,000) on the due dates, Fusheng Weierfiled a lawsuit against Zhong Chuan Rui You in Shanghai Xuhui District People's Court on October 8, 2016. On March 9, 2017, Xuhui District People's Court issuedthe verdict requiring Zhong Chuan Rui You to pay the overdue debts. In August 2017, C Media Limited made the payment of $512,075 (RMB3,346,000). Theremaining balance has been accrued in accounts payable. The payment schedule for the remaining balance is being negotiated by the two parties. On February 5,2018, a hearing was held adding Zhong Chuan Shi Xun as a defendant. The Group plans to settle the remaining balance within one year.45Lawsuit with Gansu Jinlun Culture Media Co., Ltd.On August 22, 2014, Zhong Chuan Rui You and Gansu Jinlun Culture Media Co., Ltd. (“Gansu Jinlun”) signed a “Lanzhou Railway Bureau AirconditionedTrain WiFi Network System Advertising Operation Rights Agreement” for advertising on 72 trains of $1,467,880 (RMB9,604,633). Due to the dispute on theproject implementation, Zhong Chuan Rui You did not pay the advertising fee. On August 23, 2017, Gansu Jinlun filed a lawsuit with Gansu Intermediate People'sCourt. On December 19, 2017, Gansu Intermediate People's Court issued a verdict, ruling that Zhong Chuan Rui You settle the overdue advertising fee. Since only 18out of 72 trains have been installed with Wifi network system, Zhong Chuan Rui You disputed and appealed to the verdict. The next court trial date has not yet beendetermined. C Media and Gansu Jinlun are negotiating a potential settlement to resume the contract. According to the legal counsel, it is probable that the settlementwill amount to approximately $459,000 (RMB3,000,000); therefore, this amount has been accrued in accounts payable as at December 31, 2017.Litigation with Shenzhen Hua Xun Fang Zhou Technology Co., Ltd.On June 16, 2015, Zhong Chuan Rui You signed a cooperation agreement with Shenzhen Hua Xun Fang Zhou Technology Co., Ltd. (“Shenzhen Hua Xun”)and Xuesong Song, a major shareholder of C Media Limited. Pursuant to this agreement, Zhong Chuan Rui You procures equipment from Shenzhen Hua Xun.Xuesong Song acts as a joint liability guarantor for the entire debts of Zhong Chuan Rui You under this agreement. As Zhong Chuan Rui You did not make thepayments on the due dates, Shenzhen Hua Xun filed a lawsuit with Shenzhen Baoan District People's Court on May 31, 2016. On November 1, 2016, Zhong ChuanRui You, Xuesong Song and Shenzhen Hua Xun reached a settlement in Shenzhen Baoan District People's Court to settle $1,735,389 (RMB11,355,000) in fourinstalments. On December 30, 2017, the debt was assigned to C Media Limited.Dividend PolicyWe currently intend to retain all of our available funds and future earnings for use in the operation and expansion of our business and do not anticipatepaying cash dividends in the foreseeable future. Under the terms of our Amended and Restated Memorandum and Articles of Association the declaration andpayment of any dividends in the future will be determined by our board of directors, in its discretion, and will depend on a number of factors, including our earnings,capital requirements and overall financial condition and our ability to receive dividends from our subsidiaries. If we pay any dividends, we will pay our ADS holders’dividends with respect to their underlying shares to the same extent as holders of our ordinary shares, subject to the terms of the deposit agreement, including thefees and expenses payable thereunder. Cash dividends on our ordinary shares, if any, will be paid in U.S. dollars.Our ability to receive dividends from our subsidiaries may limit our ability to pay dividends on our ordinary shares. See Risk Factors – Risks Related toDoing Business in China – Our holding company structure may limit the payment of dividends” and “Item 10. Additional Information – D. Exchange Controls –Dividend Distribution”.B. SIGNIFICANT CHANGES.N/AITEM 9. THE OFFER AND LISTINGA. OFFER AND LISTING DETAILS.Markets and Share Price HistoryOur ordinary shares are not currently listed on any trading market. Our American Depository Shares (“ADSs”) were voluntarily delisted from the NASDAQCapital Market on September 19, 2018. We have applied to NASDAQ for the listing of our ordinary shares on the NASDAQ Capital Market and received an approvalfor listing of Ordinary Shares on August 6, 2018, and as of the date of this transition report, that application and approval are currently under review.46The table below sets forth the high and low reported sales prices in dollars of our ordinary shares, which are represented by ADSs, as reported byNASDAQ in the periods as indicated:ADSHighLowAnnual Highs and Lows (as of the fiscal year end 09/30 for the five most recent full financial years)*20175.592.67201610.21.62Quarterly Highs and Lows (for the two most recent full financial years and any subsequent period, based on calendarquarter end)*2018Third Quarter8.006.30Second Quarter8.824.25First Quarter6.403.702017Fourth Quarter5.592.91Third Quarter3.992.67Second Quarter4.063.07First Quarter5.152.832016Fourth Quarter6.594.20Third Quarter10.201.62Second Quarter3.101.97First Quarter3.602.12Monthly Highs and Lows (for the most recent six months)September 20188.006.41August 20187.706.63July 20187.506.30June 20188.827.55May 20187.805.92April 20187.454.25*The Company effected a 1for10 reverse stock split of its ordinary shares on November 6, 2012 (the “Reverse Split”). The ratio between each AmericanDepositary Share (“ADS”) and its underlying ordinary share postReverse Split remains the same, namely, one ADR remains to represent one ordinary sharepost the Reverse Split. The price listed here after November 6, 2012 reflected the effect from the Reverse Split.B. PLAN OF DISTRIBUTION.Not Applicable.C. MARKETS.Our ordinary shares are not currently listed on any trading market. Our ADSs were voluntarily delisted from the NASDAQ Capital Market on September 19,2018. We have applied to NASDAQ for the listing of our ordinary shares on the NASDAQ Capital Market and received an approval for listing of Ordinary Shares onAugust 6, 2018, and as of the date of this transition report, that application and approval are currently under review.47D. SELLING SHAREHOLDERS.Not applicable.E. DILUTION.Not applicable.F. EXPENSES OF THE ISSUE.Not applicable.ITEM 10. ADDITIONAL INFORMATION.A. SHARE CAPITALNot applicable.B. MEMORANDUM AND ARTICLES OF ASSOCIATIONWe are a British Virgin Islands company incorporated with limited liability and our affairs are governed by the provisions of our memorandum of associationand articles of association, as amended and restated from time to time, and by the provisions of applicable British Virgin Islands law.Our memorandum of association and articles of association authorize the issuance of up to 251,000,000 shares, which are designated into (i) 250,000,000 ofordinary shares of the Company (“Ordinary Shares”), and (ii) 1,000,000 preferred shares of the Company (“Preferred Shares”), in each case with the rights,preferences and privileges as set out in the memorandum and articles of association of the Company.Please see below for a description of our ADSs under “Item 12. Description of Securities Other Than Equity Securities – D. American Depository Shares.”The following is a summary of the material provisions of our ordinary shares and our memorandum of association and articles of association.Ordinary SharesAll of our issued and outstanding ordinary shares are fully paid and nonassessable. Holders of our ordinary shares who are nonresidents of the BritishVirgin Islands may freely hold and vote their shares.Subject to the memorandum and articles of association (and, for greater clarity, without prejudice to any special rights conferred thereby on the holders ofany other shares), an Ordinary Share of the Company confers on the holder:(a)the right to one vote per Ordinary Share at a meeting of the members or on any resolution of members;(b)the right to an equal share in any distribution paid by the Company; and(c)the right to an equal share in the distribution of the surplus assets of the Company on a winding up;48Subject to the memorandum and articles of association (and, for greater clarity, without prejudice to any special rights conferred thereby on the holders ofany other shares), a Preferred Share of the Company confers on the holder:(a)the right to 399 votes per Preferred Share at a meeting of the members or on any resolution of members;(b)the right to an equal share in any distribution paid by the Company;(c)the right to an equal share in the distribution of the surplus assets of the Company on a winding up;(d)be freely transferable, in whole or in part, by Mr. Xuesong Song to any third party through one or more Private Transactions, subject toApplicable Law; and(e)be freely transferable, in whole or in part, by Mr. Xuesong Song to any third party through one or more Public Transactions, subject to ApplicableLaw and Automatic Conversion of such Preferred Share(s) into Ordinary Share(s).Each Preferred Share shall be automatically converted at any time after issue and without the payment of any additional sum into an equal number of fullypaid Ordinary Shares upon the conclusion of any transfer by Mr. Xuesong Song to any third party through one or more Public Transactions.Limitation on Liability and Indemnification MattersUnder British Virgin Islands law, each of our directors and officers, in performing his or her functions, is required to act honestly and in good faith with aview to our best interests and exercise the care, diligence and skill that a reasonably prudent person would exercise in comparable circumstances. Our memorandumof association and articles of association provide that, to the fullest extent permitted by British Virgin Islands law or any other applicable laws, our directors will notbe personally liable to us or our shareholders for any acts or omissions in the performance of their duties. Such limitation of liability does not affect the availabilityof equitable remedies such as injunctive relief or rescission. These provisions will not limit the liability of directors under United States federal securities laws.We may indemnify any of our directors or anyone serving at our request as a director of another entity against all expenses, including legal fees, andagainst all judgments, fines and amounts paid in settlement and reasonably incurred in connection with legal, administrative or investigative proceedings. We mayonly indemnify a director if he or she acted honestly and in good faith with the view to our best interests and, in the case of criminal proceedings, the director hadno reasonable cause to believe that his or her conduct was unlawful. The decision of our board of directors as to whether the director acted honestly and in goodfaith with a view to our best interests and as to whether the director had no reasonable cause to believe that his or her conduct was unlawful, is in the absence offraud sufficient for the purposes of indemnification, unless a question of law is involved. The termination of any proceedings by any judgment, order, settlement,conviction or the entry of no plea does not, by itself, create a presumption that a director did not act honestly and in good faith and with a view to our best interestsor that the director had reasonable cause to believe that his or her conduct was unlawful. If a director to be indemnified has been successful in defense of anyproceedings referred to above, the director is entitled to be indemnified against all expenses, including legal fees, and against all judgments, fines and amounts paidin settlement and reasonably incurred by the director or officer in connection with the proceedings.We may purchase and maintain insurance in relation to any of our directors or officers against any liability asserted against the directors or officers andincurred by the directors or officers in that capacity, whether or not we have or would have had the power to indemnify the directors or officers against the liabilityas provided in our memorandum of association and articles of association.Insofar as indemnification for liabilities arising under the Securities Act may be permitted for our directors or officers under the foregoing provisions, wehave been informed that in the opinion of the Securities and Exchange Commission, such indemnification is against public policy as expressed in the Securities Actand is therefore unenforceable as a matter of United States law.49Differences in Corporate LawWe were incorporated under, and are governed by, the laws of the British Virgin Islands. The corporate statutes of the State of Delaware and the BritishVirgin Islands are similar, and the flexibility available under British Virgin Islands law has enabled us to adopt memorandum of association and articles of associationthat will provide shareholders with rights that do not vary in any material respect from those they would enjoy if we were incorporated under the Delaware GeneralCorporation Law, or Delaware corporate law. Set forth below is a summary of some of the differences between provisions of the BVI Act applicable to us and thelaws application to companies incorporated in Delaware and their shareholders.Director’s Fiduciary DutiesUnder Delaware corporate law, a director of a Delaware corporation has a fiduciary duty to the corporation and its stockholders. This duty has twocomponents: the duty of care and the duty of loyalty. The duty of care requires that a director act in good faith, with the care that an ordinarily prudent personwould exercise under similar circumstances. Under this duty, a director must inform himself of, and disclose to stockholders, all material information reasonablyavailable regarding a significant transaction. The duty of loyalty requires that a director act in a manner he reasonably believes to be in the best interests of thecorporation. He must not use his corporate position for personal gain or advantage. This duty prohibits selfdealing by a director and mandates that the bestinterest of the corporation and its stockholders take precedence over any interest possessed by a director, officer or controlling stockholder and not shared by thestockholders generally. In general, actions of a director are presumed to have been made on an informed basis, in good faith and in the honest belief that the actiontaken was in the best interests of the corporation. However, this presumption may be rebutted by evidence of a breach of one of the fiduciary duties. Should suchevidence be presented concerning a transaction by a director, a director must prove the procedural fairness of the transaction, and that the transaction was of fairvalue to the corporation.British Virgin Islands law provides that every director of a British Virgin Islands company in exercising his powers or performing his duties shall acthonestly and in good faith and in what the director believes to be in the best interests of the company. Additionally, the director shall exercise the care, diligence andskill that a reasonable director would exercise in the same circumstances taking into account the nature of the company, the nature of the decision and the positionof the director and his responsibilities. In addition, British Virgin Islands law provides that a director shall exercise his powers as a director for a proper purpose andshall not act, or agree to the company acting, in a manner that contravenes British Virgin Islands law or the memorandum association or articles of association of thecompany.Amendment of Governing DocumentsUnder Delaware corporate law, with very limited exceptions, a vote of the stockholders is required to amend the certificate of incorporation. Under BritishVirgin Islands law and our memorandum of association and articles of association, (i) our shareholders may amend our memorandum of association and articles ofassociation by a resolution of shareholders, or (ii) our board of directors may amend our memorandum of association and articles of association by a resolution ofdirectors without a requirement for a resolution of shareholders so long as the amendment does not:●restrict the rights of the shareholders to amend the memorandum of association and articles of association;●change the percentage of shareholders required to pass a resolution of shareholders to amend the memorandum of association and articles ofassociation;●amend the memorandum of association and articles of association in circumstances where the memorandum of association and articles ofassociation cannot be amended by the shareholders; or●amend the provisions of memorandum of association or the articles of association pertaining to “rights attaching to shares,” “rights not varied bythe issue of the shares pari passu,” “variation of rights” and “amendment of memorandum and articles”.50Written Consent of DirectorsUnder Delaware corporate law, directors may act by written consent only on the basis of a unanimous vote. Under British Virgin Islands law, directors’consents need only a majority of directors signing to take effect.Written Consent of ShareholdersUnder Delaware corporate law, unless otherwise provided in the certificate of incorporation, any action to be taken at any annual or special meeting ofstockholders of a corporation, may be taken by written consent of the holders of outstanding stock having not less than the minimum number of votes that wouldbe necessary to take such action at a meeting. As permitted by British Virgin Islands law, shareholders’ consents need only a majority of shareholders signing totake effect. Our memorandum of association and articles of association provide that shareholders may approve corporate matters by way of a resolution consentedto at a meeting of shareholders or in writing by a majority of shareholders entitled to vote thereon.Shareholder ProposalsUnder Delaware corporate law, a shareholder has the right to put any proposal before the annual meeting of shareholders, provided it complies with thenotice provisions in the governing documents. A special meeting may be called by the board of directors or any other person authorized to do so in the governingdocuments, but shareholders may be precluded from calling special meetings. British Virgin Islands law and our memorandum of association and articles ofassociation provide that our directors shall call a meeting of the shareholders if requested in writing to do so by shareholders entitled to exercise at least 30% of thevoting rights in respect of the matter for which the meeting is requested.Sale of AssetsUnder Delaware corporate law, a vote of the stockholders is required to approve the sale of assets only when all or substantially all assets are being sold. Inthe British Virgin Islands, shareholder approval is required when more than 50% of the company’s total assets by value are being disposed of or sold.Dissolution; Winding UpUnder Delaware corporate law, unless the board of directors approves the proposal to dissolve, dissolution must be approved by shareholders holding100% of the total voting power of the corporation. Only if the dissolution is initiated by the board of directors may it be approved by a simple majority of thecorporation’s outstanding shares. Delaware corporate law allows a Delaware corporation to include in its certificate of incorporation a supermajority votingrequirement in connection with dissolutions initiated by the board. As permitted by British Virgin Islands law and our memorandum of association and articles ofassociation, we may be voluntarily liquidated under Part XII of the BVI Act by resolution of directors and resolution of shareholders if we have no liabilities and weare able to pay our debts as they fall due.Redemption of SharesUnder Delaware corporate law, any stock may be made subject to redemption by the corporation at its option or at the option of the holders of such stockprovided there remains outstanding shares with full voting power. Such stock may be made redeemable for cash, property or rights, as specified in the certificate ofincorporation or in the resolution of the board of directors providing for the issue of such stock. As permitted by British Virgin Islands law, and our memorandum ofassociation and articles of association, shares may be repurchased, redeemed or otherwise acquired by us. Our directors must determine that immediately followingthe redemption or repurchase we will be able to satisfy our debts as they fall due and the value of our assets exceeds our liabilities.51Variation of Rights of SharesUnder Delaware corporate law, a corporation may vary the rights of a class of shares with the approval of a majority of the outstanding shares of suchclass, unless the certificate of incorporation provides otherwise. As permitted by British Virgin Islands law, and our memorandum of association and articles ofassociation, if our share capital is divided into more than one class of shares, we may vary the rights attached to any class only with the consent in writing ofholders of not less than threefourths of the issued shares of that class and holders of not less than threefourths of the issued shares of any other class of shareswhich may be affected by the variation.Removal of DirectorsUnder Delaware corporate law, a director of a corporation with a classified board may be removed only for cause with the approval of a majority of theoutstanding shares entitled to vote, unless the certificate provides otherwise. As permitted by British Virgin Islands law and our memorandum of association andarticles of association, directors may be removed by resolution of directors or resolution of shareholders.MergersUnder the BVI Act, two or more companies may merge or consolidate in accordance with the statutory provisions. A merger means the merging of two ormore constituent companies into one of the constituent companies, and a consolidation means the uniting of two or more constituent companies into a newcompany. In order to merger or consolidate, the directors of each constituent company must approve a written plan of merger or consolidation which must beauthorized by a resolution of shareholders.Shareholders not otherwise entitled to vote on the merger or consolidation may still acquire the right to vote if the plan of merger or consolidation containsany provision which, if proposed as an amendment to the memorandum association or articles of association, would entitle them to vote as a class or series on theproposed amendment. In any event, all shareholders must be given a copy of the plan of merger or consolidation irrespective of whether they are entitled to vote atthe meeting or consent to the written resolution to approve the plan of merger or consolidation.Inspection of Books and RecordsUnder Delaware corporate law, any shareholder of a corporation may for any proper purpose inspect or make copies of the corporation’s stock ledger, list ofshareholders and other books and records. Holders of our shares have no general right under British Virgin Islands law to inspect or obtain copies of our list ofshareholders or our corporate records. However, we will provide holders of our shares with annual audited financial statements. See “Where You Can FindAdditional Information.”Conflict of InterestThe BVI Act provides that a director shall, after becoming aware that he is interested in a transaction entered into or to be entered into by the company,disclose that interest to the board of directors of the company. The failure of a director to disclose that interest does not affect the validity of a transaction enteredinto by the director or the company, so long as the director’s interest was disclosed to the board prior to the company’s entry into the transaction or was notrequired to be disclosed (for example where the transaction is between the company and the director himself or is otherwise in the ordinary course of business andon usual terms and conditions). As permitted by British Virgin Islands law and our memorandum of association and articles of association, a director interested in aparticular transaction may vote on it, attend meetings at which it is considered, and sign documents on our behalf which relate to the transaction.52Transactions with Interested ShareholdersDelaware corporate law contains a business combination statute applicable to Delaware public corporations whereby, unless the corporation hasspecifically elected not to be governed by such statute by amendment to its certificate of incorporation, it is prohibited from engaging in certain businesscombinations with an “interested shareholder” for three years following the date that such person becomes an interested shareholder. An interested shareholdergenerally is a person or group who or that owns or owned 15% or more of the target’s outstanding voting stock within the past three years. This has the effect oflimiting the ability of a potential acquirer to make a twotiered bid for the target in which all shareholders would not be treated equally. The statute does not apply if,among other things, prior to the date on which such shareholder becomes an interested shareholder, the board of directors approves either the businesscombination or the transaction that resulted in the person becoming an interested shareholder. This encourages any potential acquirer of a Delaware publiccorporation to negotiate the terms of any acquisition transaction with the target’s board of directors.British Virgin Islands law has no comparable provision. As a result, we cannot avail ourselves of the types of protections afforded by the Delawarebusiness combination statute. However, although British Virgin Islands law does not regulate transactions between a company and its significant shareholders, itdoes provide that such transactions must be entered into bona fide in the best interests of the company and not with the effect of constituting a fraud on theminority shareholders.Independent DirectorsThere are no provisions under Delaware corporate law or under the BVI Act that require a majority of our directors to be independent.Cumulative VotingUnder Delaware corporate law, cumulative voting for elections of directors is not permitted unless the company’s certificate of incorporation specificallyprovides for it. Cumulative voting potentially facilitates the representation of minority shareholders on a board of directors since it permits the minority shareholderto cast all the votes to which the shareholder is entitled on a single director, which increases the shareholder’s voting power with respect to electing such director.There are no prohibitions to cumulative voting under the laws of the British Virgin Islands, but our memorandum of association and articles of association do notprovide for cumulative votingAntitakeover Provisions in Our Memorandum of association and articles of associationSome provisions of our memorandum of association and articles of association may discourage, delay or prevent a change in control of our company ormanagement that shareholders may consider favorable, including provisions that authorize our board of directors to issue preference shares in one or more seriesand to designate the price, rights, preferences, privileges and restrictions of such preference shares.C. MATERIAL CONTRACTS.On January 25, 2018, the Company executed an Asset Exchange Agreement (“AEA”) with C Media Limited, a corporation organized under the laws of theCayman Islands (“C Media”), whereby the Company agreed to purchase all the capital stock and equity interests of LK Technology Ltd, together with its whollyowned subsidiaries MMB Limited and Mobile Media (China) Limited and all respective subsidiaries from C Media in exchange for (i) 185,412,599 ordinary shares ofthe Company, par value $0.01 per share (“Ordinary Shares”), (ii) 1,000,000 preferred shares of Kingtone (“Preferred Shares”) and (iii) all issued and outstandingcapital stock or equity interests of the Company’s subsidiary, Topsky InfoTech Holdings Pte Ltd., and its whollyowned subsidiary Xi’an Softech Co., Ltd.,including all entities effectively controlled by Xi’an Softech Co., Ltd. through contractual arrangements and variable business entities.To consummate the contemplated transactions described above, the Company obtained shareholder consent at a special meeting held on May 20, 2018, (i)to authorize 1,000,000 Preferred Shares, (ii) to authorize additional Ordinary Shares so that total authorized Ordinary Shares is equal to 250,000,000 shares, (iii) to listsuch Ordinary Shares on NASDAQ, and (iv) to approve the transactions contemplated in the Asset Exchange Agreement. Additionally, NASDAQ needed toapprove the contemplated transactions prior to consummation thereof. C Media had the right to terminate the AEA if the closing had not occurred (other thanthrough the failure of C Media to comply fully with its obligations under the AEA) on or before July 31, 2018. The transactions contemplated by the AEA wereconsummated on August 17, 2018.53On January 25, 2018, five shareholders of the Company including its largest shareholder and its Chief Executive Officer executed a Securities PurchaseAgreement, whereby such shareholders agreed to sell a total of 617,988 Ordinary Shares and 282,694 American Depository Shares of the Company to Redstone YYLManagement Limited, a company incorporated in the British Virgin Islands, in exchange for an aggregate purchase price of $1,897,860.09.On August 25, 2018, LK Technology entered into a Stock Purchase Agreement (the “Agreement”) with the shareholders (“Shareholders”) of SuperengineHoldings Limited, a limited liability company organized under the laws of the British Virgin Islands (the “Superengine”), pursuant to which LK Technology acquiredall of the issued and outstanding capital stock of Superengine for an aggregate purchase price of US$60 million (the “Purchase Price”), which are paid by theissuance of our Ordinary Shares in an amount equal to the quotient of (x) the Purchase Price divided by (y) the average of the closing prices of the Ordinary Shareson the NASDAQ Capital Market over the 12 months period preceding July 31, 2018. We are a party to the Agreement in connection with the issuance of theOrdinary Shares and certain other limited purposes.D. EXCHANGE CONTROLS.This section sets forth a summary of the most significant regulations or requirements that affect our business activities in China or our shareholders’ rightto receive dividends and other distributions from us.Regulations on Internet Content ProvidersThe Administrative Measures on Internet Information Services, or the Internet Content Measures, which was promulgated by the State Council onSeptember 25, 2000 and amended on January 8, 2011, set out guidelines on the provision of internet information services. The Internet Content Measures specifiesthat internet information services regarding news, publications, education, medical and health care, pharmacy and medical appliances, among other things, arerequired to be examined, approved and regulated by the relevant authorities. Internet information providers are prohibited from providing services beyond thoseincluded in the scope of their licenses or filings. Furthermore, the Internet Content Measures specifies a list of prohibited content. Internet information providers areprohibited from producing, copying, publishing or distributing information that is humiliating or defamatory to others or that infringes the legal rights of others.Internet information providers that violate such prohibition may face criminal charges or administrative sanctions. Internet information providers must monitor andcontrol the information posted on their websites. If any prohibited content is found, they must remove the content immediately, keep a record of such content andreport to the relevant authorities.The Internet Content Measures classifies internet information services into commercial internet information services and noncommercial internetinformation services. Commercial internet information services refer to services that provide information or services to internet users with charge. A provider ofcommercial internet information services must obtain an ICP License.Regulations on Internet Audiovideo Program ServicesOn December 20, 2007, the MII and the State Administration of Press, Publication, Radio, Film and Television, or the SAPPRFT, jointly issued theAdministrative Provisions for the Internet AudioVideo Program Service, or the Audiovideo Program Provisions, which came into effect on January 31, 2008 andwas amended on August 28, 2015. The Audiovideo Program Provisions defines “internet audiovideo program services” as producing, editing and integrating ofaudiovideo programs, supplying audiovideo programs to the public via the internet, and providing audiovideo programs uploading and transmission services to athird party. Entities providing internet audiovideo programs services must obtain an internet audiovideo program transmission license. Applicants for such licensesshall be stateowned or statecontrolled entities unless an internet audiovideo program transmission license has been obtained prior to the effectiveness of theAudiovideo Program Provisions in accordance with the thenineffect laws and regulations. In addition, foreigninvested enterprises are not allowed to engage inthe abovementioned services. According to the Audiovideo Program Provisions and other relevant laws and regulations, audiovideo programs provided by theentities supplying Internet audiovideo program services shall not contain any illegal content or other content prohibited by the laws and regulations, such as anycontent against the basic principles in the PRC Constitution, any content that damages the sovereignty of the country or national security, and any content thatdisturbs social order or undermine social stability. An audiovideo program that has already been broadcast shall be retained in full for at least 60 days. Movies,television programs and other media content used as Internet audiovideo programs shall comply with relevant administrative regulations on programs broadcaststhrough radio, movie and television channels. Entities providing services related to Internet audiovideo programs shall immediately delete the audiovideoprograms violating laws and regulations, keep relevant records, report relevant authorities and implement other regulatory requirements.54The Categories of the Internet AudioVideo Program Services, or the Audiovideo Program Categories, promulgated by SAPPRFT on March 10, 2017,classifies internet audio/video programs into four categories: (I) Category I internet audio/video program service, which is carried out with a form of radio station ortelevision station; (II) Category II internet audio/video program service, including (a) rebroadcasting service of current political news audio/video programs; (b)hosting, interviewing, reporting and commenting service of arts, entertainment, technology, finance and economics, sports, education and other specializedaudio/video programs; (c) producing (interviewing not included) and broadcasting service of arts, entertainment, technology, finance and economics, sports,education and other specialized audio/video programs; (d) producing and broadcasting service of internet films/dramas; (e) aggregating and broadcasting service offilms, television dramas and cartoons; (f) aggregating and broadcasting service of arts, entertainment, technology, finance and economics, sports, education andother specialized audio/video programs; and (g) live audio/video broadcasting service of cultural activities of common social organizations, sport events or otherorganization activities; and (III) Category III internet audio/video program service, including (a) aggregating service of online audio/video contents, and (b) rebroadcasting service of the audio/video programs uploaded by internet users; and (IV) Category III internet audio/video program service, including (a) rebroadcasting of the radio/television program channels; and (b) rebroadcasting of internet audio/video program channels.On May 27, 2016, the SAPPRFT issued the Notice on Relevant Issues concerning Implementing the Approval Works of Upgrading Mobile Internet AudioVideo Program Service, or the Mobile AudioVideo Program Notice. The Mobile AudioVideo Program Notice provides that the mobile Internet audiovideo programservices shall be deemed Internet audiovideo program service. Entities which have obtained the approvals to provide the Internet audiovideo program servicesmay use mobile WAP websites or mobile applications to provide audiovideo program services. Entities with regulatory approvals may operate mobile applicationsto provide the audiovideo program services The types of the programs shall be within the permitted scope as provided in the licenses and such mobile applicationsshall be filed with the SAPPRFT.Regulations on Production and Operation of Radio/Television ProgramsOn July 19, 2004, the SAPPRFT promulgated the Administrative Measures on the Production and Operation of Radio and Television Programs, or the Radioand Television Program Production Measures, which came into effect on August 20, 2004 and was amended on August 28, 2015. The Radio and Television ProgramProduction Measures provides that any business that produces or operates radio or television programs must first obtain a Radio and Television ProgramProduction and Operation Permit. Entities holding such permits shall conduct their business within the permitted scope as provided in their permits. In addition,foreigninvested enterprises are not allowed to engage in the abovementioned services.Regulations on Online Advertising ServicesOn April 24, 2015, the Standing Committee of the National People’s Congress enacted the Advertising Law of the People’s Republic of China, or the NewAdvertising Law, effective on September 1, 2015. The New Advertising Law increases the potential legal liability of advertising services providers and strengthensregulations of false advertising. On July 4, 2016, the State Administration for Industry and Commerce, or the SAIC, issued the Interim Measures of theAdministration of Online Advertising, or the SAIC Interim Measures, effective on September 1, 2016. The New Advertising Law and the SAIC Interim Measuresrequire that online advertisements may not affect users’ normal internet use and internet popup ads must display a “close” sign prominently and ensure onekeyclosing of the popup windows. The SAIC Interim Measures provides that all online advertisements must be marked “Advertisement” so that viewers can easilyidentify them as such. Moreover, the SAIC Interim Measures treats paid search results as advertisements that are subject to PRC advertisement laws, and requiresthat paid search results be conspicuously identified on search result pages as advertisements. The New Advertising Law and SAIC Interim Measures require us toconduct more stringent examination and monitoring of our advertisers and the content of their advertisements.55Regulations on Online GamesIn September 2009, the GAPP (currently known as the SAPPRFT), together with the National Copyright Administration, and the National Office ofCombating Pornography and Illegal Publications jointly issued the Notice on Further Strengthening on the Administration of Preexamination and Approval ofOnline Game and the Examination and Approval of Imported Online Game, or the Circular 13. The Circular 13 states that foreign investors are not permitted to investin online game operating businesses in the PRC via wholly foreignowned entities, Sinoforeign equity joint ventures or cooperative joint ventures or to exercisecontrol over or participate in the operation of domestic online game businesses through indirect means, such as other joint venture companies or contractual ortechnical arrangements. If the our contractual arrangements were deemed under the Circular 13 to be an “indirect means” for foreign investors to exercise controlover or participate in the operation of a domestic online game business, our contractual arrangements might be challenged by the SAPPRFT. We are not aware ofany online game companies which use the same or similar contractual arrangements having been challenged by the SAPPRFT as using those contractualarrangements as an “indirect means” for foreign investors to exercise control over or participate in the operation of a domestic online game business or having beenpenalized or ordered to terminate operations since the Circular 13 became effective. However it is unclear whether and how the Circular 13 might be interpreted orimplemented in the future. See “Risk Factors—If the PRC government finds that the agreements that establish the structure for operating certain of our operations inChina do not comply with PRC regulations relating to the relevant industries, or if these regulations or the interpretation of existing regulations change in the future,we could be subject to severe penalties or be forced to relinquish our interests in those operations.”The Interim Measures for the Administration of Online Games, or the Online Game Measures, issued by the MOC, which took effect on August 1, 2010 andamended on December 15, 2017, regulates a broad range of activities related to the online games business, including the development, production and operation ofonline games, the issuance of virtual currencies used for online games, and the provision of virtual currency trading services. The Online Game Measures providesthat any entity that is engaged in online game operations must obtain an Network Cultural Business Permit, and require the content of an imported online game to beexamined and approved by the MOC prior to the game’s launch and require a domestic online game to be filed with the MOC within 30 days after its launch. TheNotice of the Ministry of Culture on the Implementation of the Interim Measures for the Administration of Online Games, which was issued by the MOC on July 29,2010 to implement the Online Game Measures, (i) requires online game operators to protect the interests of online game users and specifies that certain terms thatmust be included in service agreements between online game operators and the users of their online games, (ii) requires content review of imported online gamesand filing procedures for domestic online games, (iii) emphasizes the protection of minors playing online games, and (iv) requests online game operators to promoterealname registration by their game users.Regulations on Information Security, Censorship and PrivacyThe Standing Committee of the National People’s Congress, China’s national legislative body, enacted the Decisions on the Maintenance of InternetSecurity on December 28, 2000 that may subject persons to criminal liabilities in China for any attempt to use the internet to: (i) gain improper entry to a computer orsystem of strategic importance; (ii) disseminate politically disruptive information; (iii) leak state secrets; (iv) spread false commercial information or (v) infringe uponintellectual property rights. In 1997, the Ministry of Public Security issued the Administration Measures on the Security Protection of Computer InformationNetwork with International Connections which prohibits using the internet to leak state secrets or to spread socially destabilizing materials. If an ICP license holderviolates these measures, the PRC government may revoke its ICP license and shut down its websites. Pursuant to the Ninth Amendment to the Criminal Law issuedby the Standing Committee of the National People’s Congress on August 29, 2015, effective on November 1, 2015, any ICP provider that fails to fulfill the obligationsrelated to internet information security as required by applicable laws and refuses to take corrective measures, will be subject to criminal liability for (i) any largescale dissemination of illegal information; (ii) any severe effect due to the leakage of users’ personal information; (iii) any serious loss of evidence of criminalactivities; or (iv) other severe situations, and any individual or entity that (i) sells or provides personal information to others unlawfully or (ii) steals or illegallyobtains any personal information will be subject to criminal liability in severe situations.56The Cybersecurity Law of the PRC, or the Cybersecurity Law, which was promulgated on November 7, 2016 by the Standing Committee of the NationalPeople’s Congress and came into effect on June 1, 2017, provides that network operators shall meet their cyber security obligations and shall take technicalmeasures and other necessary measures to protect the safety and stability of their networks. Under the Cybersecurity Law, network operators are subject to varioussecurity protectionrelated obligations, including: (i) network operators shall comply with certain obligations regarding maintenance of the security of internetsystems; (ii) network operators shall verify users’ identities before signing agreements or providing certain services such as information publishing or realtimecommunication services; (iii) when collecting or using personal information, network operators shall clearly indicate the purposes, methods and scope of theinformation collection, the use of information collection, and obtain the consent of those from whom the information is collected; (iv) network operators shall strictlypreserve the privacy of user information they collect, and establish and maintain systems to protect user privacy; (v) network operators shall strengthenmanagement of information published by users, and when they discover information prohibited by laws and regulations from publication or dissemination, theyshall immediately stop dissemination of that information, including taking measures such as deleting the information, preventing the information from spreading,saving relevant records, and reporting to the relevant governmental agencies.Regulations on Intellectual Property RightsRegulations on CopyrightThe Copyright Law of the PRC, or the Copyright Law, which took effect on June 1, 1991 and was amended in 2001 and in 2010, provides that Chinesecitizens, legal persons, or other organizations shall, whether published or not, own copyright in their copyrightable works, which include, among others, works ofliterature, art, natural science, social science, engineering technology and computer software. Copyright owners enjoy certain legal rights, including right ofpublication, right of authorship and right of reproduction. The Copyright Law as revised in 2010 extends copyright protection to Internet activities, productsdisseminated over the Internet and software products. In addition, Copyright Law provides for a voluntary registration system administered by the China CopyrightProtection Center, or the CPCC. According to the Copyright Law, an infringer of the copyrights shall be subject to various civil liabilities, which include ceasinginfringement activities, apologizing to the copyright owners and compensating the loss of copyright owner. Infringers of copyright may also subject to fines and/oradministrative or criminal liabilities in severe situations.The Computer Software Copyright Registration Measures, or the Software Copyright Measures, promulgated by the State Council on December 20, 2001and amended on January 30, 2013, regulates registrations of software copyright, exclusive licensing contracts for software copyright and assignment agreements.The National Copyright Administration, or the NCA administers software copyright registration and the CPCC, is designated as the software registration authority.The CPCC shall grant registration certificates to the Computer Software Copyrights applicants which meet the requirements of both the Software CopyrightMeasures and the Computer Software Protection Regulations (Revised in 2013).The Provisions of the Supreme People’s Court on Certain Issues Related to the Application of Law in the Trial of Civil Cases Involving Disputes onInfringement of the Information Network Dissemination Rights specifies that disseminating works, performances or audiovideo products by the internet users orthe internet service providers via the internet without the permission of the copyright owners shall be deemed to have infringed the right of dissemination of thecopyright owner.57The Measures for Administrative Protection of Copyright Related to Internet, which was jointly promulgated by the NCA and the MIIT on April 29, 2005and became effective on May 30, 2005, provides that upon receipt of an infringement notice from a legitimate copyright holder, an ICP operator must take remedialactions immediately by removing or disabling access to the infringing content. If an ICP operator knowingly transmits infringing content or fails to take remedialactions after receipt of a notice of infringement that harms public interest, the ICP operator could be subject to administrative penalties, including an order to ceaseinfringing activities, confiscation by the authorities of all income derived from the infringement activities, or payment of fines.On May 18, 2006, the State Council promulgated the Regulations on the Protection of the Right to Network Dissemination of Information (as amended in2013). Under these regulations, an owner of the network dissemination rights with respect to written works or audio or video recordings who believes thatinformation storage, search or link services provided by an Internet service provider infringe his or her rights may require that the Internet service provider delete, ordisconnect the links to, such works or recordings.Patent LawsAccording to the Patent Law of the PRC (Revised in 2008), the State Intellectual Property Office is responsible for administering patent law in the PRC. Thepatent administration departments of provincial, autonomous region or municipal governments are responsible for administering patent law within their respectivejurisdictions. The Chinese patent system adopts a firsttofile principle, which means that when more than one person file different patent applications for the sameinvention, only the person who files the application first is entitled to obtain a patent of the invention. To be patentable, an invention or a utility model must meetthree criteria: novelty, inventiveness and practicability. A patent is valid for twenty years in the case of an invention and ten years in the case of utility models anddesigns.Trademark LawsTrademarks are protected by the Trademark Law of the PRC (Revised in 2013) which was adopted in 1982 and subsequently amended in 1993, 2001 and 2013respectively as well as by the Implementation Regulations of the PRC Trademark Law adopted by the State Council in 2002 and as most recently amended on April29, 2014. The Trademark Office under the SAIC handles trademark registrations. The Trademark Office grants a tenyear term to registered trademarks and the termmay be renewed for another tenyear period upon request by the trademark owner. A trademark registrant may license its registered trademarks to another party byentering into trademark license agreements, which must be filed with the Trademark Office for its record. As with patents, the Trademark Law has adopted a firsttofile principle with respect to trademark registration. If a trademark applied for is identical or similar to another trademark which has already been registered or subjectto a preliminary examination and approval for use on the same or similar kinds of products or services, such trademark application may be rejected. Any personapplying for the registration of a trademark may not injure existing trademark rights first obtained by others, nor may any person register in advance a trademark thathas already been used by another party and has already gained a “sufficient degree of reputation” through such party’s use.Regulations on Domain NamesThe MIIT promulgated the Measures on Administration of Internet Domain Names, or the Domain Name Measures, on August 24, 2017, which took effecton November 1, 2017 and replaced the Administrative Measures on China Internet Domain Name promulgated by MII on November 5, 2004. According to theDomain Name Measures, the MIIT is in charge of the administration of PRC internet domain names. The domain name registration follows a firsttofile principle.Applicants for registration of domain names shall provide the true, accurate and complete information of their identities to domain name registration serviceinstitutions. The applicants will become the holder of such domain names upon the completion of the registration procedure.Relevant Regulations of the Hightech EnterpriseThe Ministry of Information Industry, the Ministry of Science and Technology and the State Tax Bureau collectively promulgated and issued the“Certifying Standard and Managing Measures for Hightech Enterprises” and “the Hightech Areas of Main National Support” on April 14, 2008 to certify the Hightech enterprise and encourage and support the development of the Chinese Hightech enterprises. Under the Hightech Enterprises Measures, the enterprise canenjoy the favorable tax policy when it is certified as a Hightech enterprise by the Ministry of Information Industry, the Ministry of Science and Technology and theState Tax Bureau or with its provincial branch according to the stipulated standard. The software and computer and network technology are recognized as the mainnational supported Hightech field. Kingtone Information is a Hightech enterprise and enjoys a favorable income tax rate of 15%.58Laws and Regulations of Intellectual Property RightsChina has adopted legislation governing intellectual property rights, including patents, copyrights and trademarks. China is a signatory to the maininternational conventions on intellectual property rights and became a member of the Agreement on Trade Related Aspects of Intellectual Property Rights upon itsaccession to the WTO in December 2001.PatentsThe “Patent Law of the People’s Republic of China” promulgated by the Standing Committee of the National People's Congress, adopted in 1985 andrevised in 1992, 2001 and 2008, protects registered patents. The State Intellectual Property Office of PRC handles granting patent rights, providing for a twentyyearpatent term for inventions and a tenyear patent term for utility models and designs. As we disclosed in Item 4, of this transition report on Form 20F, throughKingtone Information, we have been granted one invention patent “wireless video transmission system based on BREW platform” by the State Intellectual PropertyOffice (“SIPO”) of PRC on September 23, 2009 and therefore such invention is entitled to all the protections provided under the Patent Law for twenty years.Computer Software Copyright and AdministrationOn December 20, 2001, the State Council of PRC issued the “Regulation for Computer Software Protection of the People’s Republic of China” (the“Regulation for Computer Software Protection”) which became effective on January 1, 2002 to protect the interests of copyright owners, to promote the research andapplication and to encourage the development of the Chinese software industry. Under the Regulation for Computer Software Protection, natural persons, legalpersons or any other organizations shall have a copyright on the software developed by such persons no matter whether such software has been published. Theprotection period of software copyrights owned by the legal person or other organization is fifty years and expires on December 31 of the fiftieth year from the initialpublication date of such computer software. Currently, Kingtone Information has twelve registration certificates for software copyrights.TrademarksThe “Trademark Law of the People’s Republic of China” promulgated by the State Council of PRC, adopted in 1982 and revised in 1993 and 2001, protectsregistered trademarks. The Trademark Office under the Chinese State Administration for Industry and Commerce handles trademark registrations and grants a termof ten years to registered trademarks which are renewable for another ten years after the application to the Trademark Office by the owners of the trademarks.Trademark license agreements must be filed with the Trademark Office for record. China has a “firsttoregister” system that requires no evidence of prior use orownership. Kingtone Information has its registered trademarks as described in Item 4 of this transition report on Form 20F. Accordingly, such trademarks areentitled to the protection under the Trademark Law.Foreign Currency ExchangeOn August 29, 2008, the SAFE issued the Notice of the General Affairs Department of the State Administration of Foreign Exchange on the RelevantOperating Issues concerning the Improvement of the Administration of Payment and Settlement of Foreign Currency Capital of Foreignfunded Enterprises, orCircular 142. Pursuant to Circular 142, RMB converted from the foreign currencydenominated capital of a foreigninvested company may only be used for purposeswithin the business scope approved by the applicable governmental authority and may not be used for equity investments within the PRC unless specificallyprovided for otherwise. The use of such Renminbi capital may not be changed without SAFE’s approval and may not in any case be used to repay Renminbi loans ifthe proceeds of such loans have not been used.59See “Risk Factors — Risks Related to Doing Business in China — PRC regulation of loans and direct investment by offshore holding companies to PRCentities may delay or prevent us from using the proceeds of our initial public offering to make loans or additional capital contributions to our PRC operatingsubsidiaries, which could materially and adversely affect our liquidity and our ability to fund and expand our business”.Dividend DistributionWe are a British Virgin Islands holding company and substantially all of our operations are conducted through LK Technology. We rely on dividends andother distributions from our LK Technology and its subsidiaries to provide us with our cash flow and allow us to pay dividends on the shares underlying our ADSsand meet our other obligations. The principal regulations governing distribution of dividends paid by wholly foreignowned enterprises include:1.Wholly ForeignOwned Enterprise Law (1986), as amended; and2.Implementation Rules on Wholly ForeignOwned Enterprise Law (1990), as amended.Under these regulations, wholly foreignowned enterprises in China may pay dividends only out of their accumulated profits, if any, determined inaccordance with PRC accounting standards and regulations. In addition, wholly foreignowned enterprises in China are required to set aside at least 10% of theiraftertax profit based on PRC accounting standards each year to its general reserves until the accumulative amount of such reserves reach 50% of its registeredcapital. These reserves are not distributable as cash dividends. The board of directors of a FIE has the discretion to allocate a portion of its aftertax profits to staffwelfare and bonus funds, which may not be distributed to equity owners except in the event of liquidation.Regulation of Foreign Exchange in Certain Onshore and Offshore TransactionsIn October 2005, the SAFE issued the Notice on Issues Relating to the Administration of Foreign Exchange in Fundraising and Return InvestmentActivities of Domestic Residents Conducted via Offshore Special Purpose Companies, or SAFE Notice 75, which became effective as of November 1, 2005, and wasfurther supplemented by two implementation notices issued by the SAFE on November 24, 2005 and May 29, 2007, respectively. Under Circular 75, prior registrationwith the local SAFE branch is required for PRC residents to establish or to control an offshore company for the purposes of financing that offshore company withassets or equity interests in an onshore enterprise located in the PRC. An amendment to the registration or filing with the local SAFE branch by such PRC resident isalso required for the injection of equity interests or assets of an onshore enterprise in the offshore company or overseas funds raised by such offshore company, orany other material change with respect to the offshore company in connection with any increase or decrease of capital, transfer of shares, merger, division, equityinvestment, debt investment, or creation of any security interest over any assets located in the PRC.Under SAFE Notice 75, PRC residents are further required to repatriate into the PRC all of their dividends, profits or capital gains obtained from theirshareholdings in the offshore entity within 180 days of their receipt of such dividends, profits or capital gains. The registration and filing procedures under SAFENotice 75 are prerequisites for other approval and registration procedures necessary for capital inflow from the offshore entity, such as inbound investments orshareholders loans, or capital outflow to the offshore entity, such as the payment of profits or dividends, liquidating distributions, equity sale proceeds, or thereturn of funds upon a capital reduction. Therefore, failure to comply with such registration may subject us to certain restrictions on, including but not limited to, theincrease of the registered capital of our PRC subsidiary, making loans to our PRC subsidiary, and making distributions to us from our onshore companies.Regulations of Overseas Investments and ListingsOn August 8, 2006, six PRC regulatory agencies, including the MOFCOM, the State Assets Supervision and Administration Commission, the StateAdministration for Taxation, the State Administration for Industry and Commerce, the CSRC and the SAFE, jointly adopted the New M&A Rule, which becameeffective on September 8, 2006. This regulation, among other things, includes provisions that purport to require that an offshore SPV formed for purposes ofoverseas listing of equity interests in PRC companies and controlled directly or indirectly by PRC companies or individuals obtain the approval of the CSRC prior tothe listing and trading of such SPV’s securities on an overseas stock exchange.60On September 21, 2006, the CSRC published on its official website procedures regarding its approval of overseas listings by SPVs. The CSRC approvalprocedures require the filing of a number of documents with the CSRC and it would take several months to complete the approval process.The application of the New M&A Rule with respect to overseas listings of SPVs remains unclear with no consensus currently existing among the leadingPRC law firms regarding the scope of the applicability of the CSRC approval requirement.We believe that, based on our understanding of the current PRC laws, regulations and rules and the procedures announced on September 21, 2006, there isno requirement in this regulation that would require an application to be submitted to the MOFCOM or the CSRC for the approval of the listing and trading of ourADSs on the NASDAQ Capital Market.See “Risk Factors — Risks Related to Doing Business in China — If we were required to obtain the prior approval of the China Securities RegulatoryCommission, or CSRC, of the listing and trading of our ADSs on the NASDAQ Capital Market, we may face regulatory actions or other sanctions from the CSRC orother PRC regulatory agencies.”E. TAXATIONThe following discussion sets forth the material British Virgin Islands, PRC and U.S. federal income tax consequences of an investment in our ADSs andthe ordinary shares represented by our ADSs, sometimes referred to collectively as the “securities”. It is based upon laws and relevant interpretations thereof ineffect as of the date of this report, all of which are subject to change. This discussion does not deal with all possible tax consequences relating to an investment inthe securities, such as the tax consequences under state, local and other tax laws. As used in this discussion, “we,” “our” and “us” refers only to LuokungTechnology Ltd.British Virgin Islands TaxationUnder the law of the British Virgin Islands as currently in effect, a holder of the securities who is not a resident of the British Virgin Islands is not liable forBritish Virgin Islands tax on dividends paid with respect to the securities and all holders of the securities are not liable to the British Virgin Islands for tax on gainsrealized during that year on the sale or disposal of such ordinary shares. The British Virgin Islands does not impose a withholding tax on dividends paid by acompany incorporated or reregistered under the BVI Act.There are no capital gains, gift or inheritance taxes levied by the British Virgin Islands on companies incorporated under the BVI Act. In addition, shares ofcompanies incorporated under the BVI Act are not subject to transfer taxes, stamp duties or similar charges.There is no income tax treaty or convention currently in effect between the United States and the British Virgin Islands or between China and the BritishVirgin Islands.61People’s Republic of China TaxationIn 2007, the PRC National People’s Congress enacted the new Enterprise Income Tax Law (the “EIT Law”), which became effective on January 1, 2008. Thenew EIT Law imposes a single uniform income tax rate of 25% on all Chinese enterprises, including foreigninvested enterprises, and levies a withholding tax rate of10% on dividends payable by Chinese subsidiaries to their foreign shareholders unless any such foreign shareholders’ jurisdiction of incorporation has a tax treatywith China that provides for a different withholding agreement. Under the new EIT Law, enterprises established outside China but deemed to have a “de factomanagement body” within the country may be considered “resident enterprises” for Chinese tax purposes and, therefore, may be subject to an enterprise income taxrate of 25% on their worldwide income. Pursuant to the implementation rules of the new EIT Law, a “de facto management body” is defined as a body that hasmaterial and overall management control over the business, personnel, accounts and properties of the enterprise. Although substantially all members of ourmanagement are located in China, it is unclear whether Chinese tax authorities would require (or permit) us to be treated as PRC resident enterprises. If we aredeemed a Chinese tax resident enterprise, we may be subject to an enterprise income tax rate of 25% on our worldwide income, excluding dividends received directlyfrom another Chinese tax resident enterprise, as well as PRC enterprise income tax reporting obligations. If we are not deemed to be a Chinese tax resident enterprise,we may be subject to certain PRC withholding taxes. See “Risk Factors — Risks Related to Doing Business in China — Our holding company structure may limit thepayment of dividends.” As a result of such changes, our historical tax rates may not be indicative of our tax rates for future periods and the value of our ADSs orordinary shares may be adversely affected. If we are deemed a PRC resident enterprise and investors’ gain from the sales of the securities and dividends payable byus are deemed sourced from China, such gains and dividends payable by us may be subject to PRC tax. See “Risk Factors — Risks Related to Doing Business inChina — If we were deemed a “resident enterprise” by PRC tax authorities, we could be subject to tax on our global income at the rate of 25% under the New EITLaw and our nonPRC shareholders could be subject to certain PRC taxes.United States Federal Income TaxationGeneralThe following is a discussion of the material U.S. federal income tax consequences to an investor of purchasing, owning and disposing of our securities.This discussion does not address any aspects of U.S. federal gift or estate tax or the state, local or nonU.S. tax consequences of an investment in the securities.YOU SHOULD CONSULT YOUR OWN TAX ADVISORS CONCERNING THE U.S. FEDERAL, STATE, LOCAL AND NONU.S. TAX CONSEQUENCES OFPURCHASING, OWNING AND DISPOSING OF THE SECURITIES IN YOUR PARTICULAR SITUATION.This discussion applies only to those investors that purchase the securities in this offering and that hold the securities as capital assets within the meaningof section 1221 of the Internal Revenue Code of 1986, as amended (the “Code”). This section does not apply to holders that may be subject to special tax rules,including but not limited to:1.dealers in securities or currencies;2.traders in securities that elect to use a marktomarket method of accounting;3.banks, insurance companies or certain financial institutions;4.taxexempt organizations;5.governments or agencies or instrumentalities thereof;6.partnerships or other entities treated as partnerships or other passthrough entities for U.S. federal income tax purposes or persons holding thesecurities through such entities;7.regulated investment companies or real estate investment trusts;8.holders subject to the alternative minimum tax;9.holders that actually or constructively own 10% or more of the total combined voting power of all classes of our shares entitled to vote;10.holders that acquired the securities pursuant to the exercise of employee stock options, in connection with employee stock incentive plans orotherwise as compensation;11.holders that hold the securities as part of a straddle, hedging or conversion transaction; or12.holders whose functional currency is not the U.S. dollar.62This section is based on the Code, its legislative history, existing and proposed U.S. Treasury regulations, published rulings and other administrativeguidance of the U.S. Internal Revenue Service (the “IRS”) and court decisions, all as in effect on the date hereof. These laws are subject to change or differentinterpretation by the IRS or a court, possibly on a retroactive basis.We have not sought, and will not seek, a ruling from the IRS as to any U.S. federal income tax consequence described herein. The IRS may disagree withthe discussion herein, and its determination may be upheld by a court. Moreover, there can be no assurance that future legislation, regulation, administrative rulingsor court decisions will not adversely affect the accuracy of the statements in this discussion.The discussion below of the U.S. federal income tax consequences to “U.S. Holders” will apply to a beneficial owner of the securities that is for U.S. federalincome tax purposes:1.a citizen or resident of the United States;2.a corporation (or other entity treated as a corporation) that is created or organized (or treated as created or3.organized) under the laws of the United States, any state thereof or the District of Columbia;4.an estate whose income is subject to U.S. federal income tax regardless of its source; or5.a trust if (a) a U.S. court can exercise primary supervision over the trust’s administration and one or more U.S.6.persons are authorized to control all substantial decisions of the trust, or (b) if the trust has a valid election in effect under applicable U.S.Treasury regulations to be treated as a U.S. person.If a beneficial owner of the securities is not described as a U.S. Holder and is not an entity treated as a partnership or other passthrough entity for U.S.federal income tax purposes, such owner will be considered a “NonU.S. Holder.” The material U.S. federal income tax consequences applicable specifically to NonU.S. Holders are described below under the heading “Tax Consequences to NonU.S. Holders.”If a partnership (including for this purpose any entity treated as a partnership for U.S. tax purposes) is a beneficial owner of the securities, the U.S. taxtreatment of a partner in the partnership generally will depend on the status of the partner and the activities of the partnership. A holder of the securities that is apartnership or partners in such a partnership should consult their own tax advisors about the U.S. federal income tax consequences of holding and disposing of thesecurities.This discussion assumes that any distributions made (or deemed made) on the securities and any consideration received by a holder in consideration forthe sale or other disposition of the securities will be in U.S. dollars. This discussion also assumes that the representations contained in the Deposit Agreement aretrue and that the obligations in the Deposit Agreement and any related agreement will be complied with in accordance with their terms. Finally, this discussionassumes that each ADS will only represent ordinary shares in us, and will not represent any other type of security, such as a bond, cash or other property.63For U.S. federal income tax purposes, a holder of an ADS will be treated as the beneficial owner of the shares represented by such ADS and an exchange ofan ADS for ordinary shares will not be subject to U.S. federal income tax. The U.S. Treasury has expressed concerns that parties to whom ADSs are prereleased, orintermediaries in the chain of ownership between holders of ADSs and the issuer of the securities underlying the ADSs may be taking actions that are inconsistentwith the claiming of foreign tax credits by U.S. Holders of ADSs. Such actions would also be inconsistent with the claiming of the reduced rate of tax applicable todividends received by certain noncorporate U.S. Holders, including individual U.S. Holders, as described below under “Tax Consequences to U.S.Holders — Taxation of Distributions.” Accordingly, the availability of foreign tax credits or the reduced tax rate for dividends received by certain noncorporate U.S.Holders, including individual U.S. Holders, could be affected by actions taken by parties to whom the ADSs are released, or by future actions by the U.S. Treasury.Tax Consequences to U.S. HoldersTaxation of DistributionsSubject to the passive foreign investment company, or PFIC, rules discussed below, the gross amount of any cash distributions we make with respect to aU.S. Holder in respect of such U.S. Holder’s ADSs or shares will generally be treated as dividend income if the distributions are made from our current oraccumulated earnings and profits, calculated according to U.S. federal income tax principles. Cash dividends will generally be subject to U.S. federal income tax asordinary income on the day the U.S. Holder actually or constructively receives such income. With respect to noncorporate U.S. Holders for taxable years beginningbefore January 1, 2011, dividends may be taxed at the lower applicable longterm capital gains rate provided that (a) our ADSs or shares are readily tradable on anestablished securities market in the United States, or, in the event we are deemed to be a Chinese “resident enterprise” under the EIT Law (as described above under“People’s Republic of China Taxation”), we are eligible for the benefits of the income tax treaty between the United States and the PRC (the “U.S.PRC Tax Treaty”),(b) we are not a PFIC, as discussed below, for either the taxable year in which the dividend was paid or the preceding taxable year, and (c) certain holding periodrequirements are met. Under published IRS authority, ADSs are considered for purposes of clause (a) above to be readily tradable on an established securitiesmarket in the United States only if they are listed on certain exchanges, which presently include the NASDAQ Capital Market. U.S. Holders should consult their owntax advisors regarding the availability of the lower rate for any dividends paid with respect to our ADSs or shares.Dividends will not be eligible for the dividendsreceived deduction allowed to U.S. corporations in respect of dividends received from other U.S.corporations. Generally, if we distribute noncash property as a dividend (other than pro rata distributions of our shares) out of our current or accumulated earningsand profits (as determined for U.S. federal income tax purposes), a U.S. Holder generally will include in income an amount equal to the fair market value of theproperty, on the date that it is distributed.Distributions in excess of current and accumulated earnings and profits, as determined for U.S. federal income tax purposes, will be treated as a nontaxablereturn of capital to the extent of the U.S. Holder’s basis in its shares or ADSs and thereafter as capital gain. However, we do not plan on calculating our earnings andprofits in accordance with U.S. federal income tax principles. U.S. holders therefore should generally assume that any distributions paid by us will be treated asdividends for U.S. federal income tax purposes.If PRC taxes apply to dividends paid by us to a U.S. Holder (see “People’s Republic of China Taxation,” above), such taxes may be treated as foreign taxeseligible for credit against such holder’s U.S. federal income tax liability (subject to certain limitations), and a U.S. Holder may be entitled to certain benefits under theU.S.PRC Tax Treaty. The rules relating to the U.S. foreign tax credit are complex. U.S. Holders should consult their own tax advisors regarding the creditability ofany such PRC tax and their eligibility for the benefits of the U.S.PRC Tax Treaty.64Taxation of Dispositions of SharesSubject to the PFIC rules discussed below, a U.S. holder that sells or otherwise disposes of its shares will recognize capital gain or loss for U.S. federalincome tax purposes equal to the difference between the amount realized and such U.S. Holder’s tax basis in its shares. Prior to January 1, 2011, capital gains of anoncorporate U.S. holder are generally taxed at a maximum rate of 15% where the property is held for more than one year (and 20% thereafter). The ability to deductcapital losses is subject to limitations.If PRC taxes apply to any gain from the disposition of our shares by a U.S. Holder, such taxes may be treated as foreign taxes eligible for credit against suchholder’s U.S. federal income tax liability (subject to certain limitations), and a U.S. Holder may be entitled to certain benefits under the U.S.PRC Tax Treaty. U.S.Holders should consult their own tax advisors regarding the creditability of any such PRC tax and their eligibility for the benefits of the U.S.PRC Tax Treaty.Passive Foreign Investment CompanyWe do not expect to be a PFIC for U.S. federal income tax purposes for our current tax year or in the foreseeable future. The determination of whether or notwe are a PFIC in respect of any of our taxable years is a factual determination that cannot be made until the close of the applicable tax year and that is based on thetypes of income we earn and the value and composition of our assets (including goodwill), all of which are subject to change. Therefore, we can make no assurancesthat we will not be a PFIC in respect of our current taxable year or in the future.In general, we will be a PFIC in any taxable year if either:1.at least 75% of our gross income for the taxable year is passive income; or2.at least 50% of the value, determined on the basis of a quarterly average, of our assets is attributable to assets that produce or are held for theproduction of passive income.Passive income includes dividends, interest, royalties, rents (other than certain rents and royalties derived in the active conduct of a trade or business), theexcess of gains over losses from certain types of transactions in commodities, annuities and gains from assets that produce passive income. We will be treated asowning our proportionate share of the assets and earning our proportionate share of the income of any corporation in which we own, directly or indirectly, at least25% (by value) of the stock.If we are treated as a PFIC in any year during which a U.S. Holder owns the securities, and such U.S. Holder did not make a marktomarket election, asdescribed below, the U.S. Holder will be subject to special rules with respect to:1.any gain recognized by the U.S. Holder on the sale or other disposition of its shares; and any excess distribution that we make to the U.S. Holder(generally, the excess of the amount of any distributions to such U.S. Holder during a single taxable year of such U.S. Holder over 125% of theaverage annual distributions received by such U.S. Holder in respect of the shares during the three preceding taxable years of such U.S. Holder or,if shorter, such U.S. Holder holding period for the shares).Under these rules:2.the gain or excess distribution will be allocated ratably over the U.S. Holder’s holding period for the shares;3.the amount allocated to the U.S. Holder’s taxable year in which it realized the gain or excess distribution or to the period in the U.S. Holder’sholding period before the first day of our first taxable year in which we are a PFIC will be taxed as ordinary income;4.the amount allocated to other taxable years (or portions thereof) of the U.S. Holder and included in its holding period will be taxed at the highesttax rate in effect for that year; and5.the interest charge generally applicable to underpayments of tax will be imposed in respect of the tax attributable to each such other taxable yearof the U.S. Holder. 6.Special rules apply for calculating the amount of the foreign tax credit with respect to excess distributions by a PFIC.65Alternatively, if a U.S. Holder, at the close of its taxable year, owns ordinary shares in a PFIC that are treated as marketable stock, the U.S. Holder may makea marktomarket election with respect to such shares for such taxable year. Our shares will be “marketable” to the extent that they remain regularly traded on anational securities exchange, such as the NASDAQ Capital Market. If a U.S. Holder makes this election in a timely fashion, it will not be subject to the PFIC rulesdescribed above. Instead, in general, the U.S. Holder will include as ordinary income each year the excess, if any, of the fair market value of its shares at the end ofthe taxable year over its adjusted basis in its shares. Any ordinary income resulting from this election would generally be taxed at ordinary income tax rates andwould not be eligible for the reduced rate of tax applicable to qualified dividend income. The U.S. Holder will also be allowed to take an ordinary loss in respect ofthe excess, if any, of the adjusted basis of its shares over the fair market value at the end of the taxable year (but only to the extent of the net amount of previouslyincluded income as a result of the marktomarket election). The U.S. Holder’s basis in the shares will be adjusted to reflect any such income or loss amounts. U.S.Holders should consult their own tax advisor regarding potential advantages and disadvantages of making a marktomarket election with respect to their shares.Alternatively, a U.S. Holder of stock in a PFIC may avoid the PFIC tax consequences described above in respect to our or shares by making a timely“qualified electing fund” election to include in income its pro rata share of our net capital gains (as longterm capital gain) and other earnings and profits (asordinary income), on a current basis, in each case whether or not distributed, in the taxable year of the U.S. Holder in which or with which our taxable year ends.However, the qualified electing fund election is available only if the PFIC provides such U.S. Holder with certain information regarding its earnings and profits asrequired under applicable U.S. Treasury regulations. We do not intend to furnish the information that a U.S. Holder would need in order to make a qualified electingfund election. Therefore, U.S. Holders will not be able to make or maintain such election with respect to their or shares.If a U.S. Holder owns our shares or during any year that we are a PFIC, such holder must file U.S. Internal Revenue Service Form 8621 regarding suchholder’s shares or and the gain realized on the disposition of the shares. The reduced tax rate for dividend income, discussed in “Taxation of Distributions,” is notapplicable to dividends paid by a PFIC. U.S. Holders should consult with their own tax advisors regarding reporting requirements with respect to their shares.Tax Consequences to NonU.S. HoldersDividends paid to a NonU.S. Holder in respect of our or shares generally will not be subject to U.S. federal income tax, unless the dividends are effectivelyconnected with the NonU.S. Holder’s conduct of a trade or business within the United States (and, if required by an applicable income tax treaty, are attributable toa permanent establishment or fixed base that such holder maintains in the United States).In addition, a NonU.S. Holder generally will not be subject to U.S. federal income tax on any gain attributable to a sale or other disposition of our or sharesunless such gain is effectively connected with its conduct of a trade or business in the United States (and, if required by an applicable income tax treaty, isattributable to a permanent establishment or fixed base that such holder maintains in the United States) or the NonU.S. Holder is an individual who is present in theUnited States for 183 days or more in the taxable year of sale or other disposition and certain other conditions are met (in which case, such gain from United Statessources generally is subject to tax at a 30% rate or a lower applicable tax treaty rate).Dividends and gains that are effectively connected with the NonU.S. Holder’s conduct of a trade or business in the United States (and, if required by anapplicable income tax treaty, are attributable to a permanent establishment or fixed base in the United States) generally will be subject to tax in the same manner as fora U.S. Holder and, in the case of a NonU.S. Holder that is a corporation for U.S. federal income tax purposes, may also be subject to an additional branch profits taxat a 30% rate or a lower applicable tax treaty rate.66Information Reporting and Backup Withholding In general, information reporting for U.S. federal income tax purposes generally should apply to distributions made on the securities within the UnitedStates to a noncorporate U.S. Holder and to the proceeds from sales and other dispositions of the securities by a noncorporate U.S. Holder to or through a U.S.office of a broker. Payments made (and sales and other dispositions effected at an office) outside the United States generally should be subject to informationreporting in limited circumstances.Dividend payments made to U.S. Holders and proceeds paid from the sale or other disposition the securities may be subject to information reporting to theIRS and possible U.S. federal backup withholding at a current rate of 28%. Certain exempt recipients, such as corporations, are not subject to these informationreporting requirements. Backup withholding will not apply to a U.S. Holder who furnishes a correct taxpayer identification number and makes any other requiredcertification, or who is otherwise exempt from backup withholding. U.S. Holders who are required to establish their exempt status must provide a duly executed IRSForm W9.A NonU.S. Holder generally may eliminate the requirement for information reporting and backup withholding by providing certification of its foreignstatus, under penalties of perjury, on a duly executed applicable IRS Form W8 or by otherwise establishing an exemption.Backup withholding is not an additional tax. Rather, the amount of any backup withholding will be allowed as a credit against a U.S. Holder’s or a nonU.S.Holder’s U.S. federal income tax liability and may entitle such holder to a refund, provided that certain required information is timely furnished to the IRS.PROSPECTIVE PURCHASERS OF OUR SECURITIES SHOULD CONSULT WITH THEIR OWN TAX ADVISORS REGARDING THE APPLICATION OFTHE U.S. FEDERAL INCOME TAX LAWS TO THEIR PARTICULAR SITUATIONS AS WELL AS ANY ADDITIONAL TAX CONSEQUENCES RESULTING FROMPURCHASING, HOLDING OR DISPOSING OF OUR SECURITIES, INCLUDING THE APPLICABILITY AND EFFECT OF THE TAX LAWS OF ANY STATE, LOCALOR NONU.S. JURISDICTION, INCLUDING ESTATE, GIFT, AND INHERITANCE LAWS AND APPLICABLE TAX TREATIES.F. DIVIDENDS AND PAYING AGENTS.Not applicable.G. STATEMENT BY EXPERTS.None.H. DOCUMENTS ON DISPLAY.We previously filed a registration statement on Form F1 (File No. 333166056) with the SEC relating to our initial public offering in May 2010. This transition reportdoes not contain all of the information in the registration statement and the exhibits and financial statements included with the registration statement. References inthis transition report to any of our contracts, agreements or other documents are not necessarily complete, and you should refer to the exhibits attached to theregistration statement for copies of the actual contracts, agreements or documents. In addition, we will file transition reports on Form 20F and submit otherinformation under cover of Form 6K. As a foreign private issuer, we are exempt from the proxy requirements of Section 14 of the Exchange Act and our officers,directors and principal shareholders will be exempt from the insider shortswing disclosure and profit recovery rules of Section 16 of the Exchange Act. You may readand copy the registration statement, the related exhibits and other materials we file with the SEC at the SEC's public reference room in Washington, D.C. at 100 FStreet, Room 1580, N.E., Washington, D.C.20549. You can also request copies of those documents, upon payment of a duplicating fee, by writing to the SEC. Pleasecall the SEC at 1800SEC0330 for further information on the operation of the public reference rooms. The SEC also maintains an Internet site that contains reports,proxy and information statements and other information regarding issuers that file with the SEC. The website address is http://www.sec.gov. You may also request acopy of these filings, at no cost, by writing us at LAB 32, SOHO 3Q, No 9, Guanghua Road, Chaoyang District, Beijing, People’s Republic of China, 100020 ortelephoning us at (86) 1085866721.67I. SUBSIDIARY INFORMATIONFor a listing of our subsidiaries, see “Item 4. Information on the Company – C. Organizational Structure.”ITEM 11. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.Interest Rate RiskAs of December 31, 2017, we had no shortterm or longterm borrowings. If we borrow money in future periods, we may be exposed to interest rate risk. Ourexposure to market risk for changes in interest rates relates primarily to the interest income generated by our cash deposits with our banks and heldtomaturityinvestments. We have not used any derivative financial instruments in our investment portfolio. Interest earnings instruments carry a degree of interest rate risk. Wehave not been exposed, nor do we anticipate being exposed to material risks due to changes in interest rates. However, our future interest income may fall short ofexpectations due to changes in interest rates. Foreign Exchange RiskTranslation adjustments amounted to $90,671 and $387,375 gain as of the fiscal year ended December 31, 2017 and 2016, respectively. The Companytranslated balance sheet amounts with the exception of equity at December 31, 2017 at RMB 6.5342 to $1.00 as compared to RMB 6.9370 to $1.00 at December 31,2016. The Company stated equity accounts at their historical rate. The average translation rates applied to income statement accounts for the fiscal year endedDecember 31, 2017 and 2016 were RMB6.7356 and RMB 6.7153 to US$1.00, respectively. So far, the PRC government has been able to manage a stable exchange ratebetween RMB and the U.S. Dollar. Our future downward translation adjustments may occur and can be significant due to changes in such exchange rate.If we decide to convert our RMB into U.S. dollars for the purpose of making payments for dividends on our ordinary shares or for other business purposes,appreciation of the U.S. dollar against the RMB would have a negative effect on the U.S. dollar amount available to us.The PRC government imposes strict restrictions on PRC resident companies regarding converting RMB into foreign currencies and vice versa under capitalaccount transactions, such as receiving equity investments from outside of the PRC, making equity investments outside of the PRC, borrowing money from orlending money outside of the PRC, and repaying debt or remitting liquidated assets and/or accumulated profits outside of the PRC. These transactions have to beapproved by the relevant PRC government authorities, including but not limited to the commerce bureau, the tax bureau and the State Administration of ForeignExchange, or SAFE, and have to be conducted at banks entrusted by the local SAFE branch. As our business continues to grow, we may need to continuouslyfinance our PRC subsidiaries by raising capital from outside of the PRC. The restriction on converting RMB into foreign currencies, and vice versa, may limit ourability to use capital resources from outside of the PRC. Such restrictions may also limit our ability to remit profits from our PRC subsidiaries outside of the PRC,therefore potentially limiting our ability to pay dividends to our shareholders. In addition, such restrictions will limit our ability to freely transfer temporary excesscash in our or our subsidiaries’ bank accounts in and out of the PRC, therefore limiting our ability to conduct crossborder cash management activities to optimizethe utilization of our cash.InflationAlthough China has experienced an increasing inflation rate, inflation has not had a material impact on our results of operations in recent years. Accordingto the National Bureau of Statistics of China, the change in the consumer price index in China was 0.46%, (0.77%), and 1.16% in 2001, 2002 and 2003, respectively.However, in connection with a 3.9% increase in 2004, the PRC government announced measures to restrict lending and investment in China in order to reduceinflationary pressures in China’s economy. Following the government’s actions, the consumer price index decreased to 1.8% in 2005 and to 1.5% in 2006. In 2007, theconsumer price index increased to 4.8%. In response, China’s central bank, the People’s Bank of China, announced that the bank reserve ratio would rise half apercentage point to 15.5% in an effort to reduce inflation pressures. China’s consumer price index growth rate reached 8.7% year over year in 2008. In 2009 and 2010,the change in the consumer price index in China was minus 0.7% and 3.3%.China consumer price index in November 2017 was 3.8% higher than that of the same period in 2016. China consumer price index in December 2016 was2.4% higher than that of the same period in 2015. China consumer price index in December 2015 was 4.8% higher than that of the same period in 2014. Chinaconsumer price index in December 2014 was 3.3% higher than that of the same period in 2013. The results of the PRC government’s actions to combat inflation aredifficult to predict. Adverse changes in the Chinese economy, if any, will likely impact the financial performance of a variety of industries in China that use, or wouldbe candidates to use, our software products and services.68ITEM 12. DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES.A. DEBT SECURITIES.Not applicable. B. WARRANTS AND RIGHTS.Not applicable.C. OTHER SECURITIES.Not applicable.D. AMERICAN DEPOSITARY SHARES.The Bank of New York Mellon, as depositary (the “Depositary”) for the Company’s ADR facility, notified the owners and holders of the Company’s ADSsthat the ADS facility will terminate effective at 5:00 p.m. (Eastern Time) on September 19, 2018. Under the terms of the Deposit Agreement among the Company, theDepositary and the owners and holders of ADSs of the Company (the “Deposit Agreement”), owners and holders of the Company’s ADSs have until at leastJanuary 21, 2019 to surrender their ADSs to the Depositary for delivery of the underlying ordinary shares of the Company. Subsequent to January 21, 2019, underthe terms of the Deposit Agreement, the Depositary may attempt to sell any ordinary shares remaining on deposit with the Depositary. If the Depositary sells suchunderlying ordinary shares or receives value for such shares, holders must surrender their ADSs to obtain payment of the sale proceeds, net of expenses andapplicable tax and charges. We completed the voluntary delisting of our ADSs from the NASDAQ Capital Market on September 19, 2018.You may hold ADSs either (A) directly (i) by having ADSs registered in your name in the Direct Registration System, or (ii) by having an Americandepositary receipt, also referred to as an ADR, which is a certificate evidencing a specific number of ADSs, registered in your name, or (B) indirectly by holding asecurity entitlement in ADSs through your broker or other financial institution. If you hold ADSs directly, you are a registered ADS holder, also referred to as anADS holder. This description assumes you are an ADS holder. If you hold the ADSs indirectly, you must rely on the procedures of your broker or other financialinstitution to assert the rights of ADS holders described in this section. You should consult with your broker or financial institution to find out what thoseprocedures are.The Direct Registration System, or DRS, is a system administered by The Depository Trust Company, also referred to as DTC, pursuant to which thedepositary may register the ownership of uncertificated ADSs, which ownership will be confirmed by periodic statements sent by the depositary to the registeredholders of uncertificated ADSs.69As an ADS holder, you will not be treated as one of our registered shareholders and you will not have direct shareholder rights. British Virgin Island’s lawgoverns our direct shareholders’ rights. The depositary will be the holder of the shares underlying your ADSs. As a registered holder of ADSs, you will have ADSholder rights. A Deposit Agreement among us, the depositary and you, as an ADS holder, and all other persons indirectly holding ADSs, sets out ADS holder rightsas well as the rights and obligations of the depositary. New York law governs the Deposit Agreement and the ADSs.The following is a summary of the material provisions of the Deposit Agreement. For more complete information, you should read the entire DepositAgreement and the form of ADS, which contains the terms of the ADSs. The Deposit Agreement is filed as an exhibit to our registration statement filed on Form F1.You may obtain the registration statement and the attached Deposit Agreement from the SEC’s website at http://www.sec.gov. You may also obtain a copy of theDeposit Agreement at the SEC’s Public Reference Room, which is located at 100 F Street, NE, Washington, DC 20549. You may obtain information on the operationof the Public Reference Room by calling the SEC at 18007320330. Fees and ExpensesPersons depositing or withdrawing shares or ADS holders must pay:For:$5.00 (or less) per 100 ADSs (or portion of 100 ADSs)Issuance of ADSs, including issuances resulting from a distribution of shares orrights or other propertyCancellation of ADSs for the purpose of withdrawal, including if the DepositAgreement terminates$.05 (or less) per ADSAny cash distribution to ADS holdersA fee equivalent to the fee that would be payable if securities distributed to youhad been shares and the shares had been deposited for issuance of ADSsDistribution of securities distributed to holders of deposited securities whichare distributed by the depositary to ADS holders$.05 (or less) per ADSs per calendar yearDepositary servicesRegistration or transfer feesTransfer and registration of shares on our share register to or from the name ofthe depositary or its agent when you deposit or withdraw sharesExpenses of the depositaryCable, telex and facsimile transmissions (when expressly provided in the DepositAgreement) converting foreign currency to U.S. dollarsTaxes and other governmental charges the depositary or the custodian have topay on any ADS or share underlying an ADS, for example, share transfer taxes,stamp duty or withholding taxesAs necessaryAny charges incurred by the depositary or its agents for servicing the depositedsecuritiesAs necessaryPayment of TaxesHolders of our ADSs are responsible for any taxes or other governmental charges payable on their ADSs or on the deposited securities represented by anyof their ADSs. The depositary may refuse to register any transfer of a holder’s ADSs or allow withdrawal of the deposited securities represented by the ADSs untilsuch taxes or other charges are paid. It may apply payments owed to the holder or sell deposited securities represented by the ADSs to pay any taxes owed and theholder will remain liable for any deficiency. If the depositary sells deposited securities, it will, if appropriate, reduce the number of ADSs to reflect the sale and pay toADS holders any proceeds, or send to ADS holders any property, remaining after it has paid the taxes.70PART IIITEM 13. DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES.None.ITEM 14. MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS.Use of Proceeds.We completed our initial public offering on May 14, 2010 (the “IPO”), which generated net proceeds of approximately $14.6 million. All remaining cash onhand from the proceeds of our IPO was transferred to C Media Limited and its subsidiaries following the completion of the asset exchange transactions on August17, 2018.ITEM 15. CONTROLS AND PROCEDURES.Disclosure Controls and ProceduresOur Chief Executive Officer and Chief Financial Officer have reviewed and evaluated the effectiveness of our disclosure controls and procedures, whichincluded inquiries made to certain other of our employees. The term “disclosure controls and procedures,” as defined in Rules 13a15(e) and 15d15(e) under theExchange Act, means controls and other procedures of a company that are designed to ensure that information required to be disclosed by a company in thereports, such as this report, that it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in theSEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to bedisclosed by a company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the company’s management, including itsprincipal executive and principal financial officers, as appropriate to allow timely decisions regarding required disclosure. Management recognizes that any controlsand procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives and management necessarilyapplies its judgment in evaluating the costbenefit relationship of possible controls and procedures. Based on that evaluation, our Chief Executive Officer and ChiefFinancial Officer have each concluded that, as of December 31, 2017, the Company’s disclosure controls and procedures were not effective due to the materialweakness described in the “Management’s Report on Internal Control over Financial Reporting” section below.Management’s Report on Internal Control Over Financial ReportingOur management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Exchange ActRules 13a15(f) and 15d15(f). Internal control over financial reporting refers to the process designed by, or under the supervision of, our principal executive officerand principal financial officer, and effected by our Board of Directors, management and other personnel, to provide reasonable assurance regarding the reliability offinancial reporting and the preparation of financial statements for external purposes in accordance with U.S. GAAP and includes those policies and procedures that(i) pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of the assets of the Company; (ii)provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with U.S. GAAP, and thatreceipts and expenditures of the Company are being made only in accordance with authorizations of management and directors of the Company; and (iii) providereasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the Company’s assets that could have a materialeffect on the financial statements.71Any system of internal control, no matter how well designed, has inherent limitations. Therefore, even those systems determined to be effective canprovide only reasonable assurance with respect to financial statement preparation and presentation. Because of the inherent limitations of internal control, there is arisk that material misstatements may not be prevented or detected on a timely basis by internal control over financial reporting. However, these inherent limitationsare known features of the financial reporting process. Therefore, it is possible to design into the process safeguards to reduce, though not eliminate, this risk.Management assessed our internal control over financial reporting as of the year ended December 31, 2017. In making this assessment, management usedthe criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in the 2014 report entitled "Internal ControlIntegratedFramework." The COSO framework summarizes each of the components of a company’s internal control system, including (i) the control environment, (ii) riskassessment, (iii) control activities, (iv) information and communication, and (v) monitoring. Based on such assessment, management concluded that its internalcontrol over financial reporting as of December 31, 2017 was not effective because of the following material weakness:Lack of U.S. GAAP expertise. Although our accounting personnel are professional and experienced in accounting requirements and procedures generallyaccepted in the PRC, they do not have sufficient knowledge, experience and training in maintaining our books and records and preparing financial statements inaccordance with U.S. GAAP standards and SEC rules and regulations. The staff needs additional training to become experienced in U.S. GAAPbased reporting,including the skills of U.S. GAAPbased period end closing, consolidation of financial statements, and U.S. GAAP conversion.In order to address the above material weakness, our management plans to take the following steps:We will employ, as needed, outside professionals to provide key accounting personnel ongoing technical trainings to ensure their proper understanding ofU.S. GAAP and newly announced accounting standards.The Company believes the foregoing measures will remediate the identified material weakness in future periods. The Company is committed to monitoringthe effectiveness of these measures and making any changes that are necessary and appropriate.Notwithstanding the conclusion that its internal control over financial reporting was not effective as of the end of the period covered by this report, ourChief Executive Officer and Chief Financial Officer believe that the financial statements and other information contained in this report present fairly, in all materialrespects, its business, financial condition and results of operations. Nothing has come to the attention of management that causes them to believe that any materialinaccuracies or errors exist in the Company’s financial statements as of December 31, 2017.Attestation report of the registered public accounting firm.This transition report does not include an attestation report of the Company’s registered public accounting firm on internal control over financial reportingbecause the Company is a nonaccelerated filer permanently exempted from section 404(b) of the SarbanesOxley Act.Changes in Internal Control over Financial ReportingThere were no changes in the Company’s internal control over financial reporting that occurred during our fiscal year ended December 31, 2017 that hasmaterially affected or is reasonably likely to materially affect our internal control over financial reporting.ITEM 16. [RESERVED]ITEM 16A. AUDIT COMMITTEE FINANCIAL EXPERT.Our board of directors has determined that Mr. Dennis Galgano qualifies as an audit committee financial expert. Our board of directors has determined thatMessrs. Dennis Galgano, Jin Shi, Jiming Ha and Zhihao Xu meet the definition of an “independent director” under the applicable NASDAQ Rules and under Rule10A3 of the Securities Exchange Act of 1934, as amended.72ITEM 16B. CODE OF ETHICS.Our board of directors has adopted a code of business conduct and ethics applicable to our directors, officers and employees. We have posted the code onour website at http://www.luokung.com.ITEM 16C. PRINCIPAL ACCOUNTANT FEES AND SERVICES.Audit FeesThe aggregate fees billed by Moore Stephens CPA Limited for professional services rendered for the audit of our financial information disclosed in thistransition report on Form 20F was $280,000 for the two years ended December 31, 2017 and 2016.The aggregate fees billed by our previous auditor, BDO China Shu Lun Pan Certified Public Accountants LLP for professional services rendered for theaudit of our annual financial information included in our annual reports on Form 20F was $105,500 for each of the fiscal years ended September 30, 2017, 2016 and2015.Tax FeesWe did not engage our principal accountants to provide tax or related services during the last two fiscal years.All Other FeesWe did not engage our principal accountants to render services to us during the last two fiscal years, other than as reported above.ITEM 16D. EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES.Not applicable.ITEM 16E. PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS.Not applicable.ITEM 16F. CHANGE IN REGISTRANT’S CERTIFYING ACCOUNTANT.Not applicable.ITEM 16G. CORPORATE GOVERNANCE.We are incorporated in the BVI and our corporate governance practices are governed by applicable BVI law as well as our memorandum and articles ofassociation. In addition, because our ADSs are listed on NASDAQ, we are subject to NASDAQ’s corporate governance requirements. NASDAQ Listing Rule5620(a) requires each issuer to hold an annual meeting of shareholders no later than one year after the end of the issuer’s fiscal year end. However, NASDAQ ListingRule 5615(a)(3) permits a foreign private issuer like us to follow home country practices in lieu of certain requirements of Listing Rule 5600, provided that suchforeign private issuer discloses in its transition report filed with the SEC each requirement of Rule 5600 that it does not follow and describes the home countrypractice followed in lieu of such requirement. We follow home country practice with respect to annual meetings and did not hold an annual shareholder meeting inthe year ended December 31, 2017. We may, however, hold annual shareholder meetings in the future if there are significant issues that require shareholders’approvals.ITEM 16H. MINE SAFETY DISCLOSURE.Not applicable.73PART IIIITEM 17. FINANCIAL STATEMENTS.We have elected to provide financial statements and related information specified in Item 18.ITEM 18. FINANCIAL STATEMENTS.See “Index to Consolidated Financial Statements” for a list of all financial statements filed as part of this transition report. The Financial Statements arebeginning on page F1.ITEM 19. EXHIBITS.See the Exhibit Index following the signature page of this report, which is incorporated herein by reference.74SIGNATURESThe registrant hereby certifies that it meets all of the requirements for filing on Form 20F and that it has duly caused and authorized the undersigned tosign this transition report on its behalf.LUOKUNG TECHNOLOGY CORP.By:/s/ Xuesong Song Xuesong SongChief Executive Officer(principal executive officer)October 12, 201875EXHIBIT INDEXThe following documents are filed as part of this transition report on Form 20F.ExhibitNumberDescription1.1Amended and Restated Memorandum of Association and Articles of Association of Luokung Technology Corp., dated August 20, 2018, and ascurrently in effect.2.1*Deposit Agreement among the Company, depositary and holders of the American Depositary Receipts.2.2*Form of American Depositary Receipt.2.3*English translation of Entrusted Management Agreement dated December 15, 2009 between Xi’an Softech Co., Ltd., Xi’an Kingtone InformationTechnology Co., Ltd. and the shareholders of Xi’an Kingtone Information Technology Co., Ltd.3.1*English translation of Shareholder’s Voting Proxy Agreement dated December 15, 2009 between Xi’an Softech Co., Ltd., Xi’an Kingtone InformationTechnology Co., Ltd. and the shareholders of Xi’an Kingtone Information Technology Co., Ltd.4.1*English translation of Exclusive Technology Service Agreement dated December 15, 2009 between Xi’an Softech Co., Ltd. and Xi’an KingtoneInformation Technology Co., Ltd.4.2*English translation of Exclusive Option Agreement dated December 15, 2009 between Xi’an Softech Co., Ltd., Xi’an Kingtone InformationTechnology Co., Ltd. and the shareholders of Xi’an Kingtone Information Technology Co., Ltd.4.3*English translation of Equity Pledge Agreement dated December 15, 2009 between Xi’an Softech Co., Ltd., Xi’an Kingtone Information TechnologyCo., Ltd. and the shareholders of Xi’an Kingtone Information Technology Co., Ltd.4.4*English translation of Loan Agreement dated September 14, 2009 between Xi’an Kingtone Information Technology Co., Ltd. and Xian CityCommercial Bank.4.5*English translation of Mortgage Agreement dated September 14, 2009 between Xi’an Kingtone Information Technology Co., Ltd. and Xian CityCommercial Bank.4.6*English translation of Form of Employment Agreement entered into between the Company and the Company’s executive officers.4.7*2010 Omnibus Incentive Plan of the Company.4.8**English translation of Project Construction Contract dated August 10, 2010 between Xi’an Hu County Yuxing Agriculture Science & TechnologyCo., Ltd. and Xi’an Kingtone Information Technology Co., Ltd.4.9***Asset Exchange Agreement by and between C Media Limited and the Company dated as of January 25, 2018.4.10***Securities Purchase Agreement by and among Redstone YYL Management Limited and five shareholders holding majority of the shares of theCompany dated as of January 25, 2018.4.15Exclusive Business Cooperation Agreement by and between Zhongchuan Tianxia Information Technology (Shenzhen) Co., Ltd., and Beijing MobileVision Technology Co., Ltd., dated August 31, 2015.764.16Exclusive Option Agreement by and among Zhongchuan Tianxia Information Technology (Shenzhen) Co., Ltd., Xuesong Song, Weili Chen, PingWang, Donglai Liu, and Beijing Mobile Vision Technology Co., Ltd., dated August 31, 2015.4.17Equity Interest Pledge Agreement by and among Zhongchuan Tianxia Information Technology (Shenzhen) Co., Ltd., Xuesong Song, Weili Chen, PingWang, Donglai Liu, and Beijing Mobile Vision Technology Co., Ltd., dated August 31, 2015.4.18Addendum to Asset Exchange Agreement by and among the Company, Topsky Infotech Holdings Pte Ltd. and C Media Limited, dated October 3,2018. Incorporated by reference to the Company’s Current Report on Form 6K filed on October 4, 2018.4.19Stock Purchase Agreement, dated August 25, 2018, by and among the Company, LK Technology Ltd., and the shareholders listedtherein. Incorporated by reference to the Company’s Current Report on Form 6K filed on August 27, 2018.4.20Power of Attorney by Weili Chen, dated August 31, 2015.4.21Power of Attorney by Ping Wang, dated August 31, 2015.4.22Power of Attorney by Donglai Liu, dated August 31, 2015.4.23Power of Attorney by Xuesong Song, dated August 31, 2015.8.1List of Subsidiaries and Consolidated Variable Interest Entities10.1Employment Agreement, dated August 19, 2018, between Luokung Technology Corp. and Xuesong Song.†10.2Employment Agreement, dated August 19, 2018, by and between Luokung Technology Corp. and Jie Yu.†12.1Certification of Chief Executive Officer required by Rule 13a14(a).12.2Certification of Chief Financial Officer required by Rule 13a14(a).13.1Certification of Chief Executive Officer required by Rule 13a14(a).13.2Certification of Chief Financial Officer required by Rule 13a14(a).101.INSXBRL Instance Document.101.SCHXBRL Taxonomy Extension Schema Document.101.CALXBRL Taxonomy Extension Calculation Linkbase Document.101.DEFXBRL Taxonomy Extension Definition Linkbase Document.101.LABXBRL Taxonomy Extension Label Linkbase Document.101.PREXBRL Taxonomy Extension Presentation Linkbase Document.*Previously filed as an exhibit to the Company’s Registration Statement on Form F1 (Reg. No. 333166056) filed with the Commission and incorporated hereinby reference.**Previously filed as exhibits to the Company’s Transition Report on Form 20F filed with the Commission on January 20, 2011 and incorporated herein byreference.***Previously filed as exhibits to the Company’s Annual Report on Form 20F filed with the Commission on February 9, 2018 and incorporated herein byreference.†Indicates management contract or compensatory plan, contract or arrangement.77LK Technology Ltd. and SubsidiariesCONSOLIDATED FINANCIAL STATEMENTSTABLE OF CONTENTSPage(s)Report of Independent Registered Public Accounting FirmF2Consolidated Financial StatementsConsolidated Balance SheetsF3Consolidated Statements of Operations and Comprehensive LossF4application.Chuang (Vincent) Tao was appointed as a member of the Board effective on August 25, 2018. Dr. Tao was the Chairman of SuperEngine Suzhou from 2014to 2017. Dr. Tao has been the president of the Seasky Angel Investment Alliance of Shanghai since 2015. Dr. Tao received his Bachelor Degree of geographicinformation and telemetry from Wuhan University in China in 1990 and received his Ph.D. from University of Calgary, Canada in 1997.Dennis Galgano was appointed as a director of the Company following the consummation of the asset exchange agreement. He was a registered consultantwith Morgan Joseph Triartisan LLC from November 2016 until October 2017, and previously served as vice chairman and head of international investment bankingfor Morgan Joseph Triartisan LLC, which is a registered broker dealer engaged in the investment banking and financial advisory industry. Mr. Galgano received aB.S. degree in Chemistry from St. John’s University and an M.B.A. from The Wharton School in 1972.Jin Shi was appointed as a director of the Company following the consummation of the asset exchange transactions. Mr. Shi has served as the managingpartner of Chum Capital Group, a merchant bank focused on helping Chinese growth companies to access global capital, since January 2013. Mr. Shi has also servedas a director of Seven Stars Cloud Group, Inc. (NASDAQ: SSC), a premium video on demand service provider, since January 2014, and joined the audit committee ofits board of directors in March 2016. He also served as a director and member of the audit committee of Pingtan Marine Enterprise, Ltd. (NASDAQ: PME), a marineenterprise group primarily engaged in ocean fishing through its subsidiaries. Mr. Shi received an EMBA degree from the Guanghua Management School of BeijingUniversity, and a Bachelor’s degree of science in Chemical Engineering from Tianjin University.Jiming Ha was appointed as a director of the Company following the consummation of the asset exchange agreement, and has also served as a seniorresearch fellow for the China Finance 40 Forum since March 1, 2018, and previously served as a managing director of Goldman Sachs from January 2017 to April2017. Mr. Ha served as a vice chairman and chief investment strategist of the Investment Strategy Group for Private Wealth Management at Goldman Sachs from2010 to January 2017. Mr. Ha holds a PhD in Economics from the University of Kansas and Master’s and Bachelor’s degrees of science from Fudan University.Zhihao Xu was appointed as a director of the Company following the consummation of the asset exchange transactions. Mr. Xu has served as the chiefexecutive officer of Geely Group Co., Ltd., in Hangzhou, China, since December 2017, and previously served as the chairman and chief executive officer of BeijingDingchengrenhe Investment Co., Ltd., a funds management company, from January 2017 to December 2017. Mr. Xu served as the chairman of president of HNAUSOLV CO., LTD., and the chief innovation officer of HNA Logistics Group from January 2014 to December 2016, and prior to that as the chairman of GopayInnovation Technology Co. Ltd., an online payment system operator supporting online money transfers, from April 2012 to January 2014. Mr. Xu graduated from theBusiness School of Renmin University of China and from the Wudaokou Finance College of Tsinghua University with a fund qualification certificate and securitiesqualification certificate.B. COMPENSATION.Compensation of Directors and Executive OfficersFor the ninemonth transition period ended September 30, 2018 and the fiscal year ended December 31, 2017, we did not pay any cash compensation to ourexecutive officers of LK Technology Ltd. and a to our directors for serving on our board of directors of LK Technology Ltd.37Other than nonemployee directors, we do not intend to compensate directors for serving on our board of directors or any of its committees. We do,however, intend to reimburse each member of our board of directors for outofpocket expenses incurred by each director in connection with attending meetings ofthe board of directors and its committees.AdministrationThe Incentive Plan is administered by our board of directors, or at the discretion of the board, by our compensation committee. Our board of directors hasdelegated authority to our compensation committee to administer the Incentive Plan. Subject to the terms of the Incentive Plan, the compensation committee mayselect participants to receive awards, determine the types of awards and terms and conditions of awards, and interpret provisions of the Incentive Plan.The ordinary shares issued or to be issued under the Incentive Plan consist of authorized but unissued shares. If any ordinary shares covered by an awardare not purchased or are forfeited, or if an award otherwise terminates without delivery of any ordinary shares, then the number of ordinary shares counted againstthe aggregate number of ordinary shares available under the plan with respect to the award will, to the extent of any such forfeiture or termination, again be availablefor making awards under the Incentive Plan.EligibilityAwards may be made under the Incentive Plan to our employees, officers, directors, consultants or advisers or to any of our affiliates, and to any otherindividual whose participation in the Incentive Plan is determined to be in our best interests by our board of directors.Amendment or Termination of the PlanOur board of directors may terminate or amend the Incentive Plan at any time and for any reason. No amendment, however, may adversely impair the rightsof grantees with respect to outstanding awards. The Incentive Plan has a term of ten years. Amendments will be submitted for shareholder approval to the extentrequired by applicable stock exchange listing requirements or other applicable laws.OptionsThe Incentive Plan permits the granting of options to purchase ordinary shares intended to qualify as incentive share options under the Internal RevenueCode and share options that do not qualify as incentive share options, or nonqualified share options.The exercise price of each share option may not be less than 100% of the fair market value of our ADSs representing ordinary shares on the date of grant.In the case of certain 10% shareholders who receive incentive share options, the exercise price may not be less than 110% of the fair market value of our ADSsrepresenting ordinary shares on the date of grant. An exception to these requirements is made for options that we grant in substitution for options held byemployees of companies that we acquire. In such a case the exercise price is adjusted to preserve the economic value of the employee’s share option from his or herformer employer.The term of each share option is fixed by the compensation committee and may not exceed ten years from the date of grant. The compensation committeedetermines at what time or times each option may be exercised and the period of time, if any, after retirement, death, disability or termination of employment duringwhich options may be exercised.Options may be made exercisable in installments. The award agreement provides the vesting of the options. Exercisability of options may be accelerated bythe compensation committee.38In general, an optionee may pay the exercise price of an option by (1) cash or check (in U.S. dollars or Renminbi or other local currency as approved by thecompensation committee), (2) ordinary shares held for such period of time as may be required by the compensation committee, (3) delivery of a notice of a marketorder with a broker with respect to ordinary shares then issuable upon exercise of an option, and that the broker has been directed to pay us a sufficient portion ofnet proceeds of the sale in satisfaction of the exercise price, provided that payment of such proceeds is then made to us upon settlement of such sale, (4) otherproperty acceptable to the compensation committee with a fair market value equal to the exercise price, (5) cashless exercise or (6) any combination of the foregoing.Share options granted under the Incentive Plan may not be sold, transferred, pledged, or assigned other than by will or under applicable laws of descentand distribution. However, we may permit limited transfers of nonqualified options for the benefit of immediate family members of grantees to help with estateplanning concerns or pursuant to a domestic relations order in settlement of marital property rights.Other AwardsThe compensation committee may also award under the Incentive Plan:1.ordinary shares subject to restrictions;2.deferred ordinary shares, credited as deferred ordinary share units, but ultimately payable in the form of unrestricted ordinary shares inaccordance with the terms of the grant or with the participant’s deferral election;3.ordinary share units subject to restrictions;4.unrestricted ordinary shares, which are ordinary shares issued at no cost or for a purchase price determined by the compensation committee whichare free from any restrictions under the 2011 Omnibus Incentive Plan;5.dividend equivalent rights entitling the grantee to receive credits for dividends that would be paid if the grantee had held a specified number ofordinary shares; or6.a right to receive a number of ordinary shares or, in the discretion of the compensation committee, an amount in cash or a combination of ordinaryshares and cash, based on the increase in the fair market value of the ADSs representing ordinary shares underlying the right during a statedperiod specified by the compensation committee.Effect of Certain Corporate TransactionsCertain change of control transactions involving us may cause awards granted under the Incentive Plan to vest, unless the awards are continued orsubstituted for by the surviving company in connection with the corporate transaction.Unless otherwise provided in the appropriate option agreement on the date of grant or provided by our board of directors thereafter with the consent of thegrantee, options granted under the Incentive Plan become exercisable in full following (1) a dissolution of our company or a merger, consolidation or reorganizationof our company with one or more other entities in which we are not the surviving entity, (2) a sale of substantially all of our assets to another person or entity, or (3)any transaction (including without limitation a merger or reorganization in which we are the surviving entity) which results in any person or entity owning 50% ormore of the combined voting power of all classes of our shares.39Adjustments for Dividends and Similar EventsThe compensation committee will make appropriate adjustments in outstanding awards and the number of ordinary shares available for issuance under theIncentive Plan, including the individual limitations on awards, to reflect ordinary share dividends, stock splits and other similar events.C. BOARD PRACTICES.Board of DirectorsOur board of directors consists of six members being Messrs. Xuesong Song, Kegang Peng, Dennis Galgano, Jin Shi, Jiming Ha and Zhiaho Xu. Ourdirectors hold office until our annual meeting of shareholders, where their successors will be duly elected and qualified, or until the directors’ death, resignation orremoval, whichever is earlier. Our directors are not subject to a term of office and hold office until their resignation, death or incapacity or until their respectivesuccessors have been elected and qualified in accordance with our fourth amended and restated memorandum of association and articles of association. A directorwill be removed from office if, among other things, the director (1) becomes bankrupt, (2) dies or becomes of unsound mind, or (3) is absent from meetings of ourboard of directors for six consecutive months without leave and our board of directors resolves that the office is vacated. A director is not entitled to any specialbenefits upon termination of service with the company.Director IndependenceOur board of directors consists of six members; Messrs. Dennis Galgano, Jin Shi, Jiming Ha and Zhihao Xu have been determined by us to be independentdirectors within the meaning of the independent director guidelines of the NASDAQ Corporate Governance Rules (the “NASDAQ Rules”).Committees of Our Board of DirectorsTo enhance our corporate governance, we established three committees under our board of directors: an audit committee, a compensation committee, and anominating and corporate governance committee. We have adopted a charter for each of these committees. The committees have the following functions andmembers.Audit CommitteeOur audit committee reports to our board of directors regarding the appointment of our independent public accountants, the scope and results of ourannual audits, compliance with our accounting and financial policies and management’s procedures and policies relating to the adequacy of our internal accountingcontrols. Our audit committee consists of Messrs. Dennis Galgano, Jin Shi, and Jiming Ha. Mr. Galgano, having accounting and financial management expertise,serves as the chairman of the audit committee and is an “audit committee financial expert” as defined by the rules and regulations of the SEC. Our board of directorshas determined that each of these persons meet the definition of an “independent director” under the applicable NASDAQ Rules and under Rule 10A3 of theSecurities Exchange Act of 1934, as amended (the “Exchange Act”).Our audit committee is responsible for, among other things:●the appointment, evaluation, compensation, oversight and termination of the work of our independent auditor (including resolution of disagreementsbetween management and the independent auditor regarding financial reporting);●an annual performance evaluation of the audit committee;●establishing procedures for the receipt, retention and treatment of complaints regarding accounting, internal accounting controls, auditing matters orpotential violations of law, and the confidential, anonymous submission by our employees of concerns regarding questionable accounting or auditingmatters or potential violations of law;40●ensuring that it receives an transition report from our independent auditor describing our internal control procedures and any steps taken to deal withmaterial control deficiencies and attesting to the auditor’s independence and describing all relationships between the auditor and us;●reviewing our annual audited financial statements and quarterly financial statements with management and our independent auditor;●reviewing and approving all proposed related party transactions;●reviewing our policies with respect to risk assessment and risk management;●meeting separately and periodically with management and our independent auditor; and●reporting regularly to our board of directors.Compensation CommitteeOur compensation committee assists the board of directors in reviewing and approving the compensation structure of our directors and executive officers,including all forms of compensation to be provided to our directors and executive officers. In addition, the compensation committee reviews share compensationarrangements for all of our other employees. Members of the compensation committee are not prohibited from direct involvement in determining their owncompensation. Our chief executive officer is not permitted to be present at any committee meeting during which his or her compensation is deliberated. Ourcompensation committee consists of Dennis Galgano and Jin Shi, with Mr. Shi serving as the chairman of the compensation committee. Our board of directors hasdetermined that each of these persons meet the definition of “independent director” under the applicable requirements of the NASDAQ Rules.Our compensation committee is responsible for, among other things:●reviewing and approving corporate goals and objectives relevant to the compensation of our chief executive officer, evaluating the performance of ourchief executive officer in light of those goals and objectives and setting the compensation level of our chief executive officer based on this evaluation;●reviewing and making recommendations to the board with respect to the compensation of our executives, incentive compensation and equitybasedplans that are subject to board approval; and●providing annual performance evaluations of the compensation committee.Nominating and Corporate Governance CommitteeOur nominating and corporate governance committee assists the board of directors in identifying and selecting or recommending individuals qualified tobecome our directors, developing and recommending corporate governance principles and overseeing the evaluation of our board of directors and management. Ournominating and corporate governance committee consists of Jiming Ha and Zhihao Xue, with Mr. Ha serving as the chairman of the nominating and corporategovernance committee. Our board of directors has determined that each of these persons meet the definition of “independent director” under the applicablerequirements of the NASDAQ Rules.Our nominating and corporate governance committee is responsible for, among other things:●selecting and recommending to our board nominees for election or reelection to our board, or for appointment to fill any vacancy;●reviewing annually with our board the current composition of the board of directors with regards to characteristics such as independence, age, skills,experience and availability of service to us;●selecting and recommending to our board the names of directors to serve as members of the audit committee and the compensation committee, as wellas the nominating and corporate governance committee itself; advising our board of directors periodically with regards to significant developments inthe law and practice of corporate governance as well as our compliance with applicable laws and regulations, and making recommendations to ourboard of directors on all matters of corporate governance and on any remedial action to be taken; and●monitoring compliance with our code of business conduct and ethics, including reviewing the adequacy and effectiveness of our procedures to ensureproper compliance.41Code of Business Conduct and EthicsOur board of directors adopted a code of business conduct and ethics applicable to our directors, officers and employees.Duties of DirectorsUnder British Virgin Islands law, our directors have a duty to act honestly, in good faith and with a view to our best interests. Our directors also have a dutyto exercise care, diligence and skills that a reasonably prudent person would exercise in comparable circumstances. In fulfilling their duty of care to us, our directorsmust ensure compliance with our memorandum of association and articles of association. We have the right to seek damages if a duty owed by our directors isbreached.The functions and powers of our board of directors include, among others:●appointing officers and determining the term of office of the officers;●authorizing the payment of donations to religious, charitable, public or other bodies, clubs, funds or associations as deemed advisable;●exercising the borrowing powers of the company and mortgaging the property of the company;●executing cheques, promissory notes and other negotiable instruments on behalf of the company; and●maintaining or registering a register of mortgages, charges or other encumbrances of the company.Remuneration and BorrowingThe directors may receive such remuneration as our board of directors may determine from time to time. Each director is entitled to be repaid or prepaid alltraveling, hotel and incidental expenses reasonably incurred or expected to be incurred in attending meetings of our board of directors or committees of our board ofdirectors or shareholder meetings or otherwise in connection with the discharge of his or her duties as a director. The compensation committee will assist thedirectors in reviewing and approving the compensation structure for the directors.Our board of directors may exercise all the powers of the company to borrow money and to mortgage or charge our undertakings and property or any partthereof, to issue debentures, debenture stock and other securities whenever money is borrowed or as security for any debt, liability or obligation of the company orof any third party.QualificationA director is not required to hold shares as a qualification to office.42Limitation on Liability and Other Indemnification MattersBritish Virgin Islands law does not limit the extent to which a company’s memorandum of association and articles of association may provide forindemnification of officers and directors, except to the extent any such provision may be held by the British Virgin Islands courts to be contrary to public policy,such as to provide indemnification against civil fraud or the consequences of committing a crime.Under our memorandum of association and articles of association, we may indemnify our directors, officers and liquidators against all expenses, includinglegal fees, and against all judgments, fines and amounts paid in settlement and reasonably incurred in connection with civil, criminal, administrative or investigativeproceedings to which they are party or are threatened to be made a party by reason of their acting as our director, officer or liquidator. To be entitled toindemnification, these persons must have acted honestly and in good faith with a view to the best interest of the company and, in the case of criminal proceedings,they must have had no reasonable cause to believe their conduct was unlawful.Compensation Committee Interlocks and Insider ParticipationNone of the members of our compensation committee is an officer or employee of our company. None of our executive officers currently serves, or in thepast year has served, as a member of the board of directors or compensation committee of any entity that has one or more executive officers serving on our board ofdirectors or compensation committee.Employment AgreementsOn August 19, 2018, the Company entered into an Employment Agreement (the “Song Agreement”) with Mr. Xuesong Song, to serve as the ChiefExecutive Officer of the Company for a fouryear term, subject to renewal. Under the terms of the Song Agreement, Mr. Song will receive no salary for his servicesbut will be eligible for an annual cash bonus in the Board’s sole discretion.On August 19, 2018, the Company entered into an Employment Agreement (the “Yu Agreement”) with Mr. Jie Yu, to serve as the Chief Financial Officer ofthe Company for a fouryear term, subject to renewal. Under the terms of the Yu Agreement, Mr. Yu will receive an annual salary of RMB700,000, and will be eligiblefor an annual cash bonus in the Board’s sole discretion.D. EMPLOYEES.As of September 30, 2018 and December 31, 2017, we had a total of 107 and 37 fulltime employees, including 48 and 13 in research and development, 9 and 2in sales and marketing and the rest in a variety of other divisions, respectively. All of our employees are fulltime employees. None of our employees is currentlyrepresented by a union and/or collective bargaining agreements. We believe that we have good relations with our employees and since our inception we have hadno history of work stoppages or union organizing campaigns.E. SHARE OWNERSHIP.The following table provides information as to the beneficial ownership of our ordinary shares as of October 10, 2018, by the persons listed. Beneficialownership of shares is determined under the rules of the SEC and generally includes any shares over which a person exercises sole or shared voting or investmentpower. For purposes of the following table, a person is deemed to have beneficial ownership of any ordinary shares if such person has the right to acquire suchshares within 60 days of October 10, 2018. For purposes of computing the percentage of outstanding shares held by each person, any shares that such person hasthe right to acquire within 60 days after of October 10, 2018 are deemed to be outstanding, but are not deemed to be outstanding for the purpose of computing thepercentage ownership of any other person. Except as otherwise noted, the persons named in the table have sole voting and investment power with respect to all ofthe ordinary shares beneficially owned by them. Unless otherwise indicated, the address of each person listed is c/o Luokung Technologies, LAB 32, SOHO 3Q, No9, Guanghua Road, Chaoyang District, Beijing, People’s Republic of China.43Percentage ownership in the following table is based on 199,317,558 ordinary shares outstanding on October 10, 2018.Number ofsharesPercent ofclassDirectors and named executive officersCharm Dragon International Limited (1)4,030,8822.03%Xuesong Song, Chairman, Chief Executive Officer and Director(2)38,156,43019.30%Kegang Peng, Vice President and Director (3)17,231,9558.71%Dennis Galgano, Director75,796*%Jin Shi, DirectorJiming Ha, DirectorZhihao Xu, Director (4)7,579,1843.83%Dongpu Zhang, President (5)2,321,7921.17%Chuang Tao, Director (6)1,221,996*%Directors and executive officers as a group (10 persons)66,587,15233.69%(1)Charm Dragon International Limited is a British Virgin Islands company controlled by Mr. Xuesong Song.(2)Consists of (i) 4,030,882 shares owned directly by Charm Dragon International Limited, a British Virgin Islands company and (ii) 22,624,793 shares owneddirectly by Bravo First Development Limited, a British Virgin Islands company. Mr. Xuesong Song is the controlling shareholder of Bravo First DevelopmentLimited. Mr. Xuesong Song is the sole director of Charm Dragon International Limited.(3)Consists of 17,231,955 shares owned directly by Plenty Prestige Enterprises Limited, a British Virgin Islands company. Mr. Kegang Peng is the sole director ofPlenty Prestige Enterprises Limited.(4)Consists of 7,579,184 shares directly owned by Geely Group Limited., a Chinese company. Mr. Zhihao Xu is the Chief Executive Officer of Geely GroupLimited.(5)Consists of 2,321,792 shares owned directly by Genoa Peak Limited, a British Virgin Islands company. Mr. Dongpu Zhang controls Genoa Peak Limited.(6)Consists of 1,221,996 shares owned directly by Globalearth Holdings Limited, a British Virgin Islands company. Mr. Chuang Tao controls Globalearth HoldingsLimited.*Represents less than 1% of shares outstandingITEM 7. MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS.A. MAJOR SHAREHOLDERSPlease refer to Item 6.E “Directors, Senior Management and Employees — Share Ownership.”To our knowledge, (A) we are not directly or indirectly owned or controlled by (i) another corporation or (ii) any foreign government and (B) there are noarrangements (including any announced or expected takeover bid), the operation of which may at a subsequent date result in a change in our control.The voting rights of our major shareholders do not differ from the voting rights of other holders of the same class of shares.44B. RELATED PARTY TRANSACTIONS. BUSINESS RELATIONSHIPS.Our subsidiaries, consolidated affiliated entities, and the subsidiaries of the consolidated affiliated entities have engaged, during the ordinary course ofbusiness, in a number of customary transactions with each other. All of these intercompany balances have been eliminated in consolidation.As of December 31, 2017, we had amounts due from related parties, C Media Limited and Ya Tuo Ji International Consultancy (Beijing) Limited, in theamounts of $11.8 million and $0.2 million, respectively. These amounts due from related parties are short term in nature, noninterest bearing, unsecured andrepayable on demand.As of December 31, 2017, we had amounts due to related parties, Mr. Xuesong Song, our chairman and chief executive officer, Thumb Beijing Branch andThumb Shenzhen Branch, in the amounts of $2.9 million, $0.6 million and $0.03 million, respectively. These amounts due to related parties are short term in nature,noninterest bearing, unsecured and payable on demand.We are party to a series of control agreements with Beijing Zhong Chuan Shi Xun. In addition, our chief executive officer, Mr. Xuesong Song, serves as andofficer of Beijing Zhong Chuan Shi Xun and is a shareholder of Beijing Zhong Chuan Shi Xun. The following table sets forth the relationship of Mr. Song withBeijing Zhong Chuan Shi Xun:NameRelationship withLuokung TechnologyRelationship withBeijing Zhong Chuan Shi XunPercentageOwnership Interest inBeijing Zhong Chuan Shi XunXuesong SongChief Executive OfficerChief Executive Officer61.83%C. INTERESTS OF EXPERTS AND COUNSEL.None.ITEM 8. FINANCIAL INFORMATION.A. CONSOLIDATED STATEMENTS AND OTHER FINANCIAL INFORMATION.See “Item 18. Financial Statements.”Legal ProceedingsTo our knowledge, other than as described below there are no material legal proceedings threatened against us. From time to time, we may be subject tovarious claims and legal actions arising in the ordinary course of business. Following the consummation of the AEA, we became successor in interest to the legalproceedings described below.Litigation with Shanghai Fusheng Weier Intelligent Control Technology Co., Ltd.On January 22, 2016, Zhong Chuan Rui You and Shanghai Fusheng Weier Intelligent Control Technology Co., Ltd. (“Fusheng Weier”) signed a contract forequipment of $1,652,842 (RMB10,800,000). Since Zhong Chuan Rui You did not make the payments of $1,126,381 (RMB7,360,000) on the due dates, Fusheng Weierfiled a lawsuit against Zhong Chuan Rui You in Shanghai Xuhui District People's Court on October 8, 2016. On March 9, 2017, Xuhui District People's Court issuedthe verdict requiring Zhong Chuan Rui You to pay the overdue debts. In August 2017, C Media Limited made the payment of $512,075 (RMB3,346,000). Theremaining balance has been accrued in accounts payable. The payment schedule for the remaining balance is being negotiated by the two parties. On February 5,2018, a hearing was held adding Zhong Chuan Shi Xun as a defendant. The Group plans to settle the remaining balance within one year.45Lawsuit with Gansu Jinlun Culture Media Co., Ltd.On August 22, 2014, Zhong Chuan Rui You and Gansu Jinlun Culture Media Co., Ltd. (“Gansu Jinlun”) signed a “Lanzhou Railway Bureau AirconditionedTrain WiFi Network System Advertising Operation Rights Agreement” for advertising on 72 trains of $1,467,880 (RMB9,604,633). Due to the dispute on theproject implementation, Zhong Chuan Rui You did not pay the advertising fee. On August 23, 2017, Gansu Jinlun filed a lawsuit with Gansu Intermediate People'sCourt. On December 19, 2017, Gansu Intermediate People's Court issued a verdict, ruling that Zhong Chuan Rui You settle the overdue advertising fee. Since only 18out of 72 trains have been installed with Wifi network system, Zhong Chuan Rui You disputed and appealed to the verdict. The next court trial date has not yet beendetermined. C Media and Gansu Jinlun are negotiating a potential settlement to resume the contract. According to the legal counsel, it is probable that the settlementwill amount to approximately $459,000 (RMB3,000,000); therefore, this amount has been accrued in accounts payable as at December 31, 2017.Litigation with Shenzhen Hua Xun Fang Zhou Technology Co., Ltd.On June 16, 2015, Zhong Chuan Rui You signed a cooperation agreement with Shenzhen Hua Xun Fang Zhou Technology Co., Ltd. (“Shenzhen Hua Xun”)and Xuesong Song, a major shareholder of C Media Limited. Pursuant to this agreement, Zhong Chuan Rui You procures equipment from Shenzhen Hua Xun.Xuesong Song acts as a joint liability guarantor for the entire debts of Zhong Chuan Rui You under this agreement. As Zhong Chuan Rui You did not make thepayments on the due dates, Shenzhen Hua Xun filed a lawsuit with Shenzhen Baoan District People's Court on May 31, 2016. On November 1, 2016, Zhong ChuanRui You, Xuesong Song and Shenzhen Hua Xun reached a settlement in Shenzhen Baoan District People's Court to settle $1,735,389 (RMB11,355,000) in fourinstalments. On December 30, 2017, the debt was assigned to C Media Limited.Dividend PolicyWe currently intend to retain all of our available funds and future earnings for use in the operation and expansion of our business and do not anticipatepaying cash dividends in the foreseeable future. Under the terms of our Amended and Restated Memorandum and Articles of Association the declaration andpayment of any dividends in the future will be determined by our board of directors, in its discretion, and will depend on a number of factors, including our earnings,capital requirements and overall financial condition and our ability to receive dividends from our subsidiaries. If we pay any dividends, we will pay our ADS holders’dividends with respect to their underlying shares to the same extent as holders of our ordinary shares, subject to the terms of the deposit agreement, including thefees and expenses payable thereunder. Cash dividends on our ordinary shares, if any, will be paid in U.S. dollars.Our ability to receive dividends from our subsidiaries may limit our ability to pay dividends on our ordinary shares. See Risk Factors – Risks Related toDoing Business in China – Our holding company structure may limit the payment of dividends” and “Item 10. Additional Information – D. Exchange Controls –Dividend Distribution”.B. SIGNIFICANT CHANGES.N/AITEM 9. THE OFFER AND LISTINGA. OFFER AND LISTING DETAILS.Markets and Share Price HistoryOur ordinary shares are not currently listed on any trading market. Our American Depository Shares (“ADSs”) were voluntarily delisted from the NASDAQCapital Market on September 19, 2018. We have applied to NASDAQ for the listing of our ordinary shares on the NASDAQ Capital Market and received an approvalfor listing of Ordinary Shares on August 6, 2018, and as of the date of this transition report, that application and approval are currently under review.46The table below sets forth the high and low reported sales prices in dollars of our ordinary shares, which are represented by ADSs, as reported byNASDAQ in the periods as indicated:ADSHighLowAnnual Highs and Lows (as of the fiscal year end 09/30 for the five most recent full financial years)*20175.592.67201610.21.62Quarterly Highs and Lows (for the two most recent full financial years and any subsequent period, based on calendarquarter end)*2018Third Quarter8.006.30Second Quarter8.824.25First Quarter6.403.702017Fourth Quarter5.592.91Third Quarter3.992.67Second Quarter4.063.07First Quarter5.152.832016Fourth Quarter6.594.20Third Quarter10.201.62Second Quarter3.101.97First Quarter3.602.12Monthly Highs and Lows (for the most recent six months)September 20188.006.41August 20187.706.63July 20187.506.30June 20188.827.55May 20187.805.92April 20187.454.25*The Company effected a 1for10 reverse stock split of its ordinary shares on November 6, 2012 (the “Reverse Split”). The ratio between each AmericanDepositary Share (“ADS”) and its underlying ordinary share postReverse Split remains the same, namely, one ADR remains to represent one ordinary sharepost the Reverse Split. The price listed here after November 6, 2012 reflected the effect from the Reverse Split.B. PLAN OF DISTRIBUTION.Not Applicable.C. MARKETS.Our ordinary shares are not currently listed on any trading market. Our ADSs were voluntarily delisted from the NASDAQ Capital Market on September 19,2018. We have applied to NASDAQ for the listing of our ordinary shares on the NASDAQ Capital Market and received an approval for listing of Ordinary Shares onAugust 6, 2018, and as of the date of this transition report, that application and approval are currently under review.47D. SELLING SHAREHOLDERS.Not applicable.E. DILUTION.Not applicable.F. EXPENSES OF THE ISSUE.Not applicable.ITEM 10. ADDITIONAL INFORMATION.A. SHARE CAPITALNot applicable.B. MEMORANDUM AND ARTICLES OF ASSOCIATIONWe are a British Virgin Islands company incorporated with limited liability and our affairs are governed by the provisions of our memorandum of associationand articles of association, as amended and restated from time to time, and by the provisions of applicable British Virgin Islands law.Our memorandum of association and articles of association authorize the issuance of up to 251,000,000 shares, which are designated into (i) 250,000,000 ofordinary shares of the Company (“Ordinary Shares”), and (ii) 1,000,000 preferred shares of the Company (“Preferred Shares”), in each case with the rights,preferences and privileges as set out in the memorandum and articles of association of the Company.Please see below for a description of our ADSs under “Item 12. Description of Securities Other Than Equity Securities – D. American Depository Shares.”The following is a summary of the material provisions of our ordinary shares and our memorandum of association and articles of association.Ordinary SharesAll of our issued and outstanding ordinary shares are fully paid and nonassessable. Holders of our ordinary shares who are nonresidents of the BritishVirgin Islands may freely hold and vote their shares.Subject to the memorandum and articles of association (and, for greater clarity, without prejudice to any special rights conferred thereby on the holders ofany other shares), an Ordinary Share of the Company confers on the holder:(a)the right to one vote per Ordinary Share at a meeting of the members or on any resolution of members;(b)the right to an equal share in any distribution paid by the Company; and(c)the right to an equal share in the distribution of the surplus assets of the Company on a winding up;48Subject to the memorandum and articles of association (and, for greater clarity, without prejudice to any special rights conferred thereby on the holders ofany other shares), a Preferred Share of the Company confers on the holder:(a)the right to 399 votes per Preferred Share at a meeting of the members or on any resolution of members;(b)the right to an equal share in any distribution paid by the Company;(c)the right to an equal share in the distribution of the surplus assets of the Company on a winding up;(d)be freely transferable, in whole or in part, by Mr. Xuesong Song to any third party through one or more Private Transactions, subject toApplicable Law; and(e)be freely transferable, in whole or in part, by Mr. Xuesong Song to any third party through one or more Public Transactions, subject to ApplicableLaw and Automatic Conversion of such Preferred Share(s) into Ordinary Share(s).Each Preferred Share shall be automatically converted at any time after issue and without the payment of any additional sum into an equal number of fullypaid Ordinary Shares upon the conclusion of any transfer by Mr. Xuesong Song to any third party through one or more Public Transactions.Limitation on Liability and Indemnification MattersUnder British Virgin Islands law, each of our directors and officers, in performing his or her functions, is required to act honestly and in good faith with aview to our best interests and exercise the care, diligence and skill that a reasonably prudent person would exercise in comparable circumstances. Our memorandumof association and articles of association provide that, to the fullest extent permitted by British Virgin Islands law or any other applicable laws, our directors will notbe personally liable to us or our shareholders for any acts or omissions in the performance of their duties. Such limitation of liability does not affect the availabilityof equitable remedies such as injunctive relief or rescission. These provisions will not limit the liability of directors under United States federal securities laws.We may indemnify any of our directors or anyone serving at our request as a director of another entity against all expenses, including legal fees, andagainst all judgments, fines and amounts paid in settlement and reasonably incurred in connection with legal, administrative or investigative proceedings. We mayonly indemnify a director if he or she acted honestly and in good faith with the view to our best interests and, in the case of criminal proceedings, the director hadno reasonable cause to believe that his or her conduct was unlawful. The decision of our board of directors as to whether the director acted honestly and in goodfaith with a view to our best interests and as to whether the director had no reasonable cause to believe that his or her conduct was unlawful, is in the absence offraud sufficient for the purposes of indemnification, unless a question of law is involved. The termination of any proceedings by any judgment, order, settlement,conviction or the entry of no plea does not, by itself, create a presumption that a director did not act honestly and in good faith and with a view to our best interestsor that the director had reasonable cause to believe that his or her conduct was unlawful. If a director to be indemnified has been successful in defense of anyproceedings referred to above, the director is entitled to be indemnified against all expenses, including legal fees, and against all judgments, fines and amounts paidin settlement and reasonably incurred by the director or officer in connection with the proceedings.We may purchase and maintain insurance in relation to any of our directors or officers against any liability asserted against the directors or officers andincurred by the directors or officers in that capacity, whether or not we have or would have had the power to indemnify the directors or officers against the liabilityas provided in our memorandum of association and articles of association.Insofar as indemnification for liabilities arising under the Securities Act may be permitted for our directors or officers under the foregoing provisions, wehave been informed that in the opinion of the Securities and Exchange Commission, such indemnification is against public policy as expressed in the Securities Actand is therefore unenforceable as a matter of United States law.49Differences in Corporate LawWe were incorporated under, and are governed by, the laws of the British Virgin Islands. The corporate statutes of the State of Delaware and the BritishVirgin Islands are similar, and the flexibility available under British Virgin Islands law has enabled us to adopt memorandum of association and articles of associationthat will provide shareholders with rights that do not vary in any material respect from those they would enjoy if we were incorporated under the Delaware GeneralCorporation Law, or Delaware corporate law. Set forth below is a summary of some of the differences between provisions of the BVI Act applicable to us and thelaws application to companies incorporated in Delaware and their shareholders.Director’s Fiduciary DutiesUnder Delaware corporate law, a director of a Delaware corporation has a fiduciary duty to the corporation and its stockholders. This duty has twocomponents: the duty of care and the duty of loyalty. The duty of care requires that a director act in good faith, with the care that an ordinarily prudent personwould exercise under similar circumstances. Under this duty, a director must inform himself of, and disclose to stockholders, all material information reasonablyavailable regarding a significant transaction. The duty of loyalty requires that a director act in a manner he reasonably believes to be in the best interests of thecorporation. He must not use his corporate position for personal gain or advantage. This duty prohibits selfdealing by a director and mandates that the bestinterest of the corporation and its stockholders take precedence over any interest possessed by a director, officer or controlling stockholder and not shared by thestockholders generally. In general, actions of a director are presumed to have been made on an informed basis, in good faith and in the honest belief that the actiontaken was in the best interests of the corporation. However, this presumption may be rebutted by evidence of a breach of one of the fiduciary duties. Should suchevidence be presented concerning a transaction by a director, a director must prove the procedural fairness of the transaction, and that the transaction was of fairvalue to the corporation.British Virgin Islands law provides that every director of a British Virgin Islands company in exercising his powers or performing his duties shall acthonestly and in good faith and in what the director believes to be in the best interests of the company. Additionally, the director shall exercise the care, diligence andskill that a reasonable director would exercise in the same circumstances taking into account the nature of the company, the nature of the decision and the positionof the director and his responsibilities. In addition, British Virgin Islands law provides that a director shall exercise his powers as a director for a proper purpose andshall not act, or agree to the company acting, in a manner that contravenes British Virgin Islands law or the memorandum association or articles of association of thecompany.Amendment of Governing DocumentsUnder Delaware corporate law, with very limited exceptions, a vote of the stockholders is required to amend the certificate of incorporation. Under BritishVirgin Islands law and our memorandum of association and articles of association, (i) our shareholders may amend our memorandum of association and articles ofassociation by a resolution of shareholders, or (ii) our board of directors may amend our memorandum of association and articles of association by a resolution ofdirectors without a requirement for a resolution of shareholders so long as the amendment does not:●restrict the rights of the shareholders to amend the memorandum of association and articles of association;●change the percentage of shareholders required to pass a resolution of shareholders to amend the memorandum of association and articles ofassociation;●amend the memorandum of association and articles of association in circumstances where the memorandum of association and articles ofassociation cannot be amended by the shareholders; or●amend the provisions of memorandum of association or the articles of association pertaining to “rights attaching to shares,” “rights not varied bythe issue of the shares pari passu,” “variation of rights” and “amendment of memorandum and articles”.50Written Consent of DirectorsUnder Delaware corporate law, directors may act by written consent only on the basis of a unanimous vote. Under British Virgin Islands law, directors’consents need only a majority of directors signing to take effect.Written Consent of ShareholdersUnder Delaware corporate law, unless otherwise provided in the certificate of incorporation, any action to be taken at any annual or special meeting ofstockholders of a corporation, may be taken by written consent of the holders of outstanding stock having not less than the minimum number of votes that wouldbe necessary to take such action at a meeting. As permitted by British Virgin Islands law, shareholders’ consents need only a majority of shareholders signing totake effect. Our memorandum of association and articles of association provide that shareholders may approve corporate matters by way of a resolution consentedto at a meeting of shareholders or in writing by a majority of shareholders entitled to vote thereon.Shareholder ProposalsUnder Delaware corporate law, a shareholder has the right to put any proposal before the annual meeting of shareholders, provided it complies with thenotice provisions in the governing documents. A special meeting may be called by the board of directors or any other person authorized to do so in the governingdocuments, but shareholders may be precluded from calling special meetings. British Virgin Islands law and our memorandum of association and articles ofassociation provide that our directors shall call a meeting of the shareholders if requested in writing to do so by shareholders entitled to exercise at least 30% of thevoting rights in respect of the matter for which the meeting is requested.Sale of AssetsUnder Delaware corporate law, a vote of the stockholders is required to approve the sale of assets only when all or substantially all assets are being sold. Inthe British Virgin Islands, shareholder approval is required when more than 50% of the company’s total assets by value are being disposed of or sold.Dissolution; Winding UpUnder Delaware corporate law, unless the board of directors approves the proposal to dissolve, dissolution must be approved by shareholders holding100% of the total voting power of the corporation. Only if the dissolution is initiated by the board of directors may it be approved by a simple majority of thecorporation’s outstanding shares. Delaware corporate law allows a Delaware corporation to include in its certificate of incorporation a supermajority votingrequirement in connection with dissolutions initiated by the board. As permitted by British Virgin Islands law and our memorandum of association and articles ofassociation, we may be voluntarily liquidated under Part XII of the BVI Act by resolution of directors and resolution of shareholders if we have no liabilities and weare able to pay our debts as they fall due.Redemption of SharesUnder Delaware corporate law, any stock may be made subject to redemption by the corporation at its option or at the option of the holders of such stockprovided there remains outstanding shares with full voting power. Such stock may be made redeemable for cash, property or rights, as specified in the certificate ofincorporation or in the resolution of the board of directors providing for the issue of such stock. As permitted by British Virgin Islands law, and our memorandum ofassociation and articles of association, shares may be repurchased, redeemed or otherwise acquired by us. Our directors must determine that immediately followingthe redemption or repurchase we will be able to satisfy our debts as they fall due and the value of our assets exceeds our liabilities.51Variation of Rights of SharesUnder Delaware corporate law, a corporation may vary the rights of a class of shares with the approval of a majority of the outstanding shares of suchclass, unless the certificate of incorporation provides otherwise. As permitted by British Virgin Islands law, and our memorandum of association and articles ofassociation, if our share capital is divided into more than one class of shares, we may vary the rights attached to any class only with the consent in writing ofholders of not less than threefourths of the issued shares of that class and holders of not less than threefourths of the issued shares of any other class of shareswhich may be affected by the variation.Removal of DirectorsUnder Delaware corporate law, a director of a corporation with a classified board may be removed only for cause with the approval of a majority of theoutstanding shares entitled to vote, unless the certificate provides otherwise. As permitted by British Virgin Islands law and our memorandum of association andarticles of association, directors may be removed by resolution of directors or resolution of shareholders.MergersUnder the BVI Act, two or more companies may merge or consolidate in accordance with the statutory provisions. A merger means the merging of two ormore constituent companies into one of the constituent companies, and a consolidation means the uniting of two or more constituent companies into a newcompany. In order to merger or consolidate, the directors of each constituent company must approve a written plan of merger or consolidation which must beauthorized by a resolution of shareholders.Shareholders not otherwise entitled to vote on the merger or consolidation may still acquire the right to vote if the plan of merger or consolidation containsany provision which, if proposed as an amendment to the memorandum association or articles of association, would entitle them to vote as a class or series on theproposed amendment. In any event, all shareholders must be given a copy of the plan of merger or consolidation irrespective of whether they are entitled to vote atthe meeting or consent to the written resolution to approve the plan of merger or consolidation.Inspection of Books and RecordsUnder Delaware corporate law, any shareholder of a corporation may for any proper purpose inspect or make copies of the corporation’s stock ledger, list ofshareholders and other books and records. Holders of our shares have no general right under British Virgin Islands law to inspect or obtain copies of our list ofshareholders or our corporate records. However, we will provide holders of our shares with annual audited financial statements. See “Where You Can FindAdditional Information.”Conflict of InterestThe BVI Act provides that a director shall, after becoming aware that he is interested in a transaction entered into or to be entered into by the company,disclose that interest to the board of directors of the company. The failure of a director to disclose that interest does not affect the validity of a transaction enteredinto by the director or the company, so long as the director’s interest was disclosed to the board prior to the company’s entry into the transaction or was notrequired to be disclosed (for example where the transaction is between the company and the director himself or is otherwise in the ordinary course of business andon usual terms and conditions). As permitted by British Virgin Islands law and our memorandum of association and articles of association, a director interested in aparticular transaction may vote on it, attend meetings at which it is considered, and sign documents on our behalf which relate to the transaction.52Transactions with Interested ShareholdersDelaware corporate law contains a business combination statute applicable to Delaware public corporations whereby, unless the corporation hasspecifically elected not to be governed by such statute by amendment to its certificate of incorporation, it is prohibited from engaging in certain businesscombinations with an “interested shareholder” for three years following the date that such person becomes an interested shareholder. An interested shareholdergenerally is a person or group who or that owns or owned 15% or more of the target’s outstanding voting stock within the past three years. This has the effect oflimiting the ability of a potential acquirer to make a twotiered bid for the target in which all shareholders would not be treated equally. The statute does not apply if,among other things, prior to the date on which such shareholder becomes an interested shareholder, the board of directors approves either the businesscombination or the transaction that resulted in the person becoming an interested shareholder. This encourages any potential acquirer of a Delaware publiccorporation to negotiate the terms of any acquisition transaction with the target’s board of directors.British Virgin Islands law has no comparable provision. As a result, we cannot avail ourselves of the types of protections afforded by the Delawarebusiness combination statute. However, although British Virgin Islands law does not regulate transactions between a company and its significant shareholders, itdoes provide that such transactions must be entered into bona fide in the best interests of the company and not with the effect of constituting a fraud on theminority shareholders.Independent DirectorsThere are no provisions under Delaware corporate law or under the BVI Act that require a majority of our directors to be independent.Cumulative VotingUnder Delaware corporate law, cumulative voting for elections of directors is not permitted unless the company’s certificate of incorporation specificallyprovides for it. Cumulative voting potentially facilitates the representation of minority shareholders on a board of directors since it permits the minority shareholderto cast all the votes to which the shareholder is entitled on a single director, which increases the shareholder’s voting power with respect to electing such director.There are no prohibitions to cumulative voting under the laws of the British Virgin Islands, but our memorandum of association and articles of association do notprovide for cumulative votingAntitakeover Provisions in Our Memorandum of association and articles of associationSome provisions of our memorandum of association and articles of association may discourage, delay or prevent a change in control of our company ormanagement that shareholders may consider favorable, including provisions that authorize our board of directors to issue preference shares in one or more seriesand to designate the price, rights, preferences, privileges and restrictions of such preference shares.C. MATERIAL CONTRACTS.On January 25, 2018, the Company executed an Asset Exchange Agreement (“AEA”) with C Media Limited, a corporation organized under the laws of theCayman Islands (“C Media”), whereby the Company agreed to purchase all the capital stock and equity interests of LK Technology Ltd, together with its whollyowned subsidiaries MMB Limited and Mobile Media (China) Limited and all respective subsidiaries from C Media in exchange for (i) 185,412,599 ordinary shares ofthe Company, par value $0.01 per share (“Ordinary Shares”), (ii) 1,000,000 preferred shares of Kingtone (“Preferred Shares”) and (iii) all issued and outstandingcapital stock or equity interests of the Company’s subsidiary, Topsky InfoTech Holdings Pte Ltd., and its whollyowned subsidiary Xi’an Softech Co., Ltd.,including all entities effectively controlled by Xi’an Softech Co., Ltd. through contractual arrangements and variable business entities.To consummate the contemplated transactions described above, the Company obtained shareholder consent at a special meeting held on May 20, 2018, (i)to authorize 1,000,000 Preferred Shares, (ii) to authorize additional Ordinary Shares so that total authorized Ordinary Shares is equal to 250,000,000 shares, (iii) to listsuch Ordinary Shares on NASDAQ, and (iv) to approve the transactions contemplated in the Asset Exchange Agreement. Additionally, NASDAQ needed toapprove the contemplated transactions prior to consummation thereof. C Media had the right to terminate the AEA if the closing had not occurred (other thanthrough the failure of C Media to comply fully with its obligations under the AEA) on or before July 31, 2018. The transactions contemplated by the AEA wereconsummated on August 17, 2018.53On January 25, 2018, five shareholders of the Company including its largest shareholder and its Chief Executive Officer executed a Securities PurchaseAgreement, whereby such shareholders agreed to sell a total of 617,988 Ordinary Shares and 282,694 American Depository Shares of the Company to Redstone YYLManagement Limited, a company incorporated in the British Virgin Islands, in exchange for an aggregate purchase price of $1,897,860.09.On August 25, 2018, LK Technology entered into a Stock Purchase Agreement (the “Agreement”) with the shareholders (“Shareholders”) of SuperengineHoldings Limited, a limited liability company organized under the laws of the British Virgin Islands (the “Superengine”), pursuant to which LK Technology acquiredall of the issued and outstanding capital stock of Superengine for an aggregate purchase price of US$60 million (the “Purchase Price”), which are paid by theissuance of our Ordinary Shares in an amount equal to the quotient of (x) the Purchase Price divided by (y) the average of the closing prices of the Ordinary Shareson the NASDAQ Capital Market over the 12 months period preceding July 31, 2018. We are a party to the Agreement in connection with the issuance of theOrdinary Shares and certain other limited purposes.D. EXCHANGE CONTROLS.This section sets forth a summary of the most significant regulations or requirements that affect our business activities in China or our shareholders’ rightto receive dividends and other distributions from us.Regulations on Internet Content ProvidersThe Administrative Measures on Internet Information Services, or the Internet Content Measures, which was promulgated by the State Council onSeptember 25, 2000 and amended on January 8, 2011, set out guidelines on the provision of internet information services. The Internet Content Measures specifiesthat internet information services regarding news, publications, education, medical and health care, pharmacy and medical appliances, among other things, arerequired to be examined, approved and regulated by the relevant authorities. Internet information providers are prohibited from providing services beyond thoseincluded in the scope of their licenses or filings. Furthermore, the Internet Content Measures specifies a list of prohibited content. Internet information providers areprohibited from producing, copying, publishing or distributing information that is humiliating or defamatory to others or that infringes the legal rights of others.Internet information providers that violate such prohibition may face criminal charges or administrative sanctions. Internet information providers must monitor andcontrol the information posted on their websites. If any prohibited content is found, they must remove the content immediately, keep a record of such content andreport to the relevant authorities.The Internet Content Measures classifies internet information services into commercial internet information services and noncommercial internetinformation services. Commercial internet information services refer to services that provide information or services to internet users with charge. A provider ofcommercial internet information services must obtain an ICP License.Regulations on Internet Audiovideo Program ServicesOn December 20, 2007, the MII and the State Administration of Press, Publication, Radio, Film and Television, or the SAPPRFT, jointly issued theAdministrative Provisions for the Internet AudioVideo Program Service, or the Audiovideo Program Provisions, which came into effect on January 31, 2008 andwas amended on August 28, 2015. The Audiovideo Program Provisions defines “internet audiovideo program services” as producing, editing and integrating ofaudiovideo programs, supplying audiovideo programs to the public via the internet, and providing audiovideo programs uploading and transmission services to athird party. Entities providing internet audiovideo programs services must obtain an internet audiovideo program transmission license. Applicants for such licensesshall be stateowned or statecontrolled entities unless an internet audiovideo program transmission license has been obtained prior to the effectiveness of theAudiovideo Program Provisions in accordance with the thenineffect laws and regulations. In addition, foreigninvested enterprises are not allowed to engage inthe abovementioned services. According to the Audiovideo Program Provisions and other relevant laws and regulations, audiovideo programs provided by theentities supplying Internet audiovideo program services shall not contain any illegal content or other content prohibited by the laws and regulations, such as anycontent against the basic principles in the PRC Constitution, any content that damages the sovereignty of the country or national security, and any content thatdisturbs social order or undermine social stability. An audiovideo program that has already been broadcast shall be retained in full for at least 60 days. Movies,television programs and other media content used as Internet audiovideo programs shall comply with relevant administrative regulations on programs broadcaststhrough radio, movie and television channels. Entities providing services related to Internet audiovideo programs shall immediately delete the audiovideoprograms violating laws and regulations, keep relevant records, report relevant authorities and implement other regulatory requirements.54The Categories of the Internet AudioVideo Program Services, or the Audiovideo Program Categories, promulgated by SAPPRFT on March 10, 2017,classifies internet audio/video programs into four categories: (I) Category I internet audio/video program service, which is carried out with a form of radio station ortelevision station; (II) Category II internet audio/video program service, including (a) rebroadcasting service of current political news audio/video programs; (b)hosting, interviewing, reporting and commenting service of arts, entertainment, technology, finance and economics, sports, education and other specializedaudio/video programs; (c) producing (interviewing not included) and broadcasting service of arts, entertainment, technology, finance and economics, sports,education and other specialized audio/video programs; (d) producing and broadcasting service of internet films/dramas; (e) aggregating and broadcasting service offilms, television dramas and cartoons; (f) aggregating and broadcasting service of arts, entertainment, technology, finance and economics, sports, education andother specialized audio/video programs; and (g) live audio/video broadcasting service of cultural activities of common social organizations, sport events or otherorganization activities; and (III) Category III internet audio/video program service, including (a) aggregating service of online audio/video contents, and (b) rebroadcasting service of the audio/video programs uploaded by internet users; and (IV) Category III internet audio/video program service, including (a) rebroadcasting of the radio/television program channels; and (b) rebroadcasting of internet audio/video program channels.On May 27, 2016, the SAPPRFT issued the Notice on Relevant Issues concerning Implementing the Approval Works of Upgrading Mobile Internet AudioVideo Program Service, or the Mobile AudioVideo Program Notice. The Mobile AudioVideo Program Notice provides that the mobile Internet audiovideo programservices shall be deemed Internet audiovideo program service. Entities which have obtained the approvals to provide the Internet audiovideo program servicesmay use mobile WAP websites or mobile applications to provide audiovideo program services. Entities with regulatory approvals may operate mobile applicationsto provide the audiovideo program services The types of the programs shall be within the permitted scope as provided in the licenses and such mobile applicationsshall be filed with the SAPPRFT.Regulations on Production and Operation of Radio/Television ProgramsOn July 19, 2004, the SAPPRFT promulgated the Administrative Measures on the Production and Operation of Radio and Television Programs, or the Radioand Television Program Production Measures, which came into effect on August 20, 2004 and was amended on August 28, 2015. The Radio and Television ProgramProduction Measures provides that any business that produces or operates radio or television programs must first obtain a Radio and Television ProgramProduction and Operation Permit. Entities holding such permits shall conduct their business within the permitted scope as provided in their permits. In addition,foreigninvested enterprises are not allowed to engage in the abovementioned services.Regulations on Online Advertising ServicesOn April 24, 2015, the Standing Committee of the National People’s Congress enacted the Advertising Law of the People’s Republic of China, or the NewAdvertising Law, effective on September 1, 2015. The New Advertising Law increases the potential legal liability of advertising services providers and strengthensregulations of false advertising. On July 4, 2016, the State Administration for Industry and Commerce, or the SAIC, issued the Interim Measures of theAdministration of Online Advertising, or the SAIC Interim Measures, effective on September 1, 2016. The New Advertising Law and the SAIC Interim Measuresrequire that online advertisements may not affect users’ normal internet use and internet popup ads must display a “close” sign prominently and ensure onekeyclosing of the popup windows. The SAIC Interim Measures provides that all online advertisements must be marked “Advertisement” so that viewers can easilyidentify them as such. Moreover, the SAIC Interim Measures treats paid search results as advertisements that are subject to PRC advertisement laws, and requiresthat paid search results be conspicuously identified on search result pages as advertisements. The New Advertising Law and SAIC Interim Measures require us toconduct more stringent examination and monitoring of our advertisers and the content of their advertisements.55Regulations on Online GamesIn September 2009, the GAPP (currently known as the SAPPRFT), together with the National Copyright Administration, and the National Office ofCombating Pornography and Illegal Publications jointly issued the Notice on Further Strengthening on the Administration of Preexamination and Approval ofOnline Game and the Examination and Approval of Imported Online Game, or the Circular 13. The Circular 13 states that foreign investors are not permitted to investin online game operating businesses in the PRC via wholly foreignowned entities, Sinoforeign equity joint ventures or cooperative joint ventures or to exercisecontrol over or participate in the operation of domestic online game businesses through indirect means, such as other joint venture companies or contractual ortechnical arrangements. If the our contractual arrangements were deemed under the Circular 13 to be an “indirect means” for foreign investors to exercise controlover or participate in the operation of a domestic online game business, our contractual arrangements might be challenged by the SAPPRFT. We are not aware ofany online game companies which use the same or similar contractual arrangements having been challenged by the SAPPRFT as using those contractualarrangements as an “indirect means” for foreign investors to exercise control over or participate in the operation of a domestic online game business or having beenpenalized or ordered to terminate operations since the Circular 13 became effective. However it is unclear whether and how the Circular 13 might be interpreted orimplemented in the future. See “Risk Factors—If the PRC government finds that the agreements that establish the structure for operating certain of our operations inChina do not comply with PRC regulations relating to the relevant industries, or if these regulations or the interpretation of existing regulations change in the future,we could be subject to severe penalties or be forced to relinquish our interests in those operations.”The Interim Measures for the Administration of Online Games, or the Online Game Measures, issued by the MOC, which took effect on August 1, 2010 andamended on December 15, 2017, regulates a broad range of activities related to the online games business, including the development, production and operation ofonline games, the issuance of virtual currencies used for online games, and the provision of virtual currency trading services. The Online Game Measures providesthat any entity that is engaged in online game operations must obtain an Network Cultural Business Permit, and require the content of an imported online game to beexamined and approved by the MOC prior to the game’s launch and require a domestic online game to be filed with the MOC within 30 days after its launch. TheNotice of the Ministry of Culture on the Implementation of the Interim Measures for the Administration of Online Games, which was issued by the MOC on July 29,2010 to implement the Online Game Measures, (i) requires online game operators to protect the interests of online game users and specifies that certain terms thatmust be included in service agreements between online game operators and the users of their online games, (ii) requires content review of imported online gamesand filing procedures for domestic online games, (iii) emphasizes the protection of minors playing online games, and (iv) requests online game operators to promoterealname registration by their game users.Regulations on Information Security, Censorship and PrivacyThe Standing Committee of the National People’s Congress, China’s national legislative body, enacted the Decisions on the Maintenance of InternetSecurity on December 28, 2000 that may subject persons to criminal liabilities in China for any attempt to use the internet to: (i) gain improper entry to a computer orsystem of strategic importance; (ii) disseminate politically disruptive information; (iii) leak state secrets; (iv) spread false commercial information or (v) infringe uponintellectual property rights. In 1997, the Ministry of Public Security issued the Administration Measures on the Security Protection of Computer InformationNetwork with International Connections which prohibits using the internet to leak state secrets or to spread socially destabilizing materials. If an ICP license holderviolates these measures, the PRC government may revoke its ICP license and shut down its websites. Pursuant to the Ninth Amendment to the Criminal Law issuedby the Standing Committee of the National People’s Congress on August 29, 2015, effective on November 1, 2015, any ICP provider that fails to fulfill the obligationsrelated to internet information security as required by applicable laws and refuses to take corrective measures, will be subject to criminal liability for (i) any largescale dissemination of illegal information; (ii) any severe effect due to the leakage of users’ personal information; (iii) any serious loss of evidence of criminalactivities; or (iv) other severe situations, and any individual or entity that (i) sells or provides personal information to others unlawfully or (ii) steals or illegallyobtains any personal information will be subject to criminal liability in severe situations.56The Cybersecurity Law of the PRC, or the Cybersecurity Law, which was promulgated on November 7, 2016 by the Standing Committee of the NationalPeople’s Congress and came into effect on June 1, 2017, provides that network operators shall meet their cyber security obligations and shall take technicalmeasures and other necessary measures to protect the safety and stability of their networks. Under the Cybersecurity Law, network operators are subject to varioussecurity protectionrelated obligations, including: (i) network operators shall comply with certain obligations regarding maintenance of the security of internetsystems; (ii) network operators shall verify users’ identities before signing agreements or providing certain services such as information publishing or realtimecommunication services; (iii) when collecting or using personal information, network operators shall clearly indicate the purposes, methods and scope of theinformation collection, the use of information collection, and obtain the consent of those from whom the information is collected; (iv) network operators shall strictlypreserve the privacy of user information they collect, and establish and maintain systems to protect user privacy; (v) network operators shall strengthenmanagement of information published by users, and when they discover information prohibited by laws and regulations from publication or dissemination, theyshall immediately stop dissemination of that information, including taking measures such as deleting the information, preventing the information from spreading,saving relevant records, and reporting to the relevant governmental agencies.Regulations on Intellectual Property RightsRegulations on CopyrightThe Copyright Law of the PRC, or the Copyright Law, which took effect on June 1, 1991 and was amended in 2001 and in 2010, provides that Chinesecitizens, legal persons, or other organizations shall, whether published or not, own copyright in their copyrightable works, which include, among others, works ofliterature, art, natural science, social science, engineering technology and computer software. Copyright owners enjoy certain legal rights, including right ofpublication, right of authorship and right of reproduction. The Copyright Law as revised in 2010 extends copyright protection to Internet activities, productsdisseminated over the Internet and software products. In addition, Copyright Law provides for a voluntary registration system administered by the China CopyrightProtection Center, or the CPCC. According to the Copyright Law, an infringer of the copyrights shall be subject to various civil liabilities, which include ceasinginfringement activities, apologizing to the copyright owners and compensating the loss of copyright owner. Infringers of copyright may also subject to fines and/oradministrative or criminal liabilities in severe situations.The Computer Software Copyright Registration Measures, or the Software Copyright Measures, promulgated by the State Council on December 20, 2001and amended on January 30, 2013, regulates registrations of software copyright, exclusive licensing contracts for software copyright and assignment agreements.The National Copyright Administration, or the NCA administers software copyright registration and the CPCC, is designated as the software registration authority.The CPCC shall grant registration certificates to the Computer Software Copyrights applicants which meet the requirements of both the Software CopyrightMeasures and the Computer Software Protection Regulations (Revised in 2013).The Provisions of the Supreme People’s Court on Certain Issues Related to the Application of Law in the Trial of Civil Cases Involving Disputes onInfringement of the Information Network Dissemination Rights specifies that disseminating works, performances or audiovideo products by the internet users orthe internet service providers via the internet without the permission of the copyright owners shall be deemed to have infringed the right of dissemination of thecopyright owner.57The Measures for Administrative Protection of Copyright Related to Internet, which was jointly promulgated by the NCA and the MIIT on April 29, 2005and became effective on May 30, 2005, provides that upon receipt of an infringement notice from a legitimate copyright holder, an ICP operator must take remedialactions immediately by removing or disabling access to the infringing content. If an ICP operator knowingly transmits infringing content or fails to take remedialactions after receipt of a notice of infringement that harms public interest, the ICP operator could be subject to administrative penalties, including an order to ceaseinfringing activities, confiscation by the authorities of all income derived from the infringement activities, or payment of fines.On May 18, 2006, the State Council promulgated the Regulations on the Protection of the Right to Network Dissemination of Information (as amended in2013). Under these regulations, an owner of the network dissemination rights with respect to written works or audio or video recordings who believes thatinformation storage, search or link services provided by an Internet service provider infringe his or her rights may require that the Internet service provider delete, ordisconnect the links to, such works or recordings.Patent LawsAccording to the Patent Law of the PRC (Revised in 2008), the State Intellectual Property Office is responsible for administering patent law in the PRC. Thepatent administration departments of provincial, autonomous region or municipal governments are responsible for administering patent law within their respectivejurisdictions. The Chinese patent system adopts a firsttofile principle, which means that when more than one person file different patent applications for the sameinvention, only the person who files the application first is entitled to obtain a patent of the invention. To be patentable, an invention or a utility model must meetthree criteria: novelty, inventiveness and practicability. A patent is valid for twenty years in the case of an invention and ten years in the case of utility models anddesigns.Trademark LawsTrademarks are protected by the Trademark Law of the PRC (Revised in 2013) which was adopted in 1982 and subsequently amended in 1993, 2001 and 2013respectively as well as by the Implementation Regulations of the PRC Trademark Law adopted by the State Council in 2002 and as most recently amended on April29, 2014. The Trademark Office under the SAIC handles trademark registrations. The Trademark Office grants a tenyear term to registered trademarks and the termmay be renewed for another tenyear period upon request by the trademark owner. A trademark registrant may license its registered trademarks to another party byentering into trademark license agreements, which must be filed with the Trademark Office for its record. As with patents, the Trademark Law has adopted a firsttofile principle with respect to trademark registration. If a trademark applied for is identical or similar to another trademark which has already been registered or subjectto a preliminary examination and approval for use on the same or similar kinds of products or services, such trademark application may be rejected. Any personapplying for the registration of a trademark may not injure existing trademark rights first obtained by others, nor may any person register in advance a trademark thathas already been used by another party and has already gained a “sufficient degree of reputation” through such party’s use.Regulations on Domain NamesThe MIIT promulgated the Measures on Administration of Internet Domain Names, or the Domain Name Measures, on August 24, 2017, which took effecton November 1, 2017 and replaced the Administrative Measures on China Internet Domain Name promulgated by MII on November 5, 2004. According to theDomain Name Measures, the MIIT is in charge of the administration of PRC internet domain names. The domain name registration follows a firsttofile principle.Applicants for registration of domain names shall provide the true, accurate and complete information of their identities to domain name registration serviceinstitutions. The applicants will become the holder of such domain names upon the completion of the registration procedure.Relevant Regulations of the Hightech EnterpriseThe Ministry of Information Industry, the Ministry of Science and Technology and the State Tax Bureau collectively promulgated and issued the“Certifying Standard and Managing Measures for Hightech Enterprises” and “the Hightech Areas of Main National Support” on April 14, 2008 to certify the Hightech enterprise and encourage and support the development of the Chinese Hightech enterprises. Under the Hightech Enterprises Measures, the enterprise canenjoy the favorable tax policy when it is certified as a Hightech enterprise by the Ministry of Information Industry, the Ministry of Science and Technology and theState Tax Bureau or with its provincial branch according to the stipulated standard. The software and computer and network technology are recognized as the mainnational supported Hightech field. Kingtone Information is a Hightech enterprise and enjoys a favorable income tax rate of 15%.58Laws and Regulations of Intellectual Property RightsChina has adopted legislation governing intellectual property rights, including patents, copyrights and trademarks. China is a signatory to the maininternational conventions on intellectual property rights and became a member of the Agreement on Trade Related Aspects of Intellectual Property Rights upon itsaccession to the WTO in December 2001.PatentsThe “Patent Law of the People’s Republic of China” promulgated by the Standing Committee of the National People's Congress, adopted in 1985 andrevised in 1992, 2001 and 2008, protects registered patents. The State Intellectual Property Office of PRC handles granting patent rights, providing for a twentyyearpatent term for inventions and a tenyear patent term for utility models and designs. As we disclosed in Item 4, of this transition report on Form 20F, throughKingtone Information, we have been granted one invention patent “wireless video transmission system based on BREW platform” by the State Intellectual PropertyOffice (“SIPO”) of PRC on September 23, 2009 and therefore such invention is entitled to all the protections provided under the Patent Law for twenty years.Computer Software Copyright and AdministrationOn December 20, 2001, the State Council of PRC issued the “Regulation for Computer Software Protection of the People’s Republic of China” (the“Regulation for Computer Software Protection”) which became effective on January 1, 2002 to protect the interests of copyright owners, to promote the research andapplication and to encourage the development of the Chinese software industry. Under the Regulation for Computer Software Protection, natural persons, legalpersons or any other organizations shall have a copyright on the software developed by such persons no matter whether such software has been published. Theprotection period of software copyrights owned by the legal person or other organization is fifty years and expires on December 31 of the fiftieth year from the initialpublication date of such computer software. Currently, Kingtone Information has twelve registration certificates for software copyrights.TrademarksThe “Trademark Law of the People’s Republic of China” promulgated by the State Council of PRC, adopted in 1982 and revised in 1993 and 2001, protectsregistered trademarks. The Trademark Office under the Chinese State Administration for Industry and Commerce handles trademark registrations and grants a termof ten years to registered trademarks which are renewable for another ten years after the application to the Trademark Office by the owners of the trademarks.Trademark license agreements must be filed with the Trademark Office for record. China has a “firsttoregister” system that requires no evidence of prior use orownership. Kingtone Information has its registered trademarks as described in Item 4 of this transition report on Form 20F. Accordingly, such trademarks areentitled to the protection under the Trademark Law.Foreign Currency ExchangeOn August 29, 2008, the SAFE issued the Notice of the General Affairs Department of the State Administration of Foreign Exchange on the RelevantOperating Issues concerning the Improvement of the Administration of Payment and Settlement of Foreign Currency Capital of Foreignfunded Enterprises, orCircular 142. Pursuant to Circular 142, RMB converted from the foreign currencydenominated capital of a foreigninvested company may only be used for purposeswithin the business scope approved by the applicable governmental authority and may not be used for equity investments within the PRC unless specificallyprovided for otherwise. The use of such Renminbi capital may not be changed without SAFE’s approval and may not in any case be used to repay Renminbi loans ifthe proceeds of such loans have not been used.59See “Risk Factors — Risks Related to Doing Business in China — PRC regulation of loans and direct investment by offshore holding companies to PRCentities may delay or prevent us from using the proceeds of our initial public offering to make loans or additional capital contributions to our PRC operatingsubsidiaries, which could materially and adversely affect our liquidity and our ability to fund and expand our business”.Dividend DistributionWe are a British Virgin Islands holding company and substantially all of our operations are conducted through LK Technology. We rely on dividends andother distributions from our LK Technology and its subsidiaries to provide us with our cash flow and allow us to pay dividends on the shares underlying our ADSsand meet our other obligations. The principal regulations governing distribution of dividends paid by wholly foreignowned enterprises include:1.Wholly ForeignOwned Enterprise Law (1986), as amended; and2.Implementation Rules on Wholly ForeignOwned Enterprise Law (1990), as amended.Under these regulations, wholly foreignowned enterprises in China may pay dividends only out of their accumulated profits, if any, determined inaccordance with PRC accounting standards and regulations. In addition, wholly foreignowned enterprises in China are required to set aside at least 10% of theiraftertax profit based on PRC accounting standards each year to its general reserves until the accumulative amount of such reserves reach 50% of its registeredcapital. These reserves are not distributable as cash dividends. The board of directors of a FIE has the discretion to allocate a portion of its aftertax profits to staffwelfare and bonus funds, which may not be distributed to equity owners except in the event of liquidation.Regulation of Foreign Exchange in Certain Onshore and Offshore TransactionsIn October 2005, the SAFE issued the Notice on Issues Relating to the Administration of Foreign Exchange in Fundraising and Return InvestmentActivities of Domestic Residents Conducted via Offshore Special Purpose Companies, or SAFE Notice 75, which became effective as of November 1, 2005, and wasfurther supplemented by two implementation notices issued by the SAFE on November 24, 2005 and May 29, 2007, respectively. Under Circular 75, prior registrationwith the local SAFE branch is required for PRC residents to establish or to control an offshore company for the purposes of financing that offshore company withassets or equity interests in an onshore enterprise located in the PRC. An amendment to the registration or filing with the local SAFE branch by such PRC resident isalso required for the injection of equity interests or assets of an onshore enterprise in the offshore company or overseas funds raised by such offshore company, orany other material change with respect to the offshore company in connection with any increase or decrease of capital, transfer of shares, merger, division, equityinvestment, debt investment, or creation of any security interest over any assets located in the PRC.Under SAFE Notice 75, PRC residents are further required to repatriate into the PRC all of their dividends, profits or capital gains obtained from theirshareholdings in the offshore entity within 180 days of their receipt of such dividends, profits or capital gains. The registration and filing procedures under SAFENotice 75 are prerequisites for other approval and registration procedures necessary for capital inflow from the offshore entity, such as inbound investments orshareholders loans, or capital outflow to the offshore entity, such as the payment of profits or dividends, liquidating distributions, equity sale proceeds, or thereturn of funds upon a capital reduction. Therefore, failure to comply with such registration may subject us to certain restrictions on, including but not limited to, theincrease of the registered capital of our PRC subsidiary, making loans to our PRC subsidiary, and making distributions to us from our onshore companies.Regulations of Overseas Investments and ListingsOn August 8, 2006, six PRC regulatory agencies, including the MOFCOM, the State Assets Supervision and Administration Commission, the StateAdministration for Taxation, the State Administration for Industry and Commerce, the CSRC and the SAFE, jointly adopted the New M&A Rule, which becameeffective on September 8, 2006. This regulation, among other things, includes provisions that purport to require that an offshore SPV formed for purposes ofoverseas listing of equity interests in PRC companies and controlled directly or indirectly by PRC companies or individuals obtain the approval of the CSRC prior tothe listing and trading of such SPV’s securities on an overseas stock exchange.60On September 21, 2006, the CSRC published on its official website procedures regarding its approval of overseas listings by SPVs. The CSRC approvalprocedures require the filing of a number of documents with the CSRC and it would take several months to complete the approval process.The application of the New M&A Rule with respect to overseas listings of SPVs remains unclear with no consensus currently existing among the leadingPRC law firms regarding the scope of the applicability of the CSRC approval requirement.We believe that, based on our understanding of the current PRC laws, regulations and rules and the procedures announced on September 21, 2006, there isno requirement in this regulation that would require an application to be submitted to the MOFCOM or the CSRC for the approval of the listing and trading of ourADSs on the NASDAQ Capital Market.See “Risk Factors — Risks Related to Doing Business in China — If we were required to obtain the prior approval of the China Securities RegulatoryCommission, or CSRC, of the listing and trading of our ADSs on the NASDAQ Capital Market, we may face regulatory actions or other sanctions from the CSRC orother PRC regulatory agencies.”E. TAXATIONThe following discussion sets forth the material British Virgin Islands, PRC and U.S. federal income tax consequences of an investment in our ADSs andthe ordinary shares represented by our ADSs, sometimes referred to collectively as the “securities”. It is based upon laws and relevant interpretations thereof ineffect as of the date of this report, all of which are subject to change. This discussion does not deal with all possible tax consequences relating to an investment inthe securities, such as the tax consequences under state, local and other tax laws. As used in this discussion, “we,” “our” and “us” refers only to LuokungTechnology Ltd.British Virgin Islands TaxationUnder the law of the British Virgin Islands as currently in effect, a holder of the securities who is not a resident of the British Virgin Islands is not liable forBritish Virgin Islands tax on dividends paid with respect to the securities and all holders of the securities are not liable to the British Virgin Islands for tax on gainsrealized during that year on the sale or disposal of such ordinary shares. The British Virgin Islands does not impose a withholding tax on dividends paid by acompany incorporated or reregistered under the BVI Act.There are no capital gains, gift or inheritance taxes levied by the British Virgin Islands on companies incorporated under the BVI Act. In addition, shares ofcompanies incorporated under the BVI Act are not subject to transfer taxes, stamp duties or similar charges.There is no income tax treaty or convention currently in effect between the United States and the British Virgin Islands or between China and the BritishVirgin Islands.61People’s Republic of China TaxationIn 2007, the PRC National People’s Congress enacted the new Enterprise Income Tax Law (the “EIT Law”), which became effective on January 1, 2008. Thenew EIT Law imposes a single uniform income tax rate of 25% on all Chinese enterprises, including foreigninvested enterprises, and levies a withholding tax rate of10% on dividends payable by Chinese subsidiaries to their foreign shareholders unless any such foreign shareholders’ jurisdiction of incorporation has a tax treatywith China that provides for a different withholding agreement. Under the new EIT Law, enterprises established outside China but deemed to have a “de factomanagement body” within the country may be considered “resident enterprises” for Chinese tax purposes and, therefore, may be subject to an enterprise income taxrate of 25% on their worldwide income. Pursuant to the implementation rules of the new EIT Law, a “de facto management body” is defined as a body that hasmaterial and overall management control over the business, personnel, accounts and properties of the enterprise. Although substantially all members of ourmanagement are located in China, it is unclear whether Chinese tax authorities would require (or permit) us to be treated as PRC resident enterprises. If we aredeemed a Chinese tax resident enterprise, we may be subject to an enterprise income tax rate of 25% on our worldwide income, excluding dividends received directlyfrom another Chinese tax resident enterprise, as well as PRC enterprise income tax reporting obligations. If we are not deemed to be a Chinese tax resident enterprise,we may be subject to certain PRC withholding taxes. See “Risk Factors — Risks Related to Doing Business in China — Our holding company structure may limit thepayment of dividends.” As a result of such changes, our historical tax rates may not be indicative of our tax rates for future periods and the value of our ADSs orordinary shares may be adversely affected. If we are deemed a PRC resident enterprise and investors’ gain from the sales of the securities and dividends payable byus are deemed sourced from China, such gains and dividends payable by us may be subject to PRC tax. See “Risk Factors — Risks Related to Doing Business inChina — If we were deemed a “resident enterprise” by PRC tax authorities, we could be subject to tax on our global income at the rate of 25% under the New EITLaw and our nonPRC shareholders could be subject to certain PRC taxes.United States Federal Income TaxationGeneralThe following is a discussion of the material U.S. federal income tax consequences to an investor of purchasing, owning and disposing of our securities.This discussion does not address any aspects of U.S. federal gift or estate tax or the state, local or nonU.S. tax consequences of an investment in the securities.YOU SHOULD CONSULT YOUR OWN TAX ADVISORS CONCERNING THE U.S. FEDERAL, STATE, LOCAL AND NONU.S. TAX CONSEQUENCES OFPURCHASING, OWNING AND DISPOSING OF THE SECURITIES IN YOUR PARTICULAR SITUATION.This discussion applies only to those investors that purchase the securities in this offering and that hold the securities as capital assets within the meaningof section 1221 of the Internal Revenue Code of 1986, as amended (the “Code”). This section does not apply to holders that may be subject to special tax rules,including but not limited to:1.dealers in securities or currencies;2.traders in securities that elect to use a marktomarket method of accounting;3.banks, insurance companies or certain financial institutions;4.taxexempt organizations;5.governments or agencies or instrumentalities thereof;6.partnerships or other entities treated as partnerships or other passthrough entities for U.S. federal income tax purposes or persons holding thesecurities through such entities;7.regulated investment companies or real estate investment trusts;8.holders subject to the alternative minimum tax;9.holders that actually or constructively own 10% or more of the total combined voting power of all classes of our shares entitled to vote;10.holders that acquired the securities pursuant to the exercise of employee stock options, in connection with employee stock incentive plans orotherwise as compensation;11.holders that hold the securities as part of a straddle, hedging or conversion transaction; or12.holders whose functional currency is not the U.S. dollar.62This section is based on the Code, its legislative history, existing and proposed U.S. Treasury regulations, published rulings and other administrativeguidance of the U.S. Internal Revenue Service (the “IRS”) and court decisions, all as in effect on the date hereof. These laws are subject to change or differentinterpretation by the IRS or a court, possibly on a retroactive basis.We have not sought, and will not seek, a ruling from the IRS as to any U.S. federal income tax consequence described herein. The IRS may disagree withthe discussion herein, and its determination may be upheld by a court. Moreover, there can be no assurance that future legislation, regulation, administrative rulingsor court decisions will not adversely affect the accuracy of the statements in this discussion.The discussion below of the U.S. federal income tax consequences to “U.S. Holders” will apply to a beneficial owner of the securities that is for U.S. federalincome tax purposes:1.a citizen or resident of the United States;2.a corporation (or other entity treated as a corporation) that is created or organized (or treated as created or3.organized) under the laws of the United States, any state thereof or the District of Columbia;4.an estate whose income is subject to U.S. federal income tax regardless of its source; or5.a trust if (a) a U.S. court can exercise primary supervision over the trust’s administration and one or more U.S.6.persons are authorized to control all substantial decisions of the trust, or (b) if the trust has a valid election in effect under applicable U.S.Treasury regulations to be treated as a U.S. person.If a beneficial owner of the securities is not described as a U.S. Holder and is not an entity treated as a partnership or other passthrough entity for U.S.federal income tax purposes, such owner will be considered a “NonU.S. Holder.” The material U.S. federal income tax consequences applicable specifically to NonU.S. Holders are described below under the heading “Tax Consequences to NonU.S. Holders.”If a partnership (including for this purpose any entity treated as a partnership for U.S. tax purposes) is a beneficial owner of the securities, the U.S. taxtreatment of a partner in the partnership generally will depend on the status of the partner and the activities of the partnership. A holder of the securities that is apartnership or partners in such a partnership should consult their own tax advisors about the U.S. federal income tax consequences of holding and disposing of thesecurities.This discussion assumes that any distributions made (or deemed made) on the securities and any consideration received by a holder in consideration forthe sale or other disposition of the securities will be in U.S. dollars. This discussion also assumes that the representations contained in the Deposit Agreement aretrue and that the obligations in the Deposit Agreement and any related agreement will be complied with in accordance with their terms. Finally, this discussionassumes that each ADS will only represent ordinary shares in us, and will not represent any other type of security, such as a bond, cash or other property.63For U.S. federal income tax purposes, a holder of an ADS will be treated as the beneficial owner of the shares represented by such ADS and an exchange ofan ADS for ordinary shares will not be subject to U.S. federal income tax. The U.S. Treasury has expressed concerns that parties to whom ADSs are prereleased, orintermediaries in the chain of ownership between holders of ADSs and the issuer of the securities underlying the ADSs may be taking actions that are inconsistentwith the claiming of foreign tax credits by U.S. Holders of ADSs. Such actions would also be inconsistent with the claiming of the reduced rate of tax applicable todividends received by certain noncorporate U.S. Holders, including individual U.S. Holders, as described below under “Tax Consequences to U.S.Holders — Taxation of Distributions.” Accordingly, the availability of foreign tax credits or the reduced tax rate for dividends received by certain noncorporate U.S.Holders, including individual U.S. Holders, could be affected by actions taken by parties to whom the ADSs are released, or by future actions by the U.S. Treasury.Tax Consequences to U.S. HoldersTaxation of DistributionsSubject to the passive foreign investment company, or PFIC, rules discussed below, the gross amount of any cash distributions we make with respect to aU.S. Holder in respect of such U.S. Holder’s ADSs or shares will generally be treated as dividend income if the distributions are made from our current oraccumulated earnings and profits, calculated according to U.S. federal income tax principles. Cash dividends will generally be subject to U.S. federal income tax asordinary income on the day the U.S. Holder actually or constructively receives such income. With respect to noncorporate U.S. Holders for taxable years beginningbefore January 1, 2011, dividends may be taxed at the lower applicable longterm capital gains rate provided that (a) our ADSs or shares are readily tradable on anestablished securities market in the United States, or, in the event we are deemed to be a Chinese “resident enterprise” under the EIT Law (as described above under“People’s Republic of China Taxation”), we are eligible for the benefits of the income tax treaty between the United States and the PRC (the “U.S.PRC Tax Treaty”),(b) we are not a PFIC, as discussed below, for either the taxable year in which the dividend was paid or the preceding taxable year, and (c) certain holding periodrequirements are met. Under published IRS authority, ADSs are considered for purposes of clause (a) above to be readily tradable on an established securitiesmarket in the United States only if they are listed on certain exchanges, which presently include the NASDAQ Capital Market. U.S. Holders should consult their owntax advisors regarding the availability of the lower rate for any dividends paid with respect to our ADSs or shares.Dividends will not be eligible for the dividendsreceived deduction allowed to U.S. corporations in respect of dividends received from other U.S.corporations. Generally, if we distribute noncash property as a dividend (other than pro rata distributions of our shares) out of our current or accumulated earningsand profits (as determined for U.S. federal income tax purposes), a U.S. Holder generally will include in income an amount equal to the fair market value of theproperty, on the date that it is distributed.Distributions in excess of current and accumulated earnings and profits, as determined for U.S. federal income tax purposes, will be treated as a nontaxablereturn of capital to the extent of the U.S. Holder’s basis in its shares or ADSs and thereafter as capital gain. However, we do not plan on calculating our earnings andprofits in accordance with U.S. federal income tax principles. U.S. holders therefore should generally assume that any distributions paid by us will be treated asdividends for U.S. federal income tax purposes.If PRC taxes apply to dividends paid by us to a U.S. Holder (see “People’s Republic of China Taxation,” above), such taxes may be treated as foreign taxeseligible for credit against such holder’s U.S. federal income tax liability (subject to certain limitations), and a U.S. Holder may be entitled to certain benefits under theU.S.PRC Tax Treaty. The rules relating to the U.S. foreign tax credit are complex. U.S. Holders should consult their own tax advisors regarding the creditability ofany such PRC tax and their eligibility for the benefits of the U.S.PRC Tax Treaty.64Taxation of Dispositions of SharesSubject to the PFIC rules discussed below, a U.S. holder that sells or otherwise disposes of its shares will recognize capital gain or loss for U.S. federalincome tax purposes equal to the difference between the amount realized and such U.S. Holder’s tax basis in its shares. Prior to January 1, 2011, capital gains of anoncorporate U.S. holder are generally taxed at a maximum rate of 15% where the property is held for more than one year (and 20% thereafter). The ability to deductcapital losses is subject to limitations.If PRC taxes apply to any gain from the disposition of our shares by a U.S. Holder, such taxes may be treated as foreign taxes eligible for credit against suchholder’s U.S. federal income tax liability (subject to certain limitations), and a U.S. Holder may be entitled to certain benefits under the U.S.PRC Tax Treaty. U.S.Holders should consult their own tax advisors regarding the creditability of any such PRC tax and their eligibility for the benefits of the U.S.PRC Tax Treaty.Passive Foreign Investment CompanyWe do not expect to be a PFIC for U.S. federal income tax purposes for our current tax year or in the foreseeable future. The determination of whether or notwe are a PFIC in respect of any of our taxable years is a factual determination that cannot be made until the close of the applicable tax year and that is based on thetypes of income we earn and the value and composition of our assets (including goodwill), all of which are subject to change. Therefore, we can make no assurancesthat we will not be a PFIC in respect of our current taxable year or in the future.In general, we will be a PFIC in any taxable year if either:1.at least 75% of our gross income for the taxable year is passive income; or2.at least 50% of the value, determined on the basis of a quarterly average, of our assets is attributable to assets that produce or are held for theproduction of passive income.Passive income includes dividends, interest, royalties, rents (other than certain rents and royalties derived in the active conduct of a trade or business), theexcess of gains over losses from certain types of transactions in commodities, annuities and gains from assets that produce passive income. We will be treated asowning our proportionate share of the assets and earning our proportionate share of the income of any corporation in which we own, directly or indirectly, at least25% (by value) of the stock.If we are treated as a PFIC in any year during which a U.S. Holder owns the securities, and such U.S. Holder did not make a marktomarket election, asdescribed below, the U.S. Holder will be subject to special rules with respect to:1.any gain recognized by the U.S. Holder on the sale or other disposition of its shares; and any excess distribution that we make to the U.S. Holder(generally, the excess of the amount of any distributions to such U.S. Holder during a single taxable year of such U.S. Holder over 125% of theaverage annual distributions received by such U.S. Holder in respect of the shares during the three preceding taxable years of such U.S. Holder or,if shorter, such U.S. Holder holding period for the shares).Under these rules:2.the gain or excess distribution will be allocated ratably over the U.S. Holder’s holding period for the shares;3.the amount allocated to the U.S. Holder’s taxable year in which it realized the gain or excess distribution or to the period in the U.S. Holder’sholding period before the first day of our first taxable year in which we are a PFIC will be taxed as ordinary income;4.the amount allocated to other taxable years (or portions thereof) of the U.S. Holder and included in its holding period will be taxed at the highesttax rate in effect for that year; and5.the interest charge generally applicable to underpayments of tax will be imposed in respect of the tax attributable to each such other taxable yearof the U.S. Holder. 6.Special rules apply for calculating the amount of the foreign tax credit with respect to excess distributions by a PFIC.65Alternatively, if a U.S. Holder, at the close of its taxable year, owns ordinary shares in a PFIC that are treated as marketable stock, the U.S. Holder may makea marktomarket election with respect to such shares for such taxable year. Our shares will be “marketable” to the extent that they remain regularly traded on anational securities exchange, such as the NASDAQ Capital Market. If a U.S. Holder makes this election in a timely fashion, it will not be subject to the PFIC rulesdescribed above. Instead, in general, the U.S. Holder will include as ordinary income each year the excess, if any, of the fair market value of its shares at the end ofthe taxable year over its adjusted basis in its shares. Any ordinary income resulting from this election would generally be taxed at ordinary income tax rates andwould not be eligible for the reduced rate of tax applicable to qualified dividend income. The U.S. Holder will also be allowed to take an ordinary loss in respect ofthe excess, if any, of the adjusted basis of its shares over the fair market value at the end of the taxable year (but only to the extent of the net amount of previouslyincluded income as a result of the marktomarket election). The U.S. Holder’s basis in the shares will be adjusted to reflect any such income or loss amounts. U.S.Holders should consult their own tax advisor regarding potential advantages and disadvantages of making a marktomarket election with respect to their shares.Alternatively, a U.S. Holder of stock in a PFIC may avoid the PFIC tax consequences described above in respect to our or shares by making a timely“qualified electing fund” election to include in income its pro rata share of our net capital gains (as longterm capital gain) and other earnings and profits (asordinary income), on a current basis, in each case whether or not distributed, in the taxable year of the U.S. Holder in which or with which our taxable year ends.However, the qualified electing fund election is available only if the PFIC provides such U.S. Holder with certain information regarding its earnings and profits asrequired under applicable U.S. Treasury regulations. We do not intend to furnish the information that a U.S. Holder would need in order to make a qualified electingfund election. Therefore, U.S. Holders will not be able to make or maintain such election with respect to their or shares.If a U.S. Holder owns our shares or during any year that we are a PFIC, such holder must file U.S. Internal Revenue Service Form 8621 regarding suchholder’s shares or and the gain realized on the disposition of the shares. The reduced tax rate for dividend income, discussed in “Taxation of Distributions,” is notapplicable to dividends paid by a PFIC. U.S. Holders should consult with their own tax advisors regarding reporting requirements with respect to their shares.Tax Consequences to NonU.S. HoldersDividends paid to a NonU.S. Holder in respect of our or shares generally will not be subject to U.S. federal income tax, unless the dividends are effectivelyconnected with the NonU.S. Holder’s conduct of a trade or business within the United States (and, if required by an applicable income tax treaty, are attributable toa permanent establishment or fixed base that such holder maintains in the United States).In addition, a NonU.S. Holder generally will not be subject to U.S. federal income tax on any gain attributable to a sale or other disposition of our or sharesunless such gain is effectively connected with its conduct of a trade or business in the United States (and, if required by an applicable income tax treaty, isattributable to a permanent establishment or fixed base that such holder maintains in the United States) or the NonU.S. Holder is an individual who is present in theUnited States for 183 days or more in the taxable year of sale or other disposition and certain other conditions are met (in which case, such gain from United Statessources generally is subject to tax at a 30% rate or a lower applicable tax treaty rate).Dividends and gains that are effectively connected with the NonU.S. Holder’s conduct of a trade or business in the United States (and, if required by anapplicable income tax treaty, are attributable to a permanent establishment or fixed base in the United States) generally will be subject to tax in the same manner as fora U.S. Holder and, in the case of a NonU.S. Holder that is a corporation for U.S. federal income tax purposes, may also be subject to an additional branch profits taxat a 30% rate or a lower applicable tax treaty rate.66Information Reporting and Backup Withholding In general, information reporting for U.S. federal income tax purposes generally should apply to distributions made on the securities within the UnitedStates to a noncorporate U.S. Holder and to the proceeds from sales and other dispositions of the securities by a noncorporate U.S. Holder to or through a U.S.office of a broker. Payments made (and sales and other dispositions effected at an office) outside the United States generally should be subject to informationreporting in limited circumstances.Dividend payments made to U.S. Holders and proceeds paid from the sale or other disposition the securities may be subject to information reporting to theIRS and possible U.S. federal backup withholding at a current rate of 28%. Certain exempt recipients, such as corporations, are not subject to these informationreporting requirements. Backup withholding will not apply to a U.S. Holder who furnishes a correct taxpayer identification number and makes any other requiredcertification, or who is otherwise exempt from backup withholding. U.S. Holders who are required to establish their exempt status must provide a duly executed IRSForm W9.A NonU.S. Holder generally may eliminate the requirement for information reporting and backup withholding by providing certification of its foreignstatus, under penalties of perjury, on a duly executed applicable IRS Form W8 or by otherwise establishing an exemption.Backup withholding is not an additional tax. Rather, the amount of any backup withholding will be allowed as a credit against a U.S. Holder’s or a nonU.S.Holder’s U.S. federal income tax liability and may entitle such holder to a refund, provided that certain required information is timely furnished to the IRS.PROSPECTIVE PURCHASERS OF OUR SECURITIES SHOULD CONSULT WITH THEIR OWN TAX ADVISORS REGARDING THE APPLICATION OFTHE U.S. FEDERAL INCOME TAX LAWS TO THEIR PARTICULAR SITUATIONS AS WELL AS ANY ADDITIONAL TAX CONSEQUENCES RESULTING FROMPURCHASING, HOLDING OR DISPOSING OF OUR SECURITIES, INCLUDING THE APPLICABILITY AND EFFECT OF THE TAX LAWS OF ANY STATE, LOCALOR NONU.S. JURISDICTION, INCLUDING ESTATE, GIFT, AND INHERITANCE LAWS AND APPLICABLE TAX TREATIES.F. DIVIDENDS AND PAYING AGENTS.Not applicable.G. STATEMENT BY EXPERTS.None.H. DOCUMENTS ON DISPLAY.We previously filed a registration statement on Form F1 (File No. 333166056) with the SEC relating to our initial public offering in May 2010. This transition reportdoes not contain all of the information in the registration statement and the exhibits and financial statements included with the registration statement. References inthis transition report to any of our contracts, agreements or other documents are not necessarily complete, and you should refer to the exhibits attached to theregistration statement for copies of the actual contracts, agreements or documents. In addition, we will file transition reports on Form 20F and submit otherinformation under cover of Form 6K. As a foreign private issuer, we are exempt from the proxy requirements of Section 14 of the Exchange Act and our officers,directors and principal shareholders will be exempt from the insider shortswing disclosure and profit recovery rules of Section 16 of the Exchange Act. You may readand copy the registration statement, the related exhibits and other materials we file with the SEC at the SEC's public reference room in Washington, D.C. at 100 FStreet, Room 1580, N.E., Washington, D.C.20549. You can also request copies of those documents, upon payment of a duplicating fee, by writing to the SEC. Pleasecall the SEC at 1800SEC0330 for further information on the operation of the public reference rooms. The SEC also maintains an Internet site that contains reports,proxy and information statements and other information regarding issuers that file with the SEC. The website address is http://www.sec.gov. You may also request acopy of these filings, at no cost, by writing us at LAB 32, SOHO 3Q, No 9, Guanghua Road, Chaoyang District, Beijing, People’s Republic of China, 100020 ortelephoning us at (86) 1085866721.67I. SUBSIDIARY INFORMATIONFor a listing of our subsidiaries, see “Item 4. Information on the Company – C. Organizational Structure.”ITEM 11. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.Interest Rate RiskAs of December 31, 2017, we had no shortterm or longterm borrowings. If we borrow money in future periods, we may be exposed to interest rate risk. Ourexposure to market risk for changes in interest rates relates primarily to the interest income generated by our cash deposits with our banks and heldtomaturityinvestments. We have not used any derivative financial instruments in our investment portfolio. Interest earnings instruments carry a degree of interest rate risk. Wehave not been exposed, nor do we anticipate being exposed to material risks due to changes in interest rates. However, our future interest income may fall short ofexpectations due to changes in interest rates. Foreign Exchange RiskTranslation adjustments amounted to $90,671 and $387,375 gain as of the fiscal year ended December 31, 2017 and 2016, respectively. The Companytranslated balance sheet amounts with the exception of equity at December 31, 2017 at RMB 6.5342 to $1.00 as compared to RMB 6.9370 to $1.00 at December 31,2016. The Company stated equity accounts at their historical rate. The average translation rates applied to income statement accounts for the fiscal year endedDecember 31, 2017 and 2016 were RMB6.7356 and RMB 6.7153 to US$1.00, respectively. So far, the PRC government has been able to manage a stable exchange ratebetween RMB and the U.S. Dollar. Our future downward translation adjustments may occur and can be significant due to changes in such exchange rate.If we decide to convert our RMB into U.S. dollars for the purpose of making payments for dividends on our ordinary shares or for other business purposes,appreciation of the U.S. dollar against the RMB would have a negative effect on the U.S. dollar amount available to us.The PRC government imposes strict restrictions on PRC resident companies regarding converting RMB into foreign currencies and vice versa under capitalaccount transactions, such as receiving equity investments from outside of the PRC, making equity investments outside of the PRC, borrowing money from orlending money outside of the PRC, and repaying debt or remitting liquidated assets and/or accumulated profits outside of the PRC. These transactions have to beapproved by the relevant PRC government authorities, including but not limited to the commerce bureau, the tax bureau and the State Administration of ForeignExchange, or SAFE, and have to be conducted at banks entrusted by the local SAFE branch. As our business continues to grow, we may need to continuouslyfinance our PRC subsidiaries by raising capital from outside of the PRC. The restriction on converting RMB into foreign currencies, and vice versa, may limit ourability to use capital resources from outside of the PRC. Such restrictions may also limit our ability to remit profits from our PRC subsidiaries outside of the PRC,therefore potentially limiting our ability to pay dividends to our shareholders. In addition, such restrictions will limit our ability to freely transfer temporary excesscash in our or our subsidiaries’ bank accounts in and out of the PRC, therefore limiting our ability to conduct crossborder cash management activities to optimizethe utilization of our cash.InflationAlthough China has experienced an increasing inflation rate, inflation has not had a material impact on our results of operations in recent years. Accordingto the National Bureau of Statistics of China, the change in the consumer price index in China was 0.46%, (0.77%), and 1.16% in 2001, 2002 and 2003, respectively.However, in connection with a 3.9% increase in 2004, the PRC government announced measures to restrict lending and investment in China in order to reduceinflationary pressures in China’s economy. Following the government’s actions, the consumer price index decreased to 1.8% in 2005 and to 1.5% in 2006. In 2007, theconsumer price index increased to 4.8%. In response, China’s central bank, the People’s Bank of China, announced that the bank reserve ratio would rise half apercentage point to 15.5% in an effort to reduce inflation pressures. China’s consumer price index growth rate reached 8.7% year over year in 2008. In 2009 and 2010,the change in the consumer price index in China was minus 0.7% and 3.3%.China consumer price index in November 2017 was 3.8% higher than that of the same period in 2016. China consumer price index in December 2016 was2.4% higher than that of the same period in 2015. China consumer price index in December 2015 was 4.8% higher than that of the same period in 2014. Chinaconsumer price index in December 2014 was 3.3% higher than that of the same period in 2013. The results of the PRC government’s actions to combat inflation aredifficult to predict. Adverse changes in the Chinese economy, if any, will likely impact the financial performance of a variety of industries in China that use, or wouldbe candidates to use, our software products and services.68ITEM 12. DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES.A. DEBT SECURITIES.Not applicable. B. WARRANTS AND RIGHTS.Not applicable.C. OTHER SECURITIES.Not applicable.D. AMERICAN DEPOSITARY SHARES.The Bank of New York Mellon, as depositary (the “Depositary”) for the Company’s ADR facility, notified the owners and holders of the Company’s ADSsthat the ADS facility will terminate effective at 5:00 p.m. (Eastern Time) on September 19, 2018. Under the terms of the Deposit Agreement among the Company, theDepositary and the owners and holders of ADSs of the Company (the “Deposit Agreement”), owners and holders of the Company’s ADSs have until at leastJanuary 21, 2019 to surrender their ADSs to the Depositary for delivery of the underlying ordinary shares of the Company. Subsequent to January 21, 2019, underthe terms of the Deposit Agreement, the Depositary may attempt to sell any ordinary shares remaining on deposit with the Depositary. If the Depositary sells suchunderlying ordinary shares or receives value for such shares, holders must surrender their ADSs to obtain payment of the sale proceeds, net of expenses andapplicable tax and charges. We completed the voluntary delisting of our ADSs from the NASDAQ Capital Market on September 19, 2018.You may hold ADSs either (A) directly (i) by having ADSs registered in your name in the Direct Registration System, or (ii) by having an Americandepositary receipt, also referred to as an ADR, which is a certificate evidencing a specific number of ADSs, registered in your name, or (B) indirectly by holding asecurity entitlement in ADSs through your broker or other financial institution. If you hold ADSs directly, you are a registered ADS holder, also referred to as anADS holder. This description assumes you are an ADS holder. If you hold the ADSs indirectly, you must rely on the procedures of your broker or other financialinstitution to assert the rights of ADS holders described in this section. You should consult with your broker or financial institution to find out what thoseprocedures are.The Direct Registration System, or DRS, is a system administered by The Depository Trust Company, also referred to as DTC, pursuant to which thedepositary may register the ownership of uncertificated ADSs, which ownership will be confirmed by periodic statements sent by the depositary to the registeredholders of uncertificated ADSs.69As an ADS holder, you will not be treated as one of our registered shareholders and you will not have direct shareholder rights. British Virgin Island’s lawgoverns our direct shareholders’ rights. The depositary will be the holder of the shares underlying your ADSs. As a registered holder of ADSs, you will have ADSholder rights. A Deposit Agreement among us, the depositary and you, as an ADS holder, and all other persons indirectly holding ADSs, sets out ADS holder rightsas well as the rights and obligations of the depositary. New York law governs the Deposit Agreement and the ADSs.The following is a summary of the material provisions of the Deposit Agreement. For more complete information, you should read the entire DepositAgreement and the form of ADS, which contains the terms of the ADSs. The Deposit Agreement is filed as an exhibit to our registration statement filed on Form F1.You may obtain the registration statement and the attached Deposit Agreement from the SEC’s website at http://www.sec.gov. You may also obtain a copy of theDeposit Agreement at the SEC’s Public Reference Room, which is located at 100 F Street, NE, Washington, DC 20549. You may obtain information on the operationof the Public Reference Room by calling the SEC at 18007320330. Fees and ExpensesPersons depositing or withdrawing shares or ADS holders must pay:For:$5.00 (or less) per 100 ADSs (or portion of 100 ADSs)Issuance of ADSs, including issuances resulting from a distribution of shares orrights or other propertyCancellation of ADSs for the purpose of withdrawal, including if the DepositAgreement terminates$.05 (or less) per ADSAny cash distribution to ADS holdersA fee equivalent to the fee that would be payable if securities distributed to youhad been shares and the shares had been deposited for issuance of ADSsDistribution of securities distributed to holders of deposited securities whichare distributed by the depositary to ADS holders$.05 (or less) per ADSs per calendar yearDepositary servicesRegistration or transfer feesTransfer and registration of shares on our share register to or from the name ofthe depositary or its agent when you deposit or withdraw sharesExpenses of the depositaryCable, telex and facsimile transmissions (when expressly provided in the DepositAgreement) converting foreign currency to U.S. dollarsTaxes and other governmental charges the depositary or the custodian have topay on any ADS or share underlying an ADS, for example, share transfer taxes,stamp duty or withholding taxesAs necessaryAny charges incurred by the depositary or its agents for servicing the depositedsecuritiesAs necessaryPayment of TaxesHolders of our ADSs are responsible for any taxes or other governmental charges payable on their ADSs or on the deposited securities represented by anyof their ADSs. The depositary may refuse to register any transfer of a holder’s ADSs or allow withdrawal of the deposited securities represented by the ADSs untilsuch taxes or other charges are paid. It may apply payments owed to the holder or sell deposited securities represented by the ADSs to pay any taxes owed and theholder will remain liable for any deficiency. If the depositary sells deposited securities, it will, if appropriate, reduce the number of ADSs to reflect the sale and pay toADS holders any proceeds, or send to ADS holders any property, remaining after it has paid the taxes.70PART IIITEM 13. DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES.None.ITEM 14. MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS.Use of Proceeds.We completed our initial public offering on May 14, 2010 (the “IPO”), which generated net proceeds of approximately $14.6 million. All remaining cash onhand from the proceeds of our IPO was transferred to C Media Limited and its subsidiaries following the completion of the asset exchange transactions on August17, 2018.ITEM 15. CONTROLS AND PROCEDURES.Disclosure Controls and ProceduresOur Chief Executive Officer and Chief Financial Officer have reviewed and evaluated the effectiveness of our disclosure controls and procedures, whichincluded inquiries made to certain other of our employees. The term “disclosure controls and procedures,” as defined in Rules 13a15(e) and 15d15(e) under theExchange Act, means controls and other procedures of a company that are designed to ensure that information required to be disclosed by a company in thereports, such as this report, that it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in theSEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to bedisclosed by a company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the company’s management, including itsprincipal executive and principal financial officers, as appropriate to allow timely decisions regarding required disclosure. Management recognizes that any controlsand procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives and management necessarilyapplies its judgment in evaluating the costbenefit relationship of possible controls and procedures. Based on that evaluation, our Chief Executive Officer and ChiefFinancial Officer have each concluded that, as of December 31, 2017, the Company’s disclosure controls and procedures were not effective due to the materialweakness described in the “Management’s Report on Internal Control over Financial Reporting” section below.Management’s Report on Internal Control Over Financial ReportingOur management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Exchange ActRules 13a15(f) and 15d15(f). Internal control over financial reporting refers to the process designed by, or under the supervision of, our principal executive officerand principal financial officer, and effected by our Board of Directors, management and other personnel, to provide reasonable assurance regarding the reliability offinancial reporting and the preparation of financial statements for external purposes in accordance with U.S. GAAP and includes those policies and procedures that(i) pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of the assets of the Company; (ii)provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with U.S. GAAP, and thatreceipts and expenditures of the Company are being made only in accordance with authorizations of management and directors of the Company; and (iii) providereasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the Company’s assets that could have a materialeffect on the financial statements.71Any system of internal control, no matter how well designed, has inherent limitations. Therefore, even those systems determined to be effective canprovide only reasonable assurance with respect to financial statement preparation and presentation. Because of the inherent limitations of internal control, there is arisk that material misstatements may not be prevented or detected on a timely basis by internal control over financial reporting. However, these inherent limitationsare known features of the financial reporting process. Therefore, it is possible to design into the process safeguards to reduce, though not eliminate, this risk.Management assessed our internal control over financial reporting as of the year ended December 31, 2017. In making this assessment, management usedthe criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in the 2014 report entitled "Internal ControlIntegratedFramework." The COSO framework summarizes each of the components of a company’s internal control system, including (i) the control environment, (ii) riskassessment, (iii) control activities, (iv) information and communication, and (v) monitoring. Based on such assessment, management concluded that its internalcontrol over financial reporting as of December 31, 2017 was not effective because of the following material weakness:Lack of U.S. GAAP expertise. Although our accounting personnel are professional and experienced in accounting requirements and procedures generallyaccepted in the PRC, they do not have sufficient knowledge, experience and training in maintaining our books and records and preparing financial statements inaccordance with U.S. GAAP standards and SEC rules and regulations. The staff needs additional training to become experienced in U.S. GAAPbased reporting,including the skills of U.S. GAAPbased period end closing, consolidation of financial statements, and U.S. GAAP conversion.In order to address the above material weakness, our management plans to take the following steps:We will employ, as needed, outside professionals to provide key accounting personnel ongoing technical trainings to ensure their proper understanding ofU.S. GAAP and newly announced accounting standards.The Company believes the foregoing measures will remediate the identified material weakness in future periods. The Company is committed to monitoringthe effectiveness of these measures and making any changes that are necessary and appropriate.Notwithstanding the conclusion that its internal control over financial reporting was not effective as of the end of the period covered by this report, ourChief Executive Officer and Chief Financial Officer believe that the financial statements and other information contained in this report present fairly, in all materialrespects, its business, financial condition and results of operations. Nothing has come to the attention of management that causes them to believe that any materialinaccuracies or errors exist in the Company’s financial statements as of December 31, 2017.Attestation report of the registered public accounting firm.This transition report does not include an attestation report of the Company’s registered public accounting firm on internal control over financial reportingbecause the Company is a nonaccelerated filer permanently exempted from section 404(b) of the SarbanesOxley Act.Changes in Internal Control over Financial ReportingThere were no changes in the Company’s internal control over financial reporting that occurred during our fiscal year ended December 31, 2017 that hasmaterially affected or is reasonably likely to materially affect our internal control over financial reporting.ITEM 16. [RESERVED]ITEM 16A. AUDIT COMMITTEE FINANCIAL EXPERT.Our board of directors has determined that Mr. Dennis Galgano qualifies as an audit committee financial expert. Our board of directors has determined thatMessrs. Dennis Galgano, Jin Shi, Jiming Ha and Zhihao Xu meet the definition of an “independent director” under the applicable NASDAQ Rules and under Rule10A3 of the Securities Exchange Act of 1934, as amended.72ITEM 16B. CODE OF ETHICS.Our board of directors has adopted a code of business conduct and ethics applicable to our directors, officers and employees. We have posted the code onour website at http://www.luokung.com.ITEM 16C. PRINCIPAL ACCOUNTANT FEES AND SERVICES.Audit FeesThe aggregate fees billed by Moore Stephens CPA Limited for professional services rendered for the audit of our financial information disclosed in thistransition report on Form 20F was $280,000 for the two years ended December 31, 2017 and 2016.The aggregate fees billed by our previous auditor, BDO China Shu Lun Pan Certified Public Accountants LLP for professional services rendered for theaudit of our annual financial information included in our annual reports on Form 20F was $105,500 for each of the fiscal years ended September 30, 2017, 2016 and2015.Tax FeesWe did not engage our principal accountants to provide tax or related services during the last two fiscal years.All Other FeesWe did not engage our principal accountants to render services to us during the last two fiscal years, other than as reported above.ITEM 16D. EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES.Not applicable.ITEM 16E. PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS.Not applicable.ITEM 16F. CHANGE IN REGISTRANT’S CERTIFYING ACCOUNTANT.Not applicable.ITEM 16G. CORPORATE GOVERNANCE.We are incorporated in the BVI and our corporate governance practices are governed by applicable BVI law as well as our memorandum and articles ofassociation. In addition, because our ADSs are listed on NASDAQ, we are subject to NASDAQ’s corporate governance requirements. NASDAQ Listing Rule5620(a) requires each issuer to hold an annual meeting of shareholders no later than one year after the end of the issuer’s fiscal year end. However, NASDAQ ListingRule 5615(a)(3) permits a foreign private issuer like us to follow home country practices in lieu of certain requirements of Listing Rule 5600, provided that suchforeign private issuer discloses in its transition report filed with the SEC each requirement of Rule 5600 that it does not follow and describes the home countrypractice followed in lieu of such requirement. We follow home country practice with respect to annual meetings and did not hold an annual shareholder meeting inthe year ended December 31, 2017. We may, however, hold annual shareholder meetings in the future if there are significant issues that require shareholders’approvals.ITEM 16H. MINE SAFETY DISCLOSURE.Not applicable.73PART IIIITEM 17. FINANCIAL STATEMENTS.We have elected to provide financial statements and related information specified in Item 18.ITEM 18. FINANCIAL STATEMENTS.See “Index to Consolidated Financial Statements” for a list of all financial statements filed as part of this transition report. The Financial Statements arebeginning on page F1.ITEM 19. EXHIBITS.See the Exhibit Index following the signature page of this report, which is incorporated herein by reference.74SIGNATURESThe registrant hereby certifies that it meets all of the requirements for filing on Form 20F and that it has duly caused and authorized the undersigned tosign this transition report on its behalf.LUOKUNG TECHNOLOGY CORP.By:/s/ Xuesong Song Xuesong SongChief Executive Officer(principal executive officer)October 12, 201875EXHIBIT INDEXThe following documents are filed as part of this transition report on Form 20F.ExhibitNumberDescription1.1Amended and Restated Memorandum of Association and Articles of Association of Luokung Technology Corp., dated August 20, 2018, and ascurrently in effect.2.1*Deposit Agreement among the Company, depositary and holders of the American Depositary Receipts.2.2*Form of American Depositary Receipt.2.3*English translation of Entrusted Management Agreement dated December 15, 2009 between Xi’an Softech Co., Ltd., Xi’an Kingtone InformationTechnology Co., Ltd. and the shareholders of Xi’an Kingtone Information Technology Co., Ltd.3.1*English translation of Shareholder’s Voting Proxy Agreement dated December 15, 2009 between Xi’an Softech Co., Ltd., Xi’an Kingtone InformationTechnology Co., Ltd. and the shareholders of Xi’an Kingtone Information Technology Co., Ltd.4.1*English translation of Exclusive Technology Service Agreement dated December 15, 2009 between Xi’an Softech Co., Ltd. and Xi’an KingtoneInformation Technology Co., Ltd.4.2*English translation of Exclusive Option Agreement dated December 15, 2009 between Xi’an Softech Co., Ltd., Xi’an Kingtone InformationTechnology Co., Ltd. and the shareholders of Xi’an Kingtone Information Technology Co., Ltd.4.3*English translation of Equity Pledge Agreement dated December 15, 2009 between Xi’an Softech Co., Ltd., Xi’an Kingtone Information TechnologyCo., Ltd. and the shareholders of Xi’an Kingtone Information Technology Co., Ltd.4.4*English translation of Loan Agreement dated September 14, 2009 between Xi’an Kingtone Information Technology Co., Ltd. and Xian CityCommercial Bank.4.5*English translation of Mortgage Agreement dated September 14, 2009 between Xi’an Kingtone Information Technology Co., Ltd. and Xian CityCommercial Bank.4.6*English translation of Form of Employment Agreement entered into between the Company and the Company’s executive officers.4.7*2010 Omnibus Incentive Plan of the Company.4.8**English translation of Project Construction Contract dated August 10, 2010 between Xi’an Hu County Yuxing Agriculture Science & TechnologyCo., Ltd. and Xi’an Kingtone Information Technology Co., Ltd.4.9***Asset Exchange Agreement by and between C Media Limited and the Company dated as of January 25, 2018.4.10***Securities Purchase Agreement by and among Redstone YYL Management Limited and five shareholders holding majority of the shares of theCompany dated as of January 25, 2018.4.15Exclusive Business Cooperation Agreement by and between Zhongchuan Tianxia Information Technology (Shenzhen) Co., Ltd., and Beijing MobileVision Technology Co., Ltd., dated August 31, 2015.764.16Exclusive Option Agreement by and among Zhongchuan Tianxia Information Technology (Shenzhen) Co., Ltd., Xuesong Song, Weili Chen, PingWang, Donglai Liu, and Beijing Mobile Vision Technology Co., Ltd., dated August 31, 2015.4.17Equity Interest Pledge Agreement by and among Zhongchuan Tianxia Information Technology (Shenzhen) Co., Ltd., Xuesong Song, Weili Chen, PingWang, Donglai Liu, and Beijing Mobile Vision Technology Co., Ltd., dated August 31, 2015.4.18Addendum to Asset Exchange Agreement by and among the Company, Topsky Infotech Holdings Pte Ltd. and C Media Limited, dated October 3,2018. Incorporated by reference to the Company’s Current Report on Form 6K filed on October 4, 2018.4.19Stock Purchase Agreement, dated August 25, 2018, by and among the Company, LK Technology Ltd., and the shareholders listedtherein. Incorporated by reference to the Company’s Current Report on Form 6K filed on August 27, 2018.4.20Power of Attorney by Weili Chen, dated August 31, 2015.4.21Power of Attorney by Ping Wang, dated August 31, 2015.4.22Power of Attorney by Donglai Liu, dated August 31, 2015.4.23Power of Attorney by Xuesong Song, dated August 31, 2015.8.1List of Subsidiaries and Consolidated Variable Interest Entities10.1Employment Agreement, dated August 19, 2018, between Luokung Technology Corp. and Xuesong Song.†10.2Employment Agreement, dated August 19, 2018, by and between Luokung Technology Corp. and Jie Yu.†12.1Certification of Chief Executive Officer required by Rule 13a14(a).12.2Certification of Chief Financial Officer required by Rule 13a14(a).13.1Certification of Chief Executive Officer required by Rule 13a14(a).13.2Certification of Chief Financial Officer required by Rule 13a14(a).101.INSXBRL Instance Document.101.SCHXBRL Taxonomy Extension Schema Document.101.CALXBRL Taxonomy Extension Calculation Linkbase Document.101.DEFXBRL Taxonomy Extension Definition Linkbase Document.101.LABXBRL Taxonomy Extension Label Linkbase Document.101.PREXBRL Taxonomy Extension Presentation Linkbase Document.*Previously filed as an exhibit to the Company’s Registration Statement on Form F1 (Reg. No. 333166056) filed with the Commission and incorporated hereinby reference.**Previously filed as exhibits to the Company’s Transition Report on Form 20F filed with the Commission on January 20, 2011 and incorporated herein byreference.***Previously filed as exhibits to the Company’s Annual Report on Form 20F filed with the Commission on February 9, 2018 and incorporated herein byreference.†Indicates management contract or compensatory plan, contract or arrangement.77LK Technology Ltd. and SubsidiariesCONSOLIDATED FINANCIAL STATEMENTSTABLE OF CONTENTSPage(s)Report of Independent Registered Public Accounting FirmF2Consolidated Financial StatementsConsolidated Balance SheetsF3Consolidated Statements of Operations and Comprehensive LossF4application.Chuang (Vincent) Tao was appointed as a member of the Board effective on August 25, 2018. Dr. Tao was the Chairman of SuperEngine Suzhou from 2014to 2017. Dr. Tao has been the president of the Seasky Angel Investment Alliance of Shanghai since 2015. Dr. Tao received his Bachelor Degree of geographicinformation and telemetry from Wuhan University in China in 1990 and received his Ph.D. from University of Calgary, Canada in 1997.Dennis Galgano was appointed as a director of the Company following the consummation of the asset exchange agreement. He was a registered consultantwith Morgan Joseph Triartisan LLC from November 2016 until October 2017, and previously served as vice chairman and head of international investment bankingfor Morgan Joseph Triartisan LLC, which is a registered broker dealer engaged in the investment banking and financial advisory industry. Mr. Galgano received aB.S. degree in Chemistry from St. John’s University and an M.B.A. from The Wharton School in 1972.Jin Shi was appointed as a director of the Company following the consummation of the asset exchange transactions. Mr. Shi has served as the managingpartner of Chum Capital Group, a merchant bank focused on helping Chinese growth companies to access global capital, since January 2013. Mr. Shi has also servedas a director of Seven Stars Cloud Group, Inc. (NASDAQ: SSC), a premium video on demand service provider, since January 2014, and joined the audit committee ofits board of directors in March 2016. He also served as a director and member of the audit committee of Pingtan Marine Enterprise, Ltd. (NASDAQ: PME), a marineenterprise group primarily engaged in ocean fishing through its subsidiaries. Mr. Shi received an EMBA degree from the Guanghua Management School of BeijingUniversity, and a Bachelor’s degree of science in Chemical Engineering from Tianjin University.Jiming Ha was appointed as a director of the Company following the consummation of the asset exchange agreement, and has also served as a seniorresearch fellow for the China Finance 40 Forum since March 1, 2018, and previously served as a managing director of Goldman Sachs from January 2017 to April2017. Mr. Ha served as a vice chairman and chief investment strategist of the Investment Strategy Group for Private Wealth Management at Goldman Sachs from2010 to January 2017. Mr. Ha holds a PhD in Economics from the University of Kansas and Master’s and Bachelor’s degrees of science from Fudan University.Zhihao Xu was appointed as a director of the Company following the consummation of the asset exchange transactions. Mr. Xu has served as the chiefexecutive officer of Geely Group Co., Ltd., in Hangzhou, China, since December 2017, and previously served as the chairman and chief executive officer of BeijingDingchengrenhe Investment Co., Ltd., a funds management company, from January 2017 to December 2017. Mr. Xu served as the chairman of president of HNAUSOLV CO., LTD., and the chief innovation officer of HNA Logistics Group from January 2014 to December 2016, and prior to that as the chairman of GopayInnovation Technology Co. Ltd., an online payment system operator supporting online money transfers, from April 2012 to January 2014. Mr. Xu graduated from theBusiness School of Renmin University of China and from the Wudaokou Finance College of Tsinghua University with a fund qualification certificate and securitiesqualification certificate.B. COMPENSATION.Compensation of Directors and Executive OfficersFor the ninemonth transition period ended September 30, 2018 and the fiscal year ended December 31, 2017, we did not pay any cash compensation to ourexecutive officers of LK Technology Ltd. and a to our directors for serving on our board of directors of LK Technology Ltd.37Other than nonemployee directors, we do not intend to compensate directors for serving on our board of directors or any of its committees. We do,however, intend to reimburse each member of our board of directors for outofpocket expenses incurred by each director in connection with attending meetings ofthe board of directors and its committees.AdministrationThe Incentive Plan is administered by our board of directors, or at the discretion of the board, by our compensation committee. Our board of directors hasdelegated authority to our compensation committee to administer the Incentive Plan. Subject to the terms of the Incentive Plan, the compensation committee mayselect participants to receive awards, determine the types of awards and terms and conditions of awards, and interpret provisions of the Incentive Plan.The ordinary shares issued or to be issued under the Incentive Plan consist of authorized but unissued shares. If any ordinary shares covered by an awardare not purchased or are forfeited, or if an award otherwise terminates without delivery of any ordinary shares, then the number of ordinary shares counted againstthe aggregate number of ordinary shares available under the plan with respect to the award will, to the extent of any such forfeiture or termination, again be availablefor making awards under the Incentive Plan.EligibilityAwards may be made under the Incentive Plan to our employees, officers, directors, consultants or advisers or to any of our affiliates, and to any otherindividual whose participation in the Incentive Plan is determined to be in our best interests by our board of directors.Amendment or Termination of the PlanOur board of directors may terminate or amend the Incentive Plan at any time and for any reason. No amendment, however, may adversely impair the rightsof grantees with respect to outstanding awards. The Incentive Plan has a term of ten years. Amendments will be submitted for shareholder approval to the extentrequired by applicable stock exchange listing requirements or other applicable laws.OptionsThe Incentive Plan permits the granting of options to purchase ordinary shares intended to qualify as incentive share options under the Internal RevenueCode and share options that do not qualify as incentive share options, or nonqualified share options.The exercise price of each share option may not be less than 100% of the fair market value of our ADSs representing ordinary shares on the date of grant.In the case of certain 10% shareholders who receive incentive share options, the exercise price may not be less than 110% of the fair market value of our ADSsrepresenting ordinary shares on the date of grant. An exception to these requirements is made for options that we grant in substitution for options held byemployees of companies that we acquire. In such a case the exercise price is adjusted to preserve the economic value of the employee’s share option from his or herformer employer.The term of each share option is fixed by the compensation committee and may not exceed ten years from the date of grant. The compensation committeedetermines at what time or times each option may be exercised and the period of time, if any, after retirement, death, disability or termination of employment duringwhich options may be exercised.Options may be made exercisable in installments. The award agreement provides the vesting of the options. Exercisability of options may be accelerated bythe compensation committee.38In general, an optionee may pay the exercise price of an option by (1) cash or check (in U.S. dollars or Renminbi or other local currency as approved by thecompensation committee), (2) ordinary shares held for such period of time as may be required by the compensation committee, (3) delivery of a notice of a marketorder with a broker with respect to ordinary shares then issuable upon exercise of an option, and that the broker has been directed to pay us a sufficient portion ofnet proceeds of the sale in satisfaction of the exercise price, provided that payment of such proceeds is then made to us upon settlement of such sale, (4) otherproperty acceptable to the compensation committee with a fair market value equal to the exercise price, (5) cashless exercise or (6) any combination of the foregoing.Share options granted under the Incentive Plan may not be sold, transferred, pledged, or assigned other than by will or under applicable laws of descentand distribution. However, we may permit limited transfers of nonqualified options for the benefit of immediate family members of grantees to help with estateplanning concerns or pursuant to a domestic relations order in settlement of marital property rights.Other AwardsThe compensation committee may also award under the Incentive Plan:1.ordinary shares subject to restrictions;2.deferred ordinary shares, credited as deferred ordinary share units, but ultimately payable in the form of unrestricted ordinary shares inaccordance with the terms of the grant or with the participant’s deferral election;3.ordinary share units subject to restrictions;4.unrestricted ordinary shares, which are ordinary shares issued at no cost or for a purchase price determined by the compensation committee whichare free from any restrictions under the 2011 Omnibus Incentive Plan;5.dividend equivalent rights entitling the grantee to receive credits for dividends that would be paid if the grantee had held a specified number ofordinary shares; or6.a right to receive a number of ordinary shares or, in the discretion of the compensation committee, an amount in cash or a combination of ordinaryshares and cash, based on the increase in the fair market value of the ADSs representing ordinary shares underlying the right during a statedperiod specified by the compensation committee.Effect of Certain Corporate TransactionsCertain change of control transactions involving us may cause awards granted under the Incentive Plan to vest, unless the awards are continued orsubstituted for by the surviving company in connection with the corporate transaction.Unless otherwise provided in the appropriate option agreement on the date of grant or provided by our board of directors thereafter with the consent of thegrantee, options granted under the Incentive Plan become exercisable in full following (1) a dissolution of our company or a merger, consolidation or reorganizationof our company with one or more other entities in which we are not the surviving entity, (2) a sale of substantially all of our assets to another person or entity, or (3)any transaction (including without limitation a merger or reorganization in which we are the surviving entity) which results in any person or entity owning 50% ormore of the combined voting power of all classes of our shares.39Adjustments for Dividends and Similar EventsThe compensation committee will make appropriate adjustments in outstanding awards and the number of ordinary shares available for issuance under theIncentive Plan, including the individual limitations on awards, to reflect ordinary share dividends, stock splits and other similar events.C. BOARD PRACTICES.Board of DirectorsOur board of directors consists of six members being Messrs. Xuesong Song, Kegang Peng, Dennis Galgano, Jin Shi, Jiming Ha and Zhiaho Xu. Ourdirectors hold office until our annual meeting of shareholders, where their successors will be duly elected and qualified, or until the directors’ death, resignation orremoval, whichever is earlier. Our directors are not subject to a term of office and hold office until their resignation, death or incapacity or until their respectivesuccessors have been elected and qualified in accordance with our fourth amended and restated memorandum of association and articles of association. A directorwill be removed from office if, among other things, the director (1) becomes bankrupt, (2) dies or becomes of unsound mind, or (3) is absent from meetings of ourboard of directors for six consecutive months without leave and our board of directors resolves that the office is vacated. A director is not entitled to any specialbenefits upon termination of service with the company.Director IndependenceOur board of directors consists of six members; Messrs. Dennis Galgano, Jin Shi, Jiming Ha and Zhihao Xu have been determined by us to be independentdirectors within the meaning of the independent director guidelines of the NASDAQ Corporate Governance Rules (the “NASDAQ Rules”).Committees of Our Board of DirectorsTo enhance our corporate governance, we established three committees under our board of directors: an audit committee, a compensation committee, and anominating and corporate governance committee. We have adopted a charter for each of these committees. The committees have the following functions andmembers.Audit CommitteeOur audit committee reports to our board of directors regarding the appointment of our independent public accountants, the scope and results of ourannual audits, compliance with our accounting and financial policies and management’s procedures and policies relating to the adequacy of our internal accountingcontrols. Our audit committee consists of Messrs. Dennis Galgano, Jin Shi, and Jiming Ha. Mr. Galgano, having accounting and financial management expertise,serves as the chairman of the audit committee and is an “audit committee financial expert” as defined by the rules and regulations of the SEC. Our board of directorshas determined that each of these persons meet the definition of an “independent director” under the applicable NASDAQ Rules and under Rule 10A3 of theSecurities Exchange Act of 1934, as amended (the “Exchange Act”).Our audit committee is responsible for, among other things:●the appointment, evaluation, compensation, oversight and termination of the work of our independent auditor (including resolution of disagreementsbetween management and the independent auditor regarding financial reporting);●an annual performance evaluation of the audit committee;●establishing procedures for the receipt, retention and treatment of complaints regarding accounting, internal accounting controls, auditing matters orpotential violations of law, and the confidential, anonymous submission by our employees of concerns regarding questionable accounting or auditingmatters or potential violations of law;40●ensuring that it receives an transition report from our independent auditor describing our internal control procedures and any steps taken to deal withmaterial control deficiencies and attesting to the auditor’s independence and describing all relationships between the auditor and us;●reviewing our annual audited financial statements and quarterly financial statements with management and our independent auditor;●reviewing and approving all proposed related party transactions;●reviewing our policies with respect to risk assessment and risk management;●meeting separately and periodically with management and our independent auditor; and●reporting regularly to our board of directors.Compensation CommitteeOur compensation committee assists the board of directors in reviewing and approving the compensation structure of our directors and executive officers,including all forms of compensation to be provided to our directors and executive officers. In addition, the compensation committee reviews share compensationarrangements for all of our other employees. Members of the compensation committee are not prohibited from direct involvement in determining their owncompensation. Our chief executive officer is not permitted to be present at any committee meeting during which his or her compensation is deliberated. Ourcompensation committee consists of Dennis Galgano and Jin Shi, with Mr. Shi serving as the chairman of the compensation committee. Our board of directors hasdetermined that each of these persons meet the definition of “independent director” under the applicable requirements of the NASDAQ Rules.Our compensation committee is responsible for, among other things:●reviewing and approving corporate goals and objectives relevant to the compensation of our chief executive officer, evaluating the performance of ourchief executive officer in light of those goals and objectives and setting the compensation level of our chief executive officer based on this evaluation;●reviewing and making recommendations to the board with respect to the compensation of our executives, incentive compensation and equitybasedplans that are subject to board approval; and●providing annual performance evaluations of the compensation committee.Nominating and Corporate Governance CommitteeOur nominating and corporate governance committee assists the board of directors in identifying and selecting or recommending individuals qualified tobecome our directors, developing and recommending corporate governance principles and overseeing the evaluation of our board of directors and management. Ournominating and corporate governance committee consists of Jiming Ha and Zhihao Xue, with Mr. Ha serving as the chairman of the nominating and corporategovernance committee. Our board of directors has determined that each of these persons meet the definition of “independent director” under the applicablerequirements of the NASDAQ Rules.Our nominating and corporate governance committee is responsible for, among other things:●selecting and recommending to our board nominees for election or reelection to our board, or for appointment to fill any vacancy;●reviewing annually with our board the current composition of the board of directors with regards to characteristics such as independence, age, skills,experience and availability of service to us;●selecting and recommending to our board the names of directors to serve as members of the audit committee and the compensation committee, as wellas the nominating and corporate governance committee itself; advising our board of directors periodically with regards to significant developments inthe law and practice of corporate governance as well as our compliance with applicable laws and regulations, and making recommendations to ourboard of directors on all matters of corporate governance and on any remedial action to be taken; and●monitoring compliance with our code of business conduct and ethics, including reviewing the adequacy and effectiveness of our procedures to ensureproper compliance.41Code of Business Conduct and EthicsOur board of directors adopted a code of business conduct and ethics applicable to our directors, officers and employees.Duties of DirectorsUnder British Virgin Islands law, our directors have a duty to act honestly, in good faith and with a view to our best interests. Our directors also have a dutyto exercise care, diligence and skills that a reasonably prudent person would exercise in comparable circumstances. In fulfilling their duty of care to us, our directorsmust ensure compliance with our memorandum of association and articles of association. We have the right to seek damages if a duty owed by our directors isbreached.The functions and powers of our board of directors include, among others:●appointing officers and determining the term of office of the officers;●authorizing the payment of donations to religious, charitable, public or other bodies, clubs, funds or associations as deemed advisable;●exercising the borrowing powers of the company and mortgaging the property of the company;●executing cheques, promissory notes and other negotiable instruments on behalf of the company; and●maintaining or registering a register of mortgages, charges or other encumbrances of the company.Remuneration and BorrowingThe directors may receive such remuneration as our board of directors may determine from time to time. Each director is entitled to be repaid or prepaid alltraveling, hotel and incidental expenses reasonably incurred or expected to be incurred in attending meetings of our board of directors or committees of our board ofdirectors or shareholder meetings or otherwise in connection with the discharge of his or her duties as a director. The compensation committee will assist thedirectors in reviewing and approving the compensation structure for the directors.Our board of directors may exercise all the powers of the company to borrow money and to mortgage or charge our undertakings and property or any partthereof, to issue debentures, debenture stock and other securities whenever money is borrowed or as security for any debt, liability or obligation of the company orof any third party.QualificationA director is not required to hold shares as a qualification to office.42Limitation on Liability and Other Indemnification MattersBritish Virgin Islands law does not limit the extent to which a company’s memorandum of association and articles of association may provide forindemnification of officers and directors, except to the extent any such provision may be held by the British Virgin Islands courts to be contrary to public policy,such as to provide indemnification against civil fraud or the consequences of committing a crime.Under our memorandum of association and articles of association, we may indemnify our directors, officers and liquidators against all expenses, includinglegal fees, and against all judgments, fines and amounts paid in settlement and reasonably incurred in connection with civil, criminal, administrative or investigativeproceedings to which they are party or are threatened to be made a party by reason of their acting as our director, officer or liquidator. To be entitled toindemnification, these persons must have acted honestly and in good faith with a view to the best interest of the company and, in the case of criminal proceedings,they must have had no reasonable cause to believe their conduct was unlawful.Compensation Committee Interlocks and Insider ParticipationNone of the members of our compensation committee is an officer or employee of our company. None of our executive officers currently serves, or in thepast year has served, as a member of the board of directors or compensation committee of any entity that has one or more executive officers serving on our board ofdirectors or compensation committee.Employment AgreementsOn August 19, 2018, the Company entered into an Employment Agreement (the “Song Agreement”) with Mr. Xuesong Song, to serve as the ChiefExecutive Officer of the Company for a fouryear term, subject to renewal. Under the terms of the Song Agreement, Mr. Song will receive no salary for his servicesbut will be eligible for an annual cash bonus in the Board’s sole discretion.On August 19, 2018, the Company entered into an Employment Agreement (the “Yu Agreement”) with Mr. Jie Yu, to serve as the Chief Financial Officer ofthe Company for a fouryear term, subject to renewal. Under the terms of the Yu Agreement, Mr. Yu will receive an annual salary of RMB700,000, and will be eligiblefor an annual cash bonus in the Board’s sole discretion.D. EMPLOYEES.As of September 30, 2018 and December 31, 2017, we had a total of 107 and 37 fulltime employees, including 48 and 13 in research and development, 9 and 2in sales and marketing and the rest in a variety of other divisions, respectively. All of our employees are fulltime employees. None of our employees is currentlyrepresented by a union and/or collective bargaining agreements. We believe that we have good relations with our employees and since our inception we have hadno history of work stoppages or union organizing campaigns.E. SHARE OWNERSHIP.The following table provides information as to the beneficial ownership of our ordinary shares as of October 10, 2018, by the persons listed. Beneficialownership of shares is determined under the rules of the SEC and generally includes any shares over which a person exercises sole or shared voting or investmentpower. For purposes of the following table, a person is deemed to have beneficial ownership of any ordinary shares if such person has the right to acquire suchshares within 60 days of October 10, 2018. For purposes of computing the percentage of outstanding shares held by each person, any shares that such person hasthe right to acquire within 60 days after of October 10, 2018 are deemed to be outstanding, but are not deemed to be outstanding for the purpose of computing thepercentage ownership of any other person. Except as otherwise noted, the persons named in the table have sole voting and investment power with respect to all ofthe ordinary shares beneficially owned by them. Unless otherwise indicated, the address of each person listed is c/o Luokung Technologies, LAB 32, SOHO 3Q, No9, Guanghua Road, Chaoyang District, Beijing, People’s Republic of China.43Percentage ownership in the following table is based on 199,317,558 ordinary shares outstanding on October 10, 2018.Number ofsharesPercent ofclassDirectors and named executive officersCharm Dragon International Limited (1)4,030,8822.03%Xuesong Song, Chairman, Chief Executive Officer and Director(2)38,156,43019.30%Kegang Peng, Vice President and Director (3)17,231,9558.71%Dennis Galgano, Director75,796*%Jin Shi, DirectorJiming Ha, DirectorZhihao Xu, Director (4)7,579,1843.83%Dongpu Zhang, President (5)2,321,7921.17%Chuang Tao, Director (6)1,221,996*%Directors and executive officers as a group (10 persons)66,587,15233.69%(1)Charm Dragon International Limited is a British Virgin Islands company controlled by Mr. Xuesong Song.(2)Consists of (i) 4,030,882 shares owned directly by Charm Dragon International Limited, a British Virgin Islands company and (ii) 22,624,793 shares owneddirectly by Bravo First Development Limited, a British Virgin Islands company. Mr. Xuesong Song is the controlling shareholder of Bravo First DevelopmentLimited. Mr. Xuesong Song is the sole director of Charm Dragon International Limited.(3)Consists of 17,231,955 shares owned directly by Plenty Prestige Enterprises Limited, a British Virgin Islands company. Mr. Kegang Peng is the sole director ofPlenty Prestige Enterprises Limited.(4)Consists of 7,579,184 shares directly owned by Geely Group Limited., a Chinese company. Mr. Zhihao Xu is the Chief Executive Officer of Geely GroupLimited.(5)Consists of 2,321,792 shares owned directly by Genoa Peak Limited, a British Virgin Islands company. Mr. Dongpu Zhang controls Genoa Peak Limited.(6)Consists of 1,221,996 shares owned directly by Globalearth Holdings Limited, a British Virgin Islands company. Mr. Chuang Tao controls Globalearth HoldingsLimited.*Represents less than 1% of shares outstandingITEM 7. MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS.A. MAJOR SHAREHOLDERSPlease refer to Item 6.E “Directors, Senior Management and Employees — Share Ownership.”To our knowledge, (A) we are not directly or indirectly owned or controlled by (i) another corporation or (ii) any foreign government and (B) there are noarrangements (including any announced or expected takeover bid), the operation of which may at a subsequent date result in a change in our control.The voting rights of our major shareholders do not differ from the voting rights of other holders of the same class of shares.44B. RELATED PARTY TRANSACTIONS. BUSINESS RELATIONSHIPS.Our subsidiaries, consolidated affiliated entities, and the subsidiaries of the consolidated affiliated entities have engaged, during the ordinary course ofbusiness, in a number of customary transactions with each other. All of these intercompany balances have been eliminated in consolidation.As of December 31, 2017, we had amounts due from related parties, C Media Limited and Ya Tuo Ji International Consultancy (Beijing) Limited, in theamounts of $11.8 million and $0.2 million, respectively. These amounts due from related parties are short term in nature, noninterest bearing, unsecured andrepayable on demand.As of December 31, 2017, we had amounts due to related parties, Mr. Xuesong Song, our chairman and chief executive officer, Thumb Beijing Branch andThumb Shenzhen Branch, in the amounts of $2.9 million, $0.6 million and $0.03 million, respectively. These amounts due to related parties are short term in nature,noninterest bearing, unsecured and payable on demand.We are party to a series of control agreements with Beijing Zhong Chuan Shi Xun. In addition, our chief executive officer, Mr. Xuesong Song, serves as andofficer of Beijing Zhong Chuan Shi Xun and is a shareholder of Beijing Zhong Chuan Shi Xun. The following table sets forth the relationship of Mr. Song withBeijing Zhong Chuan Shi Xun:NameRelationship withLuokung TechnologyRelationship withBeijing Zhong Chuan Shi XunPercentageOwnership Interest inBeijing Zhong Chuan Shi XunXuesong SongChief Executive OfficerChief Executive Officer61.83%C. INTERESTS OF EXPERTS AND COUNSEL.None.ITEM 8. FINANCIAL INFORMATION.A. CONSOLIDATED STATEMENTS AND OTHER FINANCIAL INFORMATION.See “Item 18. Financial Statements.”Legal ProceedingsTo our knowledge, other than as described below there are no material legal proceedings threatened against us. From time to time, we may be subject tovarious claims and legal actions arising in the ordinary course of business. Following the consummation of the AEA, we became successor in interest to the legalproceedings described below.Litigation with Shanghai Fusheng Weier Intelligent Control Technology Co., Ltd.On January 22, 2016, Zhong Chuan Rui You and Shanghai Fusheng Weier Intelligent Control Technology Co., Ltd. (“Fusheng Weier”) signed a contract forequipment of $1,652,842 (RMB10,800,000). Since Zhong Chuan Rui You did not make the payments of $1,126,381 (RMB7,360,000) on the due dates, Fusheng Weierfiled a lawsuit against Zhong Chuan Rui You in Shanghai Xuhui District People's Court on October 8, 2016. On March 9, 2017, Xuhui District People's Court issuedthe verdict requiring Zhong Chuan Rui You to pay the overdue debts. In August 2017, C Media Limited made the payment of $512,075 (RMB3,346,000). Theremaining balance has been accrued in accounts payable. The payment schedule for the remaining balance is being negotiated by the two parties. On February 5,2018, a hearing was held adding Zhong Chuan Shi Xun as a defendant. The Group plans to settle the remaining balance within one year.45Lawsuit with Gansu Jinlun Culture Media Co., Ltd.On August 22, 2014, Zhong Chuan Rui You and Gansu Jinlun Culture Media Co., Ltd. (“Gansu Jinlun”) signed a “Lanzhou Railway Bureau AirconditionedTrain WiFi Network System Advertising Operation Rights Agreement” for advertising on 72 trains of $1,467,880 (RMB9,604,633). Due to the dispute on theproject implementation, Zhong Chuan Rui You did not pay the advertising fee. On August 23, 2017, Gansu Jinlun filed a lawsuit with Gansu Intermediate People'sCourt. On December 19, 2017, Gansu Intermediate People's Court issued a verdict, ruling that Zhong Chuan Rui You settle the overdue advertising fee. Since only 18out of 72 trains have been installed with Wifi network system, Zhong Chuan Rui You disputed and appealed to the verdict. The next court trial date has not yet beendetermined. C Media and Gansu Jinlun are negotiating a potential settlement to resume the contract. According to the legal counsel, it is probable that the settlementwill amount to approximately $459,000 (RMB3,000,000); therefore, this amount has been accrued in accounts payable as at December 31, 2017.Litigation with Shenzhen Hua Xun Fang Zhou Technology Co., Ltd.On June 16, 2015, Zhong Chuan Rui You signed a cooperation agreement with Shenzhen Hua Xun Fang Zhou Technology Co., Ltd. (“Shenzhen Hua Xun”)and Xuesong Song, a major shareholder of C Media Limited. Pursuant to this agreement, Zhong Chuan Rui You procures equipment from Shenzhen Hua Xun.Xuesong Song acts as a joint liability guarantor for the entire debts of Zhong Chuan Rui You under this agreement. As Zhong Chuan Rui You did not make thepayments on the due dates, Shenzhen Hua Xun filed a lawsuit with Shenzhen Baoan District People's Court on May 31, 2016. On November 1, 2016, Zhong ChuanRui You, Xuesong Song and Shenzhen Hua Xun reached a settlement in Shenzhen Baoan District People's Court to settle $1,735,389 (RMB11,355,000) in fourinstalments. On December 30, 2017, the debt was assigned to C Media Limited.Dividend PolicyWe currently intend to retain all of our available funds and future earnings for use in the operation and expansion of our business and do not anticipatepaying cash dividends in the foreseeable future. Under the terms of our Amended and Restated Memorandum and Articles of Association the declaration andpayment of any dividends in the future will be determined by our board of directors, in its discretion, and will depend on a number of factors, including our earnings,capital requirements and overall financial condition and our ability to receive dividends from our subsidiaries. If we pay any dividends, we will pay our ADS holders’dividends with respect to their underlying shares to the same extent as holders of our ordinary shares, subject to the terms of the deposit agreement, including thefees and expenses payable thereunder. Cash dividends on our ordinary shares, if any, will be paid in U.S. dollars.Our ability to receive dividends from our subsidiaries may limit our ability to pay dividends on our ordinary shares. See Risk Factors – Risks Related toDoing Business in China – Our holding company structure may limit the payment of dividends” and “Item 10. Additional Information – D. Exchange Controls –Dividend Distribution”.B. SIGNIFICANT CHANGES.N/AITEM 9. THE OFFER AND LISTINGA. OFFER AND LISTING DETAILS.Markets and Share Price HistoryOur ordinary shares are not currently listed on any trading market. Our American Depository Shares (“ADSs”) were voluntarily delisted from the NASDAQCapital Market on September 19, 2018. We have applied to NASDAQ for the listing of our ordinary shares on the NASDAQ Capital Market and received an approvalfor listing of Ordinary Shares on August 6, 2018, and as of the date of this transition report, that application and approval are currently under review.46The table below sets forth the high and low reported sales prices in dollars of our ordinary shares, which are represented by ADSs, as reported byNASDAQ in the periods as indicated:ADSHighLowAnnual Highs and Lows (as of the fiscal year end 09/30 for the five most recent full financial years)*20175.592.67201610.21.62Quarterly Highs and Lows (for the two most recent full financial years and any subsequent period, based on calendarquarter end)*2018Third Quarter8.006.30Second Quarter8.824.25First Quarter6.403.702017Fourth Quarter5.592.91Third Quarter3.992.67Second Quarter4.063.07First Quarter5.152.832016Fourth Quarter6.594.20Third Quarter10.201.62Second Quarter3.101.97First Quarter3.602.12Monthly Highs and Lows (for the most recent six months)September 20188.006.41August 20187.706.63July 20187.506.30June 20188.827.55May 20187.805.92April 20187.454.25*The Company effected a 1for10 reverse stock split of its ordinary shares on November 6, 2012 (the “Reverse Split”). The ratio between each AmericanDepositary Share (“ADS”) and its underlying ordinary share postReverse Split remains the same, namely, one ADR remains to represent one ordinary sharepost the Reverse Split. The price listed here after November 6, 2012 reflected the effect from the Reverse Split.B. PLAN OF DISTRIBUTION.Not Applicable.C. MARKETS.Our ordinary shares are not currently listed on any trading market. Our ADSs were voluntarily delisted from the NASDAQ Capital Market on September 19,2018. We have applied to NASDAQ for the listing of our ordinary shares on the NASDAQ Capital Market and received an approval for listing of Ordinary Shares onAugust 6, 2018, and as of the date of this transition report, that application and approval are currently under review.47D. SELLING SHAREHOLDERS.Not applicable.E. DILUTION.Not applicable.F. EXPENSES OF THE ISSUE.Not applicable.ITEM 10. ADDITIONAL INFORMATION.A. SHARE CAPITALNot applicable.B. MEMORANDUM AND ARTICLES OF ASSOCIATIONWe are a British Virgin Islands company incorporated with limited liability and our affairs are governed by the provisions of our memorandum of associationand articles of association, as amended and restated from time to time, and by the provisions of applicable British Virgin Islands law.Our memorandum of association and articles of association authorize the issuance of up to 251,000,000 shares, which are designated into (i) 250,000,000 ofordinary shares of the Company (“Ordinary Shares”), and (ii) 1,000,000 preferred shares of the Company (“Preferred Shares”), in each case with the rights,preferences and privileges as set out in the memorandum and articles of association of the Company.Please see below for a description of our ADSs under “Item 12. Description of Securities Other Than Equity Securities – D. American Depository Shares.”The following is a summary of the material provisions of our ordinary shares and our memorandum of association and articles of association.Ordinary SharesAll of our issued and outstanding ordinary shares are fully paid and nonassessable. Holders of our ordinary shares who are nonresidents of the BritishVirgin Islands may freely hold and vote their shares.Subject to the memorandum and articles of association (and, for greater clarity, without prejudice to any special rights conferred thereby on the holders ofany other shares), an Ordinary Share of the Company confers on the holder:(a)the right to one vote per Ordinary Share at a meeting of the members or on any resolution of members;(b)the right to an equal share in any distribution paid by the Company; and(c)the right to an equal share in the distribution of the surplus assets of the Company on a winding up;48Subject to the memorandum and articles of association (and, for greater clarity, without prejudice to any special rights conferred thereby on the holders ofany other shares), a Preferred Share of the Company confers on the holder:(a)the right to 399 votes per Preferred Share at a meeting of the members or on any resolution of members;(b)the right to an equal share in any distribution paid by the Company;(c)the right to an equal share in the distribution of the surplus assets of the Company on a winding up;(d)be freely transferable, in whole or in part, by Mr. Xuesong Song to any third party through one or more Private Transactions, subject toApplicable Law; and(e)be freely transferable, in whole or in part, by Mr. Xuesong Song to any third party through one or more Public Transactions, subject to ApplicableLaw and Automatic Conversion of such Preferred Share(s) into Ordinary Share(s).Each Preferred Share shall be automatically converted at any time after issue and without the payment of any additional sum into an equal number of fullypaid Ordinary Shares upon the conclusion of any transfer by Mr. Xuesong Song to any third party through one or more Public Transactions.Limitation on Liability and Indemnification MattersUnder British Virgin Islands law, each of our directors and officers, in performing his or her functions, is required to act honestly and in good faith with aview to our best interests and exercise the care, diligence and skill that a reasonably prudent person would exercise in comparable circumstances. Our memorandumof association and articles of association provide that, to the fullest extent permitted by British Virgin Islands law or any other applicable laws, our directors will notbe personally liable to us or our shareholders for any acts or omissions in the performance of their duties. Such limitation of liability does not affect the availabilityof equitable remedies such as injunctive relief or rescission. These provisions will not limit the liability of directors under United States federal securities laws.We may indemnify any of our directors or anyone serving at our request as a director of another entity against all expenses, including legal fees, andagainst all judgments, fines and amounts paid in settlement and reasonably incurred in connection with legal, administrative or investigative proceedings. We mayonly indemnify a director if he or she acted honestly and in good faith with the view to our best interests and, in the case of criminal proceedings, the director hadno reasonable cause to believe that his or her conduct was unlawful. The decision of our board of directors as to whether the director acted honestly and in goodfaith with a view to our best interests and as to whether the director had no reasonable cause to believe that his or her conduct was unlawful, is in the absence offraud sufficient for the purposes of indemnification, unless a question of law is involved. The termination of any proceedings by any judgment, order, settlement,conviction or the entry of no plea does not, by itself, create a presumption that a director did not act honestly and in good faith and with a view to our best interestsor that the director had reasonable cause to believe that his or her conduct was unlawful. If a director to be indemnified has been successful in defense of anyproceedings referred to above, the director is entitled to be indemnified against all expenses, including legal fees, and against all judgments, fines and amounts paidin settlement and reasonably incurred by the director or officer in connection with the proceedings.We may purchase and maintain insurance in relation to any of our directors or officers against any liability asserted against the directors or officers andincurred by the directors or officers in that capacity, whether or not we have or would have had the power to indemnify the directors or officers against the liabilityas provided in our memorandum of association and articles of association.Insofar as indemnification for liabilities arising under the Securities Act may be permitted for our directors or officers under the foregoing provisions, wehave been informed that in the opinion of the Securities and Exchange Commission, such indemnification is against public policy as expressed in the Securities Actand is therefore unenforceable as a matter of United States law.49Differences in Corporate LawWe were incorporated under, and are governed by, the laws of the British Virgin Islands. The corporate statutes of the State of Delaware and the BritishVirgin Islands are similar, and the flexibility available under British Virgin Islands law has enabled us to adopt memorandum of association and articles of associationthat will provide shareholders with rights that do not vary in any material respect from those they would enjoy if we were incorporated under the Delaware GeneralCorporation Law, or Delaware corporate law. Set forth below is a summary of some of the differences between provisions of the BVI Act applicable to us and thelaws application to companies incorporated in Delaware and their shareholders.Director’s Fiduciary DutiesUnder Delaware corporate law, a director of a Delaware corporation has a fiduciary duty to the corporation and its stockholders. This duty has twocomponents: the duty of care and the duty of loyalty. The duty of care requires that a director act in good faith, with the care that an ordinarily prudent personwould exercise under similar circumstances. Under this duty, a director must inform himself of, and disclose to stockholders, all material information reasonablyavailable regarding a significant transaction. The duty of loyalty requires that a director act in a manner he reasonably believes to be in the best interests of thecorporation. He must not use his corporate position for personal gain or advantage. This duty prohibits selfdealing by a director and mandates that the bestinterest of the corporation and its stockholders take precedence over any interest possessed by a director, officer or controlling stockholder and not shared by thestockholders generally. In general, actions of a director are presumed to have been made on an informed basis, in good faith and in the honest belief that the actiontaken was in the best interests of the corporation. However, this presumption may be rebutted by evidence of a breach of one of the fiduciary duties. Should suchevidence be presented concerning a transaction by a director, a director must prove the procedural fairness of the transaction, and that the transaction was of fairvalue to the corporation.British Virgin Islands law provides that every director of a British Virgin Islands company in exercising his powers or performing his duties shall acthonestly and in good faith and in what the director believes to be in the best interests of the company. Additionally, the director shall exercise the care, diligence andskill that a reasonable director would exercise in the same circumstances taking into account the nature of the company, the nature of the decision and the positionof the director and his responsibilities. In addition, British Virgin Islands law provides that a director shall exercise his powers as a director for a proper purpose andshall not act, or agree to the company acting, in a manner that contravenes British Virgin Islands law or the memorandum association or articles of association of thecompany.Amendment of Governing DocumentsUnder Delaware corporate law, with very limited exceptions, a vote of the stockholders is required to amend the certificate of incorporation. Under BritishVirgin Islands law and our memorandum of association and articles of association, (i) our shareholders may amend our memorandum of association and articles ofassociation by a resolution of shareholders, or (ii) our board of directors may amend our memorandum of association and articles of association by a resolution ofdirectors without a requirement for a resolution of shareholders so long as the amendment does not:●restrict the rights of the shareholders to amend the memorandum of association and articles of association;●change the percentage of shareholders required to pass a resolution of shareholders to amend the memorandum of association and articles ofassociation;●amend the memorandum of association and articles of association in circumstances where the memorandum of association and articles ofassociation cannot be amended by the shareholders; or●amend the provisions of memorandum of association or the articles of association pertaining to “rights attaching to shares,” “rights not varied bythe issue of the shares pari passu,” “variation of rights” and “amendment of memorandum and articles”.50Written Consent of DirectorsUnder Delaware corporate law, directors may act by written consent only on the basis of a unanimous vote. Under British Virgin Islands law, directors’consents need only a majority of directors signing to take effect.Written Consent of ShareholdersUnder Delaware corporate law, unless otherwise provided in the certificate of incorporation, any action to be taken at any annual or special meeting ofstockholders of a corporation, may be taken by written consent of the holders of outstanding stock having not less than the minimum number of votes that wouldbe necessary to take such action at a meeting. As permitted by British Virgin Islands law, shareholders’ consents need only a majority of shareholders signing totake effect. Our memorandum of association and articles of association provide that shareholders may approve corporate matters by way of a resolution consentedto at a meeting of shareholders or in writing by a majority of shareholders entitled to vote thereon.Shareholder ProposalsUnder Delaware corporate law, a shareholder has the right to put any proposal before the annual meeting of shareholders, provided it complies with thenotice provisions in the governing documents. A special meeting may be called by the board of directors or any other person authorized to do so in the governingdocuments, but shareholders may be precluded from calling special meetings. British Virgin Islands law and our memorandum of association and articles ofassociation provide that our directors shall call a meeting of the shareholders if requested in writing to do so by shareholders entitled to exercise at least 30% of thevoting rights in respect of the matter for which the meeting is requested.Sale of AssetsUnder Delaware corporate law, a vote of the stockholders is required to approve the sale of assets only when all or substantially all assets are being sold. Inthe British Virgin Islands, shareholder approval is required when more than 50% of the company’s total assets by value are being disposed of or sold.Dissolution; Winding UpUnder Delaware corporate law, unless the board of directors approves the proposal to dissolve, dissolution must be approved by shareholders holding100% of the total voting power of the corporation. Only if the dissolution is initiated by the board of directors may it be approved by a simple majority of thecorporation’s outstanding shares. Delaware corporate law allows a Delaware corporation to include in its certificate of incorporation a supermajority votingrequirement in connection with dissolutions initiated by the board. As permitted by British Virgin Islands law and our memorandum of association and articles ofassociation, we may be voluntarily liquidated under Part XII of the BVI Act by resolution of directors and resolution of shareholders if we have no liabilities and weare able to pay our debts as they fall due.Redemption of SharesUnder Delaware corporate law, any stock may be made subject to redemption by the corporation at its option or at the option of the holders of such stockprovided there remains outstanding shares with full voting power. Such stock may be made redeemable for cash, property or rights, as specified in the certificate ofincorporation or in the resolution of the board of directors providing for the issue of such stock. As permitted by British Virgin Islands law, and our memorandum ofassociation and articles of association, shares may be repurchased, redeemed or otherwise acquired by us. Our directors must determine that immediately followingthe redemption or repurchase we will be able to satisfy our debts as they fall due and the value of our assets exceeds our liabilities.51Variation of Rights of SharesUnder Delaware corporate law, a corporation may vary the rights of a class of shares with the approval of a majority of the outstanding shares of suchclass, unless the certificate of incorporation provides otherwise. As permitted by British Virgin Islands law, and our memorandum of association and articles ofassociation, if our share capital is divided into more than one class of shares, we may vary the rights attached to any class only with the consent in writing ofholders of not less than threefourths of the issued shares of that class and holders of not less than threefourths of the issued shares of any other class of shareswhich may be affected by the variation.Removal of DirectorsUnder Delaware corporate law, a director of a corporation with a classified board may be removed only for cause with the approval of a majority of theoutstanding shares entitled to vote, unless the certificate provides otherwise. As permitted by British Virgin Islands law and our memorandum of association andarticles of association, directors may be removed by resolution of directors or resolution of shareholders.MergersUnder the BVI Act, two or more companies may merge or consolidate in accordance with the statutory provisions. A merger means the merging of two ormore constituent companies into one of the constituent companies, and a consolidation means the uniting of two or more constituent companies into a newcompany. In order to merger or consolidate, the directors of each constituent company must approve a written plan of merger or consolidation which must beauthorized by a resolution of shareholders.Shareholders not otherwise entitled to vote on the merger or consolidation may still acquire the right to vote if the plan of merger or consolidation containsany provision which, if proposed as an amendment to the memorandum association or articles of association, would entitle them to vote as a class or series on theproposed amendment. In any event, all shareholders must be given a copy of the plan of merger or consolidation irrespective of whether they are entitled to vote atthe meeting or consent to the written resolution to approve the plan of merger or consolidation.Inspection of Books and RecordsUnder Delaware corporate law, any shareholder of a corporation may for any proper purpose inspect or make copies of the corporation’s stock ledger, list ofshareholders and other books and records. Holders of our shares have no general right under British Virgin Islands law to inspect or obtain copies of our list ofshareholders or our corporate records. However, we will provide holders of our shares with annual audited financial statements. See “Where You Can FindAdditional Information.”Conflict of InterestThe BVI Act provides that a director shall, after becoming aware that he is interested in a transaction entered into or to be entered into by the company,disclose that interest to the board of directors of the company. The failure of a director to disclose that interest does not affect the validity of a transaction enteredinto by the director or the company, so long as the director’s interest was disclosed to the board prior to the company’s entry into the transaction or was notrequired to be disclosed (for example where the transaction is between the company and the director himself or is otherwise in the ordinary course of business andon usual terms and conditions). As permitted by British Virgin Islands law and our memorandum of association and articles of association, a director interested in aparticular transaction may vote on it, attend meetings at which it is considered, and sign documents on our behalf which relate to the transaction.52Transactions with Interested ShareholdersDelaware corporate law contains a business combination statute applicable to Delaware public corporations whereby, unless the corporation hasspecifically elected not to be governed by such statute by amendment to its certificate of incorporation, it is prohibited from engaging in certain businesscombinations with an “interested shareholder” for three years following the date that such person becomes an interested shareholder. An interested shareholdergenerally is a person or group who or that owns or owned 15% or more of the target’s outstanding voting stock within the past three years. This has the effect oflimiting the ability of a potential acquirer to make a twotiered bid for the target in which all shareholders would not be treated equally. The statute does not apply if,among other things, prior to the date on which such shareholder becomes an interested shareholder, the board of directors approves either the businesscombination or the transaction that resulted in the person becoming an interested shareholder. This encourages any potential acquirer of a Delaware publiccorporation to negotiate the terms of any acquisition transaction with the target’s board of directors.British Virgin Islands law has no comparable provision. As a result, we cannot avail ourselves of the types of protections afforded by the Delawarebusiness combination statute. However, although British Virgin Islands law does not regulate transactions between a company and its significant shareholders, itdoes provide that such transactions must be entered into bona fide in the best interests of the company and not with the effect of constituting a fraud on theminority shareholders.Independent DirectorsThere are no provisions under Delaware corporate law or under the BVI Act that require a majority of our directors to be independent.Cumulative VotingUnder Delaware corporate law, cumulative voting for elections of directors is not permitted unless the company’s certificate of incorporation specificallyprovides for it. Cumulative voting potentially facilitates the representation of minority shareholders on a board of directors since it permits the minority shareholderto cast all the votes to which the shareholder is entitled on a single director, which increases the shareholder’s voting power with respect to electing such director.There are no prohibitions to cumulative voting under the laws of the British Virgin Islands, but our memorandum of association and articles of association do notprovide for cumulative votingAntitakeover Provisions in Our Memorandum of association and articles of associationSome provisions of our memorandum of association and articles of association may discourage, delay or prevent a change in control of our company ormanagement that shareholders may consider favorable, including provisions that authorize our board of directors to issue preference shares in one or more seriesand to designate the price, rights, preferences, privileges and restrictions of such preference shares.C. MATERIAL CONTRACTS.On January 25, 2018, the Company executed an Asset Exchange Agreement (“AEA”) with C Media Limited, a corporation organized under the laws of theCayman Islands (“C Media”), whereby the Company agreed to purchase all the capital stock and equity interests of LK Technology Ltd, together with its whollyowned subsidiaries MMB Limited and Mobile Media (China) Limited and all respective subsidiaries from C Media in exchange for (i) 185,412,599 ordinary shares ofthe Company, par value $0.01 per share (“Ordinary Shares”), (ii) 1,000,000 preferred shares of Kingtone (“Preferred Shares”) and (iii) all issued and outstandingcapital stock or equity interests of the Company’s subsidiary, Topsky InfoTech Holdings Pte Ltd., and its whollyowned subsidiary Xi’an Softech Co., Ltd.,including all entities effectively controlled by Xi’an Softech Co., Ltd. through contractual arrangements and variable business entities.To consummate the contemplated transactions described above, the Company obtained shareholder consent at a special meeting held on May 20, 2018, (i)to authorize 1,000,000 Preferred Shares, (ii) to authorize additional Ordinary Shares so that total authorized Ordinary Shares is equal to 250,000,000 shares, (iii) to listsuch Ordinary Shares on NASDAQ, and (iv) to approve the transactions contemplated in the Asset Exchange Agreement. Additionally, NASDAQ needed toapprove the contemplated transactions prior to consummation thereof. C Media had the right to terminate the AEA if the closing had not occurred (other thanthrough the failure of C Media to comply fully with its obligations under the AEA) on or before July 31, 2018. The transactions contemplated by the AEA wereconsummated on August 17, 2018.53On January 25, 2018, five shareholders of the Company including its largest shareholder and its Chief Executive Officer executed a Securities PurchaseAgreement, whereby such shareholders agreed to sell a total of 617,988 Ordinary Shares and 282,694 American Depository Shares of the Company to Redstone YYLManagement Limited, a company incorporated in the British Virgin Islands, in exchange for an aggregate purchase price of $1,897,860.09.On August 25, 2018, LK Technology entered into a Stock Purchase Agreement (the “Agreement”) with the shareholders (“Shareholders”) of SuperengineHoldings Limited, a limited liability company organized under the laws of the British Virgin Islands (the “Superengine”), pursuant to which LK Technology acquiredall of the issued and outstanding capital stock of Superengine for an aggregate purchase price of US$60 million (the “Purchase Price”), which are paid by theissuance of our Ordinary Shares in an amount equal to the quotient of (x) the Purchase Price divided by (y) the average of the closing prices of the Ordinary Shareson the NASDAQ Capital Market over the 12 months period preceding July 31, 2018. We are a party to the Agreement in connection with the issuance of theOrdinary Shares and certain other limited purposes.D. EXCHANGE CONTROLS.This section sets forth a summary of the most significant regulations or requirements that affect our business activities in China or our shareholders’ rightto receive dividends and other distributions from us.Regulations on Internet Content ProvidersThe Administrative Measures on Internet Information Services, or the Internet Content Measures, which was promulgated by the State Council onSeptember 25, 2000 and amended on January 8, 2011, set out guidelines on the provision of internet information services. The Internet Content Measures specifiesthat internet information services regarding news, publications, education, medical and health care, pharmacy and medical appliances, among other things, arerequired to be examined, approved and regulated by the relevant authorities. Internet information providers are prohibited from providing services beyond thoseincluded in the scope of their licenses or filings. Furthermore, the Internet Content Measures specifies a list of prohibited content. Internet information providers areprohibited from producing, copying, publishing or distributing information that is humiliating or defamatory to others or that infringes the legal rights of others.Internet information providers that violate such prohibition may face criminal charges or administrative sanctions. Internet information providers must monitor andcontrol the information posted on their websites. If any prohibited content is found, they must remove the content immediately, keep a record of such content andreport to the relevant authorities.The Internet Content Measures classifies internet information services into commercial internet information services and noncommercial internetinformation services. Commercial internet information services refer to services that provide information or services to internet users with charge. A provider ofcommercial internet information services must obtain an ICP License.Regulations on Internet Audiovideo Program ServicesOn December 20, 2007, the MII and the State Administration of Press, Publication, Radio, Film and Television, or the SAPPRFT, jointly issued theAdministrative Provisions for the Internet AudioVideo Program Service, or the Audiovideo Program Provisions, which came into effect on January 31, 2008 andwas amended on August 28, 2015. The Audiovideo Program Provisions defines “internet audiovideo program services” as producing, editing and integrating ofaudiovideo programs, supplying audiovideo programs to the public via the internet, and providing audiovideo programs uploading and transmission services to athird party. Entities providing internet audiovideo programs services must obtain an internet audiovideo program transmission license. Applicants for such licensesshall be stateowned or statecontrolled entities unless an internet audiovideo program transmission license has been obtained prior to the effectiveness of theAudiovideo Program Provisions in accordance with the thenineffect laws and regulations. In addition, foreigninvested enterprises are not allowed to engage inthe abovementioned services. According to the Audiovideo Program Provisions and other relevant laws and regulations, audiovideo programs provided by theentities supplying Internet audiovideo program services shall not contain any illegal content or other content prohibited by the laws and regulations, such as anycontent against the basic principles in the PRC Constitution, any content that damages the sovereignty of the country or national security, and any content thatdisturbs social order or undermine social stability. An audiovideo program that has already been broadcast shall be retained in full for at least 60 days. Movies,television programs and other media content used as Internet audiovideo programs shall comply with relevant administrative regulations on programs broadcaststhrough radio, movie and television channels. Entities providing services related to Internet audiovideo programs shall immediately delete the audiovideoprograms violating laws and regulations, keep relevant records, report relevant authorities and implement other regulatory requirements.54The Categories of the Internet AudioVideo Program Services, or the Audiovideo Program Categories, promulgated by SAPPRFT on March 10, 2017,classifies internet audio/video programs into four categories: (I) Category I internet audio/video program service, which is carried out with a form of radio station ortelevision station; (II) Category II internet audio/video program service, including (a) rebroadcasting service of current political news audio/video programs; (b)hosting, interviewing, reporting and commenting service of arts, entertainment, technology, finance and economics, sports, education and other specializedaudio/video programs; (c) producing (interviewing not included) and broadcasting service of arts, entertainment, technology, finance and economics, sports,education and other specialized audio/video programs; (d) producing and broadcasting service of internet films/dramas; (e) aggregating and broadcasting service offilms, television dramas and cartoons; (f) aggregating and broadcasting service of arts, entertainment, technology, finance and economics, sports, education andother specialized audio/video programs; and (g) live audio/video broadcasting service of cultural activities of common social organizations, sport events or otherorganization activities; and (III) Category III internet audio/video program service, including (a) aggregating service of online audio/video contents, and (b) rebroadcasting service of the audio/video programs uploaded by internet users; and (IV) Category III internet audio/video program service, including (a) rebroadcasting of the radio/television program channels; and (b) rebroadcasting of internet audio/video program channels.On May 27, 2016, the SAPPRFT issued the Notice on Relevant Issues concerning Implementing the Approval Works of Upgrading Mobile Internet AudioVideo Program Service, or the Mobile AudioVideo Program Notice. The Mobile AudioVideo Program Notice provides that the mobile Internet audiovideo programservices shall be deemed Internet audiovideo program service. Entities which have obtained the approvals to provide the Internet audiovideo program servicesmay use mobile WAP websites or mobile applications to provide audiovideo program services. Entities with regulatory approvals may operate mobile applicationsto provide the audiovideo program services The types of the programs shall be within the permitted scope as provided in the licenses and such mobile applicationsshall be filed with the SAPPRFT.Regulations on Production and Operation of Radio/Television ProgramsOn July 19, 2004, the SAPPRFT promulgated the Administrative Measures on the Production and Operation of Radio and Television Programs, or the Radioand Television Program Production Measures, which came into effect on August 20, 2004 and was amended on August 28, 2015. The Radio and Television ProgramProduction Measures provides that any business that produces or operates radio or television programs must first obtain a Radio and Television ProgramProduction and Operation Permit. Entities holding such permits shall conduct their business within the permitted scope as provided in their permits. In addition,foreigninvested enterprises are not allowed to engage in the abovementioned services.Regulations on Online Advertising ServicesOn April 24, 2015, the Standing Committee of the National People’s Congress enacted the Advertising Law of the People’s Republic of China, or the NewAdvertising Law, effective on September 1, 2015. The New Advertising Law increases the potential legal liability of advertising services providers and strengthensregulations of false advertising. On July 4, 2016, the State Administration for Industry and Commerce, or the SAIC, issued the Interim Measures of theAdministration of Online Advertising, or the SAIC Interim Measures, effective on September 1, 2016. The New Advertising Law and the SAIC Interim Measuresrequire that online advertisements may not affect users’ normal internet use and internet popup ads must display a “close” sign prominently and ensure onekeyclosing of the popup windows. The SAIC Interim Measures provides that all online advertisements must be marked “Advertisement” so that viewers can easilyidentify them as such. Moreover, the SAIC Interim Measures treats paid search results as advertisements that are subject to PRC advertisement laws, and requiresthat paid search results be conspicuously identified on search result pages as advertisements. The New Advertising Law and SAIC Interim Measures require us toconduct more stringent examination and monitoring of our advertisers and the content of their advertisements.55Regulations on Online GamesIn September 2009, the GAPP (currently known as the SAPPRFT), together with the National Copyright Administration, and the National Office ofCombating Pornography and Illegal Publications jointly issued the Notice on Further Strengthening on the Administration of Preexamination and Approval ofOnline Game and the Examination and Approval of Imported Online Game, or the Circular 13. The Circular 13 states that foreign investors are not permitted to investin online game operating businesses in the PRC via wholly foreignowned entities, Sinoforeign equity joint ventures or cooperative joint ventures or to exercisecontrol over or participate in the operation of domestic online game businesses through indirect means, such as other joint venture companies or contractual ortechnical arrangements. If the our contractual arrangements were deemed under the Circular 13 to be an “indirect means” for foreign investors to exercise controlover or participate in the operation of a domestic online game business, our contractual arrangements might be challenged by the SAPPRFT. We are not aware ofany online game companies which use the same or similar contractual arrangements having been challenged by the SAPPRFT as using those contractualarrangements as an “indirect means” for foreign investors to exercise control over or participate in the operation of a domestic online game business or having beenpenalized or ordered to terminate operations since the Circular 13 became effective. However it is unclear whether and how the Circular 13 might be interpreted orimplemented in the future. See “Risk Factors—If the PRC government finds that the agreements that establish the structure for operating certain of our operations inChina do not comply with PRC regulations relating to the relevant industries, or if these regulations or the interpretation of existing regulations change in the future,we could be subject to severe penalties or be forced to relinquish our interests in those operations.”The Interim Measures for the Administration of Online Games, or the Online Game Measures, issued by the MOC, which took effect on August 1, 2010 andamended on December 15, 2017, regulates a broad range of activities related to the online games business, including the development, production and operation ofonline games, the issuance of virtual currencies used for online games, and the provision of virtual currency trading services. The Online Game Measures providesthat any entity that is engaged in online game operations must obtain an Network Cultural Business Permit, and require the content of an imported online game to beexamined and approved by the MOC prior to the game’s launch and require a domestic online game to be filed with the MOC within 30 days after its launch. TheNotice of the Ministry of Culture on the Implementation of the Interim Measures for the Administration of Online Games, which was issued by the MOC on July 29,2010 to implement the Online Game Measures, (i) requires online game operators to protect the interests of online game users and specifies that certain terms thatmust be included in service agreements between online game operators and the users of their online games, (ii) requires content review of imported online gamesand filing procedures for domestic online games, (iii) emphasizes the protection of minors playing online games, and (iv) requests online game operators to promoterealname registration by their game users.Regulations on Information Security, Censorship and PrivacyThe Standing Committee of the National People’s Congress, China’s national legislative body, enacted the Decisions on the Maintenance of InternetSecurity on December 28, 2000 that may subject persons to criminal liabilities in China for any attempt to use the internet to: (i) gain improper entry to a computer orsystem of strategic importance; (ii) disseminate politically disruptive information; (iii) leak state secrets; (iv) spread false commercial information or (v) infringe uponintellectual property rights. In 1997, the Ministry of Public Security issued the Administration Measures on the Security Protection of Computer InformationNetwork with International Connections which prohibits using the internet to leak state secrets or to spread socially destabilizing materials. If an ICP license holderviolates these measures, the PRC government may revoke its ICP license and shut down its websites. Pursuant to the Ninth Amendment to the Criminal Law issuedby the Standing Committee of the National People’s Congress on August 29, 2015, effective on November 1, 2015, any ICP provider that fails to fulfill the obligationsrelated to internet information security as required by applicable laws and refuses to take corrective measures, will be subject to criminal liability for (i) any largescale dissemination of illegal information; (ii) any severe effect due to the leakage of users’ personal information; (iii) any serious loss of evidence of criminalactivities; or (iv) other severe situations, and any individual or entity that (i) sells or provides personal information to others unlawfully or (ii) steals or illegallyobtains any personal information will be subject to criminal liability in severe situations.56The Cybersecurity Law of the PRC, or the Cybersecurity Law, which was promulgated on November 7, 2016 by the Standing Committee of the NationalPeople’s Congress and came into effect on June 1, 2017, provides that network operators shall meet their cyber security obligations and shall take technicalmeasures and other necessary measures to protect the safety and stability of their networks. Under the Cybersecurity Law, network operators are subject to varioussecurity protectionrelated obligations, including: (i) network operators shall comply with certain obligations regarding maintenance of the security of internetsystems; (ii) network operators shall verify users’ identities before signing agreements or providing certain services such as information publishing or realtimecommunication services; (iii) when collecting or using personal information, network operators shall clearly indicate the purposes, methods and scope of theinformation collection, the use of information collection, and obtain the consent of those from whom the information is collected; (iv) network operators shall strictlypreserve the privacy of user information they collect, and establish and maintain systems to protect user privacy; (v) network operators shall strengthenmanagement of information published by users, and when they discover information prohibited by laws and regulations from publication or dissemination, theyshall immediately stop dissemination of that information, including taking measures such as deleting the information, preventing the information from spreading,saving relevant records, and reporting to the relevant governmental agencies.Regulations on Intellectual Property RightsRegulations on CopyrightThe Copyright Law of the PRC, or the Copyright Law, which took effect on June 1, 1991 and was amended in 2001 and in 2010, provides that Chinesecitizens, legal persons, or other organizations shall, whether published or not, own copyright in their copyrightable works, which include, among others, works ofliterature, art, natural science, social science, engineering technology and computer software. Copyright owners enjoy certain legal rights, including right ofpublication, right of authorship and right of reproduction. The Copyright Law as revised in 2010 extends copyright protection to Internet activities, productsdisseminated over the Internet and software products. In addition, Copyright Law provides for a voluntary registration system administered by the China CopyrightProtection Center, or the CPCC. According to the Copyright Law, an infringer of the copyrights shall be subject to various civil liabilities, which include ceasinginfringement activities, apologizing to the copyright owners and compensating the loss of copyright owner. Infringers of copyright may also subject to fines and/oradministrative or criminal liabilities in severe situations.The Computer Software Copyright Registration Measures, or the Software Copyright Measures, promulgated by the State Council on December 20, 2001and amended on January 30, 2013, regulates registrations of software copyright, exclusive licensing contracts for software copyright and assignment agreements.The National Copyright Administration, or the NCA administers software copyright registration and the CPCC, is designated as the software registration authority.The CPCC shall grant registration certificates to the Computer Software Copyrights applicants which meet the requirements of both the Software CopyrightMeasures and the Computer Software Protection Regulations (Revised in 2013).The Provisions of the Supreme People’s Court on Certain Issues Related to the Application of Law in the Trial of Civil Cases Involving Disputes onInfringement of the Information Network Dissemination Rights specifies that disseminating works, performances or audiovideo products by the internet users orthe internet service providers via the internet without the permission of the copyright owners shall be deemed to have infringed the right of dissemination of thecopyright owner.57The Measures for Administrative Protection of Copyright Related to Internet, which was jointly promulgated by the NCA and the MIIT on April 29, 2005and became effective on May 30, 2005, provides that upon receipt of an infringement notice from a legitimate copyright holder, an ICP operator must take remedialactions immediately by removing or disabling access to the infringing content. If an ICP operator knowingly transmits infringing content or fails to take remedialactions after receipt of a notice of infringement that harms public interest, the ICP operator could be subject to administrative penalties, including an order to ceaseinfringing activities, confiscation by the authorities of all income derived from the infringement activities, or payment of fines.On May 18, 2006, the State Council promulgated the Regulations on the Protection of the Right to Network Dissemination of Information (as amended in2013). Under these regulations, an owner of the network dissemination rights with respect to written works or audio or video recordings who believes thatinformation storage, search or link services provided by an Internet service provider infringe his or her rights may require that the Internet service provider delete, ordisconnect the links to, such works or recordings.Patent LawsAccording to the Patent Law of the PRC (Revised in 2008), the State Intellectual Property Office is responsible for administering patent law in the PRC. Thepatent administration departments of provincial, autonomous region or municipal governments are responsible for administering patent law within their respectivejurisdictions. The Chinese patent system adopts a firsttofile principle, which means that when more than one person file different patent applications for the sameinvention, only the person who files the application first is entitled to obtain a patent of the invention. To be patentable, an invention or a utility model must meetthree criteria: novelty, inventiveness and practicability. A patent is valid for twenty years in the case of an invention and ten years in the case of utility models anddesigns.Trademark LawsTrademarks are protected by the Trademark Law of the PRC (Revised in 2013) which was adopted in 1982 and subsequently amended in 1993, 2001 and 2013respectively as well as by the Implementation Regulations of the PRC Trademark Law adopted by the State Council in 2002 and as most recently amended on April29, 2014. The Trademark Office under the SAIC handles trademark registrations. The Trademark Office grants a tenyear term to registered trademarks and the termmay be renewed for another tenyear period upon request by the trademark owner. A trademark registrant may license its registered trademarks to another party byentering into trademark license agreements, which must be filed with the Trademark Office for its record. As with patents, the Trademark Law has adopted a firsttofile principle with respect to trademark registration. If a trademark applied for is identical or similar to another trademark which has already been registered or subjectto a preliminary examination and approval for use on the same or similar kinds of products or services, such trademark application may be rejected. Any personapplying for the registration of a trademark may not injure existing trademark rights first obtained by others, nor may any person register in advance a trademark thathas already been used by another party and has already gained a “sufficient degree of reputation” through such party’s use.Regulations on Domain NamesThe MIIT promulgated the Measures on Administration of Internet Domain Names, or the Domain Name Measures, on August 24, 2017, which took effecton November 1, 2017 and replaced the Administrative Measures on China Internet Domain Name promulgated by MII on November 5, 2004. According to theDomain Name Measures, the MIIT is in charge of the administration of PRC internet domain names. The domain name registration follows a firsttofile principle.Applicants for registration of domain names shall provide the true, accurate and complete information of their identities to domain name registration serviceinstitutions. The applicants will become the holder of such domain names upon the completion of the registration procedure.Relevant Regulations of the Hightech EnterpriseThe Ministry of Information Industry, the Ministry of Science and Technology and the State Tax Bureau collectively promulgated and issued the“Certifying Standard and Managing Measures for Hightech Enterprises” and “the Hightech Areas of Main National Support” on April 14, 2008 to certify the Hightech enterprise and encourage and support the development of the Chinese Hightech enterprises. Under the Hightech Enterprises Measures, the enterprise canenjoy the favorable tax policy when it is certified as a Hightech enterprise by the Ministry of Information Industry, the Ministry of Science and Technology and theState Tax Bureau or with its provincial branch according to the stipulated standard. The software and computer and network technology are recognized as the mainnational supported Hightech field. Kingtone Information is a Hightech enterprise and enjoys a favorable income tax rate of 15%.58Laws and Regulations of Intellectual Property RightsChina has adopted legislation governing intellectual property rights, including patents, copyrights and trademarks. China is a signatory to the maininternational conventions on intellectual property rights and became a member of the Agreement on Trade Related Aspects of Intellectual Property Rights upon itsaccession to the WTO in December 2001.PatentsThe “Patent Law of the People’s Republic of China” promulgated by the Standing Committee of the National People's Congress, adopted in 1985 andrevised in 1992, 2001 and 2008, protects registered patents. The State Intellectual Property Office of PRC handles granting patent rights, providing for a twentyyearpatent term for inventions and a tenyear patent term for utility models and designs. As we disclosed in Item 4, of this transition report on Form 20F, throughKingtone Information, we have been granted one invention patent “wireless video transmission system based on BREW platform” by the State Intellectual PropertyOffice (“SIPO”) of PRC on September 23, 2009 and therefore such invention is entitled to all the protections provided under the Patent Law for twenty years.Computer Software Copyright and AdministrationOn December 20, 2001, the State Council of PRC issued the “Regulation for Computer Software Protection of the People’s Republic of China” (the“Regulation for Computer Software Protection”) which became effective on January 1, 2002 to protect the interests of copyright owners, to promote the research andapplication and to encourage the development of the Chinese software industry. Under the Regulation for Computer Software Protection, natural persons, legalpersons or any other organizations shall have a copyright on the software developed by such persons no matter whether such software has been published. Theprotection period of software copyrights owned by the legal person or other organization is fifty years and expires on December 31 of the fiftieth year from the initialpublication date of such computer software. Currently, Kingtone Information has twelve registration certificates for software copyrights.TrademarksThe “Trademark Law of the People’s Republic of China” promulgated by the State Council of PRC, adopted in 1982 and revised in 1993 and 2001, protectsregistered trademarks. The Trademark Office under the Chinese State Administration for Industry and Commerce handles trademark registrations and grants a termof ten years to registered trademarks which are renewable for another ten years after the application to the Trademark Office by the owners of the trademarks.Trademark license agreements must be filed with the Trademark Office for record. China has a “firsttoregister” system that requires no evidence of prior use orownership. Kingtone Information has its registered trademarks as described in Item 4 of this transition report on Form 20F. Accordingly, such trademarks areentitled to the protection under the Trademark Law.Foreign Currency ExchangeOn August 29, 2008, the SAFE issued the Notice of the General Affairs Department of the State Administration of Foreign Exchange on the RelevantOperating Issues concerning the Improvement of the Administration of Payment and Settlement of Foreign Currency Capital of Foreignfunded Enterprises, orCircular 142. Pursuant to Circular 142, RMB converted from the foreign currencydenominated capital of a foreigninvested company may only be used for purposeswithin the business scope approved by the applicable governmental authority and may not be used for equity investments within the PRC unless specificallyprovided for otherwise. The use of such Renminbi capital may not be changed without SAFE’s approval and may not in any case be used to repay Renminbi loans ifthe proceeds of such loans have not been used.59See “Risk Factors — Risks Related to Doing Business in China — PRC regulation of loans and direct investment by offshore holding companies to PRCentities may delay or prevent us from using the proceeds of our initial public offering to make loans or additional capital contributions to our PRC operatingsubsidiaries, which could materially and adversely affect our liquidity and our ability to fund and expand our business”.Dividend DistributionWe are a British Virgin Islands holding company and substantially all of our operations are conducted through LK Technology. We rely on dividends andother distributions from our LK Technology and its subsidiaries to provide us with our cash flow and allow us to pay dividends on the shares underlying our ADSsand meet our other obligations. The principal regulations governing distribution of dividends paid by wholly foreignowned enterprises include:1.Wholly ForeignOwned Enterprise Law (1986), as amended; and2.Implementation Rules on Wholly ForeignOwned Enterprise Law (1990), as amended.Under these regulations, wholly foreignowned enterprises in China may pay dividends only out of their accumulated profits, if any, determined inaccordance with PRC accounting standards and regulations. In addition, wholly foreignowned enterprises in China are required to set aside at least 10% of theiraftertax profit based on PRC accounting standards each year to its general reserves until the accumulative amount of such reserves reach 50% of its registeredcapital. These reserves are not distributable as cash dividends. The board of directors of a FIE has the discretion to allocate a portion of its aftertax profits to staffwelfare and bonus funds, which may not be distributed to equity owners except in the event of liquidation.Regulation of Foreign Exchange in Certain Onshore and Offshore TransactionsIn October 2005, the SAFE issued the Notice on Issues Relating to the Administration of Foreign Exchange in Fundraising and Return InvestmentActivities of Domestic Residents Conducted via Offshore Special Purpose Companies, or SAFE Notice 75, which became effective as of November 1, 2005, and wasfurther supplemented by two implementation notices issued by the SAFE on November 24, 2005 and May 29, 2007, respectively. Under Circular 75, prior registrationwith the local SAFE branch is required for PRC residents to establish or to control an offshore company for the purposes of financing that offshore company withassets or equity interests in an onshore enterprise located in the PRC. An amendment to the registration or filing with the local SAFE branch by such PRC resident isalso required for the injection of equity interests or assets of an onshore enterprise in the offshore company or overseas funds raised by such offshore company, orany other material change with respect to the offshore company in connection with any increase or decrease of capital, transfer of shares, merger, division, equityinvestment, debt investment, or creation of any security interest over any assets located in the PRC.Under SAFE Notice 75, PRC residents are further required to repatriate into the PRC all of their dividends, profits or capital gains obtained from theirshareholdings in the offshore entity within 180 days of their receipt of such dividends, profits or capital gains. The registration and filing procedures under SAFENotice 75 are prerequisites for other approval and registration procedures necessary for capital inflow from the offshore entity, such as inbound investments orshareholders loans, or capital outflow to the offshore entity, such as the payment of profits or dividends, liquidating distributions, equity sale proceeds, or thereturn of funds upon a capital reduction. Therefore, failure to comply with such registration may subject us to certain restrictions on, including but not limited to, theincrease of the registered capital of our PRC subsidiary, making loans to our PRC subsidiary, and making distributions to us from our onshore companies.Regulations of Overseas Investments and ListingsOn August 8, 2006, six PRC regulatory agencies, including the MOFCOM, the State Assets Supervision and Administration Commission, the StateAdministration for Taxation, the State Administration for Industry and Commerce, the CSRC and the SAFE, jointly adopted the New M&A Rule, which becameeffective on September 8, 2006. This regulation, among other things, includes provisions that purport to require that an offshore SPV formed for purposes ofoverseas listing of equity interests in PRC companies and controlled directly or indirectly by PRC companies or individuals obtain the approval of the CSRC prior tothe listing and trading of such SPV’s securities on an overseas stock exchange.60On September 21, 2006, the CSRC published on its official website procedures regarding its approval of overseas listings by SPVs. The CSRC approvalprocedures require the filing of a number of documents with the CSRC and it would take several months to complete the approval process.The application of the New M&A Rule with respect to overseas listings of SPVs remains unclear with no consensus currently existing among the leadingPRC law firms regarding the scope of the applicability of the CSRC approval requirement.We believe that, based on our understanding of the current PRC laws, regulations and rules and the procedures announced on September 21, 2006, there isno requirement in this regulation that would require an application to be submitted to the MOFCOM or the CSRC for the approval of the listing and trading of ourADSs on the NASDAQ Capital Market.See “Risk Factors — Risks Related to Doing Business in China — If we were required to obtain the prior approval of the China Securities RegulatoryCommission, or CSRC, of the listing and trading of our ADSs on the NASDAQ Capital Market, we may face regulatory actions or other sanctions from the CSRC orother PRC regulatory agencies.”E. TAXATIONThe following discussion sets forth the material British Virgin Islands, PRC and U.S. federal income tax consequences of an investment in our ADSs andthe ordinary shares represented by our ADSs, sometimes referred to collectively as the “securities”. It is based upon laws and relevant interpretations thereof ineffect as of the date of this report, all of which are subject to change. This discussion does not deal with all possible tax consequences relating to an investment inthe securities, such as the tax consequences under state, local and other tax laws. As used in this discussion, “we,” “our” and “us” refers only to LuokungTechnology Ltd.British Virgin Islands TaxationUnder the law of the British Virgin Islands as currently in effect, a holder of the securities who is not a resident of the British Virgin Islands is not liable forBritish Virgin Islands tax on dividends paid with respect to the securities and all holders of the securities are not liable to the British Virgin Islands for tax on gainsrealized during that year on the sale or disposal of such ordinary shares. The British Virgin Islands does not impose a withholding tax on dividends paid by acompany incorporated or reregistered under the BVI Act.There are no capital gains, gift or inheritance taxes levied by the British Virgin Islands on companies incorporated under the BVI Act. In addition, shares ofcompanies incorporated under the BVI Act are not subject to transfer taxes, stamp duties or similar charges.There is no income tax treaty or convention currently in effect between the United States and the British Virgin Islands or between China and the BritishVirgin Islands.61People’s Republic of China TaxationIn 2007, the PRC National People’s Congress enacted the new Enterprise Income Tax Law (the “EIT Law”), which became effective on January 1, 2008. Thenew EIT Law imposes a single uniform income tax rate of 25% on all Chinese enterprises, including foreigninvested enterprises, and levies a withholding tax rate of10% on dividends payable by Chinese subsidiaries to their foreign shareholders unless any such foreign shareholders’ jurisdiction of incorporation has a tax treatywith China that provides for a different withholding agreement. Under the new EIT Law, enterprises established outside China but deemed to have a “de factomanagement body” within the country may be considered “resident enterprises” for Chinese tax purposes and, therefore, may be subject to an enterprise income taxrate of 25% on their worldwide income. Pursuant to the implementation rules of the new EIT Law, a “de facto management body” is defined as a body that hasmaterial and overall management control over the business, personnel, accounts and properties of the enterprise. Although substantially all members of ourmanagement are located in China, it is unclear whether Chinese tax authorities would require (or permit) us to be treated as PRC resident enterprises. If we aredeemed a Chinese tax resident enterprise, we may be subject to an enterprise income tax rate of 25% on our worldwide income, excluding dividends received directlyfrom another Chinese tax resident enterprise, as well as PRC enterprise income tax reporting obligations. If we are not deemed to be a Chinese tax resident enterprise,we may be subject to certain PRC withholding taxes. See “Risk Factors — Risks Related to Doing Business in China — Our holding company structure may limit thepayment of dividends.” As a result of such changes, our historical tax rates may not be indicative of our tax rates for future periods and the value of our ADSs orordinary shares may be adversely affected. If we are deemed a PRC resident enterprise and investors’ gain from the sales of the securities and dividends payable byus are deemed sourced from China, such gains and dividends payable by us may be subject to PRC tax. See “Risk Factors — Risks Related to Doing Business inChina — If we were deemed a “resident enterprise” by PRC tax authorities, we could be subject to tax on our global income at the rate of 25% under the New EITLaw and our nonPRC shareholders could be subject to certain PRC taxes.United States Federal Income TaxationGeneralThe following is a discussion of the material U.S. federal income tax consequences to an investor of purchasing, owning and disposing of our securities.This discussion does not address any aspects of U.S. federal gift or estate tax or the state, local or nonU.S. tax consequences of an investment in the securities.YOU SHOULD CONSULT YOUR OWN TAX ADVISORS CONCERNING THE U.S. FEDERAL, STATE, LOCAL AND NONU.S. TAX CONSEQUENCES OFPURCHASING, OWNING AND DISPOSING OF THE SECURITIES IN YOUR PARTICULAR SITUATION.This discussion applies only to those investors that purchase the securities in this offering and that hold the securities as capital assets within the meaningof section 1221 of the Internal Revenue Code of 1986, as amended (the “Code”). This section does not apply to holders that may be subject to special tax rules,including but not limited to:1.dealers in securities or currencies;2.traders in securities that elect to use a marktomarket method of accounting;3.banks, insurance companies or certain financial institutions;4.taxexempt organizations;5.governments or agencies or instrumentalities thereof;6.partnerships or other entities treated as partnerships or other passthrough entities for U.S. federal income tax purposes or persons holding thesecurities through such entities;7.regulated investment companies or real estate investment trusts;8.holders subject to the alternative minimum tax;9.holders that actually or constructively own 10% or more of the total combined voting power of all classes of our shares entitled to vote;10.holders that acquired the securities pursuant to the exercise of employee stock options, in connection with employee stock incentive plans orotherwise as compensation;11.holders that hold the securities as part of a straddle, hedging or conversion transaction; or12.holders whose functional currency is not the U.S. dollar.62This section is based on the Code, its legislative history, existing and proposed U.S. Treasury regulations, published rulings and other administrativeguidance of the U.S. Internal Revenue Service (the “IRS”) and court decisions, all as in effect on the date hereof. These laws are subject to change or differentinterpretation by the IRS or a court, possibly on a retroactive basis.We have not sought, and will not seek, a ruling from the IRS as to any U.S. federal income tax consequence described herein. The IRS may disagree withthe discussion herein, and its determination may be upheld by a court. Moreover, there can be no assurance that future legislation, regulation, administrative rulingsor court decisions will not adversely affect the accuracy of the statements in this discussion.The discussion below of the U.S. federal income tax consequences to “U.S. Holders” will apply to a beneficial owner of the securities that is for U.S. federalincome tax purposes:1.a citizen or resident of the United States;2.a corporation (or other entity treated as a corporation) that is created or organized (or treated as created or3.organized) under the laws of the United States, any state thereof or the District of Columbia;4.an estate whose income is subject to U.S. federal income tax regardless of its source; or5.a trust if (a) a U.S. court can exercise primary supervision over the trust’s administration and one or more U.S.6.persons are authorized to control all substantial decisions of the trust, or (b) if the trust has a valid election in effect under applicable U.S.Treasury regulations to be treated as a U.S. person.If a beneficial owner of the securities is not described as a U.S. Holder and is not an entity treated as a partnership or other passthrough entity for U.S.federal income tax purposes, such owner will be considered a “NonU.S. Holder.” The material U.S. federal income tax consequences applicable specifically to NonU.S. Holders are described below under the heading “Tax Consequences to NonU.S. Holders.”If a partnership (including for this purpose any entity treated as a partnership for U.S. tax purposes) is a beneficial owner of the securities, the U.S. taxtreatment of a partner in the partnership generally will depend on the status of the partner and the activities of the partnership. A holder of the securities that is apartnership or partners in such a partnership should consult their own tax advisors about the U.S. federal income tax consequences of holding and disposing of thesecurities.This discussion assumes that any distributions made (or deemed made) on the securities and any consideration received by a holder in consideration forthe sale or other disposition of the securities will be in U.S. dollars. This discussion also assumes that the representations contained in the Deposit Agreement aretrue and that the obligations in the Deposit Agreement and any related agreement will be complied with in accordance with their terms. Finally, this discussionassumes that each ADS will only represent ordinary shares in us, and will not represent any other type of security, such as a bond, cash or other property.63For U.S. federal income tax purposes, a holder of an ADS will be treated as the beneficial owner of the shares represented by such ADS and an exchange ofan ADS for ordinary shares will not be subject to U.S. federal income tax. The U.S. Treasury has expressed concerns that parties to whom ADSs are prereleased, orintermediaries in the chain of ownership between holders of ADSs and the issuer of the securities underlying the ADSs may be taking actions that are inconsistentwith the claiming of foreign tax credits by U.S. Holders of ADSs. Such actions would also be inconsistent with the claiming of the reduced rate of tax applicable todividends received by certain noncorporate U.S. Holders, including individual U.S. Holders, as described below under “Tax Consequences to U.S.Holders — Taxation of Distributions.” Accordingly, the availability of foreign tax credits or the reduced tax rate for dividends received by certain noncorporate U.S.Holders, including individual U.S. Holders, could be affected by actions taken by parties to whom the ADSs are released, or by future actions by the U.S. Treasury.Tax Consequences to U.S. HoldersTaxation of DistributionsSubject to the passive foreign investment company, or PFIC, rules discussed below, the gross amount of any cash distributions we make with respect to aU.S. Holder in respect of such U.S. Holder’s ADSs or shares will generally be treated as dividend income if the distributions are made from our current oraccumulated earnings and profits, calculated according to U.S. federal income tax principles. Cash dividends will generally be subject to U.S. federal income tax asordinary income on the day the U.S. Holder actually or constructively receives such income. With respect to noncorporate U.S. Holders for taxable years beginningbefore January 1, 2011, dividends may be taxed at the lower applicable longterm capital gains rate provided that (a) our ADSs or shares are readily tradable on anestablished securities market in the United States, or, in the event we are deemed to be a Chinese “resident enterprise” under the EIT Law (as described above under“People’s Republic of China Taxation”), we are eligible for the benefits of the income tax treaty between the United States and the PRC (the “U.S.PRC Tax Treaty”),(b) we are not a PFIC, as discussed below, for either the taxable year in which the dividend was paid or the preceding taxable year, and (c) certain holding periodrequirements are met. Under published IRS authority, ADSs are considered for purposes of clause (a) above to be readily tradable on an established securitiesmarket in the United States only if they are listed on certain exchanges, which presently include the NASDAQ Capital Market. U.S. Holders should consult their owntax advisors regarding the availability of the lower rate for any dividends paid with respect to our ADSs or shares.Dividends will not be eligible for the dividendsreceived deduction allowed to U.S. corporations in respect of dividends received from other U.S.corporations. Generally, if we distribute noncash property as a dividend (other than pro rata distributions of our shares) out of our current or accumulated earningsand profits (as determined for U.S. federal income tax purposes), a U.S. Holder generally will include in income an amount equal to the fair market value of theproperty, on the date that it is distributed.Distributions in excess of current and accumulated earnings and profits, as determined for U.S. federal income tax purposes, will be treated as a nontaxablereturn of capital to the extent of the U.S. Holder’s basis in its shares or ADSs and thereafter as capital gain. However, we do not plan on calculating our earnings andprofits in accordance with U.S. federal income tax principles. U.S. holders therefore should generally assume that any distributions paid by us will be treated asdividends for U.S. federal income tax purposes.If PRC taxes apply to dividends paid by us to a U.S. Holder (see “People’s Republic of China Taxation,” above), such taxes may be treated as foreign taxeseligible for credit against such holder’s U.S. federal income tax liability (subject to certain limitations), and a U.S. Holder may be entitled to certain benefits under theU.S.PRC Tax Treaty. The rules relating to the U.S. foreign tax credit are complex. U.S. Holders should consult their own tax advisors regarding the creditability ofany such PRC tax and their eligibility for the benefits of the U.S.PRC Tax Treaty.64Taxation of Dispositions of SharesSubject to the PFIC rules discussed below, a U.S. holder that sells or otherwise disposes of its shares will recognize capital gain or loss for U.S. federalincome tax purposes equal to the difference between the amount realized and such U.S. Holder’s tax basis in its shares. Prior to January 1, 2011, capital gains of anoncorporate U.S. holder are generally taxed at a maximum rate of 15% where the property is held for more than one year (and 20% thereafter). The ability to deductcapital losses is subject to limitations.If PRC taxes apply to any gain from the disposition of our shares by a U.S. Holder, such taxes may be treated as foreign taxes eligible for credit against suchholder’s U.S. federal income tax liability (subject to certain limitations), and a U.S. Holder may be entitled to certain benefits under the U.S.PRC Tax Treaty. U.S.Holders should consult their own tax advisors regarding the creditability of any such PRC tax and their eligibility for the benefits of the U.S.PRC Tax Treaty.Passive Foreign Investment CompanyWe do not expect to be a PFIC for U.S. federal income tax purposes for our current tax year or in the foreseeable future. The determination of whether or notwe are a PFIC in respect of any of our taxable years is a factual determination that cannot be made until the close of the applicable tax year and that is based on thetypes of income we earn and the value and composition of our assets (including goodwill), all of which are subject to change. Therefore, we can make no assurancesthat we will not be a PFIC in respect of our current taxable year or in the future.In general, we will be a PFIC in any taxable year if either:1.at least 75% of our gross income for the taxable year is passive income; or2.at least 50% of the value, determined on the basis of a quarterly average, of our assets is attributable to assets that produce or are held for theproduction of passive income.Passive income includes dividends, interest, royalties, rents (other than certain rents and royalties derived in the active conduct of a trade or business), theexcess of gains over losses from certain types of transactions in commodities, annuities and gains from assets that produce passive income. We will be treated asowning our proportionate share of the assets and earning our proportionate share of the income of any corporation in which we own, directly or indirectly, at least25% (by value) of the stock.If we are treated as a PFIC in any year during which a U.S. Holder owns the securities, and such U.S. Holder did not make a marktomarket election, asdescribed below, the U.S. Holder will be subject to special rules with respect to:1.any gain recognized by the U.S. Holder on the sale or other disposition of its shares; and any excess distribution that we make to the U.S. Holder(generally, the excess of the amount of any distributions to such U.S. Holder during a single taxable year of such U.S. Holder over 125% of theaverage annual distributions received by such U.S. Holder in respect of the shares during the three preceding taxable years of such U.S. Holder or,if shorter, such U.S. Holder holding period for the shares).Under these rules:2.the gain or excess distribution will be allocated ratably over the U.S. Holder’s holding period for the shares;3.the amount allocated to the U.S. Holder’s taxable year in which it realized the gain or excess distribution or to the period in the U.S. Holder’sholding period before the first day of our first taxable year in which we are a PFIC will be taxed as ordinary income;4.the amount allocated to other taxable years (or portions thereof) of the U.S. Holder and included in its holding period will be taxed at the highesttax rate in effect for that year; and5.the interest charge generally applicable to underpayments of tax will be imposed in respect of the tax attributable to each such other taxable yearof the U.S. Holder. 6.Special rules apply for calculating the amount of the foreign tax credit with respect to excess distributions by a PFIC.65Alternatively, if a U.S. Holder, at the close of its taxable year, owns ordinary shares in a PFIC that are treated as marketable stock, the U.S. Holder may makea marktomarket election with respect to such shares for such taxable year. Our shares will be “marketable” to the extent that they remain regularly traded on anational securities exchange, such as the NASDAQ Capital Market. If a U.S. Holder makes this election in a timely fashion, it will not be subject to the PFIC rulesdescribed above. Instead, in general, the U.S. Holder will include as ordinary income each year the excess, if any, of the fair market value of its shares at the end ofthe taxable year over its adjusted basis in its shares. Any ordinary income resulting from this election would generally be taxed at ordinary income tax rates andwould not be eligible for the reduced rate of tax applicable to qualified dividend income. The U.S. Holder will also be allowed to take an ordinary loss in respect ofthe excess, if any, of the adjusted basis of its shares over the fair market value at the end of the taxable year (but only to the extent of the net amount of previouslyincluded income as a result of the marktomarket election). The U.S. Holder’s basis in the shares will be adjusted to reflect any such income or loss amounts. U.S.Holders should consult their own tax advisor regarding potential advantages and disadvantages of making a marktomarket election with respect to their shares.Alternatively, a U.S. Holder of stock in a PFIC may avoid the PFIC tax consequences described above in respect to our or shares by making a timely“qualified electing fund” election to include in income its pro rata share of our net capital gains (as longterm capital gain) and other earnings and profits (asordinary income), on a current basis, in each case whether or not distributed, in the taxable year of the U.S. Holder in which or with which our taxable year ends.However, the qualified electing fund election is available only if the PFIC provides such U.S. Holder with certain information regarding its earnings and profits asrequired under applicable U.S. Treasury regulations. We do not intend to furnish the information that a U.S. Holder would need in order to make a qualified electingfund election. Therefore, U.S. Holders will not be able to make or maintain such election with respect to their or shares.If a U.S. Holder owns our shares or during any year that we are a PFIC, such holder must file U.S. Internal Revenue Service Form 8621 regarding suchholder’s shares or and the gain realized on the disposition of the shares. The reduced tax rate for dividend income, discussed in “Taxation of Distributions,” is notapplicable to dividends paid by a PFIC. U.S. Holders should consult with their own tax advisors regarding reporting requirements with respect to their shares.Tax Consequences to NonU.S. HoldersDividends paid to a NonU.S. Holder in respect of our or shares generally will not be subject to U.S. federal income tax, unless the dividends are effectivelyconnected with the NonU.S. Holder’s conduct of a trade or business within the United States (and, if required by an applicable income tax treaty, are attributable toa permanent establishment or fixed base that such holder maintains in the United States).In addition, a NonU.S. Holder generally will not be subject to U.S. federal income tax on any gain attributable to a sale or other disposition of our or sharesunless such gain is effectively connected with its conduct of a trade or business in the United States (and, if required by an applicable income tax treaty, isattributable to a permanent establishment or fixed base that such holder maintains in the United States) or the NonU.S. Holder is an individual who is present in theUnited States for 183 days or more in the taxable year of sale or other disposition and certain other conditions are met (in which case, such gain from United Statessources generally is subject to tax at a 30% rate or a lower applicable tax treaty rate).Dividends and gains that are effectively connected with the NonU.S. Holder’s conduct of a trade or business in the United States (and, if required by anapplicable income tax treaty, are attributable to a permanent establishment or fixed base in the United States) generally will be subject to tax in the same manner as fora U.S. Holder and, in the case of a NonU.S. Holder that is a corporation for U.S. federal income tax purposes, may also be subject to an additional branch profits taxat a 30% rate or a lower applicable tax treaty rate.66Information Reporting and Backup Withholding In general, information reporting for U.S. federal income tax purposes generally should apply to distributions made on the securities within the UnitedStates to a noncorporate U.S. Holder and to the proceeds from sales and other dispositions of the securities by a noncorporate U.S. Holder to or through a U.S.office of a broker. Payments made (and sales and other dispositions effected at an office) outside the United States generally should be subject to informationreporting in limited circumstances.Dividend payments made to U.S. Holders and proceeds paid from the sale or other disposition the securities may be subject to information reporting to theIRS and possible U.S. federal backup withholding at a current rate of 28%. Certain exempt recipients, such as corporations, are not subject to these informationreporting requirements. Backup withholding will not apply to a U.S. Holder who furnishes a correct taxpayer identification number and makes any other requiredcertification, or who is otherwise exempt from backup withholding. U.S. Holders who are required to establish their exempt status must provide a duly executed IRSForm W9.A NonU.S. Holder generally may eliminate the requirement for information reporting and backup withholding by providing certification of its foreignstatus, under penalties of perjury, on a duly executed applicable IRS Form W8 or by otherwise establishing an exemption.Backup withholding is not an additional tax. Rather, the amount of any backup withholding will be allowed as a credit against a U.S. Holder’s or a nonU.S.Holder’s U.S. federal income tax liability and may entitle such holder to a refund, provided that certain required information is timely furnished to the IRS.PROSPECTIVE PURCHASERS OF OUR SECURITIES SHOULD CONSULT WITH THEIR OWN TAX ADVISORS REGARDING THE APPLICATION OFTHE U.S. FEDERAL INCOME TAX LAWS TO THEIR PARTICULAR SITUATIONS AS WELL AS ANY ADDITIONAL TAX CONSEQUENCES RESULTING FROMPURCHASING, HOLDING OR DISPOSING OF OUR SECURITIES, INCLUDING THE APPLICABILITY AND EFFECT OF THE TAX LAWS OF ANY STATE, LOCALOR NONU.S. JURISDICTION, INCLUDING ESTATE, GIFT, AND INHERITANCE LAWS AND APPLICABLE TAX TREATIES.F. DIVIDENDS AND PAYING AGENTS.Not applicable.G. STATEMENT BY EXPERTS.None.H. DOCUMENTS ON DISPLAY.We previously filed a registration statement on Form F1 (File No. 333166056) with the SEC relating to our initial public offering in May 2010. This transition reportdoes not contain all of the information in the registration statement and the exhibits and financial statements included with the registration statement. References inthis transition report to any of our contracts, agreements or other documents are not necessarily complete, and you should refer to the exhibits attached to theregistration statement for copies of the actual contracts, agreements or documents. In addition, we will file transition reports on Form 20F and submit otherinformation under cover of Form 6K. As a foreign private issuer, we are exempt from the proxy requirements of Section 14 of the Exchange Act and our officers,directors and principal shareholders will be exempt from the insider shortswing disclosure and profit recovery rules of Section 16 of the Exchange Act. You may readand copy the registration statement, the related exhibits and other materials we file with the SEC at the SEC's public reference room in Washington, D.C. at 100 FStreet, Room 1580, N.E., Washington, D.C.20549. You can also request copies of those documents, upon payment of a duplicating fee, by writing to the SEC. Pleasecall the SEC at 1800SEC0330 for further information on the operation of the public reference rooms. The SEC also maintains an Internet site that contains reports,proxy and information statements and other information regarding issuers that file with the SEC. The website address is http://www.sec.gov. You may also request acopy of these filings, at no cost, by writing us at LAB 32, SOHO 3Q, No 9, Guanghua Road, Chaoyang District, Beijing, People’s Republic of China, 100020 ortelephoning us at (86) 1085866721.67I. SUBSIDIARY INFORMATIONFor a listing of our subsidiaries, see “Item 4. Information on the Company – C. Organizational Structure.”ITEM 11. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.Interest Rate RiskAs of December 31, 2017, we had no shortterm or longterm borrowings. If we borrow money in future periods, we may be exposed to interest rate risk. Ourexposure to market risk for changes in interest rates relates primarily to the interest income generated by our cash deposits with our banks and heldtomaturityinvestments. We have not used any derivative financial instruments in our investment portfolio. Interest earnings instruments carry a degree of interest rate risk. Wehave not been exposed, nor do we anticipate being exposed to material risks due to changes in interest rates. However, our future interest income may fall short ofexpectations due to changes in interest rates. Foreign Exchange RiskTranslation adjustments amounted to $90,671 and $387,375 gain as of the fiscal year ended December 31, 2017 and 2016, respectively. The Companytranslated balance sheet amounts with the exception of equity at December 31, 2017 at RMB 6.5342 to $1.00 as compared to RMB 6.9370 to $1.00 at December 31,2016. The Company stated equity accounts at their historical rate. The average translation rates applied to income statement accounts for the fiscal year endedDecember 31, 2017 and 2016 were RMB6.7356 and RMB 6.7153 to US$1.00, respectively. So far, the PRC government has been able to manage a stable exchange ratebetween RMB and the U.S. Dollar. Our future downward translation adjustments may occur and can be significant due to changes in such exchange rate.If we decide to convert our RMB into U.S. dollars for the purpose of making payments for dividends on our ordinary shares or for other business purposes,appreciation of the U.S. dollar against the RMB would have a negative effect on the U.S. dollar amount available to us.The PRC government imposes strict restrictions on PRC resident companies regarding converting RMB into foreign currencies and vice versa under capitalaccount transactions, such as receiving equity investments from outside of the PRC, making equity investments outside of the PRC, borrowing money from orlending money outside of the PRC, and repaying debt or remitting liquidated assets and/or accumulated profits outside of the PRC. These transactions have to beapproved by the relevant PRC government authorities, including but not limited to the commerce bureau, the tax bureau and the State Administration of ForeignExchange, or SAFE, and have to be conducted at banks entrusted by the local SAFE branch. As our business continues to grow, we may need to continuouslyfinance our PRC subsidiaries by raising capital from outside of the PRC. The restriction on converting RMB into foreign currencies, and vice versa, may limit ourability to use capital resources from outside of the PRC. Such restrictions may also limit our ability to remit profits from our PRC subsidiaries outside of the PRC,therefore potentially limiting our ability to pay dividends to our shareholders. In addition, such restrictions will limit our ability to freely transfer temporary excesscash in our or our subsidiaries’ bank accounts in and out of the PRC, therefore limiting our ability to conduct crossborder cash management activities to optimizethe utilization of our cash.InflationAlthough China has experienced an increasing inflation rate, inflation has not had a material impact on our results of operations in recent years. Accordingto the National Bureau of Statistics of China, the change in the consumer price index in China was 0.46%, (0.77%), and 1.16% in 2001, 2002 and 2003, respectively.However, in connection with a 3.9% increase in 2004, the PRC government announced measures to restrict lending and investment in China in order to reduceinflationary pressures in China’s economy. Following the government’s actions, the consumer price index decreased to 1.8% in 2005 and to 1.5% in 2006. In 2007, theconsumer price index increased to 4.8%. In response, China’s central bank, the People’s Bank of China, announced that the bank reserve ratio would rise half apercentage point to 15.5% in an effort to reduce inflation pressures. China’s consumer price index growth rate reached 8.7% year over year in 2008. In 2009 and 2010,the change in the consumer price index in China was minus 0.7% and 3.3%.China consumer price index in November 2017 was 3.8% higher than that of the same period in 2016. China consumer price index in December 2016 was2.4% higher than that of the same period in 2015. China consumer price index in December 2015 was 4.8% higher than that of the same period in 2014. Chinaconsumer price index in December 2014 was 3.3% higher than that of the same period in 2013. The results of the PRC government’s actions to combat inflation aredifficult to predict. Adverse changes in the Chinese economy, if any, will likely impact the financial performance of a variety of industries in China that use, or wouldbe candidates to use, our software products and services.68ITEM 12. DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES.A. DEBT SECURITIES.Not applicable. B. WARRANTS AND RIGHTS.Not applicable.C. OTHER SECURITIES.Not applicable.D. AMERICAN DEPOSITARY SHARES.The Bank of New York Mellon, as depositary (the “Depositary”) for the Company’s ADR facility, notified the owners and holders of the Company’s ADSsthat the ADS facility will terminate effective at 5:00 p.m. (Eastern Time) on September 19, 2018. Under the terms of the Deposit Agreement among the Company, theDepositary and the owners and holders of ADSs of the Company (the “Deposit Agreement”), owners and holders of the Company’s ADSs have until at leastJanuary 21, 2019 to surrender their ADSs to the Depositary for delivery of the underlying ordinary shares of the Company. Subsequent to January 21, 2019, underthe terms of the Deposit Agreement, the Depositary may attempt to sell any ordinary shares remaining on deposit with the Depositary. If the Depositary sells suchunderlying ordinary shares or receives value for such shares, holders must surrender their ADSs to obtain payment of the sale proceeds, net of expenses andapplicable tax and charges. We completed the voluntary delisting of our ADSs from the NASDAQ Capital Market on September 19, 2018.You may hold ADSs either (A) directly (i) by having ADSs registered in your name in the Direct Registration System, or (ii) by having an Americandepositary receipt, also referred to as an ADR, which is a certificate evidencing a specific number of ADSs, registered in your name, or (B) indirectly by holding asecurity entitlement in ADSs through your broker or other financial institution. If you hold ADSs directly, you are a registered ADS holder, also referred to as anADS holder. This description assumes you are an ADS holder. If you hold the ADSs indirectly, you must rely on the procedures of your broker or other financialinstitution to assert the rights of ADS holders described in this section. You should consult with your broker or financial institution to find out what thoseprocedures are.The Direct Registration System, or DRS, is a system administered by The Depository Trust Company, also referred to as DTC, pursuant to which thedepositary may register the ownership of uncertificated ADSs, which ownership will be confirmed by periodic statements sent by the depositary to the registeredholders of uncertificated ADSs.69As an ADS holder, you will not be treated as one of our registered shareholders and you will not have direct shareholder rights. British Virgin Island’s lawgoverns our direct shareholders’ rights. The depositary will be the holder of the shares underlying your ADSs. As a registered holder of ADSs, you will have ADSholder rights. A Deposit Agreement among us, the depositary and you, as an ADS holder, and all other persons indirectly holding ADSs, sets out ADS holder rightsas well as the rights and obligations of the depositary. New York law governs the Deposit Agreement and the ADSs.The following is a summary of the material provisions of the Deposit Agreement. For more complete information, you should read the entire DepositAgreement and the form of ADS, which contains the terms of the ADSs. The Deposit Agreement is filed as an exhibit to our registration statement filed on Form F1.You may obtain the registration statement and the attached Deposit Agreement from the SEC’s website at http://www.sec.gov. You may also obtain a copy of theDeposit Agreement at the SEC’s Public Reference Room, which is located at 100 F Street, NE, Washington, DC 20549. You may obtain information on the operationof the Public Reference Room by calling the SEC at 18007320330. Fees and ExpensesPersons depositing or withdrawing shares or ADS holders must pay:For:$5.00 (or less) per 100 ADSs (or portion of 100 ADSs)Issuance of ADSs, including issuances resulting from a distribution of shares orrights or other propertyCancellation of ADSs for the purpose of withdrawal, including if the DepositAgreement terminates$.05 (or less) per ADSAny cash distribution to ADS holdersA fee equivalent to the fee that would be payable if securities distributed to youhad been shares and the shares had been deposited for issuance of ADSsDistribution of securities distributed to holders of deposited securities whichare distributed by the depositary to ADS holders$.05 (or less) per ADSs per calendar yearDepositary servicesRegistration or transfer feesTransfer and registration of shares on our share register to or from the name ofthe depositary or its agent when you deposit or withdraw sharesExpenses of the depositaryCable, telex and facsimile transmissions (when expressly provided in the DepositAgreement) converting foreign currency to U.S. dollarsTaxes and other governmental charges the depositary or the custodian have topay on any ADS or share underlying an ADS, for example, share transfer taxes,stamp duty or withholding taxesAs necessaryAny charges incurred by the depositary or its agents for servicing the depositedsecuritiesAs necessaryPayment of TaxesHolders of our ADSs are responsible for any taxes or other governmental charges payable on their ADSs or on the deposited securities represented by anyof their ADSs. The depositary may refuse to register any transfer of a holder’s ADSs or allow withdrawal of the deposited securities represented by the ADSs untilsuch taxes or other charges are paid. It may apply payments owed to the holder or sell deposited securities represented by the ADSs to pay any taxes owed and theholder will remain liable for any deficiency. If the depositary sells deposited securities, it will, if appropriate, reduce the number of ADSs to reflect the sale and pay toADS holders any proceeds, or send to ADS holders any property, remaining after it has paid the taxes.70PART IIITEM 13. DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES.None.ITEM 14. MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS.Use of Proceeds.We completed our initial public offering on May 14, 2010 (the “IPO”), which generated net proceeds of approximately $14.6 million. All remaining cash onhand from the proceeds of our IPO was transferred to C Media Limited and its subsidiaries following the completion of the asset exchange transactions on August17, 2018.ITEM 15. CONTROLS AND PROCEDURES.Disclosure Controls and ProceduresOur Chief Executive Officer and Chief Financial Officer have reviewed and evaluated the effectiveness of our disclosure controls and procedures, whichincluded inquiries made to certain other of our employees. The term “disclosure controls and procedures,” as defined in Rules 13a15(e) and 15d15(e) under theExchange Act, means controls and other procedures of a company that are designed to ensure that information required to be disclosed by a company in thereports, such as this report, that it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in theSEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to bedisclosed by a company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the company’s management, including itsprincipal executive and principal financial officers, as appropriate to allow timely decisions regarding required disclosure. Management recognizes that any controlsand procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives and management necessarilyapplies its judgment in evaluating the costbenefit relationship of possible controls and procedures. Based on that evaluation, our Chief Executive Officer and ChiefFinancial Officer have each concluded that, as of December 31, 2017, the Company’s disclosure controls and procedures were not effective due to the materialweakness described in the “Management’s Report on Internal Control over Financial Reporting” section below.Management’s Report on Internal Control Over Financial ReportingOur management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Exchange ActRules 13a15(f) and 15d15(f). Internal control over financial reporting refers to the process designed by, or under the supervision of, our principal executive officerand principal financial officer, and effected by our Board of Directors, management and other personnel, to provide reasonable assurance regarding the reliability offinancial reporting and the preparation of financial statements for external purposes in accordance with U.S. GAAP and includes those policies and procedures that(i) pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of the assets of the Company; (ii)provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with U.S. GAAP, and thatreceipts and expenditures of the Company are being made only in accordance with authorizations of management and directors of the Company; and (iii) providereasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the Company’s assets that could have a materialeffect on the financial statements.71Any system of internal control, no matter how well designed, has inherent limitations. Therefore, even those systems determined to be effective canprovide only reasonable assurance with respect to financial statement preparation and presentation. Because of the inherent limitations of internal control, there is arisk that material misstatements may not be prevented or detected on a timely basis by internal control over financial reporting. However, these inherent limitationsare known features of the financial reporting process. Therefore, it is possible to design into the process safeguards to reduce, though not eliminate, this risk.Management assessed our internal control over financial reporting as of the year ended December 31, 2017. In making this assessment, management usedthe criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in the 2014 report entitled "Internal ControlIntegratedFramework." The COSO framework summarizes each of the components of a company’s internal control system, including (i) the control environment, (ii) riskassessment, (iii) control activities, (iv) information and communication, and (v) monitoring. Based on such assessment, management concluded that its internalcontrol over financial reporting as of December 31, 2017 was not effective because of the following material weakness:Lack of U.S. GAAP expertise. Although our accounting personnel are professional and experienced in accounting requirements and procedures generallyaccepted in the PRC, they do not have sufficient knowledge, experience and training in maintaining our books and records and preparing financial statements inaccordance with U.S. GAAP standards and SEC rules and regulations. The staff needs additional training to become experienced in U.S. GAAPbased reporting,including the skills of U.S. GAAPbased period end closing, consolidation of financial statements, and U.S. GAAP conversion.In order to address the above material weakness, our management plans to take the following steps:We will employ, as needed, outside professionals to provide key accounting personnel ongoing technical trainings to ensure their proper understanding ofU.S. GAAP and newly announced accounting standards.The Company believes the foregoing measures will remediate the identified material weakness in future periods. The Company is committed to monitoringthe effectiveness of these measures and making any changes that are necessary and appropriate.Notwithstanding the conclusion that its internal control over financial reporting was not effective as of the end of the period covered by this report, ourChief Executive Officer and Chief Financial Officer believe that the financial statements and other information contained in this report present fairly, in all materialrespects, its business, financial condition and results of operations. Nothing has come to the attention of management that causes them to believe that any materialinaccuracies or errors exist in the Company’s financial statements as of December 31, 2017.Attestation report of the registered public accounting firm.This transition report does not include an attestation report of the Company’s registered public accounting firm on internal control over financial reportingbecause the Company is a nonaccelerated filer permanently exempted from section 404(b) of the SarbanesOxley Act.Changes in Internal Control over Financial ReportingThere were no changes in the Company’s internal control over financial reporting that occurred during our fiscal year ended December 31, 2017 that hasmaterially affected or is reasonably likely to materially affect our internal control over financial reporting.ITEM 16. [RESERVED]ITEM 16A. AUDIT COMMITTEE FINANCIAL EXPERT.Our board of directors has determined that Mr. Dennis Galgano qualifies as an audit committee financial expert. Our board of directors has determined thatMessrs. Dennis Galgano, Jin Shi, Jiming Ha and Zhihao Xu meet the definition of an “independent director” under the applicable NASDAQ Rules and under Rule10A3 of the Securities Exchange Act of 1934, as amended.72ITEM 16B. CODE OF ETHICS.Our board of directors has adopted a code of business conduct and ethics applicable to our directors, officers and employees. We have posted the code onour website at http://www.luokung.com.ITEM 16C. PRINCIPAL ACCOUNTANT FEES AND SERVICES.Audit FeesThe aggregate fees billed by Moore Stephens CPA Limited for professional services rendered for the audit of our financial information disclosed in thistransition report on Form 20F was $280,000 for the two years ended December 31, 2017 and 2016.The aggregate fees billed by our previous auditor, BDO China Shu Lun Pan Certified Public Accountants LLP for professional services rendered for theaudit of our annual financial information included in our annual reports on Form 20F was $105,500 for each of the fiscal years ended September 30, 2017, 2016 and2015.Tax FeesWe did not engage our principal accountants to provide tax or related services during the last two fiscal years.All Other FeesWe did not engage our principal accountants to render services to us during the last two fiscal years, other than as reported above.ITEM 16D. EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES.Not applicable.ITEM 16E. PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS.Not applicable.ITEM 16F. CHANGE IN REGISTRANT’S CERTIFYING ACCOUNTANT.Not applicable.ITEM 16G. CORPORATE GOVERNANCE.We are incorporated in the BVI and our corporate governance practices are governed by applicable BVI law as well as our memorandum and articles ofassociation. In addition, because our ADSs are listed on NASDAQ, we are subject to NASDAQ’s corporate governance requirements. NASDAQ Listing Rule5620(a) requires each issuer to hold an annual meeting of shareholders no later than one year after the end of the issuer’s fiscal year end. However, NASDAQ ListingRule 5615(a)(3) permits a foreign private issuer like us to follow home country practices in lieu of certain requirements of Listing Rule 5600, provided that suchforeign private issuer discloses in its transition report filed with the SEC each requirement of Rule 5600 that it does not follow and describes the home countrypractice followed in lieu of such requirement. We follow home country practice with respect to annual meetings and did not hold an annual shareholder meeting inthe year ended December 31, 2017. We may, however, hold annual shareholder meetings in the future if there are significant issues that require shareholders’approvals.ITEM 16H. MINE SAFETY DISCLOSURE.Not applicable.73PART IIIITEM 17. FINANCIAL STATEMENTS.We have elected to provide financial statements and related information specified in Item 18.ITEM 18. FINANCIAL STATEMENTS.See “Index to Consolidated Financial Statements” for a list of all financial statements filed as part of this transition report. The Financial Statements arebeginning on page F1.ITEM 19. EXHIBITS.See the Exhibit Index following the signature page of this report, which is incorporated herein by reference.74SIGNATURESThe registrant hereby certifies that it meets all of the requirements for filing on Form 20F and that it has duly caused and authorized the undersigned tosign this transition report on its behalf.LUOKUNG TECHNOLOGY CORP.By:/s/ Xuesong Song Xuesong SongChief Executive Officer(principal executive officer)October 12, 201875EXHIBIT INDEXThe following documents are filed as part of this transition report on Form 20F.ExhibitNumberDescription1.1Amended and Restated Memorandum of Association and Articles of Association of Luokung Technology Corp., dated August 20, 2018, and ascurrently in effect.2.1*Deposit Agreement among the Company, depositary and holders of the American Depositary Receipts.2.2*Form of American Depositary Receipt.2.3*English translation of Entrusted Management Agreement dated December 15, 2009 between Xi’an Softech Co., Ltd., Xi’an Kingtone InformationTechnology Co., Ltd. and the shareholders of Xi’an Kingtone Information Technology Co., Ltd.3.1*English translation of Shareholder’s Voting Proxy Agreement dated December 15, 2009 between Xi’an Softech Co., Ltd., Xi’an Kingtone InformationTechnology Co., Ltd. and the shareholders of Xi’an Kingtone Information Technology Co., Ltd.4.1*English translation of Exclusive Technology Service Agreement dated December 15, 2009 between Xi’an Softech Co., Ltd. and Xi’an KingtoneInformation Technology Co., Ltd.4.2*English translation of Exclusive Option Agreement dated December 15, 2009 between Xi’an Softech Co., Ltd., Xi’an Kingtone InformationTechnology Co., Ltd. and the shareholders of Xi’an Kingtone Information Technology Co., Ltd.4.3*English translation of Equity Pledge Agreement dated December 15, 2009 between Xi’an Softech Co., Ltd., Xi’an Kingtone Information TechnologyCo., Ltd. and the shareholders of Xi’an Kingtone Information Technology Co., Ltd.4.4*English translation of Loan Agreement dated September 14, 2009 between Xi’an Kingtone Information Technology Co., Ltd. and Xian CityCommercial Bank.4.5*English translation of Mortgage Agreement dated September 14, 2009 between Xi’an Kingtone Information Technology Co., Ltd. and Xian CityCommercial Bank.4.6*English translation of Form of Employment Agreement entered into between the Company and the Company’s executive officers.4.7*2010 Omnibus Incentive Plan of the Company.4.8**English translation of Project Construction Contract dated August 10, 2010 between Xi’an Hu County Yuxing Agriculture Science & TechnologyCo., Ltd. and Xi’an Kingtone Information Technology Co., Ltd.4.9***Asset Exchange Agreement by and between C Media Limited and the Company dated as of January 25, 2018.4.10***Securities Purchase Agreement by and among Redstone YYL Management Limited and five shareholders holding majority of the shares of theCompany dated as of January 25, 2018.4.15Exclusive Business Cooperation Agreement by and between Zhongchuan Tianxia Information Technology (Shenzhen) Co., Ltd., and Beijing MobileVision Technology Co., Ltd., dated August 31, 2015.764.16Exclusive Option Agreement by and among Zhongchuan Tianxia Information Technology (Shenzhen) Co., Ltd., Xuesong Song, Weili Chen, PingWang, Donglai Liu, and Beijing Mobile Vision Technology Co., Ltd., dated August 31, 2015.4.17Equity Interest Pledge Agreement by and among Zhongchuan Tianxia Information Technology (Shenzhen) Co., Ltd., Xuesong Song, Weili Chen, PingWang, Donglai Liu, and Beijing Mobile Vision Technology Co., Ltd., dated August 31, 2015.4.18Addendum to Asset Exchange Agreement by and among the Company, Topsky Infotech Holdings Pte Ltd. and C Media Limited, dated October 3,2018. Incorporated by reference to the Company’s Current Report on Form 6K filed on October 4, 2018.4.19Stock Purchase Agreement, dated August 25, 2018, by and among the Company, LK Technology Ltd., and the shareholders listedtherein. Incorporated by reference to the Company’s Current Report on Form 6K filed on August 27, 2018.4.20Power of Attorney by Weili Chen, dated August 31, 2015.4.21Power of Attorney by Ping Wang, dated August 31, 2015.4.22Power of Attorney by Donglai Liu, dated August 31, 2015.4.23Power of Attorney by Xuesong Song, dated August 31, 2015.8.1List of Subsidiaries and Consolidated Variable Interest Entities10.1Employment Agreement, dated August 19, 2018, between Luokung Technology Corp. and Xuesong Song.†10.2Employment Agreement, dated August 19, 2018, by and between Luokung Technology Corp. and Jie Yu.†12.1Certification of Chief Executive Officer required by Rule 13a14(a).12.2Certification of Chief Financial Officer required by Rule 13a14(a).13.1Certification of Chief Executive Officer required by Rule 13a14(a).13.2Certification of Chief Financial Officer required by Rule 13a14(a).101.INSXBRL Instance Document.101.SCHXBRL Taxonomy Extension Schema Document.101.CALXBRL Taxonomy Extension Calculation Linkbase Document.101.DEFXBRL Taxonomy Extension Definition Linkbase Document.101.LABXBRL Taxonomy Extension Label Linkbase Document.101.PREXBRL Taxonomy Extension Presentation Linkbase Document.*Previously filed as an exhibit to the Company’s Registration Statement on Form F1 (Reg. No. 333166056) filed with the Commission and incorporated hereinby reference.**Previously filed as exhibits to the Company’s Transition Report on Form 20F filed with the Commission on January 20, 2011 and incorporated herein byreference.***Previously filed as exhibits to the Company’s Annual Report on Form 20F filed with the Commission on February 9, 2018 and incorporated herein byreference.†Indicates management contract or compensatory plan, contract or arrangement.77LK Technology Ltd. and SubsidiariesCONSOLIDATED FINANCIAL STATEMENTSTABLE OF CONTENTSPage(s)Report of Independent Registered Public Accounting FirmF2Consolidated Financial StatementsConsolidated Balance SheetsF3Consolidated Statements of Operations and Comprehensive LossF4application.Chuang (Vincent) Tao was appointed as a member of the Board effective on August 25, 2018. Dr. Tao was the Chairman of SuperEngine Suzhou from 2014to 2017. Dr. Tao has been the president of the Seasky Angel Investment Alliance of Shanghai since 2015. Dr. Tao received his Bachelor Degree of geographicinformation and telemetry from Wuhan University in China in 1990 and received his Ph.D. from University of Calgary, Canada in 1997.Dennis Galgano was appointed as a director of the Company following the consummation of the asset exchange agreement. He was a registered consultantwith Morgan Joseph Triartisan LLC from November 2016 until October 2017, and previously served as vice chairman and head of international investment bankingfor Morgan Joseph Triartisan LLC, which is a registered broker dealer engaged in the investment banking and financial advisory industry. Mr. Galgano received aB.S. degree in Chemistry from St. John’s University and an M.B.A. from The Wharton School in 1972.Jin Shi was appointed as a director of the Company following the consummation of the asset exchange transactions. Mr. Shi has served as the managingpartner of Chum Capital Group, a merchant bank focused on helping Chinese growth companies to access global capital, since January 2013. Mr. Shi has also servedas a director of Seven Stars Cloud Group, Inc. (NASDAQ: SSC), a premium video on demand service provider, since January 2014, and joined the audit committee ofits board of directors in March 2016. He also served as a director and member of the audit committee of Pingtan Marine Enterprise, Ltd. (NASDAQ: PME), a marineenterprise group primarily engaged in ocean fishing through its subsidiaries. Mr. Shi received an EMBA degree from the Guanghua Management School of BeijingUniversity, and a Bachelor’s degree of science in Chemical Engineering from Tianjin University.Jiming Ha was appointed as a director of the Company following the consummation of the asset exchange agreement, and has also served as a seniorresearch fellow for the China Finance 40 Forum since March 1, 2018, and previously served as a managing director of Goldman Sachs from January 2017 to April2017. Mr. Ha served as a vice chairman and chief investment strategist of the Investment Strategy Group for Private Wealth Management at Goldman Sachs from2010 to January 2017. Mr. Ha holds a PhD in Economics from the University of Kansas and Master’s and Bachelor’s degrees of science from Fudan University.Zhihao Xu was appointed as a director of the Company following the consummation of the asset exchange transactions. Mr. Xu has served as the chiefexecutive officer of Geely Group Co., Ltd., in Hangzhou, China, since December 2017, and previously served as the chairman and chief executive officer of BeijingDingchengrenhe Investment Co., Ltd., a funds management company, from January 2017 to December 2017. Mr. Xu served as the chairman of president of HNAUSOLV CO., LTD., and the chief innovation officer of HNA Logistics Group from January 2014 to December 2016, and prior to that as the chairman of GopayInnovation Technology Co. Ltd., an online payment system operator supporting online money transfers, from April 2012 to January 2014. Mr. Xu graduated from theBusiness School of Renmin University of China and from the Wudaokou Finance College of Tsinghua University with a fund qualification certificate and securitiesqualification certificate.B. COMPENSATION.Compensation of Directors and Executive OfficersFor the ninemonth transition period ended September 30, 2018 and the fiscal year ended December 31, 2017, we did not pay any cash compensation to ourexecutive officers of LK Technology Ltd. and a to our directors for serving on our board of directors of LK Technology Ltd.37Other than nonemployee directors, we do not intend to compensate directors for serving on our board of directors or any of its committees. We do,however, intend to reimburse each member of our board of directors for outofpocket expenses incurred by each director in connection with attending meetings ofthe board of directors and its committees.AdministrationThe Incentive Plan is administered by our board of directors, or at the discretion of the board, by our compensation committee. Our board of directors hasdelegated authority to our compensation committee to administer the Incentive Plan. Subject to the terms of the Incentive Plan, the compensation committee mayselect participants to receive awards, determine the types of awards and terms and conditions of awards, and interpret provisions of the Incentive Plan.The ordinary shares issued or to be issued under the Incentive Plan consist of authorized but unissued shares. If any ordinary shares covered by an awardare not purchased or are forfeited, or if an award otherwise terminates without delivery of any ordinary shares, then the number of ordinary shares counted againstthe aggregate number of ordinary shares available under the plan with respect to the award will, to the extent of any such forfeiture or termination, again be availablefor making awards under the Incentive Plan.EligibilityAwards may be made under the Incentive Plan to our employees, officers, directors, consultants or advisers or to any of our affiliates, and to any otherindividual whose participation in the Incentive Plan is determined to be in our best interests by our board of directors.Amendment or Termination of the PlanOur board of directors may terminate or amend the Incentive Plan at any time and for any reason. No amendment, however, may adversely impair the rightsof grantees with respect to outstanding awards. The Incentive Plan has a term of ten years. Amendments will be submitted for shareholder approval to the extentrequired by applicable stock exchange listing requirements or other applicable laws.OptionsThe Incentive Plan permits the granting of options to purchase ordinary shares intended to qualify as incentive share options under the Internal RevenueCode and share options that do not qualify as incentive share options, or nonqualified share options.The exercise price of each share option may not be less than 100% of the fair market value of our ADSs representing ordinary shares on the date of grant.In the case of certain 10% shareholders who receive incentive share options, the exercise price may not be less than 110% of the fair market value of our ADSsrepresenting ordinary shares on the date of grant. An exception to these requirements is made for options that we grant in substitution for options held byemployees of companies that we acquire. In such a case the exercise price is adjusted to preserve the economic value of the employee’s share option from his or herformer employer.The term of each share option is fixed by the compensation committee and may not exceed ten years from the date of grant. The compensation committeedetermines at what time or times each option may be exercised and the period of time, if any, after retirement, death, disability or termination of employment duringwhich options may be exercised.Options may be made exercisable in installments. The award agreement provides the vesting of the options. Exercisability of options may be accelerated bythe compensation committee.38In general, an optionee may pay the exercise price of an option by (1) cash or check (in U.S. dollars or Renminbi or other local currency as approved by thecompensation committee), (2) ordinary shares held for such period of time as may be required by the compensation committee, (3) delivery of a notice of a marketorder with a broker with respect to ordinary shares then issuable upon exercise of an option, and that the broker has been directed to pay us a sufficient portion ofnet proceeds of the sale in satisfaction of the exercise price, provided that payment of such proceeds is then made to us upon settlement of such sale, (4) otherproperty acceptable to the compensation committee with a fair market value equal to the exercise price, (5) cashless exercise or (6) any combination of the foregoing.Share options granted under the Incentive Plan may not be sold, transferred, pledged, or assigned other than by will or under applicable laws of descentand distribution. However, we may permit limited transfers of nonqualified options for the benefit of immediate family members of grantees to help with estateplanning concerns or pursuant to a domestic relations order in settlement of marital property rights.Other AwardsThe compensation committee may also award under the Incentive Plan:1.ordinary shares subject to restrictions;2.deferred ordinary shares, credited as deferred ordinary share units, but ultimately payable in the form of unrestricted ordinary shares inaccordance with the terms of the grant or with the participant’s deferral election;3.ordinary share units subject to restrictions;4.unrestricted ordinary shares, which are ordinary shares issued at no cost or for a purchase price determined by the compensation committee whichare free from any restrictions under the 2011 Omnibus Incentive Plan;5.dividend equivalent rights entitling the grantee to receive credits for dividends that would be paid if the grantee had held a specified number ofordinary shares; or6.a right to receive a number of ordinary shares or, in the discretion of the compensation committee, an amount in cash or a combination of ordinaryshares and cash, based on the increase in the fair market value of the ADSs representing ordinary shares underlying the right during a statedperiod specified by the compensation committee.Effect of Certain Corporate TransactionsCertain change of control transactions involving us may cause awards granted under the Incentive Plan to vest, unless the awards are continued orsubstituted for by the surviving company in connection with the corporate transaction.Unless otherwise provided in the appropriate option agreement on the date of grant or provided by our board of directors thereafter with the consent of thegrantee, options granted under the Incentive Plan become exercisable in full following (1) a dissolution of our company or a merger, consolidation or reorganizationof our company with one or more other entities in which we are not the surviving entity, (2) a sale of substantially all of our assets to another person or entity, or (3)any transaction (including without limitation a merger or reorganization in which we are the surviving entity) which results in any person or entity owning 50% ormore of the combined voting power of all classes of our shares.39Adjustments for Dividends and Similar EventsThe compensation committee will make appropriate adjustments in outstanding awards and the number of ordinary shares available for issuance under theIncentive Plan, including the individual limitations on awards, to reflect ordinary share dividends, stock splits and other similar events.C. BOARD PRACTICES.Board of DirectorsOur board of directors consists of six members being Messrs. Xuesong Song, Kegang Peng, Dennis Galgano, Jin Shi, Jiming Ha and Zhiaho Xu. Ourdirectors hold office until our annual meeting of shareholders, where their successors will be duly elected and qualified, or until the directors’ death, resignation orremoval, whichever is earlier. Our directors are not subject to a term of office and hold office until their resignation, death or incapacity or until their respectivesuccessors have been elected and qualified in accordance with our fourth amended and restated memorandum of association and articles of association. A directorwill be removed from office if, among other things, the director (1) becomes bankrupt, (2) dies or becomes of unsound mind, or (3) is absent from meetings of ourboard of directors for six consecutive months without leave and our board of directors resolves that the office is vacated. A director is not entitled to any specialbenefits upon termination of service with the company.Director IndependenceOur board of directors consists of six members; Messrs. Dennis Galgano, Jin Shi, Jiming Ha and Zhihao Xu have been determined by us to be independentdirectors within the meaning of the independent director guidelines of the NASDAQ Corporate Governance Rules (the “NASDAQ Rules”).Committees of Our Board of DirectorsTo enhance our corporate governance, we established three committees under our board of directors: an audit committee, a compensation committee, and anominating and corporate governance committee. We have adopted a charter for each of these committees. The committees have the following functions andmembers.Audit CommitteeOur audit committee reports to our board of directors regarding the appointment of our independent public accountants, the scope and results of ourannual audits, compliance with our accounting and financial policies and management’s procedures and policies relating to the adequacy of our internal accountingcontrols. Our audit committee consists of Messrs. Dennis Galgano, Jin Shi, and Jiming Ha. Mr. Galgano, having accounting and financial management expertise,serves as the chairman of the audit committee and is an “audit committee financial expert” as defined by the rules and regulations of the SEC. Our board of directorshas determined that each of these persons meet the definition of an “independent director” under the applicable NASDAQ Rules and under Rule 10A3 of theSecurities Exchange Act of 1934, as amended (the “Exchange Act”).Our audit committee is responsible for, among other things:●the appointment, evaluation, compensation, oversight and termination of the work of our independent auditor (including resolution of disagreementsbetween management and the independent auditor regarding financial reporting);●an annual performance evaluation of the audit committee;●establishing procedures for the receipt, retention and treatment of complaints regarding accounting, internal accounting controls, auditing matters orpotential violations of law, and the confidential, anonymous submission by our employees of concerns regarding questionable accounting or auditingmatters or potential violations of law;40●ensuring that it receives an transition report from our independent auditor describing our internal control procedures and any steps taken to deal withmaterial control deficiencies and attesting to the auditor’s independence and describing all relationships between the auditor and us;●reviewing our annual audited financial statements and quarterly financial statements with management and our independent auditor;●reviewing and approving all proposed related party transactions;●reviewing our policies with respect to risk assessment and risk management;●meeting separately and periodically with management and our independent auditor; and●reporting regularly to our board of directors.Compensation CommitteeOur compensation committee assists the board of directors in reviewing and approving the compensation structure of our directors and executive officers,including all forms of compensation to be provided to our directors and executive officers. In addition, the compensation committee reviews share compensationarrangements for all of our other employees. Members of the compensation committee are not prohibited from direct involvement in determining their owncompensation. Our chief executive officer is not permitted to be present at any committee meeting during which his or her compensation is deliberated. Ourcompensation committee consists of Dennis Galgano and Jin Shi, with Mr. Shi serving as the chairman of the compensation committee. Our board of directors hasdetermined that each of these persons meet the definition of “independent director” under the applicable requirements of the NASDAQ Rules.Our compensation committee is responsible for, among other things:●reviewing and approving corporate goals and objectives relevant to the compensation of our chief executive officer, evaluating the performance of ourchief executive officer in light of those goals and objectives and setting the compensation level of our chief executive officer based on this evaluation;●reviewing and making recommendations to the board with respect to the compensation of our executives, incentive compensation and equitybasedplans that are subject to board approval; and●providing annual performance evaluations of the compensation committee.Nominating and Corporate Governance CommitteeOur nominating and corporate governance committee assists the board of directors in identifying and selecting or recommending individuals qualified tobecome our directors, developing and recommending corporate governance principles and overseeing the evaluation of our board of directors and management. Ournominating and corporate governance committee consists of Jiming Ha and Zhihao Xue, with Mr. Ha serving as the chairman of the nominating and corporategovernance committee. Our board of directors has determined that each of these persons meet the definition of “independent director” under the applicablerequirements of the NASDAQ Rules.Our nominating and corporate governance committee is responsible for, among other things:●selecting and recommending to our board nominees for election or reelection to our board, or for appointment to fill any vacancy;●reviewing annually with our board the current composition of the board of directors with regards to characteristics such as independence, age, skills,experience and availability of service to us;●selecting and recommending to our board the names of directors to serve as members of the audit committee and the compensation committee, as wellas the nominating and corporate governance committee itself; advising our board of directors periodically with regards to significant developments inthe law and practice of corporate governance as well as our compliance with applicable laws and regulations, and making recommendations to ourboard of directors on all matters of corporate governance and on any remedial action to be taken; and●monitoring compliance with our code of business conduct and ethics, including reviewing the adequacy and effectiveness of our procedures to ensureproper compliance.41Code of Business Conduct and EthicsOur board of directors adopted a code of business conduct and ethics applicable to our directors, officers and employees.Duties of DirectorsUnder British Virgin Islands law, our directors have a duty to act honestly, in good faith and with a view to our best interests. Our directors also have a dutyto exercise care, diligence and skills that a reasonably prudent person would exercise in comparable circumstances. In fulfilling their duty of care to us, our directorsmust ensure compliance with our memorandum of association and articles of association. We have the right to seek damages if a duty owed by our directors isbreached.The functions and powers of our board of directors include, among others:●appointing officers and determining the term of office of the officers;●authorizing the payment of donations to religious, charitable, public or other bodies, clubs, funds or associations as deemed advisable;●exercising the borrowing powers of the company and mortgaging the property of the company;●executing cheques, promissory notes and other negotiable instruments on behalf of the company; and●maintaining or registering a register of mortgages, charges or other encumbrances of the company.Remuneration and BorrowingThe directors may receive such remuneration as our board of directors may determine from time to time. Each director is entitled to be repaid or prepaid alltraveling, hotel and incidental expenses reasonably incurred or expected to be incurred in attending meetings of our board of directors or committees of our board ofdirectors or shareholder meetings or otherwise in connection with the discharge of his or her duties as a director. The compensation committee will assist thedirectors in reviewing and approving the compensation structure for the directors.Our board of directors may exercise all the powers of the company to borrow money and to mortgage or charge our undertakings and property or any partthereof, to issue debentures, debenture stock and other securities whenever money is borrowed or as security for any debt, liability or obligation of the company orof any third party.QualificationA director is not required to hold shares as a qualification to office.42Limitation on Liability and Other Indemnification MattersBritish Virgin Islands law does not limit the extent to which a company’s memorandum of association and articles of association may provide forindemnification of officers and directors, except to the extent any such provision may be held by the British Virgin Islands courts to be contrary to public policy,such as to provide indemnification against civil fraud or the consequences of committing a crime.Under our memorandum of association and articles of association, we may indemnify our directors, officers and liquidators against all expenses, includinglegal fees, and against all judgments, fines and amounts paid in settlement and reasonably incurred in connection with civil, criminal, administrative or investigativeproceedings to which they are party or are threatened to be made a party by reason of their acting as our director, officer or liquidator. To be entitled toindemnification, these persons must have acted honestly and in good faith with a view to the best interest of the company and, in the case of criminal proceedings,they must have had no reasonable cause to believe their conduct was unlawful.Compensation Committee Interlocks and Insider ParticipationNone of the members of our compensation committee is an officer or employee of our company. None of our executive officers currently serves, or in thepast year has served, as a member of the board of directors or compensation committee of any entity that has one or more executive officers serving on our board ofdirectors or compensation committee.Employment AgreementsOn August 19, 2018, the Company entered into an Employment Agreement (the “Song Agreement”) with Mr. Xuesong Song, to serve as the ChiefExecutive Officer of the Company for a fouryear term, subject to renewal. Under the terms of the Song Agreement, Mr. Song will receive no salary for his servicesbut will be eligible for an annual cash bonus in the Board’s sole discretion.On August 19, 2018, the Company entered into an Employment Agreement (the “Yu Agreement”) with Mr. Jie Yu, to serve as the Chief Financial Officer ofthe Company for a fouryear term, subject to renewal. Under the terms of the Yu Agreement, Mr. Yu will receive an annual salary of RMB700,000, and will be eligiblefor an annual cash bonus in the Board’s sole discretion.D. EMPLOYEES.As of September 30, 2018 and December 31, 2017, we had a total of 107 and 37 fulltime employees, including 48 and 13 in research and development, 9 and 2in sales and marketing and the rest in a variety of other divisions, respectively. All of our employees are fulltime employees. None of our employees is currentlyrepresented by a union and/or collective bargaining agreements. We believe that we have good relations with our employees and since our inception we have hadno history of work stoppages or union organizing campaigns.E. SHARE OWNERSHIP.The following table provides information as to the beneficial ownership of our ordinary shares as of October 10, 2018, by the persons listed. Beneficialownership of shares is determined under the rules of the SEC and generally includes any shares over which a person exercises sole or shared voting or investmentpower. For purposes of the following table, a person is deemed to have beneficial ownership of any ordinary shares if such person has the right to acquire suchshares within 60 days of October 10, 2018. For purposes of computing the percentage of outstanding shares held by each person, any shares that such person hasthe right to acquire within 60 days after of October 10, 2018 are deemed to be outstanding, but are not deemed to be outstanding for the purpose of computing thepercentage ownership of any other person. Except as otherwise noted, the persons named in the table have sole voting and investment power with respect to all ofthe ordinary shares beneficially owned by them. Unless otherwise indicated, the address of each person listed is c/o Luokung Technologies, LAB 32, SOHO 3Q, No9, Guanghua Road, Chaoyang District, Beijing, People’s Republic of China.43Percentage ownership in the following table is based on 199,317,558 ordinary shares outstanding on October 10, 2018.Number ofsharesPercent ofclassDirectors and named executive officersCharm Dragon International Limited (1)4,030,8822.03%Xuesong Song, Chairman, Chief Executive Officer and Director(2)38,156,43019.30%Kegang Peng, Vice President and Director (3)17,231,9558.71%Dennis Galgano, Director75,796*%Jin Shi, DirectorJiming Ha, DirectorZhihao Xu, Director (4)7,579,1843.83%Dongpu Zhang, President (5)2,321,7921.17%Chuang Tao, Director (6)1,221,996*%Directors and executive officers as a group (10 persons)66,587,15233.69%(1)Charm Dragon International Limited is a British Virgin Islands company controlled by Mr. Xuesong Song.(2)Consists of (i) 4,030,882 shares owned directly by Charm Dragon International Limited, a British Virgin Islands company and (ii) 22,624,793 shares owneddirectly by Bravo First Development Limited, a British Virgin Islands company. Mr. Xuesong Song is the controlling shareholder of Bravo First DevelopmentLimited. Mr. Xuesong Song is the sole director of Charm Dragon International Limited.(3)Consists of 17,231,955 shares owned directly by Plenty Prestige Enterprises Limited, a British Virgin Islands company. Mr. Kegang Peng is the sole director ofPlenty Prestige Enterprises Limited.(4)Consists of 7,579,184 shares directly owned by Geely Group Limited., a Chinese company. Mr. Zhihao Xu is the Chief Executive Officer of Geely GroupLimited.(5)Consists of 2,321,792 shares owned directly by Genoa Peak Limited, a British Virgin Islands company. Mr. Dongpu Zhang controls Genoa Peak Limited.(6)Consists of 1,221,996 shares owned directly by Globalearth Holdings Limited, a British Virgin Islands company. Mr. Chuang Tao controls Globalearth HoldingsLimited.*Represents less than 1% of shares outstandingITEM 7. MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS.A. MAJOR SHAREHOLDERSPlease refer to Item 6.E “Directors, Senior Management and Employees — Share Ownership.”To our knowledge, (A) we are not directly or indirectly owned or controlled by (i) another corporation or (ii) any foreign government and (B) there are noarrangements (including any announced or expected takeover bid), the operation of which may at a subsequent date result in a change in our control.The voting rights of our major shareholders do not differ from the voting rights of other holders of the same class of shares.44B. RELATED PARTY TRANSACTIONS. BUSINESS RELATIONSHIPS.Our subsidiaries, consolidated affiliated entities, and the subsidiaries of the consolidated affiliated entities have engaged, during the ordinary course ofbusiness, in a number of customary transactions with each other. All of these intercompany balances have been eliminated in consolidation.As of December 31, 2017, we had amounts due from related parties, C Media Limited and Ya Tuo Ji International Consultancy (Beijing) Limited, in theamounts of $11.8 million and $0.2 million, respectively. These amounts due from related parties are short term in nature, noninterest bearing, unsecured andrepayable on demand.As of December 31, 2017, we had amounts due to related parties, Mr. Xuesong Song, our chairman and chief executive officer, Thumb Beijing Branch andThumb Shenzhen Branch, in the amounts of $2.9 million, $0.6 million and $0.03 million, respectively. These amounts due to related parties are short term in nature,noninterest bearing, unsecured and payable on demand.We are party to a series of control agreements with Beijing Zhong Chuan Shi Xun. In addition, our chief executive officer, Mr. Xuesong Song, serves as andofficer of Beijing Zhong Chuan Shi Xun and is a shareholder of Beijing Zhong Chuan Shi Xun. The following table sets forth the relationship of Mr. Song withBeijing Zhong Chuan Shi Xun:NameRelationship withLuokung TechnologyRelationship withBeijing Zhong Chuan Shi XunPercentageOwnership Interest inBeijing Zhong Chuan Shi XunXuesong SongChief Executive OfficerChief Executive Officer61.83%C. INTERESTS OF EXPERTS AND COUNSEL.None.ITEM 8. FINANCIAL INFORMATION.A. CONSOLIDATED STATEMENTS AND OTHER FINANCIAL INFORMATION.See “Item 18. Financial Statements.”Legal ProceedingsTo our knowledge, other than as described below there are no material legal proceedings threatened against us. From time to time, we may be subject tovarious claims and legal actions arising in the ordinary course of business. Following the consummation of the AEA, we became successor in interest to the legalproceedings described below.Litigation with Shanghai Fusheng Weier Intelligent Control Technology Co., Ltd.On January 22, 2016, Zhong Chuan Rui You and Shanghai Fusheng Weier Intelligent Control Technology Co., Ltd. (“Fusheng Weier”) signed a contract forequipment of $1,652,842 (RMB10,800,000). Since Zhong Chuan Rui You did not make the payments of $1,126,381 (RMB7,360,000) on the due dates, Fusheng Weierfiled a lawsuit against Zhong Chuan Rui You in Shanghai Xuhui District People's Court on October 8, 2016. On March 9, 2017, Xuhui District People's Court issuedthe verdict requiring Zhong Chuan Rui You to pay the overdue debts. In August 2017, C Media Limited made the payment of $512,075 (RMB3,346,000). Theremaining balance has been accrued in accounts payable. The payment schedule for the remaining balance is being negotiated by the two parties. On February 5,2018, a hearing was held adding Zhong Chuan Shi Xun as a defendant. The Group plans to settle the remaining balance within one year.45Lawsuit with Gansu Jinlun Culture Media Co., Ltd.On August 22, 2014, Zhong Chuan Rui You and Gansu Jinlun Culture Media Co., Ltd. (“Gansu Jinlun”) signed a “Lanzhou Railway Bureau AirconditionedTrain WiFi Network System Advertising Operation Rights Agreement” for advertising on 72 trains of $1,467,880 (RMB9,604,633). Due to the dispute on theproject implementation, Zhong Chuan Rui You did not pay the advertising fee. On August 23, 2017, Gansu Jinlun filed a lawsuit with Gansu Intermediate People'sCourt. On December 19, 2017, Gansu Intermediate People's Court issued a verdict, ruling that Zhong Chuan Rui You settle the overdue advertising fee. Since only 18out of 72 trains have been installed with Wifi network system, Zhong Chuan Rui You disputed and appealed to the verdict. The next court trial date has not yet beendetermined. C Media and Gansu Jinlun are negotiating a potential settlement to resume the contract. According to the legal counsel, it is probable that the settlementwill amount to approximately $459,000 (RMB3,000,000); therefore, this amount has been accrued in accounts payable as at December 31, 2017.Litigation with Shenzhen Hua Xun Fang Zhou Technology Co., Ltd.On June 16, 2015, Zhong Chuan Rui You signed a cooperation agreement with Shenzhen Hua Xun Fang Zhou Technology Co., Ltd. (“Shenzhen Hua Xun”)and Xuesong Song, a major shareholder of C Media Limited. Pursuant to this agreement, Zhong Chuan Rui You procures equipment from Shenzhen Hua Xun.Xuesong Song acts as a joint liability guarantor for the entire debts of Zhong Chuan Rui You under this agreement. As Zhong Chuan Rui You did not make thepayments on the due dates, Shenzhen Hua Xun filed a lawsuit with Shenzhen Baoan District People's Court on May 31, 2016. On November 1, 2016, Zhong ChuanRui You, Xuesong Song and Shenzhen Hua Xun reached a settlement in Shenzhen Baoan District People's Court to settle $1,735,389 (RMB11,355,000) in fourinstalments. On December 30, 2017, the debt was assigned to C Media Limited.Dividend PolicyWe currently intend to retain all of our available funds and future earnings for use in the operation and expansion of our business and do not anticipatepaying cash dividends in the foreseeable future. Under the terms of our Amended and Restated Memorandum and Articles of Association the declaration andpayment of any dividends in the future will be determined by our board of directors, in its discretion, and will depend on a number of factors, including our earnings,capital requirements and overall financial condition and our ability to receive dividends from our subsidiaries. If we pay any dividends, we will pay our ADS holders’dividends with respect to their underlying shares to the same extent as holders of our ordinary shares, subject to the terms of the deposit agreement, including thefees and expenses payable thereunder. Cash dividends on our ordinary shares, if any, will be paid in U.S. dollars.Our ability to receive dividends from our subsidiaries may limit our ability to pay dividends on our ordinary shares. See Risk Factors – Risks Related toDoing Business in China – Our holding company structure may limit the payment of dividends” and “Item 10. Additional Information – D. Exchange Controls –Dividend Distribution”.B. SIGNIFICANT CHANGES.N/AITEM 9. THE OFFER AND LISTINGA. OFFER AND LISTING DETAILS.Markets and Share Price HistoryOur ordinary shares are not currently listed on any trading market. Our American Depository Shares (“ADSs”) were voluntarily delisted from the NASDAQCapital Market on September 19, 2018. We have applied to NASDAQ for the listing of our ordinary shares on the NASDAQ Capital Market and received an approvalfor listing of Ordinary Shares on August 6, 2018, and as of the date of this transition report, that application and approval are currently under review.46The table below sets forth the high and low reported sales prices in dollars of our ordinary shares, which are represented by ADSs, as reported byNASDAQ in the periods as indicated:ADSHighLowAnnual Highs and Lows (as of the fiscal year end 09/30 for the five most recent full financial years)*20175.592.67201610.21.62Quarterly Highs and Lows (for the two most recent full financial years and any subsequent period, based on calendarquarter end)*2018Third Quarter8.006.30Second Quarter8.824.25First Quarter6.403.702017Fourth Quarter5.592.91Third Quarter3.992.67Second Quarter4.063.07First Quarter5.152.832016Fourth Quarter6.594.20Third Quarter10.201.62Second Quarter3.101.97First Quarter3.602.12Monthly Highs and Lows (for the most recent six months)September 20188.006.41August 20187.706.63July 20187.506.30June 20188.827.55May 20187.805.92April 20187.454.25*The Company effected a 1for10 reverse stock split of its ordinary shares on November 6, 2012 (the “Reverse Split”). The ratio between each AmericanDepositary Share (“ADS”) and its underlying ordinary share postReverse Split remains the same, namely, one ADR remains to represent one ordinary sharepost the Reverse Split. The price listed here after November 6, 2012 reflected the effect from the Reverse Split.B. PLAN OF DISTRIBUTION.Not Applicable.C. MARKETS.Our ordinary shares are not currently listed on any trading market. Our ADSs were voluntarily delisted from the NASDAQ Capital Market on September 19,2018. We have applied to NASDAQ for the listing of our ordinary shares on the NASDAQ Capital Market and received an approval for listing of Ordinary Shares onAugust 6, 2018, and as of the date of this transition report, that application and approval are currently under review.47D. SELLING SHAREHOLDERS.Not applicable.E. DILUTION.Not applicable.F. EXPENSES OF THE ISSUE.Not applicable.ITEM 10. ADDITIONAL INFORMATION.A. SHARE CAPITALNot applicable.B. MEMORANDUM AND ARTICLES OF ASSOCIATIONWe are a British Virgin Islands company incorporated with limited liability and our affairs are governed by the provisions of our memorandum of associationand articles of association, as amended and restated from time to time, and by the provisions of applicable British Virgin Islands law.Our memorandum of association and articles of association authorize the issuance of up to 251,000,000 shares, which are designated into (i) 250,000,000 ofordinary shares of the Company (“Ordinary Shares”), and (ii) 1,000,000 preferred shares of the Company (“Preferred Shares”), in each case with the rights,preferences and privileges as set out in the memorandum and articles of association of the Company.Please see below for a description of our ADSs under “Item 12. Description of Securities Other Than Equity Securities – D. American Depository Shares.”The following is a summary of the material provisions of our ordinary shares and our memorandum of association and articles of association.Ordinary SharesAll of our issued and outstanding ordinary shares are fully paid and nonassessable. Holders of our ordinary shares who are nonresidents of the BritishVirgin Islands may freely hold and vote their shares.Subject to the memorandum and articles of association (and, for greater clarity, without prejudice to any special rights conferred thereby on the holders ofany other shares), an Ordinary Share of the Company confers on the holder:(a)the right to one vote per Ordinary Share at a meeting of the members or on any resolution of members;(b)the right to an equal share in any distribution paid by the Company; and(c)the right to an equal share in the distribution of the surplus assets of the Company on a winding up;48Subject to the memorandum and articles of association (and, for greater clarity, without prejudice to any special rights conferred thereby on the holders ofany other shares), a Preferred Share of the Company confers on the holder:(a)the right to 399 votes per Preferred Share at a meeting of the members or on any resolution of members;(b)the right to an equal share in any distribution paid by the Company;(c)the right to an equal share in the distribution of the surplus assets of the Company on a winding up;(d)be freely transferable, in whole or in part, by Mr. Xuesong Song to any third party through one or more Private Transactions, subject toApplicable Law; and(e)be freely transferable, in whole or in part, by Mr. Xuesong Song to any third party through one or more Public Transactions, subject to ApplicableLaw and Automatic Conversion of such Preferred Share(s) into Ordinary Share(s).Each Preferred Share shall be automatically converted at any time after issue and without the payment of any additional sum into an equal number of fullypaid Ordinary Shares upon the conclusion of any transfer by Mr. Xuesong Song to any third party through one or more Public Transactions.Limitation on Liability and Indemnification MattersUnder British Virgin Islands law, each of our directors and officers, in performing his or her functions, is required to act honestly and in good faith with aview to our best interests and exercise the care, diligence and skill that a reasonably prudent person would exercise in comparable circumstances. Our memorandumof association and articles of association provide that, to the fullest extent permitted by British Virgin Islands law or any other applicable laws, our directors will notbe personally liable to us or our shareholders for any acts or omissions in the performance of their duties. Such limitation of liability does not affect the availabilityof equitable remedies such as injunctive relief or rescission. These provisions will not limit the liability of directors under United States federal securities laws.We may indemnify any of our directors or anyone serving at our request as a director of another entity against all expenses, including legal fees, andagainst all judgments, fines and amounts paid in settlement and reasonably incurred in connection with legal, administrative or investigative proceedings. We mayonly indemnify a director if he or she acted honestly and in good faith with the view to our best interests and, in the case of criminal proceedings, the director hadno reasonable cause to believe that his or her conduct was unlawful. The decision of our board of directors as to whether the director acted honestly and in goodfaith with a view to our best interests and as to whether the director had no reasonable cause to believe that his or her conduct was unlawful, is in the absence offraud sufficient for the purposes of indemnification, unless a question of law is involved. The termination of any proceedings by any judgment, order, settlement,conviction or the entry of no plea does not, by itself, create a presumption that a director did not act honestly and in good faith and with a view to our best interestsor that the director had reasonable cause to believe that his or her conduct was unlawful. If a director to be indemnified has been successful in defense of anyproceedings referred to above, the director is entitled to be indemnified against all expenses, including legal fees, and against all judgments, fines and amounts paidin settlement and reasonably incurred by the director or officer in connection with the proceedings.We may purchase and maintain insurance in relation to any of our directors or officers against any liability asserted against the directors or officers andincurred by the directors or officers in that capacity, whether or not we have or would have had the power to indemnify the directors or officers against the liabilityas provided in our memorandum of association and articles of association.Insofar as indemnification for liabilities arising under the Securities Act may be permitted for our directors or officers under the foregoing provisions, wehave been informed that in the opinion of the Securities and Exchange Commission, such indemnification is against public policy as expressed in the Securities Actand is therefore unenforceable as a matter of United States law.49Differences in Corporate LawWe were incorporated under, and are governed by, the laws of the British Virgin Islands. The corporate statutes of the State of Delaware and the BritishVirgin Islands are similar, and the flexibility available under British Virgin Islands law has enabled us to adopt memorandum of association and articles of associationthat will provide shareholders with rights that do not vary in any material respect from those they would enjoy if we were incorporated under the Delaware GeneralCorporation Law, or Delaware corporate law. Set forth below is a summary of some of the differences between provisions of the BVI Act applicable to us and thelaws application to companies incorporated in Delaware and their shareholders.Director’s Fiduciary DutiesUnder Delaware corporate law, a director of a Delaware corporation has a fiduciary duty to the corporation and its stockholders. This duty has twocomponents: the duty of care and the duty of loyalty. The duty of care requires that a director act in good faith, with the care that an ordinarily prudent personwould exercise under similar circumstances. Under this duty, a director must inform himself of, and disclose to stockholders, all material information reasonablyavailable regarding a significant transaction. The duty of loyalty requires that a director act in a manner he reasonably believes to be in the best interests of thecorporation. He must not use his corporate position for personal gain or advantage. This duty prohibits selfdealing by a director and mandates that the bestinterest of the corporation and its stockholders take precedence over any interest possessed by a director, officer or controlling stockholder and not shared by thestockholders generally. In general, actions of a director are presumed to have been made on an informed basis, in good faith and in the honest belief that the actiontaken was in the best interests of the corporation. However, this presumption may be rebutted by evidence of a breach of one of the fiduciary duties. Should suchevidence be presented concerning a transaction by a director, a director must prove the procedural fairness of the transaction, and that the transaction was of fairvalue to the corporation.British Virgin Islands law provides that every director of a British Virgin Islands company in exercising his powers or performing his duties shall acthonestly and in good faith and in what the director believes to be in the best interests of the company. Additionally, the director shall exercise the care, diligence andskill that a reasonable director would exercise in the same circumstances taking into account the nature of the company, the nature of the decision and the positionof the director and his responsibilities. In addition, British Virgin Islands law provides that a director shall exercise his powers as a director for a proper purpose andshall not act, or agree to the company acting, in a manner that contravenes British Virgin Islands law or the memorandum association or articles of association of thecompany.Amendment of Governing DocumentsUnder Delaware corporate law, with very limited exceptions, a vote of the stockholders is required to amend the certificate of incorporation. Under BritishVirgin Islands law and our memorandum of association and articles of association, (i) our shareholders may amend our memorandum of association and articles ofassociation by a resolution of shareholders, or (ii) our board of directors may amend our memorandum of association and articles of association by a resolution ofdirectors without a requirement for a resolution of shareholders so long as the amendment does not:●restrict the rights of the shareholders to amend the memorandum of association and articles of association;●change the percentage of shareholders required to pass a resolution of shareholders to amend the memorandum of association and articles ofassociation;●amend the memorandum of association and articles of association in circumstances where the memorandum of association and articles ofassociation cannot be amended by the shareholders; or●amend the provisions of memorandum of association or the articles of association pertaining to “rights attaching to shares,” “rights not varied bythe issue of the shares pari passu,” “variation of rights” and “amendment of memorandum and articles”.50Written Consent of DirectorsUnder Delaware corporate law, directors may act by written consent only on the basis of a unanimous vote. Under British Virgin Islands law, directors’consents need only a majority of directors signing to take effect.Written Consent of ShareholdersUnder Delaware corporate law, unless otherwise provided in the certificate of incorporation, any action to be taken at any annual or special meeting ofstockholders of a corporation, may be taken by written consent of the holders of outstanding stock having not less than the minimum number of votes that wouldbe necessary to take such action at a meeting. As permitted by British Virgin Islands law, shareholders’ consents need only a majority of shareholders signing totake effect. Our memorandum of association and articles of association provide that shareholders may approve corporate matters by way of a resolution consentedto at a meeting of shareholders or in writing by a majority of shareholders entitled to vote thereon.Shareholder ProposalsUnder Delaware corporate law, a shareholder has the right to put any proposal before the annual meeting of shareholders, provided it complies with thenotice provisions in the governing documents. A special meeting may be called by the board of directors or any other person authorized to do so in the governingdocuments, but shareholders may be precluded from calling special meetings. British Virgin Islands law and our memorandum of association and articles ofassociation provide that our directors shall call a meeting of the shareholders if requested in writing to do so by shareholders entitled to exercise at least 30% of thevoting rights in respect of the matter for which the meeting is requested.Sale of AssetsUnder Delaware corporate law, a vote of the stockholders is required to approve the sale of assets only when all or substantially all assets are being sold. Inthe British Virgin Islands, shareholder approval is required when more than 50% of the company’s total assets by value are being disposed of or sold.Dissolution; Winding UpUnder Delaware corporate law, unless the board of directors approves the proposal to dissolve, dissolution must be approved by shareholders holding100% of the total voting power of the corporation. Only if the dissolution is initiated by the board of directors may it be approved by a simple majority of thecorporation’s outstanding shares. Delaware corporate law allows a Delaware corporation to include in its certificate of incorporation a supermajority votingrequirement in connection with dissolutions initiated by the board. As permitted by British Virgin Islands law and our memorandum of association and articles ofassociation, we may be voluntarily liquidated under Part XII of the BVI Act by resolution of directors and resolution of shareholders if we have no liabilities and weare able to pay our debts as they fall due.Redemption of SharesUnder Delaware corporate law, any stock may be made subject to redemption by the corporation at its option or at the option of the holders of such stockprovided there remains outstanding shares with full voting power. Such stock may be made redeemable for cash, property or rights, as specified in the certificate ofincorporation or in the resolution of the board of directors providing for the issue of such stock. As permitted by British Virgin Islands law, and our memorandum ofassociation and articles of association, shares may be repurchased, redeemed or otherwise acquired by us. Our directors must determine that immediately followingthe redemption or repurchase we will be able to satisfy our debts as they fall due and the value of our assets exceeds our liabilities.51Variation of Rights of SharesUnder Delaware corporate law, a corporation may vary the rights of a class of shares with the approval of a majority of the outstanding shares of suchclass, unless the certificate of incorporation provides otherwise. As permitted by British Virgin Islands law, and our memorandum of association and articles ofassociation, if our share capital is divided into more than one class of shares, we may vary the rights attached to any class only with the consent in writing ofholders of not less than threefourths of the issued shares of that class and holders of not less than threefourths of the issued shares of any other class of shareswhich may be affected by the variation.Removal of DirectorsUnder Delaware corporate law, a director of a corporation with a classified board may be removed only for cause with the approval of a majority of theoutstanding shares entitled to vote, unless the certificate provides otherwise. As permitted by British Virgin Islands law and our memorandum of association andarticles of association, directors may be removed by resolution of directors or resolution of shareholders.MergersUnder the BVI Act, two or more companies may merge or consolidate in accordance with the statutory provisions. A merger means the merging of two ormore constituent companies into one of the constituent companies, and a consolidation means the uniting of two or more constituent companies into a newcompany. In order to merger or consolidate, the directors of each constituent company must approve a written plan of merger or consolidation which must beauthorized by a resolution of shareholders.Shareholders not otherwise entitled to vote on the merger or consolidation may still acquire the right to vote if the plan of merger or consolidation containsany provision which, if proposed as an amendment to the memorandum association or articles of association, would entitle them to vote as a class or series on theproposed amendment. In any event, all shareholders must be given a copy of the plan of merger or consolidation irrespective of whether they are entitled to vote atthe meeting or consent to the written resolution to approve the plan of merger or consolidation.Inspection of Books and RecordsUnder Delaware corporate law, any shareholder of a corporation may for any proper purpose inspect or make copies of the corporation’s stock ledger, list ofshareholders and other books and records. Holders of our shares have no general right under British Virgin Islands law to inspect or obtain copies of our list ofshareholders or our corporate records. However, we will provide holders of our shares with annual audited financial statements. See “Where You Can FindAdditional Information.”Conflict of InterestThe BVI Act provides that a director shall, after becoming aware that he is interested in a transaction entered into or to be entered into by the company,disclose that interest to the board of directors of the company. The failure of a director to disclose that interest does not affect the validity of a transaction enteredinto by the director or the company, so long as the director’s interest was disclosed to the board prior to the company’s entry into the transaction or was notrequired to be disclosed (for example where the transaction is between the company and the director himself or is otherwise in the ordinary course of business andon usual terms and conditions). As permitted by British Virgin Islands law and our memorandum of association and articles of association, a director interested in aparticular transaction may vote on it, attend meetings at which it is considered, and sign documents on our behalf which relate to the transaction.52Transactions with Interested ShareholdersDelaware corporate law contains a business combination statute applicable to Delaware public corporations whereby, unless the corporation hasspecifically elected not to be governed by such statute by amendment to its certificate of incorporation, it is prohibited from engaging in certain businesscombinations with an “interested shareholder” for three years following the date that such person becomes an interested shareholder. An interested shareholdergenerally is a person or group who or that owns or owned 15% or more of the target’s outstanding voting stock within the past three years. This has the effect oflimiting the ability of a potential acquirer to make a twotiered bid for the target in which all shareholders would not be treated equally. The statute does not apply if,among other things, prior to the date on which such shareholder becomes an interested shareholder, the board of directors approves either the businesscombination or the transaction that resulted in the person becoming an interested shareholder. This encourages any potential acquirer of a Delaware publiccorporation to negotiate the terms of any acquisition transaction with the target’s board of directors.British Virgin Islands law has no comparable provision. As a result, we cannot avail ourselves of the types of protections afforded by the Delawarebusiness combination statute. However, although British Virgin Islands law does not regulate transactions between a company and its significant shareholders, itdoes provide that such transactions must be entered into bona fide in the best interests of the company and not with the effect of constituting a fraud on theminority shareholders.Independent DirectorsThere are no provisions under Delaware corporate law or under the BVI Act that require a majority of our directors to be independent.Cumulative VotingUnder Delaware corporate law, cumulative voting for elections of directors is not permitted unless the company’s certificate of incorporation specificallyprovides for it. Cumulative voting potentially facilitates the representation of minority shareholders on a board of directors since it permits the minority shareholderto cast all the votes to which the shareholder is entitled on a single director, which increases the shareholder’s voting power with respect to electing such director.There are no prohibitions to cumulative voting under the laws of the British Virgin Islands, but our memorandum of association and articles of association do notprovide for cumulative votingAntitakeover Provisions in Our Memorandum of association and articles of associationSome provisions of our memorandum of association and articles of association may discourage, delay or prevent a change in control of our company ormanagement that shareholders may consider favorable, including provisions that authorize our board of directors to issue preference shares in one or more seriesand to designate the price, rights, preferences, privileges and restrictions of such preference shares.C. MATERIAL CONTRACTS.On January 25, 2018, the Company executed an Asset Exchange Agreement (“AEA”) with C Media Limited, a corporation organized under the laws of theCayman Islands (“C Media”), whereby the Company agreed to purchase all the capital stock and equity interests of LK Technology Ltd, together with its whollyowned subsidiaries MMB Limited and Mobile Media (China) Limited and all respective subsidiaries from C Media in exchange for (i) 185,412,599 ordinary shares ofthe Company, par value $0.01 per share (“Ordinary Shares”), (ii) 1,000,000 preferred shares of Kingtone (“Preferred Shares”) and (iii) all issued and outstandingcapital stock or equity interests of the Company’s subsidiary, Topsky InfoTech Holdings Pte Ltd., and its whollyowned subsidiary Xi’an Softech Co., Ltd.,including all entities effectively controlled by Xi’an Softech Co., Ltd. through contractual arrangements and variable business entities.To consummate the contemplated transactions described above, the Company obtained shareholder consent at a special meeting held on May 20, 2018, (i)to authorize 1,000,000 Preferred Shares, (ii) to authorize additional Ordinary Shares so that total authorized Ordinary Shares is equal to 250,000,000 shares, (iii) to listsuch Ordinary Shares on NASDAQ, and (iv) to approve the transactions contemplated in the Asset Exchange Agreement. Additionally, NASDAQ needed toapprove the contemplated transactions prior to consummation thereof. C Media had the right to terminate the AEA if the closing had not occurred (other thanthrough the failure of C Media to comply fully with its obligations under the AEA) on or before July 31, 2018. The transactions contemplated by the AEA wereconsummated on August 17, 2018.53On January 25, 2018, five shareholders of the Company including its largest shareholder and its Chief Executive Officer executed a Securities PurchaseAgreement, whereby such shareholders agreed to sell a total of 617,988 Ordinary Shares and 282,694 American Depository Shares of the Company to Redstone YYLManagement Limited, a company incorporated in the British Virgin Islands, in exchange for an aggregate purchase price of $1,897,860.09.On August 25, 2018, LK Technology entered into a Stock Purchase Agreement (the “Agreement”) with the shareholders (“Shareholders”) of SuperengineHoldings Limited, a limited liability company organized under the laws of the British Virgin Islands (the “Superengine”), pursuant to which LK Technology acquiredall of the issued and outstanding capital stock of Superengine for an aggregate purchase price of US$60 million (the “Purchase Price”), which are paid by theissuance of our Ordinary Shares in an amount equal to the quotient of (x) the Purchase Price divided by (y) the average of the closing prices of the Ordinary Shareson the NASDAQ Capital Market over the 12 months period preceding July 31, 2018. We are a party to the Agreement in connection with the issuance of theOrdinary Shares and certain other limited purposes.D. EXCHANGE CONTROLS.This section sets forth a summary of the most significant regulations or requirements that affect our business activities in China or our shareholders’ rightto receive dividends and other distributions from us.Regulations on Internet Content ProvidersThe Administrative Measures on Internet Information Services, or the Internet Content Measures, which was promulgated by the State Council onSeptember 25, 2000 and amended on January 8, 2011, set out guidelines on the provision of internet information services. The Internet Content Measures specifiesthat internet information services regarding news, publications, education, medical and health care, pharmacy and medical appliances, among other things, arerequired to be examined, approved and regulated by the relevant authorities. Internet information providers are prohibited from providing services beyond thoseincluded in the scope of their licenses or filings. Furthermore, the Internet Content Measures specifies a list of prohibited content. Internet information providers areprohibited from producing, copying, publishing or distributing information that is humiliating or defamatory to others or that infringes the legal rights of others.Internet information providers that violate such prohibition may face criminal charges or administrative sanctions. Internet information providers must monitor andcontrol the information posted on their websites. If any prohibited content is found, they must remove the content immediately, keep a record of such content andreport to the relevant authorities.The Internet Content Measures classifies internet information services into commercial internet information services and noncommercial internetinformation services. Commercial internet information services refer to services that provide information or services to internet users with charge. A provider ofcommercial internet information services must obtain an ICP License.Regulations on Internet Audiovideo Program ServicesOn December 20, 2007, the MII and the State Administration of Press, Publication, Radio, Film and Television, or the SAPPRFT, jointly issued theAdministrative Provisions for the Internet AudioVideo Program Service, or the Audiovideo Program Provisions, which came into effect on January 31, 2008 andwas amended on August 28, 2015. The Audiovideo Program Provisions defines “internet audiovideo program services” as producing, editing and integrating ofaudiovideo programs, supplying audiovideo programs to the public via the internet, and providing audiovideo programs uploading and transmission services to athird party. Entities providing internet audiovideo programs services must obtain an internet audiovideo program transmission license. Applicants for such licensesshall be stateowned or statecontrolled entities unless an internet audiovideo program transmission license has been obtained prior to the effectiveness of theAudiovideo Program Provisions in accordance with the thenineffect laws and regulations. In addition, foreigninvested enterprises are not allowed to engage inthe abovementioned services. According to the Audiovideo Program Provisions and other relevant laws and regulations, audiovideo programs provided by theentities supplying Internet audiovideo program services shall not contain any illegal content or other content prohibited by the laws and regulations, such as anycontent against the basic principles in the PRC Constitution, any content that damages the sovereignty of the country or national security, and any content thatdisturbs social order or undermine social stability. An audiovideo program that has already been broadcast shall be retained in full for at least 60 days. Movies,television programs and other media content used as Internet audiovideo programs shall comply with relevant administrative regulations on programs broadcaststhrough radio, movie and television channels. Entities providing services related to Internet audiovideo programs shall immediately delete the audiovideoprograms violating laws and regulations, keep relevant records, report relevant authorities and implement other regulatory requirements.54The Categories of the Internet AudioVideo Program Services, or the Audiovideo Program Categories, promulgated by SAPPRFT on March 10, 2017,classifies internet audio/video programs into four categories: (I) Category I internet audio/video program service, which is carried out with a form of radio station ortelevision station; (II) Category II internet audio/video program service, including (a) rebroadcasting service of current political news audio/video programs; (b)hosting, interviewing, reporting and commenting service of arts, entertainment, technology, finance and economics, sports, education and other specializedaudio/video programs; (c) producing (interviewing not included) and broadcasting service of arts, entertainment, technology, finance and economics, sports,education and other specialized audio/video programs; (d) producing and broadcasting service of internet films/dramas; (e) aggregating and broadcasting service offilms, television dramas and cartoons; (f) aggregating and broadcasting service of arts, entertainment, technology, finance and economics, sports, education andother specialized audio/video programs; and (g) live audio/video broadcasting service of cultural activities of common social organizations, sport events or otherorganization activities; and (III) Category III internet audio/video program service, including (a) aggregating service of online audio/video contents, and (b) rebroadcasting service of the audio/video programs uploaded by internet users; and (IV) Category III internet audio/video program service, including (a) rebroadcasting of the radio/television program channels; and (b) rebroadcasting of internet audio/video program channels.On May 27, 2016, the SAPPRFT issued the Notice on Relevant Issues concerning Implementing the Approval Works of Upgrading Mobile Internet AudioVideo Program Service, or the Mobile AudioVideo Program Notice. The Mobile AudioVideo Program Notice provides that the mobile Internet audiovideo programservices shall be deemed Internet audiovideo program service. Entities which have obtained the approvals to provide the Internet audiovideo program servicesmay use mobile WAP websites or mobile applications to provide audiovideo program services. Entities with regulatory approvals may operate mobile applicationsto provide the audiovideo program services The types of the programs shall be within the permitted scope as provided in the licenses and such mobile applicationsshall be filed with the SAPPRFT.Regulations on Production and Operation of Radio/Television ProgramsOn July 19, 2004, the SAPPRFT promulgated the Administrative Measures on the Production and Operation of Radio and Television Programs, or the Radioand Television Program Production Measures, which came into effect on August 20, 2004 and was amended on August 28, 2015. The Radio and Television ProgramProduction Measures provides that any business that produces or operates radio or television programs must first obtain a Radio and Television ProgramProduction and Operation Permit. Entities holding such permits shall conduct their business within the permitted scope as provided in their permits. In addition,foreigninvested enterprises are not allowed to engage in the abovementioned services.Regulations on Online Advertising ServicesOn April 24, 2015, the Standing Committee of the National People’s Congress enacted the Advertising Law of the People’s Republic of China, or the NewAdvertising Law, effective on September 1, 2015. The New Advertising Law increases the potential legal liability of advertising services providers and strengthensregulations of false advertising. On July 4, 2016, the State Administration for Industry and Commerce, or the SAIC, issued the Interim Measures of theAdministration of Online Advertising, or the SAIC Interim Measures, effective on September 1, 2016. The New Advertising Law and the SAIC Interim Measuresrequire that online advertisements may not affect users’ normal internet use and internet popup ads must display a “close” sign prominently and ensure onekeyclosing of the popup windows. The SAIC Interim Measures provides that all online advertisements must be marked “Advertisement” so that viewers can easilyidentify them as such. Moreover, the SAIC Interim Measures treats paid search results as advertisements that are subject to PRC advertisement laws, and requiresthat paid search results be conspicuously identified on search result pages as advertisements. The New Advertising Law and SAIC Interim Measures require us toconduct more stringent examination and monitoring of our advertisers and the content of their advertisements.55Regulations on Online GamesIn September 2009, the GAPP (currently known as the SAPPRFT), together with the National Copyright Administration, and the National Office ofCombating Pornography and Illegal Publications jointly issued the Notice on Further Strengthening on the Administration of Preexamination and Approval ofOnline Game and the Examination and Approval of Imported Online Game, or the Circular 13. The Circular 13 states that foreign investors are not permitted to investin online game operating businesses in the PRC via wholly foreignowned entities, Sinoforeign equity joint ventures or cooperative joint ventures or to exercisecontrol over or participate in the operation of domestic online game businesses through indirect means, such as other joint venture companies or contractual ortechnical arrangements. If the our contractual arrangements were deemed under the Circular 13 to be an “indirect means” for foreign investors to exercise controlover or participate in the operation of a domestic online game business, our contractual arrangements might be challenged by the SAPPRFT. We are not aware ofany online game companies which use the same or similar contractual arrangements having been challenged by the SAPPRFT as using those contractualarrangements as an “indirect means” for foreign investors to exercise control over or participate in the operation of a domestic online game business or having beenpenalized or ordered to terminate operations since the Circular 13 became effective. However it is unclear whether and how the Circular 13 might be interpreted orimplemented in the future. See “Risk Factors—If the PRC government finds that the agreements that establish the structure for operating certain of our operations inChina do not comply with PRC regulations relating to the relevant industries, or if these regulations or the interpretation of existing regulations change in the future,we could be subject to severe penalties or be forced to relinquish our interests in those operations.”The Interim Measures for the Administration of Online Games, or the Online Game Measures, issued by the MOC, which took effect on August 1, 2010 andamended on December 15, 2017, regulates a broad range of activities related to the online games business, including the development, production and operation ofonline games, the issuance of virtual currencies used for online games, and the provision of virtual currency trading services. The Online Game Measures providesthat any entity that is engaged in online game operations must obtain an Network Cultural Business Permit, and require the content of an imported online game to beexamined and approved by the MOC prior to the game’s launch and require a domestic online game to be filed with the MOC within 30 days after its launch. TheNotice of the Ministry of Culture on the Implementation of the Interim Measures for the Administration of Online Games, which was issued by the MOC on July 29,2010 to implement the Online Game Measures, (i) requires online game operators to protect the interests of online game users and specifies that certain terms thatmust be included in service agreements between online game operators and the users of their online games, (ii) requires content review of imported online gamesand filing procedures for domestic online games, (iii) emphasizes the protection of minors playing online games, and (iv) requests online game operators to promoterealname registration by their game users.Regulations on Information Security, Censorship and PrivacyThe Standing Committee of the National People’s Congress, China’s national legislative body, enacted the Decisions on the Maintenance of InternetSecurity on December 28, 2000 that may subject persons to criminal liabilities in China for any attempt to use the internet to: (i) gain improper entry to a computer orsystem of strategic importance; (ii) disseminate politically disruptive information; (iii) leak state secrets; (iv) spread false commercial information or (v) infringe uponintellectual property rights. In 1997, the Ministry of Public Security issued the Administration Measures on the Security Protection of Computer InformationNetwork with International Connections which prohibits using the internet to leak state secrets or to spread socially destabilizing materials. If an ICP license holderviolates these measures, the PRC government may revoke its ICP license and shut down its websites. Pursuant to the Ninth Amendment to the Criminal Law issuedby the Standing Committee of the National People’s Congress on August 29, 2015, effective on November 1, 2015, any ICP provider that fails to fulfill the obligationsrelated to internet information security as required by applicable laws and refuses to take corrective measures, will be subject to criminal liability for (i) any largescale dissemination of illegal information; (ii) any severe effect due to the leakage of users’ personal information; (iii) any serious loss of evidence of criminalactivities; or (iv) other severe situations, and any individual or entity that (i) sells or provides personal information to others unlawfully or (ii) steals or illegallyobtains any personal information will be subject to criminal liability in severe situations.56The Cybersecurity Law of the PRC, or the Cybersecurity Law, which was promulgated on November 7, 2016 by the Standing Committee of the NationalPeople’s Congress and came into effect on June 1, 2017, provides that network operators shall meet their cyber security obligations and shall take technicalmeasures and other necessary measures to protect the safety and stability of their networks. Under the Cybersecurity Law, network operators are subject to varioussecurity protectionrelated obligations, including: (i) network operators shall comply with certain obligations regarding maintenance of the security of internetsystems; (ii) network operators shall verify users’ identities before signing agreements or providing certain services such as information publishing or realtimecommunication services; (iii) when collecting or using personal information, network operators shall clearly indicate the purposes, methods and scope of theinformation collection, the use of information collection, and obtain the consent of those from whom the information is collected; (iv) network operators shall strictlypreserve the privacy of user information they collect, and establish and maintain systems to protect user privacy; (v) network operators shall strengthenmanagement of information published by users, and when they discover information prohibited by laws and regulations from publication or dissemination, theyshall immediately stop dissemination of that information, including taking measures such as deleting the information, preventing the information from spreading,saving relevant records, and reporting to the relevant governmental agencies.Regulations on Intellectual Property RightsRegulations on CopyrightThe Copyright Law of the PRC, or the Copyright Law, which took effect on June 1, 1991 and was amended in 2001 and in 2010, provides that Chinesecitizens, legal persons, or other organizations shall, whether published or not, own copyright in their copyrightable works, which include, among others, works ofliterature, art, natural science, social science, engineering technology and computer software. Copyright owners enjoy certain legal rights, including right ofpublication, right of authorship and right of reproduction. The Copyright Law as revised in 2010 extends copyright protection to Internet activities, productsdisseminated over the Internet and software products. In addition, Copyright Law provides for a voluntary registration system administered by the China CopyrightProtection Center, or the CPCC. According to the Copyright Law, an infringer of the copyrights shall be subject to various civil liabilities, which include ceasinginfringement activities, apologizing to the copyright owners and compensating the loss of copyright owner. Infringers of copyright may also subject to fines and/oradministrative or criminal liabilities in severe situations.The Computer Software Copyright Registration Measures, or the Software Copyright Measures, promulgated by the State Council on December 20, 2001and amended on January 30, 2013, regulates registrations of software copyright, exclusive licensing contracts for software copyright and assignment agreements.The National Copyright Administration, or the NCA administers software copyright registration and the CPCC, is designated as the software registration authority.The CPCC shall grant registration certificates to the Computer Software Copyrights applicants which meet the requirements of both the Software CopyrightMeasures and the Computer Software Protection Regulations (Revised in 2013).The Provisions of the Supreme People’s Court on Certain Issues Related to the Application of Law in the Trial of Civil Cases Involving Disputes onInfringement of the Information Network Dissemination Rights specifies that disseminating works, performances or audiovideo products by the internet users orthe internet service providers via the internet without the permission of the copyright owners shall be deemed to have infringed the right of dissemination of thecopyright owner.57The Measures for Administrative Protection of Copyright Related to Internet, which was jointly promulgated by the NCA and the MIIT on April 29, 2005and became effective on May 30, 2005, provides that upon receipt of an infringement notice from a legitimate copyright holder, an ICP operator must take remedialactions immediately by removing or disabling access to the infringing content. If an ICP operator knowingly transmits infringing content or fails to take remedialactions after receipt of a notice of infringement that harms public interest, the ICP operator could be subject to administrative penalties, including an order to ceaseinfringing activities, confiscation by the authorities of all income derived from the infringement activities, or payment of fines.On May 18, 2006, the State Council promulgated the Regulations on the Protection of the Right to Network Dissemination of Information (as amended in2013). Under these regulations, an owner of the network dissemination rights with respect to written works or audio or video recordings who believes thatinformation storage, search or link services provided by an Internet service provider infringe his or her rights may require that the Internet service provider delete, ordisconnect the links to, such works or recordings.Patent LawsAccording to the Patent Law of the PRC (Revised in 2008), the State Intellectual Property Office is responsible for administering patent law in the PRC. Thepatent administration departments of provincial, autonomous region or municipal governments are responsible for administering patent law within their respectivejurisdictions. The Chinese patent system adopts a firsttofile principle, which means that when more than one person file different patent applications for the sameinvention, only the person who files the application first is entitled to obtain a patent of the invention. To be patentable, an invention or a utility model must meetthree criteria: novelty, inventiveness and practicability. A patent is valid for twenty years in the case of an invention and ten years in the case of utility models anddesigns.Trademark LawsTrademarks are protected by the Trademark Law of the PRC (Revised in 2013) which was adopted in 1982 and subsequently amended in 1993, 2001 and 2013respectively as well as by the Implementation Regulations of the PRC Trademark Law adopted by the State Council in 2002 and as most recently amended on April29, 2014. The Trademark Office under the SAIC handles trademark registrations. The Trademark Office grants a tenyear term to registered trademarks and the termmay be renewed for another tenyear period upon request by the trademark owner. A trademark registrant may license its registered trademarks to another party byentering into trademark license agreements, which must be filed with the Trademark Office for its record. As with patents, the Trademark Law has adopted a firsttofile principle with respect to trademark registration. If a trademark applied for is identical or similar to another trademark which has already been registered or subjectto a preliminary examination and approval for use on the same or similar kinds of products or services, such trademark application may be rejected. Any personapplying for the registration of a trademark may not injure existing trademark rights first obtained by others, nor may any person register in advance a trademark thathas already been used by another party and has already gained a “sufficient degree of reputation” through such party’s use.Regulations on Domain NamesThe MIIT promulgated the Measures on Administration of Internet Domain Names, or the Domain Name Measures, on August 24, 2017, which took effecton November 1, 2017 and replaced the Administrative Measures on China Internet Domain Name promulgated by MII on November 5, 2004. According to theDomain Name Measures, the MIIT is in charge of the administration of PRC internet domain names. The domain name registration follows a firsttofile principle.Applicants for registration of domain names shall provide the true, accurate and complete information of their identities to domain name registration serviceinstitutions. The applicants will become the holder of such domain names upon the completion of the registration procedure.Relevant Regulations of the Hightech EnterpriseThe Ministry of Information Industry, the Ministry of Science and Technology and the State Tax Bureau collectively promulgated and issued the“Certifying Standard and Managing Measures for Hightech Enterprises” and “the Hightech Areas of Main National Support” on April 14, 2008 to certify the Hightech enterprise and encourage and support the development of the Chinese Hightech enterprises. Under the Hightech Enterprises Measures, the enterprise canenjoy the favorable tax policy when it is certified as a Hightech enterprise by the Ministry of Information Industry, the Ministry of Science and Technology and theState Tax Bureau or with its provincial branch according to the stipulated standard. The software and computer and network technology are recognized as the mainnational supported Hightech field. Kingtone Information is a Hightech enterprise and enjoys a favorable income tax rate of 15%.58Laws and Regulations of Intellectual Property RightsChina has adopted legislation governing intellectual property rights, including patents, copyrights and trademarks. China is a signatory to the maininternational conventions on intellectual property rights and became a member of the Agreement on Trade Related Aspects of Intellectual Property Rights upon itsaccession to the WTO in December 2001.PatentsThe “Patent Law of the People’s Republic of China” promulgated by the Standing Committee of the National People's Congress, adopted in 1985 andrevised in 1992, 2001 and 2008, protects registered patents. The State Intellectual Property Office of PRC handles granting patent rights, providing for a twentyyearpatent term for inventions and a tenyear patent term for utility models and designs. As we disclosed in Item 4, of this transition report on Form 20F, throughKingtone Information, we have been granted one invention patent “wireless video transmission system based on BREW platform” by the State Intellectual PropertyOffice (“SIPO”) of PRC on September 23, 2009 and therefore such invention is entitled to all the protections provided under the Patent Law for twenty years.Computer Software Copyright and AdministrationOn December 20, 2001, the State Council of PRC issued the “Regulation for Computer Software Protection of the People’s Republic of China” (the“Regulation for Computer Software Protection”) which became effective on January 1, 2002 to protect the interests of copyright owners, to promote the research andapplication and to encourage the development of the Chinese software industry. Under the Regulation for Computer Software Protection, natural persons, legalpersons or any other organizations shall have a copyright on the software developed by such persons no matter whether such software has been published. Theprotection period of software copyrights owned by the legal person or other organization is fifty years and expires on December 31 of the fiftieth year from the initialpublication date of such computer software. Currently, Kingtone Information has twelve registration certificates for software copyrights.TrademarksThe “Trademark Law of the People’s Republic of China” promulgated by the State Council of PRC, adopted in 1982 and revised in 1993 and 2001, protectsregistered trademarks. The Trademark Office under the Chinese State Administration for Industry and Commerce handles trademark registrations and grants a termof ten years to registered trademarks which are renewable for another ten years after the application to the Trademark Office by the owners of the trademarks.Trademark license agreements must be filed with the Trademark Office for record. China has a “firsttoregister” system that requires no evidence of prior use orownership. Kingtone Information has its registered trademarks as described in Item 4 of this transition report on Form 20F. Accordingly, such trademarks areentitled to the protection under the Trademark Law.Foreign Currency ExchangeOn August 29, 2008, the SAFE issued the Notice of the General Affairs Department of the State Administration of Foreign Exchange on the RelevantOperating Issues concerning the Improvement of the Administration of Payment and Settlement of Foreign Currency Capital of Foreignfunded Enterprises, orCircular 142. Pursuant to Circular 142, RMB converted from the foreign currencydenominated capital of a foreigninvested company may only be used for purposeswithin the business scope approved by the applicable governmental authority and may not be used for equity investments within the PRC unless specificallyprovided for otherwise. The use of such Renminbi capital may not be changed without SAFE’s approval and may not in any case be used to repay Renminbi loans ifthe proceeds of such loans have not been used.59See “Risk Factors — Risks Related to Doing Business in China — PRC regulation of loans and direct investment by offshore holding companies to PRCentities may delay or prevent us from using the proceeds of our initial public offering to make loans or additional capital contributions to our PRC operatingsubsidiaries, which could materially and adversely affect our liquidity and our ability to fund and expand our business”.Dividend DistributionWe are a British Virgin Islands holding company and substantially all of our operations are conducted through LK Technology. We rely on dividends andother distributions from our LK Technology and its subsidiaries to provide us with our cash flow and allow us to pay dividends on the shares underlying our ADSsand meet our other obligations. The principal regulations governing distribution of dividends paid by wholly foreignowned enterprises include:1.Wholly ForeignOwned Enterprise Law (1986), as amended; and2.Implementation Rules on Wholly ForeignOwned Enterprise Law (1990), as amended.Under these regulations, wholly foreignowned enterprises in China may pay dividends only out of their accumulated profits, if any, determined inaccordance with PRC accounting standards and regulations. In addition, wholly foreignowned enterprises in China are required to set aside at least 10% of theiraftertax profit based on PRC accounting standards each year to its general reserves until the accumulative amount of such reserves reach 50% of its registeredcapital. These reserves are not distributable as cash dividends. The board of directors of a FIE has the discretion to allocate a portion of its aftertax profits to staffwelfare and bonus funds, which may not be distributed to equity owners except in the event of liquidation.Regulation of Foreign Exchange in Certain Onshore and Offshore TransactionsIn October 2005, the SAFE issued the Notice on Issues Relating to the Administration of Foreign Exchange in Fundraising and Return InvestmentActivities of Domestic Residents Conducted via Offshore Special Purpose Companies, or SAFE Notice 75, which became effective as of November 1, 2005, and wasfurther supplemented by two implementation notices issued by the SAFE on November 24, 2005 and May 29, 2007, respectively. Under Circular 75, prior registrationwith the local SAFE branch is required for PRC residents to establish or to control an offshore company for the purposes of financing that offshore company withassets or equity interests in an onshore enterprise located in the PRC. An amendment to the registration or filing with the local SAFE branch by such PRC resident isalso required for the injection of equity interests or assets of an onshore enterprise in the offshore company or overseas funds raised by such offshore company, orany other material change with respect to the offshore company in connection with any increase or decrease of capital, transfer of shares, merger, division, equityinvestment, debt investment, or creation of any security interest over any assets located in the PRC.Under SAFE Notice 75, PRC residents are further required to repatriate into the PRC all of their dividends, profits or capital gains obtained from theirshareholdings in the offshore entity within 180 days of their receipt of such dividends, profits or capital gains. The registration and filing procedures under SAFENotice 75 are prerequisites for other approval and registration procedures necessary for capital inflow from the offshore entity, such as inbound investments orshareholders loans, or capital outflow to the offshore entity, such as the payment of profits or dividends, liquidating distributions, equity sale proceeds, or thereturn of funds upon a capital reduction. Therefore, failure to comply with such registration may subject us to certain restrictions on, including but not limited to, theincrease of the registered capital of our PRC subsidiary, making loans to our PRC subsidiary, and making distributions to us from our onshore companies.Regulations of Overseas Investments and ListingsOn August 8, 2006, six PRC regulatory agencies, including the MOFCOM, the State Assets Supervision and Administration Commission, the StateAdministration for Taxation, the State Administration for Industry and Commerce, the CSRC and the SAFE, jointly adopted the New M&A Rule, which becameeffective on September 8, 2006. This regulation, among other things, includes provisions that purport to require that an offshore SPV formed for purposes ofoverseas listing of equity interests in PRC companies and controlled directly or indirectly by PRC companies or individuals obtain the approval of the CSRC prior tothe listing and trading of such SPV’s securities on an overseas stock exchange.60On September 21, 2006, the CSRC published on its official website procedures regarding its approval of overseas listings by SPVs. The CSRC approvalprocedures require the filing of a number of documents with the CSRC and it would take several months to complete the approval process.The application of the New M&A Rule with respect to overseas listings of SPVs remains unclear with no consensus currently existing among the leadingPRC law firms regarding the scope of the applicability of the CSRC approval requirement.We believe that, based on our understanding of the current PRC laws, regulations and rules and the procedures announced on September 21, 2006, there isno requirement in this regulation that would require an application to be submitted to the MOFCOM or the CSRC for the approval of the listing and trading of ourADSs on the NASDAQ Capital Market.See “Risk Factors — Risks Related to Doing Business in China — If we were required to obtain the prior approval of the China Securities RegulatoryCommission, or CSRC, of the listing and trading of our ADSs on the NASDAQ Capital Market, we may face regulatory actions or other sanctions from the CSRC orother PRC regulatory agencies.”E. TAXATIONThe following discussion sets forth the material British Virgin Islands, PRC and U.S. federal income tax consequences of an investment in our ADSs andthe ordinary shares represented by our ADSs, sometimes referred to collectively as the “securities”. It is based upon laws and relevant interpretations thereof ineffect as of the date of this report, all of which are subject to change. This discussion does not deal with all possible tax consequences relating to an investment inthe securities, such as the tax consequences under state, local and other tax laws. As used in this discussion, “we,” “our” and “us” refers only to LuokungTechnology Ltd.British Virgin Islands TaxationUnder the law of the British Virgin Islands as currently in effect, a holder of the securities who is not a resident of the British Virgin Islands is not liable forBritish Virgin Islands tax on dividends paid with respect to the securities and all holders of the securities are not liable to the British Virgin Islands for tax on gainsrealized during that year on the sale or disposal of such ordinary shares. The British Virgin Islands does not impose a withholding tax on dividends paid by acompany incorporated or reregistered under the BVI Act.There are no capital gains, gift or inheritance taxes levied by the British Virgin Islands on companies incorporated under the BVI Act. In addition, shares ofcompanies incorporated under the BVI Act are not subject to transfer taxes, stamp duties or similar charges.There is no income tax treaty or convention currently in effect between the United States and the British Virgin Islands or between China and the BritishVirgin Islands.61People’s Republic of China TaxationIn 2007, the PRC National People’s Congress enacted the new Enterprise Income Tax Law (the “EIT Law”), which became effective on January 1, 2008. Thenew EIT Law imposes a single uniform income tax rate of 25% on all Chinese enterprises, including foreigninvested enterprises, and levies a withholding tax rate of10% on dividends payable by Chinese subsidiaries to their foreign shareholders unless any such foreign shareholders’ jurisdiction of incorporation has a tax treatywith China that provides for a different withholding agreement. Under the new EIT Law, enterprises established outside China but deemed to have a “de factomanagement body” within the country may be considered “resident enterprises” for Chinese tax purposes and, therefore, may be subject to an enterprise income taxrate of 25% on their worldwide income. Pursuant to the implementation rules of the new EIT Law, a “de facto management body” is defined as a body that hasmaterial and overall management control over the business, personnel, accounts and properties of the enterprise. Although substantially all members of ourmanagement are located in China, it is unclear whether Chinese tax authorities would require (or permit) us to be treated as PRC resident enterprises. If we aredeemed a Chinese tax resident enterprise, we may be subject to an enterprise income tax rate of 25% on our worldwide income, excluding dividends received directlyfrom another Chinese tax resident enterprise, as well as PRC enterprise income tax reporting obligations. If we are not deemed to be a Chinese tax resident enterprise,we may be subject to certain PRC withholding taxes. See “Risk Factors — Risks Related to Doing Business in China — Our holding company structure may limit thepayment of dividends.” As a result of such changes, our historical tax rates may not be indicative of our tax rates for future periods and the value of our ADSs orordinary shares may be adversely affected. If we are deemed a PRC resident enterprise and investors’ gain from the sales of the securities and dividends payable byus are deemed sourced from China, such gains and dividends payable by us may be subject to PRC tax. See “Risk Factors — Risks Related to Doing Business inChina — If we were deemed a “resident enterprise” by PRC tax authorities, we could be subject to tax on our global income at the rate of 25% under the New EITLaw and our nonPRC shareholders could be subject to certain PRC taxes.United States Federal Income TaxationGeneralThe following is a discussion of the material U.S. federal income tax consequences to an investor of purchasing, owning and disposing of our securities.This discussion does not address any aspects of U.S. federal gift or estate tax or the state, local or nonU.S. tax consequences of an investment in the securities.YOU SHOULD CONSULT YOUR OWN TAX ADVISORS CONCERNING THE U.S. FEDERAL, STATE, LOCAL AND NONU.S. TAX CONSEQUENCES OFPURCHASING, OWNING AND DISPOSING OF THE SECURITIES IN YOUR PARTICULAR SITUATION.This discussion applies only to those investors that purchase the securities in this offering and that hold the securities as capital assets within the meaningof section 1221 of the Internal Revenue Code of 1986, as amended (the “Code”). This section does not apply to holders that may be subject to special tax rules,including but not limited to:1.dealers in securities or currencies;2.traders in securities that elect to use a marktomarket method of accounting;3.banks, insurance companies or certain financial institutions;4.taxexempt organizations;5.governments or agencies or instrumentalities thereof;6.partnerships or other entities treated as partnerships or other passthrough entities for U.S. federal income tax purposes or persons holding thesecurities through such entities;7.regulated investment companies or real estate investment trusts;8.holders subject to the alternative minimum tax;9.holders that actually or constructively own 10% or more of the total combined voting power of all classes of our shares entitled to vote;10.holders that acquired the securities pursuant to the exercise of employee stock options, in connection with employee stock incentive plans orotherwise as compensation;11.holders that hold the securities as part of a straddle, hedging or conversion transaction; or12.holders whose functional currency is not the U.S. dollar.62This section is based on the Code, its legislative history, existing and proposed U.S. Treasury regulations, published rulings and other administrativeguidance of the U.S. Internal Revenue Service (the “IRS”) and court decisions, all as in effect on the date hereof. These laws are subject to change or differentinterpretation by the IRS or a court, possibly on a retroactive basis.We have not sought, and will not seek, a ruling from the IRS as to any U.S. federal income tax consequence described herein. The IRS may disagree withthe discussion herein, and its determination may be upheld by a court. Moreover, there can be no assurance that future legislation, regulation, administrative rulingsor court decisions will not adversely affect the accuracy of the statements in this discussion.The discussion below of the U.S. federal income tax consequences to “U.S. Holders” will apply to a beneficial owner of the securities that is for U.S. federalincome tax purposes:1.a citizen or resident of the United States;2.a corporation (or other entity treated as a corporation) that is created or organized (or treated as created or3.organized) under the laws of the United States, any state thereof or the District of Columbia;4.an estate whose income is subject to U.S. federal income tax regardless of its source; or5.a trust if (a) a U.S. court can exercise primary supervision over the trust’s administration and one or more U.S.6.persons are authorized to control all substantial decisions of the trust, or (b) if the trust has a valid election in effect under applicable U.S.Treasury regulations to be treated as a U.S. person.If a beneficial owner of the securities is not described as a U.S. Holder and is not an entity treated as a partnership or other passthrough entity for U.S.federal income tax purposes, such owner will be considered a “NonU.S. Holder.” The material U.S. federal income tax consequences applicable specifically to NonU.S. Holders are described below under the heading “Tax Consequences to NonU.S. Holders.”If a partnership (including for this purpose any entity treated as a partnership for U.S. tax purposes) is a beneficial owner of the securities, the U.S. taxtreatment of a partner in the partnership generally will depend on the status of the partner and the activities of the partnership. A holder of the securities that is apartnership or partners in such a partnership should consult their own tax advisors about the U.S. federal income tax consequences of holding and disposing of thesecurities.This discussion assumes that any distributions made (or deemed made) on the securities and any consideration received by a holder in consideration forthe sale or other disposition of the securities will be in U.S. dollars. This discussion also assumes that the representations contained in the Deposit Agreement aretrue and that the obligations in the Deposit Agreement and any related agreement will be complied with in accordance with their terms. Finally, this discussionassumes that each ADS will only represent ordinary shares in us, and will not represent any other type of security, such as a bond, cash or other property.63For U.S. federal income tax purposes, a holder of an ADS will be treated as the beneficial owner of the shares represented by such ADS and an exchange ofan ADS for ordinary shares will not be subject to U.S. federal income tax. The U.S. Treasury has expressed concerns that parties to whom ADSs are prereleased, orintermediaries in the chain of ownership between holders of ADSs and the issuer of the securities underlying the ADSs may be taking actions that are inconsistentwith the claiming of foreign tax credits by U.S. Holders of ADSs. Such actions would also be inconsistent with the claiming of the reduced rate of tax applicable todividends received by certain noncorporate U.S. Holders, including individual U.S. Holders, as described below under “Tax Consequences to U.S.Holders — Taxation of Distributions.” Accordingly, the availability of foreign tax credits or the reduced tax rate for dividends received by certain noncorporate U.S.Holders, including individual U.S. Holders, could be affected by actions taken by parties to whom the ADSs are released, or by future actions by the U.S. Treasury.Tax Consequences to U.S. HoldersTaxation of DistributionsSubject to the passive foreign investment company, or PFIC, rules discussed below, the gross amount of any cash distributions we make with respect to aU.S. Holder in respect of such U.S. Holder’s ADSs or shares will generally be treated as dividend income if the distributions are made from our current oraccumulated earnings and profits, calculated according to U.S. federal income tax principles. Cash dividends will generally be subject to U.S. federal income tax asordinary income on the day the U.S. Holder actually or constructively receives such income. With respect to noncorporate U.S. Holders for taxable years beginningbefore January 1, 2011, dividends may be taxed at the lower applicable longterm capital gains rate provided that (a) our ADSs or shares are readily tradable on anestablished securities market in the United States, or, in the event we are deemed to be a Chinese “resident enterprise” under the EIT Law (as described above under“People’s Republic of China Taxation”), we are eligible for the benefits of the income tax treaty between the United States and the PRC (the “U.S.PRC Tax Treaty”),(b) we are not a PFIC, as discussed below, for either the taxable year in which the dividend was paid or the preceding taxable year, and (c) certain holding periodrequirements are met. Under published IRS authority, ADSs are considered for purposes of clause (a) above to be readily tradable on an established securitiesmarket in the United States only if they are listed on certain exchanges, which presently include the NASDAQ Capital Market. U.S. Holders should consult their owntax advisors regarding the availability of the lower rate for any dividends paid with respect to our ADSs or shares.Dividends will not be eligible for the dividendsreceived deduction allowed to U.S. corporations in respect of dividends received from other U.S.corporations. Generally, if we distribute noncash property as a dividend (other than pro rata distributions of our shares) out of our current or accumulated earningsand profits (as determined for U.S. federal income tax purposes), a U.S. Holder generally will include in income an amount equal to the fair market value of theproperty, on the date that it is distributed.Distributions in excess of current and accumulated earnings and profits, as determined for U.S. federal income tax purposes, will be treated as a nontaxablereturn of capital to the extent of the U.S. Holder’s basis in its shares or ADSs and thereafter as capital gain. However, we do not plan on calculating our earnings andprofits in accordance with U.S. federal income tax principles. U.S. holders therefore should generally assume that any distributions paid by us will be treated asdividends for U.S. federal income tax purposes.If PRC taxes apply to dividends paid by us to a U.S. Holder (see “People’s Republic of China Taxation,” above), such taxes may be treated as foreign taxeseligible for credit against such holder’s U.S. federal income tax liability (subject to certain limitations), and a U.S. Holder may be entitled to certain benefits under theU.S.PRC Tax Treaty. The rules relating to the U.S. foreign tax credit are complex. U.S. Holders should consult their own tax advisors regarding the creditability ofany such PRC tax and their eligibility for the benefits of the U.S.PRC Tax Treaty.64Taxation of Dispositions of SharesSubject to the PFIC rules discussed below, a U.S. holder that sells or otherwise disposes of its shares will recognize capital gain or loss for U.S. federalincome tax purposes equal to the difference between the amount realized and such U.S. Holder’s tax basis in its shares. Prior to January 1, 2011, capital gains of anoncorporate U.S. holder are generally taxed at a maximum rate of 15% where the property is held for more than one year (and 20% thereafter). The ability to deductcapital losses is subject to limitations.If PRC taxes apply to any gain from the disposition of our shares by a U.S. Holder, such taxes may be treated as foreign taxes eligible for credit against suchholder’s U.S. federal income tax liability (subject to certain limitations), and a U.S. Holder may be entitled to certain benefits under the U.S.PRC Tax Treaty. U.S.Holders should consult their own tax advisors regarding the creditability of any such PRC tax and their eligibility for the benefits of the U.S.PRC Tax Treaty.Passive Foreign Investment CompanyWe do not expect to be a PFIC for U.S. federal income tax purposes for our current tax year or in the foreseeable future. The determination of whether or notwe are a PFIC in respect of any of our taxable years is a factual determination that cannot be made until the close of the applicable tax year and that is based on thetypes of income we earn and the value and composition of our assets (including goodwill), all of which are subject to change. Therefore, we can make no assurancesthat we will not be a PFIC in respect of our current taxable year or in the future.In general, we will be a PFIC in any taxable year if either:1.at least 75% of our gross income for the taxable year is passive income; or2.at least 50% of the value, determined on the basis of a quarterly average, of our assets is attributable to assets that produce or are held for theproduction of passive income.Passive income includes dividends, interest, royalties, rents (other than certain rents and royalties derived in the active conduct of a trade or business), theexcess of gains over losses from certain types of transactions in commodities, annuities and gains from assets that produce passive income. We will be treated asowning our proportionate share of the assets and earning our proportionate share of the income of any corporation in which we own, directly or indirectly, at least25% (by value) of the stock.If we are treated as a PFIC in any year during which a U.S. Holder owns the securities, and such U.S. Holder did not make a marktomarket election, asdescribed below, the U.S. Holder will be subject to special rules with respect to:1.any gain recognized by the U.S. Holder on the sale or other disposition of its shares; and any excess distribution that we make to the U.S. Holder(generally, the excess of the amount of any distributions to such U.S. Holder during a single taxable year of such U.S. Holder over 125% of theaverage annual distributions received by such U.S. Holder in respect of the shares during the three preceding taxable years of such U.S. Holder or,if shorter, such U.S. Holder holding period for the shares).Under these rules:2.the gain or excess distribution will be allocated ratably over the U.S. Holder’s holding period for the shares;3.the amount allocated to the U.S. Holder’s taxable year in which it realized the gain or excess distribution or to the period in the U.S. Holder’sholding period before the first day of our first taxable year in which we are a PFIC will be taxed as ordinary income;4.the amount allocated to other taxable years (or portions thereof) of the U.S. Holder and included in its holding period will be taxed at the highesttax rate in effect for that year; and5.the interest charge generally applicable to underpayments of tax will be imposed in respect of the tax attributable to each such other taxable yearof the U.S. Holder. 6.Special rules apply for calculating the amount of the foreign tax credit with respect to excess distributions by a PFIC.65Alternatively, if a U.S. Holder, at the close of its taxable year, owns ordinary shares in a PFIC that are treated as marketable stock, the U.S. Holder may makea marktomarket election with respect to such shares for such taxable year. Our shares will be “marketable” to the extent that they remain regularly traded on anational securities exchange, such as the NASDAQ Capital Market. If a U.S. Holder makes this election in a timely fashion, it will not be subject to the PFIC rulesdescribed above. Instead, in general, the U.S. Holder will include as ordinary income each year the excess, if any, of the fair market value of its shares at the end ofthe taxable year over its adjusted basis in its shares. Any ordinary income resulting from this election would generally be taxed at ordinary income tax rates andwould not be eligible for the reduced rate of tax applicable to qualified dividend income. The U.S. Holder will also be allowed to take an ordinary loss in respect ofthe excess, if any, of the adjusted basis of its shares over the fair market value at the end of the taxable year (but only to the extent of the net amount of previouslyincluded income as a result of the marktomarket election). The U.S. Holder’s basis in the shares will be adjusted to reflect any such income or loss amounts. U.S.Holders should consult their own tax advisor regarding potential advantages and disadvantages of making a marktomarket election with respect to their shares.Alternatively, a U.S. Holder of stock in a PFIC may avoid the PFIC tax consequences described above in respect to our or shares by making a timely“qualified electing fund” election to include in income its pro rata share of our net capital gains (as longterm capital gain) and other earnings and profits (asordinary income), on a current basis, in each case whether or not distributed, in the taxable year of the U.S. Holder in which or with which our taxable year ends.However, the qualified electing fund election is available only if the PFIC provides such U.S. Holder with certain information regarding its earnings and profits asrequired under applicable U.S. Treasury regulations. We do not intend to furnish the information that a U.S. Holder would need in order to make a qualified electingfund election. Therefore, U.S. Holders will not be able to make or maintain such election with respect to their or shares.If a U.S. Holder owns our shares or during any year that we are a PFIC, such holder must file U.S. Internal Revenue Service Form 8621 regarding suchholder’s shares or and the gain realized on the disposition of the shares. The reduced tax rate for dividend income, discussed in “Taxation of Distributions,” is notapplicable to dividends paid by a PFIC. U.S. Holders should consult with their own tax advisors regarding reporting requirements with respect to their shares.Tax Consequences to NonU.S. HoldersDividends paid to a NonU.S. Holder in respect of our or shares generally will not be subject to U.S. federal income tax, unless the dividends are effectivelyconnected with the NonU.S. Holder’s conduct of a trade or business within the United States (and, if required by an applicable income tax treaty, are attributable toa permanent establishment or fixed base that such holder maintains in the United States).In addition, a NonU.S. Holder generally will not be subject to U.S. federal income tax on any gain attributable to a sale or other disposition of our or sharesunless such gain is effectively connected with its conduct of a trade or business in the United States (and, if required by an applicable income tax treaty, isattributable to a permanent establishment or fixed base that such holder maintains in the United States) or the NonU.S. Holder is an individual who is present in theUnited States for 183 days or more in the taxable year of sale or other disposition and certain other conditions are met (in which case, such gain from United Statessources generally is subject to tax at a 30% rate or a lower applicable tax treaty rate).Dividends and gains that are effectively connected with the NonU.S. Holder’s conduct of a trade or business in the United States (and, if required by anapplicable income tax treaty, are attributable to a permanent establishment or fixed base in the United States) generally will be subject to tax in the same manner as fora U.S. Holder and, in the case of a NonU.S. Holder that is a corporation for U.S. federal income tax purposes, may also be subject to an additional branch profits taxat a 30% rate or a lower applicable tax treaty rate.66Information Reporting and Backup Withholding In general, information reporting for U.S. federal income tax purposes generally should apply to distributions made on the securities within the UnitedStates to a noncorporate U.S. Holder and to the proceeds from sales and other dispositions of the securities by a noncorporate U.S. Holder to or through a U.S.office of a broker. Payments made (and sales and other dispositions effected at an office) outside the United States generally should be subject to informationreporting in limited circumstances.Dividend payments made to U.S. Holders and proceeds paid from the sale or other disposition the securities may be subject to information reporting to theIRS and possible U.S. federal backup withholding at a current rate of 28%. Certain exempt recipients, such as corporations, are not subject to these informationreporting requirements. Backup withholding will not apply to a U.S. Holder who furnishes a correct taxpayer identification number and makes any other requiredcertification, or who is otherwise exempt from backup withholding. U.S. Holders who are required to establish their exempt status must provide a duly executed IRSForm W9.A NonU.S. Holder generally may eliminate the requirement for information reporting and backup withholding by providing certification of its foreignstatus, under penalties of perjury, on a duly executed applicable IRS Form W8 or by otherwise establishing an exemption.Backup withholding is not an additional tax. Rather, the amount of any backup withholding will be allowed as a credit against a U.S. Holder’s or a nonU.S.Holder’s U.S. federal income tax liability and may entitle such holder to a refund, provided that certain required information is timely furnished to the IRS.PROSPECTIVE PURCHASERS OF OUR SECURITIES SHOULD CONSULT WITH THEIR OWN TAX ADVISORS REGARDING THE APPLICATION OFTHE U.S. FEDERAL INCOME TAX LAWS TO THEIR PARTICULAR SITUATIONS AS WELL AS ANY ADDITIONAL TAX CONSEQUENCES RESULTING FROMPURCHASING, HOLDING OR DISPOSING OF OUR SECURITIES, INCLUDING THE APPLICABILITY AND EFFECT OF THE TAX LAWS OF ANY STATE, LOCALOR NONU.S. JURISDICTION, INCLUDING ESTATE, GIFT, AND INHERITANCE LAWS AND APPLICABLE TAX TREATIES.F. DIVIDENDS AND PAYING AGENTS.Not applicable.G. STATEMENT BY EXPERTS.None.H. DOCUMENTS ON DISPLAY.We previously filed a registration statement on Form F1 (File No. 333166056) with the SEC relating to our initial public offering in May 2010. This transition reportdoes not contain all of the information in the registration statement and the exhibits and financial statements included with the registration statement. References inthis transition report to any of our contracts, agreements or other documents are not necessarily complete, and you should refer to the exhibits attached to theregistration statement for copies of the actual contracts, agreements or documents. In addition, we will file transition reports on Form 20F and submit otherinformation under cover of Form 6K. As a foreign private issuer, we are exempt from the proxy requirements of Section 14 of the Exchange Act and our officers,directors and principal shareholders will be exempt from the insider shortswing disclosure and profit recovery rules of Section 16 of the Exchange Act. You may readand copy the registration statement, the related exhibits and other materials we file with the SEC at the SEC's public reference room in Washington, D.C. at 100 FStreet, Room 1580, N.E., Washington, D.C.20549. You can also request copies of those documents, upon payment of a duplicating fee, by writing to the SEC. Pleasecall the SEC at 1800SEC0330 for further information on the operation of the public reference rooms. The SEC also maintains an Internet site that contains reports,proxy and information statements and other information regarding issuers that file with the SEC. The website address is http://www.sec.gov. You may also request acopy of these filings, at no cost, by writing us at LAB 32, SOHO 3Q, No 9, Guanghua Road, Chaoyang District, Beijing, People’s Republic of China, 100020 ortelephoning us at (86) 1085866721.67I. SUBSIDIARY INFORMATIONFor a listing of our subsidiaries, see “Item 4. Information on the Company – C. Organizational Structure.”ITEM 11. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.Interest Rate RiskAs of December 31, 2017, we had no shortterm or longterm borrowings. If we borrow money in future periods, we may be exposed to interest rate risk. Ourexposure to market risk for changes in interest rates relates primarily to the interest income generated by our cash deposits with our banks and heldtomaturityinvestments. We have not used any derivative financial instruments in our investment portfolio. Interest earnings instruments carry a degree of interest rate risk. Wehave not been exposed, nor do we anticipate being exposed to material risks due to changes in interest rates. However, our future interest income may fall short ofexpectations due to changes in interest rates. Foreign Exchange RiskTranslation adjustments amounted to $90,671 and $387,375 gain as of the fiscal year ended December 31, 2017 and 2016, respectively. The Companytranslated balance sheet amounts with the exception of equity at December 31, 2017 at RMB 6.5342 to $1.00 as compared to RMB 6.9370 to $1.00 at December 31,2016. The Company stated equity accounts at their historical rate. The average translation rates applied to income statement accounts for the fiscal year endedDecember 31, 2017 and 2016 were RMB6.7356 and RMB 6.7153 to US$1.00, respectively. So far, the PRC government has been able to manage a stable exchange ratebetween RMB and the U.S. Dollar. Our future downward translation adjustments may occur and can be significant due to changes in such exchange rate.If we decide to convert our RMB into U.S. dollars for the purpose of making payments for dividends on our ordinary shares or for other business purposes,appreciation of the U.S. dollar against the RMB would have a negative effect on the U.S. dollar amount available to us.The PRC government imposes strict restrictions on PRC resident companies regarding converting RMB into foreign currencies and vice versa under capitalaccount transactions, such as receiving equity investments from outside of the PRC, making equity investments outside of the PRC, borrowing money from orlending money outside of the PRC, and repaying debt or remitting liquidated assets and/or accumulated profits outside of the PRC. These transactions have to beapproved by the relevant PRC government authorities, including but not limited to the commerce bureau, the tax bureau and the State Administration of ForeignExchange, or SAFE, and have to be conducted at banks entrusted by the local SAFE branch. As our business continues to grow, we may need to continuouslyfinance our PRC subsidiaries by raising capital from outside of the PRC. The restriction on converting RMB into foreign currencies, and vice versa, may limit ourability to use capital resources from outside of the PRC. Such restrictions may also limit our ability to remit profits from our PRC subsidiaries outside of the PRC,therefore potentially limiting our ability to pay dividends to our shareholders. In addition, such restrictions will limit our ability to freely transfer temporary excesscash in our or our subsidiaries’ bank accounts in and out of the PRC, therefore limiting our ability to conduct crossborder cash management activities to optimizethe utilization of our cash.InflationAlthough China has experienced an increasing inflation rate, inflation has not had a material impact on our results of operations in recent years. Accordingto the National Bureau of Statistics of China, the change in the consumer price index in China was 0.46%, (0.77%), and 1.16% in 2001, 2002 and 2003, respectively.However, in connection with a 3.9% increase in 2004, the PRC government announced measures to restrict lending and investment in China in order to reduceinflationary pressures in China’s economy. Following the government’s actions, the consumer price index decreased to 1.8% in 2005 and to 1.5% in 2006. In 2007, theconsumer price index increased to 4.8%. In response, China’s central bank, the People’s Bank of China, announced that the bank reserve ratio would rise half apercentage point to 15.5% in an effort to reduce inflation pressures. China’s consumer price index growth rate reached 8.7% year over year in 2008. In 2009 and 2010,the change in the consumer price index in China was minus 0.7% and 3.3%.China consumer price index in November 2017 was 3.8% higher than that of the same period in 2016. China consumer price index in December 2016 was2.4% higher than that of the same period in 2015. China consumer price index in December 2015 was 4.8% higher than that of the same period in 2014. Chinaconsumer price index in December 2014 was 3.3% higher than that of the same period in 2013. The results of the PRC government’s actions to combat inflation aredifficult to predict. Adverse changes in the Chinese economy, if any, will likely impact the financial performance of a variety of industries in China that use, or wouldbe candidates to use, our software products and services.68ITEM 12. DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES.A. DEBT SECURITIES.Not applicable. B. WARRANTS AND RIGHTS.Not applicable.C. OTHER SECURITIES.Not applicable.D. AMERICAN DEPOSITARY SHARES.The Bank of New York Mellon, as depositary (the “Depositary”) for the Company’s ADR facility, notified the owners and holders of the Company’s ADSsthat the ADS facility will terminate effective at 5:00 p.m. (Eastern Time) on September 19, 2018. Under the terms of the Deposit Agreement among the Company, theDepositary and the owners and holders of ADSs of the Company (the “Deposit Agreement”), owners and holders of the Company’s ADSs have until at leastJanuary 21, 2019 to surrender their ADSs to the Depositary for delivery of the underlying ordinary shares of the Company. Subsequent to January 21, 2019, underthe terms of the Deposit Agreement, the Depositary may attempt to sell any ordinary shares remaining on deposit with the Depositary. If the Depositary sells suchunderlying ordinary shares or receives value for such shares, holders must surrender their ADSs to obtain payment of the sale proceeds, net of expenses andapplicable tax and charges. We completed the voluntary delisting of our ADSs from the NASDAQ Capital Market on September 19, 2018.You may hold ADSs either (A) directly (i) by having ADSs registered in your name in the Direct Registration System, or (ii) by having an Americandepositary receipt, also referred to as an ADR, which is a certificate evidencing a specific number of ADSs, registered in your name, or (B) indirectly by holding asecurity entitlement in ADSs through your broker or other financial institution. If you hold ADSs directly, you are a registered ADS holder, also referred to as anADS holder. This description assumes you are an ADS holder. If you hold the ADSs indirectly, you must rely on the procedures of your broker or other financialinstitution to assert the rights of ADS holders described in this section. You should consult with your broker or financial institution to find out what thoseprocedures are.The Direct Registration System, or DRS, is a system administered by The Depository Trust Company, also referred to as DTC, pursuant to which thedepositary may register the ownership of uncertificated ADSs, which ownership will be confirmed by periodic statements sent by the depositary to the registeredholders of uncertificated ADSs.69As an ADS holder, you will not be treated as one of our registered shareholders and you will not have direct shareholder rights. British Virgin Island’s lawgoverns our direct shareholders’ rights. The depositary will be the holder of the shares underlying your ADSs. As a registered holder of ADSs, you will have ADSholder rights. A Deposit Agreement among us, the depositary and you, as an ADS holder, and all other persons indirectly holding ADSs, sets out ADS holder rightsas well as the rights and obligations of the depositary. New York law governs the Deposit Agreement and the ADSs.The following is a summary of the material provisions of the Deposit Agreement. For more complete information, you should read the entire DepositAgreement and the form of ADS, which contains the terms of the ADSs. The Deposit Agreement is filed as an exhibit to our registration statement filed on Form F1.You may obtain the registration statement and the attached Deposit Agreement from the SEC’s website at http://www.sec.gov. You may also obtain a copy of theDeposit Agreement at the SEC’s Public Reference Room, which is located at 100 F Street, NE, Washington, DC 20549. You may obtain information on the operationof the Public Reference Room by calling the SEC at 18007320330. Fees and ExpensesPersons depositing or withdrawing shares or ADS holders must pay:For:$5.00 (or less) per 100 ADSs (or portion of 100 ADSs)Issuance of ADSs, including issuances resulting from a distribution of shares orrights or other propertyCancellation of ADSs for the purpose of withdrawal, including if the DepositAgreement terminates$.05 (or less) per ADSAny cash distribution to ADS holdersA fee equivalent to the fee that would be payable if securities distributed to youhad been shares and the shares had been deposited for issuance of ADSsDistribution of securities distributed to holders of deposited securities whichare distributed by the depositary to ADS holders$.05 (or less) per ADSs per calendar yearDepositary servicesRegistration or transfer feesTransfer and registration of shares on our share register to or from the name ofthe depositary or its agent when you deposit or withdraw sharesExpenses of the depositaryCable, telex and facsimile transmissions (when expressly provided in the DepositAgreement) converting foreign currency to U.S. dollarsTaxes and other governmental charges the depositary or the custodian have topay on any ADS or share underlying an ADS, for example, share transfer taxes,stamp duty or withholding taxesAs necessaryAny charges incurred by the depositary or its agents for servicing the depositedsecuritiesAs necessaryPayment of TaxesHolders of our ADSs are responsible for any taxes or other governmental charges payable on their ADSs or on the deposited securities represented by anyof their ADSs. The depositary may refuse to register any transfer of a holder’s ADSs or allow withdrawal of the deposited securities represented by the ADSs untilsuch taxes or other charges are paid. It may apply payments owed to the holder or sell deposited securities represented by the ADSs to pay any taxes owed and theholder will remain liable for any deficiency. If the depositary sells deposited securities, it will, if appropriate, reduce the number of ADSs to reflect the sale and pay toADS holders any proceeds, or send to ADS holders any property, remaining after it has paid the taxes.70PART IIITEM 13. DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES.None.ITEM 14. MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS.Use of Proceeds.We completed our initial public offering on May 14, 2010 (the “IPO”), which generated net proceeds of approximately $14.6 million. All remaining cash onhand from the proceeds of our IPO was transferred to C Media Limited and its subsidiaries following the completion of the asset exchange transactions on August17, 2018.ITEM 15. CONTROLS AND PROCEDURES.Disclosure Controls and ProceduresOur Chief Executive Officer and Chief Financial Officer have reviewed and evaluated the effectiveness of our disclosure controls and procedures, whichincluded inquiries made to certain other of our employees. The term “disclosure controls and procedures,” as defined in Rules 13a15(e) and 15d15(e) under theExchange Act, means controls and other procedures of a company that are designed to ensure that information required to be disclosed by a company in thereports, such as this report, that it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in theSEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to bedisclosed by a company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the company’s management, including itsprincipal executive and principal financial officers, as appropriate to allow timely decisions regarding required disclosure. Management recognizes that any controlsand procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives and management necessarilyapplies its judgment in evaluating the costbenefit relationship of possible controls and procedures. Based on that evaluation, our Chief Executive Officer and ChiefFinancial Officer have each concluded that, as of December 31, 2017, the Company’s disclosure controls and procedures were not effective due to the materialweakness described in the “Management’s Report on Internal Control over Financial Reporting” section below.Management’s Report on Internal Control Over Financial ReportingOur management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Exchange ActRules 13a15(f) and 15d15(f). Internal control over financial reporting refers to the process designed by, or under the supervision of, our principal executive officerand principal financial officer, and effected by our Board of Directors, management and other personnel, to provide reasonable assurance regarding the reliability offinancial reporting and the preparation of financial statements for external purposes in accordance with U.S. GAAP and includes those policies and procedures that(i) pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of the assets of the Company; (ii)provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with U.S. GAAP, and thatreceipts and expenditures of the Company are being made only in accordance with authorizations of management and directors of the Company; and (iii) providereasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the Company’s assets that could have a materialeffect on the financial statements.71Any system of internal control, no matter how well designed, has inherent limitations. Therefore, even those systems determined to be effective canprovide only reasonable assurance with respect to financial statement preparation and presentation. Because of the inherent limitations of internal control, there is arisk that material misstatements may not be prevented or detected on a timely basis by internal control over financial reporting. However, these inherent limitationsare known features of the financial reporting process. Therefore, it is possible to design into the process safeguards to reduce, though not eliminate, this risk.Management assessed our internal control over financial reporting as of the year ended December 31, 2017. In making this assessment, management usedthe criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in the 2014 report entitled "Internal ControlIntegratedFramework." The COSO framework summarizes each of the components of a company’s internal control system, including (i) the control environment, (ii) riskassessment, (iii) control activities, (iv) information and communication, and (v) monitoring. Based on such assessment, management concluded that its internalcontrol over financial reporting as of December 31, 2017 was not effective because of the following material weakness:Lack of U.S. GAAP expertise. Although our accounting personnel are professional and experienced in accounting requirements and procedures generallyaccepted in the PRC, they do not have sufficient knowledge, experience and training in maintaining our books and records and preparing financial statements inaccordance with U.S. GAAP standards and SEC rules and regulations. The staff needs additional training to become experienced in U.S. GAAPbased reporting,including the skills of U.S. GAAPbased period end closing, consolidation of financial statements, and U.S. GAAP conversion.In order to address the above material weakness, our management plans to take the following steps:We will employ, as needed, outside professionals to provide key accounting personnel ongoing technical trainings to ensure their proper understanding ofU.S. GAAP and newly announced accounting standards.The Company believes the foregoing measures will remediate the identified material weakness in future periods. The Company is committed to monitoringthe effectiveness of these measures and making any changes that are necessary and appropriate.Notwithstanding the conclusion that its internal control over financial reporting was not effective as of the end of the period covered by this report, ourChief Executive Officer and Chief Financial Officer believe that the financial statements and other information contained in this report present fairly, in all materialrespects, its business, financial condition and results of operations. Nothing has come to the attention of management that causes them to believe that any materialinaccuracies or errors exist in the Company’s financial statements as of December 31, 2017.Attestation report of the registered public accounting firm.This transition report does not include an attestation report of the Company’s registered public accounting firm on internal control over financial reportingbecause the Company is a nonaccelerated filer permanently exempted from section 404(b) of the SarbanesOxley Act.Changes in Internal Control over Financial ReportingThere were no changes in the Company’s internal control over financial reporting that occurred during our fiscal year ended December 31, 2017 that hasmaterially affected or is reasonably likely to materially affect our internal control over financial reporting.ITEM 16. [RESERVED]ITEM 16A. AUDIT COMMITTEE FINANCIAL EXPERT.Our board of directors has determined that Mr. Dennis Galgano qualifies as an audit committee financial expert. Our board of directors has determined thatMessrs. Dennis Galgano, Jin Shi, Jiming Ha and Zhihao Xu meet the definition of an “independent director” under the applicable NASDAQ Rules and under Rule10A3 of the Securities Exchange Act of 1934, as amended.72ITEM 16B. CODE OF ETHICS.Our board of directors has adopted a code of business conduct and ethics applicable to our directors, officers and employees. We have posted the code onour website at http://www.luokung.com.ITEM 16C. PRINCIPAL ACCOUNTANT FEES AND SERVICES.Audit FeesThe aggregate fees billed by Moore Stephens CPA Limited for professional services rendered for the audit of our financial information disclosed in thistransition report on Form 20F was $280,000 for the two years ended December 31, 2017 and 2016.The aggregate fees billed by our previous auditor, BDO China Shu Lun Pan Certified Public Accountants LLP for professional services rendered for theaudit of our annual financial information included in our annual reports on Form 20F was $105,500 for each of the fiscal years ended September 30, 2017, 2016 and2015.Tax FeesWe did not engage our principal accountants to provide tax or related services during the last two fiscal years.All Other FeesWe did not engage our principal accountants to render services to us during the last two fiscal years, other than as reported above.ITEM 16D. EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES.Not applicable.ITEM 16E. PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS.Not applicable.ITEM 16F. CHANGE IN REGISTRANT’S CERTIFYING ACCOUNTANT.Not applicable.ITEM 16G. CORPORATE GOVERNANCE.We are incorporated in the BVI and our corporate governance practices are governed by applicable BVI law as well as our memorandum and articles ofassociation. In addition, because our ADSs are listed on NASDAQ, we are subject to NASDAQ’s corporate governance requirements. NASDAQ Listing Rule5620(a) requires each issuer to hold an annual meeting of shareholders no later than one year after the end of the issuer’s fiscal year end. However, NASDAQ ListingRule 5615(a)(3) permits a foreign private issuer like us to follow home country practices in lieu of certain requirements of Listing Rule 5600, provided that suchforeign private issuer discloses in its transition report filed with the SEC each requirement of Rule 5600 that it does not follow and describes the home countrypractice followed in lieu of such requirement. We follow home country practice with respect to annual meetings and did not hold an annual shareholder meeting inthe year ended December 31, 2017. We may, however, hold annual shareholder meetings in the future if there are significant issues that require shareholders’approvals.ITEM 16H. MINE SAFETY DISCLOSURE.Not applicable.73PART IIIITEM 17. FINANCIAL STATEMENTS.We have elected to provide financial statements and related information specified in Item 18.ITEM 18. FINANCIAL STATEMENTS.See “Index to Consolidated Financial Statements” for a list of all financial statements filed as part of this transition report. The Financial Statements arebeginning on page F1.ITEM 19. EXHIBITS.See the Exhibit Index following the signature page of this report, which is incorporated herein by reference.74SIGNATURESThe registrant hereby certifies that it meets all of the requirements for filing on Form 20F and that it has duly caused and authorized the undersigned tosign this transition report on its behalf.LUOKUNG TECHNOLOGY CORP.By:/s/ Xuesong Song Xuesong SongChief Executive Officer(principal executive officer)October 12, 201875EXHIBIT INDEXThe following documents are filed as part of this transition report on Form 20F.ExhibitNumberDescription1.1Amended and Restated Memorandum of Association and Articles of Association of Luokung Technology Corp., dated August 20, 2018, and ascurrently in effect.2.1*Deposit Agreement among the Company, depositary and holders of the American Depositary Receipts.2.2*Form of American Depositary Receipt.2.3*English translation of Entrusted Management Agreement dated December 15, 2009 between Xi’an Softech Co., Ltd., Xi’an Kingtone InformationTechnology Co., Ltd. and the shareholders of Xi’an Kingtone Information Technology Co., Ltd.3.1*English translation of Shareholder’s Voting Proxy Agreement dated December 15, 2009 between Xi’an Softech Co., Ltd., Xi’an Kingtone InformationTechnology Co., Ltd. and the shareholders of Xi’an Kingtone Information Technology Co., Ltd.4.1*English translation of Exclusive Technology Service Agreement dated December 15, 2009 between Xi’an Softech Co., Ltd. and Xi’an KingtoneInformation Technology Co., Ltd.4.2*English translation of Exclusive Option Agreement dated December 15, 2009 between Xi’an Softech Co., Ltd., Xi’an Kingtone InformationTechnology Co., Ltd. and the shareholders of Xi’an Kingtone Information Technology Co., Ltd.4.3*English translation of Equity Pledge Agreement dated December 15, 2009 between Xi’an Softech Co., Ltd., Xi’an Kingtone Information TechnologyCo., Ltd. and the shareholders of Xi’an Kingtone Information Technology Co., Ltd.4.4*English translation of Loan Agreement dated September 14, 2009 between Xi’an Kingtone Information Technology Co., Ltd. and Xian CityCommercial Bank.4.5*English translation of Mortgage Agreement dated September 14, 2009 between Xi’an Kingtone Information Technology Co., Ltd. and Xian CityCommercial Bank.4.6*English translation of Form of Employment Agreement entered into between the Company and the Company’s executive officers.4.7*2010 Omnibus Incentive Plan of the Company.4.8**English translation of Project Construction Contract dated August 10, 2010 between Xi’an Hu County Yuxing Agriculture Science & TechnologyCo., Ltd. and Xi’an Kingtone Information Technology Co., Ltd.4.9***Asset Exchange Agreement by and between C Media Limited and the Company dated as of January 25, 2018.4.10***Securities Purchase Agreement by and among Redstone YYL Management Limited and five shareholders holding majority of the shares of theCompany dated as of January 25, 2018.4.15Exclusive Business Cooperation Agreement by and between Zhongchuan Tianxia Information Technology (Shenzhen) Co., Ltd., and Beijing MobileVision Technology Co., Ltd., dated August 31, 2015.764.16Exclusive Option Agreement by and among Zhongchuan Tianxia Information Technology (Shenzhen) Co., Ltd., Xuesong Song, Weili Chen, PingWang, Donglai Liu, and Beijing Mobile Vision Technology Co., Ltd., dated August 31, 2015.4.17Equity Interest Pledge Agreement by and among Zhongchuan Tianxia Information Technology (Shenzhen) Co., Ltd., Xuesong Song, Weili Chen, PingWang, Donglai Liu, and Beijing Mobile Vision Technology Co., Ltd., dated August 31, 2015.4.18Addendum to Asset Exchange Agreement by and among the Company, Topsky Infotech Holdings Pte Ltd. and C Media Limited, dated October 3,2018. Incorporated by reference to the Company’s Current Report on Form 6K filed on October 4, 2018.4.19Stock Purchase Agreement, dated August 25, 2018, by and among the Company, LK Technology Ltd., and the shareholders listedtherein. Incorporated by reference to the Company’s Current Report on Form 6K filed on August 27, 2018.4.20Power of Attorney by Weili Chen, dated August 31, 2015.4.21Power of Attorney by Ping Wang, dated August 31, 2015.4.22Power of Attorney by Donglai Liu, dated August 31, 2015.4.23Power of Attorney by Xuesong Song, dated August 31, 2015.8.1List of Subsidiaries and Consolidated Variable Interest Entities10.1Employment Agreement, dated August 19, 2018, between Luokung Technology Corp. and Xuesong Song.†10.2Employment Agreement, dated August 19, 2018, by and between Luokung Technology Corp. and Jie Yu.†12.1Certification of Chief Executive Officer required by Rule 13a14(a).12.2Certification of Chief Financial Officer required by Rule 13a14(a).13.1Certification of Chief Executive Officer required by Rule 13a14(a).13.2Certification of Chief Financial Officer required by Rule 13a14(a).101.INSXBRL Instance Document.101.SCHXBRL Taxonomy Extension Schema Document.101.CALXBRL Taxonomy Extension Calculation Linkbase Document.101.DEFXBRL Taxonomy Extension Definition Linkbase Document.101.LABXBRL Taxonomy Extension Label Linkbase Document.101.PREXBRL Taxonomy Extension Presentation Linkbase Document.*Previously filed as an exhibit to the Company’s Registration Statement on Form F1 (Reg. No. 333166056) filed with the Commission and incorporated hereinby reference.**Previously filed as exhibits to the Company’s Transition Report on Form 20F filed with the Commission on January 20, 2011 and incorporated herein byreference.***Previously filed as exhibits to the Company’s Annual Report on Form 20F filed with the Commission on February 9, 2018 and incorporated herein byreference.†Indicates management contract or compensatory plan, contract or arrangement.77LK Technology Ltd. and SubsidiariesCONSOLIDATED FINANCIAL STATEMENTSTABLE OF CONTENTSPage(s)Report of Independent Registered Public Accounting FirmF2Consolidated Financial StatementsConsolidated Balance SheetsF3Consolidated Statements of Operations and Comprehensive LossF4application.Chuang (Vincent) Tao was appointed as a member of the Board effective on August 25, 2018. Dr. Tao was the Chairman of SuperEngine Suzhou from 2014to 2017. Dr. Tao has been the president of the Seasky Angel Investment Alliance of Shanghai since 2015. Dr. Tao received his Bachelor Degree of geographicinformation and telemetry from Wuhan University in China in 1990 and received his Ph.D. from University of Calgary, Canada in 1997.Dennis Galgano was appointed as a director of the Company following the consummation of the asset exchange agreement. He was a registered consultantwith Morgan Joseph Triartisan LLC from November 2016 until October 2017, and previously served as vice chairman and head of international investment bankingfor Morgan Joseph Triartisan LLC, which is a registered broker dealer engaged in the investment banking and financial advisory industry. Mr. Galgano received aB.S. degree in Chemistry from St. John’s University and an M.B.A. from The Wharton School in 1972.Jin Shi was appointed as a director of the Company following the consummation of the asset exchange transactions. Mr. Shi has served as the managingpartner of Chum Capital Group, a merchant bank focused on helping Chinese growth companies to access global capital, since January 2013. Mr. Shi has also servedas a director of Seven Stars Cloud Group, Inc. (NASDAQ: SSC), a premium video on demand service provider, since January 2014, and joined the audit committee ofits board of directors in March 2016. He also served as a director and member of the audit committee of Pingtan Marine Enterprise, Ltd. (NASDAQ: PME), a marineenterprise group primarily engaged in ocean fishing through its subsidiaries. Mr. Shi received an EMBA degree from the Guanghua Management School of BeijingUniversity, and a Bachelor’s degree of science in Chemical Engineering from Tianjin University.Jiming Ha was appointed as a director of the Company following the consummation of the asset exchange agreement, and has also served as a seniorresearch fellow for the China Finance 40 Forum since March 1, 2018, and previously served as a managing director of Goldman Sachs from January 2017 to April2017. Mr. Ha served as a vice chairman and chief investment strategist of the Investment Strategy Group for Private Wealth Management at Goldman Sachs from2010 to January 2017. Mr. Ha holds a PhD in Economics from the University of Kansas and Master’s and Bachelor’s degrees of science from Fudan University.Zhihao Xu was appointed as a director of the Company following the consummation of the asset exchange transactions. Mr. Xu has served as the chiefexecutive officer of Geely Group Co., Ltd., in Hangzhou, China, since December 2017, and previously served as the chairman and chief executive officer of BeijingDingchengrenhe Investment Co., Ltd., a funds management company, from January 2017 to December 2017. Mr. Xu served as the chairman of president of HNAUSOLV CO., LTD., and the chief innovation officer of HNA Logistics Group from January 2014 to December 2016, and prior to that as the chairman of GopayInnovation Technology Co. Ltd., an online payment system operator supporting online money transfers, from April 2012 to January 2014. Mr. Xu graduated from theBusiness School of Renmin University of China and from the Wudaokou Finance College of Tsinghua University with a fund qualification certificate and securitiesqualification certificate.B. COMPENSATION.Compensation of Directors and Executive OfficersFor the ninemonth transition period ended September 30, 2018 and the fiscal year ended December 31, 2017, we did not pay any cash compensation to ourexecutive officers of LK Technology Ltd. and a to our directors for serving on our board of directors of LK Technology Ltd.37Other than nonemployee directors, we do not intend to compensate directors for serving on our board of directors or any of its committees. We do,however, intend to reimburse each member of our board of directors for outofpocket expenses incurred by each director in connection with attending meetings ofthe board of directors and its committees.AdministrationThe Incentive Plan is administered by our board of directors, or at the discretion of the board, by our compensation committee. Our board of directors hasdelegated authority to our compensation committee to administer the Incentive Plan. Subject to the terms of the Incentive Plan, the compensation committee mayselect participants to receive awards, determine the types of awards and terms and conditions of awards, and interpret provisions of the Incentive Plan.The ordinary shares issued or to be issued under the Incentive Plan consist of authorized but unissued shares. If any ordinary shares covered by an awardare not purchased or are forfeited, or if an award otherwise terminates without delivery of any ordinary shares, then the number of ordinary shares counted againstthe aggregate number of ordinary shares available under the plan with respect to the award will, to the extent of any such forfeiture or termination, again be availablefor making awards under the Incentive Plan.EligibilityAwards may be made under the Incentive Plan to our employees, officers, directors, consultants or advisers or to any of our affiliates, and to any otherindividual whose participation in the Incentive Plan is determined to be in our best interests by our board of directors.Amendment or Termination of the PlanOur board of directors may terminate or amend the Incentive Plan at any time and for any reason. No amendment, however, may adversely impair the rightsof grantees with respect to outstanding awards. The Incentive Plan has a term of ten years. Amendments will be submitted for shareholder approval to the extentrequired by applicable stock exchange listing requirements or other applicable laws.OptionsThe Incentive Plan permits the granting of options to purchase ordinary shares intended to qualify as incentive share options under the Internal RevenueCode and share options that do not qualify as incentive share options, or nonqualified share options.The exercise price of each share option may not be less than 100% of the fair market value of our ADSs representing ordinary shares on the date of grant.In the case of certain 10% shareholders who receive incentive share options, the exercise price may not be less than 110% of the fair market value of our ADSsrepresenting ordinary shares on the date of grant. An exception to these requirements is made for options that we grant in substitution for options held byemployees of companies that we acquire. In such a case the exercise price is adjusted to preserve the economic value of the employee’s share option from his or herformer employer.The term of each share option is fixed by the compensation committee and may not exceed ten years from the date of grant. The compensation committeedetermines at what time or times each option may be exercised and the period of time, if any, after retirement, death, disability or termination of employment duringwhich options may be exercised.Options may be made exercisable in installments. The award agreement provides the vesting of the options. Exercisability of options may be accelerated bythe compensation committee.38In general, an optionee may pay the exercise price of an option by (1) cash or check (in U.S. dollars or Renminbi or other local currency as approved by thecompensation committee), (2) ordinary shares held for such period of time as may be required by the compensation committee, (3) delivery of a notice of a marketorder with a broker with respect to ordinary shares then issuable upon exercise of an option, and that the broker has been directed to pay us a sufficient portion ofnet proceeds of the sale in satisfaction of the exercise price, provided that payment of such proceeds is then made to us upon settlement of such sale, (4) otherproperty acceptable to the compensation committee with a fair market value equal to the exercise price, (5) cashless exercise or (6) any combination of the foregoing.Share options granted under the Incentive Plan may not be sold, transferred, pledged, or assigned other than by will or under applicable laws of descentand distribution. However, we may permit limited transfers of nonqualified options for the benefit of immediate family members of grantees to help with estateplanning concerns or pursuant to a domestic relations order in settlement of marital property rights.Other AwardsThe compensation committee may also award under the Incentive Plan:1.ordinary shares subject to restrictions;2.deferred ordinary shares, credited as deferred ordinary share units, but ultimately payable in the form of unrestricted ordinary shares inaccordance with the terms of the grant or with the participant’s deferral election;3.ordinary share units subject to restrictions;4.unrestricted ordinary shares, which are ordinary shares issued at no cost or for a purchase price determined by the compensation committee whichare free from any restrictions under the 2011 Omnibus Incentive Plan;5.dividend equivalent rights entitling the grantee to receive credits for dividends that would be paid if the grantee had held a specified number ofordinary shares; or6.a right to receive a number of ordinary shares or, in the discretion of the compensation committee, an amount in cash or a combination of ordinaryshares and cash, based on the increase in the fair market value of the ADSs representing ordinary shares underlying the right during a statedperiod specified by the compensation committee.Effect of Certain Corporate TransactionsCertain change of control transactions involving us may cause awards granted under the Incentive Plan to vest, unless the awards are continued orsubstituted for by the surviving company in connection with the corporate transaction.Unless otherwise provided in the appropriate option agreement on the date of grant or provided by our board of directors thereafter with the consent of thegrantee, options granted under the Incentive Plan become exercisable in full following (1) a dissolution of our company or a merger, consolidation or reorganizationof our company with one or more other entities in which we are not the surviving entity, (2) a sale of substantially all of our assets to another person or entity, or (3)any transaction (including without limitation a merger or reorganization in which we are the surviving entity) which results in any person or entity owning 50% ormore of the combined voting power of all classes of our shares.39Adjustments for Dividends and Similar EventsThe compensation committee will make appropriate adjustments in outstanding awards and the number of ordinary shares available for issuance under theIncentive Plan, including the individual limitations on awards, to reflect ordinary share dividends, stock splits and other similar events.C. BOARD PRACTICES.Board of DirectorsOur board of directors consists of six members being Messrs. Xuesong Song, Kegang Peng, Dennis Galgano, Jin Shi, Jiming Ha and Zhiaho Xu. Ourdirectors hold office until our annual meeting of shareholders, where their successors will be duly elected and qualified, or until the directors’ death, resignation orremoval, whichever is earlier. Our directors are not subject to a term of office and hold office until their resignation, death or incapacity or until their respectivesuccessors have been elected and qualified in accordance with our fourth amended and restated memorandum of association and articles of association. A directorwill be removed from office if, among other things, the director (1) becomes bankrupt, (2) dies or becomes of unsound mind, or (3) is absent from meetings of ourboard of directors for six consecutive months without leave and our board of directors resolves that the office is vacated. A director is not entitled to any specialbenefits upon termination of service with the company.Director IndependenceOur board of directors consists of six members; Messrs. Dennis Galgano, Jin Shi, Jiming Ha and Zhihao Xu have been determined by us to be independentdirectors within the meaning of the independent director guidelines of the NASDAQ Corporate Governance Rules (the “NASDAQ Rules”).Committees of Our Board of DirectorsTo enhance our corporate governance, we established three committees under our board of directors: an audit committee, a compensation committee, and anominating and corporate governance committee. We have adopted a charter for each of these committees. The committees have the following functions andmembers.Audit CommitteeOur audit committee reports to our board of directors regarding the appointment of our independent public accountants, the scope and results of ourannual audits, compliance with our accounting and financial policies and management’s procedures and policies relating to the adequacy of our internal accountingcontrols. Our audit committee consists of Messrs. Dennis Galgano, Jin Shi, and Jiming Ha. Mr. Galgano, having accounting and financial management expertise,serves as the chairman of the audit committee and is an “audit committee financial expert” as defined by the rules and regulations of the SEC. Our board of directorshas determined that each of these persons meet the definition of an “independent director” under the applicable NASDAQ Rules and under Rule 10A3 of theSecurities Exchange Act of 1934, as amended (the “Exchange Act”).Our audit committee is responsible for, among other things:●the appointment, evaluation, compensation, oversight and termination of the work of our independent auditor (including resolution of disagreementsbetween management and the independent auditor regarding financial reporting);●an annual performance evaluation of the audit committee;●establishing procedures for the receipt, retention and treatment of complaints regarding accounting, internal accounting controls, auditing matters orpotential violations of law, and the confidential, anonymous submission by our employees of concerns regarding questionable accounting or auditingmatters or potential violations of law;40●ensuring that it receives an transition report from our independent auditor describing our internal control procedures and any steps taken to deal withmaterial control deficiencies and attesting to the auditor’s independence and describing all relationships between the auditor and us;●reviewing our annual audited financial statements and quarterly financial statements with management and our independent auditor;●reviewing and approving all proposed related party transactions;●reviewing our policies with respect to risk assessment and risk management;●meeting separately and periodically with management and our independent auditor; and●reporting regularly to our board of directors.Compensation CommitteeOur compensation committee assists the board of directors in reviewing and approving the compensation structure of our directors and executive officers,including all forms of compensation to be provided to our directors and executive officers. In addition, the compensation committee reviews share compensationarrangements for all of our other employees. Members of the compensation committee are not prohibited from direct involvement in determining their owncompensation. Our chief executive officer is not permitted to be present at any committee meeting during which his or her compensation is deliberated. Ourcompensation committee consists of Dennis Galgano and Jin Shi, with Mr. Shi serving as the chairman of the compensation committee. Our board of directors hasdetermined that each of these persons meet the definition of “independent director” under the applicable requirements of the NASDAQ Rules.Our compensation committee is responsible for, among other things:●reviewing and approving corporate goals and objectives relevant to the compensation of our chief executive officer, evaluating the performance of ourchief executive officer in light of those goals and objectives and setting the compensation level of our chief executive officer based on this evaluation;●reviewing and making recommendations to the board with respect to the compensation of our executives, incentive compensation and equitybasedplans that are subject to board approval; and●providing annual performance evaluations of the compensation committee.Nominating and Corporate Governance CommitteeOur nominating and corporate governance committee assists the board of directors in identifying and selecting or recommending individuals qualified tobecome our directors, developing and recommending corporate governance principles and overseeing the evaluation of our board of directors and management. Ournominating and corporate governance committee consists of Jiming Ha and Zhihao Xue, with Mr. Ha serving as the chairman of the nominating and corporategovernance committee. Our board of directors has determined that each of these persons meet the definition of “independent director” under the applicablerequirements of the NASDAQ Rules.Our nominating and corporate governance committee is responsible for, among other things:●selecting and recommending to our board nominees for election or reelection to our board, or for appointment to fill any vacancy;●reviewing annually with our board the current composition of the board of directors with regards to characteristics such as independence, age, skills,experience and availability of service to us;●selecting and recommending to our board the names of directors to serve as members of the audit committee and the compensation committee, as wellas the nominating and corporate governance committee itself; advising our board of directors periodically with regards to significant developments inthe law and practice of corporate governance as well as our compliance with applicable laws and regulations, and making recommendations to ourboard of directors on all matters of corporate governance and on any remedial action to be taken; and●monitoring compliance with our code of business conduct and ethics, including reviewing the adequacy and effectiveness of our procedures to ensureproper compliance.41Code of Business Conduct and EthicsOur board of directors adopted a code of business conduct and ethics applicable to our directors, officers and employees.Duties of DirectorsUnder British Virgin Islands law, our directors have a duty to act honestly, in good faith and with a view to our best interests. Our directors also have a dutyto exercise care, diligence and skills that a reasonably prudent person would exercise in comparable circumstances. In fulfilling their duty of care to us, our directorsmust ensure compliance with our memorandum of association and articles of association. We have the right to seek damages if a duty owed by our directors isbreached.The functions and powers of our board of directors include, among others:●appointing officers and determining the term of office of the officers;●authorizing the payment of donations to religious, charitable, public or other bodies, clubs, funds or associations as deemed advisable;●exercising the borrowing powers of the company and mortgaging the property of the company;●executing cheques, promissory notes and other negotiable instruments on behalf of the company; and●maintaining or registering a register of mortgages, charges or other encumbrances of the company.Remuneration and BorrowingThe directors may receive such remuneration as our board of directors may determine from time to time. Each director is entitled to be repaid or prepaid alltraveling, hotel and incidental expenses reasonably incurred or expected to be incurred in attending meetings of our board of directors or committees of our board ofdirectors or shareholder meetings or otherwise in connection with the discharge of his or her duties as a director. The compensation committee will assist thedirectors in reviewing and approving the compensation structure for the directors.Our board of directors may exercise all the powers of the company to borrow money and to mortgage or charge our undertakings and property or any partthereof, to issue debentures, debenture stock and other securities whenever money is borrowed or as security for any debt, liability or obligation of the company orof any third party.QualificationA director is not required to hold shares as a qualification to office.42Limitation on Liability and Other Indemnification MattersBritish Virgin Islands law does not limit the extent to which a company’s memorandum of association and articles of association may provide forindemnification of officers and directors, except to the extent any such provision may be held by the British Virgin Islands courts to be contrary to public policy,such as to provide indemnification against civil fraud or the consequences of committing a crime.Under our memorandum of association and articles of association, we may indemnify our directors, officers and liquidators against all expenses, includinglegal fees, and against all judgments, fines and amounts paid in settlement and reasonably incurred in connection with civil, criminal, administrative or investigativeproceedings to which they are party or are threatened to be made a party by reason of their acting as our director, officer or liquidator. To be entitled toindemnification, these persons must have acted honestly and in good faith with a view to the best interest of the company and, in the case of criminal proceedings,they must have had no reasonable cause to believe their conduct was unlawful.Compensation Committee Interlocks and Insider ParticipationNone of the members of our compensation committee is an officer or employee of our company. None of our executive officers currently serves, or in thepast year has served, as a member of the board of directors or compensation committee of any entity that has one or more executive officers serving on our board ofdirectors or compensation committee.Employment AgreementsOn August 19, 2018, the Company entered into an Employment Agreement (the “Song Agreement”) with Mr. Xuesong Song, to serve as the ChiefExecutive Officer of the Company for a fouryear term, subject to renewal. Under the terms of the Song Agreement, Mr. Song will receive no salary for his servicesbut will be eligible for an annual cash bonus in the Board’s sole discretion.On August 19, 2018, the Company entered into an Employment Agreement (the “Yu Agreement”) with Mr. Jie Yu, to serve as the Chief Financial Officer ofthe Company for a fouryear term, subject to renewal. Under the terms of the Yu Agreement, Mr. Yu will receive an annual salary of RMB700,000, and will be eligiblefor an annual cash bonus in the Board’s sole discretion.D. EMPLOYEES.As of September 30, 2018 and December 31, 2017, we had a total of 107 and 37 fulltime employees, including 48 and 13 in research and development, 9 and 2in sales and marketing and the rest in a variety of other divisions, respectively. All of our employees are fulltime employees. None of our employees is currentlyrepresented by a union and/or collective bargaining agreements. We believe that we have good relations with our employees and since our inception we have hadno history of work stoppages or union organizing campaigns.E. SHARE OWNERSHIP.The following table provides information as to the beneficial ownership of our ordinary shares as of October 10, 2018, by the persons listed. Beneficialownership of shares is determined under the rules of the SEC and generally includes any shares over which a person exercises sole or shared voting or investmentpower. For purposes of the following table, a person is deemed to have beneficial ownership of any ordinary shares if such person has the right to acquire suchshares within 60 days of October 10, 2018. For purposes of computing the percentage of outstanding shares held by each person, any shares that such person hasthe right to acquire within 60 days after of October 10, 2018 are deemed to be outstanding, but are not deemed to be outstanding for the purpose of computing thepercentage ownership of any other person. Except as otherwise noted, the persons named in the table have sole voting and investment power with respect to all ofthe ordinary shares beneficially owned by them. Unless otherwise indicated, the address of each person listed is c/o Luokung Technologies, LAB 32, SOHO 3Q, No9, Guanghua Road, Chaoyang District, Beijing, People’s Republic of China.43Percentage ownership in the following table is based on 199,317,558 ordinary shares outstanding on October 10, 2018.Number ofsharesPercent ofclassDirectors and named executive officersCharm Dragon International Limited (1)4,030,8822.03%Xuesong Song, Chairman, Chief Executive Officer and Director(2)38,156,43019.30%Kegang Peng, Vice President and Director (3)17,231,9558.71%Dennis Galgano, Director75,796*%Jin Shi, DirectorJiming Ha, DirectorZhihao Xu, Director (4)7,579,1843.83%Dongpu Zhang, President (5)2,321,7921.17%Chuang Tao, Director (6)1,221,996*%Directors and executive officers as a group (10 persons)66,587,15233.69%(1)Charm Dragon International Limited is a British Virgin Islands company controlled by Mr. Xuesong Song.(2)Consists of (i) 4,030,882 shares owned directly by Charm Dragon International Limited, a British Virgin Islands company and (ii) 22,624,793 shares owneddirectly by Bravo First Development Limited, a British Virgin Islands company. Mr. Xuesong Song is the controlling shareholder of Bravo First DevelopmentLimited. Mr. Xuesong Song is the sole director of Charm Dragon International Limited.(3)Consists of 17,231,955 shares owned directly by Plenty Prestige Enterprises Limited, a British Virgin Islands company. Mr. Kegang Peng is the sole director ofPlenty Prestige Enterprises Limited.(4)Consists of 7,579,184 shares directly owned by Geely Group Limited., a Chinese company. Mr. Zhihao Xu is the Chief Executive Officer of Geely GroupLimited.(5)Consists of 2,321,792 shares owned directly by Genoa Peak Limited, a British Virgin Islands company. Mr. Dongpu Zhang controls Genoa Peak Limited.(6)Consists of 1,221,996 shares owned directly by Globalearth Holdings Limited, a British Virgin Islands company. Mr. Chuang Tao controls Globalearth HoldingsLimited.*Represents less than 1% of shares outstandingITEM 7. MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS.A. MAJOR SHAREHOLDERSPlease refer to Item 6.E “Directors, Senior Management and Employees — Share Ownership.”To our knowledge, (A) we are not directly or indirectly owned or controlled by (i) another corporation or (ii) any foreign government and (B) there are noarrangements (including any announced or expected takeover bid), the operation of which may at a subsequent date result in a change in our control.The voting rights of our major shareholders do not differ from the voting rights of other holders of the same class of shares.44B. RELATED PARTY TRANSACTIONS. BUSINESS RELATIONSHIPS.Our subsidiaries, consolidated affiliated entities, and the subsidiaries of the consolidated affiliated entities have engaged, during the ordinary course ofbusiness, in a number of customary transactions with each other. All of these intercompany balances have been eliminated in consolidation.As of December 31, 2017, we had amounts due from related parties, C Media Limited and Ya Tuo Ji International Consultancy (Beijing) Limited, in theamounts of $11.8 million and $0.2 million, respectively. These amounts due from related parties are short term in nature, noninterest bearing, unsecured andrepayable on demand.As of December 31, 2017, we had amounts due to related parties, Mr. Xuesong Song, our chairman and chief executive officer, Thumb Beijing Branch andThumb Shenzhen Branch, in the amounts of $2.9 million, $0.6 million and $0.03 million, respectively. These amounts due to related parties are short term in nature,noninterest bearing, unsecured and payable on demand.We are party to a series of control agreements with Beijing Zhong Chuan Shi Xun. In addition, our chief executive officer, Mr. Xuesong Song, serves as andofficer of Beijing Zhong Chuan Shi Xun and is a shareholder of Beijing Zhong Chuan Shi Xun. The following table sets forth the relationship of Mr. Song withBeijing Zhong Chuan Shi Xun:NameRelationship withLuokung TechnologyRelationship withBeijing Zhong Chuan Shi XunPercentageOwnership Interest inBeijing Zhong Chuan Shi XunXuesong SongChief Executive OfficerChief Executive Officer61.83%C. INTERESTS OF EXPERTS AND COUNSEL.None.ITEM 8. FINANCIAL INFORMATION.A. CONSOLIDATED STATEMENTS AND OTHER FINANCIAL INFORMATION.See “Item 18. Financial Statements.”Legal ProceedingsTo our knowledge, other than as described below there are no material legal proceedings threatened against us. From time to time, we may be subject tovarious claims and legal actions arising in the ordinary course of business. Following the consummation of the AEA, we became successor in interest to the legalproceedings described below.Litigation with Shanghai Fusheng Weier Intelligent Control Technology Co., Ltd.On January 22, 2016, Zhong Chuan Rui You and Shanghai Fusheng Weier Intelligent Control Technology Co., Ltd. (“Fusheng Weier”) signed a contract forequipment of $1,652,842 (RMB10,800,000). Since Zhong Chuan Rui You did not make the payments of $1,126,381 (RMB7,360,000) on the due dates, Fusheng Weierfiled a lawsuit against Zhong Chuan Rui You in Shanghai Xuhui District People's Court on October 8, 2016. On March 9, 2017, Xuhui District People's Court issuedthe verdict requiring Zhong Chuan Rui You to pay the overdue debts. In August 2017, C Media Limited made the payment of $512,075 (RMB3,346,000). Theremaining balance has been accrued in accounts payable. The payment schedule for the remaining balance is being negotiated by the two parties. On February 5,2018, a hearing was held adding Zhong Chuan Shi Xun as a defendant. The Group plans to settle the remaining balance within one year.45Lawsuit with Gansu Jinlun Culture Media Co., Ltd.On August 22, 2014, Zhong Chuan Rui You and Gansu Jinlun Culture Media Co., Ltd. (“Gansu Jinlun”) signed a “Lanzhou Railway Bureau AirconditionedTrain WiFi Network System Advertising Operation Rights Agreement” for advertising on 72 trains of $1,467,880 (RMB9,604,633). Due to the dispute on theproject implementation, Zhong Chuan Rui You did not pay the advertising fee. On August 23, 2017, Gansu Jinlun filed a lawsuit with Gansu Intermediate People'sCourt. On December 19, 2017, Gansu Intermediate People's Court issued a verdict, ruling that Zhong Chuan Rui You settle the overdue advertising fee. Since only 18out of 72 trains have been installed with Wifi network system, Zhong Chuan Rui You disputed and appealed to the verdict. The next court trial date has not yet beendetermined. C Media and Gansu Jinlun are negotiating a potential settlement to resume the contract. According to the legal counsel, it is probable that the settlementwill amount to approximately $459,000 (RMB3,000,000); therefore, this amount has been accrued in accounts payable as at December 31, 2017.Litigation with Shenzhen Hua Xun Fang Zhou Technology Co., Ltd.On June 16, 2015, Zhong Chuan Rui You signed a cooperation agreement with Shenzhen Hua Xun Fang Zhou Technology Co., Ltd. (“Shenzhen Hua Xun”)and Xuesong Song, a major shareholder of C Media Limited. Pursuant to this agreement, Zhong Chuan Rui You procures equipment from Shenzhen Hua Xun.Xuesong Song acts as a joint liability guarantor for the entire debts of Zhong Chuan Rui You under this agreement. As Zhong Chuan Rui You did not make thepayments on the due dates, Shenzhen Hua Xun filed a lawsuit with Shenzhen Baoan District People's Court on May 31, 2016. On November 1, 2016, Zhong ChuanRui You, Xuesong Song and Shenzhen Hua Xun reached a settlement in Shenzhen Baoan District People's Court to settle $1,735,389 (RMB11,355,000) in fourinstalments. On December 30, 2017, the debt was assigned to C Media Limited.Dividend PolicyWe currently intend to retain all of our available funds and future earnings for use in the operation and expansion of our business and do not anticipatepaying cash dividends in the foreseeable future. Under the terms of our Amended and Restated Memorandum and Articles of Association the declaration andpayment of any dividends in the future will be determined by our board of directors, in its discretion, and will depend on a number of factors, including our earnings,capital requirements and overall financial condition and our ability to receive dividends from our subsidiaries. If we pay any dividends, we will pay our ADS holders’dividends with respect to their underlying shares to the same extent as holders of our ordinary shares, subject to the terms of the deposit agreement, including thefees and expenses payable thereunder. Cash dividends on our ordinary shares, if any, will be paid in U.S. dollars.Our ability to receive dividends from our subsidiaries may limit our ability to pay dividends on our ordinary shares. See Risk Factors – Risks Related toDoing Business in China – Our holding company structure may limit the payment of dividends” and “Item 10. Additional Information – D. Exchange Controls –Dividend Distribution”.B. SIGNIFICANT CHANGES.N/AITEM 9. THE OFFER AND LISTINGA. OFFER AND LISTING DETAILS.Markets and Share Price HistoryOur ordinary shares are not currently listed on any trading market. Our American Depository Shares (“ADSs”) were voluntarily delisted from the NASDAQCapital Market on September 19, 2018. We have applied to NASDAQ for the listing of our ordinary shares on the NASDAQ Capital Market and received an approvalfor listing of Ordinary Shares on August 6, 2018, and as of the date of this transition report, that application and approval are currently under review.46The table below sets forth the high and low reported sales prices in dollars of our ordinary shares, which are represented by ADSs, as reported byNASDAQ in the periods as indicated:ADSHighLowAnnual Highs and Lows (as of the fiscal year end 09/30 for the five most recent full financial years)*20175.592.67201610.21.62Quarterly Highs and Lows (for the two most recent full financial years and any subsequent period, based on calendarquarter end)*2018Third Quarter8.006.30Second Quarter8.824.25First Quarter6.403.702017Fourth Quarter5.592.91Third Quarter3.992.67Second Quarter4.063.07First Quarter5.152.832016Fourth Quarter6.594.20Third Quarter10.201.62Second Quarter3.101.97First Quarter3.602.12Monthly Highs and Lows (for the most recent six months)September 20188.006.41August 20187.706.63July 20187.506.30June 20188.827.55May 20187.805.92April 20187.454.25*The Company effected a 1for10 reverse stock split of its ordinary shares on November 6, 2012 (the “Reverse Split”). The ratio between each AmericanDepositary Share (“ADS”) and its underlying ordinary share postReverse Split remains the same, namely, one ADR remains to represent one ordinary sharepost the Reverse Split. The price listed here after November 6, 2012 reflected the effect from the Reverse Split.B. PLAN OF DISTRIBUTION.Not Applicable.C. MARKETS.Our ordinary shares are not currently listed on any trading market. Our ADSs were voluntarily delisted from the NASDAQ Capital Market on September 19,2018. We have applied to NASDAQ for the listing of our ordinary shares on the NASDAQ Capital Market and received an approval for listing of Ordinary Shares onAugust 6, 2018, and as of the date of this transition report, that application and approval are currently under review.47D. SELLING SHAREHOLDERS.Not applicable.E. DILUTION.Not applicable.F. EXPENSES OF THE ISSUE.Not applicable.ITEM 10. ADDITIONAL INFORMATION.A. SHARE CAPITALNot applicable.B. MEMORANDUM AND ARTICLES OF ASSOCIATIONWe are a British Virgin Islands company incorporated with limited liability and our affairs are governed by the provisions of our memorandum of associationand articles of association, as amended and restated from time to time, and by the provisions of applicable British Virgin Islands law.Our memorandum of association and articles of association authorize the issuance of up to 251,000,000 shares, which are designated into (i) 250,000,000 ofordinary shares of the Company (“Ordinary Shares”), and (ii) 1,000,000 preferred shares of the Company (“Preferred Shares”), in each case with the rights,preferences and privileges as set out in the memorandum and articles of association of the Company.Please see below for a description of our ADSs under “Item 12. Description of Securities Other Than Equity Securities – D. American Depository Shares.”The following is a summary of the material provisions of our ordinary shares and our memorandum of association and articles of association.Ordinary SharesAll of our issued and outstanding ordinary shares are fully paid and nonassessable. Holders of our ordinary shares who are nonresidents of the BritishVirgin Islands may freely hold and vote their shares.Subject to the memorandum and articles of association (and, for greater clarity, without prejudice to any special rights conferred thereby on the holders ofany other shares), an Ordinary Share of the Company confers on the holder:(a)the right to one vote per Ordinary Share at a meeting of the members or on any resolution of members;(b)the right to an equal share in any distribution paid by the Company; and(c)the right to an equal share in the distribution of the surplus assets of the Company on a winding up;48Subject to the memorandum and articles of association (and, for greater clarity, without prejudice to any special rights conferred thereby on the holders ofany other shares), a Preferred Share of the Company confers on the holder:(a)the right to 399 votes per Preferred Share at a meeting of the members or on any resolution of members;(b)the right to an equal share in any distribution paid by the Company;(c)the right to an equal share in the distribution of the surplus assets of the Company on a winding up;(d)be freely transferable, in whole or in part, by Mr. Xuesong Song to any third party through one or more Private Transactions, subject toApplicable Law; and(e)be freely transferable, in whole or in part, by Mr. Xuesong Song to any third party through one or more Public Transactions, subject to ApplicableLaw and Automatic Conversion of such Preferred Share(s) into Ordinary Share(s).Each Preferred Share shall be automatically converted at any time after issue and without the payment of any additional sum into an equal number of fullypaid Ordinary Shares upon the conclusion of any transfer by Mr. Xuesong Song to any third party through one or more Public Transactions.Limitation on Liability and Indemnification MattersUnder British Virgin Islands law, each of our directors and officers, in performing his or her functions, is required to act honestly and in good faith with aview to our best interests and exercise the care, diligence and skill that a reasonably prudent person would exercise in comparable circumstances. Our memorandumof association and articles of association provide that, to the fullest extent permitted by British Virgin Islands law or any other applicable laws, our directors will notbe personally liable to us or our shareholders for any acts or omissions in the performance of their duties. Such limitation of liability does not affect the availabilityof equitable remedies such as injunctive relief or rescission. These provisions will not limit the liability of directors under United States federal securities laws.We may indemnify any of our directors or anyone serving at our request as a director of another entity against all expenses, including legal fees, andagainst all judgments, fines and amounts paid in settlement and reasonably incurred in connection with legal, administrative or investigative proceedings. We mayonly indemnify a director if he or she acted honestly and in good faith with the view to our best interests and, in the case of criminal proceedings, the director hadno reasonable cause to believe that his or her conduct was unlawful. The decision of our board of directors as to whether the director acted honestly and in goodfaith with a view to our best interests and as to whether the director had no reasonable cause to believe that his or her conduct was unlawful, is in the absence offraud sufficient for the purposes of indemnification, unless a question of law is involved. The termination of any proceedings by any judgment, order, settlement,conviction or the entry of no plea does not, by itself, create a presumption that a director did not act honestly and in good faith and with a view to our best interestsor that the director had reasonable cause to believe that his or her conduct was unlawful. If a director to be indemnified has been successful in defense of anyproceedings referred to above, the director is entitled to be indemnified against all expenses, including legal fees, and against all judgments, fines and amounts paidin settlement and reasonably incurred by the director or officer in connection with the proceedings.We may purchase and maintain insurance in relation to any of our directors or officers against any liability asserted against the directors or officers andincurred by the directors or officers in that capacity, whether or not we have or would have had the power to indemnify the directors or officers against the liabilityas provided in our memorandum of association and articles of association.Insofar as indemnification for liabilities arising under the Securities Act may be permitted for our directors or officers under the foregoing provisions, wehave been informed that in the opinion of the Securities and Exchange Commission, such indemnification is against public policy as expressed in the Securities Actand is therefore unenforceable as a matter of United States law.49Differences in Corporate LawWe were incorporated under, and are governed by, the laws of the British Virgin Islands. The corporate statutes of the State of Delaware and the BritishVirgin Islands are similar, and the flexibility available under British Virgin Islands law has enabled us to adopt memorandum of association and articles of associationthat will provide shareholders with rights that do not vary in any material respect from those they would enjoy if we were incorporated under the Delaware GeneralCorporation Law, or Delaware corporate law. Set forth below is a summary of some of the differences between provisions of the BVI Act applicable to us and thelaws application to companies incorporated in Delaware and their shareholders.Director’s Fiduciary DutiesUnder Delaware corporate law, a director of a Delaware corporation has a fiduciary duty to the corporation and its stockholders. This duty has twocomponents: the duty of care and the duty of loyalty. The duty of care requires that a director act in good faith, with the care that an ordinarily prudent personwould exercise under similar circumstances. Under this duty, a director must inform himself of, and disclose to stockholders, all material information reasonablyavailable regarding a significant transaction. The duty of loyalty requires that a director act in a manner he reasonably believes to be in the best interests of thecorporation. He must not use his corporate position for personal gain or advantage. This duty prohibits selfdealing by a director and mandates that the bestinterest of the corporation and its stockholders take precedence over any interest possessed by a director, officer or controlling stockholder and not shared by thestockholders generally. In general, actions of a director are presumed to have been made on an informed basis, in good faith and in the honest belief that the actiontaken was in the best interests of the corporation. However, this presumption may be rebutted by evidence of a breach of one of the fiduciary duties. Should suchevidence be presented concerning a transaction by a director, a director must prove the procedural fairness of the transaction, and that the transaction was of fairvalue to the corporation.British Virgin Islands law provides that every director of a British Virgin Islands company in exercising his powers or performing his duties shall acthonestly and in good faith and in what the director believes to be in the best interests of the company. Additionally, the director shall exercise the care, diligence andskill that a reasonable director would exercise in the same circumstances taking into account the nature of the company, the nature of the decision and the positionof the director and his responsibilities. In addition, British Virgin Islands law provides that a director shall exercise his powers as a director for a proper purpose andshall not act, or agree to the company acting, in a manner that contravenes British Virgin Islands law or the memorandum association or articles of association of thecompany.Amendment of Governing DocumentsUnder Delaware corporate law, with very limited exceptions, a vote of the stockholders is required to amend the certificate of incorporation. Under BritishVirgin Islands law and our memorandum of association and articles of association, (i) our shareholders may amend our memorandum of association and articles ofassociation by a resolution of shareholders, or (ii) our board of directors may amend our memorandum of association and articles of association by a resolution ofdirectors without a requirement for a resolution of shareholders so long as the amendment does not:●restrict the rights of the shareholders to amend the memorandum of association and articles of association;●change the percentage of shareholders required to pass a resolution of shareholders to amend the memorandum of association and articles ofassociation;●amend the memorandum of association and articles of association in circumstances where the memorandum of association and articles ofassociation cannot be amended by the shareholders; or●amend the provisions of memorandum of association or the articles of association pertaining to “rights attaching to shares,” “rights not varied bythe issue of the shares pari passu,” “variation of rights” and “amendment of memorandum and articles”.50Written Consent of DirectorsUnder Delaware corporate law, directors may act by written consent only on the basis of a unanimous vote. Under British Virgin Islands law, directors’consents need only a majority of directors signing to take effect.Written Consent of ShareholdersUnder Delaware corporate law, unless otherwise provided in the certificate of incorporation, any action to be taken at any annual or special meeting ofstockholders of a corporation, may be taken by written consent of the holders of outstanding stock having not less than the minimum number of votes that wouldbe necessary to take such action at a meeting. As permitted by British Virgin Islands law, shareholders’ consents need only a majority of shareholders signing totake effect. Our memorandum of association and articles of association provide that shareholders may approve corporate matters by way of a resolution consentedto at a meeting of shareholders or in writing by a majority of shareholders entitled to vote thereon.Shareholder ProposalsUnder Delaware corporate law, a shareholder has the right to put any proposal before the annual meeting of shareholders, provided it complies with thenotice provisions in the governing documents. A special meeting may be called by the board of directors or any other person authorized to do so in the governingdocuments, but shareholders may be precluded from calling special meetings. British Virgin Islands law and our memorandum of association and articles ofassociation provide that our directors shall call a meeting of the shareholders if requested in writing to do so by shareholders entitled to exercise at least 30% of thevoting rights in respect of the matter for which the meeting is requested.Sale of AssetsUnder Delaware corporate law, a vote of the stockholders is required to approve the sale of assets only when all or substantially all assets are being sold. Inthe British Virgin Islands, shareholder approval is required when more than 50% of the company’s total assets by value are being disposed of or sold.Dissolution; Winding UpUnder Delaware corporate law, unless the board of directors approves the proposal to dissolve, dissolution must be approved by shareholders holding100% of the total voting power of the corporation. Only if the dissolution is initiated by the board of directors may it be approved by a simple majority of thecorporation’s outstanding shares. Delaware corporate law allows a Delaware corporation to include in its certificate of incorporation a supermajority votingrequirement in connection with dissolutions initiated by the board. As permitted by British Virgin Islands law and our memorandum of association and articles ofassociation, we may be voluntarily liquidated under Part XII of the BVI Act by resolution of directors and resolution of shareholders if we have no liabilities and weare able to pay our debts as they fall due.Redemption of SharesUnder Delaware corporate law, any stock may be made subject to redemption by the corporation at its option or at the option of the holders of such stockprovided there remains outstanding shares with full voting power. Such stock may be made redeemable for cash, property or rights, as specified in the certificate ofincorporation or in the resolution of the board of directors providing for the issue of such stock. As permitted by British Virgin Islands law, and our memorandum ofassociation and articles of association, shares may be repurchased, redeemed or otherwise acquired by us. Our directors must determine that immediately followingthe redemption or repurchase we will be able to satisfy our debts as they fall due and the value of our assets exceeds our liabilities.51Variation of Rights of SharesUnder Delaware corporate law, a corporation may vary the rights of a class of shares with the approval of a majority of the outstanding shares of suchclass, unless the certificate of incorporation provides otherwise. As permitted by British Virgin Islands law, and our memorandum of association and articles ofassociation, if our share capital is divided into more than one class of shares, we may vary the rights attached to any class only with the consent in writing ofholders of not less than threefourths of the issued shares of that class and holders of not less than threefourths of the issued shares of any other class of shareswhich may be affected by the variation.Removal of DirectorsUnder Delaware corporate law, a director of a corporation with a classified board may be removed only for cause with the approval of a majority of theoutstanding shares entitled to vote, unless the certificate provides otherwise. As permitted by British Virgin Islands law and our memorandum of association andarticles of association, directors may be removed by resolution of directors or resolution of shareholders.MergersUnder the BVI Act, two or more companies may merge or consolidate in accordance with the statutory provisions. A merger means the merging of two ormore constituent companies into one of the constituent companies, and a consolidation means the uniting of two or more constituent companies into a newcompany. In order to merger or consolidate, the directors of each constituent company must approve a written plan of merger or consolidation which must beauthorized by a resolution of shareholders.Shareholders not otherwise entitled to vote on the merger or consolidation may still acquire the right to vote if the plan of merger or consolidation containsany provision which, if proposed as an amendment to the memorandum association or articles of association, would entitle them to vote as a class or series on theproposed amendment. In any event, all shareholders must be given a copy of the plan of merger or consolidation irrespective of whether they are entitled to vote atthe meeting or consent to the written resolution to approve the plan of merger or consolidation.Inspection of Books and RecordsUnder Delaware corporate law, any shareholder of a corporation may for any proper purpose inspect or make copies of the corporation’s stock ledger, list ofshareholders and other books and records. Holders of our shares have no general right under British Virgin Islands law to inspect or obtain copies of our list ofshareholders or our corporate records. However, we will provide holders of our shares with annual audited financial statements. See “Where You Can FindAdditional Information.”Conflict of InterestThe BVI Act provides that a director shall, after becoming aware that he is interested in a transaction entered into or to be entered into by the company,disclose that interest to the board of directors of the company. The failure of a director to disclose that interest does not affect the validity of a transaction enteredinto by the director or the company, so long as the director’s interest was disclosed to the board prior to the company’s entry into the transaction or was notrequired to be disclosed (for example where the transaction is between the company and the director himself or is otherwise in the ordinary course of business andon usual terms and conditions). As permitted by British Virgin Islands law and our memorandum of association and articles of association, a director interested in aparticular transaction may vote on it, attend meetings at which it is considered, and sign documents on our behalf which relate to the transaction.52Transactions with Interested ShareholdersDelaware corporate law contains a business combination statute applicable to Delaware public corporations whereby, unless the corporation hasspecifically elected not to be governed by such statute by amendment to its certificate of incorporation, it is prohibited from engaging in certain businesscombinations with an “interested shareholder” for three years following the date that such person becomes an interested shareholder. An interested shareholdergenerally is a person or group who or that owns or owned 15% or more of the target’s outstanding voting stock within the past three years. This has the effect oflimiting the ability of a potential acquirer to make a twotiered bid for the target in which all shareholders would not be treated equally. The statute does not apply if,among other things, prior to the date on which such shareholder becomes an interested shareholder, the board of directors approves either the businesscombination or the transaction that resulted in the person becoming an interested shareholder. This encourages any potential acquirer of a Delaware publiccorporation to negotiate the terms of any acquisition transaction with the target’s board of directors.British Virgin Islands law has no comparable provision. As a result, we cannot avail ourselves of the types of protections afforded by the Delawarebusiness combination statute. However, although British Virgin Islands law does not regulate transactions between a company and its significant shareholders, itdoes provide that such transactions must be entered into bona fide in the best interests of the company and not with the effect of constituting a fraud on theminority shareholders.Independent DirectorsThere are no provisions under Delaware corporate law or under the BVI Act that require a majority of our directors to be independent.Cumulative VotingUnder Delaware corporate law, cumulative voting for elections of directors is not permitted unless the company’s certificate of incorporation specificallyprovides for it. Cumulative voting potentially facilitates the representation of minority shareholders on a board of directors since it permits the minority shareholderto cast all the votes to which the shareholder is entitled on a single director, which increases the shareholder’s voting power with respect to electing such director.There are no prohibitions to cumulative voting under the laws of the British Virgin Islands, but our memorandum of association and articles of association do notprovide for cumulative votingAntitakeover Provisions in Our Memorandum of association and articles of associationSome provisions of our memorandum of association and articles of association may discourage, delay or prevent a change in control of our company ormanagement that shareholders may consider favorable, including provisions that authorize our board of directors to issue preference shares in one or more seriesand to designate the price, rights, preferences, privileges and restrictions of such preference shares.C. MATERIAL CONTRACTS.On January 25, 2018, the Company executed an Asset Exchange Agreement (“AEA”) with C Media Limited, a corporation organized under the laws of theCayman Islands (“C Media”), whereby the Company agreed to purchase all the capital stock and equity interests of LK Technology Ltd, together with its whollyowned subsidiaries MMB Limited and Mobile Media (China) Limited and all respective subsidiaries from C Media in exchange for (i) 185,412,599 ordinary shares ofthe Company, par value $0.01 per share (“Ordinary Shares”), (ii) 1,000,000 preferred shares of Kingtone (“Preferred Shares”) and (iii) all issued and outstandingcapital stock or equity interests of the Company’s subsidiary, Topsky InfoTech Holdings Pte Ltd., and its whollyowned subsidiary Xi’an Softech Co., Ltd.,including all entities effectively controlled by Xi’an Softech Co., Ltd. through contractual arrangements and variable business entities.To consummate the contemplated transactions described above, the Company obtained shareholder consent at a special meeting held on May 20, 2018, (i)to authorize 1,000,000 Preferred Shares, (ii) to authorize additional Ordinary Shares so that total authorized Ordinary Shares is equal to 250,000,000 shares, (iii) to listsuch Ordinary Shares on NASDAQ, and (iv) to approve the transactions contemplated in the Asset Exchange Agreement. Additionally, NASDAQ needed toapprove the contemplated transactions prior to consummation thereof. C Media had the right to terminate the AEA if the closing had not occurred (other thanthrough the failure of C Media to comply fully with its obligations under the AEA) on or before July 31, 2018. The transactions contemplated by the AEA wereconsummated on August 17, 2018.53On January 25, 2018, five shareholders of the Company including its largest shareholder and its Chief Executive Officer executed a Securities PurchaseAgreement, whereby such shareholders agreed to sell a total of 617,988 Ordinary Shares and 282,694 American Depository Shares of the Company to Redstone YYLManagement Limited, a company incorporated in the British Virgin Islands, in exchange for an aggregate purchase price of $1,897,860.09.On August 25, 2018, LK Technology entered into a Stock Purchase Agreement (the “Agreement”) with the shareholders (“Shareholders”) of SuperengineHoldings Limited, a limited liability company organized under the laws of the British Virgin Islands (the “Superengine”), pursuant to which LK Technology acquiredall of the issued and outstanding capital stock of Superengine for an aggregate purchase price of US$60 million (the “Purchase Price”), which are paid by theissuance of our Ordinary Shares in an amount equal to the quotient of (x) the Purchase Price divided by (y) the average of the closing prices of the Ordinary Shareson the NASDAQ Capital Market over the 12 months period preceding July 31, 2018. We are a party to the Agreement in connection with the issuance of theOrdinary Shares and certain other limited purposes.D. EXCHANGE CONTROLS.This section sets forth a summary of the most significant regulations or requirements that affect our business activities in China or our shareholders’ rightto receive dividends and other distributions from us.Regulations on Internet Content ProvidersThe Administrative Measures on Internet Information Services, or the Internet Content Measures, which was promulgated by the State Council onSeptember 25, 2000 and amended on January 8, 2011, set out guidelines on the provision of internet information services. The Internet Content Measures specifiesthat internet information services regarding news, publications, education, medical and health care, pharmacy and medical appliances, among other things, arerequired to be examined, approved and regulated by the relevant authorities. Internet information providers are prohibited from providing services beyond thoseincluded in the scope of their licenses or filings. Furthermore, the Internet Content Measures specifies a list of prohibited content. Internet information providers areprohibited from producing, copying, publishing or distributing information that is humiliating or defamatory to others or that infringes the legal rights of others.Internet information providers that violate such prohibition may face criminal charges or administrative sanctions. Internet information providers must monitor andcontrol the information posted on their websites. If any prohibited content is found, they must remove the content immediately, keep a record of such content andreport to the relevant authorities.The Internet Content Measures classifies internet information services into commercial internet information services and noncommercial internetinformation services. Commercial internet information services refer to services that provide information or services to internet users with charge. A provider ofcommercial internet information services must obtain an ICP License.Regulations on Internet Audiovideo Program ServicesOn December 20, 2007, the MII and the State Administration of Press, Publication, Radio, Film and Television, or the SAPPRFT, jointly issued theAdministrative Provisions for the Internet AudioVideo Program Service, or the Audiovideo Program Provisions, which came into effect on January 31, 2008 andwas amended on August 28, 2015. The Audiovideo Program Provisions defines “internet audiovideo program services” as producing, editing and integrating ofaudiovideo programs, supplying audiovideo programs to the public via the internet, and providing audiovideo programs uploading and transmission services to athird party. Entities providing internet audiovideo programs services must obtain an internet audiovideo program transmission license. Applicants for such licensesshall be stateowned or statecontrolled entities unless an internet audiovideo program transmission license has been obtained prior to the effectiveness of theAudiovideo Program Provisions in accordance with the thenineffect laws and regulations. In addition, foreigninvested enterprises are not allowed to engage inthe abovementioned services. According to the Audiovideo Program Provisions and other relevant laws and regulations, audiovideo programs provided by theentities supplying Internet audiovideo program services shall not contain any illegal content or other content prohibited by the laws and regulations, such as anycontent against the basic principles in the PRC Constitution, any content that damages the sovereignty of the country or national security, and any content thatdisturbs social order or undermine social stability. An audiovideo program that has already been broadcast shall be retained in full for at least 60 days. Movies,television programs and other media content used as Internet audiovideo programs shall comply with relevant administrative regulations on programs broadcaststhrough radio, movie and television channels. Entities providing services related to Internet audiovideo programs shall immediately delete the audiovideoprograms violating laws and regulations, keep relevant records, report relevant authorities and implement other regulatory requirements.54The Categories of the Internet AudioVideo Program Services, or the Audiovideo Program Categories, promulgated by SAPPRFT on March 10, 2017,classifies internet audio/video programs into four categories: (I) Category I internet audio/video program service, which is carried out with a form of radio station ortelevision station; (II) Category II internet audio/video program service, including (a) rebroadcasting service of current political news audio/video programs; (b)hosting, interviewing, reporting and commenting service of arts, entertainment, technology, finance and economics, sports, education and other specializedaudio/video programs; (c) producing (interviewing not included) and broadcasting service of arts, entertainment, technology, finance and economics, sports,education and other specialized audio/video programs; (d) producing and broadcasting service of internet films/dramas; (e) aggregating and broadcasting service offilms, television dramas and cartoons; (f) aggregating and broadcasting service of arts, entertainment, technology, finance and economics, sports, education andother specialized audio/video programs; and (g) live audio/video broadcasting service of cultural activities of common social organizations, sport events or otherorganization activities; and (III) Category III internet audio/video program service, including (a) aggregating service of online audio/video contents, and (b) rebroadcasting service of the audio/video programs uploaded by internet users; and (IV) Category III internet audio/video program service, including (a) rebroadcasting of the radio/television program channels; and (b) rebroadcasting of internet audio/video program channels.On May 27, 2016, the SAPPRFT issued the Notice on Relevant Issues concerning Implementing the Approval Works of Upgrading Mobile Internet AudioVideo Program Service, or the Mobile AudioVideo Program Notice. The Mobile AudioVideo Program Notice provides that the mobile Internet audiovideo programservices shall be deemed Internet audiovideo program service. Entities which have obtained the approvals to provide the Internet audiovideo program servicesmay use mobile WAP websites or mobile applications to provide audiovideo program services. Entities with regulatory approvals may operate mobile applicationsto provide the audiovideo program services The types of the programs shall be within the permitted scope as provided in the licenses and such mobile applicationsshall be filed with the SAPPRFT.Regulations on Production and Operation of Radio/Television ProgramsOn July 19, 2004, the SAPPRFT promulgated the Administrative Measures on the Production and Operation of Radio and Television Programs, or the Radioand Television Program Production Measures, which came into effect on August 20, 2004 and was amended on August 28, 2015. The Radio and Television ProgramProduction Measures provides that any business that produces or operates radio or television programs must first obtain a Radio and Television ProgramProduction and Operation Permit. Entities holding such permits shall conduct their business within the permitted scope as provided in their permits. In addition,foreigninvested enterprises are not allowed to engage in the abovementioned services.Regulations on Online Advertising ServicesOn April 24, 2015, the Standing Committee of the National People’s Congress enacted the Advertising Law of the People’s Republic of China, or the NewAdvertising Law, effective on September 1, 2015. The New Advertising Law increases the potential legal liability of advertising services providers and strengthensregulations of false advertising. On July 4, 2016, the State Administration for Industry and Commerce, or the SAIC, issued the Interim Measures of theAdministration of Online Advertising, or the SAIC Interim Measures, effective on September 1, 2016. The New Advertising Law and the SAIC Interim Measuresrequire that online advertisements may not affect users’ normal internet use and internet popup ads must display a “close” sign prominently and ensure onekeyclosing of the popup windows. The SAIC Interim Measures provides that all online advertisements must be marked “Advertisement” so that viewers can easilyidentify them as such. Moreover, the SAIC Interim Measures treats paid search results as advertisements that are subject to PRC advertisement laws, and requiresthat paid search results be conspicuously identified on search result pages as advertisements. The New Advertising Law and SAIC Interim Measures require us toconduct more stringent examination and monitoring of our advertisers and the content of their advertisements.55Regulations on Online GamesIn September 2009, the GAPP (currently known as the SAPPRFT), together with the National Copyright Administration, and the National Office ofCombating Pornography and Illegal Publications jointly issued the Notice on Further Strengthening on the Administration of Preexamination and Approval ofOnline Game and the Examination and Approval of Imported Online Game, or the Circular 13. The Circular 13 states that foreign investors are not permitted to investin online game operating businesses in the PRC via wholly foreignowned entities, Sinoforeign equity joint ventures or cooperative joint ventures or to exercisecontrol over or participate in the operation of domestic online game businesses through indirect means, such as other joint venture companies or contractual ortechnical arrangements. If the our contractual arrangements were deemed under the Circular 13 to be an “indirect means” for foreign investors to exercise controlover or participate in the operation of a domestic online game business, our contractual arrangements might be challenged by the SAPPRFT. We are not aware ofany online game companies which use the same or similar contractual arrangements having been challenged by the SAPPRFT as using those contractualarrangements as an “indirect means” for foreign investors to exercise control over or participate in the operation of a domestic online game business or having beenpenalized or ordered to terminate operations since the Circular 13 became effective. However it is unclear whether and how the Circular 13 might be interpreted orimplemented in the future. See “Risk Factors—If the PRC government finds that the agreements that establish the structure for operating certain of our operations inChina do not comply with PRC regulations relating to the relevant industries, or if these regulations or the interpretation of existing regulations change in the future,we could be subject to severe penalties or be forced to relinquish our interests in those operations.”The Interim Measures for the Administration of Online Games, or the Online Game Measures, issued by the MOC, which took effect on August 1, 2010 andamended on December 15, 2017, regulates a broad range of activities related to the online games business, including the development, production and operation ofonline games, the issuance of virtual currencies used for online games, and the provision of virtual currency trading services. The Online Game Measures providesthat any entity that is engaged in online game operations must obtain an Network Cultural Business Permit, and require the content of an imported online game to beexamined and approved by the MOC prior to the game’s launch and require a domestic online game to be filed with the MOC within 30 days after its launch. TheNotice of the Ministry of Culture on the Implementation of the Interim Measures for the Administration of Online Games, which was issued by the MOC on July 29,2010 to implement the Online Game Measures, (i) requires online game operators to protect the interests of online game users and specifies that certain terms thatmust be included in service agreements between online game operators and the users of their online games, (ii) requires content review of imported online gamesand filing procedures for domestic online games, (iii) emphasizes the protection of minors playing online games, and (iv) requests online game operators to promoterealname registration by their game users.Regulations on Information Security, Censorship and PrivacyThe Standing Committee of the National People’s Congress, China’s national legislative body, enacted the Decisions on the Maintenance of InternetSecurity on December 28, 2000 that may subject persons to criminal liabilities in China for any attempt to use the internet to: (i) gain improper entry to a computer orsystem of strategic importance; (ii) disseminate politically disruptive information; (iii) leak state secrets; (iv) spread false commercial information or (v) infringe uponintellectual property rights. In 1997, the Ministry of Public Security issued the Administration Measures on the Security Protection of Computer InformationNetwork with International Connections which prohibits using the internet to leak state secrets or to spread socially destabilizing materials. If an ICP license holderviolates these measures, the PRC government may revoke its ICP license and shut down its websites. Pursuant to the Ninth Amendment to the Criminal Law issuedby the Standing Committee of the National People’s Congress on August 29, 2015, effective on November 1, 2015, any ICP provider that fails to fulfill the obligationsrelated to internet information security as required by applicable laws and refuses to take corrective measures, will be subject to criminal liability for (i) any largescale dissemination of illegal information; (ii) any severe effect due to the leakage of users’ personal information; (iii) any serious loss of evidence of criminalactivities; or (iv) other severe situations, and any individual or entity that (i) sells or provides personal information to others unlawfully or (ii) steals or illegallyobtains any personal information will be subject to criminal liability in severe situations.56The Cybersecurity Law of the PRC, or the Cybersecurity Law, which was promulgated on November 7, 2016 by the Standing Committee of the NationalPeople’s Congress and came into effect on June 1, 2017, provides that network operators shall meet their cyber security obligations and shall take technicalmeasures and other necessary measures to protect the safety and stability of their networks. Under the Cybersecurity Law, network operators are subject to varioussecurity protectionrelated obligations, including: (i) network operators shall comply with certain obligations regarding maintenance of the security of internetsystems; (ii) network operators shall verify users’ identities before signing agreements or providing certain services such as information publishing or realtimecommunication services; (iii) when collecting or using personal information, network operators shall clearly indicate the purposes, methods and scope of theinformation collection, the use of information collection, and obtain the consent of those from whom the information is collected; (iv) network operators shall strictlypreserve the privacy of user information they collect, and establish and maintain systems to protect user privacy; (v) network operators shall strengthenmanagement of information published by users, and when they discover information prohibited by laws and regulations from publication or dissemination, theyshall immediately stop dissemination of that information, including taking measures such as deleting the information, preventing the information from spreading,saving relevant records, and reporting to the relevant governmental agencies.Regulations on Intellectual Property RightsRegulations on CopyrightThe Copyright Law of the PRC, or the Copyright Law, which took effect on June 1, 1991 and was amended in 2001 and in 2010, provides that Chinesecitizens, legal persons, or other organizations shall, whether published or not, own copyright in their copyrightable works, which include, among others, works ofliterature, art, natural science, social science, engineering technology and computer software. Copyright owners enjoy certain legal rights, including right ofpublication, right of authorship and right of reproduction. The Copyright Law as revised in 2010 extends copyright protection to Internet activities, productsdisseminated over the Internet and software products. In addition, Copyright Law provides for a voluntary registration system administered by the China CopyrightProtection Center, or the CPCC. According to the Copyright Law, an infringer of the copyrights shall be subject to various civil liabilities, which include ceasinginfringement activities, apologizing to the copyright owners and compensating the loss of copyright owner. Infringers of copyright may also subject to fines and/oradministrative or criminal liabilities in severe situations.The Computer Software Copyright Registration Measures, or the Software Copyright Measures, promulgated by the State Council on December 20, 2001and amended on January 30, 2013, regulates registrations of software copyright, exclusive licensing contracts for software copyright and assignment agreements.The National Copyright Administration, or the NCA administers software copyright registration and the CPCC, is designated as the software registration authority.The CPCC shall grant registration certificates to the Computer Software Copyrights applicants which meet the requirements of both the Software CopyrightMeasures and the Computer Software Protection Regulations (Revised in 2013).The Provisions of the Supreme People’s Court on Certain Issues Related to the Application of Law in the Trial of Civil Cases Involving Disputes onInfringement of the Information Network Dissemination Rights specifies that disseminating works, performances or audiovideo products by the internet users orthe internet service providers via the internet without the permission of the copyright owners shall be deemed to have infringed the right of dissemination of thecopyright owner.57The Measures for Administrative Protection of Copyright Related to Internet, which was jointly promulgated by the NCA and the MIIT on April 29, 2005and became effective on May 30, 2005, provides that upon receipt of an infringement notice from a legitimate copyright holder, an ICP operator must take remedialactions immediately by removing or disabling access to the infringing content. If an ICP operator knowingly transmits infringing content or fails to take remedialactions after receipt of a notice of infringement that harms public interest, the ICP operator could be subject to administrative penalties, including an order to ceaseinfringing activities, confiscation by the authorities of all income derived from the infringement activities, or payment of fines.On May 18, 2006, the State Council promulgated the Regulations on the Protection of the Right to Network Dissemination of Information (as amended in2013). Under these regulations, an owner of the network dissemination rights with respect to written works or audio or video recordings who believes thatinformation storage, search or link services provided by an Internet service provider infringe his or her rights may require that the Internet service provider delete, ordisconnect the links to, such works or recordings.Patent LawsAccording to the Patent Law of the PRC (Revised in 2008), the State Intellectual Property Office is responsible for administering patent law in the PRC. Thepatent administration departments of provincial, autonomous region or municipal governments are responsible for administering patent law within their respectivejurisdictions. The Chinese patent system adopts a firsttofile principle, which means that when more than one person file different patent applications for the sameinvention, only the person who files the application first is entitled to obtain a patent of the invention. To be patentable, an invention or a utility model must meetthree criteria: novelty, inventiveness and practicability. A patent is valid for twenty years in the case of an invention and ten years in the case of utility models anddesigns.Trademark LawsTrademarks are protected by the Trademark Law of the PRC (Revised in 2013) which was adopted in 1982 and subsequently amended in 1993, 2001 and 2013respectively as well as by the Implementation Regulations of the PRC Trademark Law adopted by the State Council in 2002 and as most recently amended on April29, 2014. The Trademark Office under the SAIC handles trademark registrations. The Trademark Office grants a tenyear term to registered trademarks and the termmay be renewed for another tenyear period upon request by the trademark owner. A trademark registrant may license its registered trademarks to another party byentering into trademark license agreements, which must be filed with the Trademark Office for its record. As with patents, the Trademark Law has adopted a firsttofile principle with respect to trademark registration. If a trademark applied for is identical or similar to another trademark which has already been registered or subjectto a preliminary examination and approval for use on the same or similar kinds of products or services, such trademark application may be rejected. Any personapplying for the registration of a trademark may not injure existing trademark rights first obtained by others, nor may any person register in advance a trademark thathas already been used by another party and has already gained a “sufficient degree of reputation” through such party’s use.Regulations on Domain NamesThe MIIT promulgated the Measures on Administration of Internet Domain Names, or the Domain Name Measures, on August 24, 2017, which took effecton November 1, 2017 and replaced the Administrative Measures on China Internet Domain Name promulgated by MII on November 5, 2004. According to theDomain Name Measures, the MIIT is in charge of the administration of PRC internet domain names. The domain name registration follows a firsttofile principle.Applicants for registration of domain names shall provide the true, accurate and complete information of their identities to domain name registration serviceinstitutions. The applicants will become the holder of such domain names upon the completion of the registration procedure.Relevant Regulations of the Hightech EnterpriseThe Ministry of Information Industry, the Ministry of Science and Technology and the State Tax Bureau collectively promulgated and issued the“Certifying Standard and Managing Measures for Hightech Enterprises” and “the Hightech Areas of Main National Support” on April 14, 2008 to certify the Hightech enterprise and encourage and support the development of the Chinese Hightech enterprises. Under the Hightech Enterprises Measures, the enterprise canenjoy the favorable tax policy when it is certified as a Hightech enterprise by the Ministry of Information Industry, the Ministry of Science and Technology and theState Tax Bureau or with its provincial branch according to the stipulated standard. The software and computer and network technology are recognized as the mainnational supported Hightech field. Kingtone Information is a Hightech enterprise and enjoys a favorable income tax rate of 15%.58Laws and Regulations of Intellectual Property RightsChina has adopted legislation governing intellectual property rights, including patents, copyrights and trademarks. China is a signatory to the maininternational conventions on intellectual property rights and became a member of the Agreement on Trade Related Aspects of Intellectual Property Rights upon itsaccession to the WTO in December 2001.PatentsThe “Patent Law of the People’s Republic of China” promulgated by the Standing Committee of the National People's Congress, adopted in 1985 andrevised in 1992, 2001 and 2008, protects registered patents. The State Intellectual Property Office of PRC handles granting patent rights, providing for a twentyyearpatent term for inventions and a tenyear patent term for utility models and designs. As we disclosed in Item 4, of this transition report on Form 20F, throughKingtone Information, we have been granted one invention patent “wireless video transmission system based on BREW platform” by the State Intellectual PropertyOffice (“SIPO”) of PRC on September 23, 2009 and therefore such invention is entitled to all the protections provided under the Patent Law for twenty years.Computer Software Copyright and AdministrationOn December 20, 2001, the State Council of PRC issued the “Regulation for Computer Software Protection of the People’s Republic of China” (the“Regulation for Computer Software Protection”) which became effective on January 1, 2002 to protect the interests of copyright owners, to promote the research andapplication and to encourage the development of the Chinese software industry. Under the Regulation for Computer Software Protection, natural persons, legalpersons or any other organizations shall have a copyright on the software developed by such persons no matter whether such software has been published. Theprotection period of software copyrights owned by the legal person or other organization is fifty years and expires on December 31 of the fiftieth year from the initialpublication date of such computer software. Currently, Kingtone Information has twelve registration certificates for software copyrights.TrademarksThe “Trademark Law of the People’s Republic of China” promulgated by the State Council of PRC, adopted in 1982 and revised in 1993 and 2001, protectsregistered trademarks. The Trademark Office under the Chinese State Administration for Industry and Commerce handles trademark registrations and grants a termof ten years to registered trademarks which are renewable for another ten years after the application to the Trademark Office by the owners of the trademarks.Trademark license agreements must be filed with the Trademark Office for record. China has a “firsttoregister” system that requires no evidence of prior use orownership. Kingtone Information has its registered trademarks as described in Item 4 of this transition report on Form 20F. Accordingly, such trademarks areentitled to the protection under the Trademark Law.Foreign Currency ExchangeOn August 29, 2008, the SAFE issued the Notice of the General Affairs Department of the State Administration of Foreign Exchange on the RelevantOperating Issues concerning the Improvement of the Administration of Payment and Settlement of Foreign Currency Capital of Foreignfunded Enterprises, orCircular 142. Pursuant to Circular 142, RMB converted from the foreign currencydenominated capital of a foreigninvested company may only be used for purposeswithin the business scope approved by the applicable governmental authority and may not be used for equity investments within the PRC unless specificallyprovided for otherwise. The use of such Renminbi capital may not be changed without SAFE’s approval and may not in any case be used to repay Renminbi loans ifthe proceeds of such loans have not been used.59See “Risk Factors — Risks Related to Doing Business in China — PRC regulation of loans and direct investment by offshore holding companies to PRCentities may delay or prevent us from using the proceeds of our initial public offering to make loans or additional capital contributions to our PRC operatingsubsidiaries, which could materially and adversely affect our liquidity and our ability to fund and expand our business”.Dividend DistributionWe are a British Virgin Islands holding company and substantially all of our operations are conducted through LK Technology. We rely on dividends andother distributions from our LK Technology and its subsidiaries to provide us with our cash flow and allow us to pay dividends on the shares underlying our ADSsand meet our other obligations. The principal regulations governing distribution of dividends paid by wholly foreignowned enterprises include:1.Wholly ForeignOwned Enterprise Law (1986), as amended; and2.Implementation Rules on Wholly ForeignOwned Enterprise Law (1990), as amended.Under these regulations, wholly foreignowned enterprises in China may pay dividends only out of their accumulated profits, if any, determined inaccordance with PRC accounting standards and regulations. In addition, wholly foreignowned enterprises in China are required to set aside at least 10% of theiraftertax profit based on PRC accounting standards each year to its general reserves until the accumulative amount of such reserves reach 50% of its registeredcapital. These reserves are not distributable as cash dividends. The board of directors of a FIE has the discretion to allocate a portion of its aftertax profits to staffwelfare and bonus funds, which may not be distributed to equity owners except in the event of liquidation.Regulation of Foreign Exchange in Certain Onshore and Offshore TransactionsIn October 2005, the SAFE issued the Notice on Issues Relating to the Administration of Foreign Exchange in Fundraising and Return InvestmentActivities of Domestic Residents Conducted via Offshore Special Purpose Companies, or SAFE Notice 75, which became effective as of November 1, 2005, and wasfurther supplemented by two implementation notices issued by the SAFE on November 24, 2005 and May 29, 2007, respectively. Under Circular 75, prior registrationwith the local SAFE branch is required for PRC residents to establish or to control an offshore company for the purposes of financing that offshore company withassets or equity interests in an onshore enterprise located in the PRC. An amendment to the registration or filing with the local SAFE branch by such PRC resident isalso required for the injection of equity interests or assets of an onshore enterprise in the offshore company or overseas funds raised by such offshore company, orany other material change with respect to the offshore company in connection with any increase or decrease of capital, transfer of shares, merger, division, equityinvestment, debt investment, or creation of any security interest over any assets located in the PRC.Under SAFE Notice 75, PRC residents are further required to repatriate into the PRC all of their dividends, profits or capital gains obtained from theirshareholdings in the offshore entity within 180 days of their receipt of such dividends, profits or capital gains. The registration and filing procedures under SAFENotice 75 are prerequisites for other approval and registration procedures necessary for capital inflow from the offshore entity, such as inbound investments orshareholders loans, or capital outflow to the offshore entity, such as the payment of profits or dividends, liquidating distributions, equity sale proceeds, or thereturn of funds upon a capital reduction. Therefore, failure to comply with such registration may subject us to certain restrictions on, including but not limited to, theincrease of the registered capital of our PRC subsidiary, making loans to our PRC subsidiary, and making distributions to us from our onshore companies.Regulations of Overseas Investments and ListingsOn August 8, 2006, six PRC regulatory agencies, including the MOFCOM, the State Assets Supervision and Administration Commission, the StateAdministration for Taxation, the State Administration for Industry and Commerce, the CSRC and the SAFE, jointly adopted the New M&A Rule, which becameeffective on September 8, 2006. This regulation, among other things, includes provisions that purport to require that an offshore SPV formed for purposes ofoverseas listing of equity interests in PRC companies and controlled directly or indirectly by PRC companies or individuals obtain the approval of the CSRC prior tothe listing and trading of such SPV’s securities on an overseas stock exchange.60On September 21, 2006, the CSRC published on its official website procedures regarding its approval of overseas listings by SPVs. The CSRC approvalprocedures require the filing of a number of documents with the CSRC and it would take several months to complete the approval process.The application of the New M&A Rule with respect to overseas listings of SPVs remains unclear with no consensus currently existing among the leadingPRC law firms regarding the scope of the applicability of the CSRC approval requirement.We believe that, based on our understanding of the current PRC laws, regulations and rules and the procedures announced on September 21, 2006, there isno requirement in this regulation that would require an application to be submitted to the MOFCOM or the CSRC for the approval of the listing and trading of ourADSs on the NASDAQ Capital Market.See “Risk Factors — Risks Related to Doing Business in China — If we were required to obtain the prior approval of the China Securities RegulatoryCommission, or CSRC, of the listing and trading of our ADSs on the NASDAQ Capital Market, we may face regulatory actions or other sanctions from the CSRC orother PRC regulatory agencies.”E. TAXATIONThe following discussion sets forth the material British Virgin Islands, PRC and U.S. federal income tax consequences of an investment in our ADSs andthe ordinary shares represented by our ADSs, sometimes referred to collectively as the “securities”. It is based upon laws and relevant interpretations thereof ineffect as of the date of this report, all of which are subject to change. This discussion does not deal with all possible tax consequences relating to an investment inthe securities, such as the tax consequences under state, local and other tax laws. As used in this discussion, “we,” “our” and “us” refers only to LuokungTechnology Ltd.British Virgin Islands TaxationUnder the law of the British Virgin Islands as currently in effect, a holder of the securities who is not a resident of the British Virgin Islands is not liable forBritish Virgin Islands tax on dividends paid with respect to the securities and all holders of the securities are not liable to the British Virgin Islands for tax on gainsrealized during that year on the sale or disposal of such ordinary shares. The British Virgin Islands does not impose a withholding tax on dividends paid by acompany incorporated or reregistered under the BVI Act.There are no capital gains, gift or inheritance taxes levied by the British Virgin Islands on companies incorporated under the BVI Act. In addition, shares ofcompanies incorporated under the BVI Act are not subject to transfer taxes, stamp duties or similar charges.There is no income tax treaty or convention currently in effect between the United States and the British Virgin Islands or between China and the BritishVirgin Islands.61People’s Republic of China TaxationIn 2007, the PRC National People’s Congress enacted the new Enterprise Income Tax Law (the “EIT Law”), which became effective on January 1, 2008. Thenew EIT Law imposes a single uniform income tax rate of 25% on all Chinese enterprises, including foreigninvested enterprises, and levies a withholding tax rate of10% on dividends payable by Chinese subsidiaries to their foreign shareholders unless any such foreign shareholders’ jurisdiction of incorporation has a tax treatywith China that provides for a different withholding agreement. Under the new EIT Law, enterprises established outside China but deemed to have a “de factomanagement body” within the country may be considered “resident enterprises” for Chinese tax purposes and, therefore, may be subject to an enterprise income taxrate of 25% on their worldwide income. Pursuant to the implementation rules of the new EIT Law, a “de facto management body” is defined as a body that hasmaterial and overall management control over the business, personnel, accounts and properties of the enterprise. Although substantially all members of ourmanagement are located in China, it is unclear whether Chinese tax authorities would require (or permit) us to be treated as PRC resident enterprises. If we aredeemed a Chinese tax resident enterprise, we may be subject to an enterprise income tax rate of 25% on our worldwide income, excluding dividends received directlyfrom another Chinese tax resident enterprise, as well as PRC enterprise income tax reporting obligations. If we are not deemed to be a Chinese tax resident enterprise,we may be subject to certain PRC withholding taxes. See “Risk Factors — Risks Related to Doing Business in China — Our holding company structure may limit thepayment of dividends.” As a result of such changes, our historical tax rates may not be indicative of our tax rates for future periods and the value of our ADSs orordinary shares may be adversely affected. If we are deemed a PRC resident enterprise and investors’ gain from the sales of the securities and dividends payable byus are deemed sourced from China, such gains and dividends payable by us may be subject to PRC tax. See “Risk Factors — Risks Related to Doing Business inChina — If we were deemed a “resident enterprise” by PRC tax authorities, we could be subject to tax on our global income at the rate of 25% under the New EITLaw and our nonPRC shareholders could be subject to certain PRC taxes.United States Federal Income TaxationGeneralThe following is a discussion of the material U.S. federal income tax consequences to an investor of purchasing, owning and disposing of our securities.This discussion does not address any aspects of U.S. federal gift or estate tax or the state, local or nonU.S. tax consequences of an investment in the securities.YOU SHOULD CONSULT YOUR OWN TAX ADVISORS CONCERNING THE U.S. FEDERAL, STATE, LOCAL AND NONU.S. TAX CONSEQUENCES OFPURCHASING, OWNING AND DISPOSING OF THE SECURITIES IN YOUR PARTICULAR SITUATION.This discussion applies only to those investors that purchase the securities in this offering and that hold the securities as capital assets within the meaningof section 1221 of the Internal Revenue Code of 1986, as amended (the “Code”). This section does not apply to holders that may be subject to special tax rules,including but not limited to:1.dealers in securities or currencies;2.traders in securities that elect to use a marktomarket method of accounting;3.banks, insurance companies or certain financial institutions;4.taxexempt organizations;5.governments or agencies or instrumentalities thereof;6.partnerships or other entities treated as partnerships or other passthrough entities for U.S. federal income tax purposes or persons holding thesecurities through such entities;7.regulated investment companies or real estate investment trusts;8.holders subject to the alternative minimum tax;9.holders that actually or constructively own 10% or more of the total combined voting power of all classes of our shares entitled to vote;10.holders that acquired the securities pursuant to the exercise of employee stock options, in connection with employee stock incentive plans orotherwise as compensation;11.holders that hold the securities as part of a straddle, hedging or conversion transaction; or12.holders whose functional currency is not the U.S. dollar.62This section is based on the Code, its legislative history, existing and proposed U.S. Treasury regulations, published rulings and other administrativeguidance of the U.S. Internal Revenue Service (the “IRS”) and court decisions, all as in effect on the date hereof. These laws are subject to change or differentinterpretation by the IRS or a court, possibly on a retroactive basis.We have not sought, and will not seek, a ruling from the IRS as to any U.S. federal income tax consequence described herein. The IRS may disagree withthe discussion herein, and its determination may be upheld by a court. Moreover, there can be no assurance that future legislation, regulation, administrative rulingsor court decisions will not adversely affect the accuracy of the statements in this discussion.The discussion below of the U.S. federal income tax consequences to “U.S. Holders” will apply to a beneficial owner of the securities that is for U.S. federalincome tax purposes:1.a citizen or resident of the United States;2.a corporation (or other entity treated as a corporation) that is created or organized (or treated as created or3.organized) under the laws of the United States, any state thereof or the District of Columbia;4.an estate whose income is subject to U.S. federal income tax regardless of its source; or5.a trust if (a) a U.S. court can exercise primary supervision over the trust’s administration and one or more U.S.6.persons are authorized to control all substantial decisions of the trust, or (b) if the trust has a valid election in effect under applicable U.S.Treasury regulations to be treated as a U.S. person.If a beneficial owner of the securities is not described as a U.S. Holder and is not an entity treated as a partnership or other passthrough entity for U.S.federal income tax purposes, such owner will be considered a “NonU.S. Holder.” The material U.S. federal income tax consequences applicable specifically to NonU.S. Holders are described below under the heading “Tax Consequences to NonU.S. Holders.”If a partnership (including for this purpose any entity treated as a partnership for U.S. tax purposes) is a beneficial owner of the securities, the U.S. taxtreatment of a partner in the partnership generally will depend on the status of the partner and the activities of the partnership. A holder of the securities that is apartnership or partners in such a partnership should consult their own tax advisors about the U.S. federal income tax consequences of holding and disposing of thesecurities.This discussion assumes that any distributions made (or deemed made) on the securities and any consideration received by a holder in consideration forthe sale or other disposition of the securities will be in U.S. dollars. This discussion also assumes that the representations contained in the Deposit Agreement aretrue and that the obligations in the Deposit Agreement and any related agreement will be complied with in accordance with their terms. Finally, this discussionassumes that each ADS will only represent ordinary shares in us, and will not represent any other type of security, such as a bond, cash or other property.63For U.S. federal income tax purposes, a holder of an ADS will be treated as the beneficial owner of the shares represented by such ADS and an exchange ofan ADS for ordinary shares will not be subject to U.S. federal income tax. The U.S. Treasury has expressed concerns that parties to whom ADSs are prereleased, orintermediaries in the chain of ownership between holders of ADSs and the issuer of the securities underlying the ADSs may be taking actions that are inconsistentwith the claiming of foreign tax credits by U.S. Holders of ADSs. Such actions would also be inconsistent with the claiming of the reduced rate of tax applicable todividends received by certain noncorporate U.S. Holders, including individual U.S. Holders, as described below under “Tax Consequences to U.S.Holders — Taxation of Distributions.” Accordingly, the availability of foreign tax credits or the reduced tax rate for dividends received by certain noncorporate U.S.Holders, including individual U.S. Holders, could be affected by actions taken by parties to whom the ADSs are released, or by future actions by the U.S. Treasury.Tax Consequences to U.S. HoldersTaxation of DistributionsSubject to the passive foreign investment company, or PFIC, rules discussed below, the gross amount of any cash distributions we make with respect to aU.S. Holder in respect of such U.S. Holder’s ADSs or shares will generally be treated as dividend income if the distributions are made from our current oraccumulated earnings and profits, calculated according to U.S. federal income tax principles. Cash dividends will generally be subject to U.S. federal income tax asordinary income on the day the U.S. Holder actually or constructively receives such income. With respect to noncorporate U.S. Holders for taxable years beginningbefore January 1, 2011, dividends may be taxed at the lower applicable longterm capital gains rate provided that (a) our ADSs or shares are readily tradable on anestablished securities market in the United States, or, in the event we are deemed to be a Chinese “resident enterprise” under the EIT Law (as described above under“People’s Republic of China Taxation”), we are eligible for the benefits of the income tax treaty between the United States and the PRC (the “U.S.PRC Tax Treaty”),(b) we are not a PFIC, as discussed below, for either the taxable year in which the dividend was paid or the preceding taxable year, and (c) certain holding periodrequirements are met. Under published IRS authority, ADSs are considered for purposes of clause (a) above to be readily tradable on an established securitiesmarket in the United States only if they are listed on certain exchanges, which presently include the NASDAQ Capital Market. U.S. Holders should consult their owntax advisors regarding the availability of the lower rate for any dividends paid with respect to our ADSs or shares.Dividends will not be eligible for the dividendsreceived deduction allowed to U.S. corporations in respect of dividends received from other U.S.corporations. Generally, if we distribute noncash property as a dividend (other than pro rata distributions of our shares) out of our current or accumulated earningsand profits (as determined for U.S. federal income tax purposes), a U.S. Holder generally will include in income an amount equal to the fair market value of theproperty, on the date that it is distributed.Distributions in excess of current and accumulated earnings and profits, as determined for U.S. federal income tax purposes, will be treated as a nontaxablereturn of capital to the extent of the U.S. Holder’s basis in its shares or ADSs and thereafter as capital gain. However, we do not plan on calculating our earnings andprofits in accordance with U.S. federal income tax principles. U.S. holders therefore should generally assume that any distributions paid by us will be treated asdividends for U.S. federal income tax purposes.If PRC taxes apply to dividends paid by us to a U.S. Holder (see “People’s Republic of China Taxation,” above), such taxes may be treated as foreign taxeseligible for credit against such holder’s U.S. federal income tax liability (subject to certain limitations), and a U.S. Holder may be entitled to certain benefits under theU.S.PRC Tax Treaty. The rules relating to the U.S. foreign tax credit are complex. U.S. Holders should consult their own tax advisors regarding the creditability ofany such PRC tax and their eligibility for the benefits of the U.S.PRC Tax Treaty.64Taxation of Dispositions of SharesSubject to the PFIC rules discussed below, a U.S. holder that sells or otherwise disposes of its shares will recognize capital gain or loss for U.S. federalincome tax purposes equal to the difference between the amount realized and such U.S. Holder’s tax basis in its shares. Prior to January 1, 2011, capital gains of anoncorporate U.S. holder are generally taxed at a maximum rate of 15% where the property is held for more than one year (and 20% thereafter). The ability to deductcapital losses is subject to limitations.If PRC taxes apply to any gain from the disposition of our shares by a U.S. Holder, such taxes may be treated as foreign taxes eligible for credit against suchholder’s U.S. federal income tax liability (subject to certain limitations), and a U.S. Holder may be entitled to certain benefits under the U.S.PRC Tax Treaty. U.S.Holders should consult their own tax advisors regarding the creditability of any such PRC tax and their eligibility for the benefits of the U.S.PRC Tax Treaty.Passive Foreign Investment CompanyWe do not expect to be a PFIC for U.S. federal income tax purposes for our current tax year or in the foreseeable future. The determination of whether or notwe are a PFIC in respect of any of our taxable years is a factual determination that cannot be made until the close of the applicable tax year and that is based on thetypes of income we earn and the value and composition of our assets (including goodwill), all of which are subject to change. Therefore, we can make no assurancesthat we will not be a PFIC in respect of our current taxable year or in the future.In general, we will be a PFIC in any taxable year if either:1.at least 75% of our gross income for the taxable year is passive income; or2.at least 50% of the value, determined on the basis of a quarterly average, of our assets is attributable to assets that produce or are held for theproduction of passive income.Passive income includes dividends, interest, royalties, rents (other than certain rents and royalties derived in the active conduct of a trade or business), theexcess of gains over losses from certain types of transactions in commodities, annuities and gains from assets that produce passive income. We will be treated asowning our proportionate share of the assets and earning our proportionate share of the income of any corporation in which we own, directly or indirectly, at least25% (by value) of the stock.If we are treated as a PFIC in any year during which a U.S. Holder owns the securities, and such U.S. Holder did not make a marktomarket election, asdescribed below, the U.S. Holder will be subject to special rules with respect to:1.any gain recognized by the U.S. Holder on the sale or other disposition of its shares; and any excess distribution that we make to the U.S. Holder(generally, the excess of the amount of any distributions to such U.S. Holder during a single taxable year of such U.S. Holder over 125% of theaverage annual distributions received by such U.S. Holder in respect of the shares during the three preceding taxable years of such U.S. Holder or,if shorter, such U.S. Holder holding period for the shares).Under these rules:2.the gain or excess distribution will be allocated ratably over the U.S. Holder’s holding period for the shares;3.the amount allocated to the U.S. Holder’s taxable year in which it realized the gain or excess distribution or to the period in the U.S. Holder’sholding period before the first day of our first taxable year in which we are a PFIC will be taxed as ordinary income;4.the amount allocated to other taxable years (or portions thereof) of the U.S. Holder and included in its holding period will be taxed at the highesttax rate in effect for that year; and5.the interest charge generally applicable to underpayments of tax will be imposed in respect of the tax attributable to each such other taxable yearof the U.S. Holder. 6.Special rules apply for calculating the amount of the foreign tax credit with respect to excess distributions by a PFIC.65Alternatively, if a U.S. Holder, at the close of its taxable year, owns ordinary shares in a PFIC that are treated as marketable stock, the U.S. Holder may makea marktomarket election with respect to such shares for such taxable year. Our shares will be “marketable” to the extent that they remain regularly traded on anational securities exchange, such as the NASDAQ Capital Market. If a U.S. Holder makes this election in a timely fashion, it will not be subject to the PFIC rulesdescribed above. Instead, in general, the U.S. Holder will include as ordinary income each year the excess, if any, of the fair market value of its shares at the end ofthe taxable year over its adjusted basis in its shares. Any ordinary income resulting from this election would generally be taxed at ordinary income tax rates andwould not be eligible for the reduced rate of tax applicable to qualified dividend income. The U.S. Holder will also be allowed to take an ordinary loss in respect ofthe excess, if any, of the adjusted basis of its shares over the fair market value at the end of the taxable year (but only to the extent of the net amount of previouslyincluded income as a result of the marktomarket election). The U.S. Holder’s basis in the shares will be adjusted to reflect any such income or loss amounts. U.S.Holders should consult their own tax advisor regarding potential advantages and disadvantages of making a marktomarket election with respect to their shares.Alternatively, a U.S. Holder of stock in a PFIC may avoid the PFIC tax consequences described above in respect to our or shares by making a timely“qualified electing fund” election to include in income its pro rata share of our net capital gains (as longterm capital gain) and other earnings and profits (asordinary income), on a current basis, in each case whether or not distributed, in the taxable year of the U.S. Holder in which or with which our taxable year ends.However, the qualified electing fund election is available only if the PFIC provides such U.S. Holder with certain information regarding its earnings and profits asrequired under applicable U.S. Treasury regulations. We do not intend to furnish the information that a U.S. Holder would need in order to make a qualified electingfund election. Therefore, U.S. Holders will not be able to make or maintain such election with respect to their or shares.If a U.S. Holder owns our shares or during any year that we are a PFIC, such holder must file U.S. Internal Revenue Service Form 8621 regarding suchholder’s shares or and the gain realized on the disposition of the shares. The reduced tax rate for dividend income, discussed in “Taxation of Distributions,” is notapplicable to dividends paid by a PFIC. U.S. Holders should consult with their own tax advisors regarding reporting requirements with respect to their shares.Tax Consequences to NonU.S. HoldersDividends paid to a NonU.S. Holder in respect of our or shares generally will not be subject to U.S. federal income tax, unless the dividends are effectivelyconnected with the NonU.S. Holder’s conduct of a trade or business within the United States (and, if required by an applicable income tax treaty, are attributable toa permanent establishment or fixed base that such holder maintains in the United States).In addition, a NonU.S. Holder generally will not be subject to U.S. federal income tax on any gain attributable to a sale or other disposition of our or sharesunless such gain is effectively connected with its conduct of a trade or business in the United States (and, if required by an applicable income tax treaty, isattributable to a permanent establishment or fixed base that such holder maintains in the United States) or the NonU.S. Holder is an individual who is present in theUnited States for 183 days or more in the taxable year of sale or other disposition and certain other conditions are met (in which case, such gain from United Statessources generally is subject to tax at a 30% rate or a lower applicable tax treaty rate).Dividends and gains that are effectively connected with the NonU.S. Holder’s conduct of a trade or business in the United States (and, if required by anapplicable income tax treaty, are attributable to a permanent establishment or fixed base in the United States) generally will be subject to tax in the same manner as fora U.S. Holder and, in the case of a NonU.S. Holder that is a corporation for U.S. federal income tax purposes, may also be subject to an additional branch profits taxat a 30% rate or a lower applicable tax treaty rate.66Information Reporting and Backup Withholding In general, information reporting for U.S. federal income tax purposes generally should apply to distributions made on the securities within the UnitedStates to a noncorporate U.S. Holder and to the proceeds from sales and other dispositions of the securities by a noncorporate U.S. Holder to or through a U.S.office of a broker. Payments made (and sales and other dispositions effected at an office) outside the United States generally should be subject to informationreporting in limited circumstances.Dividend payments made to U.S. Holders and proceeds paid from the sale or other disposition the securities may be subject to information reporting to theIRS and possible U.S. federal backup withholding at a current rate of 28%. Certain exempt recipients, such as corporations, are not subject to these informationreporting requirements. Backup withholding will not apply to a U.S. Holder who furnishes a correct taxpayer identification number and makes any other requiredcertification, or who is otherwise exempt from backup withholding. U.S. Holders who are required to establish their exempt status must provide a duly executed IRSForm W9.A NonU.S. Holder generally may eliminate the requirement for information reporting and backup withholding by providing certification of its foreignstatus, under penalties of perjury, on a duly executed applicable IRS Form W8 or by otherwise establishing an exemption.Backup withholding is not an additional tax. Rather, the amount of any backup withholding will be allowed as a credit against a U.S. Holder’s or a nonU.S.Holder’s U.S. federal income tax liability and may entitle such holder to a refund, provided that certain required information is timely furnished to the IRS.PROSPECTIVE PURCHASERS OF OUR SECURITIES SHOULD CONSULT WITH THEIR OWN TAX ADVISORS REGARDING THE APPLICATION OFTHE U.S. FEDERAL INCOME TAX LAWS TO THEIR PARTICULAR SITUATIONS AS WELL AS ANY ADDITIONAL TAX CONSEQUENCES RESULTING FROMPURCHASING, HOLDING OR DISPOSING OF OUR SECURITIES, INCLUDING THE APPLICABILITY AND EFFECT OF THE TAX LAWS OF ANY STATE, LOCALOR NONU.S. JURISDICTION, INCLUDING ESTATE, GIFT, AND INHERITANCE LAWS AND APPLICABLE TAX TREATIES.F. DIVIDENDS AND PAYING AGENTS.Not applicable.G. STATEMENT BY EXPERTS.None.H. DOCUMENTS ON DISPLAY.We previously filed a registration statement on Form F1 (File No. 333166056) with the SEC relating to our initial public offering in May 2010. This transition reportdoes not contain all of the information in the registration statement and the exhibits and financial statements included with the registration statement. References inthis transition report to any of our contracts, agreements or other documents are not necessarily complete, and you should refer to the exhibits attached to theregistration statement for copies of the actual contracts, agreements or documents. In addition, we will file transition reports on Form 20F and submit otherinformation under cover of Form 6K. As a foreign private issuer, we are exempt from the proxy requirements of Section 14 of the Exchange Act and our officers,directors and principal shareholders will be exempt from the insider shortswing disclosure and profit recovery rules of Section 16 of the Exchange Act. You may readand copy the registration statement, the related exhibits and other materials we file with the SEC at the SEC's public reference room in Washington, D.C. at 100 FStreet, Room 1580, N.E., Washington, D.C.20549. You can also request copies of those documents, upon payment of a duplicating fee, by writing to the SEC. Pleasecall the SEC at 1800SEC0330 for further information on the operation of the public reference rooms. The SEC also maintains an Internet site that contains reports,proxy and information statements and other information regarding issuers that file with the SEC. The website address is http://www.sec.gov. You may also request acopy of these filings, at no cost, by writing us at LAB 32, SOHO 3Q, No 9, Guanghua Road, Chaoyang District, Beijing, People’s Republic of China, 100020 ortelephoning us at (86) 1085866721.67I. SUBSIDIARY INFORMATIONFor a listing of our subsidiaries, see “Item 4. Information on the Company – C. Organizational Structure.”ITEM 11. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.Interest Rate RiskAs of December 31, 2017, we had no shortterm or longterm borrowings. If we borrow money in future periods, we may be exposed to interest rate risk. Ourexposure to market risk for changes in interest rates relates primarily to the interest income generated by our cash deposits with our banks and heldtomaturityinvestments. We have not used any derivative financial instruments in our investment portfolio. Interest earnings instruments carry a degree of interest rate risk. Wehave not been exposed, nor do we anticipate being exposed to material risks due to changes in interest rates. However, our future interest income may fall short ofexpectations due to changes in interest rates. Foreign Exchange RiskTranslation adjustments amounted to $90,671 and $387,375 gain as of the fiscal year ended December 31, 2017 and 2016, respectively. The Companytranslated balance sheet amounts with the exception of equity at December 31, 2017 at RMB 6.5342 to $1.00 as compared to RMB 6.9370 to $1.00 at December 31,2016. The Company stated equity accounts at their historical rate. The average translation rates applied to income statement accounts for the fiscal year endedDecember 31, 2017 and 2016 were RMB6.7356 and RMB 6.7153 to US$1.00, respectively. So far, the PRC government has been able to manage a stable exchange ratebetween RMB and the U.S. Dollar. Our future downward translation adjustments may occur and can be significant due to changes in such exchange rate.If we decide to convert our RMB into U.S. dollars for the purpose of making payments for dividends on our ordinary shares or for other business purposes,appreciation of the U.S. dollar against the RMB would have a negative effect on the U.S. dollar amount available to us.The PRC government imposes strict restrictions on PRC resident companies regarding converting RMB into foreign currencies and vice versa under capitalaccount transactions, such as receiving equity investments from outside of the PRC, making equity investments outside of the PRC, borrowing money from orlending money outside of the PRC, and repaying debt or remitting liquidated assets and/or accumulated profits outside of the PRC. These transactions have to beapproved by the relevant PRC government authorities, including but not limited to the commerce bureau, the tax bureau and the State Administration of ForeignExchange, or SAFE, and have to be conducted at banks entrusted by the local SAFE branch. As our business continues to grow, we may need to continuouslyfinance our PRC subsidiaries by raising capital from outside of the PRC. The restriction on converting RMB into foreign currencies, and vice versa, may limit ourability to use capital resources from outside of the PRC. Such restrictions may also limit our ability to remit profits from our PRC subsidiaries outside of the PRC,therefore potentially limiting our ability to pay dividends to our shareholders. In addition, such restrictions will limit our ability to freely transfer temporary excesscash in our or our subsidiaries’ bank accounts in and out of the PRC, therefore limiting our ability to conduct crossborder cash management activities to optimizethe utilization of our cash.InflationAlthough China has experienced an increasing inflation rate, inflation has not had a material impact on our results of operations in recent years. Accordingto the National Bureau of Statistics of China, the change in the consumer price index in China was 0.46%, (0.77%), and 1.16% in 2001, 2002 and 2003, respectively.However, in connection with a 3.9% increase in 2004, the PRC government announced measures to restrict lending and investment in China in order to reduceinflationary pressures in China’s economy. Following the government’s actions, the consumer price index decreased to 1.8% in 2005 and to 1.5% in 2006. In 2007, theconsumer price index increased to 4.8%. In response, China’s central bank, the People’s Bank of China, announced that the bank reserve ratio would rise half apercentage point to 15.5% in an effort to reduce inflation pressures. China’s consumer price index growth rate reached 8.7% year over year in 2008. In 2009 and 2010,the change in the consumer price index in China was minus 0.7% and 3.3%.China consumer price index in November 2017 was 3.8% higher than that of the same period in 2016. China consumer price index in December 2016 was2.4% higher than that of the same period in 2015. China consumer price index in December 2015 was 4.8% higher than that of the same period in 2014. Chinaconsumer price index in December 2014 was 3.3% higher than that of the same period in 2013. The results of the PRC government’s actions to combat inflation aredifficult to predict. Adverse changes in the Chinese economy, if any, will likely impact the financial performance of a variety of industries in China that use, or wouldbe candidates to use, our software products and services.68ITEM 12. DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES.A. DEBT SECURITIES.Not applicable. B. WARRANTS AND RIGHTS.Not applicable.C. OTHER SECURITIES.Not applicable.D. AMERICAN DEPOSITARY SHARES.The Bank of New York Mellon, as depositary (the “Depositary”) for the Company’s ADR facility, notified the owners and holders of the Company’s ADSsthat the ADS facility will terminate effective at 5:00 p.m. (Eastern Time) on September 19, 2018. Under the terms of the Deposit Agreement among the Company, theDepositary and the owners and holders of ADSs of the Company (the “Deposit Agreement”), owners and holders of the Company’s ADSs have until at leastJanuary 21, 2019 to surrender their ADSs to the Depositary for delivery of the underlying ordinary shares of the Company. Subsequent to January 21, 2019, underthe terms of the Deposit Agreement, the Depositary may attempt to sell any ordinary shares remaining on deposit with the Depositary. If the Depositary sells suchunderlying ordinary shares or receives value for such shares, holders must surrender their ADSs to obtain payment of the sale proceeds, net of expenses andapplicable tax and charges. We completed the voluntary delisting of our ADSs from the NASDAQ Capital Market on September 19, 2018.You may hold ADSs either (A) directly (i) by having ADSs registered in your name in the Direct Registration System, or (ii) by having an Americandepositary receipt, also referred to as an ADR, which is a certificate evidencing a specific number of ADSs, registered in your name, or (B) indirectly by holding asecurity entitlement in ADSs through your broker or other financial institution. If you hold ADSs directly, you are a registered ADS holder, also referred to as anADS holder. This description assumes you are an ADS holder. If you hold the ADSs indirectly, you must rely on the procedures of your broker or other financialinstitution to assert the rights of ADS holders described in this section. You should consult with your broker or financial institution to find out what thoseprocedures are.The Direct Registration System, or DRS, is a system administered by The Depository Trust Company, also referred to as DTC, pursuant to which thedepositary may register the ownership of uncertificated ADSs, which ownership will be confirmed by periodic statements sent by the depositary to the registeredholders of uncertificated ADSs.69As an ADS holder, you will not be treated as one of our registered shareholders and you will not have direct shareholder rights. British Virgin Island’s lawgoverns our direct shareholders’ rights. The depositary will be the holder of the shares underlying your ADSs. As a registered holder of ADSs, you will have ADSholder rights. A Deposit Agreement among us, the depositary and you, as an ADS holder, and all other persons indirectly holding ADSs, sets out ADS holder rightsas well as the rights and obligations of the depositary. New York law governs the Deposit Agreement and the ADSs.The following is a summary of the material provisions of the Deposit Agreement. For more complete information, you should read the entire DepositAgreement and the form of ADS, which contains the terms of the ADSs. The Deposit Agreement is filed as an exhibit to our registration statement filed on Form F1.You may obtain the registration statement and the attached Deposit Agreement from the SEC’s website at http://www.sec.gov. You may also obtain a copy of theDeposit Agreement at the SEC’s Public Reference Room, which is located at 100 F Street, NE, Washington, DC 20549. You may obtain information on the operationof the Public Reference Room by calling the SEC at 18007320330. Fees and ExpensesPersons depositing or withdrawing shares or ADS holders must pay:For:$5.00 (or less) per 100 ADSs (or portion of 100 ADSs)Issuance of ADSs, including issuances resulting from a distribution of shares orrights or other propertyCancellation of ADSs for the purpose of withdrawal, including if the DepositAgreement terminates$.05 (or less) per ADSAny cash distribution to ADS holdersA fee equivalent to the fee that would be payable if securities distributed to youhad been shares and the shares had been deposited for issuance of ADSsDistribution of securities distributed to holders of deposited securities whichare distributed by the depositary to ADS holders$.05 (or less) per ADSs per calendar yearDepositary servicesRegistration or transfer feesTransfer and registration of shares on our share register to or from the name ofthe depositary or its agent when you deposit or withdraw sharesExpenses of the depositaryCable, telex and facsimile transmissions (when expressly provided in the DepositAgreement) converting foreign currency to U.S. dollarsTaxes and other governmental charges the depositary or the custodian have topay on any ADS or share underlying an ADS, for example, share transfer taxes,stamp duty or withholding taxesAs necessaryAny charges incurred by the depositary or its agents for servicing the depositedsecuritiesAs necessaryPayment of TaxesHolders of our ADSs are responsible for any taxes or other governmental charges payable on their ADSs or on the deposited securities represented by anyof their ADSs. The depositary may refuse to register any transfer of a holder’s ADSs or allow withdrawal of the deposited securities represented by the ADSs untilsuch taxes or other charges are paid. It may apply payments owed to the holder or sell deposited securities represented by the ADSs to pay any taxes owed and theholder will remain liable for any deficiency. If the depositary sells deposited securities, it will, if appropriate, reduce the number of ADSs to reflect the sale and pay toADS holders any proceeds, or send to ADS holders any property, remaining after it has paid the taxes.70PART IIITEM 13. DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES.None.ITEM 14. MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS.Use of Proceeds.We completed our initial public offering on May 14, 2010 (the “IPO”), which generated net proceeds of approximately $14.6 million. All remaining cash onhand from the proceeds of our IPO was transferred to C Media Limited and its subsidiaries following the completion of the asset exchange transactions on August17, 2018.ITEM 15. CONTROLS AND PROCEDURES.Disclosure Controls and ProceduresOur Chief Executive Officer and Chief Financial Officer have reviewed and evaluated the effectiveness of our disclosure controls and procedures, whichincluded inquiries made to certain other of our employees. The term “disclosure controls and procedures,” as defined in Rules 13a15(e) and 15d15(e) under theExchange Act, means controls and other procedures of a company that are designed to ensure that information required to be disclosed by a company in thereports, such as this report, that it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in theSEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to bedisclosed by a company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the company’s management, including itsprincipal executive and principal financial officers, as appropriate to allow timely decisions regarding required disclosure. Management recognizes that any controlsand procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives and management necessarilyapplies its judgment in evaluating the costbenefit relationship of possible controls and procedures. Based on that evaluation, our Chief Executive Officer and ChiefFinancial Officer have each concluded that, as of December 31, 2017, the Company’s disclosure controls and procedures were not effective due to the materialweakness described in the “Management’s Report on Internal Control over Financial Reporting” section below.Management’s Report on Internal Control Over Financial ReportingOur management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Exchange ActRules 13a15(f) and 15d15(f). Internal control over financial reporting refers to the process designed by, or under the supervision of, our principal executive officerand principal financial officer, and effected by our Board of Directors, management and other personnel, to provide reasonable assurance regarding the reliability offinancial reporting and the preparation of financial statements for external purposes in accordance with U.S. GAAP and includes those policies and procedures that(i) pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of the assets of the Company; (ii)provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with U.S. GAAP, and thatreceipts and expenditures of the Company are being made only in accordance with authorizations of management and directors of the Company; and (iii) providereasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the Company’s assets that could have a materialeffect on the financial statements.71Any system of internal control, no matter how well designed, has inherent limitations. Therefore, even those systems determined to be effective canprovide only reasonable assurance with respect to financial statement preparation and presentation. Because of the inherent limitations of internal control, there is arisk that material misstatements may not be prevented or detected on a timely basis by internal control over financial reporting. However, these inherent limitationsare known features of the financial reporting process. Therefore, it is possible to design into the process safeguards to reduce, though not eliminate, this risk.Management assessed our internal control over financial reporting as of the year ended December 31, 2017. In making this assessment, management usedthe criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in the 2014 report entitled "Internal ControlIntegratedFramework." The COSO framework summarizes each of the components of a company’s internal control system, including (i) the control environment, (ii) riskassessment, (iii) control activities, (iv) information and communication, and (v) monitoring. Based on such assessment, management concluded that its internalcontrol over financial reporting as of December 31, 2017 was not effective because of the following material weakness:Lack of U.S. GAAP expertise. Although our accounting personnel are professional and experienced in accounting requirements and procedures generallyaccepted in the PRC, they do not have sufficient knowledge, experience and training in maintaining our books and records and preparing financial statements inaccordance with U.S. GAAP standards and SEC rules and regulations. The staff needs additional training to become experienced in U.S. GAAPbased reporting,including the skills of U.S. GAAPbased period end closing, consolidation of financial statements, and U.S. GAAP conversion.In order to address the above material weakness, our management plans to take the following steps:We will employ, as needed, outside professionals to provide key accounting personnel ongoing technical trainings to ensure their proper understanding ofU.S. GAAP and newly announced accounting standards.The Company believes the foregoing measures will remediate the identified material weakness in future periods. The Company is committed to monitoringthe effectiveness of these measures and making any changes that are necessary and appropriate.Notwithstanding the conclusion that its internal control over financial reporting was not effective as of the end of the period covered by this report, ourChief Executive Officer and Chief Financial Officer believe that the financial statements and other information contained in this report present fairly, in all materialrespects, its business, financial condition and results of operations. Nothing has come to the attention of management that causes them to believe that any materialinaccuracies or errors exist in the Company’s financial statements as of December 31, 2017.Attestation report of the registered public accounting firm.This transition report does not include an attestation report of the Company’s registered public accounting firm on internal control over financial reportingbecause the Company is a nonaccelerated filer permanently exempted from section 404(b) of the SarbanesOxley Act.Changes in Internal Control over Financial ReportingThere were no changes in the Company’s internal control over financial reporting that occurred during our fiscal year ended December 31, 2017 that hasmaterially affected or is reasonably likely to materially affect our internal control over financial reporting.ITEM 16. [RESERVED]ITEM 16A. AUDIT COMMITTEE FINANCIAL EXPERT.Our board of directors has determined that Mr. Dennis Galgano qualifies as an audit committee financial expert. Our board of directors has determined thatMessrs. Dennis Galgano, Jin Shi, Jiming Ha and Zhihao Xu meet the definition of an “independent director” under the applicable NASDAQ Rules and under Rule10A3 of the Securities Exchange Act of 1934, as amended.72ITEM 16B. CODE OF ETHICS.Our board of directors has adopted a code of business conduct and ethics applicable to our directors, officers and employees. We have posted the code onour website at http://www.luokung.com.ITEM 16C. PRINCIPAL ACCOUNTANT FEES AND SERVICES.Audit FeesThe aggregate fees billed by Moore Stephens CPA Limited for professional services rendered for the audit of our financial information disclosed in thistransition report on Form 20F was $280,000 for the two years ended December 31, 2017 and 2016.The aggregate fees billed by our previous auditor, BDO China Shu Lun Pan Certified Public Accountants LLP for professional services rendered for theaudit of our annual financial information included in our annual reports on Form 20F was $105,500 for each of the fiscal years ended September 30, 2017, 2016 and2015.Tax FeesWe did not engage our principal accountants to provide tax or related services during the last two fiscal years.All Other FeesWe did not engage our principal accountants to render services to us during the last two fiscal years, other than as reported above.ITEM 16D. EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES.Not applicable.ITEM 16E. PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS.Not applicable.ITEM 16F. CHANGE IN REGISTRANT’S CERTIFYING ACCOUNTANT.Not applicable.ITEM 16G. CORPORATE GOVERNANCE.We are incorporated in the BVI and our corporate governance practices are governed by applicable BVI law as well as our memorandum and articles ofassociation. In addition, because our ADSs are listed on NASDAQ, we are subject to NASDAQ’s corporate governance requirements. NASDAQ Listing Rule5620(a) requires each issuer to hold an annual meeting of shareholders no later than one year after the end of the issuer’s fiscal year end. However, NASDAQ ListingRule 5615(a)(3) permits a foreign private issuer like us to follow home country practices in lieu of certain requirements of Listing Rule 5600, provided that suchforeign private issuer discloses in its transition report filed with the SEC each requirement of Rule 5600 that it does not follow and describes the home countrypractice followed in lieu of such requirement. We follow home country practice with respect to annual meetings and did not hold an annual shareholder meeting inthe year ended December 31, 2017. We may, however, hold annual shareholder meetings in the future if there are significant issues that require shareholders’approvals.ITEM 16H. MINE SAFETY DISCLOSURE.Not applicable.73PART IIIITEM 17. FINANCIAL STATEMENTS.We have elected to provide financial statements and related information specified in Item 18.ITEM 18. FINANCIAL STATEMENTS.See “Index to Consolidated Financial Statements” for a list of all financial statements filed as part of this transition report. The Financial Statements arebeginning on page F1.ITEM 19. EXHIBITS.See the Exhibit Index following the signature page of this report, which is incorporated herein by reference.74SIGNATURESThe registrant hereby certifies that it meets all of the requirements for filing on Form 20F and that it has duly caused and authorized the undersigned tosign this transition report on its behalf.LUOKUNG TECHNOLOGY CORP.By:/s/ Xuesong Song Xuesong SongChief Executive Officer(principal executive officer)October 12, 201875EXHIBIT INDEXThe following documents are filed as part of this transition report on Form 20F.ExhibitNumberDescription1.1Amended and Restated Memorandum of Association and Articles of Association of Luokung Technology Corp., dated August 20, 2018, and ascurrently in effect.2.1*Deposit Agreement among the Company, depositary and holders of the American Depositary Receipts.2.2*Form of American Depositary Receipt.2.3*English translation of Entrusted Management Agreement dated December 15, 2009 between Xi’an Softech Co., Ltd., Xi’an Kingtone InformationTechnology Co., Ltd. and the shareholders of Xi’an Kingtone Information Technology Co., Ltd.3.1*English translation of Shareholder’s Voting Proxy Agreement dated December 15, 2009 between Xi’an Softech Co., Ltd., Xi’an Kingtone InformationTechnology Co., Ltd. and the shareholders of Xi’an Kingtone Information Technology Co., Ltd.4.1*English translation of Exclusive Technology Service Agreement dated December 15, 2009 between Xi’an Softech Co., Ltd. and Xi’an KingtoneInformation Technology Co., Ltd.4.2*English translation of Exclusive Option Agreement dated December 15, 2009 between Xi’an Softech Co., Ltd., Xi’an Kingtone InformationTechnology Co., Ltd. and the shareholders of Xi’an Kingtone Information Technology Co., Ltd.4.3*English translation of Equity Pledge Agreement dated December 15, 2009 between Xi’an Softech Co., Ltd., Xi’an Kingtone Information TechnologyCo., Ltd. and the shareholders of Xi’an Kingtone Information Technology Co., Ltd.4.4*English translation of Loan Agreement dated September 14, 2009 between Xi’an Kingtone Information Technology Co., Ltd. and Xian CityCommercial Bank.4.5*English translation of Mortgage Agreement dated September 14, 2009 between Xi’an Kingtone Information Technology Co., Ltd. and Xian CityCommercial Bank.4.6*English translation of Form of Employment Agreement entered into between the Company and the Company’s executive officers.4.7*2010 Omnibus Incentive Plan of the Company.4.8**English translation of Project Construction Contract dated August 10, 2010 between Xi’an Hu County Yuxing Agriculture Science & TechnologyCo., Ltd. and Xi’an Kingtone Information Technology Co., Ltd.4.9***Asset Exchange Agreement by and between C Media Limited and the Company dated as of January 25, 2018.4.10***Securities Purchase Agreement by and among Redstone YYL Management Limited and five shareholders holding majority of the shares of theCompany dated as of January 25, 2018.4.15Exclusive Business Cooperation Agreement by and between Zhongchuan Tianxia Information Technology (Shenzhen) Co., Ltd., and Beijing MobileVision Technology Co., Ltd., dated August 31, 2015.764.16Exclusive Option Agreement by and among Zhongchuan Tianxia Information Technology (Shenzhen) Co., Ltd., Xuesong Song, Weili Chen, PingWang, Donglai Liu, and Beijing Mobile Vision Technology Co., Ltd., dated August 31, 2015.4.17Equity Interest Pledge Agreement by and among Zhongchuan Tianxia Information Technology (Shenzhen) Co., Ltd., Xuesong Song, Weili Chen, PingWang, Donglai Liu, and Beijing Mobile Vision Technology Co., Ltd., dated August 31, 2015.4.18Addendum to Asset Exchange Agreement by and among the Company, Topsky Infotech Holdings Pte Ltd. and C Media Limited, dated October 3,2018. Incorporated by reference to the Company’s Current Report on Form 6K filed on October 4, 2018.4.19Stock Purchase Agreement, dated August 25, 2018, by and among the Company, LK Technology Ltd., and the shareholders listedtherein. Incorporated by reference to the Company’s Current Report on Form 6K filed on August 27, 2018.4.20Power of Attorney by Weili Chen, dated August 31, 2015.4.21Power of Attorney by Ping Wang, dated August 31, 2015.4.22Power of Attorney by Donglai Liu, dated August 31, 2015.4.23Power of Attorney by Xuesong Song, dated August 31, 2015.8.1List of Subsidiaries and Consolidated Variable Interest Entities10.1Employment Agreement, dated August 19, 2018, between Luokung Technology Corp. and Xuesong Song.†10.2Employment Agreement, dated August 19, 2018, by and between Luokung Technology Corp. and Jie Yu.†12.1Certification of Chief Executive Officer required by Rule 13a14(a).12.2Certification of Chief Financial Officer required by Rule 13a14(a).13.1Certification of Chief Executive Officer required by Rule 13a14(a).13.2Certification of Chief Financial Officer required by Rule 13a14(a).101.INSXBRL Instance Document.101.SCHXBRL Taxonomy Extension Schema Document.101.CALXBRL Taxonomy Extension Calculation Linkbase Document.101.DEFXBRL Taxonomy Extension Definition Linkbase Document.101.LABXBRL Taxonomy Extension Label Linkbase Document.101.PREXBRL Taxonomy Extension Presentation Linkbase Document.*Previously filed as an exhibit to the Company’s Registration Statement on Form F1 (Reg. No. 333166056) filed with the Commission and incorporated hereinby reference.**Previously filed as exhibits to the Company’s Transition Report on Form 20F filed with the Commission on January 20, 2011 and incorporated herein byreference.***Previously filed as exhibits to the Company’s Annual Report on Form 20F filed with the Commission on February 9, 2018 and incorporated herein byreference.†Indicates management contract or compensatory plan, contract or arrangement.77LK Technology Ltd. and SubsidiariesCONSOLIDATED FINANCIAL STATEMENTSTABLE OF CONTENTSPage(s)Report of Independent Registered Public Accounting FirmF2Consolidated Financial StatementsConsolidated Balance SheetsF3Consolidated Statements of Operations and Comprehensive LossF4application.Chuang (Vincent) Tao was appointed as a member of the Board effective on August 25, 2018. Dr. Tao was the Chairman of SuperEngine Suzhou from 2014to 2017. Dr. Tao has been the president of the Seasky Angel Investment Alliance of Shanghai since 2015. Dr. Tao received his Bachelor Degree of geographicinformation and telemetry from Wuhan University in China in 1990 and received his Ph.D. from University of Calgary, Canada in 1997.Dennis Galgano was appointed as a director of the Company following the consummation of the asset exchange agreement. He was a registered consultantwith Morgan Joseph Triartisan LLC from November 2016 until October 2017, and previously served as vice chairman and head of international investment bankingfor Morgan Joseph Triartisan LLC, which is a registered broker dealer engaged in the investment banking and financial advisory industry. Mr. Galgano received aB.S. degree in Chemistry from St. John’s University and an M.B.A. from The Wharton School in 1972.Jin Shi was appointed as a director of the Company following the consummation of the asset exchange transactions. Mr. Shi has served as the managingpartner of Chum Capital Group, a merchant bank focused on helping Chinese growth companies to access global capital, since January 2013. Mr. Shi has also servedas a director of Seven Stars Cloud Group, Inc. (NASDAQ: SSC), a premium video on demand service provider, since January 2014, and joined the audit committee ofits board of directors in March 2016. He also served as a director and member of the audit committee of Pingtan Marine Enterprise, Ltd. (NASDAQ: PME), a marineenterprise group primarily engaged in ocean fishing through its subsidiaries. Mr. Shi received an EMBA degree from the Guanghua Management School of BeijingUniversity, and a Bachelor’s degree of science in Chemical Engineering from Tianjin University.Jiming Ha was appointed as a director of the Company following the consummation of the asset exchange agreement, and has also served as a seniorresearch fellow for the China Finance 40 Forum since March 1, 2018, and previously served as a managing director of Goldman Sachs from January 2017 to April2017. Mr. Ha served as a vice chairman and chief investment strategist of the Investment Strategy Group for Private Wealth Management at Goldman Sachs from2010 to January 2017. Mr. Ha holds a PhD in Economics from the University of Kansas and Master’s and Bachelor’s degrees of science from Fudan University.Zhihao Xu was appointed as a director of the Company following the consummation of the asset exchange transactions. Mr. Xu has served as the chiefexecutive officer of Geely Group Co., Ltd., in Hangzhou, China, since December 2017, and previously served as the chairman and chief executive officer of BeijingDingchengrenhe Investment Co., Ltd., a funds management company, from January 2017 to December 2017. Mr. Xu served as the chairman of president of HNAUSOLV CO., LTD., and the chief innovation officer of HNA Logistics Group from January 2014 to December 2016, and prior to that as the chairman of GopayInnovation Technology Co. Ltd., an online payment system operator supporting online money transfers, from April 2012 to January 2014. Mr. Xu graduated from theBusiness School of Renmin University of China and from the Wudaokou Finance College of Tsinghua University with a fund qualification certificate and securitiesqualification certificate.B. COMPENSATION.Compensation of Directors and Executive OfficersFor the ninemonth transition period ended September 30, 2018 and the fiscal year ended December 31, 2017, we did not pay any cash compensation to ourexecutive officers of LK Technology Ltd. and a to our directors for serving on our board of directors of LK Technology Ltd.37Other than nonemployee directors, we do not intend to compensate directors for serving on our board of directors or any of its committees. We do,however, intend to reimburse each member of our board of directors for outofpocket expenses incurred by each director in connection with attending meetings ofthe board of directors and its committees.AdministrationThe Incentive Plan is administered by our board of directors, or at the discretion of the board, by our compensation committee. Our board of directors hasdelegated authority to our compensation committee to administer the Incentive Plan. Subject to the terms of the Incentive Plan, the compensation committee mayselect participants to receive awards, determine the types of awards and terms and conditions of awards, and interpret provisions of the Incentive Plan.The ordinary shares issued or to be issued under the Incentive Plan consist of authorized but unissued shares. If any ordinary shares covered by an awardare not purchased or are forfeited, or if an award otherwise terminates without delivery of any ordinary shares, then the number of ordinary shares counted againstthe aggregate number of ordinary shares available under the plan with respect to the award will, to the extent of any such forfeiture or termination, again be availablefor making awards under the Incentive Plan.EligibilityAwards may be made under the Incentive Plan to our employees, officers, directors, consultants or advisers or to any of our affiliates, and to any otherindividual whose participation in the Incentive Plan is determined to be in our best interests by our board of directors.Amendment or Termination of the PlanOur board of directors may terminate or amend the Incentive Plan at any time and for any reason. No amendment, however, may adversely impair the rightsof grantees with respect to outstanding awards. The Incentive Plan has a term of ten years. Amendments will be submitted for shareholder approval to the extentrequired by applicable stock exchange listing requirements or other applicable laws.OptionsThe Incentive Plan permits the granting of options to purchase ordinary shares intended to qualify as incentive share options under the Internal RevenueCode and share options that do not qualify as incentive share options, or nonqualified share options.The exercise price of each share option may not be less than 100% of the fair market value of our ADSs representing ordinary shares on the date of grant.In the case of certain 10% shareholders who receive incentive share options, the exercise price may not be less than 110% of the fair market value of our ADSsrepresenting ordinary shares on the date of grant. An exception to these requirements is made for options that we grant in substitution for options held byemployees of companies that we acquire. In such a case the exercise price is adjusted to preserve the economic value of the employee’s share option from his or herformer employer.The term of each share option is fixed by the compensation committee and may not exceed ten years from the date of grant. The compensation committeedetermines at what time or times each option may be exercised and the period of time, if any, after retirement, death, disability or termination of employment duringwhich options may be exercised.Options may be made exercisable in installments. The award agreement provides the vesting of the options. Exercisability of options may be accelerated bythe compensation committee.38In general, an optionee may pay the exercise price of an option by (1) cash or check (in U.S. dollars or Renminbi or other local currency as approved by thecompensation committee), (2) ordinary shares held for such period of time as may be required by the compensation committee, (3) delivery of a notice of a marketorder with a broker with respect to ordinary shares then issuable upon exercise of an option, and that the broker has been directed to pay us a sufficient portion ofnet proceeds of the sale in satisfaction of the exercise price, provided that payment of such proceeds is then made to us upon settlement of such sale, (4) otherproperty acceptable to the compensation committee with a fair market value equal to the exercise price, (5) cashless exercise or (6) any combination of the foregoing.Share options granted under the Incentive Plan may not be sold, transferred, pledged, or assigned other than by will or under applicable laws of descentand distribution. However, we may permit limited transfers of nonqualified options for the benefit of immediate family members of grantees to help with estateplanning concerns or pursuant to a domestic relations order in settlement of marital property rights.Other AwardsThe compensation committee may also award under the Incentive Plan:1.ordinary shares subject to restrictions;2.deferred ordinary shares, credited as deferred ordinary share units, but ultimately payable in the form of unrestricted ordinary shares inaccordance with the terms of the grant or with the participant’s deferral election;3.ordinary share units subject to restrictions;4.unrestricted ordinary shares, which are ordinary shares issued at no cost or for a purchase price determined by the compensation committee whichare free from any restrictions under the 2011 Omnibus Incentive Plan;5.dividend equivalent rights entitling the grantee to receive credits for dividends that would be paid if the grantee had held a specified number ofordinary shares; or6.a right to receive a number of ordinary shares or, in the discretion of the compensation committee, an amount in cash or a combination of ordinaryshares and cash, based on the increase in the fair market value of the ADSs representing ordinary shares underlying the right during a statedperiod specified by the compensation committee.Effect of Certain Corporate TransactionsCertain change of control transactions involving us may cause awards granted under the Incentive Plan to vest, unless the awards are continued orsubstituted for by the surviving company in connection with the corporate transaction.Unless otherwise provided in the appropriate option agreement on the date of grant or provided by our board of directors thereafter with the consent of thegrantee, options granted under the Incentive Plan become exercisable in full following (1) a dissolution of our company or a merger, consolidation or reorganizationof our company with one or more other entities in which we are not the surviving entity, (2) a sale of substantially all of our assets to another person or entity, or (3)any transaction (including without limitation a merger or reorganization in which we are the surviving entity) which results in any person or entity owning 50% ormore of the combined voting power of all classes of our shares.39Adjustments for Dividends and Similar EventsThe compensation committee will make appropriate adjustments in outstanding awards and the number of ordinary shares available for issuance under theIncentive Plan, including the individual limitations on awards, to reflect ordinary share dividends, stock splits and other similar events.C. BOARD PRACTICES.Board of DirectorsOur board of directors consists of six members being Messrs. Xuesong Song, Kegang Peng, Dennis Galgano, Jin Shi, Jiming Ha and Zhiaho Xu. Ourdirectors hold office until our annual meeting of shareholders, where their successors will be duly elected and qualified, or until the directors’ death, resignation orremoval, whichever is earlier. Our directors are not subject to a term of office and hold office until their resignation, death or incapacity or until their respectivesuccessors have been elected and qualified in accordance with our fourth amended and restated memorandum of association and articles of association. A directorwill be removed from office if, among other things, the director (1) becomes bankrupt, (2) dies or becomes of unsound mind, or (3) is absent from meetings of ourboard of directors for six consecutive months without leave and our board of directors resolves that the office is vacated. A director is not entitled to any specialbenefits upon termination of service with the company.Director IndependenceOur board of directors consists of six members; Messrs. Dennis Galgano, Jin Shi, Jiming Ha and Zhihao Xu have been determined by us to be independentdirectors within the meaning of the independent director guidelines of the NASDAQ Corporate Governance Rules (the “NASDAQ Rules”).Committees of Our Board of DirectorsTo enhance our corporate governance, we established three committees under our board of directors: an audit committee, a compensation committee, and anominating and corporate governance committee. We have adopted a charter for each of these committees. The committees have the following functions andmembers.Audit CommitteeOur audit committee reports to our board of directors regarding the appointment of our independent public accountants, the scope and results of ourannual audits, compliance with our accounting and financial policies and management’s procedures and policies relating to the adequacy of our internal accountingcontrols. Our audit committee consists of Messrs. Dennis Galgano, Jin Shi, and Jiming Ha. Mr. Galgano, having accounting and financial management expertise,serves as the chairman of the audit committee and is an “audit committee financial expert” as defined by the rules and regulations of the SEC. Our board of directorshas determined that each of these persons meet the definition of an “independent director” under the applicable NASDAQ Rules and under Rule 10A3 of theSecurities Exchange Act of 1934, as amended (the “Exchange Act”).Our audit committee is responsible for, among other things:●the appointment, evaluation, compensation, oversight and termination of the work of our independent auditor (including resolution of disagreementsbetween management and the independent auditor regarding financial reporting);●an annual performance evaluation of the audit committee;●establishing procedures for the receipt, retention and treatment of complaints regarding accounting, internal accounting controls, auditing matters orpotential violations of law, and the confidential, anonymous submission by our employees of concerns regarding questionable accounting or auditingmatters or potential violations of law;40●ensuring that it receives an transition report from our independent auditor describing our internal control procedures and any steps taken to deal withmaterial control deficiencies and attesting to the auditor’s independence and describing all relationships between the auditor and us;●reviewing our annual audited financial statements and quarterly financial statements with management and our independent auditor;●reviewing and approving all proposed related party transactions;●reviewing our policies with respect to risk assessment and risk management;●meeting separately and periodically with management and our independent auditor; and●reporting regularly to our board of directors.Compensation CommitteeOur compensation committee assists the board of directors in reviewing and approving the compensation structure of our directors and executive officers,including all forms of compensation to be provided to our directors and executive officers. In addition, the compensation committee reviews share compensationarrangements for all of our other employees. Members of the compensation committee are not prohibited from direct involvement in determining their owncompensation. Our chief executive officer is not permitted to be present at any committee meeting during which his or her compensation is deliberated. Ourcompensation committee consists of Dennis Galgano and Jin Shi, with Mr. Shi serving as the chairman of the compensation committee. Our board of directors hasdetermined that each of these persons meet the definition of “independent director” under the applicable requirements of the NASDAQ Rules.Our compensation committee is responsible for, among other things:●reviewing and approving corporate goals and objectives relevant to the compensation of our chief executive officer, evaluating the performance of ourchief executive officer in light of those goals and objectives and setting the compensation level of our chief executive officer based on this evaluation;●reviewing and making recommendations to the board with respect to the compensation of our executives, incentive compensation and equitybasedplans that are subject to board approval; and●providing annual performance evaluations of the compensation committee.Nominating and Corporate Governance CommitteeOur nominating and corporate governance committee assists the board of directors in identifying and selecting or recommending individuals qualified tobecome our directors, developing and recommending corporate governance principles and overseeing the evaluation of our board of directors and management. Ournominating and corporate governance committee consists of Jiming Ha and Zhihao Xue, with Mr. Ha serving as the chairman of the nominating and corporategovernance committee. Our board of directors has determined that each of these persons meet the definition of “independent director” under the applicablerequirements of the NASDAQ Rules.Our nominating and corporate governance committee is responsible for, among other things:●selecting and recommending to our board nominees for election or reelection to our board, or for appointment to fill any vacancy;●reviewing annually with our board the current composition of the board of directors with regards to characteristics such as independence, age, skills,experience and availability of service to us;●selecting and recommending to our board the names of directors to serve as members of the audit committee and the compensation committee, as wellas the nominating and corporate governance committee itself; advising our board of directors periodically with regards to significant developments inthe law and practice of corporate governance as well as our compliance with applicable laws and regulations, and making recommendations to ourboard of directors on all matters of corporate governance and on any remedial action to be taken; and●monitoring compliance with our code of business conduct and ethics, including reviewing the adequacy and effectiveness of our procedures to ensureproper compliance.41Code of Business Conduct and EthicsOur board of directors adopted a code of business conduct and ethics applicable to our directors, officers and employees.Duties of DirectorsUnder British Virgin Islands law, our directors have a duty to act honestly, in good faith and with a view to our best interests. Our directors also have a dutyto exercise care, diligence and skills that a reasonably prudent person would exercise in comparable circumstances. In fulfilling their duty of care to us, our directorsmust ensure compliance with our memorandum of association and articles of association. We have the right to seek damages if a duty owed by our directors isbreached.The functions and powers of our board of directors include, among others:●appointing officers and determining the term of office of the officers;●authorizing the payment of donations to religious, charitable, public or other bodies, clubs, funds or associations as deemed advisable;●exercising the borrowing powers of the company and mortgaging the property of the company;●executing cheques, promissory notes and other negotiable instruments on behalf of the company; and●maintaining or registering a register of mortgages, charges or other encumbrances of the company.Remuneration and BorrowingThe directors may receive such remuneration as our board of directors may determine from time to time. Each director is entitled to be repaid or prepaid alltraveling, hotel and incidental expenses reasonably incurred or expected to be incurred in attending meetings of our board of directors or committees of our board ofdirectors or shareholder meetings or otherwise in connection with the discharge of his or her duties as a director. The compensation committee will assist thedirectors in reviewing and approving the compensation structure for the directors.Our board of directors may exercise all the powers of the company to borrow money and to mortgage or charge our undertakings and property or any partthereof, to issue debentures, debenture stock and other securities whenever money is borrowed or as security for any debt, liability or obligation of the company orof any third party.QualificationA director is not required to hold shares as a qualification to office.42Limitation on Liability and Other Indemnification MattersBritish Virgin Islands law does not limit the extent to which a company’s memorandum of association and articles of association may provide forindemnification of officers and directors, except to the extent any such provision may be held by the British Virgin Islands courts to be contrary to public policy,such as to provide indemnification against civil fraud or the consequences of committing a crime.Under our memorandum of association and articles of association, we may indemnify our directors, officers and liquidators against all expenses, includinglegal fees, and against all judgments, fines and amounts paid in settlement and reasonably incurred in connection with civil, criminal, administrative or investigativeproceedings to which they are party or are threatened to be made a party by reason of their acting as our director, officer or liquidator. To be entitled toindemnification, these persons must have acted honestly and in good faith with a view to the best interest of the company and, in the case of criminal proceedings,they must have had no reasonable cause to believe their conduct was unlawful.Compensation Committee Interlocks and Insider ParticipationNone of the members of our compensation committee is an officer or employee of our company. None of our executive officers currently serves, or in thepast year has served, as a member of the board of directors or compensation committee of any entity that has one or more executive officers serving on our board ofdirectors or compensation committee.Employment AgreementsOn August 19, 2018, the Company entered into an Employment Agreement (the “Song Agreement”) with Mr. Xuesong Song, to serve as the ChiefExecutive Officer of the Company for a fouryear term, subject to renewal. Under the terms of the Song Agreement, Mr. Song will receive no salary for his servicesbut will be eligible for an annual cash bonus in the Board’s sole discretion.On August 19, 2018, the Company entered into an Employment Agreement (the “Yu Agreement”) with Mr. Jie Yu, to serve as the Chief Financial Officer ofthe Company for a fouryear term, subject to renewal. Under the terms of the Yu Agreement, Mr. Yu will receive an annual salary of RMB700,000, and will be eligiblefor an annual cash bonus in the Board’s sole discretion.D. EMPLOYEES.As of September 30, 2018 and December 31, 2017, we had a total of 107 and 37 fulltime employees, including 48 and 13 in research and development, 9 and 2in sales and marketing and the rest in a variety of other divisions, respectively. All of our employees are fulltime employees. None of our employees is currentlyrepresented by a union and/or collective bargaining agreements. We believe that we have good relations with our employees and since our inception we have hadno history of work stoppages or union organizing campaigns.E. SHARE OWNERSHIP.The following table provides information as to the beneficial ownership of our ordinary shares as of October 10, 2018, by the persons listed. Beneficialownership of shares is determined under the rules of the SEC and generally includes any shares over which a person exercises sole or shared voting or investmentpower. For purposes of the following table, a person is deemed to have beneficial ownership of any ordinary shares if such person has the right to acquire suchshares within 60 days of October 10, 2018. For purposes of computing the percentage of outstanding shares held by each person, any shares that such person hasthe right to acquire within 60 days after of October 10, 2018 are deemed to be outstanding, but are not deemed to be outstanding for the purpose of computing thepercentage ownership of any other person. Except as otherwise noted, the persons named in the table have sole voting and investment power with respect to all ofthe ordinary shares beneficially owned by them. Unless otherwise indicated, the address of each person listed is c/o Luokung Technologies, LAB 32, SOHO 3Q, No9, Guanghua Road, Chaoyang District, Beijing, People’s Republic of China.43Percentage ownership in the following table is based on 199,317,558 ordinary shares outstanding on October 10, 2018.Number ofsharesPercent ofclassDirectors and named executive officersCharm Dragon International Limited (1)4,030,8822.03%Xuesong Song, Chairman, Chief Executive Officer and Director(2)38,156,43019.30%Kegang Peng, Vice President and Director (3)17,231,9558.71%Dennis Galgano, Director75,796*%Jin Shi, DirectorJiming Ha, DirectorZhihao Xu, Director (4)7,579,1843.83%Dongpu Zhang, President (5)2,321,7921.17%Chuang Tao, Director (6)1,221,996*%Directors and executive officers as a group (10 persons)66,587,15233.69%(1)Charm Dragon International Limited is a British Virgin Islands company controlled by Mr. Xuesong Song.(2)Consists of (i) 4,030,882 shares owned directly by Charm Dragon International Limited, a British Virgin Islands company and (ii) 22,624,793 shares owneddirectly by Bravo First Development Limited, a British Virgin Islands company. Mr. Xuesong Song is the controlling shareholder of Bravo First DevelopmentLimited. Mr. Xuesong Song is the sole director of Charm Dragon International Limited.(3)Consists of 17,231,955 shares owned directly by Plenty Prestige Enterprises Limited, a British Virgin Islands company. Mr. Kegang Peng is the sole director ofPlenty Prestige Enterprises Limited.(4)Consists of 7,579,184 shares directly owned by Geely Group Limited., a Chinese company. Mr. Zhihao Xu is the Chief Executive Officer of Geely GroupLimited.(5)Consists of 2,321,792 shares owned directly by Genoa Peak Limited, a British Virgin Islands company. Mr. Dongpu Zhang controls Genoa Peak Limited.(6)Consists of 1,221,996 shares owned directly by Globalearth Holdings Limited, a British Virgin Islands company. Mr. Chuang Tao controls Globalearth HoldingsLimited.*Represents less than 1% of shares outstandingITEM 7. MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS.A. MAJOR SHAREHOLDERSPlease refer to Item 6.E “Directors, Senior Management and Employees — Share Ownership.”To our knowledge, (A) we are not directly or indirectly owned or controlled by (i) another corporation or (ii) any foreign government and (B) there are noarrangements (including any announced or expected takeover bid), the operation of which may at a subsequent date result in a change in our control.The voting rights of our major shareholders do not differ from the voting rights of other holders of the same class of shares.44B. RELATED PARTY TRANSACTIONS. BUSINESS RELATIONSHIPS.Our subsidiaries, consolidated affiliated entities, and the subsidiaries of the consolidated affiliated entities have engaged, during the ordinary course ofbusiness, in a number of customary transactions with each other. All of these intercompany balances have been eliminated in consolidation.As of December 31, 2017, we had amounts due from related parties, C Media Limited and Ya Tuo Ji International Consultancy (Beijing) Limited, in theamounts of $11.8 million and $0.2 million, respectively. These amounts due from related parties are short term in nature, noninterest bearing, unsecured andrepayable on demand.As of December 31, 2017, we had amounts due to related parties, Mr. Xuesong Song, our chairman and chief executive officer, Thumb Beijing Branch andThumb Shenzhen Branch, in the amounts of $2.9 million, $0.6 million and $0.03 million, respectively. These amounts due to related parties are short term in nature,noninterest bearing, unsecured and payable on demand.We are party to a series of control agreements with Beijing Zhong Chuan Shi Xun. In addition, our chief executive officer, Mr. Xuesong Song, serves as andofficer of Beijing Zhong Chuan Shi Xun and is a shareholder of Beijing Zhong Chuan Shi Xun. The following table sets forth the relationship of Mr. Song withBeijing Zhong Chuan Shi Xun:NameRelationship withLuokung TechnologyRelationship withBeijing Zhong Chuan Shi XunPercentageOwnership Interest inBeijing Zhong Chuan Shi XunXuesong SongChief Executive OfficerChief Executive Officer61.83%C. INTERESTS OF EXPERTS AND COUNSEL.None.ITEM 8. FINANCIAL INFORMATION.A. CONSOLIDATED STATEMENTS AND OTHER FINANCIAL INFORMATION.See “Item 18. Financial Statements.”Legal ProceedingsTo our knowledge, other than as described below there are no material legal proceedings threatened against us. From time to time, we may be subject tovarious claims and legal actions arising in the ordinary course of business. Following the consummation of the AEA, we became successor in interest to the legalproceedings described below.Litigation with Shanghai Fusheng Weier Intelligent Control Technology Co., Ltd.On January 22, 2016, Zhong Chuan Rui You and Shanghai Fusheng Weier Intelligent Control Technology Co., Ltd. (“Fusheng Weier”) signed a contract forequipment of $1,652,842 (RMB10,800,000). Since Zhong Chuan Rui You did not make the payments of $1,126,381 (RMB7,360,000) on the due dates, Fusheng Weierfiled a lawsuit against Zhong Chuan Rui You in Shanghai Xuhui District People's Court on October 8, 2016. On March 9, 2017, Xuhui District People's Court issuedthe verdict requiring Zhong Chuan Rui You to pay the overdue debts. In August 2017, C Media Limited made the payment of $512,075 (RMB3,346,000). Theremaining balance has been accrued in accounts payable. The payment schedule for the remaining balance is being negotiated by the two parties. On February 5,2018, a hearing was held adding Zhong Chuan Shi Xun as a defendant. The Group plans to settle the remaining balance within one year.45Lawsuit with Gansu Jinlun Culture Media Co., Ltd.On August 22, 2014, Zhong Chuan Rui You and Gansu Jinlun Culture Media Co., Ltd. (“Gansu Jinlun”) signed a “Lanzhou Railway Bureau AirconditionedTrain WiFi Network System Advertising Operation Rights Agreement” for advertising on 72 trains of $1,467,880 (RMB9,604,633). Due to the dispute on theproject implementation, Zhong Chuan Rui You did not pay the advertising fee. On August 23, 2017, Gansu Jinlun filed a lawsuit with Gansu Intermediate People'sCourt. On December 19, 2017, Gansu Intermediate People's Court issued a verdict, ruling that Zhong Chuan Rui You settle the overdue advertising fee. Since only 18out of 72 trains have been installed with Wifi network system, Zhong Chuan Rui You disputed and appealed to the verdict. The next court trial date has not yet beendetermined. C Media and Gansu Jinlun are negotiating a potential settlement to resume the contract. According to the legal counsel, it is probable that the settlementwill amount to approximately $459,000 (RMB3,000,000); therefore, this amount has been accrued in accounts payable as at December 31, 2017.Litigation with Shenzhen Hua Xun Fang Zhou Technology Co., Ltd.On June 16, 2015, Zhong Chuan Rui You signed a cooperation agreement with Shenzhen Hua Xun Fang Zhou Technology Co., Ltd. (“Shenzhen Hua Xun”)and Xuesong Song, a major shareholder of C Media Limited. Pursuant to this agreement, Zhong Chuan Rui You procures equipment from Shenzhen Hua Xun.Xuesong Song acts as a joint liability guarantor for the entire debts of Zhong Chuan Rui You under this agreement. As Zhong Chuan Rui You did not make thepayments on the due dates, Shenzhen Hua Xun filed a lawsuit with Shenzhen Baoan District People's Court on May 31, 2016. On November 1, 2016, Zhong ChuanRui You, Xuesong Song and Shenzhen Hua Xun reached a settlement in Shenzhen Baoan District People's Court to settle $1,735,389 (RMB11,355,000) in fourinstalments. On December 30, 2017, the debt was assigned to C Media Limited.Dividend PolicyWe currently intend to retain all of our available funds and future earnings for use in the operation and expansion of our business and do not anticipatepaying cash dividends in the foreseeable future. Under the terms of our Amended and Restated Memorandum and Articles of Association the declaration andpayment of any dividends in the future will be determined by our board of directors, in its discretion, and will depend on a number of factors, including our earnings,capital requirements and overall financial condition and our ability to receive dividends from our subsidiaries. If we pay any dividends, we will pay our ADS holders’dividends with respect to their underlying shares to the same extent as holders of our ordinary shares, subject to the terms of the deposit agreement, including thefees and expenses payable thereunder. Cash dividends on our ordinary shares, if any, will be paid in U.S. dollars.Our ability to receive dividends from our subsidiaries may limit our ability to pay dividends on our ordinary shares. See Risk Factors – Risks Related toDoing Business in China – Our holding company structure may limit the payment of dividends” and “Item 10. Additional Information – D. Exchange Controls –Dividend Distribution”.B. SIGNIFICANT CHANGES.N/AITEM 9. THE OFFER AND LISTINGA. OFFER AND LISTING DETAILS.Markets and Share Price HistoryOur ordinary shares are not currently listed on any trading market. Our American Depository Shares (“ADSs”) were voluntarily delisted from the NASDAQCapital Market on September 19, 2018. We have applied to NASDAQ for the listing of our ordinary shares on the NASDAQ Capital Market and received an approvalfor listing of Ordinary Shares on August 6, 2018, and as of the date of this transition report, that application and approval are currently under review.46The table below sets forth the high and low reported sales prices in dollars of our ordinary shares, which are represented by ADSs, as reported byNASDAQ in the periods as indicated:ADSHighLowAnnual Highs and Lows (as of the fiscal year end 09/30 for the five most recent full financial years)*20175.592.67201610.21.62Quarterly Highs and Lows (for the two most recent full financial years and any subsequent period, based on calendarquarter end)*2018Third Quarter8.006.30Second Quarter8.824.25First Quarter6.403.702017Fourth Quarter5.592.91Third Quarter3.992.67Second Quarter4.063.07First Quarter5.152.832016Fourth Quarter6.594.20Third Quarter10.201.62Second Quarter3.101.97First Quarter3.602.12Monthly Highs and Lows (for the most recent six months)September 20188.006.41August 20187.706.63July 20187.506.30June 20188.827.55May 20187.805.92April 20187.454.25*The Company effected a 1for10 reverse stock split of its ordinary shares on November 6, 2012 (the “Reverse Split”). The ratio between each AmericanDepositary Share (“ADS”) and its underlying ordinary share postReverse Split remains the same, namely, one ADR remains to represent one ordinary sharepost the Reverse Split. The price listed here after November 6, 2012 reflected the effect from the Reverse Split.B. PLAN OF DISTRIBUTION.Not Applicable.C. MARKETS.Our ordinary shares are not currently listed on any trading market. Our ADSs were voluntarily delisted from the NASDAQ Capital Market on September 19,2018. We have applied to NASDAQ for the listing of our ordinary shares on the NASDAQ Capital Market and received an approval for listing of Ordinary Shares onAugust 6, 2018, and as of the date of this transition report, that application and approval are currently under review.47D. SELLING SHAREHOLDERS.Not applicable.E. DILUTION.Not applicable.F. EXPENSES OF THE ISSUE.Not applicable.ITEM 10. ADDITIONAL INFORMATION.A. SHARE CAPITALNot applicable.B. MEMORANDUM AND ARTICLES OF ASSOCIATIONWe are a British Virgin Islands company incorporated with limited liability and our affairs are governed by the provisions of our memorandum of associationand articles of association, as amended and restated from time to time, and by the provisions of applicable British Virgin Islands law.Our memorandum of association and articles of association authorize the issuance of up to 251,000,000 shares, which are designated into (i) 250,000,000 ofordinary shares of the Company (“Ordinary Shares”), and (ii) 1,000,000 preferred shares of the Company (“Preferred Shares”), in each case with the rights,preferences and privileges as set out in the memorandum and articles of association of the Company.Please see below for a description of our ADSs under “Item 12. Description of Securities Other Than Equity Securities – D. American Depository Shares.”The following is a summary of the material provisions of our ordinary shares and our memorandum of association and articles of association.Ordinary SharesAll of our issued and outstanding ordinary shares are fully paid and nonassessable. Holders of our ordinary shares who are nonresidents of the BritishVirgin Islands may freely hold and vote their shares.Subject to the memorandum and articles of association (and, for greater clarity, without prejudice to any special rights conferred thereby on the holders ofany other shares), an Ordinary Share of the Company confers on the holder:(a)the right to one vote per Ordinary Share at a meeting of the members or on any resolution of members;(b)the right to an equal share in any distribution paid by the Company; and(c)the right to an equal share in the distribution of the surplus assets of the Company on a winding up;48Subject to the memorandum and articles of association (and, for greater clarity, without prejudice to any special rights conferred thereby on the holders ofany other shares), a Preferred Share of the Company confers on the holder:(a)the right to 399 votes per Preferred Share at a meeting of the members or on any resolution of members;(b)the right to an equal share in any distribution paid by the Company;(c)the right to an equal share in the distribution of the surplus assets of the Company on a winding up;(d)be freely transferable, in whole or in part, by Mr. Xuesong Song to any third party through one or more Private Transactions, subject toApplicable Law; and(e)be freely transferable, in whole or in part, by Mr. Xuesong Song to any third party through one or more Public Transactions, subject to ApplicableLaw and Automatic Conversion of such Preferred Share(s) into Ordinary Share(s).Each Preferred Share shall be automatically converted at any time after issue and without the payment of any additional sum into an equal number of fullypaid Ordinary Shares upon the conclusion of any transfer by Mr. Xuesong Song to any third party through one or more Public Transactions.Limitation on Liability and Indemnification MattersUnder British Virgin Islands law, each of our directors and officers, in performing his or her functions, is required to act honestly and in good faith with aview to our best interests and exercise the care, diligence and skill that a reasonably prudent person would exercise in comparable circumstances. Our memorandumof association and articles of association provide that, to the fullest extent permitted by British Virgin Islands law or any other applicable laws, our directors will notbe personally liable to us or our shareholders for any acts or omissions in the performance of their duties. Such limitation of liability does not affect the availabilityof equitable remedies such as injunctive relief or rescission. These provisions will not limit the liability of directors under United States federal securities laws.We may indemnify any of our directors or anyone serving at our request as a director of another entity against all expenses, including legal fees, andagainst all judgments, fines and amounts paid in settlement and reasonably incurred in connection with legal, administrative or investigative proceedings. We mayonly indemnify a director if he or she acted honestly and in good faith with the view to our best interests and, in the case of criminal proceedings, the director hadno reasonable cause to believe that his or her conduct was unlawful. The decision of our board of directors as to whether the director acted honestly and in goodfaith with a view to our best interests and as to whether the director had no reasonable cause to believe that his or her conduct was unlawful, is in the absence offraud sufficient for the purposes of indemnification, unless a question of law is involved. The termination of any proceedings by any judgment, order, settlement,conviction or the entry of no plea does not, by itself, create a presumption that a director did not act honestly and in good faith and with a view to our best interestsor that the director had reasonable cause to believe that his or her conduct was unlawful. If a director to be indemnified has been successful in defense of anyproceedings referred to above, the director is entitled to be indemnified against all expenses, including legal fees, and against all judgments, fines and amounts paidin settlement and reasonably incurred by the director or officer in connection with the proceedings.We may purchase and maintain insurance in relation to any of our directors or officers against any liability asserted against the directors or officers andincurred by the directors or officers in that capacity, whether or not we have or would have had the power to indemnify the directors or officers against the liabilityas provided in our memorandum of association and articles of association.Insofar as indemnification for liabilities arising under the Securities Act may be permitted for our directors or officers under the foregoing provisions, wehave been informed that in the opinion of the Securities and Exchange Commission, such indemnification is against public policy as expressed in the Securities Actand is therefore unenforceable as a matter of United States law.49Differences in Corporate LawWe were incorporated under, and are governed by, the laws of the British Virgin Islands. The corporate statutes of the State of Delaware and the BritishVirgin Islands are similar, and the flexibility available under British Virgin Islands law has enabled us to adopt memorandum of association and articles of associationthat will provide shareholders with rights that do not vary in any material respect from those they would enjoy if we were incorporated under the Delaware GeneralCorporation Law, or Delaware corporate law. Set forth below is a summary of some of the differences between provisions of the BVI Act applicable to us and thelaws application to companies incorporated in Delaware and their shareholders.Director’s Fiduciary DutiesUnder Delaware corporate law, a director of a Delaware corporation has a fiduciary duty to the corporation and its stockholders. This duty has twocomponents: the duty of care and the duty of loyalty. The duty of care requires that a director act in good faith, with the care that an ordinarily prudent personwould exercise under similar circumstances. Under this duty, a director must inform himself of, and disclose to stockholders, all material information reasonablyavailable regarding a significant transaction. The duty of loyalty requires that a director act in a manner he reasonably believes to be in the best interests of thecorporation. He must not use his corporate position for personal gain or advantage. This duty prohibits selfdealing by a director and mandates that the bestinterest of the corporation and its stockholders take precedence over any interest possessed by a director, officer or controlling stockholder and not shared by thestockholders generally. In general, actions of a director are presumed to have been made on an informed basis, in good faith and in the honest belief that the actiontaken was in the best interests of the corporation. However, this presumption may be rebutted by evidence of a breach of one of the fiduciary duties. Should suchevidence be presented concerning a transaction by a director, a director must prove the procedural fairness of the transaction, and that the transaction was of fairvalue to the corporation.British Virgin Islands law provides that every director of a British Virgin Islands company in exercising his powers or performing his duties shall acthonestly and in good faith and in what the director believes to be in the best interests of the company. Additionally, the director shall exercise the care, diligence andskill that a reasonable director would exercise in the same circumstances taking into account the nature of the company, the nature of the decision and the positionof the director and his responsibilities. In addition, British Virgin Islands law provides that a director shall exercise his powers as a director for a proper purpose andshall not act, or agree to the company acting, in a manner that contravenes British Virgin Islands law or the memorandum association or articles of association of thecompany.Amendment of Governing DocumentsUnder Delaware corporate law, with very limited exceptions, a vote of the stockholders is required to amend the certificate of incorporation. Under BritishVirgin Islands law and our memorandum of association and articles of association, (i) our shareholders may amend our memorandum of association and articles ofassociation by a resolution of shareholders, or (ii) our board of directors may amend our memorandum of association and articles of association by a resolution ofdirectors without a requirement for a resolution of shareholders so long as the amendment does not:●restrict the rights of the shareholders to amend the memorandum of association and articles of association;●change the percentage of shareholders required to pass a resolution of shareholders to amend the memorandum of association and articles ofassociation;●amend the memorandum of association and articles of association in circumstances where the memorandum of association and articles ofassociation cannot be amended by the shareholders; or●amend the provisions of memorandum of association or the articles of association pertaining to “rights attaching to shares,” “rights not varied bythe issue of the shares pari passu,” “variation of rights” and “amendment of memorandum and articles”.50Written Consent of DirectorsUnder Delaware corporate law, directors may act by written consent only on the basis of a unanimous vote. Under British Virgin Islands law, directors’consents need only a majority of directors signing to take effect.Written Consent of ShareholdersUnder Delaware corporate law, unless otherwise provided in the certificate of incorporation, any action to be taken at any annual or special meeting ofstockholders of a corporation, may be taken by written consent of the holders of outstanding stock having not less than the minimum number of votes that wouldbe necessary to take such action at a meeting. As permitted by British Virgin Islands law, shareholders’ consents need only a majority of shareholders signing totake effect. Our memorandum of association and articles of association provide that shareholders may approve corporate matters by way of a resolution consentedto at a meeting of shareholders or in writing by a majority of shareholders entitled to vote thereon.Shareholder ProposalsUnder Delaware corporate law, a shareholder has the right to put any proposal before the annual meeting of shareholders, provided it complies with thenotice provisions in the governing documents. A special meeting may be called by the board of directors or any other person authorized to do so in the governingdocuments, but shareholders may be precluded from calling special meetings. British Virgin Islands law and our memorandum of association and articles ofassociation provide that our directors shall call a meeting of the shareholders if requested in writing to do so by shareholders entitled to exercise at least 30% of thevoting rights in respect of the matter for which the meeting is requested.Sale of AssetsUnder Delaware corporate law, a vote of the stockholders is required to approve the sale of assets only when all or substantially all assets are being sold. Inthe British Virgin Islands, shareholder approval is required when more than 50% of the company’s total assets by value are being disposed of or sold.Dissolution; Winding UpUnder Delaware corporate law, unless the board of directors approves the proposal to dissolve, dissolution must be approved by shareholders holding100% of the total voting power of the corporation. Only if the dissolution is initiated by the board of directors may it be approved by a simple majority of thecorporation’s outstanding shares. Delaware corporate law allows a Delaware corporation to include in its certificate of incorporation a supermajority votingrequirement in connection with dissolutions initiated by the board. As permitted by British Virgin Islands law and our memorandum of association and articles ofassociation, we may be voluntarily liquidated under Part XII of the BVI Act by resolution of directors and resolution of shareholders if we have no liabilities and weare able to pay our debts as they fall due.Redemption of SharesUnder Delaware corporate law, any stock may be made subject to redemption by the corporation at its option or at the option of the holders of such stockprovided there remains outstanding shares with full voting power. Such stock may be made redeemable for cash, property or rights, as specified in the certificate ofincorporation or in the resolution of the board of directors providing for the issue of such stock. As permitted by British Virgin Islands law, and our memorandum ofassociation and articles of association, shares may be repurchased, redeemed or otherwise acquired by us. Our directors must determine that immediately followingthe redemption or repurchase we will be able to satisfy our debts as they fall due and the value of our assets exceeds our liabilities.51Variation of Rights of SharesUnder Delaware corporate law, a corporation may vary the rights of a class of shares with the approval of a majority of the outstanding shares of suchclass, unless the certificate of incorporation provides otherwise. As permitted by British Virgin Islands law, and our memorandum of association and articles ofassociation, if our share capital is divided into more than one class of shares, we may vary the rights attached to any class only with the consent in writing ofholders of not less than threefourths of the issued shares of that class and holders of not less than threefourths of the issued shares of any other class of shareswhich may be affected by the variation.Removal of DirectorsUnder Delaware corporate law, a director of a corporation with a classified board may be removed only for cause with the approval of a majority of theoutstanding shares entitled to vote, unless the certificate provides otherwise. As permitted by British Virgin Islands law and our memorandum of association andarticles of association, directors may be removed by resolution of directors or resolution of shareholders.MergersUnder the BVI Act, two or more companies may merge or consolidate in accordance with the statutory provisions. A merger means the merging of two ormore constituent companies into one of the constituent companies, and a consolidation means the uniting of two or more constituent companies into a newcompany. In order to merger or consolidate, the directors of each constituent company must approve a written plan of merger or consolidation which must beauthorized by a resolution of shareholders.Shareholders not otherwise entitled to vote on the merger or consolidation may still acquire the right to vote if the plan of merger or consolidation containsany provision which, if proposed as an amendment to the memorandum association or articles of association, would entitle them to vote as a class or series on theproposed amendment. In any event, all shareholders must be given a copy of the plan of merger or consolidation irrespective of whether they are entitled to vote atthe meeting or consent to the written resolution to approve the plan of merger or consolidation.Inspection of Books and RecordsUnder Delaware corporate law, any shareholder of a corporation may for any proper purpose inspect or make copies of the corporation’s stock ledger, list ofshareholders and other books and records. Holders of our shares have no general right under British Virgin Islands law to inspect or obtain copies of our list ofshareholders or our corporate records. However, we will provide holders of our shares with annual audited financial statements. See “Where You Can FindAdditional Information.”Conflict of InterestThe BVI Act provides that a director shall, after becoming aware that he is interested in a transaction entered into or to be entered into by the company,disclose that interest to the board of directors of the company. The failure of a director to disclose that interest does not affect the validity of a transaction enteredinto by the director or the company, so long as the director’s interest was disclosed to the board prior to the company’s entry into the transaction or was notrequired to be disclosed (for example where the transaction is between the company and the director himself or is otherwise in the ordinary course of business andon usual terms and conditions). As permitted by British Virgin Islands law and our memorandum of association and articles of association, a director interested in aparticular transaction may vote on it, attend meetings at which it is considered, and sign documents on our behalf which relate to the transaction.52Transactions with Interested ShareholdersDelaware corporate law contains a business combination statute applicable to Delaware public corporations whereby, unless the corporation hasspecifically elected not to be governed by such statute by amendment to its certificate of incorporation, it is prohibited from engaging in certain businesscombinations with an “interested shareholder” for three years following the date that such person becomes an interested shareholder. An interested shareholdergenerally is a person or group who or that owns or owned 15% or more of the target’s outstanding voting stock within the past three years. This has the effect oflimiting the ability of a potential acquirer to make a twotiered bid for the target in which all shareholders would not be treated equally. The statute does not apply if,among other things, prior to the date on which such shareholder becomes an interested shareholder, the board of directors approves either the businesscombination or the transaction that resulted in the person becoming an interested shareholder. This encourages any potential acquirer of a Delaware publiccorporation to negotiate the terms of any acquisition transaction with the target’s board of directors.British Virgin Islands law has no comparable provision. As a result, we cannot avail ourselves of the types of protections afforded by the Delawarebusiness combination statute. However, although British Virgin Islands law does not regulate transactions between a company and its significant shareholders, itdoes provide that such transactions must be entered into bona fide in the best interests of the company and not with the effect of constituting a fraud on theminority shareholders.Independent DirectorsThere are no provisions under Delaware corporate law or under the BVI Act that require a majority of our directors to be independent.Cumulative VotingUnder Delaware corporate law, cumulative voting for elections of directors is not permitted unless the company’s certificate of incorporation specificallyprovides for it. Cumulative voting potentially facilitates the representation of minority shareholders on a board of directors since it permits the minority shareholderto cast all the votes to which the shareholder is entitled on a single director, which increases the shareholder’s voting power with respect to electing such director.There are no prohibitions to cumulative voting under the laws of the British Virgin Islands, but our memorandum of association and articles of association do notprovide for cumulative votingAntitakeover Provisions in Our Memorandum of association and articles of associationSome provisions of our memorandum of association and articles of association may discourage, delay or prevent a change in control of our company ormanagement that shareholders may consider favorable, including provisions that authorize our board of directors to issue preference shares in one or more seriesand to designate the price, rights, preferences, privileges and restrictions of such preference shares.C. MATERIAL CONTRACTS.On January 25, 2018, the Company executed an Asset Exchange Agreement (“AEA”) with C Media Limited, a corporation organized under the laws of theCayman Islands (“C Media”), whereby the Company agreed to purchase all the capital stock and equity interests of LK Technology Ltd, together with its whollyowned subsidiaries MMB Limited and Mobile Media (China) Limited and all respective subsidiaries from C Media in exchange for (i) 185,412,599 ordinary shares ofthe Company, par value $0.01 per share (“Ordinary Shares”), (ii) 1,000,000 preferred shares of Kingtone (“Preferred Shares”) and (iii) all issued and outstandingcapital stock or equity interests of the Company’s subsidiary, Topsky InfoTech Holdings Pte Ltd., and its whollyowned subsidiary Xi’an Softech Co., Ltd.,including all entities effectively controlled by Xi’an Softech Co., Ltd. through contractual arrangements and variable business entities.To consummate the contemplated transactions described above, the Company obtained shareholder consent at a special meeting held on May 20, 2018, (i)to authorize 1,000,000 Preferred Shares, (ii) to authorize additional Ordinary Shares so that total authorized Ordinary Shares is equal to 250,000,000 shares, (iii) to listsuch Ordinary Shares on NASDAQ, and (iv) to approve the transactions contemplated in the Asset Exchange Agreement. Additionally, NASDAQ needed toapprove the contemplated transactions prior to consummation thereof. C Media had the right to terminate the AEA if the closing had not occurred (other thanthrough the failure of C Media to comply fully with its obligations under the AEA) on or before July 31, 2018. The transactions contemplated by the AEA wereconsummated on August 17, 2018.53On January 25, 2018, five shareholders of the Company including its largest shareholder and its Chief Executive Officer executed a Securities PurchaseAgreement, whereby such shareholders agreed to sell a total of 617,988 Ordinary Shares and 282,694 American Depository Shares of the Company to Redstone YYLManagement Limited, a company incorporated in the British Virgin Islands, in exchange for an aggregate purchase price of $1,897,860.09.On August 25, 2018, LK Technology entered into a Stock Purchase Agreement (the “Agreement”) with the shareholders (“Shareholders”) of SuperengineHoldings Limited, a limited liability company organized under the laws of the British Virgin Islands (the “Superengine”), pursuant to which LK Technology acquiredall of the issued and outstanding capital stock of Superengine for an aggregate purchase price of US$60 million (the “Purchase Price”), which are paid by theissuance of our Ordinary Shares in an amount equal to the quotient of (x) the Purchase Price divided by (y) the average of the closing prices of the Ordinary Shareson the NASDAQ Capital Market over the 12 months period preceding July 31, 2018. We are a party to the Agreement in connection with the issuance of theOrdinary Shares and certain other limited purposes.D. EXCHANGE CONTROLS.This section sets forth a summary of the most significant regulations or requirements that affect our business activities in China or our shareholders’ rightto receive dividends and other distributions from us.Regulations on Internet Content ProvidersThe Administrative Measures on Internet Information Services, or the Internet Content Measures, which was promulgated by the State Council onSeptember 25, 2000 and amended on January 8, 2011, set out guidelines on the provision of internet information services. The Internet Content Measures specifiesthat internet information services regarding news, publications, education, medical and health care, pharmacy and medical appliances, among other things, arerequired to be examined, approved and regulated by the relevant authorities. Internet information providers are prohibited from providing services beyond thoseincluded in the scope of their licenses or filings. Furthermore, the Internet Content Measures specifies a list of prohibited content. Internet information providers areprohibited from producing, copying, publishing or distributing information that is humiliating or defamatory to others or that infringes the legal rights of others.Internet information providers that violate such prohibition may face criminal charges or administrative sanctions. Internet information providers must monitor andcontrol the information posted on their websites. If any prohibited content is found, they must remove the content immediately, keep a record of such content andreport to the relevant authorities.The Internet Content Measures classifies internet information services into commercial internet information services and noncommercial internetinformation services. Commercial internet information services refer to services that provide information or services to internet users with charge. A provider ofcommercial internet information services must obtain an ICP License.Regulations on Internet Audiovideo Program ServicesOn December 20, 2007, the MII and the State Administration of Press, Publication, Radio, Film and Television, or the SAPPRFT, jointly issued theAdministrative Provisions for the Internet AudioVideo Program Service, or the Audiovideo Program Provisions, which came into effect on January 31, 2008 andwas amended on August 28, 2015. The Audiovideo Program Provisions defines “internet audiovideo program services” as producing, editing and integrating ofaudiovideo programs, supplying audiovideo programs to the public via the internet, and providing audiovideo programs uploading and transmission services to athird party. Entities providing internet audiovideo programs services must obtain an internet audiovideo program transmission license. Applicants for such licensesshall be stateowned or statecontrolled entities unless an internet audiovideo program transmission license has been obtained prior to the effectiveness of theAudiovideo Program Provisions in accordance with the thenineffect laws and regulations. In addition, foreigninvested enterprises are not allowed to engage inthe abovementioned services. According to the Audiovideo Program Provisions and other relevant laws and regulations, audiovideo programs provided by theentities supplying Internet audiovideo program services shall not contain any illegal content or other content prohibited by the laws and regulations, such as anycontent against the basic principles in the PRC Constitution, any content that damages the sovereignty of the country or national security, and any content thatdisturbs social order or undermine social stability. An audiovideo program that has already been broadcast shall be retained in full for at least 60 days. Movies,television programs and other media content used as Internet audiovideo programs shall comply with relevant administrative regulations on programs broadcaststhrough radio, movie and television channels. Entities providing services related to Internet audiovideo programs shall immediately delete the audiovideoprograms violating laws and regulations, keep relevant records, report relevant authorities and implement other regulatory requirements.54The Categories of the Internet AudioVideo Program Services, or the Audiovideo Program Categories, promulgated by SAPPRFT on March 10, 2017,classifies internet audio/video programs into four categories: (I) Category I internet audio/video program service, which is carried out with a form of radio station ortelevision station; (II) Category II internet audio/video program service, including (a) rebroadcasting service of current political news audio/video programs; (b)hosting, interviewing, reporting and commenting service of arts, entertainment, technology, finance and economics, sports, education and other specializedaudio/video programs; (c) producing (interviewing not included) and broadcasting service of arts, entertainment, technology, finance and economics, sports,education and other specialized audio/video programs; (d) producing and broadcasting service of internet films/dramas; (e) aggregating and broadcasting service offilms, television dramas and cartoons; (f) aggregating and broadcasting service of arts, entertainment, technology, finance and economics, sports, education andother specialized audio/video programs; and (g) live audio/video broadcasting service of cultural activities of common social organizations, sport events or otherorganization activities; and (III) Category III internet audio/video program service, including (a) aggregating service of online audio/video contents, and (b) rebroadcasting service of the audio/video programs uploaded by internet users; and (IV) Category III internet audio/video program service, including (a) rebroadcasting of the radio/television program channels; and (b) rebroadcasting of internet audio/video program channels.On May 27, 2016, the SAPPRFT issued the Notice on Relevant Issues concerning Implementing the Approval Works of Upgrading Mobile Internet AudioVideo Program Service, or the Mobile AudioVideo Program Notice. The Mobile AudioVideo Program Notice provides that the mobile Internet audiovideo programservices shall be deemed Internet audiovideo program service. Entities which have obtained the approvals to provide the Internet audiovideo program servicesmay use mobile WAP websites or mobile applications to provide audiovideo program services. Entities with regulatory approvals may operate mobile applicationsto provide the audiovideo program services The types of the programs shall be within the permitted scope as provided in the licenses and such mobile applicationsshall be filed with the SAPPRFT.Regulations on Production and Operation of Radio/Television ProgramsOn July 19, 2004, the SAPPRFT promulgated the Administrative Measures on the Production and Operation of Radio and Television Programs, or the Radioand Television Program Production Measures, which came into effect on August 20, 2004 and was amended on August 28, 2015. The Radio and Television ProgramProduction Measures provides that any business that produces or operates radio or television programs must first obtain a Radio and Television ProgramProduction and Operation Permit. Entities holding such permits shall conduct their business within the permitted scope as provided in their permits. In addition,foreigninvested enterprises are not allowed to engage in the abovementioned services.Regulations on Online Advertising ServicesOn April 24, 2015, the Standing Committee of the National People’s Congress enacted the Advertising Law of the People’s Republic of China, or the NewAdvertising Law, effective on September 1, 2015. The New Advertising Law increases the potential legal liability of advertising services providers and strengthensregulations of false advertising. On July 4, 2016, the State Administration for Industry and Commerce, or the SAIC, issued the Interim Measures of theAdministration of Online Advertising, or the SAIC Interim Measures, effective on September 1, 2016. The New Advertising Law and the SAIC Interim Measuresrequire that online advertisements may not affect users’ normal internet use and internet popup ads must display a “close” sign prominently and ensure onekeyclosing of the popup windows. The SAIC Interim Measures provides that all online advertisements must be marked “Advertisement” so that viewers can easilyidentify them as such. Moreover, the SAIC Interim Measures treats paid search results as advertisements that are subject to PRC advertisement laws, and requiresthat paid search results be conspicuously identified on search result pages as advertisements. The New Advertising Law and SAIC Interim Measures require us toconduct more stringent examination and monitoring of our advertisers and the content of their advertisements.55Regulations on Online GamesIn September 2009, the GAPP (currently known as the SAPPRFT), together with the National Copyright Administration, and the National Office ofCombating Pornography and Illegal Publications jointly issued the Notice on Further Strengthening on the Administration of Preexamination and Approval ofOnline Game and the Examination and Approval of Imported Online Game, or the Circular 13. The Circular 13 states that foreign investors are not permitted to investin online game operating businesses in the PRC via wholly foreignowned entities, Sinoforeign equity joint ventures or cooperative joint ventures or to exercisecontrol over or participate in the operation of domestic online game businesses through indirect means, such as other joint venture companies or contractual ortechnical arrangements. If the our contractual arrangements were deemed under the Circular 13 to be an “indirect means” for foreign investors to exercise controlover or participate in the operation of a domestic online game business, our contractual arrangements might be challenged by the SAPPRFT. We are not aware ofany online game companies which use the same or similar contractual arrangements having been challenged by the SAPPRFT as using those contractualarrangements as an “indirect means” for foreign investors to exercise control over or participate in the operation of a domestic online game business or having beenpenalized or ordered to terminate operations since the Circular 13 became effective. However it is unclear whether and how the Circular 13 might be interpreted orimplemented in the future. See “Risk Factors—If the PRC government finds that the agreements that establish the structure for operating certain of our operations inChina do not comply with PRC regulations relating to the relevant industries, or if these regulations or the interpretation of existing regulations change in the future,we could be subject to severe penalties or be forced to relinquish our interests in those operations.”The Interim Measures for the Administration of Online Games, or the Online Game Measures, issued by the MOC, which took effect on August 1, 2010 andamended on December 15, 2017, regulates a broad range of activities related to the online games business, including the development, production and operation ofonline games, the issuance of virtual currencies used for online games, and the provision of virtual currency trading services. The Online Game Measures providesthat any entity that is engaged in online game operations must obtain an Network Cultural Business Permit, and require the content of an imported online game to beexamined and approved by the MOC prior to the game’s launch and require a domestic online game to be filed with the MOC within 30 days after its launch. TheNotice of the Ministry of Culture on the Implementation of the Interim Measures for the Administration of Online Games, which was issued by the MOC on July 29,2010 to implement the Online Game Measures, (i) requires online game operators to protect the interests of online game users and specifies that certain terms thatmust be included in service agreements between online game operators and the users of their online games, (ii) requires content review of imported online gamesand filing procedures for domestic online games, (iii) emphasizes the protection of minors playing online games, and (iv) requests online game operators to promoterealname registration by their game users.Regulations on Information Security, Censorship and PrivacyThe Standing Committee of the National People’s Congress, China’s national legislative body, enacted the Decisions on the Maintenance of InternetSecurity on December 28, 2000 that may subject persons to criminal liabilities in China for any attempt to use the internet to: (i) gain improper entry to a computer orsystem of strategic importance; (ii) disseminate politically disruptive information; (iii) leak state secrets; (iv) spread false commercial information or (v) infringe uponintellectual property rights. In 1997, the Ministry of Public Security issued the Administration Measures on the Security Protection of Computer InformationNetwork with International Connections which prohibits using the internet to leak state secrets or to spread socially destabilizing materials. If an ICP license holderviolates these measures, the PRC government may revoke its ICP license and shut down its websites. Pursuant to the Ninth Amendment to the Criminal Law issuedby the Standing Committee of the National People’s Congress on August 29, 2015, effective on November 1, 2015, any ICP provider that fails to fulfill the obligationsrelated to internet information security as required by applicable laws and refuses to take corrective measures, will be subject to criminal liability for (i) any largescale dissemination of illegal information; (ii) any severe effect due to the leakage of users’ personal information; (iii) any serious loss of evidence of criminalactivities; or (iv) other severe situations, and any individual or entity that (i) sells or provides personal information to others unlawfully or (ii) steals or illegallyobtains any personal information will be subject to criminal liability in severe situations.56The Cybersecurity Law of the PRC, or the Cybersecurity Law, which was promulgated on November 7, 2016 by the Standing Committee of the NationalPeople’s Congress and came into effect on June 1, 2017, provides that network operators shall meet their cyber security obligations and shall take technicalmeasures and other necessary measures to protect the safety and stability of their networks. Under the Cybersecurity Law, network operators are subject to varioussecurity protectionrelated obligations, including: (i) network operators shall comply with certain obligations regarding maintenance of the security of internetsystems; (ii) network operators shall verify users’ identities before signing agreements or providing certain services such as information publishing or realtimecommunication services; (iii) when collecting or using personal information, network operators shall clearly indicate the purposes, methods and scope of theinformation collection, the use of information collection, and obtain the consent of those from whom the information is collected; (iv) network operators shall strictlypreserve the privacy of user information they collect, and establish and maintain systems to protect user privacy; (v) network operators shall strengthenmanagement of information published by users, and when they discover information prohibited by laws and regulations from publication or dissemination, theyshall immediately stop dissemination of that information, including taking measures such as deleting the information, preventing the information from spreading,saving relevant records, and reporting to the relevant governmental agencies.Regulations on Intellectual Property RightsRegulations on CopyrightThe Copyright Law of the PRC, or the Copyright Law, which took effect on June 1, 1991 and was amended in 2001 and in 2010, provides that Chinesecitizens, legal persons, or other organizations shall, whether published or not, own copyright in their copyrightable works, which include, among others, works ofliterature, art, natural science, social science, engineering technology and computer software. Copyright owners enjoy certain legal rights, including right ofpublication, right of authorship and right of reproduction. The Copyright Law as revised in 2010 extends copyright protection to Internet activities, productsdisseminated over the Internet and software products. In addition, Copyright Law provides for a voluntary registration system administered by the China CopyrightProtection Center, or the CPCC. According to the Copyright Law, an infringer of the copyrights shall be subject to various civil liabilities, which include ceasinginfringement activities, apologizing to the copyright owners and compensating the loss of copyright owner. Infringers of copyright may also subject to fines and/oradministrative or criminal liabilities in severe situations.The Computer Software Copyright Registration Measures, or the Software Copyright Measures, promulgated by the State Council on December 20, 2001and amended on January 30, 2013, regulates registrations of software copyright, exclusive licensing contracts for software copyright and assignment agreements.The National Copyright Administration, or the NCA administers software copyright registration and the CPCC, is designated as the software registration authority.The CPCC shall grant registration certificates to the Computer Software Copyrights applicants which meet the requirements of both the Software CopyrightMeasures and the Computer Software Protection Regulations (Revised in 2013).The Provisions of the Supreme People’s Court on Certain Issues Related to the Application of Law in the Trial of Civil Cases Involving Disputes onInfringement of the Information Network Dissemination Rights specifies that disseminating works, performances or audiovideo products by the internet users orthe internet service providers via the internet without the permission of the copyright owners shall be deemed to have infringed the right of dissemination of thecopyright owner.57The Measures for Administrative Protection of Copyright Related to Internet, which was jointly promulgated by the NCA and the MIIT on April 29, 2005and became effective on May 30, 2005, provides that upon receipt of an infringement notice from a legitimate copyright holder, an ICP operator must take remedialactions immediately by removing or disabling access to the infringing content. If an ICP operator knowingly transmits infringing content or fails to take remedialactions after receipt of a notice of infringement that harms public interest, the ICP operator could be subject to administrative penalties, including an order to ceaseinfringing activities, confiscation by the authorities of all income derived from the infringement activities, or payment of fines.On May 18, 2006, the State Council promulgated the Regulations on the Protection of the Right to Network Dissemination of Information (as amended in2013). Under these regulations, an owner of the network dissemination rights with respect to written works or audio or video recordings who believes thatinformation storage, search or link services provided by an Internet service provider infringe his or her rights may require that the Internet service provider delete, ordisconnect the links to, such works or recordings.Patent LawsAccording to the Patent Law of the PRC (Revised in 2008), the State Intellectual Property Office is responsible for administering patent law in the PRC. Thepatent administration departments of provincial, autonomous region or municipal governments are responsible for administering patent law within their respectivejurisdictions. The Chinese patent system adopts a firsttofile principle, which means that when more than one person file different patent applications for the sameinvention, only the person who files the application first is entitled to obtain a patent of the invention. To be patentable, an invention or a utility model must meetthree criteria: novelty, inventiveness and practicability. A patent is valid for twenty years in the case of an invention and ten years in the case of utility models anddesigns.Trademark LawsTrademarks are protected by the Trademark Law of the PRC (Revised in 2013) which was adopted in 1982 and subsequently amended in 1993, 2001 and 2013respectively as well as by the Implementation Regulations of the PRC Trademark Law adopted by the State Council in 2002 and as most recently amended on April29, 2014. The Trademark Office under the SAIC handles trademark registrations. The Trademark Office grants a tenyear term to registered trademarks and the termmay be renewed for another tenyear period upon request by the trademark owner. A trademark registrant may license its registered trademarks to another party byentering into trademark license agreements, which must be filed with the Trademark Office for its record. As with patents, the Trademark Law has adopted a firsttofile principle with respect to trademark registration. If a trademark applied for is identical or similar to another trademark which has already been registered or subjectto a preliminary examination and approval for use on the same or similar kinds of products or services, such trademark application may be rejected. Any personapplying for the registration of a trademark may not injure existing trademark rights first obtained by others, nor may any person register in advance a trademark thathas already been used by another party and has already gained a “sufficient degree of reputation” through such party’s use.Regulations on Domain NamesThe MIIT promulgated the Measures on Administration of Internet Domain Names, or the Domain Name Measures, on August 24, 2017, which took effecton November 1, 2017 and replaced the Administrative Measures on China Internet Domain Name promulgated by MII on November 5, 2004. According to theDomain Name Measures, the MIIT is in charge of the administration of PRC internet domain names. The domain name registration follows a firsttofile principle.Applicants for registration of domain names shall provide the true, accurate and complete information of their identities to domain name registration serviceinstitutions. The applicants will become the holder of such domain names upon the completion of the registration procedure.Relevant Regulations of the Hightech EnterpriseThe Ministry of Information Industry, the Ministry of Science and Technology and the State Tax Bureau collectively promulgated and issued the“Certifying Standard and Managing Measures for Hightech Enterprises” and “the Hightech Areas of Main National Support” on April 14, 2008 to certify the Hightech enterprise and encourage and support the development of the Chinese Hightech enterprises. Under the Hightech Enterprises Measures, the enterprise canenjoy the favorable tax policy when it is certified as a Hightech enterprise by the Ministry of Information Industry, the Ministry of Science and Technology and theState Tax Bureau or with its provincial branch according to the stipulated standard. The software and computer and network technology are recognized as the mainnational supported Hightech field. Kingtone Information is a Hightech enterprise and enjoys a favorable income tax rate of 15%.58Laws and Regulations of Intellectual Property RightsChina has adopted legislation governing intellectual property rights, including patents, copyrights and trademarks. China is a signatory to the maininternational conventions on intellectual property rights and became a member of the Agreement on Trade Related Aspects of Intellectual Property Rights upon itsaccession to the WTO in December 2001.PatentsThe “Patent Law of the People’s Republic of China” promulgated by the Standing Committee of the National People's Congress, adopted in 1985 andrevised in 1992, 2001 and 2008, protects registered patents. The State Intellectual Property Office of PRC handles granting patent rights, providing for a twentyyearpatent term for inventions and a tenyear patent term for utility models and designs. As we disclosed in Item 4, of this transition report on Form 20F, throughKingtone Information, we have been granted one invention patent “wireless video transmission system based on BREW platform” by the State Intellectual PropertyOffice (“SIPO”) of PRC on September 23, 2009 and therefore such invention is entitled to all the protections provided under the Patent Law for twenty years.Computer Software Copyright and AdministrationOn December 20, 2001, the State Council of PRC issued the “Regulation for Computer Software Protection of the People’s Republic of China” (the“Regulation for Computer Software Protection”) which became effective on January 1, 2002 to protect the interests of copyright owners, to promote the research andapplication and to encourage the development of the Chinese software industry. Under the Regulation for Computer Software Protection, natural persons, legalpersons or any other organizations shall have a copyright on the software developed by such persons no matter whether such software has been published. Theprotection period of software copyrights owned by the legal person or other organization is fifty years and expires on December 31 of the fiftieth year from the initialpublication date of such computer software. Currently, Kingtone Information has twelve registration certificates for software copyrights.TrademarksThe “Trademark Law of the People’s Republic of China” promulgated by the State Council of PRC, adopted in 1982 and revised in 1993 and 2001, protectsregistered trademarks. The Trademark Office under the Chinese State Administration for Industry and Commerce handles trademark registrations and grants a termof ten years to registered trademarks which are renewable for another ten years after the application to the Trademark Office by the owners of the trademarks.Trademark license agreements must be filed with the Trademark Office for record. China has a “firsttoregister” system that requires no evidence of prior use orownership. Kingtone Information has its registered trademarks as described in Item 4 of this transition report on Form 20F. Accordingly, such trademarks areentitled to the protection under the Trademark Law.Foreign Currency ExchangeOn August 29, 2008, the SAFE issued the Notice of the General Affairs Department of the State Administration of Foreign Exchange on the RelevantOperating Issues concerning the Improvement of the Administration of Payment and Settlement of Foreign Currency Capital of Foreignfunded Enterprises, orCircular 142. Pursuant to Circular 142, RMB converted from the foreign currencydenominated capital of a foreigninvested company may only be used for purposeswithin the business scope approved by the applicable governmental authority and may not be used for equity investments within the PRC unless specificallyprovided for otherwise. The use of such Renminbi capital may not be changed without SAFE’s approval and may not in any case be used to repay Renminbi loans ifthe proceeds of such loans have not been used.59See “Risk Factors — Risks Related to Doing Business in China — PRC regulation of loans and direct investment by offshore holding companies to PRCentities may delay or prevent us from using the proceeds of our initial public offering to make loans or additional capital contributions to our PRC operatingsubsidiaries, which could materially and adversely affect our liquidity and our ability to fund and expand our business”.Dividend DistributionWe are a British Virgin Islands holding company and substantially all of our operations are conducted through LK Technology. We rely on dividends andother distributions from our LK Technology and its subsidiaries to provide us with our cash flow and allow us to pay dividends on the shares underlying our ADSsand meet our other obligations. The principal regulations governing distribution of dividends paid by wholly foreignowned enterprises include:1.Wholly ForeignOwned Enterprise Law (1986), as amended; and2.Implementation Rules on Wholly ForeignOwned Enterprise Law (1990), as amended.Under these regulations, wholly foreignowned enterprises in China may pay dividends only out of their accumulated profits, if any, determined inaccordance with PRC accounting standards and regulations. In addition, wholly foreignowned enterprises in China are required to set aside at least 10% of theiraftertax profit based on PRC accounting standards each year to its general reserves until the accumulative amount of such reserves reach 50% of its registeredcapital. These reserves are not distributable as cash dividends. The board of directors of a FIE has the discretion to allocate a portion of its aftertax profits to staffwelfare and bonus funds, which may not be distributed to equity owners except in the event of liquidation.Regulation of Foreign Exchange in Certain Onshore and Offshore TransactionsIn October 2005, the SAFE issued the Notice on Issues Relating to the Administration of Foreign Exchange in Fundraising and Return InvestmentActivities of Domestic Residents Conducted via Offshore Special Purpose Companies, or SAFE Notice 75, which became effective as of November 1, 2005, and wasfurther supplemented by two implementation notices issued by the SAFE on November 24, 2005 and May 29, 2007, respectively. Under Circular 75, prior registrationwith the local SAFE branch is required for PRC residents to establish or to control an offshore company for the purposes of financing that offshore company withassets or equity interests in an onshore enterprise located in the PRC. An amendment to the registration or filing with the local SAFE branch by such PRC resident isalso required for the injection of equity interests or assets of an onshore enterprise in the offshore company or overseas funds raised by such offshore company, orany other material change with respect to the offshore company in connection with any increase or decrease of capital, transfer of shares, merger, division, equityinvestment, debt investment, or creation of any security interest over any assets located in the PRC.Under SAFE Notice 75, PRC residents are further required to repatriate into the PRC all of their dividends, profits or capital gains obtained from theirshareholdings in the offshore entity within 180 days of their receipt of such dividends, profits or capital gains. The registration and filing procedures under SAFENotice 75 are prerequisites for other approval and registration procedures necessary for capital inflow from the offshore entity, such as inbound investments orshareholders loans, or capital outflow to the offshore entity, such as the payment of profits or dividends, liquidating distributions, equity sale proceeds, or thereturn of funds upon a capital reduction. Therefore, failure to comply with such registration may subject us to certain restrictions on, including but not limited to, theincrease of the registered capital of our PRC subsidiary, making loans to our PRC subsidiary, and making distributions to us from our onshore companies.Regulations of Overseas Investments and ListingsOn August 8, 2006, six PRC regulatory agencies, including the MOFCOM, the State Assets Supervision and Administration Commission, the StateAdministration for Taxation, the State Administration for Industry and Commerce, the CSRC and the SAFE, jointly adopted the New M&A Rule, which becameeffective on September 8, 2006. This regulation, among other things, includes provisions that purport to require that an offshore SPV formed for purposes ofoverseas listing of equity interests in PRC companies and controlled directly or indirectly by PRC companies or individuals obtain the approval of the CSRC prior tothe listing and trading of such SPV’s securities on an overseas stock exchange.60On September 21, 2006, the CSRC published on its official website procedures regarding its approval of overseas listings by SPVs. The CSRC approvalprocedures require the filing of a number of documents with the CSRC and it would take several months to complete the approval process.The application of the New M&A Rule with respect to overseas listings of SPVs remains unclear with no consensus currently existing among the leadingPRC law firms regarding the scope of the applicability of the CSRC approval requirement.We believe that, based on our understanding of the current PRC laws, regulations and rules and the procedures announced on September 21, 2006, there isno requirement in this regulation that would require an application to be submitted to the MOFCOM or the CSRC for the approval of the listing and trading of ourADSs on the NASDAQ Capital Market.See “Risk Factors — Risks Related to Doing Business in China — If we were required to obtain the prior approval of the China Securities RegulatoryCommission, or CSRC, of the listing and trading of our ADSs on the NASDAQ Capital Market, we may face regulatory actions or other sanctions from the CSRC orother PRC regulatory agencies.”E. TAXATIONThe following discussion sets forth the material British Virgin Islands, PRC and U.S. federal income tax consequences of an investment in our ADSs andthe ordinary shares represented by our ADSs, sometimes referred to collectively as the “securities”. It is based upon laws and relevant interpretations thereof ineffect as of the date of this report, all of which are subject to change. This discussion does not deal with all possible tax consequences relating to an investment inthe securities, such as the tax consequences under state, local and other tax laws. As used in this discussion, “we,” “our” and “us” refers only to LuokungTechnology Ltd.British Virgin Islands TaxationUnder the law of the British Virgin Islands as currently in effect, a holder of the securities who is not a resident of the British Virgin Islands is not liable forBritish Virgin Islands tax on dividends paid with respect to the securities and all holders of the securities are not liable to the British Virgin Islands for tax on gainsrealized during that year on the sale or disposal of such ordinary shares. The British Virgin Islands does not impose a withholding tax on dividends paid by acompany incorporated or reregistered under the BVI Act.There are no capital gains, gift or inheritance taxes levied by the British Virgin Islands on companies incorporated under the BVI Act. In addition, shares ofcompanies incorporated under the BVI Act are not subject to transfer taxes, stamp duties or similar charges.There is no income tax treaty or convention currently in effect between the United States and the British Virgin Islands or between China and the BritishVirgin Islands.61People’s Republic of China TaxationIn 2007, the PRC National People’s Congress enacted the new Enterprise Income Tax Law (the “EIT Law”), which became effective on January 1, 2008. Thenew EIT Law imposes a single uniform income tax rate of 25% on all Chinese enterprises, including foreigninvested enterprises, and levies a withholding tax rate of10% on dividends payable by Chinese subsidiaries to their foreign shareholders unless any such foreign shareholders’ jurisdiction of incorporation has a tax treatywith China that provides for a different withholding agreement. Under the new EIT Law, enterprises established outside China but deemed to have a “de factomanagement body” within the country may be considered “resident enterprises” for Chinese tax purposes and, therefore, may be subject to an enterprise income taxrate of 25% on their worldwide income. Pursuant to the implementation rules of the new EIT Law, a “de facto management body” is defined as a body that hasmaterial and overall management control over the business, personnel, accounts and properties of the enterprise. Although substantially all members of ourmanagement are located in China, it is unclear whether Chinese tax authorities would require (or permit) us to be treated as PRC resident enterprises. If we aredeemed a Chinese tax resident enterprise, we may be subject to an enterprise income tax rate of 25% on our worldwide income, excluding dividends received directlyfrom another Chinese tax resident enterprise, as well as PRC enterprise income tax reporting obligations. If we are not deemed to be a Chinese tax resident enterprise,we may be subject to certain PRC withholding taxes. See “Risk Factors — Risks Related to Doing Business in China — Our holding company structure may limit thepayment of dividends.” As a result of such changes, our historical tax rates may not be indicative of our tax rates for future periods and the value of our ADSs orordinary shares may be adversely affected. If we are deemed a PRC resident enterprise and investors’ gain from the sales of the securities and dividends payable byus are deemed sourced from China, such gains and dividends payable by us may be subject to PRC tax. See “Risk Factors — Risks Related to Doing Business inChina — If we were deemed a “resident enterprise” by PRC tax authorities, we could be subject to tax on our global income at the rate of 25% under the New EITLaw and our nonPRC shareholders could be subject to certain PRC taxes.United States Federal Income TaxationGeneralThe following is a discussion of the material U.S. federal income tax consequences to an investor of purchasing, owning and disposing of our securities.This discussion does not address any aspects of U.S. federal gift or estate tax or the state, local or nonU.S. tax consequences of an investment in the securities.YOU SHOULD CONSULT YOUR OWN TAX ADVISORS CONCERNING THE U.S. FEDERAL, STATE, LOCAL AND NONU.S. TAX CONSEQUENCES OFPURCHASING, OWNING AND DISPOSING OF THE SECURITIES IN YOUR PARTICULAR SITUATION.This discussion applies only to those investors that purchase the securities in this offering and that hold the securities as capital assets within the meaningof section 1221 of the Internal Revenue Code of 1986, as amended (the “Code”). This section does not apply to holders that may be subject to special tax rules,including but not limited to:1.dealers in securities or currencies;2.traders in securities that elect to use a marktomarket method of accounting;3.banks, insurance companies or certain financial institutions;4.taxexempt organizations;5.governments or agencies or instrumentalities thereof;6.partnerships or other entities treated as partnerships or other passthrough entities for U.S. federal income tax purposes or persons holding thesecurities through such entities;7.regulated investment companies or real estate investment trusts;8.holders subject to the alternative minimum tax;9.holders that actually or constructively own 10% or more of the total combined voting power of all classes of our shares entitled to vote;10.holders that acquired the securities pursuant to the exercise of employee stock options, in connection with employee stock incentive plans orotherwise as compensation;11.holders that hold the securities as part of a straddle, hedging or conversion transaction; or12.holders whose functional currency is not the U.S. dollar.62This section is based on the Code, its legislative history, existing and proposed U.S. Treasury regulations, published rulings and other administrativeguidance of the U.S. Internal Revenue Service (the “IRS”) and court decisions, all as in effect on the date hereof. These laws are subject to change or differentinterpretation by the IRS or a court, possibly on a retroactive basis.We have not sought, and will not seek, a ruling from the IRS as to any U.S. federal income tax consequence described herein. The IRS may disagree withthe discussion herein, and its determination may be upheld by a court. Moreover, there can be no assurance that future legislation, regulation, administrative rulingsor court decisions will not adversely affect the accuracy of the statements in this discussion.The discussion below of the U.S. federal income tax consequences to “U.S. Holders” will apply to a beneficial owner of the securities that is for U.S. federalincome tax purposes:1.a citizen or resident of the United States;2.a corporation (or other entity treated as a corporation) that is created or organized (or treated as created or3.organized) under the laws of the United States, any state thereof or the District of Columbia;4.an estate whose income is subject to U.S. federal income tax regardless of its source; or5.a trust if (a) a U.S. court can exercise primary supervision over the trust’s administration and one or more U.S.6.persons are authorized to control all substantial decisions of the trust, or (b) if the trust has a valid election in effect under applicable U.S.Treasury regulations to be treated as a U.S. person.If a beneficial owner of the securities is not described as a U.S. Holder and is not an entity treated as a partnership or other passthrough entity for U.S.federal income tax purposes, such owner will be considered a “NonU.S. Holder.” The material U.S. federal income tax consequences applicable specifically to NonU.S. Holders are described below under the heading “Tax Consequences to NonU.S. Holders.”If a partnership (including for this purpose any entity treated as a partnership for U.S. tax purposes) is a beneficial owner of the securities, the U.S. taxtreatment of a partner in the partnership generally will depend on the status of the partner and the activities of the partnership. A holder of the securities that is apartnership or partners in such a partnership should consult their own tax advisors about the U.S. federal income tax consequences of holding and disposing of thesecurities.This discussion assumes that any distributions made (or deemed made) on the securities and any consideration received by a holder in consideration forthe sale or other disposition of the securities will be in U.S. dollars. This discussion also assumes that the representations contained in the Deposit Agreement aretrue and that the obligations in the Deposit Agreement and any related agreement will be complied with in accordance with their terms. Finally, this discussionassumes that each ADS will only represent ordinary shares in us, and will not represent any other type of security, such as a bond, cash or other property.63For U.S. federal income tax purposes, a holder of an ADS will be treated as the beneficial owner of the shares represented by such ADS and an exchange ofan ADS for ordinary shares will not be subject to U.S. federal income tax. The U.S. Treasury has expressed concerns that parties to whom ADSs are prereleased, orintermediaries in the chain of ownership between holders of ADSs and the issuer of the securities underlying the ADSs may be taking actions that are inconsistentwith the claiming of foreign tax credits by U.S. Holders of ADSs. Such actions would also be inconsistent with the claiming of the reduced rate of tax applicable todividends received by certain noncorporate U.S. Holders, including individual U.S. Holders, as described below under “Tax Consequences to U.S.Holders — Taxation of Distributions.” Accordingly, the availability of foreign tax credits or the reduced tax rate for dividends received by certain noncorporate U.S.Holders, including individual U.S. Holders, could be affected by actions taken by parties to whom the ADSs are released, or by future actions by the U.S. Treasury.Tax Consequences to U.S. HoldersTaxation of DistributionsSubject to the passive foreign investment company, or PFIC, rules discussed below, the gross amount of any cash distributions we make with respect to aU.S. Holder in respect of such U.S. Holder’s ADSs or shares will generally be treated as dividend income if the distributions are made from our current oraccumulated earnings and profits, calculated according to U.S. federal income tax principles. Cash dividends will generally be subject to U.S. federal income tax asordinary income on the day the U.S. Holder actually or constructively receives such income. With respect to noncorporate U.S. Holders for taxable years beginningbefore January 1, 2011, dividends may be taxed at the lower applicable longterm capital gains rate provided that (a) our ADSs or shares are readily tradable on anestablished securities market in the United States, or, in the event we are deemed to be a Chinese “resident enterprise” under the EIT Law (as described above under“People’s Republic of China Taxation”), we are eligible for the benefits of the income tax treaty between the United States and the PRC (the “U.S.PRC Tax Treaty”),(b) we are not a PFIC, as discussed below, for either the taxable year in which the dividend was paid or the preceding taxable year, and (c) certain holding periodrequirements are met. Under published IRS authority, ADSs are considered for purposes of clause (a) above to be readily tradable on an established securitiesmarket in the United States only if they are listed on certain exchanges, which presently include the NASDAQ Capital Market. U.S. Holders should consult their owntax advisors regarding the availability of the lower rate for any dividends paid with respect to our ADSs or shares.Dividends will not be eligible for the dividendsreceived deduction allowed to U.S. corporations in respect of dividends received from other U.S.corporations. Generally, if we distribute noncash property as a dividend (other than pro rata distributions of our shares) out of our current or accumulated earningsand profits (as determined for U.S. federal income tax purposes), a U.S. Holder generally will include in income an amount equal to the fair market value of theproperty, on the date that it is distributed.Distributions in excess of current and accumulated earnings and profits, as determined for U.S. federal income tax purposes, will be treated as a nontaxablereturn of capital to the extent of the U.S. Holder’s basis in its shares or ADSs and thereafter as capital gain. However, we do not plan on calculating our earnings andprofits in accordance with U.S. federal income tax principles. U.S. holders therefore should generally assume that any distributions paid by us will be treated asdividends for U.S. federal income tax purposes.If PRC taxes apply to dividends paid by us to a U.S. Holder (see “People’s Republic of China Taxation,” above), such taxes may be treated as foreign taxeseligible for credit against such holder’s U.S. federal income tax liability (subject to certain limitations), and a U.S. Holder may be entitled to certain benefits under theU.S.PRC Tax Treaty. The rules relating to the U.S. foreign tax credit are complex. U.S. Holders should consult their own tax advisors regarding the creditability ofany such PRC tax and their eligibility for the benefits of the U.S.PRC Tax Treaty.64Taxation of Dispositions of SharesSubject to the PFIC rules discussed below, a U.S. holder that sells or otherwise disposes of its shares will recognize capital gain or loss for U.S. federalincome tax purposes equal to the difference between the amount realized and such U.S. Holder’s tax basis in its shares. Prior to January 1, 2011, capital gains of anoncorporate U.S. holder are generally taxed at a maximum rate of 15% where the property is held for more than one year (and 20% thereafter). The ability to deductcapital losses is subject to limitations.If PRC taxes apply to any gain from the disposition of our shares by a U.S. Holder, such taxes may be treated as foreign taxes eligible for credit against suchholder’s U.S. federal income tax liability (subject to certain limitations), and a U.S. Holder may be entitled to certain benefits under the U.S.PRC Tax Treaty. U.S.Holders should consult their own tax advisors regarding the creditability of any such PRC tax and their eligibility for the benefits of the U.S.PRC Tax Treaty.Passive Foreign Investment CompanyWe do not expect to be a PFIC for U.S. federal income tax purposes for our current tax year or in the foreseeable future. The determination of whether or notwe are a PFIC in respect of any of our taxable years is a factual determination that cannot be made until the close of the applicable tax year and that is based on thetypes of income we earn and the value and composition of our assets (including goodwill), all of which are subject to change. Therefore, we can make no assurancesthat we will not be a PFIC in respect of our current taxable year or in the future.In general, we will be a PFIC in any taxable year if either:1.at least 75% of our gross income for the taxable year is passive income; or2.at least 50% of the value, determined on the basis of a quarterly average, of our assets is attributable to assets that produce or are held for theproduction of passive income.Passive income includes dividends, interest, royalties, rents (other than certain rents and royalties derived in the active conduct of a trade or business), theexcess of gains over losses from certain types of transactions in commodities, annuities and gains from assets that produce passive income. We will be treated asowning our proportionate share of the assets and earning our proportionate share of the income of any corporation in which we own, directly or indirectly, at least25% (by value) of the stock.If we are treated as a PFIC in any year during which a U.S. Holder owns the securities, and such U.S. Holder did not make a marktomarket election, asdescribed below, the U.S. Holder will be subject to special rules with respect to:1.any gain recognized by the U.S. Holder on the sale or other disposition of its shares; and any excess distribution that we make to the U.S. Holder(generally, the excess of the amount of any distributions to such U.S. Holder during a single taxable year of such U.S. Holder over 125% of theaverage annual distributions received by such U.S. Holder in respect of the shares during the three preceding taxable years of such U.S. Holder or,if shorter, such U.S. Holder holding period for the shares).Under these rules:2.the gain or excess distribution will be allocated ratably over the U.S. Holder’s holding period for the shares;3.the amount allocated to the U.S. Holder’s taxable year in which it realized the gain or excess distribution or to the period in the U.S. Holder’sholding period before the first day of our first taxable year in which we are a PFIC will be taxed as ordinary income;4.the amount allocated to other taxable years (or portions thereof) of the U.S. Holder and included in its holding period will be taxed at the highesttax rate in effect for that year; and5.the interest charge generally applicable to underpayments of tax will be imposed in respect of the tax attributable to each such other taxable yearof the U.S. Holder. 6.Special rules apply for calculating the amount of the foreign tax credit with respect to excess distributions by a PFIC.65Alternatively, if a U.S. Holder, at the close of its taxable year, owns ordinary shares in a PFIC that are treated as marketable stock, the U.S. Holder may makea marktomarket election with respect to such shares for such taxable year. Our shares will be “marketable” to the extent that they remain regularly traded on anational securities exchange, such as the NASDAQ Capital Market. If a U.S. Holder makes this election in a timely fashion, it will not be subject to the PFIC rulesdescribed above. Instead, in general, the U.S. Holder will include as ordinary income each year the excess, if any, of the fair market value of its shares at the end ofthe taxable year over its adjusted basis in its shares. Any ordinary income resulting from this election would generally be taxed at ordinary income tax rates andwould not be eligible for the reduced rate of tax applicable to qualified dividend income. The U.S. Holder will also be allowed to take an ordinary loss in respect ofthe excess, if any, of the adjusted basis of its shares over the fair market value at the end of the taxable year (but only to the extent of the net amount of previouslyincluded income as a result of the marktomarket election). The U.S. Holder’s basis in the shares will be adjusted to reflect any such income or loss amounts. U.S.Holders should consult their own tax advisor regarding potential advantages and disadvantages of making a marktomarket election with respect to their shares.Alternatively, a U.S. Holder of stock in a PFIC may avoid the PFIC tax consequences described above in respect to our or shares by making a timely“qualified electing fund” election to include in income its pro rata share of our net capital gains (as longterm capital gain) and other earnings and profits (asordinary income), on a current basis, in each case whether or not distributed, in the taxable year of the U.S. Holder in which or with which our taxable year ends.However, the qualified electing fund election is available only if the PFIC provides such U.S. Holder with certain information regarding its earnings and profits asrequired under applicable U.S. Treasury regulations. We do not intend to furnish the information that a U.S. Holder would need in order to make a qualified electingfund election. Therefore, U.S. Holders will not be able to make or maintain such election with respect to their or shares.If a U.S. Holder owns our shares or during any year that we are a PFIC, such holder must file U.S. Internal Revenue Service Form 8621 regarding suchholder’s shares or and the gain realized on the disposition of the shares. The reduced tax rate for dividend income, discussed in “Taxation of Distributions,” is notapplicable to dividends paid by a PFIC. U.S. Holders should consult with their own tax advisors regarding reporting requirements with respect to their shares.Tax Consequences to NonU.S. HoldersDividends paid to a NonU.S. Holder in respect of our or shares generally will not be subject to U.S. federal income tax, unless the dividends are effectivelyconnected with the NonU.S. Holder’s conduct of a trade or business within the United States (and, if required by an applicable income tax treaty, are attributable toa permanent establishment or fixed base that such holder maintains in the United States).In addition, a NonU.S. Holder generally will not be subject to U.S. federal income tax on any gain attributable to a sale or other disposition of our or sharesunless such gain is effectively connected with its conduct of a trade or business in the United States (and, if required by an applicable income tax treaty, isattributable to a permanent establishment or fixed base that such holder maintains in the United States) or the NonU.S. Holder is an individual who is present in theUnited States for 183 days or more in the taxable year of sale or other disposition and certain other conditions are met (in which case, such gain from United Statessources generally is subject to tax at a 30% rate or a lower applicable tax treaty rate).Dividends and gains that are effectively connected with the NonU.S. Holder’s conduct of a trade or business in the United States (and, if required by anapplicable income tax treaty, are attributable to a permanent establishment or fixed base in the United States) generally will be subject to tax in the same manner as fora U.S. Holder and, in the case of a NonU.S. Holder that is a corporation for U.S. federal income tax purposes, may also be subject to an additional branch profits taxat a 30% rate or a lower applicable tax treaty rate.66Information Reporting and Backup Withholding In general, information reporting for U.S. federal income tax purposes generally should apply to distributions made on the securities within the UnitedStates to a noncorporate U.S. Holder and to the proceeds from sales and other dispositions of the securities by a noncorporate U.S. Holder to or through a U.S.office of a broker. Payments made (and sales and other dispositions effected at an office) outside the United States generally should be subject to informationreporting in limited circumstances.Dividend payments made to U.S. Holders and proceeds paid from the sale or other disposition the securities may be subject to information reporting to theIRS and possible U.S. federal backup withholding at a current rate of 28%. Certain exempt recipients, such as corporations, are not subject to these informationreporting requirements. Backup withholding will not apply to a U.S. Holder who furnishes a correct taxpayer identification number and makes any other requiredcertification, or who is otherwise exempt from backup withholding. U.S. Holders who are required to establish their exempt status must provide a duly executed IRSForm W9.A NonU.S. Holder generally may eliminate the requirement for information reporting and backup withholding by providing certification of its foreignstatus, under penalties of perjury, on a duly executed applicable IRS Form W8 or by otherwise establishing an exemption.Backup withholding is not an additional tax. Rather, the amount of any backup withholding will be allowed as a credit against a U.S. Holder’s or a nonU.S.Holder’s U.S. federal income tax liability and may entitle such holder to a refund, provided that certain required information is timely furnished to the IRS.PROSPECTIVE PURCHASERS OF OUR SECURITIES SHOULD CONSULT WITH THEIR OWN TAX ADVISORS REGARDING THE APPLICATION OFTHE U.S. FEDERAL INCOME TAX LAWS TO THEIR PARTICULAR SITUATIONS AS WELL AS ANY ADDITIONAL TAX CONSEQUENCES RESULTING FROMPURCHASING, HOLDING OR DISPOSING OF OUR SECURITIES, INCLUDING THE APPLICABILITY AND EFFECT OF THE TAX LAWS OF ANY STATE, LOCALOR NONU.S. JURISDICTION, INCLUDING ESTATE, GIFT, AND INHERITANCE LAWS AND APPLICABLE TAX TREATIES.F. DIVIDENDS AND PAYING AGENTS.Not applicable.G. STATEMENT BY EXPERTS.None.H. DOCUMENTS ON DISPLAY.We previously filed a registration statement on Form F1 (File No. 333166056) with the SEC relating to our initial public offering in May 2010. This transition reportdoes not contain all of the information in the registration statement and the exhibits and financial statements included with the registration statement. References inthis transition report to any of our contracts, agreements or other documents are not necessarily complete, and you should refer to the exhibits attached to theregistration statement for copies of the actual contracts, agreements or documents. In addition, we will file transition reports on Form 20F and submit otherinformation under cover of Form 6K. As a foreign private issuer, we are exempt from the proxy requirements of Section 14 of the Exchange Act and our officers,directors and principal shareholders will be exempt from the insider shortswing disclosure and profit recovery rules of Section 16 of the Exchange Act. You may readand copy the registration statement, the related exhibits and other materials we file with the SEC at the SEC's public reference room in Washington, D.C. at 100 FStreet, Room 1580, N.E., Washington, D.C.20549. You can also request copies of those documents, upon payment of a duplicating fee, by writing to the SEC. Pleasecall the SEC at 1800SEC0330 for further information on the operation of the public reference rooms. The SEC also maintains an Internet site that contains reports,proxy and information statements and other information regarding issuers that file with the SEC. The website address is http://www.sec.gov. You may also request acopy of these filings, at no cost, by writing us at LAB 32, SOHO 3Q, No 9, Guanghua Road, Chaoyang District, Beijing, People’s Republic of China, 100020 ortelephoning us at (86) 1085866721.67I. SUBSIDIARY INFORMATIONFor a listing of our subsidiaries, see “Item 4. Information on the Company – C. Organizational Structure.”ITEM 11. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.Interest Rate RiskAs of December 31, 2017, we had no shortterm or longterm borrowings. If we borrow money in future periods, we may be exposed to interest rate risk. Ourexposure to market risk for changes in interest rates relates primarily to the interest income generated by our cash deposits with our banks and heldtomaturityinvestments. We have not used any derivative financial instruments in our investment portfolio. Interest earnings instruments carry a degree of interest rate risk. Wehave not been exposed, nor do we anticipate being exposed to material risks due to changes in interest rates. However, our future interest income may fall short ofexpectations due to changes in interest rates. Foreign Exchange RiskTranslation adjustments amounted to $90,671 and $387,375 gain as of the fiscal year ended December 31, 2017 and 2016, respectively. The Companytranslated balance sheet amounts with the exception of equity at December 31, 2017 at RMB 6.5342 to $1.00 as compared to RMB 6.9370 to $1.00 at December 31,2016. The Company stated equity accounts at their historical rate. The average translation rates applied to income statement accounts for the fiscal year endedDecember 31, 2017 and 2016 were RMB6.7356 and RMB 6.7153 to US$1.00, respectively. So far, the PRC government has been able to manage a stable exchange ratebetween RMB and the U.S. Dollar. Our future downward translation adjustments may occur and can be significant due to changes in such exchange rate.If we decide to convert our RMB into U.S. dollars for the purpose of making payments for dividends on our ordinary shares or for other business purposes,appreciation of the U.S. dollar against the RMB would have a negative effect on the U.S. dollar amount available to us.The PRC government imposes strict restrictions on PRC resident companies regarding converting RMB into foreign currencies and vice versa under capitalaccount transactions, such as receiving equity investments from outside of the PRC, making equity investments outside of the PRC, borrowing money from orlending money outside of the PRC, and repaying debt or remitting liquidated assets and/or accumulated profits outside of the PRC. These transactions have to beapproved by the relevant PRC government authorities, including but not limited to the commerce bureau, the tax bureau and the State Administration of ForeignExchange, or SAFE, and have to be conducted at banks entrusted by the local SAFE branch. As our business continues to grow, we may need to continuouslyfinance our PRC subsidiaries by raising capital from outside of the PRC. The restriction on converting RMB into foreign currencies, and vice versa, may limit ourability to use capital resources from outside of the PRC. Such restrictions may also limit our ability to remit profits from our PRC subsidiaries outside of the PRC,therefore potentially limiting our ability to pay dividends to our shareholders. In addition, such restrictions will limit our ability to freely transfer temporary excesscash in our or our subsidiaries’ bank accounts in and out of the PRC, therefore limiting our ability to conduct crossborder cash management activities to optimizethe utilization of our cash.InflationAlthough China has experienced an increasing inflation rate, inflation has not had a material impact on our results of operations in recent years. Accordingto the National Bureau of Statistics of China, the change in the consumer price index in China was 0.46%, (0.77%), and 1.16% in 2001, 2002 and 2003, respectively.However, in connection with a 3.9% increase in 2004, the PRC government announced measures to restrict lending and investment in China in order to reduceinflationary pressures in China’s economy. Following the government’s actions, the consumer price index decreased to 1.8% in 2005 and to 1.5% in 2006. In 2007, theconsumer price index increased to 4.8%. In response, China’s central bank, the People’s Bank of China, announced that the bank reserve ratio would rise half apercentage point to 15.5% in an effort to reduce inflation pressures. China’s consumer price index growth rate reached 8.7% year over year in 2008. In 2009 and 2010,the change in the consumer price index in China was minus 0.7% and 3.3%.China consumer price index in November 2017 was 3.8% higher than that of the same period in 2016. China consumer price index in December 2016 was2.4% higher than that of the same period in 2015. China consumer price index in December 2015 was 4.8% higher than that of the same period in 2014. Chinaconsumer price index in December 2014 was 3.3% higher than that of the same period in 2013. The results of the PRC government’s actions to combat inflation aredifficult to predict. Adverse changes in the Chinese economy, if any, will likely impact the financial performance of a variety of industries in China that use, or wouldbe candidates to use, our software products and services.68ITEM 12. DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES.A. DEBT SECURITIES.Not applicable. B. WARRANTS AND RIGHTS.Not applicable.C. OTHER SECURITIES.Not applicable.D. AMERICAN DEPOSITARY SHARES.The Bank of New York Mellon, as depositary (the “Depositary”) for the Company’s ADR facility, notified the owners and holders of the Company’s ADSsthat the ADS facility will terminate effective at 5:00 p.m. (Eastern Time) on September 19, 2018. Under the terms of the Deposit Agreement among the Company, theDepositary and the owners and holders of ADSs of the Company (the “Deposit Agreement”), owners and holders of the Company’s ADSs have until at leastJanuary 21, 2019 to surrender their ADSs to the Depositary for delivery of the underlying ordinary shares of the Company. Subsequent to January 21, 2019, underthe terms of the Deposit Agreement, the Depositary may attempt to sell any ordinary shares remaining on deposit with the Depositary. If the Depositary sells suchunderlying ordinary shares or receives value for such shares, holders must surrender their ADSs to obtain payment of the sale proceeds, net of expenses andapplicable tax and charges. We completed the voluntary delisting of our ADSs from the NASDAQ Capital Market on September 19, 2018.You may hold ADSs either (A) directly (i) by having ADSs registered in your name in the Direct Registration System, or (ii) by having an Americandepositary receipt, also referred to as an ADR, which is a certificate evidencing a specific number of ADSs, registered in your name, or (B) indirectly by holding asecurity entitlement in ADSs through your broker or other financial institution. If you hold ADSs directly, you are a registered ADS holder, also referred to as anADS holder. This description assumes you are an ADS holder. If you hold the ADSs indirectly, you must rely on the procedures of your broker or other financialinstitution to assert the rights of ADS holders described in this section. You should consult with your broker or financial institution to find out what thoseprocedures are.The Direct Registration System, or DRS, is a system administered by The Depository Trust Company, also referred to as DTC, pursuant to which thedepositary may register the ownership of uncertificated ADSs, which ownership will be confirmed by periodic statements sent by the depositary to the registeredholders of uncertificated ADSs.69As an ADS holder, you will not be treated as one of our registered shareholders and you will not have direct shareholder rights. British Virgin Island’s lawgoverns our direct shareholders’ rights. The depositary will be the holder of the shares underlying your ADSs. As a registered holder of ADSs, you will have ADSholder rights. A Deposit Agreement among us, the depositary and you, as an ADS holder, and all other persons indirectly holding ADSs, sets out ADS holder rightsas well as the rights and obligations of the depositary. New York law governs the Deposit Agreement and the ADSs.The following is a summary of the material provisions of the Deposit Agreement. For more complete information, you should read the entire DepositAgreement and the form of ADS, which contains the terms of the ADSs. The Deposit Agreement is filed as an exhibit to our registration statement filed on Form F1.You may obtain the registration statement and the attached Deposit Agreement from the SEC’s website at http://www.sec.gov. You may also obtain a copy of theDeposit Agreement at the SEC’s Public Reference Room, which is located at 100 F Street, NE, Washington, DC 20549. You may obtain information on the operationof the Public Reference Room by calling the SEC at 18007320330. Fees and ExpensesPersons depositing or withdrawing shares or ADS holders must pay:For:$5.00 (or less) per 100 ADSs (or portion of 100 ADSs)Issuance of ADSs, including issuances resulting from a distribution of shares orrights or other propertyCancellation of ADSs for the purpose of withdrawal, including if the DepositAgreement terminates$.05 (or less) per ADSAny cash distribution to ADS holdersA fee equivalent to the fee that would be payable if securities distributed to youhad been shares and the shares had been deposited for issuance of ADSsDistribution of securities distributed to holders of deposited securities whichare distributed by the depositary to ADS holders$.05 (or less) per ADSs per calendar yearDepositary servicesRegistration or transfer feesTransfer and registration of shares on our share register to or from the name ofthe depositary or its agent when you deposit or withdraw sharesExpenses of the depositaryCable, telex and facsimile transmissions (when expressly provided in the DepositAgreement) converting foreign currency to U.S. dollarsTaxes and other governmental charges the depositary or the custodian have topay on any ADS or share underlying an ADS, for example, share transfer taxes,stamp duty or withholding taxesAs necessaryAny charges incurred by the depositary or its agents for servicing the depositedsecuritiesAs necessaryPayment of TaxesHolders of our ADSs are responsible for any taxes or other governmental charges payable on their ADSs or on the deposited securities represented by anyof their ADSs. The depositary may refuse to register any transfer of a holder’s ADSs or allow withdrawal of the deposited securities represented by the ADSs untilsuch taxes or other charges are paid. It may apply payments owed to the holder or sell deposited securities represented by the ADSs to pay any taxes owed and theholder will remain liable for any deficiency. If the depositary sells deposited securities, it will, if appropriate, reduce the number of ADSs to reflect the sale and pay toADS holders any proceeds, or send to ADS holders any property, remaining after it has paid the taxes.70PART IIITEM 13. DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES.None.ITEM 14. MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS.Use of Proceeds.We completed our initial public offering on May 14, 2010 (the “IPO”), which generated net proceeds of approximately $14.6 million. All remaining cash onhand from the proceeds of our IPO was transferred to C Media Limited and its subsidiaries following the completion of the asset exchange transactions on August17, 2018.ITEM 15. CONTROLS AND PROCEDURES.Disclosure Controls and ProceduresOur Chief Executive Officer and Chief Financial Officer have reviewed and evaluated the effectiveness of our disclosure controls and procedures, whichincluded inquiries made to certain other of our employees. The term “disclosure controls and procedures,” as defined in Rules 13a15(e) and 15d15(e) under theExchange Act, means controls and other procedures of a company that are designed to ensure that information required to be disclosed by a company in thereports, such as this report, that it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in theSEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to bedisclosed by a company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the company’s management, including itsprincipal executive and principal financial officers, as appropriate to allow timely decisions regarding required disclosure. Management recognizes that any controlsand procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives and management necessarilyapplies its judgment in evaluating the costbenefit relationship of possible controls and procedures. Based on that evaluation, our Chief Executive Officer and ChiefFinancial Officer have each concluded that, as of December 31, 2017, the Company’s disclosure controls and procedures were not effective due to the materialweakness described in the “Management’s Report on Internal Control over Financial Reporting” section below.Management’s Report on Internal Control Over Financial ReportingOur management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Exchange ActRules 13a15(f) and 15d15(f). Internal control over financial reporting refers to the process designed by, or under the supervision of, our principal executive officerand principal financial officer, and effected by our Board of Directors, management and other personnel, to provide reasonable assurance regarding the reliability offinancial reporting and the preparation of financial statements for external purposes in accordance with U.S. GAAP and includes those policies and procedures that(i) pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of the assets of the Company; (ii)provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with U.S. GAAP, and thatreceipts and expenditures of the Company are being made only in accordance with authorizations of management and directors of the Company; and (iii) providereasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the Company’s assets that could have a materialeffect on the financial statements.71Any system of internal control, no matter how well designed, has inherent limitations. Therefore, even those systems determined to be effective canprovide only reasonable assurance with respect to financial statement preparation and presentation. Because of the inherent limitations of internal control, there is arisk that material misstatements may not be prevented or detected on a timely basis by internal control over financial reporting. However, these inherent limitationsare known features of the financial reporting process. Therefore, it is possible to design into the process safeguards to reduce, though not eliminate, this risk.Management assessed our internal control over financial reporting as of the year ended December 31, 2017. In making this assessment, management usedthe criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in the 2014 report entitled "Internal ControlIntegratedFramework." The COSO framework summarizes each of the components of a company’s internal control system, including (i) the control environment, (ii) riskassessment, (iii) control activities, (iv) information and communication, and (v) monitoring. Based on such assessment, management concluded that its internalcontrol over financial reporting as of December 31, 2017 was not effective because of the following material weakness:Lack of U.S. GAAP expertise. Although our accounting personnel are professional and experienced in accounting requirements and procedures generallyaccepted in the PRC, they do not have sufficient knowledge, experience and training in maintaining our books and records and preparing financial statements inaccordance with U.S. GAAP standards and SEC rules and regulations. The staff needs additional training to become experienced in U.S. GAAPbased reporting,including the skills of U.S. GAAPbased period end closing, consolidation of financial statements, and U.S. GAAP conversion.In order to address the above material weakness, our management plans to take the following steps:We will employ, as needed, outside professionals to provide key accounting personnel ongoing technical trainings to ensure their proper understanding ofU.S. GAAP and newly announced accounting standards.The Company believes the foregoing measures will remediate the identified material weakness in future periods. The Company is committed to monitoringthe effectiveness of these measures and making any changes that are necessary and appropriate.Notwithstanding the conclusion that its internal control over financial reporting was not effective as of the end of the period covered by this report, ourChief Executive Officer and Chief Financial Officer believe that the financial statements and other information contained in this report present fairly, in all materialrespects, its business, financial condition and results of operations. Nothing has come to the attention of management that causes them to believe that any materialinaccuracies or errors exist in the Company’s financial statements as of December 31, 2017.Attestation report of the registered public accounting firm.This transition report does not include an attestation report of the Company’s registered public accounting firm on internal control over financial reportingbecause the Company is a nonaccelerated filer permanently exempted from section 404(b) of the SarbanesOxley Act.Changes in Internal Control over Financial ReportingThere were no changes in the Company’s internal control over financial reporting that occurred during our fiscal year ended December 31, 2017 that hasmaterially affected or is reasonably likely to materially affect our internal control over financial reporting.ITEM 16. [RESERVED]ITEM 16A. AUDIT COMMITTEE FINANCIAL EXPERT.Our board of directors has determined that Mr. Dennis Galgano qualifies as an audit committee financial expert. Our board of directors has determined thatMessrs. Dennis Galgano, Jin Shi, Jiming Ha and Zhihao Xu meet the definition of an “independent director” under the applicable NASDAQ Rules and under Rule10A3 of the Securities Exchange Act of 1934, as amended.72ITEM 16B. CODE OF ETHICS.Our board of directors has adopted a code of business conduct and ethics applicable to our directors, officers and employees. We have posted the code onour website at http://www.luokung.com.ITEM 16C. PRINCIPAL ACCOUNTANT FEES AND SERVICES.Audit FeesThe aggregate fees billed by Moore Stephens CPA Limited for professional services rendered for the audit of our financial information disclosed in thistransition report on Form 20F was $280,000 for the two years ended December 31, 2017 and 2016.The aggregate fees billed by our previous auditor, BDO China Shu Lun Pan Certified Public Accountants LLP for professional services rendered for theaudit of our annual financial information included in our annual reports on Form 20F was $105,500 for each of the fiscal years ended September 30, 2017, 2016 and2015.Tax FeesWe did not engage our principal accountants to provide tax or related services during the last two fiscal years.All Other FeesWe did not engage our principal accountants to render services to us during the last two fiscal years, other than as reported above.ITEM 16D. EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES.Not applicable.ITEM 16E. PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS.Not applicable.ITEM 16F. CHANGE IN REGISTRANT’S CERTIFYING ACCOUNTANT.Not applicable.ITEM 16G. CORPORATE GOVERNANCE.We are incorporated in the BVI and our corporate governance practices are governed by applicable BVI law as well as our memorandum and articles ofassociation. In addition, because our ADSs are listed on NASDAQ, we are subject to NASDAQ’s corporate governance requirements. NASDAQ Listing Rule5620(a) requires each issuer to hold an annual meeting of shareholders no later than one year after the end of the issuer’s fiscal year end. However, NASDAQ ListingRule 5615(a)(3) permits a foreign private issuer like us to follow home country practices in lieu of certain requirements of Listing Rule 5600, provided that suchforeign private issuer discloses in its transition report filed with the SEC each requirement of Rule 5600 that it does not follow and describes the home countrypractice followed in lieu of such requirement. We follow home country practice with respect to annual meetings and did not hold an annual shareholder meeting inthe year ended December 31, 2017. We may, however, hold annual shareholder meetings in the future if there are significant issues that require shareholders’approvals.ITEM 16H. MINE SAFETY DISCLOSURE.Not applicable.73PART IIIITEM 17. FINANCIAL STATEMENTS.We have elected to provide financial statements and related information specified in Item 18.ITEM 18. FINANCIAL STATEMENTS.See “Index to Consolidated Financial Statements” for a list of all financial statements filed as part of this transition report. The Financial Statements arebeginning on page F1.ITEM 19. EXHIBITS.See the Exhibit Index following the signature page of this report, which is incorporated herein by reference.74SIGNATURESThe registrant hereby certifies that it meets all of the requirements for filing on Form 20F and that it has duly caused and authorized the undersigned tosign this transition report on its behalf.LUOKUNG TECHNOLOGY CORP.By:/s/ Xuesong Song Xuesong SongChief Executive Officer(principal executive officer)October 12, 201875EXHIBIT INDEXThe following documents are filed as part of this transition report on Form 20F.ExhibitNumberDescription1.1Amended and Restated Memorandum of Association and Articles of Association of Luokung Technology Corp., dated August 20, 2018, and ascurrently in effect.2.1*Deposit Agreement among the Company, depositary and holders of the American Depositary Receipts.2.2*Form of American Depositary Receipt.2.3*English translation of Entrusted Management Agreement dated December 15, 2009 between Xi’an Softech Co., Ltd., Xi’an Kingtone InformationTechnology Co., Ltd. and the shareholders of Xi’an Kingtone Information Technology Co., Ltd.3.1*English translation of Shareholder’s Voting Proxy Agreement dated December 15, 2009 between Xi’an Softech Co., Ltd., Xi’an Kingtone InformationTechnology Co., Ltd. and the shareholders of Xi’an Kingtone Information Technology Co., Ltd.4.1*English translation of Exclusive Technology Service Agreement dated December 15, 2009 between Xi’an Softech Co., Ltd. and Xi’an KingtoneInformation Technology Co., Ltd.4.2*English translation of Exclusive Option Agreement dated December 15, 2009 between Xi’an Softech Co., Ltd., Xi’an Kingtone InformationTechnology Co., Ltd. and the shareholders of Xi’an Kingtone Information Technology Co., Ltd.4.3*English translation of Equity Pledge Agreement dated December 15, 2009 between Xi’an Softech Co., Ltd., Xi’an Kingtone Information TechnologyCo., Ltd. and the shareholders of Xi’an Kingtone Information Technology Co., Ltd.4.4*English translation of Loan Agreement dated September 14, 2009 between Xi’an Kingtone Information Technology Co., Ltd. and Xian CityCommercial Bank.4.5*English translation of Mortgage Agreement dated September 14, 2009 between Xi’an Kingtone Information Technology Co., Ltd. and Xian CityCommercial Bank.4.6*English translation of Form of Employment Agreement entered into between the Company and the Company’s executive officers.4.7*2010 Omnibus Incentive Plan of the Company.4.8**English translation of Project Construction Contract dated August 10, 2010 between Xi’an Hu County Yuxing Agriculture Science & TechnologyCo., Ltd. and Xi’an Kingtone Information Technology Co., Ltd.4.9***Asset Exchange Agreement by and between C Media Limited and the Company dated as of January 25, 2018.4.10***Securities Purchase Agreement by and among Redstone YYL Management Limited and five shareholders holding majority of the shares of theCompany dated as of January 25, 2018.4.15Exclusive Business Cooperation Agreement by and between Zhongchuan Tianxia Information Technology (Shenzhen) Co., Ltd., and Beijing MobileVision Technology Co., Ltd., dated August 31, 2015.764.16Exclusive Option Agreement by and among Zhongchuan Tianxia Information Technology (Shenzhen) Co., Ltd., Xuesong Song, Weili Chen, PingWang, Donglai Liu, and Beijing Mobile Vision Technology Co., Ltd., dated August 31, 2015.4.17Equity Interest Pledge Agreement by and among Zhongchuan Tianxia Information Technology (Shenzhen) Co., Ltd., Xuesong Song, Weili Chen, PingWang, Donglai Liu, and Beijing Mobile Vision Technology Co., Ltd., dated August 31, 2015.4.18Addendum to Asset Exchange Agreement by and among the Company, Topsky Infotech Holdings Pte Ltd. and C Media Limited, dated October 3,2018. Incorporated by reference to the Company’s Current Report on Form 6K filed on October 4, 2018.4.19Stock Purchase Agreement, dated August 25, 2018, by and among the Company, LK Technology Ltd., and the shareholders listedtherein. Incorporated by reference to the Company’s Current Report on Form 6K filed on August 27, 2018.4.20Power of Attorney by Weili Chen, dated August 31, 2015.4.21Power of Attorney by Ping Wang, dated August 31, 2015.4.22Power of Attorney by Donglai Liu, dated August 31, 2015.4.23Power of Attorney by Xuesong Song, dated August 31, 2015.8.1List of Subsidiaries and Consolidated Variable Interest Entities10.1Employment Agreement, dated August 19, 2018, between Luokung Technology Corp. and Xuesong Song.†10.2Employment Agreement, dated August 19, 2018, by and between Luokung Technology Corp. and Jie Yu.†12.1Certification of Chief Executive Officer required by Rule 13a14(a).12.2Certification of Chief Financial Officer required by Rule 13a14(a).13.1Certification of Chief Executive Officer required by Rule 13a14(a).13.2Certification of Chief Financial Officer required by Rule 13a14(a).101.INSXBRL Instance Document.101.SCHXBRL Taxonomy Extension Schema Document.101.CALXBRL Taxonomy Extension Calculation Linkbase Document.101.DEFXBRL Taxonomy Extension Definition Linkbase Document.101.LABXBRL Taxonomy Extension Label Linkbase Document.101.PREXBRL Taxonomy Extension Presentation Linkbase Document.*Previously filed as an exhibit to the Company’s Registration Statement on Form F1 (Reg. No. 333166056) filed with the Commission and incorporated hereinby reference.**Previously filed as exhibits to the Company’s Transition Report on Form 20F filed with the Commission on January 20, 2011 and incorporated herein byreference.***Previously filed as exhibits to the Company’s Annual Report on Form 20F filed with the Commission on February 9, 2018 and incorporated herein byreference.†Indicates management contract or compensatory plan, contract or arrangement.77LK Technology Ltd. and SubsidiariesCONSOLIDATED FINANCIAL STATEMENTSTABLE OF CONTENTSPage(s)Report of Independent Registered Public Accounting FirmF2Consolidated Financial StatementsConsolidated Balance SheetsF3Consolidated Statements of Operations and Comprehensive LossF4application.Chuang (Vincent) Tao was appointed as a member of the Board effective on August 25, 2018. Dr. Tao was the Chairman of SuperEngine Suzhou from 2014to 2017. Dr. Tao has been the president of the Seasky Angel Investment Alliance of Shanghai since 2015. Dr. Tao received his Bachelor Degree of geographicinformation and telemetry from Wuhan University in China in 1990 and received his Ph.D. from University of Calgary, Canada in 1997.Dennis Galgano was appointed as a director of the Company following the consummation of the asset exchange agreement. He was a registered consultantwith Morgan Joseph Triartisan LLC from November 2016 until October 2017, and previously served as vice chairman and head of international investment bankingfor Morgan Joseph Triartisan LLC, which is a registered broker dealer engaged in the investment banking and financial advisory industry. Mr. Galgano received aB.S. degree in Chemistry from St. John’s University and an M.B.A. from The Wharton School in 1972.Jin Shi was appointed as a director of the Company following the consummation of the asset exchange transactions. Mr. Shi has served as the managingpartner of Chum Capital Group, a merchant bank focused on helping Chinese growth companies to access global capital, since January 2013. Mr. Shi has also servedas a director of Seven Stars Cloud Group, Inc. (NASDAQ: SSC), a premium video on demand service provider, since January 2014, and joined the audit committee ofits board of directors in March 2016. He also served as a director and member of the audit committee of Pingtan Marine Enterprise, Ltd. (NASDAQ: PME), a marineenterprise group primarily engaged in ocean fishing through its subsidiaries. Mr. Shi received an EMBA degree from the Guanghua Management School of BeijingUniversity, and a Bachelor’s degree of science in Chemical Engineering from Tianjin University.Jiming Ha was appointed as a director of the Company following the consummation of the asset exchange agreement, and has also served as a seniorresearch fellow for the China Finance 40 Forum since March 1, 2018, and previously served as a managing director of Goldman Sachs from January 2017 to April2017. Mr. Ha served as a vice chairman and chief investment strategist of the Investment Strategy Group for Private Wealth Management at Goldman Sachs from2010 to January 2017. Mr. Ha holds a PhD in Economics from the University of Kansas and Master’s and Bachelor’s degrees of science from Fudan University.Zhihao Xu was appointed as a director of the Company following the consummation of the asset exchange transactions. Mr. Xu has served as the chiefexecutive officer of Geely Group Co., Ltd., in Hangzhou, China, since December 2017, and previously served as the chairman and chief executive officer of BeijingDingchengrenhe Investment Co., Ltd., a funds management company, from January 2017 to December 2017. Mr. Xu served as the chairman of president of HNAUSOLV CO., LTD., and the chief innovation officer of HNA Logistics Group from January 2014 to December 2016, and prior to that as the chairman of GopayInnovation Technology Co. Ltd., an online payment system operator supporting online money transfers, from April 2012 to January 2014. Mr. Xu graduated from theBusiness School of Renmin University of China and from the Wudaokou Finance College of Tsinghua University with a fund qualification certificate and securitiesqualification certificate.B. COMPENSATION.Compensation of Directors and Executive OfficersFor the ninemonth transition period ended September 30, 2018 and the fiscal year ended December 31, 2017, we did not pay any cash compensation to ourexecutive officers of LK Technology Ltd. and a to our directors for serving on our board of directors of LK Technology Ltd.37Other than nonemployee directors, we do not intend to compensate directors for serving on our board of directors or any of its committees. We do,however, intend to reimburse each member of our board of directors for outofpocket expenses incurred by each director in connection with attending meetings ofthe board of directors and its committees.AdministrationThe Incentive Plan is administered by our board of directors, or at the discretion of the board, by our compensation committee. Our board of directors hasdelegated authority to our compensation committee to administer the Incentive Plan. Subject to the terms of the Incentive Plan, the compensation committee mayselect participants to receive awards, determine the types of awards and terms and conditions of awards, and interpret provisions of the Incentive Plan.The ordinary shares issued or to be issued under the Incentive Plan consist of authorized but unissued shares. If any ordinary shares covered by an awardare not purchased or are forfeited, or if an award otherwise terminates without delivery of any ordinary shares, then the number of ordinary shares counted againstthe aggregate number of ordinary shares available under the plan with respect to the award will, to the extent of any such forfeiture or termination, again be availablefor making awards under the Incentive Plan.EligibilityAwards may be made under the Incentive Plan to our employees, officers, directors, consultants or advisers or to any of our affiliates, and to any otherindividual whose participation in the Incentive Plan is determined to be in our best interests by our board of directors.Amendment or Termination of the PlanOur board of directors may terminate or amend the Incentive Plan at any time and for any reason. No amendment, however, may adversely impair the rightsof grantees with respect to outstanding awards. The Incentive Plan has a term of ten years. Amendments will be submitted for shareholder approval to the extentrequired by applicable stock exchange listing requirements or other applicable laws.OptionsThe Incentive Plan permits the granting of options to purchase ordinary shares intended to qualify as incentive share options under the Internal RevenueCode and share options that do not qualify as incentive share options, or nonqualified share options.The exercise price of each share option may not be less than 100% of the fair market value of our ADSs representing ordinary shares on the date of grant.In the case of certain 10% shareholders who receive incentive share options, the exercise price may not be less than 110% of the fair market value of our ADSsrepresenting ordinary shares on the date of grant. An exception to these requirements is made for options that we grant in substitution for options held byemployees of companies that we acquire. In such a case the exercise price is adjusted to preserve the economic value of the employee’s share option from his or herformer employer.The term of each share option is fixed by the compensation committee and may not exceed ten years from the date of grant. The compensation committeedetermines at what time or times each option may be exercised and the period of time, if any, after retirement, death, disability or termination of employment duringwhich options may be exercised.Options may be made exercisable in installments. The award agreement provides the vesting of the options. Exercisability of options may be accelerated bythe compensation committee.38In general, an optionee may pay the exercise price of an option by (1) cash or check (in U.S. dollars or Renminbi or other local currency as approved by thecompensation committee), (2) ordinary shares held for such period of time as may be required by the compensation committee, (3) delivery of a notice of a marketorder with a broker with respect to ordinary shares then issuable upon exercise of an option, and that the broker has been directed to pay us a sufficient portion ofnet proceeds of the sale in satisfaction of the exercise price, provided that payment of such proceeds is then made to us upon settlement of such sale, (4) otherproperty acceptable to the compensation committee with a fair market value equal to the exercise price, (5) cashless exercise or (6) any combination of the foregoing.Share options granted under the Incentive Plan may not be sold, transferred, pledged, or assigned other than by will or under applicable laws of descentand distribution. However, we may permit limited transfers of nonqualified options for the benefit of immediate family members of grantees to help with estateplanning concerns or pursuant to a domestic relations order in settlement of marital property rights.Other AwardsThe compensation committee may also award under the Incentive Plan:1.ordinary shares subject to restrictions;2.deferred ordinary shares, credited as deferred ordinary share units, but ultimately payable in the form of unrestricted ordinary shares inaccordance with the terms of the grant or with the participant’s deferral election;3.ordinary share units subject to restrictions;4.unrestricted ordinary shares, which are ordinary shares issued at no cost or for a purchase price determined by the compensation committee whichare free from any restrictions under the 2011 Omnibus Incentive Plan;5.dividend equivalent rights entitling the grantee to receive credits for dividends that would be paid if the grantee had held a specified number ofordinary shares; or6.a right to receive a number of ordinary shares or, in the discretion of the compensation committee, an amount in cash or a combination of ordinaryshares and cash, based on the increase in the fair market value of the ADSs representing ordinary shares underlying the right during a statedperiod specified by the compensation committee.Effect of Certain Corporate TransactionsCertain change of control transactions involving us may cause awards granted under the Incentive Plan to vest, unless the awards are continued orsubstituted for by the surviving company in connection with the corporate transaction.Unless otherwise provided in the appropriate option agreement on the date of grant or provided by our board of directors thereafter with the consent of thegrantee, options granted under the Incentive Plan become exercisable in full following (1) a dissolution of our company or a merger, consolidation or reorganizationof our company with one or more other entities in which we are not the surviving entity, (2) a sale of substantially all of our assets to another person or entity, or (3)any transaction (including without limitation a merger or reorganization in which we are the surviving entity) which results in any person or entity owning 50% ormore of the combined voting power of all classes of our shares.39Adjustments for Dividends and Similar EventsThe compensation committee will make appropriate adjustments in outstanding awards and the number of ordinary shares available for issuance under theIncentive Plan, including the individual limitations on awards, to reflect ordinary share dividends, stock splits and other similar events.C. BOARD PRACTICES.Board of DirectorsOur board of directors consists of six members being Messrs. Xuesong Song, Kegang Peng, Dennis Galgano, Jin Shi, Jiming Ha and Zhiaho Xu. Ourdirectors hold office until our annual meeting of shareholders, where their successors will be duly elected and qualified, or until the directors’ death, resignation orremoval, whichever is earlier. Our directors are not subject to a term of office and hold office until their resignation, death or incapacity or until their respectivesuccessors have been elected and qualified in accordance with our fourth amended and restated memorandum of association and articles of association. A directorwill be removed from office if, among other things, the director (1) becomes bankrupt, (2) dies or becomes of unsound mind, or (3) is absent from meetings of ourboard of directors for six consecutive months without leave and our board of directors resolves that the office is vacated. A director is not entitled to any specialbenefits upon termination of service with the company.Director IndependenceOur board of directors consists of six members; Messrs. Dennis Galgano, Jin Shi, Jiming Ha and Zhihao Xu have been determined by us to be independentdirectors within the meaning of the independent director guidelines of the NASDAQ Corporate Governance Rules (the “NASDAQ Rules”).Committees of Our Board of DirectorsTo enhance our corporate governance, we established three committees under our board of directors: an audit committee, a compensation committee, and anominating and corporate governance committee. We have adopted a charter for each of these committees. The committees have the following functions andmembers.Audit CommitteeOur audit committee reports to our board of directors regarding the appointment of our independent public accountants, the scope and results of ourannual audits, compliance with our accounting and financial policies and management’s procedures and policies relating to the adequacy of our internal accountingcontrols. Our audit committee consists of Messrs. Dennis Galgano, Jin Shi, and Jiming Ha. Mr. Galgano, having accounting and financial management expertise,serves as the chairman of the audit committee and is an “audit committee financial expert” as defined by the rules and regulations of the SEC. Our board of directorshas determined that each of these persons meet the definition of an “independent director” under the applicable NASDAQ Rules and under Rule 10A3 of theSecurities Exchange Act of 1934, as amended (the “Exchange Act”).Our audit committee is responsible for, among other things:●the appointment, evaluation, compensation, oversight and termination of the work of our independent auditor (including resolution of disagreementsbetween management and the independent auditor regarding financial reporting);●an annual performance evaluation of the audit committee;●establishing procedures for the receipt, retention and treatment of complaints regarding accounting, internal accounting controls, auditing matters orpotential violations of law, and the confidential, anonymous submission by our employees of concerns regarding questionable accounting or auditingmatters or potential violations of law;40●ensuring that it receives an transition report from our independent auditor describing our internal control procedures and any steps taken to deal withmaterial control deficiencies and attesting to the auditor’s independence and describing all relationships between the auditor and us;●reviewing our annual audited financial statements and quarterly financial statements with management and our independent auditor;●reviewing and approving all proposed related party transactions;●reviewing our policies with respect to risk assessment and risk management;●meeting separately and periodically with management and our independent auditor; and●reporting regularly to our board of directors.Compensation CommitteeOur compensation committee assists the board of directors in reviewing and approving the compensation structure of our directors and executive officers,including all forms of compensation to be provided to our directors and executive officers. In addition, the compensation committee reviews share compensationarrangements for all of our other employees. Members of the compensation committee are not prohibited from direct involvement in determining their owncompensation. Our chief executive officer is not permitted to be present at any committee meeting during which his or her compensation is deliberated. Ourcompensation committee consists of Dennis Galgano and Jin Shi, with Mr. Shi serving as the chairman of the compensation committee. Our board of directors hasdetermined that each of these persons meet the definition of “independent director” under the applicable requirements of the NASDAQ Rules.Our compensation committee is responsible for, among other things:●reviewing and approving corporate goals and objectives relevant to the compensation of our chief executive officer, evaluating the performance of ourchief executive officer in light of those goals and objectives and setting the compensation level of our chief executive officer based on this evaluation;●reviewing and making recommendations to the board with respect to the compensation of our executives, incentive compensation and equitybasedplans that are subject to board approval; and●providing annual performance evaluations of the compensation committee.Nominating and Corporate Governance CommitteeOur nominating and corporate governance committee assists the board of directors in identifying and selecting or recommending individuals qualified tobecome our directors, developing and recommending corporate governance principles and overseeing the evaluation of our board of directors and management. Ournominating and corporate governance committee consists of Jiming Ha and Zhihao Xue, with Mr. Ha serving as the chairman of the nominating and corporategovernance committee. Our board of directors has determined that each of these persons meet the definition of “independent director” under the applicablerequirements of the NASDAQ Rules.Our nominating and corporate governance committee is responsible for, among other things:●selecting and recommending to our board nominees for election or reelection to our board, or for appointment to fill any vacancy;●reviewing annually with our board the current composition of the board of directors with regards to characteristics such as independence, age, skills,experience and availability of service to us;●selecting and recommending to our board the names of directors to serve as members of the audit committee and the compensation committee, as wellas the nominating and corporate governance committee itself; advising our board of directors periodically with regards to significant developments inthe law and practice of corporate governance as well as our compliance with applicable laws and regulations, and making recommendations to ourboard of directors on all matters of corporate governance and on any remedial action to be taken; and●monitoring compliance with our code of business conduct and ethics, including reviewing the adequacy and effectiveness of our procedures to ensureproper compliance.41Code of Business Conduct and EthicsOur board of directors adopted a code of business conduct and ethics applicable to our directors, officers and employees.Duties of DirectorsUnder British Virgin Islands law, our directors have a duty to act honestly, in good faith and with a view to our best interests. Our directors also have a dutyto exercise care, diligence and skills that a reasonably prudent person would exercise in comparable circumstances. In fulfilling their duty of care to us, our directorsmust ensure compliance with our memorandum of association and articles of association. We have the right to seek damages if a duty owed by our directors isbreached.The functions and powers of our board of directors include, among others:●appointing officers and determining the term of office of the officers;●authorizing the payment of donations to religious, charitable, public or other bodies, clubs, funds or associations as deemed advisable;●exercising the borrowing powers of the company and mortgaging the property of the company;●executing cheques, promissory notes and other negotiable instruments on behalf of the company; and●maintaining or registering a register of mortgages, charges or other encumbrances of the company.Remuneration and BorrowingThe directors may receive such remuneration as our board of directors may determine from time to time. Each director is entitled to be repaid or prepaid alltraveling, hotel and incidental expenses reasonably incurred or expected to be incurred in attending meetings of our board of directors or committees of our board ofdirectors or shareholder meetings or otherwise in connection with the discharge of his or her duties as a director. The compensation committee will assist thedirectors in reviewing and approving the compensation structure for the directors.Our board of directors may exercise all the powers of the company to borrow money and to mortgage or charge our undertakings and property or any partthereof, to issue debentures, debenture stock and other securities whenever money is borrowed or as security for any debt, liability or obligation of the company orof any third party.QualificationA director is not required to hold shares as a qualification to office.42Limitation on Liability and Other Indemnification MattersBritish Virgin Islands law does not limit the extent to which a company’s memorandum of association and articles of association may provide forindemnification of officers and directors, except to the extent any such provision may be held by the British Virgin Islands courts to be contrary to public policy,such as to provide indemnification against civil fraud or the consequences of committing a crime.Under our memorandum of association and articles of association, we may indemnify our directors, officers and liquidators against all expenses, includinglegal fees, and against all judgments, fines and amounts paid in settlement and reasonably incurred in connection with civil, criminal, administrative or investigativeproceedings to which they are party or are threatened to be made a party by reason of their acting as our director, officer or liquidator. To be entitled toindemnification, these persons must have acted honestly and in good faith with a view to the best interest of the company and, in the case of criminal proceedings,they must have had no reasonable cause to believe their conduct was unlawful.Compensation Committee Interlocks and Insider ParticipationNone of the members of our compensation committee is an officer or employee of our company. None of our executive officers currently serves, or in thepast year has served, as a member of the board of directors or compensation committee of any entity that has one or more executive officers serving on our board ofdirectors or compensation committee.Employment AgreementsOn August 19, 2018, the Company entered into an Employment Agreement (the “Song Agreement”) with Mr. Xuesong Song, to serve as the ChiefExecutive Officer of the Company for a fouryear term, subject to renewal. Under the terms of the Song Agreement, Mr. Song will receive no salary for his servicesbut will be eligible for an annual cash bonus in the Board’s sole discretion.On August 19, 2018, the Company entered into an Employment Agreement (the “Yu Agreement”) with Mr. Jie Yu, to serve as the Chief Financial Officer ofthe Company for a fouryear term, subject to renewal. Under the terms of the Yu Agreement, Mr. Yu will receive an annual salary of RMB700,000, and will be eligiblefor an annual cash bonus in the Board’s sole discretion.D. EMPLOYEES.As of September 30, 2018 and December 31, 2017, we had a total of 107 and 37 fulltime employees, including 48 and 13 in research and development, 9 and 2in sales and marketing and the rest in a variety of other divisions, respectively. All of our employees are fulltime employees. None of our employees is currentlyrepresented by a union and/or collective bargaining agreements. We believe that we have good relations with our employees and since our inception we have hadno history of work stoppages or union organizing campaigns.E. SHARE OWNERSHIP.The following table provides information as to the beneficial ownership of our ordinary shares as of October 10, 2018, by the persons listed. Beneficialownership of shares is determined under the rules of the SEC and generally includes any shares over which a person exercises sole or shared voting or investmentpower. For purposes of the following table, a person is deemed to have beneficial ownership of any ordinary shares if such person has the right to acquire suchshares within 60 days of October 10, 2018. For purposes of computing the percentage of outstanding shares held by each person, any shares that such person hasthe right to acquire within 60 days after of October 10, 2018 are deemed to be outstanding, but are not deemed to be outstanding for the purpose of computing thepercentage ownership of any other person. Except as otherwise noted, the persons named in the table have sole voting and investment power with respect to all ofthe ordinary shares beneficially owned by them. Unless otherwise indicated, the address of each person listed is c/o Luokung Technologies, LAB 32, SOHO 3Q, No9, Guanghua Road, Chaoyang District, Beijing, People’s Republic of China.43Percentage ownership in the following table is based on 199,317,558 ordinary shares outstanding on October 10, 2018.Number ofsharesPercent ofclassDirectors and named executive officersCharm Dragon International Limited (1)4,030,8822.03%Xuesong Song, Chairman, Chief Executive Officer and Director(2)38,156,43019.30%Kegang Peng, Vice President and Director (3)17,231,9558.71%Dennis Galgano, Director75,796*%Jin Shi, DirectorJiming Ha, DirectorZhihao Xu, Director (4)7,579,1843.83%Dongpu Zhang, President (5)2,321,7921.17%Chuang Tao, Director (6)1,221,996*%Directors and executive officers as a group (10 persons)66,587,15233.69%(1)Charm Dragon International Limited is a British Virgin Islands company controlled by Mr. Xuesong Song.(2)Consists of (i) 4,030,882 shares owned directly by Charm Dragon International Limited, a British Virgin Islands company and (ii) 22,624,793 shares owneddirectly by Bravo First Development Limited, a British Virgin Islands company. Mr. Xuesong Song is the controlling shareholder of Bravo First DevelopmentLimited. Mr. Xuesong Song is the sole director of Charm Dragon International Limited.(3)Consists of 17,231,955 shares owned directly by Plenty Prestige Enterprises Limited, a British Virgin Islands company. Mr. Kegang Peng is the sole director ofPlenty Prestige Enterprises Limited.(4)Consists of 7,579,184 shares directly owned by Geely Group Limited., a Chinese company. Mr. Zhihao Xu is the Chief Executive Officer of Geely GroupLimited.(5)Consists of 2,321,792 shares owned directly by Genoa Peak Limited, a British Virgin Islands company. Mr. Dongpu Zhang controls Genoa Peak Limited.(6)Consists of 1,221,996 shares owned directly by Globalearth Holdings Limited, a British Virgin Islands company. Mr. Chuang Tao controls Globalearth HoldingsLimited.*Represents less than 1% of shares outstandingITEM 7. MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS.A. MAJOR SHAREHOLDERSPlease refer to Item 6.E “Directors, Senior Management and Employees — Share Ownership.”To our knowledge, (A) we are not directly or indirectly owned or controlled by (i) another corporation or (ii) any foreign government and (B) there are noarrangements (including any announced or expected takeover bid), the operation of which may at a subsequent date result in a change in our control.The voting rights of our major shareholders do not differ from the voting rights of other holders of the same class of shares.44B. RELATED PARTY TRANSACTIONS. BUSINESS RELATIONSHIPS.Our subsidiaries, consolidated affiliated entities, and the subsidiaries of the consolidated affiliated entities have engaged, during the ordinary course ofbusiness, in a number of customary transactions with each other. All of these intercompany balances have been eliminated in consolidation.As of December 31, 2017, we had amounts due from related parties, C Media Limited and Ya Tuo Ji International Consultancy (Beijing) Limited, in theamounts of $11.8 million and $0.2 million, respectively. These amounts due from related parties are short term in nature, noninterest bearing, unsecured andrepayable on demand.As of December 31, 2017, we had amounts due to related parties, Mr. Xuesong Song, our chairman and chief executive officer, Thumb Beijing Branch andThumb Shenzhen Branch, in the amounts of $2.9 million, $0.6 million and $0.03 million, respectively. These amounts due to related parties are short term in nature,noninterest bearing, unsecured and payable on demand.We are party to a series of control agreements with Beijing Zhong Chuan Shi Xun. In addition, our chief executive officer, Mr. Xuesong Song, serves as andofficer of Beijing Zhong Chuan Shi Xun and is a shareholder of Beijing Zhong Chuan Shi Xun. The following table sets forth the relationship of Mr. Song withBeijing Zhong Chuan Shi Xun:NameRelationship withLuokung TechnologyRelationship withBeijing Zhong Chuan Shi XunPercentageOwnership Interest inBeijing Zhong Chuan Shi XunXuesong SongChief Executive OfficerChief Executive Officer61.83%C. INTERESTS OF EXPERTS AND COUNSEL.None.ITEM 8. FINANCIAL INFORMATION.A. CONSOLIDATED STATEMENTS AND OTHER FINANCIAL INFORMATION.See “Item 18. Financial Statements.”Legal ProceedingsTo our knowledge, other than as described below there are no material legal proceedings threatened against us. From time to time, we may be subject tovarious claims and legal actions arising in the ordinary course of business. Following the consummation of the AEA, we became successor in interest to the legalproceedings described below.Litigation with Shanghai Fusheng Weier Intelligent Control Technology Co., Ltd.On January 22, 2016, Zhong Chuan Rui You and Shanghai Fusheng Weier Intelligent Control Technology Co., Ltd. (“Fusheng Weier”) signed a contract forequipment of $1,652,842 (RMB10,800,000). Since Zhong Chuan Rui You did not make the payments of $1,126,381 (RMB7,360,000) on the due dates, Fusheng Weierfiled a lawsuit against Zhong Chuan Rui You in Shanghai Xuhui District People's Court on October 8, 2016. On March 9, 2017, Xuhui District People's Court issuedthe verdict requiring Zhong Chuan Rui You to pay the overdue debts. In August 2017, C Media Limited made the payment of $512,075 (RMB3,346,000). Theremaining balance has been accrued in accounts payable. The payment schedule for the remaining balance is being negotiated by the two parties. On February 5,2018, a hearing was held adding Zhong Chuan Shi Xun as a defendant. The Group plans to settle the remaining balance within one year.45Lawsuit with Gansu Jinlun Culture Media Co., Ltd.On August 22, 2014, Zhong Chuan Rui You and Gansu Jinlun Culture Media Co., Ltd. (“Gansu Jinlun”) signed a “Lanzhou Railway Bureau AirconditionedTrain WiFi Network System Advertising Operation Rights Agreement” for advertising on 72 trains of $1,467,880 (RMB9,604,633). Due to the dispute on theproject implementation, Zhong Chuan Rui You did not pay the advertising fee. On August 23, 2017, Gansu Jinlun filed a lawsuit with Gansu Intermediate People'sCourt. On December 19, 2017, Gansu Intermediate People's Court issued a verdict, ruling that Zhong Chuan Rui You settle the overdue advertising fee. Since only 18out of 72 trains have been installed with Wifi network system, Zhong Chuan Rui You disputed and appealed to the verdict. The next court trial date has not yet beendetermined. C Media and Gansu Jinlun are negotiating a potential settlement to resume the contract. According to the legal counsel, it is probable that the settlementwill amount to approximately $459,000 (RMB3,000,000); therefore, this amount has been accrued in accounts payable as at December 31, 2017.Litigation with Shenzhen Hua Xun Fang Zhou Technology Co., Ltd.On June 16, 2015, Zhong Chuan Rui You signed a cooperation agreement with Shenzhen Hua Xun Fang Zhou Technology Co., Ltd. (“Shenzhen Hua Xun”)and Xuesong Song, a major shareholder of C Media Limited. Pursuant to this agreement, Zhong Chuan Rui You procures equipment from Shenzhen Hua Xun.Xuesong Song acts as a joint liability guarantor for the entire debts of Zhong Chuan Rui You under this agreement. As Zhong Chuan Rui You did not make thepayments on the due dates, Shenzhen Hua Xun filed a lawsuit with Shenzhen Baoan District People's Court on May 31, 2016. On November 1, 2016, Zhong ChuanRui You, Xuesong Song and Shenzhen Hua Xun reached a settlement in Shenzhen Baoan District People's Court to settle $1,735,389 (RMB11,355,000) in fourinstalments. On December 30, 2017, the debt was assigned to C Media Limited.Dividend PolicyWe currently intend to retain all of our available funds and future earnings for use in the operation and expansion of our business and do not anticipatepaying cash dividends in the foreseeable future. Under the terms of our Amended and Restated Memorandum and Articles of Association the declaration andpayment of any dividends in the future will be determined by our board of directors, in its discretion, and will depend on a number of factors, including our earnings,capital requirements and overall financial condition and our ability to receive dividends from our subsidiaries. If we pay any dividends, we will pay our ADS holders’dividends with respect to their underlying shares to the same extent as holders of our ordinary shares, subject to the terms of the deposit agreement, including thefees and expenses payable thereunder. Cash dividends on our ordinary shares, if any, will be paid in U.S. dollars.Our ability to receive dividends from our subsidiaries may limit our ability to pay dividends on our ordinary shares. See Risk Factors – Risks Related toDoing Business in China – Our holding company structure may limit the payment of dividends” and “Item 10. Additional Information – D. Exchange Controls –Dividend Distribution”.B. SIGNIFICANT CHANGES.N/AITEM 9. THE OFFER AND LISTINGA. OFFER AND LISTING DETAILS.Markets and Share Price HistoryOur ordinary shares are not currently listed on any trading market. Our American Depository Shares (“ADSs”) were voluntarily delisted from the NASDAQCapital Market on September 19, 2018. We have applied to NASDAQ for the listing of our ordinary shares on the NASDAQ Capital Market and received an approvalfor listing of Ordinary Shares on August 6, 2018, and as of the date of this transition report, that application and approval are currently under review.46The table below sets forth the high and low reported sales prices in dollars of our ordinary shares, which are represented by ADSs, as reported byNASDAQ in the periods as indicated:ADSHighLowAnnual Highs and Lows (as of the fiscal year end 09/30 for the five most recent full financial years)*20175.592.67201610.21.62Quarterly Highs and Lows (for the two most recent full financial years and any subsequent period, based on calendarquarter end)*2018Third Quarter8.006.30Second Quarter8.824.25First Quarter6.403.702017Fourth Quarter5.592.91Third Quarter3.992.67Second Quarter4.063.07First Quarter5.152.832016Fourth Quarter6.594.20Third Quarter10.201.62Second Quarter3.101.97First Quarter3.602.12Monthly Highs and Lows (for the most recent six months)September 20188.006.41August 20187.706.63July 20187.506.30June 20188.827.55May 20187.805.92April 20187.454.25*The Company effected a 1for10 reverse stock split of its ordinary shares on November 6, 2012 (the “Reverse Split”). The ratio between each AmericanDepositary Share (“ADS”) and its underlying ordinary share postReverse Split remains the same, namely, one ADR remains to represent one ordinary sharepost the Reverse Split. The price listed here after November 6, 2012 reflected the effect from the Reverse Split.B. PLAN OF DISTRIBUTION.Not Applicable.C. MARKETS.Our ordinary shares are not currently listed on any trading market. Our ADSs were voluntarily delisted from the NASDAQ Capital Market on September 19,2018. We have applied to NASDAQ for the listing of our ordinary shares on the NASDAQ Capital Market and received an approval for listing of Ordinary Shares onAugust 6, 2018, and as of the date of this transition report, that application and approval are currently under review.47D. SELLING SHAREHOLDERS.Not applicable.E. DILUTION.Not applicable.F. EXPENSES OF THE ISSUE.Not applicable.ITEM 10. ADDITIONAL INFORMATION.A. SHARE CAPITALNot applicable.B. MEMORANDUM AND ARTICLES OF ASSOCIATIONWe are a British Virgin Islands company incorporated with limited liability and our affairs are governed by the provisions of our memorandum of associationand articles of association, as amended and restated from time to time, and by the provisions of applicable British Virgin Islands law.Our memorandum of association and articles of association authorize the issuance of up to 251,000,000 shares, which are designated into (i) 250,000,000 ofordinary shares of the Company (“Ordinary Shares”), and (ii) 1,000,000 preferred shares of the Company (“Preferred Shares”), in each case with the rights,preferences and privileges as set out in the memorandum and articles of association of the Company.Please see below for a description of our ADSs under “Item 12. Description of Securities Other Than Equity Securities – D. American Depository Shares.”The following is a summary of the material provisions of our ordinary shares and our memorandum of association and articles of association.Ordinary SharesAll of our issued and outstanding ordinary shares are fully paid and nonassessable. Holders of our ordinary shares who are nonresidents of the BritishVirgin Islands may freely hold and vote their shares.Subject to the memorandum and articles of association (and, for greater clarity, without prejudice to any special rights conferred thereby on the holders ofany other shares), an Ordinary Share of the Company confers on the holder:(a)the right to one vote per Ordinary Share at a meeting of the members or on any resolution of members;(b)the right to an equal share in any distribution paid by the Company; and(c)the right to an equal share in the distribution of the surplus assets of the Company on a winding up;48Subject to the memorandum and articles of association (and, for greater clarity, without prejudice to any special rights conferred thereby on the holders ofany other shares), a Preferred Share of the Company confers on the holder:(a)the right to 399 votes per Preferred Share at a meeting of the members or on any resolution of members;(b)the right to an equal share in any distribution paid by the Company;(c)the right to an equal share in the distribution of the surplus assets of the Company on a winding up;(d)be freely transferable, in whole or in part, by Mr. Xuesong Song to any third party through one or more Private Transactions, subject toApplicable Law; and(e)be freely transferable, in whole or in part, by Mr. Xuesong Song to any third party through one or more Public Transactions, subject to ApplicableLaw and Automatic Conversion of such Preferred Share(s) into Ordinary Share(s).Each Preferred Share shall be automatically converted at any time after issue and without the payment of any additional sum into an equal number of fullypaid Ordinary Shares upon the conclusion of any transfer by Mr. Xuesong Song to any third party through one or more Public Transactions.Limitation on Liability and Indemnification MattersUnder British Virgin Islands law, each of our directors and officers, in performing his or her functions, is required to act honestly and in good faith with aview to our best interests and exercise the care, diligence and skill that a reasonably prudent person would exercise in comparable circumstances. Our memorandumof association and articles of association provide that, to the fullest extent permitted by British Virgin Islands law or any other applicable laws, our directors will notbe personally liable to us or our shareholders for any acts or omissions in the performance of their duties. Such limitation of liability does not affect the availabilityof equitable remedies such as injunctive relief or rescission. These provisions will not limit the liability of directors under United States federal securities laws.We may indemnify any of our directors or anyone serving at our request as a director of another entity against all expenses, including legal fees, andagainst all judgments, fines and amounts paid in settlement and reasonably incurred in connection with legal, administrative or investigative proceedings. We mayonly indemnify a director if he or she acted honestly and in good faith with the view to our best interests and, in the case of criminal proceedings, the director hadno reasonable cause to believe that his or her conduct was unlawful. The decision of our board of directors as to whether the director acted honestly and in goodfaith with a view to our best interests and as to whether the director had no reasonable cause to believe that his or her conduct was unlawful, is in the absence offraud sufficient for the purposes of indemnification, unless a question of law is involved. The termination of any proceedings by any judgment, order, settlement,conviction or the entry of no plea does not, by itself, create a presumption that a director did not act honestly and in good faith and with a view to our best interestsor that the director had reasonable cause to believe that his or her conduct was unlawful. If a director to be indemnified has been successful in defense of anyproceedings referred to above, the director is entitled to be indemnified against all expenses, including legal fees, and against all judgments, fines and amounts paidin settlement and reasonably incurred by the director or officer in connection with the proceedings.We may purchase and maintain insurance in relation to any of our directors or officers against any liability asserted against the directors or officers andincurred by the directors or officers in that capacity, whether or not we have or would have had the power to indemnify the directors or officers against the liabilityas provided in our memorandum of association and articles of association.Insofar as indemnification for liabilities arising under the Securities Act may be permitted for our directors or officers under the foregoing provisions, wehave been informed that in the opinion of the Securities and Exchange Commission, such indemnification is against public policy as expressed in the Securities Actand is therefore unenforceable as a matter of United States law.49Differences in Corporate LawWe were incorporated under, and are governed by, the laws of the British Virgin Islands. The corporate statutes of the State of Delaware and the BritishVirgin Islands are similar, and the flexibility available under British Virgin Islands law has enabled us to adopt memorandum of association and articles of associationthat will provide shareholders with rights that do not vary in any material respect from those they would enjoy if we were incorporated under the Delaware GeneralCorporation Law, or Delaware corporate law. Set forth below is a summary of some of the differences between provisions of the BVI Act applicable to us and thelaws application to companies incorporated in Delaware and their shareholders.Director’s Fiduciary DutiesUnder Delaware corporate law, a director of a Delaware corporation has a fiduciary duty to the corporation and its stockholders. This duty has twocomponents: the duty of care and the duty of loyalty. The duty of care requires that a director act in good faith, with the care that an ordinarily prudent personwould exercise under similar circumstances. Under this duty, a director must inform himself of, and disclose to stockholders, all material information reasonablyavailable regarding a significant transaction. The duty of loyalty requires that a director act in a manner he reasonably believes to be in the best interests of thecorporation. He must not use his corporate position for personal gain or advantage. This duty prohibits selfdealing by a director and mandates that the bestinterest of the corporation and its stockholders take precedence over any interest possessed by a director, officer or controlling stockholder and not shared by thestockholders generally. In general, actions of a director are presumed to have been made on an informed basis, in good faith and in the honest belief that the actiontaken was in the best interests of the corporation. However, this presumption may be rebutted by evidence of a breach of one of the fiduciary duties. Should suchevidence be presented concerning a transaction by a director, a director must prove the procedural fairness of the transaction, and that the transaction was of fairvalue to the corporation.British Virgin Islands law provides that every director of a British Virgin Islands company in exercising his powers or performing his duties shall acthonestly and in good faith and in what the director believes to be in the best interests of the company. Additionally, the director shall exercise the care, diligence andskill that a reasonable director would exercise in the same circumstances taking into account the nature of the company, the nature of the decision and the positionof the director and his responsibilities. In addition, British Virgin Islands law provides that a director shall exercise his powers as a director for a proper purpose andshall not act, or agree to the company acting, in a manner that contravenes British Virgin Islands law or the memorandum association or articles of association of thecompany.Amendment of Governing DocumentsUnder Delaware corporate law, with very limited exceptions, a vote of the stockholders is required to amend the certificate of incorporation. Under BritishVirgin Islands law and our memorandum of association and articles of association, (i) our shareholders may amend our memorandum of association and articles ofassociation by a resolution of shareholders, or (ii) our board of directors may amend our memorandum of association and articles of association by a resolution ofdirectors without a requirement for a resolution of shareholders so long as the amendment does not:●restrict the rights of the shareholders to amend the memorandum of association and articles of association;●change the percentage of shareholders required to pass a resolution of shareholders to amend the memorandum of association and articles ofassociation;●amend the memorandum of association and articles of association in circumstances where the memorandum of association and articles ofassociation cannot be amended by the shareholders; or●amend the provisions of memorandum of association or the articles of association pertaining to “rights attaching to shares,” “rights not varied bythe issue of the shares pari passu,” “variation of rights” and “amendment of memorandum and articles”.50Written Consent of DirectorsUnder Delaware corporate law, directors may act by written consent only on the basis of a unanimous vote. Under British Virgin Islands law, directors’consents need only a majority of directors signing to take effect.Written Consent of ShareholdersUnder Delaware corporate law, unless otherwise provided in the certificate of incorporation, any action to be taken at any annual or special meeting ofstockholders of a corporation, may be taken by written consent of the holders of outstanding stock having not less than the minimum number of votes that wouldbe necessary to take such action at a meeting. As permitted by British Virgin Islands law, shareholders’ consents need only a majority of shareholders signing totake effect. Our memorandum of association and articles of association provide that shareholders may approve corporate matters by way of a resolution consentedto at a meeting of shareholders or in writing by a majority of shareholders entitled to vote thereon.Shareholder ProposalsUnder Delaware corporate law, a shareholder has the right to put any proposal before the annual meeting of shareholders, provided it complies with thenotice provisions in the governing documents. A special meeting may be called by the board of directors or any other person authorized to do so in the governingdocuments, but shareholders may be precluded from calling special meetings. British Virgin Islands law and our memorandum of association and articles ofassociation provide that our directors shall call a meeting of the shareholders if requested in writing to do so by shareholders entitled to exercise at least 30% of thevoting rights in respect of the matter for which the meeting is requested.Sale of AssetsUnder Delaware corporate law, a vote of the stockholders is required to approve the sale of assets only when all or substantially all assets are being sold. Inthe British Virgin Islands, shareholder approval is required when more than 50% of the company’s total assets by value are being disposed of or sold.Dissolution; Winding UpUnder Delaware corporate law, unless the board of directors approves the proposal to dissolve, dissolution must be approved by shareholders holding100% of the total voting power of the corporation. Only if the dissolution is initiated by the board of directors may it be approved by a simple majority of thecorporation’s outstanding shares. Delaware corporate law allows a Delaware corporation to include in its certificate of incorporation a supermajority votingrequirement in connection with dissolutions initiated by the board. As permitted by British Virgin Islands law and our memorandum of association and articles ofassociation, we may be voluntarily liquidated under Part XII of the BVI Act by resolution of directors and resolution of shareholders if we have no liabilities and weare able to pay our debts as they fall due.Redemption of SharesUnder Delaware corporate law, any stock may be made subject to redemption by the corporation at its option or at the option of the holders of such stockprovided there remains outstanding shares with full voting power. Such stock may be made redeemable for cash, property or rights, as specified in the certificate ofincorporation or in the resolution of the board of directors providing for the issue of such stock. As permitted by British Virgin Islands law, and our memorandum ofassociation and articles of association, shares may be repurchased, redeemed or otherwise acquired by us. Our directors must determine that immediately followingthe redemption or repurchase we will be able to satisfy our debts as they fall due and the value of our assets exceeds our liabilities.51Variation of Rights of SharesUnder Delaware corporate law, a corporation may vary the rights of a class of shares with the approval of a majority of the outstanding shares of suchclass, unless the certificate of incorporation provides otherwise. As permitted by British Virgin Islands law, and our memorandum of association and articles ofassociation, if our share capital is divided into more than one class of shares, we may vary the rights attached to any class only with the consent in writing ofholders of not less than threefourths of the issued shares of that class and holders of not less than threefourths of the issued shares of any other class of shareswhich may be affected by the variation.Removal of DirectorsUnder Delaware corporate law, a director of a corporation with a classified board may be removed only for cause with the approval of a majority of theoutstanding shares entitled to vote, unless the certificate provides otherwise. As permitted by British Virgin Islands law and our memorandum of association andarticles of association, directors may be removed by resolution of directors or resolution of shareholders.MergersUnder the BVI Act, two or more companies may merge or consolidate in accordance with the statutory provisions. A merger means the merging of two ormore constituent companies into one of the constituent companies, and a consolidation means the uniting of two or more constituent companies into a newcompany. In order to merger or consolidate, the directors of each constituent company must approve a written plan of merger or consolidation which must beauthorized by a resolution of shareholders.Shareholders not otherwise entitled to vote on the merger or consolidation may still acquire the right to vote if the plan of merger or consolidation containsany provision which, if proposed as an amendment to the memorandum association or articles of association, would entitle them to vote as a class or series on theproposed amendment. In any event, all shareholders must be given a copy of the plan of merger or consolidation irrespective of whether they are entitled to vote atthe meeting or consent to the written resolution to approve the plan of merger or consolidation.Inspection of Books and RecordsUnder Delaware corporate law, any shareholder of a corporation may for any proper purpose inspect or make copies of the corporation’s stock ledger, list ofshareholders and other books and records. Holders of our shares have no general right under British Virgin Islands law to inspect or obtain copies of our list ofshareholders or our corporate records. However, we will provide holders of our shares with annual audited financial statements. See “Where You Can FindAdditional Information.”Conflict of InterestThe BVI Act provides that a director shall, after becoming aware that he is interested in a transaction entered into or to be entered into by the company,disclose that interest to the board of directors of the company. The failure of a director to disclose that interest does not affect the validity of a transaction enteredinto by the director or the company, so long as the director’s interest was disclosed to the board prior to the company’s entry into the transaction or was notrequired to be disclosed (for example where the transaction is between the company and the director himself or is otherwise in the ordinary course of business andon usual terms and conditions). As permitted by British Virgin Islands law and our memorandum of association and articles of association, a director interested in aparticular transaction may vote on it, attend meetings at which it is considered, and sign documents on our behalf which relate to the transaction.52Transactions with Interested ShareholdersDelaware corporate law contains a business combination statute applicable to Delaware public corporations whereby, unless the corporation hasspecifically elected not to be governed by such statute by amendment to its certificate of incorporation, it is prohibited from engaging in certain businesscombinations with an “interested shareholder” for three years following the date that such person becomes an interested shareholder. An interested shareholdergenerally is a person or group who or that owns or owned 15% or more of the target’s outstanding voting stock within the past three years. This has the effect oflimiting the ability of a potential acquirer to make a twotiered bid for the target in which all shareholders would not be treated equally. The statute does not apply if,among other things, prior to the date on which such shareholder becomes an interested shareholder, the board of directors approves either the businesscombination or the transaction that resulted in the person becoming an interested shareholder. This encourages any potential acquirer of a Delaware publiccorporation to negotiate the terms of any acquisition transaction with the target’s board of directors.British Virgin Islands law has no comparable provision. As a result, we cannot avail ourselves of the types of protections afforded by the Delawarebusiness combination statute. However, although British Virgin Islands law does not regulate transactions between a company and its significant shareholders, itdoes provide that such transactions must be entered into bona fide in the best interests of the company and not with the effect of constituting a fraud on theminority shareholders.Independent DirectorsThere are no provisions under Delaware corporate law or under the BVI Act that require a majority of our directors to be independent.Cumulative VotingUnder Delaware corporate law, cumulative voting for elections of directors is not permitted unless the company’s certificate of incorporation specificallyprovides for it. Cumulative voting potentially facilitates the representation of minority shareholders on a board of directors since it permits the minority shareholderto cast all the votes to which the shareholder is entitled on a single director, which increases the shareholder’s voting power with respect to electing such director.There are no prohibitions to cumulative voting under the laws of the British Virgin Islands, but our memorandum of association and articles of association do notprovide for cumulative votingAntitakeover Provisions in Our Memorandum of association and articles of associationSome provisions of our memorandum of association and articles of association may discourage, delay or prevent a change in control of our company ormanagement that shareholders may consider favorable, including provisions that authorize our board of directors to issue preference shares in one or more seriesand to designate the price, rights, preferences, privileges and restrictions of such preference shares.C. MATERIAL CONTRACTS.On January 25, 2018, the Company executed an Asset Exchange Agreement (“AEA”) with C Media Limited, a corporation organized under the laws of theCayman Islands (“C Media”), whereby the Company agreed to purchase all the capital stock and equity interests of LK Technology Ltd, together with its whollyowned subsidiaries MMB Limited and Mobile Media (China) Limited and all respective subsidiaries from C Media in exchange for (i) 185,412,599 ordinary shares ofthe Company, par value $0.01 per share (“Ordinary Shares”), (ii) 1,000,000 preferred shares of Kingtone (“Preferred Shares”) and (iii) all issued and outstandingcapital stock or equity interests of the Company’s subsidiary, Topsky InfoTech Holdings Pte Ltd., and its whollyowned subsidiary Xi’an Softech Co., Ltd.,including all entities effectively controlled by Xi’an Softech Co., Ltd. through contractual arrangements and variable business entities.To consummate the contemplated transactions described above, the Company obtained shareholder consent at a special meeting held on May 20, 2018, (i)to authorize 1,000,000 Preferred Shares, (ii) to authorize additional Ordinary Shares so that total authorized Ordinary Shares is equal to 250,000,000 shares, (iii) to listsuch Ordinary Shares on NASDAQ, and (iv) to approve the transactions contemplated in the Asset Exchange Agreement. Additionally, NASDAQ needed toapprove the contemplated transactions prior to consummation thereof. C Media had the right to terminate the AEA if the closing had not occurred (other thanthrough the failure of C Media to comply fully with its obligations under the AEA) on or before July 31, 2018. The transactions contemplated by the AEA wereconsummated on August 17, 2018.53On January 25, 2018, five shareholders of the Company including its largest shareholder and its Chief Executive Officer executed a Securities PurchaseAgreement, whereby such shareholders agreed to sell a total of 617,988 Ordinary Shares and 282,694 American Depository Shares of the Company to Redstone YYLManagement Limited, a company incorporated in the British Virgin Islands, in exchange for an aggregate purchase price of $1,897,860.09.On August 25, 2018, LK Technology entered into a Stock Purchase Agreement (the “Agreement”) with the shareholders (“Shareholders”) of SuperengineHoldings Limited, a limited liability company organized under the laws of the British Virgin Islands (the “Superengine”), pursuant to which LK Technology acquiredall of the issued and outstanding capital stock of Superengine for an aggregate purchase price of US$60 million (the “Purchase Price”), which are paid by theissuance of our Ordinary Shares in an amount equal to the quotient of (x) the Purchase Price divided by (y) the average of the closing prices of the Ordinary Shareson the NASDAQ Capital Market over the 12 months period preceding July 31, 2018. We are a party to the Agreement in connection with the issuance of theOrdinary Shares and certain other limited purposes.D. EXCHANGE CONTROLS.This section sets forth a summary of the most significant regulations or requirements that affect our business activities in China or our shareholders’ rightto receive dividends and other distributions from us.Regulations on Internet Content ProvidersThe Administrative Measures on Internet Information Services, or the Internet Content Measures, which was promulgated by the State Council onSeptember 25, 2000 and amended on January 8, 2011, set out guidelines on the provision of internet information services. The Internet Content Measures specifiesthat internet information services regarding news, publications, education, medical and health care, pharmacy and medical appliances, among other things, arerequired to be examined, approved and regulated by the relevant authorities. Internet information providers are prohibited from providing services beyond thoseincluded in the scope of their licenses or filings. Furthermore, the Internet Content Measures specifies a list of prohibited content. Internet information providers areprohibited from producing, copying, publishing or distributing information that is humiliating or defamatory to others or that infringes the legal rights of others.Internet information providers that violate such prohibition may face criminal charges or administrative sanctions. Internet information providers must monitor andcontrol the information posted on their websites. If any prohibited content is found, they must remove the content immediately, keep a record of such content andreport to the relevant authorities.The Internet Content Measures classifies internet information services into commercial internet information services and noncommercial internetinformation services. Commercial internet information services refer to services that provide information or services to internet users with charge. A provider ofcommercial internet information services must obtain an ICP License.Regulations on Internet Audiovideo Program ServicesOn December 20, 2007, the MII and the State Administration of Press, Publication, Radio, Film and Television, or the SAPPRFT, jointly issued theAdministrative Provisions for the Internet AudioVideo Program Service, or the Audiovideo Program Provisions, which came into effect on January 31, 2008 andwas amended on August 28, 2015. The Audiovideo Program Provisions defines “internet audiovideo program services” as producing, editing and integrating ofaudiovideo programs, supplying audiovideo programs to the public via the internet, and providing audiovideo programs uploading and transmission services to athird party. Entities providing internet audiovideo programs services must obtain an internet audiovideo program transmission license. Applicants for such licensesshall be stateowned or statecontrolled entities unless an internet audiovideo program transmission license has been obtained prior to the effectiveness of theAudiovideo Program Provisions in accordance with the thenineffect laws and regulations. In addition, foreigninvested enterprises are not allowed to engage inthe abovementioned services. According to the Audiovideo Program Provisions and other relevant laws and regulations, audiovideo programs provided by theentities supplying Internet audiovideo program services shall not contain any illegal content or other content prohibited by the laws and regulations, such as anycontent against the basic principles in the PRC Constitution, any content that damages the sovereignty of the country or national security, and any content thatdisturbs social order or undermine social stability. An audiovideo program that has already been broadcast shall be retained in full for at least 60 days. Movies,television programs and other media content used as Internet audiovideo programs shall comply with relevant administrative regulations on programs broadcaststhrough radio, movie and television channels. Entities providing services related to Internet audiovideo programs shall immediately delete the audiovideoprograms violating laws and regulations, keep relevant records, report relevant authorities and implement other regulatory requirements.54The Categories of the Internet AudioVideo Program Services, or the Audiovideo Program Categories, promulgated by SAPPRFT on March 10, 2017,classifies internet audio/video programs into four categories: (I) Category I internet audio/video program service, which is carried out with a form of radio station ortelevision station; (II) Category II internet audio/video program service, including (a) rebroadcasting service of current political news audio/video programs; (b)hosting, interviewing, reporting and commenting service of arts, entertainment, technology, finance and economics, sports, education and other specializedaudio/video programs; (c) producing (interviewing not included) and broadcasting service of arts, entertainment, technology, finance and economics, sports,education and other specialized audio/video programs; (d) producing and broadcasting service of internet films/dramas; (e) aggregating and broadcasting service offilms, television dramas and cartoons; (f) aggregating and broadcasting service of arts, entertainment, technology, finance and economics, sports, education andother specialized audio/video programs; and (g) live audio/video broadcasting service of cultural activities of common social organizations, sport events or otherorganization activities; and (III) Category III internet audio/video program service, including (a) aggregating service of online audio/video contents, and (b) rebroadcasting service of the audio/video programs uploaded by internet users; and (IV) Category III internet audio/video program service, including (a) rebroadcasting of the radio/television program channels; and (b) rebroadcasting of internet audio/video program channels.On May 27, 2016, the SAPPRFT issued the Notice on Relevant Issues concerning Implementing the Approval Works of Upgrading Mobile Internet AudioVideo Program Service, or the Mobile AudioVideo Program Notice. The Mobile AudioVideo Program Notice provides that the mobile Internet audiovideo programservices shall be deemed Internet audiovideo program service. Entities which have obtained the approvals to provide the Internet audiovideo program servicesmay use mobile WAP websites or mobile applications to provide audiovideo program services. Entities with regulatory approvals may operate mobile applicationsto provide the audiovideo program services The types of the programs shall be within the permitted scope as provided in the licenses and such mobile applicationsshall be filed with the SAPPRFT.Regulations on Production and Operation of Radio/Television ProgramsOn July 19, 2004, the SAPPRFT promulgated the Administrative Measures on the Production and Operation of Radio and Television Programs, or the Radioand Television Program Production Measures, which came into effect on August 20, 2004 and was amended on August 28, 2015. The Radio and Television ProgramProduction Measures provides that any business that produces or operates radio or television programs must first obtain a Radio and Television ProgramProduction and Operation Permit. Entities holding such permits shall conduct their business within the permitted scope as provided in their permits. In addition,foreigninvested enterprises are not allowed to engage in the abovementioned services.Regulations on Online Advertising ServicesOn April 24, 2015, the Standing Committee of the National People’s Congress enacted the Advertising Law of the People’s Republic of China, or the NewAdvertising Law, effective on September 1, 2015. The New Advertising Law increases the potential legal liability of advertising services providers and strengthensregulations of false advertising. On July 4, 2016, the State Administration for Industry and Commerce, or the SAIC, issued the Interim Measures of theAdministration of Online Advertising, or the SAIC Interim Measures, effective on September 1, 2016. The New Advertising Law and the SAIC Interim Measuresrequire that online advertisements may not affect users’ normal internet use and internet popup ads must display a “close” sign prominently and ensure onekeyclosing of the popup windows. The SAIC Interim Measures provides that all online advertisements must be marked “Advertisement” so that viewers can easilyidentify them as such. Moreover, the SAIC Interim Measures treats paid search results as advertisements that are subject to PRC advertisement laws, and requiresthat paid search results be conspicuously identified on search result pages as advertisements. The New Advertising Law and SAIC Interim Measures require us toconduct more stringent examination and monitoring of our advertisers and the content of their advertisements.55Regulations on Online GamesIn September 2009, the GAPP (currently known as the SAPPRFT), together with the National Copyright Administration, and the National Office ofCombating Pornography and Illegal Publications jointly issued the Notice on Further Strengthening on the Administration of Preexamination and Approval ofOnline Game and the Examination and Approval of Imported Online Game, or the Circular 13. The Circular 13 states that foreign investors are not permitted to investin online game operating businesses in the PRC via wholly foreignowned entities, Sinoforeign equity joint ventures or cooperative joint ventures or to exercisecontrol over or participate in the operation of domestic online game businesses through indirect means, such as other joint venture companies or contractual ortechnical arrangements. If the our contractual arrangements were deemed under the Circular 13 to be an “indirect means” for foreign investors to exercise controlover or participate in the operation of a domestic online game business, our contractual arrangements might be challenged by the SAPPRFT. We are not aware ofany online game companies which use the same or similar contractual arrangements having been challenged by the SAPPRFT as using those contractualarrangements as an “indirect means” for foreign investors to exercise control over or participate in the operation of a domestic online game business or having beenpenalized or ordered to terminate operations since the Circular 13 became effective. However it is unclear whether and how the Circular 13 might be interpreted orimplemented in the future. See “Risk Factors—If the PRC government finds that the agreements that establish the structure for operating certain of our operations inChina do not comply with PRC regulations relating to the relevant industries, or if these regulations or the interpretation of existing regulations change in the future,we could be subject to severe penalties or be forced to relinquish our interests in those operations.”The Interim Measures for the Administration of Online Games, or the Online Game Measures, issued by the MOC, which took effect on August 1, 2010 andamended on December 15, 2017, regulates a broad range of activities related to the online games business, including the development, production and operation ofonline games, the issuance of virtual currencies used for online games, and the provision of virtual currency trading services. The Online Game Measures providesthat any entity that is engaged in online game operations must obtain an Network Cultural Business Permit, and require the content of an imported online game to beexamined and approved by the MOC prior to the game’s launch and require a domestic online game to be filed with the MOC within 30 days after its launch. TheNotice of the Ministry of Culture on the Implementation of the Interim Measures for the Administration of Online Games, which was issued by the MOC on July 29,2010 to implement the Online Game Measures, (i) requires online game operators to protect the interests of online game users and specifies that certain terms thatmust be included in service agreements between online game operators and the users of their online games, (ii) requires content review of imported online gamesand filing procedures for domestic online games, (iii) emphasizes the protection of minors playing online games, and (iv) requests online game operators to promoterealname registration by their game users.Regulations on Information Security, Censorship and PrivacyThe Standing Committee of the National People’s Congress, China’s national legislative body, enacted the Decisions on the Maintenance of InternetSecurity on December 28, 2000 that may subject persons to criminal liabilities in China for any attempt to use the internet to: (i) gain improper entry to a computer orsystem of strategic importance; (ii) disseminate politically disruptive information; (iii) leak state secrets; (iv) spread false commercial information or (v) infringe uponintellectual property rights. In 1997, the Ministry of Public Security issued the Administration Measures on the Security Protection of Computer InformationNetwork with International Connections which prohibits using the internet to leak state secrets or to spread socially destabilizing materials. If an ICP license holderviolates these measures, the PRC government may revoke its ICP license and shut down its websites. Pursuant to the Ninth Amendment to the Criminal Law issuedby the Standing Committee of the National People’s Congress on August 29, 2015, effective on November 1, 2015, any ICP provider that fails to fulfill the obligationsrelated to internet information security as required by applicable laws and refuses to take corrective measures, will be subject to criminal liability for (i) any largescale dissemination of illegal information; (ii) any severe effect due to the leakage of users’ personal information; (iii) any serious loss of evidence of criminalactivities; or (iv) other severe situations, and any individual or entity that (i) sells or provides personal information to others unlawfully or (ii) steals or illegallyobtains any personal information will be subject to criminal liability in severe situations.56The Cybersecurity Law of the PRC, or the Cybersecurity Law, which was promulgated on November 7, 2016 by the Standing Committee of the NationalPeople’s Congress and came into effect on June 1, 2017, provides that network operators shall meet their cyber security obligations and shall take technicalmeasures and other necessary measures to protect the safety and stability of their networks. Under the Cybersecurity Law, network operators are subject to varioussecurity protectionrelated obligations, including: (i) network operators shall comply with certain obligations regarding maintenance of the security of internetsystems; (ii) network operators shall verify users’ identities before signing agreements or providing certain services such as information publishing or realtimecommunication services; (iii) when collecting or using personal information, network operators shall clearly indicate the purposes, methods and scope of theinformation collection, the use of information collection, and obtain the consent of those from whom the information is collected; (iv) network operators shall strictlypreserve the privacy of user information they collect, and establish and maintain systems to protect user privacy; (v) network operators shall strengthenmanagement of information published by users, and when they discover information prohibited by laws and regulations from publication or dissemination, theyshall immediately stop dissemination of that information, including taking measures such as deleting the information, preventing the information from spreading,saving relevant records, and reporting to the relevant governmental agencies.Regulations on Intellectual Property RightsRegulations on CopyrightThe Copyright Law of the PRC, or the Copyright Law, which took effect on June 1, 1991 and was amended in 2001 and in 2010, provides that Chinesecitizens, legal persons, or other organizations shall, whether published or not, own copyright in their copyrightable works, which include, among others, works ofliterature, art, natural science, social science, engineering technology and computer software. Copyright owners enjoy certain legal rights, including right ofpublication, right of authorship and right of reproduction. The Copyright Law as revised in 2010 extends copyright protection to Internet activities, productsdisseminated over the Internet and software products. In addition, Copyright Law provides for a voluntary registration system administered by the China CopyrightProtection Center, or the CPCC. According to the Copyright Law, an infringer of the copyrights shall be subject to various civil liabilities, which include ceasinginfringement activities, apologizing to the copyright owners and compensating the loss of copyright owner. Infringers of copyright may also subject to fines and/oradministrative or criminal liabilities in severe situations.The Computer Software Copyright Registration Measures, or the Software Copyright Measures, promulgated by the State Council on December 20, 2001and amended on January 30, 2013, regulates registrations of software copyright, exclusive licensing contracts for software copyright and assignment agreements.The National Copyright Administration, or the NCA administers software copyright registration and the CPCC, is designated as the software registration authority.The CPCC shall grant registration certificates to the Computer Software Copyrights applicants which meet the requirements of both the Software CopyrightMeasures and the Computer Software Protection Regulations (Revised in 2013).The Provisions of the Supreme People’s Court on Certain Issues Related to the Application of Law in the Trial of Civil Cases Involving Disputes onInfringement of the Information Network Dissemination Rights specifies that disseminating works, performances or audiovideo products by the internet users orthe internet service providers via the internet without the permission of the copyright owners shall be deemed to have infringed the right of dissemination of thecopyright owner.57The Measures for Administrative Protection of Copyright Related to Internet, which was jointly promulgated by the NCA and the MIIT on April 29, 2005and became effective on May 30, 2005, provides that upon receipt of an infringement notice from a legitimate copyright holder, an ICP operator must take remedialactions immediately by removing or disabling access to the infringing content. If an ICP operator knowingly transmits infringing content or fails to take remedialactions after receipt of a notice of infringement that harms public interest, the ICP operator could be subject to administrative penalties, including an order to ceaseinfringing activities, confiscation by the authorities of all income derived from the infringement activities, or payment of fines.On May 18, 2006, the State Council promulgated the Regulations on the Protection of the Right to Network Dissemination of Information (as amended in2013). Under these regulations, an owner of the network dissemination rights with respect to written works or audio or video recordings who believes thatinformation storage, search or link services provided by an Internet service provider infringe his or her rights may require that the Internet service provider delete, ordisconnect the links to, such works or recordings.Patent LawsAccording to the Patent Law of the PRC (Revised in 2008), the State Intellectual Property Office is responsible for administering patent law in the PRC. Thepatent administration departments of provincial, autonomous region or municipal governments are responsible for administering patent law within their respectivejurisdictions. The Chinese patent system adopts a firsttofile principle, which means that when more than one person file different patent applications for the sameinvention, only the person who files the application first is entitled to obtain a patent of the invention. To be patentable, an invention or a utility model must meetthree criteria: novelty, inventiveness and practicability. A patent is valid for twenty years in the case of an invention and ten years in the case of utility models anddesigns.Trademark LawsTrademarks are protected by the Trademark Law of the PRC (Revised in 2013) which was adopted in 1982 and subsequently amended in 1993, 2001 and 2013respectively as well as by the Implementation Regulations of the PRC Trademark Law adopted by the State Council in 2002 and as most recently amended on April29, 2014. The Trademark Office under the SAIC handles trademark registrations. The Trademark Office grants a tenyear term to registered trademarks and the termmay be renewed for another tenyear period upon request by the trademark owner. A trademark registrant may license its registered trademarks to another party byentering into trademark license agreements, which must be filed with the Trademark Office for its record. As with patents, the Trademark Law has adopted a firsttofile principle with respect to trademark registration. If a trademark applied for is identical or similar to another trademark which has already been registered or subjectto a preliminary examination and approval for use on the same or similar kinds of products or services, such trademark application may be rejected. Any personapplying for the registration of a trademark may not injure existing trademark rights first obtained by others, nor may any person register in advance a trademark thathas already been used by another party and has already gained a “sufficient degree of reputation” through such party’s use.Regulations on Domain NamesThe MIIT promulgated the Measures on Administration of Internet Domain Names, or the Domain Name Measures, on August 24, 2017, which took effecton November 1, 2017 and replaced the Administrative Measures on China Internet Domain Name promulgated by MII on November 5, 2004. According to theDomain Name Measures, the MIIT is in charge of the administration of PRC internet domain names. The domain name registration follows a firsttofile principle.Applicants for registration of domain names shall provide the true, accurate and complete information of their identities to domain name registration serviceinstitutions. The applicants will become the holder of such domain names upon the completion of the registration procedure.Relevant Regulations of the Hightech EnterpriseThe Ministry of Information Industry, the Ministry of Science and Technology and the State Tax Bureau collectively promulgated and issued the“Certifying Standard and Managing Measures for Hightech Enterprises” and “the Hightech Areas of Main National Support” on April 14, 2008 to certify the Hightech enterprise and encourage and support the development of the Chinese Hightech enterprises. Under the Hightech Enterprises Measures, the enterprise canenjoy the favorable tax policy when it is certified as a Hightech enterprise by the Ministry of Information Industry, the Ministry of Science and Technology and theState Tax Bureau or with its provincial branch according to the stipulated standard. The software and computer and network technology are recognized as the mainnational supported Hightech field. Kingtone Information is a Hightech enterprise and enjoys a favorable income tax rate of 15%.58Laws and Regulations of Intellectual Property RightsChina has adopted legislation governing intellectual property rights, including patents, copyrights and trademarks. China is a signatory to the maininternational conventions on intellectual property rights and became a member of the Agreement on Trade Related Aspects of Intellectual Property Rights upon itsaccession to the WTO in December 2001.PatentsThe “Patent Law of the People’s Republic of China” promulgated by the Standing Committee of the National People's Congress, adopted in 1985 andrevised in 1992, 2001 and 2008, protects registered patents. The State Intellectual Property Office of PRC handles granting patent rights, providing for a twentyyearpatent term for inventions and a tenyear patent term for utility models and designs. As we disclosed in Item 4, of this transition report on Form 20F, throughKingtone Information, we have been granted one invention patent “wireless video transmission system based on BREW platform” by the State Intellectual PropertyOffice (“SIPO”) of PRC on September 23, 2009 and therefore such invention is entitled to all the protections provided under the Patent Law for twenty years.Computer Software Copyright and AdministrationOn December 20, 2001, the State Council of PRC issued the “Regulation for Computer Software Protection of the People’s Republic of China” (the“Regulation for Computer Software Protection”) which became effective on January 1, 2002 to protect the interests of copyright owners, to promote the research andapplication and to encourage the development of the Chinese software industry. Under the Regulation for Computer Software Protection, natural persons, legalpersons or any other organizations shall have a copyright on the software developed by such persons no matter whether such software has been published. Theprotection period of software copyrights owned by the legal person or other organization is fifty years and expires on December 31 of the fiftieth year from the initialpublication date of such computer software. Currently, Kingtone Information has twelve registration certificates for software copyrights.TrademarksThe “Trademark Law of the People’s Republic of China” promulgated by the State Council of PRC, adopted in 1982 and revised in 1993 and 2001, protectsregistered trademarks. The Trademark Office under the Chinese State Administration for Industry and Commerce handles trademark registrations and grants a termof ten years to registered trademarks which are renewable for another ten years after the application to the Trademark Office by the owners of the trademarks.Trademark license agreements must be filed with the Trademark Office for record. China has a “firsttoregister” system that requires no evidence of prior use orownership. Kingtone Information has its registered trademarks as described in Item 4 of this transition report on Form 20F. Accordingly, such trademarks areentitled to the protection under the Trademark Law.Foreign Currency ExchangeOn August 29, 2008, the SAFE issued the Notice of the General Affairs Department of the State Administration of Foreign Exchange on the RelevantOperating Issues concerning the Improvement of the Administration of Payment and Settlement of Foreign Currency Capital of Foreignfunded Enterprises, orCircular 142. Pursuant to Circular 142, RMB converted from the foreign currencydenominated capital of a foreigninvested company may only be used for purposeswithin the business scope approved by the applicable governmental authority and may not be used for equity investments within the PRC unless specificallyprovided for otherwise. The use of such Renminbi capital may not be changed without SAFE’s approval and may not in any case be used to repay Renminbi loans ifthe proceeds of such loans have not been used.59See “Risk Factors — Risks Related to Doing Business in China — PRC regulation of loans and direct investment by offshore holding companies to PRCentities may delay or prevent us from using the proceeds of our initial public offering to make loans or additional capital contributions to our PRC operatingsubsidiaries, which could materially and adversely affect our liquidity and our ability to fund and expand our business”.Dividend DistributionWe are a British Virgin Islands holding company and substantially all of our operations are conducted through LK Technology. We rely on dividends andother distributions from our LK Technology and its subsidiaries to provide us with our cash flow and allow us to pay dividends on the shares underlying our ADSsand meet our other obligations. The principal regulations governing distribution of dividends paid by wholly foreignowned enterprises include:1.Wholly ForeignOwned Enterprise Law (1986), as amended; and2.Implementation Rules on Wholly ForeignOwned Enterprise Law (1990), as amended.Under these regulations, wholly foreignowned enterprises in China may pay dividends only out of their accumulated profits, if any, determined inaccordance with PRC accounting standards and regulations. In addition, wholly foreignowned enterprises in China are required to set aside at least 10% of theiraftertax profit based on PRC accounting standards each year to its general reserves until the accumulative amount of such reserves reach 50% of its registeredcapital. These reserves are not distributable as cash dividends. The board of directors of a FIE has the discretion to allocate a portion of its aftertax profits to staffwelfare and bonus funds, which may not be distributed to equity owners except in the event of liquidation.Regulation of Foreign Exchange in Certain Onshore and Offshore TransactionsIn October 2005, the SAFE issued the Notice on Issues Relating to the Administration of Foreign Exchange in Fundraising and Return InvestmentActivities of Domestic Residents Conducted via Offshore Special Purpose Companies, or SAFE Notice 75, which became effective as of November 1, 2005, and wasfurther supplemented by two implementation notices issued by the SAFE on November 24, 2005 and May 29, 2007, respectively. Under Circular 75, prior registrationwith the local SAFE branch is required for PRC residents to establish or to control an offshore company for the purposes of financing that offshore company withassets or equity interests in an onshore enterprise located in the PRC. An amendment to the registration or filing with the local SAFE branch by such PRC resident isalso required for the injection of equity interests or assets of an onshore enterprise in the offshore company or overseas funds raised by such offshore company, orany other material change with respect to the offshore company in connection with any increase or decrease of capital, transfer of shares, merger, division, equityinvestment, debt investment, or creation of any security interest over any assets located in the PRC.Under SAFE Notice 75, PRC residents are further required to repatriate into the PRC all of their dividends, profits or capital gains obtained from theirshareholdings in the offshore entity within 180 days of their receipt of such dividends, profits or capital gains. The registration and filing procedures under SAFENotice 75 are prerequisites for other approval and registration procedures necessary for capital inflow from the offshore entity, such as inbound investments orshareholders loans, or capital outflow to the offshore entity, such as the payment of profits or dividends, liquidating distributions, equity sale proceeds, or thereturn of funds upon a capital reduction. Therefore, failure to comply with such registration may subject us to certain restrictions on, including but not limited to, theincrease of the registered capital of our PRC subsidiary, making loans to our PRC subsidiary, and making distributions to us from our onshore companies.Regulations of Overseas Investments and ListingsOn August 8, 2006, six PRC regulatory agencies, including the MOFCOM, the State Assets Supervision and Administration Commission, the StateAdministration for Taxation, the State Administration for Industry and Commerce, the CSRC and the SAFE, jointly adopted the New M&A Rule, which becameeffective on September 8, 2006. This regulation, among other things, includes provisions that purport to require that an offshore SPV formed for purposes ofoverseas listing of equity interests in PRC companies and controlled directly or indirectly by PRC companies or individuals obtain the approval of the CSRC prior tothe listing and trading of such SPV’s securities on an overseas stock exchange.60On September 21, 2006, the CSRC published on its official website procedures regarding its approval of overseas listings by SPVs. The CSRC approvalprocedures require the filing of a number of documents with the CSRC and it would take several months to complete the approval process.The application of the New M&A Rule with respect to overseas listings of SPVs remains unclear with no consensus currently existing among the leadingPRC law firms regarding the scope of the applicability of the CSRC approval requirement.We believe that, based on our understanding of the current PRC laws, regulations and rules and the procedures announced on September 21, 2006, there isno requirement in this regulation that would require an application to be submitted to the MOFCOM or the CSRC for the approval of the listing and trading of ourADSs on the NASDAQ Capital Market.See “Risk Factors — Risks Related to Doing Business in China — If we were required to obtain the prior approval of the China Securities RegulatoryCommission, or CSRC, of the listing and trading of our ADSs on the NASDAQ Capital Market, we may face regulatory actions or other sanctions from the CSRC orother PRC regulatory agencies.”E. TAXATIONThe following discussion sets forth the material British Virgin Islands, PRC and U.S. federal income tax consequences of an investment in our ADSs andthe ordinary shares represented by our ADSs, sometimes referred to collectively as the “securities”. It is based upon laws and relevant interpretations thereof ineffect as of the date of this report, all of which are subject to change. This discussion does not deal with all possible tax consequences relating to an investment inthe securities, such as the tax consequences under state, local and other tax laws. As used in this discussion, “we,” “our” and “us” refers only to LuokungTechnology Ltd.British Virgin Islands TaxationUnder the law of the British Virgin Islands as currently in effect, a holder of the securities who is not a resident of the British Virgin Islands is not liable forBritish Virgin Islands tax on dividends paid with respect to the securities and all holders of the securities are not liable to the British Virgin Islands for tax on gainsrealized during that year on the sale or disposal of such ordinary shares. The British Virgin Islands does not impose a withholding tax on dividends paid by acompany incorporated or reregistered under the BVI Act.There are no capital gains, gift or inheritance taxes levied by the British Virgin Islands on companies incorporated under the BVI Act. In addition, shares ofcompanies incorporated under the BVI Act are not subject to transfer taxes, stamp duties or similar charges.There is no income tax treaty or convention currently in effect between the United States and the British Virgin Islands or between China and the BritishVirgin Islands.61People’s Republic of China TaxationIn 2007, the PRC National People’s Congress enacted the new Enterprise Income Tax Law (the “EIT Law”), which became effective on January 1, 2008. Thenew EIT Law imposes a single uniform income tax rate of 25% on all Chinese enterprises, including foreigninvested enterprises, and levies a withholding tax rate of10% on dividends payable by Chinese subsidiaries to their foreign shareholders unless any such foreign shareholders’ jurisdiction of incorporation has a tax treatywith China that provides for a different withholding agreement. Under the new EIT Law, enterprises established outside China but deemed to have a “de factomanagement body” within the country may be considered “resident enterprises” for Chinese tax purposes and, therefore, may be subject to an enterprise income taxrate of 25% on their worldwide income. Pursuant to the implementation rules of the new EIT Law, a “de facto management body” is defined as a body that hasmaterial and overall management control over the business, personnel, accounts and properties of the enterprise. Although substantially all members of ourmanagement are located in China, it is unclear whether Chinese tax authorities would require (or permit) us to be treated as PRC resident enterprises. If we aredeemed a Chinese tax resident enterprise, we may be subject to an enterprise income tax rate of 25% on our worldwide income, excluding dividends received directlyfrom another Chinese tax resident enterprise, as well as PRC enterprise income tax reporting obligations. If we are not deemed to be a Chinese tax resident enterprise,we may be subject to certain PRC withholding taxes. See “Risk Factors — Risks Related to Doing Business in China — Our holding company structure may limit thepayment of dividends.” As a result of such changes, our historical tax rates may not be indicative of our tax rates for future periods and the value of our ADSs orordinary shares may be adversely affected. If we are deemed a PRC resident enterprise and investors’ gain from the sales of the securities and dividends payable byus are deemed sourced from China, such gains and dividends payable by us may be subject to PRC tax. See “Risk Factors — Risks Related to Doing Business inChina — If we were deemed a “resident enterprise” by PRC tax authorities, we could be subject to tax on our global income at the rate of 25% under the New EITLaw and our nonPRC shareholders could be subject to certain PRC taxes.United States Federal Income TaxationGeneralThe following is a discussion of the material U.S. federal income tax consequences to an investor of purchasing, owning and disposing of our securities.This discussion does not address any aspects of U.S. federal gift or estate tax or the state, local or nonU.S. tax consequences of an investment in the securities.YOU SHOULD CONSULT YOUR OWN TAX ADVISORS CONCERNING THE U.S. FEDERAL, STATE, LOCAL AND NONU.S. TAX CONSEQUENCES OFPURCHASING, OWNING AND DISPOSING OF THE SECURITIES IN YOUR PARTICULAR SITUATION.This discussion applies only to those investors that purchase the securities in this offering and that hold the securities as capital assets within the meaningof section 1221 of the Internal Revenue Code of 1986, as amended (the “Code”). This section does not apply to holders that may be subject to special tax rules,including but not limited to:1.dealers in securities or currencies;2.traders in securities that elect to use a marktomarket method of accounting;3.banks, insurance companies or certain financial institutions;4.taxexempt organizations;5.governments or agencies or instrumentalities thereof;6.partnerships or other entities treated as partnerships or other passthrough entities for U.S. federal income tax purposes or persons holding thesecurities through such entities;7.regulated investment companies or real estate investment trusts;8.holders subject to the alternative minimum tax;9.holders that actually or constructively own 10% or more of the total combined voting power of all classes of our shares entitled to vote;10.holders that acquired the securities pursuant to the exercise of employee stock options, in connection with employee stock incentive plans orotherwise as compensation;11.holders that hold the securities as part of a straddle, hedging or conversion transaction; or12.holders whose functional currency is not the U.S. dollar.62This section is based on the Code, its legislative history, existing and proposed U.S. Treasury regulations, published rulings and other administrativeguidance of the U.S. Internal Revenue Service (the “IRS”) and court decisions, all as in effect on the date hereof. These laws are subject to change or differentinterpretation by the IRS or a court, possibly on a retroactive basis.We have not sought, and will not seek, a ruling from the IRS as to any U.S. federal income tax consequence described herein. The IRS may disagree withthe discussion herein, and its determination may be upheld by a court. Moreover, there can be no assurance that future legislation, regulation, administrative rulingsor court decisions will not adversely affect the accuracy of the statements in this discussion.The discussion below of the U.S. federal income tax consequences to “U.S. Holders” will apply to a beneficial owner of the securities that is for U.S. federalincome tax purposes:1.a citizen or resident of the United States;2.a corporation (or other entity treated as a corporation) that is created or organized (or treated as created or3.organized) under the laws of the United States, any state thereof or the District of Columbia;4.an estate whose income is subject to U.S. federal income tax regardless of its source; or5.a trust if (a) a U.S. court can exercise primary supervision over the trust’s administration and one or more U.S.6.persons are authorized to control all substantial decisions of the trust, or (b) if the trust has a valid election in effect under applicable U.S.Treasury regulations to be treated as a U.S. person.If a beneficial owner of the securities is not described as a U.S. Holder and is not an entity treated as a partnership or other passthrough entity for U.S.federal income tax purposes, such owner will be considered a “NonU.S. Holder.” The material U.S. federal income tax consequences applicable specifically to NonU.S. Holders are described below under the heading “Tax Consequences to NonU.S. Holders.”If a partnership (including for this purpose any entity treated as a partnership for U.S. tax purposes) is a beneficial owner of the securities, the U.S. taxtreatment of a partner in the partnership generally will depend on the status of the partner and the activities of the partnership. A holder of the securities that is apartnership or partners in such a partnership should consult their own tax advisors about the U.S. federal income tax consequences of holding and disposing of thesecurities.This discussion assumes that any distributions made (or deemed made) on the securities and any consideration received by a holder in consideration forthe sale or other disposition of the securities will be in U.S. dollars. This discussion also assumes that the representations contained in the Deposit Agreement aretrue and that the obligations in the Deposit Agreement and any related agreement will be complied with in accordance with their terms. Finally, this discussionassumes that each ADS will only represent ordinary shares in us, and will not represent any other type of security, such as a bond, cash or other property.63For U.S. federal income tax purposes, a holder of an ADS will be treated as the beneficial owner of the shares represented by such ADS and an exchange ofan ADS for ordinary shares will not be subject to U.S. federal income tax. The U.S. Treasury has expressed concerns that parties to whom ADSs are prereleased, orintermediaries in the chain of ownership between holders of ADSs and the issuer of the securities underlying the ADSs may be taking actions that are inconsistentwith the claiming of foreign tax credits by U.S. Holders of ADSs. Such actions would also be inconsistent with the claiming of the reduced rate of tax applicable todividends received by certain noncorporate U.S. Holders, including individual U.S. Holders, as described below under “Tax Consequences to U.S.Holders — Taxation of Distributions.” Accordingly, the availability of foreign tax credits or the reduced tax rate for dividends received by certain noncorporate U.S.Holders, including individual U.S. Holders, could be affected by actions taken by parties to whom the ADSs are released, or by future actions by the U.S. Treasury.Tax Consequences to U.S. HoldersTaxation of DistributionsSubject to the passive foreign investment company, or PFIC, rules discussed below, the gross amount of any cash distributions we make with respect to aU.S. Holder in respect of such U.S. Holder’s ADSs or shares will generally be treated as dividend income if the distributions are made from our current oraccumulated earnings and profits, calculated according to U.S. federal income tax principles. Cash dividends will generally be subject to U.S. federal income tax asordinary income on the day the U.S. Holder actually or constructively receives such income. With respect to noncorporate U.S. Holders for taxable years beginningbefore January 1, 2011, dividends may be taxed at the lower applicable longterm capital gains rate provided that (a) our ADSs or shares are readily tradable on anestablished securities market in the United States, or, in the event we are deemed to be a Chinese “resident enterprise” under the EIT Law (as described above under“People’s Republic of China Taxation”), we are eligible for the benefits of the income tax treaty between the United States and the PRC (the “U.S.PRC Tax Treaty”),(b) we are not a PFIC, as discussed below, for either the taxable year in which the dividend was paid or the preceding taxable year, and (c) certain holding periodrequirements are met. Under published IRS authority, ADSs are considered for purposes of clause (a) above to be readily tradable on an established securitiesmarket in the United States only if they are listed on certain exchanges, which presently include the NASDAQ Capital Market. U.S. Holders should consult their owntax advisors regarding the availability of the lower rate for any dividends paid with respect to our ADSs or shares.Dividends will not be eligible for the dividendsreceived deduction allowed to U.S. corporations in respect of dividends received from other U.S.corporations. Generally, if we distribute noncash property as a dividend (other than pro rata distributions of our shares) out of our current or accumulated earningsand profits (as determined for U.S. federal income tax purposes), a U.S. Holder generally will include in income an amount equal to the fair market value of theproperty, on the date that it is distributed.Distributions in excess of current and accumulated earnings and profits, as determined for U.S. federal income tax purposes, will be treated as a nontaxablereturn of capital to the extent of the U.S. Holder’s basis in its shares or ADSs and thereafter as capital gain. However, we do not plan on calculating our earnings andprofits in accordance with U.S. federal income tax principles. U.S. holders therefore should generally assume that any distributions paid by us will be treated asdividends for U.S. federal income tax purposes.If PRC taxes apply to dividends paid by us to a U.S. Holder (see “People’s Republic of China Taxation,” above), such taxes may be treated as foreign taxeseligible for credit against such holder’s U.S. federal income tax liability (subject to certain limitations), and a U.S. Holder may be entitled to certain benefits under theU.S.PRC Tax Treaty. The rules relating to the U.S. foreign tax credit are complex. U.S. Holders should consult their own tax advisors regarding the creditability ofany such PRC tax and their eligibility for the benefits of the U.S.PRC Tax Treaty.64Taxation of Dispositions of SharesSubject to the PFIC rules discussed below, a U.S. holder that sells or otherwise disposes of its shares will recognize capital gain or loss for U.S. federalincome tax purposes equal to the difference between the amount realized and such U.S. Holder’s tax basis in its shares. Prior to January 1, 2011, capital gains of anoncorporate U.S. holder are generally taxed at a maximum rate of 15% where the property is held for more than one year (and 20% thereafter). The ability to deductcapital losses is subject to limitations.If PRC taxes apply to any gain from the disposition of our shares by a U.S. Holder, such taxes may be treated as foreign taxes eligible for credit against suchholder’s U.S. federal income tax liability (subject to certain limitations), and a U.S. Holder may be entitled to certain benefits under the U.S.PRC Tax Treaty. U.S.Holders should consult their own tax advisors regarding the creditability of any such PRC tax and their eligibility for the benefits of the U.S.PRC Tax Treaty.Passive Foreign Investment CompanyWe do not expect to be a PFIC for U.S. federal income tax purposes for our current tax year or in the foreseeable future. The determination of whether or notwe are a PFIC in respect of any of our taxable years is a factual determination that cannot be made until the close of the applicable tax year and that is based on thetypes of income we earn and the value and composition of our assets (including goodwill), all of which are subject to change. Therefore, we can make no assurancesthat we will not be a PFIC in respect of our current taxable year or in the future.In general, we will be a PFIC in any taxable year if either:1.at least 75% of our gross income for the taxable year is passive income; or2.at least 50% of the value, determined on the basis of a quarterly average, of our assets is attributable to assets that produce or are held for theproduction of passive income.Passive income includes dividends, interest, royalties, rents (other than certain rents and royalties derived in the active conduct of a trade or business), theexcess of gains over losses from certain types of transactions in commodities, annuities and gains from assets that produce passive income. We will be treated asowning our proportionate share of the assets and earning our proportionate share of the income of any corporation in which we own, directly or indirectly, at least25% (by value) of the stock.If we are treated as a PFIC in any year during which a U.S. Holder owns the securities, and such U.S. Holder did not make a marktomarket election, asdescribed below, the U.S. Holder will be subject to special rules with respect to:1.any gain recognized by the U.S. Holder on the sale or other disposition of its shares; and any excess distribution that we make to the U.S. Holder(generally, the excess of the amount of any distributions to such U.S. Holder during a single taxable year of such U.S. Holder over 125% of theaverage annual distributions received by such U.S. Holder in respect of the shares during the three preceding taxable years of such U.S. Holder or,if shorter, such U.S. Holder holding period for the shares).Under these rules:2.the gain or excess distribution will be allocated ratably over the U.S. Holder’s holding period for the shares;3.the amount allocated to the U.S. Holder’s taxable year in which it realized the gain or excess distribution or to the period in the U.S. Holder’sholding period before the first day of our first taxable year in which we are a PFIC will be taxed as ordinary income;4.the amount allocated to other taxable years (or portions thereof) of the U.S. Holder and included in its holding period will be taxed at the highesttax rate in effect for that year; and5.the interest charge generally applicable to underpayments of tax will be imposed in respect of the tax attributable to each such other taxable yearof the U.S. Holder. 6.Special rules apply for calculating the amount of the foreign tax credit with respect to excess distributions by a PFIC.65Alternatively, if a U.S. Holder, at the close of its taxable year, owns ordinary shares in a PFIC that are treated as marketable stock, the U.S. Holder may makea marktomarket election with respect to such shares for such taxable year. Our shares will be “marketable” to the extent that they remain regularly traded on anational securities exchange, such as the NASDAQ Capital Market. If a U.S. Holder makes this election in a timely fashion, it will not be subject to the PFIC rulesdescribed above. Instead, in general, the U.S. Holder will include as ordinary income each year the excess, if any, of the fair market value of its shares at the end ofthe taxable year over its adjusted basis in its shares. Any ordinary income resulting from this election would generally be taxed at ordinary income tax rates andwould not be eligible for the reduced rate of tax applicable to qualified dividend income. The U.S. Holder will also be allowed to take an ordinary loss in respect ofthe excess, if any, of the adjusted basis of its shares over the fair market value at the end of the taxable year (but only to the extent of the net amount of previouslyincluded income as a result of the marktomarket election). The U.S. Holder’s basis in the shares will be adjusted to reflect any such income or loss amounts. U.S.Holders should consult their own tax advisor regarding potential advantages and disadvantages of making a marktomarket election with respect to their shares.Alternatively, a U.S. Holder of stock in a PFIC may avoid the PFIC tax consequences described above in respect to our or shares by making a timely“qualified electing fund” election to include in income its pro rata share of our net capital gains (as longterm capital gain) and other earnings and profits (asordinary income), on a current basis, in each case whether or not distributed, in the taxable year of the U.S. Holder in which or with which our taxable year ends.However, the qualified electing fund election is available only if the PFIC provides such U.S. Holder with certain information regarding its earnings and profits asrequired under applicable U.S. Treasury regulations. We do not intend to furnish the information that a U.S. Holder would need in order to make a qualified electingfund election. Therefore, U.S. Holders will not be able to make or maintain such election with respect to their or shares.If a U.S. Holder owns our shares or during any year that we are a PFIC, such holder must file U.S. Internal Revenue Service Form 8621 regarding suchholder’s shares or and the gain realized on the disposition of the shares. The reduced tax rate for dividend income, discussed in “Taxation of Distributions,” is notapplicable to dividends paid by a PFIC. U.S. Holders should consult with their own tax advisors regarding reporting requirements with respect to their shares.Tax Consequences to NonU.S. HoldersDividends paid to a NonU.S. Holder in respect of our or shares generally will not be subject to U.S. federal income tax, unless the dividends are effectivelyconnected with the NonU.S. Holder’s conduct of a trade or business within the United States (and, if required by an applicable income tax treaty, are attributable toa permanent establishment or fixed base that such holder maintains in the United States).In addition, a NonU.S. Holder generally will not be subject to U.S. federal income tax on any gain attributable to a sale or other disposition of our or sharesunless such gain is effectively connected with its conduct of a trade or business in the United States (and, if required by an applicable income tax treaty, isattributable to a permanent establishment or fixed base that such holder maintains in the United States) or the NonU.S. Holder is an individual who is present in theUnited States for 183 days or more in the taxable year of sale or other disposition and certain other conditions are met (in which case, such gain from United Statessources generally is subject to tax at a 30% rate or a lower applicable tax treaty rate).Dividends and gains that are effectively connected with the NonU.S. Holder’s conduct of a trade or business in the United States (and, if required by anapplicable income tax treaty, are attributable to a permanent establishment or fixed base in the United States) generally will be subject to tax in the same manner as fora U.S. Holder and, in the case of a NonU.S. Holder that is a corporation for U.S. federal income tax purposes, may also be subject to an additional branch profits taxat a 30% rate or a lower applicable tax treaty rate.66Information Reporting and Backup Withholding In general, information reporting for U.S. federal income tax purposes generally should apply to distributions made on the securities within the UnitedStates to a noncorporate U.S. Holder and to the proceeds from sales and other dispositions of the securities by a noncorporate U.S. Holder to or through a U.S.office of a broker. Payments made (and sales and other dispositions effected at an office) outside the United States generally should be subject to informationreporting in limited circumstances.Dividend payments made to U.S. Holders and proceeds paid from the sale or other disposition the securities may be subject to information reporting to theIRS and possible U.S. federal backup withholding at a current rate of 28%. Certain exempt recipients, such as corporations, are not subject to these informationreporting requirements. Backup withholding will not apply to a U.S. Holder who furnishes a correct taxpayer identification number and makes any other requiredcertification, or who is otherwise exempt from backup withholding. U.S. Holders who are required to establish their exempt status must provide a duly executed IRSForm W9.A NonU.S. Holder generally may eliminate the requirement for information reporting and backup withholding by providing certification of its foreignstatus, under penalties of perjury, on a duly executed applicable IRS Form W8 or by otherwise establishing an exemption.Backup withholding is not an additional tax. Rather, the amount of any backup withholding will be allowed as a credit against a U.S. Holder’s or a nonU.S.Holder’s U.S. federal income tax liability and may entitle such holder to a refund, provided that certain required information is timely furnished to the IRS.PROSPECTIVE PURCHASERS OF OUR SECURITIES SHOULD CONSULT WITH THEIR OWN TAX ADVISORS REGARDING THE APPLICATION OFTHE U.S. FEDERAL INCOME TAX LAWS TO THEIR PARTICULAR SITUATIONS AS WELL AS ANY ADDITIONAL TAX CONSEQUENCES RESULTING FROMPURCHASING, HOLDING OR DISPOSING OF OUR SECURITIES, INCLUDING THE APPLICABILITY AND EFFECT OF THE TAX LAWS OF ANY STATE, LOCALOR NONU.S. JURISDICTION, INCLUDING ESTATE, GIFT, AND INHERITANCE LAWS AND APPLICABLE TAX TREATIES.F. DIVIDENDS AND PAYING AGENTS.Not applicable.G. STATEMENT BY EXPERTS.None.H. DOCUMENTS ON DISPLAY.We previously filed a registration statement on Form F1 (File No. 333166056) with the SEC relating to our initial public offering in May 2010. This transition reportdoes not contain all of the information in the registration statement and the exhibits and financial statements included with the registration statement. References inthis transition report to any of our contracts, agreements or other documents are not necessarily complete, and you should refer to the exhibits attached to theregistration statement for copies of the actual contracts, agreements or documents. In addition, we will file transition reports on Form 20F and submit otherinformation under cover of Form 6K. As a foreign private issuer, we are exempt from the proxy requirements of Section 14 of the Exchange Act and our officers,directors and principal shareholders will be exempt from the insider shortswing disclosure and profit recovery rules of Section 16 of the Exchange Act. You may readand copy the registration statement, the related exhibits and other materials we file with the SEC at the SEC's public reference room in Washington, D.C. at 100 FStreet, Room 1580, N.E., Washington, D.C.20549. You can also request copies of those documents, upon payment of a duplicating fee, by writing to the SEC. Pleasecall the SEC at 1800SEC0330 for further information on the operation of the public reference rooms. The SEC also maintains an Internet site that contains reports,proxy and information statements and other information regarding issuers that file with the SEC. The website address is http://www.sec.gov. You may also request acopy of these filings, at no cost, by writing us at LAB 32, SOHO 3Q, No 9, Guanghua Road, Chaoyang District, Beijing, People’s Republic of China, 100020 ortelephoning us at (86) 1085866721.67I. SUBSIDIARY INFORMATIONFor a listing of our subsidiaries, see “Item 4. Information on the Company – C. Organizational Structure.”ITEM 11. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.Interest Rate RiskAs of December 31, 2017, we had no shortterm or longterm borrowings. If we borrow money in future periods, we may be exposed to interest rate risk. Ourexposure to market risk for changes in interest rates relates primarily to the interest income generated by our cash deposits with our banks and heldtomaturityinvestments. We have not used any derivative financial instruments in our investment portfolio. Interest earnings instruments carry a degree of interest rate risk. Wehave not been exposed, nor do we anticipate being exposed to material risks due to changes in interest rates. However, our future interest income may fall short ofexpectations due to changes in interest rates. Foreign Exchange RiskTranslation adjustments amounted to $90,671 and $387,375 gain as of the fiscal year ended December 31, 2017 and 2016, respectively. The Companytranslated balance sheet amounts with the exception of equity at December 31, 2017 at RMB 6.5342 to $1.00 as compared to RMB 6.9370 to $1.00 at December 31,2016. The Company stated equity accounts at their historical rate. The average translation rates applied to income statement accounts for the fiscal year endedDecember 31, 2017 and 2016 were RMB6.7356 and RMB 6.7153 to US$1.00, respectively. So far, the PRC government has been able to manage a stable exchange ratebetween RMB and the U.S. Dollar. Our future downward translation adjustments may occur and can be significant due to changes in such exchange rate.If we decide to convert our RMB into U.S. dollars for the purpose of making payments for dividends on our ordinary shares or for other business purposes,appreciation of the U.S. dollar against the RMB would have a negative effect on the U.S. dollar amount available to us.The PRC government imposes strict restrictions on PRC resident companies regarding converting RMB into foreign currencies and vice versa under capitalaccount transactions, such as receiving equity investments from outside of the PRC, making equity investments outside of the PRC, borrowing money from orlending money outside of the PRC, and repaying debt or remitting liquidated assets and/or accumulated profits outside of the PRC. These transactions have to beapproved by the relevant PRC government authorities, including but not limited to the commerce bureau, the tax bureau and the State Administration of ForeignExchange, or SAFE, and have to be conducted at banks entrusted by the local SAFE branch. As our business continues to grow, we may need to continuouslyfinance our PRC subsidiaries by raising capital from outside of the PRC. The restriction on converting RMB into foreign currencies, and vice versa, may limit ourability to use capital resources from outside of the PRC. Such restrictions may also limit our ability to remit profits from our PRC subsidiaries outside of the PRC,therefore potentially limiting our ability to pay dividends to our shareholders. In addition, such restrictions will limit our ability to freely transfer temporary excesscash in our or our subsidiaries’ bank accounts in and out of the PRC, therefore limiting our ability to conduct crossborder cash management activities to optimizethe utilization of our cash.InflationAlthough China has experienced an increasing inflation rate, inflation has not had a material impact on our results of operations in recent years. Accordingto the National Bureau of Statistics of China, the change in the consumer price index in China was 0.46%, (0.77%), and 1.16% in 2001, 2002 and 2003, respectively.However, in connection with a 3.9% increase in 2004, the PRC government announced measures to restrict lending and investment in China in order to reduceinflationary pressures in China’s economy. Following the government’s actions, the consumer price index decreased to 1.8% in 2005 and to 1.5% in 2006. In 2007, theconsumer price index increased to 4.8%. In response, China’s central bank, the People’s Bank of China, announced that the bank reserve ratio would rise half apercentage point to 15.5% in an effort to reduce inflation pressures. China’s consumer price index growth rate reached 8.7% year over year in 2008. In 2009 and 2010,the change in the consumer price index in China was minus 0.7% and 3.3%.China consumer price index in November 2017 was 3.8% higher than that of the same period in 2016. China consumer price index in December 2016 was2.4% higher than that of the same period in 2015. China consumer price index in December 2015 was 4.8% higher than that of the same period in 2014. Chinaconsumer price index in December 2014 was 3.3% higher than that of the same period in 2013. The results of the PRC government’s actions to combat inflation aredifficult to predict. Adverse changes in the Chinese economy, if any, will likely impact the financial performance of a variety of industries in China that use, or wouldbe candidates to use, our software products and services.68ITEM 12. DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES.A. DEBT SECURITIES.Not applicable. B. WARRANTS AND RIGHTS.Not applicable.C. OTHER SECURITIES.Not applicable.D. AMERICAN DEPOSITARY SHARES.The Bank of New York Mellon, as depositary (the “Depositary”) for the Company’s ADR facility, notified the owners and holders of the Company’s ADSsthat the ADS facility will terminate effective at 5:00 p.m. (Eastern Time) on September 19, 2018. Under the terms of the Deposit Agreement among the Company, theDepositary and the owners and holders of ADSs of the Company (the “Deposit Agreement”), owners and holders of the Company’s ADSs have until at leastJanuary 21, 2019 to surrender their ADSs to the Depositary for delivery of the underlying ordinary shares of the Company. Subsequent to January 21, 2019, underthe terms of the Deposit Agreement, the Depositary may attempt to sell any ordinary shares remaining on deposit with the Depositary. If the Depositary sells suchunderlying ordinary shares or receives value for such shares, holders must surrender their ADSs to obtain payment of the sale proceeds, net of expenses andapplicable tax and charges. We completed the voluntary delisting of our ADSs from the NASDAQ Capital Market on September 19, 2018.You may hold ADSs either (A) directly (i) by having ADSs registered in your name in the Direct Registration System, or (ii) by having an Americandepositary receipt, also referred to as an ADR, which is a certificate evidencing a specific number of ADSs, registered in your name, or (B) indirectly by holding asecurity entitlement in ADSs through your broker or other financial institution. If you hold ADSs directly, you are a registered ADS holder, also referred to as anADS holder. This description assumes you are an ADS holder. If you hold the ADSs indirectly, you must rely on the procedures of your broker or other financialinstitution to assert the rights of ADS holders described in this section. You should consult with your broker or financial institution to find out what thoseprocedures are.The Direct Registration System, or DRS, is a system administered by The Depository Trust Company, also referred to as DTC, pursuant to which thedepositary may register the ownership of uncertificated ADSs, which ownership will be confirmed by periodic statements sent by the depositary to the registeredholders of uncertificated ADSs.69As an ADS holder, you will not be treated as one of our registered shareholders and you will not have direct shareholder rights. British Virgin Island’s lawgoverns our direct shareholders’ rights. The depositary will be the holder of the shares underlying your ADSs. As a registered holder of ADSs, you will have ADSholder rights. A Deposit Agreement among us, the depositary and you, as an ADS holder, and all other persons indirectly holding ADSs, sets out ADS holder rightsas well as the rights and obligations of the depositary. New York law governs the Deposit Agreement and the ADSs.The following is a summary of the material provisions of the Deposit Agreement. For more complete information, you should read the entire DepositAgreement and the form of ADS, which contains the terms of the ADSs. The Deposit Agreement is filed as an exhibit to our registration statement filed on Form F1.You may obtain the registration statement and the attached Deposit Agreement from the SEC’s website at http://www.sec.gov. You may also obtain a copy of theDeposit Agreement at the SEC’s Public Reference Room, which is located at 100 F Street, NE, Washington, DC 20549. You may obtain information on the operationof the Public Reference Room by calling the SEC at 18007320330. Fees and ExpensesPersons depositing or withdrawing shares or ADS holders must pay:For:$5.00 (or less) per 100 ADSs (or portion of 100 ADSs)Issuance of ADSs, including issuances resulting from a distribution of shares orrights or other propertyCancellation of ADSs for the purpose of withdrawal, including if the DepositAgreement terminates$.05 (or less) per ADSAny cash distribution to ADS holdersA fee equivalent to the fee that would be payable if securities distributed to youhad been shares and the shares had been deposited for issuance of ADSsDistribution of securities distributed to holders of deposited securities whichare distributed by the depositary to ADS holders$.05 (or less) per ADSs per calendar yearDepositary servicesRegistration or transfer feesTransfer and registration of shares on our share register to or from the name ofthe depositary or its agent when you deposit or withdraw sharesExpenses of the depositaryCable, telex and facsimile transmissions (when expressly provided in the DepositAgreement) converting foreign currency to U.S. dollarsTaxes and other governmental charges the depositary or the custodian have topay on any ADS or share underlying an ADS, for example, share transfer taxes,stamp duty or withholding taxesAs necessaryAny charges incurred by the depositary or its agents for servicing the depositedsecuritiesAs necessaryPayment of TaxesHolders of our ADSs are responsible for any taxes or other governmental charges payable on their ADSs or on the deposited securities represented by anyof their ADSs. The depositary may refuse to register any transfer of a holder’s ADSs or allow withdrawal of the deposited securities represented by the ADSs untilsuch taxes or other charges are paid. It may apply payments owed to the holder or sell deposited securities represented by the ADSs to pay any taxes owed and theholder will remain liable for any deficiency. If the depositary sells deposited securities, it will, if appropriate, reduce the number of ADSs to reflect the sale and pay toADS holders any proceeds, or send to ADS holders any property, remaining after it has paid the taxes.70PART IIITEM 13. DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES.None.ITEM 14. MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS.Use of Proceeds.We completed our initial public offering on May 14, 2010 (the “IPO”), which generated net proceeds of approximately $14.6 million. All remaining cash onhand from the proceeds of our IPO was transferred to C Media Limited and its subsidiaries following the completion of the asset exchange transactions on August17, 2018.ITEM 15. CONTROLS AND PROCEDURES.Disclosure Controls and ProceduresOur Chief Executive Officer and Chief Financial Officer have reviewed and evaluated the effectiveness of our disclosure controls and procedures, whichincluded inquiries made to certain other of our employees. The term “disclosure controls and procedures,” as defined in Rules 13a15(e) and 15d15(e) under theExchange Act, means controls and other procedures of a company that are designed to ensure that information required to be disclosed by a company in thereports, such as this report, that it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in theSEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to bedisclosed by a company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the company’s management, including itsprincipal executive and principal financial officers, as appropriate to allow timely decisions regarding required disclosure. Management recognizes that any controlsand procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives and management necessarilyapplies its judgment in evaluating the costbenefit relationship of possible controls and procedures. Based on that evaluation, our Chief Executive Officer and ChiefFinancial Officer have each concluded that, as of December 31, 2017, the Company’s disclosure controls and procedures were not effective due to the materialweakness described in the “Management’s Report on Internal Control over Financial Reporting” section below.Management’s Report on Internal Control Over Financial ReportingOur management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Exchange ActRules 13a15(f) and 15d15(f). Internal control over financial reporting refers to the process designed by, or under the supervision of, our principal executive officerand principal financial officer, and effected by our Board of Directors, management and other personnel, to provide reasonable assurance regarding the reliability offinancial reporting and the preparation of financial statements for external purposes in accordance with U.S. GAAP and includes those policies and procedures that(i) pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of the assets of the Company; (ii)provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with U.S. GAAP, and thatreceipts and expenditures of the Company are being made only in accordance with authorizations of management and directors of the Company; and (iii) providereasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the Company’s assets that could have a materialeffect on the financial statements.71Any system of internal control, no matter how well designed, has inherent limitations. Therefore, even those systems determined to be effective canprovide only reasonable assurance with respect to financial statement preparation and presentation. Because of the inherent limitations of internal control, there is arisk that material misstatements may not be prevented or detected on a timely basis by internal control over financial reporting. However, these inherent limitationsare known features of the financial reporting process. Therefore, it is possible to design into the process safeguards to reduce, though not eliminate, this risk.Management assessed our internal control over financial reporting as of the year ended December 31, 2017. In making this assessment, management usedthe criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in the 2014 report entitled "Internal ControlIntegratedFramework." The COSO framework summarizes each of the components of a company’s internal control system, including (i) the control environment, (ii) riskassessment, (iii) control activities, (iv) information and communication, and (v) monitoring. Based on such assessment, management concluded that its internalcontrol over financial reporting as of December 31, 2017 was not effective because of the following material weakness:Lack of U.S. GAAP expertise. Although our accounting personnel are professional and experienced in accounting requirements and procedures generallyaccepted in the PRC, they do not have sufficient knowledge, experience and training in maintaining our books and records and preparing financial statements inaccordance with U.S. GAAP standards and SEC rules and regulations. The staff needs additional training to become experienced in U.S. GAAPbased reporting,including the skills of U.S. GAAPbased period end closing, consolidation of financial statements, and U.S. GAAP conversion.In order to address the above material weakness, our management plans to take the following steps:We will employ, as needed, outside professionals to provide key accounting personnel ongoing technical trainings to ensure their proper understanding ofU.S. GAAP and newly announced accounting standards.The Company believes the foregoing measures will remediate the identified material weakness in future periods. The Company is committed to monitoringthe effectiveness of these measures and making any changes that are necessary and appropriate.Notwithstanding the conclusion that its internal control over financial reporting was not effective as of the end of the period covered by this report, ourChief Executive Officer and Chief Financial Officer believe that the financial statements and other information contained in this report present fairly, in all materialrespects, its business, financial condition and results of operations. Nothing has come to the attention of management that causes them to believe that any materialinaccuracies or errors exist in the Company’s financial statements as of December 31, 2017.Attestation report of the registered public accounting firm.This transition report does not include an attestation report of the Company’s registered public accounting firm on internal control over financial reportingbecause the Company is a nonaccelerated filer permanently exempted from section 404(b) of the SarbanesOxley Act.Changes in Internal Control over Financial ReportingThere were no changes in the Company’s internal control over financial reporting that occurred during our fiscal year ended December 31, 2017 that hasmaterially affected or is reasonably likely to materially affect our internal control over financial reporting.ITEM 16. [RESERVED]ITEM 16A. AUDIT COMMITTEE FINANCIAL EXPERT.Our board of directors has determined that Mr. Dennis Galgano qualifies as an audit committee financial expert. Our board of directors has determined thatMessrs. Dennis Galgano, Jin Shi, Jiming Ha and Zhihao Xu meet the definition of an “independent director” under the applicable NASDAQ Rules and under Rule10A3 of the Securities Exchange Act of 1934, as amended.72ITEM 16B. CODE OF ETHICS.Our board of directors has adopted a code of business conduct and ethics applicable to our directors, officers and employees. We have posted the code onour website at http://www.luokung.com.ITEM 16C. PRINCIPAL ACCOUNTANT FEES AND SERVICES.Audit FeesThe aggregate fees billed by Moore Stephens CPA Limited for professional services rendered for the audit of our financial information disclosed in thistransition report on Form 20F was $280,000 for the two years ended December 31, 2017 and 2016.The aggregate fees billed by our previous auditor, BDO China Shu Lun Pan Certified Public Accountants LLP for professional services rendered for theaudit of our annual financial information included in our annual reports on Form 20F was $105,500 for each of the fiscal years ended September 30, 2017, 2016 and2015.Tax FeesWe did not engage our principal accountants to provide tax or related services during the last two fiscal years.All Other FeesWe did not engage our principal accountants to render services to us during the last two fiscal years, other than as reported above.ITEM 16D. EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES.Not applicable.ITEM 16E. PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS.Not applicable.ITEM 16F. CHANGE IN REGISTRANT’S CERTIFYING ACCOUNTANT.Not applicable.ITEM 16G. CORPORATE GOVERNANCE.We are incorporated in the BVI and our corporate governance practices are governed by applicable BVI law as well as our memorandum and articles ofassociation. In addition, because our ADSs are listed on NASDAQ, we are subject to NASDAQ’s corporate governance requirements. NASDAQ Listing Rule5620(a) requires each issuer to hold an annual meeting of shareholders no later than one year after the end of the issuer’s fiscal year end. However, NASDAQ ListingRule 5615(a)(3) permits a foreign private issuer like us to follow home country practices in lieu of certain requirements of Listing Rule 5600, provided that suchforeign private issuer discloses in its transition report filed with the SEC each requirement of Rule 5600 that it does not follow and describes the home countrypractice followed in lieu of such requirement. We follow home country practice with respect to annual meetings and did not hold an annual shareholder meeting inthe year ended December 31, 2017. We may, however, hold annual shareholder meetings in the future if there are significant issues that require shareholders’approvals.ITEM 16H. MINE SAFETY DISCLOSURE.Not applicable.73PART IIIITEM 17. FINANCIAL STATEMENTS.We have elected to provide financial statements and related information specified in Item 18.ITEM 18. FINANCIAL STATEMENTS.See “Index to Consolidated Financial Statements” for a list of all financial statements filed as part of this transition report. The Financial Statements arebeginning on page F1.ITEM 19. EXHIBITS.See the Exhibit Index following the signature page of this report, which is incorporated herein by reference.74SIGNATURESThe registrant hereby certifies that it meets all of the requirements for filing on Form 20F and that it has duly caused and authorized the undersigned tosign this transition report on its behalf.LUOKUNG TECHNOLOGY CORP.By:/s/ Xuesong Song Xuesong SongChief Executive Officer(principal executive officer)October 12, 201875EXHIBIT INDEXThe following documents are filed as part of this transition report on Form 20F.ExhibitNumberDescription1.1Amended and Restated Memorandum of Association and Articles of Association of Luokung Technology Corp., dated August 20, 2018, and ascurrently in effect.2.1*Deposit Agreement among the Company, depositary and holders of the American Depositary Receipts.2.2*Form of American Depositary Receipt.2.3*English translation of Entrusted Management Agreement dated December 15, 2009 between Xi’an Softech Co., Ltd., Xi’an Kingtone InformationTechnology Co., Ltd. and the shareholders of Xi’an Kingtone Information Technology Co., Ltd.3.1*English translation of Shareholder’s Voting Proxy Agreement dated December 15, 2009 between Xi’an Softech Co., Ltd., Xi’an Kingtone InformationTechnology Co., Ltd. and the shareholders of Xi’an Kingtone Information Technology Co., Ltd.4.1*English translation of Exclusive Technology Service Agreement dated December 15, 2009 between Xi’an Softech Co., Ltd. and Xi’an KingtoneInformation Technology Co., Ltd.4.2*English translation of Exclusive Option Agreement dated December 15, 2009 between Xi’an Softech Co., Ltd., Xi’an Kingtone InformationTechnology Co., Ltd. and the shareholders of Xi’an Kingtone Information Technology Co., Ltd.4.3*English translation of Equity Pledge Agreement dated December 15, 2009 between Xi’an Softech Co., Ltd., Xi’an Kingtone Information TechnologyCo., Ltd. and the shareholders of Xi’an Kingtone Information Technology Co., Ltd.4.4*English translation of Loan Agreement dated September 14, 2009 between Xi’an Kingtone Information Technology Co., Ltd. and Xian CityCommercial Bank.4.5*English translation of Mortgage Agreement dated September 14, 2009 between Xi’an Kingtone Information Technology Co., Ltd. and Xian CityCommercial Bank.4.6*English translation of Form of Employment Agreement entered into between the Company and the Company’s executive officers.4.7*2010 Omnibus Incentive Plan of the Company.4.8**English translation of Project Construction Contract dated August 10, 2010 between Xi’an Hu County Yuxing Agriculture Science & TechnologyCo., Ltd. and Xi’an Kingtone Information Technology Co., Ltd.4.9***Asset Exchange Agreement by and between C Media Limited and the Company dated as of January 25, 2018.4.10***Securities Purchase Agreement by and among Redstone YYL Management Limited and five shareholders holding majority of the shares of theCompany dated as of January 25, 2018.4.15Exclusive Business Cooperation Agreement by and between Zhongchuan Tianxia Information Technology (Shenzhen) Co., Ltd., and Beijing MobileVision Technology Co., Ltd., dated August 31, 2015.764.16Exclusive Option Agreement by and among Zhongchuan Tianxia Information Technology (Shenzhen) Co., Ltd., Xuesong Song, Weili Chen, PingWang, Donglai Liu, and Beijing Mobile Vision Technology Co., Ltd., dated August 31, 2015.4.17Equity Interest Pledge Agreement by and among Zhongchuan Tianxia Information Technology (Shenzhen) Co., Ltd., Xuesong Song, Weili Chen, PingWang, Donglai Liu, and Beijing Mobile Vision Technology Co., Ltd., dated August 31, 2015.4.18Addendum to Asset Exchange Agreement by and among the Company, Topsky Infotech Holdings Pte Ltd. and C Media Limited, dated October 3,2018. Incorporated by reference to the Company’s Current Report on Form 6K filed on October 4, 2018.4.19Stock Purchase Agreement, dated August 25, 2018, by and among the Company, LK Technology Ltd., and the shareholders listedtherein. Incorporated by reference to the Company’s Current Report on Form 6K filed on August 27, 2018.4.20Power of Attorney by Weili Chen, dated August 31, 2015.4.21Power of Attorney by Ping Wang, dated August 31, 2015.4.22Power of Attorney by Donglai Liu, dated August 31, 2015.4.23Power of Attorney by Xuesong Song, dated August 31, 2015.8.1List of Subsidiaries and Consolidated Variable Interest Entities10.1Employment Agreement, dated August 19, 2018, between Luokung Technology Corp. and Xuesong Song.†10.2Employment Agreement, dated August 19, 2018, by and between Luokung Technology Corp. and Jie Yu.†12.1Certification of Chief Executive Officer required by Rule 13a14(a).12.2Certification of Chief Financial Officer required by Rule 13a14(a).13.1Certification of Chief Executive Officer required by Rule 13a14(a).13.2Certification of Chief Financial Officer required by Rule 13a14(a).101.INSXBRL Instance Document.101.SCHXBRL Taxonomy Extension Schema Document.101.CALXBRL Taxonomy Extension Calculation Linkbase Document.101.DEFXBRL Taxonomy Extension Definition Linkbase Document.101.LABXBRL Taxonomy Extension Label Linkbase Document.101.PREXBRL Taxonomy Extension Presentation Linkbase Document.*Previously filed as an exhibit to the Company’s Registration Statement on Form F1 (Reg. No. 333166056) filed with the Commission and incorporated hereinby reference.**Previously filed as exhibits to the Company’s Transition Report on Form 20F filed with the Commission on January 20, 2011 and incorporated herein byreference.***Previously filed as exhibits to the Company’s Annual Report on Form 20F filed with the Commission on February 9, 2018 and incorporated herein byreference.†Indicates management contract or compensatory plan, contract or arrangement.77LK Technology Ltd. and SubsidiariesCONSOLIDATED FINANCIAL STATEMENTSTABLE OF CONTENTSPage(s)Report of Independent Registered Public Accounting FirmF2Consolidated Financial StatementsConsolidated Balance SheetsF3Consolidated Statements of Operations and Comprehensive LossF4application.Chuang (Vincent) Tao was appointed as a member of the Board effective on August 25, 2018. Dr. Tao was the Chairman of SuperEngine Suzhou from 2014to 2017. Dr. Tao has been the president of the Seasky Angel Investment Alliance of Shanghai since 2015. Dr. Tao received his Bachelor Degree of geographicinformation and telemetry from Wuhan University in China in 1990 and received his Ph.D. from University of Calgary, Canada in 1997.Dennis Galgano was appointed as a director of the Company following the consummation of the asset exchange agreement. He was a registered consultantwith Morgan Joseph Triartisan LLC from November 2016 until October 2017, and previously served as vice chairman and head of international investment bankingfor Morgan Joseph Triartisan LLC, which is a registered broker dealer engaged in the investment banking and financial advisory industry. Mr. Galgano received aB.S. degree in Chemistry from St. John’s University and an M.B.A. from The Wharton School in 1972.Jin Shi was appointed as a director of the Company following the consummation of the asset exchange transactions. Mr. Shi has served as the managingpartner of Chum Capital Group, a merchant bank focused on helping Chinese growth companies to access global capital, since January 2013. Mr. Shi has also servedas a director of Seven Stars Cloud Group, Inc. (NASDAQ: SSC), a premium video on demand service provider, since January 2014, and joined the audit committee ofits board of directors in March 2016. He also served as a director and member of the audit committee of Pingtan Marine Enterprise, Ltd. (NASDAQ: PME), a marineenterprise group primarily engaged in ocean fishing through its subsidiaries. Mr. Shi received an EMBA degree from the Guanghua Management School of BeijingUniversity, and a Bachelor’s degree of science in Chemical Engineering from Tianjin University.Jiming Ha was appointed as a director of the Company following the consummation of the asset exchange agreement, and has also served as a seniorresearch fellow for the China Finance 40 Forum since March 1, 2018, and previously served as a managing director of Goldman Sachs from January 2017 to April2017. Mr. Ha served as a vice chairman and chief investment strategist of the Investment Strategy Group for Private Wealth Management at Goldman Sachs from2010 to January 2017. Mr. Ha holds a PhD in Economics from the University of Kansas and Master’s and Bachelor’s degrees of science from Fudan University.Zhihao Xu was appointed as a director of the Company following the consummation of the asset exchange transactions. Mr. Xu has served as the chiefexecutive officer of Geely Group Co., Ltd., in Hangzhou, China, since December 2017, and previously served as the chairman and chief executive officer of BeijingDingchengrenhe Investment Co., Ltd., a funds management company, from January 2017 to December 2017. Mr. Xu served as the chairman of president of HNAUSOLV CO., LTD., and the chief innovation officer of HNA Logistics Group from January 2014 to December 2016, and prior to that as the chairman of GopayInnovation Technology Co. Ltd., an online payment system operator supporting online money transfers, from April 2012 to January 2014. Mr. Xu graduated from theBusiness School of Renmin University of China and from the Wudaokou Finance College of Tsinghua University with a fund qualification certificate and securitiesqualification certificate.B. COMPENSATION.Compensation of Directors and Executive OfficersFor the ninemonth transition period ended September 30, 2018 and the fiscal year ended December 31, 2017, we did not pay any cash compensation to ourexecutive officers of LK Technology Ltd. and a to our directors for serving on our board of directors of LK Technology Ltd.37Other than nonemployee directors, we do not intend to compensate directors for serving on our board of directors or any of its committees. We do,however, intend to reimburse each member of our board of directors for outofpocket expenses incurred by each director in connection with attending meetings ofthe board of directors and its committees.AdministrationThe Incentive Plan is administered by our board of directors, or at the discretion of the board, by our compensation committee. Our board of directors hasdelegated authority to our compensation committee to administer the Incentive Plan. Subject to the terms of the Incentive Plan, the compensation committee mayselect participants to receive awards, determine the types of awards and terms and conditions of awards, and interpret provisions of the Incentive Plan.The ordinary shares issued or to be issued under the Incentive Plan consist of authorized but unissued shares. If any ordinary shares covered by an awardare not purchased or are forfeited, or if an award otherwise terminates without delivery of any ordinary shares, then the number of ordinary shares counted againstthe aggregate number of ordinary shares available under the plan with respect to the award will, to the extent of any such forfeiture or termination, again be availablefor making awards under the Incentive Plan.EligibilityAwards may be made under the Incentive Plan to our employees, officers, directors, consultants or advisers or to any of our affiliates, and to any otherindividual whose participation in the Incentive Plan is determined to be in our best interests by our board of directors.Amendment or Termination of the PlanOur board of directors may terminate or amend the Incentive Plan at any time and for any reason. No amendment, however, may adversely impair the rightsof grantees with respect to outstanding awards. The Incentive Plan has a term of ten years. Amendments will be submitted for shareholder approval to the extentrequired by applicable stock exchange listing requirements or other applicable laws.OptionsThe Incentive Plan permits the granting of options to purchase ordinary shares intended to qualify as incentive share options under the Internal RevenueCode and share options that do not qualify as incentive share options, or nonqualified share options.The exercise price of each share option may not be less than 100% of the fair market value of our ADSs representing ordinary shares on the date of grant.In the case of certain 10% shareholders who receive incentive share options, the exercise price may not be less than 110% of the fair market value of our ADSsrepresenting ordinary shares on the date of grant. An exception to these requirements is made for options that we grant in substitution for options held byemployees of companies that we acquire. In such a case the exercise price is adjusted to preserve the economic value of the employee’s share option from his or herformer employer.The term of each share option is fixed by the compensation committee and may not exceed ten years from the date of grant. The compensation committeedetermines at what time or times each option may be exercised and the period of time, if any, after retirement, death, disability or termination of employment duringwhich options may be exercised.Options may be made exercisable in installments. The award agreement provides the vesting of the options. Exercisability of options may be accelerated bythe compensation committee.38In general, an optionee may pay the exercise price of an option by (1) cash or check (in U.S. dollars or Renminbi or other local currency as approved by thecompensation committee), (2) ordinary shares held for such period of time as may be required by the compensation committee, (3) delivery of a notice of a marketorder with a broker with respect to ordinary shares then issuable upon exercise of an option, and that the broker has been directed to pay us a sufficient portion ofnet proceeds of the sale in satisfaction of the exercise price, provided that payment of such proceeds is then made to us upon settlement of such sale, (4) otherproperty acceptable to the compensation committee with a fair market value equal to the exercise price, (5) cashless exercise or (6) any combination of the foregoing.Share options granted under the Incentive Plan may not be sold, transferred, pledged, or assigned other than by will or under applicable laws of descentand distribution. However, we may permit limited transfers of nonqualified options for the benefit of immediate family members of grantees to help with estateplanning concerns or pursuant to a domestic relations order in settlement of marital property rights.Other AwardsThe compensation committee may also award under the Incentive Plan:1.ordinary shares subject to restrictions;2.deferred ordinary shares, credited as deferred ordinary share units, but ultimately payable in the form of unrestricted ordinary shares inaccordance with the terms of the grant or with the participant’s deferral election;3.ordinary share units subject to restrictions;4.unrestricted ordinary shares, which are ordinary shares issued at no cost or for a purchase price determined by the compensation committee whichare free from any restrictions under the 2011 Omnibus Incentive Plan;5.dividend equivalent rights entitling the grantee to receive credits for dividends that would be paid if the grantee had held a specified number ofordinary shares; or6.a right to receive a number of ordinary shares or, in the discretion of the compensation committee, an amount in cash or a combination of ordinaryshares and cash, based on the increase in the fair market value of the ADSs representing ordinary shares underlying the right during a statedperiod specified by the compensation committee.Effect of Certain Corporate TransactionsCertain change of control transactions involving us may cause awards granted under the Incentive Plan to vest, unless the awards are continued orsubstituted for by the surviving company in connection with the corporate transaction.Unless otherwise provided in the appropriate option agreement on the date of grant or provided by our board of directors thereafter with the consent of thegrantee, options granted under the Incentive Plan become exercisable in full following (1) a dissolution of our company or a merger, consolidation or reorganizationof our company with one or more other entities in which we are not the surviving entity, (2) a sale of substantially all of our assets to another person or entity, or (3)any transaction (including without limitation a merger or reorganization in which we are the surviving entity) which results in any person or entity owning 50% ormore of the combined voting power of all classes of our shares.39Adjustments for Dividends and Similar EventsThe compensation committee will make appropriate adjustments in outstanding awards and the number of ordinary shares available for issuance under theIncentive Plan, including the individual limitations on awards, to reflect ordinary share dividends, stock splits and other similar events.C. BOARD PRACTICES.Board of DirectorsOur board of directors consists of six members being Messrs. Xuesong Song, Kegang Peng, Dennis Galgano, Jin Shi, Jiming Ha and Zhiaho Xu. Ourdirectors hold office until our annual meeting of shareholders, where their successors will be duly elected and qualified, or until the directors’ death, resignation orremoval, whichever is earlier. Our directors are not subject to a term of office and hold office until their resignation, death or incapacity or until their respectivesuccessors have been elected and qualified in accordance with our fourth amended and restated memorandum of association and articles of association. A directorwill be removed from office if, among other things, the director (1) becomes bankrupt, (2) dies or becomes of unsound mind, or (3) is absent from meetings of ourboard of directors for six consecutive months without leave and our board of directors resolves that the office is vacated. A director is not entitled to any specialbenefits upon termination of service with the company.Director IndependenceOur board of directors consists of six members; Messrs. Dennis Galgano, Jin Shi, Jiming Ha and Zhihao Xu have been determined by us to be independentdirectors within the meaning of the independent director guidelines of the NASDAQ Corporate Governance Rules (the “NASDAQ Rules”).Committees of Our Board of DirectorsTo enhance our corporate governance, we established three committees under our board of directors: an audit committee, a compensation committee, and anominating and corporate governance committee. We have adopted a charter for each of these committees. The committees have the following functions andmembers.Audit CommitteeOur audit committee reports to our board of directors regarding the appointment of our independent public accountants, the scope and results of ourannual audits, compliance with our accounting and financial policies and management’s procedures and policies relating to the adequacy of our internal accountingcontrols. Our audit committee consists of Messrs. Dennis Galgano, Jin Shi, and Jiming Ha. Mr. Galgano, having accounting and financial management expertise,serves as the chairman of the audit committee and is an “audit committee financial expert” as defined by the rules and regulations of the SEC. Our board of directorshas determined that each of these persons meet the definition of an “independent director” under the applicable NASDAQ Rules and under Rule 10A3 of theSecurities Exchange Act of 1934, as amended (the “Exchange Act”).Our audit committee is responsible for, among other things:●the appointment, evaluation, compensation, oversight and termination of the work of our independent auditor (including resolution of disagreementsbetween management and the independent auditor regarding financial reporting);●an annual performance evaluation of the audit committee;●establishing procedures for the receipt, retention and treatment of complaints regarding accounting, internal accounting controls, auditing matters orpotential violations of law, and the confidential, anonymous submission by our employees of concerns regarding questionable accounting or auditingmatters or potential violations of law;40●ensuring that it receives an transition report from our independent auditor describing our internal control procedures and any steps taken to deal withmaterial control deficiencies and attesting to the auditor’s independence and describing all relationships between the auditor and us;●reviewing our annual audited financial statements and quarterly financial statements with management and our independent auditor;●reviewing and approving all proposed related party transactions;●reviewing our policies with respect to risk assessment and risk management;●meeting separately and periodically with management and our independent auditor; and●reporting regularly to our board of directors.Compensation CommitteeOur compensation committee assists the board of directors in reviewing and approving the compensation structure of our directors and executive officers,including all forms of compensation to be provided to our directors and executive officers. In addition, the compensation committee reviews share compensationarrangements for all of our other employees. Members of the compensation committee are not prohibited from direct involvement in determining their owncompensation. Our chief executive officer is not permitted to be present at any committee meeting during which his or her compensation is deliberated. Ourcompensation committee consists of Dennis Galgano and Jin Shi, with Mr. Shi serving as the chairman of the compensation committee. Our board of directors hasdetermined that each of these persons meet the definition of “independent director” under the applicable requirements of the NASDAQ Rules.Our compensation committee is responsible for, among other things:●reviewing and approving corporate goals and objectives relevant to the compensation of our chief executive officer, evaluating the performance of ourchief executive officer in light of those goals and objectives and setting the compensation level of our chief executive officer based on this evaluation;●reviewing and making recommendations to the board with respect to the compensation of our executives, incentive compensation and equitybasedplans that are subject to board approval; and●providing annual performance evaluations of the compensation committee.Nominating and Corporate Governance CommitteeOur nominating and corporate governance committee assists the board of directors in identifying and selecting or recommending individuals qualified tobecome our directors, developing and recommending corporate governance principles and overseeing the evaluation of our board of directors and management. Ournominating and corporate governance committee consists of Jiming Ha and Zhihao Xue, with Mr. Ha serving as the chairman of the nominating and corporategovernance committee. Our board of directors has determined that each of these persons meet the definition of “independent director” under the applicablerequirements of the NASDAQ Rules.Our nominating and corporate governance committee is responsible for, among other things:●selecting and recommending to our board nominees for election or reelection to our board, or for appointment to fill any vacancy;●reviewing annually with our board the current composition of the board of directors with regards to characteristics such as independence, age, skills,experience and availability of service to us;●selecting and recommending to our board the names of directors to serve as members of the audit committee and the compensation committee, as wellas the nominating and corporate governance committee itself; advising our board of directors periodically with regards to significant developments inthe law and practice of corporate governance as well as our compliance with applicable laws and regulations, and making recommendations to ourboard of directors on all matters of corporate governance and on any remedial action to be taken; and●monitoring compliance with our code of business conduct and ethics, including reviewing the adequacy and effectiveness of our procedures to ensureproper compliance.41Code of Business Conduct and EthicsOur board of directors adopted a code of business conduct and ethics applicable to our directors, officers and employees.Duties of DirectorsUnder British Virgin Islands law, our directors have a duty to act honestly, in good faith and with a view to our best interests. Our directors also have a dutyto exercise care, diligence and skills that a reasonably prudent person would exercise in comparable circumstances. In fulfilling their duty of care to us, our directorsmust ensure compliance with our memorandum of association and articles of association. We have the right to seek damages if a duty owed by our directors isbreached.The functions and powers of our board of directors include, among others:●appointing officers and determining the term of office of the officers;●authorizing the payment of donations to religious, charitable, public or other bodies, clubs, funds or associations as deemed advisable;●exercising the borrowing powers of the company and mortgaging the property of the company;●executing cheques, promissory notes and other negotiable instruments on behalf of the company; and●maintaining or registering a register of mortgages, charges or other encumbrances of the company.Remuneration and BorrowingThe directors may receive such remuneration as our board of directors may determine from time to time. Each director is entitled to be repaid or prepaid alltraveling, hotel and incidental expenses reasonably incurred or expected to be incurred in attending meetings of our board of directors or committees of our board ofdirectors or shareholder meetings or otherwise in connection with the discharge of his or her duties as a director. The compensation committee will assist thedirectors in reviewing and approving the compensation structure for the directors.Our board of directors may exercise all the powers of the company to borrow money and to mortgage or charge our undertakings and property or any partthereof, to issue debentures, debenture stock and other securities whenever money is borrowed or as security for any debt, liability or obligation of the company orof any third party.QualificationA director is not required to hold shares as a qualification to office.42Limitation on Liability and Other Indemnification MattersBritish Virgin Islands law does not limit the extent to which a company’s memorandum of association and articles of association may provide forindemnification of officers and directors, except to the extent any such provision may be held by the British Virgin Islands courts to be contrary to public policy,such as to provide indemnification against civil fraud or the consequences of committing a crime.Under our memorandum of association and articles of association, we may indemnify our directors, officers and liquidators against all expenses, includinglegal fees, and against all judgments, fines and amounts paid in settlement and reasonably incurred in connection with civil, criminal, administrative or investigativeproceedings to which they are party or are threatened to be made a party by reason of their acting as our director, officer or liquidator. To be entitled toindemnification, these persons must have acted honestly and in good faith with a view to the best interest of the company and, in the case of criminal proceedings,they must have had no reasonable cause to believe their conduct was unlawful.Compensation Committee Interlocks and Insider ParticipationNone of the members of our compensation committee is an officer or employee of our company. None of our executive officers currently serves, or in thepast year has served, as a member of the board of directors or compensation committee of any entity that has one or more executive officers serving on our board ofdirectors or compensation committee.Employment AgreementsOn August 19, 2018, the Company entered into an Employment Agreement (the “Song Agreement”) with Mr. Xuesong Song, to serve as the ChiefExecutive Officer of the Company for a fouryear term, subject to renewal. Under the terms of the Song Agreement, Mr. Song will receive no salary for his servicesbut will be eligible for an annual cash bonus in the Board’s sole discretion.On August 19, 2018, the Company entered into an Employment Agreement (the “Yu Agreement”) with Mr. Jie Yu, to serve as the Chief Financial Officer ofthe Company for a fouryear term, subject to renewal. Under the terms of the Yu Agreement, Mr. Yu will receive an annual salary of RMB700,000, and will be eligiblefor an annual cash bonus in the Board’s sole discretion.D. EMPLOYEES.As of September 30, 2018 and December 31, 2017, we had a total of 107 and 37 fulltime employees, including 48 and 13 in research and development, 9 and 2in sales and marketing and the rest in a variety of other divisions, respectively. All of our employees are fulltime employees. None of our employees is currentlyrepresented by a union and/or collective bargaining agreements. We believe that we have good relations with our employees and since our inception we have hadno history of work stoppages or union organizing campaigns.E. SHARE OWNERSHIP.The following table provides information as to the beneficial ownership of our ordinary shares as of October 10, 2018, by the persons listed. Beneficialownership of shares is determined under the rules of the SEC and generally includes any shares over which a person exercises sole or shared voting or investmentpower. For purposes of the following table, a person is deemed to have beneficial ownership of any ordinary shares if such person has the right to acquire suchshares within 60 days of October 10, 2018. For purposes of computing the percentage of outstanding shares held by each person, any shares that such person hasthe right to acquire within 60 days after of October 10, 2018 are deemed to be outstanding, but are not deemed to be outstanding for the purpose of computing thepercentage ownership of any other person. Except as otherwise noted, the persons named in the table have sole voting and investment power with respect to all ofthe ordinary shares beneficially owned by them. Unless otherwise indicated, the address of each person listed is c/o Luokung Technologies, LAB 32, SOHO 3Q, No9, Guanghua Road, Chaoyang District, Beijing, People’s Republic of China.43Percentage ownership in the following table is based on 199,317,558 ordinary shares outstanding on October 10, 2018.Number ofsharesPercent ofclassDirectors and named executive officersCharm Dragon International Limited (1)4,030,8822.03%Xuesong Song, Chairman, Chief Executive Officer and Director(2)38,156,43019.30%Kegang Peng, Vice President and Director (3)17,231,9558.71%Dennis Galgano, Director75,796*%Jin Shi, DirectorJiming Ha, DirectorZhihao Xu, Director (4)7,579,1843.83%Dongpu Zhang, President (5)2,321,7921.17%Chuang Tao, Director (6)1,221,996*%Directors and executive officers as a group (10 persons)66,587,15233.69%(1)Charm Dragon International Limited is a British Virgin Islands company controlled by Mr. Xuesong Song.(2)Consists of (i) 4,030,882 shares owned directly by Charm Dragon International Limited, a British Virgin Islands company and (ii) 22,624,793 shares owneddirectly by Bravo First Development Limited, a British Virgin Islands company. Mr. Xuesong Song is the controlling shareholder of Bravo First DevelopmentLimited. Mr. Xuesong Song is the sole director of Charm Dragon International Limited.(3)Consists of 17,231,955 shares owned directly by Plenty Prestige Enterprises Limited, a British Virgin Islands company. Mr. Kegang Peng is the sole director ofPlenty Prestige Enterprises Limited.(4)Consists of 7,579,184 shares directly owned by Geely Group Limited., a Chinese company. Mr. Zhihao Xu is the Chief Executive Officer of Geely GroupLimited.(5)Consists of 2,321,792 shares owned directly by Genoa Peak Limited, a British Virgin Islands company. Mr. Dongpu Zhang controls Genoa Peak Limited.(6)Consists of 1,221,996 shares owned directly by Globalearth Holdings Limited, a British Virgin Islands company. Mr. Chuang Tao controls Globalearth HoldingsLimited.*Represents less than 1% of shares outstandingITEM 7. MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS.A. MAJOR SHAREHOLDERSPlease refer to Item 6.E “Directors, Senior Management and Employees — Share Ownership.”To our knowledge, (A) we are not directly or indirectly owned or controlled by (i) another corporation or (ii) any foreign government and (B) there are noarrangements (including any announced or expected takeover bid), the operation of which may at a subsequent date result in a change in our control.The voting rights of our major shareholders do not differ from the voting rights of other holders of the same class of shares.44B. RELATED PARTY TRANSACTIONS. BUSINESS RELATIONSHIPS.Our subsidiaries, consolidated affiliated entities, and the subsidiaries of the consolidated affiliated entities have engaged, during the ordinary course ofbusiness, in a number of customary transactions with each other. All of these intercompany balances have been eliminated in consolidation.As of December 31, 2017, we had amounts due from related parties, C Media Limited and Ya Tuo Ji International Consultancy (Beijing) Limited, in theamounts of $11.8 million and $0.2 million, respectively. These amounts due from related parties are short term in nature, noninterest bearing, unsecured andrepayable on demand.As of December 31, 2017, we had amounts due to related parties, Mr. Xuesong Song, our chairman and chief executive officer, Thumb Beijing Branch andThumb Shenzhen Branch, in the amounts of $2.9 million, $0.6 million and $0.03 million, respectively. These amounts due to related parties are short term in nature,noninterest bearing, unsecured and payable on demand.We are party to a series of control agreements with Beijing Zhong Chuan Shi Xun. In addition, our chief executive officer, Mr. Xuesong Song, serves as andofficer of Beijing Zhong Chuan Shi Xun and is a shareholder of Beijing Zhong Chuan Shi Xun. The following table sets forth the relationship of Mr. Song withBeijing Zhong Chuan Shi Xun:NameRelationship withLuokung TechnologyRelationship withBeijing Zhong Chuan Shi XunPercentageOwnership Interest inBeijing Zhong Chuan Shi XunXuesong SongChief Executive OfficerChief Executive Officer61.83%C. INTERESTS OF EXPERTS AND COUNSEL.None.ITEM 8. FINANCIAL INFORMATION.A. CONSOLIDATED STATEMENTS AND OTHER FINANCIAL INFORMATION.See “Item 18. Financial Statements.”Legal ProceedingsTo our knowledge, other than as described below there are no material legal proceedings threatened against us. From time to time, we may be subject tovarious claims and legal actions arising in the ordinary course of business. Following the consummation of the AEA, we became successor in interest to the legalproceedings described below.Litigation with Shanghai Fusheng Weier Intelligent Control Technology Co., Ltd.On January 22, 2016, Zhong Chuan Rui You and Shanghai Fusheng Weier Intelligent Control Technology Co., Ltd. (“Fusheng Weier”) signed a contract forequipment of $1,652,842 (RMB10,800,000). Since Zhong Chuan Rui You did not make the payments of $1,126,381 (RMB7,360,000) on the due dates, Fusheng Weierfiled a lawsuit against Zhong Chuan Rui You in Shanghai Xuhui District People's Court on October 8, 2016. On March 9, 2017, Xuhui District People's Court issuedthe verdict requiring Zhong Chuan Rui You to pay the overdue debts. In August 2017, C Media Limited made the payment of $512,075 (RMB3,346,000). Theremaining balance has been accrued in accounts payable. The payment schedule for the remaining balance is being negotiated by the two parties. On February 5,2018, a hearing was held adding Zhong Chuan Shi Xun as a defendant. The Group plans to settle the remaining balance within one year.45Lawsuit with Gansu Jinlun Culture Media Co., Ltd.On August 22, 2014, Zhong Chuan Rui You and Gansu Jinlun Culture Media Co., Ltd. (“Gansu Jinlun”) signed a “Lanzhou Railway Bureau AirconditionedTrain WiFi Network System Advertising Operation Rights Agreement” for advertising on 72 trains of $1,467,880 (RMB9,604,633). Due to the dispute on theproject implementation, Zhong Chuan Rui You did not pay the advertising fee. On August 23, 2017, Gansu Jinlun filed a lawsuit with Gansu Intermediate People'sCourt. On December 19, 2017, Gansu Intermediate People's Court issued a verdict, ruling that Zhong Chuan Rui You settle the overdue advertising fee. Since only 18out of 72 trains have been installed with Wifi network system, Zhong Chuan Rui You disputed and appealed to the verdict. The next court trial date has not yet beendetermined. C Media and Gansu Jinlun are negotiating a potential settlement to resume the contract. According to the legal counsel, it is probable that the settlementwill amount to approximately $459,000 (RMB3,000,000); therefore, this amount has been accrued in accounts payable as at December 31, 2017.Litigation with Shenzhen Hua Xun Fang Zhou Technology Co., Ltd.On June 16, 2015, Zhong Chuan Rui You signed a cooperation agreement with Shenzhen Hua Xun Fang Zhou Technology Co., Ltd. (“Shenzhen Hua Xun”)and Xuesong Song, a major shareholder of C Media Limited. Pursuant to this agreement, Zhong Chuan Rui You procures equipment from Shenzhen Hua Xun.Xuesong Song acts as a joint liability guarantor for the entire debts of Zhong Chuan Rui You under this agreement. As Zhong Chuan Rui You did not make thepayments on the due dates, Shenzhen Hua Xun filed a lawsuit with Shenzhen Baoan District People's Court on May 31, 2016. On November 1, 2016, Zhong ChuanRui You, Xuesong Song and Shenzhen Hua Xun reached a settlement in Shenzhen Baoan District People's Court to settle $1,735,389 (RMB11,355,000) in fourinstalments. On December 30, 2017, the debt was assigned to C Media Limited.Dividend PolicyWe currently intend to retain all of our available funds and future earnings for use in the operation and expansion of our business and do not anticipatepaying cash dividends in the foreseeable future. Under the terms of our Amended and Restated Memorandum and Articles of Association the declaration andpayment of any dividends in the future will be determined by our board of directors, in its discretion, and will depend on a number of factors, including our earnings,capital requirements and overall financial condition and our ability to receive dividends from our subsidiaries. If we pay any dividends, we will pay our ADS holders’dividends with respect to their underlying shares to the same extent as holders of our ordinary shares, subject to the terms of the deposit agreement, including thefees and expenses payable thereunder. Cash dividends on our ordinary shares, if any, will be paid in U.S. dollars.Our ability to receive dividends from our subsidiaries may limit our ability to pay dividends on our ordinary shares. See Risk Factors – Risks Related toDoing Business in China – Our holding company structure may limit the payment of dividends” and “Item 10. Additional Information – D. Exchange Controls –Dividend Distribution”.B. SIGNIFICANT CHANGES.N/AITEM 9. THE OFFER AND LISTINGA. OFFER AND LISTING DETAILS.Markets and Share Price HistoryOur ordinary shares are not currently listed on any trading market. Our American Depository Shares (“ADSs”) were voluntarily delisted from the NASDAQCapital Market on September 19, 2018. We have applied to NASDAQ for the listing of our ordinary shares on the NASDAQ Capital Market and received an approvalfor listing of Ordinary Shares on August 6, 2018, and as of the date of this transition report, that application and approval are currently under review.46The table below sets forth the high and low reported sales prices in dollars of our ordinary shares, which are represented by ADSs, as reported byNASDAQ in the periods as indicated:ADSHighLowAnnual Highs and Lows (as of the fiscal year end 09/30 for the five most recent full financial years)*20175.592.67201610.21.62Quarterly Highs and Lows (for the two most recent full financial years and any subsequent period, based on calendarquarter end)*2018Third Quarter8.006.30Second Quarter8.824.25First Quarter6.403.702017Fourth Quarter5.592.91Third Quarter3.992.67Second Quarter4.063.07First Quarter5.152.832016Fourth Quarter6.594.20Third Quarter10.201.62Second Quarter3.101.97First Quarter3.602.12Monthly Highs and Lows (for the most recent six months)September 20188.006.41August 20187.706.63July 20187.506.30June 20188.827.55May 20187.805.92April 20187.454.25*The Company effected a 1for10 reverse stock split of its ordinary shares on November 6, 2012 (the “Reverse Split”). The ratio between each AmericanDepositary Share (“ADS”) and its underlying ordinary share postReverse Split remains the same, namely, one ADR remains to represent one ordinary sharepost the Reverse Split. The price listed here after November 6, 2012 reflected the effect from the Reverse Split.B. PLAN OF DISTRIBUTION.Not Applicable.C. MARKETS.Our ordinary shares are not currently listed on any trading market. Our ADSs were voluntarily delisted from the NASDAQ Capital Market on September 19,2018. We have applied to NASDAQ for the listing of our ordinary shares on the NASDAQ Capital Market and received an approval for listing of Ordinary Shares onAugust 6, 2018, and as of the date of this transition report, that application and approval are currently under review.47D. SELLING SHAREHOLDERS.Not applicable.E. DILUTION.Not applicable.F. EXPENSES OF THE ISSUE.Not applicable.ITEM 10. ADDITIONAL INFORMATION.A. SHARE CAPITALNot applicable.B. MEMORANDUM AND ARTICLES OF ASSOCIATIONWe are a British Virgin Islands company incorporated with limited liability and our affairs are governed by the provisions of our memorandum of associationand articles of association, as amended and restated from time to time, and by the provisions of applicable British Virgin Islands law.Our memorandum of association and articles of association authorize the issuance of up to 251,000,000 shares, which are designated into (i) 250,000,000 ofordinary shares of the Company (“Ordinary Shares”), and (ii) 1,000,000 preferred shares of the Company (“Preferred Shares”), in each case with the rights,preferences and privileges as set out in the memorandum and articles of association of the Company.Please see below for a description of our ADSs under “Item 12. Description of Securities Other Than Equity Securities – D. American Depository Shares.”The following is a summary of the material provisions of our ordinary shares and our memorandum of association and articles of association.Ordinary SharesAll of our issued and outstanding ordinary shares are fully paid and nonassessable. Holders of our ordinary shares who are nonresidents of the BritishVirgin Islands may freely hold and vote their shares.Subject to the memorandum and articles of association (and, for greater clarity, without prejudice to any special rights conferred thereby on the holders ofany other shares), an Ordinary Share of the Company confers on the holder:(a)the right to one vote per Ordinary Share at a meeting of the members or on any resolution of members;(b)the right to an equal share in any distribution paid by the Company; and(c)the right to an equal share in the distribution of the surplus assets of the Company on a winding up;48Subject to the memorandum and articles of association (and, for greater clarity, without prejudice to any special rights conferred thereby on the holders ofany other shares), a Preferred Share of the Company confers on the holder:(a)the right to 399 votes per Preferred Share at a meeting of the members or on any resolution of members;(b)the right to an equal share in any distribution paid by the Company;(c)the right to an equal share in the distribution of the surplus assets of the Company on a winding up;(d)be freely transferable, in whole or in part, by Mr. Xuesong Song to any third party through one or more Private Transactions, subject toApplicable Law; and(e)be freely transferable, in whole or in part, by Mr. Xuesong Song to any third party through one or more Public Transactions, subject to ApplicableLaw and Automatic Conversion of such Preferred Share(s) into Ordinary Share(s).Each Preferred Share shall be automatically converted at any time after issue and without the payment of any additional sum into an equal number of fullypaid Ordinary Shares upon the conclusion of any transfer by Mr. Xuesong Song to any third party through one or more Public Transactions.Limitation on Liability and Indemnification MattersUnder British Virgin Islands law, each of our directors and officers, in performing his or her functions, is required to act honestly and in good faith with aview to our best interests and exercise the care, diligence and skill that a reasonably prudent person would exercise in comparable circumstances. Our memorandumof association and articles of association provide that, to the fullest extent permitted by British Virgin Islands law or any other applicable laws, our directors will notbe personally liable to us or our shareholders for any acts or omissions in the performance of their duties. Such limitation of liability does not affect the availabilityof equitable remedies such as injunctive relief or rescission. These provisions will not limit the liability of directors under United States federal securities laws.We may indemnify any of our directors or anyone serving at our request as a director of another entity against all expenses, including legal fees, andagainst all judgments, fines and amounts paid in settlement and reasonably incurred in connection with legal, administrative or investigative proceedings. We mayonly indemnify a director if he or she acted honestly and in good faith with the view to our best interests and, in the case of criminal proceedings, the director hadno reasonable cause to believe that his or her conduct was unlawful. The decision of our board of directors as to whether the director acted honestly and in goodfaith with a view to our best interests and as to whether the director had no reasonable cause to believe that his or her conduct was unlawful, is in the absence offraud sufficient for the purposes of indemnification, unless a question of law is involved. The termination of any proceedings by any judgment, order, settlement,conviction or the entry of no plea does not, by itself, create a presumption that a director did not act honestly and in good faith and with a view to our best interestsor that the director had reasonable cause to believe that his or her conduct was unlawful. If a director to be indemnified has been successful in defense of anyproceedings referred to above, the director is entitled to be indemnified against all expenses, including legal fees, and against all judgments, fines and amounts paidin settlement and reasonably incurred by the director or officer in connection with the proceedings.We may purchase and maintain insurance in relation to any of our directors or officers against any liability asserted against the directors or officers andincurred by the directors or officers in that capacity, whether or not we have or would have had the power to indemnify the directors or officers against the liabilityas provided in our memorandum of association and articles of association.Insofar as indemnification for liabilities arising under the Securities Act may be permitted for our directors or officers under the foregoing provisions, wehave been informed that in the opinion of the Securities and Exchange Commission, such indemnification is against public policy as expressed in the Securities Actand is therefore unenforceable as a matter of United States law.49Differences in Corporate LawWe were incorporated under, and are governed by, the laws of the British Virgin Islands. The corporate statutes of the State of Delaware and the BritishVirgin Islands are similar, and the flexibility available under British Virgin Islands law has enabled us to adopt memorandum of association and articles of associationthat will provide shareholders with rights that do not vary in any material respect from those they would enjoy if we were incorporated under the Delaware GeneralCorporation Law, or Delaware corporate law. Set forth below is a summary of some of the differences between provisions of the BVI Act applicable to us and thelaws application to companies incorporated in Delaware and their shareholders.Director’s Fiduciary DutiesUnder Delaware corporate law, a director of a Delaware corporation has a fiduciary duty to the corporation and its stockholders. This duty has twocomponents: the duty of care and the duty of loyalty. The duty of care requires that a director act in good faith, with the care that an ordinarily prudent personwould exercise under similar circumstances. Under this duty, a director must inform himself of, and disclose to stockholders, all material information reasonablyavailable regarding a significant transaction. The duty of loyalty requires that a director act in a manner he reasonably believes to be in the best interests of thecorporation. He must not use his corporate position for personal gain or advantage. This duty prohibits selfdealing by a director and mandates that the bestinterest of the corporation and its stockholders take precedence over any interest possessed by a director, officer or controlling stockholder and not shared by thestockholders generally. In general, actions of a director are presumed to have been made on an informed basis, in good faith and in the honest belief that the actiontaken was in the best interests of the corporation. However, this presumption may be rebutted by evidence of a breach of one of the fiduciary duties. Should suchevidence be presented concerning a transaction by a director, a director must prove the procedural fairness of the transaction, and that the transaction was of fairvalue to the corporation.British Virgin Islands law provides that every director of a British Virgin Islands company in exercising his powers or performing his duties shall acthonestly and in good faith and in what the director believes to be in the best interests of the company. Additionally, the director shall exercise the care, diligence andskill that a reasonable director would exercise in the same circumstances taking into account the nature of the company, the nature of the decision and the positionof the director and his responsibilities. In addition, British Virgin Islands law provides that a director shall exercise his powers as a director for a proper purpose andshall not act, or agree to the company acting, in a manner that contravenes British Virgin Islands law or the memorandum association or articles of association of thecompany.Amendment of Governing DocumentsUnder Delaware corporate law, with very limited exceptions, a vote of the stockholders is required to amend the certificate of incorporation. Under BritishVirgin Islands law and our memorandum of association and articles of association, (i) our shareholders may amend our memorandum of association and articles ofassociation by a resolution of shareholders, or (ii) our board of directors may amend our memorandum of association and articles of association by a resolution ofdirectors without a requirement for a resolution of shareholders so long as the amendment does not:●restrict the rights of the shareholders to amend the memorandum of association and articles of association;●change the percentage of shareholders required to pass a resolution of shareholders to amend the memorandum of association and articles ofassociation;●amend the memorandum of association and articles of association in circumstances where the memorandum of association and articles ofassociation cannot be amended by the shareholders; or●amend the provisions of memorandum of association or the articles of association pertaining to “rights attaching to shares,” “rights not varied bythe issue of the shares pari passu,” “variation of rights” and “amendment of memorandum and articles”.50Written Consent of DirectorsUnder Delaware corporate law, directors may act by written consent only on the basis of a unanimous vote. Under British Virgin Islands law, directors’consents need only a majority of directors signing to take effect.Written Consent of ShareholdersUnder Delaware corporate law, unless otherwise provided in the certificate of incorporation, any action to be taken at any annual or special meeting ofstockholders of a corporation, may be taken by written consent of the holders of outstanding stock having not less than the minimum number of votes that wouldbe necessary to take such action at a meeting. As permitted by British Virgin Islands law, shareholders’ consents need only a majority of shareholders signing totake effect. Our memorandum of association and articles of association provide that shareholders may approve corporate matters by way of a resolution consentedto at a meeting of shareholders or in writing by a majority of shareholders entitled to vote thereon.Shareholder ProposalsUnder Delaware corporate law, a shareholder has the right to put any proposal before the annual meeting of shareholders, provided it complies with thenotice provisions in the governing documents. A special meeting may be called by the board of directors or any other person authorized to do so in the governingdocuments, but shareholders may be precluded from calling special meetings. British Virgin Islands law and our memorandum of association and articles ofassociation provide that our directors shall call a meeting of the shareholders if requested in writing to do so by shareholders entitled to exercise at least 30% of thevoting rights in respect of the matter for which the meeting is requested.Sale of AssetsUnder Delaware corporate law, a vote of the stockholders is required to approve the sale of assets only when all or substantially all assets are being sold. Inthe British Virgin Islands, shareholder approval is required when more than 50% of the company’s total assets by value are being disposed of or sold.Dissolution; Winding UpUnder Delaware corporate law, unless the board of directors approves the proposal to dissolve, dissolution must be approved by shareholders holding100% of the total voting power of the corporation. Only if the dissolution is initiated by the board of directors may it be approved by a simple majority of thecorporation’s outstanding shares. Delaware corporate law allows a Delaware corporation to include in its certificate of incorporation a supermajority votingrequirement in connection with dissolutions initiated by the board. As permitted by British Virgin Islands law and our memorandum of association and articles ofassociation, we may be voluntarily liquidated under Part XII of the BVI Act by resolution of directors and resolution of shareholders if we have no liabilities and weare able to pay our debts as they fall due.Redemption of SharesUnder Delaware corporate law, any stock may be made subject to redemption by the corporation at its option or at the option of the holders of such stockprovided there remains outstanding shares with full voting power. Such stock may be made redeemable for cash, property or rights, as specified in the certificate ofincorporation or in the resolution of the board of directors providing for the issue of such stock. As permitted by British Virgin Islands law, and our memorandum ofassociation and articles of association, shares may be repurchased, redeemed or otherwise acquired by us. Our directors must determine that immediately followingthe redemption or repurchase we will be able to satisfy our debts as they fall due and the value of our assets exceeds our liabilities.51Variation of Rights of SharesUnder Delaware corporate law, a corporation may vary the rights of a class of shares with the approval of a majority of the outstanding shares of suchclass, unless the certificate of incorporation provides otherwise. As permitted by British Virgin Islands law, and our memorandum of association and articles ofassociation, if our share capital is divided into more than one class of shares, we may vary the rights attached to any class only with the consent in writing ofholders of not less than threefourths of the issued shares of that class and holders of not less than threefourths of the issued shares of any other class of shareswhich may be affected by the variation.Removal of DirectorsUnder Delaware corporate law, a director of a corporation with a classified board may be removed only for cause with the approval of a majority of theoutstanding shares entitled to vote, unless the certificate provides otherwise. As permitted by British Virgin Islands law and our memorandum of association andarticles of association, directors may be removed by resolution of directors or resolution of shareholders.MergersUnder the BVI Act, two or more companies may merge or consolidate in accordance with the statutory provisions. A merger means the merging of two ormore constituent companies into one of the constituent companies, and a consolidation means the uniting of two or more constituent companies into a newcompany. In order to merger or consolidate, the directors of each constituent company must approve a written plan of merger or consolidation which must beauthorized by a resolution of shareholders.Shareholders not otherwise entitled to vote on the merger or consolidation may still acquire the right to vote if the plan of merger or consolidation containsany provision which, if proposed as an amendment to the memorandum association or articles of association, would entitle them to vote as a class or series on theproposed amendment. In any event, all shareholders must be given a copy of the plan of merger or consolidation irrespective of whether they are entitled to vote atthe meeting or consent to the written resolution to approve the plan of merger or consolidation.Inspection of Books and RecordsUnder Delaware corporate law, any shareholder of a corporation may for any proper purpose inspect or make copies of the corporation’s stock ledger, list ofshareholders and other books and records. Holders of our shares have no general right under British Virgin Islands law to inspect or obtain copies of our list ofshareholders or our corporate records. However, we will provide holders of our shares with annual audited financial statements. See “Where You Can FindAdditional Information.”Conflict of InterestThe BVI Act provides that a director shall, after becoming aware that he is interested in a transaction entered into or to be entered into by the company,disclose that interest to the board of directors of the company. The failure of a director to disclose that interest does not affect the validity of a transaction enteredinto by the director or the company, so long as the director’s interest was disclosed to the board prior to the company’s entry into the transaction or was notrequired to be disclosed (for example where the transaction is between the company and the director himself or is otherwise in the ordinary course of business andon usual terms and conditions). As permitted by British Virgin Islands law and our memorandum of association and articles of association, a director interested in aparticular transaction may vote on it, attend meetings at which it is considered, and sign documents on our behalf which relate to the transaction.52Transactions with Interested ShareholdersDelaware corporate law contains a business combination statute applicable to Delaware public corporations whereby, unless the corporation hasspecifically elected not to be governed by such statute by amendment to its certificate of incorporation, it is prohibited from engaging in certain businesscombinations with an “interested shareholder” for three years following the date that such person becomes an interested shareholder. An interested shareholdergenerally is a person or group who or that owns or owned 15% or more of the target’s outstanding voting stock within the past three years. This has the effect oflimiting the ability of a potential acquirer to make a twotiered bid for the target in which all shareholders would not be treated equally. The statute does not apply if,among other things, prior to the date on which such shareholder becomes an interested shareholder, the board of directors approves either the businesscombination or the transaction that resulted in the person becoming an interested shareholder. This encourages any potential acquirer of a Delaware publiccorporation to negotiate the terms of any acquisition transaction with the target’s board of directors.British Virgin Islands law has no comparable provision. As a result, we cannot avail ourselves of the types of protections afforded by the Delawarebusiness combination statute. However, although British Virgin Islands law does not regulate transactions between a company and its significant shareholders, itdoes provide that such transactions must be entered into bona fide in the best interests of the company and not with the effect of constituting a fraud on theminority shareholders.Independent DirectorsThere are no provisions under Delaware corporate law or under the BVI Act that require a majority of our directors to be independent.Cumulative VotingUnder Delaware corporate law, cumulative voting for elections of directors is not permitted unless the company’s certificate of incorporation specificallyprovides for it. Cumulative voting potentially facilitates the representation of minority shareholders on a board of directors since it permits the minority shareholderto cast all the votes to which the shareholder is entitled on a single director, which increases the shareholder’s voting power with respect to electing such director.There are no prohibitions to cumulative voting under the laws of the British Virgin Islands, but our memorandum of association and articles of association do notprovide for cumulative votingAntitakeover Provisions in Our Memorandum of association and articles of associationSome provisions of our memorandum of association and articles of association may discourage, delay or prevent a change in control of our company ormanagement that shareholders may consider favorable, including provisions that authorize our board of directors to issue preference shares in one or more seriesand to designate the price, rights, preferences, privileges and restrictions of such preference shares.C. MATERIAL CONTRACTS.On January 25, 2018, the Company executed an Asset Exchange Agreement (“AEA”) with C Media Limited, a corporation organized under the laws of theCayman Islands (“C Media”), whereby the Company agreed to purchase all the capital stock and equity interests of LK Technology Ltd, together with its whollyowned subsidiaries MMB Limited and Mobile Media (China) Limited and all respective subsidiaries from C Media in exchange for (i) 185,412,599 ordinary shares ofthe Company, par value $0.01 per share (“Ordinary Shares”), (ii) 1,000,000 preferred shares of Kingtone (“Preferred Shares”) and (iii) all issued and outstandingcapital stock or equity interests of the Company’s subsidiary, Topsky InfoTech Holdings Pte Ltd., and its whollyowned subsidiary Xi’an Softech Co., Ltd.,including all entities effectively controlled by Xi’an Softech Co., Ltd. through contractual arrangements and variable business entities.To consummate the contemplated transactions described above, the Company obtained shareholder consent at a special meeting held on May 20, 2018, (i)to authorize 1,000,000 Preferred Shares, (ii) to authorize additional Ordinary Shares so that total authorized Ordinary Shares is equal to 250,000,000 shares, (iii) to listsuch Ordinary Shares on NASDAQ, and (iv) to approve the transactions contemplated in the Asset Exchange Agreement. Additionally, NASDAQ needed toapprove the contemplated transactions prior to consummation thereof. C Media had the right to terminate the AEA if the closing had not occurred (other thanthrough the failure of C Media to comply fully with its obligations under the AEA) on or before July 31, 2018. The transactions contemplated by the AEA wereconsummated on August 17, 2018.53On January 25, 2018, five shareholders of the Company including its largest shareholder and its Chief Executive Officer executed a Securities PurchaseAgreement, whereby such shareholders agreed to sell a total of 617,988 Ordinary Shares and 282,694 American Depository Shares of the Company to Redstone YYLManagement Limited, a company incorporated in the British Virgin Islands, in exchange for an aggregate purchase price of $1,897,860.09.On August 25, 2018, LK Technology entered into a Stock Purchase Agreement (the “Agreement”) with the shareholders (“Shareholders”) of SuperengineHoldings Limited, a limited liability company organized under the laws of the British Virgin Islands (the “Superengine”), pursuant to which LK Technology acquiredall of the issued and outstanding capital stock of Superengine for an aggregate purchase price of US$60 million (the “Purchase Price”), which are paid by theissuance of our Ordinary Shares in an amount equal to the quotient of (x) the Purchase Price divided by (y) the average of the closing prices of the Ordinary Shareson the NASDAQ Capital Market over the 12 months period preceding July 31, 2018. We are a party to the Agreement in connection with the issuance of theOrdinary Shares and certain other limited purposes.D. EXCHANGE CONTROLS.This section sets forth a summary of the most significant regulations or requirements that affect our business activities in China or our shareholders’ rightto receive dividends and other distributions from us.Regulations on Internet Content ProvidersThe Administrative Measures on Internet Information Services, or the Internet Content Measures, which was promulgated by the State Council onSeptember 25, 2000 and amended on January 8, 2011, set out guidelines on the provision of internet information services. The Internet Content Measures specifiesthat internet information services regarding news, publications, education, medical and health care, pharmacy and medical appliances, among other things, arerequired to be examined, approved and regulated by the relevant authorities. Internet information providers are prohibited from providing services beyond thoseincluded in the scope of their licenses or filings. Furthermore, the Internet Content Measures specifies a list of prohibited content. Internet information providers areprohibited from producing, copying, publishing or distributing information that is humiliating or defamatory to others or that infringes the legal rights of others.Internet information providers that violate such prohibition may face criminal charges or administrative sanctions. Internet information providers must monitor andcontrol the information posted on their websites. If any prohibited content is found, they must remove the content immediately, keep a record of such content andreport to the relevant authorities.The Internet Content Measures classifies internet information services into commercial internet information services and noncommercial internetinformation services. Commercial internet information services refer to services that provide information or services to internet users with charge. A provider ofcommercial internet information services must obtain an ICP License.Regulations on Internet Audiovideo Program ServicesOn December 20, 2007, the MII and the State Administration of Press, Publication, Radio, Film and Television, or the SAPPRFT, jointly issued theAdministrative Provisions for the Internet AudioVideo Program Service, or the Audiovideo Program Provisions, which came into effect on January 31, 2008 andwas amended on August 28, 2015. The Audiovideo Program Provisions defines “internet audiovideo program services” as producing, editing and integrating ofaudiovideo programs, supplying audiovideo programs to the public via the internet, and providing audiovideo programs uploading and transmission services to athird party. Entities providing internet audiovideo programs services must obtain an internet audiovideo program transmission license. Applicants for such licensesshall be stateowned or statecontrolled entities unless an internet audiovideo program transmission license has been obtained prior to the effectiveness of theAudiovideo Program Provisions in accordance with the thenineffect laws and regulations. In addition, foreigninvested enterprises are not allowed to engage inthe abovementioned services. According to the Audiovideo Program Provisions and other relevant laws and regulations, audiovideo programs provided by theentities supplying Internet audiovideo program services shall not contain any illegal content or other content prohibited by the laws and regulations, such as anycontent against the basic principles in the PRC Constitution, any content that damages the sovereignty of the country or national security, and any content thatdisturbs social order or undermine social stability. An audiovideo program that has already been broadcast shall be retained in full for at least 60 days. Movies,television programs and other media content used as Internet audiovideo programs shall comply with relevant administrative regulations on programs broadcaststhrough radio, movie and television channels. Entities providing services related to Internet audiovideo programs shall immediately delete the audiovideoprograms violating laws and regulations, keep relevant records, report relevant authorities and implement other regulatory requirements.54The Categories of the Internet AudioVideo Program Services, or the Audiovideo Program Categories, promulgated by SAPPRFT on March 10, 2017,classifies internet audio/video programs into four categories: (I) Category I internet audio/video program service, which is carried out with a form of radio station ortelevision station; (II) Category II internet audio/video program service, including (a) rebroadcasting service of current political news audio/video programs; (b)hosting, interviewing, reporting and commenting service of arts, entertainment, technology, finance and economics, sports, education and other specializedaudio/video programs; (c) producing (interviewing not included) and broadcasting service of arts, entertainment, technology, finance and economics, sports,education and other specialized audio/video programs; (d) producing and broadcasting service of internet films/dramas; (e) aggregating and broadcasting service offilms, television dramas and cartoons; (f) aggregating and broadcasting service of arts, entertainment, technology, finance and economics, sports, education andother specialized audio/video programs; and (g) live audio/video broadcasting service of cultural activities of common social organizations, sport events or otherorganization activities; and (III) Category III internet audio/video program service, including (a) aggregating service of online audio/video contents, and (b) rebroadcasting service of the audio/video programs uploaded by internet users; and (IV) Category III internet audio/video program service, including (a) rebroadcasting of the radio/television program channels; and (b) rebroadcasting of internet audio/video program channels.On May 27, 2016, the SAPPRFT issued the Notice on Relevant Issues concerning Implementing the Approval Works of Upgrading Mobile Internet AudioVideo Program Service, or the Mobile AudioVideo Program Notice. The Mobile AudioVideo Program Notice provides that the mobile Internet audiovideo programservices shall be deemed Internet audiovideo program service. Entities which have obtained the approvals to provide the Internet audiovideo program servicesmay use mobile WAP websites or mobile applications to provide audiovideo program services. Entities with regulatory approvals may operate mobile applicationsto provide the audiovideo program services The types of the programs shall be within the permitted scope as provided in the licenses and such mobile applicationsshall be filed with the SAPPRFT.Regulations on Production and Operation of Radio/Television ProgramsOn July 19, 2004, the SAPPRFT promulgated the Administrative Measures on the Production and Operation of Radio and Television Programs, or the Radioand Television Program Production Measures, which came into effect on August 20, 2004 and was amended on August 28, 2015. The Radio and Television ProgramProduction Measures provides that any business that produces or operates radio or television programs must first obtain a Radio and Television ProgramProduction and Operation Permit. Entities holding such permits shall conduct their business within the permitted scope as provided in their permits. In addition,foreigninvested enterprises are not allowed to engage in the abovementioned services.Regulations on Online Advertising ServicesOn April 24, 2015, the Standing Committee of the National People’s Congress enacted the Advertising Law of the People’s Republic of China, or the NewAdvertising Law, effective on September 1, 2015. The New Advertising Law increases the potential legal liability of advertising services providers and strengthensregulations of false advertising. On July 4, 2016, the State Administration for Industry and Commerce, or the SAIC, issued the Interim Measures of theAdministration of Online Advertising, or the SAIC Interim Measures, effective on September 1, 2016. The New Advertising Law and the SAIC Interim Measuresrequire that online advertisements may not affect users’ normal internet use and internet popup ads must display a “close” sign prominently and ensure onekeyclosing of the popup windows. The SAIC Interim Measures provides that all online advertisements must be marked “Advertisement” so that viewers can easilyidentify them as such. Moreover, the SAIC Interim Measures treats paid search results as advertisements that are subject to PRC advertisement laws, and requiresthat paid search results be conspicuously identified on search result pages as advertisements. The New Advertising Law and SAIC Interim Measures require us toconduct more stringent examination and monitoring of our advertisers and the content of their advertisements.55Regulations on Online GamesIn September 2009, the GAPP (currently known as the SAPPRFT), together with the National Copyright Administration, and the National Office ofCombating Pornography and Illegal Publications jointly issued the Notice on Further Strengthening on the Administration of Preexamination and Approval ofOnline Game and the Examination and Approval of Imported Online Game, or the Circular 13. The Circular 13 states that foreign investors are not permitted to investin online game operating businesses in the PRC via wholly foreignowned entities, Sinoforeign equity joint ventures or cooperative joint ventures or to exercisecontrol over or participate in the operation of domestic online game businesses through indirect means, such as other joint venture companies or contractual ortechnical arrangements. If the our contractual arrangements were deemed under the Circular 13 to be an “indirect means” for foreign investors to exercise controlover or participate in the operation of a domestic online game business, our contractual arrangements might be challenged by the SAPPRFT. We are not aware ofany online game companies which use the same or similar contractual arrangements having been challenged by the SAPPRFT as using those contractualarrangements as an “indirect means” for foreign investors to exercise control over or participate in the operation of a domestic online game business or having beenpenalized or ordered to terminate operations since the Circular 13 became effective. However it is unclear whether and how the Circular 13 might be interpreted orimplemented in the future. See “Risk Factors—If the PRC government finds that the agreements that establish the structure for operating certain of our operations inChina do not comply with PRC regulations relating to the relevant industries, or if these regulations or the interpretation of existing regulations change in the future,we could be subject to severe penalties or be forced to relinquish our interests in those operations.”The Interim Measures for the Administration of Online Games, or the Online Game Measures, issued by the MOC, which took effect on August 1, 2010 andamended on December 15, 2017, regulates a broad range of activities related to the online games business, including the development, production and operation ofonline games, the issuance of virtual currencies used for online games, and the provision of virtual currency trading services. The Online Game Measures providesthat any entity that is engaged in online game operations must obtain an Network Cultural Business Permit, and require the content of an imported online game to beexamined and approved by the MOC prior to the game’s launch and require a domestic online game to be filed with the MOC within 30 days after its launch. TheNotice of the Ministry of Culture on the Implementation of the Interim Measures for the Administration of Online Games, which was issued by the MOC on July 29,2010 to implement the Online Game Measures, (i) requires online game operators to protect the interests of online game users and specifies that certain terms thatmust be included in service agreements between online game operators and the users of their online games, (ii) requires content review of imported online gamesand filing procedures for domestic online games, (iii) emphasizes the protection of minors playing online games, and (iv) requests online game operators to promoterealname registration by their game users.Regulations on Information Security, Censorship and PrivacyThe Standing Committee of the National People’s Congress, China’s national legislative body, enacted the Decisions on the Maintenance of InternetSecurity on December 28, 2000 that may subject persons to criminal liabilities in China for any attempt to use the internet to: (i) gain improper entry to a computer orsystem of strategic importance; (ii) disseminate politically disruptive information; (iii) leak state secrets; (iv) spread false commercial information or (v) infringe uponintellectual property rights. In 1997, the Ministry of Public Security issued the Administration Measures on the Security Protection of Computer InformationNetwork with International Connections which prohibits using the internet to leak state secrets or to spread socially destabilizing materials. If an ICP license holderviolates these measures, the PRC government may revoke its ICP license and shut down its websites. Pursuant to the Ninth Amendment to the Criminal Law issuedby the Standing Committee of the National People’s Congress on August 29, 2015, effective on November 1, 2015, any ICP provider that fails to fulfill the obligationsrelated to internet information security as required by applicable laws and refuses to take corrective measures, will be subject to criminal liability for (i) any largescale dissemination of illegal information; (ii) any severe effect due to the leakage of users’ personal information; (iii) any serious loss of evidence of criminalactivities; or (iv) other severe situations, and any individual or entity that (i) sells or provides personal information to others unlawfully or (ii) steals or illegallyobtains any personal information will be subject to criminal liability in severe situations.56The Cybersecurity Law of the PRC, or the Cybersecurity Law, which was promulgated on November 7, 2016 by the Standing Committee of the NationalPeople’s Congress and came into effect on June 1, 2017, provides that network operators shall meet their cyber security obligations and shall take technicalmeasures and other necessary measures to protect the safety and stability of their networks. Under the Cybersecurity Law, network operators are subject to varioussecurity protectionrelated obligations, including: (i) network operators shall comply with certain obligations regarding maintenance of the security of internetsystems; (ii) network operators shall verify users’ identities before signing agreements or providing certain services such as information publishing or realtimecommunication services; (iii) when collecting or using personal information, network operators shall clearly indicate the purposes, methods and scope of theinformation collection, the use of information collection, and obtain the consent of those from whom the information is collected; (iv) network operators shall strictlypreserve the privacy of user information they collect, and establish and maintain systems to protect user privacy; (v) network operators shall strengthenmanagement of information published by users, and when they discover information prohibited by laws and regulations from publication or dissemination, theyshall immediately stop dissemination of that information, including taking measures such as deleting the information, preventing the information from spreading,saving relevant records, and reporting to the relevant governmental agencies.Regulations on Intellectual Property RightsRegulations on CopyrightThe Copyright Law of the PRC, or the Copyright Law, which took effect on June 1, 1991 and was amended in 2001 and in 2010, provides that Chinesecitizens, legal persons, or other organizations shall, whether published or not, own copyright in their copyrightable works, which include, among others, works ofliterature, art, natural science, social science, engineering technology and computer software. Copyright owners enjoy certain legal rights, including right ofpublication, right of authorship and right of reproduction. The Copyright Law as revised in 2010 extends copyright protection to Internet activities, productsdisseminated over the Internet and software products. In addition, Copyright Law provides for a voluntary registration system administered by the China CopyrightProtection Center, or the CPCC. According to the Copyright Law, an infringer of the copyrights shall be subject to various civil liabilities, which include ceasinginfringement activities, apologizing to the copyright owners and compensating the loss of copyright owner. Infringers of copyright may also subject to fines and/oradministrative or criminal liabilities in severe situations.The Computer Software Copyright Registration Measures, or the Software Copyright Measures, promulgated by the State Council on December 20, 2001and amended on January 30, 2013, regulates registrations of software copyright, exclusive licensing contracts for software copyright and assignment agreements.The National Copyright Administration, or the NCA administers software copyright registration and the CPCC, is designated as the software registration authority.The CPCC shall grant registration certificates to the Computer Software Copyrights applicants which meet the requirements of both the Software CopyrightMeasures and the Computer Software Protection Regulations (Revised in 2013).The Provisions of the Supreme People’s Court on Certain Issues Related to the Application of Law in the Trial of Civil Cases Involving Disputes onInfringement of the Information Network Dissemination Rights specifies that disseminating works, performances or audiovideo products by the internet users orthe internet service providers via the internet without the permission of the copyright owners shall be deemed to have infringed the right of dissemination of thecopyright owner.57The Measures for Administrative Protection of Copyright Related to Internet, which was jointly promulgated by the NCA and the MIIT on April 29, 2005and became effective on May 30, 2005, provides that upon receipt of an infringement notice from a legitimate copyright holder, an ICP operator must take remedialactions immediately by removing or disabling access to the infringing content. If an ICP operator knowingly transmits infringing content or fails to take remedialactions after receipt of a notice of infringement that harms public interest, the ICP operator could be subject to administrative penalties, including an order to ceaseinfringing activities, confiscation by the authorities of all income derived from the infringement activities, or payment of fines.On May 18, 2006, the State Council promulgated the Regulations on the Protection of the Right to Network Dissemination of Information (as amended in2013). Under these regulations, an owner of the network dissemination rights with respect to written works or audio or video recordings who believes thatinformation storage, search or link services provided by an Internet service provider infringe his or her rights may require that the Internet service provider delete, ordisconnect the links to, such works or recordings.Patent LawsAccording to the Patent Law of the PRC (Revised in 2008), the State Intellectual Property Office is responsible for administering patent law in the PRC. Thepatent administration departments of provincial, autonomous region or municipal governments are responsible for administering patent law within their respectivejurisdictions. The Chinese patent system adopts a firsttofile principle, which means that when more than one person file different patent applications for the sameinvention, only the person who files the application first is entitled to obtain a patent of the invention. To be patentable, an invention or a utility model must meetthree criteria: novelty, inventiveness and practicability. A patent is valid for twenty years in the case of an invention and ten years in the case of utility models anddesigns.Trademark LawsTrademarks are protected by the Trademark Law of the PRC (Revised in 2013) which was adopted in 1982 and subsequently amended in 1993, 2001 and 2013respectively as well as by the Implementation Regulations of the PRC Trademark Law adopted by the State Council in 2002 and as most recently amended on April29, 2014. The Trademark Office under the SAIC handles trademark registrations. The Trademark Office grants a tenyear term to registered trademarks and the termmay be renewed for another tenyear period upon request by the trademark owner. A trademark registrant may license its registered trademarks to another party byentering into trademark license agreements, which must be filed with the Trademark Office for its record. As with patents, the Trademark Law has adopted a firsttofile principle with respect to trademark registration. If a trademark applied for is identical or similar to another trademark which has already been registered or subjectto a preliminary examination and approval for use on the same or similar kinds of products or services, such trademark application may be rejected. Any personapplying for the registration of a trademark may not injure existing trademark rights first obtained by others, nor may any person register in advance a trademark thathas already been used by another party and has already gained a “sufficient degree of reputation” through such party’s use.Regulations on Domain NamesThe MIIT promulgated the Measures on Administration of Internet Domain Names, or the Domain Name Measures, on August 24, 2017, which took effecton November 1, 2017 and replaced the Administrative Measures on China Internet Domain Name promulgated by MII on November 5, 2004. According to theDomain Name Measures, the MIIT is in charge of the administration of PRC internet domain names. The domain name registration follows a firsttofile principle.Applicants for registration of domain names shall provide the true, accurate and complete information of their identities to domain name registration serviceinstitutions. The applicants will become the holder of such domain names upon the completion of the registration procedure.Relevant Regulations of the Hightech EnterpriseThe Ministry of Information Industry, the Ministry of Science and Technology and the State Tax Bureau collectively promulgated and issued the“Certifying Standard and Managing Measures for Hightech Enterprises” and “the Hightech Areas of Main National Support” on April 14, 2008 to certify the Hightech enterprise and encourage and support the development of the Chinese Hightech enterprises. Under the Hightech Enterprises Measures, the enterprise canenjoy the favorable tax policy when it is certified as a Hightech enterprise by the Ministry of Information Industry, the Ministry of Science and Technology and theState Tax Bureau or with its provincial branch according to the stipulated standard. The software and computer and network technology are recognized as the mainnational supported Hightech field. Kingtone Information is a Hightech enterprise and enjoys a favorable income tax rate of 15%.58Laws and Regulations of Intellectual Property RightsChina has adopted legislation governing intellectual property rights, including patents, copyrights and trademarks. China is a signatory to the maininternational conventions on intellectual property rights and became a member of the Agreement on Trade Related Aspects of Intellectual Property Rights upon itsaccession to the WTO in December 2001.PatentsThe “Patent Law of the People’s Republic of China” promulgated by the Standing Committee of the National People's Congress, adopted in 1985 andrevised in 1992, 2001 and 2008, protects registered patents. The State Intellectual Property Office of PRC handles granting patent rights, providing for a twentyyearpatent term for inventions and a tenyear patent term for utility models and designs. As we disclosed in Item 4, of this transition report on Form 20F, throughKingtone Information, we have been granted one invention patent “wireless video transmission system based on BREW platform” by the State Intellectual PropertyOffice (“SIPO”) of PRC on September 23, 2009 and therefore such invention is entitled to all the protections provided under the Patent Law for twenty years.Computer Software Copyright and AdministrationOn December 20, 2001, the State Council of PRC issued the “Regulation for Computer Software Protection of the People’s Republic of China” (the“Regulation for Computer Software Protection”) which became effective on January 1, 2002 to protect the interests of copyright owners, to promote the research andapplication and to encourage the development of the Chinese software industry. Under the Regulation for Computer Software Protection, natural persons, legalpersons or any other organizations shall have a copyright on the software developed by such persons no matter whether such software has been published. Theprotection period of software copyrights owned by the legal person or other organization is fifty years and expires on December 31 of the fiftieth year from the initialpublication date of such computer software. Currently, Kingtone Information has twelve registration certificates for software copyrights.TrademarksThe “Trademark Law of the People’s Republic of China” promulgated by the State Council of PRC, adopted in 1982 and revised in 1993 and 2001, protectsregistered trademarks. The Trademark Office under the Chinese State Administration for Industry and Commerce handles trademark registrations and grants a termof ten years to registered trademarks which are renewable for another ten years after the application to the Trademark Office by the owners of the trademarks.Trademark license agreements must be filed with the Trademark Office for record. China has a “firsttoregister” system that requires no evidence of prior use orownership. Kingtone Information has its registered trademarks as described in Item 4 of this transition report on Form 20F. Accordingly, such trademarks areentitled to the protection under the Trademark Law.Foreign Currency ExchangeOn August 29, 2008, the SAFE issued the Notice of the General Affairs Department of the State Administration of Foreign Exchange on the RelevantOperating Issues concerning the Improvement of the Administration of Payment and Settlement of Foreign Currency Capital of Foreignfunded Enterprises, orCircular 142. Pursuant to Circular 142, RMB converted from the foreign currencydenominated capital of a foreigninvested company may only be used for purposeswithin the business scope approved by the applicable governmental authority and may not be used for equity investments within the PRC unless specificallyprovided for otherwise. The use of such Renminbi capital may not be changed without SAFE’s approval and may not in any case be used to repay Renminbi loans ifthe proceeds of such loans have not been used.59See “Risk Factors — Risks Related to Doing Business in China — PRC regulation of loans and direct investment by offshore holding companies to PRCentities may delay or prevent us from using the proceeds of our initial public offering to make loans or additional capital contributions to our PRC operatingsubsidiaries, which could materially and adversely affect our liquidity and our ability to fund and expand our business”.Dividend DistributionWe are a British Virgin Islands holding company and substantially all of our operations are conducted through LK Technology. We rely on dividends andother distributions from our LK Technology and its subsidiaries to provide us with our cash flow and allow us to pay dividends on the shares underlying our ADSsand meet our other obligations. The principal regulations governing distribution of dividends paid by wholly foreignowned enterprises include:1.Wholly ForeignOwned Enterprise Law (1986), as amended; and2.Implementation Rules on Wholly ForeignOwned Enterprise Law (1990), as amended.Under these regulations, wholly foreignowned enterprises in China may pay dividends only out of their accumulated profits, if any, determined inaccordance with PRC accounting standards and regulations. In addition, wholly foreignowned enterprises in China are required to set aside at least 10% of theiraftertax profit based on PRC accounting standards each year to its general reserves until the accumulative amount of such reserves reach 50% of its registeredcapital. These reserves are not distributable as cash dividends. The board of directors of a FIE has the discretion to allocate a portion of its aftertax profits to staffwelfare and bonus funds, which may not be distributed to equity owners except in the event of liquidation.Regulation of Foreign Exchange in Certain Onshore and Offshore TransactionsIn October 2005, the SAFE issued the Notice on Issues Relating to the Administration of Foreign Exchange in Fundraising and Return InvestmentActivities of Domestic Residents Conducted via Offshore Special Purpose Companies, or SAFE Notice 75, which became effective as of November 1, 2005, and wasfurther supplemented by two implementation notices issued by the SAFE on November 24, 2005 and May 29, 2007, respectively. Under Circular 75, prior registrationwith the local SAFE branch is required for PRC residents to establish or to control an offshore company for the purposes of financing that offshore company withassets or equity interests in an onshore enterprise located in the PRC. An amendment to the registration or filing with the local SAFE branch by such PRC resident isalso required for the injection of equity interests or assets of an onshore enterprise in the offshore company or overseas funds raised by such offshore company, orany other material change with respect to the offshore company in connection with any increase or decrease of capital, transfer of shares, merger, division, equityinvestment, debt investment, or creation of any security interest over any assets located in the PRC.Under SAFE Notice 75, PRC residents are further required to repatriate into the PRC all of their dividends, profits or capital gains obtained from theirshareholdings in the offshore entity within 180 days of their receipt of such dividends, profits or capital gains. The registration and filing procedures under SAFENotice 75 are prerequisites for other approval and registration procedures necessary for capital inflow from the offshore entity, such as inbound investments orshareholders loans, or capital outflow to the offshore entity, such as the payment of profits or dividends, liquidating distributions, equity sale proceeds, or thereturn of funds upon a capital reduction. Therefore, failure to comply with such registration may subject us to certain restrictions on, including but not limited to, theincrease of the registered capital of our PRC subsidiary, making loans to our PRC subsidiary, and making distributions to us from our onshore companies.Regulations of Overseas Investments and ListingsOn August 8, 2006, six PRC regulatory agencies, including the MOFCOM, the State Assets Supervision and Administration Commission, the StateAdministration for Taxation, the State Administration for Industry and Commerce, the CSRC and the SAFE, jointly adopted the New M&A Rule, which becameeffective on September 8, 2006. This regulation, among other things, includes provisions that purport to require that an offshore SPV formed for purposes ofoverseas listing of equity interests in PRC companies and controlled directly or indirectly by PRC companies or individuals obtain the approval of the CSRC prior tothe listing and trading of such SPV’s securities on an overseas stock exchange.60On September 21, 2006, the CSRC published on its official website procedures regarding its approval of overseas listings by SPVs. The CSRC approvalprocedures require the filing of a number of documents with the CSRC and it would take several months to complete the approval process.The application of the New M&A Rule with respect to overseas listings of SPVs remains unclear with no consensus currently existing among the leadingPRC law firms regarding the scope of the applicability of the CSRC approval requirement.We believe that, based on our understanding of the current PRC laws, regulations and rules and the procedures announced on September 21, 2006, there isno requirement in this regulation that would require an application to be submitted to the MOFCOM or the CSRC for the approval of the listing and trading of ourADSs on the NASDAQ Capital Market.See “Risk Factors — Risks Related to Doing Business in China — If we were required to obtain the prior approval of the China Securities RegulatoryCommission, or CSRC, of the listing and trading of our ADSs on the NASDAQ Capital Market, we may face regulatory actions or other sanctions from the CSRC orother PRC regulatory agencies.”E. TAXATIONThe following discussion sets forth the material British Virgin Islands, PRC and U.S. federal income tax consequences of an investment in our ADSs andthe ordinary shares represented by our ADSs, sometimes referred to collectively as the “securities”. It is based upon laws and relevant interpretations thereof ineffect as of the date of this report, all of which are subject to change. This discussion does not deal with all possible tax consequences relating to an investment inthe securities, such as the tax consequences under state, local and other tax laws. As used in this discussion, “we,” “our” and “us” refers only to LuokungTechnology Ltd.British Virgin Islands TaxationUnder the law of the British Virgin Islands as currently in effect, a holder of the securities who is not a resident of the British Virgin Islands is not liable forBritish Virgin Islands tax on dividends paid with respect to the securities and all holders of the securities are not liable to the British Virgin Islands for tax on gainsrealized during that year on the sale or disposal of such ordinary shares. The British Virgin Islands does not impose a withholding tax on dividends paid by acompany incorporated or reregistered under the BVI Act.There are no capital gains, gift or inheritance taxes levied by the British Virgin Islands on companies incorporated under the BVI Act. In addition, shares ofcompanies incorporated under the BVI Act are not subject to transfer taxes, stamp duties or similar charges.There is no income tax treaty or convention currently in effect between the United States and the British Virgin Islands or between China and the BritishVirgin Islands.61People’s Republic of China TaxationIn 2007, the PRC National People’s Congress enacted the new Enterprise Income Tax Law (the “EIT Law”), which became effective on January 1, 2008. Thenew EIT Law imposes a single uniform income tax rate of 25% on all Chinese enterprises, including foreigninvested enterprises, and levies a withholding tax rate of10% on dividends payable by Chinese subsidiaries to their foreign shareholders unless any such foreign shareholders’ jurisdiction of incorporation has a tax treatywith China that provides for a different withholding agreement. Under the new EIT Law, enterprises established outside China but deemed to have a “de factomanagement body” within the country may be considered “resident enterprises” for Chinese tax purposes and, therefore, may be subject to an enterprise income taxrate of 25% on their worldwide income. Pursuant to the implementation rules of the new EIT Law, a “de facto management body” is defined as a body that hasmaterial and overall management control over the business, personnel, accounts and properties of the enterprise. Although substantially all members of ourmanagement are located in China, it is unclear whether Chinese tax authorities would require (or permit) us to be treated as PRC resident enterprises. If we aredeemed a Chinese tax resident enterprise, we may be subject to an enterprise income tax rate of 25% on our worldwide income, excluding dividends received directlyfrom another Chinese tax resident enterprise, as well as PRC enterprise income tax reporting obligations. If we are not deemed to be a Chinese tax resident enterprise,we may be subject to certain PRC withholding taxes. See “Risk Factors — Risks Related to Doing Business in China — Our holding company structure may limit thepayment of dividends.” As a result of such changes, our historical tax rates may not be indicative of our tax rates for future periods and the value of our ADSs orordinary shares may be adversely affected. If we are deemed a PRC resident enterprise and investors’ gain from the sales of the securities and dividends payable byus are deemed sourced from China, such gains and dividends payable by us may be subject to PRC tax. See “Risk Factors — Risks Related to Doing Business inChina — If we were deemed a “resident enterprise” by PRC tax authorities, we could be subject to tax on our global income at the rate of 25% under the New EITLaw and our nonPRC shareholders could be subject to certain PRC taxes.United States Federal Income TaxationGeneralThe following is a discussion of the material U.S. federal income tax consequences to an investor of purchasing, owning and disposing of our securities.This discussion does not address any aspects of U.S. federal gift or estate tax or the state, local or nonU.S. tax consequences of an investment in the securities.YOU SHOULD CONSULT YOUR OWN TAX ADVISORS CONCERNING THE U.S. FEDERAL, STATE, LOCAL AND NONU.S. TAX CONSEQUENCES OFPURCHASING, OWNING AND DISPOSING OF THE SECURITIES IN YOUR PARTICULAR SITUATION.This discussion applies only to those investors that purchase the securities in this offering and that hold the securities as capital assets within the meaningof section 1221 of the Internal Revenue Code of 1986, as amended (the “Code”). This section does not apply to holders that may be subject to special tax rules,including but not limited to:1.dealers in securities or currencies;2.traders in securities that elect to use a marktomarket method of accounting;3.banks, insurance companies or certain financial institutions;4.taxexempt organizations;5.governments or agencies or instrumentalities thereof;6.partnerships or other entities treated as partnerships or other passthrough entities for U.S. federal income tax purposes or persons holding thesecurities through such entities;7.regulated investment companies or real estate investment trusts;8.holders subject to the alternative minimum tax;9.holders that actually or constructively own 10% or more of the total combined voting power of all classes of our shares entitled to vote;10.holders that acquired the securities pursuant to the exercise of employee stock options, in connection with employee stock incentive plans orotherwise as compensation;11.holders that hold the securities as part of a straddle, hedging or conversion transaction; or12.holders whose functional currency is not the U.S. dollar.62This section is based on the Code, its legislative history, existing and proposed U.S. Treasury regulations, published rulings and other administrativeguidance of the U.S. Internal Revenue Service (the “IRS”) and court decisions, all as in effect on the date hereof. These laws are subject to change or differentinterpretation by the IRS or a court, possibly on a retroactive basis.We have not sought, and will not seek, a ruling from the IRS as to any U.S. federal income tax consequence described herein. The IRS may disagree withthe discussion herein, and its determination may be upheld by a court. Moreover, there can be no assurance that future legislation, regulation, administrative rulingsor court decisions will not adversely affect the accuracy of the statements in this discussion.The discussion below of the U.S. federal income tax consequences to “U.S. Holders” will apply to a beneficial owner of the securities that is for U.S. federalincome tax purposes:1.a citizen or resident of the United States;2.a corporation (or other entity treated as a corporation) that is created or organized (or treated as created or3.organized) under the laws of the United States, any state thereof or the District of Columbia;4.an estate whose income is subject to U.S. federal income tax regardless of its source; or5.a trust if (a) a U.S. court can exercise primary supervision over the trust’s administration and one or more U.S.6.persons are authorized to control all substantial decisions of the trust, or (b) if the trust has a valid election in effect under applicable U.S.Treasury regulations to be treated as a U.S. person.If a beneficial owner of the securities is not described as a U.S. Holder and is not an entity treated as a partnership or other passthrough entity for U.S.federal income tax purposes, such owner will be considered a “NonU.S. Holder.” The material U.S. federal income tax consequences applicable specifically to NonU.S. Holders are described below under the heading “Tax Consequences to NonU.S. Holders.”If a partnership (including for this purpose any entity treated as a partnership for U.S. tax purposes) is a beneficial owner of the securities, the U.S. taxtreatment of a partner in the partnership generally will depend on the status of the partner and the activities of the partnership. A holder of the securities that is apartnership or partners in such a partnership should consult their own tax advisors about the U.S. federal income tax consequences of holding and disposing of thesecurities.This discussion assumes that any distributions made (or deemed made) on the securities and any consideration received by a holder in consideration forthe sale or other disposition of the securities will be in U.S. dollars. This discussion also assumes that the representations contained in the Deposit Agreement aretrue and that the obligations in the Deposit Agreement and any related agreement will be complied with in accordance with their terms. Finally, this discussionassumes that each ADS will only represent ordinary shares in us, and will not represent any other type of security, such as a bond, cash or other property.63For U.S. federal income tax purposes, a holder of an ADS will be treated as the beneficial owner of the shares represented by such ADS and an exchange ofan ADS for ordinary shares will not be subject to U.S. federal income tax. The U.S. Treasury has expressed concerns that parties to whom ADSs are prereleased, orintermediaries in the chain of ownership between holders of ADSs and the issuer of the securities underlying the ADSs may be taking actions that are inconsistentwith the claiming of foreign tax credits by U.S. Holders of ADSs. Such actions would also be inconsistent with the claiming of the reduced rate of tax applicable todividends received by certain noncorporate U.S. Holders, including individual U.S. Holders, as described below under “Tax Consequences to U.S.Holders — Taxation of Distributions.” Accordingly, the availability of foreign tax credits or the reduced tax rate for dividends received by certain noncorporate U.S.Holders, including individual U.S. Holders, could be affected by actions taken by parties to whom the ADSs are released, or by future actions by the U.S. Treasury.Tax Consequences to U.S. HoldersTaxation of DistributionsSubject to the passive foreign investment company, or PFIC, rules discussed below, the gross amount of any cash distributions we make with respect to aU.S. Holder in respect of such U.S. Holder’s ADSs or shares will generally be treated as dividend income if the distributions are made from our current oraccumulated earnings and profits, calculated according to U.S. federal income tax principles. Cash dividends will generally be subject to U.S. federal income tax asordinary income on the day the U.S. Holder actually or constructively receives such income. With respect to noncorporate U.S. Holders for taxable years beginningbefore January 1, 2011, dividends may be taxed at the lower applicable longterm capital gains rate provided that (a) our ADSs or shares are readily tradable on anestablished securities market in the United States, or, in the event we are deemed to be a Chinese “resident enterprise” under the EIT Law (as described above under“People’s Republic of China Taxation”), we are eligible for the benefits of the income tax treaty between the United States and the PRC (the “U.S.PRC Tax Treaty”),(b) we are not a PFIC, as discussed below, for either the taxable year in which the dividend was paid or the preceding taxable year, and (c) certain holding periodrequirements are met. Under published IRS authority, ADSs are considered for purposes of clause (a) above to be readily tradable on an established securitiesmarket in the United States only if they are listed on certain exchanges, which presently include the NASDAQ Capital Market. U.S. Holders should consult their owntax advisors regarding the availability of the lower rate for any dividends paid with respect to our ADSs or shares.Dividends will not be eligible for the dividendsreceived deduction allowed to U.S. corporations in respect of dividends received from other U.S.corporations. Generally, if we distribute noncash property as a dividend (other than pro rata distributions of our shares) out of our current or accumulated earningsand profits (as determined for U.S. federal income tax purposes), a U.S. Holder generally will include in income an amount equal to the fair market value of theproperty, on the date that it is distributed.Distributions in excess of current and accumulated earnings and profits, as determined for U.S. federal income tax purposes, will be treated as a nontaxablereturn of capital to the extent of the U.S. Holder’s basis in its shares or ADSs and thereafter as capital gain. However, we do not plan on calculating our earnings andprofits in accordance with U.S. federal income tax principles. U.S. holders therefore should generally assume that any distributions paid by us will be treated asdividends for U.S. federal income tax purposes.If PRC taxes apply to dividends paid by us to a U.S. Holder (see “People’s Republic of China Taxation,” above), such taxes may be treated as foreign taxeseligible for credit against such holder’s U.S. federal income tax liability (subject to certain limitations), and a U.S. Holder may be entitled to certain benefits under theU.S.PRC Tax Treaty. The rules relating to the U.S. foreign tax credit are complex. U.S. Holders should consult their own tax advisors regarding the creditability ofany such PRC tax and their eligibility for the benefits of the U.S.PRC Tax Treaty.64Taxation of Dispositions of SharesSubject to the PFIC rules discussed below, a U.S. holder that sells or otherwise disposes of its shares will recognize capital gain or loss for U.S. federalincome tax purposes equal to the difference between the amount realized and such U.S. Holder’s tax basis in its shares. Prior to January 1, 2011, capital gains of anoncorporate U.S. holder are generally taxed at a maximum rate of 15% where the property is held for more than one year (and 20% thereafter). The ability to deductcapital losses is subject to limitations.If PRC taxes apply to any gain from the disposition of our shares by a U.S. Holder, such taxes may be treated as foreign taxes eligible for credit against suchholder’s U.S. federal income tax liability (subject to certain limitations), and a U.S. Holder may be entitled to certain benefits under the U.S.PRC Tax Treaty. U.S.Holders should consult their own tax advisors regarding the creditability of any such PRC tax and their eligibility for the benefits of the U.S.PRC Tax Treaty.Passive Foreign Investment CompanyWe do not expect to be a PFIC for U.S. federal income tax purposes for our current tax year or in the foreseeable future. The determination of whether or notwe are a PFIC in respect of any of our taxable years is a factual determination that cannot be made until the close of the applicable tax year and that is based on thetypes of income we earn and the value and composition of our assets (including goodwill), all of which are subject to change. Therefore, we can make no assurancesthat we will not be a PFIC in respect of our current taxable year or in the future.In general, we will be a PFIC in any taxable year if either:1.at least 75% of our gross income for the taxable year is passive income; or2.at least 50% of the value, determined on the basis of a quarterly average, of our assets is attributable to assets that produce or are held for theproduction of passive income.Passive income includes dividends, interest, royalties, rents (other than certain rents and royalties derived in the active conduct of a trade or business), theexcess of gains over losses from certain types of transactions in commodities, annuities and gains from assets that produce passive income. We will be treated asowning our proportionate share of the assets and earning our proportionate share of the income of any corporation in which we own, directly or indirectly, at least25% (by value) of the stock.If we are treated as a PFIC in any year during which a U.S. Holder owns the securities, and such U.S. Holder did not make a marktomarket election, asdescribed below, the U.S. Holder will be subject to special rules with respect to:1.any gain recognized by the U.S. Holder on the sale or other disposition of its shares; and any excess distribution that we make to the U.S. Holder(generally, the excess of the amount of any distributions to such U.S. Holder during a single taxable year of such U.S. Holder over 125% of theaverage annual distributions received by such U.S. Holder in respect of the shares during the three preceding taxable years of such U.S. Holder or,if shorter, such U.S. Holder holding period for the shares).Under these rules:2.the gain or excess distribution will be allocated ratably over the U.S. Holder’s holding period for the shares;3.the amount allocated to the U.S. Holder’s taxable year in which it realized the gain or excess distribution or to the period in the U.S. Holder’sholding period before the first day of our first taxable year in which we are a PFIC will be taxed as ordinary income;4.the amount allocated to other taxable years (or portions thereof) of the U.S. Holder and included in its holding period will be taxed at the highesttax rate in effect for that year; and5.the interest charge generally applicable to underpayments of tax will be imposed in respect of the tax attributable to each such other taxable yearof the U.S. Holder. 6.Special rules apply for calculating the amount of the foreign tax credit with respect to excess distributions by a PFIC.65Alternatively, if a U.S. Holder, at the close of its taxable year, owns ordinary shares in a PFIC that are treated as marketable stock, the U.S. Holder may makea marktomarket election with respect to such shares for such taxable year. Our shares will be “marketable” to the extent that they remain regularly traded on anational securities exchange, such as the NASDAQ Capital Market. If a U.S. Holder makes this election in a timely fashion, it will not be subject to the PFIC rulesdescribed above. Instead, in general, the U.S. Holder will include as ordinary income each year the excess, if any, of the fair market value of its shares at the end ofthe taxable year over its adjusted basis in its shares. Any ordinary income resulting from this election would generally be taxed at ordinary income tax rates andwould not be eligible for the reduced rate of tax applicable to qualified dividend income. The U.S. Holder will also be allowed to take an ordinary loss in respect ofthe excess, if any, of the adjusted basis of its shares over the fair market value at the end of the taxable year (but only to the extent of the net amount of previouslyincluded income as a result of the marktomarket election). The U.S. Holder’s basis in the shares will be adjusted to reflect any such income or loss amounts. U.S.Holders should consult their own tax advisor regarding potential advantages and disadvantages of making a marktomarket election with respect to their shares.Alternatively, a U.S. Holder of stock in a PFIC may avoid the PFIC tax consequences described above in respect to our or shares by making a timely“qualified electing fund” election to include in income its pro rata share of our net capital gains (as longterm capital gain) and other earnings and profits (asordinary income), on a current basis, in each case whether or not distributed, in the taxable year of the U.S. Holder in which or with which our taxable year ends.However, the qualified electing fund election is available only if the PFIC provides such U.S. Holder with certain information regarding its earnings and profits asrequired under applicable U.S. Treasury regulations. We do not intend to furnish the information that a U.S. Holder would need in order to make a qualified electingfund election. Therefore, U.S. Holders will not be able to make or maintain such election with respect to their or shares.If a U.S. Holder owns our shares or during any year that we are a PFIC, such holder must file U.S. Internal Revenue Service Form 8621 regarding suchholder’s shares or and the gain realized on the disposition of the shares. The reduced tax rate for dividend income, discussed in “Taxation of Distributions,” is notapplicable to dividends paid by a PFIC. U.S. Holders should consult with their own tax advisors regarding reporting requirements with respect to their shares.Tax Consequences to NonU.S. HoldersDividends paid to a NonU.S. Holder in respect of our or shares generally will not be subject to U.S. federal income tax, unless the dividends are effectivelyconnected with the NonU.S. Holder’s conduct of a trade or business within the United States (and, if required by an applicable income tax treaty, are attributable toa permanent establishment or fixed base that such holder maintains in the United States).In addition, a NonU.S. Holder generally will not be subject to U.S. federal income tax on any gain attributable to a sale or other disposition of our or sharesunless such gain is effectively connected with its conduct of a trade or business in the United States (and, if required by an applicable income tax treaty, isattributable to a permanent establishment or fixed base that such holder maintains in the United States) or the NonU.S. Holder is an individual who is present in theUnited States for 183 days or more in the taxable year of sale or other disposition and certain other conditions are met (in which case, such gain from United Statessources generally is subject to tax at a 30% rate or a lower applicable tax treaty rate).Dividends and gains that are effectively connected with the NonU.S. Holder’s conduct of a trade or business in the United States (and, if required by anapplicable income tax treaty, are attributable to a permanent establishment or fixed base in the United States) generally will be subject to tax in the same manner as fora U.S. Holder and, in the case of a NonU.S. Holder that is a corporation for U.S. federal income tax purposes, may also be subject to an additional branch profits taxat a 30% rate or a lower applicable tax treaty rate.66Information Reporting and Backup Withholding In general, information reporting for U.S. federal income tax purposes generally should apply to distributions made on the securities within the UnitedStates to a noncorporate U.S. Holder and to the proceeds from sales and other dispositions of the securities by a noncorporate U.S. Holder to or through a U.S.office of a broker. Payments made (and sales and other dispositions effected at an office) outside the United States generally should be subject to informationreporting in limited circumstances.Dividend payments made to U.S. Holders and proceeds paid from the sale or other disposition the securities may be subject to information reporting to theIRS and possible U.S. federal backup withholding at a current rate of 28%. Certain exempt recipients, such as corporations, are not subject to these informationreporting requirements. Backup withholding will not apply to a U.S. Holder who furnishes a correct taxpayer identification number and makes any other requiredcertification, or who is otherwise exempt from backup withholding. U.S. Holders who are required to establish their exempt status must provide a duly executed IRSForm W9.A NonU.S. Holder generally may eliminate the requirement for information reporting and backup withholding by providing certification of its foreignstatus, under penalties of perjury, on a duly executed applicable IRS Form W8 or by otherwise establishing an exemption.Backup withholding is not an additional tax. Rather, the amount of any backup withholding will be allowed as a credit against a U.S. Holder’s or a nonU.S.Holder’s U.S. federal income tax liability and may entitle such holder to a refund, provided that certain required information is timely furnished to the IRS.PROSPECTIVE PURCHASERS OF OUR SECURITIES SHOULD CONSULT WITH THEIR OWN TAX ADVISORS REGARDING THE APPLICATION OFTHE U.S. FEDERAL INCOME TAX LAWS TO THEIR PARTICULAR SITUATIONS AS WELL AS ANY ADDITIONAL TAX CONSEQUENCES RESULTING FROMPURCHASING, HOLDING OR DISPOSING OF OUR SECURITIES, INCLUDING THE APPLICABILITY AND EFFECT OF THE TAX LAWS OF ANY STATE, LOCALOR NONU.S. JURISDICTION, INCLUDING ESTATE, GIFT, AND INHERITANCE LAWS AND APPLICABLE TAX TREATIES.F. DIVIDENDS AND PAYING AGENTS.Not applicable.G. STATEMENT BY EXPERTS.None.H. DOCUMENTS ON DISPLAY.We previously filed a registration statement on Form F1 (File No. 333166056) with the SEC relating to our initial public offering in May 2010. This transition reportdoes not contain all of the information in the registration statement and the exhibits and financial statements included with the registration statement. References inthis transition report to any of our contracts, agreements or other documents are not necessarily complete, and you should refer to the exhibits attached to theregistration statement for copies of the actual contracts, agreements or documents. In addition, we will file transition reports on Form 20F and submit otherinformation under cover of Form 6K. As a foreign private issuer, we are exempt from the proxy requirements of Section 14 of the Exchange Act and our officers,directors and principal shareholders will be exempt from the insider shortswing disclosure and profit recovery rules of Section 16 of the Exchange Act. You may readand copy the registration statement, the related exhibits and other materials we file with the SEC at the SEC's public reference room in Washington, D.C. at 100 FStreet, Room 1580, N.E., Washington, D.C.20549. You can also request copies of those documents, upon payment of a duplicating fee, by writing to the SEC. Pleasecall the SEC at 1800SEC0330 for further information on the operation of the public reference rooms. The SEC also maintains an Internet site that contains reports,proxy and information statements and other information regarding issuers that file with the SEC. The website address is http://www.sec.gov. You may also request acopy of these filings, at no cost, by writing us at LAB 32, SOHO 3Q, No 9, Guanghua Road, Chaoyang District, Beijing, People’s Republic of China, 100020 ortelephoning us at (86) 1085866721.67I. SUBSIDIARY INFORMATIONFor a listing of our subsidiaries, see “Item 4. Information on the Company – C. Organizational Structure.”ITEM 11. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.Interest Rate RiskAs of December 31, 2017, we had no shortterm or longterm borrowings. If we borrow money in future periods, we may be exposed to interest rate risk. Ourexposure to market risk for changes in interest rates relates primarily to the interest income generated by our cash deposits with our banks and heldtomaturityinvestments. We have not used any derivative financial instruments in our investment portfolio. Interest earnings instruments carry a degree of interest rate risk. Wehave not been exposed, nor do we anticipate being exposed to material risks due to changes in interest rates. However, our future interest income may fall short ofexpectations due to changes in interest rates. Foreign Exchange RiskTranslation adjustments amounted to $90,671 and $387,375 gain as of the fiscal year ended December 31, 2017 and 2016, respectively. The Companytranslated balance sheet amounts with the exception of equity at December 31, 2017 at RMB 6.5342 to $1.00 as compared to RMB 6.9370 to $1.00 at December 31,2016. The Company stated equity accounts at their historical rate. The average translation rates applied to income statement accounts for the fiscal year endedDecember 31, 2017 and 2016 were RMB6.7356 and RMB 6.7153 to US$1.00, respectively. So far, the PRC government has been able to manage a stable exchange ratebetween RMB and the U.S. Dollar. Our future downward translation adjustments may occur and can be significant due to changes in such exchange rate.If we decide to convert our RMB into U.S. dollars for the purpose of making payments for dividends on our ordinary shares or for other business purposes,appreciation of the U.S. dollar against the RMB would have a negative effect on the U.S. dollar amount available to us.The PRC government imposes strict restrictions on PRC resident companies regarding converting RMB into foreign currencies and vice versa under capitalaccount transactions, such as receiving equity investments from outside of the PRC, making equity investments outside of the PRC, borrowing money from orlending money outside of the PRC, and repaying debt or remitting liquidated assets and/or accumulated profits outside of the PRC. These transactions have to beapproved by the relevant PRC government authorities, including but not limited to the commerce bureau, the tax bureau and the State Administration of ForeignExchange, or SAFE, and have to be conducted at banks entrusted by the local SAFE branch. As our business continues to grow, we may need to continuouslyfinance our PRC subsidiaries by raising capital from outside of the PRC. The restriction on converting RMB into foreign currencies, and vice versa, may limit ourability to use capital resources from outside of the PRC. Such restrictions may also limit our ability to remit profits from our PRC subsidiaries outside of the PRC,therefore potentially limiting our ability to pay dividends to our shareholders. In addition, such restrictions will limit our ability to freely transfer temporary excesscash in our or our subsidiaries’ bank accounts in and out of the PRC, therefore limiting our ability to conduct crossborder cash management activities to optimizethe utilization of our cash.InflationAlthough China has experienced an increasing inflation rate, inflation has not had a material impact on our results of operations in recent years. Accordingto the National Bureau of Statistics of China, the change in the consumer price index in China was 0.46%, (0.77%), and 1.16% in 2001, 2002 and 2003, respectively.However, in connection with a 3.9% increase in 2004, the PRC government announced measures to restrict lending and investment in China in order to reduceinflationary pressures in China’s economy. Following the government’s actions, the consumer price index decreased to 1.8% in 2005 and to 1.5% in 2006. In 2007, theconsumer price index increased to 4.8%. In response, China’s central bank, the People’s Bank of China, announced that the bank reserve ratio would rise half apercentage point to 15.5% in an effort to reduce inflation pressures. China’s consumer price index growth rate reached 8.7% year over year in 2008. In 2009 and 2010,the change in the consumer price index in China was minus 0.7% and 3.3%.China consumer price index in November 2017 was 3.8% higher than that of the same period in 2016. China consumer price index in December 2016 was2.4% higher than that of the same period in 2015. China consumer price index in December 2015 was 4.8% higher than that of the same period in 2014. Chinaconsumer price index in December 2014 was 3.3% higher than that of the same period in 2013. The results of the PRC government’s actions to combat inflation aredifficult to predict. Adverse changes in the Chinese economy, if any, will likely impact the financial performance of a variety of industries in China that use, or wouldbe candidates to use, our software products and services.68ITEM 12. DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES.A. DEBT SECURITIES.Not applicable. B. WARRANTS AND RIGHTS.Not applicable.C. OTHER SECURITIES.Not applicable.D. AMERICAN DEPOSITARY SHARES.The Bank of New York Mellon, as depositary (the “Depositary”) for the Company’s ADR facility, notified the owners and holders of the Company’s ADSsthat the ADS facility will terminate effective at 5:00 p.m. (Eastern Time) on September 19, 2018. Under the terms of the Deposit Agreement among the Company, theDepositary and the owners and holders of ADSs of the Company (the “Deposit Agreement”), owners and holders of the Company’s ADSs have until at leastJanuary 21, 2019 to surrender their ADSs to the Depositary for delivery of the underlying ordinary shares of the Company. Subsequent to January 21, 2019, underthe terms of the Deposit Agreement, the Depositary may attempt to sell any ordinary shares remaining on deposit with the Depositary. If the Depositary sells suchunderlying ordinary shares or receives value for such shares, holders must surrender their ADSs to obtain payment of the sale proceeds, net of expenses andapplicable tax and charges. We completed the voluntary delisting of our ADSs from the NASDAQ Capital Market on September 19, 2018.You may hold ADSs either (A) directly (i) by having ADSs registered in your name in the Direct Registration System, or (ii) by having an Americandepositary receipt, also referred to as an ADR, which is a certificate evidencing a specific number of ADSs, registered in your name, or (B) indirectly by holding asecurity entitlement in ADSs through your broker or other financial institution. If you hold ADSs directly, you are a registered ADS holder, also referred to as anADS holder. This description assumes you are an ADS holder. If you hold the ADSs indirectly, you must rely on the procedures of your broker or other financialinstitution to assert the rights of ADS holders described in this section. You should consult with your broker or financial institution to find out what thoseprocedures are.The Direct Registration System, or DRS, is a system administered by The Depository Trust Company, also referred to as DTC, pursuant to which thedepositary may register the ownership of uncertificated ADSs, which ownership will be confirmed by periodic statements sent by the depositary to the registeredholders of uncertificated ADSs.69As an ADS holder, you will not be treated as one of our registered shareholders and you will not have direct shareholder rights. British Virgin Island’s lawgoverns our direct shareholders’ rights. The depositary will be the holder of the shares underlying your ADSs. As a registered holder of ADSs, you will have ADSholder rights. A Deposit Agreement among us, the depositary and you, as an ADS holder, and all other persons indirectly holding ADSs, sets out ADS holder rightsas well as the rights and obligations of the depositary. New York law governs the Deposit Agreement and the ADSs.The following is a summary of the material provisions of the Deposit Agreement. For more complete information, you should read the entire DepositAgreement and the form of ADS, which contains the terms of the ADSs. The Deposit Agreement is filed as an exhibit to our registration statement filed on Form F1.You may obtain the registration statement and the attached Deposit Agreement from the SEC’s website at http://www.sec.gov. You may also obtain a copy of theDeposit Agreement at the SEC’s Public Reference Room, which is located at 100 F Street, NE, Washington, DC 20549. You may obtain information on the operationof the Public Reference Room by calling the SEC at 18007320330. Fees and ExpensesPersons depositing or withdrawing shares or ADS holders must pay:For:$5.00 (or less) per 100 ADSs (or portion of 100 ADSs)Issuance of ADSs, including issuances resulting from a distribution of shares orrights or other propertyCancellation of ADSs for the purpose of withdrawal, including if the DepositAgreement terminates$.05 (or less) per ADSAny cash distribution to ADS holdersA fee equivalent to the fee that would be payable if securities distributed to youhad been shares and the shares had been deposited for issuance of ADSsDistribution of securities distributed to holders of deposited securities whichare distributed by the depositary to ADS holders$.05 (or less) per ADSs per calendar yearDepositary servicesRegistration or transfer feesTransfer and registration of shares on our share register to or from the name ofthe depositary or its agent when you deposit or withdraw sharesExpenses of the depositaryCable, telex and facsimile transmissions (when expressly provided in the DepositAgreement) converting foreign currency to U.S. dollarsTaxes and other governmental charges the depositary or the custodian have topay on any ADS or share underlying an ADS, for example, share transfer taxes,stamp duty or withholding taxesAs necessaryAny charges incurred by the depositary or its agents for servicing the depositedsecuritiesAs necessaryPayment of TaxesHolders of our ADSs are responsible for any taxes or other governmental charges payable on their ADSs or on the deposited securities represented by anyof their ADSs. The depositary may refuse to register any transfer of a holder’s ADSs or allow withdrawal of the deposited securities represented by the ADSs untilsuch taxes or other charges are paid. It may apply payments owed to the holder or sell deposited securities represented by the ADSs to pay any taxes owed and theholder will remain liable for any deficiency. If the depositary sells deposited securities, it will, if appropriate, reduce the number of ADSs to reflect the sale and pay toADS holders any proceeds, or send to ADS holders any property, remaining after it has paid the taxes.70PART IIITEM 13. DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES.None.ITEM 14. MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS.Use of Proceeds.We completed our initial public offering on May 14, 2010 (the “IPO”), which generated net proceeds of approximately $14.6 million. All remaining cash onhand from the proceeds of our IPO was transferred to C Media Limited and its subsidiaries following the completion of the asset exchange transactions on August17, 2018.ITEM 15. CONTROLS AND PROCEDURES.Disclosure Controls and ProceduresOur Chief Executive Officer and Chief Financial Officer have reviewed and evaluated the effectiveness of our disclosure controls and procedures, whichincluded inquiries made to certain other of our employees. The term “disclosure controls and procedures,” as defined in Rules 13a15(e) and 15d15(e) under theExchange Act, means controls and other procedures of a company that are designed to ensure that information required to be disclosed by a company in thereports, such as this report, that it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in theSEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to bedisclosed by a company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the company’s management, including itsprincipal executive and principal financial officers, as appropriate to allow timely decisions regarding required disclosure. Management recognizes that any controlsand procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives and management necessarilyapplies its judgment in evaluating the costbenefit relationship of possible controls and procedures. Based on that evaluation, our Chief Executive Officer and ChiefFinancial Officer have each concluded that, as of December 31, 2017, the Company’s disclosure controls and procedures were not effective due to the materialweakness described in the “Management’s Report on Internal Control over Financial Reporting” section below.Management’s Report on Internal Control Over Financial ReportingOur management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Exchange ActRules 13a15(f) and 15d15(f). Internal control over financial reporting refers to the process designed by, or under the supervision of, our principal executive officerand principal financial officer, and effected by our Board of Directors, management and other personnel, to provide reasonable assurance regarding the reliability offinancial reporting and the preparation of financial statements for external purposes in accordance with U.S. GAAP and includes those policies and procedures that(i) pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of the assets of the Company; (ii)provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with U.S. GAAP, and thatreceipts and expenditures of the Company are being made only in accordance with authorizations of management and directors of the Company; and (iii) providereasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the Company’s assets that could have a materialeffect on the financial statements.71Any system of internal control, no matter how well designed, has inherent limitations. Therefore, even those systems determined to be effective canprovide only reasonable assurance with respect to financial statement preparation and presentation. Because of the inherent limitations of internal control, there is arisk that material misstatements may not be prevented or detected on a timely basis by internal control over financial reporting. However, these inherent limitationsare known features of the financial reporting process. Therefore, it is possible to design into the process safeguards to reduce, though not eliminate, this risk.Management assessed our internal control over financial reporting as of the year ended December 31, 2017. In making this assessment, management usedthe criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in the 2014 report entitled "Internal ControlIntegratedFramework." The COSO framework summarizes each of the components of a company’s internal control system, including (i) the control environment, (ii) riskassessment, (iii) control activities, (iv) information and communication, and (v) monitoring. Based on such assessment, management concluded that its internalcontrol over financial reporting as of December 31, 2017 was not effective because of the following material weakness:Lack of U.S. GAAP expertise. Although our accounting personnel are professional and experienced in accounting requirements and procedures generallyaccepted in the PRC, they do not have sufficient knowledge, experience and training in maintaining our books and records and preparing financial statements inaccordance with U.S. GAAP standards and SEC rules and regulations. The staff needs additional training to become experienced in U.S. GAAPbased reporting,including the skills of U.S. GAAPbased period end closing, consolidation of financial statements, and U.S. GAAP conversion.In order to address the above material weakness, our management plans to take the following steps:We will employ, as needed, outside professionals to provide key accounting personnel ongoing technical trainings to ensure their proper understanding ofU.S. GAAP and newly announced accounting standards.The Company believes the foregoing measures will remediate the identified material weakness in future periods. The Company is committed to monitoringthe effectiveness of these measures and making any changes that are necessary and appropriate.Notwithstanding the conclusion that its internal control over financial reporting was not effective as of the end of the period covered by this report, ourChief Executive Officer and Chief Financial Officer believe that the financial statements and other information contained in this report present fairly, in all materialrespects, its business, financial condition and results of operations. Nothing has come to the attention of management that causes them to believe that any materialinaccuracies or errors exist in the Company’s financial statements as of December 31, 2017.Attestation report of the registered public accounting firm.This transition report does not include an attestation report of the Company’s registered public accounting firm on internal control over financial reportingbecause the Company is a nonaccelerated filer permanently exempted from section 404(b) of the SarbanesOxley Act.Changes in Internal Control over Financial ReportingThere were no changes in the Company’s internal control over financial reporting that occurred during our fiscal year ended December 31, 2017 that hasmaterially affected or is reasonably likely to materially affect our internal control over financial reporting.ITEM 16. [RESERVED]ITEM 16A. AUDIT COMMITTEE FINANCIAL EXPERT.Our board of directors has determined that Mr. Dennis Galgano qualifies as an audit committee financial expert. Our board of directors has determined thatMessrs. Dennis Galgano, Jin Shi, Jiming Ha and Zhihao Xu meet the definition of an “independent director” under the applicable NASDAQ Rules and under Rule10A3 of the Securities Exchange Act of 1934, as amended.72ITEM 16B. CODE OF ETHICS.Our board of directors has adopted a code of business conduct and ethics applicable to our directors, officers and employees. We have posted the code onour website at http://www.luokung.com.ITEM 16C. PRINCIPAL ACCOUNTANT FEES AND SERVICES.Audit FeesThe aggregate fees billed by Moore Stephens CPA Limited for professional services rendered for the audit of our financial information disclosed in thistransition report on Form 20F was $280,000 for the two years ended December 31, 2017 and 2016.The aggregate fees billed by our previous auditor, BDO China Shu Lun Pan Certified Public Accountants LLP for professional services rendered for theaudit of our annual financial information included in our annual reports on Form 20F was $105,500 for each of the fiscal years ended September 30, 2017, 2016 and2015.Tax FeesWe did not engage our principal accountants to provide tax or related services during the last two fiscal years.All Other FeesWe did not engage our principal accountants to render services to us during the last two fiscal years, other than as reported above.ITEM 16D. EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES.Not applicable.ITEM 16E. PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS.Not applicable.ITEM 16F. CHANGE IN REGISTRANT’S CERTIFYING ACCOUNTANT.Not applicable.ITEM 16G. CORPORATE GOVERNANCE.We are incorporated in the BVI and our corporate governance practices are governed by applicable BVI law as well as our memorandum and articles ofassociation. In addition, because our ADSs are listed on NASDAQ, we are subject to NASDAQ’s corporate governance requirements. NASDAQ Listing Rule5620(a) requires each issuer to hold an annual meeting of shareholders no later than one year after the end of the issuer’s fiscal year end. However, NASDAQ ListingRule 5615(a)(3) permits a foreign private issuer like us to follow home country practices in lieu of certain requirements of Listing Rule 5600, provided that suchforeign private issuer discloses in its transition report filed with the SEC each requirement of Rule 5600 that it does not follow and describes the home countrypractice followed in lieu of such requirement. We follow home country practice with respect to annual meetings and did not hold an annual shareholder meeting inthe year ended December 31, 2017. We may, however, hold annual shareholder meetings in the future if there are significant issues that require shareholders’approvals.ITEM 16H. MINE SAFETY DISCLOSURE.Not applicable.73PART IIIITEM 17. FINANCIAL STATEMENTS.We have elected to provide financial statements and related information specified in Item 18.ITEM 18. FINANCIAL STATEMENTS.See “Index to Consolidated Financial Statements” for a list of all financial statements filed as part of this transition report. The Financial Statements arebeginning on page F1.ITEM 19. EXHIBITS.See the Exhibit Index following the signature page of this report, which is incorporated herein by reference.74SIGNATURESThe registrant hereby certifies that it meets all of the requirements for filing on Form 20F and that it has duly caused and authorized the undersigned tosign this transition report on its behalf.LUOKUNG TECHNOLOGY CORP.By:/s/ Xuesong Song Xuesong SongChief Executive Officer(principal executive officer)October 12, 201875EXHIBIT INDEXThe following documents are filed as part of this transition report on Form 20F.ExhibitNumberDescription1.1Amended and Restated Memorandum of Association and Articles of Association of Luokung Technology Corp., dated August 20, 2018, and ascurrently in effect.2.1*Deposit Agreement among the Company, depositary and holders of the American Depositary Receipts.2.2*Form of American Depositary Receipt.2.3*English translation of Entrusted Management Agreement dated December 15, 2009 between Xi’an Softech Co., Ltd., Xi’an Kingtone InformationTechnology Co., Ltd. and the shareholders of Xi’an Kingtone Information Technology Co., Ltd.3.1*English translation of Shareholder’s Voting Proxy Agreement dated December 15, 2009 between Xi’an Softech Co., Ltd., Xi’an Kingtone InformationTechnology Co., Ltd. and the shareholders of Xi’an Kingtone Information Technology Co., Ltd.4.1*English translation of Exclusive Technology Service Agreement dated December 15, 2009 between Xi’an Softech Co., Ltd. and Xi’an KingtoneInformation Technology Co., Ltd.4.2*English translation of Exclusive Option Agreement dated December 15, 2009 between Xi’an Softech Co., Ltd., Xi’an Kingtone InformationTechnology Co., Ltd. and the shareholders of Xi’an Kingtone Information Technology Co., Ltd.4.3*English translation of Equity Pledge Agreement dated December 15, 2009 between Xi’an Softech Co., Ltd., Xi’an Kingtone Information TechnologyCo., Ltd. and the shareholders of Xi’an Kingtone Information Technology Co., Ltd.4.4*English translation of Loan Agreement dated September 14, 2009 between Xi’an Kingtone Information Technology Co., Ltd. and Xian CityCommercial Bank.4.5*English translation of Mortgage Agreement dated September 14, 2009 between Xi’an Kingtone Information Technology Co., Ltd. and Xian CityCommercial Bank.4.6*English translation of Form of Employment Agreement entered into between the Company and the Company’s executive officers.4.7*2010 Omnibus Incentive Plan of the Company.4.8**English translation of Project Construction Contract dated August 10, 2010 between Xi’an Hu County Yuxing Agriculture Science & TechnologyCo., Ltd. and Xi’an Kingtone Information Technology Co., Ltd.4.9***Asset Exchange Agreement by and between C Media Limited and the Company dated as of January 25, 2018.4.10***Securities Purchase Agreement by and among Redstone YYL Management Limited and five shareholders holding majority of the shares of theCompany dated as of January 25, 2018.4.15Exclusive Business Cooperation Agreement by and between Zhongchuan Tianxia Information Technology (Shenzhen) Co., Ltd., and Beijing MobileVision Technology Co., Ltd., dated August 31, 2015.764.16Exclusive Option Agreement by and among Zhongchuan Tianxia Information Technology (Shenzhen) Co., Ltd., Xuesong Song, Weili Chen, PingWang, Donglai Liu, and Beijing Mobile Vision Technology Co., Ltd., dated August 31, 2015.4.17Equity Interest Pledge Agreement by and among Zhongchuan Tianxia Information Technology (Shenzhen) Co., Ltd., Xuesong Song, Weili Chen, PingWang, Donglai Liu, and Beijing Mobile Vision Technology Co., Ltd., dated August 31, 2015.4.18Addendum to Asset Exchange Agreement by and among the Company, Topsky Infotech Holdings Pte Ltd. and C Media Limited, dated October 3,2018. Incorporated by reference to the Company’s Current Report on Form 6K filed on October 4, 2018.4.19Stock Purchase Agreement, dated August 25, 2018, by and among the Company, LK Technology Ltd., and the shareholders listedtherein. Incorporated by reference to the Company’s Current Report on Form 6K filed on August 27, 2018.4.20Power of Attorney by Weili Chen, dated August 31, 2015.4.21Power of Attorney by Ping Wang, dated August 31, 2015.4.22Power of Attorney by Donglai Liu, dated August 31, 2015.4.23Power of Attorney by Xuesong Song, dated August 31, 2015.8.1List of Subsidiaries and Consolidated Variable Interest Entities10.1Employment Agreement, dated August 19, 2018, between Luokung Technology Corp. and Xuesong Song.†10.2Employment Agreement, dated August 19, 2018, by and between Luokung Technology Corp. and Jie Yu.†12.1Certification of Chief Executive Officer required by Rule 13a14(a).12.2Certification of Chief Financial Officer required by Rule 13a14(a).13.1Certification of Chief Executive Officer required by Rule 13a14(a).13.2Certification of Chief Financial Officer required by Rule 13a14(a).101.INSXBRL Instance Document.101.SCHXBRL Taxonomy Extension Schema Document.101.CALXBRL Taxonomy Extension Calculation Linkbase Document.101.DEFXBRL Taxonomy Extension Definition Linkbase Document.101.LABXBRL Taxonomy Extension Label Linkbase Document.101.PREXBRL Taxonomy Extension Presentation Linkbase Document.*Previously filed as an exhibit to the Company’s Registration Statement on Form F1 (Reg. No. 333166056) filed with the Commission and incorporated hereinby reference.**Previously filed as exhibits to the Company’s Transition Report on Form 20F filed with the Commission on January 20, 2011 and incorporated herein byreference.***Previously filed as exhibits to the Company’s Annual Report on Form 20F filed with the Commission on February 9, 2018 and incorporated herein byreference.†Indicates management contract or compensatory plan, contract or arrangement.77LK Technology Ltd. and SubsidiariesCONSOLIDATED FINANCIAL STATEMENTSTABLE OF CONTENTSPage(s)Report of Independent Registered Public Accounting FirmF2Consolidated Financial StatementsConsolidated Balance SheetsF3Consolidated Statements of Operations and Comprehensive LossF4application.Chuang (Vincent) Tao was appointed as a member of the Board effective on August 25, 2018. Dr. Tao was the Chairman of SuperEngine Suzhou from 2014to 2017. Dr. Tao has been the president of the Seasky Angel Investment Alliance of Shanghai since 2015. Dr. Tao received his Bachelor Degree of geographicinformation and telemetry from Wuhan University in China in 1990 and received his Ph.D. from University of Calgary, Canada in 1997.Dennis Galgano was appointed as a director of the Company following the consummation of the asset exchange agreement. He was a registered consultantwith Morgan Joseph Triartisan LLC from November 2016 until October 2017, and previously served as vice chairman and head of international investment bankingfor Morgan Joseph Triartisan LLC, which is a registered broker dealer engaged in the investment banking and financial advisory industry. Mr. Galgano received aB.S. degree in Chemistry from St. John’s University and an M.B.A. from The Wharton School in 1972.Jin Shi was appointed as a director of the Company following the consummation of the asset exchange transactions. Mr. Shi has served as the managingpartner of Chum Capital Group, a merchant bank focused on helping Chinese growth companies to access global capital, since January 2013. Mr. Shi has also servedas a director of Seven Stars Cloud Group, Inc. (NASDAQ: SSC), a premium video on demand service provider, since January 2014, and joined the audit committee ofits board of directors in March 2016. He also served as a director and member of the audit committee of Pingtan Marine Enterprise, Ltd. (NASDAQ: PME), a marineenterprise group primarily engaged in ocean fishing through its subsidiaries. Mr. Shi received an EMBA degree from the Guanghua Management School of BeijingUniversity, and a Bachelor’s degree of science in Chemical Engineering from Tianjin University.Jiming Ha was appointed as a director of the Company following the consummation of the asset exchange agreement, and has also served as a seniorresearch fellow for the China Finance 40 Forum since March 1, 2018, and previously served as a managing director of Goldman Sachs from January 2017 to April2017. Mr. Ha served as a vice chairman and chief investment strategist of the Investment Strategy Group for Private Wealth Management at Goldman Sachs from2010 to January 2017. Mr. Ha holds a PhD in Economics from the University of Kansas and Master’s and Bachelor’s degrees of science from Fudan University.Zhihao Xu was appointed as a director of the Company following the consummation of the asset exchange transactions. Mr. Xu has served as the chiefexecutive officer of Geely Group Co., Ltd., in Hangzhou, China, since December 2017, and previously served as the chairman and chief executive officer of BeijingDingchengrenhe Investment Co., Ltd., a funds management company, from January 2017 to December 2017. Mr. Xu served as the chairman of president of HNAUSOLV CO., LTD., and the chief innovation officer of HNA Logistics Group from January 2014 to December 2016, and prior to that as the chairman of GopayInnovation Technology Co. Ltd., an online payment system operator supporting online money transfers, from April 2012 to January 2014. Mr. Xu graduated from theBusiness School of Renmin University of China and from the Wudaokou Finance College of Tsinghua University with a fund qualification certificate and securitiesqualification certificate.B. COMPENSATION.Compensation of Directors and Executive OfficersFor the ninemonth transition period ended September 30, 2018 and the fiscal year ended December 31, 2017, we did not pay any cash compensation to ourexecutive officers of LK Technology Ltd. and a to our directors for serving on our board of directors of LK Technology Ltd.37Other than nonemployee directors, we do not intend to compensate directors for serving on our board of directors or any of its committees. We do,however, intend to reimburse each member of our board of directors for outofpocket expenses incurred by each director in connection with attending meetings ofthe board of directors and its committees.AdministrationThe Incentive Plan is administered by our board of directors, or at the discretion of the board, by our compensation committee. Our board of directors hasdelegated authority to our compensation committee to administer the Incentive Plan. Subject to the terms of the Incentive Plan, the compensation committee mayselect participants to receive awards, determine the types of awards and terms and conditions of awards, and interpret provisions of the Incentive Plan.The ordinary shares issued or to be issued under the Incentive Plan consist of authorized but unissued shares. If any ordinary shares covered by an awardare not purchased or are forfeited, or if an award otherwise terminates without delivery of any ordinary shares, then the number of ordinary shares counted againstthe aggregate number of ordinary shares available under the plan with respect to the award will, to the extent of any such forfeiture or termination, again be availablefor making awards under the Incentive Plan.EligibilityAwards may be made under the Incentive Plan to our employees, officers, directors, consultants or advisers or to any of our affiliates, and to any otherindividual whose participation in the Incentive Plan is determined to be in our best interests by our board of directors.Amendment or Termination of the PlanOur board of directors may terminate or amend the Incentive Plan at any time and for any reason. No amendment, however, may adversely impair the rightsof grantees with respect to outstanding awards. The Incentive Plan has a term of ten years. Amendments will be submitted for shareholder approval to the extentrequired by applicable stock exchange listing requirements or other applicable laws.OptionsThe Incentive Plan permits the granting of options to purchase ordinary shares intended to qualify as incentive share options under the Internal RevenueCode and share options that do not qualify as incentive share options, or nonqualified share options.The exercise price of each share option may not be less than 100% of the fair market value of our ADSs representing ordinary shares on the date of grant.In the case of certain 10% shareholders who receive incentive share options, the exercise price may not be less than 110% of the fair market value of our ADSsrepresenting ordinary shares on the date of grant. An exception to these requirements is made for options that we grant in substitution for options held byemployees of companies that we acquire. In such a case the exercise price is adjusted to preserve the economic value of the employee’s share option from his or herformer employer.The term of each share option is fixed by the compensation committee and may not exceed ten years from the date of grant. The compensation committeedetermines at what time or times each option may be exercised and the period of time, if any, after retirement, death, disability or termination of employment duringwhich options may be exercised.Options may be made exercisable in installments. The award agreement provides the vesting of the options. Exercisability of options may be accelerated bythe compensation committee.38In general, an optionee may pay the exercise price of an option by (1) cash or check (in U.S. dollars or Renminbi or other local currency as approved by thecompensation committee), (2) ordinary shares held for such period of time as may be required by the compensation committee, (3) delivery of a notice of a marketorder with a broker with respect to ordinary shares then issuable upon exercise of an option, and that the broker has been directed to pay us a sufficient portion ofnet proceeds of the sale in satisfaction of the exercise price, provided that payment of such proceeds is then made to us upon settlement of such sale, (4) otherproperty acceptable to the compensation committee with a fair market value equal to the exercise price, (5) cashless exercise or (6) any combination of the foregoing.Share options granted under the Incentive Plan may not be sold, transferred, pledged, or assigned other than by will or under applicable laws of descentand distribution. However, we may permit limited transfers of nonqualified options for the benefit of immediate family members of grantees to help with estateplanning concerns or pursuant to a domestic relations order in settlement of marital property rights.Other AwardsThe compensation committee may also award under the Incentive Plan:1.ordinary shares subject to restrictions;2.deferred ordinary shares, credited as deferred ordinary share units, but ultimately payable in the form of unrestricted ordinary shares inaccordance with the terms of the grant or with the participant’s deferral election;3.ordinary share units subject to restrictions;4.unrestricted ordinary shares, which are ordinary shares issued at no cost or for a purchase price determined by the compensation committee whichare free from any restrictions under the 2011 Omnibus Incentive Plan;5.dividend equivalent rights entitling the grantee to receive credits for dividends that would be paid if the grantee had held a specified number ofordinary shares; or6.a right to receive a number of ordinary shares or, in the discretion of the compensation committee, an amount in cash or a combination of ordinaryshares and cash, based on the increase in the fair market value of the ADSs representing ordinary shares underlying the right during a statedperiod specified by the compensation committee.Effect of Certain Corporate TransactionsCertain change of control transactions involving us may cause awards granted under the Incentive Plan to vest, unless the awards are continued orsubstituted for by the surviving company in connection with the corporate transaction.Unless otherwise provided in the appropriate option agreement on the date of grant or provided by our board of directors thereafter with the consent of thegrantee, options granted under the Incentive Plan become exercisable in full following (1) a dissolution of our company or a merger, consolidation or reorganizationof our company with one or more other entities in which we are not the surviving entity, (2) a sale of substantially all of our assets to another person or entity, or (3)any transaction (including without limitation a merger or reorganization in which we are the surviving entity) which results in any person or entity owning 50% ormore of the combined voting power of all classes of our shares.39Adjustments for Dividends and Similar EventsThe compensation committee will make appropriate adjustments in outstanding awards and the number of ordinary shares available for issuance under theIncentive Plan, including the individual limitations on awards, to reflect ordinary share dividends, stock splits and other similar events.C. BOARD PRACTICES.Board of DirectorsOur board of directors consists of six members being Messrs. Xuesong Song, Kegang Peng, Dennis Galgano, Jin Shi, Jiming Ha and Zhiaho Xu. Ourdirectors hold office until our annual meeting of shareholders, where their successors will be duly elected and qualified, or until the directors’ death, resignation orremoval, whichever is earlier. Our directors are not subject to a term of office and hold office until their resignation, death or incapacity or until their respectivesuccessors have been elected and qualified in accordance with our fourth amended and restated memorandum of association and articles of association. A directorwill be removed from office if, among other things, the director (1) becomes bankrupt, (2) dies or becomes of unsound mind, or (3) is absent from meetings of ourboard of directors for six consecutive months without leave and our board of directors resolves that the office is vacated. A director is not entitled to any specialbenefits upon termination of service with the company.Director IndependenceOur board of directors consists of six members; Messrs. Dennis Galgano, Jin Shi, Jiming Ha and Zhihao Xu have been determined by us to be independentdirectors within the meaning of the independent director guidelines of the NASDAQ Corporate Governance Rules (the “NASDAQ Rules”).Committees of Our Board of DirectorsTo enhance our corporate governance, we established three committees under our board of directors: an audit committee, a compensation committee, and anominating and corporate governance committee. We have adopted a charter for each of these committees. The committees have the following functions andmembers.Audit CommitteeOur audit committee reports to our board of directors regarding the appointment of our independent public accountants, the scope and results of ourannual audits, compliance with our accounting and financial policies and management’s procedures and policies relating to the adequacy of our internal accountingcontrols. Our audit committee consists of Messrs. Dennis Galgano, Jin Shi, and Jiming Ha. Mr. Galgano, having accounting and financial management expertise,serves as the chairman of the audit committee and is an “audit committee financial expert” as defined by the rules and regulations of the SEC. Our board of directorshas determined that each of these persons meet the definition of an “independent director” under the applicable NASDAQ Rules and under Rule 10A3 of theSecurities Exchange Act of 1934, as amended (the “Exchange Act”).Our audit committee is responsible for, among other things:●the appointment, evaluation, compensation, oversight and termination of the work of our independent auditor (including resolution of disagreementsbetween management and the independent auditor regarding financial reporting);●an annual performance evaluation of the audit committee;●establishing procedures for the receipt, retention and treatment of complaints regarding accounting, internal accounting controls, auditing matters orpotential violations of law, and the confidential, anonymous submission by our employees of concerns regarding questionable accounting or auditingmatters or potential violations of law;40●ensuring that it receives an transition report from our independent auditor describing our internal control procedures and any steps taken to deal withmaterial control deficiencies and attesting to the auditor’s independence and describing all relationships between the auditor and us;●reviewing our annual audited financial statements and quarterly financial statements with management and our independent auditor;●reviewing and approving all proposed related party transactions;●reviewing our policies with respect to risk assessment and risk management;●meeting separately and periodically with management and our independent auditor; and●reporting regularly to our board of directors.Compensation CommitteeOur compensation committee assists the board of directors in reviewing and approving the compensation structure of our directors and executive officers,including all forms of compensation to be provided to our directors and executive officers. In addition, the compensation committee reviews share compensationarrangements for all of our other employees. Members of the compensation committee are not prohibited from direct involvement in determining their owncompensation. Our chief executive officer is not permitted to be present at any committee meeting during which his or her compensation is deliberated. Ourcompensation committee consists of Dennis Galgano and Jin Shi, with Mr. Shi serving as the chairman of the compensation committee. Our board of directors hasdetermined that each of these persons meet the definition of “independent director” under the applicable requirements of the NASDAQ Rules.Our compensation committee is responsible for, among other things:●reviewing and approving corporate goals and objectives relevant to the compensation of our chief executive officer, evaluating the performance of ourchief executive officer in light of those goals and objectives and setting the compensation level of our chief executive officer based on this evaluation;●reviewing and making recommendations to the board with respect to the compensation of our executives, incentive compensation and equitybasedplans that are subject to board approval; and●providing annual performance evaluations of the compensation committee.Nominating and Corporate Governance CommitteeOur nominating and corporate governance committee assists the board of directors in identifying and selecting or recommending individuals qualified tobecome our directors, developing and recommending corporate governance principles and overseeing the evaluation of our board of directors and management. Ournominating and corporate governance committee consists of Jiming Ha and Zhihao Xue, with Mr. Ha serving as the chairman of the nominating and corporategovernance committee. Our board of directors has determined that each of these persons meet the definition of “independent director” under the applicablerequirements of the NASDAQ Rules.Our nominating and corporate governance committee is responsible for, among other things:●selecting and recommending to our board nominees for election or reelection to our board, or for appointment to fill any vacancy;●reviewing annually with our board the current composition of the board of directors with regards to characteristics such as independence, age, skills,experience and availability of service to us;●selecting and recommending to our board the names of directors to serve as members of the audit committee and the compensation committee, as wellas the nominating and corporate governance committee itself; advising our board of directors periodically with regards to significant developments inthe law and practice of corporate governance as well as our compliance with applicable laws and regulations, and making recommendations to ourboard of directors on all matters of corporate governance and on any remedial action to be taken; and●monitoring compliance with our code of business conduct and ethics, including reviewing the adequacy and effectiveness of our procedures to ensureproper compliance.41Code of Business Conduct and EthicsOur board of directors adopted a code of business conduct and ethics applicable to our directors, officers and employees.Duties of DirectorsUnder British Virgin Islands law, our directors have a duty to act honestly, in good faith and with a view to our best interests. Our directors also have a dutyto exercise care, diligence and skills that a reasonably prudent person would exercise in comparable circumstances. In fulfilling their duty of care to us, our directorsmust ensure compliance with our memorandum of association and articles of association. We have the right to seek damages if a duty owed by our directors isbreached.The functions and powers of our board of directors include, among others:●appointing officers and determining the term of office of the officers;●authorizing the payment of donations to religious, charitable, public or other bodies, clubs, funds or associations as deemed advisable;●exercising the borrowing powers of the company and mortgaging the property of the company;●executing cheques, promissory notes and other negotiable instruments on behalf of the company; and●maintaining or registering a register of mortgages, charges or other encumbrances of the company.Remuneration and BorrowingThe directors may receive such remuneration as our board of directors may determine from time to time. Each director is entitled to be repaid or prepaid alltraveling, hotel and incidental expenses reasonably incurred or expected to be incurred in attending meetings of our board of directors or committees of our board ofdirectors or shareholder meetings or otherwise in connection with the discharge of his or her duties as a director. The compensation committee will assist thedirectors in reviewing and approving the compensation structure for the directors.Our board of directors may exercise all the powers of the company to borrow money and to mortgage or charge our undertakings and property or any partthereof, to issue debentures, debenture stock and other securities whenever money is borrowed or as security for any debt, liability or obligation of the company orof any third party.QualificationA director is not required to hold shares as a qualification to office.42Limitation on Liability and Other Indemnification MattersBritish Virgin Islands law does not limit the extent to which a company’s memorandum of association and articles of association may provide forindemnification of officers and directors, except to the extent any such provision may be held by the British Virgin Islands courts to be contrary to public policy,such as to provide indemnification against civil fraud or the consequences of committing a crime.Under our memorandum of association and articles of association, we may indemnify our directors, officers and liquidators against all expenses, includinglegal fees, and against all judgments, fines and amounts paid in settlement and reasonably incurred in connection with civil, criminal, administrative or investigativeproceedings to which they are party or are threatened to be made a party by reason of their acting as our director, officer or liquidator. To be entitled toindemnification, these persons must have acted honestly and in good faith with a view to the best interest of the company and, in the case of criminal proceedings,they must have had no reasonable cause to believe their conduct was unlawful.Compensation Committee Interlocks and Insider ParticipationNone of the members of our compensation committee is an officer or employee of our company. None of our executive officers currently serves, or in thepast year has served, as a member of the board of directors or compensation committee of any entity that has one or more executive officers serving on our board ofdirectors or compensation committee.Employment AgreementsOn August 19, 2018, the Company entered into an Employment Agreement (the “Song Agreement”) with Mr. Xuesong Song, to serve as the ChiefExecutive Officer of the Company for a fouryear term, subject to renewal. Under the terms of the Song Agreement, Mr. Song will receive no salary for his servicesbut will be eligible for an annual cash bonus in the Board’s sole discretion.On August 19, 2018, the Company entered into an Employment Agreement (the “Yu Agreement”) with Mr. Jie Yu, to serve as the Chief Financial Officer ofthe Company for a fouryear term, subject to renewal. Under the terms of the Yu Agreement, Mr. Yu will receive an annual salary of RMB700,000, and will be eligiblefor an annual cash bonus in the Board’s sole discretion.D. EMPLOYEES.As of September 30, 2018 and December 31, 2017, we had a total of 107 and 37 fulltime employees, including 48 and 13 in research and development, 9 and 2in sales and marketing and the rest in a variety of other divisions, respectively. All of our employees are fulltime employees. None of our employees is currentlyrepresented by a union and/or collective bargaining agreements. We believe that we have good relations with our employees and since our inception we have hadno history of work stoppages or union organizing campaigns.E. SHARE OWNERSHIP.The following table provides information as to the beneficial ownership of our ordinary shares as of October 10, 2018, by the persons listed. Beneficialownership of shares is determined under the rules of the SEC and generally includes any shares over which a person exercises sole or shared voting or investmentpower. For purposes of the following table, a person is deemed to have beneficial ownership of any ordinary shares if such person has the right to acquire suchshares within 60 days of October 10, 2018. For purposes of computing the percentage of outstanding shares held by each person, any shares that such person hasthe right to acquire within 60 days after of October 10, 2018 are deemed to be outstanding, but are not deemed to be outstanding for the purpose of computing thepercentage ownership of any other person. Except as otherwise noted, the persons named in the table have sole voting and investment power with respect to all ofthe ordinary shares beneficially owned by them. Unless otherwise indicated, the address of each person listed is c/o Luokung Technologies, LAB 32, SOHO 3Q, No9, Guanghua Road, Chaoyang District, Beijing, People’s Republic of China.43Percentage ownership in the following table is based on 199,317,558 ordinary shares outstanding on October 10, 2018.Number ofsharesPercent ofclassDirectors and named executive officersCharm Dragon International Limited (1)4,030,8822.03%Xuesong Song, Chairman, Chief Executive Officer and Director(2)38,156,43019.30%Kegang Peng, Vice President and Director (3)17,231,9558.71%Dennis Galgano, Director75,796*%Jin Shi, DirectorJiming Ha, DirectorZhihao Xu, Director (4)7,579,1843.83%Dongpu Zhang, President (5)2,321,7921.17%Chuang Tao, Director (6)1,221,996*%Directors and executive officers as a group (10 persons)66,587,15233.69%(1)Charm Dragon International Limited is a British Virgin Islands company controlled by Mr. Xuesong Song.(2)Consists of (i) 4,030,882 shares owned directly by Charm Dragon International Limited, a British Virgin Islands company and (ii) 22,624,793 shares owneddirectly by Bravo First Development Limited, a British Virgin Islands company. Mr. Xuesong Song is the controlling shareholder of Bravo First DevelopmentLimited. Mr. Xuesong Song is the sole director of Charm Dragon International Limited.(3)Consists of 17,231,955 shares owned directly by Plenty Prestige Enterprises Limited, a British Virgin Islands company. Mr. Kegang Peng is the sole director ofPlenty Prestige Enterprises Limited.(4)Consists of 7,579,184 shares directly owned by Geely Group Limited., a Chinese company. Mr. Zhihao Xu is the Chief Executive Officer of Geely GroupLimited.(5)Consists of 2,321,792 shares owned directly by Genoa Peak Limited, a British Virgin Islands company. Mr. Dongpu Zhang controls Genoa Peak Limited.(6)Consists of 1,221,996 shares owned directly by Globalearth Holdings Limited, a British Virgin Islands company. Mr. Chuang Tao controls Globalearth HoldingsLimited.*Represents less than 1% of shares outstandingITEM 7. MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS.A. MAJOR SHAREHOLDERSPlease refer to Item 6.E “Directors, Senior Management and Employees — Share Ownership.”To our knowledge, (A) we are not directly or indirectly owned or controlled by (i) another corporation or (ii) any foreign government and (B) there are noarrangements (including any announced or expected takeover bid), the operation of which may at a subsequent date result in a change in our control.The voting rights of our major shareholders do not differ from the voting rights of other holders of the same class of shares.44B. RELATED PARTY TRANSACTIONS. BUSINESS RELATIONSHIPS.Our subsidiaries, consolidated affiliated entities, and the subsidiaries of the consolidated affiliated entities have engaged, during the ordinary course ofbusiness, in a number of customary transactions with each other. All of these intercompany balances have been eliminated in consolidation.As of December 31, 2017, we had amounts due from related parties, C Media Limited and Ya Tuo Ji International Consultancy (Beijing) Limited, in theamounts of $11.8 million and $0.2 million, respectively. These amounts due from related parties are short term in nature, noninterest bearing, unsecured andrepayable on demand.As of December 31, 2017, we had amounts due to related parties, Mr. Xuesong Song, our chairman and chief executive officer, Thumb Beijing Branch andThumb Shenzhen Branch, in the amounts of $2.9 million, $0.6 million and $0.03 million, respectively. These amounts due to related parties are short term in nature,noninterest bearing, unsecured and payable on demand.We are party to a series of control agreements with Beijing Zhong Chuan Shi Xun. In addition, our chief executive officer, Mr. Xuesong Song, serves as andofficer of Beijing Zhong Chuan Shi Xun and is a shareholder of Beijing Zhong Chuan Shi Xun. The following table sets forth the relationship of Mr. Song withBeijing Zhong Chuan Shi Xun:NameRelationship withLuokung TechnologyRelationship withBeijing Zhong Chuan Shi XunPercentageOwnership Interest inBeijing Zhong Chuan Shi XunXuesong SongChief Executive OfficerChief Executive Officer61.83%C. INTERESTS OF EXPERTS AND COUNSEL.None.ITEM 8. FINANCIAL INFORMATION.A. CONSOLIDATED STATEMENTS AND OTHER FINANCIAL INFORMATION.See “Item 18. Financial Statements.”Legal ProceedingsTo our knowledge, other than as described below there are no material legal proceedings threatened against us. From time to time, we may be subject tovarious claims and legal actions arising in the ordinary course of business. Following the consummation of the AEA, we became successor in interest to the legalproceedings described below.Litigation with Shanghai Fusheng Weier Intelligent Control Technology Co., Ltd.On January 22, 2016, Zhong Chuan Rui You and Shanghai Fusheng Weier Intelligent Control Technology Co., Ltd. (“Fusheng Weier”) signed a contract forequipment of $1,652,842 (RMB10,800,000). Since Zhong Chuan Rui You did not make the payments of $1,126,381 (RMB7,360,000) on the due dates, Fusheng Weierfiled a lawsuit against Zhong Chuan Rui You in Shanghai Xuhui District People's Court on October 8, 2016. On March 9, 2017, Xuhui District People's Court issuedthe verdict requiring Zhong Chuan Rui You to pay the overdue debts. In August 2017, C Media Limited made the payment of $512,075 (RMB3,346,000). Theremaining balance has been accrued in accounts payable. The payment schedule for the remaining balance is being negotiated by the two parties. On February 5,2018, a hearing was held adding Zhong Chuan Shi Xun as a defendant. The Group plans to settle the remaining balance within one year.45Lawsuit with Gansu Jinlun Culture Media Co., Ltd.On August 22, 2014, Zhong Chuan Rui You and Gansu Jinlun Culture Media Co., Ltd. (“Gansu Jinlun”) signed a “Lanzhou Railway Bureau AirconditionedTrain WiFi Network System Advertising Operation Rights Agreement” for advertising on 72 trains of $1,467,880 (RMB9,604,633). Due to the dispute on theproject implementation, Zhong Chuan Rui You did not pay the advertising fee. On August 23, 2017, Gansu Jinlun filed a lawsuit with Gansu Intermediate People'sCourt. On December 19, 2017, Gansu Intermediate People's Court issued a verdict, ruling that Zhong Chuan Rui You settle the overdue advertising fee. Since only 18out of 72 trains have been installed with Wifi network system, Zhong Chuan Rui You disputed and appealed to the verdict. The next court trial date has not yet beendetermined. C Media and Gansu Jinlun are negotiating a potential settlement to resume the contract. According to the legal counsel, it is probable that the settlementwill amount to approximately $459,000 (RMB3,000,000); therefore, this amount has been accrued in accounts payable as at December 31, 2017.Litigation with Shenzhen Hua Xun Fang Zhou Technology Co., Ltd.On June 16, 2015, Zhong Chuan Rui You signed a cooperation agreement with Shenzhen Hua Xun Fang Zhou Technology Co., Ltd. (“Shenzhen Hua Xun”)and Xuesong Song, a major shareholder of C Media Limited. Pursuant to this agreement, Zhong Chuan Rui You procures equipment from Shenzhen Hua Xun.Xuesong Song acts as a joint liability guarantor for the entire debts of Zhong Chuan Rui You under this agreement. As Zhong Chuan Rui You did not make thepayments on the due dates, Shenzhen Hua Xun filed a lawsuit with Shenzhen Baoan District People's Court on May 31, 2016. On November 1, 2016, Zhong ChuanRui You, Xuesong Song and Shenzhen Hua Xun reached a settlement in Shenzhen Baoan District People's Court to settle $1,735,389 (RMB11,355,000) in fourinstalments. On December 30, 2017, the debt was assigned to C Media Limited.Dividend PolicyWe currently intend to retain all of our available funds and future earnings for use in the operation and expansion of our business and do not anticipatepaying cash dividends in the foreseeable future. Under the terms of our Amended and Restated Memorandum and Articles of Association the declaration andpayment of any dividends in the future will be determined by our board of directors, in its discretion, and will depend on a number of factors, including our earnings,capital requirements and overall financial condition and our ability to receive dividends from our subsidiaries. If we pay any dividends, we will pay our ADS holders’dividends with respect to their underlying shares to the same extent as holders of our ordinary shares, subject to the terms of the deposit agreement, including thefees and expenses payable thereunder. Cash dividends on our ordinary shares, if any, will be paid in U.S. dollars.Our ability to receive dividends from our subsidiaries may limit our ability to pay dividends on our ordinary shares. See Risk Factors – Risks Related toDoing Business in China – Our holding company structure may limit the payment of dividends” and “Item 10. Additional Information – D. Exchange Controls –Dividend Distribution”.B. SIGNIFICANT CHANGES.N/AITEM 9. THE OFFER AND LISTINGA. OFFER AND LISTING DETAILS.Markets and Share Price HistoryOur ordinary shares are not currently listed on any trading market. Our American Depository Shares (“ADSs”) were voluntarily delisted from the NASDAQCapital Market on September 19, 2018. We have applied to NASDAQ for the listing of our ordinary shares on the NASDAQ Capital Market and received an approvalfor listing of Ordinary Shares on August 6, 2018, and as of the date of this transition report, that application and approval are currently under review.46The table below sets forth the high and low reported sales prices in dollars of our ordinary shares, which are represented by ADSs, as reported byNASDAQ in the periods as indicated:ADSHighLowAnnual Highs and Lows (as of the fiscal year end 09/30 for the five most recent full financial years)*20175.592.67201610.21.62Quarterly Highs and Lows (for the two most recent full financial years and any subsequent period, based on calendarquarter end)*2018Third Quarter8.006.30Second Quarter8.824.25First Quarter6.403.702017Fourth Quarter5.592.91Third Quarter3.992.67Second Quarter4.063.07First Quarter5.152.832016Fourth Quarter6.594.20Third Quarter10.201.62Second Quarter3.101.97First Quarter3.602.12Monthly Highs and Lows (for the most recent six months)September 20188.006.41August 20187.706.63July 20187.506.30June 20188.827.55May 20187.805.92April 20187.454.25*The Company effected a 1for10 reverse stock split of its ordinary shares on November 6, 2012 (the “Reverse Split”). The ratio between each AmericanDepositary Share (“ADS”) and its underlying ordinary share postReverse Split remains the same, namely, one ADR remains to represent one ordinary sharepost the Reverse Split. The price listed here after November 6, 2012 reflected the effect from the Reverse Split.B. PLAN OF DISTRIBUTION.Not Applicable.C. MARKETS.Our ordinary shares are not currently listed on any trading market. Our ADSs were voluntarily delisted from the NASDAQ Capital Market on September 19,2018. We have applied to NASDAQ for the listing of our ordinary shares on the NASDAQ Capital Market and received an approval for listing of Ordinary Shares onAugust 6, 2018, and as of the date of this transition report, that application and approval are currently under review.47D. SELLING SHAREHOLDERS.Not applicable.E. DILUTION.Not applicable.F. EXPENSES OF THE ISSUE.Not applicable.ITEM 10. ADDITIONAL INFORMATION.A. SHARE CAPITALNot applicable.B. MEMORANDUM AND ARTICLES OF ASSOCIATIONWe are a British Virgin Islands company incorporated with limited liability and our affairs are governed by the provisions of our memorandum of associationand articles of association, as amended and restated from time to time, and by the provisions of applicable British Virgin Islands law.Our memorandum of association and articles of association authorize the issuance of up to 251,000,000 shares, which are designated into (i) 250,000,000 ofordinary shares of the Company (“Ordinary Shares”), and (ii) 1,000,000 preferred shares of the Company (“Preferred Shares”), in each case with the rights,preferences and privileges as set out in the memorandum and articles of association of the Company.Please see below for a description of our ADSs under “Item 12. Description of Securities Other Than Equity Securities – D. American Depository Shares.”The following is a summary of the material provisions of our ordinary shares and our memorandum of association and articles of association.Ordinary SharesAll of our issued and outstanding ordinary shares are fully paid and nonassessable. Holders of our ordinary shares who are nonresidents of the BritishVirgin Islands may freely hold and vote their shares.Subject to the memorandum and articles of association (and, for greater clarity, without prejudice to any special rights conferred thereby on the holders ofany other shares), an Ordinary Share of the Company confers on the holder:(a)the right to one vote per Ordinary Share at a meeting of the members or on any resolution of members;(b)the right to an equal share in any distribution paid by the Company; and(c)the right to an equal share in the distribution of the surplus assets of the Company on a winding up;48Subject to the memorandum and articles of association (and, for greater clarity, without prejudice to any special rights conferred thereby on the holders ofany other shares), a Preferred Share of the Company confers on the holder:(a)the right to 399 votes per Preferred Share at a meeting of the members or on any resolution of members;(b)the right to an equal share in any distribution paid by the Company;(c)the right to an equal share in the distribution of the surplus assets of the Company on a winding up;(d)be freely transferable, in whole or in part, by Mr. Xuesong Song to any third party through one or more Private Transactions, subject toApplicable Law; and(e)be freely transferable, in whole or in part, by Mr. Xuesong Song to any third party through one or more Public Transactions, subject to ApplicableLaw and Automatic Conversion of such Preferred Share(s) into Ordinary Share(s).Each Preferred Share shall be automatically converted at any time after issue and without the payment of any additional sum into an equal number of fullypaid Ordinary Shares upon the conclusion of any transfer by Mr. Xuesong Song to any third party through one or more Public Transactions.Limitation on Liability and Indemnification MattersUnder British Virgin Islands law, each of our directors and officers, in performing his or her functions, is required to act honestly and in good faith with aview to our best interests and exercise the care, diligence and skill that a reasonably prudent person would exercise in comparable circumstances. Our memorandumof association and articles of association provide that, to the fullest extent permitted by British Virgin Islands law or any other applicable laws, our directors will notbe personally liable to us or our shareholders for any acts or omissions in the performance of their duties. Such limitation of liability does not affect the availabilityof equitable remedies such as injunctive relief or rescission. These provisions will not limit the liability of directors under United States federal securities laws.We may indemnify any of our directors or anyone serving at our request as a director of another entity against all expenses, including legal fees, andagainst all judgments, fines and amounts paid in settlement and reasonably incurred in connection with legal, administrative or investigative proceedings. We mayonly indemnify a director if he or she acted honestly and in good faith with the view to our best interests and, in the case of criminal proceedings, the director hadno reasonable cause to believe that his or her conduct was unlawful. The decision of our board of directors as to whether the director acted honestly and in goodfaith with a view to our best interests and as to whether the director had no reasonable cause to believe that his or her conduct was unlawful, is in the absence offraud sufficient for the purposes of indemnification, unless a question of law is involved. The termination of any proceedings by any judgment, order, settlement,conviction or the entry of no plea does not, by itself, create a presumption that a director did not act honestly and in good faith and with a view to our best interestsor that the director had reasonable cause to believe that his or her conduct was unlawful. If a director to be indemnified has been successful in defense of anyproceedings referred to above, the director is entitled to be indemnified against all expenses, including legal fees, and against all judgments, fines and amounts paidin settlement and reasonably incurred by the director or officer in connection with the proceedings.We may purchase and maintain insurance in relation to any of our directors or officers against any liability asserted against the directors or officers andincurred by the directors or officers in that capacity, whether or not we have or would have had the power to indemnify the directors or officers against the liabilityas provided in our memorandum of association and articles of association.Insofar as indemnification for liabilities arising under the Securities Act may be permitted for our directors or officers under the foregoing provisions, wehave been informed that in the opinion of the Securities and Exchange Commission, such indemnification is against public policy as expressed in the Securities Actand is therefore unenforceable as a matter of United States law.49Differences in Corporate LawWe were incorporated under, and are governed by, the laws of the British Virgin Islands. The corporate statutes of the State of Delaware and the BritishVirgin Islands are similar, and the flexibility available under British Virgin Islands law has enabled us to adopt memorandum of association and articles of associationthat will provide shareholders with rights that do not vary in any material respect from those they would enjoy if we were incorporated under the Delaware GeneralCorporation Law, or Delaware corporate law. Set forth below is a summary of some of the differences between provisions of the BVI Act applicable to us and thelaws application to companies incorporated in Delaware and their shareholders.Director’s Fiduciary DutiesUnder Delaware corporate law, a director of a Delaware corporation has a fiduciary duty to the corporation and its stockholders. This duty has twocomponents: the duty of care and the duty of loyalty. The duty of care requires that a director act in good faith, with the care that an ordinarily prudent personwould exercise under similar circumstances. Under this duty, a director must inform himself of, and disclose to stockholders, all material information reasonablyavailable regarding a significant transaction. The duty of loyalty requires that a director act in a manner he reasonably believes to be in the best interests of thecorporation. He must not use his corporate position for personal gain or advantage. This duty prohibits selfdealing by a director and mandates that the bestinterest of the corporation and its stockholders take precedence over any interest possessed by a director, officer or controlling stockholder and not shared by thestockholders generally. In general, actions of a director are presumed to have been made on an informed basis, in good faith and in the honest belief that the actiontaken was in the best interests of the corporation. However, this presumption may be rebutted by evidence of a breach of one of the fiduciary duties. Should suchevidence be presented concerning a transaction by a director, a director must prove the procedural fairness of the transaction, and that the transaction was of fairvalue to the corporation.British Virgin Islands law provides that every director of a British Virgin Islands company in exercising his powers or performing his duties shall acthonestly and in good faith and in what the director believes to be in the best interests of the company. Additionally, the director shall exercise the care, diligence andskill that a reasonable director would exercise in the same circumstances taking into account the nature of the company, the nature of the decision and the positionof the director and his responsibilities. In addition, British Virgin Islands law provides that a director shall exercise his powers as a director for a proper purpose andshall not act, or agree to the company acting, in a manner that contravenes British Virgin Islands law or the memorandum association or articles of association of thecompany.Amendment of Governing DocumentsUnder Delaware corporate law, with very limited exceptions, a vote of the stockholders is required to amend the certificate of incorporation. Under BritishVirgin Islands law and our memorandum of association and articles of association, (i) our shareholders may amend our memorandum of association and articles ofassociation by a resolution of shareholders, or (ii) our board of directors may amend our memorandum of association and articles of association by a resolution ofdirectors without a requirement for a resolution of shareholders so long as the amendment does not:●restrict the rights of the shareholders to amend the memorandum of association and articles of association;●change the percentage of shareholders required to pass a resolution of shareholders to amend the memorandum of association and articles ofassociation;●amend the memorandum of association and articles of association in circumstances where the memorandum of association and articles ofassociation cannot be amended by the shareholders; or●amend the provisions of memorandum of association or the articles of association pertaining to “rights attaching to shares,” “rights not varied bythe issue of the shares pari passu,” “variation of rights” and “amendment of memorandum and articles”.50Written Consent of DirectorsUnder Delaware corporate law, directors may act by written consent only on the basis of a unanimous vote. Under British Virgin Islands law, directors’consents need only a majority of directors signing to take effect.Written Consent of ShareholdersUnder Delaware corporate law, unless otherwise provided in the certificate of incorporation, any action to be taken at any annual or special meeting ofstockholders of a corporation, may be taken by written consent of the holders of outstanding stock having not less than the minimum number of votes that wouldbe necessary to take such action at a meeting. As permitted by British Virgin Islands law, shareholders’ consents need only a majority of shareholders signing totake effect. Our memorandum of association and articles of association provide that shareholders may approve corporate matters by way of a resolution consentedto at a meeting of shareholders or in writing by a majority of shareholders entitled to vote thereon.Shareholder ProposalsUnder Delaware corporate law, a shareholder has the right to put any proposal before the annual meeting of shareholders, provided it complies with thenotice provisions in the governing documents. A special meeting may be called by the board of directors or any other person authorized to do so in the governingdocuments, but shareholders may be precluded from calling special meetings. British Virgin Islands law and our memorandum of association and articles ofassociation provide that our directors shall call a meeting of the shareholders if requested in writing to do so by shareholders entitled to exercise at least 30% of thevoting rights in respect of the matter for which the meeting is requested.Sale of AssetsUnder Delaware corporate law, a vote of the stockholders is required to approve the sale of assets only when all or substantially all assets are being sold. Inthe British Virgin Islands, shareholder approval is required when more than 50% of the company’s total assets by value are being disposed of or sold.Dissolution; Winding UpUnder Delaware corporate law, unless the board of directors approves the proposal to dissolve, dissolution must be approved by shareholders holding100% of the total voting power of the corporation. Only if the dissolution is initiated by the board of directors may it be approved by a simple majority of thecorporation’s outstanding shares. Delaware corporate law allows a Delaware corporation to include in its certificate of incorporation a supermajority votingrequirement in connection with dissolutions initiated by the board. As permitted by British Virgin Islands law and our memorandum of association and articles ofassociation, we may be voluntarily liquidated under Part XII of the BVI Act by resolution of directors and resolution of shareholders if we have no liabilities and weare able to pay our debts as they fall due.Redemption of SharesUnder Delaware corporate law, any stock may be made subject to redemption by the corporation at its option or at the option of the holders of such stockprovided there remains outstanding shares with full voting power. Such stock may be made redeemable for cash, property or rights, as specified in the certificate ofincorporation or in the resolution of the board of directors providing for the issue of such stock. As permitted by British Virgin Islands law, and our memorandum ofassociation and articles of association, shares may be repurchased, redeemed or otherwise acquired by us. Our directors must determine that immediately followingthe redemption or repurchase we will be able to satisfy our debts as they fall due and the value of our assets exceeds our liabilities.51Variation of Rights of SharesUnder Delaware corporate law, a corporation may vary the rights of a class of shares with the approval of a majority of the outstanding shares of suchclass, unless the certificate of incorporation provides otherwise. As permitted by British Virgin Islands law, and our memorandum of association and articles ofassociation, if our share capital is divided into more than one class of shares, we may vary the rights attached to any class only with the consent in writing ofholders of not less than threefourths of the issued shares of that class and holders of not less than threefourths of the issued shares of any other class of shareswhich may be affected by the variation.Removal of DirectorsUnder Delaware corporate law, a director of a corporation with a classified board may be removed only for cause with the approval of a majority of theoutstanding shares entitled to vote, unless the certificate provides otherwise. As permitted by British Virgin Islands law and our memorandum of association andarticles of association, directors may be removed by resolution of directors or resolution of shareholders.MergersUnder the BVI Act, two or more companies may merge or consolidate in accordance with the statutory provisions. A merger means the merging of two ormore constituent companies into one of the constituent companies, and a consolidation means the uniting of two or more constituent companies into a newcompany. In order to merger or consolidate, the directors of each constituent company must approve a written plan of merger or consolidation which must beauthorized by a resolution of shareholders.Shareholders not otherwise entitled to vote on the merger or consolidation may still acquire the right to vote if the plan of merger or consolidation containsany provision which, if proposed as an amendment to the memorandum association or articles of association, would entitle them to vote as a class or series on theproposed amendment. In any event, all shareholders must be given a copy of the plan of merger or consolidation irrespective of whether they are entitled to vote atthe meeting or consent to the written resolution to approve the plan of merger or consolidation.Inspection of Books and RecordsUnder Delaware corporate law, any shareholder of a corporation may for any proper purpose inspect or make copies of the corporation’s stock ledger, list ofshareholders and other books and records. Holders of our shares have no general right under British Virgin Islands law to inspect or obtain copies of our list ofshareholders or our corporate records. However, we will provide holders of our shares with annual audited financial statements. See “Where You Can FindAdditional Information.”Conflict of InterestThe BVI Act provides that a director shall, after becoming aware that he is interested in a transaction entered into or to be entered into by the company,disclose that interest to the board of directors of the company. The failure of a director to disclose that interest does not affect the validity of a transaction enteredinto by the director or the company, so long as the director’s interest was disclosed to the board prior to the company’s entry into the transaction or was notrequired to be disclosed (for example where the transaction is between the company and the director himself or is otherwise in the ordinary course of business andon usual terms and conditions). As permitted by British Virgin Islands law and our memorandum of association and articles of association, a director interested in aparticular transaction may vote on it, attend meetings at which it is considered, and sign documents on our behalf which relate to the transaction.52Transactions with Interested ShareholdersDelaware corporate law contains a business combination statute applicable to Delaware public corporations whereby, unless the corporation hasspecifically elected not to be governed by such statute by amendment to its certificate of incorporation, it is prohibited from engaging in certain businesscombinations with an “interested shareholder” for three years following the date that such person becomes an interested shareholder. An interested shareholdergenerally is a person or group who or that owns or owned 15% or more of the target’s outstanding voting stock within the past three years. This has the effect oflimiting the ability of a potential acquirer to make a twotiered bid for the target in which all shareholders would not be treated equally. The statute does not apply if,among other things, prior to the date on which such shareholder becomes an interested shareholder, the board of directors approves either the businesscombination or the transaction that resulted in the person becoming an interested shareholder. This encourages any potential acquirer of a Delaware publiccorporation to negotiate the terms of any acquisition transaction with the target’s board of directors.British Virgin Islands law has no comparable provision. As a result, we cannot avail ourselves of the types of protections afforded by the Delawarebusiness combination statute. However, although British Virgin Islands law does not regulate transactions between a company and its significant shareholders, itdoes provide that such transactions must be entered into bona fide in the best interests of the company and not with the effect of constituting a fraud on theminority shareholders.Independent DirectorsThere are no provisions under Delaware corporate law or under the BVI Act that require a majority of our directors to be independent.Cumulative VotingUnder Delaware corporate law, cumulative voting for elections of directors is not permitted unless the company’s certificate of incorporation specificallyprovides for it. Cumulative voting potentially facilitates the representation of minority shareholders on a board of directors since it permits the minority shareholderto cast all the votes to which the shareholder is entitled on a single director, which increases the shareholder’s voting power with respect to electing such director.There are no prohibitions to cumulative voting under the laws of the British Virgin Islands, but our memorandum of association and articles of association do notprovide for cumulative votingAntitakeover Provisions in Our Memorandum of association and articles of associationSome provisions of our memorandum of association and articles of association may discourage, delay or prevent a change in control of our company ormanagement that shareholders may consider favorable, including provisions that authorize our board of directors to issue preference shares in one or more seriesand to designate the price, rights, preferences, privileges and restrictions of such preference shares.C. MATERIAL CONTRACTS.On January 25, 2018, the Company executed an Asset Exchange Agreement (“AEA”) with C Media Limited, a corporation organized under the laws of theCayman Islands (“C Media”), whereby the Company agreed to purchase all the capital stock and equity interests of LK Technology Ltd, together with its whollyowned subsidiaries MMB Limited and Mobile Media (China) Limited and all respective subsidiaries from C Media in exchange for (i) 185,412,599 ordinary shares ofthe Company, par value $0.01 per share (“Ordinary Shares”), (ii) 1,000,000 preferred shares of Kingtone (“Preferred Shares”) and (iii) all issued and outstandingcapital stock or equity interests of the Company’s subsidiary, Topsky InfoTech Holdings Pte Ltd., and its whollyowned subsidiary Xi’an Softech Co., Ltd.,including all entities effectively controlled by Xi’an Softech Co., Ltd. through contractual arrangements and variable business entities.To consummate the contemplated transactions described above, the Company obtained shareholder consent at a special meeting held on May 20, 2018, (i)to authorize 1,000,000 Preferred Shares, (ii) to authorize additional Ordinary Shares so that total authorized Ordinary Shares is equal to 250,000,000 shares, (iii) to listsuch Ordinary Shares on NASDAQ, and (iv) to approve the transactions contemplated in the Asset Exchange Agreement. Additionally, NASDAQ needed toapprove the contemplated transactions prior to consummation thereof. C Media had the right to terminate the AEA if the closing had not occurred (other thanthrough the failure of C Media to comply fully with its obligations under the AEA) on or before July 31, 2018. The transactions contemplated by the AEA wereconsummated on August 17, 2018.53On January 25, 2018, five shareholders of the Company including its largest shareholder and its Chief Executive Officer executed a Securities PurchaseAgreement, whereby such shareholders agreed to sell a total of 617,988 Ordinary Shares and 282,694 American Depository Shares of the Company to Redstone YYLManagement Limited, a company incorporated in the British Virgin Islands, in exchange for an aggregate purchase price of $1,897,860.09.On August 25, 2018, LK Technology entered into a Stock Purchase Agreement (the “Agreement”) with the shareholders (“Shareholders”) of SuperengineHoldings Limited, a limited liability company organized under the laws of the British Virgin Islands (the “Superengine”), pursuant to which LK Technology acquiredall of the issued and outstanding capital stock of Superengine for an aggregate purchase price of US$60 million (the “Purchase Price”), which are paid by theissuance of our Ordinary Shares in an amount equal to the quotient of (x) the Purchase Price divided by (y) the average of the closing prices of the Ordinary Shareson the NASDAQ Capital Market over the 12 months period preceding July 31, 2018. We are a party to the Agreement in connection with the issuance of theOrdinary Shares and certain other limited purposes.D. EXCHANGE CONTROLS.This section sets forth a summary of the most significant regulations or requirements that affect our business activities in China or our shareholders’ rightto receive dividends and other distributions from us.Regulations on Internet Content ProvidersThe Administrative Measures on Internet Information Services, or the Internet Content Measures, which was promulgated by the State Council onSeptember 25, 2000 and amended on January 8, 2011, set out guidelines on the provision of internet information services. The Internet Content Measures specifiesthat internet information services regarding news, publications, education, medical and health care, pharmacy and medical appliances, among other things, arerequired to be examined, approved and regulated by the relevant authorities. Internet information providers are prohibited from providing services beyond thoseincluded in the scope of their licenses or filings. Furthermore, the Internet Content Measures specifies a list of prohibited content. Internet information providers areprohibited from producing, copying, publishing or distributing information that is humiliating or defamatory to others or that infringes the legal rights of others.Internet information providers that violate such prohibition may face criminal charges or administrative sanctions. Internet information providers must monitor andcontrol the information posted on their websites. If any prohibited content is found, they must remove the content immediately, keep a record of such content andreport to the relevant authorities.The Internet Content Measures classifies internet information services into commercial internet information services and noncommercial internetinformation services. Commercial internet information services refer to services that provide information or services to internet users with charge. A provider ofcommercial internet information services must obtain an ICP License.Regulations on Internet Audiovideo Program ServicesOn December 20, 2007, the MII and the State Administration of Press, Publication, Radio, Film and Television, or the SAPPRFT, jointly issued theAdministrative Provisions for the Internet AudioVideo Program Service, or the Audiovideo Program Provisions, which came into effect on January 31, 2008 andwas amended on August 28, 2015. The Audiovideo Program Provisions defines “internet audiovideo program services” as producing, editing and integrating ofaudiovideo programs, supplying audiovideo programs to the public via the internet, and providing audiovideo programs uploading and transmission services to athird party. Entities providing internet audiovideo programs services must obtain an internet audiovideo program transmission license. Applicants for such licensesshall be stateowned or statecontrolled entities unless an internet audiovideo program transmission license has been obtained prior to the effectiveness of theAudiovideo Program Provisions in accordance with the thenineffect laws and regulations. In addition, foreigninvested enterprises are not allowed to engage inthe abovementioned services. According to the Audiovideo Program Provisions and other relevant laws and regulations, audiovideo programs provided by theentities supplying Internet audiovideo program services shall not contain any illegal content or other content prohibited by the laws and regulations, such as anycontent against the basic principles in the PRC Constitution, any content that damages the sovereignty of the country or national security, and any content thatdisturbs social order or undermine social stability. An audiovideo program that has already been broadcast shall be retained in full for at least 60 days. Movies,television programs and other media content used as Internet audiovideo programs shall comply with relevant administrative regulations on programs broadcaststhrough radio, movie and television channels. Entities providing services related to Internet audiovideo programs shall immediately delete the audiovideoprograms violating laws and regulations, keep relevant records, report relevant authorities and implement other regulatory requirements.54The Categories of the Internet AudioVideo Program Services, or the Audiovideo Program Categories, promulgated by SAPPRFT on March 10, 2017,classifies internet audio/video programs into four categories: (I) Category I internet audio/video program service, which is carried out with a form of radio station ortelevision station; (II) Category II internet audio/video program service, including (a) rebroadcasting service of current political news audio/video programs; (b)hosting, interviewing, reporting and commenting service of arts, entertainment, technology, finance and economics, sports, education and other specializedaudio/video programs; (c) producing (interviewing not included) and broadcasting service of arts, entertainment, technology, finance and economics, sports,education and other specialized audio/video programs; (d) producing and broadcasting service of internet films/dramas; (e) aggregating and broadcasting service offilms, television dramas and cartoons; (f) aggregating and broadcasting service of arts, entertainment, technology, finance and economics, sports, education andother specialized audio/video programs; and (g) live audio/video broadcasting service of cultural activities of common social organizations, sport events or otherorganization activities; and (III) Category III internet audio/video program service, including (a) aggregating service of online audio/video contents, and (b) rebroadcasting service of the audio/video programs uploaded by internet users; and (IV) Category III internet audio/video program service, including (a) rebroadcasting of the radio/television program channels; and (b) rebroadcasting of internet audio/video program channels.On May 27, 2016, the SAPPRFT issued the Notice on Relevant Issues concerning Implementing the Approval Works of Upgrading Mobile Internet AudioVideo Program Service, or the Mobile AudioVideo Program Notice. The Mobile AudioVideo Program Notice provides that the mobile Internet audiovideo programservices shall be deemed Internet audiovideo program service. Entities which have obtained the approvals to provide the Internet audiovideo program servicesmay use mobile WAP websites or mobile applications to provide audiovideo program services. Entities with regulatory approvals may operate mobile applicationsto provide the audiovideo program services The types of the programs shall be within the permitted scope as provided in the licenses and such mobile applicationsshall be filed with the SAPPRFT.Regulations on Production and Operation of Radio/Television ProgramsOn July 19, 2004, the SAPPRFT promulgated the Administrative Measures on the Production and Operation of Radio and Television Programs, or the Radioand Television Program Production Measures, which came into effect on August 20, 2004 and was amended on August 28, 2015. The Radio and Television ProgramProduction Measures provides that any business that produces or operates radio or television programs must first obtain a Radio and Television ProgramProduction and Operation Permit. Entities holding such permits shall conduct their business within the permitted scope as provided in their permits. In addition,foreigninvested enterprises are not allowed to engage in the abovementioned services.Regulations on Online Advertising ServicesOn April 24, 2015, the Standing Committee of the National People’s Congress enacted the Advertising Law of the People’s Republic of China, or the NewAdvertising Law, effective on September 1, 2015. The New Advertising Law increases the potential legal liability of advertising services providers and strengthensregulations of false advertising. On July 4, 2016, the State Administration for Industry and Commerce, or the SAIC, issued the Interim Measures of theAdministration of Online Advertising, or the SAIC Interim Measures, effective on September 1, 2016. The New Advertising Law and the SAIC Interim Measuresrequire that online advertisements may not affect users’ normal internet use and internet popup ads must display a “close” sign prominently and ensure onekeyclosing of the popup windows. The SAIC Interim Measures provides that all online advertisements must be marked “Advertisement” so that viewers can easilyidentify them as such. Moreover, the SAIC Interim Measures treats paid search results as advertisements that are subject to PRC advertisement laws, and requiresthat paid search results be conspicuously identified on search result pages as advertisements. The New Advertising Law and SAIC Interim Measures require us toconduct more stringent examination and monitoring of our advertisers and the content of their advertisements.55Regulations on Online GamesIn September 2009, the GAPP (currently known as the SAPPRFT), together with the National Copyright Administration, and the National Office ofCombating Pornography and Illegal Publications jointly issued the Notice on Further Strengthening on the Administration of Preexamination and Approval ofOnline Game and the Examination and Approval of Imported Online Game, or the Circular 13. The Circular 13 states that foreign investors are not permitted to investin online game operating businesses in the PRC via wholly foreignowned entities, Sinoforeign equity joint ventures or cooperative joint ventures or to exercisecontrol over or participate in the operation of domestic online game businesses through indirect means, such as other joint venture companies or contractual ortechnical arrangements. If the our contractual arrangements were deemed under the Circular 13 to be an “indirect means” for foreign investors to exercise controlover or participate in the operation of a domestic online game business, our contractual arrangements might be challenged by the SAPPRFT. We are not aware ofany online game companies which use the same or similar contractual arrangements having been challenged by the SAPPRFT as using those contractualarrangements as an “indirect means” for foreign investors to exercise control over or participate in the operation of a domestic online game business or having beenpenalized or ordered to terminate operations since the Circular 13 became effective. However it is unclear whether and how the Circular 13 might be interpreted orimplemented in the future. See “Risk Factors—If the PRC government finds that the agreements that establish the structure for operating certain of our operations inChina do not comply with PRC regulations relating to the relevant industries, or if these regulations or the interpretation of existing regulations change in the future,we could be subject to severe penalties or be forced to relinquish our interests in those operations.”The Interim Measures for the Administration of Online Games, or the Online Game Measures, issued by the MOC, which took effect on August 1, 2010 andamended on December 15, 2017, regulates a broad range of activities related to the online games business, including the development, production and operation ofonline games, the issuance of virtual currencies used for online games, and the provision of virtual currency trading services. The Online Game Measures providesthat any entity that is engaged in online game operations must obtain an Network Cultural Business Permit, and require the content of an imported online game to beexamined and approved by the MOC prior to the game’s launch and require a domestic online game to be filed with the MOC within 30 days after its launch. TheNotice of the Ministry of Culture on the Implementation of the Interim Measures for the Administration of Online Games, which was issued by the MOC on July 29,2010 to implement the Online Game Measures, (i) requires online game operators to protect the interests of online game users and specifies that certain terms thatmust be included in service agreements between online game operators and the users of their online games, (ii) requires content review of imported online gamesand filing procedures for domestic online games, (iii) emphasizes the protection of minors playing online games, and (iv) requests online game operators to promoterealname registration by their game users.Regulations on Information Security, Censorship and PrivacyThe Standing Committee of the National People’s Congress, China’s national legislative body, enacted the Decisions on the Maintenance of InternetSecurity on December 28, 2000 that may subject persons to criminal liabilities in China for any attempt to use the internet to: (i) gain improper entry to a computer orsystem of strategic importance; (ii) disseminate politically disruptive information; (iii) leak state secrets; (iv) spread false commercial information or (v) infringe uponintellectual property rights. In 1997, the Ministry of Public Security issued the Administration Measures on the Security Protection of Computer InformationNetwork with International Connections which prohibits using the internet to leak state secrets or to spread socially destabilizing materials. If an ICP license holderviolates these measures, the PRC government may revoke its ICP license and shut down its websites. Pursuant to the Ninth Amendment to the Criminal Law issuedby the Standing Committee of the National People’s Congress on August 29, 2015, effective on November 1, 2015, any ICP provider that fails to fulfill the obligationsrelated to internet information security as required by applicable laws and refuses to take corrective measures, will be subject to criminal liability for (i) any largescale dissemination of illegal information; (ii) any severe effect due to the leakage of users’ personal information; (iii) any serious loss of evidence of criminalactivities; or (iv) other severe situations, and any individual or entity that (i) sells or provides personal information to others unlawfully or (ii) steals or illegallyobtains any personal information will be subject to criminal liability in severe situations.56The Cybersecurity Law of the PRC, or the Cybersecurity Law, which was promulgated on November 7, 2016 by the Standing Committee of the NationalPeople’s Congress and came into effect on June 1, 2017, provides that network operators shall meet their cyber security obligations and shall take technicalmeasures and other necessary measures to protect the safety and stability of their networks. Under the Cybersecurity Law, network operators are subject to varioussecurity protectionrelated obligations, including: (i) network operators shall comply with certain obligations regarding maintenance of the security of internetsystems; (ii) network operators shall verify users’ identities before signing agreements or providing certain services such as information publishing or realtimecommunication services; (iii) when collecting or using personal information, network operators shall clearly indicate the purposes, methods and scope of theinformation collection, the use of information collection, and obtain the consent of those from whom the information is collected; (iv) network operators shall strictlypreserve the privacy of user information they collect, and establish and maintain systems to protect user privacy; (v) network operators shall strengthenmanagement of information published by users, and when they discover information prohibited by laws and regulations from publication or dissemination, theyshall immediately stop dissemination of that information, including taking measures such as deleting the information, preventing the information from spreading,saving relevant records, and reporting to the relevant governmental agencies.Regulations on Intellectual Property RightsRegulations on CopyrightThe Copyright Law of the PRC, or the Copyright Law, which took effect on June 1, 1991 and was amended in 2001 and in 2010, provides that Chinesecitizens, legal persons, or other organizations shall, whether published or not, own copyright in their copyrightable works, which include, among others, works ofliterature, art, natural science, social science, engineering technology and computer software. Copyright owners enjoy certain legal rights, including right ofpublication, right of authorship and right of reproduction. The Copyright Law as revised in 2010 extends copyright protection to Internet activities, productsdisseminated over the Internet and software products. In addition, Copyright Law provides for a voluntary registration system administered by the China CopyrightProtection Center, or the CPCC. According to the Copyright Law, an infringer of the copyrights shall be subject to various civil liabilities, which include ceasinginfringement activities, apologizing to the copyright owners and compensating the loss of copyright owner. Infringers of copyright may also subject to fines and/oradministrative or criminal liabilities in severe situations.The Computer Software Copyright Registration Measures, or the Software Copyright Measures, promulgated by the State Council on December 20, 2001and amended on January 30, 2013, regulates registrations of software copyright, exclusive licensing contracts for software copyright and assignment agreements.The National Copyright Administration, or the NCA administers software copyright registration and the CPCC, is designated as the software registration authority.The CPCC shall grant registration certificates to the Computer Software Copyrights applicants which meet the requirements of both the Software CopyrightMeasures and the Computer Software Protection Regulations (Revised in 2013).The Provisions of the Supreme People’s Court on Certain Issues Related to the Application of Law in the Trial of Civil Cases Involving Disputes onInfringement of the Information Network Dissemination Rights specifies that disseminating works, performances or audiovideo products by the internet users orthe internet service providers via the internet without the permission of the copyright owners shall be deemed to have infringed the right of dissemination of thecopyright owner.57The Measures for Administrative Protection of Copyright Related to Internet, which was jointly promulgated by the NCA and the MIIT on April 29, 2005and became effective on May 30, 2005, provides that upon receipt of an infringement notice from a legitimate copyright holder, an ICP operator must take remedialactions immediately by removing or disabling access to the infringing content. If an ICP operator knowingly transmits infringing content or fails to take remedialactions after receipt of a notice of infringement that harms public interest, the ICP operator could be subject to administrative penalties, including an order to ceaseinfringing activities, confiscation by the authorities of all income derived from the infringement activities, or payment of fines.On May 18, 2006, the State Council promulgated the Regulations on the Protection of the Right to Network Dissemination of Information (as amended in2013). Under these regulations, an owner of the network dissemination rights with respect to written works or audio or video recordings who believes thatinformation storage, search or link services provided by an Internet service provider infringe his or her rights may require that the Internet service provider delete, ordisconnect the links to, such works or recordings.Patent LawsAccording to the Patent Law of the PRC (Revised in 2008), the State Intellectual Property Office is responsible for administering patent law in the PRC. Thepatent administration departments of provincial, autonomous region or municipal governments are responsible for administering patent law within their respectivejurisdictions. The Chinese patent system adopts a firsttofile principle, which means that when more than one person file different patent applications for the sameinvention, only the person who files the application first is entitled to obtain a patent of the invention. To be patentable, an invention or a utility model must meetthree criteria: novelty, inventiveness and practicability. A patent is valid for twenty years in the case of an invention and ten years in the case of utility models anddesigns.Trademark LawsTrademarks are protected by the Trademark Law of the PRC (Revised in 2013) which was adopted in 1982 and subsequently amended in 1993, 2001 and 2013respectively as well as by the Implementation Regulations of the PRC Trademark Law adopted by the State Council in 2002 and as most recently amended on April29, 2014. The Trademark Office under the SAIC handles trademark registrations. The Trademark Office grants a tenyear term to registered trademarks and the termmay be renewed for another tenyear period upon request by the trademark owner. A trademark registrant may license its registered trademarks to another party byentering into trademark license agreements, which must be filed with the Trademark Office for its record. As with patents, the Trademark Law has adopted a firsttofile principle with respect to trademark registration. If a trademark applied for is identical or similar to another trademark which has already been registered or subjectto a preliminary examination and approval for use on the same or similar kinds of products or services, such trademark application may be rejected. Any personapplying for the registration of a trademark may not injure existing trademark rights first obtained by others, nor may any person register in advance a trademark thathas already been used by another party and has already gained a “sufficient degree of reputation” through such party’s use.Regulations on Domain NamesThe MIIT promulgated the Measures on Administration of Internet Domain Names, or the Domain Name Measures, on August 24, 2017, which took effecton November 1, 2017 and replaced the Administrative Measures on China Internet Domain Name promulgated by MII on November 5, 2004. According to theDomain Name Measures, the MIIT is in charge of the administration of PRC internet domain names. The domain name registration follows a firsttofile principle.Applicants for registration of domain names shall provide the true, accurate and complete information of their identities to domain name registration serviceinstitutions. The applicants will become the holder of such domain names upon the completion of the registration procedure.Relevant Regulations of the Hightech EnterpriseThe Ministry of Information Industry, the Ministry of Science and Technology and the State Tax Bureau collectively promulgated and issued the“Certifying Standard and Managing Measures for Hightech Enterprises” and “the Hightech Areas of Main National Support” on April 14, 2008 to certify the Hightech enterprise and encourage and support the development of the Chinese Hightech enterprises. Under the Hightech Enterprises Measures, the enterprise canenjoy the favorable tax policy when it is certified as a Hightech enterprise by the Ministry of Information Industry, the Ministry of Science and Technology and theState Tax Bureau or with its provincial branch according to the stipulated standard. The software and computer and network technology are recognized as the mainnational supported Hightech field. Kingtone Information is a Hightech enterprise and enjoys a favorable income tax rate of 15%.58Laws and Regulations of Intellectual Property RightsChina has adopted legislation governing intellectual property rights, including patents, copyrights and trademarks. China is a signatory to the maininternational conventions on intellectual property rights and became a member of the Agreement on Trade Related Aspects of Intellectual Property Rights upon itsaccession to the WTO in December 2001.PatentsThe “Patent Law of the People’s Republic of China” promulgated by the Standing Committee of the National People's Congress, adopted in 1985 andrevised in 1992, 2001 and 2008, protects registered patents. The State Intellectual Property Office of PRC handles granting patent rights, providing for a twentyyearpatent term for inventions and a tenyear patent term for utility models and designs. As we disclosed in Item 4, of this transition report on Form 20F, throughKingtone Information, we have been granted one invention patent “wireless video transmission system based on BREW platform” by the State Intellectual PropertyOffice (“SIPO”) of PRC on September 23, 2009 and therefore such invention is entitled to all the protections provided under the Patent Law for twenty years.Computer Software Copyright and AdministrationOn December 20, 2001, the State Council of PRC issued the “Regulation for Computer Software Protection of the People’s Republic of China” (the“Regulation for Computer Software Protection”) which became effective on January 1, 2002 to protect the interests of copyright owners, to promote the research andapplication and to encourage the development of the Chinese software industry. Under the Regulation for Computer Software Protection, natural persons, legalpersons or any other organizations shall have a copyright on the software developed by such persons no matter whether such software has been published. Theprotection period of software copyrights owned by the legal person or other organization is fifty years and expires on December 31 of the fiftieth year from the initialpublication date of such computer software. Currently, Kingtone Information has twelve registration certificates for software copyrights.TrademarksThe “Trademark Law of the People’s Republic of China” promulgated by the State Council of PRC, adopted in 1982 and revised in 1993 and 2001, protectsregistered trademarks. The Trademark Office under the Chinese State Administration for Industry and Commerce handles trademark registrations and grants a termof ten years to registered trademarks which are renewable for another ten years after the application to the Trademark Office by the owners of the trademarks.Trademark license agreements must be filed with the Trademark Office for record. China has a “firsttoregister” system that requires no evidence of prior use orownership. Kingtone Information has its registered trademarks as described in Item 4 of this transition report on Form 20F. Accordingly, such trademarks areentitled to the protection under the Trademark Law.Foreign Currency ExchangeOn August 29, 2008, the SAFE issued the Notice of the General Affairs Department of the State Administration of Foreign Exchange on the RelevantOperating Issues concerning the Improvement of the Administration of Payment and Settlement of Foreign Currency Capital of Foreignfunded Enterprises, orCircular 142. Pursuant to Circular 142, RMB converted from the foreign currencydenominated capital of a foreigninvested company may only be used for purposeswithin the business scope approved by the applicable governmental authority and may not be used for equity investments within the PRC unless specificallyprovided for otherwise. The use of such Renminbi capital may not be changed without SAFE’s approval and may not in any case be used to repay Renminbi loans ifthe proceeds of such loans have not been used.59See “Risk Factors — Risks Related to Doing Business in China — PRC regulation of loans and direct investment by offshore holding companies to PRCentities may delay or prevent us from using the proceeds of our initial public offering to make loans or additional capital contributions to our PRC operatingsubsidiaries, which could materially and adversely affect our liquidity and our ability to fund and expand our business”.Dividend DistributionWe are a British Virgin Islands holding company and substantially all of our operations are conducted through LK Technology. We rely on dividends andother distributions from our LK Technology and its subsidiaries to provide us with our cash flow and allow us to pay dividends on the shares underlying our ADSsand meet our other obligations. The principal regulations governing distribution of dividends paid by wholly foreignowned enterprises include:1.Wholly ForeignOwned Enterprise Law (1986), as amended; and2.Implementation Rules on Wholly ForeignOwned Enterprise Law (1990), as amended.Under these regulations, wholly foreignowned enterprises in China may pay dividends only out of their accumulated profits, if any, determined inaccordance with PRC accounting standards and regulations. In addition, wholly foreignowned enterprises in China are required to set aside at least 10% of theiraftertax profit based on PRC accounting standards each year to its general reserves until the accumulative amount of such reserves reach 50% of its registeredcapital. These reserves are not distributable as cash dividends. The board of directors of a FIE has the discretion to allocate a portion of its aftertax profits to staffwelfare and bonus funds, which may not be distributed to equity owners except in the event of liquidation.Regulation of Foreign Exchange in Certain Onshore and Offshore TransactionsIn October 2005, the SAFE issued the Notice on Issues Relating to the Administration of Foreign Exchange in Fundraising and Return InvestmentActivities of Domestic Residents Conducted via Offshore Special Purpose Companies, or SAFE Notice 75, which became effective as of November 1, 2005, and wasfurther supplemented by two implementation notices issued by the SAFE on November 24, 2005 and May 29, 2007, respectively. Under Circular 75, prior registrationwith the local SAFE branch is required for PRC residents to establish or to control an offshore company for the purposes of financing that offshore company withassets or equity interests in an onshore enterprise located in the PRC. An amendment to the registration or filing with the local SAFE branch by such PRC resident isalso required for the injection of equity interests or assets of an onshore enterprise in the offshore company or overseas funds raised by such offshore company, orany other material change with respect to the offshore company in connection with any increase or decrease of capital, transfer of shares, merger, division, equityinvestment, debt investment, or creation of any security interest over any assets located in the PRC.Under SAFE Notice 75, PRC residents are further required to repatriate into the PRC all of their dividends, profits or capital gains obtained from theirshareholdings in the offshore entity within 180 days of their receipt of such dividends, profits or capital gains. The registration and filing procedures under SAFENotice 75 are prerequisites for other approval and registration procedures necessary for capital inflow from the offshore entity, such as inbound investments orshareholders loans, or capital outflow to the offshore entity, such as the payment of profits or dividends, liquidating distributions, equity sale proceeds, or thereturn of funds upon a capital reduction. Therefore, failure to comply with such registration may subject us to certain restrictions on, including but not limited to, theincrease of the registered capital of our PRC subsidiary, making loans to our PRC subsidiary, and making distributions to us from our onshore companies.Regulations of Overseas Investments and ListingsOn August 8, 2006, six PRC regulatory agencies, including the MOFCOM, the State Assets Supervision and Administration Commission, the StateAdministration for Taxation, the State Administration for Industry and Commerce, the CSRC and the SAFE, jointly adopted the New M&A Rule, which becameeffective on September 8, 2006. This regulation, among other things, includes provisions that purport to require that an offshore SPV formed for purposes ofoverseas listing of equity interests in PRC companies and controlled directly or indirectly by PRC companies or individuals obtain the approval of the CSRC prior tothe listing and trading of such SPV’s securities on an overseas stock exchange.60On September 21, 2006, the CSRC published on its official website procedures regarding its approval of overseas listings by SPVs. The CSRC approvalprocedures require the filing of a number of documents with the CSRC and it would take several months to complete the approval process.The application of the New M&A Rule with respect to overseas listings of SPVs remains unclear with no consensus currently existing among the leadingPRC law firms regarding the scope of the applicability of the CSRC approval requirement.We believe that, based on our understanding of the current PRC laws, regulations and rules and the procedures announced on September 21, 2006, there isno requirement in this regulation that would require an application to be submitted to the MOFCOM or the CSRC for the approval of the listing and trading of ourADSs on the NASDAQ Capital Market.See “Risk Factors — Risks Related to Doing Business in China — If we were required to obtain the prior approval of the China Securities RegulatoryCommission, or CSRC, of the listing and trading of our ADSs on the NASDAQ Capital Market, we may face regulatory actions or other sanctions from the CSRC orother PRC regulatory agencies.”E. TAXATIONThe following discussion sets forth the material British Virgin Islands, PRC and U.S. federal income tax consequences of an investment in our ADSs andthe ordinary shares represented by our ADSs, sometimes referred to collectively as the “securities”. It is based upon laws and relevant interpretations thereof ineffect as of the date of this report, all of which are subject to change. This discussion does not deal with all possible tax consequences relating to an investment inthe securities, such as the tax consequences under state, local and other tax laws. As used in this discussion, “we,” “our” and “us” refers only to LuokungTechnology Ltd.British Virgin Islands TaxationUnder the law of the British Virgin Islands as currently in effect, a holder of the securities who is not a resident of the British Virgin Islands is not liable forBritish Virgin Islands tax on dividends paid with respect to the securities and all holders of the securities are not liable to the British Virgin Islands for tax on gainsrealized during that year on the sale or disposal of such ordinary shares. The British Virgin Islands does not impose a withholding tax on dividends paid by acompany incorporated or reregistered under the BVI Act.There are no capital gains, gift or inheritance taxes levied by the British Virgin Islands on companies incorporated under the BVI Act. In addition, shares ofcompanies incorporated under the BVI Act are not subject to transfer taxes, stamp duties or similar charges.There is no income tax treaty or convention currently in effect between the United States and the British Virgin Islands or between China and the BritishVirgin Islands.61People’s Republic of China TaxationIn 2007, the PRC National People’s Congress enacted the new Enterprise Income Tax Law (the “EIT Law”), which became effective on January 1, 2008. Thenew EIT Law imposes a single uniform income tax rate of 25% on all Chinese enterprises, including foreigninvested enterprises, and levies a withholding tax rate of10% on dividends payable by Chinese subsidiaries to their foreign shareholders unless any such foreign shareholders’ jurisdiction of incorporation has a tax treatywith China that provides for a different withholding agreement. Under the new EIT Law, enterprises established outside China but deemed to have a “de factomanagement body” within the country may be considered “resident enterprises” for Chinese tax purposes and, therefore, may be subject to an enterprise income taxrate of 25% on their worldwide income. Pursuant to the implementation rules of the new EIT Law, a “de facto management body” is defined as a body that hasmaterial and overall management control over the business, personnel, accounts and properties of the enterprise. Although substantially all members of ourmanagement are located in China, it is unclear whether Chinese tax authorities would require (or permit) us to be treated as PRC resident enterprises. If we aredeemed a Chinese tax resident enterprise, we may be subject to an enterprise income tax rate of 25% on our worldwide income, excluding dividends received directlyfrom another Chinese tax resident enterprise, as well as PRC enterprise income tax reporting obligations. If we are not deemed to be a Chinese tax resident enterprise,we may be subject to certain PRC withholding taxes. See “Risk Factors — Risks Related to Doing Business in China — Our holding company structure may limit thepayment of dividends.” As a result of such changes, our historical tax rates may not be indicative of our tax rates for future periods and the value of our ADSs orordinary shares may be adversely affected. If we are deemed a PRC resident enterprise and investors’ gain from the sales of the securities and dividends payable byus are deemed sourced from China, such gains and dividends payable by us may be subject to PRC tax. See “Risk Factors — Risks Related to Doing Business inChina — If we were deemed a “resident enterprise” by PRC tax authorities, we could be subject to tax on our global income at the rate of 25% under the New EITLaw and our nonPRC shareholders could be subject to certain PRC taxes.United States Federal Income TaxationGeneralThe following is a discussion of the material U.S. federal income tax consequences to an investor of purchasing, owning and disposing of our securities.This discussion does not address any aspects of U.S. federal gift or estate tax or the state, local or nonU.S. tax consequences of an investment in the securities.YOU SHOULD CONSULT YOUR OWN TAX ADVISORS CONCERNING THE U.S. FEDERAL, STATE, LOCAL AND NONU.S. TAX CONSEQUENCES OFPURCHASING, OWNING AND DISPOSING OF THE SECURITIES IN YOUR PARTICULAR SITUATION.This discussion applies only to those investors that purchase the securities in this offering and that hold the securities as capital assets within the meaningof section 1221 of the Internal Revenue Code of 1986, as amended (the “Code”). This section does not apply to holders that may be subject to special tax rules,including but not limited to:1.dealers in securities or currencies;2.traders in securities that elect to use a marktomarket method of accounting;3.banks, insurance companies or certain financial institutions;4.taxexempt organizations;5.governments or agencies or instrumentalities thereof;6.partnerships or other entities treated as partnerships or other passthrough entities for U.S. federal income tax purposes or persons holding thesecurities through such entities;7.regulated investment companies or real estate investment trusts;8.holders subject to the alternative minimum tax;9.holders that actually or constructively own 10% or more of the total combined voting power of all classes of our shares entitled to vote;10.holders that acquired the securities pursuant to the exercise of employee stock options, in connection with employee stock incentive plans orotherwise as compensation;11.holders that hold the securities as part of a straddle, hedging or conversion transaction; or12.holders whose functional currency is not the U.S. dollar.62This section is based on the Code, its legislative history, existing and proposed U.S. Treasury regulations, published rulings and other administrativeguidance of the U.S. Internal Revenue Service (the “IRS”) and court decisions, all as in effect on the date hereof. These laws are subject to change or differentinterpretation by the IRS or a court, possibly on a retroactive basis.We have not sought, and will not seek, a ruling from the IRS as to any U.S. federal income tax consequence described herein. The IRS may disagree withthe discussion herein, and its determination may be upheld by a court. Moreover, there can be no assurance that future legislation, regulation, administrative rulingsor court decisions will not adversely affect the accuracy of the statements in this discussion.The discussion below of the U.S. federal income tax consequences to “U.S. Holders” will apply to a beneficial owner of the securities that is for U.S. federalincome tax purposes:1.a citizen or resident of the United States;2.a corporation (or other entity treated as a corporation) that is created or organized (or treated as created or3.organized) under the laws of the United States, any state thereof or the District of Columbia;4.an estate whose income is subject to U.S. federal income tax regardless of its source; or5.a trust if (a) a U.S. court can exercise primary supervision over the trust’s administration and one or more U.S.6.persons are authorized to control all substantial decisions of the trust, or (b) if the trust has a valid election in effect under applicable U.S.Treasury regulations to be treated as a U.S. person.If a beneficial owner of the securities is not described as a U.S. Holder and is not an entity treated as a partnership or other passthrough entity for U.S.federal income tax purposes, such owner will be considered a “NonU.S. Holder.” The material U.S. federal income tax consequences applicable specifically to NonU.S. Holders are described below under the heading “Tax Consequences to NonU.S. Holders.”If a partnership (including for this purpose any entity treated as a partnership for U.S. tax purposes) is a beneficial owner of the securities, the U.S. taxtreatment of a partner in the partnership generally will depend on the status of the partner and the activities of the partnership. A holder of the securities that is apartnership or partners in such a partnership should consult their own tax advisors about the U.S. federal income tax consequences of holding and disposing of thesecurities.This discussion assumes that any distributions made (or deemed made) on the securities and any consideration received by a holder in consideration forthe sale or other disposition of the securities will be in U.S. dollars. This discussion also assumes that the representations contained in the Deposit Agreement aretrue and that the obligations in the Deposit Agreement and any related agreement will be complied with in accordance with their terms. Finally, this discussionassumes that each ADS will only represent ordinary shares in us, and will not represent any other type of security, such as a bond, cash or other property.63For U.S. federal income tax purposes, a holder of an ADS will be treated as the beneficial owner of the shares represented by such ADS and an exchange ofan ADS for ordinary shares will not be subject to U.S. federal income tax. The U.S. Treasury has expressed concerns that parties to whom ADSs are prereleased, orintermediaries in the chain of ownership between holders of ADSs and the issuer of the securities underlying the ADSs may be taking actions that are inconsistentwith the claiming of foreign tax credits by U.S. Holders of ADSs. Such actions would also be inconsistent with the claiming of the reduced rate of tax applicable todividends received by certain noncorporate U.S. Holders, including individual U.S. Holders, as described below under “Tax Consequences to U.S.Holders — Taxation of Distributions.” Accordingly, the availability of foreign tax credits or the reduced tax rate for dividends received by certain noncorporate U.S.Holders, including individual U.S. Holders, could be affected by actions taken by parties to whom the ADSs are released, or by future actions by the U.S. Treasury.Tax Consequences to U.S. HoldersTaxation of DistributionsSubject to the passive foreign investment company, or PFIC, rules discussed below, the gross amount of any cash distributions we make with respect to aU.S. Holder in respect of such U.S. Holder’s ADSs or shares will generally be treated as dividend income if the distributions are made from our current oraccumulated earnings and profits, calculated according to U.S. federal income tax principles. Cash dividends will generally be subject to U.S. federal income tax asordinary income on the day the U.S. Holder actually or constructively receives such income. With respect to noncorporate U.S. Holders for taxable years beginningbefore January 1, 2011, dividends may be taxed at the lower applicable longterm capital gains rate provided that (a) our ADSs or shares are readily tradable on anestablished securities market in the United States, or, in the event we are deemed to be a Chinese “resident enterprise” under the EIT Law (as described above under“People’s Republic of China Taxation”), we are eligible for the benefits of the income tax treaty between the United States and the PRC (the “U.S.PRC Tax Treaty”),(b) we are not a PFIC, as discussed below, for either the taxable year in which the dividend was paid or the preceding taxable year, and (c) certain holding periodrequirements are met. Under published IRS authority, ADSs are considered for purposes of clause (a) above to be readily tradable on an established securitiesmarket in the United States only if they are listed on certain exchanges, which presently include the NASDAQ Capital Market. U.S. Holders should consult their owntax advisors regarding the availability of the lower rate for any dividends paid with respect to our ADSs or shares.Dividends will not be eligible for the dividendsreceived deduction allowed to U.S. corporations in respect of dividends received from other U.S.corporations. Generally, if we distribute noncash property as a dividend (other than pro rata distributions of our shares) out of our current or accumulated earningsand profits (as determined for U.S. federal income tax purposes), a U.S. Holder generally will include in income an amount equal to the fair market value of theproperty, on the date that it is distributed.Distributions in excess of current and accumulated earnings and profits, as determined for U.S. federal income tax purposes, will be treated as a nontaxablereturn of capital to the extent of the U.S. Holder’s basis in its shares or ADSs and thereafter as capital gain. However, we do not plan on calculating our earnings andprofits in accordance with U.S. federal income tax principles. U.S. holders therefore should generally assume that any distributions paid by us will be treated asdividends for U.S. federal income tax purposes.If PRC taxes apply to dividends paid by us to a U.S. Holder (see “People’s Republic of China Taxation,” above), such taxes may be treated as foreign taxeseligible for credit against such holder’s U.S. federal income tax liability (subject to certain limitations), and a U.S. Holder may be entitled to certain benefits under theU.S.PRC Tax Treaty. The rules relating to the U.S. foreign tax credit are complex. U.S. Holders should consult their own tax advisors regarding the creditability ofany such PRC tax and their eligibility for the benefits of the U.S.PRC Tax Treaty.64Taxation of Dispositions of SharesSubject to the PFIC rules discussed below, a U.S. holder that sells or otherwise disposes of its shares will recognize capital gain or loss for U.S. federalincome tax purposes equal to the difference between the amount realized and such U.S. Holder’s tax basis in its shares. Prior to January 1, 2011, capital gains of anoncorporate U.S. holder are generally taxed at a maximum rate of 15% where the property is held for more than one year (and 20% thereafter). The ability to deductcapital losses is subject to limitations.If PRC taxes apply to any gain from the disposition of our shares by a U.S. Holder, such taxes may be treated as foreign taxes eligible for credit against suchholder’s U.S. federal income tax liability (subject to certain limitations), and a U.S. Holder may be entitled to certain benefits under the U.S.PRC Tax Treaty. U.S.Holders should consult their own tax advisors regarding the creditability of any such PRC tax and their eligibility for the benefits of the U.S.PRC Tax Treaty.Passive Foreign Investment CompanyWe do not expect to be a PFIC for U.S. federal income tax purposes for our current tax year or in the foreseeable future. The determination of whether or notwe are a PFIC in respect of any of our taxable years is a factual determination that cannot be made until the close of the applicable tax year and that is based on thetypes of income we earn and the value and composition of our assets (including goodwill), all of which are subject to change. Therefore, we can make no assurancesthat we will not be a PFIC in respect of our current taxable year or in the future.In general, we will be a PFIC in any taxable year if either:1.at least 75% of our gross income for the taxable year is passive income; or2.at least 50% of the value, determined on the basis of a quarterly average, of our assets is attributable to assets that produce or are held for theproduction of passive income.Passive income includes dividends, interest, royalties, rents (other than certain rents and royalties derived in the active conduct of a trade or business), theexcess of gains over losses from certain types of transactions in commodities, annuities and gains from assets that produce passive income. We will be treated asowning our proportionate share of the assets and earning our proportionate share of the income of any corporation in which we own, directly or indirectly, at least25% (by value) of the stock.If we are treated as a PFIC in any year during which a U.S. Holder owns the securities, and such U.S. Holder did not make a marktomarket election, asdescribed below, the U.S. Holder will be subject to special rules with respect to:1.any gain recognized by the U.S. Holder on the sale or other disposition of its shares; and any excess distribution that we make to the U.S. Holder(generally, the excess of the amount of any distributions to such U.S. Holder during a single taxable year of such U.S. Holder over 125% of theaverage annual distributions received by such U.S. Holder in respect of the shares during the three preceding taxable years of such U.S. Holder or,if shorter, such U.S. Holder holding period for the shares).Under these rules:2.the gain or excess distribution will be allocated ratably over the U.S. Holder’s holding period for the shares;3.the amount allocated to the U.S. Holder’s taxable year in which it realized the gain or excess distribution or to the period in the U.S. Holder’sholding period before the first day of our first taxable year in which we are a PFIC will be taxed as ordinary income;4.the amount allocated to other taxable years (or portions thereof) of the U.S. Holder and included in its holding period will be taxed at the highesttax rate in effect for that year; and5.the interest charge generally applicable to underpayments of tax will be imposed in respect of the tax attributable to each such other taxable yearof the U.S. Holder. 6.Special rules apply for calculating the amount of the foreign tax credit with respect to excess distributions by a PFIC.65Alternatively, if a U.S. Holder, at the close of its taxable year, owns ordinary shares in a PFIC that are treated as marketable stock, the U.S. Holder may makea marktomarket election with respect to such shares for such taxable year. Our shares will be “marketable” to the extent that they remain regularly traded on anational securities exchange, such as the NASDAQ Capital Market. If a U.S. Holder makes this election in a timely fashion, it will not be subject to the PFIC rulesdescribed above. Instead, in general, the U.S. Holder will include as ordinary income each year the excess, if any, of the fair market value of its shares at the end ofthe taxable year over its adjusted basis in its shares. Any ordinary income resulting from this election would generally be taxed at ordinary income tax rates andwould not be eligible for the reduced rate of tax applicable to qualified dividend income. The U.S. Holder will also be allowed to take an ordinary loss in respect ofthe excess, if any, of the adjusted basis of its shares over the fair market value at the end of the taxable year (but only to the extent of the net amount of previouslyincluded income as a result of the marktomarket election). The U.S. Holder’s basis in the shares will be adjusted to reflect any such income or loss amounts. U.S.Holders should consult their own tax advisor regarding potential advantages and disadvantages of making a marktomarket election with respect to their shares.Alternatively, a U.S. Holder of stock in a PFIC may avoid the PFIC tax consequences described above in respect to our or shares by making a timely“qualified electing fund” election to include in income its pro rata share of our net capital gains (as longterm capital gain) and other earnings and profits (asordinary income), on a current basis, in each case whether or not distributed, in the taxable year of the U.S. Holder in which or with which our taxable year ends.However, the qualified electing fund election is available only if the PFIC provides such U.S. Holder with certain information regarding its earnings and profits asrequired under applicable U.S. Treasury regulations. We do not intend to furnish the information that a U.S. Holder would need in order to make a qualified electingfund election. Therefore, U.S. Holders will not be able to make or maintain such election with respect to their or shares.If a U.S. Holder owns our shares or during any year that we are a PFIC, such holder must file U.S. Internal Revenue Service Form 8621 regarding suchholder’s shares or and the gain realized on the disposition of the shares. The reduced tax rate for dividend income, discussed in “Taxation of Distributions,” is notapplicable to dividends paid by a PFIC. U.S. Holders should consult with their own tax advisors regarding reporting requirements with respect to their shares.Tax Consequences to NonU.S. HoldersDividends paid to a NonU.S. Holder in respect of our or shares generally will not be subject to U.S. federal income tax, unless the dividends are effectivelyconnected with the NonU.S. Holder’s conduct of a trade or business within the United States (and, if required by an applicable income tax treaty, are attributable toa permanent establishment or fixed base that such holder maintains in the United States).In addition, a NonU.S. Holder generally will not be subject to U.S. federal income tax on any gain attributable to a sale or other disposition of our or sharesunless such gain is effectively connected with its conduct of a trade or business in the United States (and, if required by an applicable income tax treaty, isattributable to a permanent establishment or fixed base that such holder maintains in the United States) or the NonU.S. Holder is an individual who is present in theUnited States for 183 days or more in the taxable year of sale or other disposition and certain other conditions are met (in which case, such gain from United Statessources generally is subject to tax at a 30% rate or a lower applicable tax treaty rate).Dividends and gains that are effectively connected with the NonU.S. Holder’s conduct of a trade or business in the United States (and, if required by anapplicable income tax treaty, are attributable to a permanent establishment or fixed base in the United States) generally will be subject to tax in the same manner as fora U.S. Holder and, in the case of a NonU.S. Holder that is a corporation for U.S. federal income tax purposes, may also be subject to an additional branch profits taxat a 30% rate or a lower applicable tax treaty rate.66Information Reporting and Backup Withholding In general, information reporting for U.S. federal income tax purposes generally should apply to distributions made on the securities within the UnitedStates to a noncorporate U.S. Holder and to the proceeds from sales and other dispositions of the securities by a noncorporate U.S. Holder to or through a U.S.office of a broker. Payments made (and sales and other dispositions effected at an office) outside the United States generally should be subject to informationreporting in limited circumstances.Dividend payments made to U.S. Holders and proceeds paid from the sale or other disposition the securities may be subject to information reporting to theIRS and possible U.S. federal backup withholding at a current rate of 28%. Certain exempt recipients, such as corporations, are not subject to these informationreporting requirements. Backup withholding will not apply to a U.S. Holder who furnishes a correct taxpayer identification number and makes any other requiredcertification, or who is otherwise exempt from backup withholding. U.S. Holders who are required to establish their exempt status must provide a duly executed IRSForm W9.A NonU.S. Holder generally may eliminate the requirement for information reporting and backup withholding by providing certification of its foreignstatus, under penalties of perjury, on a duly executed applicable IRS Form W8 or by otherwise establishing an exemption.Backup withholding is not an additional tax. Rather, the amount of any backup withholding will be allowed as a credit against a U.S. Holder’s or a nonU.S.Holder’s U.S. federal income tax liability and may entitle such holder to a refund, provided that certain required information is timely furnished to the IRS.PROSPECTIVE PURCHASERS OF OUR SECURITIES SHOULD CONSULT WITH THEIR OWN TAX ADVISORS REGARDING THE APPLICATION OFTHE U.S. FEDERAL INCOME TAX LAWS TO THEIR PARTICULAR SITUATIONS AS WELL AS ANY ADDITIONAL TAX CONSEQUENCES RESULTING FROMPURCHASING, HOLDING OR DISPOSING OF OUR SECURITIES, INCLUDING THE APPLICABILITY AND EFFECT OF THE TAX LAWS OF ANY STATE, LOCALOR NONU.S. JURISDICTION, INCLUDING ESTATE, GIFT, AND INHERITANCE LAWS AND APPLICABLE TAX TREATIES.F. DIVIDENDS AND PAYING AGENTS.Not applicable.G. STATEMENT BY EXPERTS.None.H. DOCUMENTS ON DISPLAY.We previously filed a registration statement on Form F1 (File No. 333166056) with the SEC relating to our initial public offering in May 2010. This transition reportdoes not contain all of the information in the registration statement and the exhibits and financial statements included with the registration statement. References inthis transition report to any of our contracts, agreements or other documents are not necessarily complete, and you should refer to the exhibits attached to theregistration statement for copies of the actual contracts, agreements or documents. In addition, we will file transition reports on Form 20F and submit otherinformation under cover of Form 6K. As a foreign private issuer, we are exempt from the proxy requirements of Section 14 of the Exchange Act and our officers,directors and principal shareholders will be exempt from the insider shortswing disclosure and profit recovery rules of Section 16 of the Exchange Act. You may readand copy the registration statement, the related exhibits and other materials we file with the SEC at the SEC's public reference room in Washington, D.C. at 100 FStreet, Room 1580, N.E., Washington, D.C.20549. You can also request copies of those documents, upon payment of a duplicating fee, by writing to the SEC. Pleasecall the SEC at 1800SEC0330 for further information on the operation of the public reference rooms. The SEC also maintains an Internet site that contains reports,proxy and information statements and other information regarding issuers that file with the SEC. The website address is http://www.sec.gov. You may also request acopy of these filings, at no cost, by writing us at LAB 32, SOHO 3Q, No 9, Guanghua Road, Chaoyang District, Beijing, People’s Republic of China, 100020 ortelephoning us at (86) 1085866721.67I. SUBSIDIARY INFORMATIONFor a listing of our subsidiaries, see “Item 4. Information on the Company – C. Organizational Structure.”ITEM 11. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.Interest Rate RiskAs of December 31, 2017, we had no shortterm or longterm borrowings. If we borrow money in future periods, we may be exposed to interest rate risk. Ourexposure to market risk for changes in interest rates relates primarily to the interest income generated by our cash deposits with our banks and heldtomaturityinvestments. We have not used any derivative financial instruments in our investment portfolio. Interest earnings instruments carry a degree of interest rate risk. Wehave not been exposed, nor do we anticipate being exposed to material risks due to changes in interest rates. However, our future interest income may fall short ofexpectations due to changes in interest rates. Foreign Exchange RiskTranslation adjustments amounted to $90,671 and $387,375 gain as of the fiscal year ended December 31, 2017 and 2016, respectively. The Companytranslated balance sheet amounts with the exception of equity at December 31, 2017 at RMB 6.5342 to $1.00 as compared to RMB 6.9370 to $1.00 at December 31,2016. The Company stated equity accounts at their historical rate. The average translation rates applied to income statement accounts for the fiscal year endedDecember 31, 2017 and 2016 were RMB6.7356 and RMB 6.7153 to US$1.00, respectively. So far, the PRC government has been able to manage a stable exchange ratebetween RMB and the U.S. Dollar. Our future downward translation adjustments may occur and can be significant due to changes in such exchange rate.If we decide to convert our RMB into U.S. dollars for the purpose of making payments for dividends on our ordinary shares or for other business purposes,appreciation of the U.S. dollar against the RMB would have a negative effect on the U.S. dollar amount available to us.The PRC government imposes strict restrictions on PRC resident companies regarding converting RMB into foreign currencies and vice versa under capitalaccount transactions, such as receiving equity investments from outside of the PRC, making equity investments outside of the PRC, borrowing money from orlending money outside of the PRC, and repaying debt or remitting liquidated assets and/or accumulated profits outside of the PRC. These transactions have to beapproved by the relevant PRC government authorities, including but not limited to the commerce bureau, the tax bureau and the State Administration of ForeignExchange, or SAFE, and have to be conducted at banks entrusted by the local SAFE branch. As our business continues to grow, we may need to continuouslyfinance our PRC subsidiaries by raising capital from outside of the PRC. The restriction on converting RMB into foreign currencies, and vice versa, may limit ourability to use capital resources from outside of the PRC. Such restrictions may also limit our ability to remit profits from our PRC subsidiaries outside of the PRC,therefore potentially limiting our ability to pay dividends to our shareholders. In addition, such restrictions will limit our ability to freely transfer temporary excesscash in our or our subsidiaries’ bank accounts in and out of the PRC, therefore limiting our ability to conduct crossborder cash management activities to optimizethe utilization of our cash.InflationAlthough China has experienced an increasing inflation rate, inflation has not had a material impact on our results of operations in recent years. Accordingto the National Bureau of Statistics of China, the change in the consumer price index in China was 0.46%, (0.77%), and 1.16% in 2001, 2002 and 2003, respectively.However, in connection with a 3.9% increase in 2004, the PRC government announced measures to restrict lending and investment in China in order to reduceinflationary pressures in China’s economy. Following the government’s actions, the consumer price index decreased to 1.8% in 2005 and to 1.5% in 2006. In 2007, theconsumer price index increased to 4.8%. In response, China’s central bank, the People’s Bank of China, announced that the bank reserve ratio would rise half apercentage point to 15.5% in an effort to reduce inflation pressures. China’s consumer price index growth rate reached 8.7% year over year in 2008. In 2009 and 2010,the change in the consumer price index in China was minus 0.7% and 3.3%.China consumer price index in November 2017 was 3.8% higher than that of the same period in 2016. China consumer price index in December 2016 was2.4% higher than that of the same period in 2015. China consumer price index in December 2015 was 4.8% higher than that of the same period in 2014. Chinaconsumer price index in December 2014 was 3.3% higher than that of the same period in 2013. The results of the PRC government’s actions to combat inflation aredifficult to predict. Adverse changes in the Chinese economy, if any, will likely impact the financial performance of a variety of industries in China that use, or wouldbe candidates to use, our software products and services.68ITEM 12. DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES.A. DEBT SECURITIES.Not applicable. B. WARRANTS AND RIGHTS.Not applicable.C. OTHER SECURITIES.Not applicable.D. AMERICAN DEPOSITARY SHARES.The Bank of New York Mellon, as depositary (the “Depositary”) for the Company’s ADR facility, notified the owners and holders of the Company’s ADSsthat the ADS facility will terminate effective at 5:00 p.m. (Eastern Time) on September 19, 2018. Under the terms of the Deposit Agreement among the Company, theDepositary and the owners and holders of ADSs of the Company (the “Deposit Agreement”), owners and holders of the Company’s ADSs have until at leastJanuary 21, 2019 to surrender their ADSs to the Depositary for delivery of the underlying ordinary shares of the Company. Subsequent to January 21, 2019, underthe terms of the Deposit Agreement, the Depositary may attempt to sell any ordinary shares remaining on deposit with the Depositary. If the Depositary sells suchunderlying ordinary shares or receives value for such shares, holders must surrender their ADSs to obtain payment of the sale proceeds, net of expenses andapplicable tax and charges. We completed the voluntary delisting of our ADSs from the NASDAQ Capital Market on September 19, 2018.You may hold ADSs either (A) directly (i) by having ADSs registered in your name in the Direct Registration System, or (ii) by having an Americandepositary receipt, also referred to as an ADR, which is a certificate evidencing a specific number of ADSs, registered in your name, or (B) indirectly by holding asecurity entitlement in ADSs through your broker or other financial institution. If you hold ADSs directly, you are a registered ADS holder, also referred to as anADS holder. This description assumes you are an ADS holder. If you hold the ADSs indirectly, you must rely on the procedures of your broker or other financialinstitution to assert the rights of ADS holders described in this section. You should consult with your broker or financial institution to find out what thoseprocedures are.The Direct Registration System, or DRS, is a system administered by The Depository Trust Company, also referred to as DTC, pursuant to which thedepositary may register the ownership of uncertificated ADSs, which ownership will be confirmed by periodic statements sent by the depositary to the registeredholders of uncertificated ADSs.69As an ADS holder, you will not be treated as one of our registered shareholders and you will not have direct shareholder rights. British Virgin Island’s lawgoverns our direct shareholders’ rights. The depositary will be the holder of the shares underlying your ADSs. As a registered holder of ADSs, you will have ADSholder rights. A Deposit Agreement among us, the depositary and you, as an ADS holder, and all other persons indirectly holding ADSs, sets out ADS holder rightsas well as the rights and obligations of the depositary. New York law governs the Deposit Agreement and the ADSs.The following is a summary of the material provisions of the Deposit Agreement. For more complete information, you should read the entire DepositAgreement and the form of ADS, which contains the terms of the ADSs. The Deposit Agreement is filed as an exhibit to our registration statement filed on Form F1.You may obtain the registration statement and the attached Deposit Agreement from the SEC’s website at http://www.sec.gov. You may also obtain a copy of theDeposit Agreement at the SEC’s Public Reference Room, which is located at 100 F Street, NE, Washington, DC 20549. You may obtain information on the operationof the Public Reference Room by calling the SEC at 18007320330. Fees and ExpensesPersons depositing or withdrawing shares or ADS holders must pay:For:$5.00 (or less) per 100 ADSs (or portion of 100 ADSs)Issuance of ADSs, including issuances resulting from a distribution of shares orrights or other propertyCancellation of ADSs for the purpose of withdrawal, including if the DepositAgreement terminates$.05 (or less) per ADSAny cash distribution to ADS holdersA fee equivalent to the fee that would be payable if securities distributed to youhad been shares and the shares had been deposited for issuance of ADSsDistribution of securities distributed to holders of deposited securities whichare distributed by the depositary to ADS holders$.05 (or less) per ADSs per calendar yearDepositary servicesRegistration or transfer feesTransfer and registration of shares on our share register to or from the name ofthe depositary or its agent when you deposit or withdraw sharesExpenses of the depositaryCable, telex and facsimile transmissions (when expressly provided in the DepositAgreement) converting foreign currency to U.S. dollarsTaxes and other governmental charges the depositary or the custodian have topay on any ADS or share underlying an ADS, for example, share transfer taxes,stamp duty or withholding taxesAs necessaryAny charges incurred by the depositary or its agents for servicing the depositedsecuritiesAs necessaryPayment of TaxesHolders of our ADSs are responsible for any taxes or other governmental charges payable on their ADSs or on the deposited securities represented by anyof their ADSs. The depositary may refuse to register any transfer of a holder’s ADSs or allow withdrawal of the deposited securities represented by the ADSs untilsuch taxes or other charges are paid. It may apply payments owed to the holder or sell deposited securities represented by the ADSs to pay any taxes owed and theholder will remain liable for any deficiency. If the depositary sells deposited securities, it will, if appropriate, reduce the number of ADSs to reflect the sale and pay toADS holders any proceeds, or send to ADS holders any property, remaining after it has paid the taxes.70PART IIITEM 13. DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES.None.ITEM 14. MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS.Use of Proceeds.We completed our initial public offering on May 14, 2010 (the “IPO”), which generated net proceeds of approximately $14.6 million. All remaining cash onhand from the proceeds of our IPO was transferred to C Media Limited and its subsidiaries following the completion of the asset exchange transactions on August17, 2018.ITEM 15. CONTROLS AND PROCEDURES.Disclosure Controls and ProceduresOur Chief Executive Officer and Chief Financial Officer have reviewed and evaluated the effectiveness of our disclosure controls and procedures, whichincluded inquiries made to certain other of our employees. The term “disclosure controls and procedures,” as defined in Rules 13a15(e) and 15d15(e) under theExchange Act, means controls and other procedures of a company that are designed to ensure that information required to be disclosed by a company in thereports, such as this report, that it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in theSEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to bedisclosed by a company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the company’s management, including itsprincipal executive and principal financial officers, as appropriate to allow timely decisions regarding required disclosure. Management recognizes that any controlsand procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives and management necessarilyapplies its judgment in evaluating the costbenefit relationship of possible controls and procedures. Based on that evaluation, our Chief Executive Officer and ChiefFinancial Officer have each concluded that, as of December 31, 2017, the Company’s disclosure controls and procedures were not effective due to the materialweakness described in the “Management’s Report on Internal Control over Financial Reporting” section below.Management’s Report on Internal Control Over Financial ReportingOur management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Exchange ActRules 13a15(f) and 15d15(f). Internal control over financial reporting refers to the process designed by, or under the supervision of, our principal executive officerand principal financial officer, and effected by our Board of Directors, management and other personnel, to provide reasonable assurance regarding the reliability offinancial reporting and the preparation of financial statements for external purposes in accordance with U.S. GAAP and includes those policies and procedures that(i) pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of the assets of the Company; (ii)provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with U.S. GAAP, and thatreceipts and expenditures of the Company are being made only in accordance with authorizations of management and directors of the Company; and (iii) providereasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the Company’s assets that could have a materialeffect on the financial statements.71Any system of internal control, no matter how well designed, has inherent limitations. Therefore, even those systems determined to be effective canprovide only reasonable assurance with respect to financial statement preparation and presentation. Because of the inherent limitations of internal control, there is arisk that material misstatements may not be prevented or detected on a timely basis by internal control over financial reporting. However, these inherent limitationsare known features of the financial reporting process. Therefore, it is possible to design into the process safeguards to reduce, though not eliminate, this risk.Management assessed our internal control over financial reporting as of the year ended December 31, 2017. In making this assessment, management usedthe criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in the 2014 report entitled "Internal ControlIntegratedFramework." The COSO framework summarizes each of the components of a company’s internal control system, including (i) the control environment, (ii) riskassessment, (iii) control activities, (iv) information and communication, and (v) monitoring. Based on such assessment, management concluded that its internalcontrol over financial reporting as of December 31, 2017 was not effective because of the following material weakness:Lack of U.S. GAAP expertise. Although our accounting personnel are professional and experienced in accounting requirements and procedures generallyaccepted in the PRC, they do not have sufficient knowledge, experience and training in maintaining our books and records and preparing financial statements inaccordance with U.S. GAAP standards and SEC rules and regulations. The staff needs additional training to become experienced in U.S. GAAPbased reporting,including the skills of U.S. GAAPbased period end closing, consolidation of financial statements, and U.S. GAAP conversion.In order to address the above material weakness, our management plans to take the following steps:We will employ, as needed, outside professionals to provide key accounting personnel ongoing technical trainings to ensure their proper understanding ofU.S. GAAP and newly announced accounting standards.The Company believes the foregoing measures will remediate the identified material weakness in future periods. The Company is committed to monitoringthe effectiveness of these measures and making any changes that are necessary and appropriate.Notwithstanding the conclusion that its internal control over financial reporting was not effective as of the end of the period covered by this report, ourChief Executive Officer and Chief Financial Officer believe that the financial statements and other information contained in this report present fairly, in all materialrespects, its business, financial condition and results of operations. Nothing has come to the attention of management that causes them to believe that any materialinaccuracies or errors exist in the Company’s financial statements as of December 31, 2017.Attestation report of the registered public accounting firm.This transition report does not include an attestation report of the Company’s registered public accounting firm on internal control over financial reportingbecause the Company is a nonaccelerated filer permanently exempted from section 404(b) of the SarbanesOxley Act.Changes in Internal Control over Financial ReportingThere were no changes in the Company’s internal control over financial reporting that occurred during our fiscal year ended December 31, 2017 that hasmaterially affected or is reasonably likely to materially affect our internal control over financial reporting.ITEM 16. [RESERVED]ITEM 16A. AUDIT COMMITTEE FINANCIAL EXPERT.Our board of directors has determined that Mr. Dennis Galgano qualifies as an audit committee financial expert. Our board of directors has determined thatMessrs. Dennis Galgano, Jin Shi, Jiming Ha and Zhihao Xu meet the definition of an “independent director” under the applicable NASDAQ Rules and under Rule10A3 of the Securities Exchange Act of 1934, as amended.72ITEM 16B. CODE OF ETHICS.Our board of directors has adopted a code of business conduct and ethics applicable to our directors, officers and employees. We have posted the code onour website at http://www.luokung.com.ITEM 16C. PRINCIPAL ACCOUNTANT FEES AND SERVICES.Audit FeesThe aggregate fees billed by Moore Stephens CPA Limited for professional services rendered for the audit of our financial information disclosed in thistransition report on Form 20F was $280,000 for the two years ended December 31, 2017 and 2016.The aggregate fees billed by our previous auditor, BDO China Shu Lun Pan Certified Public Accountants LLP for professional services rendered for theaudit of our annual financial information included in our annual reports on Form 20F was $105,500 for each of the fiscal years ended September 30, 2017, 2016 and2015.Tax FeesWe did not engage our principal accountants to provide tax or related services during the last two fiscal years.All Other FeesWe did not engage our principal accountants to render services to us during the last two fiscal years, other than as reported above.ITEM 16D. EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES.Not applicable.ITEM 16E. PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS.Not applicable.ITEM 16F. CHANGE IN REGISTRANT’S CERTIFYING ACCOUNTANT.Not applicable.ITEM 16G. CORPORATE GOVERNANCE.We are incorporated in the BVI and our corporate governance practices are governed by applicable BVI law as well as our memorandum and articles ofassociation. In addition, because our ADSs are listed on NASDAQ, we are subject to NASDAQ’s corporate governance requirements. NASDAQ Listing Rule5620(a) requires each issuer to hold an annual meeting of shareholders no later than one year after the end of the issuer’s fiscal year end. However, NASDAQ ListingRule 5615(a)(3) permits a foreign private issuer like us to follow home country practices in lieu of certain requirements of Listing Rule 5600, provided that suchforeign private issuer discloses in its transition report filed with the SEC each requirement of Rule 5600 that it does not follow and describes the home countrypractice followed in lieu of such requirement. We follow home country practice with respect to annual meetings and did not hold an annual shareholder meeting inthe year ended December 31, 2017. We may, however, hold annual shareholder meetings in the future if there are significant issues that require shareholders’approvals.ITEM 16H. MINE SAFETY DISCLOSURE.Not applicable.73PART IIIITEM 17. FINANCIAL STATEMENTS.We have elected to provide financial statements and related information specified in Item 18.ITEM 18. FINANCIAL STATEMENTS.See “Index to Consolidated Financial Statements” for a list of all financial statements filed as part of this transition report. The Financial Statements arebeginning on page F1.ITEM 19. EXHIBITS.See the Exhibit Index following the signature page of this report, which is incorporated herein by reference.74SIGNATURESThe registrant hereby certifies that it meets all of the requirements for filing on Form 20F and that it has duly caused and authorized the undersigned tosign this transition report on its behalf.LUOKUNG TECHNOLOGY CORP.By:/s/ Xuesong Song Xuesong SongChief Executive Officer(principal executive officer)October 12, 201875EXHIBIT INDEXThe following documents are filed as part of this transition report on Form 20F.ExhibitNumberDescription1.1Amended and Restated Memorandum of Association and Articles of Association of Luokung Technology Corp., dated August 20, 2018, and ascurrently in effect.2.1*Deposit Agreement among the Company, depositary and holders of the American Depositary Receipts.2.2*Form of American Depositary Receipt.2.3*English translation of Entrusted Management Agreement dated December 15, 2009 between Xi’an Softech Co., Ltd., Xi’an Kingtone InformationTechnology Co., Ltd. and the shareholders of Xi’an Kingtone Information Technology Co., Ltd.3.1*English translation of Shareholder’s Voting Proxy Agreement dated December 15, 2009 between Xi’an Softech Co., Ltd., Xi’an Kingtone InformationTechnology Co., Ltd. and the shareholders of Xi’an Kingtone Information Technology Co., Ltd.4.1*English translation of Exclusive Technology Service Agreement dated December 15, 2009 between Xi’an Softech Co., Ltd. and Xi’an KingtoneInformation Technology Co., Ltd.4.2*English translation of Exclusive Option Agreement dated December 15, 2009 between Xi’an Softech Co., Ltd., Xi’an Kingtone InformationTechnology Co., Ltd. and the shareholders of Xi’an Kingtone Information Technology Co., Ltd.4.3*English translation of Equity Pledge Agreement dated December 15, 2009 between Xi’an Softech Co., Ltd., Xi’an Kingtone Information TechnologyCo., Ltd. and the shareholders of Xi’an Kingtone Information Technology Co., Ltd.4.4*English translation of Loan Agreement dated September 14, 2009 between Xi’an Kingtone Information Technology Co., Ltd. and Xian CityCommercial Bank.4.5*English translation of Mortgage Agreement dated September 14, 2009 between Xi’an Kingtone Information Technology Co., Ltd. and Xian CityCommercial Bank.4.6*English translation of Form of Employment Agreement entered into between the Company and the Company’s executive officers.4.7*2010 Omnibus Incentive Plan of the Company.4.8**English translation of Project Construction Contract dated August 10, 2010 between Xi’an Hu County Yuxing Agriculture Science & TechnologyCo., Ltd. and Xi’an Kingtone Information Technology Co., Ltd.4.9***Asset Exchange Agreement by and between C Media Limited and the Company dated as of January 25, 2018.4.10***Securities Purchase Agreement by and among Redstone YYL Management Limited and five shareholders holding majority of the shares of theCompany dated as of January 25, 2018.4.15Exclusive Business Cooperation Agreement by and between Zhongchuan Tianxia Information Technology (Shenzhen) Co., Ltd., and Beijing MobileVision Technology Co., Ltd., dated August 31, 2015.764.16Exclusive Option Agreement by and among Zhongchuan Tianxia Information Technology (Shenzhen) Co., Ltd., Xuesong Song, Weili Chen, PingWang, Donglai Liu, and Beijing Mobile Vision Technology Co., Ltd., dated August 31, 2015.4.17Equity Interest Pledge Agreement by and among Zhongchuan Tianxia Information Technology (Shenzhen) Co., Ltd., Xuesong Song, Weili Chen, PingWang, Donglai Liu, and Beijing Mobile Vision Technology Co., Ltd., dated August 31, 2015.4.18Addendum to Asset Exchange Agreement by and among the Company, Topsky Infotech Holdings Pte Ltd. and C Media Limited, dated October 3,2018. Incorporated by reference to the Company’s Current Report on Form 6K filed on October 4, 2018.4.19Stock Purchase Agreement, dated August 25, 2018, by and among the Company, LK Technology Ltd., and the shareholders listedtherein. Incorporated by reference to the Company’s Current Report on Form 6K filed on August 27, 2018.4.20Power of Attorney by Weili Chen, dated August 31, 2015.4.21Power of Attorney by Ping Wang, dated August 31, 2015.4.22Power of Attorney by Donglai Liu, dated August 31, 2015.4.23Power of Attorney by Xuesong Song, dated August 31, 2015.8.1List of Subsidiaries and Consolidated Variable Interest Entities10.1Employment Agreement, dated August 19, 2018, between Luokung Technology Corp. and Xuesong Song.†10.2Employment Agreement, dated August 19, 2018, by and between Luokung Technology Corp. and Jie Yu.†12.1Certification of Chief Executive Officer required by Rule 13a14(a).12.2Certification of Chief Financial Officer required by Rule 13a14(a).13.1Certification of Chief Executive Officer required by Rule 13a14(a).13.2Certification of Chief Financial Officer required by Rule 13a14(a).101.INSXBRL Instance Document.101.SCHXBRL Taxonomy Extension Schema Document.101.CALXBRL Taxonomy Extension Calculation Linkbase Document.101.DEFXBRL Taxonomy Extension Definition Linkbase Document.101.LABXBRL Taxonomy Extension Label Linkbase Document.101.PREXBRL Taxonomy Extension Presentation Linkbase Document.*Previously filed as an exhibit to the Company’s Registration Statement on Form F1 (Reg. No. 333166056) filed with the Commission and incorporated hereinby reference.**Previously filed as exhibits to the Company’s Transition Report on Form 20F filed with the Commission on January 20, 2011 and incorporated herein byreference.***Previously filed as exhibits to the Company’s Annual Report on Form 20F filed with the Commission on February 9, 2018 and incorporated herein byreference.†Indicates management contract or compensatory plan, contract or arrangement.77LK Technology Ltd. and SubsidiariesCONSOLIDATED FINANCIAL STATEMENTSTABLE OF CONTENTSPage(s)Report of Independent Registered Public Accounting FirmF2Consolidated Financial StatementsConsolidated Balance SheetsF3Consolidated Statements of Operations and Comprehensive LossF4application.Chuang (Vincent) Tao was appointed as a member of the Board effective on August 25, 2018. Dr. Tao was the Chairman of SuperEngine Suzhou from 2014to 2017. Dr. Tao has been the president of the Seasky Angel Investment Alliance of Shanghai since 2015. Dr. Tao received his Bachelor Degree of geographicinformation and telemetry from Wuhan University in China in 1990 and received his Ph.D. from University of Calgary, Canada in 1997.Dennis Galgano was appointed as a director of the Company following the consummation of the asset exchange agreement. He was a registered consultantwith Morgan Joseph Triartisan LLC from November 2016 until October 2017, and previously served as vice chairman and head of international investment bankingfor Morgan Joseph Triartisan LLC, which is a registered broker dealer engaged in the investment banking and financial advisory industry. Mr. Galgano received aB.S. degree in Chemistry from St. John’s University and an M.B.A. from The Wharton School in 1972.Jin Shi was appointed as a director of the Company following the consummation of the asset exchange transactions. Mr. Shi has served as the managingpartner of Chum Capital Group, a merchant bank focused on helping Chinese growth companies to access global capital, since January 2013. Mr. Shi has also servedas a director of Seven Stars Cloud Group, Inc. (NASDAQ: SSC), a premium video on demand service provider, since January 2014, and joined the audit committee ofits board of directors in March 2016. He also served as a director and member of the audit committee of Pingtan Marine Enterprise, Ltd. (NASDAQ: PME), a marineenterprise group primarily engaged in ocean fishing through its subsidiaries. Mr. Shi received an EMBA degree from the Guanghua Management School of BeijingUniversity, and a Bachelor’s degree of science in Chemical Engineering from Tianjin University.Jiming Ha was appointed as a director of the Company following the consummation of the asset exchange agreement, and has also served as a seniorresearch fellow for the China Finance 40 Forum since March 1, 2018, and previously served as a managing director of Goldman Sachs from January 2017 to April2017. Mr. Ha served as a vice chairman and chief investment strategist of the Investment Strategy Group for Private Wealth Management at Goldman Sachs from2010 to January 2017. Mr. Ha holds a PhD in Economics from the University of Kansas and Master’s and Bachelor’s degrees of science from Fudan University.Zhihao Xu was appointed as a director of the Company following the consummation of the asset exchange transactions. Mr. Xu has served as the chiefexecutive officer of Geely Group Co., Ltd., in Hangzhou, China, since December 2017, and previously served as the chairman and chief executive officer of BeijingDingchengrenhe Investment Co., Ltd., a funds management company, from January 2017 to December 2017. Mr. Xu served as the chairman of president of HNAUSOLV CO., LTD., and the chief innovation officer of HNA Logistics Group from January 2014 to December 2016, and prior to that as the chairman of GopayInnovation Technology Co. Ltd., an online payment system operator supporting online money transfers, from April 2012 to January 2014. Mr. Xu graduated from theBusiness School of Renmin University of China and from the Wudaokou Finance College of Tsinghua University with a fund qualification certificate and securitiesqualification certificate.B. COMPENSATION.Compensation of Directors and Executive OfficersFor the ninemonth transition period ended September 30, 2018 and the fiscal year ended December 31, 2017, we did not pay any cash compensation to ourexecutive officers of LK Technology Ltd. and a to our directors for serving on our board of directors of LK Technology Ltd.37Other than nonemployee directors, we do not intend to compensate directors for serving on our board of directors or any of its committees. We do,however, intend to reimburse each member of our board of directors for outofpocket expenses incurred by each director in connection with attending meetings ofthe board of directors and its committees.AdministrationThe Incentive Plan is administered by our board of directors, or at the discretion of the board, by our compensation committee. Our board of directors hasdelegated authority to our compensation committee to administer the Incentive Plan. Subject to the terms of the Incentive Plan, the compensation committee mayselect participants to receive awards, determine the types of awards and terms and conditions of awards, and interpret provisions of the Incentive Plan.The ordinary shares issued or to be issued under the Incentive Plan consist of authorized but unissued shares. If any ordinary shares covered by an awardare not purchased or are forfeited, or if an award otherwise terminates without delivery of any ordinary shares, then the number of ordinary shares counted againstthe aggregate number of ordinary shares available under the plan with respect to the award will, to the extent of any such forfeiture or termination, again be availablefor making awards under the Incentive Plan.EligibilityAwards may be made under the Incentive Plan to our employees, officers, directors, consultants or advisers or to any of our affiliates, and to any otherindividual whose participation in the Incentive Plan is determined to be in our best interests by our board of directors.Amendment or Termination of the PlanOur board of directors may terminate or amend the Incentive Plan at any time and for any reason. No amendment, however, may adversely impair the rightsof grantees with respect to outstanding awards. The Incentive Plan has a term of ten years. Amendments will be submitted for shareholder approval to the extentrequired by applicable stock exchange listing requirements or other applicable laws.OptionsThe Incentive Plan permits the granting of options to purchase ordinary shares intended to qualify as incentive share options under the Internal RevenueCode and share options that do not qualify as incentive share options, or nonqualified share options.The exercise price of each share option may not be less than 100% of the fair market value of our ADSs representing ordinary shares on the date of grant.In the case of certain 10% shareholders who receive incentive share options, the exercise price may not be less than 110% of the fair market value of our ADSsrepresenting ordinary shares on the date of grant. An exception to these requirements is made for options that we grant in substitution for options held byemployees of companies that we acquire. In such a case the exercise price is adjusted to preserve the economic value of the employee’s share option from his or herformer employer.The term of each share option is fixed by the compensation committee and may not exceed ten years from the date of grant. The compensation committeedetermines at what time or times each option may be exercised and the period of time, if any, after retirement, death, disability or termination of employment duringwhich options may be exercised.Options may be made exercisable in installments. The award agreement provides the vesting of the options. Exercisability of options may be accelerated bythe compensation committee.38In general, an optionee may pay the exercise price of an option by (1) cash or check (in U.S. dollars or Renminbi or other local currency as approved by thecompensation committee), (2) ordinary shares held for such period of time as may be required by the compensation committee, (3) delivery of a notice of a marketorder with a broker with respect to ordinary shares then issuable upon exercise of an option, and that the broker has been directed to pay us a sufficient portion ofnet proceeds of the sale in satisfaction of the exercise price, provided that payment of such proceeds is then made to us upon settlement of such sale, (4) otherproperty acceptable to the compensation committee with a fair market value equal to the exercise price, (5) cashless exercise or (6) any combination of the foregoing.Share options granted under the Incentive Plan may not be sold, transferred, pledged, or assigned other than by will or under applicable laws of descentand distribution. However, we may permit limited transfers of nonqualified options for the benefit of immediate family members of grantees to help with estateplanning concerns or pursuant to a domestic relations order in settlement of marital property rights.Other AwardsThe compensation committee may also award under the Incentive Plan:1.ordinary shares subject to restrictions;2.deferred ordinary shares, credited as deferred ordinary share units, but ultimately payable in the form of unrestricted ordinary shares inaccordance with the terms of the grant or with the participant’s deferral election;3.ordinary share units subject to restrictions;4.unrestricted ordinary shares, which are ordinary shares issued at no cost or for a purchase price determined by the compensation committee whichare free from any restrictions under the 2011 Omnibus Incentive Plan;5.dividend equivalent rights entitling the grantee to receive credits for dividends that would be paid if the grantee had held a specified number ofordinary shares; or6.a right to receive a number of ordinary shares or, in the discretion of the compensation committee, an amount in cash or a combination of ordinaryshares and cash, based on the increase in the fair market value of the ADSs representing ordinary shares underlying the right during a statedperiod specified by the compensation committee.Effect of Certain Corporate TransactionsCertain change of control transactions involving us may cause awards granted under the Incentive Plan to vest, unless the awards are continued orsubstituted for by the surviving company in connection with the corporate transaction.Unless otherwise provided in the appropriate option agreement on the date of grant or provided by our board of directors thereafter with the consent of thegrantee, options granted under the Incentive Plan become exercisable in full following (1) a dissolution of our company or a merger, consolidation or reorganizationof our company with one or more other entities in which we are not the surviving entity, (2) a sale of substantially all of our assets to another person or entity, or (3)any transaction (including without limitation a merger or reorganization in which we are the surviving entity) which results in any person or entity owning 50% ormore of the combined voting power of all classes of our shares.39Adjustments for Dividends and Similar EventsThe compensation committee will make appropriate adjustments in outstanding awards and the number of ordinary shares available for issuance under theIncentive Plan, including the individual limitations on awards, to reflect ordinary share dividends, stock splits and other similar events.C. BOARD PRACTICES.Board of DirectorsOur board of directors consists of six members being Messrs. Xuesong Song, Kegang Peng, Dennis Galgano, Jin Shi, Jiming Ha and Zhiaho Xu. Ourdirectors hold office until our annual meeting of shareholders, where their successors will be duly elected and qualified, or until the directors’ death, resignation orremoval, whichever is earlier. Our directors are not subject to a term of office and hold office until their resignation, death or incapacity or until their respectivesuccessors have been elected and qualified in accordance with our fourth amended and restated memorandum of association and articles of association. A directorwill be removed from office if, among other things, the director (1) becomes bankrupt, (2) dies or becomes of unsound mind, or (3) is absent from meetings of ourboard of directors for six consecutive months without leave and our board of directors resolves that the office is vacated. A director is not entitled to any specialbenefits upon termination of service with the company.Director IndependenceOur board of directors consists of six members; Messrs. Dennis Galgano, Jin Shi, Jiming Ha and Zhihao Xu have been determined by us to be independentdirectors within the meaning of the independent director guidelines of the NASDAQ Corporate Governance Rules (the “NASDAQ Rules”).Committees of Our Board of DirectorsTo enhance our corporate governance, we established three committees under our board of directors: an audit committee, a compensation committee, and anominating and corporate governance committee. We have adopted a charter for each of these committees. The committees have the following functions andmembers.Audit CommitteeOur audit committee reports to our board of directors regarding the appointment of our independent public accountants, the scope and results of ourannual audits, compliance with our accounting and financial policies and management’s procedures and policies relating to the adequacy of our internal accountingcontrols. Our audit committee consists of Messrs. Dennis Galgano, Jin Shi, and Jiming Ha. Mr. Galgano, having accounting and financial management expertise,serves as the chairman of the audit committee and is an “audit committee financial expert” as defined by the rules and regulations of the SEC. Our board of directorshas determined that each of these persons meet the definition of an “independent director” under the applicable NASDAQ Rules and under Rule 10A3 of theSecurities Exchange Act of 1934, as amended (the “Exchange Act”).Our audit committee is responsible for, among other things:●the appointment, evaluation, compensation, oversight and termination of the work of our independent auditor (including resolution of disagreementsbetween management and the independent auditor regarding financial reporting);●an annual performance evaluation of the audit committee;●establishing procedures for the receipt, retention and treatment of complaints regarding accounting, internal accounting controls, auditing matters orpotential violations of law, and the confidential, anonymous submission by our employees of concerns regarding questionable accounting or auditingmatters or potential violations of law;40●ensuring that it receives an transition report from our independent auditor describing our internal control procedures and any steps taken to deal withmaterial control deficiencies and attesting to the auditor’s independence and describing all relationships between the auditor and us;●reviewing our annual audited financial statements and quarterly financial statements with management and our independent auditor;●reviewing and approving all proposed related party transactions;●reviewing our policies with respect to risk assessment and risk management;●meeting separately and periodically with management and our independent auditor; and●reporting regularly to our board of directors.Compensation CommitteeOur compensation committee assists the board of directors in reviewing and approving the compensation structure of our directors and executive officers,including all forms of compensation to be provided to our directors and executive officers. In addition, the compensation committee reviews share compensationarrangements for all of our other employees. Members of the compensation committee are not prohibited from direct involvement in determining their owncompensation. Our chief executive officer is not permitted to be present at any committee meeting during which his or her compensation is deliberated. Ourcompensation committee consists of Dennis Galgano and Jin Shi, with Mr. Shi serving as the chairman of the compensation committee. Our board of directors hasdetermined that each of these persons meet the definition of “independent director” under the applicable requirements of the NASDAQ Rules.Our compensation committee is responsible for, among other things:●reviewing and approving corporate goals and objectives relevant to the compensation of our chief executive officer, evaluating the performance of ourchief executive officer in light of those goals and objectives and setting the compensation level of our chief executive officer based on this evaluation;●reviewing and making recommendations to the board with respect to the compensation of our executives, incentive compensation and equitybasedplans that are subject to board approval; and●providing annual performance evaluations of the compensation committee.Nominating and Corporate Governance CommitteeOur nominating and corporate governance committee assists the board of directors in identifying and selecting or recommending individuals qualified tobecome our directors, developing and recommending corporate governance principles and overseeing the evaluation of our board of directors and management. Ournominating and corporate governance committee consists of Jiming Ha and Zhihao Xue, with Mr. Ha serving as the chairman of the nominating and corporategovernance committee. Our board of directors has determined that each of these persons meet the definition of “independent director” under the applicablerequirements of the NASDAQ Rules.Our nominating and corporate governance committee is responsible for, among other things:●selecting and recommending to our board nominees for election or reelection to our board, or for appointment to fill any vacancy;●reviewing annually with our board the current composition of the board of directors with regards to characteristics such as independence, age, skills,experience and availability of service to us;●selecting and recommending to our board the names of directors to serve as members of the audit committee and the compensation committee, as wellas the nominating and corporate governance committee itself; advising our board of directors periodically with regards to significant developments inthe law and practice of corporate governance as well as our compliance with applicable laws and regulations, and making recommendations to ourboard of directors on all matters of corporate governance and on any remedial action to be taken; and●monitoring compliance with our code of business conduct and ethics, including reviewing the adequacy and effectiveness of our procedures to ensureproper compliance.41Code of Business Conduct and EthicsOur board of directors adopted a code of business conduct and ethics applicable to our directors, officers and employees.Duties of DirectorsUnder British Virgin Islands law, our directors have a duty to act honestly, in good faith and with a view to our best interests. Our directors also have a dutyto exercise care, diligence and skills that a reasonably prudent person would exercise in comparable circumstances. In fulfilling their duty of care to us, our directorsmust ensure compliance with our memorandum of association and articles of association. We have the right to seek damages if a duty owed by our directors isbreached.The functions and powers of our board of directors include, among others:●appointing officers and determining the term of office of the officers;●authorizing the payment of donations to religious, charitable, public or other bodies, clubs, funds or associations as deemed advisable;●exercising the borrowing powers of the company and mortgaging the property of the company;●executing cheques, promissory notes and other negotiable instruments on behalf of the company; and●maintaining or registering a register of mortgages, charges or other encumbrances of the company.Remuneration and BorrowingThe directors may receive such remuneration as our board of directors may determine from time to time. Each director is entitled to be repaid or prepaid alltraveling, hotel and incidental expenses reasonably incurred or expected to be incurred in attending meetings of our board of directors or committees of our board ofdirectors or shareholder meetings or otherwise in connection with the discharge of his or her duties as a director. The compensation committee will assist thedirectors in reviewing and approving the compensation structure for the directors.Our board of directors may exercise all the powers of the company to borrow money and to mortgage or charge our undertakings and property or any partthereof, to issue debentures, debenture stock and other securities whenever money is borrowed or as security for any debt, liability or obligation of the company orof any third party.QualificationA director is not required to hold shares as a qualification to office.42Limitation on Liability and Other Indemnification MattersBritish Virgin Islands law does not limit the extent to which a company’s memorandum of association and articles of association may provide forindemnification of officers and directors, except to the extent any such provision may be held by the British Virgin Islands courts to be contrary to public policy,such as to provide indemnification against civil fraud or the consequences of committing a crime.Under our memorandum of association and articles of association, we may indemnify our directors, officers and liquidators against all expenses, includinglegal fees, and against all judgments, fines and amounts paid in settlement and reasonably incurred in connection with civil, criminal, administrative or investigativeproceedings to which they are party or are threatened to be made a party by reason of their acting as our director, officer or liquidator. To be entitled toindemnification, these persons must have acted honestly and in good faith with a view to the best interest of the company and, in the case of criminal proceedings,they must have had no reasonable cause to believe their conduct was unlawful.Compensation Committee Interlocks and Insider ParticipationNone of the members of our compensation committee is an officer or employee of our company. None of our executive officers currently serves, or in thepast year has served, as a member of the board of directors or compensation committee of any entity that has one or more executive officers serving on our board ofdirectors or compensation committee.Employment AgreementsOn August 19, 2018, the Company entered into an Employment Agreement (the “Song Agreement”) with Mr. Xuesong Song, to serve as the ChiefExecutive Officer of the Company for a fouryear term, subject to renewal. Under the terms of the Song Agreement, Mr. Song will receive no salary for his servicesbut will be eligible for an annual cash bonus in the Board’s sole discretion.On August 19, 2018, the Company entered into an Employment Agreement (the “Yu Agreement”) with Mr. Jie Yu, to serve as the Chief Financial Officer ofthe Company for a fouryear term, subject to renewal. Under the terms of the Yu Agreement, Mr. Yu will receive an annual salary of RMB700,000, and will be eligiblefor an annual cash bonus in the Board’s sole discretion.D. EMPLOYEES.As of September 30, 2018 and December 31, 2017, we had a total of 107 and 37 fulltime employees, including 48 and 13 in research and development, 9 and 2in sales and marketing and the rest in a variety of other divisions, respectively. All of our employees are fulltime employees. None of our employees is currentlyrepresented by a union and/or collective bargaining agreements. We believe that we have good relations with our employees and since our inception we have hadno history of work stoppages or union organizing campaigns.E. SHARE OWNERSHIP.The following table provides information as to the beneficial ownership of our ordinary shares as of October 10, 2018, by the persons listed. Beneficialownership of shares is determined under the rules of the SEC and generally includes any shares over which a person exercises sole or shared voting or investmentpower. For purposes of the following table, a person is deemed to have beneficial ownership of any ordinary shares if such person has the right to acquire suchshares within 60 days of October 10, 2018. For purposes of computing the percentage of outstanding shares held by each person, any shares that such person hasthe right to acquire within 60 days after of October 10, 2018 are deemed to be outstanding, but are not deemed to be outstanding for the purpose of computing thepercentage ownership of any other person. Except as otherwise noted, the persons named in the table have sole voting and investment power with respect to all ofthe ordinary shares beneficially owned by them. Unless otherwise indicated, the address of each person listed is c/o Luokung Technologies, LAB 32, SOHO 3Q, No9, Guanghua Road, Chaoyang District, Beijing, People’s Republic of China.43Percentage ownership in the following table is based on 199,317,558 ordinary shares outstanding on October 10, 2018.Number ofsharesPercent ofclassDirectors and named executive officersCharm Dragon International Limited (1)4,030,8822.03%Xuesong Song, Chairman, Chief Executive Officer and Director(2)38,156,43019.30%Kegang Peng, Vice President and Director (3)17,231,9558.71%Dennis Galgano, Director75,796*%Jin Shi, DirectorJiming Ha, DirectorZhihao Xu, Director (4)7,579,1843.83%Dongpu Zhang, President (5)2,321,7921.17%Chuang Tao, Director (6)1,221,996*%Directors and executive officers as a group (10 persons)66,587,15233.69%(1)Charm Dragon International Limited is a British Virgin Islands company controlled by Mr. Xuesong Song.(2)Consists of (i) 4,030,882 shares owned directly by Charm Dragon International Limited, a British Virgin Islands company and (ii) 22,624,793 shares owneddirectly by Bravo First Development Limited, a British Virgin Islands company. Mr. Xuesong Song is the controlling shareholder of Bravo First DevelopmentLimited. Mr. Xuesong Song is the sole director of Charm Dragon International Limited.(3)Consists of 17,231,955 shares owned directly by Plenty Prestige Enterprises Limited, a British Virgin Islands company. Mr. Kegang Peng is the sole director ofPlenty Prestige Enterprises Limited.(4)Consists of 7,579,184 shares directly owned by Geely Group Limited., a Chinese company. Mr. Zhihao Xu is the Chief Executive Officer of Geely GroupLimited.(5)Consists of 2,321,792 shares owned directly by Genoa Peak Limited, a British Virgin Islands company. Mr. Dongpu Zhang controls Genoa Peak Limited.(6)Consists of 1,221,996 shares owned directly by Globalearth Holdings Limited, a British Virgin Islands company. Mr. Chuang Tao controls Globalearth HoldingsLimited.*Represents less than 1% of shares outstandingITEM 7. MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS.A. MAJOR SHAREHOLDERSPlease refer to Item 6.E “Directors, Senior Management and Employees — Share Ownership.”To our knowledge, (A) we are not directly or indirectly owned or controlled by (i) another corporation or (ii) any foreign government and (B) there are noarrangements (including any announced or expected takeover bid), the operation of which may at a subsequent date result in a change in our control.The voting rights of our major shareholders do not differ from the voting rights of other holders of the same class of shares.44B. RELATED PARTY TRANSACTIONS. BUSINESS RELATIONSHIPS.Our subsidiaries, consolidated affiliated entities, and the subsidiaries of the consolidated affiliated entities have engaged, during the ordinary course ofbusiness, in a number of customary transactions with each other. All of these intercompany balances have been eliminated in consolidation.As of December 31, 2017, we had amounts due from related parties, C Media Limited and Ya Tuo Ji International Consultancy (Beijing) Limited, in theamounts of $11.8 million and $0.2 million, respectively. These amounts due from related parties are short term in nature, noninterest bearing, unsecured andrepayable on demand.As of December 31, 2017, we had amounts due to related parties, Mr. Xuesong Song, our chairman and chief executive officer, Thumb Beijing Branch andThumb Shenzhen Branch, in the amounts of $2.9 million, $0.6 million and $0.03 million, respectively. These amounts due to related parties are short term in nature,noninterest bearing, unsecured and payable on demand.We are party to a series of control agreements with Beijing Zhong Chuan Shi Xun. In addition, our chief executive officer, Mr. Xuesong Song, serves as andofficer of Beijing Zhong Chuan Shi Xun and is a shareholder of Beijing Zhong Chuan Shi Xun. The following table sets forth the relationship of Mr. Song withBeijing Zhong Chuan Shi Xun:NameRelationship withLuokung TechnologyRelationship withBeijing Zhong Chuan Shi XunPercentageOwnership Interest inBeijing Zhong Chuan Shi XunXuesong SongChief Executive OfficerChief Executive Officer61.83%C. INTERESTS OF EXPERTS AND COUNSEL.None.ITEM 8. FINANCIAL INFORMATION.A. CONSOLIDATED STATEMENTS AND OTHER FINANCIAL INFORMATION.See “Item 18. Financial Statements.”Legal ProceedingsTo our knowledge, other than as described below there are no material legal proceedings threatened against us. From time to time, we may be subject tovarious claims and legal actions arising in the ordinary course of business. Following the consummation of the AEA, we became successor in interest to the legalproceedings described below.Litigation with Shanghai Fusheng Weier Intelligent Control Technology Co., Ltd.On January 22, 2016, Zhong Chuan Rui You and Shanghai Fusheng Weier Intelligent Control Technology Co., Ltd. (“Fusheng Weier”) signed a contract forequipment of $1,652,842 (RMB10,800,000). Since Zhong Chuan Rui You did not make the payments of $1,126,381 (RMB7,360,000) on the due dates, Fusheng Weierfiled a lawsuit against Zhong Chuan Rui You in Shanghai Xuhui District People's Court on October 8, 2016. On March 9, 2017, Xuhui District People's Court issuedthe verdict requiring Zhong Chuan Rui You to pay the overdue debts. In August 2017, C Media Limited made the payment of $512,075 (RMB3,346,000). Theremaining balance has been accrued in accounts payable. The payment schedule for the remaining balance is being negotiated by the two parties. On February 5,2018, a hearing was held adding Zhong Chuan Shi Xun as a defendant. The Group plans to settle the remaining balance within one year.45Lawsuit with Gansu Jinlun Culture Media Co., Ltd.On August 22, 2014, Zhong Chuan Rui You and Gansu Jinlun Culture Media Co., Ltd. (“Gansu Jinlun”) signed a “Lanzhou Railway Bureau AirconditionedTrain WiFi Network System Advertising Operation Rights Agreement” for advertising on 72 trains of $1,467,880 (RMB9,604,633). Due to the dispute on theproject implementation, Zhong Chuan Rui You did not pay the advertising fee. On August 23, 2017, Gansu Jinlun filed a lawsuit with Gansu Intermediate People'sCourt. On December 19, 2017, Gansu Intermediate People's Court issued a verdict, ruling that Zhong Chuan Rui You settle the overdue advertising fee. Since only 18out of 72 trains have been installed with Wifi network system, Zhong Chuan Rui You disputed and appealed to the verdict. The next court trial date has not yet beendetermined. C Media and Gansu Jinlun are negotiating a potential settlement to resume the contract. According to the legal counsel, it is probable that the settlementwill amount to approximately $459,000 (RMB3,000,000); therefore, this amount has been accrued in accounts payable as at December 31, 2017.Litigation with Shenzhen Hua Xun Fang Zhou Technology Co., Ltd.On June 16, 2015, Zhong Chuan Rui You signed a cooperation agreement with Shenzhen Hua Xun Fang Zhou Technology Co., Ltd. (“Shenzhen Hua Xun”)and Xuesong Song, a major shareholder of C Media Limited. Pursuant to this agreement, Zhong Chuan Rui You procures equipment from Shenzhen Hua Xun.Xuesong Song acts as a joint liability guarantor for the entire debts of Zhong Chuan Rui You under this agreement. As Zhong Chuan Rui You did not make thepayments on the due dates, Shenzhen Hua Xun filed a lawsuit with Shenzhen Baoan District People's Court on May 31, 2016. On November 1, 2016, Zhong ChuanRui You, Xuesong Song and Shenzhen Hua Xun reached a settlement in Shenzhen Baoan District People's Court to settle $1,735,389 (RMB11,355,000) in fourinstalments. On December 30, 2017, the debt was assigned to C Media Limited.Dividend PolicyWe currently intend to retain all of our available funds and future earnings for use in the operation and expansion of our business and do not anticipatepaying cash dividends in the foreseeable future. Under the terms of our Amended and Restated Memorandum and Articles of Association the declaration andpayment of any dividends in the future will be determined by our board of directors, in its discretion, and will depend on a number of factors, including our earnings,capital requirements and overall financial condition and our ability to receive dividends from our subsidiaries. If we pay any dividends, we will pay our ADS holders’dividends with respect to their underlying shares to the same extent as holders of our ordinary shares, subject to the terms of the deposit agreement, including thefees and expenses payable thereunder. Cash dividends on our ordinary shares, if any, will be paid in U.S. dollars.Our ability to receive dividends from our subsidiaries may limit our ability to pay dividends on our ordinary shares. See Risk Factors – Risks Related toDoing Business in China – Our holding company structure may limit the payment of dividends” and “Item 10. Additional Information – D. Exchange Controls –Dividend Distribution”.B. SIGNIFICANT CHANGES.N/AITEM 9. THE OFFER AND LISTINGA. OFFER AND LISTING DETAILS.Markets and Share Price HistoryOur ordinary shares are not currently listed on any trading market. Our American Depository Shares (“ADSs”) were voluntarily delisted from the NASDAQCapital Market on September 19, 2018. We have applied to NASDAQ for the listing of our ordinary shares on the NASDAQ Capital Market and received an approvalfor listing of Ordinary Shares on August 6, 2018, and as of the date of this transition report, that application and approval are currently under review.46The table below sets forth the high and low reported sales prices in dollars of our ordinary shares, which are represented by ADSs, as reported byNASDAQ in the periods as indicated:ADSHighLowAnnual Highs and Lows (as of the fiscal year end 09/30 for the five most recent full financial years)*20175.592.67201610.21.62Quarterly Highs and Lows (for the two most recent full financial years and any subsequent period, based on calendarquarter end)*2018Third Quarter8.006.30Second Quarter8.824.25First Quarter6.403.702017Fourth Quarter5.592.91Third Quarter3.992.67Second Quarter4.063.07First Quarter5.152.832016Fourth Quarter6.594.20Third Quarter10.201.62Second Quarter3.101.97First Quarter3.602.12Monthly Highs and Lows (for the most recent six months)September 20188.006.41August 20187.706.63July 20187.506.30June 20188.827.55May 20187.805.92April 20187.454.25*The Company effected a 1for10 reverse stock split of its ordinary shares on November 6, 2012 (the “Reverse Split”). The ratio between each AmericanDepositary Share (“ADS”) and its underlying ordinary share postReverse Split remains the same, namely, one ADR remains to represent one ordinary sharepost the Reverse Split. The price listed here after November 6, 2012 reflected the effect from the Reverse Split.B. PLAN OF DISTRIBUTION.Not Applicable.C. MARKETS.Our ordinary shares are not currently listed on any trading market. Our ADSs were voluntarily delisted from the NASDAQ Capital Market on September 19,2018. We have applied to NASDAQ for the listing of our ordinary shares on the NASDAQ Capital Market and received an approval for listing of Ordinary Shares onAugust 6, 2018, and as of the date of this transition report, that application and approval are currently under review.47D. SELLING SHAREHOLDERS.Not applicable.E. DILUTION.Not applicable.F. EXPENSES OF THE ISSUE.Not applicable.ITEM 10. ADDITIONAL INFORMATION.A. SHARE CAPITALNot applicable.B. MEMORANDUM AND ARTICLES OF ASSOCIATIONWe are a British Virgin Islands company incorporated with limited liability and our affairs are governed by the provisions of our memorandum of associationand articles of association, as amended and restated from time to time, and by the provisions of applicable British Virgin Islands law.Our memorandum of association and articles of association authorize the issuance of up to 251,000,000 shares, which are designated into (i) 250,000,000 ofordinary shares of the Company (“Ordinary Shares”), and (ii) 1,000,000 preferred shares of the Company (“Preferred Shares”), in each case with the rights,preferences and privileges as set out in the memorandum and articles of association of the Company.Please see below for a description of our ADSs under “Item 12. Description of Securities Other Than Equity Securities – D. American Depository Shares.”The following is a summary of the material provisions of our ordinary shares and our memorandum of association and articles of association.Ordinary SharesAll of our issued and outstanding ordinary shares are fully paid and nonassessable. Holders of our ordinary shares who are nonresidents of the BritishVirgin Islands may freely hold and vote their shares.Subject to the memorandum and articles of association (and, for greater clarity, without prejudice to any special rights conferred thereby on the holders ofany other shares), an Ordinary Share of the Company confers on the holder:(a)the right to one vote per Ordinary Share at a meeting of the members or on any resolution of members;(b)the right to an equal share in any distribution paid by the Company; and(c)the right to an equal share in the distribution of the surplus assets of the Company on a winding up;48Subject to the memorandum and articles of association (and, for greater clarity, without prejudice to any special rights conferred thereby on the holders ofany other shares), a Preferred Share of the Company confers on the holder:(a)the right to 399 votes per Preferred Share at a meeting of the members or on any resolution of members;(b)the right to an equal share in any distribution paid by the Company;(c)the right to an equal share in the distribution of the surplus assets of the Company on a winding up;(d)be freely transferable, in whole or in part, by Mr. Xuesong Song to any third party through one or more Private Transactions, subject toApplicable Law; and(e)be freely transferable, in whole or in part, by Mr. Xuesong Song to any third party through one or more Public Transactions, subject to ApplicableLaw and Automatic Conversion of such Preferred Share(s) into Ordinary Share(s).Each Preferred Share shall be automatically converted at any time after issue and without the payment of any additional sum into an equal number of fullypaid Ordinary Shares upon the conclusion of any transfer by Mr. Xuesong Song to any third party through one or more Public Transactions.Limitation on Liability and Indemnification MattersUnder British Virgin Islands law, each of our directors and officers, in performing his or her functions, is required to act honestly and in good faith with aview to our best interests and exercise the care, diligence and skill that a reasonably prudent person would exercise in comparable circumstances. Our memorandumof association and articles of association provide that, to the fullest extent permitted by British Virgin Islands law or any other applicable laws, our directors will notbe personally liable to us or our shareholders for any acts or omissions in the performance of their duties. Such limitation of liability does not affect the availabilityof equitable remedies such as injunctive relief or rescission. These provisions will not limit the liability of directors under United States federal securities laws.We may indemnify any of our directors or anyone serving at our request as a director of another entity against all expenses, including legal fees, andagainst all judgments, fines and amounts paid in settlement and reasonably incurred in connection with legal, administrative or investigative proceedings. We mayonly indemnify a director if he or she acted honestly and in good faith with the view to our best interests and, in the case of criminal proceedings, the director hadno reasonable cause to believe that his or her conduct was unlawful. The decision of our board of directors as to whether the director acted honestly and in goodfaith with a view to our best interests and as to whether the director had no reasonable cause to believe that his or her conduct was unlawful, is in the absence offraud sufficient for the purposes of indemnification, unless a question of law is involved. The termination of any proceedings by any judgment, order, settlement,conviction or the entry of no plea does not, by itself, create a presumption that a director did not act honestly and in good faith and with a view to our best interestsor that the director had reasonable cause to believe that his or her conduct was unlawful. If a director to be indemnified has been successful in defense of anyproceedings referred to above, the director is entitled to be indemnified against all expenses, including legal fees, and against all judgments, fines and amounts paidin settlement and reasonably incurred by the director or officer in connection with the proceedings.We may purchase and maintain insurance in relation to any of our directors or officers against any liability asserted against the directors or officers andincurred by the directors or officers in that capacity, whether or not we have or would have had the power to indemnify the directors or officers against the liabilityas provided in our memorandum of association and articles of association.Insofar as indemnification for liabilities arising under the Securities Act may be permitted for our directors or officers under the foregoing provisions, wehave been informed that in the opinion of the Securities and Exchange Commission, such indemnification is against public policy as expressed in the Securities Actand is therefore unenforceable as a matter of United States law.49Differences in Corporate LawWe were incorporated under, and are governed by, the laws of the British Virgin Islands. The corporate statutes of the State of Delaware and the BritishVirgin Islands are similar, and the flexibility available under British Virgin Islands law has enabled us to adopt memorandum of association and articles of associationthat will provide shareholders with rights that do not vary in any material respect from those they would enjoy if we were incorporated under the Delaware GeneralCorporation Law, or Delaware corporate law. Set forth below is a summary of some of the differences between provisions of the BVI Act applicable to us and thelaws application to companies incorporated in Delaware and their shareholders.Director’s Fiduciary DutiesUnder Delaware corporate law, a director of a Delaware corporation has a fiduciary duty to the corporation and its stockholders. This duty has twocomponents: the duty of care and the duty of loyalty. The duty of care requires that a director act in good faith, with the care that an ordinarily prudent personwould exercise under similar circumstances. Under this duty, a director must inform himself of, and disclose to stockholders, all material information reasonablyavailable regarding a significant transaction. The duty of loyalty requires that a director act in a manner he reasonably believes to be in the best interests of thecorporation. He must not use his corporate position for personal gain or advantage. This duty prohibits selfdealing by a director and mandates that the bestinterest of the corporation and its stockholders take precedence over any interest possessed by a director, officer or controlling stockholder and not shared by thestockholders generally. In general, actions of a director are presumed to have been made on an informed basis, in good faith and in the honest belief that the actiontaken was in the best interests of the corporation. However, this presumption may be rebutted by evidence of a breach of one of the fiduciary duties. Should suchevidence be presented concerning a transaction by a director, a director must prove the procedural fairness of the transaction, and that the transaction was of fairvalue to the corporation.British Virgin Islands law provides that every director of a British Virgin Islands company in exercising his powers or performing his duties shall acthonestly and in good faith and in what the director believes to be in the best interests of the company. Additionally, the director shall exercise the care, diligence andskill that a reasonable director would exercise in the same circumstances taking into account the nature of the company, the nature of the decision and the positionof the director and his responsibilities. In addition, British Virgin Islands law provides that a director shall exercise his powers as a director for a proper purpose andshall not act, or agree to the company acting, in a manner that contravenes British Virgin Islands law or the memorandum association or articles of association of thecompany.Amendment of Governing DocumentsUnder Delaware corporate law, with very limited exceptions, a vote of the stockholders is required to amend the certificate of incorporation. Under BritishVirgin Islands law and our memorandum of association and articles of association, (i) our shareholders may amend our memorandum of association and articles ofassociation by a resolution of shareholders, or (ii) our board of directors may amend our memorandum of association and articles of association by a resolution ofdirectors without a requirement for a resolution of shareholders so long as the amendment does not:●restrict the rights of the shareholders to amend the memorandum of association and articles of association;●change the percentage of shareholders required to pass a resolution of shareholders to amend the memorandum of association and articles ofassociation;●amend the memorandum of association and articles of association in circumstances where the memorandum of association and articles ofassociation cannot be amended by the shareholders; or●amend the provisions of memorandum of association or the articles of association pertaining to “rights attaching to shares,” “rights not varied bythe issue of the shares pari passu,” “variation of rights” and “amendment of memorandum and articles”.50Written Consent of DirectorsUnder Delaware corporate law, directors may act by written consent only on the basis of a unanimous vote. Under British Virgin Islands law, directors’consents need only a majority of directors signing to take effect.Written Consent of ShareholdersUnder Delaware corporate law, unless otherwise provided in the certificate of incorporation, any action to be taken at any annual or special meeting ofstockholders of a corporation, may be taken by written consent of the holders of outstanding stock having not less than the minimum number of votes that wouldbe necessary to take such action at a meeting. As permitted by British Virgin Islands law, shareholders’ consents need only a majority of shareholders signing totake effect. Our memorandum of association and articles of association provide that shareholders may approve corporate matters by way of a resolution consentedto at a meeting of shareholders or in writing by a majority of shareholders entitled to vote thereon.Shareholder ProposalsUnder Delaware corporate law, a shareholder has the right to put any proposal before the annual meeting of shareholders, provided it complies with thenotice provisions in the governing documents. A special meeting may be called by the board of directors or any other person authorized to do so in the governingdocuments, but shareholders may be precluded from calling special meetings. British Virgin Islands law and our memorandum of association and articles ofassociation provide that our directors shall call a meeting of the shareholders if requested in writing to do so by shareholders entitled to exercise at least 30% of thevoting rights in respect of the matter for which the meeting is requested.Sale of AssetsUnder Delaware corporate law, a vote of the stockholders is required to approve the sale of assets only when all or substantially all assets are being sold. Inthe British Virgin Islands, shareholder approval is required when more than 50% of the company’s total assets by value are being disposed of or sold.Dissolution; Winding UpUnder Delaware corporate law, unless the board of directors approves the proposal to dissolve, dissolution must be approved by shareholders holding100% of the total voting power of the corporation. Only if the dissolution is initiated by the board of directors may it be approved by a simple majority of thecorporation’s outstanding shares. Delaware corporate law allows a Delaware corporation to include in its certificate of incorporation a supermajority votingrequirement in connection with dissolutions initiated by the board. As permitted by British Virgin Islands law and our memorandum of association and articles ofassociation, we may be voluntarily liquidated under Part XII of the BVI Act by resolution of directors and resolution of shareholders if we have no liabilities and weare able to pay our debts as they fall due.Redemption of SharesUnder Delaware corporate law, any stock may be made subject to redemption by the corporation at its option or at the option of the holders of such stockprovided there remains outstanding shares with full voting power. Such stock may be made redeemable for cash, property or rights, as specified in the certificate ofincorporation or in the resolution of the board of directors providing for the issue of such stock. As permitted by British Virgin Islands law, and our memorandum ofassociation and articles of association, shares may be repurchased, redeemed or otherwise acquired by us. Our directors must determine that immediately followingthe redemption or repurchase we will be able to satisfy our debts as they fall due and the value of our assets exceeds our liabilities.51Variation of Rights of SharesUnder Delaware corporate law, a corporation may vary the rights of a class of shares with the approval of a majority of the outstanding shares of suchclass, unless the certificate of incorporation provides otherwise. As permitted by British Virgin Islands law, and our memorandum of association and articles ofassociation, if our share capital is divided into more than one class of shares, we may vary the rights attached to any class only with the consent in writing ofholders of not less than threefourths of the issued shares of that class and holders of not less than threefourths of the issued shares of any other class of shareswhich may be affected by the variation.Removal of DirectorsUnder Delaware corporate law, a director of a corporation with a classified board may be removed only for cause with the approval of a majority of theoutstanding shares entitled to vote, unless the certificate provides otherwise. As permitted by British Virgin Islands law and our memorandum of association andarticles of association, directors may be removed by resolution of directors or resolution of shareholders.MergersUnder the BVI Act, two or more companies may merge or consolidate in accordance with the statutory provisions. A merger means the merging of two ormore constituent companies into one of the constituent companies, and a consolidation means the uniting of two or more constituent companies into a newcompany. In order to merger or consolidate, the directors of each constituent company must approve a written plan of merger or consolidation which must beauthorized by a resolution of shareholders.Shareholders not otherwise entitled to vote on the merger or consolidation may still acquire the right to vote if the plan of merger or consolidation containsany provision which, if proposed as an amendment to the memorandum association or articles of association, would entitle them to vote as a class or series on theproposed amendment. In any event, all shareholders must be given a copy of the plan of merger or consolidation irrespective of whether they are entitled to vote atthe meeting or consent to the written resolution to approve the plan of merger or consolidation.Inspection of Books and RecordsUnder Delaware corporate law, any shareholder of a corporation may for any proper purpose inspect or make copies of the corporation’s stock ledger, list ofshareholders and other books and records. Holders of our shares have no general right under British Virgin Islands law to inspect or obtain copies of our list ofshareholders or our corporate records. However, we will provide holders of our shares with annual audited financial statements. See “Where You Can FindAdditional Information.”Conflict of InterestThe BVI Act provides that a director shall, after becoming aware that he is interested in a transaction entered into or to be entered into by the company,disclose that interest to the board of directors of the company. The failure of a director to disclose that interest does not affect the validity of a transaction enteredinto by the director or the company, so long as the director’s interest was disclosed to the board prior to the company’s entry into the transaction or was notrequired to be disclosed (for example where the transaction is between the company and the director himself or is otherwise in the ordinary course of business andon usual terms and conditions). As permitted by British Virgin Islands law and our memorandum of association and articles of association, a director interested in aparticular transaction may vote on it, attend meetings at which it is considered, and sign documents on our behalf which relate to the transaction.52Transactions with Interested ShareholdersDelaware corporate law contains a business combination statute applicable to Delaware public corporations whereby, unless the corporation hasspecifically elected not to be governed by such statute by amendment to its certificate of incorporation, it is prohibited from engaging in certain businesscombinations with an “interested shareholder” for three years following the date that such person becomes an interested shareholder. An interested shareholdergenerally is a person or group who or that owns or owned 15% or more of the target’s outstanding voting stock within the past three years. This has the effect oflimiting the ability of a potential acquirer to make a twotiered bid for the target in which all shareholders would not be treated equally. The statute does not apply if,among other things, prior to the date on which such shareholder becomes an interested shareholder, the board of directors approves either the businesscombination or the transaction that resulted in the person becoming an interested shareholder. This encourages any potential acquirer of a Delaware publiccorporation to negotiate the terms of any acquisition transaction with the target’s board of directors.British Virgin Islands law has no comparable provision. As a result, we cannot avail ourselves of the types of protections afforded by the Delawarebusiness combination statute. However, although British Virgin Islands law does not regulate transactions between a company and its significant shareholders, itdoes provide that such transactions must be entered into bona fide in the best interests of the company and not with the effect of constituting a fraud on theminority shareholders.Independent DirectorsThere are no provisions under Delaware corporate law or under the BVI Act that require a majority of our directors to be independent.Cumulative VotingUnder Delaware corporate law, cumulative voting for elections of directors is not permitted unless the company’s certificate of incorporation specificallyprovides for it. Cumulative voting potentially facilitates the representation of minority shareholders on a board of directors since it permits the minority shareholderto cast all the votes to which the shareholder is entitled on a single director, which increases the shareholder’s voting power with respect to electing such director.There are no prohibitions to cumulative voting under the laws of the British Virgin Islands, but our memorandum of association and articles of association do notprovide for cumulative votingAntitakeover Provisions in Our Memorandum of association and articles of associationSome provisions of our memorandum of association and articles of association may discourage, delay or prevent a change in control of our company ormanagement that shareholders may consider favorable, including provisions that authorize our board of directors to issue preference shares in one or more seriesand to designate the price, rights, preferences, privileges and restrictions of such preference shares.C. MATERIAL CONTRACTS.On January 25, 2018, the Company executed an Asset Exchange Agreement (“AEA”) with C Media Limited, a corporation organized under the laws of theCayman Islands (“C Media”), whereby the Company agreed to purchase all the capital stock and equity interests of LK Technology Ltd, together with its whollyowned subsidiaries MMB Limited and Mobile Media (China) Limited and all respective subsidiaries from C Media in exchange for (i) 185,412,599 ordinary shares ofthe Company, par value $0.01 per share (“Ordinary Shares”), (ii) 1,000,000 preferred shares of Kingtone (“Preferred Shares”) and (iii) all issued and outstandingcapital stock or equity interests of the Company’s subsidiary, Topsky InfoTech Holdings Pte Ltd., and its whollyowned subsidiary Xi’an Softech Co., Ltd.,including all entities effectively controlled by Xi’an Softech Co., Ltd. through contractual arrangements and variable business entities.To consummate the contemplated transactions described above, the Company obtained shareholder consent at a special meeting held on May 20, 2018, (i)to authorize 1,000,000 Preferred Shares, (ii) to authorize additional Ordinary Shares so that total authorized Ordinary Shares is equal to 250,000,000 shares, (iii) to listsuch Ordinary Shares on NASDAQ, and (iv) to approve the transactions contemplated in the Asset Exchange Agreement. Additionally, NASDAQ needed toapprove the contemplated transactions prior to consummation thereof. C Media had the right to terminate the AEA if the closing had not occurred (other thanthrough the failure of C Media to comply fully with its obligations under the AEA) on or before July 31, 2018. The transactions contemplated by the AEA wereconsummated on August 17, 2018.53On January 25, 2018, five shareholders of the Company including its largest shareholder and its Chief Executive Officer executed a Securities PurchaseAgreement, whereby such shareholders agreed to sell a total of 617,988 Ordinary Shares and 282,694 American Depository Shares of the Company to Redstone YYLManagement Limited, a company incorporated in the British Virgin Islands, in exchange for an aggregate purchase price of $1,897,860.09.On August 25, 2018, LK Technology entered into a Stock Purchase Agreement (the “Agreement”) with the shareholders (“Shareholders”) of SuperengineHoldings Limited, a limited liability company organized under the laws of the British Virgin Islands (the “Superengine”), pursuant to which LK Technology acquiredall of the issued and outstanding capital stock of Superengine for an aggregate purchase price of US$60 million (the “Purchase Price”), which are paid by theissuance of our Ordinary Shares in an amount equal to the quotient of (x) the Purchase Price divided by (y) the average of the closing prices of the Ordinary Shareson the NASDAQ Capital Market over the 12 months period preceding July 31, 2018. We are a party to the Agreement in connection with the issuance of theOrdinary Shares and certain other limited purposes.D. EXCHANGE CONTROLS.This section sets forth a summary of the most significant regulations or requirements that affect our business activities in China or our shareholders’ rightto receive dividends and other distributions from us.Regulations on Internet Content ProvidersThe Administrative Measures on Internet Information Services, or the Internet Content Measures, which was promulgated by the State Council onSeptember 25, 2000 and amended on January 8, 2011, set out guidelines on the provision of internet information services. The Internet Content Measures specifiesthat internet information services regarding news, publications, education, medical and health care, pharmacy and medical appliances, among other things, arerequired to be examined, approved and regulated by the relevant authorities. Internet information providers are prohibited from providing services beyond thoseincluded in the scope of their licenses or filings. Furthermore, the Internet Content Measures specifies a list of prohibited content. Internet information providers areprohibited from producing, copying, publishing or distributing information that is humiliating or defamatory to others or that infringes the legal rights of others.Internet information providers that violate such prohibition may face criminal charges or administrative sanctions. Internet information providers must monitor andcontrol the information posted on their websites. If any prohibited content is found, they must remove the content immediately, keep a record of such content andreport to the relevant authorities.The Internet Content Measures classifies internet information services into commercial internet information services and noncommercial internetinformation services. Commercial internet information services refer to services that provide information or services to internet users with charge. A provider ofcommercial internet information services must obtain an ICP License.Regulations on Internet Audiovideo Program ServicesOn December 20, 2007, the MII and the State Administration of Press, Publication, Radio, Film and Television, or the SAPPRFT, jointly issued theAdministrative Provisions for the Internet AudioVideo Program Service, or the Audiovideo Program Provisions, which came into effect on January 31, 2008 andwas amended on August 28, 2015. The Audiovideo Program Provisions defines “internet audiovideo program services” as producing, editing and integrating ofaudiovideo programs, supplying audiovideo programs to the public via the internet, and providing audiovideo programs uploading and transmission services to athird party. Entities providing internet audiovideo programs services must obtain an internet audiovideo program transmission license. Applicants for such licensesshall be stateowned or statecontrolled entities unless an internet audiovideo program transmission license has been obtained prior to the effectiveness of theAudiovideo Program Provisions in accordance with the thenineffect laws and regulations. In addition, foreigninvested enterprises are not allowed to engage inthe abovementioned services. According to the Audiovideo Program Provisions and other relevant laws and regulations, audiovideo programs provided by theentities supplying Internet audiovideo program services shall not contain any illegal content or other content prohibited by the laws and regulations, such as anycontent against the basic principles in the PRC Constitution, any content that damages the sovereignty of the country or national security, and any content thatdisturbs social order or undermine social stability. An audiovideo program that has already been broadcast shall be retained in full for at least 60 days. Movies,television programs and other media content used as Internet audiovideo programs shall comply with relevant administrative regulations on programs broadcaststhrough radio, movie and television channels. Entities providing services related to Internet audiovideo programs shall immediately delete the audiovideoprograms violating laws and regulations, keep relevant records, report relevant authorities and implement other regulatory requirements.54The Categories of the Internet AudioVideo Program Services, or the Audiovideo Program Categories, promulgated by SAPPRFT on March 10, 2017,classifies internet audio/video programs into four categories: (I) Category I internet audio/video program service, which is carried out with a form of radio station ortelevision station; (II) Category II internet audio/video program service, including (a) rebroadcasting service of current political news audio/video programs; (b)hosting, interviewing, reporting and commenting service of arts, entertainment, technology, finance and economics, sports, education and other specializedaudio/video programs; (c) producing (interviewing not included) and broadcasting service of arts, entertainment, technology, finance and economics, sports,education and other specialized audio/video programs; (d) producing and broadcasting service of internet films/dramas; (e) aggregating and broadcasting service offilms, television dramas and cartoons; (f) aggregating and broadcasting service of arts, entertainment, technology, finance and economics, sports, education andother specialized audio/video programs; and (g) live audio/video broadcasting service of cultural activities of common social organizations, sport events or otherorganization activities; and (III) Category III internet audio/video program service, including (a) aggregating service of online audio/video contents, and (b) rebroadcasting service of the audio/video programs uploaded by internet users; and (IV) Category III internet audio/video program service, including (a) rebroadcasting of the radio/television program channels; and (b) rebroadcasting of internet audio/video program channels.On May 27, 2016, the SAPPRFT issued the Notice on Relevant Issues concerning Implementing the Approval Works of Upgrading Mobile Internet AudioVideo Program Service, or the Mobile AudioVideo Program Notice. The Mobile AudioVideo Program Notice provides that the mobile Internet audiovideo programservices shall be deemed Internet audiovideo program service. Entities which have obtained the approvals to provide the Internet audiovideo program servicesmay use mobile WAP websites or mobile applications to provide audiovideo program services. Entities with regulatory approvals may operate mobile applicationsto provide the audiovideo program services The types of the programs shall be within the permitted scope as provided in the licenses and such mobile applicationsshall be filed with the SAPPRFT.Regulations on Production and Operation of Radio/Television ProgramsOn July 19, 2004, the SAPPRFT promulgated the Administrative Measures on the Production and Operation of Radio and Television Programs, or the Radioand Television Program Production Measures, which came into effect on August 20, 2004 and was amended on August 28, 2015. The Radio and Television ProgramProduction Measures provides that any business that produces or operates radio or television programs must first obtain a Radio and Television ProgramProduction and Operation Permit. Entities holding such permits shall conduct their business within the permitted scope as provided in their permits. In addition,foreigninvested enterprises are not allowed to engage in the abovementioned services.Regulations on Online Advertising ServicesOn April 24, 2015, the Standing Committee of the National People’s Congress enacted the Advertising Law of the People’s Republic of China, or the NewAdvertising Law, effective on September 1, 2015. The New Advertising Law increases the potential legal liability of advertising services providers and strengthensregulations of false advertising. On July 4, 2016, the State Administration for Industry and Commerce, or the SAIC, issued the Interim Measures of theAdministration of Online Advertising, or the SAIC Interim Measures, effective on September 1, 2016. The New Advertising Law and the SAIC Interim Measuresrequire that online advertisements may not affect users’ normal internet use and internet popup ads must display a “close” sign prominently and ensure onekeyclosing of the popup windows. The SAIC Interim Measures provides that all online advertisements must be marked “Advertisement” so that viewers can easilyidentify them as such. Moreover, the SAIC Interim Measures treats paid search results as advertisements that are subject to PRC advertisement laws, and requiresthat paid search results be conspicuously identified on search result pages as advertisements. The New Advertising Law and SAIC Interim Measures require us toconduct more stringent examination and monitoring of our advertisers and the content of their advertisements.55Regulations on Online GamesIn September 2009, the GAPP (currently known as the SAPPRFT), together with the National Copyright Administration, and the National Office ofCombating Pornography and Illegal Publications jointly issued the Notice on Further Strengthening on the Administration of Preexamination and Approval ofOnline Game and the Examination and Approval of Imported Online Game, or the Circular 13. The Circular 13 states that foreign investors are not permitted to investin online game operating businesses in the PRC via wholly foreignowned entities, Sinoforeign equity joint ventures or cooperative joint ventures or to exercisecontrol over or participate in the operation of domestic online game businesses through indirect means, such as other joint venture companies or contractual ortechnical arrangements. If the our contractual arrangements were deemed under the Circular 13 to be an “indirect means” for foreign investors to exercise controlover or participate in the operation of a domestic online game business, our contractual arrangements might be challenged by the SAPPRFT. We are not aware ofany online game companies which use the same or similar contractual arrangements having been challenged by the SAPPRFT as using those contractualarrangements as an “indirect means” for foreign investors to exercise control over or participate in the operation of a domestic online game business or having beenpenalized or ordered to terminate operations since the Circular 13 became effective. However it is unclear whether and how the Circular 13 might be interpreted orimplemented in the future. See “Risk Factors—If the PRC government finds that the agreements that establish the structure for operating certain of our operations inChina do not comply with PRC regulations relating to the relevant industries, or if these regulations or the interpretation of existing regulations change in the future,we could be subject to severe penalties or be forced to relinquish our interests in those operations.”The Interim Measures for the Administration of Online Games, or the Online Game Measures, issued by the MOC, which took effect on August 1, 2010 andamended on December 15, 2017, regulates a broad range of activities related to the online games business, including the development, production and operation ofonline games, the issuance of virtual currencies used for online games, and the provision of virtual currency trading services. The Online Game Measures providesthat any entity that is engaged in online game operations must obtain an Network Cultural Business Permit, and require the content of an imported online game to beexamined and approved by the MOC prior to the game’s launch and require a domestic online game to be filed with the MOC within 30 days after its launch. TheNotice of the Ministry of Culture on the Implementation of the Interim Measures for the Administration of Online Games, which was issued by the MOC on July 29,2010 to implement the Online Game Measures, (i) requires online game operators to protect the interests of online game users and specifies that certain terms thatmust be included in service agreements between online game operators and the users of their online games, (ii) requires content review of imported online gamesand filing procedures for domestic online games, (iii) emphasizes the protection of minors playing online games, and (iv) requests online game operators to promoterealname registration by their game users.Regulations on Information Security, Censorship and PrivacyThe Standing Committee of the National People’s Congress, China’s national legislative body, enacted the Decisions on the Maintenance of InternetSecurity on December 28, 2000 that may subject persons to criminal liabilities in China for any attempt to use the internet to: (i) gain improper entry to a computer orsystem of strategic importance; (ii) disseminate politically disruptive information; (iii) leak state secrets; (iv) spread false commercial information or (v) infringe uponintellectual property rights. In 1997, the Ministry of Public Security issued the Administration Measures on the Security Protection of Computer InformationNetwork with International Connections which prohibits using the internet to leak state secrets or to spread socially destabilizing materials. If an ICP license holderviolates these measures, the PRC government may revoke its ICP license and shut down its websites. Pursuant to the Ninth Amendment to the Criminal Law issuedby the Standing Committee of the National People’s Congress on August 29, 2015, effective on November 1, 2015, any ICP provider that fails to fulfill the obligationsrelated to internet information security as required by applicable laws and refuses to take corrective measures, will be subject to criminal liability for (i) any largescale dissemination of illegal information; (ii) any severe effect due to the leakage of users’ personal information; (iii) any serious loss of evidence of criminalactivities; or (iv) other severe situations, and any individual or entity that (i) sells or provides personal information to others unlawfully or (ii) steals or illegallyobtains any personal information will be subject to criminal liability in severe situations.56The Cybersecurity Law of the PRC, or the Cybersecurity Law, which was promulgated on November 7, 2016 by the Standing Committee of the NationalPeople’s Congress and came into effect on June 1, 2017, provides that network operators shall meet their cyber security obligations and shall take technicalmeasures and other necessary measures to protect the safety and stability of their networks. Under the Cybersecurity Law, network operators are subject to varioussecurity protectionrelated obligations, including: (i) network operators shall comply with certain obligations regarding maintenance of the security of internetsystems; (ii) network operators shall verify users’ identities before signing agreements or providing certain services such as information publishing or realtimecommunication services; (iii) when collecting or using personal information, network operators shall clearly indicate the purposes, methods and scope of theinformation collection, the use of information collection, and obtain the consent of those from whom the information is collected; (iv) network operators shall strictlypreserve the privacy of user information they collect, and establish and maintain systems to protect user privacy; (v) network operators shall strengthenmanagement of information published by users, and when they discover information prohibited by laws and regulations from publication or dissemination, theyshall immediately stop dissemination of that information, including taking measures such as deleting the information, preventing the information from spreading,saving relevant records, and reporting to the relevant governmental agencies.Regulations on Intellectual Property RightsRegulations on CopyrightThe Copyright Law of the PRC, or the Copyright Law, which took effect on June 1, 1991 and was amended in 2001 and in 2010, provides that Chinesecitizens, legal persons, or other organizations shall, whether published or not, own copyright in their copyrightable works, which include, among others, works ofliterature, art, natural science, social science, engineering technology and computer software. Copyright owners enjoy certain legal rights, including right ofpublication, right of authorship and right of reproduction. The Copyright Law as revised in 2010 extends copyright protection to Internet activities, productsdisseminated over the Internet and software products. In addition, Copyright Law provides for a voluntary registration system administered by the China CopyrightProtection Center, or the CPCC. According to the Copyright Law, an infringer of the copyrights shall be subject to various civil liabilities, which include ceasinginfringement activities, apologizing to the copyright owners and compensating the loss of copyright owner. Infringers of copyright may also subject to fines and/oradministrative or criminal liabilities in severe situations.The Computer Software Copyright Registration Measures, or the Software Copyright Measures, promulgated by the State Council on December 20, 2001and amended on January 30, 2013, regulates registrations of software copyright, exclusive licensing contracts for software copyright and assignment agreements.The National Copyright Administration, or the NCA administers software copyright registration and the CPCC, is designated as the software registration authority.The CPCC shall grant registration certificates to the Computer Software Copyrights applicants which meet the requirements of both the Software CopyrightMeasures and the Computer Software Protection Regulations (Revised in 2013).The Provisions of the Supreme People’s Court on Certain Issues Related to the Application of Law in the Trial of Civil Cases Involving Disputes onInfringement of the Information Network Dissemination Rights specifies that disseminating works, performances or audiovideo products by the internet users orthe internet service providers via the internet without the permission of the copyright owners shall be deemed to have infringed the right of dissemination of thecopyright owner.57The Measures for Administrative Protection of Copyright Related to Internet, which was jointly promulgated by the NCA and the MIIT on April 29, 2005and became effective on May 30, 2005, provides that upon receipt of an infringement notice from a legitimate copyright holder, an ICP operator must take remedialactions immediately by removing or disabling access to the infringing content. If an ICP operator knowingly transmits infringing content or fails to take remedialactions after receipt of a notice of infringement that harms public interest, the ICP operator could be subject to administrative penalties, including an order to ceaseinfringing activities, confiscation by the authorities of all income derived from the infringement activities, or payment of fines.On May 18, 2006, the State Council promulgated the Regulations on the Protection of the Right to Network Dissemination of Information (as amended in2013). Under these regulations, an owner of the network dissemination rights with respect to written works or audio or video recordings who believes thatinformation storage, search or link services provided by an Internet service provider infringe his or her rights may require that the Internet service provider delete, ordisconnect the links to, such works or recordings.Patent LawsAccording to the Patent Law of the PRC (Revised in 2008), the State Intellectual Property Office is responsible for administering patent law in the PRC. Thepatent administration departments of provincial, autonomous region or municipal governments are responsible for administering patent law within their respectivejurisdictions. The Chinese patent system adopts a firsttofile principle, which means that when more than one person file different patent applications for the sameinvention, only the person who files the application first is entitled to obtain a patent of the invention. To be patentable, an invention or a utility model must meetthree criteria: novelty, inventiveness and practicability. A patent is valid for twenty years in the case of an invention and ten years in the case of utility models anddesigns.Trademark LawsTrademarks are protected by the Trademark Law of the PRC (Revised in 2013) which was adopted in 1982 and subsequently amended in 1993, 2001 and 2013respectively as well as by the Implementation Regulations of the PRC Trademark Law adopted by the State Council in 2002 and as most recently amended on April29, 2014. The Trademark Office under the SAIC handles trademark registrations. The Trademark Office grants a tenyear term to registered trademarks and the termmay be renewed for another tenyear period upon request by the trademark owner. A trademark registrant may license its registered trademarks to another party byentering into trademark license agreements, which must be filed with the Trademark Office for its record. As with patents, the Trademark Law has adopted a firsttofile principle with respect to trademark registration. If a trademark applied for is identical or similar to another trademark which has already been registered or subjectto a preliminary examination and approval for use on the same or similar kinds of products or services, such trademark application may be rejected. Any personapplying for the registration of a trademark may not injure existing trademark rights first obtained by others, nor may any person register in advance a trademark thathas already been used by another party and has already gained a “sufficient degree of reputation” through such party’s use.Regulations on Domain NamesThe MIIT promulgated the Measures on Administration of Internet Domain Names, or the Domain Name Measures, on August 24, 2017, which took effecton November 1, 2017 and replaced the Administrative Measures on China Internet Domain Name promulgated by MII on November 5, 2004. According to theDomain Name Measures, the MIIT is in charge of the administration of PRC internet domain names. The domain name registration follows a firsttofile principle.Applicants for registration of domain names shall provide the true, accurate and complete information of their identities to domain name registration serviceinstitutions. The applicants will become the holder of such domain names upon the completion of the registration procedure.Relevant Regulations of the Hightech EnterpriseThe Ministry of Information Industry, the Ministry of Science and Technology and the State Tax Bureau collectively promulgated and issued the“Certifying Standard and Managing Measures for Hightech Enterprises” and “the Hightech Areas of Main National Support” on April 14, 2008 to certify the Hightech enterprise and encourage and support the development of the Chinese Hightech enterprises. Under the Hightech Enterprises Measures, the enterprise canenjoy the favorable tax policy when it is certified as a Hightech enterprise by the Ministry of Information Industry, the Ministry of Science and Technology and theState Tax Bureau or with its provincial branch according to the stipulated standard. The software and computer and network technology are recognized as the mainnational supported Hightech field. Kingtone Information is a Hightech enterprise and enjoys a favorable income tax rate of 15%.58Laws and Regulations of Intellectual Property RightsChina has adopted legislation governing intellectual property rights, including patents, copyrights and trademarks. China is a signatory to the maininternational conventions on intellectual property rights and became a member of the Agreement on Trade Related Aspects of Intellectual Property Rights upon itsaccession to the WTO in December 2001.PatentsThe “Patent Law of the People’s Republic of China” promulgated by the Standing Committee of the National People's Congress, adopted in 1985 andrevised in 1992, 2001 and 2008, protects registered patents. The State Intellectual Property Office of PRC handles granting patent rights, providing for a twentyyearpatent term for inventions and a tenyear patent term for utility models and designs. As we disclosed in Item 4, of this transition report on Form 20F, throughKingtone Information, we have been granted one invention patent “wireless video transmission system based on BREW platform” by the State Intellectual PropertyOffice (“SIPO”) of PRC on September 23, 2009 and therefore such invention is entitled to all the protections provided under the Patent Law for twenty years.Computer Software Copyright and AdministrationOn December 20, 2001, the State Council of PRC issued the “Regulation for Computer Software Protection of the People’s Republic of China” (the“Regulation for Computer Software Protection”) which became effective on January 1, 2002 to protect the interests of copyright owners, to promote the research andapplication and to encourage the development of the Chinese software industry. Under the Regulation for Computer Software Protection, natural persons, legalpersons or any other organizations shall have a copyright on the software developed by such persons no matter whether such software has been published. Theprotection period of software copyrights owned by the legal person or other organization is fifty years and expires on December 31 of the fiftieth year from the initialpublication date of such computer software. Currently, Kingtone Information has twelve registration certificates for software copyrights.TrademarksThe “Trademark Law of the People’s Republic of China” promulgated by the State Council of PRC, adopted in 1982 and revised in 1993 and 2001, protectsregistered trademarks. The Trademark Office under the Chinese State Administration for Industry and Commerce handles trademark registrations and grants a termof ten years to registered trademarks which are renewable for another ten years after the application to the Trademark Office by the owners of the trademarks.Trademark license agreements must be filed with the Trademark Office for record. China has a “firsttoregister” system that requires no evidence of prior use orownership. Kingtone Information has its registered trademarks as described in Item 4 of this transition report on Form 20F. Accordingly, such trademarks areentitled to the protection under the Trademark Law.Foreign Currency ExchangeOn August 29, 2008, the SAFE issued the Notice of the General Affairs Department of the State Administration of Foreign Exchange on the RelevantOperating Issues concerning the Improvement of the Administration of Payment and Settlement of Foreign Currency Capital of Foreignfunded Enterprises, orCircular 142. Pursuant to Circular 142, RMB converted from the foreign currencydenominated capital of a foreigninvested company may only be used for purposeswithin the business scope approved by the applicable governmental authority and may not be used for equity investments within the PRC unless specificallyprovided for otherwise. The use of such Renminbi capital may not be changed without SAFE’s approval and may not in any case be used to repay Renminbi loans ifthe proceeds of such loans have not been used.59See “Risk Factors — Risks Related to Doing Business in China — PRC regulation of loans and direct investment by offshore holding companies to PRCentities may delay or prevent us from using the proceeds of our initial public offering to make loans or additional capital contributions to our PRC operatingsubsidiaries, which could materially and adversely affect our liquidity and our ability to fund and expand our business”.Dividend DistributionWe are a British Virgin Islands holding company and substantially all of our operations are conducted through LK Technology. We rely on dividends andother distributions from our LK Technology and its subsidiaries to provide us with our cash flow and allow us to pay dividends on the shares underlying our ADSsand meet our other obligations. The principal regulations governing distribution of dividends paid by wholly foreignowned enterprises include:1.Wholly ForeignOwned Enterprise Law (1986), as amended; and2.Implementation Rules on Wholly ForeignOwned Enterprise Law (1990), as amended.Under these regulations, wholly foreignowned enterprises in China may pay dividends only out of their accumulated profits, if any, determined inaccordance with PRC accounting standards and regulations. In addition, wholly foreignowned enterprises in China are required to set aside at least 10% of theiraftertax profit based on PRC accounting standards each year to its general reserves until the accumulative amount of such reserves reach 50% of its registeredcapital. These reserves are not distributable as cash dividends. The board of directors of a FIE has the discretion to allocate a portion of its aftertax profits to staffwelfare and bonus funds, which may not be distributed to equity owners except in the event of liquidation.Regulation of Foreign Exchange in Certain Onshore and Offshore TransactionsIn October 2005, the SAFE issued the Notice on Issues Relating to the Administration of Foreign Exchange in Fundraising and Return InvestmentActivities of Domestic Residents Conducted via Offshore Special Purpose Companies, or SAFE Notice 75, which became effective as of November 1, 2005, and wasfurther supplemented by two implementation notices issued by the SAFE on November 24, 2005 and May 29, 2007, respectively. Under Circular 75, prior registrationwith the local SAFE branch is required for PRC residents to establish or to control an offshore company for the purposes of financing that offshore company withassets or equity interests in an onshore enterprise located in the PRC. An amendment to the registration or filing with the local SAFE branch by such PRC resident isalso required for the injection of equity interests or assets of an onshore enterprise in the offshore company or overseas funds raised by such offshore company, orany other material change with respect to the offshore company in connection with any increase or decrease of capital, transfer of shares, merger, division, equityinvestment, debt investment, or creation of any security interest over any assets located in the PRC.Under SAFE Notice 75, PRC residents are further required to repatriate into the PRC all of their dividends, profits or capital gains obtained from theirshareholdings in the offshore entity within 180 days of their receipt of such dividends, profits or capital gains. The registration and filing procedures under SAFENotice 75 are prerequisites for other approval and registration procedures necessary for capital inflow from the offshore entity, such as inbound investments orshareholders loans, or capital outflow to the offshore entity, such as the payment of profits or dividends, liquidating distributions, equity sale proceeds, or thereturn of funds upon a capital reduction. Therefore, failure to comply with such registration may subject us to certain restrictions on, including but not limited to, theincrease of the registered capital of our PRC subsidiary, making loans to our PRC subsidiary, and making distributions to us from our onshore companies.Regulations of Overseas Investments and ListingsOn August 8, 2006, six PRC regulatory agencies, including the MOFCOM, the State Assets Supervision and Administration Commission, the StateAdministration for Taxation, the State Administration for Industry and Commerce, the CSRC and the SAFE, jointly adopted the New M&A Rule, which becameeffective on September 8, 2006. This regulation, among other things, includes provisions that purport to require that an offshore SPV formed for purposes ofoverseas listing of equity interests in PRC companies and controlled directly or indirectly by PRC companies or individuals obtain the approval of the CSRC prior tothe listing and trading of such SPV’s securities on an overseas stock exchange.60On September 21, 2006, the CSRC published on its official website procedures regarding its approval of overseas listings by SPVs. The CSRC approvalprocedures require the filing of a number of documents with the CSRC and it would take several months to complete the approval process.The application of the New M&A Rule with respect to overseas listings of SPVs remains unclear with no consensus currently existing among the leadingPRC law firms regarding the scope of the applicability of the CSRC approval requirement.We believe that, based on our understanding of the current PRC laws, regulations and rules and the procedures announced on September 21, 2006, there isno requirement in this regulation that would require an application to be submitted to the MOFCOM or the CSRC for the approval of the listing and trading of ourADSs on the NASDAQ Capital Market.See “Risk Factors — Risks Related to Doing Business in China — If we were required to obtain the prior approval of the China Securities RegulatoryCommission, or CSRC, of the listing and trading of our ADSs on the NASDAQ Capital Market, we may face regulatory actions or other sanctions from the CSRC orother PRC regulatory agencies.”E. TAXATIONThe following discussion sets forth the material British Virgin Islands, PRC and U.S. federal income tax consequences of an investment in our ADSs andthe ordinary shares represented by our ADSs, sometimes referred to collectively as the “securities”. It is based upon laws and relevant interpretations thereof ineffect as of the date of this report, all of which are subject to change. This discussion does not deal with all possible tax consequences relating to an investment inthe securities, such as the tax consequences under state, local and other tax laws. As used in this discussion, “we,” “our” and “us” refers only to LuokungTechnology Ltd.British Virgin Islands TaxationUnder the law of the British Virgin Islands as currently in effect, a holder of the securities who is not a resident of the British Virgin Islands is not liable forBritish Virgin Islands tax on dividends paid with respect to the securities and all holders of the securities are not liable to the British Virgin Islands for tax on gainsrealized during that year on the sale or disposal of such ordinary shares. The British Virgin Islands does not impose a withholding tax on dividends paid by acompany incorporated or reregistered under the BVI Act.There are no capital gains, gift or inheritance taxes levied by the British Virgin Islands on companies incorporated under the BVI Act. In addition, shares ofcompanies incorporated under the BVI Act are not subject to transfer taxes, stamp duties or similar charges.There is no income tax treaty or convention currently in effect between the United States and the British Virgin Islands or between China and the BritishVirgin Islands.61People’s Republic of China TaxationIn 2007, the PRC National People’s Congress enacted the new Enterprise Income Tax Law (the “EIT Law”), which became effective on January 1, 2008. Thenew EIT Law imposes a single uniform income tax rate of 25% on all Chinese enterprises, including foreigninvested enterprises, and levies a withholding tax rate of10% on dividends payable by Chinese subsidiaries to their foreign shareholders unless any such foreign shareholders’ jurisdiction of incorporation has a tax treatywith China that provides for a different withholding agreement. Under the new EIT Law, enterprises established outside China but deemed to have a “de factomanagement body” within the country may be considered “resident enterprises” for Chinese tax purposes and, therefore, may be subject to an enterprise income taxrate of 25% on their worldwide income. Pursuant to the implementation rules of the new EIT Law, a “de facto management body” is defined as a body that hasmaterial and overall management control over the business, personnel, accounts and properties of the enterprise. Although substantially all members of ourmanagement are located in China, it is unclear whether Chinese tax authorities would require (or permit) us to be treated as PRC resident enterprises. If we aredeemed a Chinese tax resident enterprise, we may be subject to an enterprise income tax rate of 25% on our worldwide income, excluding dividends received directlyfrom another Chinese tax resident enterprise, as well as PRC enterprise income tax reporting obligations. If we are not deemed to be a Chinese tax resident enterprise,we may be subject to certain PRC withholding taxes. See “Risk Factors — Risks Related to Doing Business in China — Our holding company structure may limit thepayment of dividends.” As a result of such changes, our historical tax rates may not be indicative of our tax rates for future periods and the value of our ADSs orordinary shares may be adversely affected. If we are deemed a PRC resident enterprise and investors’ gain from the sales of the securities and dividends payable byus are deemed sourced from China, such gains and dividends payable by us may be subject to PRC tax. See “Risk Factors — Risks Related to Doing Business inChina — If we were deemed a “resident enterprise” by PRC tax authorities, we could be subject to tax on our global income at the rate of 25% under the New EITLaw and our nonPRC shareholders could be subject to certain PRC taxes.United States Federal Income TaxationGeneralThe following is a discussion of the material U.S. federal income tax consequences to an investor of purchasing, owning and disposing of our securities.This discussion does not address any aspects of U.S. federal gift or estate tax or the state, local or nonU.S. tax consequences of an investment in the securities.YOU SHOULD CONSULT YOUR OWN TAX ADVISORS CONCERNING THE U.S. FEDERAL, STATE, LOCAL AND NONU.S. TAX CONSEQUENCES OFPURCHASING, OWNING AND DISPOSING OF THE SECURITIES IN YOUR PARTICULAR SITUATION.This discussion applies only to those investors that purchase the securities in this offering and that hold the securities as capital assets within the meaningof section 1221 of the Internal Revenue Code of 1986, as amended (the “Code”). This section does not apply to holders that may be subject to special tax rules,including but not limited to:1.dealers in securities or currencies;2.traders in securities that elect to use a marktomarket method of accounting;3.banks, insurance companies or certain financial institutions;4.taxexempt organizations;5.governments or agencies or instrumentalities thereof;6.partnerships or other entities treated as partnerships or other passthrough entities for U.S. federal income tax purposes or persons holding thesecurities through such entities;7.regulated investment companies or real estate investment trusts;8.holders subject to the alternative minimum tax;9.holders that actually or constructively own 10% or more of the total combined voting power of all classes of our shares entitled to vote;10.holders that acquired the securities pursuant to the exercise of employee stock options, in connection with employee stock incentive plans orotherwise as compensation;11.holders that hold the securities as part of a straddle, hedging or conversion transaction; or12.holders whose functional currency is not the U.S. dollar.62This section is based on the Code, its legislative history, existing and proposed U.S. Treasury regulations, published rulings and other administrativeguidance of the U.S. Internal Revenue Service (the “IRS”) and court decisions, all as in effect on the date hereof. These laws are subject to change or differentinterpretation by the IRS or a court, possibly on a retroactive basis.We have not sought, and will not seek, a ruling from the IRS as to any U.S. federal income tax consequence described herein. The IRS may disagree withthe discussion herein, and its determination may be upheld by a court. Moreover, there can be no assurance that future legislation, regulation, administrative rulingsor court decisions will not adversely affect the accuracy of the statements in this discussion.The discussion below of the U.S. federal income tax consequences to “U.S. Holders” will apply to a beneficial owner of the securities that is for U.S. federalincome tax purposes:1.a citizen or resident of the United States;2.a corporation (or other entity treated as a corporation) that is created or organized (or treated as created or3.organized) under the laws of the United States, any state thereof or the District of Columbia;4.an estate whose income is subject to U.S. federal income tax regardless of its source; or5.a trust if (a) a U.S. court can exercise primary supervision over the trust’s administration and one or more U.S.6.persons are authorized to control all substantial decisions of the trust, or (b) if the trust has a valid election in effect under applicable U.S.Treasury regulations to be treated as a U.S. person.If a beneficial owner of the securities is not described as a U.S. Holder and is not an entity treated as a partnership or other passthrough entity for U.S.federal income tax purposes, such owner will be considered a “NonU.S. Holder.” The material U.S. federal income tax consequences applicable specifically to NonU.S. Holders are described below under the heading “Tax Consequences to NonU.S. Holders.”If a partnership (including for this purpose any entity treated as a partnership for U.S. tax purposes) is a beneficial owner of the securities, the U.S. taxtreatment of a partner in the partnership generally will depend on the status of the partner and the activities of the partnership. A holder of the securities that is apartnership or partners in such a partnership should consult their own tax advisors about the U.S. federal income tax consequences of holding and disposing of thesecurities.This discussion assumes that any distributions made (or deemed made) on the securities and any consideration received by a holder in consideration forthe sale or other disposition of the securities will be in U.S. dollars. This discussion also assumes that the representations contained in the Deposit Agreement aretrue and that the obligations in the Deposit Agreement and any related agreement will be complied with in accordance with their terms. Finally, this discussionassumes that each ADS will only represent ordinary shares in us, and will not represent any other type of security, such as a bond, cash or other property.63For U.S. federal income tax purposes, a holder of an ADS will be treated as the beneficial owner of the shares represented by such ADS and an exchange ofan ADS for ordinary shares will not be subject to U.S. federal income tax. The U.S. Treasury has expressed concerns that parties to whom ADSs are prereleased, orintermediaries in the chain of ownership between holders of ADSs and the issuer of the securities underlying the ADSs may be taking actions that are inconsistentwith the claiming of foreign tax credits by U.S. Holders of ADSs. Such actions would also be inconsistent with the claiming of the reduced rate of tax applicable todividends received by certain noncorporate U.S. Holders, including individual U.S. Holders, as described below under “Tax Consequences to U.S.Holders — Taxation of Distributions.” Accordingly, the availability of foreign tax credits or the reduced tax rate for dividends received by certain noncorporate U.S.Holders, including individual U.S. Holders, could be affected by actions taken by parties to whom the ADSs are released, or by future actions by the U.S. Treasury.Tax Consequences to U.S. HoldersTaxation of DistributionsSubject to the passive foreign investment company, or PFIC, rules discussed below, the gross amount of any cash distributions we make with respect to aU.S. Holder in respect of such U.S. Holder’s ADSs or shares will generally be treated as dividend income if the distributions are made from our current oraccumulated earnings and profits, calculated according to U.S. federal income tax principles. Cash dividends will generally be subject to U.S. federal income tax asordinary income on the day the U.S. Holder actually or constructively receives such income. With respect to noncorporate U.S. Holders for taxable years beginningbefore January 1, 2011, dividends may be taxed at the lower applicable longterm capital gains rate provided that (a) our ADSs or shares are readily tradable on anestablished securities market in the United States, or, in the event we are deemed to be a Chinese “resident enterprise” under the EIT Law (as described above under“People’s Republic of China Taxation”), we are eligible for the benefits of the income tax treaty between the United States and the PRC (the “U.S.PRC Tax Treaty”),(b) we are not a PFIC, as discussed below, for either the taxable year in which the dividend was paid or the preceding taxable year, and (c) certain holding periodrequirements are met. Under published IRS authority, ADSs are considered for purposes of clause (a) above to be readily tradable on an established securitiesmarket in the United States only if they are listed on certain exchanges, which presently include the NASDAQ Capital Market. U.S. Holders should consult their owntax advisors regarding the availability of the lower rate for any dividends paid with respect to our ADSs or shares.Dividends will not be eligible for the dividendsreceived deduction allowed to U.S. corporations in respect of dividends received from other U.S.corporations. Generally, if we distribute noncash property as a dividend (other than pro rata distributions of our shares) out of our current or accumulated earningsand profits (as determined for U.S. federal income tax purposes), a U.S. Holder generally will include in income an amount equal to the fair market value of theproperty, on the date that it is distributed.Distributions in excess of current and accumulated earnings and profits, as determined for U.S. federal income tax purposes, will be treated as a nontaxablereturn of capital to the extent of the U.S. Holder’s basis in its shares or ADSs and thereafter as capital gain. However, we do not plan on calculating our earnings andprofits in accordance with U.S. federal income tax principles. U.S. holders therefore should generally assume that any distributions paid by us will be treated asdividends for U.S. federal income tax purposes.If PRC taxes apply to dividends paid by us to a U.S. Holder (see “People’s Republic of China Taxation,” above), such taxes may be treated as foreign taxeseligible for credit against such holder’s U.S. federal income tax liability (subject to certain limitations), and a U.S. Holder may be entitled to certain benefits under theU.S.PRC Tax Treaty. The rules relating to the U.S. foreign tax credit are complex. U.S. Holders should consult their own tax advisors regarding the creditability ofany such PRC tax and their eligibility for the benefits of the U.S.PRC Tax Treaty.64Taxation of Dispositions of SharesSubject to the PFIC rules discussed below, a U.S. holder that sells or otherwise disposes of its shares will recognize capital gain or loss for U.S. federalincome tax purposes equal to the difference between the amount realized and such U.S. Holder’s tax basis in its shares. Prior to January 1, 2011, capital gains of anoncorporate U.S. holder are generally taxed at a maximum rate of 15% where the property is held for more than one year (and 20% thereafter). The ability to deductcapital losses is subject to limitations.If PRC taxes apply to any gain from the disposition of our shares by a U.S. Holder, such taxes may be treated as foreign taxes eligible for credit against suchholder’s U.S. federal income tax liability (subject to certain limitations), and a U.S. Holder may be entitled to certain benefits under the U.S.PRC Tax Treaty. U.S.Holders should consult their own tax advisors regarding the creditability of any such PRC tax and their eligibility for the benefits of the U.S.PRC Tax Treaty.Passive Foreign Investment CompanyWe do not expect to be a PFIC for U.S. federal income tax purposes for our current tax year or in the foreseeable future. The determination of whether or notwe are a PFIC in respect of any of our taxable years is a factual determination that cannot be made until the close of the applicable tax year and that is based on thetypes of income we earn and the value and composition of our assets (including goodwill), all of which are subject to change. Therefore, we can make no assurancesthat we will not be a PFIC in respect of our current taxable year or in the future.In general, we will be a PFIC in any taxable year if either:1.at least 75% of our gross income for the taxable year is passive income; or2.at least 50% of the value, determined on the basis of a quarterly average, of our assets is attributable to assets that produce or are held for theproduction of passive income.Passive income includes dividends, interest, royalties, rents (other than certain rents and royalties derived in the active conduct of a trade or business), theexcess of gains over losses from certain types of transactions in commodities, annuities and gains from assets that produce passive income. We will be treated asowning our proportionate share of the assets and earning our proportionate share of the income of any corporation in which we own, directly or indirectly, at least25% (by value) of the stock.If we are treated as a PFIC in any year during which a U.S. Holder owns the securities, and such U.S. Holder did not make a marktomarket election, asdescribed below, the U.S. Holder will be subject to special rules with respect to:1.any gain recognized by the U.S. Holder on the sale or other disposition of its shares; and any excess distribution that we make to the U.S. Holder(generally, the excess of the amount of any distributions to such U.S. Holder during a single taxable year of such U.S. Holder over 125% of theaverage annual distributions received by such U.S. Holder in respect of the shares during the three preceding taxable years of such U.S. Holder or,if shorter, such U.S. Holder holding period for the shares).Under these rules:2.the gain or excess distribution will be allocated ratably over the U.S. Holder’s holding period for the shares;3.the amount allocated to the U.S. Holder’s taxable year in which it realized the gain or excess distribution or to the period in the U.S. Holder’sholding period before the first day of our first taxable year in which we are a PFIC will be taxed as ordinary income;4.the amount allocated to other taxable years (or portions thereof) of the U.S. Holder and included in its holding period will be taxed at the highesttax rate in effect for that year; and5.the interest charge generally applicable to underpayments of tax will be imposed in respect of the tax attributable to each such other taxable yearof the U.S. Holder. 6.Special rules apply for calculating the amount of the foreign tax credit with respect to excess distributions by a PFIC.65Alternatively, if a U.S. Holder, at the close of its taxable year, owns ordinary shares in a PFIC that are treated as marketable stock, the U.S. Holder may makea marktomarket election with respect to such shares for such taxable year. Our shares will be “marketable” to the extent that they remain regularly traded on anational securities exchange, such as the NASDAQ Capital Market. If a U.S. Holder makes this election in a timely fashion, it will not be subject to the PFIC rulesdescribed above. Instead, in general, the U.S. Holder will include as ordinary income each year the excess, if any, of the fair market value of its shares at the end ofthe taxable year over its adjusted basis in its shares. Any ordinary income resulting from this election would generally be taxed at ordinary income tax rates andwould not be eligible for the reduced rate of tax applicable to qualified dividend income. The U.S. Holder will also be allowed to take an ordinary loss in respect ofthe excess, if any, of the adjusted basis of its shares over the fair market value at the end of the taxable year (but only to the extent of the net amount of previouslyincluded income as a result of the marktomarket election). The U.S. Holder’s basis in the shares will be adjusted to reflect any such income or loss amounts. U.S.Holders should consult their own tax advisor regarding potential advantages and disadvantages of making a marktomarket election with respect to their shares.Alternatively, a U.S. Holder of stock in a PFIC may avoid the PFIC tax consequences described above in respect to our or shares by making a timely“qualified electing fund” election to include in income its pro rata share of our net capital gains (as longterm capital gain) and other earnings and profits (asordinary income), on a current basis, in each case whether or not distributed, in the taxable year of the U.S. Holder in which or with which our taxable year ends.However, the qualified electing fund election is available only if the PFIC provides such U.S. Holder with certain information regarding its earnings and profits asrequired under applicable U.S. Treasury regulations. We do not intend to furnish the information that a U.S. Holder would need in order to make a qualified electingfund election. Therefore, U.S. Holders will not be able to make or maintain such election with respect to their or shares.If a U.S. Holder owns our shares or during any year that we are a PFIC, such holder must file U.S. Internal Revenue Service Form 8621 regarding suchholder’s shares or and the gain realized on the disposition of the shares. The reduced tax rate for dividend income, discussed in “Taxation of Distributions,” is notapplicable to dividends paid by a PFIC. U.S. Holders should consult with their own tax advisors regarding reporting requirements with respect to their shares.Tax Consequences to NonU.S. HoldersDividends paid to a NonU.S. Holder in respect of our or shares generally will not be subject to U.S. federal income tax, unless the dividends are effectivelyconnected with the NonU.S. Holder’s conduct of a trade or business within the United States (and, if required by an applicable income tax treaty, are attributable toa permanent establishment or fixed base that such holder maintains in the United States).In addition, a NonU.S. Holder generally will not be subject to U.S. federal income tax on any gain attributable to a sale or other disposition of our or sharesunless such gain is effectively connected with its conduct of a trade or business in the United States (and, if required by an applicable income tax treaty, isattributable to a permanent establishment or fixed base that such holder maintains in the United States) or the NonU.S. Holder is an individual who is present in theUnited States for 183 days or more in the taxable year of sale or other disposition and certain other conditions are met (in which case, such gain from United Statessources generally is subject to tax at a 30% rate or a lower applicable tax treaty rate).Dividends and gains that are effectively connected with the NonU.S. Holder’s conduct of a trade or business in the United States (and, if required by anapplicable income tax treaty, are attributable to a permanent establishment or fixed base in the United States) generally will be subject to tax in the same manner as fora U.S. Holder and, in the case of a NonU.S. Holder that is a corporation for U.S. federal income tax purposes, may also be subject to an additional branch profits taxat a 30% rate or a lower applicable tax treaty rate.66Information Reporting and Backup Withholding In general, information reporting for U.S. federal income tax purposes generally should apply to distributions made on the securities within the UnitedStates to a noncorporate U.S. Holder and to the proceeds from sales and other dispositions of the securities by a noncorporate U.S. Holder to or through a U.S.office of a broker. Payments made (and sales and other dispositions effected at an office) outside the United States generally should be subject to informationreporting in limited circumstances.Dividend payments made to U.S. Holders and proceeds paid from the sale or other disposition the securities may be subject to information reporting to theIRS and possible U.S. federal backup withholding at a current rate of 28%. Certain exempt recipients, such as corporations, are not subject to these informationreporting requirements. Backup withholding will not apply to a U.S. Holder who furnishes a correct taxpayer identification number and makes any other requiredcertification, or who is otherwise exempt from backup withholding. U.S. Holders who are required to establish their exempt status must provide a duly executed IRSForm W9.A NonU.S. Holder generally may eliminate the requirement for information reporting and backup withholding by providing certification of its foreignstatus, under penalties of perjury, on a duly executed applicable IRS Form W8 or by otherwise establishing an exemption.Backup withholding is not an additional tax. Rather, the amount of any backup withholding will be allowed as a credit against a U.S. Holder’s or a nonU.S.Holder’s U.S. federal income tax liability and may entitle such holder to a refund, provided that certain required information is timely furnished to the IRS.PROSPECTIVE PURCHASERS OF OUR SECURITIES SHOULD CONSULT WITH THEIR OWN TAX ADVISORS REGARDING THE APPLICATION OFTHE U.S. FEDERAL INCOME TAX LAWS TO THEIR PARTICULAR SITUATIONS AS WELL AS ANY ADDITIONAL TAX CONSEQUENCES RESULTING FROMPURCHASING, HOLDING OR DISPOSING OF OUR SECURITIES, INCLUDING THE APPLICABILITY AND EFFECT OF THE TAX LAWS OF ANY STATE, LOCALOR NONU.S. JURISDICTION, INCLUDING ESTATE, GIFT, AND INHERITANCE LAWS AND APPLICABLE TAX TREATIES.F. DIVIDENDS AND PAYING AGENTS.Not applicable.G. STATEMENT BY EXPERTS.None.H. DOCUMENTS ON DISPLAY.We previously filed a registration statement on Form F1 (File No. 333166056) with the SEC relating to our initial public offering in May 2010. This transition reportdoes not contain all of the information in the registration statement and the exhibits and financial statements included with the registration statement. References inthis transition report to any of our contracts, agreements or other documents are not necessarily complete, and you should refer to the exhibits attached to theregistration statement for copies of the actual contracts, agreements or documents. In addition, we will file transition reports on Form 20F and submit otherinformation under cover of Form 6K. As a foreign private issuer, we are exempt from the proxy requirements of Section 14 of the Exchange Act and our officers,directors and principal shareholders will be exempt from the insider shortswing disclosure and profit recovery rules of Section 16 of the Exchange Act. You may readand copy the registration statement, the related exhibits and other materials we file with the SEC at the SEC's public reference room in Washington, D.C. at 100 FStreet, Room 1580, N.E., Washington, D.C.20549. You can also request copies of those documents, upon payment of a duplicating fee, by writing to the SEC. Pleasecall the SEC at 1800SEC0330 for further information on the operation of the public reference rooms. The SEC also maintains an Internet site that contains reports,proxy and information statements and other information regarding issuers that file with the SEC. The website address is http://www.sec.gov. You may also request acopy of these filings, at no cost, by writing us at LAB 32, SOHO 3Q, No 9, Guanghua Road, Chaoyang District, Beijing, People’s Republic of China, 100020 ortelephoning us at (86) 1085866721.67I. SUBSIDIARY INFORMATIONFor a listing of our subsidiaries, see “Item 4. Information on the Company – C. Organizational Structure.”ITEM 11. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.Interest Rate RiskAs of December 31, 2017, we had no shortterm or longterm borrowings. If we borrow money in future periods, we may be exposed to interest rate risk. Ourexposure to market risk for changes in interest rates relates primarily to the interest income generated by our cash deposits with our banks and heldtomaturityinvestments. We have not used any derivative financial instruments in our investment portfolio. Interest earnings instruments carry a degree of interest rate risk. Wehave not been exposed, nor do we anticipate being exposed to material risks due to changes in interest rates. However, our future interest income may fall short ofexpectations due to changes in interest rates. Foreign Exchange RiskTranslation adjustments amounted to $90,671 and $387,375 gain as of the fiscal year ended December 31, 2017 and 2016, respectively. The Companytranslated balance sheet amounts with the exception of equity at December 31, 2017 at RMB 6.5342 to $1.00 as compared to RMB 6.9370 to $1.00 at December 31,2016. The Company stated equity accounts at their historical rate. The average translation rates applied to income statement accounts for the fiscal year endedDecember 31, 2017 and 2016 were RMB6.7356 and RMB 6.7153 to US$1.00, respectively. So far, the PRC government has been able to manage a stable exchange ratebetween RMB and the U.S. Dollar. Our future downward translation adjustments may occur and can be significant due to changes in such exchange rate.If we decide to convert our RMB into U.S. dollars for the purpose of making payments for dividends on our ordinary shares or for other business purposes,appreciation of the U.S. dollar against the RMB would have a negative effect on the U.S. dollar amount available to us.The PRC government imposes strict restrictions on PRC resident companies regarding converting RMB into foreign currencies and vice versa under capitalaccount transactions, such as receiving equity investments from outside of the PRC, making equity investments outside of the PRC, borrowing money from orlending money outside of the PRC, and repaying debt or remitting liquidated assets and/or accumulated profits outside of the PRC. These transactions have to beapproved by the relevant PRC government authorities, including but not limited to the commerce bureau, the tax bureau and the State Administration of ForeignExchange, or SAFE, and have to be conducted at banks entrusted by the local SAFE branch. As our business continues to grow, we may need to continuouslyfinance our PRC subsidiaries by raising capital from outside of the PRC. The restriction on converting RMB into foreign currencies, and vice versa, may limit ourability to use capital resources from outside of the PRC. Such restrictions may also limit our ability to remit profits from our PRC subsidiaries outside of the PRC,therefore potentially limiting our ability to pay dividends to our shareholders. In addition, such restrictions will limit our ability to freely transfer temporary excesscash in our or our subsidiaries’ bank accounts in and out of the PRC, therefore limiting our ability to conduct crossborder cash management activities to optimizethe utilization of our cash.InflationAlthough China has experienced an increasing inflation rate, inflation has not had a material impact on our results of operations in recent years. Accordingto the National Bureau of Statistics of China, the change in the consumer price index in China was 0.46%, (0.77%), and 1.16% in 2001, 2002 and 2003, respectively.However, in connection with a 3.9% increase in 2004, the PRC government announced measures to restrict lending and investment in China in order to reduceinflationary pressures in China’s economy. Following the government’s actions, the consumer price index decreased to 1.8% in 2005 and to 1.5% in 2006. In 2007, theconsumer price index increased to 4.8%. In response, China’s central bank, the People’s Bank of China, announced that the bank reserve ratio would rise half apercentage point to 15.5% in an effort to reduce inflation pressures. China’s consumer price index growth rate reached 8.7% year over year in 2008. In 2009 and 2010,the change in the consumer price index in China was minus 0.7% and 3.3%.China consumer price index in November 2017 was 3.8% higher than that of the same period in 2016. China consumer price index in December 2016 was2.4% higher than that of the same period in 2015. China consumer price index in December 2015 was 4.8% higher than that of the same period in 2014. Chinaconsumer price index in December 2014 was 3.3% higher than that of the same period in 2013. The results of the PRC government’s actions to combat inflation aredifficult to predict. Adverse changes in the Chinese economy, if any, will likely impact the financial performance of a variety of industries in China that use, or wouldbe candidates to use, our software products and services.68ITEM 12. DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES.A. DEBT SECURITIES.Not applicable. B. WARRANTS AND RIGHTS.Not applicable.C. OTHER SECURITIES.Not applicable.D. AMERICAN DEPOSITARY SHARES.The Bank of New York Mellon, as depositary (the “Depositary”) for the Company’s ADR facility, notified the owners and holders of the Company’s ADSsthat the ADS facility will terminate effective at 5:00 p.m. (Eastern Time) on September 19, 2018. Under the terms of the Deposit Agreement among the Company, theDepositary and the owners and holders of ADSs of the Company (the “Deposit Agreement”), owners and holders of the Company’s ADSs have until at leastJanuary 21, 2019 to surrender their ADSs to the Depositary for delivery of the underlying ordinary shares of the Company. Subsequent to January 21, 2019, underthe terms of the Deposit Agreement, the Depositary may attempt to sell any ordinary shares remaining on deposit with the Depositary. If the Depositary sells suchunderlying ordinary shares or receives value for such shares, holders must surrender their ADSs to obtain payment of the sale proceeds, net of expenses andapplicable tax and charges. We completed the voluntary delisting of our ADSs from the NASDAQ Capital Market on September 19, 2018.You may hold ADSs either (A) directly (i) by having ADSs registered in your name in the Direct Registration System, or (ii) by having an Americandepositary receipt, also referred to as an ADR, which is a certificate evidencing a specific number of ADSs, registered in your name, or (B) indirectly by holding asecurity entitlement in ADSs through your broker or other financial institution. If you hold ADSs directly, you are a registered ADS holder, also referred to as anADS holder. This description assumes you are an ADS holder. If you hold the ADSs indirectly, you must rely on the procedures of your broker or other financialinstitution to assert the rights of ADS holders described in this section. You should consult with your broker or financial institution to find out what thoseprocedures are.The Direct Registration System, or DRS, is a system administered by The Depository Trust Company, also referred to as DTC, pursuant to which thedepositary may register the ownership of uncertificated ADSs, which ownership will be confirmed by periodic statements sent by the depositary to the registeredholders of uncertificated ADSs.69As an ADS holder, you will not be treated as one of our registered shareholders and you will not have direct shareholder rights. British Virgin Island’s lawgoverns our direct shareholders’ rights. The depositary will be the holder of the shares underlying your ADSs. As a registered holder of ADSs, you will have ADSholder rights. A Deposit Agreement among us, the depositary and you, as an ADS holder, and all other persons indirectly holding ADSs, sets out ADS holder rightsas well as the rights and obligations of the depositary. New York law governs the Deposit Agreement and the ADSs.The following is a summary of the material provisions of the Deposit Agreement. For more complete information, you should read the entire DepositAgreement and the form of ADS, which contains the terms of the ADSs. The Deposit Agreement is filed as an exhibit to our registration statement filed on Form F1.You may obtain the registration statement and the attached Deposit Agreement from the SEC’s website at http://www.sec.gov. You may also obtain a copy of theDeposit Agreement at the SEC’s Public Reference Room, which is located at 100 F Street, NE, Washington, DC 20549. You may obtain information on the operationof the Public Reference Room by calling the SEC at 18007320330. Fees and ExpensesPersons depositing or withdrawing shares or ADS holders must pay:For:$5.00 (or less) per 100 ADSs (or portion of 100 ADSs)Issuance of ADSs, including issuances resulting from a distribution of shares orrights or other propertyCancellation of ADSs for the purpose of withdrawal, including if the DepositAgreement terminates$.05 (or less) per ADSAny cash distribution to ADS holdersA fee equivalent to the fee that would be payable if securities distributed to youhad been shares and the shares had been deposited for issuance of ADSsDistribution of securities distributed to holders of deposited securities whichare distributed by the depositary to ADS holders$.05 (or less) per ADSs per calendar yearDepositary servicesRegistration or transfer feesTransfer and registration of shares on our share register to or from the name ofthe depositary or its agent when you deposit or withdraw sharesExpenses of the depositaryCable, telex and facsimile transmissions (when expressly provided in the DepositAgreement) converting foreign currency to U.S. dollarsTaxes and other governmental charges the depositary or the custodian have topay on any ADS or share underlying an ADS, for example, share transfer taxes,stamp duty or withholding taxesAs necessaryAny charges incurred by the depositary or its agents for servicing the depositedsecuritiesAs necessaryPayment of TaxesHolders of our ADSs are responsible for any taxes or other governmental charges payable on their ADSs or on the deposited securities represented by anyof their ADSs. The depositary may refuse to register any transfer of a holder’s ADSs or allow withdrawal of the deposited securities represented by the ADSs untilsuch taxes or other charges are paid. It may apply payments owed to the holder or sell deposited securities represented by the ADSs to pay any taxes owed and theholder will remain liable for any deficiency. If the depositary sells deposited securities, it will, if appropriate, reduce the number of ADSs to reflect the sale and pay toADS holders any proceeds, or send to ADS holders any property, remaining after it has paid the taxes.70PART IIITEM 13. DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES.None.ITEM 14. MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS.Use of Proceeds.We completed our initial public offering on May 14, 2010 (the “IPO”), which generated net proceeds of approximately $14.6 million. All remaining cash onhand from the proceeds of our IPO was transferred to C Media Limited and its subsidiaries following the completion of the asset exchange transactions on August17, 2018.ITEM 15. CONTROLS AND PROCEDURES.Disclosure Controls and ProceduresOur Chief Executive Officer and Chief Financial Officer have reviewed and evaluated the effectiveness of our disclosure controls and procedures, whichincluded inquiries made to certain other of our employees. The term “disclosure controls and procedures,” as defined in Rules 13a15(e) and 15d15(e) under theExchange Act, means controls and other procedures of a company that are designed to ensure that information required to be disclosed by a company in thereports, such as this report, that it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in theSEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to bedisclosed by a company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the company’s management, including itsprincipal executive and principal financial officers, as appropriate to allow timely decisions regarding required disclosure. Management recognizes that any controlsand procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives and management necessarilyapplies its judgment in evaluating the costbenefit relationship of possible controls and procedures. Based on that evaluation, our Chief Executive Officer and ChiefFinancial Officer have each concluded that, as of December 31, 2017, the Company’s disclosure controls and procedures were not effective due to the materialweakness described in the “Management’s Report on Internal Control over Financial Reporting” section below.Management’s Report on Internal Control Over Financial ReportingOur management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Exchange ActRules 13a15(f) and 15d15(f). Internal control over financial reporting refers to the process designed by, or under the supervision of, our principal executive officerand principal financial officer, and effected by our Board of Directors, management and other personnel, to provide reasonable assurance regarding the reliability offinancial reporting and the preparation of financial statements for external purposes in accordance with U.S. GAAP and includes those policies and procedures that(i) pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of the assets of the Company; (ii)provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with U.S. GAAP, and thatreceipts and expenditures of the Company are being made only in accordance with authorizations of management and directors of the Company; and (iii) providereasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the Company’s assets that could have a materialeffect on the financial statements.71Any system of internal control, no matter how well designed, has inherent limitations. Therefore, even those systems determined to be effective canprovide only reasonable assurance with respect to financial statement preparation and presentation. Because of the inherent limitations of internal control, there is arisk that material misstatements may not be prevented or detected on a timely basis by internal control over financial reporting. However, these inherent limitationsare known features of the financial reporting process. Therefore, it is possible to design into the process safeguards to reduce, though not eliminate, this risk.Management assessed our internal control over financial reporting as of the year ended December 31, 2017. In making this assessment, management usedthe criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in the 2014 report entitled "Internal ControlIntegratedFramework." The COSO framework summarizes each of the components of a company’s internal control system, including (i) the control environment, (ii) riskassessment, (iii) control activities, (iv) information and communication, and (v) monitoring. Based on such assessment, management concluded that its internalcontrol over financial reporting as of December 31, 2017 was not effective because of the following material weakness:Lack of U.S. GAAP expertise. Although our accounting personnel are professional and experienced in accounting requirements and procedures generallyaccepted in the PRC, they do not have sufficient knowledge, experience and training in maintaining our books and records and preparing financial statements inaccordance with U.S. GAAP standards and SEC rules and regulations. The staff needs additional training to become experienced in U.S. GAAPbased reporting,including the skills of U.S. GAAPbased period end closing, consolidation of financial statements, and U.S. GAAP conversion.In order to address the above material weakness, our management plans to take the following steps:We will employ, as needed, outside professionals to provide key accounting personnel ongoing technical trainings to ensure their proper understanding ofU.S. GAAP and newly announced accounting standards.The Company believes the foregoing measures will remediate the identified material weakness in future periods. The Company is committed to monitoringthe effectiveness of these measures and making any changes that are necessary and appropriate.Notwithstanding the conclusion that its internal control over financial reporting was not effective as of the end of the period covered by this report, ourChief Executive Officer and Chief Financial Officer believe that the financial statements and other information contained in this report present fairly, in all materialrespects, its business, financial condition and results of operations. Nothing has come to the attention of management that causes them to believe that any materialinaccuracies or errors exist in the Company’s financial statements as of December 31, 2017.Attestation report of the registered public accounting firm.This transition report does not include an attestation report of the Company’s registered public accounting firm on internal control over financial reportingbecause the Company is a nonaccelerated filer permanently exempted from section 404(b) of the SarbanesOxley Act.Changes in Internal Control over Financial ReportingThere were no changes in the Company’s internal control over financial reporting that occurred during our fiscal year ended December 31, 2017 that hasmaterially affected or is reasonably likely to materially affect our internal control over financial reporting.ITEM 16. [RESERVED]ITEM 16A. AUDIT COMMITTEE FINANCIAL EXPERT.Our board of directors has determined that Mr. Dennis Galgano qualifies as an audit committee financial expert. Our board of directors has determined thatMessrs. Dennis Galgano, Jin Shi, Jiming Ha and Zhihao Xu meet the definition of an “independent director” under the applicable NASDAQ Rules and under Rule10A3 of the Securities Exchange Act of 1934, as amended.72ITEM 16B. CODE OF ETHICS.Our board of directors has adopted a code of business conduct and ethics applicable to our directors, officers and employees. We have posted the code onour website at http://www.luokung.com.ITEM 16C. PRINCIPAL ACCOUNTANT FEES AND SERVICES.Audit FeesThe aggregate fees billed by Moore Stephens CPA Limited for professional services rendered for the audit of our financial information disclosed in thistransition report on Form 20F was $280,000 for the two years ended December 31, 2017 and 2016.The aggregate fees billed by our previous auditor, BDO China Shu Lun Pan Certified Public Accountants LLP for professional services rendered for theaudit of our annual financial information included in our annual reports on Form 20F was $105,500 for each of the fiscal years ended September 30, 2017, 2016 and2015.Tax FeesWe did not engage our principal accountants to provide tax or related services during the last two fiscal years.All Other FeesWe did not engage our principal accountants to render services to us during the last two fiscal years, other than as reported above.ITEM 16D. EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES.Not applicable.ITEM 16E. PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS.Not applicable.ITEM 16F. CHANGE IN REGISTRANT’S CERTIFYING ACCOUNTANT.Not applicable.ITEM 16G. CORPORATE GOVERNANCE.We are incorporated in the BVI and our corporate governance practices are governed by applicable BVI law as well as our memorandum and articles ofassociation. In addition, because our ADSs are listed on NASDAQ, we are subject to NASDAQ’s corporate governance requirements. NASDAQ Listing Rule5620(a) requires each issuer to hold an annual meeting of shareholders no later than one year after the end of the issuer’s fiscal year end. However, NASDAQ ListingRule 5615(a)(3) permits a foreign private issuer like us to follow home country practices in lieu of certain requirements of Listing Rule 5600, provided that suchforeign private issuer discloses in its transition report filed with the SEC each requirement of Rule 5600 that it does not follow and describes the home countrypractice followed in lieu of such requirement. We follow home country practice with respect to annual meetings and did not hold an annual shareholder meeting inthe year ended December 31, 2017. We may, however, hold annual shareholder meetings in the future if there are significant issues that require shareholders’approvals.ITEM 16H. MINE SAFETY DISCLOSURE.Not applicable.73PART IIIITEM 17. FINANCIAL STATEMENTS.We have elected to provide financial statements and related information specified in Item 18.ITEM 18. FINANCIAL STATEMENTS.See “Index to Consolidated Financial Statements” for a list of all financial statements filed as part of this transition report. The Financial Statements arebeginning on page F1.ITEM 19. EXHIBITS.See the Exhibit Index following the signature page of this report, which is incorporated herein by reference.74SIGNATURESThe registrant hereby certifies that it meets all of the requirements for filing on Form 20F and that it has duly caused and authorized the undersigned tosign this transition report on its behalf.LUOKUNG TECHNOLOGY CORP.By:/s/ Xuesong Song Xuesong SongChief Executive Officer(principal executive officer)October 12, 201875EXHIBIT INDEXThe following documents are filed as part of this transition report on Form 20F.ExhibitNumberDescription1.1Amended and Restated Memorandum of Association and Articles of Association of Luokung Technology Corp., dated August 20, 2018, and ascurrently in effect.2.1*Deposit Agreement among the Company, depositary and holders of the American Depositary Receipts.2.2*Form of American Depositary Receipt.2.3*English translation of Entrusted Management Agreement dated December 15, 2009 between Xi’an Softech Co., Ltd., Xi’an Kingtone InformationTechnology Co., Ltd. and the shareholders of Xi’an Kingtone Information Technology Co., Ltd.3.1*English translation of Shareholder’s Voting Proxy Agreement dated December 15, 2009 between Xi’an Softech Co., Ltd., Xi’an Kingtone InformationTechnology Co., Ltd. and the shareholders of Xi’an Kingtone Information Technology Co., Ltd.4.1*English translation of Exclusive Technology Service Agreement dated December 15, 2009 between Xi’an Softech Co., Ltd. and Xi’an KingtoneInformation Technology Co., Ltd.4.2*English translation of Exclusive Option Agreement dated December 15, 2009 between Xi’an Softech Co., Ltd., Xi’an Kingtone InformationTechnology Co., Ltd. and the shareholders of Xi’an Kingtone Information Technology Co., Ltd.4.3*English translation of Equity Pledge Agreement dated December 15, 2009 between Xi’an Softech Co., Ltd., Xi’an Kingtone Information TechnologyCo., Ltd. and the shareholders of Xi’an Kingtone Information Technology Co., Ltd.4.4*English translation of Loan Agreement dated September 14, 2009 between Xi’an Kingtone Information Technology Co., Ltd. and Xian CityCommercial Bank.4.5*English translation of Mortgage Agreement dated September 14, 2009 between Xi’an Kingtone Information Technology Co., Ltd. and Xian CityCommercial Bank.4.6*English translation of Form of Employment Agreement entered into between the Company and the Company’s executive officers.4.7*2010 Omnibus Incentive Plan of the Company.4.8**English translation of Project Construction Contract dated August 10, 2010 between Xi’an Hu County Yuxing Agriculture Science & TechnologyCo., Ltd. and Xi’an Kingtone Information Technology Co., Ltd.4.9***Asset Exchange Agreement by and between C Media Limited and the Company dated as of January 25, 2018.4.10***Securities Purchase Agreement by and among Redstone YYL Management Limited and five shareholders holding majority of the shares of theCompany dated as of January 25, 2018.4.15Exclusive Business Cooperation Agreement by and between Zhongchuan Tianxia Information Technology (Shenzhen) Co., Ltd., and Beijing MobileVision Technology Co., Ltd., dated August 31, 2015.764.16Exclusive Option Agreement by and among Zhongchuan Tianxia Information Technology (Shenzhen) Co., Ltd., Xuesong Song, Weili Chen, PingWang, Donglai Liu, and Beijing Mobile Vision Technology Co., Ltd., dated August 31, 2015.4.17Equity Interest Pledge Agreement by and among Zhongchuan Tianxia Information Technology (Shenzhen) Co., Ltd., Xuesong Song, Weili Chen, PingWang, Donglai Liu, and Beijing Mobile Vision Technology Co., Ltd., dated August 31, 2015.4.18Addendum to Asset Exchange Agreement by and among the Company, Topsky Infotech Holdings Pte Ltd. and C Media Limited, dated October 3,2018. Incorporated by reference to the Company’s Current Report on Form 6K filed on October 4, 2018.4.19Stock Purchase Agreement, dated August 25, 2018, by and among the Company, LK Technology Ltd., and the shareholders listedtherein. Incorporated by reference to the Company’s Current Report on Form 6K filed on August 27, 2018.4.20Power of Attorney by Weili Chen, dated August 31, 2015.4.21Power of Attorney by Ping Wang, dated August 31, 2015.4.22Power of Attorney by Donglai Liu, dated August 31, 2015.4.23Power of Attorney by Xuesong Song, dated August 31, 2015.8.1List of Subsidiaries and Consolidated Variable Interest Entities10.1Employment Agreement, dated August 19, 2018, between Luokung Technology Corp. and Xuesong Song.†10.2Employment Agreement, dated August 19, 2018, by and between Luokung Technology Corp. and Jie Yu.†12.1Certification of Chief Executive Officer required by Rule 13a14(a).12.2Certification of Chief Financial Officer required by Rule 13a14(a).13.1Certification of Chief Executive Officer required by Rule 13a14(a).13.2Certification of Chief Financial Officer required by Rule 13a14(a).101.INSXBRL Instance Document.101.SCHXBRL Taxonomy Extension Schema Document.101.CALXBRL Taxonomy Extension Calculation Linkbase Document.101.DEFXBRL Taxonomy Extension Definition Linkbase Document.101.LABXBRL Taxonomy Extension Label Linkbase Document.101.PREXBRL Taxonomy Extension Presentation Linkbase Document.*Previously filed as an exhibit to the Company’s Registration Statement on Form F1 (Reg. No. 333166056) filed with the Commission and incorporated hereinby reference.**Previously filed as exhibits to the Company’s Transition Report on Form 20F filed with the Commission on January 20, 2011 and incorporated herein byreference.***Previously filed as exhibits to the Company’s Annual Report on Form 20F filed with the Commission on February 9, 2018 and incorporated herein byreference.†Indicates management contract or compensatory plan, contract or arrangement.77LK Technology Ltd. and SubsidiariesCONSOLIDATED FINANCIAL STATEMENTSTABLE OF CONTENTSPage(s)Report of Independent Registered Public Accounting FirmF2Consolidated Financial StatementsConsolidated Balance SheetsF3Consolidated Statements of Operations and Comprehensive LossF4application.Chuang (Vincent) Tao was appointed as a member of the Board effective on August 25, 2018. Dr. Tao was the Chairman of SuperEngine Suzhou from 2014to 2017. Dr. Tao has been the president of the Seasky Angel Investment Alliance of Shanghai since 2015. Dr. Tao received his Bachelor Degree of geographicinformation and telemetry from Wuhan University in China in 1990 and received his Ph.D. from University of Calgary, Canada in 1997.Dennis Galgano was appointed as a director of the Company following the consummation of the asset exchange agreement. He was a registered consultantwith Morgan Joseph Triartisan LLC from November 2016 until October 2017, and previously served as vice chairman and head of international investment bankingfor Morgan Joseph Triartisan LLC, which is a registered broker dealer engaged in the investment banking and financial advisory industry. Mr. Galgano received aB.S. degree in Chemistry from St. John’s University and an M.B.A. from The Wharton School in 1972.Jin Shi was appointed as a director of the Company following the consummation of the asset exchange transactions. Mr. Shi has served as the managingpartner of Chum Capital Group, a merchant bank focused on helping Chinese growth companies to access global capital, since January 2013. Mr. Shi has also servedas a director of Seven Stars Cloud Group, Inc. (NASDAQ: SSC), a premium video on demand service provider, since January 2014, and joined the audit committee ofits board of directors in March 2016. He also served as a director and member of the audit committee of Pingtan Marine Enterprise, Ltd. (NASDAQ: PME), a marineenterprise group primarily engaged in ocean fishing through its subsidiaries. Mr. Shi received an EMBA degree from the Guanghua Management School of BeijingUniversity, and a Bachelor’s degree of science in Chemical Engineering from Tianjin University.Jiming Ha was appointed as a director of the Company following the consummation of the asset exchange agreement, and has also served as a seniorresearch fellow for the China Finance 40 Forum since March 1, 2018, and previously served as a managing director of Goldman Sachs from January 2017 to April2017. Mr. Ha served as a vice chairman and chief investment strategist of the Investment Strategy Group for Private Wealth Management at Goldman Sachs from2010 to January 2017. Mr. Ha holds a PhD in Economics from the University of Kansas and Master’s and Bachelor’s degrees of science from Fudan University.Zhihao Xu was appointed as a director of the Company following the consummation of the asset exchange transactions. Mr. Xu has served as the chiefexecutive officer of Geely Group Co., Ltd., in Hangzhou, China, since December 2017, and previously served as the chairman and chief executive officer of BeijingDingchengrenhe Investment Co., Ltd., a funds management company, from January 2017 to December 2017. Mr. Xu served as the chairman of president of HNAUSOLV CO., LTD., and the chief innovation officer of HNA Logistics Group from January 2014 to December 2016, and prior to that as the chairman of GopayInnovation Technology Co. Ltd., an online payment system operator supporting online money transfers, from April 2012 to January 2014. Mr. Xu graduated from theBusiness School of Renmin University of China and from the Wudaokou Finance College of Tsinghua University with a fund qualification certificate and securitiesqualification certificate.B. COMPENSATION.Compensation of Directors and Executive OfficersFor the ninemonth transition period ended September 30, 2018 and the fiscal year ended December 31, 2017, we did not pay any cash compensation to ourexecutive officers of LK Technology Ltd. and a to our directors for serving on our board of directors of LK Technology Ltd.37Other than nonemployee directors, we do not intend to compensate directors for serving on our board of directors or any of its committees. We do,however, intend to reimburse each member of our board of directors for outofpocket expenses incurred by each director in connection with attending meetings ofthe board of directors and its committees.AdministrationThe Incentive Plan is administered by our board of directors, or at the discretion of the board, by our compensation committee. Our board of directors hasdelegated authority to our compensation committee to administer the Incentive Plan. Subject to the terms of the Incentive Plan, the compensation committee mayselect participants to receive awards, determine the types of awards and terms and conditions of awards, and interpret provisions of the Incentive Plan.The ordinary shares issued or to be issued under the Incentive Plan consist of authorized but unissued shares. If any ordinary shares covered by an awardare not purchased or are forfeited, or if an award otherwise terminates without delivery of any ordinary shares, then the number of ordinary shares counted againstthe aggregate number of ordinary shares available under the plan with respect to the award will, to the extent of any such forfeiture or termination, again be availablefor making awards under the Incentive Plan.EligibilityAwards may be made under the Incentive Plan to our employees, officers, directors, consultants or advisers or to any of our affiliates, and to any otherindividual whose participation in the Incentive Plan is determined to be in our best interests by our board of directors.Amendment or Termination of the PlanOur board of directors may terminate or amend the Incentive Plan at any time and for any reason. No amendment, however, may adversely impair the rightsof grantees with respect to outstanding awards. The Incentive Plan has a term of ten years. Amendments will be submitted for shareholder approval to the extentrequired by applicable stock exchange listing requirements or other applicable laws.OptionsThe Incentive Plan permits the granting of options to purchase ordinary shares intended to qualify as incentive share options under the Internal RevenueCode and share options that do not qualify as incentive share options, or nonqualified share options.The exercise price of each share option may not be less than 100% of the fair market value of our ADSs representing ordinary shares on the date of grant.In the case of certain 10% shareholders who receive incentive share options, the exercise price may not be less than 110% of the fair market value of our ADSsrepresenting ordinary shares on the date of grant. An exception to these requirements is made for options that we grant in substitution for options held byemployees of companies that we acquire. In such a case the exercise price is adjusted to preserve the economic value of the employee’s share option from his or herformer employer.The term of each share option is fixed by the compensation committee and may not exceed ten years from the date of grant. The compensation committeedetermines at what time or times each option may be exercised and the period of time, if any, after retirement, death, disability or termination of employment duringwhich options may be exercised.Options may be made exercisable in installments. The award agreement provides the vesting of the options. Exercisability of options may be accelerated bythe compensation committee.38In general, an optionee may pay the exercise price of an option by (1) cash or check (in U.S. dollars or Renminbi or other local currency as approved by thecompensation committee), (2) ordinary shares held for such period of time as may be required by the compensation committee, (3) delivery of a notice of a marketorder with a broker with respect to ordinary shares then issuable upon exercise of an option, and that the broker has been directed to pay us a sufficient portion ofnet proceeds of the sale in satisfaction of the exercise price, provided that payment of such proceeds is then made to us upon settlement of such sale, (4) otherproperty acceptable to the compensation committee with a fair market value equal to the exercise price, (5) cashless exercise or (6) any combination of the foregoing.Share options granted under the Incentive Plan may not be sold, transferred, pledged, or assigned other than by will or under applicable laws of descentand distribution. However, we may permit limited transfers of nonqualified options for the benefit of immediate family members of grantees to help with estateplanning concerns or pursuant to a domestic relations order in settlement of marital property rights.Other AwardsThe compensation committee may also award under the Incentive Plan:1.ordinary shares subject to restrictions;2.deferred ordinary shares, credited as deferred ordinary share units, but ultimately payable in the form of unrestricted ordinary shares inaccordance with the terms of the grant or with the participant’s deferral election;3.ordinary share units subject to restrictions;4.unrestricted ordinary shares, which are ordinary shares issued at no cost or for a purchase price determined by the compensation committee whichare free from any restrictions under the 2011 Omnibus Incentive Plan;5.dividend equivalent rights entitling the grantee to receive credits for dividends that would be paid if the grantee had held a specified number ofordinary shares; or6.a right to receive a number of ordinary shares or, in the discretion of the compensation committee, an amount in cash or a combination of ordinaryshares and cash, based on the increase in the fair market value of the ADSs representing ordinary shares underlying the right during a statedperiod specified by the compensation committee.Effect of Certain Corporate TransactionsCertain change of control transactions involving us may cause awards granted under the Incentive Plan to vest, unless the awards are continued orsubstituted for by the surviving company in connection with the corporate transaction.Unless otherwise provided in the appropriate option agreement on the date of grant or provided by our board of directors thereafter with the consent of thegrantee, options granted under the Incentive Plan become exercisable in full following (1) a dissolution of our company or a merger, consolidation or reorganizationof our company with one or more other entities in which we are not the surviving entity, (2) a sale of substantially all of our assets to another person or entity, or (3)any transaction (including without limitation a merger or reorganization in which we are the surviving entity) which results in any person or entity owning 50% ormore of the combined voting power of all classes of our shares.39Adjustments for Dividends and Similar EventsThe compensation committee will make appropriate adjustments in outstanding awards and the number of ordinary shares available for issuance under theIncentive Plan, including the individual limitations on awards, to reflect ordinary share dividends, stock splits and other similar events.C. BOARD PRACTICES.Board of DirectorsOur board of directors consists of six members being Messrs. Xuesong Song, Kegang Peng, Dennis Galgano, Jin Shi, Jiming Ha and Zhiaho Xu. Ourdirectors hold office until our annual meeting of shareholders, where their successors will be duly elected and qualified, or until the directors’ death, resignation orremoval, whichever is earlier. Our directors are not subject to a term of office and hold office until their resignation, death or incapacity or until their respectivesuccessors have been elected and qualified in accordance with our fourth amended and restated memorandum of association and articles of association. A directorwill be removed from office if, among other things, the director (1) becomes bankrupt, (2) dies or becomes of unsound mind, or (3) is absent from meetings of ourboard of directors for six consecutive months without leave and our board of directors resolves that the office is vacated. A director is not entitled to any specialbenefits upon termination of service with the company.Director IndependenceOur board of directors consists of six members; Messrs. Dennis Galgano, Jin Shi, Jiming Ha and Zhihao Xu have been determined by us to be independentdirectors within the meaning of the independent director guidelines of the NASDAQ Corporate Governance Rules (the “NASDAQ Rules”).Committees of Our Board of DirectorsTo enhance our corporate governance, we established three committees under our board of directors: an audit committee, a compensation committee, and anominating and corporate governance committee. We have adopted a charter for each of these committees. The committees have the following functions andmembers.Audit CommitteeOur audit committee reports to our board of directors regarding the appointment of our independent public accountants, the scope and results of ourannual audits, compliance with our accounting and financial policies and management’s procedures and policies relating to the adequacy of our internal accountingcontrols. Our audit committee consists of Messrs. Dennis Galgano, Jin Shi, and Jiming Ha. Mr. Galgano, having accounting and financial management expertise,serves as the chairman of the audit committee and is an “audit committee financial expert” as defined by the rules and regulations of the SEC. Our board of directorshas determined that each of these persons meet the definition of an “independent director” under the applicable NASDAQ Rules and under Rule 10A3 of theSecurities Exchange Act of 1934, as amended (the “Exchange Act”).Our audit committee is responsible for, among other things:●the appointment, evaluation, compensation, oversight and termination of the work of our independent auditor (including resolution of disagreementsbetween management and the independent auditor regarding financial reporting);●an annual performance evaluation of the audit committee;●establishing procedures for the receipt, retention and treatment of complaints regarding accounting, internal accounting controls, auditing matters orpotential violations of law, and the confidential, anonymous submission by our employees of concerns regarding questionable accounting or auditingmatters or potential violations of law;40●ensuring that it receives an transition report from our independent auditor describing our internal control procedures and any steps taken to deal withmaterial control deficiencies and attesting to the auditor’s independence and describing all relationships between the auditor and us;●reviewing our annual audited financial statements and quarterly financial statements with management and our independent auditor;●reviewing and approving all proposed related party transactions;●reviewing our policies with respect to risk assessment and risk management;●meeting separately and periodically with management and our independent auditor; and●reporting regularly to our board of directors.Compensation CommitteeOur compensation committee assists the board of directors in reviewing and approving the compensation structure of our directors and executive officers,including all forms of compensation to be provided to our directors and executive officers. In addition, the compensation committee reviews share compensationarrangements for all of our other employees. Members of the compensation committee are not prohibited from direct involvement in determining their owncompensation. Our chief executive officer is not permitted to be present at any committee meeting during which his or her compensation is deliberated. Ourcompensation committee consists of Dennis Galgano and Jin Shi, with Mr. Shi serving as the chairman of the compensation committee. Our board of directors hasdetermined that each of these persons meet the definition of “independent director” under the applicable requirements of the NASDAQ Rules.Our compensation committee is responsible for, among other things:●reviewing and approving corporate goals and objectives relevant to the compensation of our chief executive officer, evaluating the performance of ourchief executive officer in light of those goals and objectives and setting the compensation level of our chief executive officer based on this evaluation;●reviewing and making recommendations to the board with respect to the compensation of our executives, incentive compensation and equitybasedplans that are subject to board approval; and●providing annual performance evaluations of the compensation committee.Nominating and Corporate Governance CommitteeOur nominating and corporate governance committee assists the board of directors in identifying and selecting or recommending individuals qualified tobecome our directors, developing and recommending corporate governance principles and overseeing the evaluation of our board of directors and management. Ournominating and corporate governance committee consists of Jiming Ha and Zhihao Xue, with Mr. Ha serving as the chairman of the nominating and corporategovernance committee. Our board of directors has determined that each of these persons meet the definition of “independent director” under the applicablerequirements of the NASDAQ Rules.Our nominating and corporate governance committee is responsible for, among other things:●selecting and recommending to our board nominees for election or reelection to our board, or for appointment to fill any vacancy;●reviewing annually with our board the current composition of the board of directors with regards to characteristics such as independence, age, skills,experience and availability of service to us;●selecting and recommending to our board the names of directors to serve as members of the audit committee and the compensation committee, as wellas the nominating and corporate governance committee itself; advising our board of directors periodically with regards to significant developments inthe law and practice of corporate governance as well as our compliance with applicable laws and regulations, and making recommendations to ourboard of directors on all matters of corporate governance and on any remedial action to be taken; and●monitoring compliance with our code of business conduct and ethics, including reviewing the adequacy and effectiveness of our procedures to ensureproper compliance.41Code of Business Conduct and EthicsOur board of directors adopted a code of business conduct and ethics applicable to our directors, officers and employees.Duties of DirectorsUnder British Virgin Islands law, our directors have a duty to act honestly, in good faith and with a view to our best interests. Our directors also have a dutyto exercise care, diligence and skills that a reasonably prudent person would exercise in comparable circumstances. In fulfilling their duty of care to us, our directorsmust ensure compliance with our memorandum of association and articles of association. We have the right to seek damages if a duty owed by our directors isbreached.The functions and powers of our board of directors include, among others:●appointing officers and determining the term of office of the officers;●authorizing the payment of donations to religious, charitable, public or other bodies, clubs, funds or associations as deemed advisable;●exercising the borrowing powers of the company and mortgaging the property of the company;●executing cheques, promissory notes and other negotiable instruments on behalf of the company; and●maintaining or registering a register of mortgages, charges or other encumbrances of the company.Remuneration and BorrowingThe directors may receive such remuneration as our board of directors may determine from time to time. Each director is entitled to be repaid or prepaid alltraveling, hotel and incidental expenses reasonably incurred or expected to be incurred in attending meetings of our board of directors or committees of our board ofdirectors or shareholder meetings or otherwise in connection with the discharge of his or her duties as a director. The compensation committee will assist thedirectors in reviewing and approving the compensation structure for the directors.Our board of directors may exercise all the powers of the company to borrow money and to mortgage or charge our undertakings and property or any partthereof, to issue debentures, debenture stock and other securities whenever money is borrowed or as security for any debt, liability or obligation of the company orof any third party.QualificationA director is not required to hold shares as a qualification to office.42Limitation on Liability and Other Indemnification MattersBritish Virgin Islands law does not limit the extent to which a company’s memorandum of association and articles of association may provide forindemnification of officers and directors, except to the extent any such provision may be held by the British Virgin Islands courts to be contrary to public policy,such as to provide indemnification against civil fraud or the consequences of committing a crime.Under our memorandum of association and articles of association, we may indemnify our directors, officers and liquidators against all expenses, includinglegal fees, and against all judgments, fines and amounts paid in settlement and reasonably incurred in connection with civil, criminal, administrative or investigativeproceedings to which they are party or are threatened to be made a party by reason of their acting as our director, officer or liquidator. To be entitled toindemnification, these persons must have acted honestly and in good faith with a view to the best interest of the company and, in the case of criminal proceedings,they must have had no reasonable cause to believe their conduct was unlawful.Compensation Committee Interlocks and Insider ParticipationNone of the members of our compensation committee is an officer or employee of our company. None of our executive officers currently serves, or in thepast year has served, as a member of the board of directors or compensation committee of any entity that has one or more executive officers serving on our board ofdirectors or compensation committee.Employment AgreementsOn August 19, 2018, the Company entered into an Employment Agreement (the “Song Agreement”) with Mr. Xuesong Song, to serve as the ChiefExecutive Officer of the Company for a fouryear term, subject to renewal. Under the terms of the Song Agreement, Mr. Song will receive no salary for his servicesbut will be eligible for an annual cash bonus in the Board’s sole discretion.On August 19, 2018, the Company entered into an Employment Agreement (the “Yu Agreement”) with Mr. Jie Yu, to serve as the Chief Financial Officer ofthe Company for a fouryear term, subject to renewal. Under the terms of the Yu Agreement, Mr. Yu will receive an annual salary of RMB700,000, and will be eligiblefor an annual cash bonus in the Board’s sole discretion.D. EMPLOYEES.As of September 30, 2018 and December 31, 2017, we had a total of 107 and 37 fulltime employees, including 48 and 13 in research and development, 9 and 2in sales and marketing and the rest in a variety of other divisions, respectively. All of our employees are fulltime employees. None of our employees is currentlyrepresented by a union and/or collective bargaining agreements. We believe that we have good relations with our employees and since our inception we have hadno history of work stoppages or union organizing campaigns.E. SHARE OWNERSHIP.The following table provides information as to the beneficial ownership of our ordinary shares as of October 10, 2018, by the persons listed. Beneficialownership of shares is determined under the rules of the SEC and generally includes any shares over which a person exercises sole or shared voting or investmentpower. For purposes of the following table, a person is deemed to have beneficial ownership of any ordinary shares if such person has the right to acquire suchshares within 60 days of October 10, 2018. For purposes of computing the percentage of outstanding shares held by each person, any shares that such person hasthe right to acquire within 60 days after of October 10, 2018 are deemed to be outstanding, but are not deemed to be outstanding for the purpose of computing thepercentage ownership of any other person. Except as otherwise noted, the persons named in the table have sole voting and investment power with respect to all ofthe ordinary shares beneficially owned by them. Unless otherwise indicated, the address of each person listed is c/o Luokung Technologies, LAB 32, SOHO 3Q, No9, Guanghua Road, Chaoyang District, Beijing, People’s Republic of China.43Percentage ownership in the following table is based on 199,317,558 ordinary shares outstanding on October 10, 2018.Number ofsharesPercent ofclassDirectors and named executive officersCharm Dragon International Limited (1)4,030,8822.03%Xuesong Song, Chairman, Chief Executive Officer and Director(2)38,156,43019.30%Kegang Peng, Vice President and Director (3)17,231,9558.71%Dennis Galgano, Director75,796*%Jin Shi, DirectorJiming Ha, DirectorZhihao Xu, Director (4)7,579,1843.83%Dongpu Zhang, President (5)2,321,7921.17%Chuang Tao, Director (6)1,221,996*%Directors and executive officers as a group (10 persons)66,587,15233.69%(1)Charm Dragon International Limited is a British Virgin Islands company controlled by Mr. Xuesong Song.(2)Consists of (i) 4,030,882 shares owned directly by Charm Dragon International Limited, a British Virgin Islands company and (ii) 22,624,793 shares owneddirectly by Bravo First Development Limited, a British Virgin Islands company. Mr. Xuesong Song is the controlling shareholder of Bravo First DevelopmentLimited. Mr. Xuesong Song is the sole director of Charm Dragon International Limited.(3)Consists of 17,231,955 shares owned directly by Plenty Prestige Enterprises Limited, a British Virgin Islands company. Mr. Kegang Peng is the sole director ofPlenty Prestige Enterprises Limited.(4)Consists of 7,579,184 shares directly owned by Geely Group Limited., a Chinese company. Mr. Zhihao Xu is the Chief Executive Officer of Geely GroupLimited.(5)Consists of 2,321,792 shares owned directly by Genoa Peak Limited, a British Virgin Islands company. Mr. Dongpu Zhang controls Genoa Peak Limited.(6)Consists of 1,221,996 shares owned directly by Globalearth Holdings Limited, a British Virgin Islands company. Mr. Chuang Tao controls Globalearth HoldingsLimited.*Represents less than 1% of shares outstandingITEM 7. MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS.A. MAJOR SHAREHOLDERSPlease refer to Item 6.E “Directors, Senior Management and Employees — Share Ownership.”To our knowledge, (A) we are not directly or indirectly owned or controlled by (i) another corporation or (ii) any foreign government and (B) there are noarrangements (including any announced or expected takeover bid), the operation of which may at a subsequent date result in a change in our control.The voting rights of our major shareholders do not differ from the voting rights of other holders of the same class of shares.44B. RELATED PARTY TRANSACTIONS. BUSINESS RELATIONSHIPS.Our subsidiaries, consolidated affiliated entities, and the subsidiaries of the consolidated affiliated entities have engaged, during the ordinary course ofbusiness, in a number of customary transactions with each other. All of these intercompany balances have been eliminated in consolidation.As of December 31, 2017, we had amounts due from related parties, C Media Limited and Ya Tuo Ji International Consultancy (Beijing) Limited, in theamounts of $11.8 million and $0.2 million, respectively. These amounts due from related parties are short term in nature, noninterest bearing, unsecured andrepayable on demand.As of December 31, 2017, we had amounts due to related parties, Mr. Xuesong Song, our chairman and chief executive officer, Thumb Beijing Branch andThumb Shenzhen Branch, in the amounts of $2.9 million, $0.6 million and $0.03 million, respectively. These amounts due to related parties are short term in nature,noninterest bearing, unsecured and payable on demand.We are party to a series of control agreements with Beijing Zhong Chuan Shi Xun. In addition, our chief executive officer, Mr. Xuesong Song, serves as andofficer of Beijing Zhong Chuan Shi Xun and is a shareholder of Beijing Zhong Chuan Shi Xun. The following table sets forth the relationship of Mr. Song withBeijing Zhong Chuan Shi Xun:NameRelationship withLuokung TechnologyRelationship withBeijing Zhong Chuan Shi XunPercentageOwnership Interest inBeijing Zhong Chuan Shi XunXuesong SongChief Executive OfficerChief Executive Officer61.83%C. INTERESTS OF EXPERTS AND COUNSEL.None.ITEM 8. FINANCIAL INFORMATION.A. CONSOLIDATED STATEMENTS AND OTHER FINANCIAL INFORMATION.See “Item 18. Financial Statements.”Legal ProceedingsTo our knowledge, other than as described below there are no material legal proceedings threatened against us. From time to time, we may be subject tovarious claims and legal actions arising in the ordinary course of business. Following the consummation of the AEA, we became successor in interest to the legalproceedings described below.Litigation with Shanghai Fusheng Weier Intelligent Control Technology Co., Ltd.On January 22, 2016, Zhong Chuan Rui You and Shanghai Fusheng Weier Intelligent Control Technology Co., Ltd. (“Fusheng Weier”) signed a contract forequipment of $1,652,842 (RMB10,800,000). Since Zhong Chuan Rui You did not make the payments of $1,126,381 (RMB7,360,000) on the due dates, Fusheng Weierfiled a lawsuit against Zhong Chuan Rui You in Shanghai Xuhui District People's Court on October 8, 2016. On March 9, 2017, Xuhui District People's Court issuedthe verdict requiring Zhong Chuan Rui You to pay the overdue debts. In August 2017, C Media Limited made the payment of $512,075 (RMB3,346,000). Theremaining balance has been accrued in accounts payable. The payment schedule for the remaining balance is being negotiated by the two parties. On February 5,2018, a hearing was held adding Zhong Chuan Shi Xun as a defendant. The Group plans to settle the remaining balance within one year.45Lawsuit with Gansu Jinlun Culture Media Co., Ltd.On August 22, 2014, Zhong Chuan Rui You and Gansu Jinlun Culture Media Co., Ltd. (“Gansu Jinlun”) signed a “Lanzhou Railway Bureau AirconditionedTrain WiFi Network System Advertising Operation Rights Agreement” for advertising on 72 trains of $1,467,880 (RMB9,604,633). Due to the dispute on theproject implementation, Zhong Chuan Rui You did not pay the advertising fee. On August 23, 2017, Gansu Jinlun filed a lawsuit with Gansu Intermediate People'sCourt. On December 19, 2017, Gansu Intermediate People's Court issued a verdict, ruling that Zhong Chuan Rui You settle the overdue advertising fee. Since only 18out of 72 trains have been installed with Wifi network system, Zhong Chuan Rui You disputed and appealed to the verdict. The next court trial date has not yet beendetermined. C Media and Gansu Jinlun are negotiating a potential settlement to resume the contract. According to the legal counsel, it is probable that the settlementwill amount to approximately $459,000 (RMB3,000,000); therefore, this amount has been accrued in accounts payable as at December 31, 2017.Litigation with Shenzhen Hua Xun Fang Zhou Technology Co., Ltd.On June 16, 2015, Zhong Chuan Rui You signed a cooperation agreement with Shenzhen Hua Xun Fang Zhou Technology Co., Ltd. (“Shenzhen Hua Xun”)and Xuesong Song, a major shareholder of C Media Limited. Pursuant to this agreement, Zhong Chuan Rui You procures equipment from Shenzhen Hua Xun.Xuesong Song acts as a joint liability guarantor for the entire debts of Zhong Chuan Rui You under this agreement. As Zhong Chuan Rui You did not make thepayments on the due dates, Shenzhen Hua Xun filed a lawsuit with Shenzhen Baoan District People's Court on May 31, 2016. On November 1, 2016, Zhong ChuanRui You, Xuesong Song and Shenzhen Hua Xun reached a settlement in Shenzhen Baoan District People's Court to settle $1,735,389 (RMB11,355,000) in fourinstalments. On December 30, 2017, the debt was assigned to C Media Limited.Dividend PolicyWe currently intend to retain all of our available funds and future earnings for use in the operation and expansion of our business and do not anticipatepaying cash dividends in the foreseeable future. Under the terms of our Amended and Restated Memorandum and Articles of Association the declaration andpayment of any dividends in the future will be determined by our board of directors, in its discretion, and will depend on a number of factors, including our earnings,capital requirements and overall financial condition and our ability to receive dividends from our subsidiaries. If we pay any dividends, we will pay our ADS holders’dividends with respect to their underlying shares to the same extent as holders of our ordinary shares, subject to the terms of the deposit agreement, including thefees and expenses payable thereunder. Cash dividends on our ordinary shares, if any, will be paid in U.S. dollars.Our ability to receive dividends from our subsidiaries may limit our ability to pay dividends on our ordinary shares. See Risk Factors – Risks Related toDoing Business in China – Our holding company structure may limit the payment of dividends” and “Item 10. Additional Information – D. Exchange Controls –Dividend Distribution”.B. SIGNIFICANT CHANGES.N/AITEM 9. THE OFFER AND LISTINGA. OFFER AND LISTING DETAILS.Markets and Share Price HistoryOur ordinary shares are not currently listed on any trading market. Our American Depository Shares (“ADSs”) were voluntarily delisted from the NASDAQCapital Market on September 19, 2018. We have applied to NASDAQ for the listing of our ordinary shares on the NASDAQ Capital Market and received an approvalfor listing of Ordinary Shares on August 6, 2018, and as of the date of this transition report, that application and approval are currently under review.46The table below sets forth the high and low reported sales prices in dollars of our ordinary shares, which are represented by ADSs, as reported byNASDAQ in the periods as indicated:ADSHighLowAnnual Highs and Lows (as of the fiscal year end 09/30 for the five most recent full financial years)*20175.592.67201610.21.62Quarterly Highs and Lows (for the two most recent full financial years and any subsequent period, based on calendarquarter end)*2018Third Quarter8.006.30Second Quarter8.824.25First Quarter6.403.702017Fourth Quarter5.592.91Third Quarter3.992.67Second Quarter4.063.07First Quarter5.152.832016Fourth Quarter6.594.20Third Quarter10.201.62Second Quarter3.101.97First Quarter3.602.12Monthly Highs and Lows (for the most recent six months)September 20188.006.41August 20187.706.63July 20187.506.30June 20188.827.55May 20187.805.92April 20187.454.25*The Company effected a 1for10 reverse stock split of its ordinary shares on November 6, 2012 (the “Reverse Split”). The ratio between each AmericanDepositary Share (“ADS”) and its underlying ordinary share postReverse Split remains the same, namely, one ADR remains to represent one ordinary sharepost the Reverse Split. The price listed here after November 6, 2012 reflected the effect from the Reverse Split.B. PLAN OF DISTRIBUTION.Not Applicable.C. MARKETS.Our ordinary shares are not currently listed on any trading market. Our ADSs were voluntarily delisted from the NASDAQ Capital Market on September 19,2018. We have applied to NASDAQ for the listing of our ordinary shares on the NASDAQ Capital Market and received an approval for listing of Ordinary Shares onAugust 6, 2018, and as of the date of this transition report, that application and approval are currently under review.47D. SELLING SHAREHOLDERS.Not applicable.E. DILUTION.Not applicable.F. EXPENSES OF THE ISSUE.Not applicable.ITEM 10. ADDITIONAL INFORMATION.A. SHARE CAPITALNot applicable.B. MEMORANDUM AND ARTICLES OF ASSOCIATIONWe are a British Virgin Islands company incorporated with limited liability and our affairs are governed by the provisions of our memorandum of associationand articles of association, as amended and restated from time to time, and by the provisions of applicable British Virgin Islands law.Our memorandum of association and articles of association authorize the issuance of up to 251,000,000 shares, which are designated into (i) 250,000,000 ofordinary shares of the Company (“Ordinary Shares”), and (ii) 1,000,000 preferred shares of the Company (“Preferred Shares”), in each case with the rights,preferences and privileges as set out in the memorandum and articles of association of the Company.Please see below for a description of our ADSs under “Item 12. Description of Securities Other Than Equity Securities – D. American Depository Shares.”The following is a summary of the material provisions of our ordinary shares and our memorandum of association and articles of association.Ordinary SharesAll of our issued and outstanding ordinary shares are fully paid and nonassessable. Holders of our ordinary shares who are nonresidents of the BritishVirgin Islands may freely hold and vote their shares.Subject to the memorandum and articles of association (and, for greater clarity, without prejudice to any special rights conferred thereby on the holders ofany other shares), an Ordinary Share of the Company confers on the holder:(a)the right to one vote per Ordinary Share at a meeting of the members or on any resolution of members;(b)the right to an equal share in any distribution paid by the Company; and(c)the right to an equal share in the distribution of the surplus assets of the Company on a winding up;48Subject to the memorandum and articles of association (and, for greater clarity, without prejudice to any special rights conferred thereby on the holders ofany other shares), a Preferred Share of the Company confers on the holder:(a)the right to 399 votes per Preferred Share at a meeting of the members or on any resolution of members;(b)the right to an equal share in any distribution paid by the Company;(c)the right to an equal share in the distribution of the surplus assets of the Company on a winding up;(d)be freely transferable, in whole or in part, by Mr. Xuesong Song to any third party through one or more Private Transactions, subject toApplicable Law; and(e)be freely transferable, in whole or in part, by Mr. Xuesong Song to any third party through one or more Public Transactions, subject to ApplicableLaw and Automatic Conversion of such Preferred Share(s) into Ordinary Share(s).Each Preferred Share shall be automatically converted at any time after issue and without the payment of any additional sum into an equal number of fullypaid Ordinary Shares upon the conclusion of any transfer by Mr. Xuesong Song to any third party through one or more Public Transactions.Limitation on Liability and Indemnification MattersUnder British Virgin Islands law, each of our directors and officers, in performing his or her functions, is required to act honestly and in good faith with aview to our best interests and exercise the care, diligence and skill that a reasonably prudent person would exercise in comparable circumstances. Our memorandumof association and articles of association provide that, to the fullest extent permitted by British Virgin Islands law or any other applicable laws, our directors will notbe personally liable to us or our shareholders for any acts or omissions in the performance of their duties. Such limitation of liability does not affect the availabilityof equitable remedies such as injunctive relief or rescission. These provisions will not limit the liability of directors under United States federal securities laws.We may indemnify any of our directors or anyone serving at our request as a director of another entity against all expenses, including legal fees, andagainst all judgments, fines and amounts paid in settlement and reasonably incurred in connection with legal, administrative or investigative proceedings. We mayonly indemnify a director if he or she acted honestly and in good faith with the view to our best interests and, in the case of criminal proceedings, the director hadno reasonable cause to believe that his or her conduct was unlawful. The decision of our board of directors as to whether the director acted honestly and in goodfaith with a view to our best interests and as to whether the director had no reasonable cause to believe that his or her conduct was unlawful, is in the absence offraud sufficient for the purposes of indemnification, unless a question of law is involved. The termination of any proceedings by any judgment, order, settlement,conviction or the entry of no plea does not, by itself, create a presumption that a director did not act honestly and in good faith and with a view to our best interestsor that the director had reasonable cause to believe that his or her conduct was unlawful. If a director to be indemnified has been successful in defense of anyproceedings referred to above, the director is entitled to be indemnified against all expenses, including legal fees, and against all judgments, fines and amounts paidin settlement and reasonably incurred by the director or officer in connection with the proceedings.We may purchase and maintain insurance in relation to any of our directors or officers against any liability asserted against the directors or officers andincurred by the directors or officers in that capacity, whether or not we have or would have had the power to indemnify the directors or officers against the liabilityas provided in our memorandum of association and articles of association.Insofar as indemnification for liabilities arising under the Securities Act may be permitted for our directors or officers under the foregoing provisions, wehave been informed that in the opinion of the Securities and Exchange Commission, such indemnification is against public policy as expressed in the Securities Actand is therefore unenforceable as a matter of United States law.49Differences in Corporate LawWe were incorporated under, and are governed by, the laws of the British Virgin Islands. The corporate statutes of the State of Delaware and the BritishVirgin Islands are similar, and the flexibility available under British Virgin Islands law has enabled us to adopt memorandum of association and articles of associationthat will provide shareholders with rights that do not vary in any material respect from those they would enjoy if we were incorporated under the Delaware GeneralCorporation Law, or Delaware corporate law. Set forth below is a summary of some of the differences between provisions of the BVI Act applicable to us and thelaws application to companies incorporated in Delaware and their shareholders.Director’s Fiduciary DutiesUnder Delaware corporate law, a director of a Delaware corporation has a fiduciary duty to the corporation and its stockholders. This duty has twocomponents: the duty of care and the duty of loyalty. The duty of care requires that a director act in good faith, with the care that an ordinarily prudent personwould exercise under similar circumstances. Under this duty, a director must inform himself of, and disclose to stockholders, all material information reasonablyavailable regarding a significant transaction. The duty of loyalty requires that a director act in a manner he reasonably believes to be in the best interests of thecorporation. He must not use his corporate position for personal gain or advantage. This duty prohibits selfdealing by a director and mandates that the bestinterest of the corporation and its stockholders take precedence over any interest possessed by a director, officer or controlling stockholder and not shared by thestockholders generally. In general, actions of a director are presumed to have been made on an informed basis, in good faith and in the honest belief that the actiontaken was in the best interests of the corporation. However, this presumption may be rebutted by evidence of a breach of one of the fiduciary duties. Should suchevidence be presented concerning a transaction by a director, a director must prove the procedural fairness of the transaction, and that the transaction was of fairvalue to the corporation.British Virgin Islands law provides that every director of a British Virgin Islands company in exercising his powers or performing his duties shall acthonestly and in good faith and in what the director believes to be in the best interests of the company. Additionally, the director shall exercise the care, diligence andskill that a reasonable director would exercise in the same circumstances taking into account the nature of the company, the nature of the decision and the positionof the director and his responsibilities. In addition, British Virgin Islands law provides that a director shall exercise his powers as a director for a proper purpose andshall not act, or agree to the company acting, in a manner that contravenes British Virgin Islands law or the memorandum association or articles of association of thecompany.Amendment of Governing DocumentsUnder Delaware corporate law, with very limited exceptions, a vote of the stockholders is required to amend the certificate of incorporation. Under BritishVirgin Islands law and our memorandum of association and articles of association, (i) our shareholders may amend our memorandum of association and articles ofassociation by a resolution of shareholders, or (ii) our board of directors may amend our memorandum of association and articles of association by a resolution ofdirectors without a requirement for a resolution of shareholders so long as the amendment does not:●restrict the rights of the shareholders to amend the memorandum of association and articles of association;●change the percentage of shareholders required to pass a resolution of shareholders to amend the memorandum of association and articles ofassociation;●amend the memorandum of association and articles of association in circumstances where the memorandum of association and articles ofassociation cannot be amended by the shareholders; or●amend the provisions of memorandum of association or the articles of association pertaining to “rights attaching to shares,” “rights not varied bythe issue of the shares pari passu,” “variation of rights” and “amendment of memorandum and articles”.50Written Consent of DirectorsUnder Delaware corporate law, directors may act by written consent only on the basis of a unanimous vote. Under British Virgin Islands law, directors’consents need only a majority of directors signing to take effect.Written Consent of ShareholdersUnder Delaware corporate law, unless otherwise provided in the certificate of incorporation, any action to be taken at any annual or special meeting ofstockholders of a corporation, may be taken by written consent of the holders of outstanding stock having not less than the minimum number of votes that wouldbe necessary to take such action at a meeting. As permitted by British Virgin Islands law, shareholders’ consents need only a majority of shareholders signing totake effect. Our memorandum of association and articles of association provide that shareholders may approve corporate matters by way of a resolution consentedto at a meeting of shareholders or in writing by a majority of shareholders entitled to vote thereon.Shareholder ProposalsUnder Delaware corporate law, a shareholder has the right to put any proposal before the annual meeting of shareholders, provided it complies with thenotice provisions in the governing documents. A special meeting may be called by the board of directors or any other person authorized to do so in the governingdocuments, but shareholders may be precluded from calling special meetings. British Virgin Islands law and our memorandum of association and articles ofassociation provide that our directors shall call a meeting of the shareholders if requested in writing to do so by shareholders entitled to exercise at least 30% of thevoting rights in respect of the matter for which the meeting is requested.Sale of AssetsUnder Delaware corporate law, a vote of the stockholders is required to approve the sale of assets only when all or substantially all assets are being sold. Inthe British Virgin Islands, shareholder approval is required when more than 50% of the company’s total assets by value are being disposed of or sold.Dissolution; Winding UpUnder Delaware corporate law, unless the board of directors approves the proposal to dissolve, dissolution must be approved by shareholders holding100% of the total voting power of the corporation. Only if the dissolution is initiated by the board of directors may it be approved by a simple majority of thecorporation’s outstanding shares. Delaware corporate law allows a Delaware corporation to include in its certificate of incorporation a supermajority votingrequirement in connection with dissolutions initiated by the board. As permitted by British Virgin Islands law and our memorandum of association and articles ofassociation, we may be voluntarily liquidated under Part XII of the BVI Act by resolution of directors and resolution of shareholders if we have no liabilities and weare able to pay our debts as they fall due.Redemption of SharesUnder Delaware corporate law, any stock may be made subject to redemption by the corporation at its option or at the option of the holders of such stockprovided there remains outstanding shares with full voting power. Such stock may be made redeemable for cash, property or rights, as specified in the certificate ofincorporation or in the resolution of the board of directors providing for the issue of such stock. As permitted by British Virgin Islands law, and our memorandum ofassociation and articles of association, shares may be repurchased, redeemed or otherwise acquired by us. Our directors must determine that immediately followingthe redemption or repurchase we will be able to satisfy our debts as they fall due and the value of our assets exceeds our liabilities.51Variation of Rights of SharesUnder Delaware corporate law, a corporation may vary the rights of a class of shares with the approval of a majority of the outstanding shares of suchclass, unless the certificate of incorporation provides otherwise. As permitted by British Virgin Islands law, and our memorandum of association and articles ofassociation, if our share capital is divided into more than one class of shares, we may vary the rights attached to any class only with the consent in writing ofholders of not less than threefourths of the issued shares of that class and holders of not less than threefourths of the issued shares of any other class of shareswhich may be affected by the variation.Removal of DirectorsUnder Delaware corporate law, a director of a corporation with a classified board may be removed only for cause with the approval of a majority of theoutstanding shares entitled to vote, unless the certificate provides otherwise. As permitted by British Virgin Islands law and our memorandum of association andarticles of association, directors may be removed by resolution of directors or resolution of shareholders.MergersUnder the BVI Act, two or more companies may merge or consolidate in accordance with the statutory provisions. A merger means the merging of two ormore constituent companies into one of the constituent companies, and a consolidation means the uniting of two or more constituent companies into a newcompany. In order to merger or consolidate, the directors of each constituent company must approve a written plan of merger or consolidation which must beauthorized by a resolution of shareholders.Shareholders not otherwise entitled to vote on the merger or consolidation may still acquire the right to vote if the plan of merger or consolidation containsany provision which, if proposed as an amendment to the memorandum association or articles of association, would entitle them to vote as a class or series on theproposed amendment. In any event, all shareholders must be given a copy of the plan of merger or consolidation irrespective of whether they are entitled to vote atthe meeting or consent to the written resolution to approve the plan of merger or consolidation.Inspection of Books and RecordsUnder Delaware corporate law, any shareholder of a corporation may for any proper purpose inspect or make copies of the corporation’s stock ledger, list ofshareholders and other books and records. Holders of our shares have no general right under British Virgin Islands law to inspect or obtain copies of our list ofshareholders or our corporate records. However, we will provide holders of our shares with annual audited financial statements. See “Where You Can FindAdditional Information.”Conflict of InterestThe BVI Act provides that a director shall, after becoming aware that he is interested in a transaction entered into or to be entered into by the company,disclose that interest to the board of directors of the company. The failure of a director to disclose that interest does not affect the validity of a transaction enteredinto by the director or the company, so long as the director’s interest was disclosed to the board prior to the company’s entry into the transaction or was notrequired to be disclosed (for example where the transaction is between the company and the director himself or is otherwise in the ordinary course of business andon usual terms and conditions). As permitted by British Virgin Islands law and our memorandum of association and articles of association, a director interested in aparticular transaction may vote on it, attend meetings at which it is considered, and sign documents on our behalf which relate to the transaction.52Transactions with Interested ShareholdersDelaware corporate law contains a business combination statute applicable to Delaware public corporations whereby, unless the corporation hasspecifically elected not to be governed by such statute by amendment to its certificate of incorporation, it is prohibited from engaging in certain businesscombinations with an “interested shareholder” for three years following the date that such person becomes an interested shareholder. An interested shareholdergenerally is a person or group who or that owns or owned 15% or more of the target’s outstanding voting stock within the past three years. This has the effect oflimiting the ability of a potential acquirer to make a twotiered bid for the target in which all shareholders would not be treated equally. The statute does not apply if,among other things, prior to the date on which such shareholder becomes an interested shareholder, the board of directors approves either the businesscombination or the transaction that resulted in the person becoming an interested shareholder. This encourages any potential acquirer of a Delaware publiccorporation to negotiate the terms of any acquisition transaction with the target’s board of directors.British Virgin Islands law has no comparable provision. As a result, we cannot avail ourselves of the types of protections afforded by the Delawarebusiness combination statute. However, although British Virgin Islands law does not regulate transactions between a company and its significant shareholders, itdoes provide that such transactions must be entered into bona fide in the best interests of the company and not with the effect of constituting a fraud on theminority shareholders.Independent DirectorsThere are no provisions under Delaware corporate law or under the BVI Act that require a majority of our directors to be independent.Cumulative VotingUnder Delaware corporate law, cumulative voting for elections of directors is not permitted unless the company’s certificate of incorporation specificallyprovides for it. Cumulative voting potentially facilitates the representation of minority shareholders on a board of directors since it permits the minority shareholderto cast all the votes to which the shareholder is entitled on a single director, which increases the shareholder’s voting power with respect to electing such director.There are no prohibitions to cumulative voting under the laws of the British Virgin Islands, but our memorandum of association and articles of association do notprovide for cumulative votingAntitakeover Provisions in Our Memorandum of association and articles of associationSome provisions of our memorandum of association and articles of association may discourage, delay or prevent a change in control of our company ormanagement that shareholders may consider favorable, including provisions that authorize our board of directors to issue preference shares in one or more seriesand to designate the price, rights, preferences, privileges and restrictions of such preference shares.C. MATERIAL CONTRACTS.On January 25, 2018, the Company executed an Asset Exchange Agreement (“AEA”) with C Media Limited, a corporation organized under the laws of theCayman Islands (“C Media”), whereby the Company agreed to purchase all the capital stock and equity interests of LK Technology Ltd, together with its whollyowned subsidiaries MMB Limited and Mobile Media (China) Limited and all respective subsidiaries from C Media in exchange for (i) 185,412,599 ordinary shares ofthe Company, par value $0.01 per share (“Ordinary Shares”), (ii) 1,000,000 preferred shares of Kingtone (“Preferred Shares”) and (iii) all issued and outstandingcapital stock or equity interests of the Company’s subsidiary, Topsky InfoTech Holdings Pte Ltd., and its whollyowned subsidiary Xi’an Softech Co., Ltd.,including all entities effectively controlled by Xi’an Softech Co., Ltd. through contractual arrangements and variable business entities.To consummate the contemplated transactions described above, the Company obtained shareholder consent at a special meeting held on May 20, 2018, (i)to authorize 1,000,000 Preferred Shares, (ii) to authorize additional Ordinary Shares so that total authorized Ordinary Shares is equal to 250,000,000 shares, (iii) to listsuch Ordinary Shares on NASDAQ, and (iv) to approve the transactions contemplated in the Asset Exchange Agreement. Additionally, NASDAQ needed toapprove the contemplated transactions prior to consummation thereof. C Media had the right to terminate the AEA if the closing had not occurred (other thanthrough the failure of C Media to comply fully with its obligations under the AEA) on or before July 31, 2018. The transactions contemplated by the AEA wereconsummated on August 17, 2018.53On January 25, 2018, five shareholders of the Company including its largest shareholder and its Chief Executive Officer executed a Securities PurchaseAgreement, whereby such shareholders agreed to sell a total of 617,988 Ordinary Shares and 282,694 American Depository Shares of the Company to Redstone YYLManagement Limited, a company incorporated in the British Virgin Islands, in exchange for an aggregate purchase price of $1,897,860.09.On August 25, 2018, LK Technology entered into a Stock Purchase Agreement (the “Agreement”) with the shareholders (“Shareholders”) of SuperengineHoldings Limited, a limited liability company organized under the laws of the British Virgin Islands (the “Superengine”), pursuant to which LK Technology acquiredall of the issued and outstanding capital stock of Superengine for an aggregate purchase price of US$60 million (the “Purchase Price”), which are paid by theissuance of our Ordinary Shares in an amount equal to the quotient of (x) the Purchase Price divided by (y) the average of the closing prices of the Ordinary Shareson the NASDAQ Capital Market over the 12 months period preceding July 31, 2018. We are a party to the Agreement in connection with the issuance of theOrdinary Shares and certain other limited purposes.D. EXCHANGE CONTROLS.This section sets forth a summary of the most significant regulations or requirements that affect our business activities in China or our shareholders’ rightto receive dividends and other distributions from us.Regulations on Internet Content ProvidersThe Administrative Measures on Internet Information Services, or the Internet Content Measures, which was promulgated by the State Council onSeptember 25, 2000 and amended on January 8, 2011, set out guidelines on the provision of internet information services. The Internet Content Measures specifiesthat internet information services regarding news, publications, education, medical and health care, pharmacy and medical appliances, among other things, arerequired to be examined, approved and regulated by the relevant authorities. Internet information providers are prohibited from providing services beyond thoseincluded in the scope of their licenses or filings. Furthermore, the Internet Content Measures specifies a list of prohibited content. Internet information providers areprohibited from producing, copying, publishing or distributing information that is humiliating or defamatory to others or that infringes the legal rights of others.Internet information providers that violate such prohibition may face criminal charges or administrative sanctions. Internet information providers must monitor andcontrol the information posted on their websites. If any prohibited content is found, they must remove the content immediately, keep a record of such content andreport to the relevant authorities.The Internet Content Measures classifies internet information services into commercial internet information services and noncommercial internetinformation services. Commercial internet information services refer to services that provide information or services to internet users with charge. A provider ofcommercial internet information services must obtain an ICP License.Regulations on Internet Audiovideo Program ServicesOn December 20, 2007, the MII and the State Administration of Press, Publication, Radio, Film and Television, or the SAPPRFT, jointly issued theAdministrative Provisions for the Internet AudioVideo Program Service, or the Audiovideo Program Provisions, which came into effect on January 31, 2008 andwas amended on August 28, 2015. The Audiovideo Program Provisions defines “internet audiovideo program services” as producing, editing and integrating ofaudiovideo programs, supplying audiovideo programs to the public via the internet, and providing audiovideo programs uploading and transmission services to athird party. Entities providing internet audiovideo programs services must obtain an internet audiovideo program transmission license. Applicants for such licensesshall be stateowned or statecontrolled entities unless an internet audiovideo program transmission license has been obtained prior to the effectiveness of theAudiovideo Program Provisions in accordance with the thenineffect laws and regulations. In addition, foreigninvested enterprises are not allowed to engage inthe abovementioned services. According to the Audiovideo Program Provisions and other relevant laws and regulations, audiovideo programs provided by theentities supplying Internet audiovideo program services shall not contain any illegal content or other content prohibited by the laws and regulations, such as anycontent against the basic principles in the PRC Constitution, any content that damages the sovereignty of the country or national security, and any content thatdisturbs social order or undermine social stability. An audiovideo program that has already been broadcast shall be retained in full for at least 60 days. Movies,television programs and other media content used as Internet audiovideo programs shall comply with relevant administrative regulations on programs broadcaststhrough radio, movie and television channels. Entities providing services related to Internet audiovideo programs shall immediately delete the audiovideoprograms violating laws and regulations, keep relevant records, report relevant authorities and implement other regulatory requirements.54The Categories of the Internet AudioVideo Program Services, or the Audiovideo Program Categories, promulgated by SAPPRFT on March 10, 2017,classifies internet audio/video programs into four categories: (I) Category I internet audio/video program service, which is carried out with a form of radio station ortelevision station; (II) Category II internet audio/video program service, including (a) rebroadcasting service of current political news audio/video programs; (b)hosting, interviewing, reporting and commenting service of arts, entertainment, technology, finance and economics, sports, education and other specializedaudio/video programs; (c) producing (interviewing not included) and broadcasting service of arts, entertainment, technology, finance and economics, sports,education and other specialized audio/video programs; (d) producing and broadcasting service of internet films/dramas; (e) aggregating and broadcasting service offilms, television dramas and cartoons; (f) aggregating and broadcasting service of arts, entertainment, technology, finance and economics, sports, education andother specialized audio/video programs; and (g) live audio/video broadcasting service of cultural activities of common social organizations, sport events or otherorganization activities; and (III) Category III internet audio/video program service, including (a) aggregating service of online audio/video contents, and (b) rebroadcasting service of the audio/video programs uploaded by internet users; and (IV) Category III internet audio/video program service, including (a) rebroadcasting of the radio/television program channels; and (b) rebroadcasting of internet audio/video program channels.On May 27, 2016, the SAPPRFT issued the Notice on Relevant Issues concerning Implementing the Approval Works of Upgrading Mobile Internet AudioVideo Program Service, or the Mobile AudioVideo Program Notice. The Mobile AudioVideo Program Notice provides that the mobile Internet audiovideo programservices shall be deemed Internet audiovideo program service. Entities which have obtained the approvals to provide the Internet audiovideo program servicesmay use mobile WAP websites or mobile applications to provide audiovideo program services. Entities with regulatory approvals may operate mobile applicationsto provide the audiovideo program services The types of the programs shall be within the permitted scope as provided in the licenses and such mobile applicationsshall be filed with the SAPPRFT.Regulations on Production and Operation of Radio/Television ProgramsOn July 19, 2004, the SAPPRFT promulgated the Administrative Measures on the Production and Operation of Radio and Television Programs, or the Radioand Television Program Production Measures, which came into effect on August 20, 2004 and was amended on August 28, 2015. The Radio and Television ProgramProduction Measures provides that any business that produces or operates radio or television programs must first obtain a Radio and Television ProgramProduction and Operation Permit. Entities holding such permits shall conduct their business within the permitted scope as provided in their permits. In addition,foreigninvested enterprises are not allowed to engage in the abovementioned services.Regulations on Online Advertising ServicesOn April 24, 2015, the Standing Committee of the National People’s Congress enacted the Advertising Law of the People’s Republic of China, or the NewAdvertising Law, effective on September 1, 2015. The New Advertising Law increases the potential legal liability of advertising services providers and strengthensregulations of false advertising. On July 4, 2016, the State Administration for Industry and Commerce, or the SAIC, issued the Interim Measures of theAdministration of Online Advertising, or the SAIC Interim Measures, effective on September 1, 2016. The New Advertising Law and the SAIC Interim Measuresrequire that online advertisements may not affect users’ normal internet use and internet popup ads must display a “close” sign prominently and ensure onekeyclosing of the popup windows. The SAIC Interim Measures provides that all online advertisements must be marked “Advertisement” so that viewers can easilyidentify them as such. Moreover, the SAIC Interim Measures treats paid search results as advertisements that are subject to PRC advertisement laws, and requiresthat paid search results be conspicuously identified on search result pages as advertisements. The New Advertising Law and SAIC Interim Measures require us toconduct more stringent examination and monitoring of our advertisers and the content of their advertisements.55Regulations on Online GamesIn September 2009, the GAPP (currently known as the SAPPRFT), together with the National Copyright Administration, and the National Office ofCombating Pornography and Illegal Publications jointly issued the Notice on Further Strengthening on the Administration of Preexamination and Approval ofOnline Game and the Examination and Approval of Imported Online Game, or the Circular 13. The Circular 13 states that foreign investors are not permitted to investin online game operating businesses in the PRC via wholly foreignowned entities, Sinoforeign equity joint ventures or cooperative joint ventures or to exercisecontrol over or participate in the operation of domestic online game businesses through indirect means, such as other joint venture companies or contractual ortechnical arrangements. If the our contractual arrangements were deemed under the Circular 13 to be an “indirect means” for foreign investors to exercise controlover or participate in the operation of a domestic online game business, our contractual arrangements might be challenged by the SAPPRFT. We are not aware ofany online game companies which use the same or similar contractual arrangements having been challenged by the SAPPRFT as using those contractualarrangements as an “indirect means” for foreign investors to exercise control over or participate in the operation of a domestic online game business or having beenpenalized or ordered to terminate operations since the Circular 13 became effective. However it is unclear whether and how the Circular 13 might be interpreted orimplemented in the future. See “Risk Factors—If the PRC government finds that the agreements that establish the structure for operating certain of our operations inChina do not comply with PRC regulations relating to the relevant industries, or if these regulations or the interpretation of existing regulations change in the future,we could be subject to severe penalties or be forced to relinquish our interests in those operations.”The Interim Measures for the Administration of Online Games, or the Online Game Measures, issued by the MOC, which took effect on August 1, 2010 andamended on December 15, 2017, regulates a broad range of activities related to the online games business, including the development, production and operation ofonline games, the issuance of virtual currencies used for online games, and the provision of virtual currency trading services. The Online Game Measures providesthat any entity that is engaged in online game operations must obtain an Network Cultural Business Permit, and require the content of an imported online game to beexamined and approved by the MOC prior to the game’s launch and require a domestic online game to be filed with the MOC within 30 days after its launch. TheNotice of the Ministry of Culture on the Implementation of the Interim Measures for the Administration of Online Games, which was issued by the MOC on July 29,2010 to implement the Online Game Measures, (i) requires online game operators to protect the interests of online game users and specifies that certain terms thatmust be included in service agreements between online game operators and the users of their online games, (ii) requires content review of imported online gamesand filing procedures for domestic online games, (iii) emphasizes the protection of minors playing online games, and (iv) requests online game operators to promoterealname registration by their game users.Regulations on Information Security, Censorship and PrivacyThe Standing Committee of the National People’s Congress, China’s national legislative body, enacted the Decisions on the Maintenance of InternetSecurity on December 28, 2000 that may subject persons to criminal liabilities in China for any attempt to use the internet to: (i) gain improper entry to a computer orsystem of strategic importance; (ii) disseminate politically disruptive information; (iii) leak state secrets; (iv) spread false commercial information or (v) infringe uponintellectual property rights. In 1997, the Ministry of Public Security issued the Administration Measures on the Security Protection of Computer InformationNetwork with International Connections which prohibits using the internet to leak state secrets or to spread socially destabilizing materials. If an ICP license holderviolates these measures, the PRC government may revoke its ICP license and shut down its websites. Pursuant to the Ninth Amendment to the Criminal Law issuedby the Standing Committee of the National People’s Congress on August 29, 2015, effective on November 1, 2015, any ICP provider that fails to fulfill the obligationsrelated to internet information security as required by applicable laws and refuses to take corrective measures, will be subject to criminal liability for (i) any largescale dissemination of illegal information; (ii) any severe effect due to the leakage of users’ personal information; (iii) any serious loss of evidence of criminalactivities; or (iv) other severe situations, and any individual or entity that (i) sells or provides personal information to others unlawfully or (ii) steals or illegallyobtains any personal information will be subject to criminal liability in severe situations.56The Cybersecurity Law of the PRC, or the Cybersecurity Law, which was promulgated on November 7, 2016 by the Standing Committee of the NationalPeople’s Congress and came into effect on June 1, 2017, provides that network operators shall meet their cyber security obligations and shall take technicalmeasures and other necessary measures to protect the safety and stability of their networks. Under the Cybersecurity Law, network operators are subject to varioussecurity protectionrelated obligations, including: (i) network operators shall comply with certain obligations regarding maintenance of the security of internetsystems; (ii) network operators shall verify users’ identities before signing agreements or providing certain services such as information publishing or realtimecommunication services; (iii) when collecting or using personal information, network operators shall clearly indicate the purposes, methods and scope of theinformation collection, the use of information collection, and obtain the consent of those from whom the information is collected; (iv) network operators shall strictlypreserve the privacy of user information they collect, and establish and maintain systems to protect user privacy; (v) network operators shall strengthenmanagement of information published by users, and when they discover information prohibited by laws and regulations from publication or dissemination, theyshall immediately stop dissemination of that information, including taking measures such as deleting the information, preventing the information from spreading,saving relevant records, and reporting to the relevant governmental agencies.Regulations on Intellectual Property RightsRegulations on CopyrightThe Copyright Law of the PRC, or the Copyright Law, which took effect on June 1, 1991 and was amended in 2001 and in 2010, provides that Chinesecitizens, legal persons, or other organizations shall, whether published or not, own copyright in their copyrightable works, which include, among others, works ofliterature, art, natural science, social science, engineering technology and computer software. Copyright owners enjoy certain legal rights, including right ofpublication, right of authorship and right of reproduction. The Copyright Law as revised in 2010 extends copyright protection to Internet activities, productsdisseminated over the Internet and software products. In addition, Copyright Law provides for a voluntary registration system administered by the China CopyrightProtection Center, or the CPCC. According to the Copyright Law, an infringer of the copyrights shall be subject to various civil liabilities, which include ceasinginfringement activities, apologizing to the copyright owners and compensating the loss of copyright owner. Infringers of copyright may also subject to fines and/oradministrative or criminal liabilities in severe situations.The Computer Software Copyright Registration Measures, or the Software Copyright Measures, promulgated by the State Council on December 20, 2001and amended on January 30, 2013, regulates registrations of software copyright, exclusive licensing contracts for software copyright and assignment agreements.The National Copyright Administration, or the NCA administers software copyright registration and the CPCC, is designated as the software registration authority.The CPCC shall grant registration certificates to the Computer Software Copyrights applicants which meet the requirements of both the Software CopyrightMeasures and the Computer Software Protection Regulations (Revised in 2013).The Provisions of the Supreme People’s Court on Certain Issues Related to the Application of Law in the Trial of Civil Cases Involving Disputes onInfringement of the Information Network Dissemination Rights specifies that disseminating works, performances or audiovideo products by the internet users orthe internet service providers via the internet without the permission of the copyright owners shall be deemed to have infringed the right of dissemination of thecopyright owner.57The Measures for Administrative Protection of Copyright Related to Internet, which was jointly promulgated by the NCA and the MIIT on April 29, 2005and became effective on May 30, 2005, provides that upon receipt of an infringement notice from a legitimate copyright holder, an ICP operator must take remedialactions immediately by removing or disabling access to the infringing content. If an ICP operator knowingly transmits infringing content or fails to take remedialactions after receipt of a notice of infringement that harms public interest, the ICP operator could be subject to administrative penalties, including an order to ceaseinfringing activities, confiscation by the authorities of all income derived from the infringement activities, or payment of fines.On May 18, 2006, the State Council promulgated the Regulations on the Protection of the Right to Network Dissemination of Information (as amended in2013). Under these regulations, an owner of the network dissemination rights with respect to written works or audio or video recordings who believes thatinformation storage, search or link services provided by an Internet service provider infringe his or her rights may require that the Internet service provider delete, ordisconnect the links to, such works or recordings.Patent LawsAccording to the Patent Law of the PRC (Revised in 2008), the State Intellectual Property Office is responsible for administering patent law in the PRC. Thepatent administration departments of provincial, autonomous region or municipal governments are responsible for administering patent law within their respectivejurisdictions. The Chinese patent system adopts a firsttofile principle, which means that when more than one person file different patent applications for the sameinvention, only the person who files the application first is entitled to obtain a patent of the invention. To be patentable, an invention or a utility model must meetthree criteria: novelty, inventiveness and practicability. A patent is valid for twenty years in the case of an invention and ten years in the case of utility models anddesigns.Trademark LawsTrademarks are protected by the Trademark Law of the PRC (Revised in 2013) which was adopted in 1982 and subsequently amended in 1993, 2001 and 2013respectively as well as by the Implementation Regulations of the PRC Trademark Law adopted by the State Council in 2002 and as most recently amended on April29, 2014. The Trademark Office under the SAIC handles trademark registrations. The Trademark Office grants a tenyear term to registered trademarks and the termmay be renewed for another tenyear period upon request by the trademark owner. A trademark registrant may license its registered trademarks to another party byentering into trademark license agreements, which must be filed with the Trademark Office for its record. As with patents, the Trademark Law has adopted a firsttofile principle with respect to trademark registration. If a trademark applied for is identical or similar to another trademark which has already been registered or subjectto a preliminary examination and approval for use on the same or similar kinds of products or services, such trademark application may be rejected. Any personapplying for the registration of a trademark may not injure existing trademark rights first obtained by others, nor may any person register in advance a trademark thathas already been used by another party and has already gained a “sufficient degree of reputation” through such party’s use.Regulations on Domain NamesThe MIIT promulgated the Measures on Administration of Internet Domain Names, or the Domain Name Measures, on August 24, 2017, which took effecton November 1, 2017 and replaced the Administrative Measures on China Internet Domain Name promulgated by MII on November 5, 2004. According to theDomain Name Measures, the MIIT is in charge of the administration of PRC internet domain names. The domain name registration follows a firsttofile principle.Applicants for registration of domain names shall provide the true, accurate and complete information of their identities to domain name registration serviceinstitutions. The applicants will become the holder of such domain names upon the completion of the registration procedure.Relevant Regulations of the Hightech EnterpriseThe Ministry of Information Industry, the Ministry of Science and Technology and the State Tax Bureau collectively promulgated and issued the“Certifying Standard and Managing Measures for Hightech Enterprises” and “the Hightech Areas of Main National Support” on April 14, 2008 to certify the Hightech enterprise and encourage and support the development of the Chinese Hightech enterprises. Under the Hightech Enterprises Measures, the enterprise canenjoy the favorable tax policy when it is certified as a Hightech enterprise by the Ministry of Information Industry, the Ministry of Science and Technology and theState Tax Bureau or with its provincial branch according to the stipulated standard. The software and computer and network technology are recognized as the mainnational supported Hightech field. Kingtone Information is a Hightech enterprise and enjoys a favorable income tax rate of 15%.58Laws and Regulations of Intellectual Property RightsChina has adopted legislation governing intellectual property rights, including patents, copyrights and trademarks. China is a signatory to the maininternational conventions on intellectual property rights and became a member of the Agreement on Trade Related Aspects of Intellectual Property Rights upon itsaccession to the WTO in December 2001.PatentsThe “Patent Law of the People’s Republic of China” promulgated by the Standing Committee of the National People's Congress, adopted in 1985 andrevised in 1992, 2001 and 2008, protects registered patents. The State Intellectual Property Office of PRC handles granting patent rights, providing for a twentyyearpatent term for inventions and a tenyear patent term for utility models and designs. As we disclosed in Item 4, of this transition report on Form 20F, throughKingtone Information, we have been granted one invention patent “wireless video transmission system based on BREW platform” by the State Intellectual PropertyOffice (“SIPO”) of PRC on September 23, 2009 and therefore such invention is entitled to all the protections provided under the Patent Law for twenty years.Computer Software Copyright and AdministrationOn December 20, 2001, the State Council of PRC issued the “Regulation for Computer Software Protection of the People’s Republic of China” (the“Regulation for Computer Software Protection”) which became effective on January 1, 2002 to protect the interests of copyright owners, to promote the research andapplication and to encourage the development of the Chinese software industry. Under the Regulation for Computer Software Protection, natural persons, legalpersons or any other organizations shall have a copyright on the software developed by such persons no matter whether such software has been published. Theprotection period of software copyrights owned by the legal person or other organization is fifty years and expires on December 31 of the fiftieth year from the initialpublication date of such computer software. Currently, Kingtone Information has twelve registration certificates for software copyrights.TrademarksThe “Trademark Law of the People’s Republic of China” promulgated by the State Council of PRC, adopted in 1982 and revised in 1993 and 2001, protectsregistered trademarks. The Trademark Office under the Chinese State Administration for Industry and Commerce handles trademark registrations and grants a termof ten years to registered trademarks which are renewable for another ten years after the application to the Trademark Office by the owners of the trademarks.Trademark license agreements must be filed with the Trademark Office for record. China has a “firsttoregister” system that requires no evidence of prior use orownership. Kingtone Information has its registered trademarks as described in Item 4 of this transition report on Form 20F. Accordingly, such trademarks areentitled to the protection under the Trademark Law.Foreign Currency ExchangeOn August 29, 2008, the SAFE issued the Notice of the General Affairs Department of the State Administration of Foreign Exchange on the RelevantOperating Issues concerning the Improvement of the Administration of Payment and Settlement of Foreign Currency Capital of Foreignfunded Enterprises, orCircular 142. Pursuant to Circular 142, RMB converted from the foreign currencydenominated capital of a foreigninvested company may only be used for purposeswithin the business scope approved by the applicable governmental authority and may not be used for equity investments within the PRC unless specificallyprovided for otherwise. The use of such Renminbi capital may not be changed without SAFE’s approval and may not in any case be used to repay Renminbi loans ifthe proceeds of such loans have not been used.59See “Risk Factors — Risks Related to Doing Business in China — PRC regulation of loans and direct investment by offshore holding companies to PRCentities may delay or prevent us from using the proceeds of our initial public offering to make loans or additional capital contributions to our PRC operatingsubsidiaries, which could materially and adversely affect our liquidity and our ability to fund and expand our business”.Dividend DistributionWe are a British Virgin Islands holding company and substantially all of our operations are conducted through LK Technology. We rely on dividends andother distributions from our LK Technology and its subsidiaries to provide us with our cash flow and allow us to pay dividends on the shares underlying our ADSsand meet our other obligations. The principal regulations governing distribution of dividends paid by wholly foreignowned enterprises include:1.Wholly ForeignOwned Enterprise Law (1986), as amended; and2.Implementation Rules on Wholly ForeignOwned Enterprise Law (1990), as amended.Under these regulations, wholly foreignowned enterprises in China may pay dividends only out of their accumulated profits, if any, determined inaccordance with PRC accounting standards and regulations. In addition, wholly foreignowned enterprises in China are required to set aside at least 10% of theiraftertax profit based on PRC accounting standards each year to its general reserves until the accumulative amount of such reserves reach 50% of its registeredcapital. These reserves are not distributable as cash dividends. The board of directors of a FIE has the discretion to allocate a portion of its aftertax profits to staffwelfare and bonus funds, which may not be distributed to equity owners except in the event of liquidation.Regulation of Foreign Exchange in Certain Onshore and Offshore TransactionsIn October 2005, the SAFE issued the Notice on Issues Relating to the Administration of Foreign Exchange in Fundraising and Return InvestmentActivities of Domestic Residents Conducted via Offshore Special Purpose Companies, or SAFE Notice 75, which became effective as of November 1, 2005, and wasfurther supplemented by two implementation notices issued by the SAFE on November 24, 2005 and May 29, 2007, respectively. Under Circular 75, prior registrationwith the local SAFE branch is required for PRC residents to establish or to control an offshore company for the purposes of financing that offshore company withassets or equity interests in an onshore enterprise located in the PRC. An amendment to the registration or filing with the local SAFE branch by such PRC resident isalso required for the injection of equity interests or assets of an onshore enterprise in the offshore company or overseas funds raised by such offshore company, orany other material change with respect to the offshore company in connection with any increase or decrease of capital, transfer of shares, merger, division, equityinvestment, debt investment, or creation of any security interest over any assets located in the PRC.Under SAFE Notice 75, PRC residents are further required to repatriate into the PRC all of their dividends, profits or capital gains obtained from theirshareholdings in the offshore entity within 180 days of their receipt of such dividends, profits or capital gains. The registration and filing procedures under SAFENotice 75 are prerequisites for other approval and registration procedures necessary for capital inflow from the offshore entity, such as inbound investments orshareholders loans, or capital outflow to the offshore entity, such as the payment of profits or dividends, liquidating distributions, equity sale proceeds, or thereturn of funds upon a capital reduction. Therefore, failure to comply with such registration may subject us to certain restrictions on, including but not limited to, theincrease of the registered capital of our PRC subsidiary, making loans to our PRC subsidiary, and making distributions to us from our onshore companies.Regulations of Overseas Investments and ListingsOn August 8, 2006, six PRC regulatory agencies, including the MOFCOM, the State Assets Supervision and Administration Commission, the StateAdministration for Taxation, the State Administration for Industry and Commerce, the CSRC and the SAFE, jointly adopted the New M&A Rule, which becameeffective on September 8, 2006. This regulation, among other things, includes provisions that purport to require that an offshore SPV formed for purposes ofoverseas listing of equity interests in PRC companies and controlled directly or indirectly by PRC companies or individuals obtain the approval of the CSRC prior tothe listing and trading of such SPV’s securities on an overseas stock exchange.60On September 21, 2006, the CSRC published on its official website procedures regarding its approval of overseas listings by SPVs. The CSRC approvalprocedures require the filing of a number of documents with the CSRC and it would take several months to complete the approval process.The application of the New M&A Rule with respect to overseas listings of SPVs remains unclear with no consensus currently existing among the leadingPRC law firms regarding the scope of the applicability of the CSRC approval requirement.We believe that, based on our understanding of the current PRC laws, regulations and rules and the procedures announced on September 21, 2006, there isno requirement in this regulation that would require an application to be submitted to the MOFCOM or the CSRC for the approval of the listing and trading of ourADSs on the NASDAQ Capital Market.See “Risk Factors — Risks Related to Doing Business in China — If we were required to obtain the prior approval of the China Securities RegulatoryCommission, or CSRC, of the listing and trading of our ADSs on the NASDAQ Capital Market, we may face regulatory actions or other sanctions from the CSRC orother PRC regulatory agencies.”E. TAXATIONThe following discussion sets forth the material British Virgin Islands, PRC and U.S. federal income tax consequences of an investment in our ADSs andthe ordinary shares represented by our ADSs, sometimes referred to collectively as the “securities”. It is based upon laws and relevant interpretations thereof ineffect as of the date of this report, all of which are subject to change. This discussion does not deal with all possible tax consequences relating to an investment inthe securities, such as the tax consequences under state, local and other tax laws. As used in this discussion, “we,” “our” and “us” refers only to LuokungTechnology Ltd.British Virgin Islands TaxationUnder the law of the British Virgin Islands as currently in effect, a holder of the securities who is not a resident of the British Virgin Islands is not liable forBritish Virgin Islands tax on dividends paid with respect to the securities and all holders of the securities are not liable to the British Virgin Islands for tax on gainsrealized during that year on the sale or disposal of such ordinary shares. The British Virgin Islands does not impose a withholding tax on dividends paid by acompany incorporated or reregistered under the BVI Act.There are no capital gains, gift or inheritance taxes levied by the British Virgin Islands on companies incorporated under the BVI Act. In addition, shares ofcompanies incorporated under the BVI Act are not subject to transfer taxes, stamp duties or similar charges.There is no income tax treaty or convention currently in effect between the United States and the British Virgin Islands or between China and the BritishVirgin Islands.61People’s Republic of China TaxationIn 2007, the PRC National People’s Congress enacted the new Enterprise Income Tax Law (the “EIT Law”), which became effective on January 1, 2008. Thenew EIT Law imposes a single uniform income tax rate of 25% on all Chinese enterprises, including foreigninvested enterprises, and levies a withholding tax rate of10% on dividends payable by Chinese subsidiaries to their foreign shareholders unless any such foreign shareholders’ jurisdiction of incorporation has a tax treatywith China that provides for a different withholding agreement. Under the new EIT Law, enterprises established outside China but deemed to have a “de factomanagement body” within the country may be considered “resident enterprises” for Chinese tax purposes and, therefore, may be subject to an enterprise income taxrate of 25% on their worldwide income. Pursuant to the implementation rules of the new EIT Law, a “de facto management body” is defined as a body that hasmaterial and overall management control over the business, personnel, accounts and properties of the enterprise. Although substantially all members of ourmanagement are located in China, it is unclear whether Chinese tax authorities would require (or permit) us to be treated as PRC resident enterprises. If we aredeemed a Chinese tax resident enterprise, we may be subject to an enterprise income tax rate of 25% on our worldwide income, excluding dividends received directlyfrom another Chinese tax resident enterprise, as well as PRC enterprise income tax reporting obligations. If we are not deemed to be a Chinese tax resident enterprise,we may be subject to certain PRC withholding taxes. See “Risk Factors — Risks Related to Doing Business in China — Our holding company structure may limit thepayment of dividends.” As a result of such changes, our historical tax rates may not be indicative of our tax rates for future periods and the value of our ADSs orordinary shares may be adversely affected. If we are deemed a PRC resident enterprise and investors’ gain from the sales of the securities and dividends payable byus are deemed sourced from China, such gains and dividends payable by us may be subject to PRC tax. See “Risk Factors — Risks Related to Doing Business inChina — If we were deemed a “resident enterprise” by PRC tax authorities, we could be subject to tax on our global income at the rate of 25% under the New EITLaw and our nonPRC shareholders could be subject to certain PRC taxes.United States Federal Income TaxationGeneralThe following is a discussion of the material U.S. federal income tax consequences to an investor of purchasing, owning and disposing of our securities.This discussion does not address any aspects of U.S. federal gift or estate tax or the state, local or nonU.S. tax consequences of an investment in the securities.YOU SHOULD CONSULT YOUR OWN TAX ADVISORS CONCERNING THE U.S. FEDERAL, STATE, LOCAL AND NONU.S. TAX CONSEQUENCES OFPURCHASING, OWNING AND DISPOSING OF THE SECURITIES IN YOUR PARTICULAR SITUATION.This discussion applies only to those investors that purchase the securities in this offering and that hold the securities as capital assets within the meaningof section 1221 of the Internal Revenue Code of 1986, as amended (the “Code”). This section does not apply to holders that may be subject to special tax rules,including but not limited to:1.dealers in securities or currencies;2.traders in securities that elect to use a marktomarket method of accounting;3.banks, insurance companies or certain financial institutions;4.taxexempt organizations;5.governments or agencies or instrumentalities thereof;6.partnerships or other entities treated as partnerships or other passthrough entities for U.S. federal income tax purposes or persons holding thesecurities through such entities;7.regulated investment companies or real estate investment trusts;8.holders subject to the alternative minimum tax;9.holders that actually or constructively own 10% or more of the total combined voting power of all classes of our shares entitled to vote;10.holders that acquired the securities pursuant to the exercise of employee stock options, in connection with employee stock incentive plans orotherwise as compensation;11.holders that hold the securities as part of a straddle, hedging or conversion transaction; or12.holders whose functional currency is not the U.S. dollar.62This section is based on the Code, its legislative history, existing and proposed U.S. Treasury regulations, published rulings and other administrativeguidance of the U.S. Internal Revenue Service (the “IRS”) and court decisions, all as in effect on the date hereof. These laws are subject to change or differentinterpretation by the IRS or a court, possibly on a retroactive basis.We have not sought, and will not seek, a ruling from the IRS as to any U.S. federal income tax consequence described herein. The IRS may disagree withthe discussion herein, and its determination may be upheld by a court. Moreover, there can be no assurance that future legislation, regulation, administrative rulingsor court decisions will not adversely affect the accuracy of the statements in this discussion.The discussion below of the U.S. federal income tax consequences to “U.S. Holders” will apply to a beneficial owner of the securities that is for U.S. federalincome tax purposes:1.a citizen or resident of the United States;2.a corporation (or other entity treated as a corporation) that is created or organized (or treated as created or3.organized) under the laws of the United States, any state thereof or the District of Columbia;4.an estate whose income is subject to U.S. federal income tax regardless of its source; or5.a trust if (a) a U.S. court can exercise primary supervision over the trust’s administration and one or more U.S.6.persons are authorized to control all substantial decisions of the trust, or (b) if the trust has a valid election in effect under applicable U.S.Treasury regulations to be treated as a U.S. person.If a beneficial owner of the securities is not described as a U.S. Holder and is not an entity treated as a partnership or other passthrough entity for U.S.federal income tax purposes, such owner will be considered a “NonU.S. Holder.” The material U.S. federal income tax consequences applicable specifically to NonU.S. Holders are described below under the heading “Tax Consequences to NonU.S. Holders.”If a partnership (including for this purpose any entity treated as a partnership for U.S. tax purposes) is a beneficial owner of the securities, the U.S. taxtreatment of a partner in the partnership generally will depend on the status of the partner and the activities of the partnership. A holder of the securities that is apartnership or partners in such a partnership should consult their own tax advisors about the U.S. federal income tax consequences of holding and disposing of thesecurities.This discussion assumes that any distributions made (or deemed made) on the securities and any consideration received by a holder in consideration forthe sale or other disposition of the securities will be in U.S. dollars. This discussion also assumes that the representations contained in the Deposit Agreement aretrue and that the obligations in the Deposit Agreement and any related agreement will be complied with in accordance with their terms. Finally, this discussionassumes that each ADS will only represent ordinary shares in us, and will not represent any other type of security, such as a bond, cash or other property.63For U.S. federal income tax purposes, a holder of an ADS will be treated as the beneficial owner of the shares represented by such ADS and an exchange ofan ADS for ordinary shares will not be subject to U.S. federal income tax. The U.S. Treasury has expressed concerns that parties to whom ADSs are prereleased, orintermediaries in the chain of ownership between holders of ADSs and the issuer of the securities underlying the ADSs may be taking actions that are inconsistentwith the claiming of foreign tax credits by U.S. Holders of ADSs. Such actions would also be inconsistent with the claiming of the reduced rate of tax applicable todividends received by certain noncorporate U.S. Holders, including individual U.S. Holders, as described below under “Tax Consequences to U.S.Holders — Taxation of Distributions.” Accordingly, the availability of foreign tax credits or the reduced tax rate for dividends received by certain noncorporate U.S.Holders, including individual U.S. Holders, could be affected by actions taken by parties to whom the ADSs are released, or by future actions by the U.S. Treasury.Tax Consequences to U.S. HoldersTaxation of DistributionsSubject to the passive foreign investment company, or PFIC, rules discussed below, the gross amount of any cash distributions we make with respect to aU.S. Holder in respect of such U.S. Holder’s ADSs or shares will generally be treated as dividend income if the distributions are made from our current oraccumulated earnings and profits, calculated according to U.S. federal income tax principles. Cash dividends will generally be subject to U.S. federal income tax asordinary income on the day the U.S. Holder actually or constructively receives such income. With respect to noncorporate U.S. Holders for taxable years beginningbefore January 1, 2011, dividends may be taxed at the lower applicable longterm capital gains rate provided that (a) our ADSs or shares are readily tradable on anestablished securities market in the United States, or, in the event we are deemed to be a Chinese “resident enterprise” under the EIT Law (as described above under“People’s Republic of China Taxation”), we are eligible for the benefits of the income tax treaty between the United States and the PRC (the “U.S.PRC Tax Treaty”),(b) we are not a PFIC, as discussed below, for either the taxable year in which the dividend was paid or the preceding taxable year, and (c) certain holding periodrequirements are met. Under published IRS authority, ADSs are considered for purposes of clause (a) above to be readily tradable on an established securitiesmarket in the United States only if they are listed on certain exchanges, which presently include the NASDAQ Capital Market. U.S. Holders should consult their owntax advisors regarding the availability of the lower rate for any dividends paid with respect to our ADSs or shares.Dividends will not be eligible for the dividendsreceived deduction allowed to U.S. corporations in respect of dividends received from other U.S.corporations. Generally, if we distribute noncash property as a dividend (other than pro rata distributions of our shares) out of our current or accumulated earningsand profits (as determined for U.S. federal income tax purposes), a U.S. Holder generally will include in income an amount equal to the fair market value of theproperty, on the date that it is distributed.Distributions in excess of current and accumulated earnings and profits, as determined for U.S. federal income tax purposes, will be treated as a nontaxablereturn of capital to the extent of the U.S. Holder’s basis in its shares or ADSs and thereafter as capital gain. However, we do not plan on calculating our earnings andprofits in accordance with U.S. federal income tax principles. U.S. holders therefore should generally assume that any distributions paid by us will be treated asdividends for U.S. federal income tax purposes.If PRC taxes apply to dividends paid by us to a U.S. Holder (see “People’s Republic of China Taxation,” above), such taxes may be treated as foreign taxeseligible for credit against such holder’s U.S. federal income tax liability (subject to certain limitations), and a U.S. Holder may be entitled to certain benefits under theU.S.PRC Tax Treaty. The rules relating to the U.S. foreign tax credit are complex. U.S. Holders should consult their own tax advisors regarding the creditability ofany such PRC tax and their eligibility for the benefits of the U.S.PRC Tax Treaty.64Taxation of Dispositions of SharesSubject to the PFIC rules discussed below, a U.S. holder that sells or otherwise disposes of its shares will recognize capital gain or loss for U.S. federalincome tax purposes equal to the difference between the amount realized and such U.S. Holder’s tax basis in its shares. Prior to January 1, 2011, capital gains of anoncorporate U.S. holder are generally taxed at a maximum rate of 15% where the property is held for more than one year (and 20% thereafter). The ability to deductcapital losses is subject to limitations.If PRC taxes apply to any gain from the disposition of our shares by a U.S. Holder, such taxes may be treated as foreign taxes eligible for credit against suchholder’s U.S. federal income tax liability (subject to certain limitations), and a U.S. Holder may be entitled to certain benefits under the U.S.PRC Tax Treaty. U.S.Holders should consult their own tax advisors regarding the creditability of any such PRC tax and their eligibility for the benefits of the U.S.PRC Tax Treaty.Passive Foreign Investment CompanyWe do not expect to be a PFIC for U.S. federal income tax purposes for our current tax year or in the foreseeable future. The determination of whether or notwe are a PFIC in respect of any of our taxable years is a factual determination that cannot be made until the close of the applicable tax year and that is based on thetypes of income we earn and the value and composition of our assets (including goodwill), all of which are subject to change. Therefore, we can make no assurancesthat we will not be a PFIC in respect of our current taxable year or in the future.In general, we will be a PFIC in any taxable year if either:1.at least 75% of our gross income for the taxable year is passive income; or2.at least 50% of the value, determined on the basis of a quarterly average, of our assets is attributable to assets that produce or are held for theproduction of passive income.Passive income includes dividends, interest, royalties, rents (other than certain rents and royalties derived in the active conduct of a trade or business), theexcess of gains over losses from certain types of transactions in commodities, annuities and gains from assets that produce passive income. We will be treated asowning our proportionate share of the assets and earning our proportionate share of the income of any corporation in which we own, directly or indirectly, at least25% (by value) of the stock.If we are treated as a PFIC in any year during which a U.S. Holder owns the securities, and such U.S. Holder did not make a marktomarket election, asdescribed below, the U.S. Holder will be subject to special rules with respect to:1.any gain recognized by the U.S. Holder on the sale or other disposition of its shares; and any excess distribution that we make to the U.S. Holder(generally, the excess of the amount of any distributions to such U.S. Holder during a single taxable year of such U.S. Holder over 125% of theaverage annual distributions received by such U.S. Holder in respect of the shares during the three preceding taxable years of such U.S. Holder or,if shorter, such U.S. Holder holding period for the shares).Under these rules:2.the gain or excess distribution will be allocated ratably over the U.S. Holder’s holding period for the shares;3.the amount allocated to the U.S. Holder’s taxable year in which it realized the gain or excess distribution or to the period in the U.S. Holder’sholding period before the first day of our first taxable year in which we are a PFIC will be taxed as ordinary income;4.the amount allocated to other taxable years (or portions thereof) of the U.S. Holder and included in its holding period will be taxed at the highesttax rate in effect for that year; and5.the interest charge generally applicable to underpayments of tax will be imposed in respect of the tax attributable to each such other taxable yearof the U.S. Holder. 6.Special rules apply for calculating the amount of the foreign tax credit with respect to excess distributions by a PFIC.65Alternatively, if a U.S. Holder, at the close of its taxable year, owns ordinary shares in a PFIC that are treated as marketable stock, the U.S. Holder may makea marktomarket election with respect to such shares for such taxable year. Our shares will be “marketable” to the extent that they remain regularly traded on anational securities exchange, such as the NASDAQ Capital Market. If a U.S. Holder makes this election in a timely fashion, it will not be subject to the PFIC rulesdescribed above. Instead, in general, the U.S. Holder will include as ordinary income each year the excess, if any, of the fair market value of its shares at the end ofthe taxable year over its adjusted basis in its shares. Any ordinary income resulting from this election would generally be taxed at ordinary income tax rates andwould not be eligible for the reduced rate of tax applicable to qualified dividend income. The U.S. Holder will also be allowed to take an ordinary loss in respect ofthe excess, if any, of the adjusted basis of its shares over the fair market value at the end of the taxable year (but only to the extent of the net amount of previouslyincluded income as a result of the marktomarket election). The U.S. Holder’s basis in the shares will be adjusted to reflect any such income or loss amounts. U.S.Holders should consult their own tax advisor regarding potential advantages and disadvantages of making a marktomarket election with respect to their shares.Alternatively, a U.S. Holder of stock in a PFIC may avoid the PFIC tax consequences described above in respect to our or shares by making a timely“qualified electing fund” election to include in income its pro rata share of our net capital gains (as longterm capital gain) and other earnings and profits (asordinary income), on a current basis, in each case whether or not distributed, in the taxable year of the U.S. Holder in which or with which our taxable year ends.However, the qualified electing fund election is available only if the PFIC provides such U.S. Holder with certain information regarding its earnings and profits asrequired under applicable U.S. Treasury regulations. We do not intend to furnish the information that a U.S. Holder would need in order to make a qualified electingfund election. Therefore, U.S. Holders will not be able to make or maintain such election with respect to their or shares.If a U.S. Holder owns our shares or during any year that we are a PFIC, such holder must file U.S. Internal Revenue Service Form 8621 regarding suchholder’s shares or and the gain realized on the disposition of the shares. The reduced tax rate for dividend income, discussed in “Taxation of Distributions,” is notapplicable to dividends paid by a PFIC. U.S. Holders should consult with their own tax advisors regarding reporting requirements with respect to their shares.Tax Consequences to NonU.S. HoldersDividends paid to a NonU.S. Holder in respect of our or shares generally will not be subject to U.S. federal income tax, unless the dividends are effectivelyconnected with the NonU.S. Holder’s conduct of a trade or business within the United States (and, if required by an applicable income tax treaty, are attributable toa permanent establishment or fixed base that such holder maintains in the United States).In addition, a NonU.S. Holder generally will not be subject to U.S. federal income tax on any gain attributable to a sale or other disposition of our or sharesunless such gain is effectively connected with its conduct of a trade or business in the United States (and, if required by an applicable income tax treaty, isattributable to a permanent establishment or fixed base that such holder maintains in the United States) or the NonU.S. Holder is an individual who is present in theUnited States for 183 days or more in the taxable year of sale or other disposition and certain other conditions are met (in which case, such gain from United Statessources generally is subject to tax at a 30% rate or a lower applicable tax treaty rate).Dividends and gains that are effectively connected with the NonU.S. Holder’s conduct of a trade or business in the United States (and, if required by anapplicable income tax treaty, are attributable to a permanent establishment or fixed base in the United States) generally will be subject to tax in the same manner as fora U.S. Holder and, in the case of a NonU.S. Holder that is a corporation for U.S. federal income tax purposes, may also be subject to an additional branch profits taxat a 30% rate or a lower applicable tax treaty rate.66Information Reporting and Backup Withholding In general, information reporting for U.S. federal income tax purposes generally should apply to distributions made on the securities within the UnitedStates to a noncorporate U.S. Holder and to the proceeds from sales and other dispositions of the securities by a noncorporate U.S. Holder to or through a U.S.office of a broker. Payments made (and sales and other dispositions effected at an office) outside the United States generally should be subject to informationreporting in limited circumstances.Dividend payments made to U.S. Holders and proceeds paid from the sale or other disposition the securities may be subject to information reporting to theIRS and possible U.S. federal backup withholding at a current rate of 28%. Certain exempt recipients, such as corporations, are not subject to these informationreporting requirements. Backup withholding will not apply to a U.S. Holder who furnishes a correct taxpayer identification number and makes any other requiredcertification, or who is otherwise exempt from backup withholding. U.S. Holders who are required to establish their exempt status must provide a duly executed IRSForm W9.A NonU.S. Holder generally may eliminate the requirement for information reporting and backup withholding by providing certification of its foreignstatus, under penalties of perjury, on a duly executed applicable IRS Form W8 or by otherwise establishing an exemption.Backup withholding is not an additional tax. Rather, the amount of any backup withholding will be allowed as a credit against a U.S. Holder’s or a nonU.S.Holder’s U.S. federal income tax liability and may entitle such holder to a refund, provided that certain required information is timely furnished to the IRS.PROSPECTIVE PURCHASERS OF OUR SECURITIES SHOULD CONSULT WITH THEIR OWN TAX ADVISORS REGARDING THE APPLICATION OFTHE U.S. FEDERAL INCOME TAX LAWS TO THEIR PARTICULAR SITUATIONS AS WELL AS ANY ADDITIONAL TAX CONSEQUENCES RESULTING FROMPURCHASING, HOLDING OR DISPOSING OF OUR SECURITIES, INCLUDING THE APPLICABILITY AND EFFECT OF THE TAX LAWS OF ANY STATE, LOCALOR NONU.S. JURISDICTION, INCLUDING ESTATE, GIFT, AND INHERITANCE LAWS AND APPLICABLE TAX TREATIES.F. DIVIDENDS AND PAYING AGENTS.Not applicable.G. STATEMENT BY EXPERTS.None.H. DOCUMENTS ON DISPLAY.We previously filed a registration statement on Form F1 (File No. 333166056) with the SEC relating to our initial public offering in May 2010. This transition reportdoes not contain all of the information in the registration statement and the exhibits and financial statements included with the registration statement. References inthis transition report to any of our contracts, agreements or other documents are not necessarily complete, and you should refer to the exhibits attached to theregistration statement for copies of the actual contracts, agreements or documents. In addition, we will file transition reports on Form 20F and submit otherinformation under cover of Form 6K. As a foreign private issuer, we are exempt from the proxy requirements of Section 14 of the Exchange Act and our officers,directors and principal shareholders will be exempt from the insider shortswing disclosure and profit recovery rules of Section 16 of the Exchange Act. You may readand copy the registration statement, the related exhibits and other materials we file with the SEC at the SEC's public reference room in Washington, D.C. at 100 FStreet, Room 1580, N.E., Washington, D.C.20549. You can also request copies of those documents, upon payment of a duplicating fee, by writing to the SEC. Pleasecall the SEC at 1800SEC0330 for further information on the operation of the public reference rooms. The SEC also maintains an Internet site that contains reports,proxy and information statements and other information regarding issuers that file with the SEC. The website address is http://www.sec.gov. You may also request acopy of these filings, at no cost, by writing us at LAB 32, SOHO 3Q, No 9, Guanghua Road, Chaoyang District, Beijing, People’s Republic of China, 100020 ortelephoning us at (86) 1085866721.67I. SUBSIDIARY INFORMATIONFor a listing of our subsidiaries, see “Item 4. Information on the Company – C. Organizational Structure.”ITEM 11. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.Interest Rate RiskAs of December 31, 2017, we had no shortterm or longterm borrowings. If we borrow money in future periods, we may be exposed to interest rate risk. Ourexposure to market risk for changes in interest rates relates primarily to the interest income generated by our cash deposits with our banks and heldtomaturityinvestments. We have not used any derivative financial instruments in our investment portfolio. Interest earnings instruments carry a degree of interest rate risk. Wehave not been exposed, nor do we anticipate being exposed to material risks due to changes in interest rates. However, our future interest income may fall short ofexpectations due to changes in interest rates. Foreign Exchange RiskTranslation adjustments amounted to $90,671 and $387,375 gain as of the fiscal year ended December 31, 2017 and 2016, respectively. The Companytranslated balance sheet amounts with the exception of equity at December 31, 2017 at RMB 6.5342 to $1.00 as compared to RMB 6.9370 to $1.00 at December 31,2016. The Company stated equity accounts at their historical rate. The average translation rates applied to income statement accounts for the fiscal year endedDecember 31, 2017 and 2016 were RMB6.7356 and RMB 6.7153 to US$1.00, respectively. So far, the PRC government has been able to manage a stable exchange ratebetween RMB and the U.S. Dollar. Our future downward translation adjustments may occur and can be significant due to changes in such exchange rate.If we decide to convert our RMB into U.S. dollars for the purpose of making payments for dividends on our ordinary shares or for other business purposes,appreciation of the U.S. dollar against the RMB would have a negative effect on the U.S. dollar amount available to us.The PRC government imposes strict restrictions on PRC resident companies regarding converting RMB into foreign currencies and vice versa under capitalaccount transactions, such as receiving equity investments from outside of the PRC, making equity investments outside of the PRC, borrowing money from orlending money outside of the PRC, and repaying debt or remitting liquidated assets and/or accumulated profits outside of the PRC. These transactions have to beapproved by the relevant PRC government authorities, including but not limited to the commerce bureau, the tax bureau and the State Administration of ForeignExchange, or SAFE, and have to be conducted at banks entrusted by the local SAFE branch. As our business continues to grow, we may need to continuouslyfinance our PRC subsidiaries by raising capital from outside of the PRC. The restriction on converting RMB into foreign currencies, and vice versa, may limit ourability to use capital resources from outside of the PRC. Such restrictions may also limit our ability to remit profits from our PRC subsidiaries outside of the PRC,therefore potentially limiting our ability to pay dividends to our shareholders. In addition, such restrictions will limit our ability to freely transfer temporary excesscash in our or our subsidiaries’ bank accounts in and out of the PRC, therefore limiting our ability to conduct crossborder cash management activities to optimizethe utilization of our cash.InflationAlthough China has experienced an increasing inflation rate, inflation has not had a material impact on our results of operations in recent years. Accordingto the National Bureau of Statistics of China, the change in the consumer price index in China was 0.46%, (0.77%), and 1.16% in 2001, 2002 and 2003, respectively.However, in connection with a 3.9% increase in 2004, the PRC government announced measures to restrict lending and investment in China in order to reduceinflationary pressures in China’s economy. Following the government’s actions, the consumer price index decreased to 1.8% in 2005 and to 1.5% in 2006. In 2007, theconsumer price index increased to 4.8%. In response, China’s central bank, the People’s Bank of China, announced that the bank reserve ratio would rise half apercentage point to 15.5% in an effort to reduce inflation pressures. China’s consumer price index growth rate reached 8.7% year over year in 2008. In 2009 and 2010,the change in the consumer price index in China was minus 0.7% and 3.3%.China consumer price index in November 2017 was 3.8% higher than that of the same period in 2016. China consumer price index in December 2016 was2.4% higher than that of the same period in 2015. China consumer price index in December 2015 was 4.8% higher than that of the same period in 2014. Chinaconsumer price index in December 2014 was 3.3% higher than that of the same period in 2013. The results of the PRC government’s actions to combat inflation aredifficult to predict. Adverse changes in the Chinese economy, if any, will likely impact the financial performance of a variety of industries in China that use, or wouldbe candidates to use, our software products and services.68ITEM 12. DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES.A. DEBT SECURITIES.Not applicable. B. WARRANTS AND RIGHTS.Not applicable.C. OTHER SECURITIES.Not applicable.D. AMERICAN DEPOSITARY SHARES.The Bank of New York Mellon, as depositary (the “Depositary”) for the Company’s ADR facility, notified the owners and holders of the Company’s ADSsthat the ADS facility will terminate effective at 5:00 p.m. (Eastern Time) on September 19, 2018. Under the terms of the Deposit Agreement among the Company, theDepositary and the owners and holders of ADSs of the Company (the “Deposit Agreement”), owners and holders of the Company’s ADSs have until at leastJanuary 21, 2019 to surrender their ADSs to the Depositary for delivery of the underlying ordinary shares of the Company. Subsequent to January 21, 2019, underthe terms of the Deposit Agreement, the Depositary may attempt to sell any ordinary shares remaining on deposit with the Depositary. If the Depositary sells suchunderlying ordinary shares or receives value for such shares, holders must surrender their ADSs to obtain payment of the sale proceeds, net of expenses andapplicable tax and charges. We completed the voluntary delisting of our ADSs from the NASDAQ Capital Market on September 19, 2018.You may hold ADSs either (A) directly (i) by having ADSs registered in your name in the Direct Registration System, or (ii) by having an Americandepositary receipt, also referred to as an ADR, which is a certificate evidencing a specific number of ADSs, registered in your name, or (B) indirectly by holding asecurity entitlement in ADSs through your broker or other financial institution. If you hold ADSs directly, you are a registered ADS holder, also referred to as anADS holder. This description assumes you are an ADS holder. If you hold the ADSs indirectly, you must rely on the procedures of your broker or other financialinstitution to assert the rights of ADS holders described in this section. You should consult with your broker or financial institution to find out what thoseprocedures are.The Direct Registration System, or DRS, is a system administered by The Depository Trust Company, also referred to as DTC, pursuant to which thedepositary may register the ownership of uncertificated ADSs, which ownership will be confirmed by periodic statements sent by the depositary to the registeredholders of uncertificated ADSs.69As an ADS holder, you will not be treated as one of our registered shareholders and you will not have direct shareholder rights. British Virgin Island’s lawgoverns our direct shareholders’ rights. The depositary will be the holder of the shares underlying your ADSs. As a registered holder of ADSs, you will have ADSholder rights. A Deposit Agreement among us, the depositary and you, as an ADS holder, and all other persons indirectly holding ADSs, sets out ADS holder rightsas well as the rights and obligations of the depositary. New York law governs the Deposit Agreement and the ADSs.The following is a summary of the material provisions of the Deposit Agreement. For more complete information, you should read the entire DepositAgreement and the form of ADS, which contains the terms of the ADSs. The Deposit Agreement is filed as an exhibit to our registration statement filed on Form F1.You may obtain the registration statement and the attached Deposit Agreement from the SEC’s website at http://www.sec.gov. You may also obtain a copy of theDeposit Agreement at the SEC’s Public Reference Room, which is located at 100 F Street, NE, Washington, DC 20549. You may obtain information on the operationof the Public Reference Room by calling the SEC at 18007320330. Fees and ExpensesPersons depositing or withdrawing shares or ADS holders must pay:For:$5.00 (or less) per 100 ADSs (or portion of 100 ADSs)Issuance of ADSs, including issuances resulting from a distribution of shares orrights or other propertyCancellation of ADSs for the purpose of withdrawal, including if the DepositAgreement terminates$.05 (or less) per ADSAny cash distribution to ADS holdersA fee equivalent to the fee that would be payable if securities distributed to youhad been shares and the shares had been deposited for issuance of ADSsDistribution of securities distributed to holders of deposited securities whichare distributed by the depositary to ADS holders$.05 (or less) per ADSs per calendar yearDepositary servicesRegistration or transfer feesTransfer and registration of shares on our share register to or from the name ofthe depositary or its agent when you deposit or withdraw sharesExpenses of the depositaryCable, telex and facsimile transmissions (when expressly provided in the DepositAgreement) converting foreign currency to U.S. dollarsTaxes and other governmental charges the depositary or the custodian have topay on any ADS or share underlying an ADS, for example, share transfer taxes,stamp duty or withholding taxesAs necessaryAny charges incurred by the depositary or its agents for servicing the depositedsecuritiesAs necessaryPayment of TaxesHolders of our ADSs are responsible for any taxes or other governmental charges payable on their ADSs or on the deposited securities represented by anyof their ADSs. The depositary may refuse to register any transfer of a holder’s ADSs or allow withdrawal of the deposited securities represented by the ADSs untilsuch taxes or other charges are paid. It may apply payments owed to the holder or sell deposited securities represented by the ADSs to pay any taxes owed and theholder will remain liable for any deficiency. If the depositary sells deposited securities, it will, if appropriate, reduce the number of ADSs to reflect the sale and pay toADS holders any proceeds, or send to ADS holders any property, remaining after it has paid the taxes.70PART IIITEM 13. DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES.None.ITEM 14. MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS.Use of Proceeds.We completed our initial public offering on May 14, 2010 (the “IPO”), which generated net proceeds of approximately $14.6 million. All remaining cash onhand from the proceeds of our IPO was transferred to C Media Limited and its subsidiaries following the completion of the asset exchange transactions on August17, 2018.ITEM 15. CONTROLS AND PROCEDURES.Disclosure Controls and ProceduresOur Chief Executive Officer and Chief Financial Officer have reviewed and evaluated the effectiveness of our disclosure controls and procedures, whichincluded inquiries made to certain other of our employees. The term “disclosure controls and procedures,” as defined in Rules 13a15(e) and 15d15(e) under theExchange Act, means controls and other procedures of a company that are designed to ensure that information required to be disclosed by a company in thereports, such as this report, that it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in theSEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to bedisclosed by a company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the company’s management, including itsprincipal executive and principal financial officers, as appropriate to allow timely decisions regarding required disclosure. Management recognizes that any controlsand procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives and management necessarilyapplies its judgment in evaluating the costbenefit relationship of possible controls and procedures. Based on that evaluation, our Chief Executive Officer and ChiefFinancial Officer have each concluded that, as of December 31, 2017, the Company’s disclosure controls and procedures were not effective due to the materialweakness described in the “Management’s Report on Internal Control over Financial Reporting” section below.Management’s Report on Internal Control Over Financial ReportingOur management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Exchange ActRules 13a15(f) and 15d15(f). Internal control over financial reporting refers to the process designed by, or under the supervision of, our principal executive officerand principal financial officer, and effected by our Board of Directors, management and other personnel, to provide reasonable assurance regarding the reliability offinancial reporting and the preparation of financial statements for external purposes in accordance with U.S. GAAP and includes those policies and procedures that(i) pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of the assets of the Company; (ii)provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with U.S. GAAP, and thatreceipts and expenditures of the Company are being made only in accordance with authorizations of management and directors of the Company; and (iii) providereasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the Company’s assets that could have a materialeffect on the financial statements.71Any system of internal control, no matter how well designed, has inherent limitations. Therefore, even those systems determined to be effective canprovide only reasonable assurance with respect to financial statement preparation and presentation. Because of the inherent limitations of internal control, there is arisk that material misstatements may not be prevented or detected on a timely basis by internal control over financial reporting. However, these inherent limitationsare known features of the financial reporting process. Therefore, it is possible to design into the process safeguards to reduce, though not eliminate, this risk.Management assessed our internal control over financial reporting as of the year ended December 31, 2017. In making this assessment, management usedthe criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in the 2014 report entitled "Internal ControlIntegratedFramework." The COSO framework summarizes each of the components of a company’s internal control system, including (i) the control environment, (ii) riskassessment, (iii) control activities, (iv) information and communication, and (v) monitoring. Based on such assessment, management concluded that its internalcontrol over financial reporting as of December 31, 2017 was not effective because of the following material weakness:Lack of U.S. GAAP expertise. Although our accounting personnel are professional and experienced in accounting requirements and procedures generallyaccepted in the PRC, they do not have sufficient knowledge, experience and training in maintaining our books and records and preparing financial statements inaccordance with U.S. GAAP standards and SEC rules and regulations. The staff needs additional training to become experienced in U.S. GAAPbased reporting,including the skills of U.S. GAAPbased period end closing, consolidation of financial statements, and U.S. GAAP conversion.In order to address the above material weakness, our management plans to take the following steps:We will employ, as needed, outside professionals to provide key accounting personnel ongoing technical trainings to ensure their proper understanding ofU.S. GAAP and newly announced accounting standards.The Company believes the foregoing measures will remediate the identified material weakness in future periods. The Company is committed to monitoringthe effectiveness of these measures and making any changes that are necessary and appropriate.Notwithstanding the conclusion that its internal control over financial reporting was not effective as of the end of the period covered by this report, ourChief Executive Officer and Chief Financial Officer believe that the financial statements and other information contained in this report present fairly, in all materialrespects, its business, financial condition and results of operations. Nothing has come to the attention of management that causes them to believe that any materialinaccuracies or errors exist in the Company’s financial statements as of December 31, 2017.Attestation report of the registered public accounting firm.This transition report does not include an attestation report of the Company’s registered public accounting firm on internal control over financial reportingbecause the Company is a nonaccelerated filer permanently exempted from section 404(b) of the SarbanesOxley Act.Changes in Internal Control over Financial ReportingThere were no changes in the Company’s internal control over financial reporting that occurred during our fiscal year ended December 31, 2017 that hasmaterially affected or is reasonably likely to materially affect our internal control over financial reporting.ITEM 16. [RESERVED]ITEM 16A. AUDIT COMMITTEE FINANCIAL EXPERT.Our board of directors has determined that Mr. Dennis Galgano qualifies as an audit committee financial expert. Our board of directors has determined thatMessrs. Dennis Galgano, Jin Shi, Jiming Ha and Zhihao Xu meet the definition of an “independent director” under the applicable NASDAQ Rules and under Rule10A3 of the Securities Exchange Act of 1934, as amended.72ITEM 16B. CODE OF ETHICS.Our board of directors has adopted a code of business conduct and ethics applicable to our directors, officers and employees. We have posted the code onour website at http://www.luokung.com.ITEM 16C. PRINCIPAL ACCOUNTANT FEES AND SERVICES.Audit FeesThe aggregate fees billed by Moore Stephens CPA Limited for professional services rendered for the audit of our financial information disclosed in thistransition report on Form 20F was $280,000 for the two years ended December 31, 2017 and 2016.The aggregate fees billed by our previous auditor, BDO China Shu Lun Pan Certified Public Accountants LLP for professional services rendered for theaudit of our annual financial information included in our annual reports on Form 20F was $105,500 for each of the fiscal years ended September 30, 2017, 2016 and2015.Tax FeesWe did not engage our principal accountants to provide tax or related services during the last two fiscal years.All Other FeesWe did not engage our principal accountants to render services to us during the last two fiscal years, other than as reported above.ITEM 16D. EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES.Not applicable.ITEM 16E. PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS.Not applicable.ITEM 16F. CHANGE IN REGISTRANT’S CERTIFYING ACCOUNTANT.Not applicable.ITEM 16G. CORPORATE GOVERNANCE.We are incorporated in the BVI and our corporate governance practices are governed by applicable BVI law as well as our memorandum and articles ofassociation. In addition, because our ADSs are listed on NASDAQ, we are subject to NASDAQ’s corporate governance requirements. NASDAQ Listing Rule5620(a) requires each issuer to hold an annual meeting of shareholders no later than one year after the end of the issuer’s fiscal year end. However, NASDAQ ListingRule 5615(a)(3) permits a foreign private issuer like us to follow home country practices in lieu of certain requirements of Listing Rule 5600, provided that suchforeign private issuer discloses in its transition report filed with the SEC each requirement of Rule 5600 that it does not follow and describes the home countrypractice followed in lieu of such requirement. We follow home country practice with respect to annual meetings and did not hold an annual shareholder meeting inthe year ended December 31, 2017. We may, however, hold annual shareholder meetings in the future if there are significant issues that require shareholders’approvals.ITEM 16H. MINE SAFETY DISCLOSURE.Not applicable.73PART IIIITEM 17. FINANCIAL STATEMENTS.We have elected to provide financial statements and related information specified in Item 18.ITEM 18. FINANCIAL STATEMENTS.See “Index to Consolidated Financial Statements” for a list of all financial statements filed as part of this transition report. The Financial Statements arebeginning on page F1.ITEM 19. EXHIBITS.See the Exhibit Index following the signature page of this report, which is incorporated herein by reference.74SIGNATURESThe registrant hereby certifies that it meets all of the requirements for filing on Form 20F and that it has duly caused and authorized the undersigned tosign this transition report on its behalf.LUOKUNG TECHNOLOGY CORP.By:/s/ Xuesong Song Xuesong SongChief Executive Officer(principal executive officer)October 12, 201875EXHIBIT INDEXThe following documents are filed as part of this transition report on Form 20F.ExhibitNumberDescription1.1Amended and Restated Memorandum of Association and Articles of Association of Luokung Technology Corp., dated August 20, 2018, and ascurrently in effect.2.1*Deposit Agreement among the Company, depositary and holders of the American Depositary Receipts.2.2*Form of American Depositary Receipt.2.3*English translation of Entrusted Management Agreement dated December 15, 2009 between Xi’an Softech Co., Ltd., Xi’an Kingtone InformationTechnology Co., Ltd. and the shareholders of Xi’an Kingtone Information Technology Co., Ltd.3.1*English translation of Shareholder’s Voting Proxy Agreement dated December 15, 2009 between Xi’an Softech Co., Ltd., Xi’an Kingtone InformationTechnology Co., Ltd. and the shareholders of Xi’an Kingtone Information Technology Co., Ltd.4.1*English translation of Exclusive Technology Service Agreement dated December 15, 2009 between Xi’an Softech Co., Ltd. and Xi’an KingtoneInformation Technology Co., Ltd.4.2*English translation of Exclusive Option Agreement dated December 15, 2009 between Xi’an Softech Co., Ltd., Xi’an Kingtone InformationTechnology Co., Ltd. and the shareholders of Xi’an Kingtone Information Technology Co., Ltd.4.3*English translation of Equity Pledge Agreement dated December 15, 2009 between Xi’an Softech Co., Ltd., Xi’an Kingtone Information TechnologyCo., Ltd. and the shareholders of Xi’an Kingtone Information Technology Co., Ltd.4.4*English translation of Loan Agreement dated September 14, 2009 between Xi’an Kingtone Information Technology Co., Ltd. and Xian CityCommercial Bank.4.5*English translation of Mortgage Agreement dated September 14, 2009 between Xi’an Kingtone Information Technology Co., Ltd. and Xian CityCommercial Bank.4.6*English translation of Form of Employment Agreement entered into between the Company and the Company’s executive officers.4.7*2010 Omnibus Incentive Plan of the Company.4.8**English translation of Project Construction Contract dated August 10, 2010 between Xi’an Hu County Yuxing Agriculture Science & TechnologyCo., Ltd. and Xi’an Kingtone Information Technology Co., Ltd.4.9***Asset Exchange Agreement by and between C Media Limited and the Company dated as of January 25, 2018.4.10***Securities Purchase Agreement by and among Redstone YYL Management Limited and five shareholders holding majority of the shares of theCompany dated as of January 25, 2018.4.15Exclusive Business Cooperation Agreement by and between Zhongchuan Tianxia Information Technology (Shenzhen) Co., Ltd., and Beijing MobileVision Technology Co., Ltd., dated August 31, 2015.764.16Exclusive Option Agreement by and among Zhongchuan Tianxia Information Technology (Shenzhen) Co., Ltd., Xuesong Song, Weili Chen, PingWang, Donglai Liu, and Beijing Mobile Vision Technology Co., Ltd., dated August 31, 2015.4.17Equity Interest Pledge Agreement by and among Zhongchuan Tianxia Information Technology (Shenzhen) Co., Ltd., Xuesong Song, Weili Chen, PingWang, Donglai Liu, and Beijing Mobile Vision Technology Co., Ltd., dated August 31, 2015.4.18Addendum to Asset Exchange Agreement by and among the Company, Topsky Infotech Holdings Pte Ltd. and C Media Limited, dated October 3,2018. Incorporated by reference to the Company’s Current Report on Form 6K filed on October 4, 2018.4.19Stock Purchase Agreement, dated August 25, 2018, by and among the Company, LK Technology Ltd., and the shareholders listedtherein. Incorporated by reference to the Company’s Current Report on Form 6K filed on August 27, 2018.4.20Power of Attorney by Weili Chen, dated August 31, 2015.4.21Power of Attorney by Ping Wang, dated August 31, 2015.4.22Power of Attorney by Donglai Liu, dated August 31, 2015.4.23Power of Attorney by Xuesong Song, dated August 31, 2015.8.1List of Subsidiaries and Consolidated Variable Interest Entities10.1Employment Agreement, dated August 19, 2018, between Luokung Technology Corp. and Xuesong Song.†10.2Employment Agreement, dated August 19, 2018, by and between Luokung Technology Corp. and Jie Yu.†12.1Certification of Chief Executive Officer required by Rule 13a14(a).12.2Certification of Chief Financial Officer required by Rule 13a14(a).13.1Certification of Chief Executive Officer required by Rule 13a14(a).13.2Certification of Chief Financial Officer required by Rule 13a14(a).101.INSXBRL Instance Document.101.SCHXBRL Taxonomy Extension Schema Document.101.CALXBRL Taxonomy Extension Calculation Linkbase Document.101.DEFXBRL Taxonomy Extension Definition Linkbase Document.101.LABXBRL Taxonomy Extension Label Linkbase Document.101.PREXBRL Taxonomy Extension Presentation Linkbase Document.*Previously filed as an exhibit to the Company’s Registration Statement on Form F1 (Reg. No. 333166056) filed with the Commission and incorporated hereinby reference.**Previously filed as exhibits to the Company’s Transition Report on Form 20F filed with the Commission on January 20, 2011 and incorporated herein byreference.***Previously filed as exhibits to the Company’s Annual Report on Form 20F filed with the Commission on February 9, 2018 and incorporated herein byreference.†Indicates management contract or compensatory plan, contract or arrangement.77LK Technology Ltd. and SubsidiariesCONSOLIDATED FINANCIAL STATEMENTSTABLE OF CONTENTSPage(s)Report of Independent Registered Public Accounting FirmF2Consolidated Financial StatementsConsolidated Balance SheetsF3Consolidated Statements of Operations and Comprehensive LossF4application.Chuang (Vincent) Tao was appointed as a member of the Board effective on August 25, 2018. Dr. Tao was the Chairman of SuperEngine Suzhou from 2014to 2017. Dr. Tao has been the president of the Seasky Angel Investment Alliance of Shanghai since 2015. Dr. Tao received his Bachelor Degree of geographicinformation and telemetry from Wuhan University in China in 1990 and received his Ph.D. from University of Calgary, Canada in 1997.Dennis Galgano was appointed as a director of the Company following the consummation of the asset exchange agreement. He was a registered consultantwith Morgan Joseph Triartisan LLC from November 2016 until October 2017, and previously served as vice chairman and head of international investment bankingfor Morgan Joseph Triartisan LLC, which is a registered broker dealer engaged in the investment banking and financial advisory industry. Mr. Galgano received aB.S. degree in Chemistry from St. John’s University and an M.B.A. from The Wharton School in 1972.Jin Shi was appointed as a director of the Company following the consummation of the asset exchange transactions. Mr. Shi has served as the managingpartner of Chum Capital Group, a merchant bank focused on helping Chinese growth companies to access global capital, since January 2013. Mr. Shi has also servedas a director of Seven Stars Cloud Group, Inc. (NASDAQ: SSC), a premium video on demand service provider, since January 2014, and joined the audit committee ofits board of directors in March 2016. He also served as a director and member of the audit committee of Pingtan Marine Enterprise, Ltd. (NASDAQ: PME), a marineenterprise group primarily engaged in ocean fishing through its subsidiaries. Mr. Shi received an EMBA degree from the Guanghua Management School of BeijingUniversity, and a Bachelor’s degree of science in Chemical Engineering from Tianjin University.Jiming Ha was appointed as a director of the Company following the consummation of the asset exchange agreement, and has also served as a seniorresearch fellow for the China Finance 40 Forum since March 1, 2018, and previously served as a managing director of Goldman Sachs from January 2017 to April2017. Mr. Ha served as a vice chairman and chief investment strategist of the Investment Strategy Group for Private Wealth Management at Goldman Sachs from2010 to January 2017. Mr. Ha holds a PhD in Economics from the University of Kansas and Master’s and Bachelor’s degrees of science from Fudan University.Zhihao Xu was appointed as a director of the Company following the consummation of the asset exchange transactions. Mr. Xu has served as the chiefexecutive officer of Geely Group Co., Ltd., in Hangzhou, China, since December 2017, and previously served as the chairman and chief executive officer of BeijingDingchengrenhe Investment Co., Ltd., a funds management company, from January 2017 to December 2017. Mr. Xu served as the chairman of president of HNAUSOLV CO., LTD., and the chief innovation officer of HNA Logistics Group from January 2014 to December 2016, and prior to that as the chairman of GopayInnovation Technology Co. Ltd., an online payment system operator supporting online money transfers, from April 2012 to January 2014. Mr. Xu graduated from theBusiness School of Renmin University of China and from the Wudaokou Finance College of Tsinghua University with a fund qualification certificate and securitiesqualification certificate.B. COMPENSATION.Compensation of Directors and Executive OfficersFor the ninemonth transition period ended September 30, 2018 and the fiscal year ended December 31, 2017, we did not pay any cash compensation to ourexecutive officers of LK Technology Ltd. and a to our directors for serving on our board of directors of LK Technology Ltd.37Other than nonemployee directors, we do not intend to compensate directors for serving on our board of directors or any of its committees. We do,however, intend to reimburse each member of our board of directors for outofpocket expenses incurred by each director in connection with attending meetings ofthe board of directors and its committees.AdministrationThe Incentive Plan is administered by our board of directors, or at the discretion of the board, by our compensation committee. Our board of directors hasdelegated authority to our compensation committee to administer the Incentive Plan. Subject to the terms of the Incentive Plan, the compensation committee mayselect participants to receive awards, determine the types of awards and terms and conditions of awards, and interpret provisions of the Incentive Plan.The ordinary shares issued or to be issued under the Incentive Plan consist of authorized but unissued shares. If any ordinary shares covered by an awardare not purchased or are forfeited, or if an award otherwise terminates without delivery of any ordinary shares, then the number of ordinary shares counted againstthe aggregate number of ordinary shares available under the plan with respect to the award will, to the extent of any such forfeiture or termination, again be availablefor making awards under the Incentive Plan.EligibilityAwards may be made under the Incentive Plan to our employees, officers, directors, consultants or advisers or to any of our affiliates, and to any otherindividual whose participation in the Incentive Plan is determined to be in our best interests by our board of directors.Amendment or Termination of the PlanOur board of directors may terminate or amend the Incentive Plan at any time and for any reason. No amendment, however, may adversely impair the rightsof grantees with respect to outstanding awards. The Incentive Plan has a term of ten years. Amendments will be submitted for shareholder approval to the extentrequired by applicable stock exchange listing requirements or other applicable laws.OptionsThe Incentive Plan permits the granting of options to purchase ordinary shares intended to qualify as incentive share options under the Internal RevenueCode and share options that do not qualify as incentive share options, or nonqualified share options.The exercise price of each share option may not be less than 100% of the fair market value of our ADSs representing ordinary shares on the date of grant.In the case of certain 10% shareholders who receive incentive share options, the exercise price may not be less than 110% of the fair market value of our ADSsrepresenting ordinary shares on the date of grant. An exception to these requirements is made for options that we grant in substitution for options held byemployees of companies that we acquire. In such a case the exercise price is adjusted to preserve the economic value of the employee’s share option from his or herformer employer.The term of each share option is fixed by the compensation committee and may not exceed ten years from the date of grant. The compensation committeedetermines at what time or times each option may be exercised and the period of time, if any, after retirement, death, disability or termination of employment duringwhich options may be exercised.Options may be made exercisable in installments. The award agreement provides the vesting of the options. Exercisability of options may be accelerated bythe compensation committee.38In general, an optionee may pay the exercise price of an option by (1) cash or check (in U.S. dollars or Renminbi or other local currency as approved by thecompensation committee), (2) ordinary shares held for such period of time as may be required by the compensation committee, (3) delivery of a notice of a marketorder with a broker with respect to ordinary shares then issuable upon exercise of an option, and that the broker has been directed to pay us a sufficient portion ofnet proceeds of the sale in satisfaction of the exercise price, provided that payment of such proceeds is then made to us upon settlement of such sale, (4) otherproperty acceptable to the compensation committee with a fair market value equal to the exercise price, (5) cashless exercise or (6) any combination of the foregoing.Share options granted under the Incentive Plan may not be sold, transferred, pledged, or assigned other than by will or under applicable laws of descentand distribution. However, we may permit limited transfers of nonqualified options for the benefit of immediate family members of grantees to help with estateplanning concerns or pursuant to a domestic relations order in settlement of marital property rights.Other AwardsThe compensation committee may also award under the Incentive Plan:1.ordinary shares subject to restrictions;2.deferred ordinary shares, credited as deferred ordinary share units, but ultimately payable in the form of unrestricted ordinary shares inaccordance with the terms of the grant or with the participant’s deferral election;3.ordinary share units subject to restrictions;4.unrestricted ordinary shares, which are ordinary shares issued at no cost or for a purchase price determined by the compensation committee whichare free from any restrictions under the 2011 Omnibus Incentive Plan;5.dividend equivalent rights entitling the grantee to receive credits for dividends that would be paid if the grantee had held a specified number ofordinary shares; or6.a right to receive a number of ordinary shares or, in the discretion of the compensation committee, an amount in cash or a combination of ordinaryshares and cash, based on the increase in the fair market value of the ADSs representing ordinary shares underlying the right during a statedperiod specified by the compensation committee.Effect of Certain Corporate TransactionsCertain change of control transactions involving us may cause awards granted under the Incentive Plan to vest, unless the awards are continued orsubstituted for by the surviving company in connection with the corporate transaction.Unless otherwise provided in the appropriate option agreement on the date of grant or provided by our board of directors thereafter with the consent of thegrantee, options granted under the Incentive Plan become exercisable in full following (1) a dissolution of our company or a merger, consolidation or reorganizationof our company with one or more other entities in which we are not the surviving entity, (2) a sale of substantially all of our assets to another person or entity, or (3)any transaction (including without limitation a merger or reorganization in which we are the surviving entity) which results in any person or entity owning 50% ormore of the combined voting power of all classes of our shares.39Adjustments for Dividends and Similar EventsThe compensation committee will make appropriate adjustments in outstanding awards and the number of ordinary shares available for issuance under theIncentive Plan, including the individual limitations on awards, to reflect ordinary share dividends, stock splits and other similar events.C. BOARD PRACTICES.Board of DirectorsOur board of directors consists of six members being Messrs. Xuesong Song, Kegang Peng, Dennis Galgano, Jin Shi, Jiming Ha and Zhiaho Xu. Ourdirectors hold office until our annual meeting of shareholders, where their successors will be duly elected and qualified, or until the directors’ death, resignation orremoval, whichever is earlier. Our directors are not subject to a term of office and hold office until their resignation, death or incapacity or until their respectivesuccessors have been elected and qualified in accordance with our fourth amended and restated memorandum of association and articles of association. A directorwill be removed from office if, among other things, the director (1) becomes bankrupt, (2) dies or becomes of unsound mind, or (3) is absent from meetings of ourboard of directors for six consecutive months without leave and our board of directors resolves that the office is vacated. A director is not entitled to any specialbenefits upon termination of service with the company.Director IndependenceOur board of directors consists of six members; Messrs. Dennis Galgano, Jin Shi, Jiming Ha and Zhihao Xu have been determined by us to be independentdirectors within the meaning of the independent director guidelines of the NASDAQ Corporate Governance Rules (the “NASDAQ Rules”).Committees of Our Board of DirectorsTo enhance our corporate governance, we established three committees under our board of directors: an audit committee, a compensation committee, and anominating and corporate governance committee. We have adopted a charter for each of these committees. The committees have the following functions andmembers.Audit CommitteeOur audit committee reports to our board of directors regarding the appointment of our independent public accountants, the scope and results of ourannual audits, compliance with our accounting and financial policies and management’s procedures and policies relating to the adequacy of our internal accountingcontrols. Our audit committee consists of Messrs. Dennis Galgano, Jin Shi, and Jiming Ha. Mr. Galgano, having accounting and financial management expertise,serves as the chairman of the audit committee and is an “audit committee financial expert” as defined by the rules and regulations of the SEC. Our board of directorshas determined that each of these persons meet the definition of an “independent director” under the applicable NASDAQ Rules and under Rule 10A3 of theSecurities Exchange Act of 1934, as amended (the “Exchange Act”).Our audit committee is responsible for, among other things:●the appointment, evaluation, compensation, oversight and termination of the work of our independent auditor (including resolution of disagreementsbetween management and the independent auditor regarding financial reporting);●an annual performance evaluation of the audit committee;●establishing procedures for the receipt, retention and treatment of complaints regarding accounting, internal accounting controls, auditing matters orpotential violations of law, and the confidential, anonymous submission by our employees of concerns regarding questionable accounting or auditingmatters or potential violations of law;40●ensuring that it receives an transition report from our independent auditor describing our internal control procedures and any steps taken to deal withmaterial control deficiencies and attesting to the auditor’s independence and describing all relationships between the auditor and us;●reviewing our annual audited financial statements and quarterly financial statements with management and our independent auditor;●reviewing and approving all proposed related party transactions;●reviewing our policies with respect to risk assessment and risk management;●meeting separately and periodically with management and our independent auditor; and●reporting regularly to our board of directors.Compensation CommitteeOur compensation committee assists the board of directors in reviewing and approving the compensation structure of our directors and executive officers,including all forms of compensation to be provided to our directors and executive officers. In addition, the compensation committee reviews share compensationarrangements for all of our other employees. Members of the compensation committee are not prohibited from direct involvement in determining their owncompensation. Our chief executive officer is not permitted to be present at any committee meeting during which his or her compensation is deliberated. Ourcompensation committee consists of Dennis Galgano and Jin Shi, with Mr. Shi serving as the chairman of the compensation committee. Our board of directors hasdetermined that each of these persons meet the definition of “independent director” under the applicable requirements of the NASDAQ Rules.Our compensation committee is responsible for, among other things:●reviewing and approving corporate goals and objectives relevant to the compensation of our chief executive officer, evaluating the performance of ourchief executive officer in light of those goals and objectives and setting the compensation level of our chief executive officer based on this evaluation;●reviewing and making recommendations to the board with respect to the compensation of our executives, incentive compensation and equitybasedplans that are subject to board approval; and●providing annual performance evaluations of the compensation committee.Nominating and Corporate Governance CommitteeOur nominating and corporate governance committee assists the board of directors in identifying and selecting or recommending individuals qualified tobecome our directors, developing and recommending corporate governance principles and overseeing the evaluation of our board of directors and management. Ournominating and corporate governance committee consists of Jiming Ha and Zhihao Xue, with Mr. Ha serving as the chairman of the nominating and corporategovernance committee. Our board of directors has determined that each of these persons meet the definition of “independent director” under the applicablerequirements of the NASDAQ Rules.Our nominating and corporate governance committee is responsible for, among other things:●selecting and recommending to our board nominees for election or reelection to our board, or for appointment to fill any vacancy;●reviewing annually with our board the current composition of the board of directors with regards to characteristics such as independence, age, skills,experience and availability of service to us;●selecting and recommending to our board the names of directors to serve as members of the audit committee and the compensation committee, as wellas the nominating and corporate governance committee itself; advising our board of directors periodically with regards to significant developments inthe law and practice of corporate governance as well as our compliance with applicable laws and regulations, and making recommendations to ourboard of directors on all matters of corporate governance and on any remedial action to be taken; and●monitoring compliance with our code of business conduct and ethics, including reviewing the adequacy and effectiveness of our procedures to ensureproper compliance.41Code of Business Conduct and EthicsOur board of directors adopted a code of business conduct and ethics applicable to our directors, officers and employees.Duties of DirectorsUnder British Virgin Islands law, our directors have a duty to act honestly, in good faith and with a view to our best interests. Our directors also have a dutyto exercise care, diligence and skills that a reasonably prudent person would exercise in comparable circumstances. In fulfilling their duty of care to us, our directorsmust ensure compliance with our memorandum of association and articles of association. We have the right to seek damages if a duty owed by our directors isbreached.The functions and powers of our board of directors include, among others:●appointing officers and determining the term of office of the officers;●authorizing the payment of donations to religious, charitable, public or other bodies, clubs, funds or associations as deemed advisable;●exercising the borrowing powers of the company and mortgaging the property of the company;●executing cheques, promissory notes and other negotiable instruments on behalf of the company; and●maintaining or registering a register of mortgages, charges or other encumbrances of the company.Remuneration and BorrowingThe directors may receive such remuneration as our board of directors may determine from time to time. Each director is entitled to be repaid or prepaid alltraveling, hotel and incidental expenses reasonably incurred or expected to be incurred in attending meetings of our board of directors or committees of our board ofdirectors or shareholder meetings or otherwise in connection with the discharge of his or her duties as a director. The compensation committee will assist thedirectors in reviewing and approving the compensation structure for the directors.Our board of directors may exercise all the powers of the company to borrow money and to mortgage or charge our undertakings and property or any partthereof, to issue debentures, debenture stock and other securities whenever money is borrowed or as security for any debt, liability or obligation of the company orof any third party.QualificationA director is not required to hold shares as a qualification to office.42Limitation on Liability and Other Indemnification MattersBritish Virgin Islands law does not limit the extent to which a company’s memorandum of association and articles of association may provide forindemnification of officers and directors, except to the extent any such provision may be held by the British Virgin Islands courts to be contrary to public policy,such as to provide indemnification against civil fraud or the consequences of committing a crime.Under our memorandum of association and articles of association, we may indemnify our directors, officers and liquidators against all expenses, includinglegal fees, and against all judgments, fines and amounts paid in settlement and reasonably incurred in connection with civil, criminal, administrative or investigativeproceedings to which they are party or are threatened to be made a party by reason of their acting as our director, officer or liquidator. To be entitled toindemnification, these persons must have acted honestly and in good faith with a view to the best interest of the company and, in the case of criminal proceedings,they must have had no reasonable cause to believe their conduct was unlawful.Compensation Committee Interlocks and Insider ParticipationNone of the members of our compensation committee is an officer or employee of our company. None of our executive officers currently serves, or in thepast year has served, as a member of the board of directors or compensation committee of any entity that has one or more executive officers serving on our board ofdirectors or compensation committee.Employment AgreementsOn August 19, 2018, the Company entered into an Employment Agreement (the “Song Agreement”) with Mr. Xuesong Song, to serve as the ChiefExecutive Officer of the Company for a fouryear term, subject to renewal. Under the terms of the Song Agreement, Mr. Song will receive no salary for his servicesbut will be eligible for an annual cash bonus in the Board’s sole discretion.On August 19, 2018, the Company entered into an Employment Agreement (the “Yu Agreement”) with Mr. Jie Yu, to serve as the Chief Financial Officer ofthe Company for a fouryear term, subject to renewal. Under the terms of the Yu Agreement, Mr. Yu will receive an annual salary of RMB700,000, and will be eligiblefor an annual cash bonus in the Board’s sole discretion.D. EMPLOYEES.As of September 30, 2018 and December 31, 2017, we had a total of 107 and 37 fulltime employees, including 48 and 13 in research and development, 9 and 2in sales and marketing and the rest in a variety of other divisions, respectively. All of our employees are fulltime employees. None of our employees is currentlyrepresented by a union and/or collective bargaining agreements. We believe that we have good relations with our employees and since our inception we have hadno history of work stoppages or union organizing campaigns.E. SHARE OWNERSHIP.The following table provides information as to the beneficial ownership of our ordinary shares as of October 10, 2018, by the persons listed. Beneficialownership of shares is determined under the rules of the SEC and generally includes any shares over which a person exercises sole or shared voting or investmentpower. For purposes of the following table, a person is deemed to have beneficial ownership of any ordinary shares if such person has the right to acquire suchshares within 60 days of October 10, 2018. For purposes of computing the percentage of outstanding shares held by each person, any shares that such person hasthe right to acquire within 60 days after of October 10, 2018 are deemed to be outstanding, but are not deemed to be outstanding for the purpose of computing thepercentage ownership of any other person. Except as otherwise noted, the persons named in the table have sole voting and investment power with respect to all ofthe ordinary shares beneficially owned by them. Unless otherwise indicated, the address of each person listed is c/o Luokung Technologies, LAB 32, SOHO 3Q, No9, Guanghua Road, Chaoyang District, Beijing, People’s Republic of China.43Percentage ownership in the following table is based on 199,317,558 ordinary shares outstanding on October 10, 2018.Number ofsharesPercent ofclassDirectors and named executive officersCharm Dragon International Limited (1)4,030,8822.03%Xuesong Song, Chairman, Chief Executive Officer and Director(2)38,156,43019.30%Kegang Peng, Vice President and Director (3)17,231,9558.71%Dennis Galgano, Director75,796*%Jin Shi, DirectorJiming Ha, DirectorZhihao Xu, Director (4)7,579,1843.83%Dongpu Zhang, President (5)2,321,7921.17%Chuang Tao, Director (6)1,221,996*%Directors and executive officers as a group (10 persons)66,587,15233.69%(1)Charm Dragon International Limited is a British Virgin Islands company controlled by Mr. Xuesong Song.(2)Consists of (i) 4,030,882 shares owned directly by Charm Dragon International Limited, a British Virgin Islands company and (ii) 22,624,793 shares owneddirectly by Bravo First Development Limited, a British Virgin Islands company. Mr. Xuesong Song is the controlling shareholder of Bravo First DevelopmentLimited. Mr. Xuesong Song is the sole director of Charm Dragon International Limited.(3)Consists of 17,231,955 shares owned directly by Plenty Prestige Enterprises Limited, a British Virgin Islands company. Mr. Kegang Peng is the sole director ofPlenty Prestige Enterprises Limited.(4)Consists of 7,579,184 shares directly owned by Geely Group Limited., a Chinese company. Mr. Zhihao Xu is the Chief Executive Officer of Geely GroupLimited.(5)Consists of 2,321,792 shares owned directly by Genoa Peak Limited, a British Virgin Islands company. Mr. Dongpu Zhang controls Genoa Peak Limited.(6)Consists of 1,221,996 shares owned directly by Globalearth Holdings Limited, a British Virgin Islands company. Mr. Chuang Tao controls Globalearth HoldingsLimited.*Represents less than 1% of shares outstandingITEM 7. MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS.A. MAJOR SHAREHOLDERSPlease refer to Item 6.E “Directors, Senior Management and Employees — Share Ownership.”To our knowledge, (A) we are not directly or indirectly owned or controlled by (i) another corporation or (ii) any foreign government and (B) there are noarrangements (including any announced or expected takeover bid), the operation of which may at a subsequent date result in a change in our control.The voting rights of our major shareholders do not differ from the voting rights of other holders of the same class of shares.44B. RELATED PARTY TRANSACTIONS. BUSINESS RELATIONSHIPS.Our subsidiaries, consolidated affiliated entities, and the subsidiaries of the consolidated affiliated entities have engaged, during the ordinary course ofbusiness, in a number of customary transactions with each other. All of these intercompany balances have been eliminated in consolidation.As of December 31, 2017, we had amounts due from related parties, C Media Limited and Ya Tuo Ji International Consultancy (Beijing) Limited, in theamounts of $11.8 million and $0.2 million, respectively. These amounts due from related parties are short term in nature, noninterest bearing, unsecured andrepayable on demand.As of December 31, 2017, we had amounts due to related parties, Mr. Xuesong Song, our chairman and chief executive officer, Thumb Beijing Branch andThumb Shenzhen Branch, in the amounts of $2.9 million, $0.6 million and $0.03 million, respectively. These amounts due to related parties are short term in nature,noninterest bearing, unsecured and payable on demand.We are party to a series of control agreements with Beijing Zhong Chuan Shi Xun. In addition, our chief executive officer, Mr. Xuesong Song, serves as andofficer of Beijing Zhong Chuan Shi Xun and is a shareholder of Beijing Zhong Chuan Shi Xun. The following table sets forth the relationship of Mr. Song withBeijing Zhong Chuan Shi Xun:NameRelationship withLuokung TechnologyRelationship withBeijing Zhong Chuan Shi XunPercentageOwnership Interest inBeijing Zhong Chuan Shi XunXuesong SongChief Executive OfficerChief Executive Officer61.83%C. INTERESTS OF EXPERTS AND COUNSEL.None.ITEM 8. FINANCIAL INFORMATION.A. CONSOLIDATED STATEMENTS AND OTHER FINANCIAL INFORMATION.See “Item 18. Financial Statements.”Legal ProceedingsTo our knowledge, other than as described below there are no material legal proceedings threatened against us. From time to time, we may be subject tovarious claims and legal actions arising in the ordinary course of business. Following the consummation of the AEA, we became successor in interest to the legalproceedings described below.Litigation with Shanghai Fusheng Weier Intelligent Control Technology Co., Ltd.On January 22, 2016, Zhong Chuan Rui You and Shanghai Fusheng Weier Intelligent Control Technology Co., Ltd. (“Fusheng Weier”) signed a contract forequipment of $1,652,842 (RMB10,800,000). Since Zhong Chuan Rui You did not make the payments of $1,126,381 (RMB7,360,000) on the due dates, Fusheng Weierfiled a lawsuit against Zhong Chuan Rui You in Shanghai Xuhui District People's Court on October 8, 2016. On March 9, 2017, Xuhui District People's Court issuedthe verdict requiring Zhong Chuan Rui You to pay the overdue debts. In August 2017, C Media Limited made the payment of $512,075 (RMB3,346,000). Theremaining balance has been accrued in accounts payable. The payment schedule for the remaining balance is being negotiated by the two parties. On February 5,2018, a hearing was held adding Zhong Chuan Shi Xun as a defendant. The Group plans to settle the remaining balance within one year.45Lawsuit with Gansu Jinlun Culture Media Co., Ltd.On August 22, 2014, Zhong Chuan Rui You and Gansu Jinlun Culture Media Co., Ltd. (“Gansu Jinlun”) signed a “Lanzhou Railway Bureau AirconditionedTrain WiFi Network System Advertising Operation Rights Agreement” for advertising on 72 trains of $1,467,880 (RMB9,604,633). Due to the dispute on theproject implementation, Zhong Chuan Rui You did not pay the advertising fee. On August 23, 2017, Gansu Jinlun filed a lawsuit with Gansu Intermediate People'sCourt. On December 19, 2017, Gansu Intermediate People's Court issued a verdict, ruling that Zhong Chuan Rui You settle the overdue advertising fee. Since only 18out of 72 trains have been installed with Wifi network system, Zhong Chuan Rui You disputed and appealed to the verdict. The next court trial date has not yet beendetermined. C Media and Gansu Jinlun are negotiating a potential settlement to resume the contract. According to the legal counsel, it is probable that the settlementwill amount to approximately $459,000 (RMB3,000,000); therefore, this amount has been accrued in accounts payable as at December 31, 2017.Litigation with Shenzhen Hua Xun Fang Zhou Technology Co., Ltd.On June 16, 2015, Zhong Chuan Rui You signed a cooperation agreement with Shenzhen Hua Xun Fang Zhou Technology Co., Ltd. (“Shenzhen Hua Xun”)and Xuesong Song, a major shareholder of C Media Limited. Pursuant to this agreement, Zhong Chuan Rui You procures equipment from Shenzhen Hua Xun.Xuesong Song acts as a joint liability guarantor for the entire debts of Zhong Chuan Rui You under this agreement. As Zhong Chuan Rui You did not make thepayments on the due dates, Shenzhen Hua Xun filed a lawsuit with Shenzhen Baoan District People's Court on May 31, 2016. On November 1, 2016, Zhong ChuanRui You, Xuesong Song and Shenzhen Hua Xun reached a settlement in Shenzhen Baoan District People's Court to settle $1,735,389 (RMB11,355,000) in fourinstalments. On December 30, 2017, the debt was assigned to C Media Limited.Dividend PolicyWe currently intend to retain all of our available funds and future earnings for use in the operation and expansion of our business and do not anticipatepaying cash dividends in the foreseeable future. Under the terms of our Amended and Restated Memorandum and Articles of Association the declaration andpayment of any dividends in the future will be determined by our board of directors, in its discretion, and will depend on a number of factors, including our earnings,capital requirements and overall financial condition and our ability to receive dividends from our subsidiaries. If we pay any dividends, we will pay our ADS holders’dividends with respect to their underlying shares to the same extent as holders of our ordinary shares, subject to the terms of the deposit agreement, including thefees and expenses payable thereunder. Cash dividends on our ordinary shares, if any, will be paid in U.S. dollars.Our ability to receive dividends from our subsidiaries may limit our ability to pay dividends on our ordinary shares. See Risk Factors – Risks Related toDoing Business in China – Our holding company structure may limit the payment of dividends” and “Item 10. Additional Information – D. Exchange Controls –Dividend Distribution”.B. SIGNIFICANT CHANGES.N/AITEM 9. THE OFFER AND LISTINGA. OFFER AND LISTING DETAILS.Markets and Share Price HistoryOur ordinary shares are not currently listed on any trading market. Our American Depository Shares (“ADSs”) were voluntarily delisted from the NASDAQCapital Market on September 19, 2018. We have applied to NASDAQ for the listing of our ordinary shares on the NASDAQ Capital Market and received an approvalfor listing of Ordinary Shares on August 6, 2018, and as of the date of this transition report, that application and approval are currently under review.46The table below sets forth the high and low reported sales prices in dollars of our ordinary shares, which are represented by ADSs, as reported byNASDAQ in the periods as indicated:ADSHighLowAnnual Highs and Lows (as of the fiscal year end 09/30 for the five most recent full financial years)*20175.592.67201610.21.62Quarterly Highs and Lows (for the two most recent full financial years and any subsequent period, based on calendarquarter end)*2018Third Quarter8.006.30Second Quarter8.824.25First Quarter6.403.702017Fourth Quarter5.592.91Third Quarter3.992.67Second Quarter4.063.07First Quarter5.152.832016Fourth Quarter6.594.20Third Quarter10.201.62Second Quarter3.101.97First Quarter3.602.12Monthly Highs and Lows (for the most recent six months)September 20188.006.41August 20187.706.63July 20187.506.30June 20188.827.55May 20187.805.92April 20187.454.25*The Company effected a 1for10 reverse stock split of its ordinary shares on November 6, 2012 (the “Reverse Split”). The ratio between each AmericanDepositary Share (“ADS”) and its underlying ordinary share postReverse Split remains the same, namely, one ADR remains to represent one ordinary sharepost the Reverse Split. The price listed here after November 6, 2012 reflected the effect from the Reverse Split.B. PLAN OF DISTRIBUTION.Not Applicable.C. MARKETS.Our ordinary shares are not currently listed on any trading market. Our ADSs were voluntarily delisted from the NASDAQ Capital Market on September 19,2018. We have applied to NASDAQ for the listing of our ordinary shares on the NASDAQ Capital Market and received an approval for listing of Ordinary Shares onAugust 6, 2018, and as of the date of this transition report, that application and approval are currently under review.47D. SELLING SHAREHOLDERS.Not applicable.E. DILUTION.Not applicable.F. EXPENSES OF THE ISSUE.Not applicable.ITEM 10. ADDITIONAL INFORMATION.A. SHARE CAPITALNot applicable.B. MEMORANDUM AND ARTICLES OF ASSOCIATIONWe are a British Virgin Islands company incorporated with limited liability and our affairs are governed by the provisions of our memorandum of associationand articles of association, as amended and restated from time to time, and by the provisions of applicable British Virgin Islands law.Our memorandum of association and articles of association authorize the issuance of up to 251,000,000 shares, which are designated into (i) 250,000,000 ofordinary shares of the Company (“Ordinary Shares”), and (ii) 1,000,000 preferred shares of the Company (“Preferred Shares”), in each case with the rights,preferences and privileges as set out in the memorandum and articles of association of the Company.Please see below for a description of our ADSs under “Item 12. Description of Securities Other Than Equity Securities – D. American Depository Shares.”The following is a summary of the material provisions of our ordinary shares and our memorandum of association and articles of association.Ordinary SharesAll of our issued and outstanding ordinary shares are fully paid and nonassessable. Holders of our ordinary shares who are nonresidents of the BritishVirgin Islands may freely hold and vote their shares.Subject to the memorandum and articles of association (and, for greater clarity, without prejudice to any special rights conferred thereby on the holders ofany other shares), an Ordinary Share of the Company confers on the holder:(a)the right to one vote per Ordinary Share at a meeting of the members or on any resolution of members;(b)the right to an equal share in any distribution paid by the Company; and(c)the right to an equal share in the distribution of the surplus assets of the Company on a winding up;48Subject to the memorandum and articles of association (and, for greater clarity, without prejudice to any special rights conferred thereby on the holders ofany other shares), a Preferred Share of the Company confers on the holder:(a)the right to 399 votes per Preferred Share at a meeting of the members or on any resolution of members;(b)the right to an equal share in any distribution paid by the Company;(c)the right to an equal share in the distribution of the surplus assets of the Company on a winding up;(d)be freely transferable, in whole or in part, by Mr. Xuesong Song to any third party through one or more Private Transactions, subject toApplicable Law; and(e)be freely transferable, in whole or in part, by Mr. Xuesong Song to any third party through one or more Public Transactions, subject to ApplicableLaw and Automatic Conversion of such Preferred Share(s) into Ordinary Share(s).Each Preferred Share shall be automatically converted at any time after issue and without the payment of any additional sum into an equal number of fullypaid Ordinary Shares upon the conclusion of any transfer by Mr. Xuesong Song to any third party through one or more Public Transactions.Limitation on Liability and Indemnification MattersUnder British Virgin Islands law, each of our directors and officers, in performing his or her functions, is required to act honestly and in good faith with aview to our best interests and exercise the care, diligence and skill that a reasonably prudent person would exercise in comparable circumstances. Our memorandumof association and articles of association provide that, to the fullest extent permitted by British Virgin Islands law or any other applicable laws, our directors will notbe personally liable to us or our shareholders for any acts or omissions in the performance of their duties. Such limitation of liability does not affect the availabilityof equitable remedies such as injunctive relief or rescission. These provisions will not limit the liability of directors under United States federal securities laws.We may indemnify any of our directors or anyone serving at our request as a director of another entity against all expenses, including legal fees, andagainst all judgments, fines and amounts paid in settlement and reasonably incurred in connection with legal, administrative or investigative proceedings. We mayonly indemnify a director if he or she acted honestly and in good faith with the view to our best interests and, in the case of criminal proceedings, the director hadno reasonable cause to believe that his or her conduct was unlawful. The decision of our board of directors as to whether the director acted honestly and in goodfaith with a view to our best interests and as to whether the director had no reasonable cause to believe that his or her conduct was unlawful, is in the absence offraud sufficient for the purposes of indemnification, unless a question of law is involved. The termination of any proceedings by any judgment, order, settlement,conviction or the entry of no plea does not, by itself, create a presumption that a director did not act honestly and in good faith and with a view to our best interestsor that the director had reasonable cause to believe that his or her conduct was unlawful. If a director to be indemnified has been successful in defense of anyproceedings referred to above, the director is entitled to be indemnified against all expenses, including legal fees, and against all judgments, fines and amounts paidin settlement and reasonably incurred by the director or officer in connection with the proceedings.We may purchase and maintain insurance in relation to any of our directors or officers against any liability asserted against the directors or officers andincurred by the directors or officers in that capacity, whether or not we have or would have had the power to indemnify the directors or officers against the liabilityas provided in our memorandum of association and articles of association.Insofar as indemnification for liabilities arising under the Securities Act may be permitted for our directors or officers under the foregoing provisions, wehave been informed that in the opinion of the Securities and Exchange Commission, such indemnification is against public policy as expressed in the Securities Actand is therefore unenforceable as a matter of United States law.49Differences in Corporate LawWe were incorporated under, and are governed by, the laws of the British Virgin Islands. The corporate statutes of the State of Delaware and the BritishVirgin Islands are similar, and the flexibility available under British Virgin Islands law has enabled us to adopt memorandum of association and articles of associationthat will provide shareholders with rights that do not vary in any material respect from those they would enjoy if we were incorporated under the Delaware GeneralCorporation Law, or Delaware corporate law. Set forth below is a summary of some of the differences between provisions of the BVI Act applicable to us and thelaws application to companies incorporated in Delaware and their shareholders.Director’s Fiduciary DutiesUnder Delaware corporate law, a director of a Delaware corporation has a fiduciary duty to the corporation and its stockholders. This duty has twocomponents: the duty of care and the duty of loyalty. The duty of care requires that a director act in good faith, with the care that an ordinarily prudent personwould exercise under similar circumstances. Under this duty, a director must inform himself of, and disclose to stockholders, all material information reasonablyavailable regarding a significant transaction. The duty of loyalty requires that a director act in a manner he reasonably believes to be in the best interests of thecorporation. He must not use his corporate position for personal gain or advantage. This duty prohibits selfdealing by a director and mandates that the bestinterest of the corporation and its stockholders take precedence over any interest possessed by a director, officer or controlling stockholder and not shared by thestockholders generally. In general, actions of a director are presumed to have been made on an informed basis, in good faith and in the honest belief that the actiontaken was in the best interests of the corporation. However, this presumption may be rebutted by evidence of a breach of one of the fiduciary duties. Should suchevidence be presented concerning a transaction by a director, a director must prove the procedural fairness of the transaction, and that the transaction was of fairvalue to the corporation.British Virgin Islands law provides that every director of a British Virgin Islands company in exercising his powers or performing his duties shall acthonestly and in good faith and in what the director believes to be in the best interests of the company. Additionally, the director shall exercise the care, diligence andskill that a reasonable director would exercise in the same circumstances taking into account the nature of the company, the nature of the decision and the positionof the director and his responsibilities. In addition, British Virgin Islands law provides that a director shall exercise his powers as a director for a proper purpose andshall not act, or agree to the company acting, in a manner that contravenes British Virgin Islands law or the memorandum association or articles of association of thecompany.Amendment of Governing DocumentsUnder Delaware corporate law, with very limited exceptions, a vote of the stockholders is required to amend the certificate of incorporation. Under BritishVirgin Islands law and our memorandum of association and articles of association, (i) our shareholders may amend our memorandum of association and articles ofassociation by a resolution of shareholders, or (ii) our board of directors may amend our memorandum of association and articles of association by a resolution ofdirectors without a requirement for a resolution of shareholders so long as the amendment does not:●restrict the rights of the shareholders to amend the memorandum of association and articles of association;●change the percentage of shareholders required to pass a resolution of shareholders to amend the memorandum of association and articles ofassociation;●amend the memorandum of association and articles of association in circumstances where the memorandum of association and articles ofassociation cannot be amended by the shareholders; or●amend the provisions of memorandum of association or the articles of association pertaining to “rights attaching to shares,” “rights not varied bythe issue of the shares pari passu,” “variation of rights” and “amendment of memorandum and articles”.50Written Consent of DirectorsUnder Delaware corporate law, directors may act by written consent only on the basis of a unanimous vote. Under British Virgin Islands law, directors’consents need only a majority of directors signing to take effect.Written Consent of ShareholdersUnder Delaware corporate law, unless otherwise provided in the certificate of incorporation, any action to be taken at any annual or special meeting ofstockholders of a corporation, may be taken by written consent of the holders of outstanding stock having not less than the minimum number of votes that wouldbe necessary to take such action at a meeting. As permitted by British Virgin Islands law, shareholders’ consents need only a majority of shareholders signing totake effect. Our memorandum of association and articles of association provide that shareholders may approve corporate matters by way of a resolution consentedto at a meeting of shareholders or in writing by a majority of shareholders entitled to vote thereon.Shareholder ProposalsUnder Delaware corporate law, a shareholder has the right to put any proposal before the annual meeting of shareholders, provided it complies with thenotice provisions in the governing documents. A special meeting may be called by the board of directors or any other person authorized to do so in the governingdocuments, but shareholders may be precluded from calling special meetings. British Virgin Islands law and our memorandum of association and articles ofassociation provide that our directors shall call a meeting of the shareholders if requested in writing to do so by shareholders entitled to exercise at least 30% of thevoting rights in respect of the matter for which the meeting is requested.Sale of AssetsUnder Delaware corporate law, a vote of the stockholders is required to approve the sale of assets only when all or substantially all assets are being sold. Inthe British Virgin Islands, shareholder approval is required when more than 50% of the company’s total assets by value are being disposed of or sold.Dissolution; Winding UpUnder Delaware corporate law, unless the board of directors approves the proposal to dissolve, dissolution must be approved by shareholders holding100% of the total voting power of the corporation. Only if the dissolution is initiated by the board of directors may it be approved by a simple majority of thecorporation’s outstanding shares. Delaware corporate law allows a Delaware corporation to include in its certificate of incorporation a supermajority votingrequirement in connection with dissolutions initiated by the board. As permitted by British Virgin Islands law and our memorandum of association and articles ofassociation, we may be voluntarily liquidated under Part XII of the BVI Act by resolution of directors and resolution of shareholders if we have no liabilities and weare able to pay our debts as they fall due.Redemption of SharesUnder Delaware corporate law, any stock may be made subject to redemption by the corporation at its option or at the option of the holders of such stockprovided there remains outstanding shares with full voting power. Such stock may be made redeemable for cash, property or rights, as specified in the certificate ofincorporation or in the resolution of the board of directors providing for the issue of such stock. As permitted by British Virgin Islands law, and our memorandum ofassociation and articles of association, shares may be repurchased, redeemed or otherwise acquired by us. Our directors must determine that immediately followingthe redemption or repurchase we will be able to satisfy our debts as they fall due and the value of our assets exceeds our liabilities.51Variation of Rights of SharesUnder Delaware corporate law, a corporation may vary the rights of a class of shares with the approval of a majority of the outstanding shares of suchclass, unless the certificate of incorporation provides otherwise. As permitted by British Virgin Islands law, and our memorandum of association and articles ofassociation, if our share capital is divided into more than one class of shares, we may vary the rights attached to any class only with the consent in writing ofholders of not less than threefourths of the issued shares of that class and holders of not less than threefourths of the issued shares of any other class of shareswhich may be affected by the variation.Removal of DirectorsUnder Delaware corporate law, a director of a corporation with a classified board may be removed only for cause with the approval of a majority of theoutstanding shares entitled to vote, unless the certificate provides otherwise. As permitted by British Virgin Islands law and our memorandum of association andarticles of association, directors may be removed by resolution of directors or resolution of shareholders.MergersUnder the BVI Act, two or more companies may merge or consolidate in accordance with the statutory provisions. A merger means the merging of two ormore constituent companies into one of the constituent companies, and a consolidation means the uniting of two or more constituent companies into a newcompany. In order to merger or consolidate, the directors of each constituent company must approve a written plan of merger or consolidation which must beauthorized by a resolution of shareholders.Shareholders not otherwise entitled to vote on the merger or consolidation may still acquire the right to vote if the plan of merger or consolidation containsany provision which, if proposed as an amendment to the memorandum association or articles of association, would entitle them to vote as a class or series on theproposed amendment. In any event, all shareholders must be given a copy of the plan of merger or consolidation irrespective of whether they are entitled to vote atthe meeting or consent to the written resolution to approve the plan of merger or consolidation.Inspection of Books and RecordsUnder Delaware corporate law, any shareholder of a corporation may for any proper purpose inspect or make copies of the corporation’s stock ledger, list ofshareholders and other books and records. Holders of our shares have no general right under British Virgin Islands law to inspect or obtain copies of our list ofshareholders or our corporate records. However, we will provide holders of our shares with annual audited financial statements. See “Where You Can FindAdditional Information.”Conflict of InterestThe BVI Act provides that a director shall, after becoming aware that he is interested in a transaction entered into or to be entered into by the company,disclose that interest to the board of directors of the company. The failure of a director to disclose that interest does not affect the validity of a transaction enteredinto by the director or the company, so long as the director’s interest was disclosed to the board prior to the company’s entry into the transaction or was notrequired to be disclosed (for example where the transaction is between the company and the director himself or is otherwise in the ordinary course of business andon usual terms and conditions). As permitted by British Virgin Islands law and our memorandum of association and articles of association, a director interested in aparticular transaction may vote on it, attend meetings at which it is considered, and sign documents on our behalf which relate to the transaction.52Transactions with Interested ShareholdersDelaware corporate law contains a business combination statute applicable to Delaware public corporations whereby, unless the corporation hasspecifically elected not to be governed by such statute by amendment to its certificate of incorporation, it is prohibited from engaging in certain businesscombinations with an “interested shareholder” for three years following the date that such person becomes an interested shareholder. An interested shareholdergenerally is a person or group who or that owns or owned 15% or more of the target’s outstanding voting stock within the past three years. This has the effect oflimiting the ability of a potential acquirer to make a twotiered bid for the target in which all shareholders would not be treated equally. The statute does not apply if,among other things, prior to the date on which such shareholder becomes an interested shareholder, the board of directors approves either the businesscombination or the transaction that resulted in the person becoming an interested shareholder. This encourages any potential acquirer of a Delaware publiccorporation to negotiate the terms of any acquisition transaction with the target’s board of directors.British Virgin Islands law has no comparable provision. As a result, we cannot avail ourselves of the types of protections afforded by the Delawarebusiness combination statute. However, although British Virgin Islands law does not regulate transactions between a company and its significant shareholders, itdoes provide that such transactions must be entered into bona fide in the best interests of the company and not with the effect of constituting a fraud on theminority shareholders.Independent DirectorsThere are no provisions under Delaware corporate law or under the BVI Act that require a majority of our directors to be independent.Cumulative VotingUnder Delaware corporate law, cumulative voting for elections of directors is not permitted unless the company’s certificate of incorporation specificallyprovides for it. Cumulative voting potentially facilitates the representation of minority shareholders on a board of directors since it permits the minority shareholderto cast all the votes to which the shareholder is entitled on a single director, which increases the shareholder’s voting power with respect to electing such director.There are no prohibitions to cumulative voting under the laws of the British Virgin Islands, but our memorandum of association and articles of association do notprovide for cumulative votingAntitakeover Provisions in Our Memorandum of association and articles of associationSome provisions of our memorandum of association and articles of association may discourage, delay or prevent a change in control of our company ormanagement that shareholders may consider favorable, including provisions that authorize our board of directors to issue preference shares in one or more seriesand to designate the price, rights, preferences, privileges and restrictions of such preference shares.C. MATERIAL CONTRACTS.On January 25, 2018, the Company executed an Asset Exchange Agreement (“AEA”) with C Media Limited, a corporation organized under the laws of theCayman Islands (“C Media”), whereby the Company agreed to purchase all the capital stock and equity interests of LK Technology Ltd, together with its whollyowned subsidiaries MMB Limited and Mobile Media (China) Limited and all respective subsidiaries from C Media in exchange for (i) 185,412,599 ordinary shares ofthe Company, par value $0.01 per share (“Ordinary Shares”), (ii) 1,000,000 preferred shares of Kingtone (“Preferred Shares”) and (iii) all issued and outstandingcapital stock or equity interests of the Company’s subsidiary, Topsky InfoTech Holdings Pte Ltd., and its whollyowned subsidiary Xi’an Softech Co., Ltd.,including all entities effectively controlled by Xi’an Softech Co., Ltd. through contractual arrangements and variable business entities.To consummate the contemplated transactions described above, the Company obtained shareholder consent at a special meeting held on May 20, 2018, (i)to authorize 1,000,000 Preferred Shares, (ii) to authorize additional Ordinary Shares so that total authorized Ordinary Shares is equal to 250,000,000 shares, (iii) to listsuch Ordinary Shares on NASDAQ, and (iv) to approve the transactions contemplated in the Asset Exchange Agreement. Additionally, NASDAQ needed toapprove the contemplated transactions prior to consummation thereof. C Media had the right to terminate the AEA if the closing had not occurred (other thanthrough the failure of C Media to comply fully with its obligations under the AEA) on or before July 31, 2018. The transactions contemplated by the AEA wereconsummated on August 17, 2018.53On January 25, 2018, five shareholders of the Company including its largest shareholder and its Chief Executive Officer executed a Securities PurchaseAgreement, whereby such shareholders agreed to sell a total of 617,988 Ordinary Shares and 282,694 American Depository Shares of the Company to Redstone YYLManagement Limited, a company incorporated in the British Virgin Islands, in exchange for an aggregate purchase price of $1,897,860.09.On August 25, 2018, LK Technology entered into a Stock Purchase Agreement (the “Agreement”) with the shareholders (“Shareholders”) of SuperengineHoldings Limited, a limited liability company organized under the laws of the British Virgin Islands (the “Superengine”), pursuant to which LK Technology acquiredall of the issued and outstanding capital stock of Superengine for an aggregate purchase price of US$60 million (the “Purchase Price”), which are paid by theissuance of our Ordinary Shares in an amount equal to the quotient of (x) the Purchase Price divided by (y) the average of the closing prices of the Ordinary Shareson the NASDAQ Capital Market over the 12 months period preceding July 31, 2018. We are a party to the Agreement in connection with the issuance of theOrdinary Shares and certain other limited purposes.D. EXCHANGE CONTROLS.This section sets forth a summary of the most significant regulations or requirements that affect our business activities in China or our shareholders’ rightto receive dividends and other distributions from us.Regulations on Internet Content ProvidersThe Administrative Measures on Internet Information Services, or the Internet Content Measures, which was promulgated by the State Council onSeptember 25, 2000 and amended on January 8, 2011, set out guidelines on the provision of internet information services. The Internet Content Measures specifiesthat internet information services regarding news, publications, education, medical and health care, pharmacy and medical appliances, among other things, arerequired to be examined, approved and regulated by the relevant authorities. Internet information providers are prohibited from providing services beyond thoseincluded in the scope of their licenses or filings. Furthermore, the Internet Content Measures specifies a list of prohibited content. Internet information providers areprohibited from producing, copying, publishing or distributing information that is humiliating or defamatory to others or that infringes the legal rights of others.Internet information providers that violate such prohibition may face criminal charges or administrative sanctions. Internet information providers must monitor andcontrol the information posted on their websites. If any prohibited content is found, they must remove the content immediately, keep a record of such content andreport to the relevant authorities.The Internet Content Measures classifies internet information services into commercial internet information services and noncommercial internetinformation services. Commercial internet information services refer to services that provide information or services to internet users with charge. A provider ofcommercial internet information services must obtain an ICP License.Regulations on Internet Audiovideo Program ServicesOn December 20, 2007, the MII and the State Administration of Press, Publication, Radio, Film and Television, or the SAPPRFT, jointly issued theAdministrative Provisions for the Internet AudioVideo Program Service, or the Audiovideo Program Provisions, which came into effect on January 31, 2008 andwas amended on August 28, 2015. The Audiovideo Program Provisions defines “internet audiovideo program services” as producing, editing and integrating ofaudiovideo programs, supplying audiovideo programs to the public via the internet, and providing audiovideo programs uploading and transmission services to athird party. Entities providing internet audiovideo programs services must obtain an internet audiovideo program transmission license. Applicants for such licensesshall be stateowned or statecontrolled entities unless an internet audiovideo program transmission license has been obtained prior to the effectiveness of theAudiovideo Program Provisions in accordance with the thenineffect laws and regulations. In addition, foreigninvested enterprises are not allowed to engage inthe abovementioned services. According to the Audiovideo Program Provisions and other relevant laws and regulations, audiovideo programs provided by theentities supplying Internet audiovideo program services shall not contain any illegal content or other content prohibited by the laws and regulations, such as anycontent against the basic principles in the PRC Constitution, any content that damages the sovereignty of the country or national security, and any content thatdisturbs social order or undermine social stability. An audiovideo program that has already been broadcast shall be retained in full for at least 60 days. Movies,television programs and other media content used as Internet audiovideo programs shall comply with relevant administrative regulations on programs broadcaststhrough radio, movie and television channels. Entities providing services related to Internet audiovideo programs shall immediately delete the audiovideoprograms violating laws and regulations, keep relevant records, report relevant authorities and implement other regulatory requirements.54The Categories of the Internet AudioVideo Program Services, or the Audiovideo Program Categories, promulgated by SAPPRFT on March 10, 2017,classifies internet audio/video programs into four categories: (I) Category I internet audio/video program service, which is carried out with a form of radio station ortelevision station; (II) Category II internet audio/video program service, including (a) rebroadcasting service of current political news audio/video programs; (b)hosting, interviewing, reporting and commenting service of arts, entertainment, technology, finance and economics, sports, education and other specializedaudio/video programs; (c) producing (interviewing not included) and broadcasting service of arts, entertainment, technology, finance and economics, sports,education and other specialized audio/video programs; (d) producing and broadcasting service of internet films/dramas; (e) aggregating and broadcasting service offilms, television dramas and cartoons; (f) aggregating and broadcasting service of arts, entertainment, technology, finance and economics, sports, education andother specialized audio/video programs; and (g) live audio/video broadcasting service of cultural activities of common social organizations, sport events or otherorganization activities; and (III) Category III internet audio/video program service, including (a) aggregating service of online audio/video contents, and (b) rebroadcasting service of the audio/video programs uploaded by internet users; and (IV) Category III internet audio/video program service, including (a) rebroadcasting of the radio/television program channels; and (b) rebroadcasting of internet audio/video program channels.On May 27, 2016, the SAPPRFT issued the Notice on Relevant Issues concerning Implementing the Approval Works of Upgrading Mobile Internet AudioVideo Program Service, or the Mobile AudioVideo Program Notice. The Mobile AudioVideo Program Notice provides that the mobile Internet audiovideo programservices shall be deemed Internet audiovideo program service. Entities which have obtained the approvals to provide the Internet audiovideo program servicesmay use mobile WAP websites or mobile applications to provide audiovideo program services. Entities with regulatory approvals may operate mobile applicationsto provide the audiovideo program services The types of the programs shall be within the permitted scope as provided in the licenses and such mobile applicationsshall be filed with the SAPPRFT.Regulations on Production and Operation of Radio/Television ProgramsOn July 19, 2004, the SAPPRFT promulgated the Administrative Measures on the Production and Operation of Radio and Television Programs, or the Radioand Television Program Production Measures, which came into effect on August 20, 2004 and was amended on August 28, 2015. The Radio and Television ProgramProduction Measures provides that any business that produces or operates radio or television programs must first obtain a Radio and Television ProgramProduction and Operation Permit. Entities holding such permits shall conduct their business within the permitted scope as provided in their permits. In addition,foreigninvested enterprises are not allowed to engage in the abovementioned services.Regulations on Online Advertising ServicesOn April 24, 2015, the Standing Committee of the National People’s Congress enacted the Advertising Law of the People’s Republic of China, or the NewAdvertising Law, effective on September 1, 2015. The New Advertising Law increases the potential legal liability of advertising services providers and strengthensregulations of false advertising. On July 4, 2016, the State Administration for Industry and Commerce, or the SAIC, issued the Interim Measures of theAdministration of Online Advertising, or the SAIC Interim Measures, effective on September 1, 2016. The New Advertising Law and the SAIC Interim Measuresrequire that online advertisements may not affect users’ normal internet use and internet popup ads must display a “close” sign prominently and ensure onekeyclosing of the popup windows. The SAIC Interim Measures provides that all online advertisements must be marked “Advertisement” so that viewers can easilyidentify them as such. Moreover, the SAIC Interim Measures treats paid search results as advertisements that are subject to PRC advertisement laws, and requiresthat paid search results be conspicuously identified on search result pages as advertisements. The New Advertising Law and SAIC Interim Measures require us toconduct more stringent examination and monitoring of our advertisers and the content of their advertisements.55Regulations on Online GamesIn September 2009, the GAPP (currently known as the SAPPRFT), together with the National Copyright Administration, and the National Office ofCombating Pornography and Illegal Publications jointly issued the Notice on Further Strengthening on the Administration of Preexamination and Approval ofOnline Game and the Examination and Approval of Imported Online Game, or the Circular 13. The Circular 13 states that foreign investors are not permitted to investin online game operating businesses in the PRC via wholly foreignowned entities, Sinoforeign equity joint ventures or cooperative joint ventures or to exercisecontrol over or participate in the operation of domestic online game businesses through indirect means, such as other joint venture companies or contractual ortechnical arrangements. If the our contractual arrangements were deemed under the Circular 13 to be an “indirect means” for foreign investors to exercise controlover or participate in the operation of a domestic online game business, our contractual arrangements might be challenged by the SAPPRFT. We are not aware ofany online game companies which use the same or similar contractual arrangements having been challenged by the SAPPRFT as using those contractualarrangements as an “indirect means” for foreign investors to exercise control over or participate in the operation of a domestic online game business or having beenpenalized or ordered to terminate operations since the Circular 13 became effective. However it is unclear whether and how the Circular 13 might be interpreted orimplemented in the future. See “Risk Factors—If the PRC government finds that the agreements that establish the structure for operating certain of our operations inChina do not comply with PRC regulations relating to the relevant industries, or if these regulations or the interpretation of existing regulations change in the future,we could be subject to severe penalties or be forced to relinquish our interests in those operations.”The Interim Measures for the Administration of Online Games, or the Online Game Measures, issued by the MOC, which took effect on August 1, 2010 andamended on December 15, 2017, regulates a broad range of activities related to the online games business, including the development, production and operation ofonline games, the issuance of virtual currencies used for online games, and the provision of virtual currency trading services. The Online Game Measures providesthat any entity that is engaged in online game operations must obtain an Network Cultural Business Permit, and require the content of an imported online game to beexamined and approved by the MOC prior to the game’s launch and require a domestic online game to be filed with the MOC within 30 days after its launch. TheNotice of the Ministry of Culture on the Implementation of the Interim Measures for the Administration of Online Games, which was issued by the MOC on July 29,2010 to implement the Online Game Measures, (i) requires online game operators to protect the interests of online game users and specifies that certain terms thatmust be included in service agreements between online game operators and the users of their online games, (ii) requires content review of imported online gamesand filing procedures for domestic online games, (iii) emphasizes the protection of minors playing online games, and (iv) requests online game operators to promoterealname registration by their game users.Regulations on Information Security, Censorship and PrivacyThe Standing Committee of the National People’s Congress, China’s national legislative body, enacted the Decisions on the Maintenance of InternetSecurity on December 28, 2000 that may subject persons to criminal liabilities in China for any attempt to use the internet to: (i) gain improper entry to a computer orsystem of strategic importance; (ii) disseminate politically disruptive information; (iii) leak state secrets; (iv) spread false commercial information or (v) infringe uponintellectual property rights. In 1997, the Ministry of Public Security issued the Administration Measures on the Security Protection of Computer InformationNetwork with International Connections which prohibits using the internet to leak state secrets or to spread socially destabilizing materials. If an ICP license holderviolates these measures, the PRC government may revoke its ICP license and shut down its websites. Pursuant to the Ninth Amendment to the Criminal Law issuedby the Standing Committee of the National People’s Congress on August 29, 2015, effective on November 1, 2015, any ICP provider that fails to fulfill the obligationsrelated to internet information security as required by applicable laws and refuses to take corrective measures, will be subject to criminal liability for (i) any largescale dissemination of illegal information; (ii) any severe effect due to the leakage of users’ personal information; (iii) any serious loss of evidence of criminalactivities; or (iv) other severe situations, and any individual or entity that (i) sells or provides personal information to others unlawfully or (ii) steals or illegallyobtains any personal information will be subject to criminal liability in severe situations.56The Cybersecurity Law of the PRC, or the Cybersecurity Law, which was promulgated on November 7, 2016 by the Standing Committee of the NationalPeople’s Congress and came into effect on June 1, 2017, provides that network operators shall meet their cyber security obligations and shall take technicalmeasures and other necessary measures to protect the safety and stability of their networks. Under the Cybersecurity Law, network operators are subject to varioussecurity protectionrelated obligations, including: (i) network operators shall comply with certain obligations regarding maintenance of the security of internetsystems; (ii) network operators shall verify users’ identities before signing agreements or providing certain services such as information publishing or realtimecommunication services; (iii) when collecting or using personal information, network operators shall clearly indicate the purposes, methods and scope of theinformation collection, the use of information collection, and obtain the consent of those from whom the information is collected; (iv) network operators shall strictlypreserve the privacy of user information they collect, and establish and maintain systems to protect user privacy; (v) network operators shall strengthenmanagement of information published by users, and when they discover information prohibited by laws and regulations from publication or dissemination, theyshall immediately stop dissemination of that information, including taking measures such as deleting the information, preventing the information from spreading,saving relevant records, and reporting to the relevant governmental agencies.Regulations on Intellectual Property RightsRegulations on CopyrightThe Copyright Law of the PRC, or the Copyright Law, which took effect on June 1, 1991 and was amended in 2001 and in 2010, provides that Chinesecitizens, legal persons, or other organizations shall, whether published or not, own copyright in their copyrightable works, which include, among others, works ofliterature, art, natural science, social science, engineering technology and computer software. Copyright owners enjoy certain legal rights, including right ofpublication, right of authorship and right of reproduction. The Copyright Law as revised in 2010 extends copyright protection to Internet activities, productsdisseminated over the Internet and software products. In addition, Copyright Law provides for a voluntary registration system administered by the China CopyrightProtection Center, or the CPCC. According to the Copyright Law, an infringer of the copyrights shall be subject to various civil liabilities, which include ceasinginfringement activities, apologizing to the copyright owners and compensating the loss of copyright owner. Infringers of copyright may also subject to fines and/oradministrative or criminal liabilities in severe situations.The Computer Software Copyright Registration Measures, or the Software Copyright Measures, promulgated by the State Council on December 20, 2001and amended on January 30, 2013, regulates registrations of software copyright, exclusive licensing contracts for software copyright and assignment agreements.The National Copyright Administration, or the NCA administers software copyright registration and the CPCC, is designated as the software registration authority.The CPCC shall grant registration certificates to the Computer Software Copyrights applicants which meet the requirements of both the Software CopyrightMeasures and the Computer Software Protection Regulations (Revised in 2013).The Provisions of the Supreme People’s Court on Certain Issues Related to the Application of Law in the Trial of Civil Cases Involving Disputes onInfringement of the Information Network Dissemination Rights specifies that disseminating works, performances or audiovideo products by the internet users orthe internet service providers via the internet without the permission of the copyright owners shall be deemed to have infringed the right of dissemination of thecopyright owner.57The Measures for Administrative Protection of Copyright Related to Internet, which was jointly promulgated by the NCA and the MIIT on April 29, 2005and became effective on May 30, 2005, provides that upon receipt of an infringement notice from a legitimate copyright holder, an ICP operator must take remedialactions immediately by removing or disabling access to the infringing content. If an ICP operator knowingly transmits infringing content or fails to take remedialactions after receipt of a notice of infringement that harms public interest, the ICP operator could be subject to administrative penalties, including an order to ceaseinfringing activities, confiscation by the authorities of all income derived from the infringement activities, or payment of fines.On May 18, 2006, the State Council promulgated the Regulations on the Protection of the Right to Network Dissemination of Information (as amended in2013). Under these regulations, an owner of the network dissemination rights with respect to written works or audio or video recordings who believes thatinformation storage, search or link services provided by an Internet service provider infringe his or her rights may require that the Internet service provider delete, ordisconnect the links to, such works or recordings.Patent LawsAccording to the Patent Law of the PRC (Revised in 2008), the State Intellectual Property Office is responsible for administering patent law in the PRC. Thepatent administration departments of provincial, autonomous region or municipal governments are responsible for administering patent law within their respectivejurisdictions. The Chinese patent system adopts a firsttofile principle, which means that when more than one person file different patent applications for the sameinvention, only the person who files the application first is entitled to obtain a patent of the invention. To be patentable, an invention or a utility model must meetthree criteria: novelty, inventiveness and practicability. A patent is valid for twenty years in the case of an invention and ten years in the case of utility models anddesigns.Trademark LawsTrademarks are protected by the Trademark Law of the PRC (Revised in 2013) which was adopted in 1982 and subsequently amended in 1993, 2001 and 2013respectively as well as by the Implementation Regulations of the PRC Trademark Law adopted by the State Council in 2002 and as most recently amended on April29, 2014. The Trademark Office under the SAIC handles trademark registrations. The Trademark Office grants a tenyear term to registered trademarks and the termmay be renewed for another tenyear period upon request by the trademark owner. A trademark registrant may license its registered trademarks to another party byentering into trademark license agreements, which must be filed with the Trademark Office for its record. As with patents, the Trademark Law has adopted a firsttofile principle with respect to trademark registration. If a trademark applied for is identical or similar to another trademark which has already been registered or subjectto a preliminary examination and approval for use on the same or similar kinds of products or services, such trademark application may be rejected. Any personapplying for the registration of a trademark may not injure existing trademark rights first obtained by others, nor may any person register in advance a trademark thathas already been used by another party and has already gained a “sufficient degree of reputation” through such party’s use.Regulations on Domain NamesThe MIIT promulgated the Measures on Administration of Internet Domain Names, or the Domain Name Measures, on August 24, 2017, which took effecton November 1, 2017 and replaced the Administrative Measures on China Internet Domain Name promulgated by MII on November 5, 2004. According to theDomain Name Measures, the MIIT is in charge of the administration of PRC internet domain names. The domain name registration follows a firsttofile principle.Applicants for registration of domain names shall provide the true, accurate and complete information of their identities to domain name registration serviceinstitutions. The applicants will become the holder of such domain names upon the completion of the registration procedure.Relevant Regulations of the Hightech EnterpriseThe Ministry of Information Industry, the Ministry of Science and Technology and the State Tax Bureau collectively promulgated and issued the“Certifying Standard and Managing Measures for Hightech Enterprises” and “the Hightech Areas of Main National Support” on April 14, 2008 to certify the Hightech enterprise and encourage and support the development of the Chinese Hightech enterprises. Under the Hightech Enterprises Measures, the enterprise canenjoy the favorable tax policy when it is certified as a Hightech enterprise by the Ministry of Information Industry, the Ministry of Science and Technology and theState Tax Bureau or with its provincial branch according to the stipulated standard. The software and computer and network technology are recognized as the mainnational supported Hightech field. Kingtone Information is a Hightech enterprise and enjoys a favorable income tax rate of 15%.58Laws and Regulations of Intellectual Property RightsChina has adopted legislation governing intellectual property rights, including patents, copyrights and trademarks. China is a signatory to the maininternational conventions on intellectual property rights and became a member of the Agreement on Trade Related Aspects of Intellectual Property Rights upon itsaccession to the WTO in December 2001.PatentsThe “Patent Law of the People’s Republic of China” promulgated by the Standing Committee of the National People's Congress, adopted in 1985 andrevised in 1992, 2001 and 2008, protects registered patents. The State Intellectual Property Office of PRC handles granting patent rights, providing for a twentyyearpatent term for inventions and a tenyear patent term for utility models and designs. As we disclosed in Item 4, of this transition report on Form 20F, throughKingtone Information, we have been granted one invention patent “wireless video transmission system based on BREW platform” by the State Intellectual PropertyOffice (“SIPO”) of PRC on September 23, 2009 and therefore such invention is entitled to all the protections provided under the Patent Law for twenty years.Computer Software Copyright and AdministrationOn December 20, 2001, the State Council of PRC issued the “Regulation for Computer Software Protection of the People’s Republic of China” (the“Regulation for Computer Software Protection”) which became effective on January 1, 2002 to protect the interests of copyright owners, to promote the research andapplication and to encourage the development of the Chinese software industry. Under the Regulation for Computer Software Protection, natural persons, legalpersons or any other organizations shall have a copyright on the software developed by such persons no matter whether such software has been published. Theprotection period of software copyrights owned by the legal person or other organization is fifty years and expires on December 31 of the fiftieth year from the initialpublication date of such computer software. Currently, Kingtone Information has twelve registration certificates for software copyrights.TrademarksThe “Trademark Law of the People’s Republic of China” promulgated by the State Council of PRC, adopted in 1982 and revised in 1993 and 2001, protectsregistered trademarks. The Trademark Office under the Chinese State Administration for Industry and Commerce handles trademark registrations and grants a termof ten years to registered trademarks which are renewable for another ten years after the application to the Trademark Office by the owners of the trademarks.Trademark license agreements must be filed with the Trademark Office for record. China has a “firsttoregister” system that requires no evidence of prior use orownership. Kingtone Information has its registered trademarks as described in Item 4 of this transition report on Form 20F. Accordingly, such trademarks areentitled to the protection under the Trademark Law.Foreign Currency ExchangeOn August 29, 2008, the SAFE issued the Notice of the General Affairs Department of the State Administration of Foreign Exchange on the RelevantOperating Issues concerning the Improvement of the Administration of Payment and Settlement of Foreign Currency Capital of Foreignfunded Enterprises, orCircular 142. Pursuant to Circular 142, RMB converted from the foreign currencydenominated capital of a foreigninvested company may only be used for purposeswithin the business scope approved by the applicable governmental authority and may not be used for equity investments within the PRC unless specificallyprovided for otherwise. The use of such Renminbi capital may not be changed without SAFE’s approval and may not in any case be used to repay Renminbi loans ifthe proceeds of such loans have not been used.59See “Risk Factors — Risks Related to Doing Business in China — PRC regulation of loans and direct investment by offshore holding companies to PRCentities may delay or prevent us from using the proceeds of our initial public offering to make loans or additional capital contributions to our PRC operatingsubsidiaries, which could materially and adversely affect our liquidity and our ability to fund and expand our business”.Dividend DistributionWe are a British Virgin Islands holding company and substantially all of our operations are conducted through LK Technology. We rely on dividends andother distributions from our LK Technology and its subsidiaries to provide us with our cash flow and allow us to pay dividends on the shares underlying our ADSsand meet our other obligations. The principal regulations governing distribution of dividends paid by wholly foreignowned enterprises include:1.Wholly ForeignOwned Enterprise Law (1986), as amended; and2.Implementation Rules on Wholly ForeignOwned Enterprise Law (1990), as amended.Under these regulations, wholly foreignowned enterprises in China may pay dividends only out of their accumulated profits, if any, determined inaccordance with PRC accounting standards and regulations. In addition, wholly foreignowned enterprises in China are required to set aside at least 10% of theiraftertax profit based on PRC accounting standards each year to its general reserves until the accumulative amount of such reserves reach 50% of its registeredcapital. These reserves are not distributable as cash dividends. The board of directors of a FIE has the discretion to allocate a portion of its aftertax profits to staffwelfare and bonus funds, which may not be distributed to equity owners except in the event of liquidation.Regulation of Foreign Exchange in Certain Onshore and Offshore TransactionsIn October 2005, the SAFE issued the Notice on Issues Relating to the Administration of Foreign Exchange in Fundraising and Return InvestmentActivities of Domestic Residents Conducted via Offshore Special Purpose Companies, or SAFE Notice 75, which became effective as of November 1, 2005, and wasfurther supplemented by two implementation notices issued by the SAFE on November 24, 2005 and May 29, 2007, respectively. Under Circular 75, prior registrationwith the local SAFE branch is required for PRC residents to establish or to control an offshore company for the purposes of financing that offshore company withassets or equity interests in an onshore enterprise located in the PRC. An amendment to the registration or filing with the local SAFE branch by such PRC resident isalso required for the injection of equity interests or assets of an onshore enterprise in the offshore company or overseas funds raised by such offshore company, orany other material change with respect to the offshore company in connection with any increase or decrease of capital, transfer of shares, merger, division, equityinvestment, debt investment, or creation of any security interest over any assets located in the PRC.Under SAFE Notice 75, PRC residents are further required to repatriate into the PRC all of their dividends, profits or capital gains obtained from theirshareholdings in the offshore entity within 180 days of their receipt of such dividends, profits or capital gains. The registration and filing procedures under SAFENotice 75 are prerequisites for other approval and registration procedures necessary for capital inflow from the offshore entity, such as inbound investments orshareholders loans, or capital outflow to the offshore entity, such as the payment of profits or dividends, liquidating distributions, equity sale proceeds, or thereturn of funds upon a capital reduction. Therefore, failure to comply with such registration may subject us to certain restrictions on, including but not limited to, theincrease of the registered capital of our PRC subsidiary, making loans to our PRC subsidiary, and making distributions to us from our onshore companies.Regulations of Overseas Investments and ListingsOn August 8, 2006, six PRC regulatory agencies, including the MOFCOM, the State Assets Supervision and Administration Commission, the StateAdministration for Taxation, the State Administration for Industry and Commerce, the CSRC and the SAFE, jointly adopted the New M&A Rule, which becameeffective on September 8, 2006. This regulation, among other things, includes provisions that purport to require that an offshore SPV formed for purposes ofoverseas listing of equity interests in PRC companies and controlled directly or indirectly by PRC companies or individuals obtain the approval of the CSRC prior tothe listing and trading of such SPV’s securities on an overseas stock exchange.60On September 21, 2006, the CSRC published on its official website procedures regarding its approval of overseas listings by SPVs. The CSRC approvalprocedures require the filing of a number of documents with the CSRC and it would take several months to complete the approval process.The application of the New M&A Rule with respect to overseas listings of SPVs remains unclear with no consensus currently existing among the leadingPRC law firms regarding the scope of the applicability of the CSRC approval requirement.We believe that, based on our understanding of the current PRC laws, regulations and rules and the procedures announced on September 21, 2006, there isno requirement in this regulation that would require an application to be submitted to the MOFCOM or the CSRC for the approval of the listing and trading of ourADSs on the NASDAQ Capital Market.See “Risk Factors — Risks Related to Doing Business in China — If we were required to obtain the prior approval of the China Securities RegulatoryCommission, or CSRC, of the listing and trading of our ADSs on the NASDAQ Capital Market, we may face regulatory actions or other sanctions from the CSRC orother PRC regulatory agencies.”E. TAXATIONThe following discussion sets forth the material British Virgin Islands, PRC and U.S. federal income tax consequences of an investment in our ADSs andthe ordinary shares represented by our ADSs, sometimes referred to collectively as the “securities”. It is based upon laws and relevant interpretations thereof ineffect as of the date of this report, all of which are subject to change. This discussion does not deal with all possible tax consequences relating to an investment inthe securities, such as the tax consequences under state, local and other tax laws. As used in this discussion, “we,” “our” and “us” refers only to LuokungTechnology Ltd.British Virgin Islands TaxationUnder the law of the British Virgin Islands as currently in effect, a holder of the securities who is not a resident of the British Virgin Islands is not liable forBritish Virgin Islands tax on dividends paid with respect to the securities and all holders of the securities are not liable to the British Virgin Islands for tax on gainsrealized during that year on the sale or disposal of such ordinary shares. The British Virgin Islands does not impose a withholding tax on dividends paid by acompany incorporated or reregistered under the BVI Act.There are no capital gains, gift or inheritance taxes levied by the British Virgin Islands on companies incorporated under the BVI Act. In addition, shares ofcompanies incorporated under the BVI Act are not subject to transfer taxes, stamp duties or similar charges.There is no income tax treaty or convention currently in effect between the United States and the British Virgin Islands or between China and the BritishVirgin Islands.61People’s Republic of China TaxationIn 2007, the PRC National People’s Congress enacted the new Enterprise Income Tax Law (the “EIT Law”), which became effective on January 1, 2008. Thenew EIT Law imposes a single uniform income tax rate of 25% on all Chinese enterprises, including foreigninvested enterprises, and levies a withholding tax rate of10% on dividends payable by Chinese subsidiaries to their foreign shareholders unless any such foreign shareholders’ jurisdiction of incorporation has a tax treatywith China that provides for a different withholding agreement. Under the new EIT Law, enterprises established outside China but deemed to have a “de factomanagement body” within the country may be considered “resident enterprises” for Chinese tax purposes and, therefore, may be subject to an enterprise income taxrate of 25% on their worldwide income. Pursuant to the implementation rules of the new EIT Law, a “de facto management body” is defined as a body that hasmaterial and overall management control over the business, personnel, accounts and properties of the enterprise. Although substantially all members of ourmanagement are located in China, it is unclear whether Chinese tax authorities would require (or permit) us to be treated as PRC resident enterprises. If we aredeemed a Chinese tax resident enterprise, we may be subject to an enterprise income tax rate of 25% on our worldwide income, excluding dividends received directlyfrom another Chinese tax resident enterprise, as well as PRC enterprise income tax reporting obligations. If we are not deemed to be a Chinese tax resident enterprise,we may be subject to certain PRC withholding taxes. See “Risk Factors — Risks Related to Doing Business in China — Our holding company structure may limit thepayment of dividends.” As a result of such changes, our historical tax rates may not be indicative of our tax rates for future periods and the value of our ADSs orordinary shares may be adversely affected. If we are deemed a PRC resident enterprise and investors’ gain from the sales of the securities and dividends payable byus are deemed sourced from China, such gains and dividends payable by us may be subject to PRC tax. See “Risk Factors — Risks Related to Doing Business inChina — If we were deemed a “resident enterprise” by PRC tax authorities, we could be subject to tax on our global income at the rate of 25% under the New EITLaw and our nonPRC shareholders could be subject to certain PRC taxes.United States Federal Income TaxationGeneralThe following is a discussion of the material U.S. federal income tax consequences to an investor of purchasing, owning and disposing of our securities.This discussion does not address any aspects of U.S. federal gift or estate tax or the state, local or nonU.S. tax consequences of an investment in the securities.YOU SHOULD CONSULT YOUR OWN TAX ADVISORS CONCERNING THE U.S. FEDERAL, STATE, LOCAL AND NONU.S. TAX CONSEQUENCES OFPURCHASING, OWNING AND DISPOSING OF THE SECURITIES IN YOUR PARTICULAR SITUATION.This discussion applies only to those investors that purchase the securities in this offering and that hold the securities as capital assets within the meaningof section 1221 of the Internal Revenue Code of 1986, as amended (the “Code”). This section does not apply to holders that may be subject to special tax rules,including but not limited to:1.dealers in securities or currencies;2.traders in securities that elect to use a marktomarket method of accounting;3.banks, insurance companies or certain financial institutions;4.taxexempt organizations;5.governments or agencies or instrumentalities thereof;6.partnerships or other entities treated as partnerships or other passthrough entities for U.S. federal income tax purposes or persons holding thesecurities through such entities;7.regulated investment companies or real estate investment trusts;8.holders subject to the alternative minimum tax;9.holders that actually or constructively own 10% or more of the total combined voting power of all classes of our shares entitled to vote;10.holders that acquired the securities pursuant to the exercise of employee stock options, in connection with employee stock incentive plans orotherwise as compensation;11.holders that hold the securities as part of a straddle, hedging or conversion transaction; or12.holders whose functional currency is not the U.S. dollar.62This section is based on the Code, its legislative history, existing and proposed U.S. Treasury regulations, published rulings and other administrativeguidance of the U.S. Internal Revenue Service (the “IRS”) and court decisions, all as in effect on the date hereof. These laws are subject to change or differentinterpretation by the IRS or a court, possibly on a retroactive basis.We have not sought, and will not seek, a ruling from the IRS as to any U.S. federal income tax consequence described herein. The IRS may disagree withthe discussion herein, and its determination may be upheld by a court. Moreover, there can be no assurance that future legislation, regulation, administrative rulingsor court decisions will not adversely affect the accuracy of the statements in this discussion.The discussion below of the U.S. federal income tax consequences to “U.S. Holders” will apply to a beneficial owner of the securities that is for U.S. federalincome tax purposes:1.a citizen or resident of the United States;2.a corporation (or other entity treated as a corporation) that is created or organized (or treated as created or3.organized) under the laws of the United States, any state thereof or the District of Columbia;4.an estate whose income is subject to U.S. federal income tax regardless of its source; or5.a trust if (a) a U.S. court can exercise primary supervision over the trust’s administration and one or more U.S.6.persons are authorized to control all substantial decisions of the trust, or (b) if the trust has a valid election in effect under applicable U.S.Treasury regulations to be treated as a U.S. person.If a beneficial owner of the securities is not described as a U.S. Holder and is not an entity treated as a partnership or other passthrough entity for U.S.federal income tax purposes, such owner will be considered a “NonU.S. Holder.” The material U.S. federal income tax consequences applicable specifically to NonU.S. Holders are described below under the heading “Tax Consequences to NonU.S. Holders.”If a partnership (including for this purpose any entity treated as a partnership for U.S. tax purposes) is a beneficial owner of the securities, the U.S. taxtreatment of a partner in the partnership generally will depend on the status of the partner and the activities of the partnership. A holder of the securities that is apartnership or partners in such a partnership should consult their own tax advisors about the U.S. federal income tax consequences of holding and disposing of thesecurities.This discussion assumes that any distributions made (or deemed made) on the securities and any consideration received by a holder in consideration forthe sale or other disposition of the securities will be in U.S. dollars. This discussion also assumes that the representations contained in the Deposit Agreement aretrue and that the obligations in the Deposit Agreement and any related agreement will be complied with in accordance with their terms. Finally, this discussionassumes that each ADS will only represent ordinary shares in us, and will not represent any other type of security, such as a bond, cash or other property.63For U.S. federal income tax purposes, a holder of an ADS will be treated as the beneficial owner of the shares represented by such ADS and an exchange ofan ADS for ordinary shares will not be subject to U.S. federal income tax. The U.S. Treasury has expressed concerns that parties to whom ADSs are prereleased, orintermediaries in the chain of ownership between holders of ADSs and the issuer of the securities underlying the ADSs may be taking actions that are inconsistentwith the claiming of foreign tax credits by U.S. Holders of ADSs. Such actions would also be inconsistent with the claiming of the reduced rate of tax applicable todividends received by certain noncorporate U.S. Holders, including individual U.S. Holders, as described below under “Tax Consequences to U.S.Holders — Taxation of Distributions.” Accordingly, the availability of foreign tax credits or the reduced tax rate for dividends received by certain noncorporate U.S.Holders, including individual U.S. Holders, could be affected by actions taken by parties to whom the ADSs are released, or by future actions by the U.S. Treasury.Tax Consequences to U.S. HoldersTaxation of DistributionsSubject to the passive foreign investment company, or PFIC, rules discussed below, the gross amount of any cash distributions we make with respect to aU.S. Holder in respect of such U.S. Holder’s ADSs or shares will generally be treated as dividend income if the distributions are made from our current oraccumulated earnings and profits, calculated according to U.S. federal income tax principles. Cash dividends will generally be subject to U.S. federal income tax asordinary income on the day the U.S. Holder actually or constructively receives such income. With respect to noncorporate U.S. Holders for taxable years beginningbefore January 1, 2011, dividends may be taxed at the lower applicable longterm capital gains rate provided that (a) our ADSs or shares are readily tradable on anestablished securities market in the United States, or, in the event we are deemed to be a Chinese “resident enterprise” under the EIT Law (as described above under“People’s Republic of China Taxation”), we are eligible for the benefits of the income tax treaty between the United States and the PRC (the “U.S.PRC Tax Treaty”),(b) we are not a PFIC, as discussed below, for either the taxable year in which the dividend was paid or the preceding taxable year, and (c) certain holding periodrequirements are met. Under published IRS authority, ADSs are considered for purposes of clause (a) above to be readily tradable on an established securitiesmarket in the United States only if they are listed on certain exchanges, which presently include the NASDAQ Capital Market. U.S. Holders should consult their owntax advisors regarding the availability of the lower rate for any dividends paid with respect to our ADSs or shares.Dividends will not be eligible for the dividendsreceived deduction allowed to U.S. corporations in respect of dividends received from other U.S.corporations. Generally, if we distribute noncash property as a dividend (other than pro rata distributions of our shares) out of our current or accumulated earningsand profits (as determined for U.S. federal income tax purposes), a U.S. Holder generally will include in income an amount equal to the fair market value of theproperty, on the date that it is distributed.Distributions in excess of current and accumulated earnings and profits, as determined for U.S. federal income tax purposes, will be treated as a nontaxablereturn of capital to the extent of the U.S. Holder’s basis in its shares or ADSs and thereafter as capital gain. However, we do not plan on calculating our earnings andprofits in accordance with U.S. federal income tax principles. U.S. holders therefore should generally assume that any distributions paid by us will be treated asdividends for U.S. federal income tax purposes.If PRC taxes apply to dividends paid by us to a U.S. Holder (see “People’s Republic of China Taxation,” above), such taxes may be treated as foreign taxeseligible for credit against such holder’s U.S. federal income tax liability (subject to certain limitations), and a U.S. Holder may be entitled to certain benefits under theU.S.PRC Tax Treaty. The rules relating to the U.S. foreign tax credit are complex. U.S. Holders should consult their own tax advisors regarding the creditability ofany such PRC tax and their eligibility for the benefits of the U.S.PRC Tax Treaty.64Taxation of Dispositions of SharesSubject to the PFIC rules discussed below, a U.S. holder that sells or otherwise disposes of its shares will recognize capital gain or loss for U.S. federalincome tax purposes equal to the difference between the amount realized and such U.S. Holder’s tax basis in its shares. Prior to January 1, 2011, capital gains of anoncorporate U.S. holder are generally taxed at a maximum rate of 15% where the property is held for more than one year (and 20% thereafter). The ability to deductcapital losses is subject to limitations.If PRC taxes apply to any gain from the disposition of our shares by a U.S. Holder, such taxes may be treated as foreign taxes eligible for credit against suchholder’s U.S. federal income tax liability (subject to certain limitations), and a U.S. Holder may be entitled to certain benefits under the U.S.PRC Tax Treaty. U.S.Holders should consult their own tax advisors regarding the creditability of any such PRC tax and their eligibility for the benefits of the U.S.PRC Tax Treaty.Passive Foreign Investment CompanyWe do not expect to be a PFIC for U.S. federal income tax purposes for our current tax year or in the foreseeable future. The determination of whether or notwe are a PFIC in respect of any of our taxable years is a factual determination that cannot be made until the close of the applicable tax year and that is based on thetypes of income we earn and the value and composition of our assets (including goodwill), all of which are subject to change. Therefore, we can make no assurancesthat we will not be a PFIC in respect of our current taxable year or in the future.In general, we will be a PFIC in any taxable year if either:1.at least 75% of our gross income for the taxable year is passive income; or2.at least 50% of the value, determined on the basis of a quarterly average, of our assets is attributable to assets that produce or are held for theproduction of passive income.Passive income includes dividends, interest, royalties, rents (other than certain rents and royalties derived in the active conduct of a trade or business), theexcess of gains over losses from certain types of transactions in commodities, annuities and gains from assets that produce passive income. We will be treated asowning our proportionate share of the assets and earning our proportionate share of the income of any corporation in which we own, directly or indirectly, at least25% (by value) of the stock.If we are treated as a PFIC in any year during which a U.S. Holder owns the securities, and such U.S. Holder did not make a marktomarket election, asdescribed below, the U.S. Holder will be subject to special rules with respect to:1.any gain recognized by the U.S. Holder on the sale or other disposition of its shares; and any excess distribution that we make to the U.S. Holder(generally, the excess of the amount of any distributions to such U.S. Holder during a single taxable year of such U.S. Holder over 125% of theaverage annual distributions received by such U.S. Holder in respect of the shares during the three preceding taxable years of such U.S. Holder or,if shorter, such U.S. Holder holding period for the shares).Under these rules:2.the gain or excess distribution will be allocated ratably over the U.S. Holder’s holding period for the shares;3.the amount allocated to the U.S. Holder’s taxable year in which it realized the gain or excess distribution or to the period in the U.S. Holder’sholding period before the first day of our first taxable year in which we are a PFIC will be taxed as ordinary income;4.the amount allocated to other taxable years (or portions thereof) of the U.S. Holder and included in its holding period will be taxed at the highesttax rate in effect for that year; and5.the interest charge generally applicable to underpayments of tax will be imposed in respect of the tax attributable to each such other taxable yearof the U.S. Holder. 6.Special rules apply for calculating the amount of the foreign tax credit with respect to excess distributions by a PFIC.65Alternatively, if a U.S. Holder, at the close of its taxable year, owns ordinary shares in a PFIC that are treated as marketable stock, the U.S. Holder may makea marktomarket election with respect to such shares for such taxable year. Our shares will be “marketable” to the extent that they remain regularly traded on anational securities exchange, such as the NASDAQ Capital Market. If a U.S. Holder makes this election in a timely fashion, it will not be subject to the PFIC rulesdescribed above. Instead, in general, the U.S. Holder will include as ordinary income each year the excess, if any, of the fair market value of its shares at the end ofthe taxable year over its adjusted basis in its shares. Any ordinary income resulting from this election would generally be taxed at ordinary income tax rates andwould not be eligible for the reduced rate of tax applicable to qualified dividend income. The U.S. Holder will also be allowed to take an ordinary loss in respect ofthe excess, if any, of the adjusted basis of its shares over the fair market value at the end of the taxable year (but only to the extent of the net amount of previouslyincluded income as a result of the marktomarket election). The U.S. Holder’s basis in the shares will be adjusted to reflect any such income or loss amounts. U.S.Holders should consult their own tax advisor regarding potential advantages and disadvantages of making a marktomarket election with respect to their shares.Alternatively, a U.S. Holder of stock in a PFIC may avoid the PFIC tax consequences described above in respect to our or shares by making a timely“qualified electing fund” election to include in income its pro rata share of our net capital gains (as longterm capital gain) and other earnings and profits (asordinary income), on a current basis, in each case whether or not distributed, in the taxable year of the U.S. Holder in which or with which our taxable year ends.However, the qualified electing fund election is available only if the PFIC provides such U.S. Holder with certain information regarding its earnings and profits asrequired under applicable U.S. Treasury regulations. We do not intend to furnish the information that a U.S. Holder would need in order to make a qualified electingfund election. Therefore, U.S. Holders will not be able to make or maintain such election with respect to their or shares.If a U.S. Holder owns our shares or during any year that we are a PFIC, such holder must file U.S. Internal Revenue Service Form 8621 regarding suchholder’s shares or and the gain realized on the disposition of the shares. The reduced tax rate for dividend income, discussed in “Taxation of Distributions,” is notapplicable to dividends paid by a PFIC. U.S. Holders should consult with their own tax advisors regarding reporting requirements with respect to their shares.Tax Consequences to NonU.S. HoldersDividends paid to a NonU.S. Holder in respect of our or shares generally will not be subject to U.S. federal income tax, unless the dividends are effectivelyconnected with the NonU.S. Holder’s conduct of a trade or business within the United States (and, if required by an applicable income tax treaty, are attributable toa permanent establishment or fixed base that such holder maintains in the United States).In addition, a NonU.S. Holder generally will not be subject to U.S. federal income tax on any gain attributable to a sale or other disposition of our or sharesunless such gain is effectively connected with its conduct of a trade or business in the United States (and, if required by an applicable income tax treaty, isattributable to a permanent establishment or fixed base that such holder maintains in the United States) or the NonU.S. Holder is an individual who is present in theUnited States for 183 days or more in the taxable year of sale or other disposition and certain other conditions are met (in which case, such gain from United Statessources generally is subject to tax at a 30% rate or a lower applicable tax treaty rate).Dividends and gains that are effectively connected with the NonU.S. Holder’s conduct of a trade or business in the United States (and, if required by anapplicable income tax treaty, are attributable to a permanent establishment or fixed base in the United States) generally will be subject to tax in the same manner as fora U.S. Holder and, in the case of a NonU.S. Holder that is a corporation for U.S. federal income tax purposes, may also be subject to an additional branch profits taxat a 30% rate or a lower applicable tax treaty rate.66Information Reporting and Backup Withholding In general, information reporting for U.S. federal income tax purposes generally should apply to distributions made on the securities within the UnitedStates to a noncorporate U.S. Holder and to the proceeds from sales and other dispositions of the securities by a noncorporate U.S. Holder to or through a U.S.office of a broker. Payments made (and sales and other dispositions effected at an office) outside the United States generally should be subject to informationreporting in limited circumstances.Dividend payments made to U.S. Holders and proceeds paid from the sale or other disposition the securities may be subject to information reporting to theIRS and possible U.S. federal backup withholding at a current rate of 28%. Certain exempt recipients, such as corporations, are not subject to these informationreporting requirements. Backup withholding will not apply to a U.S. Holder who furnishes a correct taxpayer identification number and makes any other requiredcertification, or who is otherwise exempt from backup withholding. U.S. Holders who are required to establish their exempt status must provide a duly executed IRSForm W9.A NonU.S. Holder generally may eliminate the requirement for information reporting and backup withholding by providing certification of its foreignstatus, under penalties of perjury, on a duly executed applicable IRS Form W8 or by otherwise establishing an exemption.Backup withholding is not an additional tax. Rather, the amount of any backup withholding will be allowed as a credit against a U.S. Holder’s or a nonU.S.Holder’s U.S. federal income tax liability and may entitle such holder to a refund, provided that certain required information is timely furnished to the IRS.PROSPECTIVE PURCHASERS OF OUR SECURITIES SHOULD CONSULT WITH THEIR OWN TAX ADVISORS REGARDING THE APPLICATION OFTHE U.S. FEDERAL INCOME TAX LAWS TO THEIR PARTICULAR SITUATIONS AS WELL AS ANY ADDITIONAL TAX CONSEQUENCES RESULTING FROMPURCHASING, HOLDING OR DISPOSING OF OUR SECURITIES, INCLUDING THE APPLICABILITY AND EFFECT OF THE TAX LAWS OF ANY STATE, LOCALOR NONU.S. JURISDICTION, INCLUDING ESTATE, GIFT, AND INHERITANCE LAWS AND APPLICABLE TAX TREATIES.F. DIVIDENDS AND PAYING AGENTS.Not applicable.G. STATEMENT BY EXPERTS.None.H. DOCUMENTS ON DISPLAY.We previously filed a registration statement on Form F1 (File No. 333166056) with the SEC relating to our initial public offering in May 2010. This transition reportdoes not contain all of the information in the registration statement and the exhibits and financial statements included with the registration statement. References inthis transition report to any of our contracts, agreements or other documents are not necessarily complete, and you should refer to the exhibits attached to theregistration statement for copies of the actual contracts, agreements or documents. In addition, we will file transition reports on Form 20F and submit otherinformation under cover of Form 6K. As a foreign private issuer, we are exempt from the proxy requirements of Section 14 of the Exchange Act and our officers,directors and principal shareholders will be exempt from the insider shortswing disclosure and profit recovery rules of Section 16 of the Exchange Act. You may readand copy the registration statement, the related exhibits and other materials we file with the SEC at the SEC's public reference room in Washington, D.C. at 100 FStreet, Room 1580, N.E., Washington, D.C.20549. You can also request copies of those documents, upon payment of a duplicating fee, by writing to the SEC. Pleasecall the SEC at 1800SEC0330 for further information on the operation of the public reference rooms. The SEC also maintains an Internet site that contains reports,proxy and information statements and other information regarding issuers that file with the SEC. The website address is http://www.sec.gov. You may also request acopy of these filings, at no cost, by writing us at LAB 32, SOHO 3Q, No 9, Guanghua Road, Chaoyang District, Beijing, People’s Republic of China, 100020 ortelephoning us at (86) 1085866721.67I. SUBSIDIARY INFORMATIONFor a listing of our subsidiaries, see “Item 4. Information on the Company – C. Organizational Structure.”ITEM 11. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.Interest Rate RiskAs of December 31, 2017, we had no shortterm or longterm borrowings. If we borrow money in future periods, we may be exposed to interest rate risk. Ourexposure to market risk for changes in interest rates relates primarily to the interest income generated by our cash deposits with our banks and heldtomaturityinvestments. We have not used any derivative financial instruments in our investment portfolio. Interest earnings instruments carry a degree of interest rate risk. Wehave not been exposed, nor do we anticipate being exposed to material risks due to changes in interest rates. However, our future interest income may fall short ofexpectations due to changes in interest rates. Foreign Exchange RiskTranslation adjustments amounted to $90,671 and $387,375 gain as of the fiscal year ended December 31, 2017 and 2016, respectively. The Companytranslated balance sheet amounts with the exception of equity at December 31, 2017 at RMB 6.5342 to $1.00 as compared to RMB 6.9370 to $1.00 at December 31,2016. The Company stated equity accounts at their historical rate. The average translation rates applied to income statement accounts for the fiscal year endedDecember 31, 2017 and 2016 were RMB6.7356 and RMB 6.7153 to US$1.00, respectively. So far, the PRC government has been able to manage a stable exchange ratebetween RMB and the U.S. Dollar. Our future downward translation adjustments may occur and can be significant due to changes in such exchange rate.If we decide to convert our RMB into U.S. dollars for the purpose of making payments for dividends on our ordinary shares or for other business purposes,appreciation of the U.S. dollar against the RMB would have a negative effect on the U.S. dollar amount available to us.The PRC government imposes strict restrictions on PRC resident companies regarding converting RMB into foreign currencies and vice versa under capitalaccount transactions, such as receiving equity investments from outside of the PRC, making equity investments outside of the PRC, borrowing money from orlending money outside of the PRC, and repaying debt or remitting liquidated assets and/or accumulated profits outside of the PRC. These transactions have to beapproved by the relevant PRC government authorities, including but not limited to the commerce bureau, the tax bureau and the State Administration of ForeignExchange, or SAFE, and have to be conducted at banks entrusted by the local SAFE branch. As our business continues to grow, we may need to continuouslyfinance our PRC subsidiaries by raising capital from outside of the PRC. The restriction on converting RMB into foreign currencies, and vice versa, may limit ourability to use capital resources from outside of the PRC. Such restrictions may also limit our ability to remit profits from our PRC subsidiaries outside of the PRC,therefore potentially limiting our ability to pay dividends to our shareholders. In addition, such restrictions will limit our ability to freely transfer temporary excesscash in our or our subsidiaries’ bank accounts in and out of the PRC, therefore limiting our ability to conduct crossborder cash management activities to optimizethe utilization of our cash.InflationAlthough China has experienced an increasing inflation rate, inflation has not had a material impact on our results of operations in recent years. Accordingto the National Bureau of Statistics of China, the change in the consumer price index in China was 0.46%, (0.77%), and 1.16% in 2001, 2002 and 2003, respectively.However, in connection with a 3.9% increase in 2004, the PRC government announced measures to restrict lending and investment in China in order to reduceinflationary pressures in China’s economy. Following the government’s actions, the consumer price index decreased to 1.8% in 2005 and to 1.5% in 2006. In 2007, theconsumer price index increased to 4.8%. In response, China’s central bank, the People’s Bank of China, announced that the bank reserve ratio would rise half apercentage point to 15.5% in an effort to reduce inflation pressures. China’s consumer price index growth rate reached 8.7% year over year in 2008. In 2009 and 2010,the change in the consumer price index in China was minus 0.7% and 3.3%.China consumer price index in November 2017 was 3.8% higher than that of the same period in 2016. China consumer price index in December 2016 was2.4% higher than that of the same period in 2015. China consumer price index in December 2015 was 4.8% higher than that of the same period in 2014. Chinaconsumer price index in December 2014 was 3.3% higher than that of the same period in 2013. The results of the PRC government’s actions to combat inflation aredifficult to predict. Adverse changes in the Chinese economy, if any, will likely impact the financial performance of a variety of industries in China that use, or wouldbe candidates to use, our software products and services.68ITEM 12. DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES.A. DEBT SECURITIES.Not applicable. B. WARRANTS AND RIGHTS.Not applicable.C. OTHER SECURITIES.Not applicable.D. AMERICAN DEPOSITARY SHARES.The Bank of New York Mellon, as depositary (the “Depositary”) for the Company’s ADR facility, notified the owners and holders of the Company’s ADSsthat the ADS facility will terminate effective at 5:00 p.m. (Eastern Time) on September 19, 2018. Under the terms of the Deposit Agreement among the Company, theDepositary and the owners and holders of ADSs of the Company (the “Deposit Agreement”), owners and holders of the Company’s ADSs have until at leastJanuary 21, 2019 to surrender their ADSs to the Depositary for delivery of the underlying ordinary shares of the Company. Subsequent to January 21, 2019, underthe terms of the Deposit Agreement, the Depositary may attempt to sell any ordinary shares remaining on deposit with the Depositary. If the Depositary sells suchunderlying ordinary shares or receives value for such shares, holders must surrender their ADSs to obtain payment of the sale proceeds, net of expenses andapplicable tax and charges. We completed the voluntary delisting of our ADSs from the NASDAQ Capital Market on September 19, 2018.You may hold ADSs either (A) directly (i) by having ADSs registered in your name in the Direct Registration System, or (ii) by having an Americandepositary receipt, also referred to as an ADR, which is a certificate evidencing a specific number of ADSs, registered in your name, or (B) indirectly by holding asecurity entitlement in ADSs through your broker or other financial institution. If you hold ADSs directly, you are a registered ADS holder, also referred to as anADS holder. This description assumes you are an ADS holder. If you hold the ADSs indirectly, you must rely on the procedures of your broker or other financialinstitution to assert the rights of ADS holders described in this section. You should consult with your broker or financial institution to find out what thoseprocedures are.The Direct Registration System, or DRS, is a system administered by The Depository Trust Company, also referred to as DTC, pursuant to which thedepositary may register the ownership of uncertificated ADSs, which ownership will be confirmed by periodic statements sent by the depositary to the registeredholders of uncertificated ADSs.69As an ADS holder, you will not be treated as one of our registered shareholders and you will not have direct shareholder rights. British Virgin Island’s lawgoverns our direct shareholders’ rights. The depositary will be the holder of the shares underlying your ADSs. As a registered holder of ADSs, you will have ADSholder rights. A Deposit Agreement among us, the depositary and you, as an ADS holder, and all other persons indirectly holding ADSs, sets out ADS holder rightsas well as the rights and obligations of the depositary. New York law governs the Deposit Agreement and the ADSs.The following is a summary of the material provisions of the Deposit Agreement. For more complete information, you should read the entire DepositAgreement and the form of ADS, which contains the terms of the ADSs. The Deposit Agreement is filed as an exhibit to our registration statement filed on Form F1.You may obtain the registration statement and the attached Deposit Agreement from the SEC’s website at http://www.sec.gov. You may also obtain a copy of theDeposit Agreement at the SEC’s Public Reference Room, which is located at 100 F Street, NE, Washington, DC 20549. You may obtain information on the operationof the Public Reference Room by calling the SEC at 18007320330. Fees and ExpensesPersons depositing or withdrawing shares or ADS holders must pay:For:$5.00 (or less) per 100 ADSs (or portion of 100 ADSs)Issuance of ADSs, including issuances resulting from a distribution of shares orrights or other propertyCancellation of ADSs for the purpose of withdrawal, including if the DepositAgreement terminates$.05 (or less) per ADSAny cash distribution to ADS holdersA fee equivalent to the fee that would be payable if securities distributed to youhad been shares and the shares had been deposited for issuance of ADSsDistribution of securities distributed to holders of deposited securities whichare distributed by the depositary to ADS holders$.05 (or less) per ADSs per calendar yearDepositary servicesRegistration or transfer feesTransfer and registration of shares on our share register to or from the name ofthe depositary or its agent when you deposit or withdraw sharesExpenses of the depositaryCable, telex and facsimile transmissions (when expressly provided in the DepositAgreement) converting foreign currency to U.S. dollarsTaxes and other governmental charges the depositary or the custodian have topay on any ADS or share underlying an ADS, for example, share transfer taxes,stamp duty or withholding taxesAs necessaryAny charges incurred by the depositary or its agents for servicing the depositedsecuritiesAs necessaryPayment of TaxesHolders of our ADSs are responsible for any taxes or other governmental charges payable on their ADSs or on the deposited securities represented by anyof their ADSs. The depositary may refuse to register any transfer of a holder’s ADSs or allow withdrawal of the deposited securities represented by the ADSs untilsuch taxes or other charges are paid. It may apply payments owed to the holder or sell deposited securities represented by the ADSs to pay any taxes owed and theholder will remain liable for any deficiency. If the depositary sells deposited securities, it will, if appropriate, reduce the number of ADSs to reflect the sale and pay toADS holders any proceeds, or send to ADS holders any property, remaining after it has paid the taxes.70PART IIITEM 13. DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES.None.ITEM 14. MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS.Use of Proceeds.We completed our initial public offering on May 14, 2010 (the “IPO”), which generated net proceeds of approximately $14.6 million. All remaining cash onhand from the proceeds of our IPO was transferred to C Media Limited and its subsidiaries following the completion of the asset exchange transactions on August17, 2018.ITEM 15. CONTROLS AND PROCEDURES.Disclosure Controls and ProceduresOur Chief Executive Officer and Chief Financial Officer have reviewed and evaluated the effectiveness of our disclosure controls and procedures, whichincluded inquiries made to certain other of our employees. The term “disclosure controls and procedures,” as defined in Rules 13a15(e) and 15d15(e) under theExchange Act, means controls and other procedures of a company that are designed to ensure that information required to be disclosed by a company in thereports, such as this report, that it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in theSEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to bedisclosed by a company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the company’s management, including itsprincipal executive and principal financial officers, as appropriate to allow timely decisions regarding required disclosure. Management recognizes that any controlsand procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives and management necessarilyapplies its judgment in evaluating the costbenefit relationship of possible controls and procedures. Based on that evaluation, our Chief Executive Officer and ChiefFinancial Officer have each concluded that, as of December 31, 2017, the Company’s disclosure controls and procedures were not effective due to the materialweakness described in the “Management’s Report on Internal Control over Financial Reporting” section below.Management’s Report on Internal Control Over Financial ReportingOur management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Exchange ActRules 13a15(f) and 15d15(f). Internal control over financial reporting refers to the process designed by, or under the supervision of, our principal executive officerand principal financial officer, and effected by our Board of Directors, management and other personnel, to provide reasonable assurance regarding the reliability offinancial reporting and the preparation of financial statements for external purposes in accordance with U.S. GAAP and includes those policies and procedures that(i) pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of the assets of the Company; (ii)provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with U.S. GAAP, and thatreceipts and expenditures of the Company are being made only in accordance with authorizations of management and directors of the Company; and (iii) providereasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the Company’s assets that could have a materialeffect on the financial statements.71Any system of internal control, no matter how well designed, has inherent limitations. Therefore, even those systems determined to be effective canprovide only reasonable assurance with respect to financial statement preparation and presentation. Because of the inherent limitations of internal control, there is arisk that material misstatements may not be prevented or detected on a timely basis by internal control over financial reporting. However, these inherent limitationsare known features of the financial reporting process. Therefore, it is possible to design into the process safeguards to reduce, though not eliminate, this risk.Management assessed our internal control over financial reporting as of the year ended December 31, 2017. In making this assessment, management usedthe criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in the 2014 report entitled "Internal ControlIntegratedFramework." The COSO framework summarizes each of the components of a company’s internal control system, including (i) the control environment, (ii) riskassessment, (iii) control activities, (iv) information and communication, and (v) monitoring. Based on such assessment, management concluded that its internalcontrol over financial reporting as of December 31, 2017 was not effective because of the following material weakness:Lack of U.S. GAAP expertise. Although our accounting personnel are professional and experienced in accounting requirements and procedures generallyaccepted in the PRC, they do not have sufficient knowledge, experience and training in maintaining our books and records and preparing financial statements inaccordance with U.S. GAAP standards and SEC rules and regulations. The staff needs additional training to become experienced in U.S. GAAPbased reporting,including the skills of U.S. GAAPbased period end closing, consolidation of financial statements, and U.S. GAAP conversion.In order to address the above material weakness, our management plans to take the following steps:We will employ, as needed, outside professionals to provide key accounting personnel ongoing technical trainings to ensure their proper understanding ofU.S. GAAP and newly announced accounting standards.The Company believes the foregoing measures will remediate the identified material weakness in future periods. The Company is committed to monitoringthe effectiveness of these measures and making any changes that are necessary and appropriate.Notwithstanding the conclusion that its internal control over financial reporting was not effective as of the end of the period covered by this report, ourChief Executive Officer and Chief Financial Officer believe that the financial statements and other information contained in this report present fairly, in all materialrespects, its business, financial condition and results of operations. Nothing has come to the attention of management that causes them to believe that any materialinaccuracies or errors exist in the Company’s financial statements as of December 31, 2017.Attestation report of the registered public accounting firm.This transition report does not include an attestation report of the Company’s registered public accounting firm on internal control over financial reportingbecause the Company is a nonaccelerated filer permanently exempted from section 404(b) of the SarbanesOxley Act.Changes in Internal Control over Financial ReportingThere were no changes in the Company’s internal control over financial reporting that occurred during our fiscal year ended December 31, 2017 that hasmaterially affected or is reasonably likely to materially affect our internal control over financial reporting.ITEM 16. [RESERVED]ITEM 16A. AUDIT COMMITTEE FINANCIAL EXPERT.Our board of directors has determined that Mr. Dennis Galgano qualifies as an audit committee financial expert. Our board of directors has determined thatMessrs. Dennis Galgano, Jin Shi, Jiming Ha and Zhihao Xu meet the definition of an “independent director” under the applicable NASDAQ Rules and under Rule10A3 of the Securities Exchange Act of 1934, as amended.72ITEM 16B. CODE OF ETHICS.Our board of directors has adopted a code of business conduct and ethics applicable to our directors, officers and employees. We have posted the code onour website at http://www.luokung.com.ITEM 16C. PRINCIPAL ACCOUNTANT FEES AND SERVICES.Audit FeesThe aggregate fees billed by Moore Stephens CPA Limited for professional services rendered for the audit of our financial information disclosed in thistransition report on Form 20F was $280,000 for the two years ended December 31, 2017 and 2016.The aggregate fees billed by our previous auditor, BDO China Shu Lun Pan Certified Public Accountants LLP for professional services rendered for theaudit of our annual financial information included in our annual reports on Form 20F was $105,500 for each of the fiscal years ended September 30, 2017, 2016 and2015.Tax FeesWe did not engage our principal accountants to provide tax or related services during the last two fiscal years.All Other FeesWe did not engage our principal accountants to render services to us during the last two fiscal years, other than as reported above.ITEM 16D. EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES.Not applicable.ITEM 16E. PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS.Not applicable.ITEM 16F. CHANGE IN REGISTRANT’S CERTIFYING ACCOUNTANT.Not applicable.ITEM 16G. CORPORATE GOVERNANCE.We are incorporated in the BVI and our corporate governance practices are governed by applicable BVI law as well as our memorandum and articles ofassociation. In addition, because our ADSs are listed on NASDAQ, we are subject to NASDAQ’s corporate governance requirements. NASDAQ Listing Rule5620(a) requires each issuer to hold an annual meeting of shareholders no later than one year after the end of the issuer’s fiscal year end. However, NASDAQ ListingRule 5615(a)(3) permits a foreign private issuer like us to follow home country practices in lieu of certain requirements of Listing Rule 5600, provided that suchforeign private issuer discloses in its transition report filed with the SEC each requirement of Rule 5600 that it does not follow and describes the home countrypractice followed in lieu of such requirement. We follow home country practice with respect to annual meetings and did not hold an annual shareholder meeting inthe year ended December 31, 2017. We may, however, hold annual shareholder meetings in the future if there are significant issues that require shareholders’approvals.ITEM 16H. MINE SAFETY DISCLOSURE.Not applicable.73PART IIIITEM 17. FINANCIAL STATEMENTS.We have elected to provide financial statements and related information specified in Item 18.ITEM 18. FINANCIAL STATEMENTS.See “Index to Consolidated Financial Statements” for a list of all financial statements filed as part of this transition report. The Financial Statements arebeginning on page F1.ITEM 19. EXHIBITS.See the Exhibit Index following the signature page of this report, which is incorporated herein by reference.74SIGNATURESThe registrant hereby certifies that it meets all of the requirements for filing on Form 20F and that it has duly caused and authorized the undersigned tosign this transition report on its behalf.LUOKUNG TECHNOLOGY CORP.By:/s/ Xuesong Song Xuesong SongChief Executive Officer(principal executive officer)October 12, 201875EXHIBIT INDEXThe following documents are filed as part of this transition report on Form 20F.ExhibitNumberDescription1.1Amended and Restated Memorandum of Association and Articles of Association of Luokung Technology Corp., dated August 20, 2018, and ascurrently in effect.2.1*Deposit Agreement among the Company, depositary and holders of the American Depositary Receipts.2.2*Form of American Depositary Receipt.2.3*English translation of Entrusted Management Agreement dated December 15, 2009 between Xi’an Softech Co., Ltd., Xi’an Kingtone InformationTechnology Co., Ltd. and the shareholders of Xi’an Kingtone Information Technology Co., Ltd.3.1*English translation of Shareholder’s Voting Proxy Agreement dated December 15, 2009 between Xi’an Softech Co., Ltd., Xi’an Kingtone InformationTechnology Co., Ltd. and the shareholders of Xi’an Kingtone Information Technology Co., Ltd.4.1*English translation of Exclusive Technology Service Agreement dated December 15, 2009 between Xi’an Softech Co., Ltd. and Xi’an KingtoneInformation Technology Co., Ltd.4.2*English translation of Exclusive Option Agreement dated December 15, 2009 between Xi’an Softech Co., Ltd., Xi’an Kingtone InformationTechnology Co., Ltd. and the shareholders of Xi’an Kingtone Information Technology Co., Ltd.4.3*English translation of Equity Pledge Agreement dated December 15, 2009 between Xi’an Softech Co., Ltd., Xi’an Kingtone Information TechnologyCo., Ltd. and the shareholders of Xi’an Kingtone Information Technology Co., Ltd.4.4*English translation of Loan Agreement dated September 14, 2009 between Xi’an Kingtone Information Technology Co., Ltd. and Xian CityCommercial Bank.4.5*English translation of Mortgage Agreement dated September 14, 2009 between Xi’an Kingtone Information Technology Co., Ltd. and Xian CityCommercial Bank.4.6*English translation of Form of Employment Agreement entered into between the Company and the Company’s executive officers.4.7*2010 Omnibus Incentive Plan of the Company.4.8**English translation of Project Construction Contract dated August 10, 2010 between Xi’an Hu County Yuxing Agriculture Science & TechnologyCo., Ltd. and Xi’an Kingtone Information Technology Co., Ltd.4.9***Asset Exchange Agreement by and between C Media Limited and the Company dated as of January 25, 2018.4.10***Securities Purchase Agreement by and among Redstone YYL Management Limited and five shareholders holding majority of the shares of theCompany dated as of January 25, 2018.4.15Exclusive Business Cooperation Agreement by and between Zhongchuan Tianxia Information Technology (Shenzhen) Co., Ltd., and Beijing MobileVision Technology Co., Ltd., dated August 31, 2015.764.16Exclusive Option Agreement by and among Zhongchuan Tianxia Information Technology (Shenzhen) Co., Ltd., Xuesong Song, Weili Chen, PingWang, Donglai Liu, and Beijing Mobile Vision Technology Co., Ltd., dated August 31, 2015.4.17Equity Interest Pledge Agreement by and among Zhongchuan Tianxia Information Technology (Shenzhen) Co., Ltd., Xuesong Song, Weili Chen, PingWang, Donglai Liu, and Beijing Mobile Vision Technology Co., Ltd., dated August 31, 2015.4.18Addendum to Asset Exchange Agreement by and among the Company, Topsky Infotech Holdings Pte Ltd. and C Media Limited, dated October 3,2018. Incorporated by reference to the Company’s Current Report on Form 6K filed on October 4, 2018.4.19Stock Purchase Agreement, dated August 25, 2018, by and among the Company, LK Technology Ltd., and the shareholders listedtherein. Incorporated by reference to the Company’s Current Report on Form 6K filed on August 27, 2018.4.20Power of Attorney by Weili Chen, dated August 31, 2015.4.21Power of Attorney by Ping Wang, dated August 31, 2015.4.22Power of Attorney by Donglai Liu, dated August 31, 2015.4.23Power of Attorney by Xuesong Song, dated August 31, 2015.8.1List of Subsidiaries and Consolidated Variable Interest Entities10.1Employment Agreement, dated August 19, 2018, between Luokung Technology Corp. and Xuesong Song.†10.2Employment Agreement, dated August 19, 2018, by and between Luokung Technology Corp. and Jie Yu.†12.1Certification of Chief Executive Officer required by Rule 13a14(a).12.2Certification of Chief Financial Officer required by Rule 13a14(a).13.1Certification of Chief Executive Officer required by Rule 13a14(a).13.2Certification of Chief Financial Officer required by Rule 13a14(a).101.INSXBRL Instance Document.101.SCHXBRL Taxonomy Extension Schema Document.101.CALXBRL Taxonomy Extension Calculation Linkbase Document.101.DEFXBRL Taxonomy Extension Definition Linkbase Document.101.LABXBRL Taxonomy Extension Label Linkbase Document.101.PREXBRL Taxonomy Extension Presentation Linkbase Document.*Previously filed as an exhibit to the Company’s Registration Statement on Form F1 (Reg. No. 333166056) filed with the Commission and incorporated hereinby reference.**Previously filed as exhibits to the Company’s Transition Report on Form 20F filed with the Commission on January 20, 2011 and incorporated herein byreference.***Previously filed as exhibits to the Company’s Annual Report on Form 20F filed with the Commission on February 9, 2018 and incorporated herein byreference.†Indicates management contract or compensatory plan, contract or arrangement.77LK Technology Ltd. and SubsidiariesCONSOLIDATED FINANCIAL STATEMENTSTABLE OF CONTENTSPage(s)Report of Independent Registered Public Accounting FirmF2Consolidated Financial StatementsConsolidated Balance SheetsF3Consolidated Statements of Operations and Comprehensive LossF4application.Chuang (Vincent) Tao was appointed as a member of the Board effective on August 25, 2018. Dr. Tao was the Chairman of SuperEngine Suzhou from 2014to 2017. Dr. Tao has been the president of the Seasky Angel Investment Alliance of Shanghai since 2015. Dr. Tao received his Bachelor Degree of geographicinformation and telemetry from Wuhan University in China in 1990 and received his Ph.D. from University of Calgary, Canada in 1997.Dennis Galgano was appointed as a director of the Company following the consummation of the asset exchange agreement. He was a registered consultantwith Morgan Joseph Triartisan LLC from November 2016 until October 2017, and previously served as vice chairman and head of international investment bankingfor Morgan Joseph Triartisan LLC, which is a registered broker dealer engaged in the investment banking and financial advisory industry. Mr. Galgano received aB.S. degree in Chemistry from St. John’s University and an M.B.A. from The Wharton School in 1972.Jin Shi was appointed as a director of the Company following the consummation of the asset exchange transactions. Mr. Shi has served as the managingpartner of Chum Capital Group, a merchant bank focused on helping Chinese growth companies to access global capital, since January 2013. Mr. Shi has also servedas a director of Seven Stars Cloud Group, Inc. (NASDAQ: SSC), a premium video on demand service provider, since January 2014, and joined the audit committee ofits board of directors in March 2016. He also served as a director and member of the audit committee of Pingtan Marine Enterprise, Ltd. (NASDAQ: PME), a marineenterprise group primarily engaged in ocean fishing through its subsidiaries. Mr. Shi received an EMBA degree from the Guanghua Management School of BeijingUniversity, and a Bachelor’s degree of science in Chemical Engineering from Tianjin University.Jiming Ha was appointed as a director of the Company following the consummation of the asset exchange agreement, and has also served as a seniorresearch fellow for the China Finance 40 Forum since March 1, 2018, and previously served as a managing director of Goldman Sachs from January 2017 to April2017. Mr. Ha served as a vice chairman and chief investment strategist of the Investment Strategy Group for Private Wealth Management at Goldman Sachs from2010 to January 2017. Mr. Ha holds a PhD in Economics from the University of Kansas and Master’s and Bachelor’s degrees of science from Fudan University.Zhihao Xu was appointed as a director of the Company following the consummation of the asset exchange transactions. Mr. Xu has served as the chiefexecutive officer of Geely Group Co., Ltd., in Hangzhou, China, since December 2017, and previously served as the chairman and chief executive officer of BeijingDingchengrenhe Investment Co., Ltd., a funds management company, from January 2017 to December 2017. Mr. Xu served as the chairman of president of HNAUSOLV CO., LTD., and the chief innovation officer of HNA Logistics Group from January 2014 to December 2016, and prior to that as the chairman of GopayInnovation Technology Co. Ltd., an online payment system operator supporting online money transfers, from April 2012 to January 2014. Mr. Xu graduated from theBusiness School of Renmin University of China and from the Wudaokou Finance College of Tsinghua University with a fund qualification certificate and securitiesqualification certificate.B. COMPENSATION.Compensation of Directors and Executive OfficersFor the ninemonth transition period ended September 30, 2018 and the fiscal year ended December 31, 2017, we did not pay any cash compensation to ourexecutive officers of LK Technology Ltd. and a to our directors for serving on our board of directors of LK Technology Ltd.37Other than nonemployee directors, we do not intend to compensate directors for serving on our board of directors or any of its committees. We do,however, intend to reimburse each member of our board of directors for outofpocket expenses incurred by each director in connection with attending meetings ofthe board of directors and its committees.AdministrationThe Incentive Plan is administered by our board of directors, or at the discretion of the board, by our compensation committee. Our board of directors hasdelegated authority to our compensation committee to administer the Incentive Plan. Subject to the terms of the Incentive Plan, the compensation committee mayselect participants to receive awards, determine the types of awards and terms and conditions of awards, and interpret provisions of the Incentive Plan.The ordinary shares issued or to be issued under the Incentive Plan consist of authorized but unissued shares. If any ordinary shares covered by an awardare not purchased or are forfeited, or if an award otherwise terminates without delivery of any ordinary shares, then the number of ordinary shares counted againstthe aggregate number of ordinary shares available under the plan with respect to the award will, to the extent of any such forfeiture or termination, again be availablefor making awards under the Incentive Plan.EligibilityAwards may be made under the Incentive Plan to our employees, officers, directors, consultants or advisers or to any of our affiliates, and to any otherindividual whose participation in the Incentive Plan is determined to be in our best interests by our board of directors.Amendment or Termination of the PlanOur board of directors may terminate or amend the Incentive Plan at any time and for any reason. No amendment, however, may adversely impair the rightsof grantees with respect to outstanding awards. The Incentive Plan has a term of ten years. Amendments will be submitted for shareholder approval to the extentrequired by applicable stock exchange listing requirements or other applicable laws.OptionsThe Incentive Plan permits the granting of options to purchase ordinary shares intended to qualify as incentive share options under the Internal RevenueCode and share options that do not qualify as incentive share options, or nonqualified share options.The exercise price of each share option may not be less than 100% of the fair market value of our ADSs representing ordinary shares on the date of grant.In the case of certain 10% shareholders who receive incentive share options, the exercise price may not be less than 110% of the fair market value of our ADSsrepresenting ordinary shares on the date of grant. An exception to these requirements is made for options that we grant in substitution for options held byemployees of companies that we acquire. In such a case the exercise price is adjusted to preserve the economic value of the employee’s share option from his or herformer employer.The term of each share option is fixed by the compensation committee and may not exceed ten years from the date of grant. The compensation committeedetermines at what time or times each option may be exercised and the period of time, if any, after retirement, death, disability or termination of employment duringwhich options may be exercised.Options may be made exercisable in installments. The award agreement provides the vesting of the options. Exercisability of options may be accelerated bythe compensation committee.38In general, an optionee may pay the exercise price of an option by (1) cash or check (in U.S. dollars or Renminbi or other local currency as approved by thecompensation committee), (2) ordinary shares held for such period of time as may be required by the compensation committee, (3) delivery of a notice of a marketorder with a broker with respect to ordinary shares then issuable upon exercise of an option, and that the broker has been directed to pay us a sufficient portion ofnet proceeds of the sale in satisfaction of the exercise price, provided that payment of such proceeds is then made to us upon settlement of such sale, (4) otherproperty acceptable to the compensation committee with a fair market value equal to the exercise price, (5) cashless exercise or (6) any combination of the foregoing.Share options granted under the Incentive Plan may not be sold, transferred, pledged, or assigned other than by will or under applicable laws of descentand distribution. However, we may permit limited transfers of nonqualified options for the benefit of immediate family members of grantees to help with estateplanning concerns or pursuant to a domestic relations order in settlement of marital property rights.Other AwardsThe compensation committee may also award under the Incentive Plan:1.ordinary shares subject to restrictions;2.deferred ordinary shares, credited as deferred ordinary share units, but ultimately payable in the form of unrestricted ordinary shares inaccordance with the terms of the grant or with the participant’s deferral election;3.ordinary share units subject to restrictions;4.unrestricted ordinary shares, which are ordinary shares issued at no cost or for a purchase price determined by the compensation committee whichare free from any restrictions under the 2011 Omnibus Incentive Plan;5.dividend equivalent rights entitling the grantee to receive credits for dividends that would be paid if the grantee had held a specified number ofordinary shares; or6.a right to receive a number of ordinary shares or, in the discretion of the compensation committee, an amount in cash or a combination of ordinaryshares and cash, based on the increase in the fair market value of the ADSs representing ordinary shares underlying the right during a statedperiod specified by the compensation committee.Effect of Certain Corporate TransactionsCertain change of control transactions involving us may cause awards granted under the Incentive Plan to vest, unless the awards are continued orsubstituted for by the surviving company in connection with the corporate transaction.Unless otherwise provided in the appropriate option agreement on the date of grant or provided by our board of directors thereafter with the consent of thegrantee, options granted under the Incentive Plan become exercisable in full following (1) a dissolution of our company or a merger, consolidation or reorganizationof our company with one or more other entities in which we are not the surviving entity, (2) a sale of substantially all of our assets to another person or entity, or (3)any transaction (including without limitation a merger or reorganization in which we are the surviving entity) which results in any person or entity owning 50% ormore of the combined voting power of all classes of our shares.39Adjustments for Dividends and Similar EventsThe compensation committee will make appropriate adjustments in outstanding awards and the number of ordinary shares available for issuance under theIncentive Plan, including the individual limitations on awards, to reflect ordinary share dividends, stock splits and other similar events.C. BOARD PRACTICES.Board of DirectorsOur board of directors consists of six members being Messrs. Xuesong Song, Kegang Peng, Dennis Galgano, Jin Shi, Jiming Ha and Zhiaho Xu. Ourdirectors hold office until our annual meeting of shareholders, where their successors will be duly elected and qualified, or until the directors’ death, resignation orremoval, whichever is earlier. Our directors are not subject to a term of office and hold office until their resignation, death or incapacity or until their respectivesuccessors have been elected and qualified in accordance with our fourth amended and restated memorandum of association and articles of association. A directorwill be removed from office if, among other things, the director (1) becomes bankrupt, (2) dies or becomes of unsound mind, or (3) is absent from meetings of ourboard of directors for six consecutive months without leave and our board of directors resolves that the office is vacated. A director is not entitled to any specialbenefits upon termination of service with the company.Director IndependenceOur board of directors consists of six members; Messrs. Dennis Galgano, Jin Shi, Jiming Ha and Zhihao Xu have been determined by us to be independentdirectors within the meaning of the independent director guidelines of the NASDAQ Corporate Governance Rules (the “NASDAQ Rules”).Committees of Our Board of DirectorsTo enhance our corporate governance, we established three committees under our board of directors: an audit committee, a compensation committee, and anominating and corporate governance committee. We have adopted a charter for each of these committees. The committees have the following functions andmembers.Audit CommitteeOur audit committee reports to our board of directors regarding the appointment of our independent public accountants, the scope and results of ourannual audits, compliance with our accounting and financial policies and management’s procedures and policies relating to the adequacy of our internal accountingcontrols. Our audit committee consists of Messrs. Dennis Galgano, Jin Shi, and Jiming Ha. Mr. Galgano, having accounting and financial management expertise,serves as the chairman of the audit committee and is an “audit committee financial expert” as defined by the rules and regulations of the SEC. Our board of directorshas determined that each of these persons meet the definition of an “independent director” under the applicable NASDAQ Rules and under Rule 10A3 of theSecurities Exchange Act of 1934, as amended (the “Exchange Act”).Our audit committee is responsible for, among other things:●the appointment, evaluation, compensation, oversight and termination of the work of our independent auditor (including resolution of disagreementsbetween management and the independent auditor regarding financial reporting);●an annual performance evaluation of the audit committee;●establishing procedures for the receipt, retention and treatment of complaints regarding accounting, internal accounting controls, auditing matters orpotential violations of law, and the confidential, anonymous submission by our employees of concerns regarding questionable accounting or auditingmatters or potential violations of law;40●ensuring that it receives an transition report from our independent auditor describing our internal control procedures and any steps taken to deal withmaterial control deficiencies and attesting to the auditor’s independence and describing all relationships between the auditor and us;●reviewing our annual audited financial statements and quarterly financial statements with management and our independent auditor;●reviewing and approving all proposed related party transactions;●reviewing our policies with respect to risk assessment and risk management;●meeting separately and periodically with management and our independent auditor; and●reporting regularly to our board of directors.Compensation CommitteeOur compensation committee assists the board of directors in reviewing and approving the compensation structure of our directors and executive officers,including all forms of compensation to be provided to our directors and executive officers. In addition, the compensation committee reviews share compensationarrangements for all of our other employees. Members of the compensation committee are not prohibited from direct involvement in determining their owncompensation. Our chief executive officer is not permitted to be present at any committee meeting during which his or her compensation is deliberated. Ourcompensation committee consists of Dennis Galgano and Jin Shi, with Mr. Shi serving as the chairman of the compensation committee. Our board of directors hasdetermined that each of these persons meet the definition of “independent director” under the applicable requirements of the NASDAQ Rules.Our compensation committee is responsible for, among other things:●reviewing and approving corporate goals and objectives relevant to the compensation of our chief executive officer, evaluating the performance of ourchief executive officer in light of those goals and objectives and setting the compensation level of our chief executive officer based on this evaluation;●reviewing and making recommendations to the board with respect to the compensation of our executives, incentive compensation and equitybasedplans that are subject to board approval; and●providing annual performance evaluations of the compensation committee.Nominating and Corporate Governance CommitteeOur nominating and corporate governance committee assists the board of directors in identifying and selecting or recommending individuals qualified tobecome our directors, developing and recommending corporate governance principles and overseeing the evaluation of our board of directors and management. Ournominating and corporate governance committee consists of Jiming Ha and Zhihao Xue, with Mr. Ha serving as the chairman of the nominating and corporategovernance committee. Our board of directors has determined that each of these persons meet the definition of “independent director” under the applicablerequirements of the NASDAQ Rules.Our nominating and corporate governance committee is responsible for, among other things:●selecting and recommending to our board nominees for election or reelection to our board, or for appointment to fill any vacancy;●reviewing annually with our board the current composition of the board of directors with regards to characteristics such as independence, age, skills,experience and availability of service to us;●selecting and recommending to our board the names of directors to serve as members of the audit committee and the compensation committee, as wellas the nominating and corporate governance committee itself; advising our board of directors periodically with regards to significant developments inthe law and practice of corporate governance as well as our compliance with applicable laws and regulations, and making recommendations to ourboard of directors on all matters of corporate governance and on any remedial action to be taken; and●monitoring compliance with our code of business conduct and ethics, including reviewing the adequacy and effectiveness of our procedures to ensureproper compliance.41Code of Business Conduct and EthicsOur board of directors adopted a code of business conduct and ethics applicable to our directors, officers and employees.Duties of DirectorsUnder British Virgin Islands law, our directors have a duty to act honestly, in good faith and with a view to our best interests. Our directors also have a dutyto exercise care, diligence and skills that a reasonably prudent person would exercise in comparable circumstances. In fulfilling their duty of care to us, our directorsmust ensure compliance with our memorandum of association and articles of association. We have the right to seek damages if a duty owed by our directors isbreached.The functions and powers of our board of directors include, among others:●appointing officers and determining the term of office of the officers;●authorizing the payment of donations to religious, charitable, public or other bodies, clubs, funds or associations as deemed advisable;●exercising the borrowing powers of the company and mortgaging the property of the company;●executing cheques, promissory notes and other negotiable instruments on behalf of the company; and●maintaining or registering a register of mortgages, charges or other encumbrances of the company.Remuneration and BorrowingThe directors may receive such remuneration as our board of directors may determine from time to time. Each director is entitled to be repaid or prepaid alltraveling, hotel and incidental expenses reasonably incurred or expected to be incurred in attending meetings of our board of directors or committees of our board ofdirectors or shareholder meetings or otherwise in connection with the discharge of his or her duties as a director. The compensation committee will assist thedirectors in reviewing and approving the compensation structure for the directors.Our board of directors may exercise all the powers of the company to borrow money and to mortgage or charge our undertakings and property or any partthereof, to issue debentures, debenture stock and other securities whenever money is borrowed or as security for any debt, liability or obligation of the company orof any third party.QualificationA director is not required to hold shares as a qualification to office.42Limitation on Liability and Other Indemnification MattersBritish Virgin Islands law does not limit the extent to which a company’s memorandum of association and articles of association may provide forindemnification of officers and directors, except to the extent any such provision may be held by the British Virgin Islands courts to be contrary to public policy,such as to provide indemnification against civil fraud or the consequences of committing a crime.Under our memorandum of association and articles of association, we may indemnify our directors, officers and liquidators against all expenses, includinglegal fees, and against all judgments, fines and amounts paid in settlement and reasonably incurred in connection with civil, criminal, administrative or investigativeproceedings to which they are party or are threatened to be made a party by reason of their acting as our director, officer or liquidator. To be entitled toindemnification, these persons must have acted honestly and in good faith with a view to the best interest of the company and, in the case of criminal proceedings,they must have had no reasonable cause to believe their conduct was unlawful.Compensation Committee Interlocks and Insider ParticipationNone of the members of our compensation committee is an officer or employee of our company. None of our executive officers currently serves, or in thepast year has served, as a member of the board of directors or compensation committee of any entity that has one or more executive officers serving on our board ofdirectors or compensation committee.Employment AgreementsOn August 19, 2018, the Company entered into an Employment Agreement (the “Song Agreement”) with Mr. Xuesong Song, to serve as the ChiefExecutive Officer of the Company for a fouryear term, subject to renewal. Under the terms of the Song Agreement, Mr. Song will receive no salary for his servicesbut will be eligible for an annual cash bonus in the Board’s sole discretion.On August 19, 2018, the Company entered into an Employment Agreement (the “Yu Agreement”) with Mr. Jie Yu, to serve as the Chief Financial Officer ofthe Company for a fouryear term, subject to renewal. Under the terms of the Yu Agreement, Mr. Yu will receive an annual salary of RMB700,000, and will be eligiblefor an annual cash bonus in the Board’s sole discretion.D. EMPLOYEES.As of September 30, 2018 and December 31, 2017, we had a total of 107 and 37 fulltime employees, including 48 and 13 in research and development, 9 and 2in sales and marketing and the rest in a variety of other divisions, respectively. All of our employees are fulltime employees. None of our employees is currentlyrepresented by a union and/or collective bargaining agreements. We believe that we have good relations with our employees and since our inception we have hadno history of work stoppages or union organizing campaigns.E. SHARE OWNERSHIP.The following table provides information as to the beneficial ownership of our ordinary shares as of October 10, 2018, by the persons listed. Beneficialownership of shares is determined under the rules of the SEC and generally includes any shares over which a person exercises sole or shared voting or investmentpower. For purposes of the following table, a person is deemed to have beneficial ownership of any ordinary shares if such person has the right to acquire suchshares within 60 days of October 10, 2018. For purposes of computing the percentage of outstanding shares held by each person, any shares that such person hasthe right to acquire within 60 days after of October 10, 2018 are deemed to be outstanding, but are not deemed to be outstanding for the purpose of computing thepercentage ownership of any other person. Except as otherwise noted, the persons named in the table have sole voting and investment power with respect to all ofthe ordinary shares beneficially owned by them. Unless otherwise indicated, the address of each person listed is c/o Luokung Technologies, LAB 32, SOHO 3Q, No9, Guanghua Road, Chaoyang District, Beijing, People’s Republic of China.43Percentage ownership in the following table is based on 199,317,558 ordinary shares outstanding on October 10, 2018.Number ofsharesPercent ofclassDirectors and named executive officersCharm Dragon International Limited (1)4,030,8822.03%Xuesong Song, Chairman, Chief Executive Officer and Director(2)38,156,43019.30%Kegang Peng, Vice President and Director (3)17,231,9558.71%Dennis Galgano, Director75,796*%Jin Shi, DirectorJiming Ha, DirectorZhihao Xu, Director (4)7,579,1843.83%Dongpu Zhang, President (5)2,321,7921.17%Chuang Tao, Director (6)1,221,996*%Directors and executive officers as a group (10 persons)66,587,15233.69%(1)Charm Dragon International Limited is a British Virgin Islands company controlled by Mr. Xuesong Song.(2)Consists of (i) 4,030,882 shares owned directly by Charm Dragon International Limited, a British Virgin Islands company and (ii) 22,624,793 shares owneddirectly by Bravo First Development Limited, a British Virgin Islands company. Mr. Xuesong Song is the controlling shareholder of Bravo First DevelopmentLimited. Mr. Xuesong Song is the sole director of Charm Dragon International Limited.(3)Consists of 17,231,955 shares owned directly by Plenty Prestige Enterprises Limited, a British Virgin Islands company. Mr. Kegang Peng is the sole director ofPlenty Prestige Enterprises Limited.(4)Consists of 7,579,184 shares directly owned by Geely Group Limited., a Chinese company. Mr. Zhihao Xu is the Chief Executive Officer of Geely GroupLimited.(5)Consists of 2,321,792 shares owned directly by Genoa Peak Limited, a British Virgin Islands company. Mr. Dongpu Zhang controls Genoa Peak Limited.(6)Consists of 1,221,996 shares owned directly by Globalearth Holdings Limited, a British Virgin Islands company. Mr. Chuang Tao controls Globalearth HoldingsLimited.*Represents less than 1% of shares outstandingITEM 7. MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS.A. MAJOR SHAREHOLDERSPlease refer to Item 6.E “Directors, Senior Management and Employees — Share Ownership.”To our knowledge, (A) we are not directly or indirectly owned or controlled by (i) another corporation or (ii) any foreign government and (B) there are noarrangements (including any announced or expected takeover bid), the operation of which may at a subsequent date result in a change in our control.The voting rights of our major shareholders do not differ from the voting rights of other holders of the same class of shares.44B. RELATED PARTY TRANSACTIONS. BUSINESS RELATIONSHIPS.Our subsidiaries, consolidated affiliated entities, and the subsidiaries of the consolidated affiliated entities have engaged, during the ordinary course ofbusiness, in a number of customary transactions with each other. All of these intercompany balances have been eliminated in consolidation.As of December 31, 2017, we had amounts due from related parties, C Media Limited and Ya Tuo Ji International Consultancy (Beijing) Limited, in theamounts of $11.8 million and $0.2 million, respectively. These amounts due from related parties are short term in nature, noninterest bearing, unsecured andrepayable on demand.As of December 31, 2017, we had amounts due to related parties, Mr. Xuesong Song, our chairman and chief executive officer, Thumb Beijing Branch andThumb Shenzhen Branch, in the amounts of $2.9 million, $0.6 million and $0.03 million, respectively. These amounts due to related parties are short term in nature,noninterest bearing, unsecured and payable on demand.We are party to a series of control agreements with Beijing Zhong Chuan Shi Xun. In addition, our chief executive officer, Mr. Xuesong Song, serves as andofficer of Beijing Zhong Chuan Shi Xun and is a shareholder of Beijing Zhong Chuan Shi Xun. The following table sets forth the relationship of Mr. Song withBeijing Zhong Chuan Shi Xun:NameRelationship withLuokung TechnologyRelationship withBeijing Zhong Chuan Shi XunPercentageOwnership Interest inBeijing Zhong Chuan Shi XunXuesong SongChief Executive OfficerChief Executive Officer61.83%C. INTERESTS OF EXPERTS AND COUNSEL.None.ITEM 8. FINANCIAL INFORMATION.A. CONSOLIDATED STATEMENTS AND OTHER FINANCIAL INFORMATION.See “Item 18. Financial Statements.”Legal ProceedingsTo our knowledge, other than as described below there are no material legal proceedings threatened against us. From time to time, we may be subject tovarious claims and legal actions arising in the ordinary course of business. Following the consummation of the AEA, we became successor in interest to the legalproceedings described below.Litigation with Shanghai Fusheng Weier Intelligent Control Technology Co., Ltd.On January 22, 2016, Zhong Chuan Rui You and Shanghai Fusheng Weier Intelligent Control Technology Co., Ltd. (“Fusheng Weier”) signed a contract forequipment of $1,652,842 (RMB10,800,000). Since Zhong Chuan Rui You did not make the payments of $1,126,381 (RMB7,360,000) on the due dates, Fusheng Weierfiled a lawsuit against Zhong Chuan Rui You in Shanghai Xuhui District People's Court on October 8, 2016. On March 9, 2017, Xuhui District People's Court issuedthe verdict requiring Zhong Chuan Rui You to pay the overdue debts. In August 2017, C Media Limited made the payment of $512,075 (RMB3,346,000). Theremaining balance has been accrued in accounts payable. The payment schedule for the remaining balance is being negotiated by the two parties. On February 5,2018, a hearing was held adding Zhong Chuan Shi Xun as a defendant. The Group plans to settle the remaining balance within one year.45Lawsuit with Gansu Jinlun Culture Media Co., Ltd.On August 22, 2014, Zhong Chuan Rui You and Gansu Jinlun Culture Media Co., Ltd. (“Gansu Jinlun”) signed a “Lanzhou Railway Bureau AirconditionedTrain WiFi Network System Advertising Operation Rights Agreement” for advertising on 72 trains of $1,467,880 (RMB9,604,633). Due to the dispute on theproject implementation, Zhong Chuan Rui You did not pay the advertising fee. On August 23, 2017, Gansu Jinlun filed a lawsuit with Gansu Intermediate People'sCourt. On December 19, 2017, Gansu Intermediate People's Court issued a verdict, ruling that Zhong Chuan Rui You settle the overdue advertising fee. Since only 18out of 72 trains have been installed with Wifi network system, Zhong Chuan Rui You disputed and appealed to the verdict. The next court trial date has not yet beendetermined. C Media and Gansu Jinlun are negotiating a potential settlement to resume the contract. According to the legal counsel, it is probable that the settlementwill amount to approximately $459,000 (RMB3,000,000); therefore, this amount has been accrued in accounts payable as at December 31, 2017.Litigation with Shenzhen Hua Xun Fang Zhou Technology Co., Ltd.On June 16, 2015, Zhong Chuan Rui You signed a cooperation agreement with Shenzhen Hua Xun Fang Zhou Technology Co., Ltd. (“Shenzhen Hua Xun”)and Xuesong Song, a major shareholder of C Media Limited. Pursuant to this agreement, Zhong Chuan Rui You procures equipment from Shenzhen Hua Xun.Xuesong Song acts as a joint liability guarantor for the entire debts of Zhong Chuan Rui You under this agreement. As Zhong Chuan Rui You did not make thepayments on the due dates, Shenzhen Hua Xun filed a lawsuit with Shenzhen Baoan District People's Court on May 31, 2016. On November 1, 2016, Zhong ChuanRui You, Xuesong Song and Shenzhen Hua Xun reached a settlement in Shenzhen Baoan District People's Court to settle $1,735,389 (RMB11,355,000) in fourinstalments. On December 30, 2017, the debt was assigned to C Media Limited.Dividend PolicyWe currently intend to retain all of our available funds and future earnings for use in the operation and expansion of our business and do not anticipatepaying cash dividends in the foreseeable future. Under the terms of our Amended and Restated Memorandum and Articles of Association the declaration andpayment of any dividends in the future will be determined by our board of directors, in its discretion, and will depend on a number of factors, including our earnings,capital requirements and overall financial condition and our ability to receive dividends from our subsidiaries. If we pay any dividends, we will pay our ADS holders’dividends with respect to their underlying shares to the same extent as holders of our ordinary shares, subject to the terms of the deposit agreement, including thefees and expenses payable thereunder. Cash dividends on our ordinary shares, if any, will be paid in U.S. dollars.Our ability to receive dividends from our subsidiaries may limit our ability to pay dividends on our ordinary shares. See Risk Factors – Risks Related toDoing Business in China – Our holding company structure may limit the payment of dividends” and “Item 10. Additional Information – D. Exchange Controls –Dividend Distribution”.B. SIGNIFICANT CHANGES.N/AITEM 9. THE OFFER AND LISTINGA. OFFER AND LISTING DETAILS.Markets and Share Price HistoryOur ordinary shares are not currently listed on any trading market. Our American Depository Shares (“ADSs”) were voluntarily delisted from the NASDAQCapital Market on September 19, 2018. We have applied to NASDAQ for the listing of our ordinary shares on the NASDAQ Capital Market and received an approvalfor listing of Ordinary Shares on August 6, 2018, and as of the date of this transition report, that application and approval are currently under review.46The table below sets forth the high and low reported sales prices in dollars of our ordinary shares, which are represented by ADSs, as reported byNASDAQ in the periods as indicated:ADSHighLowAnnual Highs and Lows (as of the fiscal year end 09/30 for the five most recent full financial years)*20175.592.67201610.21.62Quarterly Highs and Lows (for the two most recent full financial years and any subsequent period, based on calendarquarter end)*2018Third Quarter8.006.30Second Quarter8.824.25First Quarter6.403.702017Fourth Quarter5.592.91Third Quarter3.992.67Second Quarter4.063.07First Quarter5.152.832016Fourth Quarter6.594.20Third Quarter10.201.62Second Quarter3.101.97First Quarter3.602.12Monthly Highs and Lows (for the most recent six months)September 20188.006.41August 20187.706.63July 20187.506.30June 20188.827.55May 20187.805.92April 20187.454.25*The Company effected a 1for10 reverse stock split of its ordinary shares on November 6, 2012 (the “Reverse Split”). The ratio between each AmericanDepositary Share (“ADS”) and its underlying ordinary share postReverse Split remains the same, namely, one ADR remains to represent one ordinary sharepost the Reverse Split. The price listed here after November 6, 2012 reflected the effect from the Reverse Split.B. PLAN OF DISTRIBUTION.Not Applicable.C. MARKETS.Our ordinary shares are not currently listed on any trading market. Our ADSs were voluntarily delisted from the NASDAQ Capital Market on September 19,2018. We have applied to NASDAQ for the listing of our ordinary shares on the NASDAQ Capital Market and received an approval for listing of Ordinary Shares onAugust 6, 2018, and as of the date of this transition report, that application and approval are currently under review.47D. SELLING SHAREHOLDERS.Not applicable.E. DILUTION.Not applicable.F. EXPENSES OF THE ISSUE.Not applicable.ITEM 10. ADDITIONAL INFORMATION.A. SHARE CAPITALNot applicable.B. MEMORANDUM AND ARTICLES OF ASSOCIATIONWe are a British Virgin Islands company incorporated with limited liability and our affairs are governed by the provisions of our memorandum of associationand articles of association, as amended and restated from time to time, and by the provisions of applicable British Virgin Islands law.Our memorandum of association and articles of association authorize the issuance of up to 251,000,000 shares, which are designated into (i) 250,000,000 ofordinary shares of the Company (“Ordinary Shares”), and (ii) 1,000,000 preferred shares of the Company (“Preferred Shares”), in each case with the rights,preferences and privileges as set out in the memorandum and articles of association of the Company.Please see below for a description of our ADSs under “Item 12. Description of Securities Other Than Equity Securities – D. American Depository Shares.”The following is a summary of the material provisions of our ordinary shares and our memorandum of association and articles of association.Ordinary SharesAll of our issued and outstanding ordinary shares are fully paid and nonassessable. Holders of our ordinary shares who are nonresidents of the BritishVirgin Islands may freely hold and vote their shares.Subject to the memorandum and articles of association (and, for greater clarity, without prejudice to any special rights conferred thereby on the holders ofany other shares), an Ordinary Share of the Company confers on the holder:(a)the right to one vote per Ordinary Share at a meeting of the members or on any resolution of members;(b)the right to an equal share in any distribution paid by the Company; and(c)the right to an equal share in the distribution of the surplus assets of the Company on a winding up;48Subject to the memorandum and articles of association (and, for greater clarity, without prejudice to any special rights conferred thereby on the holders ofany other shares), a Preferred Share of the Company confers on the holder:(a)the right to 399 votes per Preferred Share at a meeting of the members or on any resolution of members;(b)the right to an equal share in any distribution paid by the Company;(c)the right to an equal share in the distribution of the surplus assets of the Company on a winding up;(d)be freely transferable, in whole or in part, by Mr. Xuesong Song to any third party through one or more Private Transactions, subject toApplicable Law; and(e)be freely transferable, in whole or in part, by Mr. Xuesong Song to any third party through one or more Public Transactions, subject to ApplicableLaw and Automatic Conversion of such Preferred Share(s) into Ordinary Share(s).Each Preferred Share shall be automatically converted at any time after issue and without the payment of any additional sum into an equal number of fullypaid Ordinary Shares upon the conclusion of any transfer by Mr. Xuesong Song to any third party through one or more Public Transactions.Limitation on Liability and Indemnification MattersUnder British Virgin Islands law, each of our directors and officers, in performing his or her functions, is required to act honestly and in good faith with aview to our best interests and exercise the care, diligence and skill that a reasonably prudent person would exercise in comparable circumstances. Our memorandumof association and articles of association provide that, to the fullest extent permitted by British Virgin Islands law or any other applicable laws, our directors will notbe personally liable to us or our shareholders for any acts or omissions in the performance of their duties. Such limitation of liability does not affect the availabilityof equitable remedies such as injunctive relief or rescission. These provisions will not limit the liability of directors under United States federal securities laws.We may indemnify any of our directors or anyone serving at our request as a director of another entity against all expenses, including legal fees, andagainst all judgments, fines and amounts paid in settlement and reasonably incurred in connection with legal, administrative or investigative proceedings. We mayonly indemnify a director if he or she acted honestly and in good faith with the view to our best interests and, in the case of criminal proceedings, the director hadno reasonable cause to believe that his or her conduct was unlawful. The decision of our board of directors as to whether the director acted honestly and in goodfaith with a view to our best interests and as to whether the director had no reasonable cause to believe that his or her conduct was unlawful, is in the absence offraud sufficient for the purposes of indemnification, unless a question of law is involved. The termination of any proceedings by any judgment, order, settlement,conviction or the entry of no plea does not, by itself, create a presumption that a director did not act honestly and in good faith and with a view to our best interestsor that the director had reasonable cause to believe that his or her conduct was unlawful. If a director to be indemnified has been successful in defense of anyproceedings referred to above, the director is entitled to be indemnified against all expenses, including legal fees, and against all judgments, fines and amounts paidin settlement and reasonably incurred by the director or officer in connection with the proceedings.We may purchase and maintain insurance in relation to any of our directors or officers against any liability asserted against the directors or officers andincurred by the directors or officers in that capacity, whether or not we have or would have had the power to indemnify the directors or officers against the liabilityas provided in our memorandum of association and articles of association.Insofar as indemnification for liabilities arising under the Securities Act may be permitted for our directors or officers under the foregoing provisions, wehave been informed that in the opinion of the Securities and Exchange Commission, such indemnification is against public policy as expressed in the Securities Actand is therefore unenforceable as a matter of United States law.49Differences in Corporate LawWe were incorporated under, and are governed by, the laws of the British Virgin Islands. The corporate statutes of the State of Delaware and the BritishVirgin Islands are similar, and the flexibility available under British Virgin Islands law has enabled us to adopt memorandum of association and articles of associationthat will provide shareholders with rights that do not vary in any material respect from those they would enjoy if we were incorporated under the Delaware GeneralCorporation Law, or Delaware corporate law. Set forth below is a summary of some of the differences between provisions of the BVI Act applicable to us and thelaws application to companies incorporated in Delaware and their shareholders.Director’s Fiduciary DutiesUnder Delaware corporate law, a director of a Delaware corporation has a fiduciary duty to the corporation and its stockholders. This duty has twocomponents: the duty of care and the duty of loyalty. The duty of care requires that a director act in good faith, with the care that an ordinarily prudent personwould exercise under similar circumstances. Under this duty, a director must inform himself of, and disclose to stockholders, all material information reasonablyavailable regarding a significant transaction. The duty of loyalty requires that a director act in a manner he reasonably believes to be in the best interests of thecorporation. He must not use his corporate position for personal gain or advantage. This duty prohibits selfdealing by a director and mandates that the bestinterest of the corporation and its stockholders take precedence over any interest possessed by a director, officer or controlling stockholder and not shared by thestockholders generally. In general, actions of a director are presumed to have been made on an informed basis, in good faith and in the honest belief that the actiontaken was in the best interests of the corporation. However, this presumption may be rebutted by evidence of a breach of one of the fiduciary duties. Should suchevidence be presented concerning a transaction by a director, a director must prove the procedural fairness of the transaction, and that the transaction was of fairvalue to the corporation.British Virgin Islands law provides that every director of a British Virgin Islands company in exercising his powers or performing his duties shall acthonestly and in good faith and in what the director believes to be in the best interests of the company. Additionally, the director shall exercise the care, diligence andskill that a reasonable director would exercise in the same circumstances taking into account the nature of the company, the nature of the decision and the positionof the director and his responsibilities. In addition, British Virgin Islands law provides that a director shall exercise his powers as a director for a proper purpose andshall not act, or agree to the company acting, in a manner that contravenes British Virgin Islands law or the memorandum association or articles of association of thecompany.Amendment of Governing DocumentsUnder Delaware corporate law, with very limited exceptions, a vote of the stockholders is required to amend the certificate of incorporation. Under BritishVirgin Islands law and our memorandum of association and articles of association, (i) our shareholders may amend our memorandum of association and articles ofassociation by a resolution of shareholders, or (ii) our board of directors may amend our memorandum of association and articles of association by a resolution ofdirectors without a requirement for a resolution of shareholders so long as the amendment does not:●restrict the rights of the shareholders to amend the memorandum of association and articles of association;●change the percentage of shareholders required to pass a resolution of shareholders to amend the memorandum of association and articles ofassociation;●amend the memorandum of association and articles of association in circumstances where the memorandum of association and articles ofassociation cannot be amended by the shareholders; or●amend the provisions of memorandum of association or the articles of association pertaining to “rights attaching to shares,” “rights not varied bythe issue of the shares pari passu,” “variation of rights” and “amendment of memorandum and articles”.50Written Consent of DirectorsUnder Delaware corporate law, directors may act by written consent only on the basis of a unanimous vote. Under British Virgin Islands law, directors’consents need only a majority of directors signing to take effect.Written Consent of ShareholdersUnder Delaware corporate law, unless otherwise provided in the certificate of incorporation, any action to be taken at any annual or special meeting ofstockholders of a corporation, may be taken by written consent of the holders of outstanding stock having not less than the minimum number of votes that wouldbe necessary to take such action at a meeting. As permitted by British Virgin Islands law, shareholders’ consents need only a majority of shareholders signing totake effect. Our memorandum of association and articles of association provide that shareholders may approve corporate matters by way of a resolution consentedto at a meeting of shareholders or in writing by a majority of shareholders entitled to vote thereon.Shareholder ProposalsUnder Delaware corporate law, a shareholder has the right to put any proposal before the annual meeting of shareholders, provided it complies with thenotice provisions in the governing documents. A special meeting may be called by the board of directors or any other person authorized to do so in the governingdocuments, but shareholders may be precluded from calling special meetings. British Virgin Islands law and our memorandum of association and articles ofassociation provide that our directors shall call a meeting of the shareholders if requested in writing to do so by shareholders entitled to exercise at least 30% of thevoting rights in respect of the matter for which the meeting is requested.Sale of AssetsUnder Delaware corporate law, a vote of the stockholders is required to approve the sale of assets only when all or substantially all assets are being sold. Inthe British Virgin Islands, shareholder approval is required when more than 50% of the company’s total assets by value are being disposed of or sold.Dissolution; Winding UpUnder Delaware corporate law, unless the board of directors approves the proposal to dissolve, dissolution must be approved by shareholders holding100% of the total voting power of the corporation. Only if the dissolution is initiated by the board of directors may it be approved by a simple majority of thecorporation’s outstanding shares. Delaware corporate law allows a Delaware corporation to include in its certificate of incorporation a supermajority votingrequirement in connection with dissolutions initiated by the board. As permitted by British Virgin Islands law and our memorandum of association and articles ofassociation, we may be voluntarily liquidated under Part XII of the BVI Act by resolution of directors and resolution of shareholders if we have no liabilities and weare able to pay our debts as they fall due.Redemption of SharesUnder Delaware corporate law, any stock may be made subject to redemption by the corporation at its option or at the option of the holders of such stockprovided there remains outstanding shares with full voting power. Such stock may be made redeemable for cash, property or rights, as specified in the certificate ofincorporation or in the resolution of the board of directors providing for the issue of such stock. As permitted by British Virgin Islands law, and our memorandum ofassociation and articles of association, shares may be repurchased, redeemed or otherwise acquired by us. Our directors must determine that immediately followingthe redemption or repurchase we will be able to satisfy our debts as they fall due and the value of our assets exceeds our liabilities.51Variation of Rights of SharesUnder Delaware corporate law, a corporation may vary the rights of a class of shares with the approval of a majority of the outstanding shares of suchclass, unless the certificate of incorporation provides otherwise. As permitted by British Virgin Islands law, and our memorandum of association and articles ofassociation, if our share capital is divided into more than one class of shares, we may vary the rights attached to any class only with the consent in writing ofholders of not less than threefourths of the issued shares of that class and holders of not less than threefourths of the issued shares of any other class of shareswhich may be affected by the variation.Removal of DirectorsUnder Delaware corporate law, a director of a corporation with a classified board may be removed only for cause with the approval of a majority of theoutstanding shares entitled to vote, unless the certificate provides otherwise. As permitted by British Virgin Islands law and our memorandum of association andarticles of association, directors may be removed by resolution of directors or resolution of shareholders.MergersUnder the BVI Act, two or more companies may merge or consolidate in accordance with the statutory provisions. A merger means the merging of two ormore constituent companies into one of the constituent companies, and a consolidation means the uniting of two or more constituent companies into a newcompany. In order to merger or consolidate, the directors of each constituent company must approve a written plan of merger or consolidation which must beauthorized by a resolution of shareholders.Shareholders not otherwise entitled to vote on the merger or consolidation may still acquire the right to vote if the plan of merger or consolidation containsany provision which, if proposed as an amendment to the memorandum association or articles of association, would entitle them to vote as a class or series on theproposed amendment. In any event, all shareholders must be given a copy of the plan of merger or consolidation irrespective of whether they are entitled to vote atthe meeting or consent to the written resolution to approve the plan of merger or consolidation.Inspection of Books and RecordsUnder Delaware corporate law, any shareholder of a corporation may for any proper purpose inspect or make copies of the corporation’s stock ledger, list ofshareholders and other books and records. Holders of our shares have no general right under British Virgin Islands law to inspect or obtain copies of our list ofshareholders or our corporate records. However, we will provide holders of our shares with annual audited financial statements. See “Where You Can FindAdditional Information.”Conflict of InterestThe BVI Act provides that a director shall, after becoming aware that he is interested in a transaction entered into or to be entered into by the company,disclose that interest to the board of directors of the company. The failure of a director to disclose that interest does not affect the validity of a transaction enteredinto by the director or the company, so long as the director’s interest was disclosed to the board prior to the company’s entry into the transaction or was notrequired to be disclosed (for example where the transaction is between the company and the director himself or is otherwise in the ordinary course of business andon usual terms and conditions). As permitted by British Virgin Islands law and our memorandum of association and articles of association, a director interested in aparticular transaction may vote on it, attend meetings at which it is considered, and sign documents on our behalf which relate to the transaction.52Transactions with Interested ShareholdersDelaware corporate law contains a business combination statute applicable to Delaware public corporations whereby, unless the corporation hasspecifically elected not to be governed by such statute by amendment to its certificate of incorporation, it is prohibited from engaging in certain businesscombinations with an “interested shareholder” for three years following the date that such person becomes an interested shareholder. An interested shareholdergenerally is a person or group who or that owns or owned 15% or more of the target’s outstanding voting stock within the past three years. This has the effect oflimiting the ability of a potential acquirer to make a twotiered bid for the target in which all shareholders would not be treated equally. The statute does not apply if,among other things, prior to the date on which such shareholder becomes an interested shareholder, the board of directors approves either the businesscombination or the transaction that resulted in the person becoming an interested shareholder. This encourages any potential acquirer of a Delaware publiccorporation to negotiate the terms of any acquisition transaction with the target’s board of directors.British Virgin Islands law has no comparable provision. As a result, we cannot avail ourselves of the types of protections afforded by the Delawarebusiness combination statute. However, although British Virgin Islands law does not regulate transactions between a company and its significant shareholders, itdoes provide that such transactions must be entered into bona fide in the best interests of the company and not with the effect of constituting a fraud on theminority shareholders.Independent DirectorsThere are no provisions under Delaware corporate law or under the BVI Act that require a majority of our directors to be independent.Cumulative VotingUnder Delaware corporate law, cumulative voting for elections of directors is not permitted unless the company’s certificate of incorporation specificallyprovides for it. Cumulative voting potentially facilitates the representation of minority shareholders on a board of directors since it permits the minority shareholderto cast all the votes to which the shareholder is entitled on a single director, which increases the shareholder’s voting power with respect to electing such director.There are no prohibitions to cumulative voting under the laws of the British Virgin Islands, but our memorandum of association and articles of association do notprovide for cumulative votingAntitakeover Provisions in Our Memorandum of association and articles of associationSome provisions of our memorandum of association and articles of association may discourage, delay or prevent a change in control of our company ormanagement that shareholders may consider favorable, including provisions that authorize our board of directors to issue preference shares in one or more seriesand to designate the price, rights, preferences, privileges and restrictions of such preference shares.C. MATERIAL CONTRACTS.On January 25, 2018, the Company executed an Asset Exchange Agreement (“AEA”) with C Media Limited, a corporation organized under the laws of theCayman Islands (“C Media”), whereby the Company agreed to purchase all the capital stock and equity interests of LK Technology Ltd, together with its whollyowned subsidiaries MMB Limited and Mobile Media (China) Limited and all respective subsidiaries from C Media in exchange for (i) 185,412,599 ordinary shares ofthe Company, par value $0.01 per share (“Ordinary Shares”), (ii) 1,000,000 preferred shares of Kingtone (“Preferred Shares”) and (iii) all issued and outstandingcapital stock or equity interests of the Company’s subsidiary, Topsky InfoTech Holdings Pte Ltd., and its whollyowned subsidiary Xi’an Softech Co., Ltd.,including all entities effectively controlled by Xi’an Softech Co., Ltd. through contractual arrangements and variable business entities.To consummate the contemplated transactions described above, the Company obtained shareholder consent at a special meeting held on May 20, 2018, (i)to authorize 1,000,000 Preferred Shares, (ii) to authorize additional Ordinary Shares so that total authorized Ordinary Shares is equal to 250,000,000 shares, (iii) to listsuch Ordinary Shares on NASDAQ, and (iv) to approve the transactions contemplated in the Asset Exchange Agreement. Additionally, NASDAQ needed toapprove the contemplated transactions prior to consummation thereof. C Media had the right to terminate the AEA if the closing had not occurred (other thanthrough the failure of C Media to comply fully with its obligations under the AEA) on or before July 31, 2018. The transactions contemplated by the AEA wereconsummated on August 17, 2018.53On January 25, 2018, five shareholders of the Company including its largest shareholder and its Chief Executive Officer executed a Securities PurchaseAgreement, whereby such shareholders agreed to sell a total of 617,988 Ordinary Shares and 282,694 American Depository Shares of the Company to Redstone YYLManagement Limited, a company incorporated in the British Virgin Islands, in exchange for an aggregate purchase price of $1,897,860.09.On August 25, 2018, LK Technology entered into a Stock Purchase Agreement (the “Agreement”) with the shareholders (“Shareholders”) of SuperengineHoldings Limited, a limited liability company organized under the laws of the British Virgin Islands (the “Superengine”), pursuant to which LK Technology acquiredall of the issued and outstanding capital stock of Superengine for an aggregate purchase price of US$60 million (the “Purchase Price”), which are paid by theissuance of our Ordinary Shares in an amount equal to the quotient of (x) the Purchase Price divided by (y) the average of the closing prices of the Ordinary Shareson the NASDAQ Capital Market over the 12 months period preceding July 31, 2018. We are a party to the Agreement in connection with the issuance of theOrdinary Shares and certain other limited purposes.D. EXCHANGE CONTROLS.This section sets forth a summary of the most significant regulations or requirements that affect our business activities in China or our shareholders’ rightto receive dividends and other distributions from us.Regulations on Internet Content ProvidersThe Administrative Measures on Internet Information Services, or the Internet Content Measures, which was promulgated by the State Council onSeptember 25, 2000 and amended on January 8, 2011, set out guidelines on the provision of internet information services. The Internet Content Measures specifiesthat internet information services regarding news, publications, education, medical and health care, pharmacy and medical appliances, among other things, arerequired to be examined, approved and regulated by the relevant authorities. Internet information providers are prohibited from providing services beyond thoseincluded in the scope of their licenses or filings. Furthermore, the Internet Content Measures specifies a list of prohibited content. Internet information providers areprohibited from producing, copying, publishing or distributing information that is humiliating or defamatory to others or that infringes the legal rights of others.Internet information providers that violate such prohibition may face criminal charges or administrative sanctions. Internet information providers must monitor andcontrol the information posted on their websites. If any prohibited content is found, they must remove the content immediately, keep a record of such content andreport to the relevant authorities.The Internet Content Measures classifies internet information services into commercial internet information services and noncommercial internetinformation services. Commercial internet information services refer to services that provide information or services to internet users with charge. A provider ofcommercial internet information services must obtain an ICP License.Regulations on Internet Audiovideo Program ServicesOn December 20, 2007, the MII and the State Administration of Press, Publication, Radio, Film and Television, or the SAPPRFT, jointly issued theAdministrative Provisions for the Internet AudioVideo Program Service, or the Audiovideo Program Provisions, which came into effect on January 31, 2008 andwas amended on August 28, 2015. The Audiovideo Program Provisions defines “internet audiovideo program services” as producing, editing and integrating ofaudiovideo programs, supplying audiovideo programs to the public via the internet, and providing audiovideo programs uploading and transmission services to athird party. Entities providing internet audiovideo programs services must obtain an internet audiovideo program transmission license. Applicants for such licensesshall be stateowned or statecontrolled entities unless an internet audiovideo program transmission license has been obtained prior to the effectiveness of theAudiovideo Program Provisions in accordance with the thenineffect laws and regulations. In addition, foreigninvested enterprises are not allowed to engage inthe abovementioned services. According to the Audiovideo Program Provisions and other relevant laws and regulations, audiovideo programs provided by theentities supplying Internet audiovideo program services shall not contain any illegal content or other content prohibited by the laws and regulations, such as anycontent against the basic principles in the PRC Constitution, any content that damages the sovereignty of the country or national security, and any content thatdisturbs social order or undermine social stability. An audiovideo program that has already been broadcast shall be retained in full for at least 60 days. Movies,television programs and other media content used as Internet audiovideo programs shall comply with relevant administrative regulations on programs broadcaststhrough radio, movie and television channels. Entities providing services related to Internet audiovideo programs shall immediately delete the audiovideoprograms violating laws and regulations, keep relevant records, report relevant authorities and implement other regulatory requirements.54The Categories of the Internet AudioVideo Program Services, or the Audiovideo Program Categories, promulgated by SAPPRFT on March 10, 2017,classifies internet audio/video programs into four categories: (I) Category I internet audio/video program service, which is carried out with a form of radio station ortelevision station; (II) Category II internet audio/video program service, including (a) rebroadcasting service of current political news audio/video programs; (b)hosting, interviewing, reporting and commenting service of arts, entertainment, technology, finance and economics, sports, education and other specializedaudio/video programs; (c) producing (interviewing not included) and broadcasting service of arts, entertainment, technology, finance and economics, sports,education and other specialized audio/video programs; (d) producing and broadcasting service of internet films/dramas; (e) aggregating and broadcasting service offilms, television dramas and cartoons; (f) aggregating and broadcasting service of arts, entertainment, technology, finance and economics, sports, education andother specialized audio/video programs; and (g) live audio/video broadcasting service of cultural activities of common social organizations, sport events or otherorganization activities; and (III) Category III internet audio/video program service, including (a) aggregating service of online audio/video contents, and (b) rebroadcasting service of the audio/video programs uploaded by internet users; and (IV) Category III internet audio/video program service, including (a) rebroadcasting of the radio/television program channels; and (b) rebroadcasting of internet audio/video program channels.On May 27, 2016, the SAPPRFT issued the Notice on Relevant Issues concerning Implementing the Approval Works of Upgrading Mobile Internet AudioVideo Program Service, or the Mobile AudioVideo Program Notice. The Mobile AudioVideo Program Notice provides that the mobile Internet audiovideo programservices shall be deemed Internet audiovideo program service. Entities which have obtained the approvals to provide the Internet audiovideo program servicesmay use mobile WAP websites or mobile applications to provide audiovideo program services. Entities with regulatory approvals may operate mobile applicationsto provide the audiovideo program services The types of the programs shall be within the permitted scope as provided in the licenses and such mobile applicationsshall be filed with the SAPPRFT.Regulations on Production and Operation of Radio/Television ProgramsOn July 19, 2004, the SAPPRFT promulgated the Administrative Measures on the Production and Operation of Radio and Television Programs, or the Radioand Television Program Production Measures, which came into effect on August 20, 2004 and was amended on August 28, 2015. The Radio and Television ProgramProduction Measures provides that any business that produces or operates radio or television programs must first obtain a Radio and Television ProgramProduction and Operation Permit. Entities holding such permits shall conduct their business within the permitted scope as provided in their permits. In addition,foreigninvested enterprises are not allowed to engage in the abovementioned services.Regulations on Online Advertising ServicesOn April 24, 2015, the Standing Committee of the National People’s Congress enacted the Advertising Law of the People’s Republic of China, or the NewAdvertising Law, effective on September 1, 2015. The New Advertising Law increases the potential legal liability of advertising services providers and strengthensregulations of false advertising. On July 4, 2016, the State Administration for Industry and Commerce, or the SAIC, issued the Interim Measures of theAdministration of Online Advertising, or the SAIC Interim Measures, effective on September 1, 2016. The New Advertising Law and the SAIC Interim Measuresrequire that online advertisements may not affect users’ normal internet use and internet popup ads must display a “close” sign prominently and ensure onekeyclosing of the popup windows. The SAIC Interim Measures provides that all online advertisements must be marked “Advertisement” so that viewers can easilyidentify them as such. Moreover, the SAIC Interim Measures treats paid search results as advertisements that are subject to PRC advertisement laws, and requiresthat paid search results be conspicuously identified on search result pages as advertisements. The New Advertising Law and SAIC Interim Measures require us toconduct more stringent examination and monitoring of our advertisers and the content of their advertisements.55Regulations on Online GamesIn September 2009, the GAPP (currently known as the SAPPRFT), together with the National Copyright Administration, and the National Office ofCombating Pornography and Illegal Publications jointly issued the Notice on Further Strengthening on the Administration of Preexamination and Approval ofOnline Game and the Examination and Approval of Imported Online Game, or the Circular 13. The Circular 13 states that foreign investors are not permitted to investin online game operating businesses in the PRC via wholly foreignowned entities, Sinoforeign equity joint ventures or cooperative joint ventures or to exercisecontrol over or participate in the operation of domestic online game businesses through indirect means, such as other joint venture companies or contractual ortechnical arrangements. If the our contractual arrangements were deemed under the Circular 13 to be an “indirect means” for foreign investors to exercise controlover or participate in the operation of a domestic online game business, our contractual arrangements might be challenged by the SAPPRFT. We are not aware ofany online game companies which use the same or similar contractual arrangements having been challenged by the SAPPRFT as using those contractualarrangements as an “indirect means” for foreign investors to exercise control over or participate in the operation of a domestic online game business or having beenpenalized or ordered to terminate operations since the Circular 13 became effective. However it is unclear whether and how the Circular 13 might be interpreted orimplemented in the future. See “Risk Factors—If the PRC government finds that the agreements that establish the structure for operating certain of our operations inChina do not comply with PRC regulations relating to the relevant industries, or if these regulations or the interpretation of existing regulations change in the future,we could be subject to severe penalties or be forced to relinquish our interests in those operations.”The Interim Measures for the Administration of Online Games, or the Online Game Measures, issued by the MOC, which took effect on August 1, 2010 andamended on December 15, 2017, regulates a broad range of activities related to the online games business, including the development, production and operation ofonline games, the issuance of virtual currencies used for online games, and the provision of virtual currency trading services. The Online Game Measures providesthat any entity that is engaged in online game operations must obtain an Network Cultural Business Permit, and require the content of an imported online game to beexamined and approved by the MOC prior to the game’s launch and require a domestic online game to be filed with the MOC within 30 days after its launch. TheNotice of the Ministry of Culture on the Implementation of the Interim Measures for the Administration of Online Games, which was issued by the MOC on July 29,2010 to implement the Online Game Measures, (i) requires online game operators to protect the interests of online game users and specifies that certain terms thatmust be included in service agreements between online game operators and the users of their online games, (ii) requires content review of imported online gamesand filing procedures for domestic online games, (iii) emphasizes the protection of minors playing online games, and (iv) requests online game operators to promoterealname registration by their game users.Regulations on Information Security, Censorship and PrivacyThe Standing Committee of the National People’s Congress, China’s national legislative body, enacted the Decisions on the Maintenance of InternetSecurity on December 28, 2000 that may subject persons to criminal liabilities in China for any attempt to use the internet to: (i) gain improper entry to a computer orsystem of strategic importance; (ii) disseminate politically disruptive information; (iii) leak state secrets; (iv) spread false commercial information or (v) infringe uponintellectual property rights. In 1997, the Ministry of Public Security issued the Administration Measures on the Security Protection of Computer InformationNetwork with International Connections which prohibits using the internet to leak state secrets or to spread socially destabilizing materials. If an ICP license holderviolates these measures, the PRC government may revoke its ICP license and shut down its websites. Pursuant to the Ninth Amendment to the Criminal Law issuedby the Standing Committee of the National People’s Congress on August 29, 2015, effective on November 1, 2015, any ICP provider that fails to fulfill the obligationsrelated to internet information security as required by applicable laws and refuses to take corrective measures, will be subject to criminal liability for (i) any largescale dissemination of illegal information; (ii) any severe effect due to the leakage of users’ personal information; (iii) any serious loss of evidence of criminalactivities; or (iv) other severe situations, and any individual or entity that (i) sells or provides personal information to others unlawfully or (ii) steals or illegallyobtains any personal information will be subject to criminal liability in severe situations.56The Cybersecurity Law of the PRC, or the Cybersecurity Law, which was promulgated on November 7, 2016 by the Standing Committee of the NationalPeople’s Congress and came into effect on June 1, 2017, provides that network operators shall meet their cyber security obligations and shall take technicalmeasures and other necessary measures to protect the safety and stability of their networks. Under the Cybersecurity Law, network operators are subject to varioussecurity protectionrelated obligations, including: (i) network operators shall comply with certain obligations regarding maintenance of the security of internetsystems; (ii) network operators shall verify users’ identities before signing agreements or providing certain services such as information publishing or realtimecommunication services; (iii) when collecting or using personal information, network operators shall clearly indicate the purposes, methods and scope of theinformation collection, the use of information collection, and obtain the consent of those from whom the information is collected; (iv) network operators shall strictlypreserve the privacy of user information they collect, and establish and maintain systems to protect user privacy; (v) network operators shall strengthenmanagement of information published by users, and when they discover information prohibited by laws and regulations from publication or dissemination, theyshall immediately stop dissemination of that information, including taking measures such as deleting the information, preventing the information from spreading,saving relevant records, and reporting to the relevant governmental agencies.Regulations on Intellectual Property RightsRegulations on CopyrightThe Copyright Law of the PRC, or the Copyright Law, which took effect on June 1, 1991 and was amended in 2001 and in 2010, provides that Chinesecitizens, legal persons, or other organizations shall, whether published or not, own copyright in their copyrightable works, which include, among others, works ofliterature, art, natural science, social science, engineering technology and computer software. Copyright owners enjoy certain legal rights, including right ofpublication, right of authorship and right of reproduction. The Copyright Law as revised in 2010 extends copyright protection to Internet activities, productsdisseminated over the Internet and software products. In addition, Copyright Law provides for a voluntary registration system administered by the China CopyrightProtection Center, or the CPCC. According to the Copyright Law, an infringer of the copyrights shall be subject to various civil liabilities, which include ceasinginfringement activities, apologizing to the copyright owners and compensating the loss of copyright owner. Infringers of copyright may also subject to fines and/oradministrative or criminal liabilities in severe situations.The Computer Software Copyright Registration Measures, or the Software Copyright Measures, promulgated by the State Council on December 20, 2001and amended on January 30, 2013, regulates registrations of software copyright, exclusive licensing contracts for software copyright and assignment agreements.The National Copyright Administration, or the NCA administers software copyright registration and the CPCC, is designated as the software registration authority.The CPCC shall grant registration certificates to the Computer Software Copyrights applicants which meet the requirements of both the Software CopyrightMeasures and the Computer Software Protection Regulations (Revised in 2013).The Provisions of the Supreme People’s Court on Certain Issues Related to the Application of Law in the Trial of Civil Cases Involving Disputes onInfringement of the Information Network Dissemination Rights specifies that disseminating works, performances or audiovideo products by the internet users orthe internet service providers via the internet without the permission of the copyright owners shall be deemed to have infringed the right of dissemination of thecopyright owner.57The Measures for Administrative Protection of Copyright Related to Internet, which was jointly promulgated by the NCA and the MIIT on April 29, 2005and became effective on May 30, 2005, provides that upon receipt of an infringement notice from a legitimate copyright holder, an ICP operator must take remedialactions immediately by removing or disabling access to the infringing content. If an ICP operator knowingly transmits infringing content or fails to take remedialactions after receipt of a notice of infringement that harms public interest, the ICP operator could be subject to administrative penalties, including an order to ceaseinfringing activities, confiscation by the authorities of all income derived from the infringement activities, or payment of fines.On May 18, 2006, the State Council promulgated the Regulations on the Protection of the Right to Network Dissemination of Information (as amended in2013). Under these regulations, an owner of the network dissemination rights with respect to written works or audio or video recordings who believes thatinformation storage, search or link services provided by an Internet service provider infringe his or her rights may require that the Internet service provider delete, ordisconnect the links to, such works or recordings.Patent LawsAccording to the Patent Law of the PRC (Revised in 2008), the State Intellectual Property Office is responsible for administering patent law in the PRC. Thepatent administration departments of provincial, autonomous region or municipal governments are responsible for administering patent law within their respectivejurisdictions. The Chinese patent system adopts a firsttofile principle, which means that when more than one person file different patent applications for the sameinvention, only the person who files the application first is entitled to obtain a patent of the invention. To be patentable, an invention or a utility model must meetthree criteria: novelty, inventiveness and practicability. A patent is valid for twenty years in the case of an invention and ten years in the case of utility models anddesigns.Trademark LawsTrademarks are protected by the Trademark Law of the PRC (Revised in 2013) which was adopted in 1982 and subsequently amended in 1993, 2001 and 2013respectively as well as by the Implementation Regulations of the PRC Trademark Law adopted by the State Council in 2002 and as most recently amended on April29, 2014. The Trademark Office under the SAIC handles trademark registrations. The Trademark Office grants a tenyear term to registered trademarks and the termmay be renewed for another tenyear period upon request by the trademark owner. A trademark registrant may license its registered trademarks to another party byentering into trademark license agreements, which must be filed with the Trademark Office for its record. As with patents, the Trademark Law has adopted a firsttofile principle with respect to trademark registration. If a trademark applied for is identical or similar to another trademark which has already been registered or subjectto a preliminary examination and approval for use on the same or similar kinds of products or services, such trademark application may be rejected. Any personapplying for the registration of a trademark may not injure existing trademark rights first obtained by others, nor may any person register in advance a trademark thathas already been used by another party and has already gained a “sufficient degree of reputation” through such party’s use.Regulations on Domain NamesThe MIIT promulgated the Measures on Administration of Internet Domain Names, or the Domain Name Measures, on August 24, 2017, which took effecton November 1, 2017 and replaced the Administrative Measures on China Internet Domain Name promulgated by MII on November 5, 2004. According to theDomain Name Measures, the MIIT is in charge of the administration of PRC internet domain names. The domain name registration follows a firsttofile principle.Applicants for registration of domain names shall provide the true, accurate and complete information of their identities to domain name registration serviceinstitutions. The applicants will become the holder of such domain names upon the completion of the registration procedure.Relevant Regulations of the Hightech EnterpriseThe Ministry of Information Industry, the Ministry of Science and Technology and the State Tax Bureau collectively promulgated and issued the“Certifying Standard and Managing Measures for Hightech Enterprises” and “the Hightech Areas of Main National Support” on April 14, 2008 to certify the Hightech enterprise and encourage and support the development of the Chinese Hightech enterprises. Under the Hightech Enterprises Measures, the enterprise canenjoy the favorable tax policy when it is certified as a Hightech enterprise by the Ministry of Information Industry, the Ministry of Science and Technology and theState Tax Bureau or with its provincial branch according to the stipulated standard. The software and computer and network technology are recognized as the mainnational supported Hightech field. Kingtone Information is a Hightech enterprise and enjoys a favorable income tax rate of 15%.58Laws and Regulations of Intellectual Property RightsChina has adopted legislation governing intellectual property rights, including patents, copyrights and trademarks. China is a signatory to the maininternational conventions on intellectual property rights and became a member of the Agreement on Trade Related Aspects of Intellectual Property Rights upon itsaccession to the WTO in December 2001.PatentsThe “Patent Law of the People’s Republic of China” promulgated by the Standing Committee of the National People's Congress, adopted in 1985 andrevised in 1992, 2001 and 2008, protects registered patents. The State Intellectual Property Office of PRC handles granting patent rights, providing for a twentyyearpatent term for inventions and a tenyear patent term for utility models and designs. As we disclosed in Item 4, of this transition report on Form 20F, throughKingtone Information, we have been granted one invention patent “wireless video transmission system based on BREW platform” by the State Intellectual PropertyOffice (“SIPO”) of PRC on September 23, 2009 and therefore such invention is entitled to all the protections provided under the Patent Law for twenty years.Computer Software Copyright and AdministrationOn December 20, 2001, the State Council of PRC issued the “Regulation for Computer Software Protection of the People’s Republic of China” (the“Regulation for Computer Software Protection”) which became effective on January 1, 2002 to protect the interests of copyright owners, to promote the research andapplication and to encourage the development of the Chinese software industry. Under the Regulation for Computer Software Protection, natural persons, legalpersons or any other organizations shall have a copyright on the software developed by such persons no matter whether such software has been published. Theprotection period of software copyrights owned by the legal person or other organization is fifty years and expires on December 31 of the fiftieth year from the initialpublication date of such computer software. Currently, Kingtone Information has twelve registration certificates for software copyrights.TrademarksThe “Trademark Law of the People’s Republic of China” promulgated by the State Council of PRC, adopted in 1982 and revised in 1993 and 2001, protectsregistered trademarks. The Trademark Office under the Chinese State Administration for Industry and Commerce handles trademark registrations and grants a termof ten years to registered trademarks which are renewable for another ten years after the application to the Trademark Office by the owners of the trademarks.Trademark license agreements must be filed with the Trademark Office for record. China has a “firsttoregister” system that requires no evidence of prior use orownership. Kingtone Information has its registered trademarks as described in Item 4 of this transition report on Form 20F. Accordingly, such trademarks areentitled to the protection under the Trademark Law.Foreign Currency ExchangeOn August 29, 2008, the SAFE issued the Notice of the General Affairs Department of the State Administration of Foreign Exchange on the RelevantOperating Issues concerning the Improvement of the Administration of Payment and Settlement of Foreign Currency Capital of Foreignfunded Enterprises, orCircular 142. Pursuant to Circular 142, RMB converted from the foreign currencydenominated capital of a foreigninvested company may only be used for purposeswithin the business scope approved by the applicable governmental authority and may not be used for equity investments within the PRC unless specificallyprovided for otherwise. The use of such Renminbi capital may not be changed without SAFE’s approval and may not in any case be used to repay Renminbi loans ifthe proceeds of such loans have not been used.59See “Risk Factors — Risks Related to Doing Business in China — PRC regulation of loans and direct investment by offshore holding companies to PRCentities may delay or prevent us from using the proceeds of our initial public offering to make loans or additional capital contributions to our PRC operatingsubsidiaries, which could materially and adversely affect our liquidity and our ability to fund and expand our business”.Dividend DistributionWe are a British Virgin Islands holding company and substantially all of our operations are conducted through LK Technology. We rely on dividends andother distributions from our LK Technology and its subsidiaries to provide us with our cash flow and allow us to pay dividends on the shares underlying our ADSsand meet our other obligations. The principal regulations governing distribution of dividends paid by wholly foreignowned enterprises include:1.Wholly ForeignOwned Enterprise Law (1986), as amended; and2.Implementation Rules on Wholly ForeignOwned Enterprise Law (1990), as amended.Under these regulations, wholly foreignowned enterprises in China may pay dividends only out of their accumulated profits, if any, determined inaccordance with PRC accounting standards and regulations. In addition, wholly foreignowned enterprises in China are required to set aside at least 10% of theiraftertax profit based on PRC accounting standards each year to its general reserves until the accumulative amount of such reserves reach 50% of its registeredcapital. These reserves are not distributable as cash dividends. The board of directors of a FIE has the discretion to allocate a portion of its aftertax profits to staffwelfare and bonus funds, which may not be distributed to equity owners except in the event of liquidation.Regulation of Foreign Exchange in Certain Onshore and Offshore TransactionsIn October 2005, the SAFE issued the Notice on Issues Relating to the Administration of Foreign Exchange in Fundraising and Return InvestmentActivities of Domestic Residents Conducted via Offshore Special Purpose Companies, or SAFE Notice 75, which became effective as of November 1, 2005, and wasfurther supplemented by two implementation notices issued by the SAFE on November 24, 2005 and May 29, 2007, respectively. Under Circular 75, prior registrationwith the local SAFE branch is required for PRC residents to establish or to control an offshore company for the purposes of financing that offshore company withassets or equity interests in an onshore enterprise located in the PRC. An amendment to the registration or filing with the local SAFE branch by such PRC resident isalso required for the injection of equity interests or assets of an onshore enterprise in the offshore company or overseas funds raised by such offshore company, orany other material change with respect to the offshore company in connection with any increase or decrease of capital, transfer of shares, merger, division, equityinvestment, debt investment, or creation of any security interest over any assets located in the PRC.Under SAFE Notice 75, PRC residents are further required to repatriate into the PRC all of their dividends, profits or capital gains obtained from theirshareholdings in the offshore entity within 180 days of their receipt of such dividends, profits or capital gains. The registration and filing procedures under SAFENotice 75 are prerequisites for other approval and registration procedures necessary for capital inflow from the offshore entity, such as inbound investments orshareholders loans, or capital outflow to the offshore entity, such as the payment of profits or dividends, liquidating distributions, equity sale proceeds, or thereturn of funds upon a capital reduction. Therefore, failure to comply with such registration may subject us to certain restrictions on, including but not limited to, theincrease of the registered capital of our PRC subsidiary, making loans to our PRC subsidiary, and making distributions to us from our onshore companies.Regulations of Overseas Investments and ListingsOn August 8, 2006, six PRC regulatory agencies, including the MOFCOM, the State Assets Supervision and Administration Commission, the StateAdministration for Taxation, the State Administration for Industry and Commerce, the CSRC and the SAFE, jointly adopted the New M&A Rule, which becameeffective on September 8, 2006. This regulation, among other things, includes provisions that purport to require that an offshore SPV formed for purposes ofoverseas listing of equity interests in PRC companies and controlled directly or indirectly by PRC companies or individuals obtain the approval of the CSRC prior tothe listing and trading of such SPV’s securities on an overseas stock exchange.60On September 21, 2006, the CSRC published on its official website procedures regarding its approval of overseas listings by SPVs. The CSRC approvalprocedures require the filing of a number of documents with the CSRC and it would take several months to complete the approval process.The application of the New M&A Rule with respect to overseas listings of SPVs remains unclear with no consensus currently existing among the leadingPRC law firms regarding the scope of the applicability of the CSRC approval requirement.We believe that, based on our understanding of the current PRC laws, regulations and rules and the procedures announced on September 21, 2006, there isno requirement in this regulation that would require an application to be submitted to the MOFCOM or the CSRC for the approval of the listing and trading of ourADSs on the NASDAQ Capital Market.See “Risk Factors — Risks Related to Doing Business in China — If we were required to obtain the prior approval of the China Securities RegulatoryCommission, or CSRC, of the listing and trading of our ADSs on the NASDAQ Capital Market, we may face regulatory actions or other sanctions from the CSRC orother PRC regulatory agencies.”E. TAXATIONThe following discussion sets forth the material British Virgin Islands, PRC and U.S. federal income tax consequences of an investment in our ADSs andthe ordinary shares represented by our ADSs, sometimes referred to collectively as the “securities”. It is based upon laws and relevant interpretations thereof ineffect as of the date of this report, all of which are subject to change. This discussion does not deal with all possible tax consequences relating to an investment inthe securities, such as the tax consequences under state, local and other tax laws. As used in this discussion, “we,” “our” and “us” refers only to LuokungTechnology Ltd.British Virgin Islands TaxationUnder the law of the British Virgin Islands as currently in effect, a holder of the securities who is not a resident of the British Virgin Islands is not liable forBritish Virgin Islands tax on dividends paid with respect to the securities and all holders of the securities are not liable to the British Virgin Islands for tax on gainsrealized during that year on the sale or disposal of such ordinary shares. The British Virgin Islands does not impose a withholding tax on dividends paid by acompany incorporated or reregistered under the BVI Act.There are no capital gains, gift or inheritance taxes levied by the British Virgin Islands on companies incorporated under the BVI Act. In addition, shares ofcompanies incorporated under the BVI Act are not subject to transfer taxes, stamp duties or similar charges.There is no income tax treaty or convention currently in effect between the United States and the British Virgin Islands or between China and the BritishVirgin Islands.61People’s Republic of China TaxationIn 2007, the PRC National People’s Congress enacted the new Enterprise Income Tax Law (the “EIT Law”), which became effective on January 1, 2008. Thenew EIT Law imposes a single uniform income tax rate of 25% on all Chinese enterprises, including foreigninvested enterprises, and levies a withholding tax rate of10% on dividends payable by Chinese subsidiaries to their foreign shareholders unless any such foreign shareholders’ jurisdiction of incorporation has a tax treatywith China that provides for a different withholding agreement. Under the new EIT Law, enterprises established outside China but deemed to have a “de factomanagement body” within the country may be considered “resident enterprises” for Chinese tax purposes and, therefore, may be subject to an enterprise income taxrate of 25% on their worldwide income. Pursuant to the implementation rules of the new EIT Law, a “de facto management body” is defined as a body that hasmaterial and overall management control over the business, personnel, accounts and properties of the enterprise. Although substantially all members of ourmanagement are located in China, it is unclear whether Chinese tax authorities would require (or permit) us to be treated as PRC resident enterprises. If we aredeemed a Chinese tax resident enterprise, we may be subject to an enterprise income tax rate of 25% on our worldwide income, excluding dividends received directlyfrom another Chinese tax resident enterprise, as well as PRC enterprise income tax reporting obligations. If we are not deemed to be a Chinese tax resident enterprise,we may be subject to certain PRC withholding taxes. See “Risk Factors — Risks Related to Doing Business in China — Our holding company structure may limit thepayment of dividends.” As a result of such changes, our historical tax rates may not be indicative of our tax rates for future periods and the value of our ADSs orordinary shares may be adversely affected. If we are deemed a PRC resident enterprise and investors’ gain from the sales of the securities and dividends payable byus are deemed sourced from China, such gains and dividends payable by us may be subject to PRC tax. See “Risk Factors — Risks Related to Doing Business inChina — If we were deemed a “resident enterprise” by PRC tax authorities, we could be subject to tax on our global income at the rate of 25% under the New EITLaw and our nonPRC shareholders could be subject to certain PRC taxes.United States Federal Income TaxationGeneralThe following is a discussion of the material U.S. federal income tax consequences to an investor of purchasing, owning and disposing of our securities.This discussion does not address any aspects of U.S. federal gift or estate tax or the state, local or nonU.S. tax consequences of an investment in the securities.YOU SHOULD CONSULT YOUR OWN TAX ADVISORS CONCERNING THE U.S. FEDERAL, STATE, LOCAL AND NONU.S. TAX CONSEQUENCES OFPURCHASING, OWNING AND DISPOSING OF THE SECURITIES IN YOUR PARTICULAR SITUATION.This discussion applies only to those investors that purchase the securities in this offering and that hold the securities as capital assets within the meaningof section 1221 of the Internal Revenue Code of 1986, as amended (the “Code”). This section does not apply to holders that may be subject to special tax rules,including but not limited to:1.dealers in securities or currencies;2.traders in securities that elect to use a marktomarket method of accounting;3.banks, insurance companies or certain financial institutions;4.taxexempt organizations;5.governments or agencies or instrumentalities thereof;6.partnerships or other entities treated as partnerships or other passthrough entities for U.S. federal income tax purposes or persons holding thesecurities through such entities;7.regulated investment companies or real estate investment trusts;8.holders subject to the alternative minimum tax;9.holders that actually or constructively own 10% or more of the total combined voting power of all classes of our shares entitled to vote;10.holders that acquired the securities pursuant to the exercise of employee stock options, in connection with employee stock incentive plans orotherwise as compensation;11.holders that hold the securities as part of a straddle, hedging or conversion transaction; or12.holders whose functional currency is not the U.S. dollar.62This section is based on the Code, its legislative history, existing and proposed U.S. Treasury regulations, published rulings and other administrativeguidance of the U.S. Internal Revenue Service (the “IRS”) and court decisions, all as in effect on the date hereof. These laws are subject to change or differentinterpretation by the IRS or a court, possibly on a retroactive basis.We have not sought, and will not seek, a ruling from the IRS as to any U.S. federal income tax consequence described herein. The IRS may disagree withthe discussion herein, and its determination may be upheld by a court. Moreover, there can be no assurance that future legislation, regulation, administrative rulingsor court decisions will not adversely affect the accuracy of the statements in this discussion.The discussion below of the U.S. federal income tax consequences to “U.S. Holders” will apply to a beneficial owner of the securities that is for U.S. federalincome tax purposes:1.a citizen or resident of the United States;2.a corporation (or other entity treated as a corporation) that is created or organized (or treated as created or3.organized) under the laws of the United States, any state thereof or the District of Columbia;4.an estate whose income is subject to U.S. federal income tax regardless of its source; or5.a trust if (a) a U.S. court can exercise primary supervision over the trust’s administration and one or more U.S.6.persons are authorized to control all substantial decisions of the trust, or (b) if the trust has a valid election in effect under applicable U.S.Treasury regulations to be treated as a U.S. person.If a beneficial owner of the securities is not described as a U.S. Holder and is not an entity treated as a partnership or other passthrough entity for U.S.federal income tax purposes, such owner will be considered a “NonU.S. Holder.” The material U.S. federal income tax consequences applicable specifically to NonU.S. Holders are described below under the heading “Tax Consequences to NonU.S. Holders.”If a partnership (including for this purpose any entity treated as a partnership for U.S. tax purposes) is a beneficial owner of the securities, the U.S. taxtreatment of a partner in the partnership generally will depend on the status of the partner and the activities of the partnership. A holder of the securities that is apartnership or partners in such a partnership should consult their own tax advisors about the U.S. federal income tax consequences of holding and disposing of thesecurities.This discussion assumes that any distributions made (or deemed made) on the securities and any consideration received by a holder in consideration forthe sale or other disposition of the securities will be in U.S. dollars. This discussion also assumes that the representations contained in the Deposit Agreement aretrue and that the obligations in the Deposit Agreement and any related agreement will be complied with in accordance with their terms. Finally, this discussionassumes that each ADS will only represent ordinary shares in us, and will not represent any other type of security, such as a bond, cash or other property.63For U.S. federal income tax purposes, a holder of an ADS will be treated as the beneficial owner of the shares represented by such ADS and an exchange ofan ADS for ordinary shares will not be subject to U.S. federal income tax. The U.S. Treasury has expressed concerns that parties to whom ADSs are prereleased, orintermediaries in the chain of ownership between holders of ADSs and the issuer of the securities underlying the ADSs may be taking actions that are inconsistentwith the claiming of foreign tax credits by U.S. Holders of ADSs. Such actions would also be inconsistent with the claiming of the reduced rate of tax applicable todividends received by certain noncorporate U.S. Holders, including individual U.S. Holders, as described below under “Tax Consequences to U.S.Holders — Taxation of Distributions.” Accordingly, the availability of foreign tax credits or the reduced tax rate for dividends received by certain noncorporate U.S.Holders, including individual U.S. Holders, could be affected by actions taken by parties to whom the ADSs are released, or by future actions by the U.S. Treasury.Tax Consequences to U.S. HoldersTaxation of DistributionsSubject to the passive foreign investment company, or PFIC, rules discussed below, the gross amount of any cash distributions we make with respect to aU.S. Holder in respect of such U.S. Holder’s ADSs or shares will generally be treated as dividend income if the distributions are made from our current oraccumulated earnings and profits, calculated according to U.S. federal income tax principles. Cash dividends will generally be subject to U.S. federal income tax asordinary income on the day the U.S. Holder actually or constructively receives such income. With respect to noncorporate U.S. Holders for taxable years beginningbefore January 1, 2011, dividends may be taxed at the lower applicable longterm capital gains rate provided that (a) our ADSs or shares are readily tradable on anestablished securities market in the United States, or, in the event we are deemed to be a Chinese “resident enterprise” under the EIT Law (as described above under“People’s Republic of China Taxation”), we are eligible for the benefits of the income tax treaty between the United States and the PRC (the “U.S.PRC Tax Treaty”),(b) we are not a PFIC, as discussed below, for either the taxable year in which the dividend was paid or the preceding taxable year, and (c) certain holding periodrequirements are met. Under published IRS authority, ADSs are considered for purposes of clause (a) above to be readily tradable on an established securitiesmarket in the United States only if they are listed on certain exchanges, which presently include the NASDAQ Capital Market. U.S. Holders should consult their owntax advisors regarding the availability of the lower rate for any dividends paid with respect to our ADSs or shares.Dividends will not be eligible for the dividendsreceived deduction allowed to U.S. corporations in respect of dividends received from other U.S.corporations. Generally, if we distribute noncash property as a dividend (other than pro rata distributions of our shares) out of our current or accumulated earningsand profits (as determined for U.S. federal income tax purposes), a U.S. Holder generally will include in income an amount equal to the fair market value of theproperty, on the date that it is distributed.Distributions in excess of current and accumulated earnings and profits, as determined for U.S. federal income tax purposes, will be treated as a nontaxablereturn of capital to the extent of the U.S. Holder’s basis in its shares or ADSs and thereafter as capital gain. However, we do not plan on calculating our earnings andprofits in accordance with U.S. federal income tax principles. U.S. holders therefore should generally assume that any distributions paid by us will be treated asdividends for U.S. federal income tax purposes.If PRC taxes apply to dividends paid by us to a U.S. Holder (see “People’s Republic of China Taxation,” above), such taxes may be treated as foreign taxeseligible for credit against such holder’s U.S. federal income tax liability (subject to certain limitations), and a U.S. Holder may be entitled to certain benefits under theU.S.PRC Tax Treaty. The rules relating to the U.S. foreign tax credit are complex. U.S. Holders should consult their own tax advisors regarding the creditability ofany such PRC tax and their eligibility for the benefits of the U.S.PRC Tax Treaty.64Taxation of Dispositions of SharesSubject to the PFIC rules discussed below, a U.S. holder that sells or otherwise disposes of its shares will recognize capital gain or loss for U.S. federalincome tax purposes equal to the difference between the amount realized and such U.S. Holder’s tax basis in its shares. Prior to January 1, 2011, capital gains of anoncorporate U.S. holder are generally taxed at a maximum rate of 15% where the property is held for more than one year (and 20% thereafter). The ability to deductcapital losses is subject to limitations.If PRC taxes apply to any gain from the disposition of our shares by a U.S. Holder, such taxes may be treated as foreign taxes eligible for credit against suchholder’s U.S. federal income tax liability (subject to certain limitations), and a U.S. Holder may be entitled to certain benefits under the U.S.PRC Tax Treaty. U.S.Holders should consult their own tax advisors regarding the creditability of any such PRC tax and their eligibility for the benefits of the U.S.PRC Tax Treaty.Passive Foreign Investment CompanyWe do not expect to be a PFIC for U.S. federal income tax purposes for our current tax year or in the foreseeable future. The determination of whether or notwe are a PFIC in respect of any of our taxable years is a factual determination that cannot be made until the close of the applicable tax year and that is based on thetypes of income we earn and the value and composition of our assets (including goodwill), all of which are subject to change. Therefore, we can make no assurancesthat we will not be a PFIC in respect of our current taxable year or in the future.In general, we will be a PFIC in any taxable year if either:1.at least 75% of our gross income for the taxable year is passive income; or2.at least 50% of the value, determined on the basis of a quarterly average, of our assets is attributable to assets that produce or are held for theproduction of passive income.Passive income includes dividends, interest, royalties, rents (other than certain rents and royalties derived in the active conduct of a trade or business), theexcess of gains over losses from certain types of transactions in commodities, annuities and gains from assets that produce passive income. We will be treated asowning our proportionate share of the assets and earning our proportionate share of the income of any corporation in which we own, directly or indirectly, at least25% (by value) of the stock.If we are treated as a PFIC in any year during which a U.S. Holder owns the securities, and such U.S. Holder did not make a marktomarket election, asdescribed below, the U.S. Holder will be subject to special rules with respect to:1.any gain recognized by the U.S. Holder on the sale or other disposition of its shares; and any excess distribution that we make to the U.S. Holder(generally, the excess of the amount of any distributions to such U.S. Holder during a single taxable year of such U.S. Holder over 125% of theaverage annual distributions received by such U.S. Holder in respect of the shares during the three preceding taxable years of such U.S. Holder or,if shorter, such U.S. Holder holding period for the shares).Under these rules:2.the gain or excess distribution will be allocated ratably over the U.S. Holder’s holding period for the shares;3.the amount allocated to the U.S. Holder’s taxable year in which it realized the gain or excess distribution or to the period in the U.S. Holder’sholding period before the first day of our first taxable year in which we are a PFIC will be taxed as ordinary income;4.the amount allocated to other taxable years (or portions thereof) of the U.S. Holder and included in its holding period will be taxed at the highesttax rate in effect for that year; and5.the interest charge generally applicable to underpayments of tax will be imposed in respect of the tax attributable to each such other taxable yearof the U.S. Holder. 6.Special rules apply for calculating the amount of the foreign tax credit with respect to excess distributions by a PFIC.65Alternatively, if a U.S. Holder, at the close of its taxable year, owns ordinary shares in a PFIC that are treated as marketable stock, the U.S. Holder may makea marktomarket election with respect to such shares for such taxable year. Our shares will be “marketable” to the extent that they remain regularly traded on anational securities exchange, such as the NASDAQ Capital Market. If a U.S. Holder makes this election in a timely fashion, it will not be subject to the PFIC rulesdescribed above. Instead, in general, the U.S. Holder will include as ordinary income each year the excess, if any, of the fair market value of its shares at the end ofthe taxable year over its adjusted basis in its shares. Any ordinary income resulting from this election would generally be taxed at ordinary income tax rates andwould not be eligible for the reduced rate of tax applicable to qualified dividend income. The U.S. Holder will also be allowed to take an ordinary loss in respect ofthe excess, if any, of the adjusted basis of its shares over the fair market value at the end of the taxable year (but only to the extent of the net amount of previouslyincluded income as a result of the marktomarket election). The U.S. Holder’s basis in the shares will be adjusted to reflect any such income or loss amounts. U.S.Holders should consult their own tax advisor regarding potential advantages and disadvantages of making a marktomarket election with respect to their shares.Alternatively, a U.S. Holder of stock in a PFIC may avoid the PFIC tax consequences described above in respect to our or shares by making a timely“qualified electing fund” election to include in income its pro rata share of our net capital gains (as longterm capital gain) and other earnings and profits (asordinary income), on a current basis, in each case whether or not distributed, in the taxable year of the U.S. Holder in which or with which our taxable year ends.However, the qualified electing fund election is available only if the PFIC provides such U.S. Holder with certain information regarding its earnings and profits asrequired under applicable U.S. Treasury regulations. We do not intend to furnish the information that a U.S. Holder would need in order to make a qualified electingfund election. Therefore, U.S. Holders will not be able to make or maintain such election with respect to their or shares.If a U.S. Holder owns our shares or during any year that we are a PFIC, such holder must file U.S. Internal Revenue Service Form 8621 regarding suchholder’s shares or and the gain realized on the disposition of the shares. The reduced tax rate for dividend income, discussed in “Taxation of Distributions,” is notapplicable to dividends paid by a PFIC. U.S. Holders should consult with their own tax advisors regarding reporting requirements with respect to their shares.Tax Consequences to NonU.S. HoldersDividends paid to a NonU.S. Holder in respect of our or shares generally will not be subject to U.S. federal income tax, unless the dividends are effectivelyconnected with the NonU.S. Holder’s conduct of a trade or business within the United States (and, if required by an applicable income tax treaty, are attributable toa permanent establishment or fixed base that such holder maintains in the United States).In addition, a NonU.S. Holder generally will not be subject to U.S. federal income tax on any gain attributable to a sale or other disposition of our or sharesunless such gain is effectively connected with its conduct of a trade or business in the United States (and, if required by an applicable income tax treaty, isattributable to a permanent establishment or fixed base that such holder maintains in the United States) or the NonU.S. Holder is an individual who is present in theUnited States for 183 days or more in the taxable year of sale or other disposition and certain other conditions are met (in which case, such gain from United Statessources generally is subject to tax at a 30% rate or a lower applicable tax treaty rate).Dividends and gains that are effectively connected with the NonU.S. Holder’s conduct of a trade or business in the United States (and, if required by anapplicable income tax treaty, are attributable to a permanent establishment or fixed base in the United States) generally will be subject to tax in the same manner as fora U.S. Holder and, in the case of a NonU.S. Holder that is a corporation for U.S. federal income tax purposes, may also be subject to an additional branch profits taxat a 30% rate or a lower applicable tax treaty rate.66Information Reporting and Backup Withholding In general, information reporting for U.S. federal income tax purposes generally should apply to distributions made on the securities within the UnitedStates to a noncorporate U.S. Holder and to the proceeds from sales and other dispositions of the securities by a noncorporate U.S. Holder to or through a U.S.office of a broker. Payments made (and sales and other dispositions effected at an office) outside the United States generally should be subject to informationreporting in limited circumstances.Dividend payments made to U.S. Holders and proceeds paid from the sale or other disposition the securities may be subject to information reporting to theIRS and possible U.S. federal backup withholding at a current rate of 28%. Certain exempt recipients, such as corporations, are not subject to these informationreporting requirements. Backup withholding will not apply to a U.S. Holder who furnishes a correct taxpayer identification number and makes any other requiredcertification, or who is otherwise exempt from backup withholding. U.S. Holders who are required to establish their exempt status must provide a duly executed IRSForm W9.A NonU.S. Holder generally may eliminate the requirement for information reporting and backup withholding by providing certification of its foreignstatus, under penalties of perjury, on a duly executed applicable IRS Form W8 or by otherwise establishing an exemption.Backup withholding is not an additional tax. Rather, the amount of any backup withholding will be allowed as a credit against a U.S. Holder’s or a nonU.S.Holder’s U.S. federal income tax liability and may entitle such holder to a refund, provided that certain required information is timely furnished to the IRS.PROSPECTIVE PURCHASERS OF OUR SECURITIES SHOULD CONSULT WITH THEIR OWN TAX ADVISORS REGARDING THE APPLICATION OFTHE U.S. FEDERAL INCOME TAX LAWS TO THEIR PARTICULAR SITUATIONS AS WELL AS ANY ADDITIONAL TAX CONSEQUENCES RESULTING FROMPURCHASING, HOLDING OR DISPOSING OF OUR SECURITIES, INCLUDING THE APPLICABILITY AND EFFECT OF THE TAX LAWS OF ANY STATE, LOCALOR NONU.S. JURISDICTION, INCLUDING ESTATE, GIFT, AND INHERITANCE LAWS AND APPLICABLE TAX TREATIES.F. DIVIDENDS AND PAYING AGENTS.Not applicable.G. STATEMENT BY EXPERTS.None.H. DOCUMENTS ON DISPLAY.We previously filed a registration statement on Form F1 (File No. 333166056) with the SEC relating to our initial public offering in May 2010. This transition reportdoes not contain all of the information in the registration statement and the exhibits and financial statements included with the registration statement. References inthis transition report to any of our contracts, agreements or other documents are not necessarily complete, and you should refer to the exhibits attached to theregistration statement for copies of the actual contracts, agreements or documents. In addition, we will file transition reports on Form 20F and submit otherinformation under cover of Form 6K. As a foreign private issuer, we are exempt from the proxy requirements of Section 14 of the Exchange Act and our officers,directors and principal shareholders will be exempt from the insider shortswing disclosure and profit recovery rules of Section 16 of the Exchange Act. You may readand copy the registration statement, the related exhibits and other materials we file with the SEC at the SEC's public reference room in Washington, D.C. at 100 FStreet, Room 1580, N.E., Washington, D.C.20549. You can also request copies of those documents, upon payment of a duplicating fee, by writing to the SEC. Pleasecall the SEC at 1800SEC0330 for further information on the operation of the public reference rooms. The SEC also maintains an Internet site that contains reports,proxy and information statements and other information regarding issuers that file with the SEC. The website address is http://www.sec.gov. You may also request acopy of these filings, at no cost, by writing us at LAB 32, SOHO 3Q, No 9, Guanghua Road, Chaoyang District, Beijing, People’s Republic of China, 100020 ortelephoning us at (86) 1085866721.67I. SUBSIDIARY INFORMATIONFor a listing of our subsidiaries, see “Item 4. Information on the Company – C. Organizational Structure.”ITEM 11. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.Interest Rate RiskAs of December 31, 2017, we had no shortterm or longterm borrowings. If we borrow money in future periods, we may be exposed to interest rate risk. Ourexposure to market risk for changes in interest rates relates primarily to the interest income generated by our cash deposits with our banks and heldtomaturityinvestments. We have not used any derivative financial instruments in our investment portfolio. Interest earnings instruments carry a degree of interest rate risk. Wehave not been exposed, nor do we anticipate being exposed to material risks due to changes in interest rates. However, our future interest income may fall short ofexpectations due to changes in interest rates. Foreign Exchange RiskTranslation adjustments amounted to $90,671 and $387,375 gain as of the fiscal year ended December 31, 2017 and 2016, respectively. The Companytranslated balance sheet amounts with the exception of equity at December 31, 2017 at RMB 6.5342 to $1.00 as compared to RMB 6.9370 to $1.00 at December 31,2016. The Company stated equity accounts at their historical rate. The average translation rates applied to income statement accounts for the fiscal year endedDecember 31, 2017 and 2016 were RMB6.7356 and RMB 6.7153 to US$1.00, respectively. So far, the PRC government has been able to manage a stable exchange ratebetween RMB and the U.S. Dollar. Our future downward translation adjustments may occur and can be significant due to changes in such exchange rate.If we decide to convert our RMB into U.S. dollars for the purpose of making payments for dividends on our ordinary shares or for other business purposes,appreciation of the U.S. dollar against the RMB would have a negative effect on the U.S. dollar amount available to us.The PRC government imposes strict restrictions on PRC resident companies regarding converting RMB into foreign currencies and vice versa under capitalaccount transactions, such as receiving equity investments from outside of the PRC, making equity investments outside of the PRC, borrowing money from orlending money outside of the PRC, and repaying debt or remitting liquidated assets and/or accumulated profits outside of the PRC. These transactions have to beapproved by the relevant PRC government authorities, including but not limited to the commerce bureau, the tax bureau and the State Administration of ForeignExchange, or SAFE, and have to be conducted at banks entrusted by the local SAFE branch. As our business continues to grow, we may need to continuouslyfinance our PRC subsidiaries by raising capital from outside of the PRC. The restriction on converting RMB into foreign currencies, and vice versa, may limit ourability to use capital resources from outside of the PRC. Such restrictions may also limit our ability to remit profits from our PRC subsidiaries outside of the PRC,therefore potentially limiting our ability to pay dividends to our shareholders. In addition, such restrictions will limit our ability to freely transfer temporary excesscash in our or our subsidiaries’ bank accounts in and out of the PRC, therefore limiting our ability to conduct crossborder cash management activities to optimizethe utilization of our cash.InflationAlthough China has experienced an increasing inflation rate, inflation has not had a material impact on our results of operations in recent years. Accordingto the National Bureau of Statistics of China, the change in the consumer price index in China was 0.46%, (0.77%), and 1.16% in 2001, 2002 and 2003, respectively.However, in connection with a 3.9% increase in 2004, the PRC government announced measures to restrict lending and investment in China in order to reduceinflationary pressures in China’s economy. Following the government’s actions, the consumer price index decreased to 1.8% in 2005 and to 1.5% in 2006. In 2007, theconsumer price index increased to 4.8%. In response, China’s central bank, the People’s Bank of China, announced that the bank reserve ratio would rise half apercentage point to 15.5% in an effort to reduce inflation pressures. China’s consumer price index growth rate reached 8.7% year over year in 2008. In 2009 and 2010,the change in the consumer price index in China was minus 0.7% and 3.3%.China consumer price index in November 2017 was 3.8% higher than that of the same period in 2016. China consumer price index in December 2016 was2.4% higher than that of the same period in 2015. China consumer price index in December 2015 was 4.8% higher than that of the same period in 2014. Chinaconsumer price index in December 2014 was 3.3% higher than that of the same period in 2013. The results of the PRC government’s actions to combat inflation aredifficult to predict. Adverse changes in the Chinese economy, if any, will likely impact the financial performance of a variety of industries in China that use, or wouldbe candidates to use, our software products and services.68ITEM 12. DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES.A. DEBT SECURITIES.Not applicable. B. WARRANTS AND RIGHTS.Not applicable.C. OTHER SECURITIES.Not applicable.D. AMERICAN DEPOSITARY SHARES.The Bank of New York Mellon, as depositary (the “Depositary”) for the Company’s ADR facility, notified the owners and holders of the Company’s ADSsthat the ADS facility will terminate effective at 5:00 p.m. (Eastern Time) on September 19, 2018. Under the terms of the Deposit Agreement among the Company, theDepositary and the owners and holders of ADSs of the Company (the “Deposit Agreement”), owners and holders of the Company’s ADSs have until at leastJanuary 21, 2019 to surrender their ADSs to the Depositary for delivery of the underlying ordinary shares of the Company. Subsequent to January 21, 2019, underthe terms of the Deposit Agreement, the Depositary may attempt to sell any ordinary shares remaining on deposit with the Depositary. If the Depositary sells suchunderlying ordinary shares or receives value for such shares, holders must surrender their ADSs to obtain payment of the sale proceeds, net of expenses andapplicable tax and charges. We completed the voluntary delisting of our ADSs from the NASDAQ Capital Market on September 19, 2018.You may hold ADSs either (A) directly (i) by having ADSs registered in your name in the Direct Registration System, or (ii) by having an Americandepositary receipt, also referred to as an ADR, which is a certificate evidencing a specific number of ADSs, registered in your name, or (B) indirectly by holding asecurity entitlement in ADSs through your broker or other financial institution. If you hold ADSs directly, you are a registered ADS holder, also referred to as anADS holder. This description assumes you are an ADS holder. If you hold the ADSs indirectly, you must rely on the procedures of your broker or other financialinstitution to assert the rights of ADS holders described in this section. You should consult with your broker or financial institution to find out what thoseprocedures are.The Direct Registration System, or DRS, is a system administered by The Depository Trust Company, also referred to as DTC, pursuant to which thedepositary may register the ownership of uncertificated ADSs, which ownership will be confirmed by periodic statements sent by the depositary to the registeredholders of uncertificated ADSs.69As an ADS holder, you will not be treated as one of our registered shareholders and you will not have direct shareholder rights. British Virgin Island’s lawgoverns our direct shareholders’ rights. The depositary will be the holder of the shares underlying your ADSs. As a registered holder of ADSs, you will have ADSholder rights. A Deposit Agreement among us, the depositary and you, as an ADS holder, and all other persons indirectly holding ADSs, sets out ADS holder rightsas well as the rights and obligations of the depositary. New York law governs the Deposit Agreement and the ADSs.The following is a summary of the material provisions of the Deposit Agreement. For more complete information, you should read the entire DepositAgreement and the form of ADS, which contains the terms of the ADSs. The Deposit Agreement is filed as an exhibit to our registration statement filed on Form F1.You may obtain the registration statement and the attached Deposit Agreement from the SEC’s website at http://www.sec.gov. You may also obtain a copy of theDeposit Agreement at the SEC’s Public Reference Room, which is located at 100 F Street, NE, Washington, DC 20549. You may obtain information on the operationof the Public Reference Room by calling the SEC at 18007320330. Fees and ExpensesPersons depositing or withdrawing shares or ADS holders must pay:For:$5.00 (or less) per 100 ADSs (or portion of 100 ADSs)Issuance of ADSs, including issuances resulting from a distribution of shares orrights or other propertyCancellation of ADSs for the purpose of withdrawal, including if the DepositAgreement terminates$.05 (or less) per ADSAny cash distribution to ADS holdersA fee equivalent to the fee that would be payable if securities distributed to youhad been shares and the shares had been deposited for issuance of ADSsDistribution of securities distributed to holders of deposited securities whichare distributed by the depositary to ADS holders$.05 (or less) per ADSs per calendar yearDepositary servicesRegistration or transfer feesTransfer and registration of shares on our share register to or from the name ofthe depositary or its agent when you deposit or withdraw sharesExpenses of the depositaryCable, telex and facsimile transmissions (when expressly provided in the DepositAgreement) converting foreign currency to U.S. dollarsTaxes and other governmental charges the depositary or the custodian have topay on any ADS or share underlying an ADS, for example, share transfer taxes,stamp duty or withholding taxesAs necessaryAny charges incurred by the depositary or its agents for servicing the depositedsecuritiesAs necessaryPayment of TaxesHolders of our ADSs are responsible for any taxes or other governmental charges payable on their ADSs or on the deposited securities represented by anyof their ADSs. The depositary may refuse to register any transfer of a holder’s ADSs or allow withdrawal of the deposited securities represented by the ADSs untilsuch taxes or other charges are paid. It may apply payments owed to the holder or sell deposited securities represented by the ADSs to pay any taxes owed and theholder will remain liable for any deficiency. If the depositary sells deposited securities, it will, if appropriate, reduce the number of ADSs to reflect the sale and pay toADS holders any proceeds, or send to ADS holders any property, remaining after it has paid the taxes.70PART IIITEM 13. DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES.None.ITEM 14. MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS.Use of Proceeds.We completed our initial public offering on May 14, 2010 (the “IPO”), which generated net proceeds of approximately $14.6 million. All remaining cash onhand from the proceeds of our IPO was transferred to C Media Limited and its subsidiaries following the completion of the asset exchange transactions on August17, 2018.ITEM 15. CONTROLS AND PROCEDURES.Disclosure Controls and ProceduresOur Chief Executive Officer and Chief Financial Officer have reviewed and evaluated the effectiveness of our disclosure controls and procedures, whichincluded inquiries made to certain other of our employees. The term “disclosure controls and procedures,” as defined in Rules 13a15(e) and 15d15(e) under theExchange Act, means controls and other procedures of a company that are designed to ensure that information required to be disclosed by a company in thereports, such as this report, that it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in theSEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to bedisclosed by a company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the company’s management, including itsprincipal executive and principal financial officers, as appropriate to allow timely decisions regarding required disclosure. Management recognizes that any controlsand procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives and management necessarilyapplies its judgment in evaluating the costbenefit relationship of possible controls and procedures. Based on that evaluation, our Chief Executive Officer and ChiefFinancial Officer have each concluded that, as of December 31, 2017, the Company’s disclosure controls and procedures were not effective due to the materialweakness described in the “Management’s Report on Internal Control over Financial Reporting” section below.Management’s Report on Internal Control Over Financial ReportingOur management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Exchange ActRules 13a15(f) and 15d15(f). Internal control over financial reporting refers to the process designed by, or under the supervision of, our principal executive officerand principal financial officer, and effected by our Board of Directors, management and other personnel, to provide reasonable assurance regarding the reliability offinancial reporting and the preparation of financial statements for external purposes in accordance with U.S. GAAP and includes those policies and procedures that(i) pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of the assets of the Company; (ii)provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with U.S. GAAP, and thatreceipts and expenditures of the Company are being made only in accordance with authorizations of management and directors of the Company; and (iii) providereasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the Company’s assets that could have a materialeffect on the financial statements.71Any system of internal control, no matter how well designed, has inherent limitations. Therefore, even those systems determined to be effective canprovide only reasonable assurance with respect to financial statement preparation and presentation. Because of the inherent limitations of internal control, there is arisk that material misstatements may not be prevented or detected on a timely basis by internal control over financial reporting. However, these inherent limitationsare known features of the financial reporting process. Therefore, it is possible to design into the process safeguards to reduce, though not eliminate, this risk.Management assessed our internal control over financial reporting as of the year ended December 31, 2017. In making this assessment, management usedthe criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in the 2014 report entitled "Internal ControlIntegratedFramework." The COSO framework summarizes each of the components of a company’s internal control system, including (i) the control environment, (ii) riskassessment, (iii) control activities, (iv) information and communication, and (v) monitoring. Based on such assessment, management concluded that its internalcontrol over financial reporting as of December 31, 2017 was not effective because of the following material weakness:Lack of U.S. GAAP expertise. Although our accounting personnel are professional and experienced in accounting requirements and procedures generallyaccepted in the PRC, they do not have sufficient knowledge, experience and training in maintaining our books and records and preparing financial statements inaccordance with U.S. GAAP standards and SEC rules and regulations. The staff needs additional training to become experienced in U.S. GAAPbased reporting,including the skills of U.S. GAAPbased period end closing, consolidation of financial statements, and U.S. GAAP conversion.In order to address the above material weakness, our management plans to take the following steps:We will employ, as needed, outside professionals to provide key accounting personnel ongoing technical trainings to ensure their proper understanding ofU.S. GAAP and newly announced accounting standards.The Company believes the foregoing measures will remediate the identified material weakness in future periods. The Company is committed to monitoringthe effectiveness of these measures and making any changes that are necessary and appropriate.Notwithstanding the conclusion that its internal control over financial reporting was not effective as of the end of the period covered by this report, ourChief Executive Officer and Chief Financial Officer believe that the financial statements and other information contained in this report present fairly, in all materialrespects, its business, financial condition and results of operations. Nothing has come to the attention of management that causes them to believe that any materialinaccuracies or errors exist in the Company’s financial statements as of December 31, 2017.Attestation report of the registered public accounting firm.This transition report does not include an attestation report of the Company’s registered public accounting firm on internal control over financial reportingbecause the Company is a nonaccelerated filer permanently exempted from section 404(b) of the SarbanesOxley Act.Changes in Internal Control over Financial ReportingThere were no changes in the Company’s internal control over financial reporting that occurred during our fiscal year ended December 31, 2017 that hasmaterially affected or is reasonably likely to materially affect our internal control over financial reporting.ITEM 16. [RESERVED]ITEM 16A. AUDIT COMMITTEE FINANCIAL EXPERT.Our board of directors has determined that Mr. Dennis Galgano qualifies as an audit committee financial expert. Our board of directors has determined thatMessrs. Dennis Galgano, Jin Shi, Jiming Ha and Zhihao Xu meet the definition of an “independent director” under the applicable NASDAQ Rules and under Rule10A3 of the Securities Exchange Act of 1934, as amended.72ITEM 16B. CODE OF ETHICS.Our board of directors has adopted a code of business conduct and ethics applicable to our directors, officers and employees. We have posted the code onour website at http://www.luokung.com.ITEM 16C. PRINCIPAL ACCOUNTANT FEES AND SERVICES.Audit FeesThe aggregate fees billed by Moore Stephens CPA Limited for professional services rendered for the audit of our financial information disclosed in thistransition report on Form 20F was $280,000 for the two years ended December 31, 2017 and 2016.The aggregate fees billed by our previous auditor, BDO China Shu Lun Pan Certified Public Accountants LLP for professional services rendered for theaudit of our annual financial information included in our annual reports on Form 20F was $105,500 for each of the fiscal years ended September 30, 2017, 2016 and2015.Tax FeesWe did not engage our principal accountants to provide tax or related services during the last two fiscal years.All Other FeesWe did not engage our principal accountants to render services to us during the last two fiscal years, other than as reported above.ITEM 16D. EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES.Not applicable.ITEM 16E. PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS.Not applicable.ITEM 16F. CHANGE IN REGISTRANT’S CERTIFYING ACCOUNTANT.Not applicable.ITEM 16G. CORPORATE GOVERNANCE.We are incorporated in the BVI and our corporate governance practices are governed by applicable BVI law as well as our memorandum and articles ofassociation. In addition, because our ADSs are listed on NASDAQ, we are subject to NASDAQ’s corporate governance requirements. NASDAQ Listing Rule5620(a) requires each issuer to hold an annual meeting of shareholders no later than one year after the end of the issuer’s fiscal year end. However, NASDAQ ListingRule 5615(a)(3) permits a foreign private issuer like us to follow home country practices in lieu of certain requirements of Listing Rule 5600, provided that suchforeign private issuer discloses in its transition report filed with the SEC each requirement of Rule 5600 that it does not follow and describes the home countrypractice followed in lieu of such requirement. We follow home country practice with respect to annual meetings and did not hold an annual shareholder meeting inthe year ended December 31, 2017. We may, however, hold annual shareholder meetings in the future if there are significant issues that require shareholders’approvals.ITEM 16H. MINE SAFETY DISCLOSURE.Not applicable.73PART IIIITEM 17. FINANCIAL STATEMENTS.We have elected to provide financial statements and related information specified in Item 18.ITEM 18. FINANCIAL STATEMENTS.See “Index to Consolidated Financial Statements” for a list of all financial statements filed as part of this transition report. The Financial Statements arebeginning on page F1.ITEM 19. EXHIBITS.See the Exhibit Index following the signature page of this report, which is incorporated herein by reference.74SIGNATURESThe registrant hereby certifies that it meets all of the requirements for filing on Form 20F and that it has duly caused and authorized the undersigned tosign this transition report on its behalf.LUOKUNG TECHNOLOGY CORP.By:/s/ Xuesong Song Xuesong SongChief Executive Officer(principal executive officer)October 12, 201875EXHIBIT INDEXThe following documents are filed as part of this transition report on Form 20F.ExhibitNumberDescription1.1Amended and Restated Memorandum of Association and Articles of Association of Luokung Technology Corp., dated August 20, 2018, and ascurrently in effect.2.1*Deposit Agreement among the Company, depositary and holders of the American Depositary Receipts.2.2*Form of American Depositary Receipt.2.3*English translation of Entrusted Management Agreement dated December 15, 2009 between Xi’an Softech Co., Ltd., Xi’an Kingtone InformationTechnology Co., Ltd. and the shareholders of Xi’an Kingtone Information Technology Co., Ltd.3.1*English translation of Shareholder’s Voting Proxy Agreement dated December 15, 2009 between Xi’an Softech Co., Ltd., Xi’an Kingtone InformationTechnology Co., Ltd. and the shareholders of Xi’an Kingtone Information Technology Co., Ltd.4.1*English translation of Exclusive Technology Service Agreement dated December 15, 2009 between Xi’an Softech Co., Ltd. and Xi’an KingtoneInformation Technology Co., Ltd.4.2*English translation of Exclusive Option Agreement dated December 15, 2009 between Xi’an Softech Co., Ltd., Xi’an Kingtone InformationTechnology Co., Ltd. and the shareholders of Xi’an Kingtone Information Technology Co., Ltd.4.3*English translation of Equity Pledge Agreement dated December 15, 2009 between Xi’an Softech Co., Ltd., Xi’an Kingtone Information TechnologyCo., Ltd. and the shareholders of Xi’an Kingtone Information Technology Co., Ltd.4.4*English translation of Loan Agreement dated September 14, 2009 between Xi’an Kingtone Information Technology Co., Ltd. and Xian CityCommercial Bank.4.5*English translation of Mortgage Agreement dated September 14, 2009 between Xi’an Kingtone Information Technology Co., Ltd. and Xian CityCommercial Bank.4.6*English translation of Form of Employment Agreement entered into between the Company and the Company’s executive officers.4.7*2010 Omnibus Incentive Plan of the Company.4.8**English translation of Project Construction Contract dated August 10, 2010 between Xi’an Hu County Yuxing Agriculture Science & TechnologyCo., Ltd. and Xi’an Kingtone Information Technology Co., Ltd.4.9***Asset Exchange Agreement by and between C Media Limited and the Company dated as of January 25, 2018.4.10***Securities Purchase Agreement by and among Redstone YYL Management Limited and five shareholders holding majority of the shares of theCompany dated as of January 25, 2018.4.15Exclusive Business Cooperation Agreement by and between Zhongchuan Tianxia Information Technology (Shenzhen) Co., Ltd., and Beijing MobileVision Technology Co., Ltd., dated August 31, 2015.764.16Exclusive Option Agreement by and among Zhongchuan Tianxia Information Technology (Shenzhen) Co., Ltd., Xuesong Song, Weili Chen, PingWang, Donglai Liu, and Beijing Mobile Vision Technology Co., Ltd., dated August 31, 2015.4.17Equity Interest Pledge Agreement by and among Zhongchuan Tianxia Information Technology (Shenzhen) Co., Ltd., Xuesong Song, Weili Chen, PingWang, Donglai Liu, and Beijing Mobile Vision Technology Co., Ltd., dated August 31, 2015.4.18Addendum to Asset Exchange Agreement by and among the Company, Topsky Infotech Holdings Pte Ltd. and C Media Limited, dated October 3,2018. Incorporated by reference to the Company’s Current Report on Form 6K filed on October 4, 2018.4.19Stock Purchase Agreement, dated August 25, 2018, by and among the Company, LK Technology Ltd., and the shareholders listedtherein. Incorporated by reference to the Company’s Current Report on Form 6K filed on August 27, 2018.4.20Power of Attorney by Weili Chen, dated August 31, 2015.4.21Power of Attorney by Ping Wang, dated August 31, 2015.4.22Power of Attorney by Donglai Liu, dated August 31, 2015.4.23Power of Attorney by Xuesong Song, dated August 31, 2015.8.1List of Subsidiaries and Consolidated Variable Interest Entities10.1Employment Agreement, dated August 19, 2018, between Luokung Technology Corp. and Xuesong Song.†10.2Employment Agreement, dated August 19, 2018, by and between Luokung Technology Corp. and Jie Yu.†12.1Certification of Chief Executive Officer required by Rule 13a14(a).12.2Certification of Chief Financial Officer required by Rule 13a14(a).13.1Certification of Chief Executive Officer required by Rule 13a14(a).13.2Certification of Chief Financial Officer required by Rule 13a14(a).101.INSXBRL Instance Document.101.SCHXBRL Taxonomy Extension Schema Document.101.CALXBRL Taxonomy Extension Calculation Linkbase Document.101.DEFXBRL Taxonomy Extension Definition Linkbase Document.101.LABXBRL Taxonomy Extension Label Linkbase Document.101.PREXBRL Taxonomy Extension Presentation Linkbase Document.*Previously filed as an exhibit to the Company’s Registration Statement on Form F1 (Reg. No. 333166056) filed with the Commission and incorporated hereinby reference.**Previously filed as exhibits to the Company’s Transition Report on Form 20F filed with the Commission on January 20, 2011 and incorporated herein byreference.***Previously filed as exhibits to the Company’s Annual Report on Form 20F filed with the Commission on February 9, 2018 and incorporated herein byreference.†Indicates management contract or compensatory plan, contract or arrangement.77LK Technology Ltd. and SubsidiariesCONSOLIDATED FINANCIAL STATEMENTSTABLE OF CONTENTSPage(s)Report of Independent Registered Public Accounting FirmF2Consolidated Financial StatementsConsolidated Balance SheetsF3Consolidated Statements of Operations and Comprehensive LossF4application.Chuang (Vincent) Tao was appointed as a member of the Board effective on August 25, 2018. Dr. Tao was the Chairman of SuperEngine Suzhou from 2014to 2017. Dr. Tao has been the president of the Seasky Angel Investment Alliance of Shanghai since 2015. Dr. Tao received his Bachelor Degree of geographicinformation and telemetry from Wuhan University in China in 1990 and received his Ph.D. from University of Calgary, Canada in 1997.Dennis Galgano was appointed as a director of the Company following the consummation of the asset exchange agreement. He was a registered consultantwith Morgan Joseph Triartisan LLC from November 2016 until October 2017, and previously served as vice chairman and head of international investment bankingfor Morgan Joseph Triartisan LLC, which is a registered broker dealer engaged in the investment banking and financial advisory industry. Mr. Galgano received aB.S. degree in Chemistry from St. John’s University and an M.B.A. from The Wharton School in 1972.Jin Shi was appointed as a director of the Company following the consummation of the asset exchange transactions. Mr. Shi has served as the managingpartner of Chum Capital Group, a merchant bank focused on helping Chinese growth companies to access global capital, since January 2013. Mr. Shi has also servedas a director of Seven Stars Cloud Group, Inc. (NASDAQ: SSC), a premium video on demand service provider, since January 2014, and joined the audit committee ofits board of directors in March 2016. He also served as a director and member of the audit committee of Pingtan Marine Enterprise, Ltd. (NASDAQ: PME), a marineenterprise group primarily engaged in ocean fishing through its subsidiaries. Mr. Shi received an EMBA degree from the Guanghua Management School of BeijingUniversity, and a Bachelor’s degree of science in Chemical Engineering from Tianjin University.Jiming Ha was appointed as a director of the Company following the consummation of the asset exchange agreement, and has also served as a seniorresearch fellow for the China Finance 40 Forum since March 1, 2018, and previously served as a managing director of Goldman Sachs from January 2017 to April2017. Mr. Ha served as a vice chairman and chief investment strategist of the Investment Strategy Group for Private Wealth Management at Goldman Sachs from2010 to January 2017. Mr. Ha holds a PhD in Economics from the University of Kansas and Master’s and Bachelor’s degrees of science from Fudan University.Zhihao Xu was appointed as a director of the Company following the consummation of the asset exchange transactions. Mr. Xu has served as the chiefexecutive officer of Geely Group Co., Ltd., in Hangzhou, China, since December 2017, and previously served as the chairman and chief executive officer of BeijingDingchengrenhe Investment Co., Ltd., a funds management company, from January 2017 to December 2017. Mr. Xu served as the chairman of president of HNAUSOLV CO., LTD., and the chief innovation officer of HNA Logistics Group from January 2014 to December 2016, and prior to that as the chairman of GopayInnovation Technology Co. Ltd., an online payment system operator supporting online money transfers, from April 2012 to January 2014. Mr. Xu graduated from theBusiness School of Renmin University of China and from the Wudaokou Finance College of Tsinghua University with a fund qualification certificate and securitiesqualification certificate.B. COMPENSATION.Compensation of Directors and Executive OfficersFor the ninemonth transition period ended September 30, 2018 and the fiscal year ended December 31, 2017, we did not pay any cash compensation to ourexecutive officers of LK Technology Ltd. and a to our directors for serving on our board of directors of LK Technology Ltd.37Other than nonemployee directors, we do not intend to compensate directors for serving on our board of directors or any of its committees. We do,however, intend to reimburse each member of our board of directors for outofpocket expenses incurred by each director in connection with attending meetings ofthe board of directors and its committees.AdministrationThe Incentive Plan is administered by our board of directors, or at the discretion of the board, by our compensation committee. Our board of directors hasdelegated authority to our compensation committee to administer the Incentive Plan. Subject to the terms of the Incentive Plan, the compensation committee mayselect participants to receive awards, determine the types of awards and terms and conditions of awards, and interpret provisions of the Incentive Plan.The ordinary shares issued or to be issued under the Incentive Plan consist of authorized but unissued shares. If any ordinary shares covered by an awardare not purchased or are forfeited, or if an award otherwise terminates without delivery of any ordinary shares, then the number of ordinary shares counted againstthe aggregate number of ordinary shares available under the plan with respect to the award will, to the extent of any such forfeiture or termination, again be availablefor making awards under the Incentive Plan.EligibilityAwards may be made under the Incentive Plan to our employees, officers, directors, consultants or advisers or to any of our affiliates, and to any otherindividual whose participation in the Incentive Plan is determined to be in our best interests by our board of directors.Amendment or Termination of the PlanOur board of directors may terminate or amend the Incentive Plan at any time and for any reason. No amendment, however, may adversely impair the rightsof grantees with respect to outstanding awards. The Incentive Plan has a term of ten years. Amendments will be submitted for shareholder approval to the extentrequired by applicable stock exchange listing requirements or other applicable laws.OptionsThe Incentive Plan permits the granting of options to purchase ordinary shares intended to qualify as incentive share options under the Internal RevenueCode and share options that do not qualify as incentive share options, or nonqualified share options.The exercise price of each share option may not be less than 100% of the fair market value of our ADSs representing ordinary shares on the date of grant.In the case of certain 10% shareholders who receive incentive share options, the exercise price may not be less than 110% of the fair market value of our ADSsrepresenting ordinary shares on the date of grant. An exception to these requirements is made for options that we grant in substitution for options held byemployees of companies that we acquire. In such a case the exercise price is adjusted to preserve the economic value of the employee’s share option from his or herformer employer.The term of each share option is fixed by the compensation committee and may not exceed ten years from the date of grant. The compensation committeedetermines at what time or times each option may be exercised and the period of time, if any, after retirement, death, disability or termination of employment duringwhich options may be exercised.Options may be made exercisable in installments. The award agreement provides the vesting of the options. Exercisability of options may be accelerated bythe compensation committee.38In general, an optionee may pay the exercise price of an option by (1) cash or check (in U.S. dollars or Renminbi or other local currency as approved by thecompensation committee), (2) ordinary shares held for such period of time as may be required by the compensation committee, (3) delivery of a notice of a marketorder with a broker with respect to ordinary shares then issuable upon exercise of an option, and that the broker has been directed to pay us a sufficient portion ofnet proceeds of the sale in satisfaction of the exercise price, provided that payment of such proceeds is then made to us upon settlement of such sale, (4) otherproperty acceptable to the compensation committee with a fair market value equal to the exercise price, (5) cashless exercise or (6) any combination of the foregoing.Share options granted under the Incentive Plan may not be sold, transferred, pledged, or assigned other than by will or under applicable laws of descentand distribution. However, we may permit limited transfers of nonqualified options for the benefit of immediate family members of grantees to help with estateplanning concerns or pursuant to a domestic relations order in settlement of marital property rights.Other AwardsThe compensation committee may also award under the Incentive Plan:1.ordinary shares subject to restrictions;2.deferred ordinary shares, credited as deferred ordinary share units, but ultimately payable in the form of unrestricted ordinary shares inaccordance with the terms of the grant or with the participant’s deferral election;3.ordinary share units subject to restrictions;4.unrestricted ordinary shares, which are ordinary shares issued at no cost or for a purchase price determined by the compensation committee whichare free from any restrictions under the 2011 Omnibus Incentive Plan;5.dividend equivalent rights entitling the grantee to receive credits for dividends that would be paid if the grantee had held a specified number ofordinary shares; or6.a right to receive a number of ordinary shares or, in the discretion of the compensation committee, an amount in cash or a combination of ordinaryshares and cash, based on the increase in the fair market value of the ADSs representing ordinary shares underlying the right during a statedperiod specified by the compensation committee.Effect of Certain Corporate TransactionsCertain change of control transactions involving us may cause awards granted under the Incentive Plan to vest, unless the awards are continued orsubstituted for by the surviving company in connection with the corporate transaction.Unless otherwise provided in the appropriate option agreement on the date of grant or provided by our board of directors thereafter with the consent of thegrantee, options granted under the Incentive Plan become exercisable in full following (1) a dissolution of our company or a merger, consolidation or reorganizationof our company with one or more other entities in which we are not the surviving entity, (2) a sale of substantially all of our assets to another person or entity, or (3)any transaction (including without limitation a merger or reorganization in which we are the surviving entity) which results in any person or entity owning 50% ormore of the combined voting power of all classes of our shares.39Adjustments for Dividends and Similar EventsThe compensation committee will make appropriate adjustments in outstanding awards and the number of ordinary shares available for issuance under theIncentive Plan, including the individual limitations on awards, to reflect ordinary share dividends, stock splits and other similar events.C. BOARD PRACTICES.Board of DirectorsOur board of directors consists of six members being Messrs. Xuesong Song, Kegang Peng, Dennis Galgano, Jin Shi, Jiming Ha and Zhiaho Xu. Ourdirectors hold office until our annual meeting of shareholders, where their successors will be duly elected and qualified, or until the directors’ death, resignation orremoval, whichever is earlier. Our directors are not subject to a term of office and hold office until their resignation, death or incapacity or until their respectivesuccessors have been elected and qualified in accordance with our fourth amended and restated memorandum of association and articles of association. A directorwill be removed from office if, among other things, the director (1) becomes bankrupt, (2) dies or becomes of unsound mind, or (3) is absent from meetings of ourboard of directors for six consecutive months without leave and our board of directors resolves that the office is vacated. A director is not entitled to any specialbenefits upon termination of service with the company.Director IndependenceOur board of directors consists of six members; Messrs. Dennis Galgano, Jin Shi, Jiming Ha and Zhihao Xu have been determined by us to be independentdirectors within the meaning of the independent director guidelines of the NASDAQ Corporate Governance Rules (the “NASDAQ Rules”).Committees of Our Board of DirectorsTo enhance our corporate governance, we established three committees under our board of directors: an audit committee, a compensation committee, and anominating and corporate governance committee. We have adopted a charter for each of these committees. The committees have the following functions andmembers.Audit CommitteeOur audit committee reports to our board of directors regarding the appointment of our independent public accountants, the scope and results of ourannual audits, compliance with our accounting and financial policies and management’s procedures and policies relating to the adequacy of our internal accountingcontrols. Our audit committee consists of Messrs. Dennis Galgano, Jin Shi, and Jiming Ha. Mr. Galgano, having accounting and financial management expertise,serves as the chairman of the audit committee and is an “audit committee financial expert” as defined by the rules and regulations of the SEC. Our board of directorshas determined that each of these persons meet the definition of an “independent director” under the applicable NASDAQ Rules and under Rule 10A3 of theSecurities Exchange Act of 1934, as amended (the “Exchange Act”).Our audit committee is responsible for, among other things:●the appointment, evaluation, compensation, oversight and termination of the work of our independent auditor (including resolution of disagreementsbetween management and the independent auditor regarding financial reporting);●an annual performance evaluation of the audit committee;●establishing procedures for the receipt, retention and treatment of complaints regarding accounting, internal accounting controls, auditing matters orpotential violations of law, and the confidential, anonymous submission by our employees of concerns regarding questionable accounting or auditingmatters or potential violations of law;40●ensuring that it receives an transition report from our independent auditor describing our internal control procedures and any steps taken to deal withmaterial control deficiencies and attesting to the auditor’s independence and describing all relationships between the auditor and us;●reviewing our annual audited financial statements and quarterly financial statements with management and our independent auditor;●reviewing and approving all proposed related party transactions;●reviewing our policies with respect to risk assessment and risk management;●meeting separately and periodically with management and our independent auditor; and●reporting regularly to our board of directors.Compensation CommitteeOur compensation committee assists the board of directors in reviewing and approving the compensation structure of our directors and executive officers,including all forms of compensation to be provided to our directors and executive officers. In addition, the compensation committee reviews share compensationarrangements for all of our other employees. Members of the compensation committee are not prohibited from direct involvement in determining their owncompensation. Our chief executive officer is not permitted to be present at any committee meeting during which his or her compensation is deliberated. Ourcompensation committee consists of Dennis Galgano and Jin Shi, with Mr. Shi serving as the chairman of the compensation committee. Our board of directors hasdetermined that each of these persons meet the definition of “independent director” under the applicable requirements of the NASDAQ Rules.Our compensation committee is responsible for, among other things:●reviewing and approving corporate goals and objectives relevant to the compensation of our chief executive officer, evaluating the performance of ourchief executive officer in light of those goals and objectives and setting the compensation level of our chief executive officer based on this evaluation;●reviewing and making recommendations to the board with respect to the compensation of our executives, incentive compensation and equitybasedplans that are subject to board approval; and●providing annual performance evaluations of the compensation committee.Nominating and Corporate Governance CommitteeOur nominating and corporate governance committee assists the board of directors in identifying and selecting or recommending individuals qualified tobecome our directors, developing and recommending corporate governance principles and overseeing the evaluation of our board of directors and management. Ournominating and corporate governance committee consists of Jiming Ha and Zhihao Xue, with Mr. Ha serving as the chairman of the nominating and corporategovernance committee. Our board of directors has determined that each of these persons meet the definition of “independent director” under the applicablerequirements of the NASDAQ Rules.Our nominating and corporate governance committee is responsible for, among other things:●selecting and recommending to our board nominees for election or reelection to our board, or for appointment to fill any vacancy;●reviewing annually with our board the current composition of the board of directors with regards to characteristics such as independence, age, skills,experience and availability of service to us;●selecting and recommending to our board the names of directors to serve as members of the audit committee and the compensation committee, as wellas the nominating and corporate governance committee itself; advising our board of directors periodically with regards to significant developments inthe law and practice of corporate governance as well as our compliance with applicable laws and regulations, and making recommendations to ourboard of directors on all matters of corporate governance and on any remedial action to be taken; and●monitoring compliance with our code of business conduct and ethics, including reviewing the adequacy and effectiveness of our procedures to ensureproper compliance.41Code of Business Conduct and EthicsOur board of directors adopted a code of business conduct and ethics applicable to our directors, officers and employees.Duties of DirectorsUnder British Virgin Islands law, our directors have a duty to act honestly, in good faith and with a view to our best interests. Our directors also have a dutyto exercise care, diligence and skills that a reasonably prudent person would exercise in comparable circumstances. In fulfilling their duty of care to us, our directorsmust ensure compliance with our memorandum of association and articles of association. We have the right to seek damages if a duty owed by our directors isbreached.The functions and powers of our board of directors include, among others:●appointing officers and determining the term of office of the officers;●authorizing the payment of donations to religious, charitable, public or other bodies, clubs, funds or associations as deemed advisable;●exercising the borrowing powers of the company and mortgaging the property of the company;●executing cheques, promissory notes and other negotiable instruments on behalf of the company; and●maintaining or registering a register of mortgages, charges or other encumbrances of the company.Remuneration and BorrowingThe directors may receive such remuneration as our board of directors may determine from time to time. Each director is entitled to be repaid or prepaid alltraveling, hotel and incidental expenses reasonably incurred or expected to be incurred in attending meetings of our board of directors or committees of our board ofdirectors or shareholder meetings or otherwise in connection with the discharge of his or her duties as a director. The compensation committee will assist thedirectors in reviewing and approving the compensation structure for the directors.Our board of directors may exercise all the powers of the company to borrow money and to mortgage or charge our undertakings and property or any partthereof, to issue debentures, debenture stock and other securities whenever money is borrowed or as security for any debt, liability or obligation of the company orof any third party.QualificationA director is not required to hold shares as a qualification to office.42Limitation on Liability and Other Indemnification MattersBritish Virgin Islands law does not limit the extent to which a company’s memorandum of association and articles of association may provide forindemnification of officers and directors, except to the extent any such provision may be held by the British Virgin Islands courts to be contrary to public policy,such as to provide indemnification against civil fraud or the consequences of committing a crime.Under our memorandum of association and articles of association, we may indemnify our directors, officers and liquidators against all expenses, includinglegal fees, and against all judgments, fines and amounts paid in settlement and reasonably incurred in connection with civil, criminal, administrative or investigativeproceedings to which they are party or are threatened to be made a party by reason of their acting as our director, officer or liquidator. To be entitled toindemnification, these persons must have acted honestly and in good faith with a view to the best interest of the company and, in the case of criminal proceedings,they must have had no reasonable cause to believe their conduct was unlawful.Compensation Committee Interlocks and Insider ParticipationNone of the members of our compensation committee is an officer or employee of our company. None of our executive officers currently serves, or in thepast year has served, as a member of the board of directors or compensation committee of any entity that has one or more executive officers serving on our board ofdirectors or compensation committee.Employment AgreementsOn August 19, 2018, the Company entered into an Employment Agreement (the “Song Agreement”) with Mr. Xuesong Song, to serve as the ChiefExecutive Officer of the Company for a fouryear term, subject to renewal. Under the terms of the Song Agreement, Mr. Song will receive no salary for his servicesbut will be eligible for an annual cash bonus in the Board’s sole discretion.On August 19, 2018, the Company entered into an Employment Agreement (the “Yu Agreement”) with Mr. Jie Yu, to serve as the Chief Financial Officer ofthe Company for a fouryear term, subject to renewal. Under the terms of the Yu Agreement, Mr. Yu will receive an annual salary of RMB700,000, and will be eligiblefor an annual cash bonus in the Board’s sole discretion.D. EMPLOYEES.As of September 30, 2018 and December 31, 2017, we had a total of 107 and 37 fulltime employees, including 48 and 13 in research and development, 9 and 2in sales and marketing and the rest in a variety of other divisions, respectively. All of our employees are fulltime employees. None of our employees is currentlyrepresented by a union and/or collective bargaining agreements. We believe that we have good relations with our employees and since our inception we have hadno history of work stoppages or union organizing campaigns.E. SHARE OWNERSHIP.The following table provides information as to the beneficial ownership of our ordinary shares as of October 10, 2018, by the persons listed. Beneficialownership of shares is determined under the rules of the SEC and generally includes any shares over which a person exercises sole or shared voting or investmentpower. For purposes of the following table, a person is deemed to have beneficial ownership of any ordinary shares if such person has the right to acquire suchshares within 60 days of October 10, 2018. For purposes of computing the percentage of outstanding shares held by each person, any shares that such person hasthe right to acquire within 60 days after of October 10, 2018 are deemed to be outstanding, but are not deemed to be outstanding for the purpose of computing thepercentage ownership of any other person. Except as otherwise noted, the persons named in the table have sole voting and investment power with respect to all ofthe ordinary shares beneficially owned by them. Unless otherwise indicated, the address of each person listed is c/o Luokung Technologies, LAB 32, SOHO 3Q, No9, Guanghua Road, Chaoyang District, Beijing, People’s Republic of China.43Percentage ownership in the following table is based on 199,317,558 ordinary shares outstanding on October 10, 2018.Number ofsharesPercent ofclassDirectors and named executive officersCharm Dragon International Limited (1)4,030,8822.03%Xuesong Song, Chairman, Chief Executive Officer and Director(2)38,156,43019.30%Kegang Peng, Vice President and Director (3)17,231,9558.71%Dennis Galgano, Director75,796*%Jin Shi, DirectorJiming Ha, DirectorZhihao Xu, Director (4)7,579,1843.83%Dongpu Zhang, President (5)2,321,7921.17%Chuang Tao, Director (6)1,221,996*%Directors and executive officers as a group (10 persons)66,587,15233.69%(1)Charm Dragon International Limited is a British Virgin Islands company controlled by Mr. Xuesong Song.(2)Consists of (i) 4,030,882 shares owned directly by Charm Dragon International Limited, a British Virgin Islands company and (ii) 22,624,793 shares owneddirectly by Bravo First Development Limited, a British Virgin Islands company. Mr. Xuesong Song is the controlling shareholder of Bravo First DevelopmentLimited. Mr. Xuesong Song is the sole director of Charm Dragon International Limited.(3)Consists of 17,231,955 shares owned directly by Plenty Prestige Enterprises Limited, a British Virgin Islands company. Mr. Kegang Peng is the sole director ofPlenty Prestige Enterprises Limited.(4)Consists of 7,579,184 shares directly owned by Geely Group Limited., a Chinese company. Mr. Zhihao Xu is the Chief Executive Officer of Geely GroupLimited.(5)Consists of 2,321,792 shares owned directly by Genoa Peak Limited, a British Virgin Islands company. Mr. Dongpu Zhang controls Genoa Peak Limited.(6)Consists of 1,221,996 shares owned directly by Globalearth Holdings Limited, a British Virgin Islands company. Mr. Chuang Tao controls Globalearth HoldingsLimited.*Represents less than 1% of shares outstandingITEM 7. MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS.A. MAJOR SHAREHOLDERSPlease refer to Item 6.E “Directors, Senior Management and Employees — Share Ownership.”To our knowledge, (A) we are not directly or indirectly owned or controlled by (i) another corporation or (ii) any foreign government and (B) there are noarrangements (including any announced or expected takeover bid), the operation of which may at a subsequent date result in a change in our control.The voting rights of our major shareholders do not differ from the voting rights of other holders of the same class of shares.44B. RELATED PARTY TRANSACTIONS. BUSINESS RELATIONSHIPS.Our subsidiaries, consolidated affiliated entities, and the subsidiaries of the consolidated affiliated entities have engaged, during the ordinary course ofbusiness, in a number of customary transactions with each other. All of these intercompany balances have been eliminated in consolidation.As of December 31, 2017, we had amounts due from related parties, C Media Limited and Ya Tuo Ji International Consultancy (Beijing) Limited, in theamounts of $11.8 million and $0.2 million, respectively. These amounts due from related parties are short term in nature, noninterest bearing, unsecured andrepayable on demand.As of December 31, 2017, we had amounts due to related parties, Mr. Xuesong Song, our chairman and chief executive officer, Thumb Beijing Branch andThumb Shenzhen Branch, in the amounts of $2.9 million, $0.6 million and $0.03 million, respectively. These amounts due to related parties are short term in nature,noninterest bearing, unsecured and payable on demand.We are party to a series of control agreements with Beijing Zhong Chuan Shi Xun. In addition, our chief executive officer, Mr. Xuesong Song, serves as andofficer of Beijing Zhong Chuan Shi Xun and is a shareholder of Beijing Zhong Chuan Shi Xun. The following table sets forth the relationship of Mr. Song withBeijing Zhong Chuan Shi Xun:NameRelationship withLuokung TechnologyRelationship withBeijing Zhong Chuan Shi XunPercentageOwnership Interest inBeijing Zhong Chuan Shi XunXuesong SongChief Executive OfficerChief Executive Officer61.83%C. INTERESTS OF EXPERTS AND COUNSEL.None.ITEM 8. FINANCIAL INFORMATION.A. CONSOLIDATED STATEMENTS AND OTHER FINANCIAL INFORMATION.See “Item 18. Financial Statements.”Legal ProceedingsTo our knowledge, other than as described below there are no material legal proceedings threatened against us. From time to time, we may be subject tovarious claims and legal actions arising in the ordinary course of business. Following the consummation of the AEA, we became successor in interest to the legalproceedings described below.Litigation with Shanghai Fusheng Weier Intelligent Control Technology Co., Ltd.On January 22, 2016, Zhong Chuan Rui You and Shanghai Fusheng Weier Intelligent Control Technology Co., Ltd. (“Fusheng Weier”) signed a contract forequipment of $1,652,842 (RMB10,800,000). Since Zhong Chuan Rui You did not make the payments of $1,126,381 (RMB7,360,000) on the due dates, Fusheng Weierfiled a lawsuit against Zhong Chuan Rui You in Shanghai Xuhui District People's Court on October 8, 2016. On March 9, 2017, Xuhui District People's Court issuedthe verdict requiring Zhong Chuan Rui You to pay the overdue debts. In August 2017, C Media Limited made the payment of $512,075 (RMB3,346,000). Theremaining balance has been accrued in accounts payable. The payment schedule for the remaining balance is being negotiated by the two parties. On February 5,2018, a hearing was held adding Zhong Chuan Shi Xun as a defendant. The Group plans to settle the remaining balance within one year.45Lawsuit with Gansu Jinlun Culture Media Co., Ltd.On August 22, 2014, Zhong Chuan Rui You and Gansu Jinlun Culture Media Co., Ltd. (“Gansu Jinlun”) signed a “Lanzhou Railway Bureau AirconditionedTrain WiFi Network System Advertising Operation Rights Agreement” for advertising on 72 trains of $1,467,880 (RMB9,604,633). Due to the dispute on theproject implementation, Zhong Chuan Rui You did not pay the advertising fee. On August 23, 2017, Gansu Jinlun filed a lawsuit with Gansu Intermediate People'sCourt. On December 19, 2017, Gansu Intermediate People's Court issued a verdict, ruling that Zhong Chuan Rui You settle the overdue advertising fee. Since only 18out of 72 trains have been installed with Wifi network system, Zhong Chuan Rui You disputed and appealed to the verdict. The next court trial date has not yet beendetermined. C Media and Gansu Jinlun are negotiating a potential settlement to resume the contract. According to the legal counsel, it is probable that the settlementwill amount to approximately $459,000 (RMB3,000,000); therefore, this amount has been accrued in accounts payable as at December 31, 2017.Litigation with Shenzhen Hua Xun Fang Zhou Technology Co., Ltd.On June 16, 2015, Zhong Chuan Rui You signed a cooperation agreement with Shenzhen Hua Xun Fang Zhou Technology Co., Ltd. (“Shenzhen Hua Xun”)and Xuesong Song, a major shareholder of C Media Limited. Pursuant to this agreement, Zhong Chuan Rui You procures equipment from Shenzhen Hua Xun.Xuesong Song acts as a joint liability guarantor for the entire debts of Zhong Chuan Rui You under this agreement. As Zhong Chuan Rui You did not make thepayments on the due dates, Shenzhen Hua Xun filed a lawsuit with Shenzhen Baoan District People's Court on May 31, 2016. On November 1, 2016, Zhong ChuanRui You, Xuesong Song and Shenzhen Hua Xun reached a settlement in Shenzhen Baoan District People's Court to settle $1,735,389 (RMB11,355,000) in fourinstalments. On December 30, 2017, the debt was assigned to C Media Limited.Dividend PolicyWe currently intend to retain all of our available funds and future earnings for use in the operation and expansion of our business and do not anticipatepaying cash dividends in the foreseeable future. Under the terms of our Amended and Restated Memorandum and Articles of Association the declaration andpayment of any dividends in the future will be determined by our board of directors, in its discretion, and will depend on a number of factors, including our earnings,capital requirements and overall financial condition and our ability to receive dividends from our subsidiaries. If we pay any dividends, we will pay our ADS holders’dividends with respect to their underlying shares to the same extent as holders of our ordinary shares, subject to the terms of the deposit agreement, including thefees and expenses payable thereunder. Cash dividends on our ordinary shares, if any, will be paid in U.S. dollars.Our ability to receive dividends from our subsidiaries may limit our ability to pay dividends on our ordinary shares. See Risk Factors – Risks Related toDoing Business in China – Our holding company structure may limit the payment of dividends” and “Item 10. Additional Information – D. Exchange Controls –Dividend Distribution”.B. SIGNIFICANT CHANGES.N/AITEM 9. THE OFFER AND LISTINGA. OFFER AND LISTING DETAILS.Markets and Share Price HistoryOur ordinary shares are not currently listed on any trading market. Our American Depository Shares (“ADSs”) were voluntarily delisted from the NASDAQCapital Market on September 19, 2018. We have applied to NASDAQ for the listing of our ordinary shares on the NASDAQ Capital Market and received an approvalfor listing of Ordinary Shares on August 6, 2018, and as of the date of this transition report, that application and approval are currently under review.46The table below sets forth the high and low reported sales prices in dollars of our ordinary shares, which are represented by ADSs, as reported byNASDAQ in the periods as indicated:ADSHighLowAnnual Highs and Lows (as of the fiscal year end 09/30 for the five most recent full financial years)*20175.592.67201610.21.62Quarterly Highs and Lows (for the two most recent full financial years and any subsequent period, based on calendarquarter end)*2018Third Quarter8.006.30Second Quarter8.824.25First Quarter6.403.702017Fourth Quarter5.592.91Third Quarter3.992.67Second Quarter4.063.07First Quarter5.152.832016Fourth Quarter6.594.20Third Quarter10.201.62Second Quarter3.101.97First Quarter3.602.12Monthly Highs and Lows (for the most recent six months)September 20188.006.41August 20187.706.63July 20187.506.30June 20188.827.55May 20187.805.92April 20187.454.25*The Company effected a 1for10 reverse stock split of its ordinary shares on November 6, 2012 (the “Reverse Split”). The ratio between each AmericanDepositary Share (“ADS”) and its underlying ordinary share postReverse Split remains the same, namely, one ADR remains to represent one ordinary sharepost the Reverse Split. The price listed here after November 6, 2012 reflected the effect from the Reverse Split.B. PLAN OF DISTRIBUTION.Not Applicable.C. MARKETS.Our ordinary shares are not currently listed on any trading market. Our ADSs were voluntarily delisted from the NASDAQ Capital Market on September 19,2018. We have applied to NASDAQ for the listing of our ordinary shares on the NASDAQ Capital Market and received an approval for listing of Ordinary Shares onAugust 6, 2018, and as of the date of this transition report, that application and approval are currently under review.47D. SELLING SHAREHOLDERS.Not applicable.E. DILUTION.Not applicable.F. EXPENSES OF THE ISSUE.Not applicable.ITEM 10. ADDITIONAL INFORMATION.A. SHARE CAPITALNot applicable.B. MEMORANDUM AND ARTICLES OF ASSOCIATIONWe are a British Virgin Islands company incorporated with limited liability and our affairs are governed by the provisions of our memorandum of associationand articles of association, as amended and restated from time to time, and by the provisions of applicable British Virgin Islands law.Our memorandum of association and articles of association authorize the issuance of up to 251,000,000 shares, which are designated into (i) 250,000,000 ofordinary shares of the Company (“Ordinary Shares”), and (ii) 1,000,000 preferred shares of the Company (“Preferred Shares”), in each case with the rights,preferences and privileges as set out in the memorandum and articles of association of the Company.Please see below for a description of our ADSs under “Item 12. Description of Securities Other Than Equity Securities – D. American Depository Shares.”The following is a summary of the material provisions of our ordinary shares and our memorandum of association and articles of association.Ordinary SharesAll of our issued and outstanding ordinary shares are fully paid and nonassessable. Holders of our ordinary shares who are nonresidents of the BritishVirgin Islands may freely hold and vote their shares.Subject to the memorandum and articles of association (and, for greater clarity, without prejudice to any special rights conferred thereby on the holders ofany other shares), an Ordinary Share of the Company confers on the holder:(a)the right to one vote per Ordinary Share at a meeting of the members or on any resolution of members;(b)the right to an equal share in any distribution paid by the Company; and(c)the right to an equal share in the distribution of the surplus assets of the Company on a winding up;48Subject to the memorandum and articles of association (and, for greater clarity, without prejudice to any special rights conferred thereby on the holders ofany other shares), a Preferred Share of the Company confers on the holder:(a)the right to 399 votes per Preferred Share at a meeting of the members or on any resolution of members;(b)the right to an equal share in any distribution paid by the Company;(c)the right to an equal share in the distribution of the surplus assets of the Company on a winding up;(d)be freely transferable, in whole or in part, by Mr. Xuesong Song to any third party through one or more Private Transactions, subject toApplicable Law; and(e)be freely transferable, in whole or in part, by Mr. Xuesong Song to any third party through one or more Public Transactions, subject to ApplicableLaw and Automatic Conversion of such Preferred Share(s) into Ordinary Share(s).Each Preferred Share shall be automatically converted at any time after issue and without the payment of any additional sum into an equal number of fullypaid Ordinary Shares upon the conclusion of any transfer by Mr. Xuesong Song to any third party through one or more Public Transactions.Limitation on Liability and Indemnification MattersUnder British Virgin Islands law, each of our directors and officers, in performing his or her functions, is required to act honestly and in good faith with aview to our best interests and exercise the care, diligence and skill that a reasonably prudent person would exercise in comparable circumstances. Our memorandumof association and articles of association provide that, to the fullest extent permitted by British Virgin Islands law or any other applicable laws, our directors will notbe personally liable to us or our shareholders for any acts or omissions in the performance of their duties. Such limitation of liability does not affect the availabilityof equitable remedies such as injunctive relief or rescission. These provisions will not limit the liability of directors under United States federal securities laws.We may indemnify any of our directors or anyone serving at our request as a director of another entity against all expenses, including legal fees, andagainst all judgments, fines and amounts paid in settlement and reasonably incurred in connection with legal, administrative or investigative proceedings. We mayonly indemnify a director if he or she acted honestly and in good faith with the view to our best interests and, in the case of criminal proceedings, the director hadno reasonable cause to believe that his or her conduct was unlawful. The decision of our board of directors as to whether the director acted honestly and in goodfaith with a view to our best interests and as to whether the director had no reasonable cause to believe that his or her conduct was unlawful, is in the absence offraud sufficient for the purposes of indemnification, unless a question of law is involved. The termination of any proceedings by any judgment, order, settlement,conviction or the entry of no plea does not, by itself, create a presumption that a director did not act honestly and in good faith and with a view to our best interestsor that the director had reasonable cause to believe that his or her conduct was unlawful. If a director to be indemnified has been successful in defense of anyproceedings referred to above, the director is entitled to be indemnified against all expenses, including legal fees, and against all judgments, fines and amounts paidin settlement and reasonably incurred by the director or officer in connection with the proceedings.We may purchase and maintain insurance in relation to any of our directors or officers against any liability asserted against the directors or officers andincurred by the directors or officers in that capacity, whether or not we have or would have had the power to indemnify the directors or officers against the liabilityas provided in our memorandum of association and articles of association.Insofar as indemnification for liabilities arising under the Securities Act may be permitted for our directors or officers under the foregoing provisions, wehave been informed that in the opinion of the Securities and Exchange Commission, such indemnification is against public policy as expressed in the Securities Actand is therefore unenforceable as a matter of United States law.49Differences in Corporate LawWe were incorporated under, and are governed by, the laws of the British Virgin Islands. The corporate statutes of the State of Delaware and the BritishVirgin Islands are similar, and the flexibility available under British Virgin Islands law has enabled us to adopt memorandum of association and articles of associationthat will provide shareholders with rights that do not vary in any material respect from those they would enjoy if we were incorporated under the Delaware GeneralCorporation Law, or Delaware corporate law. Set forth below is a summary of some of the differences between provisions of the BVI Act applicable to us and thelaws application to companies incorporated in Delaware and their shareholders.Director’s Fiduciary DutiesUnder Delaware corporate law, a director of a Delaware corporation has a fiduciary duty to the corporation and its stockholders. This duty has twocomponents: the duty of care and the duty of loyalty. The duty of care requires that a director act in good faith, with the care that an ordinarily prudent personwould exercise under similar circumstances. Under this duty, a director must inform himself of, and disclose to stockholders, all material information reasonablyavailable regarding a significant transaction. The duty of loyalty requires that a director act in a manner he reasonably believes to be in the best interests of thecorporation. He must not use his corporate position for personal gain or advantage. This duty prohibits selfdealing by a director and mandates that the bestinterest of the corporation and its stockholders take precedence over any interest possessed by a director, officer or controlling stockholder and not shared by thestockholders generally. In general, actions of a director are presumed to have been made on an informed basis, in good faith and in the honest belief that the actiontaken was in the best interests of the corporation. However, this presumption may be rebutted by evidence of a breach of one of the fiduciary duties. Should suchevidence be presented concerning a transaction by a director, a director must prove the procedural fairness of the transaction, and that the transaction was of fairvalue to the corporation.British Virgin Islands law provides that every director of a British Virgin Islands company in exercising his powers or performing his duties shall acthonestly and in good faith and in what the director believes to be in the best interests of the company. Additionally, the director shall exercise the care, diligence andskill that a reasonable director would exercise in the same circumstances taking into account the nature of the company, the nature of the decision and the positionof the director and his responsibilities. In addition, British Virgin Islands law provides that a director shall exercise his powers as a director for a proper purpose andshall not act, or agree to the company acting, in a manner that contravenes British Virgin Islands law or the memorandum association or articles of association of thecompany.Amendment of Governing DocumentsUnder Delaware corporate law, with very limited exceptions, a vote of the stockholders is required to amend the certificate of incorporation. Under BritishVirgin Islands law and our memorandum of association and articles of association, (i) our shareholders may amend our memorandum of association and articles ofassociation by a resolution of shareholders, or (ii) our board of directors may amend our memorandum of association and articles of association by a resolution ofdirectors without a requirement for a resolution of shareholders so long as the amendment does not:●restrict the rights of the shareholders to amend the memorandum of association and articles of association;●change the percentage of shareholders required to pass a resolution of shareholders to amend the memorandum of association and articles ofassociation;●amend the memorandum of association and articles of association in circumstances where the memorandum of association and articles ofassociation cannot be amended by the shareholders; or●amend the provisions of memorandum of association or the articles of association pertaining to “rights attaching to shares,” “rights not varied bythe issue of the shares pari passu,” “variation of rights” and “amendment of memorandum and articles”.50Written Consent of DirectorsUnder Delaware corporate law, directors may act by written consent only on the basis of a unanimous vote. Under British Virgin Islands law, directors’consents need only a majority of directors signing to take effect.Written Consent of ShareholdersUnder Delaware corporate law, unless otherwise provided in the certificate of incorporation, any action to be taken at any annual or special meeting ofstockholders of a corporation, may be taken by written consent of the holders of outstanding stock having not less than the minimum number of votes that wouldbe necessary to take such action at a meeting. As permitted by British Virgin Islands law, shareholders’ consents need only a majority of shareholders signing totake effect. Our memorandum of association and articles of association provide that shareholders may approve corporate matters by way of a resolution consentedto at a meeting of shareholders or in writing by a majority of shareholders entitled to vote thereon.Shareholder ProposalsUnder Delaware corporate law, a shareholder has the right to put any proposal before the annual meeting of shareholders, provided it complies with thenotice provisions in the governing documents. A special meeting may be called by the board of directors or any other person authorized to do so in the governingdocuments, but shareholders may be precluded from calling special meetings. British Virgin Islands law and our memorandum of association and articles ofassociation provide that our directors shall call a meeting of the shareholders if requested in writing to do so by shareholders entitled to exercise at least 30% of thevoting rights in respect of the matter for which the meeting is requested.Sale of AssetsUnder Delaware corporate law, a vote of the stockholders is required to approve the sale of assets only when all or substantially all assets are being sold. Inthe British Virgin Islands, shareholder approval is required when more than 50% of the company’s total assets by value are being disposed of or sold.Dissolution; Winding UpUnder Delaware corporate law, unless the board of directors approves the proposal to dissolve, dissolution must be approved by shareholders holding100% of the total voting power of the corporation. Only if the dissolution is initiated by the board of directors may it be approved by a simple majority of thecorporation’s outstanding shares. Delaware corporate law allows a Delaware corporation to include in its certificate of incorporation a supermajority votingrequirement in connection with dissolutions initiated by the board. As permitted by British Virgin Islands law and our memorandum of association and articles ofassociation, we may be voluntarily liquidated under Part XII of the BVI Act by resolution of directors and resolution of shareholders if we have no liabilities and weare able to pay our debts as they fall due.Redemption of SharesUnder Delaware corporate law, any stock may be made subject to redemption by the corporation at its option or at the option of the holders of such stockprovided there remains outstanding shares with full voting power. Such stock may be made redeemable for cash, property or rights, as specified in the certificate ofincorporation or in the resolution of the board of directors providing for the issue of such stock. As permitted by British Virgin Islands law, and our memorandum ofassociation and articles of association, shares may be repurchased, redeemed or otherwise acquired by us. Our directors must determine that immediately followingthe redemption or repurchase we will be able to satisfy our debts as they fall due and the value of our assets exceeds our liabilities.51Variation of Rights of SharesUnder Delaware corporate law, a corporation may vary the rights of a class of shares with the approval of a majority of the outstanding shares of suchclass, unless the certificate of incorporation provides otherwise. As permitted by British Virgin Islands law, and our memorandum of association and articles ofassociation, if our share capital is divided into more than one class of shares, we may vary the rights attached to any class only with the consent in writing ofholders of not less than threefourths of the issued shares of that class and holders of not less than threefourths of the issued shares of any other class of shareswhich may be affected by the variation.Removal of DirectorsUnder Delaware corporate law, a director of a corporation with a classified board may be removed only for cause with the approval of a majority of theoutstanding shares entitled to vote, unless the certificate provides otherwise. As permitted by British Virgin Islands law and our memorandum of association andarticles of association, directors may be removed by resolution of directors or resolution of shareholders.MergersUnder the BVI Act, two or more companies may merge or consolidate in accordance with the statutory provisions. A merger means the merging of two ormore constituent companies into one of the constituent companies, and a consolidation means the uniting of two or more constituent companies into a newcompany. In order to merger or consolidate, the directors of each constituent company must approve a written plan of merger or consolidation which must beauthorized by a resolution of shareholders.Shareholders not otherwise entitled to vote on the merger or consolidation may still acquire the right to vote if the plan of merger or consolidation containsany provision which, if proposed as an amendment to the memorandum association or articles of association, would entitle them to vote as a class or series on theproposed amendment. In any event, all shareholders must be given a copy of the plan of merger or consolidation irrespective of whether they are entitled to vote atthe meeting or consent to the written resolution to approve the plan of merger or consolidation.Inspection of Books and RecordsUnder Delaware corporate law, any shareholder of a corporation may for any proper purpose inspect or make copies of the corporation’s stock ledger, list ofshareholders and other books and records. Holders of our shares have no general right under British Virgin Islands law to inspect or obtain copies of our list ofshareholders or our corporate records. However, we will provide holders of our shares with annual audited financial statements. See “Where You Can FindAdditional Information.”Conflict of InterestThe BVI Act provides that a director shall, after becoming aware that he is interested in a transaction entered into or to be entered into by the company,disclose that interest to the board of directors of the company. The failure of a director to disclose that interest does not affect the validity of a transaction enteredinto by the director or the company, so long as the director’s interest was disclosed to the board prior to the company’s entry into the transaction or was notrequired to be disclosed (for example where the transaction is between the company and the director himself or is otherwise in the ordinary course of business andon usual terms and conditions). As permitted by British Virgin Islands law and our memorandum of association and articles of association, a director interested in aparticular transaction may vote on it, attend meetings at which it is considered, and sign documents on our behalf which relate to the transaction.52Transactions with Interested ShareholdersDelaware corporate law contains a business combination statute applicable to Delaware public corporations whereby, unless the corporation hasspecifically elected not to be governed by such statute by amendment to its certificate of incorporation, it is prohibited from engaging in certain businesscombinations with an “interested shareholder” for three years following the date that such person becomes an interested shareholder. An interested shareholdergenerally is a person or group who or that owns or owned 15% or more of the target’s outstanding voting stock within the past three years. This has the effect oflimiting the ability of a potential acquirer to make a twotiered bid for the target in which all shareholders would not be treated equally. The statute does not apply if,among other things, prior to the date on which such shareholder becomes an interested shareholder, the board of directors approves either the businesscombination or the transaction that resulted in the person becoming an interested shareholder. This encourages any potential acquirer of a Delaware publiccorporation to negotiate the terms of any acquisition transaction with the target’s board of directors.British Virgin Islands law has no comparable provision. As a result, we cannot avail ourselves of the types of protections afforded by the Delawarebusiness combination statute. However, although British Virgin Islands law does not regulate transactions between a company and its significant shareholders, itdoes provide that such transactions must be entered into bona fide in the best interests of the company and not with the effect of constituting a fraud on theminority shareholders.Independent DirectorsThere are no provisions under Delaware corporate law or under the BVI Act that require a majority of our directors to be independent.Cumulative VotingUnder Delaware corporate law, cumulative voting for elections of directors is not permitted unless the company’s certificate of incorporation specificallyprovides for it. Cumulative voting potentially facilitates the representation of minority shareholders on a board of directors since it permits the minority shareholderto cast all the votes to which the shareholder is entitled on a single director, which increases the shareholder’s voting power with respect to electing such director.There are no prohibitions to cumulative voting under the laws of the British Virgin Islands, but our memorandum of association and articles of association do notprovide for cumulative votingAntitakeover Provisions in Our Memorandum of association and articles of associationSome provisions of our memorandum of association and articles of association may discourage, delay or prevent a change in control of our company ormanagement that shareholders may consider favorable, including provisions that authorize our board of directors to issue preference shares in one or more seriesand to designate the price, rights, preferences, privileges and restrictions of such preference shares.C. MATERIAL CONTRACTS.On January 25, 2018, the Company executed an Asset Exchange Agreement (“AEA”) with C Media Limited, a corporation organized under the laws of theCayman Islands (“C Media”), whereby the Company agreed to purchase all the capital stock and equity interests of LK Technology Ltd, together with its whollyowned subsidiaries MMB Limited and Mobile Media (China) Limited and all respective subsidiaries from C Media in exchange for (i) 185,412,599 ordinary shares ofthe Company, par value $0.01 per share (“Ordinary Shares”), (ii) 1,000,000 preferred shares of Kingtone (“Preferred Shares”) and (iii) all issued and outstandingcapital stock or equity interests of the Company’s subsidiary, Topsky InfoTech Holdings Pte Ltd., and its whollyowned subsidiary Xi’an Softech Co., Ltd.,including all entities effectively controlled by Xi’an Softech Co., Ltd. through contractual arrangements and variable business entities.To consummate the contemplated transactions described above, the Company obtained shareholder consent at a special meeting held on May 20, 2018, (i)to authorize 1,000,000 Preferred Shares, (ii) to authorize additional Ordinary Shares so that total authorized Ordinary Shares is equal to 250,000,000 shares, (iii) to listsuch Ordinary Shares on NASDAQ, and (iv) to approve the transactions contemplated in the Asset Exchange Agreement. Additionally, NASDAQ needed toapprove the contemplated transactions prior to consummation thereof. C Media had the right to terminate the AEA if the closing had not occurred (other thanthrough the failure of C Media to comply fully with its obligations under the AEA) on or before July 31, 2018. The transactions contemplated by the AEA wereconsummated on August 17, 2018.53On January 25, 2018, five shareholders of the Company including its largest shareholder and its Chief Executive Officer executed a Securities PurchaseAgreement, whereby such shareholders agreed to sell a total of 617,988 Ordinary Shares and 282,694 American Depository Shares of the Company to Redstone YYLManagement Limited, a company incorporated in the British Virgin Islands, in exchange for an aggregate purchase price of $1,897,860.09.On August 25, 2018, LK Technology entered into a Stock Purchase Agreement (the “Agreement”) with the shareholders (“Shareholders”) of SuperengineHoldings Limited, a limited liability company organized under the laws of the British Virgin Islands (the “Superengine”), pursuant to which LK Technology acquiredall of the issued and outstanding capital stock of Superengine for an aggregate purchase price of US$60 million (the “Purchase Price”), which are paid by theissuance of our Ordinary Shares in an amount equal to the quotient of (x) the Purchase Price divided by (y) the average of the closing prices of the Ordinary Shareson the NASDAQ Capital Market over the 12 months period preceding July 31, 2018. We are a party to the Agreement in connection with the issuance of theOrdinary Shares and certain other limited purposes.D. EXCHANGE CONTROLS.This section sets forth a summary of the most significant regulations or requirements that affect our business activities in China or our shareholders’ rightto receive dividends and other distributions from us.Regulations on Internet Content ProvidersThe Administrative Measures on Internet Information Services, or the Internet Content Measures, which was promulgated by the State Council onSeptember 25, 2000 and amended on January 8, 2011, set out guidelines on the provision of internet information services. The Internet Content Measures specifiesthat internet information services regarding news, publications, education, medical and health care, pharmacy and medical appliances, among other things, arerequired to be examined, approved and regulated by the relevant authorities. Internet information providers are prohibited from providing services beyond thoseincluded in the scope of their licenses or filings. Furthermore, the Internet Content Measures specifies a list of prohibited content. Internet information providers areprohibited from producing, copying, publishing or distributing information that is humiliating or defamatory to others or that infringes the legal rights of others.Internet information providers that violate such prohibition may face criminal charges or administrative sanctions. Internet information providers must monitor andcontrol the information posted on their websites. If any prohibited content is found, they must remove the content immediately, keep a record of such content andreport to the relevant authorities.The Internet Content Measures classifies internet information services into commercial internet information services and noncommercial internetinformation services. Commercial internet information services refer to services that provide information or services to internet users with charge. A provider ofcommercial internet information services must obtain an ICP License.Regulations on Internet Audiovideo Program ServicesOn December 20, 2007, the MII and the State Administration of Press, Publication, Radio, Film and Television, or the SAPPRFT, jointly issued theAdministrative Provisions for the Internet AudioVideo Program Service, or the Audiovideo Program Provisions, which came into effect on January 31, 2008 andwas amended on August 28, 2015. The Audiovideo Program Provisions defines “internet audiovideo program services” as producing, editing and integrating ofaudiovideo programs, supplying audiovideo programs to the public via the internet, and providing audiovideo programs uploading and transmission services to athird party. Entities providing internet audiovideo programs services must obtain an internet audiovideo program transmission license. Applicants for such licensesshall be stateowned or statecontrolled entities unless an internet audiovideo program transmission license has been obtained prior to the effectiveness of theAudiovideo Program Provisions in accordance with the thenineffect laws and regulations. In addition, foreigninvested enterprises are not allowed to engage inthe abovementioned services. According to the Audiovideo Program Provisions and other relevant laws and regulations, audiovideo programs provided by theentities supplying Internet audiovideo program services shall not contain any illegal content or other content prohibited by the laws and regulations, such as anycontent against the basic principles in the PRC Constitution, any content that damages the sovereignty of the country or national security, and any content thatdisturbs social order or undermine social stability. An audiovideo program that has already been broadcast shall be retained in full for at least 60 days. Movies,television programs and other media content used as Internet audiovideo programs shall comply with relevant administrative regulations on programs broadcaststhrough radio, movie and television channels. Entities providing services related to Internet audiovideo programs shall immediately delete the audiovideoprograms violating laws and regulations, keep relevant records, report relevant authorities and implement other regulatory requirements.54The Categories of the Internet AudioVideo Program Services, or the Audiovideo Program Categories, promulgated by SAPPRFT on March 10, 2017,classifies internet audio/video programs into four categories: (I) Category I internet audio/video program service, which is carried out with a form of radio station ortelevision station; (II) Category II internet audio/video program service, including (a) rebroadcasting service of current political news audio/video programs; (b)hosting, interviewing, reporting and commenting service of arts, entertainment, technology, finance and economics, sports, education and other specializedaudio/video programs; (c) producing (interviewing not included) and broadcasting service of arts, entertainment, technology, finance and economics, sports,education and other specialized audio/video programs; (d) producing and broadcasting service of internet films/dramas; (e) aggregating and broadcasting service offilms, television dramas and cartoons; (f) aggregating and broadcasting service of arts, entertainment, technology, finance and economics, sports, education andother specialized audio/video programs; and (g) live audio/video broadcasting service of cultural activities of common social organizations, sport events or otherorganization activities; and (III) Category III internet audio/video program service, including (a) aggregating service of online audio/video contents, and (b) rebroadcasting service of the audio/video programs uploaded by internet users; and (IV) Category III internet audio/video program service, including (a) rebroadcasting of the radio/television program channels; and (b) rebroadcasting of internet audio/video program channels.On May 27, 2016, the SAPPRFT issued the Notice on Relevant Issues concerning Implementing the Approval Works of Upgrading Mobile Internet AudioVideo Program Service, or the Mobile AudioVideo Program Notice. The Mobile AudioVideo Program Notice provides that the mobile Internet audiovideo programservices shall be deemed Internet audiovideo program service. Entities which have obtained the approvals to provide the Internet audiovideo program servicesmay use mobile WAP websites or mobile applications to provide audiovideo program services. Entities with regulatory approvals may operate mobile applicationsto provide the audiovideo program services The types of the programs shall be within the permitted scope as provided in the licenses and such mobile applicationsshall be filed with the SAPPRFT.Regulations on Production and Operation of Radio/Television ProgramsOn July 19, 2004, the SAPPRFT promulgated the Administrative Measures on the Production and Operation of Radio and Television Programs, or the Radioand Television Program Production Measures, which came into effect on August 20, 2004 and was amended on August 28, 2015. The Radio and Television ProgramProduction Measures provides that any business that produces or operates radio or television programs must first obtain a Radio and Television ProgramProduction and Operation Permit. Entities holding such permits shall conduct their business within the permitted scope as provided in their permits. In addition,foreigninvested enterprises are not allowed to engage in the abovementioned services.Regulations on Online Advertising ServicesOn April 24, 2015, the Standing Committee of the National People’s Congress enacted the Advertising Law of the People’s Republic of China, or the NewAdvertising Law, effective on September 1, 2015. The New Advertising Law increases the potential legal liability of advertising services providers and strengthensregulations of false advertising. On July 4, 2016, the State Administration for Industry and Commerce, or the SAIC, issued the Interim Measures of theAdministration of Online Advertising, or the SAIC Interim Measures, effective on September 1, 2016. The New Advertising Law and the SAIC Interim Measuresrequire that online advertisements may not affect users’ normal internet use and internet popup ads must display a “close” sign prominently and ensure onekeyclosing of the popup windows. The SAIC Interim Measures provides that all online advertisements must be marked “Advertisement” so that viewers can easilyidentify them as such. Moreover, the SAIC Interim Measures treats paid search results as advertisements that are subject to PRC advertisement laws, and requiresthat paid search results be conspicuously identified on search result pages as advertisements. The New Advertising Law and SAIC Interim Measures require us toconduct more stringent examination and monitoring of our advertisers and the content of their advertisements.55Regulations on Online GamesIn September 2009, the GAPP (currently known as the SAPPRFT), together with the National Copyright Administration, and the National Office ofCombating Pornography and Illegal Publications jointly issued the Notice on Further Strengthening on the Administration of Preexamination and Approval ofOnline Game and the Examination and Approval of Imported Online Game, or the Circular 13. The Circular 13 states that foreign investors are not permitted to investin online game operating businesses in the PRC via wholly foreignowned entities, Sinoforeign equity joint ventures or cooperative joint ventures or to exercisecontrol over or participate in the operation of domestic online game businesses through indirect means, such as other joint venture companies or contractual ortechnical arrangements. If the our contractual arrangements were deemed under the Circular 13 to be an “indirect means” for foreign investors to exercise controlover or participate in the operation of a domestic online game business, our contractual arrangements might be challenged by the SAPPRFT. We are not aware ofany online game companies which use the same or similar contractual arrangements having been challenged by the SAPPRFT as using those contractualarrangements as an “indirect means” for foreign investors to exercise control over or participate in the operation of a domestic online game business or having beenpenalized or ordered to terminate operations since the Circular 13 became effective. However it is unclear whether and how the Circular 13 might be interpreted orimplemented in the future. See “Risk Factors—If the PRC government finds that the agreements that establish the structure for operating certain of our operations inChina do not comply with PRC regulations relating to the relevant industries, or if these regulations or the interpretation of existing regulations change in the future,we could be subject to severe penalties or be forced to relinquish our interests in those operations.”The Interim Measures for the Administration of Online Games, or the Online Game Measures, issued by the MOC, which took effect on August 1, 2010 andamended on December 15, 2017, regulates a broad range of activities related to the online games business, including the development, production and operation ofonline games, the issuance of virtual currencies used for online games, and the provision of virtual currency trading services. The Online Game Measures providesthat any entity that is engaged in online game operations must obtain an Network Cultural Business Permit, and require the content of an imported online game to beexamined and approved by the MOC prior to the game’s launch and require a domestic online game to be filed with the MOC within 30 days after its launch. TheNotice of the Ministry of Culture on the Implementation of the Interim Measures for the Administration of Online Games, which was issued by the MOC on July 29,2010 to implement the Online Game Measures, (i) requires online game operators to protect the interests of online game users and specifies that certain terms thatmust be included in service agreements between online game operators and the users of their online games, (ii) requires content review of imported online gamesand filing procedures for domestic online games, (iii) emphasizes the protection of minors playing online games, and (iv) requests online game operators to promoterealname registration by their game users.Regulations on Information Security, Censorship and PrivacyThe Standing Committee of the National People’s Congress, China’s national legislative body, enacted the Decisions on the Maintenance of InternetSecurity on December 28, 2000 that may subject persons to criminal liabilities in China for any attempt to use the internet to: (i) gain improper entry to a computer orsystem of strategic importance; (ii) disseminate politically disruptive information; (iii) leak state secrets; (iv) spread false commercial information or (v) infringe uponintellectual property rights. In 1997, the Ministry of Public Security issued the Administration Measures on the Security Protection of Computer InformationNetwork with International Connections which prohibits using the internet to leak state secrets or to spread socially destabilizing materials. If an ICP license holderviolates these measures, the PRC government may revoke its ICP license and shut down its websites. Pursuant to the Ninth Amendment to the Criminal Law issuedby the Standing Committee of the National People’s Congress on August 29, 2015, effective on November 1, 2015, any ICP provider that fails to fulfill the obligationsrelated to internet information security as required by applicable laws and refuses to take corrective measures, will be subject to criminal liability for (i) any largescale dissemination of illegal information; (ii) any severe effect due to the leakage of users’ personal information; (iii) any serious loss of evidence of criminalactivities; or (iv) other severe situations, and any individual or entity that (i) sells or provides personal information to others unlawfully or (ii) steals or illegallyobtains any personal information will be subject to criminal liability in severe situations.56The Cybersecurity Law of the PRC, or the Cybersecurity Law, which was promulgated on November 7, 2016 by the Standing Committee of the NationalPeople’s Congress and came into effect on June 1, 2017, provides that network operators shall meet their cyber security obligations and shall take technicalmeasures and other necessary measures to protect the safety and stability of their networks. Under the Cybersecurity Law, network operators are subject to varioussecurity protectionrelated obligations, including: (i) network operators shall comply with certain obligations regarding maintenance of the security of internetsystems; (ii) network operators shall verify users’ identities before signing agreements or providing certain services such as information publishing or realtimecommunication services; (iii) when collecting or using personal information, network operators shall clearly indicate the purposes, methods and scope of theinformation collection, the use of information collection, and obtain the consent of those from whom the information is collected; (iv) network operators shall strictlypreserve the privacy of user information they collect, and establish and maintain systems to protect user privacy; (v) network operators shall strengthenmanagement of information published by users, and when they discover information prohibited by laws and regulations from publication or dissemination, theyshall immediately stop dissemination of that information, including taking measures such as deleting the information, preventing the information from spreading,saving relevant records, and reporting to the relevant governmental agencies.Regulations on Intellectual Property RightsRegulations on CopyrightThe Copyright Law of the PRC, or the Copyright Law, which took effect on June 1, 1991 and was amended in 2001 and in 2010, provides that Chinesecitizens, legal persons, or other organizations shall, whether published or not, own copyright in their copyrightable works, which include, among others, works ofliterature, art, natural science, social science, engineering technology and computer software. Copyright owners enjoy certain legal rights, including right ofpublication, right of authorship and right of reproduction. The Copyright Law as revised in 2010 extends copyright protection to Internet activities, productsdisseminated over the Internet and software products. In addition, Copyright Law provides for a voluntary registration system administered by the China CopyrightProtection Center, or the CPCC. According to the Copyright Law, an infringer of the copyrights shall be subject to various civil liabilities, which include ceasinginfringement activities, apologizing to the copyright owners and compensating the loss of copyright owner. Infringers of copyright may also subject to fines and/oradministrative or criminal liabilities in severe situations.The Computer Software Copyright Registration Measures, or the Software Copyright Measures, promulgated by the State Council on December 20, 2001and amended on January 30, 2013, regulates registrations of software copyright, exclusive licensing contracts for software copyright and assignment agreements.The National Copyright Administration, or the NCA administers software copyright registration and the CPCC, is designated as the software registration authority.The CPCC shall grant registration certificates to the Computer Software Copyrights applicants which meet the requirements of both the Software CopyrightMeasures and the Computer Software Protection Regulations (Revised in 2013).The Provisions of the Supreme People’s Court on Certain Issues Related to the Application of Law in the Trial of Civil Cases Involving Disputes onInfringement of the Information Network Dissemination Rights specifies that disseminating works, performances or audiovideo products by the internet users orthe internet service providers via the internet without the permission of the copyright owners shall be deemed to have infringed the right of dissemination of thecopyright owner.57The Measures for Administrative Protection of Copyright Related to Internet, which was jointly promulgated by the NCA and the MIIT on April 29, 2005and became effective on May 30, 2005, provides that upon receipt of an infringement notice from a legitimate copyright holder, an ICP operator must take remedialactions immediately by removing or disabling access to the infringing content. If an ICP operator knowingly transmits infringing content or fails to take remedialactions after receipt of a notice of infringement that harms public interest, the ICP operator could be subject to administrative penalties, including an order to ceaseinfringing activities, confiscation by the authorities of all income derived from the infringement activities, or payment of fines.On May 18, 2006, the State Council promulgated the Regulations on the Protection of the Right to Network Dissemination of Information (as amended in2013). Under these regulations, an owner of the network dissemination rights with respect to written works or audio or video recordings who believes thatinformation storage, search or link services provided by an Internet service provider infringe his or her rights may require that the Internet service provider delete, ordisconnect the links to, such works or recordings.Patent LawsAccording to the Patent Law of the PRC (Revised in 2008), the State Intellectual Property Office is responsible for administering patent law in the PRC. Thepatent administration departments of provincial, autonomous region or municipal governments are responsible for administering patent law within their respectivejurisdictions. The Chinese patent system adopts a firsttofile principle, which means that when more than one person file different patent applications for the sameinvention, only the person who files the application first is entitled to obtain a patent of the invention. To be patentable, an invention or a utility model must meetthree criteria: novelty, inventiveness and practicability. A patent is valid for twenty years in the case of an invention and ten years in the case of utility models anddesigns.Trademark LawsTrademarks are protected by the Trademark Law of the PRC (Revised in 2013) which was adopted in 1982 and subsequently amended in 1993, 2001 and 2013respectively as well as by the Implementation Regulations of the PRC Trademark Law adopted by the State Council in 2002 and as most recently amended on April29, 2014. The Trademark Office under the SAIC handles trademark registrations. The Trademark Office grants a tenyear term to registered trademarks and the termmay be renewed for another tenyear period upon request by the trademark owner. A trademark registrant may license its registered trademarks to another party byentering into trademark license agreements, which must be filed with the Trademark Office for its record. As with patents, the Trademark Law has adopted a firsttofile principle with respect to trademark registration. If a trademark applied for is identical or similar to another trademark which has already been registered or subjectto a preliminary examination and approval for use on the same or similar kinds of products or services, such trademark application may be rejected. Any personapplying for the registration of a trademark may not injure existing trademark rights first obtained by others, nor may any person register in advance a trademark thathas already been used by another party and has already gained a “sufficient degree of reputation” through such party’s use.Regulations on Domain NamesThe MIIT promulgated the Measures on Administration of Internet Domain Names, or the Domain Name Measures, on August 24, 2017, which took effecton November 1, 2017 and replaced the Administrative Measures on China Internet Domain Name promulgated by MII on November 5, 2004. According to theDomain Name Measures, the MIIT is in charge of the administration of PRC internet domain names. The domain name registration follows a firsttofile principle.Applicants for registration of domain names shall provide the true, accurate and complete information of their identities to domain name registration serviceinstitutions. The applicants will become the holder of such domain names upon the completion of the registration procedure.Relevant Regulations of the Hightech EnterpriseThe Ministry of Information Industry, the Ministry of Science and Technology and the State Tax Bureau collectively promulgated and issued the“Certifying Standard and Managing Measures for Hightech Enterprises” and “the Hightech Areas of Main National Support” on April 14, 2008 to certify the Hightech enterprise and encourage and support the development of the Chinese Hightech enterprises. Under the Hightech Enterprises Measures, the enterprise canenjoy the favorable tax policy when it is certified as a Hightech enterprise by the Ministry of Information Industry, the Ministry of Science and Technology and theState Tax Bureau or with its provincial branch according to the stipulated standard. The software and computer and network technology are recognized as the mainnational supported Hightech field. Kingtone Information is a Hightech enterprise and enjoys a favorable income tax rate of 15%.58Laws and Regulations of Intellectual Property RightsChina has adopted legislation governing intellectual property rights, including patents, copyrights and trademarks. China is a signatory to the maininternational conventions on intellectual property rights and became a member of the Agreement on Trade Related Aspects of Intellectual Property Rights upon itsaccession to the WTO in December 2001.PatentsThe “Patent Law of the People’s Republic of China” promulgated by the Standing Committee of the National People's Congress, adopted in 1985 andrevised in 1992, 2001 and 2008, protects registered patents. The State Intellectual Property Office of PRC handles granting patent rights, providing for a twentyyearpatent term for inventions and a tenyear patent term for utility models and designs. As we disclosed in Item 4, of this transition report on Form 20F, throughKingtone Information, we have been granted one invention patent “wireless video transmission system based on BREW platform” by the State Intellectual PropertyOffice (“SIPO”) of PRC on September 23, 2009 and therefore such invention is entitled to all the protections provided under the Patent Law for twenty years.Computer Software Copyright and AdministrationOn December 20, 2001, the State Council of PRC issued the “Regulation for Computer Software Protection of the People’s Republic of China” (the“Regulation for Computer Software Protection”) which became effective on January 1, 2002 to protect the interests of copyright owners, to promote the research andapplication and to encourage the development of the Chinese software industry. Under the Regulation for Computer Software Protection, natural persons, legalpersons or any other organizations shall have a copyright on the software developed by such persons no matter whether such software has been published. Theprotection period of software copyrights owned by the legal person or other organization is fifty years and expires on December 31 of the fiftieth year from the initialpublication date of such computer software. Currently, Kingtone Information has twelve registration certificates for software copyrights.TrademarksThe “Trademark Law of the People’s Republic of China” promulgated by the State Council of PRC, adopted in 1982 and revised in 1993 and 2001, protectsregistered trademarks. The Trademark Office under the Chinese State Administration for Industry and Commerce handles trademark registrations and grants a termof ten years to registered trademarks which are renewable for another ten years after the application to the Trademark Office by the owners of the trademarks.Trademark license agreements must be filed with the Trademark Office for record. China has a “firsttoregister” system that requires no evidence of prior use orownership. Kingtone Information has its registered trademarks as described in Item 4 of this transition report on Form 20F. Accordingly, such trademarks areentitled to the protection under the Trademark Law.Foreign Currency ExchangeOn August 29, 2008, the SAFE issued the Notice of the General Affairs Department of the State Administration of Foreign Exchange on the RelevantOperating Issues concerning the Improvement of the Administration of Payment and Settlement of Foreign Currency Capital of Foreignfunded Enterprises, orCircular 142. Pursuant to Circular 142, RMB converted from the foreign currencydenominated capital of a foreigninvested company may only be used for purposeswithin the business scope approved by the applicable governmental authority and may not be used for equity investments within the PRC unless specificallyprovided for otherwise. The use of such Renminbi capital may not be changed without SAFE’s approval and may not in any case be used to repay Renminbi loans ifthe proceeds of such loans have not been used.59See “Risk Factors — Risks Related to Doing Business in China — PRC regulation of loans and direct investment by offshore holding companies to PRCentities may delay or prevent us from using the proceeds of our initial public offering to make loans or additional capital contributions to our PRC operatingsubsidiaries, which could materially and adversely affect our liquidity and our ability to fund and expand our business”.Dividend DistributionWe are a British Virgin Islands holding company and substantially all of our operations are conducted through LK Technology. We rely on dividends andother distributions from our LK Technology and its subsidiaries to provide us with our cash flow and allow us to pay dividends on the shares underlying our ADSsand meet our other obligations. The principal regulations governing distribution of dividends paid by wholly foreignowned enterprises include:1.Wholly ForeignOwned Enterprise Law (1986), as amended; and2.Implementation Rules on Wholly ForeignOwned Enterprise Law (1990), as amended.Under these regulations, wholly foreignowned enterprises in China may pay dividends only out of their accumulated profits, if any, determined inaccordance with PRC accounting standards and regulations. In addition, wholly foreignowned enterprises in China are required to set aside at least 10% of theiraftertax profit based on PRC accounting standards each year to its general reserves until the accumulative amount of such reserves reach 50% of its registeredcapital. These reserves are not distributable as cash dividends. The board of directors of a FIE has the discretion to allocate a portion of its aftertax profits to staffwelfare and bonus funds, which may not be distributed to equity owners except in the event of liquidation.Regulation of Foreign Exchange in Certain Onshore and Offshore TransactionsIn October 2005, the SAFE issued the Notice on Issues Relating to the Administration of Foreign Exchange in Fundraising and Return InvestmentActivities of Domestic Residents Conducted via Offshore Special Purpose Companies, or SAFE Notice 75, which became effective as of November 1, 2005, and wasfurther supplemented by two implementation notices issued by the SAFE on November 24, 2005 and May 29, 2007, respectively. Under Circular 75, prior registrationwith the local SAFE branch is required for PRC residents to establish or to control an offshore company for the purposes of financing that offshore company withassets or equity interests in an onshore enterprise located in the PRC. An amendment to the registration or filing with the local SAFE branch by such PRC resident isalso required for the injection of equity interests or assets of an onshore enterprise in the offshore company or overseas funds raised by such offshore company, orany other material change with respect to the offshore company in connection with any increase or decrease of capital, transfer of shares, merger, division, equityinvestment, debt investment, or creation of any security interest over any assets located in the PRC.Under SAFE Notice 75, PRC residents are further required to repatriate into the PRC all of their dividends, profits or capital gains obtained from theirshareholdings in the offshore entity within 180 days of their receipt of such dividends, profits or capital gains. The registration and filing procedures under SAFENotice 75 are prerequisites for other approval and registration procedures necessary for capital inflow from the offshore entity, such as inbound investments orshareholders loans, or capital outflow to the offshore entity, such as the payment of profits or dividends, liquidating distributions, equity sale proceeds, or thereturn of funds upon a capital reduction. Therefore, failure to comply with such registration may subject us to certain restrictions on, including but not limited to, theincrease of the registered capital of our PRC subsidiary, making loans to our PRC subsidiary, and making distributions to us from our onshore companies.Regulations of Overseas Investments and ListingsOn August 8, 2006, six PRC regulatory agencies, including the MOFCOM, the State Assets Supervision and Administration Commission, the StateAdministration for Taxation, the State Administration for Industry and Commerce, the CSRC and the SAFE, jointly adopted the New M&A Rule, which becameeffective on September 8, 2006. This regulation, among other things, includes provisions that purport to require that an offshore SPV formed for purposes ofoverseas listing of equity interests in PRC companies and controlled directly or indirectly by PRC companies or individuals obtain the approval of the CSRC prior tothe listing and trading of such SPV’s securities on an overseas stock exchange.60On September 21, 2006, the CSRC published on its official website procedures regarding its approval of overseas listings by SPVs. The CSRC approvalprocedures require the filing of a number of documents with the CSRC and it would take several months to complete the approval process.The application of the New M&A Rule with respect to overseas listings of SPVs remains unclear with no consensus currently existing among the leadingPRC law firms regarding the scope of the applicability of the CSRC approval requirement.We believe that, based on our understanding of the current PRC laws, regulations and rules and the procedures announced on September 21, 2006, there isno requirement in this regulation that would require an application to be submitted to the MOFCOM or the CSRC for the approval of the listing and trading of ourADSs on the NASDAQ Capital Market.See “Risk Factors — Risks Related to Doing Business in China — If we were required to obtain the prior approval of the China Securities RegulatoryCommission, or CSRC, of the listing and trading of our ADSs on the NASDAQ Capital Market, we may face regulatory actions or other sanctions from the CSRC orother PRC regulatory agencies.”E. TAXATIONThe following discussion sets forth the material British Virgin Islands, PRC and U.S. federal income tax consequences of an investment in our ADSs andthe ordinary shares represented by our ADSs, sometimes referred to collectively as the “securities”. It is based upon laws and relevant interpretations thereof ineffect as of the date of this report, all of which are subject to change. This discussion does not deal with all possible tax consequences relating to an investment inthe securities, such as the tax consequences under state, local and other tax laws. As used in this discussion, “we,” “our” and “us” refers only to LuokungTechnology Ltd.British Virgin Islands TaxationUnder the law of the British Virgin Islands as currently in effect, a holder of the securities who is not a resident of the British Virgin Islands is not liable forBritish Virgin Islands tax on dividends paid with respect to the securities and all holders of the securities are not liable to the British Virgin Islands for tax on gainsrealized during that year on the sale or disposal of such ordinary shares. The British Virgin Islands does not impose a withholding tax on dividends paid by acompany incorporated or reregistered under the BVI Act.There are no capital gains, gift or inheritance taxes levied by the British Virgin Islands on companies incorporated under the BVI Act. In addition, shares ofcompanies incorporated under the BVI Act are not subject to transfer taxes, stamp duties or similar charges.There is no income tax treaty or convention currently in effect between the United States and the British Virgin Islands or between China and the BritishVirgin Islands.61People’s Republic of China TaxationIn 2007, the PRC National People’s Congress enacted the new Enterprise Income Tax Law (the “EIT Law”), which became effective on January 1, 2008. Thenew EIT Law imposes a single uniform income tax rate of 25% on all Chinese enterprises, including foreigninvested enterprises, and levies a withholding tax rate of10% on dividends payable by Chinese subsidiaries to their foreign shareholders unless any such foreign shareholders’ jurisdiction of incorporation has a tax treatywith China that provides for a different withholding agreement. Under the new EIT Law, enterprises established outside China but deemed to have a “de factomanagement body” within the country may be considered “resident enterprises” for Chinese tax purposes and, therefore, may be subject to an enterprise income taxrate of 25% on their worldwide income. Pursuant to the implementation rules of the new EIT Law, a “de facto management body” is defined as a body that hasmaterial and overall management control over the business, personnel, accounts and properties of the enterprise. Although substantially all members of ourmanagement are located in China, it is unclear whether Chinese tax authorities would require (or permit) us to be treated as PRC resident enterprises. If we aredeemed a Chinese tax resident enterprise, we may be subject to an enterprise income tax rate of 25% on our worldwide income, excluding dividends received directlyfrom another Chinese tax resident enterprise, as well as PRC enterprise income tax reporting obligations. If we are not deemed to be a Chinese tax resident enterprise,we may be subject to certain PRC withholding taxes. See “Risk Factors — Risks Related to Doing Business in China — Our holding company structure may limit thepayment of dividends.” As a result of such changes, our historical tax rates may not be indicative of our tax rates for future periods and the value of our ADSs orordinary shares may be adversely affected. If we are deemed a PRC resident enterprise and investors’ gain from the sales of the securities and dividends payable byus are deemed sourced from China, such gains and dividends payable by us may be subject to PRC tax. See “Risk Factors — Risks Related to Doing Business inChina — If we were deemed a “resident enterprise” by PRC tax authorities, we could be subject to tax on our global income at the rate of 25% under the New EITLaw and our nonPRC shareholders could be subject to certain PRC taxes.United States Federal Income TaxationGeneralThe following is a discussion of the material U.S. federal income tax consequences to an investor of purchasing, owning and disposing of our securities.This discussion does not address any aspects of U.S. federal gift or estate tax or the state, local or nonU.S. tax consequences of an investment in the securities.YOU SHOULD CONSULT YOUR OWN TAX ADVISORS CONCERNING THE U.S. FEDERAL, STATE, LOCAL AND NONU.S. TAX CONSEQUENCES OFPURCHASING, OWNING AND DISPOSING OF THE SECURITIES IN YOUR PARTICULAR SITUATION.This discussion applies only to those investors that purchase the securities in this offering and that hold the securities as capital assets within the meaningof section 1221 of the Internal Revenue Code of 1986, as amended (the “Code”). This section does not apply to holders that may be subject to special tax rules,including but not limited to:1.dealers in securities or currencies;2.traders in securities that elect to use a marktomarket method of accounting;3.banks, insurance companies or certain financial institutions;4.taxexempt organizations;5.governments or agencies or instrumentalities thereof;6.partnerships or other entities treated as partnerships or other passthrough entities for U.S. federal income tax purposes or persons holding thesecurities through such entities;7.regulated investment companies or real estate investment trusts;8.holders subject to the alternative minimum tax;9.holders that actually or constructively own 10% or more of the total combined voting power of all classes of our shares entitled to vote;10.holders that acquired the securities pursuant to the exercise of employee stock options, in connection with employee stock incentive plans orotherwise as compensation;11.holders that hold the securities as part of a straddle, hedging or conversion transaction; or12.holders whose functional currency is not the U.S. dollar.62This section is based on the Code, its legislative history, existing and proposed U.S. Treasury regulations, published rulings and other administrativeguidance of the U.S. Internal Revenue Service (the “IRS”) and court decisions, all as in effect on the date hereof. These laws are subject to change or differentinterpretation by the IRS or a court, possibly on a retroactive basis.We have not sought, and will not seek, a ruling from the IRS as to any U.S. federal income tax consequence described herein. The IRS may disagree withthe discussion herein, and its determination may be upheld by a court. Moreover, there can be no assurance that future legislation, regulation, administrative rulingsor court decisions will not adversely affect the accuracy of the statements in this discussion.The discussion below of the U.S. federal income tax consequences to “U.S. Holders” will apply to a beneficial owner of the securities that is for U.S. federalincome tax purposes:1.a citizen or resident of the United States;2.a corporation (or other entity treated as a corporation) that is created or organized (or treated as created or3.organized) under the laws of the United States, any state thereof or the District of Columbia;4.an estate whose income is subject to U.S. federal income tax regardless of its source; or5.a trust if (a) a U.S. court can exercise primary supervision over the trust’s administration and one or more U.S.6.persons are authorized to control all substantial decisions of the trust, or (b) if the trust has a valid election in effect under applicable U.S.Treasury regulations to be treated as a U.S. person.If a beneficial owner of the securities is not described as a U.S. Holder and is not an entity treated as a partnership or other passthrough entity for U.S.federal income tax purposes, such owner will be considered a “NonU.S. Holder.” The material U.S. federal income tax consequences applicable specifically to NonU.S. Holders are described below under the heading “Tax Consequences to NonU.S. Holders.”If a partnership (including for this purpose any entity treated as a partnership for U.S. tax purposes) is a beneficial owner of the securities, the U.S. taxtreatment of a partner in the partnership generally will depend on the status of the partner and the activities of the partnership. A holder of the securities that is apartnership or partners in such a partnership should consult their own tax advisors about the U.S. federal income tax consequences of holding and disposing of thesecurities.This discussion assumes that any distributions made (or deemed made) on the securities and any consideration received by a holder in consideration forthe sale or other disposition of the securities will be in U.S. dollars. This discussion also assumes that the representations contained in the Deposit Agreement aretrue and that the obligations in the Deposit Agreement and any related agreement will be complied with in accordance with their terms. Finally, this discussionassumes that each ADS will only represent ordinary shares in us, and will not represent any other type of security, such as a bond, cash or other property.63For U.S. federal income tax purposes, a holder of an ADS will be treated as the beneficial owner of the shares represented by such ADS and an exchange ofan ADS for ordinary shares will not be subject to U.S. federal income tax. The U.S. Treasury has expressed concerns that parties to whom ADSs are prereleased, orintermediaries in the chain of ownership between holders of ADSs and the issuer of the securities underlying the ADSs may be taking actions that are inconsistentwith the claiming of foreign tax credits by U.S. Holders of ADSs. Such actions would also be inconsistent with the claiming of the reduced rate of tax applicable todividends received by certain noncorporate U.S. Holders, including individual U.S. Holders, as described below under “Tax Consequences to U.S.Holders — Taxation of Distributions.” Accordingly, the availability of foreign tax credits or the reduced tax rate for dividends received by certain noncorporate U.S.Holders, including individual U.S. Holders, could be affected by actions taken by parties to whom the ADSs are released, or by future actions by the U.S. Treasury.Tax Consequences to U.S. HoldersTaxation of DistributionsSubject to the passive foreign investment company, or PFIC, rules discussed below, the gross amount of any cash distributions we make with respect to aU.S. Holder in respect of such U.S. Holder’s ADSs or shares will generally be treated as dividend income if the distributions are made from our current oraccumulated earnings and profits, calculated according to U.S. federal income tax principles. Cash dividends will generally be subject to U.S. federal income tax asordinary income on the day the U.S. Holder actually or constructively receives such income. With respect to noncorporate U.S. Holders for taxable years beginningbefore January 1, 2011, dividends may be taxed at the lower applicable longterm capital gains rate provided that (a) our ADSs or shares are readily tradable on anestablished securities market in the United States, or, in the event we are deemed to be a Chinese “resident enterprise” under the EIT Law (as described above under“People’s Republic of China Taxation”), we are eligible for the benefits of the income tax treaty between the United States and the PRC (the “U.S.PRC Tax Treaty”),(b) we are not a PFIC, as discussed below, for either the taxable year in which the dividend was paid or the preceding taxable year, and (c) certain holding periodrequirements are met. Under published IRS authority, ADSs are considered for purposes of clause (a) above to be readily tradable on an established securitiesmarket in the United States only if they are listed on certain exchanges, which presently include the NASDAQ Capital Market. U.S. Holders should consult their owntax advisors regarding the availability of the lower rate for any dividends paid with respect to our ADSs or shares.Dividends will not be eligible for the dividendsreceived deduction allowed to U.S. corporations in respect of dividends received from other U.S.corporations. Generally, if we distribute noncash property as a dividend (other than pro rata distributions of our shares) out of our current or accumulated earningsand profits (as determined for U.S. federal income tax purposes), a U.S. Holder generally will include in income an amount equal to the fair market value of theproperty, on the date that it is distributed.Distributions in excess of current and accumulated earnings and profits, as determined for U.S. federal income tax purposes, will be treated as a nontaxablereturn of capital to the extent of the U.S. Holder’s basis in its shares or ADSs and thereafter as capital gain. However, we do not plan on calculating our earnings andprofits in accordance with U.S. federal income tax principles. U.S. holders therefore should generally assume that any distributions paid by us will be treated asdividends for U.S. federal income tax purposes.If PRC taxes apply to dividends paid by us to a U.S. Holder (see “People’s Republic of China Taxation,” above), such taxes may be treated as foreign taxeseligible for credit against such holder’s U.S. federal income tax liability (subject to certain limitations), and a U.S. Holder may be entitled to certain benefits under theU.S.PRC Tax Treaty. The rules relating to the U.S. foreign tax credit are complex. U.S. Holders should consult their own tax advisors regarding the creditability ofany such PRC tax and their eligibility for the benefits of the U.S.PRC Tax Treaty.64Taxation of Dispositions of SharesSubject to the PFIC rules discussed below, a U.S. holder that sells or otherwise disposes of its shares will recognize capital gain or loss for U.S. federalincome tax purposes equal to the difference between the amount realized and such U.S. Holder’s tax basis in its shares. Prior to January 1, 2011, capital gains of anoncorporate U.S. holder are generally taxed at a maximum rate of 15% where the property is held for more than one year (and 20% thereafter). The ability to deductcapital losses is subject to limitations.If PRC taxes apply to any gain from the disposition of our shares by a U.S. Holder, such taxes may be treated as foreign taxes eligible for credit against suchholder’s U.S. federal income tax liability (subject to certain limitations), and a U.S. Holder may be entitled to certain benefits under the U.S.PRC Tax Treaty. U.S.Holders should consult their own tax advisors regarding the creditability of any such PRC tax and their eligibility for the benefits of the U.S.PRC Tax Treaty.Passive Foreign Investment CompanyWe do not expect to be a PFIC for U.S. federal income tax purposes for our current tax year or in the foreseeable future. The determination of whether or notwe are a PFIC in respect of any of our taxable years is a factual determination that cannot be made until the close of the applicable tax year and that is based on thetypes of income we earn and the value and composition of our assets (including goodwill), all of which are subject to change. Therefore, we can make no assurancesthat we will not be a PFIC in respect of our current taxable year or in the future.In general, we will be a PFIC in any taxable year if either:1.at least 75% of our gross income for the taxable year is passive income; or2.at least 50% of the value, determined on the basis of a quarterly average, of our assets is attributable to assets that produce or are held for theproduction of passive income.Passive income includes dividends, interest, royalties, rents (other than certain rents and royalties derived in the active conduct of a trade or business), theexcess of gains over losses from certain types of transactions in commodities, annuities and gains from assets that produce passive income. We will be treated asowning our proportionate share of the assets and earning our proportionate share of the income of any corporation in which we own, directly or indirectly, at least25% (by value) of the stock.If we are treated as a PFIC in any year during which a U.S. Holder owns the securities, and such U.S. Holder did not make a marktomarket election, asdescribed below, the U.S. Holder will be subject to special rules with respect to:1.any gain recognized by the U.S. Holder on the sale or other disposition of its shares; and any excess distribution that we make to the U.S. Holder(generally, the excess of the amount of any distributions to such U.S. Holder during a single taxable year of such U.S. Holder over 125% of theaverage annual distributions received by such U.S. Holder in respect of the shares during the three preceding taxable years of such U.S. Holder or,if shorter, such U.S. Holder holding period for the shares).Under these rules:2.the gain or excess distribution will be allocated ratably over the U.S. Holder’s holding period for the shares;3.the amount allocated to the U.S. Holder’s taxable year in which it realized the gain or excess distribution or to the period in the U.S. Holder’sholding period before the first day of our first taxable year in which we are a PFIC will be taxed as ordinary income;4.the amount allocated to other taxable years (or portions thereof) of the U.S. Holder and included in its holding period will be taxed at the highesttax rate in effect for that year; and5.the interest charge generally applicable to underpayments of tax will be imposed in respect of the tax attributable to each such other taxable yearof the U.S. Holder. 6.Special rules apply for calculating the amount of the foreign tax credit with respect to excess distributions by a PFIC.65Alternatively, if a U.S. Holder, at the close of its taxable year, owns ordinary shares in a PFIC that are treated as marketable stock, the U.S. Holder may makea marktomarket election with respect to such shares for such taxable year. Our shares will be “marketable” to the extent that they remain regularly traded on anational securities exchange, such as the NASDAQ Capital Market. If a U.S. Holder makes this election in a timely fashion, it will not be subject to the PFIC rulesdescribed above. Instead, in general, the U.S. Holder will include as ordinary income each year the excess, if any, of the fair market value of its shares at the end ofthe taxable year over its adjusted basis in its shares. Any ordinary income resulting from this election would generally be taxed at ordinary income tax rates andwould not be eligible for the reduced rate of tax applicable to qualified dividend income. The U.S. Holder will also be allowed to take an ordinary loss in respect ofthe excess, if any, of the adjusted basis of its shares over the fair market value at the end of the taxable year (but only to the extent of the net amount of previouslyincluded income as a result of the marktomarket election). The U.S. Holder’s basis in the shares will be adjusted to reflect any such income or loss amounts. U.S.Holders should consult their own tax advisor regarding potential advantages and disadvantages of making a marktomarket election with respect to their shares.Alternatively, a U.S. Holder of stock in a PFIC may avoid the PFIC tax consequences described above in respect to our or shares by making a timely“qualified electing fund” election to include in income its pro rata share of our net capital gains (as longterm capital gain) and other earnings and profits (asordinary income), on a current basis, in each case whether or not distributed, in the taxable year of the U.S. Holder in which or with which our taxable year ends.However, the qualified electing fund election is available only if the PFIC provides such U.S. Holder with certain information regarding its earnings and profits asrequired under applicable U.S. Treasury regulations. We do not intend to furnish the information that a U.S. Holder would need in order to make a qualified electingfund election. Therefore, U.S. Holders will not be able to make or maintain such election with respect to their or shares.If a U.S. Holder owns our shares or during any year that we are a PFIC, such holder must file U.S. Internal Revenue Service Form 8621 regarding suchholder’s shares or and the gain realized on the disposition of the shares. The reduced tax rate for dividend income, discussed in “Taxation of Distributions,” is notapplicable to dividends paid by a PFIC. U.S. Holders should consult with their own tax advisors regarding reporting requirements with respect to their shares.Tax Consequences to NonU.S. HoldersDividends paid to a NonU.S. Holder in respect of our or shares generally will not be subject to U.S. federal income tax, unless the dividends are effectivelyconnected with the NonU.S. Holder’s conduct of a trade or business within the United States (and, if required by an applicable income tax treaty, are attributable toa permanent establishment or fixed base that such holder maintains in the United States).In addition, a NonU.S. Holder generally will not be subject to U.S. federal income tax on any gain attributable to a sale or other disposition of our or sharesunless such gain is effectively connected with its conduct of a trade or business in the United States (and, if required by an applicable income tax treaty, isattributable to a permanent establishment or fixed base that such holder maintains in the United States) or the NonU.S. Holder is an individual who is present in theUnited States for 183 days or more in the taxable year of sale or other disposition and certain other conditions are met (in which case, such gain from United Statessources generally is subject to tax at a 30% rate or a lower applicable tax treaty rate).Dividends and gains that are effectively connected with the NonU.S. Holder’s conduct of a trade or business in the United States (and, if required by anapplicable income tax treaty, are attributable to a permanent establishment or fixed base in the United States) generally will be subject to tax in the same manner as fora U.S. Holder and, in the case of a NonU.S. Holder that is a corporation for U.S. federal income tax purposes, may also be subject to an additional branch profits taxat a 30% rate or a lower applicable tax treaty rate.66Information Reporting and Backup Withholding In general, information reporting for U.S. federal income tax purposes generally should apply to distributions made on the securities within the UnitedStates to a noncorporate U.S. Holder and to the proceeds from sales and other dispositions of the securities by a noncorporate U.S. Holder to or through a U.S.office of a broker. Payments made (and sales and other dispositions effected at an office) outside the United States generally should be subject to informationreporting in limited circumstances.Dividend payments made to U.S. Holders and proceeds paid from the sale or other disposition the securities may be subject to information reporting to theIRS and possible U.S. federal backup withholding at a current rate of 28%. Certain exempt recipients, such as corporations, are not subject to these informationreporting requirements. Backup withholding will not apply to a U.S. Holder who furnishes a correct taxpayer identification number and makes any other requiredcertification, or who is otherwise exempt from backup withholding. U.S. Holders who are required to establish their exempt status must provide a duly executed IRSForm W9.A NonU.S. Holder generally may eliminate the requirement for information reporting and backup withholding by providing certification of its foreignstatus, under penalties of perjury, on a duly executed applicable IRS Form W8 or by otherwise establishing an exemption.Backup withholding is not an additional tax. Rather, the amount of any backup withholding will be allowed as a credit against a U.S. Holder’s or a nonU.S.Holder’s U.S. federal income tax liability and may entitle such holder to a refund, provided that certain required information is timely furnished to the IRS.PROSPECTIVE PURCHASERS OF OUR SECURITIES SHOULD CONSULT WITH THEIR OWN TAX ADVISORS REGARDING THE APPLICATION OFTHE U.S. FEDERAL INCOME TAX LAWS TO THEIR PARTICULAR SITUATIONS AS WELL AS ANY ADDITIONAL TAX CONSEQUENCES RESULTING FROMPURCHASING, HOLDING OR DISPOSING OF OUR SECURITIES, INCLUDING THE APPLICABILITY AND EFFECT OF THE TAX LAWS OF ANY STATE, LOCALOR NONU.S. JURISDICTION, INCLUDING ESTATE, GIFT, AND INHERITANCE LAWS AND APPLICABLE TAX TREATIES.F. DIVIDENDS AND PAYING AGENTS.Not applicable.G. STATEMENT BY EXPERTS.None.H. DOCUMENTS ON DISPLAY.We previously filed a registration statement on Form F1 (File No. 333166056) with the SEC relating to our initial public offering in May 2010. This transition reportdoes not contain all of the information in the registration statement and the exhibits and financial statements included with the registration statement. References inthis transition report to any of our contracts, agreements or other documents are not necessarily complete, and you should refer to the exhibits attached to theregistration statement for copies of the actual contracts, agreements or documents. In addition, we will file transition reports on Form 20F and submit otherinformation under cover of Form 6K. As a foreign private issuer, we are exempt from the proxy requirements of Section 14 of the Exchange Act and our officers,directors and principal shareholders will be exempt from the insider shortswing disclosure and profit recovery rules of Section 16 of the Exchange Act. You may readand copy the registration statement, the related exhibits and other materials we file with the SEC at the SEC's public reference room in Washington, D.C. at 100 FStreet, Room 1580, N.E., Washington, D.C.20549. You can also request copies of those documents, upon payment of a duplicating fee, by writing to the SEC. Pleasecall the SEC at 1800SEC0330 for further information on the operation of the public reference rooms. The SEC also maintains an Internet site that contains reports,proxy and information statements and other information regarding issuers that file with the SEC. The website address is http://www.sec.gov. You may also request acopy of these filings, at no cost, by writing us at LAB 32, SOHO 3Q, No 9, Guanghua Road, Chaoyang District, Beijing, People’s Republic of China, 100020 ortelephoning us at (86) 1085866721.67I. SUBSIDIARY INFORMATIONFor a listing of our subsidiaries, see “Item 4. Information on the Company – C. Organizational Structure.”ITEM 11. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.Interest Rate RiskAs of December 31, 2017, we had no shortterm or longterm borrowings. If we borrow money in future periods, we may be exposed to interest rate risk. Ourexposure to market risk for changes in interest rates relates primarily to the interest income generated by our cash deposits with our banks and heldtomaturityinvestments. We have not used any derivative financial instruments in our investment portfolio. Interest earnings instruments carry a degree of interest rate risk. Wehave not been exposed, nor do we anticipate being exposed to material risks due to changes in interest rates. However, our future interest income may fall short ofexpectations due to changes in interest rates. Foreign Exchange RiskTranslation adjustments amounted to $90,671 and $387,375 gain as of the fiscal year ended December 31, 2017 and 2016, respectively. The Companytranslated balance sheet amounts with the exception of equity at December 31, 2017 at RMB 6.5342 to $1.00 as compared to RMB 6.9370 to $1.00 at December 31,2016. The Company stated equity accounts at their historical rate. The average translation rates applied to income statement accounts for the fiscal year endedDecember 31, 2017 and 2016 were RMB6.7356 and RMB 6.7153 to US$1.00, respectively. So far, the PRC government has been able to manage a stable exchange ratebetween RMB and the U.S. Dollar. Our future downward translation adjustments may occur and can be significant due to changes in such exchange rate.If we decide to convert our RMB into U.S. dollars for the purpose of making payments for dividends on our ordinary shares or for other business purposes,appreciation of the U.S. dollar against the RMB would have a negative effect on the U.S. dollar amount available to us.The PRC government imposes strict restrictions on PRC resident companies regarding converting RMB into foreign currencies and vice versa under capitalaccount transactions, such as receiving equity investments from outside of the PRC, making equity investments outside of the PRC, borrowing money from orlending money outside of the PRC, and repaying debt or remitting liquidated assets and/or accumulated profits outside of the PRC. These transactions have to beapproved by the relevant PRC government authorities, including but not limited to the commerce bureau, the tax bureau and the State Administration of ForeignExchange, or SAFE, and have to be conducted at banks entrusted by the local SAFE branch. As our business continues to grow, we may need to continuouslyfinance our PRC subsidiaries by raising capital from outside of the PRC. The restriction on converting RMB into foreign currencies, and vice versa, may limit ourability to use capital resources from outside of the PRC. Such restrictions may also limit our ability to remit profits from our PRC subsidiaries outside of the PRC,therefore potentially limiting our ability to pay dividends to our shareholders. In addition, such restrictions will limit our ability to freely transfer temporary excesscash in our or our subsidiaries’ bank accounts in and out of the PRC, therefore limiting our ability to conduct crossborder cash management activities to optimizethe utilization of our cash.InflationAlthough China has experienced an increasing inflation rate, inflation has not had a material impact on our results of operations in recent years. Accordingto the National Bureau of Statistics of China, the change in the consumer price index in China was 0.46%, (0.77%), and 1.16% in 2001, 2002 and 2003, respectively.However, in connection with a 3.9% increase in 2004, the PRC government announced measures to restrict lending and investment in China in order to reduceinflationary pressures in China’s economy. Following the government’s actions, the consumer price index decreased to 1.8% in 2005 and to 1.5% in 2006. In 2007, theconsumer price index increased to 4.8%. In response, China’s central bank, the People’s Bank of China, announced that the bank reserve ratio would rise half apercentage point to 15.5% in an effort to reduce inflation pressures. China’s consumer price index growth rate reached 8.7% year over year in 2008. In 2009 and 2010,the change in the consumer price index in China was minus 0.7% and 3.3%.China consumer price index in November 2017 was 3.8% higher than that of the same period in 2016. China consumer price index in December 2016 was2.4% higher than that of the same period in 2015. China consumer price index in December 2015 was 4.8% higher than that of the same period in 2014. Chinaconsumer price index in December 2014 was 3.3% higher than that of the same period in 2013. The results of the PRC government’s actions to combat inflation aredifficult to predict. Adverse changes in the Chinese economy, if any, will likely impact the financial performance of a variety of industries in China that use, or wouldbe candidates to use, our software products and services.68ITEM 12. DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES.A. DEBT SECURITIES.Not applicable. B. WARRANTS AND RIGHTS.Not applicable.C. OTHER SECURITIES.Not applicable.D. AMERICAN DEPOSITARY SHARES.The Bank of New York Mellon, as depositary (the “Depositary”) for the Company’s ADR facility, notified the owners and holders of the Company’s ADSsthat the ADS facility will terminate effective at 5:00 p.m. (Eastern Time) on September 19, 2018. Under the terms of the Deposit Agreement among the Company, theDepositary and the owners and holders of ADSs of the Company (the “Deposit Agreement”), owners and holders of the Company’s ADSs have until at leastJanuary 21, 2019 to surrender their ADSs to the Depositary for delivery of the underlying ordinary shares of the Company. Subsequent to January 21, 2019, underthe terms of the Deposit Agreement, the Depositary may attempt to sell any ordinary shares remaining on deposit with the Depositary. If the Depositary sells suchunderlying ordinary shares or receives value for such shares, holders must surrender their ADSs to obtain payment of the sale proceeds, net of expenses andapplicable tax and charges. We completed the voluntary delisting of our ADSs from the NASDAQ Capital Market on September 19, 2018.You may hold ADSs either (A) directly (i) by having ADSs registered in your name in the Direct Registration System, or (ii) by having an Americandepositary receipt, also referred to as an ADR, which is a certificate evidencing a specific number of ADSs, registered in your name, or (B) indirectly by holding asecurity entitlement in ADSs through your broker or other financial institution. If you hold ADSs directly, you are a registered ADS holder, also referred to as anADS holder. This description assumes you are an ADS holder. If you hold the ADSs indirectly, you must rely on the procedures of your broker or other financialinstitution to assert the rights of ADS holders described in this section. You should consult with your broker or financial institution to find out what thoseprocedures are.The Direct Registration System, or DRS, is a system administered by The Depository Trust Company, also referred to as DTC, pursuant to which thedepositary may register the ownership of uncertificated ADSs, which ownership will be confirmed by periodic statements sent by the depositary to the registeredholders of uncertificated ADSs.69As an ADS holder, you will not be treated as one of our registered shareholders and you will not have direct shareholder rights. British Virgin Island’s lawgoverns our direct shareholders’ rights. The depositary will be the holder of the shares underlying your ADSs. As a registered holder of ADSs, you will have ADSholder rights. A Deposit Agreement among us, the depositary and you, as an ADS holder, and all other persons indirectly holding ADSs, sets out ADS holder rightsas well as the rights and obligations of the depositary. New York law governs the Deposit Agreement and the ADSs.The following is a summary of the material provisions of the Deposit Agreement. For more complete information, you should read the entire DepositAgreement and the form of ADS, which contains the terms of the ADSs. The Deposit Agreement is filed as an exhibit to our registration statement filed on Form F1.You may obtain the registration statement and the attached Deposit Agreement from the SEC’s website at http://www.sec.gov. You may also obtain a copy of theDeposit Agreement at the SEC’s Public Reference Room, which is located at 100 F Street, NE, Washington, DC 20549. You may obtain information on the operationof the Public Reference Room by calling the SEC at 18007320330. Fees and ExpensesPersons depositing or withdrawing shares or ADS holders must pay:For:$5.00 (or less) per 100 ADSs (or portion of 100 ADSs)Issuance of ADSs, including issuances resulting from a distribution of shares orrights or other propertyCancellation of ADSs for the purpose of withdrawal, including if the DepositAgreement terminates$.05 (or less) per ADSAny cash distribution to ADS holdersA fee equivalent to the fee that would be payable if securities distributed to youhad been shares and the shares had been deposited for issuance of ADSsDistribution of securities distributed to holders of deposited securities whichare distributed by the depositary to ADS holders$.05 (or less) per ADSs per calendar yearDepositary servicesRegistration or transfer feesTransfer and registration of shares on our share register to or from the name ofthe depositary or its agent when you deposit or withdraw sharesExpenses of the depositaryCable, telex and facsimile transmissions (when expressly provided in the DepositAgreement) converting foreign currency to U.S. dollarsTaxes and other governmental charges the depositary or the custodian have topay on any ADS or share underlying an ADS, for example, share transfer taxes,stamp duty or withholding taxesAs necessaryAny charges incurred by the depositary or its agents for servicing the depositedsecuritiesAs necessaryPayment of TaxesHolders of our ADSs are responsible for any taxes or other governmental charges payable on their ADSs or on the deposited securities represented by anyof their ADSs. The depositary may refuse to register any transfer of a holder’s ADSs or allow withdrawal of the deposited securities represented by the ADSs untilsuch taxes or other charges are paid. It may apply payments owed to the holder or sell deposited securities represented by the ADSs to pay any taxes owed and theholder will remain liable for any deficiency. If the depositary sells deposited securities, it will, if appropriate, reduce the number of ADSs to reflect the sale and pay toADS holders any proceeds, or send to ADS holders any property, remaining after it has paid the taxes.70PART IIITEM 13. DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES.None.ITEM 14. MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS.Use of Proceeds.We completed our initial public offering on May 14, 2010 (the “IPO”), which generated net proceeds of approximately $14.6 million. All remaining cash onhand from the proceeds of our IPO was transferred to C Media Limited and its subsidiaries following the completion of the asset exchange transactions on August17, 2018.ITEM 15. CONTROLS AND PROCEDURES.Disclosure Controls and ProceduresOur Chief Executive Officer and Chief Financial Officer have reviewed and evaluated the effectiveness of our disclosure controls and procedures, whichincluded inquiries made to certain other of our employees. The term “disclosure controls and procedures,” as defined in Rules 13a15(e) and 15d15(e) under theExchange Act, means controls and other procedures of a company that are designed to ensure that information required to be disclosed by a company in thereports, such as this report, that it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in theSEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to bedisclosed by a company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the company’s management, including itsprincipal executive and principal financial officers, as appropriate to allow timely decisions regarding required disclosure. Management recognizes that any controlsand procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives and management necessarilyapplies its judgment in evaluating the costbenefit relationship of possible controls and procedures. Based on that evaluation, our Chief Executive Officer and ChiefFinancial Officer have each concluded that, as of December 31, 2017, the Company’s disclosure controls and procedures were not effective due to the materialweakness described in the “Management’s Report on Internal Control over Financial Reporting” section below.Management’s Report on Internal Control Over Financial ReportingOur management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Exchange ActRules 13a15(f) and 15d15(f). Internal control over financial reporting refers to the process designed by, or under the supervision of, our principal executive officerand principal financial officer, and effected by our Board of Directors, management and other personnel, to provide reasonable assurance regarding the reliability offinancial reporting and the preparation of financial statements for external purposes in accordance with U.S. GAAP and includes those policies and procedures that(i) pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of the assets of the Company; (ii)provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with U.S. GAAP, and thatreceipts and expenditures of the Company are being made only in accordance with authorizations of management and directors of the Company; and (iii) providereasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the Company’s assets that could have a materialeffect on the financial statements.71Any system of internal control, no matter how well designed, has inherent limitations. Therefore, even those systems determined to be effective canprovide only reasonable assurance with respect to financial statement preparation and presentation. Because of the inherent limitations of internal control, there is arisk that material misstatements may not be prevented or detected on a timely basis by internal control over financial reporting. However, these inherent limitationsare known features of the financial reporting process. Therefore, it is possible to design into the process safeguards to reduce, though not eliminate, this risk.Management assessed our internal control over financial reporting as of the year ended December 31, 2017. In making this assessment, management usedthe criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in the 2014 report entitled "Internal ControlIntegratedFramework." The COSO framework summarizes each of the components of a company’s internal control system, including (i) the control environment, (ii) riskassessment, (iii) control activities, (iv) information and communication, and (v) monitoring. Based on such assessment, management concluded that its internalcontrol over financial reporting as of December 31, 2017 was not effective because of the following material weakness:Lack of U.S. GAAP expertise. Although our accounting personnel are professional and experienced in accounting requirements and procedures generallyaccepted in the PRC, they do not have sufficient knowledge, experience and training in maintaining our books and records and preparing financial statements inaccordance with U.S. GAAP standards and SEC rules and regulations. The staff needs additional training to become experienced in U.S. GAAPbased reporting,including the skills of U.S. GAAPbased period end closing, consolidation of financial statements, and U.S. GAAP conversion.In order to address the above material weakness, our management plans to take the following steps:We will employ, as needed, outside professionals to provide key accounting personnel ongoing technical trainings to ensure their proper understanding ofU.S. GAAP and newly announced accounting standards.The Company believes the foregoing measures will remediate the identified material weakness in future periods. The Company is committed to monitoringthe effectiveness of these measures and making any changes that are necessary and appropriate.Notwithstanding the conclusion that its internal control over financial reporting was not effective as of the end of the period covered by this report, ourChief Executive Officer and Chief Financial Officer believe that the financial statements and other information contained in this report present fairly, in all materialrespects, its business, financial condition and results of operations. Nothing has come to the attention of management that causes them to believe that any materialinaccuracies or errors exist in the Company’s financial statements as of December 31, 2017.Attestation report of the registered public accounting firm.This transition report does not include an attestation report of the Company’s registered public accounting firm on internal control over financial reportingbecause the Company is a nonaccelerated filer permanently exempted from section 404(b) of the SarbanesOxley Act.Changes in Internal Control over Financial ReportingThere were no changes in the Company’s internal control over financial reporting that occurred during our fiscal year ended December 31, 2017 that hasmaterially affected or is reasonably likely to materially affect our internal control over financial reporting.ITEM 16. [RESERVED]ITEM 16A. AUDIT COMMITTEE FINANCIAL EXPERT.Our board of directors has determined that Mr. Dennis Galgano qualifies as an audit committee financial expert. Our board of directors has determined thatMessrs. Dennis Galgano, Jin Shi, Jiming Ha and Zhihao Xu meet the definition of an “independent director” under the applicable NASDAQ Rules and under Rule10A3 of the Securities Exchange Act of 1934, as amended.72ITEM 16B. CODE OF ETHICS.Our board of directors has adopted a code of business conduct and ethics applicable to our directors, officers and employees. We have posted the code onour website at http://www.luokung.com.ITEM 16C. PRINCIPAL ACCOUNTANT FEES AND SERVICES.Audit FeesThe aggregate fees billed by Moore Stephens CPA Limited for professional services rendered for the audit of our financial information disclosed in thistransition report on Form 20F was $280,000 for the two years ended December 31, 2017 and 2016.The aggregate fees billed by our previous auditor, BDO China Shu Lun Pan Certified Public Accountants LLP for professional services rendered for theaudit of our annual financial information included in our annual reports on Form 20F was $105,500 for each of the fiscal years ended September 30, 2017, 2016 and2015.Tax FeesWe did not engage our principal accountants to provide tax or related services during the last two fiscal years.All Other FeesWe did not engage our principal accountants to render services to us during the last two fiscal years, other than as reported above.ITEM 16D. EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES.Not applicable.ITEM 16E. PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS.Not applicable.ITEM 16F. CHANGE IN REGISTRANT’S CERTIFYING ACCOUNTANT.Not applicable.ITEM 16G. CORPORATE GOVERNANCE.We are incorporated in the BVI and our corporate governance practices are governed by applicable BVI law as well as our memorandum and articles ofassociation. In addition, because our ADSs are listed on NASDAQ, we are subject to NASDAQ’s corporate governance requirements. NASDAQ Listing Rule5620(a) requires each issuer to hold an annual meeting of shareholders no later than one year after the end of the issuer’s fiscal year end. However, NASDAQ ListingRule 5615(a)(3) permits a foreign private issuer like us to follow home country practices in lieu of certain requirements of Listing Rule 5600, provided that suchforeign private issuer discloses in its transition report filed with the SEC each requirement of Rule 5600 that it does not follow and describes the home countrypractice followed in lieu of such requirement. We follow home country practice with respect to annual meetings and did not hold an annual shareholder meeting inthe year ended December 31, 2017. We may, however, hold annual shareholder meetings in the future if there are significant issues that require shareholders’approvals.ITEM 16H. MINE SAFETY DISCLOSURE.Not applicable.73PART IIIITEM 17. FINANCIAL STATEMENTS.We have elected to provide financial statements and related information specified in Item 18.ITEM 18. FINANCIAL STATEMENTS.See “Index to Consolidated Financial Statements” for a list of all financial statements filed as part of this transition report. The Financial Statements arebeginning on page F1.ITEM 19. EXHIBITS.See the Exhibit Index following the signature page of this report, which is incorporated herein by reference.74SIGNATURESThe registrant hereby certifies that it meets all of the requirements for filing on Form 20F and that it has duly caused and authorized the undersigned tosign this transition report on its behalf.LUOKUNG TECHNOLOGY CORP.By:/s/ Xuesong Song Xuesong SongChief Executive Officer(principal executive officer)October 12, 201875EXHIBIT INDEXThe following documents are filed as part of this transition report on Form 20F.ExhibitNumberDescription1.1Amended and Restated Memorandum of Association and Articles of Association of Luokung Technology Corp., dated August 20, 2018, and ascurrently in effect.2.1*Deposit Agreement among the Company, depositary and holders of the American Depositary Receipts.2.2*Form of American Depositary Receipt.2.3*English translation of Entrusted Management Agreement dated December 15, 2009 between Xi’an Softech Co., Ltd., Xi’an Kingtone InformationTechnology Co., Ltd. and the shareholders of Xi’an Kingtone Information Technology Co., Ltd.3.1*English translation of Shareholder’s Voting Proxy Agreement dated December 15, 2009 between Xi’an Softech Co., Ltd., Xi’an Kingtone InformationTechnology Co., Ltd. and the shareholders of Xi’an Kingtone Information Technology Co., Ltd.4.1*English translation of Exclusive Technology Service Agreement dated December 15, 2009 between Xi’an Softech Co., Ltd. and Xi’an KingtoneInformation Technology Co., Ltd.4.2*English translation of Exclusive Option Agreement dated December 15, 2009 between Xi’an Softech Co., Ltd., Xi’an Kingtone InformationTechnology Co., Ltd. and the shareholders of Xi’an Kingtone Information Technology Co., Ltd.4.3*English translation of Equity Pledge Agreement dated December 15, 2009 between Xi’an Softech Co., Ltd., Xi’an Kingtone Information TechnologyCo., Ltd. and the shareholders of Xi’an Kingtone Information Technology Co., Ltd.4.4*English translation of Loan Agreement dated September 14, 2009 between Xi’an Kingtone Information Technology Co., Ltd. and Xian CityCommercial Bank.4.5*English translation of Mortgage Agreement dated September 14, 2009 between Xi’an Kingtone Information Technology Co., Ltd. and Xian CityCommercial Bank.4.6*English translation of Form of Employment Agreement entered into between the Company and the Company’s executive officers.4.7*2010 Omnibus Incentive Plan of the Company.4.8**English translation of Project Construction Contract dated August 10, 2010 between Xi’an Hu County Yuxing Agriculture Science & TechnologyCo., Ltd. and Xi’an Kingtone Information Technology Co., Ltd.4.9***Asset Exchange Agreement by and between C Media Limited and the Company dated as of January 25, 2018.4.10***Securities Purchase Agreement by and among Redstone YYL Management Limited and five shareholders holding majority of the shares of theCompany dated as of January 25, 2018.4.15Exclusive Business Cooperation Agreement by and between Zhongchuan Tianxia Information Technology (Shenzhen) Co., Ltd., and Beijing MobileVision Technology Co., Ltd., dated August 31, 2015.764.16Exclusive Option Agreement by and among Zhongchuan Tianxia Information Technology (Shenzhen) Co., Ltd., Xuesong Song, Weili Chen, PingWang, Donglai Liu, and Beijing Mobile Vision Technology Co., Ltd., dated August 31, 2015.4.17Equity Interest Pledge Agreement by and among Zhongchuan Tianxia Information Technology (Shenzhen) Co., Ltd., Xuesong Song, Weili Chen, PingWang, Donglai Liu, and Beijing Mobile Vision Technology Co., Ltd., dated August 31, 2015.4.18Addendum to Asset Exchange Agreement by and among the Company, Topsky Infotech Holdings Pte Ltd. and C Media Limited, dated October 3,2018. Incorporated by reference to the Company’s Current Report on Form 6K filed on October 4, 2018.4.19Stock Purchase Agreement, dated August 25, 2018, by and among the Company, LK Technology Ltd., and the shareholders listedtherein. Incorporated by reference to the Company’s Current Report on Form 6K filed on August 27, 2018.4.20Power of Attorney by Weili Chen, dated August 31, 2015.4.21Power of Attorney by Ping Wang, dated August 31, 2015.4.22Power of Attorney by Donglai Liu, dated August 31, 2015.4.23Power of Attorney by Xuesong Song, dated August 31, 2015.8.1List of Subsidiaries and Consolidated Variable Interest Entities10.1Employment Agreement, dated August 19, 2018, between Luokung Technology Corp. and Xuesong Song.†10.2Employment Agreement, dated August 19, 2018, by and between Luokung Technology Corp. and Jie Yu.†12.1Certification of Chief Executive Officer required by Rule 13a14(a).12.2Certification of Chief Financial Officer required by Rule 13a14(a).13.1Certification of Chief Executive Officer required by Rule 13a14(a).13.2Certification of Chief Financial Officer required by Rule 13a14(a).101.INSXBRL Instance Document.101.SCHXBRL Taxonomy Extension Schema Document.101.CALXBRL Taxonomy Extension Calculation Linkbase Document.101.DEFXBRL Taxonomy Extension Definition Linkbase Document.101.LABXBRL Taxonomy Extension Label Linkbase Document.101.PREXBRL Taxonomy Extension Presentation Linkbase Document.*Previously filed as an exhibit to the Company’s Registration Statement on Form F1 (Reg. No. 333166056) filed with the Commission and incorporated hereinby reference.**Previously filed as exhibits to the Company’s Transition Report on Form 20F filed with the Commission on January 20, 2011 and incorporated herein byreference.***Previously filed as exhibits to the Company’s Annual Report on Form 20F filed with the Commission on February 9, 2018 and incorporated herein byreference.†Indicates management contract or compensatory plan, contract or arrangement.77LK Technology Ltd. and SubsidiariesCONSOLIDATED FINANCIAL STATEMENTSTABLE OF CONTENTSPage(s)Report of Independent Registered Public Accounting FirmF2Consolidated Financial StatementsConsolidated Balance SheetsF3Consolidated Statements of Operations and Comprehensive LossF4application.Chuang (Vincent) Tao was appointed as a member of the Board effective on August 25, 2018. Dr. Tao was the Chairman of SuperEngine Suzhou from 2014to 2017. Dr. Tao has been the president of the Seasky Angel Investment Alliance of Shanghai since 2015. Dr. Tao received his Bachelor Degree of geographicinformation and telemetry from Wuhan University in China in 1990 and received his Ph.D. from University of Calgary, Canada in 1997.Dennis Galgano was appointed as a director of the Company following the consummation of the asset exchange agreement. He was a registered consultantwith Morgan Joseph Triartisan LLC from November 2016 until October 2017, and previously served as vice chairman and head of international investment bankingfor Morgan Joseph Triartisan LLC, which is a registered broker dealer engaged in the investment banking and financial advisory industry. Mr. Galgano received aB.S. degree in Chemistry from St. John’s University and an M.B.A. from The Wharton School in 1972.Jin Shi was appointed as a director of the Company following the consummation of the asset exchange transactions. Mr. Shi has served as the managingpartner of Chum Capital Group, a merchant bank focused on helping Chinese growth companies to access global capital, since January 2013. Mr. Shi has also servedas a director of Seven Stars Cloud Group, Inc. (NASDAQ: SSC), a premium video on demand service provider, since January 2014, and joined the audit committee ofits board of directors in March 2016. He also served as a director and member of the audit committee of Pingtan Marine Enterprise, Ltd. (NASDAQ: PME), a marineenterprise group primarily engaged in ocean fishing through its subsidiaries. Mr. Shi received an EMBA degree from the Guanghua Management School of BeijingUniversity, and a Bachelor’s degree of science in Chemical Engineering from Tianjin University.Jiming Ha was appointed as a director of the Company following the consummation of the asset exchange agreement, and has also served as a seniorresearch fellow for the China Finance 40 Forum since March 1, 2018, and previously served as a managing director of Goldman Sachs from January 2017 to April2017. Mr. Ha served as a vice chairman and chief investment strategist of the Investment Strategy Group for Private Wealth Management at Goldman Sachs from2010 to January 2017. Mr. Ha holds a PhD in Economics from the University of Kansas and Master’s and Bachelor’s degrees of science from Fudan University.Zhihao Xu was appointed as a director of the Company following the consummation of the asset exchange transactions. Mr. Xu has served as the chiefexecutive officer of Geely Group Co., Ltd., in Hangzhou, China, since December 2017, and previously served as the chairman and chief executive officer of BeijingDingchengrenhe Investment Co., Ltd., a funds management company, from January 2017 to December 2017. Mr. Xu served as the chairman of president of HNAUSOLV CO., LTD., and the chief innovation officer of HNA Logistics Group from January 2014 to December 2016, and prior to that as the chairman of GopayInnovation Technology Co. Ltd., an online payment system operator supporting online money transfers, from April 2012 to January 2014. Mr. Xu graduated from theBusiness School of Renmin University of China and from the Wudaokou Finance College of Tsinghua University with a fund qualification certificate and securitiesqualification certificate.B. COMPENSATION.Compensation of Directors and Executive OfficersFor the ninemonth transition period ended September 30, 2018 and the fiscal year ended December 31, 2017, we did not pay any cash compensation to ourexecutive officers of LK Technology Ltd. and a to our directors for serving on our board of directors of LK Technology Ltd.37Other than nonemployee directors, we do not intend to compensate directors for serving on our board of directors or any of its committees. We do,however, intend to reimburse each member of our board of directors for outofpocket expenses incurred by each director in connection with attending meetings ofthe board of directors and its committees.AdministrationThe Incentive Plan is administered by our board of directors, or at the discretion of the board, by our compensation committee. Our board of directors hasdelegated authority to our compensation committee to administer the Incentive Plan. Subject to the terms of the Incentive Plan, the compensation committee mayselect participants to receive awards, determine the types of awards and terms and conditions of awards, and interpret provisions of the Incentive Plan.The ordinary shares issued or to be issued under the Incentive Plan consist of authorized but unissued shares. If any ordinary shares covered by an awardare not purchased or are forfeited, or if an award otherwise terminates without delivery of any ordinary shares, then the number of ordinary shares counted againstthe aggregate number of ordinary shares available under the plan with respect to the award will, to the extent of any such forfeiture or termination, again be availablefor making awards under the Incentive Plan.EligibilityAwards may be made under the Incentive Plan to our employees, officers, directors, consultants or advisers or to any of our affiliates, and to any otherindividual whose participation in the Incentive Plan is determined to be in our best interests by our board of directors.Amendment or Termination of the PlanOur board of directors may terminate or amend the Incentive Plan at any time and for any reason. No amendment, however, may adversely impair the rightsof grantees with respect to outstanding awards. The Incentive Plan has a term of ten years. Amendments will be submitted for shareholder approval to the extentrequired by applicable stock exchange listing requirements or other applicable laws.OptionsThe Incentive Plan permits the granting of options to purchase ordinary shares intended to qualify as incentive share options under the Internal RevenueCode and share options that do not qualify as incentive share options, or nonqualified share options.The exercise price of each share option may not be less than 100% of the fair market value of our ADSs representing ordinary shares on the date of grant.In the case of certain 10% shareholders who receive incentive share options, the exercise price may not be less than 110% of the fair market value of our ADSsrepresenting ordinary shares on the date of grant. An exception to these requirements is made for options that we grant in substitution for options held byemployees of companies that we acquire. In such a case the exercise price is adjusted to preserve the economic value of the employee’s share option from his or herformer employer.The term of each share option is fixed by the compensation committee and may not exceed ten years from the date of grant. The compensation committeedetermines at what time or times each option may be exercised and the period of time, if any, after retirement, death, disability or termination of employment duringwhich options may be exercised.Options may be made exercisable in installments. The award agreement provides the vesting of the options. Exercisability of options may be accelerated bythe compensation committee.38In general, an optionee may pay the exercise price of an option by (1) cash or check (in U.S. dollars or Renminbi or other local currency as approved by thecompensation committee), (2) ordinary shares held for such period of time as may be required by the compensation committee, (3) delivery of a notice of a marketorder with a broker with respect to ordinary shares then issuable upon exercise of an option, and that the broker has been directed to pay us a sufficient portion ofnet proceeds of the sale in satisfaction of the exercise price, provided that payment of such proceeds is then made to us upon settlement of such sale, (4) otherproperty acceptable to the compensation committee with a fair market value equal to the exercise price, (5) cashless exercise or (6) any combination of the foregoing.Share options granted under the Incentive Plan may not be sold, transferred, pledged, or assigned other than by will or under applicable laws of descentand distribution. However, we may permit limited transfers of nonqualified options for the benefit of immediate family members of grantees to help with estateplanning concerns or pursuant to a domestic relations order in settlement of marital property rights.Other AwardsThe compensation committee may also award under the Incentive Plan:1.ordinary shares subject to restrictions;2.deferred ordinary shares, credited as deferred ordinary share units, but ultimately payable in the form of unrestricted ordinary shares inaccordance with the terms of the grant or with the participant’s deferral election;3.ordinary share units subject to restrictions;4.unrestricted ordinary shares, which are ordinary shares issued at no cost or for a purchase price determined by the compensation committee whichare free from any restrictions under the 2011 Omnibus Incentive Plan;5.dividend equivalent rights entitling the grantee to receive credits for dividends that would be paid if the grantee had held a specified number ofordinary shares; or6.a right to receive a number of ordinary shares or, in the discretion of the compensation committee, an amount in cash or a combination of ordinaryshares and cash, based on the increase in the fair market value of the ADSs representing ordinary shares underlying the right during a statedperiod specified by the compensation committee.Effect of Certain Corporate TransactionsCertain change of control transactions involving us may cause awards granted under the Incentive Plan to vest, unless the awards are continued orsubstituted for by the surviving company in connection with the corporate transaction.Unless otherwise provided in the appropriate option agreement on the date of grant or provided by our board of directors thereafter with the consent of thegrantee, options granted under the Incentive Plan become exercisable in full following (1) a dissolution of our company or a merger, consolidation or reorganizationof our company with one or more other entities in which we are not the surviving entity, (2) a sale of substantially all of our assets to another person or entity, or (3)any transaction (including without limitation a merger or reorganization in which we are the surviving entity) which results in any person or entity owning 50% ormore of the combined voting power of all classes of our shares.39Adjustments for Dividends and Similar EventsThe compensation committee will make appropriate adjustments in outstanding awards and the number of ordinary shares available for issuance under theIncentive Plan, including the individual limitations on awards, to reflect ordinary share dividends, stock splits and other similar events.C. BOARD PRACTICES.Board of DirectorsOur board of directors consists of six members being Messrs. Xuesong Song, Kegang Peng, Dennis Galgano, Jin Shi, Jiming Ha and Zhiaho Xu. Ourdirectors hold office until our annual meeting of shareholders, where their successors will be duly elected and qualified, or until the directors’ death, resignation orremoval, whichever is earlier. Our directors are not subject to a term of office and hold office until their resignation, death or incapacity or until their respectivesuccessors have been elected and qualified in accordance with our fourth amended and restated memorandum of association and articles of association. A directorwill be removed from office if, among other things, the director (1) becomes bankrupt, (2) dies or becomes of unsound mind, or (3) is absent from meetings of ourboard of directors for six consecutive months without leave and our board of directors resolves that the office is vacated. A director is not entitled to any specialbenefits upon termination of service with the company.Director IndependenceOur board of directors consists of six members; Messrs. Dennis Galgano, Jin Shi, Jiming Ha and Zhihao Xu have been determined by us to be independentdirectors within the meaning of the independent director guidelines of the NASDAQ Corporate Governance Rules (the “NASDAQ Rules”).Committees of Our Board of DirectorsTo enhance our corporate governance, we established three committees under our board of directors: an audit committee, a compensation committee, and anominating and corporate governance committee. We have adopted a charter for each of these committees. The committees have the following functions andmembers.Audit CommitteeOur audit committee reports to our board of directors regarding the appointment of our independent public accountants, the scope and results of ourannual audits, compliance with our accounting and financial policies and management’s procedures and policies relating to the adequacy of our internal accountingcontrols. Our audit committee consists of Messrs. Dennis Galgano, Jin Shi, and Jiming Ha. Mr. Galgano, having accounting and financial management expertise,serves as the chairman of the audit committee and is an “audit committee financial expert” as defined by the rules and regulations of the SEC. Our board of directorshas determined that each of these persons meet the definition of an “independent director” under the applicable NASDAQ Rules and under Rule 10A3 of theSecurities Exchange Act of 1934, as amended (the “Exchange Act”).Our audit committee is responsible for, among other things:●the appointment, evaluation, compensation, oversight and termination of the work of our independent auditor (including resolution of disagreementsbetween management and the independent auditor regarding financial reporting);●an annual performance evaluation of the audit committee;●establishing procedures for the receipt, retention and treatment of complaints regarding accounting, internal accounting controls, auditing matters orpotential violations of law, and the confidential, anonymous submission by our employees of concerns regarding questionable accounting or auditingmatters or potential violations of law;40●ensuring that it receives an transition report from our independent auditor describing our internal control procedures and any steps taken to deal withmaterial control deficiencies and attesting to the auditor’s independence and describing all relationships between the auditor and us;●reviewing our annual audited financial statements and quarterly financial statements with management and our independent auditor;●reviewing and approving all proposed related party transactions;●reviewing our policies with respect to risk assessment and risk management;●meeting separately and periodically with management and our independent auditor; and●reporting regularly to our board of directors.Compensation CommitteeOur compensation committee assists the board of directors in reviewing and approving the compensation structure of our directors and executive officers,including all forms of compensation to be provided to our directors and executive officers. In addition, the compensation committee reviews share compensationarrangements for all of our other employees. Members of the compensation committee are not prohibited from direct involvement in determining their owncompensation. Our chief executive officer is not permitted to be present at any committee meeting during which his or her compensation is deliberated. Ourcompensation committee consists of Dennis Galgano and Jin Shi, with Mr. Shi serving as the chairman of the compensation committee. Our board of directors hasdetermined that each of these persons meet the definition of “independent director” under the applicable requirements of the NASDAQ Rules.Our compensation committee is responsible for, among other things:●reviewing and approving corporate goals and objectives relevant to the compensation of our chief executive officer, evaluating the performance of ourchief executive officer in light of those goals and objectives and setting the compensation level of our chief executive officer based on this evaluation;●reviewing and making recommendations to the board with respect to the compensation of our executives, incentive compensation and equitybasedplans that are subject to board approval; and●providing annual performance evaluations of the compensation committee.Nominating and Corporate Governance CommitteeOur nominating and corporate governance committee assists the board of directors in identifying and selecting or recommending individuals qualified tobecome our directors, developing and recommending corporate governance principles and overseeing the evaluation of our board of directors and management. Ournominating and corporate governance committee consists of Jiming Ha and Zhihao Xue, with Mr. Ha serving as the chairman of the nominating and corporategovernance committee. Our board of directors has determined that each of these persons meet the definition of “independent director” under the applicablerequirements of the NASDAQ Rules.Our nominating and corporate governance committee is responsible for, among other things:●selecting and recommending to our board nominees for election or reelection to our board, or for appointment to fill any vacancy;●reviewing annually with our board the current composition of the board of directors with regards to characteristics such as independence, age, skills,experience and availability of service to us;●selecting and recommending to our board the names of directors to serve as members of the audit committee and the compensation committee, as wellas the nominating and corporate governance committee itself; advising our board of directors periodically with regards to significant developments inthe law and practice of corporate governance as well as our compliance with applicable laws and regulations, and making recommendations to ourboard of directors on all matters of corporate governance and on any remedial action to be taken; and●monitoring compliance with our code of business conduct and ethics, including reviewing the adequacy and effectiveness of our procedures to ensureproper compliance.41Code of Business Conduct and EthicsOur board of directors adopted a code of business conduct and ethics applicable to our directors, officers and employees.Duties of DirectorsUnder British Virgin Islands law, our directors have a duty to act honestly, in good faith and with a view to our best interests. Our directors also have a dutyto exercise care, diligence and skills that a reasonably prudent person would exercise in comparable circumstances. In fulfilling their duty of care to us, our directorsmust ensure compliance with our memorandum of association and articles of association. We have the right to seek damages if a duty owed by our directors isbreached.The functions and powers of our board of directors include, among others:●appointing officers and determining the term of office of the officers;●authorizing the payment of donations to religious, charitable, public or other bodies, clubs, funds or associations as deemed advisable;●exercising the borrowing powers of the company and mortgaging the property of the company;●executing cheques, promissory notes and other negotiable instruments on behalf of the company; and●maintaining or registering a register of mortgages, charges or other encumbrances of the company.Remuneration and BorrowingThe directors may receive such remuneration as our board of directors may determine from time to time. Each director is entitled to be repaid or prepaid alltraveling, hotel and incidental expenses reasonably incurred or expected to be incurred in attending meetings of our board of directors or committees of our board ofdirectors or shareholder meetings or otherwise in connection with the discharge of his or her duties as a director. The compensation committee will assist thedirectors in reviewing and approving the compensation structure for the directors.Our board of directors may exercise all the powers of the company to borrow money and to mortgage or charge our undertakings and property or any partthereof, to issue debentures, debenture stock and other securities whenever money is borrowed or as security for any debt, liability or obligation of the company orof any third party.QualificationA director is not required to hold shares as a qualification to office.42Limitation on Liability and Other Indemnification MattersBritish Virgin Islands law does not limit the extent to which a company’s memorandum of association and articles of association may provide forindemnification of officers and directors, except to the extent any such provision may be held by the British Virgin Islands courts to be contrary to public policy,such as to provide indemnification against civil fraud or the consequences of committing a crime.Under our memorandum of association and articles of association, we may indemnify our directors, officers and liquidators against all expenses, includinglegal fees, and against all judgments, fines and amounts paid in settlement and reasonably incurred in connection with civil, criminal, administrative or investigativeproceedings to which they are party or are threatened to be made a party by reason of their acting as our director, officer or liquidator. To be entitled toindemnification, these persons must have acted honestly and in good faith with a view to the best interest of the company and, in the case of criminal proceedings,they must have had no reasonable cause to believe their conduct was unlawful.Compensation Committee Interlocks and Insider ParticipationNone of the members of our compensation committee is an officer or employee of our company. None of our executive officers currently serves, or in thepast year has served, as a member of the board of directors or compensation committee of any entity that has one or more executive officers serving on our board ofdirectors or compensation committee.Employment AgreementsOn August 19, 2018, the Company entered into an Employment Agreement (the “Song Agreement”) with Mr. Xuesong Song, to serve as the ChiefExecutive Officer of the Company for a fouryear term, subject to renewal. Under the terms of the Song Agreement, Mr. Song will receive no salary for his servicesbut will be eligible for an annual cash bonus in the Board’s sole discretion.On August 19, 2018, the Company entered into an Employment Agreement (the “Yu Agreement”) with Mr. Jie Yu, to serve as the Chief Financial Officer ofthe Company for a fouryear term, subject to renewal. Under the terms of the Yu Agreement, Mr. Yu will receive an annual salary of RMB700,000, and will be eligiblefor an annual cash bonus in the Board’s sole discretion.D. EMPLOYEES.As of September 30, 2018 and December 31, 2017, we had a total of 107 and 37 fulltime employees, including 48 and 13 in research and development, 9 and 2in sales and marketing and the rest in a variety of other divisions, respectively. All of our employees are fulltime employees. None of our employees is currentlyrepresented by a union and/or collective bargaining agreements. We believe that we have good relations with our employees and since our inception we have hadno history of work stoppages or union organizing campaigns.E. SHARE OWNERSHIP.The following table provides information as to the beneficial ownership of our ordinary shares as of October 10, 2018, by the persons listed. Beneficialownership of shares is determined under the rules of the SEC and generally includes any shares over which a person exercises sole or shared voting or investmentpower. For purposes of the following table, a person is deemed to have beneficial ownership of any ordinary shares if such person has the right to acquire suchshares within 60 days of October 10, 2018. For purposes of computing the percentage of outstanding shares held by each person, any shares that such person hasthe right to acquire within 60 days after of October 10, 2018 are deemed to be outstanding, but are not deemed to be outstanding for the purpose of computing thepercentage ownership of any other person. Except as otherwise noted, the persons named in the table have sole voting and investment power with respect to all ofthe ordinary shares beneficially owned by them. Unless otherwise indicated, the address of each person listed is c/o Luokung Technologies, LAB 32, SOHO 3Q, No9, Guanghua Road, Chaoyang District, Beijing, People’s Republic of China.43Percentage ownership in the following table is based on 199,317,558 ordinary shares outstanding on October 10, 2018.Number ofsharesPercent ofclassDirectors and named executive officersCharm Dragon International Limited (1)4,030,8822.03%Xuesong Song, Chairman, Chief Executive Officer and Director(2)38,156,43019.30%Kegang Peng, Vice President and Director (3)17,231,9558.71%Dennis Galgano, Director75,796*%Jin Shi, DirectorJiming Ha, DirectorZhihao Xu, Director (4)7,579,1843.83%Dongpu Zhang, President (5)2,321,7921.17%Chuang Tao, Director (6)1,221,996*%Directors and executive officers as a group (10 persons)66,587,15233.69%(1)Charm Dragon International Limited is a British Virgin Islands company controlled by Mr. Xuesong Song.(2)Consists of (i) 4,030,882 shares owned directly by Charm Dragon International Limited, a British Virgin Islands company and (ii) 22,624,793 shares owneddirectly by Bravo First Development Limited, a British Virgin Islands company. Mr. Xuesong Song is the controlling shareholder of Bravo First DevelopmentLimited. Mr. Xuesong Song is the sole director of Charm Dragon International Limited.(3)Consists of 17,231,955 shares owned directly by Plenty Prestige Enterprises Limited, a British Virgin Islands company. Mr. Kegang Peng is the sole director ofPlenty Prestige Enterprises Limited.(4)Consists of 7,579,184 shares directly owned by Geely Group Limited., a Chinese company. Mr. Zhihao Xu is the Chief Executive Officer of Geely GroupLimited.(5)Consists of 2,321,792 shares owned directly by Genoa Peak Limited, a British Virgin Islands company. Mr. Dongpu Zhang controls Genoa Peak Limited.(6)Consists of 1,221,996 shares owned directly by Globalearth Holdings Limited, a British Virgin Islands company. Mr. Chuang Tao controls Globalearth HoldingsLimited.*Represents less than 1% of shares outstandingITEM 7. MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS.A. MAJOR SHAREHOLDERSPlease refer to Item 6.E “Directors, Senior Management and Employees — Share Ownership.”To our knowledge, (A) we are not directly or indirectly owned or controlled by (i) another corporation or (ii) any foreign government and (B) there are noarrangements (including any announced or expected takeover bid), the operation of which may at a subsequent date result in a change in our control.The voting rights of our major shareholders do not differ from the voting rights of other holders of the same class of shares.44B. RELATED PARTY TRANSACTIONS. BUSINESS RELATIONSHIPS.Our subsidiaries, consolidated affiliated entities, and the subsidiaries of the consolidated affiliated entities have engaged, during the ordinary course ofbusiness, in a number of customary transactions with each other. All of these intercompany balances have been eliminated in consolidation.As of December 31, 2017, we had amounts due from related parties, C Media Limited and Ya Tuo Ji International Consultancy (Beijing) Limited, in theamounts of $11.8 million and $0.2 million, respectively. These amounts due from related parties are short term in nature, noninterest bearing, unsecured andrepayable on demand.As of December 31, 2017, we had amounts due to related parties, Mr. Xuesong Song, our chairman and chief executive officer, Thumb Beijing Branch andThumb Shenzhen Branch, in the amounts of $2.9 million, $0.6 million and $0.03 million, respectively. These amounts due to related parties are short term in nature,noninterest bearing, unsecured and payable on demand.We are party to a series of control agreements with Beijing Zhong Chuan Shi Xun. In addition, our chief executive officer, Mr. Xuesong Song, serves as andofficer of Beijing Zhong Chuan Shi Xun and is a shareholder of Beijing Zhong Chuan Shi Xun. The following table sets forth the relationship of Mr. Song withBeijing Zhong Chuan Shi Xun:NameRelationship withLuokung TechnologyRelationship withBeijing Zhong Chuan Shi XunPercentageOwnership Interest inBeijing Zhong Chuan Shi XunXuesong SongChief Executive OfficerChief Executive Officer61.83%C. INTERESTS OF EXPERTS AND COUNSEL.None.ITEM 8. FINANCIAL INFORMATION.A. CONSOLIDATED STATEMENTS AND OTHER FINANCIAL INFORMATION.See “Item 18. Financial Statements.”Legal ProceedingsTo our knowledge, other than as described below there are no material legal proceedings threatened against us. From time to time, we may be subject tovarious claims and legal actions arising in the ordinary course of business. Following the consummation of the AEA, we became successor in interest to the legalproceedings described below.Litigation with Shanghai Fusheng Weier Intelligent Control Technology Co., Ltd.On January 22, 2016, Zhong Chuan Rui You and Shanghai Fusheng Weier Intelligent Control Technology Co., Ltd. (“Fusheng Weier”) signed a contract forequipment of $1,652,842 (RMB10,800,000). Since Zhong Chuan Rui You did not make the payments of $1,126,381 (RMB7,360,000) on the due dates, Fusheng Weierfiled a lawsuit against Zhong Chuan Rui You in Shanghai Xuhui District People's Court on October 8, 2016. On March 9, 2017, Xuhui District People's Court issuedthe verdict requiring Zhong Chuan Rui You to pay the overdue debts. In August 2017, C Media Limited made the payment of $512,075 (RMB3,346,000). Theremaining balance has been accrued in accounts payable. The payment schedule for the remaining balance is being negotiated by the two parties. On February 5,2018, a hearing was held adding Zhong Chuan Shi Xun as a defendant. The Group plans to settle the remaining balance within one year.45Lawsuit with Gansu Jinlun Culture Media Co., Ltd.On August 22, 2014, Zhong Chuan Rui You and Gansu Jinlun Culture Media Co., Ltd. (“Gansu Jinlun”) signed a “Lanzhou Railway Bureau AirconditionedTrain WiFi Network System Advertising Operation Rights Agreement” for advertising on 72 trains of $1,467,880 (RMB9,604,633). Due to the dispute on theproject implementation, Zhong Chuan Rui You did not pay the advertising fee. On August 23, 2017, Gansu Jinlun filed a lawsuit with Gansu Intermediate People'sCourt. On December 19, 2017, Gansu Intermediate People's Court issued a verdict, ruling that Zhong Chuan Rui You settle the overdue advertising fee. Since only 18out of 72 trains have been installed with Wifi network system, Zhong Chuan Rui You disputed and appealed to the verdict. The next court trial date has not yet beendetermined. C Media and Gansu Jinlun are negotiating a potential settlement to resume the contract. According to the legal counsel, it is probable that the settlementwill amount to approximately $459,000 (RMB3,000,000); therefore, this amount has been accrued in accounts payable as at December 31, 2017.Litigation with Shenzhen Hua Xun Fang Zhou Technology Co., Ltd.On June 16, 2015, Zhong Chuan Rui You signed a cooperation agreement with Shenzhen Hua Xun Fang Zhou Technology Co., Ltd. (“Shenzhen Hua Xun”)and Xuesong Song, a major shareholder of C Media Limited. Pursuant to this agreement, Zhong Chuan Rui You procures equipment from Shenzhen Hua Xun.Xuesong Song acts as a joint liability guarantor for the entire debts of Zhong Chuan Rui You under this agreement. As Zhong Chuan Rui You did not make thepayments on the due dates, Shenzhen Hua Xun filed a lawsuit with Shenzhen Baoan District People's Court on May 31, 2016. On November 1, 2016, Zhong ChuanRui You, Xuesong Song and Shenzhen Hua Xun reached a settlement in Shenzhen Baoan District People's Court to settle $1,735,389 (RMB11,355,000) in fourinstalments. On December 30, 2017, the debt was assigned to C Media Limited.Dividend PolicyWe currently intend to retain all of our available funds and future earnings for use in the operation and expansion of our business and do not anticipatepaying cash dividends in the foreseeable future. Under the terms of our Amended and Restated Memorandum and Articles of Association the declaration andpayment of any dividends in the future will be determined by our board of directors, in its discretion, and will depend on a number of factors, including our earnings,capital requirements and overall financial condition and our ability to receive dividends from our subsidiaries. If we pay any dividends, we will pay our ADS holders’dividends with respect to their underlying shares to the same extent as holders of our ordinary shares, subject to the terms of the deposit agreement, including thefees and expenses payable thereunder. Cash dividends on our ordinary shares, if any, will be paid in U.S. dollars.Our ability to receive dividends from our subsidiaries may limit our ability to pay dividends on our ordinary shares. See Risk Factors – Risks Related toDoing Business in China – Our holding company structure may limit the payment of dividends” and “Item 10. Additional Information – D. Exchange Controls –Dividend Distribution”.B. SIGNIFICANT CHANGES.N/AITEM 9. THE OFFER AND LISTINGA. OFFER AND LISTING DETAILS.Markets and Share Price HistoryOur ordinary shares are not currently listed on any trading market. Our American Depository Shares (“ADSs”) were voluntarily delisted from the NASDAQCapital Market on September 19, 2018. We have applied to NASDAQ for the listing of our ordinary shares on the NASDAQ Capital Market and received an approvalfor listing of Ordinary Shares on August 6, 2018, and as of the date of this transition report, that application and approval are currently under review.46The table below sets forth the high and low reported sales prices in dollars of our ordinary shares, which are represented by ADSs, as reported byNASDAQ in the periods as indicated:ADSHighLowAnnual Highs and Lows (as of the fiscal year end 09/30 for the five most recent full financial years)*20175.592.67201610.21.62Quarterly Highs and Lows (for the two most recent full financial years and any subsequent period, based on calendarquarter end)*2018Third Quarter8.006.30Second Quarter8.824.25First Quarter6.403.702017Fourth Quarter5.592.91Third Quarter3.992.67Second Quarter4.063.07First Quarter5.152.832016Fourth Quarter6.594.20Third Quarter10.201.62Second Quarter3.101.97First Quarter3.602.12Monthly Highs and Lows (for the most recent six months)September 20188.006.41August 20187.706.63July 20187.506.30June 20188.827.55May 20187.805.92April 20187.454.25*The Company effected a 1for10 reverse stock split of its ordinary shares on November 6, 2012 (the “Reverse Split”). The ratio between each AmericanDepositary Share (“ADS”) and its underlying ordinary share postReverse Split remains the same, namely, one ADR remains to represent one ordinary sharepost the Reverse Split. The price listed here after November 6, 2012 reflected the effect from the Reverse Split.B. PLAN OF DISTRIBUTION.Not Applicable.C. MARKETS.Our ordinary shares are not currently listed on any trading market. Our ADSs were voluntarily delisted from the NASDAQ Capital Market on September 19,2018. We have applied to NASDAQ for the listing of our ordinary shares on the NASDAQ Capital Market and received an approval for listing of Ordinary Shares onAugust 6, 2018, and as of the date of this transition report, that application and approval are currently under review.47D. SELLING SHAREHOLDERS.Not applicable.E. DILUTION.Not applicable.F. EXPENSES OF THE ISSUE.Not applicable.ITEM 10. ADDITIONAL INFORMATION.A. SHARE CAPITALNot applicable.B. MEMORANDUM AND ARTICLES OF ASSOCIATIONWe are a British Virgin Islands company incorporated with limited liability and our affairs are governed by the provisions of our memorandum of associationand articles of association, as amended and restated from time to time, and by the provisions of applicable British Virgin Islands law.Our memorandum of association and articles of association authorize the issuance of up to 251,000,000 shares, which are designated into (i) 250,000,000 ofordinary shares of the Company (“Ordinary Shares”), and (ii) 1,000,000 preferred shares of the Company (“Preferred Shares”), in each case with the rights,preferences and privileges as set out in the memorandum and articles of association of the Company.Please see below for a description of our ADSs under “Item 12. Description of Securities Other Than Equity Securities – D. American Depository Shares.”The following is a summary of the material provisions of our ordinary shares and our memorandum of association and articles of association.Ordinary SharesAll of our issued and outstanding ordinary shares are fully paid and nonassessable. Holders of our ordinary shares who are nonresidents of the BritishVirgin Islands may freely hold and vote their shares.Subject to the memorandum and articles of association (and, for greater clarity, without prejudice to any special rights conferred thereby on the holders ofany other shares), an Ordinary Share of the Company confers on the holder:(a)the right to one vote per Ordinary Share at a meeting of the members or on any resolution of members;(b)the right to an equal share in any distribution paid by the Company; and(c)the right to an equal share in the distribution of the surplus assets of the Company on a winding up;48Subject to the memorandum and articles of association (and, for greater clarity, without prejudice to any special rights conferred thereby on the holders ofany other shares), a Preferred Share of the Company confers on the holder:(a)the right to 399 votes per Preferred Share at a meeting of the members or on any resolution of members;(b)the right to an equal share in any distribution paid by the Company;(c)the right to an equal share in the distribution of the surplus assets of the Company on a winding up;(d)be freely transferable, in whole or in part, by Mr. Xuesong Song to any third party through one or more Private Transactions, subject toApplicable Law; and(e)be freely transferable, in whole or in part, by Mr. Xuesong Song to any third party through one or more Public Transactions, subject to ApplicableLaw and Automatic Conversion of such Preferred Share(s) into Ordinary Share(s).Each Preferred Share shall be automatically converted at any time after issue and without the payment of any additional sum into an equal number of fullypaid Ordinary Shares upon the conclusion of any transfer by Mr. Xuesong Song to any third party through one or more Public Transactions.Limitation on Liability and Indemnification MattersUnder British Virgin Islands law, each of our directors and officers, in performing his or her functions, is required to act honestly and in good faith with aview to our best interests and exercise the care, diligence and skill that a reasonably prudent person would exercise in comparable circumstances. Our memorandumof association and articles of association provide that, to the fullest extent permitted by British Virgin Islands law or any other applicable laws, our directors will notbe personally liable to us or our shareholders for any acts or omissions in the performance of their duties. Such limitation of liability does not affect the availabilityof equitable remedies such as injunctive relief or rescission. These provisions will not limit the liability of directors under United States federal securities laws.We may indemnify any of our directors or anyone serving at our request as a director of another entity against all expenses, including legal fees, andagainst all judgments, fines and amounts paid in settlement and reasonably incurred in connection with legal, administrative or investigative proceedings. We mayonly indemnify a director if he or she acted honestly and in good faith with the view to our best interests and, in the case of criminal proceedings, the director hadno reasonable cause to believe that his or her conduct was unlawful. The decision of our board of directors as to whether the director acted honestly and in goodfaith with a view to our best interests and as to whether the director had no reasonable cause to believe that his or her conduct was unlawful, is in the absence offraud sufficient for the purposes of indemnification, unless a question of law is involved. The termination of any proceedings by any judgment, order, settlement,conviction or the entry of no plea does not, by itself, create a presumption that a director did not act honestly and in good faith and with a view to our best interestsor that the director had reasonable cause to believe that his or her conduct was unlawful. If a director to be indemnified has been successful in defense of anyproceedings referred to above, the director is entitled to be indemnified against all expenses, including legal fees, and against all judgments, fines and amounts paidin settlement and reasonably incurred by the director or officer in connection with the proceedings.We may purchase and maintain insurance in relation to any of our directors or officers against any liability asserted against the directors or officers andincurred by the directors or officers in that capacity, whether or not we have or would have had the power to indemnify the directors or officers against the liabilityas provided in our memorandum of association and articles of association.Insofar as indemnification for liabilities arising under the Securities Act may be permitted for our directors or officers under the foregoing provisions, wehave been informed that in the opinion of the Securities and Exchange Commission, such indemnification is against public policy as expressed in the Securities Actand is therefore unenforceable as a matter of United States law.49Differences in Corporate LawWe were incorporated under, and are governed by, the laws of the British Virgin Islands. The corporate statutes of the State of Delaware and the BritishVirgin Islands are similar, and the flexibility available under British Virgin Islands law has enabled us to adopt memorandum of association and articles of associationthat will provide shareholders with rights that do not vary in any material respect from those they would enjoy if we were incorporated under the Delaware GeneralCorporation Law, or Delaware corporate law. Set forth below is a summary of some of the differences between provisions of the BVI Act applicable to us and thelaws application to companies incorporated in Delaware and their shareholders.Director’s Fiduciary DutiesUnder Delaware corporate law, a director of a Delaware corporation has a fiduciary duty to the corporation and its stockholders. This duty has twocomponents: the duty of care and the duty of loyalty. The duty of care requires that a director act in good faith, with the care that an ordinarily prudent personwould exercise under similar circumstances. Under this duty, a director must inform himself of, and disclose to stockholders, all material information reasonablyavailable regarding a significant transaction. The duty of loyalty requires that a director act in a manner he reasonably believes to be in the best interests of thecorporation. He must not use his corporate position for personal gain or advantage. This duty prohibits selfdealing by a director and mandates that the bestinterest of the corporation and its stockholders take precedence over any interest possessed by a director, officer or controlling stockholder and not shared by thestockholders generally. In general, actions of a director are presumed to have been made on an informed basis, in good faith and in the honest belief that the actiontaken was in the best interests of the corporation. However, this presumption may be rebutted by evidence of a breach of one of the fiduciary duties. Should suchevidence be presented concerning a transaction by a director, a director must prove the procedural fairness of the transaction, and that the transaction was of fairvalue to the corporation.British Virgin Islands law provides that every director of a British Virgin Islands company in exercising his powers or performing his duties shall acthonestly and in good faith and in what the director believes to be in the best interests of the company. Additionally, the director shall exercise the care, diligence andskill that a reasonable director would exercise in the same circumstances taking into account the nature of the company, the nature of the decision and the positionof the director and his responsibilities. In addition, British Virgin Islands law provides that a director shall exercise his powers as a director for a proper purpose andshall not act, or agree to the company acting, in a manner that contravenes British Virgin Islands law or the memorandum association or articles of association of thecompany.Amendment of Governing DocumentsUnder Delaware corporate law, with very limited exceptions, a vote of the stockholders is required to amend the certificate of incorporation. Under BritishVirgin Islands law and our memorandum of association and articles of association, (i) our shareholders may amend our memorandum of association and articles ofassociation by a resolution of shareholders, or (ii) our board of directors may amend our memorandum of association and articles of association by a resolution ofdirectors without a requirement for a resolution of shareholders so long as the amendment does not:●restrict the rights of the shareholders to amend the memorandum of association and articles of association;●change the percentage of shareholders required to pass a resolution of shareholders to amend the memorandum of association and articles ofassociation;●amend the memorandum of association and articles of association in circumstances where the memorandum of association and articles ofassociation cannot be amended by the shareholders; or●amend the provisions of memorandum of association or the articles of association pertaining to “rights attaching to shares,” “rights not varied bythe issue of the shares pari passu,” “variation of rights” and “amendment of memorandum and articles”.50Written Consent of DirectorsUnder Delaware corporate law, directors may act by written consent only on the basis of a unanimous vote. Under British Virgin Islands law, directors’consents need only a majority of directors signing to take effect.Written Consent of ShareholdersUnder Delaware corporate law, unless otherwise provided in the certificate of incorporation, any action to be taken at any annual or special meeting ofstockholders of a corporation, may be taken by written consent of the holders of outstanding stock having not less than the minimum number of votes that wouldbe necessary to take such action at a meeting. As permitted by British Virgin Islands law, shareholders’ consents need only a majority of shareholders signing totake effect. Our memorandum of association and articles of association provide that shareholders may approve corporate matters by way of a resolution consentedto at a meeting of shareholders or in writing by a majority of shareholders entitled to vote thereon.Shareholder ProposalsUnder Delaware corporate law, a shareholder has the right to put any proposal before the annual meeting of shareholders, provided it complies with thenotice provisions in the governing documents. A special meeting may be called by the board of directors or any other person authorized to do so in the governingdocuments, but shareholders may be precluded from calling special meetings. British Virgin Islands law and our memorandum of association and articles ofassociation provide that our directors shall call a meeting of the shareholders if requested in writing to do so by shareholders entitled to exercise at least 30% of thevoting rights in respect of the matter for which the meeting is requested.Sale of AssetsUnder Delaware corporate law, a vote of the stockholders is required to approve the sale of assets only when all or substantially all assets are being sold. Inthe British Virgin Islands, shareholder approval is required when more than 50% of the company’s total assets by value are being disposed of or sold.Dissolution; Winding UpUnder Delaware corporate law, unless the board of directors approves the proposal to dissolve, dissolution must be approved by shareholders holding100% of the total voting power of the corporation. Only if the dissolution is initiated by the board of directors may it be approved by a simple majority of thecorporation’s outstanding shares. Delaware corporate law allows a Delaware corporation to include in its certificate of incorporation a supermajority votingrequirement in connection with dissolutions initiated by the board. As permitted by British Virgin Islands law and our memorandum of association and articles ofassociation, we may be voluntarily liquidated under Part XII of the BVI Act by resolution of directors and resolution of shareholders if we have no liabilities and weare able to pay our debts as they fall due.Redemption of SharesUnder Delaware corporate law, any stock may be made subject to redemption by the corporation at its option or at the option of the holders of such stockprovided there remains outstanding shares with full voting power. Such stock may be made redeemable for cash, property or rights, as specified in the certificate ofincorporation or in the resolution of the board of directors providing for the issue of such stock. As permitted by British Virgin Islands law, and our memorandum ofassociation and articles of association, shares may be repurchased, redeemed or otherwise acquired by us. Our directors must determine that immediately followingthe redemption or repurchase we will be able to satisfy our debts as they fall due and the value of our assets exceeds our liabilities.51Variation of Rights of SharesUnder Delaware corporate law, a corporation may vary the rights of a class of shares with the approval of a majority of the outstanding shares of suchclass, unless the certificate of incorporation provides otherwise. As permitted by British Virgin Islands law, and our memorandum of association and articles ofassociation, if our share capital is divided into more than one class of shares, we may vary the rights attached to any class only with the consent in writing ofholders of not less than threefourths of the issued shares of that class and holders of not less than threefourths of the issued shares of any other class of shareswhich may be affected by the variation.Removal of DirectorsUnder Delaware corporate law, a director of a corporation with a classified board may be removed only for cause with the approval of a majority of theoutstanding shares entitled to vote, unless the certificate provides otherwise. As permitted by British Virgin Islands law and our memorandum of association andarticles of association, directors may be removed by resolution of directors or resolution of shareholders.MergersUnder the BVI Act, two or more companies may merge or consolidate in accordance with the statutory provisions. A merger means the merging of two ormore constituent companies into one of the constituent companies, and a consolidation means the uniting of two or more constituent companies into a newcompany. In order to merger or consolidate, the directors of each constituent company must approve a written plan of merger or consolidation which must beauthorized by a resolution of shareholders.Shareholders not otherwise entitled to vote on the merger or consolidation may still acquire the right to vote if the plan of merger or consolidation containsany provision which, if proposed as an amendment to the memorandum association or articles of association, would entitle them to vote as a class or series on theproposed amendment. In any event, all shareholders must be given a copy of the plan of merger or consolidation irrespective of whether they are entitled to vote atthe meeting or consent to the written resolution to approve the plan of merger or consolidation.Inspection of Books and RecordsUnder Delaware corporate law, any shareholder of a corporation may for any proper purpose inspect or make copies of the corporation’s stock ledger, list ofshareholders and other books and records. Holders of our shares have no general right under British Virgin Islands law to inspect or obtain copies of our list ofshareholders or our corporate records. However, we will provide holders of our shares with annual audited financial statements. See “Where You Can FindAdditional Information.”Conflict of InterestThe BVI Act provides that a director shall, after becoming aware that he is interested in a transaction entered into or to be entered into by the company,disclose that interest to the board of directors of the company. The failure of a director to disclose that interest does not affect the validity of a transaction enteredinto by the director or the company, so long as the director’s interest was disclosed to the board prior to the company’s entry into the transaction or was notrequired to be disclosed (for example where the transaction is between the company and the director himself or is otherwise in the ordinary course of business andon usual terms and conditions). As permitted by British Virgin Islands law and our memorandum of association and articles of association, a director interested in aparticular transaction may vote on it, attend meetings at which it is considered, and sign documents on our behalf which relate to the transaction.52Transactions with Interested ShareholdersDelaware corporate law contains a business combination statute applicable to Delaware public corporations whereby, unless the corporation hasspecifically elected not to be governed by such statute by amendment to its certificate of incorporation, it is prohibited from engaging in certain businesscombinations with an “interested shareholder” for three years following the date that such person becomes an interested shareholder. An interested shareholdergenerally is a person or group who or that owns or owned 15% or more of the target’s outstanding voting stock within the past three years. This has the effect oflimiting the ability of a potential acquirer to make a twotiered bid for the target in which all shareholders would not be treated equally. The statute does not apply if,among other things, prior to the date on which such shareholder becomes an interested shareholder, the board of directors approves either the businesscombination or the transaction that resulted in the person becoming an interested shareholder. This encourages any potential acquirer of a Delaware publiccorporation to negotiate the terms of any acquisition transaction with the target’s board of directors.British Virgin Islands law has no comparable provision. As a result, we cannot avail ourselves of the types of protections afforded by the Delawarebusiness combination statute. However, although British Virgin Islands law does not regulate transactions between a company and its significant shareholders, itdoes provide that such transactions must be entered into bona fide in the best interests of the company and not with the effect of constituting a fraud on theminority shareholders.Independent DirectorsThere are no provisions under Delaware corporate law or under the BVI Act that require a majority of our directors to be independent.Cumulative VotingUnder Delaware corporate law, cumulative voting for elections of directors is not permitted unless the company’s certificate of incorporation specificallyprovides for it. Cumulative voting potentially facilitates the representation of minority shareholders on a board of directors since it permits the minority shareholderto cast all the votes to which the shareholder is entitled on a single director, which increases the shareholder’s voting power with respect to electing such director.There are no prohibitions to cumulative voting under the laws of the British Virgin Islands, but our memorandum of association and articles of association do notprovide for cumulative votingAntitakeover Provisions in Our Memorandum of association and articles of associationSome provisions of our memorandum of association and articles of association may discourage, delay or prevent a change in control of our company ormanagement that shareholders may consider favorable, including provisions that authorize our board of directors to issue preference shares in one or more seriesand to designate the price, rights, preferences, privileges and restrictions of such preference shares.C. MATERIAL CONTRACTS.On January 25, 2018, the Company executed an Asset Exchange Agreement (“AEA”) with C Media Limited, a corporation organized under the laws of theCayman Islands (“C Media”), whereby the Company agreed to purchase all the capital stock and equity interests of LK Technology Ltd, together with its whollyowned subsidiaries MMB Limited and Mobile Media (China) Limited and all respective subsidiaries from C Media in exchange for (i) 185,412,599 ordinary shares ofthe Company, par value $0.01 per share (“Ordinary Shares”), (ii) 1,000,000 preferred shares of Kingtone (“Preferred Shares”) and (iii) all issued and outstandingcapital stock or equity interests of the Company’s subsidiary, Topsky InfoTech Holdings Pte Ltd., and its whollyowned subsidiary Xi’an Softech Co., Ltd.,including all entities effectively controlled by Xi’an Softech Co., Ltd. through contractual arrangements and variable business entities.To consummate the contemplated transactions described above, the Company obtained shareholder consent at a special meeting held on May 20, 2018, (i)to authorize 1,000,000 Preferred Shares, (ii) to authorize additional Ordinary Shares so that total authorized Ordinary Shares is equal to 250,000,000 shares, (iii) to listsuch Ordinary Shares on NASDAQ, and (iv) to approve the transactions contemplated in the Asset Exchange Agreement. Additionally, NASDAQ needed toapprove the contemplated transactions prior to consummation thereof. C Media had the right to terminate the AEA if the closing had not occurred (other thanthrough the failure of C Media to comply fully with its obligations under the AEA) on or before July 31, 2018. The transactions contemplated by the AEA wereconsummated on August 17, 2018.53On January 25, 2018, five shareholders of the Company including its largest shareholder and its Chief Executive Officer executed a Securities PurchaseAgreement, whereby such shareholders agreed to sell a total of 617,988 Ordinary Shares and 282,694 American Depository Shares of the Company to Redstone YYLManagement Limited, a company incorporated in the British Virgin Islands, in exchange for an aggregate purchase price of $1,897,860.09.On August 25, 2018, LK Technology entered into a Stock Purchase Agreement (the “Agreement”) with the shareholders (“Shareholders”) of SuperengineHoldings Limited, a limited liability company organized under the laws of the British Virgin Islands (the “Superengine”), pursuant to which LK Technology acquiredall of the issued and outstanding capital stock of Superengine for an aggregate purchase price of US$60 million (the “Purchase Price”), which are paid by theissuance of our Ordinary Shares in an amount equal to the quotient of (x) the Purchase Price divided by (y) the average of the closing prices of the Ordinary Shareson the NASDAQ Capital Market over the 12 months period preceding July 31, 2018. We are a party to the Agreement in connection with the issuance of theOrdinary Shares and certain other limited purposes.D. EXCHANGE CONTROLS.This section sets forth a summary of the most significant regulations or requirements that affect our business activities in China or our shareholders’ rightto receive dividends and other distributions from us.Regulations on Internet Content ProvidersThe Administrative Measures on Internet Information Services, or the Internet Content Measures, which was promulgated by the State Council onSeptember 25, 2000 and amended on January 8, 2011, set out guidelines on the provision of internet information services. The Internet Content Measures specifiesthat internet information services regarding news, publications, education, medical and health care, pharmacy and medical appliances, among other things, arerequired to be examined, approved and regulated by the relevant authorities. Internet information providers are prohibited from providing services beyond thoseincluded in the scope of their licenses or filings. Furthermore, the Internet Content Measures specifies a list of prohibited content. Internet information providers areprohibited from producing, copying, publishing or distributing information that is humiliating or defamatory to others or that infringes the legal rights of others.Internet information providers that violate such prohibition may face criminal charges or administrative sanctions. Internet information providers must monitor andcontrol the information posted on their websites. If any prohibited content is found, they must remove the content immediately, keep a record of such content andreport to the relevant authorities.The Internet Content Measures classifies internet information services into commercial internet information services and noncommercial internetinformation services. Commercial internet information services refer to services that provide information or services to internet users with charge. A provider ofcommercial internet information services must obtain an ICP License.Regulations on Internet Audiovideo Program ServicesOn December 20, 2007, the MII and the State Administration of Press, Publication, Radio, Film and Television, or the SAPPRFT, jointly issued theAdministrative Provisions for the Internet AudioVideo Program Service, or the Audiovideo Program Provisions, which came into effect on January 31, 2008 andwas amended on August 28, 2015. The Audiovideo Program Provisions defines “internet audiovideo program services” as producing, editing and integrating ofaudiovideo programs, supplying audiovideo programs to the public via the internet, and providing audiovideo programs uploading and transmission services to athird party. Entities providing internet audiovideo programs services must obtain an internet audiovideo program transmission license. Applicants for such licensesshall be stateowned or statecontrolled entities unless an internet audiovideo program transmission license has been obtained prior to the effectiveness of theAudiovideo Program Provisions in accordance with the thenineffect laws and regulations. In addition, foreigninvested enterprises are not allowed to engage inthe abovementioned services. According to the Audiovideo Program Provisions and other relevant laws and regulations, audiovideo programs provided by theentities supplying Internet audiovideo program services shall not contain any illegal content or other content prohibited by the laws and regulations, such as anycontent against the basic principles in the PRC Constitution, any content that damages the sovereignty of the country or national security, and any content thatdisturbs social order or undermine social stability. An audiovideo program that has already been broadcast shall be retained in full for at least 60 days. Movies,television programs and other media content used as Internet audiovideo programs shall comply with relevant administrative regulations on programs broadcaststhrough radio, movie and television channels. Entities providing services related to Internet audiovideo programs shall immediately delete the audiovideoprograms violating laws and regulations, keep relevant records, report relevant authorities and implement other regulatory requirements.54The Categories of the Internet AudioVideo Program Services, or the Audiovideo Program Categories, promulgated by SAPPRFT on March 10, 2017,classifies internet audio/video programs into four categories: (I) Category I internet audio/video program service, which is carried out with a form of radio station ortelevision station; (II) Category II internet audio/video program service, including (a) rebroadcasting service of current political news audio/video programs; (b)hosting, interviewing, reporting and commenting service of arts, entertainment, technology, finance and economics, sports, education and other specializedaudio/video programs; (c) producing (interviewing not included) and broadcasting service of arts, entertainment, technology, finance and economics, sports,education and other specialized audio/video programs; (d) producing and broadcasting service of internet films/dramas; (e) aggregating and broadcasting service offilms, television dramas and cartoons; (f) aggregating and broadcasting service of arts, entertainment, technology, finance and economics, sports, education andother specialized audio/video programs; and (g) live audio/video broadcasting service of cultural activities of common social organizations, sport events or otherorganization activities; and (III) Category III internet audio/video program service, including (a) aggregating service of online audio/video contents, and (b) rebroadcasting service of the audio/video programs uploaded by internet users; and (IV) Category III internet audio/video program service, including (a) rebroadcasting of the radio/television program channels; and (b) rebroadcasting of internet audio/video program channels.On May 27, 2016, the SAPPRFT issued the Notice on Relevant Issues concerning Implementing the Approval Works of Upgrading Mobile Internet AudioVideo Program Service, or the Mobile AudioVideo Program Notice. The Mobile AudioVideo Program Notice provides that the mobile Internet audiovideo programservices shall be deemed Internet audiovideo program service. Entities which have obtained the approvals to provide the Internet audiovideo program servicesmay use mobile WAP websites or mobile applications to provide audiovideo program services. Entities with regulatory approvals may operate mobile applicationsto provide the audiovideo program services The types of the programs shall be within the permitted scope as provided in the licenses and such mobile applicationsshall be filed with the SAPPRFT.Regulations on Production and Operation of Radio/Television ProgramsOn July 19, 2004, the SAPPRFT promulgated the Administrative Measures on the Production and Operation of Radio and Television Programs, or the Radioand Television Program Production Measures, which came into effect on August 20, 2004 and was amended on August 28, 2015. The Radio and Television ProgramProduction Measures provides that any business that produces or operates radio or television programs must first obtain a Radio and Television ProgramProduction and Operation Permit. Entities holding such permits shall conduct their business within the permitted scope as provided in their permits. In addition,foreigninvested enterprises are not allowed to engage in the abovementioned services.Regulations on Online Advertising ServicesOn April 24, 2015, the Standing Committee of the National People’s Congress enacted the Advertising Law of the People’s Republic of China, or the NewAdvertising Law, effective on September 1, 2015. The New Advertising Law increases the potential legal liability of advertising services providers and strengthensregulations of false advertising. On July 4, 2016, the State Administration for Industry and Commerce, or the SAIC, issued the Interim Measures of theAdministration of Online Advertising, or the SAIC Interim Measures, effective on September 1, 2016. The New Advertising Law and the SAIC Interim Measuresrequire that online advertisements may not affect users’ normal internet use and internet popup ads must display a “close” sign prominently and ensure onekeyclosing of the popup windows. The SAIC Interim Measures provides that all online advertisements must be marked “Advertisement” so that viewers can easilyidentify them as such. Moreover, the SAIC Interim Measures treats paid search results as advertisements that are subject to PRC advertisement laws, and requiresthat paid search results be conspicuously identified on search result pages as advertisements. The New Advertising Law and SAIC Interim Measures require us toconduct more stringent examination and monitoring of our advertisers and the content of their advertisements.55Regulations on Online GamesIn September 2009, the GAPP (currently known as the SAPPRFT), together with the National Copyright Administration, and the National Office ofCombating Pornography and Illegal Publications jointly issued the Notice on Further Strengthening on the Administration of Preexamination and Approval ofOnline Game and the Examination and Approval of Imported Online Game, or the Circular 13. The Circular 13 states that foreign investors are not permitted to investin online game operating businesses in the PRC via wholly foreignowned entities, Sinoforeign equity joint ventures or cooperative joint ventures or to exercisecontrol over or participate in the operation of domestic online game businesses through indirect means, such as other joint venture companies or contractual ortechnical arrangements. If the our contractual arrangements were deemed under the Circular 13 to be an “indirect means” for foreign investors to exercise controlover or participate in the operation of a domestic online game business, our contractual arrangements might be challenged by the SAPPRFT. We are not aware ofany online game companies which use the same or similar contractual arrangements having been challenged by the SAPPRFT as using those contractualarrangements as an “indirect means” for foreign investors to exercise control over or participate in the operation of a domestic online game business or having beenpenalized or ordered to terminate operations since the Circular 13 became effective. However it is unclear whether and how the Circular 13 might be interpreted orimplemented in the future. See “Risk Factors—If the PRC government finds that the agreements that establish the structure for operating certain of our operations inChina do not comply with PRC regulations relating to the relevant industries, or if these regulations or the interpretation of existing regulations change in the future,we could be subject to severe penalties or be forced to relinquish our interests in those operations.”The Interim Measures for the Administration of Online Games, or the Online Game Measures, issued by the MOC, which took effect on August 1, 2010 andamended on December 15, 2017, regulates a broad range of activities related to the online games business, including the development, production and operation ofonline games, the issuance of virtual currencies used for online games, and the provision of virtual currency trading services. The Online Game Measures providesthat any entity that is engaged in online game operations must obtain an Network Cultural Business Permit, and require the content of an imported online game to beexamined and approved by the MOC prior to the game’s launch and require a domestic online game to be filed with the MOC within 30 days after its launch. TheNotice of the Ministry of Culture on the Implementation of the Interim Measures for the Administration of Online Games, which was issued by the MOC on July 29,2010 to implement the Online Game Measures, (i) requires online game operators to protect the interests of online game users and specifies that certain terms thatmust be included in service agreements between online game operators and the users of their online games, (ii) requires content review of imported online gamesand filing procedures for domestic online games, (iii) emphasizes the protection of minors playing online games, and (iv) requests online game operators to promoterealname registration by their game users.Regulations on Information Security, Censorship and PrivacyThe Standing Committee of the National People’s Congress, China’s national legislative body, enacted the Decisions on the Maintenance of InternetSecurity on December 28, 2000 that may subject persons to criminal liabilities in China for any attempt to use the internet to: (i) gain improper entry to a computer orsystem of strategic importance; (ii) disseminate politically disruptive information; (iii) leak state secrets; (iv) spread false commercial information or (v) infringe uponintellectual property rights. In 1997, the Ministry of Public Security issued the Administration Measures on the Security Protection of Computer InformationNetwork with International Connections which prohibits using the internet to leak state secrets or to spread socially destabilizing materials. If an ICP license holderviolates these measures, the PRC government may revoke its ICP license and shut down its websites. Pursuant to the Ninth Amendment to the Criminal Law issuedby the Standing Committee of the National People’s Congress on August 29, 2015, effective on November 1, 2015, any ICP provider that fails to fulfill the obligationsrelated to internet information security as required by applicable laws and refuses to take corrective measures, will be subject to criminal liability for (i) any largescale dissemination of illegal information; (ii) any severe effect due to the leakage of users’ personal information; (iii) any serious loss of evidence of criminalactivities; or (iv) other severe situations, and any individual or entity that (i) sells or provides personal information to others unlawfully or (ii) steals or illegallyobtains any personal information will be subject to criminal liability in severe situations.56The Cybersecurity Law of the PRC, or the Cybersecurity Law, which was promulgated on November 7, 2016 by the Standing Committee of the NationalPeople’s Congress and came into effect on June 1, 2017, provides that network operators shall meet their cyber security obligations and shall take technicalmeasures and other necessary measures to protect the safety and stability of their networks. Under the Cybersecurity Law, network operators are subject to varioussecurity protectionrelated obligations, including: (i) network operators shall comply with certain obligations regarding maintenance of the security of internetsystems; (ii) network operators shall verify users’ identities before signing agreements or providing certain services such as information publishing or realtimecommunication services; (iii) when collecting or using personal information, network operators shall clearly indicate the purposes, methods and scope of theinformation collection, the use of information collection, and obtain the consent of those from whom the information is collected; (iv) network operators shall strictlypreserve the privacy of user information they collect, and establish and maintain systems to protect user privacy; (v) network operators shall strengthenmanagement of information published by users, and when they discover information prohibited by laws and regulations from publication or dissemination, theyshall immediately stop dissemination of that information, including taking measures such as deleting the information, preventing the information from spreading,saving relevant records, and reporting to the relevant governmental agencies.Regulations on Intellectual Property RightsRegulations on CopyrightThe Copyright Law of the PRC, or the Copyright Law, which took effect on June 1, 1991 and was amended in 2001 and in 2010, provides that Chinesecitizens, legal persons, or other organizations shall, whether published or not, own copyright in their copyrightable works, which include, among others, works ofliterature, art, natural science, social science, engineering technology and computer software. Copyright owners enjoy certain legal rights, including right ofpublication, right of authorship and right of reproduction. The Copyright Law as revised in 2010 extends copyright protection to Internet activities, productsdisseminated over the Internet and software products. In addition, Copyright Law provides for a voluntary registration system administered by the China CopyrightProtection Center, or the CPCC. According to the Copyright Law, an infringer of the copyrights shall be subject to various civil liabilities, which include ceasinginfringement activities, apologizing to the copyright owners and compensating the loss of copyright owner. Infringers of copyright may also subject to fines and/oradministrative or criminal liabilities in severe situations.The Computer Software Copyright Registration Measures, or the Software Copyright Measures, promulgated by the State Council on December 20, 2001and amended on January 30, 2013, regulates registrations of software copyright, exclusive licensing contracts for software copyright and assignment agreements.The National Copyright Administration, or the NCA administers software copyright registration and the CPCC, is designated as the software registration authority.The CPCC shall grant registration certificates to the Computer Software Copyrights applicants which meet the requirements of both the Software CopyrightMeasures and the Computer Software Protection Regulations (Revised in 2013).The Provisions of the Supreme People’s Court on Certain Issues Related to the Application of Law in the Trial of Civil Cases Involving Disputes onInfringement of the Information Network Dissemination Rights specifies that disseminating works, performances or audiovideo products by the internet users orthe internet service providers via the internet without the permission of the copyright owners shall be deemed to have infringed the right of dissemination of thecopyright owner.57The Measures for Administrative Protection of Copyright Related to Internet, which was jointly promulgated by the NCA and the MIIT on April 29, 2005and became effective on May 30, 2005, provides that upon receipt of an infringement notice from a legitimate copyright holder, an ICP operator must take remedialactions immediately by removing or disabling access to the infringing content. If an ICP operator knowingly transmits infringing content or fails to take remedialactions after receipt of a notice of infringement that harms public interest, the ICP operator could be subject to administrative penalties, including an order to ceaseinfringing activities, confiscation by the authorities of all income derived from the infringement activities, or payment of fines.On May 18, 2006, the State Council promulgated the Regulations on the Protection of the Right to Network Dissemination of Information (as amended in2013). Under these regulations, an owner of the network dissemination rights with respect to written works or audio or video recordings who believes thatinformation storage, search or link services provided by an Internet service provider infringe his or her rights may require that the Internet service provider delete, ordisconnect the links to, such works or recordings.Patent LawsAccording to the Patent Law of the PRC (Revised in 2008), the State Intellectual Property Office is responsible for administering patent law in the PRC. Thepatent administration departments of provincial, autonomous region or municipal governments are responsible for administering patent law within their respectivejurisdictions. The Chinese patent system adopts a firsttofile principle, which means that when more than one person file different patent applications for the sameinvention, only the person who files the application first is entitled to obtain a patent of the invention. To be patentable, an invention or a utility model must meetthree criteria: novelty, inventiveness and practicability. A patent is valid for twenty years in the case of an invention and ten years in the case of utility models anddesigns.Trademark LawsTrademarks are protected by the Trademark Law of the PRC (Revised in 2013) which was adopted in 1982 and subsequently amended in 1993, 2001 and 2013respectively as well as by the Implementation Regulations of the PRC Trademark Law adopted by the State Council in 2002 and as most recently amended on April29, 2014. The Trademark Office under the SAIC handles trademark registrations. The Trademark Office grants a tenyear term to registered trademarks and the termmay be renewed for another tenyear period upon request by the trademark owner. A trademark registrant may license its registered trademarks to another party byentering into trademark license agreements, which must be filed with the Trademark Office for its record. As with patents, the Trademark Law has adopted a firsttofile principle with respect to trademark registration. If a trademark applied for is identical or similar to another trademark which has already been registered or subjectto a preliminary examination and approval for use on the same or similar kinds of products or services, such trademark application may be rejected. Any personapplying for the registration of a trademark may not injure existing trademark rights first obtained by others, nor may any person register in advance a trademark thathas already been used by another party and has already gained a “sufficient degree of reputation” through such party’s use.Regulations on Domain NamesThe MIIT promulgated the Measures on Administration of Internet Domain Names, or the Domain Name Measures, on August 24, 2017, which took effecton November 1, 2017 and replaced the Administrative Measures on China Internet Domain Name promulgated by MII on November 5, 2004. According to theDomain Name Measures, the MIIT is in charge of the administration of PRC internet domain names. The domain name registration follows a firsttofile principle.Applicants for registration of domain names shall provide the true, accurate and complete information of their identities to domain name registration serviceinstitutions. The applicants will become the holder of such domain names upon the completion of the registration procedure.Relevant Regulations of the Hightech EnterpriseThe Ministry of Information Industry, the Ministry of Science and Technology and the State Tax Bureau collectively promulgated and issued the“Certifying Standard and Managing Measures for Hightech Enterprises” and “the Hightech Areas of Main National Support” on April 14, 2008 to certify the Hightech enterprise and encourage and support the development of the Chinese Hightech enterprises. Under the Hightech Enterprises Measures, the enterprise canenjoy the favorable tax policy when it is certified as a Hightech enterprise by the Ministry of Information Industry, the Ministry of Science and Technology and theState Tax Bureau or with its provincial branch according to the stipulated standard. The software and computer and network technology are recognized as the mainnational supported Hightech field. Kingtone Information is a Hightech enterprise and enjoys a favorable income tax rate of 15%.58Laws and Regulations of Intellectual Property RightsChina has adopted legislation governing intellectual property rights, including patents, copyrights and trademarks. China is a signatory to the maininternational conventions on intellectual property rights and became a member of the Agreement on Trade Related Aspects of Intellectual Property Rights upon itsaccession to the WTO in December 2001.PatentsThe “Patent Law of the People’s Republic of China” promulgated by the Standing Committee of the National People's Congress, adopted in 1985 andrevised in 1992, 2001 and 2008, protects registered patents. The State Intellectual Property Office of PRC handles granting patent rights, providing for a twentyyearpatent term for inventions and a tenyear patent term for utility models and designs. As we disclosed in Item 4, of this transition report on Form 20F, throughKingtone Information, we have been granted one invention patent “wireless video transmission system based on BREW platform” by the State Intellectual PropertyOffice (“SIPO”) of PRC on September 23, 2009 and therefore such invention is entitled to all the protections provided under the Patent Law for twenty years.Computer Software Copyright and AdministrationOn December 20, 2001, the State Council of PRC issued the “Regulation for Computer Software Protection of the People’s Republic of China” (the“Regulation for Computer Software Protection”) which became effective on January 1, 2002 to protect the interests of copyright owners, to promote the research andapplication and to encourage the development of the Chinese software industry. Under the Regulation for Computer Software Protection, natural persons, legalpersons or any other organizations shall have a copyright on the software developed by such persons no matter whether such software has been published. Theprotection period of software copyrights owned by the legal person or other organization is fifty years and expires on December 31 of the fiftieth year from the initialpublication date of such computer software. Currently, Kingtone Information has twelve registration certificates for software copyrights.TrademarksThe “Trademark Law of the People’s Republic of China” promulgated by the State Council of PRC, adopted in 1982 and revised in 1993 and 2001, protectsregistered trademarks. The Trademark Office under the Chinese State Administration for Industry and Commerce handles trademark registrations and grants a termof ten years to registered trademarks which are renewable for another ten years after the application to the Trademark Office by the owners of the trademarks.Trademark license agreements must be filed with the Trademark Office for record. China has a “firsttoregister” system that requires no evidence of prior use orownership. Kingtone Information has its registered trademarks as described in Item 4 of this transition report on Form 20F. Accordingly, such trademarks areentitled to the protection under the Trademark Law.Foreign Currency ExchangeOn August 29, 2008, the SAFE issued the Notice of the General Affairs Department of the State Administration of Foreign Exchange on the RelevantOperating Issues concerning the Improvement of the Administration of Payment and Settlement of Foreign Currency Capital of Foreignfunded Enterprises, orCircular 142. Pursuant to Circular 142, RMB converted from the foreign currencydenominated capital of a foreigninvested company may only be used for purposeswithin the business scope approved by the applicable governmental authority and may not be used for equity investments within the PRC unless specificallyprovided for otherwise. The use of such Renminbi capital may not be changed without SAFE’s approval and may not in any case be used to repay Renminbi loans ifthe proceeds of such loans have not been used.59See “Risk Factors — Risks Related to Doing Business in China — PRC regulation of loans and direct investment by offshore holding companies to PRCentities may delay or prevent us from using the proceeds of our initial public offering to make loans or additional capital contributions to our PRC operatingsubsidiaries, which could materially and adversely affect our liquidity and our ability to fund and expand our business”.Dividend DistributionWe are a British Virgin Islands holding company and substantially all of our operations are conducted through LK Technology. We rely on dividends andother distributions from our LK Technology and its subsidiaries to provide us with our cash flow and allow us to pay dividends on the shares underlying our ADSsand meet our other obligations. The principal regulations governing distribution of dividends paid by wholly foreignowned enterprises include:1.Wholly ForeignOwned Enterprise Law (1986), as amended; and2.Implementation Rules on Wholly ForeignOwned Enterprise Law (1990), as amended.Under these regulations, wholly foreignowned enterprises in China may pay dividends only out of their accumulated profits, if any, determined inaccordance with PRC accounting standards and regulations. In addition, wholly foreignowned enterprises in China are required to set aside at least 10% of theiraftertax profit based on PRC accounting standards each year to its general reserves until the accumulative amount of such reserves reach 50% of its registeredcapital. These reserves are not distributable as cash dividends. The board of directors of a FIE has the discretion to allocate a portion of its aftertax profits to staffwelfare and bonus funds, which may not be distributed to equity owners except in the event of liquidation.Regulation of Foreign Exchange in Certain Onshore and Offshore TransactionsIn October 2005, the SAFE issued the Notice on Issues Relating to the Administration of Foreign Exchange in Fundraising and Return InvestmentActivities of Domestic Residents Conducted via Offshore Special Purpose Companies, or SAFE Notice 75, which became effective as of November 1, 2005, and wasfurther supplemented by two implementation notices issued by the SAFE on November 24, 2005 and May 29, 2007, respectively. Under Circular 75, prior registrationwith the local SAFE branch is required for PRC residents to establish or to control an offshore company for the purposes of financing that offshore company withassets or equity interests in an onshore enterprise located in the PRC. An amendment to the registration or filing with the local SAFE branch by such PRC resident isalso required for the injection of equity interests or assets of an onshore enterprise in the offshore company or overseas funds raised by such offshore company, orany other material change with respect to the offshore company in connection with any increase or decrease of capital, transfer of shares, merger, division, equityinvestment, debt investment, or creation of any security interest over any assets located in the PRC.Under SAFE Notice 75, PRC residents are further required to repatriate into the PRC all of their dividends, profits or capital gains obtained from theirshareholdings in the offshore entity within 180 days of their receipt of such dividends, profits or capital gains. The registration and filing procedures under SAFENotice 75 are prerequisites for other approval and registration procedures necessary for capital inflow from the offshore entity, such as inbound investments orshareholders loans, or capital outflow to the offshore entity, such as the payment of profits or dividends, liquidating distributions, equity sale proceeds, or thereturn of funds upon a capital reduction. Therefore, failure to comply with such registration may subject us to certain restrictions on, including but not limited to, theincrease of the registered capital of our PRC subsidiary, making loans to our PRC subsidiary, and making distributions to us from our onshore companies.Regulations of Overseas Investments and ListingsOn August 8, 2006, six PRC regulatory agencies, including the MOFCOM, the State Assets Supervision and Administration Commission, the StateAdministration for Taxation, the State Administration for Industry and Commerce, the CSRC and the SAFE, jointly adopted the New M&A Rule, which becameeffective on September 8, 2006. This regulation, among other things, includes provisions that purport to require that an offshore SPV formed for purposes ofoverseas listing of equity interests in PRC companies and controlled directly or indirectly by PRC companies or individuals obtain the approval of the CSRC prior tothe listing and trading of such SPV’s securities on an overseas stock exchange.60On September 21, 2006, the CSRC published on its official website procedures regarding its approval of overseas listings by SPVs. The CSRC approvalprocedures require the filing of a number of documents with the CSRC and it would take several months to complete the approval process.The application of the New M&A Rule with respect to overseas listings of SPVs remains unclear with no consensus currently existing among the leadingPRC law firms regarding the scope of the applicability of the CSRC approval requirement.We believe that, based on our understanding of the current PRC laws, regulations and rules and the procedures announced on September 21, 2006, there isno requirement in this regulation that would require an application to be submitted to the MOFCOM or the CSRC for the approval of the listing and trading of ourADSs on the NASDAQ Capital Market.See “Risk Factors — Risks Related to Doing Business in China — If we were required to obtain the prior approval of the China Securities RegulatoryCommission, or CSRC, of the listing and trading of our ADSs on the NASDAQ Capital Market, we may face regulatory actions or other sanctions from the CSRC orother PRC regulatory agencies.”E. TAXATIONThe following discussion sets forth the material British Virgin Islands, PRC and U.S. federal income tax consequences of an investment in our ADSs andthe ordinary shares represented by our ADSs, sometimes referred to collectively as the “securities”. It is based upon laws and relevant interpretations thereof ineffect as of the date of this report, all of which are subject to change. This discussion does not deal with all possible tax consequences relating to an investment inthe securities, such as the tax consequences under state, local and other tax laws. As used in this discussion, “we,” “our” and “us” refers only to LuokungTechnology Ltd.British Virgin Islands TaxationUnder the law of the British Virgin Islands as currently in effect, a holder of the securities who is not a resident of the British Virgin Islands is not liable forBritish Virgin Islands tax on dividends paid with respect to the securities and all holders of the securities are not liable to the British Virgin Islands for tax on gainsrealized during that year on the sale or disposal of such ordinary shares. The British Virgin Islands does not impose a withholding tax on dividends paid by acompany incorporated or reregistered under the BVI Act.There are no capital gains, gift or inheritance taxes levied by the British Virgin Islands on companies incorporated under the BVI Act. In addition, shares ofcompanies incorporated under the BVI Act are not subject to transfer taxes, stamp duties or similar charges.There is no income tax treaty or convention currently in effect between the United States and the British Virgin Islands or between China and the BritishVirgin Islands.61People’s Republic of China TaxationIn 2007, the PRC National People’s Congress enacted the new Enterprise Income Tax Law (the “EIT Law”), which became effective on January 1, 2008. Thenew EIT Law imposes a single uniform income tax rate of 25% on all Chinese enterprises, including foreigninvested enterprises, and levies a withholding tax rate of10% on dividends payable by Chinese subsidiaries to their foreign shareholders unless any such foreign shareholders’ jurisdiction of incorporation has a tax treatywith China that provides for a different withholding agreement. Under the new EIT Law, enterprises established outside China but deemed to have a “de factomanagement body” within the country may be considered “resident enterprises” for Chinese tax purposes and, therefore, may be subject to an enterprise income taxrate of 25% on their worldwide income. Pursuant to the implementation rules of the new EIT Law, a “de facto management body” is defined as a body that hasmaterial and overall management control over the business, personnel, accounts and properties of the enterprise. Although substantially all members of ourmanagement are located in China, it is unclear whether Chinese tax authorities would require (or permit) us to be treated as PRC resident enterprises. If we aredeemed a Chinese tax resident enterprise, we may be subject to an enterprise income tax rate of 25% on our worldwide income, excluding dividends received directlyfrom another Chinese tax resident enterprise, as well as PRC enterprise income tax reporting obligations. If we are not deemed to be a Chinese tax resident enterprise,we may be subject to certain PRC withholding taxes. See “Risk Factors — Risks Related to Doing Business in China — Our holding company structure may limit thepayment of dividends.” As a result of such changes, our historical tax rates may not be indicative of our tax rates for future periods and the value of our ADSs orordinary shares may be adversely affected. If we are deemed a PRC resident enterprise and investors’ gain from the sales of the securities and dividends payable byus are deemed sourced from China, such gains and dividends payable by us may be subject to PRC tax. See “Risk Factors — Risks Related to Doing Business inChina — If we were deemed a “resident enterprise” by PRC tax authorities, we could be subject to tax on our global income at the rate of 25% under the New EITLaw and our nonPRC shareholders could be subject to certain PRC taxes.United States Federal Income TaxationGeneralThe following is a discussion of the material U.S. federal income tax consequences to an investor of purchasing, owning and disposing of our securities.This discussion does not address any aspects of U.S. federal gift or estate tax or the state, local or nonU.S. tax consequences of an investment in the securities.YOU SHOULD CONSULT YOUR OWN TAX ADVISORS CONCERNING THE U.S. FEDERAL, STATE, LOCAL AND NONU.S. TAX CONSEQUENCES OFPURCHASING, OWNING AND DISPOSING OF THE SECURITIES IN YOUR PARTICULAR SITUATION.This discussion applies only to those investors that purchase the securities in this offering and that hold the securities as capital assets within the meaningof section 1221 of the Internal Revenue Code of 1986, as amended (the “Code”). This section does not apply to holders that may be subject to special tax rules,including but not limited to:1.dealers in securities or currencies;2.traders in securities that elect to use a marktomarket method of accounting;3.banks, insurance companies or certain financial institutions;4.taxexempt organizations;5.governments or agencies or instrumentalities thereof;6.partnerships or other entities treated as partnerships or other passthrough entities for U.S. federal income tax purposes or persons holding thesecurities through such entities;7.regulated investment companies or real estate investment trusts;8.holders subject to the alternative minimum tax;9.holders that actually or constructively own 10% or more of the total combined voting power of all classes of our shares entitled to vote;10.holders that acquired the securities pursuant to the exercise of employee stock options, in connection with employee stock incentive plans orotherwise as compensation;11.holders that hold the securities as part of a straddle, hedging or conversion transaction; or12.holders whose functional currency is not the U.S. dollar.62This section is based on the Code, its legislative history, existing and proposed U.S. Treasury regulations, published rulings and other administrativeguidance of the U.S. Internal Revenue Service (the “IRS”) and court decisions, all as in effect on the date hereof. These laws are subject to change or differentinterpretation by the IRS or a court, possibly on a retroactive basis.We have not sought, and will not seek, a ruling from the IRS as to any U.S. federal income tax consequence described herein. The IRS may disagree withthe discussion herein, and its determination may be upheld by a court. Moreover, there can be no assurance that future legislation, regulation, administrative rulingsor court decisions will not adversely affect the accuracy of the statements in this discussion.The discussion below of the U.S. federal income tax consequences to “U.S. Holders” will apply to a beneficial owner of the securities that is for U.S. federalincome tax purposes:1.a citizen or resident of the United States;2.a corporation (or other entity treated as a corporation) that is created or organized (or treated as created or3.organized) under the laws of the United States, any state thereof or the District of Columbia;4.an estate whose income is subject to U.S. federal income tax regardless of its source; or5.a trust if (a) a U.S. court can exercise primary supervision over the trust’s administration and one or more U.S.6.persons are authorized to control all substantial decisions of the trust, or (b) if the trust has a valid election in effect under applicable U.S.Treasury regulations to be treated as a U.S. person.If a beneficial owner of the securities is not described as a U.S. Holder and is not an entity treated as a partnership or other passthrough entity for U.S.federal income tax purposes, such owner will be considered a “NonU.S. Holder.” The material U.S. federal income tax consequences applicable specifically to NonU.S. Holders are described below under the heading “Tax Consequences to NonU.S. Holders.”If a partnership (including for this purpose any entity treated as a partnership for U.S. tax purposes) is a beneficial owner of the securities, the U.S. taxtreatment of a partner in the partnership generally will depend on the status of the partner and the activities of the partnership. A holder of the securities that is apartnership or partners in such a partnership should consult their own tax advisors about the U.S. federal income tax consequences of holding and disposing of thesecurities.This discussion assumes that any distributions made (or deemed made) on the securities and any consideration received by a holder in consideration forthe sale or other disposition of the securities will be in U.S. dollars. This discussion also assumes that the representations contained in the Deposit Agreement aretrue and that the obligations in the Deposit Agreement and any related agreement will be complied with in accordance with their terms. Finally, this discussionassumes that each ADS will only represent ordinary shares in us, and will not represent any other type of security, such as a bond, cash or other property.63For U.S. federal income tax purposes, a holder of an ADS will be treated as the beneficial owner of the shares represented by such ADS and an exchange ofan ADS for ordinary shares will not be subject to U.S. federal income tax. The U.S. Treasury has expressed concerns that parties to whom ADSs are prereleased, orintermediaries in the chain of ownership between holders of ADSs and the issuer of the securities underlying the ADSs may be taking actions that are inconsistentwith the claiming of foreign tax credits by U.S. Holders of ADSs. Such actions would also be inconsistent with the claiming of the reduced rate of tax applicable todividends received by certain noncorporate U.S. Holders, including individual U.S. Holders, as described below under “Tax Consequences to U.S.Holders — Taxation of Distributions.” Accordingly, the availability of foreign tax credits or the reduced tax rate for dividends received by certain noncorporate U.S.Holders, including individual U.S. Holders, could be affected by actions taken by parties to whom the ADSs are released, or by future actions by the U.S. Treasury.Tax Consequences to U.S. HoldersTaxation of DistributionsSubject to the passive foreign investment company, or PFIC, rules discussed below, the gross amount of any cash distributions we make with respect to aU.S. Holder in respect of such U.S. Holder’s ADSs or shares will generally be treated as dividend income if the distributions are made from our current oraccumulated earnings and profits, calculated according to U.S. federal income tax principles. Cash dividends will generally be subject to U.S. federal income tax asordinary income on the day the U.S. Holder actually or constructively receives such income. With respect to noncorporate U.S. Holders for taxable years beginningbefore January 1, 2011, dividends may be taxed at the lower applicable longterm capital gains rate provided that (a) our ADSs or shares are readily tradable on anestablished securities market in the United States, or, in the event we are deemed to be a Chinese “resident enterprise” under the EIT Law (as described above under“People’s Republic of China Taxation”), we are eligible for the benefits of the income tax treaty between the United States and the PRC (the “U.S.PRC Tax Treaty”),(b) we are not a PFIC, as discussed below, for either the taxable year in which the dividend was paid or the preceding taxable year, and (c) certain holding periodrequirements are met. Under published IRS authority, ADSs are considered for purposes of clause (a) above to be readily tradable on an established securitiesmarket in the United States only if they are listed on certain exchanges, which presently include the NASDAQ Capital Market. U.S. Holders should consult their owntax advisors regarding the availability of the lower rate for any dividends paid with respect to our ADSs or shares.Dividends will not be eligible for the dividendsreceived deduction allowed to U.S. corporations in respect of dividends received from other U.S.corporations. Generally, if we distribute noncash property as a dividend (other than pro rata distributions of our shares) out of our current or accumulated earningsand profits (as determined for U.S. federal income tax purposes), a U.S. Holder generally will include in income an amount equal to the fair market value of theproperty, on the date that it is distributed.Distributions in excess of current and accumulated earnings and profits, as determined for U.S. federal income tax purposes, will be treated as a nontaxablereturn of capital to the extent of the U.S. Holder’s basis in its shares or ADSs and thereafter as capital gain. However, we do not plan on calculating our earnings andprofits in accordance with U.S. federal income tax principles. U.S. holders therefore should generally assume that any distributions paid by us will be treated asdividends for U.S. federal income tax purposes.If PRC taxes apply to dividends paid by us to a U.S. Holder (see “People’s Republic of China Taxation,” above), such taxes may be treated as foreign taxeseligible for credit against such holder’s U.S. federal income tax liability (subject to certain limitations), and a U.S. Holder may be entitled to certain benefits under theU.S.PRC Tax Treaty. The rules relating to the U.S. foreign tax credit are complex. U.S. Holders should consult their own tax advisors regarding the creditability ofany such PRC tax and their eligibility for the benefits of the U.S.PRC Tax Treaty.64Taxation of Dispositions of SharesSubject to the PFIC rules discussed below, a U.S. holder that sells or otherwise disposes of its shares will recognize capital gain or loss for U.S. federalincome tax purposes equal to the difference between the amount realized and such U.S. Holder’s tax basis in its shares. Prior to January 1, 2011, capital gains of anoncorporate U.S. holder are generally taxed at a maximum rate of 15% where the property is held for more than one year (and 20% thereafter). The ability to deductcapital losses is subject to limitations.If PRC taxes apply to any gain from the disposition of our shares by a U.S. Holder, such taxes may be treated as foreign taxes eligible for credit against suchholder’s U.S. federal income tax liability (subject to certain limitations), and a U.S. Holder may be entitled to certain benefits under the U.S.PRC Tax Treaty. U.S.Holders should consult their own tax advisors regarding the creditability of any such PRC tax and their eligibility for the benefits of the U.S.PRC Tax Treaty.Passive Foreign Investment CompanyWe do not expect to be a PFIC for U.S. federal income tax purposes for our current tax year or in the foreseeable future. The determination of whether or notwe are a PFIC in respect of any of our taxable years is a factual determination that cannot be made until the close of the applicable tax year and that is based on thetypes of income we earn and the value and composition of our assets (including goodwill), all of which are subject to change. Therefore, we can make no assurancesthat we will not be a PFIC in respect of our current taxable year or in the future.In general, we will be a PFIC in any taxable year if either:1.at least 75% of our gross income for the taxable year is passive income; or2.at least 50% of the value, determined on the basis of a quarterly average, of our assets is attributable to assets that produce or are held for theproduction of passive income.Passive income includes dividends, interest, royalties, rents (other than certain rents and royalties derived in the active conduct of a trade or business), theexcess of gains over losses from certain types of transactions in commodities, annuities and gains from assets that produce passive income. We will be treated asowning our proportionate share of the assets and earning our proportionate share of the income of any corporation in which we own, directly or indirectly, at least25% (by value) of the stock.If we are treated as a PFIC in any year during which a U.S. Holder owns the securities, and such U.S. Holder did not make a marktomarket election, asdescribed below, the U.S. Holder will be subject to special rules with respect to:1.any gain recognized by the U.S. Holder on the sale or other disposition of its shares; and any excess distribution that we make to the U.S. Holder(generally, the excess of the amount of any distributions to such U.S. Holder during a single taxable year of such U.S. Holder over 125% of theaverage annual distributions received by such U.S. Holder in respect of the shares during the three preceding taxable years of such U.S. Holder or,if shorter, such U.S. Holder holding period for the shares).Under these rules:2.the gain or excess distribution will be allocated ratably over the U.S. Holder’s holding period for the shares;3.the amount allocated to the U.S. Holder’s taxable year in which it realized the gain or excess distribution or to the period in the U.S. Holder’sholding period before the first day of our first taxable year in which we are a PFIC will be taxed as ordinary income;4.the amount allocated to other taxable years (or portions thereof) of the U.S. Holder and included in its holding period will be taxed at the highesttax rate in effect for that year; and5.the interest charge generally applicable to underpayments of tax will be imposed in respect of the tax attributable to each such other taxable yearof the U.S. Holder. 6.Special rules apply for calculating the amount of the foreign tax credit with respect to excess distributions by a PFIC.65Alternatively, if a U.S. Holder, at the close of its taxable year, owns ordinary shares in a PFIC that are treated as marketable stock, the U.S. Holder may makea marktomarket election with respect to such shares for such taxable year. Our shares will be “marketable” to the extent that they remain regularly traded on anational securities exchange, such as the NASDAQ Capital Market. If a U.S. Holder makes this election in a timely fashion, it will not be subject to the PFIC rulesdescribed above. Instead, in general, the U.S. Holder will include as ordinary income each year the excess, if any, of the fair market value of its shares at the end ofthe taxable year over its adjusted basis in its shares. Any ordinary income resulting from this election would generally be taxed at ordinary income tax rates andwould not be eligible for the reduced rate of tax applicable to qualified dividend income. The U.S. Holder will also be allowed to take an ordinary loss in respect ofthe excess, if any, of the adjusted basis of its shares over the fair market value at the end of the taxable year (but only to the extent of the net amount of previouslyincluded income as a result of the marktomarket election). The U.S. Holder’s basis in the shares will be adjusted to reflect any such income or loss amounts. U.S.Holders should consult their own tax advisor regarding potential advantages and disadvantages of making a marktomarket election with respect to their shares.Alternatively, a U.S. Holder of stock in a PFIC may avoid the PFIC tax consequences described above in respect to our or shares by making a timely“qualified electing fund” election to include in income its pro rata share of our net capital gains (as longterm capital gain) and other earnings and profits (asordinary income), on a current basis, in each case whether or not distributed, in the taxable year of the U.S. Holder in which or with which our taxable year ends.However, the qualified electing fund election is available only if the PFIC provides such U.S. Holder with certain information regarding its earnings and profits asrequired under applicable U.S. Treasury regulations. We do not intend to furnish the information that a U.S. Holder would need in order to make a qualified electingfund election. Therefore, U.S. Holders will not be able to make or maintain such election with respect to their or shares.If a U.S. Holder owns our shares or during any year that we are a PFIC, such holder must file U.S. Internal Revenue Service Form 8621 regarding suchholder’s shares or and the gain realized on the disposition of the shares. The reduced tax rate for dividend income, discussed in “Taxation of Distributions,” is notapplicable to dividends paid by a PFIC. U.S. Holders should consult with their own tax advisors regarding reporting requirements with respect to their shares.Tax Consequences to NonU.S. HoldersDividends paid to a NonU.S. Holder in respect of our or shares generally will not be subject to U.S. federal income tax, unless the dividends are effectivelyconnected with the NonU.S. Holder’s conduct of a trade or business within the United States (and, if required by an applicable income tax treaty, are attributable toa permanent establishment or fixed base that such holder maintains in the United States).In addition, a NonU.S. Holder generally will not be subject to U.S. federal income tax on any gain attributable to a sale or other disposition of our or sharesunless such gain is effectively connected with its conduct of a trade or business in the United States (and, if required by an applicable income tax treaty, isattributable to a permanent establishment or fixed base that such holder maintains in the United States) or the NonU.S. Holder is an individual who is present in theUnited States for 183 days or more in the taxable year of sale or other disposition and certain other conditions are met (in which case, such gain from United Statessources generally is subject to tax at a 30% rate or a lower applicable tax treaty rate).Dividends and gains that are effectively connected with the NonU.S. Holder’s conduct of a trade or business in the United States (and, if required by anapplicable income tax treaty, are attributable to a permanent establishment or fixed base in the United States) generally will be subject to tax in the same manner as fora U.S. Holder and, in the case of a NonU.S. Holder that is a corporation for U.S. federal income tax purposes, may also be subject to an additional branch profits taxat a 30% rate or a lower applicable tax treaty rate.66Information Reporting and Backup Withholding In general, information reporting for U.S. federal income tax purposes generally should apply to distributions made on the securities within the UnitedStates to a noncorporate U.S. Holder and to the proceeds from sales and other dispositions of the securities by a noncorporate U.S. Holder to or through a U.S.office of a broker. Payments made (and sales and other dispositions effected at an office) outside the United States generally should be subject to informationreporting in limited circumstances.Dividend payments made to U.S. Holders and proceeds paid from the sale or other disposition the securities may be subject to information reporting to theIRS and possible U.S. federal backup withholding at a current rate of 28%. Certain exempt recipients, such as corporations, are not subject to these informationreporting requirements. Backup withholding will not apply to a U.S. Holder who furnishes a correct taxpayer identification number and makes any other requiredcertification, or who is otherwise exempt from backup withholding. U.S. Holders who are required to establish their exempt status must provide a duly executed IRSForm W9.A NonU.S. Holder generally may eliminate the requirement for information reporting and backup withholding by providing certification of its foreignstatus, under penalties of perjury, on a duly executed applicable IRS Form W8 or by otherwise establishing an exemption.Backup withholding is not an additional tax. Rather, the amount of any backup withholding will be allowed as a credit against a U.S. Holder’s or a nonU.S.Holder’s U.S. federal income tax liability and may entitle such holder to a refund, provided that certain required information is timely furnished to the IRS.PROSPECTIVE PURCHASERS OF OUR SECURITIES SHOULD CONSULT WITH THEIR OWN TAX ADVISORS REGARDING THE APPLICATION OFTHE U.S. FEDERAL INCOME TAX LAWS TO THEIR PARTICULAR SITUATIONS AS WELL AS ANY ADDITIONAL TAX CONSEQUENCES RESULTING FROMPURCHASING, HOLDING OR DISPOSING OF OUR SECURITIES, INCLUDING THE APPLICABILITY AND EFFECT OF THE TAX LAWS OF ANY STATE, LOCALOR NONU.S. JURISDICTION, INCLUDING ESTATE, GIFT, AND INHERITANCE LAWS AND APPLICABLE TAX TREATIES.F. DIVIDENDS AND PAYING AGENTS.Not applicable.G. STATEMENT BY EXPERTS.None.H. DOCUMENTS ON DISPLAY.We previously filed a registration statement on Form F1 (File No. 333166056) with the SEC relating to our initial public offering in May 2010. This transition reportdoes not contain all of the information in the registration statement and the exhibits and financial statements included with the registration statement. References inthis transition report to any of our contracts, agreements or other documents are not necessarily complete, and you should refer to the exhibits attached to theregistration statement for copies of the actual contracts, agreements or documents. In addition, we will file transition reports on Form 20F and submit otherinformation under cover of Form 6K. As a foreign private issuer, we are exempt from the proxy requirements of Section 14 of the Exchange Act and our officers,directors and principal shareholders will be exempt from the insider shortswing disclosure and profit recovery rules of Section 16 of the Exchange Act. You may readand copy the registration statement, the related exhibits and other materials we file with the SEC at the SEC's public reference room in Washington, D.C. at 100 FStreet, Room 1580, N.E., Washington, D.C.20549. You can also request copies of those documents, upon payment of a duplicating fee, by writing to the SEC. Pleasecall the SEC at 1800SEC0330 for further information on the operation of the public reference rooms. The SEC also maintains an Internet site that contains reports,proxy and information statements and other information regarding issuers that file with the SEC. The website address is http://www.sec.gov. You may also request acopy of these filings, at no cost, by writing us at LAB 32, SOHO 3Q, No 9, Guanghua Road, Chaoyang District, Beijing, People’s Republic of China, 100020 ortelephoning us at (86) 1085866721.67I. SUBSIDIARY INFORMATIONFor a listing of our subsidiaries, see “Item 4. Information on the Company – C. Organizational Structure.”ITEM 11. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.Interest Rate RiskAs of December 31, 2017, we had no shortterm or longterm borrowings. If we borrow money in future periods, we may be exposed to interest rate risk. Ourexposure to market risk for changes in interest rates relates primarily to the interest income generated by our cash deposits with our banks and heldtomaturityinvestments. We have not used any derivative financial instruments in our investment portfolio. Interest earnings instruments carry a degree of interest rate risk. Wehave not been exposed, nor do we anticipate being exposed to material risks due to changes in interest rates. However, our future interest income may fall short ofexpectations due to changes in interest rates. Foreign Exchange RiskTranslation adjustments amounted to $90,671 and $387,375 gain as of the fiscal year ended December 31, 2017 and 2016, respectively. The Companytranslated balance sheet amounts with the exception of equity at December 31, 2017 at RMB 6.5342 to $1.00 as compared to RMB 6.9370 to $1.00 at December 31,2016. The Company stated equity accounts at their historical rate. The average translation rates applied to income statement accounts for the fiscal year endedDecember 31, 2017 and 2016 were RMB6.7356 and RMB 6.7153 to US$1.00, respectively. So far, the PRC government has been able to manage a stable exchange ratebetween RMB and the U.S. Dollar. Our future downward translation adjustments may occur and can be significant due to changes in such exchange rate.If we decide to convert our RMB into U.S. dollars for the purpose of making payments for dividends on our ordinary shares or for other business purposes,appreciation of the U.S. dollar against the RMB would have a negative effect on the U.S. dollar amount available to us.The PRC government imposes strict restrictions on PRC resident companies regarding converting RMB into foreign currencies and vice versa under capitalaccount transactions, such as receiving equity investments from outside of the PRC, making equity investments outside of the PRC, borrowing money from orlending money outside of the PRC, and repaying debt or remitting liquidated assets and/or accumulated profits outside of the PRC. These transactions have to beapproved by the relevant PRC government authorities, including but not limited to the commerce bureau, the tax bureau and the State Administration of ForeignExchange, or SAFE, and have to be conducted at banks entrusted by the local SAFE branch. As our business continues to grow, we may need to continuouslyfinance our PRC subsidiaries by raising capital from outside of the PRC. The restriction on converting RMB into foreign currencies, and vice versa, may limit ourability to use capital resources from outside of the PRC. Such restrictions may also limit our ability to remit profits from our PRC subsidiaries outside of the PRC,therefore potentially limiting our ability to pay dividends to our shareholders. In addition, such restrictions will limit our ability to freely transfer temporary excesscash in our or our subsidiaries’ bank accounts in and out of the PRC, therefore limiting our ability to conduct crossborder cash management activities to optimizethe utilization of our cash.InflationAlthough China has experienced an increasing inflation rate, inflation has not had a material impact on our results of operations in recent years. Accordingto the National Bureau of Statistics of China, the change in the consumer price index in China was 0.46%, (0.77%), and 1.16% in 2001, 2002 and 2003, respectively.However, in connection with a 3.9% increase in 2004, the PRC government announced measures to restrict lending and investment in China in order to reduceinflationary pressures in China’s economy. Following the government’s actions, the consumer price index decreased to 1.8% in 2005 and to 1.5% in 2006. In 2007, theconsumer price index increased to 4.8%. In response, China’s central bank, the People’s Bank of China, announced that the bank reserve ratio would rise half apercentage point to 15.5% in an effort to reduce inflation pressures. China’s consumer price index growth rate reached 8.7% year over year in 2008. In 2009 and 2010,the change in the consumer price index in China was minus 0.7% and 3.3%.China consumer price index in November 2017 was 3.8% higher than that of the same period in 2016. China consumer price index in December 2016 was2.4% higher than that of the same period in 2015. China consumer price index in December 2015 was 4.8% higher than that of the same period in 2014. Chinaconsumer price index in December 2014 was 3.3% higher than that of the same period in 2013. The results of the PRC government’s actions to combat inflation aredifficult to predict. Adverse changes in the Chinese economy, if any, will likely impact the financial performance of a variety of industries in China that use, or wouldbe candidates to use, our software products and services.68ITEM 12. DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES.A. DEBT SECURITIES.Not applicable. B. WARRANTS AND RIGHTS.Not applicable.C. OTHER SECURITIES.Not applicable.D. AMERICAN DEPOSITARY SHARES.The Bank of New York Mellon, as depositary (the “Depositary”) for the Company’s ADR facility, notified the owners and holders of the Company’s ADSsthat the ADS facility will terminate effective at 5:00 p.m. (Eastern Time) on September 19, 2018. Under the terms of the Deposit Agreement among the Company, theDepositary and the owners and holders of ADSs of the Company (the “Deposit Agreement”), owners and holders of the Company’s ADSs have until at leastJanuary 21, 2019 to surrender their ADSs to the Depositary for delivery of the underlying ordinary shares of the Company. Subsequent to January 21, 2019, underthe terms of the Deposit Agreement, the Depositary may attempt to sell any ordinary shares remaining on deposit with the Depositary. If the Depositary sells suchunderlying ordinary shares or receives value for such shares, holders must surrender their ADSs to obtain payment of the sale proceeds, net of expenses andapplicable tax and charges. We completed the voluntary delisting of our ADSs from the NASDAQ Capital Market on September 19, 2018.You may hold ADSs either (A) directly (i) by having ADSs registered in your name in the Direct Registration System, or (ii) by having an Americandepositary receipt, also referred to as an ADR, which is a certificate evidencing a specific number of ADSs, registered in your name, or (B) indirectly by holding asecurity entitlement in ADSs through your broker or other financial institution. If you hold ADSs directly, you are a registered ADS holder, also referred to as anADS holder. This description assumes you are an ADS holder. If you hold the ADSs indirectly, you must rely on the procedures of your broker or other financialinstitution to assert the rights of ADS holders described in this section. You should consult with your broker or financial institution to find out what thoseprocedures are.The Direct Registration System, or DRS, is a system administered by The Depository Trust Company, also referred to as DTC, pursuant to which thedepositary may register the ownership of uncertificated ADSs, which ownership will be confirmed by periodic statements sent by the depositary to the registeredholders of uncertificated ADSs.69As an ADS holder, you will not be treated as one of our registered shareholders and you will not have direct shareholder rights. British Virgin Island’s lawgoverns our direct shareholders’ rights. The depositary will be the holder of the shares underlying your ADSs. As a registered holder of ADSs, you will have ADSholder rights. A Deposit Agreement among us, the depositary and you, as an ADS holder, and all other persons indirectly holding ADSs, sets out ADS holder rightsas well as the rights and obligations of the depositary. New York law governs the Deposit Agreement and the ADSs.The following is a summary of the material provisions of the Deposit Agreement. For more complete information, you should read the entire DepositAgreement and the form of ADS, which contains the terms of the ADSs. The Deposit Agreement is filed as an exhibit to our registration statement filed on Form F1.You may obtain the registration statement and the attached Deposit Agreement from the SEC’s website at http://www.sec.gov. You may also obtain a copy of theDeposit Agreement at the SEC’s Public Reference Room, which is located at 100 F Street, NE, Washington, DC 20549. You may obtain information on the operationof the Public Reference Room by calling the SEC at 18007320330. Fees and ExpensesPersons depositing or withdrawing shares or ADS holders must pay:For:$5.00 (or less) per 100 ADSs (or portion of 100 ADSs)Issuance of ADSs, including issuances resulting from a distribution of shares orrights or other propertyCancellation of ADSs for the purpose of withdrawal, including if the DepositAgreement terminates$.05 (or less) per ADSAny cash distribution to ADS holdersA fee equivalent to the fee that would be payable if securities distributed to youhad been shares and the shares had been deposited for issuance of ADSsDistribution of securities distributed to holders of deposited securities whichare distributed by the depositary to ADS holders$.05 (or less) per ADSs per calendar yearDepositary servicesRegistration or transfer feesTransfer and registration of shares on our share register to or from the name ofthe depositary or its agent when you deposit or withdraw sharesExpenses of the depositaryCable, telex and facsimile transmissions (when expressly provided in the DepositAgreement) converting foreign currency to U.S. dollarsTaxes and other governmental charges the depositary or the custodian have topay on any ADS or share underlying an ADS, for example, share transfer taxes,stamp duty or withholding taxesAs necessaryAny charges incurred by the depositary or its agents for servicing the depositedsecuritiesAs necessaryPayment of TaxesHolders of our ADSs are responsible for any taxes or other governmental charges payable on their ADSs or on the deposited securities represented by anyof their ADSs. The depositary may refuse to register any transfer of a holder’s ADSs or allow withdrawal of the deposited securities represented by the ADSs untilsuch taxes or other charges are paid. It may apply payments owed to the holder or sell deposited securities represented by the ADSs to pay any taxes owed and theholder will remain liable for any deficiency. If the depositary sells deposited securities, it will, if appropriate, reduce the number of ADSs to reflect the sale and pay toADS holders any proceeds, or send to ADS holders any property, remaining after it has paid the taxes.70PART IIITEM 13. DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES.None.ITEM 14. MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS.Use of Proceeds.We completed our initial public offering on May 14, 2010 (the “IPO”), which generated net proceeds of approximately $14.6 million. All remaining cash onhand from the proceeds of our IPO was transferred to C Media Limited and its subsidiaries following the completion of the asset exchange transactions on August17, 2018.ITEM 15. CONTROLS AND PROCEDURES.Disclosure Controls and ProceduresOur Chief Executive Officer and Chief Financial Officer have reviewed and evaluated the effectiveness of our disclosure controls and procedures, whichincluded inquiries made to certain other of our employees. The term “disclosure controls and procedures,” as defined in Rules 13a15(e) and 15d15(e) under theExchange Act, means controls and other procedures of a company that are designed to ensure that information required to be disclosed by a company in thereports, such as this report, that it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in theSEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to bedisclosed by a company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the company’s management, including itsprincipal executive and principal financial officers, as appropriate to allow timely decisions regarding required disclosure. Management recognizes that any controlsand procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives and management necessarilyapplies its judgment in evaluating the costbenefit relationship of possible controls and procedures. Based on that evaluation, our Chief Executive Officer and ChiefFinancial Officer have each concluded that, as of December 31, 2017, the Company’s disclosure controls and procedures were not effective due to the materialweakness described in the “Management’s Report on Internal Control over Financial Reporting” section below.Management’s Report on Internal Control Over Financial ReportingOur management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Exchange ActRules 13a15(f) and 15d15(f). Internal control over financial reporting refers to the process designed by, or under the supervision of, our principal executive officerand principal financial officer, and effected by our Board of Directors, management and other personnel, to provide reasonable assurance regarding the reliability offinancial reporting and the preparation of financial statements for external purposes in accordance with U.S. GAAP and includes those policies and procedures that(i) pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of the assets of the Company; (ii)provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with U.S. GAAP, and thatreceipts and expenditures of the Company are being made only in accordance with authorizations of management and directors of the Company; and (iii) providereasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the Company’s assets that could have a materialeffect on the financial statements.71Any system of internal control, no matter how well designed, has inherent limitations. Therefore, even those systems determined to be effective canprovide only reasonable assurance with respect to financial statement preparation and presentation. Because of the inherent limitations of internal control, there is arisk that material misstatements may not be prevented or detected on a timely basis by internal control over financial reporting. However, these inherent limitationsare known features of the financial reporting process. Therefore, it is possible to design into the process safeguards to reduce, though not eliminate, this risk.Management assessed our internal control over financial reporting as of the year ended December 31, 2017. In making this assessment, management usedthe criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in the 2014 report entitled "Internal ControlIntegratedFramework." The COSO framework summarizes each of the components of a company’s internal control system, including (i) the control environment, (ii) riskassessment, (iii) control activities, (iv) information and communication, and (v) monitoring. Based on such assessment, management concluded that its internalcontrol over financial reporting as of December 31, 2017 was not effective because of the following material weakness:Lack of U.S. GAAP expertise. Although our accounting personnel are professional and experienced in accounting requirements and procedures generallyaccepted in the PRC, they do not have sufficient knowledge, experience and training in maintaining our books and records and preparing financial statements inaccordance with U.S. GAAP standards and SEC rules and regulations. The staff needs additional training to become experienced in U.S. GAAPbased reporting,including the skills of U.S. GAAPbased period end closing, consolidation of financial statements, and U.S. GAAP conversion.In order to address the above material weakness, our management plans to take the following steps:We will employ, as needed, outside professionals to provide key accounting personnel ongoing technical trainings to ensure their proper understanding ofU.S. GAAP and newly announced accounting standards.The Company believes the foregoing measures will remediate the identified material weakness in future periods. The Company is committed to monitoringthe effectiveness of these measures and making any changes that are necessary and appropriate.Notwithstanding the conclusion that its internal control over financial reporting was not effective as of the end of the period covered by this report, ourChief Executive Officer and Chief Financial Officer believe that the financial statements and other information contained in this report present fairly, in all materialrespects, its business, financial condition and results of operations. Nothing has come to the attention of management that causes them to believe that any materialinaccuracies or errors exist in the Company’s financial statements as of December 31, 2017.Attestation report of the registered public accounting firm.This transition report does not include an attestation report of the Company’s registered public accounting firm on internal control over financial reportingbecause the Company is a nonaccelerated filer permanently exempted from section 404(b) of the SarbanesOxley Act.Changes in Internal Control over Financial ReportingThere were no changes in the Company’s internal control over financial reporting that occurred during our fiscal year ended December 31, 2017 that hasmaterially affected or is reasonably likely to materially affect our internal control over financial reporting.ITEM 16. [RESERVED]ITEM 16A. AUDIT COMMITTEE FINANCIAL EXPERT.Our board of directors has determined that Mr. Dennis Galgano qualifies as an audit committee financial expert. Our board of directors has determined thatMessrs. Dennis Galgano, Jin Shi, Jiming Ha and Zhihao Xu meet the definition of an “independent director” under the applicable NASDAQ Rules and under Rule10A3 of the Securities Exchange Act of 1934, as amended.72ITEM 16B. CODE OF ETHICS.Our board of directors has adopted a code of business conduct and ethics applicable to our directors, officers and employees. We have posted the code onour website at http://www.luokung.com.ITEM 16C. PRINCIPAL ACCOUNTANT FEES AND SERVICES.Audit FeesThe aggregate fees billed by Moore Stephens CPA Limited for professional services rendered for the audit of our financial information disclosed in thistransition report on Form 20F was $280,000 for the two years ended December 31, 2017 and 2016.The aggregate fees billed by our previous auditor, BDO China Shu Lun Pan Certified Public Accountants LLP for professional services rendered for theaudit of our annual financial information included in our annual reports on Form 20F was $105,500 for each of the fiscal years ended September 30, 2017, 2016 and2015.Tax FeesWe did not engage our principal accountants to provide tax or related services during the last two fiscal years.All Other FeesWe did not engage our principal accountants to render services to us during the last two fiscal years, other than as reported above.ITEM 16D. EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES.Not applicable.ITEM 16E. PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS.Not applicable.ITEM 16F. CHANGE IN REGISTRANT’S CERTIFYING ACCOUNTANT.Not applicable.ITEM 16G. CORPORATE GOVERNANCE.We are incorporated in the BVI and our corporate governance practices are governed by applicable BVI law as well as our memorandum and articles ofassociation. In addition, because our ADSs are listed on NASDAQ, we are subject to NASDAQ’s corporate governance requirements. NASDAQ Listing Rule5620(a) requires each issuer to hold an annual meeting of shareholders no later than one year after the end of the issuer’s fiscal year end. However, NASDAQ ListingRule 5615(a)(3) permits a foreign private issuer like us to follow home country practices in lieu of certain requirements of Listing Rule 5600, provided that suchforeign private issuer discloses in its transition report filed with the SEC each requirement of Rule 5600 that it does not follow and describes the home countrypractice followed in lieu of such requirement. We follow home country practice with respect to annual meetings and did not hold an annual shareholder meeting inthe year ended December 31, 2017. We may, however, hold annual shareholder meetings in the future if there are significant issues that require shareholders’approvals.ITEM 16H. MINE SAFETY DISCLOSURE.Not applicable.73PART IIIITEM 17. FINANCIAL STATEMENTS.We have elected to provide financial statements and related information specified in Item 18.ITEM 18. FINANCIAL STATEMENTS.See “Index to Consolidated Financial Statements” for a list of all financial statements filed as part of this transition report. The Financial Statements arebeginning on page F1.ITEM 19. EXHIBITS.See the Exhibit Index following the signature page of this report, which is incorporated herein by reference.74SIGNATURESThe registrant hereby certifies that it meets all of the requirements for filing on Form 20F and that it has duly caused and authorized the undersigned tosign this transition report on its behalf.LUOKUNG TECHNOLOGY CORP.By:/s/ Xuesong Song Xuesong SongChief Executive Officer(principal executive officer)October 12, 201875EXHIBIT INDEXThe following documents are filed as part of this transition report on Form 20F.ExhibitNumberDescription1.1Amended and Restated Memorandum of Association and Articles of Association of Luokung Technology Corp., dated August 20, 2018, and ascurrently in effect.2.1*Deposit Agreement among the Company, depositary and holders of the American Depositary Receipts.2.2*Form of American Depositary Receipt.2.3*English translation of Entrusted Management Agreement dated December 15, 2009 between Xi’an Softech Co., Ltd., Xi’an Kingtone InformationTechnology Co., Ltd. and the shareholders of Xi’an Kingtone Information Technology Co., Ltd.3.1*English translation of Shareholder’s Voting Proxy Agreement dated December 15, 2009 between Xi’an Softech Co., Ltd., Xi’an Kingtone InformationTechnology Co., Ltd. and the shareholders of Xi’an Kingtone Information Technology Co., Ltd.4.1*English translation of Exclusive Technology Service Agreement dated December 15, 2009 between Xi’an Softech Co., Ltd. and Xi’an KingtoneInformation Technology Co., Ltd.4.2*English translation of Exclusive Option Agreement dated December 15, 2009 between Xi’an Softech Co., Ltd., Xi’an Kingtone InformationTechnology Co., Ltd. and the shareholders of Xi’an Kingtone Information Technology Co., Ltd.4.3*English translation of Equity Pledge Agreement dated December 15, 2009 between Xi’an Softech Co., Ltd., Xi’an Kingtone Information TechnologyCo., Ltd. and the shareholders of Xi’an Kingtone Information Technology Co., Ltd.4.4*English translation of Loan Agreement dated September 14, 2009 between Xi’an Kingtone Information Technology Co., Ltd. and Xian CityCommercial Bank.4.5*English translation of Mortgage Agreement dated September 14, 2009 between Xi’an Kingtone Information Technology Co., Ltd. and Xian CityCommercial Bank.4.6*English translation of Form of Employment Agreement entered into between the Company and the Company’s executive officers.4.7*2010 Omnibus Incentive Plan of the Company.4.8**English translation of Project Construction Contract dated August 10, 2010 between Xi’an Hu County Yuxing Agriculture Science & TechnologyCo., Ltd. and Xi’an Kingtone Information Technology Co., Ltd.4.9***Asset Exchange Agreement by and between C Media Limited and the Company dated as of January 25, 2018.4.10***Securities Purchase Agreement by and among Redstone YYL Management Limited and five shareholders holding majority of the shares of theCompany dated as of January 25, 2018.4.15Exclusive Business Cooperation Agreement by and between Zhongchuan Tianxia Information Technology (Shenzhen) Co., Ltd., and Beijing MobileVision Technology Co., Ltd., dated August 31, 2015.764.16Exclusive Option Agreement by and among Zhongchuan Tianxia Information Technology (Shenzhen) Co., Ltd., Xuesong Song, Weili Chen, PingWang, Donglai Liu, and Beijing Mobile Vision Technology Co., Ltd., dated August 31, 2015.4.17Equity Interest Pledge Agreement by and among Zhongchuan Tianxia Information Technology (Shenzhen) Co., Ltd., Xuesong Song, Weili Chen, PingWang, Donglai Liu, and Beijing Mobile Vision Technology Co., Ltd., dated August 31, 2015.4.18Addendum to Asset Exchange Agreement by and among the Company, Topsky Infotech Holdings Pte Ltd. and C Media Limited, dated October 3,2018. Incorporated by reference to the Company’s Current Report on Form 6K filed on October 4, 2018.4.19Stock Purchase Agreement, dated August 25, 2018, by and among the Company, LK Technology Ltd., and the shareholders listedtherein. Incorporated by reference to the Company’s Current Report on Form 6K filed on August 27, 2018.4.20Power of Attorney by Weili Chen, dated August 31, 2015.4.21Power of Attorney by Ping Wang, dated August 31, 2015.4.22Power of Attorney by Donglai Liu, dated August 31, 2015.4.23Power of Attorney by Xuesong Song, dated August 31, 2015.8.1List of Subsidiaries and Consolidated Variable Interest Entities10.1Employment Agreement, dated August 19, 2018, between Luokung Technology Corp. and Xuesong Song.†10.2Employment Agreement, dated August 19, 2018, by and between Luokung Technology Corp. and Jie Yu.†12.1Certification of Chief Executive Officer required by Rule 13a14(a).12.2Certification of Chief Financial Officer required by Rule 13a14(a).13.1Certification of Chief Executive Officer required by Rule 13a14(a).13.2Certification of Chief Financial Officer required by Rule 13a14(a).101.INSXBRL Instance Document.101.SCHXBRL Taxonomy Extension Schema Document.101.CALXBRL Taxonomy Extension Calculation Linkbase Document.101.DEFXBRL Taxonomy Extension Definition Linkbase Document.101.LABXBRL Taxonomy Extension Label Linkbase Document.101.PREXBRL Taxonomy Extension Presentation Linkbase Document.*Previously filed as an exhibit to the Company’s Registration Statement on Form F1 (Reg. No. 333166056) filed with the Commission and incorporated hereinby reference.**Previously filed as exhibits to the Company’s Transition Report on Form 20F filed with the Commission on January 20, 2011 and incorporated herein byreference.***Previously filed as exhibits to the Company’s Annual Report on Form 20F filed with the Commission on February 9, 2018 and incorporated herein byreference.†Indicates management contract or compensatory plan, contract or arrangement.77LK Technology Ltd. and SubsidiariesCONSOLIDATED FINANCIAL STATEMENTSTABLE OF CONTENTSPage(s)Report of Independent Registered Public Accounting FirmF2Consolidated Financial StatementsConsolidated Balance SheetsF3Consolidated Statements of Operations and Comprehensive LossF4application.Chuang (Vincent) Tao was appointed as a member of the Board effective on August 25, 2018. Dr. Tao was the Chairman of SuperEngine Suzhou from 2014to 2017. Dr. Tao has been the president of the Seasky Angel Investment Alliance of Shanghai since 2015. Dr. Tao received his Bachelor Degree of geographicinformation and telemetry from Wuhan University in China in 1990 and received his Ph.D. from University of Calgary, Canada in 1997.Dennis Galgano was appointed as a director of the Company following the consummation of the asset exchange agreement. He was a registered consultantwith Morgan Joseph Triartisan LLC from November 2016 until October 2017, and previously served as vice chairman and head of international investment bankingfor Morgan Joseph Triartisan LLC, which is a registered broker dealer engaged in the investment banking and financial advisory industry. Mr. Galgano received aB.S. degree in Chemistry from St. John’s University and an M.B.A. from The Wharton School in 1972.Jin Shi was appointed as a director of the Company following the consummation of the asset exchange transactions. Mr. Shi has served as the managingpartner of Chum Capital Group, a merchant bank focused on helping Chinese growth companies to access global capital, since January 2013. Mr. Shi has also servedas a director of Seven Stars Cloud Group, Inc. (NASDAQ: SSC), a premium video on demand service provider, since January 2014, and joined the audit committee ofits board of directors in March 2016. He also served as a director and member of the audit committee of Pingtan Marine Enterprise, Ltd. (NASDAQ: PME), a marineenterprise group primarily engaged in ocean fishing through its subsidiaries. Mr. Shi received an EMBA degree from the Guanghua Management School of BeijingUniversity, and a Bachelor’s degree of science in Chemical Engineering from Tianjin University.Jiming Ha was appointed as a director of the Company following the consummation of the asset exchange agreement, and has also served as a seniorresearch fellow for the China Finance 40 Forum since March 1, 2018, and previously served as a managing director of Goldman Sachs from January 2017 to April2017. Mr. Ha served as a vice chairman and chief investment strategist of the Investment Strategy Group for Private Wealth Management at Goldman Sachs from2010 to January 2017. Mr. Ha holds a PhD in Economics from the University of Kansas and Master’s and Bachelor’s degrees of science from Fudan University.Zhihao Xu was appointed as a director of the Company following the consummation of the asset exchange transactions. Mr. Xu has served as the chiefexecutive officer of Geely Group Co., Ltd., in Hangzhou, China, since December 2017, and previously served as the chairman and chief executive officer of BeijingDingchengrenhe Investment Co., Ltd., a funds management company, from January 2017 to December 2017. Mr. Xu served as the chairman of president of HNAUSOLV CO., LTD., and the chief innovation officer of HNA Logistics Group from January 2014 to December 2016, and prior to that as the chairman of GopayInnovation Technology Co. Ltd., an online payment system operator supporting online money transfers, from April 2012 to January 2014. Mr. Xu graduated from theBusiness School of Renmin University of China and from the Wudaokou Finance College of Tsinghua University with a fund qualification certificate and securitiesqualification certificate.B. COMPENSATION.Compensation of Directors and Executive OfficersFor the ninemonth transition period ended September 30, 2018 and the fiscal year ended December 31, 2017, we did not pay any cash compensation to ourexecutive officers of LK Technology Ltd. and a to our directors for serving on our board of directors of LK Technology Ltd.37Other than nonemployee directors, we do not intend to compensate directors for serving on our board of directors or any of its committees. We do,however, intend to reimburse each member of our board of directors for outofpocket expenses incurred by each director in connection with attending meetings ofthe board of directors and its committees.AdministrationThe Incentive Plan is administered by our board of directors, or at the discretion of the board, by our compensation committee. Our board of directors hasdelegated authority to our compensation committee to administer the Incentive Plan. Subject to the terms of the Incentive Plan, the compensation committee mayselect participants to receive awards, determine the types of awards and terms and conditions of awards, and interpret provisions of the Incentive Plan.The ordinary shares issued or to be issued under the Incentive Plan consist of authorized but unissued shares. If any ordinary shares covered by an awardare not purchased or are forfeited, or if an award otherwise terminates without delivery of any ordinary shares, then the number of ordinary shares counted againstthe aggregate number of ordinary shares available under the plan with respect to the award will, to the extent of any such forfeiture or termination, again be availablefor making awards under the Incentive Plan.EligibilityAwards may be made under the Incentive Plan to our employees, officers, directors, consultants or advisers or to any of our affiliates, and to any otherindividual whose participation in the Incentive Plan is determined to be in our best interests by our board of directors.Amendment or Termination of the PlanOur board of directors may terminate or amend the Incentive Plan at any time and for any reason. No amendment, however, may adversely impair the rightsof grantees with respect to outstanding awards. The Incentive Plan has a term of ten years. Amendments will be submitted for shareholder approval to the extentrequired by applicable stock exchange listing requirements or other applicable laws.OptionsThe Incentive Plan permits the granting of options to purchase ordinary shares intended to qualify as incentive share options under the Internal RevenueCode and share options that do not qualify as incentive share options, or nonqualified share options.The exercise price of each share option may not be less than 100% of the fair market value of our ADSs representing ordinary shares on the date of grant.In the case of certain 10% shareholders who receive incentive share options, the exercise price may not be less than 110% of the fair market value of our ADSsrepresenting ordinary shares on the date of grant. An exception to these requirements is made for options that we grant in substitution for options held byemployees of companies that we acquire. In such a case the exercise price is adjusted to preserve the economic value of the employee’s share option from his or herformer employer.The term of each share option is fixed by the compensation committee and may not exceed ten years from the date of grant. The compensation committeedetermines at what time or times each option may be exercised and the period of time, if any, after retirement, death, disability or termination of employment duringwhich options may be exercised.Options may be made exercisable in installments. The award agreement provides the vesting of the options. Exercisability of options may be accelerated bythe compensation committee.38In general, an optionee may pay the exercise price of an option by (1) cash or check (in U.S. dollars or Renminbi or other local currency as approved by thecompensation committee), (2) ordinary shares held for such period of time as may be required by the compensation committee, (3) delivery of a notice of a marketorder with a broker with respect to ordinary shares then issuable upon exercise of an option, and that the broker has been directed to pay us a sufficient portion ofnet proceeds of the sale in satisfaction of the exercise price, provided that payment of such proceeds is then made to us upon settlement of such sale, (4) otherproperty acceptable to the compensation committee with a fair market value equal to the exercise price, (5) cashless exercise or (6) any combination of the foregoing.Share options granted under the Incentive Plan may not be sold, transferred, pledged, or assigned other than by will or under applicable laws of descentand distribution. However, we may permit limited transfers of nonqualified options for the benefit of immediate family members of grantees to help with estateplanning concerns or pursuant to a domestic relations order in settlement of marital property rights.Other AwardsThe compensation committee may also award under the Incentive Plan:1.ordinary shares subject to restrictions;2.deferred ordinary shares, credited as deferred ordinary share units, but ultimately payable in the form of unrestricted ordinary shares inaccordance with the terms of the grant or with the participant’s deferral election;3.ordinary share units subject to restrictions;4.unrestricted ordinary shares, which are ordinary shares issued at no cost or for a purchase price determined by the compensation committee whichare free from any restrictions under the 2011 Omnibus Incentive Plan;5.dividend equivalent rights entitling the grantee to receive credits for dividends that would be paid if the grantee had held a specified number ofordinary shares; or6.a right to receive a number of ordinary shares or, in the discretion of the compensation committee, an amount in cash or a combination of ordinaryshares and cash, based on the increase in the fair market value of the ADSs representing ordinary shares underlying the right during a statedperiod specified by the compensation committee.Effect of Certain Corporate TransactionsCertain change of control transactions involving us may cause awards granted under the Incentive Plan to vest, unless the awards are continued orsubstituted for by the surviving company in connection with the corporate transaction.Unless otherwise provided in the appropriate option agreement on the date of grant or provided by our board of directors thereafter with the consent of thegrantee, options granted under the Incentive Plan become exercisable in full following (1) a dissolution of our company or a merger, consolidation or reorganizationof our company with one or more other entities in which we are not the surviving entity, (2) a sale of substantially all of our assets to another person or entity, or (3)any transaction (including without limitation a merger or reorganization in which we are the surviving entity) which results in any person or entity owning 50% ormore of the combined voting power of all classes of our shares.39Adjustments for Dividends and Similar EventsThe compensation committee will make appropriate adjustments in outstanding awards and the number of ordinary shares available for issuance under theIncentive Plan, including the individual limitations on awards, to reflect ordinary share dividends, stock splits and other similar events.C. BOARD PRACTICES.Board of DirectorsOur board of directors consists of six members being Messrs. Xuesong Song, Kegang Peng, Dennis Galgano, Jin Shi, Jiming Ha and Zhiaho Xu. Ourdirectors hold office until our annual meeting of shareholders, where their successors will be duly elected and qualified, or until the directors’ death, resignation orremoval, whichever is earlier. Our directors are not subject to a term of office and hold office until their resignation, death or incapacity or until their respectivesuccessors have been elected and qualified in accordance with our fourth amended and restated memorandum of association and articles of association. A directorwill be removed from office if, among other things, the director (1) becomes bankrupt, (2) dies or becomes of unsound mind, or (3) is absent from meetings of ourboard of directors for six consecutive months without leave and our board of directors resolves that the office is vacated. A director is not entitled to any specialbenefits upon termination of service with the company.Director IndependenceOur board of directors consists of six members; Messrs. Dennis Galgano, Jin Shi, Jiming Ha and Zhihao Xu have been determined by us to be independentdirectors within the meaning of the independent director guidelines of the NASDAQ Corporate Governance Rules (the “NASDAQ Rules”).Committees of Our Board of DirectorsTo enhance our corporate governance, we established three committees under our board of directors: an audit committee, a compensation committee, and anominating and corporate governance committee. We have adopted a charter for each of these committees. The committees have the following functions andmembers.Audit CommitteeOur audit committee reports to our board of directors regarding the appointment of our independent public accountants, the scope and results of ourannual audits, compliance with our accounting and financial policies and management’s procedures and policies relating to the adequacy of our internal accountingcontrols. Our audit committee consists of Messrs. Dennis Galgano, Jin Shi, and Jiming Ha. Mr. Galgano, having accounting and financial management expertise,serves as the chairman of the audit committee and is an “audit committee financial expert” as defined by the rules and regulations of the SEC. Our board of directorshas determined that each of these persons meet the definition of an “independent director” under the applicable NASDAQ Rules and under Rule 10A3 of theSecurities Exchange Act of 1934, as amended (the “Exchange Act”).Our audit committee is responsible for, among other things:●the appointment, evaluation, compensation, oversight and termination of the work of our independent auditor (including resolution of disagreementsbetween management and the independent auditor regarding financial reporting);●an annual performance evaluation of the audit committee;●establishing procedures for the receipt, retention and treatment of complaints regarding accounting, internal accounting controls, auditing matters orpotential violations of law, and the confidential, anonymous submission by our employees of concerns regarding questionable accounting or auditingmatters or potential violations of law;40●ensuring that it receives an transition report from our independent auditor describing our internal control procedures and any steps taken to deal withmaterial control deficiencies and attesting to the auditor’s independence and describing all relationships between the auditor and us;●reviewing our annual audited financial statements and quarterly financial statements with management and our independent auditor;●reviewing and approving all proposed related party transactions;●reviewing our policies with respect to risk assessment and risk management;●meeting separately and periodically with management and our independent auditor; and●reporting regularly to our board of directors.Compensation CommitteeOur compensation committee assists the board of directors in reviewing and approving the compensation structure of our directors and executive officers,including all forms of compensation to be provided to our directors and executive officers. In addition, the compensation committee reviews share compensationarrangements for all of our other employees. Members of the compensation committee are not prohibited from direct involvement in determining their owncompensation. Our chief executive officer is not permitted to be present at any committee meeting during which his or her compensation is deliberated. Ourcompensation committee consists of Dennis Galgano and Jin Shi, with Mr. Shi serving as the chairman of the compensation committee. Our board of directors hasdetermined that each of these persons meet the definition of “independent director” under the applicable requirements of the NASDAQ Rules.Our compensation committee is responsible for, among other things:●reviewing and approving corporate goals and objectives relevant to the compensation of our chief executive officer, evaluating the performance of ourchief executive officer in light of those goals and objectives and setting the compensation level of our chief executive officer based on this evaluation;●reviewing and making recommendations to the board with respect to the compensation of our executives, incentive compensation and equitybasedplans that are subject to board approval; and●providing annual performance evaluations of the compensation committee.Nominating and Corporate Governance CommitteeOur nominating and corporate governance committee assists the board of directors in identifying and selecting or recommending individuals qualified tobecome our directors, developing and recommending corporate governance principles and overseeing the evaluation of our board of directors and management. Ournominating and corporate governance committee consists of Jiming Ha and Zhihao Xue, with Mr. Ha serving as the chairman of the nominating and corporategovernance committee. Our board of directors has determined that each of these persons meet the definition of “independent director” under the applicablerequirements of the NASDAQ Rules.Our nominating and corporate governance committee is responsible for, among other things:●selecting and recommending to our board nominees for election or reelection to our board, or for appointment to fill any vacancy;●reviewing annually with our board the current composition of the board of directors with regards to characteristics such as independence, age, skills,experience and availability of service to us;●selecting and recommending to our board the names of directors to serve as members of the audit committee and the compensation committee, as wellas the nominating and corporate governance committee itself; advising our board of directors periodically with regards to significant developments inthe law and practice of corporate governance as well as our compliance with applicable laws and regulations, and making recommendations to ourboard of directors on all matters of corporate governance and on any remedial action to be taken; and●monitoring compliance with our code of business conduct and ethics, including reviewing the adequacy and effectiveness of our procedures to ensureproper compliance.41Code of Business Conduct and EthicsOur board of directors adopted a code of business conduct and ethics applicable to our directors, officers and employees.Duties of DirectorsUnder British Virgin Islands law, our directors have a duty to act honestly, in good faith and with a view to our best interests. Our directors also have a dutyto exercise care, diligence and skills that a reasonably prudent person would exercise in comparable circumstances. In fulfilling their duty of care to us, our directorsmust ensure compliance with our memorandum of association and articles of association. We have the right to seek damages if a duty owed by our directors isbreached.The functions and powers of our board of directors include, among others:●appointing officers and determining the term of office of the officers;●authorizing the payment of donations to religious, charitable, public or other bodies, clubs, funds or associations as deemed advisable;●exercising the borrowing powers of the company and mortgaging the property of the company;●executing cheques, promissory notes and other negotiable instruments on behalf of the company; and●maintaining or registering a register of mortgages, charges or other encumbrances of the company.Remuneration and BorrowingThe directors may receive such remuneration as our board of directors may determine from time to time. Each director is entitled to be repaid or prepaid alltraveling, hotel and incidental expenses reasonably incurred or expected to be incurred in attending meetings of our board of directors or committees of our board ofdirectors or shareholder meetings or otherwise in connection with the discharge of his or her duties as a director. The compensation committee will assist thedirectors in reviewing and approving the compensation structure for the directors.Our board of directors may exercise all the powers of the company to borrow money and to mortgage or charge our undertakings and property or any partthereof, to issue debentures, debenture stock and other securities whenever money is borrowed or as security for any debt, liability or obligation of the company orof any third party.QualificationA director is not required to hold shares as a qualification to office.42Limitation on Liability and Other Indemnification MattersBritish Virgin Islands law does not limit the extent to which a company’s memorandum of association and articles of association may provide forindemnification of officers and directors, except to the extent any such provision may be held by the British Virgin Islands courts to be contrary to public policy,such as to provide indemnification against civil fraud or the consequences of committing a crime.Under our memorandum of association and articles of association, we may indemnify our directors, officers and liquidators against all expenses, includinglegal fees, and against all judgments, fines and amounts paid in settlement and reasonably incurred in connection with civil, criminal, administrative or investigativeproceedings to which they are party or are threatened to be made a party by reason of their acting as our director, officer or liquidator. To be entitled toindemnification, these persons must have acted honestly and in good faith with a view to the best interest of the company and, in the case of criminal proceedings,they must have had no reasonable cause to believe their conduct was unlawful.Compensation Committee Interlocks and Insider ParticipationNone of the members of our compensation committee is an officer or employee of our company. None of our executive officers currently serves, or in thepast year has served, as a member of the board of directors or compensation committee of any entity that has one or more executive officers serving on our board ofdirectors or compensation committee.Employment AgreementsOn August 19, 2018, the Company entered into an Employment Agreement (the “Song Agreement”) with Mr. Xuesong Song, to serve as the ChiefExecutive Officer of the Company for a fouryear term, subject to renewal. Under the terms of the Song Agreement, Mr. Song will receive no salary for his servicesbut will be eligible for an annual cash bonus in the Board’s sole discretion.On August 19, 2018, the Company entered into an Employment Agreement (the “Yu Agreement”) with Mr. Jie Yu, to serve as the Chief Financial Officer ofthe Company for a fouryear term, subject to renewal. Under the terms of the Yu Agreement, Mr. Yu will receive an annual salary of RMB700,000, and will be eligiblefor an annual cash bonus in the Board’s sole discretion.D. EMPLOYEES.As of September 30, 2018 and December 31, 2017, we had a total of 107 and 37 fulltime employees, including 48 and 13 in research and development, 9 and 2in sales and marketing and the rest in a variety of other divisions, respectively. All of our employees are fulltime employees. None of our employees is currentlyrepresented by a union and/or collective bargaining agreements. We believe that we have good relations with our employees and since our inception we have hadno history of work stoppages or union organizing campaigns.E. SHARE OWNERSHIP.The following table provides information as to the beneficial ownership of our ordinary shares as of October 10, 2018, by the persons listed. Beneficialownership of shares is determined under the rules of the SEC and generally includes any shares over which a person exercises sole or shared voting or investmentpower. For purposes of the following table, a person is deemed to have beneficial ownership of any ordinary shares if such person has the right to acquire suchshares within 60 days of October 10, 2018. For purposes of computing the percentage of outstanding shares held by each person, any shares that such person hasthe right to acquire within 60 days after of October 10, 2018 are deemed to be outstanding, but are not deemed to be outstanding for the purpose of computing thepercentage ownership of any other person. Except as otherwise noted, the persons named in the table have sole voting and investment power with respect to all ofthe ordinary shares beneficially owned by them. Unless otherwise indicated, the address of each person listed is c/o Luokung Technologies, LAB 32, SOHO 3Q, No9, Guanghua Road, Chaoyang District, Beijing, People’s Republic of China.43Percentage ownership in the following table is based on 199,317,558 ordinary shares outstanding on October 10, 2018.Number ofsharesPercent ofclassDirectors and named executive officersCharm Dragon International Limited (1)4,030,8822.03%Xuesong Song, Chairman, Chief Executive Officer and Director(2)38,156,43019.30%Kegang Peng, Vice President and Director (3)17,231,9558.71%Dennis Galgano, Director75,796*%Jin Shi, DirectorJiming Ha, DirectorZhihao Xu, Director (4)7,579,1843.83%Dongpu Zhang, President (5)2,321,7921.17%Chuang Tao, Director (6)1,221,996*%Directors and executive officers as a group (10 persons)66,587,15233.69%(1)Charm Dragon International Limited is a British Virgin Islands company controlled by Mr. Xuesong Song.(2)Consists of (i) 4,030,882 shares owned directly by Charm Dragon International Limited, a British Virgin Islands company and (ii) 22,624,793 shares owneddirectly by Bravo First Development Limited, a British Virgin Islands company. Mr. Xuesong Song is the controlling shareholder of Bravo First DevelopmentLimited. Mr. Xuesong Song is the sole director of Charm Dragon International Limited.(3)Consists of 17,231,955 shares owned directly by Plenty Prestige Enterprises Limited, a British Virgin Islands company. Mr. Kegang Peng is the sole director ofPlenty Prestige Enterprises Limited.(4)Consists of 7,579,184 shares directly owned by Geely Group Limited., a Chinese company. Mr. Zhihao Xu is the Chief Executive Officer of Geely GroupLimited.(5)Consists of 2,321,792 shares owned directly by Genoa Peak Limited, a British Virgin Islands company. Mr. Dongpu Zhang controls Genoa Peak Limited.(6)Consists of 1,221,996 shares owned directly by Globalearth Holdings Limited, a British Virgin Islands company. Mr. Chuang Tao controls Globalearth HoldingsLimited.*Represents less than 1% of shares outstandingITEM 7. MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS.A. MAJOR SHAREHOLDERSPlease refer to Item 6.E “Directors, Senior Management and Employees — Share Ownership.”To our knowledge, (A) we are not directly or indirectly owned or controlled by (i) another corporation or (ii) any foreign government and (B) there are noarrangements (including any announced or expected takeover bid), the operation of which may at a subsequent date result in a change in our control.The voting rights of our major shareholders do not differ from the voting rights of other holders of the same class of shares.44B. RELATED PARTY TRANSACTIONS. BUSINESS RELATIONSHIPS.Our subsidiaries, consolidated affiliated entities, and the subsidiaries of the consolidated affiliated entities have engaged, during the ordinary course ofbusiness, in a number of customary transactions with each other. All of these intercompany balances have been eliminated in consolidation.As of December 31, 2017, we had amounts due from related parties, C Media Limited and Ya Tuo Ji International Consultancy (Beijing) Limited, in theamounts of $11.8 million and $0.2 million, respectively. These amounts due from related parties are short term in nature, noninterest bearing, unsecured andrepayable on demand.As of December 31, 2017, we had amounts due to related parties, Mr. Xuesong Song, our chairman and chief executive officer, Thumb Beijing Branch andThumb Shenzhen Branch, in the amounts of $2.9 million, $0.6 million and $0.03 million, respectively. These amounts due to related parties are short term in nature,noninterest bearing, unsecured and payable on demand.We are party to a series of control agreements with Beijing Zhong Chuan Shi Xun. In addition, our chief executive officer, Mr. Xuesong Song, serves as andofficer of Beijing Zhong Chuan Shi Xun and is a shareholder of Beijing Zhong Chuan Shi Xun. The following table sets forth the relationship of Mr. Song withBeijing Zhong Chuan Shi Xun:NameRelationship withLuokung TechnologyRelationship withBeijing Zhong Chuan Shi XunPercentageOwnership Interest inBeijing Zhong Chuan Shi XunXuesong SongChief Executive OfficerChief Executive Officer61.83%C. INTERESTS OF EXPERTS AND COUNSEL.None.ITEM 8. FINANCIAL INFORMATION.A. CONSOLIDATED STATEMENTS AND OTHER FINANCIAL INFORMATION.See “Item 18. Financial Statements.”Legal ProceedingsTo our knowledge, other than as described below there are no material legal proceedings threatened against us. From time to time, we may be subject tovarious claims and legal actions arising in the ordinary course of business. Following the consummation of the AEA, we became successor in interest to the legalproceedings described below.Litigation with Shanghai Fusheng Weier Intelligent Control Technology Co., Ltd.On January 22, 2016, Zhong Chuan Rui You and Shanghai Fusheng Weier Intelligent Control Technology Co., Ltd. (“Fusheng Weier”) signed a contract forequipment of $1,652,842 (RMB10,800,000). Since Zhong Chuan Rui You did not make the payments of $1,126,381 (RMB7,360,000) on the due dates, Fusheng Weierfiled a lawsuit against Zhong Chuan Rui You in Shanghai Xuhui District People's Court on October 8, 2016. On March 9, 2017, Xuhui District People's Court issuedthe verdict requiring Zhong Chuan Rui You to pay the overdue debts. In August 2017, C Media Limited made the payment of $512,075 (RMB3,346,000). Theremaining balance has been accrued in accounts payable. The payment schedule for the remaining balance is being negotiated by the two parties. On February 5,2018, a hearing was held adding Zhong Chuan Shi Xun as a defendant. The Group plans to settle the remaining balance within one year.45Lawsuit with Gansu Jinlun Culture Media Co., Ltd.On August 22, 2014, Zhong Chuan Rui You and Gansu Jinlun Culture Media Co., Ltd. (“Gansu Jinlun”) signed a “Lanzhou Railway Bureau AirconditionedTrain WiFi Network System Advertising Operation Rights Agreement” for advertising on 72 trains of $1,467,880 (RMB9,604,633). Due to the dispute on theproject implementation, Zhong Chuan Rui You did not pay the advertising fee. On August 23, 2017, Gansu Jinlun filed a lawsuit with Gansu Intermediate People'sCourt. On December 19, 2017, Gansu Intermediate People's Court issued a verdict, ruling that Zhong Chuan Rui You settle the overdue advertising fee. Since only 18out of 72 trains have been installed with Wifi network system, Zhong Chuan Rui You disputed and appealed to the verdict. The next court trial date has not yet beendetermined. C Media and Gansu Jinlun are negotiating a potential settlement to resume the contract. According to the legal counsel, it is probable that the settlementwill amount to approximately $459,000 (RMB3,000,000); therefore, this amount has been accrued in accounts payable as at December 31, 2017.Litigation with Shenzhen Hua Xun Fang Zhou Technology Co., Ltd.On June 16, 2015, Zhong Chuan Rui You signed a cooperation agreement with Shenzhen Hua Xun Fang Zhou Technology Co., Ltd. (“Shenzhen Hua Xun”)and Xuesong Song, a major shareholder of C Media Limited. Pursuant to this agreement, Zhong Chuan Rui You procures equipment from Shenzhen Hua Xun.Xuesong Song acts as a joint liability guarantor for the entire debts of Zhong Chuan Rui You under this agreement. As Zhong Chuan Rui You did not make thepayments on the due dates, Shenzhen Hua Xun filed a lawsuit with Shenzhen Baoan District People's Court on May 31, 2016. On November 1, 2016, Zhong ChuanRui You, Xuesong Song and Shenzhen Hua Xun reached a settlement in Shenzhen Baoan District People's Court to settle $1,735,389 (RMB11,355,000) in fourinstalments. On December 30, 2017, the debt was assigned to C Media Limited.Dividend PolicyWe currently intend to retain all of our available funds and future earnings for use in the operation and expansion of our business and do not anticipatepaying cash dividends in the foreseeable future. Under the terms of our Amended and Restated Memorandum and Articles of Association the declaration andpayment of any dividends in the future will be determined by our board of directors, in its discretion, and will depend on a number of factors, including our earnings,capital requirements and overall financial condition and our ability to receive dividends from our subsidiaries. If we pay any dividends, we will pay our ADS holders’dividends with respect to their underlying shares to the same extent as holders of our ordinary shares, subject to the terms of the deposit agreement, including thefees and expenses payable thereunder. Cash dividends on our ordinary shares, if any, will be paid in U.S. dollars.Our ability to receive dividends from our subsidiaries may limit our ability to pay dividends on our ordinary shares. See Risk Factors – Risks Related toDoing Business in China – Our holding company structure may limit the payment of dividends” and “Item 10. Additional Information – D. Exchange Controls –Dividend Distribution”.B. SIGNIFICANT CHANGES.N/AITEM 9. THE OFFER AND LISTINGA. OFFER AND LISTING DETAILS.Markets and Share Price HistoryOur ordinary shares are not currently listed on any trading market. Our American Depository Shares (“ADSs”) were voluntarily delisted from the NASDAQCapital Market on September 19, 2018. We have applied to NASDAQ for the listing of our ordinary shares on the NASDAQ Capital Market and received an approvalfor listing of Ordinary Shares on August 6, 2018, and as of the date of this transition report, that application and approval are currently under review.46The table below sets forth the high and low reported sales prices in dollars of our ordinary shares, which are represented by ADSs, as reported byNASDAQ in the periods as indicated:ADSHighLowAnnual Highs and Lows (as of the fiscal year end 09/30 for the five most recent full financial years)*20175.592.67201610.21.62Quarterly Highs and Lows (for the two most recent full financial years and any subsequent period, based on calendarquarter end)*2018Third Quarter8.006.30Second Quarter8.824.25First Quarter6.403.702017Fourth Quarter5.592.91Third Quarter3.992.67Second Quarter4.063.07First Quarter5.152.832016Fourth Quarter6.594.20Third Quarter10.201.62Second Quarter3.101.97First Quarter3.602.12Monthly Highs and Lows (for the most recent six months)September 20188.006.41August 20187.706.63July 20187.506.30June 20188.827.55May 20187.805.92April 20187.454.25*The Company effected a 1for10 reverse stock split of its ordinary shares on November 6, 2012 (the “Reverse Split”). The ratio between each AmericanDepositary Share (“ADS”) and its underlying ordinary share postReverse Split remains the same, namely, one ADR remains to represent one ordinary sharepost the Reverse Split. The price listed here after November 6, 2012 reflected the effect from the Reverse Split.B. PLAN OF DISTRIBUTION.Not Applicable.C. MARKETS.Our ordinary shares are not currently listed on any trading market. Our ADSs were voluntarily delisted from the NASDAQ Capital Market on September 19,2018. We have applied to NASDAQ for the listing of our ordinary shares on the NASDAQ Capital Market and received an approval for listing of Ordinary Shares onAugust 6, 2018, and as of the date of this transition report, that application and approval are currently under review.47D. SELLING SHAREHOLDERS.Not applicable.E. DILUTION.Not applicable.F. EXPENSES OF THE ISSUE.Not applicable.ITEM 10. ADDITIONAL INFORMATION.A. SHARE CAPITALNot applicable.B. MEMORANDUM AND ARTICLES OF ASSOCIATIONWe are a British Virgin Islands company incorporated with limited liability and our affairs are governed by the provisions of our memorandum of associationand articles of association, as amended and restated from time to time, and by the provisions of applicable British Virgin Islands law.Our memorandum of association and articles of association authorize the issuance of up to 251,000,000 shares, which are designated into (i) 250,000,000 ofordinary shares of the Company (“Ordinary Shares”), and (ii) 1,000,000 preferred shares of the Company (“Preferred Shares”), in each case with the rights,preferences and privileges as set out in the memorandum and articles of association of the Company.Please see below for a description of our ADSs under “Item 12. Description of Securities Other Than Equity Securities – D. American Depository Shares.”The following is a summary of the material provisions of our ordinary shares and our memorandum of association and articles of association.Ordinary SharesAll of our issued and outstanding ordinary shares are fully paid and nonassessable. Holders of our ordinary shares who are nonresidents of the BritishVirgin Islands may freely hold and vote their shares.Subject to the memorandum and articles of association (and, for greater clarity, without prejudice to any special rights conferred thereby on the holders ofany other shares), an Ordinary Share of the Company confers on the holder:(a)the right to one vote per Ordinary Share at a meeting of the members or on any resolution of members;(b)the right to an equal share in any distribution paid by the Company; and(c)the right to an equal share in the distribution of the surplus assets of the Company on a winding up;48Subject to the memorandum and articles of association (and, for greater clarity, without prejudice to any special rights conferred thereby on the holders ofany other shares), a Preferred Share of the Company confers on the holder:(a)the right to 399 votes per Preferred Share at a meeting of the members or on any resolution of members;(b)the right to an equal share in any distribution paid by the Company;(c)the right to an equal share in the distribution of the surplus assets of the Company on a winding up;(d)be freely transferable, in whole or in part, by Mr. Xuesong Song to any third party through one or more Private Transactions, subject toApplicable Law; and(e)be freely transferable, in whole or in part, by Mr. Xuesong Song to any third party through one or more Public Transactions, subject to ApplicableLaw and Automatic Conversion of such Preferred Share(s) into Ordinary Share(s).Each Preferred Share shall be automatically converted at any time after issue and without the payment of any additional sum into an equal number of fullypaid Ordinary Shares upon the conclusion of any transfer by Mr. Xuesong Song to any third party through one or more Public Transactions.Limitation on Liability and Indemnification MattersUnder British Virgin Islands law, each of our directors and officers, in performing his or her functions, is required to act honestly and in good faith with aview to our best interests and exercise the care, diligence and skill that a reasonably prudent person would exercise in comparable circumstances. Our memorandumof association and articles of association provide that, to the fullest extent permitted by British Virgin Islands law or any other applicable laws, our directors will notbe personally liable to us or our shareholders for any acts or omissions in the performance of their duties. Such limitation of liability does not affect the availabilityof equitable remedies such as injunctive relief or rescission. These provisions will not limit the liability of directors under United States federal securities laws.We may indemnify any of our directors or anyone serving at our request as a director of another entity against all expenses, including legal fees, andagainst all judgments, fines and amounts paid in settlement and reasonably incurred in connection with legal, administrative or investigative proceedings. We mayonly indemnify a director if he or she acted honestly and in good faith with the view to our best interests and, in the case of criminal proceedings, the director hadno reasonable cause to believe that his or her conduct was unlawful. The decision of our board of directors as to whether the director acted honestly and in goodfaith with a view to our best interests and as to whether the director had no reasonable cause to believe that his or her conduct was unlawful, is in the absence offraud sufficient for the purposes of indemnification, unless a question of law is involved. The termination of any proceedings by any judgment, order, settlement,conviction or the entry of no plea does not, by itself, create a presumption that a director did not act honestly and in good faith and with a view to our best interestsor that the director had reasonable cause to believe that his or her conduct was unlawful. If a director to be indemnified has been successful in defense of anyproceedings referred to above, the director is entitled to be indemnified against all expenses, including legal fees, and against all judgments, fines and amounts paidin settlement and reasonably incurred by the director or officer in connection with the proceedings.We may purchase and maintain insurance in relation to any of our directors or officers against any liability asserted against the directors or officers andincurred by the directors or officers in that capacity, whether or not we have or would have had the power to indemnify the directors or officers against the liabilityas provided in our memorandum of association and articles of association.Insofar as indemnification for liabilities arising under the Securities Act may be permitted for our directors or officers under the foregoing provisions, wehave been informed that in the opinion of the Securities and Exchange Commission, such indemnification is against public policy as expressed in the Securities Actand is therefore unenforceable as a matter of United States law.49Differences in Corporate LawWe were incorporated under, and are governed by, the laws of the British Virgin Islands. The corporate statutes of the State of Delaware and the BritishVirgin Islands are similar, and the flexibility available under British Virgin Islands law has enabled us to adopt memorandum of association and articles of associationthat will provide shareholders with rights that do not vary in any material respect from those they would enjoy if we were incorporated under the Delaware GeneralCorporation Law, or Delaware corporate law. Set forth below is a summary of some of the differences between provisions of the BVI Act applicable to us and thelaws application to companies incorporated in Delaware and their shareholders.Director’s Fiduciary DutiesUnder Delaware corporate law, a director of a Delaware corporation has a fiduciary duty to the corporation and its stockholders. This duty has twocomponents: the duty of care and the duty of loyalty. The duty of care requires that a director act in good faith, with the care that an ordinarily prudent personwould exercise under similar circumstances. Under this duty, a director must inform himself of, and disclose to stockholders, all material information reasonablyavailable regarding a significant transaction. The duty of loyalty requires that a director act in a manner he reasonably believes to be in the best interests of thecorporation. He must not use his corporate position for personal gain or advantage. This duty prohibits selfdealing by a director and mandates that the bestinterest of the corporation and its stockholders take precedence over any interest possessed by a director, officer or controlling stockholder and not shared by thestockholders generally. In general, actions of a director are presumed to have been made on an informed basis, in good faith and in the honest belief that the actiontaken was in the best interests of the corporation. However, this presumption may be rebutted by evidence of a breach of one of the fiduciary duties. Should suchevidence be presented concerning a transaction by a director, a director must prove the procedural fairness of the transaction, and that the transaction was of fairvalue to the corporation.British Virgin Islands law provides that every director of a British Virgin Islands company in exercising his powers or performing his duties shall acthonestly and in good faith and in what the director believes to be in the best interests of the company. Additionally, the director shall exercise the care, diligence andskill that a reasonable director would exercise in the same circumstances taking into account the nature of the company, the nature of the decision and the positionof the director and his responsibilities. In addition, British Virgin Islands law provides that a director shall exercise his powers as a director for a proper purpose andshall not act, or agree to the company acting, in a manner that contravenes British Virgin Islands law or the memorandum association or articles of association of thecompany.Amendment of Governing DocumentsUnder Delaware corporate law, with very limited exceptions, a vote of the stockholders is required to amend the certificate of incorporation. Under BritishVirgin Islands law and our memorandum of association and articles of association, (i) our shareholders may amend our memorandum of association and articles ofassociation by a resolution of shareholders, or (ii) our board of directors may amend our memorandum of association and articles of association by a resolution ofdirectors without a requirement for a resolution of shareholders so long as the amendment does not:●restrict the rights of the shareholders to amend the memorandum of association and articles of association;●change the percentage of shareholders required to pass a resolution of shareholders to amend the memorandum of association and articles ofassociation;●amend the memorandum of association and articles of association in circumstances where the memorandum of association and articles ofassociation cannot be amended by the shareholders; or●amend the provisions of memorandum of association or the articles of association pertaining to “rights attaching to shares,” “rights not varied bythe issue of the shares pari passu,” “variation of rights” and “amendment of memorandum and articles”.50Written Consent of DirectorsUnder Delaware corporate law, directors may act by written consent only on the basis of a unanimous vote. Under British Virgin Islands law, directors’consents need only a majority of directors signing to take effect.Written Consent of ShareholdersUnder Delaware corporate law, unless otherwise provided in the certificate of incorporation, any action to be taken at any annual or special meeting ofstockholders of a corporation, may be taken by written consent of the holders of outstanding stock having not less than the minimum number of votes that wouldbe necessary to take such action at a meeting. As permitted by British Virgin Islands law, shareholders’ consents need only a majority of shareholders signing totake effect. Our memorandum of association and articles of association provide that shareholders may approve corporate matters by way of a resolution consentedto at a meeting of shareholders or in writing by a majority of shareholders entitled to vote thereon.Shareholder ProposalsUnder Delaware corporate law, a shareholder has the right to put any proposal before the annual meeting of shareholders, provided it complies with thenotice provisions in the governing documents. A special meeting may be called by the board of directors or any other person authorized to do so in the governingdocuments, but shareholders may be precluded from calling special meetings. British Virgin Islands law and our memorandum of association and articles ofassociation provide that our directors shall call a meeting of the shareholders if requested in writing to do so by shareholders entitled to exercise at least 30% of thevoting rights in respect of the matter for which the meeting is requested.Sale of AssetsUnder Delaware corporate law, a vote of the stockholders is required to approve the sale of assets only when all or substantially all assets are being sold. Inthe British Virgin Islands, shareholder approval is required when more than 50% of the company’s total assets by value are being disposed of or sold.Dissolution; Winding UpUnder Delaware corporate law, unless the board of directors approves the proposal to dissolve, dissolution must be approved by shareholders holding100% of the total voting power of the corporation. Only if the dissolution is initiated by the board of directors may it be approved by a simple majority of thecorporation’s outstanding shares. Delaware corporate law allows a Delaware corporation to include in its certificate of incorporation a supermajority votingrequirement in connection with dissolutions initiated by the board. As permitted by British Virgin Islands law and our memorandum of association and articles ofassociation, we may be voluntarily liquidated under Part XII of the BVI Act by resolution of directors and resolution of shareholders if we have no liabilities and weare able to pay our debts as they fall due.Redemption of SharesUnder Delaware corporate law, any stock may be made subject to redemption by the corporation at its option or at the option of the holders of such stockprovided there remains outstanding shares with full voting power. Such stock may be made redeemable for cash, property or rights, as specified in the certificate ofincorporation or in the resolution of the board of directors providing for the issue of such stock. As permitted by British Virgin Islands law, and our memorandum ofassociation and articles of association, shares may be repurchased, redeemed or otherwise acquired by us. Our directors must determine that immediately followingthe redemption or repurchase we will be able to satisfy our debts as they fall due and the value of our assets exceeds our liabilities.51Variation of Rights of SharesUnder Delaware corporate law, a corporation may vary the rights of a class of shares with the approval of a majority of the outstanding shares of suchclass, unless the certificate of incorporation provides otherwise. As permitted by British Virgin Islands law, and our memorandum of association and articles ofassociation, if our share capital is divided into more than one class of shares, we may vary the rights attached to any class only with the consent in writing ofholders of not less than threefourths of the issued shares of that class and holders of not less than threefourths of the issued shares of any other class of shareswhich may be affected by the variation.Removal of DirectorsUnder Delaware corporate law, a director of a corporation with a classified board may be removed only for cause with the approval of a majority of theoutstanding shares entitled to vote, unless the certificate provides otherwise. As permitted by British Virgin Islands law and our memorandum of association andarticles of association, directors may be removed by resolution of directors or resolution of shareholders.MergersUnder the BVI Act, two or more companies may merge or consolidate in accordance with the statutory provisions. A merger means the merging of two ormore constituent companies into one of the constituent companies, and a consolidation means the uniting of two or more constituent companies into a newcompany. In order to merger or consolidate, the directors of each constituent company must approve a written plan of merger or consolidation which must beauthorized by a resolution of shareholders.Shareholders not otherwise entitled to vote on the merger or consolidation may still acquire the right to vote if the plan of merger or consolidation containsany provision which, if proposed as an amendment to the memorandum association or articles of association, would entitle them to vote as a class or series on theproposed amendment. In any event, all shareholders must be given a copy of the plan of merger or consolidation irrespective of whether they are entitled to vote atthe meeting or consent to the written resolution to approve the plan of merger or consolidation.Inspection of Books and RecordsUnder Delaware corporate law, any shareholder of a corporation may for any proper purpose inspect or make copies of the corporation’s stock ledger, list ofshareholders and other books and records. Holders of our shares have no general right under British Virgin Islands law to inspect or obtain copies of our list ofshareholders or our corporate records. However, we will provide holders of our shares with annual audited financial statements. See “Where You Can FindAdditional Information.”Conflict of InterestThe BVI Act provides that a director shall, after becoming aware that he is interested in a transaction entered into or to be entered into by the company,disclose that interest to the board of directors of the company. The failure of a director to disclose that interest does not affect the validity of a transaction enteredinto by the director or the company, so long as the director’s interest was disclosed to the board prior to the company’s entry into the transaction or was notrequired to be disclosed (for example where the transaction is between the company and the director himself or is otherwise in the ordinary course of business andon usual terms and conditions). As permitted by British Virgin Islands law and our memorandum of association and articles of association, a director interested in aparticular transaction may vote on it, attend meetings at which it is considered, and sign documents on our behalf which relate to the transaction.52Transactions with Interested ShareholdersDelaware corporate law contains a business combination statute applicable to Delaware public corporations whereby, unless the corporation hasspecifically elected not to be governed by such statute by amendment to its certificate of incorporation, it is prohibited from engaging in certain businesscombinations with an “interested shareholder” for three years following the date that such person becomes an interested shareholder. An interested shareholdergenerally is a person or group who or that owns or owned 15% or more of the target’s outstanding voting stock within the past three years. This has the effect oflimiting the ability of a potential acquirer to make a twotiered bid for the target in which all shareholders would not be treated equally. The statute does not apply if,among other things, prior to the date on which such shareholder becomes an interested shareholder, the board of directors approves either the businesscombination or the transaction that resulted in the person becoming an interested shareholder. This encourages any potential acquirer of a Delaware publiccorporation to negotiate the terms of any acquisition transaction with the target’s board of directors.British Virgin Islands law has no comparable provision. As a result, we cannot avail ourselves of the types of protections afforded by the Delawarebusiness combination statute. However, although British Virgin Islands law does not regulate transactions between a company and its significant shareholders, itdoes provide that such transactions must be entered into bona fide in the best interests of the company and not with the effect of constituting a fraud on theminority shareholders.Independent DirectorsThere are no provisions under Delaware corporate law or under the BVI Act that require a majority of our directors to be independent.Cumulative VotingUnder Delaware corporate law, cumulative voting for elections of directors is not permitted unless the company’s certificate of incorporation specificallyprovides for it. Cumulative voting potentially facilitates the representation of minority shareholders on a board of directors since it permits the minority shareholderto cast all the votes to which the shareholder is entitled on a single director, which increases the shareholder’s voting power with respect to electing such director.There are no prohibitions to cumulative voting under the laws of the British Virgin Islands, but our memorandum of association and articles of association do notprovide for cumulative votingAntitakeover Provisions in Our Memorandum of association and articles of associationSome provisions of our memorandum of association and articles of association may discourage, delay or prevent a change in control of our company ormanagement that shareholders may consider favorable, including provisions that authorize our board of directors to issue preference shares in one or more seriesand to designate the price, rights, preferences, privileges and restrictions of such preference shares.C. MATERIAL CONTRACTS.On January 25, 2018, the Company executed an Asset Exchange Agreement (“AEA”) with C Media Limited, a corporation organized under the laws of theCayman Islands (“C Media”), whereby the Company agreed to purchase all the capital stock and equity interests of LK Technology Ltd, together with its whollyowned subsidiaries MMB Limited and Mobile Media (China) Limited and all respective subsidiaries from C Media in exchange for (i) 185,412,599 ordinary shares ofthe Company, par value $0.01 per share (“Ordinary Shares”), (ii) 1,000,000 preferred shares of Kingtone (“Preferred Shares”) and (iii) all issued and outstandingcapital stock or equity interests of the Company’s subsidiary, Topsky InfoTech Holdings Pte Ltd., and its whollyowned subsidiary Xi’an Softech Co., Ltd.,including all entities effectively controlled by Xi’an Softech Co., Ltd. through contractual arrangements and variable business entities.To consummate the contemplated transactions described above, the Company obtained shareholder consent at a special meeting held on May 20, 2018, (i)to authorize 1,000,000 Preferred Shares, (ii) to authorize additional Ordinary Shares so that total authorized Ordinary Shares is equal to 250,000,000 shares, (iii) to listsuch Ordinary Shares on NASDAQ, and (iv) to approve the transactions contemplated in the Asset Exchange Agreement. Additionally, NASDAQ needed toapprove the contemplated transactions prior to consummation thereof. C Media had the right to terminate the AEA if the closing had not occurred (other thanthrough the failure of C Media to comply fully with its obligations under the AEA) on or before July 31, 2018. The transactions contemplated by the AEA wereconsummated on August 17, 2018.53On January 25, 2018, five shareholders of the Company including its largest shareholder and its Chief Executive Officer executed a Securities PurchaseAgreement, whereby such shareholders agreed to sell a total of 617,988 Ordinary Shares and 282,694 American Depository Shares of the Company to Redstone YYLManagement Limited, a company incorporated in the British Virgin Islands, in exchange for an aggregate purchase price of $1,897,860.09.On August 25, 2018, LK Technology entered into a Stock Purchase Agreement (the “Agreement”) with the shareholders (“Shareholders”) of SuperengineHoldings Limited, a limited liability company organized under the laws of the British Virgin Islands (the “Superengine”), pursuant to which LK Technology acquiredall of the issued and outstanding capital stock of Superengine for an aggregate purchase price of US$60 million (the “Purchase Price”), which are paid by theissuance of our Ordinary Shares in an amount equal to the quotient of (x) the Purchase Price divided by (y) the average of the closing prices of the Ordinary Shareson the NASDAQ Capital Market over the 12 months period preceding July 31, 2018. We are a party to the Agreement in connection with the issuance of theOrdinary Shares and certain other limited purposes.D. EXCHANGE CONTROLS.This section sets forth a summary of the most significant regulations or requirements that affect our business activities in China or our shareholders’ rightto receive dividends and other distributions from us.Regulations on Internet Content ProvidersThe Administrative Measures on Internet Information Services, or the Internet Content Measures, which was promulgated by the State Council onSeptember 25, 2000 and amended on January 8, 2011, set out guidelines on the provision of internet information services. The Internet Content Measures specifiesthat internet information services regarding news, publications, education, medical and health care, pharmacy and medical appliances, among other things, arerequired to be examined, approved and regulated by the relevant authorities. Internet information providers are prohibited from providing services beyond thoseincluded in the scope of their licenses or filings. Furthermore, the Internet Content Measures specifies a list of prohibited content. Internet information providers areprohibited from producing, copying, publishing or distributing information that is humiliating or defamatory to others or that infringes the legal rights of others.Internet information providers that violate such prohibition may face criminal charges or administrative sanctions. Internet information providers must monitor andcontrol the information posted on their websites. If any prohibited content is found, they must remove the content immediately, keep a record of such content andreport to the relevant authorities.The Internet Content Measures classifies internet information services into commercial internet information services and noncommercial internetinformation services. Commercial internet information services refer to services that provide information or services to internet users with charge. A provider ofcommercial internet information services must obtain an ICP License.Regulations on Internet Audiovideo Program ServicesOn December 20, 2007, the MII and the State Administration of Press, Publication, Radio, Film and Television, or the SAPPRFT, jointly issued theAdministrative Provisions for the Internet AudioVideo Program Service, or the Audiovideo Program Provisions, which came into effect on January 31, 2008 andwas amended on August 28, 2015. The Audiovideo Program Provisions defines “internet audiovideo program services” as producing, editing and integrating ofaudiovideo programs, supplying audiovideo programs to the public via the internet, and providing audiovideo programs uploading and transmission services to athird party. Entities providing internet audiovideo programs services must obtain an internet audiovideo program transmission license. Applicants for such licensesshall be stateowned or statecontrolled entities unless an internet audiovideo program transmission license has been obtained prior to the effectiveness of theAudiovideo Program Provisions in accordance with the thenineffect laws and regulations. In addition, foreigninvested enterprises are not allowed to engage inthe abovementioned services. According to the Audiovideo Program Provisions and other relevant laws and regulations, audiovideo programs provided by theentities supplying Internet audiovideo program services shall not contain any illegal content or other content prohibited by the laws and regulations, such as anycontent against the basic principles in the PRC Constitution, any content that damages the sovereignty of the country or national security, and any content thatdisturbs social order or undermine social stability. An audiovideo program that has already been broadcast shall be retained in full for at least 60 days. Movies,television programs and other media content used as Internet audiovideo programs shall comply with relevant administrative regulations on programs broadcaststhrough radio, movie and television channels. Entities providing services related to Internet audiovideo programs shall immediately delete the audiovideoprograms violating laws and regulations, keep relevant records, report relevant authorities and implement other regulatory requirements.54The Categories of the Internet AudioVideo Program Services, or the Audiovideo Program Categories, promulgated by SAPPRFT on March 10, 2017,classifies internet audio/video programs into four categories: (I) Category I internet audio/video program service, which is carried out with a form of radio station ortelevision station; (II) Category II internet audio/video program service, including (a) rebroadcasting service of current political news audio/video programs; (b)hosting, interviewing, reporting and commenting service of arts, entertainment, technology, finance and economics, sports, education and other specializedaudio/video programs; (c) producing (interviewing not included) and broadcasting service of arts, entertainment, technology, finance and economics, sports,education and other specialized audio/video programs; (d) producing and broadcasting service of internet films/dramas; (e) aggregating and broadcasting service offilms, television dramas and cartoons; (f) aggregating and broadcasting service of arts, entertainment, technology, finance and economics, sports, education andother specialized audio/video programs; and (g) live audio/video broadcasting service of cultural activities of common social organizations, sport events or otherorganization activities; and (III) Category III internet audio/video program service, including (a) aggregating service of online audio/video contents, and (b) rebroadcasting service of the audio/video programs uploaded by internet users; and (IV) Category III internet audio/video program service, including (a) rebroadcasting of the radio/television program channels; and (b) rebroadcasting of internet audio/video program channels.On May 27, 2016, the SAPPRFT issued the Notice on Relevant Issues concerning Implementing the Approval Works of Upgrading Mobile Internet AudioVideo Program Service, or the Mobile AudioVideo Program Notice. The Mobile AudioVideo Program Notice provides that the mobile Internet audiovideo programservices shall be deemed Internet audiovideo program service. Entities which have obtained the approvals to provide the Internet audiovideo program servicesmay use mobile WAP websites or mobile applications to provide audiovideo program services. Entities with regulatory approvals may operate mobile applicationsto provide the audiovideo program services The types of the programs shall be within the permitted scope as provided in the licenses and such mobile applicationsshall be filed with the SAPPRFT.Regulations on Production and Operation of Radio/Television ProgramsOn July 19, 2004, the SAPPRFT promulgated the Administrative Measures on the Production and Operation of Radio and Television Programs, or the Radioand Television Program Production Measures, which came into effect on August 20, 2004 and was amended on August 28, 2015. The Radio and Television ProgramProduction Measures provides that any business that produces or operates radio or television programs must first obtain a Radio and Television ProgramProduction and Operation Permit. Entities holding such permits shall conduct their business within the permitted scope as provided in their permits. In addition,foreigninvested enterprises are not allowed to engage in the abovementioned services.Regulations on Online Advertising ServicesOn April 24, 2015, the Standing Committee of the National People’s Congress enacted the Advertising Law of the People’s Republic of China, or the NewAdvertising Law, effective on September 1, 2015. The New Advertising Law increases the potential legal liability of advertising services providers and strengthensregulations of false advertising. On July 4, 2016, the State Administration for Industry and Commerce, or the SAIC, issued the Interim Measures of theAdministration of Online Advertising, or the SAIC Interim Measures, effective on September 1, 2016. The New Advertising Law and the SAIC Interim Measuresrequire that online advertisements may not affect users’ normal internet use and internet popup ads must display a “close” sign prominently and ensure onekeyclosing of the popup windows. The SAIC Interim Measures provides that all online advertisements must be marked “Advertisement” so that viewers can easilyidentify them as such. Moreover, the SAIC Interim Measures treats paid search results as advertisements that are subject to PRC advertisement laws, and requiresthat paid search results be conspicuously identified on search result pages as advertisements. The New Advertising Law and SAIC Interim Measures require us toconduct more stringent examination and monitoring of our advertisers and the content of their advertisements.55Regulations on Online GamesIn September 2009, the GAPP (currently known as the SAPPRFT), together with the National Copyright Administration, and the National Office ofCombating Pornography and Illegal Publications jointly issued the Notice on Further Strengthening on the Administration of Preexamination and Approval ofOnline Game and the Examination and Approval of Imported Online Game, or the Circular 13. The Circular 13 states that foreign investors are not permitted to investin online game operating businesses in the PRC via wholly foreignowned entities, Sinoforeign equity joint ventures or cooperative joint ventures or to exercisecontrol over or participate in the operation of domestic online game businesses through indirect means, such as other joint venture companies or contractual ortechnical arrangements. If the our contractual arrangements were deemed under the Circular 13 to be an “indirect means” for foreign investors to exercise controlover or participate in the operation of a domestic online game business, our contractual arrangements might be challenged by the SAPPRFT. We are not aware ofany online game companies which use the same or similar contractual arrangements having been challenged by the SAPPRFT as using those contractualarrangements as an “indirect means” for foreign investors to exercise control over or participate in the operation of a domestic online game business or having beenpenalized or ordered to terminate operations since the Circular 13 became effective. However it is unclear whether and how the Circular 13 might be interpreted orimplemented in the future. See “Risk Factors—If the PRC government finds that the agreements that establish the structure for operating certain of our operations inChina do not comply with PRC regulations relating to the relevant industries, or if these regulations or the interpretation of existing regulations change in the future,we could be subject to severe penalties or be forced to relinquish our interests in those operations.”The Interim Measures for the Administration of Online Games, or the Online Game Measures, issued by the MOC, which took effect on August 1, 2010 andamended on December 15, 2017, regulates a broad range of activities related to the online games business, including the development, production and operation ofonline games, the issuance of virtual currencies used for online games, and the provision of virtual currency trading services. The Online Game Measures providesthat any entity that is engaged in online game operations must obtain an Network Cultural Business Permit, and require the content of an imported online game to beexamined and approved by the MOC prior to the game’s launch and require a domestic online game to be filed with the MOC within 30 days after its launch. TheNotice of the Ministry of Culture on the Implementation of the Interim Measures for the Administration of Online Games, which was issued by the MOC on July 29,2010 to implement the Online Game Measures, (i) requires online game operators to protect the interests of online game users and specifies that certain terms thatmust be included in service agreements between online game operators and the users of their online games, (ii) requires content review of imported online gamesand filing procedures for domestic online games, (iii) emphasizes the protection of minors playing online games, and (iv) requests online game operators to promoterealname registration by their game users.Regulations on Information Security, Censorship and PrivacyThe Standing Committee of the National People’s Congress, China’s national legislative body, enacted the Decisions on the Maintenance of InternetSecurity on December 28, 2000 that may subject persons to criminal liabilities in China for any attempt to use the internet to: (i) gain improper entry to a computer orsystem of strategic importance; (ii) disseminate politically disruptive information; (iii) leak state secrets; (iv) spread false commercial information or (v) infringe uponintellectual property rights. In 1997, the Ministry of Public Security issued the Administration Measures on the Security Protection of Computer InformationNetwork with International Connections which prohibits using the internet to leak state secrets or to spread socially destabilizing materials. If an ICP license holderviolates these measures, the PRC government may revoke its ICP license and shut down its websites. Pursuant to the Ninth Amendment to the Criminal Law issuedby the Standing Committee of the National People’s Congress on August 29, 2015, effective on November 1, 2015, any ICP provider that fails to fulfill the obligationsrelated to internet information security as required by applicable laws and refuses to take corrective measures, will be subject to criminal liability for (i) any largescale dissemination of illegal information; (ii) any severe effect due to the leakage of users’ personal information; (iii) any serious loss of evidence of criminalactivities; or (iv) other severe situations, and any individual or entity that (i) sells or provides personal information to others unlawfully or (ii) steals or illegallyobtains any personal information will be subject to criminal liability in severe situations.56The Cybersecurity Law of the PRC, or the Cybersecurity Law, which was promulgated on November 7, 2016 by the Standing Committee of the NationalPeople’s Congress and came into effect on June 1, 2017, provides that network operators shall meet their cyber security obligations and shall take technicalmeasures and other necessary measures to protect the safety and stability of their networks. Under the Cybersecurity Law, network operators are subject to varioussecurity protectionrelated obligations, including: (i) network operators shall comply with certain obligations regarding maintenance of the security of internetsystems; (ii) network operators shall verify users’ identities before signing agreements or providing certain services such as information publishing or realtimecommunication services; (iii) when collecting or using personal information, network operators shall clearly indicate the purposes, methods and scope of theinformation collection, the use of information collection, and obtain the consent of those from whom the information is collected; (iv) network operators shall strictlypreserve the privacy of user information they collect, and establish and maintain systems to protect user privacy; (v) network operators shall strengthenmanagement of information published by users, and when they discover information prohibited by laws and regulations from publication or dissemination, theyshall immediately stop dissemination of that information, including taking measures such as deleting the information, preventing the information from spreading,saving relevant records, and reporting to the relevant governmental agencies.Regulations on Intellectual Property RightsRegulations on CopyrightThe Copyright Law of the PRC, or the Copyright Law, which took effect on June 1, 1991 and was amended in 2001 and in 2010, provides that Chinesecitizens, legal persons, or other organizations shall, whether published or not, own copyright in their copyrightable works, which include, among others, works ofliterature, art, natural science, social science, engineering technology and computer software. Copyright owners enjoy certain legal rights, including right ofpublication, right of authorship and right of reproduction. The Copyright Law as revised in 2010 extends copyright protection to Internet activities, productsdisseminated over the Internet and software products. In addition, Copyright Law provides for a voluntary registration system administered by the China CopyrightProtection Center, or the CPCC. According to the Copyright Law, an infringer of the copyrights shall be subject to various civil liabilities, which include ceasinginfringement activities, apologizing to the copyright owners and compensating the loss of copyright owner. Infringers of copyright may also subject to fines and/oradministrative or criminal liabilities in severe situations.The Computer Software Copyright Registration Measures, or the Software Copyright Measures, promulgated by the State Council on December 20, 2001and amended on January 30, 2013, regulates registrations of software copyright, exclusive licensing contracts for software copyright and assignment agreements.The National Copyright Administration, or the NCA administers software copyright registration and the CPCC, is designated as the software registration authority.The CPCC shall grant registration certificates to the Computer Software Copyrights applicants which meet the requirements of both the Software CopyrightMeasures and the Computer Software Protection Regulations (Revised in 2013).The Provisions of the Supreme People’s Court on Certain Issues Related to the Application of Law in the Trial of Civil Cases Involving Disputes onInfringement of the Information Network Dissemination Rights specifies that disseminating works, performances or audiovideo products by the internet users orthe internet service providers via the internet without the permission of the copyright owners shall be deemed to have infringed the right of dissemination of thecopyright owner.57The Measures for Administrative Protection of Copyright Related to Internet, which was jointly promulgated by the NCA and the MIIT on April 29, 2005and became effective on May 30, 2005, provides that upon receipt of an infringement notice from a legitimate copyright holder, an ICP operator must take remedialactions immediately by removing or disabling access to the infringing content. If an ICP operator knowingly transmits infringing content or fails to take remedialactions after receipt of a notice of infringement that harms public interest, the ICP operator could be subject to administrative penalties, including an order to ceaseinfringing activities, confiscation by the authorities of all income derived from the infringement activities, or payment of fines.On May 18, 2006, the State Council promulgated the Regulations on the Protection of the Right to Network Dissemination of Information (as amended in2013). Under these regulations, an owner of the network dissemination rights with respect to written works or audio or video recordings who believes thatinformation storage, search or link services provided by an Internet service provider infringe his or her rights may require that the Internet service provider delete, ordisconnect the links to, such works or recordings.Patent LawsAccording to the Patent Law of the PRC (Revised in 2008), the State Intellectual Property Office is responsible for administering patent law in the PRC. Thepatent administration departments of provincial, autonomous region or municipal governments are responsible for administering patent law within their respectivejurisdictions. The Chinese patent system adopts a firsttofile principle, which means that when more than one person file different patent applications for the sameinvention, only the person who files the application first is entitled to obtain a patent of the invention. To be patentable, an invention or a utility model must meetthree criteria: novelty, inventiveness and practicability. A patent is valid for twenty years in the case of an invention and ten years in the case of utility models anddesigns.Trademark LawsTrademarks are protected by the Trademark Law of the PRC (Revised in 2013) which was adopted in 1982 and subsequently amended in 1993, 2001 and 2013respectively as well as by the Implementation Regulations of the PRC Trademark Law adopted by the State Council in 2002 and as most recently amended on April29, 2014. The Trademark Office under the SAIC handles trademark registrations. The Trademark Office grants a tenyear term to registered trademarks and the termmay be renewed for another tenyear period upon request by the trademark owner. A trademark registrant may license its registered trademarks to another party byentering into trademark license agreements, which must be filed with the Trademark Office for its record. As with patents, the Trademark Law has adopted a firsttofile principle with respect to trademark registration. If a trademark applied for is identical or similar to another trademark which has already been registered or subjectto a preliminary examination and approval for use on the same or similar kinds of products or services, such trademark application may be rejected. Any personapplying for the registration of a trademark may not injure existing trademark rights first obtained by others, nor may any person register in advance a trademark thathas already been used by another party and has already gained a “sufficient degree of reputation” through such party’s use.Regulations on Domain NamesThe MIIT promulgated the Measures on Administration of Internet Domain Names, or the Domain Name Measures, on August 24, 2017, which took effecton November 1, 2017 and replaced the Administrative Measures on China Internet Domain Name promulgated by MII on November 5, 2004. According to theDomain Name Measures, the MIIT is in charge of the administration of PRC internet domain names. The domain name registration follows a firsttofile principle.Applicants for registration of domain names shall provide the true, accurate and complete information of their identities to domain name registration serviceinstitutions. The applicants will become the holder of such domain names upon the completion of the registration procedure.Relevant Regulations of the Hightech EnterpriseThe Ministry of Information Industry, the Ministry of Science and Technology and the State Tax Bureau collectively promulgated and issued the“Certifying Standard and Managing Measures for Hightech Enterprises” and “the Hightech Areas of Main National Support” on April 14, 2008 to certify the Hightech enterprise and encourage and support the development of the Chinese Hightech enterprises. Under the Hightech Enterprises Measures, the enterprise canenjoy the favorable tax policy when it is certified as a Hightech enterprise by the Ministry of Information Industry, the Ministry of Science and Technology and theState Tax Bureau or with its provincial branch according to the stipulated standard. The software and computer and network technology are recognized as the mainnational supported Hightech field. Kingtone Information is a Hightech enterprise and enjoys a favorable income tax rate of 15%.58Laws and Regulations of Intellectual Property RightsChina has adopted legislation governing intellectual property rights, including patents, copyrights and trademarks. China is a signatory to the maininternational conventions on intellectual property rights and became a member of the Agreement on Trade Related Aspects of Intellectual Property Rights upon itsaccession to the WTO in December 2001.PatentsThe “Patent Law of the People’s Republic of China” promulgated by the Standing Committee of the National People's Congress, adopted in 1985 andrevised in 1992, 2001 and 2008, protects registered patents. The State Intellectual Property Office of PRC handles granting patent rights, providing for a twentyyearpatent term for inventions and a tenyear patent term for utility models and designs. As we disclosed in Item 4, of this transition report on Form 20F, throughKingtone Information, we have been granted one invention patent “wireless video transmission system based on BREW platform” by the State Intellectual PropertyOffice (“SIPO”) of PRC on September 23, 2009 and therefore such invention is entitled to all the protections provided under the Patent Law for twenty years.Computer Software Copyright and AdministrationOn December 20, 2001, the State Council of PRC issued the “Regulation for Computer Software Protection of the People’s Republic of China” (the“Regulation for Computer Software Protection”) which became effective on January 1, 2002 to protect the interests of copyright owners, to promote the research andapplication and to encourage the development of the Chinese software industry. Under the Regulation for Computer Software Protection, natural persons, legalpersons or any other organizations shall have a copyright on the software developed by such persons no matter whether such software has been published. Theprotection period of software copyrights owned by the legal person or other organization is fifty years and expires on December 31 of the fiftieth year from the initialpublication date of such computer software. Currently, Kingtone Information has twelve registration certificates for software copyrights.TrademarksThe “Trademark Law of the People’s Republic of China” promulgated by the State Council of PRC, adopted in 1982 and revised in 1993 and 2001, protectsregistered trademarks. The Trademark Office under the Chinese State Administration for Industry and Commerce handles trademark registrations and grants a termof ten years to registered trademarks which are renewable for another ten years after the application to the Trademark Office by the owners of the trademarks.Trademark license agreements must be filed with the Trademark Office for record. China has a “firsttoregister” system that requires no evidence of prior use orownership. Kingtone Information has its registered trademarks as described in Item 4 of this transition report on Form 20F. Accordingly, such trademarks areentitled to the protection under the Trademark Law.Foreign Currency ExchangeOn August 29, 2008, the SAFE issued the Notice of the General Affairs Department of the State Administration of Foreign Exchange on the RelevantOperating Issues concerning the Improvement of the Administration of Payment and Settlement of Foreign Currency Capital of Foreignfunded Enterprises, orCircular 142. Pursuant to Circular 142, RMB converted from the foreign currencydenominated capital of a foreigninvested company may only be used for purposeswithin the business scope approved by the applicable governmental authority and may not be used for equity investments within the PRC unless specificallyprovided for otherwise. The use of such Renminbi capital may not be changed without SAFE’s approval and may not in any case be used to repay Renminbi loans ifthe proceeds of such loans have not been used.59See “Risk Factors — Risks Related to Doing Business in China — PRC regulation of loans and direct investment by offshore holding companies to PRCentities may delay or prevent us from using the proceeds of our initial public offering to make loans or additional capital contributions to our PRC operatingsubsidiaries, which could materially and adversely affect our liquidity and our ability to fund and expand our business”.Dividend DistributionWe are a British Virgin Islands holding company and substantially all of our operations are conducted through LK Technology. We rely on dividends andother distributions from our LK Technology and its subsidiaries to provide us with our cash flow and allow us to pay dividends on the shares underlying our ADSsand meet our other obligations. The principal regulations governing distribution of dividends paid by wholly foreignowned enterprises include:1.Wholly ForeignOwned Enterprise Law (1986), as amended; and2.Implementation Rules on Wholly ForeignOwned Enterprise Law (1990), as amended.Under these regulations, wholly foreignowned enterprises in China may pay dividends only out of their accumulated profits, if any, determined inaccordance with PRC accounting standards and regulations. In addition, wholly foreignowned enterprises in China are required to set aside at least 10% of theiraftertax profit based on PRC accounting standards each year to its general reserves until the accumulative amount of such reserves reach 50% of its registeredcapital. These reserves are not distributable as cash dividends. The board of directors of a FIE has the discretion to allocate a portion of its aftertax profits to staffwelfare and bonus funds, which may not be distributed to equity owners except in the event of liquidation.Regulation of Foreign Exchange in Certain Onshore and Offshore TransactionsIn October 2005, the SAFE issued the Notice on Issues Relating to the Administration of Foreign Exchange in Fundraising and Return InvestmentActivities of Domestic Residents Conducted via Offshore Special Purpose Companies, or SAFE Notice 75, which became effective as of November 1, 2005, and wasfurther supplemented by two implementation notices issued by the SAFE on November 24, 2005 and May 29, 2007, respectively. Under Circular 75, prior registrationwith the local SAFE branch is required for PRC residents to establish or to control an offshore company for the purposes of financing that offshore company withassets or equity interests in an onshore enterprise located in the PRC. An amendment to the registration or filing with the local SAFE branch by such PRC resident isalso required for the injection of equity interests or assets of an onshore enterprise in the offshore company or overseas funds raised by such offshore company, orany other material change with respect to the offshore company in connection with any increase or decrease of capital, transfer of shares, merger, division, equityinvestment, debt investment, or creation of any security interest over any assets located in the PRC.Under SAFE Notice 75, PRC residents are further required to repatriate into the PRC all of their dividends, profits or capital gains obtained from theirshareholdings in the offshore entity within 180 days of their receipt of such dividends, profits or capital gains. The registration and filing procedures under SAFENotice 75 are prerequisites for other approval and registration procedures necessary for capital inflow from the offshore entity, such as inbound investments orshareholders loans, or capital outflow to the offshore entity, such as the payment of profits or dividends, liquidating distributions, equity sale proceeds, or thereturn of funds upon a capital reduction. Therefore, failure to comply with such registration may subject us to certain restrictions on, including but not limited to, theincrease of the registered capital of our PRC subsidiary, making loans to our PRC subsidiary, and making distributions to us from our onshore companies.Regulations of Overseas Investments and ListingsOn August 8, 2006, six PRC regulatory agencies, including the MOFCOM, the State Assets Supervision and Administration Commission, the StateAdministration for Taxation, the State Administration for Industry and Commerce, the CSRC and the SAFE, jointly adopted the New M&A Rule, which becameeffective on September 8, 2006. This regulation, among other things, includes provisions that purport to require that an offshore SPV formed for purposes ofoverseas listing of equity interests in PRC companies and controlled directly or indirectly by PRC companies or individuals obtain the approval of the CSRC prior tothe listing and trading of such SPV’s securities on an overseas stock exchange.60On September 21, 2006, the CSRC published on its official website procedures regarding its approval of overseas listings by SPVs. The CSRC approvalprocedures require the filing of a number of documents with the CSRC and it would take several months to complete the approval process.The application of the New M&A Rule with respect to overseas listings of SPVs remains unclear with no consensus currently existing among the leadingPRC law firms regarding the scope of the applicability of the CSRC approval requirement.We believe that, based on our understanding of the current PRC laws, regulations and rules and the procedures announced on September 21, 2006, there isno requirement in this regulation that would require an application to be submitted to the MOFCOM or the CSRC for the approval of the listing and trading of ourADSs on the NASDAQ Capital Market.See “Risk Factors — Risks Related to Doing Business in China — If we were required to obtain the prior approval of the China Securities RegulatoryCommission, or CSRC, of the listing and trading of our ADSs on the NASDAQ Capital Market, we may face regulatory actions or other sanctions from the CSRC orother PRC regulatory agencies.”E. TAXATIONThe following discussion sets forth the material British Virgin Islands, PRC and U.S. federal income tax consequences of an investment in our ADSs andthe ordinary shares represented by our ADSs, sometimes referred to collectively as the “securities”. It is based upon laws and relevant interpretations thereof ineffect as of the date of this report, all of which are subject to change. This discussion does not deal with all possible tax consequences relating to an investment inthe securities, such as the tax consequences under state, local and other tax laws. As used in this discussion, “we,” “our” and “us” refers only to LuokungTechnology Ltd.British Virgin Islands TaxationUnder the law of the British Virgin Islands as currently in effect, a holder of the securities who is not a resident of the British Virgin Islands is not liable forBritish Virgin Islands tax on dividends paid with respect to the securities and all holders of the securities are not liable to the British Virgin Islands for tax on gainsrealized during that year on the sale or disposal of such ordinary shares. The British Virgin Islands does not impose a withholding tax on dividends paid by acompany incorporated or reregistered under the BVI Act.There are no capital gains, gift or inheritance taxes levied by the British Virgin Islands on companies incorporated under the BVI Act. In addition, shares ofcompanies incorporated under the BVI Act are not subject to transfer taxes, stamp duties or similar charges.There is no income tax treaty or convention currently in effect between the United States and the British Virgin Islands or between China and the BritishVirgin Islands.61People’s Republic of China TaxationIn 2007, the PRC National People’s Congress enacted the new Enterprise Income Tax Law (the “EIT Law”), which became effective on January 1, 2008. Thenew EIT Law imposes a single uniform income tax rate of 25% on all Chinese enterprises, including foreigninvested enterprises, and levies a withholding tax rate of10% on dividends payable by Chinese subsidiaries to their foreign shareholders unless any such foreign shareholders’ jurisdiction of incorporation has a tax treatywith China that provides for a different withholding agreement. Under the new EIT Law, enterprises established outside China but deemed to have a “de factomanagement body” within the country may be considered “resident enterprises” for Chinese tax purposes and, therefore, may be subject to an enterprise income taxrate of 25% on their worldwide income. Pursuant to the implementation rules of the new EIT Law, a “de facto management body” is defined as a body that hasmaterial and overall management control over the business, personnel, accounts and properties of the enterprise. Although substantially all members of ourmanagement are located in China, it is unclear whether Chinese tax authorities would require (or permit) us to be treated as PRC resident enterprises. If we aredeemed a Chinese tax resident enterprise, we may be subject to an enterprise income tax rate of 25% on our worldwide income, excluding dividends received directlyfrom another Chinese tax resident enterprise, as well as PRC enterprise income tax reporting obligations. If we are not deemed to be a Chinese tax resident enterprise,we may be subject to certain PRC withholding taxes. See “Risk Factors — Risks Related to Doing Business in China — Our holding company structure may limit thepayment of dividends.” As a result of such changes, our historical tax rates may not be indicative of our tax rates for future periods and the value of our ADSs orordinary shares may be adversely affected. If we are deemed a PRC resident enterprise and investors’ gain from the sales of the securities and dividends payable byus are deemed sourced from China, such gains and dividends payable by us may be subject to PRC tax. See “Risk Factors — Risks Related to Doing Business inChina — If we were deemed a “resident enterprise” by PRC tax authorities, we could be subject to tax on our global income at the rate of 25% under the New EITLaw and our nonPRC shareholders could be subject to certain PRC taxes.United States Federal Income TaxationGeneralThe following is a discussion of the material U.S. federal income tax consequences to an investor of purchasing, owning and disposing of our securities.This discussion does not address any aspects of U.S. federal gift or estate tax or the state, local or nonU.S. tax consequences of an investment in the securities.YOU SHOULD CONSULT YOUR OWN TAX ADVISORS CONCERNING THE U.S. FEDERAL, STATE, LOCAL AND NONU.S. TAX CONSEQUENCES OFPURCHASING, OWNING AND DISPOSING OF THE SECURITIES IN YOUR PARTICULAR SITUATION.This discussion applies only to those investors that purchase the securities in this offering and that hold the securities as capital assets within the meaningof section 1221 of the Internal Revenue Code of 1986, as amended (the “Code”). This section does not apply to holders that may be subject to special tax rules,including but not limited to:1.dealers in securities or currencies;2.traders in securities that elect to use a marktomarket method of accounting;3.banks, insurance companies or certain financial institutions;4.taxexempt organizations;5.governments or agencies or instrumentalities thereof;6.partnerships or other entities treated as partnerships or other passthrough entities for U.S. federal income tax purposes or persons holding thesecurities through such entities;7.regulated investment companies or real estate investment trusts;8.holders subject to the alternative minimum tax;9.holders that actually or constructively own 10% or more of the total combined voting power of all classes of our shares entitled to vote;10.holders that acquired the securities pursuant to the exercise of employee stock options, in connection with employee stock incentive plans orotherwise as compensation;11.holders that hold the securities as part of a straddle, hedging or conversion transaction; or12.holders whose functional currency is not the U.S. dollar.62This section is based on the Code, its legislative history, existing and proposed U.S. Treasury regulations, published rulings and other administrativeguidance of the U.S. Internal Revenue Service (the “IRS”) and court decisions, all as in effect on the date hereof. These laws are subject to change or differentinterpretation by the IRS or a court, possibly on a retroactive basis.We have not sought, and will not seek, a ruling from the IRS as to any U.S. federal income tax consequence described herein. The IRS may disagree withthe discussion herein, and its determination may be upheld by a court. Moreover, there can be no assurance that future legislation, regulation, administrative rulingsor court decisions will not adversely affect the accuracy of the statements in this discussion.The discussion below of the U.S. federal income tax consequences to “U.S. Holders” will apply to a beneficial owner of the securities that is for U.S. federalincome tax purposes:1.a citizen or resident of the United States;2.a corporation (or other entity treated as a corporation) that is created or organized (or treated as created or3.organized) under the laws of the United States, any state thereof or the District of Columbia;4.an estate whose income is subject to U.S. federal income tax regardless of its source; or5.a trust if (a) a U.S. court can exercise primary supervision over the trust’s administration and one or more U.S.6.persons are authorized to control all substantial decisions of the trust, or (b) if the trust has a valid election in effect under applicable U.S.Treasury regulations to be treated as a U.S. person.If a beneficial owner of the securities is not described as a U.S. Holder and is not an entity treated as a partnership or other passthrough entity for U.S.federal income tax purposes, such owner will be considered a “NonU.S. Holder.” The material U.S. federal income tax consequences applicable specifically to NonU.S. Holders are described below under the heading “Tax Consequences to NonU.S. Holders.”If a partnership (including for this purpose any entity treated as a partnership for U.S. tax purposes) is a beneficial owner of the securities, the U.S. taxtreatment of a partner in the partnership generally will depend on the status of the partner and the activities of the partnership. A holder of the securities that is apartnership or partners in such a partnership should consult their own tax advisors about the U.S. federal income tax consequences of holding and disposing of thesecurities.This discussion assumes that any distributions made (or deemed made) on the securities and any consideration received by a holder in consideration forthe sale or other disposition of the securities will be in U.S. dollars. This discussion also assumes that the representations contained in the Deposit Agreement aretrue and that the obligations in the Deposit Agreement and any related agreement will be complied with in accordance with their terms. Finally, this discussionassumes that each ADS will only represent ordinary shares in us, and will not represent any other type of security, such as a bond, cash or other property.63For U.S. federal income tax purposes, a holder of an ADS will be treated as the beneficial owner of the shares represented by such ADS and an exchange ofan ADS for ordinary shares will not be subject to U.S. federal income tax. The U.S. Treasury has expressed concerns that parties to whom ADSs are prereleased, orintermediaries in the chain of ownership between holders of ADSs and the issuer of the securities underlying the ADSs may be taking actions that are inconsistentwith the claiming of foreign tax credits by U.S. Holders of ADSs. Such actions would also be inconsistent with the claiming of the reduced rate of tax applicable todividends received by certain noncorporate U.S. Holders, including individual U.S. Holders, as described below under “Tax Consequences to U.S.Holders — Taxation of Distributions.” Accordingly, the availability of foreign tax credits or the reduced tax rate for dividends received by certain noncorporate U.S.Holders, including individual U.S. Holders, could be affected by actions taken by parties to whom the ADSs are released, or by future actions by the U.S. Treasury.Tax Consequences to U.S. HoldersTaxation of DistributionsSubject to the passive foreign investment company, or PFIC, rules discussed below, the gross amount of any cash distributions we make with respect to aU.S. Holder in respect of such U.S. Holder’s ADSs or shares will generally be treated as dividend income if the distributions are made from our current oraccumulated earnings and profits, calculated according to U.S. federal income tax principles. Cash dividends will generally be subject to U.S. federal income tax asordinary income on the day the U.S. Holder actually or constructively receives such income. With respect to noncorporate U.S. Holders for taxable years beginningbefore January 1, 2011, dividends may be taxed at the lower applicable longterm capital gains rate provided that (a) our ADSs or shares are readily tradable on anestablished securities market in the United States, or, in the event we are deemed to be a Chinese “resident enterprise” under the EIT Law (as described above under“People’s Republic of China Taxation”), we are eligible for the benefits of the income tax treaty between the United States and the PRC (the “U.S.PRC Tax Treaty”),(b) we are not a PFIC, as discussed below, for either the taxable year in which the dividend was paid or the preceding taxable year, and (c) certain holding periodrequirements are met. Under published IRS authority, ADSs are considered for purposes of clause (a) above to be readily tradable on an established securitiesmarket in the United States only if they are listed on certain exchanges, which presently include the NASDAQ Capital Market. U.S. Holders should consult their owntax advisors regarding the availability of the lower rate for any dividends paid with respect to our ADSs or shares.Dividends will not be eligible for the dividendsreceived deduction allowed to U.S. corporations in respect of dividends received from other U.S.corporations. Generally, if we distribute noncash property as a dividend (other than pro rata distributions of our shares) out of our current or accumulated earningsand profits (as determined for U.S. federal income tax purposes), a U.S. Holder generally will include in income an amount equal to the fair market value of theproperty, on the date that it is distributed.Distributions in excess of current and accumulated earnings and profits, as determined for U.S. federal income tax purposes, will be treated as a nontaxablereturn of capital to the extent of the U.S. Holder’s basis in its shares or ADSs and thereafter as capital gain. However, we do not plan on calculating our earnings andprofits in accordance with U.S. federal income tax principles. U.S. holders therefore should generally assume that any distributions paid by us will be treated asdividends for U.S. federal income tax purposes.If PRC taxes apply to dividends paid by us to a U.S. Holder (see “People’s Republic of China Taxation,” above), such taxes may be treated as foreign taxeseligible for credit against such holder’s U.S. federal income tax liability (subject to certain limitations), and a U.S. Holder may be entitled to certain benefits under theU.S.PRC Tax Treaty. The rules relating to the U.S. foreign tax credit are complex. U.S. Holders should consult their own tax advisors regarding the creditability ofany such PRC tax and their eligibility for the benefits of the U.S.PRC Tax Treaty.64Taxation of Dispositions of SharesSubject to the PFIC rules discussed below, a U.S. holder that sells or otherwise disposes of its shares will recognize capital gain or loss for U.S. federalincome tax purposes equal to the difference between the amount realized and such U.S. Holder’s tax basis in its shares. Prior to January 1, 2011, capital gains of anoncorporate U.S. holder are generally taxed at a maximum rate of 15% where the property is held for more than one year (and 20% thereafter). The ability to deductcapital losses is subject to limitations.If PRC taxes apply to any gain from the disposition of our shares by a U.S. Holder, such taxes may be treated as foreign taxes eligible for credit against suchholder’s U.S. federal income tax liability (subject to certain limitations), and a U.S. Holder may be entitled to certain benefits under the U.S.PRC Tax Treaty. U.S.Holders should consult their own tax advisors regarding the creditability of any such PRC tax and their eligibility for the benefits of the U.S.PRC Tax Treaty.Passive Foreign Investment CompanyWe do not expect to be a PFIC for U.S. federal income tax purposes for our current tax year or in the foreseeable future. The determination of whether or notwe are a PFIC in respect of any of our taxable years is a factual determination that cannot be made until the close of the applicable tax year and that is based on thetypes of income we earn and the value and composition of our assets (including goodwill), all of which are subject to change. Therefore, we can make no assurancesthat we will not be a PFIC in respect of our current taxable year or in the future.In general, we will be a PFIC in any taxable year if either:1.at least 75% of our gross income for the taxable year is passive income; or2.at least 50% of the value, determined on the basis of a quarterly average, of our assets is attributable to assets that produce or are held for theproduction of passive income.Passive income includes dividends, interest, royalties, rents (other than certain rents and royalties derived in the active conduct of a trade or business), theexcess of gains over losses from certain types of transactions in commodities, annuities and gains from assets that produce passive income. We will be treated asowning our proportionate share of the assets and earning our proportionate share of the income of any corporation in which we own, directly or indirectly, at least25% (by value) of the stock.If we are treated as a PFIC in any year during which a U.S. Holder owns the securities, and such U.S. Holder did not make a marktomarket election, asdescribed below, the U.S. Holder will be subject to special rules with respect to:1.any gain recognized by the U.S. Holder on the sale or other disposition of its shares; and any excess distribution that we make to the U.S. Holder(generally, the excess of the amount of any distributions to such U.S. Holder during a single taxable year of such U.S. Holder over 125% of theaverage annual distributions received by such U.S. Holder in respect of the shares during the three preceding taxable years of such U.S. Holder or,if shorter, such U.S. Holder holding period for the shares).Under these rules:2.the gain or excess distribution will be allocated ratably over the U.S. Holder’s holding period for the shares;3.the amount allocated to the U.S. Holder’s taxable year in which it realized the gain or excess distribution or to the period in the U.S. Holder’sholding period before the first day of our first taxable year in which we are a PFIC will be taxed as ordinary income;4.the amount allocated to other taxable years (or portions thereof) of the U.S. Holder and included in its holding period will be taxed at the highesttax rate in effect for that year; and5.the interest charge generally applicable to underpayments of tax will be imposed in respect of the tax attributable to each such other taxable yearof the U.S. Holder. 6.Special rules apply for calculating the amount of the foreign tax credit with respect to excess distributions by a PFIC.65Alternatively, if a U.S. Holder, at the close of its taxable year, owns ordinary shares in a PFIC that are treated as marketable stock, the U.S. Holder may makea marktomarket election with respect to such shares for such taxable year. Our shares will be “marketable” to the extent that they remain regularly traded on anational securities exchange, such as the NASDAQ Capital Market. If a U.S. Holder makes this election in a timely fashion, it will not be subject to the PFIC rulesdescribed above. Instead, in general, the U.S. Holder will include as ordinary income each year the excess, if any, of the fair market value of its shares at the end ofthe taxable year over its adjusted basis in its shares. Any ordinary income resulting from this election would generally be taxed at ordinary income tax rates andwould not be eligible for the reduced rate of tax applicable to qualified dividend income. The U.S. Holder will also be allowed to take an ordinary loss in respect ofthe excess, if any, of the adjusted basis of its shares over the fair market value at the end of the taxable year (but only to the extent of the net amount of previouslyincluded income as a result of the marktomarket election). The U.S. Holder’s basis in the shares will be adjusted to reflect any such income or loss amounts. U.S.Holders should consult their own tax advisor regarding potential advantages and disadvantages of making a marktomarket election with respect to their shares.Alternatively, a U.S. Holder of stock in a PFIC may avoid the PFIC tax consequences described above in respect to our or shares by making a timely“qualified electing fund” election to include in income its pro rata share of our net capital gains (as longterm capital gain) and other earnings and profits (asordinary income), on a current basis, in each case whether or not distributed, in the taxable year of the U.S. Holder in which or with which our taxable year ends.However, the qualified electing fund election is available only if the PFIC provides such U.S. Holder with certain information regarding its earnings and profits asrequired under applicable U.S. Treasury regulations. We do not intend to furnish the information that a U.S. Holder would need in order to make a qualified electingfund election. Therefore, U.S. Holders will not be able to make or maintain such election with respect to their or shares.If a U.S. Holder owns our shares or during any year that we are a PFIC, such holder must file U.S. Internal Revenue Service Form 8621 regarding suchholder’s shares or and the gain realized on the disposition of the shares. The reduced tax rate for dividend income, discussed in “Taxation of Distributions,” is notapplicable to dividends paid by a PFIC. U.S. Holders should consult with their own tax advisors regarding reporting requirements with respect to their shares.Tax Consequences to NonU.S. HoldersDividends paid to a NonU.S. Holder in respect of our or shares generally will not be subject to U.S. federal income tax, unless the dividends are effectivelyconnected with the NonU.S. Holder’s conduct of a trade or business within the United States (and, if required by an applicable income tax treaty, are attributable toa permanent establishment or fixed base that such holder maintains in the United States).In addition, a NonU.S. Holder generally will not be subject to U.S. federal income tax on any gain attributable to a sale or other disposition of our or sharesunless such gain is effectively connected with its conduct of a trade or business in the United States (and, if required by an applicable income tax treaty, isattributable to a permanent establishment or fixed base that such holder maintains in the United States) or the NonU.S. Holder is an individual who is present in theUnited States for 183 days or more in the taxable year of sale or other disposition and certain other conditions are met (in which case, such gain from United Statessources generally is subject to tax at a 30% rate or a lower applicable tax treaty rate).Dividends and gains that are effectively connected with the NonU.S. Holder’s conduct of a trade or business in the United States (and, if required by anapplicable income tax treaty, are attributable to a permanent establishment or fixed base in the United States) generally will be subject to tax in the same manner as fora U.S. Holder and, in the case of a NonU.S. Holder that is a corporation for U.S. federal income tax purposes, may also be subject to an additional branch profits taxat a 30% rate or a lower applicable tax treaty rate.66Information Reporting and Backup Withholding In general, information reporting for U.S. federal income tax purposes generally should apply to distributions made on the securities within the UnitedStates to a noncorporate U.S. Holder and to the proceeds from sales and other dispositions of the securities by a noncorporate U.S. Holder to or through a U.S.office of a broker. Payments made (and sales and other dispositions effected at an office) outside the United States generally should be subject to informationreporting in limited circumstances.Dividend payments made to U.S. Holders and proceeds paid from the sale or other disposition the securities may be subject to information reporting to theIRS and possible U.S. federal backup withholding at a current rate of 28%. Certain exempt recipients, such as corporations, are not subject to these informationreporting requirements. Backup withholding will not apply to a U.S. Holder who furnishes a correct taxpayer identification number and makes any other requiredcertification, or who is otherwise exempt from backup withholding. U.S. Holders who are required to establish their exempt status must provide a duly executed IRSForm W9.A NonU.S. Holder generally may eliminate the requirement for information reporting and backup withholding by providing certification of its foreignstatus, under penalties of perjury, on a duly executed applicable IRS Form W8 or by otherwise establishing an exemption.Backup withholding is not an additional tax. Rather, the amount of any backup withholding will be allowed as a credit against a U.S. Holder’s or a nonU.S.Holder’s U.S. federal income tax liability and may entitle such holder to a refund, provided that certain required information is timely furnished to the IRS.PROSPECTIVE PURCHASERS OF OUR SECURITIES SHOULD CONSULT WITH THEIR OWN TAX ADVISORS REGARDING THE APPLICATION OFTHE U.S. FEDERAL INCOME TAX LAWS TO THEIR PARTICULAR SITUATIONS AS WELL AS ANY ADDITIONAL TAX CONSEQUENCES RESULTING FROMPURCHASING, HOLDING OR DISPOSING OF OUR SECURITIES, INCLUDING THE APPLICABILITY AND EFFECT OF THE TAX LAWS OF ANY STATE, LOCALOR NONU.S. JURISDICTION, INCLUDING ESTATE, GIFT, AND INHERITANCE LAWS AND APPLICABLE TAX TREATIES.F. DIVIDENDS AND PAYING AGENTS.Not applicable.G. STATEMENT BY EXPERTS.None.H. DOCUMENTS ON DISPLAY.We previously filed a registration statement on Form F1 (File No. 333166056) with the SEC relating to our initial public offering in May 2010. This transition reportdoes not contain all of the information in the registration statement and the exhibits and financial statements included with the registration statement. References inthis transition report to any of our contracts, agreements or other documents are not necessarily complete, and you should refer to the exhibits attached to theregistration statement for copies of the actual contracts, agreements or documents. In addition, we will file transition reports on Form 20F and submit otherinformation under cover of Form 6K. As a foreign private issuer, we are exempt from the proxy requirements of Section 14 of the Exchange Act and our officers,directors and principal shareholders will be exempt from the insider shortswing disclosure and profit recovery rules of Section 16 of the Exchange Act. You may readand copy the registration statement, the related exhibits and other materials we file with the SEC at the SEC's public reference room in Washington, D.C. at 100 FStreet, Room 1580, N.E., Washington, D.C.20549. You can also request copies of those documents, upon payment of a duplicating fee, by writing to the SEC. Pleasecall the SEC at 1800SEC0330 for further information on the operation of the public reference rooms. The SEC also maintains an Internet site that contains reports,proxy and information statements and other information regarding issuers that file with the SEC. The website address is http://www.sec.gov. You may also request acopy of these filings, at no cost, by writing us at LAB 32, SOHO 3Q, No 9, Guanghua Road, Chaoyang District, Beijing, People’s Republic of China, 100020 ortelephoning us at (86) 1085866721.67I. SUBSIDIARY INFORMATIONFor a listing of our subsidiaries, see “Item 4. Information on the Company – C. Organizational Structure.”ITEM 11. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.Interest Rate RiskAs of December 31, 2017, we had no shortterm or longterm borrowings. If we borrow money in future periods, we may be exposed to interest rate risk. Ourexposure to market risk for changes in interest rates relates primarily to the interest income generated by our cash deposits with our banks and heldtomaturityinvestments. We have not used any derivative financial instruments in our investment portfolio. Interest earnings instruments carry a degree of interest rate risk. Wehave not been exposed, nor do we anticipate being exposed to material risks due to changes in interest rates. However, our future interest income may fall short ofexpectations due to changes in interest rates. Foreign Exchange RiskTranslation adjustments amounted to $90,671 and $387,375 gain as of the fiscal year ended December 31, 2017 and 2016, respectively. The Companytranslated balance sheet amounts with the exception of equity at December 31, 2017 at RMB 6.5342 to $1.00 as compared to RMB 6.9370 to $1.00 at December 31,2016. The Company stated equity accounts at their historical rate. The average translation rates applied to income statement accounts for the fiscal year endedDecember 31, 2017 and 2016 were RMB6.7356 and RMB 6.7153 to US$1.00, respectively. So far, the PRC government has been able to manage a stable exchange ratebetween RMB and the U.S. Dollar. Our future downward translation adjustments may occur and can be significant due to changes in such exchange rate.If we decide to convert our RMB into U.S. dollars for the purpose of making payments for dividends on our ordinary shares or for other business purposes,appreciation of the U.S. dollar against the RMB would have a negative effect on the U.S. dollar amount available to us.The PRC government imposes strict restrictions on PRC resident companies regarding converting RMB into foreign currencies and vice versa under capitalaccount transactions, such as receiving equity investments from outside of the PRC, making equity investments outside of the PRC, borrowing money from orlending money outside of the PRC, and repaying debt or remitting liquidated assets and/or accumulated profits outside of the PRC. These transactions have to beapproved by the relevant PRC government authorities, including but not limited to the commerce bureau, the tax bureau and the State Administration of ForeignExchange, or SAFE, and have to be conducted at banks entrusted by the local SAFE branch. As our business continues to grow, we may need to continuouslyfinance our PRC subsidiaries by raising capital from outside of the PRC. The restriction on converting RMB into foreign currencies, and vice versa, may limit ourability to use capital resources from outside of the PRC. Such restrictions may also limit our ability to remit profits from our PRC subsidiaries outside of the PRC,therefore potentially limiting our ability to pay dividends to our shareholders. In addition, such restrictions will limit our ability to freely transfer temporary excesscash in our or our subsidiaries’ bank accounts in and out of the PRC, therefore limiting our ability to conduct crossborder cash management activities to optimizethe utilization of our cash.InflationAlthough China has experienced an increasing inflation rate, inflation has not had a material impact on our results of operations in recent years. Accordingto the National Bureau of Statistics of China, the change in the consumer price index in China was 0.46%, (0.77%), and 1.16% in 2001, 2002 and 2003, respectively.However, in connection with a 3.9% increase in 2004, the PRC government announced measures to restrict lending and investment in China in order to reduceinflationary pressures in China’s economy. Following the government’s actions, the consumer price index decreased to 1.8% in 2005 and to 1.5% in 2006. In 2007, theconsumer price index increased to 4.8%. In response, China’s central bank, the People’s Bank of China, announced that the bank reserve ratio would rise half apercentage point to 15.5% in an effort to reduce inflation pressures. China’s consumer price index growth rate reached 8.7% year over year in 2008. In 2009 and 2010,the change in the consumer price index in China was minus 0.7% and 3.3%.China consumer price index in November 2017 was 3.8% higher than that of the same period in 2016. China consumer price index in December 2016 was2.4% higher than that of the same period in 2015. China consumer price index in December 2015 was 4.8% higher than that of the same period in 2014. Chinaconsumer price index in December 2014 was 3.3% higher than that of the same period in 2013. The results of the PRC government’s actions to combat inflation aredifficult to predict. Adverse changes in the Chinese economy, if any, will likely impact the financial performance of a variety of industries in China that use, or wouldbe candidates to use, our software products and services.68ITEM 12. DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES.A. DEBT SECURITIES.Not applicable. B. WARRANTS AND RIGHTS.Not applicable.C. OTHER SECURITIES.Not applicable.D. AMERICAN DEPOSITARY SHARES.The Bank of New York Mellon, as depositary (the “Depositary”) for the Company’s ADR facility, notified the owners and holders of the Company’s ADSsthat the ADS facility will terminate effective at 5:00 p.m. (Eastern Time) on September 19, 2018. Under the terms of the Deposit Agreement among the Company, theDepositary and the owners and holders of ADSs of the Company (the “Deposit Agreement”), owners and holders of the Company’s ADSs have until at leastJanuary 21, 2019 to surrender their ADSs to the Depositary for delivery of the underlying ordinary shares of the Company. Subsequent to January 21, 2019, underthe terms of the Deposit Agreement, the Depositary may attempt to sell any ordinary shares remaining on deposit with the Depositary. If the Depositary sells suchunderlying ordinary shares or receives value for such shares, holders must surrender their ADSs to obtain payment of the sale proceeds, net of expenses andapplicable tax and charges. We completed the voluntary delisting of our ADSs from the NASDAQ Capital Market on September 19, 2018.You may hold ADSs either (A) directly (i) by having ADSs registered in your name in the Direct Registration System, or (ii) by having an Americandepositary receipt, also referred to as an ADR, which is a certificate evidencing a specific number of ADSs, registered in your name, or (B) indirectly by holding asecurity entitlement in ADSs through your broker or other financial institution. If you hold ADSs directly, you are a registered ADS holder, also referred to as anADS holder. This description assumes you are an ADS holder. If you hold the ADSs indirectly, you must rely on the procedures of your broker or other financialinstitution to assert the rights of ADS holders described in this section. You should consult with your broker or financial institution to find out what thoseprocedures are.The Direct Registration System, or DRS, is a system administered by The Depository Trust Company, also referred to as DTC, pursuant to which thedepositary may register the ownership of uncertificated ADSs, which ownership will be confirmed by periodic statements sent by the depositary to the registeredholders of uncertificated ADSs.69As an ADS holder, you will not be treated as one of our registered shareholders and you will not have direct shareholder rights. British Virgin Island’s lawgoverns our direct shareholders’ rights. The depositary will be the holder of the shares underlying your ADSs. As a registered holder of ADSs, you will have ADSholder rights. A Deposit Agreement among us, the depositary and you, as an ADS holder, and all other persons indirectly holding ADSs, sets out ADS holder rightsas well as the rights and obligations of the depositary. New York law governs the Deposit Agreement and the ADSs.The following is a summary of the material provisions of the Deposit Agreement. For more complete information, you should read the entire DepositAgreement and the form of ADS, which contains the terms of the ADSs. The Deposit Agreement is filed as an exhibit to our registration statement filed on Form F1.You may obtain the registration statement and the attached Deposit Agreement from the SEC’s website at http://www.sec.gov. You may also obtain a copy of theDeposit Agreement at the SEC’s Public Reference Room, which is located at 100 F Street, NE, Washington, DC 20549. You may obtain information on the operationof the Public Reference Room by calling the SEC at 18007320330. Fees and ExpensesPersons depositing or withdrawing shares or ADS holders must pay:For:$5.00 (or less) per 100 ADSs (or portion of 100 ADSs)Issuance of ADSs, including issuances resulting from a distribution of shares orrights or other propertyCancellation of ADSs for the purpose of withdrawal, including if the DepositAgreement terminates$.05 (or less) per ADSAny cash distribution to ADS holdersA fee equivalent to the fee that would be payable if securities distributed to youhad been shares and the shares had been deposited for issuance of ADSsDistribution of securities distributed to holders of deposited securities whichare distributed by the depositary to ADS holders$.05 (or less) per ADSs per calendar yearDepositary servicesRegistration or transfer feesTransfer and registration of shares on our share register to or from the name ofthe depositary or its agent when you deposit or withdraw sharesExpenses of the depositaryCable, telex and facsimile transmissions (when expressly provided in the DepositAgreement) converting foreign currency to U.S. dollarsTaxes and other governmental charges the depositary or the custodian have topay on any ADS or share underlying an ADS, for example, share transfer taxes,stamp duty or withholding taxesAs necessaryAny charges incurred by the depositary or its agents for servicing the depositedsecuritiesAs necessaryPayment of TaxesHolders of our ADSs are responsible for any taxes or other governmental charges payable on their ADSs or on the deposited securities represented by anyof their ADSs. The depositary may refuse to register any transfer of a holder’s ADSs or allow withdrawal of the deposited securities represented by the ADSs untilsuch taxes or other charges are paid. It may apply payments owed to the holder or sell deposited securities represented by the ADSs to pay any taxes owed and theholder will remain liable for any deficiency. If the depositary sells deposited securities, it will, if appropriate, reduce the number of ADSs to reflect the sale and pay toADS holders any proceeds, or send to ADS holders any property, remaining after it has paid the taxes.70PART IIITEM 13. DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES.None.ITEM 14. MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS.Use of Proceeds.We completed our initial public offering on May 14, 2010 (the “IPO”), which generated net proceeds of approximately $14.6 million. All remaining cash onhand from the proceeds of our IPO was transferred to C Media Limited and its subsidiaries following the completion of the asset exchange transactions on August17, 2018.ITEM 15. CONTROLS AND PROCEDURES.Disclosure Controls and ProceduresOur Chief Executive Officer and Chief Financial Officer have reviewed and evaluated the effectiveness of our disclosure controls and procedures, whichincluded inquiries made to certain other of our employees. The term “disclosure controls and procedures,” as defined in Rules 13a15(e) and 15d15(e) under theExchange Act, means controls and other procedures of a company that are designed to ensure that information required to be disclosed by a company in thereports, such as this report, that it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in theSEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to bedisclosed by a company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the company’s management, including itsprincipal executive and principal financial officers, as appropriate to allow timely decisions regarding required disclosure. Management recognizes that any controlsand procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives and management necessarilyapplies its judgment in evaluating the costbenefit relationship of possible controls and procedures. Based on that evaluation, our Chief Executive Officer and ChiefFinancial Officer have each concluded that, as of December 31, 2017, the Company’s disclosure controls and procedures were not effective due to the materialweakness described in the “Management’s Report on Internal Control over Financial Reporting” section below.Management’s Report on Internal Control Over Financial ReportingOur management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Exchange ActRules 13a15(f) and 15d15(f). Internal control over financial reporting refers to the process designed by, or under the supervision of, our principal executive officerand principal financial officer, and effected by our Board of Directors, management and other personnel, to provide reasonable assurance regarding the reliability offinancial reporting and the preparation of financial statements for external purposes in accordance with U.S. GAAP and includes those policies and procedures that(i) pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of the assets of the Company; (ii)provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with U.S. GAAP, and thatreceipts and expenditures of the Company are being made only in accordance with authorizations of management and directors of the Company; and (iii) providereasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the Company’s assets that could have a materialeffect on the financial statements.71Any system of internal control, no matter how well designed, has inherent limitations. Therefore, even those systems determined to be effective canprovide only reasonable assurance with respect to financial statement preparation and presentation. Because of the inherent limitations of internal control, there is arisk that material misstatements may not be prevented or detected on a timely basis by internal control over financial reporting. However, these inherent limitationsare known features of the financial reporting process. Therefore, it is possible to design into the process safeguards to reduce, though not eliminate, this risk.Management assessed our internal control over financial reporting as of the year ended December 31, 2017. In making this assessment, management usedthe criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in the 2014 report entitled "Internal ControlIntegratedFramework." The COSO framework summarizes each of the components of a company’s internal control system, including (i) the control environment, (ii) riskassessment, (iii) control activities, (iv) information and communication, and (v) monitoring. Based on such assessment, management concluded that its internalcontrol over financial reporting as of December 31, 2017 was not effective because of the following material weakness:Lack of U.S. GAAP expertise. Although our accounting personnel are professional and experienced in accounting requirements and procedures generallyaccepted in the PRC, they do not have sufficient knowledge, experience and training in maintaining our books and records and preparing financial statements inaccordance with U.S. GAAP standards and SEC rules and regulations. The staff needs additional training to become experienced in U.S. GAAPbased reporting,including the skills of U.S. GAAPbased period end closing, consolidation of financial statements, and U.S. GAAP conversion.In order to address the above material weakness, our management plans to take the following steps:We will employ, as needed, outside professionals to provide key accounting personnel ongoing technical trainings to ensure their proper understanding ofU.S. GAAP and newly announced accounting standards.The Company believes the foregoing measures will remediate the identified material weakness in future periods. The Company is committed to monitoringthe effectiveness of these measures and making any changes that are necessary and appropriate.Notwithstanding the conclusion that its internal control over financial reporting was not effective as of the end of the period covered by this report, ourChief Executive Officer and Chief Financial Officer believe that the financial statements and other information contained in this report present fairly, in all materialrespects, its business, financial condition and results of operations. Nothing has come to the attention of management that causes them to believe that any materialinaccuracies or errors exist in the Company’s financial statements as of December 31, 2017.Attestation report of the registered public accounting firm.This transition report does not include an attestation report of the Company’s registered public accounting firm on internal control over financial reportingbecause the Company is a nonaccelerated filer permanently exempted from section 404(b) of the SarbanesOxley Act.Changes in Internal Control over Financial ReportingThere were no changes in the Company’s internal control over financial reporting that occurred during our fiscal year ended December 31, 2017 that hasmaterially affected or is reasonably likely to materially affect our internal control over financial reporting.ITEM 16. [RESERVED]ITEM 16A. AUDIT COMMITTEE FINANCIAL EXPERT.Our board of directors has determined that Mr. Dennis Galgano qualifies as an audit committee financial expert. Our board of directors has determined thatMessrs. Dennis Galgano, Jin Shi, Jiming Ha and Zhihao Xu meet the definition of an “independent director” under the applicable NASDAQ Rules and under Rule10A3 of the Securities Exchange Act of 1934, as amended.72ITEM 16B. CODE OF ETHICS.Our board of directors has adopted a code of business conduct and ethics applicable to our directors, officers and employees. We have posted the code onour website at http://www.luokung.com.ITEM 16C. PRINCIPAL ACCOUNTANT FEES AND SERVICES.Audit FeesThe aggregate fees billed by Moore Stephens CPA Limited for professional services rendered for the audit of our financial information disclosed in thistransition report on Form 20F was $280,000 for the two years ended December 31, 2017 and 2016.The aggregate fees billed by our previous auditor, BDO China Shu Lun Pan Certified Public Accountants LLP for professional services rendered for theaudit of our annual financial information included in our annual reports on Form 20F was $105,500 for each of the fiscal years ended September 30, 2017, 2016 and2015.Tax FeesWe did not engage our principal accountants to provide tax or related services during the last two fiscal years.All Other FeesWe did not engage our principal accountants to render services to us during the last two fiscal years, other than as reported above.ITEM 16D. EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES.Not applicable.ITEM 16E. PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS.Not applicable.ITEM 16F. CHANGE IN REGISTRANT’S CERTIFYING ACCOUNTANT.Not applicable.ITEM 16G. CORPORATE GOVERNANCE.We are incorporated in the BVI and our corporate governance practices are governed by applicable BVI law as well as our memorandum and articles ofassociation. In addition, because our ADSs are listed on NASDAQ, we are subject to NASDAQ’s corporate governance requirements. NASDAQ Listing Rule5620(a) requires each issuer to hold an annual meeting of shareholders no later than one year after the end of the issuer’s fiscal year end. However, NASDAQ ListingRule 5615(a)(3) permits a foreign private issuer like us to follow home country practices in lieu of certain requirements of Listing Rule 5600, provided that suchforeign private issuer discloses in its transition report filed with the SEC each requirement of Rule 5600 that it does not follow and describes the home countrypractice followed in lieu of such requirement. We follow home country practice with respect to annual meetings and did not hold an annual shareholder meeting inthe year ended December 31, 2017. We may, however, hold annual shareholder meetings in the future if there are significant issues that require shareholders’approvals.ITEM 16H. MINE SAFETY DISCLOSURE.Not applicable.73PART IIIITEM 17. FINANCIAL STATEMENTS.We have elected to provide financial statements and related information specified in Item 18.ITEM 18. FINANCIAL STATEMENTS.See “Index to Consolidated Financial Statements” for a list of all financial statements filed as part of this transition report. The Financial Statements arebeginning on page F1.ITEM 19. EXHIBITS.See the Exhibit Index following the signature page of this report, which is incorporated herein by reference.74SIGNATURESThe registrant hereby certifies that it meets all of the requirements for filing on Form 20F and that it has duly caused and authorized the undersigned tosign this transition report on its behalf.LUOKUNG TECHNOLOGY CORP.By:/s/ Xuesong Song Xuesong SongChief Executive Officer(principal executive officer)October 12, 201875EXHIBIT INDEXThe following documents are filed as part of this transition report on Form 20F.ExhibitNumberDescription1.1Amended and Restated Memorandum of Association and Articles of Association of Luokung Technology Corp., dated August 20, 2018, and ascurrently in effect.2.1*Deposit Agreement among the Company, depositary and holders of the American Depositary Receipts.2.2*Form of American Depositary Receipt.2.3*English translation of Entrusted Management Agreement dated December 15, 2009 between Xi’an Softech Co., Ltd., Xi’an Kingtone InformationTechnology Co., Ltd. and the shareholders of Xi’an Kingtone Information Technology Co., Ltd.3.1*English translation of Shareholder’s Voting Proxy Agreement dated December 15, 2009 between Xi’an Softech Co., Ltd., Xi’an Kingtone InformationTechnology Co., Ltd. and the shareholders of Xi’an Kingtone Information Technology Co., Ltd.4.1*English translation of Exclusive Technology Service Agreement dated December 15, 2009 between Xi’an Softech Co., Ltd. and Xi’an KingtoneInformation Technology Co., Ltd.4.2*English translation of Exclusive Option Agreement dated December 15, 2009 between Xi’an Softech Co., Ltd., Xi’an Kingtone InformationTechnology Co., Ltd. and the shareholders of Xi’an Kingtone Information Technology Co., Ltd.4.3*English translation of Equity Pledge Agreement dated December 15, 2009 between Xi’an Softech Co., Ltd., Xi’an Kingtone Information TechnologyCo., Ltd. and the shareholders of Xi’an Kingtone Information Technology Co., Ltd.4.4*English translation of Loan Agreement dated September 14, 2009 between Xi’an Kingtone Information Technology Co., Ltd. and Xian CityCommercial Bank.4.5*English translation of Mortgage Agreement dated September 14, 2009 between Xi’an Kingtone Information Technology Co., Ltd. and Xian CityCommercial Bank.4.6*English translation of Form of Employment Agreement entered into between the Company and the Company’s executive officers.4.7*2010 Omnibus Incentive Plan of the Company.4.8**English translation of Project Construction Contract dated August 10, 2010 between Xi’an Hu County Yuxing Agriculture Science & TechnologyCo., Ltd. and Xi’an Kingtone Information Technology Co., Ltd.4.9***Asset Exchange Agreement by and between C Media Limited and the Company dated as of January 25, 2018.4.10***Securities Purchase Agreement by and among Redstone YYL Management Limited and five shareholders holding majority of the shares of theCompany dated as of January 25, 2018.4.15Exclusive Business Cooperation Agreement by and between Zhongchuan Tianxia Information Technology (Shenzhen) Co., Ltd., and Beijing MobileVision Technology Co., Ltd., dated August 31, 2015.764.16Exclusive Option Agreement by and among Zhongchuan Tianxia Information Technology (Shenzhen) Co., Ltd., Xuesong Song, Weili Chen, PingWang, Donglai Liu, and Beijing Mobile Vision Technology Co., Ltd., dated August 31, 2015.4.17Equity Interest Pledge Agreement by and among Zhongchuan Tianxia Information Technology (Shenzhen) Co., Ltd., Xuesong Song, Weili Chen, PingWang, Donglai Liu, and Beijing Mobile Vision Technology Co., Ltd., dated August 31, 2015.4.18Addendum to Asset Exchange Agreement by and among the Company, Topsky Infotech Holdings Pte Ltd. and C Media Limited, dated October 3,2018. Incorporated by reference to the Company’s Current Report on Form 6K filed on October 4, 2018.4.19Stock Purchase Agreement, dated August 25, 2018, by and among the Company, LK Technology Ltd., and the shareholders listedtherein. Incorporated by reference to the Company’s Current Report on Form 6K filed on August 27, 2018.4.20Power of Attorney by Weili Chen, dated August 31, 2015.4.21Power of Attorney by Ping Wang, dated August 31, 2015.4.22Power of Attorney by Donglai Liu, dated August 31, 2015.4.23Power of Attorney by Xuesong Song, dated August 31, 2015.8.1List of Subsidiaries and Consolidated Variable Interest Entities10.1Employment Agreement, dated August 19, 2018, between Luokung Technology Corp. and Xuesong Song.†10.2Employment Agreement, dated August 19, 2018, by and between Luokung Technology Corp. and Jie Yu.†12.1Certification of Chief Executive Officer required by Rule 13a14(a).12.2Certification of Chief Financial Officer required by Rule 13a14(a).13.1Certification of Chief Executive Officer required by Rule 13a14(a).13.2Certification of Chief Financial Officer required by Rule 13a14(a).101.INSXBRL Instance Document.101.SCHXBRL Taxonomy Extension Schema Document.101.CALXBRL Taxonomy Extension Calculation Linkbase Document.101.DEFXBRL Taxonomy Extension Definition Linkbase Document.101.LABXBRL Taxonomy Extension Label Linkbase Document.101.PREXBRL Taxonomy Extension Presentation Linkbase Document.*Previously filed as an exhibit to the Company’s Registration Statement on Form F1 (Reg. No. 333166056) filed with the Commission and incorporated hereinby reference.**Previously filed as exhibits to the Company’s Transition Report on Form 20F filed with the Commission on January 20, 2011 and incorporated herein byreference.***Previously filed as exhibits to the Company’s Annual Report on Form 20F filed with the Commission on February 9, 2018 and incorporated herein byreference.†Indicates management contract or compensatory plan, contract or arrangement.77LK Technology Ltd. and SubsidiariesCONSOLIDATED FINANCIAL STATEMENTSTABLE OF CONTENTSPage(s)Report of Independent Registered Public Accounting FirmF2Consolidated Financial StatementsConsolidated Balance SheetsF3Consolidated Statements of Operations and Comprehensive LossF4application.Chuang (Vincent) Tao was appointed as a member of the Board effective on August 25, 2018. Dr. Tao was the Chairman of SuperEngine Suzhou from 2014to 2017. Dr. Tao has been the president of the Seasky Angel Investment Alliance of Shanghai since 2015. Dr. Tao received his Bachelor Degree of geographicinformation and telemetry from Wuhan University in China in 1990 and received his Ph.D. from University of Calgary, Canada in 1997.Dennis Galgano was appointed as a director of the Company following the consummation of the asset exchange agreement. He was a registered consultantwith Morgan Joseph Triartisan LLC from November 2016 until October 2017, and previously served as vice chairman and head of international investment bankingfor Morgan Joseph Triartisan LLC, which is a registered broker dealer engaged in the investment banking and financial advisory industry. Mr. Galgano received aB.S. degree in Chemistry from St. John’s University and an M.B.A. from The Wharton School in 1972.Jin Shi was appointed as a director of the Company following the consummation of the asset exchange transactions. Mr. Shi has served as the managingpartner of Chum Capital Group, a merchant bank focused on helping Chinese growth companies to access global capital, since January 2013. Mr. Shi has also servedas a director of Seven Stars Cloud Group, Inc. (NASDAQ: SSC), a premium video on demand service provider, since January 2014, and joined the audit committee ofits board of directors in March 2016. He also served as a director and member of the audit committee of Pingtan Marine Enterprise, Ltd. (NASDAQ: PME), a marineenterprise group primarily engaged in ocean fishing through its subsidiaries. Mr. Shi received an EMBA degree from the Guanghua Management School of BeijingUniversity, and a Bachelor’s degree of science in Chemical Engineering from Tianjin University.Jiming Ha was appointed as a director of the Company following the consummation of the asset exchange agreement, and has also served as a seniorresearch fellow for the China Finance 40 Forum since March 1, 2018, and previously served as a managing director of Goldman Sachs from January 2017 to April2017. Mr. Ha served as a vice chairman and chief investment strategist of the Investment Strategy Group for Private Wealth Management at Goldman Sachs from2010 to January 2017. Mr. Ha holds a PhD in Economics from the University of Kansas and Master’s and Bachelor’s degrees of science from Fudan University.Zhihao Xu was appointed as a director of the Company following the consummation of the asset exchange transactions. Mr. Xu has served as the chiefexecutive officer of Geely Group Co., Ltd., in Hangzhou, China, since December 2017, and previously served as the chairman and chief executive officer of BeijingDingchengrenhe Investment Co., Ltd., a funds management company, from January 2017 to December 2017. Mr. Xu served as the chairman of president of HNAUSOLV CO., LTD., and the chief innovation officer of HNA Logistics Group from January 2014 to December 2016, and prior to that as the chairman of GopayInnovation Technology Co. Ltd., an online payment system operator supporting online money transfers, from April 2012 to January 2014. Mr. Xu graduated from theBusiness School of Renmin University of China and from the Wudaokou Finance College of Tsinghua University with a fund qualification certificate and securitiesqualification certificate.B. COMPENSATION.Compensation of Directors and Executive OfficersFor the ninemonth transition period ended September 30, 2018 and the fiscal year ended December 31, 2017, we did not pay any cash compensation to ourexecutive officers of LK Technology Ltd. and a to our directors for serving on our board of directors of LK Technology Ltd.37Other than nonemployee directors, we do not intend to compensate directors for serving on our board of directors or any of its committees. We do,however, intend to reimburse each member of our board of directors for outofpocket expenses incurred by each director in connection with attending meetings ofthe board of directors and its committees.AdministrationThe Incentive Plan is administered by our board of directors, or at the discretion of the board, by our compensation committee. Our board of directors hasdelegated authority to our compensation committee to administer the Incentive Plan. Subject to the terms of the Incentive Plan, the compensation committee mayselect participants to receive awards, determine the types of awards and terms and conditions of awards, and interpret provisions of the Incentive Plan.The ordinary shares issued or to be issued under the Incentive Plan consist of authorized but unissued shares. If any ordinary shares covered by an awardare not purchased or are forfeited, or if an award otherwise terminates without delivery of any ordinary shares, then the number of ordinary shares counted againstthe aggregate number of ordinary shares available under the plan with respect to the award will, to the extent of any such forfeiture or termination, again be availablefor making awards under the Incentive Plan.EligibilityAwards may be made under the Incentive Plan to our employees, officers, directors, consultants or advisers or to any of our affiliates, and to any otherindividual whose participation in the Incentive Plan is determined to be in our best interests by our board of directors.Amendment or Termination of the PlanOur board of directors may terminate or amend the Incentive Plan at any time and for any reason. No amendment, however, may adversely impair the rightsof grantees with respect to outstanding awards. The Incentive Plan has a term of ten years. Amendments will be submitted for shareholder approval to the extentrequired by applicable stock exchange listing requirements or other applicable laws.OptionsThe Incentive Plan permits the granting of options to purchase ordinary shares intended to qualify as incentive share options under the Internal RevenueCode and share options that do not qualify as incentive share options, or nonqualified share options.The exercise price of each share option may not be less than 100% of the fair market value of our ADSs representing ordinary shares on the date of grant.In the case of certain 10% shareholders who receive incentive share options, the exercise price may not be less than 110% of the fair market value of our ADSsrepresenting ordinary shares on the date of grant. An exception to these requirements is made for options that we grant in substitution for options held byemployees of companies that we acquire. In such a case the exercise price is adjusted to preserve the economic value of the employee’s share option from his or herformer employer.The term of each share option is fixed by the compensation committee and may not exceed ten years from the date of grant. The compensation committeedetermines at what time or times each option may be exercised and the period of time, if any, after retirement, death, disability or termination of employment duringwhich options may be exercised.Options may be made exercisable in installments. The award agreement provides the vesting of the options. Exercisability of options may be accelerated bythe compensation committee.38In general, an optionee may pay the exercise price of an option by (1) cash or check (in U.S. dollars or Renminbi or other local currency as approved by thecompensation committee), (2) ordinary shares held for such period of time as may be required by the compensation committee, (3) delivery of a notice of a marketorder with a broker with respect to ordinary shares then issuable upon exercise of an option, and that the broker has been directed to pay us a sufficient portion ofnet proceeds of the sale in satisfaction of the exercise price, provided that payment of such proceeds is then made to us upon settlement of such sale, (4) otherproperty acceptable to the compensation committee with a fair market value equal to the exercise price, (5) cashless exercise or (6) any combination of the foregoing.Share options granted under the Incentive Plan may not be sold, transferred, pledged, or assigned other than by will or under applicable laws of descentand distribution. However, we may permit limited transfers of nonqualified options for the benefit of immediate family members of grantees to help with estateplanning concerns or pursuant to a domestic relations order in settlement of marital property rights.Other AwardsThe compensation committee may also award under the Incentive Plan:1.ordinary shares subject to restrictions;2.deferred ordinary shares, credited as deferred ordinary share units, but ultimately payable in the form of unrestricted ordinary shares inaccordance with the terms of the grant or with the participant’s deferral election;3.ordinary share units subject to restrictions;4.unrestricted ordinary shares, which are ordinary shares issued at no cost or for a purchase price determined by the compensation committee whichare free from any restrictions under the 2011 Omnibus Incentive Plan;5.dividend equivalent rights entitling the grantee to receive credits for dividends that would be paid if the grantee had held a specified number ofordinary shares; or6.a right to receive a number of ordinary shares or, in the discretion of the compensation committee, an amount in cash or a combination of ordinaryshares and cash, based on the increase in the fair market value of the ADSs representing ordinary shares underlying the right during a statedperiod specified by the compensation committee.Effect of Certain Corporate TransactionsCertain change of control transactions involving us may cause awards granted under the Incentive Plan to vest, unless the awards are continued orsubstituted for by the surviving company in connection with the corporate transaction.Unless otherwise provided in the appropriate option agreement on the date of grant or provided by our board of directors thereafter with the consent of thegrantee, options granted under the Incentive Plan become exercisable in full following (1) a dissolution of our company or a merger, consolidation or reorganizationof our company with one or more other entities in which we are not the surviving entity, (2) a sale of substantially all of our assets to another person or entity, or (3)any transaction (including without limitation a merger or reorganization in which we are the surviving entity) which results in any person or entity owning 50% ormore of the combined voting power of all classes of our shares.39Adjustments for Dividends and Similar EventsThe compensation committee will make appropriate adjustments in outstanding awards and the number of ordinary shares available for issuance under theIncentive Plan, including the individual limitations on awards, to reflect ordinary share dividends, stock splits and other similar events.C. BOARD PRACTICES.Board of DirectorsOur board of directors consists of six members being Messrs. Xuesong Song, Kegang Peng, Dennis Galgano, Jin Shi, Jiming Ha and Zhiaho Xu. Ourdirectors hold office until our annual meeting of shareholders, where their successors will be duly elected and qualified, or until the directors’ death, resignation orremoval, whichever is earlier. Our directors are not subject to a term of office and hold office until their resignation, death or incapacity or until their respectivesuccessors have been elected and qualified in accordance with our fourth amended and restated memorandum of association and articles of association. A directorwill be removed from office if, among other things, the director (1) becomes bankrupt, (2) dies or becomes of unsound mind, or (3) is absent from meetings of ourboard of directors for six consecutive months without leave and our board of directors resolves that the office is vacated. A director is not entitled to any specialbenefits upon termination of service with the company.Director IndependenceOur board of directors consists of six members; Messrs. Dennis Galgano, Jin Shi, Jiming Ha and Zhihao Xu have been determined by us to be independentdirectors within the meaning of the independent director guidelines of the NASDAQ Corporate Governance Rules (the “NASDAQ Rules”).Committees of Our Board of DirectorsTo enhance our corporate governance, we established three committees under our board of directors: an audit committee, a compensation committee, and anominating and corporate governance committee. We have adopted a charter for each of these committees. The committees have the following functions andmembers.Audit CommitteeOur audit committee reports to our board of directors regarding the appointment of our independent public accountants, the scope and results of ourannual audits, compliance with our accounting and financial policies and management’s procedures and policies relating to the adequacy of our internal accountingcontrols. Our audit committee consists of Messrs. Dennis Galgano, Jin Shi, and Jiming Ha. Mr. Galgano, having accounting and financial management expertise,serves as the chairman of the audit committee and is an “audit committee financial expert” as defined by the rules and regulations of the SEC. Our board of directorshas determined that each of these persons meet the definition of an “independent director” under the applicable NASDAQ Rules and under Rule 10A3 of theSecurities Exchange Act of 1934, as amended (the “Exchange Act”).Our audit committee is responsible for, among other things:●the appointment, evaluation, compensation, oversight and termination of the work of our independent auditor (including resolution of disagreementsbetween management and the independent auditor regarding financial reporting);●an annual performance evaluation of the audit committee;●establishing procedures for the receipt, retention and treatment of complaints regarding accounting, internal accounting controls, auditing matters orpotential violations of law, and the confidential, anonymous submission by our employees of concerns regarding questionable accounting or auditingmatters or potential violations of law;40●ensuring that it receives an transition report from our independent auditor describing our internal control procedures and any steps taken to deal withmaterial control deficiencies and attesting to the auditor’s independence and describing all relationships between the auditor and us;●reviewing our annual audited financial statements and quarterly financial statements with management and our independent auditor;●reviewing and approving all proposed related party transactions;●reviewing our policies with respect to risk assessment and risk management;●meeting separately and periodically with management and our independent auditor; and●reporting regularly to our board of directors.Compensation CommitteeOur compensation committee assists the board of directors in reviewing and approving the compensation structure of our directors and executive officers,including all forms of compensation to be provided to our directors and executive officers. In addition, the compensation committee reviews share compensationarrangements for all of our other employees. Members of the compensation committee are not prohibited from direct involvement in determining their owncompensation. Our chief executive officer is not permitted to be present at any committee meeting during which his or her compensation is deliberated. Ourcompensation committee consists of Dennis Galgano and Jin Shi, with Mr. Shi serving as the chairman of the compensation committee. Our board of directors hasdetermined that each of these persons meet the definition of “independent director” under the applicable requirements of the NASDAQ Rules.Our compensation committee is responsible for, among other things:●reviewing and approving corporate goals and objectives relevant to the compensation of our chief executive officer, evaluating the performance of ourchief executive officer in light of those goals and objectives and setting the compensation level of our chief executive officer based on this evaluation;●reviewing and making recommendations to the board with respect to the compensation of our executives, incentive compensation and equitybasedplans that are subject to board approval; and●providing annual performance evaluations of the compensation committee.Nominating and Corporate Governance CommitteeOur nominating and corporate governance committee assists the board of directors in identifying and selecting or recommending individuals qualified tobecome our directors, developing and recommending corporate governance principles and overseeing the evaluation of our board of directors and management. Ournominating and corporate governance committee consists of Jiming Ha and Zhihao Xue, with Mr. Ha serving as the chairman of the nominating and corporategovernance committee. Our board of directors has determined that each of these persons meet the definition of “independent director” under the applicablerequirements of the NASDAQ Rules.Our nominating and corporate governance committee is responsible for, among other things:●selecting and recommending to our board nominees for election or reelection to our board, or for appointment to fill any vacancy;●reviewing annually with our board the current composition of the board of directors with regards to characteristics such as independence, age, skills,experience and availability of service to us;●selecting and recommending to our board the names of directors to serve as members of the audit committee and the compensation committee, as wellas the nominating and corporate governance committee itself; advising our board of directors periodically with regards to significant developments inthe law and practice of corporate governance as well as our compliance with applicable laws and regulations, and making recommendations to ourboard of directors on all matters of corporate governance and on any remedial action to be taken; and●monitoring compliance with our code of business conduct and ethics, including reviewing the adequacy and effectiveness of our procedures to ensureproper compliance.41Code of Business Conduct and EthicsOur board of directors adopted a code of business conduct and ethics applicable to our directors, officers and employees.Duties of DirectorsUnder British Virgin Islands law, our directors have a duty to act honestly, in good faith and with a view to our best interests. Our directors also have a dutyto exercise care, diligence and skills that a reasonably prudent person would exercise in comparable circumstances. In fulfilling their duty of care to us, our directorsmust ensure compliance with our memorandum of association and articles of association. We have the right to seek damages if a duty owed by our directors isbreached.The functions and powers of our board of directors include, among others:●appointing officers and determining the term of office of the officers;●authorizing the payment of donations to religious, charitable, public or other bodies, clubs, funds or associations as deemed advisable;●exercising the borrowing powers of the company and mortgaging the property of the company;●executing cheques, promissory notes and other negotiable instruments on behalf of the company; and●maintaining or registering a register of mortgages, charges or other encumbrances of the company.Remuneration and BorrowingThe directors may receive such remuneration as our board of directors may determine from time to time. Each director is entitled to be repaid or prepaid alltraveling, hotel and incidental expenses reasonably incurred or expected to be incurred in attending meetings of our board of directors or committees of our board ofdirectors or shareholder meetings or otherwise in connection with the discharge of his or her duties as a director. The compensation committee will assist thedirectors in reviewing and approving the compensation structure for the directors.Our board of directors may exercise all the powers of the company to borrow money and to mortgage or charge our undertakings and property or any partthereof, to issue debentures, debenture stock and other securities whenever money is borrowed or as security for any debt, liability or obligation of the company orof any third party.QualificationA director is not required to hold shares as a qualification to office.42Limitation on Liability and Other Indemnification MattersBritish Virgin Islands law does not limit the extent to which a company’s memorandum of association and articles of association may provide forindemnification of officers and directors, except to the extent any such provision may be held by the British Virgin Islands courts to be contrary to public policy,such as to provide indemnification against civil fraud or the consequences of committing a crime.Under our memorandum of association and articles of association, we may indemnify our directors, officers and liquidators against all expenses, includinglegal fees, and against all judgments, fines and amounts paid in settlement and reasonably incurred in connection with civil, criminal, administrative or investigativeproceedings to which they are party or are threatened to be made a party by reason of their acting as our director, officer or liquidator. To be entitled toindemnification, these persons must have acted honestly and in good faith with a view to the best interest of the company and, in the case of criminal proceedings,they must have had no reasonable cause to believe their conduct was unlawful.Compensation Committee Interlocks and Insider ParticipationNone of the members of our compensation committee is an officer or employee of our company. None of our executive officers currently serves, or in thepast year has served, as a member of the board of directors or compensation committee of any entity that has one or more executive officers serving on our board ofdirectors or compensation committee.Employment AgreementsOn August 19, 2018, the Company entered into an Employment Agreement (the “Song Agreement”) with Mr. Xuesong Song, to serve as the ChiefExecutive Officer of the Company for a fouryear term, subject to renewal. Under the terms of the Song Agreement, Mr. Song will receive no salary for his servicesbut will be eligible for an annual cash bonus in the Board’s sole discretion.On August 19, 2018, the Company entered into an Employment Agreement (the “Yu Agreement”) with Mr. Jie Yu, to serve as the Chief Financial Officer ofthe Company for a fouryear term, subject to renewal. Under the terms of the Yu Agreement, Mr. Yu will receive an annual salary of RMB700,000, and will be eligiblefor an annual cash bonus in the Board’s sole discretion.D. EMPLOYEES.As of September 30, 2018 and December 31, 2017, we had a total of 107 and 37 fulltime employees, including 48 and 13 in research and development, 9 and 2in sales and marketing and the rest in a variety of other divisions, respectively. All of our employees are fulltime employees. None of our employees is currentlyrepresented by a union and/or collective bargaining agreements. We believe that we have good relations with our employees and since our inception we have hadno history of work stoppages or union organizing campaigns.E. SHARE OWNERSHIP.The following table provides information as to the beneficial ownership of our ordinary shares as of October 10, 2018, by the persons listed. Beneficialownership of shares is determined under the rules of the SEC and generally includes any shares over which a person exercises sole or shared voting or investmentpower. For purposes of the following table, a person is deemed to have beneficial ownership of any ordinary shares if such person has the right to acquire suchshares within 60 days of October 10, 2018. For purposes of computing the percentage of outstanding shares held by each person, any shares that such person hasthe right to acquire within 60 days after of October 10, 2018 are deemed to be outstanding, but are not deemed to be outstanding for the purpose of computing thepercentage ownership of any other person. Except as otherwise noted, the persons named in the table have sole voting and investment power with respect to all ofthe ordinary shares beneficially owned by them. Unless otherwise indicated, the address of each person listed is c/o Luokung Technologies, LAB 32, SOHO 3Q, No9, Guanghua Road, Chaoyang District, Beijing, People’s Republic of China.43Percentage ownership in the following table is based on 199,317,558 ordinary shares outstanding on October 10, 2018.Number ofsharesPercent ofclassDirectors and named executive officersCharm Dragon International Limited (1)4,030,8822.03%Xuesong Song, Chairman, Chief Executive Officer and Director(2)38,156,43019.30%Kegang Peng, Vice President and Director (3)17,231,9558.71%Dennis Galgano, Director75,796*%Jin Shi, DirectorJiming Ha, DirectorZhihao Xu, Director (4)7,579,1843.83%Dongpu Zhang, President (5)2,321,7921.17%Chuang Tao, Director (6)1,221,996*%Directors and executive officers as a group (10 persons)66,587,15233.69%(1)Charm Dragon International Limited is a British Virgin Islands company controlled by Mr. Xuesong Song.(2)Consists of (i) 4,030,882 shares owned directly by Charm Dragon International Limited, a British Virgin Islands company and (ii) 22,624,793 shares owneddirectly by Bravo First Development Limited, a British Virgin Islands company. Mr. Xuesong Song is the controlling shareholder of Bravo First DevelopmentLimited. Mr. Xuesong Song is the sole director of Charm Dragon International Limited.(3)Consists of 17,231,955 shares owned directly by Plenty Prestige Enterprises Limited, a British Virgin Islands company. Mr. Kegang Peng is the sole director ofPlenty Prestige Enterprises Limited.(4)Consists of 7,579,184 shares directly owned by Geely Group Limited., a Chinese company. Mr. Zhihao Xu is the Chief Executive Officer of Geely GroupLimited.(5)Consists of 2,321,792 shares owned directly by Genoa Peak Limited, a British Virgin Islands company. Mr. Dongpu Zhang controls Genoa Peak Limited.(6)Consists of 1,221,996 shares owned directly by Globalearth Holdings Limited, a British Virgin Islands company. Mr. Chuang Tao controls Globalearth HoldingsLimited.*Represents less than 1% of shares outstandingITEM 7. MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS.A. MAJOR SHAREHOLDERSPlease refer to Item 6.E “Directors, Senior Management and Employees — Share Ownership.”To our knowledge, (A) we are not directly or indirectly owned or controlled by (i) another corporation or (ii) any foreign government and (B) there are noarrangements (including any announced or expected takeover bid), the operation of which may at a subsequent date result in a change in our control.The voting rights of our major shareholders do not differ from the voting rights of other holders of the same class of shares.44B. RELATED PARTY TRANSACTIONS. BUSINESS RELATIONSHIPS.Our subsidiaries, consolidated affiliated entities, and the subsidiaries of the consolidated affiliated entities have engaged, during the ordinary course ofbusiness, in a number of customary transactions with each other. All of these intercompany balances have been eliminated in consolidation.As of December 31, 2017, we had amounts due from related parties, C Media Limited and Ya Tuo Ji International Consultancy (Beijing) Limited, in theamounts of $11.8 million and $0.2 million, respectively. These amounts due from related parties are short term in nature, noninterest bearing, unsecured andrepayable on demand.As of December 31, 2017, we had amounts due to related parties, Mr. Xuesong Song, our chairman and chief executive officer, Thumb Beijing Branch andThumb Shenzhen Branch, in the amounts of $2.9 million, $0.6 million and $0.03 million, respectively. These amounts due to related parties are short term in nature,noninterest bearing, unsecured and payable on demand.We are party to a series of control agreements with Beijing Zhong Chuan Shi Xun. In addition, our chief executive officer, Mr. Xuesong Song, serves as andofficer of Beijing Zhong Chuan Shi Xun and is a shareholder of Beijing Zhong Chuan Shi Xun. The following table sets forth the relationship of Mr. Song withBeijing Zhong Chuan Shi Xun:NameRelationship withLuokung TechnologyRelationship withBeijing Zhong Chuan Shi XunPercentageOwnership Interest inBeijing Zhong Chuan Shi XunXuesong SongChief Executive OfficerChief Executive Officer61.83%C. INTERESTS OF EXPERTS AND COUNSEL.None.ITEM 8. FINANCIAL INFORMATION.A. CONSOLIDATED STATEMENTS AND OTHER FINANCIAL INFORMATION.See “Item 18. Financial Statements.”Legal ProceedingsTo our knowledge, other than as described below there are no material legal proceedings threatened against us. From time to time, we may be subject tovarious claims and legal actions arising in the ordinary course of business. Following the consummation of the AEA, we became successor in interest to the legalproceedings described below.Litigation with Shanghai Fusheng Weier Intelligent Control Technology Co., Ltd.On January 22, 2016, Zhong Chuan Rui You and Shanghai Fusheng Weier Intelligent Control Technology Co., Ltd. (“Fusheng Weier”) signed a contract forequipment of $1,652,842 (RMB10,800,000). Since Zhong Chuan Rui You did not make the payments of $1,126,381 (RMB7,360,000) on the due dates, Fusheng Weierfiled a lawsuit against Zhong Chuan Rui You in Shanghai Xuhui District People's Court on October 8, 2016. On March 9, 2017, Xuhui District People's Court issuedthe verdict requiring Zhong Chuan Rui You to pay the overdue debts. In August 2017, C Media Limited made the payment of $512,075 (RMB3,346,000). Theremaining balance has been accrued in accounts payable. The payment schedule for the remaining balance is being negotiated by the two parties. On February 5,2018, a hearing was held adding Zhong Chuan Shi Xun as a defendant. The Group plans to settle the remaining balance within one year.45Lawsuit with Gansu Jinlun Culture Media Co., Ltd.On August 22, 2014, Zhong Chuan Rui You and Gansu Jinlun Culture Media Co., Ltd. (“Gansu Jinlun”) signed a “Lanzhou Railway Bureau AirconditionedTrain WiFi Network System Advertising Operation Rights Agreement” for advertising on 72 trains of $1,467,880 (RMB9,604,633). Due to the dispute on theproject implementation, Zhong Chuan Rui You did not pay the advertising fee. On August 23, 2017, Gansu Jinlun filed a lawsuit with Gansu Intermediate People'sCourt. On December 19, 2017, Gansu Intermediate People's Court issued a verdict, ruling that Zhong Chuan Rui You settle the overdue advertising fee. Since only 18out of 72 trains have been installed with Wifi network system, Zhong Chuan Rui You disputed and appealed to the verdict. The next court trial date has not yet beendetermined. C Media and Gansu Jinlun are negotiating a potential settlement to resume the contract. According to the legal counsel, it is probable that the settlementwill amount to approximately $459,000 (RMB3,000,000); therefore, this amount has been accrued in accounts payable as at December 31, 2017.Litigation with Shenzhen Hua Xun Fang Zhou Technology Co., Ltd.On June 16, 2015, Zhong Chuan Rui You signed a cooperation agreement with Shenzhen Hua Xun Fang Zhou Technology Co., Ltd. (“Shenzhen Hua Xun”)and Xuesong Song, a major shareholder of C Media Limited. Pursuant to this agreement, Zhong Chuan Rui You procures equipment from Shenzhen Hua Xun.Xuesong Song acts as a joint liability guarantor for the entire debts of Zhong Chuan Rui You under this agreement. As Zhong Chuan Rui You did not make thepayments on the due dates, Shenzhen Hua Xun filed a lawsuit with Shenzhen Baoan District People's Court on May 31, 2016. On November 1, 2016, Zhong ChuanRui You, Xuesong Song and Shenzhen Hua Xun reached a settlement in Shenzhen Baoan District People's Court to settle $1,735,389 (RMB11,355,000) in fourinstalments. On December 30, 2017, the debt was assigned to C Media Limited.Dividend PolicyWe currently intend to retain all of our available funds and future earnings for use in the operation and expansion of our business and do not anticipatepaying cash dividends in the foreseeable future. Under the terms of our Amended and Restated Memorandum and Articles of Association the declaration andpayment of any dividends in the future will be determined by our board of directors, in its discretion, and will depend on a number of factors, including our earnings,capital requirements and overall financial condition and our ability to receive dividends from our subsidiaries. If we pay any dividends, we will pay our ADS holders’dividends with respect to their underlying shares to the same extent as holders of our ordinary shares, subject to the terms of the deposit agreement, including thefees and expenses payable thereunder. Cash dividends on our ordinary shares, if any, will be paid in U.S. dollars.Our ability to receive dividends from our subsidiaries may limit our ability to pay dividends on our ordinary shares. See Risk Factors – Risks Related toDoing Business in China – Our holding company structure may limit the payment of dividends” and “Item 10. Additional Information – D. Exchange Controls –Dividend Distribution”.B. SIGNIFICANT CHANGES.N/AITEM 9. THE OFFER AND LISTINGA. OFFER AND LISTING DETAILS.Markets and Share Price HistoryOur ordinary shares are not currently listed on any trading market. Our American Depository Shares (“ADSs”) were voluntarily delisted from the NASDAQCapital Market on September 19, 2018. We have applied to NASDAQ for the listing of our ordinary shares on the NASDAQ Capital Market and received an approvalfor listing of Ordinary Shares on August 6, 2018, and as of the date of this transition report, that application and approval are currently under review.46The table below sets forth the high and low reported sales prices in dollars of our ordinary shares, which are represented by ADSs, as reported byNASDAQ in the periods as indicated:ADSHighLowAnnual Highs and Lows (as of the fiscal year end 09/30 for the five most recent full financial years)*20175.592.67201610.21.62Quarterly Highs and Lows (for the two most recent full financial years and any subsequent period, based on calendarquarter end)*2018Third Quarter8.006.30Second Quarter8.824.25First Quarter6.403.702017Fourth Quarter5.592.91Third Quarter3.992.67Second Quarter4.063.07First Quarter5.152.832016Fourth Quarter6.594.20Third Quarter10.201.62Second Quarter3.101.97First Quarter3.602.12Monthly Highs and Lows (for the most recent six months)September 20188.006.41August 20187.706.63July 20187.506.30June 20188.827.55May 20187.805.92April 20187.454.25*The Company effected a 1for10 reverse stock split of its ordinary shares on November 6, 2012 (the “Reverse Split”). The ratio between each AmericanDepositary Share (“ADS”) and its underlying ordinary share postReverse Split remains the same, namely, one ADR remains to represent one ordinary sharepost the Reverse Split. The price listed here after November 6, 2012 reflected the effect from the Reverse Split.B. PLAN OF DISTRIBUTION.Not Applicable.C. MARKETS.Our ordinary shares are not currently listed on any trading market. Our ADSs were voluntarily delisted from the NASDAQ Capital Market on September 19,2018. We have applied to NASDAQ for the listing of our ordinary shares on the NASDAQ Capital Market and received an approval for listing of Ordinary Shares onAugust 6, 2018, and as of the date of this transition report, that application and approval are currently under review.47D. SELLING SHAREHOLDERS.Not applicable.E. DILUTION.Not applicable.F. EXPENSES OF THE ISSUE.Not applicable.ITEM 10. ADDITIONAL INFORMATION.A. SHARE CAPITALNot applicable.B. MEMORANDUM AND ARTICLES OF ASSOCIATIONWe are a British Virgin Islands company incorporated with limited liability and our affairs are governed by the provisions of our memorandum of associationand articles of association, as amended and restated from time to time, and by the provisions of applicable British Virgin Islands law.Our memorandum of association and articles of association authorize the issuance of up to 251,000,000 shares, which are designated into (i) 250,000,000 ofordinary shares of the Company (“Ordinary Shares”), and (ii) 1,000,000 preferred shares of the Company (“Preferred Shares”), in each case with the rights,preferences and privileges as set out in the memorandum and articles of association of the Company.Please see below for a description of our ADSs under “Item 12. Description of Securities Other Than Equity Securities – D. American Depository Shares.”The following is a summary of the material provisions of our ordinary shares and our memorandum of association and articles of association.Ordinary SharesAll of our issued and outstanding ordinary shares are fully paid and nonassessable. Holders of our ordinary shares who are nonresidents of the BritishVirgin Islands may freely hold and vote their shares.Subject to the memorandum and articles of association (and, for greater clarity, without prejudice to any special rights conferred thereby on the holders ofany other shares), an Ordinary Share of the Company confers on the holder:(a)the right to one vote per Ordinary Share at a meeting of the members or on any resolution of members;(b)the right to an equal share in any distribution paid by the Company; and(c)the right to an equal share in the distribution of the surplus assets of the Company on a winding up;48Subject to the memorandum and articles of association (and, for greater clarity, without prejudice to any special rights conferred thereby on the holders ofany other shares), a Preferred Share of the Company confers on the holder:(a)the right to 399 votes per Preferred Share at a meeting of the members or on any resolution of members;(b)the right to an equal share in any distribution paid by the Company;(c)the right to an equal share in the distribution of the surplus assets of the Company on a winding up;(d)be freely transferable, in whole or in part, by Mr. Xuesong Song to any third party through one or more Private Transactions, subject toApplicable Law; and(e)be freely transferable, in whole or in part, by Mr. Xuesong Song to any third party through one or more Public Transactions, subject to ApplicableLaw and Automatic Conversion of such Preferred Share(s) into Ordinary Share(s).Each Preferred Share shall be automatically converted at any time after issue and without the payment of any additional sum into an equal number of fullypaid Ordinary Shares upon the conclusion of any transfer by Mr. Xuesong Song to any third party through one or more Public Transactions.Limitation on Liability and Indemnification MattersUnder British Virgin Islands law, each of our directors and officers, in performing his or her functions, is required to act honestly and in good faith with aview to our best interests and exercise the care, diligence and skill that a reasonably prudent person would exercise in comparable circumstances. Our memorandumof association and articles of association provide that, to the fullest extent permitted by British Virgin Islands law or any other applicable laws, our directors will notbe personally liable to us or our shareholders for any acts or omissions in the performance of their duties. Such limitation of liability does not affect the availabilityof equitable remedies such as injunctive relief or rescission. These provisions will not limit the liability of directors under United States federal securities laws.We may indemnify any of our directors or anyone serving at our request as a director of another entity against all expenses, including legal fees, andagainst all judgments, fines and amounts paid in settlement and reasonably incurred in connection with legal, administrative or investigative proceedings. We mayonly indemnify a director if he or she acted honestly and in good faith with the view to our best interests and, in the case of criminal proceedings, the director hadno reasonable cause to believe that his or her conduct was unlawful. The decision of our board of directors as to whether the director acted honestly and in goodfaith with a view to our best interests and as to whether the director had no reasonable cause to believe that his or her conduct was unlawful, is in the absence offraud sufficient for the purposes of indemnification, unless a question of law is involved. The termination of any proceedings by any judgment, order, settlement,conviction or the entry of no plea does not, by itself, create a presumption that a director did not act honestly and in good faith and with a view to our best interestsor that the director had reasonable cause to believe that his or her conduct was unlawful. If a director to be indemnified has been successful in defense of anyproceedings referred to above, the director is entitled to be indemnified against all expenses, including legal fees, and against all judgments, fines and amounts paidin settlement and reasonably incurred by the director or officer in connection with the proceedings.We may purchase and maintain insurance in relation to any of our directors or officers against any liability asserted against the directors or officers andincurred by the directors or officers in that capacity, whether or not we have or would have had the power to indemnify the directors or officers against the liabilityas provided in our memorandum of association and articles of association.Insofar as indemnification for liabilities arising under the Securities Act may be permitted for our directors or officers under the foregoing provisions, wehave been informed that in the opinion of the Securities and Exchange Commission, such indemnification is against public policy as expressed in the Securities Actand is therefore unenforceable as a matter of United States law.49Differences in Corporate LawWe were incorporated under, and are governed by, the laws of the British Virgin Islands. The corporate statutes of the State of Delaware and the BritishVirgin Islands are similar, and the flexibility available under British Virgin Islands law has enabled us to adopt memorandum of association and articles of associationthat will provide shareholders with rights that do not vary in any material respect from those they would enjoy if we were incorporated under the Delaware GeneralCorporation Law, or Delaware corporate law. Set forth below is a summary of some of the differences between provisions of the BVI Act applicable to us and thelaws application to companies incorporated in Delaware and their shareholders.Director’s Fiduciary DutiesUnder Delaware corporate law, a director of a Delaware corporation has a fiduciary duty to the corporation and its stockholders. This duty has twocomponents: the duty of care and the duty of loyalty. The duty of care requires that a director act in good faith, with the care that an ordinarily prudent personwould exercise under similar circumstances. Under this duty, a director must inform himself of, and disclose to stockholders, all material information reasonablyavailable regarding a significant transaction. The duty of loyalty requires that a director act in a manner he reasonably believes to be in the best interests of thecorporation. He must not use his corporate position for personal gain or advantage. This duty prohibits selfdealing by a director and mandates that the bestinterest of the corporation and its stockholders take precedence over any interest possessed by a director, officer or controlling stockholder and not shared by thestockholders generally. In general, actions of a director are presumed to have been made on an informed basis, in good faith and in the honest belief that the actiontaken was in the best interests of the corporation. However, this presumption may be rebutted by evidence of a breach of one of the fiduciary duties. Should suchevidence be presented concerning a transaction by a director, a director must prove the procedural fairness of the transaction, and that the transaction was of fairvalue to the corporation.British Virgin Islands law provides that every director of a British Virgin Islands company in exercising his powers or performing his duties shall acthonestly and in good faith and in what the director believes to be in the best interests of the company. Additionally, the director shall exercise the care, diligence andskill that a reasonable director would exercise in the same circumstances taking into account the nature of the company, the nature of the decision and the positionof the director and his responsibilities. In addition, British Virgin Islands law provides that a director shall exercise his powers as a director for a proper purpose andshall not act, or agree to the company acting, in a manner that contravenes British Virgin Islands law or the memorandum association or articles of association of thecompany.Amendment of Governing DocumentsUnder Delaware corporate law, with very limited exceptions, a vote of the stockholders is required to amend the certificate of incorporation. Under BritishVirgin Islands law and our memorandum of association and articles of association, (i) our shareholders may amend our memorandum of association and articles ofassociation by a resolution of shareholders, or (ii) our board of directors may amend our memorandum of association and articles of association by a resolution ofdirectors without a requirement for a resolution of shareholders so long as the amendment does not:●restrict the rights of the shareholders to amend the memorandum of association and articles of association;●change the percentage of shareholders required to pass a resolution of shareholders to amend the memorandum of association and articles ofassociation;●amend the memorandum of association and articles of association in circumstances where the memorandum of association and articles ofassociation cannot be amended by the shareholders; or●amend the provisions of memorandum of association or the articles of association pertaining to “rights attaching to shares,” “rights not varied bythe issue of the shares pari passu,” “variation of rights” and “amendment of memorandum and articles”.50Written Consent of DirectorsUnder Delaware corporate law, directors may act by written consent only on the basis of a unanimous vote. Under British Virgin Islands law, directors’consents need only a majority of directors signing to take effect.Written Consent of ShareholdersUnder Delaware corporate law, unless otherwise provided in the certificate of incorporation, any action to be taken at any annual or special meeting ofstockholders of a corporation, may be taken by written consent of the holders of outstanding stock having not less than the minimum number of votes that wouldbe necessary to take such action at a meeting. As permitted by British Virgin Islands law, shareholders’ consents need only a majority of shareholders signing totake effect. Our memorandum of association and articles of association provide that shareholders may approve corporate matters by way of a resolution consentedto at a meeting of shareholders or in writing by a majority of shareholders entitled to vote thereon.Shareholder ProposalsUnder Delaware corporate law, a shareholder has the right to put any proposal before the annual meeting of shareholders, provided it complies with thenotice provisions in the governing documents. A special meeting may be called by the board of directors or any other person authorized to do so in the governingdocuments, but shareholders may be precluded from calling special meetings. British Virgin Islands law and our memorandum of association and articles ofassociation provide that our directors shall call a meeting of the shareholders if requested in writing to do so by shareholders entitled to exercise at least 30% of thevoting rights in respect of the matter for which the meeting is requested.Sale of AssetsUnder Delaware corporate law, a vote of the stockholders is required to approve the sale of assets only when all or substantially all assets are being sold. Inthe British Virgin Islands, shareholder approval is required when more than 50% of the company’s total assets by value are being disposed of or sold.Dissolution; Winding UpUnder Delaware corporate law, unless the board of directors approves the proposal to dissolve, dissolution must be approved by shareholders holding100% of the total voting power of the corporation. Only if the dissolution is initiated by the board of directors may it be approved by a simple majority of thecorporation’s outstanding shares. Delaware corporate law allows a Delaware corporation to include in its certificate of incorporation a supermajority votingrequirement in connection with dissolutions initiated by the board. As permitted by British Virgin Islands law and our memorandum of association and articles ofassociation, we may be voluntarily liquidated under Part XII of the BVI Act by resolution of directors and resolution of shareholders if we have no liabilities and weare able to pay our debts as they fall due.Redemption of SharesUnder Delaware corporate law, any stock may be made subject to redemption by the corporation at its option or at the option of the holders of such stockprovided there remains outstanding shares with full voting power. Such stock may be made redeemable for cash, property or rights, as specified in the certificate ofincorporation or in the resolution of the board of directors providing for the issue of such stock. As permitted by British Virgin Islands law, and our memorandum ofassociation and articles of association, shares may be repurchased, redeemed or otherwise acquired by us. Our directors must determine that immediately followingthe redemption or repurchase we will be able to satisfy our debts as they fall due and the value of our assets exceeds our liabilities.51Variation of Rights of SharesUnder Delaware corporate law, a corporation may vary the rights of a class of shares with the approval of a majority of the outstanding shares of suchclass, unless the certificate of incorporation provides otherwise. As permitted by British Virgin Islands law, and our memorandum of association and articles ofassociation, if our share capital is divided into more than one class of shares, we may vary the rights attached to any class only with the consent in writing ofholders of not less than threefourths of the issued shares of that class and holders of not less than threefourths of the issued shares of any other class of shareswhich may be affected by the variation.Removal of DirectorsUnder Delaware corporate law, a director of a corporation with a classified board may be removed only for cause with the approval of a majority of theoutstanding shares entitled to vote, unless the certificate provides otherwise. As permitted by British Virgin Islands law and our memorandum of association andarticles of association, directors may be removed by resolution of directors or resolution of shareholders.MergersUnder the BVI Act, two or more companies may merge or consolidate in accordance with the statutory provisions. A merger means the merging of two ormore constituent companies into one of the constituent companies, and a consolidation means the uniting of two or more constituent companies into a newcompany. In order to merger or consolidate, the directors of each constituent company must approve a written plan of merger or consolidation which must beauthorized by a resolution of shareholders.Shareholders not otherwise entitled to vote on the merger or consolidation may still acquire the right to vote if the plan of merger or consolidation containsany provision which, if proposed as an amendment to the memorandum association or articles of association, would entitle them to vote as a class or series on theproposed amendment. In any event, all shareholders must be given a copy of the plan of merger or consolidation irrespective of whether they are entitled to vote atthe meeting or consent to the written resolution to approve the plan of merger or consolidation.Inspection of Books and RecordsUnder Delaware corporate law, any shareholder of a corporation may for any proper purpose inspect or make copies of the corporation’s stock ledger, list ofshareholders and other books and records. Holders of our shares have no general right under British Virgin Islands law to inspect or obtain copies of our list ofshareholders or our corporate records. However, we will provide holders of our shares with annual audited financial statements. See “Where You Can FindAdditional Information.”Conflict of InterestThe BVI Act provides that a director shall, after becoming aware that he is interested in a transaction entered into or to be entered into by the company,disclose that interest to the board of directors of the company. The failure of a director to disclose that interest does not affect the validity of a transaction enteredinto by the director or the company, so long as the director’s interest was disclosed to the board prior to the company’s entry into the transaction or was notrequired to be disclosed (for example where the transaction is between the company and the director himself or is otherwise in the ordinary course of business andon usual terms and conditions). As permitted by British Virgin Islands law and our memorandum of association and articles of association, a director interested in aparticular transaction may vote on it, attend meetings at which it is considered, and sign documents on our behalf which relate to the transaction.52Transactions with Interested ShareholdersDelaware corporate law contains a business combination statute applicable to Delaware public corporations whereby, unless the corporation hasspecifically elected not to be governed by such statute by amendment to its certificate of incorporation, it is prohibited from engaging in certain businesscombinations with an “interested shareholder” for three years following the date that such person becomes an interested shareholder. An interested shareholdergenerally is a person or group who or that owns or owned 15% or more of the target’s outstanding voting stock within the past three years. This has the effect oflimiting the ability of a potential acquirer to make a twotiered bid for the target in which all shareholders would not be treated equally. The statute does not apply if,among other things, prior to the date on which such shareholder becomes an interested shareholder, the board of directors approves either the businesscombination or the transaction that resulted in the person becoming an interested shareholder. This encourages any potential acquirer of a Delaware publiccorporation to negotiate the terms of any acquisition transaction with the target’s board of directors.British Virgin Islands law has no comparable provision. As a result, we cannot avail ourselves of the types of protections afforded by the Delawarebusiness combination statute. However, although British Virgin Islands law does not regulate transactions between a company and its significant shareholders, itdoes provide that such transactions must be entered into bona fide in the best interests of the company and not with the effect of constituting a fraud on theminority shareholders.Independent DirectorsThere are no provisions under Delaware corporate law or under the BVI Act that require a majority of our directors to be independent.Cumulative VotingUnder Delaware corporate law, cumulative voting for elections of directors is not permitted unless the company’s certificate of incorporation specificallyprovides for it. Cumulative voting potentially facilitates the representation of minority shareholders on a board of directors since it permits the minority shareholderto cast all the votes to which the shareholder is entitled on a single director, which increases the shareholder’s voting power with respect to electing such director.There are no prohibitions to cumulative voting under the laws of the British Virgin Islands, but our memorandum of association and articles of association do notprovide for cumulative votingAntitakeover Provisions in Our Memorandum of association and articles of associationSome provisions of our memorandum of association and articles of association may discourage, delay or prevent a change in control of our company ormanagement that shareholders may consider favorable, including provisions that authorize our board of directors to issue preference shares in one or more seriesand to designate the price, rights, preferences, privileges and restrictions of such preference shares.C. MATERIAL CONTRACTS.On January 25, 2018, the Company executed an Asset Exchange Agreement (“AEA”) with C Media Limited, a corporation organized under the laws of theCayman Islands (“C Media”), whereby the Company agreed to purchase all the capital stock and equity interests of LK Technology Ltd, together with its whollyowned subsidiaries MMB Limited and Mobile Media (China) Limited and all respective subsidiaries from C Media in exchange for (i) 185,412,599 ordinary shares ofthe Company, par value $0.01 per share (“Ordinary Shares”), (ii) 1,000,000 preferred shares of Kingtone (“Preferred Shares”) and (iii) all issued and outstandingcapital stock or equity interests of the Company’s subsidiary, Topsky InfoTech Holdings Pte Ltd., and its whollyowned subsidiary Xi’an Softech Co., Ltd.,including all entities effectively controlled by Xi’an Softech Co., Ltd. through contractual arrangements and variable business entities.To consummate the contemplated transactions described above, the Company obtained shareholder consent at a special meeting held on May 20, 2018, (i)to authorize 1,000,000 Preferred Shares, (ii) to authorize additional Ordinary Shares so that total authorized Ordinary Shares is equal to 250,000,000 shares, (iii) to listsuch Ordinary Shares on NASDAQ, and (iv) to approve the transactions contemplated in the Asset Exchange Agreement. Additionally, NASDAQ needed toapprove the contemplated transactions prior to consummation thereof. C Media had the right to terminate the AEA if the closing had not occurred (other thanthrough the failure of C Media to comply fully with its obligations under the AEA) on or before July 31, 2018. The transactions contemplated by the AEA wereconsummated on August 17, 2018.53On January 25, 2018, five shareholders of the Company including its largest shareholder and its Chief Executive Officer executed a Securities PurchaseAgreement, whereby such shareholders agreed to sell a total of 617,988 Ordinary Shares and 282,694 American Depository Shares of the Company to Redstone YYLManagement Limited, a company incorporated in the British Virgin Islands, in exchange for an aggregate purchase price of $1,897,860.09.On August 25, 2018, LK Technology entered into a Stock Purchase Agreement (the “Agreement”) with the shareholders (“Shareholders”) of SuperengineHoldings Limited, a limited liability company organized under the laws of the British Virgin Islands (the “Superengine”), pursuant to which LK Technology acquiredall of the issued and outstanding capital stock of Superengine for an aggregate purchase price of US$60 million (the “Purchase Price”), which are paid by theissuance of our Ordinary Shares in an amount equal to the quotient of (x) the Purchase Price divided by (y) the average of the closing prices of the Ordinary Shareson the NASDAQ Capital Market over the 12 months period preceding July 31, 2018. We are a party to the Agreement in connection with the issuance of theOrdinary Shares and certain other limited purposes.D. EXCHANGE CONTROLS.This section sets forth a summary of the most significant regulations or requirements that affect our business activities in China or our shareholders’ rightto receive dividends and other distributions from us.Regulations on Internet Content ProvidersThe Administrative Measures on Internet Information Services, or the Internet Content Measures, which was promulgated by the State Council onSeptember 25, 2000 and amended on January 8, 2011, set out guidelines on the provision of internet information services. The Internet Content Measures specifiesthat internet information services regarding news, publications, education, medical and health care, pharmacy and medical appliances, among other things, arerequired to be examined, approved and regulated by the relevant authorities. Internet information providers are prohibited from providing services beyond thoseincluded in the scope of their licenses or filings. Furthermore, the Internet Content Measures specifies a list of prohibited content. Internet information providers areprohibited from producing, copying, publishing or distributing information that is humiliating or defamatory to others or that infringes the legal rights of others.Internet information providers that violate such prohibition may face criminal charges or administrative sanctions. Internet information providers must monitor andcontrol the information posted on their websites. If any prohibited content is found, they must remove the content immediately, keep a record of such content andreport to the relevant authorities.The Internet Content Measures classifies internet information services into commercial internet information services and noncommercial internetinformation services. Commercial internet information services refer to services that provide information or services to internet users with charge. A provider ofcommercial internet information services must obtain an ICP License.Regulations on Internet Audiovideo Program ServicesOn December 20, 2007, the MII and the State Administration of Press, Publication, Radio, Film and Television, or the SAPPRFT, jointly issued theAdministrative Provisions for the Internet AudioVideo Program Service, or the Audiovideo Program Provisions, which came into effect on January 31, 2008 andwas amended on August 28, 2015. The Audiovideo Program Provisions defines “internet audiovideo program services” as producing, editing and integrating ofaudiovideo programs, supplying audiovideo programs to the public via the internet, and providing audiovideo programs uploading and transmission services to athird party. Entities providing internet audiovideo programs services must obtain an internet audiovideo program transmission license. Applicants for such licensesshall be stateowned or statecontrolled entities unless an internet audiovideo program transmission license has been obtained prior to the effectiveness of theAudiovideo Program Provisions in accordance with the thenineffect laws and regulations. In addition, foreigninvested enterprises are not allowed to engage inthe abovementioned services. According to the Audiovideo Program Provisions and other relevant laws and regulations, audiovideo programs provided by theentities supplying Internet audiovideo program services shall not contain any illegal content or other content prohibited by the laws and regulations, such as anycontent against the basic principles in the PRC Constitution, any content that damages the sovereignty of the country or national security, and any content thatdisturbs social order or undermine social stability. An audiovideo program that has already been broadcast shall be retained in full for at least 60 days. Movies,television programs and other media content used as Internet audiovideo programs shall comply with relevant administrative regulations on programs broadcaststhrough radio, movie and television channels. Entities providing services related to Internet audiovideo programs shall immediately delete the audiovideoprograms violating laws and regulations, keep relevant records, report relevant authorities and implement other regulatory requirements.54The Categories of the Internet AudioVideo Program Services, or the Audiovideo Program Categories, promulgated by SAPPRFT on March 10, 2017,classifies internet audio/video programs into four categories: (I) Category I internet audio/video program service, which is carried out with a form of radio station ortelevision station; (II) Category II internet audio/video program service, including (a) rebroadcasting service of current political news audio/video programs; (b)hosting, interviewing, reporting and commenting service of arts, entertainment, technology, finance and economics, sports, education and other specializedaudio/video programs; (c) producing (interviewing not included) and broadcasting service of arts, entertainment, technology, finance and economics, sports,education and other specialized audio/video programs; (d) producing and broadcasting service of internet films/dramas; (e) aggregating and broadcasting service offilms, television dramas and cartoons; (f) aggregating and broadcasting service of arts, entertainment, technology, finance and economics, sports, education andother specialized audio/video programs; and (g) live audio/video broadcasting service of cultural activities of common social organizations, sport events or otherorganization activities; and (III) Category III internet audio/video program service, including (a) aggregating service of online audio/video contents, and (b) rebroadcasting service of the audio/video programs uploaded by internet users; and (IV) Category III internet audio/video program service, including (a) rebroadcasting of the radio/television program channels; and (b) rebroadcasting of internet audio/video program channels.On May 27, 2016, the SAPPRFT issued the Notice on Relevant Issues concerning Implementing the Approval Works of Upgrading Mobile Internet AudioVideo Program Service, or the Mobile AudioVideo Program Notice. The Mobile AudioVideo Program Notice provides that the mobile Internet audiovideo programservices shall be deemed Internet audiovideo program service. Entities which have obtained the approvals to provide the Internet audiovideo program servicesmay use mobile WAP websites or mobile applications to provide audiovideo program services. Entities with regulatory approvals may operate mobile applicationsto provide the audiovideo program services The types of the programs shall be within the permitted scope as provided in the licenses and such mobile applicationsshall be filed with the SAPPRFT.Regulations on Production and Operation of Radio/Television ProgramsOn July 19, 2004, the SAPPRFT promulgated the Administrative Measures on the Production and Operation of Radio and Television Programs, or the Radioand Television Program Production Measures, which came into effect on August 20, 2004 and was amended on August 28, 2015. The Radio and Television ProgramProduction Measures provides that any business that produces or operates radio or television programs must first obtain a Radio and Television ProgramProduction and Operation Permit. Entities holding such permits shall conduct their business within the permitted scope as provided in their permits. In addition,foreigninvested enterprises are not allowed to engage in the abovementioned services.Regulations on Online Advertising ServicesOn April 24, 2015, the Standing Committee of the National People’s Congress enacted the Advertising Law of the People’s Republic of China, or the NewAdvertising Law, effective on September 1, 2015. The New Advertising Law increases the potential legal liability of advertising services providers and strengthensregulations of false advertising. On July 4, 2016, the State Administration for Industry and Commerce, or the SAIC, issued the Interim Measures of theAdministration of Online Advertising, or the SAIC Interim Measures, effective on September 1, 2016. The New Advertising Law and the SAIC Interim Measuresrequire that online advertisements may not affect users’ normal internet use and internet popup ads must display a “close” sign prominently and ensure onekeyclosing of the popup windows. The SAIC Interim Measures provides that all online advertisements must be marked “Advertisement” so that viewers can easilyidentify them as such. Moreover, the SAIC Interim Measures treats paid search results as advertisements that are subject to PRC advertisement laws, and requiresthat paid search results be conspicuously identified on search result pages as advertisements. The New Advertising Law and SAIC Interim Measures require us toconduct more stringent examination and monitoring of our advertisers and the content of their advertisements.55Regulations on Online GamesIn September 2009, the GAPP (currently known as the SAPPRFT), together with the National Copyright Administration, and the National Office ofCombating Pornography and Illegal Publications jointly issued the Notice on Further Strengthening on the Administration of Preexamination and Approval ofOnline Game and the Examination and Approval of Imported Online Game, or the Circular 13. The Circular 13 states that foreign investors are not permitted to investin online game operating businesses in the PRC via wholly foreignowned entities, Sinoforeign equity joint ventures or cooperative joint ventures or to exercisecontrol over or participate in the operation of domestic online game businesses through indirect means, such as other joint venture companies or contractual ortechnical arrangements. If the our contractual arrangements were deemed under the Circular 13 to be an “indirect means” for foreign investors to exercise controlover or participate in the operation of a domestic online game business, our contractual arrangements might be challenged by the SAPPRFT. We are not aware ofany online game companies which use the same or similar contractual arrangements having been challenged by the SAPPRFT as using those contractualarrangements as an “indirect means” for foreign investors to exercise control over or participate in the operation of a domestic online game business or having beenpenalized or ordered to terminate operations since the Circular 13 became effective. However it is unclear whether and how the Circular 13 might be interpreted orimplemented in the future. See “Risk Factors—If the PRC government finds that the agreements that establish the structure for operating certain of our operations inChina do not comply with PRC regulations relating to the relevant industries, or if these regulations or the interpretation of existing regulations change in the future,we could be subject to severe penalties or be forced to relinquish our interests in those operations.”The Interim Measures for the Administration of Online Games, or the Online Game Measures, issued by the MOC, which took effect on August 1, 2010 andamended on December 15, 2017, regulates a broad range of activities related to the online games business, including the development, production and operation ofonline games, the issuance of virtual currencies used for online games, and the provision of virtual currency trading services. The Online Game Measures providesthat any entity that is engaged in online game operations must obtain an Network Cultural Business Permit, and require the content of an imported online game to beexamined and approved by the MOC prior to the game’s launch and require a domestic online game to be filed with the MOC within 30 days after its launch. TheNotice of the Ministry of Culture on the Implementation of the Interim Measures for the Administration of Online Games, which was issued by the MOC on July 29,2010 to implement the Online Game Measures, (i) requires online game operators to protect the interests of online game users and specifies that certain terms thatmust be included in service agreements between online game operators and the users of their online games, (ii) requires content review of imported online gamesand filing procedures for domestic online games, (iii) emphasizes the protection of minors playing online games, and (iv) requests online game operators to promoterealname registration by their game users.Regulations on Information Security, Censorship and PrivacyThe Standing Committee of the National People’s Congress, China’s national legislative body, enacted the Decisions on the Maintenance of InternetSecurity on December 28, 2000 that may subject persons to criminal liabilities in China for any attempt to use the internet to: (i) gain improper entry to a computer orsystem of strategic importance; (ii) disseminate politically disruptive information; (iii) leak state secrets; (iv) spread false commercial information or (v) infringe uponintellectual property rights. In 1997, the Ministry of Public Security issued the Administration Measures on the Security Protection of Computer InformationNetwork with International Connections which prohibits using the internet to leak state secrets or to spread socially destabilizing materials. If an ICP license holderviolates these measures, the PRC government may revoke its ICP license and shut down its websites. Pursuant to the Ninth Amendment to the Criminal Law issuedby the Standing Committee of the National People’s Congress on August 29, 2015, effective on November 1, 2015, any ICP provider that fails to fulfill the obligationsrelated to internet information security as required by applicable laws and refuses to take corrective measures, will be subject to criminal liability for (i) any largescale dissemination of illegal information; (ii) any severe effect due to the leakage of users’ personal information; (iii) any serious loss of evidence of criminalactivities; or (iv) other severe situations, and any individual or entity that (i) sells or provides personal information to others unlawfully or (ii) steals or illegallyobtains any personal information will be subject to criminal liability in severe situations.56The Cybersecurity Law of the PRC, or the Cybersecurity Law, which was promulgated on November 7, 2016 by the Standing Committee of the NationalPeople’s Congress and came into effect on June 1, 2017, provides that network operators shall meet their cyber security obligations and shall take technicalmeasures and other necessary measures to protect the safety and stability of their networks. Under the Cybersecurity Law, network operators are subject to varioussecurity protectionrelated obligations, including: (i) network operators shall comply with certain obligations regarding maintenance of the security of internetsystems; (ii) network operators shall verify users’ identities before signing agreements or providing certain services such as information publishing or realtimecommunication services; (iii) when collecting or using personal information, network operators shall clearly indicate the purposes, methods and scope of theinformation collection, the use of information collection, and obtain the consent of those from whom the information is collected; (iv) network operators shall strictlypreserve the privacy of user information they collect, and establish and maintain systems to protect user privacy; (v) network operators shall strengthenmanagement of information published by users, and when they discover information prohibited by laws and regulations from publication or dissemination, theyshall immediately stop dissemination of that information, including taking measures such as deleting the information, preventing the information from spreading,saving relevant records, and reporting to the relevant governmental agencies.Regulations on Intellectual Property RightsRegulations on CopyrightThe Copyright Law of the PRC, or the Copyright Law, which took effect on June 1, 1991 and was amended in 2001 and in 2010, provides that Chinesecitizens, legal persons, or other organizations shall, whether published or not, own copyright in their copyrightable works, which include, among others, works ofliterature, art, natural science, social science, engineering technology and computer software. Copyright owners enjoy certain legal rights, including right ofpublication, right of authorship and right of reproduction. The Copyright Law as revised in 2010 extends copyright protection to Internet activities, productsdisseminated over the Internet and software products. In addition, Copyright Law provides for a voluntary registration system administered by the China CopyrightProtection Center, or the CPCC. According to the Copyright Law, an infringer of the copyrights shall be subject to various civil liabilities, which include ceasinginfringement activities, apologizing to the copyright owners and compensating the loss of copyright owner. Infringers of copyright may also subject to fines and/oradministrative or criminal liabilities in severe situations.The Computer Software Copyright Registration Measures, or the Software Copyright Measures, promulgated by the State Council on December 20, 2001and amended on January 30, 2013, regulates registrations of software copyright, exclusive licensing contracts for software copyright and assignment agreements.The National Copyright Administration, or the NCA administers software copyright registration and the CPCC, is designated as the software registration authority.The CPCC shall grant registration certificates to the Computer Software Copyrights applicants which meet the requirements of both the Software CopyrightMeasures and the Computer Software Protection Regulations (Revised in 2013).The Provisions of the Supreme People’s Court on Certain Issues Related to the Application of Law in the Trial of Civil Cases Involving Disputes onInfringement of the Information Network Dissemination Rights specifies that disseminating works, performances or audiovideo products by the internet users orthe internet service providers via the internet without the permission of the copyright owners shall be deemed to have infringed the right of dissemination of thecopyright owner.57The Measures for Administrative Protection of Copyright Related to Internet, which was jointly promulgated by the NCA and the MIIT on April 29, 2005and became effective on May 30, 2005, provides that upon receipt of an infringement notice from a legitimate copyright holder, an ICP operator must take remedialactions immediately by removing or disabling access to the infringing content. If an ICP operator knowingly transmits infringing content or fails to take remedialactions after receipt of a notice of infringement that harms public interest, the ICP operator could be subject to administrative penalties, including an order to ceaseinfringing activities, confiscation by the authorities of all income derived from the infringement activities, or payment of fines.On May 18, 2006, the State Council promulgated the Regulations on the Protection of the Right to Network Dissemination of Information (as amended in2013). Under these regulations, an owner of the network dissemination rights with respect to written works or audio or video recordings who believes thatinformation storage, search or link services provided by an Internet service provider infringe his or her rights may require that the Internet service provider delete, ordisconnect the links to, such works or recordings.Patent LawsAccording to the Patent Law of the PRC (Revised in 2008), the State Intellectual Property Office is responsible for administering patent law in the PRC. Thepatent administration departments of provincial, autonomous region or municipal governments are responsible for administering patent law within their respectivejurisdictions. The Chinese patent system adopts a firsttofile principle, which means that when more than one person file different patent applications for the sameinvention, only the person who files the application first is entitled to obtain a patent of the invention. To be patentable, an invention or a utility model must meetthree criteria: novelty, inventiveness and practicability. A patent is valid for twenty years in the case of an invention and ten years in the case of utility models anddesigns.Trademark LawsTrademarks are protected by the Trademark Law of the PRC (Revised in 2013) which was adopted in 1982 and subsequently amended in 1993, 2001 and 2013respectively as well as by the Implementation Regulations of the PRC Trademark Law adopted by the State Council in 2002 and as most recently amended on April29, 2014. The Trademark Office under the SAIC handles trademark registrations. The Trademark Office grants a tenyear term to registered trademarks and the termmay be renewed for another tenyear period upon request by the trademark owner. A trademark registrant may license its registered trademarks to another party byentering into trademark license agreements, which must be filed with the Trademark Office for its record. As with patents, the Trademark Law has adopted a firsttofile principle with respect to trademark registration. If a trademark applied for is identical or similar to another trademark which has already been registered or subjectto a preliminary examination and approval for use on the same or similar kinds of products or services, such trademark application may be rejected. Any personapplying for the registration of a trademark may not injure existing trademark rights first obtained by others, nor may any person register in advance a trademark thathas already been used by another party and has already gained a “sufficient degree of reputation” through such party’s use.Regulations on Domain NamesThe MIIT promulgated the Measures on Administration of Internet Domain Names, or the Domain Name Measures, on August 24, 2017, which took effecton November 1, 2017 and replaced the Administrative Measures on China Internet Domain Name promulgated by MII on November 5, 2004. According to theDomain Name Measures, the MIIT is in charge of the administration of PRC internet domain names. The domain name registration follows a firsttofile principle.Applicants for registration of domain names shall provide the true, accurate and complete information of their identities to domain name registration serviceinstitutions. The applicants will become the holder of such domain names upon the completion of the registration procedure.Relevant Regulations of the Hightech EnterpriseThe Ministry of Information Industry, the Ministry of Science and Technology and the State Tax Bureau collectively promulgated and issued the“Certifying Standard and Managing Measures for Hightech Enterprises” and “the Hightech Areas of Main National Support” on April 14, 2008 to certify the Hightech enterprise and encourage and support the development of the Chinese Hightech enterprises. Under the Hightech Enterprises Measures, the enterprise canenjoy the favorable tax policy when it is certified as a Hightech enterprise by the Ministry of Information Industry, the Ministry of Science and Technology and theState Tax Bureau or with its provincial branch according to the stipulated standard. The software and computer and network technology are recognized as the mainnational supported Hightech field. Kingtone Information is a Hightech enterprise and enjoys a favorable income tax rate of 15%.58Laws and Regulations of Intellectual Property RightsChina has adopted legislation governing intellectual property rights, including patents, copyrights and trademarks. China is a signatory to the maininternational conventions on intellectual property rights and became a member of the Agreement on Trade Related Aspects of Intellectual Property Rights upon itsaccession to the WTO in December 2001.PatentsThe “Patent Law of the People’s Republic of China” promulgated by the Standing Committee of the National People's Congress, adopted in 1985 andrevised in 1992, 2001 and 2008, protects registered patents. The State Intellectual Property Office of PRC handles granting patent rights, providing for a twentyyearpatent term for inventions and a tenyear patent term for utility models and designs. As we disclosed in Item 4, of this transition report on Form 20F, throughKingtone Information, we have been granted one invention patent “wireless video transmission system based on BREW platform” by the State Intellectual PropertyOffice (“SIPO”) of PRC on September 23, 2009 and therefore such invention is entitled to all the protections provided under the Patent Law for twenty years.Computer Software Copyright and AdministrationOn December 20, 2001, the State Council of PRC issued the “Regulation for Computer Software Protection of the People’s Republic of China” (the“Regulation for Computer Software Protection”) which became effective on January 1, 2002 to protect the interests of copyright owners, to promote the research andapplication and to encourage the development of the Chinese software industry. Under the Regulation for Computer Software Protection, natural persons, legalpersons or any other organizations shall have a copyright on the software developed by such persons no matter whether such software has been published. Theprotection period of software copyrights owned by the legal person or other organization is fifty years and expires on December 31 of the fiftieth year from the initialpublication date of such computer software. Currently, Kingtone Information has twelve registration certificates for software copyrights.TrademarksThe “Trademark Law of the People’s Republic of China” promulgated by the State Council of PRC, adopted in 1982 and revised in 1993 and 2001, protectsregistered trademarks. The Trademark Office under the Chinese State Administration for Industry and Commerce handles trademark registrations and grants a termof ten years to registered trademarks which are renewable for another ten years after the application to the Trademark Office by the owners of the trademarks.Trademark license agreements must be filed with the Trademark Office for record. China has a “firsttoregister” system that requires no evidence of prior use orownership. Kingtone Information has its registered trademarks as described in Item 4 of this transition report on Form 20F. Accordingly, such trademarks areentitled to the protection under the Trademark Law.Foreign Currency ExchangeOn August 29, 2008, the SAFE issued the Notice of the General Affairs Department of the State Administration of Foreign Exchange on the RelevantOperating Issues concerning the Improvement of the Administration of Payment and Settlement of Foreign Currency Capital of Foreignfunded Enterprises, orCircular 142. Pursuant to Circular 142, RMB converted from the foreign currencydenominated capital of a foreigninvested company may only be used for purposeswithin the business scope approved by the applicable governmental authority and may not be used for equity investments within the PRC unless specificallyprovided for otherwise. The use of such Renminbi capital may not be changed without SAFE’s approval and may not in any case be used to repay Renminbi loans ifthe proceeds of such loans have not been used.59See “Risk Factors — Risks Related to Doing Business in China — PRC regulation of loans and direct investment by offshore holding companies to PRCentities may delay or prevent us from using the proceeds of our initial public offering to make loans or additional capital contributions to our PRC operatingsubsidiaries, which could materially and adversely affect our liquidity and our ability to fund and expand our business”.Dividend DistributionWe are a British Virgin Islands holding company and substantially all of our operations are conducted through LK Technology. We rely on dividends andother distributions from our LK Technology and its subsidiaries to provide us with our cash flow and allow us to pay dividends on the shares underlying our ADSsand meet our other obligations. The principal regulations governing distribution of dividends paid by wholly foreignowned enterprises include:1.Wholly ForeignOwned Enterprise Law (1986), as amended; and2.Implementation Rules on Wholly ForeignOwned Enterprise Law (1990), as amended.Under these regulations, wholly foreignowned enterprises in China may pay dividends only out of their accumulated profits, if any, determined inaccordance with PRC accounting standards and regulations. In addition, wholly foreignowned enterprises in China are required to set aside at least 10% of theiraftertax profit based on PRC accounting standards each year to its general reserves until the accumulative amount of such reserves reach 50% of its registeredcapital. These reserves are not distributable as cash dividends. The board of directors of a FIE has the discretion to allocate a portion of its aftertax profits to staffwelfare and bonus funds, which may not be distributed to equity owners except in the event of liquidation.Regulation of Foreign Exchange in Certain Onshore and Offshore TransactionsIn October 2005, the SAFE issued the Notice on Issues Relating to the Administration of Foreign Exchange in Fundraising and Return InvestmentActivities of Domestic Residents Conducted via Offshore Special Purpose Companies, or SAFE Notice 75, which became effective as of November 1, 2005, and wasfurther supplemented by two implementation notices issued by the SAFE on November 24, 2005 and May 29, 2007, respectively. Under Circular 75, prior registrationwith the local SAFE branch is required for PRC residents to establish or to control an offshore company for the purposes of financing that offshore company withassets or equity interests in an onshore enterprise located in the PRC. An amendment to the registration or filing with the local SAFE branch by such PRC resident isalso required for the injection of equity interests or assets of an onshore enterprise in the offshore company or overseas funds raised by such offshore company, orany other material change with respect to the offshore company in connection with any increase or decrease of capital, transfer of shares, merger, division, equityinvestment, debt investment, or creation of any security interest over any assets located in the PRC.Under SAFE Notice 75, PRC residents are further required to repatriate into the PRC all of their dividends, profits or capital gains obtained from theirshareholdings in the offshore entity within 180 days of their receipt of such dividends, profits or capital gains. The registration and filing procedures under SAFENotice 75 are prerequisites for other approval and registration procedures necessary for capital inflow from the offshore entity, such as inbound investments orshareholders loans, or capital outflow to the offshore entity, such as the payment of profits or dividends, liquidating distributions, equity sale proceeds, or thereturn of funds upon a capital reduction. Therefore, failure to comply with such registration may subject us to certain restrictions on, including but not limited to, theincrease of the registered capital of our PRC subsidiary, making loans to our PRC subsidiary, and making distributions to us from our onshore companies.Regulations of Overseas Investments and ListingsOn August 8, 2006, six PRC regulatory agencies, including the MOFCOM, the State Assets Supervision and Administration Commission, the StateAdministration for Taxation, the State Administration for Industry and Commerce, the CSRC and the SAFE, jointly adopted the New M&A Rule, which becameeffective on September 8, 2006. This regulation, among other things, includes provisions that purport to require that an offshore SPV formed for purposes ofoverseas listing of equity interests in PRC companies and controlled directly or indirectly by PRC companies or individuals obtain the approval of the CSRC prior tothe listing and trading of such SPV’s securities on an overseas stock exchange.60On September 21, 2006, the CSRC published on its official website procedures regarding its approval of overseas listings by SPVs. The CSRC approvalprocedures require the filing of a number of documents with the CSRC and it would take several months to complete the approval process.The application of the New M&A Rule with respect to overseas listings of SPVs remains unclear with no consensus currently existing among the leadingPRC law firms regarding the scope of the applicability of the CSRC approval requirement.We believe that, based on our understanding of the current PRC laws, regulations and rules and the procedures announced on September 21, 2006, there isno requirement in this regulation that would require an application to be submitted to the MOFCOM or the CSRC for the approval of the listing and trading of ourADSs on the NASDAQ Capital Market.See “Risk Factors — Risks Related to Doing Business in China — If we were required to obtain the prior approval of the China Securities RegulatoryCommission, or CSRC, of the listing and trading of our ADSs on the NASDAQ Capital Market, we may face regulatory actions or other sanctions from the CSRC orother PRC regulatory agencies.”E. TAXATIONThe following discussion sets forth the material British Virgin Islands, PRC and U.S. federal income tax consequences of an investment in our ADSs andthe ordinary shares represented by our ADSs, sometimes referred to collectively as the “securities”. It is based upon laws and relevant interpretations thereof ineffect as of the date of this report, all of which are subject to change. This discussion does not deal with all possible tax consequences relating to an investment inthe securities, such as the tax consequences under state, local and other tax laws. As used in this discussion, “we,” “our” and “us” refers only to LuokungTechnology Ltd.British Virgin Islands TaxationUnder the law of the British Virgin Islands as currently in effect, a holder of the securities who is not a resident of the British Virgin Islands is not liable forBritish Virgin Islands tax on dividends paid with respect to the securities and all holders of the securities are not liable to the British Virgin Islands for tax on gainsrealized during that year on the sale or disposal of such ordinary shares. The British Virgin Islands does not impose a withholding tax on dividends paid by acompany incorporated or reregistered under the BVI Act.There are no capital gains, gift or inheritance taxes levied by the British Virgin Islands on companies incorporated under the BVI Act. In addition, shares ofcompanies incorporated under the BVI Act are not subject to transfer taxes, stamp duties or similar charges.There is no income tax treaty or convention currently in effect between the United States and the British Virgin Islands or between China and the BritishVirgin Islands.61People’s Republic of China TaxationIn 2007, the PRC National People’s Congress enacted the new Enterprise Income Tax Law (the “EIT Law”), which became effective on January 1, 2008. Thenew EIT Law imposes a single uniform income tax rate of 25% on all Chinese enterprises, including foreigninvested enterprises, and levies a withholding tax rate of10% on dividends payable by Chinese subsidiaries to their foreign shareholders unless any such foreign shareholders’ jurisdiction of incorporation has a tax treatywith China that provides for a different withholding agreement. Under the new EIT Law, enterprises established outside China but deemed to have a “de factomanagement body” within the country may be considered “resident enterprises” for Chinese tax purposes and, therefore, may be subject to an enterprise income taxrate of 25% on their worldwide income. Pursuant to the implementation rules of the new EIT Law, a “de facto management body” is defined as a body that hasmaterial and overall management control over the business, personnel, accounts and properties of the enterprise. Although substantially all members of ourmanagement are located in China, it is unclear whether Chinese tax authorities would require (or permit) us to be treated as PRC resident enterprises. If we aredeemed a Chinese tax resident enterprise, we may be subject to an enterprise income tax rate of 25% on our worldwide income, excluding dividends received directlyfrom another Chinese tax resident enterprise, as well as PRC enterprise income tax reporting obligations. If we are not deemed to be a Chinese tax resident enterprise,we may be subject to certain PRC withholding taxes. See “Risk Factors — Risks Related to Doing Business in China — Our holding company structure may limit thepayment of dividends.” As a result of such changes, our historical tax rates may not be indicative of our tax rates for future periods and the value of our ADSs orordinary shares may be adversely affected. If we are deemed a PRC resident enterprise and investors’ gain from the sales of the securities and dividends payable byus are deemed sourced from China, such gains and dividends payable by us may be subject to PRC tax. See “Risk Factors — Risks Related to Doing Business inChina — If we were deemed a “resident enterprise” by PRC tax authorities, we could be subject to tax on our global income at the rate of 25% under the New EITLaw and our nonPRC shareholders could be subject to certain PRC taxes.United States Federal Income TaxationGeneralThe following is a discussion of the material U.S. federal income tax consequences to an investor of purchasing, owning and disposing of our securities.This discussion does not address any aspects of U.S. federal gift or estate tax or the state, local or nonU.S. tax consequences of an investment in the securities.YOU SHOULD CONSULT YOUR OWN TAX ADVISORS CONCERNING THE U.S. FEDERAL, STATE, LOCAL AND NONU.S. TAX CONSEQUENCES OFPURCHASING, OWNING AND DISPOSING OF THE SECURITIES IN YOUR PARTICULAR SITUATION.This discussion applies only to those investors that purchase the securities in this offering and that hold the securities as capital assets within the meaningof section 1221 of the Internal Revenue Code of 1986, as amended (the “Code”). This section does not apply to holders that may be subject to special tax rules,including but not limited to:1.dealers in securities or currencies;2.traders in securities that elect to use a marktomarket method of accounting;3.banks, insurance companies or certain financial institutions;4.taxexempt organizations;5.governments or agencies or instrumentalities thereof;6.partnerships or other entities treated as partnerships or other passthrough entities for U.S. federal income tax purposes or persons holding thesecurities through such entities;7.regulated investment companies or real estate investment trusts;8.holders subject to the alternative minimum tax;9.holders that actually or constructively own 10% or more of the total combined voting power of all classes of our shares entitled to vote;10.holders that acquired the securities pursuant to the exercise of employee stock options, in connection with employee stock incentive plans orotherwise as compensation;11.holders that hold the securities as part of a straddle, hedging or conversion transaction; or12.holders whose functional currency is not the U.S. dollar.62This section is based on the Code, its legislative history, existing and proposed U.S. Treasury regulations, published rulings and other administrativeguidance of the U.S. Internal Revenue Service (the “IRS”) and court decisions, all as in effect on the date hereof. These laws are subject to change or differentinterpretation by the IRS or a court, possibly on a retroactive basis.We have not sought, and will not seek, a ruling from the IRS as to any U.S. federal income tax consequence described herein. The IRS may disagree withthe discussion herein, and its determination may be upheld by a court. Moreover, there can be no assurance that future legislation, regulation, administrative rulingsor court decisions will not adversely affect the accuracy of the statements in this discussion.The discussion below of the U.S. federal income tax consequences to “U.S. Holders” will apply to a beneficial owner of the securities that is for U.S. federalincome tax purposes:1.a citizen or resident of the United States;2.a corporation (or other entity treated as a corporation) that is created or organized (or treated as created or3.organized) under the laws of the United States, any state thereof or the District of Columbia;4.an estate whose income is subject to U.S. federal income tax regardless of its source; or5.a trust if (a) a U.S. court can exercise primary supervision over the trust’s administration and one or more U.S.6.persons are authorized to control all substantial decisions of the trust, or (b) if the trust has a valid election in effect under applicable U.S.Treasury regulations to be treated as a U.S. person.If a beneficial owner of the securities is not described as a U.S. Holder and is not an entity treated as a partnership or other passthrough entity for U.S.federal income tax purposes, such owner will be considered a “NonU.S. Holder.” The material U.S. federal income tax consequences applicable specifically to NonU.S. Holders are described below under the heading “Tax Consequences to NonU.S. Holders.”If a partnership (including for this purpose any entity treated as a partnership for U.S. tax purposes) is a beneficial owner of the securities, the U.S. taxtreatment of a partner in the partnership generally will depend on the status of the partner and the activities of the partnership. A holder of the securities that is apartnership or partners in such a partnership should consult their own tax advisors about the U.S. federal income tax consequences of holding and disposing of thesecurities.This discussion assumes that any distributions made (or deemed made) on the securities and any consideration received by a holder in consideration forthe sale or other disposition of the securities will be in U.S. dollars. This discussion also assumes that the representations contained in the Deposit Agreement aretrue and that the obligations in the Deposit Agreement and any related agreement will be complied with in accordance with their terms. Finally, this discussionassumes that each ADS will only represent ordinary shares in us, and will not represent any other type of security, such as a bond, cash or other property.63For U.S. federal income tax purposes, a holder of an ADS will be treated as the beneficial owner of the shares represented by such ADS and an exchange ofan ADS for ordinary shares will not be subject to U.S. federal income tax. The U.S. Treasury has expressed concerns that parties to whom ADSs are prereleased, orintermediaries in the chain of ownership between holders of ADSs and the issuer of the securities underlying the ADSs may be taking actions that are inconsistentwith the claiming of foreign tax credits by U.S. Holders of ADSs. Such actions would also be inconsistent with the claiming of the reduced rate of tax applicable todividends received by certain noncorporate U.S. Holders, including individual U.S. Holders, as described below under “Tax Consequences to U.S.Holders — Taxation of Distributions.” Accordingly, the availability of foreign tax credits or the reduced tax rate for dividends received by certain noncorporate U.S.Holders, including individual U.S. Holders, could be affected by actions taken by parties to whom the ADSs are released, or by future actions by the U.S. Treasury.Tax Consequences to U.S. HoldersTaxation of DistributionsSubject to the passive foreign investment company, or PFIC, rules discussed below, the gross amount of any cash distributions we make with respect to aU.S. Holder in respect of such U.S. Holder’s ADSs or shares will generally be treated as dividend income if the distributions are made from our current oraccumulated earnings and profits, calculated according to U.S. federal income tax principles. Cash dividends will generally be subject to U.S. federal income tax asordinary income on the day the U.S. Holder actually or constructively receives such income. With respect to noncorporate U.S. Holders for taxable years beginningbefore January 1, 2011, dividends may be taxed at the lower applicable longterm capital gains rate provided that (a) our ADSs or shares are readily tradable on anestablished securities market in the United States, or, in the event we are deemed to be a Chinese “resident enterprise” under the EIT Law (as described above under“People’s Republic of China Taxation”), we are eligible for the benefits of the income tax treaty between the United States and the PRC (the “U.S.PRC Tax Treaty”),(b) we are not a PFIC, as discussed below, for either the taxable year in which the dividend was paid or the preceding taxable year, and (c) certain holding periodrequirements are met. Under published IRS authority, ADSs are considered for purposes of clause (a) above to be readily tradable on an established securitiesmarket in the United States only if they are listed on certain exchanges, which presently include the NASDAQ Capital Market. U.S. Holders should consult their owntax advisors regarding the availability of the lower rate for any dividends paid with respect to our ADSs or shares.Dividends will not be eligible for the dividendsreceived deduction allowed to U.S. corporations in respect of dividends received from other U.S.corporations. Generally, if we distribute noncash property as a dividend (other than pro rata distributions of our shares) out of our current or accumulated earningsand profits (as determined for U.S. federal income tax purposes), a U.S. Holder generally will include in income an amount equal to the fair market value of theproperty, on the date that it is distributed.Distributions in excess of current and accumulated earnings and profits, as determined for U.S. federal income tax purposes, will be treated as a nontaxablereturn of capital to the extent of the U.S. Holder’s basis in its shares or ADSs and thereafter as capital gain. However, we do not plan on calculating our earnings andprofits in accordance with U.S. federal income tax principles. U.S. holders therefore should generally assume that any distributions paid by us will be treated asdividends for U.S. federal income tax purposes.If PRC taxes apply to dividends paid by us to a U.S. Holder (see “People’s Republic of China Taxation,” above), such taxes may be treated as foreign taxeseligible for credit against such holder’s U.S. federal income tax liability (subject to certain limitations), and a U.S. Holder may be entitled to certain benefits under theU.S.PRC Tax Treaty. The rules relating to the U.S. foreign tax credit are complex. U.S. Holders should consult their own tax advisors regarding the creditability ofany such PRC tax and their eligibility for the benefits of the U.S.PRC Tax Treaty.64Taxation of Dispositions of SharesSubject to the PFIC rules discussed below, a U.S. holder that sells or otherwise disposes of its shares will recognize capital gain or loss for U.S. federalincome tax purposes equal to the difference between the amount realized and such U.S. Holder’s tax basis in its shares. Prior to January 1, 2011, capital gains of anoncorporate U.S. holder are generally taxed at a maximum rate of 15% where the property is held for more than one year (and 20% thereafter). The ability to deductcapital losses is subject to limitations.If PRC taxes apply to any gain from the disposition of our shares by a U.S. Holder, such taxes may be treated as foreign taxes eligible for credit against suchholder’s U.S. federal income tax liability (subject to certain limitations), and a U.S. Holder may be entitled to certain benefits under the U.S.PRC Tax Treaty. U.S.Holders should consult their own tax advisors regarding the creditability of any such PRC tax and their eligibility for the benefits of the U.S.PRC Tax Treaty.Passive Foreign Investment CompanyWe do not expect to be a PFIC for U.S. federal income tax purposes for our current tax year or in the foreseeable future. The determination of whether or notwe are a PFIC in respect of any of our taxable years is a factual determination that cannot be made until the close of the applicable tax year and that is based on thetypes of income we earn and the value and composition of our assets (including goodwill), all of which are subject to change. Therefore, we can make no assurancesthat we will not be a PFIC in respect of our current taxable year or in the future.In general, we will be a PFIC in any taxable year if either:1.at least 75% of our gross income for the taxable year is passive income; or2.at least 50% of the value, determined on the basis of a quarterly average, of our assets is attributable to assets that produce or are held for theproduction of passive income.Passive income includes dividends, interest, royalties, rents (other than certain rents and royalties derived in the active conduct of a trade or business), theexcess of gains over losses from certain types of transactions in commodities, annuities and gains from assets that produce passive income. We will be treated asowning our proportionate share of the assets and earning our proportionate share of the income of any corporation in which we own, directly or indirectly, at least25% (by value) of the stock.If we are treated as a PFIC in any year during which a U.S. Holder owns the securities, and such U.S. Holder did not make a marktomarket election, asdescribed below, the U.S. Holder will be subject to special rules with respect to:1.any gain recognized by the U.S. Holder on the sale or other disposition of its shares; and any excess distribution that we make to the U.S. Holder(generally, the excess of the amount of any distributions to such U.S. Holder during a single taxable year of such U.S. Holder over 125% of theaverage annual distributions received by such U.S. Holder in respect of the shares during the three preceding taxable years of such U.S. Holder or,if shorter, such U.S. Holder holding period for the shares).Under these rules:2.the gain or excess distribution will be allocated ratably over the U.S. Holder’s holding period for the shares;3.the amount allocated to the U.S. Holder’s taxable year in which it realized the gain or excess distribution or to the period in the U.S. Holder’sholding period before the first day of our first taxable year in which we are a PFIC will be taxed as ordinary income;4.the amount allocated to other taxable years (or portions thereof) of the U.S. Holder and included in its holding period will be taxed at the highesttax rate in effect for that year; and5.the interest charge generally applicable to underpayments of tax will be imposed in respect of the tax attributable to each such other taxable yearof the U.S. Holder. 6.Special rules apply for calculating the amount of the foreign tax credit with respect to excess distributions by a PFIC.65Alternatively, if a U.S. Holder, at the close of its taxable year, owns ordinary shares in a PFIC that are treated as marketable stock, the U.S. Holder may makea marktomarket election with respect to such shares for such taxable year. Our shares will be “marketable” to the extent that they remain regularly traded on anational securities exchange, such as the NASDAQ Capital Market. If a U.S. Holder makes this election in a timely fashion, it will not be subject to the PFIC rulesdescribed above. Instead, in general, the U.S. Holder will include as ordinary income each year the excess, if any, of the fair market value of its shares at the end ofthe taxable year over its adjusted basis in its shares. Any ordinary income resulting from this election would generally be taxed at ordinary income tax rates andwould not be eligible for the reduced rate of tax applicable to qualified dividend income. The U.S. Holder will also be allowed to take an ordinary loss in respect ofthe excess, if any, of the adjusted basis of its shares over the fair market value at the end of the taxable year (but only to the extent of the net amount of previouslyincluded income as a result of the marktomarket election). The U.S. Holder’s basis in the shares will be adjusted to reflect any such income or loss amounts. U.S.Holders should consult their own tax advisor regarding potential advantages and disadvantages of making a marktomarket election with respect to their shares.Alternatively, a U.S. Holder of stock in a PFIC may avoid the PFIC tax consequences described above in respect to our or shares by making a timely“qualified electing fund” election to include in income its pro rata share of our net capital gains (as longterm capital gain) and other earnings and profits (asordinary income), on a current basis, in each case whether or not distributed, in the taxable year of the U.S. Holder in which or with which our taxable year ends.However, the qualified electing fund election is available only if the PFIC provides such U.S. Holder with certain information regarding its earnings and profits asrequired under applicable U.S. Treasury regulations. We do not intend to furnish the information that a U.S. Holder would need in order to make a qualified electingfund election. Therefore, U.S. Holders will not be able to make or maintain such election with respect to their or shares.If a U.S. Holder owns our shares or during any year that we are a PFIC, such holder must file U.S. Internal Revenue Service Form 8621 regarding suchholder’s shares or and the gain realized on the disposition of the shares. The reduced tax rate for dividend income, discussed in “Taxation of Distributions,” is notapplicable to dividends paid by a PFIC. U.S. Holders should consult with their own tax advisors regarding reporting requirements with respect to their shares.Tax Consequences to NonU.S. HoldersDividends paid to a NonU.S. Holder in respect of our or shares generally will not be subject to U.S. federal income tax, unless the dividends are effectivelyconnected with the NonU.S. Holder’s conduct of a trade or business within the United States (and, if required by an applicable income tax treaty, are attributable toa permanent establishment or fixed base that such holder maintains in the United States).In addition, a NonU.S. Holder generally will not be subject to U.S. federal income tax on any gain attributable to a sale or other disposition of our or sharesunless such gain is effectively connected with its conduct of a trade or business in the United States (and, if required by an applicable income tax treaty, isattributable to a permanent establishment or fixed base that such holder maintains in the United States) or the NonU.S. Holder is an individual who is present in theUnited States for 183 days or more in the taxable year of sale or other disposition and certain other conditions are met (in which case, such gain from United Statessources generally is subject to tax at a 30% rate or a lower applicable tax treaty rate).Dividends and gains that are effectively connected with the NonU.S. Holder’s conduct of a trade or business in the United States (and, if required by anapplicable income tax treaty, are attributable to a permanent establishment or fixed base in the United States) generally will be subject to tax in the same manner as fora U.S. Holder and, in the case of a NonU.S. Holder that is a corporation for U.S. federal income tax purposes, may also be subject to an additional branch profits taxat a 30% rate or a lower applicable tax treaty rate.66Information Reporting and Backup Withholding In general, information reporting for U.S. federal income tax purposes generally should apply to distributions made on the securities within the UnitedStates to a noncorporate U.S. Holder and to the proceeds from sales and other dispositions of the securities by a noncorporate U.S. Holder to or through a U.S.office of a broker. Payments made (and sales and other dispositions effected at an office) outside the United States generally should be subject to informationreporting in limited circumstances.Dividend payments made to U.S. Holders and proceeds paid from the sale or other disposition the securities may be subject to information reporting to theIRS and possible U.S. federal backup withholding at a current rate of 28%. Certain exempt recipients, such as corporations, are not subject to these informationreporting requirements. Backup withholding will not apply to a U.S. Holder who furnishes a correct taxpayer identification number and makes any other requiredcertification, or who is otherwise exempt from backup withholding. U.S. Holders who are required to establish their exempt status must provide a duly executed IRSForm W9.A NonU.S. Holder generally may eliminate the requirement for information reporting and backup withholding by providing certification of its foreignstatus, under penalties of perjury, on a duly executed applicable IRS Form W8 or by otherwise establishing an exemption.Backup withholding is not an additional tax. Rather, the amount of any backup withholding will be allowed as a credit against a U.S. Holder’s or a nonU.S.Holder’s U.S. federal income tax liability and may entitle such holder to a refund, provided that certain required information is timely furnished to the IRS.PROSPECTIVE PURCHASERS OF OUR SECURITIES SHOULD CONSULT WITH THEIR OWN TAX ADVISORS REGARDING THE APPLICATION OFTHE U.S. FEDERAL INCOME TAX LAWS TO THEIR PARTICULAR SITUATIONS AS WELL AS ANY ADDITIONAL TAX CONSEQUENCES RESULTING FROMPURCHASING, HOLDING OR DISPOSING OF OUR SECURITIES, INCLUDING THE APPLICABILITY AND EFFECT OF THE TAX LAWS OF ANY STATE, LOCALOR NONU.S. JURISDICTION, INCLUDING ESTATE, GIFT, AND INHERITANCE LAWS AND APPLICABLE TAX TREATIES.F. DIVIDENDS AND PAYING AGENTS.Not applicable.G. STATEMENT BY EXPERTS.None.H. DOCUMENTS ON DISPLAY.We previously filed a registration statement on Form F1 (File No. 333166056) with the SEC relating to our initial public offering in May 2010. This transition reportdoes not contain all of the information in the registration statement and the exhibits and financial statements included with the registration statement. References inthis transition report to any of our contracts, agreements or other documents are not necessarily complete, and you should refer to the exhibits attached to theregistration statement for copies of the actual contracts, agreements or documents. In addition, we will file transition reports on Form 20F and submit otherinformation under cover of Form 6K. As a foreign private issuer, we are exempt from the proxy requirements of Section 14 of the Exchange Act and our officers,directors and principal shareholders will be exempt from the insider shortswing disclosure and profit recovery rules of Section 16 of the Exchange Act. You may readand copy the registration statement, the related exhibits and other materials we file with the SEC at the SEC's public reference room in Washington, D.C. at 100 FStreet, Room 1580, N.E., Washington, D.C.20549. You can also request copies of those documents, upon payment of a duplicating fee, by writing to the SEC. Pleasecall the SEC at 1800SEC0330 for further information on the operation of the public reference rooms. The SEC also maintains an Internet site that contains reports,proxy and information statements and other information regarding issuers that file with the SEC. The website address is http://www.sec.gov. You may also request acopy of these filings, at no cost, by writing us at LAB 32, SOHO 3Q, No 9, Guanghua Road, Chaoyang District, Beijing, People’s Republic of China, 100020 ortelephoning us at (86) 1085866721.67I. SUBSIDIARY INFORMATIONFor a listing of our subsidiaries, see “Item 4. Information on the Company – C. Organizational Structure.”ITEM 11. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.Interest Rate RiskAs of December 31, 2017, we had no shortterm or longterm borrowings. If we borrow money in future periods, we may be exposed to interest rate risk. Ourexposure to market risk for changes in interest rates relates primarily to the interest income generated by our cash deposits with our banks and heldtomaturityinvestments. We have not used any derivative financial instruments in our investment portfolio. Interest earnings instruments carry a degree of interest rate risk. Wehave not been exposed, nor do we anticipate being exposed to material risks due to changes in interest rates. However, our future interest income may fall short ofexpectations due to changes in interest rates. Foreign Exchange RiskTranslation adjustments amounted to $90,671 and $387,375 gain as of the fiscal year ended December 31, 2017 and 2016, respectively. The Companytranslated balance sheet amounts with the exception of equity at December 31, 2017 at RMB 6.5342 to $1.00 as compared to RMB 6.9370 to $1.00 at December 31,2016. The Company stated equity accounts at their historical rate. The average translation rates applied to income statement accounts for the fiscal year endedDecember 31, 2017 and 2016 were RMB6.7356 and RMB 6.7153 to US$1.00, respectively. So far, the PRC government has been able to manage a stable exchange ratebetween RMB and the U.S. Dollar. Our future downward translation adjustments may occur and can be significant due to changes in such exchange rate.If we decide to convert our RMB into U.S. dollars for the purpose of making payments for dividends on our ordinary shares or for other business purposes,appreciation of the U.S. dollar against the RMB would have a negative effect on the U.S. dollar amount available to us.The PRC government imposes strict restrictions on PRC resident companies regarding converting RMB into foreign currencies and vice versa under capitalaccount transactions, such as receiving equity investments from outside of the PRC, making equity investments outside of the PRC, borrowing money from orlending money outside of the PRC, and repaying debt or remitting liquidated assets and/or accumulated profits outside of the PRC. These transactions have to beapproved by the relevant PRC government authorities, including but not limited to the commerce bureau, the tax bureau and the State Administration of ForeignExchange, or SAFE, and have to be conducted at banks entrusted by the local SAFE branch. As our business continues to grow, we may need to continuouslyfinance our PRC subsidiaries by raising capital from outside of the PRC. The restriction on converting RMB into foreign currencies, and vice versa, may limit ourability to use capital resources from outside of the PRC. Such restrictions may also limit our ability to remit profits from our PRC subsidiaries outside of the PRC,therefore potentially limiting our ability to pay dividends to our shareholders. In addition, such restrictions will limit our ability to freely transfer temporary excesscash in our or our subsidiaries’ bank accounts in and out of the PRC, therefore limiting our ability to conduct crossborder cash management activities to optimizethe utilization of our cash.InflationAlthough China has experienced an increasing inflation rate, inflation has not had a material impact on our results of operations in recent years. Accordingto the National Bureau of Statistics of China, the change in the consumer price index in China was 0.46%, (0.77%), and 1.16% in 2001, 2002 and 2003, respectively.However, in connection with a 3.9% increase in 2004, the PRC government announced measures to restrict lending and investment in China in order to reduceinflationary pressures in China’s economy. Following the government’s actions, the consumer price index decreased to 1.8% in 2005 and to 1.5% in 2006. In 2007, theconsumer price index increased to 4.8%. In response, China’s central bank, the People’s Bank of China, announced that the bank reserve ratio would rise half apercentage point to 15.5% in an effort to reduce inflation pressures. China’s consumer price index growth rate reached 8.7% year over year in 2008. In 2009 and 2010,the change in the consumer price index in China was minus 0.7% and 3.3%.China consumer price index in November 2017 was 3.8% higher than that of the same period in 2016. China consumer price index in December 2016 was2.4% higher than that of the same period in 2015. China consumer price index in December 2015 was 4.8% higher than that of the same period in 2014. Chinaconsumer price index in December 2014 was 3.3% higher than that of the same period in 2013. The results of the PRC government’s actions to combat inflation aredifficult to predict. Adverse changes in the Chinese economy, if any, will likely impact the financial performance of a variety of industries in China that use, or wouldbe candidates to use, our software products and services.68ITEM 12. DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES.A. DEBT SECURITIES.Not applicable. B. WARRANTS AND RIGHTS.Not applicable.C. OTHER SECURITIES.Not applicable.D. AMERICAN DEPOSITARY SHARES.The Bank of New York Mellon, as depositary (the “Depositary”) for the Company’s ADR facility, notified the owners and holders of the Company’s ADSsthat the ADS facility will terminate effective at 5:00 p.m. (Eastern Time) on September 19, 2018. Under the terms of the Deposit Agreement among the Company, theDepositary and the owners and holders of ADSs of the Company (the “Deposit Agreement”), owners and holders of the Company’s ADSs have until at leastJanuary 21, 2019 to surrender their ADSs to the Depositary for delivery of the underlying ordinary shares of the Company. Subsequent to January 21, 2019, underthe terms of the Deposit Agreement, the Depositary may attempt to sell any ordinary shares remaining on deposit with the Depositary. If the Depositary sells suchunderlying ordinary shares or receives value for such shares, holders must surrender their ADSs to obtain payment of the sale proceeds, net of expenses andapplicable tax and charges. We completed the voluntary delisting of our ADSs from the NASDAQ Capital Market on September 19, 2018.You may hold ADSs either (A) directly (i) by having ADSs registered in your name in the Direct Registration System, or (ii) by having an Americandepositary receipt, also referred to as an ADR, which is a certificate evidencing a specific number of ADSs, registered in your name, or (B) indirectly by holding asecurity entitlement in ADSs through your broker or other financial institution. If you hold ADSs directly, you are a registered ADS holder, also referred to as anADS holder. This description assumes you are an ADS holder. If you hold the ADSs indirectly, you must rely on the procedures of your broker or other financialinstitution to assert the rights of ADS holders described in this section. You should consult with your broker or financial institution to find out what thoseprocedures are.The Direct Registration System, or DRS, is a system administered by The Depository Trust Company, also referred to as DTC, pursuant to which thedepositary may register the ownership of uncertificated ADSs, which ownership will be confirmed by periodic statements sent by the depositary to the registeredholders of uncertificated ADSs.69As an ADS holder, you will not be treated as one of our registered shareholders and you will not have direct shareholder rights. British Virgin Island’s lawgoverns our direct shareholders’ rights. The depositary will be the holder of the shares underlying your ADSs. As a registered holder of ADSs, you will have ADSholder rights. A Deposit Agreement among us, the depositary and you, as an ADS holder, and all other persons indirectly holding ADSs, sets out ADS holder rightsas well as the rights and obligations of the depositary. New York law governs the Deposit Agreement and the ADSs.The following is a summary of the material provisions of the Deposit Agreement. For more complete information, you should read the entire DepositAgreement and the form of ADS, which contains the terms of the ADSs. The Deposit Agreement is filed as an exhibit to our registration statement filed on Form F1.You may obtain the registration statement and the attached Deposit Agreement from the SEC’s website at http://www.sec.gov. You may also obtain a copy of theDeposit Agreement at the SEC’s Public Reference Room, which is located at 100 F Street, NE, Washington, DC 20549. You may obtain information on the operationof the Public Reference Room by calling the SEC at 18007320330. Fees and ExpensesPersons depositing or withdrawing shares or ADS holders must pay:For:$5.00 (or less) per 100 ADSs (or portion of 100 ADSs)Issuance of ADSs, including issuances resulting from a distribution of shares orrights or other propertyCancellation of ADSs for the purpose of withdrawal, including if the DepositAgreement terminates$.05 (or less) per ADSAny cash distribution to ADS holdersA fee equivalent to the fee that would be payable if securities distributed to youhad been shares and the shares had been deposited for issuance of ADSsDistribution of securities distributed to holders of deposited securities whichare distributed by the depositary to ADS holders$.05 (or less) per ADSs per calendar yearDepositary servicesRegistration or transfer feesTransfer and registration of shares on our share register to or from the name ofthe depositary or its agent when you deposit or withdraw sharesExpenses of the depositaryCable, telex and facsimile transmissions (when expressly provided in the DepositAgreement) converting foreign currency to U.S. dollarsTaxes and other governmental charges the depositary or the custodian have topay on any ADS or share underlying an ADS, for example, share transfer taxes,stamp duty or withholding taxesAs necessaryAny charges incurred by the depositary or its agents for servicing the depositedsecuritiesAs necessaryPayment of TaxesHolders of our ADSs are responsible for any taxes or other governmental charges payable on their ADSs or on the deposited securities represented by anyof their ADSs. The depositary may refuse to register any transfer of a holder’s ADSs or allow withdrawal of the deposited securities represented by the ADSs untilsuch taxes or other charges are paid. It may apply payments owed to the holder or sell deposited securities represented by the ADSs to pay any taxes owed and theholder will remain liable for any deficiency. If the depositary sells deposited securities, it will, if appropriate, reduce the number of ADSs to reflect the sale and pay toADS holders any proceeds, or send to ADS holders any property, remaining after it has paid the taxes.70PART IIITEM 13. DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES.None.ITEM 14. MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS.Use of Proceeds.We completed our initial public offering on May 14, 2010 (the “IPO”), which generated net proceeds of approximately $14.6 million. All remaining cash onhand from the proceeds of our IPO was transferred to C Media Limited and its subsidiaries following the completion of the asset exchange transactions on August17, 2018.ITEM 15. CONTROLS AND PROCEDURES.Disclosure Controls and ProceduresOur Chief Executive Officer and Chief Financial Officer have reviewed and evaluated the effectiveness of our disclosure controls and procedures, whichincluded inquiries made to certain other of our employees. The term “disclosure controls and procedures,” as defined in Rules 13a15(e) and 15d15(e) under theExchange Act, means controls and other procedures of a company that are designed to ensure that information required to be disclosed by a company in thereports, such as this report, that it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in theSEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to bedisclosed by a company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the company’s management, including itsprincipal executive and principal financial officers, as appropriate to allow timely decisions regarding required disclosure. Management recognizes that any controlsand procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives and management necessarilyapplies its judgment in evaluating the costbenefit relationship of possible controls and procedures. Based on that evaluation, our Chief Executive Officer and ChiefFinancial Officer have each concluded that, as of December 31, 2017, the Company’s disclosure controls and procedures were not effective due to the materialweakness described in the “Management’s Report on Internal Control over Financial Reporting” section below.Management’s Report on Internal Control Over Financial ReportingOur management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Exchange ActRules 13a15(f) and 15d15(f). Internal control over financial reporting refers to the process designed by, or under the supervision of, our principal executive officerand principal financial officer, and effected by our Board of Directors, management and other personnel, to provide reasonable assurance regarding the reliability offinancial reporting and the preparation of financial statements for external purposes in accordance with U.S. GAAP and includes those policies and procedures that(i) pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of the assets of the Company; (ii)provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with U.S. GAAP, and thatreceipts and expenditures of the Company are being made only in accordance with authorizations of management and directors of the Company; and (iii) providereasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the Company’s assets that could have a materialeffect on the financial statements.71Any system of internal control, no matter how well designed, has inherent limitations. Therefore, even those systems determined to be effective canprovide only reasonable assurance with respect to financial statement preparation and presentation. Because of the inherent limitations of internal control, there is arisk that material misstatements may not be prevented or detected on a timely basis by internal control over financial reporting. However, these inherent limitationsare known features of the financial reporting process. Therefore, it is possible to design into the process safeguards to reduce, though not eliminate, this risk.Management assessed our internal control over financial reporting as of the year ended December 31, 2017. In making this assessment, management usedthe criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in the 2014 report entitled "Internal ControlIntegratedFramework." The COSO framework summarizes each of the components of a company’s internal control system, including (i) the control environment, (ii) riskassessment, (iii) control activities, (iv) information and communication, and (v) monitoring. Based on such assessment, management concluded that its internalcontrol over financial reporting as of December 31, 2017 was not effective because of the following material weakness:Lack of U.S. GAAP expertise. Although our accounting personnel are professional and experienced in accounting requirements and procedures generallyaccepted in the PRC, they do not have sufficient knowledge, experience and training in maintaining our books and records and preparing financial statements inaccordance with U.S. GAAP standards and SEC rules and regulations. The staff needs additional training to become experienced in U.S. GAAPbased reporting,including the skills of U.S. GAAPbased period end closing, consolidation of financial statements, and U.S. GAAP conversion.In order to address the above material weakness, our management plans to take the following steps:We will employ, as needed, outside professionals to provide key accounting personnel ongoing technical trainings to ensure their proper understanding ofU.S. GAAP and newly announced accounting standards.The Company believes the foregoing measures will remediate the identified material weakness in future periods. The Company is committed to monitoringthe effectiveness of these measures and making any changes that are necessary and appropriate.Notwithstanding the conclusion that its internal control over financial reporting was not effective as of the end of the period covered by this report, ourChief Executive Officer and Chief Financial Officer believe that the financial statements and other information contained in this report present fairly, in all materialrespects, its business, financial condition and results of operations. Nothing has come to the attention of management that causes them to believe that any materialinaccuracies or errors exist in the Company’s financial statements as of December 31, 2017.Attestation report of the registered public accounting firm.This transition report does not include an attestation report of the Company’s registered public accounting firm on internal control over financial reportingbecause the Company is a nonaccelerated filer permanently exempted from section 404(b) of the SarbanesOxley Act.Changes in Internal Control over Financial ReportingThere were no changes in the Company’s internal control over financial reporting that occurred during our fiscal year ended December 31, 2017 that hasmaterially affected or is reasonably likely to materially affect our internal control over financial reporting.ITEM 16. [RESERVED]ITEM 16A. AUDIT COMMITTEE FINANCIAL EXPERT.Our board of directors has determined that Mr. Dennis Galgano qualifies as an audit committee financial expert. Our board of directors has determined thatMessrs. Dennis Galgano, Jin Shi, Jiming Ha and Zhihao Xu meet the definition of an “independent director” under the applicable NASDAQ Rules and under Rule10A3 of the Securities Exchange Act of 1934, as amended.72ITEM 16B. CODE OF ETHICS.Our board of directors has adopted a code of business conduct and ethics applicable to our directors, officers and employees. We have posted the code onour website at http://www.luokung.com.ITEM 16C. PRINCIPAL ACCOUNTANT FEES AND SERVICES.Audit FeesThe aggregate fees billed by Moore Stephens CPA Limited for professional services rendered for the audit of our financial information disclosed in thistransition report on Form 20F was $280,000 for the two years ended December 31, 2017 and 2016.The aggregate fees billed by our previous auditor, BDO China Shu Lun Pan Certified Public Accountants LLP for professional services rendered for theaudit of our annual financial information included in our annual reports on Form 20F was $105,500 for each of the fiscal years ended September 30, 2017, 2016 and2015.Tax FeesWe did not engage our principal accountants to provide tax or related services during the last two fiscal years.All Other FeesWe did not engage our principal accountants to render services to us during the last two fiscal years, other than as reported above.ITEM 16D. EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES.Not applicable.ITEM 16E. PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS.Not applicable.ITEM 16F. CHANGE IN REGISTRANT’S CERTIFYING ACCOUNTANT.Not applicable.ITEM 16G. CORPORATE GOVERNANCE.We are incorporated in the BVI and our corporate governance practices are governed by applicable BVI law as well as our memorandum and articles ofassociation. In addition, because our ADSs are listed on NASDAQ, we are subject to NASDAQ’s corporate governance requirements. NASDAQ Listing Rule5620(a) requires each issuer to hold an annual meeting of shareholders no later than one year after the end of the issuer’s fiscal year end. However, NASDAQ ListingRule 5615(a)(3) permits a foreign private issuer like us to follow home country practices in lieu of certain requirements of Listing Rule 5600, provided that suchforeign private issuer discloses in its transition report filed with the SEC each requirement of Rule 5600 that it does not follow and describes the home countrypractice followed in lieu of such requirement. We follow home country practice with respect to annual meetings and did not hold an annual shareholder meeting inthe year ended December 31, 2017. We may, however, hold annual shareholder meetings in the future if there are significant issues that require shareholders’approvals.ITEM 16H. MINE SAFETY DISCLOSURE.Not applicable.73PART IIIITEM 17. FINANCIAL STATEMENTS.We have elected to provide financial statements and related information specified in Item 18.ITEM 18. FINANCIAL STATEMENTS.See “Index to Consolidated Financial Statements” for a list of all financial statements filed as part of this transition report. The Financial Statements arebeginning on page F1.ITEM 19. EXHIBITS.See the Exhibit Index following the signature page of this report, which is incorporated herein by reference.74SIGNATURESThe registrant hereby certifies that it meets all of the requirements for filing on Form 20F and that it has duly caused and authorized the undersigned tosign this transition report on its behalf.LUOKUNG TECHNOLOGY CORP.By:/s/ Xuesong Song Xuesong SongChief Executive Officer(principal executive officer)October 12, 201875EXHIBIT INDEXThe following documents are filed as part of this transition report on Form 20F.ExhibitNumberDescription1.1Amended and Restated Memorandum of Association and Articles of Association of Luokung Technology Corp., dated August 20, 2018, and ascurrently in effect.2.1*Deposit Agreement among the Company, depositary and holders of the American Depositary Receipts.2.2*Form of American Depositary Receipt.2.3*English translation of Entrusted Management Agreement dated December 15, 2009 between Xi’an Softech Co., Ltd., Xi’an Kingtone InformationTechnology Co., Ltd. and the shareholders of Xi’an Kingtone Information Technology Co., Ltd.3.1*English translation of Shareholder’s Voting Proxy Agreement dated December 15, 2009 between Xi’an Softech Co., Ltd., Xi’an Kingtone InformationTechnology Co., Ltd. and the shareholders of Xi’an Kingtone Information Technology Co., Ltd.4.1*English translation of Exclusive Technology Service Agreement dated December 15, 2009 between Xi’an Softech Co., Ltd. and Xi’an KingtoneInformation Technology Co., Ltd.4.2*English translation of Exclusive Option Agreement dated December 15, 2009 between Xi’an Softech Co., Ltd., Xi’an Kingtone InformationTechnology Co., Ltd. and the shareholders of Xi’an Kingtone Information Technology Co., Ltd.4.3*English translation of Equity Pledge Agreement dated December 15, 2009 between Xi’an Softech Co., Ltd., Xi’an Kingtone Information TechnologyCo., Ltd. and the shareholders of Xi’an Kingtone Information Technology Co., Ltd.4.4*English translation of Loan Agreement dated September 14, 2009 between Xi’an Kingtone Information Technology Co., Ltd. and Xian CityCommercial Bank.4.5*English translation of Mortgage Agreement dated September 14, 2009 between Xi’an Kingtone Information Technology Co., Ltd. and Xian CityCommercial Bank.4.6*English translation of Form of Employment Agreement entered into between the Company and the Company’s executive officers.4.7*2010 Omnibus Incentive Plan of the Company.4.8**English translation of Project Construction Contract dated August 10, 2010 between Xi’an Hu County Yuxing Agriculture Science & TechnologyCo., Ltd. and Xi’an Kingtone Information Technology Co., Ltd.4.9***Asset Exchange Agreement by and between C Media Limited and the Company dated as of January 25, 2018.4.10***Securities Purchase Agreement by and among Redstone YYL Management Limited and five shareholders holding majority of the shares of theCompany dated as of January 25, 2018.4.15Exclusive Business Cooperation Agreement by and between Zhongchuan Tianxia Information Technology (Shenzhen) Co., Ltd., and Beijing MobileVision Technology Co., Ltd., dated August 31, 2015.764.16Exclusive Option Agreement by and among Zhongchuan Tianxia Information Technology (Shenzhen) Co., Ltd., Xuesong Song, Weili Chen, PingWang, Donglai Liu, and Beijing Mobile Vision Technology Co., Ltd., dated August 31, 2015.4.17Equity Interest Pledge Agreement by and among Zhongchuan Tianxia Information Technology (Shenzhen) Co., Ltd., Xuesong Song, Weili Chen, PingWang, Donglai Liu, and Beijing Mobile Vision Technology Co., Ltd., dated August 31, 2015.4.18Addendum to Asset Exchange Agreement by and among the Company, Topsky Infotech Holdings Pte Ltd. and C Media Limited, dated October 3,2018. Incorporated by reference to the Company’s Current Report on Form 6K filed on October 4, 2018.4.19Stock Purchase Agreement, dated August 25, 2018, by and among the Company, LK Technology Ltd., and the shareholders listedtherein. Incorporated by reference to the Company’s Current Report on Form 6K filed on August 27, 2018.4.20Power of Attorney by Weili Chen, dated August 31, 2015.4.21Power of Attorney by Ping Wang, dated August 31, 2015.4.22Power of Attorney by Donglai Liu, dated August 31, 2015.4.23Power of Attorney by Xuesong Song, dated August 31, 2015.8.1List of Subsidiaries and Consolidated Variable Interest Entities10.1Employment Agreement, dated August 19, 2018, between Luokung Technology Corp. and Xuesong Song.†10.2Employment Agreement, dated August 19, 2018, by and between Luokung Technology Corp. and Jie Yu.†12.1Certification of Chief Executive Officer required by Rule 13a14(a).12.2Certification of Chief Financial Officer required by Rule 13a14(a).13.1Certification of Chief Executive Officer required by Rule 13a14(a).13.2Certification of Chief Financial Officer required by Rule 13a14(a).101.INSXBRL Instance Document.101.SCHXBRL Taxonomy Extension Schema Document.101.CALXBRL Taxonomy Extension Calculation Linkbase Document.101.DEFXBRL Taxonomy Extension Definition Linkbase Document.101.LABXBRL Taxonomy Extension Label Linkbase Document.101.PREXBRL Taxonomy Extension Presentation Linkbase Document.*Previously filed as an exhibit to the Company’s Registration Statement on Form F1 (Reg. No. 333166056) filed with the Commission and incorporated hereinby reference.**Previously filed as exhibits to the Company’s Transition Report on Form 20F filed with the Commission on January 20, 2011 and incorporated herein byreference.***Previously filed as exhibits to the Company’s Annual Report on Form 20F filed with the Commission on February 9, 2018 and incorporated herein byreference.†Indicates management contract or compensatory plan, contract or arrangement.77LK Technology Ltd. and SubsidiariesCONSOLIDATED FINANCIAL STATEMENTSTABLE OF CONTENTSPage(s)Report of Independent Registered Public Accounting FirmF2Consolidated Financial StatementsConsolidated Balance SheetsF3Consolidated Statements of Operations and Comprehensive LossF4application.Chuang (Vincent) Tao was appointed as a member of the Board effective on August 25, 2018. Dr. Tao was the Chairman of SuperEngine Suzhou from 2014to 2017. Dr. Tao has been the president of the Seasky Angel Investment Alliance of Shanghai since 2015. Dr. Tao received his Bachelor Degree of geographicinformation and telemetry from Wuhan University in China in 1990 and received his Ph.D. from University of Calgary, Canada in 1997.Dennis Galgano was appointed as a director of the Company following the consummation of the asset exchange agreement. He was a registered consultantwith Morgan Joseph Triartisan LLC from November 2016 until October 2017, and previously served as vice chairman and head of international investment bankingfor Morgan Joseph Triartisan LLC, which is a registered broker dealer engaged in the investment banking and financial advisory industry. Mr. Galgano received aB.S. degree in Chemistry from St. John’s University and an M.B.A. from The Wharton School in 1972.Jin Shi was appointed as a director of the Company following the consummation of the asset exchange transactions. Mr. Shi has served as the managingpartner of Chum Capital Group, a merchant bank focused on helping Chinese growth companies to access global capital, since January 2013. Mr. Shi has also servedas a director of Seven Stars Cloud Group, Inc. (NASDAQ: SSC), a premium video on demand service provider, since January 2014, and joined the audit committee ofits board of directors in March 2016. He also served as a director and member of the audit committee of Pingtan Marine Enterprise, Ltd. (NASDAQ: PME), a marineenterprise group primarily engaged in ocean fishing through its subsidiaries. Mr. Shi received an EMBA degree from the Guanghua Management School of BeijingUniversity, and a Bachelor’s degree of science in Chemical Engineering from Tianjin University.Jiming Ha was appointed as a director of the Company following the consummation of the asset exchange agreement, and has also served as a seniorresearch fellow for the China Finance 40 Forum since March 1, 2018, and previously served as a managing director of Goldman Sachs from January 2017 to April2017. Mr. Ha served as a vice chairman and chief investment strategist of the Investment Strategy Group for Private Wealth Management at Goldman Sachs from2010 to January 2017. Mr. Ha holds a PhD in Economics from the University of Kansas and Master’s and Bachelor’s degrees of science from Fudan University.Zhihao Xu was appointed as a director of the Company following the consummation of the asset exchange transactions. Mr. Xu has served as the chiefexecutive officer of Geely Group Co., Ltd., in Hangzhou, China, since December 2017, and previously served as the chairman and chief executive officer of BeijingDingchengrenhe Investment Co., Ltd., a funds management company, from January 2017 to December 2017. Mr. Xu served as the chairman of president of HNAUSOLV CO., LTD., and the chief innovation officer of HNA Logistics Group from January 2014 to December 2016, and prior to that as the chairman of GopayInnovation Technology Co. Ltd., an online payment system operator supporting online money transfers, from April 2012 to January 2014. Mr. Xu graduated from theBusiness School of Renmin University of China and from the Wudaokou Finance College of Tsinghua University with a fund qualification certificate and securitiesqualification certificate.B. COMPENSATION.Compensation of Directors and Executive OfficersFor the ninemonth transition period ended September 30, 2018 and the fiscal year ended December 31, 2017, we did not pay any cash compensation to ourexecutive officers of LK Technology Ltd. and a to our directors for serving on our board of directors of LK Technology Ltd.37Other than nonemployee directors, we do not intend to compensate directors for serving on our board of directors or any of its committees. We do,however, intend to reimburse each member of our board of directors for outofpocket expenses incurred by each director in connection with attending meetings ofthe board of directors and its committees.AdministrationThe Incentive Plan is administered by our board of directors, or at the discretion of the board, by our compensation committee. Our board of directors hasdelegated authority to our compensation committee to administer the Incentive Plan. Subject to the terms of the Incentive Plan, the compensation committee mayselect participants to receive awards, determine the types of awards and terms and conditions of awards, and interpret provisions of the Incentive Plan.The ordinary shares issued or to be issued under the Incentive Plan consist of authorized but unissued shares. If any ordinary shares covered by an awardare not purchased or are forfeited, or if an award otherwise terminates without delivery of any ordinary shares, then the number of ordinary shares counted againstthe aggregate number of ordinary shares available under the plan with respect to the award will, to the extent of any such forfeiture or termination, again be availablefor making awards under the Incentive Plan.EligibilityAwards may be made under the Incentive Plan to our employees, officers, directors, consultants or advisers or to any of our affiliates, and to any otherindividual whose participation in the Incentive Plan is determined to be in our best interests by our board of directors.Amendment or Termination of the PlanOur board of directors may terminate or amend the Incentive Plan at any time and for any reason. No amendment, however, may adversely impair the rightsof grantees with respect to outstanding awards. The Incentive Plan has a term of ten years. Amendments will be submitted for shareholder approval to the extentrequired by applicable stock exchange listing requirements or other applicable laws.OptionsThe Incentive Plan permits the granting of options to purchase ordinary shares intended to qualify as incentive share options under the Internal RevenueCode and share options that do not qualify as incentive share options, or nonqualified share options.The exercise price of each share option may not be less than 100% of the fair market value of our ADSs representing ordinary shares on the date of grant.In the case of certain 10% shareholders who receive incentive share options, the exercise price may not be less than 110% of the fair market value of our ADSsrepresenting ordinary shares on the date of grant. An exception to these requirements is made for options that we grant in substitution for options held byemployees of companies that we acquire. In such a case the exercise price is adjusted to preserve the economic value of the employee’s share option from his or herformer employer.The term of each share option is fixed by the compensation committee and may not exceed ten years from the date of grant. The compensation committeedetermines at what time or times each option may be exercised and the period of time, if any, after retirement, death, disability or termination of employment duringwhich options may be exercised.Options may be made exercisable in installments. The award agreement provides the vesting of the options. Exercisability of options may be accelerated bythe compensation committee.38In general, an optionee may pay the exercise price of an option by (1) cash or check (in U.S. dollars or Renminbi or other local currency as approved by thecompensation committee), (2) ordinary shares held for such period of time as may be required by the compensation committee, (3) delivery of a notice of a marketorder with a broker with respect to ordinary shares then issuable upon exercise of an option, and that the broker has been directed to pay us a sufficient portion ofnet proceeds of the sale in satisfaction of the exercise price, provided that payment of such proceeds is then made to us upon settlement of such sale, (4) otherproperty acceptable to the compensation committee with a fair market value equal to the exercise price, (5) cashless exercise or (6) any combination of the foregoing.Share options granted under the Incentive Plan may not be sold, transferred, pledged, or assigned other than by will or under applicable laws of descentand distribution. However, we may permit limited transfers of nonqualified options for the benefit of immediate family members of grantees to help with estateplanning concerns or pursuant to a domestic relations order in settlement of marital property rights.Other AwardsThe compensation committee may also award under the Incentive Plan:1.ordinary shares subject to restrictions;2.deferred ordinary shares, credited as deferred ordinary share units, but ultimately payable in the form of unrestricted ordinary shares inaccordance with the terms of the grant or with the participant’s deferral election;3.ordinary share units subject to restrictions;4.unrestricted ordinary shares, which are ordinary shares issued at no cost or for a purchase price determined by the compensation committee whichare free from any restrictions under the 2011 Omnibus Incentive Plan;5.dividend equivalent rights entitling the grantee to receive credits for dividends that would be paid if the grantee had held a specified number ofordinary shares; or6.a right to receive a number of ordinary shares or, in the discretion of the compensation committee, an amount in cash or a combination of ordinaryshares and cash, based on the increase in the fair market value of the ADSs representing ordinary shares underlying the right during a statedperiod specified by the compensation committee.Effect of Certain Corporate TransactionsCertain change of control transactions involving us may cause awards granted under the Incentive Plan to vest, unless the awards are continued orsubstituted for by the surviving company in connection with the corporate transaction.Unless otherwise provided in the appropriate option agreement on the date of grant or provided by our board of directors thereafter with the consent of thegrantee, options granted under the Incentive Plan become exercisable in full following (1) a dissolution of our company or a merger, consolidation or reorganizationof our company with one or more other entities in which we are not the surviving entity, (2) a sale of substantially all of our assets to another person or entity, or (3)any transaction (including without limitation a merger or reorganization in which we are the surviving entity) which results in any person or entity owning 50% ormore of the combined voting power of all classes of our shares.39Adjustments for Dividends and Similar EventsThe compensation committee will make appropriate adjustments in outstanding awards and the number of ordinary shares available for issuance under theIncentive Plan, including the individual limitations on awards, to reflect ordinary share dividends, stock splits and other similar events.C. BOARD PRACTICES.Board of DirectorsOur board of directors consists of six members being Messrs. Xuesong Song, Kegang Peng, Dennis Galgano, Jin Shi, Jiming Ha and Zhiaho Xu. Ourdirectors hold office until our annual meeting of shareholders, where their successors will be duly elected and qualified, or until the directors’ death, resignation orremoval, whichever is earlier. Our directors are not subject to a term of office and hold office until their resignation, death or incapacity or until their respectivesuccessors have been elected and qualified in accordance with our fourth amended and restated memorandum of association and articles of association. A directorwill be removed from office if, among other things, the director (1) becomes bankrupt, (2) dies or becomes of unsound mind, or (3) is absent from meetings of ourboard of directors for six consecutive months without leave and our board of directors resolves that the office is vacated. A director is not entitled to any specialbenefits upon termination of service with the company.Director IndependenceOur board of directors consists of six members; Messrs. Dennis Galgano, Jin Shi, Jiming Ha and Zhihao Xu have been determined by us to be independentdirectors within the meaning of the independent director guidelines of the NASDAQ Corporate Governance Rules (the “NASDAQ Rules”).Committees of Our Board of DirectorsTo enhance our corporate governance, we established three committees under our board of directors: an audit committee, a compensation committee, and anominating and corporate governance committee. We have adopted a charter for each of these committees. The committees have the following functions andmembers.Audit CommitteeOur audit committee reports to our board of directors regarding the appointment of our independent public accountants, the scope and results of ourannual audits, compliance with our accounting and financial policies and management’s procedures and policies relating to the adequacy of our internal accountingcontrols. Our audit committee consists of Messrs. Dennis Galgano, Jin Shi, and Jiming Ha. Mr. Galgano, having accounting and financial management expertise,serves as the chairman of the audit committee and is an “audit committee financial expert” as defined by the rules and regulations of the SEC. Our board of directorshas determined that each of these persons meet the definition of an “independent director” under the applicable NASDAQ Rules and under Rule 10A3 of theSecurities Exchange Act of 1934, as amended (the “Exchange Act”).Our audit committee is responsible for, among other things:●the appointment, evaluation, compensation, oversight and termination of the work of our independent auditor (including resolution of disagreementsbetween management and the independent auditor regarding financial reporting);●an annual performance evaluation of the audit committee;●establishing procedures for the receipt, retention and treatment of complaints regarding accounting, internal accounting controls, auditing matters orpotential violations of law, and the confidential, anonymous submission by our employees of concerns regarding questionable accounting or auditingmatters or potential violations of law;40●ensuring that it receives an transition report from our independent auditor describing our internal control procedures and any steps taken to deal withmaterial control deficiencies and attesting to the auditor’s independence and describing all relationships between the auditor and us;●reviewing our annual audited financial statements and quarterly financial statements with management and our independent auditor;●reviewing and approving all proposed related party transactions;●reviewing our policies with respect to risk assessment and risk management;●meeting separately and periodically with management and our independent auditor; and●reporting regularly to our board of directors.Compensation CommitteeOur compensation committee assists the board of directors in reviewing and approving the compensation structure of our directors and executive officers,including all forms of compensation to be provided to our directors and executive officers. In addition, the compensation committee reviews share compensationarrangements for all of our other employees. Members of the compensation committee are not prohibited from direct involvement in determining their owncompensation. Our chief executive officer is not permitted to be present at any committee meeting during which his or her compensation is deliberated. Ourcompensation committee consists of Dennis Galgano and Jin Shi, with Mr. Shi serving as the chairman of the compensation committee. Our board of directors hasdetermined that each of these persons meet the definition of “independent director” under the applicable requirements of the NASDAQ Rules.Our compensation committee is responsible for, among other things:●reviewing and approving corporate goals and objectives relevant to the compensation of our chief executive officer, evaluating the performance of ourchief executive officer in light of those goals and objectives and setting the compensation level of our chief executive officer based on this evaluation;●reviewing and making recommendations to the board with respect to the compensation of our executives, incentive compensation and equitybasedplans that are subject to board approval; and●providing annual performance evaluations of the compensation committee.Nominating and Corporate Governance CommitteeOur nominating and corporate governance committee assists the board of directors in identifying and selecting or recommending individuals qualified tobecome our directors, developing and recommending corporate governance principles and overseeing the evaluation of our board of directors and management. Ournominating and corporate governance committee consists of Jiming Ha and Zhihao Xue, with Mr. Ha serving as the chairman of the nominating and corporategovernance committee. Our board of directors has determined that each of these persons meet the definition of “independent director” under the applicablerequirements of the NASDAQ Rules.Our nominating and corporate governance committee is responsible for, among other things:●selecting and recommending to our board nominees for election or reelection to our board, or for appointment to fill any vacancy;●reviewing annually with our board the current composition of the board of directors with regards to characteristics such as independence, age, skills,experience and availability of service to us;●selecting and recommending to our board the names of directors to serve as members of the audit committee and the compensation committee, as wellas the nominating and corporate governance committee itself; advising our board of directors periodically with regards to significant developments inthe law and practice of corporate governance as well as our compliance with applicable laws and regulations, and making recommendations to ourboard of directors on all matters of corporate governance and on any remedial action to be taken; and●monitoring compliance with our code of business conduct and ethics, including reviewing the adequacy and effectiveness of our procedures to ensureproper compliance.41Code of Business Conduct and EthicsOur board of directors adopted a code of business conduct and ethics applicable to our directors, officers and employees.Duties of DirectorsUnder British Virgin Islands law, our directors have a duty to act honestly, in good faith and with a view to our best interests. Our directors also have a dutyto exercise care, diligence and skills that a reasonably prudent person would exercise in comparable circumstances. In fulfilling their duty of care to us, our directorsmust ensure compliance with our memorandum of association and articles of association. We have the right to seek damages if a duty owed by our directors isbreached.The functions and powers of our board of directors include, among others:●appointing officers and determining the term of office of the officers;●authorizing the payment of donations to religious, charitable, public or other bodies, clubs, funds or associations as deemed advisable;●exercising the borrowing powers of the company and mortgaging the property of the company;●executing cheques, promissory notes and other negotiable instruments on behalf of the company; and●maintaining or registering a register of mortgages, charges or other encumbrances of the company.Remuneration and BorrowingThe directors may receive such remuneration as our board of directors may determine from time to time. Each director is entitled to be repaid or prepaid alltraveling, hotel and incidental expenses reasonably incurred or expected to be incurred in attending meetings of our board of directors or committees of our board ofdirectors or shareholder meetings or otherwise in connection with the discharge of his or her duties as a director. The compensation committee will assist thedirectors in reviewing and approving the compensation structure for the directors.Our board of directors may exercise all the powers of the company to borrow money and to mortgage or charge our undertakings and property or any partthereof, to issue debentures, debenture stock and other securities whenever money is borrowed or as security for any debt, liability or obligation of the company orof any third party.QualificationA director is not required to hold shares as a qualification to office.42Limitation on Liability and Other Indemnification MattersBritish Virgin Islands law does not limit the extent to which a company’s memorandum of association and articles of association may provide forindemnification of officers and directors, except to the extent any such provision may be held by the British Virgin Islands courts to be contrary to public policy,such as to provide indemnification against civil fraud or the consequences of committing a crime.Under our memorandum of association and articles of association, we may indemnify our directors, officers and liquidators against all expenses, includinglegal fees, and against all judgments, fines and amounts paid in settlement and reasonably incurred in connection with civil, criminal, administrative or investigativeproceedings to which they are party or are threatened to be made a party by reason of their acting as our director, officer or liquidator. To be entitled toindemnification, these persons must have acted honestly and in good faith with a view to the best interest of the company and, in the case of criminal proceedings,they must have had no reasonable cause to believe their conduct was unlawful.Compensation Committee Interlocks and Insider ParticipationNone of the members of our compensation committee is an officer or employee of our company. None of our executive officers currently serves, or in thepast year has served, as a member of the board of directors or compensation committee of any entity that has one or more executive officers serving on our board ofdirectors or compensation committee.Employment AgreementsOn August 19, 2018, the Company entered into an Employment Agreement (the “Song Agreement”) with Mr. Xuesong Song, to serve as the ChiefExecutive Officer of the Company for a fouryear term, subject to renewal. Under the terms of the Song Agreement, Mr. Song will receive no salary for his servicesbut will be eligible for an annual cash bonus in the Board’s sole discretion.On August 19, 2018, the Company entered into an Employment Agreement (the “Yu Agreement”) with Mr. Jie Yu, to serve as the Chief Financial Officer ofthe Company for a fouryear term, subject to renewal. Under the terms of the Yu Agreement, Mr. Yu will receive an annual salary of RMB700,000, and will be eligiblefor an annual cash bonus in the Board’s sole discretion.D. EMPLOYEES.As of September 30, 2018 and December 31, 2017, we had a total of 107 and 37 fulltime employees, including 48 and 13 in research and development, 9 and 2in sales and marketing and the rest in a variety of other divisions, respectively. All of our employees are fulltime employees. None of our employees is currentlyrepresented by a union and/or collective bargaining agreements. We believe that we have good relations with our employees and since our inception we have hadno history of work stoppages or union organizing campaigns.E. SHARE OWNERSHIP.The following table provides information as to the beneficial ownership of our ordinary shares as of October 10, 2018, by the persons listed. Beneficialownership of shares is determined under the rules of the SEC and generally includes any shares over which a person exercises sole or shared voting or investmentpower. For purposes of the following table, a person is deemed to have beneficial ownership of any ordinary shares if such person has the right to acquire suchshares within 60 days of October 10, 2018. For purposes of computing the percentage of outstanding shares held by each person, any shares that such person hasthe right to acquire within 60 days after of October 10, 2018 are deemed to be outstanding, but are not deemed to be outstanding for the purpose of computing thepercentage ownership of any other person. Except as otherwise noted, the persons named in the table have sole voting and investment power with respect to all ofthe ordinary shares beneficially owned by them. Unless otherwise indicated, the address of each person listed is c/o Luokung Technologies, LAB 32, SOHO 3Q, No9, Guanghua Road, Chaoyang District, Beijing, People’s Republic of China.43Percentage ownership in the following table is based on 199,317,558 ordinary shares outstanding on October 10, 2018.Number ofsharesPercent ofclassDirectors and named executive officersCharm Dragon International Limited (1)4,030,8822.03%Xuesong Song, Chairman, Chief Executive Officer and Director(2)38,156,43019.30%Kegang Peng, Vice President and Director (3)17,231,9558.71%Dennis Galgano, Director75,796*%Jin Shi, DirectorJiming Ha, DirectorZhihao Xu, Director (4)7,579,1843.83%Dongpu Zhang, President (5)2,321,7921.17%Chuang Tao, Director (6)1,221,996*%Directors and executive officers as a group (10 persons)66,587,15233.69%(1)Charm Dragon International Limited is a British Virgin Islands company controlled by Mr. Xuesong Song.(2)Consists of (i) 4,030,882 shares owned directly by Charm Dragon International Limited, a British Virgin Islands company and (ii) 22,624,793 shares owneddirectly by Bravo First Development Limited, a British Virgin Islands company. Mr. Xuesong Song is the controlling shareholder of Bravo First DevelopmentLimited. Mr. Xuesong Song is the sole director of Charm Dragon International Limited.(3)Consists of 17,231,955 shares owned directly by Plenty Prestige Enterprises Limited, a British Virgin Islands company. Mr. Kegang Peng is the sole director ofPlenty Prestige Enterprises Limited.(4)Consists of 7,579,184 shares directly owned by Geely Group Limited., a Chinese company. Mr. Zhihao Xu is the Chief Executive Officer of Geely GroupLimited.(5)Consists of 2,321,792 shares owned directly by Genoa Peak Limited, a British Virgin Islands company. Mr. Dongpu Zhang controls Genoa Peak Limited.(6)Consists of 1,221,996 shares owned directly by Globalearth Holdings Limited, a British Virgin Islands company. Mr. Chuang Tao controls Globalearth HoldingsLimited.*Represents less than 1% of shares outstandingITEM 7. MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS.A. MAJOR SHAREHOLDERSPlease refer to Item 6.E “Directors, Senior Management and Employees — Share Ownership.”To our knowledge, (A) we are not directly or indirectly owned or controlled by (i) another corporation or (ii) any foreign government and (B) there are noarrangements (including any announced or expected takeover bid), the operation of which may at a subsequent date result in a change in our control.The voting rights of our major shareholders do not differ from the voting rights of other holders of the same class of shares.44B. RELATED PARTY TRANSACTIONS. BUSINESS RELATIONSHIPS.Our subsidiaries, consolidated affiliated entities, and the subsidiaries of the consolidated affiliated entities have engaged, during the ordinary course ofbusiness, in a number of customary transactions with each other. All of these intercompany balances have been eliminated in consolidation.As of December 31, 2017, we had amounts due from related parties, C Media Limited and Ya Tuo Ji International Consultancy (Beijing) Limited, in theamounts of $11.8 million and $0.2 million, respectively. These amounts due from related parties are short term in nature, noninterest bearing, unsecured andrepayable on demand.As of December 31, 2017, we had amounts due to related parties, Mr. Xuesong Song, our chairman and chief executive officer, Thumb Beijing Branch andThumb Shenzhen Branch, in the amounts of $2.9 million, $0.6 million and $0.03 million, respectively. These amounts due to related parties are short term in nature,noninterest bearing, unsecured and payable on demand.We are party to a series of control agreements with Beijing Zhong Chuan Shi Xun. In addition, our chief executive officer, Mr. Xuesong Song, serves as andofficer of Beijing Zhong Chuan Shi Xun and is a shareholder of Beijing Zhong Chuan Shi Xun. The following table sets forth the relationship of Mr. Song withBeijing Zhong Chuan Shi Xun:NameRelationship withLuokung TechnologyRelationship withBeijing Zhong Chuan Shi XunPercentageOwnership Interest inBeijing Zhong Chuan Shi XunXuesong SongChief Executive OfficerChief Executive Officer61.83%C. INTERESTS OF EXPERTS AND COUNSEL.None.ITEM 8. FINANCIAL INFORMATION.A. CONSOLIDATED STATEMENTS AND OTHER FINANCIAL INFORMATION.See “Item 18. Financial Statements.”Legal ProceedingsTo our knowledge, other than as described below there are no material legal proceedings threatened against us. From time to time, we may be subject tovarious claims and legal actions arising in the ordinary course of business. Following the consummation of the AEA, we became successor in interest to the legalproceedings described below.Litigation with Shanghai Fusheng Weier Intelligent Control Technology Co., Ltd.On January 22, 2016, Zhong Chuan Rui You and Shanghai Fusheng Weier Intelligent Control Technology Co., Ltd. (“Fusheng Weier”) signed a contract forequipment of $1,652,842 (RMB10,800,000). Since Zhong Chuan Rui You did not make the payments of $1,126,381 (RMB7,360,000) on the due dates, Fusheng Weierfiled a lawsuit against Zhong Chuan Rui You in Shanghai Xuhui District People's Court on October 8, 2016. On March 9, 2017, Xuhui District People's Court issuedthe verdict requiring Zhong Chuan Rui You to pay the overdue debts. In August 2017, C Media Limited made the payment of $512,075 (RMB3,346,000). Theremaining balance has been accrued in accounts payable. The payment schedule for the remaining balance is being negotiated by the two parties. On February 5,2018, a hearing was held adding Zhong Chuan Shi Xun as a defendant. The Group plans to settle the remaining balance within one year.45Lawsuit with Gansu Jinlun Culture Media Co., Ltd.On August 22, 2014, Zhong Chuan Rui You and Gansu Jinlun Culture Media Co., Ltd. (“Gansu Jinlun”) signed a “Lanzhou Railway Bureau AirconditionedTrain WiFi Network System Advertising Operation Rights Agreement” for advertising on 72 trains of $1,467,880 (RMB9,604,633). Due to the dispute on theproject implementation, Zhong Chuan Rui You did not pay the advertising fee. On August 23, 2017, Gansu Jinlun filed a lawsuit with Gansu Intermediate People'sCourt. On December 19, 2017, Gansu Intermediate People's Court issued a verdict, ruling that Zhong Chuan Rui You settle the overdue advertising fee. Since only 18out of 72 trains have been installed with Wifi network system, Zhong Chuan Rui You disputed and appealed to the verdict. The next court trial date has not yet beendetermined. C Media and Gansu Jinlun are negotiating a potential settlement to resume the contract. According to the legal counsel, it is probable that the settlementwill amount to approximately $459,000 (RMB3,000,000); therefore, this amount has been accrued in accounts payable as at December 31, 2017.Litigation with Shenzhen Hua Xun Fang Zhou Technology Co., Ltd.On June 16, 2015, Zhong Chuan Rui You signed a cooperation agreement with Shenzhen Hua Xun Fang Zhou Technology Co., Ltd. (“Shenzhen Hua Xun”)and Xuesong Song, a major shareholder of C Media Limited. Pursuant to this agreement, Zhong Chuan Rui You procures equipment from Shenzhen Hua Xun.Xuesong Song acts as a joint liability guarantor for the entire debts of Zhong Chuan Rui You under this agreement. As Zhong Chuan Rui You did not make thepayments on the due dates, Shenzhen Hua Xun filed a lawsuit with Shenzhen Baoan District People's Court on May 31, 2016. On November 1, 2016, Zhong ChuanRui You, Xuesong Song and Shenzhen Hua Xun reached a settlement in Shenzhen Baoan District People's Court to settle $1,735,389 (RMB11,355,000) in fourinstalments. On December 30, 2017, the debt was assigned to C Media Limited.Dividend PolicyWe currently intend to retain all of our available funds and future earnings for use in the operation and expansion of our business and do not anticipatepaying cash dividends in the foreseeable future. Under the terms of our Amended and Restated Memorandum and Articles of Association the declaration andpayment of any dividends in the future will be determined by our board of directors, in its discretion, and will depend on a number of factors, including our earnings,capital requirements and overall financial condition and our ability to receive dividends from our subsidiaries. If we pay any dividends, we will pay our ADS holders’dividends with respect to their underlying shares to the same extent as holders of our ordinary shares, subject to the terms of the deposit agreement, including thefees and expenses payable thereunder. Cash dividends on our ordinary shares, if any, will be paid in U.S. dollars.Our ability to receive dividends from our subsidiaries may limit our ability to pay dividends on our ordinary shares. See Risk Factors – Risks Related toDoing Business in China – Our holding company structure may limit the payment of dividends” and “Item 10. Additional Information – D. Exchange Controls –Dividend Distribution”.B. SIGNIFICANT CHANGES.N/AITEM 9. THE OFFER AND LISTINGA. OFFER AND LISTING DETAILS.Markets and Share Price HistoryOur ordinary shares are not currently listed on any trading market. Our American Depository Shares (“ADSs”) were voluntarily delisted from the NASDAQCapital Market on September 19, 2018. We have applied to NASDAQ for the listing of our ordinary shares on the NASDAQ Capital Market and received an approvalfor listing of Ordinary Shares on August 6, 2018, and as of the date of this transition report, that application and approval are currently under review.46The table below sets forth the high and low reported sales prices in dollars of our ordinary shares, which are represented by ADSs, as reported byNASDAQ in the periods as indicated:ADSHighLowAnnual Highs and Lows (as of the fiscal year end 09/30 for the five most recent full financial years)*20175.592.67201610.21.62Quarterly Highs and Lows (for the two most recent full financial years and any subsequent period, based on calendarquarter end)*2018Third Quarter8.006.30Second Quarter8.824.25First Quarter6.403.702017Fourth Quarter5.592.91Third Quarter3.992.67Second Quarter4.063.07First Quarter5.152.832016Fourth Quarter6.594.20Third Quarter10.201.62Second Quarter3.101.97First Quarter3.602.12Monthly Highs and Lows (for the most recent six months)September 20188.006.41August 20187.706.63July 20187.506.30June 20188.827.55May 20187.805.92April 20187.454.25*The Company effected a 1for10 reverse stock split of its ordinary shares on November 6, 2012 (the “Reverse Split”). The ratio between each AmericanDepositary Share (“ADS”) and its underlying ordinary share postReverse Split remains the same, namely, one ADR remains to represent one ordinary sharepost the Reverse Split. The price listed here after November 6, 2012 reflected the effect from the Reverse Split.B. PLAN OF DISTRIBUTION.Not Applicable.C. MARKETS.Our ordinary shares are not currently listed on any trading market. Our ADSs were voluntarily delisted from the NASDAQ Capital Market on September 19,2018. We have applied to NASDAQ for the listing of our ordinary shares on the NASDAQ Capital Market and received an approval for listing of Ordinary Shares onAugust 6, 2018, and as of the date of this transition report, that application and approval are currently under review.47D. SELLING SHAREHOLDERS.Not applicable.E. DILUTION.Not applicable.F. EXPENSES OF THE ISSUE.Not applicable.ITEM 10. ADDITIONAL INFORMATION.A. SHARE CAPITALNot applicable.B. MEMORANDUM AND ARTICLES OF ASSOCIATIONWe are a British Virgin Islands company incorporated with limited liability and our affairs are governed by the provisions of our memorandum of associationand articles of association, as amended and restated from time to time, and by the provisions of applicable British Virgin Islands law.Our memorandum of association and articles of association authorize the issuance of up to 251,000,000 shares, which are designated into (i) 250,000,000 ofordinary shares of the Company (“Ordinary Shares”), and (ii) 1,000,000 preferred shares of the Company (“Preferred Shares”), in each case with the rights,preferences and privileges as set out in the memorandum and articles of association of the Company.Please see below for a description of our ADSs under “Item 12. Description of Securities Other Than Equity Securities – D. American Depository Shares.”The following is a summary of the material provisions of our ordinary shares and our memorandum of association and articles of association.Ordinary SharesAll of our issued and outstanding ordinary shares are fully paid and nonassessable. Holders of our ordinary shares who are nonresidents of the BritishVirgin Islands may freely hold and vote their shares.Subject to the memorandum and articles of association (and, for greater clarity, without prejudice to any special rights conferred thereby on the holders ofany other shares), an Ordinary Share of the Company confers on the holder:(a)the right to one vote per Ordinary Share at a meeting of the members or on any resolution of members;(b)the right to an equal share in any distribution paid by the Company; and(c)the right to an equal share in the distribution of the surplus assets of the Company on a winding up;48Subject to the memorandum and articles of association (and, for greater clarity, without prejudice to any special rights conferred thereby on the holders ofany other shares), a Preferred Share of the Company confers on the holder:(a)the right to 399 votes per Preferred Share at a meeting of the members or on any resolution of members;(b)the right to an equal share in any distribution paid by the Company;(c)the right to an equal share in the distribution of the surplus assets of the Company on a winding up;(d)be freely transferable, in whole or in part, by Mr. Xuesong Song to any third party through one or more Private Transactions, subject toApplicable Law; and(e)be freely transferable, in whole or in part, by Mr. Xuesong Song to any third party through one or more Public Transactions, subject to ApplicableLaw and Automatic Conversion of such Preferred Share(s) into Ordinary Share(s).Each Preferred Share shall be automatically converted at any time after issue and without the payment of any additional sum into an equal number of fullypaid Ordinary Shares upon the conclusion of any transfer by Mr. Xuesong Song to any third party through one or more Public Transactions.Limitation on Liability and Indemnification MattersUnder British Virgin Islands law, each of our directors and officers, in performing his or her functions, is required to act honestly and in good faith with aview to our best interests and exercise the care, diligence and skill that a reasonably prudent person would exercise in comparable circumstances. Our memorandumof association and articles of association provide that, to the fullest extent permitted by British Virgin Islands law or any other applicable laws, our directors will notbe personally liable to us or our shareholders for any acts or omissions in the performance of their duties. Such limitation of liability does not affect the availabilityof equitable remedies such as injunctive relief or rescission. These provisions will not limit the liability of directors under United States federal securities laws.We may indemnify any of our directors or anyone serving at our request as a director of another entity against all expenses, including legal fees, andagainst all judgments, fines and amounts paid in settlement and reasonably incurred in connection with legal, administrative or investigative proceedings. We mayonly indemnify a director if he or she acted honestly and in good faith with the view to our best interests and, in the case of criminal proceedings, the director hadno reasonable cause to believe that his or her conduct was unlawful. The decision of our board of directors as to whether the director acted honestly and in goodfaith with a view to our best interests and as to whether the director had no reasonable cause to believe that his or her conduct was unlawful, is in the absence offraud sufficient for the purposes of indemnification, unless a question of law is involved. The termination of any proceedings by any judgment, order, settlement,conviction or the entry of no plea does not, by itself, create a presumption that a director did not act honestly and in good faith and with a view to our best interestsor that the director had reasonable cause to believe that his or her conduct was unlawful. If a director to be indemnified has been successful in defense of anyproceedings referred to above, the director is entitled to be indemnified against all expenses, including legal fees, and against all judgments, fines and amounts paidin settlement and reasonably incurred by the director or officer in connection with the proceedings.We may purchase and maintain insurance in relation to any of our directors or officers against any liability asserted against the directors or officers andincurred by the directors or officers in that capacity, whether or not we have or would have had the power to indemnify the directors or officers against the liabilityas provided in our memorandum of association and articles of association.Insofar as indemnification for liabilities arising under the Securities Act may be permitted for our directors or officers under the foregoing provisions, wehave been informed that in the opinion of the Securities and Exchange Commission, such indemnification is against public policy as expressed in the Securities Actand is therefore unenforceable as a matter of United States law.49Differences in Corporate LawWe were incorporated under, and are governed by, the laws of the British Virgin Islands. The corporate statutes of the State of Delaware and the BritishVirgin Islands are similar, and the flexibility available under British Virgin Islands law has enabled us to adopt memorandum of association and articles of associationthat will provide shareholders with rights that do not vary in any material respect from those they would enjoy if we were incorporated under the Delaware GeneralCorporation Law, or Delaware corporate law. Set forth below is a summary of some of the differences between provisions of the BVI Act applicable to us and thelaws application to companies incorporated in Delaware and their shareholders.Director’s Fiduciary DutiesUnder Delaware corporate law, a director of a Delaware corporation has a fiduciary duty to the corporation and its stockholders. This duty has twocomponents: the duty of care and the duty of loyalty. The duty of care requires that a director act in good faith, with the care that an ordinarily prudent personwould exercise under similar circumstances. Under this duty, a director must inform himself of, and disclose to stockholders, all material information reasonablyavailable regarding a significant transaction. The duty of loyalty requires that a director act in a manner he reasonably believes to be in the best interests of thecorporation. He must not use his corporate position for personal gain or advantage. This duty prohibits selfdealing by a director and mandates that the bestinterest of the corporation and its stockholders take precedence over any interest possessed by a director, officer or controlling stockholder and not shared by thestockholders generally. In general, actions of a director are presumed to have been made on an informed basis, in good faith and in the honest belief that the actiontaken was in the best interests of the corporation. However, this presumption may be rebutted by evidence of a breach of one of the fiduciary duties. Should suchevidence be presented concerning a transaction by a director, a director must prove the procedural fairness of the transaction, and that the transaction was of fairvalue to the corporation.British Virgin Islands law provides that every director of a British Virgin Islands company in exercising his powers or performing his duties shall acthonestly and in good faith and in what the director believes to be in the best interests of the company. Additionally, the director shall exercise the care, diligence andskill that a reasonable director would exercise in the same circumstances taking into account the nature of the company, the nature of the decision and the positionof the director and his responsibilities. In addition, British Virgin Islands law provides that a director shall exercise his powers as a director for a proper purpose andshall not act, or agree to the company acting, in a manner that contravenes British Virgin Islands law or the memorandum association or articles of association of thecompany.Amendment of Governing DocumentsUnder Delaware corporate law, with very limited exceptions, a vote of the stockholders is required to amend the certificate of incorporation. Under BritishVirgin Islands law and our memorandum of association and articles of association, (i) our shareholders may amend our memorandum of association and articles ofassociation by a resolution of shareholders, or (ii) our board of directors may amend our memorandum of association and articles of association by a resolution ofdirectors without a requirement for a resolution of shareholders so long as the amendment does not:●restrict the rights of the shareholders to amend the memorandum of association and articles of association;●change the percentage of shareholders required to pass a resolution of shareholders to amend the memorandum of association and articles ofassociation;●amend the memorandum of association and articles of association in circumstances where the memorandum of association and articles ofassociation cannot be amended by the shareholders; or●amend the provisions of memorandum of association or the articles of association pertaining to “rights attaching to shares,” “rights not varied bythe issue of the shares pari passu,” “variation of rights” and “amendment of memorandum and articles”.50Written Consent of DirectorsUnder Delaware corporate law, directors may act by written consent only on the basis of a unanimous vote. Under British Virgin Islands law, directors’consents need only a majority of directors signing to take effect.Written Consent of ShareholdersUnder Delaware corporate law, unless otherwise provided in the certificate of incorporation, any action to be taken at any annual or special meeting ofstockholders of a corporation, may be taken by written consent of the holders of outstanding stock having not less than the minimum number of votes that wouldbe necessary to take such action at a meeting. As permitted by British Virgin Islands law, shareholders’ consents need only a majority of shareholders signing totake effect. Our memorandum of association and articles of association provide that shareholders may approve corporate matters by way of a resolution consentedto at a meeting of shareholders or in writing by a majority of shareholders entitled to vote thereon.Shareholder ProposalsUnder Delaware corporate law, a shareholder has the right to put any proposal before the annual meeting of shareholders, provided it complies with thenotice provisions in the governing documents. A special meeting may be called by the board of directors or any other person authorized to do so in the governingdocuments, but shareholders may be precluded from calling special meetings. British Virgin Islands law and our memorandum of association and articles ofassociation provide that our directors shall call a meeting of the shareholders if requested in writing to do so by shareholders entitled to exercise at least 30% of thevoting rights in respect of the matter for which the meeting is requested.Sale of AssetsUnder Delaware corporate law, a vote of the stockholders is required to approve the sale of assets only when all or substantially all assets are being sold. Inthe British Virgin Islands, shareholder approval is required when more than 50% of the company’s total assets by value are being disposed of or sold.Dissolution; Winding UpUnder Delaware corporate law, unless the board of directors approves the proposal to dissolve, dissolution must be approved by shareholders holding100% of the total voting power of the corporation. Only if the dissolution is initiated by the board of directors may it be approved by a simple majority of thecorporation’s outstanding shares. Delaware corporate law allows a Delaware corporation to include in its certificate of incorporation a supermajority votingrequirement in connection with dissolutions initiated by the board. As permitted by British Virgin Islands law and our memorandum of association and articles ofassociation, we may be voluntarily liquidated under Part XII of the BVI Act by resolution of directors and resolution of shareholders if we have no liabilities and weare able to pay our debts as they fall due.Redemption of SharesUnder Delaware corporate law, any stock may be made subject to redemption by the corporation at its option or at the option of the holders of such stockprovided there remains outstanding shares with full voting power. Such stock may be made redeemable for cash, property or rights, as specified in the certificate ofincorporation or in the resolution of the board of directors providing for the issue of such stock. As permitted by British Virgin Islands law, and our memorandum ofassociation and articles of association, shares may be repurchased, redeemed or otherwise acquired by us. Our directors must determine that immediately followingthe redemption or repurchase we will be able to satisfy our debts as they fall due and the value of our assets exceeds our liabilities.51Variation of Rights of SharesUnder Delaware corporate law, a corporation may vary the rights of a class of shares with the approval of a majority of the outstanding shares of suchclass, unless the certificate of incorporation provides otherwise. As permitted by British Virgin Islands law, and our memorandum of association and articles ofassociation, if our share capital is divided into more than one class of shares, we may vary the rights attached to any class only with the consent in writing ofholders of not less than threefourths of the issued shares of that class and holders of not less than threefourths of the issued shares of any other class of shareswhich may be affected by the variation.Removal of DirectorsUnder Delaware corporate law, a director of a corporation with a classified board may be removed only for cause with the approval of a majority of theoutstanding shares entitled to vote, unless the certificate provides otherwise. As permitted by British Virgin Islands law and our memorandum of association andarticles of association, directors may be removed by resolution of directors or resolution of shareholders.MergersUnder the BVI Act, two or more companies may merge or consolidate in accordance with the statutory provisions. A merger means the merging of two ormore constituent companies into one of the constituent companies, and a consolidation means the uniting of two or more constituent companies into a newcompany. In order to merger or consolidate, the directors of each constituent company must approve a written plan of merger or consolidation which must beauthorized by a resolution of shareholders.Shareholders not otherwise entitled to vote on the merger or consolidation may still acquire the right to vote if the plan of merger or consolidation containsany provision which, if proposed as an amendment to the memorandum association or articles of association, would entitle them to vote as a class or series on theproposed amendment. In any event, all shareholders must be given a copy of the plan of merger or consolidation irrespective of whether they are entitled to vote atthe meeting or consent to the written resolution to approve the plan of merger or consolidation.Inspection of Books and RecordsUnder Delaware corporate law, any shareholder of a corporation may for any proper purpose inspect or make copies of the corporation’s stock ledger, list ofshareholders and other books and records. Holders of our shares have no general right under British Virgin Islands law to inspect or obtain copies of our list ofshareholders or our corporate records. However, we will provide holders of our shares with annual audited financial statements. See “Where You Can FindAdditional Information.”Conflict of InterestThe BVI Act provides that a director shall, after becoming aware that he is interested in a transaction entered into or to be entered into by the company,disclose that interest to the board of directors of the company. The failure of a director to disclose that interest does not affect the validity of a transaction enteredinto by the director or the company, so long as the director’s interest was disclosed to the board prior to the company’s entry into the transaction or was notrequired to be disclosed (for example where the transaction is between the company and the director himself or is otherwise in the ordinary course of business andon usual terms and conditions). As permitted by British Virgin Islands law and our memorandum of association and articles of association, a director interested in aparticular transaction may vote on it, attend meetings at which it is considered, and sign documents on our behalf which relate to the transaction.52Transactions with Interested ShareholdersDelaware corporate law contains a business combination statute applicable to Delaware public corporations whereby, unless the corporation hasspecifically elected not to be governed by such statute by amendment to its certificate of incorporation, it is prohibited from engaging in certain businesscombinations with an “interested shareholder” for three years following the date that such person becomes an interested shareholder. An interested shareholdergenerally is a person or group who or that owns or owned 15% or more of the target’s outstanding voting stock within the past three years. This has the effect oflimiting the ability of a potential acquirer to make a twotiered bid for the target in which all shareholders would not be treated equally. The statute does not apply if,among other things, prior to the date on which such shareholder becomes an interested shareholder, the board of directors approves either the businesscombination or the transaction that resulted in the person becoming an interested shareholder. This encourages any potential acquirer of a Delaware publiccorporation to negotiate the terms of any acquisition transaction with the target’s board of directors.British Virgin Islands law has no comparable provision. As a result, we cannot avail ourselves of the types of protections afforded by the Delawarebusiness combination statute. However, although British Virgin Islands law does not regulate transactions between a company and its significant shareholders, itdoes provide that such transactions must be entered into bona fide in the best interests of the company and not with the effect of constituting a fraud on theminority shareholders.Independent DirectorsThere are no provisions under Delaware corporate law or under the BVI Act that require a majority of our directors to be independent.Cumulative VotingUnder Delaware corporate law, cumulative voting for elections of directors is not permitted unless the company’s certificate of incorporation specificallyprovides for it. Cumulative voting potentially facilitates the representation of minority shareholders on a board of directors since it permits the minority shareholderto cast all the votes to which the shareholder is entitled on a single director, which increases the shareholder’s voting power with respect to electing such director.There are no prohibitions to cumulative voting under the laws of the British Virgin Islands, but our memorandum of association and articles of association do notprovide for cumulative votingAntitakeover Provisions in Our Memorandum of association and articles of associationSome provisions of our memorandum of association and articles of association may discourage, delay or prevent a change in control of our company ormanagement that shareholders may consider favorable, including provisions that authorize our board of directors to issue preference shares in one or more seriesand to designate the price, rights, preferences, privileges and restrictions of such preference shares.C. MATERIAL CONTRACTS.On January 25, 2018, the Company executed an Asset Exchange Agreement (“AEA”) with C Media Limited, a corporation organized under the laws of theCayman Islands (“C Media”), whereby the Company agreed to purchase all the capital stock and equity interests of LK Technology Ltd, together with its whollyowned subsidiaries MMB Limited and Mobile Media (China) Limited and all respective subsidiaries from C Media in exchange for (i) 185,412,599 ordinary shares ofthe Company, par value $0.01 per share (“Ordinary Shares”), (ii) 1,000,000 preferred shares of Kingtone (“Preferred Shares”) and (iii) all issued and outstandingcapital stock or equity interests of the Company’s subsidiary, Topsky InfoTech Holdings Pte Ltd., and its whollyowned subsidiary Xi’an Softech Co., Ltd.,including all entities effectively controlled by Xi’an Softech Co., Ltd. through contractual arrangements and variable business entities.To consummate the contemplated transactions described above, the Company obtained shareholder consent at a special meeting held on May 20, 2018, (i)to authorize 1,000,000 Preferred Shares, (ii) to authorize additional Ordinary Shares so that total authorized Ordinary Shares is equal to 250,000,000 shares, (iii) to listsuch Ordinary Shares on NASDAQ, and (iv) to approve the transactions contemplated in the Asset Exchange Agreement. Additionally, NASDAQ needed toapprove the contemplated transactions prior to consummation thereof. C Media had the right to terminate the AEA if the closing had not occurred (other thanthrough the failure of C Media to comply fully with its obligations under the AEA) on or before July 31, 2018. The transactions contemplated by the AEA wereconsummated on August 17, 2018.53On January 25, 2018, five shareholders of the Company including its largest shareholder and its Chief Executive Officer executed a Securities PurchaseAgreement, whereby such shareholders agreed to sell a total of 617,988 Ordinary Shares and 282,694 American Depository Shares of the Company to Redstone YYLManagement Limited, a company incorporated in the British Virgin Islands, in exchange for an aggregate purchase price of $1,897,860.09.On August 25, 2018, LK Technology entered into a Stock Purchase Agreement (the “Agreement”) with the shareholders (“Shareholders”) of SuperengineHoldings Limited, a limited liability company organized under the laws of the British Virgin Islands (the “Superengine”), pursuant to which LK Technology acquiredall of the issued and outstanding capital stock of Superengine for an aggregate purchase price of US$60 million (the “Purchase Price”), which are paid by theissuance of our Ordinary Shares in an amount equal to the quotient of (x) the Purchase Price divided by (y) the average of the closing prices of the Ordinary Shareson the NASDAQ Capital Market over the 12 months period preceding July 31, 2018. We are a party to the Agreement in connection with the issuance of theOrdinary Shares and certain other limited purposes.D. EXCHANGE CONTROLS.This section sets forth a summary of the most significant regulations or requirements that affect our business activities in China or our shareholders’ rightto receive dividends and other distributions from us.Regulations on Internet Content ProvidersThe Administrative Measures on Internet Information Services, or the Internet Content Measures, which was promulgated by the State Council onSeptember 25, 2000 and amended on January 8, 2011, set out guidelines on the provision of internet information services. The Internet Content Measures specifiesthat internet information services regarding news, publications, education, medical and health care, pharmacy and medical appliances, among other things, arerequired to be examined, approved and regulated by the relevant authorities. Internet information providers are prohibited from providing services beyond thoseincluded in the scope of their licenses or filings. Furthermore, the Internet Content Measures specifies a list of prohibited content. Internet information providers areprohibited from producing, copying, publishing or distributing information that is humiliating or defamatory to others or that infringes the legal rights of others.Internet information providers that violate such prohibition may face criminal charges or administrative sanctions. Internet information providers must monitor andcontrol the information posted on their websites. If any prohibited content is found, they must remove the content immediately, keep a record of such content andreport to the relevant authorities.The Internet Content Measures classifies internet information services into commercial internet information services and noncommercial internetinformation services. Commercial internet information services refer to services that provide information or services to internet users with charge. A provider ofcommercial internet information services must obtain an ICP License.Regulations on Internet Audiovideo Program ServicesOn December 20, 2007, the MII and the State Administration of Press, Publication, Radio, Film and Television, or the SAPPRFT, jointly issued theAdministrative Provisions for the Internet AudioVideo Program Service, or the Audiovideo Program Provisions, which came into effect on January 31, 2008 andwas amended on August 28, 2015. The Audiovideo Program Provisions defines “internet audiovideo program services” as producing, editing and integrating ofaudiovideo programs, supplying audiovideo programs to the public via the internet, and providing audiovideo programs uploading and transmission services to athird party. Entities providing internet audiovideo programs services must obtain an internet audiovideo program transmission license. Applicants for such licensesshall be stateowned or statecontrolled entities unless an internet audiovideo program transmission license has been obtained prior to the effectiveness of theAudiovideo Program Provisions in accordance with the thenineffect laws and regulations. In addition, foreigninvested enterprises are not allowed to engage inthe abovementioned services. According to the Audiovideo Program Provisions and other relevant laws and regulations, audiovideo programs provided by theentities supplying Internet audiovideo program services shall not contain any illegal content or other content prohibited by the laws and regulations, such as anycontent against the basic principles in the PRC Constitution, any content that damages the sovereignty of the country or national security, and any content thatdisturbs social order or undermine social stability. An audiovideo program that has already been broadcast shall be retained in full for at least 60 days. Movies,television programs and other media content used as Internet audiovideo programs shall comply with relevant administrative regulations on programs broadcaststhrough radio, movie and television channels. Entities providing services related to Internet audiovideo programs shall immediately delete the audiovideoprograms violating laws and regulations, keep relevant records, report relevant authorities and implement other regulatory requirements.54The Categories of the Internet AudioVideo Program Services, or the Audiovideo Program Categories, promulgated by SAPPRFT on March 10, 2017,classifies internet audio/video programs into four categories: (I) Category I internet audio/video program service, which is carried out with a form of radio station ortelevision station; (II) Category II internet audio/video program service, including (a) rebroadcasting service of current political news audio/video programs; (b)hosting, interviewing, reporting and commenting service of arts, entertainment, technology, finance and economics, sports, education and other specializedaudio/video programs; (c) producing (interviewing not included) and broadcasting service of arts, entertainment, technology, finance and economics, sports,education and other specialized audio/video programs; (d) producing and broadcasting service of internet films/dramas; (e) aggregating and broadcasting service offilms, television dramas and cartoons; (f) aggregating and broadcasting service of arts, entertainment, technology, finance and economics, sports, education andother specialized audio/video programs; and (g) live audio/video broadcasting service of cultural activities of common social organizations, sport events or otherorganization activities; and (III) Category III internet audio/video program service, including (a) aggregating service of online audio/video contents, and (b) rebroadcasting service of the audio/video programs uploaded by internet users; and (IV) Category III internet audio/video program service, including (a) rebroadcasting of the radio/television program channels; and (b) rebroadcasting of internet audio/video program channels.On May 27, 2016, the SAPPRFT issued the Notice on Relevant Issues concerning Implementing the Approval Works of Upgrading Mobile Internet AudioVideo Program Service, or the Mobile AudioVideo Program Notice. The Mobile AudioVideo Program Notice provides that the mobile Internet audiovideo programservices shall be deemed Internet audiovideo program service. Entities which have obtained the approvals to provide the Internet audiovideo program servicesmay use mobile WAP websites or mobile applications to provide audiovideo program services. Entities with regulatory approvals may operate mobile applicationsto provide the audiovideo program services The types of the programs shall be within the permitted scope as provided in the licenses and such mobile applicationsshall be filed with the SAPPRFT.Regulations on Production and Operation of Radio/Television ProgramsOn July 19, 2004, the SAPPRFT promulgated the Administrative Measures on the Production and Operation of Radio and Television Programs, or the Radioand Television Program Production Measures, which came into effect on August 20, 2004 and was amended on August 28, 2015. The Radio and Television ProgramProduction Measures provides that any business that produces or operates radio or television programs must first obtain a Radio and Television ProgramProduction and Operation Permit. Entities holding such permits shall conduct their business within the permitted scope as provided in their permits. In addition,foreigninvested enterprises are not allowed to engage in the abovementioned services.Regulations on Online Advertising ServicesOn April 24, 2015, the Standing Committee of the National People’s Congress enacted the Advertising Law of the People’s Republic of China, or the NewAdvertising Law, effective on September 1, 2015. The New Advertising Law increases the potential legal liability of advertising services providers and strengthensregulations of false advertising. On July 4, 2016, the State Administration for Industry and Commerce, or the SAIC, issued the Interim Measures of theAdministration of Online Advertising, or the SAIC Interim Measures, effective on September 1, 2016. The New Advertising Law and the SAIC Interim Measuresrequire that online advertisements may not affect users’ normal internet use and internet popup ads must display a “close” sign prominently and ensure onekeyclosing of the popup windows. The SAIC Interim Measures provides that all online advertisements must be marked “Advertisement” so that viewers can easilyidentify them as such. Moreover, the SAIC Interim Measures treats paid search results as advertisements that are subject to PRC advertisement laws, and requiresthat paid search results be conspicuously identified on search result pages as advertisements. The New Advertising Law and SAIC Interim Measures require us toconduct more stringent examination and monitoring of our advertisers and the content of their advertisements.55Regulations on Online GamesIn September 2009, the GAPP (currently known as the SAPPRFT), together with the National Copyright Administration, and the National Office ofCombating Pornography and Illegal Publications jointly issued the Notice on Further Strengthening on the Administration of Preexamination and Approval ofOnline Game and the Examination and Approval of Imported Online Game, or the Circular 13. The Circular 13 states that foreign investors are not permitted to investin online game operating businesses in the PRC via wholly foreignowned entities, Sinoforeign equity joint ventures or cooperative joint ventures or to exercisecontrol over or participate in the operation of domestic online game businesses through indirect means, such as other joint venture companies or contractual ortechnical arrangements. If the our contractual arrangements were deemed under the Circular 13 to be an “indirect means” for foreign investors to exercise controlover or participate in the operation of a domestic online game business, our contractual arrangements might be challenged by the SAPPRFT. We are not aware ofany online game companies which use the same or similar contractual arrangements having been challenged by the SAPPRFT as using those contractualarrangements as an “indirect means” for foreign investors to exercise control over or participate in the operation of a domestic online game business or having beenpenalized or ordered to terminate operations since the Circular 13 became effective. However it is unclear whether and how the Circular 13 might be interpreted orimplemented in the future. See “Risk Factors—If the PRC government finds that the agreements that establish the structure for operating certain of our operations inChina do not comply with PRC regulations relating to the relevant industries, or if these regulations or the interpretation of existing regulations change in the future,we could be subject to severe penalties or be forced to relinquish our interests in those operations.”The Interim Measures for the Administration of Online Games, or the Online Game Measures, issued by the MOC, which took effect on August 1, 2010 andamended on December 15, 2017, regulates a broad range of activities related to the online games business, including the development, production and operation ofonline games, the issuance of virtual currencies used for online games, and the provision of virtual currency trading services. The Online Game Measures providesthat any entity that is engaged in online game operations must obtain an Network Cultural Business Permit, and require the content of an imported online game to beexamined and approved by the MOC prior to the game’s launch and require a domestic online game to be filed with the MOC within 30 days after its launch. TheNotice of the Ministry of Culture on the Implementation of the Interim Measures for the Administration of Online Games, which was issued by the MOC on July 29,2010 to implement the Online Game Measures, (i) requires online game operators to protect the interests of online game users and specifies that certain terms thatmust be included in service agreements between online game operators and the users of their online games, (ii) requires content review of imported online gamesand filing procedures for domestic online games, (iii) emphasizes the protection of minors playing online games, and (iv) requests online game operators to promoterealname registration by their game users.Regulations on Information Security, Censorship and PrivacyThe Standing Committee of the National People’s Congress, China’s national legislative body, enacted the Decisions on the Maintenance of InternetSecurity on December 28, 2000 that may subject persons to criminal liabilities in China for any attempt to use the internet to: (i) gain improper entry to a computer orsystem of strategic importance; (ii) disseminate politically disruptive information; (iii) leak state secrets; (iv) spread false commercial information or (v) infringe uponintellectual property rights. In 1997, the Ministry of Public Security issued the Administration Measures on the Security Protection of Computer InformationNetwork with International Connections which prohibits using the internet to leak state secrets or to spread socially destabilizing materials. If an ICP license holderviolates these measures, the PRC government may revoke its ICP license and shut down its websites. Pursuant to the Ninth Amendment to the Criminal Law issuedby the Standing Committee of the National People’s Congress on August 29, 2015, effective on November 1, 2015, any ICP provider that fails to fulfill the obligationsrelated to internet information security as required by applicable laws and refuses to take corrective measures, will be subject to criminal liability for (i) any largescale dissemination of illegal information; (ii) any severe effect due to the leakage of users’ personal information; (iii) any serious loss of evidence of criminalactivities; or (iv) other severe situations, and any individual or entity that (i) sells or provides personal information to others unlawfully or (ii) steals or illegallyobtains any personal information will be subject to criminal liability in severe situations.56The Cybersecurity Law of the PRC, or the Cybersecurity Law, which was promulgated on November 7, 2016 by the Standing Committee of the NationalPeople’s Congress and came into effect on June 1, 2017, provides that network operators shall meet their cyber security obligations and shall take technicalmeasures and other necessary measures to protect the safety and stability of their networks. Under the Cybersecurity Law, network operators are subject to varioussecurity protectionrelated obligations, including: (i) network operators shall comply with certain obligations regarding maintenance of the security of internetsystems; (ii) network operators shall verify users’ identities before signing agreements or providing certain services such as information publishing or realtimecommunication services; (iii) when collecting or using personal information, network operators shall clearly indicate the purposes, methods and scope of theinformation collection, the use of information collection, and obtain the consent of those from whom the information is collected; (iv) network operators shall strictlypreserve the privacy of user information they collect, and establish and maintain systems to protect user privacy; (v) network operators shall strengthenmanagement of information published by users, and when they discover information prohibited by laws and regulations from publication or dissemination, theyshall immediately stop dissemination of that information, including taking measures such as deleting the information, preventing the information from spreading,saving relevant records, and reporting to the relevant governmental agencies.Regulations on Intellectual Property RightsRegulations on CopyrightThe Copyright Law of the PRC, or the Copyright Law, which took effect on June 1, 1991 and was amended in 2001 and in 2010, provides that Chinesecitizens, legal persons, or other organizations shall, whether published or not, own copyright in their copyrightable works, which include, among others, works ofliterature, art, natural science, social science, engineering technology and computer software. Copyright owners enjoy certain legal rights, including right ofpublication, right of authorship and right of reproduction. The Copyright Law as revised in 2010 extends copyright protection to Internet activities, productsdisseminated over the Internet and software products. In addition, Copyright Law provides for a voluntary registration system administered by the China CopyrightProtection Center, or the CPCC. According to the Copyright Law, an infringer of the copyrights shall be subject to various civil liabilities, which include ceasinginfringement activities, apologizing to the copyright owners and compensating the loss of copyright owner. Infringers of copyright may also subject to fines and/oradministrative or criminal liabilities in severe situations.The Computer Software Copyright Registration Measures, or the Software Copyright Measures, promulgated by the State Council on December 20, 2001and amended on January 30, 2013, regulates registrations of software copyright, exclusive licensing contracts for software copyright and assignment agreements.The National Copyright Administration, or the NCA administers software copyright registration and the CPCC, is designated as the software registration authority.The CPCC shall grant registration certificates to the Computer Software Copyrights applicants which meet the requirements of both the Software CopyrightMeasures and the Computer Software Protection Regulations (Revised in 2013).The Provisions of the Supreme People’s Court on Certain Issues Related to the Application of Law in the Trial of Civil Cases Involving Disputes onInfringement of the Information Network Dissemination Rights specifies that disseminating works, performances or audiovideo products by the internet users orthe internet service providers via the internet without the permission of the copyright owners shall be deemed to have infringed the right of dissemination of thecopyright owner.57The Measures for Administrative Protection of Copyright Related to Internet, which was jointly promulgated by the NCA and the MIIT on April 29, 2005and became effective on May 30, 2005, provides that upon receipt of an infringement notice from a legitimate copyright holder, an ICP operator must take remedialactions immediately by removing or disabling access to the infringing content. If an ICP operator knowingly transmits infringing content or fails to take remedialactions after receipt of a notice of infringement that harms public interest, the ICP operator could be subject to administrative penalties, including an order to ceaseinfringing activities, confiscation by the authorities of all income derived from the infringement activities, or payment of fines.On May 18, 2006, the State Council promulgated the Regulations on the Protection of the Right to Network Dissemination of Information (as amended in2013). Under these regulations, an owner of the network dissemination rights with respect to written works or audio or video recordings who believes thatinformation storage, search or link services provided by an Internet service provider infringe his or her rights may require that the Internet service provider delete, ordisconnect the links to, such works or recordings.Patent LawsAccording to the Patent Law of the PRC (Revised in 2008), the State Intellectual Property Office is responsible for administering patent law in the PRC. Thepatent administration departments of provincial, autonomous region or municipal governments are responsible for administering patent law within their respectivejurisdictions. The Chinese patent system adopts a firsttofile principle, which means that when more than one person file different patent applications for the sameinvention, only the person who files the application first is entitled to obtain a patent of the invention. To be patentable, an invention or a utility model must meetthree criteria: novelty, inventiveness and practicability. A patent is valid for twenty years in the case of an invention and ten years in the case of utility models anddesigns.Trademark LawsTrademarks are protected by the Trademark Law of the PRC (Revised in 2013) which was adopted in 1982 and subsequently amended in 1993, 2001 and 2013respectively as well as by the Implementation Regulations of the PRC Trademark Law adopted by the State Council in 2002 and as most recently amended on April29, 2014. The Trademark Office under the SAIC handles trademark registrations. The Trademark Office grants a tenyear term to registered trademarks and the termmay be renewed for another tenyear period upon request by the trademark owner. A trademark registrant may license its registered trademarks to another party byentering into trademark license agreements, which must be filed with the Trademark Office for its record. As with patents, the Trademark Law has adopted a firsttofile principle with respect to trademark registration. If a trademark applied for is identical or similar to another trademark which has already been registered or subjectto a preliminary examination and approval for use on the same or similar kinds of products or services, such trademark application may be rejected. Any personapplying for the registration of a trademark may not injure existing trademark rights first obtained by others, nor may any person register in advance a trademark thathas already been used by another party and has already gained a “sufficient degree of reputation” through such party’s use.Regulations on Domain NamesThe MIIT promulgated the Measures on Administration of Internet Domain Names, or the Domain Name Measures, on August 24, 2017, which took effecton November 1, 2017 and replaced the Administrative Measures on China Internet Domain Name promulgated by MII on November 5, 2004. According to theDomain Name Measures, the MIIT is in charge of the administration of PRC internet domain names. The domain name registration follows a firsttofile principle.Applicants for registration of domain names shall provide the true, accurate and complete information of their identities to domain name registration serviceinstitutions. The applicants will become the holder of such domain names upon the completion of the registration procedure.Relevant Regulations of the Hightech EnterpriseThe Ministry of Information Industry, the Ministry of Science and Technology and the State Tax Bureau collectively promulgated and issued the“Certifying Standard and Managing Measures for Hightech Enterprises” and “the Hightech Areas of Main National Support” on April 14, 2008 to certify the Hightech enterprise and encourage and support the development of the Chinese Hightech enterprises. Under the Hightech Enterprises Measures, the enterprise canenjoy the favorable tax policy when it is certified as a Hightech enterprise by the Ministry of Information Industry, the Ministry of Science and Technology and theState Tax Bureau or with its provincial branch according to the stipulated standard. The software and computer and network technology are recognized as the mainnational supported Hightech field. Kingtone Information is a Hightech enterprise and enjoys a favorable income tax rate of 15%.58Laws and Regulations of Intellectual Property RightsChina has adopted legislation governing intellectual property rights, including patents, copyrights and trademarks. China is a signatory to the maininternational conventions on intellectual property rights and became a member of the Agreement on Trade Related Aspects of Intellectual Property Rights upon itsaccession to the WTO in December 2001.PatentsThe “Patent Law of the People’s Republic of China” promulgated by the Standing Committee of the National People's Congress, adopted in 1985 andrevised in 1992, 2001 and 2008, protects registered patents. The State Intellectual Property Office of PRC handles granting patent rights, providing for a twentyyearpatent term for inventions and a tenyear patent term for utility models and designs. As we disclosed in Item 4, of this transition report on Form 20F, throughKingtone Information, we have been granted one invention patent “wireless video transmission system based on BREW platform” by the State Intellectual PropertyOffice (“SIPO”) of PRC on September 23, 2009 and therefore such invention is entitled to all the protections provided under the Patent Law for twenty years.Computer Software Copyright and AdministrationOn December 20, 2001, the State Council of PRC issued the “Regulation for Computer Software Protection of the People’s Republic of China” (the“Regulation for Computer Software Protection”) which became effective on January 1, 2002 to protect the interests of copyright owners, to promote the research andapplication and to encourage the development of the Chinese software industry. Under the Regulation for Computer Software Protection, natural persons, legalpersons or any other organizations shall have a copyright on the software developed by such persons no matter whether such software has been published. Theprotection period of software copyrights owned by the legal person or other organization is fifty years and expires on December 31 of the fiftieth year from the initialpublication date of such computer software. Currently, Kingtone Information has twelve registration certificates for software copyrights.TrademarksThe “Trademark Law of the People’s Republic of China” promulgated by the State Council of PRC, adopted in 1982 and revised in 1993 and 2001, protectsregistered trademarks. The Trademark Office under the Chinese State Administration for Industry and Commerce handles trademark registrations and grants a termof ten years to registered trademarks which are renewable for another ten years after the application to the Trademark Office by the owners of the trademarks.Trademark license agreements must be filed with the Trademark Office for record. China has a “firsttoregister” system that requires no evidence of prior use orownership. Kingtone Information has its registered trademarks as described in Item 4 of this transition report on Form 20F. Accordingly, such trademarks areentitled to the protection under the Trademark Law.Foreign Currency ExchangeOn August 29, 2008, the SAFE issued the Notice of the General Affairs Department of the State Administration of Foreign Exchange on the RelevantOperating Issues concerning the Improvement of the Administration of Payment and Settlement of Foreign Currency Capital of Foreignfunded Enterprises, orCircular 142. Pursuant to Circular 142, RMB converted from the foreign currencydenominated capital of a foreigninvested company may only be used for purposeswithin the business scope approved by the applicable governmental authority and may not be used for equity investments within the PRC unless specificallyprovided for otherwise. The use of such Renminbi capital may not be changed without SAFE’s approval and may not in any case be used to repay Renminbi loans ifthe proceeds of such loans have not been used.59See “Risk Factors — Risks Related to Doing Business in China — PRC regulation of loans and direct investment by offshore holding companies to PRCentities may delay or prevent us from using the proceeds of our initial public offering to make loans or additional capital contributions to our PRC operatingsubsidiaries, which could materially and adversely affect our liquidity and our ability to fund and expand our business”.Dividend DistributionWe are a British Virgin Islands holding company and substantially all of our operations are conducted through LK Technology. We rely on dividends andother distributions from our LK Technology and its subsidiaries to provide us with our cash flow and allow us to pay dividends on the shares underlying our ADSsand meet our other obligations. The principal regulations governing distribution of dividends paid by wholly foreignowned enterprises include:1.Wholly ForeignOwned Enterprise Law (1986), as amended; and2.Implementation Rules on Wholly ForeignOwned Enterprise Law (1990), as amended.Under these regulations, wholly foreignowned enterprises in China may pay dividends only out of their accumulated profits, if any, determined inaccordance with PRC accounting standards and regulations. In addition, wholly foreignowned enterprises in China are required to set aside at least 10% of theiraftertax profit based on PRC accounting standards each year to its general reserves until the accumulative amount of such reserves reach 50% of its registeredcapital. These reserves are not distributable as cash dividends. The board of directors of a FIE has the discretion to allocate a portion of its aftertax profits to staffwelfare and bonus funds, which may not be distributed to equity owners except in the event of liquidation.Regulation of Foreign Exchange in Certain Onshore and Offshore TransactionsIn October 2005, the SAFE issued the Notice on Issues Relating to the Administration of Foreign Exchange in Fundraising and Return InvestmentActivities of Domestic Residents Conducted via Offshore Special Purpose Companies, or SAFE Notice 75, which became effective as of November 1, 2005, and wasfurther supplemented by two implementation notices issued by the SAFE on November 24, 2005 and May 29, 2007, respectively. Under Circular 75, prior registrationwith the local SAFE branch is required for PRC residents to establish or to control an offshore company for the purposes of financing that offshore company withassets or equity interests in an onshore enterprise located in the PRC. An amendment to the registration or filing with the local SAFE branch by such PRC resident isalso required for the injection of equity interests or assets of an onshore enterprise in the offshore company or overseas funds raised by such offshore company, orany other material change with respect to the offshore company in connection with any increase or decrease of capital, transfer of shares, merger, division, equityinvestment, debt investment, or creation of any security interest over any assets located in the PRC.Under SAFE Notice 75, PRC residents are further required to repatriate into the PRC all of their dividends, profits or capital gains obtained from theirshareholdings in the offshore entity within 180 days of their receipt of such dividends, profits or capital gains. The registration and filing procedures under SAFENotice 75 are prerequisites for other approval and registration procedures necessary for capital inflow from the offshore entity, such as inbound investments orshareholders loans, or capital outflow to the offshore entity, such as the payment of profits or dividends, liquidating distributions, equity sale proceeds, or thereturn of funds upon a capital reduction. Therefore, failure to comply with such registration may subject us to certain restrictions on, including but not limited to, theincrease of the registered capital of our PRC subsidiary, making loans to our PRC subsidiary, and making distributions to us from our onshore companies.Regulations of Overseas Investments and ListingsOn August 8, 2006, six PRC regulatory agencies, including the MOFCOM, the State Assets Supervision and Administration Commission, the StateAdministration for Taxation, the State Administration for Industry and Commerce, the CSRC and the SAFE, jointly adopted the New M&A Rule, which becameeffective on September 8, 2006. This regulation, among other things, includes provisions that purport to require that an offshore SPV formed for purposes ofoverseas listing of equity interests in PRC companies and controlled directly or indirectly by PRC companies or individuals obtain the approval of the CSRC prior tothe listing and trading of such SPV’s securities on an overseas stock exchange.60On September 21, 2006, the CSRC published on its official website procedures regarding its approval of overseas listings by SPVs. The CSRC approvalprocedures require the filing of a number of documents with the CSRC and it would take several months to complete the approval process.The application of the New M&A Rule with respect to overseas listings of SPVs remains unclear with no consensus currently existing among the leadingPRC law firms regarding the scope of the applicability of the CSRC approval requirement.We believe that, based on our understanding of the current PRC laws, regulations and rules and the procedures announced on September 21, 2006, there isno requirement in this regulation that would require an application to be submitted to the MOFCOM or the CSRC for the approval of the listing and trading of ourADSs on the NASDAQ Capital Market.See “Risk Factors — Risks Related to Doing Business in China — If we were required to obtain the prior approval of the China Securities RegulatoryCommission, or CSRC, of the listing and trading of our ADSs on the NASDAQ Capital Market, we may face regulatory actions or other sanctions from the CSRC orother PRC regulatory agencies.”E. TAXATIONThe following discussion sets forth the material British Virgin Islands, PRC and U.S. federal income tax consequences of an investment in our ADSs andthe ordinary shares represented by our ADSs, sometimes referred to collectively as the “securities”. It is based upon laws and relevant interpretations thereof ineffect as of the date of this report, all of which are subject to change. This discussion does not deal with all possible tax consequences relating to an investment inthe securities, such as the tax consequences under state, local and other tax laws. As used in this discussion, “we,” “our” and “us” refers only to LuokungTechnology Ltd.British Virgin Islands TaxationUnder the law of the British Virgin Islands as currently in effect, a holder of the securities who is not a resident of the British Virgin Islands is not liable forBritish Virgin Islands tax on dividends paid with respect to the securities and all holders of the securities are not liable to the British Virgin Islands for tax on gainsrealized during that year on the sale or disposal of such ordinary shares. The British Virgin Islands does not impose a withholding tax on dividends paid by acompany incorporated or reregistered under the BVI Act.There are no capital gains, gift or inheritance taxes levied by the British Virgin Islands on companies incorporated under the BVI Act. In addition, shares ofcompanies incorporated under the BVI Act are not subject to transfer taxes, stamp duties or similar charges.There is no income tax treaty or convention currently in effect between the United States and the British Virgin Islands or between China and the BritishVirgin Islands.61People’s Republic of China TaxationIn 2007, the PRC National People’s Congress enacted the new Enterprise Income Tax Law (the “EIT Law”), which became effective on January 1, 2008. Thenew EIT Law imposes a single uniform income tax rate of 25% on all Chinese enterprises, including foreigninvested enterprises, and levies a withholding tax rate of10% on dividends payable by Chinese subsidiaries to their foreign shareholders unless any such foreign shareholders’ jurisdiction of incorporation has a tax treatywith China that provides for a different withholding agreement. Under the new EIT Law, enterprises established outside China but deemed to have a “de factomanagement body” within the country may be considered “resident enterprises” for Chinese tax purposes and, therefore, may be subject to an enterprise income taxrate of 25% on their worldwide income. Pursuant to the implementation rules of the new EIT Law, a “de facto management body” is defined as a body that hasmaterial and overall management control over the business, personnel, accounts and properties of the enterprise. Although substantially all members of ourmanagement are located in China, it is unclear whether Chinese tax authorities would require (or permit) us to be treated as PRC resident enterprises. If we aredeemed a Chinese tax resident enterprise, we may be subject to an enterprise income tax rate of 25% on our worldwide income, excluding dividends received directlyfrom another Chinese tax resident enterprise, as well as PRC enterprise income tax reporting obligations. If we are not deemed to be a Chinese tax resident enterprise,we may be subject to certain PRC withholding taxes. See “Risk Factors — Risks Related to Doing Business in China — Our holding company structure may limit thepayment of dividends.” As a result of such changes, our historical tax rates may not be indicative of our tax rates for future periods and the value of our ADSs orordinary shares may be adversely affected. If we are deemed a PRC resident enterprise and investors’ gain from the sales of the securities and dividends payable byus are deemed sourced from China, such gains and dividends payable by us may be subject to PRC tax. See “Risk Factors — Risks Related to Doing Business inChina — If we were deemed a “resident enterprise” by PRC tax authorities, we could be subject to tax on our global income at the rate of 25% under the New EITLaw and our nonPRC shareholders could be subject to certain PRC taxes.United States Federal Income TaxationGeneralThe following is a discussion of the material U.S. federal income tax consequences to an investor of purchasing, owning and disposing of our securities.This discussion does not address any aspects of U.S. federal gift or estate tax or the state, local or nonU.S. tax consequences of an investment in the securities.YOU SHOULD CONSULT YOUR OWN TAX ADVISORS CONCERNING THE U.S. FEDERAL, STATE, LOCAL AND NONU.S. TAX CONSEQUENCES OFPURCHASING, OWNING AND DISPOSING OF THE SECURITIES IN YOUR PARTICULAR SITUATION.This discussion applies only to those investors that purchase the securities in this offering and that hold the securities as capital assets within the meaningof section 1221 of the Internal Revenue Code of 1986, as amended (the “Code”). This section does not apply to holders that may be subject to special tax rules,including but not limited to:1.dealers in securities or currencies;2.traders in securities that elect to use a marktomarket method of accounting;3.banks, insurance companies or certain financial institutions;4.taxexempt organizations;5.governments or agencies or instrumentalities thereof;6.partnerships or other entities treated as partnerships or other passthrough entities for U.S. federal income tax purposes or persons holding thesecurities through such entities;7.regulated investment companies or real estate investment trusts;8.holders subject to the alternative minimum tax;9.holders that actually or constructively own 10% or more of the total combined voting power of all classes of our shares entitled to vote;10.holders that acquired the securities pursuant to the exercise of employee stock options, in connection with employee stock incentive plans orotherwise as compensation;11.holders that hold the securities as part of a straddle, hedging or conversion transaction; or12.holders whose functional currency is not the U.S. dollar.62This section is based on the Code, its legislative history, existing and proposed U.S. Treasury regulations, published rulings and other administrativeguidance of the U.S. Internal Revenue Service (the “IRS”) and court decisions, all as in effect on the date hereof. These laws are subject to change or differentinterpretation by the IRS or a court, possibly on a retroactive basis.We have not sought, and will not seek, a ruling from the IRS as to any U.S. federal income tax consequence described herein. The IRS may disagree withthe discussion herein, and its determination may be upheld by a court. Moreover, there can be no assurance that future legislation, regulation, administrative rulingsor court decisions will not adversely affect the accuracy of the statements in this discussion.The discussion below of the U.S. federal income tax consequences to “U.S. Holders” will apply to a beneficial owner of the securities that is for U.S. federalincome tax purposes:1.a citizen or resident of the United States;2.a corporation (or other entity treated as a corporation) that is created or organized (or treated as created or3.organized) under the laws of the United States, any state thereof or the District of Columbia;4.an estate whose income is subject to U.S. federal income tax regardless of its source; or5.a trust if (a) a U.S. court can exercise primary supervision over the trust’s administration and one or more U.S.6.persons are authorized to control all substantial decisions of the trust, or (b) if the trust has a valid election in effect under applicable U.S.Treasury regulations to be treated as a U.S. person.If a beneficial owner of the securities is not described as a U.S. Holder and is not an entity treated as a partnership or other passthrough entity for U.S.federal income tax purposes, such owner will be considered a “NonU.S. Holder.” The material U.S. federal income tax consequences applicable specifically to NonU.S. Holders are described below under the heading “Tax Consequences to NonU.S. Holders.”If a partnership (including for this purpose any entity treated as a partnership for U.S. tax purposes) is a beneficial owner of the securities, the U.S. taxtreatment of a partner in the partnership generally will depend on the status of the partner and the activities of the partnership. A holder of the securities that is apartnership or partners in such a partnership should consult their own tax advisors about the U.S. federal income tax consequences of holding and disposing of thesecurities.This discussion assumes that any distributions made (or deemed made) on the securities and any consideration received by a holder in consideration forthe sale or other disposition of the securities will be in U.S. dollars. This discussion also assumes that the representations contained in the Deposit Agreement aretrue and that the obligations in the Deposit Agreement and any related agreement will be complied with in accordance with their terms. Finally, this discussionassumes that each ADS will only represent ordinary shares in us, and will not represent any other type of security, such as a bond, cash or other property.63For U.S. federal income tax purposes, a holder of an ADS will be treated as the beneficial owner of the shares represented by such ADS and an exchange ofan ADS for ordinary shares will not be subject to U.S. federal income tax. The U.S. Treasury has expressed concerns that parties to whom ADSs are prereleased, orintermediaries in the chain of ownership between holders of ADSs and the issuer of the securities underlying the ADSs may be taking actions that are inconsistentwith the claiming of foreign tax credits by U.S. Holders of ADSs. Such actions would also be inconsistent with the claiming of the reduced rate of tax applicable todividends received by certain noncorporate U.S. Holders, including individual U.S. Holders, as described below under “Tax Consequences to U.S.Holders — Taxation of Distributions.” Accordingly, the availability of foreign tax credits or the reduced tax rate for dividends received by certain noncorporate U.S.Holders, including individual U.S. Holders, could be affected by actions taken by parties to whom the ADSs are released, or by future actions by the U.S. Treasury.Tax Consequences to U.S. HoldersTaxation of DistributionsSubject to the passive foreign investment company, or PFIC, rules discussed below, the gross amount of any cash distributions we make with respect to aU.S. Holder in respect of such U.S. Holder’s ADSs or shares will generally be treated as dividend income if the distributions are made from our current oraccumulated earnings and profits, calculated according to U.S. federal income tax principles. Cash dividends will generally be subject to U.S. federal income tax asordinary income on the day the U.S. Holder actually or constructively receives such income. With respect to noncorporate U.S. Holders for taxable years beginningbefore January 1, 2011, dividends may be taxed at the lower applicable longterm capital gains rate provided that (a) our ADSs or shares are readily tradable on anestablished securities market in the United States, or, in the event we are deemed to be a Chinese “resident enterprise” under the EIT Law (as described above under“People’s Republic of China Taxation”), we are eligible for the benefits of the income tax treaty between the United States and the PRC (the “U.S.PRC Tax Treaty”),(b) we are not a PFIC, as discussed below, for either the taxable year in which the dividend was paid or the preceding taxable year, and (c) certain holding periodrequirements are met. Under published IRS authority, ADSs are considered for purposes of clause (a) above to be readily tradable on an established securitiesmarket in the United States only if they are listed on certain exchanges, which presently include the NASDAQ Capital Market. U.S. Holders should consult their owntax advisors regarding the availability of the lower rate for any dividends paid with respect to our ADSs or shares.Dividends will not be eligible for the dividendsreceived deduction allowed to U.S. corporations in respect of dividends received from other U.S.corporations. Generally, if we distribute noncash property as a dividend (other than pro rata distributions of our shares) out of our current or accumulated earningsand profits (as determined for U.S. federal income tax purposes), a U.S. Holder generally will include in income an amount equal to the fair market value of theproperty, on the date that it is distributed.Distributions in excess of current and accumulated earnings and profits, as determined for U.S. federal income tax purposes, will be treated as a nontaxablereturn of capital to the extent of the U.S. Holder’s basis in its shares or ADSs and thereafter as capital gain. However, we do not plan on calculating our earnings andprofits in accordance with U.S. federal income tax principles. U.S. holders therefore should generally assume that any distributions paid by us will be treated asdividends for U.S. federal income tax purposes.If PRC taxes apply to dividends paid by us to a U.S. Holder (see “People’s Republic of China Taxation,” above), such taxes may be treated as foreign taxeseligible for credit against such holder’s U.S. federal income tax liability (subject to certain limitations), and a U.S. Holder may be entitled to certain benefits under theU.S.PRC Tax Treaty. The rules relating to the U.S. foreign tax credit are complex. U.S. Holders should consult their own tax advisors regarding the creditability ofany such PRC tax and their eligibility for the benefits of the U.S.PRC Tax Treaty.64Taxation of Dispositions of SharesSubject to the PFIC rules discussed below, a U.S. holder that sells or otherwise disposes of its shares will recognize capital gain or loss for U.S. federalincome tax purposes equal to the difference between the amount realized and such U.S. Holder’s tax basis in its shares. Prior to January 1, 2011, capital gains of anoncorporate U.S. holder are generally taxed at a maximum rate of 15% where the property is held for more than one year (and 20% thereafter). The ability to deductcapital losses is subject to limitations.If PRC taxes apply to any gain from the disposition of our shares by a U.S. Holder, such taxes may be treated as foreign taxes eligible for credit against suchholder’s U.S. federal income tax liability (subject to certain limitations), and a U.S. Holder may be entitled to certain benefits under the U.S.PRC Tax Treaty. U.S.Holders should consult their own tax advisors regarding the creditability of any such PRC tax and their eligibility for the benefits of the U.S.PRC Tax Treaty.Passive Foreign Investment CompanyWe do not expect to be a PFIC for U.S. federal income tax purposes for our current tax year or in the foreseeable future. The determination of whether or notwe are a PFIC in respect of any of our taxable years is a factual determination that cannot be made until the close of the applicable tax year and that is based on thetypes of income we earn and the value and composition of our assets (including goodwill), all of which are subject to change. Therefore, we can make no assurancesthat we will not be a PFIC in respect of our current taxable year or in the future.In general, we will be a PFIC in any taxable year if either:1.at least 75% of our gross income for the taxable year is passive income; or2.at least 50% of the value, determined on the basis of a quarterly average, of our assets is attributable to assets that produce or are held for theproduction of passive income.Passive income includes dividends, interest, royalties, rents (other than certain rents and royalties derived in the active conduct of a trade or business), theexcess of gains over losses from certain types of transactions in commodities, annuities and gains from assets that produce passive income. We will be treated asowning our proportionate share of the assets and earning our proportionate share of the income of any corporation in which we own, directly or indirectly, at least25% (by value) of the stock.If we are treated as a PFIC in any year during which a U.S. Holder owns the securities, and such U.S. Holder did not make a marktomarket election, asdescribed below, the U.S. Holder will be subject to special rules with respect to:1.any gain recognized by the U.S. Holder on the sale or other disposition of its shares; and any excess distribution that we make to the U.S. Holder(generally, the excess of the amount of any distributions to such U.S. Holder during a single taxable year of such U.S. Holder over 125% of theaverage annual distributions received by such U.S. Holder in respect of the shares during the three preceding taxable years of such U.S. Holder or,if shorter, such U.S. Holder holding period for the shares).Under these rules:2.the gain or excess distribution will be allocated ratably over the U.S. Holder’s holding period for the shares;3.the amount allocated to the U.S. Holder’s taxable year in which it realized the gain or excess distribution or to the period in the U.S. Holder’sholding period before the first day of our first taxable year in which we are a PFIC will be taxed as ordinary income;4.the amount allocated to other taxable years (or portions thereof) of the U.S. Holder and included in its holding period will be taxed at the highesttax rate in effect for that year; and5.the interest charge generally applicable to underpayments of tax will be imposed in respect of the tax attributable to each such other taxable yearof the U.S. Holder. 6.Special rules apply for calculating the amount of the foreign tax credit with respect to excess distributions by a PFIC.65Alternatively, if a U.S. Holder, at the close of its taxable year, owns ordinary shares in a PFIC that are treated as marketable stock, the U.S. Holder may makea marktomarket election with respect to such shares for such taxable year. Our shares will be “marketable” to the extent that they remain regularly traded on anational securities exchange, such as the NASDAQ Capital Market. If a U.S. Holder makes this election in a timely fashion, it will not be subject to the PFIC rulesdescribed above. Instead, in general, the U.S. Holder will include as ordinary income each year the excess, if any, of the fair market value of its shares at the end ofthe taxable year over its adjusted basis in its shares. Any ordinary income resulting from this election would generally be taxed at ordinary income tax rates andwould not be eligible for the reduced rate of tax applicable to qualified dividend income. The U.S. Holder will also be allowed to take an ordinary loss in respect ofthe excess, if any, of the adjusted basis of its shares over the fair market value at the end of the taxable year (but only to the extent of the net amount of previouslyincluded income as a result of the marktomarket election). The U.S. Holder’s basis in the shares will be adjusted to reflect any such income or loss amounts. U.S.Holders should consult their own tax advisor regarding potential advantages and disadvantages of making a marktomarket election with respect to their shares.Alternatively, a U.S. Holder of stock in a PFIC may avoid the PFIC tax consequences described above in respect to our or shares by making a timely“qualified electing fund” election to include in income its pro rata share of our net capital gains (as longterm capital gain) and other earnings and profits (asordinary income), on a current basis, in each case whether or not distributed, in the taxable year of the U.S. Holder in which or with which our taxable year ends.However, the qualified electing fund election is available only if the PFIC provides such U.S. Holder with certain information regarding its earnings and profits asrequired under applicable U.S. Treasury regulations. We do not intend to furnish the information that a U.S. Holder would need in order to make a qualified electingfund election. Therefore, U.S. Holders will not be able to make or maintain such election with respect to their or shares.If a U.S. Holder owns our shares or during any year that we are a PFIC, such holder must file U.S. Internal Revenue Service Form 8621 regarding suchholder’s shares or and the gain realized on the disposition of the shares. The reduced tax rate for dividend income, discussed in “Taxation of Distributions,” is notapplicable to dividends paid by a PFIC. U.S. Holders should consult with their own tax advisors regarding reporting requirements with respect to their shares.Tax Consequences to NonU.S. HoldersDividends paid to a NonU.S. Holder in respect of our or shares generally will not be subject to U.S. federal income tax, unless the dividends are effectivelyconnected with the NonU.S. Holder’s conduct of a trade or business within the United States (and, if required by an applicable income tax treaty, are attributable toa permanent establishment or fixed base that such holder maintains in the United States).In addition, a NonU.S. Holder generally will not be subject to U.S. federal income tax on any gain attributable to a sale or other disposition of our or sharesunless such gain is effectively connected with its conduct of a trade or business in the United States (and, if required by an applicable income tax treaty, isattributable to a permanent establishment or fixed base that such holder maintains in the United States) or the NonU.S. Holder is an individual who is present in theUnited States for 183 days or more in the taxable year of sale or other disposition and certain other conditions are met (in which case, such gain from United Statessources generally is subject to tax at a 30% rate or a lower applicable tax treaty rate).Dividends and gains that are effectively connected with the NonU.S. Holder’s conduct of a trade or business in the United States (and, if required by anapplicable income tax treaty, are attributable to a permanent establishment or fixed base in the United States) generally will be subject to tax in the same manner as fora U.S. Holder and, in the case of a NonU.S. Holder that is a corporation for U.S. federal income tax purposes, may also be subject to an additional branch profits taxat a 30% rate or a lower applicable tax treaty rate.66Information Reporting and Backup Withholding In general, information reporting for U.S. federal income tax purposes generally should apply to distributions made on the securities within the UnitedStates to a noncorporate U.S. Holder and to the proceeds from sales and other dispositions of the securities by a noncorporate U.S. Holder to or through a U.S.office of a broker. Payments made (and sales and other dispositions effected at an office) outside the United States generally should be subject to informationreporting in limited circumstances.Dividend payments made to U.S. Holders and proceeds paid from the sale or other disposition the securities may be subject to information reporting to theIRS and possible U.S. federal backup withholding at a current rate of 28%. Certain exempt recipients, such as corporations, are not subject to these informationreporting requirements. Backup withholding will not apply to a U.S. Holder who furnishes a correct taxpayer identification number and makes any other requiredcertification, or who is otherwise exempt from backup withholding. U.S. Holders who are required to establish their exempt status must provide a duly executed IRSForm W9.A NonU.S. Holder generally may eliminate the requirement for information reporting and backup withholding by providing certification of its foreignstatus, under penalties of perjury, on a duly executed applicable IRS Form W8 or by otherwise establishing an exemption.Backup withholding is not an additional tax. Rather, the amount of any backup withholding will be allowed as a credit against a U.S. Holder’s or a nonU.S.Holder’s U.S. federal income tax liability and may entitle such holder to a refund, provided that certain required information is timely furnished to the IRS.PROSPECTIVE PURCHASERS OF OUR SECURITIES SHOULD CONSULT WITH THEIR OWN TAX ADVISORS REGARDING THE APPLICATION OFTHE U.S. FEDERAL INCOME TAX LAWS TO THEIR PARTICULAR SITUATIONS AS WELL AS ANY ADDITIONAL TAX CONSEQUENCES RESULTING FROMPURCHASING, HOLDING OR DISPOSING OF OUR SECURITIES, INCLUDING THE APPLICABILITY AND EFFECT OF THE TAX LAWS OF ANY STATE, LOCALOR NONU.S. JURISDICTION, INCLUDING ESTATE, GIFT, AND INHERITANCE LAWS AND APPLICABLE TAX TREATIES.F. DIVIDENDS AND PAYING AGENTS.Not applicable.G. STATEMENT BY EXPERTS.None.H. DOCUMENTS ON DISPLAY.We previously filed a registration statement on Form F1 (File No. 333166056) with the SEC relating to our initial public offering in May 2010. This transition reportdoes not contain all of the information in the registration statement and the exhibits and financial statements included with the registration statement. References inthis transition report to any of our contracts, agreements or other documents are not necessarily complete, and you should refer to the exhibits attached to theregistration statement for copies of the actual contracts, agreements or documents. In addition, we will file transition reports on Form 20F and submit otherinformation under cover of Form 6K. As a foreign private issuer, we are exempt from the proxy requirements of Section 14 of the Exchange Act and our officers,directors and principal shareholders will be exempt from the insider shortswing disclosure and profit recovery rules of Section 16 of the Exchange Act. You may readand copy the registration statement, the related exhibits and other materials we file with the SEC at the SEC's public reference room in Washington, D.C. at 100 FStreet, Room 1580, N.E., Washington, D.C.20549. You can also request copies of those documents, upon payment of a duplicating fee, by writing to the SEC. Pleasecall the SEC at 1800SEC0330 for further information on the operation of the public reference rooms. The SEC also maintains an Internet site that contains reports,proxy and information statements and other information regarding issuers that file with the SEC. The website address is http://www.sec.gov. You may also request acopy of these filings, at no cost, by writing us at LAB 32, SOHO 3Q, No 9, Guanghua Road, Chaoyang District, Beijing, People’s Republic of China, 100020 ortelephoning us at (86) 1085866721.67I. SUBSIDIARY INFORMATIONFor a listing of our subsidiaries, see “Item 4. Information on the Company – C. Organizational Structure.”ITEM 11. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.Interest Rate RiskAs of December 31, 2017, we had no shortterm or longterm borrowings. If we borrow money in future periods, we may be exposed to interest rate risk. Ourexposure to market risk for changes in interest rates relates primarily to the interest income generated by our cash deposits with our banks and heldtomaturityinvestments. We have not used any derivative financial instruments in our investment portfolio. Interest earnings instruments carry a degree of interest rate risk. Wehave not been exposed, nor do we anticipate being exposed to material risks due to changes in interest rates. However, our future interest income may fall short ofexpectations due to changes in interest rates. Foreign Exchange RiskTranslation adjustments amounted to $90,671 and $387,375 gain as of the fiscal year ended December 31, 2017 and 2016, respectively. The Companytranslated balance sheet amounts with the exception of equity at December 31, 2017 at RMB 6.5342 to $1.00 as compared to RMB 6.9370 to $1.00 at December 31,2016. The Company stated equity accounts at their historical rate. The average translation rates applied to income statement accounts for the fiscal year endedDecember 31, 2017 and 2016 were RMB6.7356 and RMB 6.7153 to US$1.00, respectively. So far, the PRC government has been able to manage a stable exchange ratebetween RMB and the U.S. Dollar. Our future downward translation adjustments may occur and can be significant due to changes in such exchange rate.If we decide to convert our RMB into U.S. dollars for the purpose of making payments for dividends on our ordinary shares or for other business purposes,appreciation of the U.S. dollar against the RMB would have a negative effect on the U.S. dollar amount available to us.The PRC government imposes strict restrictions on PRC resident companies regarding converting RMB into foreign currencies and vice versa under capitalaccount transactions, such as receiving equity investments from outside of the PRC, making equity investments outside of the PRC, borrowing money from orlending money outside of the PRC, and repaying debt or remitting liquidated assets and/or accumulated profits outside of the PRC. These transactions have to beapproved by the relevant PRC government authorities, including but not limited to the commerce bureau, the tax bureau and the State Administration of ForeignExchange, or SAFE, and have to be conducted at banks entrusted by the local SAFE branch. As our business continues to grow, we may need to continuouslyfinance our PRC subsidiaries by raising capital from outside of the PRC. The restriction on converting RMB into foreign currencies, and vice versa, may limit ourability to use capital resources from outside of the PRC. Such restrictions may also limit our ability to remit profits from our PRC subsidiaries outside of the PRC,therefore potentially limiting our ability to pay dividends to our shareholders. In addition, such restrictions will limit our ability to freely transfer temporary excesscash in our or our subsidiaries’ bank accounts in and out of the PRC, therefore limiting our ability to conduct crossborder cash management activities to optimizethe utilization of our cash.InflationAlthough China has experienced an increasing inflation rate, inflation has not had a material impact on our results of operations in recent years. Accordingto the National Bureau of Statistics of China, the change in the consumer price index in China was 0.46%, (0.77%), and 1.16% in 2001, 2002 and 2003, respectively.However, in connection with a 3.9% increase in 2004, the PRC government announced measures to restrict lending and investment in China in order to reduceinflationary pressures in China’s economy. Following the government’s actions, the consumer price index decreased to 1.8% in 2005 and to 1.5% in 2006. In 2007, theconsumer price index increased to 4.8%. In response, China’s central bank, the People’s Bank of China, announced that the bank reserve ratio would rise half apercentage point to 15.5% in an effort to reduce inflation pressures. China’s consumer price index growth rate reached 8.7% year over year in 2008. In 2009 and 2010,the change in the consumer price index in China was minus 0.7% and 3.3%.China consumer price index in November 2017 was 3.8% higher than that of the same period in 2016. China consumer price index in December 2016 was2.4% higher than that of the same period in 2015. China consumer price index in December 2015 was 4.8% higher than that of the same period in 2014. Chinaconsumer price index in December 2014 was 3.3% higher than that of the same period in 2013. The results of the PRC government’s actions to combat inflation aredifficult to predict. Adverse changes in the Chinese economy, if any, will likely impact the financial performance of a variety of industries in China that use, or wouldbe candidates to use, our software products and services.68ITEM 12. DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES.A. DEBT SECURITIES.Not applicable. B. WARRANTS AND RIGHTS.Not applicable.C. OTHER SECURITIES.Not applicable.D. AMERICAN DEPOSITARY SHARES.The Bank of New York Mellon, as depositary (the “Depositary”) for the Company’s ADR facility, notified the owners and holders of the Company’s ADSsthat the ADS facility will terminate effective at 5:00 p.m. (Eastern Time) on September 19, 2018. Under the terms of the Deposit Agreement among the Company, theDepositary and the owners and holders of ADSs of the Company (the “Deposit Agreement”), owners and holders of the Company’s ADSs have until at leastJanuary 21, 2019 to surrender their ADSs to the Depositary for delivery of the underlying ordinary shares of the Company. Subsequent to January 21, 2019, underthe terms of the Deposit Agreement, the Depositary may attempt to sell any ordinary shares remaining on deposit with the Depositary. If the Depositary sells suchunderlying ordinary shares or receives value for such shares, holders must surrender their ADSs to obtain payment of the sale proceeds, net of expenses andapplicable tax and charges. We completed the voluntary delisting of our ADSs from the NASDAQ Capital Market on September 19, 2018.You may hold ADSs either (A) directly (i) by having ADSs registered in your name in the Direct Registration System, or (ii) by having an Americandepositary receipt, also referred to as an ADR, which is a certificate evidencing a specific number of ADSs, registered in your name, or (B) indirectly by holding asecurity entitlement in ADSs through your broker or other financial institution. If you hold ADSs directly, you are a registered ADS holder, also referred to as anADS holder. This description assumes you are an ADS holder. If you hold the ADSs indirectly, you must rely on the procedures of your broker or other financialinstitution to assert the rights of ADS holders described in this section. You should consult with your broker or financial institution to find out what thoseprocedures are.The Direct Registration System, or DRS, is a system administered by The Depository Trust Company, also referred to as DTC, pursuant to which thedepositary may register the ownership of uncertificated ADSs, which ownership will be confirmed by periodic statements sent by the depositary to the registeredholders of uncertificated ADSs.69As an ADS holder, you will not be treated as one of our registered shareholders and you will not have direct shareholder rights. British Virgin Island’s lawgoverns our direct shareholders’ rights. The depositary will be the holder of the shares underlying your ADSs. As a registered holder of ADSs, you will have ADSholder rights. A Deposit Agreement among us, the depositary and you, as an ADS holder, and all other persons indirectly holding ADSs, sets out ADS holder rightsas well as the rights and obligations of the depositary. New York law governs the Deposit Agreement and the ADSs.The following is a summary of the material provisions of the Deposit Agreement. For more complete information, you should read the entire DepositAgreement and the form of ADS, which contains the terms of the ADSs. The Deposit Agreement is filed as an exhibit to our registration statement filed on Form F1.You may obtain the registration statement and the attached Deposit Agreement from the SEC’s website at http://www.sec.gov. You may also obtain a copy of theDeposit Agreement at the SEC’s Public Reference Room, which is located at 100 F Street, NE, Washington, DC 20549. You may obtain information on the operationof the Public Reference Room by calling the SEC at 18007320330. Fees and ExpensesPersons depositing or withdrawing shares or ADS holders must pay:For:$5.00 (or less) per 100 ADSs (or portion of 100 ADSs)Issuance of ADSs, including issuances resulting from a distribution of shares orrights or other propertyCancellation of ADSs for the purpose of withdrawal, including if the DepositAgreement terminates$.05 (or less) per ADSAny cash distribution to ADS holdersA fee equivalent to the fee that would be payable if securities distributed to youhad been shares and the shares had been deposited for issuance of ADSsDistribution of securities distributed to holders of deposited securities whichare distributed by the depositary to ADS holders$.05 (or less) per ADSs per calendar yearDepositary servicesRegistration or transfer feesTransfer and registration of shares on our share register to or from the name ofthe depositary or its agent when you deposit or withdraw sharesExpenses of the depositaryCable, telex and facsimile transmissions (when expressly provided in the DepositAgreement) converting foreign currency to U.S. dollarsTaxes and other governmental charges the depositary or the custodian have topay on any ADS or share underlying an ADS, for example, share transfer taxes,stamp duty or withholding taxesAs necessaryAny charges incurred by the depositary or its agents for servicing the depositedsecuritiesAs necessaryPayment of TaxesHolders of our ADSs are responsible for any taxes or other governmental charges payable on their ADSs or on the deposited securities represented by anyof their ADSs. The depositary may refuse to register any transfer of a holder’s ADSs or allow withdrawal of the deposited securities represented by the ADSs untilsuch taxes or other charges are paid. It may apply payments owed to the holder or sell deposited securities represented by the ADSs to pay any taxes owed and theholder will remain liable for any deficiency. If the depositary sells deposited securities, it will, if appropriate, reduce the number of ADSs to reflect the sale and pay toADS holders any proceeds, or send to ADS holders any property, remaining after it has paid the taxes.70PART IIITEM 13. DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES.None.ITEM 14. MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS.Use of Proceeds.We completed our initial public offering on May 14, 2010 (the “IPO”), which generated net proceeds of approximately $14.6 million. All remaining cash onhand from the proceeds of our IPO was transferred to C Media Limited and its subsidiaries following the completion of the asset exchange transactions on August17, 2018.ITEM 15. CONTROLS AND PROCEDURES.Disclosure Controls and ProceduresOur Chief Executive Officer and Chief Financial Officer have reviewed and evaluated the effectiveness of our disclosure controls and procedures, whichincluded inquiries made to certain other of our employees. The term “disclosure controls and procedures,” as defined in Rules 13a15(e) and 15d15(e) under theExchange Act, means controls and other procedures of a company that are designed to ensure that information required to be disclosed by a company in thereports, such as this report, that it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in theSEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to bedisclosed by a company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the company’s management, including itsprincipal executive and principal financial officers, as appropriate to allow timely decisions regarding required disclosure. Management recognizes that any controlsand procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives and management necessarilyapplies its judgment in evaluating the costbenefit relationship of possible controls and procedures. Based on that evaluation, our Chief Executive Officer and ChiefFinancial Officer have each concluded that, as of December 31, 2017, the Company’s disclosure controls and procedures were not effective due to the materialweakness described in the “Management’s Report on Internal Control over Financial Reporting” section below.Management’s Report on Internal Control Over Financial ReportingOur management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Exchange ActRules 13a15(f) and 15d15(f). Internal control over financial reporting refers to the process designed by, or under the supervision of, our principal executive officerand principal financial officer, and effected by our Board of Directors, management and other personnel, to provide reasonable assurance regarding the reliability offinancial reporting and the preparation of financial statements for external purposes in accordance with U.S. GAAP and includes those policies and procedures that(i) pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of the assets of the Company; (ii)provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with U.S. GAAP, and thatreceipts and expenditures of the Company are being made only in accordance with authorizations of management and directors of the Company; and (iii) providereasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the Company’s assets that could have a materialeffect on the financial statements.71Any system of internal control, no matter how well designed, has inherent limitations. Therefore, even those systems determined to be effective canprovide only reasonable assurance with respect to financial statement preparation and presentation. Because of the inherent limitations of internal control, there is arisk that material misstatements may not be prevented or detected on a timely basis by internal control over financial reporting. However, these inherent limitationsare known features of the financial reporting process. Therefore, it is possible to design into the process safeguards to reduce, though not eliminate, this risk.Management assessed our internal control over financial reporting as of the year ended December 31, 2017. In making this assessment, management usedthe criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in the 2014 report entitled "Internal ControlIntegratedFramework." The COSO framework summarizes each of the components of a company’s internal control system, including (i) the control environment, (ii) riskassessment, (iii) control activities, (iv) information and communication, and (v) monitoring. Based on such assessment, management concluded that its internalcontrol over financial reporting as of December 31, 2017 was not effective because of the following material weakness:Lack of U.S. GAAP expertise. Although our accounting personnel are professional and experienced in accounting requirements and procedures generallyaccepted in the PRC, they do not have sufficient knowledge, experience and training in maintaining our books and records and preparing financial statements inaccordance with U.S. GAAP standards and SEC rules and regulations. The staff needs additional training to become experienced in U.S. GAAPbased reporting,including the skills of U.S. GAAPbased period end closing, consolidation of financial statements, and U.S. GAAP conversion.In order to address the above material weakness, our management plans to take the following steps:We will employ, as needed, outside professionals to provide key accounting personnel ongoing technical trainings to ensure their proper understanding ofU.S. GAAP and newly announced accounting standards.The Company believes the foregoing measures will remediate the identified material weakness in future periods. The Company is committed to monitoringthe effectiveness of these measures and making any changes that are necessary and appropriate.Notwithstanding the conclusion that its internal control over financial reporting was not effective as of the end of the period covered by this report, ourChief Executive Officer and Chief Financial Officer believe that the financial statements and other information contained in this report present fairly, in all materialrespects, its business, financial condition and results of operations. Nothing has come to the attention of management that causes them to believe that any materialinaccuracies or errors exist in the Company’s financial statements as of December 31, 2017.Attestation report of the registered public accounting firm.This transition report does not include an attestation report of the Company’s registered public accounting firm on internal control over financial reportingbecause the Company is a nonaccelerated filer permanently exempted from section 404(b) of the SarbanesOxley Act.Changes in Internal Control over Financial ReportingThere were no changes in the Company’s internal control over financial reporting that occurred during our fiscal year ended December 31, 2017 that hasmaterially affected or is reasonably likely to materially affect our internal control over financial reporting.ITEM 16. [RESERVED]ITEM 16A. AUDIT COMMITTEE FINANCIAL EXPERT.Our board of directors has determined that Mr. Dennis Galgano qualifies as an audit committee financial expert. Our board of directors has determined thatMessrs. Dennis Galgano, Jin Shi, Jiming Ha and Zhihao Xu meet the definition of an “independent director” under the applicable NASDAQ Rules and under Rule10A3 of the Securities Exchange Act of 1934, as amended.72ITEM 16B. CODE OF ETHICS.Our board of directors has adopted a code of business conduct and ethics applicable to our directors, officers and employees. We have posted the code onour website at http://www.luokung.com.ITEM 16C. PRINCIPAL ACCOUNTANT FEES AND SERVICES.Audit FeesThe aggregate fees billed by Moore Stephens CPA Limited for professional services rendered for the audit of our financial information disclosed in thistransition report on Form 20F was $280,000 for the two years ended December 31, 2017 and 2016.The aggregate fees billed by our previous auditor, BDO China Shu Lun Pan Certified Public Accountants LLP for professional services rendered for theaudit of our annual financial information included in our annual reports on Form 20F was $105,500 for each of the fiscal years ended September 30, 2017, 2016 and2015.Tax FeesWe did not engage our principal accountants to provide tax or related services during the last two fiscal years.All Other FeesWe did not engage our principal accountants to render services to us during the last two fiscal years, other than as reported above.ITEM 16D. EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES.Not applicable.ITEM 16E. PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS.Not applicable.ITEM 16F. CHANGE IN REGISTRANT’S CERTIFYING ACCOUNTANT.Not applicable.ITEM 16G. CORPORATE GOVERNANCE.We are incorporated in the BVI and our corporate governance practices are governed by applicable BVI law as well as our memorandum and articles ofassociation. In addition, because our ADSs are listed on NASDAQ, we are subject to NASDAQ’s corporate governance requirements. NASDAQ Listing Rule5620(a) requires each issuer to hold an annual meeting of shareholders no later than one year after the end of the issuer’s fiscal year end. However, NASDAQ ListingRule 5615(a)(3) permits a foreign private issuer like us to follow home country practices in lieu of certain requirements of Listing Rule 5600, provided that suchforeign private issuer discloses in its transition report filed with the SEC each requirement of Rule 5600 that it does not follow and describes the home countrypractice followed in lieu of such requirement. We follow home country practice with respect to annual meetings and did not hold an annual shareholder meeting inthe year ended December 31, 2017. We may, however, hold annual shareholder meetings in the future if there are significant issues that require shareholders’approvals.ITEM 16H. MINE SAFETY DISCLOSURE.Not applicable.73PART IIIITEM 17. FINANCIAL STATEMENTS.We have elected to provide financial statements and related information specified in Item 18.ITEM 18. FINANCIAL STATEMENTS.See “Index to Consolidated Financial Statements” for a list of all financial statements filed as part of this transition report. The Financial Statements arebeginning on page F1.ITEM 19. EXHIBITS.See the Exhibit Index following the signature page of this report, which is incorporated herein by reference.74SIGNATURESThe registrant hereby certifies that it meets all of the requirements for filing on Form 20F and that it has duly caused and authorized the undersigned tosign this transition report on its behalf.LUOKUNG TECHNOLOGY CORP.By:/s/ Xuesong Song Xuesong SongChief Executive Officer(principal executive officer)October 12, 201875EXHIBIT INDEXThe following documents are filed as part of this transition report on Form 20F.ExhibitNumberDescription1.1Amended and Restated Memorandum of Association and Articles of Association of Luokung Technology Corp., dated August 20, 2018, and ascurrently in effect.2.1*Deposit Agreement among the Company, depositary and holders of the American Depositary Receipts.2.2*Form of American Depositary Receipt.2.3*English translation of Entrusted Management Agreement dated December 15, 2009 between Xi’an Softech Co., Ltd., Xi’an Kingtone InformationTechnology Co., Ltd. and the shareholders of Xi’an Kingtone Information Technology Co., Ltd.3.1*English translation of Shareholder’s Voting Proxy Agreement dated December 15, 2009 between Xi’an Softech Co., Ltd., Xi’an Kingtone InformationTechnology Co., Ltd. and the shareholders of Xi’an Kingtone Information Technology Co., Ltd.4.1*English translation of Exclusive Technology Service Agreement dated December 15, 2009 between Xi’an Softech Co., Ltd. and Xi’an KingtoneInformation Technology Co., Ltd.4.2*English translation of Exclusive Option Agreement dated December 15, 2009 between Xi’an Softech Co., Ltd., Xi’an Kingtone InformationTechnology Co., Ltd. and the shareholders of Xi’an Kingtone Information Technology Co., Ltd.4.3*English translation of Equity Pledge Agreement dated December 15, 2009 between Xi’an Softech Co., Ltd., Xi’an Kingtone Information TechnologyCo., Ltd. and the shareholders of Xi’an Kingtone Information Technology Co., Ltd.4.4*English translation of Loan Agreement dated September 14, 2009 between Xi’an Kingtone Information Technology Co., Ltd. and Xian CityCommercial Bank.4.5*English translation of Mortgage Agreement dated September 14, 2009 between Xi’an Kingtone Information Technology Co., Ltd. and Xian CityCommercial Bank.4.6*English translation of Form of Employment Agreement entered into between the Company and the Company’s executive officers.4.7*2010 Omnibus Incentive Plan of the Company.4.8**English translation of Project Construction Contract dated August 10, 2010 between Xi’an Hu County Yuxing Agriculture Science & TechnologyCo., Ltd. and Xi’an Kingtone Information Technology Co., Ltd.4.9***Asset Exchange Agreement by and between C Media Limited and the Company dated as of January 25, 2018.4.10***Securities Purchase Agreement by and among Redstone YYL Management Limited and five shareholders holding majority of the shares of theCompany dated as of January 25, 2018.4.15Exclusive Business Cooperation Agreement by and between Zhongchuan Tianxia Information Technology (Shenzhen) Co., Ltd., and Beijing MobileVision Technology Co., Ltd., dated August 31, 2015.764.16Exclusive Option Agreement by and among Zhongchuan Tianxia Information Technology (Shenzhen) Co., Ltd., Xuesong Song, Weili Chen, PingWang, Donglai Liu, and Beijing Mobile Vision Technology Co., Ltd., dated August 31, 2015.4.17Equity Interest Pledge Agreement by and among Zhongchuan Tianxia Information Technology (Shenzhen) Co., Ltd., Xuesong Song, Weili Chen, PingWang, Donglai Liu, and Beijing Mobile Vision Technology Co., Ltd., dated August 31, 2015.4.18Addendum to Asset Exchange Agreement by and among the Company, Topsky Infotech Holdings Pte Ltd. and C Media Limited, dated October 3,2018. Incorporated by reference to the Company’s Current Report on Form 6K filed on October 4, 2018.4.19Stock Purchase Agreement, dated August 25, 2018, by and among the Company, LK Technology Ltd., and the shareholders listedtherein. Incorporated by reference to the Company’s Current Report on Form 6K filed on August 27, 2018.4.20Power of Attorney by Weili Chen, dated August 31, 2015.4.21Power of Attorney by Ping Wang, dated August 31, 2015.4.22Power of Attorney by Donglai Liu, dated August 31, 2015.4.23Power of Attorney by Xuesong Song, dated August 31, 2015.8.1List of Subsidiaries and Consolidated Variable Interest Entities10.1Employment Agreement, dated August 19, 2018, between Luokung Technology Corp. and Xuesong Song.†10.2Employment Agreement, dated August 19, 2018, by and between Luokung Technology Corp. and Jie Yu.†12.1Certification of Chief Executive Officer required by Rule 13a14(a).12.2Certification of Chief Financial Officer required by Rule 13a14(a).13.1Certification of Chief Executive Officer required by Rule 13a14(a).13.2Certification of Chief Financial Officer required by Rule 13a14(a).101.INSXBRL Instance Document.101.SCHXBRL Taxonomy Extension Schema Document.101.CALXBRL Taxonomy Extension Calculation Linkbase Document.101.DEFXBRL Taxonomy Extension Definition Linkbase Document.101.LABXBRL Taxonomy Extension Label Linkbase Document.101.PREXBRL Taxonomy Extension Presentation Linkbase Document.*Previously filed as an exhibit to the Company’s Registration Statement on Form F1 (Reg. No. 333166056) filed with the Commission and incorporated hereinby reference.**Previously filed as exhibits to the Company’s Transition Report on Form 20F filed with the Commission on January 20, 2011 and incorporated herein byreference.***Previously filed as exhibits to the Company’s Annual Report on Form 20F filed with the Commission on February 9, 2018 and incorporated herein byreference.†Indicates management contract or compensatory plan, contract or arrangement.77LK Technology Ltd. and SubsidiariesCONSOLIDATED FINANCIAL STATEMENTSTABLE OF CONTENTSPage(s)Report of Independent Registered Public Accounting FirmF2Consolidated Financial StatementsConsolidated Balance SheetsF3Consolidated Statements of Operations and Comprehensive LossF4application.Chuang (Vincent) Tao was appointed as a member of the Board effective on August 25, 2018. Dr. Tao was the Chairman of SuperEngine Suzhou from 2014to 2017. Dr. Tao has been the president of the Seasky Angel Investment Alliance of Shanghai since 2015. Dr. Tao received his Bachelor Degree of geographicinformation and telemetry from Wuhan University in China in 1990 and received his Ph.D. from University of Calgary, Canada in 1997.Dennis Galgano was appointed as a director of the Company following the consummation of the asset exchange agreement. He was a registered consultantwith Morgan Joseph Triartisan LLC from November 2016 until October 2017, and previously served as vice chairman and head of international investment bankingfor Morgan Joseph Triartisan LLC, which is a registered broker dealer engaged in the investment banking and financial advisory industry. Mr. Galgano received aB.S. degree in Chemistry from St. John’s University and an M.B.A. from The Wharton School in 1972.Jin Shi was appointed as a director of the Company following the consummation of the asset exchange transactions. Mr. Shi has served as the managingpartner of Chum Capital Group, a merchant bank focused on helping Chinese growth companies to access global capital, since January 2013. Mr. Shi has also servedas a director of Seven Stars Cloud Group, Inc. (NASDAQ: SSC), a premium video on demand service provider, since January 2014, and joined the audit committee ofits board of directors in March 2016. He also served as a director and member of the audit committee of Pingtan Marine Enterprise, Ltd. (NASDAQ: PME), a marineenterprise group primarily engaged in ocean fishing through its subsidiaries. Mr. Shi received an EMBA degree from the Guanghua Management School of BeijingUniversity, and a Bachelor’s degree of science in Chemical Engineering from Tianjin University.Jiming Ha was appointed as a director of the Company following the consummation of the asset exchange agreement, and has also served as a seniorresearch fellow for the China Finance 40 Forum since March 1, 2018, and previously served as a managing director of Goldman Sachs from January 2017 to April2017. Mr. Ha served as a vice chairman and chief investment strategist of the Investment Strategy Group for Private Wealth Management at Goldman Sachs from2010 to January 2017. Mr. Ha holds a PhD in Economics from the University of Kansas and Master’s and Bachelor’s degrees of science from Fudan University.Zhihao Xu was appointed as a director of the Company following the consummation of the asset exchange transactions. Mr. Xu has served as the chiefexecutive officer of Geely Group Co., Ltd., in Hangzhou, China, since December 2017, and previously served as the chairman and chief executive officer of BeijingDingchengrenhe Investment Co., Ltd., a funds management company, from January 2017 to December 2017. Mr. Xu served as the chairman of president of HNAUSOLV CO., LTD., and the chief innovation officer of HNA Logistics Group from January 2014 to December 2016, and prior to that as the chairman of GopayInnovation Technology Co. Ltd., an online payment system operator supporting online money transfers, from April 2012 to January 2014. Mr. Xu graduated from theBusiness School of Renmin University of China and from the Wudaokou Finance College of Tsinghua University with a fund qualification certificate and securitiesqualification certificate.B. COMPENSATION.Compensation of Directors and Executive OfficersFor the ninemonth transition period ended September 30, 2018 and the fiscal year ended December 31, 2017, we did not pay any cash compensation to ourexecutive officers of LK Technology Ltd. and a to our directors for serving on our board of directors of LK Technology Ltd.37Other than nonemployee directors, we do not intend to compensate directors for serving on our board of directors or any of its committees. We do,however, intend to reimburse each member of our board of directors for outofpocket expenses incurred by each director in connection with attending meetings ofthe board of directors and its committees.AdministrationThe Incentive Plan is administered by our board of directors, or at the discretion of the board, by our compensation committee. Our board of directors hasdelegated authority to our compensation committee to administer the Incentive Plan. Subject to the terms of the Incentive Plan, the compensation committee mayselect participants to receive awards, determine the types of awards and terms and conditions of awards, and interpret provisions of the Incentive Plan.The ordinary shares issued or to be issued under the Incentive Plan consist of authorized but unissued shares. If any ordinary shares covered by an awardare not purchased or are forfeited, or if an award otherwise terminates without delivery of any ordinary shares, then the number of ordinary shares counted againstthe aggregate number of ordinary shares available under the plan with respect to the award will, to the extent of any such forfeiture or termination, again be availablefor making awards under the Incentive Plan.EligibilityAwards may be made under the Incentive Plan to our employees, officers, directors, consultants or advisers or to any of our affiliates, and to any otherindividual whose participation in the Incentive Plan is determined to be in our best interests by our board of directors.Amendment or Termination of the PlanOur board of directors may terminate or amend the Incentive Plan at any time and for any reason. No amendment, however, may adversely impair the rightsof grantees with respect to outstanding awards. The Incentive Plan has a term of ten years. Amendments will be submitted for shareholder approval to the extentrequired by applicable stock exchange listing requirements or other applicable laws.OptionsThe Incentive Plan permits the granting of options to purchase ordinary shares intended to qualify as incentive share options under the Internal RevenueCode and share options that do not qualify as incentive share options, or nonqualified share options.The exercise price of each share option may not be less than 100% of the fair market value of our ADSs representing ordinary shares on the date of grant.In the case of certain 10% shareholders who receive incentive share options, the exercise price may not be less than 110% of the fair market value of our ADSsrepresenting ordinary shares on the date of grant. An exception to these requirements is made for options that we grant in substitution for options held byemployees of companies that we acquire. In such a case the exercise price is adjusted to preserve the economic value of the employee’s share option from his or herformer employer.The term of each share option is fixed by the compensation committee and may not exceed ten years from the date of grant. The compensation committeedetermines at what time or times each option may be exercised and the period of time, if any, after retirement, death, disability or termination of employment duringwhich options may be exercised.Options may be made exercisable in installments. The award agreement provides the vesting of the options. Exercisability of options may be accelerated bythe compensation committee.38In general, an optionee may pay the exercise price of an option by (1) cash or check (in U.S. dollars or Renminbi or other local currency as approved by thecompensation committee), (2) ordinary shares held for such period of time as may be required by the compensation committee, (3) delivery of a notice of a marketorder with a broker with respect to ordinary shares then issuable upon exercise of an option, and that the broker has been directed to pay us a sufficient portion ofnet proceeds of the sale in satisfaction of the exercise price, provided that payment of such proceeds is then made to us upon settlement of such sale, (4) otherproperty acceptable to the compensation committee with a fair market value equal to the exercise price, (5) cashless exercise or (6) any combination of the foregoing.Share options granted under the Incentive Plan may not be sold, transferred, pledged, or assigned other than by will or under applicable laws of descentand distribution. However, we may permit limited transfers of nonqualified options for the benefit of immediate family members of grantees to help with estateplanning concerns or pursuant to a domestic relations order in settlement of marital property rights.Other AwardsThe compensation committee may also award under the Incentive Plan:1.ordinary shares subject to restrictions;2.deferred ordinary shares, credited as deferred ordinary share units, but ultimately payable in the form of unrestricted ordinary shares inaccordance with the terms of the grant or with the participant’s deferral election;3.ordinary share units subject to restrictions;4.unrestricted ordinary shares, which are ordinary shares issued at no cost or for a purchase price determined by the compensation committee whichare free from any restrictions under the 2011 Omnibus Incentive Plan;5.dividend equivalent rights entitling the grantee to receive credits for dividends that would be paid if the grantee had held a specified number ofordinary shares; or6.a right to receive a number of ordinary shares or, in the discretion of the compensation committee, an amount in cash or a combination of ordinaryshares and cash, based on the increase in the fair market value of the ADSs representing ordinary shares underlying the right during a statedperiod specified by the compensation committee.Effect of Certain Corporate TransactionsCertain change of control transactions involving us may cause awards granted under the Incentive Plan to vest, unless the awards are continued orsubstituted for by the surviving company in connection with the corporate transaction.Unless otherwise provided in the appropriate option agreement on the date of grant or provided by our board of directors thereafter with the consent of thegrantee, options granted under the Incentive Plan become exercisable in full following (1) a dissolution of our company or a merger, consolidation or reorganizationof our company with one or more other entities in which we are not the surviving entity, (2) a sale of substantially all of our assets to another person or entity, or (3)any transaction (including without limitation a merger or reorganization in which we are the surviving entity) which results in any person or entity owning 50% ormore of the combined voting power of all classes of our shares.39Adjustments for Dividends and Similar EventsThe compensation committee will make appropriate adjustments in outstanding awards and the number of ordinary shares available for issuance under theIncentive Plan, including the individual limitations on awards, to reflect ordinary share dividends, stock splits and other similar events.C. BOARD PRACTICES.Board of DirectorsOur board of directors consists of six members being Messrs. Xuesong Song, Kegang Peng, Dennis Galgano, Jin Shi, Jiming Ha and Zhiaho Xu. Ourdirectors hold office until our annual meeting of shareholders, where their successors will be duly elected and qualified, or until the directors’ death, resignation orremoval, whichever is earlier. Our directors are not subject to a term of office and hold office until their resignation, death or incapacity or until their respectivesuccessors have been elected and qualified in accordance with our fourth amended and restated memorandum of association and articles of association. A directorwill be removed from office if, among other things, the director (1) becomes bankrupt, (2) dies or becomes of unsound mind, or (3) is absent from meetings of ourboard of directors for six consecutive months without leave and our board of directors resolves that the office is vacated. A director is not entitled to any specialbenefits upon termination of service with the company.Director IndependenceOur board of directors consists of six members; Messrs. Dennis Galgano, Jin Shi, Jiming Ha and Zhihao Xu have been determined by us to be independentdirectors within the meaning of the independent director guidelines of the NASDAQ Corporate Governance Rules (the “NASDAQ Rules”).Committees of Our Board of DirectorsTo enhance our corporate governance, we established three committees under our board of directors: an audit committee, a compensation committee, and anominating and corporate governance committee. We have adopted a charter for each of these committees. The committees have the following functions andmembers.Audit CommitteeOur audit committee reports to our board of directors regarding the appointment of our independent public accountants, the scope and results of ourannual audits, compliance with our accounting and financial policies and management’s procedures and policies relating to the adequacy of our internal accountingcontrols. Our audit committee consists of Messrs. Dennis Galgano, Jin Shi, and Jiming Ha. Mr. Galgano, having accounting and financial management expertise,serves as the chairman of the audit committee and is an “audit committee financial expert” as defined by the rules and regulations of the SEC. Our board of directorshas determined that each of these persons meet the definition of an “independent director” under the applicable NASDAQ Rules and under Rule 10A3 of theSecurities Exchange Act of 1934, as amended (the “Exchange Act”).Our audit committee is responsible for, among other things:●the appointment, evaluation, compensation, oversight and termination of the work of our independent auditor (including resolution of disagreementsbetween management and the independent auditor regarding financial reporting);●an annual performance evaluation of the audit committee;●establishing procedures for the receipt, retention and treatment of complaints regarding accounting, internal accounting controls, auditing matters orpotential violations of law, and the confidential, anonymous submission by our employees of concerns regarding questionable accounting or auditingmatters or potential violations of law;40●ensuring that it receives an transition report from our independent auditor describing our internal control procedures and any steps taken to deal withmaterial control deficiencies and attesting to the auditor’s independence and describing all relationships between the auditor and us;●reviewing our annual audited financial statements and quarterly financial statements with management and our independent auditor;●reviewing and approving all proposed related party transactions;●reviewing our policies with respect to risk assessment and risk management;●meeting separately and periodically with management and our independent auditor; and●reporting regularly to our board of directors.Compensation CommitteeOur compensation committee assists the board of directors in reviewing and approving the compensation structure of our directors and executive officers,including all forms of compensation to be provided to our directors and executive officers. In addition, the compensation committee reviews share compensationarrangements for all of our other employees. Members of the compensation committee are not prohibited from direct involvement in determining their owncompensation. Our chief executive officer is not permitted to be present at any committee meeting during which his or her compensation is deliberated. Ourcompensation committee consists of Dennis Galgano and Jin Shi, with Mr. Shi serving as the chairman of the compensation committee. Our board of directors hasdetermined that each of these persons meet the definition of “independent director” under the applicable requirements of the NASDAQ Rules.Our compensation committee is responsible for, among other things:●reviewing and approving corporate goals and objectives relevant to the compensation of our chief executive officer, evaluating the performance of ourchief executive officer in light of those goals and objectives and setting the compensation level of our chief executive officer based on this evaluation;●reviewing and making recommendations to the board with respect to the compensation of our executives, incentive compensation and equitybasedplans that are subject to board approval; and●providing annual performance evaluations of the compensation committee.Nominating and Corporate Governance CommitteeOur nominating and corporate governance committee assists the board of directors in identifying and selecting or recommending individuals qualified tobecome our directors, developing and recommending corporate governance principles and overseeing the evaluation of our board of directors and management. Ournominating and corporate governance committee consists of Jiming Ha and Zhihao Xue, with Mr. Ha serving as the chairman of the nominating and corporategovernance committee. Our board of directors has determined that each of these persons meet the definition of “independent director” under the applicablerequirements of the NASDAQ Rules.Our nominating and corporate governance committee is responsible for, among other things:●selecting and recommending to our board nominees for election or reelection to our board, or for appointment to fill any vacancy;●reviewing annually with our board the current composition of the board of directors with regards to characteristics such as independence, age, skills,experience and availability of service to us;●selecting and recommending to our board the names of directors to serve as members of the audit committee and the compensation committee, as wellas the nominating and corporate governance committee itself; advising our board of directors periodically with regards to significant developments inthe law and practice of corporate governance as well as our compliance with applicable laws and regulations, and making recommendations to ourboard of directors on all matters of corporate governance and on any remedial action to be taken; and●monitoring compliance with our code of business conduct and ethics, including reviewing the adequacy and effectiveness of our procedures to ensureproper compliance.41Code of Business Conduct and EthicsOur board of directors adopted a code of business conduct and ethics applicable to our directors, officers and employees.Duties of DirectorsUnder British Virgin Islands law, our directors have a duty to act honestly, in good faith and with a view to our best interests. Our directors also have a dutyto exercise care, diligence and skills that a reasonably prudent person would exercise in comparable circumstances. In fulfilling their duty of care to us, our directorsmust ensure compliance with our memorandum of association and articles of association. We have the right to seek damages if a duty owed by our directors isbreached.The functions and powers of our board of directors include, among others:●appointing officers and determining the term of office of the officers;●authorizing the payment of donations to religious, charitable, public or other bodies, clubs, funds or associations as deemed advisable;●exercising the borrowing powers of the company and mortgaging the property of the company;●executing cheques, promissory notes and other negotiable instruments on behalf of the company; and●maintaining or registering a register of mortgages, charges or other encumbrances of the company.Remuneration and BorrowingThe directors may receive such remuneration as our board of directors may determine from time to time. Each director is entitled to be repaid or prepaid alltraveling, hotel and incidental expenses reasonably incurred or expected to be incurred in attending meetings of our board of directors or committees of our board ofdirectors or shareholder meetings or otherwise in connection with the discharge of his or her duties as a director. The compensation committee will assist thedirectors in reviewing and approving the compensation structure for the directors.Our board of directors may exercise all the powers of the company to borrow money and to mortgage or charge our undertakings and property or any partthereof, to issue debentures, debenture stock and other securities whenever money is borrowed or as security for any debt, liability or obligation of the company orof any third party.QualificationA director is not required to hold shares as a qualification to office.42Limitation on Liability and Other Indemnification MattersBritish Virgin Islands law does not limit the extent to which a company’s memorandum of association and articles of association may provide forindemnification of officers and directors, except to the extent any such provision may be held by the British Virgin Islands courts to be contrary to public policy,such as to provide indemnification against civil fraud or the consequences of committing a crime.Under our memorandum of association and articles of association, we may indemnify our directors, officers and liquidators against all expenses, includinglegal fees, and against all judgments, fines and amounts paid in settlement and reasonably incurred in connection with civil, criminal, administrative or investigativeproceedings to which they are party or are threatened to be made a party by reason of their acting as our director, officer or liquidator. To be entitled toindemnification, these persons must have acted honestly and in good faith with a view to the best interest of the company and, in the case of criminal proceedings,they must have had no reasonable cause to believe their conduct was unlawful.Compensation Committee Interlocks and Insider ParticipationNone of the members of our compensation committee is an officer or employee of our company. None of our executive officers currently serves, or in thepast year has served, as a member of the board of directors or compensation committee of any entity that has one or more executive officers serving on our board ofdirectors or compensation committee.Employment AgreementsOn August 19, 2018, the Company entered into an Employment Agreement (the “Song Agreement”) with Mr. Xuesong Song, to serve as the ChiefExecutive Officer of the Company for a fouryear term, subject to renewal. Under the terms of the Song Agreement, Mr. Song will receive no salary for his servicesbut will be eligible for an annual cash bonus in the Board’s sole discretion.On August 19, 2018, the Company entered into an Employment Agreement (the “Yu Agreement”) with Mr. Jie Yu, to serve as the Chief Financial Officer ofthe Company for a fouryear term, subject to renewal. Under the terms of the Yu Agreement, Mr. Yu will receive an annual salary of RMB700,000, and will be eligiblefor an annual cash bonus in the Board’s sole discretion.D. EMPLOYEES.As of September 30, 2018 and December 31, 2017, we had a total of 107 and 37 fulltime employees, including 48 and 13 in research and development, 9 and 2in sales and marketing and the rest in a variety of other divisions, respectively. All of our employees are fulltime employees. None of our employees is currentlyrepresented by a union and/or collective bargaining agreements. We believe that we have good relations with our employees and since our inception we have hadno history of work stoppages or union organizing campaigns.E. SHARE OWNERSHIP.The following table provides information as to the beneficial ownership of our ordinary shares as of October 10, 2018, by the persons listed. Beneficialownership of shares is determined under the rules of the SEC and generally includes any shares over which a person exercises sole or shared voting or investmentpower. For purposes of the following table, a person is deemed to have beneficial ownership of any ordinary shares if such person has the right to acquire suchshares within 60 days of October 10, 2018. For purposes of computing the percentage of outstanding shares held by each person, any shares that such person hasthe right to acquire within 60 days after of October 10, 2018 are deemed to be outstanding, but are not deemed to be outstanding for the purpose of computing thepercentage ownership of any other person. Except as otherwise noted, the persons named in the table have sole voting and investment power with respect to all ofthe ordinary shares beneficially owned by them. Unless otherwise indicated, the address of each person listed is c/o Luokung Technologies, LAB 32, SOHO 3Q, No9, Guanghua Road, Chaoyang District, Beijing, People’s Republic of China.43Percentage ownership in the following table is based on 199,317,558 ordinary shares outstanding on October 10, 2018.Number ofsharesPercent ofclassDirectors and named executive officersCharm Dragon International Limited (1)4,030,8822.03%Xuesong Song, Chairman, Chief Executive Officer and Director(2)38,156,43019.30%Kegang Peng, Vice President and Director (3)17,231,9558.71%Dennis Galgano, Director75,796*%Jin Shi, DirectorJiming Ha, DirectorZhihao Xu, Director (4)7,579,1843.83%Dongpu Zhang, President (5)2,321,7921.17%Chuang Tao, Director (6)1,221,996*%Directors and executive officers as a group (10 persons)66,587,15233.69%(1)Charm Dragon International Limited is a British Virgin Islands company controlled by Mr. Xuesong Song.(2)Consists of (i) 4,030,882 shares owned directly by Charm Dragon International Limited, a British Virgin Islands company and (ii) 22,624,793 shares owneddirectly by Bravo First Development Limited, a British Virgin Islands company. Mr. Xuesong Song is the controlling shareholder of Bravo First DevelopmentLimited. Mr. Xuesong Song is the sole director of Charm Dragon International Limited.(3)Consists of 17,231,955 shares owned directly by Plenty Prestige Enterprises Limited, a British Virgin Islands company. Mr. Kegang Peng is the sole director ofPlenty Prestige Enterprises Limited.(4)Consists of 7,579,184 shares directly owned by Geely Group Limited., a Chinese company. Mr. Zhihao Xu is the Chief Executive Officer of Geely GroupLimited.(5)Consists of 2,321,792 shares owned directly by Genoa Peak Limited, a British Virgin Islands company. Mr. Dongpu Zhang controls Genoa Peak Limited.(6)Consists of 1,221,996 shares owned directly by Globalearth Holdings Limited, a British Virgin Islands company. Mr. Chuang Tao controls Globalearth HoldingsLimited.*Represents less than 1% of shares outstandingITEM 7. MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS.A. MAJOR SHAREHOLDERSPlease refer to Item 6.E “Directors, Senior Management and Employees — Share Ownership.”To our knowledge, (A) we are not directly or indirectly owned or controlled by (i) another corporation or (ii) any foreign government and (B) there are noarrangements (including any announced or expected takeover bid), the operation of which may at a subsequent date result in a change in our control.The voting rights of our major shareholders do not differ from the voting rights of other holders of the same class of shares.44B. RELATED PARTY TRANSACTIONS. BUSINESS RELATIONSHIPS.Our subsidiaries, consolidated affiliated entities, and the subsidiaries of the consolidated affiliated entities have engaged, during the ordinary course ofbusiness, in a number of customary transactions with each other. All of these intercompany balances have been eliminated in consolidation.As of December 31, 2017, we had amounts due from related parties, C Media Limited and Ya Tuo Ji International Consultancy (Beijing) Limited, in theamounts of $11.8 million and $0.2 million, respectively. These amounts due from related parties are short term in nature, noninterest bearing, unsecured andrepayable on demand.As of December 31, 2017, we had amounts due to related parties, Mr. Xuesong Song, our chairman and chief executive officer, Thumb Beijing Branch andThumb Shenzhen Branch, in the amounts of $2.9 million, $0.6 million and $0.03 million, respectively. These amounts due to related parties are short term in nature,noninterest bearing, unsecured and payable on demand.We are party to a series of control agreements with Beijing Zhong Chuan Shi Xun. In addition, our chief executive officer, Mr. Xuesong Song, serves as andofficer of Beijing Zhong Chuan Shi Xun and is a shareholder of Beijing Zhong Chuan Shi Xun. The following table sets forth the relationship of Mr. Song withBeijing Zhong Chuan Shi Xun:NameRelationship withLuokung TechnologyRelationship withBeijing Zhong Chuan Shi XunPercentageOwnership Interest inBeijing Zhong Chuan Shi XunXuesong SongChief Executive OfficerChief Executive Officer61.83%C. INTERESTS OF EXPERTS AND COUNSEL.None.ITEM 8. FINANCIAL INFORMATION.A. CONSOLIDATED STATEMENTS AND OTHER FINANCIAL INFORMATION.See “Item 18. Financial Statements.”Legal ProceedingsTo our knowledge, other than as described below there are no material legal proceedings threatened against us. From time to time, we may be subject tovarious claims and legal actions arising in the ordinary course of business. Following the consummation of the AEA, we became successor in interest to the legalproceedings described below.Litigation with Shanghai Fusheng Weier Intelligent Control Technology Co., Ltd.On January 22, 2016, Zhong Chuan Rui You and Shanghai Fusheng Weier Intelligent Control Technology Co., Ltd. (“Fusheng Weier”) signed a contract forequipment of $1,652,842 (RMB10,800,000). Since Zhong Chuan Rui You did not make the payments of $1,126,381 (RMB7,360,000) on the due dates, Fusheng Weierfiled a lawsuit against Zhong Chuan Rui You in Shanghai Xuhui District People's Court on October 8, 2016. On March 9, 2017, Xuhui District People's Court issuedthe verdict requiring Zhong Chuan Rui You to pay the overdue debts. In August 2017, C Media Limited made the payment of $512,075 (RMB3,346,000). Theremaining balance has been accrued in accounts payable. The payment schedule for the remaining balance is being negotiated by the two parties. On February 5,2018, a hearing was held adding Zhong Chuan Shi Xun as a defendant. The Group plans to settle the remaining balance within one year.45Lawsuit with Gansu Jinlun Culture Media Co., Ltd.On August 22, 2014, Zhong Chuan Rui You and Gansu Jinlun Culture Media Co., Ltd. (“Gansu Jinlun”) signed a “Lanzhou Railway Bureau AirconditionedTrain WiFi Network System Advertising Operation Rights Agreement” for advertising on 72 trains of $1,467,880 (RMB9,604,633). Due to the dispute on theproject implementation, Zhong Chuan Rui You did not pay the advertising fee. On August 23, 2017, Gansu Jinlun filed a lawsuit with Gansu Intermediate People'sCourt. On December 19, 2017, Gansu Intermediate People's Court issued a verdict, ruling that Zhong Chuan Rui You settle the overdue advertising fee. Since only 18out of 72 trains have been installed with Wifi network system, Zhong Chuan Rui You disputed and appealed to the verdict. The next court trial date has not yet beendetermined. C Media and Gansu Jinlun are negotiating a potential settlement to resume the contract. According to the legal counsel, it is probable that the settlementwill amount to approximately $459,000 (RMB3,000,000); therefore, this amount has been accrued in accounts payable as at December 31, 2017.Litigation with Shenzhen Hua Xun Fang Zhou Technology Co., Ltd.On June 16, 2015, Zhong Chuan Rui You signed a cooperation agreement with Shenzhen Hua Xun Fang Zhou Technology Co., Ltd. (“Shenzhen Hua Xun”)and Xuesong Song, a major shareholder of C Media Limited. Pursuant to this agreement, Zhong Chuan Rui You procures equipment from Shenzhen Hua Xun.Xuesong Song acts as a joint liability guarantor for the entire debts of Zhong Chuan Rui You under this agreement. As Zhong Chuan Rui You did not make thepayments on the due dates, Shenzhen Hua Xun filed a lawsuit with Shenzhen Baoan District People's Court on May 31, 2016. On November 1, 2016, Zhong ChuanRui You, Xuesong Song and Shenzhen Hua Xun reached a settlement in Shenzhen Baoan District People's Court to settle $1,735,389 (RMB11,355,000) in fourinstalments. On December 30, 2017, the debt was assigned to C Media Limited.Dividend PolicyWe currently intend to retain all of our available funds and future earnings for use in the operation and expansion of our business and do not anticipatepaying cash dividends in the foreseeable future. Under the terms of our Amended and Restated Memorandum and Articles of Association the declaration andpayment of any dividends in the future will be determined by our board of directors, in its discretion, and will depend on a number of factors, including our earnings,capital requirements and overall financial condition and our ability to receive dividends from our subsidiaries. If we pay any dividends, we will pay our ADS holders’dividends with respect to their underlying shares to the same extent as holders of our ordinary shares, subject to the terms of the deposit agreement, including thefees and expenses payable thereunder. Cash dividends on our ordinary shares, if any, will be paid in U.S. dollars.Our ability to receive dividends from our subsidiaries may limit our ability to pay dividends on our ordinary shares. See Risk Factors – Risks Related toDoing Business in China – Our holding company structure may limit the payment of dividends” and “Item 10. Additional Information – D. Exchange Controls –Dividend Distribution”.B. SIGNIFICANT CHANGES.N/AITEM 9. THE OFFER AND LISTINGA. OFFER AND LISTING DETAILS.Markets and Share Price HistoryOur ordinary shares are not currently listed on any trading market. Our American Depository Shares (“ADSs”) were voluntarily delisted from the NASDAQCapital Market on September 19, 2018. We have applied to NASDAQ for the listing of our ordinary shares on the NASDAQ Capital Market and received an approvalfor listing of Ordinary Shares on August 6, 2018, and as of the date of this transition report, that application and approval are currently under review.46The table below sets forth the high and low reported sales prices in dollars of our ordinary shares, which are represented by ADSs, as reported byNASDAQ in the periods as indicated:ADSHighLowAnnual Highs and Lows (as of the fiscal year end 09/30 for the five most recent full financial years)*20175.592.67201610.21.62Quarterly Highs and Lows (for the two most recent full financial years and any subsequent period, based on calendarquarter end)*2018Third Quarter8.006.30Second Quarter8.824.25First Quarter6.403.702017Fourth Quarter5.592.91Third Quarter3.992.67Second Quarter4.063.07First Quarter5.152.832016Fourth Quarter6.594.20Third Quarter10.201.62Second Quarter3.101.97First Quarter3.602.12Monthly Highs and Lows (for the most recent six months)September 20188.006.41August 20187.706.63July 20187.506.30June 20188.827.55May 20187.805.92April 20187.454.25*The Company effected a 1for10 reverse stock split of its ordinary shares on November 6, 2012 (the “Reverse Split”). The ratio between each AmericanDepositary Share (“ADS”) and its underlying ordinary share postReverse Split remains the same, namely, one ADR remains to represent one ordinary sharepost the Reverse Split. The price listed here after November 6, 2012 reflected the effect from the Reverse Split.B. PLAN OF DISTRIBUTION.Not Applicable.C. MARKETS.Our ordinary shares are not currently listed on any trading market. Our ADSs were voluntarily delisted from the NASDAQ Capital Market on September 19,2018. We have applied to NASDAQ for the listing of our ordinary shares on the NASDAQ Capital Market and received an approval for listing of Ordinary Shares onAugust 6, 2018, and as of the date of this transition report, that application and approval are currently under review.47D. SELLING SHAREHOLDERS.Not applicable.E. DILUTION.Not applicable.F. EXPENSES OF THE ISSUE.Not applicable.ITEM 10. ADDITIONAL INFORMATION.A. SHARE CAPITALNot applicable.B. MEMORANDUM AND ARTICLES OF ASSOCIATIONWe are a British Virgin Islands company incorporated with limited liability and our affairs are governed by the provisions of our memorandum of associationand articles of association, as amended and restated from time to time, and by the provisions of applicable British Virgin Islands law.Our memorandum of association and articles of association authorize the issuance of up to 251,000,000 shares, which are designated into (i) 250,000,000 ofordinary shares of the Company (“Ordinary Shares”), and (ii) 1,000,000 preferred shares of the Company (“Preferred Shares”), in each case with the rights,preferences and privileges as set out in the memorandum and articles of association of the Company.Please see below for a description of our ADSs under “Item 12. Description of Securities Other Than Equity Securities – D. American Depository Shares.”The following is a summary of the material provisions of our ordinary shares and our memorandum of association and articles of association.Ordinary SharesAll of our issued and outstanding ordinary shares are fully paid and nonassessable. Holders of our ordinary shares who are nonresidents of the BritishVirgin Islands may freely hold and vote their shares.Subject to the memorandum and articles of association (and, for greater clarity, without prejudice to any special rights conferred thereby on the holders ofany other shares), an Ordinary Share of the Company confers on the holder:(a)the right to one vote per Ordinary Share at a meeting of the members or on any resolution of members;(b)the right to an equal share in any distribution paid by the Company; and(c)the right to an equal share in the distribution of the surplus assets of the Company on a winding up;48Subject to the memorandum and articles of association (and, for greater clarity, without prejudice to any special rights conferred thereby on the holders ofany other shares), a Preferred Share of the Company confers on the holder:(a)the right to 399 votes per Preferred Share at a meeting of the members or on any resolution of members;(b)the right to an equal share in any distribution paid by the Company;(c)the right to an equal share in the distribution of the surplus assets of the Company on a winding up;(d)be freely transferable, in whole or in part, by Mr. Xuesong Song to any third party through one or more Private Transactions, subject toApplicable Law; and(e)be freely transferable, in whole or in part, by Mr. Xuesong Song to any third party through one or more Public Transactions, subject to ApplicableLaw and Automatic Conversion of such Preferred Share(s) into Ordinary Share(s).Each Preferred Share shall be automatically converted at any time after issue and without the payment of any additional sum into an equal number of fullypaid Ordinary Shares upon the conclusion of any transfer by Mr. Xuesong Song to any third party through one or more Public Transactions.Limitation on Liability and Indemnification MattersUnder British Virgin Islands law, each of our directors and officers, in performing his or her functions, is required to act honestly and in good faith with aview to our best interests and exercise the care, diligence and skill that a reasonably prudent person would exercise in comparable circumstances. Our memorandumof association and articles of association provide that, to the fullest extent permitted by British Virgin Islands law or any other applicable laws, our directors will notbe personally liable to us or our shareholders for any acts or omissions in the performance of their duties. Such limitation of liability does not affect the availabilityof equitable remedies such as injunctive relief or rescission. These provisions will not limit the liability of directors under United States federal securities laws.We may indemnify any of our directors or anyone serving at our request as a director of another entity against all expenses, including legal fees, andagainst all judgments, fines and amounts paid in settlement and reasonably incurred in connection with legal, administrative or investigative proceedings. We mayonly indemnify a director if he or she acted honestly and in good faith with the view to our best interests and, in the case of criminal proceedings, the director hadno reasonable cause to believe that his or her conduct was unlawful. The decision of our board of directors as to whether the director acted honestly and in goodfaith with a view to our best interests and as to whether the director had no reasonable cause to believe that his or her conduct was unlawful, is in the absence offraud sufficient for the purposes of indemnification, unless a question of law is involved. The termination of any proceedings by any judgment, order, settlement,conviction or the entry of no plea does not, by itself, create a presumption that a director did not act honestly and in good faith and with a view to our best interestsor that the director had reasonable cause to believe that his or her conduct was unlawful. If a director to be indemnified has been successful in defense of anyproceedings referred to above, the director is entitled to be indemnified against all expenses, including legal fees, and against all judgments, fines and amounts paidin settlement and reasonably incurred by the director or officer in connection with the proceedings.We may purchase and maintain insurance in relation to any of our directors or officers against any liability asserted against the directors or officers andincurred by the directors or officers in that capacity, whether or not we have or would have had the power to indemnify the directors or officers against the liabilityas provided in our memorandum of association and articles of association.Insofar as indemnification for liabilities arising under the Securities Act may be permitted for our directors or officers under the foregoing provisions, wehave been informed that in the opinion of the Securities and Exchange Commission, such indemnification is against public policy as expressed in the Securities Actand is therefore unenforceable as a matter of United States law.49Differences in Corporate LawWe were incorporated under, and are governed by, the laws of the British Virgin Islands. The corporate statutes of the State of Delaware and the BritishVirgin Islands are similar, and the flexibility available under British Virgin Islands law has enabled us to adopt memorandum of association and articles of associationthat will provide shareholders with rights that do not vary in any material respect from those they would enjoy if we were incorporated under the Delaware GeneralCorporation Law, or Delaware corporate law. Set forth below is a summary of some of the differences between provisions of the BVI Act applicable to us and thelaws application to companies incorporated in Delaware and their shareholders.Director’s Fiduciary DutiesUnder Delaware corporate law, a director of a Delaware corporation has a fiduciary duty to the corporation and its stockholders. This duty has twocomponents: the duty of care and the duty of loyalty. The duty of care requires that a director act in good faith, with the care that an ordinarily prudent personwould exercise under similar circumstances. Under this duty, a director must inform himself of, and disclose to stockholders, all material information reasonablyavailable regarding a significant transaction. The duty of loyalty requires that a director act in a manner he reasonably believes to be in the best interests of thecorporation. He must not use his corporate position for personal gain or advantage. This duty prohibits selfdealing by a director and mandates that the bestinterest of the corporation and its stockholders take precedence over any interest possessed by a director, officer or controlling stockholder and not shared by thestockholders generally. In general, actions of a director are presumed to have been made on an informed basis, in good faith and in the honest belief that the actiontaken was in the best interests of the corporation. However, this presumption may be rebutted by evidence of a breach of one of the fiduciary duties. Should suchevidence be presented concerning a transaction by a director, a director must prove the procedural fairness of the transaction, and that the transaction was of fairvalue to the corporation.British Virgin Islands law provides that every director of a British Virgin Islands company in exercising his powers or performing his duties shall acthonestly and in good faith and in what the director believes to be in the best interests of the company. Additionally, the director shall exercise the care, diligence andskill that a reasonable director would exercise in the same circumstances taking into account the nature of the company, the nature of the decision and the positionof the director and his responsibilities. In addition, British Virgin Islands law provides that a director shall exercise his powers as a director for a proper purpose andshall not act, or agree to the company acting, in a manner that contravenes British Virgin Islands law or the memorandum association or articles of association of thecompany.Amendment of Governing DocumentsUnder Delaware corporate law, with very limited exceptions, a vote of the stockholders is required to amend the certificate of incorporation. Under BritishVirgin Islands law and our memorandum of association and articles of association, (i) our shareholders may amend our memorandum of association and articles ofassociation by a resolution of shareholders, or (ii) our board of directors may amend our memorandum of association and articles of association by a resolution ofdirectors without a requirement for a resolution of shareholders so long as the amendment does not:●restrict the rights of the shareholders to amend the memorandum of association and articles of association;●change the percentage of shareholders required to pass a resolution of shareholders to amend the memorandum of association and articles ofassociation;●amend the memorandum of association and articles of association in circumstances where the memorandum of association and articles ofassociation cannot be amended by the shareholders; or●amend the provisions of memorandum of association or the articles of association pertaining to “rights attaching to shares,” “rights not varied bythe issue of the shares pari passu,” “variation of rights” and “amendment of memorandum and articles”.50Written Consent of DirectorsUnder Delaware corporate law, directors may act by written consent only on the basis of a unanimous vote. Under British Virgin Islands law, directors’consents need only a majority of directors signing to take effect.Written Consent of ShareholdersUnder Delaware corporate law, unless otherwise provided in the certificate of incorporation, any action to be taken at any annual or special meeting ofstockholders of a corporation, may be taken by written consent of the holders of outstanding stock having not less than the minimum number of votes that wouldbe necessary to take such action at a meeting. As permitted by British Virgin Islands law, shareholders’ consents need only a majority of shareholders signing totake effect. Our memorandum of association and articles of association provide that shareholders may approve corporate matters by way of a resolution consentedto at a meeting of shareholders or in writing by a majority of shareholders entitled to vote thereon.Shareholder ProposalsUnder Delaware corporate law, a shareholder has the right to put any proposal before the annual meeting of shareholders, provided it complies with thenotice provisions in the governing documents. A special meeting may be called by the board of directors or any other person authorized to do so in the governingdocuments, but shareholders may be precluded from calling special meetings. British Virgin Islands law and our memorandum of association and articles ofassociation provide that our directors shall call a meeting of the shareholders if requested in writing to do so by shareholders entitled to exercise at least 30% of thevoting rights in respect of the matter for which the meeting is requested.Sale of AssetsUnder Delaware corporate law, a vote of the stockholders is required to approve the sale of assets only when all or substantially all assets are being sold. Inthe British Virgin Islands, shareholder approval is required when more than 50% of the company’s total assets by value are being disposed of or sold.Dissolution; Winding UpUnder Delaware corporate law, unless the board of directors approves the proposal to dissolve, dissolution must be approved by shareholders holding100% of the total voting power of the corporation. Only if the dissolution is initiated by the board of directors may it be approved by a simple majority of thecorporation’s outstanding shares. Delaware corporate law allows a Delaware corporation to include in its certificate of incorporation a supermajority votingrequirement in connection with dissolutions initiated by the board. As permitted by British Virgin Islands law and our memorandum of association and articles ofassociation, we may be voluntarily liquidated under Part XII of the BVI Act by resolution of directors and resolution of shareholders if we have no liabilities and weare able to pay our debts as they fall due.Redemption of SharesUnder Delaware corporate law, any stock may be made subject to redemption by the corporation at its option or at the option of the holders of such stockprovided there remains outstanding shares with full voting power. Such stock may be made redeemable for cash, property or rights, as specified in the certificate ofincorporation or in the resolution of the board of directors providing for the issue of such stock. As permitted by British Virgin Islands law, and our memorandum ofassociation and articles of association, shares may be repurchased, redeemed or otherwise acquired by us. Our directors must determine that immediately followingthe redemption or repurchase we will be able to satisfy our debts as they fall due and the value of our assets exceeds our liabilities.51Variation of Rights of SharesUnder Delaware corporate law, a corporation may vary the rights of a class of shares with the approval of a majority of the outstanding shares of suchclass, unless the certificate of incorporation provides otherwise. As permitted by British Virgin Islands law, and our memorandum of association and articles ofassociation, if our share capital is divided into more than one class of shares, we may vary the rights attached to any class only with the consent in writing ofholders of not less than threefourths of the issued shares of that class and holders of not less than threefourths of the issued shares of any other class of shareswhich may be affected by the variation.Removal of DirectorsUnder Delaware corporate law, a director of a corporation with a classified board may be removed only for cause with the approval of a majority of theoutstanding shares entitled to vote, unless the certificate provides otherwise. As permitted by British Virgin Islands law and our memorandum of association andarticles of association, directors may be removed by resolution of directors or resolution of shareholders.MergersUnder the BVI Act, two or more companies may merge or consolidate in accordance with the statutory provisions. A merger means the merging of two ormore constituent companies into one of the constituent companies, and a consolidation means the uniting of two or more constituent companies into a newcompany. In order to merger or consolidate, the directors of each constituent company must approve a written plan of merger or consolidation which must beauthorized by a resolution of shareholders.Shareholders not otherwise entitled to vote on the merger or consolidation may still acquire the right to vote if the plan of merger or consolidation containsany provision which, if proposed as an amendment to the memorandum association or articles of association, would entitle them to vote as a class or series on theproposed amendment. In any event, all shareholders must be given a copy of the plan of merger or consolidation irrespective of whether they are entitled to vote atthe meeting or consent to the written resolution to approve the plan of merger or consolidation.Inspection of Books and RecordsUnder Delaware corporate law, any shareholder of a corporation may for any proper purpose inspect or make copies of the corporation’s stock ledger, list ofshareholders and other books and records. Holders of our shares have no general right under British Virgin Islands law to inspect or obtain copies of our list ofshareholders or our corporate records. However, we will provide holders of our shares with annual audited financial statements. See “Where You Can FindAdditional Information.”Conflict of InterestThe BVI Act provides that a director shall, after becoming aware that he is interested in a transaction entered into or to be entered into by the company,disclose that interest to the board of directors of the company. The failure of a director to disclose that interest does not affect the validity of a transaction enteredinto by the director or the company, so long as the director’s interest was disclosed to the board prior to the company’s entry into the transaction or was notrequired to be disclosed (for example where the transaction is between the company and the director himself or is otherwise in the ordinary course of business andon usual terms and conditions). As permitted by British Virgin Islands law and our memorandum of association and articles of association, a director interested in aparticular transaction may vote on it, attend meetings at which it is considered, and sign documents on our behalf which relate to the transaction.52Transactions with Interested ShareholdersDelaware corporate law contains a business combination statute applicable to Delaware public corporations whereby, unless the corporation hasspecifically elected not to be governed by such statute by amendment to its certificate of incorporation, it is prohibited from engaging in certain businesscombinations with an “interested shareholder” for three years following the date that such person becomes an interested shareholder. An interested shareholdergenerally is a person or group who or that owns or owned 15% or more of the target’s outstanding voting stock within the past three years. This has the effect oflimiting the ability of a potential acquirer to make a twotiered bid for the target in which all shareholders would not be treated equally. The statute does not apply if,among other things, prior to the date on which such shareholder becomes an interested shareholder, the board of directors approves either the businesscombination or the transaction that resulted in the person becoming an interested shareholder. This encourages any potential acquirer of a Delaware publiccorporation to negotiate the terms of any acquisition transaction with the target’s board of directors.British Virgin Islands law has no comparable provision. As a result, we cannot avail ourselves of the types of protections afforded by the Delawarebusiness combination statute. However, although British Virgin Islands law does not regulate transactions between a company and its significant shareholders, itdoes provide that such transactions must be entered into bona fide in the best interests of the company and not with the effect of constituting a fraud on theminority shareholders.Independent DirectorsThere are no provisions under Delaware corporate law or under the BVI Act that require a majority of our directors to be independent.Cumulative VotingUnder Delaware corporate law, cumulative voting for elections of directors is not permitted unless the company’s certificate of incorporation specificallyprovides for it. Cumulative voting potentially facilitates the representation of minority shareholders on a board of directors since it permits the minority shareholderto cast all the votes to which the shareholder is entitled on a single director, which increases the shareholder’s voting power with respect to electing such director.There are no prohibitions to cumulative voting under the laws of the British Virgin Islands, but our memorandum of association and articles of association do notprovide for cumulative votingAntitakeover Provisions in Our Memorandum of association and articles of associationSome provisions of our memorandum of association and articles of association may discourage, delay or prevent a change in control of our company ormanagement that shareholders may consider favorable, including provisions that authorize our board of directors to issue preference shares in one or more seriesand to designate the price, rights, preferences, privileges and restrictions of such preference shares.C. MATERIAL CONTRACTS.On January 25, 2018, the Company executed an Asset Exchange Agreement (“AEA”) with C Media Limited, a corporation organized under the laws of theCayman Islands (“C Media”), whereby the Company agreed to purchase all the capital stock and equity interests of LK Technology Ltd, together with its whollyowned subsidiaries MMB Limited and Mobile Media (China) Limited and all respective subsidiaries from C Media in exchange for (i) 185,412,599 ordinary shares ofthe Company, par value $0.01 per share (“Ordinary Shares”), (ii) 1,000,000 preferred shares of Kingtone (“Preferred Shares”) and (iii) all issued and outstandingcapital stock or equity interests of the Company’s subsidiary, Topsky InfoTech Holdings Pte Ltd., and its whollyowned subsidiary Xi’an Softech Co., Ltd.,including all entities effectively controlled by Xi’an Softech Co., Ltd. through contractual arrangements and variable business entities.To consummate the contemplated transactions described above, the Company obtained shareholder consent at a special meeting held on May 20, 2018, (i)to authorize 1,000,000 Preferred Shares, (ii) to authorize additional Ordinary Shares so that total authorized Ordinary Shares is equal to 250,000,000 shares, (iii) to listsuch Ordinary Shares on NASDAQ, and (iv) to approve the transactions contemplated in the Asset Exchange Agreement. Additionally, NASDAQ needed toapprove the contemplated transactions prior to consummation thereof. C Media had the right to terminate the AEA if the closing had not occurred (other thanthrough the failure of C Media to comply fully with its obligations under the AEA) on or before July 31, 2018. The transactions contemplated by the AEA wereconsummated on August 17, 2018.53On January 25, 2018, five shareholders of the Company including its largest shareholder and its Chief Executive Officer executed a Securities PurchaseAgreement, whereby such shareholders agreed to sell a total of 617,988 Ordinary Shares and 282,694 American Depository Shares of the Company to Redstone YYLManagement Limited, a company incorporated in the British Virgin Islands, in exchange for an aggregate purchase price of $1,897,860.09.On August 25, 2018, LK Technology entered into a Stock Purchase Agreement (the “Agreement”) with the shareholders (“Shareholders”) of SuperengineHoldings Limited, a limited liability company organized under the laws of the British Virgin Islands (the “Superengine”), pursuant to which LK Technology acquiredall of the issued and outstanding capital stock of Superengine for an aggregate purchase price of US$60 million (the “Purchase Price”), which are paid by theissuance of our Ordinary Shares in an amount equal to the quotient of (x) the Purchase Price divided by (y) the average of the closing prices of the Ordinary Shareson the NASDAQ Capital Market over the 12 months period preceding July 31, 2018. We are a party to the Agreement in connection with the issuance of theOrdinary Shares and certain other limited purposes.D. EXCHANGE CONTROLS.This section sets forth a summary of the most significant regulations or requirements that affect our business activities in China or our shareholders’ rightto receive dividends and other distributions from us.Regulations on Internet Content ProvidersThe Administrative Measures on Internet Information Services, or the Internet Content Measures, which was promulgated by the State Council onSeptember 25, 2000 and amended on January 8, 2011, set out guidelines on the provision of internet information services. The Internet Content Measures specifiesthat internet information services regarding news, publications, education, medical and health care, pharmacy and medical appliances, among other things, arerequired to be examined, approved and regulated by the relevant authorities. Internet information providers are prohibited from providing services beyond thoseincluded in the scope of their licenses or filings. Furthermore, the Internet Content Measures specifies a list of prohibited content. Internet information providers areprohibited from producing, copying, publishing or distributing information that is humiliating or defamatory to others or that infringes the legal rights of others.Internet information providers that violate such prohibition may face criminal charges or administrative sanctions. Internet information providers must monitor andcontrol the information posted on their websites. If any prohibited content is found, they must remove the content immediately, keep a record of such content andreport to the relevant authorities.The Internet Content Measures classifies internet information services into commercial internet information services and noncommercial internetinformation services. Commercial internet information services refer to services that provide information or services to internet users with charge. A provider ofcommercial internet information services must obtain an ICP License.Regulations on Internet Audiovideo Program ServicesOn December 20, 2007, the MII and the State Administration of Press, Publication, Radio, Film and Television, or the SAPPRFT, jointly issued theAdministrative Provisions for the Internet AudioVideo Program Service, or the Audiovideo Program Provisions, which came into effect on January 31, 2008 andwas amended on August 28, 2015. The Audiovideo Program Provisions defines “internet audiovideo program services” as producing, editing and integrating ofaudiovideo programs, supplying audiovideo programs to the public via the internet, and providing audiovideo programs uploading and transmission services to athird party. Entities providing internet audiovideo programs services must obtain an internet audiovideo program transmission license. Applicants for such licensesshall be stateowned or statecontrolled entities unless an internet audiovideo program transmission license has been obtained prior to the effectiveness of theAudiovideo Program Provisions in accordance with the thenineffect laws and regulations. In addition, foreigninvested enterprises are not allowed to engage inthe abovementioned services. According to the Audiovideo Program Provisions and other relevant laws and regulations, audiovideo programs provided by theentities supplying Internet audiovideo program services shall not contain any illegal content or other content prohibited by the laws and regulations, such as anycontent against the basic principles in the PRC Constitution, any content that damages the sovereignty of the country or national security, and any content thatdisturbs social order or undermine social stability. An audiovideo program that has already been broadcast shall be retained in full for at least 60 days. Movies,television programs and other media content used as Internet audiovideo programs shall comply with relevant administrative regulations on programs broadcaststhrough radio, movie and television channels. Entities providing services related to Internet audiovideo programs shall immediately delete the audiovideoprograms violating laws and regulations, keep relevant records, report relevant authorities and implement other regulatory requirements.54The Categories of the Internet AudioVideo Program Services, or the Audiovideo Program Categories, promulgated by SAPPRFT on March 10, 2017,classifies internet audio/video programs into four categories: (I) Category I internet audio/video program service, which is carried out with a form of radio station ortelevision station; (II) Category II internet audio/video program service, including (a) rebroadcasting service of current political news audio/video programs; (b)hosting, interviewing, reporting and commenting service of arts, entertainment, technology, finance and economics, sports, education and other specializedaudio/video programs; (c) producing (interviewing not included) and broadcasting service of arts, entertainment, technology, finance and economics, sports,education and other specialized audio/video programs; (d) producing and broadcasting service of internet films/dramas; (e) aggregating and broadcasting service offilms, television dramas and cartoons; (f) aggregating and broadcasting service of arts, entertainment, technology, finance and economics, sports, education andother specialized audio/video programs; and (g) live audio/video broadcasting service of cultural activities of common social organizations, sport events or otherorganization activities; and (III) Category III internet audio/video program service, including (a) aggregating service of online audio/video contents, and (b) rebroadcasting service of the audio/video programs uploaded by internet users; and (IV) Category III internet audio/video program service, including (a) rebroadcasting of the radio/television program channels; and (b) rebroadcasting of internet audio/video program channels.On May 27, 2016, the SAPPRFT issued the Notice on Relevant Issues concerning Implementing the Approval Works of Upgrading Mobile Internet AudioVideo Program Service, or the Mobile AudioVideo Program Notice. The Mobile AudioVideo Program Notice provides that the mobile Internet audiovideo programservices shall be deemed Internet audiovideo program service. Entities which have obtained the approvals to provide the Internet audiovideo program servicesmay use mobile WAP websites or mobile applications to provide audiovideo program services. Entities with regulatory approvals may operate mobile applicationsto provide the audiovideo program services The types of the programs shall be within the permitted scope as provided in the licenses and such mobile applicationsshall be filed with the SAPPRFT.Regulations on Production and Operation of Radio/Television ProgramsOn July 19, 2004, the SAPPRFT promulgated the Administrative Measures on the Production and Operation of Radio and Television Programs, or the Radioand Television Program Production Measures, which came into effect on August 20, 2004 and was amended on August 28, 2015. The Radio and Television ProgramProduction Measures provides that any business that produces or operates radio or television programs must first obtain a Radio and Television ProgramProduction and Operation Permit. Entities holding such permits shall conduct their business within the permitted scope as provided in their permits. In addition,foreigninvested enterprises are not allowed to engage in the abovementioned services.Regulations on Online Advertising ServicesOn April 24, 2015, the Standing Committee of the National People’s Congress enacted the Advertising Law of the People’s Republic of China, or the NewAdvertising Law, effective on September 1, 2015. The New Advertising Law increases the potential legal liability of advertising services providers and strengthensregulations of false advertising. On July 4, 2016, the State Administration for Industry and Commerce, or the SAIC, issued the Interim Measures of theAdministration of Online Advertising, or the SAIC Interim Measures, effective on September 1, 2016. The New Advertising Law and the SAIC Interim Measuresrequire that online advertisements may not affect users’ normal internet use and internet popup ads must display a “close” sign prominently and ensure onekeyclosing of the popup windows. The SAIC Interim Measures provides that all online advertisements must be marked “Advertisement” so that viewers can easilyidentify them as such. Moreover, the SAIC Interim Measures treats paid search results as advertisements that are subject to PRC advertisement laws, and requiresthat paid search results be conspicuously identified on search result pages as advertisements. The New Advertising Law and SAIC Interim Measures require us toconduct more stringent examination and monitoring of our advertisers and the content of their advertisements.55Regulations on Online GamesIn September 2009, the GAPP (currently known as the SAPPRFT), together with the National Copyright Administration, and the National Office ofCombating Pornography and Illegal Publications jointly issued the Notice on Further Strengthening on the Administration of Preexamination and Approval ofOnline Game and the Examination and Approval of Imported Online Game, or the Circular 13. The Circular 13 states that foreign investors are not permitted to investin online game operating businesses in the PRC via wholly foreignowned entities, Sinoforeign equity joint ventures or cooperative joint ventures or to exercisecontrol over or participate in the operation of domestic online game businesses through indirect means, such as other joint venture companies or contractual ortechnical arrangements. If the our contractual arrangements were deemed under the Circular 13 to be an “indirect means” for foreign investors to exercise controlover or participate in the operation of a domestic online game business, our contractual arrangements might be challenged by the SAPPRFT. We are not aware ofany online game companies which use the same or similar contractual arrangements having been challenged by the SAPPRFT as using those contractualarrangements as an “indirect means” for foreign investors to exercise control over or participate in the operation of a domestic online game business or having beenpenalized or ordered to terminate operations since the Circular 13 became effective. However it is unclear whether and how the Circular 13 might be interpreted orimplemented in the future. See “Risk Factors—If the PRC government finds that the agreements that establish the structure for operating certain of our operations inChina do not comply with PRC regulations relating to the relevant industries, or if these regulations or the interpretation of existing regulations change in the future,we could be subject to severe penalties or be forced to relinquish our interests in those operations.”The Interim Measures for the Administration of Online Games, or the Online Game Measures, issued by the MOC, which took effect on August 1, 2010 andamended on December 15, 2017, regulates a broad range of activities related to the online games business, including the development, production and operation ofonline games, the issuance of virtual currencies used for online games, and the provision of virtual currency trading services. The Online Game Measures providesthat any entity that is engaged in online game operations must obtain an Network Cultural Business Permit, and require the content of an imported online game to beexamined and approved by the MOC prior to the game’s launch and require a domestic online game to be filed with the MOC within 30 days after its launch. TheNotice of the Ministry of Culture on the Implementation of the Interim Measures for the Administration of Online Games, which was issued by the MOC on July 29,2010 to implement the Online Game Measures, (i) requires online game operators to protect the interests of online game users and specifies that certain terms thatmust be included in service agreements between online game operators and the users of their online games, (ii) requires content review of imported online gamesand filing procedures for domestic online games, (iii) emphasizes the protection of minors playing online games, and (iv) requests online game operators to promoterealname registration by their game users.Regulations on Information Security, Censorship and PrivacyThe Standing Committee of the National People’s Congress, China’s national legislative body, enacted the Decisions on the Maintenance of InternetSecurity on December 28, 2000 that may subject persons to criminal liabilities in China for any attempt to use the internet to: (i) gain improper entry to a computer orsystem of strategic importance; (ii) disseminate politically disruptive information; (iii) leak state secrets; (iv) spread false commercial information or (v) infringe uponintellectual property rights. In 1997, the Ministry of Public Security issued the Administration Measures on the Security Protection of Computer InformationNetwork with International Connections which prohibits using the internet to leak state secrets or to spread socially destabilizing materials. If an ICP license holderviolates these measures, the PRC government may revoke its ICP license and shut down its websites. Pursuant to the Ninth Amendment to the Criminal Law issuedby the Standing Committee of the National People’s Congress on August 29, 2015, effective on November 1, 2015, any ICP provider that fails to fulfill the obligationsrelated to internet information security as required by applicable laws and refuses to take corrective measures, will be subject to criminal liability for (i) any largescale dissemination of illegal information; (ii) any severe effect due to the leakage of users’ personal information; (iii) any serious loss of evidence of criminalactivities; or (iv) other severe situations, and any individual or entity that (i) sells or provides personal information to others unlawfully or (ii) steals or illegallyobtains any personal information will be subject to criminal liability in severe situations.56The Cybersecurity Law of the PRC, or the Cybersecurity Law, which was promulgated on November 7, 2016 by the Standing Committee of the NationalPeople’s Congress and came into effect on June 1, 2017, provides that network operators shall meet their cyber security obligations and shall take technicalmeasures and other necessary measures to protect the safety and stability of their networks. Under the Cybersecurity Law, network operators are subject to varioussecurity protectionrelated obligations, including: (i) network operators shall comply with certain obligations regarding maintenance of the security of internetsystems; (ii) network operators shall verify users’ identities before signing agreements or providing certain services such as information publishing or realtimecommunication services; (iii) when collecting or using personal information, network operators shall clearly indicate the purposes, methods and scope of theinformation collection, the use of information collection, and obtain the consent of those from whom the information is collected; (iv) network operators shall strictlypreserve the privacy of user information they collect, and establish and maintain systems to protect user privacy; (v) network operators shall strengthenmanagement of information published by users, and when they discover information prohibited by laws and regulations from publication or dissemination, theyshall immediately stop dissemination of that information, including taking measures such as deleting the information, preventing the information from spreading,saving relevant records, and reporting to the relevant governmental agencies.Regulations on Intellectual Property RightsRegulations on CopyrightThe Copyright Law of the PRC, or the Copyright Law, which took effect on June 1, 1991 and was amended in 2001 and in 2010, provides that Chinesecitizens, legal persons, or other organizations shall, whether published or not, own copyright in their copyrightable works, which include, among others, works ofliterature, art, natural science, social science, engineering technology and computer software. Copyright owners enjoy certain legal rights, including right ofpublication, right of authorship and right of reproduction. The Copyright Law as revised in 2010 extends copyright protection to Internet activities, productsdisseminated over the Internet and software products. In addition, Copyright Law provides for a voluntary registration system administered by the China CopyrightProtection Center, or the CPCC. According to the Copyright Law, an infringer of the copyrights shall be subject to various civil liabilities, which include ceasinginfringement activities, apologizing to the copyright owners and compensating the loss of copyright owner. Infringers of copyright may also subject to fines and/oradministrative or criminal liabilities in severe situations.The Computer Software Copyright Registration Measures, or the Software Copyright Measures, promulgated by the State Council on December 20, 2001and amended on January 30, 2013, regulates registrations of software copyright, exclusive licensing contracts for software copyright and assignment agreements.The National Copyright Administration, or the NCA administers software copyright registration and the CPCC, is designated as the software registration authority.The CPCC shall grant registration certificates to the Computer Software Copyrights applicants which meet the requirements of both the Software CopyrightMeasures and the Computer Software Protection Regulations (Revised in 2013).The Provisions of the Supreme People’s Court on Certain Issues Related to the Application of Law in the Trial of Civil Cases Involving Disputes onInfringement of the Information Network Dissemination Rights specifies that disseminating works, performances or audiovideo products by the internet users orthe internet service providers via the internet without the permission of the copyright owners shall be deemed to have infringed the right of dissemination of thecopyright owner.57The Measures for Administrative Protection of Copyright Related to Internet, which was jointly promulgated by the NCA and the MIIT on April 29, 2005and became effective on May 30, 2005, provides that upon receipt of an infringement notice from a legitimate copyright holder, an ICP operator must take remedialactions immediately by removing or disabling access to the infringing content. If an ICP operator knowingly transmits infringing content or fails to take remedialactions after receipt of a notice of infringement that harms public interest, the ICP operator could be subject to administrative penalties, including an order to ceaseinfringing activities, confiscation by the authorities of all income derived from the infringement activities, or payment of fines.On May 18, 2006, the State Council promulgated the Regulations on the Protection of the Right to Network Dissemination of Information (as amended in2013). Under these regulations, an owner of the network dissemination rights with respect to written works or audio or video recordings who believes thatinformation storage, search or link services provided by an Internet service provider infringe his or her rights may require that the Internet service provider delete, ordisconnect the links to, such works or recordings.Patent LawsAccording to the Patent Law of the PRC (Revised in 2008), the State Intellectual Property Office is responsible for administering patent law in the PRC. Thepatent administration departments of provincial, autonomous region or municipal governments are responsible for administering patent law within their respectivejurisdictions. The Chinese patent system adopts a firsttofile principle, which means that when more than one person file different patent applications for the sameinvention, only the person who files the application first is entitled to obtain a patent of the invention. To be patentable, an invention or a utility model must meetthree criteria: novelty, inventiveness and practicability. A patent is valid for twenty years in the case of an invention and ten years in the case of utility models anddesigns.Trademark LawsTrademarks are protected by the Trademark Law of the PRC (Revised in 2013) which was adopted in 1982 and subsequently amended in 1993, 2001 and 2013respectively as well as by the Implementation Regulations of the PRC Trademark Law adopted by the State Council in 2002 and as most recently amended on April29, 2014. The Trademark Office under the SAIC handles trademark registrations. The Trademark Office grants a tenyear term to registered trademarks and the termmay be renewed for another tenyear period upon request by the trademark owner. A trademark registrant may license its registered trademarks to another party byentering into trademark license agreements, which must be filed with the Trademark Office for its record. As with patents, the Trademark Law has adopted a firsttofile principle with respect to trademark registration. If a trademark applied for is identical or similar to another trademark which has already been registered or subjectto a preliminary examination and approval for use on the same or similar kinds of products or services, such trademark application may be rejected. Any personapplying for the registration of a trademark may not injure existing trademark rights first obtained by others, nor may any person register in advance a trademark thathas already been used by another party and has already gained a “sufficient degree of reputation” through such party’s use.Regulations on Domain NamesThe MIIT promulgated the Measures on Administration of Internet Domain Names, or the Domain Name Measures, on August 24, 2017, which took effecton November 1, 2017 and replaced the Administrative Measures on China Internet Domain Name promulgated by MII on November 5, 2004. According to theDomain Name Measures, the MIIT is in charge of the administration of PRC internet domain names. The domain name registration follows a firsttofile principle.Applicants for registration of domain names shall provide the true, accurate and complete information of their identities to domain name registration serviceinstitutions. The applicants will become the holder of such domain names upon the completion of the registration procedure.Relevant Regulations of the Hightech EnterpriseThe Ministry of Information Industry, the Ministry of Science and Technology and the State Tax Bureau collectively promulgated and issued the“Certifying Standard and Managing Measures for Hightech Enterprises” and “the Hightech Areas of Main National Support” on April 14, 2008 to certify the Hightech enterprise and encourage and support the development of the Chinese Hightech enterprises. Under the Hightech Enterprises Measures, the enterprise canenjoy the favorable tax policy when it is certified as a Hightech enterprise by the Ministry of Information Industry, the Ministry of Science and Technology and theState Tax Bureau or with its provincial branch according to the stipulated standard. The software and computer and network technology are recognized as the mainnational supported Hightech field. Kingtone Information is a Hightech enterprise and enjoys a favorable income tax rate of 15%.58Laws and Regulations of Intellectual Property RightsChina has adopted legislation governing intellectual property rights, including patents, copyrights and trademarks. China is a signatory to the maininternational conventions on intellectual property rights and became a member of the Agreement on Trade Related Aspects of Intellectual Property Rights upon itsaccession to the WTO in December 2001.PatentsThe “Patent Law of the People’s Republic of China” promulgated by the Standing Committee of the National People's Congress, adopted in 1985 andrevised in 1992, 2001 and 2008, protects registered patents. The State Intellectual Property Office of PRC handles granting patent rights, providing for a twentyyearpatent term for inventions and a tenyear patent term for utility models and designs. As we disclosed in Item 4, of this transition report on Form 20F, throughKingtone Information, we have been granted one invention patent “wireless video transmission system based on BREW platform” by the State Intellectual PropertyOffice (“SIPO”) of PRC on September 23, 2009 and therefore such invention is entitled to all the protections provided under the Patent Law for twenty years.Computer Software Copyright and AdministrationOn December 20, 2001, the State Council of PRC issued the “Regulation for Computer Software Protection of the People’s Republic of China” (the“Regulation for Computer Software Protection”) which became effective on January 1, 2002 to protect the interests of copyright owners, to promote the research andapplication and to encourage the development of the Chinese software industry. Under the Regulation for Computer Software Protection, natural persons, legalpersons or any other organizations shall have a copyright on the software developed by such persons no matter whether such software has been published. Theprotection period of software copyrights owned by the legal person or other organization is fifty years and expires on December 31 of the fiftieth year from the initialpublication date of such computer software. Currently, Kingtone Information has twelve registration certificates for software copyrights.TrademarksThe “Trademark Law of the People’s Republic of China” promulgated by the State Council of PRC, adopted in 1982 and revised in 1993 and 2001, protectsregistered trademarks. The Trademark Office under the Chinese State Administration for Industry and Commerce handles trademark registrations and grants a termof ten years to registered trademarks which are renewable for another ten years after the application to the Trademark Office by the owners of the trademarks.Trademark license agreements must be filed with the Trademark Office for record. China has a “firsttoregister” system that requires no evidence of prior use orownership. Kingtone Information has its registered trademarks as described in Item 4 of this transition report on Form 20F. Accordingly, such trademarks areentitled to the protection under the Trademark Law.Foreign Currency ExchangeOn August 29, 2008, the SAFE issued the Notice of the General Affairs Department of the State Administration of Foreign Exchange on the RelevantOperating Issues concerning the Improvement of the Administration of Payment and Settlement of Foreign Currency Capital of Foreignfunded Enterprises, orCircular 142. Pursuant to Circular 142, RMB converted from the foreign currencydenominated capital of a foreigninvested company may only be used for purposeswithin the business scope approved by the applicable governmental authority and may not be used for equity investments within the PRC unless specificallyprovided for otherwise. The use of such Renminbi capital may not be changed without SAFE’s approval and may not in any case be used to repay Renminbi loans ifthe proceeds of such loans have not been used.59See “Risk Factors — Risks Related to Doing Business in China — PRC regulation of loans and direct investment by offshore holding companies to PRCentities may delay or prevent us from using the proceeds of our initial public offering to make loans or additional capital contributions to our PRC operatingsubsidiaries, which could materially and adversely affect our liquidity and our ability to fund and expand our business”.Dividend DistributionWe are a British Virgin Islands holding company and substantially all of our operations are conducted through LK Technology. We rely on dividends andother distributions from our LK Technology and its subsidiaries to provide us with our cash flow and allow us to pay dividends on the shares underlying our ADSsand meet our other obligations. The principal regulations governing distribution of dividends paid by wholly foreignowned enterprises include:1.Wholly ForeignOwned Enterprise Law (1986), as amended; and2.Implementation Rules on Wholly ForeignOwned Enterprise Law (1990), as amended.Under these regulations, wholly foreignowned enterprises in China may pay dividends only out of their accumulated profits, if any, determined inaccordance with PRC accounting standards and regulations. In addition, wholly foreignowned enterprises in China are required to set aside at least 10% of theiraftertax profit based on PRC accounting standards each year to its general reserves until the accumulative amount of such reserves reach 50% of its registeredcapital. These reserves are not distributable as cash dividends. The board of directors of a FIE has the discretion to allocate a portion of its aftertax profits to staffwelfare and bonus funds, which may not be distributed to equity owners except in the event of liquidation.Regulation of Foreign Exchange in Certain Onshore and Offshore TransactionsIn October 2005, the SAFE issued the Notice on Issues Relating to the Administration of Foreign Exchange in Fundraising and Return InvestmentActivities of Domestic Residents Conducted via Offshore Special Purpose Companies, or SAFE Notice 75, which became effective as of November 1, 2005, and wasfurther supplemented by two implementation notices issued by the SAFE on November 24, 2005 and May 29, 2007, respectively. Under Circular 75, prior registrationwith the local SAFE branch is required for PRC residents to establish or to control an offshore company for the purposes of financing that offshore company withassets or equity interests in an onshore enterprise located in the PRC. An amendment to the registration or filing with the local SAFE branch by such PRC resident isalso required for the injection of equity interests or assets of an onshore enterprise in the offshore company or overseas funds raised by such offshore company, orany other material change with respect to the offshore company in connection with any increase or decrease of capital, transfer of shares, merger, division, equityinvestment, debt investment, or creation of any security interest over any assets located in the PRC.Under SAFE Notice 75, PRC residents are further required to repatriate into the PRC all of their dividends, profits or capital gains obtained from theirshareholdings in the offshore entity within 180 days of their receipt of such dividends, profits or capital gains. The registration and filing procedures under SAFENotice 75 are prerequisites for other approval and registration procedures necessary for capital inflow from the offshore entity, such as inbound investments orshareholders loans, or capital outflow to the offshore entity, such as the payment of profits or dividends, liquidating distributions, equity sale proceeds, or thereturn of funds upon a capital reduction. Therefore, failure to comply with such registration may subject us to certain restrictions on, including but not limited to, theincrease of the registered capital of our PRC subsidiary, making loans to our PRC subsidiary, and making distributions to us from our onshore companies.Regulations of Overseas Investments and ListingsOn August 8, 2006, six PRC regulatory agencies, including the MOFCOM, the State Assets Supervision and Administration Commission, the StateAdministration for Taxation, the State Administration for Industry and Commerce, the CSRC and the SAFE, jointly adopted the New M&A Rule, which becameeffective on September 8, 2006. This regulation, among other things, includes provisions that purport to require that an offshore SPV formed for purposes ofoverseas listing of equity interests in PRC companies and controlled directly or indirectly by PRC companies or individuals obtain the approval of the CSRC prior tothe listing and trading of such SPV’s securities on an overseas stock exchange.60On September 21, 2006, the CSRC published on its official website procedures regarding its approval of overseas listings by SPVs. The CSRC approvalprocedures require the filing of a number of documents with the CSRC and it would take several months to complete the approval process.The application of the New M&A Rule with respect to overseas listings of SPVs remains unclear with no consensus currently existing among the leadingPRC law firms regarding the scope of the applicability of the CSRC approval requirement.We believe that, based on our understanding of the current PRC laws, regulations and rules and the procedures announced on September 21, 2006, there isno requirement in this regulation that would require an application to be submitted to the MOFCOM or the CSRC for the approval of the listing and trading of ourADSs on the NASDAQ Capital Market.See “Risk Factors — Risks Related to Doing Business in China — If we were required to obtain the prior approval of the China Securities RegulatoryCommission, or CSRC, of the listing and trading of our ADSs on the NASDAQ Capital Market, we may face regulatory actions or other sanctions from the CSRC orother PRC regulatory agencies.”E. TAXATIONThe following discussion sets forth the material British Virgin Islands, PRC and U.S. federal income tax consequences of an investment in our ADSs andthe ordinary shares represented by our ADSs, sometimes referred to collectively as the “securities”. It is based upon laws and relevant interpretations thereof ineffect as of the date of this report, all of which are subject to change. This discussion does not deal with all possible tax consequences relating to an investment inthe securities, such as the tax consequences under state, local and other tax laws. As used in this discussion, “we,” “our” and “us” refers only to LuokungTechnology Ltd.British Virgin Islands TaxationUnder the law of the British Virgin Islands as currently in effect, a holder of the securities who is not a resident of the British Virgin Islands is not liable forBritish Virgin Islands tax on dividends paid with respect to the securities and all holders of the securities are not liable to the British Virgin Islands for tax on gainsrealized during that year on the sale or disposal of such ordinary shares. The British Virgin Islands does not impose a withholding tax on dividends paid by acompany incorporated or reregistered under the BVI Act.There are no capital gains, gift or inheritance taxes levied by the British Virgin Islands on companies incorporated under the BVI Act. In addition, shares ofcompanies incorporated under the BVI Act are not subject to transfer taxes, stamp duties or similar charges.There is no income tax treaty or convention currently in effect between the United States and the British Virgin Islands or between China and the BritishVirgin Islands.61People’s Republic of China TaxationIn 2007, the PRC National People’s Congress enacted the new Enterprise Income Tax Law (the “EIT Law”), which became effective on January 1, 2008. Thenew EIT Law imposes a single uniform income tax rate of 25% on all Chinese enterprises, including foreigninvested enterprises, and levies a withholding tax rate of10% on dividends payable by Chinese subsidiaries to their foreign shareholders unless any such foreign shareholders’ jurisdiction of incorporation has a tax treatywith China that provides for a different withholding agreement. Under the new EIT Law, enterprises established outside China but deemed to have a “de factomanagement body” within the country may be considered “resident enterprises” for Chinese tax purposes and, therefore, may be subject to an enterprise income taxrate of 25% on their worldwide income. Pursuant to the implementation rules of the new EIT Law, a “de facto management body” is defined as a body that hasmaterial and overall management control over the business, personnel, accounts and properties of the enterprise. Although substantially all members of ourmanagement are located in China, it is unclear whether Chinese tax authorities would require (or permit) us to be treated as PRC resident enterprises. If we aredeemed a Chinese tax resident enterprise, we may be subject to an enterprise income tax rate of 25% on our worldwide income, excluding dividends received directlyfrom another Chinese tax resident enterprise, as well as PRC enterprise income tax reporting obligations. If we are not deemed to be a Chinese tax resident enterprise,we may be subject to certain PRC withholding taxes. See “Risk Factors — Risks Related to Doing Business in China — Our holding company structure may limit thepayment of dividends.” As a result of such changes, our historical tax rates may not be indicative of our tax rates for future periods and the value of our ADSs orordinary shares may be adversely affected. If we are deemed a PRC resident enterprise and investors’ gain from the sales of the securities and dividends payable byus are deemed sourced from China, such gains and dividends payable by us may be subject to PRC tax. See “Risk Factors — Risks Related to Doing Business inChina — If we were deemed a “resident enterprise” by PRC tax authorities, we could be subject to tax on our global income at the rate of 25% under the New EITLaw and our nonPRC shareholders could be subject to certain PRC taxes.United States Federal Income TaxationGeneralThe following is a discussion of the material U.S. federal income tax consequences to an investor of purchasing, owning and disposing of our securities.This discussion does not address any aspects of U.S. federal gift or estate tax or the state, local or nonU.S. tax consequences of an investment in the securities.YOU SHOULD CONSULT YOUR OWN TAX ADVISORS CONCERNING THE U.S. FEDERAL, STATE, LOCAL AND NONU.S. TAX CONSEQUENCES OFPURCHASING, OWNING AND DISPOSING OF THE SECURITIES IN YOUR PARTICULAR SITUATION.This discussion applies only to those investors that purchase the securities in this offering and that hold the securities as capital assets within the meaningof section 1221 of the Internal Revenue Code of 1986, as amended (the “Code”). This section does not apply to holders that may be subject to special tax rules,including but not limited to:1.dealers in securities or currencies;2.traders in securities that elect to use a marktomarket method of accounting;3.banks, insurance companies or certain financial institutions;4.taxexempt organizations;5.governments or agencies or instrumentalities thereof;6.partnerships or other entities treated as partnerships or other passthrough entities for U.S. federal income tax purposes or persons holding thesecurities through such entities;7.regulated investment companies or real estate investment trusts;8.holders subject to the alternative minimum tax;9.holders that actually or constructively own 10% or more of the total combined voting power of all classes of our shares entitled to vote;10.holders that acquired the securities pursuant to the exercise of employee stock options, in connection with employee stock incentive plans orotherwise as compensation;11.holders that hold the securities as part of a straddle, hedging or conversion transaction; or12.holders whose functional currency is not the U.S. dollar.62This section is based on the Code, its legislative history, existing and proposed U.S. Treasury regulations, published rulings and other administrativeguidance of the U.S. Internal Revenue Service (the “IRS”) and court decisions, all as in effect on the date hereof. These laws are subject to change or differentinterpretation by the IRS or a court, possibly on a retroactive basis.We have not sought, and will not seek, a ruling from the IRS as to any U.S. federal income tax consequence described herein. The IRS may disagree withthe discussion herein, and its determination may be upheld by a court. Moreover, there can be no assurance that future legislation, regulation, administrative rulingsor court decisions will not adversely affect the accuracy of the statements in this discussion.The discussion below of the U.S. federal income tax consequences to “U.S. Holders” will apply to a beneficial owner of the securities that is for U.S. federalincome tax purposes:1.a citizen or resident of the United States;2.a corporation (or other entity treated as a corporation) that is created or organized (or treated as created or3.organized) under the laws of the United States, any state thereof or the District of Columbia;4.an estate whose income is subject to U.S. federal income tax regardless of its source; or5.a trust if (a) a U.S. court can exercise primary supervision over the trust’s administration and one or more U.S.6.persons are authorized to control all substantial decisions of the trust, or (b) if the trust has a valid election in effect under applicable U.S.Treasury regulations to be treated as a U.S. person.If a beneficial owner of the securities is not described as a U.S. Holder and is not an entity treated as a partnership or other passthrough entity for U.S.federal income tax purposes, such owner will be considered a “NonU.S. Holder.” The material U.S. federal income tax consequences applicable specifically to NonU.S. Holders are described below under the heading “Tax Consequences to NonU.S. Holders.”If a partnership (including for this purpose any entity treated as a partnership for U.S. tax purposes) is a beneficial owner of the securities, the U.S. taxtreatment of a partner in the partnership generally will depend on the status of the partner and the activities of the partnership. A holder of the securities that is apartnership or partners in such a partnership should consult their own tax advisors about the U.S. federal income tax consequences of holding and disposing of thesecurities.This discussion assumes that any distributions made (or deemed made) on the securities and any consideration received by a holder in consideration forthe sale or other disposition of the securities will be in U.S. dollars. This discussion also assumes that the representations contained in the Deposit Agreement aretrue and that the obligations in the Deposit Agreement and any related agreement will be complied with in accordance with their terms. Finally, this discussionassumes that each ADS will only represent ordinary shares in us, and will not represent any other type of security, such as a bond, cash or other property.63For U.S. federal income tax purposes, a holder of an ADS will be treated as the beneficial owner of the shares represented by such ADS and an exchange ofan ADS for ordinary shares will not be subject to U.S. federal income tax. The U.S. Treasury has expressed concerns that parties to whom ADSs are prereleased, orintermediaries in the chain of ownership between holders of ADSs and the issuer of the securities underlying the ADSs may be taking actions that are inconsistentwith the claiming of foreign tax credits by U.S. Holders of ADSs. Such actions would also be inconsistent with the claiming of the reduced rate of tax applicable todividends received by certain noncorporate U.S. Holders, including individual U.S. Holders, as described below under “Tax Consequences to U.S.Holders — Taxation of Distributions.” Accordingly, the availability of foreign tax credits or the reduced tax rate for dividends received by certain noncorporate U.S.Holders, including individual U.S. Holders, could be affected by actions taken by parties to whom the ADSs are released, or by future actions by the U.S. Treasury.Tax Consequences to U.S. HoldersTaxation of DistributionsSubject to the passive foreign investment company, or PFIC, rules discussed below, the gross amount of any cash distributions we make with respect to aU.S. Holder in respect of such U.S. Holder’s ADSs or shares will generally be treated as dividend income if the distributions are made from our current oraccumulated earnings and profits, calculated according to U.S. federal income tax principles. Cash dividends will generally be subject to U.S. federal income tax asordinary income on the day the U.S. Holder actually or constructively receives such income. With respect to noncorporate U.S. Holders for taxable years beginningbefore January 1, 2011, dividends may be taxed at the lower applicable longterm capital gains rate provided that (a) our ADSs or shares are readily tradable on anestablished securities market in the United States, or, in the event we are deemed to be a Chinese “resident enterprise” under the EIT Law (as described above under“People’s Republic of China Taxation”), we are eligible for the benefits of the income tax treaty between the United States and the PRC (the “U.S.PRC Tax Treaty”),(b) we are not a PFIC, as discussed below, for either the taxable year in which the dividend was paid or the preceding taxable year, and (c) certain holding periodrequirements are met. Under published IRS authority, ADSs are considered for purposes of clause (a) above to be readily tradable on an established securitiesmarket in the United States only if they are listed on certain exchanges, which presently include the NASDAQ Capital Market. U.S. Holders should consult their owntax advisors regarding the availability of the lower rate for any dividends paid with respect to our ADSs or shares.Dividends will not be eligible for the dividendsreceived deduction allowed to U.S. corporations in respect of dividends received from other U.S.corporations. Generally, if we distribute noncash property as a dividend (other than pro rata distributions of our shares) out of our current or accumulated earningsand profits (as determined for U.S. federal income tax purposes), a U.S. Holder generally will include in income an amount equal to the fair market value of theproperty, on the date that it is distributed.Distributions in excess of current and accumulated earnings and profits, as determined for U.S. federal income tax purposes, will be treated as a nontaxablereturn of capital to the extent of the U.S. Holder’s basis in its shares or ADSs and thereafter as capital gain. However, we do not plan on calculating our earnings andprofits in accordance with U.S. federal income tax principles. U.S. holders therefore should generally assume that any distributions paid by us will be treated asdividends for U.S. federal income tax purposes.If PRC taxes apply to dividends paid by us to a U.S. Holder (see “People’s Republic of China Taxation,” above), such taxes may be treated as foreign taxeseligible for credit against such holder’s U.S. federal income tax liability (subject to certain limitations), and a U.S. Holder may be entitled to certain benefits under theU.S.PRC Tax Treaty. The rules relating to the U.S. foreign tax credit are complex. U.S. Holders should consult their own tax advisors regarding the creditability ofany such PRC tax and their eligibility for the benefits of the U.S.PRC Tax Treaty.64Taxation of Dispositions of SharesSubject to the PFIC rules discussed below, a U.S. holder that sells or otherwise disposes of its shares will recognize capital gain or loss for U.S. federalincome tax purposes equal to the difference between the amount realized and such U.S. Holder’s tax basis in its shares. Prior to January 1, 2011, capital gains of anoncorporate U.S. holder are generally taxed at a maximum rate of 15% where the property is held for more than one year (and 20% thereafter). The ability to deductcapital losses is subject to limitations.If PRC taxes apply to any gain from the disposition of our shares by a U.S. Holder, such taxes may be treated as foreign taxes eligible for credit against suchholder’s U.S. federal income tax liability (subject to certain limitations), and a U.S. Holder may be entitled to certain benefits under the U.S.PRC Tax Treaty. U.S.Holders should consult their own tax advisors regarding the creditability of any such PRC tax and their eligibility for the benefits of the U.S.PRC Tax Treaty.Passive Foreign Investment CompanyWe do not expect to be a PFIC for U.S. federal income tax purposes for our current tax year or in the foreseeable future. The determination of whether or notwe are a PFIC in respect of any of our taxable years is a factual determination that cannot be made until the close of the applicable tax year and that is based on thetypes of income we earn and the value and composition of our assets (including goodwill), all of which are subject to change. Therefore, we can make no assurancesthat we will not be a PFIC in respect of our current taxable year or in the future.In general, we will be a PFIC in any taxable year if either:1.at least 75% of our gross income for the taxable year is passive income; or2.at least 50% of the value, determined on the basis of a quarterly average, of our assets is attributable to assets that produce or are held for theproduction of passive income.Passive income includes dividends, interest, royalties, rents (other than certain rents and royalties derived in the active conduct of a trade or business), theexcess of gains over losses from certain types of transactions in commodities, annuities and gains from assets that produce passive income. We will be treated asowning our proportionate share of the assets and earning our proportionate share of the income of any corporation in which we own, directly or indirectly, at least25% (by value) of the stock.If we are treated as a PFIC in any year during which a U.S. Holder owns the securities, and such U.S. Holder did not make a marktomarket election, asdescribed below, the U.S. Holder will be subject to special rules with respect to:1.any gain recognized by the U.S. Holder on the sale or other disposition of its shares; and any excess distribution that we make to the U.S. Holder(generally, the excess of the amount of any distributions to such U.S. Holder during a single taxable year of such U.S. Holder over 125% of theaverage annual distributions received by such U.S. Holder in respect of the shares during the three preceding taxable years of such U.S. Holder or,if shorter, such U.S. Holder holding period for the shares).Under these rules:2.the gain or excess distribution will be allocated ratably over the U.S. Holder’s holding period for the shares;3.the amount allocated to the U.S. Holder’s taxable year in which it realized the gain or excess distribution or to the period in the U.S. Holder’sholding period before the first day of our first taxable year in which we are a PFIC will be taxed as ordinary income;4.the amount allocated to other taxable years (or portions thereof) of the U.S. Holder and included in its holding period will be taxed at the highesttax rate in effect for that year; and5.the interest charge generally applicable to underpayments of tax will be imposed in respect of the tax attributable to each such other taxable yearof the U.S. Holder. 6.Special rules apply for calculating the amount of the foreign tax credit with respect to excess distributions by a PFIC.65Alternatively, if a U.S. Holder, at the close of its taxable year, owns ordinary shares in a PFIC that are treated as marketable stock, the U.S. Holder may makea marktomarket election with respect to such shares for such taxable year. Our shares will be “marketable” to the extent that they remain regularly traded on anational securities exchange, such as the NASDAQ Capital Market. If a U.S. Holder makes this election in a timely fashion, it will not be subject to the PFIC rulesdescribed above. Instead, in general, the U.S. Holder will include as ordinary income each year the excess, if any, of the fair market value of its shares at the end ofthe taxable year over its adjusted basis in its shares. Any ordinary income resulting from this election would generally be taxed at ordinary income tax rates andwould not be eligible for the reduced rate of tax applicable to qualified dividend income. The U.S. Holder will also be allowed to take an ordinary loss in respect ofthe excess, if any, of the adjusted basis of its shares over the fair market value at the end of the taxable year (but only to the extent of the net amount of previouslyincluded income as a result of the marktomarket election). The U.S. Holder’s basis in the shares will be adjusted to reflect any such income or loss amounts. U.S.Holders should consult their own tax advisor regarding potential advantages and disadvantages of making a marktomarket election with respect to their shares.Alternatively, a U.S. Holder of stock in a PFIC may avoid the PFIC tax consequences described above in respect to our or shares by making a timely“qualified electing fund” election to include in income its pro rata share of our net capital gains (as longterm capital gain) and other earnings and profits (asordinary income), on a current basis, in each case whether or not distributed, in the taxable year of the U.S. Holder in which or with which our taxable year ends.However, the qualified electing fund election is available only if the PFIC provides such U.S. Holder with certain information regarding its earnings and profits asrequired under applicable U.S. Treasury regulations. We do not intend to furnish the information that a U.S. Holder would need in order to make a qualified electingfund election. Therefore, U.S. Holders will not be able to make or maintain such election with respect to their or shares.If a U.S. Holder owns our shares or during any year that we are a PFIC, such holder must file U.S. Internal Revenue Service Form 8621 regarding suchholder’s shares or and the gain realized on the disposition of the shares. The reduced tax rate for dividend income, discussed in “Taxation of Distributions,” is notapplicable to dividends paid by a PFIC. U.S. Holders should consult with their own tax advisors regarding reporting requirements with respect to their shares.Tax Consequences to NonU.S. HoldersDividends paid to a NonU.S. Holder in respect of our or shares generally will not be subject to U.S. federal income tax, unless the dividends are effectivelyconnected with the NonU.S. Holder’s conduct of a trade or business within the United States (and, if required by an applicable income tax treaty, are attributable toa permanent establishment or fixed base that such holder maintains in the United States).In addition, a NonU.S. Holder generally will not be subject to U.S. federal income tax on any gain attributable to a sale or other disposition of our or sharesunless such gain is effectively connected with its conduct of a trade or business in the United States (and, if required by an applicable income tax treaty, isattributable to a permanent establishment or fixed base that such holder maintains in the United States) or the NonU.S. Holder is an individual who is present in theUnited States for 183 days or more in the taxable year of sale or other disposition and certain other conditions are met (in which case, such gain from United Statessources generally is subject to tax at a 30% rate or a lower applicable tax treaty rate).Dividends and gains that are effectively connected with the NonU.S. Holder’s conduct of a trade or business in the United States (and, if required by anapplicable income tax treaty, are attributable to a permanent establishment or fixed base in the United States) generally will be subject to tax in the same manner as fora U.S. Holder and, in the case of a NonU.S. Holder that is a corporation for U.S. federal income tax purposes, may also be subject to an additional branch profits taxat a 30% rate or a lower applicable tax treaty rate.66Information Reporting and Backup Withholding In general, information reporting for U.S. federal income tax purposes generally should apply to distributions made on the securities within the UnitedStates to a noncorporate U.S. Holder and to the proceeds from sales and other dispositions of the securities by a noncorporate U.S. Holder to or through a U.S.office of a broker. Payments made (and sales and other dispositions effected at an office) outside the United States generally should be subject to informationreporting in limited circumstances.Dividend payments made to U.S. Holders and proceeds paid from the sale or other disposition the securities may be subject to information reporting to theIRS and possible U.S. federal backup withholding at a current rate of 28%. Certain exempt recipients, such as corporations, are not subject to these informationreporting requirements. Backup withholding will not apply to a U.S. Holder who furnishes a correct taxpayer identification number and makes any other requiredcertification, or who is otherwise exempt from backup withholding. U.S. Holders who are required to establish their exempt status must provide a duly executed IRSForm W9.A NonU.S. Holder generally may eliminate the requirement for information reporting and backup withholding by providing certification of its foreignstatus, under penalties of perjury, on a duly executed applicable IRS Form W8 or by otherwise establishing an exemption.Backup withholding is not an additional tax. Rather, the amount of any backup withholding will be allowed as a credit against a U.S. Holder’s or a nonU.S.Holder’s U.S. federal income tax liability and may entitle such holder to a refund, provided that certain required information is timely furnished to the IRS.PROSPECTIVE PURCHASERS OF OUR SECURITIES SHOULD CONSULT WITH THEIR OWN TAX ADVISORS REGARDING THE APPLICATION OFTHE U.S. FEDERAL INCOME TAX LAWS TO THEIR PARTICULAR SITUATIONS AS WELL AS ANY ADDITIONAL TAX CONSEQUENCES RESULTING FROMPURCHASING, HOLDING OR DISPOSING OF OUR SECURITIES, INCLUDING THE APPLICABILITY AND EFFECT OF THE TAX LAWS OF ANY STATE, LOCALOR NONU.S. JURISDICTION, INCLUDING ESTATE, GIFT, AND INHERITANCE LAWS AND APPLICABLE TAX TREATIES.F. DIVIDENDS AND PAYING AGENTS.Not applicable.G. STATEMENT BY EXPERTS.None.H. DOCUMENTS ON DISPLAY.We previously filed a registration statement on Form F1 (File No. 333166056) with the SEC relating to our initial public offering in May 2010. This transition reportdoes not contain all of the information in the registration statement and the exhibits and financial statements included with the registration statement. References inthis transition report to any of our contracts, agreements or other documents are not necessarily complete, and you should refer to the exhibits attached to theregistration statement for copies of the actual contracts, agreements or documents. In addition, we will file transition reports on Form 20F and submit otherinformation under cover of Form 6K. As a foreign private issuer, we are exempt from the proxy requirements of Section 14 of the Exchange Act and our officers,directors and principal shareholders will be exempt from the insider shortswing disclosure and profit recovery rules of Section 16 of the Exchange Act. You may readand copy the registration statement, the related exhibits and other materials we file with the SEC at the SEC's public reference room in Washington, D.C. at 100 FStreet, Room 1580, N.E., Washington, D.C.20549. You can also request copies of those documents, upon payment of a duplicating fee, by writing to the SEC. Pleasecall the SEC at 1800SEC0330 for further information on the operation of the public reference rooms. The SEC also maintains an Internet site that contains reports,proxy and information statements and other information regarding issuers that file with the SEC. The website address is http://www.sec.gov. You may also request acopy of these filings, at no cost, by writing us at LAB 32, SOHO 3Q, No 9, Guanghua Road, Chaoyang District, Beijing, People’s Republic of China, 100020 ortelephoning us at (86) 1085866721.67I. SUBSIDIARY INFORMATIONFor a listing of our subsidiaries, see “Item 4. Information on the Company – C. Organizational Structure.”ITEM 11. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.Interest Rate RiskAs of December 31, 2017, we had no shortterm or longterm borrowings. If we borrow money in future periods, we may be exposed to interest rate risk. Ourexposure to market risk for changes in interest rates relates primarily to the interest income generated by our cash deposits with our banks and heldtomaturityinvestments. We have not used any derivative financial instruments in our investment portfolio. Interest earnings instruments carry a degree of interest rate risk. Wehave not been exposed, nor do we anticipate being exposed to material risks due to changes in interest rates. However, our future interest income may fall short ofexpectations due to changes in interest rates. Foreign Exchange RiskTranslation adjustments amounted to $90,671 and $387,375 gain as of the fiscal year ended December 31, 2017 and 2016, respectively. The Companytranslated balance sheet amounts with the exception of equity at December 31, 2017 at RMB 6.5342 to $1.00 as compared to RMB 6.9370 to $1.00 at December 31,2016. The Company stated equity accounts at their historical rate. The average translation rates applied to income statement accounts for the fiscal year endedDecember 31, 2017 and 2016 were RMB6.7356 and RMB 6.7153 to US$1.00, respectively. So far, the PRC government has been able to manage a stable exchange ratebetween RMB and the U.S. Dollar. Our future downward translation adjustments may occur and can be significant due to changes in such exchange rate.If we decide to convert our RMB into U.S. dollars for the purpose of making payments for dividends on our ordinary shares or for other business purposes,appreciation of the U.S. dollar against the RMB would have a negative effect on the U.S. dollar amount available to us.The PRC government imposes strict restrictions on PRC resident companies regarding converting RMB into foreign currencies and vice versa under capitalaccount transactions, such as receiving equity investments from outside of the PRC, making equity investments outside of the PRC, borrowing money from orlending money outside of the PRC, and repaying debt or remitting liquidated assets and/or accumulated profits outside of the PRC. These transactions have to beapproved by the relevant PRC government authorities, including but not limited to the commerce bureau, the tax bureau and the State Administration of ForeignExchange, or SAFE, and have to be conducted at banks entrusted by the local SAFE branch. As our business continues to grow, we may need to continuouslyfinance our PRC subsidiaries by raising capital from outside of the PRC. The restriction on converting RMB into foreign currencies, and vice versa, may limit ourability to use capital resources from outside of the PRC. Such restrictions may also limit our ability to remit profits from our PRC subsidiaries outside of the PRC,therefore potentially limiting our ability to pay dividends to our shareholders. In addition, such restrictions will limit our ability to freely transfer temporary excesscash in our or our subsidiaries’ bank accounts in and out of the PRC, therefore limiting our ability to conduct crossborder cash management activities to optimizethe utilization of our cash.InflationAlthough China has experienced an increasing inflation rate, inflation has not had a material impact on our results of operations in recent years. Accordingto the National Bureau of Statistics of China, the change in the consumer price index in China was 0.46%, (0.77%), and 1.16% in 2001, 2002 and 2003, respectively.However, in connection with a 3.9% increase in 2004, the PRC government announced measures to restrict lending and investment in China in order to reduceinflationary pressures in China’s economy. Following the government’s actions, the consumer price index decreased to 1.8% in 2005 and to 1.5% in 2006. In 2007, theconsumer price index increased to 4.8%. In response, China’s central bank, the People’s Bank of China, announced that the bank reserve ratio would rise half apercentage point to 15.5% in an effort to reduce inflation pressures. China’s consumer price index growth rate reached 8.7% year over year in 2008. In 2009 and 2010,the change in the consumer price index in China was minus 0.7% and 3.3%.China consumer price index in November 2017 was 3.8% higher than that of the same period in 2016. China consumer price index in December 2016 was2.4% higher than that of the same period in 2015. China consumer price index in December 2015 was 4.8% higher than that of the same period in 2014. Chinaconsumer price index in December 2014 was 3.3% higher than that of the same period in 2013. The results of the PRC government’s actions to combat inflation aredifficult to predict. Adverse changes in the Chinese economy, if any, will likely impact the financial performance of a variety of industries in China that use, or wouldbe candidates to use, our software products and services.68ITEM 12. DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES.A. DEBT SECURITIES.Not applicable. B. WARRANTS AND RIGHTS.Not applicable.C. OTHER SECURITIES.Not applicable.D. AMERICAN DEPOSITARY SHARES.The Bank of New York Mellon, as depositary (the “Depositary”) for the Company’s ADR facility, notified the owners and holders of the Company’s ADSsthat the ADS facility will terminate effective at 5:00 p.m. (Eastern Time) on September 19, 2018. Under the terms of the Deposit Agreement among the Company, theDepositary and the owners and holders of ADSs of the Company (the “Deposit Agreement”), owners and holders of the Company’s ADSs have until at leastJanuary 21, 2019 to surrender their ADSs to the Depositary for delivery of the underlying ordinary shares of the Company. Subsequent to January 21, 2019, underthe terms of the Deposit Agreement, the Depositary may attempt to sell any ordinary shares remaining on deposit with the Depositary. If the Depositary sells suchunderlying ordinary shares or receives value for such shares, holders must surrender their ADSs to obtain payment of the sale proceeds, net of expenses andapplicable tax and charges. We completed the voluntary delisting of our ADSs from the NASDAQ Capital Market on September 19, 2018.You may hold ADSs either (A) directly (i) by having ADSs registered in your name in the Direct Registration System, or (ii) by having an Americandepositary receipt, also referred to as an ADR, which is a certificate evidencing a specific number of ADSs, registered in your name, or (B) indirectly by holding asecurity entitlement in ADSs through your broker or other financial institution. If you hold ADSs directly, you are a registered ADS holder, also referred to as anADS holder. This description assumes you are an ADS holder. If you hold the ADSs indirectly, you must rely on the procedures of your broker or other financialinstitution to assert the rights of ADS holders described in this section. You should consult with your broker or financial institution to find out what thoseprocedures are.The Direct Registration System, or DRS, is a system administered by The Depository Trust Company, also referred to as DTC, pursuant to which thedepositary may register the ownership of uncertificated ADSs, which ownership will be confirmed by periodic statements sent by the depositary to the registeredholders of uncertificated ADSs.69As an ADS holder, you will not be treated as one of our registered shareholders and you will not have direct shareholder rights. British Virgin Island’s lawgoverns our direct shareholders’ rights. The depositary will be the holder of the shares underlying your ADSs. As a registered holder of ADSs, you will have ADSholder rights. A Deposit Agreement among us, the depositary and you, as an ADS holder, and all other persons indirectly holding ADSs, sets out ADS holder rightsas well as the rights and obligations of the depositary. New York law governs the Deposit Agreement and the ADSs.The following is a summary of the material provisions of the Deposit Agreement. For more complete information, you should read the entire DepositAgreement and the form of ADS, which contains the terms of the ADSs. The Deposit Agreement is filed as an exhibit to our registration statement filed on Form F1.You may obtain the registration statement and the attached Deposit Agreement from the SEC’s website at http://www.sec.gov. You may also obtain a copy of theDeposit Agreement at the SEC’s Public Reference Room, which is located at 100 F Street, NE, Washington, DC 20549. You may obtain information on the operationof the Public Reference Room by calling the SEC at 18007320330. Fees and ExpensesPersons depositing or withdrawing shares or ADS holders must pay:For:$5.00 (or less) per 100 ADSs (or portion of 100 ADSs)Issuance of ADSs, including issuances resulting from a distribution of shares orrights or other propertyCancellation of ADSs for the purpose of withdrawal, including if the DepositAgreement terminates$.05 (or less) per ADSAny cash distribution to ADS holdersA fee equivalent to the fee that would be payable if securities distributed to youhad been shares and the shares had been deposited for issuance of ADSsDistribution of securities distributed to holders of deposited securities whichare distributed by the depositary to ADS holders$.05 (or less) per ADSs per calendar yearDepositary servicesRegistration or transfer feesTransfer and registration of shares on our share register to or from the name ofthe depositary or its agent when you deposit or withdraw sharesExpenses of the depositaryCable, telex and facsimile transmissions (when expressly provided in the DepositAgreement) converting foreign currency to U.S. dollarsTaxes and other governmental charges the depositary or the custodian have topay on any ADS or share underlying an ADS, for example, share transfer taxes,stamp duty or withholding taxesAs necessaryAny charges incurred by the depositary or its agents for servicing the depositedsecuritiesAs necessaryPayment of TaxesHolders of our ADSs are responsible for any taxes or other governmental charges payable on their ADSs or on the deposited securities represented by anyof their ADSs. The depositary may refuse to register any transfer of a holder’s ADSs or allow withdrawal of the deposited securities represented by the ADSs untilsuch taxes or other charges are paid. It may apply payments owed to the holder or sell deposited securities represented by the ADSs to pay any taxes owed and theholder will remain liable for any deficiency. If the depositary sells deposited securities, it will, if appropriate, reduce the number of ADSs to reflect the sale and pay toADS holders any proceeds, or send to ADS holders any property, remaining after it has paid the taxes.70PART IIITEM 13. DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES.None.ITEM 14. MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS.Use of Proceeds.We completed our initial public offering on May 14, 2010 (the “IPO”), which generated net proceeds of approximately $14.6 million. All remaining cash onhand from the proceeds of our IPO was transferred to C Media Limited and its subsidiaries following the completion of the asset exchange transactions on August17, 2018.ITEM 15. CONTROLS AND PROCEDURES.Disclosure Controls and ProceduresOur Chief Executive Officer and Chief Financial Officer have reviewed and evaluated the effectiveness of our disclosure controls and procedures, whichincluded inquiries made to certain other of our employees. The term “disclosure controls and procedures,” as defined in Rules 13a15(e) and 15d15(e) under theExchange Act, means controls and other procedures of a company that are designed to ensure that information required to be disclosed by a company in thereports, such as this report, that it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in theSEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to bedisclosed by a company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the company’s management, including itsprincipal executive and principal financial officers, as appropriate to allow timely decisions regarding required disclosure. Management recognizes that any controlsand procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives and management necessarilyapplies its judgment in evaluating the costbenefit relationship of possible controls and procedures. Based on that evaluation, our Chief Executive Officer and ChiefFinancial Officer have each concluded that, as of December 31, 2017, the Company’s disclosure controls and procedures were not effective due to the materialweakness described in the “Management’s Report on Internal Control over Financial Reporting” section below.Management’s Report on Internal Control Over Financial ReportingOur management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Exchange ActRules 13a15(f) and 15d15(f). Internal control over financial reporting refers to the process designed by, or under the supervision of, our principal executive officerand principal financial officer, and effected by our Board of Directors, management and other personnel, to provide reasonable assurance regarding the reliability offinancial reporting and the preparation of financial statements for external purposes in accordance with U.S. GAAP and includes those policies and procedures that(i) pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of the assets of the Company; (ii)provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with U.S. GAAP, and thatreceipts and expenditures of the Company are being made only in accordance with authorizations of management and directors of the Company; and (iii) providereasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the Company’s assets that could have a materialeffect on the financial statements.71Any system of internal control, no matter how well designed, has inherent limitations. Therefore, even those systems determined to be effective canprovide only reasonable assurance with respect to financial statement preparation and presentation. Because of the inherent limitations of internal control, there is arisk that material misstatements may not be prevented or detected on a timely basis by internal control over financial reporting. However, these inherent limitationsare known features of the financial reporting process. Therefore, it is possible to design into the process safeguards to reduce, though not eliminate, this risk.Management assessed our internal control over financial reporting as of the year ended December 31, 2017. In making this assessment, management usedthe criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in the 2014 report entitled "Internal ControlIntegratedFramework." The COSO framework summarizes each of the components of a company’s internal control system, including (i) the control environment, (ii) riskassessment, (iii) control activities, (iv) information and communication, and (v) monitoring. Based on such assessment, management concluded that its internalcontrol over financial reporting as of December 31, 2017 was not effective because of the following material weakness:Lack of U.S. GAAP expertise. Although our accounting personnel are professional and experienced in accounting requirements and procedures generallyaccepted in the PRC, they do not have sufficient knowledge, experience and training in maintaining our books and records and preparing financial statements inaccordance with U.S. GAAP standards and SEC rules and regulations. The staff needs additional training to become experienced in U.S. GAAPbased reporting,including the skills of U.S. GAAPbased period end closing, consolidation of financial statements, and U.S. GAAP conversion.In order to address the above material weakness, our management plans to take the following steps:We will employ, as needed, outside professionals to provide key accounting personnel ongoing technical trainings to ensure their proper understanding ofU.S. GAAP and newly announced accounting standards.The Company believes the foregoing measures will remediate the identified material weakness in future periods. The Company is committed to monitoringthe effectiveness of these measures and making any changes that are necessary and appropriate.Notwithstanding the conclusion that its internal control over financial reporting was not effective as of the end of the period covered by this report, ourChief Executive Officer and Chief Financial Officer believe that the financial statements and other information contained in this report present fairly, in all materialrespects, its business, financial condition and results of operations. Nothing has come to the attention of management that causes them to believe that any materialinaccuracies or errors exist in the Company’s financial statements as of December 31, 2017.Attestation report of the registered public accounting firm.This transition report does not include an attestation report of the Company’s registered public accounting firm on internal control over financial reportingbecause the Company is a nonaccelerated filer permanently exempted from section 404(b) of the SarbanesOxley Act.Changes in Internal Control over Financial ReportingThere were no changes in the Company’s internal control over financial reporting that occurred during our fiscal year ended December 31, 2017 that hasmaterially affected or is reasonably likely to materially affect our internal control over financial reporting.ITEM 16. [RESERVED]ITEM 16A. AUDIT COMMITTEE FINANCIAL EXPERT.Our board of directors has determined that Mr. Dennis Galgano qualifies as an audit committee financial expert. Our board of directors has determined thatMessrs. Dennis Galgano, Jin Shi, Jiming Ha and Zhihao Xu meet the definition of an “independent director” under the applicable NASDAQ Rules and under Rule10A3 of the Securities Exchange Act of 1934, as amended.72ITEM 16B. CODE OF ETHICS.Our board of directors has adopted a code of business conduct and ethics applicable to our directors, officers and employees. We have posted the code onour website at http://www.luokung.com.ITEM 16C. PRINCIPAL ACCOUNTANT FEES AND SERVICES.Audit FeesThe aggregate fees billed by Moore Stephens CPA Limited for professional services rendered for the audit of our financial information disclosed in thistransition report on Form 20F was $280,000 for the two years ended December 31, 2017 and 2016.The aggregate fees billed by our previous auditor, BDO China Shu Lun Pan Certified Public Accountants LLP for professional services rendered for theaudit of our annual financial information included in our annual reports on Form 20F was $105,500 for each of the fiscal years ended September 30, 2017, 2016 and2015.Tax FeesWe did not engage our principal accountants to provide tax or related services during the last two fiscal years.All Other FeesWe did not engage our principal accountants to render services to us during the last two fiscal years, other than as reported above.ITEM 16D. EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES.Not applicable.ITEM 16E. PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS.Not applicable.ITEM 16F. CHANGE IN REGISTRANT’S CERTIFYING ACCOUNTANT.Not applicable.ITEM 16G. CORPORATE GOVERNANCE.We are incorporated in the BVI and our corporate governance practices are governed by applicable BVI law as well as our memorandum and articles ofassociation. In addition, because our ADSs are listed on NASDAQ, we are subject to NASDAQ’s corporate governance requirements. NASDAQ Listing Rule5620(a) requires each issuer to hold an annual meeting of shareholders no later than one year after the end of the issuer’s fiscal year end. However, NASDAQ ListingRule 5615(a)(3) permits a foreign private issuer like us to follow home country practices in lieu of certain requirements of Listing Rule 5600, provided that suchforeign private issuer discloses in its transition report filed with the SEC each requirement of Rule 5600 that it does not follow and describes the home countrypractice followed in lieu of such requirement. We follow home country practice with respect to annual meetings and did not hold an annual shareholder meeting inthe year ended December 31, 2017. We may, however, hold annual shareholder meetings in the future if there are significant issues that require shareholders’approvals.ITEM 16H. MINE SAFETY DISCLOSURE.Not applicable.73PART IIIITEM 17. FINANCIAL STATEMENTS.We have elected to provide financial statements and related information specified in Item 18.ITEM 18. FINANCIAL STATEMENTS.See “Index to Consolidated Financial Statements” for a list of all financial statements filed as part of this transition report. The Financial Statements arebeginning on page F1.ITEM 19. EXHIBITS.See the Exhibit Index following the signature page of this report, which is incorporated herein by reference.74SIGNATURESThe registrant hereby certifies that it meets all of the requirements for filing on Form 20F and that it has duly caused and authorized the undersigned tosign this transition report on its behalf.LUOKUNG TECHNOLOGY CORP.By:/s/ Xuesong Song Xuesong SongChief Executive Officer(principal executive officer)October 12, 201875EXHIBIT INDEXThe following documents are filed as part of this transition report on Form 20F.ExhibitNumberDescription1.1Amended and Restated Memorandum of Association and Articles of Association of Luokung Technology Corp., dated August 20, 2018, and ascurrently in effect.2.1*Deposit Agreement among the Company, depositary and holders of the American Depositary Receipts.2.2*Form of American Depositary Receipt.2.3*English translation of Entrusted Management Agreement dated December 15, 2009 between Xi’an Softech Co., Ltd., Xi’an Kingtone InformationTechnology Co., Ltd. and the shareholders of Xi’an Kingtone Information Technology Co., Ltd.3.1*English translation of Shareholder’s Voting Proxy Agreement dated December 15, 2009 between Xi’an Softech Co., Ltd., Xi’an Kingtone InformationTechnology Co., Ltd. and the shareholders of Xi’an Kingtone Information Technology Co., Ltd.4.1*English translation of Exclusive Technology Service Agreement dated December 15, 2009 between Xi’an Softech Co., Ltd. and Xi’an KingtoneInformation Technology Co., Ltd.4.2*English translation of Exclusive Option Agreement dated December 15, 2009 between Xi’an Softech Co., Ltd., Xi’an Kingtone InformationTechnology Co., Ltd. and the shareholders of Xi’an Kingtone Information Technology Co., Ltd.4.3*English translation of Equity Pledge Agreement dated December 15, 2009 between Xi’an Softech Co., Ltd., Xi’an Kingtone Information TechnologyCo., Ltd. and the shareholders of Xi’an Kingtone Information Technology Co., Ltd.4.4*English translation of Loan Agreement dated September 14, 2009 between Xi’an Kingtone Information Technology Co., Ltd. and Xian CityCommercial Bank.4.5*English translation of Mortgage Agreement dated September 14, 2009 between Xi’an Kingtone Information Technology Co., Ltd. and Xian CityCommercial Bank.4.6*English translation of Form of Employment Agreement entered into between the Company and the Company’s executive officers.4.7*2010 Omnibus Incentive Plan of the Company.4.8**English translation of Project Construction Contract dated August 10, 2010 between Xi’an Hu County Yuxing Agriculture Science & TechnologyCo., Ltd. and Xi’an Kingtone Information Technology Co., Ltd.4.9***Asset Exchange Agreement by and between C Media Limited and the Company dated as of January 25, 2018.4.10***Securities Purchase Agreement by and among Redstone YYL Management Limited and five shareholders holding majority of the shares of theCompany dated as of January 25, 2018.4.15Exclusive Business Cooperation Agreement by and between Zhongchuan Tianxia Information Technology (Shenzhen) Co., Ltd., and Beijing MobileVision Technology Co., Ltd., dated August 31, 2015.764.16Exclusive Option Agreement by and among Zhongchuan Tianxia Information Technology (Shenzhen) Co., Ltd., Xuesong Song, Weili Chen, PingWang, Donglai Liu, and Beijing Mobile Vision Technology Co., Ltd., dated August 31, 2015.4.17Equity Interest Pledge Agreement by and among Zhongchuan Tianxia Information Technology (Shenzhen) Co., Ltd., Xuesong Song, Weili Chen, PingWang, Donglai Liu, and Beijing Mobile Vision Technology Co., Ltd., dated August 31, 2015.4.18Addendum to Asset Exchange Agreement by and among the Company, Topsky Infotech Holdings Pte Ltd. and C Media Limited, dated October 3,2018. Incorporated by reference to the Company’s Current Report on Form 6K filed on October 4, 2018.4.19Stock Purchase Agreement, dated August 25, 2018, by and among the Company, LK Technology Ltd., and the shareholders listedtherein. Incorporated by reference to the Company’s Current Report on Form 6K filed on August 27, 2018.4.20Power of Attorney by Weili Chen, dated August 31, 2015.4.21Power of Attorney by Ping Wang, dated August 31, 2015.4.22Power of Attorney by Donglai Liu, dated August 31, 2015.4.23Power of Attorney by Xuesong Song, dated August 31, 2015.8.1List of Subsidiaries and Consolidated Variable Interest Entities10.1Employment Agreement, dated August 19, 2018, between Luokung Technology Corp. and Xuesong Song.†10.2Employment Agreement, dated August 19, 2018, by and between Luokung Technology Corp. and Jie Yu.†12.1Certification of Chief Executive Officer required by Rule 13a14(a).12.2Certification of Chief Financial Officer required by Rule 13a14(a).13.1Certification of Chief Executive Officer required by Rule 13a14(a).13.2Certification of Chief Financial Officer required by Rule 13a14(a).101.INSXBRL Instance Document.101.SCHXBRL Taxonomy Extension Schema Document.101.CALXBRL Taxonomy Extension Calculation Linkbase Document.101.DEFXBRL Taxonomy Extension Definition Linkbase Document.101.LABXBRL Taxonomy Extension Label Linkbase Document.101.PREXBRL Taxonomy Extension Presentation Linkbase Document.*Previously filed as an exhibit to the Company’s Registration Statement on Form F1 (Reg. No. 333166056) filed with the Commission and incorporated hereinby reference.**Previously filed as exhibits to the Company’s Transition Report on Form 20F filed with the Commission on January 20, 2011 and incorporated herein byreference.***Previously filed as exhibits to the Company’s Annual Report on Form 20F filed with the Commission on February 9, 2018 and incorporated herein byreference.†Indicates management contract or compensatory plan, contract or arrangement.77LK Technology Ltd. and SubsidiariesCONSOLIDATED FINANCIAL STATEMENTSTABLE OF CONTENTSPage(s)Report of Independent Registered Public Accounting FirmF2Consolidated Financial StatementsConsolidated Balance SheetsF3Consolidated Statements of Operations and Comprehensive LossF4application.Chuang (Vincent) Tao was appointed as a member of the Board effective on August 25, 2018. Dr. Tao was the Chairman of SuperEngine Suzhou from 2014to 2017. Dr. Tao has been the president of the Seasky Angel Investment Alliance of Shanghai since 2015. Dr. Tao received his Bachelor Degree of geographicinformation and telemetry from Wuhan University in China in 1990 and received his Ph.D. from University of Calgary, Canada in 1997.Dennis Galgano was appointed as a director of the Company following the consummation of the asset exchange agreement. He was a registered consultantwith Morgan Joseph Triartisan LLC from November 2016 until October 2017, and previously served as vice chairman and head of international investment bankingfor Morgan Joseph Triartisan LLC, which is a registered broker dealer engaged in the investment banking and financial advisory industry. Mr. Galgano received aB.S. degree in Chemistry from St. John’s University and an M.B.A. from The Wharton School in 1972.Jin Shi was appointed as a director of the Company following the consummation of the asset exchange transactions. Mr. Shi has served as the managingpartner of Chum Capital Group, a merchant bank focused on helping Chinese growth companies to access global capital, since January 2013. Mr. Shi has also servedas a director of Seven Stars Cloud Group, Inc. (NASDAQ: SSC), a premium video on demand service provider, since January 2014, and joined the audit committee ofits board of directors in March 2016. He also served as a director and member of the audit committee of Pingtan Marine Enterprise, Ltd. (NASDAQ: PME), a marineenterprise group primarily engaged in ocean fishing through its subsidiaries. Mr. Shi received an EMBA degree from the Guanghua Management School of BeijingUniversity, and a Bachelor’s degree of science in Chemical Engineering from Tianjin University.Jiming Ha was appointed as a director of the Company following the consummation of the asset exchange agreement, and has also served as a seniorresearch fellow for the China Finance 40 Forum since March 1, 2018, and previously served as a managing director of Goldman Sachs from January 2017 to April2017. Mr. Ha served as a vice chairman and chief investment strategist of the Investment Strategy Group for Private Wealth Management at Goldman Sachs from2010 to January 2017. Mr. Ha holds a PhD in Economics from the University of Kansas and Master’s and Bachelor’s degrees of science from Fudan University.Zhihao Xu was appointed as a director of the Company following the consummation of the asset exchange transactions. Mr. Xu has served as the chiefexecutive officer of Geely Group Co., Ltd., in Hangzhou, China, since December 2017, and previously served as the chairman and chief executive officer of BeijingDingchengrenhe Investment Co., Ltd., a funds management company, from January 2017 to December 2017. Mr. Xu served as the chairman of president of HNAUSOLV CO., LTD., and the chief innovation officer of HNA Logistics Group from January 2014 to December 2016, and prior to that as the chairman of GopayInnovation Technology Co. Ltd., an online payment system operator supporting online money transfers, from April 2012 to January 2014. Mr. Xu graduated from theBusiness School of Renmin University of China and from the Wudaokou Finance College of Tsinghua University with a fund qualification certificate and securitiesqualification certificate.B. COMPENSATION.Compensation of Directors and Executive OfficersFor the ninemonth transition period ended September 30, 2018 and the fiscal year ended December 31, 2017, we did not pay any cash compensation to ourexecutive officers of LK Technology Ltd. and a to our directors for serving on our board of directors of LK Technology Ltd.37Other than nonemployee directors, we do not intend to compensate directors for serving on our board of directors or any of its committees. We do,however, intend to reimburse each member of our board of directors for outofpocket expenses incurred by each director in connection with attending meetings ofthe board of directors and its committees.AdministrationThe Incentive Plan is administered by our board of directors, or at the discretion of the board, by our compensation committee. Our board of directors hasdelegated authority to our compensation committee to administer the Incentive Plan. Subject to the terms of the Incentive Plan, the compensation committee mayselect participants to receive awards, determine the types of awards and terms and conditions of awards, and interpret provisions of the Incentive Plan.The ordinary shares issued or to be issued under the Incentive Plan consist of authorized but unissued shares. If any ordinary shares covered by an awardare not purchased or are forfeited, or if an award otherwise terminates without delivery of any ordinary shares, then the number of ordinary shares counted againstthe aggregate number of ordinary shares available under the plan with respect to the award will, to the extent of any such forfeiture or termination, again be availablefor making awards under the Incentive Plan.EligibilityAwards may be made under the Incentive Plan to our employees, officers, directors, consultants or advisers or to any of our affiliates, and to any otherindividual whose participation in the Incentive Plan is determined to be in our best interests by our board of directors.Amendment or Termination of the PlanOur board of directors may terminate or amend the Incentive Plan at any time and for any reason. No amendment, however, may adversely impair the rightsof grantees with respect to outstanding awards. The Incentive Plan has a term of ten years. Amendments will be submitted for shareholder approval to the extentrequired by applicable stock exchange listing requirements or other applicable laws.OptionsThe Incentive Plan permits the granting of options to purchase ordinary shares intended to qualify as incentive share options under the Internal RevenueCode and share options that do not qualify as incentive share options, or nonqualified share options.The exercise price of each share option may not be less than 100% of the fair market value of our ADSs representing ordinary shares on the date of grant.In the case of certain 10% shareholders who receive incentive share options, the exercise price may not be less than 110% of the fair market value of our ADSsrepresenting ordinary shares on the date of grant. An exception to these requirements is made for options that we grant in substitution for options held byemployees of companies that we acquire. In such a case the exercise price is adjusted to preserve the economic value of the employee’s share option from his or herformer employer.The term of each share option is fixed by the compensation committee and may not exceed ten years from the date of grant. The compensation committeedetermines at what time or times each option may be exercised and the period of time, if any, after retirement, death, disability or termination of employment duringwhich options may be exercised.Options may be made exercisable in installments. The award agreement provides the vesting of the options. Exercisability of options may be accelerated bythe compensation committee.38In general, an optionee may pay the exercise price of an option by (1) cash or check (in U.S. dollars or Renminbi or other local currency as approved by thecompensation committee), (2) ordinary shares held for such period of time as may be required by the compensation committee, (3) delivery of a notice of a marketorder with a broker with respect to ordinary shares then issuable upon exercise of an option, and that the broker has been directed to pay us a sufficient portion ofnet proceeds of the sale in satisfaction of the exercise price, provided that payment of such proceeds is then made to us upon settlement of such sale, (4) otherproperty acceptable to the compensation committee with a fair market value equal to the exercise price, (5) cashless exercise or (6) any combination of the foregoing.Share options granted under the Incentive Plan may not be sold, transferred, pledged, or assigned other than by will or under applicable laws of descentand distribution. However, we may permit limited transfers of nonqualified options for the benefit of immediate family members of grantees to help with estateplanning concerns or pursuant to a domestic relations order in settlement of marital property rights.Other AwardsThe compensation committee may also award under the Incentive Plan:1.ordinary shares subject to restrictions;2.deferred ordinary shares, credited as deferred ordinary share units, but ultimately payable in the form of unrestricted ordinary shares inaccordance with the terms of the grant or with the participant’s deferral election;3.ordinary share units subject to restrictions;4.unrestricted ordinary shares, which are ordinary shares issued at no cost or for a purchase price determined by the compensation committee whichare free from any restrictions under the 2011 Omnibus Incentive Plan;5.dividend equivalent rights entitling the grantee to receive credits for dividends that would be paid if the grantee had held a specified number ofordinary shares; or6.a right to receive a number of ordinary shares or, in the discretion of the compensation committee, an amount in cash or a combination of ordinaryshares and cash, based on the increase in the fair market value of the ADSs representing ordinary shares underlying the right during a statedperiod specified by the compensation committee.Effect of Certain Corporate TransactionsCertain change of control transactions involving us may cause awards granted under the Incentive Plan to vest, unless the awards are continued orsubstituted for by the surviving company in connection with the corporate transaction.Unless otherwise provided in the appropriate option agreement on the date of grant or provided by our board of directors thereafter with the consent of thegrantee, options granted under the Incentive Plan become exercisable in full following (1) a dissolution of our company or a merger, consolidation or reorganizationof our company with one or more other entities in which we are not the surviving entity, (2) a sale of substantially all of our assets to another person or entity, or (3)any transaction (including without limitation a merger or reorganization in which we are the surviving entity) which results in any person or entity owning 50% ormore of the combined voting power of all classes of our shares.39Adjustments for Dividends and Similar EventsThe compensation committee will make appropriate adjustments in outstanding awards and the number of ordinary shares available for issuance under theIncentive Plan, including the individual limitations on awards, to reflect ordinary share dividends, stock splits and other similar events.C. BOARD PRACTICES.Board of DirectorsOur board of directors consists of six members being Messrs. Xuesong Song, Kegang Peng, Dennis Galgano, Jin Shi, Jiming Ha and Zhiaho Xu. Ourdirectors hold office until our annual meeting of shareholders, where their successors will be duly elected and qualified, or until the directors’ death, resignation orremoval, whichever is earlier. Our directors are not subject to a term of office and hold office until their resignation, death or incapacity or until their respectivesuccessors have been elected and qualified in accordance with our fourth amended and restated memorandum of association and articles of association. A directorwill be removed from office if, among other things, the director (1) becomes bankrupt, (2) dies or becomes of unsound mind, or (3) is absent from meetings of ourboard of directors for six consecutive months without leave and our board of directors resolves that the office is vacated. A director is not entitled to any specialbenefits upon termination of service with the company.Director IndependenceOur board of directors consists of six members; Messrs. Dennis Galgano, Jin Shi, Jiming Ha and Zhihao Xu have been determined by us to be independentdirectors within the meaning of the independent director guidelines of the NASDAQ Corporate Governance Rules (the “NASDAQ Rules”).Committees of Our Board of DirectorsTo enhance our corporate governance, we established three committees under our board of directors: an audit committee, a compensation committee, and anominating and corporate governance committee. We have adopted a charter for each of these committees. The committees have the following functions andmembers.Audit CommitteeOur audit committee reports to our board of directors regarding the appointment of our independent public accountants, the scope and results of ourannual audits, compliance with our accounting and financial policies and management’s procedures and policies relating to the adequacy of our internal accountingcontrols. Our audit committee consists of Messrs. Dennis Galgano, Jin Shi, and Jiming Ha. Mr. Galgano, having accounting and financial management expertise,serves as the chairman of the audit committee and is an “audit committee financial expert” as defined by the rules and regulations of the SEC. Our board of directorshas determined that each of these persons meet the definition of an “independent director” under the applicable NASDAQ Rules and under Rule 10A3 of theSecurities Exchange Act of 1934, as amended (the “Exchange Act”).Our audit committee is responsible for, among other things:●the appointment, evaluation, compensation, oversight and termination of the work of our independent auditor (including resolution of disagreementsbetween management and the independent auditor regarding financial reporting);●an annual performance evaluation of the audit committee;●establishing procedures for the receipt, retention and treatment of complaints regarding accounting, internal accounting controls, auditing matters orpotential violations of law, and the confidential, anonymous submission by our employees of concerns regarding questionable accounting or auditingmatters or potential violations of law;40●ensuring that it receives an transition report from our independent auditor describing our internal control procedures and any steps taken to deal withmaterial control deficiencies and attesting to the auditor’s independence and describing all relationships between the auditor and us;●reviewing our annual audited financial statements and quarterly financial statements with management and our independent auditor;●reviewing and approving all proposed related party transactions;●reviewing our policies with respect to risk assessment and risk management;●meeting separately and periodically with management and our independent auditor; and●reporting regularly to our board of directors.Compensation CommitteeOur compensation committee assists the board of directors in reviewing and approving the compensation structure of our directors and executive officers,including all forms of compensation to be provided to our directors and executive officers. In addition, the compensation committee reviews share compensationarrangements for all of our other employees. Members of the compensation committee are not prohibited from direct involvement in determining their owncompensation. Our chief executive officer is not permitted to be present at any committee meeting during which his or her compensation is deliberated. Ourcompensation committee consists of Dennis Galgano and Jin Shi, with Mr. Shi serving as the chairman of the compensation committee. Our board of directors hasdetermined that each of these persons meet the definition of “independent director” under the applicable requirements of the NASDAQ Rules.Our compensation committee is responsible for, among other things:●reviewing and approving corporate goals and objectives relevant to the compensation of our chief executive officer, evaluating the performance of ourchief executive officer in light of those goals and objectives and setting the compensation level of our chief executive officer based on this evaluation;●reviewing and making recommendations to the board with respect to the compensation of our executives, incentive compensation and equitybasedplans that are subject to board approval; and●providing annual performance evaluations of the compensation committee.Nominating and Corporate Governance CommitteeOur nominating and corporate governance committee assists the board of directors in identifying and selecting or recommending individuals qualified tobecome our directors, developing and recommending corporate governance principles and overseeing the evaluation of our board of directors and management. Ournominating and corporate governance committee consists of Jiming Ha and Zhihao Xue, with Mr. Ha serving as the chairman of the nominating and corporategovernance committee. Our board of directors has determined that each of these persons meet the definition of “independent director” under the applicablerequirements of the NASDAQ Rules.Our nominating and corporate governance committee is responsible for, among other things:●selecting and recommending to our board nominees for election or reelection to our board, or for appointment to fill any vacancy;●reviewing annually with our board the current composition of the board of directors with regards to characteristics such as independence, age, skills,experience and availability of service to us;●selecting and recommending to our board the names of directors to serve as members of the audit committee and the compensation committee, as wellas the nominating and corporate governance committee itself; advising our board of directors periodically with regards to significant developments inthe law and practice of corporate governance as well as our compliance with applicable laws and regulations, and making recommendations to ourboard of directors on all matters of corporate governance and on any remedial action to be taken; and●monitoring compliance with our code of business conduct and ethics, including reviewing the adequacy and effectiveness of our procedures to ensureproper compliance.41Code of Business Conduct and EthicsOur board of directors adopted a code of business conduct and ethics applicable to our directors, officers and employees.Duties of DirectorsUnder British Virgin Islands law, our directors have a duty to act honestly, in good faith and with a view to our best interests. Our directors also have a dutyto exercise care, diligence and skills that a reasonably prudent person would exercise in comparable circumstances. In fulfilling their duty of care to us, our directorsmust ensure compliance with our memorandum of association and articles of association. We have the right to seek damages if a duty owed by our directors isbreached.The functions and powers of our board of directors include, among others:●appointing officers and determining the term of office of the officers;●authorizing the payment of donations to religious, charitable, public or other bodies, clubs, funds or associations as deemed advisable;●exercising the borrowing powers of the company and mortgaging the property of the company;●executing cheques, promissory notes and other negotiable instruments on behalf of the company; and●maintaining or registering a register of mortgages, charges or other encumbrances of the company.Remuneration and BorrowingThe directors may receive such remuneration as our board of directors may determine from time to time. Each director is entitled to be repaid or prepaid alltraveling, hotel and incidental expenses reasonably incurred or expected to be incurred in attending meetings of our board of directors or committees of our board ofdirectors or shareholder meetings or otherwise in connection with the discharge of his or her duties as a director. The compensation committee will assist thedirectors in reviewing and approving the compensation structure for the directors.Our board of directors may exercise all the powers of the company to borrow money and to mortgage or charge our undertakings and property or any partthereof, to issue debentures, debenture stock and other securities whenever money is borrowed or as security for any debt, liability or obligation of the company orof any third party.QualificationA director is not required to hold shares as a qualification to office.42Limitation on Liability and Other Indemnification MattersBritish Virgin Islands law does not limit the extent to which a company’s memorandum of association and articles of association may provide forindemnification of officers and directors, except to the extent any such provision may be held by the British Virgin Islands courts to be contrary to public policy,such as to provide indemnification against civil fraud or the consequences of committing a crime.Under our memorandum of association and articles of association, we may indemnify our directors, officers and liquidators against all expenses, includinglegal fees, and against all judgments, fines and amounts paid in settlement and reasonably incurred in connection with civil, criminal, administrative or investigativeproceedings to which they are party or are threatened to be made a party by reason of their acting as our director, officer or liquidator. To be entitled toindemnification, these persons must have acted honestly and in good faith with a view to the best interest of the company and, in the case of criminal proceedings,they must have had no reasonable cause to believe their conduct was unlawful.Compensation Committee Interlocks and Insider ParticipationNone of the members of our compensation committee is an officer or employee of our company. None of our executive officers currently serves, or in thepast year has served, as a member of the board of directors or compensation committee of any entity that has one or more executive officers serving on our board ofdirectors or compensation committee.Employment AgreementsOn August 19, 2018, the Company entered into an Employment Agreement (the “Song Agreement”) with Mr. Xuesong Song, to serve as the ChiefExecutive Officer of the Company for a fouryear term, subject to renewal. Under the terms of the Song Agreement, Mr. Song will receive no salary for his servicesbut will be eligible for an annual cash bonus in the Board’s sole discretion.On August 19, 2018, the Company entered into an Employment Agreement (the “Yu Agreement”) with Mr. Jie Yu, to serve as the Chief Financial Officer ofthe Company for a fouryear term, subject to renewal. Under the terms of the Yu Agreement, Mr. Yu will receive an annual salary of RMB700,000, and will be eligiblefor an annual cash bonus in the Board’s sole discretion.D. EMPLOYEES.As of September 30, 2018 and December 31, 2017, we had a total of 107 and 37 fulltime employees, including 48 and 13 in research and development, 9 and 2in sales and marketing and the rest in a variety of other divisions, respectively. All of our employees are fulltime employees. None of our employees is currentlyrepresented by a union and/or collective bargaining agreements. We believe that we have good relations with our employees and since our inception we have hadno history of work stoppages or union organizing campaigns.E. SHARE OWNERSHIP.The following table provides information as to the beneficial ownership of our ordinary shares as of October 10, 2018, by the persons listed. Beneficialownership of shares is determined under the rules of the SEC and generally includes any shares over which a person exercises sole or shared voting or investmentpower. For purposes of the following table, a person is deemed to have beneficial ownership of any ordinary shares if such person has the right to acquire suchshares within 60 days of October 10, 2018. For purposes of computing the percentage of outstanding shares held by each person, any shares that such person hasthe right to acquire within 60 days after of October 10, 2018 are deemed to be outstanding, but are not deemed to be outstanding for the purpose of computing thepercentage ownership of any other person. Except as otherwise noted, the persons named in the table have sole voting and investment power with respect to all ofthe ordinary shares beneficially owned by them. Unless otherwise indicated, the address of each person listed is c/o Luokung Technologies, LAB 32, SOHO 3Q, No9, Guanghua Road, Chaoyang District, Beijing, People’s Republic of China.43Percentage ownership in the following table is based on 199,317,558 ordinary shares outstanding on October 10, 2018.Number ofsharesPercent ofclassDirectors and named executive officersCharm Dragon International Limited (1)4,030,8822.03%Xuesong Song, Chairman, Chief Executive Officer and Director(2)38,156,43019.30%Kegang Peng, Vice President and Director (3)17,231,9558.71%Dennis Galgano, Director75,796*%Jin Shi, DirectorJiming Ha, DirectorZhihao Xu, Director (4)7,579,1843.83%Dongpu Zhang, President (5)2,321,7921.17%Chuang Tao, Director (6)1,221,996*%Directors and executive officers as a group (10 persons)66,587,15233.69%(1)Charm Dragon International Limited is a British Virgin Islands company controlled by Mr. Xuesong Song.(2)Consists of (i) 4,030,882 shares owned directly by Charm Dragon International Limited, a British Virgin Islands company and (ii) 22,624,793 shares owneddirectly by Bravo First Development Limited, a British Virgin Islands company. Mr. Xuesong Song is the controlling shareholder of Bravo First DevelopmentLimited. Mr. Xuesong Song is the sole director of Charm Dragon International Limited.(3)Consists of 17,231,955 shares owned directly by Plenty Prestige Enterprises Limited, a British Virgin Islands company. Mr. Kegang Peng is the sole director ofPlenty Prestige Enterprises Limited.(4)Consists of 7,579,184 shares directly owned by Geely Group Limited., a Chinese company. Mr. Zhihao Xu is the Chief Executive Officer of Geely GroupLimited.(5)Consists of 2,321,792 shares owned directly by Genoa Peak Limited, a British Virgin Islands company. Mr. Dongpu Zhang controls Genoa Peak Limited.(6)Consists of 1,221,996 shares owned directly by Globalearth Holdings Limited, a British Virgin Islands company. Mr. Chuang Tao controls Globalearth HoldingsLimited.*Represents less than 1% of shares outstandingITEM 7. MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS.A. MAJOR SHAREHOLDERSPlease refer to Item 6.E “Directors, Senior Management and Employees — Share Ownership.”To our knowledge, (A) we are not directly or indirectly owned or controlled by (i) another corporation or (ii) any foreign government and (B) there are noarrangements (including any announced or expected takeover bid), the operation of which may at a subsequent date result in a change in our control.The voting rights of our major shareholders do not differ from the voting rights of other holders of the same class of shares.44B. RELATED PARTY TRANSACTIONS. BUSINESS RELATIONSHIPS.Our subsidiaries, consolidated affiliated entities, and the subsidiaries of the consolidated affiliated entities have engaged, during the ordinary course ofbusiness, in a number of customary transactions with each other. All of these intercompany balances have been eliminated in consolidation.As of December 31, 2017, we had amounts due from related parties, C Media Limited and Ya Tuo Ji International Consultancy (Beijing) Limited, in theamounts of $11.8 million and $0.2 million, respectively. These amounts due from related parties are short term in nature, noninterest bearing, unsecured andrepayable on demand.As of December 31, 2017, we had amounts due to related parties, Mr. Xuesong Song, our chairman and chief executive officer, Thumb Beijing Branch andThumb Shenzhen Branch, in the amounts of $2.9 million, $0.6 million and $0.03 million, respectively. These amounts due to related parties are short term in nature,noninterest bearing, unsecured and payable on demand.We are party to a series of control agreements with Beijing Zhong Chuan Shi Xun. In addition, our chief executive officer, Mr. Xuesong Song, serves as andofficer of Beijing Zhong Chuan Shi Xun and is a shareholder of Beijing Zhong Chuan Shi Xun. The following table sets forth the relationship of Mr. Song withBeijing Zhong Chuan Shi Xun:NameRelationship withLuokung TechnologyRelationship withBeijing Zhong Chuan Shi XunPercentageOwnership Interest inBeijing Zhong Chuan Shi XunXuesong SongChief Executive OfficerChief Executive Officer61.83%C. INTERESTS OF EXPERTS AND COUNSEL.None.ITEM 8. FINANCIAL INFORMATION.A. CONSOLIDATED STATEMENTS AND OTHER FINANCIAL INFORMATION.See “Item 18. Financial Statements.”Legal ProceedingsTo our knowledge, other than as described below there are no material legal proceedings threatened against us. From time to time, we may be subject tovarious claims and legal actions arising in the ordinary course of business. Following the consummation of the AEA, we became successor in interest to the legalproceedings described below.Litigation with Shanghai Fusheng Weier Intelligent Control Technology Co., Ltd.On January 22, 2016, Zhong Chuan Rui You and Shanghai Fusheng Weier Intelligent Control Technology Co., Ltd. (“Fusheng Weier”) signed a contract forequipment of $1,652,842 (RMB10,800,000). Since Zhong Chuan Rui You did not make the payments of $1,126,381 (RMB7,360,000) on the due dates, Fusheng Weierfiled a lawsuit against Zhong Chuan Rui You in Shanghai Xuhui District People's Court on October 8, 2016. On March 9, 2017, Xuhui District People's Court issuedthe verdict requiring Zhong Chuan Rui You to pay the overdue debts. In August 2017, C Media Limited made the payment of $512,075 (RMB3,346,000). Theremaining balance has been accrued in accounts payable. The payment schedule for the remaining balance is being negotiated by the two parties. On February 5,2018, a hearing was held adding Zhong Chuan Shi Xun as a defendant. The Group plans to settle the remaining balance within one year.45Lawsuit with Gansu Jinlun Culture Media Co., Ltd.On August 22, 2014, Zhong Chuan Rui You and Gansu Jinlun Culture Media Co., Ltd. (“Gansu Jinlun”) signed a “Lanzhou Railway Bureau AirconditionedTrain WiFi Network System Advertising Operation Rights Agreement” for advertising on 72 trains of $1,467,880 (RMB9,604,633). Due to the dispute on theproject implementation, Zhong Chuan Rui You did not pay the advertising fee. On August 23, 2017, Gansu Jinlun filed a lawsuit with Gansu Intermediate People'sCourt. On December 19, 2017, Gansu Intermediate People's Court issued a verdict, ruling that Zhong Chuan Rui You settle the overdue advertising fee. Since only 18out of 72 trains have been installed with Wifi network system, Zhong Chuan Rui You disputed and appealed to the verdict. The next court trial date has not yet beendetermined. C Media and Gansu Jinlun are negotiating a potential settlement to resume the contract. According to the legal counsel, it is probable that the settlementwill amount to approximately $459,000 (RMB3,000,000); therefore, this amount has been accrued in accounts payable as at December 31, 2017.Litigation with Shenzhen Hua Xun Fang Zhou Technology Co., Ltd.On June 16, 2015, Zhong Chuan Rui You signed a cooperation agreement with Shenzhen Hua Xun Fang Zhou Technology Co., Ltd. (“Shenzhen Hua Xun”)and Xuesong Song, a major shareholder of C Media Limited. Pursuant to this agreement, Zhong Chuan Rui You procures equipment from Shenzhen Hua Xun.Xuesong Song acts as a joint liability guarantor for the entire debts of Zhong Chuan Rui You under this agreement. As Zhong Chuan Rui You did not make thepayments on the due dates, Shenzhen Hua Xun filed a lawsuit with Shenzhen Baoan District People's Court on May 31, 2016. On November 1, 2016, Zhong ChuanRui You, Xuesong Song and Shenzhen Hua Xun reached a settlement in Shenzhen Baoan District People's Court to settle $1,735,389 (RMB11,355,000) in fourinstalments. On December 30, 2017, the debt was assigned to C Media Limited.Dividend PolicyWe currently intend to retain all of our available funds and future earnings for use in the operation and expansion of our business and do not anticipatepaying cash dividends in the foreseeable future. Under the terms of our Amended and Restated Memorandum and Articles of Association the declaration andpayment of any dividends in the future will be determined by our board of directors, in its discretion, and will depend on a number of factors, including our earnings,capital requirements and overall financial condition and our ability to receive dividends from our subsidiaries. If we pay any dividends, we will pay our ADS holders’dividends with respect to their underlying shares to the same extent as holders of our ordinary shares, subject to the terms of the deposit agreement, including thefees and expenses payable thereunder. Cash dividends on our ordinary shares, if any, will be paid in U.S. dollars.Our ability to receive dividends from our subsidiaries may limit our ability to pay dividends on our ordinary shares. See Risk Factors – Risks Related toDoing Business in China – Our holding company structure may limit the payment of dividends” and “Item 10. Additional Information – D. Exchange Controls –Dividend Distribution”.B. SIGNIFICANT CHANGES.N/AITEM 9. THE OFFER AND LISTINGA. OFFER AND LISTING DETAILS.Markets and Share Price HistoryOur ordinary shares are not currently listed on any trading market. Our American Depository Shares (“ADSs”) were voluntarily delisted from the NASDAQCapital Market on September 19, 2018. We have applied to NASDAQ for the listing of our ordinary shares on the NASDAQ Capital Market and received an approvalfor listing of Ordinary Shares on August 6, 2018, and as of the date of this transition report, that application and approval are currently under review.46The table below sets forth the high and low reported sales prices in dollars of our ordinary shares, which are represented by ADSs, as reported byNASDAQ in the periods as indicated:ADSHighLowAnnual Highs and Lows (as of the fiscal year end 09/30 for the five most recent full financial years)*20175.592.67201610.21.62Quarterly Highs and Lows (for the two most recent full financial years and any subsequent period, based on calendarquarter end)*2018Third Quarter8.006.30Second Quarter8.824.25First Quarter6.403.702017Fourth Quarter5.592.91Third Quarter3.992.67Second Quarter4.063.07First Quarter5.152.832016Fourth Quarter6.594.20Third Quarter10.201.62Second Quarter3.101.97First Quarter3.602.12Monthly Highs and Lows (for the most recent six months)September 20188.006.41August 20187.706.63July 20187.506.30June 20188.827.55May 20187.805.92April 20187.454.25*The Company effected a 1for10 reverse stock split of its ordinary shares on November 6, 2012 (the “Reverse Split”). The ratio between each AmericanDepositary Share (“ADS”) and its underlying ordinary share postReverse Split remains the same, namely, one ADR remains to represent one ordinary sharepost the Reverse Split. The price listed here after November 6, 2012 reflected the effect from the Reverse Split.B. PLAN OF DISTRIBUTION.Not Applicable.C. MARKETS.Our ordinary shares are not currently listed on any trading market. Our ADSs were voluntarily delisted from the NASDAQ Capital Market on September 19,2018. We have applied to NASDAQ for the listing of our ordinary shares on the NASDAQ Capital Market and received an approval for listing of Ordinary Shares onAugust 6, 2018, and as of the date of this transition report, that application and approval are currently under review.47D. SELLING SHAREHOLDERS.Not applicable.E. DILUTION.Not applicable.F. EXPENSES OF THE ISSUE.Not applicable.ITEM 10. ADDITIONAL INFORMATION.A. SHARE CAPITALNot applicable.B. MEMORANDUM AND ARTICLES OF ASSOCIATIONWe are a British Virgin Islands company incorporated with limited liability and our affairs are governed by the provisions of our memorandum of associationand articles of association, as amended and restated from time to time, and by the provisions of applicable British Virgin Islands law.Our memorandum of association and articles of association authorize the issuance of up to 251,000,000 shares, which are designated into (i) 250,000,000 ofordinary shares of the Company (“Ordinary Shares”), and (ii) 1,000,000 preferred shares of the Company (“Preferred Shares”), in each case with the rights,preferences and privileges as set out in the memorandum and articles of association of the Company.Please see below for a description of our ADSs under “Item 12. Description of Securities Other Than Equity Securities – D. American Depository Shares.”The following is a summary of the material provisions of our ordinary shares and our memorandum of association and articles of association.Ordinary SharesAll of our issued and outstanding ordinary shares are fully paid and nonassessable. Holders of our ordinary shares who are nonresidents of the BritishVirgin Islands may freely hold and vote their shares.Subject to the memorandum and articles of association (and, for greater clarity, without prejudice to any special rights conferred thereby on the holders ofany other shares), an Ordinary Share of the Company confers on the holder:(a)the right to one vote per Ordinary Share at a meeting of the members or on any resolution of members;(b)the right to an equal share in any distribution paid by the Company; and(c)the right to an equal share in the distribution of the surplus assets of the Company on a winding up;48Subject to the memorandum and articles of association (and, for greater clarity, without prejudice to any special rights conferred thereby on the holders ofany other shares), a Preferred Share of the Company confers on the holder:(a)the right to 399 votes per Preferred Share at a meeting of the members or on any resolution of members;(b)the right to an equal share in any distribution paid by the Company;(c)the right to an equal share in the distribution of the surplus assets of the Company on a winding up;(d)be freely transferable, in whole or in part, by Mr. Xuesong Song to any third party through one or more Private Transactions, subject toApplicable Law; and(e)be freely transferable, in whole or in part, by Mr. Xuesong Song to any third party through one or more Public Transactions, subject to ApplicableLaw and Automatic Conversion of such Preferred Share(s) into Ordinary Share(s).Each Preferred Share shall be automatically converted at any time after issue and without the payment of any additional sum into an equal number of fullypaid Ordinary Shares upon the conclusion of any transfer by Mr. Xuesong Song to any third party through one or more Public Transactions.Limitation on Liability and Indemnification MattersUnder British Virgin Islands law, each of our directors and officers, in performing his or her functions, is required to act honestly and in good faith with aview to our best interests and exercise the care, diligence and skill that a reasonably prudent person would exercise in comparable circumstances. Our memorandumof association and articles of association provide that, to the fullest extent permitted by British Virgin Islands law or any other applicable laws, our directors will notbe personally liable to us or our shareholders for any acts or omissions in the performance of their duties. Such limitation of liability does not affect the availabilityof equitable remedies such as injunctive relief or rescission. These provisions will not limit the liability of directors under United States federal securities laws.We may indemnify any of our directors or anyone serving at our request as a director of another entity against all expenses, including legal fees, andagainst all judgments, fines and amounts paid in settlement and reasonably incurred in connection with legal, administrative or investigative proceedings. We mayonly indemnify a director if he or she acted honestly and in good faith with the view to our best interests and, in the case of criminal proceedings, the director hadno reasonable cause to believe that his or her conduct was unlawful. The decision of our board of directors as to whether the director acted honestly and in goodfaith with a view to our best interests and as to whether the director had no reasonable cause to believe that his or her conduct was unlawful, is in the absence offraud sufficient for the purposes of indemnification, unless a question of law is involved. The termination of any proceedings by any judgment, order, settlement,conviction or the entry of no plea does not, by itself, create a presumption that a director did not act honestly and in good faith and with a view to our best interestsor that the director had reasonable cause to believe that his or her conduct was unlawful. If a director to be indemnified has been successful in defense of anyproceedings referred to above, the director is entitled to be indemnified against all expenses, including legal fees, and against all judgments, fines and amounts paidin settlement and reasonably incurred by the director or officer in connection with the proceedings.We may purchase and maintain insurance in relation to any of our directors or officers against any liability asserted against the directors or officers andincurred by the directors or officers in that capacity, whether or not we have or would have had the power to indemnify the directors or officers against the liabilityas provided in our memorandum of association and articles of association.Insofar as indemnification for liabilities arising under the Securities Act may be permitted for our directors or officers under the foregoing provisions, wehave been informed that in the opinion of the Securities and Exchange Commission, such indemnification is against public policy as expressed in the Securities Actand is therefore unenforceable as a matter of United States law.49Differences in Corporate LawWe were incorporated under, and are governed by, the laws of the British Virgin Islands. The corporate statutes of the State of Delaware and the BritishVirgin Islands are similar, and the flexibility available under British Virgin Islands law has enabled us to adopt memorandum of association and articles of associationthat will provide shareholders with rights that do not vary in any material respect from those they would enjoy if we were incorporated under the Delaware GeneralCorporation Law, or Delaware corporate law. Set forth below is a summary of some of the differences between provisions of the BVI Act applicable to us and thelaws application to companies incorporated in Delaware and their shareholders.Director’s Fiduciary DutiesUnder Delaware corporate law, a director of a Delaware corporation has a fiduciary duty to the corporation and its stockholders. This duty has twocomponents: the duty of care and the duty of loyalty. The duty of care requires that a director act in good faith, with the care that an ordinarily prudent personwould exercise under similar circumstances. Under this duty, a director must inform himself of, and disclose to stockholders, all material information reasonablyavailable regarding a significant transaction. The duty of loyalty requires that a director act in a manner he reasonably believes to be in the best interests of thecorporation. He must not use his corporate position for personal gain or advantage. This duty prohibits selfdealing by a director and mandates that the bestinterest of the corporation and its stockholders take precedence over any interest possessed by a director, officer or controlling stockholder and not shared by thestockholders generally. In general, actions of a director are presumed to have been made on an informed basis, in good faith and in the honest belief that the actiontaken was in the best interests of the corporation. However, this presumption may be rebutted by evidence of a breach of one of the fiduciary duties. Should suchevidence be presented concerning a transaction by a director, a director must prove the procedural fairness of the transaction, and that the transaction was of fairvalue to the corporation.British Virgin Islands law provides that every director of a British Virgin Islands company in exercising his powers or performing his duties shall acthonestly and in good faith and in what the director believes to be in the best interests of the company. Additionally, the director shall exercise the care, diligence andskill that a reasonable director would exercise in the same circumstances taking into account the nature of the company, the nature of the decision and the positionof the director and his responsibilities. In addition, British Virgin Islands law provides that a director shall exercise his powers as a director for a proper purpose andshall not act, or agree to the company acting, in a manner that contravenes British Virgin Islands law or the memorandum association or articles of association of thecompany.Amendment of Governing DocumentsUnder Delaware corporate law, with very limited exceptions, a vote of the stockholders is required to amend the certificate of incorporation. Under BritishVirgin Islands law and our memorandum of association and articles of association, (i) our shareholders may amend our memorandum of association and articles ofassociation by a resolution of shareholders, or (ii) our board of directors may amend our memorandum of association and articles of association by a resolution ofdirectors without a requirement for a resolution of shareholders so long as the amendment does not:●restrict the rights of the shareholders to amend the memorandum of association and articles of association;●change the percentage of shareholders required to pass a resolution of shareholders to amend the memorandum of association and articles ofassociation;●amend the memorandum of association and articles of association in circumstances where the memorandum of association and articles ofassociation cannot be amended by the shareholders; or●amend the provisions of memorandum of association or the articles of association pertaining to “rights attaching to shares,” “rights not varied bythe issue of the shares pari passu,” “variation of rights” and “amendment of memorandum and articles”.50Written Consent of DirectorsUnder Delaware corporate law, directors may act by written consent only on the basis of a unanimous vote. Under British Virgin Islands law, directors’consents need only a majority of directors signing to take effect.Written Consent of ShareholdersUnder Delaware corporate law, unless otherwise provided in the certificate of incorporation, any action to be taken at any annual or special meeting ofstockholders of a corporation, may be taken by written consent of the holders of outstanding stock having not less than the minimum number of votes that wouldbe necessary to take such action at a meeting. As permitted by British Virgin Islands law, shareholders’ consents need only a majority of shareholders signing totake effect. Our memorandum of association and articles of association provide that shareholders may approve corporate matters by way of a resolution consentedto at a meeting of shareholders or in writing by a majority of shareholders entitled to vote thereon.Shareholder ProposalsUnder Delaware corporate law, a shareholder has the right to put any proposal before the annual meeting of shareholders, provided it complies with thenotice provisions in the governing documents. A special meeting may be called by the board of directors or any other person authorized to do so in the governingdocuments, but shareholders may be precluded from calling special meetings. British Virgin Islands law and our memorandum of association and articles ofassociation provide that our directors shall call a meeting of the shareholders if requested in writing to do so by shareholders entitled to exercise at least 30% of thevoting rights in respect of the matter for which the meeting is requested.Sale of AssetsUnder Delaware corporate law, a vote of the stockholders is required to approve the sale of assets only when all or substantially all assets are being sold. Inthe British Virgin Islands, shareholder approval is required when more than 50% of the company’s total assets by value are being disposed of or sold.Dissolution; Winding UpUnder Delaware corporate law, unless the board of directors approves the proposal to dissolve, dissolution must be approved by shareholders holding100% of the total voting power of the corporation. Only if the dissolution is initiated by the board of directors may it be approved by a simple majority of thecorporation’s outstanding shares. Delaware corporate law allows a Delaware corporation to include in its certificate of incorporation a supermajority votingrequirement in connection with dissolutions initiated by the board. As permitted by British Virgin Islands law and our memorandum of association and articles ofassociation, we may be voluntarily liquidated under Part XII of the BVI Act by resolution of directors and resolution of shareholders if we have no liabilities and weare able to pay our debts as they fall due.Redemption of SharesUnder Delaware corporate law, any stock may be made subject to redemption by the corporation at its option or at the option of the holders of such stockprovided there remains outstanding shares with full voting power. Such stock may be made redeemable for cash, property or rights, as specified in the certificate ofincorporation or in the resolution of the board of directors providing for the issue of such stock. As permitted by British Virgin Islands law, and our memorandum ofassociation and articles of association, shares may be repurchased, redeemed or otherwise acquired by us. Our directors must determine that immediately followingthe redemption or repurchase we will be able to satisfy our debts as they fall due and the value of our assets exceeds our liabilities.51Variation of Rights of SharesUnder Delaware corporate law, a corporation may vary the rights of a class of shares with the approval of a majority of the outstanding shares of suchclass, unless the certificate of incorporation provides otherwise. As permitted by British Virgin Islands law, and our memorandum of association and articles ofassociation, if our share capital is divided into more than one class of shares, we may vary the rights attached to any class only with the consent in writing ofholders of not less than threefourths of the issued shares of that class and holders of not less than threefourths of the issued shares of any other class of shareswhich may be affected by the variation.Removal of DirectorsUnder Delaware corporate law, a director of a corporation with a classified board may be removed only for cause with the approval of a majority of theoutstanding shares entitled to vote, unless the certificate provides otherwise. As permitted by British Virgin Islands law and our memorandum of association andarticles of association, directors may be removed by resolution of directors or resolution of shareholders.MergersUnder the BVI Act, two or more companies may merge or consolidate in accordance with the statutory provisions. A merger means the merging of two ormore constituent companies into one of the constituent companies, and a consolidation means the uniting of two or more constituent companies into a newcompany. In order to merger or consolidate, the directors of each constituent company must approve a written plan of merger or consolidation which must beauthorized by a resolution of shareholders.Shareholders not otherwise entitled to vote on the merger or consolidation may still acquire the right to vote if the plan of merger or consolidation containsany provision which, if proposed as an amendment to the memorandum association or articles of association, would entitle them to vote as a class or series on theproposed amendment. In any event, all shareholders must be given a copy of the plan of merger or consolidation irrespective of whether they are entitled to vote atthe meeting or consent to the written resolution to approve the plan of merger or consolidation.Inspection of Books and RecordsUnder Delaware corporate law, any shareholder of a corporation may for any proper purpose inspect or make copies of the corporation’s stock ledger, list ofshareholders and other books and records. Holders of our shares have no general right under British Virgin Islands law to inspect or obtain copies of our list ofshareholders or our corporate records. However, we will provide holders of our shares with annual audited financial statements. See “Where You Can FindAdditional Information.”Conflict of InterestThe BVI Act provides that a director shall, after becoming aware that he is interested in a transaction entered into or to be entered into by the company,disclose that interest to the board of directors of the company. The failure of a director to disclose that interest does not affect the validity of a transaction enteredinto by the director or the company, so long as the director’s interest was disclosed to the board prior to the company’s entry into the transaction or was notrequired to be disclosed (for example where the transaction is between the company and the director himself or is otherwise in the ordinary course of business andon usual terms and conditions). As permitted by British Virgin Islands law and our memorandum of association and articles of association, a director interested in aparticular transaction may vote on it, attend meetings at which it is considered, and sign documents on our behalf which relate to the transaction.52Transactions with Interested ShareholdersDelaware corporate law contains a business combination statute applicable to Delaware public corporations whereby, unless the corporation hasspecifically elected not to be governed by such statute by amendment to its certificate of incorporation, it is prohibited from engaging in certain businesscombinations with an “interested shareholder” for three years following the date that such person becomes an interested shareholder. An interested shareholdergenerally is a person or group who or that owns or owned 15% or more of the target’s outstanding voting stock within the past three years. This has the effect oflimiting the ability of a potential acquirer to make a twotiered bid for the target in which all shareholders would not be treated equally. The statute does not apply if,among other things, prior to the date on which such shareholder becomes an interested shareholder, the board of directors approves either the businesscombination or the transaction that resulted in the person becoming an interested shareholder. This encourages any potential acquirer of a Delaware publiccorporation to negotiate the terms of any acquisition transaction with the target’s board of directors.British Virgin Islands law has no comparable provision. As a result, we cannot avail ourselves of the types of protections afforded by the Delawarebusiness combination statute. However, although British Virgin Islands law does not regulate transactions between a company and its significant shareholders, itdoes provide that such transactions must be entered into bona fide in the best interests of the company and not with the effect of constituting a fraud on theminority shareholders.Independent DirectorsThere are no provisions under Delaware corporate law or under the BVI Act that require a majority of our directors to be independent.Cumulative VotingUnder Delaware corporate law, cumulative voting for elections of directors is not permitted unless the company’s certificate of incorporation specificallyprovides for it. Cumulative voting potentially facilitates the representation of minority shareholders on a board of directors since it permits the minority shareholderto cast all the votes to which the shareholder is entitled on a single director, which increases the shareholder’s voting power with respect to electing such director.There are no prohibitions to cumulative voting under the laws of the British Virgin Islands, but our memorandum of association and articles of association do notprovide for cumulative votingAntitakeover Provisions in Our Memorandum of association and articles of associationSome provisions of our memorandum of association and articles of association may discourage, delay or prevent a change in control of our company ormanagement that shareholders may consider favorable, including provisions that authorize our board of directors to issue preference shares in one or more seriesand to designate the price, rights, preferences, privileges and restrictions of such preference shares.C. MATERIAL CONTRACTS.On January 25, 2018, the Company executed an Asset Exchange Agreement (“AEA”) with C Media Limited, a corporation organized under the laws of theCayman Islands (“C Media”), whereby the Company agreed to purchase all the capital stock and equity interests of LK Technology Ltd, together with its whollyowned subsidiaries MMB Limited and Mobile Media (China) Limited and all respective subsidiaries from C Media in exchange for (i) 185,412,599 ordinary shares ofthe Company, par value $0.01 per share (“Ordinary Shares”), (ii) 1,000,000 preferred shares of Kingtone (“Preferred Shares”) and (iii) all issued and outstandingcapital stock or equity interests of the Company’s subsidiary, Topsky InfoTech Holdings Pte Ltd., and its whollyowned subsidiary Xi’an Softech Co., Ltd.,including all entities effectively controlled by Xi’an Softech Co., Ltd. through contractual arrangements and variable business entities.To consummate the contemplated transactions described above, the Company obtained shareholder consent at a special meeting held on May 20, 2018, (i)to authorize 1,000,000 Preferred Shares, (ii) to authorize additional Ordinary Shares so that total authorized Ordinary Shares is equal to 250,000,000 shares, (iii) to listsuch Ordinary Shares on NASDAQ, and (iv) to approve the transactions contemplated in the Asset Exchange Agreement. Additionally, NASDAQ needed toapprove the contemplated transactions prior to consummation thereof. C Media had the right to terminate the AEA if the closing had not occurred (other thanthrough the failure of C Media to comply fully with its obligations under the AEA) on or before July 31, 2018. The transactions contemplated by the AEA wereconsummated on August 17, 2018.53On January 25, 2018, five shareholders of the Company including its largest shareholder and its Chief Executive Officer executed a Securities PurchaseAgreement, whereby such shareholders agreed to sell a total of 617,988 Ordinary Shares and 282,694 American Depository Shares of the Company to Redstone YYLManagement Limited, a company incorporated in the British Virgin Islands, in exchange for an aggregate purchase price of $1,897,860.09.On August 25, 2018, LK Technology entered into a Stock Purchase Agreement (the “Agreement”) with the shareholders (“Shareholders”) of SuperengineHoldings Limited, a limited liability company organized under the laws of the British Virgin Islands (the “Superengine”), pursuant to which LK Technology acquiredall of the issued and outstanding capital stock of Superengine for an aggregate purchase price of US$60 million (the “Purchase Price”), which are paid by theissuance of our Ordinary Shares in an amount equal to the quotient of (x) the Purchase Price divided by (y) the average of the closing prices of the Ordinary Shareson the NASDAQ Capital Market over the 12 months period preceding July 31, 2018. We are a party to the Agreement in connection with the issuance of theOrdinary Shares and certain other limited purposes.D. EXCHANGE CONTROLS.This section sets forth a summary of the most significant regulations or requirements that affect our business activities in China or our shareholders’ rightto receive dividends and other distributions from us.Regulations on Internet Content ProvidersThe Administrative Measures on Internet Information Services, or the Internet Content Measures, which was promulgated by the State Council onSeptember 25, 2000 and amended on January 8, 2011, set out guidelines on the provision of internet information services. The Internet Content Measures specifiesthat internet information services regarding news, publications, education, medical and health care, pharmacy and medical appliances, among other things, arerequired to be examined, approved and regulated by the relevant authorities. Internet information providers are prohibited from providing services beyond thoseincluded in the scope of their licenses or filings. Furthermore, the Internet Content Measures specifies a list of prohibited content. Internet information providers areprohibited from producing, copying, publishing or distributing information that is humiliating or defamatory to others or that infringes the legal rights of others.Internet information providers that violate such prohibition may face criminal charges or administrative sanctions. Internet information providers must monitor andcontrol the information posted on their websites. If any prohibited content is found, they must remove the content immediately, keep a record of such content andreport to the relevant authorities.The Internet Content Measures classifies internet information services into commercial internet information services and noncommercial internetinformation services. Commercial internet information services refer to services that provide information or services to internet users with charge. A provider ofcommercial internet information services must obtain an ICP License.Regulations on Internet Audiovideo Program ServicesOn December 20, 2007, the MII and the State Administration of Press, Publication, Radio, Film and Television, or the SAPPRFT, jointly issued theAdministrative Provisions for the Internet AudioVideo Program Service, or the Audiovideo Program Provisions, which came into effect on January 31, 2008 andwas amended on August 28, 2015. The Audiovideo Program Provisions defines “internet audiovideo program services” as producing, editing and integrating ofaudiovideo programs, supplying audiovideo programs to the public via the internet, and providing audiovideo programs uploading and transmission services to athird party. Entities providing internet audiovideo programs services must obtain an internet audiovideo program transmission license. Applicants for such licensesshall be stateowned or statecontrolled entities unless an internet audiovideo program transmission license has been obtained prior to the effectiveness of theAudiovideo Program Provisions in accordance with the thenineffect laws and regulations. In addition, foreigninvested enterprises are not allowed to engage inthe abovementioned services. According to the Audiovideo Program Provisions and other relevant laws and regulations, audiovideo programs provided by theentities supplying Internet audiovideo program services shall not contain any illegal content or other content prohibited by the laws and regulations, such as anycontent against the basic principles in the PRC Constitution, any content that damages the sovereignty of the country or national security, and any content thatdisturbs social order or undermine social stability. An audiovideo program that has already been broadcast shall be retained in full for at least 60 days. Movies,television programs and other media content used as Internet audiovideo programs shall comply with relevant administrative regulations on programs broadcaststhrough radio, movie and television channels. Entities providing services related to Internet audiovideo programs shall immediately delete the audiovideoprograms violating laws and regulations, keep relevant records, report relevant authorities and implement other regulatory requirements.54The Categories of the Internet AudioVideo Program Services, or the Audiovideo Program Categories, promulgated by SAPPRFT on March 10, 2017,classifies internet audio/video programs into four categories: (I) Category I internet audio/video program service, which is carried out with a form of radio station ortelevision station; (II) Category II internet audio/video program service, including (a) rebroadcasting service of current political news audio/video programs; (b)hosting, interviewing, reporting and commenting service of arts, entertainment, technology, finance and economics, sports, education and other specializedaudio/video programs; (c) producing (interviewing not included) and broadcasting service of arts, entertainment, technology, finance and economics, sports,education and other specialized audio/video programs; (d) producing and broadcasting service of internet films/dramas; (e) aggregating and broadcasting service offilms, television dramas and cartoons; (f) aggregating and broadcasting service of arts, entertainment, technology, finance and economics, sports, education andother specialized audio/video programs; and (g) live audio/video broadcasting service of cultural activities of common social organizations, sport events or otherorganization activities; and (III) Category III internet audio/video program service, including (a) aggregating service of online audio/video contents, and (b) rebroadcasting service of the audio/video programs uploaded by internet users; and (IV) Category III internet audio/video program service, including (a) rebroadcasting of the radio/television program channels; and (b) rebroadcasting of internet audio/video program channels.On May 27, 2016, the SAPPRFT issued the Notice on Relevant Issues concerning Implementing the Approval Works of Upgrading Mobile Internet AudioVideo Program Service, or the Mobile AudioVideo Program Notice. The Mobile AudioVideo Program Notice provides that the mobile Internet audiovideo programservices shall be deemed Internet audiovideo program service. Entities which have obtained the approvals to provide the Internet audiovideo program servicesmay use mobile WAP websites or mobile applications to provide audiovideo program services. Entities with regulatory approvals may operate mobile applicationsto provide the audiovideo program services The types of the programs shall be within the permitted scope as provided in the licenses and such mobile applicationsshall be filed with the SAPPRFT.Regulations on Production and Operation of Radio/Television ProgramsOn July 19, 2004, the SAPPRFT promulgated the Administrative Measures on the Production and Operation of Radio and Television Programs, or the Radioand Television Program Production Measures, which came into effect on August 20, 2004 and was amended on August 28, 2015. The Radio and Television ProgramProduction Measures provides that any business that produces or operates radio or television programs must first obtain a Radio and Television ProgramProduction and Operation Permit. Entities holding such permits shall conduct their business within the permitted scope as provided in their permits. In addition,foreigninvested enterprises are not allowed to engage in the abovementioned services.Regulations on Online Advertising ServicesOn April 24, 2015, the Standing Committee of the National People’s Congress enacted the Advertising Law of the People’s Republic of China, or the NewAdvertising Law, effective on September 1, 2015. The New Advertising Law increases the potential legal liability of advertising services providers and strengthensregulations of false advertising. On July 4, 2016, the State Administration for Industry and Commerce, or the SAIC, issued the Interim Measures of theAdministration of Online Advertising, or the SAIC Interim Measures, effective on September 1, 2016. The New Advertising Law and the SAIC Interim Measuresrequire that online advertisements may not affect users’ normal internet use and internet popup ads must display a “close” sign prominently and ensure onekeyclosing of the popup windows. The SAIC Interim Measures provides that all online advertisements must be marked “Advertisement” so that viewers can easilyidentify them as such. Moreover, the SAIC Interim Measures treats paid search results as advertisements that are subject to PRC advertisement laws, and requiresthat paid search results be conspicuously identified on search result pages as advertisements. The New Advertising Law and SAIC Interim Measures require us toconduct more stringent examination and monitoring of our advertisers and the content of their advertisements.55Regulations on Online GamesIn September 2009, the GAPP (currently known as the SAPPRFT), together with the National Copyright Administration, and the National Office ofCombating Pornography and Illegal Publications jointly issued the Notice on Further Strengthening on the Administration of Preexamination and Approval ofOnline Game and the Examination and Approval of Imported Online Game, or the Circular 13. The Circular 13 states that foreign investors are not permitted to investin online game operating businesses in the PRC via wholly foreignowned entities, Sinoforeign equity joint ventures or cooperative joint ventures or to exercisecontrol over or participate in the operation of domestic online game businesses through indirect means, such as other joint venture companies or contractual ortechnical arrangements. If the our contractual arrangements were deemed under the Circular 13 to be an “indirect means” for foreign investors to exercise controlover or participate in the operation of a domestic online game business, our contractual arrangements might be challenged by the SAPPRFT. We are not aware ofany online game companies which use the same or similar contractual arrangements having been challenged by the SAPPRFT as using those contractualarrangements as an “indirect means” for foreign investors to exercise control over or participate in the operation of a domestic online game business or having beenpenalized or ordered to terminate operations since the Circular 13 became effective. However it is unclear whether and how the Circular 13 might be interpreted orimplemented in the future. See “Risk Factors—If the PRC government finds that the agreements that establish the structure for operating certain of our operations inChina do not comply with PRC regulations relating to the relevant industries, or if these regulations or the interpretation of existing regulations change in the future,we could be subject to severe penalties or be forced to relinquish our interests in those operations.”The Interim Measures for the Administration of Online Games, or the Online Game Measures, issued by the MOC, which took effect on August 1, 2010 andamended on December 15, 2017, regulates a broad range of activities related to the online games business, including the development, production and operation ofonline games, the issuance of virtual currencies used for online games, and the provision of virtual currency trading services. The Online Game Measures providesthat any entity that is engaged in online game operations must obtain an Network Cultural Business Permit, and require the content of an imported online game to beexamined and approved by the MOC prior to the game’s launch and require a domestic online game to be filed with the MOC within 30 days after its launch. TheNotice of the Ministry of Culture on the Implementation of the Interim Measures for the Administration of Online Games, which was issued by the MOC on July 29,2010 to implement the Online Game Measures, (i) requires online game operators to protect the interests of online game users and specifies that certain terms thatmust be included in service agreements between online game operators and the users of their online games, (ii) requires content review of imported online gamesand filing procedures for domestic online games, (iii) emphasizes the protection of minors playing online games, and (iv) requests online game operators to promoterealname registration by their game users.Regulations on Information Security, Censorship and PrivacyThe Standing Committee of the National People’s Congress, China’s national legislative body, enacted the Decisions on the Maintenance of InternetSecurity on December 28, 2000 that may subject persons to criminal liabilities in China for any attempt to use the internet to: (i) gain improper entry to a computer orsystem of strategic importance; (ii) disseminate politically disruptive information; (iii) leak state secrets; (iv) spread false commercial information or (v) infringe uponintellectual property rights. In 1997, the Ministry of Public Security issued the Administration Measures on the Security Protection of Computer InformationNetwork with International Connections which prohibits using the internet to leak state secrets or to spread socially destabilizing materials. If an ICP license holderviolates these measures, the PRC government may revoke its ICP license and shut down its websites. Pursuant to the Ninth Amendment to the Criminal Law issuedby the Standing Committee of the National People’s Congress on August 29, 2015, effective on November 1, 2015, any ICP provider that fails to fulfill the obligationsrelated to internet information security as required by applicable laws and refuses to take corrective measures, will be subject to criminal liability for (i) any largescale dissemination of illegal information; (ii) any severe effect due to the leakage of users’ personal information; (iii) any serious loss of evidence of criminalactivities; or (iv) other severe situations, and any individual or entity that (i) sells or provides personal information to others unlawfully or (ii) steals or illegallyobtains any personal information will be subject to criminal liability in severe situations.56The Cybersecurity Law of the PRC, or the Cybersecurity Law, which was promulgated on November 7, 2016 by the Standing Committee of the NationalPeople’s Congress and came into effect on June 1, 2017, provides that network operators shall meet their cyber security obligations and shall take technicalmeasures and other necessary measures to protect the safety and stability of their networks. Under the Cybersecurity Law, network operators are subject to varioussecurity protectionrelated obligations, including: (i) network operators shall comply with certain obligations regarding maintenance of the security of internetsystems; (ii) network operators shall verify users’ identities before signing agreements or providing certain services such as information publishing or realtimecommunication services; (iii) when collecting or using personal information, network operators shall clearly indicate the purposes, methods and scope of theinformation collection, the use of information collection, and obtain the consent of those from whom the information is collected; (iv) network operators shall strictlypreserve the privacy of user information they collect, and establish and maintain systems to protect user privacy; (v) network operators shall strengthenmanagement of information published by users, and when they discover information prohibited by laws and regulations from publication or dissemination, theyshall immediately stop dissemination of that information, including taking measures such as deleting the information, preventing the information from spreading,saving relevant records, and reporting to the relevant governmental agencies.Regulations on Intellectual Property RightsRegulations on CopyrightThe Copyright Law of the PRC, or the Copyright Law, which took effect on June 1, 1991 and was amended in 2001 and in 2010, provides that Chinesecitizens, legal persons, or other organizations shall, whether published or not, own copyright in their copyrightable works, which include, among others, works ofliterature, art, natural science, social science, engineering technology and computer software. Copyright owners enjoy certain legal rights, including right ofpublication, right of authorship and right of reproduction. The Copyright Law as revised in 2010 extends copyright protection to Internet activities, productsdisseminated over the Internet and software products. In addition, Copyright Law provides for a voluntary registration system administered by the China CopyrightProtection Center, or the CPCC. According to the Copyright Law, an infringer of the copyrights shall be subject to various civil liabilities, which include ceasinginfringement activities, apologizing to the copyright owners and compensating the loss of copyright owner. Infringers of copyright may also subject to fines and/oradministrative or criminal liabilities in severe situations.The Computer Software Copyright Registration Measures, or the Software Copyright Measures, promulgated by the State Council on December 20, 2001and amended on January 30, 2013, regulates registrations of software copyright, exclusive licensing contracts for software copyright and assignment agreements.The National Copyright Administration, or the NCA administers software copyright registration and the CPCC, is designated as the software registration authority.The CPCC shall grant registration certificates to the Computer Software Copyrights applicants which meet the requirements of both the Software CopyrightMeasures and the Computer Software Protection Regulations (Revised in 2013).The Provisions of the Supreme People’s Court on Certain Issues Related to the Application of Law in the Trial of Civil Cases Involving Disputes onInfringement of the Information Network Dissemination Rights specifies that disseminating works, performances or audiovideo products by the internet users orthe internet service providers via the internet without the permission of the copyright owners shall be deemed to have infringed the right of dissemination of thecopyright owner.57The Measures for Administrative Protection of Copyright Related to Internet, which was jointly promulgated by the NCA and the MIIT on April 29, 2005and became effective on May 30, 2005, provides that upon receipt of an infringement notice from a legitimate copyright holder, an ICP operator must take remedialactions immediately by removing or disabling access to the infringing content. If an ICP operator knowingly transmits infringing content or fails to take remedialactions after receipt of a notice of infringement that harms public interest, the ICP operator could be subject to administrative penalties, including an order to ceaseinfringing activities, confiscation by the authorities of all income derived from the infringement activities, or payment of fines.On May 18, 2006, the State Council promulgated the Regulations on the Protection of the Right to Network Dissemination of Information (as amended in2013). Under these regulations, an owner of the network dissemination rights with respect to written works or audio or video recordings who believes thatinformation storage, search or link services provided by an Internet service provider infringe his or her rights may require that the Internet service provider delete, ordisconnect the links to, such works or recordings.Patent LawsAccording to the Patent Law of the PRC (Revised in 2008), the State Intellectual Property Office is responsible for administering patent law in the PRC. Thepatent administration departments of provincial, autonomous region or municipal governments are responsible for administering patent law within their respectivejurisdictions. The Chinese patent system adopts a firsttofile principle, which means that when more than one person file different patent applications for the sameinvention, only the person who files the application first is entitled to obtain a patent of the invention. To be patentable, an invention or a utility model must meetthree criteria: novelty, inventiveness and practicability. A patent is valid for twenty years in the case of an invention and ten years in the case of utility models anddesigns.Trademark LawsTrademarks are protected by the Trademark Law of the PRC (Revised in 2013) which was adopted in 1982 and subsequently amended in 1993, 2001 and 2013respectively as well as by the Implementation Regulations of the PRC Trademark Law adopted by the State Council in 2002 and as most recently amended on April29, 2014. The Trademark Office under the SAIC handles trademark registrations. The Trademark Office grants a tenyear term to registered trademarks and the termmay be renewed for another tenyear period upon request by the trademark owner. A trademark registrant may license its registered trademarks to another party byentering into trademark license agreements, which must be filed with the Trademark Office for its record. As with patents, the Trademark Law has adopted a firsttofile principle with respect to trademark registration. If a trademark applied for is identical or similar to another trademark which has already been registered or subjectto a preliminary examination and approval for use on the same or similar kinds of products or services, such trademark application may be rejected. Any personapplying for the registration of a trademark may not injure existing trademark rights first obtained by others, nor may any person register in advance a trademark thathas already been used by another party and has already gained a “sufficient degree of reputation” through such party’s use.Regulations on Domain NamesThe MIIT promulgated the Measures on Administration of Internet Domain Names, or the Domain Name Measures, on August 24, 2017, which took effecton November 1, 2017 and replaced the Administrative Measures on China Internet Domain Name promulgated by MII on November 5, 2004. According to theDomain Name Measures, the MIIT is in charge of the administration of PRC internet domain names. The domain name registration follows a firsttofile principle.Applicants for registration of domain names shall provide the true, accurate and complete information of their identities to domain name registration serviceinstitutions. The applicants will become the holder of such domain names upon the completion of the registration procedure.Relevant Regulations of the Hightech EnterpriseThe Ministry of Information Industry, the Ministry of Science and Technology and the State Tax Bureau collectively promulgated and issued the“Certifying Standard and Managing Measures for Hightech Enterprises” and “the Hightech Areas of Main National Support” on April 14, 2008 to certify the Hightech enterprise and encourage and support the development of the Chinese Hightech enterprises. Under the Hightech Enterprises Measures, the enterprise canenjoy the favorable tax policy when it is certified as a Hightech enterprise by the Ministry of Information Industry, the Ministry of Science and Technology and theState Tax Bureau or with its provincial branch according to the stipulated standard. The software and computer and network technology are recognized as the mainnational supported Hightech field. Kingtone Information is a Hightech enterprise and enjoys a favorable income tax rate of 15%.58Laws and Regulations of Intellectual Property RightsChina has adopted legislation governing intellectual property rights, including patents, copyrights and trademarks. China is a signatory to the maininternational conventions on intellectual property rights and became a member of the Agreement on Trade Related Aspects of Intellectual Property Rights upon itsaccession to the WTO in December 2001.PatentsThe “Patent Law of the People’s Republic of China” promulgated by the Standing Committee of the National People's Congress, adopted in 1985 andrevised in 1992, 2001 and 2008, protects registered patents. The State Intellectual Property Office of PRC handles granting patent rights, providing for a twentyyearpatent term for inventions and a tenyear patent term for utility models and designs. As we disclosed in Item 4, of this transition report on Form 20F, throughKingtone Information, we have been granted one invention patent “wireless video transmission system based on BREW platform” by the State Intellectual PropertyOffice (“SIPO”) of PRC on September 23, 2009 and therefore such invention is entitled to all the protections provided under the Patent Law for twenty years.Computer Software Copyright and AdministrationOn December 20, 2001, the State Council of PRC issued the “Regulation for Computer Software Protection of the People’s Republic of China” (the“Regulation for Computer Software Protection”) which became effective on January 1, 2002 to protect the interests of copyright owners, to promote the research andapplication and to encourage the development of the Chinese software industry. Under the Regulation for Computer Software Protection, natural persons, legalpersons or any other organizations shall have a copyright on the software developed by such persons no matter whether such software has been published. Theprotection period of software copyrights owned by the legal person or other organization is fifty years and expires on December 31 of the fiftieth year from the initialpublication date of such computer software. Currently, Kingtone Information has twelve registration certificates for software copyrights.TrademarksThe “Trademark Law of the People’s Republic of China” promulgated by the State Council of PRC, adopted in 1982 and revised in 1993 and 2001, protectsregistered trademarks. The Trademark Office under the Chinese State Administration for Industry and Commerce handles trademark registrations and grants a termof ten years to registered trademarks which are renewable for another ten years after the application to the Trademark Office by the owners of the trademarks.Trademark license agreements must be filed with the Trademark Office for record. China has a “firsttoregister” system that requires no evidence of prior use orownership. Kingtone Information has its registered trademarks as described in Item 4 of this transition report on Form 20F. Accordingly, such trademarks areentitled to the protection under the Trademark Law.Foreign Currency ExchangeOn August 29, 2008, the SAFE issued the Notice of the General Affairs Department of the State Administration of Foreign Exchange on the RelevantOperating Issues concerning the Improvement of the Administration of Payment and Settlement of Foreign Currency Capital of Foreignfunded Enterprises, orCircular 142. Pursuant to Circular 142, RMB converted from the foreign currencydenominated capital of a foreigninvested company may only be used for purposeswithin the business scope approved by the applicable governmental authority and may not be used for equity investments within the PRC unless specificallyprovided for otherwise. The use of such Renminbi capital may not be changed without SAFE’s approval and may not in any case be used to repay Renminbi loans ifthe proceeds of such loans have not been used.59See “Risk Factors — Risks Related to Doing Business in China — PRC regulation of loans and direct investment by offshore holding companies to PRCentities may delay or prevent us from using the proceeds of our initial public offering to make loans or additional capital contributions to our PRC operatingsubsidiaries, which could materially and adversely affect our liquidity and our ability to fund and expand our business”.Dividend DistributionWe are a British Virgin Islands holding company and substantially all of our operations are conducted through LK Technology. We rely on dividends andother distributions from our LK Technology and its subsidiaries to provide us with our cash flow and allow us to pay dividends on the shares underlying our ADSsand meet our other obligations. The principal regulations governing distribution of dividends paid by wholly foreignowned enterprises include:1.Wholly ForeignOwned Enterprise Law (1986), as amended; and2.Implementation Rules on Wholly ForeignOwned Enterprise Law (1990), as amended.Under these regulations, wholly foreignowned enterprises in China may pay dividends only out of their accumulated profits, if any, determined inaccordance with PRC accounting standards and regulations. In addition, wholly foreignowned enterprises in China are required to set aside at least 10% of theiraftertax profit based on PRC accounting standards each year to its general reserves until the accumulative amount of such reserves reach 50% of its registeredcapital. These reserves are not distributable as cash dividends. The board of directors of a FIE has the discretion to allocate a portion of its aftertax profits to staffwelfare and bonus funds, which may not be distributed to equity owners except in the event of liquidation.Regulation of Foreign Exchange in Certain Onshore and Offshore TransactionsIn October 2005, the SAFE issued the Notice on Issues Relating to the Administration of Foreign Exchange in Fundraising and Return InvestmentActivities of Domestic Residents Conducted via Offshore Special Purpose Companies, or SAFE Notice 75, which became effective as of November 1, 2005, and wasfurther supplemented by two implementation notices issued by the SAFE on November 24, 2005 and May 29, 2007, respectively. Under Circular 75, prior registrationwith the local SAFE branch is required for PRC residents to establish or to control an offshore company for the purposes of financing that offshore company withassets or equity interests in an onshore enterprise located in the PRC. An amendment to the registration or filing with the local SAFE branch by such PRC resident isalso required for the injection of equity interests or assets of an onshore enterprise in the offshore company or overseas funds raised by such offshore company, orany other material change with respect to the offshore company in connection with any increase or decrease of capital, transfer of shares, merger, division, equityinvestment, debt investment, or creation of any security interest over any assets located in the PRC.Under SAFE Notice 75, PRC residents are further required to repatriate into the PRC all of their dividends, profits or capital gains obtained from theirshareholdings in the offshore entity within 180 days of their receipt of such dividends, profits or capital gains. The registration and filing procedures under SAFENotice 75 are prerequisites for other approval and registration procedures necessary for capital inflow from the offshore entity, such as inbound investments orshareholders loans, or capital outflow to the offshore entity, such as the payment of profits or dividends, liquidating distributions, equity sale proceeds, or thereturn of funds upon a capital reduction. Therefore, failure to comply with such registration may subject us to certain restrictions on, including but not limited to, theincrease of the registered capital of our PRC subsidiary, making loans to our PRC subsidiary, and making distributions to us from our onshore companies.Regulations of Overseas Investments and ListingsOn August 8, 2006, six PRC regulatory agencies, including the MOFCOM, the State Assets Supervision and Administration Commission, the StateAdministration for Taxation, the State Administration for Industry and Commerce, the CSRC and the SAFE, jointly adopted the New M&A Rule, which becameeffective on September 8, 2006. This regulation, among other things, includes provisions that purport to require that an offshore SPV formed for purposes ofoverseas listing of equity interests in PRC companies and controlled directly or indirectly by PRC companies or individuals obtain the approval of the CSRC prior tothe listing and trading of such SPV’s securities on an overseas stock exchange.60On September 21, 2006, the CSRC published on its official website procedures regarding its approval of overseas listings by SPVs. The CSRC approvalprocedures require the filing of a number of documents with the CSRC and it would take several months to complete the approval process.The application of the New M&A Rule with respect to overseas listings of SPVs remains unclear with no consensus currently existing among the leadingPRC law firms regarding the scope of the applicability of the CSRC approval requirement.We believe that, based on our understanding of the current PRC laws, regulations and rules and the procedures announced on September 21, 2006, there isno requirement in this regulation that would require an application to be submitted to the MOFCOM or the CSRC for the approval of the listing and trading of ourADSs on the NASDAQ Capital Market.See “Risk Factors — Risks Related to Doing Business in China — If we were required to obtain the prior approval of the China Securities RegulatoryCommission, or CSRC, of the listing and trading of our ADSs on the NASDAQ Capital Market, we may face regulatory actions or other sanctions from the CSRC orother PRC regulatory agencies.”E. TAXATIONThe following discussion sets forth the material British Virgin Islands, PRC and U.S. federal income tax consequences of an investment in our ADSs andthe ordinary shares represented by our ADSs, sometimes referred to collectively as the “securities”. It is based upon laws and relevant interpretations thereof ineffect as of the date of this report, all of which are subject to change. This discussion does not deal with all possible tax consequences relating to an investment inthe securities, such as the tax consequences under state, local and other tax laws. As used in this discussion, “we,” “our” and “us” refers only to LuokungTechnology Ltd.British Virgin Islands TaxationUnder the law of the British Virgin Islands as currently in effect, a holder of the securities who is not a resident of the British Virgin Islands is not liable forBritish Virgin Islands tax on dividends paid with respect to the securities and all holders of the securities are not liable to the British Virgin Islands for tax on gainsrealized during that year on the sale or disposal of such ordinary shares. The British Virgin Islands does not impose a withholding tax on dividends paid by acompany incorporated or reregistered under the BVI Act.There are no capital gains, gift or inheritance taxes levied by the British Virgin Islands on companies incorporated under the BVI Act. In addition, shares ofcompanies incorporated under the BVI Act are not subject to transfer taxes, stamp duties or similar charges.There is no income tax treaty or convention currently in effect between the United States and the British Virgin Islands or between China and the BritishVirgin Islands.61People’s Republic of China TaxationIn 2007, the PRC National People’s Congress enacted the new Enterprise Income Tax Law (the “EIT Law”), which became effective on January 1, 2008. Thenew EIT Law imposes a single uniform income tax rate of 25% on all Chinese enterprises, including foreigninvested enterprises, and levies a withholding tax rate of10% on dividends payable by Chinese subsidiaries to their foreign shareholders unless any such foreign shareholders’ jurisdiction of incorporation has a tax treatywith China that provides for a different withholding agreement. Under the new EIT Law, enterprises established outside China but deemed to have a “de factomanagement body” within the country may be considered “resident enterprises” for Chinese tax purposes and, therefore, may be subject to an enterprise income taxrate of 25% on their worldwide income. Pursuant to the implementation rules of the new EIT Law, a “de facto management body” is defined as a body that hasmaterial and overall management control over the business, personnel, accounts and properties of the enterprise. Although substantially all members of ourmanagement are located in China, it is unclear whether Chinese tax authorities would require (or permit) us to be treated as PRC resident enterprises. If we aredeemed a Chinese tax resident enterprise, we may be subject to an enterprise income tax rate of 25% on our worldwide income, excluding dividends received directlyfrom another Chinese tax resident enterprise, as well as PRC enterprise income tax reporting obligations. If we are not deemed to be a Chinese tax resident enterprise,we may be subject to certain PRC withholding taxes. See “Risk Factors — Risks Related to Doing Business in China — Our holding company structure may limit thepayment of dividends.” As a result of such changes, our historical tax rates may not be indicative of our tax rates for future periods and the value of our ADSs orordinary shares may be adversely affected. If we are deemed a PRC resident enterprise and investors’ gain from the sales of the securities and dividends payable byus are deemed sourced from China, such gains and dividends payable by us may be subject to PRC tax. See “Risk Factors — Risks Related to Doing Business inChina — If we were deemed a “resident enterprise” by PRC tax authorities, we could be subject to tax on our global income at the rate of 25% under the New EITLaw and our nonPRC shareholders could be subject to certain PRC taxes.United States Federal Income TaxationGeneralThe following is a discussion of the material U.S. federal income tax consequences to an investor of purchasing, owning and disposing of our securities.This discussion does not address any aspects of U.S. federal gift or estate tax or the state, local or nonU.S. tax consequences of an investment in the securities.YOU SHOULD CONSULT YOUR OWN TAX ADVISORS CONCERNING THE U.S. FEDERAL, STATE, LOCAL AND NONU.S. TAX CONSEQUENCES OFPURCHASING, OWNING AND DISPOSING OF THE SECURITIES IN YOUR PARTICULAR SITUATION.This discussion applies only to those investors that purchase the securities in this offering and that hold the securities as capital assets within the meaningof section 1221 of the Internal Revenue Code of 1986, as amended (the “Code”). This section does not apply to holders that may be subject to special tax rules,including but not limited to:1.dealers in securities or currencies;2.traders in securities that elect to use a marktomarket method of accounting;3.banks, insurance companies or certain financial institutions;4.taxexempt organizations;5.governments or agencies or instrumentalities thereof;6.partnerships or other entities treated as partnerships or other passthrough entities for U.S. federal income tax purposes or persons holding thesecurities through such entities;7.regulated investment companies or real estate investment trusts;8.holders subject to the alternative minimum tax;9.holders that actually or constructively own 10% or more of the total combined voting power of all classes of our shares entitled to vote;10.holders that acquired the securities pursuant to the exercise of employee stock options, in connection with employee stock incentive plans orotherwise as compensation;11.holders that hold the securities as part of a straddle, hedging or conversion transaction; or12.holders whose functional currency is not the U.S. dollar.62This section is based on the Code, its legislative history, existing and proposed U.S. Treasury regulations, published rulings and other administrativeguidance of the U.S. Internal Revenue Service (the “IRS”) and court decisions, all as in effect on the date hereof. These laws are subject to change or differentinterpretation by the IRS or a court, possibly on a retroactive basis.We have not sought, and will not seek, a ruling from the IRS as to any U.S. federal income tax consequence described herein. The IRS may disagree withthe discussion herein, and its determination may be upheld by a court. Moreover, there can be no assurance that future legislation, regulation, administrative rulingsor court decisions will not adversely affect the accuracy of the statements in this discussion.The discussion below of the U.S. federal income tax consequences to “U.S. Holders” will apply to a beneficial owner of the securities that is for U.S. federalincome tax purposes:1.a citizen or resident of the United States;2.a corporation (or other entity treated as a corporation) that is created or organized (or treated as created or3.organized) under the laws of the United States, any state thereof or the District of Columbia;4.an estate whose income is subject to U.S. federal income tax regardless of its source; or5.a trust if (a) a U.S. court can exercise primary supervision over the trust’s administration and one or more U.S.6.persons are authorized to control all substantial decisions of the trust, or (b) if the trust has a valid election in effect under applicable U.S.Treasury regulations to be treated as a U.S. person.If a beneficial owner of the securities is not described as a U.S. Holder and is not an entity treated as a partnership or other passthrough entity for U.S.federal income tax purposes, such owner will be considered a “NonU.S. Holder.” The material U.S. federal income tax consequences applicable specifically to NonU.S. Holders are described below under the heading “Tax Consequences to NonU.S. Holders.”If a partnership (including for this purpose any entity treated as a partnership for U.S. tax purposes) is a beneficial owner of the securities, the U.S. taxtreatment of a partner in the partnership generally will depend on the status of the partner and the activities of the partnership. A holder of the securities that is apartnership or partners in such a partnership should consult their own tax advisors about the U.S. federal income tax consequences of holding and disposing of thesecurities.This discussion assumes that any distributions made (or deemed made) on the securities and any consideration received by a holder in consideration forthe sale or other disposition of the securities will be in U.S. dollars. This discussion also assumes that the representations contained in the Deposit Agreement aretrue and that the obligations in the Deposit Agreement and any related agreement will be complied with in accordance with their terms. Finally, this discussionassumes that each ADS will only represent ordinary shares in us, and will not represent any other type of security, such as a bond, cash or other property.63For U.S. federal income tax purposes, a holder of an ADS will be treated as the beneficial owner of the shares represented by such ADS and an exchange ofan ADS for ordinary shares will not be subject to U.S. federal income tax. The U.S. Treasury has expressed concerns that parties to whom ADSs are prereleased, orintermediaries in the chain of ownership between holders of ADSs and the issuer of the securities underlying the ADSs may be taking actions that are inconsistentwith the claiming of foreign tax credits by U.S. Holders of ADSs. Such actions would also be inconsistent with the claiming of the reduced rate of tax applicable todividends received by certain noncorporate U.S. Holders, including individual U.S. Holders, as described below under “Tax Consequences to U.S.Holders — Taxation of Distributions.” Accordingly, the availability of foreign tax credits or the reduced tax rate for dividends received by certain noncorporate U.S.Holders, including individual U.S. Holders, could be affected by actions taken by parties to whom the ADSs are released, or by future actions by the U.S. Treasury.Tax Consequences to U.S. HoldersTaxation of DistributionsSubject to the passive foreign investment company, or PFIC, rules discussed below, the gross amount of any cash distributions we make with respect to aU.S. Holder in respect of such U.S. Holder’s ADSs or shares will generally be treated as dividend income if the distributions are made from our current oraccumulated earnings and profits, calculated according to U.S. federal income tax principles. Cash dividends will generally be subject to U.S. federal income tax asordinary income on the day the U.S. Holder actually or constructively receives such income. With respect to noncorporate U.S. Holders for taxable years beginningbefore January 1, 2011, dividends may be taxed at the lower applicable longterm capital gains rate provided that (a) our ADSs or shares are readily tradable on anestablished securities market in the United States, or, in the event we are deemed to be a Chinese “resident enterprise” under the EIT Law (as described above under“People’s Republic of China Taxation”), we are eligible for the benefits of the income tax treaty between the United States and the PRC (the “U.S.PRC Tax Treaty”),(b) we are not a PFIC, as discussed below, for either the taxable year in which the dividend was paid or the preceding taxable year, and (c) certain holding periodrequirements are met. Under published IRS authority, ADSs are considered for purposes of clause (a) above to be readily tradable on an established securitiesmarket in the United States only if they are listed on certain exchanges, which presently include the NASDAQ Capital Market. U.S. Holders should consult their owntax advisors regarding the availability of the lower rate for any dividends paid with respect to our ADSs or shares.Dividends will not be eligible for the dividendsreceived deduction allowed to U.S. corporations in respect of dividends received from other U.S.corporations. Generally, if we distribute noncash property as a dividend (other than pro rata distributions of our shares) out of our current or accumulated earningsand profits (as determined for U.S. federal income tax purposes), a U.S. Holder generally will include in income an amount equal to the fair market value of theproperty, on the date that it is distributed.Distributions in excess of current and accumulated earnings and profits, as determined for U.S. federal income tax purposes, will be treated as a nontaxablereturn of capital to the extent of the U.S. Holder’s basis in its shares or ADSs and thereafter as capital gain. However, we do not plan on calculating our earnings andprofits in accordance with U.S. federal income tax principles. U.S. holders therefore should generally assume that any distributions paid by us will be treated asdividends for U.S. federal income tax purposes.If PRC taxes apply to dividends paid by us to a U.S. Holder (see “People’s Republic of China Taxation,” above), such taxes may be treated as foreign taxeseligible for credit against such holder’s U.S. federal income tax liability (subject to certain limitations), and a U.S. Holder may be entitled to certain benefits under theU.S.PRC Tax Treaty. The rules relating to the U.S. foreign tax credit are complex. U.S. Holders should consult their own tax advisors regarding the creditability ofany such PRC tax and their eligibility for the benefits of the U.S.PRC Tax Treaty.64Taxation of Dispositions of SharesSubject to the PFIC rules discussed below, a U.S. holder that sells or otherwise disposes of its shares will recognize capital gain or loss for U.S. federalincome tax purposes equal to the difference between the amount realized and such U.S. Holder’s tax basis in its shares. Prior to January 1, 2011, capital gains of anoncorporate U.S. holder are generally taxed at a maximum rate of 15% where the property is held for more than one year (and 20% thereafter). The ability to deductcapital losses is subject to limitations.If PRC taxes apply to any gain from the disposition of our shares by a U.S. Holder, such taxes may be treated as foreign taxes eligible for credit against suchholder’s U.S. federal income tax liability (subject to certain limitations), and a U.S. Holder may be entitled to certain benefits under the U.S.PRC Tax Treaty. U.S.Holders should consult their own tax advisors regarding the creditability of any such PRC tax and their eligibility for the benefits of the U.S.PRC Tax Treaty.Passive Foreign Investment CompanyWe do not expect to be a PFIC for U.S. federal income tax purposes for our current tax year or in the foreseeable future. The determination of whether or notwe are a PFIC in respect of any of our taxable years is a factual determination that cannot be made until the close of the applicable tax year and that is based on thetypes of income we earn and the value and composition of our assets (including goodwill), all of which are subject to change. Therefore, we can make no assurancesthat we will not be a PFIC in respect of our current taxable year or in the future.In general, we will be a PFIC in any taxable year if either:1.at least 75% of our gross income for the taxable year is passive income; or2.at least 50% of the value, determined on the basis of a quarterly average, of our assets is attributable to assets that produce or are held for theproduction of passive income.Passive income includes dividends, interest, royalties, rents (other than certain rents and royalties derived in the active conduct of a trade or business), theexcess of gains over losses from certain types of transactions in commodities, annuities and gains from assets that produce passive income. We will be treated asowning our proportionate share of the assets and earning our proportionate share of the income of any corporation in which we own, directly or indirectly, at least25% (by value) of the stock.If we are treated as a PFIC in any year during which a U.S. Holder owns the securities, and such U.S. Holder did not make a marktomarket election, asdescribed below, the U.S. Holder will be subject to special rules with respect to:1.any gain recognized by the U.S. Holder on the sale or other disposition of its shares; and any excess distribution that we make to the U.S. Holder(generally, the excess of the amount of any distributions to such U.S. Holder during a single taxable year of such U.S. Holder over 125% of theaverage annual distributions received by such U.S. Holder in respect of the shares during the three preceding taxable years of such U.S. Holder or,if shorter, such U.S. Holder holding period for the shares).Under these rules:2.the gain or excess distribution will be allocated ratably over the U.S. Holder’s holding period for the shares;3.the amount allocated to the U.S. Holder’s taxable year in which it realized the gain or excess distribution or to the period in the U.S. Holder’sholding period before the first day of our first taxable year in which we are a PFIC will be taxed as ordinary income;4.the amount allocated to other taxable years (or portions thereof) of the U.S. Holder and included in its holding period will be taxed at the highesttax rate in effect for that year; and5.the interest charge generally applicable to underpayments of tax will be imposed in respect of the tax attributable to each such other taxable yearof the U.S. Holder. 6.Special rules apply for calculating the amount of the foreign tax credit with respect to excess distributions by a PFIC.65Alternatively, if a U.S. Holder, at the close of its taxable year, owns ordinary shares in a PFIC that are treated as marketable stock, the U.S. Holder may makea marktomarket election with respect to such shares for such taxable year. Our shares will be “marketable” to the extent that they remain regularly traded on anational securities exchange, such as the NASDAQ Capital Market. If a U.S. Holder makes this election in a timely fashion, it will not be subject to the PFIC rulesdescribed above. Instead, in general, the U.S. Holder will include as ordinary income each year the excess, if any, of the fair market value of its shares at the end ofthe taxable year over its adjusted basis in its shares. Any ordinary income resulting from this election would generally be taxed at ordinary income tax rates andwould not be eligible for the reduced rate of tax applicable to qualified dividend income. The U.S. Holder will also be allowed to take an ordinary loss in respect ofthe excess, if any, of the adjusted basis of its shares over the fair market value at the end of the taxable year (but only to the extent of the net amount of previouslyincluded income as a result of the marktomarket election). The U.S. Holder’s basis in the shares will be adjusted to reflect any such income or loss amounts. U.S.Holders should consult their own tax advisor regarding potential advantages and disadvantages of making a marktomarket election with respect to their shares.Alternatively, a U.S. Holder of stock in a PFIC may avoid the PFIC tax consequences described above in respect to our or shares by making a timely“qualified electing fund” election to include in income its pro rata share of our net capital gains (as longterm capital gain) and other earnings and profits (asordinary income), on a current basis, in each case whether or not distributed, in the taxable year of the U.S. Holder in which or with which our taxable year ends.However, the qualified electing fund election is available only if the PFIC provides such U.S. Holder with certain information regarding its earnings and profits asrequired under applicable U.S. Treasury regulations. We do not intend to furnish the information that a U.S. Holder would need in order to make a qualified electingfund election. Therefore, U.S. Holders will not be able to make or maintain such election with respect to their or shares.If a U.S. Holder owns our shares or during any year that we are a PFIC, such holder must file U.S. Internal Revenue Service Form 8621 regarding suchholder’s shares or and the gain realized on the disposition of the shares. The reduced tax rate for dividend income, discussed in “Taxation of Distributions,” is notapplicable to dividends paid by a PFIC. U.S. Holders should consult with their own tax advisors regarding reporting requirements with respect to their shares.Tax Consequences to NonU.S. HoldersDividends paid to a NonU.S. Holder in respect of our or shares generally will not be subject to U.S. federal income tax, unless the dividends are effectivelyconnected with the NonU.S. Holder’s conduct of a trade or business within the United States (and, if required by an applicable income tax treaty, are attributable toa permanent establishment or fixed base that such holder maintains in the United States).In addition, a NonU.S. Holder generally will not be subject to U.S. federal income tax on any gain attributable to a sale or other disposition of our or sharesunless such gain is effectively connected with its conduct of a trade or business in the United States (and, if required by an applicable income tax treaty, isattributable to a permanent establishment or fixed base that such holder maintains in the United States) or the NonU.S. Holder is an individual who is present in theUnited States for 183 days or more in the taxable year of sale or other disposition and certain other conditions are met (in which case, such gain from United Statessources generally is subject to tax at a 30% rate or a lower applicable tax treaty rate).Dividends and gains that are effectively connected with the NonU.S. Holder’s conduct of a trade or business in the United States (and, if required by anapplicable income tax treaty, are attributable to a permanent establishment or fixed base in the United States) generally will be subject to tax in the same manner as fora U.S. Holder and, in the case of a NonU.S. Holder that is a corporation for U.S. federal income tax purposes, may also be subject to an additional branch profits taxat a 30% rate or a lower applicable tax treaty rate.66Information Reporting and Backup Withholding In general, information reporting for U.S. federal income tax purposes generally should apply to distributions made on the securities within the UnitedStates to a noncorporate U.S. Holder and to the proceeds from sales and other dispositions of the securities by a noncorporate U.S. Holder to or through a U.S.office of a broker. Payments made (and sales and other dispositions effected at an office) outside the United States generally should be subject to informationreporting in limited circumstances.Dividend payments made to U.S. Holders and proceeds paid from the sale or other disposition the securities may be subject to information reporting to theIRS and possible U.S. federal backup withholding at a current rate of 28%. Certain exempt recipients, such as corporations, are not subject to these informationreporting requirements. Backup withholding will not apply to a U.S. Holder who furnishes a correct taxpayer identification number and makes any other requiredcertification, or who is otherwise exempt from backup withholding. U.S. Holders who are required to establish their exempt status must provide a duly executed IRSForm W9.A NonU.S. Holder generally may eliminate the requirement for information reporting and backup withholding by providing certification of its foreignstatus, under penalties of perjury, on a duly executed applicable IRS Form W8 or by otherwise establishing an exemption.Backup withholding is not an additional tax. Rather, the amount of any backup withholding will be allowed as a credit against a U.S. Holder’s or a nonU.S.Holder’s U.S. federal income tax liability and may entitle such holder to a refund, provided that certain required information is timely furnished to the IRS.PROSPECTIVE PURCHASERS OF OUR SECURITIES SHOULD CONSULT WITH THEIR OWN TAX ADVISORS REGARDING THE APPLICATION OFTHE U.S. FEDERAL INCOME TAX LAWS TO THEIR PARTICULAR SITUATIONS AS WELL AS ANY ADDITIONAL TAX CONSEQUENCES RESULTING FROMPURCHASING, HOLDING OR DISPOSING OF OUR SECURITIES, INCLUDING THE APPLICABILITY AND EFFECT OF THE TAX LAWS OF ANY STATE, LOCALOR NONU.S. JURISDICTION, INCLUDING ESTATE, GIFT, AND INHERITANCE LAWS AND APPLICABLE TAX TREATIES.F. DIVIDENDS AND PAYING AGENTS.Not applicable.G. STATEMENT BY EXPERTS.None.H. DOCUMENTS ON DISPLAY.We previously filed a registration statement on Form F1 (File No. 333166056) with the SEC relating to our initial public offering in May 2010. This transition reportdoes not contain all of the information in the registration statement and the exhibits and financial statements included with the registration statement. References inthis transition report to any of our contracts, agreements or other documents are not necessarily complete, and you should refer to the exhibits attached to theregistration statement for copies of the actual contracts, agreements or documents. In addition, we will file transition reports on Form 20F and submit otherinformation under cover of Form 6K. As a foreign private issuer, we are exempt from the proxy requirements of Section 14 of the Exchange Act and our officers,directors and principal shareholders will be exempt from the insider shortswing disclosure and profit recovery rules of Section 16 of the Exchange Act. You may readand copy the registration statement, the related exhibits and other materials we file with the SEC at the SEC's public reference room in Washington, D.C. at 100 FStreet, Room 1580, N.E., Washington, D.C.20549. You can also request copies of those documents, upon payment of a duplicating fee, by writing to the SEC. Pleasecall the SEC at 1800SEC0330 for further information on the operation of the public reference rooms. The SEC also maintains an Internet site that contains reports,proxy and information statements and other information regarding issuers that file with the SEC. The website address is http://www.sec.gov. You may also request acopy of these filings, at no cost, by writing us at LAB 32, SOHO 3Q, No 9, Guanghua Road, Chaoyang District, Beijing, People’s Republic of China, 100020 ortelephoning us at (86) 1085866721.67I. SUBSIDIARY INFORMATIONFor a listing of our subsidiaries, see “Item 4. Information on the Company – C. Organizational Structure.”ITEM 11. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.Interest Rate RiskAs of December 31, 2017, we had no shortterm or longterm borrowings. If we borrow money in future periods, we may be exposed to interest rate risk. Ourexposure to market risk for changes in interest rates relates primarily to the interest income generated by our cash deposits with our banks and heldtomaturityinvestments. We have not used any derivative financial instruments in our investment portfolio. Interest earnings instruments carry a degree of interest rate risk. Wehave not been exposed, nor do we anticipate being exposed to material risks due to changes in interest rates. However, our future interest income may fall short ofexpectations due to changes in interest rates. Foreign Exchange RiskTranslation adjustments amounted to $90,671 and $387,375 gain as of the fiscal year ended December 31, 2017 and 2016, respectively. The Companytranslated balance sheet amounts with the exception of equity at December 31, 2017 at RMB 6.5342 to $1.00 as compared to RMB 6.9370 to $1.00 at December 31,2016. The Company stated equity accounts at their historical rate. The average translation rates applied to income statement accounts for the fiscal year endedDecember 31, 2017 and 2016 were RMB6.7356 and RMB 6.7153 to US$1.00, respectively. So far, the PRC government has been able to manage a stable exchange ratebetween RMB and the U.S. Dollar. Our future downward translation adjustments may occur and can be significant due to changes in such exchange rate.If we decide to convert our RMB into U.S. dollars for the purpose of making payments for dividends on our ordinary shares or for other business purposes,appreciation of the U.S. dollar against the RMB would have a negative effect on the U.S. dollar amount available to us.The PRC government imposes strict restrictions on PRC resident companies regarding converting RMB into foreign currencies and vice versa under capitalaccount transactions, such as receiving equity investments from outside of the PRC, making equity investments outside of the PRC, borrowing money from orlending money outside of the PRC, and repaying debt or remitting liquidated assets and/or accumulated profits outside of the PRC. These transactions have to beapproved by the relevant PRC government authorities, including but not limited to the commerce bureau, the tax bureau and the State Administration of ForeignExchange, or SAFE, and have to be conducted at banks entrusted by the local SAFE branch. As our business continues to grow, we may need to continuouslyfinance our PRC subsidiaries by raising capital from outside of the PRC. The restriction on converting RMB into foreign currencies, and vice versa, may limit ourability to use capital resources from outside of the PRC. Such restrictions may also limit our ability to remit profits from our PRC subsidiaries outside of the PRC,therefore potentially limiting our ability to pay dividends to our shareholders. In addition, such restrictions will limit our ability to freely transfer temporary excesscash in our or our subsidiaries’ bank accounts in and out of the PRC, therefore limiting our ability to conduct crossborder cash management activities to optimizethe utilization of our cash.InflationAlthough China has experienced an increasing inflation rate, inflation has not had a material impact on our results of operations in recent years. Accordingto the National Bureau of Statistics of China, the change in the consumer price index in China was 0.46%, (0.77%), and 1.16% in 2001, 2002 and 2003, respectively.However, in connection with a 3.9% increase in 2004, the PRC government announced measures to restrict lending and investment in China in order to reduceinflationary pressures in China’s economy. Following the government’s actions, the consumer price index decreased to 1.8% in 2005 and to 1.5% in 2006. In 2007, theconsumer price index increased to 4.8%. In response, China’s central bank, the People’s Bank of China, announced that the bank reserve ratio would rise half apercentage point to 15.5% in an effort to reduce inflation pressures. China’s consumer price index growth rate reached 8.7% year over year in 2008. In 2009 and 2010,the change in the consumer price index in China was minus 0.7% and 3.3%.China consumer price index in November 2017 was 3.8% higher than that of the same period in 2016. China consumer price index in December 2016 was2.4% higher than that of the same period in 2015. China consumer price index in December 2015 was 4.8% higher than that of the same period in 2014. Chinaconsumer price index in December 2014 was 3.3% higher than that of the same period in 2013. The results of the PRC government’s actions to combat inflation aredifficult to predict. Adverse changes in the Chinese economy, if any, will likely impact the financial performance of a variety of industries in China that use, or wouldbe candidates to use, our software products and services.68ITEM 12. DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES.A. DEBT SECURITIES.Not applicable. B. WARRANTS AND RIGHTS.Not applicable.C. OTHER SECURITIES.Not applicable.D. AMERICAN DEPOSITARY SHARES.The Bank of New York Mellon, as depositary (the “Depositary”) for the Company’s ADR facility, notified the owners and holders of the Company’s ADSsthat the ADS facility will terminate effective at 5:00 p.m. (Eastern Time) on September 19, 2018. Under the terms of the Deposit Agreement among the Company, theDepositary and the owners and holders of ADSs of the Company (the “Deposit Agreement”), owners and holders of the Company’s ADSs have until at leastJanuary 21, 2019 to surrender their ADSs to the Depositary for delivery of the underlying ordinary shares of the Company. Subsequent to January 21, 2019, underthe terms of the Deposit Agreement, the Depositary may attempt to sell any ordinary shares remaining on deposit with the Depositary. If the Depositary sells suchunderlying ordinary shares or receives value for such shares, holders must surrender their ADSs to obtain payment of the sale proceeds, net of expenses andapplicable tax and charges. We completed the voluntary delisting of our ADSs from the NASDAQ Capital Market on September 19, 2018.You may hold ADSs either (A) directly (i) by having ADSs registered in your name in the Direct Registration System, or (ii) by having an Americandepositary receipt, also referred to as an ADR, which is a certificate evidencing a specific number of ADSs, registered in your name, or (B) indirectly by holding asecurity entitlement in ADSs through your broker or other financial institution. If you hold ADSs directly, you are a registered ADS holder, also referred to as anADS holder. This description assumes you are an ADS holder. If you hold the ADSs indirectly, you must rely on the procedures of your broker or other financialinstitution to assert the rights of ADS holders described in this section. You should consult with your broker or financial institution to find out what thoseprocedures are.The Direct Registration System, or DRS, is a system administered by The Depository Trust Company, also referred to as DTC, pursuant to which thedepositary may register the ownership of uncertificated ADSs, which ownership will be confirmed by periodic statements sent by the depositary to the registeredholders of uncertificated ADSs.69As an ADS holder, you will not be treated as one of our registered shareholders and you will not have direct shareholder rights. British Virgin Island’s lawgoverns our direct shareholders’ rights. The depositary will be the holder of the shares underlying your ADSs. As a registered holder of ADSs, you will have ADSholder rights. A Deposit Agreement among us, the depositary and you, as an ADS holder, and all other persons indirectly holding ADSs, sets out ADS holder rightsas well as the rights and obligations of the depositary. New York law governs the Deposit Agreement and the ADSs.The following is a summary of the material provisions of the Deposit Agreement. For more complete information, you should read the entire DepositAgreement and the form of ADS, which contains the terms of the ADSs. The Deposit Agreement is filed as an exhibit to our registration statement filed on Form F1.You may obtain the registration statement and the attached Deposit Agreement from the SEC’s website at http://www.sec.gov. You may also obtain a copy of theDeposit Agreement at the SEC’s Public Reference Room, which is located at 100 F Street, NE, Washington, DC 20549. You may obtain information on the operationof the Public Reference Room by calling the SEC at 18007320330. Fees and ExpensesPersons depositing or withdrawing shares or ADS holders must pay:For:$5.00 (or less) per 100 ADSs (or portion of 100 ADSs)Issuance of ADSs, including issuances resulting from a distribution of shares orrights or other propertyCancellation of ADSs for the purpose of withdrawal, including if the DepositAgreement terminates$.05 (or less) per ADSAny cash distribution to ADS holdersA fee equivalent to the fee that would be payable if securities distributed to youhad been shares and the shares had been deposited for issuance of ADSsDistribution of securities distributed to holders of deposited securities whichare distributed by the depositary to ADS holders$.05 (or less) per ADSs per calendar yearDepositary servicesRegistration or transfer feesTransfer and registration of shares on our share register to or from the name ofthe depositary or its agent when you deposit or withdraw sharesExpenses of the depositaryCable, telex and facsimile transmissions (when expressly provided in the DepositAgreement) converting foreign currency to U.S. dollarsTaxes and other governmental charges the depositary or the custodian have topay on any ADS or share underlying an ADS, for example, share transfer taxes,stamp duty or withholding taxesAs necessaryAny charges incurred by the depositary or its agents for servicing the depositedsecuritiesAs necessaryPayment of TaxesHolders of our ADSs are responsible for any taxes or other governmental charges payable on their ADSs or on the deposited securities represented by anyof their ADSs. The depositary may refuse to register any transfer of a holder’s ADSs or allow withdrawal of the deposited securities represented by the ADSs untilsuch taxes or other charges are paid. It may apply payments owed to the holder or sell deposited securities represented by the ADSs to pay any taxes owed and theholder will remain liable for any deficiency. If the depositary sells deposited securities, it will, if appropriate, reduce the number of ADSs to reflect the sale and pay toADS holders any proceeds, or send to ADS holders any property, remaining after it has paid the taxes.70PART IIITEM 13. DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES.None.ITEM 14. MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS.Use of Proceeds.We completed our initial public offering on May 14, 2010 (the “IPO”), which generated net proceeds of approximately $14.6 million. All remaining cash onhand from the proceeds of our IPO was transferred to C Media Limited and its subsidiaries following the completion of the asset exchange transactions on August17, 2018.ITEM 15. CONTROLS AND PROCEDURES.Disclosure Controls and ProceduresOur Chief Executive Officer and Chief Financial Officer have reviewed and evaluated the effectiveness of our disclosure controls and procedures, whichincluded inquiries made to certain other of our employees. The term “disclosure controls and procedures,” as defined in Rules 13a15(e) and 15d15(e) under theExchange Act, means controls and other procedures of a company that are designed to ensure that information required to be disclosed by a company in thereports, such as this report, that it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in theSEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to bedisclosed by a company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the company’s management, including itsprincipal executive and principal financial officers, as appropriate to allow timely decisions regarding required disclosure. Management recognizes that any controlsand procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives and management necessarilyapplies its judgment in evaluating the costbenefit relationship of possible controls and procedures. Based on that evaluation, our Chief Executive Officer and ChiefFinancial Officer have each concluded that, as of December 31, 2017, the Company’s disclosure controls and procedures were not effective due to the materialweakness described in the “Management’s Report on Internal Control over Financial Reporting” section below.Management’s Report on Internal Control Over Financial ReportingOur management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Exchange ActRules 13a15(f) and 15d15(f). Internal control over financial reporting refers to the process designed by, or under the supervision of, our principal executive officerand principal financial officer, and effected by our Board of Directors, management and other personnel, to provide reasonable assurance regarding the reliability offinancial reporting and the preparation of financial statements for external purposes in accordance with U.S. GAAP and includes those policies and procedures that(i) pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of the assets of the Company; (ii)provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with U.S. GAAP, and thatreceipts and expenditures of the Company are being made only in accordance with authorizations of management and directors of the Company; and (iii) providereasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the Company’s assets that could have a materialeffect on the financial statements.71Any system of internal control, no matter how well designed, has inherent limitations. Therefore, even those systems determined to be effective canprovide only reasonable assurance with respect to financial statement preparation and presentation. Because of the inherent limitations of internal control, there is arisk that material misstatements may not be prevented or detected on a timely basis by internal control over financial reporting. However, these inherent limitationsare known features of the financial reporting process. Therefore, it is possible to design into the process safeguards to reduce, though not eliminate, this risk.Management assessed our internal control over financial reporting as of the year ended December 31, 2017. In making this assessment, management usedthe criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in the 2014 report entitled "Internal ControlIntegratedFramework." The COSO framework summarizes each of the components of a company’s internal control system, including (i) the control environment, (ii) riskassessment, (iii) control activities, (iv) information and communication, and (v) monitoring. Based on such assessment, management concluded that its internalcontrol over financial reporting as of December 31, 2017 was not effective because of the following material weakness:Lack of U.S. GAAP expertise. Although our accounting personnel are professional and experienced in accounting requirements and procedures generallyaccepted in the PRC, they do not have sufficient knowledge, experience and training in maintaining our books and records and preparing financial statements inaccordance with U.S. GAAP standards and SEC rules and regulations. The staff needs additional training to become experienced in U.S. GAAPbased reporting,including the skills of U.S. GAAPbased period end closing, consolidation of financial statements, and U.S. GAAP conversion.In order to address the above material weakness, our management plans to take the following steps:We will employ, as needed, outside professionals to provide key accounting personnel ongoing technical trainings to ensure their proper understanding ofU.S. GAAP and newly announced accounting standards.The Company believes the foregoing measures will remediate the identified material weakness in future periods. The Company is committed to monitoringthe effectiveness of these measures and making any changes that are necessary and appropriate.Notwithstanding the conclusion that its internal control over financial reporting was not effective as of the end of the period covered by this report, ourChief Executive Officer and Chief Financial Officer believe that the financial statements and other information contained in this report present fairly, in all materialrespects, its business, financial condition and results of operations. Nothing has come to the attention of management that causes them to believe that any materialinaccuracies or errors exist in the Company’s financial statements as of December 31, 2017.Attestation report of the registered public accounting firm.This transition report does not include an attestation report of the Company’s registered public accounting firm on internal control over financial reportingbecause the Company is a nonaccelerated filer permanently exempted from section 404(b) of the SarbanesOxley Act.Changes in Internal Control over Financial ReportingThere were no changes in the Company’s internal control over financial reporting that occurred during our fiscal year ended December 31, 2017 that hasmaterially affected or is reasonably likely to materially affect our internal control over financial reporting.ITEM 16. [RESERVED]ITEM 16A. AUDIT COMMITTEE FINANCIAL EXPERT.Our board of directors has determined that Mr. Dennis Galgano qualifies as an audit committee financial expert. Our board of directors has determined thatMessrs. Dennis Galgano, Jin Shi, Jiming Ha and Zhihao Xu meet the definition of an “independent director” under the applicable NASDAQ Rules and under Rule10A3 of the Securities Exchange Act of 1934, as amended.72ITEM 16B. CODE OF ETHICS.Our board of directors has adopted a code of business conduct and ethics applicable to our directors, officers and employees. We have posted the code onour website at http://www.luokung.com.ITEM 16C. PRINCIPAL ACCOUNTANT FEES AND SERVICES.Audit FeesThe aggregate fees billed by Moore Stephens CPA Limited for professional services rendered for the audit of our financial information disclosed in thistransition report on Form 20F was $280,000 for the two years ended December 31, 2017 and 2016.The aggregate fees billed by our previous auditor, BDO China Shu Lun Pan Certified Public Accountants LLP for professional services rendered for theaudit of our annual financial information included in our annual reports on Form 20F was $105,500 for each of the fiscal years ended September 30, 2017, 2016 and2015.Tax FeesWe did not engage our principal accountants to provide tax or related services during the last two fiscal years.All Other FeesWe did not engage our principal accountants to render services to us during the last two fiscal years, other than as reported above.ITEM 16D. EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES.Not applicable.ITEM 16E. PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS.Not applicable.ITEM 16F. CHANGE IN REGISTRANT’S CERTIFYING ACCOUNTANT.Not applicable.ITEM 16G. CORPORATE GOVERNANCE.We are incorporated in the BVI and our corporate governance practices are governed by applicable BVI law as well as our memorandum and articles ofassociation. In addition, because our ADSs are listed on NASDAQ, we are subject to NASDAQ’s corporate governance requirements. NASDAQ Listing Rule5620(a) requires each issuer to hold an annual meeting of shareholders no later than one year after the end of the issuer’s fiscal year end. However, NASDAQ ListingRule 5615(a)(3) permits a foreign private issuer like us to follow home country practices in lieu of certain requirements of Listing Rule 5600, provided that suchforeign private issuer discloses in its transition report filed with the SEC each requirement of Rule 5600 that it does not follow and describes the home countrypractice followed in lieu of such requirement. We follow home country practice with respect to annual meetings and did not hold an annual shareholder meeting inthe year ended December 31, 2017. We may, however, hold annual shareholder meetings in the future if there are significant issues that require shareholders’approvals.ITEM 16H. MINE SAFETY DISCLOSURE.Not applicable.73PART IIIITEM 17. FINANCIAL STATEMENTS.We have elected to provide financial statements and related information specified in Item 18.ITEM 18. FINANCIAL STATEMENTS.See “Index to Consolidated Financial Statements” for a list of all financial statements filed as part of this transition report. The Financial Statements arebeginning on page F1.ITEM 19. EXHIBITS.See the Exhibit Index following the signature page of this report, which is incorporated herein by reference.74SIGNATURESThe registrant hereby certifies that it meets all of the requirements for filing on Form 20F and that it has duly caused and authorized the undersigned tosign this transition report on its behalf.LUOKUNG TECHNOLOGY CORP.By:/s/ Xuesong Song Xuesong SongChief Executive Officer(principal executive officer)October 12, 201875EXHIBIT INDEXThe following documents are filed as part of this transition report on Form 20F.ExhibitNumberDescription1.1Amended and Restated Memorandum of Association and Articles of Association of Luokung Technology Corp., dated August 20, 2018, and ascurrently in effect.2.1*Deposit Agreement among the Company, depositary and holders of the American Depositary Receipts.2.2*Form of American Depositary Receipt.2.3*English translation of Entrusted Management Agreement dated December 15, 2009 between Xi’an Softech Co., Ltd., Xi’an Kingtone InformationTechnology Co., Ltd. and the shareholders of Xi’an Kingtone Information Technology Co., Ltd.3.1*English translation of Shareholder’s Voting Proxy Agreement dated December 15, 2009 between Xi’an Softech Co., Ltd., Xi’an Kingtone InformationTechnology Co., Ltd. and the shareholders of Xi’an Kingtone Information Technology Co., Ltd.4.1*English translation of Exclusive Technology Service Agreement dated December 15, 2009 between Xi’an Softech Co., Ltd. and Xi’an KingtoneInformation Technology Co., Ltd.4.2*English translation of Exclusive Option Agreement dated December 15, 2009 between Xi’an Softech Co., Ltd., Xi’an Kingtone InformationTechnology Co., Ltd. and the shareholders of Xi’an Kingtone Information Technology Co., Ltd.4.3*English translation of Equity Pledge Agreement dated December 15, 2009 between Xi’an Softech Co., Ltd., Xi’an Kingtone Information TechnologyCo., Ltd. and the shareholders of Xi’an Kingtone Information Technology Co., Ltd.4.4*English translation of Loan Agreement dated September 14, 2009 between Xi’an Kingtone Information Technology Co., Ltd. and Xian CityCommercial Bank.4.5*English translation of Mortgage Agreement dated September 14, 2009 between Xi’an Kingtone Information Technology Co., Ltd. and Xian CityCommercial Bank.4.6*English translation of Form of Employment Agreement entered into between the Company and the Company’s executive officers.4.7*2010 Omnibus Incentive Plan of the Company.4.8**English translation of Project Construction Contract dated August 10, 2010 between Xi’an Hu County Yuxing Agriculture Science & TechnologyCo., Ltd. and Xi’an Kingtone Information Technology Co., Ltd.4.9***Asset Exchange Agreement by and between C Media Limited and the Company dated as of January 25, 2018.4.10***Securities Purchase Agreement by and among Redstone YYL Management Limited and five shareholders holding majority of the shares of theCompany dated as of January 25, 2018.4.15Exclusive Business Cooperation Agreement by and between Zhongchuan Tianxia Information Technology (Shenzhen) Co., Ltd., and Beijing MobileVision Technology Co., Ltd., dated August 31, 2015.764.16Exclusive Option Agreement by and among Zhongchuan Tianxia Information Technology (Shenzhen) Co., Ltd., Xuesong Song, Weili Chen, PingWang, Donglai Liu, and Beijing Mobile Vision Technology Co., Ltd., dated August 31, 2015.4.17Equity Interest Pledge Agreement by and among Zhongchuan Tianxia Information Technology (Shenzhen) Co., Ltd., Xuesong Song, Weili Chen, PingWang, Donglai Liu, and Beijing Mobile Vision Technology Co., Ltd., dated August 31, 2015.4.18Addendum to Asset Exchange Agreement by and among the Company, Topsky Infotech Holdings Pte Ltd. and C Media Limited, dated October 3,2018. Incorporated by reference to the Company’s Current Report on Form 6K filed on October 4, 2018.4.19Stock Purchase Agreement, dated August 25, 2018, by and among the Company, LK Technology Ltd., and the shareholders listedtherein. Incorporated by reference to the Company’s Current Report on Form 6K filed on August 27, 2018.4.20Power of Attorney by Weili Chen, dated August 31, 2015.4.21Power of Attorney by Ping Wang, dated August 31, 2015.4.22Power of Attorney by Donglai Liu, dated August 31, 2015.4.23Power of Attorney by Xuesong Song, dated August 31, 2015.8.1List of Subsidiaries and Consolidated Variable Interest Entities10.1Employment Agreement, dated August 19, 2018, between Luokung Technology Corp. and Xuesong Song.†10.2Employment Agreement, dated August 19, 2018, by and between Luokung Technology Corp. and Jie Yu.†12.1Certification of Chief Executive Officer required by Rule 13a14(a).12.2Certification of Chief Financial Officer required by Rule 13a14(a).13.1Certification of Chief Executive Officer required by Rule 13a14(a).13.2Certification of Chief Financial Officer required by Rule 13a14(a).101.INSXBRL Instance Document.101.SCHXBRL Taxonomy Extension Schema Document.101.CALXBRL Taxonomy Extension Calculation Linkbase Document.101.DEFXBRL Taxonomy Extension Definition Linkbase Document.101.LABXBRL Taxonomy Extension Label Linkbase Document.101.PREXBRL Taxonomy Extension Presentation Linkbase Document.*Previously filed as an exhibit to the Company’s Registration Statement on Form F1 (Reg. No. 333166056) filed with the Commission and incorporated hereinby reference.**Previously filed as exhibits to the Company’s Transition Report on Form 20F filed with the Commission on January 20, 2011 and incorporated herein byreference.***Previously filed as exhibits to the Company’s Annual Report on Form 20F filed with the Commission on February 9, 2018 and incorporated herein byreference.†Indicates management contract or compensatory plan, contract or arrangement.77LK Technology Ltd. and SubsidiariesCONSOLIDATED FINANCIAL STATEMENTSTABLE OF CONTENTSPage(s)Report of Independent Registered Public Accounting FirmF2Consolidated Financial StatementsConsolidated Balance SheetsF3Consolidated Statements of Operations and Comprehensive LossF4application.Chuang (Vincent) Tao was appointed as a member of the Board effective on August 25, 2018. Dr. Tao was the Chairman of SuperEngine Suzhou from 2014to 2017. Dr. Tao has been the president of the Seasky Angel Investment Alliance of Shanghai since 2015. Dr. Tao received his Bachelor Degree of geographicinformation and telemetry from Wuhan University in China in 1990 and received his Ph.D. from University of Calgary, Canada in 1997.Dennis Galgano was appointed as a director of the Company following the consummation of the asset exchange agreement. He was a registered consultantwith Morgan Joseph Triartisan LLC from November 2016 until October 2017, and previously served as vice chairman and head of international investment bankingfor Morgan Joseph Triartisan LLC, which is a registered broker dealer engaged in the investment banking and financial advisory industry. Mr. Galgano received aB.S. degree in Chemistry from St. John’s University and an M.B.A. from The Wharton School in 1972.Jin Shi was appointed as a director of the Company following the consummation of the asset exchange transactions. Mr. Shi has served as the managingpartner of Chum Capital Group, a merchant bank focused on helping Chinese growth companies to access global capital, since January 2013. Mr. Shi has also servedas a director of Seven Stars Cloud Group, Inc. (NASDAQ: SSC), a premium video on demand service provider, since January 2014, and joined the audit committee ofits board of directors in March 2016. He also served as a director and member of the audit committee of Pingtan Marine Enterprise, Ltd. (NASDAQ: PME), a marineenterprise group primarily engaged in ocean fishing through its subsidiaries. Mr. Shi received an EMBA degree from the Guanghua Management School of BeijingUniversity, and a Bachelor’s degree of science in Chemical Engineering from Tianjin University.Jiming Ha was appointed as a director of the Company following the consummation of the asset exchange agreement, and has also served as a seniorresearch fellow for the China Finance 40 Forum since March 1, 2018, and previously served as a managing director of Goldman Sachs from January 2017 to April2017. Mr. Ha served as a vice chairman and chief investment strategist of the Investment Strategy Group for Private Wealth Management at Goldman Sachs from2010 to January 2017. Mr. Ha holds a PhD in Economics from the University of Kansas and Master’s and Bachelor’s degrees of science from Fudan University.Zhihao Xu was appointed as a director of the Company following the consummation of the asset exchange transactions. Mr. Xu has served as the chiefexecutive officer of Geely Group Co., Ltd., in Hangzhou, China, since December 2017, and previously served as the chairman and chief executive officer of BeijingDingchengrenhe Investment Co., Ltd., a funds management company, from January 2017 to December 2017. Mr. Xu served as the chairman of president of HNAUSOLV CO., LTD., and the chief innovation officer of HNA Logistics Group from January 2014 to December 2016, and prior to that as the chairman of GopayInnovation Technology Co. Ltd., an online payment system operator supporting online money transfers, from April 2012 to January 2014. Mr. Xu graduated from theBusiness School of Renmin University of China and from the Wudaokou Finance College of Tsinghua University with a fund qualification certificate and securitiesqualification certificate.B. COMPENSATION.Compensation of Directors and Executive OfficersFor the ninemonth transition period ended September 30, 2018 and the fiscal year ended December 31, 2017, we did not pay any cash compensation to ourexecutive officers of LK Technology Ltd. and a to our directors for serving on our board of directors of LK Technology Ltd.37Other than nonemployee directors, we do not intend to compensate directors for serving on our board of directors or any of its committees. We do,however, intend to reimburse each member of our board of directors for outofpocket expenses incurred by each director in connection with attending meetings ofthe board of directors and its committees.AdministrationThe Incentive Plan is administered by our board of directors, or at the discretion of the board, by our compensation committee. Our board of directors hasdelegated authority to our compensation committee to administer the Incentive Plan. Subject to the terms of the Incentive Plan, the compensation committee mayselect participants to receive awards, determine the types of awards and terms and conditions of awards, and interpret provisions of the Incentive Plan.The ordinary shares issued or to be issued under the Incentive Plan consist of authorized but unissued shares. If any ordinary shares covered by an awardare not purchased or are forfeited, or if an award otherwise terminates without delivery of any ordinary shares, then the number of ordinary shares counted againstthe aggregate number of ordinary shares available under the plan with respect to the award will, to the extent of any such forfeiture or termination, again be availablefor making awards under the Incentive Plan.EligibilityAwards may be made under the Incentive Plan to our employees, officers, directors, consultants or advisers or to any of our affiliates, and to any otherindividual whose participation in the Incentive Plan is determined to be in our best interests by our board of directors.Amendment or Termination of the PlanOur board of directors may terminate or amend the Incentive Plan at any time and for any reason. No amendment, however, may adversely impair the rightsof grantees with respect to outstanding awards. The Incentive Plan has a term of ten years. Amendments will be submitted for shareholder approval to the extentrequired by applicable stock exchange listing requirements or other applicable laws.OptionsThe Incentive Plan permits the granting of options to purchase ordinary shares intended to qualify as incentive share options under the Internal RevenueCode and share options that do not qualify as incentive share options, or nonqualified share options.The exercise price of each share option may not be less than 100% of the fair market value of our ADSs representing ordinary shares on the date of grant.In the case of certain 10% shareholders who receive incentive share options, the exercise price may not be less than 110% of the fair market value of our ADSsrepresenting ordinary shares on the date of grant. An exception to these requirements is made for options that we grant in substitution for options held byemployees of companies that we acquire. In such a case the exercise price is adjusted to preserve the economic value of the employee’s share option from his or herformer employer.The term of each share option is fixed by the compensation committee and may not exceed ten years from the date of grant. The compensation committeedetermines at what time or times each option may be exercised and the period of time, if any, after retirement, death, disability or termination of employment duringwhich options may be exercised.Options may be made exercisable in installments. The award agreement provides the vesting of the options. Exercisability of options may be accelerated bythe compensation committee.38In general, an optionee may pay the exercise price of an option by (1) cash or check (in U.S. dollars or Renminbi or other local currency as approved by thecompensation committee), (2) ordinary shares held for such period of time as may be required by the compensation committee, (3) delivery of a notice of a marketorder with a broker with respect to ordinary shares then issuable upon exercise of an option, and that the broker has been directed to pay us a sufficient portion ofnet proceeds of the sale in satisfaction of the exercise price, provided that payment of such proceeds is then made to us upon settlement of such sale, (4) otherproperty acceptable to the compensation committee with a fair market value equal to the exercise price, (5) cashless exercise or (6) any combination of the foregoing.Share options granted under the Incentive Plan may not be sold, transferred, pledged, or assigned other than by will or under applicable laws of descentand distribution. However, we may permit limited transfers of nonqualified options for the benefit of immediate family members of grantees to help with estateplanning concerns or pursuant to a domestic relations order in settlement of marital property rights.Other AwardsThe compensation committee may also award under the Incentive Plan:1.ordinary shares subject to restrictions;2.deferred ordinary shares, credited as deferred ordinary share units, but ultimately payable in the form of unrestricted ordinary shares inaccordance with the terms of the grant or with the participant’s deferral election;3.ordinary share units subject to restrictions;4.unrestricted ordinary shares, which are ordinary shares issued at no cost or for a purchase price determined by the compensation committee whichare free from any restrictions under the 2011 Omnibus Incentive Plan;5.dividend equivalent rights entitling the grantee to receive credits for dividends that would be paid if the grantee had held a specified number ofordinary shares; or6.a right to receive a number of ordinary shares or, in the discretion of the compensation committee, an amount in cash or a combination of ordinaryshares and cash, based on the increase in the fair market value of the ADSs representing ordinary shares underlying the right during a statedperiod specified by the compensation committee.Effect of Certain Corporate TransactionsCertain change of control transactions involving us may cause awards granted under the Incentive Plan to vest, unless the awards are continued orsubstituted for by the surviving company in connection with the corporate transaction.Unless otherwise provided in the appropriate option agreement on the date of grant or provided by our board of directors thereafter with the consent of thegrantee, options granted under the Incentive Plan become exercisable in full following (1) a dissolution of our company or a merger, consolidation or reorganizationof our company with one or more other entities in which we are not the surviving entity, (2) a sale of substantially all of our assets to another person or entity, or (3)any transaction (including without limitation a merger or reorganization in which we are the surviving entity) which results in any person or entity owning 50% ormore of the combined voting power of all classes of our shares.39Adjustments for Dividends and Similar EventsThe compensation committee will make appropriate adjustments in outstanding awards and the number of ordinary shares available for issuance under theIncentive Plan, including the individual limitations on awards, to reflect ordinary share dividends, stock splits and other similar events.C. BOARD PRACTICES.Board of DirectorsOur board of directors consists of six members being Messrs. Xuesong Song, Kegang Peng, Dennis Galgano, Jin Shi, Jiming Ha and Zhiaho Xu. Ourdirectors hold office until our annual meeting of shareholders, where their successors will be duly elected and qualified, or until the directors’ death, resignation orremoval, whichever is earlier. Our directors are not subject to a term of office and hold office until their resignation, death or incapacity or until their respectivesuccessors have been elected and qualified in accordance with our fourth amended and restated memorandum of association and articles of association. A directorwill be removed from office if, among other things, the director (1) becomes bankrupt, (2) dies or becomes of unsound mind, or (3) is absent from meetings of ourboard of directors for six consecutive months without leave and our board of directors resolves that the office is vacated. A director is not entitled to any specialbenefits upon termination of service with the company.Director IndependenceOur board of directors consists of six members; Messrs. Dennis Galgano, Jin Shi, Jiming Ha and Zhihao Xu have been determined by us to be independentdirectors within the meaning of the independent director guidelines of the NASDAQ Corporate Governance Rules (the “NASDAQ Rules”).Committees of Our Board of DirectorsTo enhance our corporate governance, we established three committees under our board of directors: an audit committee, a compensation committee, and anominating and corporate governance committee. We have adopted a charter for each of these committees. The committees have the following functions andmembers.Audit CommitteeOur audit committee reports to our board of directors regarding the appointment of our independent public accountants, the scope and results of ourannual audits, compliance with our accounting and financial policies and management’s procedures and policies relating to the adequacy of our internal accountingcontrols. Our audit committee consists of Messrs. Dennis Galgano, Jin Shi, and Jiming Ha. Mr. Galgano, having accounting and financial management expertise,serves as the chairman of the audit committee and is an “audit committee financial expert” as defined by the rules and regulations of the SEC. Our board of directorshas determined that each of these persons meet the definition of an “independent director” under the applicable NASDAQ Rules and under Rule 10A3 of theSecurities Exchange Act of 1934, as amended (the “Exchange Act”).Our audit committee is responsible for, among other things:●the appointment, evaluation, compensation, oversight and termination of the work of our independent auditor (including resolution of disagreementsbetween management and the independent auditor regarding financial reporting);●an annual performance evaluation of the audit committee;●establishing procedures for the receipt, retention and treatment of complaints regarding accounting, internal accounting controls, auditing matters orpotential violations of law, and the confidential, anonymous submission by our employees of concerns regarding questionable accounting or auditingmatters or potential violations of law;40●ensuring that it receives an transition report from our independent auditor describing our internal control procedures and any steps taken to deal withmaterial control deficiencies and attesting to the auditor’s independence and describing all relationships between the auditor and us;●reviewing our annual audited financial statements and quarterly financial statements with management and our independent auditor;●reviewing and approving all proposed related party transactions;●reviewing our policies with respect to risk assessment and risk management;●meeting separately and periodically with management and our independent auditor; and●reporting regularly to our board of directors.Compensation CommitteeOur compensation committee assists the board of directors in reviewing and approving the compensation structure of our directors and executive officers,including all forms of compensation to be provided to our directors and executive officers. In addition, the compensation committee reviews share compensationarrangements for all of our other employees. Members of the compensation committee are not prohibited from direct involvement in determining their owncompensation. Our chief executive officer is not permitted to be present at any committee meeting during which his or her compensation is deliberated. Ourcompensation committee consists of Dennis Galgano and Jin Shi, with Mr. Shi serving as the chairman of the compensation committee. Our board of directors hasdetermined that each of these persons meet the definition of “independent director” under the applicable requirements of the NASDAQ Rules.Our compensation committee is responsible for, among other things:●reviewing and approving corporate goals and objectives relevant to the compensation of our chief executive officer, evaluating the performance of ourchief executive officer in light of those goals and objectives and setting the compensation level of our chief executive officer based on this evaluation;●reviewing and making recommendations to the board with respect to the compensation of our executives, incentive compensation and equitybasedplans that are subject to board approval; and●providing annual performance evaluations of the compensation committee.Nominating and Corporate Governance CommitteeOur nominating and corporate governance committee assists the board of directors in identifying and selecting or recommending individuals qualified tobecome our directors, developing and recommending corporate governance principles and overseeing the evaluation of our board of directors and management. Ournominating and corporate governance committee consists of Jiming Ha and Zhihao Xue, with Mr. Ha serving as the chairman of the nominating and corporategovernance committee. Our board of directors has determined that each of these persons meet the definition of “independent director” under the applicablerequirements of the NASDAQ Rules.Our nominating and corporate governance committee is responsible for, among other things:●selecting and recommending to our board nominees for election or reelection to our board, or for appointment to fill any vacancy;●reviewing annually with our board the current composition of the board of directors with regards to characteristics such as independence, age, skills,experience and availability of service to us;●selecting and recommending to our board the names of directors to serve as members of the audit committee and the compensation committee, as wellas the nominating and corporate governance committee itself; advising our board of directors periodically with regards to significant developments inthe law and practice of corporate governance as well as our compliance with applicable laws and regulations, and making recommendations to ourboard of directors on all matters of corporate governance and on any remedial action to be taken; and●monitoring compliance with our code of business conduct and ethics, including reviewing the adequacy and effectiveness of our procedures to ensureproper compliance.41Code of Business Conduct and EthicsOur board of directors adopted a code of business conduct and ethics applicable to our directors, officers and employees.Duties of DirectorsUnder British Virgin Islands law, our directors have a duty to act honestly, in good faith and with a view to our best interests. Our directors also have a dutyto exercise care, diligence and skills that a reasonably prudent person would exercise in comparable circumstances. In fulfilling their duty of care to us, our directorsmust ensure compliance with our memorandum of association and articles of association. We have the right to seek damages if a duty owed by our directors isbreached.The functions and powers of our board of directors include, among others:●appointing officers and determining the term of office of the officers;●authorizing the payment of donations to religious, charitable, public or other bodies, clubs, funds or associations as deemed advisable;●exercising the borrowing powers of the company and mortgaging the property of the company;●executing cheques, promissory notes and other negotiable instruments on behalf of the company; and●maintaining or registering a register of mortgages, charges or other encumbrances of the company.Remuneration and BorrowingThe directors may receive such remuneration as our board of directors may determine from time to time. Each director is entitled to be repaid or prepaid alltraveling, hotel and incidental expenses reasonably incurred or expected to be incurred in attending meetings of our board of directors or committees of our board ofdirectors or shareholder meetings or otherwise in connection with the discharge of his or her duties as a director. The compensation committee will assist thedirectors in reviewing and approving the compensation structure for the directors.Our board of directors may exercise all the powers of the company to borrow money and to mortgage or charge our undertakings and property or any partthereof, to issue debentures, debenture stock and other securities whenever money is borrowed or as security for any debt, liability or obligation of the company orof any third party.QualificationA director is not required to hold shares as a qualification to office.42Limitation on Liability and Other Indemnification MattersBritish Virgin Islands law does not limit the extent to which a company’s memorandum of association and articles of association may provide forindemnification of officers and directors, except to the extent any such provision may be held by the British Virgin Islands courts to be contrary to public policy,such as to provide indemnification against civil fraud or the consequences of committing a crime.Under our memorandum of association and articles of association, we may indemnify our directors, officers and liquidators against all expenses, includinglegal fees, and against all judgments, fines and amounts paid in settlement and reasonably incurred in connection with civil, criminal, administrative or investigativeproceedings to which they are party or are threatened to be made a party by reason of their acting as our director, officer or liquidator. To be entitled toindemnification, these persons must have acted honestly and in good faith with a view to the best interest of the company and, in the case of criminal proceedings,they must have had no reasonable cause to believe their conduct was unlawful.Compensation Committee Interlocks and Insider ParticipationNone of the members of our compensation committee is an officer or employee of our company. None of our executive officers currently serves, or in thepast year has served, as a member of the board of directors or compensation committee of any entity that has one or more executive officers serving on our board ofdirectors or compensation committee.Employment AgreementsOn August 19, 2018, the Company entered into an Employment Agreement (the “Song Agreement”) with Mr. Xuesong Song, to serve as the ChiefExecutive Officer of the Company for a fouryear term, subject to renewal. Under the terms of the Song Agreement, Mr. Song will receive no salary for his servicesbut will be eligible for an annual cash bonus in the Board’s sole discretion.On August 19, 2018, the Company entered into an Employment Agreement (the “Yu Agreement”) with Mr. Jie Yu, to serve as the Chief Financial Officer ofthe Company for a fouryear term, subject to renewal. Under the terms of the Yu Agreement, Mr. Yu will receive an annual salary of RMB700,000, and will be eligiblefor an annual cash bonus in the Board’s sole discretion.D. EMPLOYEES.As of September 30, 2018 and December 31, 2017, we had a total of 107 and 37 fulltime employees, including 48 and 13 in research and development, 9 and 2in sales and marketing and the rest in a variety of other divisions, respectively. All of our employees are fulltime employees. None of our employees is currentlyrepresented by a union and/or collective bargaining agreements. We believe that we have good relations with our employees and since our inception we have hadno history of work stoppages or union organizing campaigns.E. SHARE OWNERSHIP.The following table provides information as to the beneficial ownership of our ordinary shares as of October 10, 2018, by the persons listed. Beneficialownership of shares is determined under the rules of the SEC and generally includes any shares over which a person exercises sole or shared voting or investmentpower. For purposes of the following table, a person is deemed to have beneficial ownership of any ordinary shares if such person has the right to acquire suchshares within 60 days of October 10, 2018. For purposes of computing the percentage of outstanding shares held by each person, any shares that such person hasthe right to acquire within 60 days after of October 10, 2018 are deemed to be outstanding, but are not deemed to be outstanding for the purpose of computing thepercentage ownership of any other person. Except as otherwise noted, the persons named in the table have sole voting and investment power with respect to all ofthe ordinary shares beneficially owned by them. Unless otherwise indicated, the address of each person listed is c/o Luokung Technologies, LAB 32, SOHO 3Q, No9, Guanghua Road, Chaoyang District, Beijing, People’s Republic of China.43Percentage ownership in the following table is based on 199,317,558 ordinary shares outstanding on October 10, 2018.Number ofsharesPercent ofclassDirectors and named executive officersCharm Dragon International Limited (1)4,030,8822.03%Xuesong Song, Chairman, Chief Executive Officer and Director(2)38,156,43019.30%Kegang Peng, Vice President and Director (3)17,231,9558.71%Dennis Galgano, Director75,796*%Jin Shi, DirectorJiming Ha, DirectorZhihao Xu, Director (4)7,579,1843.83%Dongpu Zhang, President (5)2,321,7921.17%Chuang Tao, Director (6)1,221,996*%Directors and executive officers as a group (10 persons)66,587,15233.69%(1)Charm Dragon International Limited is a British Virgin Islands company controlled by Mr. Xuesong Song.(2)Consists of (i) 4,030,882 shares owned directly by Charm Dragon International Limited, a British Virgin Islands company and (ii) 22,624,793 shares owneddirectly by Bravo First Development Limited, a British Virgin Islands company. Mr. Xuesong Song is the controlling shareholder of Bravo First DevelopmentLimited. Mr. Xuesong Song is the sole director of Charm Dragon International Limited.(3)Consists of 17,231,955 shares owned directly by Plenty Prestige Enterprises Limited, a British Virgin Islands company. Mr. Kegang Peng is the sole director ofPlenty Prestige Enterprises Limited.(4)Consists of 7,579,184 shares directly owned by Geely Group Limited., a Chinese company. Mr. Zhihao Xu is the Chief Executive Officer of Geely GroupLimited.(5)Consists of 2,321,792 shares owned directly by Genoa Peak Limited, a British Virgin Islands company. Mr. Dongpu Zhang controls Genoa Peak Limited.(6)Consists of 1,221,996 shares owned directly by Globalearth Holdings Limited, a British Virgin Islands company. Mr. Chuang Tao controls Globalearth HoldingsLimited.*Represents less than 1% of shares outstandingITEM 7. MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS.A. MAJOR SHAREHOLDERSPlease refer to Item 6.E “Directors, Senior Management and Employees — Share Ownership.”To our knowledge, (A) we are not directly or indirectly owned or controlled by (i) another corporation or (ii) any foreign government and (B) there are noarrangements (including any announced or expected takeover bid), the operation of which may at a subsequent date result in a change in our control.The voting rights of our major shareholders do not differ from the voting rights of other holders of the same class of shares.44B. RELATED PARTY TRANSACTIONS. BUSINESS RELATIONSHIPS.Our subsidiaries, consolidated affiliated entities, and the subsidiaries of the consolidated affiliated entities have engaged, during the ordinary course ofbusiness, in a number of customary transactions with each other. All of these intercompany balances have been eliminated in consolidation.As of December 31, 2017, we had amounts due from related parties, C Media Limited and Ya Tuo Ji International Consultancy (Beijing) Limited, in theamounts of $11.8 million and $0.2 million, respectively. These amounts due from related parties are short term in nature, noninterest bearing, unsecured andrepayable on demand.As of December 31, 2017, we had amounts due to related parties, Mr. Xuesong Song, our chairman and chief executive officer, Thumb Beijing Branch andThumb Shenzhen Branch, in the amounts of $2.9 million, $0.6 million and $0.03 million, respectively. These amounts due to related parties are short term in nature,noninterest bearing, unsecured and payable on demand.We are party to a series of control agreements with Beijing Zhong Chuan Shi Xun. In addition, our chief executive officer, Mr. Xuesong Song, serves as andofficer of Beijing Zhong Chuan Shi Xun and is a shareholder of Beijing Zhong Chuan Shi Xun. The following table sets forth the relationship of Mr. Song withBeijing Zhong Chuan Shi Xun:NameRelationship withLuokung TechnologyRelationship withBeijing Zhong Chuan Shi XunPercentageOwnership Interest inBeijing Zhong Chuan Shi XunXuesong SongChief Executive OfficerChief Executive Officer61.83%C. INTERESTS OF EXPERTS AND COUNSEL.None.ITEM 8. FINANCIAL INFORMATION.A. CONSOLIDATED STATEMENTS AND OTHER FINANCIAL INFORMATION.See “Item 18. Financial Statements.”Legal ProceedingsTo our knowledge, other than as described below there are no material legal proceedings threatened against us. From time to time, we may be subject tovarious claims and legal actions arising in the ordinary course of business. Following the consummation of the AEA, we became successor in interest to the legalproceedings described below.Litigation with Shanghai Fusheng Weier Intelligent Control Technology Co., Ltd.On January 22, 2016, Zhong Chuan Rui You and Shanghai Fusheng Weier Intelligent Control Technology Co., Ltd. (“Fusheng Weier”) signed a contract forequipment of $1,652,842 (RMB10,800,000). Since Zhong Chuan Rui You did not make the payments of $1,126,381 (RMB7,360,000) on the due dates, Fusheng Weierfiled a lawsuit against Zhong Chuan Rui You in Shanghai Xuhui District People's Court on October 8, 2016. On March 9, 2017, Xuhui District People's Court issuedthe verdict requiring Zhong Chuan Rui You to pay the overdue debts. In August 2017, C Media Limited made the payment of $512,075 (RMB3,346,000). Theremaining balance has been accrued in accounts payable. The payment schedule for the remaining balance is being negotiated by the two parties. On February 5,2018, a hearing was held adding Zhong Chuan Shi Xun as a defendant. The Group plans to settle the remaining balance within one year.45Lawsuit with Gansu Jinlun Culture Media Co., Ltd.On August 22, 2014, Zhong Chuan Rui You and Gansu Jinlun Culture Media Co., Ltd. (“Gansu Jinlun”) signed a “Lanzhou Railway Bureau AirconditionedTrain WiFi Network System Advertising Operation Rights Agreement” for advertising on 72 trains of $1,467,880 (RMB9,604,633). Due to the dispute on theproject implementation, Zhong Chuan Rui You did not pay the advertising fee. On August 23, 2017, Gansu Jinlun filed a lawsuit with Gansu Intermediate People'sCourt. On December 19, 2017, Gansu Intermediate People's Court issued a verdict, ruling that Zhong Chuan Rui You settle the overdue advertising fee. Since only 18out of 72 trains have been installed with Wifi network system, Zhong Chuan Rui You disputed and appealed to the verdict. The next court trial date has not yet beendetermined. C Media and Gansu Jinlun are negotiating a potential settlement to resume the contract. According to the legal counsel, it is probable that the settlementwill amount to approximately $459,000 (RMB3,000,000); therefore, this amount has been accrued in accounts payable as at December 31, 2017.Litigation with Shenzhen Hua Xun Fang Zhou Technology Co., Ltd.On June 16, 2015, Zhong Chuan Rui You signed a cooperation agreement with Shenzhen Hua Xun Fang Zhou Technology Co., Ltd. (“Shenzhen Hua Xun”)and Xuesong Song, a major shareholder of C Media Limited. Pursuant to this agreement, Zhong Chuan Rui You procures equipment from Shenzhen Hua Xun.Xuesong Song acts as a joint liability guarantor for the entire debts of Zhong Chuan Rui You under this agreement. As Zhong Chuan Rui You did not make thepayments on the due dates, Shenzhen Hua Xun filed a lawsuit with Shenzhen Baoan District People's Court on May 31, 2016. On November 1, 2016, Zhong ChuanRui You, Xuesong Song and Shenzhen Hua Xun reached a settlement in Shenzhen Baoan District People's Court to settle $1,735,389 (RMB11,355,000) in fourinstalments. On December 30, 2017, the debt was assigned to C Media Limited.Dividend PolicyWe currently intend to retain all of our available funds and future earnings for use in the operation and expansion of our business and do not anticipatepaying cash dividends in the foreseeable future. Under the terms of our Amended and Restated Memorandum and Articles of Association the declaration andpayment of any dividends in the future will be determined by our board of directors, in its discretion, and will depend on a number of factors, including our earnings,capital requirements and overall financial condition and our ability to receive dividends from our subsidiaries. If we pay any dividends, we will pay our ADS holders’dividends with respect to their underlying shares to the same extent as holders of our ordinary shares, subject to the terms of the deposit agreement, including thefees and expenses payable thereunder. Cash dividends on our ordinary shares, if any, will be paid in U.S. dollars.Our ability to receive dividends from our subsidiaries may limit our ability to pay dividends on our ordinary shares. See Risk Factors – Risks Related toDoing Business in China – Our holding company structure may limit the payment of dividends” and “Item 10. Additional Information – D. Exchange Controls –Dividend Distribution”.B. SIGNIFICANT CHANGES.N/AITEM 9. THE OFFER AND LISTINGA. OFFER AND LISTING DETAILS.Markets and Share Price HistoryOur ordinary shares are not currently listed on any trading market. Our American Depository Shares (“ADSs”) were voluntarily delisted from the NASDAQCapital Market on September 19, 2018. We have applied to NASDAQ for the listing of our ordinary shares on the NASDAQ Capital Market and received an approvalfor listing of Ordinary Shares on August 6, 2018, and as of the date of this transition report, that application and approval are currently under review.46The table below sets forth the high and low reported sales prices in dollars of our ordinary shares, which are represented by ADSs, as reported byNASDAQ in the periods as indicated:ADSHighLowAnnual Highs and Lows (as of the fiscal year end 09/30 for the five most recent full financial years)*20175.592.67201610.21.62Quarterly Highs and Lows (for the two most recent full financial years and any subsequent period, based on calendarquarter end)*2018Third Quarter8.006.30Second Quarter8.824.25First Quarter6.403.702017Fourth Quarter5.592.91Third Quarter3.992.67Second Quarter4.063.07First Quarter5.152.832016Fourth Quarter6.594.20Third Quarter10.201.62Second Quarter3.101.97First Quarter3.602.12Monthly Highs and Lows (for the most recent six months)September 20188.006.41August 20187.706.63July 20187.506.30June 20188.827.55May 20187.805.92April 20187.454.25*The Company effected a 1for10 reverse stock split of its ordinary shares on November 6, 2012 (the “Reverse Split”). The ratio between each AmericanDepositary Share (“ADS”) and its underlying ordinary share postReverse Split remains the same, namely, one ADR remains to represent one ordinary sharepost the Reverse Split. The price listed here after November 6, 2012 reflected the effect from the Reverse Split.B. PLAN OF DISTRIBUTION.Not Applicable.C. MARKETS.Our ordinary shares are not currently listed on any trading market. Our ADSs were voluntarily delisted from the NASDAQ Capital Market on September 19,2018. We have applied to NASDAQ for the listing of our ordinary shares on the NASDAQ Capital Market and received an approval for listing of Ordinary Shares onAugust 6, 2018, and as of the date of this transition report, that application and approval are currently under review.47D. SELLING SHAREHOLDERS.Not applicable.E. DILUTION.Not applicable.F. EXPENSES OF THE ISSUE.Not applicable.ITEM 10. ADDITIONAL INFORMATION.A. SHARE CAPITALNot applicable.B. MEMORANDUM AND ARTICLES OF ASSOCIATIONWe are a British Virgin Islands company incorporated with limited liability and our affairs are governed by the provisions of our memorandum of associationand articles of association, as amended and restated from time to time, and by the provisions of applicable British Virgin Islands law.Our memorandum of association and articles of association authorize the issuance of up to 251,000,000 shares, which are designated into (i) 250,000,000 ofordinary shares of the Company (“Ordinary Shares”), and (ii) 1,000,000 preferred shares of the Company (“Preferred Shares”), in each case with the rights,preferences and privileges as set out in the memorandum and articles of association of the Company.Please see below for a description of our ADSs under “Item 12. Description of Securities Other Than Equity Securities – D. American Depository Shares.”The following is a summary of the material provisions of our ordinary shares and our memorandum of association and articles of association.Ordinary SharesAll of our issued and outstanding ordinary shares are fully paid and nonassessable. Holders of our ordinary shares who are nonresidents of the BritishVirgin Islands may freely hold and vote their shares.Subject to the memorandum and articles of association (and, for greater clarity, without prejudice to any special rights conferred thereby on the holders ofany other shares), an Ordinary Share of the Company confers on the holder:(a)the right to one vote per Ordinary Share at a meeting of the members or on any resolution of members;(b)the right to an equal share in any distribution paid by the Company; and(c)the right to an equal share in the distribution of the surplus assets of the Company on a winding up;48Subject to the memorandum and articles of association (and, for greater clarity, without prejudice to any special rights conferred thereby on the holders ofany other shares), a Preferred Share of the Company confers on the holder:(a)the right to 399 votes per Preferred Share at a meeting of the members or on any resolution of members;(b)the right to an equal share in any distribution paid by the Company;(c)the right to an equal share in the distribution of the surplus assets of the Company on a winding up;(d)be freely transferable, in whole or in part, by Mr. Xuesong Song to any third party through one or more Private Transactions, subject toApplicable Law; and(e)be freely transferable, in whole or in part, by Mr. Xuesong Song to any third party through one or more Public Transactions, subject to ApplicableLaw and Automatic Conversion of such Preferred Share(s) into Ordinary Share(s).Each Preferred Share shall be automatically converted at any time after issue and without the payment of any additional sum into an equal number of fullypaid Ordinary Shares upon the conclusion of any transfer by Mr. Xuesong Song to any third party through one or more Public Transactions.Limitation on Liability and Indemnification MattersUnder British Virgin Islands law, each of our directors and officers, in performing his or her functions, is required to act honestly and in good faith with aview to our best interests and exercise the care, diligence and skill that a reasonably prudent person would exercise in comparable circumstances. Our memorandumof association and articles of association provide that, to the fullest extent permitted by British Virgin Islands law or any other applicable laws, our directors will notbe personally liable to us or our shareholders for any acts or omissions in the performance of their duties. Such limitation of liability does not affect the availabilityof equitable remedies such as injunctive relief or rescission. These provisions will not limit the liability of directors under United States federal securities laws.We may indemnify any of our directors or anyone serving at our request as a director of another entity against all expenses, including legal fees, andagainst all judgments, fines and amounts paid in settlement and reasonably incurred in connection with legal, administrative or investigative proceedings. We mayonly indemnify a director if he or she acted honestly and in good faith with the view to our best interests and, in the case of criminal proceedings, the director hadno reasonable cause to believe that his or her conduct was unlawful. The decision of our board of directors as to whether the director acted honestly and in goodfaith with a view to our best interests and as to whether the director had no reasonable cause to believe that his or her conduct was unlawful, is in the absence offraud sufficient for the purposes of indemnification, unless a question of law is involved. The termination of any proceedings by any judgment, order, settlement,conviction or the entry of no plea does not, by itself, create a presumption that a director did not act honestly and in good faith and with a view to our best interestsor that the director had reasonable cause to believe that his or her conduct was unlawful. If a director to be indemnified has been successful in defense of anyproceedings referred to above, the director is entitled to be indemnified against all expenses, including legal fees, and against all judgments, fines and amounts paidin settlement and reasonably incurred by the director or officer in connection with the proceedings.We may purchase and maintain insurance in relation to any of our directors or officers against any liability asserted against the directors or officers andincurred by the directors or officers in that capacity, whether or not we have or would have had the power to indemnify the directors or officers against the liabilityas provided in our memorandum of association and articles of association.Insofar as indemnification for liabilities arising under the Securities Act may be permitted for our directors or officers under the foregoing provisions, wehave been informed that in the opinion of the Securities and Exchange Commission, such indemnification is against public policy as expressed in the Securities Actand is therefore unenforceable as a matter of United States law.49Differences in Corporate LawWe were incorporated under, and are governed by, the laws of the British Virgin Islands. The corporate statutes of the State of Delaware and the BritishVirgin Islands are similar, and the flexibility available under British Virgin Islands law has enabled us to adopt memorandum of association and articles of associationthat will provide shareholders with rights that do not vary in any material respect from those they would enjoy if we were incorporated under the Delaware GeneralCorporation Law, or Delaware corporate law. Set forth below is a summary of some of the differences between provisions of the BVI Act applicable to us and thelaws application to companies incorporated in Delaware and their shareholders.Director’s Fiduciary DutiesUnder Delaware corporate law, a director of a Delaware corporation has a fiduciary duty to the corporation and its stockholders. This duty has twocomponents: the duty of care and the duty of loyalty. The duty of care requires that a director act in good faith, with the care that an ordinarily prudent personwould exercise under similar circumstances. Under this duty, a director must inform himself of, and disclose to stockholders, all material information reasonablyavailable regarding a significant transaction. The duty of loyalty requires that a director act in a manner he reasonably believes to be in the best interests of thecorporation. He must not use his corporate position for personal gain or advantage. This duty prohibits selfdealing by a director and mandates that the bestinterest of the corporation and its stockholders take precedence over any interest possessed by a director, officer or controlling stockholder and not shared by thestockholders generally. In general, actions of a director are presumed to have been made on an informed basis, in good faith and in the honest belief that the actiontaken was in the best interests of the corporation. However, this presumption may be rebutted by evidence of a breach of one of the fiduciary duties. Should suchevidence be presented concerning a transaction by a director, a director must prove the procedural fairness of the transaction, and that the transaction was of fairvalue to the corporation.British Virgin Islands law provides that every director of a British Virgin Islands company in exercising his powers or performing his duties shall acthonestly and in good faith and in what the director believes to be in the best interests of the company. Additionally, the director shall exercise the care, diligence andskill that a reasonable director would exercise in the same circumstances taking into account the nature of the company, the nature of the decision and the positionof the director and his responsibilities. In addition, British Virgin Islands law provides that a director shall exercise his powers as a director for a proper purpose andshall not act, or agree to the company acting, in a manner that contravenes British Virgin Islands law or the memorandum association or articles of association of thecompany.Amendment of Governing DocumentsUnder Delaware corporate law, with very limited exceptions, a vote of the stockholders is required to amend the certificate of incorporation. Under BritishVirgin Islands law and our memorandum of association and articles of association, (i) our shareholders may amend our memorandum of association and articles ofassociation by a resolution of shareholders, or (ii) our board of directors may amend our memorandum of association and articles of association by a resolution ofdirectors without a requirement for a resolution of shareholders so long as the amendment does not:●restrict the rights of the shareholders to amend the memorandum of association and articles of association;●change the percentage of shareholders required to pass a resolution of shareholders to amend the memorandum of association and articles ofassociation;●amend the memorandum of association and articles of association in circumstances where the memorandum of association and articles ofassociation cannot be amended by the shareholders; or●amend the provisions of memorandum of association or the articles of association pertaining to “rights attaching to shares,” “rights not varied bythe issue of the shares pari passu,” “variation of rights” and “amendment of memorandum and articles”.50Written Consent of DirectorsUnder Delaware corporate law, directors may act by written consent only on the basis of a unanimous vote. Under British Virgin Islands law, directors’consents need only a majority of directors signing to take effect.Written Consent of ShareholdersUnder Delaware corporate law, unless otherwise provided in the certificate of incorporation, any action to be taken at any annual or special meeting ofstockholders of a corporation, may be taken by written consent of the holders of outstanding stock having not less than the minimum number of votes that wouldbe necessary to take such action at a meeting. As permitted by British Virgin Islands law, shareholders’ consents need only a majority of shareholders signing totake effect. Our memorandum of association and articles of association provide that shareholders may approve corporate matters by way of a resolution consentedto at a meeting of shareholders or in writing by a majority of shareholders entitled to vote thereon.Shareholder ProposalsUnder Delaware corporate law, a shareholder has the right to put any proposal before the annual meeting of shareholders, provided it complies with thenotice provisions in the governing documents. A special meeting may be called by the board of directors or any other person authorized to do so in the governingdocuments, but shareholders may be precluded from calling special meetings. British Virgin Islands law and our memorandum of association and articles ofassociation provide that our directors shall call a meeting of the shareholders if requested in writing to do so by shareholders entitled to exercise at least 30% of thevoting rights in respect of the matter for which the meeting is requested.Sale of AssetsUnder Delaware corporate law, a vote of the stockholders is required to approve the sale of assets only when all or substantially all assets are being sold. Inthe British Virgin Islands, shareholder approval is required when more than 50% of the company’s total assets by value are being disposed of or sold.Dissolution; Winding UpUnder Delaware corporate law, unless the board of directors approves the proposal to dissolve, dissolution must be approved by shareholders holding100% of the total voting power of the corporation. Only if the dissolution is initiated by the board of directors may it be approved by a simple majority of thecorporation’s outstanding shares. Delaware corporate law allows a Delaware corporation to include in its certificate of incorporation a supermajority votingrequirement in connection with dissolutions initiated by the board. As permitted by British Virgin Islands law and our memorandum of association and articles ofassociation, we may be voluntarily liquidated under Part XII of the BVI Act by resolution of directors and resolution of shareholders if we have no liabilities and weare able to pay our debts as they fall due.Redemption of SharesUnder Delaware corporate law, any stock may be made subject to redemption by the corporation at its option or at the option of the holders of such stockprovided there remains outstanding shares with full voting power. Such stock may be made redeemable for cash, property or rights, as specified in the certificate ofincorporation or in the resolution of the board of directors providing for the issue of such stock. As permitted by British Virgin Islands law, and our memorandum ofassociation and articles of association, shares may be repurchased, redeemed or otherwise acquired by us. Our directors must determine that immediately followingthe redemption or repurchase we will be able to satisfy our debts as they fall due and the value of our assets exceeds our liabilities.51Variation of Rights of SharesUnder Delaware corporate law, a corporation may vary the rights of a class of shares with the approval of a majority of the outstanding shares of suchclass, unless the certificate of incorporation provides otherwise. As permitted by British Virgin Islands law, and our memorandum of association and articles ofassociation, if our share capital is divided into more than one class of shares, we may vary the rights attached to any class only with the consent in writing ofholders of not less than threefourths of the issued shares of that class and holders of not less than threefourths of the issued shares of any other class of shareswhich may be affected by the variation.Removal of DirectorsUnder Delaware corporate law, a director of a corporation with a classified board may be removed only for cause with the approval of a majority of theoutstanding shares entitled to vote, unless the certificate provides otherwise. As permitted by British Virgin Islands law and our memorandum of association andarticles of association, directors may be removed by resolution of directors or resolution of shareholders.MergersUnder the BVI Act, two or more companies may merge or consolidate in accordance with the statutory provisions. A merger means the merging of two ormore constituent companies into one of the constituent companies, and a consolidation means the uniting of two or more constituent companies into a newcompany. In order to merger or consolidate, the directors of each constituent company must approve a written plan of merger or consolidation which must beauthorized by a resolution of shareholders.Shareholders not otherwise entitled to vote on the merger or consolidation may still acquire the right to vote if the plan of merger or consolidation containsany provision which, if proposed as an amendment to the memorandum association or articles of association, would entitle them to vote as a class or series on theproposed amendment. In any event, all shareholders must be given a copy of the plan of merger or consolidation irrespective of whether they are entitled to vote atthe meeting or consent to the written resolution to approve the plan of merger or consolidation.Inspection of Books and RecordsUnder Delaware corporate law, any shareholder of a corporation may for any proper purpose inspect or make copies of the corporation’s stock ledger, list ofshareholders and other books and records. Holders of our shares have no general right under British Virgin Islands law to inspect or obtain copies of our list ofshareholders or our corporate records. However, we will provide holders of our shares with annual audited financial statements. See “Where You Can FindAdditional Information.”Conflict of InterestThe BVI Act provides that a director shall, after becoming aware that he is interested in a transaction entered into or to be entered into by the company,disclose that interest to the board of directors of the company. The failure of a director to disclose that interest does not affect the validity of a transaction enteredinto by the director or the company, so long as the director’s interest was disclosed to the board prior to the company’s entry into the transaction or was notrequired to be disclosed (for example where the transaction is between the company and the director himself or is otherwise in the ordinary course of business andon usual terms and conditions). As permitted by British Virgin Islands law and our memorandum of association and articles of association, a director interested in aparticular transaction may vote on it, attend meetings at which it is considered, and sign documents on our behalf which relate to the transaction.52Transactions with Interested ShareholdersDelaware corporate law contains a business combination statute applicable to Delaware public corporations whereby, unless the corporation hasspecifically elected not to be governed by such statute by amendment to its certificate of incorporation, it is prohibited from engaging in certain businesscombinations with an “interested shareholder” for three years following the date that such person becomes an interested shareholder. An interested shareholdergenerally is a person or group who or that owns or owned 15% or more of the target’s outstanding voting stock within the past three years. This has the effect oflimiting the ability of a potential acquirer to make a twotiered bid for the target in which all shareholders would not be treated equally. The statute does not apply if,among other things, prior to the date on which such shareholder becomes an interested shareholder, the board of directors approves either the businesscombination or the transaction that resulted in the person becoming an interested shareholder. This encourages any potential acquirer of a Delaware publiccorporation to negotiate the terms of any acquisition transaction with the target’s board of directors.British Virgin Islands law has no comparable provision. As a result, we cannot avail ourselves of the types of protections afforded by the Delawarebusiness combination statute. However, although British Virgin Islands law does not regulate transactions between a company and its significant shareholders, itdoes provide that such transactions must be entered into bona fide in the best interests of the company and not with the effect of constituting a fraud on theminority shareholders.Independent DirectorsThere are no provisions under Delaware corporate law or under the BVI Act that require a majority of our directors to be independent.Cumulative VotingUnder Delaware corporate law, cumulative voting for elections of directors is not permitted unless the company’s certificate of incorporation specificallyprovides for it. Cumulative voting potentially facilitates the representation of minority shareholders on a board of directors since it permits the minority shareholderto cast all the votes to which the shareholder is entitled on a single director, which increases the shareholder’s voting power with respect to electing such director.There are no prohibitions to cumulative voting under the laws of the British Virgin Islands, but our memorandum of association and articles of association do notprovide for cumulative votingAntitakeover Provisions in Our Memorandum of association and articles of associationSome provisions of our memorandum of association and articles of association may discourage, delay or prevent a change in control of our company ormanagement that shareholders may consider favorable, including provisions that authorize our board of directors to issue preference shares in one or more seriesand to designate the price, rights, preferences, privileges and restrictions of such preference shares.C. MATERIAL CONTRACTS.On January 25, 2018, the Company executed an Asset Exchange Agreement (“AEA”) with C Media Limited, a corporation organized under the laws of theCayman Islands (“C Media”), whereby the Company agreed to purchase all the capital stock and equity interests of LK Technology Ltd, together with its whollyowned subsidiaries MMB Limited and Mobile Media (China) Limited and all respective subsidiaries from C Media in exchange for (i) 185,412,599 ordinary shares ofthe Company, par value $0.01 per share (“Ordinary Shares”), (ii) 1,000,000 preferred shares of Kingtone (“Preferred Shares”) and (iii) all issued and outstandingcapital stock or equity interests of the Company’s subsidiary, Topsky InfoTech Holdings Pte Ltd., and its whollyowned subsidiary Xi’an Softech Co., Ltd.,including all entities effectively controlled by Xi’an Softech Co., Ltd. through contractual arrangements and variable business entities.To consummate the contemplated transactions described above, the Company obtained shareholder consent at a special meeting held on May 20, 2018, (i)to authorize 1,000,000 Preferred Shares, (ii) to authorize additional Ordinary Shares so that total authorized Ordinary Shares is equal to 250,000,000 shares, (iii) to listsuch Ordinary Shares on NASDAQ, and (iv) to approve the transactions contemplated in the Asset Exchange Agreement. Additionally, NASDAQ needed toapprove the contemplated transactions prior to consummation thereof. C Media had the right to terminate the AEA if the closing had not occurred (other thanthrough the failure of C Media to comply fully with its obligations under the AEA) on or before July 31, 2018. The transactions contemplated by the AEA wereconsummated on August 17, 2018.53On January 25, 2018, five shareholders of the Company including its largest shareholder and its Chief Executive Officer executed a Securities PurchaseAgreement, whereby such shareholders agreed to sell a total of 617,988 Ordinary Shares and 282,694 American Depository Shares of the Company to Redstone YYLManagement Limited, a company incorporated in the British Virgin Islands, in exchange for an aggregate purchase price of $1,897,860.09.On August 25, 2018, LK Technology entered into a Stock Purchase Agreement (the “Agreement”) with the shareholders (“Shareholders”) of SuperengineHoldings Limited, a limited liability company organized under the laws of the British Virgin Islands (the “Superengine”), pursuant to which LK Technology acquiredall of the issued and outstanding capital stock of Superengine for an aggregate purchase price of US$60 million (the “Purchase Price”), which are paid by theissuance of our Ordinary Shares in an amount equal to the quotient of (x) the Purchase Price divided by (y) the average of the closing prices of the Ordinary Shareson the NASDAQ Capital Market over the 12 months period preceding July 31, 2018. We are a party to the Agreement in connection with the issuance of theOrdinary Shares and certain other limited purposes.D. EXCHANGE CONTROLS.This section sets forth a summary of the most significant regulations or requirements that affect our business activities in China or our shareholders’ rightto receive dividends and other distributions from us.Regulations on Internet Content ProvidersThe Administrative Measures on Internet Information Services, or the Internet Content Measures, which was promulgated by the State Council onSeptember 25, 2000 and amended on January 8, 2011, set out guidelines on the provision of internet information services. The Internet Content Measures specifiesthat internet information services regarding news, publications, education, medical and health care, pharmacy and medical appliances, among other things, arerequired to be examined, approved and regulated by the relevant authorities. Internet information providers are prohibited from providing services beyond thoseincluded in the scope of their licenses or filings. Furthermore, the Internet Content Measures specifies a list of prohibited content. Internet information providers areprohibited from producing, copying, publishing or distributing information that is humiliating or defamatory to others or that infringes the legal rights of others.Internet information providers that violate such prohibition may face criminal charges or administrative sanctions. Internet information providers must monitor andcontrol the information posted on their websites. If any prohibited content is found, they must remove the content immediately, keep a record of such content andreport to the relevant authorities.The Internet Content Measures classifies internet information services into commercial internet information services and noncommercial internetinformation services. Commercial internet information services refer to services that provide information or services to internet users with charge. A provider ofcommercial internet information services must obtain an ICP License.Regulations on Internet Audiovideo Program ServicesOn December 20, 2007, the MII and the State Administration of Press, Publication, Radio, Film and Television, or the SAPPRFT, jointly issued theAdministrative Provisions for the Internet AudioVideo Program Service, or the Audiovideo Program Provisions, which came into effect on January 31, 2008 andwas amended on August 28, 2015. The Audiovideo Program Provisions defines “internet audiovideo program services” as producing, editing and integrating ofaudiovideo programs, supplying audiovideo programs to the public via the internet, and providing audiovideo programs uploading and transmission services to athird party. Entities providing internet audiovideo programs services must obtain an internet audiovideo program transmission license. Applicants for such licensesshall be stateowned or statecontrolled entities unless an internet audiovideo program transmission license has been obtained prior to the effectiveness of theAudiovideo Program Provisions in accordance with the thenineffect laws and regulations. In addition, foreigninvested enterprises are not allowed to engage inthe abovementioned services. According to the Audiovideo Program Provisions and other relevant laws and regulations, audiovideo programs provided by theentities supplying Internet audiovideo program services shall not contain any illegal content or other content prohibited by the laws and regulations, such as anycontent against the basic principles in the PRC Constitution, any content that damages the sovereignty of the country or national security, and any content thatdisturbs social order or undermine social stability. An audiovideo program that has already been broadcast shall be retained in full for at least 60 days. Movies,television programs and other media content used as Internet audiovideo programs shall comply with relevant administrative regulations on programs broadcaststhrough radio, movie and television channels. Entities providing services related to Internet audiovideo programs shall immediately delete the audiovideoprograms violating laws and regulations, keep relevant records, report relevant authorities and implement other regulatory requirements.54The Categories of the Internet AudioVideo Program Services, or the Audiovideo Program Categories, promulgated by SAPPRFT on March 10, 2017,classifies internet audio/video programs into four categories: (I) Category I internet audio/video program service, which is carried out with a form of radio station ortelevision station; (II) Category II internet audio/video program service, including (a) rebroadcasting service of current political news audio/video programs; (b)hosting, interviewing, reporting and commenting service of arts, entertainment, technology, finance and economics, sports, education and other specializedaudio/video programs; (c) producing (interviewing not included) and broadcasting service of arts, entertainment, technology, finance and economics, sports,education and other specialized audio/video programs; (d) producing and broadcasting service of internet films/dramas; (e) aggregating and broadcasting service offilms, television dramas and cartoons; (f) aggregating and broadcasting service of arts, entertainment, technology, finance and economics, sports, education andother specialized audio/video programs; and (g) live audio/video broadcasting service of cultural activities of common social organizations, sport events or otherorganization activities; and (III) Category III internet audio/video program service, including (a) aggregating service of online audio/video contents, and (b) rebroadcasting service of the audio/video programs uploaded by internet users; and (IV) Category III internet audio/video program service, including (a) rebroadcasting of the radio/television program channels; and (b) rebroadcasting of internet audio/video program channels.On May 27, 2016, the SAPPRFT issued the Notice on Relevant Issues concerning Implementing the Approval Works of Upgrading Mobile Internet AudioVideo Program Service, or the Mobile AudioVideo Program Notice. The Mobile AudioVideo Program Notice provides that the mobile Internet audiovideo programservices shall be deemed Internet audiovideo program service. Entities which have obtained the approvals to provide the Internet audiovideo program servicesmay use mobile WAP websites or mobile applications to provide audiovideo program services. Entities with regulatory approvals may operate mobile applicationsto provide the audiovideo program services The types of the programs shall be within the permitted scope as provided in the licenses and such mobile applicationsshall be filed with the SAPPRFT.Regulations on Production and Operation of Radio/Television ProgramsOn July 19, 2004, the SAPPRFT promulgated the Administrative Measures on the Production and Operation of Radio and Television Programs, or the Radioand Television Program Production Measures, which came into effect on August 20, 2004 and was amended on August 28, 2015. The Radio and Television ProgramProduction Measures provides that any business that produces or operates radio or television programs must first obtain a Radio and Television ProgramProduction and Operation Permit. Entities holding such permits shall conduct their business within the permitted scope as provided in their permits. In addition,foreigninvested enterprises are not allowed to engage in the abovementioned services.Regulations on Online Advertising ServicesOn April 24, 2015, the Standing Committee of the National People’s Congress enacted the Advertising Law of the People’s Republic of China, or the NewAdvertising Law, effective on September 1, 2015. The New Advertising Law increases the potential legal liability of advertising services providers and strengthensregulations of false advertising. On July 4, 2016, the State Administration for Industry and Commerce, or the SAIC, issued the Interim Measures of theAdministration of Online Advertising, or the SAIC Interim Measures, effective on September 1, 2016. The New Advertising Law and the SAIC Interim Measuresrequire that online advertisements may not affect users’ normal internet use and internet popup ads must display a “close” sign prominently and ensure onekeyclosing of the popup windows. The SAIC Interim Measures provides that all online advertisements must be marked “Advertisement” so that viewers can easilyidentify them as such. Moreover, the SAIC Interim Measures treats paid search results as advertisements that are subject to PRC advertisement laws, and requiresthat paid search results be conspicuously identified on search result pages as advertisements. The New Advertising Law and SAIC Interim Measures require us toconduct more stringent examination and monitoring of our advertisers and the content of their advertisements.55Regulations on Online GamesIn September 2009, the GAPP (currently known as the SAPPRFT), together with the National Copyright Administration, and the National Office ofCombating Pornography and Illegal Publications jointly issued the Notice on Further Strengthening on the Administration of Preexamination and Approval ofOnline Game and the Examination and Approval of Imported Online Game, or the Circular 13. The Circular 13 states that foreign investors are not permitted to investin online game operating businesses in the PRC via wholly foreignowned entities, Sinoforeign equity joint ventures or cooperative joint ventures or to exercisecontrol over or participate in the operation of domestic online game businesses through indirect means, such as other joint venture companies or contractual ortechnical arrangements. If the our contractual arrangements were deemed under the Circular 13 to be an “indirect means” for foreign investors to exercise controlover or participate in the operation of a domestic online game business, our contractual arrangements might be challenged by the SAPPRFT. We are not aware ofany online game companies which use the same or similar contractual arrangements having been challenged by the SAPPRFT as using those contractualarrangements as an “indirect means” for foreign investors to exercise control over or participate in the operation of a domestic online game business or having beenpenalized or ordered to terminate operations since the Circular 13 became effective. However it is unclear whether and how the Circular 13 might be interpreted orimplemented in the future. See “Risk Factors—If the PRC government finds that the agreements that establish the structure for operating certain of our operations inChina do not comply with PRC regulations relating to the relevant industries, or if these regulations or the interpretation of existing regulations change in the future,we could be subject to severe penalties or be forced to relinquish our interests in those operations.”The Interim Measures for the Administration of Online Games, or the Online Game Measures, issued by the MOC, which took effect on August 1, 2010 andamended on December 15, 2017, regulates a broad range of activities related to the online games business, including the development, production and operation ofonline games, the issuance of virtual currencies used for online games, and the provision of virtual currency trading services. The Online Game Measures providesthat any entity that is engaged in online game operations must obtain an Network Cultural Business Permit, and require the content of an imported online game to beexamined and approved by the MOC prior to the game’s launch and require a domestic online game to be filed with the MOC within 30 days after its launch. TheNotice of the Ministry of Culture on the Implementation of the Interim Measures for the Administration of Online Games, which was issued by the MOC on July 29,2010 to implement the Online Game Measures, (i) requires online game operators to protect the interests of online game users and specifies that certain terms thatmust be included in service agreements between online game operators and the users of their online games, (ii) requires content review of imported online gamesand filing procedures for domestic online games, (iii) emphasizes the protection of minors playing online games, and (iv) requests online game operators to promoterealname registration by their game users.Regulations on Information Security, Censorship and PrivacyThe Standing Committee of the National People’s Congress, China’s national legislative body, enacted the Decisions on the Maintenance of InternetSecurity on December 28, 2000 that may subject persons to criminal liabilities in China for any attempt to use the internet to: (i) gain improper entry to a computer orsystem of strategic importance; (ii) disseminate politically disruptive information; (iii) leak state secrets; (iv) spread false commercial information or (v) infringe uponintellectual property rights. In 1997, the Ministry of Public Security issued the Administration Measures on the Security Protection of Computer InformationNetwork with International Connections which prohibits using the internet to leak state secrets or to spread socially destabilizing materials. If an ICP license holderviolates these measures, the PRC government may revoke its ICP license and shut down its websites. Pursuant to the Ninth Amendment to the Criminal Law issuedby the Standing Committee of the National People’s Congress on August 29, 2015, effective on November 1, 2015, any ICP provider that fails to fulfill the obligationsrelated to internet information security as required by applicable laws and refuses to take corrective measures, will be subject to criminal liability for (i) any largescale dissemination of illegal information; (ii) any severe effect due to the leakage of users’ personal information; (iii) any serious loss of evidence of criminalactivities; or (iv) other severe situations, and any individual or entity that (i) sells or provides personal information to others unlawfully or (ii) steals or illegallyobtains any personal information will be subject to criminal liability in severe situations.56The Cybersecurity Law of the PRC, or the Cybersecurity Law, which was promulgated on November 7, 2016 by the Standing Committee of the NationalPeople’s Congress and came into effect on June 1, 2017, provides that network operators shall meet their cyber security obligations and shall take technicalmeasures and other necessary measures to protect the safety and stability of their networks. Under the Cybersecurity Law, network operators are subject to varioussecurity protectionrelated obligations, including: (i) network operators shall comply with certain obligations regarding maintenance of the security of internetsystems; (ii) network operators shall verify users’ identities before signing agreements or providing certain services such as information publishing or realtimecommunication services; (iii) when collecting or using personal information, network operators shall clearly indicate the purposes, methods and scope of theinformation collection, the use of information collection, and obtain the consent of those from whom the information is collected; (iv) network operators shall strictlypreserve the privacy of user information they collect, and establish and maintain systems to protect user privacy; (v) network operators shall strengthenmanagement of information published by users, and when they discover information prohibited by laws and regulations from publication or dissemination, theyshall immediately stop dissemination of that information, including taking measures such as deleting the information, preventing the information from spreading,saving relevant records, and reporting to the relevant governmental agencies.Regulations on Intellectual Property RightsRegulations on CopyrightThe Copyright Law of the PRC, or the Copyright Law, which took effect on June 1, 1991 and was amended in 2001 and in 2010, provides that Chinesecitizens, legal persons, or other organizations shall, whether published or not, own copyright in their copyrightable works, which include, among others, works ofliterature, art, natural science, social science, engineering technology and computer software. Copyright owners enjoy certain legal rights, including right ofpublication, right of authorship and right of reproduction. The Copyright Law as revised in 2010 extends copyright protection to Internet activities, productsdisseminated over the Internet and software products. In addition, Copyright Law provides for a voluntary registration system administered by the China CopyrightProtection Center, or the CPCC. According to the Copyright Law, an infringer of the copyrights shall be subject to various civil liabilities, which include ceasinginfringement activities, apologizing to the copyright owners and compensating the loss of copyright owner. Infringers of copyright may also subject to fines and/oradministrative or criminal liabilities in severe situations.The Computer Software Copyright Registration Measures, or the Software Copyright Measures, promulgated by the State Council on December 20, 2001and amended on January 30, 2013, regulates registrations of software copyright, exclusive licensing contracts for software copyright and assignment agreements.The National Copyright Administration, or the NCA administers software copyright registration and the CPCC, is designated as the software registration authority.The CPCC shall grant registration certificates to the Computer Software Copyrights applicants which meet the requirements of both the Software CopyrightMeasures and the Computer Software Protection Regulations (Revised in 2013).The Provisions of the Supreme People’s Court on Certain Issues Related to the Application of Law in the Trial of Civil Cases Involving Disputes onInfringement of the Information Network Dissemination Rights specifies that disseminating works, performances or audiovideo products by the internet users orthe internet service providers via the internet without the permission of the copyright owners shall be deemed to have infringed the right of dissemination of thecopyright owner.57The Measures for Administrative Protection of Copyright Related to Internet, which was jointly promulgated by the NCA and the MIIT on April 29, 2005and became effective on May 30, 2005, provides that upon receipt of an infringement notice from a legitimate copyright holder, an ICP operator must take remedialactions immediately by removing or disabling access to the infringing content. If an ICP operator knowingly transmits infringing content or fails to take remedialactions after receipt of a notice of infringement that harms public interest, the ICP operator could be subject to administrative penalties, including an order to ceaseinfringing activities, confiscation by the authorities of all income derived from the infringement activities, or payment of fines.On May 18, 2006, the State Council promulgated the Regulations on the Protection of the Right to Network Dissemination of Information (as amended in2013). Under these regulations, an owner of the network dissemination rights with respect to written works or audio or video recordings who believes thatinformation storage, search or link services provided by an Internet service provider infringe his or her rights may require that the Internet service provider delete, ordisconnect the links to, such works or recordings.Patent LawsAccording to the Patent Law of the PRC (Revised in 2008), the State Intellectual Property Office is responsible for administering patent law in the PRC. Thepatent administration departments of provincial, autonomous region or municipal governments are responsible for administering patent law within their respectivejurisdictions. The Chinese patent system adopts a firsttofile principle, which means that when more than one person file different patent applications for the sameinvention, only the person who files the application first is entitled to obtain a patent of the invention. To be patentable, an invention or a utility model must meetthree criteria: novelty, inventiveness and practicability. A patent is valid for twenty years in the case of an invention and ten years in the case of utility models anddesigns.Trademark LawsTrademarks are protected by the Trademark Law of the PRC (Revised in 2013) which was adopted in 1982 and subsequently amended in 1993, 2001 and 2013respectively as well as by the Implementation Regulations of the PRC Trademark Law adopted by the State Council in 2002 and as most recently amended on April29, 2014. The Trademark Office under the SAIC handles trademark registrations. The Trademark Office grants a tenyear term to registered trademarks and the termmay be renewed for another tenyear period upon request by the trademark owner. A trademark registrant may license its registered trademarks to another party byentering into trademark license agreements, which must be filed with the Trademark Office for its record. As with patents, the Trademark Law has adopted a firsttofile principle with respect to trademark registration. If a trademark applied for is identical or similar to another trademark which has already been registered or subjectto a preliminary examination and approval for use on the same or similar kinds of products or services, such trademark application may be rejected. Any personapplying for the registration of a trademark may not injure existing trademark rights first obtained by others, nor may any person register in advance a trademark thathas already been used by another party and has already gained a “sufficient degree of reputation” through such party’s use.Regulations on Domain NamesThe MIIT promulgated the Measures on Administration of Internet Domain Names, or the Domain Name Measures, on August 24, 2017, which took effecton November 1, 2017 and replaced the Administrative Measures on China Internet Domain Name promulgated by MII on November 5, 2004. According to theDomain Name Measures, the MIIT is in charge of the administration of PRC internet domain names. The domain name registration follows a firsttofile principle.Applicants for registration of domain names shall provide the true, accurate and complete information of their identities to domain name registration serviceinstitutions. The applicants will become the holder of such domain names upon the completion of the registration procedure.Relevant Regulations of the Hightech EnterpriseThe Ministry of Information Industry, the Ministry of Science and Technology and the State Tax Bureau collectively promulgated and issued the“Certifying Standard and Managing Measures for Hightech Enterprises” and “the Hightech Areas of Main National Support” on April 14, 2008 to certify the Hightech enterprise and encourage and support the development of the Chinese Hightech enterprises. Under the Hightech Enterprises Measures, the enterprise canenjoy the favorable tax policy when it is certified as a Hightech enterprise by the Ministry of Information Industry, the Ministry of Science and Technology and theState Tax Bureau or with its provincial branch according to the stipulated standard. The software and computer and network technology are recognized as the mainnational supported Hightech field. Kingtone Information is a Hightech enterprise and enjoys a favorable income tax rate of 15%.58Laws and Regulations of Intellectual Property RightsChina has adopted legislation governing intellectual property rights, including patents, copyrights and trademarks. China is a signatory to the maininternational conventions on intellectual property rights and became a member of the Agreement on Trade Related Aspects of Intellectual Property Rights upon itsaccession to the WTO in December 2001.PatentsThe “Patent Law of the People’s Republic of China” promulgated by the Standing Committee of the National People's Congress, adopted in 1985 andrevised in 1992, 2001 and 2008, protects registered patents. The State Intellectual Property Office of PRC handles granting patent rights, providing for a twentyyearpatent term for inventions and a tenyear patent term for utility models and designs. As we disclosed in Item 4, of this transition report on Form 20F, throughKingtone Information, we have been granted one invention patent “wireless video transmission system based on BREW platform” by the State Intellectual PropertyOffice (“SIPO”) of PRC on September 23, 2009 and therefore such invention is entitled to all the protections provided under the Patent Law for twenty years.Computer Software Copyright and AdministrationOn December 20, 2001, the State Council of PRC issued the “Regulation for Computer Software Protection of the People’s Republic of China” (the“Regulation for Computer Software Protection”) which became effective on January 1, 2002 to protect the interests of copyright owners, to promote the research andapplication and to encourage the development of the Chinese software industry. Under the Regulation for Computer Software Protection, natural persons, legalpersons or any other organizations shall have a copyright on the software developed by such persons no matter whether such software has been published. Theprotection period of software copyrights owned by the legal person or other organization is fifty years and expires on December 31 of the fiftieth year from the initialpublication date of such computer software. Currently, Kingtone Information has twelve registration certificates for software copyrights.TrademarksThe “Trademark Law of the People’s Republic of China” promulgated by the State Council of PRC, adopted in 1982 and revised in 1993 and 2001, protectsregistered trademarks. The Trademark Office under the Chinese State Administration for Industry and Commerce handles trademark registrations and grants a termof ten years to registered trademarks which are renewable for another ten years after the application to the Trademark Office by the owners of the trademarks.Trademark license agreements must be filed with the Trademark Office for record. China has a “firsttoregister” system that requires no evidence of prior use orownership. Kingtone Information has its registered trademarks as described in Item 4 of this transition report on Form 20F. Accordingly, such trademarks areentitled to the protection under the Trademark Law.Foreign Currency ExchangeOn August 29, 2008, the SAFE issued the Notice of the General Affairs Department of the State Administration of Foreign Exchange on the RelevantOperating Issues concerning the Improvement of the Administration of Payment and Settlement of Foreign Currency Capital of Foreignfunded Enterprises, orCircular 142. Pursuant to Circular 142, RMB converted from the foreign currencydenominated capital of a foreigninvested company may only be used for purposeswithin the business scope approved by the applicable governmental authority and may not be used for equity investments within the PRC unless specificallyprovided for otherwise. The use of such Renminbi capital may not be changed without SAFE’s approval and may not in any case be used to repay Renminbi loans ifthe proceeds of such loans have not been used.59See “Risk Factors — Risks Related to Doing Business in China — PRC regulation of loans and direct investment by offshore holding companies to PRCentities may delay or prevent us from using the proceeds of our initial public offering to make loans or additional capital contributions to our PRC operatingsubsidiaries, which could materially and adversely affect our liquidity and our ability to fund and expand our business”.Dividend DistributionWe are a British Virgin Islands holding company and substantially all of our operations are conducted through LK Technology. We rely on dividends andother distributions from our LK Technology and its subsidiaries to provide us with our cash flow and allow us to pay dividends on the shares underlying our ADSsand meet our other obligations. The principal regulations governing distribution of dividends paid by wholly foreignowned enterprises include:1.Wholly ForeignOwned Enterprise Law (1986), as amended; and2.Implementation Rules on Wholly ForeignOwned Enterprise Law (1990), as amended.Under these regulations, wholly foreignowned enterprises in China may pay dividends only out of their accumulated profits, if any, determined inaccordance with PRC accounting standards and regulations. In addition, wholly foreignowned enterprises in China are required to set aside at least 10% of theiraftertax profit based on PRC accounting standards each year to its general reserves until the accumulative amount of such reserves reach 50% of its registeredcapital. These reserves are not distributable as cash dividends. The board of directors of a FIE has the discretion to allocate a portion of its aftertax profits to staffwelfare and bonus funds, which may not be distributed to equity owners except in the event of liquidation.Regulation of Foreign Exchange in Certain Onshore and Offshore TransactionsIn October 2005, the SAFE issued the Notice on Issues Relating to the Administration of Foreign Exchange in Fundraising and Return InvestmentActivities of Domestic Residents Conducted via Offshore Special Purpose Companies, or SAFE Notice 75, which became effective as of November 1, 2005, and wasfurther supplemented by two implementation notices issued by the SAFE on November 24, 2005 and May 29, 2007, respectively. Under Circular 75, prior registrationwith the local SAFE branch is required for PRC residents to establish or to control an offshore company for the purposes of financing that offshore company withassets or equity interests in an onshore enterprise located in the PRC. An amendment to the registration or filing with the local SAFE branch by such PRC resident isalso required for the injection of equity interests or assets of an onshore enterprise in the offshore company or overseas funds raised by such offshore company, orany other material change with respect to the offshore company in connection with any increase or decrease of capital, transfer of shares, merger, division, equityinvestment, debt investment, or creation of any security interest over any assets located in the PRC.Under SAFE Notice 75, PRC residents are further required to repatriate into the PRC all of their dividends, profits or capital gains obtained from theirshareholdings in the offshore entity within 180 days of their receipt of such dividends, profits or capital gains. The registration and filing procedures under SAFENotice 75 are prerequisites for other approval and registration procedures necessary for capital inflow from the offshore entity, such as inbound investments orshareholders loans, or capital outflow to the offshore entity, such as the payment of profits or dividends, liquidating distributions, equity sale proceeds, or thereturn of funds upon a capital reduction. Therefore, failure to comply with such registration may subject us to certain restrictions on, including but not limited to, theincrease of the registered capital of our PRC subsidiary, making loans to our PRC subsidiary, and making distributions to us from our onshore companies.Regulations of Overseas Investments and ListingsOn August 8, 2006, six PRC regulatory agencies, including the MOFCOM, the State Assets Supervision and Administration Commission, the StateAdministration for Taxation, the State Administration for Industry and Commerce, the CSRC and the SAFE, jointly adopted the New M&A Rule, which becameeffective on September 8, 2006. This regulation, among other things, includes provisions that purport to require that an offshore SPV formed for purposes ofoverseas listing of equity interests in PRC companies and controlled directly or indirectly by PRC companies or individuals obtain the approval of the CSRC prior tothe listing and trading of such SPV’s securities on an overseas stock exchange.60On September 21, 2006, the CSRC published on its official website procedures regarding its approval of overseas listings by SPVs. The CSRC approvalprocedures require the filing of a number of documents with the CSRC and it would take several months to complete the approval process.The application of the New M&A Rule with respect to overseas listings of SPVs remains unclear with no consensus currently existing among the leadingPRC law firms regarding the scope of the applicability of the CSRC approval requirement.We believe that, based on our understanding of the current PRC laws, regulations and rules and the procedures announced on September 21, 2006, there isno requirement in this regulation that would require an application to be submitted to the MOFCOM or the CSRC for the approval of the listing and trading of ourADSs on the NASDAQ Capital Market.See “Risk Factors — Risks Related to Doing Business in China — If we were required to obtain the prior approval of the China Securities RegulatoryCommission, or CSRC, of the listing and trading of our ADSs on the NASDAQ Capital Market, we may face regulatory actions or other sanctions from the CSRC orother PRC regulatory agencies.”E. TAXATIONThe following discussion sets forth the material British Virgin Islands, PRC and U.S. federal income tax consequences of an investment in our ADSs andthe ordinary shares represented by our ADSs, sometimes referred to collectively as the “securities”. It is based upon laws and relevant interpretations thereof ineffect as of the date of this report, all of which are subject to change. This discussion does not deal with all possible tax consequences relating to an investment inthe securities, such as the tax consequences under state, local and other tax laws. As used in this discussion, “we,” “our” and “us” refers only to LuokungTechnology Ltd.British Virgin Islands TaxationUnder the law of the British Virgin Islands as currently in effect, a holder of the securities who is not a resident of the British Virgin Islands is not liable forBritish Virgin Islands tax on dividends paid with respect to the securities and all holders of the securities are not liable to the British Virgin Islands for tax on gainsrealized during that year on the sale or disposal of such ordinary shares. The British Virgin Islands does not impose a withholding tax on dividends paid by acompany incorporated or reregistered under the BVI Act.There are no capital gains, gift or inheritance taxes levied by the British Virgin Islands on companies incorporated under the BVI Act. In addition, shares ofcompanies incorporated under the BVI Act are not subject to transfer taxes, stamp duties or similar charges.There is no income tax treaty or convention currently in effect between the United States and the British Virgin Islands or between China and the BritishVirgin Islands.61People’s Republic of China TaxationIn 2007, the PRC National People’s Congress enacted the new Enterprise Income Tax Law (the “EIT Law”), which became effective on January 1, 2008. Thenew EIT Law imposes a single uniform income tax rate of 25% on all Chinese enterprises, including foreigninvested enterprises, and levies a withholding tax rate of10% on dividends payable by Chinese subsidiaries to their foreign shareholders unless any such foreign shareholders’ jurisdiction of incorporation has a tax treatywith China that provides for a different withholding agreement. Under the new EIT Law, enterprises established outside China but deemed to have a “de factomanagement body” within the country may be considered “resident enterprises” for Chinese tax purposes and, therefore, may be subject to an enterprise income taxrate of 25% on their worldwide income. Pursuant to the implementation rules of the new EIT Law, a “de facto management body” is defined as a body that hasmaterial and overall management control over the business, personnel, accounts and properties of the enterprise. Although substantially all members of ourmanagement are located in China, it is unclear whether Chinese tax authorities would require (or permit) us to be treated as PRC resident enterprises. If we aredeemed a Chinese tax resident enterprise, we may be subject to an enterprise income tax rate of 25% on our worldwide income, excluding dividends received directlyfrom another Chinese tax resident enterprise, as well as PRC enterprise income tax reporting obligations. If we are not deemed to be a Chinese tax resident enterprise,we may be subject to certain PRC withholding taxes. See “Risk Factors — Risks Related to Doing Business in China — Our holding company structure may limit thepayment of dividends.” As a result of such changes, our historical tax rates may not be indicative of our tax rates for future periods and the value of our ADSs orordinary shares may be adversely affected. If we are deemed a PRC resident enterprise and investors’ gain from the sales of the securities and dividends payable byus are deemed sourced from China, such gains and dividends payable by us may be subject to PRC tax. See “Risk Factors — Risks Related to Doing Business inChina — If we were deemed a “resident enterprise” by PRC tax authorities, we could be subject to tax on our global income at the rate of 25% under the New EITLaw and our nonPRC shareholders could be subject to certain PRC taxes.United States Federal Income TaxationGeneralThe following is a discussion of the material U.S. federal income tax consequences to an investor of purchasing, owning and disposing of our securities.This discussion does not address any aspects of U.S. federal gift or estate tax or the state, local or nonU.S. tax consequences of an investment in the securities.YOU SHOULD CONSULT YOUR OWN TAX ADVISORS CONCERNING THE U.S. FEDERAL, STATE, LOCAL AND NONU.S. TAX CONSEQUENCES OFPURCHASING, OWNING AND DISPOSING OF THE SECURITIES IN YOUR PARTICULAR SITUATION.This discussion applies only to those investors that purchase the securities in this offering and that hold the securities as capital assets within the meaningof section 1221 of the Internal Revenue Code of 1986, as amended (the “Code”). This section does not apply to holders that may be subject to special tax rules,including but not limited to:1.dealers in securities or currencies;2.traders in securities that elect to use a marktomarket method of accounting;3.banks, insurance companies or certain financial institutions;4.taxexempt organizations;5.governments or agencies or instrumentalities thereof;6.partnerships or other entities treated as partnerships or other passthrough entities for U.S. federal income tax purposes or persons holding thesecurities through such entities;7.regulated investment companies or real estate investment trusts;8.holders subject to the alternative minimum tax;9.holders that actually or constructively own 10% or more of the total combined voting power of all classes of our shares entitled to vote;10.holders that acquired the securities pursuant to the exercise of employee stock options, in connection with employee stock incentive plans orotherwise as compensation;11.holders that hold the securities as part of a straddle, hedging or conversion transaction; or12.holders whose functional currency is not the U.S. dollar.62This section is based on the Code, its legislative history, existing and proposed U.S. Treasury regulations, published rulings and other administrativeguidance of the U.S. Internal Revenue Service (the “IRS”) and court decisions, all as in effect on the date hereof. These laws are subject to change or differentinterpretation by the IRS or a court, possibly on a retroactive basis.We have not sought, and will not seek, a ruling from the IRS as to any U.S. federal income tax consequence described herein. The IRS may disagree withthe discussion herein, and its determination may be upheld by a court. Moreover, there can be no assurance that future legislation, regulation, administrative rulingsor court decisions will not adversely affect the accuracy of the statements in this discussion.The discussion below of the U.S. federal income tax consequences to “U.S. Holders” will apply to a beneficial owner of the securities that is for U.S. federalincome tax purposes:1.a citizen or resident of the United States;2.a corporation (or other entity treated as a corporation) that is created or organized (or treated as created or3.organized) under the laws of the United States, any state thereof or the District of Columbia;4.an estate whose income is subject to U.S. federal income tax regardless of its source; or5.a trust if (a) a U.S. court can exercise primary supervision over the trust’s administration and one or more U.S.6.persons are authorized to control all substantial decisions of the trust, or (b) if the trust has a valid election in effect under applicable U.S.Treasury regulations to be treated as a U.S. person.If a beneficial owner of the securities is not described as a U.S. Holder and is not an entity treated as a partnership or other passthrough entity for U.S.federal income tax purposes, such owner will be considered a “NonU.S. Holder.” The material U.S. federal income tax consequences applicable specifically to NonU.S. Holders are described below under the heading “Tax Consequences to NonU.S. Holders.”If a partnership (including for this purpose any entity treated as a partnership for U.S. tax purposes) is a beneficial owner of the securities, the U.S. taxtreatment of a partner in the partnership generally will depend on the status of the partner and the activities of the partnership. A holder of the securities that is apartnership or partners in such a partnership should consult their own tax advisors about the U.S. federal income tax consequences of holding and disposing of thesecurities.This discussion assumes that any distributions made (or deemed made) on the securities and any consideration received by a holder in consideration forthe sale or other disposition of the securities will be in U.S. dollars. This discussion also assumes that the representations contained in the Deposit Agreement aretrue and that the obligations in the Deposit Agreement and any related agreement will be complied with in accordance with their terms. Finally, this discussionassumes that each ADS will only represent ordinary shares in us, and will not represent any other type of security, such as a bond, cash or other property.63For U.S. federal income tax purposes, a holder of an ADS will be treated as the beneficial owner of the shares represented by such ADS and an exchange ofan ADS for ordinary shares will not be subject to U.S. federal income tax. The U.S. Treasury has expressed concerns that parties to whom ADSs are prereleased, orintermediaries in the chain of ownership between holders of ADSs and the issuer of the securities underlying the ADSs may be taking actions that are inconsistentwith the claiming of foreign tax credits by U.S. Holders of ADSs. Such actions would also be inconsistent with the claiming of the reduced rate of tax applicable todividends received by certain noncorporate U.S. Holders, including individual U.S. Holders, as described below under “Tax Consequences to U.S.Holders — Taxation of Distributions.” Accordingly, the availability of foreign tax credits or the reduced tax rate for dividends received by certain noncorporate U.S.Holders, including individual U.S. Holders, could be affected by actions taken by parties to whom the ADSs are released, or by future actions by the U.S. Treasury.Tax Consequences to U.S. HoldersTaxation of DistributionsSubject to the passive foreign investment company, or PFIC, rules discussed below, the gross amount of any cash distributions we make with respect to aU.S. Holder in respect of such U.S. Holder’s ADSs or shares will generally be treated as dividend income if the distributions are made from our current oraccumulated earnings and profits, calculated according to U.S. federal income tax principles. Cash dividends will generally be subject to U.S. federal income tax asordinary income on the day the U.S. Holder actually or constructively receives such income. With respect to noncorporate U.S. Holders for taxable years beginningbefore January 1, 2011, dividends may be taxed at the lower applicable longterm capital gains rate provided that (a) our ADSs or shares are readily tradable on anestablished securities market in the United States, or, in the event we are deemed to be a Chinese “resident enterprise” under the EIT Law (as described above under“People’s Republic of China Taxation”), we are eligible for the benefits of the income tax treaty between the United States and the PRC (the “U.S.PRC Tax Treaty”),(b) we are not a PFIC, as discussed below, for either the taxable year in which the dividend was paid or the preceding taxable year, and (c) certain holding periodrequirements are met. Under published IRS authority, ADSs are considered for purposes of clause (a) above to be readily tradable on an established securitiesmarket in the United States only if they are listed on certain exchanges, which presently include the NASDAQ Capital Market. U.S. Holders should consult their owntax advisors regarding the availability of the lower rate for any dividends paid with respect to our ADSs or shares.Dividends will not be eligible for the dividendsreceived deduction allowed to U.S. corporations in respect of dividends received from other U.S.corporations. Generally, if we distribute noncash property as a dividend (other than pro rata distributions of our shares) out of our current or accumulated earningsand profits (as determined for U.S. federal income tax purposes), a U.S. Holder generally will include in income an amount equal to the fair market value of theproperty, on the date that it is distributed.Distributions in excess of current and accumulated earnings and profits, as determined for U.S. federal income tax purposes, will be treated as a nontaxablereturn of capital to the extent of the U.S. Holder’s basis in its shares or ADSs and thereafter as capital gain. However, we do not plan on calculating our earnings andprofits in accordance with U.S. federal income tax principles. U.S. holders therefore should generally assume that any distributions paid by us will be treated asdividends for U.S. federal income tax purposes.If PRC taxes apply to dividends paid by us to a U.S. Holder (see “People’s Republic of China Taxation,” above), such taxes may be treated as foreign taxeseligible for credit against such holder’s U.S. federal income tax liability (subject to certain limitations), and a U.S. Holder may be entitled to certain benefits under theU.S.PRC Tax Treaty. The rules relating to the U.S. foreign tax credit are complex. U.S. Holders should consult their own tax advisors regarding the creditability ofany such PRC tax and their eligibility for the benefits of the U.S.PRC Tax Treaty.64Taxation of Dispositions of SharesSubject to the PFIC rules discussed below, a U.S. holder that sells or otherwise disposes of its shares will recognize capital gain or loss for U.S. federalincome tax purposes equal to the difference between the amount realized and such U.S. Holder’s tax basis in its shares. Prior to January 1, 2011, capital gains of anoncorporate U.S. holder are generally taxed at a maximum rate of 15% where the property is held for more than one year (and 20% thereafter). The ability to deductcapital losses is subject to limitations.If PRC taxes apply to any gain from the disposition of our shares by a U.S. Holder, such taxes may be treated as foreign taxes eligible for credit against suchholder’s U.S. federal income tax liability (subject to certain limitations), and a U.S. Holder may be entitled to certain benefits under the U.S.PRC Tax Treaty. U.S.Holders should consult their own tax advisors regarding the creditability of any such PRC tax and their eligibility for the benefits of the U.S.PRC Tax Treaty.Passive Foreign Investment CompanyWe do not expect to be a PFIC for U.S. federal income tax purposes for our current tax year or in the foreseeable future. The determination of whether or notwe are a PFIC in respect of any of our taxable years is a factual determination that cannot be made until the close of the applicable tax year and that is based on thetypes of income we earn and the value and composition of our assets (including goodwill), all of which are subject to change. Therefore, we can make no assurancesthat we will not be a PFIC in respect of our current taxable year or in the future.In general, we will be a PFIC in any taxable year if either:1.at least 75% of our gross income for the taxable year is passive income; or2.at least 50% of the value, determined on the basis of a quarterly average, of our assets is attributable to assets that produce or are held for theproduction of passive income.Passive income includes dividends, interest, royalties, rents (other than certain rents and royalties derived in the active conduct of a trade or business), theexcess of gains over losses from certain types of transactions in commodities, annuities and gains from assets that produce passive income. We will be treated asowning our proportionate share of the assets and earning our proportionate share of the income of any corporation in which we own, directly or indirectly, at least25% (by value) of the stock.If we are treated as a PFIC in any year during which a U.S. Holder owns the securities, and such U.S. Holder did not make a marktomarket election, asdescribed below, the U.S. Holder will be subject to special rules with respect to:1.any gain recognized by the U.S. Holder on the sale or other disposition of its shares; and any excess distribution that we make to the U.S. Holder(generally, the excess of the amount of any distributions to such U.S. Holder during a single taxable year of such U.S. Holder over 125% of theaverage annual distributions received by such U.S. Holder in respect of the shares during the three preceding taxable years of such U.S. Holder or,if shorter, such U.S. Holder holding period for the shares).Under these rules:2.the gain or excess distribution will be allocated ratably over the U.S. Holder’s holding period for the shares;3.the amount allocated to the U.S. Holder’s taxable year in which it realized the gain or excess distribution or to the period in the U.S. Holder’sholding period before the first day of our first taxable year in which we are a PFIC will be taxed as ordinary income;4.the amount allocated to other taxable years (or portions thereof) of the U.S. Holder and included in its holding period will be taxed at the highesttax rate in effect for that year; and5.the interest charge generally applicable to underpayments of tax will be imposed in respect of the tax attributable to each such other taxable yearof the U.S. Holder. 6.Special rules apply for calculating the amount of the foreign tax credit with respect to excess distributions by a PFIC.65Alternatively, if a U.S. Holder, at the close of its taxable year, owns ordinary shares in a PFIC that are treated as marketable stock, the U.S. Holder may makea marktomarket election with respect to such shares for such taxable year. Our shares will be “marketable” to the extent that they remain regularly traded on anational securities exchange, such as the NASDAQ Capital Market. If a U.S. Holder makes this election in a timely fashion, it will not be subject to the PFIC rulesdescribed above. Instead, in general, the U.S. Holder will include as ordinary income each year the excess, if any, of the fair market value of its shares at the end ofthe taxable year over its adjusted basis in its shares. Any ordinary income resulting from this election would generally be taxed at ordinary income tax rates andwould not be eligible for the reduced rate of tax applicable to qualified dividend income. The U.S. Holder will also be allowed to take an ordinary loss in respect ofthe excess, if any, of the adjusted basis of its shares over the fair market value at the end of the taxable year (but only to the extent of the net amount of previouslyincluded income as a result of the marktomarket election). The U.S. Holder’s basis in the shares will be adjusted to reflect any such income or loss amounts. U.S.Holders should consult their own tax advisor regarding potential advantages and disadvantages of making a marktomarket election with respect to their shares.Alternatively, a U.S. Holder of stock in a PFIC may avoid the PFIC tax consequences described above in respect to our or shares by making a timely“qualified electing fund” election to include in income its pro rata share of our net capital gains (as longterm capital gain) and other earnings and profits (asordinary income), on a current basis, in each case whether or not distributed, in the taxable year of the U.S. Holder in which or with which our taxable year ends.However, the qualified electing fund election is available only if the PFIC provides such U.S. Holder with certain information regarding its earnings and profits asrequired under applicable U.S. Treasury regulations. We do not intend to furnish the information that a U.S. Holder would need in order to make a qualified electingfund election. Therefore, U.S. Holders will not be able to make or maintain such election with respect to their or shares.If a U.S. Holder owns our shares or during any year that we are a PFIC, such holder must file U.S. Internal Revenue Service Form 8621 regarding suchholder’s shares or and the gain realized on the disposition of the shares. The reduced tax rate for dividend income, discussed in “Taxation of Distributions,” is notapplicable to dividends paid by a PFIC. U.S. Holders should consult with their own tax advisors regarding reporting requirements with respect to their shares.Tax Consequences to NonU.S. HoldersDividends paid to a NonU.S. Holder in respect of our or shares generally will not be subject to U.S. federal income tax, unless the dividends are effectivelyconnected with the NonU.S. Holder’s conduct of a trade or business within the United States (and, if required by an applicable income tax treaty, are attributable toa permanent establishment or fixed base that such holder maintains in the United States).In addition, a NonU.S. Holder generally will not be subject to U.S. federal income tax on any gain attributable to a sale or other disposition of our or sharesunless such gain is effectively connected with its conduct of a trade or business in the United States (and, if required by an applicable income tax treaty, isattributable to a permanent establishment or fixed base that such holder maintains in the United States) or the NonU.S. Holder is an individual who is present in theUnited States for 183 days or more in the taxable year of sale or other disposition and certain other conditions are met (in which case, such gain from United Statessources generally is subject to tax at a 30% rate or a lower applicable tax treaty rate).Dividends and gains that are effectively connected with the NonU.S. Holder’s conduct of a trade or business in the United States (and, if required by anapplicable income tax treaty, are attributable to a permanent establishment or fixed base in the United States) generally will be subject to tax in the same manner as fora U.S. Holder and, in the case of a NonU.S. Holder that is a corporation for U.S. federal income tax purposes, may also be subject to an additional branch profits taxat a 30% rate or a lower applicable tax treaty rate.66Information Reporting and Backup Withholding In general, information reporting for U.S. federal income tax purposes generally should apply to distributions made on the securities within the UnitedStates to a noncorporate U.S. Holder and to the proceeds from sales and other dispositions of the securities by a noncorporate U.S. Holder to or through a U.S.office of a broker. Payments made (and sales and other dispositions effected at an office) outside the United States generally should be subject to informationreporting in limited circumstances.Dividend payments made to U.S. Holders and proceeds paid from the sale or other disposition the securities may be subject to information reporting to theIRS and possible U.S. federal backup withholding at a current rate of 28%. Certain exempt recipients, such as corporations, are not subject to these informationreporting requirements. Backup withholding will not apply to a U.S. Holder who furnishes a correct taxpayer identification number and makes any other requiredcertification, or who is otherwise exempt from backup withholding. U.S. Holders who are required to establish their exempt status must provide a duly executed IRSForm W9.A NonU.S. Holder generally may eliminate the requirement for information reporting and backup withholding by providing certification of its foreignstatus, under penalties of perjury, on a duly executed applicable IRS Form W8 or by otherwise establishing an exemption.Backup withholding is not an additional tax. Rather, the amount of any backup withholding will be allowed as a credit against a U.S. Holder’s or a nonU.S.Holder’s U.S. federal income tax liability and may entitle such holder to a refund, provided that certain required information is timely furnished to the IRS.PROSPECTIVE PURCHASERS OF OUR SECURITIES SHOULD CONSULT WITH THEIR OWN TAX ADVISORS REGARDING THE APPLICATION OFTHE U.S. FEDERAL INCOME TAX LAWS TO THEIR PARTICULAR SITUATIONS AS WELL AS ANY ADDITIONAL TAX CONSEQUENCES RESULTING FROMPURCHASING, HOLDING OR DISPOSING OF OUR SECURITIES, INCLUDING THE APPLICABILITY AND EFFECT OF THE TAX LAWS OF ANY STATE, LOCALOR NONU.S. JURISDICTION, INCLUDING ESTATE, GIFT, AND INHERITANCE LAWS AND APPLICABLE TAX TREATIES.F. DIVIDENDS AND PAYING AGENTS.Not applicable.G. STATEMENT BY EXPERTS.None.H. DOCUMENTS ON DISPLAY.We previously filed a registration statement on Form F1 (File No. 333166056) with the SEC relating to our initial public offering in May 2010. This transition reportdoes not contain all of the information in the registration statement and the exhibits and financial statements included with the registration statement. References inthis transition report to any of our contracts, agreements or other documents are not necessarily complete, and you should refer to the exhibits attached to theregistration statement for copies of the actual contracts, agreements or documents. In addition, we will file transition reports on Form 20F and submit otherinformation under cover of Form 6K. As a foreign private issuer, we are exempt from the proxy requirements of Section 14 of the Exchange Act and our officers,directors and principal shareholders will be exempt from the insider shortswing disclosure and profit recovery rules of Section 16 of the Exchange Act. You may readand copy the registration statement, the related exhibits and other materials we file with the SEC at the SEC's public reference room in Washington, D.C. at 100 FStreet, Room 1580, N.E., Washington, D.C.20549. You can also request copies of those documents, upon payment of a duplicating fee, by writing to the SEC. Pleasecall the SEC at 1800SEC0330 for further information on the operation of the public reference rooms. The SEC also maintains an Internet site that contains reports,proxy and information statements and other information regarding issuers that file with the SEC. The website address is http://www.sec.gov. You may also request acopy of these filings, at no cost, by writing us at LAB 32, SOHO 3Q, No 9, Guanghua Road, Chaoyang District, Beijing, People’s Republic of China, 100020 ortelephoning us at (86) 1085866721.67I. SUBSIDIARY INFORMATIONFor a listing of our subsidiaries, see “Item 4. Information on the Company – C. Organizational Structure.”ITEM 11. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.Interest Rate RiskAs of December 31, 2017, we had no shortterm or longterm borrowings. If we borrow money in future periods, we may be exposed to interest rate risk. Ourexposure to market risk for changes in interest rates relates primarily to the interest income generated by our cash deposits with our banks and heldtomaturityinvestments. We have not used any derivative financial instruments in our investment portfolio. Interest earnings instruments carry a degree of interest rate risk. Wehave not been exposed, nor do we anticipate being exposed to material risks due to changes in interest rates. However, our future interest income may fall short ofexpectations due to changes in interest rates. Foreign Exchange RiskTranslation adjustments amounted to $90,671 and $387,375 gain as of the fiscal year ended December 31, 2017 and 2016, respectively. The Companytranslated balance sheet amounts with the exception of equity at December 31, 2017 at RMB 6.5342 to $1.00 as compared to RMB 6.9370 to $1.00 at December 31,2016. The Company stated equity accounts at their historical rate. The average translation rates applied to income statement accounts for the fiscal year endedDecember 31, 2017 and 2016 were RMB6.7356 and RMB 6.7153 to US$1.00, respectively. So far, the PRC government has been able to manage a stable exchange ratebetween RMB and the U.S. Dollar. Our future downward translation adjustments may occur and can be significant due to changes in such exchange rate.If we decide to convert our RMB into U.S. dollars for the purpose of making payments for dividends on our ordinary shares or for other business purposes,appreciation of the U.S. dollar against the RMB would have a negative effect on the U.S. dollar amount available to us.The PRC government imposes strict restrictions on PRC resident companies regarding converting RMB into foreign currencies and vice versa under capitalaccount transactions, such as receiving equity investments from outside of the PRC, making equity investments outside of the PRC, borrowing money from orlending money outside of the PRC, and repaying debt or remitting liquidated assets and/or accumulated profits outside of the PRC. These transactions have to beapproved by the relevant PRC government authorities, including but not limited to the commerce bureau, the tax bureau and the State Administration of ForeignExchange, or SAFE, and have to be conducted at banks entrusted by the local SAFE branch. As our business continues to grow, we may need to continuouslyfinance our PRC subsidiaries by raising capital from outside of the PRC. The restriction on converting RMB into foreign currencies, and vice versa, may limit ourability to use capital resources from outside of the PRC. Such restrictions may also limit our ability to remit profits from our PRC subsidiaries outside of the PRC,therefore potentially limiting our ability to pay dividends to our shareholders. In addition, such restrictions will limit our ability to freely transfer temporary excesscash in our or our subsidiaries’ bank accounts in and out of the PRC, therefore limiting our ability to conduct crossborder cash management activities to optimizethe utilization of our cash.InflationAlthough China has experienced an increasing inflation rate, inflation has not had a material impact on our results of operations in recent years. Accordingto the National Bureau of Statistics of China, the change in the consumer price index in China was 0.46%, (0.77%), and 1.16% in 2001, 2002 and 2003, respectively.However, in connection with a 3.9% increase in 2004, the PRC government announced measures to restrict lending and investment in China in order to reduceinflationary pressures in China’s economy. Following the government’s actions, the consumer price index decreased to 1.8% in 2005 and to 1.5% in 2006. In 2007, theconsumer price index increased to 4.8%. In response, China’s central bank, the People’s Bank of China, announced that the bank reserve ratio would rise half apercentage point to 15.5% in an effort to reduce inflation pressures. China’s consumer price index growth rate reached 8.7% year over year in 2008. In 2009 and 2010,the change in the consumer price index in China was minus 0.7% and 3.3%.China consumer price index in November 2017 was 3.8% higher than that of the same period in 2016. China consumer price index in December 2016 was2.4% higher than that of the same period in 2015. China consumer price index in December 2015 was 4.8% higher than that of the same period in 2014. Chinaconsumer price index in December 2014 was 3.3% higher than that of the same period in 2013. The results of the PRC government’s actions to combat inflation aredifficult to predict. Adverse changes in the Chinese economy, if any, will likely impact the financial performance of a variety of industries in China that use, or wouldbe candidates to use, our software products and services.68ITEM 12. DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES.A. DEBT SECURITIES.Not applicable. B. WARRANTS AND RIGHTS.Not applicable.C. OTHER SECURITIES.Not applicable.D. AMERICAN DEPOSITARY SHARES.The Bank of New York Mellon, as depositary (the “Depositary”) for the Company’s ADR facility, notified the owners and holders of the Company’s ADSsthat the ADS facility will terminate effective at 5:00 p.m. (Eastern Time) on September 19, 2018. Under the terms of the Deposit Agreement among the Company, theDepositary and the owners and holders of ADSs of the Company (the “Deposit Agreement”), owners and holders of the Company’s ADSs have until at leastJanuary 21, 2019 to surrender their ADSs to the Depositary for delivery of the underlying ordinary shares of the Company. Subsequent to January 21, 2019, underthe terms of the Deposit Agreement, the Depositary may attempt to sell any ordinary shares remaining on deposit with the Depositary. If the Depositary sells suchunderlying ordinary shares or receives value for such shares, holders must surrender their ADSs to obtain payment of the sale proceeds, net of expenses andapplicable tax and charges. We completed the voluntary delisting of our ADSs from the NASDAQ Capital Market on September 19, 2018.You may hold ADSs either (A) directly (i) by having ADSs registered in your name in the Direct Registration System, or (ii) by having an Americandepositary receipt, also referred to as an ADR, which is a certificate evidencing a specific number of ADSs, registered in your name, or (B) indirectly by holding asecurity entitlement in ADSs through your broker or other financial institution. If you hold ADSs directly, you are a registered ADS holder, also referred to as anADS holder. This description assumes you are an ADS holder. If you hold the ADSs indirectly, you must rely on the procedures of your broker or other financialinstitution to assert the rights of ADS holders described in this section. You should consult with your broker or financial institution to find out what thoseprocedures are.The Direct Registration System, or DRS, is a system administered by The Depository Trust Company, also referred to as DTC, pursuant to which thedepositary may register the ownership of uncertificated ADSs, which ownership will be confirmed by periodic statements sent by the depositary to the registeredholders of uncertificated ADSs.69As an ADS holder, you will not be treated as one of our registered shareholders and you will not have direct shareholder rights. British Virgin Island’s lawgoverns our direct shareholders’ rights. The depositary will be the holder of the shares underlying your ADSs. As a registered holder of ADSs, you will have ADSholder rights. A Deposit Agreement among us, the depositary and you, as an ADS holder, and all other persons indirectly holding ADSs, sets out ADS holder rightsas well as the rights and obligations of the depositary. New York law governs the Deposit Agreement and the ADSs.The following is a summary of the material provisions of the Deposit Agreement. For more complete information, you should read the entire DepositAgreement and the form of ADS, which contains the terms of the ADSs. The Deposit Agreement is filed as an exhibit to our registration statement filed on Form F1.You may obtain the registration statement and the attached Deposit Agreement from the SEC’s website at http://www.sec.gov. You may also obtain a copy of theDeposit Agreement at the SEC’s Public Reference Room, which is located at 100 F Street, NE, Washington, DC 20549. You may obtain information on the operationof the Public Reference Room by calling the SEC at 18007320330. Fees and ExpensesPersons depositing or withdrawing shares or ADS holders must pay:For:$5.00 (or less) per 100 ADSs (or portion of 100 ADSs)Issuance of ADSs, including issuances resulting from a distribution of shares orrights or other propertyCancellation of ADSs for the purpose of withdrawal, including if the DepositAgreement terminates$.05 (or less) per ADSAny cash distribution to ADS holdersA fee equivalent to the fee that would be payable if securities distributed to youhad been shares and the shares had been deposited for issuance of ADSsDistribution of securities distributed to holders of deposited securities whichare distributed by the depositary to ADS holders$.05 (or less) per ADSs per calendar yearDepositary servicesRegistration or transfer feesTransfer and registration of shares on our share register to or from the name ofthe depositary or its agent when you deposit or withdraw sharesExpenses of the depositaryCable, telex and facsimile transmissions (when expressly provided in the DepositAgreement) converting foreign currency to U.S. dollarsTaxes and other governmental charges the depositary or the custodian have topay on any ADS or share underlying an ADS, for example, share transfer taxes,stamp duty or withholding taxesAs necessaryAny charges incurred by the depositary or its agents for servicing the depositedsecuritiesAs necessaryPayment of TaxesHolders of our ADSs are responsible for any taxes or other governmental charges payable on their ADSs or on the deposited securities represented by anyof their ADSs. The depositary may refuse to register any transfer of a holder’s ADSs or allow withdrawal of the deposited securities represented by the ADSs untilsuch taxes or other charges are paid. It may apply payments owed to the holder or sell deposited securities represented by the ADSs to pay any taxes owed and theholder will remain liable for any deficiency. If the depositary sells deposited securities, it will, if appropriate, reduce the number of ADSs to reflect the sale and pay toADS holders any proceeds, or send to ADS holders any property, remaining after it has paid the taxes.70PART IIITEM 13. DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES.None.ITEM 14. MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS.Use of Proceeds.We completed our initial public offering on May 14, 2010 (the “IPO”), which generated net proceeds of approximately $14.6 million. All remaining cash onhand from the proceeds of our IPO was transferred to C Media Limited and its subsidiaries following the completion of the asset exchange transactions on August17, 2018.ITEM 15. CONTROLS AND PROCEDURES.Disclosure Controls and ProceduresOur Chief Executive Officer and Chief Financial Officer have reviewed and evaluated the effectiveness of our disclosure controls and procedures, whichincluded inquiries made to certain other of our employees. The term “disclosure controls and procedures,” as defined in Rules 13a15(e) and 15d15(e) under theExchange Act, means controls and other procedures of a company that are designed to ensure that information required to be disclosed by a company in thereports, such as this report, that it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in theSEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to bedisclosed by a company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the company’s management, including itsprincipal executive and principal financial officers, as appropriate to allow timely decisions regarding required disclosure. Management recognizes that any controlsand procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives and management necessarilyapplies its judgment in evaluating the costbenefit relationship of possible controls and procedures. Based on that evaluation, our Chief Executive Officer and ChiefFinancial Officer have each concluded that, as of December 31, 2017, the Company’s disclosure controls and procedures were not effective due to the materialweakness described in the “Management’s Report on Internal Control over Financial Reporting” section below.Management’s Report on Internal Control Over Financial ReportingOur management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Exchange ActRules 13a15(f) and 15d15(f). Internal control over financial reporting refers to the process designed by, or under the supervision of, our principal executive officerand principal financial officer, and effected by our Board of Directors, management and other personnel, to provide reasonable assurance regarding the reliability offinancial reporting and the preparation of financial statements for external purposes in accordance with U.S. GAAP and includes those policies and procedures that(i) pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of the assets of the Company; (ii)provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with U.S. GAAP, and thatreceipts and expenditures of the Company are being made only in accordance with authorizations of management and directors of the Company; and (iii) providereasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the Company’s assets that could have a materialeffect on the financial statements.71Any system of internal control, no matter how well designed, has inherent limitations. Therefore, even those systems determined to be effective canprovide only reasonable assurance with respect to financial statement preparation and presentation. Because of the inherent limitations of internal control, there is arisk that material misstatements may not be prevented or detected on a timely basis by internal control over financial reporting. However, these inherent limitationsare known features of the financial reporting process. Therefore, it is possible to design into the process safeguards to reduce, though not eliminate, this risk.Management assessed our internal control over financial reporting as of the year ended December 31, 2017. In making this assessment, management usedthe criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in the 2014 report entitled "Internal ControlIntegratedFramework." The COSO framework summarizes each of the components of a company’s internal control system, including (i) the control environment, (ii) riskassessment, (iii) control activities, (iv) information and communication, and (v) monitoring. Based on such assessment, management concluded that its internalcontrol over financial reporting as of December 31, 2017 was not effective because of the following material weakness:Lack of U.S. GAAP expertise. Although our accounting personnel are professional and experienced in accounting requirements and procedures generallyaccepted in the PRC, they do not have sufficient knowledge, experience and training in maintaining our books and records and preparing financial statements inaccordance with U.S. GAAP standards and SEC rules and regulations. The staff needs additional training to become experienced in U.S. GAAPbased reporting,including the skills of U.S. GAAPbased period end closing, consolidation of financial statements, and U.S. GAAP conversion.In order to address the above material weakness, our management plans to take the following steps:We will employ, as needed, outside professionals to provide key accounting personnel ongoing technical trainings to ensure their proper understanding ofU.S. GAAP and newly announced accounting standards.The Company believes the foregoing measures will remediate the identified material weakness in future periods. The Company is committed to monitoringthe effectiveness of these measures and making any changes that are necessary and appropriate.Notwithstanding the conclusion that its internal control over financial reporting was not effective as of the end of the period covered by this report, ourChief Executive Officer and Chief Financial Officer believe that the financial statements and other information contained in this report present fairly, in all materialrespects, its business, financial condition and results of operations. Nothing has come to the attention of management that causes them to believe that any materialinaccuracies or errors exist in the Company’s financial statements as of December 31, 2017.Attestation report of the registered public accounting firm.This transition report does not include an attestation report of the Company’s registered public accounting firm on internal control over financial reportingbecause the Company is a nonaccelerated filer permanently exempted from section 404(b) of the SarbanesOxley Act.Changes in Internal Control over Financial ReportingThere were no changes in the Company’s internal control over financial reporting that occurred during our fiscal year ended December 31, 2017 that hasmaterially affected or is reasonably likely to materially affect our internal control over financial reporting.ITEM 16. [RESERVED]ITEM 16A. AUDIT COMMITTEE FINANCIAL EXPERT.Our board of directors has determined that Mr. Dennis Galgano qualifies as an audit committee financial expert. Our board of directors has determined thatMessrs. Dennis Galgano, Jin Shi, Jiming Ha and Zhihao Xu meet the definition of an “independent director” under the applicable NASDAQ Rules and under Rule10A3 of the Securities Exchange Act of 1934, as amended.72ITEM 16B. CODE OF ETHICS.Our board of directors has adopted a code of business conduct and ethics applicable to our directors, officers and employees. We have posted the code onour website at http://www.luokung.com.ITEM 16C. PRINCIPAL ACCOUNTANT FEES AND SERVICES.Audit FeesThe aggregate fees billed by Moore Stephens CPA Limited for professional services rendered for the audit of our financial information disclosed in thistransition report on Form 20F was $280,000 for the two years ended December 31, 2017 and 2016.The aggregate fees billed by our previous auditor, BDO China Shu Lun Pan Certified Public Accountants LLP for professional services rendered for theaudit of our annual financial information included in our annual reports on Form 20F was $105,500 for each of the fiscal years ended September 30, 2017, 2016 and2015.Tax FeesWe did not engage our principal accountants to provide tax or related services during the last two fiscal years.All Other FeesWe did not engage our principal accountants to render services to us during the last two fiscal years, other than as reported above.ITEM 16D. EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES.Not applicable.ITEM 16E. PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS.Not applicable.ITEM 16F. CHANGE IN REGISTRANT’S CERTIFYING ACCOUNTANT.Not applicable.ITEM 16G. CORPORATE GOVERNANCE.We are incorporated in the BVI and our corporate governance practices are governed by applicable BVI law as well as our memorandum and articles ofassociation. In addition, because our ADSs are listed on NASDAQ, we are subject to NASDAQ’s corporate governance requirements. NASDAQ Listing Rule5620(a) requires each issuer to hold an annual meeting of shareholders no later than one year after the end of the issuer’s fiscal year end. However, NASDAQ ListingRule 5615(a)(3) permits a foreign private issuer like us to follow home country practices in lieu of certain requirements of Listing Rule 5600, provided that suchforeign private issuer discloses in its transition report filed with the SEC each requirement of Rule 5600 that it does not follow and describes the home countrypractice followed in lieu of such requirement. We follow home country practice with respect to annual meetings and did not hold an annual shareholder meeting inthe year ended December 31, 2017. We may, however, hold annual shareholder meetings in the future if there are significant issues that require shareholders’approvals.ITEM 16H. MINE SAFETY DISCLOSURE.Not applicable.73PART IIIITEM 17. FINANCIAL STATEMENTS.We have elected to provide financial statements and related information specified in Item 18.ITEM 18. FINANCIAL STATEMENTS.See “Index to Consolidated Financial Statements” for a list of all financial statements filed as part of this transition report. The Financial Statements arebeginning on page F1.ITEM 19. EXHIBITS.See the Exhibit Index following the signature page of this report, which is incorporated herein by reference.74SIGNATURESThe registrant hereby certifies that it meets all of the requirements for filing on Form 20F and that it has duly caused and authorized the undersigned tosign this transition report on its behalf.LUOKUNG TECHNOLOGY CORP.By:/s/ Xuesong Song Xuesong SongChief Executive Officer(principal executive officer)October 12, 201875EXHIBIT INDEXThe following documents are filed as part of this transition report on Form 20F.ExhibitNumberDescription1.1Amended and Restated Memorandum of Association and Articles of Association of Luokung Technology Corp., dated August 20, 2018, and ascurrently in effect.2.1*Deposit Agreement among the Company, depositary and holders of the American Depositary Receipts.2.2*Form of American Depositary Receipt.2.3*English translation of Entrusted Management Agreement dated December 15, 2009 between Xi’an Softech Co., Ltd., Xi’an Kingtone InformationTechnology Co., Ltd. and the shareholders of Xi’an Kingtone Information Technology Co., Ltd.3.1*English translation of Shareholder’s Voting Proxy Agreement dated December 15, 2009 between Xi’an Softech Co., Ltd., Xi’an Kingtone InformationTechnology Co., Ltd. and the shareholders of Xi’an Kingtone Information Technology Co., Ltd.4.1*English translation of Exclusive Technology Service Agreement dated December 15, 2009 between Xi’an Softech Co., Ltd. and Xi’an KingtoneInformation Technology Co., Ltd.4.2*English translation of Exclusive Option Agreement dated December 15, 2009 between Xi’an Softech Co., Ltd., Xi’an Kingtone InformationTechnology Co., Ltd. and the shareholders of Xi’an Kingtone Information Technology Co., Ltd.4.3*English translation of Equity Pledge Agreement dated December 15, 2009 between Xi’an Softech Co., Ltd., Xi’an Kingtone Information TechnologyCo., Ltd. and the shareholders of Xi’an Kingtone Information Technology Co., Ltd.4.4*English translation of Loan Agreement dated September 14, 2009 between Xi’an Kingtone Information Technology Co., Ltd. and Xian CityCommercial Bank.4.5*English translation of Mortgage Agreement dated September 14, 2009 between Xi’an Kingtone Information Technology Co., Ltd. and Xian CityCommercial Bank.4.6*English translation of Form of Employment Agreement entered into between the Company and the Company’s executive officers.4.7*2010 Omnibus Incentive Plan of the Company.4.8**English translation of Project Construction Contract dated August 10, 2010 between Xi’an Hu County Yuxing Agriculture Science & TechnologyCo., Ltd. and Xi’an Kingtone Information Technology Co., Ltd.4.9***Asset Exchange Agreement by and between C Media Limited and the Company dated as of January 25, 2018.4.10***Securities Purchase Agreement by and among Redstone YYL Management Limited and five shareholders holding majority of the shares of theCompany dated as of January 25, 2018.4.15Exclusive Business Cooperation Agreement by and between Zhongchuan Tianxia Information Technology (Shenzhen) Co., Ltd., and Beijing MobileVision Technology Co., Ltd., dated August 31, 2015.764.16Exclusive Option Agreement by and among Zhongchuan Tianxia Information Technology (Shenzhen) Co., Ltd., Xuesong Song, Weili Chen, PingWang, Donglai Liu, and Beijing Mobile Vision Technology Co., Ltd., dated August 31, 2015.4.17Equity Interest Pledge Agreement by and among Zhongchuan Tianxia Information Technology (Shenzhen) Co., Ltd., Xuesong Song, Weili Chen, PingWang, Donglai Liu, and Beijing Mobile Vision Technology Co., Ltd., dated August 31, 2015.4.18Addendum to Asset Exchange Agreement by and among the Company, Topsky Infotech Holdings Pte Ltd. and C Media Limited, dated October 3,2018. Incorporated by reference to the Company’s Current Report on Form 6K filed on October 4, 2018.4.19Stock Purchase Agreement, dated August 25, 2018, by and among the Company, LK Technology Ltd., and the shareholders listedtherein. Incorporated by reference to the Company’s Current Report on Form 6K filed on August 27, 2018.4.20Power of Attorney by Weili Chen, dated August 31, 2015.4.21Power of Attorney by Ping Wang, dated August 31, 2015.4.22Power of Attorney by Donglai Liu, dated August 31, 2015.4.23Power of Attorney by Xuesong Song, dated August 31, 2015.8.1List of Subsidiaries and Consolidated Variable Interest Entities10.1Employment Agreement, dated August 19, 2018, between Luokung Technology Corp. and Xuesong Song.†10.2Employment Agreement, dated August 19, 2018, by and between Luokung Technology Corp. and Jie Yu.†12.1Certification of Chief Executive Officer required by Rule 13a14(a).12.2Certification of Chief Financial Officer required by Rule 13a14(a).13.1Certification of Chief Executive Officer required by Rule 13a14(a).13.2Certification of Chief Financial Officer required by Rule 13a14(a).101.INSXBRL Instance Document.101.SCHXBRL Taxonomy Extension Schema Document.101.CALXBRL Taxonomy Extension Calculation Linkbase Document.101.DEFXBRL Taxonomy Extension Definition Linkbase Document.101.LABXBRL Taxonomy Extension Label Linkbase Document.101.PREXBRL Taxonomy Extension Presentation Linkbase Document.*Previously filed as an exhibit to the Company’s Registration Statement on Form F1 (Reg. No. 333166056) filed with the Commission and incorporated hereinby reference.**Previously filed as exhibits to the Company’s Transition Report on Form 20F filed with the Commission on January 20, 2011 and incorporated herein byreference.***Previously filed as exhibits to the Company’s Annual Report on Form 20F filed with the Commission on February 9, 2018 and incorporated herein byreference.†Indicates management contract or compensatory plan, contract or arrangement.77LK Technology Ltd. and SubsidiariesCONSOLIDATED FINANCIAL STATEMENTSTABLE OF CONTENTSPage(s)Report of Independent Registered Public Accounting FirmF2Consolidated Financial StatementsConsolidated Balance SheetsF3Consolidated Statements of Operations and Comprehensive LossF4Consolidated Statements of Changes in Stockholder’s EquityF5Consolidated Statements of Cash FlowsF6Notes to Consolidated Financial StatementsF7 F22F1REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRMTo the Shareholder and the Sole Director ofLK Technology Ltd.Opinion on the Consolidated Financial StatementsWe have audited the accompanying consolidated balance sheets of LK Technology Ltd. and. subsidiaries (the “Company”) as of December 31, 2017 and 2016, andthe related consolidated statements of operations and comprehensive loss, changes in shareholder’s equity and cash flows for each of the years then ended, andthe related notes (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in allmaterial respects, the consolidated financial position of the Company as of December 31, 2017 and 2016, and the consolidated results of its operations and its cashflows for each of the years then ended, in conformity with accounting principles generally accepted in the United States of America.Basis for OpinionThese consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’sconsolidated financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (UnitedStates) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules andregulations of the Securities and Exchange Commission and the PCAOB.We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonableassurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have,nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internalcontrol over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting.Accordingly, we express no such opinion.An independent member firm of Moore Stephens International Limited – members in principal cities throughout the worldOur audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, andperforming procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in theconsolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well asevaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion.Certified Public AccountantsWe have served as the Company’s auditor since 2018.Hong KongMay 25, 2018F2LK TECHNOLOGY LTD. AND SUBSIDIARIESCONSOLIDATED BALANCE SHEETS(IN U.S. DOLLARS)As of December 31,20172016AssetsCurrent assets:Cash and cash equivalents$72,379$83,843Accounts receivable, net of allowance for doubtful accounts9,729,6251,865,836Other receivables and prepayment2,376,7452,287,934Amounts due from related parties11,760,692Total current assets23,939,4414,237,613Property and equipment, net5,044,8727,771,027Intangible assets, net1,154,1971,682,445Goodwill7,239,9367,239,936Amount due from a related party204,412183,811TOTAL ASSETS37,582,85821,114,832LiabilitiesCurrent liabilities:Accounts payable8,784,5186,446,584Accrued liabilities and other payables12,962,91211,329,613Amounts due to related parties3,563,68316,129,323Total current liabilities25,311,11333,905,520Total liabilities25,311,11333,905,520Commitments and contingenciesShareholder’s Equity (Deficit)Share capitalCommon stock, $1 par value per share; 50,000 shares authorized as of December 31, 2017 and 2016, 1 share issued andoutstanding as of December 31, 2017 and 201611Additional paidin capital41,819,68510,037,469Accumulated deficit(29,936,158)(23,125,704)Accumulated other comprehensive income (loss)388,217297,546Total Shareholder’s Equity (Deficit)12,271,745(12,790,688)TOTAL LIABILITIES AND SHAREHOLDER’S EQUITY (DEFICIT)$37,582,858$21,114,832F3LK TECHNOLOGY LTD. AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS(IN U.S. DOLLARS)For the years endedDecember 31,20172016Revenues$26,082,417$5,233,145Less: Cost of revenues5,547,7796,315,504Less: Operating expenses:Selling and marketing23,908,7336,209,804General and administrative2,451,2492,108,854Research and development1,046,1982,882,202Total operating expenses27,406,18011,200,860Loss from operations(6,871,542)(12,283,219)Other income (expense):Interest expense(26,611)(4,412)Foreign exchange gains (losses)350,679(298,257)Loss from investment(428,571)Other income (expense), net(262,980)(34,572)Total other income (expense), net61,088(765,812)Loss before income taxes(6,810,454)(13,049,031)Income taxesNet loss$(6,810,454)$(13,049,031)Other comprehensive income:Foreign currency translation adjustment90,671387,375Total comprehensive loss$(6,719,783)$(12,661,656)F4LK TECHNOLOGY LTD. AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDER’S EQUITY(IN U.S. DOLLARS)Accumulated otherTotalOrdinary sharesAdditionalpaidin AccumulatedcomprehensiveIncomeShareholder’sEquity SharesAmountcapitaldeficits(loss)(Deficit)Balance as of December 31, 20151$ 1$8,250,505$(10,076,673)$(89,829)$(1,915,996)Capital contribution from C Media1,786,9641,786,964Net loss(13,049,031)(13,049,031)Foreign currency translation adjustment387,375387,375Balance as of December 31, 20161110,037,469(23,125,704)297,546(12,790,688)Capital contribution from C Media31,782,21631,782,216Net loss(6,810,454)(6,810,454)Foreign currency translation adjustment90,67190,671Balance as of December 31, 20171$1$41,819,685$(29,936,158)$388,217$12,271,745F5LK TECHNOLOGY LTD. AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF CASH FLOWS(IN U.S. DOLLARS)For the years endedDecember 31,20172016CASH FLOWS FROM OPERATING ACTIVITIES:Net loss$(6,810,454)$(13,049,031)Depreciation and amortization3,316,1813,245,161Loss on disposal of property and equipment115,19373,022Increase in allowance for doubtful accounts445,39562,591Changes in assets and liabilitiesAccounts receivable(7,933,730)(1,507,296)Other receivables and prepayment(2,202,960)2,873,984Accounts payable2,230,5434,757,457Accrued liabilities and other payables1,866,1377,483,441Net cash (used in) provided by operating activities(8,973,695)3,939,329CASH FLOWS FROM INVESTING ACTIVITIES:Purchase of property and equipment(12,689)(3,554,258)Proceeds from disposal of property and equipment29,942Net cash provided by (used in) investing activities17,253(3,554,258)CASH FLOWS FROM FINANCING ACTIVITIES:Advances from related parties8,938,290(1,197,870)Net cash provided by (used in) financing activities8,938,290(1,197,870)Effect of exchange rate changes6,688(32,746)Net decrease in cash and cash equivalents(11,464)(845,545)Cash and cash equivalents, at beginning of year83,843929,388Cash and cash equivalents, at end of year$72,379$83,843Supplemental cash flow disclosures:Interest paid26,6114,412Income taxes paidF6LK TECHNOLOGY LTD. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS(IN U.S. DOLLARS)NOTE 1 – DESCRIPTION OF BUSINESS AND ORGANIZATIONStar Chariot Limited was incorporated in the British Virgin Islands (“BVI”) as an exempted limited liability company on March 3, 2011. On January 18, 2018, it wasrenamed as LK Technology Ltd. (“LK Technology ” or the “Company”).LK Technology, its subsidiaries and its variable interest entities (“VIEs”) (collectively the “Group”) operate mobile application service for longdistance travel in thePeople’s Republic of China (the “PRC”). The core mobile application product, Luokuang, is made as an LBSsocial contents and services distribution platform. Itoffers functions based on various travel scenarios, e.g. information, entertainment, travel, ecommerce, O2O, advertising, etc.As of December 31, 2017, details of the Company’s subsidiaries and VIEs are as follows:NameDate ofincorporationPlace ofincorporationPercentage oflegal ownershipSubsidiaries:MMB LimitedApr 11, 2013Hong Kong100%Mobile Media (China) LimitedNov 6, 2007Hong Kong100%Zhong Chuan Tian Xia Information and Technology (Beijing) LimitedFeb 1, 2013PRC100%Zhong Chuan Tian Xia Information and Technology (Shenzhen) LimitedDec 23, 2010PRC100%VIEs:Beijing Zhong Chuan Shi Xun Technology Limited (“Zhong Chuan Shi Xun”)May 17, 2004PRC100%Jiangsu Zhong Chuan Rui You Information and Technology Limited (“Zhong Chuan Rui You”)May 26, 2011PRC100%Huoerguosi Luokuang Information and Technology Limited (“Huoerguosi Luokuang”)Jul 19, 2017PRC100%Shenzhen Jiu Zhou Shi Dai Digital and Technology Limited (“Jiu Zhou Shi Dai”)Nov 26, 2004PRC100%F7NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIESBasis of presentationThe consolidated financial statements of the Group have been prepared in accordance with accounting principles generally accepted in the United States of America(“US GAAP”).The Group incurred losses from operations of $6,871,542 and $12,283,219 for the years ended December 31, 2017 and 2016, respectively. As of December 31, 2017, theGroup had a shareholder’s equity of $12,271,145. The Group had negative cash flows from operating activities for the year ended December 31, 2017 of $8,973,695.As of December 31, 2017, the Group had cash and cash equivalents of $72,379 and a working capital deficit of $1,371,672. From 2018 and onwards, the Group willfocus on improving operation efficiency and cost reduction, and enhancing marketing functions to attract more users. The Group regularly monitors its current andexpected liquidity requirements to ensure that it maintains sufficient cash balances and accessible credit to meet its liquidity requirements in the short and long term.The parent company continues to provide cash flow to the Group. Based on working capital conditions and forecast for future operations, the Group believes that itwill be able to meet its payment obligations and other commitments for at least the following twelve months.Principles of consolidationThe consolidated financial statements include the financial statements of the Company, its subsidiaries, including the whollyforeign owned enterprises (“WFOEs”),and VIEs for which the Company is the primary beneficiary. All transactions and balances among the Company, its subsidiaries and consolidated VIEs have beeneliminated upon consolidation. The results of subsidiaries and consolidated VIEs acquired or disposed of are recorded in the consolidated statements of operationsfrom the effective date of acquisition or up to the effective date of disposal, as appropriate.A subsidiary is an entity in which (i) the Company directly or indirectly controls more than 50% of the voting power; or (ii) the Company has the power to appoint orremove the majority of the members of the board of directors or to cast a majority of votes at the meeting of the board of directors or to govern the financial andoperating policies of the investee pursuant to a statute or under an agreement among the shareholders or equity holders. A VIE is required to be consolidated by theprimary beneficiary of the entity if the equity holders in the entity do not have the characteristics of a controlling financial interest or do not have sufficient equity atrisk for the entity to finance its activities without additional subordinated financial support from other parties.F8To comply with the PRC legal restrictions on foreign ownership of companies that operate mobile application services, the Group operates in such restricted servicesin the PRC through certain PRC domestic companies, whose equity interests are held by certain management members or founders of the Group. Part of theregistered capital of these PRC domestic companies was funded by certain management members or founders of the Group. The Group has entered into certainexclusive business services agreements with these PRC domestic companies, which entitle it to receive a majority of their residual returns and make it obligatory forthe Group to absorb a majority of the risk of losses from their activities. In addition, the Group has entered into certain agreements with those management membersor founders, including equity interest pledge agreements of the equity interests held by those management members or founders and exclusive option agreements toacquire the equity interests in these companies when permitted by the PRC laws, rules and regulations.Details of the typical VIE structure of the Group’s significant consolidated VIEs, primarily domestic companies associated with the operations such as Zhong ChuanShi Xun, Zhong Chuan Rui You, Huoerguosi Luokuang and Jiu Zhou Shi Dai, are set forth below:(i)Contracts that give the Group effective control of VIEsExclusive option agreementsThe VIE equity holders have granted the WFOEs exclusive call options to purchase their equity interest in the VIEs at an exercise price equal to the higherof (i) the registered capital in the VIEs; and (ii) the minimum price as permitted by applicable PRC laws. Each relevant VIE has further granted the relevantWFOE an exclusive call option to purchase its assets at an exercise price equal to the book value of the assets or the minimum price as permitted byapplicable PRC laws, whichever is higher. The WFOEs may nominate another entity or individual to purchase the equity interest or assets, if applicable,under the call options. Each call option is exercisable subject to the condition that applicable PRC laws, rules and regulations do not prohibit completion ofthe transfer of the equity interest or assets pursuant to the call option. Each WFOE is entitled to all dividends and other distributions declared by the VIE,and the VIE equity holders have agreed to give up their rights to receive any distributions or proceeds from the disposal of their equity interests in the VIEwhich are in excess of the original registered capital that they contributed to the VIE, and to pay any such distributions or premium to the WFOE. Theexclusive call option agreements remain in effect until the equity interest or assets that are the subject of such agreements are transferred to the WFOEs.Equity pledge agreementsPursuant to the relevant equity pledge agreements, the relevant VIE equity holders have pledged all of their interests in the equity of the VIEs as acontinuing first priority security interest in favor of the corresponding WFOEs to secure the performance of obligations by the VIEs and/or the equityholders under the other structure contracts. Each WFOE is entitled to exercise its right to dispose of the VIE equity holders’ pledged interests in the equityof the VIE and has priority in receiving payment by the application of proceeds from the auction or sale of such pledged interests, in the event of anybreach or default under the loan agreement or other structure contracts, if applicable. These equity pledge agreements remain in force for the duration ofthe relevant loan agreement and other structure contracts.F9(ii)Contracts that enable the Group to receive substantially all of the economic benefits from the VIEsExclusive business services agreementsEach relevant VIE has entered into an exclusive business services agreement with the respective WFOE, pursuant to which the relevant WFOE providesexclusive business services to the VIE. In exchange, the VIE pays a service fee to the WFOE which typically amounts to what would be substantially all ofthe VIE’s pretax profit, resulting in a transfer of substantially all of the profits from the VIE to the WFOE.Other arrangementsThe exclusive call option agreements described above also enable the Group to receive substantially all of the economic benefits from the VIEs by typicallyentitling the WFOEs to all dividends and other distributions declared by the VIEs and to any distributions or proceeds from the disposal by the VIE equityholders of their equity interests in the VIEs that are in excess of the original registered capital that they contributed to the VIEs.Based on these contractual agreements, the Group believes that the PRC domestic companies as described above should be considered as VIEs because the equityholders do not have significant equity at risk nor do they have the characteristics of a controlling financial interest. Given that the Group is the primary beneficiaryof these PRC domestic companies, the Group believes that these VIEs should be consolidated based on the structure as described above.Under the contractual arrangements with the consolidated VIEs, the Group has the power to direct activities of the consolidated VIEs and can have assetstransferred out of the consolidated VIEs under its control. Therefore, the Group considers that there is no asset in any of the consolidated VIEs that can be usedonly to settle obligations of the consolidated VIEs, except for registered capital and PRC statutory reserves. As all consolidated VIEs are incorporated as limitedliability companies under the Company Law of the PRC, creditors of the consolidated VIEs do not have recourse to the general credit of the Group for any of theliabilities of the consolidated VIEs.Currently there is no contractual arrangement which requires the Group to provide additional financial support to the consolidated VIEs. However, as the Groupconducts its businesses primarily based on the licenses and approvals held by its consolidated VIEs, the Group has provided and will continue to provide financialsupport to the consolidated VIEs considering the business requirements of the consolidated VIEs, as well as the Group’s own business objectives in the future.F10Use of estimatesThe preparation of financial statements in conformity with US GAAP requires the Group to make estimates and assumptions that affect the reported amounts ofassets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expensesduring the reporting period. The most significant estimates are the allowance for doubtful accounts, the useful lives of property and equipment and intangibleassets, impairment of longlived assets and goodwill. Actual results could differ from those estimates.Fair value measurementsFair value is the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at themeasurement date under current market conditions. When determining the fair value measurements for assets and liabilities required or permitted to be recorded atfair value, the Group considers the principal or most advantageous market in which it would transact and it considers assumptions that market participants woulduse when pricing the asset or liability.Authoritative literature provides a fair value hierarchy which prioritizes the inputs to valuation techniques used to measure fair value into three broad levels. Thelevel in the hierarchy within which the fair value measurement in its entirety falls is based upon the lowest level of input that is significant to the fair valuemeasurement as follows:Level 1Level 1 applies to assets or liabilities for which there are quoted prices in active markets for identical assets or liabilities.Level 2Level 2 applies to assets or liabilities for which there are inputs other than quoted prices included within Level 1 that are observable for the asset or liability such asquoted prices for similar assets or liabilities in active markets; quoted prices for identical assets or liabilities in markets with insufficient volume or infrequenttransactions (less active markets); or modelderived valuations in which significant inputs are observable or can be derived principally from, or corroborated by,observable market data.Level 3Level 3 applies to assets or liabilities for which there are unobservable inputs to the valuation methodology that are significant to the measurement of the fair valueof the assets or liabilities.F11Cash and cash equivalentsCash and cash equivalents primarily consist of cash, money market funds, investments in interest bearing demand deposit accounts, time deposits and highly liquidinvestments with original maturities of three months or less from the date of purchase and are stated at cost which approximates their fair value. The Group has nocash equivalents.Accounts receivable, net of allowanceAccounts receivable are recognized and carried at the original invoiced amount less an allowance for any potential uncollectible amounts. An estimate for doubtfuldebts is made when collection of the full amount is no longer probable. Bad debts are written off as incurred. The Group generally does not require collateral from itscustomers.The Group maintains allowances for doubtful accounts for estimated losses resulting from the failure of customers to make payments on time. The Group reviews theaccounts receivable on a periodic basis and makes specific allowances when there is doubt as to the collectability of individual balances. In evaluating thecollectability of individual receivable balances, the Group considers many factors, including the age of the balance, the customer’s payment history, its currentcreditworthiness and current economic trends.Property and equipment, netProperty and equipment are carried at cost less accumulated depreciation. Depreciation is calculated on a straightline basis over the following estimated usefullives:Wifi equipment– 3 yearsOffice equipment– 3 to 5 yearsVehicles– 5 yearsCosts of repairs and maintenance are expensed as incurred and asset improvements are capitalized. The gain or loss on disposal of property and equipment is thedifference between the net sales proceeds and the carrying amount of the relevant assets and is recognized in the consolidated income statement. When propertyand equipment are retired or otherwise disposed of, the cost and accumulated depreciation are removed from the accounts and any resulting gain or loss is includedin the results of operations for the respective period.Construction in progressAssets under construction are not depreciated until construction is completed and the assets are ready for their intended use.F12Intangible assetsIntangible assets with finite lives are amortized using the straightline method over the estimated economic lives.Intangible assets have weighted average economic lives from the date of purchase as follows:Software– 5 yearsTrademarks– 10 yearsGoodwillThe Group assesses goodwill for impairment in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”)subtopic 35020, Intangibles—Goodwill and Other: Goodwill (“ASC 35020”), which requires that goodwill to be tested for impairment at the reporting unit level atleast annually and more frequently upon the occurrence of certain events, as defined by ASC 35020.We have the option to assess qualitative factors first to determine whether it is necessary to perform the twostep test in accordance with ASC 35020. If we believe,as a result of the qualitative assessment, that it is morelikelythannot that the fair value of the reporting unit is less than its carrying amount, the twostepquantitative impairment test described below is required. Otherwise, no further testing is required. In the qualitative assessment, we consider primary factors such asindustry and market considerations, overall financial performance of the reporting unit, and other specific information related to the operations. In performing thetwostep quantitative impairment test, the first step compares the carrying amount of the reporting unit to the fair value of the reporting unit based on either quotedmarket prices of the ordinary shares or estimated fair value using a combination of the income approach and the market approach. If the fair value of the reportingunit exceeds the carrying value of the reporting unit, goodwill is not impaired and we are not required to perform further testing. If the carrying value of the reportingunit exceeds the fair value of the reporting unit, then we must perform the second step of the impairment test in order to determine the implied fair value of thereporting unit’s goodwill. The fair value of the reporting unit is allocated to its assets and liabilities in a manner similar to a purchase price allocation in order todetermine the implied fair value of the reporting unit goodwill. If the carrying amount of the goodwill is greater than its implied fair value, the excess is recognized asan impairment loss.In 2017, we performed a qualitative assessment for goodwill. Based on the requirements of ASC35020, we evaluated all relevant factors, including but not limited tomacroeconomic conditions, industry and market conditions, financial performance. We weighed all factors in their entirety and concluded that it was not morelikelythannot the fair value was less than the carrying amount of the reporting unit, and further impairment testing on goodwill was unnecessary as of December 31, 2017and 2016.F13Impairment or disposal of longlived assetsLonglived assets other than goodwill are included in impairment evaluations when events and circumstances exist that indicate the carrying value of these assetsmay not be recoverable. In accordance with FASB ASC 360, Property, Plant and Equipment, the Group assesses the recoverability of the carrying value of longlivedassets by first grouping its longlived assets with other assets and liabilities at the lowest level for which identifiable cash flows are largely independent of the cashflows of other assets and liabilities (the asset group) and, secondly, estimating the undiscounted future cash flows that are directly associated with and expected toarise from the use of and eventual disposition of such asset group. If the carrying value of the asset group exceeds the estimated undiscounted cash flows, theGroup recognizes an impairment loss to the extent the carrying value of the longlived asset exceeds its fair value. The Group determines fair value through quotedmarket prices in active markets or, if quotations of market prices are unavailable, through the performance of internal analysis using a discounted cash flowmethodology or obtains external appraisals from independent valuation firms. The undiscounted and discounted cash flow analyses are based on a number ofestimates and assumptions, including the expected period over which the asset will be utilized, projected future operating results of the asset group, discount rateand longterm growth rate.As of December 31, 2017 and 2016, the Group assessed the impairment of its longlived assets and concluded that there was no impairment indication.Business combinationWe account for business combinations using the purchase method of accounting in accordance with FASB ASC topic 805, Business combinations. The purchasemethod accounting requires that the consideration transferred be allocated to the assets, including separately identifiable assets and liabilities we acquired, basedon their estimated fair values. The consideration transferred in an acquisition is measured as the aggregate of the fair values at the date of exchange of the assetsgiven, liabilities incurred, and equity instruments issued as well as the contingent considerations and all contractual contingencies as of the acquisition date. Thecosts directly attributable to the acquisition are expensed as incurred. Identifiable assets, liabilities and contingent liabilities acquired or assumed are measuredseparately at their fair value as of the acquisition date, irrespective of the extent of any noncontrolling interests. The excess of (i) the total of cost of acquisition, fairvalue of the noncontrolling interests and acquisition date fair value of any previously held equity interest in the acquiree over (ii) the fair value of the identifiable netassets of the acquiree, is recorded as goodwill. If the cost of acquisition is less than the fair value of the net assets of the subsidiary acquired, the difference isrecognized directly in earnings.Revenue recognitionThe Group recognizes revenue in accordance with FASB ASC topic 605, Revenue Recognition (“ASC 605”). Revenue is recognized when the following four revenuerecognition criteria are met: (i) persuasive evidence of an arrangement exists, (ii) delivery has occurred or services have been provided, (iii) the selling price is fixed ordeterminable, and (iv) collectability is reasonably assured.F14Displaybased online advertising servicesThe Group provides displaybased online advertising services to customers by integrating text description, image and video, and displaying the advertisements in aprominent position of LuoKuang Application. The Group recognizes revenue in accordance with ASC 605, over the contractual term based on the agreements andconfirmation letters signed by both parties, commencing on the date the customer’s advertisement is displayed on the Group’s platform.Foreign currency translationThe functional and reporting currency of the Company and the Company’s subsidiaries domiciled in BVI and Hong Kong are the United States dollar (“U.S. dollar”).The financial records of the Company’s other subsidiaries and VIEs located in the PRC are maintained in their local currency, the Chinese Renminbi (“RMB”), whichare the functional currency of these entities.Monetary assets and liabilities denominated in currencies other than the functional currency are translated into the functional currency at the rates of exchangeruling at the balance sheet date. Transactions in currencies other than the functional currency during the year are converted into the functional currency at theapplicable rates of exchange prevailing when the transactions occurred. Transaction gains and losses are recognized in the statements of operations.The Company’s entities with a functional currency of RMB translate their operating results and financial position into the U.S. dollar, the Company’s reportingcurrency. Assets and liabilities are translated using the exchange rates in effect on the balance sheet date. Revenues, expenses, gains and losses are translatedusing the average rate for the year. Retained earnings and equity are translated using the historical rate. Translation adjustments are reported as cumulativetranslation adjustments and are shown as a separate component of other comprehensive income.Income taxesDeferred income taxes are recognized for temporary differences between the tax basis of assets and liabilities and their reported amounts in the financial statements,net operating loss carry forwards and credits, by applying enacted statutory tax rates applicable to future years. Deferred tax assets are reduced by a valuationallowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Current income taxesare provided for in accordance with the laws and regulations applicable to the Group as enacted by the relevant tax authorities.The impact of an uncertain income tax position on the income tax return must be recognized at the largest amount that is morelikelythan not to be sustained uponaudit by the relevant tax authorities. An uncertain income tax position will not be recognized if it has less than a 50% likelihood of being sustained. Additionally, theGroup classifies the interest and penalties, if any, as a component of the income tax expense. For years ended December 31, 2017 and 2016, the Group did not haveany material interest or penalties associated with tax positions nor did the Group have any significant unrecognized uncertain tax positions.F15Related partiesParties are considered to be related to the Company if the parties, directly or indirectly, through one or more intermediaries, control, are controlled by, or are undercommon control with the Company. Related parties also include principal owners of the Company, its management, members of the immediate families of principalowners of the Company and its management and other parties with which the Company may deal with if one party controls or can significantly influence themanagement or operating policies of the other to an extent that one of the transacting parties might be prevented from fully pursuing its own separate interests. TheCompany discloses all significant related party transactions.LeasesLeases have been classified as either capital or operating leases. Leases that transfer substantially all the benefits and risks incidental to the ownership of assets areaccounted for as if there was an acquisition of an asset and incurrence of an obligation at the inception of the lease. All other leases are accounted for as operatingleases wherein rental payments are expensed as incurred.When the Group is the lessor, minimum contractual rental from leases are recognized on a straightline basis over the noncancelable term of the lease. With respectto a particular lease, actual amounts billed in accordance with the lease during any given period may be higher or lower than the amount of rental revenue recognizedfor the period. Straightline rental revenue commences when the customer assumes control of the leased premises. Accrued straightline rents receivable representsthe amount by which straightline rental revenue exceeds rents currently billed in accordance with lease agreements. Contingent rental revenue is accrued when thecontingency is removed.Advertising costsAdvertising costs include expenses associated with direct marketing. All advertising costs are expensed as incurred and included in selling and marketing expenses.During the years ended December 31, 2017 and 2016, advertising costs amounted to $23,171,170 and $4,537,653, respectively.Comprehensive lossComprehensive loss includes net loss and foreign currency translation adjustments and is presented net of tax. The tax effect is nil for the two years endedDecember 31, 2017 and 2016 in the consolidated statements of comprehensive loss.Concentration of credit riskFinancial instruments that potentially expose the Group to concentrations of credit risk consist primarily of cash and accounts receivable. The Group places its cashwith financial institutions with highcredit rating and quality in China. For the year ended December 31, 2017, two customers accounted for over 10% of totalrevenue. For the year ended December 31, 2016, four customers accounted for over 10% of total revenue. At December 31, 2017 and 2016, the Group had credit riskexposure of uninured cash in banks of approximately $72,379 and $83,843, respectively.F16NOTE 3 – INCOME TAXAt December 31, 2017 and 2016, the Group had an unused net operating loss carryforwards of approximately $25,123,726 and $20,081,239, respectively, for income taxpurposes, which expires between 2018 to 2022 and between 2017 to 2021, respectively. At December 31, 2017 and 2016, these net operating losses carryforwards mayresult in future income tax benefits of approximately $5,043,944 and $4,008,863, respectively, however, because realization is uncertain at this time, a valuationallowance in the same amount has been established. Deferred income taxes reflect the net effects of temporary differences between the carrying amounts of assetsand liabilities for financial reporting purposes and the amounts used for income tax purposes.Significant components of the Group’s deferred tax liabilities and assets of December 31, 2017 and 2016 are as follows:December 31,December 31,20172016Deferred tax liabilities$$Deferred tax assetNet operating loss carryforward5,043,9444,008,863Valuation allowance(5,043,944)(4,008,863)Net deferred tax assetMovement of valuation allowanceDecember 31,2017December 31,2016At the beginning of the year$4,008,863$2,049,352Current year addition823,9702,159,518Expired(61,411)Exchange difference272,522(200,007)At the end of the year5,043,9444,008,863The Company is not subject to taxation in BVI under the current BVI law. Subsidiaries operating in the PRC are subject to PRC Enterprise Income Tax at the statutoryrate of 25% for the years ended December 31, 2017 and 2016. Subsidiaries operating in Hong Kong are subject to Hong Kong income taxes at a rate of 16.5% for theyears ended December 31, 2017 and 2016.F17A reconciliation of the income tax expense to the amount computed by applying the current statutory tax rate to the loss before income taxes in the consolidatedstatements of comprehensive income is as follows:December 31,December 31,20172016Loss before income taxes$(6,810,454)$(13,049,031)Tax loss at statutory tax rate(1,655,174)(3,386,822)Nondeductible items6,729,2551,712,857Nontaxable items(3,789,956)(674,189)Change in valuation allowance823,9702,159,518Tax benefits(2,108,095)188,636Income tax expensesNOTE 4 – ACCOUNTS RECEIVABLEAt December 31, 2017 and 2016, accounts receivable consisted of the following:December 31,December 31,20172016Accounts receivable$10,406,602$2,098,946Less: allowance for doubtful accounts676,977233,110$9,729,625$1,865,836NOTE 5 – OTHER RECEIVABLESAt December 31, 2017 and 2016, other receivables consisted of the following:December 31,2017December 31,2016Advances to suppliers$339,701$181,472VAT recoverable (1)3,033,0651,662,805Other5,048,189485,152$2,376,745$2,287,934(1)The balance of advanced VAT represents input VAT available for deducting the amount of VAT paid in the future. During the years ended December 31, 2017and 2016, the Group purchased a large amount of WiFi equipment for deployments, which generated related input VAT approved by tax authority.F18NOTE 6 – AMOUNTS DUE FROM RELATEDPARTIESAt December 31, 2017 and 2016, amounts due from related parties consisted of the following:Name of related partyDecember 31,2017December 31,2016C Media Limited (1)$11,760,692$Ya Tuo Ji International Consultancy (Beijing) Limited (2)204,412183,811(1)C Media Limited is the parent company of LK Technology. The Group expects the amounts due from the related party will be returned to the Group within oneyear.(2)Ya Tuo Ji is a company controlled by the spouse of a major shareholder of C Media Limited. The loan is unsecured, interestfree and repayable on January 5,2019.NOTE 7 – PROPERTY AND EQUIPMENTAt December 31, 2017 and 2016, property and equipment consisted of the following:December 31,December 31,Useful life20172016WiFi equipment3 Years$8,711,424$8,367,678Vehicles5 Years43,246Office and other equipment3 – 5 Years170,242416,434Constructioninprogress2,166,4522,652,28811,048,11811,479,646Less: accumulated depreciation(6,003,246)(3,708,619)$5,044,872$7,771,027For the years ended December 31, 2017 and 2016, depreciation expense amounted to $2,628,884 and $2,474,434, respectively, of which $2,423,655 and $2,194,582,respectively, was included in cost of revenue, $117,648 and $121,740, respectively, was included in selling and marketing expenses and the remainder was included ingeneral and administrative expense.Included in constructioninprogress are WiFI equipment under construction.F19NOTE 8 – GOODWILLIn September of 2014, Zhong Chuan Shi Xun acquired a 100% interest in Zhong Chuan Rui You for a consideration of $7,391,894 (RMB48,000,000). Zhong Chuan RuiYou is primarily engaged in on train WiFi business, deploying WiFi equipment on trains and providing passengers with entertainment and information services ontrains. The book value of the identifiable net assets of Zhong Chuan Rui You was $151,958 (RMB963,000) and a goodwill of $7,239,936 was recorded.NOTE 9 – ACCRUED LIABILITIES AND OTHER PAYABLESAt December 31, 2017 and 2016, accrued liabilities and other payables consisted of the following:December 31,December 31,20172016Deferred revenue$2,326,406$302,735Accrued payroll143,998316,458Other taxes payable3,544,469461,699Other payable852,384686,526Other loans6,095,6559,562,915$12,962,912$11,329,613Deferred revenue represents prepayments from customers for advertising service and is recognized as revenue when the advertising services are rendered.Other loans of $939,555 and $57,416, respectively, as of December 31, 2017 and 2016, are unsecured, bear daily interest at 0.04% and are repayable on demand.NOTE 10 – AMOUNTS DUE TO RELATED PARTIESAt December 31, 2017 and 2016, amounts due to related parties consisted of the following:December 31,December 31,Name of related party20172016Mr. Song Xuesong (“Mr. Song”) (1)$2,921,639$10,669,325C Media Limited (2)$$4,855,236Thumb Beijing Branch (3)$612,103$576,560Thumb Shenzhen Branch (3)$29,941$28,202(1) The Group’s CEO(2) C Media Limited, the parent company.(3) Thumb Beijing and Shenzhen Branch are controlled by the spouse of Mr. Song.Amounts due to related parties are shortterm in nature, noninterest bearing, unsecured and payable on demand.F20NOTE 11 – RETIREMENT AND WELFARE BENEFITSThe Group’s fulltime employees are entitled to staff welfare benefits including medical care, casualty, housing benefits, education benefits, unemployment insuranceand pension benefits through a PRC governmentmandated multiemployer defined contribution plan. The Group is required to accrue the employerportion forthese benefits based on certain percentages of the employees’ salaries. The total provision for such employee benefits of $170,227 and $353,033 during the yearsended December 31, 2017 and 2016, respectively, of which $23,392 and $30,455, respectively, was charged to cost of revenue, $48,957 and $97,408, respectively wascharged to selling and marketing expenses, $49,717 and $86,934, respectively, was charged to general and administrative expenses and $48,161 and $138,236,respectively was charged to research and development expenses. The Group is required to make contributions to the plan out of the amounts accrued for all staffwelfare benefits except for education benefits. The PRC government is responsible for the staff welfare benefits including medical care, casualty, housing benefits,unemployment insurance and pension benefits to be paid to these employees.NOTE 12 – STATUTORY RESERVESAs stipulated by the relevant law and regulations in the PRC, the Group’s subsidiaries and VIEs in the PRC are required to maintain a nondistributable statutorysurplus reserve. Appropriations to the statutory surplus reserve are required to be made at not less than 10% of profit after taxes as reported in the subsidiaries’statutory financial statements prepared under the PRC GAAP. Once appropriated, these amounts are not available for future distribution to owners or shareholders.Once the general reserve is accumulated to 50% of the subsidiaries’ registered capital, the subsidiaries can choose not to provide more reserves. The statutoryreserve may be applied against prior year losses, if any, and may be used for general business expansion and production and increase in registered capital of thesubsidiaries. The Group allocated $Nil to statutory reserves during the years ended December 31, 2017 and 2016, respectively. The statutory reserves cannot betransferred to the Company in the form of loans or advances and are not distributable as cash dividends except in the event of liquidation.NOTE 13 – COMMITMENTS AND CONTINGENCIESOperating leasesWe have entered into operating lease agreements primarily for our office spaces in China. These leases expire through 2018 and are renewable upon negotiation.Future minimum rental payment required under the Office Lease is as follows:Year ending December 31:Amount2018$122,138F21Contingencies(a) Litigation with Shanghai Fusheng Weier Intelligent Control Technology Co., Ltd.On January 22, 2016, Zhong Chuan Rui You and Shanghai Fusheng Weier Intelligent Control Technology Co., Ltd. (“Fusheng Weier”) signed a contract forequipment of $1,652,842 (RMB10,800,000). Since Zhong Chuan Rui You did not make the payments of $1,126,381 (RMB7,360,000) on the due dates, Fusheng Weierfiled a lawsuit against Zhong Chuan Rui You in Shanghai Xuhui District People’s Court on October 8, 2016. On March 9, 2017, Xuhui District People’s Court issuedthe verdict requiring Zhong Chuan Rui You to pay the overdue debts. In August 2017, C Media Limited made the payment of $512,075 (RMB3,346,000). Theremaining balance has been accrued in accounts payable. The payment schedule for the remaining balance is being negotiated by the two parties. On February 5,2018, a hearing was held adding Zhong Chuan Shi Xun as a defendant. The Group plans to settle the remaining balance within one year.(b) Lawsuit with Gansu Jinlun Culture Media Co., Ltd.On August 22, 2014, Zhong Chuan Rui You and Gansu Jinlun Culture Media Co., Ltd. (“Gansu Jinlun”) signed a “Lanzhou Railway Bureau Airconditioned Train WiFi Network System Advertising Operation Rights Agreement” for advertising on 72 trains of $1,467,880 (RMB9,604,633). Due to the dispute on the projectimplementation, Zhong Chuan Rui You did not pay the advertising fee. On August 23, 2017, Gansu Jinlun filed a lawsuit with Gansu Intermediate People’s Court. OnDecember 19, 2017, Gansu Intermediate People’s Court issued a verdict, ruling that Zhong Chuan Rui You settle the overdue advertising fee. Since only 18 out of 72trains have been installed with Wifi network system, Zhong Chuan Rui You disputed and appealed to the verdict. The next court trial date has not yet beendetermined.C Media and Gansu Jinlun are negotiating a potential settlement to resume the contract. According to the legal counsel, it is probable that the settlement will amountto approximately $459,000 (RMB3,000,000); therefore, this amount has been accrued in accounts payable.(c) Litigation with Shenzhen Hua Xun Fang Zhou Technology Co., Ltd.On June 16, 2015, Zhong Chuan Rui You signed a cooperation agreement with Shenzhen Hua Xun Fang Zhou Technology Co., Ltd. (“Shenzhen Hua Xun”) andXuesong Song, a major shareholder of C Media Limited. Pursuant to this agreement, Zhong Chuan Rui You procures equipment from Shenzhen Hua Xun. XuesongSong acts as a joint liability guarantor for the entire debts of Zhong Chuan Rui You under this agreement. As Zhong Chuan Rui You did not make the payments onthe due dates, Shenzhen Hua Xun filed a lawsuit with Shenzhen Baoan District People’s Court on May 31, 2016. On November 1, 2016, Zhong Chuan Rui You,Xuesong Song and Shenzhen Hua Xun reached a settlement in Shenzhen Baoan District People’s Court to settle $1,735,389 (RMB11,355,000) in four instalments. OnDecember 30, 2017, the debt was assigned to C Media Limited.NOTE 14 – SUBSEQUENT EVENTThe Group has evaluated all events or transactions that occurred after December 31, 2017 through May 25, 2018, which is the date that the financial statements wereavailable to be issued.F22EX1.1 2 f20f2017ex11_luokung.htm AMENDED AND RESTATED MEMORANDUM OF ASSOCIATION AND ARTICLES OF ASSOCIATION OF LUOKUNGTECHNOLOGY CORP., DATED AUGUST 20, 2018, AND AS CURRENTLY IN EFFECTExhibit 1.1BC NO: 1553620British Virgin IslandsThe BVI Business Companies Act, 2004(No. 16 of 2004)Memorandum of AssociationandArticles of AssociationofLuokung Technology Corp.Incorporated the 24th day of October, 2009Amended and Restated the 11th Day of December 2009Amended and Restated the 17th Day of December 2009Amended and Restated the 25th Day of March 2010Amended and Restated the 21st day of May 2018Amended and restated the 17 August 2018Amended and restated the 21 August 2018Portcullis (BVI) LimitedPortcullis Chambers4th Floor Ellen Skelton Building3076 Sir Francis Drake HighwayRoad Town, TortolaBritish Virgin IslandsTERRITORY OF THE BRITISH VIRGIN ISLANDSTHE BVI BUSINESS COMPANIES ACT, 2004(No. 16 of 2004)MEMORANDUM OF ASSOCIATIONOFLuokung Technology Corp.NAME1.The name of the Company is Luokung Technology Corp.TYPE OF COMPANY2.The Company is a company limited by shares.REGISTERED OFFICE3.The first Registered Office of the Company is the offices of Portcullis TrustNet (BVI) Limited, Portcullis TrustNet Chambers, P.O. Box 3444, Road Town,Tortola, British Virgin Islands, the office of the registered agent.3.1The current Registered Office of the Company is Portcullis Chambers, 4th Floor Ellen Skelton Building, 3076 SirFrancis Drake Highway, Road Town,Tortola, British Virgin Islands VG1110.REGISTERED AGENT4.The first Registered Agent of the Company is Portcullis TrustNet (BVI) Limited of Portcullis TrustNet Chambers, P.O. Box 3444, Road Town, Tortola,British Virgin Islands.4.1The current Registered Agent of the Company is Portcullis (BVI) Ltd of Portcullis Chambers, 4th Floor Ellen Skelton Building, 3076 Sir Francis DrakeHighway, Road Town, Tortola, British Virgin Islands VG1110.AUTHORISED NUMBER OF SHARES5.The Company is authorised to issue a maximum of 251,000,000 shares.CLASSES, NUMBER AND PAR VALUE OF SHARES6.As at the date of adoption of this memorandum, the Company is authorised to issue (a) 250,000,000 ordinary shares without par value (“OrdinaryShares”); and (b) 1,000,000 preferred shares without par value (“Preferred Shares”).FRACTIONAL SHARES7.The Company may issue fractions of a share and a fractional share shall have the same corresponding fractional liabilities, limitations, preferences,privileges, qualifications, restrictions, rights and other attributes of a whole share of the same class or series of shares.RIGHTS, PRIVILEGES, RESTRICTIONS AND CONDITIONS ATTACHING TO SHARES8.(1)Subject to the memorandum and articles of association (and, for greater clarity, without prejudice to any special rights conferred thereby on theholders of any other shares), an Ordinary Share of the Company confers on the holder;(a)the right to one vote at a meeting of the members of the Company or on any Resolution of Members;(b)the right to an equal share in any Distribution paid by the Company; and(c)the right to an equal share in the distribution of the surplus assets of the Company on a winding up.(2)Subject to the memorandum and articles of association (and, for greater clarity, without prejudice to any special rights conferred thereby on theholders of any other shares), a Preferred Share of the Company confers on the holder;(a)the right to 399 votes at a meeting of the members of the Company or on any Resolution of Members;(b)the right to an equal share in any Distribution paid by the Company;(c)the right to an equal share in the distribution of the surplus assets of the Company on its liquidation.(d)be freely transferable, in whole or in part, by Mr. Xuesong Song to any third party through one or more Private Transactions, subject toApplicable Law; and(e)be freely transferable, in whole or in part, by Mr. Xuesong Song to any third party through one or more Public Transactions, subject to ApplicableLaw and Automatic Conversion of such Preferred Share(s) into Ordinary Share(s).(3)The directors may at their discretion by resolution of directors redeem, purchase or otherwise acquire all or any of the shares in the Companysubject to the Articles..VARIATION OF CLASS RIGHTS9.If at any time the issued shares are divided into different classes or series of shares, the rights attached to any class or series (unless otherwise providedby the terms of issue of the shares of that class or series) may, whether or not the Company is being wound up, be varied with the consent in writing of theholders of not less than threefourths of the issued shares of that class or series and of the holders of not less than threefourths of the issued shares ofany other class or series of shares which may be affected by such variation.RIGHTS NOT VARIED BY THE ISSUE OF SHARES PARI PASSU10.The rights conferred upon the holders of the shares of any class issued with preferred or other rights shall not, unless otherwise expressly provided by theterms of issue of the shares of that class, be deemed to be varied by the creation or issue of further shares ranking pari passu therewith.CAPACITY AND POWERS11.Subject to the Act, any other British Virgin Islands legislation and paragraph 12 below the Company has, irrespective of corporate benefit:(a)full capacity to carry on or undertake any business or activity, do any act or enter into any transaction;(b)for the purposes of paragraph (a), full rights, powers and privileges; and(c)full powers to issue shares with preemptive rights, subject to the Articles.2LIMITATIONS ON THE COMPANY’S BUSINESS12.For the purposes of section 9(4) of the Act the Company may not;(a)carry on banking or trust business, unless it is licensed to do so under the Banks and Trust Companies Act, 1990;(b)carry on business as an insurance or reinsurance company, insurance agent or insurance broker, unless it is licensed under the Insurance Act1994;(c)carry on business of company management, unless it is licensed under the Company Management Act, 1990;(d)carry on the business of providing the registered office or the registered agent for companies incorporated in the British Virgin Islands;(e)carry on the business as a mutual fund, manager of mutual funds or administrator of mutual funds unless it is recognized or licenced as the casemay be under the Mutual Funds Act 1996; or(f)carry on any other business that gives rise to a licencing requirement under any law for the time being in force in the British Virgin Islands unlessit is licenced, regulated, recognised or otherwise approved pursuant to such law.REGISTERED SHARES AND PROHIBITION ON ISSUE OF BEARER SHARES13.Shares in the Company may only be issued as registered shares. The issue of shares to bearer is prohibited.PROHIBITION ON EXCHANGE AND CONVERSION OF REGISTERED SHARES TO BEARER SHARES14.The exchange or conversion of registered shares to bearer shares is prohibited.TRANSFER OF REGISTERED SHARES15.Subject to the provisions of the Articles the Company may upon receipt of an instrument of transfer enter the name of the transferee in the register ofmembers subject to the prior or simultaneous approval of the Company as evidenced by a resolution of directors or by a resolution of members. Subject toany resolution of the members to the contrary, the directors may resolve by resolution of directors to refuse or delay the registration of the transfer forreasons that shall be specified in the resolution of directors.AMENDMENT OF MEMORANDUM AND ARTICLES OF ASSOCIATION16.1The Company may amend its Memorandum or Articles by a resolution of members or by a resolution of directors provided that the directors shall not havethe power to amend the Memorandum or Articles;(a)to restrict the rights or powers of the members to amend the Memorandum or Articles;(b)to change the percentage of members required to pass a resolution to amend the Memorandum or Articles;(c)in circumstances where the Memorandum or Articles cannot be amended by the members; or(d)to Clauses 8, 9, 10 or this Clause 12.16.2No amendment may be made to Regulation 76 of the Articles unless approved by an affirmative vote of the holders of 66 2/3 percent or more of theoutstanding votes of the shares entitled to vote thereon.3DEFINITIONS17.The meanings of words in this Memorandum are as defined in the Articles.We, Portcullis TrustNet (BVI) Limited of Portcullis TrustNet Chambers, P.O. Box 3444, Road Town, Tortola, British Virgin Islands for the purpose ofincorporating a BVI Business Company under the laws of the British Virgin Islands hereby sign this Memorandum of Association the 27th day of October,2009.Incorporator/s/ Nicole WheatleyPortcullis TrustNet (BVI) LimitedPortcullis TrustNet ChambersP.O. Box 3444Road Town, TortolaBritish Virgin Islands(Sgd. Nicole Wheatley)4TERRITORY OF THE BRITISH VIRGIN ISLANDSTHE BVI BUSINESS COMPANIES ACT, 2004(No. 16 of 2004)ARTICLES OF ASSOCIATIONOFLuokung Technology Corp.PRELIMINARY1.In these Articles, if not inconsistent with the subject or context, the words and expressions standing in the first column of the following table shall bear themeanings set opposite them respectively in the second column thereof.WordsMeaningApplicable Lawall Laws, including those of a jurisdiction in or outside of the United States, applicable to the Private orPublic Transactions.Actthe BVI Business Companies Act, 2004 (No 16 of 2004.) including any modification, extension, reenactment or renewal thereof and any regulations made thereunder.Articlesthese Articles of Association as originally framed or as from time to time amended.Automatic Conversioneach Preferred Share shall be automatically converted at any time after issue and without the payment ofany additional sum into an equal number of fully paid Ordinary Shares upon the conclusion of anytransfer by Mr. Xuesong Song to any third party through one or more Public Transactions.Designated Stock Exchangeeither the Nasdaq National Stock Market, Inc. or such other exchange or quotation bureau on which, theCompany’s Securities are listed or traded; provided that until the Securities are listed on any such“Exchange” the rules of any such Designated Stock Exchange shall be inapplicable to these Articles.directora director of the Company.distributionin relation to a distribution by a company to a member, means(i)the direct or indirect transfer of an asset, other than the Company’s own shares, to or forthe benefit of the member or(ii)the incurring of a debt to or for the benefit of a member,in relation to shares held by a member, and whether by means of a purchase of an asset, the purchase,redemption or other acquisition of shares, a transfer of indebtedness or otherwise, and includes adividend.Independent Directora person who meets the then current requirements for “independence” of the applicable rules andregulations of the U.S. Securities and Exchange Commission and the Designated Stock Exchange.5member or shareholderin relation to the Company, means a person whose name is entered in the register of members as theholder of one or more shares, or fractional shares, in the Company.Memorandumthe Memorandum of Association of the Company as originally framed or as from time to time amended.Mr. Xuesong Songthe founder, a director and Chairman of LK Technology Ltd.Ordinary Sharesissued or unissued ordinary shares of no par value of the Company having the rights, preferences andprivileges set out in the MemorandumPersonAn individual, a corporation, a trust, trustee, the estate of a deceased individual, a partnership or anunincorporated association of persons.Preferred Sharesissued or unissued preferred shares of no par value of the Company having the rights, preferences andprivileges set out in the MemorandumPrivate Transactionstransactions that are not considered as a Public Transaction.Public Transactionstransactions through any national securities exchanges and/or through the automated quotation systemincluding but not limited to NASDAQ, NYSE (including NYSE American) or OTC Markets, or anytransaction executed by the broker or with a market maker.Related Party(a) any director, officer and employee of the Company; (b) any family member of such director, officer andemployee; and (c) any entity (e.g. a corporation, partnership, or trust) controlled by or set up for thebenefit of a director, officer or employee, or a family member of such director, officer or employee.Relevant SystemA facility for the electronic transfer of uncertificated securities administered by The Depository TrustCompany or such other Person regulated by the SEC.resolution of directors(a)A resolution approved at a duly convened and constituted meeting of directors of the Companyor of a committee of directors of the Company by the affirmative vote of a simple majority of thedirectors present at the meeting who voted and did not abstain; or(b)a resolution consented to in writing by a simple majority of the directors or of all members of thecommittee, as the case may be;except that where a director is given more than one vote, he shall be counted by the number ofvotes he casts for the purpose of establishing a majority.resolution of membersSubject to the provisions of the Memorandum and Articles means:(a)A resolution approved at a duly convened and constituted meeting of the members of theCompany by the affirmative vote of(i)a majority of in excess of 50% of the votes of the shares entitled to vote and voting onthe resolution, or(ii)a majority of in excess of 50% of the votes of each class or series of shares entitled tovote as a class or series and voting on the resolution and a majority of in excess of 50%of the votes of the remaining shares entitled to vote and voting on the resolution; or6(b)a resolution consented to in writing by(i)an absolute majority of the votes of shares entitled to vote thereon, or(ii)an absolute majority of the votes of each class or series of shares entitled to votethereon as a class or series and of an absolute majority of the votes of the remainingshares entitled to vote thereon.SealAny Seal which has been duly adopted as the common seal of the Company.SECThe United States Securities and Exchange Commission.Securitiesshares and debt obligations of every kind, and options, warrants and rights to acquire shares, or debtobligations.SharesOrdinary Shares and/or Preferred Shares, as the case may be.solvency testa company satisfies the solvency test if;(i)the value of the company’s assets exceeds its liabilities, and(ii)the company is able to pay its debts as they fall due.treasury sharesshares in the Company that were previously issued but were repurchased, redeemed or otherwiseacquired by the Company and not cancelled.2.“Written” or any term of like import includes words typewritten, printed, painted, engraved, lithographed, photographed or represented or reproduced byany mode of reproducing words in a visible form, including telex, facsimile, telegram, cable or other form of writing produced by electronic communication.3.Save as aforesaid any words or expressions defined in the Act shall bear the same meaning in these Articles.4.Whenever the singular or plural number, or the masculine, feminine or neuter gender is used in these Articles, it shall equally, where the context admits,include the others.5.A reference in these Articles to voting in relation to shares shall be construed as a reference to voting by members holding the shares except that it is thevotes allocated to the shares that shall be counted and not the number of members who actually voted and a reference to shares being present at a meetingshall be given a corresponding construction.6.A reference to money in these Articles is, unless otherwise stated, a reference to the currency in which shares in the Company shall be issued according tothe provisions of the Memorandum.7REGISTERED SHARES7.Every member holding registered shares in the Company shall be entitled to a certificate signed by a director or officer of the Company or such otherperson who may be authorised from time to time by resolution of directors or under the Seal, with or without the signature of any director of the Company,specifying the share or shares held by him and the signature of the director or officer or person so authorised and the Seal may be facsimiles.8.Any member receiving a share certificate for registered shares shall indemnify and hold the Company and its directors and officers harmless from any lossor liability which it or they may incur by reason of any wrongful or fraudulent use or representation made by any person by virtue of the possessionthereof. If a share certificate for registered shares is worn out or lost it may be renewed on production of the worn out certificate or on satisfactory proof ofits loss together with such indemnity as may be required by a resolution of directors.9.If several persons are registered as joint holders of any shares, any one of such persons may give an effectual receipt for any distribution payable inrespect of such shares.10.Nothing in these Articles shall require title to any shares or other Securities to be evidenced by a certificate if the Act and the rules of the Designated StockExchange permit otherwise.SHARES AND ISSUED SHARES11.Subject to the provisions of these Articles and, if applicable, the rules of the Designated Stock Exchange, and any resolution of members, the directors ofthe Company may, without limiting or affecting any rights previously conferred on the holders of any existing shares or class or series of shares, offer, allot,grant options over or otherwise dispose of shares to such persons, at such times and upon such terms and conditions as the Company may by resolutionof directors determine. The directors shall not issue more shares than the maximum number provided for in the Memorandum.12.The Company may issue fully paid, partly paid or nil paid shares as well as bonus shares. A partly paid or nil paid share or a share issued for a promissorynote or other written obligation for payment of a debt may be issued subject to forfeiture in the manner prescribed in these Articles.13.Shares in the Company may be issued for consideration in any form, including money, a promissory note or other obligation to contribute money orproperty, real property, personal property (including goodwill and knowhow) services rendered or a contract for future services and the amount of suchconsideration shall be determined by resolution of directors, except that in the case of shares with par value, the amount shall not be less than the parvalue, and in the absence of fraud the decision of the directors as to the value of the consideration received by the Company in respect of the issue isconclusive unless a question of law is involved.14.Before issuing shares for a consideration other than money, the directors shall pass a resolution stating;(a)the amount to be credited for the issue of the shares;(b)their determination of the reasonable present cash value of the nonmoney consideration for the issue; and(c)that, in their opinion, the present cash value of the nonmoney consideration for the issue is not less than the amount to be credited for the issueof the shares.15.A share issued by the Company upon conversion of, or in exchange for, another share or a debt obligation or other security in the Company, shall betreated for all purposes as having been issued for money equal to the consideration received or deemed to have been received by the Company in respectof the other share, debt obligation or security.16.Treasury shares may be disposed of by the Company on such terms and conditions (not otherwise inconsistent with these Articles) as the Company mayby resolution of directors determine.17.Subject to these Articles, the Company may purchase, redeem or otherwise acquire and hold its own shares save that the Company may not purchase,redeem or otherwise acquire its own shares without the consent of the member whose shares are to be purchased, redeemed or otherwise acquired unlessthe Company is permitted by the Act or any other provision in the Memorandum or Articles to purchase, redeem or otherwise acquire the shares withouttheir consent.818.No purchase, redemption or other acquisition of shares shall be made unless the directors determine by resolution of the directors that immediately after thepurchase, redemption or other acquisition the value of the Company’s assets will exceed its liabilities and the Company will be able to pay its debts as theyfall due.19.Sections 60 (Process for acquisition of own shares), 61 (Offer to one or more shareholders) and 62 (Shares redeemed otherwise than at the option ofcompany) of the Act shall not apply to the Company.20.A determination by the directors under Article 18 is not required;(a)the Company redeems a share or shares pursuant to a right of a member to have his shares redeemed or to have his shares exchanged for moneyor other property of the Company; or(b)by virtue of the provisions of Section 179 of the Act.21.Shares that the Company purchases, redeems or otherwise acquires pursuant to Article 17 may be cancelled or held as treasury shares except to the extentthat such shares are in excess of 80 percent of the issued shares of the Company in which case they shall be cancelled but they shall be available forreissue.22.Shares in the Company shall only be held as treasury shares where the directors of the Company resolve as such and the number of shares acquired, whenaggregated with shares of the same class already held by the Company as treasury shares, does not exceed 50% of the shares of that class previouslyissued by the Company, excluding shares that have been cancelled. All rights and obligations attaching to a treasury share are suspended and shall not beexercised by or against the Company while it holds the share as a treasury share. Treasury shares may be reissued by the Company as new shares.23.The Company shall keep a register of members containing;(a)the names and addresses of the persons who hold registered shares in the Company;(b)the number of each class and series of registered shares held by each member;(c)the date on which the name of each member was entered in the register of members;(d)the date on which any person ceased to be a member; and(e)such other information as may be prescribed pursuant to the Act.24.The register of members may be in any such form as the directors may approve but if it is in magnetic, electronic or other data storage form, the companymust be able to produce legible evidence of its contents.25.The original or a copy of the register of members shall be kept at the registered office of the Company or at the office of the registered agent of theCompany.26.A share is deemed to be issued when the name of the member is entered in the register of members.27.Subject to the Act and the rules of the Designated Stock Exchange, the board of directors without further consultation with the holders of any shares orSecurities may resolve that any class or series of shares or other Securities from time to time in issue or to be issued (including shares in issue at the date ofthe adoption of these Articles) may be issued, held, registered and converted to uncertificated form.28.Conversion of shares held in certificated form into shares held in uncertificated form, and vice versa, may be made in such manner as the board of directors,in its absolute discretion, may think fit. The Company or any duly authorised transfer agent (a “Transfer Agent”) shall enter on the register of membershow many shares are held by each member in uncertificated form and in certificated form and shall maintain the register of members. Notwithstanding anyprovision of these Articles, a class or series of shares shall not be treated as two classes by virtue only of that class or series comprising both certificatedshares and uncertificated Shares or as a result of any provision of these Articles which apply only in respect of certificated or uncertificated shares.9MORTGAGES AND CHARGES OF REGISTERED SHARES29.Members may mortgage or charge their registered shares in the Company with such mortgage or charge being evidenced in writing and signed by, or withthe authority of the registered holder of a registered share to which the mortgage or charge relates. The Company shall give effect to the terms of any validmortgage or charge except insofar as it may conflict with any requirements herein contained for consent to the transfer of shares.30.In the case of the mortgage or charge of registered shares there may be entered in the share register of the Company at the request of the registered holderof such shares(a)a statement that the shares are mortgaged or charged;(b)the name of the mortgagee or chargee; and(c)the date on which the aforesaid particulars are entered in the share register.31.Where particulars of a mortgage or charge are entered in the register of members, such particulars shall be cancelled(a)with the written consent of the named mortgagee or chargee or anyone authorized to act on his behalf; or(b)upon evidence satisfactory to the directors of the discharge of the liability secured by the mortgage or charge and the issue of such indemnities asthe directors shall consider necessary or desirable.32.Whilst particulars of a mortgage or charge over registered shares are entered in the register of members pursuant to the preceding articles no transfer ofany share comprised therein shall be effected without the written consent of the named mortgagee or chargee or anyone authorized to act on his behalf.FORFEITURE33.When shares not fully paid on issue or issued for a promissory note or other written obligation for payment of a debt have been issued subject toforfeiture, the following provisions shall apply.34.Written notice specifying a date for payment to be made and the shares in respect of which payment is to be made shall be served on the member whodefaults in making payment pursuant to a promissory note or other written obligations to pay a debt.35.The written notice specifying a date for payment shall(a)name a further date not earlier than the expiration of 14 days from the date of service of the notice on or before which payment required by thenotice is to be made; and(b)contain a statement that in the event of nonpayment at or before the time named in the notice the shares, or any of them, in respect of whichpayment is not made will be liable to be forfeited.36.Where a written notice has been issued and the requirements of the notice have not been complied with within the prescribed time, the directors may at anytime before tender of payment forfeit and cancel the shares to which the notice relates.37.The Company is under no obligation to refund any moneys to the member whose shares have been forfeited and cancelled pursuant to these provisions.Upon forfeiture and cancellation of the shares the member is discharged from any further obligation to the Company with respect to the shares forfeitedand cancelled.10LIEN38.The Company shall have a first and paramount lien on every share issued for a promissory note or for any other binding obligation to contribute money orproperty or any combination thereof to the Company, and the Company shall also have a first and paramount lien on every share standing registered in thename of a member, whether singly or jointly with any other person or persons, for all the debts and liabilities of such member or his estate to the Company,whether the same shall have been incurred before or after notice to the Company of any interest of any person other than such member, and whether thetime for the payment or discharge of the same shall have actually arrived or not, and notwithstanding that the same are joint debts or liabilities of suchmember or his estate and any other person, whether a member of the Company or not. The Company’s lien on a share shall extend to all distributionspayable thereon. The directors may at any time either generally, or in any particular case, waive any lien that has arisen or declare any share to be wholly orin part exempt from the provisions of this Article.39.In the absence of express provisions regarding sale in the promissory note or other binding obligation to contribute money or property, the Company maysell, in such manner as the directors may by resolution of directors determine, any share on which the Company has a lien, but no sale shall be made unlesssome sum in respect of which the lien exists is presently payable nor until the expiration of twentyone days after a notice in writing, stating and demandingpayment of the sum presently payable and giving notice of the intention to sell in default of such payment, has been served on the holder for the timebeing of the share.40.The net proceeds of the sale by the Company of any shares on which it has a lien shall be applied in or towards payment of discharge of the promissorynote or other binding obligation to contribute money or property or any combination thereof in respect of which the lien exists so far as the same ispresently payable and any residue shall (subject to a like lien for debts or liabilities not presently payable as existed upon the share prior to the sale) bepaid to the holder of the share immediately before such sale. For giving effect to any such sale the directors may authorize some person to transfer theshare sold to the purchaser thereof. The purchaser shall be registered as the holder of the share and he shall not be bound to see to the application of thepurchase money, nor shall his title to the share be affected by any irregularity or invalidity in the proceedings in reference to the sale.TRANSFER OF SHARES41.Registered shares in the Company are transferred by a written instrument of transfer signed by the transferor and containing the name and address of thetransferee. The instrument of transfer shall be signed by the transferee if registration as a holder of the share shall impose a liability to the Company on thetransferee. The instrument of transfer of a registered share shall be sent to the Company for registration.42.The board of directors may resolve that interests in shares in the form of depositary receipts may be transferred or otherwise dealt with in accordance withthe regulations and practices instituted by the operator of the Relevant System and any holder of interests in shares shall be entitled to transfer suchinterests by means of such Relevant System and the operator of the Relevant System shall act as agent of the holders of such interests for the purposes ofthe transfer of those interests.43.The register of members may be closed at such times and for such periods as the board of directors may from time to time determine, upon notice beinggiven by advertisement in such newspapers as may be required by the Act and the practice of the Designated Stock Exchange.44.The transfer of a registered share is effective when the name of the transferee is entered on the register of members.45.If the directors of the Company are satisfied that an instrument of transfer relating to shares has been signed but that the instrument has been lost ordestroyed, they may resolve;(a)to accept such evidence of the transfer of the shares as they consider appropriate; and(b)that the transferee’s name should be entered in the register of members notwithstanding the absence of the instrument of transfer.46.The Company must on the receipt of an instrument of transfer from the transferor or transferee of a registered share in the Company enter the name of thetransferee of the share in the register or members unless the directors, if permitted by the Memorandum or these Articles, resolve by resolution of directorsto refuse or delay the registration of the transfer for reasons that shall be specified in the resolution of directors.11TRANSMISSION OF SHARES47.The personal representative of a deceased member may transfer a share even though the personal representative is not a member at the time of the transfer.48.The personal representative, executor or administrator of a deceased member, the guardian of an incompetent member or the trustee of a bankrupt membershall be the only person recognized by the Company as having any title to his share but they shall not be entitled to exercise any rights as a member of theCompany until they have proceeded as set forth in the next following three Articles.49.The production to the Company of any document which is evidence of probate of the will, or letters of administration of the estate, or confirmation asexecutor, of a deceased member or of the appointment of a guardian of an incompetent member or the trustee of a bankrupt member shall be accepted by theCompany even if the deceased, incompetent or bankrupt member is domiciled outside the British Virgin Islands if the document evidencing the grant ofprobate or letters of administration, confirmation as executor, appointment as guardian or trustee in bankruptcy is issued by a foreign court which hadcompetent jurisdiction in the matter. For the purpose of establishing whether or not a foreign court had competent jurisdiction in such a matter the directorsmay obtain appropriate legal advice. The directors may also require an indemnity to be given by the executor, administrator, guardian or trustee inbankruptcy.50.The Company may enter in the register of members the name of any person becoming entitled by operation of law or otherwise to a share or shares inconsequence of the death, incompetence or bankruptcy upon such evidence being produced as may reasonably be required by the directors.51.Any person who has become entitled to a share or shares in consequence of the death, incompetence or bankruptcy of any member may, instead of beingregistered himself, request in writing that some person to be named by him be registered as the transferee of such share or shares and such request shalllikewise be treated as if it were a transfer.52.What amounts to incompetence on the part of a person is a matter to be determined by the court having regard to all the relevant evidence and thecircumstances of the case.REDUCTION OR INCREASE IN AUTHORISED AND UNISSUED SHARES48.The Company may amend the Memorandum to increase or reduce the maximum number of shares the Company is authorised to issue and may in respect ofany unissued shares increase or reduce the number of such shares, or effect any combination of the foregoing.49.The Company may(1)(a) divide its shares, including issued shares, into a larger number of shares; or (b) combine its shares, including issued shares, into a smallernumber of shares.(2)A division or combination of shares, including issued shares, of a class or series shall be for a larger or smaller number, as the case may be, ofshares in the same class or series.(3)A company shall not divide its shares under subsection (1)(a) or (2) if it would cause the maximum number of shares that the Company isauthorised to issue by its memorandum to be exceeded.(4)Where shares are divided or combined under this article, the aggregate par value of the new shares must be equal to the aggregate par value of theoriginal shares.MEETINGS AND CONSENTS OF MEMBERS50.The directors of the Company may convene meetings of the members of the Company at such times and in such manner and places within or outside theBritish Virgin Islands as the directors consider necessary or desirable. The Company may hold an annual general meeting, but shall not (unless required bythe applicable rules of the Designated Stock Exchange for so long as the Company’s Securities are listed or traded on the Designated Stock Exchange) beobliged to hold an annual general meeting.51.Upon the written request of members holding 30 percent or more of the outstanding voting shares in the Company the directors shall convene a meeting ofmembers.1252.The directors shall give not less than 7 days notice of meetings of members to those persons whose names on the date the notice is given appear asmembers in the share register of the Company and are entitled to vote at the meeting.53.The directors may fix the date notice is given of a meeting of members as the record date for determining those shares that are entitled to vote at themeeting.54.A meeting of members may be called on short notice:(a)if members holding not less than 90 percent of the total number of shares entitled to vote on all matters to be considered at the meeting, or 90percent of the votes of each class or series of shares where members are entitled to vote thereon as a class or series together with not less than a90 percent majority of the remaining votes, have agreed to short notice of the meeting, or(b)if all members holding shares entitled to vote on all or any matters to be considered at the meeting have waived notice of the meeting and for thispurpose presence at the meeting shall be deemed to constitute waiver.55.The inadvertent failure of the directors to give notice of a meeting to a member, or the fact that a member has not received notice, does not invalidate themeeting.56.A member may be represented at a meeting of members by a proxy who may speak and vote on behalf of the member.57.The instrument appointing a proxy shall be produced at the place appointed for the meeting before the time for holding the meeting at which the personnamed in such instrument proposes to vote.58.An instrument appointing a proxy shall be in substantially the following form or such other form as the Chairman of the meeting shall accept as properlyevidencing the wishes of the member appointing the proxy.(Name of Company)I/Webeing a member of the aboveCompany withshares HEREBY APPOINTofor failing himofto be my/our proxy to vote for me/us at the meeting of members to be held on the dayofand at any adjournment thereof.(Any restrictions on voting to be inserted here.)Signed this day ofMember59.The following shall apply in respect of joint ownership of shares:a.if two or more persons hold shares jointly each of them may be present in person or by proxy at a meeting of members and may speak as a member;b.if only one of the joint owners is present in person or by proxy he may vote on behalf of all joint owners, andc.if two or more of the joint owners are present in person or by proxy they must vote as one.60.A member shall be deemed to be present at a meeting of members if he participates by telephone or other electronic means and all members participating inthe meeting are able to hear each other.61.A meeting of members is duly constituted if, at the commencement of the meeting, there are present in person or by proxy not less than 50 percent of thevotes of the shares or class or series of shares entitled to vote on resolutions of members to be considered at the meeting. If a quorum be present,notwithstanding the fact that such quorum may be represented by only one person then such person may resolve any matter and a certificate signed bysuch person accompanied where such person be a proxy by a copy of the proxy form shall constitute a valid resolution of members.1362.If within two hours from the time appointed for the meeting a quorum is not present, the meeting, if convened upon the requisition of members, shall bedissolved; in any other case it shall stand adjourned to the next business day at the same time and place or to such other time and place as the directorsmay determine, and if at the adjourned meeting there are present within one hour from the time appointed for the meeting in person or by proxy not lessthan one third of the votes of the shares or each class or series of shares entitled to vote on the resolutions to be considered by the meeting, those presentshall constitute a quorum but otherwise the meeting shall be dissolved.63.At every meeting of members, the Chairman of the Board of Directors shall preside as chairman of the meeting. If there is no Chairman of the Board ofDirectors or if the Chairman of the Board of Directors is not present at the meeting, the members present shall choose some one of their number to be thechairman. If the members are unable to choose a chairman for any reason, then the person representing the greatest number of voting shares present inperson or by prescribed form of proxy at the meeting shall preside as chairman failing which the oldest individual member or representative of a memberpresent shall take the chair.64.The chairman may, with the consent of the meeting, adjourn any meeting from time to time, and from place to place, but no business shall be transacted atany adjourned meeting other than the business left unfinished at the meeting from which the adjournment took place.65.At any meeting of the members the chairman shall be responsible for deciding in such manner as he shall consider appropriate whether any resolution hasbeen carried or not and the result of his decision shall be announced to the meeting and recorded in the minutes thereof. If the chairman shall have anydoubt as to the outcome of any resolution put to the vote, he shall cause a poll to be taken of all votes cast upon such resolution, but if the chairman shallfail to take a poll then any member present in person or by proxy who disputes the announcement by the chairman of the result of any vote mayimmediately following such announcement demand that a poll be taken and the chairman shall thereupon cause a poll to be taken. If a poll is taken at anymeeting, the result thereof shall be duly recorded in the minutes of that meeting by the chairman.66.Any person other than an individual shall be regarded as one member and subject to the specific provisions hereinafter contained for the appointment ofrepresentatives of such persons the right of any individual to speak for or represent such member shall be determined by the law of the jurisdiction where,and by the documents by which, the person is constituted or derives its existence. In case of doubt, the directors may in good faith seek legal advice fromany qualified person and unless and until a court of competent jurisdiction shall otherwise rule, the directors may rely and act upon such advice withoutincurring any liability to any member.67.Any person other than an individual which is a member of the Company may by resolution of its directors or other governing body authorize such personas it thinks fit to act as its representative at any meeting of the Company or of any class of members of the Company, and the person so authorized shall beentitled to exercise the same powers on behalf of the person which he represents as that person could exercise if it were an individual member of theCompany.68.The chairman of any meeting at which a vote is cast by proxy or on behalf of any person other than an individual may call for a notarially certified copy ofsuch proxy or authority which shall be produced within 7 days of being so requested or the votes cast by such proxy or on behalf of such person shall bedisregarded.69.Directors of the Company may attend and speak at any meeting of members of the Company and at any separate meeting of the holders of any class orseries of shares in the Company.70.An action that may be taken by the members at a meeting may also be taken by a resolution of members consented to in writing or by telex, telegram, cable,facsimile or other written electronic communication, without the need for any notice, but if any resolution of members is adopted otherwise than by theunanimous written consent of all members, a copy of such resolution shall forthwith be sent to all members not consenting to such resolution. The consentmay be in the form of counterparts, each counterpart being signed by one or more members.14DIRECTORS71.The first directors of the Company shall be appointed by the first registered agent of the Company and thereafter the directors shall be appointed byresolution of members, subject to Article 78, for such term as the members determine. A person shall not be appointed as a director unless he hasconsented in writing to be a director.72.The minimum number of directors shall be one and the maximum number shall be 20. Unless otherwise determined by the Company in a meeting ofshareholders and subject to the requirements of the Memorandum, the directors may by a Resolution of Directors, amend this Regulation 72 to change thenumber of directors. For as long as Securities of the Company are listed or traded on the Designated Stock Exchange, the directors shall include suchnumber of Independent Directors as applicable law, rules or regulations of the Designated Stock Exchange may require for a foreign private issuer as longas the Company is a foreign private issuer.73.Each director shall hold office for the term, if any, fixed by resolution of members or until his earlier death, resignation or removal.74.Where the Company has only one member who is an individual and that member is also the sole director of the Company, that sole member/director may, byinstrument in writing, nominate a person who is not disqualified from being a director of the Company under section 111(1) of the Act as a reserve directorof the Company to act in the place of the sole director in the event of his death.75.The nomination of a person as a reserve director of the Company ceases to have effect if;a.before the death of the sole member/director who nominated him;(i)he resigns as reserve director, or(ii)the sole member/director revokes the nomination in writing; orb.the sole member/director who nominated him ceases to be the sole member/director of the Company for any reason other than his death.76.A director may be removed from office, with or without cause, by a resolution of directors or a resolution of members. For the purposes of this Regulation76, “cause” means the willful and continuous failure by a director to substantially perform his duties to the Company (other than any such failure resultingfrom incapacity due to physical or mental illness) or the willful engaging by the director in gross misconduct materially and demonstrably injurious to theCompany. If a director is removed from office without cause by a resolution of the members, for the purposes of this Regulation, the resolution of memberswill require the affirmative vote of the holders of 66 2/3 percent or more of the outstanding votes of the shares entitled to vote thereon.77.A director may resign his office by giving written notice of his resignation to the Company and the resignation shall have effect from the date the notice isreceived by the Company or from such later date as may be specified in the notice. A director of the Company shall resign forthwith if he is, or becomes,disqualified to act as a director under the Act.78.The directors may at any time by resolution of directors appoint any person to be a director to fill a vacancy. There is a vacancy if a director dies orotherwise ceases to hold office as a director prior to the expiration of his term of office, where his term of office was fixed upon his appointment. Thedirectors may not appoint a director to fill a vacancy for a term exceeding the term that remained when the person who has ceased to be a director left orotherwise ceased to hold office.79.The Company shall keep a register of directors containing:a.the names and addresses of the persons who are directors of the Company or who have been nominated as reserve directors of the Company;b.the date on which each person whose name is entered in the register was appointed as a director of the Company or nominated as a reservedirector of the Company;c.the date on which each person named as a director ceased to be a director of the Company;d.the date on which the nomination of any person nominated as a reserve director ceased to have effect; ande.such other information as may be prescribed pursuant to the Act.1580.The original or a copy of any register of directors shall be kept at the office of the registered agent of the Company.81.The register of directors may be in any such form as the directors may approve but if it is in magnetic, electronic or other data storage form, the companymust be able to produce legible evidence of its contents.82.With the prior or subsequent approval by a resolution of members, the directors may, by a resolution of directors, fix the emoluments of directors withrespect to services to be rendered in any capacity to the Company.83.A director shall not require a share qualification and may be an individual or a company.POWERS OF DIRECTORS84.The business and affairs of the Company shall be managed by the directors who may pay all expenses incurred preliminary to and in connection with theformation and registration of the Company and may exercise all such powers of the Company as are not by the Act or by the Memorandum or theseArticles required to be exercised by the members of the Company, subject to any delegation of such powers as may be authorized by these Articles and tosuch requirements as may be prescribed by a resolution of members; but no requirement made by a resolution of members shall prevail if it be inconsistentwith these Articles nor shall such requirement invalidate any prior act of the directors which would have been valid if such requirement had not been made.Notwithstanding anything in Section 175 of the Act the directors shall have the power to sell, transfer, lease, exchange or otherwise dispose of more thanfifty percent of the assets of the Company without submitting a proposal to or obtaining the consent of the members of the Company.85.If the Company is a whollyowned subsidiary of a holding company a director may when exercising powers or performing duties as a director act in amanner which he believes is in the best interests of the holding company even though it may not be in the best interests of the Company.86.The directors may, by a resolution of directors, appoint any person, including a person who is a director, to be an officer or agent of the Company. Theresolution of directors appointing an agent may authorize the agent to appoint one or more substitutes or delegates to exercise some or all of the powersconferred on the agent by the Company.87.Every officer or agent of the Company has such powers and authority of the directors, including the power and authority to affix the Seal, as are set forth inthese Articles or in the resolution of directors appointing the officer or agent, except that no agent has any power or authority with respect to thefollowing;a.to amend the memorandum or articles;b.to change the registered office or agent;c.to designate committees of directors;d.to delegate powers to a committee of directors;e.to appoint or remove directors;f.to appoint or remove an agent;g.to fix emoluments of directors;h.to approve a plan of merger, consolidation or arrangement;i.to make a declaration of solvency for the purposes of section 198(1)(a) of the Act or to approve a liquidation plan;j.to make a determination under section 57(1) of the Act that the company will, immediately after a proposed distribution, satisfy the solvency test;ork.to authorise the Company to continue as a company incorporated under the laws of a jurisdiction outside the British Virgin Islands.1688.Any director which is a body corporate may appoint any person its duly authorized representative for the purpose of representing it at meetings of theBoard of Directors or with respect to unanimous written consents.89.The continuing directors may act notwithstanding any vacancy in their body, save that if their number is reduced to their knowledge below the numberfixed by or pursuant to these Articles as the necessary quorum for a meeting of directors, the continuing directors or director may act only for the purposeof appointing directors to fill any vacancy that has arisen or for summoning a meeting of members.90.The directors may by resolution of directors exercise all the powers of the Company to borrow money and to mortgage or charge its undertakings andproperty or any part thereof, to issue debentures, debenture stock and other securities whenever money is borrowed or as security for any debt, liability orobligation of the Company or of any third party.91.All cheques, promissory notes, drafts, bills of exchange and other negotiable instruments and all receipts for moneys paid to the Company, shall be signed,drawn, accepted, endorsed or otherwise executed, as the case may be, in such manner as shall from time to time be determined by resolution of directors.92.The Company shall keep a register of all relevant charges created by the Company showing:a.if the charge is a charge created by the Company, the date of its creation or if the charge is existing on property acquired by the Company, the dateon which the property was acquired;b.a short description of the liability secured by the charge;c.a short description of the property charged;d.the name and address of the trustee for the security, or if there is no such trustee the name and address of the chargee;e.unless the charge is a security to bearer, the name and address of the holder of the charge;f.details of any prohibition or restriction , if any, contained in the instrument creating the charge on the power of the company to create any futurecharge ranking in priority to or equally with the charge; andg.such other information as may be prescribed pursuant to the Act.93.The original or a copy of the register of charges shall be kept at the registered office of the Company or at the office of the registered agent of the Company.PROCEEDINGS OF DIRECTORS94.The directors of the Company or any committee thereof may meet at such times and in such manner and places within or outside the British Virgin Islandsas the directors may determine to be necessary or desirable. Any one or more directors may convene a meeting of directors.95.A director shall be deemed to be present at a meeting of directors if he participates by telephone or other electronic means and all directors participating inthe meeting are able to hear each other.96.A director shall be given not less than 3 days notice of meetings of directors, but a meeting of directors held without 3 days notice having been given to alldirectors shall be valid if all the directors entitled to vote at the meeting who do not attend, waive notice of the meeting and for this purpose, the presenceof a director at a meeting shall constitute waiver on his part. The inadvertent failure to give notice of a meeting to a director, or the fact that a director hasnot received the notice, does not invalidate the meeting.1797.A director may by a written instrument appoint an alternate who need not be a director and an alternate is entitled to attend meetings in the absence of thedirector who appointed him and to vote or consent in place of the director.98.A meeting of directors is duly constituted for all purposes if at the commencement of the meeting there are present in person or by alternate not less thanone half of the total number of directors, unless there are only 2 directors in which case the quorum shall be 2.99.If the Company shall have only one director the provisions herein contained for meetings of the directors shall not apply but such sole director shall havefull power to represent and act for the Company in all matters as are not by the Act or the Memorandum or these Articles required to be exercised by themembers of the Company and in lieu of minutes of a meeting shall record in writing and sign a note or memorandum of all matters requiring a resolution ofdirectors. Such a note or memorandum shall constitute sufficient evidence of such resolution for all purposes.100.At every meeting of the directors the Chairman of the Board of Directors shall preside as chairman of the meeting. If there is no Chairman of the Board ofDirectors or if the Chairman of the Board of Directors is not present at the meeting the Vice Chairman of the Board of Directors shall preside. If there is noVice Chairman of the Board of Directors or if the Vice Chairman of the Board of Directors is not present at the meeting the directors present shall choosesome one of their number to be chairman of the meeting.101.An action that may be taken by the directors or a committee of directors at a meeting may also be taken by a resolution of directors or a committee ofdirectors consented to in writing or by telex, telegram, cable, facsimile or other written electronic communication by all directors or all members of thecommittee as the case may be, without the need for any notice. The consent may be in the form of counterparts, each counterpart being signed by one ormore directors.102.The directors shall cause the following records to be kept:a.minutes of all meetings of directors, members, committees of directors and committees of members; andb.copies of all resolutions consented to by directors, members, committees of directors and committees of members.103.The resolutions, records and minutes referred to in the preceding Article shall be kept at the registered office of the Company, its principal place ofbusiness or at such other place as the directors determine.104.The directors may, by resolution of directors, designate one or more committees, each consisting of one or more directors.105.Subject to the following Article, each committee of directors has such powers and authorities of the directors, including the power and authority to affix theSeal, as are set forth in the resolution of directors establishing the committee.106.The directors have no power to delegate the following powers to a committee of directors;a.to amend the memorandum or articles;b.to change the registered office or agent;c.to designate committees of directors;d.to delegate powers to a committee of directors;e.to appoint or remove directors;f.to appoint or remove an agent;g.to fix emoluments of directors;18h.to approve a plan of merger, consolidation or arrangement;i.to make a declaration of solvency for the purposes of section 198(1)(a) or to approve a liquidation plan;j.to make a determination under section 57(1) that the company will, immediately after a proposed distribution, satisfy the solvency test; ork.to authorise the company to continue as a company incorporated under the laws of a jurisdiction outside the British Virgin Islands.Paragraphs (c) and (d) do not prevent a committee of directors, where authorised by the directors, from appointing a subcommittee and delegating powersexercisable by the committee to the subcommittee.107.The meetings and proceedings of each committee of directors consisting of 2 or more directors shall be governed mutatis mutandis by the provisions ofthese Articles regulating the proceedings of directors so far as the same are not superseded by any provisions in the resolution establishing the committee.108.Without prejudice to the freedom of the directors to establish any other committee, if the shares (or depositary receipts therefore) are listed or quoted onthe Designated Stock Exchange, and if required by the Designated Stock Exchange, the directors shall establish and maintain an audit committee as acommittee of the board of directors, the composition and responsibilities of which shall comply with the rules and regulations of the SEC and theDesignated Stock Exchange. The audit committee shall meet at least once every financial quarter, or more frequently as circumstances dictate.109.The Company shall adopt a formal written audit committee charter and review and assess the adequacy of the formal written charter on an annual basis.The charter shall specify the responsibilities of the Audit Committee which shall include responsibility for, among other things, ensuring its receipt from theoutside auditors of the Company of a formal written statement delineating all relationships between the auditor and the Company, and the AuditCommittee’s responsibility for actively engaging in a dialogue with the auditor with respect to any disclosed relationships or services that may impact theobjectivity and independence of the auditor take appropriate action to oversee the independence of the outside auditor. In addition, the Audit Committee isresponsible for reviewing potential conflict of interest situations and approving all Related Party Transactions.110.Without prejudice to the freedom of the directors to establish any other committees, the Board may establish a Stock Option Committee to administer theCompany’s stock option plans, including authority to make and modify awards under such plans. For so long as the Securities of the Company are listed ortraded on the Designated Stock Exchange, the Stock Option Committee shall have at least two Independent Directors. The Stock Option Committee willadminister the Company’s stock option plans, including the authority to make and modify awards under such plans.111.Without prejudice to the freedom of the directors to establish any other committees, the Board may establish a Nominating Committee to assist the Board inidentifying qualified individuals to become members of the Board.OFFICERS112.The Company may by resolution of directors appoint officers of the Company at such times as shall be considered necessary or expedient. Such officersmay consist of a Chairman of the Board of Directors, a Vice Chairman of the Board of Directors, a President and one or more Vice Presidents, Secretaries andTreasurers and such other officers as may from time to time be deemed desirable. Any number of offices may be held by the same person.113.The officers shall perform such duties as shall be prescribed at the time of their appointment subject to any modification in such duties as may beprescribed thereafter by resolution of directors or resolution of members, but in the absence of any specific allocation of duties it shall be the responsibilityof the Chairman of the Board of Directors to preside at meetings of directors and members, the Vice Chairman to act in the absence of the Chairman, thePresident to manage the day to day affairs of the Company, the Vice Presidents to act in order of seniority in the absence of the President but otherwise toperform such duties as may be delegated to them by the President, the Secretaries to maintain the share register, minute books and records (other thanfinancial records) of the Company and to ensure compliance with all procedural requirements imposed on the Company by applicable law, and the Treasurerto be responsible for the financial affairs of the Company.19114.Subject to the rules of the Designated Stock Exchange, the emoluments of all officers shall be fixed by resolution of directors.115.The officers of the Company shall hold office until their successors are duly elected and qualified, but any officer elected or appointed by the directors maybe removed at any time, with or without cause, by resolution of directors. Any vacancy occurring in any office of the Company may be filled by resolutionof directors.CONFLICT OF INTERESTS116.A director of the Company shall, forthwith after becoming aware of the fact that he is interested in a transaction entered into or to be entered into by theCompany, disclose the interest to all other directors of the Company.117.A director of the Company is not required to comply with Article 112 if;a.the transaction or proposed transaction is between the director and the Company; andb.the transaction or proposed transaction is or is to be entered into in the ordinary course of the company’s business and on usual terms andconditions.118.For the purposes of Article 112 a disclosure to all other directors to the effect that a director is a member, director or officer of another named entity or has afiduciary relationship with respect to the entity or a named individual and is to be regarded as interested in any transaction which may, after the date of theentry or disclosure, be entered into with that entity or individual, is a sufficient disclosure of interest in relation to that transaction.119.A.A director of the Company who is interested in a transaction entered into or to be entered into by the Company may:(i)vote on a matter relating to the transaction;(ii)attend a meeting of directors at which a matter relating to the transaction arises and be included among the directors present at the meeting for thepurposes of a quorum; and(iii)sign a document on behalf of the Company, or do any other thing in his capacity as a director, that relates to the transaction,and, subject to compliance with the Act shall not, by reason of his office be accountable to the Company for any benefit which he derives from suchtransaction and no such transaction shall be liable to be avoided on the grounds of any such interest or benefit.119.B.For so long the Securities of the Company are listed or traded on the Designated Stock Exchange, the Company shall conduct an appropriate review of allmaterial Related Party Transactions on an ongoing basis and shall utilize the Audit Committee for the review and approval of potential conflicts of interestsituations.INDEMNIFICATION120.Subject to the limitations hereinafter provided the Company may indemnify against all expenses, including legal fees, and against all judgments, fines andamounts paid in settlement and reasonably incurred in connection with legal, administrative or investigative proceedings any person who;a.is or was a party or is threatened to be made a party to any threatened, pending or completed proceedings, whether civil, criminal, administrative orinvestigative, by reason of the fact that the person is or was a director, an officer or a liquidator of the Company; orb.is or was, at the request of the Company, serving as a director of, or in any other capacity is or was acting for, another body corporate or apartnership, joint venture, trust or other enterprise.20121.The Company may only indemnify a person if the person acted honestly and in good faith in what he believed to be in the best interests of the Companyand, in the case of criminal proceedings, the person had no reasonable cause to believe that his conduct was unlawful.122.For the purposes of the preceding Article, a director acts in the best interests of the Company if he acts in the best interests of;a.the Company’s holding company; orb.a shareholder or shareholders of the Company; in either case, in the circumstances specified in Article 85.123.The decision of the directors as to whether the person acted honestly and in good faith and with a view to the best interests of the Company and as towhether the person had no reasonable cause to believe that his conduct was unlawful is, in the absence of fraud, sufficient for the purposes of theseArticles, unless a question of law is involved.124.The termination of any proceedings by any judgment, order, settlement, conviction or the entering of a nolle prosequi does not, by itself, create apresumption that the person did not act honestly and in good faith and with a view to the best interests of the Company or that the person had reasonablecause to believe that his conduct was unlawful.Consolidated Statements of Changes in Stockholder’s EquityF5Consolidated Statements of Cash FlowsF6Notes to Consolidated Financial StatementsF7 F22F1REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRMTo the Shareholder and the Sole Director ofLK Technology Ltd.Opinion on the Consolidated Financial StatementsWe have audited the accompanying consolidated balance sheets of LK Technology Ltd. and. subsidiaries (the “Company”) as of December 31, 2017 and 2016, andthe related consolidated statements of operations and comprehensive loss, changes in shareholder’s equity and cash flows for each of the years then ended, andthe related notes (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in allmaterial respects, the consolidated financial position of the Company as of December 31, 2017 and 2016, and the consolidated results of its operations and its cashflows for each of the years then ended, in conformity with accounting principles generally accepted in the United States of America.Basis for OpinionThese consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’sconsolidated financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (UnitedStates) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules andregulations of the Securities and Exchange Commission and the PCAOB.We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonableassurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have,nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internalcontrol over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting.Accordingly, we express no such opinion.An independent member firm of Moore Stephens International Limited – members in principal cities throughout the worldOur audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, andperforming procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in theconsolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well asevaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion.Certified Public AccountantsWe have served as the Company’s auditor since 2018.Hong KongMay 25, 2018F2LK TECHNOLOGY LTD. AND SUBSIDIARIESCONSOLIDATED BALANCE SHEETS(IN U.S. DOLLARS)As of December 31,20172016AssetsCurrent assets:Cash and cash equivalents$72,379$83,843Accounts receivable, net of allowance for doubtful accounts9,729,6251,865,836Other receivables and prepayment2,376,7452,287,934Amounts due from related parties11,760,692Total current assets23,939,4414,237,613Property and equipment, net5,044,8727,771,027Intangible assets, net1,154,1971,682,445Goodwill7,239,9367,239,936Amount due from a related party204,412183,811TOTAL ASSETS37,582,85821,114,832LiabilitiesCurrent liabilities:Accounts payable8,784,5186,446,584Accrued liabilities and other payables12,962,91211,329,613Amounts due to related parties3,563,68316,129,323Total current liabilities25,311,11333,905,520Total liabilities25,311,11333,905,520Commitments and contingenciesShareholder’s Equity (Deficit)Share capitalCommon stock, $1 par value per share; 50,000 shares authorized as of December 31, 2017 and 2016, 1 share issued andoutstanding as of December 31, 2017 and 201611Additional paidin capital41,819,68510,037,469Accumulated deficit(29,936,158)(23,125,704)Accumulated other comprehensive income (loss)388,217297,546Total Shareholder’s Equity (Deficit)12,271,745(12,790,688)TOTAL LIABILITIES AND SHAREHOLDER’S EQUITY (DEFICIT)$37,582,858$21,114,832F3LK TECHNOLOGY LTD. AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS(IN U.S. DOLLARS)For the years endedDecember 31,20172016Revenues$26,082,417$5,233,145Less: Cost of revenues5,547,7796,315,504Less: Operating expenses:Selling and marketing23,908,7336,209,804General and administrative2,451,2492,108,854Research and development1,046,1982,882,202Total operating expenses27,406,18011,200,860Loss from operations(6,871,542)(12,283,219)Other income (expense):Interest expense(26,611)(4,412)Foreign exchange gains (losses)350,679(298,257)Loss from investment(428,571)Other income (expense), net(262,980)(34,572)Total other income (expense), net61,088(765,812)Loss before income taxes(6,810,454)(13,049,031)Income taxesNet loss$(6,810,454)$(13,049,031)Other comprehensive income:Foreign currency translation adjustment90,671387,375Total comprehensive loss$(6,719,783)$(12,661,656)F4LK TECHNOLOGY LTD. AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDER’S EQUITY(IN U.S. DOLLARS)Accumulated otherTotalOrdinary sharesAdditionalpaidin AccumulatedcomprehensiveIncomeShareholder’sEquity SharesAmountcapitaldeficits(loss)(Deficit)Balance as of December 31, 20151$ 1$8,250,505$(10,076,673)$(89,829)$(1,915,996)Capital contribution from C Media1,786,9641,786,964Net loss(13,049,031)(13,049,031)Foreign currency translation adjustment387,375387,375Balance as of December 31, 20161110,037,469(23,125,704)297,546(12,790,688)Capital contribution from C Media31,782,21631,782,216Net loss(6,810,454)(6,810,454)Foreign currency translation adjustment90,67190,671Balance as of December 31, 20171$1$41,819,685$(29,936,158)$388,217$12,271,745F5LK TECHNOLOGY LTD. AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF CASH FLOWS(IN U.S. DOLLARS)For the years endedDecember 31,20172016CASH FLOWS FROM OPERATING ACTIVITIES:Net loss$(6,810,454)$(13,049,031)Depreciation and amortization3,316,1813,245,161Loss on disposal of property and equipment115,19373,022Increase in allowance for doubtful accounts445,39562,591Changes in assets and liabilitiesAccounts receivable(7,933,730)(1,507,296)Other receivables and prepayment(2,202,960)2,873,984Accounts payable2,230,5434,757,457Accrued liabilities and other payables1,866,1377,483,441Net cash (used in) provided by operating activities(8,973,695)3,939,329CASH FLOWS FROM INVESTING ACTIVITIES:Purchase of property and equipment(12,689)(3,554,258)Proceeds from disposal of property and equipment29,942Net cash provided by (used in) investing activities17,253(3,554,258)CASH FLOWS FROM FINANCING ACTIVITIES:Advances from related parties8,938,290(1,197,870)Net cash provided by (used in) financing activities8,938,290(1,197,870)Effect of exchange rate changes6,688(32,746)Net decrease in cash and cash equivalents(11,464)(845,545)Cash and cash equivalents, at beginning of year83,843929,388Cash and cash equivalents, at end of year$72,379$83,843Supplemental cash flow disclosures:Interest paid26,6114,412Income taxes paidF6LK TECHNOLOGY LTD. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS(IN U.S. DOLLARS)NOTE 1 – DESCRIPTION OF BUSINESS AND ORGANIZATIONStar Chariot Limited was incorporated in the British Virgin Islands (“BVI”) as an exempted limited liability company on March 3, 2011. On January 18, 2018, it wasrenamed as LK Technology Ltd. (“LK Technology ” or the “Company”).LK Technology, its subsidiaries and its variable interest entities (“VIEs”) (collectively the “Group”) operate mobile application service for longdistance travel in thePeople’s Republic of China (the “PRC”). The core mobile application product, Luokuang, is made as an LBSsocial contents and services distribution platform. Itoffers functions based on various travel scenarios, e.g. information, entertainment, travel, ecommerce, O2O, advertising, etc.As of December 31, 2017, details of the Company’s subsidiaries and VIEs are as follows:NameDate ofincorporationPlace ofincorporationPercentage oflegal ownershipSubsidiaries:MMB LimitedApr 11, 2013Hong Kong100%Mobile Media (China) LimitedNov 6, 2007Hong Kong100%Zhong Chuan Tian Xia Information and Technology (Beijing) LimitedFeb 1, 2013PRC100%Zhong Chuan Tian Xia Information and Technology (Shenzhen) LimitedDec 23, 2010PRC100%VIEs:Beijing Zhong Chuan Shi Xun Technology Limited (“Zhong Chuan Shi Xun”)May 17, 2004PRC100%Jiangsu Zhong Chuan Rui You Information and Technology Limited (“Zhong Chuan Rui You”)May 26, 2011PRC100%Huoerguosi Luokuang Information and Technology Limited (“Huoerguosi Luokuang”)Jul 19, 2017PRC100%Shenzhen Jiu Zhou Shi Dai Digital and Technology Limited (“Jiu Zhou Shi Dai”)Nov 26, 2004PRC100%F7NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIESBasis of presentationThe consolidated financial statements of the Group have been prepared in accordance with accounting principles generally accepted in the United States of America(“US GAAP”).The Group incurred losses from operations of $6,871,542 and $12,283,219 for the years ended December 31, 2017 and 2016, respectively. As of December 31, 2017, theGroup had a shareholder’s equity of $12,271,145. The Group had negative cash flows from operating activities for the year ended December 31, 2017 of $8,973,695.As of December 31, 2017, the Group had cash and cash equivalents of $72,379 and a working capital deficit of $1,371,672. From 2018 and onwards, the Group willfocus on improving operation efficiency and cost reduction, and enhancing marketing functions to attract more users. The Group regularly monitors its current andexpected liquidity requirements to ensure that it maintains sufficient cash balances and accessible credit to meet its liquidity requirements in the short and long term.The parent company continues to provide cash flow to the Group. Based on working capital conditions and forecast for future operations, the Group believes that itwill be able to meet its payment obligations and other commitments for at least the following twelve months.Principles of consolidationThe consolidated financial statements include the financial statements of the Company, its subsidiaries, including the whollyforeign owned enterprises (“WFOEs”),and VIEs for which the Company is the primary beneficiary. All transactions and balances among the Company, its subsidiaries and consolidated VIEs have beeneliminated upon consolidation. The results of subsidiaries and consolidated VIEs acquired or disposed of are recorded in the consolidated statements of operationsfrom the effective date of acquisition or up to the effective date of disposal, as appropriate.A subsidiary is an entity in which (i) the Company directly or indirectly controls more than 50% of the voting power; or (ii) the Company has the power to appoint orremove the majority of the members of the board of directors or to cast a majority of votes at the meeting of the board of directors or to govern the financial andoperating policies of the investee pursuant to a statute or under an agreement among the shareholders or equity holders. A VIE is required to be consolidated by theprimary beneficiary of the entity if the equity holders in the entity do not have the characteristics of a controlling financial interest or do not have sufficient equity atrisk for the entity to finance its activities without additional subordinated financial support from other parties.F8To comply with the PRC legal restrictions on foreign ownership of companies that operate mobile application services, the Group operates in such restricted servicesin the PRC through certain PRC domestic companies, whose equity interests are held by certain management members or founders of the Group. Part of theregistered capital of these PRC domestic companies was funded by certain management members or founders of the Group. The Group has entered into certainexclusive business services agreements with these PRC domestic companies, which entitle it to receive a majority of their residual returns and make it obligatory forthe Group to absorb a majority of the risk of losses from their activities. In addition, the Group has entered into certain agreements with those management membersor founders, including equity interest pledge agreements of the equity interests held by those management members or founders and exclusive option agreements toacquire the equity interests in these companies when permitted by the PRC laws, rules and regulations.Details of the typical VIE structure of the Group’s significant consolidated VIEs, primarily domestic companies associated with the operations such as Zhong ChuanShi Xun, Zhong Chuan Rui You, Huoerguosi Luokuang and Jiu Zhou Shi Dai, are set forth below:(i)Contracts that give the Group effective control of VIEsExclusive option agreementsThe VIE equity holders have granted the WFOEs exclusive call options to purchase their equity interest in the VIEs at an exercise price equal to the higherof (i) the registered capital in the VIEs; and (ii) the minimum price as permitted by applicable PRC laws. Each relevant VIE has further granted the relevantWFOE an exclusive call option to purchase its assets at an exercise price equal to the book value of the assets or the minimum price as permitted byapplicable PRC laws, whichever is higher. The WFOEs may nominate another entity or individual to purchase the equity interest or assets, if applicable,under the call options. Each call option is exercisable subject to the condition that applicable PRC laws, rules and regulations do not prohibit completion ofthe transfer of the equity interest or assets pursuant to the call option. Each WFOE is entitled to all dividends and other distributions declared by the VIE,and the VIE equity holders have agreed to give up their rights to receive any distributions or proceeds from the disposal of their equity interests in the VIEwhich are in excess of the original registered capital that they contributed to the VIE, and to pay any such distributions or premium to the WFOE. Theexclusive call option agreements remain in effect until the equity interest or assets that are the subject of such agreements are transferred to the WFOEs.Equity pledge agreementsPursuant to the relevant equity pledge agreements, the relevant VIE equity holders have pledged all of their interests in the equity of the VIEs as acontinuing first priority security interest in favor of the corresponding WFOEs to secure the performance of obligations by the VIEs and/or the equityholders under the other structure contracts. Each WFOE is entitled to exercise its right to dispose of the VIE equity holders’ pledged interests in the equityof the VIE and has priority in receiving payment by the application of proceeds from the auction or sale of such pledged interests, in the event of anybreach or default under the loan agreement or other structure contracts, if applicable. These equity pledge agreements remain in force for the duration ofthe relevant loan agreement and other structure contracts.F9(ii)Contracts that enable the Group to receive substantially all of the economic benefits from the VIEsExclusive business services agreementsEach relevant VIE has entered into an exclusive business services agreement with the respective WFOE, pursuant to which the relevant WFOE providesexclusive business services to the VIE. In exchange, the VIE pays a service fee to the WFOE which typically amounts to what would be substantially all ofthe VIE’s pretax profit, resulting in a transfer of substantially all of the profits from the VIE to the WFOE.Other arrangementsThe exclusive call option agreements described above also enable the Group to receive substantially all of the economic benefits from the VIEs by typicallyentitling the WFOEs to all dividends and other distributions declared by the VIEs and to any distributions or proceeds from the disposal by the VIE equityholders of their equity interests in the VIEs that are in excess of the original registered capital that they contributed to the VIEs.Based on these contractual agreements, the Group believes that the PRC domestic companies as described above should be considered as VIEs because the equityholders do not have significant equity at risk nor do they have the characteristics of a controlling financial interest. Given that the Group is the primary beneficiaryof these PRC domestic companies, the Group believes that these VIEs should be consolidated based on the structure as described above.Under the contractual arrangements with the consolidated VIEs, the Group has the power to direct activities of the consolidated VIEs and can have assetstransferred out of the consolidated VIEs under its control. Therefore, the Group considers that there is no asset in any of the consolidated VIEs that can be usedonly to settle obligations of the consolidated VIEs, except for registered capital and PRC statutory reserves. As all consolidated VIEs are incorporated as limitedliability companies under the Company Law of the PRC, creditors of the consolidated VIEs do not have recourse to the general credit of the Group for any of theliabilities of the consolidated VIEs.Currently there is no contractual arrangement which requires the Group to provide additional financial support to the consolidated VIEs. However, as the Groupconducts its businesses primarily based on the licenses and approvals held by its consolidated VIEs, the Group has provided and will continue to provide financialsupport to the consolidated VIEs considering the business requirements of the consolidated VIEs, as well as the Group’s own business objectives in the future.F10Use of estimatesThe preparation of financial statements in conformity with US GAAP requires the Group to make estimates and assumptions that affect the reported amounts ofassets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expensesduring the reporting period. The most significant estimates are the allowance for doubtful accounts, the useful lives of property and equipment and intangibleassets, impairment of longlived assets and goodwill. Actual results could differ from those estimates.Fair value measurementsFair value is the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at themeasurement date under current market conditions. When determining the fair value measurements for assets and liabilities required or permitted to be recorded atfair value, the Group considers the principal or most advantageous market in which it would transact and it considers assumptions that market participants woulduse when pricing the asset or liability.Authoritative literature provides a fair value hierarchy which prioritizes the inputs to valuation techniques used to measure fair value into three broad levels. Thelevel in the hierarchy within which the fair value measurement in its entirety falls is based upon the lowest level of input that is significant to the fair valuemeasurement as follows:Level 1Level 1 applies to assets or liabilities for which there are quoted prices in active markets for identical assets or liabilities.Level 2Level 2 applies to assets or liabilities for which there are inputs other than quoted prices included within Level 1 that are observable for the asset or liability such asquoted prices for similar assets or liabilities in active markets; quoted prices for identical assets or liabilities in markets with insufficient volume or infrequenttransactions (less active markets); or modelderived valuations in which significant inputs are observable or can be derived principally from, or corroborated by,observable market data.Level 3Level 3 applies to assets or liabilities for which there are unobservable inputs to the valuation methodology that are significant to the measurement of the fair valueof the assets or liabilities.F11Cash and cash equivalentsCash and cash equivalents primarily consist of cash, money market funds, investments in interest bearing demand deposit accounts, time deposits and highly liquidinvestments with original maturities of three months or less from the date of purchase and are stated at cost which approximates their fair value. The Group has nocash equivalents.Accounts receivable, net of allowanceAccounts receivable are recognized and carried at the original invoiced amount less an allowance for any potential uncollectible amounts. An estimate for doubtfuldebts is made when collection of the full amount is no longer probable. Bad debts are written off as incurred. The Group generally does not require collateral from itscustomers.The Group maintains allowances for doubtful accounts for estimated losses resulting from the failure of customers to make payments on time. The Group reviews theaccounts receivable on a periodic basis and makes specific allowances when there is doubt as to the collectability of individual balances. In evaluating thecollectability of individual receivable balances, the Group considers many factors, including the age of the balance, the customer’s payment history, its currentcreditworthiness and current economic trends.Property and equipment, netProperty and equipment are carried at cost less accumulated depreciation. Depreciation is calculated on a straightline basis over the following estimated usefullives:Wifi equipment– 3 yearsOffice equipment– 3 to 5 yearsVehicles– 5 yearsCosts of repairs and maintenance are expensed as incurred and asset improvements are capitalized. The gain or loss on disposal of property and equipment is thedifference between the net sales proceeds and the carrying amount of the relevant assets and is recognized in the consolidated income statement. When propertyand equipment are retired or otherwise disposed of, the cost and accumulated depreciation are removed from the accounts and any resulting gain or loss is includedin the results of operations for the respective period.Construction in progressAssets under construction are not depreciated until construction is completed and the assets are ready for their intended use.F12Intangible assetsIntangible assets with finite lives are amortized using the straightline method over the estimated economic lives.Intangible assets have weighted average economic lives from the date of purchase as follows:Software– 5 yearsTrademarks– 10 yearsGoodwillThe Group assesses goodwill for impairment in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”)subtopic 35020, Intangibles—Goodwill and Other: Goodwill (“ASC 35020”), which requires that goodwill to be tested for impairment at the reporting unit level atleast annually and more frequently upon the occurrence of certain events, as defined by ASC 35020.We have the option to assess qualitative factors first to determine whether it is necessary to perform the twostep test in accordance with ASC 35020. If we believe,as a result of the qualitative assessment, that it is morelikelythannot that the fair value of the reporting unit is less than its carrying amount, the twostepquantitative impairment test described below is required. Otherwise, no further testing is required. In the qualitative assessment, we consider primary factors such asindustry and market considerations, overall financial performance of the reporting unit, and other specific information related to the operations. In performing thetwostep quantitative impairment test, the first step compares the carrying amount of the reporting unit to the fair value of the reporting unit based on either quotedmarket prices of the ordinary shares or estimated fair value using a combination of the income approach and the market approach. If the fair value of the reportingunit exceeds the carrying value of the reporting unit, goodwill is not impaired and we are not required to perform further testing. If the carrying value of the reportingunit exceeds the fair value of the reporting unit, then we must perform the second step of the impairment test in order to determine the implied fair value of thereporting unit’s goodwill. The fair value of the reporting unit is allocated to its assets and liabilities in a manner similar to a purchase price allocation in order todetermine the implied fair value of the reporting unit goodwill. If the carrying amount of the goodwill is greater than its implied fair value, the excess is recognized asan impairment loss.In 2017, we performed a qualitative assessment for goodwill. Based on the requirements of ASC35020, we evaluated all relevant factors, including but not limited tomacroeconomic conditions, industry and market conditions, financial performance. We weighed all factors in their entirety and concluded that it was not morelikelythannot the fair value was less than the carrying amount of the reporting unit, and further impairment testing on goodwill was unnecessary as of December 31, 2017and 2016.F13Impairment or disposal of longlived assetsLonglived assets other than goodwill are included in impairment evaluations when events and circumstances exist that indicate the carrying value of these assetsmay not be recoverable. In accordance with FASB ASC 360, Property, Plant and Equipment, the Group assesses the recoverability of the carrying value of longlivedassets by first grouping its longlived assets with other assets and liabilities at the lowest level for which identifiable cash flows are largely independent of the cashflows of other assets and liabilities (the asset group) and, secondly, estimating the undiscounted future cash flows that are directly associated with and expected toarise from the use of and eventual disposition of such asset group. If the carrying value of the asset group exceeds the estimated undiscounted cash flows, theGroup recognizes an impairment loss to the extent the carrying value of the longlived asset exceeds its fair value. The Group determines fair value through quotedmarket prices in active markets or, if quotations of market prices are unavailable, through the performance of internal analysis using a discounted cash flowmethodology or obtains external appraisals from independent valuation firms. The undiscounted and discounted cash flow analyses are based on a number ofestimates and assumptions, including the expected period over which the asset will be utilized, projected future operating results of the asset group, discount rateand longterm growth rate.As of December 31, 2017 and 2016, the Group assessed the impairment of its longlived assets and concluded that there was no impairment indication.Business combinationWe account for business combinations using the purchase method of accounting in accordance with FASB ASC topic 805, Business combinations. The purchasemethod accounting requires that the consideration transferred be allocated to the assets, including separately identifiable assets and liabilities we acquired, basedon their estimated fair values. The consideration transferred in an acquisition is measured as the aggregate of the fair values at the date of exchange of the assetsgiven, liabilities incurred, and equity instruments issued as well as the contingent considerations and all contractual contingencies as of the acquisition date. Thecosts directly attributable to the acquisition are expensed as incurred. Identifiable assets, liabilities and contingent liabilities acquired or assumed are measuredseparately at their fair value as of the acquisition date, irrespective of the extent of any noncontrolling interests. The excess of (i) the total of cost of acquisition, fairvalue of the noncontrolling interests and acquisition date fair value of any previously held equity interest in the acquiree over (ii) the fair value of the identifiable netassets of the acquiree, is recorded as goodwill. If the cost of acquisition is less than the fair value of the net assets of the subsidiary acquired, the difference isrecognized directly in earnings.Revenue recognitionThe Group recognizes revenue in accordance with FASB ASC topic 605, Revenue Recognition (“ASC 605”). Revenue is recognized when the following four revenuerecognition criteria are met: (i) persuasive evidence of an arrangement exists, (ii) delivery has occurred or services have been provided, (iii) the selling price is fixed ordeterminable, and (iv) collectability is reasonably assured.F14Displaybased online advertising servicesThe Group provides displaybased online advertising services to customers by integrating text description, image and video, and displaying the advertisements in aprominent position of LuoKuang Application. The Group recognizes revenue in accordance with ASC 605, over the contractual term based on the agreements andconfirmation letters signed by both parties, commencing on the date the customer’s advertisement is displayed on the Group’s platform.Foreign currency translationThe functional and reporting currency of the Company and the Company’s subsidiaries domiciled in BVI and Hong Kong are the United States dollar (“U.S. dollar”).The financial records of the Company’s other subsidiaries and VIEs located in the PRC are maintained in their local currency, the Chinese Renminbi (“RMB”), whichare the functional currency of these entities.Monetary assets and liabilities denominated in currencies other than the functional currency are translated into the functional currency at the rates of exchangeruling at the balance sheet date. Transactions in currencies other than the functional currency during the year are converted into the functional currency at theapplicable rates of exchange prevailing when the transactions occurred. Transaction gains and losses are recognized in the statements of operations.The Company’s entities with a functional currency of RMB translate their operating results and financial position into the U.S. dollar, the Company’s reportingcurrency. Assets and liabilities are translated using the exchange rates in effect on the balance sheet date. Revenues, expenses, gains and losses are translatedusing the average rate for the year. Retained earnings and equity are translated using the historical rate. Translation adjustments are reported as cumulativetranslation adjustments and are shown as a separate component of other comprehensive income.Income taxesDeferred income taxes are recognized for temporary differences between the tax basis of assets and liabilities and their reported amounts in the financial statements,net operating loss carry forwards and credits, by applying enacted statutory tax rates applicable to future years. Deferred tax assets are reduced by a valuationallowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Current income taxesare provided for in accordance with the laws and regulations applicable to the Group as enacted by the relevant tax authorities.The impact of an uncertain income tax position on the income tax return must be recognized at the largest amount that is morelikelythan not to be sustained uponaudit by the relevant tax authorities. An uncertain income tax position will not be recognized if it has less than a 50% likelihood of being sustained. Additionally, theGroup classifies the interest and penalties, if any, as a component of the income tax expense. For years ended December 31, 2017 and 2016, the Group did not haveany material interest or penalties associated with tax positions nor did the Group have any significant unrecognized uncertain tax positions.F15Related partiesParties are considered to be related to the Company if the parties, directly or indirectly, through one or more intermediaries, control, are controlled by, or are undercommon control with the Company. Related parties also include principal owners of the Company, its management, members of the immediate families of principalowners of the Company and its management and other parties with which the Company may deal with if one party controls or can significantly influence themanagement or operating policies of the other to an extent that one of the transacting parties might be prevented from fully pursuing its own separate interests. TheCompany discloses all significant related party transactions.LeasesLeases have been classified as either capital or operating leases. Leases that transfer substantially all the benefits and risks incidental to the ownership of assets areaccounted for as if there was an acquisition of an asset and incurrence of an obligation at the inception of the lease. All other leases are accounted for as operatingleases wherein rental payments are expensed as incurred.When the Group is the lessor, minimum contractual rental from leases are recognized on a straightline basis over the noncancelable term of the lease. With respectto a particular lease, actual amounts billed in accordance with the lease during any given period may be higher or lower than the amount of rental revenue recognizedfor the period. Straightline rental revenue commences when the customer assumes control of the leased premises. Accrued straightline rents receivable representsthe amount by which straightline rental revenue exceeds rents currently billed in accordance with lease agreements. Contingent rental revenue is accrued when thecontingency is removed.Advertising costsAdvertising costs include expenses associated with direct marketing. All advertising costs are expensed as incurred and included in selling and marketing expenses.During the years ended December 31, 2017 and 2016, advertising costs amounted to $23,171,170 and $4,537,653, respectively.Comprehensive lossComprehensive loss includes net loss and foreign currency translation adjustments and is presented net of tax. The tax effect is nil for the two years endedDecember 31, 2017 and 2016 in the consolidated statements of comprehensive loss.Concentration of credit riskFinancial instruments that potentially expose the Group to concentrations of credit risk consist primarily of cash and accounts receivable. The Group places its cashwith financial institutions with highcredit rating and quality in China. For the year ended December 31, 2017, two customers accounted for over 10% of totalrevenue. For the year ended December 31, 2016, four customers accounted for over 10% of total revenue. At December 31, 2017 and 2016, the Group had credit riskexposure of uninured cash in banks of approximately $72,379 and $83,843, respectively.F16NOTE 3 – INCOME TAXAt December 31, 2017 and 2016, the Group had an unused net operating loss carryforwards of approximately $25,123,726 and $20,081,239, respectively, for income taxpurposes, which expires between 2018 to 2022 and between 2017 to 2021, respectively. At December 31, 2017 and 2016, these net operating losses carryforwards mayresult in future income tax benefits of approximately $5,043,944 and $4,008,863, respectively, however, because realization is uncertain at this time, a valuationallowance in the same amount has been established. Deferred income taxes reflect the net effects of temporary differences between the carrying amounts of assetsand liabilities for financial reporting purposes and the amounts used for income tax purposes.Significant components of the Group’s deferred tax liabilities and assets of December 31, 2017 and 2016 are as follows:December 31,December 31,20172016Deferred tax liabilities$$Deferred tax assetNet operating loss carryforward5,043,9444,008,863Valuation allowance(5,043,944)(4,008,863)Net deferred tax assetMovement of valuation allowanceDecember 31,2017December 31,2016At the beginning of the year$4,008,863$2,049,352Current year addition823,9702,159,518Expired(61,411)Exchange difference272,522(200,007)At the end of the year5,043,9444,008,863The Company is not subject to taxation in BVI under the current BVI law. Subsidiaries operating in the PRC are subject to PRC Enterprise Income Tax at the statutoryrate of 25% for the years ended December 31, 2017 and 2016. Subsidiaries operating in Hong Kong are subject to Hong Kong income taxes at a rate of 16.5% for theyears ended December 31, 2017 and 2016.F17A reconciliation of the income tax expense to the amount computed by applying the current statutory tax rate to the loss before income taxes in the consolidatedstatements of comprehensive income is as follows:December 31,December 31,20172016Loss before income taxes$(6,810,454)$(13,049,031)Tax loss at statutory tax rate(1,655,174)(3,386,822)Nondeductible items6,729,2551,712,857Nontaxable items(3,789,956)(674,189)Change in valuation allowance823,9702,159,518Tax benefits(2,108,095)188,636Income tax expensesNOTE 4 – ACCOUNTS RECEIVABLEAt December 31, 2017 and 2016, accounts receivable consisted of the following:December 31,December 31,20172016Accounts receivable$10,406,602$2,098,946Less: allowance for doubtful accounts676,977233,110$9,729,625$1,865,836NOTE 5 – OTHER RECEIVABLESAt December 31, 2017 and 2016, other receivables consisted of the following:December 31,2017December 31,2016Advances to suppliers$339,701$181,472VAT recoverable (1)3,033,0651,662,805Other5,048,189485,152$2,376,745$2,287,934(1)The balance of advanced VAT represents input VAT available for deducting the amount of VAT paid in the future. During the years ended December 31, 2017and 2016, the Group purchased a large amount of WiFi equipment for deployments, which generated related input VAT approved by tax authority.F18NOTE 6 – AMOUNTS DUE FROM RELATEDPARTIESAt December 31, 2017 and 2016, amounts due from related parties consisted of the following:Name of related partyDecember 31,2017December 31,2016C Media Limited (1)$11,760,692$Ya Tuo Ji International Consultancy (Beijing) Limited (2)204,412183,811(1)C Media Limited is the parent company of LK Technology. The Group expects the amounts due from the related party will be returned to the Group within oneyear.(2)Ya Tuo Ji is a company controlled by the spouse of a major shareholder of C Media Limited. The loan is unsecured, interestfree and repayable on January 5,2019.NOTE 7 – PROPERTY AND EQUIPMENTAt December 31, 2017 and 2016, property and equipment consisted of the following:December 31,December 31,Useful life20172016WiFi equipment3 Years$8,711,424$8,367,678Vehicles5 Years43,246Office and other equipment3 – 5 Years170,242416,434Constructioninprogress2,166,4522,652,28811,048,11811,479,646Less: accumulated depreciation(6,003,246)(3,708,619)$5,044,872$7,771,027For the years ended December 31, 2017 and 2016, depreciation expense amounted to $2,628,884 and $2,474,434, respectively, of which $2,423,655 and $2,194,582,respectively, was included in cost of revenue, $117,648 and $121,740, respectively, was included in selling and marketing expenses and the remainder was included ingeneral and administrative expense.Included in constructioninprogress are WiFI equipment under construction.F19NOTE 8 – GOODWILLIn September of 2014, Zhong Chuan Shi Xun acquired a 100% interest in Zhong Chuan Rui You for a consideration of $7,391,894 (RMB48,000,000). Zhong Chuan RuiYou is primarily engaged in on train WiFi business, deploying WiFi equipment on trains and providing passengers with entertainment and information services ontrains. The book value of the identifiable net assets of Zhong Chuan Rui You was $151,958 (RMB963,000) and a goodwill of $7,239,936 was recorded.NOTE 9 – ACCRUED LIABILITIES AND OTHER PAYABLESAt December 31, 2017 and 2016, accrued liabilities and other payables consisted of the following:December 31,December 31,20172016Deferred revenue$2,326,406$302,735Accrued payroll143,998316,458Other taxes payable3,544,469461,699Other payable852,384686,526Other loans6,095,6559,562,915$12,962,912$11,329,613Deferred revenue represents prepayments from customers for advertising service and is recognized as revenue when the advertising services are rendered.Other loans of $939,555 and $57,416, respectively, as of December 31, 2017 and 2016, are unsecured, bear daily interest at 0.04% and are repayable on demand.NOTE 10 – AMOUNTS DUE TO RELATED PARTIESAt December 31, 2017 and 2016, amounts due to related parties consisted of the following:December 31,December 31,Name of related party20172016Mr. Song Xuesong (“Mr. Song”) (1)$2,921,639$10,669,325C Media Limited (2)$$4,855,236Thumb Beijing Branch (3)$612,103$576,560Thumb Shenzhen Branch (3)$29,941$28,202(1) The Group’s CEO(2) C Media Limited, the parent company.(3) Thumb Beijing and Shenzhen Branch are controlled by the spouse of Mr. Song.Amounts due to related parties are shortterm in nature, noninterest bearing, unsecured and payable on demand.F20NOTE 11 – RETIREMENT AND WELFARE BENEFITSThe Group’s fulltime employees are entitled to staff welfare benefits including medical care, casualty, housing benefits, education benefits, unemployment insuranceand pension benefits through a PRC governmentmandated multiemployer defined contribution plan. The Group is required to accrue the employerportion forthese benefits based on certain percentages of the employees’ salaries. The total provision for such employee benefits of $170,227 and $353,033 during the yearsended December 31, 2017 and 2016, respectively, of which $23,392 and $30,455, respectively, was charged to cost of revenue, $48,957 and $97,408, respectively wascharged to selling and marketing expenses, $49,717 and $86,934, respectively, was charged to general and administrative expenses and $48,161 and $138,236,respectively was charged to research and development expenses. The Group is required to make contributions to the plan out of the amounts accrued for all staffwelfare benefits except for education benefits. The PRC government is responsible for the staff welfare benefits including medical care, casualty, housing benefits,unemployment insurance and pension benefits to be paid to these employees.NOTE 12 – STATUTORY RESERVESAs stipulated by the relevant law and regulations in the PRC, the Group’s subsidiaries and VIEs in the PRC are required to maintain a nondistributable statutorysurplus reserve. Appropriations to the statutory surplus reserve are required to be made at not less than 10% of profit after taxes as reported in the subsidiaries’statutory financial statements prepared under the PRC GAAP. Once appropriated, these amounts are not available for future distribution to owners or shareholders.Once the general reserve is accumulated to 50% of the subsidiaries’ registered capital, the subsidiaries can choose not to provide more reserves. The statutoryreserve may be applied against prior year losses, if any, and may be used for general business expansion and production and increase in registered capital of thesubsidiaries. The Group allocated $Nil to statutory reserves during the years ended December 31, 2017 and 2016, respectively. The statutory reserves cannot betransferred to the Company in the form of loans or advances and are not distributable as cash dividends except in the event of liquidation.NOTE 13 – COMMITMENTS AND CONTINGENCIESOperating leasesWe have entered into operating lease agreements primarily for our office spaces in China. These leases expire through 2018 and are renewable upon negotiation.Future minimum rental payment required under the Office Lease is as follows:Year ending December 31:Amount2018$122,138F21Contingencies(a) Litigation with Shanghai Fusheng Weier Intelligent Control Technology Co., Ltd.On January 22, 2016, Zhong Chuan Rui You and Shanghai Fusheng Weier Intelligent Control Technology Co., Ltd. (“Fusheng Weier”) signed a contract forequipment of $1,652,842 (RMB10,800,000). Since Zhong Chuan Rui You did not make the payments of $1,126,381 (RMB7,360,000) on the due dates, Fusheng Weierfiled a lawsuit against Zhong Chuan Rui You in Shanghai Xuhui District People’s Court on October 8, 2016. On March 9, 2017, Xuhui District People’s Court issuedthe verdict requiring Zhong Chuan Rui You to pay the overdue debts. In August 2017, C Media Limited made the payment of $512,075 (RMB3,346,000). Theremaining balance has been accrued in accounts payable. The payment schedule for the remaining balance is being negotiated by the two parties. On February 5,2018, a hearing was held adding Zhong Chuan Shi Xun as a defendant. The Group plans to settle the remaining balance within one year.(b) Lawsuit with Gansu Jinlun Culture Media Co., Ltd.On August 22, 2014, Zhong Chuan Rui You and Gansu Jinlun Culture Media Co., Ltd. (“Gansu Jinlun”) signed a “Lanzhou Railway Bureau Airconditioned Train WiFi Network System Advertising Operation Rights Agreement” for advertising on 72 trains of $1,467,880 (RMB9,604,633). Due to the dispute on the projectimplementation, Zhong Chuan Rui You did not pay the advertising fee. On August 23, 2017, Gansu Jinlun filed a lawsuit with Gansu Intermediate People’s Court. OnDecember 19, 2017, Gansu Intermediate People’s Court issued a verdict, ruling that Zhong Chuan Rui You settle the overdue advertising fee. Since only 18 out of 72trains have been installed with Wifi network system, Zhong Chuan Rui You disputed and appealed to the verdict. The next court trial date has not yet beendetermined.C Media and Gansu Jinlun are negotiating a potential settlement to resume the contract. According to the legal counsel, it is probable that the settlement will amountto approximately $459,000 (RMB3,000,000); therefore, this amount has been accrued in accounts payable.(c) Litigation with Shenzhen Hua Xun Fang Zhou Technology Co., Ltd.On June 16, 2015, Zhong Chuan Rui You signed a cooperation agreement with Shenzhen Hua Xun Fang Zhou Technology Co., Ltd. (“Shenzhen Hua Xun”) andXuesong Song, a major shareholder of C Media Limited. Pursuant to this agreement, Zhong Chuan Rui You procures equipment from Shenzhen Hua Xun. XuesongSong acts as a joint liability guarantor for the entire debts of Zhong Chuan Rui You under this agreement. As Zhong Chuan Rui You did not make the payments onthe due dates, Shenzhen Hua Xun filed a lawsuit with Shenzhen Baoan District People’s Court on May 31, 2016. On November 1, 2016, Zhong Chuan Rui You,Xuesong Song and Shenzhen Hua Xun reached a settlement in Shenzhen Baoan District People’s Court to settle $1,735,389 (RMB11,355,000) in four instalments. OnDecember 30, 2017, the debt was assigned to C Media Limited.NOTE 14 – SUBSEQUENT EVENTThe Group has evaluated all events or transactions that occurred after December 31, 2017 through May 25, 2018, which is the date that the financial statements wereavailable to be issued.F22EX1.1 2 f20f2017ex11_luokung.htm AMENDED AND RESTATED MEMORANDUM OF ASSOCIATION AND ARTICLES OF ASSOCIATION OF LUOKUNGTECHNOLOGY CORP., DATED AUGUST 20, 2018, AND AS CURRENTLY IN EFFECTExhibit 1.1BC NO: 1553620British Virgin IslandsThe BVI Business Companies Act, 2004(No. 16 of 2004)Memorandum of AssociationandArticles of AssociationofLuokung Technology Corp.Incorporated the 24th day of October, 2009Amended and Restated the 11th Day of December 2009Amended and Restated the 17th Day of December 2009Amended and Restated the 25th Day of March 2010Amended and Restated the 21st day of May 2018Amended and restated the 17 August 2018Amended and restated the 21 August 2018Portcullis (BVI) LimitedPortcullis Chambers4th Floor Ellen Skelton Building3076 Sir Francis Drake HighwayRoad Town, TortolaBritish Virgin IslandsTERRITORY OF THE BRITISH VIRGIN ISLANDSTHE BVI BUSINESS COMPANIES ACT, 2004(No. 16 of 2004)MEMORANDUM OF ASSOCIATIONOFLuokung Technology Corp.NAME1.The name of the Company is Luokung Technology Corp.TYPE OF COMPANY2.The Company is a company limited by shares.REGISTERED OFFICE3.The first Registered Office of the Company is the offices of Portcullis TrustNet (BVI) Limited, Portcullis TrustNet Chambers, P.O. Box 3444, Road Town,Tortola, British Virgin Islands, the office of the registered agent.3.1The current Registered Office of the Company is Portcullis Chambers, 4th Floor Ellen Skelton Building, 3076 SirFrancis Drake Highway, Road Town,Tortola, British Virgin Islands VG1110.REGISTERED AGENT4.The first Registered Agent of the Company is Portcullis TrustNet (BVI) Limited of Portcullis TrustNet Chambers, P.O. Box 3444, Road Town, Tortola,British Virgin Islands.4.1The current Registered Agent of the Company is Portcullis (BVI) Ltd of Portcullis Chambers, 4th Floor Ellen Skelton Building, 3076 Sir Francis DrakeHighway, Road Town, Tortola, British Virgin Islands VG1110.AUTHORISED NUMBER OF SHARES5.The Company is authorised to issue a maximum of 251,000,000 shares.CLASSES, NUMBER AND PAR VALUE OF SHARES6.As at the date of adoption of this memorandum, the Company is authorised to issue (a) 250,000,000 ordinary shares without par value (“OrdinaryShares”); and (b) 1,000,000 preferred shares without par value (“Preferred Shares”).FRACTIONAL SHARES7.The Company may issue fractions of a share and a fractional share shall have the same corresponding fractional liabilities, limitations, preferences,privileges, qualifications, restrictions, rights and other attributes of a whole share of the same class or series of shares.RIGHTS, PRIVILEGES, RESTRICTIONS AND CONDITIONS ATTACHING TO SHARES8.(1)Subject to the memorandum and articles of association (and, for greater clarity, without prejudice to any special rights conferred thereby on theholders of any other shares), an Ordinary Share of the Company confers on the holder;(a)the right to one vote at a meeting of the members of the Company or on any Resolution of Members;(b)the right to an equal share in any Distribution paid by the Company; and(c)the right to an equal share in the distribution of the surplus assets of the Company on a winding up.(2)Subject to the memorandum and articles of association (and, for greater clarity, without prejudice to any special rights conferred thereby on theholders of any other shares), a Preferred Share of the Company confers on the holder;(a)the right to 399 votes at a meeting of the members of the Company or on any Resolution of Members;(b)the right to an equal share in any Distribution paid by the Company;(c)the right to an equal share in the distribution of the surplus assets of the Company on its liquidation.(d)be freely transferable, in whole or in part, by Mr. Xuesong Song to any third party through one or more Private Transactions, subject toApplicable Law; and(e)be freely transferable, in whole or in part, by Mr. Xuesong Song to any third party through one or more Public Transactions, subject to ApplicableLaw and Automatic Conversion of such Preferred Share(s) into Ordinary Share(s).(3)The directors may at their discretion by resolution of directors redeem, purchase or otherwise acquire all or any of the shares in the Companysubject to the Articles..VARIATION OF CLASS RIGHTS9.If at any time the issued shares are divided into different classes or series of shares, the rights attached to any class or series (unless otherwise providedby the terms of issue of the shares of that class or series) may, whether or not the Company is being wound up, be varied with the consent in writing of theholders of not less than threefourths of the issued shares of that class or series and of the holders of not less than threefourths of the issued shares ofany other class or series of shares which may be affected by such variation.RIGHTS NOT VARIED BY THE ISSUE OF SHARES PARI PASSU10.The rights conferred upon the holders of the shares of any class issued with preferred or other rights shall not, unless otherwise expressly provided by theterms of issue of the shares of that class, be deemed to be varied by the creation or issue of further shares ranking pari passu therewith.CAPACITY AND POWERS11.Subject to the Act, any other British Virgin Islands legislation and paragraph 12 below the Company has, irrespective of corporate benefit:(a)full capacity to carry on or undertake any business or activity, do any act or enter into any transaction;(b)for the purposes of paragraph (a), full rights, powers and privileges; and(c)full powers to issue shares with preemptive rights, subject to the Articles.2LIMITATIONS ON THE COMPANY’S BUSINESS12.For the purposes of section 9(4) of the Act the Company may not;(a)carry on banking or trust business, unless it is licensed to do so under the Banks and Trust Companies Act, 1990;(b)carry on business as an insurance or reinsurance company, insurance agent or insurance broker, unless it is licensed under the Insurance Act1994;(c)carry on business of company management, unless it is licensed under the Company Management Act, 1990;(d)carry on the business of providing the registered office or the registered agent for companies incorporated in the British Virgin Islands;(e)carry on the business as a mutual fund, manager of mutual funds or administrator of mutual funds unless it is recognized or licenced as the casemay be under the Mutual Funds Act 1996; or(f)carry on any other business that gives rise to a licencing requirement under any law for the time being in force in the British Virgin Islands unlessit is licenced, regulated, recognised or otherwise approved pursuant to such law.REGISTERED SHARES AND PROHIBITION ON ISSUE OF BEARER SHARES13.Shares in the Company may only be issued as registered shares. The issue of shares to bearer is prohibited.PROHIBITION ON EXCHANGE AND CONVERSION OF REGISTERED SHARES TO BEARER SHARES14.The exchange or conversion of registered shares to bearer shares is prohibited.TRANSFER OF REGISTERED SHARES15.Subject to the provisions of the Articles the Company may upon receipt of an instrument of transfer enter the name of the transferee in the register ofmembers subject to the prior or simultaneous approval of the Company as evidenced by a resolution of directors or by a resolution of members. Subject toany resolution of the members to the contrary, the directors may resolve by resolution of directors to refuse or delay the registration of the transfer forreasons that shall be specified in the resolution of directors.AMENDMENT OF MEMORANDUM AND ARTICLES OF ASSOCIATION16.1The Company may amend its Memorandum or Articles by a resolution of members or by a resolution of directors provided that the directors shall not havethe power to amend the Memorandum or Articles;(a)to restrict the rights or powers of the members to amend the Memorandum or Articles;(b)to change the percentage of members required to pass a resolution to amend the Memorandum or Articles;(c)in circumstances where the Memorandum or Articles cannot be amended by the members; or(d)to Clauses 8, 9, 10 or this Clause 12.16.2No amendment may be made to Regulation 76 of the Articles unless approved by an affirmative vote of the holders of 66 2/3 percent or more of theoutstanding votes of the shares entitled to vote thereon.3DEFINITIONS17.The meanings of words in this Memorandum are as defined in the Articles.We, Portcullis TrustNet (BVI) Limited of Portcullis TrustNet Chambers, P.O. Box 3444, Road Town, Tortola, British Virgin Islands for the purpose ofincorporating a BVI Business Company under the laws of the British Virgin Islands hereby sign this Memorandum of Association the 27th day of October,2009.Incorporator/s/ Nicole WheatleyPortcullis TrustNet (BVI) LimitedPortcullis TrustNet ChambersP.O. Box 3444Road Town, TortolaBritish Virgin Islands(Sgd. Nicole Wheatley)4TERRITORY OF THE BRITISH VIRGIN ISLANDSTHE BVI BUSINESS COMPANIES ACT, 2004(No. 16 of 2004)ARTICLES OF ASSOCIATIONOFLuokung Technology Corp.PRELIMINARY1.In these Articles, if not inconsistent with the subject or context, the words and expressions standing in the first column of the following table shall bear themeanings set opposite them respectively in the second column thereof.WordsMeaningApplicable Lawall Laws, including those of a jurisdiction in or outside of the United States, applicable to the Private orPublic Transactions.Actthe BVI Business Companies Act, 2004 (No 16 of 2004.) including any modification, extension, reenactment or renewal thereof and any regulations made thereunder.Articlesthese Articles of Association as originally framed or as from time to time amended.Automatic Conversioneach Preferred Share shall be automatically converted at any time after issue and without the payment ofany additional sum into an equal number of fully paid Ordinary Shares upon the conclusion of anytransfer by Mr. Xuesong Song to any third party through one or more Public Transactions.Designated Stock Exchangeeither the Nasdaq National Stock Market, Inc. or such other exchange or quotation bureau on which, theCompany’s Securities are listed or traded; provided that until the Securities are listed on any such“Exchange” the rules of any such Designated Stock Exchange shall be inapplicable to these Articles.directora director of the Company.distributionin relation to a distribution by a company to a member, means(i)the direct or indirect transfer of an asset, other than the Company’s own shares, to or forthe benefit of the member or(ii)the incurring of a debt to or for the benefit of a member,in relation to shares held by a member, and whether by means of a purchase of an asset, the purchase,redemption or other acquisition of shares, a transfer of indebtedness or otherwise, and includes adividend.Independent Directora person who meets the then current requirements for “independence” of the applicable rules andregulations of the U.S. Securities and Exchange Commission and the Designated Stock Exchange.5member or shareholderin relation to the Company, means a person whose name is entered in the register of members as theholder of one or more shares, or fractional shares, in the Company.Memorandumthe Memorandum of Association of the Company as originally framed or as from time to time amended.Mr. Xuesong Songthe founder, a director and Chairman of LK Technology Ltd.Ordinary Sharesissued or unissued ordinary shares of no par value of the Company having the rights, preferences andprivileges set out in the MemorandumPersonAn individual, a corporation, a trust, trustee, the estate of a deceased individual, a partnership or anunincorporated association of persons.Preferred Sharesissued or unissued preferred shares of no par value of the Company having the rights, preferences andprivileges set out in the MemorandumPrivate Transactionstransactions that are not considered as a Public Transaction.Public Transactionstransactions through any national securities exchanges and/or through the automated quotation systemincluding but not limited to NASDAQ, NYSE (including NYSE American) or OTC Markets, or anytransaction executed by the broker or with a market maker.Related Party(a) any director, officer and employee of the Company; (b) any family member of such director, officer andemployee; and (c) any entity (e.g. a corporation, partnership, or trust) controlled by or set up for thebenefit of a director, officer or employee, or a family member of such director, officer or employee.Relevant SystemA facility for the electronic transfer of uncertificated securities administered by The Depository TrustCompany or such other Person regulated by the SEC.resolution of directors(a)A resolution approved at a duly convened and constituted meeting of directors of the Companyor of a committee of directors of the Company by the affirmative vote of a simple majority of thedirectors present at the meeting who voted and did not abstain; or(b)a resolution consented to in writing by a simple majority of the directors or of all members of thecommittee, as the case may be;except that where a director is given more than one vote, he shall be counted by the number ofvotes he casts for the purpose of establishing a majority.resolution of membersSubject to the provisions of the Memorandum and Articles means:(a)A resolution approved at a duly convened and constituted meeting of the members of theCompany by the affirmative vote of(i)a majority of in excess of 50% of the votes of the shares entitled to vote and voting onthe resolution, or(ii)a majority of in excess of 50% of the votes of each class or series of shares entitled tovote as a class or series and voting on the resolution and a majority of in excess of 50%of the votes of the remaining shares entitled to vote and voting on the resolution; or6(b)a resolution consented to in writing by(i)an absolute majority of the votes of shares entitled to vote thereon, or(ii)an absolute majority of the votes of each class or series of shares entitled to votethereon as a class or series and of an absolute majority of the votes of the remainingshares entitled to vote thereon.SealAny Seal which has been duly adopted as the common seal of the Company.SECThe United States Securities and Exchange Commission.Securitiesshares and debt obligations of every kind, and options, warrants and rights to acquire shares, or debtobligations.SharesOrdinary Shares and/or Preferred Shares, as the case may be.solvency testa company satisfies the solvency test if;(i)the value of the company’s assets exceeds its liabilities, and(ii)the company is able to pay its debts as they fall due.treasury sharesshares in the Company that were previously issued but were repurchased, redeemed or otherwiseacquired by the Company and not cancelled.2.“Written” or any term of like import includes words typewritten, printed, painted, engraved, lithographed, photographed or represented or reproduced byany mode of reproducing words in a visible form, including telex, facsimile, telegram, cable or other form of writing produced by electronic communication.3.Save as aforesaid any words or expressions defined in the Act shall bear the same meaning in these Articles.4.Whenever the singular or plural number, or the masculine, feminine or neuter gender is used in these Articles, it shall equally, where the context admits,include the others.5.A reference in these Articles to voting in relation to shares shall be construed as a reference to voting by members holding the shares except that it is thevotes allocated to the shares that shall be counted and not the number of members who actually voted and a reference to shares being present at a meetingshall be given a corresponding construction.6.A reference to money in these Articles is, unless otherwise stated, a reference to the currency in which shares in the Company shall be issued according tothe provisions of the Memorandum.7REGISTERED SHARES7.Every member holding registered shares in the Company shall be entitled to a certificate signed by a director or officer of the Company or such otherperson who may be authorised from time to time by resolution of directors or under the Seal, with or without the signature of any director of the Company,specifying the share or shares held by him and the signature of the director or officer or person so authorised and the Seal may be facsimiles.8.Any member receiving a share certificate for registered shares shall indemnify and hold the Company and its directors and officers harmless from any lossor liability which it or they may incur by reason of any wrongful or fraudulent use or representation made by any person by virtue of the possessionthereof. If a share certificate for registered shares is worn out or lost it may be renewed on production of the worn out certificate or on satisfactory proof ofits loss together with such indemnity as may be required by a resolution of directors.9.If several persons are registered as joint holders of any shares, any one of such persons may give an effectual receipt for any distribution payable inrespect of such shares.10.Nothing in these Articles shall require title to any shares or other Securities to be evidenced by a certificate if the Act and the rules of the Designated StockExchange permit otherwise.SHARES AND ISSUED SHARES11.Subject to the provisions of these Articles and, if applicable, the rules of the Designated Stock Exchange, and any resolution of members, the directors ofthe Company may, without limiting or affecting any rights previously conferred on the holders of any existing shares or class or series of shares, offer, allot,grant options over or otherwise dispose of shares to such persons, at such times and upon such terms and conditions as the Company may by resolutionof directors determine. The directors shall not issue more shares than the maximum number provided for in the Memorandum.12.The Company may issue fully paid, partly paid or nil paid shares as well as bonus shares. A partly paid or nil paid share or a share issued for a promissorynote or other written obligation for payment of a debt may be issued subject to forfeiture in the manner prescribed in these Articles.13.Shares in the Company may be issued for consideration in any form, including money, a promissory note or other obligation to contribute money orproperty, real property, personal property (including goodwill and knowhow) services rendered or a contract for future services and the amount of suchconsideration shall be determined by resolution of directors, except that in the case of shares with par value, the amount shall not be less than the parvalue, and in the absence of fraud the decision of the directors as to the value of the consideration received by the Company in respect of the issue isconclusive unless a question of law is involved.14.Before issuing shares for a consideration other than money, the directors shall pass a resolution stating;(a)the amount to be credited for the issue of the shares;(b)their determination of the reasonable present cash value of the nonmoney consideration for the issue; and(c)that, in their opinion, the present cash value of the nonmoney consideration for the issue is not less than the amount to be credited for the issueof the shares.15.A share issued by the Company upon conversion of, or in exchange for, another share or a debt obligation or other security in the Company, shall betreated for all purposes as having been issued for money equal to the consideration received or deemed to have been received by the Company in respectof the other share, debt obligation or security.16.Treasury shares may be disposed of by the Company on such terms and conditions (not otherwise inconsistent with these Articles) as the Company mayby resolution of directors determine.17.Subject to these Articles, the Company may purchase, redeem or otherwise acquire and hold its own shares save that the Company may not purchase,redeem or otherwise acquire its own shares without the consent of the member whose shares are to be purchased, redeemed or otherwise acquired unlessthe Company is permitted by the Act or any other provision in the Memorandum or Articles to purchase, redeem or otherwise acquire the shares withouttheir consent.818.No purchase, redemption or other acquisition of shares shall be made unless the directors determine by resolution of the directors that immediately after thepurchase, redemption or other acquisition the value of the Company’s assets will exceed its liabilities and the Company will be able to pay its debts as theyfall due.19.Sections 60 (Process for acquisition of own shares), 61 (Offer to one or more shareholders) and 62 (Shares redeemed otherwise than at the option ofcompany) of the Act shall not apply to the Company.20.A determination by the directors under Article 18 is not required;(a)the Company redeems a share or shares pursuant to a right of a member to have his shares redeemed or to have his shares exchanged for moneyor other property of the Company; or(b)by virtue of the provisions of Section 179 of the Act.21.Shares that the Company purchases, redeems or otherwise acquires pursuant to Article 17 may be cancelled or held as treasury shares except to the extentthat such shares are in excess of 80 percent of the issued shares of the Company in which case they shall be cancelled but they shall be available forreissue.22.Shares in the Company shall only be held as treasury shares where the directors of the Company resolve as such and the number of shares acquired, whenaggregated with shares of the same class already held by the Company as treasury shares, does not exceed 50% of the shares of that class previouslyissued by the Company, excluding shares that have been cancelled. All rights and obligations attaching to a treasury share are suspended and shall not beexercised by or against the Company while it holds the share as a treasury share. Treasury shares may be reissued by the Company as new shares.23.The Company shall keep a register of members containing;(a)the names and addresses of the persons who hold registered shares in the Company;(b)the number of each class and series of registered shares held by each member;(c)the date on which the name of each member was entered in the register of members;(d)the date on which any person ceased to be a member; and(e)such other information as may be prescribed pursuant to the Act.24.The register of members may be in any such form as the directors may approve but if it is in magnetic, electronic or other data storage form, the companymust be able to produce legible evidence of its contents.25.The original or a copy of the register of members shall be kept at the registered office of the Company or at the office of the registered agent of theCompany.26.A share is deemed to be issued when the name of the member is entered in the register of members.27.Subject to the Act and the rules of the Designated Stock Exchange, the board of directors without further consultation with the holders of any shares orSecurities may resolve that any class or series of shares or other Securities from time to time in issue or to be issued (including shares in issue at the date ofthe adoption of these Articles) may be issued, held, registered and converted to uncertificated form.28.Conversion of shares held in certificated form into shares held in uncertificated form, and vice versa, may be made in such manner as the board of directors,in its absolute discretion, may think fit. The Company or any duly authorised transfer agent (a “Transfer Agent”) shall enter on the register of membershow many shares are held by each member in uncertificated form and in certificated form and shall maintain the register of members. Notwithstanding anyprovision of these Articles, a class or series of shares shall not be treated as two classes by virtue only of that class or series comprising both certificatedshares and uncertificated Shares or as a result of any provision of these Articles which apply only in respect of certificated or uncertificated shares.9MORTGAGES AND CHARGES OF REGISTERED SHARES29.Members may mortgage or charge their registered shares in the Company with such mortgage or charge being evidenced in writing and signed by, or withthe authority of the registered holder of a registered share to which the mortgage or charge relates. The Company shall give effect to the terms of any validmortgage or charge except insofar as it may conflict with any requirements herein contained for consent to the transfer of shares.30.In the case of the mortgage or charge of registered shares there may be entered in the share register of the Company at the request of the registered holderof such shares(a)a statement that the shares are mortgaged or charged;(b)the name of the mortgagee or chargee; and(c)the date on which the aforesaid particulars are entered in the share register.31.Where particulars of a mortgage or charge are entered in the register of members, such particulars shall be cancelled(a)with the written consent of the named mortgagee or chargee or anyone authorized to act on his behalf; or(b)upon evidence satisfactory to the directors of the discharge of the liability secured by the mortgage or charge and the issue of such indemnities asthe directors shall consider necessary or desirable.32.Whilst particulars of a mortgage or charge over registered shares are entered in the register of members pursuant to the preceding articles no transfer ofany share comprised therein shall be effected without the written consent of the named mortgagee or chargee or anyone authorized to act on his behalf.FORFEITURE33.When shares not fully paid on issue or issued for a promissory note or other written obligation for payment of a debt have been issued subject toforfeiture, the following provisions shall apply.34.Written notice specifying a date for payment to be made and the shares in respect of which payment is to be made shall be served on the member whodefaults in making payment pursuant to a promissory note or other written obligations to pay a debt.35.The written notice specifying a date for payment shall(a)name a further date not earlier than the expiration of 14 days from the date of service of the notice on or before which payment required by thenotice is to be made; and(b)contain a statement that in the event of nonpayment at or before the time named in the notice the shares, or any of them, in respect of whichpayment is not made will be liable to be forfeited.36.Where a written notice has been issued and the requirements of the notice have not been complied with within the prescribed time, the directors may at anytime before tender of payment forfeit and cancel the shares to which the notice relates.37.The Company is under no obligation to refund any moneys to the member whose shares have been forfeited and cancelled pursuant to these provisions.Upon forfeiture and cancellation of the shares the member is discharged from any further obligation to the Company with respect to the shares forfeitedand cancelled.10LIEN38.The Company shall have a first and paramount lien on every share issued for a promissory note or for any other binding obligation to contribute money orproperty or any combination thereof to the Company, and the Company shall also have a first and paramount lien on every share standing registered in thename of a member, whether singly or jointly with any other person or persons, for all the debts and liabilities of such member or his estate to the Company,whether the same shall have been incurred before or after notice to the Company of any interest of any person other than such member, and whether thetime for the payment or discharge of the same shall have actually arrived or not, and notwithstanding that the same are joint debts or liabilities of suchmember or his estate and any other person, whether a member of the Company or not. The Company’s lien on a share shall extend to all distributionspayable thereon. The directors may at any time either generally, or in any particular case, waive any lien that has arisen or declare any share to be wholly orin part exempt from the provisions of this Article.39.In the absence of express provisions regarding sale in the promissory note or other binding obligation to contribute money or property, the Company maysell, in such manner as the directors may by resolution of directors determine, any share on which the Company has a lien, but no sale shall be made unlesssome sum in respect of which the lien exists is presently payable nor until the expiration of twentyone days after a notice in writing, stating and demandingpayment of the sum presently payable and giving notice of the intention to sell in default of such payment, has been served on the holder for the timebeing of the share.40.The net proceeds of the sale by the Company of any shares on which it has a lien shall be applied in or towards payment of discharge of the promissorynote or other binding obligation to contribute money or property or any combination thereof in respect of which the lien exists so far as the same ispresently payable and any residue shall (subject to a like lien for debts or liabilities not presently payable as existed upon the share prior to the sale) bepaid to the holder of the share immediately before such sale. For giving effect to any such sale the directors may authorize some person to transfer theshare sold to the purchaser thereof. The purchaser shall be registered as the holder of the share and he shall not be bound to see to the application of thepurchase money, nor shall his title to the share be affected by any irregularity or invalidity in the proceedings in reference to the sale.TRANSFER OF SHARES41.Registered shares in the Company are transferred by a written instrument of transfer signed by the transferor and containing the name and address of thetransferee. The instrument of transfer shall be signed by the transferee if registration as a holder of the share shall impose a liability to the Company on thetransferee. The instrument of transfer of a registered share shall be sent to the Company for registration.42.The board of directors may resolve that interests in shares in the form of depositary receipts may be transferred or otherwise dealt with in accordance withthe regulations and practices instituted by the operator of the Relevant System and any holder of interests in shares shall be entitled to transfer suchinterests by means of such Relevant System and the operator of the Relevant System shall act as agent of the holders of such interests for the purposes ofthe transfer of those interests.43.The register of members may be closed at such times and for such periods as the board of directors may from time to time determine, upon notice beinggiven by advertisement in such newspapers as may be required by the Act and the practice of the Designated Stock Exchange.44.The transfer of a registered share is effective when the name of the transferee is entered on the register of members.45.If the directors of the Company are satisfied that an instrument of transfer relating to shares has been signed but that the instrument has been lost ordestroyed, they may resolve;(a)to accept such evidence of the transfer of the shares as they consider appropriate; and(b)that the transferee’s name should be entered in the register of members notwithstanding the absence of the instrument of transfer.46.The Company must on the receipt of an instrument of transfer from the transferor or transferee of a registered share in the Company enter the name of thetransferee of the share in the register or members unless the directors, if permitted by the Memorandum or these Articles, resolve by resolution of directorsto refuse or delay the registration of the transfer for reasons that shall be specified in the resolution of directors.11TRANSMISSION OF SHARES47.The personal representative of a deceased member may transfer a share even though the personal representative is not a member at the time of the transfer.48.The personal representative, executor or administrator of a deceased member, the guardian of an incompetent member or the trustee of a bankrupt membershall be the only person recognized by the Company as having any title to his share but they shall not be entitled to exercise any rights as a member of theCompany until they have proceeded as set forth in the next following three Articles.49.The production to the Company of any document which is evidence of probate of the will, or letters of administration of the estate, or confirmation asexecutor, of a deceased member or of the appointment of a guardian of an incompetent member or the trustee of a bankrupt member shall be accepted by theCompany even if the deceased, incompetent or bankrupt member is domiciled outside the British Virgin Islands if the document evidencing the grant ofprobate or letters of administration, confirmation as executor, appointment as guardian or trustee in bankruptcy is issued by a foreign court which hadcompetent jurisdiction in the matter. For the purpose of establishing whether or not a foreign court had competent jurisdiction in such a matter the directorsmay obtain appropriate legal advice. The directors may also require an indemnity to be given by the executor, administrator, guardian or trustee inbankruptcy.50.The Company may enter in the register of members the name of any person becoming entitled by operation of law or otherwise to a share or shares inconsequence of the death, incompetence or bankruptcy upon such evidence being produced as may reasonably be required by the directors.51.Any person who has become entitled to a share or shares in consequence of the death, incompetence or bankruptcy of any member may, instead of beingregistered himself, request in writing that some person to be named by him be registered as the transferee of such share or shares and such request shalllikewise be treated as if it were a transfer.52.What amounts to incompetence on the part of a person is a matter to be determined by the court having regard to all the relevant evidence and thecircumstances of the case.REDUCTION OR INCREASE IN AUTHORISED AND UNISSUED SHARES48.The Company may amend the Memorandum to increase or reduce the maximum number of shares the Company is authorised to issue and may in respect ofany unissued shares increase or reduce the number of such shares, or effect any combination of the foregoing.49.The Company may(1)(a) divide its shares, including issued shares, into a larger number of shares; or (b) combine its shares, including issued shares, into a smallernumber of shares.(2)A division or combination of shares, including issued shares, of a class or series shall be for a larger or smaller number, as the case may be, ofshares in the same class or series.(3)A company shall not divide its shares under subsection (1)(a) or (2) if it would cause the maximum number of shares that the Company isauthorised to issue by its memorandum to be exceeded.(4)Where shares are divided or combined under this article, the aggregate par value of the new shares must be equal to the aggregate par value of theoriginal shares.MEETINGS AND CONSENTS OF MEMBERS50.The directors of the Company may convene meetings of the members of the Company at such times and in such manner and places within or outside theBritish Virgin Islands as the directors consider necessary or desirable. The Company may hold an annual general meeting, but shall not (unless required bythe applicable rules of the Designated Stock Exchange for so long as the Company’s Securities are listed or traded on the Designated Stock Exchange) beobliged to hold an annual general meeting.51.Upon the written request of members holding 30 percent or more of the outstanding voting shares in the Company the directors shall convene a meeting ofmembers.1252.The directors shall give not less than 7 days notice of meetings of members to those persons whose names on the date the notice is given appear asmembers in the share register of the Company and are entitled to vote at the meeting.53.The directors may fix the date notice is given of a meeting of members as the record date for determining those shares that are entitled to vote at themeeting.54.A meeting of members may be called on short notice:(a)if members holding not less than 90 percent of the total number of shares entitled to vote on all matters to be considered at the meeting, or 90percent of the votes of each class or series of shares where members are entitled to vote thereon as a class or series together with not less than a90 percent majority of the remaining votes, have agreed to short notice of the meeting, or(b)if all members holding shares entitled to vote on all or any matters to be considered at the meeting have waived notice of the meeting and for thispurpose presence at the meeting shall be deemed to constitute waiver.55.The inadvertent failure of the directors to give notice of a meeting to a member, or the fact that a member has not received notice, does not invalidate themeeting.56.A member may be represented at a meeting of members by a proxy who may speak and vote on behalf of the member.57.The instrument appointing a proxy shall be produced at the place appointed for the meeting before the time for holding the meeting at which the personnamed in such instrument proposes to vote.58.An instrument appointing a proxy shall be in substantially the following form or such other form as the Chairman of the meeting shall accept as properlyevidencing the wishes of the member appointing the proxy.(Name of Company)I/Webeing a member of the aboveCompany withshares HEREBY APPOINTofor failing himofto be my/our proxy to vote for me/us at the meeting of members to be held on the dayofand at any adjournment thereof.(Any restrictions on voting to be inserted here.)Signed this day ofMember59.The following shall apply in respect of joint ownership of shares:a.if two or more persons hold shares jointly each of them may be present in person or by proxy at a meeting of members and may speak as a member;b.if only one of the joint owners is present in person or by proxy he may vote on behalf of all joint owners, andc.if two or more of the joint owners are present in person or by proxy they must vote as one.60.A member shall be deemed to be present at a meeting of members if he participates by telephone or other electronic means and all members participating inthe meeting are able to hear each other.61.A meeting of members is duly constituted if, at the commencement of the meeting, there are present in person or by proxy not less than 50 percent of thevotes of the shares or class or series of shares entitled to vote on resolutions of members to be considered at the meeting. If a quorum be present,notwithstanding the fact that such quorum may be represented by only one person then such person may resolve any matter and a certificate signed bysuch person accompanied where such person be a proxy by a copy of the proxy form shall constitute a valid resolution of members.1362.If within two hours from the time appointed for the meeting a quorum is not present, the meeting, if convened upon the requisition of members, shall bedissolved; in any other case it shall stand adjourned to the next business day at the same time and place or to such other time and place as the directorsmay determine, and if at the adjourned meeting there are present within one hour from the time appointed for the meeting in person or by proxy not lessthan one third of the votes of the shares or each class or series of shares entitled to vote on the resolutions to be considered by the meeting, those presentshall constitute a quorum but otherwise the meeting shall be dissolved.63.At every meeting of members, the Chairman of the Board of Directors shall preside as chairman of the meeting. If there is no Chairman of the Board ofDirectors or if the Chairman of the Board of Directors is not present at the meeting, the members present shall choose some one of their number to be thechairman. If the members are unable to choose a chairman for any reason, then the person representing the greatest number of voting shares present inperson or by prescribed form of proxy at the meeting shall preside as chairman failing which the oldest individual member or representative of a memberpresent shall take the chair.64.The chairman may, with the consent of the meeting, adjourn any meeting from time to time, and from place to place, but no business shall be transacted atany adjourned meeting other than the business left unfinished at the meeting from which the adjournment took place.65.At any meeting of the members the chairman shall be responsible for deciding in such manner as he shall consider appropriate whether any resolution hasbeen carried or not and the result of his decision shall be announced to the meeting and recorded in the minutes thereof. If the chairman shall have anydoubt as to the outcome of any resolution put to the vote, he shall cause a poll to be taken of all votes cast upon such resolution, but if the chairman shallfail to take a poll then any member present in person or by proxy who disputes the announcement by the chairman of the result of any vote mayimmediately following such announcement demand that a poll be taken and the chairman shall thereupon cause a poll to be taken. If a poll is taken at anymeeting, the result thereof shall be duly recorded in the minutes of that meeting by the chairman.66.Any person other than an individual shall be regarded as one member and subject to the specific provisions hereinafter contained for the appointment ofrepresentatives of such persons the right of any individual to speak for or represent such member shall be determined by the law of the jurisdiction where,and by the documents by which, the person is constituted or derives its existence. In case of doubt, the directors may in good faith seek legal advice fromany qualified person and unless and until a court of competent jurisdiction shall otherwise rule, the directors may rely and act upon such advice withoutincurring any liability to any member.67.Any person other than an individual which is a member of the Company may by resolution of its directors or other governing body authorize such personas it thinks fit to act as its representative at any meeting of the Company or of any class of members of the Company, and the person so authorized shall beentitled to exercise the same powers on behalf of the person which he represents as that person could exercise if it were an individual member of theCompany.68.The chairman of any meeting at which a vote is cast by proxy or on behalf of any person other than an individual may call for a notarially certified copy ofsuch proxy or authority which shall be produced within 7 days of being so requested or the votes cast by such proxy or on behalf of such person shall bedisregarded.69.Directors of the Company may attend and speak at any meeting of members of the Company and at any separate meeting of the holders of any class orseries of shares in the Company.70.An action that may be taken by the members at a meeting may also be taken by a resolution of members consented to in writing or by telex, telegram, cable,facsimile or other written electronic communication, without the need for any notice, but if any resolution of members is adopted otherwise than by theunanimous written consent of all members, a copy of such resolution shall forthwith be sent to all members not consenting to such resolution. The consentmay be in the form of counterparts, each counterpart being signed by one or more members.14DIRECTORS71.The first directors of the Company shall be appointed by the first registered agent of the Company and thereafter the directors shall be appointed byresolution of members, subject to Article 78, for such term as the members determine. A person shall not be appointed as a director unless he hasconsented in writing to be a director.72.The minimum number of directors shall be one and the maximum number shall be 20. Unless otherwise determined by the Company in a meeting ofshareholders and subject to the requirements of the Memorandum, the directors may by a Resolution of Directors, amend this Regulation 72 to change thenumber of directors. For as long as Securities of the Company are listed or traded on the Designated Stock Exchange, the directors shall include suchnumber of Independent Directors as applicable law, rules or regulations of the Designated Stock Exchange may require for a foreign private issuer as longas the Company is a foreign private issuer.73.Each director shall hold office for the term, if any, fixed by resolution of members or until his earlier death, resignation or removal.74.Where the Company has only one member who is an individual and that member is also the sole director of the Company, that sole member/director may, byinstrument in writing, nominate a person who is not disqualified from being a director of the Company under section 111(1) of the Act as a reserve directorof the Company to act in the place of the sole director in the event of his death.75.The nomination of a person as a reserve director of the Company ceases to have effect if;a.before the death of the sole member/director who nominated him;(i)he resigns as reserve director, or(ii)the sole member/director revokes the nomination in writing; orb.the sole member/director who nominated him ceases to be the sole member/director of the Company for any reason other than his death.76.A director may be removed from office, with or without cause, by a resolution of directors or a resolution of members. For the purposes of this Regulation76, “cause” means the willful and continuous failure by a director to substantially perform his duties to the Company (other than any such failure resultingfrom incapacity due to physical or mental illness) or the willful engaging by the director in gross misconduct materially and demonstrably injurious to theCompany. If a director is removed from office without cause by a resolution of the members, for the purposes of this Regulation, the resolution of memberswill require the affirmative vote of the holders of 66 2/3 percent or more of the outstanding votes of the shares entitled to vote thereon.77.A director may resign his office by giving written notice of his resignation to the Company and the resignation shall have effect from the date the notice isreceived by the Company or from such later date as may be specified in the notice. A director of the Company shall resign forthwith if he is, or becomes,disqualified to act as a director under the Act.78.The directors may at any time by resolution of directors appoint any person to be a director to fill a vacancy. There is a vacancy if a director dies orotherwise ceases to hold office as a director prior to the expiration of his term of office, where his term of office was fixed upon his appointment. Thedirectors may not appoint a director to fill a vacancy for a term exceeding the term that remained when the person who has ceased to be a director left orotherwise ceased to hold office.79.The Company shall keep a register of directors containing:a.the names and addresses of the persons who are directors of the Company or who have been nominated as reserve directors of the Company;b.the date on which each person whose name is entered in the register was appointed as a director of the Company or nominated as a reservedirector of the Company;c.the date on which each person named as a director ceased to be a director of the Company;d.the date on which the nomination of any person nominated as a reserve director ceased to have effect; ande.such other information as may be prescribed pursuant to the Act.1580.The original or a copy of any register of directors shall be kept at the office of the registered agent of the Company.81.The register of directors may be in any such form as the directors may approve but if it is in magnetic, electronic or other data storage form, the companymust be able to produce legible evidence of its contents.82.With the prior or subsequent approval by a resolution of members, the directors may, by a resolution of directors, fix the emoluments of directors withrespect to services to be rendered in any capacity to the Company.83.A director shall not require a share qualification and may be an individual or a company.POWERS OF DIRECTORS84.The business and affairs of the Company shall be managed by the directors who may pay all expenses incurred preliminary to and in connection with theformation and registration of the Company and may exercise all such powers of the Company as are not by the Act or by the Memorandum or theseArticles required to be exercised by the members of the Company, subject to any delegation of such powers as may be authorized by these Articles and tosuch requirements as may be prescribed by a resolution of members; but no requirement made by a resolution of members shall prevail if it be inconsistentwith these Articles nor shall such requirement invalidate any prior act of the directors which would have been valid if such requirement had not been made.Notwithstanding anything in Section 175 of the Act the directors shall have the power to sell, transfer, lease, exchange or otherwise dispose of more thanfifty percent of the assets of the Company without submitting a proposal to or obtaining the consent of the members of the Company.85.If the Company is a whollyowned subsidiary of a holding company a director may when exercising powers or performing duties as a director act in amanner which he believes is in the best interests of the holding company even though it may not be in the best interests of the Company.86.The directors may, by a resolution of directors, appoint any person, including a person who is a director, to be an officer or agent of the Company. Theresolution of directors appointing an agent may authorize the agent to appoint one or more substitutes or delegates to exercise some or all of the powersconferred on the agent by the Company.87.Every officer or agent of the Company has such powers and authority of the directors, including the power and authority to affix the Seal, as are set forth inthese Articles or in the resolution of directors appointing the officer or agent, except that no agent has any power or authority with respect to thefollowing;a.to amend the memorandum or articles;b.to change the registered office or agent;c.to designate committees of directors;d.to delegate powers to a committee of directors;e.to appoint or remove directors;f.to appoint or remove an agent;g.to fix emoluments of directors;h.to approve a plan of merger, consolidation or arrangement;i.to make a declaration of solvency for the purposes of section 198(1)(a) of the Act or to approve a liquidation plan;j.to make a determination under section 57(1) of the Act that the company will, immediately after a proposed distribution, satisfy the solvency test;ork.to authorise the Company to continue as a company incorporated under the laws of a jurisdiction outside the British Virgin Islands.1688.Any director which is a body corporate may appoint any person its duly authorized representative for the purpose of representing it at meetings of theBoard of Directors or with respect to unanimous written consents.89.The continuing directors may act notwithstanding any vacancy in their body, save that if their number is reduced to their knowledge below the numberfixed by or pursuant to these Articles as the necessary quorum for a meeting of directors, the continuing directors or director may act only for the purposeof appointing directors to fill any vacancy that has arisen or for summoning a meeting of members.90.The directors may by resolution of directors exercise all the powers of the Company to borrow money and to mortgage or charge its undertakings andproperty or any part thereof, to issue debentures, debenture stock and other securities whenever money is borrowed or as security for any debt, liability orobligation of the Company or of any third party.91.All cheques, promissory notes, drafts, bills of exchange and other negotiable instruments and all receipts for moneys paid to the Company, shall be signed,drawn, accepted, endorsed or otherwise executed, as the case may be, in such manner as shall from time to time be determined by resolution of directors.92.The Company shall keep a register of all relevant charges created by the Company showing:a.if the charge is a charge created by the Company, the date of its creation or if the charge is existing on property acquired by the Company, the dateon which the property was acquired;b.a short description of the liability secured by the charge;c.a short description of the property charged;d.the name and address of the trustee for the security, or if there is no such trustee the name and address of the chargee;e.unless the charge is a security to bearer, the name and address of the holder of the charge;f.details of any prohibition or restriction , if any, contained in the instrument creating the charge on the power of the company to create any futurecharge ranking in priority to or equally with the charge; andg.such other information as may be prescribed pursuant to the Act.93.The original or a copy of the register of charges shall be kept at the registered office of the Company or at the office of the registered agent of the Company.PROCEEDINGS OF DIRECTORS94.The directors of the Company or any committee thereof may meet at such times and in such manner and places within or outside the British Virgin Islandsas the directors may determine to be necessary or desirable. Any one or more directors may convene a meeting of directors.95.A director shall be deemed to be present at a meeting of directors if he participates by telephone or other electronic means and all directors participating inthe meeting are able to hear each other.96.A director shall be given not less than 3 days notice of meetings of directors, but a meeting of directors held without 3 days notice having been given to alldirectors shall be valid if all the directors entitled to vote at the meeting who do not attend, waive notice of the meeting and for this purpose, the presenceof a director at a meeting shall constitute waiver on his part. The inadvertent failure to give notice of a meeting to a director, or the fact that a director hasnot received the notice, does not invalidate the meeting.1797.A director may by a written instrument appoint an alternate who need not be a director and an alternate is entitled to attend meetings in the absence of thedirector who appointed him and to vote or consent in place of the director.98.A meeting of directors is duly constituted for all purposes if at the commencement of the meeting there are present in person or by alternate not less thanone half of the total number of directors, unless there are only 2 directors in which case the quorum shall be 2.99.If the Company shall have only one director the provisions herein contained for meetings of the directors shall not apply but such sole director shall havefull power to represent and act for the Company in all matters as are not by the Act or the Memorandum or these Articles required to be exercised by themembers of the Company and in lieu of minutes of a meeting shall record in writing and sign a note or memorandum of all matters requiring a resolution ofdirectors. Such a note or memorandum shall constitute sufficient evidence of such resolution for all purposes.100.At every meeting of the directors the Chairman of the Board of Directors shall preside as chairman of the meeting. If there is no Chairman of the Board ofDirectors or if the Chairman of the Board of Directors is not present at the meeting the Vice Chairman of the Board of Directors shall preside. If there is noVice Chairman of the Board of Directors or if the Vice Chairman of the Board of Directors is not present at the meeting the directors present shall choosesome one of their number to be chairman of the meeting.101.An action that may be taken by the directors or a committee of directors at a meeting may also be taken by a resolution of directors or a committee ofdirectors consented to in writing or by telex, telegram, cable, facsimile or other written electronic communication by all directors or all members of thecommittee as the case may be, without the need for any notice. The consent may be in the form of counterparts, each counterpart being signed by one ormore directors.102.The directors shall cause the following records to be kept:a.minutes of all meetings of directors, members, committees of directors and committees of members; andb.copies of all resolutions consented to by directors, members, committees of directors and committees of members.103.The resolutions, records and minutes referred to in the preceding Article shall be kept at the registered office of the Company, its principal place ofbusiness or at such other place as the directors determine.104.The directors may, by resolution of directors, designate one or more committees, each consisting of one or more directors.105.Subject to the following Article, each committee of directors has such powers and authorities of the directors, including the power and authority to affix theSeal, as are set forth in the resolution of directors establishing the committee.106.The directors have no power to delegate the following powers to a committee of directors;a.to amend the memorandum or articles;b.to change the registered office or agent;c.to designate committees of directors;d.to delegate powers to a committee of directors;e.to appoint or remove directors;f.to appoint or remove an agent;g.to fix emoluments of directors;18h.to approve a plan of merger, consolidation or arrangement;i.to make a declaration of solvency for the purposes of section 198(1)(a) or to approve a liquidation plan;j.to make a determination under section 57(1) that the company will, immediately after a proposed distribution, satisfy the solvency test; ork.to authorise the company to continue as a company incorporated under the laws of a jurisdiction outside the British Virgin Islands.Paragraphs (c) and (d) do not prevent a committee of directors, where authorised by the directors, from appointing a subcommittee and delegating powersexercisable by the committee to the subcommittee.107.The meetings and proceedings of each committee of directors consisting of 2 or more directors shall be governed mutatis mutandis by the provisions ofthese Articles regulating the proceedings of directors so far as the same are not superseded by any provisions in the resolution establishing the committee.108.Without prejudice to the freedom of the directors to establish any other committee, if the shares (or depositary receipts therefore) are listed or quoted onthe Designated Stock Exchange, and if required by the Designated Stock Exchange, the directors shall establish and maintain an audit committee as acommittee of the board of directors, the composition and responsibilities of which shall comply with the rules and regulations of the SEC and theDesignated Stock Exchange. The audit committee shall meet at least once every financial quarter, or more frequently as circumstances dictate.109.The Company shall adopt a formal written audit committee charter and review and assess the adequacy of the formal written charter on an annual basis.The charter shall specify the responsibilities of the Audit Committee which shall include responsibility for, among other things, ensuring its receipt from theoutside auditors of the Company of a formal written statement delineating all relationships between the auditor and the Company, and the AuditCommittee’s responsibility for actively engaging in a dialogue with the auditor with respect to any disclosed relationships or services that may impact theobjectivity and independence of the auditor take appropriate action to oversee the independence of the outside auditor. In addition, the Audit Committee isresponsible for reviewing potential conflict of interest situations and approving all Related Party Transactions.110.Without prejudice to the freedom of the directors to establish any other committees, the Board may establish a Stock Option Committee to administer theCompany’s stock option plans, including authority to make and modify awards under such plans. For so long as the Securities of the Company are listed ortraded on the Designated Stock Exchange, the Stock Option Committee shall have at least two Independent Directors. The Stock Option Committee willadminister the Company’s stock option plans, including the authority to make and modify awards under such plans.111.Without prejudice to the freedom of the directors to establish any other committees, the Board may establish a Nominating Committee to assist the Board inidentifying qualified individuals to become members of the Board.OFFICERS112.The Company may by resolution of directors appoint officers of the Company at such times as shall be considered necessary or expedient. Such officersmay consist of a Chairman of the Board of Directors, a Vice Chairman of the Board of Directors, a President and one or more Vice Presidents, Secretaries andTreasurers and such other officers as may from time to time be deemed desirable. Any number of offices may be held by the same person.113.The officers shall perform such duties as shall be prescribed at the time of their appointment subject to any modification in such duties as may beprescribed thereafter by resolution of directors or resolution of members, but in the absence of any specific allocation of duties it shall be the responsibilityof the Chairman of the Board of Directors to preside at meetings of directors and members, the Vice Chairman to act in the absence of the Chairman, thePresident to manage the day to day affairs of the Company, the Vice Presidents to act in order of seniority in the absence of the President but otherwise toperform such duties as may be delegated to them by the President, the Secretaries to maintain the share register, minute books and records (other thanfinancial records) of the Company and to ensure compliance with all procedural requirements imposed on the Company by applicable law, and the Treasurerto be responsible for the financial affairs of the Company.19114.Subject to the rules of the Designated Stock Exchange, the emoluments of all officers shall be fixed by resolution of directors.115.The officers of the Company shall hold office until their successors are duly elected and qualified, but any officer elected or appointed by the directors maybe removed at any time, with or without cause, by resolution of directors. Any vacancy occurring in any office of the Company may be filled by resolutionof directors.CONFLICT OF INTERESTS116.A director of the Company shall, forthwith after becoming aware of the fact that he is interested in a transaction entered into or to be entered into by theCompany, disclose the interest to all other directors of the Company.117.A director of the Company is not required to comply with Article 112 if;a.the transaction or proposed transaction is between the director and the Company; andb.the transaction or proposed transaction is or is to be entered into in the ordinary course of the company’s business and on usual terms andconditions.118.For the purposes of Article 112 a disclosure to all other directors to the effect that a director is a member, director or officer of another named entity or has afiduciary relationship with respect to the entity or a named individual and is to be regarded as interested in any transaction which may, after the date of theentry or disclosure, be entered into with that entity or individual, is a sufficient disclosure of interest in relation to that transaction.119.A.A director of the Company who is interested in a transaction entered into or to be entered into by the Company may:(i)vote on a matter relating to the transaction;(ii)attend a meeting of directors at which a matter relating to the transaction arises and be included among the directors present at the meeting for thepurposes of a quorum; and(iii)sign a document on behalf of the Company, or do any other thing in his capacity as a director, that relates to the transaction,and, subject to compliance with the Act shall not, by reason of his office be accountable to the Company for any benefit which he derives from suchtransaction and no such transaction shall be liable to be avoided on the grounds of any such interest or benefit.119.B.For so long the Securities of the Company are listed or traded on the Designated Stock Exchange, the Company shall conduct an appropriate review of allmaterial Related Party Transactions on an ongoing basis and shall utilize the Audit Committee for the review and approval of potential conflicts of interestsituations.INDEMNIFICATION120.Subject to the limitations hereinafter provided the Company may indemnify against all expenses, including legal fees, and against all judgments, fines andamounts paid in settlement and reasonably incurred in connection with legal, administrative or investigative proceedings any person who;a.is or was a party or is threatened to be made a party to any threatened, pending or completed proceedings, whether civil, criminal, administrative orinvestigative, by reason of the fact that the person is or was a director, an officer or a liquidator of the Company; orb.is or was, at the request of the Company, serving as a director of, or in any other capacity is or was acting for, another body corporate or apartnership, joint venture, trust or other enterprise.20121.The Company may only indemnify a person if the person acted honestly and in good faith in what he believed to be in the best interests of the Companyand, in the case of criminal proceedings, the person had no reasonable cause to believe that his conduct was unlawful.122.For the purposes of the preceding Article, a director acts in the best interests of the Company if he acts in the best interests of;a.the Company’s holding company; orb.a shareholder or shareholders of the Company; in either case, in the circumstances specified in Article 85.123.The decision of the directors as to whether the person acted honestly and in good faith and with a view to the best interests of the Company and as towhether the person had no reasonable cause to believe that his conduct was unlawful is, in the absence of fraud, sufficient for the purposes of theseArticles, unless a question of law is involved.124.The termination of any proceedings by any judgment, order, settlement, conviction or the entering of a nolle prosequi does not, by itself, create apresumption that the person did not act honestly and in good faith and with a view to the best interests of the Company or that the person had reasonablecause to believe that his conduct was unlawful.Consolidated Statements of Changes in Stockholder’s EquityF5Consolidated Statements of Cash FlowsF6Notes to Consolidated Financial StatementsF7 F22F1REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRMTo the Shareholder and the Sole Director ofLK Technology Ltd.Opinion on the Consolidated Financial StatementsWe have audited the accompanying consolidated balance sheets of LK Technology Ltd. and. subsidiaries (the “Company”) as of December 31, 2017 and 2016, andthe related consolidated statements of operations and comprehensive loss, changes in shareholder’s equity and cash flows for each of the years then ended, andthe related notes (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in allmaterial respects, the consolidated financial position of the Company as of December 31, 2017 and 2016, and the consolidated results of its operations and its cashflows for each of the years then ended, in conformity with accounting principles generally accepted in the United States of America.Basis for OpinionThese consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’sconsolidated financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (UnitedStates) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules andregulations of the Securities and Exchange Commission and the PCAOB.We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonableassurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have,nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internalcontrol over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting.Accordingly, we express no such opinion.An independent member firm of Moore Stephens International Limited – members in principal cities throughout the worldOur audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, andperforming procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in theconsolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well asevaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion.Certified Public AccountantsWe have served as the Company’s auditor since 2018.Hong KongMay 25, 2018F2LK TECHNOLOGY LTD. AND SUBSIDIARIESCONSOLIDATED BALANCE SHEETS(IN U.S. DOLLARS)As of December 31,20172016AssetsCurrent assets:Cash and cash equivalents$72,379$83,843Accounts receivable, net of allowance for doubtful accounts9,729,6251,865,836Other receivables and prepayment2,376,7452,287,934Amounts due from related parties11,760,692Total current assets23,939,4414,237,613Property and equipment, net5,044,8727,771,027Intangible assets, net1,154,1971,682,445Goodwill7,239,9367,239,936Amount due from a related party204,412183,811TOTAL ASSETS37,582,85821,114,832LiabilitiesCurrent liabilities:Accounts payable8,784,5186,446,584Accrued liabilities and other payables12,962,91211,329,613Amounts due to related parties3,563,68316,129,323Total current liabilities25,311,11333,905,520Total liabilities25,311,11333,905,520Commitments and contingenciesShareholder’s Equity (Deficit)Share capitalCommon stock, $1 par value per share; 50,000 shares authorized as of December 31, 2017 and 2016, 1 share issued andoutstanding as of December 31, 2017 and 201611Additional paidin capital41,819,68510,037,469Accumulated deficit(29,936,158)(23,125,704)Accumulated other comprehensive income (loss)388,217297,546Total Shareholder’s Equity (Deficit)12,271,745(12,790,688)TOTAL LIABILITIES AND SHAREHOLDER’S EQUITY (DEFICIT)$37,582,858$21,114,832F3LK TECHNOLOGY LTD. AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS(IN U.S. DOLLARS)For the years endedDecember 31,20172016Revenues$26,082,417$5,233,145Less: Cost of revenues5,547,7796,315,504Less: Operating expenses:Selling and marketing23,908,7336,209,804General and administrative2,451,2492,108,854Research and development1,046,1982,882,202Total operating expenses27,406,18011,200,860Loss from operations(6,871,542)(12,283,219)Other income (expense):Interest expense(26,611)(4,412)Foreign exchange gains (losses)350,679(298,257)Loss from investment(428,571)Other income (expense), net(262,980)(34,572)Total other income (expense), net61,088(765,812)Loss before income taxes(6,810,454)(13,049,031)Income taxesNet loss$(6,810,454)$(13,049,031)Other comprehensive income:Foreign currency translation adjustment90,671387,375Total comprehensive loss$(6,719,783)$(12,661,656)F4LK TECHNOLOGY LTD. AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDER’S EQUITY(IN U.S. DOLLARS)Accumulated otherTotalOrdinary sharesAdditionalpaidin AccumulatedcomprehensiveIncomeShareholder’sEquity SharesAmountcapitaldeficits(loss)(Deficit)Balance as of December 31, 20151$ 1$8,250,505$(10,076,673)$(89,829)$(1,915,996)Capital contribution from C Media1,786,9641,786,964Net loss(13,049,031)(13,049,031)Foreign currency translation adjustment387,375387,375Balance as of December 31, 20161110,037,469(23,125,704)297,546(12,790,688)Capital contribution from C Media31,782,21631,782,216Net loss(6,810,454)(6,810,454)Foreign currency translation adjustment90,67190,671Balance as of December 31, 20171$1$41,819,685$(29,936,158)$388,217$12,271,745F5LK TECHNOLOGY LTD. AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF CASH FLOWS(IN U.S. DOLLARS)For the years endedDecember 31,20172016CASH FLOWS FROM OPERATING ACTIVITIES:Net loss$(6,810,454)$(13,049,031)Depreciation and amortization3,316,1813,245,161Loss on disposal of property and equipment115,19373,022Increase in allowance for doubtful accounts445,39562,591Changes in assets and liabilitiesAccounts receivable(7,933,730)(1,507,296)Other receivables and prepayment(2,202,960)2,873,984Accounts payable2,230,5434,757,457Accrued liabilities and other payables1,866,1377,483,441Net cash (used in) provided by operating activities(8,973,695)3,939,329CASH FLOWS FROM INVESTING ACTIVITIES:Purchase of property and equipment(12,689)(3,554,258)Proceeds from disposal of property and equipment29,942Net cash provided by (used in) investing activities17,253(3,554,258)CASH FLOWS FROM FINANCING ACTIVITIES:Advances from related parties8,938,290(1,197,870)Net cash provided by (used in) financing activities8,938,290(1,197,870)Effect of exchange rate changes6,688(32,746)Net decrease in cash and cash equivalents(11,464)(845,545)Cash and cash equivalents, at beginning of year83,843929,388Cash and cash equivalents, at end of year$72,379$83,843Supplemental cash flow disclosures:Interest paid26,6114,412Income taxes paidF6LK TECHNOLOGY LTD. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS(IN U.S. DOLLARS)NOTE 1 – DESCRIPTION OF BUSINESS AND ORGANIZATIONStar Chariot Limited was incorporated in the British Virgin Islands (“BVI”) as an exempted limited liability company on March 3, 2011. On January 18, 2018, it wasrenamed as LK Technology Ltd. (“LK Technology ” or the “Company”).LK Technology, its subsidiaries and its variable interest entities (“VIEs”) (collectively the “Group”) operate mobile application service for longdistance travel in thePeople’s Republic of China (the “PRC”). The core mobile application product, Luokuang, is made as an LBSsocial contents and services distribution platform. Itoffers functions based on various travel scenarios, e.g. information, entertainment, travel, ecommerce, O2O, advertising, etc.As of December 31, 2017, details of the Company’s subsidiaries and VIEs are as follows:NameDate ofincorporationPlace ofincorporationPercentage oflegal ownershipSubsidiaries:MMB LimitedApr 11, 2013Hong Kong100%Mobile Media (China) LimitedNov 6, 2007Hong Kong100%Zhong Chuan Tian Xia Information and Technology (Beijing) LimitedFeb 1, 2013PRC100%Zhong Chuan Tian Xia Information and Technology (Shenzhen) LimitedDec 23, 2010PRC100%VIEs:Beijing Zhong Chuan Shi Xun Technology Limited (“Zhong Chuan Shi Xun”)May 17, 2004PRC100%Jiangsu Zhong Chuan Rui You Information and Technology Limited (“Zhong Chuan Rui You”)May 26, 2011PRC100%Huoerguosi Luokuang Information and Technology Limited (“Huoerguosi Luokuang”)Jul 19, 2017PRC100%Shenzhen Jiu Zhou Shi Dai Digital and Technology Limited (“Jiu Zhou Shi Dai”)Nov 26, 2004PRC100%F7NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIESBasis of presentationThe consolidated financial statements of the Group have been prepared in accordance with accounting principles generally accepted in the United States of America(“US GAAP”).The Group incurred losses from operations of $6,871,542 and $12,283,219 for the years ended December 31, 2017 and 2016, respectively. As of December 31, 2017, theGroup had a shareholder’s equity of $12,271,145. The Group had negative cash flows from operating activities for the year ended December 31, 2017 of $8,973,695.As of December 31, 2017, the Group had cash and cash equivalents of $72,379 and a working capital deficit of $1,371,672. From 2018 and onwards, the Group willfocus on improving operation efficiency and cost reduction, and enhancing marketing functions to attract more users. The Group regularly monitors its current andexpected liquidity requirements to ensure that it maintains sufficient cash balances and accessible credit to meet its liquidity requirements in the short and long term.The parent company continues to provide cash flow to the Group. Based on working capital conditions and forecast for future operations, the Group believes that itwill be able to meet its payment obligations and other commitments for at least the following twelve months.Principles of consolidationThe consolidated financial statements include the financial statements of the Company, its subsidiaries, including the whollyforeign owned enterprises (“WFOEs”),and VIEs for which the Company is the primary beneficiary. All transactions and balances among the Company, its subsidiaries and consolidated VIEs have beeneliminated upon consolidation. The results of subsidiaries and consolidated VIEs acquired or disposed of are recorded in the consolidated statements of operationsfrom the effective date of acquisition or up to the effective date of disposal, as appropriate.A subsidiary is an entity in which (i) the Company directly or indirectly controls more than 50% of the voting power; or (ii) the Company has the power to appoint orremove the majority of the members of the board of directors or to cast a majority of votes at the meeting of the board of directors or to govern the financial andoperating policies of the investee pursuant to a statute or under an agreement among the shareholders or equity holders. A VIE is required to be consolidated by theprimary beneficiary of the entity if the equity holders in the entity do not have the characteristics of a controlling financial interest or do not have sufficient equity atrisk for the entity to finance its activities without additional subordinated financial support from other parties.F8To comply with the PRC legal restrictions on foreign ownership of companies that operate mobile application services, the Group operates in such restricted servicesin the PRC through certain PRC domestic companies, whose equity interests are held by certain management members or founders of the Group. Part of theregistered capital of these PRC domestic companies was funded by certain management members or founders of the Group. The Group has entered into certainexclusive business services agreements with these PRC domestic companies, which entitle it to receive a majority of their residual returns and make it obligatory forthe Group to absorb a majority of the risk of losses from their activities. In addition, the Group has entered into certain agreements with those management membersor founders, including equity interest pledge agreements of the equity interests held by those management members or founders and exclusive option agreements toacquire the equity interests in these companies when permitted by the PRC laws, rules and regulations.Details of the typical VIE structure of the Group’s significant consolidated VIEs, primarily domestic companies associated with the operations such as Zhong ChuanShi Xun, Zhong Chuan Rui You, Huoerguosi Luokuang and Jiu Zhou Shi Dai, are set forth below:(i)Contracts that give the Group effective control of VIEsExclusive option agreementsThe VIE equity holders have granted the WFOEs exclusive call options to purchase their equity interest in the VIEs at an exercise price equal to the higherof (i) the registered capital in the VIEs; and (ii) the minimum price as permitted by applicable PRC laws. Each relevant VIE has further granted the relevantWFOE an exclusive call option to purchase its assets at an exercise price equal to the book value of the assets or the minimum price as permitted byapplicable PRC laws, whichever is higher. The WFOEs may nominate another entity or individual to purchase the equity interest or assets, if applicable,under the call options. Each call option is exercisable subject to the condition that applicable PRC laws, rules and regulations do not prohibit completion ofthe transfer of the equity interest or assets pursuant to the call option. Each WFOE is entitled to all dividends and other distributions declared by the VIE,and the VIE equity holders have agreed to give up their rights to receive any distributions or proceeds from the disposal of their equity interests in the VIEwhich are in excess of the original registered capital that they contributed to the VIE, and to pay any such distributions or premium to the WFOE. Theexclusive call option agreements remain in effect until the equity interest or assets that are the subject of such agreements are transferred to the WFOEs.Equity pledge agreementsPursuant to the relevant equity pledge agreements, the relevant VIE equity holders have pledged all of their interests in the equity of the VIEs as acontinuing first priority security interest in favor of the corresponding WFOEs to secure the performance of obligations by the VIEs and/or the equityholders under the other structure contracts. Each WFOE is entitled to exercise its right to dispose of the VIE equity holders’ pledged interests in the equityof the VIE and has priority in receiving payment by the application of proceeds from the auction or sale of such pledged interests, in the event of anybreach or default under the loan agreement or other structure contracts, if applicable. These equity pledge agreements remain in force for the duration ofthe relevant loan agreement and other structure contracts.F9(ii)Contracts that enable the Group to receive substantially all of the economic benefits from the VIEsExclusive business services agreementsEach relevant VIE has entered into an exclusive business services agreement with the respective WFOE, pursuant to which the relevant WFOE providesexclusive business services to the VIE. In exchange, the VIE pays a service fee to the WFOE which typically amounts to what would be substantially all ofthe VIE’s pretax profit, resulting in a transfer of substantially all of the profits from the VIE to the WFOE.Other arrangementsThe exclusive call option agreements described above also enable the Group to receive substantially all of the economic benefits from the VIEs by typicallyentitling the WFOEs to all dividends and other distributions declared by the VIEs and to any distributions or proceeds from the disposal by the VIE equityholders of their equity interests in the VIEs that are in excess of the original registered capital that they contributed to the VIEs.Based on these contractual agreements, the Group believes that the PRC domestic companies as described above should be considered as VIEs because the equityholders do not have significant equity at risk nor do they have the characteristics of a controlling financial interest. Given that the Group is the primary beneficiaryof these PRC domestic companies, the Group believes that these VIEs should be consolidated based on the structure as described above.Under the contractual arrangements with the consolidated VIEs, the Group has the power to direct activities of the consolidated VIEs and can have assetstransferred out of the consolidated VIEs under its control. Therefore, the Group considers that there is no asset in any of the consolidated VIEs that can be usedonly to settle obligations of the consolidated VIEs, except for registered capital and PRC statutory reserves. As all consolidated VIEs are incorporated as limitedliability companies under the Company Law of the PRC, creditors of the consolidated VIEs do not have recourse to the general credit of the Group for any of theliabilities of the consolidated VIEs.Currently there is no contractual arrangement which requires the Group to provide additional financial support to the consolidated VIEs. However, as the Groupconducts its businesses primarily based on the licenses and approvals held by its consolidated VIEs, the Group has provided and will continue to provide financialsupport to the consolidated VIEs considering the business requirements of the consolidated VIEs, as well as the Group’s own business objectives in the future.F10Use of estimatesThe preparation of financial statements in conformity with US GAAP requires the Group to make estimates and assumptions that affect the reported amounts ofassets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expensesduring the reporting period. The most significant estimates are the allowance for doubtful accounts, the useful lives of property and equipment and intangibleassets, impairment of longlived assets and goodwill. Actual results could differ from those estimates.Fair value measurementsFair value is the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at themeasurement date under current market conditions. When determining the fair value measurements for assets and liabilities required or permitted to be recorded atfair value, the Group considers the principal or most advantageous market in which it would transact and it considers assumptions that market participants woulduse when pricing the asset or liability.Authoritative literature provides a fair value hierarchy which prioritizes the inputs to valuation techniques used to measure fair value into three broad levels. Thelevel in the hierarchy within which the fair value measurement in its entirety falls is based upon the lowest level of input that is significant to the fair valuemeasurement as follows:Level 1Level 1 applies to assets or liabilities for which there are quoted prices in active markets for identical assets or liabilities.Level 2Level 2 applies to assets or liabilities for which there are inputs other than quoted prices included within Level 1 that are observable for the asset or liability such asquoted prices for similar assets or liabilities in active markets; quoted prices for identical assets or liabilities in markets with insufficient volume or infrequenttransactions (less active markets); or modelderived valuations in which significant inputs are observable or can be derived principally from, or corroborated by,observable market data.Level 3Level 3 applies to assets or liabilities for which there are unobservable inputs to the valuation methodology that are significant to the measurement of the fair valueof the assets or liabilities.F11Cash and cash equivalentsCash and cash equivalents primarily consist of cash, money market funds, investments in interest bearing demand deposit accounts, time deposits and highly liquidinvestments with original maturities of three months or less from the date of purchase and are stated at cost which approximates their fair value. The Group has nocash equivalents.Accounts receivable, net of allowanceAccounts receivable are recognized and carried at the original invoiced amount less an allowance for any potential uncollectible amounts. An estimate for doubtfuldebts is made when collection of the full amount is no longer probable. Bad debts are written off as incurred. The Group generally does not require collateral from itscustomers.The Group maintains allowances for doubtful accounts for estimated losses resulting from the failure of customers to make payments on time. The Group reviews theaccounts receivable on a periodic basis and makes specific allowances when there is doubt as to the collectability of individual balances. In evaluating thecollectability of individual receivable balances, the Group considers many factors, including the age of the balance, the customer’s payment history, its currentcreditworthiness and current economic trends.Property and equipment, netProperty and equipment are carried at cost less accumulated depreciation. Depreciation is calculated on a straightline basis over the following estimated usefullives:Wifi equipment– 3 yearsOffice equipment– 3 to 5 yearsVehicles– 5 yearsCosts of repairs and maintenance are expensed as incurred and asset improvements are capitalized. The gain or loss on disposal of property and equipment is thedifference between the net sales proceeds and the carrying amount of the relevant assets and is recognized in the consolidated income statement. When propertyand equipment are retired or otherwise disposed of, the cost and accumulated depreciation are removed from the accounts and any resulting gain or loss is includedin the results of operations for the respective period.Construction in progressAssets under construction are not depreciated until construction is completed and the assets are ready for their intended use.F12Intangible assetsIntangible assets with finite lives are amortized using the straightline method over the estimated economic lives.Intangible assets have weighted average economic lives from the date of purchase as follows:Software– 5 yearsTrademarks– 10 yearsGoodwillThe Group assesses goodwill for impairment in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”)subtopic 35020, Intangibles—Goodwill and Other: Goodwill (“ASC 35020”), which requires that goodwill to be tested for impairment at the reporting unit level atleast annually and more frequently upon the occurrence of certain events, as defined by ASC 35020.We have the option to assess qualitative factors first to determine whether it is necessary to perform the twostep test in accordance with ASC 35020. If we believe,as a result of the qualitative assessment, that it is morelikelythannot that the fair value of the reporting unit is less than its carrying amount, the twostepquantitative impairment test described below is required. Otherwise, no further testing is required. In the qualitative assessment, we consider primary factors such asindustry and market considerations, overall financial performance of the reporting unit, and other specific information related to the operations. In performing thetwostep quantitative impairment test, the first step compares the carrying amount of the reporting unit to the fair value of the reporting unit based on either quotedmarket prices of the ordinary shares or estimated fair value using a combination of the income approach and the market approach. If the fair value of the reportingunit exceeds the carrying value of the reporting unit, goodwill is not impaired and we are not required to perform further testing. If the carrying value of the reportingunit exceeds the fair value of the reporting unit, then we must perform the second step of the impairment test in order to determine the implied fair value of thereporting unit’s goodwill. The fair value of the reporting unit is allocated to its assets and liabilities in a manner similar to a purchase price allocation in order todetermine the implied fair value of the reporting unit goodwill. If the carrying amount of the goodwill is greater than its implied fair value, the excess is recognized asan impairment loss.In 2017, we performed a qualitative assessment for goodwill. Based on the requirements of ASC35020, we evaluated all relevant factors, including but not limited tomacroeconomic conditions, industry and market conditions, financial performance. We weighed all factors in their entirety and concluded that it was not morelikelythannot the fair value was less than the carrying amount of the reporting unit, and further impairment testing on goodwill was unnecessary as of December 31, 2017and 2016.F13Impairment or disposal of longlived assetsLonglived assets other than goodwill are included in impairment evaluations when events and circumstances exist that indicate the carrying value of these assetsmay not be recoverable. In accordance with FASB ASC 360, Property, Plant and Equipment, the Group assesses the recoverability of the carrying value of longlivedassets by first grouping its longlived assets with other assets and liabilities at the lowest level for which identifiable cash flows are largely independent of the cashflows of other assets and liabilities (the asset group) and, secondly, estimating the undiscounted future cash flows that are directly associated with and expected toarise from the use of and eventual disposition of such asset group. If the carrying value of the asset group exceeds the estimated undiscounted cash flows, theGroup recognizes an impairment loss to the extent the carrying value of the longlived asset exceeds its fair value. The Group determines fair value through quotedmarket prices in active markets or, if quotations of market prices are unavailable, through the performance of internal analysis using a discounted cash flowmethodology or obtains external appraisals from independent valuation firms. The undiscounted and discounted cash flow analyses are based on a number ofestimates and assumptions, including the expected period over which the asset will be utilized, projected future operating results of the asset group, discount rateand longterm growth rate.As of December 31, 2017 and 2016, the Group assessed the impairment of its longlived assets and concluded that there was no impairment indication.Business combinationWe account for business combinations using the purchase method of accounting in accordance with FASB ASC topic 805, Business combinations. The purchasemethod accounting requires that the consideration transferred be allocated to the assets, including separately identifiable assets and liabilities we acquired, basedon their estimated fair values. The consideration transferred in an acquisition is measured as the aggregate of the fair values at the date of exchange of the assetsgiven, liabilities incurred, and equity instruments issued as well as the contingent considerations and all contractual contingencies as of the acquisition date. Thecosts directly attributable to the acquisition are expensed as incurred. Identifiable assets, liabilities and contingent liabilities acquired or assumed are measuredseparately at their fair value as of the acquisition date, irrespective of the extent of any noncontrolling interests. The excess of (i) the total of cost of acquisition, fairvalue of the noncontrolling interests and acquisition date fair value of any previously held equity interest in the acquiree over (ii) the fair value of the identifiable netassets of the acquiree, is recorded as goodwill. If the cost of acquisition is less than the fair value of the net assets of the subsidiary acquired, the difference isrecognized directly in earnings.Revenue recognitionThe Group recognizes revenue in accordance with FASB ASC topic 605, Revenue Recognition (“ASC 605”). Revenue is recognized when the following four revenuerecognition criteria are met: (i) persuasive evidence of an arrangement exists, (ii) delivery has occurred or services have been provided, (iii) the selling price is fixed ordeterminable, and (iv) collectability is reasonably assured.F14Displaybased online advertising servicesThe Group provides displaybased online advertising services to customers by integrating text description, image and video, and displaying the advertisements in aprominent position of LuoKuang Application. The Group recognizes revenue in accordance with ASC 605, over the contractual term based on the agreements andconfirmation letters signed by both parties, commencing on the date the customer’s advertisement is displayed on the Group’s platform.Foreign currency translationThe functional and reporting currency of the Company and the Company’s subsidiaries domiciled in BVI and Hong Kong are the United States dollar (“U.S. dollar”).The financial records of the Company’s other subsidiaries and VIEs located in the PRC are maintained in their local currency, the Chinese Renminbi (“RMB”), whichare the functional currency of these entities.Monetary assets and liabilities denominated in currencies other than the functional currency are translated into the functional currency at the rates of exchangeruling at the balance sheet date. Transactions in currencies other than the functional currency during the year are converted into the functional currency at theapplicable rates of exchange prevailing when the transactions occurred. Transaction gains and losses are recognized in the statements of operations.The Company’s entities with a functional currency of RMB translate their operating results and financial position into the U.S. dollar, the Company’s reportingcurrency. Assets and liabilities are translated using the exchange rates in effect on the balance sheet date. Revenues, expenses, gains and losses are translatedusing the average rate for the year. Retained earnings and equity are translated using the historical rate. Translation adjustments are reported as cumulativetranslation adjustments and are shown as a separate component of other comprehensive income.Income taxesDeferred income taxes are recognized for temporary differences between the tax basis of assets and liabilities and their reported amounts in the financial statements,net operating loss carry forwards and credits, by applying enacted statutory tax rates applicable to future years. Deferred tax assets are reduced by a valuationallowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Current income taxesare provided for in accordance with the laws and regulations applicable to the Group as enacted by the relevant tax authorities.The impact of an uncertain income tax position on the income tax return must be recognized at the largest amount that is morelikelythan not to be sustained uponaudit by the relevant tax authorities. An uncertain income tax position will not be recognized if it has less than a 50% likelihood of being sustained. Additionally, theGroup classifies the interest and penalties, if any, as a component of the income tax expense. For years ended December 31, 2017 and 2016, the Group did not haveany material interest or penalties associated with tax positions nor did the Group have any significant unrecognized uncertain tax positions.F15Related partiesParties are considered to be related to the Company if the parties, directly or indirectly, through one or more intermediaries, control, are controlled by, or are undercommon control with the Company. Related parties also include principal owners of the Company, its management, members of the immediate families of principalowners of the Company and its management and other parties with which the Company may deal with if one party controls or can significantly influence themanagement or operating policies of the other to an extent that one of the transacting parties might be prevented from fully pursuing its own separate interests. TheCompany discloses all significant related party transactions.LeasesLeases have been classified as either capital or operating leases. Leases that transfer substantially all the benefits and risks incidental to the ownership of assets areaccounted for as if there was an acquisition of an asset and incurrence of an obligation at the inception of the lease. All other leases are accounted for as operatingleases wherein rental payments are expensed as incurred.When the Group is the lessor, minimum contractual rental from leases are recognized on a straightline basis over the noncancelable term of the lease. With respectto a particular lease, actual amounts billed in accordance with the lease during any given period may be higher or lower than the amount of rental revenue recognizedfor the period. Straightline rental revenue commences when the customer assumes control of the leased premises. Accrued straightline rents receivable representsthe amount by which straightline rental revenue exceeds rents currently billed in accordance with lease agreements. Contingent rental revenue is accrued when thecontingency is removed.Advertising costsAdvertising costs include expenses associated with direct marketing. All advertising costs are expensed as incurred and included in selling and marketing expenses.During the years ended December 31, 2017 and 2016, advertising costs amounted to $23,171,170 and $4,537,653, respectively.Comprehensive lossComprehensive loss includes net loss and foreign currency translation adjustments and is presented net of tax. The tax effect is nil for the two years endedDecember 31, 2017 and 2016 in the consolidated statements of comprehensive loss.Concentration of credit riskFinancial instruments that potentially expose the Group to concentrations of credit risk consist primarily of cash and accounts receivable. The Group places its cashwith financial institutions with highcredit rating and quality in China. For the year ended December 31, 2017, two customers accounted for over 10% of totalrevenue. For the year ended December 31, 2016, four customers accounted for over 10% of total revenue. At December 31, 2017 and 2016, the Group had credit riskexposure of uninured cash in banks of approximately $72,379 and $83,843, respectively.F16NOTE 3 – INCOME TAXAt December 31, 2017 and 2016, the Group had an unused net operating loss carryforwards of approximately $25,123,726 and $20,081,239, respectively, for income taxpurposes, which expires between 2018 to 2022 and between 2017 to 2021, respectively. At December 31, 2017 and 2016, these net operating losses carryforwards mayresult in future income tax benefits of approximately $5,043,944 and $4,008,863, respectively, however, because realization is uncertain at this time, a valuationallowance in the same amount has been established. Deferred income taxes reflect the net effects of temporary differences between the carrying amounts of assetsand liabilities for financial reporting purposes and the amounts used for income tax purposes.Significant components of the Group’s deferred tax liabilities and assets of December 31, 2017 and 2016 are as follows:December 31,December 31,20172016Deferred tax liabilities$$Deferred tax assetNet operating loss carryforward5,043,9444,008,863Valuation allowance(5,043,944)(4,008,863)Net deferred tax assetMovement of valuation allowanceDecember 31,2017December 31,2016At the beginning of the year$4,008,863$2,049,352Current year addition823,9702,159,518Expired(61,411)Exchange difference272,522(200,007)At the end of the year5,043,9444,008,863The Company is not subject to taxation in BVI under the current BVI law. Subsidiaries operating in the PRC are subject to PRC Enterprise Income Tax at the statutoryrate of 25% for the years ended December 31, 2017 and 2016. Subsidiaries operating in Hong Kong are subject to Hong Kong income taxes at a rate of 16.5% for theyears ended December 31, 2017 and 2016.F17A reconciliation of the income tax expense to the amount computed by applying the current statutory tax rate to the loss before income taxes in the consolidatedstatements of comprehensive income is as follows:December 31,December 31,20172016Loss before income taxes$(6,810,454)$(13,049,031)Tax loss at statutory tax rate(1,655,174)(3,386,822)Nondeductible items6,729,2551,712,857Nontaxable items(3,789,956)(674,189)Change in valuation allowance823,9702,159,518Tax benefits(2,108,095)188,636Income tax expensesNOTE 4 – ACCOUNTS RECEIVABLEAt December 31, 2017 and 2016, accounts receivable consisted of the following:December 31,December 31,20172016Accounts receivable$10,406,602$2,098,946Less: allowance for doubtful accounts676,977233,110$9,729,625$1,865,836NOTE 5 – OTHER RECEIVABLESAt December 31, 2017 and 2016, other receivables consisted of the following:December 31,2017December 31,2016Advances to suppliers$339,701$181,472VAT recoverable (1)3,033,0651,662,805Other5,048,189485,152$2,376,745$2,287,934(1)The balance of advanced VAT represents input VAT available for deducting the amount of VAT paid in the future. During the years ended December 31, 2017and 2016, the Group purchased a large amount of WiFi equipment for deployments, which generated related input VAT approved by tax authority.F18NOTE 6 – AMOUNTS DUE FROM RELATEDPARTIESAt December 31, 2017 and 2016, amounts due from related parties consisted of the following:Name of related partyDecember 31,2017December 31,2016C Media Limited (1)$11,760,692$Ya Tuo Ji International Consultancy (Beijing) Limited (2)204,412183,811(1)C Media Limited is the parent company of LK Technology. The Group expects the amounts due from the related party will be returned to the Group within oneyear.(2)Ya Tuo Ji is a company controlled by the spouse of a major shareholder of C Media Limited. The loan is unsecured, interestfree and repayable on January 5,2019.NOTE 7 – PROPERTY AND EQUIPMENTAt December 31, 2017 and 2016, property and equipment consisted of the following:December 31,December 31,Useful life20172016WiFi equipment3 Years$8,711,424$8,367,678Vehicles5 Years43,246Office and other equipment3 – 5 Years170,242416,434Constructioninprogress2,166,4522,652,28811,048,11811,479,646Less: accumulated depreciation(6,003,246)(3,708,619)$5,044,872$7,771,027For the years ended December 31, 2017 and 2016, depreciation expense amounted to $2,628,884 and $2,474,434, respectively, of which $2,423,655 and $2,194,582,respectively, was included in cost of revenue, $117,648 and $121,740, respectively, was included in selling and marketing expenses and the remainder was included ingeneral and administrative expense.Included in constructioninprogress are WiFI equipment under construction.F19NOTE 8 – GOODWILLIn September of 2014, Zhong Chuan Shi Xun acquired a 100% interest in Zhong Chuan Rui You for a consideration of $7,391,894 (RMB48,000,000). Zhong Chuan RuiYou is primarily engaged in on train WiFi business, deploying WiFi equipment on trains and providing passengers with entertainment and information services ontrains. The book value of the identifiable net assets of Zhong Chuan Rui You was $151,958 (RMB963,000) and a goodwill of $7,239,936 was recorded.NOTE 9 – ACCRUED LIABILITIES AND OTHER PAYABLESAt December 31, 2017 and 2016, accrued liabilities and other payables consisted of the following:December 31,December 31,20172016Deferred revenue$2,326,406$302,735Accrued payroll143,998316,458Other taxes payable3,544,469461,699Other payable852,384686,526Other loans6,095,6559,562,915$12,962,912$11,329,613Deferred revenue represents prepayments from customers for advertising service and is recognized as revenue when the advertising services are rendered.Other loans of $939,555 and $57,416, respectively, as of December 31, 2017 and 2016, are unsecured, bear daily interest at 0.04% and are repayable on demand.NOTE 10 – AMOUNTS DUE TO RELATED PARTIESAt December 31, 2017 and 2016, amounts due to related parties consisted of the following:December 31,December 31,Name of related party20172016Mr. Song Xuesong (“Mr. Song”) (1)$2,921,639$10,669,325C Media Limited (2)$$4,855,236Thumb Beijing Branch (3)$612,103$576,560Thumb Shenzhen Branch (3)$29,941$28,202(1) The Group’s CEO(2) C Media Limited, the parent company.(3) Thumb Beijing and Shenzhen Branch are controlled by the spouse of Mr. Song.Amounts due to related parties are shortterm in nature, noninterest bearing, unsecured and payable on demand.F20NOTE 11 – RETIREMENT AND WELFARE BENEFITSThe Group’s fulltime employees are entitled to staff welfare benefits including medical care, casualty, housing benefits, education benefits, unemployment insuranceand pension benefits through a PRC governmentmandated multiemployer defined contribution plan. The Group is required to accrue the employerportion forthese benefits based on certain percentages of the employees’ salaries. The total provision for such employee benefits of $170,227 and $353,033 during the yearsended December 31, 2017 and 2016, respectively, of which $23,392 and $30,455, respectively, was charged to cost of revenue, $48,957 and $97,408, respectively wascharged to selling and marketing expenses, $49,717 and $86,934, respectively, was charged to general and administrative expenses and $48,161 and $138,236,respectively was charged to research and development expenses. The Group is required to make contributions to the plan out of the amounts accrued for all staffwelfare benefits except for education benefits. The PRC government is responsible for the staff welfare benefits including medical care, casualty, housing benefits,unemployment insurance and pension benefits to be paid to these employees.NOTE 12 – STATUTORY RESERVESAs stipulated by the relevant law and regulations in the PRC, the Group’s subsidiaries and VIEs in the PRC are required to maintain a nondistributable statutorysurplus reserve. Appropriations to the statutory surplus reserve are required to be made at not less than 10% of profit after taxes as reported in the subsidiaries’statutory financial statements prepared under the PRC GAAP. Once appropriated, these amounts are not available for future distribution to owners or shareholders.Once the general reserve is accumulated to 50% of the subsidiaries’ registered capital, the subsidiaries can choose not to provide more reserves. The statutoryreserve may be applied against prior year losses, if any, and may be used for general business expansion and production and increase in registered capital of thesubsidiaries. The Group allocated $Nil to statutory reserves during the years ended December 31, 2017 and 2016, respectively. The statutory reserves cannot betransferred to the Company in the form of loans or advances and are not distributable as cash dividends except in the event of liquidation.NOTE 13 – COMMITMENTS AND CONTINGENCIESOperating leasesWe have entered into operating lease agreements primarily for our office spaces in China. These leases expire through 2018 and are renewable upon negotiation.Future minimum rental payment required under the Office Lease is as follows:Year ending December 31:Amount2018$122,138F21Contingencies(a) Litigation with Shanghai Fusheng Weier Intelligent Control Technology Co., Ltd.On January 22, 2016, Zhong Chuan Rui You and Shanghai Fusheng Weier Intelligent Control Technology Co., Ltd. (“Fusheng Weier”) signed a contract forequipment of $1,652,842 (RMB10,800,000). Since Zhong Chuan Rui You did not make the payments of $1,126,381 (RMB7,360,000) on the due dates, Fusheng Weierfiled a lawsuit against Zhong Chuan Rui You in Shanghai Xuhui District People’s Court on October 8, 2016. On March 9, 2017, Xuhui District People’s Court issuedthe verdict requiring Zhong Chuan Rui You to pay the overdue debts. In August 2017, C Media Limited made the payment of $512,075 (RMB3,346,000). Theremaining balance has been accrued in accounts payable. The payment schedule for the remaining balance is being negotiated by the two parties. On February 5,2018, a hearing was held adding Zhong Chuan Shi Xun as a defendant. The Group plans to settle the remaining balance within one year.(b) Lawsuit with Gansu Jinlun Culture Media Co., Ltd.On August 22, 2014, Zhong Chuan Rui You and Gansu Jinlun Culture Media Co., Ltd. (“Gansu Jinlun”) signed a “Lanzhou Railway Bureau Airconditioned Train WiFi Network System Advertising Operation Rights Agreement” for advertising on 72 trains of $1,467,880 (RMB9,604,633). Due to the dispute on the projectimplementation, Zhong Chuan Rui You did not pay the advertising fee. On August 23, 2017, Gansu Jinlun filed a lawsuit with Gansu Intermediate People’s Court. OnDecember 19, 2017, Gansu Intermediate People’s Court issued a verdict, ruling that Zhong Chuan Rui You settle the overdue advertising fee. Since only 18 out of 72trains have been installed with Wifi network system, Zhong Chuan Rui You disputed and appealed to the verdict. The next court trial date has not yet beendetermined.C Media and Gansu Jinlun are negotiating a potential settlement to resume the contract. According to the legal counsel, it is probable that the settlement will amountto approximately $459,000 (RMB3,000,000); therefore, this amount has been accrued in accounts payable.(c) Litigation with Shenzhen Hua Xun Fang Zhou Technology Co., Ltd.On June 16, 2015, Zhong Chuan Rui You signed a cooperation agreement with Shenzhen Hua Xun Fang Zhou Technology Co., Ltd. (“Shenzhen Hua Xun”) andXuesong Song, a major shareholder of C Media Limited. Pursuant to this agreement, Zhong Chuan Rui You procures equipment from Shenzhen Hua Xun. XuesongSong acts as a joint liability guarantor for the entire debts of Zhong Chuan Rui You under this agreement. As Zhong Chuan Rui You did not make the payments onthe due dates, Shenzhen Hua Xun filed a lawsuit with Shenzhen Baoan District People’s Court on May 31, 2016. On November 1, 2016, Zhong Chuan Rui You,Xuesong Song and Shenzhen Hua Xun reached a settlement in Shenzhen Baoan District People’s Court to settle $1,735,389 (RMB11,355,000) in four instalments. OnDecember 30, 2017, the debt was assigned to C Media Limited.NOTE 14 – SUBSEQUENT EVENTThe Group has evaluated all events or transactions that occurred after December 31, 2017 through May 25, 2018, which is the date that the financial statements wereavailable to be issued.F22EX1.1 2 f20f2017ex11_luokung.htm AMENDED AND RESTATED MEMORANDUM OF ASSOCIATION AND ARTICLES OF ASSOCIATION OF LUOKUNGTECHNOLOGY CORP., DATED AUGUST 20, 2018, AND AS CURRENTLY IN EFFECTExhibit 1.1BC NO: 1553620British Virgin IslandsThe BVI Business Companies Act, 2004(No. 16 of 2004)Memorandum of AssociationandArticles of AssociationofLuokung Technology Corp.Incorporated the 24th day of October, 2009Amended and Restated the 11th Day of December 2009Amended and Restated the 17th Day of December 2009Amended and Restated the 25th Day of March 2010Amended and Restated the 21st day of May 2018Amended and restated the 17 August 2018Amended and restated the 21 August 2018Portcullis (BVI) LimitedPortcullis Chambers4th Floor Ellen Skelton Building3076 Sir Francis Drake HighwayRoad Town, TortolaBritish Virgin IslandsTERRITORY OF THE BRITISH VIRGIN ISLANDSTHE BVI BUSINESS COMPANIES ACT, 2004(No. 16 of 2004)MEMORANDUM OF ASSOCIATIONOFLuokung Technology Corp.NAME1.The name of the Company is Luokung Technology Corp.TYPE OF COMPANY2.The Company is a company limited by shares.REGISTERED OFFICE3.The first Registered Office of the Company is the offices of Portcullis TrustNet (BVI) Limited, Portcullis TrustNet Chambers, P.O. Box 3444, Road Town,Tortola, British Virgin Islands, the office of the registered agent.3.1The current Registered Office of the Company is Portcullis Chambers, 4th Floor Ellen Skelton Building, 3076 SirFrancis Drake Highway, Road Town,Tortola, British Virgin Islands VG1110.REGISTERED AGENT4.The first Registered Agent of the Company is Portcullis TrustNet (BVI) Limited of Portcullis TrustNet Chambers, P.O. Box 3444, Road Town, Tortola,British Virgin Islands.4.1The current Registered Agent of the Company is Portcullis (BVI) Ltd of Portcullis Chambers, 4th Floor Ellen Skelton Building, 3076 Sir Francis DrakeHighway, Road Town, Tortola, British Virgin Islands VG1110.AUTHORISED NUMBER OF SHARES5.The Company is authorised to issue a maximum of 251,000,000 shares.CLASSES, NUMBER AND PAR VALUE OF SHARES6.As at the date of adoption of this memorandum, the Company is authorised to issue (a) 250,000,000 ordinary shares without par value (“OrdinaryShares”); and (b) 1,000,000 preferred shares without par value (“Preferred Shares”).FRACTIONAL SHARES7.The Company may issue fractions of a share and a fractional share shall have the same corresponding fractional liabilities, limitations, preferences,privileges, qualifications, restrictions, rights and other attributes of a whole share of the same class or series of shares.RIGHTS, PRIVILEGES, RESTRICTIONS AND CONDITIONS ATTACHING TO SHARES8.(1)Subject to the memorandum and articles of association (and, for greater clarity, without prejudice to any special rights conferred thereby on theholders of any other shares), an Ordinary Share of the Company confers on the holder;(a)the right to one vote at a meeting of the members of the Company or on any Resolution of Members;(b)the right to an equal share in any Distribution paid by the Company; and(c)the right to an equal share in the distribution of the surplus assets of the Company on a winding up.(2)Subject to the memorandum and articles of association (and, for greater clarity, without prejudice to any special rights conferred thereby on theholders of any other shares), a Preferred Share of the Company confers on the holder;(a)the right to 399 votes at a meeting of the members of the Company or on any Resolution of Members;(b)the right to an equal share in any Distribution paid by the Company;(c)the right to an equal share in the distribution of the surplus assets of the Company on its liquidation.(d)be freely transferable, in whole or in part, by Mr. Xuesong Song to any third party through one or more Private Transactions, subject toApplicable Law; and(e)be freely transferable, in whole or in part, by Mr. Xuesong Song to any third party through one or more Public Transactions, subject to ApplicableLaw and Automatic Conversion of such Preferred Share(s) into Ordinary Share(s).(3)The directors may at their discretion by resolution of directors redeem, purchase or otherwise acquire all or any of the shares in the Companysubject to the Articles..VARIATION OF CLASS RIGHTS9.If at any time the issued shares are divided into different classes or series of shares, the rights attached to any class or series (unless otherwise providedby the terms of issue of the shares of that class or series) may, whether or not the Company is being wound up, be varied with the consent in writing of theholders of not less than threefourths of the issued shares of that class or series and of the holders of not less than threefourths of the issued shares ofany other class or series of shares which may be affected by such variation.RIGHTS NOT VARIED BY THE ISSUE OF SHARES PARI PASSU10.The rights conferred upon the holders of the shares of any class issued with preferred or other rights shall not, unless otherwise expressly provided by theterms of issue of the shares of that class, be deemed to be varied by the creation or issue of further shares ranking pari passu therewith.CAPACITY AND POWERS11.Subject to the Act, any other British Virgin Islands legislation and paragraph 12 below the Company has, irrespective of corporate benefit:(a)full capacity to carry on or undertake any business or activity, do any act or enter into any transaction;(b)for the purposes of paragraph (a), full rights, powers and privileges; and(c)full powers to issue shares with preemptive rights, subject to the Articles.2LIMITATIONS ON THE COMPANY’S BUSINESS12.For the purposes of section 9(4) of the Act the Company may not;(a)carry on banking or trust business, unless it is licensed to do so under the Banks and Trust Companies Act, 1990;(b)carry on business as an insurance or reinsurance company, insurance agent or insurance broker, unless it is licensed under the Insurance Act1994;(c)carry on business of company management, unless it is licensed under the Company Management Act, 1990;(d)carry on the business of providing the registered office or the registered agent for companies incorporated in the British Virgin Islands;(e)carry on the business as a mutual fund, manager of mutual funds or administrator of mutual funds unless it is recognized or licenced as the casemay be under the Mutual Funds Act 1996; or(f)carry on any other business that gives rise to a licencing requirement under any law for the time being in force in the British Virgin Islands unlessit is licenced, regulated, recognised or otherwise approved pursuant to such law.REGISTERED SHARES AND PROHIBITION ON ISSUE OF BEARER SHARES13.Shares in the Company may only be issued as registered shares. The issue of shares to bearer is prohibited.PROHIBITION ON EXCHANGE AND CONVERSION OF REGISTERED SHARES TO BEARER SHARES14.The exchange or conversion of registered shares to bearer shares is prohibited.TRANSFER OF REGISTERED SHARES15.Subject to the provisions of the Articles the Company may upon receipt of an instrument of transfer enter the name of the transferee in the register ofmembers subject to the prior or simultaneous approval of the Company as evidenced by a resolution of directors or by a resolution of members. Subject toany resolution of the members to the contrary, the directors may resolve by resolution of directors to refuse or delay the registration of the transfer forreasons that shall be specified in the resolution of directors.AMENDMENT OF MEMORANDUM AND ARTICLES OF ASSOCIATION16.1The Company may amend its Memorandum or Articles by a resolution of members or by a resolution of directors provided that the directors shall not havethe power to amend the Memorandum or Articles;(a)to restrict the rights or powers of the members to amend the Memorandum or Articles;(b)to change the percentage of members required to pass a resolution to amend the Memorandum or Articles;(c)in circumstances where the Memorandum or Articles cannot be amended by the members; or(d)to Clauses 8, 9, 10 or this Clause 12.16.2No amendment may be made to Regulation 76 of the Articles unless approved by an affirmative vote of the holders of 66 2/3 percent or more of theoutstanding votes of the shares entitled to vote thereon.3DEFINITIONS17.The meanings of words in this Memorandum are as defined in the Articles.We, Portcullis TrustNet (BVI) Limited of Portcullis TrustNet Chambers, P.O. Box 3444, Road Town, Tortola, British Virgin Islands for the purpose ofincorporating a BVI Business Company under the laws of the British Virgin Islands hereby sign this Memorandum of Association the 27th day of October,2009.Incorporator/s/ Nicole WheatleyPortcullis TrustNet (BVI) LimitedPortcullis TrustNet ChambersP.O. Box 3444Road Town, TortolaBritish Virgin Islands(Sgd. Nicole Wheatley)4TERRITORY OF THE BRITISH VIRGIN ISLANDSTHE BVI BUSINESS COMPANIES ACT, 2004(No. 16 of 2004)ARTICLES OF ASSOCIATIONOFLuokung Technology Corp.PRELIMINARY1.In these Articles, if not inconsistent with the subject or context, the words and expressions standing in the first column of the following table shall bear themeanings set opposite them respectively in the second column thereof.WordsMeaningApplicable Lawall Laws, including those of a jurisdiction in or outside of the United States, applicable to the Private orPublic Transactions.Actthe BVI Business Companies Act, 2004 (No 16 of 2004.) including any modification, extension, reenactment or renewal thereof and any regulations made thereunder.Articlesthese Articles of Association as originally framed or as from time to time amended.Automatic Conversioneach Preferred Share shall be automatically converted at any time after issue and without the payment ofany additional sum into an equal number of fully paid Ordinary Shares upon the conclusion of anytransfer by Mr. Xuesong Song to any third party through one or more Public Transactions.Designated Stock Exchangeeither the Nasdaq National Stock Market, Inc. or such other exchange or quotation bureau on which, theCompany’s Securities are listed or traded; provided that until the Securities are listed on any such“Exchange” the rules of any such Designated Stock Exchange shall be inapplicable to these Articles.directora director of the Company.distributionin relation to a distribution by a company to a member, means(i)the direct or indirect transfer of an asset, other than the Company’s own shares, to or forthe benefit of the member or(ii)the incurring of a debt to or for the benefit of a member,in relation to shares held by a member, and whether by means of a purchase of an asset, the purchase,redemption or other acquisition of shares, a transfer of indebtedness or otherwise, and includes adividend.Independent Directora person who meets the then current requirements for “independence” of the applicable rules andregulations of the U.S. Securities and Exchange Commission and the Designated Stock Exchange.5member or shareholderin relation to the Company, means a person whose name is entered in the register of members as theholder of one or more shares, or fractional shares, in the Company.Memorandumthe Memorandum of Association of the Company as originally framed or as from time to time amended.Mr. Xuesong Songthe founder, a director and Chairman of LK Technology Ltd.Ordinary Sharesissued or unissued ordinary shares of no par value of the Company having the rights, preferences andprivileges set out in the MemorandumPersonAn individual, a corporation, a trust, trustee, the estate of a deceased individual, a partnership or anunincorporated association of persons.Preferred Sharesissued or unissued preferred shares of no par value of the Company having the rights, preferences andprivileges set out in the MemorandumPrivate Transactionstransactions that are not considered as a Public Transaction.Public Transactionstransactions through any national securities exchanges and/or through the automated quotation systemincluding but not limited to NASDAQ, NYSE (including NYSE American) or OTC Markets, or anytransaction executed by the broker or with a market maker.Related Party(a) any director, officer and employee of the Company; (b) any family member of such director, officer andemployee; and (c) any entity (e.g. a corporation, partnership, or trust) controlled by or set up for thebenefit of a director, officer or employee, or a family member of such director, officer or employee.Relevant SystemA facility for the electronic transfer of uncertificated securities administered by The Depository TrustCompany or such other Person regulated by the SEC.resolution of directors(a)A resolution approved at a duly convened and constituted meeting of directors of the Companyor of a committee of directors of the Company by the affirmative vote of a simple majority of thedirectors present at the meeting who voted and did not abstain; or(b)a resolution consented to in writing by a simple majority of the directors or of all members of thecommittee, as the case may be;except that where a director is given more than one vote, he shall be counted by the number ofvotes he casts for the purpose of establishing a majority.resolution of membersSubject to the provisions of the Memorandum and Articles means:(a)A resolution approved at a duly convened and constituted meeting of the members of theCompany by the affirmative vote of(i)a majority of in excess of 50% of the votes of the shares entitled to vote and voting onthe resolution, or(ii)a majority of in excess of 50% of the votes of each class or series of shares entitled tovote as a class or series and voting on the resolution and a majority of in excess of 50%of the votes of the remaining shares entitled to vote and voting on the resolution; or6(b)a resolution consented to in writing by(i)an absolute majority of the votes of shares entitled to vote thereon, or(ii)an absolute majority of the votes of each class or series of shares entitled to votethereon as a class or series and of an absolute majority of the votes of the remainingshares entitled to vote thereon.SealAny Seal which has been duly adopted as the common seal of the Company.SECThe United States Securities and Exchange Commission.Securitiesshares and debt obligations of every kind, and options, warrants and rights to acquire shares, or debtobligations.SharesOrdinary Shares and/or Preferred Shares, as the case may be.solvency testa company satisfies the solvency test if;(i)the value of the company’s assets exceeds its liabilities, and(ii)the company is able to pay its debts as they fall due.treasury sharesshares in the Company that were previously issued but were repurchased, redeemed or otherwiseacquired by the Company and not cancelled.2.“Written” or any term of like import includes words typewritten, printed, painted, engraved, lithographed, photographed or represented or reproduced byany mode of reproducing words in a visible form, including telex, facsimile, telegram, cable or other form of writing produced by electronic communication.3.Save as aforesaid any words or expressions defined in the Act shall bear the same meaning in these Articles.4.Whenever the singular or plural number, or the masculine, feminine or neuter gender is used in these Articles, it shall equally, where the context admits,include the others.5.A reference in these Articles to voting in relation to shares shall be construed as a reference to voting by members holding the shares except that it is thevotes allocated to the shares that shall be counted and not the number of members who actually voted and a reference to shares being present at a meetingshall be given a corresponding construction.6.A reference to money in these Articles is, unless otherwise stated, a reference to the currency in which shares in the Company shall be issued according tothe provisions of the Memorandum.7REGISTERED SHARES7.Every member holding registered shares in the Company shall be entitled to a certificate signed by a director or officer of the Company or such otherperson who may be authorised from time to time by resolution of directors or under the Seal, with or without the signature of any director of the Company,specifying the share or shares held by him and the signature of the director or officer or person so authorised and the Seal may be facsimiles.8.Any member receiving a share certificate for registered shares shall indemnify and hold the Company and its directors and officers harmless from any lossor liability which it or they may incur by reason of any wrongful or fraudulent use or representation made by any person by virtue of the possessionthereof. If a share certificate for registered shares is worn out or lost it may be renewed on production of the worn out certificate or on satisfactory proof ofits loss together with such indemnity as may be required by a resolution of directors.9.If several persons are registered as joint holders of any shares, any one of such persons may give an effectual receipt for any distribution payable inrespect of such shares.10.Nothing in these Articles shall require title to any shares or other Securities to be evidenced by a certificate if the Act and the rules of the Designated StockExchange permit otherwise.SHARES AND ISSUED SHARES11.Subject to the provisions of these Articles and, if applicable, the rules of the Designated Stock Exchange, and any resolution of members, the directors ofthe Company may, without limiting or affecting any rights previously conferred on the holders of any existing shares or class or series of shares, offer, allot,grant options over or otherwise dispose of shares to such persons, at such times and upon such terms and conditions as the Company may by resolutionof directors determine. The directors shall not issue more shares than the maximum number provided for in the Memorandum.12.The Company may issue fully paid, partly paid or nil paid shares as well as bonus shares. A partly paid or nil paid share or a share issued for a promissorynote or other written obligation for payment of a debt may be issued subject to forfeiture in the manner prescribed in these Articles.13.Shares in the Company may be issued for consideration in any form, including money, a promissory note or other obligation to contribute money orproperty, real property, personal property (including goodwill and knowhow) services rendered or a contract for future services and the amount of suchconsideration shall be determined by resolution of directors, except that in the case of shares with par value, the amount shall not be less than the parvalue, and in the absence of fraud the decision of the directors as to the value of the consideration received by the Company in respect of the issue isconclusive unless a question of law is involved.14.Before issuing shares for a consideration other than money, the directors shall pass a resolution stating;(a)the amount to be credited for the issue of the shares;(b)their determination of the reasonable present cash value of the nonmoney consideration for the issue; and(c)that, in their opinion, the present cash value of the nonmoney consideration for the issue is not less than the amount to be credited for the issueof the shares.15.A share issued by the Company upon conversion of, or in exchange for, another share or a debt obligation or other security in the Company, shall betreated for all purposes as having been issued for money equal to the consideration received or deemed to have been received by the Company in respectof the other share, debt obligation or security.16.Treasury shares may be disposed of by the Company on such terms and conditions (not otherwise inconsistent with these Articles) as the Company mayby resolution of directors determine.17.Subject to these Articles, the Company may purchase, redeem or otherwise acquire and hold its own shares save that the Company may not purchase,redeem or otherwise acquire its own shares without the consent of the member whose shares are to be purchased, redeemed or otherwise acquired unlessthe Company is permitted by the Act or any other provision in the Memorandum or Articles to purchase, redeem or otherwise acquire the shares withouttheir consent.818.No purchase, redemption or other acquisition of shares shall be made unless the directors determine by resolution of the directors that immediately after thepurchase, redemption or other acquisition the value of the Company’s assets will exceed its liabilities and the Company will be able to pay its debts as theyfall due.19.Sections 60 (Process for acquisition of own shares), 61 (Offer to one or more shareholders) and 62 (Shares redeemed otherwise than at the option ofcompany) of the Act shall not apply to the Company.20.A determination by the directors under Article 18 is not required;(a)the Company redeems a share or shares pursuant to a right of a member to have his shares redeemed or to have his shares exchanged for moneyor other property of the Company; or(b)by virtue of the provisions of Section 179 of the Act.21.Shares that the Company purchases, redeems or otherwise acquires pursuant to Article 17 may be cancelled or held as treasury shares except to the extentthat such shares are in excess of 80 percent of the issued shares of the Company in which case they shall be cancelled but they shall be available forreissue.22.Shares in the Company shall only be held as treasury shares where the directors of the Company resolve as such and the number of shares acquired, whenaggregated with shares of the same class already held by the Company as treasury shares, does not exceed 50% of the shares of that class previouslyissued by the Company, excluding shares that have been cancelled. All rights and obligations attaching to a treasury share are suspended and shall not beexercised by or against the Company while it holds the share as a treasury share. Treasury shares may be reissued by the Company as new shares.23.The Company shall keep a register of members containing;(a)the names and addresses of the persons who hold registered shares in the Company;(b)the number of each class and series of registered shares held by each member;(c)the date on which the name of each member was entered in the register of members;(d)the date on which any person ceased to be a member; and(e)such other information as may be prescribed pursuant to the Act.24.The register of members may be in any such form as the directors may approve but if it is in magnetic, electronic or other data storage form, the companymust be able to produce legible evidence of its contents.25.The original or a copy of the register of members shall be kept at the registered office of the Company or at the office of the registered agent of theCompany.26.A share is deemed to be issued when the name of the member is entered in the register of members.27.Subject to the Act and the rules of the Designated Stock Exchange, the board of directors without further consultation with the holders of any shares orSecurities may resolve that any class or series of shares or other Securities from time to time in issue or to be issued (including shares in issue at the date ofthe adoption of these Articles) may be issued, held, registered and converted to uncertificated form.28.Conversion of shares held in certificated form into shares held in uncertificated form, and vice versa, may be made in such manner as the board of directors,in its absolute discretion, may think fit. The Company or any duly authorised transfer agent (a “Transfer Agent”) shall enter on the register of membershow many shares are held by each member in uncertificated form and in certificated form and shall maintain the register of members. Notwithstanding anyprovision of these Articles, a class or series of shares shall not be treated as two classes by virtue only of that class or series comprising both certificatedshares and uncertificated Shares or as a result of any provision of these Articles which apply only in respect of certificated or uncertificated shares.9MORTGAGES AND CHARGES OF REGISTERED SHARES29.Members may mortgage or charge their registered shares in the Company with such mortgage or charge being evidenced in writing and signed by, or withthe authority of the registered holder of a registered share to which the mortgage or charge relates. The Company shall give effect to the terms of any validmortgage or charge except insofar as it may conflict with any requirements herein contained for consent to the transfer of shares.30.In the case of the mortgage or charge of registered shares there may be entered in the share register of the Company at the request of the registered holderof such shares(a)a statement that the shares are mortgaged or charged;(b)the name of the mortgagee or chargee; and(c)the date on which the aforesaid particulars are entered in the share register.31.Where particulars of a mortgage or charge are entered in the register of members, such particulars shall be cancelled(a)with the written consent of the named mortgagee or chargee or anyone authorized to act on his behalf; or(b)upon evidence satisfactory to the directors of the discharge of the liability secured by the mortgage or charge and the issue of such indemnities asthe directors shall consider necessary or desirable.32.Whilst particulars of a mortgage or charge over registered shares are entered in the register of members pursuant to the preceding articles no transfer ofany share comprised therein shall be effected without the written consent of the named mortgagee or chargee or anyone authorized to act on his behalf.FORFEITURE33.When shares not fully paid on issue or issued for a promissory note or other written obligation for payment of a debt have been issued subject toforfeiture, the following provisions shall apply.34.Written notice specifying a date for payment to be made and the shares in respect of which payment is to be made shall be served on the member whodefaults in making payment pursuant to a promissory note or other written obligations to pay a debt.35.The written notice specifying a date for payment shall(a)name a further date not earlier than the expiration of 14 days from the date of service of the notice on or before which payment required by thenotice is to be made; and(b)contain a statement that in the event of nonpayment at or before the time named in the notice the shares, or any of them, in respect of whichpayment is not made will be liable to be forfeited.36.Where a written notice has been issued and the requirements of the notice have not been complied with within the prescribed time, the directors may at anytime before tender of payment forfeit and cancel the shares to which the notice relates.37.The Company is under no obligation to refund any moneys to the member whose shares have been forfeited and cancelled pursuant to these provisions.Upon forfeiture and cancellation of the shares the member is discharged from any further obligation to the Company with respect to the shares forfeitedand cancelled.10LIEN38.The Company shall have a first and paramount lien on every share issued for a promissory note or for any other binding obligation to contribute money orproperty or any combination thereof to the Company, and the Company shall also have a first and paramount lien on every share standing registered in thename of a member, whether singly or jointly with any other person or persons, for all the debts and liabilities of such member or his estate to the Company,whether the same shall have been incurred before or after notice to the Company of any interest of any person other than such member, and whether thetime for the payment or discharge of the same shall have actually arrived or not, and notwithstanding that the same are joint debts or liabilities of suchmember or his estate and any other person, whether a member of the Company or not. The Company’s lien on a share shall extend to all distributionspayable thereon. The directors may at any time either generally, or in any particular case, waive any lien that has arisen or declare any share to be wholly orin part exempt from the provisions of this Article.39.In the absence of express provisions regarding sale in the promissory note or other binding obligation to contribute money or property, the Company maysell, in such manner as the directors may by resolution of directors determine, any share on which the Company has a lien, but no sale shall be made unlesssome sum in respect of which the lien exists is presently payable nor until the expiration of twentyone days after a notice in writing, stating and demandingpayment of the sum presently payable and giving notice of the intention to sell in default of such payment, has been served on the holder for the timebeing of the share.40.The net proceeds of the sale by the Company of any shares on which it has a lien shall be applied in or towards payment of discharge of the promissorynote or other binding obligation to contribute money or property or any combination thereof in respect of which the lien exists so far as the same ispresently payable and any residue shall (subject to a like lien for debts or liabilities not presently payable as existed upon the share prior to the sale) bepaid to the holder of the share immediately before such sale. For giving effect to any such sale the directors may authorize some person to transfer theshare sold to the purchaser thereof. The purchaser shall be registered as the holder of the share and he shall not be bound to see to the application of thepurchase money, nor shall his title to the share be affected by any irregularity or invalidity in the proceedings in reference to the sale.TRANSFER OF SHARES41.Registered shares in the Company are transferred by a written instrument of transfer signed by the transferor and containing the name and address of thetransferee. The instrument of transfer shall be signed by the transferee if registration as a holder of the share shall impose a liability to the Company on thetransferee. The instrument of transfer of a registered share shall be sent to the Company for registration.42.The board of directors may resolve that interests in shares in the form of depositary receipts may be transferred or otherwise dealt with in accordance withthe regulations and practices instituted by the operator of the Relevant System and any holder of interests in shares shall be entitled to transfer suchinterests by means of such Relevant System and the operator of the Relevant System shall act as agent of the holders of such interests for the purposes ofthe transfer of those interests.43.The register of members may be closed at such times and for such periods as the board of directors may from time to time determine, upon notice beinggiven by advertisement in such newspapers as may be required by the Act and the practice of the Designated Stock Exchange.44.The transfer of a registered share is effective when the name of the transferee is entered on the register of members.45.If the directors of the Company are satisfied that an instrument of transfer relating to shares has been signed but that the instrument has been lost ordestroyed, they may resolve;(a)to accept such evidence of the transfer of the shares as they consider appropriate; and(b)that the transferee’s name should be entered in the register of members notwithstanding the absence of the instrument of transfer.46.The Company must on the receipt of an instrument of transfer from the transferor or transferee of a registered share in the Company enter the name of thetransferee of the share in the register or members unless the directors, if permitted by the Memorandum or these Articles, resolve by resolution of directorsto refuse or delay the registration of the transfer for reasons that shall be specified in the resolution of directors.11TRANSMISSION OF SHARES47.The personal representative of a deceased member may transfer a share even though the personal representative is not a member at the time of the transfer.48.The personal representative, executor or administrator of a deceased member, the guardian of an incompetent member or the trustee of a bankrupt membershall be the only person recognized by the Company as having any title to his share but they shall not be entitled to exercise any rights as a member of theCompany until they have proceeded as set forth in the next following three Articles.49.The production to the Company of any document which is evidence of probate of the will, or letters of administration of the estate, or confirmation asexecutor, of a deceased member or of the appointment of a guardian of an incompetent member or the trustee of a bankrupt member shall be accepted by theCompany even if the deceased, incompetent or bankrupt member is domiciled outside the British Virgin Islands if the document evidencing the grant ofprobate or letters of administration, confirmation as executor, appointment as guardian or trustee in bankruptcy is issued by a foreign court which hadcompetent jurisdiction in the matter. For the purpose of establishing whether or not a foreign court had competent jurisdiction in such a matter the directorsmay obtain appropriate legal advice. The directors may also require an indemnity to be given by the executor, administrator, guardian or trustee inbankruptcy.50.The Company may enter in the register of members the name of any person becoming entitled by operation of law or otherwise to a share or shares inconsequence of the death, incompetence or bankruptcy upon such evidence being produced as may reasonably be required by the directors.51.Any person who has become entitled to a share or shares in consequence of the death, incompetence or bankruptcy of any member may, instead of beingregistered himself, request in writing that some person to be named by him be registered as the transferee of such share or shares and such request shalllikewise be treated as if it were a transfer.52.What amounts to incompetence on the part of a person is a matter to be determined by the court having regard to all the relevant evidence and thecircumstances of the case.REDUCTION OR INCREASE IN AUTHORISED AND UNISSUED SHARES48.The Company may amend the Memorandum to increase or reduce the maximum number of shares the Company is authorised to issue and may in respect ofany unissued shares increase or reduce the number of such shares, or effect any combination of the foregoing.49.The Company may(1)(a) divide its shares, including issued shares, into a larger number of shares; or (b) combine its shares, including issued shares, into a smallernumber of shares.(2)A division or combination of shares, including issued shares, of a class or series shall be for a larger or smaller number, as the case may be, ofshares in the same class or series.(3)A company shall not divide its shares under subsection (1)(a) or (2) if it would cause the maximum number of shares that the Company isauthorised to issue by its memorandum to be exceeded.(4)Where shares are divided or combined under this article, the aggregate par value of the new shares must be equal to the aggregate par value of theoriginal shares.MEETINGS AND CONSENTS OF MEMBERS50.The directors of the Company may convene meetings of the members of the Company at such times and in such manner and places within or outside theBritish Virgin Islands as the directors consider necessary or desirable. The Company may hold an annual general meeting, but shall not (unless required bythe applicable rules of the Designated Stock Exchange for so long as the Company’s Securities are listed or traded on the Designated Stock Exchange) beobliged to hold an annual general meeting.51.Upon the written request of members holding 30 percent or more of the outstanding voting shares in the Company the directors shall convene a meeting ofmembers.1252.The directors shall give not less than 7 days notice of meetings of members to those persons whose names on the date the notice is given appear asmembers in the share register of the Company and are entitled to vote at the meeting.53.The directors may fix the date notice is given of a meeting of members as the record date for determining those shares that are entitled to vote at themeeting.54.A meeting of members may be called on short notice:(a)if members holding not less than 90 percent of the total number of shares entitled to vote on all matters to be considered at the meeting, or 90percent of the votes of each class or series of shares where members are entitled to vote thereon as a class or series together with not less than a90 percent majority of the remaining votes, have agreed to short notice of the meeting, or(b)if all members holding shares entitled to vote on all or any matters to be considered at the meeting have waived notice of the meeting and for thispurpose presence at the meeting shall be deemed to constitute waiver.55.The inadvertent failure of the directors to give notice of a meeting to a member, or the fact that a member has not received notice, does not invalidate themeeting.56.A member may be represented at a meeting of members by a proxy who may speak and vote on behalf of the member.57.The instrument appointing a proxy shall be produced at the place appointed for the meeting before the time for holding the meeting at which the personnamed in such instrument proposes to vote.58.An instrument appointing a proxy shall be in substantially the following form or such other form as the Chairman of the meeting shall accept as properlyevidencing the wishes of the member appointing the proxy.(Name of Company)I/Webeing a member of the aboveCompany withshares HEREBY APPOINTofor failing himofto be my/our proxy to vote for me/us at the meeting of members to be held on the dayofand at any adjournment thereof.(Any restrictions on voting to be inserted here.)Signed this day ofMember59.The following shall apply in respect of joint ownership of shares:a.if two or more persons hold shares jointly each of them may be present in person or by proxy at a meeting of members and may speak as a member;b.if only one of the joint owners is present in person or by proxy he may vote on behalf of all joint owners, andc.if two or more of the joint owners are present in person or by proxy they must vote as one.60.A member shall be deemed to be present at a meeting of members if he participates by telephone or other electronic means and all members participating inthe meeting are able to hear each other.61.A meeting of members is duly constituted if, at the commencement of the meeting, there are present in person or by proxy not less than 50 percent of thevotes of the shares or class or series of shares entitled to vote on resolutions of members to be considered at the meeting. If a quorum be present,notwithstanding the fact that such quorum may be represented by only one person then such person may resolve any matter and a certificate signed bysuch person accompanied where such person be a proxy by a copy of the proxy form shall constitute a valid resolution of members.1362.If within two hours from the time appointed for the meeting a quorum is not present, the meeting, if convened upon the requisition of members, shall bedissolved; in any other case it shall stand adjourned to the next business day at the same time and place or to such other time and place as the directorsmay determine, and if at the adjourned meeting there are present within one hour from the time appointed for the meeting in person or by proxy not lessthan one third of the votes of the shares or each class or series of shares entitled to vote on the resolutions to be considered by the meeting, those presentshall constitute a quorum but otherwise the meeting shall be dissolved.63.At every meeting of members, the Chairman of the Board of Directors shall preside as chairman of the meeting. If there is no Chairman of the Board ofDirectors or if the Chairman of the Board of Directors is not present at the meeting, the members present shall choose some one of their number to be thechairman. If the members are unable to choose a chairman for any reason, then the person representing the greatest number of voting shares present inperson or by prescribed form of proxy at the meeting shall preside as chairman failing which the oldest individual member or representative of a memberpresent shall take the chair.64.The chairman may, with the consent of the meeting, adjourn any meeting from time to time, and from place to place, but no business shall be transacted atany adjourned meeting other than the business left unfinished at the meeting from which the adjournment took place.65.At any meeting of the members the chairman shall be responsible for deciding in such manner as he shall consider appropriate whether any resolution hasbeen carried or not and the result of his decision shall be announced to the meeting and recorded in the minutes thereof. If the chairman shall have anydoubt as to the outcome of any resolution put to the vote, he shall cause a poll to be taken of all votes cast upon such resolution, but if the chairman shallfail to take a poll then any member present in person or by proxy who disputes the announcement by the chairman of the result of any vote mayimmediately following such announcement demand that a poll be taken and the chairman shall thereupon cause a poll to be taken. If a poll is taken at anymeeting, the result thereof shall be duly recorded in the minutes of that meeting by the chairman.66.Any person other than an individual shall be regarded as one member and subject to the specific provisions hereinafter contained for the appointment ofrepresentatives of such persons the right of any individual to speak for or represent such member shall be determined by the law of the jurisdiction where,and by the documents by which, the person is constituted or derives its existence. In case of doubt, the directors may in good faith seek legal advice fromany qualified person and unless and until a court of competent jurisdiction shall otherwise rule, the directors may rely and act upon such advice withoutincurring any liability to any member.67.Any person other than an individual which is a member of the Company may by resolution of its directors or other governing body authorize such personas it thinks fit to act as its representative at any meeting of the Company or of any class of members of the Company, and the person so authorized shall beentitled to exercise the same powers on behalf of the person which he represents as that person could exercise if it were an individual member of theCompany.68.The chairman of any meeting at which a vote is cast by proxy or on behalf of any person other than an individual may call for a notarially certified copy ofsuch proxy or authority which shall be produced within 7 days of being so requested or the votes cast by such proxy or on behalf of such person shall bedisregarded.69.Directors of the Company may attend and speak at any meeting of members of the Company and at any separate meeting of the holders of any class orseries of shares in the Company.70.An action that may be taken by the members at a meeting may also be taken by a resolution of members consented to in writing or by telex, telegram, cable,facsimile or other written electronic communication, without the need for any notice, but if any resolution of members is adopted otherwise than by theunanimous written consent of all members, a copy of such resolution shall forthwith be sent to all members not consenting to such resolution. The consentmay be in the form of counterparts, each counterpart being signed by one or more members.14DIRECTORS71.The first directors of the Company shall be appointed by the first registered agent of the Company and thereafter the directors shall be appointed byresolution of members, subject to Article 78, for such term as the members determine. A person shall not be appointed as a director unless he hasconsented in writing to be a director.72.The minimum number of directors shall be one and the maximum number shall be 20. Unless otherwise determined by the Company in a meeting ofshareholders and subject to the requirements of the Memorandum, the directors may by a Resolution of Directors, amend this Regulation 72 to change thenumber of directors. For as long as Securities of the Company are listed or traded on the Designated Stock Exchange, the directors shall include suchnumber of Independent Directors as applicable law, rules or regulations of the Designated Stock Exchange may require for a foreign private issuer as longas the Company is a foreign private issuer.73.Each director shall hold office for the term, if any, fixed by resolution of members or until his earlier death, resignation or removal.74.Where the Company has only one member who is an individual and that member is also the sole director of the Company, that sole member/director may, byinstrument in writing, nominate a person who is not disqualified from being a director of the Company under section 111(1) of the Act as a reserve directorof the Company to act in the place of the sole director in the event of his death.75.The nomination of a person as a reserve director of the Company ceases to have effect if;a.before the death of the sole member/director who nominated him;(i)he resigns as reserve director, or(ii)the sole member/director revokes the nomination in writing; orb.the sole member/director who nominated him ceases to be the sole member/director of the Company for any reason other than his death.76.A director may be removed from office, with or without cause, by a resolution of directors or a resolution of members. For the purposes of this Regulation76, “cause” means the willful and continuous failure by a director to substantially perform his duties to the Company (other than any such failure resultingfrom incapacity due to physical or mental illness) or the willful engaging by the director in gross misconduct materially and demonstrably injurious to theCompany. If a director is removed from office without cause by a resolution of the members, for the purposes of this Regulation, the resolution of memberswill require the affirmative vote of the holders of 66 2/3 percent or more of the outstanding votes of the shares entitled to vote thereon.77.A director may resign his office by giving written notice of his resignation to the Company and the resignation shall have effect from the date the notice isreceived by the Company or from such later date as may be specified in the notice. A director of the Company shall resign forthwith if he is, or becomes,disqualified to act as a director under the Act.78.The directors may at any time by resolution of directors appoint any person to be a director to fill a vacancy. There is a vacancy if a director dies orotherwise ceases to hold office as a director prior to the expiration of his term of office, where his term of office was fixed upon his appointment. Thedirectors may not appoint a director to fill a vacancy for a term exceeding the term that remained when the person who has ceased to be a director left orotherwise ceased to hold office.79.The Company shall keep a register of directors containing:a.the names and addresses of the persons who are directors of the Company or who have been nominated as reserve directors of the Company;b.the date on which each person whose name is entered in the register was appointed as a director of the Company or nominated as a reservedirector of the Company;c.the date on which each person named as a director ceased to be a director of the Company;d.the date on which the nomination of any person nominated as a reserve director ceased to have effect; ande.such other information as may be prescribed pursuant to the Act.1580.The original or a copy of any register of directors shall be kept at the office of the registered agent of the Company.81.The register of directors may be in any such form as the directors may approve but if it is in magnetic, electronic or other data storage form, the companymust be able to produce legible evidence of its contents.82.With the prior or subsequent approval by a resolution of members, the directors may, by a resolution of directors, fix the emoluments of directors withrespect to services to be rendered in any capacity to the Company.83.A director shall not require a share qualification and may be an individual or a company.POWERS OF DIRECTORS84.The business and affairs of the Company shall be managed by the directors who may pay all expenses incurred preliminary to and in connection with theformation and registration of the Company and may exercise all such powers of the Company as are not by the Act or by the Memorandum or theseArticles required to be exercised by the members of the Company, subject to any delegation of such powers as may be authorized by these Articles and tosuch requirements as may be prescribed by a resolution of members; but no requirement made by a resolution of members shall prevail if it be inconsistentwith these Articles nor shall such requirement invalidate any prior act of the directors which would have been valid if such requirement had not been made.Notwithstanding anything in Section 175 of the Act the directors shall have the power to sell, transfer, lease, exchange or otherwise dispose of more thanfifty percent of the assets of the Company without submitting a proposal to or obtaining the consent of the members of the Company.85.If the Company is a whollyowned subsidiary of a holding company a director may when exercising powers or performing duties as a director act in amanner which he believes is in the best interests of the holding company even though it may not be in the best interests of the Company.86.The directors may, by a resolution of directors, appoint any person, including a person who is a director, to be an officer or agent of the Company. Theresolution of directors appointing an agent may authorize the agent to appoint one or more substitutes or delegates to exercise some or all of the powersconferred on the agent by the Company.87.Every officer or agent of the Company has such powers and authority of the directors, including the power and authority to affix the Seal, as are set forth inthese Articles or in the resolution of directors appointing the officer or agent, except that no agent has any power or authority with respect to thefollowing;a.to amend the memorandum or articles;b.to change the registered office or agent;c.to designate committees of directors;d.to delegate powers to a committee of directors;e.to appoint or remove directors;f.to appoint or remove an agent;g.to fix emoluments of directors;h.to approve a plan of merger, consolidation or arrangement;i.to make a declaration of solvency for the purposes of section 198(1)(a) of the Act or to approve a liquidation plan;j.to make a determination under section 57(1) of the Act that the company will, immediately after a proposed distribution, satisfy the solvency test;ork.to authorise the Company to continue as a company incorporated under the laws of a jurisdiction outside the British Virgin Islands.1688.Any director which is a body corporate may appoint any person its duly authorized representative for the purpose of representing it at meetings of theBoard of Directors or with respect to unanimous written consents.89.The continuing directors may act notwithstanding any vacancy in their body, save that if their number is reduced to their knowledge below the numberfixed by or pursuant to these Articles as the necessary quorum for a meeting of directors, the continuing directors or director may act only for the purposeof appointing directors to fill any vacancy that has arisen or for summoning a meeting of members.90.The directors may by resolution of directors exercise all the powers of the Company to borrow money and to mortgage or charge its undertakings andproperty or any part thereof, to issue debentures, debenture stock and other securities whenever money is borrowed or as security for any debt, liability orobligation of the Company or of any third party.91.All cheques, promissory notes, drafts, bills of exchange and other negotiable instruments and all receipts for moneys paid to the Company, shall be signed,drawn, accepted, endorsed or otherwise executed, as the case may be, in such manner as shall from time to time be determined by resolution of directors.92.The Company shall keep a register of all relevant charges created by the Company showing:a.if the charge is a charge created by the Company, the date of its creation or if the charge is existing on property acquired by the Company, the dateon which the property was acquired;b.a short description of the liability secured by the charge;c.a short description of the property charged;d.the name and address of the trustee for the security, or if there is no such trustee the name and address of the chargee;e.unless the charge is a security to bearer, the name and address of the holder of the charge;f.details of any prohibition or restriction , if any, contained in the instrument creating the charge on the power of the company to create any futurecharge ranking in priority to or equally with the charge; andg.such other information as may be prescribed pursuant to the Act.93.The original or a copy of the register of charges shall be kept at the registered office of the Company or at the office of the registered agent of the Company.PROCEEDINGS OF DIRECTORS94.The directors of the Company or any committee thereof may meet at such times and in such manner and places within or outside the British Virgin Islandsas the directors may determine to be necessary or desirable. Any one or more directors may convene a meeting of directors.95.A director shall be deemed to be present at a meeting of directors if he participates by telephone or other electronic means and all directors participating inthe meeting are able to hear each other.96.A director shall be given not less than 3 days notice of meetings of directors, but a meeting of directors held without 3 days notice having been given to alldirectors shall be valid if all the directors entitled to vote at the meeting who do not attend, waive notice of the meeting and for this purpose, the presenceof a director at a meeting shall constitute waiver on his part. The inadvertent failure to give notice of a meeting to a director, or the fact that a director hasnot received the notice, does not invalidate the meeting.1797.A director may by a written instrument appoint an alternate who need not be a director and an alternate is entitled to attend meetings in the absence of thedirector who appointed him and to vote or consent in place of the director.98.A meeting of directors is duly constituted for all purposes if at the commencement of the meeting there are present in person or by alternate not less thanone half of the total number of directors, unless there are only 2 directors in which case the quorum shall be 2.99.If the Company shall have only one director the provisions herein contained for meetings of the directors shall not apply but such sole director shall havefull power to represent and act for the Company in all matters as are not by the Act or the Memorandum or these Articles required to be exercised by themembers of the Company and in lieu of minutes of a meeting shall record in writing and sign a note or memorandum of all matters requiring a resolution ofdirectors. Such a note or memorandum shall constitute sufficient evidence of such resolution for all purposes.100.At every meeting of the directors the Chairman of the Board of Directors shall preside as chairman of the meeting. If there is no Chairman of the Board ofDirectors or if the Chairman of the Board of Directors is not present at the meeting the Vice Chairman of the Board of Directors shall preside. If there is noVice Chairman of the Board of Directors or if the Vice Chairman of the Board of Directors is not present at the meeting the directors present shall choosesome one of their number to be chairman of the meeting.101.An action that may be taken by the directors or a committee of directors at a meeting may also be taken by a resolution of directors or a committee ofdirectors consented to in writing or by telex, telegram, cable, facsimile or other written electronic communication by all directors or all members of thecommittee as the case may be, without the need for any notice. The consent may be in the form of counterparts, each counterpart being signed by one ormore directors.102.The directors shall cause the following records to be kept:a.minutes of all meetings of directors, members, committees of directors and committees of members; andb.copies of all resolutions consented to by directors, members, committees of directors and committees of members.103.The resolutions, records and minutes referred to in the preceding Article shall be kept at the registered office of the Company, its principal place ofbusiness or at such other place as the directors determine.104.The directors may, by resolution of directors, designate one or more committees, each consisting of one or more directors.105.Subject to the following Article, each committee of directors has such powers and authorities of the directors, including the power and authority to affix theSeal, as are set forth in the resolution of directors establishing the committee.106.The directors have no power to delegate the following powers to a committee of directors;a.to amend the memorandum or articles;b.to change the registered office or agent;c.to designate committees of directors;d.to delegate powers to a committee of directors;e.to appoint or remove directors;f.to appoint or remove an agent;g.to fix emoluments of directors;18h.to approve a plan of merger, consolidation or arrangement;i.to make a declaration of solvency for the purposes of section 198(1)(a) or to approve a liquidation plan;j.to make a determination under section 57(1) that the company will, immediately after a proposed distribution, satisfy the solvency test; ork.to authorise the company to continue as a company incorporated under the laws of a jurisdiction outside the British Virgin Islands.Paragraphs (c) and (d) do not prevent a committee of directors, where authorised by the directors, from appointing a subcommittee and delegating powersexercisable by the committee to the subcommittee.107.The meetings and proceedings of each committee of directors consisting of 2 or more directors shall be governed mutatis mutandis by the provisions ofthese Articles regulating the proceedings of directors so far as the same are not superseded by any provisions in the resolution establishing the committee.108.Without prejudice to the freedom of the directors to establish any other committee, if the shares (or depositary receipts therefore) are listed or quoted onthe Designated Stock Exchange, and if required by the Designated Stock Exchange, the directors shall establish and maintain an audit committee as acommittee of the board of directors, the composition and responsibilities of which shall comply with the rules and regulations of the SEC and theDesignated Stock Exchange. The audit committee shall meet at least once every financial quarter, or more frequently as circumstances dictate.109.The Company shall adopt a formal written audit committee charter and review and assess the adequacy of the formal written charter on an annual basis.The charter shall specify the responsibilities of the Audit Committee which shall include responsibility for, among other things, ensuring its receipt from theoutside auditors of the Company of a formal written statement delineating all relationships between the auditor and the Company, and the AuditCommittee’s responsibility for actively engaging in a dialogue with the auditor with respect to any disclosed relationships or services that may impact theobjectivity and independence of the auditor take appropriate action to oversee the independence of the outside auditor. In addition, the Audit Committee isresponsible for reviewing potential conflict of interest situations and approving all Related Party Transactions.110.Without prejudice to the freedom of the directors to establish any other committees, the Board may establish a Stock Option Committee to administer theCompany’s stock option plans, including authority to make and modify awards under such plans. For so long as the Securities of the Company are listed ortraded on the Designated Stock Exchange, the Stock Option Committee shall have at least two Independent Directors. The Stock Option Committee willadminister the Company’s stock option plans, including the authority to make and modify awards under such plans.111.Without prejudice to the freedom of the directors to establish any other committees, the Board may establish a Nominating Committee to assist the Board inidentifying qualified individuals to become members of the Board.OFFICERS112.The Company may by resolution of directors appoint officers of the Company at such times as shall be considered necessary or expedient. Such officersmay consist of a Chairman of the Board of Directors, a Vice Chairman of the Board of Directors, a President and one or more Vice Presidents, Secretaries andTreasurers and such other officers as may from time to time be deemed desirable. Any number of offices may be held by the same person.113.The officers shall perform such duties as shall be prescribed at the time of their appointment subject to any modification in such duties as may beprescribed thereafter by resolution of directors or resolution of members, but in the absence of any specific allocation of duties it shall be the responsibilityof the Chairman of the Board of Directors to preside at meetings of directors and members, the Vice Chairman to act in the absence of the Chairman, thePresident to manage the day to day affairs of the Company, the Vice Presidents to act in order of seniority in the absence of the President but otherwise toperform such duties as may be delegated to them by the President, the Secretaries to maintain the share register, minute books and records (other thanfinancial records) of the Company and to ensure compliance with all procedural requirements imposed on the Company by applicable law, and the Treasurerto be responsible for the financial affairs of the Company.19114.Subject to the rules of the Designated Stock Exchange, the emoluments of all officers shall be fixed by resolution of directors.115.The officers of the Company shall hold office until their successors are duly elected and qualified, but any officer elected or appointed by the directors maybe removed at any time, with or without cause, by resolution of directors. Any vacancy occurring in any office of the Company may be filled by resolutionof directors.CONFLICT OF INTERESTS116.A director of the Company shall, forthwith after becoming aware of the fact that he is interested in a transaction entered into or to be entered into by theCompany, disclose the interest to all other directors of the Company.117.A director of the Company is not required to comply with Article 112 if;a.the transaction or proposed transaction is between the director and the Company; andb.the transaction or proposed transaction is or is to be entered into in the ordinary course of the company’s business and on usual terms andconditions.118.For the purposes of Article 112 a disclosure to all other directors to the effect that a director is a member, director or officer of another named entity or has afiduciary relationship with respect to the entity or a named individual and is to be regarded as interested in any transaction which may, after the date of theentry or disclosure, be entered into with that entity or individual, is a sufficient disclosure of interest in relation to that transaction.119.A.A director of the Company who is interested in a transaction entered into or to be entered into by the Company may:(i)vote on a matter relating to the transaction;(ii)attend a meeting of directors at which a matter relating to the transaction arises and be included among the directors present at the meeting for thepurposes of a quorum; and(iii)sign a document on behalf of the Company, or do any other thing in his capacity as a director, that relates to the transaction,and, subject to compliance with the Act shall not, by reason of his office be accountable to the Company for any benefit which he derives from suchtransaction and no such transaction shall be liable to be avoided on the grounds of any such interest or benefit.119.B.For so long the Securities of the Company are listed or traded on the Designated Stock Exchange, the Company shall conduct an appropriate review of allmaterial Related Party Transactions on an ongoing basis and shall utilize the Audit Committee for the review and approval of potential conflicts of interestsituations.INDEMNIFICATION120.Subject to the limitations hereinafter provided the Company may indemnify against all expenses, including legal fees, and against all judgments, fines andamounts paid in settlement and reasonably incurred in connection with legal, administrative or investigative proceedings any person who;a.is or was a party or is threatened to be made a party to any threatened, pending or completed proceedings, whether civil, criminal, administrative orinvestigative, by reason of the fact that the person is or was a director, an officer or a liquidator of the Company; orb.is or was, at the request of the Company, serving as a director of, or in any other capacity is or was acting for, another body corporate or apartnership, joint venture, trust or other enterprise.20121.The Company may only indemnify a person if the person acted honestly and in good faith in what he believed to be in the best interests of the Companyand, in the case of criminal proceedings, the person had no reasonable cause to believe that his conduct was unlawful.122.For the purposes of the preceding Article, a director acts in the best interests of the Company if he acts in the best interests of;a.the Company’s holding company; orb.a shareholder or shareholders of the Company; in either case, in the circumstances specified in Article 85.123.The decision of the directors as to whether the person acted honestly and in good faith and with a view to the best interests of the Company and as towhether the person had no reasonable cause to believe that his conduct was unlawful is, in the absence of fraud, sufficient for the purposes of theseArticles, unless a question of law is involved.124.The termination of any proceedings by any judgment, order, settlement, conviction or the entering of a nolle prosequi does not, by itself, create apresumption that the person did not act honestly and in good faith and with a view to the best interests of the Company or that the person had reasonablecause to believe that his conduct was unlawful.Consolidated Statements of Changes in Stockholder’s EquityF5Consolidated Statements of Cash FlowsF6Notes to Consolidated Financial StatementsF7 F22F1REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRMTo the Shareholder and the Sole Director ofLK Technology Ltd.Opinion on the Consolidated Financial StatementsWe have audited the accompanying consolidated balance sheets of LK Technology Ltd. and. subsidiaries (the “Company”) as of December 31, 2017 and 2016, andthe related consolidated statements of operations and comprehensive loss, changes in shareholder’s equity and cash flows for each of the years then ended, andthe related notes (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in allmaterial respects, the consolidated financial position of the Company as of December 31, 2017 and 2016, and the consolidated results of its operations and its cashflows for each of the years then ended, in conformity with accounting principles generally accepted in the United States of America.Basis for OpinionThese consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’sconsolidated financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (UnitedStates) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules andregulations of the Securities and Exchange Commission and the PCAOB.We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonableassurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have,nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internalcontrol over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting.Accordingly, we express no such opinion.An independent member firm of Moore Stephens International Limited – members in principal cities throughout the worldOur audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, andperforming procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in theconsolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well asevaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion.Certified Public AccountantsWe have served as the Company’s auditor since 2018.Hong KongMay 25, 2018F2LK TECHNOLOGY LTD. AND SUBSIDIARIESCONSOLIDATED BALANCE SHEETS(IN U.S. DOLLARS)As of December 31,20172016AssetsCurrent assets:Cash and cash equivalents$72,379$83,843Accounts receivable, net of allowance for doubtful accounts9,729,6251,865,836Other receivables and prepayment2,376,7452,287,934Amounts due from related parties11,760,692Total current assets23,939,4414,237,613Property and equipment, net5,044,8727,771,027Intangible assets, net1,154,1971,682,445Goodwill7,239,9367,239,936Amount due from a related party204,412183,811TOTAL ASSETS37,582,85821,114,832LiabilitiesCurrent liabilities:Accounts payable8,784,5186,446,584Accrued liabilities and other payables12,962,91211,329,613Amounts due to related parties3,563,68316,129,323Total current liabilities25,311,11333,905,520Total liabilities25,311,11333,905,520Commitments and contingenciesShareholder’s Equity (Deficit)Share capitalCommon stock, $1 par value per share; 50,000 shares authorized as of December 31, 2017 and 2016, 1 share issued andoutstanding as of December 31, 2017 and 201611Additional paidin capital41,819,68510,037,469Accumulated deficit(29,936,158)(23,125,704)Accumulated other comprehensive income (loss)388,217297,546Total Shareholder’s Equity (Deficit)12,271,745(12,790,688)TOTAL LIABILITIES AND SHAREHOLDER’S EQUITY (DEFICIT)$37,582,858$21,114,832F3LK TECHNOLOGY LTD. AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS(IN U.S. DOLLARS)For the years endedDecember 31,20172016Revenues$26,082,417$5,233,145Less: Cost of revenues5,547,7796,315,504Less: Operating expenses:Selling and marketing23,908,7336,209,804General and administrative2,451,2492,108,854Research and development1,046,1982,882,202Total operating expenses27,406,18011,200,860Loss from operations(6,871,542)(12,283,219)Other income (expense):Interest expense(26,611)(4,412)Foreign exchange gains (losses)350,679(298,257)Loss from investment(428,571)Other income (expense), net(262,980)(34,572)Total other income (expense), net61,088(765,812)Loss before income taxes(6,810,454)(13,049,031)Income taxesNet loss$(6,810,454)$(13,049,031)Other comprehensive income:Foreign currency translation adjustment90,671387,375Total comprehensive loss$(6,719,783)$(12,661,656)F4LK TECHNOLOGY LTD. AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDER’S EQUITY(IN U.S. DOLLARS)Accumulated otherTotalOrdinary sharesAdditionalpaidin AccumulatedcomprehensiveIncomeShareholder’sEquity SharesAmountcapitaldeficits(loss)(Deficit)Balance as of December 31, 20151$ 1$8,250,505$(10,076,673)$(89,829)$(1,915,996)Capital contribution from C Media1,786,9641,786,964Net loss(13,049,031)(13,049,031)Foreign currency translation adjustment387,375387,375Balance as of December 31, 20161110,037,469(23,125,704)297,546(12,790,688)Capital contribution from C Media31,782,21631,782,216Net loss(6,810,454)(6,810,454)Foreign currency translation adjustment90,67190,671Balance as of December 31, 20171$1$41,819,685$(29,936,158)$388,217$12,271,745F5LK TECHNOLOGY LTD. AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF CASH FLOWS(IN U.S. DOLLARS)For the years endedDecember 31,20172016CASH FLOWS FROM OPERATING ACTIVITIES:Net loss$(6,810,454)$(13,049,031)Depreciation and amortization3,316,1813,245,161Loss on disposal of property and equipment115,19373,022Increase in allowance for doubtful accounts445,39562,591Changes in assets and liabilitiesAccounts receivable(7,933,730)(1,507,296)Other receivables and prepayment(2,202,960)2,873,984Accounts payable2,230,5434,757,457Accrued liabilities and other payables1,866,1377,483,441Net cash (used in) provided by operating activities(8,973,695)3,939,329CASH FLOWS FROM INVESTING ACTIVITIES:Purchase of property and equipment(12,689)(3,554,258)Proceeds from disposal of property and equipment29,942Net cash provided by (used in) investing activities17,253(3,554,258)CASH FLOWS FROM FINANCING ACTIVITIES:Advances from related parties8,938,290(1,197,870)Net cash provided by (used in) financing activities8,938,290(1,197,870)Effect of exchange rate changes6,688(32,746)Net decrease in cash and cash equivalents(11,464)(845,545)Cash and cash equivalents, at beginning of year83,843929,388Cash and cash equivalents, at end of year$72,379$83,843Supplemental cash flow disclosures:Interest paid26,6114,412Income taxes paidF6LK TECHNOLOGY LTD. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS(IN U.S. DOLLARS)NOTE 1 – DESCRIPTION OF BUSINESS AND ORGANIZATIONStar Chariot Limited was incorporated in the British Virgin Islands (“BVI”) as an exempted limited liability company on March 3, 2011. On January 18, 2018, it wasrenamed as LK Technology Ltd. (“LK Technology ” or the “Company”).LK Technology, its subsidiaries and its variable interest entities (“VIEs”) (collectively the “Group”) operate mobile application service for longdistance travel in thePeople’s Republic of China (the “PRC”). The core mobile application product, Luokuang, is made as an LBSsocial contents and services distribution platform. Itoffers functions based on various travel scenarios, e.g. information, entertainment, travel, ecommerce, O2O, advertising, etc.As of December 31, 2017, details of the Company’s subsidiaries and VIEs are as follows:NameDate ofincorporationPlace ofincorporationPercentage oflegal ownershipSubsidiaries:MMB LimitedApr 11, 2013Hong Kong100%Mobile Media (China) LimitedNov 6, 2007Hong Kong100%Zhong Chuan Tian Xia Information and Technology (Beijing) LimitedFeb 1, 2013PRC100%Zhong Chuan Tian Xia Information and Technology (Shenzhen) LimitedDec 23, 2010PRC100%VIEs:Beijing Zhong Chuan Shi Xun Technology Limited (“Zhong Chuan Shi Xun”)May 17, 2004PRC100%Jiangsu Zhong Chuan Rui You Information and Technology Limited (“Zhong Chuan Rui You”)May 26, 2011PRC100%Huoerguosi Luokuang Information and Technology Limited (“Huoerguosi Luokuang”)Jul 19, 2017PRC100%Shenzhen Jiu Zhou Shi Dai Digital and Technology Limited (“Jiu Zhou Shi Dai”)Nov 26, 2004PRC100%F7NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIESBasis of presentationThe consolidated financial statements of the Group have been prepared in accordance with accounting principles generally accepted in the United States of America(“US GAAP”).The Group incurred losses from operations of $6,871,542 and $12,283,219 for the years ended December 31, 2017 and 2016, respectively. As of December 31, 2017, theGroup had a shareholder’s equity of $12,271,145. The Group had negative cash flows from operating activities for the year ended December 31, 2017 of $8,973,695.As of December 31, 2017, the Group had cash and cash equivalents of $72,379 and a working capital deficit of $1,371,672. From 2018 and onwards, the Group willfocus on improving operation efficiency and cost reduction, and enhancing marketing functions to attract more users. The Group regularly monitors its current andexpected liquidity requirements to ensure that it maintains sufficient cash balances and accessible credit to meet its liquidity requirements in the short and long term.The parent company continues to provide cash flow to the Group. Based on working capital conditions and forecast for future operations, the Group believes that itwill be able to meet its payment obligations and other commitments for at least the following twelve months.Principles of consolidationThe consolidated financial statements include the financial statements of the Company, its subsidiaries, including the whollyforeign owned enterprises (“WFOEs”),and VIEs for which the Company is the primary beneficiary. All transactions and balances among the Company, its subsidiaries and consolidated VIEs have beeneliminated upon consolidation. The results of subsidiaries and consolidated VIEs acquired or disposed of are recorded in the consolidated statements of operationsfrom the effective date of acquisition or up to the effective date of disposal, as appropriate.A subsidiary is an entity in which (i) the Company directly or indirectly controls more than 50% of the voting power; or (ii) the Company has the power to appoint orremove the majority of the members of the board of directors or to cast a majority of votes at the meeting of the board of directors or to govern the financial andoperating policies of the investee pursuant to a statute or under an agreement among the shareholders or equity holders. A VIE is required to be consolidated by theprimary beneficiary of the entity if the equity holders in the entity do not have the characteristics of a controlling financial interest or do not have sufficient equity atrisk for the entity to finance its activities without additional subordinated financial support from other parties.F8To comply with the PRC legal restrictions on foreign ownership of companies that operate mobile application services, the Group operates in such restricted servicesin the PRC through certain PRC domestic companies, whose equity interests are held by certain management members or founders of the Group. Part of theregistered capital of these PRC domestic companies was funded by certain management members or founders of the Group. The Group has entered into certainexclusive business services agreements with these PRC domestic companies, which entitle it to receive a majority of their residual returns and make it obligatory forthe Group to absorb a majority of the risk of losses from their activities. In addition, the Group has entered into certain agreements with those management membersor founders, including equity interest pledge agreements of the equity interests held by those management members or founders and exclusive option agreements toacquire the equity interests in these companies when permitted by the PRC laws, rules and regulations.Details of the typical VIE structure of the Group’s significant consolidated VIEs, primarily domestic companies associated with the operations such as Zhong ChuanShi Xun, Zhong Chuan Rui You, Huoerguosi Luokuang and Jiu Zhou Shi Dai, are set forth below:(i)Contracts that give the Group effective control of VIEsExclusive option agreementsThe VIE equity holders have granted the WFOEs exclusive call options to purchase their equity interest in the VIEs at an exercise price equal to the higherof (i) the registered capital in the VIEs; and (ii) the minimum price as permitted by applicable PRC laws. Each relevant VIE has further granted the relevantWFOE an exclusive call option to purchase its assets at an exercise price equal to the book value of the assets or the minimum price as permitted byapplicable PRC laws, whichever is higher. The WFOEs may nominate another entity or individual to purchase the equity interest or assets, if applicable,under the call options. Each call option is exercisable subject to the condition that applicable PRC laws, rules and regulations do not prohibit completion ofthe transfer of the equity interest or assets pursuant to the call option. Each WFOE is entitled to all dividends and other distributions declared by the VIE,and the VIE equity holders have agreed to give up their rights to receive any distributions or proceeds from the disposal of their equity interests in the VIEwhich are in excess of the original registered capital that they contributed to the VIE, and to pay any such distributions or premium to the WFOE. Theexclusive call option agreements remain in effect until the equity interest or assets that are the subject of such agreements are transferred to the WFOEs.Equity pledge agreementsPursuant to the relevant equity pledge agreements, the relevant VIE equity holders have pledged all of their interests in the equity of the VIEs as acontinuing first priority security interest in favor of the corresponding WFOEs to secure the performance of obligations by the VIEs and/or the equityholders under the other structure contracts. Each WFOE is entitled to exercise its right to dispose of the VIE equity holders’ pledged interests in the equityof the VIE and has priority in receiving payment by the application of proceeds from the auction or sale of such pledged interests, in the event of anybreach or default under the loan agreement or other structure contracts, if applicable. These equity pledge agreements remain in force for the duration ofthe relevant loan agreement and other structure contracts.F9(ii)Contracts that enable the Group to receive substantially all of the economic benefits from the VIEsExclusive business services agreementsEach relevant VIE has entered into an exclusive business services agreement with the respective WFOE, pursuant to which the relevant WFOE providesexclusive business services to the VIE. In exchange, the VIE pays a service fee to the WFOE which typically amounts to what would be substantially all ofthe VIE’s pretax profit, resulting in a transfer of substantially all of the profits from the VIE to the WFOE.Other arrangementsThe exclusive call option agreements described above also enable the Group to receive substantially all of the economic benefits from the VIEs by typicallyentitling the WFOEs to all dividends and other distributions declared by the VIEs and to any distributions or proceeds from the disposal by the VIE equityholders of their equity interests in the VIEs that are in excess of the original registered capital that they contributed to the VIEs.Based on these contractual agreements, the Group believes that the PRC domestic companies as described above should be considered as VIEs because the equityholders do not have significant equity at risk nor do they have the characteristics of a controlling financial interest. Given that the Group is the primary beneficiaryof these PRC domestic companies, the Group believes that these VIEs should be consolidated based on the structure as described above.Under the contractual arrangements with the consolidated VIEs, the Group has the power to direct activities of the consolidated VIEs and can have assetstransferred out of the consolidated VIEs under its control. Therefore, the Group considers that there is no asset in any of the consolidated VIEs that can be usedonly to settle obligations of the consolidated VIEs, except for registered capital and PRC statutory reserves. As all consolidated VIEs are incorporated as limitedliability companies under the Company Law of the PRC, creditors of the consolidated VIEs do not have recourse to the general credit of the Group for any of theliabilities of the consolidated VIEs.Currently there is no contractual arrangement which requires the Group to provide additional financial support to the consolidated VIEs. However, as the Groupconducts its businesses primarily based on the licenses and approvals held by its consolidated VIEs, the Group has provided and will continue to provide financialsupport to the consolidated VIEs considering the business requirements of the consolidated VIEs, as well as the Group’s own business objectives in the future.F10Use of estimatesThe preparation of financial statements in conformity with US GAAP requires the Group to make estimates and assumptions that affect the reported amounts ofassets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expensesduring the reporting period. The most significant estimates are the allowance for doubtful accounts, the useful lives of property and equipment and intangibleassets, impairment of longlived assets and goodwill. Actual results could differ from those estimates.Fair value measurementsFair value is the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at themeasurement date under current market conditions. When determining the fair value measurements for assets and liabilities required or permitted to be recorded atfair value, the Group considers the principal or most advantageous market in which it would transact and it considers assumptions that market participants woulduse when pricing the asset or liability.Authoritative literature provides a fair value hierarchy which prioritizes the inputs to valuation techniques used to measure fair value into three broad levels. Thelevel in the hierarchy within which the fair value measurement in its entirety falls is based upon the lowest level of input that is significant to the fair valuemeasurement as follows:Level 1Level 1 applies to assets or liabilities for which there are quoted prices in active markets for identical assets or liabilities.Level 2Level 2 applies to assets or liabilities for which there are inputs other than quoted prices included within Level 1 that are observable for the asset or liability such asquoted prices for similar assets or liabilities in active markets; quoted prices for identical assets or liabilities in markets with insufficient volume or infrequenttransactions (less active markets); or modelderived valuations in which significant inputs are observable or can be derived principally from, or corroborated by,observable market data.Level 3Level 3 applies to assets or liabilities for which there are unobservable inputs to the valuation methodology that are significant to the measurement of the fair valueof the assets or liabilities.F11Cash and cash equivalentsCash and cash equivalents primarily consist of cash, money market funds, investments in interest bearing demand deposit accounts, time deposits and highly liquidinvestments with original maturities of three months or less from the date of purchase and are stated at cost which approximates their fair value. The Group has nocash equivalents.Accounts receivable, net of allowanceAccounts receivable are recognized and carried at the original invoiced amount less an allowance for any potential uncollectible amounts. An estimate for doubtfuldebts is made when collection of the full amount is no longer probable. Bad debts are written off as incurred. The Group generally does not require collateral from itscustomers.The Group maintains allowances for doubtful accounts for estimated losses resulting from the failure of customers to make payments on time. The Group reviews theaccounts receivable on a periodic basis and makes specific allowances when there is doubt as to the collectability of individual balances. In evaluating thecollectability of individual receivable balances, the Group considers many factors, including the age of the balance, the customer’s payment history, its currentcreditworthiness and current economic trends.Property and equipment, netProperty and equipment are carried at cost less accumulated depreciation. Depreciation is calculated on a straightline basis over the following estimated usefullives:Wifi equipment– 3 yearsOffice equipment– 3 to 5 yearsVehicles– 5 yearsCosts of repairs and maintenance are expensed as incurred and asset improvements are capitalized. The gain or loss on disposal of property and equipment is thedifference between the net sales proceeds and the carrying amount of the relevant assets and is recognized in the consolidated income statement. When propertyand equipment are retired or otherwise disposed of, the cost and accumulated depreciation are removed from the accounts and any resulting gain or loss is includedin the results of operations for the respective period.Construction in progressAssets under construction are not depreciated until construction is completed and the assets are ready for their intended use.F12Intangible assetsIntangible assets with finite lives are amortized using the straightline method over the estimated economic lives.Intangible assets have weighted average economic lives from the date of purchase as follows:Software– 5 yearsTrademarks– 10 yearsGoodwillThe Group assesses goodwill for impairment in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”)subtopic 35020, Intangibles—Goodwill and Other: Goodwill (“ASC 35020”), which requires that goodwill to be tested for impairment at the reporting unit level atleast annually and more frequently upon the occurrence of certain events, as defined by ASC 35020.We have the option to assess qualitative factors first to determine whether it is necessary to perform the twostep test in accordance with ASC 35020. If we believe,as a result of the qualitative assessment, that it is morelikelythannot that the fair value of the reporting unit is less than its carrying amount, the twostepquantitative impairment test described below is required. Otherwise, no further testing is required. In the qualitative assessment, we consider primary factors such asindustry and market considerations, overall financial performance of the reporting unit, and other specific information related to the operations. In performing thetwostep quantitative impairment test, the first step compares the carrying amount of the reporting unit to the fair value of the reporting unit based on either quotedmarket prices of the ordinary shares or estimated fair value using a combination of the income approach and the market approach. If the fair value of the reportingunit exceeds the carrying value of the reporting unit, goodwill is not impaired and we are not required to perform further testing. If the carrying value of the reportingunit exceeds the fair value of the reporting unit, then we must perform the second step of the impairment test in order to determine the implied fair value of thereporting unit’s goodwill. The fair value of the reporting unit is allocated to its assets and liabilities in a manner similar to a purchase price allocation in order todetermine the implied fair value of the reporting unit goodwill. If the carrying amount of the goodwill is greater than its implied fair value, the excess is recognized asan impairment loss.In 2017, we performed a qualitative assessment for goodwill. Based on the requirements of ASC35020, we evaluated all relevant factors, including but not limited tomacroeconomic conditions, industry and market conditions, financial performance. We weighed all factors in their entirety and concluded that it was not morelikelythannot the fair value was less than the carrying amount of the reporting unit, and further impairment testing on goodwill was unnecessary as of December 31, 2017and 2016.F13Impairment or disposal of longlived assetsLonglived assets other than goodwill are included in impairment evaluations when events and circumstances exist that indicate the carrying value of these assetsmay not be recoverable. In accordance with FASB ASC 360, Property, Plant and Equipment, the Group assesses the recoverability of the carrying value of longlivedassets by first grouping its longlived assets with other assets and liabilities at the lowest level for which identifiable cash flows are largely independent of the cashflows of other assets and liabilities (the asset group) and, secondly, estimating the undiscounted future cash flows that are directly associated with and expected toarise from the use of and eventual disposition of such asset group. If the carrying value of the asset group exceeds the estimated undiscounted cash flows, theGroup recognizes an impairment loss to the extent the carrying value of the longlived asset exceeds its fair value. The Group determines fair value through quotedmarket prices in active markets or, if quotations of market prices are unavailable, through the performance of internal analysis using a discounted cash flowmethodology or obtains external appraisals from independent valuation firms. The undiscounted and discounted cash flow analyses are based on a number ofestimates and assumptions, including the expected period over which the asset will be utilized, projected future operating results of the asset group, discount rateand longterm growth rate.As of December 31, 2017 and 2016, the Group assessed the impairment of its longlived assets and concluded that there was no impairment indication.Business combinationWe account for business combinations using the purchase method of accounting in accordance with FASB ASC topic 805, Business combinations. The purchasemethod accounting requires that the consideration transferred be allocated to the assets, including separately identifiable assets and liabilities we acquired, basedon their estimated fair values. The consideration transferred in an acquisition is measured as the aggregate of the fair values at the date of exchange of the assetsgiven, liabilities incurred, and equity instruments issued as well as the contingent considerations and all contractual contingencies as of the acquisition date. Thecosts directly attributable to the acquisition are expensed as incurred. Identifiable assets, liabilities and contingent liabilities acquired or assumed are measuredseparately at their fair value as of the acquisition date, irrespective of the extent of any noncontrolling interests. The excess of (i) the total of cost of acquisition, fairvalue of the noncontrolling interests and acquisition date fair value of any previously held equity interest in the acquiree over (ii) the fair value of the identifiable netassets of the acquiree, is recorded as goodwill. If the cost of acquisition is less than the fair value of the net assets of the subsidiary acquired, the difference isrecognized directly in earnings.Revenue recognitionThe Group recognizes revenue in accordance with FASB ASC topic 605, Revenue Recognition (“ASC 605”). Revenue is recognized when the following four revenuerecognition criteria are met: (i) persuasive evidence of an arrangement exists, (ii) delivery has occurred or services have been provided, (iii) the selling price is fixed ordeterminable, and (iv) collectability is reasonably assured.F14Displaybased online advertising servicesThe Group provides displaybased online advertising services to customers by integrating text description, image and video, and displaying the advertisements in aprominent position of LuoKuang Application. The Group recognizes revenue in accordance with ASC 605, over the contractual term based on the agreements andconfirmation letters signed by both parties, commencing on the date the customer’s advertisement is displayed on the Group’s platform.Foreign currency translationThe functional and reporting currency of the Company and the Company’s subsidiaries domiciled in BVI and Hong Kong are the United States dollar (“U.S. dollar”).The financial records of the Company’s other subsidiaries and VIEs located in the PRC are maintained in their local currency, the Chinese Renminbi (“RMB”), whichare the functional currency of these entities.Monetary assets and liabilities denominated in currencies other than the functional currency are translated into the functional currency at the rates of exchangeruling at the balance sheet date. Transactions in currencies other than the functional currency during the year are converted into the functional currency at theapplicable rates of exchange prevailing when the transactions occurred. Transaction gains and losses are recognized in the statements of operations.The Company’s entities with a functional currency of RMB translate their operating results and financial position into the U.S. dollar, the Company’s reportingcurrency. Assets and liabilities are translated using the exchange rates in effect on the balance sheet date. Revenues, expenses, gains and losses are translatedusing the average rate for the year. Retained earnings and equity are translated using the historical rate. Translation adjustments are reported as cumulativetranslation adjustments and are shown as a separate component of other comprehensive income.Income taxesDeferred income taxes are recognized for temporary differences between the tax basis of assets and liabilities and their reported amounts in the financial statements,net operating loss carry forwards and credits, by applying enacted statutory tax rates applicable to future years. Deferred tax assets are reduced by a valuationallowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Current income taxesare provided for in accordance with the laws and regulations applicable to the Group as enacted by the relevant tax authorities.The impact of an uncertain income tax position on the income tax return must be recognized at the largest amount that is morelikelythan not to be sustained uponaudit by the relevant tax authorities. An uncertain income tax position will not be recognized if it has less than a 50% likelihood of being sustained. Additionally, theGroup classifies the interest and penalties, if any, as a component of the income tax expense. For years ended December 31, 2017 and 2016, the Group did not haveany material interest or penalties associated with tax positions nor did the Group have any significant unrecognized uncertain tax positions.F15Related partiesParties are considered to be related to the Company if the parties, directly or indirectly, through one or more intermediaries, control, are controlled by, or are undercommon control with the Company. Related parties also include principal owners of the Company, its management, members of the immediate families of principalowners of the Company and its management and other parties with which the Company may deal with if one party controls or can significantly influence themanagement or operating policies of the other to an extent that one of the transacting parties might be prevented from fully pursuing its own separate interests. TheCompany discloses all significant related party transactions.LeasesLeases have been classified as either capital or operating leases. Leases that transfer substantially all the benefits and risks incidental to the ownership of assets areaccounted for as if there was an acquisition of an asset and incurrence of an obligation at the inception of the lease. All other leases are accounted for as operatingleases wherein rental payments are expensed as incurred.When the Group is the lessor, minimum contractual rental from leases are recognized on a straightline basis over the noncancelable term of the lease. With respectto a particular lease, actual amounts billed in accordance with the lease during any given period may be higher or lower than the amount of rental revenue recognizedfor the period. Straightline rental revenue commences when the customer assumes control of the leased premises. Accrued straightline rents receivable representsthe amount by which straightline rental revenue exceeds rents currently billed in accordance with lease agreements. Contingent rental revenue is accrued when thecontingency is removed.Advertising costsAdvertising costs include expenses associated with direct marketing. All advertising costs are expensed as incurred and included in selling and marketing expenses.During the years ended December 31, 2017 and 2016, advertising costs amounted to $23,171,170 and $4,537,653, respectively.Comprehensive lossComprehensive loss includes net loss and foreign currency translation adjustments and is presented net of tax. The tax effect is nil for the two years endedDecember 31, 2017 and 2016 in the consolidated statements of comprehensive loss.Concentration of credit riskFinancial instruments that potentially expose the Group to concentrations of credit risk consist primarily of cash and accounts receivable. The Group places its cashwith financial institutions with highcredit rating and quality in China. For the year ended December 31, 2017, two customers accounted for over 10% of totalrevenue. For the year ended December 31, 2016, four customers accounted for over 10% of total revenue. At December 31, 2017 and 2016, the Group had credit riskexposure of uninured cash in banks of approximately $72,379 and $83,843, respectively.F16NOTE 3 – INCOME TAXAt December 31, 2017 and 2016, the Group had an unused net operating loss carryforwards of approximately $25,123,726 and $20,081,239, respectively, for income taxpurposes, which expires between 2018 to 2022 and between 2017 to 2021, respectively. At December 31, 2017 and 2016, these net operating losses carryforwards mayresult in future income tax benefits of approximately $5,043,944 and $4,008,863, respectively, however, because realization is uncertain at this time, a valuationallowance in the same amount has been established. Deferred income taxes reflect the net effects of temporary differences between the carrying amounts of assetsand liabilities for financial reporting purposes and the amounts used for income tax purposes.Significant components of the Group’s deferred tax liabilities and assets of December 31, 2017 and 2016 are as follows:December 31,December 31,20172016Deferred tax liabilities$$Deferred tax assetNet operating loss carryforward5,043,9444,008,863Valuation allowance(5,043,944)(4,008,863)Net deferred tax assetMovement of valuation allowanceDecember 31,2017December 31,2016At the beginning of the year$4,008,863$2,049,352Current year addition823,9702,159,518Expired(61,411)Exchange difference272,522(200,007)At the end of the year5,043,9444,008,863The Company is not subject to taxation in BVI under the current BVI law. Subsidiaries operating in the PRC are subject to PRC Enterprise Income Tax at the statutoryrate of 25% for the years ended December 31, 2017 and 2016. Subsidiaries operating in Hong Kong are subject to Hong Kong income taxes at a rate of 16.5% for theyears ended December 31, 2017 and 2016.F17A reconciliation of the income tax expense to the amount computed by applying the current statutory tax rate to the loss before income taxes in the consolidatedstatements of comprehensive income is as follows:December 31,December 31,20172016Loss before income taxes$(6,810,454)$(13,049,031)Tax loss at statutory tax rate(1,655,174)(3,386,822)Nondeductible items6,729,2551,712,857Nontaxable items(3,789,956)(674,189)Change in valuation allowance823,9702,159,518Tax benefits(2,108,095)188,636Income tax expensesNOTE 4 – ACCOUNTS RECEIVABLEAt December 31, 2017 and 2016, accounts receivable consisted of the following:December 31,December 31,20172016Accounts receivable$10,406,602$2,098,946Less: allowance for doubtful accounts676,977233,110$9,729,625$1,865,836NOTE 5 – OTHER RECEIVABLESAt December 31, 2017 and 2016, other receivables consisted of the following:December 31,2017December 31,2016Advances to suppliers$339,701$181,472VAT recoverable (1)3,033,0651,662,805Other5,048,189485,152$2,376,745$2,287,934(1)The balance of advanced VAT represents input VAT available for deducting the amount of VAT paid in the future. During the years ended December 31, 2017and 2016, the Group purchased a large amount of WiFi equipment for deployments, which generated related input VAT approved by tax authority.F18NOTE 6 – AMOUNTS DUE FROM RELATEDPARTIESAt December 31, 2017 and 2016, amounts due from related parties consisted of the following:Name of related partyDecember 31,2017December 31,2016C Media Limited (1)$11,760,692$Ya Tuo Ji International Consultancy (Beijing) Limited (2)204,412183,811(1)C Media Limited is the parent company of LK Technology. The Group expects the amounts due from the related party will be returned to the Group within oneyear.(2)Ya Tuo Ji is a company controlled by the spouse of a major shareholder of C Media Limited. The loan is unsecured, interestfree and repayable on January 5,2019.NOTE 7 – PROPERTY AND EQUIPMENTAt December 31, 2017 and 2016, property and equipment consisted of the following:December 31,December 31,Useful life20172016WiFi equipment3 Years$8,711,424$8,367,678Vehicles5 Years43,246Office and other equipment3 – 5 Years170,242416,434Constructioninprogress2,166,4522,652,28811,048,11811,479,646Less: accumulated depreciation(6,003,246)(3,708,619)$5,044,872$7,771,027For the years ended December 31, 2017 and 2016, depreciation expense amounted to $2,628,884 and $2,474,434, respectively, of which $2,423,655 and $2,194,582,respectively, was included in cost of revenue, $117,648 and $121,740, respectively, was included in selling and marketing expenses and the remainder was included ingeneral and administrative expense.Included in constructioninprogress are WiFI equipment under construction.F19NOTE 8 – GOODWILLIn September of 2014, Zhong Chuan Shi Xun acquired a 100% interest in Zhong Chuan Rui You for a consideration of $7,391,894 (RMB48,000,000). Zhong Chuan RuiYou is primarily engaged in on train WiFi business, deploying WiFi equipment on trains and providing passengers with entertainment and information services ontrains. The book value of the identifiable net assets of Zhong Chuan Rui You was $151,958 (RMB963,000) and a goodwill of $7,239,936 was recorded.NOTE 9 – ACCRUED LIABILITIES AND OTHER PAYABLESAt December 31, 2017 and 2016, accrued liabilities and other payables consisted of the following:December 31,December 31,20172016Deferred revenue$2,326,406$302,735Accrued payroll143,998316,458Other taxes payable3,544,469461,699Other payable852,384686,526Other loans6,095,6559,562,915$12,962,912$11,329,613Deferred revenue represents prepayments from customers for advertising service and is recognized as revenue when the advertising services are rendered.Other loans of $939,555 and $57,416, respectively, as of December 31, 2017 and 2016, are unsecured, bear daily interest at 0.04% and are repayable on demand.NOTE 10 – AMOUNTS DUE TO RELATED PARTIESAt December 31, 2017 and 2016, amounts due to related parties consisted of the following:December 31,December 31,Name of related party20172016Mr. Song Xuesong (“Mr. Song”) (1)$2,921,639$10,669,325C Media Limited (2)$$4,855,236Thumb Beijing Branch (3)$612,103$576,560Thumb Shenzhen Branch (3)$29,941$28,202(1) The Group’s CEO(2) C Media Limited, the parent company.(3) Thumb Beijing and Shenzhen Branch are controlled by the spouse of Mr. Song.Amounts due to related parties are shortterm in nature, noninterest bearing, unsecured and payable on demand.F20NOTE 11 – RETIREMENT AND WELFARE BENEFITSThe Group’s fulltime employees are entitled to staff welfare benefits including medical care, casualty, housing benefits, education benefits, unemployment insuranceand pension benefits through a PRC governmentmandated multiemployer defined contribution plan. The Group is required to accrue the employerportion forthese benefits based on certain percentages of the employees’ salaries. The total provision for such employee benefits of $170,227 and $353,033 during the yearsended December 31, 2017 and 2016, respectively, of which $23,392 and $30,455, respectively, was charged to cost of revenue, $48,957 and $97,408, respectively wascharged to selling and marketing expenses, $49,717 and $86,934, respectively, was charged to general and administrative expenses and $48,161 and $138,236,respectively was charged to research and development expenses. The Group is required to make contributions to the plan out of the amounts accrued for all staffwelfare benefits except for education benefits. The PRC government is responsible for the staff welfare benefits including medical care, casualty, housing benefits,unemployment insurance and pension benefits to be paid to these employees.NOTE 12 – STATUTORY RESERVESAs stipulated by the relevant law and regulations in the PRC, the Group’s subsidiaries and VIEs in the PRC are required to maintain a nondistributable statutorysurplus reserve. Appropriations to the statutory surplus reserve are required to be made at not less than 10% of profit after taxes as reported in the subsidiaries’statutory financial statements prepared under the PRC GAAP. Once appropriated, these amounts are not available for future distribution to owners or shareholders.Once the general reserve is accumulated to 50% of the subsidiaries’ registered capital, the subsidiaries can choose not to provide more reserves. The statutoryreserve may be applied against prior year losses, if any, and may be used for general business expansion and production and increase in registered capital of thesubsidiaries. The Group allocated $Nil to statutory reserves during the years ended December 31, 2017 and 2016, respectively. The statutory reserves cannot betransferred to the Company in the form of loans or advances and are not distributable as cash dividends except in the event of liquidation.NOTE 13 – COMMITMENTS AND CONTINGENCIESOperating leasesWe have entered into operating lease agreements primarily for our office spaces in China. These leases expire through 2018 and are renewable upon negotiation.Future minimum rental payment required under the Office Lease is as follows:Year ending December 31:Amount2018$122,138F21Contingencies(a) Litigation with Shanghai Fusheng Weier Intelligent Control Technology Co., Ltd.On January 22, 2016, Zhong Chuan Rui You and Shanghai Fusheng Weier Intelligent Control Technology Co., Ltd. (“Fusheng Weier”) signed a contract forequipment of $1,652,842 (RMB10,800,000). Since Zhong Chuan Rui You did not make the payments of $1,126,381 (RMB7,360,000) on the due dates, Fusheng Weierfiled a lawsuit against Zhong Chuan Rui You in Shanghai Xuhui District People’s Court on October 8, 2016. On March 9, 2017, Xuhui District People’s Court issuedthe verdict requiring Zhong Chuan Rui You to pay the overdue debts. In August 2017, C Media Limited made the payment of $512,075 (RMB3,346,000). Theremaining balance has been accrued in accounts payable. The payment schedule for the remaining balance is being negotiated by the two parties. On February 5,2018, a hearing was held adding Zhong Chuan Shi Xun as a defendant. The Group plans to settle the remaining balance within one year.(b) Lawsuit with Gansu Jinlun Culture Media Co., Ltd.On August 22, 2014, Zhong Chuan Rui You and Gansu Jinlun Culture Media Co., Ltd. (“Gansu Jinlun”) signed a “Lanzhou Railway Bureau Airconditioned Train WiFi Network System Advertising Operation Rights Agreement” for advertising on 72 trains of $1,467,880 (RMB9,604,633). Due to the dispute on the projectimplementation, Zhong Chuan Rui You did not pay the advertising fee. On August 23, 2017, Gansu Jinlun filed a lawsuit with Gansu Intermediate People’s Court. OnDecember 19, 2017, Gansu Intermediate People’s Court issued a verdict, ruling that Zhong Chuan Rui You settle the overdue advertising fee. Since only 18 out of 72trains have been installed with Wifi network system, Zhong Chuan Rui You disputed and appealed to the verdict. The next court trial date has not yet beendetermined.C Media and Gansu Jinlun are negotiating a potential settlement to resume the contract. According to the legal counsel, it is probable that the settlement will amountto approximately $459,000 (RMB3,000,000); therefore, this amount has been accrued in accounts payable.(c) Litigation with Shenzhen Hua Xun Fang Zhou Technology Co., Ltd.On June 16, 2015, Zhong Chuan Rui You signed a cooperation agreement with Shenzhen Hua Xun Fang Zhou Technology Co., Ltd. (“Shenzhen Hua Xun”) andXuesong Song, a major shareholder of C Media Limited. Pursuant to this agreement, Zhong Chuan Rui You procures equipment from Shenzhen Hua Xun. XuesongSong acts as a joint liability guarantor for the entire debts of Zhong Chuan Rui You under this agreement. As Zhong Chuan Rui You did not make the payments onthe due dates, Shenzhen Hua Xun filed a lawsuit with Shenzhen Baoan District People’s Court on May 31, 2016. On November 1, 2016, Zhong Chuan Rui You,Xuesong Song and Shenzhen Hua Xun reached a settlement in Shenzhen Baoan District People’s Court to settle $1,735,389 (RMB11,355,000) in four instalments. OnDecember 30, 2017, the debt was assigned to C Media Limited.NOTE 14 – SUBSEQUENT EVENTThe Group has evaluated all events or transactions that occurred after December 31, 2017 through May 25, 2018, which is the date that the financial statements wereavailable to be issued.F22EX1.1 2 f20f2017ex11_luokung.htm AMENDED AND RESTATED MEMORANDUM OF ASSOCIATION AND ARTICLES OF ASSOCIATION OF LUOKUNGTECHNOLOGY CORP., DATED AUGUST 20, 2018, AND AS CURRENTLY IN EFFECTExhibit 1.1BC NO: 1553620British Virgin IslandsThe BVI Business Companies Act, 2004(No. 16 of 2004)Memorandum of AssociationandArticles of AssociationofLuokung Technology Corp.Incorporated the 24th day of October, 2009Amended and Restated the 11th Day of December 2009Amended and Restated the 17th Day of December 2009Amended and Restated the 25th Day of March 2010Amended and Restated the 21st day of May 2018Amended and restated the 17 August 2018Amended and restated the 21 August 2018Portcullis (BVI) LimitedPortcullis Chambers4th Floor Ellen Skelton Building3076 Sir Francis Drake HighwayRoad Town, TortolaBritish Virgin IslandsTERRITORY OF THE BRITISH VIRGIN ISLANDSTHE BVI BUSINESS COMPANIES ACT, 2004(No. 16 of 2004)MEMORANDUM OF ASSOCIATIONOFLuokung Technology Corp.NAME1.The name of the Company is Luokung Technology Corp.TYPE OF COMPANY2.The Company is a company limited by shares.REGISTERED OFFICE3.The first Registered Office of the Company is the offices of Portcullis TrustNet (BVI) Limited, Portcullis TrustNet Chambers, P.O. Box 3444, Road Town,Tortola, British Virgin Islands, the office of the registered agent.3.1The current Registered Office of the Company is Portcullis Chambers, 4th Floor Ellen Skelton Building, 3076 SirFrancis Drake Highway, Road Town,Tortola, British Virgin Islands VG1110.REGISTERED AGENT4.The first Registered Agent of the Company is Portcullis TrustNet (BVI) Limited of Portcullis TrustNet Chambers, P.O. Box 3444, Road Town, Tortola,British Virgin Islands.4.1The current Registered Agent of the Company is Portcullis (BVI) Ltd of Portcullis Chambers, 4th Floor Ellen Skelton Building, 3076 Sir Francis DrakeHighway, Road Town, Tortola, British Virgin Islands VG1110.AUTHORISED NUMBER OF SHARES5.The Company is authorised to issue a maximum of 251,000,000 shares.CLASSES, NUMBER AND PAR VALUE OF SHARES6.As at the date of adoption of this memorandum, the Company is authorised to issue (a) 250,000,000 ordinary shares without par value (“OrdinaryShares”); and (b) 1,000,000 preferred shares without par value (“Preferred Shares”).FRACTIONAL SHARES7.The Company may issue fractions of a share and a fractional share shall have the same corresponding fractional liabilities, limitations, preferences,privileges, qualifications, restrictions, rights and other attributes of a whole share of the same class or series of shares.RIGHTS, PRIVILEGES, RESTRICTIONS AND CONDITIONS ATTACHING TO SHARES8.(1)Subject to the memorandum and articles of association (and, for greater clarity, without prejudice to any special rights conferred thereby on theholders of any other shares), an Ordinary Share of the Company confers on the holder;(a)the right to one vote at a meeting of the members of the Company or on any Resolution of Members;(b)the right to an equal share in any Distribution paid by the Company; and(c)the right to an equal share in the distribution of the surplus assets of the Company on a winding up.(2)Subject to the memorandum and articles of association (and, for greater clarity, without prejudice to any special rights conferred thereby on theholders of any other shares), a Preferred Share of the Company confers on the holder;(a)the right to 399 votes at a meeting of the members of the Company or on any Resolution of Members;(b)the right to an equal share in any Distribution paid by the Company;(c)the right to an equal share in the distribution of the surplus assets of the Company on its liquidation.(d)be freely transferable, in whole or in part, by Mr. Xuesong Song to any third party through one or more Private Transactions, subject toApplicable Law; and(e)be freely transferable, in whole or in part, by Mr. Xuesong Song to any third party through one or more Public Transactions, subject to ApplicableLaw and Automatic Conversion of such Preferred Share(s) into Ordinary Share(s).(3)The directors may at their discretion by resolution of directors redeem, purchase or otherwise acquire all or any of the shares in the Companysubject to the Articles..VARIATION OF CLASS RIGHTS9.If at any time the issued shares are divided into different classes or series of shares, the rights attached to any class or series (unless otherwise providedby the terms of issue of the shares of that class or series) may, whether or not the Company is being wound up, be varied with the consent in writing of theholders of not less than threefourths of the issued shares of that class or series and of the holders of not less than threefourths of the issued shares ofany other class or series of shares which may be affected by such variation.RIGHTS NOT VARIED BY THE ISSUE OF SHARES PARI PASSU10.The rights conferred upon the holders of the shares of any class issued with preferred or other rights shall not, unless otherwise expressly provided by theterms of issue of the shares of that class, be deemed to be varied by the creation or issue of further shares ranking pari passu therewith.CAPACITY AND POWERS11.Subject to the Act, any other British Virgin Islands legislation and paragraph 12 below the Company has, irrespective of corporate benefit:(a)full capacity to carry on or undertake any business or activity, do any act or enter into any transaction;(b)for the purposes of paragraph (a), full rights, powers and privileges; and(c)full powers to issue shares with preemptive rights, subject to the Articles.2LIMITATIONS ON THE COMPANY’S BUSINESS12.For the purposes of section 9(4) of the Act the Company may not;(a)carry on banking or trust business, unless it is licensed to do so under the Banks and Trust Companies Act, 1990;(b)carry on business as an insurance or reinsurance company, insurance agent or insurance broker, unless it is licensed under the Insurance Act1994;(c)carry on business of company management, unless it is licensed under the Company Management Act, 1990;(d)carry on the business of providing the registered office or the registered agent for companies incorporated in the British Virgin Islands;(e)carry on the business as a mutual fund, manager of mutual funds or administrator of mutual funds unless it is recognized or licenced as the casemay be under the Mutual Funds Act 1996; or(f)carry on any other business that gives rise to a licencing requirement under any law for the time being in force in the British Virgin Islands unlessit is licenced, regulated, recognised or otherwise approved pursuant to such law.REGISTERED SHARES AND PROHIBITION ON ISSUE OF BEARER SHARES13.Shares in the Company may only be issued as registered shares. The issue of shares to bearer is prohibited.PROHIBITION ON EXCHANGE AND CONVERSION OF REGISTERED SHARES TO BEARER SHARES14.The exchange or conversion of registered shares to bearer shares is prohibited.TRANSFER OF REGISTERED SHARES15.Subject to the provisions of the Articles the Company may upon receipt of an instrument of transfer enter the name of the transferee in the register ofmembers subject to the prior or simultaneous approval of the Company as evidenced by a resolution of directors or by a resolution of members. Subject toany resolution of the members to the contrary, the directors may resolve by resolution of directors to refuse or delay the registration of the transfer forreasons that shall be specified in the resolution of directors.AMENDMENT OF MEMORANDUM AND ARTICLES OF ASSOCIATION16.1The Company may amend its Memorandum or Articles by a resolution of members or by a resolution of directors provided that the directors shall not havethe power to amend the Memorandum or Articles;(a)to restrict the rights or powers of the members to amend the Memorandum or Articles;(b)to change the percentage of members required to pass a resolution to amend the Memorandum or Articles;(c)in circumstances where the Memorandum or Articles cannot be amended by the members; or(d)to Clauses 8, 9, 10 or this Clause 12.16.2No amendment may be made to Regulation 76 of the Articles unless approved by an affirmative vote of the holders of 66 2/3 percent or more of theoutstanding votes of the shares entitled to vote thereon.3DEFINITIONS17.The meanings of words in this Memorandum are as defined in the Articles.We, Portcullis TrustNet (BVI) Limited of Portcullis TrustNet Chambers, P.O. Box 3444, Road Town, Tortola, British Virgin Islands for the purpose ofincorporating a BVI Business Company under the laws of the British Virgin Islands hereby sign this Memorandum of Association the 27th day of October,2009.Incorporator/s/ Nicole WheatleyPortcullis TrustNet (BVI) LimitedPortcullis TrustNet ChambersP.O. Box 3444Road Town, TortolaBritish Virgin Islands(Sgd. Nicole Wheatley)4TERRITORY OF THE BRITISH VIRGIN ISLANDSTHE BVI BUSINESS COMPANIES ACT, 2004(No. 16 of 2004)ARTICLES OF ASSOCIATIONOFLuokung Technology Corp.PRELIMINARY1.In these Articles, if not inconsistent with the subject or context, the words and expressions standing in the first column of the following table shall bear themeanings set opposite them respectively in the second column thereof.WordsMeaningApplicable Lawall Laws, including those of a jurisdiction in or outside of the United States, applicable to the Private orPublic Transactions.Actthe BVI Business Companies Act, 2004 (No 16 of 2004.) including any modification, extension, reenactment or renewal thereof and any regulations made thereunder.Articlesthese Articles of Association as originally framed or as from time to time amended.Automatic Conversioneach Preferred Share shall be automatically converted at any time after issue and without the payment ofany additional sum into an equal number of fully paid Ordinary Shares upon the conclusion of anytransfer by Mr. Xuesong Song to any third party through one or more Public Transactions.Designated Stock Exchangeeither the Nasdaq National Stock Market, Inc. or such other exchange or quotation bureau on which, theCompany’s Securities are listed or traded; provided that until the Securities are listed on any such“Exchange” the rules of any such Designated Stock Exchange shall be inapplicable to these Articles.directora director of the Company.distributionin relation to a distribution by a company to a member, means(i)the direct or indirect transfer of an asset, other than the Company’s own shares, to or forthe benefit of the member or(ii)the incurring of a debt to or for the benefit of a member,in relation to shares held by a member, and whether by means of a purchase of an asset, the purchase,redemption or other acquisition of shares, a transfer of indebtedness or otherwise, and includes adividend.Independent Directora person who meets the then current requirements for “independence” of the applicable rules andregulations of the U.S. Securities and Exchange Commission and the Designated Stock Exchange.5member or shareholderin relation to the Company, means a person whose name is entered in the register of members as theholder of one or more shares, or fractional shares, in the Company.Memorandumthe Memorandum of Association of the Company as originally framed or as from time to time amended.Mr. Xuesong Songthe founder, a director and Chairman of LK Technology Ltd.Ordinary Sharesissued or unissued ordinary shares of no par value of the Company having the rights, preferences andprivileges set out in the MemorandumPersonAn individual, a corporation, a trust, trustee, the estate of a deceased individual, a partnership or anunincorporated association of persons.Preferred Sharesissued or unissued preferred shares of no par value of the Company having the rights, preferences andprivileges set out in the MemorandumPrivate Transactionstransactions that are not considered as a Public Transaction.Public Transactionstransactions through any national securities exchanges and/or through the automated quotation systemincluding but not limited to NASDAQ, NYSE (including NYSE American) or OTC Markets, or anytransaction executed by the broker or with a market maker.Related Party(a) any director, officer and employee of the Company; (b) any family member of such director, officer andemployee; and (c) any entity (e.g. a corporation, partnership, or trust) controlled by or set up for thebenefit of a director, officer or employee, or a family member of such director, officer or employee.Relevant SystemA facility for the electronic transfer of uncertificated securities administered by The Depository TrustCompany or such other Person regulated by the SEC.resolution of directors(a)A resolution approved at a duly convened and constituted meeting of directors of the Companyor of a committee of directors of the Company by the affirmative vote of a simple majority of thedirectors present at the meeting who voted and did not abstain; or(b)a resolution consented to in writing by a simple majority of the directors or of all members of thecommittee, as the case may be;except that where a director is given more than one vote, he shall be counted by the number ofvotes he casts for the purpose of establishing a majority.resolution of membersSubject to the provisions of the Memorandum and Articles means:(a)A resolution approved at a duly convened and constituted meeting of the members of theCompany by the affirmative vote of(i)a majority of in excess of 50% of the votes of the shares entitled to vote and voting onthe resolution, or(ii)a majority of in excess of 50% of the votes of each class or series of shares entitled tovote as a class or series and voting on the resolution and a majority of in excess of 50%of the votes of the remaining shares entitled to vote and voting on the resolution; or6(b)a resolution consented to in writing by(i)an absolute majority of the votes of shares entitled to vote thereon, or(ii)an absolute majority of the votes of each class or series of shares entitled to votethereon as a class or series and of an absolute majority of the votes of the remainingshares entitled to vote thereon.SealAny Seal which has been duly adopted as the common seal of the Company.SECThe United States Securities and Exchange Commission.Securitiesshares and debt obligations of every kind, and options, warrants and rights to acquire shares, or debtobligations.SharesOrdinary Shares and/or Preferred Shares, as the case may be.solvency testa company satisfies the solvency test if;(i)the value of the company’s assets exceeds its liabilities, and(ii)the company is able to pay its debts as they fall due.treasury sharesshares in the Company that were previously issued but were repurchased, redeemed or otherwiseacquired by the Company and not cancelled.2.“Written” or any term of like import includes words typewritten, printed, painted, engraved, lithographed, photographed or represented or reproduced byany mode of reproducing words in a visible form, including telex, facsimile, telegram, cable or other form of writing produced by electronic communication.3.Save as aforesaid any words or expressions defined in the Act shall bear the same meaning in these Articles.4.Whenever the singular or plural number, or the masculine, feminine or neuter gender is used in these Articles, it shall equally, where the context admits,include the others.5.A reference in these Articles to voting in relation to shares shall be construed as a reference to voting by members holding the shares except that it is thevotes allocated to the shares that shall be counted and not the number of members who actually voted and a reference to shares being present at a meetingshall be given a corresponding construction.6.A reference to money in these Articles is, unless otherwise stated, a reference to the currency in which shares in the Company shall be issued according tothe provisions of the Memorandum.7REGISTERED SHARES7.Every member holding registered shares in the Company shall be entitled to a certificate signed by a director or officer of the Company or such otherperson who may be authorised from time to time by resolution of directors or under the Seal, with or without the signature of any director of the Company,specifying the share or shares held by him and the signature of the director or officer or person so authorised and the Seal may be facsimiles.8.Any member receiving a share certificate for registered shares shall indemnify and hold the Company and its directors and officers harmless from any lossor liability which it or they may incur by reason of any wrongful or fraudulent use or representation made by any person by virtue of the possessionthereof. If a share certificate for registered shares is worn out or lost it may be renewed on production of the worn out certificate or on satisfactory proof ofits loss together with such indemnity as may be required by a resolution of directors.9.If several persons are registered as joint holders of any shares, any one of such persons may give an effectual receipt for any distribution payable inrespect of such shares.10.Nothing in these Articles shall require title to any shares or other Securities to be evidenced by a certificate if the Act and the rules of the Designated StockExchange permit otherwise.SHARES AND ISSUED SHARES11.Subject to the provisions of these Articles and, if applicable, the rules of the Designated Stock Exchange, and any resolution of members, the directors ofthe Company may, without limiting or affecting any rights previously conferred on the holders of any existing shares or class or series of shares, offer, allot,grant options over or otherwise dispose of shares to such persons, at such times and upon such terms and conditions as the Company may by resolutionof directors determine. The directors shall not issue more shares than the maximum number provided for in the Memorandum.12.The Company may issue fully paid, partly paid or nil paid shares as well as bonus shares. A partly paid or nil paid share or a share issued for a promissorynote or other written obligation for payment of a debt may be issued subject to forfeiture in the manner prescribed in these Articles.13.Shares in the Company may be issued for consideration in any form, including money, a promissory note or other obligation to contribute money orproperty, real property, personal property (including goodwill and knowhow) services rendered or a contract for future services and the amount of suchconsideration shall be determined by resolution of directors, except that in the case of shares with par value, the amount shall not be less than the parvalue, and in the absence of fraud the decision of the directors as to the value of the consideration received by the Company in respect of the issue isconclusive unless a question of law is involved.14.Before issuing shares for a consideration other than money, the directors shall pass a resolution stating;(a)the amount to be credited for the issue of the shares;(b)their determination of the reasonable present cash value of the nonmoney consideration for the issue; and(c)that, in their opinion, the present cash value of the nonmoney consideration for the issue is not less than the amount to be credited for the issueof the shares.15.A share issued by the Company upon conversion of, or in exchange for, another share or a debt obligation or other security in the Company, shall betreated for all purposes as having been issued for money equal to the consideration received or deemed to have been received by the Company in respectof the other share, debt obligation or security.16.Treasury shares may be disposed of by the Company on such terms and conditions (not otherwise inconsistent with these Articles) as the Company mayby resolution of directors determine.17.Subject to these Articles, the Company may purchase, redeem or otherwise acquire and hold its own shares save that the Company may not purchase,redeem or otherwise acquire its own shares without the consent of the member whose shares are to be purchased, redeemed or otherwise acquired unlessthe Company is permitted by the Act or any other provision in the Memorandum or Articles to purchase, redeem or otherwise acquire the shares withouttheir consent.818.No purchase, redemption or other acquisition of shares shall be made unless the directors determine by resolution of the directors that immediately after thepurchase, redemption or other acquisition the value of the Company’s assets will exceed its liabilities and the Company will be able to pay its debts as theyfall due.19.Sections 60 (Process for acquisition of own shares), 61 (Offer to one or more shareholders) and 62 (Shares redeemed otherwise than at the option ofcompany) of the Act shall not apply to the Company.20.A determination by the directors under Article 18 is not required;(a)the Company redeems a share or shares pursuant to a right of a member to have his shares redeemed or to have his shares exchanged for moneyor other property of the Company; or(b)by virtue of the provisions of Section 179 of the Act.21.Shares that the Company purchases, redeems or otherwise acquires pursuant to Article 17 may be cancelled or held as treasury shares except to the extentthat such shares are in excess of 80 percent of the issued shares of the Company in which case they shall be cancelled but they shall be available forreissue.22.Shares in the Company shall only be held as treasury shares where the directors of the Company resolve as such and the number of shares acquired, whenaggregated with shares of the same class already held by the Company as treasury shares, does not exceed 50% of the shares of that class previouslyissued by the Company, excluding shares that have been cancelled. All rights and obligations attaching to a treasury share are suspended and shall not beexercised by or against the Company while it holds the share as a treasury share. Treasury shares may be reissued by the Company as new shares.23.The Company shall keep a register of members containing;(a)the names and addresses of the persons who hold registered shares in the Company;(b)the number of each class and series of registered shares held by each member;(c)the date on which the name of each member was entered in the register of members;(d)the date on which any person ceased to be a member; and(e)such other information as may be prescribed pursuant to the Act.24.The register of members may be in any such form as the directors may approve but if it is in magnetic, electronic or other data storage form, the companymust be able to produce legible evidence of its contents.25.The original or a copy of the register of members shall be kept at the registered office of the Company or at the office of the registered agent of theCompany.26.A share is deemed to be issued when the name of the member is entered in the register of members.27.Subject to the Act and the rules of the Designated Stock Exchange, the board of directors without further consultation with the holders of any shares orSecurities may resolve that any class or series of shares or other Securities from time to time in issue or to be issued (including shares in issue at the date ofthe adoption of these Articles) may be issued, held, registered and converted to uncertificated form.28.Conversion of shares held in certificated form into shares held in uncertificated form, and vice versa, may be made in such manner as the board of directors,in its absolute discretion, may think fit. The Company or any duly authorised transfer agent (a “Transfer Agent”) shall enter on the register of membershow many shares are held by each member in uncertificated form and in certificated form and shall maintain the register of members. Notwithstanding anyprovision of these Articles, a class or series of shares shall not be treated as two classes by virtue only of that class or series comprising both certificatedshares and uncertificated Shares or as a result of any provision of these Articles which apply only in respect of certificated or uncertificated shares.9MORTGAGES AND CHARGES OF REGISTERED SHARES29.Members may mortgage or charge their registered shares in the Company with such mortgage or charge being evidenced in writing and signed by, or withthe authority of the registered holder of a registered share to which the mortgage or charge relates. The Company shall give effect to the terms of any validmortgage or charge except insofar as it may conflict with any requirements herein contained for consent to the transfer of shares.30.In the case of the mortgage or charge of registered shares there may be entered in the share register of the Company at the request of the registered holderof such shares(a)a statement that the shares are mortgaged or charged;(b)the name of the mortgagee or chargee; and(c)the date on which the aforesaid particulars are entered in the share register.31.Where particulars of a mortgage or charge are entered in the register of members, such particulars shall be cancelled(a)with the written consent of the named mortgagee or chargee or anyone authorized to act on his behalf; or(b)upon evidence satisfactory to the directors of the discharge of the liability secured by the mortgage or charge and the issue of such indemnities asthe directors shall consider necessary or desirable.32.Whilst particulars of a mortgage or charge over registered shares are entered in the register of members pursuant to the preceding articles no transfer ofany share comprised therein shall be effected without the written consent of the named mortgagee or chargee or anyone authorized to act on his behalf.FORFEITURE33.When shares not fully paid on issue or issued for a promissory note or other written obligation for payment of a debt have been issued subject toforfeiture, the following provisions shall apply.34.Written notice specifying a date for payment to be made and the shares in respect of which payment is to be made shall be served on the member whodefaults in making payment pursuant to a promissory note or other written obligations to pay a debt.35.The written notice specifying a date for payment shall(a)name a further date not earlier than the expiration of 14 days from the date of service of the notice on or before which payment required by thenotice is to be made; and(b)contain a statement that in the event of nonpayment at or before the time named in the notice the shares, or any of them, in respect of whichpayment is not made will be liable to be forfeited.36.Where a written notice has been issued and the requirements of the notice have not been complied with within the prescribed time, the directors may at anytime before tender of payment forfeit and cancel the shares to which the notice relates.37.The Company is under no obligation to refund any moneys to the member whose shares have been forfeited and cancelled pursuant to these provisions.Upon forfeiture and cancellation of the shares the member is discharged from any further obligation to the Company with respect to the shares forfeitedand cancelled.10LIEN38.The Company shall have a first and paramount lien on every share issued for a promissory note or for any other binding obligation to contribute money orproperty or any combination thereof to the Company, and the Company shall also have a first and paramount lien on every share standing registered in thename of a member, whether singly or jointly with any other person or persons, for all the debts and liabilities of such member or his estate to the Company,whether the same shall have been incurred before or after notice to the Company of any interest of any person other than such member, and whether thetime for the payment or discharge of the same shall have actually arrived or not, and notwithstanding that the same are joint debts or liabilities of suchmember or his estate and any other person, whether a member of the Company or not. The Company’s lien on a share shall extend to all distributionspayable thereon. The directors may at any time either generally, or in any particular case, waive any lien that has arisen or declare any share to be wholly orin part exempt from the provisions of this Article.39.In the absence of express provisions regarding sale in the promissory note or other binding obligation to contribute money or property, the Company maysell, in such manner as the directors may by resolution of directors determine, any share on which the Company has a lien, but no sale shall be made unlesssome sum in respect of which the lien exists is presently payable nor until the expiration of twentyone days after a notice in writing, stating and demandingpayment of the sum presently payable and giving notice of the intention to sell in default of such payment, has been served on the holder for the timebeing of the share.40.The net proceeds of the sale by the Company of any shares on which it has a lien shall be applied in or towards payment of discharge of the promissorynote or other binding obligation to contribute money or property or any combination thereof in respect of which the lien exists so far as the same ispresently payable and any residue shall (subject to a like lien for debts or liabilities not presently payable as existed upon the share prior to the sale) bepaid to the holder of the share immediately before such sale. For giving effect to any such sale the directors may authorize some person to transfer theshare sold to the purchaser thereof. The purchaser shall be registered as the holder of the share and he shall not be bound to see to the application of thepurchase money, nor shall his title to the share be affected by any irregularity or invalidity in the proceedings in reference to the sale.TRANSFER OF SHARES41.Registered shares in the Company are transferred by a written instrument of transfer signed by the transferor and containing the name and address of thetransferee. The instrument of transfer shall be signed by the transferee if registration as a holder of the share shall impose a liability to the Company on thetransferee. The instrument of transfer of a registered share shall be sent to the Company for registration.42.The board of directors may resolve that interests in shares in the form of depositary receipts may be transferred or otherwise dealt with in accordance withthe regulations and practices instituted by the operator of the Relevant System and any holder of interests in shares shall be entitled to transfer suchinterests by means of such Relevant System and the operator of the Relevant System shall act as agent of the holders of such interests for the purposes ofthe transfer of those interests.43.The register of members may be closed at such times and for such periods as the board of directors may from time to time determine, upon notice beinggiven by advertisement in such newspapers as may be required by the Act and the practice of the Designated Stock Exchange.44.The transfer of a registered share is effective when the name of the transferee is entered on the register of members.45.If the directors of the Company are satisfied that an instrument of transfer relating to shares has been signed but that the instrument has been lost ordestroyed, they may resolve;(a)to accept such evidence of the transfer of the shares as they consider appropriate; and(b)that the transferee’s name should be entered in the register of members notwithstanding the absence of the instrument of transfer.46.The Company must on the receipt of an instrument of transfer from the transferor or transferee of a registered share in the Company enter the name of thetransferee of the share in the register or members unless the directors, if permitted by the Memorandum or these Articles, resolve by resolution of directorsto refuse or delay the registration of the transfer for reasons that shall be specified in the resolution of directors.11TRANSMISSION OF SHARES47.The personal representative of a deceased member may transfer a share even though the personal representative is not a member at the time of the transfer.48.The personal representative, executor or administrator of a deceased member, the guardian of an incompetent member or the trustee of a bankrupt membershall be the only person recognized by the Company as having any title to his share but they shall not be entitled to exercise any rights as a member of theCompany until they have proceeded as set forth in the next following three Articles.49.The production to the Company of any document which is evidence of probate of the will, or letters of administration of the estate, or confirmation asexecutor, of a deceased member or of the appointment of a guardian of an incompetent member or the trustee of a bankrupt member shall be accepted by theCompany even if the deceased, incompetent or bankrupt member is domiciled outside the British Virgin Islands if the document evidencing the grant ofprobate or letters of administration, confirmation as executor, appointment as guardian or trustee in bankruptcy is issued by a foreign court which hadcompetent jurisdiction in the matter. For the purpose of establishing whether or not a foreign court had competent jurisdiction in such a matter the directorsmay obtain appropriate legal advice. The directors may also require an indemnity to be given by the executor, administrator, guardian or trustee inbankruptcy.50.The Company may enter in the register of members the name of any person becoming entitled by operation of law or otherwise to a share or shares inconsequence of the death, incompetence or bankruptcy upon such evidence being produced as may reasonably be required by the directors.51.Any person who has become entitled to a share or shares in consequence of the death, incompetence or bankruptcy of any member may, instead of beingregistered himself, request in writing that some person to be named by him be registered as the transferee of such share or shares and such request shalllikewise be treated as if it were a transfer.52.What amounts to incompetence on the part of a person is a matter to be determined by the court having regard to all the relevant evidence and thecircumstances of the case.REDUCTION OR INCREASE IN AUTHORISED AND UNISSUED SHARES48.The Company may amend the Memorandum to increase or reduce the maximum number of shares the Company is authorised to issue and may in respect ofany unissued shares increase or reduce the number of such shares, or effect any combination of the foregoing.49.The Company may(1)(a) divide its shares, including issued shares, into a larger number of shares; or (b) combine its shares, including issued shares, into a smallernumber of shares.(2)A division or combination of shares, including issued shares, of a class or series shall be for a larger or smaller number, as the case may be, ofshares in the same class or series.(3)A company shall not divide its shares under subsection (1)(a) or (2) if it would cause the maximum number of shares that the Company isauthorised to issue by its memorandum to be exceeded.(4)Where shares are divided or combined under this article, the aggregate par value of the new shares must be equal to the aggregate par value of theoriginal shares.MEETINGS AND CONSENTS OF MEMBERS50.The directors of the Company may convene meetings of the members of the Company at such times and in such manner and places within or outside theBritish Virgin Islands as the directors consider necessary or desirable. The Company may hold an annual general meeting, but shall not (unless required bythe applicable rules of the Designated Stock Exchange for so long as the Company’s Securities are listed or traded on the Designated Stock Exchange) beobliged to hold an annual general meeting.51.Upon the written request of members holding 30 percent or more of the outstanding voting shares in the Company the directors shall convene a meeting ofmembers.1252.The directors shall give not less than 7 days notice of meetings of members to those persons whose names on the date the notice is given appear asmembers in the share register of the Company and are entitled to vote at the meeting.53.The directors may fix the date notice is given of a meeting of members as the record date for determining those shares that are entitled to vote at themeeting.54.A meeting of members may be called on short notice:(a)if members holding not less than 90 percent of the total number of shares entitled to vote on all matters to be considered at the meeting, or 90percent of the votes of each class or series of shares where members are entitled to vote thereon as a class or series together with not less than a90 percent majority of the remaining votes, have agreed to short notice of the meeting, or(b)if all members holding shares entitled to vote on all or any matters to be considered at the meeting have waived notice of the meeting and for thispurpose presence at the meeting shall be deemed to constitute waiver.55.The inadvertent failure of the directors to give notice of a meeting to a member, or the fact that a member has not received notice, does not invalidate themeeting.56.A member may be represented at a meeting of members by a proxy who may speak and vote on behalf of the member.57.The instrument appointing a proxy shall be produced at the place appointed for the meeting before the time for holding the meeting at which the personnamed in such instrument proposes to vote.58.An instrument appointing a proxy shall be in substantially the following form or such other form as the Chairman of the meeting shall accept as properlyevidencing the wishes of the member appointing the proxy.(Name of Company)I/Webeing a member of the aboveCompany withshares HEREBY APPOINTofor failing himofto be my/our proxy to vote for me/us at the meeting of members to be held on the dayofand at any adjournment thereof.(Any restrictions on voting to be inserted here.)Signed this day ofMember59.The following shall apply in respect of joint ownership of shares:a.if two or more persons hold shares jointly each of them may be present in person or by proxy at a meeting of members and may speak as a member;b.if only one of the joint owners is present in person or by proxy he may vote on behalf of all joint owners, andc.if two or more of the joint owners are present in person or by proxy they must vote as one.60.A member shall be deemed to be present at a meeting of members if he participates by telephone or other electronic means and all members participating inthe meeting are able to hear each other.61.A meeting of members is duly constituted if, at the commencement of the meeting, there are present in person or by proxy not less than 50 percent of thevotes of the shares or class or series of shares entitled to vote on resolutions of members to be considered at the meeting. If a quorum be present,notwithstanding the fact that such quorum may be represented by only one person then such person may resolve any matter and a certificate signed bysuch person accompanied where such person be a proxy by a copy of the proxy form shall constitute a valid resolution of members.1362.If within two hours from the time appointed for the meeting a quorum is not present, the meeting, if convened upon the requisition of members, shall bedissolved; in any other case it shall stand adjourned to the next business day at the same time and place or to such other time and place as the directorsmay determine, and if at the adjourned meeting there are present within one hour from the time appointed for the meeting in person or by proxy not lessthan one third of the votes of the shares or each class or series of shares entitled to vote on the resolutions to be considered by the meeting, those presentshall constitute a quorum but otherwise the meeting shall be dissolved.63.At every meeting of members, the Chairman of the Board of Directors shall preside as chairman of the meeting. If there is no Chairman of the Board ofDirectors or if the Chairman of the Board of Directors is not present at the meeting, the members present shall choose some one of their number to be thechairman. If the members are unable to choose a chairman for any reason, then the person representing the greatest number of voting shares present inperson or by prescribed form of proxy at the meeting shall preside as chairman failing which the oldest individual member or representative of a memberpresent shall take the chair.64.The chairman may, with the consent of the meeting, adjourn any meeting from time to time, and from place to place, but no business shall be transacted atany adjourned meeting other than the business left unfinished at the meeting from which the adjournment took place.65.At any meeting of the members the chairman shall be responsible for deciding in such manner as he shall consider appropriate whether any resolution hasbeen carried or not and the result of his decision shall be announced to the meeting and recorded in the minutes thereof. If the chairman shall have anydoubt as to the outcome of any resolution put to the vote, he shall cause a poll to be taken of all votes cast upon such resolution, but if the chairman shallfail to take a poll then any member present in person or by proxy who disputes the announcement by the chairman of the result of any vote mayimmediately following such announcement demand that a poll be taken and the chairman shall thereupon cause a poll to be taken. If a poll is taken at anymeeting, the result thereof shall be duly recorded in the minutes of that meeting by the chairman.66.Any person other than an individual shall be regarded as one member and subject to the specific provisions hereinafter contained for the appointment ofrepresentatives of such persons the right of any individual to speak for or represent such member shall be determined by the law of the jurisdiction where,and by the documents by which, the person is constituted or derives its existence. In case of doubt, the directors may in good faith seek legal advice fromany qualified person and unless and until a court of competent jurisdiction shall otherwise rule, the directors may rely and act upon such advice withoutincurring any liability to any member.67.Any person other than an individual which is a member of the Company may by resolution of its directors or other governing body authorize such personas it thinks fit to act as its representative at any meeting of the Company or of any class of members of the Company, and the person so authorized shall beentitled to exercise the same powers on behalf of the person which he represents as that person could exercise if it were an individual member of theCompany.68.The chairman of any meeting at which a vote is cast by proxy or on behalf of any person other than an individual may call for a notarially certified copy ofsuch proxy or authority which shall be produced within 7 days of being so requested or the votes cast by such proxy or on behalf of such person shall bedisregarded.69.Directors of the Company may attend and speak at any meeting of members of the Company and at any separate meeting of the holders of any class orseries of shares in the Company.70.An action that may be taken by the members at a meeting may also be taken by a resolution of members consented to in writing or by telex, telegram, cable,facsimile or other written electronic communication, without the need for any notice, but if any resolution of members is adopted otherwise than by theunanimous written consent of all members, a copy of such resolution shall forthwith be sent to all members not consenting to such resolution. The consentmay be in the form of counterparts, each counterpart being signed by one or more members.14DIRECTORS71.The first directors of the Company shall be appointed by the first registered agent of the Company and thereafter the directors shall be appointed byresolution of members, subject to Article 78, for such term as the members determine. A person shall not be appointed as a director unless he hasconsented in writing to be a director.72.The minimum number of directors shall be one and the maximum number shall be 20. Unless otherwise determined by the Company in a meeting ofshareholders and subject to the requirements of the Memorandum, the directors may by a Resolution of Directors, amend this Regulation 72 to change thenumber of directors. For as long as Securities of the Company are listed or traded on the Designated Stock Exchange, the directors shall include suchnumber of Independent Directors as applicable law, rules or regulations of the Designated Stock Exchange may require for a foreign private issuer as longas the Company is a foreign private issuer.73.Each director shall hold office for the term, if any, fixed by resolution of members or until his earlier death, resignation or removal.74.Where the Company has only one member who is an individual and that member is also the sole director of the Company, that sole member/director may, byinstrument in writing, nominate a person who is not disqualified from being a director of the Company under section 111(1) of the Act as a reserve directorof the Company to act in the place of the sole director in the event of his death.75.The nomination of a person as a reserve director of the Company ceases to have effect if;a.before the death of the sole member/director who nominated him;(i)he resigns as reserve director, or(ii)the sole member/director revokes the nomination in writing; orb.the sole member/director who nominated him ceases to be the sole member/director of the Company for any reason other than his death.76.A director may be removed from office, with or without cause, by a resolution of directors or a resolution of members. For the purposes of this Regulation76, “cause” means the willful and continuous failure by a director to substantially perform his duties to the Company (other than any such failure resultingfrom incapacity due to physical or mental illness) or the willful engaging by the director in gross misconduct materially and demonstrably injurious to theCompany. If a director is removed from office without cause by a resolution of the members, for the purposes of this Regulation, the resolution of memberswill require the affirmative vote of the holders of 66 2/3 percent or more of the outstanding votes of the shares entitled to vote thereon.77.A director may resign his office by giving written notice of his resignation to the Company and the resignation shall have effect from the date the notice isreceived by the Company or from such later date as may be specified in the notice. A director of the Company shall resign forthwith if he is, or becomes,disqualified to act as a director under the Act.78.The directors may at any time by resolution of directors appoint any person to be a director to fill a vacancy. There is a vacancy if a director dies orotherwise ceases to hold office as a director prior to the expiration of his term of office, where his term of office was fixed upon his appointment. Thedirectors may not appoint a director to fill a vacancy for a term exceeding the term that remained when the person who has ceased to be a director left orotherwise ceased to hold office.79.The Company shall keep a register of directors containing:a.the names and addresses of the persons who are directors of the Company or who have been nominated as reserve directors of the Company;b.the date on which each person whose name is entered in the register was appointed as a director of the Company or nominated as a reservedirector of the Company;c.the date on which each person named as a director ceased to be a director of the Company;d.the date on which the nomination of any person nominated as a reserve director ceased to have effect; ande.such other information as may be prescribed pursuant to the Act.1580.The original or a copy of any register of directors shall be kept at the office of the registered agent of the Company.81.The register of directors may be in any such form as the directors may approve but if it is in magnetic, electronic or other data storage form, the companymust be able to produce legible evidence of its contents.82.With the prior or subsequent approval by a resolution of members, the directors may, by a resolution of directors, fix the emoluments of directors withrespect to services to be rendered in any capacity to the Company.83.A director shall not require a share qualification and may be an individual or a company.POWERS OF DIRECTORS84.The business and affairs of the Company shall be managed by the directors who may pay all expenses incurred preliminary to and in connection with theformation and registration of the Company and may exercise all such powers of the Company as are not by the Act or by the Memorandum or theseArticles required to be exercised by the members of the Company, subject to any delegation of such powers as may be authorized by these Articles and tosuch requirements as may be prescribed by a resolution of members; but no requirement made by a resolution of members shall prevail if it be inconsistentwith these Articles nor shall such requirement invalidate any prior act of the directors which would have been valid if such requirement had not been made.Notwithstanding anything in Section 175 of the Act the directors shall have the power to sell, transfer, lease, exchange or otherwise dispose of more thanfifty percent of the assets of the Company without submitting a proposal to or obtaining the consent of the members of the Company.85.If the Company is a whollyowned subsidiary of a holding company a director may when exercising powers or performing duties as a director act in amanner which he believes is in the best interests of the holding company even though it may not be in the best interests of the Company.86.The directors may, by a resolution of directors, appoint any person, including a person who is a director, to be an officer or agent of the Company. Theresolution of directors appointing an agent may authorize the agent to appoint one or more substitutes or delegates to exercise some or all of the powersconferred on the agent by the Company.87.Every officer or agent of the Company has such powers and authority of the directors, including the power and authority to affix the Seal, as are set forth inthese Articles or in the resolution of directors appointing the officer or agent, except that no agent has any power or authority with respect to thefollowing;a.to amend the memorandum or articles;b.to change the registered office or agent;c.to designate committees of directors;d.to delegate powers to a committee of directors;e.to appoint or remove directors;f.to appoint or remove an agent;g.to fix emoluments of directors;h.to approve a plan of merger, consolidation or arrangement;i.to make a declaration of solvency for the purposes of section 198(1)(a) of the Act or to approve a liquidation plan;j.to make a determination under section 57(1) of the Act that the company will, immediately after a proposed distribution, satisfy the solvency test;ork.to authorise the Company to continue as a company incorporated under the laws of a jurisdiction outside the British Virgin Islands.1688.Any director which is a body corporate may appoint any person its duly authorized representative for the purpose of representing it at meetings of theBoard of Directors or with respect to unanimous written consents.89.The continuing directors may act notwithstanding any vacancy in their body, save that if their number is reduced to their knowledge below the numberfixed by or pursuant to these Articles as the necessary quorum for a meeting of directors, the continuing directors or director may act only for the purposeof appointing directors to fill any vacancy that has arisen or for summoning a meeting of members.90.The directors may by resolution of directors exercise all the powers of the Company to borrow money and to mortgage or charge its undertakings andproperty or any part thereof, to issue debentures, debenture stock and other securities whenever money is borrowed or as security for any debt, liability orobligation of the Company or of any third party.91.All cheques, promissory notes, drafts, bills of exchange and other negotiable instruments and all receipts for moneys paid to the Company, shall be signed,drawn, accepted, endorsed or otherwise executed, as the case may be, in such manner as shall from time to time be determined by resolution of directors.92.The Company shall keep a register of all relevant charges created by the Company showing:a.if the charge is a charge created by the Company, the date of its creation or if the charge is existing on property acquired by the Company, the dateon which the property was acquired;b.a short description of the liability secured by the charge;c.a short description of the property charged;d.the name and address of the trustee for the security, or if there is no such trustee the name and address of the chargee;e.unless the charge is a security to bearer, the name and address of the holder of the charge;f.details of any prohibition or restriction , if any, contained in the instrument creating the charge on the power of the company to create any futurecharge ranking in priority to or equally with the charge; andg.such other information as may be prescribed pursuant to the Act.93.The original or a copy of the register of charges shall be kept at the registered office of the Company or at the office of the registered agent of the Company.PROCEEDINGS OF DIRECTORS94.The directors of the Company or any committee thereof may meet at such times and in such manner and places within or outside the British Virgin Islandsas the directors may determine to be necessary or desirable. Any one or more directors may convene a meeting of directors.95.A director shall be deemed to be present at a meeting of directors if he participates by telephone or other electronic means and all directors participating inthe meeting are able to hear each other.96.A director shall be given not less than 3 days notice of meetings of directors, but a meeting of directors held without 3 days notice having been given to alldirectors shall be valid if all the directors entitled to vote at the meeting who do not attend, waive notice of the meeting and for this purpose, the presenceof a director at a meeting shall constitute waiver on his part. The inadvertent failure to give notice of a meeting to a director, or the fact that a director hasnot received the notice, does not invalidate the meeting.1797.A director may by a written instrument appoint an alternate who need not be a director and an alternate is entitled to attend meetings in the absence of thedirector who appointed him and to vote or consent in place of the director.98.A meeting of directors is duly constituted for all purposes if at the commencement of the meeting there are present in person or by alternate not less thanone half of the total number of directors, unless there are only 2 directors in which case the quorum shall be 2.99.If the Company shall have only one director the provisions herein contained for meetings of the directors shall not apply but such sole director shall havefull power to represent and act for the Company in all matters as are not by the Act or the Memorandum or these Articles required to be exercised by themembers of the Company and in lieu of minutes of a meeting shall record in writing and sign a note or memorandum of all matters requiring a resolution ofdirectors. Such a note or memorandum shall constitute sufficient evidence of such resolution for all purposes.100.At every meeting of the directors the Chairman of the Board of Directors shall preside as chairman of the meeting. If there is no Chairman of the Board ofDirectors or if the Chairman of the Board of Directors is not present at the meeting the Vice Chairman of the Board of Directors shall preside. If there is noVice Chairman of the Board of Directors or if the Vice Chairman of the Board of Directors is not present at the meeting the directors present shall choosesome one of their number to be chairman of the meeting.101.An action that may be taken by the directors or a committee of directors at a meeting may also be taken by a resolution of directors or a committee ofdirectors consented to in writing or by telex, telegram, cable, facsimile or other written electronic communication by all directors or all members of thecommittee as the case may be, without the need for any notice. The consent may be in the form of counterparts, each counterpart being signed by one ormore directors.102.The directors shall cause the following records to be kept:a.minutes of all meetings of directors, members, committees of directors and committees of members; andb.copies of all resolutions consented to by directors, members, committees of directors and committees of members.103.The resolutions, records and minutes referred to in the preceding Article shall be kept at the registered office of the Company, its principal place ofbusiness or at such other place as the directors determine.104.The directors may, by resolution of directors, designate one or more committees, each consisting of one or more directors.105.Subject to the following Article, each committee of directors has such powers and authorities of the directors, including the power and authority to affix theSeal, as are set forth in the resolution of directors establishing the committee.106.The directors have no power to delegate the following powers to a committee of directors;a.to amend the memorandum or articles;b.to change the registered office or agent;c.to designate committees of directors;d.to delegate powers to a committee of directors;e.to appoint or remove directors;f.to appoint or remove an agent;g.to fix emoluments of directors;18h.to approve a plan of merger, consolidation or arrangement;i.to make a declaration of solvency for the purposes of section 198(1)(a) or to approve a liquidation plan;j.to make a determination under section 57(1) that the company will, immediately after a proposed distribution, satisfy the solvency test; ork.to authorise the company to continue as a company incorporated under the laws of a jurisdiction outside the British Virgin Islands.Paragraphs (c) and (d) do not prevent a committee of directors, where authorised by the directors, from appointing a subcommittee and delegating powersexercisable by the committee to the subcommittee.107.The meetings and proceedings of each committee of directors consisting of 2 or more directors shall be governed mutatis mutandis by the provisions ofthese Articles regulating the proceedings of directors so far as the same are not superseded by any provisions in the resolution establishing the committee.108.Without prejudice to the freedom of the directors to establish any other committee, if the shares (or depositary receipts therefore) are listed or quoted onthe Designated Stock Exchange, and if required by the Designated Stock Exchange, the directors shall establish and maintain an audit committee as acommittee of the board of directors, the composition and responsibilities of which shall comply with the rules and regulations of the SEC and theDesignated Stock Exchange. The audit committee shall meet at least once every financial quarter, or more frequently as circumstances dictate.109.The Company shall adopt a formal written audit committee charter and review and assess the adequacy of the formal written charter on an annual basis.The charter shall specify the responsibilities of the Audit Committee which shall include responsibility for, among other things, ensuring its receipt from theoutside auditors of the Company of a formal written statement delineating all relationships between the auditor and the Company, and the AuditCommittee’s responsibility for actively engaging in a dialogue with the auditor with respect to any disclosed relationships or services that may impact theobjectivity and independence of the auditor take appropriate action to oversee the independence of the outside auditor. In addition, the Audit Committee isresponsible for reviewing potential conflict of interest situations and approving all Related Party Transactions.110.Without prejudice to the freedom of the directors to establish any other committees, the Board may establish a Stock Option Committee to administer theCompany’s stock option plans, including authority to make and modify awards under such plans. For so long as the Securities of the Company are listed ortraded on the Designated Stock Exchange, the Stock Option Committee shall have at least two Independent Directors. The Stock Option Committee willadminister the Company’s stock option plans, including the authority to make and modify awards under such plans.111.Without prejudice to the freedom of the directors to establish any other committees, the Board may establish a Nominating Committee to assist the Board inidentifying qualified individuals to become members of the Board.OFFICERS112.The Company may by resolution of directors appoint officers of the Company at such times as shall be considered necessary or expedient. Such officersmay consist of a Chairman of the Board of Directors, a Vice Chairman of the Board of Directors, a President and one or more Vice Presidents, Secretaries andTreasurers and such other officers as may from time to time be deemed desirable. Any number of offices may be held by the same person.113.The officers shall perform such duties as shall be prescribed at the time of their appointment subject to any modification in such duties as may beprescribed thereafter by resolution of directors or resolution of members, but in the absence of any specific allocation of duties it shall be the responsibilityof the Chairman of the Board of Directors to preside at meetings of directors and members, the Vice Chairman to act in the absence of the Chairman, thePresident to manage the day to day affairs of the Company, the Vice Presidents to act in order of seniority in the absence of the President but otherwise toperform such duties as may be delegated to them by the President, the Secretaries to maintain the share register, minute books and records (other thanfinancial records) of the Company and to ensure compliance with all procedural requirements imposed on the Company by applicable law, and the Treasurerto be responsible for the financial affairs of the Company.19114.Subject to the rules of the Designated Stock Exchange, the emoluments of all officers shall be fixed by resolution of directors.115.The officers of the Company shall hold office until their successors are duly elected and qualified, but any officer elected or appointed by the directors maybe removed at any time, with or without cause, by resolution of directors. Any vacancy occurring in any office of the Company may be filled by resolutionof directors.CONFLICT OF INTERESTS116.A director of the Company shall, forthwith after becoming aware of the fact that he is interested in a transaction entered into or to be entered into by theCompany, disclose the interest to all other directors of the Company.117.A director of the Company is not required to comply with Article 112 if;a.the transaction or proposed transaction is between the director and the Company; andb.the transaction or proposed transaction is or is to be entered into in the ordinary course of the company’s business and on usual terms andconditions.118.For the purposes of Article 112 a disclosure to all other directors to the effect that a director is a member, director or officer of another named entity or has afiduciary relationship with respect to the entity or a named individual and is to be regarded as interested in any transaction which may, after the date of theentry or disclosure, be entered into with that entity or individual, is a sufficient disclosure of interest in relation to that transaction.119.A.A director of the Company who is interested in a transaction entered into or to be entered into by the Company may:(i)vote on a matter relating to the transaction;(ii)attend a meeting of directors at which a matter relating to the transaction arises and be included among the directors present at the meeting for thepurposes of a quorum; and(iii)sign a document on behalf of the Company, or do any other thing in his capacity as a director, that relates to the transaction,and, subject to compliance with the Act shall not, by reason of his office be accountable to the Company for any benefit which he derives from suchtransaction and no such transaction shall be liable to be avoided on the grounds of any such interest or benefit.119.B.For so long the Securities of the Company are listed or traded on the Designated Stock Exchange, the Company shall conduct an appropriate review of allmaterial Related Party Transactions on an ongoing basis and shall utilize the Audit Committee for the review and approval of potential conflicts of interestsituations.INDEMNIFICATION120.Subject to the limitations hereinafter provided the Company may indemnify against all expenses, including legal fees, and against all judgments, fines andamounts paid in settlement and reasonably incurred in connection with legal, administrative or investigative proceedings any person who;a.is or was a party or is threatened to be made a party to any threatened, pending or completed proceedings, whether civil, criminal, administrative orinvestigative, by reason of the fact that the person is or was a director, an officer or a liquidator of the Company; orb.is or was, at the request of the Company, serving as a director of, or in any other capacity is or was acting for, another body corporate or apartnership, joint venture, trust or other enterprise.20121.The Company may only indemnify a person if the person acted honestly and in good faith in what he believed to be in the best interests of the Companyand, in the case of criminal proceedings, the person had no reasonable cause to believe that his conduct was unlawful.122.For the purposes of the preceding Article, a director acts in the best interests of the Company if he acts in the best interests of;a.the Company’s holding company; orb.a shareholder or shareholders of the Company; in either case, in the circumstances specified in Article 85.123.The decision of the directors as to whether the person acted honestly and in good faith and with a view to the best interests of the Company and as towhether the person had no reasonable cause to believe that his conduct was unlawful is, in the absence of fraud, sufficient for the purposes of theseArticles, unless a question of law is involved.124.The termination of any proceedings by any judgment, order, settlement, conviction or the entering of a nolle prosequi does not, by itself, create apresumption that the person did not act honestly and in good faith and with a view to the best interests of the Company or that the person had reasonablecause to believe that his conduct was unlawful.Consolidated Statements of Changes in Stockholder’s EquityF5Consolidated Statements of Cash FlowsF6Notes to Consolidated Financial StatementsF7 F22F1REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRMTo the Shareholder and the Sole Director ofLK Technology Ltd.Opinion on the Consolidated Financial StatementsWe have audited the accompanying consolidated balance sheets of LK Technology Ltd. and. subsidiaries (the “Company”) as of December 31, 2017 and 2016, andthe related consolidated statements of operations and comprehensive loss, changes in shareholder’s equity and cash flows for each of the years then ended, andthe related notes (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in allmaterial respects, the consolidated financial position of the Company as of December 31, 2017 and 2016, and the consolidated results of its operations and its cashflows for each of the years then ended, in conformity with accounting principles generally accepted in the United States of America.Basis for OpinionThese consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’sconsolidated financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (UnitedStates) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules andregulations of the Securities and Exchange Commission and the PCAOB.We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonableassurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have,nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internalcontrol over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting.Accordingly, we express no such opinion.An independent member firm of Moore Stephens International Limited – members in principal cities throughout the worldOur audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, andperforming procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in theconsolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well asevaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion.Certified Public AccountantsWe have served as the Company’s auditor since 2018.Hong KongMay 25, 2018F2LK TECHNOLOGY LTD. AND SUBSIDIARIESCONSOLIDATED BALANCE SHEETS(IN U.S. DOLLARS)As of December 31,20172016AssetsCurrent assets:Cash and cash equivalents$72,379$83,843Accounts receivable, net of allowance for doubtful accounts9,729,6251,865,836Other receivables and prepayment2,376,7452,287,934Amounts due from related parties11,760,692Total current assets23,939,4414,237,613Property and equipment, net5,044,8727,771,027Intangible assets, net1,154,1971,682,445Goodwill7,239,9367,239,936Amount due from a related party204,412183,811TOTAL ASSETS37,582,85821,114,832LiabilitiesCurrent liabilities:Accounts payable8,784,5186,446,584Accrued liabilities and other payables12,962,91211,329,613Amounts due to related parties3,563,68316,129,323Total current liabilities25,311,11333,905,520Total liabilities25,311,11333,905,520Commitments and contingenciesShareholder’s Equity (Deficit)Share capitalCommon stock, $1 par value per share; 50,000 shares authorized as of December 31, 2017 and 2016, 1 share issued andoutstanding as of December 31, 2017 and 201611Additional paidin capital41,819,68510,037,469Accumulated deficit(29,936,158)(23,125,704)Accumulated other comprehensive income (loss)388,217297,546Total Shareholder’s Equity (Deficit)12,271,745(12,790,688)TOTAL LIABILITIES AND SHAREHOLDER’S EQUITY (DEFICIT)$37,582,858$21,114,832F3LK TECHNOLOGY LTD. AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS(IN U.S. DOLLARS)For the years endedDecember 31,20172016Revenues$26,082,417$5,233,145Less: Cost of revenues5,547,7796,315,504Less: Operating expenses:Selling and marketing23,908,7336,209,804General and administrative2,451,2492,108,854Research and development1,046,1982,882,202Total operating expenses27,406,18011,200,860Loss from operations(6,871,542)(12,283,219)Other income (expense):Interest expense(26,611)(4,412)Foreign exchange gains (losses)350,679(298,257)Loss from investment(428,571)Other income (expense), net(262,980)(34,572)Total other income (expense), net61,088(765,812)Loss before income taxes(6,810,454)(13,049,031)Income taxesNet loss$(6,810,454)$(13,049,031)Other comprehensive income:Foreign currency translation adjustment90,671387,375Total comprehensive loss$(6,719,783)$(12,661,656)F4LK TECHNOLOGY LTD. AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDER’S EQUITY(IN U.S. DOLLARS)Accumulated otherTotalOrdinary sharesAdditionalpaidin AccumulatedcomprehensiveIncomeShareholder’sEquity SharesAmountcapitaldeficits(loss)(Deficit)Balance as of December 31, 20151$ 1$8,250,505$(10,076,673)$(89,829)$(1,915,996)Capital contribution from C Media1,786,9641,786,964Net loss(13,049,031)(13,049,031)Foreign currency translation adjustment387,375387,375Balance as of December 31, 20161110,037,469(23,125,704)297,546(12,790,688)Capital contribution from C Media31,782,21631,782,216Net loss(6,810,454)(6,810,454)Foreign currency translation adjustment90,67190,671Balance as of December 31, 20171$1$41,819,685$(29,936,158)$388,217$12,271,745F5LK TECHNOLOGY LTD. AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF CASH FLOWS(IN U.S. DOLLARS)For the years endedDecember 31,20172016CASH FLOWS FROM OPERATING ACTIVITIES:Net loss$(6,810,454)$(13,049,031)Depreciation and amortization3,316,1813,245,161Loss on disposal of property and equipment115,19373,022Increase in allowance for doubtful accounts445,39562,591Changes in assets and liabilitiesAccounts receivable(7,933,730)(1,507,296)Other receivables and prepayment(2,202,960)2,873,984Accounts payable2,230,5434,757,457Accrued liabilities and other payables1,866,1377,483,441Net cash (used in) provided by operating activities(8,973,695)3,939,329CASH FLOWS FROM INVESTING ACTIVITIES:Purchase of property and equipment(12,689)(3,554,258)Proceeds from disposal of property and equipment29,942Net cash provided by (used in) investing activities17,253(3,554,258)CASH FLOWS FROM FINANCING ACTIVITIES:Advances from related parties8,938,290(1,197,870)Net cash provided by (used in) financing activities8,938,290(1,197,870)Effect of exchange rate changes6,688(32,746)Net decrease in cash and cash equivalents(11,464)(845,545)Cash and cash equivalents, at beginning of year83,843929,388Cash and cash equivalents, at end of year$72,379$83,843Supplemental cash flow disclosures:Interest paid26,6114,412Income taxes paidF6LK TECHNOLOGY LTD. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS(IN U.S. DOLLARS)NOTE 1 – DESCRIPTION OF BUSINESS AND ORGANIZATIONStar Chariot Limited was incorporated in the British Virgin Islands (“BVI”) as an exempted limited liability company on March 3, 2011. On January 18, 2018, it wasrenamed as LK Technology Ltd. (“LK Technology ” or the “Company”).LK Technology, its subsidiaries and its variable interest entities (“VIEs”) (collectively the “Group”) operate mobile application service for longdistance travel in thePeople’s Republic of China (the “PRC”). The core mobile application product, Luokuang, is made as an LBSsocial contents and services distribution platform. Itoffers functions based on various travel scenarios, e.g. information, entertainment, travel, ecommerce, O2O, advertising, etc.As of December 31, 2017, details of the Company’s subsidiaries and VIEs are as follows:NameDate ofincorporationPlace ofincorporationPercentage oflegal ownershipSubsidiaries:MMB LimitedApr 11, 2013Hong Kong100%Mobile Media (China) LimitedNov 6, 2007Hong Kong100%Zhong Chuan Tian Xia Information and Technology (Beijing) LimitedFeb 1, 2013PRC100%Zhong Chuan Tian Xia Information and Technology (Shenzhen) LimitedDec 23, 2010PRC100%VIEs:Beijing Zhong Chuan Shi Xun Technology Limited (“Zhong Chuan Shi Xun”)May 17, 2004PRC100%Jiangsu Zhong Chuan Rui You Information and Technology Limited (“Zhong Chuan Rui You”)May 26, 2011PRC100%Huoerguosi Luokuang Information and Technology Limited (“Huoerguosi Luokuang”)Jul 19, 2017PRC100%Shenzhen Jiu Zhou Shi Dai Digital and Technology Limited (“Jiu Zhou Shi Dai”)Nov 26, 2004PRC100%F7NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIESBasis of presentationThe consolidated financial statements of the Group have been prepared in accordance with accounting principles generally accepted in the United States of America(“US GAAP”).The Group incurred losses from operations of $6,871,542 and $12,283,219 for the years ended December 31, 2017 and 2016, respectively. As of December 31, 2017, theGroup had a shareholder’s equity of $12,271,145. The Group had negative cash flows from operating activities for the year ended December 31, 2017 of $8,973,695.As of December 31, 2017, the Group had cash and cash equivalents of $72,379 and a working capital deficit of $1,371,672. From 2018 and onwards, the Group willfocus on improving operation efficiency and cost reduction, and enhancing marketing functions to attract more users. The Group regularly monitors its current andexpected liquidity requirements to ensure that it maintains sufficient cash balances and accessible credit to meet its liquidity requirements in the short and long term.The parent company continues to provide cash flow to the Group. Based on working capital conditions and forecast for future operations, the Group believes that itwill be able to meet its payment obligations and other commitments for at least the following twelve months.Principles of consolidationThe consolidated financial statements include the financial statements of the Company, its subsidiaries, including the whollyforeign owned enterprises (“WFOEs”),and VIEs for which the Company is the primary beneficiary. All transactions and balances among the Company, its subsidiaries and consolidated VIEs have beeneliminated upon consolidation. The results of subsidiaries and consolidated VIEs acquired or disposed of are recorded in the consolidated statements of operationsfrom the effective date of acquisition or up to the effective date of disposal, as appropriate.A subsidiary is an entity in which (i) the Company directly or indirectly controls more than 50% of the voting power; or (ii) the Company has the power to appoint orremove the majority of the members of the board of directors or to cast a majority of votes at the meeting of the board of directors or to govern the financial andoperating policies of the investee pursuant to a statute or under an agreement among the shareholders or equity holders. A VIE is required to be consolidated by theprimary beneficiary of the entity if the equity holders in the entity do not have the characteristics of a controlling financial interest or do not have sufficient equity atrisk for the entity to finance its activities without additional subordinated financial support from other parties.F8To comply with the PRC legal restrictions on foreign ownership of companies that operate mobile application services, the Group operates in such restricted servicesin the PRC through certain PRC domestic companies, whose equity interests are held by certain management members or founders of the Group. Part of theregistered capital of these PRC domestic companies was funded by certain management members or founders of the Group. The Group has entered into certainexclusive business services agreements with these PRC domestic companies, which entitle it to receive a majority of their residual returns and make it obligatory forthe Group to absorb a majority of the risk of losses from their activities. In addition, the Group has entered into certain agreements with those management membersor founders, including equity interest pledge agreements of the equity interests held by those management members or founders and exclusive option agreements toacquire the equity interests in these companies when permitted by the PRC laws, rules and regulations.Details of the typical VIE structure of the Group’s significant consolidated VIEs, primarily domestic companies associated with the operations such as Zhong ChuanShi Xun, Zhong Chuan Rui You, Huoerguosi Luokuang and Jiu Zhou Shi Dai, are set forth below:(i)Contracts that give the Group effective control of VIEsExclusive option agreementsThe VIE equity holders have granted the WFOEs exclusive call options to purchase their equity interest in the VIEs at an exercise price equal to the higherof (i) the registered capital in the VIEs; and (ii) the minimum price as permitted by applicable PRC laws. Each relevant VIE has further granted the relevantWFOE an exclusive call option to purchase its assets at an exercise price equal to the book value of the assets or the minimum price as permitted byapplicable PRC laws, whichever is higher. The WFOEs may nominate another entity or individual to purchase the equity interest or assets, if applicable,under the call options. Each call option is exercisable subject to the condition that applicable PRC laws, rules and regulations do not prohibit completion ofthe transfer of the equity interest or assets pursuant to the call option. Each WFOE is entitled to all dividends and other distributions declared by the VIE,and the VIE equity holders have agreed to give up their rights to receive any distributions or proceeds from the disposal of their equity interests in the VIEwhich are in excess of the original registered capital that they contributed to the VIE, and to pay any such distributions or premium to the WFOE. Theexclusive call option agreements remain in effect until the equity interest or assets that are the subject of such agreements are transferred to the WFOEs.Equity pledge agreementsPursuant to the relevant equity pledge agreements, the relevant VIE equity holders have pledged all of their interests in the equity of the VIEs as acontinuing first priority security interest in favor of the corresponding WFOEs to secure the performance of obligations by the VIEs and/or the equityholders under the other structure contracts. Each WFOE is entitled to exercise its right to dispose of the VIE equity holders’ pledged interests in the equityof the VIE and has priority in receiving payment by the application of proceeds from the auction or sale of such pledged interests, in the event of anybreach or default under the loan agreement or other structure contracts, if applicable. These equity pledge agreements remain in force for the duration ofthe relevant loan agreement and other structure contracts.F9(ii)Contracts that enable the Group to receive substantially all of the economic benefits from the VIEsExclusive business services agreementsEach relevant VIE has entered into an exclusive business services agreement with the respective WFOE, pursuant to which the relevant WFOE providesexclusive business services to the VIE. In exchange, the VIE pays a service fee to the WFOE which typically amounts to what would be substantially all ofthe VIE’s pretax profit, resulting in a transfer of substantially all of the profits from the VIE to the WFOE.Other arrangementsThe exclusive call option agreements described above also enable the Group to receive substantially all of the economic benefits from the VIEs by typicallyentitling the WFOEs to all dividends and other distributions declared by the VIEs and to any distributions or proceeds from the disposal by the VIE equityholders of their equity interests in the VIEs that are in excess of the original registered capital that they contributed to the VIEs.Based on these contractual agreements, the Group believes that the PRC domestic companies as described above should be considered as VIEs because the equityholders do not have significant equity at risk nor do they have the characteristics of a controlling financial interest. Given that the Group is the primary beneficiaryof these PRC domestic companies, the Group believes that these VIEs should be consolidated based on the structure as described above.Under the contractual arrangements with the consolidated VIEs, the Group has the power to direct activities of the consolidated VIEs and can have assetstransferred out of the consolidated VIEs under its control. Therefore, the Group considers that there is no asset in any of the consolidated VIEs that can be usedonly to settle obligations of the consolidated VIEs, except for registered capital and PRC statutory reserves. As all consolidated VIEs are incorporated as limitedliability companies under the Company Law of the PRC, creditors of the consolidated VIEs do not have recourse to the general credit of the Group for any of theliabilities of the consolidated VIEs.Currently there is no contractual arrangement which requires the Group to provide additional financial support to the consolidated VIEs. However, as the Groupconducts its businesses primarily based on the licenses and approvals held by its consolidated VIEs, the Group has provided and will continue to provide financialsupport to the consolidated VIEs considering the business requirements of the consolidated VIEs, as well as the Group’s own business objectives in the future.F10Use of estimatesThe preparation of financial statements in conformity with US GAAP requires the Group to make estimates and assumptions that affect the reported amounts ofassets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expensesduring the reporting period. The most significant estimates are the allowance for doubtful accounts, the useful lives of property and equipment and intangibleassets, impairment of longlived assets and goodwill. Actual results could differ from those estimates.Fair value measurementsFair value is the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at themeasurement date under current market conditions. When determining the fair value measurements for assets and liabilities required or permitted to be recorded atfair value, the Group considers the principal or most advantageous market in which it would transact and it considers assumptions that market participants woulduse when pricing the asset or liability.Authoritative literature provides a fair value hierarchy which prioritizes the inputs to valuation techniques used to measure fair value into three broad levels. Thelevel in the hierarchy within which the fair value measurement in its entirety falls is based upon the lowest level of input that is significant to the fair valuemeasurement as follows:Level 1Level 1 applies to assets or liabilities for which there are quoted prices in active markets for identical assets or liabilities.Level 2Level 2 applies to assets or liabilities for which there are inputs other than quoted prices included within Level 1 that are observable for the asset or liability such asquoted prices for similar assets or liabilities in active markets; quoted prices for identical assets or liabilities in markets with insufficient volume or infrequenttransactions (less active markets); or modelderived valuations in which significant inputs are observable or can be derived principally from, or corroborated by,observable market data.Level 3Level 3 applies to assets or liabilities for which there are unobservable inputs to the valuation methodology that are significant to the measurement of the fair valueof the assets or liabilities.F11Cash and cash equivalentsCash and cash equivalents primarily consist of cash, money market funds, investments in interest bearing demand deposit accounts, time deposits and highly liquidinvestments with original maturities of three months or less from the date of purchase and are stated at cost which approximates their fair value. The Group has nocash equivalents.Accounts receivable, net of allowanceAccounts receivable are recognized and carried at the original invoiced amount less an allowance for any potential uncollectible amounts. An estimate for doubtfuldebts is made when collection of the full amount is no longer probable. Bad debts are written off as incurred. The Group generally does not require collateral from itscustomers.The Group maintains allowances for doubtful accounts for estimated losses resulting from the failure of customers to make payments on time. The Group reviews theaccounts receivable on a periodic basis and makes specific allowances when there is doubt as to the collectability of individual balances. In evaluating thecollectability of individual receivable balances, the Group considers many factors, including the age of the balance, the customer’s payment history, its currentcreditworthiness and current economic trends.Property and equipment, netProperty and equipment are carried at cost less accumulated depreciation. Depreciation is calculated on a straightline basis over the following estimated usefullives:Wifi equipment– 3 yearsOffice equipment– 3 to 5 yearsVehicles– 5 yearsCosts of repairs and maintenance are expensed as incurred and asset improvements are capitalized. The gain or loss on disposal of property and equipment is thedifference between the net sales proceeds and the carrying amount of the relevant assets and is recognized in the consolidated income statement. When propertyand equipment are retired or otherwise disposed of, the cost and accumulated depreciation are removed from the accounts and any resulting gain or loss is includedin the results of operations for the respective period.Construction in progressAssets under construction are not depreciated until construction is completed and the assets are ready for their intended use.F12Intangible assetsIntangible assets with finite lives are amortized using the straightline method over the estimated economic lives.Intangible assets have weighted average economic lives from the date of purchase as follows:Software– 5 yearsTrademarks– 10 yearsGoodwillThe Group assesses goodwill for impairment in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”)subtopic 35020, Intangibles—Goodwill and Other: Goodwill (“ASC 35020”), which requires that goodwill to be tested for impairment at the reporting unit level atleast annually and more frequently upon the occurrence of certain events, as defined by ASC 35020.We have the option to assess qualitative factors first to determine whether it is necessary to perform the twostep test in accordance with ASC 35020. If we believe,as a result of the qualitative assessment, that it is morelikelythannot that the fair value of the reporting unit is less than its carrying amount, the twostepquantitative impairment test described below is required. Otherwise, no further testing is required. In the qualitative assessment, we consider primary factors such asindustry and market considerations, overall financial performance of the reporting unit, and other specific information related to the operations. In performing thetwostep quantitative impairment test, the first step compares the carrying amount of the reporting unit to the fair value of the reporting unit based on either quotedmarket prices of the ordinary shares or estimated fair value using a combination of the income approach and the market approach. If the fair value of the reportingunit exceeds the carrying value of the reporting unit, goodwill is not impaired and we are not required to perform further testing. If the carrying value of the reportingunit exceeds the fair value of the reporting unit, then we must perform the second step of the impairment test in order to determine the implied fair value of thereporting unit’s goodwill. The fair value of the reporting unit is allocated to its assets and liabilities in a manner similar to a purchase price allocation in order todetermine the implied fair value of the reporting unit goodwill. If the carrying amount of the goodwill is greater than its implied fair value, the excess is recognized asan impairment loss.In 2017, we performed a qualitative assessment for goodwill. Based on the requirements of ASC35020, we evaluated all relevant factors, including but not limited tomacroeconomic conditions, industry and market conditions, financial performance. We weighed all factors in their entirety and concluded that it was not morelikelythannot the fair value was less than the carrying amount of the reporting unit, and further impairment testing on goodwill was unnecessary as of December 31, 2017and 2016.F13Impairment or disposal of longlived assetsLonglived assets other than goodwill are included in impairment evaluations when events and circumstances exist that indicate the carrying value of these assetsmay not be recoverable. In accordance with FASB ASC 360, Property, Plant and Equipment, the Group assesses the recoverability of the carrying value of longlivedassets by first grouping its longlived assets with other assets and liabilities at the lowest level for which identifiable cash flows are largely independent of the cashflows of other assets and liabilities (the asset group) and, secondly, estimating the undiscounted future cash flows that are directly associated with and expected toarise from the use of and eventual disposition of such asset group. If the carrying value of the asset group exceeds the estimated undiscounted cash flows, theGroup recognizes an impairment loss to the extent the carrying value of the longlived asset exceeds its fair value. The Group determines fair value through quotedmarket prices in active markets or, if quotations of market prices are unavailable, through the performance of internal analysis using a discounted cash flowmethodology or obtains external appraisals from independent valuation firms. The undiscounted and discounted cash flow analyses are based on a number ofestimates and assumptions, including the expected period over which the asset will be utilized, projected future operating results of the asset group, discount rateand longterm growth rate.As of December 31, 2017 and 2016, the Group assessed the impairment of its longlived assets and concluded that there was no impairment indication.Business combinationWe account for business combinations using the purchase method of accounting in accordance with FASB ASC topic 805, Business combinations. The purchasemethod accounting requires that the consideration transferred be allocated to the assets, including separately identifiable assets and liabilities we acquired, basedon their estimated fair values. The consideration transferred in an acquisition is measured as the aggregate of the fair values at the date of exchange of the assetsgiven, liabilities incurred, and equity instruments issued as well as the contingent considerations and all contractual contingencies as of the acquisition date. Thecosts directly attributable to the acquisition are expensed as incurred. Identifiable assets, liabilities and contingent liabilities acquired or assumed are measuredseparately at their fair value as of the acquisition date, irrespective of the extent of any noncontrolling interests. The excess of (i) the total of cost of acquisition, fairvalue of the noncontrolling interests and acquisition date fair value of any previously held equity interest in the acquiree over (ii) the fair value of the identifiable netassets of the acquiree, is recorded as goodwill. If the cost of acquisition is less than the fair value of the net assets of the subsidiary acquired, the difference isrecognized directly in earnings.Revenue recognitionThe Group recognizes revenue in accordance with FASB ASC topic 605, Revenue Recognition (“ASC 605”). Revenue is recognized when the following four revenuerecognition criteria are met: (i) persuasive evidence of an arrangement exists, (ii) delivery has occurred or services have been provided, (iii) the selling price is fixed ordeterminable, and (iv) collectability is reasonably assured.F14Displaybased online advertising servicesThe Group provides displaybased online advertising services to customers by integrating text description, image and video, and displaying the advertisements in aprominent position of LuoKuang Application. The Group recognizes revenue in accordance with ASC 605, over the contractual term based on the agreements andconfirmation letters signed by both parties, commencing on the date the customer’s advertisement is displayed on the Group’s platform.Foreign currency translationThe functional and reporting currency of the Company and the Company’s subsidiaries domiciled in BVI and Hong Kong are the United States dollar (“U.S. dollar”).The financial records of the Company’s other subsidiaries and VIEs located in the PRC are maintained in their local currency, the Chinese Renminbi (“RMB”), whichare the functional currency of these entities.Monetary assets and liabilities denominated in currencies other than the functional currency are translated into the functional currency at the rates of exchangeruling at the balance sheet date. Transactions in currencies other than the functional currency during the year are converted into the functional currency at theapplicable rates of exchange prevailing when the transactions occurred. Transaction gains and losses are recognized in the statements of operations.The Company’s entities with a functional currency of RMB translate their operating results and financial position into the U.S. dollar, the Company’s reportingcurrency. Assets and liabilities are translated using the exchange rates in effect on the balance sheet date. Revenues, expenses, gains and losses are translatedusing the average rate for the year. Retained earnings and equity are translated using the historical rate. Translation adjustments are reported as cumulativetranslation adjustments and are shown as a separate component of other comprehensive income.Income taxesDeferred income taxes are recognized for temporary differences between the tax basis of assets and liabilities and their reported amounts in the financial statements,net operating loss carry forwards and credits, by applying enacted statutory tax rates applicable to future years. Deferred tax assets are reduced by a valuationallowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Current income taxesare provided for in accordance with the laws and regulations applicable to the Group as enacted by the relevant tax authorities.The impact of an uncertain income tax position on the income tax return must be recognized at the largest amount that is morelikelythan not to be sustained uponaudit by the relevant tax authorities. An uncertain income tax position will not be recognized if it has less than a 50% likelihood of being sustained. Additionally, theGroup classifies the interest and penalties, if any, as a component of the income tax expense. For years ended December 31, 2017 and 2016, the Group did not haveany material interest or penalties associated with tax positions nor did the Group have any significant unrecognized uncertain tax positions.F15Related partiesParties are considered to be related to the Company if the parties, directly or indirectly, through one or more intermediaries, control, are controlled by, or are undercommon control with the Company. Related parties also include principal owners of the Company, its management, members of the immediate families of principalowners of the Company and its management and other parties with which the Company may deal with if one party controls or can significantly influence themanagement or operating policies of the other to an extent that one of the transacting parties might be prevented from fully pursuing its own separate interests. TheCompany discloses all significant related party transactions.LeasesLeases have been classified as either capital or operating leases. Leases that transfer substantially all the benefits and risks incidental to the ownership of assets areaccounted for as if there was an acquisition of an asset and incurrence of an obligation at the inception of the lease. All other leases are accounted for as operatingleases wherein rental payments are expensed as incurred.When the Group is the lessor, minimum contractual rental from leases are recognized on a straightline basis over the noncancelable term of the lease. With respectto a particular lease, actual amounts billed in accordance with the lease during any given period may be higher or lower than the amount of rental revenue recognizedfor the period. Straightline rental revenue commences when the customer assumes control of the leased premises. Accrued straightline rents receivable representsthe amount by which straightline rental revenue exceeds rents currently billed in accordance with lease agreements. Contingent rental revenue is accrued when thecontingency is removed.Advertising costsAdvertising costs include expenses associated with direct marketing. All advertising costs are expensed as incurred and included in selling and marketing expenses.During the years ended December 31, 2017 and 2016, advertising costs amounted to $23,171,170 and $4,537,653, respectively.Comprehensive lossComprehensive loss includes net loss and foreign currency translation adjustments and is presented net of tax. The tax effect is nil for the two years endedDecember 31, 2017 and 2016 in the consolidated statements of comprehensive loss.Concentration of credit riskFinancial instruments that potentially expose the Group to concentrations of credit risk consist primarily of cash and accounts receivable. The Group places its cashwith financial institutions with highcredit rating and quality in China. For the year ended December 31, 2017, two customers accounted for over 10% of totalrevenue. For the year ended December 31, 2016, four customers accounted for over 10% of total revenue. At December 31, 2017 and 2016, the Group had credit riskexposure of uninured cash in banks of approximately $72,379 and $83,843, respectively.F16NOTE 3 – INCOME TAXAt December 31, 2017 and 2016, the Group had an unused net operating loss carryforwards of approximately $25,123,726 and $20,081,239, respectively, for income taxpurposes, which expires between 2018 to 2022 and between 2017 to 2021, respectively. At December 31, 2017 and 2016, these net operating losses carryforwards mayresult in future income tax benefits of approximately $5,043,944 and $4,008,863, respectively, however, because realization is uncertain at this time, a valuationallowance in the same amount has been established. Deferred income taxes reflect the net effects of temporary differences between the carrying amounts of assetsand liabilities for financial reporting purposes and the amounts used for income tax purposes.Significant components of the Group’s deferred tax liabilities and assets of December 31, 2017 and 2016 are as follows:December 31,December 31,20172016Deferred tax liabilities$$Deferred tax assetNet operating loss carryforward5,043,9444,008,863Valuation allowance(5,043,944)(4,008,863)Net deferred tax assetMovement of valuation allowanceDecember 31,2017December 31,2016At the beginning of the year$4,008,863$2,049,352Current year addition823,9702,159,518Expired(61,411)Exchange difference272,522(200,007)At the end of the year5,043,9444,008,863The Company is not subject to taxation in BVI under the current BVI law. Subsidiaries operating in the PRC are subject to PRC Enterprise Income Tax at the statutoryrate of 25% for the years ended December 31, 2017 and 2016. Subsidiaries operating in Hong Kong are subject to Hong Kong income taxes at a rate of 16.5% for theyears ended December 31, 2017 and 2016.F17A reconciliation of the income tax expense to the amount computed by applying the current statutory tax rate to the loss before income taxes in the consolidatedstatements of comprehensive income is as follows:December 31,December 31,20172016Loss before income taxes$(6,810,454)$(13,049,031)Tax loss at statutory tax rate(1,655,174)(3,386,822)Nondeductible items6,729,2551,712,857Nontaxable items(3,789,956)(674,189)Change in valuation allowance823,9702,159,518Tax benefits(2,108,095)188,636Income tax expensesNOTE 4 – ACCOUNTS RECEIVABLEAt December 31, 2017 and 2016, accounts receivable consisted of the following:December 31,December 31,20172016Accounts receivable$10,406,602$2,098,946Less: allowance for doubtful accounts676,977233,110$9,729,625$1,865,836NOTE 5 – OTHER RECEIVABLESAt December 31, 2017 and 2016, other receivables consisted of the following:December 31,2017December 31,2016Advances to suppliers$339,701$181,472VAT recoverable (1)3,033,0651,662,805Other5,048,189485,152$2,376,745$2,287,934(1)The balance of advanced VAT represents input VAT available for deducting the amount of VAT paid in the future. During the years ended December 31, 2017and 2016, the Group purchased a large amount of WiFi equipment for deployments, which generated related input VAT approved by tax authority.F18NOTE 6 – AMOUNTS DUE FROM RELATEDPARTIESAt December 31, 2017 and 2016, amounts due from related parties consisted of the following:Name of related partyDecember 31,2017December 31,2016C Media Limited (1)$11,760,692$Ya Tuo Ji International Consultancy (Beijing) Limited (2)204,412183,811(1)C Media Limited is the parent company of LK Technology. The Group expects the amounts due from the related party will be returned to the Group within oneyear.(2)Ya Tuo Ji is a company controlled by the spouse of a major shareholder of C Media Limited. The loan is unsecured, interestfree and repayable on January 5,2019.NOTE 7 – PROPERTY AND EQUIPMENTAt December 31, 2017 and 2016, property and equipment consisted of the following:December 31,December 31,Useful life20172016WiFi equipment3 Years$8,711,424$8,367,678Vehicles5 Years43,246Office and other equipment3 – 5 Years170,242416,434Constructioninprogress2,166,4522,652,28811,048,11811,479,646Less: accumulated depreciation(6,003,246)(3,708,619)$5,044,872$7,771,027For the years ended December 31, 2017 and 2016, depreciation expense amounted to $2,628,884 and $2,474,434, respectively, of which $2,423,655 and $2,194,582,respectively, was included in cost of revenue, $117,648 and $121,740, respectively, was included in selling and marketing expenses and the remainder was included ingeneral and administrative expense.Included in constructioninprogress are WiFI equipment under construction.F19NOTE 8 – GOODWILLIn September of 2014, Zhong Chuan Shi Xun acquired a 100% interest in Zhong Chuan Rui You for a consideration of $7,391,894 (RMB48,000,000). Zhong Chuan RuiYou is primarily engaged in on train WiFi business, deploying WiFi equipment on trains and providing passengers with entertainment and information services ontrains. The book value of the identifiable net assets of Zhong Chuan Rui You was $151,958 (RMB963,000) and a goodwill of $7,239,936 was recorded.NOTE 9 – ACCRUED LIABILITIES AND OTHER PAYABLESAt December 31, 2017 and 2016, accrued liabilities and other payables consisted of the following:December 31,December 31,20172016Deferred revenue$2,326,406$302,735Accrued payroll143,998316,458Other taxes payable3,544,469461,699Other payable852,384686,526Other loans6,095,6559,562,915$12,962,912$11,329,613Deferred revenue represents prepayments from customers for advertising service and is recognized as revenue when the advertising services are rendered.Other loans of $939,555 and $57,416, respectively, as of December 31, 2017 and 2016, are unsecured, bear daily interest at 0.04% and are repayable on demand.NOTE 10 – AMOUNTS DUE TO RELATED PARTIESAt December 31, 2017 and 2016, amounts due to related parties consisted of the following:December 31,December 31,Name of related party20172016Mr. Song Xuesong (“Mr. Song”) (1)$2,921,639$10,669,325C Media Limited (2)$$4,855,236Thumb Beijing Branch (3)$612,103$576,560Thumb Shenzhen Branch (3)$29,941$28,202(1) The Group’s CEO(2) C Media Limited, the parent company.(3) Thumb Beijing and Shenzhen Branch are controlled by the spouse of Mr. Song.Amounts due to related parties are shortterm in nature, noninterest bearing, unsecured and payable on demand.F20NOTE 11 – RETIREMENT AND WELFARE BENEFITSThe Group’s fulltime employees are entitled to staff welfare benefits including medical care, casualty, housing benefits, education benefits, unemployment insuranceand pension benefits through a PRC governmentmandated multiemployer defined contribution plan. The Group is required to accrue the employerportion forthese benefits based on certain percentages of the employees’ salaries. The total provision for such employee benefits of $170,227 and $353,033 during the yearsended December 31, 2017 and 2016, respectively, of which $23,392 and $30,455, respectively, was charged to cost of revenue, $48,957 and $97,408, respectively wascharged to selling and marketing expenses, $49,717 and $86,934, respectively, was charged to general and administrative expenses and $48,161 and $138,236,respectively was charged to research and development expenses. The Group is required to make contributions to the plan out of the amounts accrued for all staffwelfare benefits except for education benefits. The PRC government is responsible for the staff welfare benefits including medical care, casualty, housing benefits,unemployment insurance and pension benefits to be paid to these employees.NOTE 12 – STATUTORY RESERVESAs stipulated by the relevant law and regulations in the PRC, the Group’s subsidiaries and VIEs in the PRC are required to maintain a nondistributable statutorysurplus reserve. Appropriations to the statutory surplus reserve are required to be made at not less than 10% of profit after taxes as reported in the subsidiaries’statutory financial statements prepared under the PRC GAAP. Once appropriated, these amounts are not available for future distribution to owners or shareholders.Once the general reserve is accumulated to 50% of the subsidiaries’ registered capital, the subsidiaries can choose not to provide more reserves. The statutoryreserve may be applied against prior year losses, if any, and may be used for general business expansion and production and increase in registered capital of thesubsidiaries. The Group allocated $Nil to statutory reserves during the years ended December 31, 2017 and 2016, respectively. The statutory reserves cannot betransferred to the Company in the form of loans or advances and are not distributable as cash dividends except in the event of liquidation.NOTE 13 – COMMITMENTS AND CONTINGENCIESOperating leasesWe have entered into operating lease agreements primarily for our office spaces in China. These leases expire through 2018 and are renewable upon negotiation.Future minimum rental payment required under the Office Lease is as follows:Year ending December 31:Amount2018$122,138F21Contingencies(a) Litigation with Shanghai Fusheng Weier Intelligent Control Technology Co., Ltd.On January 22, 2016, Zhong Chuan Rui You and Shanghai Fusheng Weier Intelligent Control Technology Co., Ltd. (“Fusheng Weier”) signed a contract forequipment of $1,652,842 (RMB10,800,000). Since Zhong Chuan Rui You did not make the payments of $1,126,381 (RMB7,360,000) on the due dates, Fusheng Weierfiled a lawsuit against Zhong Chuan Rui You in Shanghai Xuhui District People’s Court on October 8, 2016. On March 9, 2017, Xuhui District People’s Court issuedthe verdict requiring Zhong Chuan Rui You to pay the overdue debts. In August 2017, C Media Limited made the payment of $512,075 (RMB3,346,000). Theremaining balance has been accrued in accounts payable. The payment schedule for the remaining balance is being negotiated by the two parties. On February 5,2018, a hearing was held adding Zhong Chuan Shi Xun as a defendant. The Group plans to settle the remaining balance within one year.(b) Lawsuit with Gansu Jinlun Culture Media Co., Ltd.On August 22, 2014, Zhong Chuan Rui You and Gansu Jinlun Culture Media Co., Ltd. (“Gansu Jinlun”) signed a “Lanzhou Railway Bureau Airconditioned Train WiFi Network System Advertising Operation Rights Agreement” for advertising on 72 trains of $1,467,880 (RMB9,604,633). Due to the dispute on the projectimplementation, Zhong Chuan Rui You did not pay the advertising fee. On August 23, 2017, Gansu Jinlun filed a lawsuit with Gansu Intermediate People’s Court. OnDecember 19, 2017, Gansu Intermediate People’s Court issued a verdict, ruling that Zhong Chuan Rui You settle the overdue advertising fee. Since only 18 out of 72trains have been installed with Wifi network system, Zhong Chuan Rui You disputed and appealed to the verdict. The next court trial date has not yet beendetermined.C Media and Gansu Jinlun are negotiating a potential settlement to resume the contract. According to the legal counsel, it is probable that the settlement will amountto approximately $459,000 (RMB3,000,000); therefore, this amount has been accrued in accounts payable.(c) Litigation with Shenzhen Hua Xun Fang Zhou Technology Co., Ltd.On June 16, 2015, Zhong Chuan Rui You signed a cooperation agreement with Shenzhen Hua Xun Fang Zhou Technology Co., Ltd. (“Shenzhen Hua Xun”) andXuesong Song, a major shareholder of C Media Limited. Pursuant to this agreement, Zhong Chuan Rui You procures equipment from Shenzhen Hua Xun. XuesongSong acts as a joint liability guarantor for the entire debts of Zhong Chuan Rui You under this agreement. As Zhong Chuan Rui You did not make the payments onthe due dates, Shenzhen Hua Xun filed a lawsuit with Shenzhen Baoan District People’s Court on May 31, 2016. On November 1, 2016, Zhong Chuan Rui You,Xuesong Song and Shenzhen Hua Xun reached a settlement in Shenzhen Baoan District People’s Court to settle $1,735,389 (RMB11,355,000) in four instalments. OnDecember 30, 2017, the debt was assigned to C Media Limited.NOTE 14 – SUBSEQUENT EVENTThe Group has evaluated all events or transactions that occurred after December 31, 2017 through May 25, 2018, which is the date that the financial statements wereavailable to be issued.F22EX1.1 2 f20f2017ex11_luokung.htm AMENDED AND RESTATED MEMORANDUM OF ASSOCIATION AND ARTICLES OF ASSOCIATION OF LUOKUNGTECHNOLOGY CORP., DATED AUGUST 20, 2018, AND AS CURRENTLY IN EFFECTExhibit 1.1BC NO: 1553620British Virgin IslandsThe BVI Business Companies Act, 2004(No. 16 of 2004)Memorandum of AssociationandArticles of AssociationofLuokung Technology Corp.Incorporated the 24th day of October, 2009Amended and Restated the 11th Day of December 2009Amended and Restated the 17th Day of December 2009Amended and Restated the 25th Day of March 2010Amended and Restated the 21st day of May 2018Amended and restated the 17 August 2018Amended and restated the 21 August 2018Portcullis (BVI) LimitedPortcullis Chambers4th Floor Ellen Skelton Building3076 Sir Francis Drake HighwayRoad Town, TortolaBritish Virgin IslandsTERRITORY OF THE BRITISH VIRGIN ISLANDSTHE BVI BUSINESS COMPANIES ACT, 2004(No. 16 of 2004)MEMORANDUM OF ASSOCIATIONOFLuokung Technology Corp.NAME1.The name of the Company is Luokung Technology Corp.TYPE OF COMPANY2.The Company is a company limited by shares.REGISTERED OFFICE3.The first Registered Office of the Company is the offices of Portcullis TrustNet (BVI) Limited, Portcullis TrustNet Chambers, P.O. Box 3444, Road Town,Tortola, British Virgin Islands, the office of the registered agent.3.1The current Registered Office of the Company is Portcullis Chambers, 4th Floor Ellen Skelton Building, 3076 SirFrancis Drake Highway, Road Town,Tortola, British Virgin Islands VG1110.REGISTERED AGENT4.The first Registered Agent of the Company is Portcullis TrustNet (BVI) Limited of Portcullis TrustNet Chambers, P.O. Box 3444, Road Town, Tortola,British Virgin Islands.4.1The current Registered Agent of the Company is Portcullis (BVI) Ltd of Portcullis Chambers, 4th Floor Ellen Skelton Building, 3076 Sir Francis DrakeHighway, Road Town, Tortola, British Virgin Islands VG1110.AUTHORISED NUMBER OF SHARES5.The Company is authorised to issue a maximum of 251,000,000 shares.CLASSES, NUMBER AND PAR VALUE OF SHARES6.As at the date of adoption of this memorandum, the Company is authorised to issue (a) 250,000,000 ordinary shares without par value (“OrdinaryShares”); and (b) 1,000,000 preferred shares without par value (“Preferred Shares”).FRACTIONAL SHARES7.The Company may issue fractions of a share and a fractional share shall have the same corresponding fractional liabilities, limitations, preferences,privileges, qualifications, restrictions, rights and other attributes of a whole share of the same class or series of shares.RIGHTS, PRIVILEGES, RESTRICTIONS AND CONDITIONS ATTACHING TO SHARES8.(1)Subject to the memorandum and articles of association (and, for greater clarity, without prejudice to any special rights conferred thereby on theholders of any other shares), an Ordinary Share of the Company confers on the holder;(a)the right to one vote at a meeting of the members of the Company or on any Resolution of Members;(b)the right to an equal share in any Distribution paid by the Company; and(c)the right to an equal share in the distribution of the surplus assets of the Company on a winding up.(2)Subject to the memorandum and articles of association (and, for greater clarity, without prejudice to any special rights conferred thereby on theholders of any other shares), a Preferred Share of the Company confers on the holder;(a)the right to 399 votes at a meeting of the members of the Company or on any Resolution of Members;(b)the right to an equal share in any Distribution paid by the Company;(c)the right to an equal share in the distribution of the surplus assets of the Company on its liquidation.(d)be freely transferable, in whole or in part, by Mr. Xuesong Song to any third party through one or more Private Transactions, subject toApplicable Law; and(e)be freely transferable, in whole or in part, by Mr. Xuesong Song to any third party through one or more Public Transactions, subject to ApplicableLaw and Automatic Conversion of such Preferred Share(s) into Ordinary Share(s).(3)The directors may at their discretion by resolution of directors redeem, purchase or otherwise acquire all or any of the shares in the Companysubject to the Articles..VARIATION OF CLASS RIGHTS9.If at any time the issued shares are divided into different classes or series of shares, the rights attached to any class or series (unless otherwise providedby the terms of issue of the shares of that class or series) may, whether or not the Company is being wound up, be varied with the consent in writing of theholders of not less than threefourths of the issued shares of that class or series and of the holders of not less than threefourths of the issued shares ofany other class or series of shares which may be affected by such variation.RIGHTS NOT VARIED BY THE ISSUE OF SHARES PARI PASSU10.The rights conferred upon the holders of the shares of any class issued with preferred or other rights shall not, unless otherwise expressly provided by theterms of issue of the shares of that class, be deemed to be varied by the creation or issue of further shares ranking pari passu therewith.CAPACITY AND POWERS11.Subject to the Act, any other British Virgin Islands legislation and paragraph 12 below the Company has, irrespective of corporate benefit:(a)full capacity to carry on or undertake any business or activity, do any act or enter into any transaction;(b)for the purposes of paragraph (a), full rights, powers and privileges; and(c)full powers to issue shares with preemptive rights, subject to the Articles.2LIMITATIONS ON THE COMPANY’S BUSINESS12.For the purposes of section 9(4) of the Act the Company may not;(a)carry on banking or trust business, unless it is licensed to do so under the Banks and Trust Companies Act, 1990;(b)carry on business as an insurance or reinsurance company, insurance agent or insurance broker, unless it is licensed under the Insurance Act1994;(c)carry on business of company management, unless it is licensed under the Company Management Act, 1990;(d)carry on the business of providing the registered office or the registered agent for companies incorporated in the British Virgin Islands;(e)carry on the business as a mutual fund, manager of mutual funds or administrator of mutual funds unless it is recognized or licenced as the casemay be under the Mutual Funds Act 1996; or(f)carry on any other business that gives rise to a licencing requirement under any law for the time being in force in the British Virgin Islands unlessit is licenced, regulated, recognised or otherwise approved pursuant to such law.REGISTERED SHARES AND PROHIBITION ON ISSUE OF BEARER SHARES13.Shares in the Company may only be issued as registered shares. The issue of shares to bearer is prohibited.PROHIBITION ON EXCHANGE AND CONVERSION OF REGISTERED SHARES TO BEARER SHARES14.The exchange or conversion of registered shares to bearer shares is prohibited.TRANSFER OF REGISTERED SHARES15.Subject to the provisions of the Articles the Company may upon receipt of an instrument of transfer enter the name of the transferee in the register ofmembers subject to the prior or simultaneous approval of the Company as evidenced by a resolution of directors or by a resolution of members. Subject toany resolution of the members to the contrary, the directors may resolve by resolution of directors to refuse or delay the registration of the transfer forreasons that shall be specified in the resolution of directors.AMENDMENT OF MEMORANDUM AND ARTICLES OF ASSOCIATION16.1The Company may amend its Memorandum or Articles by a resolution of members or by a resolution of directors provided that the directors shall not havethe power to amend the Memorandum or Articles;(a)to restrict the rights or powers of the members to amend the Memorandum or Articles;(b)to change the percentage of members required to pass a resolution to amend the Memorandum or Articles;(c)in circumstances where the Memorandum or Articles cannot be amended by the members; or(d)to Clauses 8, 9, 10 or this Clause 12.16.2No amendment may be made to Regulation 76 of the Articles unless approved by an affirmative vote of the holders of 66 2/3 percent or more of theoutstanding votes of the shares entitled to vote thereon.3DEFINITIONS17.The meanings of words in this Memorandum are as defined in the Articles.We, Portcullis TrustNet (BVI) Limited of Portcullis TrustNet Chambers, P.O. Box 3444, Road Town, Tortola, British Virgin Islands for the purpose ofincorporating a BVI Business Company under the laws of the British Virgin Islands hereby sign this Memorandum of Association the 27th day of October,2009.Incorporator/s/ Nicole WheatleyPortcullis TrustNet (BVI) LimitedPortcullis TrustNet ChambersP.O. Box 3444Road Town, TortolaBritish Virgin Islands(Sgd. Nicole Wheatley)4TERRITORY OF THE BRITISH VIRGIN ISLANDSTHE BVI BUSINESS COMPANIES ACT, 2004(No. 16 of 2004)ARTICLES OF ASSOCIATIONOFLuokung Technology Corp.PRELIMINARY1.In these Articles, if not inconsistent with the subject or context, the words and expressions standing in the first column of the following table shall bear themeanings set opposite them respectively in the second column thereof.WordsMeaningApplicable Lawall Laws, including those of a jurisdiction in or outside of the United States, applicable to the Private orPublic Transactions.Actthe BVI Business Companies Act, 2004 (No 16 of 2004.) including any modification, extension, reenactment or renewal thereof and any regulations made thereunder.Articlesthese Articles of Association as originally framed or as from time to time amended.Automatic Conversioneach Preferred Share shall be automatically converted at any time after issue and without the payment ofany additional sum into an equal number of fully paid Ordinary Shares upon the conclusion of anytransfer by Mr. Xuesong Song to any third party through one or more Public Transactions.Designated Stock Exchangeeither the Nasdaq National Stock Market, Inc. or such other exchange or quotation bureau on which, theCompany’s Securities are listed or traded; provided that until the Securities are listed on any such“Exchange” the rules of any such Designated Stock Exchange shall be inapplicable to these Articles.directora director of the Company.distributionin relation to a distribution by a company to a member, means(i)the direct or indirect transfer of an asset, other than the Company’s own shares, to or forthe benefit of the member or(ii)the incurring of a debt to or for the benefit of a member,in relation to shares held by a member, and whether by means of a purchase of an asset, the purchase,redemption or other acquisition of shares, a transfer of indebtedness or otherwise, and includes adividend.Independent Directora person who meets the then current requirements for “independence” of the applicable rules andregulations of the U.S. Securities and Exchange Commission and the Designated Stock Exchange.5member or shareholderin relation to the Company, means a person whose name is entered in the register of members as theholder of one or more shares, or fractional shares, in the Company.Memorandumthe Memorandum of Association of the Company as originally framed or as from time to time amended.Mr. Xuesong Songthe founder, a director and Chairman of LK Technology Ltd.Ordinary Sharesissued or unissued ordinary shares of no par value of the Company having the rights, preferences andprivileges set out in the MemorandumPersonAn individual, a corporation, a trust, trustee, the estate of a deceased individual, a partnership or anunincorporated association of persons.Preferred Sharesissued or unissued preferred shares of no par value of the Company having the rights, preferences andprivileges set out in the MemorandumPrivate Transactionstransactions that are not considered as a Public Transaction.Public Transactionstransactions through any national securities exchanges and/or through the automated quotation systemincluding but not limited to NASDAQ, NYSE (including NYSE American) or OTC Markets, or anytransaction executed by the broker or with a market maker.Related Party(a) any director, officer and employee of the Company; (b) any family member of such director, officer andemployee; and (c) any entity (e.g. a corporation, partnership, or trust) controlled by or set up for thebenefit of a director, officer or employee, or a family member of such director, officer or employee.Relevant SystemA facility for the electronic transfer of uncertificated securities administered by The Depository TrustCompany or such other Person regulated by the SEC.resolution of directors(a)A resolution approved at a duly convened and constituted meeting of directors of the Companyor of a committee of directors of the Company by the affirmative vote of a simple majority of thedirectors present at the meeting who voted and did not abstain; or(b)a resolution consented to in writing by a simple majority of the directors or of all members of thecommittee, as the case may be;except that where a director is given more than one vote, he shall be counted by the number ofvotes he casts for the purpose of establishing a majority.resolution of membersSubject to the provisions of the Memorandum and Articles means:(a)A resolution approved at a duly convened and constituted meeting of the members of theCompany by the affirmative vote of(i)a majority of in excess of 50% of the votes of the shares entitled to vote and voting onthe resolution, or(ii)a majority of in excess of 50% of the votes of each class or series of shares entitled tovote as a class or series and voting on the resolution and a majority of in excess of 50%of the votes of the remaining shares entitled to vote and voting on the resolution; or6(b)a resolution consented to in writing by(i)an absolute majority of the votes of shares entitled to vote thereon, or(ii)an absolute majority of the votes of each class or series of shares entitled to votethereon as a class or series and of an absolute majority of the votes of the remainingshares entitled to vote thereon.SealAny Seal which has been duly adopted as the common seal of the Company.SECThe United States Securities and Exchange Commission.Securitiesshares and debt obligations of every kind, and options, warrants and rights to acquire shares, or debtobligations.SharesOrdinary Shares and/or Preferred Shares, as the case may be.solvency testa company satisfies the solvency test if;(i)the value of the company’s assets exceeds its liabilities, and(ii)the company is able to pay its debts as they fall due.treasury sharesshares in the Company that were previously issued but were repurchased, redeemed or otherwiseacquired by the Company and not cancelled.2.“Written” or any term of like import includes words typewritten, printed, painted, engraved, lithographed, photographed or represented or reproduced byany mode of reproducing words in a visible form, including telex, facsimile, telegram, cable or other form of writing produced by electronic communication.3.Save as aforesaid any words or expressions defined in the Act shall bear the same meaning in these Articles.4.Whenever the singular or plural number, or the masculine, feminine or neuter gender is used in these Articles, it shall equally, where the context admits,include the others.5.A reference in these Articles to voting in relation to shares shall be construed as a reference to voting by members holding the shares except that it is thevotes allocated to the shares that shall be counted and not the number of members who actually voted and a reference to shares being present at a meetingshall be given a corresponding construction.6.A reference to money in these Articles is, unless otherwise stated, a reference to the currency in which shares in the Company shall be issued according tothe provisions of the Memorandum.7REGISTERED SHARES7.Every member holding registered shares in the Company shall be entitled to a certificate signed by a director or officer of the Company or such otherperson who may be authorised from time to time by resolution of directors or under the Seal, with or without the signature of any director of the Company,specifying the share or shares held by him and the signature of the director or officer or person so authorised and the Seal may be facsimiles.8.Any member receiving a share certificate for registered shares shall indemnify and hold the Company and its directors and officers harmless from any lossor liability which it or they may incur by reason of any wrongful or fraudulent use or representation made by any person by virtue of the possessionthereof. If a share certificate for registered shares is worn out or lost it may be renewed on production of the worn out certificate or on satisfactory proof ofits loss together with such indemnity as may be required by a resolution of directors.9.If several persons are registered as joint holders of any shares, any one of such persons may give an effectual receipt for any distribution payable inrespect of such shares.10.Nothing in these Articles shall require title to any shares or other Securities to be evidenced by a certificate if the Act and the rules of the Designated StockExchange permit otherwise.SHARES AND ISSUED SHARES11.Subject to the provisions of these Articles and, if applicable, the rules of the Designated Stock Exchange, and any resolution of members, the directors ofthe Company may, without limiting or affecting any rights previously conferred on the holders of any existing shares or class or series of shares, offer, allot,grant options over or otherwise dispose of shares to such persons, at such times and upon such terms and conditions as the Company may by resolutionof directors determine. The directors shall not issue more shares than the maximum number provided for in the Memorandum.12.The Company may issue fully paid, partly paid or nil paid shares as well as bonus shares. A partly paid or nil paid share or a share issued for a promissorynote or other written obligation for payment of a debt may be issued subject to forfeiture in the manner prescribed in these Articles.13.Shares in the Company may be issued for consideration in any form, including money, a promissory note or other obligation to contribute money orproperty, real property, personal property (including goodwill and knowhow) services rendered or a contract for future services and the amount of suchconsideration shall be determined by resolution of directors, except that in the case of shares with par value, the amount shall not be less than the parvalue, and in the absence of fraud the decision of the directors as to the value of the consideration received by the Company in respect of the issue isconclusive unless a question of law is involved.14.Before issuing shares for a consideration other than money, the directors shall pass a resolution stating;(a)the amount to be credited for the issue of the shares;(b)their determination of the reasonable present cash value of the nonmoney consideration for the issue; and(c)that, in their opinion, the present cash value of the nonmoney consideration for the issue is not less than the amount to be credited for the issueof the shares.15.A share issued by the Company upon conversion of, or in exchange for, another share or a debt obligation or other security in the Company, shall betreated for all purposes as having been issued for money equal to the consideration received or deemed to have been received by the Company in respectof the other share, debt obligation or security.16.Treasury shares may be disposed of by the Company on such terms and conditions (not otherwise inconsistent with these Articles) as the Company mayby resolution of directors determine.17.Subject to these Articles, the Company may purchase, redeem or otherwise acquire and hold its own shares save that the Company may not purchase,redeem or otherwise acquire its own shares without the consent of the member whose shares are to be purchased, redeemed or otherwise acquired unlessthe Company is permitted by the Act or any other provision in the Memorandum or Articles to purchase, redeem or otherwise acquire the shares withouttheir consent.818.No purchase, redemption or other acquisition of shares shall be made unless the directors determine by resolution of the directors that immediately after thepurchase, redemption or other acquisition the value of the Company’s assets will exceed its liabilities and the Company will be able to pay its debts as theyfall due.19.Sections 60 (Process for acquisition of own shares), 61 (Offer to one or more shareholders) and 62 (Shares redeemed otherwise than at the option ofcompany) of the Act shall not apply to the Company.20.A determination by the directors under Article 18 is not required;(a)the Company redeems a share or shares pursuant to a right of a member to have his shares redeemed or to have his shares exchanged for moneyor other property of the Company; or(b)by virtue of the provisions of Section 179 of the Act.21.Shares that the Company purchases, redeems or otherwise acquires pursuant to Article 17 may be cancelled or held as treasury shares except to the extentthat such shares are in excess of 80 percent of the issued shares of the Company in which case they shall be cancelled but they shall be available forreissue.22.Shares in the Company shall only be held as treasury shares where the directors of the Company resolve as such and the number of shares acquired, whenaggregated with shares of the same class already held by the Company as treasury shares, does not exceed 50% of the shares of that class previouslyissued by the Company, excluding shares that have been cancelled. All rights and obligations attaching to a treasury share are suspended and shall not beexercised by or against the Company while it holds the share as a treasury share. Treasury shares may be reissued by the Company as new shares.23.The Company shall keep a register of members containing;(a)the names and addresses of the persons who hold registered shares in the Company;(b)the number of each class and series of registered shares held by each member;(c)the date on which the name of each member was entered in the register of members;(d)the date on which any person ceased to be a member; and(e)such other information as may be prescribed pursuant to the Act.24.The register of members may be in any such form as the directors may approve but if it is in magnetic, electronic or other data storage form, the companymust be able to produce legible evidence of its contents.25.The original or a copy of the register of members shall be kept at the registered office of the Company or at the office of the registered agent of theCompany.26.A share is deemed to be issued when the name of the member is entered in the register of members.27.Subject to the Act and the rules of the Designated Stock Exchange, the board of directors without further consultation with the holders of any shares orSecurities may resolve that any class or series of shares or other Securities from time to time in issue or to be issued (including shares in issue at the date ofthe adoption of these Articles) may be issued, held, registered and converted to uncertificated form.28.Conversion of shares held in certificated form into shares held in uncertificated form, and vice versa, may be made in such manner as the board of directors,in its absolute discretion, may think fit. The Company or any duly authorised transfer agent (a “Transfer Agent”) shall enter on the register of membershow many shares are held by each member in uncertificated form and in certificated form and shall maintain the register of members. Notwithstanding anyprovision of these Articles, a class or series of shares shall not be treated as two classes by virtue only of that class or series comprising both certificatedshares and uncertificated Shares or as a result of any provision of these Articles which apply only in respect of certificated or uncertificated shares.9MORTGAGES AND CHARGES OF REGISTERED SHARES29.Members may mortgage or charge their registered shares in the Company with such mortgage or charge being evidenced in writing and signed by, or withthe authority of the registered holder of a registered share to which the mortgage or charge relates. The Company shall give effect to the terms of any validmortgage or charge except insofar as it may conflict with any requirements herein contained for consent to the transfer of shares.30.In the case of the mortgage or charge of registered shares there may be entered in the share register of the Company at the request of the registered holderof such shares(a)a statement that the shares are mortgaged or charged;(b)the name of the mortgagee or chargee; and(c)the date on which the aforesaid particulars are entered in the share register.31.Where particulars of a mortgage or charge are entered in the register of members, such particulars shall be cancelled(a)with the written consent of the named mortgagee or chargee or anyone authorized to act on his behalf; or(b)upon evidence satisfactory to the directors of the discharge of the liability secured by the mortgage or charge and the issue of such indemnities asthe directors shall consider necessary or desirable.32.Whilst particulars of a mortgage or charge over registered shares are entered in the register of members pursuant to the preceding articles no transfer ofany share comprised therein shall be effected without the written consent of the named mortgagee or chargee or anyone authorized to act on his behalf.FORFEITURE33.When shares not fully paid on issue or issued for a promissory note or other written obligation for payment of a debt have been issued subject toforfeiture, the following provisions shall apply.34.Written notice specifying a date for payment to be made and the shares in respect of which payment is to be made shall be served on the member whodefaults in making payment pursuant to a promissory note or other written obligations to pay a debt.35.The written notice specifying a date for payment shall(a)name a further date not earlier than the expiration of 14 days from the date of service of the notice on or before which payment required by thenotice is to be made; and(b)contain a statement that in the event of nonpayment at or before the time named in the notice the shares, or any of them, in respect of whichpayment is not made will be liable to be forfeited.36.Where a written notice has been issued and the requirements of the notice have not been complied with within the prescribed time, the directors may at anytime before tender of payment forfeit and cancel the shares to which the notice relates.37.The Company is under no obligation to refund any moneys to the member whose shares have been forfeited and cancelled pursuant to these provisions.Upon forfeiture and cancellation of the shares the member is discharged from any further obligation to the Company with respect to the shares forfeitedand cancelled.10LIEN38.The Company shall have a first and paramount lien on every share issued for a promissory note or for any other binding obligation to contribute money orproperty or any combination thereof to the Company, and the Company shall also have a first and paramount lien on every share standing registered in thename of a member, whether singly or jointly with any other person or persons, for all the debts and liabilities of such member or his estate to the Company,whether the same shall have been incurred before or after notice to the Company of any interest of any person other than such member, and whether thetime for the payment or discharge of the same shall have actually arrived or not, and notwithstanding that the same are joint debts or liabilities of suchmember or his estate and any other person, whether a member of the Company or not. The Company’s lien on a share shall extend to all distributionspayable thereon. The directors may at any time either generally, or in any particular case, waive any lien that has arisen or declare any share to be wholly orin part exempt from the provisions of this Article.39.In the absence of express provisions regarding sale in the promissory note or other binding obligation to contribute money or property, the Company maysell, in such manner as the directors may by resolution of directors determine, any share on which the Company has a lien, but no sale shall be made unlesssome sum in respect of which the lien exists is presently payable nor until the expiration of twentyone days after a notice in writing, stating and demandingpayment of the sum presently payable and giving notice of the intention to sell in default of such payment, has been served on the holder for the timebeing of the share.40.The net proceeds of the sale by the Company of any shares on which it has a lien shall be applied in or towards payment of discharge of the promissorynote or other binding obligation to contribute money or property or any combination thereof in respect of which the lien exists so far as the same ispresently payable and any residue shall (subject to a like lien for debts or liabilities not presently payable as existed upon the share prior to the sale) bepaid to the holder of the share immediately before such sale. For giving effect to any such sale the directors may authorize some person to transfer theshare sold to the purchaser thereof. The purchaser shall be registered as the holder of the share and he shall not be bound to see to the application of thepurchase money, nor shall his title to the share be affected by any irregularity or invalidity in the proceedings in reference to the sale.TRANSFER OF SHARES41.Registered shares in the Company are transferred by a written instrument of transfer signed by the transferor and containing the name and address of thetransferee. The instrument of transfer shall be signed by the transferee if registration as a holder of the share shall impose a liability to the Company on thetransferee. The instrument of transfer of a registered share shall be sent to the Company for registration.42.The board of directors may resolve that interests in shares in the form of depositary receipts may be transferred or otherwise dealt with in accordance withthe regulations and practices instituted by the operator of the Relevant System and any holder of interests in shares shall be entitled to transfer suchinterests by means of such Relevant System and the operator of the Relevant System shall act as agent of the holders of such interests for the purposes ofthe transfer of those interests.43.The register of members may be closed at such times and for such periods as the board of directors may from time to time determine, upon notice beinggiven by advertisement in such newspapers as may be required by the Act and the practice of the Designated Stock Exchange.44.The transfer of a registered share is effective when the name of the transferee is entered on the register of members.45.If the directors of the Company are satisfied that an instrument of transfer relating to shares has been signed but that the instrument has been lost ordestroyed, they may resolve;(a)to accept such evidence of the transfer of the shares as they consider appropriate; and(b)that the transferee’s name should be entered in the register of members notwithstanding the absence of the instrument of transfer.46.The Company must on the receipt of an instrument of transfer from the transferor or transferee of a registered share in the Company enter the name of thetransferee of the share in the register or members unless the directors, if permitted by the Memorandum or these Articles, resolve by resolution of directorsto refuse or delay the registration of the transfer for reasons that shall be specified in the resolution of directors.11TRANSMISSION OF SHARES47.The personal representative of a deceased member may transfer a share even though the personal representative is not a member at the time of the transfer.48.The personal representative, executor or administrator of a deceased member, the guardian of an incompetent member or the trustee of a bankrupt membershall be the only person recognized by the Company as having any title to his share but they shall not be entitled to exercise any rights as a member of theCompany until they have proceeded as set forth in the next following three Articles.49.The production to the Company of any document which is evidence of probate of the will, or letters of administration of the estate, or confirmation asexecutor, of a deceased member or of the appointment of a guardian of an incompetent member or the trustee of a bankrupt member shall be accepted by theCompany even if the deceased, incompetent or bankrupt member is domiciled outside the British Virgin Islands if the document evidencing the grant ofprobate or letters of administration, confirmation as executor, appointment as guardian or trustee in bankruptcy is issued by a foreign court which hadcompetent jurisdiction in the matter. For the purpose of establishing whether or not a foreign court had competent jurisdiction in such a matter the directorsmay obtain appropriate legal advice. The directors may also require an indemnity to be given by the executor, administrator, guardian or trustee inbankruptcy.50.The Company may enter in the register of members the name of any person becoming entitled by operation of law or otherwise to a share or shares inconsequence of the death, incompetence or bankruptcy upon such evidence being produced as may reasonably be required by the directors.51.Any person who has become entitled to a share or shares in consequence of the death, incompetence or bankruptcy of any member may, instead of beingregistered himself, request in writing that some person to be named by him be registered as the transferee of such share or shares and such request shalllikewise be treated as if it were a transfer.52.What amounts to incompetence on the part of a person is a matter to be determined by the court having regard to all the relevant evidence and thecircumstances of the case.REDUCTION OR INCREASE IN AUTHORISED AND UNISSUED SHARES48.The Company may amend the Memorandum to increase or reduce the maximum number of shares the Company is authorised to issue and may in respect ofany unissued shares increase or reduce the number of such shares, or effect any combination of the foregoing.49.The Company may(1)(a) divide its shares, including issued shares, into a larger number of shares; or (b) combine its shares, including issued shares, into a smallernumber of shares.(2)A division or combination of shares, including issued shares, of a class or series shall be for a larger or smaller number, as the case may be, ofshares in the same class or series.(3)A company shall not divide its shares under subsection (1)(a) or (2) if it would cause the maximum number of shares that the Company isauthorised to issue by its memorandum to be exceeded.(4)Where shares are divided or combined under this article, the aggregate par value of the new shares must be equal to the aggregate par value of theoriginal shares.MEETINGS AND CONSENTS OF MEMBERS50.The directors of the Company may convene meetings of the members of the Company at such times and in such manner and places within or outside theBritish Virgin Islands as the directors consider necessary or desirable. The Company may hold an annual general meeting, but shall not (unless required bythe applicable rules of the Designated Stock Exchange for so long as the Company’s Securities are listed or traded on the Designated Stock Exchange) beobliged to hold an annual general meeting.51.Upon the written request of members holding 30 percent or more of the outstanding voting shares in the Company the directors shall convene a meeting ofmembers.1252.The directors shall give not less than 7 days notice of meetings of members to those persons whose names on the date the notice is given appear asmembers in the share register of the Company and are entitled to vote at the meeting.53.The directors may fix the date notice is given of a meeting of members as the record date for determining those shares that are entitled to vote at themeeting.54.A meeting of members may be called on short notice:(a)if members holding not less than 90 percent of the total number of shares entitled to vote on all matters to be considered at the meeting, or 90percent of the votes of each class or series of shares where members are entitled to vote thereon as a class or series together with not less than a90 percent majority of the remaining votes, have agreed to short notice of the meeting, or(b)if all members holding shares entitled to vote on all or any matters to be considered at the meeting have waived notice of the meeting and for thispurpose presence at the meeting shall be deemed to constitute waiver.55.The inadvertent failure of the directors to give notice of a meeting to a member, or the fact that a member has not received notice, does not invalidate themeeting.56.A member may be represented at a meeting of members by a proxy who may speak and vote on behalf of the member.57.The instrument appointing a proxy shall be produced at the place appointed for the meeting before the time for holding the meeting at which the personnamed in such instrument proposes to vote.58.An instrument appointing a proxy shall be in substantially the following form or such other form as the Chairman of the meeting shall accept as properlyevidencing the wishes of the member appointing the proxy.(Name of Company)I/Webeing a member of the aboveCompany withshares HEREBY APPOINTofor failing himofto be my/our proxy to vote for me/us at the meeting of members to be held on the dayofand at any adjournment thereof.(Any restrictions on voting to be inserted here.)Signed this day ofMember59.The following shall apply in respect of joint ownership of shares:a.if two or more persons hold shares jointly each of them may be present in person or by proxy at a meeting of members and may speak as a member;b.if only one of the joint owners is present in person or by proxy he may vote on behalf of all joint owners, andc.if two or more of the joint owners are present in person or by proxy they must vote as one.60.A member shall be deemed to be present at a meeting of members if he participates by telephone or other electronic means and all members participating inthe meeting are able to hear each other.61.A meeting of members is duly constituted if, at the commencement of the meeting, there are present in person or by proxy not less than 50 percent of thevotes of the shares or class or series of shares entitled to vote on resolutions of members to be considered at the meeting. If a quorum be present,notwithstanding the fact that such quorum may be represented by only one person then such person may resolve any matter and a certificate signed bysuch person accompanied where such person be a proxy by a copy of the proxy form shall constitute a valid resolution of members.1362.If within two hours from the time appointed for the meeting a quorum is not present, the meeting, if convened upon the requisition of members, shall bedissolved; in any other case it shall stand adjourned to the next business day at the same time and place or to such other time and place as the directorsmay determine, and if at the adjourned meeting there are present within one hour from the time appointed for the meeting in person or by proxy not lessthan one third of the votes of the shares or each class or series of shares entitled to vote on the resolutions to be considered by the meeting, those presentshall constitute a quorum but otherwise the meeting shall be dissolved.63.At every meeting of members, the Chairman of the Board of Directors shall preside as chairman of the meeting. If there is no Chairman of the Board ofDirectors or if the Chairman of the Board of Directors is not present at the meeting, the members present shall choose some one of their number to be thechairman. If the members are unable to choose a chairman for any reason, then the person representing the greatest number of voting shares present inperson or by prescribed form of proxy at the meeting shall preside as chairman failing which the oldest individual member or representative of a memberpresent shall take the chair.64.The chairman may, with the consent of the meeting, adjourn any meeting from time to time, and from place to place, but no business shall be transacted atany adjourned meeting other than the business left unfinished at the meeting from which the adjournment took place.65.At any meeting of the members the chairman shall be responsible for deciding in such manner as he shall consider appropriate whether any resolution hasbeen carried or not and the result of his decision shall be announced to the meeting and recorded in the minutes thereof. If the chairman shall have anydoubt as to the outcome of any resolution put to the vote, he shall cause a poll to be taken of all votes cast upon such resolution, but if the chairman shallfail to take a poll then any member present in person or by proxy who disputes the announcement by the chairman of the result of any vote mayimmediately following such announcement demand that a poll be taken and the chairman shall thereupon cause a poll to be taken. If a poll is taken at anymeeting, the result thereof shall be duly recorded in the minutes of that meeting by the chairman.66.Any person other than an individual shall be regarded as one member and subject to the specific provisions hereinafter contained for the appointment ofrepresentatives of such persons the right of any individual to speak for or represent such member shall be determined by the law of the jurisdiction where,and by the documents by which, the person is constituted or derives its existence. In case of doubt, the directors may in good faith seek legal advice fromany qualified person and unless and until a court of competent jurisdiction shall otherwise rule, the directors may rely and act upon such advice withoutincurring any liability to any member.67.Any person other than an individual which is a member of the Company may by resolution of its directors or other governing body authorize such personas it thinks fit to act as its representative at any meeting of the Company or of any class of members of the Company, and the person so authorized shall beentitled to exercise the same powers on behalf of the person which he represents as that person could exercise if it were an individual member of theCompany.68.The chairman of any meeting at which a vote is cast by proxy or on behalf of any person other than an individual may call for a notarially certified copy ofsuch proxy or authority which shall be produced within 7 days of being so requested or the votes cast by such proxy or on behalf of such person shall bedisregarded.69.Directors of the Company may attend and speak at any meeting of members of the Company and at any separate meeting of the holders of any class orseries of shares in the Company.70.An action that may be taken by the members at a meeting may also be taken by a resolution of members consented to in writing or by telex, telegram, cable,facsimile or other written electronic communication, without the need for any notice, but if any resolution of members is adopted otherwise than by theunanimous written consent of all members, a copy of such resolution shall forthwith be sent to all members not consenting to such resolution. The consentmay be in the form of counterparts, each counterpart being signed by one or more members.14DIRECTORS71.The first directors of the Company shall be appointed by the first registered agent of the Company and thereafter the directors shall be appointed byresolution of members, subject to Article 78, for such term as the members determine. A person shall not be appointed as a director unless he hasconsented in writing to be a director.72.The minimum number of directors shall be one and the maximum number shall be 20. Unless otherwise determined by the Company in a meeting ofshareholders and subject to the requirements of the Memorandum, the directors may by a Resolution of Directors, amend this Regulation 72 to change thenumber of directors. For as long as Securities of the Company are listed or traded on the Designated Stock Exchange, the directors shall include suchnumber of Independent Directors as applicable law, rules or regulations of the Designated Stock Exchange may require for a foreign private issuer as longas the Company is a foreign private issuer.73.Each director shall hold office for the term, if any, fixed by resolution of members or until his earlier death, resignation or removal.74.Where the Company has only one member who is an individual and that member is also the sole director of the Company, that sole member/director may, byinstrument in writing, nominate a person who is not disqualified from being a director of the Company under section 111(1) of the Act as a reserve directorof the Company to act in the place of the sole director in the event of his death.75.The nomination of a person as a reserve director of the Company ceases to have effect if;a.before the death of the sole member/director who nominated him;(i)he resigns as reserve director, or(ii)the sole member/director revokes the nomination in writing; orb.the sole member/director who nominated him ceases to be the sole member/director of the Company for any reason other than his death.76.A director may be removed from office, with or without cause, by a resolution of directors or a resolution of members. For the purposes of this Regulation76, “cause” means the willful and continuous failure by a director to substantially perform his duties to the Company (other than any such failure resultingfrom incapacity due to physical or mental illness) or the willful engaging by the director in gross misconduct materially and demonstrably injurious to theCompany. If a director is removed from office without cause by a resolution of the members, for the purposes of this Regulation, the resolution of memberswill require the affirmative vote of the holders of 66 2/3 percent or more of the outstanding votes of the shares entitled to vote thereon.77.A director may resign his office by giving written notice of his resignation to the Company and the resignation shall have effect from the date the notice isreceived by the Company or from such later date as may be specified in the notice. A director of the Company shall resign forthwith if he is, or becomes,disqualified to act as a director under the Act.78.The directors may at any time by resolution of directors appoint any person to be a director to fill a vacancy. There is a vacancy if a director dies orotherwise ceases to hold office as a director prior to the expiration of his term of office, where his term of office was fixed upon his appointment. Thedirectors may not appoint a director to fill a vacancy for a term exceeding the term that remained when the person who has ceased to be a director left orotherwise ceased to hold office.79.The Company shall keep a register of directors containing:a.the names and addresses of the persons who are directors of the Company or who have been nominated as reserve directors of the Company;b.the date on which each person whose name is entered in the register was appointed as a director of the Company or nominated as a reservedirector of the Company;c.the date on which each person named as a director ceased to be a director of the Company;d.the date on which the nomination of any person nominated as a reserve director ceased to have effect; ande.such other information as may be prescribed pursuant to the Act.1580.The original or a copy of any register of directors shall be kept at the office of the registered agent of the Company.81.The register of directors may be in any such form as the directors may approve but if it is in magnetic, electronic or other data storage form, the companymust be able to produce legible evidence of its contents.82.With the prior or subsequent approval by a resolution of members, the directors may, by a resolution of directors, fix the emoluments of directors withrespect to services to be rendered in any capacity to the Company.83.A director shall not require a share qualification and may be an individual or a company.POWERS OF DIRECTORS84.The business and affairs of the Company shall be managed by the directors who may pay all expenses incurred preliminary to and in connection with theformation and registration of the Company and may exercise all such powers of the Company as are not by the Act or by the Memorandum or theseArticles required to be exercised by the members of the Company, subject to any delegation of such powers as may be authorized by these Articles and tosuch requirements as may be prescribed by a resolution of members; but no requirement made by a resolution of members shall prevail if it be inconsistentwith these Articles nor shall such requirement invalidate any prior act of the directors which would have been valid if such requirement had not been made.Notwithstanding anything in Section 175 of the Act the directors shall have the power to sell, transfer, lease, exchange or otherwise dispose of more thanfifty percent of the assets of the Company without submitting a proposal to or obtaining the consent of the members of the Company.85.If the Company is a whollyowned subsidiary of a holding company a director may when exercising powers or performing duties as a director act in amanner which he believes is in the best interests of the holding company even though it may not be in the best interests of the Company.86.The directors may, by a resolution of directors, appoint any person, including a person who is a director, to be an officer or agent of the Company. Theresolution of directors appointing an agent may authorize the agent to appoint one or more substitutes or delegates to exercise some or all of the powersconferred on the agent by the Company.87.Every officer or agent of the Company has such powers and authority of the directors, including the power and authority to affix the Seal, as are set forth inthese Articles or in the resolution of directors appointing the officer or agent, except that no agent has any power or authority with respect to thefollowing;a.to amend the memorandum or articles;b.to change the registered office or agent;c.to designate committees of directors;d.to delegate powers to a committee of directors;e.to appoint or remove directors;f.to appoint or remove an agent;g.to fix emoluments of directors;h.to approve a plan of merger, consolidation or arrangement;i.to make a declaration of solvency for the purposes of section 198(1)(a) of the Act or to approve a liquidation plan;j.to make a determination under section 57(1) of the Act that the company will, immediately after a proposed distribution, satisfy the solvency test;ork.to authorise the Company to continue as a company incorporated under the laws of a jurisdiction outside the British Virgin Islands.1688.Any director which is a body corporate may appoint any person its duly authorized representative for the purpose of representing it at meetings of theBoard of Directors or with respect to unanimous written consents.89.The continuing directors may act notwithstanding any vacancy in their body, save that if their number is reduced to their knowledge below the numberfixed by or pursuant to these Articles as the necessary quorum for a meeting of directors, the continuing directors or director may act only for the purposeof appointing directors to fill any vacancy that has arisen or for summoning a meeting of members.90.The directors may by resolution of directors exercise all the powers of the Company to borrow money and to mortgage or charge its undertakings andproperty or any part thereof, to issue debentures, debenture stock and other securities whenever money is borrowed or as security for any debt, liability orobligation of the Company or of any third party.91.All cheques, promissory notes, drafts, bills of exchange and other negotiable instruments and all receipts for moneys paid to the Company, shall be signed,drawn, accepted, endorsed or otherwise executed, as the case may be, in such manner as shall from time to time be determined by resolution of directors.92.The Company shall keep a register of all relevant charges created by the Company showing:a.if the charge is a charge created by the Company, the date of its creation or if the charge is existing on property acquired by the Company, the dateon which the property was acquired;b.a short description of the liability secured by the charge;c.a short description of the property charged;d.the name and address of the trustee for the security, or if there is no such trustee the name and address of the chargee;e.unless the charge is a security to bearer, the name and address of the holder of the charge;f.details of any prohibition or restriction , if any, contained in the instrument creating the charge on the power of the company to create any futurecharge ranking in priority to or equally with the charge; andg.such other information as may be prescribed pursuant to the Act.93.The original or a copy of the register of charges shall be kept at the registered office of the Company or at the office of the registered agent of the Company.PROCEEDINGS OF DIRECTORS94.The directors of the Company or any committee thereof may meet at such times and in such manner and places within or outside the British Virgin Islandsas the directors may determine to be necessary or desirable. Any one or more directors may convene a meeting of directors.95.A director shall be deemed to be present at a meeting of directors if he participates by telephone or other electronic means and all directors participating inthe meeting are able to hear each other.96.A director shall be given not less than 3 days notice of meetings of directors, but a meeting of directors held without 3 days notice having been given to alldirectors shall be valid if all the directors entitled to vote at the meeting who do not attend, waive notice of the meeting and for this purpose, the presenceof a director at a meeting shall constitute waiver on his part. The inadvertent failure to give notice of a meeting to a director, or the fact that a director hasnot received the notice, does not invalidate the meeting.1797.A director may by a written instrument appoint an alternate who need not be a director and an alternate is entitled to attend meetings in the absence of thedirector who appointed him and to vote or consent in place of the director.98.A meeting of directors is duly constituted for all purposes if at the commencement of the meeting there are present in person or by alternate not less thanone half of the total number of directors, unless there are only 2 directors in which case the quorum shall be 2.99.If the Company shall have only one director the provisions herein contained for meetings of the directors shall not apply but such sole director shall havefull power to represent and act for the Company in all matters as are not by the Act or the Memorandum or these Articles required to be exercised by themembers of the Company and in lieu of minutes of a meeting shall record in writing and sign a note or memorandum of all matters requiring a resolution ofdirectors. Such a note or memorandum shall constitute sufficient evidence of such resolution for all purposes.100.At every meeting of the directors the Chairman of the Board of Directors shall preside as chairman of the meeting. If there is no Chairman of the Board ofDirectors or if the Chairman of the Board of Directors is not present at the meeting the Vice Chairman of the Board of Directors shall preside. If there is noVice Chairman of the Board of Directors or if the Vice Chairman of the Board of Directors is not present at the meeting the directors present shall choosesome one of their number to be chairman of the meeting.101.An action that may be taken by the directors or a committee of directors at a meeting may also be taken by a resolution of directors or a committee ofdirectors consented to in writing or by telex, telegram, cable, facsimile or other written electronic communication by all directors or all members of thecommittee as the case may be, without the need for any notice. The consent may be in the form of counterparts, each counterpart being signed by one ormore directors.102.The directors shall cause the following records to be kept:a.minutes of all meetings of directors, members, committees of directors and committees of members; andb.copies of all resolutions consented to by directors, members, committees of directors and committees of members.103.The resolutions, records and minutes referred to in the preceding Article shall be kept at the registered office of the Company, its principal place ofbusiness or at such other place as the directors determine.104.The directors may, by resolution of directors, designate one or more committees, each consisting of one or more directors.105.Subject to the following Article, each committee of directors has such powers and authorities of the directors, including the power and authority to affix theSeal, as are set forth in the resolution of directors establishing the committee.106.The directors have no power to delegate the following powers to a committee of directors;a.to amend the memorandum or articles;b.to change the registered office or agent;c.to designate committees of directors;d.to delegate powers to a committee of directors;e.to appoint or remove directors;f.to appoint or remove an agent;g.to fix emoluments of directors;18h.to approve a plan of merger, consolidation or arrangement;i.to make a declaration of solvency for the purposes of section 198(1)(a) or to approve a liquidation plan;j.to make a determination under section 57(1) that the company will, immediately after a proposed distribution, satisfy the solvency test; ork.to authorise the company to continue as a company incorporated under the laws of a jurisdiction outside the British Virgin Islands.Paragraphs (c) and (d) do not prevent a committee of directors, where authorised by the directors, from appointing a subcommittee and delegating powersexercisable by the committee to the subcommittee.107.The meetings and proceedings of each committee of directors consisting of 2 or more directors shall be governed mutatis mutandis by the provisions ofthese Articles regulating the proceedings of directors so far as the same are not superseded by any provisions in the resolution establishing the committee.108.Without prejudice to the freedom of the directors to establish any other committee, if the shares (or depositary receipts therefore) are listed or quoted onthe Designated Stock Exchange, and if required by the Designated Stock Exchange, the directors shall establish and maintain an audit committee as acommittee of the board of directors, the composition and responsibilities of which shall comply with the rules and regulations of the SEC and theDesignated Stock Exchange. The audit committee shall meet at least once every financial quarter, or more frequently as circumstances dictate.109.The Company shall adopt a formal written audit committee charter and review and assess the adequacy of the formal written charter on an annual basis.The charter shall specify the responsibilities of the Audit Committee which shall include responsibility for, among other things, ensuring its receipt from theoutside auditors of the Company of a formal written statement delineating all relationships between the auditor and the Company, and the AuditCommittee’s responsibility for actively engaging in a dialogue with the auditor with respect to any disclosed relationships or services that may impact theobjectivity and independence of the auditor take appropriate action to oversee the independence of the outside auditor. In addition, the Audit Committee isresponsible for reviewing potential conflict of interest situations and approving all Related Party Transactions.110.Without prejudice to the freedom of the directors to establish any other committees, the Board may establish a Stock Option Committee to administer theCompany’s stock option plans, including authority to make and modify awards under such plans. For so long as the Securities of the Company are listed ortraded on the Designated Stock Exchange, the Stock Option Committee shall have at least two Independent Directors. The Stock Option Committee willadminister the Company’s stock option plans, including the authority to make and modify awards under such plans.111.Without prejudice to the freedom of the directors to establish any other committees, the Board may establish a Nominating Committee to assist the Board inidentifying qualified individuals to become members of the Board.OFFICERS112.The Company may by resolution of directors appoint officers of the Company at such times as shall be considered necessary or expedient. Such officersmay consist of a Chairman of the Board of Directors, a Vice Chairman of the Board of Directors, a President and one or more Vice Presidents, Secretaries andTreasurers and such other officers as may from time to time be deemed desirable. Any number of offices may be held by the same person.113.The officers shall perform such duties as shall be prescribed at the time of their appointment subject to any modification in such duties as may beprescribed thereafter by resolution of directors or resolution of members, but in the absence of any specific allocation of duties it shall be the responsibilityof the Chairman of the Board of Directors to preside at meetings of directors and members, the Vice Chairman to act in the absence of the Chairman, thePresident to manage the day to day affairs of the Company, the Vice Presidents to act in order of seniority in the absence of the President but otherwise toperform such duties as may be delegated to them by the President, the Secretaries to maintain the share register, minute books and records (other thanfinancial records) of the Company and to ensure compliance with all procedural requirements imposed on the Company by applicable law, and the Treasurerto be responsible for the financial affairs of the Company.19114.Subject to the rules of the Designated Stock Exchange, the emoluments of all officers shall be fixed by resolution of directors.115.The officers of the Company shall hold office until their successors are duly elected and qualified, but any officer elected or appointed by the directors maybe removed at any time, with or without cause, by resolution of directors. Any vacancy occurring in any office of the Company may be filled by resolutionof directors.CONFLICT OF INTERESTS116.A director of the Company shall, forthwith after becoming aware of the fact that he is interested in a transaction entered into or to be entered into by theCompany, disclose the interest to all other directors of the Company.117.A director of the Company is not required to comply with Article 112 if;a.the transaction or proposed transaction is between the director and the Company; andb.the transaction or proposed transaction is or is to be entered into in the ordinary course of the company’s business and on usual terms andconditions.118.For the purposes of Article 112 a disclosure to all other directors to the effect that a director is a member, director or officer of another named entity or has afiduciary relationship with respect to the entity or a named individual and is to be regarded as interested in any transaction which may, after the date of theentry or disclosure, be entered into with that entity or individual, is a sufficient disclosure of interest in relation to that transaction.119.A.A director of the Company who is interested in a transaction entered into or to be entered into by the Company may:(i)vote on a matter relating to the transaction;(ii)attend a meeting of directors at which a matter relating to the transaction arises and be included among the directors present at the meeting for thepurposes of a quorum; and(iii)sign a document on behalf of the Company, or do any other thing in his capacity as a director, that relates to the transaction,and, subject to compliance with the Act shall not, by reason of his office be accountable to the Company for any benefit which he derives from suchtransaction and no such transaction shall be liable to be avoided on the grounds of any such interest or benefit.119.B.For so long the Securities of the Company are listed or traded on the Designated Stock Exchange, the Company shall conduct an appropriate review of allmaterial Related Party Transactions on an ongoing basis and shall utilize the Audit Committee for the review and approval of potential conflicts of interestsituations.INDEMNIFICATION120.Subject to the limitations hereinafter provided the Company may indemnify against all expenses, including legal fees, and against all judgments, fines andamounts paid in settlement and reasonably incurred in connection with legal, administrative or investigative proceedings any person who;a.is or was a party or is threatened to be made a party to any threatened, pending or completed proceedings, whether civil, criminal, administrative orinvestigative, by reason of the fact that the person is or was a director, an officer or a liquidator of the Company; orb.is or was, at the request of the Company, serving as a director of, or in any other capacity is or was acting for, another body corporate or apartnership, joint venture, trust or other enterprise.20121.The Company may only indemnify a person if the person acted honestly and in good faith in what he believed to be in the best interests of the Companyand, in the case of criminal proceedings, the person had no reasonable cause to believe that his conduct was unlawful.122.For the purposes of the preceding Article, a director acts in the best interests of the Company if he acts in the best interests of;a.the Company’s holding company; orb.a shareholder or shareholders of the Company; in either case, in the circumstances specified in Article 85.123.The decision of the directors as to whether the person acted honestly and in good faith and with a view to the best interests of the Company and as towhether the person had no reasonable cause to believe that his conduct was unlawful is, in the absence of fraud, sufficient for the purposes of theseArticles, unless a question of law is involved.124.The termination of any proceedings by any judgment, order, settlement, conviction or the entering of a nolle prosequi does not, by itself, create apresumption that the person did not act honestly and in good faith and with a view to the best interests of the Company or that the person had reasonablecause to believe that his conduct was unlawful.Consolidated Statements of Changes in Stockholder’s EquityF5Consolidated Statements of Cash FlowsF6Notes to Consolidated Financial StatementsF7 F22F1REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRMTo the Shareholder and the Sole Director ofLK Technology Ltd.Opinion on the Consolidated Financial StatementsWe have audited the accompanying consolidated balance sheets of LK Technology Ltd. and. subsidiaries (the “Company”) as of December 31, 2017 and 2016, andthe related consolidated statements of operations and comprehensive loss, changes in shareholder’s equity and cash flows for each of the years then ended, andthe related notes (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in allmaterial respects, the consolidated financial position of the Company as of December 31, 2017 and 2016, and the consolidated results of its operations and its cashflows for each of the years then ended, in conformity with accounting principles generally accepted in the United States of America.Basis for OpinionThese consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’sconsolidated financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (UnitedStates) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules andregulations of the Securities and Exchange Commission and the PCAOB.We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonableassurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have,nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internalcontrol over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting.Accordingly, we express no such opinion.An independent member firm of Moore Stephens International Limited – members in principal cities throughout the worldOur audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, andperforming procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in theconsolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well asevaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion.Certified Public AccountantsWe have served as the Company’s auditor since 2018.Hong KongMay 25, 2018F2LK TECHNOLOGY LTD. AND SUBSIDIARIESCONSOLIDATED BALANCE SHEETS(IN U.S. DOLLARS)As of December 31,20172016AssetsCurrent assets:Cash and cash equivalents$72,379$83,843Accounts receivable, net of allowance for doubtful accounts9,729,6251,865,836Other receivables and prepayment2,376,7452,287,934Amounts due from related parties11,760,692Total current assets23,939,4414,237,613Property and equipment, net5,044,8727,771,027Intangible assets, net1,154,1971,682,445Goodwill7,239,9367,239,936Amount due from a related party204,412183,811TOTAL ASSETS37,582,85821,114,832LiabilitiesCurrent liabilities:Accounts payable8,784,5186,446,584Accrued liabilities and other payables12,962,91211,329,613Amounts due to related parties3,563,68316,129,323Total current liabilities25,311,11333,905,520Total liabilities25,311,11333,905,520Commitments and contingenciesShareholder’s Equity (Deficit)Share capitalCommon stock, $1 par value per share; 50,000 shares authorized as of December 31, 2017 and 2016, 1 share issued andoutstanding as of December 31, 2017 and 201611Additional paidin capital41,819,68510,037,469Accumulated deficit(29,936,158)(23,125,704)Accumulated other comprehensive income (loss)388,217297,546Total Shareholder’s Equity (Deficit)12,271,745(12,790,688)TOTAL LIABILITIES AND SHAREHOLDER’S EQUITY (DEFICIT)$37,582,858$21,114,832F3LK TECHNOLOGY LTD. AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS(IN U.S. DOLLARS)For the years endedDecember 31,20172016Revenues$26,082,417$5,233,145Less: Cost of revenues5,547,7796,315,504Less: Operating expenses:Selling and marketing23,908,7336,209,804General and administrative2,451,2492,108,854Research and development1,046,1982,882,202Total operating expenses27,406,18011,200,860Loss from operations(6,871,542)(12,283,219)Other income (expense):Interest expense(26,611)(4,412)Foreign exchange gains (losses)350,679(298,257)Loss from investment(428,571)Other income (expense), net(262,980)(34,572)Total other income (expense), net61,088(765,812)Loss before income taxes(6,810,454)(13,049,031)Income taxesNet loss$(6,810,454)$(13,049,031)Other comprehensive income:Foreign currency translation adjustment90,671387,375Total comprehensive loss$(6,719,783)$(12,661,656)F4LK TECHNOLOGY LTD. AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDER’S EQUITY(IN U.S. DOLLARS)Accumulated otherTotalOrdinary sharesAdditionalpaidin AccumulatedcomprehensiveIncomeShareholder’sEquity SharesAmountcapitaldeficits(loss)(Deficit)Balance as of December 31, 20151$ 1$8,250,505$(10,076,673)$(89,829)$(1,915,996)Capital contribution from C Media1,786,9641,786,964Net loss(13,049,031)(13,049,031)Foreign currency translation adjustment387,375387,375Balance as of December 31, 20161110,037,469(23,125,704)297,546(12,790,688)Capital contribution from C Media31,782,21631,782,216Net loss(6,810,454)(6,810,454)Foreign currency translation adjustment90,67190,671Balance as of December 31, 20171$1$41,819,685$(29,936,158)$388,217$12,271,745F5LK TECHNOLOGY LTD. AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF CASH FLOWS(IN U.S. DOLLARS)For the years endedDecember 31,20172016CASH FLOWS FROM OPERATING ACTIVITIES:Net loss$(6,810,454)$(13,049,031)Depreciation and amortization3,316,1813,245,161Loss on disposal of property and equipment115,19373,022Increase in allowance for doubtful accounts445,39562,591Changes in assets and liabilitiesAccounts receivable(7,933,730)(1,507,296)Other receivables and prepayment(2,202,960)2,873,984Accounts payable2,230,5434,757,457Accrued liabilities and other payables1,866,1377,483,441Net cash (used in) provided by operating activities(8,973,695)3,939,329CASH FLOWS FROM INVESTING ACTIVITIES:Purchase of property and equipment(12,689)(3,554,258)Proceeds from disposal of property and equipment29,942Net cash provided by (used in) investing activities17,253(3,554,258)CASH FLOWS FROM FINANCING ACTIVITIES:Advances from related parties8,938,290(1,197,870)Net cash provided by (used in) financing activities8,938,290(1,197,870)Effect of exchange rate changes6,688(32,746)Net decrease in cash and cash equivalents(11,464)(845,545)Cash and cash equivalents, at beginning of year83,843929,388Cash and cash equivalents, at end of year$72,379$83,843Supplemental cash flow disclosures:Interest paid26,6114,412Income taxes paidF6LK TECHNOLOGY LTD. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS(IN U.S. DOLLARS)NOTE 1 – DESCRIPTION OF BUSINESS AND ORGANIZATIONStar Chariot Limited was incorporated in the British Virgin Islands (“BVI”) as an exempted limited liability company on March 3, 2011. On January 18, 2018, it wasrenamed as LK Technology Ltd. (“LK Technology ” or the “Company”).LK Technology, its subsidiaries and its variable interest entities (“VIEs”) (collectively the “Group”) operate mobile application service for longdistance travel in thePeople’s Republic of China (the “PRC”). The core mobile application product, Luokuang, is made as an LBSsocial contents and services distribution platform. Itoffers functions based on various travel scenarios, e.g. information, entertainment, travel, ecommerce, O2O, advertising, etc.As of December 31, 2017, details of the Company’s subsidiaries and VIEs are as follows:NameDate ofincorporationPlace ofincorporationPercentage oflegal ownershipSubsidiaries:MMB LimitedApr 11, 2013Hong Kong100%Mobile Media (China) LimitedNov 6, 2007Hong Kong100%Zhong Chuan Tian Xia Information and Technology (Beijing) LimitedFeb 1, 2013PRC100%Zhong Chuan Tian Xia Information and Technology (Shenzhen) LimitedDec 23, 2010PRC100%VIEs:Beijing Zhong Chuan Shi Xun Technology Limited (“Zhong Chuan Shi Xun”)May 17, 2004PRC100%Jiangsu Zhong Chuan Rui You Information and Technology Limited (“Zhong Chuan Rui You”)May 26, 2011PRC100%Huoerguosi Luokuang Information and Technology Limited (“Huoerguosi Luokuang”)Jul 19, 2017PRC100%Shenzhen Jiu Zhou Shi Dai Digital and Technology Limited (“Jiu Zhou Shi Dai”)Nov 26, 2004PRC100%F7NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIESBasis of presentationThe consolidated financial statements of the Group have been prepared in accordance with accounting principles generally accepted in the United States of America(“US GAAP”).The Group incurred losses from operations of $6,871,542 and $12,283,219 for the years ended December 31, 2017 and 2016, respectively. As of December 31, 2017, theGroup had a shareholder’s equity of $12,271,145. The Group had negative cash flows from operating activities for the year ended December 31, 2017 of $8,973,695.As of December 31, 2017, the Group had cash and cash equivalents of $72,379 and a working capital deficit of $1,371,672. From 2018 and onwards, the Group willfocus on improving operation efficiency and cost reduction, and enhancing marketing functions to attract more users. The Group regularly monitors its current andexpected liquidity requirements to ensure that it maintains sufficient cash balances and accessible credit to meet its liquidity requirements in the short and long term.The parent company continues to provide cash flow to the Group. Based on working capital conditions and forecast for future operations, the Group believes that itwill be able to meet its payment obligations and other commitments for at least the following twelve months.Principles of consolidationThe consolidated financial statements include the financial statements of the Company, its subsidiaries, including the whollyforeign owned enterprises (“WFOEs”),and VIEs for which the Company is the primary beneficiary. All transactions and balances among the Company, its subsidiaries and consolidated VIEs have beeneliminated upon consolidation. The results of subsidiaries and consolidated VIEs acquired or disposed of are recorded in the consolidated statements of operationsfrom the effective date of acquisition or up to the effective date of disposal, as appropriate.A subsidiary is an entity in which (i) the Company directly or indirectly controls more than 50% of the voting power; or (ii) the Company has the power to appoint orremove the majority of the members of the board of directors or to cast a majority of votes at the meeting of the board of directors or to govern the financial andoperating policies of the investee pursuant to a statute or under an agreement among the shareholders or equity holders. A VIE is required to be consolidated by theprimary beneficiary of the entity if the equity holders in the entity do not have the characteristics of a controlling financial interest or do not have sufficient equity atrisk for the entity to finance its activities without additional subordinated financial support from other parties.F8To comply with the PRC legal restrictions on foreign ownership of companies that operate mobile application services, the Group operates in such restricted servicesin the PRC through certain PRC domestic companies, whose equity interests are held by certain management members or founders of the Group. Part of theregistered capital of these PRC domestic companies was funded by certain management members or founders of the Group. The Group has entered into certainexclusive business services agreements with these PRC domestic companies, which entitle it to receive a majority of their residual returns and make it obligatory forthe Group to absorb a majority of the risk of losses from their activities. In addition, the Group has entered into certain agreements with those management membersor founders, including equity interest pledge agreements of the equity interests held by those management members or founders and exclusive option agreements toacquire the equity interests in these companies when permitted by the PRC laws, rules and regulations.Details of the typical VIE structure of the Group’s significant consolidated VIEs, primarily domestic companies associated with the operations such as Zhong ChuanShi Xun, Zhong Chuan Rui You, Huoerguosi Luokuang and Jiu Zhou Shi Dai, are set forth below:(i)Contracts that give the Group effective control of VIEsExclusive option agreementsThe VIE equity holders have granted the WFOEs exclusive call options to purchase their equity interest in the VIEs at an exercise price equal to the higherof (i) the registered capital in the VIEs; and (ii) the minimum price as permitted by applicable PRC laws. Each relevant VIE has further granted the relevantWFOE an exclusive call option to purchase its assets at an exercise price equal to the book value of the assets or the minimum price as permitted byapplicable PRC laws, whichever is higher. The WFOEs may nominate another entity or individual to purchase the equity interest or assets, if applicable,under the call options. Each call option is exercisable subject to the condition that applicable PRC laws, rules and regulations do not prohibit completion ofthe transfer of the equity interest or assets pursuant to the call option. Each WFOE is entitled to all dividends and other distributions declared by the VIE,and the VIE equity holders have agreed to give up their rights to receive any distributions or proceeds from the disposal of their equity interests in the VIEwhich are in excess of the original registered capital that they contributed to the VIE, and to pay any such distributions or premium to the WFOE. Theexclusive call option agreements remain in effect until the equity interest or assets that are the subject of such agreements are transferred to the WFOEs.Equity pledge agreementsPursuant to the relevant equity pledge agreements, the relevant VIE equity holders have pledged all of their interests in the equity of the VIEs as acontinuing first priority security interest in favor of the corresponding WFOEs to secure the performance of obligations by the VIEs and/or the equityholders under the other structure contracts. Each WFOE is entitled to exercise its right to dispose of the VIE equity holders’ pledged interests in the equityof the VIE and has priority in receiving payment by the application of proceeds from the auction or sale of such pledged interests, in the event of anybreach or default under the loan agreement or other structure contracts, if applicable. These equity pledge agreements remain in force for the duration ofthe relevant loan agreement and other structure contracts.F9(ii)Contracts that enable the Group to receive substantially all of the economic benefits from the VIEsExclusive business services agreementsEach relevant VIE has entered into an exclusive business services agreement with the respective WFOE, pursuant to which the relevant WFOE providesexclusive business services to the VIE. In exchange, the VIE pays a service fee to the WFOE which typically amounts to what would be substantially all ofthe VIE’s pretax profit, resulting in a transfer of substantially all of the profits from the VIE to the WFOE.Other arrangementsThe exclusive call option agreements described above also enable the Group to receive substantially all of the economic benefits from the VIEs by typicallyentitling the WFOEs to all dividends and other distributions declared by the VIEs and to any distributions or proceeds from the disposal by the VIE equityholders of their equity interests in the VIEs that are in excess of the original registered capital that they contributed to the VIEs.Based on these contractual agreements, the Group believes that the PRC domestic companies as described above should be considered as VIEs because the equityholders do not have significant equity at risk nor do they have the characteristics of a controlling financial interest. Given that the Group is the primary beneficiaryof these PRC domestic companies, the Group believes that these VIEs should be consolidated based on the structure as described above.Under the contractual arrangements with the consolidated VIEs, the Group has the power to direct activities of the consolidated VIEs and can have assetstransferred out of the consolidated VIEs under its control. Therefore, the Group considers that there is no asset in any of the consolidated VIEs that can be usedonly to settle obligations of the consolidated VIEs, except for registered capital and PRC statutory reserves. As all consolidated VIEs are incorporated as limitedliability companies under the Company Law of the PRC, creditors of the consolidated VIEs do not have recourse to the general credit of the Group for any of theliabilities of the consolidated VIEs.Currently there is no contractual arrangement which requires the Group to provide additional financial support to the consolidated VIEs. However, as the Groupconducts its businesses primarily based on the licenses and approvals held by its consolidated VIEs, the Group has provided and will continue to provide financialsupport to the consolidated VIEs considering the business requirements of the consolidated VIEs, as well as the Group’s own business objectives in the future.F10Use of estimatesThe preparation of financial statements in conformity with US GAAP requires the Group to make estimates and assumptions that affect the reported amounts ofassets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expensesduring the reporting period. The most significant estimates are the allowance for doubtful accounts, the useful lives of property and equipment and intangibleassets, impairment of longlived assets and goodwill. Actual results could differ from those estimates.Fair value measurementsFair value is the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at themeasurement date under current market conditions. When determining the fair value measurements for assets and liabilities required or permitted to be recorded atfair value, the Group considers the principal or most advantageous market in which it would transact and it considers assumptions that market participants woulduse when pricing the asset or liability.Authoritative literature provides a fair value hierarchy which prioritizes the inputs to valuation techniques used to measure fair value into three broad levels. Thelevel in the hierarchy within which the fair value measurement in its entirety falls is based upon the lowest level of input that is significant to the fair valuemeasurement as follows:Level 1Level 1 applies to assets or liabilities for which there are quoted prices in active markets for identical assets or liabilities.Level 2Level 2 applies to assets or liabilities for which there are inputs other than quoted prices included within Level 1 that are observable for the asset or liability such asquoted prices for similar assets or liabilities in active markets; quoted prices for identical assets or liabilities in markets with insufficient volume or infrequenttransactions (less active markets); or modelderived valuations in which significant inputs are observable or can be derived principally from, or corroborated by,observable market data.Level 3Level 3 applies to assets or liabilities for which there are unobservable inputs to the valuation methodology that are significant to the measurement of the fair valueof the assets or liabilities.F11Cash and cash equivalentsCash and cash equivalents primarily consist of cash, money market funds, investments in interest bearing demand deposit accounts, time deposits and highly liquidinvestments with original maturities of three months or less from the date of purchase and are stated at cost which approximates their fair value. The Group has nocash equivalents.Accounts receivable, net of allowanceAccounts receivable are recognized and carried at the original invoiced amount less an allowance for any potential uncollectible amounts. An estimate for doubtfuldebts is made when collection of the full amount is no longer probable. Bad debts are written off as incurred. The Group generally does not require collateral from itscustomers.The Group maintains allowances for doubtful accounts for estimated losses resulting from the failure of customers to make payments on time. The Group reviews theaccounts receivable on a periodic basis and makes specific allowances when there is doubt as to the collectability of individual balances. In evaluating thecollectability of individual receivable balances, the Group considers many factors, including the age of the balance, the customer’s payment history, its currentcreditworthiness and current economic trends.Property and equipment, netProperty and equipment are carried at cost less accumulated depreciation. Depreciation is calculated on a straightline basis over the following estimated usefullives:Wifi equipment– 3 yearsOffice equipment– 3 to 5 yearsVehicles– 5 yearsCosts of repairs and maintenance are expensed as incurred and asset improvements are capitalized. The gain or loss on disposal of property and equipment is thedifference between the net sales proceeds and the carrying amount of the relevant assets and is recognized in the consolidated income statement. When propertyand equipment are retired or otherwise disposed of, the cost and accumulated depreciation are removed from the accounts and any resulting gain or loss is includedin the results of operations for the respective period.Construction in progressAssets under construction are not depreciated until construction is completed and the assets are ready for their intended use.F12Intangible assetsIntangible assets with finite lives are amortized using the straightline method over the estimated economic lives.Intangible assets have weighted average economic lives from the date of purchase as follows:Software– 5 yearsTrademarks– 10 yearsGoodwillThe Group assesses goodwill for impairment in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”)subtopic 35020, Intangibles—Goodwill and Other: Goodwill (“ASC 35020”), which requires that goodwill to be tested for impairment at the reporting unit level atleast annually and more frequently upon the occurrence of certain events, as defined by ASC 35020.We have the option to assess qualitative factors first to determine whether it is necessary to perform the twostep test in accordance with ASC 35020. If we believe,as a result of the qualitative assessment, that it is morelikelythannot that the fair value of the reporting unit is less than its carrying amount, the twostepquantitative impairment test described below is required. Otherwise, no further testing is required. In the qualitative assessment, we consider primary factors such asindustry and market considerations, overall financial performance of the reporting unit, and other specific information related to the operations. In performing thetwostep quantitative impairment test, the first step compares the carrying amount of the reporting unit to the fair value of the reporting unit based on either quotedmarket prices of the ordinary shares or estimated fair value using a combination of the income approach and the market approach. If the fair value of the reportingunit exceeds the carrying value of the reporting unit, goodwill is not impaired and we are not required to perform further testing. If the carrying value of the reportingunit exceeds the fair value of the reporting unit, then we must perform the second step of the impairment test in order to determine the implied fair value of thereporting unit’s goodwill. The fair value of the reporting unit is allocated to its assets and liabilities in a manner similar to a purchase price allocation in order todetermine the implied fair value of the reporting unit goodwill. If the carrying amount of the goodwill is greater than its implied fair value, the excess is recognized asan impairment loss.In 2017, we performed a qualitative assessment for goodwill. Based on the requirements of ASC35020, we evaluated all relevant factors, including but not limited tomacroeconomic conditions, industry and market conditions, financial performance. We weighed all factors in their entirety and concluded that it was not morelikelythannot the fair value was less than the carrying amount of the reporting unit, and further impairment testing on goodwill was unnecessary as of December 31, 2017and 2016.F13Impairment or disposal of longlived assetsLonglived assets other than goodwill are included in impairment evaluations when events and circumstances exist that indicate the carrying value of these assetsmay not be recoverable. In accordance with FASB ASC 360, Property, Plant and Equipment, the Group assesses the recoverability of the carrying value of longlivedassets by first grouping its longlived assets with other assets and liabilities at the lowest level for which identifiable cash flows are largely independent of the cashflows of other assets and liabilities (the asset group) and, secondly, estimating the undiscounted future cash flows that are directly associated with and expected toarise from the use of and eventual disposition of such asset group. If the carrying value of the asset group exceeds the estimated undiscounted cash flows, theGroup recognizes an impairment loss to the extent the carrying value of the longlived asset exceeds its fair value. The Group determines fair value through quotedmarket prices in active markets or, if quotations of market prices are unavailable, through the performance of internal analysis using a discounted cash flowmethodology or obtains external appraisals from independent valuation firms. The undiscounted and discounted cash flow analyses are based on a number ofestimates and assumptions, including the expected period over which the asset will be utilized, projected future operating results of the asset group, discount rateand longterm growth rate.As of December 31, 2017 and 2016, the Group assessed the impairment of its longlived assets and concluded that there was no impairment indication.Business combinationWe account for business combinations using the purchase method of accounting in accordance with FASB ASC topic 805, Business combinations. The purchasemethod accounting requires that the consideration transferred be allocated to the assets, including separately identifiable assets and liabilities we acquired, basedon their estimated fair values. The consideration transferred in an acquisition is measured as the aggregate of the fair values at the date of exchange of the assetsgiven, liabilities incurred, and equity instruments issued as well as the contingent considerations and all contractual contingencies as of the acquisition date. Thecosts directly attributable to the acquisition are expensed as incurred. Identifiable assets, liabilities and contingent liabilities acquired or assumed are measuredseparately at their fair value as of the acquisition date, irrespective of the extent of any noncontrolling interests. The excess of (i) the total of cost of acquisition, fairvalue of the noncontrolling interests and acquisition date fair value of any previously held equity interest in the acquiree over (ii) the fair value of the identifiable netassets of the acquiree, is recorded as goodwill. If the cost of acquisition is less than the fair value of the net assets of the subsidiary acquired, the difference isrecognized directly in earnings.Revenue recognitionThe Group recognizes revenue in accordance with FASB ASC topic 605, Revenue Recognition (“ASC 605”). Revenue is recognized when the following four revenuerecognition criteria are met: (i) persuasive evidence of an arrangement exists, (ii) delivery has occurred or services have been provided, (iii) the selling price is fixed ordeterminable, and (iv) collectability is reasonably assured.F14Displaybased online advertising servicesThe Group provides displaybased online advertising services to customers by integrating text description, image and video, and displaying the advertisements in aprominent position of LuoKuang Application. The Group recognizes revenue in accordance with ASC 605, over the contractual term based on the agreements andconfirmation letters signed by both parties, commencing on the date the customer’s advertisement is displayed on the Group’s platform.Foreign currency translationThe functional and reporting currency of the Company and the Company’s subsidiaries domiciled in BVI and Hong Kong are the United States dollar (“U.S. dollar”).The financial records of the Company’s other subsidiaries and VIEs located in the PRC are maintained in their local currency, the Chinese Renminbi (“RMB”), whichare the functional currency of these entities.Monetary assets and liabilities denominated in currencies other than the functional currency are translated into the functional currency at the rates of exchangeruling at the balance sheet date. Transactions in currencies other than the functional currency during the year are converted into the functional currency at theapplicable rates of exchange prevailing when the transactions occurred. Transaction gains and losses are recognized in the statements of operations.The Company’s entities with a functional currency of RMB translate their operating results and financial position into the U.S. dollar, the Company’s reportingcurrency. Assets and liabilities are translated using the exchange rates in effect on the balance sheet date. Revenues, expenses, gains and losses are translatedusing the average rate for the year. Retained earnings and equity are translated using the historical rate. Translation adjustments are reported as cumulativetranslation adjustments and are shown as a separate component of other comprehensive income.Income taxesDeferred income taxes are recognized for temporary differences between the tax basis of assets and liabilities and their reported amounts in the financial statements,net operating loss carry forwards and credits, by applying enacted statutory tax rates applicable to future years. Deferred tax assets are reduced by a valuationallowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Current income taxesare provided for in accordance with the laws and regulations applicable to the Group as enacted by the relevant tax authorities.The impact of an uncertain income tax position on the income tax return must be recognized at the largest amount that is morelikelythan not to be sustained uponaudit by the relevant tax authorities. An uncertain income tax position will not be recognized if it has less than a 50% likelihood of being sustained. Additionally, theGroup classifies the interest and penalties, if any, as a component of the income tax expense. For years ended December 31, 2017 and 2016, the Group did not haveany material interest or penalties associated with tax positions nor did the Group have any significant unrecognized uncertain tax positions.F15Related partiesParties are considered to be related to the Company if the parties, directly or indirectly, through one or more intermediaries, control, are controlled by, or are undercommon control with the Company. Related parties also include principal owners of the Company, its management, members of the immediate families of principalowners of the Company and its management and other parties with which the Company may deal with if one party controls or can significantly influence themanagement or operating policies of the other to an extent that one of the transacting parties might be prevented from fully pursuing its own separate interests. TheCompany discloses all significant related party transactions.LeasesLeases have been classified as either capital or operating leases. Leases that transfer substantially all the benefits and risks incidental to the ownership of assets areaccounted for as if there was an acquisition of an asset and incurrence of an obligation at the inception of the lease. All other leases are accounted for as operatingleases wherein rental payments are expensed as incurred.When the Group is the lessor, minimum contractual rental from leases are recognized on a straightline basis over the noncancelable term of the lease. With respectto a particular lease, actual amounts billed in accordance with the lease during any given period may be higher or lower than the amount of rental revenue recognizedfor the period. Straightline rental revenue commences when the customer assumes control of the leased premises. Accrued straightline rents receivable representsthe amount by which straightline rental revenue exceeds rents currently billed in accordance with lease agreements. Contingent rental revenue is accrued when thecontingency is removed.Advertising costsAdvertising costs include expenses associated with direct marketing. All advertising costs are expensed as incurred and included in selling and marketing expenses.During the years ended December 31, 2017 and 2016, advertising costs amounted to $23,171,170 and $4,537,653, respectively.Comprehensive lossComprehensive loss includes net loss and foreign currency translation adjustments and is presented net of tax. The tax effect is nil for the two years endedDecember 31, 2017 and 2016 in the consolidated statements of comprehensive loss.Concentration of credit riskFinancial instruments that potentially expose the Group to concentrations of credit risk consist primarily of cash and accounts receivable. The Group places its cashwith financial institutions with highcredit rating and quality in China. For the year ended December 31, 2017, two customers accounted for over 10% of totalrevenue. For the year ended December 31, 2016, four customers accounted for over 10% of total revenue. At December 31, 2017 and 2016, the Group had credit riskexposure of uninured cash in banks of approximately $72,379 and $83,843, respectively.F16NOTE 3 – INCOME TAXAt December 31, 2017 and 2016, the Group had an unused net operating loss carryforwards of approximately $25,123,726 and $20,081,239, respectively, for income taxpurposes, which expires between 2018 to 2022 and between 2017 to 2021, respectively. At December 31, 2017 and 2016, these net operating losses carryforwards mayresult in future income tax benefits of approximately $5,043,944 and $4,008,863, respectively, however, because realization is uncertain at this time, a valuationallowance in the same amount has been established. Deferred income taxes reflect the net effects of temporary differences between the carrying amounts of assetsand liabilities for financial reporting purposes and the amounts used for income tax purposes.Significant components of the Group’s deferred tax liabilities and assets of December 31, 2017 and 2016 are as follows:December 31,December 31,20172016Deferred tax liabilities$$Deferred tax assetNet operating loss carryforward5,043,9444,008,863Valuation allowance(5,043,944)(4,008,863)Net deferred tax assetMovement of valuation allowanceDecember 31,2017December 31,2016At the beginning of the year$4,008,863$2,049,352Current year addition823,9702,159,518Expired(61,411)Exchange difference272,522(200,007)At the end of the year5,043,9444,008,863The Company is not subject to taxation in BVI under the current BVI law. Subsidiaries operating in the PRC are subject to PRC Enterprise Income Tax at the statutoryrate of 25% for the years ended December 31, 2017 and 2016. Subsidiaries operating in Hong Kong are subject to Hong Kong income taxes at a rate of 16.5% for theyears ended December 31, 2017 and 2016.F17A reconciliation of the income tax expense to the amount computed by applying the current statutory tax rate to the loss before income taxes in the consolidatedstatements of comprehensive income is as follows:December 31,December 31,20172016Loss before income taxes$(6,810,454)$(13,049,031)Tax loss at statutory tax rate(1,655,174)(3,386,822)Nondeductible items6,729,2551,712,857Nontaxable items(3,789,956)(674,189)Change in valuation allowance823,9702,159,518Tax benefits(2,108,095)188,636Income tax expensesNOTE 4 – ACCOUNTS RECEIVABLEAt December 31, 2017 and 2016, accounts receivable consisted of the following:December 31,December 31,20172016Accounts receivable$10,406,602$2,098,946Less: allowance for doubtful accounts676,977233,110$9,729,625$1,865,836NOTE 5 – OTHER RECEIVABLESAt December 31, 2017 and 2016, other receivables consisted of the following:December 31,2017December 31,2016Advances to suppliers$339,701$181,472VAT recoverable (1)3,033,0651,662,805Other5,048,189485,152$2,376,745$2,287,934(1)The balance of advanced VAT represents input VAT available for deducting the amount of VAT paid in the future. During the years ended December 31, 2017and 2016, the Group purchased a large amount of WiFi equipment for deployments, which generated related input VAT approved by tax authority.F18NOTE 6 – AMOUNTS DUE FROM RELATEDPARTIESAt December 31, 2017 and 2016, amounts due from related parties consisted of the following:Name of related partyDecember 31,2017December 31,2016C Media Limited (1)$11,760,692$Ya Tuo Ji International Consultancy (Beijing) Limited (2)204,412183,811(1)C Media Limited is the parent company of LK Technology. The Group expects the amounts due from the related party will be returned to the Group within oneyear.(2)Ya Tuo Ji is a company controlled by the spouse of a major shareholder of C Media Limited. The loan is unsecured, interestfree and repayable on January 5,2019.NOTE 7 – PROPERTY AND EQUIPMENTAt December 31, 2017 and 2016, property and equipment consisted of the following:December 31,December 31,Useful life20172016WiFi equipment3 Years$8,711,424$8,367,678Vehicles5 Years43,246Office and other equipment3 – 5 Years170,242416,434Constructioninprogress2,166,4522,652,28811,048,11811,479,646Less: accumulated depreciation(6,003,246)(3,708,619)$5,044,872$7,771,027For the years ended December 31, 2017 and 2016, depreciation expense amounted to $2,628,884 and $2,474,434, respectively, of which $2,423,655 and $2,194,582,respectively, was included in cost of revenue, $117,648 and $121,740, respectively, was included in selling and marketing expenses and the remainder was included ingeneral and administrative expense.Included in constructioninprogress are WiFI equipment under construction.F19NOTE 8 – GOODWILLIn September of 2014, Zhong Chuan Shi Xun acquired a 100% interest in Zhong Chuan Rui You for a consideration of $7,391,894 (RMB48,000,000). Zhong Chuan RuiYou is primarily engaged in on train WiFi business, deploying WiFi equipment on trains and providing passengers with entertainment and information services ontrains. The book value of the identifiable net assets of Zhong Chuan Rui You was $151,958 (RMB963,000) and a goodwill of $7,239,936 was recorded.NOTE 9 – ACCRUED LIABILITIES AND OTHER PAYABLESAt December 31, 2017 and 2016, accrued liabilities and other payables consisted of the following:December 31,December 31,20172016Deferred revenue$2,326,406$302,735Accrued payroll143,998316,458Other taxes payable3,544,469461,699Other payable852,384686,526Other loans6,095,6559,562,915$12,962,912$11,329,613Deferred revenue represents prepayments from customers for advertising service and is recognized as revenue when the advertising services are rendered.Other loans of $939,555 and $57,416, respectively, as of December 31, 2017 and 2016, are unsecured, bear daily interest at 0.04% and are repayable on demand.NOTE 10 – AMOUNTS DUE TO RELATED PARTIESAt December 31, 2017 and 2016, amounts due to related parties consisted of the following:December 31,December 31,Name of related party20172016Mr. Song Xuesong (“Mr. Song”) (1)$2,921,639$10,669,325C Media Limited (2)$$4,855,236Thumb Beijing Branch (3)$612,103$576,560Thumb Shenzhen Branch (3)$29,941$28,202(1) The Group’s CEO(2) C Media Limited, the parent company.(3) Thumb Beijing and Shenzhen Branch are controlled by the spouse of Mr. Song.Amounts due to related parties are shortterm in nature, noninterest bearing, unsecured and payable on demand.F20NOTE 11 – RETIREMENT AND WELFARE BENEFITSThe Group’s fulltime employees are entitled to staff welfare benefits including medical care, casualty, housing benefits, education benefits, unemployment insuranceand pension benefits through a PRC governmentmandated multiemployer defined contribution plan. The Group is required to accrue the employerportion forthese benefits based on certain percentages of the employees’ salaries. The total provision for such employee benefits of $170,227 and $353,033 during the yearsended December 31, 2017 and 2016, respectively, of which $23,392 and $30,455, respectively, was charged to cost of revenue, $48,957 and $97,408, respectively wascharged to selling and marketing expenses, $49,717 and $86,934, respectively, was charged to general and administrative expenses and $48,161 and $138,236,respectively was charged to research and development expenses. The Group is required to make contributions to the plan out of the amounts accrued for all staffwelfare benefits except for education benefits. The PRC government is responsible for the staff welfare benefits including medical care, casualty, housing benefits,unemployment insurance and pension benefits to be paid to these employees.NOTE 12 – STATUTORY RESERVESAs stipulated by the relevant law and regulations in the PRC, the Group’s subsidiaries and VIEs in the PRC are required to maintain a nondistributable statutorysurplus reserve. Appropriations to the statutory surplus reserve are required to be made at not less than 10% of profit after taxes as reported in the subsidiaries’statutory financial statements prepared under the PRC GAAP. Once appropriated, these amounts are not available for future distribution to owners or shareholders.Once the general reserve is accumulated to 50% of the subsidiaries’ registered capital, the subsidiaries can choose not to provide more reserves. The statutoryreserve may be applied against prior year losses, if any, and may be used for general business expansion and production and increase in registered capital of thesubsidiaries. The Group allocated $Nil to statutory reserves during the years ended December 31, 2017 and 2016, respectively. The statutory reserves cannot betransferred to the Company in the form of loans or advances and are not distributable as cash dividends except in the event of liquidation.NOTE 13 – COMMITMENTS AND CONTINGENCIESOperating leasesWe have entered into operating lease agreements primarily for our office spaces in China. These leases expire through 2018 and are renewable upon negotiation.Future minimum rental payment required under the Office Lease is as follows:Year ending December 31:Amount2018$122,138F21Contingencies(a) Litigation with Shanghai Fusheng Weier Intelligent Control Technology Co., Ltd.On January 22, 2016, Zhong Chuan Rui You and Shanghai Fusheng Weier Intelligent Control Technology Co., Ltd. (“Fusheng Weier”) signed a contract forequipment of $1,652,842 (RMB10,800,000). Since Zhong Chuan Rui You did not make the payments of $1,126,381 (RMB7,360,000) on the due dates, Fusheng Weierfiled a lawsuit against Zhong Chuan Rui You in Shanghai Xuhui District People’s Court on October 8, 2016. On March 9, 2017, Xuhui District People’s Court issuedthe verdict requiring Zhong Chuan Rui You to pay the overdue debts. In August 2017, C Media Limited made the payment of $512,075 (RMB3,346,000). Theremaining balance has been accrued in accounts payable. The payment schedule for the remaining balance is being negotiated by the two parties. On February 5,2018, a hearing was held adding Zhong Chuan Shi Xun as a defendant. The Group plans to settle the remaining balance within one year.(b) Lawsuit with Gansu Jinlun Culture Media Co., Ltd.On August 22, 2014, Zhong Chuan Rui You and Gansu Jinlun Culture Media Co., Ltd. (“Gansu Jinlun”) signed a “Lanzhou Railway Bureau Airconditioned Train WiFi Network System Advertising Operation Rights Agreement” for advertising on 72 trains of $1,467,880 (RMB9,604,633). Due to the dispute on the projectimplementation, Zhong Chuan Rui You did not pay the advertising fee. On August 23, 2017, Gansu Jinlun filed a lawsuit with Gansu Intermediate People’s Court. OnDecember 19, 2017, Gansu Intermediate People’s Court issued a verdict, ruling that Zhong Chuan Rui You settle the overdue advertising fee. Since only 18 out of 72trains have been installed with Wifi network system, Zhong Chuan Rui You disputed and appealed to the verdict. The next court trial date has not yet beendetermined.C Media and Gansu Jinlun are negotiating a potential settlement to resume the contract. According to the legal counsel, it is probable that the settlement will amountto approximately $459,000 (RMB3,000,000); therefore, this amount has been accrued in accounts payable.(c) Litigation with Shenzhen Hua Xun Fang Zhou Technology Co., Ltd.On June 16, 2015, Zhong Chuan Rui You signed a cooperation agreement with Shenzhen Hua Xun Fang Zhou Technology Co., Ltd. (“Shenzhen Hua Xun”) andXuesong Song, a major shareholder of C Media Limited. Pursuant to this agreement, Zhong Chuan Rui You procures equipment from Shenzhen Hua Xun. XuesongSong acts as a joint liability guarantor for the entire debts of Zhong Chuan Rui You under this agreement. As Zhong Chuan Rui You did not make the payments onthe due dates, Shenzhen Hua Xun filed a lawsuit with Shenzhen Baoan District People’s Court on May 31, 2016. On November 1, 2016, Zhong Chuan Rui You,Xuesong Song and Shenzhen Hua Xun reached a settlement in Shenzhen Baoan District People’s Court to settle $1,735,389 (RMB11,355,000) in four instalments. OnDecember 30, 2017, the debt was assigned to C Media Limited.NOTE 14 – SUBSEQUENT EVENTThe Group has evaluated all events or transactions that occurred after December 31, 2017 through May 25, 2018, which is the date that the financial statements wereavailable to be issued.F22EX1.1 2 f20f2017ex11_luokung.htm AMENDED AND RESTATED MEMORANDUM OF ASSOCIATION AND ARTICLES OF ASSOCIATION OF LUOKUNGTECHNOLOGY CORP., DATED AUGUST 20, 2018, AND AS CURRENTLY IN EFFECTExhibit 1.1BC NO: 1553620British Virgin IslandsThe BVI Business Companies Act, 2004(No. 16 of 2004)Memorandum of AssociationandArticles of AssociationofLuokung Technology Corp.Incorporated the 24th day of October, 2009Amended and Restated the 11th Day of December 2009Amended and Restated the 17th Day of December 2009Amended and Restated the 25th Day of March 2010Amended and Restated the 21st day of May 2018Amended and restated the 17 August 2018Amended and restated the 21 August 2018Portcullis (BVI) LimitedPortcullis Chambers4th Floor Ellen Skelton Building3076 Sir Francis Drake HighwayRoad Town, TortolaBritish Virgin IslandsTERRITORY OF THE BRITISH VIRGIN ISLANDSTHE BVI BUSINESS COMPANIES ACT, 2004(No. 16 of 2004)MEMORANDUM OF ASSOCIATIONOFLuokung Technology Corp.NAME1.The name of the Company is Luokung Technology Corp.TYPE OF COMPANY2.The Company is a company limited by shares.REGISTERED OFFICE3.The first Registered Office of the Company is the offices of Portcullis TrustNet (BVI) Limited, Portcullis TrustNet Chambers, P.O. Box 3444, Road Town,Tortola, British Virgin Islands, the office of the registered agent.3.1The current Registered Office of the Company is Portcullis Chambers, 4th Floor Ellen Skelton Building, 3076 SirFrancis Drake Highway, Road Town,Tortola, British Virgin Islands VG1110.REGISTERED AGENT4.The first Registered Agent of the Company is Portcullis TrustNet (BVI) Limited of Portcullis TrustNet Chambers, P.O. Box 3444, Road Town, Tortola,British Virgin Islands.4.1The current Registered Agent of the Company is Portcullis (BVI) Ltd of Portcullis Chambers, 4th Floor Ellen Skelton Building, 3076 Sir Francis DrakeHighway, Road Town, Tortola, British Virgin Islands VG1110.AUTHORISED NUMBER OF SHARES5.The Company is authorised to issue a maximum of 251,000,000 shares.CLASSES, NUMBER AND PAR VALUE OF SHARES6.As at the date of adoption of this memorandum, the Company is authorised to issue (a) 250,000,000 ordinary shares without par value (“OrdinaryShares”); and (b) 1,000,000 preferred shares without par value (“Preferred Shares”).FRACTIONAL SHARES7.The Company may issue fractions of a share and a fractional share shall have the same corresponding fractional liabilities, limitations, preferences,privileges, qualifications, restrictions, rights and other attributes of a whole share of the same class or series of shares.RIGHTS, PRIVILEGES, RESTRICTIONS AND CONDITIONS ATTACHING TO SHARES8.(1)Subject to the memorandum and articles of association (and, for greater clarity, without prejudice to any special rights conferred thereby on theholders of any other shares), an Ordinary Share of the Company confers on the holder;(a)the right to one vote at a meeting of the members of the Company or on any Resolution of Members;(b)the right to an equal share in any Distribution paid by the Company; and(c)the right to an equal share in the distribution of the surplus assets of the Company on a winding up.(2)Subject to the memorandum and articles of association (and, for greater clarity, without prejudice to any special rights conferred thereby on theholders of any other shares), a Preferred Share of the Company confers on the holder;(a)the right to 399 votes at a meeting of the members of the Company or on any Resolution of Members;(b)the right to an equal share in any Distribution paid by the Company;(c)the right to an equal share in the distribution of the surplus assets of the Company on its liquidation.(d)be freely transferable, in whole or in part, by Mr. Xuesong Song to any third party through one or more Private Transactions, subject toApplicable Law; and(e)be freely transferable, in whole or in part, by Mr. Xuesong Song to any third party through one or more Public Transactions, subject to ApplicableLaw and Automatic Conversion of such Preferred Share(s) into Ordinary Share(s).(3)The directors may at their discretion by resolution of directors redeem, purchase or otherwise acquire all or any of the shares in the Companysubject to the Articles..VARIATION OF CLASS RIGHTS9.If at any time the issued shares are divided into different classes or series of shares, the rights attached to any class or series (unless otherwise providedby the terms of issue of the shares of that class or series) may, whether or not the Company is being wound up, be varied with the consent in writing of theholders of not less than threefourths of the issued shares of that class or series and of the holders of not less than threefourths of the issued shares ofany other class or series of shares which may be affected by such variation.RIGHTS NOT VARIED BY THE ISSUE OF SHARES PARI PASSU10.The rights conferred upon the holders of the shares of any class issued with preferred or other rights shall not, unless otherwise expressly provided by theterms of issue of the shares of that class, be deemed to be varied by the creation or issue of further shares ranking pari passu therewith.CAPACITY AND POWERS11.Subject to the Act, any other British Virgin Islands legislation and paragraph 12 below the Company has, irrespective of corporate benefit:(a)full capacity to carry on or undertake any business or activity, do any act or enter into any transaction;(b)for the purposes of paragraph (a), full rights, powers and privileges; and(c)full powers to issue shares with preemptive rights, subject to the Articles.2LIMITATIONS ON THE COMPANY’S BUSINESS12.For the purposes of section 9(4) of the Act the Company may not;(a)carry on banking or trust business, unless it is licensed to do so under the Banks and Trust Companies Act, 1990;(b)carry on business as an insurance or reinsurance company, insurance agent or insurance broker, unless it is licensed under the Insurance Act1994;(c)carry on business of company management, unless it is licensed under the Company Management Act, 1990;(d)carry on the business of providing the registered office or the registered agent for companies incorporated in the British Virgin Islands;(e)carry on the business as a mutual fund, manager of mutual funds or administrator of mutual funds unless it is recognized or licenced as the casemay be under the Mutual Funds Act 1996; or(f)carry on any other business that gives rise to a licencing requirement under any law for the time being in force in the British Virgin Islands unlessit is licenced, regulated, recognised or otherwise approved pursuant to such law.REGISTERED SHARES AND PROHIBITION ON ISSUE OF BEARER SHARES13.Shares in the Company may only be issued as registered shares. The issue of shares to bearer is prohibited.PROHIBITION ON EXCHANGE AND CONVERSION OF REGISTERED SHARES TO BEARER SHARES14.The exchange or conversion of registered shares to bearer shares is prohibited.TRANSFER OF REGISTERED SHARES15.Subject to the provisions of the Articles the Company may upon receipt of an instrument of transfer enter the name of the transferee in the register ofmembers subject to the prior or simultaneous approval of the Company as evidenced by a resolution of directors or by a resolution of members. Subject toany resolution of the members to the contrary, the directors may resolve by resolution of directors to refuse or delay the registration of the transfer forreasons that shall be specified in the resolution of directors.AMENDMENT OF MEMORANDUM AND ARTICLES OF ASSOCIATION16.1The Company may amend its Memorandum or Articles by a resolution of members or by a resolution of directors provided that the directors shall not havethe power to amend the Memorandum or Articles;(a)to restrict the rights or powers of the members to amend the Memorandum or Articles;(b)to change the percentage of members required to pass a resolution to amend the Memorandum or Articles;(c)in circumstances where the Memorandum or Articles cannot be amended by the members; or(d)to Clauses 8, 9, 10 or this Clause 12.16.2No amendment may be made to Regulation 76 of the Articles unless approved by an affirmative vote of the holders of 66 2/3 percent or more of theoutstanding votes of the shares entitled to vote thereon.3DEFINITIONS17.The meanings of words in this Memorandum are as defined in the Articles.We, Portcullis TrustNet (BVI) Limited of Portcullis TrustNet Chambers, P.O. Box 3444, Road Town, Tortola, British Virgin Islands for the purpose ofincorporating a BVI Business Company under the laws of the British Virgin Islands hereby sign this Memorandum of Association the 27th day of October,2009.Incorporator/s/ Nicole WheatleyPortcullis TrustNet (BVI) LimitedPortcullis TrustNet ChambersP.O. Box 3444Road Town, TortolaBritish Virgin Islands(Sgd. Nicole Wheatley)4TERRITORY OF THE BRITISH VIRGIN ISLANDSTHE BVI BUSINESS COMPANIES ACT, 2004(No. 16 of 2004)ARTICLES OF ASSOCIATIONOFLuokung Technology Corp.PRELIMINARY1.In these Articles, if not inconsistent with the subject or context, the words and expressions standing in the first column of the following table shall bear themeanings set opposite them respectively in the second column thereof.WordsMeaningApplicable Lawall Laws, including those of a jurisdiction in or outside of the United States, applicable to the Private orPublic Transactions.Actthe BVI Business Companies Act, 2004 (No 16 of 2004.) including any modification, extension, reenactment or renewal thereof and any regulations made thereunder.Articlesthese Articles of Association as originally framed or as from time to time amended.Automatic Conversioneach Preferred Share shall be automatically converted at any time after issue and without the payment ofany additional sum into an equal number of fully paid Ordinary Shares upon the conclusion of anytransfer by Mr. Xuesong Song to any third party through one or more Public Transactions.Designated Stock Exchangeeither the Nasdaq National Stock Market, Inc. or such other exchange or quotation bureau on which, theCompany’s Securities are listed or traded; provided that until the Securities are listed on any such“Exchange” the rules of any such Designated Stock Exchange shall be inapplicable to these Articles.directora director of the Company.distributionin relation to a distribution by a company to a member, means(i)the direct or indirect transfer of an asset, other than the Company’s own shares, to or forthe benefit of the member or(ii)the incurring of a debt to or for the benefit of a member,in relation to shares held by a member, and whether by means of a purchase of an asset, the purchase,redemption or other acquisition of shares, a transfer of indebtedness or otherwise, and includes adividend.Independent Directora person who meets the then current requirements for “independence” of the applicable rules andregulations of the U.S. Securities and Exchange Commission and the Designated Stock Exchange.5member or shareholderin relation to the Company, means a person whose name is entered in the register of members as theholder of one or more shares, or fractional shares, in the Company.Memorandumthe Memorandum of Association of the Company as originally framed or as from time to time amended.Mr. Xuesong Songthe founder, a director and Chairman of LK Technology Ltd.Ordinary Sharesissued or unissued ordinary shares of no par value of the Company having the rights, preferences andprivileges set out in the MemorandumPersonAn individual, a corporation, a trust, trustee, the estate of a deceased individual, a partnership or anunincorporated association of persons.Preferred Sharesissued or unissued preferred shares of no par value of the Company having the rights, preferences andprivileges set out in the MemorandumPrivate Transactionstransactions that are not considered as a Public Transaction.Public Transactionstransactions through any national securities exchanges and/or through the automated quotation systemincluding but not limited to NASDAQ, NYSE (including NYSE American) or OTC Markets, or anytransaction executed by the broker or with a market maker.Related Party(a) any director, officer and employee of the Company; (b) any family member of such director, officer andemployee; and (c) any entity (e.g. a corporation, partnership, or trust) controlled by or set up for thebenefit of a director, officer or employee, or a family member of such director, officer or employee.Relevant SystemA facility for the electronic transfer of uncertificated securities administered by The Depository TrustCompany or such other Person regulated by the SEC.resolution of directors(a)A resolution approved at a duly convened and constituted meeting of directors of the Companyor of a committee of directors of the Company by the affirmative vote of a simple majority of thedirectors present at the meeting who voted and did not abstain; or(b)a resolution consented to in writing by a simple majority of the directors or of all members of thecommittee, as the case may be;except that where a director is given more than one vote, he shall be counted by the number ofvotes he casts for the purpose of establishing a majority.resolution of membersSubject to the provisions of the Memorandum and Articles means:(a)A resolution approved at a duly convened and constituted meeting of the members of theCompany by the affirmative vote of(i)a majority of in excess of 50% of the votes of the shares entitled to vote and voting onthe resolution, or(ii)a majority of in excess of 50% of the votes of each class or series of shares entitled tovote as a class or series and voting on the resolution and a majority of in excess of 50%of the votes of the remaining shares entitled to vote and voting on the resolution; or6(b)a resolution consented to in writing by(i)an absolute majority of the votes of shares entitled to vote thereon, or(ii)an absolute majority of the votes of each class or series of shares entitled to votethereon as a class or series and of an absolute majority of the votes of the remainingshares entitled to vote thereon.SealAny Seal which has been duly adopted as the common seal of the Company.SECThe United States Securities and Exchange Commission.Securitiesshares and debt obligations of every kind, and options, warrants and rights to acquire shares, or debtobligations.SharesOrdinary Shares and/or Preferred Shares, as the case may be.solvency testa company satisfies the solvency test if;(i)the value of the company’s assets exceeds its liabilities, and(ii)the company is able to pay its debts as they fall due.treasury sharesshares in the Company that were previously issued but were repurchased, redeemed or otherwiseacquired by the Company and not cancelled.2.“Written” or any term of like import includes words typewritten, printed, painted, engraved, lithographed, photographed or represented or reproduced byany mode of reproducing words in a visible form, including telex, facsimile, telegram, cable or other form of writing produced by electronic communication.3.Save as aforesaid any words or expressions defined in the Act shall bear the same meaning in these Articles.4.Whenever the singular or plural number, or the masculine, feminine or neuter gender is used in these Articles, it shall equally, where the context admits,include the others.5.A reference in these Articles to voting in relation to shares shall be construed as a reference to voting by members holding the shares except that it is thevotes allocated to the shares that shall be counted and not the number of members who actually voted and a reference to shares being present at a meetingshall be given a corresponding construction.6.A reference to money in these Articles is, unless otherwise stated, a reference to the currency in which shares in the Company shall be issued according tothe provisions of the Memorandum.7REGISTERED SHARES7.Every member holding registered shares in the Company shall be entitled to a certificate signed by a director or officer of the Company or such otherperson who may be authorised from time to time by resolution of directors or under the Seal, with or without the signature of any director of the Company,specifying the share or shares held by him and the signature of the director or officer or person so authorised and the Seal may be facsimiles.8.Any member receiving a share certificate for registered shares shall indemnify and hold the Company and its directors and officers harmless from any lossor liability which it or they may incur by reason of any wrongful or fraudulent use or representation made by any person by virtue of the possessionthereof. If a share certificate for registered shares is worn out or lost it may be renewed on production of the worn out certificate or on satisfactory proof ofits loss together with such indemnity as may be required by a resolution of directors.9.If several persons are registered as joint holders of any shares, any one of such persons may give an effectual receipt for any distribution payable inrespect of such shares.10.Nothing in these Articles shall require title to any shares or other Securities to be evidenced by a certificate if the Act and the rules of the Designated StockExchange permit otherwise.SHARES AND ISSUED SHARES11.Subject to the provisions of these Articles and, if applicable, the rules of the Designated Stock Exchange, and any resolution of members, the directors ofthe Company may, without limiting or affecting any rights previously conferred on the holders of any existing shares or class or series of shares, offer, allot,grant options over or otherwise dispose of shares to such persons, at such times and upon such terms and conditions as the Company may by resolutionof directors determine. The directors shall not issue more shares than the maximum number provided for in the Memorandum.12.The Company may issue fully paid, partly paid or nil paid shares as well as bonus shares. A partly paid or nil paid share or a share issued for a promissorynote or other written obligation for payment of a debt may be issued subject to forfeiture in the manner prescribed in these Articles.13.Shares in the Company may be issued for consideration in any form, including money, a promissory note or other obligation to contribute money orproperty, real property, personal property (including goodwill and knowhow) services rendered or a contract for future services and the amount of suchconsideration shall be determined by resolution of directors, except that in the case of shares with par value, the amount shall not be less than the parvalue, and in the absence of fraud the decision of the directors as to the value of the consideration received by the Company in respect of the issue isconclusive unless a question of law is involved.14.Before issuing shares for a consideration other than money, the directors shall pass a resolution stating;(a)the amount to be credited for the issue of the shares;(b)their determination of the reasonable present cash value of the nonmoney consideration for the issue; and(c)that, in their opinion, the present cash value of the nonmoney consideration for the issue is not less than the amount to be credited for the issueof the shares.15.A share issued by the Company upon conversion of, or in exchange for, another share or a debt obligation or other security in the Company, shall betreated for all purposes as having been issued for money equal to the consideration received or deemed to have been received by the Company in respectof the other share, debt obligation or security.16.Treasury shares may be disposed of by the Company on such terms and conditions (not otherwise inconsistent with these Articles) as the Company mayby resolution of directors determine.17.Subject to these Articles, the Company may purchase, redeem or otherwise acquire and hold its own shares save that the Company may not purchase,redeem or otherwise acquire its own shares without the consent of the member whose shares are to be purchased, redeemed or otherwise acquired unlessthe Company is permitted by the Act or any other provision in the Memorandum or Articles to purchase, redeem or otherwise acquire the shares withouttheir consent.818.No purchase, redemption or other acquisition of shares shall be made unless the directors determine by resolution of the directors that immediately after thepurchase, redemption or other acquisition the value of the Company’s assets will exceed its liabilities and the Company will be able to pay its debts as theyfall due.19.Sections 60 (Process for acquisition of own shares), 61 (Offer to one or more shareholders) and 62 (Shares redeemed otherwise than at the option ofcompany) of the Act shall not apply to the Company.20.A determination by the directors under Article 18 is not required;(a)the Company redeems a share or shares pursuant to a right of a member to have his shares redeemed or to have his shares exchanged for moneyor other property of the Company; or(b)by virtue of the provisions of Section 179 of the Act.21.Shares that the Company purchases, redeems or otherwise acquires pursuant to Article 17 may be cancelled or held as treasury shares except to the extentthat such shares are in excess of 80 percent of the issued shares of the Company in which case they shall be cancelled but they shall be available forreissue.22.Shares in the Company shall only be held as treasury shares where the directors of the Company resolve as such and the number of shares acquired, whenaggregated with shares of the same class already held by the Company as treasury shares, does not exceed 50% of the shares of that class previouslyissued by the Company, excluding shares that have been cancelled. All rights and obligations attaching to a treasury share are suspended and shall not beexercised by or against the Company while it holds the share as a treasury share. Treasury shares may be reissued by the Company as new shares.23.The Company shall keep a register of members containing;(a)the names and addresses of the persons who hold registered shares in the Company;(b)the number of each class and series of registered shares held by each member;(c)the date on which the name of each member was entered in the register of members;(d)the date on which any person ceased to be a member; and(e)such other information as may be prescribed pursuant to the Act.24.The register of members may be in any such form as the directors may approve but if it is in magnetic, electronic or other data storage form, the companymust be able to produce legible evidence of its contents.25.The original or a copy of the register of members shall be kept at the registered office of the Company or at the office of the registered agent of theCompany.26.A share is deemed to be issued when the name of the member is entered in the register of members.27.Subject to the Act and the rules of the Designated Stock Exchange, the board of directors without further consultation with the holders of any shares orSecurities may resolve that any class or series of shares or other Securities from time to time in issue or to be issued (including shares in issue at the date ofthe adoption of these Articles) may be issued, held, registered and converted to uncertificated form.28.Conversion of shares held in certificated form into shares held in uncertificated form, and vice versa, may be made in such manner as the board of directors,in its absolute discretion, may think fit. The Company or any duly authorised transfer agent (a “Transfer Agent”) shall enter on the register of membershow many shares are held by each member in uncertificated form and in certificated form and shall maintain the register of members. Notwithstanding anyprovision of these Articles, a class or series of shares shall not be treated as two classes by virtue only of that class or series comprising both certificatedshares and uncertificated Shares or as a result of any provision of these Articles which apply only in respect of certificated or uncertificated shares.9MORTGAGES AND CHARGES OF REGISTERED SHARES29.Members may mortgage or charge their registered shares in the Company with such mortgage or charge being evidenced in writing and signed by, or withthe authority of the registered holder of a registered share to which the mortgage or charge relates. The Company shall give effect to the terms of any validmortgage or charge except insofar as it may conflict with any requirements herein contained for consent to the transfer of shares.30.In the case of the mortgage or charge of registered shares there may be entered in the share register of the Company at the request of the registered holderof such shares(a)a statement that the shares are mortgaged or charged;(b)the name of the mortgagee or chargee; and(c)the date on which the aforesaid particulars are entered in the share register.31.Where particulars of a mortgage or charge are entered in the register of members, such particulars shall be cancelled(a)with the written consent of the named mortgagee or chargee or anyone authorized to act on his behalf; or(b)upon evidence satisfactory to the directors of the discharge of the liability secured by the mortgage or charge and the issue of such indemnities asthe directors shall consider necessary or desirable.32.Whilst particulars of a mortgage or charge over registered shares are entered in the register of members pursuant to the preceding articles no transfer ofany share comprised therein shall be effected without the written consent of the named mortgagee or chargee or anyone authorized to act on his behalf.FORFEITURE33.When shares not fully paid on issue or issued for a promissory note or other written obligation for payment of a debt have been issued subject toforfeiture, the following provisions shall apply.34.Written notice specifying a date for payment to be made and the shares in respect of which payment is to be made shall be served on the member whodefaults in making payment pursuant to a promissory note or other written obligations to pay a debt.35.The written notice specifying a date for payment shall(a)name a further date not earlier than the expiration of 14 days from the date of service of the notice on or before which payment required by thenotice is to be made; and(b)contain a statement that in the event of nonpayment at or before the time named in the notice the shares, or any of them, in respect of whichpayment is not made will be liable to be forfeited.36.Where a written notice has been issued and the requirements of the notice have not been complied with within the prescribed time, the directors may at anytime before tender of payment forfeit and cancel the shares to which the notice relates.37.The Company is under no obligation to refund any moneys to the member whose shares have been forfeited and cancelled pursuant to these provisions.Upon forfeiture and cancellation of the shares the member is discharged from any further obligation to the Company with respect to the shares forfeitedand cancelled.10LIEN38.The Company shall have a first and paramount lien on every share issued for a promissory note or for any other binding obligation to contribute money orproperty or any combination thereof to the Company, and the Company shall also have a first and paramount lien on every share standing registered in thename of a member, whether singly or jointly with any other person or persons, for all the debts and liabilities of such member or his estate to the Company,whether the same shall have been incurred before or after notice to the Company of any interest of any person other than such member, and whether thetime for the payment or discharge of the same shall have actually arrived or not, and notwithstanding that the same are joint debts or liabilities of suchmember or his estate and any other person, whether a member of the Company or not. The Company’s lien on a share shall extend to all distributionspayable thereon. The directors may at any time either generally, or in any particular case, waive any lien that has arisen or declare any share to be wholly orin part exempt from the provisions of this Article.39.In the absence of express provisions regarding sale in the promissory note or other binding obligation to contribute money or property, the Company maysell, in such manner as the directors may by resolution of directors determine, any share on which the Company has a lien, but no sale shall be made unlesssome sum in respect of which the lien exists is presently payable nor until the expiration of twentyone days after a notice in writing, stating and demandingpayment of the sum presently payable and giving notice of the intention to sell in default of such payment, has been served on the holder for the timebeing of the share.40.The net proceeds of the sale by the Company of any shares on which it has a lien shall be applied in or towards payment of discharge of the promissorynote or other binding obligation to contribute money or property or any combination thereof in respect of which the lien exists so far as the same ispresently payable and any residue shall (subject to a like lien for debts or liabilities not presently payable as existed upon the share prior to the sale) bepaid to the holder of the share immediately before such sale. For giving effect to any such sale the directors may authorize some person to transfer theshare sold to the purchaser thereof. The purchaser shall be registered as the holder of the share and he shall not be bound to see to the application of thepurchase money, nor shall his title to the share be affected by any irregularity or invalidity in the proceedings in reference to the sale.TRANSFER OF SHARES41.Registered shares in the Company are transferred by a written instrument of transfer signed by the transferor and containing the name and address of thetransferee. The instrument of transfer shall be signed by the transferee if registration as a holder of the share shall impose a liability to the Company on thetransferee. The instrument of transfer of a registered share shall be sent to the Company for registration.42.The board of directors may resolve that interests in shares in the form of depositary receipts may be transferred or otherwise dealt with in accordance withthe regulations and practices instituted by the operator of the Relevant System and any holder of interests in shares shall be entitled to transfer suchinterests by means of such Relevant System and the operator of the Relevant System shall act as agent of the holders of such interests for the purposes ofthe transfer of those interests.43.The register of members may be closed at such times and for such periods as the board of directors may from time to time determine, upon notice beinggiven by advertisement in such newspapers as may be required by the Act and the practice of the Designated Stock Exchange.44.The transfer of a registered share is effective when the name of the transferee is entered on the register of members.45.If the directors of the Company are satisfied that an instrument of transfer relating to shares has been signed but that the instrument has been lost ordestroyed, they may resolve;(a)to accept such evidence of the transfer of the shares as they consider appropriate; and(b)that the transferee’s name should be entered in the register of members notwithstanding the absence of the instrument of transfer.46.The Company must on the receipt of an instrument of transfer from the transferor or transferee of a registered share in the Company enter the name of thetransferee of the share in the register or members unless the directors, if permitted by the Memorandum or these Articles, resolve by resolution of directorsto refuse or delay the registration of the transfer for reasons that shall be specified in the resolution of directors.11TRANSMISSION OF SHARES47.The personal representative of a deceased member may transfer a share even though the personal representative is not a member at the time of the transfer.48.The personal representative, executor or administrator of a deceased member, the guardian of an incompetent member or the trustee of a bankrupt membershall be the only person recognized by the Company as having any title to his share but they shall not be entitled to exercise any rights as a member of theCompany until they have proceeded as set forth in the next following three Articles.49.The production to the Company of any document which is evidence of probate of the will, or letters of administration of the estate, or confirmation asexecutor, of a deceased member or of the appointment of a guardian of an incompetent member or the trustee of a bankrupt member shall be accepted by theCompany even if the deceased, incompetent or bankrupt member is domiciled outside the British Virgin Islands if the document evidencing the grant ofprobate or letters of administration, confirmation as executor, appointment as guardian or trustee in bankruptcy is issued by a foreign court which hadcompetent jurisdiction in the matter. For the purpose of establishing whether or not a foreign court had competent jurisdiction in such a matter the directorsmay obtain appropriate legal advice. The directors may also require an indemnity to be given by the executor, administrator, guardian or trustee inbankruptcy.50.The Company may enter in the register of members the name of any person becoming entitled by operation of law or otherwise to a share or shares inconsequence of the death, incompetence or bankruptcy upon such evidence being produced as may reasonably be required by the directors.51.Any person who has become entitled to a share or shares in consequence of the death, incompetence or bankruptcy of any member may, instead of beingregistered himself, request in writing that some person to be named by him be registered as the transferee of such share or shares and such request shalllikewise be treated as if it were a transfer.52.What amounts to incompetence on the part of a person is a matter to be determined by the court having regard to all the relevant evidence and thecircumstances of the case.REDUCTION OR INCREASE IN AUTHORISED AND UNISSUED SHARES48.The Company may amend the Memorandum to increase or reduce the maximum number of shares the Company is authorised to issue and may in respect ofany unissued shares increase or reduce the number of such shares, or effect any combination of the foregoing.49.The Company may(1)(a) divide its shares, including issued shares, into a larger number of shares; or (b) combine its shares, including issued shares, into a smallernumber of shares.(2)A division or combination of shares, including issued shares, of a class or series shall be for a larger or smaller number, as the case may be, ofshares in the same class or series.(3)A company shall not divide its shares under subsection (1)(a) or (2) if it would cause the maximum number of shares that the Company isauthorised to issue by its memorandum to be exceeded.(4)Where shares are divided or combined under this article, the aggregate par value of the new shares must be equal to the aggregate par value of theoriginal shares.MEETINGS AND CONSENTS OF MEMBERS50.The directors of the Company may convene meetings of the members of the Company at such times and in such manner and places within or outside theBritish Virgin Islands as the directors consider necessary or desirable. The Company may hold an annual general meeting, but shall not (unless required bythe applicable rules of the Designated Stock Exchange for so long as the Company’s Securities are listed or traded on the Designated Stock Exchange) beobliged to hold an annual general meeting.51.Upon the written request of members holding 30 percent or more of the outstanding voting shares in the Company the directors shall convene a meeting ofmembers.1252.The directors shall give not less than 7 days notice of meetings of members to those persons whose names on the date the notice is given appear asmembers in the share register of the Company and are entitled to vote at the meeting.53.The directors may fix the date notice is given of a meeting of members as the record date for determining those shares that are entitled to vote at themeeting.54.A meeting of members may be called on short notice:(a)if members holding not less than 90 percent of the total number of shares entitled to vote on all matters to be considered at the meeting, or 90percent of the votes of each class or series of shares where members are entitled to vote thereon as a class or series together with not less than a90 percent majority of the remaining votes, have agreed to short notice of the meeting, or(b)if all members holding shares entitled to vote on all or any matters to be considered at the meeting have waived notice of the meeting and for thispurpose presence at the meeting shall be deemed to constitute waiver.55.The inadvertent failure of the directors to give notice of a meeting to a member, or the fact that a member has not received notice, does not invalidate themeeting.56.A member may be represented at a meeting of members by a proxy who may speak and vote on behalf of the member.57.The instrument appointing a proxy shall be produced at the place appointed for the meeting before the time for holding the meeting at which the personnamed in such instrument proposes to vote.58.An instrument appointing a proxy shall be in substantially the following form or such other form as the Chairman of the meeting shall accept as properlyevidencing the wishes of the member appointing the proxy.(Name of Company)I/Webeing a member of the aboveCompany withshares HEREBY APPOINTofor failing himofto be my/our proxy to vote for me/us at the meeting of members to be held on the dayofand at any adjournment thereof.(Any restrictions on voting to be inserted here.)Signed this day ofMember59.The following shall apply in respect of joint ownership of shares:a.if two or more persons hold shares jointly each of them may be present in person or by proxy at a meeting of members and may speak as a member;b.if only one of the joint owners is present in person or by proxy he may vote on behalf of all joint owners, andc.if two or more of the joint owners are present in person or by proxy they must vote as one.60.A member shall be deemed to be present at a meeting of members if he participates by telephone or other electronic means and all members participating inthe meeting are able to hear each other.61.A meeting of members is duly constituted if, at the commencement of the meeting, there are present in person or by proxy not less than 50 percent of thevotes of the shares or class or series of shares entitled to vote on resolutions of members to be considered at the meeting. If a quorum be present,notwithstanding the fact that such quorum may be represented by only one person then such person may resolve any matter and a certificate signed bysuch person accompanied where such person be a proxy by a copy of the proxy form shall constitute a valid resolution of members.1362.If within two hours from the time appointed for the meeting a quorum is not present, the meeting, if convened upon the requisition of members, shall bedissolved; in any other case it shall stand adjourned to the next business day at the same time and place or to such other time and place as the directorsmay determine, and if at the adjourned meeting there are present within one hour from the time appointed for the meeting in person or by proxy not lessthan one third of the votes of the shares or each class or series of shares entitled to vote on the resolutions to be considered by the meeting, those presentshall constitute a quorum but otherwise the meeting shall be dissolved.63.At every meeting of members, the Chairman of the Board of Directors shall preside as chairman of the meeting. If there is no Chairman of the Board ofDirectors or if the Chairman of the Board of Directors is not present at the meeting, the members present shall choose some one of their number to be thechairman. If the members are unable to choose a chairman for any reason, then the person representing the greatest number of voting shares present inperson or by prescribed form of proxy at the meeting shall preside as chairman failing which the oldest individual member or representative of a memberpresent shall take the chair.64.The chairman may, with the consent of the meeting, adjourn any meeting from time to time, and from place to place, but no business shall be transacted atany adjourned meeting other than the business left unfinished at the meeting from which the adjournment took place.65.At any meeting of the members the chairman shall be responsible for deciding in such manner as he shall consider appropriate whether any resolution hasbeen carried or not and the result of his decision shall be announced to the meeting and recorded in the minutes thereof. If the chairman shall have anydoubt as to the outcome of any resolution put to the vote, he shall cause a poll to be taken of all votes cast upon such resolution, but if the chairman shallfail to take a poll then any member present in person or by proxy who disputes the announcement by the chairman of the result of any vote mayimmediately following such announcement demand that a poll be taken and the chairman shall thereupon cause a poll to be taken. If a poll is taken at anymeeting, the result thereof shall be duly recorded in the minutes of that meeting by the chairman.66.Any person other than an individual shall be regarded as one member and subject to the specific provisions hereinafter contained for the appointment ofrepresentatives of such persons the right of any individual to speak for or represent such member shall be determined by the law of the jurisdiction where,and by the documents by which, the person is constituted or derives its existence. In case of doubt, the directors may in good faith seek legal advice fromany qualified person and unless and until a court of competent jurisdiction shall otherwise rule, the directors may rely and act upon such advice withoutincurring any liability to any member.67.Any person other than an individual which is a member of the Company may by resolution of its directors or other governing body authorize such personas it thinks fit to act as its representative at any meeting of the Company or of any class of members of the Company, and the person so authorized shall beentitled to exercise the same powers on behalf of the person which he represents as that person could exercise if it were an individual member of theCompany.68.The chairman of any meeting at which a vote is cast by proxy or on behalf of any person other than an individual may call for a notarially certified copy ofsuch proxy or authority which shall be produced within 7 days of being so requested or the votes cast by such proxy or on behalf of such person shall bedisregarded.69.Directors of the Company may attend and speak at any meeting of members of the Company and at any separate meeting of the holders of any class orseries of shares in the Company.70.An action that may be taken by the members at a meeting may also be taken by a resolution of members consented to in writing or by telex, telegram, cable,facsimile or other written electronic communication, without the need for any notice, but if any resolution of members is adopted otherwise than by theunanimous written consent of all members, a copy of such resolution shall forthwith be sent to all members not consenting to such resolution. The consentmay be in the form of counterparts, each counterpart being signed by one or more members.14DIRECTORS71.The first directors of the Company shall be appointed by the first registered agent of the Company and thereafter the directors shall be appointed byresolution of members, subject to Article 78, for such term as the members determine. A person shall not be appointed as a director unless he hasconsented in writing to be a director.72.The minimum number of directors shall be one and the maximum number shall be 20. Unless otherwise determined by the Company in a meeting ofshareholders and subject to the requirements of the Memorandum, the directors may by a Resolution of Directors, amend this Regulation 72 to change thenumber of directors. For as long as Securities of the Company are listed or traded on the Designated Stock Exchange, the directors shall include suchnumber of Independent Directors as applicable law, rules or regulations of the Designated Stock Exchange may require for a foreign private issuer as longas the Company is a foreign private issuer.73.Each director shall hold office for the term, if any, fixed by resolution of members or until his earlier death, resignation or removal.74.Where the Company has only one member who is an individual and that member is also the sole director of the Company, that sole member/director may, byinstrument in writing, nominate a person who is not disqualified from being a director of the Company under section 111(1) of the Act as a reserve directorof the Company to act in the place of the sole director in the event of his death.75.The nomination of a person as a reserve director of the Company ceases to have effect if;a.before the death of the sole member/director who nominated him;(i)he resigns as reserve director, or(ii)the sole member/director revokes the nomination in writing; orb.the sole member/director who nominated him ceases to be the sole member/director of the Company for any reason other than his death.76.A director may be removed from office, with or without cause, by a resolution of directors or a resolution of members. For the purposes of this Regulation76, “cause” means the willful and continuous failure by a director to substantially perform his duties to the Company (other than any such failure resultingfrom incapacity due to physical or mental illness) or the willful engaging by the director in gross misconduct materially and demonstrably injurious to theCompany. If a director is removed from office without cause by a resolution of the members, for the purposes of this Regulation, the resolution of memberswill require the affirmative vote of the holders of 66 2/3 percent or more of the outstanding votes of the shares entitled to vote thereon.77.A director may resign his office by giving written notice of his resignation to the Company and the resignation shall have effect from the date the notice isreceived by the Company or from such later date as may be specified in the notice. A director of the Company shall resign forthwith if he is, or becomes,disqualified to act as a director under the Act.78.The directors may at any time by resolution of directors appoint any person to be a director to fill a vacancy. There is a vacancy if a director dies orotherwise ceases to hold office as a director prior to the expiration of his term of office, where his term of office was fixed upon his appointment. Thedirectors may not appoint a director to fill a vacancy for a term exceeding the term that remained when the person who has ceased to be a director left orotherwise ceased to hold office.79.The Company shall keep a register of directors containing:a.the names and addresses of the persons who are directors of the Company or who have been nominated as reserve directors of the Company;b.the date on which each person whose name is entered in the register was appointed as a director of the Company or nominated as a reservedirector of the Company;c.the date on which each person named as a director ceased to be a director of the Company;d.the date on which the nomination of any person nominated as a reserve director ceased to have effect; ande.such other information as may be prescribed pursuant to the Act.1580.The original or a copy of any register of directors shall be kept at the office of the registered agent of the Company.81.The register of directors may be in any such form as the directors may approve but if it is in magnetic, electronic or other data storage form, the companymust be able to produce legible evidence of its contents.82.With the prior or subsequent approval by a resolution of members, the directors may, by a resolution of directors, fix the emoluments of directors withrespect to services to be rendered in any capacity to the Company.83.A director shall not require a share qualification and may be an individual or a company.POWERS OF DIRECTORS84.The business and affairs of the Company shall be managed by the directors who may pay all expenses incurred preliminary to and in connection with theformation and registration of the Company and may exercise all such powers of the Company as are not by the Act or by the Memorandum or theseArticles required to be exercised by the members of the Company, subject to any delegation of such powers as may be authorized by these Articles and tosuch requirements as may be prescribed by a resolution of members; but no requirement made by a resolution of members shall prevail if it be inconsistentwith these Articles nor shall such requirement invalidate any prior act of the directors which would have been valid if such requirement had not been made.Notwithstanding anything in Section 175 of the Act the directors shall have the power to sell, transfer, lease, exchange or otherwise dispose of more thanfifty percent of the assets of the Company without submitting a proposal to or obtaining the consent of the members of the Company.85.If the Company is a whollyowned subsidiary of a holding company a director may when exercising powers or performing duties as a director act in amanner which he believes is in the best interests of the holding company even though it may not be in the best interests of the Company.86.The directors may, by a resolution of directors, appoint any person, including a person who is a director, to be an officer or agent of the Company. Theresolution of directors appointing an agent may authorize the agent to appoint one or more substitutes or delegates to exercise some or all of the powersconferred on the agent by the Company.87.Every officer or agent of the Company has such powers and authority of the directors, including the power and authority to affix the Seal, as are set forth inthese Articles or in the resolution of directors appointing the officer or agent, except that no agent has any power or authority with respect to thefollowing;a.to amend the memorandum or articles;b.to change the registered office or agent;c.to designate committees of directors;d.to delegate powers to a committee of directors;e.to appoint or remove directors;f.to appoint or remove an agent;g.to fix emoluments of directors;h.to approve a plan of merger, consolidation or arrangement;i.to make a declaration of solvency for the purposes of section 198(1)(a) of the Act or to approve a liquidation plan;j.to make a determination under section 57(1) of the Act that the company will, immediately after a proposed distribution, satisfy the solvency test;ork.to authorise the Company to continue as a company incorporated under the laws of a jurisdiction outside the British Virgin Islands.1688.Any director which is a body corporate may appoint any person its duly authorized representative for the purpose of representing it at meetings of theBoard of Directors or with respect to unanimous written consents.89.The continuing directors may act notwithstanding any vacancy in their body, save that if their number is reduced to their knowledge below the numberfixed by or pursuant to these Articles as the necessary quorum for a meeting of directors, the continuing directors or director may act only for the purposeof appointing directors to fill any vacancy that has arisen or for summoning a meeting of members.90.The directors may by resolution of directors exercise all the powers of the Company to borrow money and to mortgage or charge its undertakings andproperty or any part thereof, to issue debentures, debenture stock and other securities whenever money is borrowed or as security for any debt, liability orobligation of the Company or of any third party.91.All cheques, promissory notes, drafts, bills of exchange and other negotiable instruments and all receipts for moneys paid to the Company, shall be signed,drawn, accepted, endorsed or otherwise executed, as the case may be, in such manner as shall from time to time be determined by resolution of directors.92.The Company shall keep a register of all relevant charges created by the Company showing:a.if the charge is a charge created by the Company, the date of its creation or if the charge is existing on property acquired by the Company, the dateon which the property was acquired;b.a short description of the liability secured by the charge;c.a short description of the property charged;d.the name and address of the trustee for the security, or if there is no such trustee the name and address of the chargee;e.unless the charge is a security to bearer, the name and address of the holder of the charge;f.details of any prohibition or restriction , if any, contained in the instrument creating the charge on the power of the company to create any futurecharge ranking in priority to or equally with the charge; andg.such other information as may be prescribed pursuant to the Act.93.The original or a copy of the register of charges shall be kept at the registered office of the Company or at the office of the registered agent of the Company.PROCEEDINGS OF DIRECTORS94.The directors of the Company or any committee thereof may meet at such times and in such manner and places within or outside the British Virgin Islandsas the directors may determine to be necessary or desirable. Any one or more directors may convene a meeting of directors.95.A director shall be deemed to be present at a meeting of directors if he participates by telephone or other electronic means and all directors participating inthe meeting are able to hear each other.96.A director shall be given not less than 3 days notice of meetings of directors, but a meeting of directors held without 3 days notice having been given to alldirectors shall be valid if all the directors entitled to vote at the meeting who do not attend, waive notice of the meeting and for this purpose, the presenceof a director at a meeting shall constitute waiver on his part. The inadvertent failure to give notice of a meeting to a director, or the fact that a director hasnot received the notice, does not invalidate the meeting.1797.A director may by a written instrument appoint an alternate who need not be a director and an alternate is entitled to attend meetings in the absence of thedirector who appointed him and to vote or consent in place of the director.98.A meeting of directors is duly constituted for all purposes if at the commencement of the meeting there are present in person or by alternate not less thanone half of the total number of directors, unless there are only 2 directors in which case the quorum shall be 2.99.If the Company shall have only one director the provisions herein contained for meetings of the directors shall not apply but such sole director shall havefull power to represent and act for the Company in all matters as are not by the Act or the Memorandum or these Articles required to be exercised by themembers of the Company and in lieu of minutes of a meeting shall record in writing and sign a note or memorandum of all matters requiring a resolution ofdirectors. Such a note or memorandum shall constitute sufficient evidence of such resolution for all purposes.100.At every meeting of the directors the Chairman of the Board of Directors shall preside as chairman of the meeting. If there is no Chairman of the Board ofDirectors or if the Chairman of the Board of Directors is not present at the meeting the Vice Chairman of the Board of Directors shall preside. If there is noVice Chairman of the Board of Directors or if the Vice Chairman of the Board of Directors is not present at the meeting the directors present shall choosesome one of their number to be chairman of the meeting.101.An action that may be taken by the directors or a committee of directors at a meeting may also be taken by a resolution of directors or a committee ofdirectors consented to in writing or by telex, telegram, cable, facsimile or other written electronic communication by all directors or all members of thecommittee as the case may be, without the need for any notice. The consent may be in the form of counterparts, each counterpart being signed by one ormore directors.102.The directors shall cause the following records to be kept:a.minutes of all meetings of directors, members, committees of directors and committees of members; andb.copies of all resolutions consented to by directors, members, committees of directors and committees of members.103.The resolutions, records and minutes referred to in the preceding Article shall be kept at the registered office of the Company, its principal place ofbusiness or at such other place as the directors determine.104.The directors may, by resolution of directors, designate one or more committees, each consisting of one or more directors.105.Subject to the following Article, each committee of directors has such powers and authorities of the directors, including the power and authority to affix theSeal, as are set forth in the resolution of directors establishing the committee.106.The directors have no power to delegate the following powers to a committee of directors;a.to amend the memorandum or articles;b.to change the registered office or agent;c.to designate committees of directors;d.to delegate powers to a committee of directors;e.to appoint or remove directors;f.to appoint or remove an agent;g.to fix emoluments of directors;18h.to approve a plan of merger, consolidation or arrangement;i.to make a declaration of solvency for the purposes of section 198(1)(a) or to approve a liquidation plan;j.to make a determination under section 57(1) that the company will, immediately after a proposed distribution, satisfy the solvency test; ork.to authorise the company to continue as a company incorporated under the laws of a jurisdiction outside the British Virgin Islands.Paragraphs (c) and (d) do not prevent a committee of directors, where authorised by the directors, from appointing a subcommittee and delegating powersexercisable by the committee to the subcommittee.107.The meetings and proceedings of each committee of directors consisting of 2 or more directors shall be governed mutatis mutandis by the provisions ofthese Articles regulating the proceedings of directors so far as the same are not superseded by any provisions in the resolution establishing the committee.108.Without prejudice to the freedom of the directors to establish any other committee, if the shares (or depositary receipts therefore) are listed or quoted onthe Designated Stock Exchange, and if required by the Designated Stock Exchange, the directors shall establish and maintain an audit committee as acommittee of the board of directors, the composition and responsibilities of which shall comply with the rules and regulations of the SEC and theDesignated Stock Exchange. The audit committee shall meet at least once every financial quarter, or more frequently as circumstances dictate.109.The Company shall adopt a formal written audit committee charter and review and assess the adequacy of the formal written charter on an annual basis.The charter shall specify the responsibilities of the Audit Committee which shall include responsibility for, among other things, ensuring its receipt from theoutside auditors of the Company of a formal written statement delineating all relationships between the auditor and the Company, and the AuditCommittee’s responsibility for actively engaging in a dialogue with the auditor with respect to any disclosed relationships or services that may impact theobjectivity and independence of the auditor take appropriate action to oversee the independence of the outside auditor. In addition, the Audit Committee isresponsible for reviewing potential conflict of interest situations and approving all Related Party Transactions.110.Without prejudice to the freedom of the directors to establish any other committees, the Board may establish a Stock Option Committee to administer theCompany’s stock option plans, including authority to make and modify awards under such plans. For so long as the Securities of the Company are listed ortraded on the Designated Stock Exchange, the Stock Option Committee shall have at least two Independent Directors. The Stock Option Committee willadminister the Company’s stock option plans, including the authority to make and modify awards under such plans.111.Without prejudice to the freedom of the directors to establish any other committees, the Board may establish a Nominating Committee to assist the Board inidentifying qualified individuals to become members of the Board.OFFICERS112.The Company may by resolution of directors appoint officers of the Company at such times as shall be considered necessary or expedient. Such officersmay consist of a Chairman of the Board of Directors, a Vice Chairman of the Board of Directors, a President and one or more Vice Presidents, Secretaries andTreasurers and such other officers as may from time to time be deemed desirable. Any number of offices may be held by the same person.113.The officers shall perform such duties as shall be prescribed at the time of their appointment subject to any modification in such duties as may beprescribed thereafter by resolution of directors or resolution of members, but in the absence of any specific allocation of duties it shall be the responsibilityof the Chairman of the Board of Directors to preside at meetings of directors and members, the Vice Chairman to act in the absence of the Chairman, thePresident to manage the day to day affairs of the Company, the Vice Presidents to act in order of seniority in the absence of the President but otherwise toperform such duties as may be delegated to them by the President, the Secretaries to maintain the share register, minute books and records (other thanfinancial records) of the Company and to ensure compliance with all procedural requirements imposed on the Company by applicable law, and the Treasurerto be responsible for the financial affairs of the Company.19114.Subject to the rules of the Designated Stock Exchange, the emoluments of all officers shall be fixed by resolution of directors.115.The officers of the Company shall hold office until their successors are duly elected and qualified, but any officer elected or appointed by the directors maybe removed at any time, with or without cause, by resolution of directors. Any vacancy occurring in any office of the Company may be filled by resolutionof directors.CONFLICT OF INTERESTS116.A director of the Company shall, forthwith after becoming aware of the fact that he is interested in a transaction entered into or to be entered into by theCompany, disclose the interest to all other directors of the Company.117.A director of the Company is not required to comply with Article 112 if;a.the transaction or proposed transaction is between the director and the Company; andb.the transaction or proposed transaction is or is to be entered into in the ordinary course of the company’s business and on usual terms andconditions.118.For the purposes of Article 112 a disclosure to all other directors to the effect that a director is a member, director or officer of another named entity or has afiduciary relationship with respect to the entity or a named individual and is to be regarded as interested in any transaction which may, after the date of theentry or disclosure, be entered into with that entity or individual, is a sufficient disclosure of interest in relation to that transaction.119.A.A director of the Company who is interested in a transaction entered into or to be entered into by the Company may:(i)vote on a matter relating to the transaction;(ii)attend a meeting of directors at which a matter relating to the transaction arises and be included among the directors present at the meeting for thepurposes of a quorum; and(iii)sign a document on behalf of the Company, or do any other thing in his capacity as a director, that relates to the transaction,and, subject to compliance with the Act shall not, by reason of his office be accountable to the Company for any benefit which he derives from suchtransaction and no such transaction shall be liable to be avoided on the grounds of any such interest or benefit.119.B.For so long the Securities of the Company are listed or traded on the Designated Stock Exchange, the Company shall conduct an appropriate review of allmaterial Related Party Transactions on an ongoing basis and shall utilize the Audit Committee for the review and approval of potential conflicts of interestsituations.INDEMNIFICATION120.Subject to the limitations hereinafter provided the Company may indemnify against all expenses, including legal fees, and against all judgments, fines andamounts paid in settlement and reasonably incurred in connection with legal, administrative or investigative proceedings any person who;a.is or was a party or is threatened to be made a party to any threatened, pending or completed proceedings, whether civil, criminal, administrative orinvestigative, by reason of the fact that the person is or was a director, an officer or a liquidator of the Company; orb.is or was, at the request of the Company, serving as a director of, or in any other capacity is or was acting for, another body corporate or apartnership, joint venture, trust or other enterprise.20121.The Company may only indemnify a person if the person acted honestly and in good faith in what he believed to be in the best interests of the Companyand, in the case of criminal proceedings, the person had no reasonable cause to believe that his conduct was unlawful.122.For the purposes of the preceding Article, a director acts in the best interests of the Company if he acts in the best interests of;a.the Company’s holding company; orb.a shareholder or shareholders of the Company; in either case, in the circumstances specified in Article 85.123.The decision of the directors as to whether the person acted honestly and in good faith and with a view to the best interests of the Company and as towhether the person had no reasonable cause to believe that his conduct was unlawful is, in the absence of fraud, sufficient for the purposes of theseArticles, unless a question of law is involved.124.The termination of any proceedings by any judgment, order, settlement, conviction or the entering of a nolle prosequi does not, by itself, create apresumption that the person did not act honestly and in good faith and with a view to the best interests of the Company or that the person had reasonablecause to believe that his conduct was unlawful.Consolidated Statements of Changes in Stockholder’s EquityF5Consolidated Statements of Cash FlowsF6Notes to Consolidated Financial StatementsF7 F22F1REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRMTo the Shareholder and the Sole Director ofLK Technology Ltd.Opinion on the Consolidated Financial StatementsWe have audited the accompanying consolidated balance sheets of LK Technology Ltd. and. subsidiaries (the “Company”) as of December 31, 2017 and 2016, andthe related consolidated statements of operations and comprehensive loss, changes in shareholder’s equity and cash flows for each of the years then ended, andthe related notes (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in allmaterial respects, the consolidated financial position of the Company as of December 31, 2017 and 2016, and the consolidated results of its operations and its cashflows for each of the years then ended, in conformity with accounting principles generally accepted in the United States of America.Basis for OpinionThese consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’sconsolidated financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (UnitedStates) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules andregulations of the Securities and Exchange Commission and the PCAOB.We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonableassurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have,nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internalcontrol over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting.Accordingly, we express no such opinion.An independent member firm of Moore Stephens International Limited – members in principal cities throughout the worldOur audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, andperforming procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in theconsolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well asevaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion.Certified Public AccountantsWe have served as the Company’s auditor since 2018.Hong KongMay 25, 2018F2LK TECHNOLOGY LTD. AND SUBSIDIARIESCONSOLIDATED BALANCE SHEETS(IN U.S. DOLLARS)As of December 31,20172016AssetsCurrent assets:Cash and cash equivalents$72,379$83,843Accounts receivable, net of allowance for doubtful accounts9,729,6251,865,836Other receivables and prepayment2,376,7452,287,934Amounts due from related parties11,760,692Total current assets23,939,4414,237,613Property and equipment, net5,044,8727,771,027Intangible assets, net1,154,1971,682,445Goodwill7,239,9367,239,936Amount due from a related party204,412183,811TOTAL ASSETS37,582,85821,114,832LiabilitiesCurrent liabilities:Accounts payable8,784,5186,446,584Accrued liabilities and other payables12,962,91211,329,613Amounts due to related parties3,563,68316,129,323Total current liabilities25,311,11333,905,520Total liabilities25,311,11333,905,520Commitments and contingenciesShareholder’s Equity (Deficit)Share capitalCommon stock, $1 par value per share; 50,000 shares authorized as of December 31, 2017 and 2016, 1 share issued andoutstanding as of December 31, 2017 and 201611Additional paidin capital41,819,68510,037,469Accumulated deficit(29,936,158)(23,125,704)Accumulated other comprehensive income (loss)388,217297,546Total Shareholder’s Equity (Deficit)12,271,745(12,790,688)TOTAL LIABILITIES AND SHAREHOLDER’S EQUITY (DEFICIT)$37,582,858$21,114,832F3LK TECHNOLOGY LTD. AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS(IN U.S. DOLLARS)For the years endedDecember 31,20172016Revenues$26,082,417$5,233,145Less: Cost of revenues5,547,7796,315,504Less: Operating expenses:Selling and marketing23,908,7336,209,804General and administrative2,451,2492,108,854Research and development1,046,1982,882,202Total operating expenses27,406,18011,200,860Loss from operations(6,871,542)(12,283,219)Other income (expense):Interest expense(26,611)(4,412)Foreign exchange gains (losses)350,679(298,257)Loss from investment(428,571)Other income (expense), net(262,980)(34,572)Total other income (expense), net61,088(765,812)Loss before income taxes(6,810,454)(13,049,031)Income taxesNet loss$(6,810,454)$(13,049,031)Other comprehensive income:Foreign currency translation adjustment90,671387,375Total comprehensive loss$(6,719,783)$(12,661,656)F4LK TECHNOLOGY LTD. AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDER’S EQUITY(IN U.S. DOLLARS)Accumulated otherTotalOrdinary sharesAdditionalpaidin AccumulatedcomprehensiveIncomeShareholder’sEquity SharesAmountcapitaldeficits(loss)(Deficit)Balance as of December 31, 20151$ 1$8,250,505$(10,076,673)$(89,829)$(1,915,996)Capital contribution from C Media1,786,9641,786,964Net loss(13,049,031)(13,049,031)Foreign currency translation adjustment387,375387,375Balance as of December 31, 20161110,037,469(23,125,704)297,546(12,790,688)Capital contribution from C Media31,782,21631,782,216Net loss(6,810,454)(6,810,454)Foreign currency translation adjustment90,67190,671Balance as of December 31, 20171$1$41,819,685$(29,936,158)$388,217$12,271,745F5LK TECHNOLOGY LTD. AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF CASH FLOWS(IN U.S. DOLLARS)For the years endedDecember 31,20172016CASH FLOWS FROM OPERATING ACTIVITIES:Net loss$(6,810,454)$(13,049,031)Depreciation and amortization3,316,1813,245,161Loss on disposal of property and equipment115,19373,022Increase in allowance for doubtful accounts445,39562,591Changes in assets and liabilitiesAccounts receivable(7,933,730)(1,507,296)Other receivables and prepayment(2,202,960)2,873,984Accounts payable2,230,5434,757,457Accrued liabilities and other payables1,866,1377,483,441Net cash (used in) provided by operating activities(8,973,695)3,939,329CASH FLOWS FROM INVESTING ACTIVITIES:Purchase of property and equipment(12,689)(3,554,258)Proceeds from disposal of property and equipment29,942Net cash provided by (used in) investing activities17,253(3,554,258)CASH FLOWS FROM FINANCING ACTIVITIES:Advances from related parties8,938,290(1,197,870)Net cash provided by (used in) financing activities8,938,290(1,197,870)Effect of exchange rate changes6,688(32,746)Net decrease in cash and cash equivalents(11,464)(845,545)Cash and cash equivalents, at beginning of year83,843929,388Cash and cash equivalents, at end of year$72,379$83,843Supplemental cash flow disclosures:Interest paid26,6114,412Income taxes paidF6LK TECHNOLOGY LTD. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS(IN U.S. DOLLARS)NOTE 1 – DESCRIPTION OF BUSINESS AND ORGANIZATIONStar Chariot Limited was incorporated in the British Virgin Islands (“BVI”) as an exempted limited liability company on March 3, 2011. On January 18, 2018, it wasrenamed as LK Technology Ltd. (“LK Technology ” or the “Company”).LK Technology, its subsidiaries and its variable interest entities (“VIEs”) (collectively the “Group”) operate mobile application service for longdistance travel in thePeople’s Republic of China (the “PRC”). The core mobile application product, Luokuang, is made as an LBSsocial contents and services distribution platform. Itoffers functions based on various travel scenarios, e.g. information, entertainment, travel, ecommerce, O2O, advertising, etc.As of December 31, 2017, details of the Company’s subsidiaries and VIEs are as follows:NameDate ofincorporationPlace ofincorporationPercentage oflegal ownershipSubsidiaries:MMB LimitedApr 11, 2013Hong Kong100%Mobile Media (China) LimitedNov 6, 2007Hong Kong100%Zhong Chuan Tian Xia Information and Technology (Beijing) LimitedFeb 1, 2013PRC100%Zhong Chuan Tian Xia Information and Technology (Shenzhen) LimitedDec 23, 2010PRC100%VIEs:Beijing Zhong Chuan Shi Xun Technology Limited (“Zhong Chuan Shi Xun”)May 17, 2004PRC100%Jiangsu Zhong Chuan Rui You Information and Technology Limited (“Zhong Chuan Rui You”)May 26, 2011PRC100%Huoerguosi Luokuang Information and Technology Limited (“Huoerguosi Luokuang”)Jul 19, 2017PRC100%Shenzhen Jiu Zhou Shi Dai Digital and Technology Limited (“Jiu Zhou Shi Dai”)Nov 26, 2004PRC100%F7NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIESBasis of presentationThe consolidated financial statements of the Group have been prepared in accordance with accounting principles generally accepted in the United States of America(“US GAAP”).The Group incurred losses from operations of $6,871,542 and $12,283,219 for the years ended December 31, 2017 and 2016, respectively. As of December 31, 2017, theGroup had a shareholder’s equity of $12,271,145. The Group had negative cash flows from operating activities for the year ended December 31, 2017 of $8,973,695.As of December 31, 2017, the Group had cash and cash equivalents of $72,379 and a working capital deficit of $1,371,672. From 2018 and onwards, the Group willfocus on improving operation efficiency and cost reduction, and enhancing marketing functions to attract more users. The Group regularly monitors its current andexpected liquidity requirements to ensure that it maintains sufficient cash balances and accessible credit to meet its liquidity requirements in the short and long term.The parent company continues to provide cash flow to the Group. Based on working capital conditions and forecast for future operations, the Group believes that itwill be able to meet its payment obligations and other commitments for at least the following twelve months.Principles of consolidationThe consolidated financial statements include the financial statements of the Company, its subsidiaries, including the whollyforeign owned enterprises (“WFOEs”),and VIEs for which the Company is the primary beneficiary. All transactions and balances among the Company, its subsidiaries and consolidated VIEs have beeneliminated upon consolidation. The results of subsidiaries and consolidated VIEs acquired or disposed of are recorded in the consolidated statements of operationsfrom the effective date of acquisition or up to the effective date of disposal, as appropriate.A subsidiary is an entity in which (i) the Company directly or indirectly controls more than 50% of the voting power; or (ii) the Company has the power to appoint orremove the majority of the members of the board of directors or to cast a majority of votes at the meeting of the board of directors or to govern the financial andoperating policies of the investee pursuant to a statute or under an agreement among the shareholders or equity holders. A VIE is required to be consolidated by theprimary beneficiary of the entity if the equity holders in the entity do not have the characteristics of a controlling financial interest or do not have sufficient equity atrisk for the entity to finance its activities without additional subordinated financial support from other parties.F8To comply with the PRC legal restrictions on foreign ownership of companies that operate mobile application services, the Group operates in such restricted servicesin the PRC through certain PRC domestic companies, whose equity interests are held by certain management members or founders of the Group. Part of theregistered capital of these PRC domestic companies was funded by certain management members or founders of the Group. The Group has entered into certainexclusive business services agreements with these PRC domestic companies, which entitle it to receive a majority of their residual returns and make it obligatory forthe Group to absorb a majority of the risk of losses from their activities. In addition, the Group has entered into certain agreements with those management membersor founders, including equity interest pledge agreements of the equity interests held by those management members or founders and exclusive option agreements toacquire the equity interests in these companies when permitted by the PRC laws, rules and regulations.Details of the typical VIE structure of the Group’s significant consolidated VIEs, primarily domestic companies associated with the operations such as Zhong ChuanShi Xun, Zhong Chuan Rui You, Huoerguosi Luokuang and Jiu Zhou Shi Dai, are set forth below:(i)Contracts that give the Group effective control of VIEsExclusive option agreementsThe VIE equity holders have granted the WFOEs exclusive call options to purchase their equity interest in the VIEs at an exercise price equal to the higherof (i) the registered capital in the VIEs; and (ii) the minimum price as permitted by applicable PRC laws. Each relevant VIE has further granted the relevantWFOE an exclusive call option to purchase its assets at an exercise price equal to the book value of the assets or the minimum price as permitted byapplicable PRC laws, whichever is higher. The WFOEs may nominate another entity or individual to purchase the equity interest or assets, if applicable,under the call options. Each call option is exercisable subject to the condition that applicable PRC laws, rules and regulations do not prohibit completion ofthe transfer of the equity interest or assets pursuant to the call option. Each WFOE is entitled to all dividends and other distributions declared by the VIE,and the VIE equity holders have agreed to give up their rights to receive any distributions or proceeds from the disposal of their equity interests in the VIEwhich are in excess of the original registered capital that they contributed to the VIE, and to pay any such distributions or premium to the WFOE. Theexclusive call option agreements remain in effect until the equity interest or assets that are the subject of such agreements are transferred to the WFOEs.Equity pledge agreementsPursuant to the relevant equity pledge agreements, the relevant VIE equity holders have pledged all of their interests in the equity of the VIEs as acontinuing first priority security interest in favor of the corresponding WFOEs to secure the performance of obligations by the VIEs and/or the equityholders under the other structure contracts. Each WFOE is entitled to exercise its right to dispose of the VIE equity holders’ pledged interests in the equityof the VIE and has priority in receiving payment by the application of proceeds from the auction or sale of such pledged interests, in the event of anybreach or default under the loan agreement or other structure contracts, if applicable. These equity pledge agreements remain in force for the duration ofthe relevant loan agreement and other structure contracts.F9(ii)Contracts that enable the Group to receive substantially all of the economic benefits from the VIEsExclusive business services agreementsEach relevant VIE has entered into an exclusive business services agreement with the respective WFOE, pursuant to which the relevant WFOE providesexclusive business services to the VIE. In exchange, the VIE pays a service fee to the WFOE which typically amounts to what would be substantially all ofthe VIE’s pretax profit, resulting in a transfer of substantially all of the profits from the VIE to the WFOE.Other arrangementsThe exclusive call option agreements described above also enable the Group to receive substantially all of the economic benefits from the VIEs by typicallyentitling the WFOEs to all dividends and other distributions declared by the VIEs and to any distributions or proceeds from the disposal by the VIE equityholders of their equity interests in the VIEs that are in excess of the original registered capital that they contributed to the VIEs.Based on these contractual agreements, the Group believes that the PRC domestic companies as described above should be considered as VIEs because the equityholders do not have significant equity at risk nor do they have the characteristics of a controlling financial interest. Given that the Group is the primary beneficiaryof these PRC domestic companies, the Group believes that these VIEs should be consolidated based on the structure as described above.Under the contractual arrangements with the consolidated VIEs, the Group has the power to direct activities of the consolidated VIEs and can have assetstransferred out of the consolidated VIEs under its control. Therefore, the Group considers that there is no asset in any of the consolidated VIEs that can be usedonly to settle obligations of the consolidated VIEs, except for registered capital and PRC statutory reserves. As all consolidated VIEs are incorporated as limitedliability companies under the Company Law of the PRC, creditors of the consolidated VIEs do not have recourse to the general credit of the Group for any of theliabilities of the consolidated VIEs.Currently there is no contractual arrangement which requires the Group to provide additional financial support to the consolidated VIEs. However, as the Groupconducts its businesses primarily based on the licenses and approvals held by its consolidated VIEs, the Group has provided and will continue to provide financialsupport to the consolidated VIEs considering the business requirements of the consolidated VIEs, as well as the Group’s own business objectives in the future.F10Use of estimatesThe preparation of financial statements in conformity with US GAAP requires the Group to make estimates and assumptions that affect the reported amounts ofassets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expensesduring the reporting period. The most significant estimates are the allowance for doubtful accounts, the useful lives of property and equipment and intangibleassets, impairment of longlived assets and goodwill. Actual results could differ from those estimates.Fair value measurementsFair value is the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at themeasurement date under current market conditions. When determining the fair value measurements for assets and liabilities required or permitted to be recorded atfair value, the Group considers the principal or most advantageous market in which it would transact and it considers assumptions that market participants woulduse when pricing the asset or liability.Authoritative literature provides a fair value hierarchy which prioritizes the inputs to valuation techniques used to measure fair value into three broad levels. Thelevel in the hierarchy within which the fair value measurement in its entirety falls is based upon the lowest level of input that is significant to the fair valuemeasurement as follows:Level 1Level 1 applies to assets or liabilities for which there are quoted prices in active markets for identical assets or liabilities.Level 2Level 2 applies to assets or liabilities for which there are inputs other than quoted prices included within Level 1 that are observable for the asset or liability such asquoted prices for similar assets or liabilities in active markets; quoted prices for identical assets or liabilities in markets with insufficient volume or infrequenttransactions (less active markets); or modelderived valuations in which significant inputs are observable or can be derived principally from, or corroborated by,observable market data.Level 3Level 3 applies to assets or liabilities for which there are unobservable inputs to the valuation methodology that are significant to the measurement of the fair valueof the assets or liabilities.F11Cash and cash equivalentsCash and cash equivalents primarily consist of cash, money market funds, investments in interest bearing demand deposit accounts, time deposits and highly liquidinvestments with original maturities of three months or less from the date of purchase and are stated at cost which approximates their fair value. The Group has nocash equivalents.Accounts receivable, net of allowanceAccounts receivable are recognized and carried at the original invoiced amount less an allowance for any potential uncollectible amounts. An estimate for doubtfuldebts is made when collection of the full amount is no longer probable. Bad debts are written off as incurred. The Group generally does not require collateral from itscustomers.The Group maintains allowances for doubtful accounts for estimated losses resulting from the failure of customers to make payments on time. The Group reviews theaccounts receivable on a periodic basis and makes specific allowances when there is doubt as to the collectability of individual balances. In evaluating thecollectability of individual receivable balances, the Group considers many factors, including the age of the balance, the customer’s payment history, its currentcreditworthiness and current economic trends.Property and equipment, netProperty and equipment are carried at cost less accumulated depreciation. Depreciation is calculated on a straightline basis over the following estimated usefullives:Wifi equipment– 3 yearsOffice equipment– 3 to 5 yearsVehicles– 5 yearsCosts of repairs and maintenance are expensed as incurred and asset improvements are capitalized. The gain or loss on disposal of property and equipment is thedifference between the net sales proceeds and the carrying amount of the relevant assets and is recognized in the consolidated income statement. When propertyand equipment are retired or otherwise disposed of, the cost and accumulated depreciation are removed from the accounts and any resulting gain or loss is includedin the results of operations for the respective period.Construction in progressAssets under construction are not depreciated until construction is completed and the assets are ready for their intended use.F12Intangible assetsIntangible assets with finite lives are amortized using the straightline method over the estimated economic lives.Intangible assets have weighted average economic lives from the date of purchase as follows:Software– 5 yearsTrademarks– 10 yearsGoodwillThe Group assesses goodwill for impairment in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”)subtopic 35020, Intangibles—Goodwill and Other: Goodwill (“ASC 35020”), which requires that goodwill to be tested for impairment at the reporting unit level atleast annually and more frequently upon the occurrence of certain events, as defined by ASC 35020.We have the option to assess qualitative factors first to determine whether it is necessary to perform the twostep test in accordance with ASC 35020. If we believe,as a result of the qualitative assessment, that it is morelikelythannot that the fair value of the reporting unit is less than its carrying amount, the twostepquantitative impairment test described below is required. Otherwise, no further testing is required. In the qualitative assessment, we consider primary factors such asindustry and market considerations, overall financial performance of the reporting unit, and other specific information related to the operations. In performing thetwostep quantitative impairment test, the first step compares the carrying amount of the reporting unit to the fair value of the reporting unit based on either quotedmarket prices of the ordinary shares or estimated fair value using a combination of the income approach and the market approach. If the fair value of the reportingunit exceeds the carrying value of the reporting unit, goodwill is not impaired and we are not required to perform further testing. If the carrying value of the reportingunit exceeds the fair value of the reporting unit, then we must perform the second step of the impairment test in order to determine the implied fair value of thereporting unit’s goodwill. The fair value of the reporting unit is allocated to its assets and liabilities in a manner similar to a purchase price allocation in order todetermine the implied fair value of the reporting unit goodwill. If the carrying amount of the goodwill is greater than its implied fair value, the excess is recognized asan impairment loss.In 2017, we performed a qualitative assessment for goodwill. Based on the requirements of ASC35020, we evaluated all relevant factors, including but not limited tomacroeconomic conditions, industry and market conditions, financial performance. We weighed all factors in their entirety and concluded that it was not morelikelythannot the fair value was less than the carrying amount of the reporting unit, and further impairment testing on goodwill was unnecessary as of December 31, 2017and 2016.F13Impairment or disposal of longlived assetsLonglived assets other than goodwill are included in impairment evaluations when events and circumstances exist that indicate the carrying value of these assetsmay not be recoverable. In accordance with FASB ASC 360, Property, Plant and Equipment, the Group assesses the recoverability of the carrying value of longlivedassets by first grouping its longlived assets with other assets and liabilities at the lowest level for which identifiable cash flows are largely independent of the cashflows of other assets and liabilities (the asset group) and, secondly, estimating the undiscounted future cash flows that are directly associated with and expected toarise from the use of and eventual disposition of such asset group. If the carrying value of the asset group exceeds the estimated undiscounted cash flows, theGroup recognizes an impairment loss to the extent the carrying value of the longlived asset exceeds its fair value. The Group determines fair value through quotedmarket prices in active markets or, if quotations of market prices are unavailable, through the performance of internal analysis using a discounted cash flowmethodology or obtains external appraisals from independent valuation firms. The undiscounted and discounted cash flow analyses are based on a number ofestimates and assumptions, including the expected period over which the asset will be utilized, projected future operating results of the asset group, discount rateand longterm growth rate.As of December 31, 2017 and 2016, the Group assessed the impairment of its longlived assets and concluded that there was no impairment indication.Business combinationWe account for business combinations using the purchase method of accounting in accordance with FASB ASC topic 805, Business combinations. The purchasemethod accounting requires that the consideration transferred be allocated to the assets, including separately identifiable assets and liabilities we acquired, basedon their estimated fair values. The consideration transferred in an acquisition is measured as the aggregate of the fair values at the date of exchange of the assetsgiven, liabilities incurred, and equity instruments issued as well as the contingent considerations and all contractual contingencies as of the acquisition date. Thecosts directly attributable to the acquisition are expensed as incurred. Identifiable assets, liabilities and contingent liabilities acquired or assumed are measuredseparately at their fair value as of the acquisition date, irrespective of the extent of any noncontrolling interests. The excess of (i) the total of cost of acquisition, fairvalue of the noncontrolling interests and acquisition date fair value of any previously held equity interest in the acquiree over (ii) the fair value of the identifiable netassets of the acquiree, is recorded as goodwill. If the cost of acquisition is less than the fair value of the net assets of the subsidiary acquired, the difference isrecognized directly in earnings.Revenue recognitionThe Group recognizes revenue in accordance with FASB ASC topic 605, Revenue Recognition (“ASC 605”). Revenue is recognized when the following four revenuerecognition criteria are met: (i) persuasive evidence of an arrangement exists, (ii) delivery has occurred or services have been provided, (iii) the selling price is fixed ordeterminable, and (iv) collectability is reasonably assured.F14Displaybased online advertising servicesThe Group provides displaybased online advertising services to customers by integrating text description, image and video, and displaying the advertisements in aprominent position of LuoKuang Application. The Group recognizes revenue in accordance with ASC 605, over the contractual term based on the agreements andconfirmation letters signed by both parties, commencing on the date the customer’s advertisement is displayed on the Group’s platform.Foreign currency translationThe functional and reporting currency of the Company and the Company’s subsidiaries domiciled in BVI and Hong Kong are the United States dollar (“U.S. dollar”).The financial records of the Company’s other subsidiaries and VIEs located in the PRC are maintained in their local currency, the Chinese Renminbi (“RMB”), whichare the functional currency of these entities.Monetary assets and liabilities denominated in currencies other than the functional currency are translated into the functional currency at the rates of exchangeruling at the balance sheet date. Transactions in currencies other than the functional currency during the year are converted into the functional currency at theapplicable rates of exchange prevailing when the transactions occurred. Transaction gains and losses are recognized in the statements of operations.The Company’s entities with a functional currency of RMB translate their operating results and financial position into the U.S. dollar, the Company’s reportingcurrency. Assets and liabilities are translated using the exchange rates in effect on the balance sheet date. Revenues, expenses, gains and losses are translatedusing the average rate for the year. Retained earnings and equity are translated using the historical rate. Translation adjustments are reported as cumulativetranslation adjustments and are shown as a separate component of other comprehensive income.Income taxesDeferred income taxes are recognized for temporary differences between the tax basis of assets and liabilities and their reported amounts in the financial statements,net operating loss carry forwards and credits, by applying enacted statutory tax rates applicable to future years. Deferred tax assets are reduced by a valuationallowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Current income taxesare provided for in accordance with the laws and regulations applicable to the Group as enacted by the relevant tax authorities.The impact of an uncertain income tax position on the income tax return must be recognized at the largest amount that is morelikelythan not to be sustained uponaudit by the relevant tax authorities. An uncertain income tax position will not be recognized if it has less than a 50% likelihood of being sustained. Additionally, theGroup classifies the interest and penalties, if any, as a component of the income tax expense. For years ended December 31, 2017 and 2016, the Group did not haveany material interest or penalties associated with tax positions nor did the Group have any significant unrecognized uncertain tax positions.F15Related partiesParties are considered to be related to the Company if the parties, directly or indirectly, through one or more intermediaries, control, are controlled by, or are undercommon control with the Company. Related parties also include principal owners of the Company, its management, members of the immediate families of principalowners of the Company and its management and other parties with which the Company may deal with if one party controls or can significantly influence themanagement or operating policies of the other to an extent that one of the transacting parties might be prevented from fully pursuing its own separate interests. TheCompany discloses all significant related party transactions.LeasesLeases have been classified as either capital or operating leases. Leases that transfer substantially all the benefits and risks incidental to the ownership of assets areaccounted for as if there was an acquisition of an asset and incurrence of an obligation at the inception of the lease. All other leases are accounted for as operatingleases wherein rental payments are expensed as incurred.When the Group is the lessor, minimum contractual rental from leases are recognized on a straightline basis over the noncancelable term of the lease. With respectto a particular lease, actual amounts billed in accordance with the lease during any given period may be higher or lower than the amount of rental revenue recognizedfor the period. Straightline rental revenue commences when the customer assumes control of the leased premises. Accrued straightline rents receivable representsthe amount by which straightline rental revenue exceeds rents currently billed in accordance with lease agreements. Contingent rental revenue is accrued when thecontingency is removed.Advertising costsAdvertising costs include expenses associated with direct marketing. All advertising costs are expensed as incurred and included in selling and marketing expenses.During the years ended December 31, 2017 and 2016, advertising costs amounted to $23,171,170 and $4,537,653, respectively.Comprehensive lossComprehensive loss includes net loss and foreign currency translation adjustments and is presented net of tax. The tax effect is nil for the two years endedDecember 31, 2017 and 2016 in the consolidated statements of comprehensive loss.Concentration of credit riskFinancial instruments that potentially expose the Group to concentrations of credit risk consist primarily of cash and accounts receivable. The Group places its cashwith financial institutions with highcredit rating and quality in China. For the year ended December 31, 2017, two customers accounted for over 10% of totalrevenue. For the year ended December 31, 2016, four customers accounted for over 10% of total revenue. At December 31, 2017 and 2016, the Group had credit riskexposure of uninured cash in banks of approximately $72,379 and $83,843, respectively.F16NOTE 3 – INCOME TAXAt December 31, 2017 and 2016, the Group had an unused net operating loss carryforwards of approximately $25,123,726 and $20,081,239, respectively, for income taxpurposes, which expires between 2018 to 2022 and between 2017 to 2021, respectively. At December 31, 2017 and 2016, these net operating losses carryforwards mayresult in future income tax benefits of approximately $5,043,944 and $4,008,863, respectively, however, because realization is uncertain at this time, a valuationallowance in the same amount has been established. Deferred income taxes reflect the net effects of temporary differences between the carrying amounts of assetsand liabilities for financial reporting purposes and the amounts used for income tax purposes.Significant components of the Group’s deferred tax liabilities and assets of December 31, 2017 and 2016 are as follows:December 31,December 31,20172016Deferred tax liabilities$$Deferred tax assetNet operating loss carryforward5,043,9444,008,863Valuation allowance(5,043,944)(4,008,863)Net deferred tax assetMovement of valuation allowanceDecember 31,2017December 31,2016At the beginning of the year$4,008,863$2,049,352Current year addition823,9702,159,518Expired(61,411)Exchange difference272,522(200,007)At the end of the year5,043,9444,008,863The Company is not subject to taxation in BVI under the current BVI law. Subsidiaries operating in the PRC are subject to PRC Enterprise Income Tax at the statutoryrate of 25% for the years ended December 31, 2017 and 2016. Subsidiaries operating in Hong Kong are subject to Hong Kong income taxes at a rate of 16.5% for theyears ended December 31, 2017 and 2016.F17A reconciliation of the income tax expense to the amount computed by applying the current statutory tax rate to the loss before income taxes in the consolidatedstatements of comprehensive income is as follows:December 31,December 31,20172016Loss before income taxes$(6,810,454)$(13,049,031)Tax loss at statutory tax rate(1,655,174)(3,386,822)Nondeductible items6,729,2551,712,857Nontaxable items(3,789,956)(674,189)Change in valuation allowance823,9702,159,518Tax benefits(2,108,095)188,636Income tax expensesNOTE 4 – ACCOUNTS RECEIVABLEAt December 31, 2017 and 2016, accounts receivable consisted of the following:December 31,December 31,20172016Accounts receivable$10,406,602$2,098,946Less: allowance for doubtful accounts676,977233,110$9,729,625$1,865,836NOTE 5 – OTHER RECEIVABLESAt December 31, 2017 and 2016, other receivables consisted of the following:December 31,2017December 31,2016Advances to suppliers$339,701$181,472VAT recoverable (1)3,033,0651,662,805Other5,048,189485,152$2,376,745$2,287,934(1)The balance of advanced VAT represents input VAT available for deducting the amount of VAT paid in the future. During the years ended December 31, 2017and 2016, the Group purchased a large amount of WiFi equipment for deployments, which generated related input VAT approved by tax authority.F18NOTE 6 – AMOUNTS DUE FROM RELATEDPARTIESAt December 31, 2017 and 2016, amounts due from related parties consisted of the following:Name of related partyDecember 31,2017December 31,2016C Media Limited (1)$11,760,692$Ya Tuo Ji International Consultancy (Beijing) Limited (2)204,412183,811(1)C Media Limited is the parent company of LK Technology. The Group expects the amounts due from the related party will be returned to the Group within oneyear.(2)Ya Tuo Ji is a company controlled by the spouse of a major shareholder of C Media Limited. The loan is unsecured, interestfree and repayable on January 5,2019.NOTE 7 – PROPERTY AND EQUIPMENTAt December 31, 2017 and 2016, property and equipment consisted of the following:December 31,December 31,Useful life20172016WiFi equipment3 Years$8,711,424$8,367,678Vehicles5 Years43,246Office and other equipment3 – 5 Years170,242416,434Constructioninprogress2,166,4522,652,28811,048,11811,479,646Less: accumulated depreciation(6,003,246)(3,708,619)$5,044,872$7,771,027For the years ended December 31, 2017 and 2016, depreciation expense amounted to $2,628,884 and $2,474,434, respectively, of which $2,423,655 and $2,194,582,respectively, was included in cost of revenue, $117,648 and $121,740, respectively, was included in selling and marketing expenses and the remainder was included ingeneral and administrative expense.Included in constructioninprogress are WiFI equipment under construction.F19NOTE 8 – GOODWILLIn September of 2014, Zhong Chuan Shi Xun acquired a 100% interest in Zhong Chuan Rui You for a consideration of $7,391,894 (RMB48,000,000). Zhong Chuan RuiYou is primarily engaged in on train WiFi business, deploying WiFi equipment on trains and providing passengers with entertainment and information services ontrains. The book value of the identifiable net assets of Zhong Chuan Rui You was $151,958 (RMB963,000) and a goodwill of $7,239,936 was recorded.NOTE 9 – ACCRUED LIABILITIES AND OTHER PAYABLESAt December 31, 2017 and 2016, accrued liabilities and other payables consisted of the following:December 31,December 31,20172016Deferred revenue$2,326,406$302,735Accrued payroll143,998316,458Other taxes payable3,544,469461,699Other payable852,384686,526Other loans6,095,6559,562,915$12,962,912$11,329,613Deferred revenue represents prepayments from customers for advertising service and is recognized as revenue when the advertising services are rendered.Other loans of $939,555 and $57,416, respectively, as of December 31, 2017 and 2016, are unsecured, bear daily interest at 0.04% and are repayable on demand.NOTE 10 – AMOUNTS DUE TO RELATED PARTIESAt December 31, 2017 and 2016, amounts due to related parties consisted of the following:December 31,December 31,Name of related party20172016Mr. Song Xuesong (“Mr. Song”) (1)$2,921,639$10,669,325C Media Limited (2)$$4,855,236Thumb Beijing Branch (3)$612,103$576,560Thumb Shenzhen Branch (3)$29,941$28,202(1) The Group’s CEO(2) C Media Limited, the parent company.(3) Thumb Beijing and Shenzhen Branch are controlled by the spouse of Mr. Song.Amounts due to related parties are shortterm in nature, noninterest bearing, unsecured and payable on demand.F20NOTE 11 – RETIREMENT AND WELFARE BENEFITSThe Group’s fulltime employees are entitled to staff welfare benefits including medical care, casualty, housing benefits, education benefits, unemployment insuranceand pension benefits through a PRC governmentmandated multiemployer defined contribution plan. The Group is required to accrue the employerportion forthese benefits based on certain percentages of the employees’ salaries. The total provision for such employee benefits of $170,227 and $353,033 during the yearsended December 31, 2017 and 2016, respectively, of which $23,392 and $30,455, respectively, was charged to cost of revenue, $48,957 and $97,408, respectively wascharged to selling and marketing expenses, $49,717 and $86,934, respectively, was charged to general and administrative expenses and $48,161 and $138,236,respectively was charged to research and development expenses. The Group is required to make contributions to the plan out of the amounts accrued for all staffwelfare benefits except for education benefits. The PRC government is responsible for the staff welfare benefits including medical care, casualty, housing benefits,unemployment insurance and pension benefits to be paid to these employees.NOTE 12 – STATUTORY RESERVESAs stipulated by the relevant law and regulations in the PRC, the Group’s subsidiaries and VIEs in the PRC are required to maintain a nondistributable statutorysurplus reserve. Appropriations to the statutory surplus reserve are required to be made at not less than 10% of profit after taxes as reported in the subsidiaries’statutory financial statements prepared under the PRC GAAP. Once appropriated, these amounts are not available for future distribution to owners or shareholders.Once the general reserve is accumulated to 50% of the subsidiaries’ registered capital, the subsidiaries can choose not to provide more reserves. The statutoryreserve may be applied against prior year losses, if any, and may be used for general business expansion and production and increase in registered capital of thesubsidiaries. The Group allocated $Nil to statutory reserves during the years ended December 31, 2017 and 2016, respectively. The statutory reserves cannot betransferred to the Company in the form of loans or advances and are not distributable as cash dividends except in the event of liquidation.NOTE 13 – COMMITMENTS AND CONTINGENCIESOperating leasesWe have entered into operating lease agreements primarily for our office spaces in China. These leases expire through 2018 and are renewable upon negotiation.Future minimum rental payment required under the Office Lease is as follows:Year ending December 31:Amount2018$122,138F21Contingencies(a) Litigation with Shanghai Fusheng Weier Intelligent Control Technology Co., Ltd.On January 22, 2016, Zhong Chuan Rui You and Shanghai Fusheng Weier Intelligent Control Technology Co., Ltd. (“Fusheng Weier”) signed a contract forequipment of $1,652,842 (RMB10,800,000). Since Zhong Chuan Rui You did not make the payments of $1,126,381 (RMB7,360,000) on the due dates, Fusheng Weierfiled a lawsuit against Zhong Chuan Rui You in Shanghai Xuhui District People’s Court on October 8, 2016. On March 9, 2017, Xuhui District People’s Court issuedthe verdict requiring Zhong Chuan Rui You to pay the overdue debts. In August 2017, C Media Limited made the payment of $512,075 (RMB3,346,000). Theremaining balance has been accrued in accounts payable. The payment schedule for the remaining balance is being negotiated by the two parties. On February 5,2018, a hearing was held adding Zhong Chuan Shi Xun as a defendant. The Group plans to settle the remaining balance within one year.(b) Lawsuit with Gansu Jinlun Culture Media Co., Ltd.On August 22, 2014, Zhong Chuan Rui You and Gansu Jinlun Culture Media Co., Ltd. (“Gansu Jinlun”) signed a “Lanzhou Railway Bureau Airconditioned Train WiFi Network System Advertising Operation Rights Agreement” for advertising on 72 trains of $1,467,880 (RMB9,604,633). Due to the dispute on the projectimplementation, Zhong Chuan Rui You did not pay the advertising fee. On August 23, 2017, Gansu Jinlun filed a lawsuit with Gansu Intermediate People’s Court. OnDecember 19, 2017, Gansu Intermediate People’s Court issued a verdict, ruling that Zhong Chuan Rui You settle the overdue advertising fee. Since only 18 out of 72trains have been installed with Wifi network system, Zhong Chuan Rui You disputed and appealed to the verdict. The next court trial date has not yet beendetermined.C Media and Gansu Jinlun are negotiating a potential settlement to resume the contract. According to the legal counsel, it is probable that the settlement will amountto approximately $459,000 (RMB3,000,000); therefore, this amount has been accrued in accounts payable.(c) Litigation with Shenzhen Hua Xun Fang Zhou Technology Co., Ltd.On June 16, 2015, Zhong Chuan Rui You signed a cooperation agreement with Shenzhen Hua Xun Fang Zhou Technology Co., Ltd. (“Shenzhen Hua Xun”) andXuesong Song, a major shareholder of C Media Limited. Pursuant to this agreement, Zhong Chuan Rui You procures equipment from Shenzhen Hua Xun. XuesongSong acts as a joint liability guarantor for the entire debts of Zhong Chuan Rui You under this agreement. As Zhong Chuan Rui You did not make the payments onthe due dates, Shenzhen Hua Xun filed a lawsuit with Shenzhen Baoan District People’s Court on May 31, 2016. On November 1, 2016, Zhong Chuan Rui You,Xuesong Song and Shenzhen Hua Xun reached a settlement in Shenzhen Baoan District People’s Court to settle $1,735,389 (RMB11,355,000) in four instalments. OnDecember 30, 2017, the debt was assigned to C Media Limited.NOTE 14 – SUBSEQUENT EVENTThe Group has evaluated all events or transactions that occurred after December 31, 2017 through May 25, 2018, which is the date that the financial statements wereavailable to be issued.F22EX1.1 2 f20f2017ex11_luokung.htm AMENDED AND RESTATED MEMORANDUM OF ASSOCIATION AND ARTICLES OF ASSOCIATION OF LUOKUNGTECHNOLOGY CORP., DATED AUGUST 20, 2018, AND AS CURRENTLY IN EFFECTExhibit 1.1BC NO: 1553620British Virgin IslandsThe BVI Business Companies Act, 2004(No. 16 of 2004)Memorandum of AssociationandArticles of AssociationofLuokung Technology Corp.Incorporated the 24th day of October, 2009Amended and Restated the 11th Day of December 2009Amended and Restated the 17th Day of December 2009Amended and Restated the 25th Day of March 2010Amended and Restated the 21st day of May 2018Amended and restated the 17 August 2018Amended and restated the 21 August 2018Portcullis (BVI) LimitedPortcullis Chambers4th Floor Ellen Skelton Building3076 Sir Francis Drake HighwayRoad Town, TortolaBritish Virgin IslandsTERRITORY OF THE BRITISH VIRGIN ISLANDSTHE BVI BUSINESS COMPANIES ACT, 2004(No. 16 of 2004)MEMORANDUM OF ASSOCIATIONOFLuokung Technology Corp.NAME1.The name of the Company is Luokung Technology Corp.TYPE OF COMPANY2.The Company is a company limited by shares.REGISTERED OFFICE3.The first Registered Office of the Company is the offices of Portcullis TrustNet (BVI) Limited, Portcullis TrustNet Chambers, P.O. Box 3444, Road Town,Tortola, British Virgin Islands, the office of the registered agent.3.1The current Registered Office of the Company is Portcullis Chambers, 4th Floor Ellen Skelton Building, 3076 SirFrancis Drake Highway, Road Town,Tortola, British Virgin Islands VG1110.REGISTERED AGENT4.The first Registered Agent of the Company is Portcullis TrustNet (BVI) Limited of Portcullis TrustNet Chambers, P.O. Box 3444, Road Town, Tortola,British Virgin Islands.4.1The current Registered Agent of the Company is Portcullis (BVI) Ltd of Portcullis Chambers, 4th Floor Ellen Skelton Building, 3076 Sir Francis DrakeHighway, Road Town, Tortola, British Virgin Islands VG1110.AUTHORISED NUMBER OF SHARES5.The Company is authorised to issue a maximum of 251,000,000 shares.CLASSES, NUMBER AND PAR VALUE OF SHARES6.As at the date of adoption of this memorandum, the Company is authorised to issue (a) 250,000,000 ordinary shares without par value (“OrdinaryShares”); and (b) 1,000,000 preferred shares without par value (“Preferred Shares”).FRACTIONAL SHARES7.The Company may issue fractions of a share and a fractional share shall have the same corresponding fractional liabilities, limitations, preferences,privileges, qualifications, restrictions, rights and other attributes of a whole share of the same class or series of shares.RIGHTS, PRIVILEGES, RESTRICTIONS AND CONDITIONS ATTACHING TO SHARES8.(1)Subject to the memorandum and articles of association (and, for greater clarity, without prejudice to any special rights conferred thereby on theholders of any other shares), an Ordinary Share of the Company confers on the holder;(a)the right to one vote at a meeting of the members of the Company or on any Resolution of Members;(b)the right to an equal share in any Distribution paid by the Company; and(c)the right to an equal share in the distribution of the surplus assets of the Company on a winding up.(2)Subject to the memorandum and articles of association (and, for greater clarity, without prejudice to any special rights conferred thereby on theholders of any other shares), a Preferred Share of the Company confers on the holder;(a)the right to 399 votes at a meeting of the members of the Company or on any Resolution of Members;(b)the right to an equal share in any Distribution paid by the Company;(c)the right to an equal share in the distribution of the surplus assets of the Company on its liquidation.(d)be freely transferable, in whole or in part, by Mr. Xuesong Song to any third party through one or more Private Transactions, subject toApplicable Law; and(e)be freely transferable, in whole or in part, by Mr. Xuesong Song to any third party through one or more Public Transactions, subject to ApplicableLaw and Automatic Conversion of such Preferred Share(s) into Ordinary Share(s).(3)The directors may at their discretion by resolution of directors redeem, purchase or otherwise acquire all or any of the shares in the Companysubject to the Articles..VARIATION OF CLASS RIGHTS9.If at any time the issued shares are divided into different classes or series of shares, the rights attached to any class or series (unless otherwise providedby the terms of issue of the shares of that class or series) may, whether or not the Company is being wound up, be varied with the consent in writing of theholders of not less than threefourths of the issued shares of that class or series and of the holders of not less than threefourths of the issued shares ofany other class or series of shares which may be affected by such variation.RIGHTS NOT VARIED BY THE ISSUE OF SHARES PARI PASSU10.The rights conferred upon the holders of the shares of any class issued with preferred or other rights shall not, unless otherwise expressly provided by theterms of issue of the shares of that class, be deemed to be varied by the creation or issue of further shares ranking pari passu therewith.CAPACITY AND POWERS11.Subject to the Act, any other British Virgin Islands legislation and paragraph 12 below the Company has, irrespective of corporate benefit:(a)full capacity to carry on or undertake any business or activity, do any act or enter into any transaction;(b)for the purposes of paragraph (a), full rights, powers and privileges; and(c)full powers to issue shares with preemptive rights, subject to the Articles.2LIMITATIONS ON THE COMPANY’S BUSINESS12.For the purposes of section 9(4) of the Act the Company may not;(a)carry on banking or trust business, unless it is licensed to do so under the Banks and Trust Companies Act, 1990;(b)carry on business as an insurance or reinsurance company, insurance agent or insurance broker, unless it is licensed under the Insurance Act1994;(c)carry on business of company management, unless it is licensed under the Company Management Act, 1990;(d)carry on the business of providing the registered office or the registered agent for companies incorporated in the British Virgin Islands;(e)carry on the business as a mutual fund, manager of mutual funds or administrator of mutual funds unless it is recognized or licenced as the casemay be under the Mutual Funds Act 1996; or(f)carry on any other business that gives rise to a licencing requirement under any law for the time being in force in the British Virgin Islands unlessit is licenced, regulated, recognised or otherwise approved pursuant to such law.REGISTERED SHARES AND PROHIBITION ON ISSUE OF BEARER SHARES13.Shares in the Company may only be issued as registered shares. The issue of shares to bearer is prohibited.PROHIBITION ON EXCHANGE AND CONVERSION OF REGISTERED SHARES TO BEARER SHARES14.The exchange or conversion of registered shares to bearer shares is prohibited.TRANSFER OF REGISTERED SHARES15.Subject to the provisions of the Articles the Company may upon receipt of an instrument of transfer enter the name of the transferee in the register ofmembers subject to the prior or simultaneous approval of the Company as evidenced by a resolution of directors or by a resolution of members. Subject toany resolution of the members to the contrary, the directors may resolve by resolution of directors to refuse or delay the registration of the transfer forreasons that shall be specified in the resolution of directors.AMENDMENT OF MEMORANDUM AND ARTICLES OF ASSOCIATION16.1The Company may amend its Memorandum or Articles by a resolution of members or by a resolution of directors provided that the directors shall not havethe power to amend the Memorandum or Articles;(a)to restrict the rights or powers of the members to amend the Memorandum or Articles;(b)to change the percentage of members required to pass a resolution to amend the Memorandum or Articles;(c)in circumstances where the Memorandum or Articles cannot be amended by the members; or(d)to Clauses 8, 9, 10 or this Clause 12.16.2No amendment may be made to Regulation 76 of the Articles unless approved by an affirmative vote of the holders of 66 2/3 percent or more of theoutstanding votes of the shares entitled to vote thereon.3DEFINITIONS17.The meanings of words in this Memorandum are as defined in the Articles.We, Portcullis TrustNet (BVI) Limited of Portcullis TrustNet Chambers, P.O. Box 3444, Road Town, Tortola, British Virgin Islands for the purpose ofincorporating a BVI Business Company under the laws of the British Virgin Islands hereby sign this Memorandum of Association the 27th day of October,2009.Incorporator/s/ Nicole WheatleyPortcullis TrustNet (BVI) LimitedPortcullis TrustNet ChambersP.O. Box 3444Road Town, TortolaBritish Virgin Islands(Sgd. Nicole Wheatley)4TERRITORY OF THE BRITISH VIRGIN ISLANDSTHE BVI BUSINESS COMPANIES ACT, 2004(No. 16 of 2004)ARTICLES OF ASSOCIATIONOFLuokung Technology Corp.PRELIMINARY1.In these Articles, if not inconsistent with the subject or context, the words and expressions standing in the first column of the following table shall bear themeanings set opposite them respectively in the second column thereof.WordsMeaningApplicable Lawall Laws, including those of a jurisdiction in or outside of the United States, applicable to the Private orPublic Transactions.Actthe BVI Business Companies Act, 2004 (No 16 of 2004.) including any modification, extension, reenactment or renewal thereof and any regulations made thereunder.Articlesthese Articles of Association as originally framed or as from time to time amended.Automatic Conversioneach Preferred Share shall be automatically converted at any time after issue and without the payment ofany additional sum into an equal number of fully paid Ordinary Shares upon the conclusion of anytransfer by Mr. Xuesong Song to any third party through one or more Public Transactions.Designated Stock Exchangeeither the Nasdaq National Stock Market, Inc. or such other exchange or quotation bureau on which, theCompany’s Securities are listed or traded; provided that until the Securities are listed on any such“Exchange” the rules of any such Designated Stock Exchange shall be inapplicable to these Articles.directora director of the Company.distributionin relation to a distribution by a company to a member, means(i)the direct or indirect transfer of an asset, other than the Company’s own shares, to or forthe benefit of the member or(ii)the incurring of a debt to or for the benefit of a member,in relation to shares held by a member, and whether by means of a purchase of an asset, the purchase,redemption or other acquisition of shares, a transfer of indebtedness or otherwise, and includes adividend.Independent Directora person who meets the then current requirements for “independence” of the applicable rules andregulations of the U.S. Securities and Exchange Commission and the Designated Stock Exchange.5member or shareholderin relation to the Company, means a person whose name is entered in the register of members as theholder of one or more shares, or fractional shares, in the Company.Memorandumthe Memorandum of Association of the Company as originally framed or as from time to time amended.Mr. Xuesong Songthe founder, a director and Chairman of LK Technology Ltd.Ordinary Sharesissued or unissued ordinary shares of no par value of the Company having the rights, preferences andprivileges set out in the MemorandumPersonAn individual, a corporation, a trust, trustee, the estate of a deceased individual, a partnership or anunincorporated association of persons.Preferred Sharesissued or unissued preferred shares of no par value of the Company having the rights, preferences andprivileges set out in the MemorandumPrivate Transactionstransactions that are not considered as a Public Transaction.Public Transactionstransactions through any national securities exchanges and/or through the automated quotation systemincluding but not limited to NASDAQ, NYSE (including NYSE American) or OTC Markets, or anytransaction executed by the broker or with a market maker.Related Party(a) any director, officer and employee of the Company; (b) any family member of such director, officer andemployee; and (c) any entity (e.g. a corporation, partnership, or trust) controlled by or set up for thebenefit of a director, officer or employee, or a family member of such director, officer or employee.Relevant SystemA facility for the electronic transfer of uncertificated securities administered by The Depository TrustCompany or such other Person regulated by the SEC.resolution of directors(a)A resolution approved at a duly convened and constituted meeting of directors of the Companyor of a committee of directors of the Company by the affirmative vote of a simple majority of thedirectors present at the meeting who voted and did not abstain; or(b)a resolution consented to in writing by a simple majority of the directors or of all members of thecommittee, as the case may be;except that where a director is given more than one vote, he shall be counted by the number ofvotes he casts for the purpose of establishing a majority.resolution of membersSubject to the provisions of the Memorandum and Articles means:(a)A resolution approved at a duly convened and constituted meeting of the members of theCompany by the affirmative vote of(i)a majority of in excess of 50% of the votes of the shares entitled to vote and voting onthe resolution, or(ii)a majority of in excess of 50% of the votes of each class or series of shares entitled tovote as a class or series and voting on the resolution and a majority of in excess of 50%of the votes of the remaining shares entitled to vote and voting on the resolution; or6(b)a resolution consented to in writing by(i)an absolute majority of the votes of shares entitled to vote thereon, or(ii)an absolute majority of the votes of each class or series of shares entitled to votethereon as a class or series and of an absolute majority of the votes of the remainingshares entitled to vote thereon.SealAny Seal which has been duly adopted as the common seal of the Company.SECThe United States Securities and Exchange Commission.Securitiesshares and debt obligations of every kind, and options, warrants and rights to acquire shares, or debtobligations.SharesOrdinary Shares and/or Preferred Shares, as the case may be.solvency testa company satisfies the solvency test if;(i)the value of the company’s assets exceeds its liabilities, and(ii)the company is able to pay its debts as they fall due.treasury sharesshares in the Company that were previously issued but were repurchased, redeemed or otherwiseacquired by the Company and not cancelled.2.“Written” or any term of like import includes words typewritten, printed, painted, engraved, lithographed, photographed or represented or reproduced byany mode of reproducing words in a visible form, including telex, facsimile, telegram, cable or other form of writing produced by electronic communication.3.Save as aforesaid any words or expressions defined in the Act shall bear the same meaning in these Articles.4.Whenever the singular or plural number, or the masculine, feminine or neuter gender is used in these Articles, it shall equally, where the context admits,include the others.5.A reference in these Articles to voting in relation to shares shall be construed as a reference to voting by members holding the shares except that it is thevotes allocated to the shares that shall be counted and not the number of members who actually voted and a reference to shares being present at a meetingshall be given a corresponding construction.6.A reference to money in these Articles is, unless otherwise stated, a reference to the currency in which shares in the Company shall be issued according tothe provisions of the Memorandum.7REGISTERED SHARES7.Every member holding registered shares in the Company shall be entitled to a certificate signed by a director or officer of the Company or such otherperson who may be authorised from time to time by resolution of directors or under the Seal, with or without the signature of any director of the Company,specifying the share or shares held by him and the signature of the director or officer or person so authorised and the Seal may be facsimiles.8.Any member receiving a share certificate for registered shares shall indemnify and hold the Company and its directors and officers harmless from any lossor liability which it or they may incur by reason of any wrongful or fraudulent use or representation made by any person by virtue of the possessionthereof. If a share certificate for registered shares is worn out or lost it may be renewed on production of the worn out certificate or on satisfactory proof ofits loss together with such indemnity as may be required by a resolution of directors.9.If several persons are registered as joint holders of any shares, any one of such persons may give an effectual receipt for any distribution payable inrespect of such shares.10.Nothing in these Articles shall require title to any shares or other Securities to be evidenced by a certificate if the Act and the rules of the Designated StockExchange permit otherwise.SHARES AND ISSUED SHARES11.Subject to the provisions of these Articles and, if applicable, the rules of the Designated Stock Exchange, and any resolution of members, the directors ofthe Company may, without limiting or affecting any rights previously conferred on the holders of any existing shares or class or series of shares, offer, allot,grant options over or otherwise dispose of shares to such persons, at such times and upon such terms and conditions as the Company may by resolutionof directors determine. The directors shall not issue more shares than the maximum number provided for in the Memorandum.12.The Company may issue fully paid, partly paid or nil paid shares as well as bonus shares. A partly paid or nil paid share or a share issued for a promissorynote or other written obligation for payment of a debt may be issued subject to forfeiture in the manner prescribed in these Articles.13.Shares in the Company may be issued for consideration in any form, including money, a promissory note or other obligation to contribute money orproperty, real property, personal property (including goodwill and knowhow) services rendered or a contract for future services and the amount of suchconsideration shall be determined by resolution of directors, except that in the case of shares with par value, the amount shall not be less than the parvalue, and in the absence of fraud the decision of the directors as to the value of the consideration received by the Company in respect of the issue isconclusive unless a question of law is involved.14.Before issuing shares for a consideration other than money, the directors shall pass a resolution stating;(a)the amount to be credited for the issue of the shares;(b)their determination of the reasonable present cash value of the nonmoney consideration for the issue; and(c)that, in their opinion, the present cash value of the nonmoney consideration for the issue is not less than the amount to be credited for the issueof the shares.15.A share issued by the Company upon conversion of, or in exchange for, another share or a debt obligation or other security in the Company, shall betreated for all purposes as having been issued for money equal to the consideration received or deemed to have been received by the Company in respectof the other share, debt obligation or security.16.Treasury shares may be disposed of by the Company on such terms and conditions (not otherwise inconsistent with these Articles) as the Company mayby resolution of directors determine.17.Subject to these Articles, the Company may purchase, redeem or otherwise acquire and hold its own shares save that the Company may not purchase,redeem or otherwise acquire its own shares without the consent of the member whose shares are to be purchased, redeemed or otherwise acquired unlessthe Company is permitted by the Act or any other provision in the Memorandum or Articles to purchase, redeem or otherwise acquire the shares withouttheir consent.818.No purchase, redemption or other acquisition of shares shall be made unless the directors determine by resolution of the directors that immediately after thepurchase, redemption or other acquisition the value of the Company’s assets will exceed its liabilities and the Company will be able to pay its debts as theyfall due.19.Sections 60 (Process for acquisition of own shares), 61 (Offer to one or more shareholders) and 62 (Shares redeemed otherwise than at the option ofcompany) of the Act shall not apply to the Company.20.A determination by the directors under Article 18 is not required;(a)the Company redeems a share or shares pursuant to a right of a member to have his shares redeemed or to have his shares exchanged for moneyor other property of the Company; or(b)by virtue of the provisions of Section 179 of the Act.21.Shares that the Company purchases, redeems or otherwise acquires pursuant to Article 17 may be cancelled or held as treasury shares except to the extentthat such shares are in excess of 80 percent of the issued shares of the Company in which case they shall be cancelled but they shall be available forreissue.22.Shares in the Company shall only be held as treasury shares where the directors of the Company resolve as such and the number of shares acquired, whenaggregated with shares of the same class already held by the Company as treasury shares, does not exceed 50% of the shares of that class previouslyissued by the Company, excluding shares that have been cancelled. All rights and obligations attaching to a treasury share are suspended and shall not beexercised by or against the Company while it holds the share as a treasury share. Treasury shares may be reissued by the Company as new shares.23.The Company shall keep a register of members containing;(a)the names and addresses of the persons who hold registered shares in the Company;(b)the number of each class and series of registered shares held by each member;(c)the date on which the name of each member was entered in the register of members;(d)the date on which any person ceased to be a member; and(e)such other information as may be prescribed pursuant to the Act.24.The register of members may be in any such form as the directors may approve but if it is in magnetic, electronic or other data storage form, the companymust be able to produce legible evidence of its contents.25.The original or a copy of the register of members shall be kept at the registered office of the Company or at the office of the registered agent of theCompany.26.A share is deemed to be issued when the name of the member is entered in the register of members.27.Subject to the Act and the rules of the Designated Stock Exchange, the board of directors without further consultation with the holders of any shares orSecurities may resolve that any class or series of shares or other Securities from time to time in issue or to be issued (including shares in issue at the date ofthe adoption of these Articles) may be issued, held, registered and converted to uncertificated form.28.Conversion of shares held in certificated form into shares held in uncertificated form, and vice versa, may be made in such manner as the board of directors,in its absolute discretion, may think fit. The Company or any duly authorised transfer agent (a “Transfer Agent”) shall enter on the register of membershow many shares are held by each member in uncertificated form and in certificated form and shall maintain the register of members. Notwithstanding anyprovision of these Articles, a class or series of shares shall not be treated as two classes by virtue only of that class or series comprising both certificatedshares and uncertificated Shares or as a result of any provision of these Articles which apply only in respect of certificated or uncertificated shares.9MORTGAGES AND CHARGES OF REGISTERED SHARES29.Members may mortgage or charge their registered shares in the Company with such mortgage or charge being evidenced in writing and signed by, or withthe authority of the registered holder of a registered share to which the mortgage or charge relates. The Company shall give effect to the terms of any validmortgage or charge except insofar as it may conflict with any requirements herein contained for consent to the transfer of shares.30.In the case of the mortgage or charge of registered shares there may be entered in the share register of the Company at the request of the registered holderof such shares(a)a statement that the shares are mortgaged or charged;(b)the name of the mortgagee or chargee; and(c)the date on which the aforesaid particulars are entered in the share register.31.Where particulars of a mortgage or charge are entered in the register of members, such particulars shall be cancelled(a)with the written consent of the named mortgagee or chargee or anyone authorized to act on his behalf; or(b)upon evidence satisfactory to the directors of the discharge of the liability secured by the mortgage or charge and the issue of such indemnities asthe directors shall consider necessary or desirable.32.Whilst particulars of a mortgage or charge over registered shares are entered in the register of members pursuant to the preceding articles no transfer ofany share comprised therein shall be effected without the written consent of the named mortgagee or chargee or anyone authorized to act on his behalf.FORFEITURE33.When shares not fully paid on issue or issued for a promissory note or other written obligation for payment of a debt have been issued subject toforfeiture, the following provisions shall apply.34.Written notice specifying a date for payment to be made and the shares in respect of which payment is to be made shall be served on the member whodefaults in making payment pursuant to a promissory note or other written obligations to pay a debt.35.The written notice specifying a date for payment shall(a)name a further date not earlier than the expiration of 14 days from the date of service of the notice on or before which payment required by thenotice is to be made; and(b)contain a statement that in the event of nonpayment at or before the time named in the notice the shares, or any of them, in respect of whichpayment is not made will be liable to be forfeited.36.Where a written notice has been issued and the requirements of the notice have not been complied with within the prescribed time, the directors may at anytime before tender of payment forfeit and cancel the shares to which the notice relates.37.The Company is under no obligation to refund any moneys to the member whose shares have been forfeited and cancelled pursuant to these provisions.Upon forfeiture and cancellation of the shares the member is discharged from any further obligation to the Company with respect to the shares forfeitedand cancelled.10LIEN38.The Company shall have a first and paramount lien on every share issued for a promissory note or for any other binding obligation to contribute money orproperty or any combination thereof to the Company, and the Company shall also have a first and paramount lien on every share standing registered in thename of a member, whether singly or jointly with any other person or persons, for all the debts and liabilities of such member or his estate to the Company,whether the same shall have been incurred before or after notice to the Company of any interest of any person other than such member, and whether thetime for the payment or discharge of the same shall have actually arrived or not, and notwithstanding that the same are joint debts or liabilities of suchmember or his estate and any other person, whether a member of the Company or not. The Company’s lien on a share shall extend to all distributionspayable thereon. The directors may at any time either generally, or in any particular case, waive any lien that has arisen or declare any share to be wholly orin part exempt from the provisions of this Article.39.In the absence of express provisions regarding sale in the promissory note or other binding obligation to contribute money or property, the Company maysell, in such manner as the directors may by resolution of directors determine, any share on which the Company has a lien, but no sale shall be made unlesssome sum in respect of which the lien exists is presently payable nor until the expiration of twentyone days after a notice in writing, stating and demandingpayment of the sum presently payable and giving notice of the intention to sell in default of such payment, has been served on the holder for the timebeing of the share.40.The net proceeds of the sale by the Company of any shares on which it has a lien shall be applied in or towards payment of discharge of the promissorynote or other binding obligation to contribute money or property or any combination thereof in respect of which the lien exists so far as the same ispresently payable and any residue shall (subject to a like lien for debts or liabilities not presently payable as existed upon the share prior to the sale) bepaid to the holder of the share immediately before such sale. For giving effect to any such sale the directors may authorize some person to transfer theshare sold to the purchaser thereof. The purchaser shall be registered as the holder of the share and he shall not be bound to see to the application of thepurchase money, nor shall his title to the share be affected by any irregularity or invalidity in the proceedings in reference to the sale.TRANSFER OF SHARES41.Registered shares in the Company are transferred by a written instrument of transfer signed by the transferor and containing the name and address of thetransferee. The instrument of transfer shall be signed by the transferee if registration as a holder of the share shall impose a liability to the Company on thetransferee. The instrument of transfer of a registered share shall be sent to the Company for registration.42.The board of directors may resolve that interests in shares in the form of depositary receipts may be transferred or otherwise dealt with in accordance withthe regulations and practices instituted by the operator of the Relevant System and any holder of interests in shares shall be entitled to transfer suchinterests by means of such Relevant System and the operator of the Relevant System shall act as agent of the holders of such interests for the purposes ofthe transfer of those interests.43.The register of members may be closed at such times and for such periods as the board of directors may from time to time determine, upon notice beinggiven by advertisement in such newspapers as may be required by the Act and the practice of the Designated Stock Exchange.44.The transfer of a registered share is effective when the name of the transferee is entered on the register of members.45.If the directors of the Company are satisfied that an instrument of transfer relating to shares has been signed but that the instrument has been lost ordestroyed, they may resolve;(a)to accept such evidence of the transfer of the shares as they consider appropriate; and(b)that the transferee’s name should be entered in the register of members notwithstanding the absence of the instrument of transfer.46.The Company must on the receipt of an instrument of transfer from the transferor or transferee of a registered share in the Company enter the name of thetransferee of the share in the register or members unless the directors, if permitted by the Memorandum or these Articles, resolve by resolution of directorsto refuse or delay the registration of the transfer for reasons that shall be specified in the resolution of directors.11TRANSMISSION OF SHARES47.The personal representative of a deceased member may transfer a share even though the personal representative is not a member at the time of the transfer.48.The personal representative, executor or administrator of a deceased member, the guardian of an incompetent member or the trustee of a bankrupt membershall be the only person recognized by the Company as having any title to his share but they shall not be entitled to exercise any rights as a member of theCompany until they have proceeded as set forth in the next following three Articles.49.The production to the Company of any document which is evidence of probate of the will, or letters of administration of the estate, or confirmation asexecutor, of a deceased member or of the appointment of a guardian of an incompetent member or the trustee of a bankrupt member shall be accepted by theCompany even if the deceased, incompetent or bankrupt member is domiciled outside the British Virgin Islands if the document evidencing the grant ofprobate or letters of administration, confirmation as executor, appointment as guardian or trustee in bankruptcy is issued by a foreign court which hadcompetent jurisdiction in the matter. For the purpose of establishing whether or not a foreign court had competent jurisdiction in such a matter the directorsmay obtain appropriate legal advice. The directors may also require an indemnity to be given by the executor, administrator, guardian or trustee inbankruptcy.50.The Company may enter in the register of members the name of any person becoming entitled by operation of law or otherwise to a share or shares inconsequence of the death, incompetence or bankruptcy upon such evidence being produced as may reasonably be required by the directors.51.Any person who has become entitled to a share or shares in consequence of the death, incompetence or bankruptcy of any member may, instead of beingregistered himself, request in writing that some person to be named by him be registered as the transferee of such share or shares and such request shalllikewise be treated as if it were a transfer.52.What amounts to incompetence on the part of a person is a matter to be determined by the court having regard to all the relevant evidence and thecircumstances of the case.REDUCTION OR INCREASE IN AUTHORISED AND UNISSUED SHARES48.The Company may amend the Memorandum to increase or reduce the maximum number of shares the Company is authorised to issue and may in respect ofany unissued shares increase or reduce the number of such shares, or effect any combination of the foregoing.49.The Company may(1)(a) divide its shares, including issued shares, into a larger number of shares; or (b) combine its shares, including issued shares, into a smallernumber of shares.(2)A division or combination of shares, including issued shares, of a class or series shall be for a larger or smaller number, as the case may be, ofshares in the same class or series.(3)A company shall not divide its shares under subsection (1)(a) or (2) if it would cause the maximum number of shares that the Company isauthorised to issue by its memorandum to be exceeded.(4)Where shares are divided or combined under this article, the aggregate par value of the new shares must be equal to the aggregate par value of theoriginal shares.MEETINGS AND CONSENTS OF MEMBERS50.The directors of the Company may convene meetings of the members of the Company at such times and in such manner and places within or outside theBritish Virgin Islands as the directors consider necessary or desirable. The Company may hold an annual general meeting, but shall not (unless required bythe applicable rules of the Designated Stock Exchange for so long as the Company’s Securities are listed or traded on the Designated Stock Exchange) beobliged to hold an annual general meeting.51.Upon the written request of members holding 30 percent or more of the outstanding voting shares in the Company the directors shall convene a meeting ofmembers.1252.The directors shall give not less than 7 days notice of meetings of members to those persons whose names on the date the notice is given appear asmembers in the share register of the Company and are entitled to vote at the meeting.53.The directors may fix the date notice is given of a meeting of members as the record date for determining those shares that are entitled to vote at themeeting.54.A meeting of members may be called on short notice:(a)if members holding not less than 90 percent of the total number of shares entitled to vote on all matters to be considered at the meeting, or 90percent of the votes of each class or series of shares where members are entitled to vote thereon as a class or series together with not less than a90 percent majority of the remaining votes, have agreed to short notice of the meeting, or(b)if all members holding shares entitled to vote on all or any matters to be considered at the meeting have waived notice of the meeting and for thispurpose presence at the meeting shall be deemed to constitute waiver.55.The inadvertent failure of the directors to give notice of a meeting to a member, or the fact that a member has not received notice, does not invalidate themeeting.56.A member may be represented at a meeting of members by a proxy who may speak and vote on behalf of the member.57.The instrument appointing a proxy shall be produced at the place appointed for the meeting before the time for holding the meeting at which the personnamed in such instrument proposes to vote.58.An instrument appointing a proxy shall be in substantially the following form or such other form as the Chairman of the meeting shall accept as properlyevidencing the wishes of the member appointing the proxy.(Name of Company)I/Webeing a member of the aboveCompany withshares HEREBY APPOINTofor failing himofto be my/our proxy to vote for me/us at the meeting of members to be held on the dayofand at any adjournment thereof.(Any restrictions on voting to be inserted here.)Signed this day ofMember59.The following shall apply in respect of joint ownership of shares:a.if two or more persons hold shares jointly each of them may be present in person or by proxy at a meeting of members and may speak as a member;b.if only one of the joint owners is present in person or by proxy he may vote on behalf of all joint owners, andc.if two or more of the joint owners are present in person or by proxy they must vote as one.60.A member shall be deemed to be present at a meeting of members if he participates by telephone or other electronic means and all members participating inthe meeting are able to hear each other.61.A meeting of members is duly constituted if, at the commencement of the meeting, there are present in person or by proxy not less than 50 percent of thevotes of the shares or class or series of shares entitled to vote on resolutions of members to be considered at the meeting. If a quorum be present,notwithstanding the fact that such quorum may be represented by only one person then such person may resolve any matter and a certificate signed bysuch person accompanied where such person be a proxy by a copy of the proxy form shall constitute a valid resolution of members.1362.If within two hours from the time appointed for the meeting a quorum is not present, the meeting, if convened upon the requisition of members, shall bedissolved; in any other case it shall stand adjourned to the next business day at the same time and place or to such other time and place as the directorsmay determine, and if at the adjourned meeting there are present within one hour from the time appointed for the meeting in person or by proxy not lessthan one third of the votes of the shares or each class or series of shares entitled to vote on the resolutions to be considered by the meeting, those presentshall constitute a quorum but otherwise the meeting shall be dissolved.63.At every meeting of members, the Chairman of the Board of Directors shall preside as chairman of the meeting. If there is no Chairman of the Board ofDirectors or if the Chairman of the Board of Directors is not present at the meeting, the members present shall choose some one of their number to be thechairman. If the members are unable to choose a chairman for any reason, then the person representing the greatest number of voting shares present inperson or by prescribed form of proxy at the meeting shall preside as chairman failing which the oldest individual member or representative of a memberpresent shall take the chair.64.The chairman may, with the consent of the meeting, adjourn any meeting from time to time, and from place to place, but no business shall be transacted atany adjourned meeting other than the business left unfinished at the meeting from which the adjournment took place.65.At any meeting of the members the chairman shall be responsible for deciding in such manner as he shall consider appropriate whether any resolution hasbeen carried or not and the result of his decision shall be announced to the meeting and recorded in the minutes thereof. If the chairman shall have anydoubt as to the outcome of any resolution put to the vote, he shall cause a poll to be taken of all votes cast upon such resolution, but if the chairman shallfail to take a poll then any member present in person or by proxy who disputes the announcement by the chairman of the result of any vote mayimmediately following such announcement demand that a poll be taken and the chairman shall thereupon cause a poll to be taken. If a poll is taken at anymeeting, the result thereof shall be duly recorded in the minutes of that meeting by the chairman.66.Any person other than an individual shall be regarded as one member and subject to the specific provisions hereinafter contained for the appointment ofrepresentatives of such persons the right of any individual to speak for or represent such member shall be determined by the law of the jurisdiction where,and by the documents by which, the person is constituted or derives its existence. In case of doubt, the directors may in good faith seek legal advice fromany qualified person and unless and until a court of competent jurisdiction shall otherwise rule, the directors may rely and act upon such advice withoutincurring any liability to any member.67.Any person other than an individual which is a member of the Company may by resolution of its directors or other governing body authorize such personas it thinks fit to act as its representative at any meeting of the Company or of any class of members of the Company, and the person so authorized shall beentitled to exercise the same powers on behalf of the person which he represents as that person could exercise if it were an individual member of theCompany.68.The chairman of any meeting at which a vote is cast by proxy or on behalf of any person other than an individual may call for a notarially certified copy ofsuch proxy or authority which shall be produced within 7 days of being so requested or the votes cast by such proxy or on behalf of such person shall bedisregarded.69.Directors of the Company may attend and speak at any meeting of members of the Company and at any separate meeting of the holders of any class orseries of shares in the Company.70.An action that may be taken by the members at a meeting may also be taken by a resolution of members consented to in writing or by telex, telegram, cable,facsimile or other written electronic communication, without the need for any notice, but if any resolution of members is adopted otherwise than by theunanimous written consent of all members, a copy of such resolution shall forthwith be sent to all members not consenting to such resolution. The consentmay be in the form of counterparts, each counterpart being signed by one or more members.14DIRECTORS71.The first directors of the Company shall be appointed by the first registered agent of the Company and thereafter the directors shall be appointed byresolution of members, subject to Article 78, for such term as the members determine. A person shall not be appointed as a director unless he hasconsented in writing to be a director.72.The minimum number of directors shall be one and the maximum number shall be 20. Unless otherwise determined by the Company in a meeting ofshareholders and subject to the requirements of the Memorandum, the directors may by a Resolution of Directors, amend this Regulation 72 to change thenumber of directors. For as long as Securities of the Company are listed or traded on the Designated Stock Exchange, the directors shall include suchnumber of Independent Directors as applicable law, rules or regulations of the Designated Stock Exchange may require for a foreign private issuer as longas the Company is a foreign private issuer.73.Each director shall hold office for the term, if any, fixed by resolution of members or until his earlier death, resignation or removal.74.Where the Company has only one member who is an individual and that member is also the sole director of the Company, that sole member/director may, byinstrument in writing, nominate a person who is not disqualified from being a director of the Company under section 111(1) of the Act as a reserve directorof the Company to act in the place of the sole director in the event of his death.75.The nomination of a person as a reserve director of the Company ceases to have effect if;a.before the death of the sole member/director who nominated him;(i)he resigns as reserve director, or(ii)the sole member/director revokes the nomination in writing; orb.the sole member/director who nominated him ceases to be the sole member/director of the Company for any reason other than his death.76.A director may be removed from office, with or without cause, by a resolution of directors or a resolution of members. For the purposes of this Regulation76, “cause” means the willful and continuous failure by a director to substantially perform his duties to the Company (other than any such failure resultingfrom incapacity due to physical or mental illness) or the willful engaging by the director in gross misconduct materially and demonstrably injurious to theCompany. If a director is removed from office without cause by a resolution of the members, for the purposes of this Regulation, the resolution of memberswill require the affirmative vote of the holders of 66 2/3 percent or more of the outstanding votes of the shares entitled to vote thereon.77.A director may resign his office by giving written notice of his resignation to the Company and the resignation shall have effect from the date the notice isreceived by the Company or from such later date as may be specified in the notice. A director of the Company shall resign forthwith if he is, or becomes,disqualified to act as a director under the Act.78.The directors may at any time by resolution of directors appoint any person to be a director to fill a vacancy. There is a vacancy if a director dies orotherwise ceases to hold office as a director prior to the expiration of his term of office, where his term of office was fixed upon his appointment. Thedirectors may not appoint a director to fill a vacancy for a term exceeding the term that remained when the person who has ceased to be a director left orotherwise ceased to hold office.79.The Company shall keep a register of directors containing:a.the names and addresses of the persons who are directors of the Company or who have been nominated as reserve directors of the Company;b.the date on which each person whose name is entered in the register was appointed as a director of the Company or nominated as a reservedirector of the Company;c.the date on which each person named as a director ceased to be a director of the Company;d.the date on which the nomination of any person nominated as a reserve director ceased to have effect; ande.such other information as may be prescribed pursuant to the Act.1580.The original or a copy of any register of directors shall be kept at the office of the registered agent of the Company.81.The register of directors may be in any such form as the directors may approve but if it is in magnetic, electronic or other data storage form, the companymust be able to produce legible evidence of its contents.82.With the prior or subsequent approval by a resolution of members, the directors may, by a resolution of directors, fix the emoluments of directors withrespect to services to be rendered in any capacity to the Company.83.A director shall not require a share qualification and may be an individual or a company.POWERS OF DIRECTORS84.The business and affairs of the Company shall be managed by the directors who may pay all expenses incurred preliminary to and in connection with theformation and registration of the Company and may exercise all such powers of the Company as are not by the Act or by the Memorandum or theseArticles required to be exercised by the members of the Company, subject to any delegation of such powers as may be authorized by these Articles and tosuch requirements as may be prescribed by a resolution of members; but no requirement made by a resolution of members shall prevail if it be inconsistentwith these Articles nor shall such requirement invalidate any prior act of the directors which would have been valid if such requirement had not been made.Notwithstanding anything in Section 175 of the Act the directors shall have the power to sell, transfer, lease, exchange or otherwise dispose of more thanfifty percent of the assets of the Company without submitting a proposal to or obtaining the consent of the members of the Company.85.If the Company is a whollyowned subsidiary of a holding company a director may when exercising powers or performing duties as a director act in amanner which he believes is in the best interests of the holding company even though it may not be in the best interests of the Company.86.The directors may, by a resolution of directors, appoint any person, including a person who is a director, to be an officer or agent of the Company. Theresolution of directors appointing an agent may authorize the agent to appoint one or more substitutes or delegates to exercise some or all of the powersconferred on the agent by the Company.87.Every officer or agent of the Company has such powers and authority of the directors, including the power and authority to affix the Seal, as are set forth inthese Articles or in the resolution of directors appointing the officer or agent, except that no agent has any power or authority with respect to thefollowing;a.to amend the memorandum or articles;b.to change the registered office or agent;c.to designate committees of directors;d.to delegate powers to a committee of directors;e.to appoint or remove directors;f.to appoint or remove an agent;g.to fix emoluments of directors;h.to approve a plan of merger, consolidation or arrangement;i.to make a declaration of solvency for the purposes of section 198(1)(a) of the Act or to approve a liquidation plan;j.to make a determination under section 57(1) of the Act that the company will, immediately after a proposed distribution, satisfy the solvency test;ork.to authorise the Company to continue as a company incorporated under the laws of a jurisdiction outside the British Virgin Islands.1688.Any director which is a body corporate may appoint any person its duly authorized representative for the purpose of representing it at meetings of theBoard of Directors or with respect to unanimous written consents.89.The continuing directors may act notwithstanding any vacancy in their body, save that if their number is reduced to their knowledge below the numberfixed by or pursuant to these Articles as the necessary quorum for a meeting of directors, the continuing directors or director may act only for the purposeof appointing directors to fill any vacancy that has arisen or for summoning a meeting of members.90.The directors may by resolution of directors exercise all the powers of the Company to borrow money and to mortgage or charge its undertakings andproperty or any part thereof, to issue debentures, debenture stock and other securities whenever money is borrowed or as security for any debt, liability orobligation of the Company or of any third party.91.All cheques, promissory notes, drafts, bills of exchange and other negotiable instruments and all receipts for moneys paid to the Company, shall be signed,drawn, accepted, endorsed or otherwise executed, as the case may be, in such manner as shall from time to time be determined by resolution of directors.92.The Company shall keep a register of all relevant charges created by the Company showing:a.if the charge is a charge created by the Company, the date of its creation or if the charge is existing on property acquired by the Company, the dateon which the property was acquired;b.a short description of the liability secured by the charge;c.a short description of the property charged;d.the name and address of the trustee for the security, or if there is no such trustee the name and address of the chargee;e.unless the charge is a security to bearer, the name and address of the holder of the charge;f.details of any prohibition or restriction , if any, contained in the instrument creating the charge on the power of the company to create any futurecharge ranking in priority to or equally with the charge; andg.such other information as may be prescribed pursuant to the Act.93.The original or a copy of the register of charges shall be kept at the registered office of the Company or at the office of the registered agent of the Company.PROCEEDINGS OF DIRECTORS94.The directors of the Company or any committee thereof may meet at such times and in such manner and places within or outside the British Virgin Islandsas the directors may determine to be necessary or desirable. Any one or more directors may convene a meeting of directors.95.A director shall be deemed to be present at a meeting of directors if he participates by telephone or other electronic means and all directors participating inthe meeting are able to hear each other.96.A director shall be given not less than 3 days notice of meetings of directors, but a meeting of directors held without 3 days notice having been given to alldirectors shall be valid if all the directors entitled to vote at the meeting who do not attend, waive notice of the meeting and for this purpose, the presenceof a director at a meeting shall constitute waiver on his part. The inadvertent failure to give notice of a meeting to a director, or the fact that a director hasnot received the notice, does not invalidate the meeting.1797.A director may by a written instrument appoint an alternate who need not be a director and an alternate is entitled to attend meetings in the absence of thedirector who appointed him and to vote or consent in place of the director.98.A meeting of directors is duly constituted for all purposes if at the commencement of the meeting there are present in person or by alternate not less thanone half of the total number of directors, unless there are only 2 directors in which case the quorum shall be 2.99.If the Company shall have only one director the provisions herein contained for meetings of the directors shall not apply but such sole director shall havefull power to represent and act for the Company in all matters as are not by the Act or the Memorandum or these Articles required to be exercised by themembers of the Company and in lieu of minutes of a meeting shall record in writing and sign a note or memorandum of all matters requiring a resolution ofdirectors. Such a note or memorandum shall constitute sufficient evidence of such resolution for all purposes.100.At every meeting of the directors the Chairman of the Board of Directors shall preside as chairman of the meeting. If there is no Chairman of the Board ofDirectors or if the Chairman of the Board of Directors is not present at the meeting the Vice Chairman of the Board of Directors shall preside. If there is noVice Chairman of the Board of Directors or if the Vice Chairman of the Board of Directors is not present at the meeting the directors present shall choosesome one of their number to be chairman of the meeting.101.An action that may be taken by the directors or a committee of directors at a meeting may also be taken by a resolution of directors or a committee ofdirectors consented to in writing or by telex, telegram, cable, facsimile or other written electronic communication by all directors or all members of thecommittee as the case may be, without the need for any notice. The consent may be in the form of counterparts, each counterpart being signed by one ormore directors.102.The directors shall cause the following records to be kept:a.minutes of all meetings of directors, members, committees of directors and committees of members; andb.copies of all resolutions consented to by directors, members, committees of directors and committees of members.103.The resolutions, records and minutes referred to in the preceding Article shall be kept at the registered office of the Company, its principal place ofbusiness or at such other place as the directors determine.104.The directors may, by resolution of directors, designate one or more committees, each consisting of one or more directors.105.Subject to the following Article, each committee of directors has such powers and authorities of the directors, including the power and authority to affix theSeal, as are set forth in the resolution of directors establishing the committee.106.The directors have no power to delegate the following powers to a committee of directors;a.to amend the memorandum or articles;b.to change the registered office or agent;c.to designate committees of directors;d.to delegate powers to a committee of directors;e.to appoint or remove directors;f.to appoint or remove an agent;g.to fix emoluments of directors;18h.to approve a plan of merger, consolidation or arrangement;i.to make a declaration of solvency for the purposes of section 198(1)(a) or to approve a liquidation plan;j.to make a determination under section 57(1) that the company will, immediately after a proposed distribution, satisfy the solvency test; ork.to authorise the company to continue as a company incorporated under the laws of a jurisdiction outside the British Virgin Islands.Paragraphs (c) and (d) do not prevent a committee of directors, where authorised by the directors, from appointing a subcommittee and delegating powersexercisable by the committee to the subcommittee.107.The meetings and proceedings of each committee of directors consisting of 2 or more directors shall be governed mutatis mutandis by the provisions ofthese Articles regulating the proceedings of directors so far as the same are not superseded by any provisions in the resolution establishing the committee.108.Without prejudice to the freedom of the directors to establish any other committee, if the shares (or depositary receipts therefore) are listed or quoted onthe Designated Stock Exchange, and if required by the Designated Stock Exchange, the directors shall establish and maintain an audit committee as acommittee of the board of directors, the composition and responsibilities of which shall comply with the rules and regulations of the SEC and theDesignated Stock Exchange. The audit committee shall meet at least once every financial quarter, or more frequently as circumstances dictate.109.The Company shall adopt a formal written audit committee charter and review and assess the adequacy of the formal written charter on an annual basis.The charter shall specify the responsibilities of the Audit Committee which shall include responsibility for, among other things, ensuring its receipt from theoutside auditors of the Company of a formal written statement delineating all relationships between the auditor and the Company, and the AuditCommittee’s responsibility for actively engaging in a dialogue with the auditor with respect to any disclosed relationships or services that may impact theobjectivity and independence of the auditor take appropriate action to oversee the independence of the outside auditor. In addition, the Audit Committee isresponsible for reviewing potential conflict of interest situations and approving all Related Party Transactions.110.Without prejudice to the freedom of the directors to establish any other committees, the Board may establish a Stock Option Committee to administer theCompany’s stock option plans, including authority to make and modify awards under such plans. For so long as the Securities of the Company are listed ortraded on the Designated Stock Exchange, the Stock Option Committee shall have at least two Independent Directors. The Stock Option Committee willadminister the Company’s stock option plans, including the authority to make and modify awards under such plans.111.Without prejudice to the freedom of the directors to establish any other committees, the Board may establish a Nominating Committee to assist the Board inidentifying qualified individuals to become members of the Board.OFFICERS112.The Company may by resolution of directors appoint officers of the Company at such times as shall be considered necessary or expedient. Such officersmay consist of a Chairman of the Board of Directors, a Vice Chairman of the Board of Directors, a President and one or more Vice Presidents, Secretaries andTreasurers and such other officers as may from time to time be deemed desirable. Any number of offices may be held by the same person.113.The officers shall perform such duties as shall be prescribed at the time of their appointment subject to any modification in such duties as may beprescribed thereafter by resolution of directors or resolution of members, but in the absence of any specific allocation of duties it shall be the responsibilityof the Chairman of the Board of Directors to preside at meetings of directors and members, the Vice Chairman to act in the absence of the Chairman, thePresident to manage the day to day affairs of the Company, the Vice Presidents to act in order of seniority in the absence of the President but otherwise toperform such duties as may be delegated to them by the President, the Secretaries to maintain the share register, minute books and records (other thanfinancial records) of the Company and to ensure compliance with all procedural requirements imposed on the Company by applicable law, and the Treasurerto be responsible for the financial affairs of the Company.19114.Subject to the rules of the Designated Stock Exchange, the emoluments of all officers shall be fixed by resolution of directors.115.The officers of the Company shall hold office until their successors are duly elected and qualified, but any officer elected or appointed by the directors maybe removed at any time, with or without cause, by resolution of directors. Any vacancy occurring in any office of the Company may be filled by resolutionof directors.CONFLICT OF INTERESTS116.A director of the Company shall, forthwith after becoming aware of the fact that he is interested in a transaction entered into or to be entered into by theCompany, disclose the interest to all other directors of the Company.117.A director of the Company is not required to comply with Article 112 if;a.the transaction or proposed transaction is between the director and the Company; andb.the transaction or proposed transaction is or is to be entered into in the ordinary course of the company’s business and on usual terms andconditions.118.For the purposes of Article 112 a disclosure to all other directors to the effect that a director is a member, director or officer of another named entity or has afiduciary relationship with respect to the entity or a named individual and is to be regarded as interested in any transaction which may, after the date of theentry or disclosure, be entered into with that entity or individual, is a sufficient disclosure of interest in relation to that transaction.119.A.A director of the Company who is interested in a transaction entered into or to be entered into by the Company may:(i)vote on a matter relating to the transaction;(ii)attend a meeting of directors at which a matter relating to the transaction arises and be included among the directors present at the meeting for thepurposes of a quorum; and(iii)sign a document on behalf of the Company, or do any other thing in his capacity as a director, that relates to the transaction,and, subject to compliance with the Act shall not, by reason of his office be accountable to the Company for any benefit which he derives from suchtransaction and no such transaction shall be liable to be avoided on the grounds of any such interest or benefit.119.B.For so long the Securities of the Company are listed or traded on the Designated Stock Exchange, the Company shall conduct an appropriate review of allmaterial Related Party Transactions on an ongoing basis and shall utilize the Audit Committee for the review and approval of potential conflicts of interestsituations.INDEMNIFICATION120.Subject to the limitations hereinafter provided the Company may indemnify against all expenses, including legal fees, and against all judgments, fines andamounts paid in settlement and reasonably incurred in connection with legal, administrative or investigative proceedings any person who;a.is or was a party or is threatened to be made a party to any threatened, pending or completed proceedings, whether civil, criminal, administrative orinvestigative, by reason of the fact that the person is or was a director, an officer or a liquidator of the Company; orb.is or was, at the request of the Company, serving as a director of, or in any other capacity is or was acting for, another body corporate or apartnership, joint venture, trust or other enterprise.20121.The Company may only indemnify a person if the person acted honestly and in good faith in what he believed to be in the best interests of the Companyand, in the case of criminal proceedings, the person had no reasonable cause to believe that his conduct was unlawful.122.For the purposes of the preceding Article, a director acts in the best interests of the Company if he acts in the best interests of;a.the Company’s holding company; orb.a shareholder or shareholders of the Company; in either case, in the circumstances specified in Article 85.123.The decision of the directors as to whether the person acted honestly and in good faith and with a view to the best interests of the Company and as towhether the person had no reasonable cause to believe that his conduct was unlawful is, in the absence of fraud, sufficient for the purposes of theseArticles, unless a question of law is involved.124.The termination of any proceedings by any judgment, order, settlement, conviction or the entering of a nolle prosequi does not, by itself, create apresumption that the person did not act honestly and in good faith and with a view to the best interests of the Company or that the person had reasonablecause to believe that his conduct was unlawful.Consolidated Statements of Changes in Stockholder’s EquityF5Consolidated Statements of Cash FlowsF6Notes to Consolidated Financial StatementsF7 F22F1REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRMTo the Shareholder and the Sole Director ofLK Technology Ltd.Opinion on the Consolidated Financial StatementsWe have audited the accompanying consolidated balance sheets of LK Technology Ltd. and. subsidiaries (the “Company”) as of December 31, 2017 and 2016, andthe related consolidated statements of operations and comprehensive loss, changes in shareholder’s equity and cash flows for each of the years then ended, andthe related notes (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in allmaterial respects, the consolidated financial position of the Company as of December 31, 2017 and 2016, and the consolidated results of its operations and its cashflows for each of the years then ended, in conformity with accounting principles generally accepted in the United States of America.Basis for OpinionThese consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’sconsolidated financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (UnitedStates) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules andregulations of the Securities and Exchange Commission and the PCAOB.We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonableassurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have,nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internalcontrol over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting.Accordingly, we express no such opinion.An independent member firm of Moore Stephens International Limited – members in principal cities throughout the worldOur audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, andperforming procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in theconsolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well asevaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion.Certified Public AccountantsWe have served as the Company’s auditor since 2018.Hong KongMay 25, 2018F2LK TECHNOLOGY LTD. AND SUBSIDIARIESCONSOLIDATED BALANCE SHEETS(IN U.S. DOLLARS)As of December 31,20172016AssetsCurrent assets:Cash and cash equivalents$72,379$83,843Accounts receivable, net of allowance for doubtful accounts9,729,6251,865,836Other receivables and prepayment2,376,7452,287,934Amounts due from related parties11,760,692Total current assets23,939,4414,237,613Property and equipment, net5,044,8727,771,027Intangible assets, net1,154,1971,682,445Goodwill7,239,9367,239,936Amount due from a related party204,412183,811TOTAL ASSETS37,582,85821,114,832LiabilitiesCurrent liabilities:Accounts payable8,784,5186,446,584Accrued liabilities and other payables12,962,91211,329,613Amounts due to related parties3,563,68316,129,323Total current liabilities25,311,11333,905,520Total liabilities25,311,11333,905,520Commitments and contingenciesShareholder’s Equity (Deficit)Share capitalCommon stock, $1 par value per share; 50,000 shares authorized as of December 31, 2017 and 2016, 1 share issued andoutstanding as of December 31, 2017 and 201611Additional paidin capital41,819,68510,037,469Accumulated deficit(29,936,158)(23,125,704)Accumulated other comprehensive income (loss)388,217297,546Total Shareholder’s Equity (Deficit)12,271,745(12,790,688)TOTAL LIABILITIES AND SHAREHOLDER’S EQUITY (DEFICIT)$37,582,858$21,114,832F3LK TECHNOLOGY LTD. AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS(IN U.S. DOLLARS)For the years endedDecember 31,20172016Revenues$26,082,417$5,233,145Less: Cost of revenues5,547,7796,315,504Less: Operating expenses:Selling and marketing23,908,7336,209,804General and administrative2,451,2492,108,854Research and development1,046,1982,882,202Total operating expenses27,406,18011,200,860Loss from operations(6,871,542)(12,283,219)Other income (expense):Interest expense(26,611)(4,412)Foreign exchange gains (losses)350,679(298,257)Loss from investment(428,571)Other income (expense), net(262,980)(34,572)Total other income (expense), net61,088(765,812)Loss before income taxes(6,810,454)(13,049,031)Income taxesNet loss$(6,810,454)$(13,049,031)Other comprehensive income:Foreign currency translation adjustment90,671387,375Total comprehensive loss$(6,719,783)$(12,661,656)F4LK TECHNOLOGY LTD. AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDER’S EQUITY(IN U.S. DOLLARS)Accumulated otherTotalOrdinary sharesAdditionalpaidin AccumulatedcomprehensiveIncomeShareholder’sEquity SharesAmountcapitaldeficits(loss)(Deficit)Balance as of December 31, 20151$ 1$8,250,505$(10,076,673)$(89,829)$(1,915,996)Capital contribution from C Media1,786,9641,786,964Net loss(13,049,031)(13,049,031)Foreign currency translation adjustment387,375387,375Balance as of December 31, 20161110,037,469(23,125,704)297,546(12,790,688)Capital contribution from C Media31,782,21631,782,216Net loss(6,810,454)(6,810,454)Foreign currency translation adjustment90,67190,671Balance as of December 31, 20171$1$41,819,685$(29,936,158)$388,217$12,271,745F5LK TECHNOLOGY LTD. AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF CASH FLOWS(IN U.S. DOLLARS)For the years endedDecember 31,20172016CASH FLOWS FROM OPERATING ACTIVITIES:Net loss$(6,810,454)$(13,049,031)Depreciation and amortization3,316,1813,245,161Loss on disposal of property and equipment115,19373,022Increase in allowance for doubtful accounts445,39562,591Changes in assets and liabilitiesAccounts receivable(7,933,730)(1,507,296)Other receivables and prepayment(2,202,960)2,873,984Accounts payable2,230,5434,757,457Accrued liabilities and other payables1,866,1377,483,441Net cash (used in) provided by operating activities(8,973,695)3,939,329CASH FLOWS FROM INVESTING ACTIVITIES:Purchase of property and equipment(12,689)(3,554,258)Proceeds from disposal of property and equipment29,942Net cash provided by (used in) investing activities17,253(3,554,258)CASH FLOWS FROM FINANCING ACTIVITIES:Advances from related parties8,938,290(1,197,870)Net cash provided by (used in) financing activities8,938,290(1,197,870)Effect of exchange rate changes6,688(32,746)Net decrease in cash and cash equivalents(11,464)(845,545)Cash and cash equivalents, at beginning of year83,843929,388Cash and cash equivalents, at end of year$72,379$83,843Supplemental cash flow disclosures:Interest paid26,6114,412Income taxes paidF6LK TECHNOLOGY LTD. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS(IN U.S. DOLLARS)NOTE 1 – DESCRIPTION OF BUSINESS AND ORGANIZATIONStar Chariot Limited was incorporated in the British Virgin Islands (“BVI”) as an exempted limited liability company on March 3, 2011. On January 18, 2018, it wasrenamed as LK Technology Ltd. (“LK Technology ” or the “Company”).LK Technology, its subsidiaries and its variable interest entities (“VIEs”) (collectively the “Group”) operate mobile application service for longdistance travel in thePeople’s Republic of China (the “PRC”). The core mobile application product, Luokuang, is made as an LBSsocial contents and services distribution platform. Itoffers functions based on various travel scenarios, e.g. information, entertainment, travel, ecommerce, O2O, advertising, etc.As of December 31, 2017, details of the Company’s subsidiaries and VIEs are as follows:NameDate ofincorporationPlace ofincorporationPercentage oflegal ownershipSubsidiaries:MMB LimitedApr 11, 2013Hong Kong100%Mobile Media (China) LimitedNov 6, 2007Hong Kong100%Zhong Chuan Tian Xia Information and Technology (Beijing) LimitedFeb 1, 2013PRC100%Zhong Chuan Tian Xia Information and Technology (Shenzhen) LimitedDec 23, 2010PRC100%VIEs:Beijing Zhong Chuan Shi Xun Technology Limited (“Zhong Chuan Shi Xun”)May 17, 2004PRC100%Jiangsu Zhong Chuan Rui You Information and Technology Limited (“Zhong Chuan Rui You”)May 26, 2011PRC100%Huoerguosi Luokuang Information and Technology Limited (“Huoerguosi Luokuang”)Jul 19, 2017PRC100%Shenzhen Jiu Zhou Shi Dai Digital and Technology Limited (“Jiu Zhou Shi Dai”)Nov 26, 2004PRC100%F7NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIESBasis of presentationThe consolidated financial statements of the Group have been prepared in accordance with accounting principles generally accepted in the United States of America(“US GAAP”).The Group incurred losses from operations of $6,871,542 and $12,283,219 for the years ended December 31, 2017 and 2016, respectively. As of December 31, 2017, theGroup had a shareholder’s equity of $12,271,145. The Group had negative cash flows from operating activities for the year ended December 31, 2017 of $8,973,695.As of December 31, 2017, the Group had cash and cash equivalents of $72,379 and a working capital deficit of $1,371,672. From 2018 and onwards, the Group willfocus on improving operation efficiency and cost reduction, and enhancing marketing functions to attract more users. The Group regularly monitors its current andexpected liquidity requirements to ensure that it maintains sufficient cash balances and accessible credit to meet its liquidity requirements in the short and long term.The parent company continues to provide cash flow to the Group. Based on working capital conditions and forecast for future operations, the Group believes that itwill be able to meet its payment obligations and other commitments for at least the following twelve months.Principles of consolidationThe consolidated financial statements include the financial statements of the Company, its subsidiaries, including the whollyforeign owned enterprises (“WFOEs”),and VIEs for which the Company is the primary beneficiary. All transactions and balances among the Company, its subsidiaries and consolidated VIEs have beeneliminated upon consolidation. The results of subsidiaries and consolidated VIEs acquired or disposed of are recorded in the consolidated statements of operationsfrom the effective date of acquisition or up to the effective date of disposal, as appropriate.A subsidiary is an entity in which (i) the Company directly or indirectly controls more than 50% of the voting power; or (ii) the Company has the power to appoint orremove the majority of the members of the board of directors or to cast a majority of votes at the meeting of the board of directors or to govern the financial andoperating policies of the investee pursuant to a statute or under an agreement among the shareholders or equity holders. A VIE is required to be consolidated by theprimary beneficiary of the entity if the equity holders in the entity do not have the characteristics of a controlling financial interest or do not have sufficient equity atrisk for the entity to finance its activities without additional subordinated financial support from other parties.F8To comply with the PRC legal restrictions on foreign ownership of companies that operate mobile application services, the Group operates in such restricted servicesin the PRC through certain PRC domestic companies, whose equity interests are held by certain management members or founders of the Group. Part of theregistered capital of these PRC domestic companies was funded by certain management members or founders of the Group. The Group has entered into certainexclusive business services agreements with these PRC domestic companies, which entitle it to receive a majority of their residual returns and make it obligatory forthe Group to absorb a majority of the risk of losses from their activities. In addition, the Group has entered into certain agreements with those management membersor founders, including equity interest pledge agreements of the equity interests held by those management members or founders and exclusive option agreements toacquire the equity interests in these companies when permitted by the PRC laws, rules and regulations.Details of the typical VIE structure of the Group’s significant consolidated VIEs, primarily domestic companies associated with the operations such as Zhong ChuanShi Xun, Zhong Chuan Rui You, Huoerguosi Luokuang and Jiu Zhou Shi Dai, are set forth below:(i)Contracts that give the Group effective control of VIEsExclusive option agreementsThe VIE equity holders have granted the WFOEs exclusive call options to purchase their equity interest in the VIEs at an exercise price equal to the higherof (i) the registered capital in the VIEs; and (ii) the minimum price as permitted by applicable PRC laws. Each relevant VIE has further granted the relevantWFOE an exclusive call option to purchase its assets at an exercise price equal to the book value of the assets or the minimum price as permitted byapplicable PRC laws, whichever is higher. The WFOEs may nominate another entity or individual to purchase the equity interest or assets, if applicable,under the call options. Each call option is exercisable subject to the condition that applicable PRC laws, rules and regulations do not prohibit completion ofthe transfer of the equity interest or assets pursuant to the call option. Each WFOE is entitled to all dividends and other distributions declared by the VIE,and the VIE equity holders have agreed to give up their rights to receive any distributions or proceeds from the disposal of their equity interests in the VIEwhich are in excess of the original registered capital that they contributed to the VIE, and to pay any such distributions or premium to the WFOE. Theexclusive call option agreements remain in effect until the equity interest or assets that are the subject of such agreements are transferred to the WFOEs.Equity pledge agreementsPursuant to the relevant equity pledge agreements, the relevant VIE equity holders have pledged all of their interests in the equity of the VIEs as acontinuing first priority security interest in favor of the corresponding WFOEs to secure the performance of obligations by the VIEs and/or the equityholders under the other structure contracts. Each WFOE is entitled to exercise its right to dispose of the VIE equity holders’ pledged interests in the equityof the VIE and has priority in receiving payment by the application of proceeds from the auction or sale of such pledged interests, in the event of anybreach or default under the loan agreement or other structure contracts, if applicable. These equity pledge agreements remain in force for the duration ofthe relevant loan agreement and other structure contracts.F9(ii)Contracts that enable the Group to receive substantially all of the economic benefits from the VIEsExclusive business services agreementsEach relevant VIE has entered into an exclusive business services agreement with the respective WFOE, pursuant to which the relevant WFOE providesexclusive business services to the VIE. In exchange, the VIE pays a service fee to the WFOE which typically amounts to what would be substantially all ofthe VIE’s pretax profit, resulting in a transfer of substantially all of the profits from the VIE to the WFOE.Other arrangementsThe exclusive call option agreements described above also enable the Group to receive substantially all of the economic benefits from the VIEs by typicallyentitling the WFOEs to all dividends and other distributions declared by the VIEs and to any distributions or proceeds from the disposal by the VIE equityholders of their equity interests in the VIEs that are in excess of the original registered capital that they contributed to the VIEs.Based on these contractual agreements, the Group believes that the PRC domestic companies as described above should be considered as VIEs because the equityholders do not have significant equity at risk nor do they have the characteristics of a controlling financial interest. Given that the Group is the primary beneficiaryof these PRC domestic companies, the Group believes that these VIEs should be consolidated based on the structure as described above.Under the contractual arrangements with the consolidated VIEs, the Group has the power to direct activities of the consolidated VIEs and can have assetstransferred out of the consolidated VIEs under its control. Therefore, the Group considers that there is no asset in any of the consolidated VIEs that can be usedonly to settle obligations of the consolidated VIEs, except for registered capital and PRC statutory reserves. As all consolidated VIEs are incorporated as limitedliability companies under the Company Law of the PRC, creditors of the consolidated VIEs do not have recourse to the general credit of the Group for any of theliabilities of the consolidated VIEs.Currently there is no contractual arrangement which requires the Group to provide additional financial support to the consolidated VIEs. However, as the Groupconducts its businesses primarily based on the licenses and approvals held by its consolidated VIEs, the Group has provided and will continue to provide financialsupport to the consolidated VIEs considering the business requirements of the consolidated VIEs, as well as the Group’s own business objectives in the future.F10Use of estimatesThe preparation of financial statements in conformity with US GAAP requires the Group to make estimates and assumptions that affect the reported amounts ofassets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expensesduring the reporting period. The most significant estimates are the allowance for doubtful accounts, the useful lives of property and equipment and intangibleassets, impairment of longlived assets and goodwill. Actual results could differ from those estimates.Fair value measurementsFair value is the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at themeasurement date under current market conditions. When determining the fair value measurements for assets and liabilities required or permitted to be recorded atfair value, the Group considers the principal or most advantageous market in which it would transact and it considers assumptions that market participants woulduse when pricing the asset or liability.Authoritative literature provides a fair value hierarchy which prioritizes the inputs to valuation techniques used to measure fair value into three broad levels. Thelevel in the hierarchy within which the fair value measurement in its entirety falls is based upon the lowest level of input that is significant to the fair valuemeasurement as follows:Level 1Level 1 applies to assets or liabilities for which there are quoted prices in active markets for identical assets or liabilities.Level 2Level 2 applies to assets or liabilities for which there are inputs other than quoted prices included within Level 1 that are observable for the asset or liability such asquoted prices for similar assets or liabilities in active markets; quoted prices for identical assets or liabilities in markets with insufficient volume or infrequenttransactions (less active markets); or modelderived valuations in which significant inputs are observable or can be derived principally from, or corroborated by,observable market data.Level 3Level 3 applies to assets or liabilities for which there are unobservable inputs to the valuation methodology that are significant to the measurement of the fair valueof the assets or liabilities.F11Cash and cash equivalentsCash and cash equivalents primarily consist of cash, money market funds, investments in interest bearing demand deposit accounts, time deposits and highly liquidinvestments with original maturities of three months or less from the date of purchase and are stated at cost which approximates their fair value. The Group has nocash equivalents.Accounts receivable, net of allowanceAccounts receivable are recognized and carried at the original invoiced amount less an allowance for any potential uncollectible amounts. An estimate for doubtfuldebts is made when collection of the full amount is no longer probable. Bad debts are written off as incurred. The Group generally does not require collateral from itscustomers.The Group maintains allowances for doubtful accounts for estimated losses resulting from the failure of customers to make payments on time. The Group reviews theaccounts receivable on a periodic basis and makes specific allowances when there is doubt as to the collectability of individual balances. In evaluating thecollectability of individual receivable balances, the Group considers many factors, including the age of the balance, the customer’s payment history, its currentcreditworthiness and current economic trends.Property and equipment, netProperty and equipment are carried at cost less accumulated depreciation. Depreciation is calculated on a straightline basis over the following estimated usefullives:Wifi equipment– 3 yearsOffice equipment– 3 to 5 yearsVehicles– 5 yearsCosts of repairs and maintenance are expensed as incurred and asset improvements are capitalized. The gain or loss on disposal of property and equipment is thedifference between the net sales proceeds and the carrying amount of the relevant assets and is recognized in the consolidated income statement. When propertyand equipment are retired or otherwise disposed of, the cost and accumulated depreciation are removed from the accounts and any resulting gain or loss is includedin the results of operations for the respective period.Construction in progressAssets under construction are not depreciated until construction is completed and the assets are ready for their intended use.F12Intangible assetsIntangible assets with finite lives are amortized using the straightline method over the estimated economic lives.Intangible assets have weighted average economic lives from the date of purchase as follows:Software– 5 yearsTrademarks– 10 yearsGoodwillThe Group assesses goodwill for impairment in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”)subtopic 35020, Intangibles—Goodwill and Other: Goodwill (“ASC 35020”), which requires that goodwill to be tested for impairment at the reporting unit level atleast annually and more frequently upon the occurrence of certain events, as defined by ASC 35020.We have the option to assess qualitative factors first to determine whether it is necessary to perform the twostep test in accordance with ASC 35020. If we believe,as a result of the qualitative assessment, that it is morelikelythannot that the fair value of the reporting unit is less than its carrying amount, the twostepquantitative impairment test described below is required. Otherwise, no further testing is required. In the qualitative assessment, we consider primary factors such asindustry and market considerations, overall financial performance of the reporting unit, and other specific information related to the operations. In performing thetwostep quantitative impairment test, the first step compares the carrying amount of the reporting unit to the fair value of the reporting unit based on either quotedmarket prices of the ordinary shares or estimated fair value using a combination of the income approach and the market approach. If the fair value of the reportingunit exceeds the carrying value of the reporting unit, goodwill is not impaired and we are not required to perform further testing. If the carrying value of the reportingunit exceeds the fair value of the reporting unit, then we must perform the second step of the impairment test in order to determine the implied fair value of thereporting unit’s goodwill. The fair value of the reporting unit is allocated to its assets and liabilities in a manner similar to a purchase price allocation in order todetermine the implied fair value of the reporting unit goodwill. If the carrying amount of the goodwill is greater than its implied fair value, the excess is recognized asan impairment loss.In 2017, we performed a qualitative assessment for goodwill. Based on the requirements of ASC35020, we evaluated all relevant factors, including but not limited tomacroeconomic conditions, industry and market conditions, financial performance. We weighed all factors in their entirety and concluded that it was not morelikelythannot the fair value was less than the carrying amount of the reporting unit, and further impairment testing on goodwill was unnecessary as of December 31, 2017and 2016.F13Impairment or disposal of longlived assetsLonglived assets other than goodwill are included in impairment evaluations when events and circumstances exist that indicate the carrying value of these assetsmay not be recoverable. In accordance with FASB ASC 360, Property, Plant and Equipment, the Group assesses the recoverability of the carrying value of longlivedassets by first grouping its longlived assets with other assets and liabilities at the lowest level for which identifiable cash flows are largely independent of the cashflows of other assets and liabilities (the asset group) and, secondly, estimating the undiscounted future cash flows that are directly associated with and expected toarise from the use of and eventual disposition of such asset group. If the carrying value of the asset group exceeds the estimated undiscounted cash flows, theGroup recognizes an impairment loss to the extent the carrying value of the longlived asset exceeds its fair value. The Group determines fair value through quotedmarket prices in active markets or, if quotations of market prices are unavailable, through the performance of internal analysis using a discounted cash flowmethodology or obtains external appraisals from independent valuation firms. The undiscounted and discounted cash flow analyses are based on a number ofestimates and assumptions, including the expected period over which the asset will be utilized, projected future operating results of the asset group, discount rateand longterm growth rate.As of December 31, 2017 and 2016, the Group assessed the impairment of its longlived assets and concluded that there was no impairment indication.Business combinationWe account for business combinations using the purchase method of accounting in accordance with FASB ASC topic 805, Business combinations. The purchasemethod accounting requires that the consideration transferred be allocated to the assets, including separately identifiable assets and liabilities we acquired, basedon their estimated fair values. The consideration transferred in an acquisition is measured as the aggregate of the fair values at the date of exchange of the assetsgiven, liabilities incurred, and equity instruments issued as well as the contingent considerations and all contractual contingencies as of the acquisition date. Thecosts directly attributable to the acquisition are expensed as incurred. Identifiable assets, liabilities and contingent liabilities acquired or assumed are measuredseparately at their fair value as of the acquisition date, irrespective of the extent of any noncontrolling interests. The excess of (i) the total of cost of acquisition, fairvalue of the noncontrolling interests and acquisition date fair value of any previously held equity interest in the acquiree over (ii) the fair value of the identifiable netassets of the acquiree, is recorded as goodwill. If the cost of acquisition is less than the fair value of the net assets of the subsidiary acquired, the difference isrecognized directly in earnings.Revenue recognitionThe Group recognizes revenue in accordance with FASB ASC topic 605, Revenue Recognition (“ASC 605”). Revenue is recognized when the following four revenuerecognition criteria are met: (i) persuasive evidence of an arrangement exists, (ii) delivery has occurred or services have been provided, (iii) the selling price is fixed ordeterminable, and (iv) collectability is reasonably assured.F14Displaybased online advertising servicesThe Group provides displaybased online advertising services to customers by integrating text description, image and video, and displaying the advertisements in aprominent position of LuoKuang Application. The Group recognizes revenue in accordance with ASC 605, over the contractual term based on the agreements andconfirmation letters signed by both parties, commencing on the date the customer’s advertisement is displayed on the Group’s platform.Foreign currency translationThe functional and reporting currency of the Company and the Company’s subsidiaries domiciled in BVI and Hong Kong are the United States dollar (“U.S. dollar”).The financial records of the Company’s other subsidiaries and VIEs located in the PRC are maintained in their local currency, the Chinese Renminbi (“RMB”), whichare the functional currency of these entities.Monetary assets and liabilities denominated in currencies other than the functional currency are translated into the functional currency at the rates of exchangeruling at the balance sheet date. Transactions in currencies other than the functional currency during the year are converted into the functional currency at theapplicable rates of exchange prevailing when the transactions occurred. Transaction gains and losses are recognized in the statements of operations.The Company’s entities with a functional currency of RMB translate their operating results and financial position into the U.S. dollar, the Company’s reportingcurrency. Assets and liabilities are translated using the exchange rates in effect on the balance sheet date. Revenues, expenses, gains and losses are translatedusing the average rate for the year. Retained earnings and equity are translated using the historical rate. Translation adjustments are reported as cumulativetranslation adjustments and are shown as a separate component of other comprehensive income.Income taxesDeferred income taxes are recognized for temporary differences between the tax basis of assets and liabilities and their reported amounts in the financial statements,net operating loss carry forwards and credits, by applying enacted statutory tax rates applicable to future years. Deferred tax assets are reduced by a valuationallowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Current income taxesare provided for in accordance with the laws and regulations applicable to the Group as enacted by the relevant tax authorities.The impact of an uncertain income tax position on the income tax return must be recognized at the largest amount that is morelikelythan not to be sustained uponaudit by the relevant tax authorities. An uncertain income tax position will not be recognized if it has less than a 50% likelihood of being sustained. Additionally, theGroup classifies the interest and penalties, if any, as a component of the income tax expense. For years ended December 31, 2017 and 2016, the Group did not haveany material interest or penalties associated with tax positions nor did the Group have any significant unrecognized uncertain tax positions.F15Related partiesParties are considered to be related to the Company if the parties, directly or indirectly, through one or more intermediaries, control, are controlled by, or are undercommon control with the Company. Related parties also include principal owners of the Company, its management, members of the immediate families of principalowners of the Company and its management and other parties with which the Company may deal with if one party controls or can significantly influence themanagement or operating policies of the other to an extent that one of the transacting parties might be prevented from fully pursuing its own separate interests. TheCompany discloses all significant related party transactions.LeasesLeases have been classified as either capital or operating leases. Leases that transfer substantially all the benefits and risks incidental to the ownership of assets areaccounted for as if there was an acquisition of an asset and incurrence of an obligation at the inception of the lease. All other leases are accounted for as operatingleases wherein rental payments are expensed as incurred.When the Group is the lessor, minimum contractual rental from leases are recognized on a straightline basis over the noncancelable term of the lease. With respectto a particular lease, actual amounts billed in accordance with the lease during any given period may be higher or lower than the amount of rental revenue recognizedfor the period. Straightline rental revenue commences when the customer assumes control of the leased premises. Accrued straightline rents receivable representsthe amount by which straightline rental revenue exceeds rents currently billed in accordance with lease agreements. Contingent rental revenue is accrued when thecontingency is removed.Advertising costsAdvertising costs include expenses associated with direct marketing. All advertising costs are expensed as incurred and included in selling and marketing expenses.During the years ended December 31, 2017 and 2016, advertising costs amounted to $23,171,170 and $4,537,653, respectively.Comprehensive lossComprehensive loss includes net loss and foreign currency translation adjustments and is presented net of tax. The tax effect is nil for the two years endedDecember 31, 2017 and 2016 in the consolidated statements of comprehensive loss.Concentration of credit riskFinancial instruments that potentially expose the Group to concentrations of credit risk consist primarily of cash and accounts receivable. The Group places its cashwith financial institutions with highcredit rating and quality in China. For the year ended December 31, 2017, two customers accounted for over 10% of totalrevenue. For the year ended December 31, 2016, four customers accounted for over 10% of total revenue. At December 31, 2017 and 2016, the Group had credit riskexposure of uninured cash in banks of approximately $72,379 and $83,843, respectively.F16NOTE 3 – INCOME TAXAt December 31, 2017 and 2016, the Group had an unused net operating loss carryforwards of approximately $25,123,726 and $20,081,239, respectively, for income taxpurposes, which expires between 2018 to 2022 and between 2017 to 2021, respectively. At December 31, 2017 and 2016, these net operating losses carryforwards mayresult in future income tax benefits of approximately $5,043,944 and $4,008,863, respectively, however, because realization is uncertain at this time, a valuationallowance in the same amount has been established. Deferred income taxes reflect the net effects of temporary differences between the carrying amounts of assetsand liabilities for financial reporting purposes and the amounts used for income tax purposes.Significant components of the Group’s deferred tax liabilities and assets of December 31, 2017 and 2016 are as follows:December 31,December 31,20172016Deferred tax liabilities$$Deferred tax assetNet operating loss carryforward5,043,9444,008,863Valuation allowance(5,043,944)(4,008,863)Net deferred tax assetMovement of valuation allowanceDecember 31,2017December 31,2016At the beginning of the year$4,008,863$2,049,352Current year addition823,9702,159,518Expired(61,411)Exchange difference272,522(200,007)At the end of the year5,043,9444,008,863The Company is not subject to taxation in BVI under the current BVI law. Subsidiaries operating in the PRC are subject to PRC Enterprise Income Tax at the statutoryrate of 25% for the years ended December 31, 2017 and 2016. Subsidiaries operating in Hong Kong are subject to Hong Kong income taxes at a rate of 16.5% for theyears ended December 31, 2017 and 2016.F17A reconciliation of the income tax expense to the amount computed by applying the current statutory tax rate to the loss before income taxes in the consolidatedstatements of comprehensive income is as follows:December 31,December 31,20172016Loss before income taxes$(6,810,454)$(13,049,031)Tax loss at statutory tax rate(1,655,174)(3,386,822)Nondeductible items6,729,2551,712,857Nontaxable items(3,789,956)(674,189)Change in valuation allowance823,9702,159,518Tax benefits(2,108,095)188,636Income tax expensesNOTE 4 – ACCOUNTS RECEIVABLEAt December 31, 2017 and 2016, accounts receivable consisted of the following:December 31,December 31,20172016Accounts receivable$10,406,602$2,098,946Less: allowance for doubtful accounts676,977233,110$9,729,625$1,865,836NOTE 5 – OTHER RECEIVABLESAt December 31, 2017 and 2016, other receivables consisted of the following:December 31,2017December 31,2016Advances to suppliers$339,701$181,472VAT recoverable (1)3,033,0651,662,805Other5,048,189485,152$2,376,745$2,287,934(1)The balance of advanced VAT represents input VAT available for deducting the amount of VAT paid in the future. During the years ended December 31, 2017and 2016, the Group purchased a large amount of WiFi equipment for deployments, which generated related input VAT approved by tax authority.F18NOTE 6 – AMOUNTS DUE FROM RELATEDPARTIESAt December 31, 2017 and 2016, amounts due from related parties consisted of the following:Name of related partyDecember 31,2017December 31,2016C Media Limited (1)$11,760,692$Ya Tuo Ji International Consultancy (Beijing) Limited (2)204,412183,811(1)C Media Limited is the parent company of LK Technology. The Group expects the amounts due from the related party will be returned to the Group within oneyear.(2)Ya Tuo Ji is a company controlled by the spouse of a major shareholder of C Media Limited. The loan is unsecured, interestfree and repayable on January 5,2019.NOTE 7 – PROPERTY AND EQUIPMENTAt December 31, 2017 and 2016, property and equipment consisted of the following:December 31,December 31,Useful life20172016WiFi equipment3 Years$8,711,424$8,367,678Vehicles5 Years43,246Office and other equipment3 – 5 Years170,242416,434Constructioninprogress2,166,4522,652,28811,048,11811,479,646Less: accumulated depreciation(6,003,246)(3,708,619)$5,044,872$7,771,027For the years ended December 31, 2017 and 2016, depreciation expense amounted to $2,628,884 and $2,474,434, respectively, of which $2,423,655 and $2,194,582,respectively, was included in cost of revenue, $117,648 and $121,740, respectively, was included in selling and marketing expenses and the remainder was included ingeneral and administrative expense.Included in constructioninprogress are WiFI equipment under construction.F19NOTE 8 – GOODWILLIn September of 2014, Zhong Chuan Shi Xun acquired a 100% interest in Zhong Chuan Rui You for a consideration of $7,391,894 (RMB48,000,000). Zhong Chuan RuiYou is primarily engaged in on train WiFi business, deploying WiFi equipment on trains and providing passengers with entertainment and information services ontrains. The book value of the identifiable net assets of Zhong Chuan Rui You was $151,958 (RMB963,000) and a goodwill of $7,239,936 was recorded.NOTE 9 – ACCRUED LIABILITIES AND OTHER PAYABLESAt December 31, 2017 and 2016, accrued liabilities and other payables consisted of the following:December 31,December 31,20172016Deferred revenue$2,326,406$302,735Accrued payroll143,998316,458Other taxes payable3,544,469461,699Other payable852,384686,526Other loans6,095,6559,562,915$12,962,912$11,329,613Deferred revenue represents prepayments from customers for advertising service and is recognized as revenue when the advertising services are rendered.Other loans of $939,555 and $57,416, respectively, as of December 31, 2017 and 2016, are unsecured, bear daily interest at 0.04% and are repayable on demand.NOTE 10 – AMOUNTS DUE TO RELATED PARTIESAt December 31, 2017 and 2016, amounts due to related parties consisted of the following:December 31,December 31,Name of related party20172016Mr. Song Xuesong (“Mr. Song”) (1)$2,921,639$10,669,325C Media Limited (2)$$4,855,236Thumb Beijing Branch (3)$612,103$576,560Thumb Shenzhen Branch (3)$29,941$28,202(1) The Group’s CEO(2) C Media Limited, the parent company.(3) Thumb Beijing and Shenzhen Branch are controlled by the spouse of Mr. Song.Amounts due to related parties are shortterm in nature, noninterest bearing, unsecured and payable on demand.F20NOTE 11 – RETIREMENT AND WELFARE BENEFITSThe Group’s fulltime employees are entitled to staff welfare benefits including medical care, casualty, housing benefits, education benefits, unemployment insuranceand pension benefits through a PRC governmentmandated multiemployer defined contribution plan. The Group is required to accrue the employerportion forthese benefits based on certain percentages of the employees’ salaries. The total provision for such employee benefits of $170,227 and $353,033 during the yearsended December 31, 2017 and 2016, respectively, of which $23,392 and $30,455, respectively, was charged to cost of revenue, $48,957 and $97,408, respectively wascharged to selling and marketing expenses, $49,717 and $86,934, respectively, was charged to general and administrative expenses and $48,161 and $138,236,respectively was charged to research and development expenses. The Group is required to make contributions to the plan out of the amounts accrued for all staffwelfare benefits except for education benefits. The PRC government is responsible for the staff welfare benefits including medical care, casualty, housing benefits,unemployment insurance and pension benefits to be paid to these employees.NOTE 12 – STATUTORY RESERVESAs stipulated by the relevant law and regulations in the PRC, the Group’s subsidiaries and VIEs in the PRC are required to maintain a nondistributable statutorysurplus reserve. Appropriations to the statutory surplus reserve are required to be made at not less than 10% of profit after taxes as reported in the subsidiaries’statutory financial statements prepared under the PRC GAAP. Once appropriated, these amounts are not available for future distribution to owners or shareholders.Once the general reserve is accumulated to 50% of the subsidiaries’ registered capital, the subsidiaries can choose not to provide more reserves. The statutoryreserve may be applied against prior year losses, if any, and may be used for general business expansion and production and increase in registered capital of thesubsidiaries. The Group allocated $Nil to statutory reserves during the years ended December 31, 2017 and 2016, respectively. The statutory reserves cannot betransferred to the Company in the form of loans or advances and are not distributable as cash dividends except in the event of liquidation.NOTE 13 – COMMITMENTS AND CONTINGENCIESOperating leasesWe have entered into operating lease agreements primarily for our office spaces in China. These leases expire through 2018 and are renewable upon negotiation.Future minimum rental payment required under the Office Lease is as follows:Year ending December 31:Amount2018$122,138F21Contingencies(a) Litigation with Shanghai Fusheng Weier Intelligent Control Technology Co., Ltd.On January 22, 2016, Zhong Chuan Rui You and Shanghai Fusheng Weier Intelligent Control Technology Co., Ltd. (“Fusheng Weier”) signed a contract forequipment of $1,652,842 (RMB10,800,000). Since Zhong Chuan Rui You did not make the payments of $1,126,381 (RMB7,360,000) on the due dates, Fusheng Weierfiled a lawsuit against Zhong Chuan Rui You in Shanghai Xuhui District People’s Court on October 8, 2016. On March 9, 2017, Xuhui District People’s Court issuedthe verdict requiring Zhong Chuan Rui You to pay the overdue debts. In August 2017, C Media Limited made the payment of $512,075 (RMB3,346,000). Theremaining balance has been accrued in accounts payable. The payment schedule for the remaining balance is being negotiated by the two parties. On February 5,2018, a hearing was held adding Zhong Chuan Shi Xun as a defendant. The Group plans to settle the remaining balance within one year.(b) Lawsuit with Gansu Jinlun Culture Media Co., Ltd.On August 22, 2014, Zhong Chuan Rui You and Gansu Jinlun Culture Media Co., Ltd. (“Gansu Jinlun”) signed a “Lanzhou Railway Bureau Airconditioned Train WiFi Network System Advertising Operation Rights Agreement” for advertising on 72 trains of $1,467,880 (RMB9,604,633). Due to the dispute on the projectimplementation, Zhong Chuan Rui You did not pay the advertising fee. On August 23, 2017, Gansu Jinlun filed a lawsuit with Gansu Intermediate People’s Court. OnDecember 19, 2017, Gansu Intermediate People’s Court issued a verdict, ruling that Zhong Chuan Rui You settle the overdue advertising fee. Since only 18 out of 72trains have been installed with Wifi network system, Zhong Chuan Rui You disputed and appealed to the verdict. The next court trial date has not yet beendetermined.C Media and Gansu Jinlun are negotiating a potential settlement to resume the contract. According to the legal counsel, it is probable that the settlement will amountto approximately $459,000 (RMB3,000,000); therefore, this amount has been accrued in accounts payable.(c) Litigation with Shenzhen Hua Xun Fang Zhou Technology Co., Ltd.On June 16, 2015, Zhong Chuan Rui You signed a cooperation agreement with Shenzhen Hua Xun Fang Zhou Technology Co., Ltd. (“Shenzhen Hua Xun”) andXuesong Song, a major shareholder of C Media Limited. Pursuant to this agreement, Zhong Chuan Rui You procures equipment from Shenzhen Hua Xun. XuesongSong acts as a joint liability guarantor for the entire debts of Zhong Chuan Rui You under this agreement. As Zhong Chuan Rui You did not make the payments onthe due dates, Shenzhen Hua Xun filed a lawsuit with Shenzhen Baoan District People’s Court on May 31, 2016. On November 1, 2016, Zhong Chuan Rui You,Xuesong Song and Shenzhen Hua Xun reached a settlement in Shenzhen Baoan District People’s Court to settle $1,735,389 (RMB11,355,000) in four instalments. OnDecember 30, 2017, the debt was assigned to C Media Limited.NOTE 14 – SUBSEQUENT EVENTThe Group has evaluated all events or transactions that occurred after December 31, 2017 through May 25, 2018, which is the date that the financial statements wereavailable to be issued.F22EX1.1 2 f20f2017ex11_luokung.htm AMENDED AND RESTATED MEMORANDUM OF ASSOCIATION AND ARTICLES OF ASSOCIATION OF LUOKUNGTECHNOLOGY CORP., DATED AUGUST 20, 2018, AND AS CURRENTLY IN EFFECTExhibit 1.1BC NO: 1553620British Virgin IslandsThe BVI Business Companies Act, 2004(No. 16 of 2004)Memorandum of AssociationandArticles of AssociationofLuokung Technology Corp.Incorporated the 24th day of October, 2009Amended and Restated the 11th Day of December 2009Amended and Restated the 17th Day of December 2009Amended and Restated the 25th Day of March 2010Amended and Restated the 21st day of May 2018Amended and restated the 17 August 2018Amended and restated the 21 August 2018Portcullis (BVI) LimitedPortcullis Chambers4th Floor Ellen Skelton Building3076 Sir Francis Drake HighwayRoad Town, TortolaBritish Virgin IslandsTERRITORY OF THE BRITISH VIRGIN ISLANDSTHE BVI BUSINESS COMPANIES ACT, 2004(No. 16 of 2004)MEMORANDUM OF ASSOCIATIONOFLuokung Technology Corp.NAME1.The name of the Company is Luokung Technology Corp.TYPE OF COMPANY2.The Company is a company limited by shares.REGISTERED OFFICE3.The first Registered Office of the Company is the offices of Portcullis TrustNet (BVI) Limited, Portcullis TrustNet Chambers, P.O. Box 3444, Road Town,Tortola, British Virgin Islands, the office of the registered agent.3.1The current Registered Office of the Company is Portcullis Chambers, 4th Floor Ellen Skelton Building, 3076 SirFrancis Drake Highway, Road Town,Tortola, British Virgin Islands VG1110.REGISTERED AGENT4.The first Registered Agent of the Company is Portcullis TrustNet (BVI) Limited of Portcullis TrustNet Chambers, P.O. Box 3444, Road Town, Tortola,British Virgin Islands.4.1The current Registered Agent of the Company is Portcullis (BVI) Ltd of Portcullis Chambers, 4th Floor Ellen Skelton Building, 3076 Sir Francis DrakeHighway, Road Town, Tortola, British Virgin Islands VG1110.AUTHORISED NUMBER OF SHARES5.The Company is authorised to issue a maximum of 251,000,000 shares.CLASSES, NUMBER AND PAR VALUE OF SHARES6.As at the date of adoption of this memorandum, the Company is authorised to issue (a) 250,000,000 ordinary shares without par value (“OrdinaryShares”); and (b) 1,000,000 preferred shares without par value (“Preferred Shares”).FRACTIONAL SHARES7.The Company may issue fractions of a share and a fractional share shall have the same corresponding fractional liabilities, limitations, preferences,privileges, qualifications, restrictions, rights and other attributes of a whole share of the same class or series of shares.RIGHTS, PRIVILEGES, RESTRICTIONS AND CONDITIONS ATTACHING TO SHARES8.(1)Subject to the memorandum and articles of association (and, for greater clarity, without prejudice to any special rights conferred thereby on theholders of any other shares), an Ordinary Share of the Company confers on the holder;(a)the right to one vote at a meeting of the members of the Company or on any Resolution of Members;(b)the right to an equal share in any Distribution paid by the Company; and(c)the right to an equal share in the distribution of the surplus assets of the Company on a winding up.(2)Subject to the memorandum and articles of association (and, for greater clarity, without prejudice to any special rights conferred thereby on theholders of any other shares), a Preferred Share of the Company confers on the holder;(a)the right to 399 votes at a meeting of the members of the Company or on any Resolution of Members;(b)the right to an equal share in any Distribution paid by the Company;(c)the right to an equal share in the distribution of the surplus assets of the Company on its liquidation.(d)be freely transferable, in whole or in part, by Mr. Xuesong Song to any third party through one or more Private Transactions, subject toApplicable Law; and(e)be freely transferable, in whole or in part, by Mr. Xuesong Song to any third party through one or more Public Transactions, subject to ApplicableLaw and Automatic Conversion of such Preferred Share(s) into Ordinary Share(s).(3)The directors may at their discretion by resolution of directors redeem, purchase or otherwise acquire all or any of the shares in the Companysubject to the Articles..VARIATION OF CLASS RIGHTS9.If at any time the issued shares are divided into different classes or series of shares, the rights attached to any class or series (unless otherwise providedby the terms of issue of the shares of that class or series) may, whether or not the Company is being wound up, be varied with the consent in writing of theholders of not less than threefourths of the issued shares of that class or series and of the holders of not less than threefourths of the issued shares ofany other class or series of shares which may be affected by such variation.RIGHTS NOT VARIED BY THE ISSUE OF SHARES PARI PASSU10.The rights conferred upon the holders of the shares of any class issued with preferred or other rights shall not, unless otherwise expressly provided by theterms of issue of the shares of that class, be deemed to be varied by the creation or issue of further shares ranking pari passu therewith.CAPACITY AND POWERS11.Subject to the Act, any other British Virgin Islands legislation and paragraph 12 below the Company has, irrespective of corporate benefit:(a)full capacity to carry on or undertake any business or activity, do any act or enter into any transaction;(b)for the purposes of paragraph (a), full rights, powers and privileges; and(c)full powers to issue shares with preemptive rights, subject to the Articles.2LIMITATIONS ON THE COMPANY’S BUSINESS12.For the purposes of section 9(4) of the Act the Company may not;(a)carry on banking or trust business, unless it is licensed to do so under the Banks and Trust Companies Act, 1990;(b)carry on business as an insurance or reinsurance company, insurance agent or insurance broker, unless it is licensed under the Insurance Act1994;(c)carry on business of company management, unless it is licensed under the Company Management Act, 1990;(d)carry on the business of providing the registered office or the registered agent for companies incorporated in the British Virgin Islands;(e)carry on the business as a mutual fund, manager of mutual funds or administrator of mutual funds unless it is recognized or licenced as the casemay be under the Mutual Funds Act 1996; or(f)carry on any other business that gives rise to a licencing requirement under any law for the time being in force in the British Virgin Islands unlessit is licenced, regulated, recognised or otherwise approved pursuant to such law.REGISTERED SHARES AND PROHIBITION ON ISSUE OF BEARER SHARES13.Shares in the Company may only be issued as registered shares. The issue of shares to bearer is prohibited.PROHIBITION ON EXCHANGE AND CONVERSION OF REGISTERED SHARES TO BEARER SHARES14.The exchange or conversion of registered shares to bearer shares is prohibited.TRANSFER OF REGISTERED SHARES15.Subject to the provisions of the Articles the Company may upon receipt of an instrument of transfer enter the name of the transferee in the register ofmembers subject to the prior or simultaneous approval of the Company as evidenced by a resolution of directors or by a resolution of members. Subject toany resolution of the members to the contrary, the directors may resolve by resolution of directors to refuse or delay the registration of the transfer forreasons that shall be specified in the resolution of directors.AMENDMENT OF MEMORANDUM AND ARTICLES OF ASSOCIATION16.1The Company may amend its Memorandum or Articles by a resolution of members or by a resolution of directors provided that the directors shall not havethe power to amend the Memorandum or Articles;(a)to restrict the rights or powers of the members to amend the Memorandum or Articles;(b)to change the percentage of members required to pass a resolution to amend the Memorandum or Articles;(c)in circumstances where the Memorandum or Articles cannot be amended by the members; or(d)to Clauses 8, 9, 10 or this Clause 12.16.2No amendment may be made to Regulation 76 of the Articles unless approved by an affirmative vote of the holders of 66 2/3 percent or more of theoutstanding votes of the shares entitled to vote thereon.3DEFINITIONS17.The meanings of words in this Memorandum are as defined in the Articles.We, Portcullis TrustNet (BVI) Limited of Portcullis TrustNet Chambers, P.O. Box 3444, Road Town, Tortola, British Virgin Islands for the purpose ofincorporating a BVI Business Company under the laws of the British Virgin Islands hereby sign this Memorandum of Association the 27th day of October,2009.Incorporator/s/ Nicole WheatleyPortcullis TrustNet (BVI) LimitedPortcullis TrustNet ChambersP.O. Box 3444Road Town, TortolaBritish Virgin Islands(Sgd. Nicole Wheatley)4TERRITORY OF THE BRITISH VIRGIN ISLANDSTHE BVI BUSINESS COMPANIES ACT, 2004(No. 16 of 2004)ARTICLES OF ASSOCIATIONOFLuokung Technology Corp.PRELIMINARY1.In these Articles, if not inconsistent with the subject or context, the words and expressions standing in the first column of the following table shall bear themeanings set opposite them respectively in the second column thereof.WordsMeaningApplicable Lawall Laws, including those of a jurisdiction in or outside of the United States, applicable to the Private orPublic Transactions.Actthe BVI Business Companies Act, 2004 (No 16 of 2004.) including any modification, extension, reenactment or renewal thereof and any regulations made thereunder.Articlesthese Articles of Association as originally framed or as from time to time amended.Automatic Conversioneach Preferred Share shall be automatically converted at any time after issue and without the payment ofany additional sum into an equal number of fully paid Ordinary Shares upon the conclusion of anytransfer by Mr. Xuesong Song to any third party through one or more Public Transactions.Designated Stock Exchangeeither the Nasdaq National Stock Market, Inc. or such other exchange or quotation bureau on which, theCompany’s Securities are listed or traded; provided that until the Securities are listed on any such“Exchange” the rules of any such Designated Stock Exchange shall be inapplicable to these Articles.directora director of the Company.distributionin relation to a distribution by a company to a member, means(i)the direct or indirect transfer of an asset, other than the Company’s own shares, to or forthe benefit of the member or(ii)the incurring of a debt to or for the benefit of a member,in relation to shares held by a member, and whether by means of a purchase of an asset, the purchase,redemption or other acquisition of shares, a transfer of indebtedness or otherwise, and includes adividend.Independent Directora person who meets the then current requirements for “independence” of the applicable rules andregulations of the U.S. Securities and Exchange Commission and the Designated Stock Exchange.5member or shareholderin relation to the Company, means a person whose name is entered in the register of members as theholder of one or more shares, or fractional shares, in the Company.Memorandumthe Memorandum of Association of the Company as originally framed or as from time to time amended.Mr. Xuesong Songthe founder, a director and Chairman of LK Technology Ltd.Ordinary Sharesissued or unissued ordinary shares of no par value of the Company having the rights, preferences andprivileges set out in the MemorandumPersonAn individual, a corporation, a trust, trustee, the estate of a deceased individual, a partnership or anunincorporated association of persons.Preferred Sharesissued or unissued preferred shares of no par value of the Company having the rights, preferences andprivileges set out in the MemorandumPrivate Transactionstransactions that are not considered as a Public Transaction.Public Transactionstransactions through any national securities exchanges and/or through the automated quotation systemincluding but not limited to NASDAQ, NYSE (including NYSE American) or OTC Markets, or anytransaction executed by the broker or with a market maker.Related Party(a) any director, officer and employee of the Company; (b) any family member of such director, officer andemployee; and (c) any entity (e.g. a corporation, partnership, or trust) controlled by or set up for thebenefit of a director, officer or employee, or a family member of such director, officer or employee.Relevant SystemA facility for the electronic transfer of uncertificated securities administered by The Depository TrustCompany or such other Person regulated by the SEC.resolution of directors(a)A resolution approved at a duly convened and constituted meeting of directors of the Companyor of a committee of directors of the Company by the affirmative vote of a simple majority of thedirectors present at the meeting who voted and did not abstain; or(b)a resolution consented to in writing by a simple majority of the directors or of all members of thecommittee, as the case may be;except that where a director is given more than one vote, he shall be counted by the number ofvotes he casts for the purpose of establishing a majority.resolution of membersSubject to the provisions of the Memorandum and Articles means:(a)A resolution approved at a duly convened and constituted meeting of the members of theCompany by the affirmative vote of(i)a majority of in excess of 50% of the votes of the shares entitled to vote and voting onthe resolution, or(ii)a majority of in excess of 50% of the votes of each class or series of shares entitled tovote as a class or series and voting on the resolution and a majority of in excess of 50%of the votes of the remaining shares entitled to vote and voting on the resolution; or6(b)a resolution consented to in writing by(i)an absolute majority of the votes of shares entitled to vote thereon, or(ii)an absolute majority of the votes of each class or series of shares entitled to votethereon as a class or series and of an absolute majority of the votes of the remainingshares entitled to vote thereon.SealAny Seal which has been duly adopted as the common seal of the Company.SECThe United States Securities and Exchange Commission.Securitiesshares and debt obligations of every kind, and options, warrants and rights to acquire shares, or debtobligations.SharesOrdinary Shares and/or Preferred Shares, as the case may be.solvency testa company satisfies the solvency test if;(i)the value of the company’s assets exceeds its liabilities, and(ii)the company is able to pay its debts as they fall due.treasury sharesshares in the Company that were previously issued but were repurchased, redeemed or otherwiseacquired by the Company and not cancelled.2.“Written” or any term of like import includes words typewritten, printed, painted, engraved, lithographed, photographed or represented or reproduced byany mode of reproducing words in a visible form, including telex, facsimile, telegram, cable or other form of writing produced by electronic communication.3.Save as aforesaid any words or expressions defined in the Act shall bear the same meaning in these Articles.4.Whenever the singular or plural number, or the masculine, feminine or neuter gender is used in these Articles, it shall equally, where the context admits,include the others.5.A reference in these Articles to voting in relation to shares shall be construed as a reference to voting by members holding the shares except that it is thevotes allocated to the shares that shall be counted and not the number of members who actually voted and a reference to shares being present at a meetingshall be given a corresponding construction.6.A reference to money in these Articles is, unless otherwise stated, a reference to the currency in which shares in the Company shall be issued according tothe provisions of the Memorandum.7REGISTERED SHARES7.Every member holding registered shares in the Company shall be entitled to a certificate signed by a director or officer of the Company or such otherperson who may be authorised from time to time by resolution of directors or under the Seal, with or without the signature of any director of the Company,specifying the share or shares held by him and the signature of the director or officer or person so authorised and the Seal may be facsimiles.8.Any member receiving a share certificate for registered shares shall indemnify and hold the Company and its directors and officers harmless from any lossor liability which it or they may incur by reason of any wrongful or fraudulent use or representation made by any person by virtue of the possessionthereof. If a share certificate for registered shares is worn out or lost it may be renewed on production of the worn out certificate or on satisfactory proof ofits loss together with such indemnity as may be required by a resolution of directors.9.If several persons are registered as joint holders of any shares, any one of such persons may give an effectual receipt for any distribution payable inrespect of such shares.10.Nothing in these Articles shall require title to any shares or other Securities to be evidenced by a certificate if the Act and the rules of the Designated StockExchange permit otherwise.SHARES AND ISSUED SHARES11.Subject to the provisions of these Articles and, if applicable, the rules of the Designated Stock Exchange, and any resolution of members, the directors ofthe Company may, without limiting or affecting any rights previously conferred on the holders of any existing shares or class or series of shares, offer, allot,grant options over or otherwise dispose of shares to such persons, at such times and upon such terms and conditions as the Company may by resolutionof directors determine. The directors shall not issue more shares than the maximum number provided for in the Memorandum.12.The Company may issue fully paid, partly paid or nil paid shares as well as bonus shares. A partly paid or nil paid share or a share issued for a promissorynote or other written obligation for payment of a debt may be issued subject to forfeiture in the manner prescribed in these Articles.13.Shares in the Company may be issued for consideration in any form, including money, a promissory note or other obligation to contribute money orproperty, real property, personal property (including goodwill and knowhow) services rendered or a contract for future services and the amount of suchconsideration shall be determined by resolution of directors, except that in the case of shares with par value, the amount shall not be less than the parvalue, and in the absence of fraud the decision of the directors as to the value of the consideration received by the Company in respect of the issue isconclusive unless a question of law is involved.14.Before issuing shares for a consideration other than money, the directors shall pass a resolution stating;(a)the amount to be credited for the issue of the shares;(b)their determination of the reasonable present cash value of the nonmoney consideration for the issue; and(c)that, in their opinion, the present cash value of the nonmoney consideration for the issue is not less than the amount to be credited for the issueof the shares.15.A share issued by the Company upon conversion of, or in exchange for, another share or a debt obligation or other security in the Company, shall betreated for all purposes as having been issued for money equal to the consideration received or deemed to have been received by the Company in respectof the other share, debt obligation or security.16.Treasury shares may be disposed of by the Company on such terms and conditions (not otherwise inconsistent with these Articles) as the Company mayby resolution of directors determine.17.Subject to these Articles, the Company may purchase, redeem or otherwise acquire and hold its own shares save that the Company may not purchase,redeem or otherwise acquire its own shares without the consent of the member whose shares are to be purchased, redeemed or otherwise acquired unlessthe Company is permitted by the Act or any other provision in the Memorandum or Articles to purchase, redeem or otherwise acquire the shares withouttheir consent.818.No purchase, redemption or other acquisition of shares shall be made unless the directors determine by resolution of the directors that immediately after thepurchase, redemption or other acquisition the value of the Company’s assets will exceed its liabilities and the Company will be able to pay its debts as theyfall due.19.Sections 60 (Process for acquisition of own shares), 61 (Offer to one or more shareholders) and 62 (Shares redeemed otherwise than at the option ofcompany) of the Act shall not apply to the Company.20.A determination by the directors under Article 18 is not required;(a)the Company redeems a share or shares pursuant to a right of a member to have his shares redeemed or to have his shares exchanged for moneyor other property of the Company; or(b)by virtue of the provisions of Section 179 of the Act.21.Shares that the Company purchases, redeems or otherwise acquires pursuant to Article 17 may be cancelled or held as treasury shares except to the extentthat such shares are in excess of 80 percent of the issued shares of the Company in which case they shall be cancelled but they shall be available forreissue.22.Shares in the Company shall only be held as treasury shares where the directors of the Company resolve as such and the number of shares acquired, whenaggregated with shares of the same class already held by the Company as treasury shares, does not exceed 50% of the shares of that class previouslyissued by the Company, excluding shares that have been cancelled. All rights and obligations attaching to a treasury share are suspended and shall not beexercised by or against the Company while it holds the share as a treasury share. Treasury shares may be reissued by the Company as new shares.23.The Company shall keep a register of members containing;(a)the names and addresses of the persons who hold registered shares in the Company;(b)the number of each class and series of registered shares held by each member;(c)the date on which the name of each member was entered in the register of members;(d)the date on which any person ceased to be a member; and(e)such other information as may be prescribed pursuant to the Act.24.The register of members may be in any such form as the directors may approve but if it is in magnetic, electronic or other data storage form, the companymust be able to produce legible evidence of its contents.25.The original or a copy of the register of members shall be kept at the registered office of the Company or at the office of the registered agent of theCompany.26.A share is deemed to be issued when the name of the member is entered in the register of members.27.Subject to the Act and the rules of the Designated Stock Exchange, the board of directors without further consultation with the holders of any shares orSecurities may resolve that any class or series of shares or other Securities from time to time in issue or to be issued (including shares in issue at the date ofthe adoption of these Articles) may be issued, held, registered and converted to uncertificated form.28.Conversion of shares held in certificated form into shares held in uncertificated form, and vice versa, may be made in such manner as the board of directors,in its absolute discretion, may think fit. The Company or any duly authorised transfer agent (a “Transfer Agent”) shall enter on the register of membershow many shares are held by each member in uncertificated form and in certificated form and shall maintain the register of members. Notwithstanding anyprovision of these Articles, a class or series of shares shall not be treated as two classes by virtue only of that class or series comprising both certificatedshares and uncertificated Shares or as a result of any provision of these Articles which apply only in respect of certificated or uncertificated shares.9MORTGAGES AND CHARGES OF REGISTERED SHARES29.Members may mortgage or charge their registered shares in the Company with such mortgage or charge being evidenced in writing and signed by, or withthe authority of the registered holder of a registered share to which the mortgage or charge relates. The Company shall give effect to the terms of any validmortgage or charge except insofar as it may conflict with any requirements herein contained for consent to the transfer of shares.30.In the case of the mortgage or charge of registered shares there may be entered in the share register of the Company at the request of the registered holderof such shares(a)a statement that the shares are mortgaged or charged;(b)the name of the mortgagee or chargee; and(c)the date on which the aforesaid particulars are entered in the share register.31.Where particulars of a mortgage or charge are entered in the register of members, such particulars shall be cancelled(a)with the written consent of the named mortgagee or chargee or anyone authorized to act on his behalf; or(b)upon evidence satisfactory to the directors of the discharge of the liability secured by the mortgage or charge and the issue of such indemnities asthe directors shall consider necessary or desirable.32.Whilst particulars of a mortgage or charge over registered shares are entered in the register of members pursuant to the preceding articles no transfer ofany share comprised therein shall be effected without the written consent of the named mortgagee or chargee or anyone authorized to act on his behalf.FORFEITURE33.When shares not fully paid on issue or issued for a promissory note or other written obligation for payment of a debt have been issued subject toforfeiture, the following provisions shall apply.34.Written notice specifying a date for payment to be made and the shares in respect of which payment is to be made shall be served on the member whodefaults in making payment pursuant to a promissory note or other written obligations to pay a debt.35.The written notice specifying a date for payment shall(a)name a further date not earlier than the expiration of 14 days from the date of service of the notice on or before which payment required by thenotice is to be made; and(b)contain a statement that in the event of nonpayment at or before the time named in the notice the shares, or any of them, in respect of whichpayment is not made will be liable to be forfeited.36.Where a written notice has been issued and the requirements of the notice have not been complied with within the prescribed time, the directors may at anytime before tender of payment forfeit and cancel the shares to which the notice relates.37.The Company is under no obligation to refund any moneys to the member whose shares have been forfeited and cancelled pursuant to these provisions.Upon forfeiture and cancellation of the shares the member is discharged from any further obligation to the Company with respect to the shares forfeitedand cancelled.10LIEN38.The Company shall have a first and paramount lien on every share issued for a promissory note or for any other binding obligation to contribute money orproperty or any combination thereof to the Company, and the Company shall also have a first and paramount lien on every share standing registered in thename of a member, whether singly or jointly with any other person or persons, for all the debts and liabilities of such member or his estate to the Company,whether the same shall have been incurred before or after notice to the Company of any interest of any person other than such member, and whether thetime for the payment or discharge of the same shall have actually arrived or not, and notwithstanding that the same are joint debts or liabilities of suchmember or his estate and any other person, whether a member of the Company or not. The Company’s lien on a share shall extend to all distributionspayable thereon. The directors may at any time either generally, or in any particular case, waive any lien that has arisen or declare any share to be wholly orin part exempt from the provisions of this Article.39.In the absence of express provisions regarding sale in the promissory note or other binding obligation to contribute money or property, the Company maysell, in such manner as the directors may by resolution of directors determine, any share on which the Company has a lien, but no sale shall be made unlesssome sum in respect of which the lien exists is presently payable nor until the expiration of twentyone days after a notice in writing, stating and demandingpayment of the sum presently payable and giving notice of the intention to sell in default of such payment, has been served on the holder for the timebeing of the share.40.The net proceeds of the sale by the Company of any shares on which it has a lien shall be applied in or towards payment of discharge of the promissorynote or other binding obligation to contribute money or property or any combination thereof in respect of which the lien exists so far as the same ispresently payable and any residue shall (subject to a like lien for debts or liabilities not presently payable as existed upon the share prior to the sale) bepaid to the holder of the share immediately before such sale. For giving effect to any such sale the directors may authorize some person to transfer theshare sold to the purchaser thereof. The purchaser shall be registered as the holder of the share and he shall not be bound to see to the application of thepurchase money, nor shall his title to the share be affected by any irregularity or invalidity in the proceedings in reference to the sale.TRANSFER OF SHARES41.Registered shares in the Company are transferred by a written instrument of transfer signed by the transferor and containing the name and address of thetransferee. The instrument of transfer shall be signed by the transferee if registration as a holder of the share shall impose a liability to the Company on thetransferee. The instrument of transfer of a registered share shall be sent to the Company for registration.42.The board of directors may resolve that interests in shares in the form of depositary receipts may be transferred or otherwise dealt with in accordance withthe regulations and practices instituted by the operator of the Relevant System and any holder of interests in shares shall be entitled to transfer suchinterests by means of such Relevant System and the operator of the Relevant System shall act as agent of the holders of such interests for the purposes ofthe transfer of those interests.43.The register of members may be closed at such times and for such periods as the board of directors may from time to time determine, upon notice beinggiven by advertisement in such newspapers as may be required by the Act and the practice of the Designated Stock Exchange.44.The transfer of a registered share is effective when the name of the transferee is entered on the register of members.45.If the directors of the Company are satisfied that an instrument of transfer relating to shares has been signed but that the instrument has been lost ordestroyed, they may resolve;(a)to accept such evidence of the transfer of the shares as they consider appropriate; and(b)that the transferee’s name should be entered in the register of members notwithstanding the absence of the instrument of transfer.46.The Company must on the receipt of an instrument of transfer from the transferor or transferee of a registered share in the Company enter the name of thetransferee of the share in the register or members unless the directors, if permitted by the Memorandum or these Articles, resolve by resolution of directorsto refuse or delay the registration of the transfer for reasons that shall be specified in the resolution of directors.11TRANSMISSION OF SHARES47.The personal representative of a deceased member may transfer a share even though the personal representative is not a member at the time of the transfer.48.The personal representative, executor or administrator of a deceased member, the guardian of an incompetent member or the trustee of a bankrupt membershall be the only person recognized by the Company as having any title to his share but they shall not be entitled to exercise any rights as a member of theCompany until they have proceeded as set forth in the next following three Articles.49.The production to the Company of any document which is evidence of probate of the will, or letters of administration of the estate, or confirmation asexecutor, of a deceased member or of the appointment of a guardian of an incompetent member or the trustee of a bankrupt member shall be accepted by theCompany even if the deceased, incompetent or bankrupt member is domiciled outside the British Virgin Islands if the document evidencing the grant ofprobate or letters of administration, confirmation as executor, appointment as guardian or trustee in bankruptcy is issued by a foreign court which hadcompetent jurisdiction in the matter. For the purpose of establishing whether or not a foreign court had competent jurisdiction in such a matter the directorsmay obtain appropriate legal advice. The directors may also require an indemnity to be given by the executor, administrator, guardian or trustee inbankruptcy.50.The Company may enter in the register of members the name of any person becoming entitled by operation of law or otherwise to a share or shares inconsequence of the death, incompetence or bankruptcy upon such evidence being produced as may reasonably be required by the directors.51.Any person who has become entitled to a share or shares in consequence of the death, incompetence or bankruptcy of any member may, instead of beingregistered himself, request in writing that some person to be named by him be registered as the transferee of such share or shares and such request shalllikewise be treated as if it were a transfer.52.What amounts to incompetence on the part of a person is a matter to be determined by the court having regard to all the relevant evidence and thecircumstances of the case.REDUCTION OR INCREASE IN AUTHORISED AND UNISSUED SHARES48.The Company may amend the Memorandum to increase or reduce the maximum number of shares the Company is authorised to issue and may in respect ofany unissued shares increase or reduce the number of such shares, or effect any combination of the foregoing.49.The Company may(1)(a) divide its shares, including issued shares, into a larger number of shares; or (b) combine its shares, including issued shares, into a smallernumber of shares.(2)A division or combination of shares, including issued shares, of a class or series shall be for a larger or smaller number, as the case may be, ofshares in the same class or series.(3)A company shall not divide its shares under subsection (1)(a) or (2) if it would cause the maximum number of shares that the Company isauthorised to issue by its memorandum to be exceeded.(4)Where shares are divided or combined under this article, the aggregate par value of the new shares must be equal to the aggregate par value of theoriginal shares.MEETINGS AND CONSENTS OF MEMBERS50.The directors of the Company may convene meetings of the members of the Company at such times and in such manner and places within or outside theBritish Virgin Islands as the directors consider necessary or desirable. The Company may hold an annual general meeting, but shall not (unless required bythe applicable rules of the Designated Stock Exchange for so long as the Company’s Securities are listed or traded on the Designated Stock Exchange) beobliged to hold an annual general meeting.51.Upon the written request of members holding 30 percent or more of the outstanding voting shares in the Company the directors shall convene a meeting ofmembers.1252.The directors shall give not less than 7 days notice of meetings of members to those persons whose names on the date the notice is given appear asmembers in the share register of the Company and are entitled to vote at the meeting.53.The directors may fix the date notice is given of a meeting of members as the record date for determining those shares that are entitled to vote at themeeting.54.A meeting of members may be called on short notice:(a)if members holding not less than 90 percent of the total number of shares entitled to vote on all matters to be considered at the meeting, or 90percent of the votes of each class or series of shares where members are entitled to vote thereon as a class or series together with not less than a90 percent majority of the remaining votes, have agreed to short notice of the meeting, or(b)if all members holding shares entitled to vote on all or any matters to be considered at the meeting have waived notice of the meeting and for thispurpose presence at the meeting shall be deemed to constitute waiver.55.The inadvertent failure of the directors to give notice of a meeting to a member, or the fact that a member has not received notice, does not invalidate themeeting.56.A member may be represented at a meeting of members by a proxy who may speak and vote on behalf of the member.57.The instrument appointing a proxy shall be produced at the place appointed for the meeting before the time for holding the meeting at which the personnamed in such instrument proposes to vote.58.An instrument appointing a proxy shall be in substantially the following form or such other form as the Chairman of the meeting shall accept as properlyevidencing the wishes of the member appointing the proxy.(Name of Company)I/Webeing a member of the aboveCompany withshares HEREBY APPOINTofor failing himofto be my/our proxy to vote for me/us at the meeting of members to be held on the dayofand at any adjournment thereof.(Any restrictions on voting to be inserted here.)Signed this day ofMember59.The following shall apply in respect of joint ownership of shares:a.if two or more persons hold shares jointly each of them may be present in person or by proxy at a meeting of members and may speak as a member;b.if only one of the joint owners is present in person or by proxy he may vote on behalf of all joint owners, andc.if two or more of the joint owners are present in person or by proxy they must vote as one.60.A member shall be deemed to be present at a meeting of members if he participates by telephone or other electronic means and all members participating inthe meeting are able to hear each other.61.A meeting of members is duly constituted if, at the commencement of the meeting, there are present in person or by proxy not less than 50 percent of thevotes of the shares or class or series of shares entitled to vote on resolutions of members to be considered at the meeting. If a quorum be present,notwithstanding the fact that such quorum may be represented by only one person then such person may resolve any matter and a certificate signed bysuch person accompanied where such person be a proxy by a copy of the proxy form shall constitute a valid resolution of members.1362.If within two hours from the time appointed for the meeting a quorum is not present, the meeting, if convened upon the requisition of members, shall bedissolved; in any other case it shall stand adjourned to the next business day at the same time and place or to such other time and place as the directorsmay determine, and if at the adjourned meeting there are present within one hour from the time appointed for the meeting in person or by proxy not lessthan one third of the votes of the shares or each class or series of shares entitled to vote on the resolutions to be considered by the meeting, those presentshall constitute a quorum but otherwise the meeting shall be dissolved.63.At every meeting of members, the Chairman of the Board of Directors shall preside as chairman of the meeting. If there is no Chairman of the Board ofDirectors or if the Chairman of the Board of Directors is not present at the meeting, the members present shall choose some one of their number to be thechairman. If the members are unable to choose a chairman for any reason, then the person representing the greatest number of voting shares present inperson or by prescribed form of proxy at the meeting shall preside as chairman failing which the oldest individual member or representative of a memberpresent shall take the chair.64.The chairman may, with the consent of the meeting, adjourn any meeting from time to time, and from place to place, but no business shall be transacted atany adjourned meeting other than the business left unfinished at the meeting from which the adjournment took place.65.At any meeting of the members the chairman shall be responsible for deciding in such manner as he shall consider appropriate whether any resolution hasbeen carried or not and the result of his decision shall be announced to the meeting and recorded in the minutes thereof. If the chairman shall have anydoubt as to the outcome of any resolution put to the vote, he shall cause a poll to be taken of all votes cast upon such resolution, but if the chairman shallfail to take a poll then any member present in person or by proxy who disputes the announcement by the chairman of the result of any vote mayimmediately following such announcement demand that a poll be taken and the chairman shall thereupon cause a poll to be taken. If a poll is taken at anymeeting, the result thereof shall be duly recorded in the minutes of that meeting by the chairman.66.Any person other than an individual shall be regarded as one member and subject to the specific provisions hereinafter contained for the appointment ofrepresentatives of such persons the right of any individual to speak for or represent such member shall be determined by the law of the jurisdiction where,and by the documents by which, the person is constituted or derives its existence. In case of doubt, the directors may in good faith seek legal advice fromany qualified person and unless and until a court of competent jurisdiction shall otherwise rule, the directors may rely and act upon such advice withoutincurring any liability to any member.67.Any person other than an individual which is a member of the Company may by resolution of its directors or other governing body authorize such personas it thinks fit to act as its representative at any meeting of the Company or of any class of members of the Company, and the person so authorized shall beentitled to exercise the same powers on behalf of the person which he represents as that person could exercise if it were an individual member of theCompany.68.The chairman of any meeting at which a vote is cast by proxy or on behalf of any person other than an individual may call for a notarially certified copy ofsuch proxy or authority which shall be produced within 7 days of being so requested or the votes cast by such proxy or on behalf of such person shall bedisregarded.69.Directors of the Company may attend and speak at any meeting of members of the Company and at any separate meeting of the holders of any class orseries of shares in the Company.70.An action that may be taken by the members at a meeting may also be taken by a resolution of members consented to in writing or by telex, telegram, cable,facsimile or other written electronic communication, without the need for any notice, but if any resolution of members is adopted otherwise than by theunanimous written consent of all members, a copy of such resolution shall forthwith be sent to all members not consenting to such resolution. The consentmay be in the form of counterparts, each counterpart being signed by one or more members.14DIRECTORS71.The first directors of the Company shall be appointed by the first registered agent of the Company and thereafter the directors shall be appointed byresolution of members, subject to Article 78, for such term as the members determine. A person shall not be appointed as a director unless he hasconsented in writing to be a director.72.The minimum number of directors shall be one and the maximum number shall be 20. Unless otherwise determined by the Company in a meeting ofshareholders and subject to the requirements of the Memorandum, the directors may by a Resolution of Directors, amend this Regulation 72 to change thenumber of directors. For as long as Securities of the Company are listed or traded on the Designated Stock Exchange, the directors shall include suchnumber of Independent Directors as applicable law, rules or regulations of the Designated Stock Exchange may require for a foreign private issuer as longas the Company is a foreign private issuer.73.Each director shall hold office for the term, if any, fixed by resolution of members or until his earlier death, resignation or removal.74.Where the Company has only one member who is an individual and that member is also the sole director of the Company, that sole member/director may, byinstrument in writing, nominate a person who is not disqualified from being a director of the Company under section 111(1) of the Act as a reserve directorof the Company to act in the place of the sole director in the event of his death.75.The nomination of a person as a reserve director of the Company ceases to have effect if;a.before the death of the sole member/director who nominated him;(i)he resigns as reserve director, or(ii)the sole member/director revokes the nomination in writing; orb.the sole member/director who nominated him ceases to be the sole member/director of the Company for any reason other than his death.76.A director may be removed from office, with or without cause, by a resolution of directors or a resolution of members. For the purposes of this Regulation76, “cause” means the willful and continuous failure by a director to substantially perform his duties to the Company (other than any such failure resultingfrom incapacity due to physical or mental illness) or the willful engaging by the director in gross misconduct materially and demonstrably injurious to theCompany. If a director is removed from office without cause by a resolution of the members, for the purposes of this Regulation, the resolution of memberswill require the affirmative vote of the holders of 66 2/3 percent or more of the outstanding votes of the shares entitled to vote thereon.77.A director may resign his office by giving written notice of his resignation to the Company and the resignation shall have effect from the date the notice isreceived by the Company or from such later date as may be specified in the notice. A director of the Company shall resign forthwith if he is, or becomes,disqualified to act as a director under the Act.78.The directors may at any time by resolution of directors appoint any person to be a director to fill a vacancy. There is a vacancy if a director dies orotherwise ceases to hold office as a director prior to the expiration of his term of office, where his term of office was fixed upon his appointment. Thedirectors may not appoint a director to fill a vacancy for a term exceeding the term that remained when the person who has ceased to be a director left orotherwise ceased to hold office.79.The Company shall keep a register of directors containing:a.the names and addresses of the persons who are directors of the Company or who have been nominated as reserve directors of the Company;b.the date on which each person whose name is entered in the register was appointed as a director of the Company or nominated as a reservedirector of the Company;c.the date on which each person named as a director ceased to be a director of the Company;d.the date on which the nomination of any person nominated as a reserve director ceased to have effect; ande.such other information as may be prescribed pursuant to the Act.1580.The original or a copy of any register of directors shall be kept at the office of the registered agent of the Company.81.The register of directors may be in any such form as the directors may approve but if it is in magnetic, electronic or other data storage form, the companymust be able to produce legible evidence of its contents.82.With the prior or subsequent approval by a resolution of members, the directors may, by a resolution of directors, fix the emoluments of directors withrespect to services to be rendered in any capacity to the Company.83.A director shall not require a share qualification and may be an individual or a company.POWERS OF DIRECTORS84.The business and affairs of the Company shall be managed by the directors who may pay all expenses incurred preliminary to and in connection with theformation and registration of the Company and may exercise all such powers of the Company as are not by the Act or by the Memorandum or theseArticles required to be exercised by the members of the Company, subject to any delegation of such powers as may be authorized by these Articles and tosuch requirements as may be prescribed by a resolution of members; but no requirement made by a resolution of members shall prevail if it be inconsistentwith these Articles nor shall such requirement invalidate any prior act of the directors which would have been valid if such requirement had not been made.Notwithstanding anything in Section 175 of the Act the directors shall have the power to sell, transfer, lease, exchange or otherwise dispose of more thanfifty percent of the assets of the Company without submitting a proposal to or obtaining the consent of the members of the Company.85.If the Company is a whollyowned subsidiary of a holding company a director may when exercising powers or performing duties as a director act in amanner which he believes is in the best interests of the holding company even though it may not be in the best interests of the Company.86.The directors may, by a resolution of directors, appoint any person, including a person who is a director, to be an officer or agent of the Company. Theresolution of directors appointing an agent may authorize the agent to appoint one or more substitutes or delegates to exercise some or all of the powersconferred on the agent by the Company.87.Every officer or agent of the Company has such powers and authority of the directors, including the power and authority to affix the Seal, as are set forth inthese Articles or in the resolution of directors appointing the officer or agent, except that no agent has any power or authority with respect to thefollowing;a.to amend the memorandum or articles;b.to change the registered office or agent;c.to designate committees of directors;d.to delegate powers to a committee of directors;e.to appoint or remove directors;f.to appoint or remove an agent;g.to fix emoluments of directors;h.to approve a plan of merger, consolidation or arrangement;i.to make a declaration of solvency for the purposes of section 198(1)(a) of the Act or to approve a liquidation plan;j.to make a determination under section 57(1) of the Act that the company will, immediately after a proposed distribution, satisfy the solvency test;ork.to authorise the Company to continue as a company incorporated under the laws of a jurisdiction outside the British Virgin Islands.1688.Any director which is a body corporate may appoint any person its duly authorized representative for the purpose of representing it at meetings of theBoard of Directors or with respect to unanimous written consents.89.The continuing directors may act notwithstanding any vacancy in their body, save that if their number is reduced to their knowledge below the numberfixed by or pursuant to these Articles as the necessary quorum for a meeting of directors, the continuing directors or director may act only for the purposeof appointing directors to fill any vacancy that has arisen or for summoning a meeting of members.90.The directors may by resolution of directors exercise all the powers of the Company to borrow money and to mortgage or charge its undertakings andproperty or any part thereof, to issue debentures, debenture stock and other securities whenever money is borrowed or as security for any debt, liability orobligation of the Company or of any third party.91.All cheques, promissory notes, drafts, bills of exchange and other negotiable instruments and all receipts for moneys paid to the Company, shall be signed,drawn, accepted, endorsed or otherwise executed, as the case may be, in such manner as shall from time to time be determined by resolution of directors.92.The Company shall keep a register of all relevant charges created by the Company showing:a.if the charge is a charge created by the Company, the date of its creation or if the charge is existing on property acquired by the Company, the dateon which the property was acquired;b.a short description of the liability secured by the charge;c.a short description of the property charged;d.the name and address of the trustee for the security, or if there is no such trustee the name and address of the chargee;e.unless the charge is a security to bearer, the name and address of the holder of the charge;f.details of any prohibition or restriction , if any, contained in the instrument creating the charge on the power of the company to create any futurecharge ranking in priority to or equally with the charge; andg.such other information as may be prescribed pursuant to the Act.93.The original or a copy of the register of charges shall be kept at the registered office of the Company or at the office of the registered agent of the Company.PROCEEDINGS OF DIRECTORS94.The directors of the Company or any committee thereof may meet at such times and in such manner and places within or outside the British Virgin Islandsas the directors may determine to be necessary or desirable. Any one or more directors may convene a meeting of directors.95.A director shall be deemed to be present at a meeting of directors if he participates by telephone or other electronic means and all directors participating inthe meeting are able to hear each other.96.A director shall be given not less than 3 days notice of meetings of directors, but a meeting of directors held without 3 days notice having been given to alldirectors shall be valid if all the directors entitled to vote at the meeting who do not attend, waive notice of the meeting and for this purpose, the presenceof a director at a meeting shall constitute waiver on his part. The inadvertent failure to give notice of a meeting to a director, or the fact that a director hasnot received the notice, does not invalidate the meeting.1797.A director may by a written instrument appoint an alternate who need not be a director and an alternate is entitled to attend meetings in the absence of thedirector who appointed him and to vote or consent in place of the director.98.A meeting of directors is duly constituted for all purposes if at the commencement of the meeting there are present in person or by alternate not less thanone half of the total number of directors, unless there are only 2 directors in which case the quorum shall be 2.99.If the Company shall have only one director the provisions herein contained for meetings of the directors shall not apply but such sole director shall havefull power to represent and act for the Company in all matters as are not by the Act or the Memorandum or these Articles required to be exercised by themembers of the Company and in lieu of minutes of a meeting shall record in writing and sign a note or memorandum of all matters requiring a resolution ofdirectors. Such a note or memorandum shall constitute sufficient evidence of such resolution for all purposes.100.At every meeting of the directors the Chairman of the Board of Directors shall preside as chairman of the meeting. If there is no Chairman of the Board ofDirectors or if the Chairman of the Board of Directors is not present at the meeting the Vice Chairman of the Board of Directors shall preside. If there is noVice Chairman of the Board of Directors or if the Vice Chairman of the Board of Directors is not present at the meeting the directors present shall choosesome one of their number to be chairman of the meeting.101.An action that may be taken by the directors or a committee of directors at a meeting may also be taken by a resolution of directors or a committee ofdirectors consented to in writing or by telex, telegram, cable, facsimile or other written electronic communication by all directors or all members of thecommittee as the case may be, without the need for any notice. The consent may be in the form of counterparts, each counterpart being signed by one ormore directors.102.The directors shall cause the following records to be kept:a.minutes of all meetings of directors, members, committees of directors and committees of members; andb.copies of all resolutions consented to by directors, members, committees of directors and committees of members.103.The resolutions, records and minutes referred to in the preceding Article shall be kept at the registered office of the Company, its principal place ofbusiness or at such other place as the directors determine.104.The directors may, by resolution of directors, designate one or more committees, each consisting of one or more directors.105.Subject to the following Article, each committee of directors has such powers and authorities of the directors, including the power and authority to affix theSeal, as are set forth in the resolution of directors establishing the committee.106.The directors have no power to delegate the following powers to a committee of directors;a.to amend the memorandum or articles;b.to change the registered office or agent;c.to designate committees of directors;d.to delegate powers to a committee of directors;e.to appoint or remove directors;f.to appoint or remove an agent;g.to fix emoluments of directors;18h.to approve a plan of merger, consolidation or arrangement;i.to make a declaration of solvency for the purposes of section 198(1)(a) or to approve a liquidation plan;j.to make a determination under section 57(1) that the company will, immediately after a proposed distribution, satisfy the solvency test; ork.to authorise the company to continue as a company incorporated under the laws of a jurisdiction outside the British Virgin Islands.Paragraphs (c) and (d) do not prevent a committee of directors, where authorised by the directors, from appointing a subcommittee and delegating powersexercisable by the committee to the subcommittee.107.The meetings and proceedings of each committee of directors consisting of 2 or more directors shall be governed mutatis mutandis by the provisions ofthese Articles regulating the proceedings of directors so far as the same are not superseded by any provisions in the resolution establishing the committee.108.Without prejudice to the freedom of the directors to establish any other committee, if the shares (or depositary receipts therefore) are listed or quoted onthe Designated Stock Exchange, and if required by the Designated Stock Exchange, the directors shall establish and maintain an audit committee as acommittee of the board of directors, the composition and responsibilities of which shall comply with the rules and regulations of the SEC and theDesignated Stock Exchange. The audit committee shall meet at least once every financial quarter, or more frequently as circumstances dictate.109.The Company shall adopt a formal written audit committee charter and review and assess the adequacy of the formal written charter on an annual basis.The charter shall specify the responsibilities of the Audit Committee which shall include responsibility for, among other things, ensuring its receipt from theoutside auditors of the Company of a formal written statement delineating all relationships between the auditor and the Company, and the AuditCommittee’s responsibility for actively engaging in a dialogue with the auditor with respect to any disclosed relationships or services that may impact theobjectivity and independence of the auditor take appropriate action to oversee the independence of the outside auditor. In addition, the Audit Committee isresponsible for reviewing potential conflict of interest situations and approving all Related Party Transactions.110.Without prejudice to the freedom of the directors to establish any other committees, the Board may establish a Stock Option Committee to administer theCompany’s stock option plans, including authority to make and modify awards under such plans. For so long as the Securities of the Company are listed ortraded on the Designated Stock Exchange, the Stock Option Committee shall have at least two Independent Directors. The Stock Option Committee willadminister the Company’s stock option plans, including the authority to make and modify awards under such plans.111.Without prejudice to the freedom of the directors to establish any other committees, the Board may establish a Nominating Committee to assist the Board inidentifying qualified individuals to become members of the Board.OFFICERS112.The Company may by resolution of directors appoint officers of the Company at such times as shall be considered necessary or expedient. Such officersmay consist of a Chairman of the Board of Directors, a Vice Chairman of the Board of Directors, a President and one or more Vice Presidents, Secretaries andTreasurers and such other officers as may from time to time be deemed desirable. Any number of offices may be held by the same person.113.The officers shall perform such duties as shall be prescribed at the time of their appointment subject to any modification in such duties as may beprescribed thereafter by resolution of directors or resolution of members, but in the absence of any specific allocation of duties it shall be the responsibilityof the Chairman of the Board of Directors to preside at meetings of directors and members, the Vice Chairman to act in the absence of the Chairman, thePresident to manage the day to day affairs of the Company, the Vice Presidents to act in order of seniority in the absence of the President but otherwise toperform such duties as may be delegated to them by the President, the Secretaries to maintain the share register, minute books and records (other thanfinancial records) of the Company and to ensure compliance with all procedural requirements imposed on the Company by applicable law, and the Treasurerto be responsible for the financial affairs of the Company.19114.Subject to the rules of the Designated Stock Exchange, the emoluments of all officers shall be fixed by resolution of directors.115.The officers of the Company shall hold office until their successors are duly elected and qualified, but any officer elected or appointed by the directors maybe removed at any time, with or without cause, by resolution of directors. Any vacancy occurring in any office of the Company may be filled by resolutionof directors.CONFLICT OF INTERESTS116.A director of the Company shall, forthwith after becoming aware of the fact that he is interested in a transaction entered into or to be entered into by theCompany, disclose the interest to all other directors of the Company.117.A director of the Company is not required to comply with Article 112 if;a.the transaction or proposed transaction is between the director and the Company; andb.the transaction or proposed transaction is or is to be entered into in the ordinary course of the company’s business and on usual terms andconditions.118.For the purposes of Article 112 a disclosure to all other directors to the effect that a director is a member, director or officer of another named entity or has afiduciary relationship with respect to the entity or a named individual and is to be regarded as interested in any transaction which may, after the date of theentry or disclosure, be entered into with that entity or individual, is a sufficient disclosure of interest in relation to that transaction.119.A.A director of the Company who is interested in a transaction entered into or to be entered into by the Company may:(i)vote on a matter relating to the transaction;(ii)attend a meeting of directors at which a matter relating to the transaction arises and be included among the directors present at the meeting for thepurposes of a quorum; and(iii)sign a document on behalf of the Company, or do any other thing in his capacity as a director, that relates to the transaction,and, subject to compliance with the Act shall not, by reason of his office be accountable to the Company for any benefit which he derives from suchtransaction and no such transaction shall be liable to be avoided on the grounds of any such interest or benefit.119.B.For so long the Securities of the Company are listed or traded on the Designated Stock Exchange, the Company shall conduct an appropriate review of allmaterial Related Party Transactions on an ongoing basis and shall utilize the Audit Committee for the review and approval of potential conflicts of interestsituations.INDEMNIFICATION120.Subject to the limitations hereinafter provided the Company may indemnify against all expenses, including legal fees, and against all judgments, fines andamounts paid in settlement and reasonably incurred in connection with legal, administrative or investigative proceedings any person who;a.is or was a party or is threatened to be made a party to any threatened, pending or completed proceedings, whether civil, criminal, administrative orinvestigative, by reason of the fact that the person is or was a director, an officer or a liquidator of the Company; orb.is or was, at the request of the Company, serving as a director of, or in any other capacity is or was acting for, another body corporate or apartnership, joint venture, trust or other enterprise.20121.The Company may only indemnify a person if the person acted honestly and in good faith in what he believed to be in the best interests of the Companyand, in the case of criminal proceedings, the person had no reasonable cause to believe that his conduct was unlawful.122.For the purposes of the preceding Article, a director acts in the best interests of the Company if he acts in the best interests of;a.the Company’s holding company; orb.a shareholder or shareholders of the Company; in either case, in the circumstances specified in Article 85.123.The decision of the directors as to whether the person acted honestly and in good faith and with a view to the best interests of the Company and as towhether the person had no reasonable cause to believe that his conduct was unlawful is, in the absence of fraud, sufficient for the purposes of theseArticles, unless a question of law is involved.124.The termination of any proceedings by any judgment, order, settlement, conviction or the entering of a nolle prosequi does not, by itself, create apresumption that the person did not act honestly and in good faith and with a view to the best interests of the Company or that the person had reasonablecause to believe that his conduct was unlawful.Consolidated Statements of Changes in Stockholder’s EquityF5Consolidated Statements of Cash FlowsF6Notes to Consolidated Financial StatementsF7 F22F1REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRMTo the Shareholder and the Sole Director ofLK Technology Ltd.Opinion on the Consolidated Financial StatementsWe have audited the accompanying consolidated balance sheets of LK Technology Ltd. and. subsidiaries (the “Company”) as of December 31, 2017 and 2016, andthe related consolidated statements of operations and comprehensive loss, changes in shareholder’s equity and cash flows for each of the years then ended, andthe related notes (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in allmaterial respects, the consolidated financial position of the Company as of December 31, 2017 and 2016, and the consolidated results of its operations and its cashflows for each of the years then ended, in conformity with accounting principles generally accepted in the United States of America.Basis for OpinionThese consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’sconsolidated financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (UnitedStates) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules andregulations of the Securities and Exchange Commission and the PCAOB.We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonableassurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have,nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internalcontrol over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting.Accordingly, we express no such opinion.An independent member firm of Moore Stephens International Limited – members in principal cities throughout the worldOur audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, andperforming procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in theconsolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well asevaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion.Certified Public AccountantsWe have served as the Company’s auditor since 2018.Hong KongMay 25, 2018F2LK TECHNOLOGY LTD. AND SUBSIDIARIESCONSOLIDATED BALANCE SHEETS(IN U.S. DOLLARS)As of December 31,20172016AssetsCurrent assets:Cash and cash equivalents$72,379$83,843Accounts receivable, net of allowance for doubtful accounts9,729,6251,865,836Other receivables and prepayment2,376,7452,287,934Amounts due from related parties11,760,692Total current assets23,939,4414,237,613Property and equipment, net5,044,8727,771,027Intangible assets, net1,154,1971,682,445Goodwill7,239,9367,239,936Amount due from a related party204,412183,811TOTAL ASSETS37,582,85821,114,832LiabilitiesCurrent liabilities:Accounts payable8,784,5186,446,584Accrued liabilities and other payables12,962,91211,329,613Amounts due to related parties3,563,68316,129,323Total current liabilities25,311,11333,905,520Total liabilities25,311,11333,905,520Commitments and contingenciesShareholder’s Equity (Deficit)Share capitalCommon stock, $1 par value per share; 50,000 shares authorized as of December 31, 2017 and 2016, 1 share issued andoutstanding as of December 31, 2017 and 201611Additional paidin capital41,819,68510,037,469Accumulated deficit(29,936,158)(23,125,704)Accumulated other comprehensive income (loss)388,217297,546Total Shareholder’s Equity (Deficit)12,271,745(12,790,688)TOTAL LIABILITIES AND SHAREHOLDER’S EQUITY (DEFICIT)$37,582,858$21,114,832F3LK TECHNOLOGY LTD. AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS(IN U.S. DOLLARS)For the years endedDecember 31,20172016Revenues$26,082,417$5,233,145Less: Cost of revenues5,547,7796,315,504Less: Operating expenses:Selling and marketing23,908,7336,209,804General and administrative2,451,2492,108,854Research and development1,046,1982,882,202Total operating expenses27,406,18011,200,860Loss from operations(6,871,542)(12,283,219)Other income (expense):Interest expense(26,611)(4,412)Foreign exchange gains (losses)350,679(298,257)Loss from investment(428,571)Other income (expense), net(262,980)(34,572)Total other income (expense), net61,088(765,812)Loss before income taxes(6,810,454)(13,049,031)Income taxesNet loss$(6,810,454)$(13,049,031)Other comprehensive income:Foreign currency translation adjustment90,671387,375Total comprehensive loss$(6,719,783)$(12,661,656)F4LK TECHNOLOGY LTD. AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDER’S EQUITY(IN U.S. DOLLARS)Accumulated otherTotalOrdinary sharesAdditionalpaidin AccumulatedcomprehensiveIncomeShareholder’sEquity SharesAmountcapitaldeficits(loss)(Deficit)Balance as of December 31, 20151$ 1$8,250,505$(10,076,673)$(89,829)$(1,915,996)Capital contribution from C Media1,786,9641,786,964Net loss(13,049,031)(13,049,031)Foreign currency translation adjustment387,375387,375Balance as of December 31, 20161110,037,469(23,125,704)297,546(12,790,688)Capital contribution from C Media31,782,21631,782,216Net loss(6,810,454)(6,810,454)Foreign currency translation adjustment90,67190,671Balance as of December 31, 20171$1$41,819,685$(29,936,158)$388,217$12,271,745F5LK TECHNOLOGY LTD. AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF CASH FLOWS(IN U.S. DOLLARS)For the years endedDecember 31,20172016CASH FLOWS FROM OPERATING ACTIVITIES:Net loss$(6,810,454)$(13,049,031)Depreciation and amortization3,316,1813,245,161Loss on disposal of property and equipment115,19373,022Increase in allowance for doubtful accounts445,39562,591Changes in assets and liabilitiesAccounts receivable(7,933,730)(1,507,296)Other receivables and prepayment(2,202,960)2,873,984Accounts payable2,230,5434,757,457Accrued liabilities and other payables1,866,1377,483,441Net cash (used in) provided by operating activities(8,973,695)3,939,329CASH FLOWS FROM INVESTING ACTIVITIES:Purchase of property and equipment(12,689)(3,554,258)Proceeds from disposal of property and equipment29,942Net cash provided by (used in) investing activities17,253(3,554,258)CASH FLOWS FROM FINANCING ACTIVITIES:Advances from related parties8,938,290(1,197,870)Net cash provided by (used in) financing activities8,938,290(1,197,870)Effect of exchange rate changes6,688(32,746)Net decrease in cash and cash equivalents(11,464)(845,545)Cash and cash equivalents, at beginning of year83,843929,388Cash and cash equivalents, at end of year$72,379$83,843Supplemental cash flow disclosures:Interest paid26,6114,412Income taxes paidF6LK TECHNOLOGY LTD. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS(IN U.S. DOLLARS)NOTE 1 – DESCRIPTION OF BUSINESS AND ORGANIZATIONStar Chariot Limited was incorporated in the British Virgin Islands (“BVI”) as an exempted limited liability company on March 3, 2011. On January 18, 2018, it wasrenamed as LK Technology Ltd. (“LK Technology ” or the “Company”).LK Technology, its subsidiaries and its variable interest entities (“VIEs”) (collectively the “Group”) operate mobile application service for longdistance travel in thePeople’s Republic of China (the “PRC”). The core mobile application product, Luokuang, is made as an LBSsocial contents and services distribution platform. Itoffers functions based on various travel scenarios, e.g. information, entertainment, travel, ecommerce, O2O, advertising, etc.As of December 31, 2017, details of the Company’s subsidiaries and VIEs are as follows:NameDate ofincorporationPlace ofincorporationPercentage oflegal ownershipSubsidiaries:MMB LimitedApr 11, 2013Hong Kong100%Mobile Media (China) LimitedNov 6, 2007Hong Kong100%Zhong Chuan Tian Xia Information and Technology (Beijing) LimitedFeb 1, 2013PRC100%Zhong Chuan Tian Xia Information and Technology (Shenzhen) LimitedDec 23, 2010PRC100%VIEs:Beijing Zhong Chuan Shi Xun Technology Limited (“Zhong Chuan Shi Xun”)May 17, 2004PRC100%Jiangsu Zhong Chuan Rui You Information and Technology Limited (“Zhong Chuan Rui You”)May 26, 2011PRC100%Huoerguosi Luokuang Information and Technology Limited (“Huoerguosi Luokuang”)Jul 19, 2017PRC100%Shenzhen Jiu Zhou Shi Dai Digital and Technology Limited (“Jiu Zhou Shi Dai”)Nov 26, 2004PRC100%F7NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIESBasis of presentationThe consolidated financial statements of the Group have been prepared in accordance with accounting principles generally accepted in the United States of America(“US GAAP”).The Group incurred losses from operations of $6,871,542 and $12,283,219 for the years ended December 31, 2017 and 2016, respectively. As of December 31, 2017, theGroup had a shareholder’s equity of $12,271,145. The Group had negative cash flows from operating activities for the year ended December 31, 2017 of $8,973,695.As of December 31, 2017, the Group had cash and cash equivalents of $72,379 and a working capital deficit of $1,371,672. From 2018 and onwards, the Group willfocus on improving operation efficiency and cost reduction, and enhancing marketing functions to attract more users. The Group regularly monitors its current andexpected liquidity requirements to ensure that it maintains sufficient cash balances and accessible credit to meet its liquidity requirements in the short and long term.The parent company continues to provide cash flow to the Group. Based on working capital conditions and forecast for future operations, the Group believes that itwill be able to meet its payment obligations and other commitments for at least the following twelve months.Principles of consolidationThe consolidated financial statements include the financial statements of the Company, its subsidiaries, including the whollyforeign owned enterprises (“WFOEs”),and VIEs for which the Company is the primary beneficiary. All transactions and balances among the Company, its subsidiaries and consolidated VIEs have beeneliminated upon consolidation. The results of subsidiaries and consolidated VIEs acquired or disposed of are recorded in the consolidated statements of operationsfrom the effective date of acquisition or up to the effective date of disposal, as appropriate.A subsidiary is an entity in which (i) the Company directly or indirectly controls more than 50% of the voting power; or (ii) the Company has the power to appoint orremove the majority of the members of the board of directors or to cast a majority of votes at the meeting of the board of directors or to govern the financial andoperating policies of the investee pursuant to a statute or under an agreement among the shareholders or equity holders. A VIE is required to be consolidated by theprimary beneficiary of the entity if the equity holders in the entity do not have the characteristics of a controlling financial interest or do not have sufficient equity atrisk for the entity to finance its activities without additional subordinated financial support from other parties.F8To comply with the PRC legal restrictions on foreign ownership of companies that operate mobile application services, the Group operates in such restricted servicesin the PRC through certain PRC domestic companies, whose equity interests are held by certain management members or founders of the Group. Part of theregistered capital of these PRC domestic companies was funded by certain management members or founders of the Group. The Group has entered into certainexclusive business services agreements with these PRC domestic companies, which entitle it to receive a majority of their residual returns and make it obligatory forthe Group to absorb a majority of the risk of losses from their activities. In addition, the Group has entered into certain agreements with those management membersor founders, including equity interest pledge agreements of the equity interests held by those management members or founders and exclusive option agreements toacquire the equity interests in these companies when permitted by the PRC laws, rules and regulations.Details of the typical VIE structure of the Group’s significant consolidated VIEs, primarily domestic companies associated with the operations such as Zhong ChuanShi Xun, Zhong Chuan Rui You, Huoerguosi Luokuang and Jiu Zhou Shi Dai, are set forth below:(i)Contracts that give the Group effective control of VIEsExclusive option agreementsThe VIE equity holders have granted the WFOEs exclusive call options to purchase their equity interest in the VIEs at an exercise price equal to the higherof (i) the registered capital in the VIEs; and (ii) the minimum price as permitted by applicable PRC laws. Each relevant VIE has further granted the relevantWFOE an exclusive call option to purchase its assets at an exercise price equal to the book value of the assets or the minimum price as permitted byapplicable PRC laws, whichever is higher. The WFOEs may nominate another entity or individual to purchase the equity interest or assets, if applicable,under the call options. Each call option is exercisable subject to the condition that applicable PRC laws, rules and regulations do not prohibit completion ofthe transfer of the equity interest or assets pursuant to the call option. Each WFOE is entitled to all dividends and other distributions declared by the VIE,and the VIE equity holders have agreed to give up their rights to receive any distributions or proceeds from the disposal of their equity interests in the VIEwhich are in excess of the original registered capital that they contributed to the VIE, and to pay any such distributions or premium to the WFOE. Theexclusive call option agreements remain in effect until the equity interest or assets that are the subject of such agreements are transferred to the WFOEs.Equity pledge agreementsPursuant to the relevant equity pledge agreements, the relevant VIE equity holders have pledged all of their interests in the equity of the VIEs as acontinuing first priority security interest in favor of the corresponding WFOEs to secure the performance of obligations by the VIEs and/or the equityholders under the other structure contracts. Each WFOE is entitled to exercise its right to dispose of the VIE equity holders’ pledged interests in the equityof the VIE and has priority in receiving payment by the application of proceeds from the auction or sale of such pledged interests, in the event of anybreach or default under the loan agreement or other structure contracts, if applicable. These equity pledge agreements remain in force for the duration ofthe relevant loan agreement and other structure contracts.F9(ii)Contracts that enable the Group to receive substantially all of the economic benefits from the VIEsExclusive business services agreementsEach relevant VIE has entered into an exclusive business services agreement with the respective WFOE, pursuant to which the relevant WFOE providesexclusive business services to the VIE. In exchange, the VIE pays a service fee to the WFOE which typically amounts to what would be substantially all ofthe VIE’s pretax profit, resulting in a transfer of substantially all of the profits from the VIE to the WFOE.Other arrangementsThe exclusive call option agreements described above also enable the Group to receive substantially all of the economic benefits from the VIEs by typicallyentitling the WFOEs to all dividends and other distributions declared by the VIEs and to any distributions or proceeds from the disposal by the VIE equityholders of their equity interests in the VIEs that are in excess of the original registered capital that they contributed to the VIEs.Based on these contractual agreements, the Group believes that the PRC domestic companies as described above should be considered as VIEs because the equityholders do not have significant equity at risk nor do they have the characteristics of a controlling financial interest. Given that the Group is the primary beneficiaryof these PRC domestic companies, the Group believes that these VIEs should be consolidated based on the structure as described above.Under the contractual arrangements with the consolidated VIEs, the Group has the power to direct activities of the consolidated VIEs and can have assetstransferred out of the consolidated VIEs under its control. Therefore, the Group considers that there is no asset in any of the consolidated VIEs that can be usedonly to settle obligations of the consolidated VIEs, except for registered capital and PRC statutory reserves. As all consolidated VIEs are incorporated as limitedliability companies under the Company Law of the PRC, creditors of the consolidated VIEs do not have recourse to the general credit of the Group for any of theliabilities of the consolidated VIEs.Currently there is no contractual arrangement which requires the Group to provide additional financial support to the consolidated VIEs. However, as the Groupconducts its businesses primarily based on the licenses and approvals held by its consolidated VIEs, the Group has provided and will continue to provide financialsupport to the consolidated VIEs considering the business requirements of the consolidated VIEs, as well as the Group’s own business objectives in the future.F10Use of estimatesThe preparation of financial statements in conformity with US GAAP requires the Group to make estimates and assumptions that affect the reported amounts ofassets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expensesduring the reporting period. The most significant estimates are the allowance for doubtful accounts, the useful lives of property and equipment and intangibleassets, impairment of longlived assets and goodwill. Actual results could differ from those estimates.Fair value measurementsFair value is the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at themeasurement date under current market conditions. When determining the fair value measurements for assets and liabilities required or permitted to be recorded atfair value, the Group considers the principal or most advantageous market in which it would transact and it considers assumptions that market participants woulduse when pricing the asset or liability.Authoritative literature provides a fair value hierarchy which prioritizes the inputs to valuation techniques used to measure fair value into three broad levels. Thelevel in the hierarchy within which the fair value measurement in its entirety falls is based upon the lowest level of input that is significant to the fair valuemeasurement as follows:Level 1Level 1 applies to assets or liabilities for which there are quoted prices in active markets for identical assets or liabilities.Level 2Level 2 applies to assets or liabilities for which there are inputs other than quoted prices included within Level 1 that are observable for the asset or liability such asquoted prices for similar assets or liabilities in active markets; quoted prices for identical assets or liabilities in markets with insufficient volume or infrequenttransactions (less active markets); or modelderived valuations in which significant inputs are observable or can be derived principally from, or corroborated by,observable market data.Level 3Level 3 applies to assets or liabilities for which there are unobservable inputs to the valuation methodology that are significant to the measurement of the fair valueof the assets or liabilities.F11Cash and cash equivalentsCash and cash equivalents primarily consist of cash, money market funds, investments in interest bearing demand deposit accounts, time deposits and highly liquidinvestments with original maturities of three months or less from the date of purchase and are stated at cost which approximates their fair value. The Group has nocash equivalents.Accounts receivable, net of allowanceAccounts receivable are recognized and carried at the original invoiced amount less an allowance for any potential uncollectible amounts. An estimate for doubtfuldebts is made when collection of the full amount is no longer probable. Bad debts are written off as incurred. The Group generally does not require collateral from itscustomers.The Group maintains allowances for doubtful accounts for estimated losses resulting from the failure of customers to make payments on time. The Group reviews theaccounts receivable on a periodic basis and makes specific allowances when there is doubt as to the collectability of individual balances. In evaluating thecollectability of individual receivable balances, the Group considers many factors, including the age of the balance, the customer’s payment history, its currentcreditworthiness and current economic trends.Property and equipment, netProperty and equipment are carried at cost less accumulated depreciation. Depreciation is calculated on a straightline basis over the following estimated usefullives:Wifi equipment– 3 yearsOffice equipment– 3 to 5 yearsVehicles– 5 yearsCosts of repairs and maintenance are expensed as incurred and asset improvements are capitalized. The gain or loss on disposal of property and equipment is thedifference between the net sales proceeds and the carrying amount of the relevant assets and is recognized in the consolidated income statement. When propertyand equipment are retired or otherwise disposed of, the cost and accumulated depreciation are removed from the accounts and any resulting gain or loss is includedin the results of operations for the respective period.Construction in progressAssets under construction are not depreciated until construction is completed and the assets are ready for their intended use.F12Intangible assetsIntangible assets with finite lives are amortized using the straightline method over the estimated economic lives.Intangible assets have weighted average economic lives from the date of purchase as follows:Software– 5 yearsTrademarks– 10 yearsGoodwillThe Group assesses goodwill for impairment in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”)subtopic 35020, Intangibles—Goodwill and Other: Goodwill (“ASC 35020”), which requires that goodwill to be tested for impairment at the reporting unit level atleast annually and more frequently upon the occurrence of certain events, as defined by ASC 35020.We have the option to assess qualitative factors first to determine whether it is necessary to perform the twostep test in accordance with ASC 35020. If we believe,as a result of the qualitative assessment, that it is morelikelythannot that the fair value of the reporting unit is less than its carrying amount, the twostepquantitative impairment test described below is required. Otherwise, no further testing is required. In the qualitative assessment, we consider primary factors such asindustry and market considerations, overall financial performance of the reporting unit, and other specific information related to the operations. In performing thetwostep quantitative impairment test, the first step compares the carrying amount of the reporting unit to the fair value of the reporting unit based on either quotedmarket prices of the ordinary shares or estimated fair value using a combination of the income approach and the market approach. If the fair value of the reportingunit exceeds the carrying value of the reporting unit, goodwill is not impaired and we are not required to perform further testing. If the carrying value of the reportingunit exceeds the fair value of the reporting unit, then we must perform the second step of the impairment test in order to determine the implied fair value of thereporting unit’s goodwill. The fair value of the reporting unit is allocated to its assets and liabilities in a manner similar to a purchase price allocation in order todetermine the implied fair value of the reporting unit goodwill. If the carrying amount of the goodwill is greater than its implied fair value, the excess is recognized asan impairment loss.In 2017, we performed a qualitative assessment for goodwill. Based on the requirements of ASC35020, we evaluated all relevant factors, including but not limited tomacroeconomic conditions, industry and market conditions, financial performance. We weighed all factors in their entirety and concluded that it was not morelikelythannot the fair value was less than the carrying amount of the reporting unit, and further impairment testing on goodwill was unnecessary as of December 31, 2017and 2016.F13Impairment or disposal of longlived assetsLonglived assets other than goodwill are included in impairment evaluations when events and circumstances exist that indicate the carrying value of these assetsmay not be recoverable. In accordance with FASB ASC 360, Property, Plant and Equipment, the Group assesses the recoverability of the carrying value of longlivedassets by first grouping its longlived assets with other assets and liabilities at the lowest level for which identifiable cash flows are largely independent of the cashflows of other assets and liabilities (the asset group) and, secondly, estimating the undiscounted future cash flows that are directly associated with and expected toarise from the use of and eventual disposition of such asset group. If the carrying value of the asset group exceeds the estimated undiscounted cash flows, theGroup recognizes an impairment loss to the extent the carrying value of the longlived asset exceeds its fair value. The Group determines fair value through quotedmarket prices in active markets or, if quotations of market prices are unavailable, through the performance of internal analysis using a discounted cash flowmethodology or obtains external appraisals from independent valuation firms. The undiscounted and discounted cash flow analyses are based on a number ofestimates and assumptions, including the expected period over which the asset will be utilized, projected future operating results of the asset group, discount rateand longterm growth rate.As of December 31, 2017 and 2016, the Group assessed the impairment of its longlived assets and concluded that there was no impairment indication.Business combinationWe account for business combinations using the purchase method of accounting in accordance with FASB ASC topic 805, Business combinations. The purchasemethod accounting requires that the consideration transferred be allocated to the assets, including separately identifiable assets and liabilities we acquired, basedon their estimated fair values. The consideration transferred in an acquisition is measured as the aggregate of the fair values at the date of exchange of the assetsgiven, liabilities incurred, and equity instruments issued as well as the contingent considerations and all contractual contingencies as of the acquisition date. Thecosts directly attributable to the acquisition are expensed as incurred. Identifiable assets, liabilities and contingent liabilities acquired or assumed are measuredseparately at their fair value as of the acquisition date, irrespective of the extent of any noncontrolling interests. The excess of (i) the total of cost of acquisition, fairvalue of the noncontrolling interests and acquisition date fair value of any previously held equity interest in the acquiree over (ii) the fair value of the identifiable netassets of the acquiree, is recorded as goodwill. If the cost of acquisition is less than the fair value of the net assets of the subsidiary acquired, the difference isrecognized directly in earnings.Revenue recognitionThe Group recognizes revenue in accordance with FASB ASC topic 605, Revenue Recognition (“ASC 605”). Revenue is recognized when the following four revenuerecognition criteria are met: (i) persuasive evidence of an arrangement exists, (ii) delivery has occurred or services have been provided, (iii) the selling price is fixed ordeterminable, and (iv) collectability is reasonably assured.F14Displaybased online advertising servicesThe Group provides displaybased online advertising services to customers by integrating text description, image and video, and displaying the advertisements in aprominent position of LuoKuang Application. The Group recognizes revenue in accordance with ASC 605, over the contractual term based on the agreements andconfirmation letters signed by both parties, commencing on the date the customer’s advertisement is displayed on the Group’s platform.Foreign currency translationThe functional and reporting currency of the Company and the Company’s subsidiaries domiciled in BVI and Hong Kong are the United States dollar (“U.S. dollar”).The financial records of the Company’s other subsidiaries and VIEs located in the PRC are maintained in their local currency, the Chinese Renminbi (“RMB”), whichare the functional currency of these entities.Monetary assets and liabilities denominated in currencies other than the functional currency are translated into the functional currency at the rates of exchangeruling at the balance sheet date. Transactions in currencies other than the functional currency during the year are converted into the functional currency at theapplicable rates of exchange prevailing when the transactions occurred. Transaction gains and losses are recognized in the statements of operations.The Company’s entities with a functional currency of RMB translate their operating results and financial position into the U.S. dollar, the Company’s reportingcurrency. Assets and liabilities are translated using the exchange rates in effect on the balance sheet date. Revenues, expenses, gains and losses are translatedusing the average rate for the year. Retained earnings and equity are translated using the historical rate. Translation adjustments are reported as cumulativetranslation adjustments and are shown as a separate component of other comprehensive income.Income taxesDeferred income taxes are recognized for temporary differences between the tax basis of assets and liabilities and their reported amounts in the financial statements,net operating loss carry forwards and credits, by applying enacted statutory tax rates applicable to future years. Deferred tax assets are reduced by a valuationallowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Current income taxesare provided for in accordance with the laws and regulations applicable to the Group as enacted by the relevant tax authorities.The impact of an uncertain income tax position on the income tax return must be recognized at the largest amount that is morelikelythan not to be sustained uponaudit by the relevant tax authorities. An uncertain income tax position will not be recognized if it has less than a 50% likelihood of being sustained. Additionally, theGroup classifies the interest and penalties, if any, as a component of the income tax expense. For years ended December 31, 2017 and 2016, the Group did not haveany material interest or penalties associated with tax positions nor did the Group have any significant unrecognized uncertain tax positions.F15Related partiesParties are considered to be related to the Company if the parties, directly or indirectly, through one or more intermediaries, control, are controlled by, or are undercommon control with the Company. Related parties also include principal owners of the Company, its management, members of the immediate families of principalowners of the Company and its management and other parties with which the Company may deal with if one party controls or can significantly influence themanagement or operating policies of the other to an extent that one of the transacting parties might be prevented from fully pursuing its own separate interests. TheCompany discloses all significant related party transactions.LeasesLeases have been classified as either capital or operating leases. Leases that transfer substantially all the benefits and risks incidental to the ownership of assets areaccounted for as if there was an acquisition of an asset and incurrence of an obligation at the inception of the lease. All other leases are accounted for as operatingleases wherein rental payments are expensed as incurred.When the Group is the lessor, minimum contractual rental from leases are recognized on a straightline basis over the noncancelable term of the lease. With respectto a particular lease, actual amounts billed in accordance with the lease during any given period may be higher or lower than the amount of rental revenue recognizedfor the period. Straightline rental revenue commences when the customer assumes control of the leased premises. Accrued straightline rents receivable representsthe amount by which straightline rental revenue exceeds rents currently billed in accordance with lease agreements. Contingent rental revenue is accrued when thecontingency is removed.Advertising costsAdvertising costs include expenses associated with direct marketing. All advertising costs are expensed as incurred and included in selling and marketing expenses.During the years ended December 31, 2017 and 2016, advertising costs amounted to $23,171,170 and $4,537,653, respectively.Comprehensive lossComprehensive loss includes net loss and foreign currency translation adjustments and is presented net of tax. The tax effect is nil for the two years endedDecember 31, 2017 and 2016 in the consolidated statements of comprehensive loss.Concentration of credit riskFinancial instruments that potentially expose the Group to concentrations of credit risk consist primarily of cash and accounts receivable. The Group places its cashwith financial institutions with highcredit rating and quality in China. For the year ended December 31, 2017, two customers accounted for over 10% of totalrevenue. For the year ended December 31, 2016, four customers accounted for over 10% of total revenue. At December 31, 2017 and 2016, the Group had credit riskexposure of uninured cash in banks of approximately $72,379 and $83,843, respectively.F16NOTE 3 – INCOME TAXAt December 31, 2017 and 2016, the Group had an unused net operating loss carryforwards of approximately $25,123,726 and $20,081,239, respectively, for income taxpurposes, which expires between 2018 to 2022 and between 2017 to 2021, respectively. At December 31, 2017 and 2016, these net operating losses carryforwards mayresult in future income tax benefits of approximately $5,043,944 and $4,008,863, respectively, however, because realization is uncertain at this time, a valuationallowance in the same amount has been established. Deferred income taxes reflect the net effects of temporary differences between the carrying amounts of assetsand liabilities for financial reporting purposes and the amounts used for income tax purposes.Significant components of the Group’s deferred tax liabilities and assets of December 31, 2017 and 2016 are as follows:December 31,December 31,20172016Deferred tax liabilities$$Deferred tax assetNet operating loss carryforward5,043,9444,008,863Valuation allowance(5,043,944)(4,008,863)Net deferred tax assetMovement of valuation allowanceDecember 31,2017December 31,2016At the beginning of the year$4,008,863$2,049,352Current year addition823,9702,159,518Expired(61,411)Exchange difference272,522(200,007)At the end of the year5,043,9444,008,863The Company is not subject to taxation in BVI under the current BVI law. Subsidiaries operating in the PRC are subject to PRC Enterprise Income Tax at the statutoryrate of 25% for the years ended December 31, 2017 and 2016. Subsidiaries operating in Hong Kong are subject to Hong Kong income taxes at a rate of 16.5% for theyears ended December 31, 2017 and 2016.F17A reconciliation of the income tax expense to the amount computed by applying the current statutory tax rate to the loss before income taxes in the consolidatedstatements of comprehensive income is as follows:December 31,December 31,20172016Loss before income taxes$(6,810,454)$(13,049,031)Tax loss at statutory tax rate(1,655,174)(3,386,822)Nondeductible items6,729,2551,712,857Nontaxable items(3,789,956)(674,189)Change in valuation allowance823,9702,159,518Tax benefits(2,108,095)188,636Income tax expensesNOTE 4 – ACCOUNTS RECEIVABLEAt December 31, 2017 and 2016, accounts receivable consisted of the following:December 31,December 31,20172016Accounts receivable$10,406,602$2,098,946Less: allowance for doubtful accounts676,977233,110$9,729,625$1,865,836NOTE 5 – OTHER RECEIVABLESAt December 31, 2017 and 2016, other receivables consisted of the following:December 31,2017December 31,2016Advances to suppliers$339,701$181,472VAT recoverable (1)3,033,0651,662,805Other5,048,189485,152$2,376,745$2,287,934(1)The balance of advanced VAT represents input VAT available for deducting the amount of VAT paid in the future. During the years ended December 31, 2017and 2016, the Group purchased a large amount of WiFi equipment for deployments, which generated related input VAT approved by tax authority.F18NOTE 6 – AMOUNTS DUE FROM RELATEDPARTIESAt December 31, 2017 and 2016, amounts due from related parties consisted of the following:Name of related partyDecember 31,2017December 31,2016C Media Limited (1)$11,760,692$Ya Tuo Ji International Consultancy (Beijing) Limited (2)204,412183,811(1)C Media Limited is the parent company of LK Technology. The Group expects the amounts due from the related party will be returned to the Group within oneyear.(2)Ya Tuo Ji is a company controlled by the spouse of a major shareholder of C Media Limited. The loan is unsecured, interestfree and repayable on January 5,2019.NOTE 7 – PROPERTY AND EQUIPMENTAt December 31, 2017 and 2016, property and equipment consisted of the following:December 31,December 31,Useful life20172016WiFi equipment3 Years$8,711,424$8,367,678Vehicles5 Years43,246Office and other equipment3 – 5 Years170,242416,434Constructioninprogress2,166,4522,652,28811,048,11811,479,646Less: accumulated depreciation(6,003,246)(3,708,619)$5,044,872$7,771,027For the years ended December 31, 2017 and 2016, depreciation expense amounted to $2,628,884 and $2,474,434, respectively, of which $2,423,655 and $2,194,582,respectively, was included in cost of revenue, $117,648 and $121,740, respectively, was included in selling and marketing expenses and the remainder was included ingeneral and administrative expense.Included in constructioninprogress are WiFI equipment under construction.F19NOTE 8 – GOODWILLIn September of 2014, Zhong Chuan Shi Xun acquired a 100% interest in Zhong Chuan Rui You for a consideration of $7,391,894 (RMB48,000,000). Zhong Chuan RuiYou is primarily engaged in on train WiFi business, deploying WiFi equipment on trains and providing passengers with entertainment and information services ontrains. The book value of the identifiable net assets of Zhong Chuan Rui You was $151,958 (RMB963,000) and a goodwill of $7,239,936 was recorded.NOTE 9 – ACCRUED LIABILITIES AND OTHER PAYABLESAt December 31, 2017 and 2016, accrued liabilities and other payables consisted of the following:December 31,December 31,20172016Deferred revenue$2,326,406$302,735Accrued payroll143,998316,458Other taxes payable3,544,469461,699Other payable852,384686,526Other loans6,095,6559,562,915$12,962,912$11,329,613Deferred revenue represents prepayments from customers for advertising service and is recognized as revenue when the advertising services are rendered.Other loans of $939,555 and $57,416, respectively, as of December 31, 2017 and 2016, are unsecured, bear daily interest at 0.04% and are repayable on demand.NOTE 10 – AMOUNTS DUE TO RELATED PARTIESAt December 31, 2017 and 2016, amounts due to related parties consisted of the following:December 31,December 31,Name of related party20172016Mr. Song Xuesong (“Mr. Song”) (1)$2,921,639$10,669,325C Media Limited (2)$$4,855,236Thumb Beijing Branch (3)$612,103$576,560Thumb Shenzhen Branch (3)$29,941$28,202(1) The Group’s CEO(2) C Media Limited, the parent company.(3) Thumb Beijing and Shenzhen Branch are controlled by the spouse of Mr. Song.Amounts due to related parties are shortterm in nature, noninterest bearing, unsecured and payable on demand.F20NOTE 11 – RETIREMENT AND WELFARE BENEFITSThe Group’s fulltime employees are entitled to staff welfare benefits including medical care, casualty, housing benefits, education benefits, unemployment insuranceand pension benefits through a PRC governmentmandated multiemployer defined contribution plan. The Group is required to accrue the employerportion forthese benefits based on certain percentages of the employees’ salaries. The total provision for such employee benefits of $170,227 and $353,033 during the yearsended December 31, 2017 and 2016, respectively, of which $23,392 and $30,455, respectively, was charged to cost of revenue, $48,957 and $97,408, respectively wascharged to selling and marketing expenses, $49,717 and $86,934, respectively, was charged to general and administrative expenses and $48,161 and $138,236,respectively was charged to research and development expenses. The Group is required to make contributions to the plan out of the amounts accrued for all staffwelfare benefits except for education benefits. The PRC government is responsible for the staff welfare benefits including medical care, casualty, housing benefits,unemployment insurance and pension benefits to be paid to these employees.NOTE 12 – STATUTORY RESERVESAs stipulated by the relevant law and regulations in the PRC, the Group’s subsidiaries and VIEs in the PRC are required to maintain a nondistributable statutorysurplus reserve. Appropriations to the statutory surplus reserve are required to be made at not less than 10% of profit after taxes as reported in the subsidiaries’statutory financial statements prepared under the PRC GAAP. Once appropriated, these amounts are not available for future distribution to owners or shareholders.Once the general reserve is accumulated to 50% of the subsidiaries’ registered capital, the subsidiaries can choose not to provide more reserves. The statutoryreserve may be applied against prior year losses, if any, and may be used for general business expansion and production and increase in registered capital of thesubsidiaries. The Group allocated $Nil to statutory reserves during the years ended December 31, 2017 and 2016, respectively. The statutory reserves cannot betransferred to the Company in the form of loans or advances and are not distributable as cash dividends except in the event of liquidation.NOTE 13 – COMMITMENTS AND CONTINGENCIESOperating leasesWe have entered into operating lease agreements primarily for our office spaces in China. These leases expire through 2018 and are renewable upon negotiation.Future minimum rental payment required under the Office Lease is as follows:Year ending December 31:Amount2018$122,138F21Contingencies(a) Litigation with Shanghai Fusheng Weier Intelligent Control Technology Co., Ltd.On January 22, 2016, Zhong Chuan Rui You and Shanghai Fusheng Weier Intelligent Control Technology Co., Ltd. (“Fusheng Weier”) signed a contract forequipment of $1,652,842 (RMB10,800,000). Since Zhong Chuan Rui You did not make the payments of $1,126,381 (RMB7,360,000) on the due dates, Fusheng Weierfiled a lawsuit against Zhong Chuan Rui You in Shanghai Xuhui District People’s Court on October 8, 2016. On March 9, 2017, Xuhui District People’s Court issuedthe verdict requiring Zhong Chuan Rui You to pay the overdue debts. In August 2017, C Media Limited made the payment of $512,075 (RMB3,346,000). Theremaining balance has been accrued in accounts payable. The payment schedule for the remaining balance is being negotiated by the two parties. On February 5,2018, a hearing was held adding Zhong Chuan Shi Xun as a defendant. The Group plans to settle the remaining balance within one year.(b) Lawsuit with Gansu Jinlun Culture Media Co., Ltd.On August 22, 2014, Zhong Chuan Rui You and Gansu Jinlun Culture Media Co., Ltd. (“Gansu Jinlun”) signed a “Lanzhou Railway Bureau Airconditioned Train WiFi Network System Advertising Operation Rights Agreement” for advertising on 72 trains of $1,467,880 (RMB9,604,633). Due to the dispute on the projectimplementation, Zhong Chuan Rui You did not pay the advertising fee. On August 23, 2017, Gansu Jinlun filed a lawsuit with Gansu Intermediate People’s Court. OnDecember 19, 2017, Gansu Intermediate People’s Court issued a verdict, ruling that Zhong Chuan Rui You settle the overdue advertising fee. Since only 18 out of 72trains have been installed with Wifi network system, Zhong Chuan Rui You disputed and appealed to the verdict. The next court trial date has not yet beendetermined.C Media and Gansu Jinlun are negotiating a potential settlement to resume the contract. According to the legal counsel, it is probable that the settlement will amountto approximately $459,000 (RMB3,000,000); therefore, this amount has been accrued in accounts payable.(c) Litigation with Shenzhen Hua Xun Fang Zhou Technology Co., Ltd.On June 16, 2015, Zhong Chuan Rui You signed a cooperation agreement with Shenzhen Hua Xun Fang Zhou Technology Co., Ltd. (“Shenzhen Hua Xun”) andXuesong Song, a major shareholder of C Media Limited. Pursuant to this agreement, Zhong Chuan Rui You procures equipment from Shenzhen Hua Xun. XuesongSong acts as a joint liability guarantor for the entire debts of Zhong Chuan Rui You under this agreement. As Zhong Chuan Rui You did not make the payments onthe due dates, Shenzhen Hua Xun filed a lawsuit with Shenzhen Baoan District People’s Court on May 31, 2016. On November 1, 2016, Zhong Chuan Rui You,Xuesong Song and Shenzhen Hua Xun reached a settlement in Shenzhen Baoan District People’s Court to settle $1,735,389 (RMB11,355,000) in four instalments. OnDecember 30, 2017, the debt was assigned to C Media Limited.NOTE 14 – SUBSEQUENT EVENTThe Group has evaluated all events or transactions that occurred after December 31, 2017 through May 25, 2018, which is the date that the financial statements wereavailable to be issued.F22EX1.1 2 f20f2017ex11_luokung.htm AMENDED AND RESTATED MEMORANDUM OF ASSOCIATION AND ARTICLES OF ASSOCIATION OF LUOKUNGTECHNOLOGY CORP., DATED AUGUST 20, 2018, AND AS CURRENTLY IN EFFECTExhibit 1.1BC NO: 1553620British Virgin IslandsThe BVI Business Companies Act, 2004(No. 16 of 2004)Memorandum of AssociationandArticles of AssociationofLuokung Technology Corp.Incorporated the 24th day of October, 2009Amended and Restated the 11th Day of December 2009Amended and Restated the 17th Day of December 2009Amended and Restated the 25th Day of March 2010Amended and Restated the 21st day of May 2018Amended and restated the 17 August 2018Amended and restated the 21 August 2018Portcullis (BVI) LimitedPortcullis Chambers4th Floor Ellen Skelton Building3076 Sir Francis Drake HighwayRoad Town, TortolaBritish Virgin IslandsTERRITORY OF THE BRITISH VIRGIN ISLANDSTHE BVI BUSINESS COMPANIES ACT, 2004(No. 16 of 2004)MEMORANDUM OF ASSOCIATIONOFLuokung Technology Corp.NAME1.The name of the Company is Luokung Technology Corp.TYPE OF COMPANY2.The Company is a company limited by shares.REGISTERED OFFICE3.The first Registered Office of the Company is the offices of Portcullis TrustNet (BVI) Limited, Portcullis TrustNet Chambers, P.O. Box 3444, Road Town,Tortola, British Virgin Islands, the office of the registered agent.3.1The current Registered Office of the Company is Portcullis Chambers, 4th Floor Ellen Skelton Building, 3076 SirFrancis Drake Highway, Road Town,Tortola, British Virgin Islands VG1110.REGISTERED AGENT4.The first Registered Agent of the Company is Portcullis TrustNet (BVI) Limited of Portcullis TrustNet Chambers, P.O. Box 3444, Road Town, Tortola,British Virgin Islands.4.1The current Registered Agent of the Company is Portcullis (BVI) Ltd of Portcullis Chambers, 4th Floor Ellen Skelton Building, 3076 Sir Francis DrakeHighway, Road Town, Tortola, British Virgin Islands VG1110.AUTHORISED NUMBER OF SHARES5.The Company is authorised to issue a maximum of 251,000,000 shares.CLASSES, NUMBER AND PAR VALUE OF SHARES6.As at the date of adoption of this memorandum, the Company is authorised to issue (a) 250,000,000 ordinary shares without par value (“OrdinaryShares”); and (b) 1,000,000 preferred shares without par value (“Preferred Shares”).FRACTIONAL SHARES7.The Company may issue fractions of a share and a fractional share shall have the same corresponding fractional liabilities, limitations, preferences,privileges, qualifications, restrictions, rights and other attributes of a whole share of the same class or series of shares.RIGHTS, PRIVILEGES, RESTRICTIONS AND CONDITIONS ATTACHING TO SHARES8.(1)Subject to the memorandum and articles of association (and, for greater clarity, without prejudice to any special rights conferred thereby on theholders of any other shares), an Ordinary Share of the Company confers on the holder;(a)the right to one vote at a meeting of the members of the Company or on any Resolution of Members;(b)the right to an equal share in any Distribution paid by the Company; and(c)the right to an equal share in the distribution of the surplus assets of the Company on a winding up.(2)Subject to the memorandum and articles of association (and, for greater clarity, without prejudice to any special rights conferred thereby on theholders of any other shares), a Preferred Share of the Company confers on the holder;(a)the right to 399 votes at a meeting of the members of the Company or on any Resolution of Members;(b)the right to an equal share in any Distribution paid by the Company;(c)the right to an equal share in the distribution of the surplus assets of the Company on its liquidation.(d)be freely transferable, in whole or in part, by Mr. Xuesong Song to any third party through one or more Private Transactions, subject toApplicable Law; and(e)be freely transferable, in whole or in part, by Mr. Xuesong Song to any third party through one or more Public Transactions, subject to ApplicableLaw and Automatic Conversion of such Preferred Share(s) into Ordinary Share(s).(3)The directors may at their discretion by resolution of directors redeem, purchase or otherwise acquire all or any of the shares in the Companysubject to the Articles..VARIATION OF CLASS RIGHTS9.If at any time the issued shares are divided into different classes or series of shares, the rights attached to any class or series (unless otherwise providedby the terms of issue of the shares of that class or series) may, whether or not the Company is being wound up, be varied with the consent in writing of theholders of not less than threefourths of the issued shares of that class or series and of the holders of not less than threefourths of the issued shares ofany other class or series of shares which may be affected by such variation.RIGHTS NOT VARIED BY THE ISSUE OF SHARES PARI PASSU10.The rights conferred upon the holders of the shares of any class issued with preferred or other rights shall not, unless otherwise expressly provided by theterms of issue of the shares of that class, be deemed to be varied by the creation or issue of further shares ranking pari passu therewith.CAPACITY AND POWERS11.Subject to the Act, any other British Virgin Islands legislation and paragraph 12 below the Company has, irrespective of corporate benefit:(a)full capacity to carry on or undertake any business or activity, do any act or enter into any transaction;(b)for the purposes of paragraph (a), full rights, powers and privileges; and(c)full powers to issue shares with preemptive rights, subject to the Articles.2LIMITATIONS ON THE COMPANY’S BUSINESS12.For the purposes of section 9(4) of the Act the Company may not;(a)carry on banking or trust business, unless it is licensed to do so under the Banks and Trust Companies Act, 1990;(b)carry on business as an insurance or reinsurance company, insurance agent or insurance broker, unless it is licensed under the Insurance Act1994;(c)carry on business of company management, unless it is licensed under the Company Management Act, 1990;(d)carry on the business of providing the registered office or the registered agent for companies incorporated in the British Virgin Islands;(e)carry on the business as a mutual fund, manager of mutual funds or administrator of mutual funds unless it is recognized or licenced as the casemay be under the Mutual Funds Act 1996; or(f)carry on any other business that gives rise to a licencing requirement under any law for the time being in force in the British Virgin Islands unlessit is licenced, regulated, recognised or otherwise approved pursuant to such law.REGISTERED SHARES AND PROHIBITION ON ISSUE OF BEARER SHARES13.Shares in the Company may only be issued as registered shares. The issue of shares to bearer is prohibited.PROHIBITION ON EXCHANGE AND CONVERSION OF REGISTERED SHARES TO BEARER SHARES14.The exchange or conversion of registered shares to bearer shares is prohibited.TRANSFER OF REGISTERED SHARES15.Subject to the provisions of the Articles the Company may upon receipt of an instrument of transfer enter the name of the transferee in the register ofmembers subject to the prior or simultaneous approval of the Company as evidenced by a resolution of directors or by a resolution of members. Subject toany resolution of the members to the contrary, the directors may resolve by resolution of directors to refuse or delay the registration of the transfer forreasons that shall be specified in the resolution of directors.AMENDMENT OF MEMORANDUM AND ARTICLES OF ASSOCIATION16.1The Company may amend its Memorandum or Articles by a resolution of members or by a resolution of directors provided that the directors shall not havethe power to amend the Memorandum or Articles;(a)to restrict the rights or powers of the members to amend the Memorandum or Articles;(b)to change the percentage of members required to pass a resolution to amend the Memorandum or Articles;(c)in circumstances where the Memorandum or Articles cannot be amended by the members; or(d)to Clauses 8, 9, 10 or this Clause 12.16.2No amendment may be made to Regulation 76 of the Articles unless approved by an affirmative vote of the holders of 66 2/3 percent or more of theoutstanding votes of the shares entitled to vote thereon.3DEFINITIONS17.The meanings of words in this Memorandum are as defined in the Articles.We, Portcullis TrustNet (BVI) Limited of Portcullis TrustNet Chambers, P.O. Box 3444, Road Town, Tortola, British Virgin Islands for the purpose ofincorporating a BVI Business Company under the laws of the British Virgin Islands hereby sign this Memorandum of Association the 27th day of October,2009.Incorporator/s/ Nicole WheatleyPortcullis TrustNet (BVI) LimitedPortcullis TrustNet ChambersP.O. Box 3444Road Town, TortolaBritish Virgin Islands(Sgd. Nicole Wheatley)4TERRITORY OF THE BRITISH VIRGIN ISLANDSTHE BVI BUSINESS COMPANIES ACT, 2004(No. 16 of 2004)ARTICLES OF ASSOCIATIONOFLuokung Technology Corp.PRELIMINARY1.In these Articles, if not inconsistent with the subject or context, the words and expressions standing in the first column of the following table shall bear themeanings set opposite them respectively in the second column thereof.WordsMeaningApplicable Lawall Laws, including those of a jurisdiction in or outside of the United States, applicable to the Private orPublic Transactions.Actthe BVI Business Companies Act, 2004 (No 16 of 2004.) including any modification, extension, reenactment or renewal thereof and any regulations made thereunder.Articlesthese Articles of Association as originally framed or as from time to time amended.Automatic Conversioneach Preferred Share shall be automatically converted at any time after issue and without the payment ofany additional sum into an equal number of fully paid Ordinary Shares upon the conclusion of anytransfer by Mr. Xuesong Song to any third party through one or more Public Transactions.Designated Stock Exchangeeither the Nasdaq National Stock Market, Inc. or such other exchange or quotation bureau on which, theCompany’s Securities are listed or traded; provided that until the Securities are listed on any such“Exchange” the rules of any such Designated Stock Exchange shall be inapplicable to these Articles.directora director of the Company.distributionin relation to a distribution by a company to a member, means(i)the direct or indirect transfer of an asset, other than the Company’s own shares, to or forthe benefit of the member or(ii)the incurring of a debt to or for the benefit of a member,in relation to shares held by a member, and whether by means of a purchase of an asset, the purchase,redemption or other acquisition of shares, a transfer of indebtedness or otherwise, and includes adividend.Independent Directora person who meets the then current requirements for “independence” of the applicable rules andregulations of the U.S. Securities and Exchange Commission and the Designated Stock Exchange.5member or shareholderin relation to the Company, means a person whose name is entered in the register of members as theholder of one or more shares, or fractional shares, in the Company.Memorandumthe Memorandum of Association of the Company as originally framed or as from time to time amended.Mr. Xuesong Songthe founder, a director and Chairman of LK Technology Ltd.Ordinary Sharesissued or unissued ordinary shares of no par value of the Company having the rights, preferences andprivileges set out in the MemorandumPersonAn individual, a corporation, a trust, trustee, the estate of a deceased individual, a partnership or anunincorporated association of persons.Preferred Sharesissued or unissued preferred shares of no par value of the Company having the rights, preferences andprivileges set out in the MemorandumPrivate Transactionstransactions that are not considered as a Public Transaction.Public Transactionstransactions through any national securities exchanges and/or through the automated quotation systemincluding but not limited to NASDAQ, NYSE (including NYSE American) or OTC Markets, or anytransaction executed by the broker or with a market maker.Related Party(a) any director, officer and employee of the Company; (b) any family member of such director, officer andemployee; and (c) any entity (e.g. a corporation, partnership, or trust) controlled by or set up for thebenefit of a director, officer or employee, or a family member of such director, officer or employee.Relevant SystemA facility for the electronic transfer of uncertificated securities administered by The Depository TrustCompany or such other Person regulated by the SEC.resolution of directors(a)A resolution approved at a duly convened and constituted meeting of directors of the Companyor of a committee of directors of the Company by the affirmative vote of a simple majority of thedirectors present at the meeting who voted and did not abstain; or(b)a resolution consented to in writing by a simple majority of the directors or of all members of thecommittee, as the case may be;except that where a director is given more than one vote, he shall be counted by the number ofvotes he casts for the purpose of establishing a majority.resolution of membersSubject to the provisions of the Memorandum and Articles means:(a)A resolution approved at a duly convened and constituted meeting of the members of theCompany by the affirmative vote of(i)a majority of in excess of 50% of the votes of the shares entitled to vote and voting onthe resolution, or(ii)a majority of in excess of 50% of the votes of each class or series of shares entitled tovote as a class or series and voting on the resolution and a majority of in excess of 50%of the votes of the remaining shares entitled to vote and voting on the resolution; or6(b)a resolution consented to in writing by(i)an absolute majority of the votes of shares entitled to vote thereon, or(ii)an absolute majority of the votes of each class or series of shares entitled to votethereon as a class or series and of an absolute majority of the votes of the remainingshares entitled to vote thereon.SealAny Seal which has been duly adopted as the common seal of the Company.SECThe United States Securities and Exchange Commission.Securitiesshares and debt obligations of every kind, and options, warrants and rights to acquire shares, or debtobligations.SharesOrdinary Shares and/or Preferred Shares, as the case may be.solvency testa company satisfies the solvency test if;(i)the value of the company’s assets exceeds its liabilities, and(ii)the company is able to pay its debts as they fall due.treasury sharesshares in the Company that were previously issued but were repurchased, redeemed or otherwiseacquired by the Company and not cancelled.2.“Written” or any term of like import includes words typewritten, printed, painted, engraved, lithographed, photographed or represented or reproduced byany mode of reproducing words in a visible form, including telex, facsimile, telegram, cable or other form of writing produced by electronic communication.3.Save as aforesaid any words or expressions defined in the Act shall bear the same meaning in these Articles.4.Whenever the singular or plural number, or the masculine, feminine or neuter gender is used in these Articles, it shall equally, where the context admits,include the others.5.A reference in these Articles to voting in relation to shares shall be construed as a reference to voting by members holding the shares except that it is thevotes allocated to the shares that shall be counted and not the number of members who actually voted and a reference to shares being present at a meetingshall be given a corresponding construction.6.A reference to money in these Articles is, unless otherwise stated, a reference to the currency in which shares in the Company shall be issued according tothe provisions of the Memorandum.7REGISTERED SHARES7.Every member holding registered shares in the Company shall be entitled to a certificate signed by a director or officer of the Company or such otherperson who may be authorised from time to time by resolution of directors or under the Seal, with or without the signature of any director of the Company,specifying the share or shares held by him and the signature of the director or officer or person so authorised and the Seal may be facsimiles.8.Any member receiving a share certificate for registered shares shall indemnify and hold the Company and its directors and officers harmless from any lossor liability which it or they may incur by reason of any wrongful or fraudulent use or representation made by any person by virtue of the possessionthereof. If a share certificate for registered shares is worn out or lost it may be renewed on production of the worn out certificate or on satisfactory proof ofits loss together with such indemnity as may be required by a resolution of directors.9.If several persons are registered as joint holders of any shares, any one of such persons may give an effectual receipt for any distribution payable inrespect of such shares.10.Nothing in these Articles shall require title to any shares or other Securities to be evidenced by a certificate if the Act and the rules of the Designated StockExchange permit otherwise.SHARES AND ISSUED SHARES11.Subject to the provisions of these Articles and, if applicable, the rules of the Designated Stock Exchange, and any resolution of members, the directors ofthe Company may, without limiting or affecting any rights previously conferred on the holders of any existing shares or class or series of shares, offer, allot,grant options over or otherwise dispose of shares to such persons, at such times and upon such terms and conditions as the Company may by resolutionof directors determine. The directors shall not issue more shares than the maximum number provided for in the Memorandum.12.The Company may issue fully paid, partly paid or nil paid shares as well as bonus shares. A partly paid or nil paid share or a share issued for a promissorynote or other written obligation for payment of a debt may be issued subject to forfeiture in the manner prescribed in these Articles.13.Shares in the Company may be issued for consideration in any form, including money, a promissory note or other obligation to contribute money orproperty, real property, personal property (including goodwill and knowhow) services rendered or a contract for future services and the amount of suchconsideration shall be determined by resolution of directors, except that in the case of shares with par value, the amount shall not be less than the parvalue, and in the absence of fraud the decision of the directors as to the value of the consideration received by the Company in respect of the issue isconclusive unless a question of law is involved.14.Before issuing shares for a consideration other than money, the directors shall pass a resolution stating;(a)the amount to be credited for the issue of the shares;(b)their determination of the reasonable present cash value of the nonmoney consideration for the issue; and(c)that, in their opinion, the present cash value of the nonmoney consideration for the issue is not less than the amount to be credited for the issueof the shares.15.A share issued by the Company upon conversion of, or in exchange for, another share or a debt obligation or other security in the Company, shall betreated for all purposes as having been issued for money equal to the consideration received or deemed to have been received by the Company in respectof the other share, debt obligation or security.16.Treasury shares may be disposed of by the Company on such terms and conditions (not otherwise inconsistent with these Articles) as the Company mayby resolution of directors determine.17.Subject to these Articles, the Company may purchase, redeem or otherwise acquire and hold its own shares save that the Company may not purchase,redeem or otherwise acquire its own shares without the consent of the member whose shares are to be purchased, redeemed or otherwise acquired unlessthe Company is permitted by the Act or any other provision in the Memorandum or Articles to purchase, redeem or otherwise acquire the shares withouttheir consent.818.No purchase, redemption or other acquisition of shares shall be made unless the directors determine by resolution of the directors that immediately after thepurchase, redemption or other acquisition the value of the Company’s assets will exceed its liabilities and the Company will be able to pay its debts as theyfall due.19.Sections 60 (Process for acquisition of own shares), 61 (Offer to one or more shareholders) and 62 (Shares redeemed otherwise than at the option ofcompany) of the Act shall not apply to the Company.20.A determination by the directors under Article 18 is not required;(a)the Company redeems a share or shares pursuant to a right of a member to have his shares redeemed or to have his shares exchanged for moneyor other property of the Company; or(b)by virtue of the provisions of Section 179 of the Act.21.Shares that the Company purchases, redeems or otherwise acquires pursuant to Article 17 may be cancelled or held as treasury shares except to the extentthat such shares are in excess of 80 percent of the issued shares of the Company in which case they shall be cancelled but they shall be available forreissue.22.Shares in the Company shall only be held as treasury shares where the directors of the Company resolve as such and the number of shares acquired, whenaggregated with shares of the same class already held by the Company as treasury shares, does not exceed 50% of the shares of that class previouslyissued by the Company, excluding shares that have been cancelled. All rights and obligations attaching to a treasury share are suspended and shall not beexercised by or against the Company while it holds the share as a treasury share. Treasury shares may be reissued by the Company as new shares.23.The Company shall keep a register of members containing;(a)the names and addresses of the persons who hold registered shares in the Company;(b)the number of each class and series of registered shares held by each member;(c)the date on which the name of each member was entered in the register of members;(d)the date on which any person ceased to be a member; and(e)such other information as may be prescribed pursuant to the Act.24.The register of members may be in any such form as the directors may approve but if it is in magnetic, electronic or other data storage form, the companymust be able to produce legible evidence of its contents.25.The original or a copy of the register of members shall be kept at the registered office of the Company or at the office of the registered agent of theCompany.26.A share is deemed to be issued when the name of the member is entered in the register of members.27.Subject to the Act and the rules of the Designated Stock Exchange, the board of directors without further consultation with the holders of any shares orSecurities may resolve that any class or series of shares or other Securities from time to time in issue or to be issued (including shares in issue at the date ofthe adoption of these Articles) may be issued, held, registered and converted to uncertificated form.28.Conversion of shares held in certificated form into shares held in uncertificated form, and vice versa, may be made in such manner as the board of directors,in its absolute discretion, may think fit. The Company or any duly authorised transfer agent (a “Transfer Agent”) shall enter on the register of membershow many shares are held by each member in uncertificated form and in certificated form and shall maintain the register of members. Notwithstanding anyprovision of these Articles, a class or series of shares shall not be treated as two classes by virtue only of that class or series comprising both certificatedshares and uncertificated Shares or as a result of any provision of these Articles which apply only in respect of certificated or uncertificated shares.9MORTGAGES AND CHARGES OF REGISTERED SHARES29.Members may mortgage or charge their registered shares in the Company with such mortgage or charge being evidenced in writing and signed by, or withthe authority of the registered holder of a registered share to which the mortgage or charge relates. The Company shall give effect to the terms of any validmortgage or charge except insofar as it may conflict with any requirements herein contained for consent to the transfer of shares.30.In the case of the mortgage or charge of registered shares there may be entered in the share register of the Company at the request of the registered holderof such shares(a)a statement that the shares are mortgaged or charged;(b)the name of the mortgagee or chargee; and(c)the date on which the aforesaid particulars are entered in the share register.31.Where particulars of a mortgage or charge are entered in the register of members, such particulars shall be cancelled(a)with the written consent of the named mortgagee or chargee or anyone authorized to act on his behalf; or(b)upon evidence satisfactory to the directors of the discharge of the liability secured by the mortgage or charge and the issue of such indemnities asthe directors shall consider necessary or desirable.32.Whilst particulars of a mortgage or charge over registered shares are entered in the register of members pursuant to the preceding articles no transfer ofany share comprised therein shall be effected without the written consent of the named mortgagee or chargee or anyone authorized to act on his behalf.FORFEITURE33.When shares not fully paid on issue or issued for a promissory note or other written obligation for payment of a debt have been issued subject toforfeiture, the following provisions shall apply.34.Written notice specifying a date for payment to be made and the shares in respect of which payment is to be made shall be served on the member whodefaults in making payment pursuant to a promissory note or other written obligations to pay a debt.35.The written notice specifying a date for payment shall(a)name a further date not earlier than the expiration of 14 days from the date of service of the notice on or before which payment required by thenotice is to be made; and(b)contain a statement that in the event of nonpayment at or before the time named in the notice the shares, or any of them, in respect of whichpayment is not made will be liable to be forfeited.36.Where a written notice has been issued and the requirements of the notice have not been complied with within the prescribed time, the directors may at anytime before tender of payment forfeit and cancel the shares to which the notice relates.37.The Company is under no obligation to refund any moneys to the member whose shares have been forfeited and cancelled pursuant to these provisions.Upon forfeiture and cancellation of the shares the member is discharged from any further obligation to the Company with respect to the shares forfeitedand cancelled.10LIEN38.The Company shall have a first and paramount lien on every share issued for a promissory note or for any other binding obligation to contribute money orproperty or any combination thereof to the Company, and the Company shall also have a first and paramount lien on every share standing registered in thename of a member, whether singly or jointly with any other person or persons, for all the debts and liabilities of such member or his estate to the Company,whether the same shall have been incurred before or after notice to the Company of any interest of any person other than such member, and whether thetime for the payment or discharge of the same shall have actually arrived or not, and notwithstanding that the same are joint debts or liabilities of suchmember or his estate and any other person, whether a member of the Company or not. The Company’s lien on a share shall extend to all distributionspayable thereon. The directors may at any time either generally, or in any particular case, waive any lien that has arisen or declare any share to be wholly orin part exempt from the provisions of this Article.39.In the absence of express provisions regarding sale in the promissory note or other binding obligation to contribute money or property, the Company maysell, in such manner as the directors may by resolution of directors determine, any share on which the Company has a lien, but no sale shall be made unlesssome sum in respect of which the lien exists is presently payable nor until the expiration of twentyone days after a notice in writing, stating and demandingpayment of the sum presently payable and giving notice of the intention to sell in default of such payment, has been served on the holder for the timebeing of the share.40.The net proceeds of the sale by the Company of any shares on which it has a lien shall be applied in or towards payment of discharge of the promissorynote or other binding obligation to contribute money or property or any combination thereof in respect of which the lien exists so far as the same ispresently payable and any residue shall (subject to a like lien for debts or liabilities not presently payable as existed upon the share prior to the sale) bepaid to the holder of the share immediately before such sale. For giving effect to any such sale the directors may authorize some person to transfer theshare sold to the purchaser thereof. The purchaser shall be registered as the holder of the share and he shall not be bound to see to the application of thepurchase money, nor shall his title to the share be affected by any irregularity or invalidity in the proceedings in reference to the sale.TRANSFER OF SHARES41.Registered shares in the Company are transferred by a written instrument of transfer signed by the transferor and containing the name and address of thetransferee. The instrument of transfer shall be signed by the transferee if registration as a holder of the share shall impose a liability to the Company on thetransferee. The instrument of transfer of a registered share shall be sent to the Company for registration.42.The board of directors may resolve that interests in shares in the form of depositary receipts may be transferred or otherwise dealt with in accordance withthe regulations and practices instituted by the operator of the Relevant System and any holder of interests in shares shall be entitled to transfer suchinterests by means of such Relevant System and the operator of the Relevant System shall act as agent of the holders of such interests for the purposes ofthe transfer of those interests.43.The register of members may be closed at such times and for such periods as the board of directors may from time to time determine, upon notice beinggiven by advertisement in such newspapers as may be required by the Act and the practice of the Designated Stock Exchange.44.The transfer of a registered share is effective when the name of the transferee is entered on the register of members.45.If the directors of the Company are satisfied that an instrument of transfer relating to shares has been signed but that the instrument has been lost ordestroyed, they may resolve;(a)to accept such evidence of the transfer of the shares as they consider appropriate; and(b)that the transferee’s name should be entered in the register of members notwithstanding the absence of the instrument of transfer.46.The Company must on the receipt of an instrument of transfer from the transferor or transferee of a registered share in the Company enter the name of thetransferee of the share in the register or members unless the directors, if permitted by the Memorandum or these Articles, resolve by resolution of directorsto refuse or delay the registration of the transfer for reasons that shall be specified in the resolution of directors.11TRANSMISSION OF SHARES47.The personal representative of a deceased member may transfer a share even though the personal representative is not a member at the time of the transfer.48.The personal representative, executor or administrator of a deceased member, the guardian of an incompetent member or the trustee of a bankrupt membershall be the only person recognized by the Company as having any title to his share but they shall not be entitled to exercise any rights as a member of theCompany until they have proceeded as set forth in the next following three Articles.49.The production to the Company of any document which is evidence of probate of the will, or letters of administration of the estate, or confirmation asexecutor, of a deceased member or of the appointment of a guardian of an incompetent member or the trustee of a bankrupt member shall be accepted by theCompany even if the deceased, incompetent or bankrupt member is domiciled outside the British Virgin Islands if the document evidencing the grant ofprobate or letters of administration, confirmation as executor, appointment as guardian or trustee in bankruptcy is issued by a foreign court which hadcompetent jurisdiction in the matter. For the purpose of establishing whether or not a foreign court had competent jurisdiction in such a matter the directorsmay obtain appropriate legal advice. The directors may also require an indemnity to be given by the executor, administrator, guardian or trustee inbankruptcy.50.The Company may enter in the register of members the name of any person becoming entitled by operation of law or otherwise to a share or shares inconsequence of the death, incompetence or bankruptcy upon such evidence being produced as may reasonably be required by the directors.51.Any person who has become entitled to a share or shares in consequence of the death, incompetence or bankruptcy of any member may, instead of beingregistered himself, request in writing that some person to be named by him be registered as the transferee of such share or shares and such request shalllikewise be treated as if it were a transfer.52.What amounts to incompetence on the part of a person is a matter to be determined by the court having regard to all the relevant evidence and thecircumstances of the case.REDUCTION OR INCREASE IN AUTHORISED AND UNISSUED SHARES48.The Company may amend the Memorandum to increase or reduce the maximum number of shares the Company is authorised to issue and may in respect ofany unissued shares increase or reduce the number of such shares, or effect any combination of the foregoing.49.The Company may(1)(a) divide its shares, including issued shares, into a larger number of shares; or (b) combine its shares, including issued shares, into a smallernumber of shares.(2)A division or combination of shares, including issued shares, of a class or series shall be for a larger or smaller number, as the case may be, ofshares in the same class or series.(3)A company shall not divide its shares under subsection (1)(a) or (2) if it would cause the maximum number of shares that the Company isauthorised to issue by its memorandum to be exceeded.(4)Where shares are divided or combined under this article, the aggregate par value of the new shares must be equal to the aggregate par value of theoriginal shares.MEETINGS AND CONSENTS OF MEMBERS50.The directors of the Company may convene meetings of the members of the Company at such times and in such manner and places within or outside theBritish Virgin Islands as the directors consider necessary or desirable. The Company may hold an annual general meeting, but shall not (unless required bythe applicable rules of the Designated Stock Exchange for so long as the Company’s Securities are listed or traded on the Designated Stock Exchange) beobliged to hold an annual general meeting.51.Upon the written request of members holding 30 percent or more of the outstanding voting shares in the Company the directors shall convene a meeting ofmembers.1252.The directors shall give not less than 7 days notice of meetings of members to those persons whose names on the date the notice is given appear asmembers in the share register of the Company and are entitled to vote at the meeting.53.The directors may fix the date notice is given of a meeting of members as the record date for determining those shares that are entitled to vote at themeeting.54.A meeting of members may be called on short notice:(a)if members holding not less than 90 percent of the total number of shares entitled to vote on all matters to be considered at the meeting, or 90percent of the votes of each class or series of shares where members are entitled to vote thereon as a class or series together with not less than a90 percent majority of the remaining votes, have agreed to short notice of the meeting, or(b)if all members holding shares entitled to vote on all or any matters to be considered at the meeting have waived notice of the meeting and for thispurpose presence at the meeting shall be deemed to constitute waiver.55.The inadvertent failure of the directors to give notice of a meeting to a member, or the fact that a member has not received notice, does not invalidate themeeting.56.A member may be represented at a meeting of members by a proxy who may speak and vote on behalf of the member.57.The instrument appointing a proxy shall be produced at the place appointed for the meeting before the time for holding the meeting at which the personnamed in such instrument proposes to vote.58.An instrument appointing a proxy shall be in substantially the following form or such other form as the Chairman of the meeting shall accept as properlyevidencing the wishes of the member appointing the proxy.(Name of Company)I/Webeing a member of the aboveCompany withshares HEREBY APPOINTofor failing himofto be my/our proxy to vote for me/us at the meeting of members to be held on the dayofand at any adjournment thereof.(Any restrictions on voting to be inserted here.)Signed this day ofMember59.The following shall apply in respect of joint ownership of shares:a.if two or more persons hold shares jointly each of them may be present in person or by proxy at a meeting of members and may speak as a member;b.if only one of the joint owners is present in person or by proxy he may vote on behalf of all joint owners, andc.if two or more of the joint owners are present in person or by proxy they must vote as one.60.A member shall be deemed to be present at a meeting of members if he participates by telephone or other electronic means and all members participating inthe meeting are able to hear each other.61.A meeting of members is duly constituted if, at the commencement of the meeting, there are present in person or by proxy not less than 50 percent of thevotes of the shares or class or series of shares entitled to vote on resolutions of members to be considered at the meeting. If a quorum be present,notwithstanding the fact that such quorum may be represented by only one person then such person may resolve any matter and a certificate signed bysuch person accompanied where such person be a proxy by a copy of the proxy form shall constitute a valid resolution of members.1362.If within two hours from the time appointed for the meeting a quorum is not present, the meeting, if convened upon the requisition of members, shall bedissolved; in any other case it shall stand adjourned to the next business day at the same time and place or to such other time and place as the directorsmay determine, and if at the adjourned meeting there are present within one hour from the time appointed for the meeting in person or by proxy not lessthan one third of the votes of the shares or each class or series of shares entitled to vote on the resolutions to be considered by the meeting, those presentshall constitute a quorum but otherwise the meeting shall be dissolved.63.At every meeting of members, the Chairman of the Board of Directors shall preside as chairman of the meeting. If there is no Chairman of the Board ofDirectors or if the Chairman of the Board of Directors is not present at the meeting, the members present shall choose some one of their number to be thechairman. If the members are unable to choose a chairman for any reason, then the person representing the greatest number of voting shares present inperson or by prescribed form of proxy at the meeting shall preside as chairman failing which the oldest individual member or representative of a memberpresent shall take the chair.64.The chairman may, with the consent of the meeting, adjourn any meeting from time to time, and from place to place, but no business shall be transacted atany adjourned meeting other than the business left unfinished at the meeting from which the adjournment took place.65.At any meeting of the members the chairman shall be responsible for deciding in such manner as he shall consider appropriate whether any resolution hasbeen carried or not and the result of his decision shall be announced to the meeting and recorded in the minutes thereof. If the chairman shall have anydoubt as to the outcome of any resolution put to the vote, he shall cause a poll to be taken of all votes cast upon such resolution, but if the chairman shallfail to take a poll then any member present in person or by proxy who disputes the announcement by the chairman of the result of any vote mayimmediately following such announcement demand that a poll be taken and the chairman shall thereupon cause a poll to be taken. If a poll is taken at anymeeting, the result thereof shall be duly recorded in the minutes of that meeting by the chairman.66.Any person other than an individual shall be regarded as one member and subject to the specific provisions hereinafter contained for the appointment ofrepresentatives of such persons the right of any individual to speak for or represent such member shall be determined by the law of the jurisdiction where,and by the documents by which, the person is constituted or derives its existence. In case of doubt, the directors may in good faith seek legal advice fromany qualified person and unless and until a court of competent jurisdiction shall otherwise rule, the directors may rely and act upon such advice withoutincurring any liability to any member.67.Any person other than an individual which is a member of the Company may by resolution of its directors or other governing body authorize such personas it thinks fit to act as its representative at any meeting of the Company or of any class of members of the Company, and the person so authorized shall beentitled to exercise the same powers on behalf of the person which he represents as that person could exercise if it were an individual member of theCompany.68.The chairman of any meeting at which a vote is cast by proxy or on behalf of any person other than an individual may call for a notarially certified copy ofsuch proxy or authority which shall be produced within 7 days of being so requested or the votes cast by such proxy or on behalf of such person shall bedisregarded.69.Directors of the Company may attend and speak at any meeting of members of the Company and at any separate meeting of the holders of any class orseries of shares in the Company.70.An action that may be taken by the members at a meeting may also be taken by a resolution of members consented to in writing or by telex, telegram, cable,facsimile or other written electronic communication, without the need for any notice, but if any resolution of members is adopted otherwise than by theunanimous written consent of all members, a copy of such resolution shall forthwith be sent to all members not consenting to such resolution. The consentmay be in the form of counterparts, each counterpart being signed by one or more members.14DIRECTORS71.The first directors of the Company shall be appointed by the first registered agent of the Company and thereafter the directors shall be appointed byresolution of members, subject to Article 78, for such term as the members determine. A person shall not be appointed as a director unless he hasconsented in writing to be a director.72.The minimum number of directors shall be one and the maximum number shall be 20. Unless otherwise determined by the Company in a meeting ofshareholders and subject to the requirements of the Memorandum, the directors may by a Resolution of Directors, amend this Regulation 72 to change thenumber of directors. For as long as Securities of the Company are listed or traded on the Designated Stock Exchange, the directors shall include suchnumber of Independent Directors as applicable law, rules or regulations of the Designated Stock Exchange may require for a foreign private issuer as longas the Company is a foreign private issuer.73.Each director shall hold office for the term, if any, fixed by resolution of members or until his earlier death, resignation or removal.74.Where the Company has only one member who is an individual and that member is also the sole director of the Company, that sole member/director may, byinstrument in writing, nominate a person who is not disqualified from being a director of the Company under section 111(1) of the Act as a reserve directorof the Company to act in the place of the sole director in the event of his death.75.The nomination of a person as a reserve director of the Company ceases to have effect if;a.before the death of the sole member/director who nominated him;(i)he resigns as reserve director, or(ii)the sole member/director revokes the nomination in writing; orb.the sole member/director who nominated him ceases to be the sole member/director of the Company for any reason other than his death.76.A director may be removed from office, with or without cause, by a resolution of directors or a resolution of members. For the purposes of this Regulation76, “cause” means the willful and continuous failure by a director to substantially perform his duties to the Company (other than any such failure resultingfrom incapacity due to physical or mental illness) or the willful engaging by the director in gross misconduct materially and demonstrably injurious to theCompany. If a director is removed from office without cause by a resolution of the members, for the purposes of this Regulation, the resolution of memberswill require the affirmative vote of the holders of 66 2/3 percent or more of the outstanding votes of the shares entitled to vote thereon.77.A director may resign his office by giving written notice of his resignation to the Company and the resignation shall have effect from the date the notice isreceived by the Company or from such later date as may be specified in the notice. A director of the Company shall resign forthwith if he is, or becomes,disqualified to act as a director under the Act.78.The directors may at any time by resolution of directors appoint any person to be a director to fill a vacancy. There is a vacancy if a director dies orotherwise ceases to hold office as a director prior to the expiration of his term of office, where his term of office was fixed upon his appointment. Thedirectors may not appoint a director to fill a vacancy for a term exceeding the term that remained when the person who has ceased to be a director left orotherwise ceased to hold office.79.The Company shall keep a register of directors containing:a.the names and addresses of the persons who are directors of the Company or who have been nominated as reserve directors of the Company;b.the date on which each person whose name is entered in the register was appointed as a director of the Company or nominated as a reservedirector of the Company;c.the date on which each person named as a director ceased to be a director of the Company;d.the date on which the nomination of any person nominated as a reserve director ceased to have effect; ande.such other information as may be prescribed pursuant to the Act.1580.The original or a copy of any register of directors shall be kept at the office of the registered agent of the Company.81.The register of directors may be in any such form as the directors may approve but if it is in magnetic, electronic or other data storage form, the companymust be able to produce legible evidence of its contents.82.With the prior or subsequent approval by a resolution of members, the directors may, by a resolution of directors, fix the emoluments of directors withrespect to services to be rendered in any capacity to the Company.83.A director shall not require a share qualification and may be an individual or a company.POWERS OF DIRECTORS84.The business and affairs of the Company shall be managed by the directors who may pay all expenses incurred preliminary to and in connection with theformation and registration of the Company and may exercise all such powers of the Company as are not by the Act or by the Memorandum or theseArticles required to be exercised by the members of the Company, subject to any delegation of such powers as may be authorized by these Articles and tosuch requirements as may be prescribed by a resolution of members; but no requirement made by a resolution of members shall prevail if it be inconsistentwith these Articles nor shall such requirement invalidate any prior act of the directors which would have been valid if such requirement had not been made.Notwithstanding anything in Section 175 of the Act the directors shall have the power to sell, transfer, lease, exchange or otherwise dispose of more thanfifty percent of the assets of the Company without submitting a proposal to or obtaining the consent of the members of the Company.85.If the Company is a whollyowned subsidiary of a holding company a director may when exercising powers or performing duties as a director act in amanner which he believes is in the best interests of the holding company even though it may not be in the best interests of the Company.86.The directors may, by a resolution of directors, appoint any person, including a person who is a director, to be an officer or agent of the Company. Theresolution of directors appointing an agent may authorize the agent to appoint one or more substitutes or delegates to exercise some or all of the powersconferred on the agent by the Company.87.Every officer or agent of the Company has such powers and authority of the directors, including the power and authority to affix the Seal, as are set forth inthese Articles or in the resolution of directors appointing the officer or agent, except that no agent has any power or authority with respect to thefollowing;a.to amend the memorandum or articles;b.to change the registered office or agent;c.to designate committees of directors;d.to delegate powers to a committee of directors;e.to appoint or remove directors;f.to appoint or remove an agent;g.to fix emoluments of directors;h.to approve a plan of merger, consolidation or arrangement;i.to make a declaration of solvency for the purposes of section 198(1)(a) of the Act or to approve a liquidation plan;j.to make a determination under section 57(1) of the Act that the company will, immediately after a proposed distribution, satisfy the solvency test;ork.to authorise the Company to continue as a company incorporated under the laws of a jurisdiction outside the British Virgin Islands.1688.Any director which is a body corporate may appoint any person its duly authorized representative for the purpose of representing it at meetings of theBoard of Directors or with respect to unanimous written consents.89.The continuing directors may act notwithstanding any vacancy in their body, save that if their number is reduced to their knowledge below the numberfixed by or pursuant to these Articles as the necessary quorum for a meeting of directors, the continuing directors or director may act only for the purposeof appointing directors to fill any vacancy that has arisen or for summoning a meeting of members.90.The directors may by resolution of directors exercise all the powers of the Company to borrow money and to mortgage or charge its undertakings andproperty or any part thereof, to issue debentures, debenture stock and other securities whenever money is borrowed or as security for any debt, liability orobligation of the Company or of any third party.91.All cheques, promissory notes, drafts, bills of exchange and other negotiable instruments and all receipts for moneys paid to the Company, shall be signed,drawn, accepted, endorsed or otherwise executed, as the case may be, in such manner as shall from time to time be determined by resolution of directors.92.The Company shall keep a register of all relevant charges created by the Company showing:a.if the charge is a charge created by the Company, the date of its creation or if the charge is existing on property acquired by the Company, the dateon which the property was acquired;b.a short description of the liability secured by the charge;c.a short description of the property charged;d.the name and address of the trustee for the security, or if there is no such trustee the name and address of the chargee;e.unless the charge is a security to bearer, the name and address of the holder of the charge;f.details of any prohibition or restriction , if any, contained in the instrument creating the charge on the power of the company to create any futurecharge ranking in priority to or equally with the charge; andg.such other information as may be prescribed pursuant to the Act.93.The original or a copy of the register of charges shall be kept at the registered office of the Company or at the office of the registered agent of the Company.PROCEEDINGS OF DIRECTORS94.The directors of the Company or any committee thereof may meet at such times and in such manner and places within or outside the British Virgin Islandsas the directors may determine to be necessary or desirable. Any one or more directors may convene a meeting of directors.95.A director shall be deemed to be present at a meeting of directors if he participates by telephone or other electronic means and all directors participating inthe meeting are able to hear each other.96.A director shall be given not less than 3 days notice of meetings of directors, but a meeting of directors held without 3 days notice having been given to alldirectors shall be valid if all the directors entitled to vote at the meeting who do not attend, waive notice of the meeting and for this purpose, the presenceof a director at a meeting shall constitute waiver on his part. The inadvertent failure to give notice of a meeting to a director, or the fact that a director hasnot received the notice, does not invalidate the meeting.1797.A director may by a written instrument appoint an alternate who need not be a director and an alternate is entitled to attend meetings in the absence of thedirector who appointed him and to vote or consent in place of the director.98.A meeting of directors is duly constituted for all purposes if at the commencement of the meeting there are present in person or by alternate not less thanone half of the total number of directors, unless there are only 2 directors in which case the quorum shall be 2.99.If the Company shall have only one director the provisions herein contained for meetings of the directors shall not apply but such sole director shall havefull power to represent and act for the Company in all matters as are not by the Act or the Memorandum or these Articles required to be exercised by themembers of the Company and in lieu of minutes of a meeting shall record in writing and sign a note or memorandum of all matters requiring a resolution ofdirectors. Such a note or memorandum shall constitute sufficient evidence of such resolution for all purposes.100.At every meeting of the directors the Chairman of the Board of Directors shall preside as chairman of the meeting. If there is no Chairman of the Board ofDirectors or if the Chairman of the Board of Directors is not present at the meeting the Vice Chairman of the Board of Directors shall preside. If there is noVice Chairman of the Board of Directors or if the Vice Chairman of the Board of Directors is not present at the meeting the directors present shall choosesome one of their number to be chairman of the meeting.101.An action that may be taken by the directors or a committee of directors at a meeting may also be taken by a resolution of directors or a committee ofdirectors consented to in writing or by telex, telegram, cable, facsimile or other written electronic communication by all directors or all members of thecommittee as the case may be, without the need for any notice. The consent may be in the form of counterparts, each counterpart being signed by one ormore directors.102.The directors shall cause the following records to be kept:a.minutes of all meetings of directors, members, committees of directors and committees of members; andb.copies of all resolutions consented to by directors, members, committees of directors and committees of members.103.The resolutions, records and minutes referred to in the preceding Article shall be kept at the registered office of the Company, its principal place ofbusiness or at such other place as the directors determine.104.The directors may, by resolution of directors, designate one or more committees, each consisting of one or more directors.105.Subject to the following Article, each committee of directors has such powers and authorities of the directors, including the power and authority to affix theSeal, as are set forth in the resolution of directors establishing the committee.106.The directors have no power to delegate the following powers to a committee of directors;a.to amend the memorandum or articles;b.to change the registered office or agent;c.to designate committees of directors;d.to delegate powers to a committee of directors;e.to appoint or remove directors;f.to appoint or remove an agent;g.to fix emoluments of directors;18h.to approve a plan of merger, consolidation or arrangement;i.to make a declaration of solvency for the purposes of section 198(1)(a) or to approve a liquidation plan;j.to make a determination under section 57(1) that the company will, immediately after a proposed distribution, satisfy the solvency test; ork.to authorise the company to continue as a company incorporated under the laws of a jurisdiction outside the British Virgin Islands.Paragraphs (c) and (d) do not prevent a committee of directors, where authorised by the directors, from appointing a subcommittee and delegating powersexercisable by the committee to the subcommittee.107.The meetings and proceedings of each committee of directors consisting of 2 or more directors shall be governed mutatis mutandis by the provisions ofthese Articles regulating the proceedings of directors so far as the same are not superseded by any provisions in the resolution establishing the committee.108.Without prejudice to the freedom of the directors to establish any other committee, if the shares (or depositary receipts therefore) are listed or quoted onthe Designated Stock Exchange, and if required by the Designated Stock Exchange, the directors shall establish and maintain an audit committee as acommittee of the board of directors, the composition and responsibilities of which shall comply with the rules and regulations of the SEC and theDesignated Stock Exchange. The audit committee shall meet at least once every financial quarter, or more frequently as circumstances dictate.109.The Company shall adopt a formal written audit committee charter and review and assess the adequacy of the formal written charter on an annual basis.The charter shall specify the responsibilities of the Audit Committee which shall include responsibility for, among other things, ensuring its receipt from theoutside auditors of the Company of a formal written statement delineating all relationships between the auditor and the Company, and the AuditCommittee’s responsibility for actively engaging in a dialogue with the auditor with respect to any disclosed relationships or services that may impact theobjectivity and independence of the auditor take appropriate action to oversee the independence of the outside auditor. In addition, the Audit Committee isresponsible for reviewing potential conflict of interest situations and approving all Related Party Transactions.110.Without prejudice to the freedom of the directors to establish any other committees, the Board may establish a Stock Option Committee to administer theCompany’s stock option plans, including authority to make and modify awards under such plans. For so long as the Securities of the Company are listed ortraded on the Designated Stock Exchange, the Stock Option Committee shall have at least two Independent Directors. The Stock Option Committee willadminister the Company’s stock option plans, including the authority to make and modify awards under such plans.111.Without prejudice to the freedom of the directors to establish any other committees, the Board may establish a Nominating Committee to assist the Board inidentifying qualified individuals to become members of the Board.OFFICERS112.The Company may by resolution of directors appoint officers of the Company at such times as shall be considered necessary or expedient. Such officersmay consist of a Chairman of the Board of Directors, a Vice Chairman of the Board of Directors, a President and one or more Vice Presidents, Secretaries andTreasurers and such other officers as may from time to time be deemed desirable. Any number of offices may be held by the same person.113.The officers shall perform such duties as shall be prescribed at the time of their appointment subject to any modification in such duties as may beprescribed thereafter by resolution of directors or resolution of members, but in the absence of any specific allocation of duties it shall be the responsibilityof the Chairman of the Board of Directors to preside at meetings of directors and members, the Vice Chairman to act in the absence of the Chairman, thePresident to manage the day to day affairs of the Company, the Vice Presidents to act in order of seniority in the absence of the President but otherwise toperform such duties as may be delegated to them by the President, the Secretaries to maintain the share register, minute books and records (other thanfinancial records) of the Company and to ensure compliance with all procedural requirements imposed on the Company by applicable law, and the Treasurerto be responsible for the financial affairs of the Company.19114.Subject to the rules of the Designated Stock Exchange, the emoluments of all officers shall be fixed by resolution of directors.115.The officers of the Company shall hold office until their successors are duly elected and qualified, but any officer elected or appointed by the directors maybe removed at any time, with or without cause, by resolution of directors. Any vacancy occurring in any office of the Company may be filled by resolutionof directors.CONFLICT OF INTERESTS116.A director of the Company shall, forthwith after becoming aware of the fact that he is interested in a transaction entered into or to be entered into by theCompany, disclose the interest to all other directors of the Company.117.A director of the Company is not required to comply with Article 112 if;a.the transaction or proposed transaction is between the director and the Company; andb.the transaction or proposed transaction is or is to be entered into in the ordinary course of the company’s business and on usual terms andconditions.118.For the purposes of Article 112 a disclosure to all other directors to the effect that a director is a member, director or officer of another named entity or has afiduciary relationship with respect to the entity or a named individual and is to be regarded as interested in any transaction which may, after the date of theentry or disclosure, be entered into with that entity or individual, is a sufficient disclosure of interest in relation to that transaction.119.A.A director of the Company who is interested in a transaction entered into or to be entered into by the Company may:(i)vote on a matter relating to the transaction;(ii)attend a meeting of directors at which a matter relating to the transaction arises and be included among the directors present at the meeting for thepurposes of a quorum; and(iii)sign a document on behalf of the Company, or do any other thing in his capacity as a director, that relates to the transaction,and, subject to compliance with the Act shall not, by reason of his office be accountable to the Company for any benefit which he derives from suchtransaction and no such transaction shall be liable to be avoided on the grounds of any such interest or benefit.119.B.For so long the Securities of the Company are listed or traded on the Designated Stock Exchange, the Company shall conduct an appropriate review of allmaterial Related Party Transactions on an ongoing basis and shall utilize the Audit Committee for the review and approval of potential conflicts of interestsituations.INDEMNIFICATION120.Subject to the limitations hereinafter provided the Company may indemnify against all expenses, including legal fees, and against all judgments, fines andamounts paid in settlement and reasonably incurred in connection with legal, administrative or investigative proceedings any person who;a.is or was a party or is threatened to be made a party to any threatened, pending or completed proceedings, whether civil, criminal, administrative orinvestigative, by reason of the fact that the person is or was a director, an officer or a liquidator of the Company; orb.is or was, at the request of the Company, serving as a director of, or in any other capacity is or was acting for, another body corporate or apartnership, joint venture, trust or other enterprise.20121.The Company may only indemnify a person if the person acted honestly and in good faith in what he believed to be in the best interests of the Companyand, in the case of criminal proceedings, the person had no reasonable cause to believe that his conduct was unlawful.122.For the purposes of the preceding Article, a director acts in the best interests of the Company if he acts in the best interests of;a.the Company’s holding company; orb.a shareholder or shareholders of the Company; in either case, in the circumstances specified in Article 85.123.The decision of the directors as to whether the person acted honestly and in good faith and with a view to the best interests of the Company and as towhether the person had no reasonable cause to believe that his conduct was unlawful is, in the absence of fraud, sufficient for the purposes of theseArticles, unless a question of law is involved.124.The termination of any proceedings by any judgment, order, settlement, conviction or the entering of a nolle prosequi does not, by itself, create apresumption that the person did not act honestly and in good faith and with a view to the best interests of the Company or that the person had reasonablecause to believe that his conduct was unlawful.Consolidated Statements of Changes in Stockholder’s EquityF5Consolidated Statements of Cash FlowsF6Notes to Consolidated Financial StatementsF7 F22F1REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRMTo the Shareholder and the Sole Director ofLK Technology Ltd.Opinion on the Consolidated Financial StatementsWe have audited the accompanying consolidated balance sheets of LK Technology Ltd. and. subsidiaries (the “Company”) as of December 31, 2017 and 2016, andthe related consolidated statements of operations and comprehensive loss, changes in shareholder’s equity and cash flows for each of the years then ended, andthe related notes (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in allmaterial respects, the consolidated financial position of the Company as of December 31, 2017 and 2016, and the consolidated results of its operations and its cashflows for each of the years then ended, in conformity with accounting principles generally accepted in the United States of America.Basis for OpinionThese consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’sconsolidated financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (UnitedStates) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules andregulations of the Securities and Exchange Commission and the PCAOB.We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonableassurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have,nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internalcontrol over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting.Accordingly, we express no such opinion.An independent member firm of Moore Stephens International Limited – members in principal cities throughout the worldOur audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, andperforming procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in theconsolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well asevaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion.Certified Public AccountantsWe have served as the Company’s auditor since 2018.Hong KongMay 25, 2018F2LK TECHNOLOGY LTD. AND SUBSIDIARIESCONSOLIDATED BALANCE SHEETS(IN U.S. DOLLARS)As of December 31,20172016AssetsCurrent assets:Cash and cash equivalents$72,379$83,843Accounts receivable, net of allowance for doubtful accounts9,729,6251,865,836Other receivables and prepayment2,376,7452,287,934Amounts due from related parties11,760,692Total current assets23,939,4414,237,613Property and equipment, net5,044,8727,771,027Intangible assets, net1,154,1971,682,445Goodwill7,239,9367,239,936Amount due from a related party204,412183,811TOTAL ASSETS37,582,85821,114,832LiabilitiesCurrent liabilities:Accounts payable8,784,5186,446,584Accrued liabilities and other payables12,962,91211,329,613Amounts due to related parties3,563,68316,129,323Total current liabilities25,311,11333,905,520Total liabilities25,311,11333,905,520Commitments and contingenciesShareholder’s Equity (Deficit)Share capitalCommon stock, $1 par value per share; 50,000 shares authorized as of December 31, 2017 and 2016, 1 share issued andoutstanding as of December 31, 2017 and 201611Additional paidin capital41,819,68510,037,469Accumulated deficit(29,936,158)(23,125,704)Accumulated other comprehensive income (loss)388,217297,546Total Shareholder’s Equity (Deficit)12,271,745(12,790,688)TOTAL LIABILITIES AND SHAREHOLDER’S EQUITY (DEFICIT)$37,582,858$21,114,832F3LK TECHNOLOGY LTD. AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS(IN U.S. DOLLARS)For the years endedDecember 31,20172016Revenues$26,082,417$5,233,145Less: Cost of revenues5,547,7796,315,504Less: Operating expenses:Selling and marketing23,908,7336,209,804General and administrative2,451,2492,108,854Research and development1,046,1982,882,202Total operating expenses27,406,18011,200,860Loss from operations(6,871,542)(12,283,219)Other income (expense):Interest expense(26,611)(4,412)Foreign exchange gains (losses)350,679(298,257)Loss from investment(428,571)Other income (expense), net(262,980)(34,572)Total other income (expense), net61,088(765,812)Loss before income taxes(6,810,454)(13,049,031)Income taxesNet loss$(6,810,454)$(13,049,031)Other comprehensive income:Foreign currency translation adjustment90,671387,375Total comprehensive loss$(6,719,783)$(12,661,656)F4LK TECHNOLOGY LTD. AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDER’S EQUITY(IN U.S. DOLLARS)Accumulated otherTotalOrdinary sharesAdditionalpaidin AccumulatedcomprehensiveIncomeShareholder’sEquity SharesAmountcapitaldeficits(loss)(Deficit)Balance as of December 31, 20151$ 1$8,250,505$(10,076,673)$(89,829)$(1,915,996)Capital contribution from C Media1,786,9641,786,964Net loss(13,049,031)(13,049,031)Foreign currency translation adjustment387,375387,375Balance as of December 31, 20161110,037,469(23,125,704)297,546(12,790,688)Capital contribution from C Media31,782,21631,782,216Net loss(6,810,454)(6,810,454)Foreign currency translation adjustment90,67190,671Balance as of December 31, 20171$1$41,819,685$(29,936,158)$388,217$12,271,745F5LK TECHNOLOGY LTD. AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF CASH FLOWS(IN U.S. DOLLARS)For the years endedDecember 31,20172016CASH FLOWS FROM OPERATING ACTIVITIES:Net loss$(6,810,454)$(13,049,031)Depreciation and amortization3,316,1813,245,161Loss on disposal of property and equipment115,19373,022Increase in allowance for doubtful accounts445,39562,591Changes in assets and liabilitiesAccounts receivable(7,933,730)(1,507,296)Other receivables and prepayment(2,202,960)2,873,984Accounts payable2,230,5434,757,457Accrued liabilities and other payables1,866,1377,483,441Net cash (used in) provided by operating activities(8,973,695)3,939,329CASH FLOWS FROM INVESTING ACTIVITIES:Purchase of property and equipment(12,689)(3,554,258)Proceeds from disposal of property and equipment29,942Net cash provided by (used in) investing activities17,253(3,554,258)CASH FLOWS FROM FINANCING ACTIVITIES:Advances from related parties8,938,290(1,197,870)Net cash provided by (used in) financing activities8,938,290(1,197,870)Effect of exchange rate changes6,688(32,746)Net decrease in cash and cash equivalents(11,464)(845,545)Cash and cash equivalents, at beginning of year83,843929,388Cash and cash equivalents, at end of year$72,379$83,843Supplemental cash flow disclosures:Interest paid26,6114,412Income taxes paidF6LK TECHNOLOGY LTD. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS(IN U.S. DOLLARS)NOTE 1 – DESCRIPTION OF BUSINESS AND ORGANIZATIONStar Chariot Limited was incorporated in the British Virgin Islands (“BVI”) as an exempted limited liability company on March 3, 2011. On January 18, 2018, it wasrenamed as LK Technology Ltd. (“LK Technology ” or the “Company”).LK Technology, its subsidiaries and its variable interest entities (“VIEs”) (collectively the “Group”) operate mobile application service for longdistance travel in thePeople’s Republic of China (the “PRC”). The core mobile application product, Luokuang, is made as an LBSsocial contents and services distribution platform. Itoffers functions based on various travel scenarios, e.g. information, entertainment, travel, ecommerce, O2O, advertising, etc.As of December 31, 2017, details of the Company’s subsidiaries and VIEs are as follows:NameDate ofincorporationPlace ofincorporationPercentage oflegal ownershipSubsidiaries:MMB LimitedApr 11, 2013Hong Kong100%Mobile Media (China) LimitedNov 6, 2007Hong Kong100%Zhong Chuan Tian Xia Information and Technology (Beijing) LimitedFeb 1, 2013PRC100%Zhong Chuan Tian Xia Information and Technology (Shenzhen) LimitedDec 23, 2010PRC100%VIEs:Beijing Zhong Chuan Shi Xun Technology Limited (“Zhong Chuan Shi Xun”)May 17, 2004PRC100%Jiangsu Zhong Chuan Rui You Information and Technology Limited (“Zhong Chuan Rui You”)May 26, 2011PRC100%Huoerguosi Luokuang Information and Technology Limited (“Huoerguosi Luokuang”)Jul 19, 2017PRC100%Shenzhen Jiu Zhou Shi Dai Digital and Technology Limited (“Jiu Zhou Shi Dai”)Nov 26, 2004PRC100%F7NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIESBasis of presentationThe consolidated financial statements of the Group have been prepared in accordance with accounting principles generally accepted in the United States of America(“US GAAP”).The Group incurred losses from operations of $6,871,542 and $12,283,219 for the years ended December 31, 2017 and 2016, respectively. As of December 31, 2017, theGroup had a shareholder’s equity of $12,271,145. The Group had negative cash flows from operating activities for the year ended December 31, 2017 of $8,973,695.As of December 31, 2017, the Group had cash and cash equivalents of $72,379 and a working capital deficit of $1,371,672. From 2018 and onwards, the Group willfocus on improving operation efficiency and cost reduction, and enhancing marketing functions to attract more users. The Group regularly monitors its current andexpected liquidity requirements to ensure that it maintains sufficient cash balances and accessible credit to meet its liquidity requirements in the short and long term.The parent company continues to provide cash flow to the Group. Based on working capital conditions and forecast for future operations, the Group believes that itwill be able to meet its payment obligations and other commitments for at least the following twelve months.Principles of consolidationThe consolidated financial statements include the financial statements of the Company, its subsidiaries, including the whollyforeign owned enterprises (“WFOEs”),and VIEs for which the Company is the primary beneficiary. All transactions and balances among the Company, its subsidiaries and consolidated VIEs have beeneliminated upon consolidation. The results of subsidiaries and consolidated VIEs acquired or disposed of are recorded in the consolidated statements of operationsfrom the effective date of acquisition or up to the effective date of disposal, as appropriate.A subsidiary is an entity in which (i) the Company directly or indirectly controls more than 50% of the voting power; or (ii) the Company has the power to appoint orremove the majority of the members of the board of directors or to cast a majority of votes at the meeting of the board of directors or to govern the financial andoperating policies of the investee pursuant to a statute or under an agreement among the shareholders or equity holders. A VIE is required to be consolidated by theprimary beneficiary of the entity if the equity holders in the entity do not have the characteristics of a controlling financial interest or do not have sufficient equity atrisk for the entity to finance its activities without additional subordinated financial support from other parties.F8To comply with the PRC legal restrictions on foreign ownership of companies that operate mobile application services, the Group operates in such restricted servicesin the PRC through certain PRC domestic companies, whose equity interests are held by certain management members or founders of the Group. Part of theregistered capital of these PRC domestic companies was funded by certain management members or founders of the Group. The Group has entered into certainexclusive business services agreements with these PRC domestic companies, which entitle it to receive a majority of their residual returns and make it obligatory forthe Group to absorb a majority of the risk of losses from their activities. In addition, the Group has entered into certain agreements with those management membersor founders, including equity interest pledge agreements of the equity interests held by those management members or founders and exclusive option agreements toacquire the equity interests in these companies when permitted by the PRC laws, rules and regulations.Details of the typical VIE structure of the Group’s significant consolidated VIEs, primarily domestic companies associated with the operations such as Zhong ChuanShi Xun, Zhong Chuan Rui You, Huoerguosi Luokuang and Jiu Zhou Shi Dai, are set forth below:(i)Contracts that give the Group effective control of VIEsExclusive option agreementsThe VIE equity holders have granted the WFOEs exclusive call options to purchase their equity interest in the VIEs at an exercise price equal to the higherof (i) the registered capital in the VIEs; and (ii) the minimum price as permitted by applicable PRC laws. Each relevant VIE has further granted the relevantWFOE an exclusive call option to purchase its assets at an exercise price equal to the book value of the assets or the minimum price as permitted byapplicable PRC laws, whichever is higher. The WFOEs may nominate another entity or individual to purchase the equity interest or assets, if applicable,under the call options. Each call option is exercisable subject to the condition that applicable PRC laws, rules and regulations do not prohibit completion ofthe transfer of the equity interest or assets pursuant to the call option. Each WFOE is entitled to all dividends and other distributions declared by the VIE,and the VIE equity holders have agreed to give up their rights to receive any distributions or proceeds from the disposal of their equity interests in the VIEwhich are in excess of the original registered capital that they contributed to the VIE, and to pay any such distributions or premium to the WFOE. Theexclusive call option agreements remain in effect until the equity interest or assets that are the subject of such agreements are transferred to the WFOEs.Equity pledge agreementsPursuant to the relevant equity pledge agreements, the relevant VIE equity holders have pledged all of their interests in the equity of the VIEs as acontinuing first priority security interest in favor of the corresponding WFOEs to secure the performance of obligations by the VIEs and/or the equityholders under the other structure contracts. Each WFOE is entitled to exercise its right to dispose of the VIE equity holders’ pledged interests in the equityof the VIE and has priority in receiving payment by the application of proceeds from the auction or sale of such pledged interests, in the event of anybreach or default under the loan agreement or other structure contracts, if applicable. These equity pledge agreements remain in force for the duration ofthe relevant loan agreement and other structure contracts.F9(ii)Contracts that enable the Group to receive substantially all of the economic benefits from the VIEsExclusive business services agreementsEach relevant VIE has entered into an exclusive business services agreement with the respective WFOE, pursuant to which the relevant WFOE providesexclusive business services to the VIE. In exchange, the VIE pays a service fee to the WFOE which typically amounts to what would be substantially all ofthe VIE’s pretax profit, resulting in a transfer of substantially all of the profits from the VIE to the WFOE.Other arrangementsThe exclusive call option agreements described above also enable the Group to receive substantially all of the economic benefits from the VIEs by typicallyentitling the WFOEs to all dividends and other distributions declared by the VIEs and to any distributions or proceeds from the disposal by the VIE equityholders of their equity interests in the VIEs that are in excess of the original registered capital that they contributed to the VIEs.Based on these contractual agreements, the Group believes that the PRC domestic companies as described above should be considered as VIEs because the equityholders do not have significant equity at risk nor do they have the characteristics of a controlling financial interest. Given that the Group is the primary beneficiaryof these PRC domestic companies, the Group believes that these VIEs should be consolidated based on the structure as described above.Under the contractual arrangements with the consolidated VIEs, the Group has the power to direct activities of the consolidated VIEs and can have assetstransferred out of the consolidated VIEs under its control. Therefore, the Group considers that there is no asset in any of the consolidated VIEs that can be usedonly to settle obligations of the consolidated VIEs, except for registered capital and PRC statutory reserves. As all consolidated VIEs are incorporated as limitedliability companies under the Company Law of the PRC, creditors of the consolidated VIEs do not have recourse to the general credit of the Group for any of theliabilities of the consolidated VIEs.Currently there is no contractual arrangement which requires the Group to provide additional financial support to the consolidated VIEs. However, as the Groupconducts its businesses primarily based on the licenses and approvals held by its consolidated VIEs, the Group has provided and will continue to provide financialsupport to the consolidated VIEs considering the business requirements of the consolidated VIEs, as well as the Group’s own business objectives in the future.F10Use of estimatesThe preparation of financial statements in conformity with US GAAP requires the Group to make estimates and assumptions that affect the reported amounts ofassets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expensesduring the reporting period. The most significant estimates are the allowance for doubtful accounts, the useful lives of property and equipment and intangibleassets, impairment of longlived assets and goodwill. Actual results could differ from those estimates.Fair value measurementsFair value is the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at themeasurement date under current market conditions. When determining the fair value measurements for assets and liabilities required or permitted to be recorded atfair value, the Group considers the principal or most advantageous market in which it would transact and it considers assumptions that market participants woulduse when pricing the asset or liability.Authoritative literature provides a fair value hierarchy which prioritizes the inputs to valuation techniques used to measure fair value into three broad levels. Thelevel in the hierarchy within which the fair value measurement in its entirety falls is based upon the lowest level of input that is significant to the fair valuemeasurement as follows:Level 1Level 1 applies to assets or liabilities for which there are quoted prices in active markets for identical assets or liabilities.Level 2Level 2 applies to assets or liabilities for which there are inputs other than quoted prices included within Level 1 that are observable for the asset or liability such asquoted prices for similar assets or liabilities in active markets; quoted prices for identical assets or liabilities in markets with insufficient volume or infrequenttransactions (less active markets); or modelderived valuations in which significant inputs are observable or can be derived principally from, or corroborated by,observable market data.Level 3Level 3 applies to assets or liabilities for which there are unobservable inputs to the valuation methodology that are significant to the measurement of the fair valueof the assets or liabilities.F11Cash and cash equivalentsCash and cash equivalents primarily consist of cash, money market funds, investments in interest bearing demand deposit accounts, time deposits and highly liquidinvestments with original maturities of three months or less from the date of purchase and are stated at cost which approximates their fair value. The Group has nocash equivalents.Accounts receivable, net of allowanceAccounts receivable are recognized and carried at the original invoiced amount less an allowance for any potential uncollectible amounts. An estimate for doubtfuldebts is made when collection of the full amount is no longer probable. Bad debts are written off as incurred. The Group generally does not require collateral from itscustomers.The Group maintains allowances for doubtful accounts for estimated losses resulting from the failure of customers to make payments on time. The Group reviews theaccounts receivable on a periodic basis and makes specific allowances when there is doubt as to the collectability of individual balances. In evaluating thecollectability of individual receivable balances, the Group considers many factors, including the age of the balance, the customer’s payment history, its currentcreditworthiness and current economic trends.Property and equipment, netProperty and equipment are carried at cost less accumulated depreciation. Depreciation is calculated on a straightline basis over the following estimated usefullives:Wifi equipment– 3 yearsOffice equipment– 3 to 5 yearsVehicles– 5 yearsCosts of repairs and maintenance are expensed as incurred and asset improvements are capitalized. The gain or loss on disposal of property and equipment is thedifference between the net sales proceeds and the carrying amount of the relevant assets and is recognized in the consolidated income statement. When propertyand equipment are retired or otherwise disposed of, the cost and accumulated depreciation are removed from the accounts and any resulting gain or loss is includedin the results of operations for the respective period.Construction in progressAssets under construction are not depreciated until construction is completed and the assets are ready for their intended use.F12Intangible assetsIntangible assets with finite lives are amortized using the straightline method over the estimated economic lives.Intangible assets have weighted average economic lives from the date of purchase as follows:Software– 5 yearsTrademarks– 10 yearsGoodwillThe Group assesses goodwill for impairment in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”)subtopic 35020, Intangibles—Goodwill and Other: Goodwill (“ASC 35020”), which requires that goodwill to be tested for impairment at the reporting unit level atleast annually and more frequently upon the occurrence of certain events, as defined by ASC 35020.We have the option to assess qualitative factors first to determine whether it is necessary to perform the twostep test in accordance with ASC 35020. If we believe,as a result of the qualitative assessment, that it is morelikelythannot that the fair value of the reporting unit is less than its carrying amount, the twostepquantitative impairment test described below is required. Otherwise, no further testing is required. In the qualitative assessment, we consider primary factors such asindustry and market considerations, overall financial performance of the reporting unit, and other specific information related to the operations. In performing thetwostep quantitative impairment test, the first step compares the carrying amount of the reporting unit to the fair value of the reporting unit based on either quotedmarket prices of the ordinary shares or estimated fair value using a combination of the income approach and the market approach. If the fair value of the reportingunit exceeds the carrying value of the reporting unit, goodwill is not impaired and we are not required to perform further testing. If the carrying value of the reportingunit exceeds the fair value of the reporting unit, then we must perform the second step of the impairment test in order to determine the implied fair value of thereporting unit’s goodwill. The fair value of the reporting unit is allocated to its assets and liabilities in a manner similar to a purchase price allocation in order todetermine the implied fair value of the reporting unit goodwill. If the carrying amount of the goodwill is greater than its implied fair value, the excess is recognized asan impairment loss.In 2017, we performed a qualitative assessment for goodwill. Based on the requirements of ASC35020, we evaluated all relevant factors, including but not limited tomacroeconomic conditions, industry and market conditions, financial performance. We weighed all factors in their entirety and concluded that it was not morelikelythannot the fair value was less than the carrying amount of the reporting unit, and further impairment testing on goodwill was unnecessary as of December 31, 2017and 2016.F13Impairment or disposal of longlived assetsLonglived assets other than goodwill are included in impairment evaluations when events and circumstances exist that indicate the carrying value of these assetsmay not be recoverable. In accordance with FASB ASC 360, Property, Plant and Equipment, the Group assesses the recoverability of the carrying value of longlivedassets by first grouping its longlived assets with other assets and liabilities at the lowest level for which identifiable cash flows are largely independent of the cashflows of other assets and liabilities (the asset group) and, secondly, estimating the undiscounted future cash flows that are directly associated with and expected toarise from the use of and eventual disposition of such asset group. If the carrying value of the asset group exceeds the estimated undiscounted cash flows, theGroup recognizes an impairment loss to the extent the carrying value of the longlived asset exceeds its fair value. The Group determines fair value through quotedmarket prices in active markets or, if quotations of market prices are unavailable, through the performance of internal analysis using a discounted cash flowmethodology or obtains external appraisals from independent valuation firms. The undiscounted and discounted cash flow analyses are based on a number ofestimates and assumptions, including the expected period over which the asset will be utilized, projected future operating results of the asset group, discount rateand longterm growth rate.As of December 31, 2017 and 2016, the Group assessed the impairment of its longlived assets and concluded that there was no impairment indication.Business combinationWe account for business combinations using the purchase method of accounting in accordance with FASB ASC topic 805, Business combinations. The purchasemethod accounting requires that the consideration transferred be allocated to the assets, including separately identifiable assets and liabilities we acquired, basedon their estimated fair values. The consideration transferred in an acquisition is measured as the aggregate of the fair values at the date of exchange of the assetsgiven, liabilities incurred, and equity instruments issued as well as the contingent considerations and all contractual contingencies as of the acquisition date. Thecosts directly attributable to the acquisition are expensed as incurred. Identifiable assets, liabilities and contingent liabilities acquired or assumed are measuredseparately at their fair value as of the acquisition date, irrespective of the extent of any noncontrolling interests. The excess of (i) the total of cost of acquisition, fairvalue of the noncontrolling interests and acquisition date fair value of any previously held equity interest in the acquiree over (ii) the fair value of the identifiable netassets of the acquiree, is recorded as goodwill. If the cost of acquisition is less than the fair value of the net assets of the subsidiary acquired, the difference isrecognized directly in earnings.Revenue recognitionThe Group recognizes revenue in accordance with FASB ASC topic 605, Revenue Recognition (“ASC 605”). Revenue is recognized when the following four revenuerecognition criteria are met: (i) persuasive evidence of an arrangement exists, (ii) delivery has occurred or services have been provided, (iii) the selling price is fixed ordeterminable, and (iv) collectability is reasonably assured.F14Displaybased online advertising servicesThe Group provides displaybased online advertising services to customers by integrating text description, image and video, and displaying the advertisements in aprominent position of LuoKuang Application. The Group recognizes revenue in accordance with ASC 605, over the contractual term based on the agreements andconfirmation letters signed by both parties, commencing on the date the customer’s advertisement is displayed on the Group’s platform.Foreign currency translationThe functional and reporting currency of the Company and the Company’s subsidiaries domiciled in BVI and Hong Kong are the United States dollar (“U.S. dollar”).The financial records of the Company’s other subsidiaries and VIEs located in the PRC are maintained in their local currency, the Chinese Renminbi (“RMB”), whichare the functional currency of these entities.Monetary assets and liabilities denominated in currencies other than the functional currency are translated into the functional currency at the rates of exchangeruling at the balance sheet date. Transactions in currencies other than the functional currency during the year are converted into the functional currency at theapplicable rates of exchange prevailing when the transactions occurred. Transaction gains and losses are recognized in the statements of operations.The Company’s entities with a functional currency of RMB translate their operating results and financial position into the U.S. dollar, the Company’s reportingcurrency. Assets and liabilities are translated using the exchange rates in effect on the balance sheet date. Revenues, expenses, gains and losses are translatedusing the average rate for the year. Retained earnings and equity are translated using the historical rate. Translation adjustments are reported as cumulativetranslation adjustments and are shown as a separate component of other comprehensive income.Income taxesDeferred income taxes are recognized for temporary differences between the tax basis of assets and liabilities and their reported amounts in the financial statements,net operating loss carry forwards and credits, by applying enacted statutory tax rates applicable to future years. Deferred tax assets are reduced by a valuationallowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Current income taxesare provided for in accordance with the laws and regulations applicable to the Group as enacted by the relevant tax authorities.The impact of an uncertain income tax position on the income tax return must be recognized at the largest amount that is morelikelythan not to be sustained uponaudit by the relevant tax authorities. An uncertain income tax position will not be recognized if it has less than a 50% likelihood of being sustained. Additionally, theGroup classifies the interest and penalties, if any, as a component of the income tax expense. For years ended December 31, 2017 and 2016, the Group did not haveany material interest or penalties associated with tax positions nor did the Group have any significant unrecognized uncertain tax positions.F15Related partiesParties are considered to be related to the Company if the parties, directly or indirectly, through one or more intermediaries, control, are controlled by, or are undercommon control with the Company. Related parties also include principal owners of the Company, its management, members of the immediate families of principalowners of the Company and its management and other parties with which the Company may deal with if one party controls or can significantly influence themanagement or operating policies of the other to an extent that one of the transacting parties might be prevented from fully pursuing its own separate interests. TheCompany discloses all significant related party transactions.LeasesLeases have been classified as either capital or operating leases. Leases that transfer substantially all the benefits and risks incidental to the ownership of assets areaccounted for as if there was an acquisition of an asset and incurrence of an obligation at the inception of the lease. All other leases are accounted for as operatingleases wherein rental payments are expensed as incurred.When the Group is the lessor, minimum contractual rental from leases are recognized on a straightline basis over the noncancelable term of the lease. With respectto a particular lease, actual amounts billed in accordance with the lease during any given period may be higher or lower than the amount of rental revenue recognizedfor the period. Straightline rental revenue commences when the customer assumes control of the leased premises. Accrued straightline rents receivable representsthe amount by which straightline rental revenue exceeds rents currently billed in accordance with lease agreements. Contingent rental revenue is accrued when thecontingency is removed.Advertising costsAdvertising costs include expenses associated with direct marketing. All advertising costs are expensed as incurred and included in selling and marketing expenses.During the years ended December 31, 2017 and 2016, advertising costs amounted to $23,171,170 and $4,537,653, respectively.Comprehensive lossComprehensive loss includes net loss and foreign currency translation adjustments and is presented net of tax. The tax effect is nil for the two years endedDecember 31, 2017 and 2016 in the consolidated statements of comprehensive loss.Concentration of credit riskFinancial instruments that potentially expose the Group to concentrations of credit risk consist primarily of cash and accounts receivable. The Group places its cashwith financial institutions with highcredit rating and quality in China. For the year ended December 31, 2017, two customers accounted for over 10% of totalrevenue. For the year ended December 31, 2016, four customers accounted for over 10% of total revenue. At December 31, 2017 and 2016, the Group had credit riskexposure of uninured cash in banks of approximately $72,379 and $83,843, respectively.F16NOTE 3 – INCOME TAXAt December 31, 2017 and 2016, the Group had an unused net operating loss carryforwards of approximately $25,123,726 and $20,081,239, respectively, for income taxpurposes, which expires between 2018 to 2022 and between 2017 to 2021, respectively. At December 31, 2017 and 2016, these net operating losses carryforwards mayresult in future income tax benefits of approximately $5,043,944 and $4,008,863, respectively, however, because realization is uncertain at this time, a valuationallowance in the same amount has been established. Deferred income taxes reflect the net effects of temporary differences between the carrying amounts of assetsand liabilities for financial reporting purposes and the amounts used for income tax purposes.Significant components of the Group’s deferred tax liabilities and assets of December 31, 2017 and 2016 are as follows:December 31,December 31,20172016Deferred tax liabilities$$Deferred tax assetNet operating loss carryforward5,043,9444,008,863Valuation allowance(5,043,944)(4,008,863)Net deferred tax assetMovement of valuation allowanceDecember 31,2017December 31,2016At the beginning of the year$4,008,863$2,049,352Current year addition823,9702,159,518Expired(61,411)Exchange difference272,522(200,007)At the end of the year5,043,9444,008,863The Company is not subject to taxation in BVI under the current BVI law. Subsidiaries operating in the PRC are subject to PRC Enterprise Income Tax at the statutoryrate of 25% for the years ended December 31, 2017 and 2016. Subsidiaries operating in Hong Kong are subject to Hong Kong income taxes at a rate of 16.5% for theyears ended December 31, 2017 and 2016.F17A reconciliation of the income tax expense to the amount computed by applying the current statutory tax rate to the loss before income taxes in the consolidatedstatements of comprehensive income is as follows:December 31,December 31,20172016Loss before income taxes$(6,810,454)$(13,049,031)Tax loss at statutory tax rate(1,655,174)(3,386,822)Nondeductible items6,729,2551,712,857Nontaxable items(3,789,956)(674,189)Change in valuation allowance823,9702,159,518Tax benefits(2,108,095)188,636Income tax expensesNOTE 4 – ACCOUNTS RECEIVABLEAt December 31, 2017 and 2016, accounts receivable consisted of the following:December 31,December 31,20172016Accounts receivable$10,406,602$2,098,946Less: allowance for doubtful accounts676,977233,110$9,729,625$1,865,836NOTE 5 – OTHER RECEIVABLESAt December 31, 2017 and 2016, other receivables consisted of the following:December 31,2017December 31,2016Advances to suppliers$339,701$181,472VAT recoverable (1)3,033,0651,662,805Other5,048,189485,152$2,376,745$2,287,934(1)The balance of advanced VAT represents input VAT available for deducting the amount of VAT paid in the future. During the years ended December 31, 2017and 2016, the Group purchased a large amount of WiFi equipment for deployments, which generated related input VAT approved by tax authority.F18NOTE 6 – AMOUNTS DUE FROM RELATEDPARTIESAt December 31, 2017 and 2016, amounts due from related parties consisted of the following:Name of related partyDecember 31,2017December 31,2016C Media Limited (1)$11,760,692$Ya Tuo Ji International Consultancy (Beijing) Limited (2)204,412183,811(1)C Media Limited is the parent company of LK Technology. The Group expects the amounts due from the related party will be returned to the Group within oneyear.(2)Ya Tuo Ji is a company controlled by the spouse of a major shareholder of C Media Limited. The loan is unsecured, interestfree and repayable on January 5,2019.NOTE 7 – PROPERTY AND EQUIPMENTAt December 31, 2017 and 2016, property and equipment consisted of the following:December 31,December 31,Useful life20172016WiFi equipment3 Years$8,711,424$8,367,678Vehicles5 Years43,246Office and other equipment3 – 5 Years170,242416,434Constructioninprogress2,166,4522,652,28811,048,11811,479,646Less: accumulated depreciation(6,003,246)(3,708,619)$5,044,872$7,771,027For the years ended December 31, 2017 and 2016, depreciation expense amounted to $2,628,884 and $2,474,434, respectively, of which $2,423,655 and $2,194,582,respectively, was included in cost of revenue, $117,648 and $121,740, respectively, was included in selling and marketing expenses and the remainder was included ingeneral and administrative expense.Included in constructioninprogress are WiFI equipment under construction.F19NOTE 8 – GOODWILLIn September of 2014, Zhong Chuan Shi Xun acquired a 100% interest in Zhong Chuan Rui You for a consideration of $7,391,894 (RMB48,000,000). Zhong Chuan RuiYou is primarily engaged in on train WiFi business, deploying WiFi equipment on trains and providing passengers with entertainment and information services ontrains. The book value of the identifiable net assets of Zhong Chuan Rui You was $151,958 (RMB963,000) and a goodwill of $7,239,936 was recorded.NOTE 9 – ACCRUED LIABILITIES AND OTHER PAYABLESAt December 31, 2017 and 2016, accrued liabilities and other payables consisted of the following:December 31,December 31,20172016Deferred revenue$2,326,406$302,735Accrued payroll143,998316,458Other taxes payable3,544,469461,699Other payable852,384686,526Other loans6,095,6559,562,915$12,962,912$11,329,613Deferred revenue represents prepayments from customers for advertising service and is recognized as revenue when the advertising services are rendered.Other loans of $939,555 and $57,416, respectively, as of December 31, 2017 and 2016, are unsecured, bear daily interest at 0.04% and are repayable on demand.NOTE 10 – AMOUNTS DUE TO RELATED PARTIESAt December 31, 2017 and 2016, amounts due to related parties consisted of the following:December 31,December 31,Name of related party20172016Mr. Song Xuesong (“Mr. Song”) (1)$2,921,639$10,669,325C Media Limited (2)$$4,855,236Thumb Beijing Branch (3)$612,103$576,560Thumb Shenzhen Branch (3)$29,941$28,202(1) The Group’s CEO(2) C Media Limited, the parent company.(3) Thumb Beijing and Shenzhen Branch are controlled by the spouse of Mr. Song.Amounts due to related parties are shortterm in nature, noninterest bearing, unsecured and payable on demand.F20NOTE 11 – RETIREMENT AND WELFARE BENEFITSThe Group’s fulltime employees are entitled to staff welfare benefits including medical care, casualty, housing benefits, education benefits, unemployment insuranceand pension benefits through a PRC governmentmandated multiemployer defined contribution plan. The Group is required to accrue the employerportion forthese benefits based on certain percentages of the employees’ salaries. The total provision for such employee benefits of $170,227 and $353,033 during the yearsended December 31, 2017 and 2016, respectively, of which $23,392 and $30,455, respectively, was charged to cost of revenue, $48,957 and $97,408, respectively wascharged to selling and marketing expenses, $49,717 and $86,934, respectively, was charged to general and administrative expenses and $48,161 and $138,236,respectively was charged to research and development expenses. The Group is required to make contributions to the plan out of the amounts accrued for all staffwelfare benefits except for education benefits. The PRC government is responsible for the staff welfare benefits including medical care, casualty, housing benefits,unemployment insurance and pension benefits to be paid to these employees.NOTE 12 – STATUTORY RESERVESAs stipulated by the relevant law and regulations in the PRC, the Group’s subsidiaries and VIEs in the PRC are required to maintain a nondistributable statutorysurplus reserve. Appropriations to the statutory surplus reserve are required to be made at not less than 10% of profit after taxes as reported in the subsidiaries’statutory financial statements prepared under the PRC GAAP. Once appropriated, these amounts are not available for future distribution to owners or shareholders.Once the general reserve is accumulated to 50% of the subsidiaries’ registered capital, the subsidiaries can choose not to provide more reserves. The statutoryreserve may be applied against prior year losses, if any, and may be used for general business expansion and production and increase in registered capital of thesubsidiaries. The Group allocated $Nil to statutory reserves during the years ended December 31, 2017 and 2016, respectively. The statutory reserves cannot betransferred to the Company in the form of loans or advances and are not distributable as cash dividends except in the event of liquidation.NOTE 13 – COMMITMENTS AND CONTINGENCIESOperating leasesWe have entered into operating lease agreements primarily for our office spaces in China. These leases expire through 2018 and are renewable upon negotiation.Future minimum rental payment required under the Office Lease is as follows:Year ending December 31:Amount2018$122,138F21Contingencies(a) Litigation with Shanghai Fusheng Weier Intelligent Control Technology Co., Ltd.On January 22, 2016, Zhong Chuan Rui You and Shanghai Fusheng Weier Intelligent Control Technology Co., Ltd. (“Fusheng Weier”) signed a contract forequipment of $1,652,842 (RMB10,800,000). Since Zhong Chuan Rui You did not make the payments of $1,126,381 (RMB7,360,000) on the due dates, Fusheng Weierfiled a lawsuit against Zhong Chuan Rui You in Shanghai Xuhui District People’s Court on October 8, 2016. On March 9, 2017, Xuhui District People’s Court issuedthe verdict requiring Zhong Chuan Rui You to pay the overdue debts. In August 2017, C Media Limited made the payment of $512,075 (RMB3,346,000). Theremaining balance has been accrued in accounts payable. The payment schedule for the remaining balance is being negotiated by the two parties. On February 5,2018, a hearing was held adding Zhong Chuan Shi Xun as a defendant. The Group plans to settle the remaining balance within one year.(b) Lawsuit with Gansu Jinlun Culture Media Co., Ltd.On August 22, 2014, Zhong Chuan Rui You and Gansu Jinlun Culture Media Co., Ltd. (“Gansu Jinlun”) signed a “Lanzhou Railway Bureau Airconditioned Train WiFi Network System Advertising Operation Rights Agreement” for advertising on 72 trains of $1,467,880 (RMB9,604,633). Due to the dispute on the projectimplementation, Zhong Chuan Rui You did not pay the advertising fee. On August 23, 2017, Gansu Jinlun filed a lawsuit with Gansu Intermediate People’s Court. OnDecember 19, 2017, Gansu Intermediate People’s Court issued a verdict, ruling that Zhong Chuan Rui You settle the overdue advertising fee. Since only 18 out of 72trains have been installed with Wifi network system, Zhong Chuan Rui You disputed and appealed to the verdict. The next court trial date has not yet beendetermined.C Media and Gansu Jinlun are negotiating a potential settlement to resume the contract. According to the legal counsel, it is probable that the settlement will amountto approximately $459,000 (RMB3,000,000); therefore, this amount has been accrued in accounts payable.(c) Litigation with Shenzhen Hua Xun Fang Zhou Technology Co., Ltd.On June 16, 2015, Zhong Chuan Rui You signed a cooperation agreement with Shenzhen Hua Xun Fang Zhou Technology Co., Ltd. (“Shenzhen Hua Xun”) andXuesong Song, a major shareholder of C Media Limited. Pursuant to this agreement, Zhong Chuan Rui You procures equipment from Shenzhen Hua Xun. XuesongSong acts as a joint liability guarantor for the entire debts of Zhong Chuan Rui You under this agreement. As Zhong Chuan Rui You did not make the payments onthe due dates, Shenzhen Hua Xun filed a lawsuit with Shenzhen Baoan District People’s Court on May 31, 2016. On November 1, 2016, Zhong Chuan Rui You,Xuesong Song and Shenzhen Hua Xun reached a settlement in Shenzhen Baoan District People’s Court to settle $1,735,389 (RMB11,355,000) in four instalments. OnDecember 30, 2017, the debt was assigned to C Media Limited.NOTE 14 – SUBSEQUENT EVENTThe Group has evaluated all events or transactions that occurred after December 31, 2017 through May 25, 2018, which is the date that the financial statements wereavailable to be issued.F22EX1.1 2 f20f2017ex11_luokung.htm AMENDED AND RESTATED MEMORANDUM OF ASSOCIATION AND ARTICLES OF ASSOCIATION OF LUOKUNGTECHNOLOGY CORP., DATED AUGUST 20, 2018, AND AS CURRENTLY IN EFFECTExhibit 1.1BC NO: 1553620British Virgin IslandsThe BVI Business Companies Act, 2004(No. 16 of 2004)Memorandum of AssociationandArticles of AssociationofLuokung Technology Corp.Incorporated the 24th day of October, 2009Amended and Restated the 11th Day of December 2009Amended and Restated the 17th Day of December 2009Amended and Restated the 25th Day of March 2010Amended and Restated the 21st day of May 2018Amended and restated the 17 August 2018Amended and restated the 21 August 2018Portcullis (BVI) LimitedPortcullis Chambers4th Floor Ellen Skelton Building3076 Sir Francis Drake HighwayRoad Town, TortolaBritish Virgin IslandsTERRITORY OF THE BRITISH VIRGIN ISLANDSTHE BVI BUSINESS COMPANIES ACT, 2004(No. 16 of 2004)MEMORANDUM OF ASSOCIATIONOFLuokung Technology Corp.NAME1.The name of the Company is Luokung Technology Corp.TYPE OF COMPANY2.The Company is a company limited by shares.REGISTERED OFFICE3.The first Registered Office of the Company is the offices of Portcullis TrustNet (BVI) Limited, Portcullis TrustNet Chambers, P.O. Box 3444, Road Town,Tortola, British Virgin Islands, the office of the registered agent.3.1The current Registered Office of the Company is Portcullis Chambers, 4th Floor Ellen Skelton Building, 3076 SirFrancis Drake Highway, Road Town,Tortola, British Virgin Islands VG1110.REGISTERED AGENT4.The first Registered Agent of the Company is Portcullis TrustNet (BVI) Limited of Portcullis TrustNet Chambers, P.O. Box 3444, Road Town, Tortola,British Virgin Islands.4.1The current Registered Agent of the Company is Portcullis (BVI) Ltd of Portcullis Chambers, 4th Floor Ellen Skelton Building, 3076 Sir Francis DrakeHighway, Road Town, Tortola, British Virgin Islands VG1110.AUTHORISED NUMBER OF SHARES5.The Company is authorised to issue a maximum of 251,000,000 shares.CLASSES, NUMBER AND PAR VALUE OF SHARES6.As at the date of adoption of this memorandum, the Company is authorised to issue (a) 250,000,000 ordinary shares without par value (“OrdinaryShares”); and (b) 1,000,000 preferred shares without par value (“Preferred Shares”).FRACTIONAL SHARES7.The Company may issue fractions of a share and a fractional share shall have the same corresponding fractional liabilities, limitations, preferences,privileges, qualifications, restrictions, rights and other attributes of a whole share of the same class or series of shares.RIGHTS, PRIVILEGES, RESTRICTIONS AND CONDITIONS ATTACHING TO SHARES8.(1)Subject to the memorandum and articles of association (and, for greater clarity, without prejudice to any special rights conferred thereby on theholders of any other shares), an Ordinary Share of the Company confers on the holder;(a)the right to one vote at a meeting of the members of the Company or on any Resolution of Members;(b)the right to an equal share in any Distribution paid by the Company; and(c)the right to an equal share in the distribution of the surplus assets of the Company on a winding up.(2)Subject to the memorandum and articles of association (and, for greater clarity, without prejudice to any special rights conferred thereby on theholders of any other shares), a Preferred Share of the Company confers on the holder;(a)the right to 399 votes at a meeting of the members of the Company or on any Resolution of Members;(b)the right to an equal share in any Distribution paid by the Company;(c)the right to an equal share in the distribution of the surplus assets of the Company on its liquidation.(d)be freely transferable, in whole or in part, by Mr. Xuesong Song to any third party through one or more Private Transactions, subject toApplicable Law; and(e)be freely transferable, in whole or in part, by Mr. Xuesong Song to any third party through one or more Public Transactions, subject to ApplicableLaw and Automatic Conversion of such Preferred Share(s) into Ordinary Share(s).(3)The directors may at their discretion by resolution of directors redeem, purchase or otherwise acquire all or any of the shares in the Companysubject to the Articles..VARIATION OF CLASS RIGHTS9.If at any time the issued shares are divided into different classes or series of shares, the rights attached to any class or series (unless otherwise providedby the terms of issue of the shares of that class or series) may, whether or not the Company is being wound up, be varied with the consent in writing of theholders of not less than threefourths of the issued shares of that class or series and of the holders of not less than threefourths of the issued shares ofany other class or series of shares which may be affected by such variation.RIGHTS NOT VARIED BY THE ISSUE OF SHARES PARI PASSU10.The rights conferred upon the holders of the shares of any class issued with preferred or other rights shall not, unless otherwise expressly provided by theterms of issue of the shares of that class, be deemed to be varied by the creation or issue of further shares ranking pari passu therewith.CAPACITY AND POWERS11.Subject to the Act, any other British Virgin Islands legislation and paragraph 12 below the Company has, irrespective of corporate benefit:(a)full capacity to carry on or undertake any business or activity, do any act or enter into any transaction;(b)for the purposes of paragraph (a), full rights, powers and privileges; and(c)full powers to issue shares with preemptive rights, subject to the Articles.2LIMITATIONS ON THE COMPANY’S BUSINESS12.For the purposes of section 9(4) of the Act the Company may not;(a)carry on banking or trust business, unless it is licensed to do so under the Banks and Trust Companies Act, 1990;(b)carry on business as an insurance or reinsurance company, insurance agent or insurance broker, unless it is licensed under the Insurance Act1994;(c)carry on business of company management, unless it is licensed under the Company Management Act, 1990;(d)carry on the business of providing the registered office or the registered agent for companies incorporated in the British Virgin Islands;(e)carry on the business as a mutual fund, manager of mutual funds or administrator of mutual funds unless it is recognized or licenced as the casemay be under the Mutual Funds Act 1996; or(f)carry on any other business that gives rise to a licencing requirement under any law for the time being in force in the British Virgin Islands unlessit is licenced, regulated, recognised or otherwise approved pursuant to such law.REGISTERED SHARES AND PROHIBITION ON ISSUE OF BEARER SHARES13.Shares in the Company may only be issued as registered shares. The issue of shares to bearer is prohibited.PROHIBITION ON EXCHANGE AND CONVERSION OF REGISTERED SHARES TO BEARER SHARES14.The exchange or conversion of registered shares to bearer shares is prohibited.TRANSFER OF REGISTERED SHARES15.Subject to the provisions of the Articles the Company may upon receipt of an instrument of transfer enter the name of the transferee in the register ofmembers subject to the prior or simultaneous approval of the Company as evidenced by a resolution of directors or by a resolution of members. Subject toany resolution of the members to the contrary, the directors may resolve by resolution of directors to refuse or delay the registration of the transfer forreasons that shall be specified in the resolution of directors.AMENDMENT OF MEMORANDUM AND ARTICLES OF ASSOCIATION16.1The Company may amend its Memorandum or Articles by a resolution of members or by a resolution of directors provided that the directors shall not havethe power to amend the Memorandum or Articles;(a)to restrict the rights or powers of the members to amend the Memorandum or Articles;(b)to change the percentage of members required to pass a resolution to amend the Memorandum or Articles;(c)in circumstances where the Memorandum or Articles cannot be amended by the members; or(d)to Clauses 8, 9, 10 or this Clause 12.16.2No amendment may be made to Regulation 76 of the Articles unless approved by an affirmative vote of the holders of 66 2/3 percent or more of theoutstanding votes of the shares entitled to vote thereon.3DEFINITIONS17.The meanings of words in this Memorandum are as defined in the Articles.We, Portcullis TrustNet (BVI) Limited of Portcullis TrustNet Chambers, P.O. Box 3444, Road Town, Tortola, British Virgin Islands for the purpose ofincorporating a BVI Business Company under the laws of the British Virgin Islands hereby sign this Memorandum of Association the 27th day of October,2009.Incorporator/s/ Nicole WheatleyPortcullis TrustNet (BVI) LimitedPortcullis TrustNet ChambersP.O. Box 3444Road Town, TortolaBritish Virgin Islands(Sgd. Nicole Wheatley)4TERRITORY OF THE BRITISH VIRGIN ISLANDSTHE BVI BUSINESS COMPANIES ACT, 2004(No. 16 of 2004)ARTICLES OF ASSOCIATIONOFLuokung Technology Corp.PRELIMINARY1.In these Articles, if not inconsistent with the subject or context, the words and expressions standing in the first column of the following table shall bear themeanings set opposite them respectively in the second column thereof.WordsMeaningApplicable Lawall Laws, including those of a jurisdiction in or outside of the United States, applicable to the Private orPublic Transactions.Actthe BVI Business Companies Act, 2004 (No 16 of 2004.) including any modification, extension, reenactment or renewal thereof and any regulations made thereunder.Articlesthese Articles of Association as originally framed or as from time to time amended.Automatic Conversioneach Preferred Share shall be automatically converted at any time after issue and without the payment ofany additional sum into an equal number of fully paid Ordinary Shares upon the conclusion of anytransfer by Mr. Xuesong Song to any third party through one or more Public Transactions.Designated Stock Exchangeeither the Nasdaq National Stock Market, Inc. or such other exchange or quotation bureau on which, theCompany’s Securities are listed or traded; provided that until the Securities are listed on any such“Exchange” the rules of any such Designated Stock Exchange shall be inapplicable to these Articles.directora director of the Company.distributionin relation to a distribution by a company to a member, means(i)the direct or indirect transfer of an asset, other than the Company’s own shares, to or forthe benefit of the member or(ii)the incurring of a debt to or for the benefit of a member,in relation to shares held by a member, and whether by means of a purchase of an asset, the purchase,redemption or other acquisition of shares, a transfer of indebtedness or otherwise, and includes adividend.Independent Directora person who meets the then current requirements for “independence” of the applicable rules andregulations of the U.S. Securities and Exchange Commission and the Designated Stock Exchange.5member or shareholderin relation to the Company, means a person whose name is entered in the register of members as theholder of one or more shares, or fractional shares, in the Company.Memorandumthe Memorandum of Association of the Company as originally framed or as from time to time amended.Mr. Xuesong Songthe founder, a director and Chairman of LK Technology Ltd.Ordinary Sharesissued or unissued ordinary shares of no par value of the Company having the rights, preferences andprivileges set out in the MemorandumPersonAn individual, a corporation, a trust, trustee, the estate of a deceased individual, a partnership or anunincorporated association of persons.Preferred Sharesissued or unissued preferred shares of no par value of the Company having the rights, preferences andprivileges set out in the MemorandumPrivate Transactionstransactions that are not considered as a Public Transaction.Public Transactionstransactions through any national securities exchanges and/or through the automated quotation systemincluding but not limited to NASDAQ, NYSE (including NYSE American) or OTC Markets, or anytransaction executed by the broker or with a market maker.Related Party(a) any director, officer and employee of the Company; (b) any family member of such director, officer andemployee; and (c) any entity (e.g. a corporation, partnership, or trust) controlled by or set up for thebenefit of a director, officer or employee, or a family member of such director, officer or employee.Relevant SystemA facility for the electronic transfer of uncertificated securities administered by The Depository TrustCompany or such other Person regulated by the SEC.resolution of directors(a)A resolution approved at a duly convened and constituted meeting of directors of the Companyor of a committee of directors of the Company by the affirmative vote of a simple majority of thedirectors present at the meeting who voted and did not abstain; or(b)a resolution consented to in writing by a simple majority of the directors or of all members of thecommittee, as the case may be;except that where a director is given more than one vote, he shall be counted by the number ofvotes he casts for the purpose of establishing a majority.resolution of membersSubject to the provisions of the Memorandum and Articles means:(a)A resolution approved at a duly convened and constituted meeting of the members of theCompany by the affirmative vote of(i)a majority of in excess of 50% of the votes of the shares entitled to vote and voting onthe resolution, or(ii)a majority of in excess of 50% of the votes of each class or series of shares entitled tovote as a class or series and voting on the resolution and a majority of in excess of 50%of the votes of the remaining shares entitled to vote and voting on the resolution; or6(b)a resolution consented to in writing by(i)an absolute majority of the votes of shares entitled to vote thereon, or(ii)an absolute majority of the votes of each class or series of shares entitled to votethereon as a class or series and of an absolute majority of the votes of the remainingshares entitled to vote thereon.SealAny Seal which has been duly adopted as the common seal of the Company.SECThe United States Securities and Exchange Commission.Securitiesshares and debt obligations of every kind, and options, warrants and rights to acquire shares, or debtobligations.SharesOrdinary Shares and/or Preferred Shares, as the case may be.solvency testa company satisfies the solvency test if;(i)the value of the company’s assets exceeds its liabilities, and(ii)the company is able to pay its debts as they fall due.treasury sharesshares in the Company that were previously issued but were repurchased, redeemed or otherwiseacquired by the Company and not cancelled.2.“Written” or any term of like import includes words typewritten, printed, painted, engraved, lithographed, photographed or represented or reproduced byany mode of reproducing words in a visible form, including telex, facsimile, telegram, cable or other form of writing produced by electronic communication.3.Save as aforesaid any words or expressions defined in the Act shall bear the same meaning in these Articles.4.Whenever the singular or plural number, or the masculine, feminine or neuter gender is used in these Articles, it shall equally, where the context admits,include the others.5.A reference in these Articles to voting in relation to shares shall be construed as a reference to voting by members holding the shares except that it is thevotes allocated to the shares that shall be counted and not the number of members who actually voted and a reference to shares being present at a meetingshall be given a corresponding construction.6.A reference to money in these Articles is, unless otherwise stated, a reference to the currency in which shares in the Company shall be issued according tothe provisions of the Memorandum.7REGISTERED SHARES7.Every member holding registered shares in the Company shall be entitled to a certificate signed by a director or officer of the Company or such otherperson who may be authorised from time to time by resolution of directors or under the Seal, with or without the signature of any director of the Company,specifying the share or shares held by him and the signature of the director or officer or person so authorised and the Seal may be facsimiles.8.Any member receiving a share certificate for registered shares shall indemnify and hold the Company and its directors and officers harmless from any lossor liability which it or they may incur by reason of any wrongful or fraudulent use or representation made by any person by virtue of the possessionthereof. If a share certificate for registered shares is worn out or lost it may be renewed on production of the worn out certificate or on satisfactory proof ofits loss together with such indemnity as may be required by a resolution of directors.9.If several persons are registered as joint holders of any shares, any one of such persons may give an effectual receipt for any distribution payable inrespect of such shares.10.Nothing in these Articles shall require title to any shares or other Securities to be evidenced by a certificate if the Act and the rules of the Designated StockExchange permit otherwise.SHARES AND ISSUED SHARES11.Subject to the provisions of these Articles and, if applicable, the rules of the Designated Stock Exchange, and any resolution of members, the directors ofthe Company may, without limiting or affecting any rights previously conferred on the holders of any existing shares or class or series of shares, offer, allot,grant options over or otherwise dispose of shares to such persons, at such times and upon such terms and conditions as the Company may by resolutionof directors determine. The directors shall not issue more shares than the maximum number provided for in the Memorandum.12.The Company may issue fully paid, partly paid or nil paid shares as well as bonus shares. A partly paid or nil paid share or a share issued for a promissorynote or other written obligation for payment of a debt may be issued subject to forfeiture in the manner prescribed in these Articles.13.Shares in the Company may be issued for consideration in any form, including money, a promissory note or other obligation to contribute money orproperty, real property, personal property (including goodwill and knowhow) services rendered or a contract for future services and the amount of suchconsideration shall be determined by resolution of directors, except that in the case of shares with par value, the amount shall not be less than the parvalue, and in the absence of fraud the decision of the directors as to the value of the consideration received by the Company in respect of the issue isconclusive unless a question of law is involved.14.Before issuing shares for a consideration other than money, the directors shall pass a resolution stating;(a)the amount to be credited for the issue of the shares;(b)their determination of the reasonable present cash value of the nonmoney consideration for the issue; and(c)that, in their opinion, the present cash value of the nonmoney consideration for the issue is not less than the amount to be credited for the issueof the shares.15.A share issued by the Company upon conversion of, or in exchange for, another share or a debt obligation or other security in the Company, shall betreated for all purposes as having been issued for money equal to the consideration received or deemed to have been received by the Company in respectof the other share, debt obligation or security.16.Treasury shares may be disposed of by the Company on such terms and conditions (not otherwise inconsistent with these Articles) as the Company mayby resolution of directors determine.17.Subject to these Articles, the Company may purchase, redeem or otherwise acquire and hold its own shares save that the Company may not purchase,redeem or otherwise acquire its own shares without the consent of the member whose shares are to be purchased, redeemed or otherwise acquired unlessthe Company is permitted by the Act or any other provision in the Memorandum or Articles to purchase, redeem or otherwise acquire the shares withouttheir consent.818.No purchase, redemption or other acquisition of shares shall be made unless the directors determine by resolution of the directors that immediately after thepurchase, redemption or other acquisition the value of the Company’s assets will exceed its liabilities and the Company will be able to pay its debts as theyfall due.19.Sections 60 (Process for acquisition of own shares), 61 (Offer to one or more shareholders) and 62 (Shares redeemed otherwise than at the option ofcompany) of the Act shall not apply to the Company.20.A determination by the directors under Article 18 is not required;(a)the Company redeems a share or shares pursuant to a right of a member to have his shares redeemed or to have his shares exchanged for moneyor other property of the Company; or(b)by virtue of the provisions of Section 179 of the Act.21.Shares that the Company purchases, redeems or otherwise acquires pursuant to Article 17 may be cancelled or held as treasury shares except to the extentthat such shares are in excess of 80 percent of the issued shares of the Company in which case they shall be cancelled but they shall be available forreissue.22.Shares in the Company shall only be held as treasury shares where the directors of the Company resolve as such and the number of shares acquired, whenaggregated with shares of the same class already held by the Company as treasury shares, does not exceed 50% of the shares of that class previouslyissued by the Company, excluding shares that have been cancelled. All rights and obligations attaching to a treasury share are suspended and shall not beexercised by or against the Company while it holds the share as a treasury share. Treasury shares may be reissued by the Company as new shares.23.The Company shall keep a register of members containing;(a)the names and addresses of the persons who hold registered shares in the Company;(b)the number of each class and series of registered shares held by each member;(c)the date on which the name of each member was entered in the register of members;(d)the date on which any person ceased to be a member; and(e)such other information as may be prescribed pursuant to the Act.24.The register of members may be in any such form as the directors may approve but if it is in magnetic, electronic or other data storage form, the companymust be able to produce legible evidence of its contents.25.The original or a copy of the register of members shall be kept at the registered office of the Company or at the office of the registered agent of theCompany.26.A share is deemed to be issued when the name of the member is entered in the register of members.27.Subject to the Act and the rules of the Designated Stock Exchange, the board of directors without further consultation with the holders of any shares orSecurities may resolve that any class or series of shares or other Securities from time to time in issue or to be issued (including shares in issue at the date ofthe adoption of these Articles) may be issued, held, registered and converted to uncertificated form.28.Conversion of shares held in certificated form into shares held in uncertificated form, and vice versa, may be made in such manner as the board of directors,in its absolute discretion, may think fit. The Company or any duly authorised transfer agent (a “Transfer Agent”) shall enter on the register of membershow many shares are held by each member in uncertificated form and in certificated form and shall maintain the register of members. Notwithstanding anyprovision of these Articles, a class or series of shares shall not be treated as two classes by virtue only of that class or series comprising both certificatedshares and uncertificated Shares or as a result of any provision of these Articles which apply only in respect of certificated or uncertificated shares.9MORTGAGES AND CHARGES OF REGISTERED SHARES29.Members may mortgage or charge their registered shares in the Company with such mortgage or charge being evidenced in writing and signed by, or withthe authority of the registered holder of a registered share to which the mortgage or charge relates. The Company shall give effect to the terms of any validmortgage or charge except insofar as it may conflict with any requirements herein contained for consent to the transfer of shares.30.In the case of the mortgage or charge of registered shares there may be entered in the share register of the Company at the request of the registered holderof such shares(a)a statement that the shares are mortgaged or charged;(b)the name of the mortgagee or chargee; and(c)the date on which the aforesaid particulars are entered in the share register.31.Where particulars of a mortgage or charge are entered in the register of members, such particulars shall be cancelled(a)with the written consent of the named mortgagee or chargee or anyone authorized to act on his behalf; or(b)upon evidence satisfactory to the directors of the discharge of the liability secured by the mortgage or charge and the issue of such indemnities asthe directors shall consider necessary or desirable.32.Whilst particulars of a mortgage or charge over registered shares are entered in the register of members pursuant to the preceding articles no transfer ofany share comprised therein shall be effected without the written consent of the named mortgagee or chargee or anyone authorized to act on his behalf.FORFEITURE33.When shares not fully paid on issue or issued for a promissory note or other written obligation for payment of a debt have been issued subject toforfeiture, the following provisions shall apply.34.Written notice specifying a date for payment to be made and the shares in respect of which payment is to be made shall be served on the member whodefaults in making payment pursuant to a promissory note or other written obligations to pay a debt.35.The written notice specifying a date for payment shall(a)name a further date not earlier than the expiration of 14 days from the date of service of the notice on or before which payment required by thenotice is to be made; and(b)contain a statement that in the event of nonpayment at or before the time named in the notice the shares, or any of them, in respect of whichpayment is not made will be liable to be forfeited.36.Where a written notice has been issued and the requirements of the notice have not been complied with within the prescribed time, the directors may at anytime before tender of payment forfeit and cancel the shares to which the notice relates.37.The Company is under no obligation to refund any moneys to the member whose shares have been forfeited and cancelled pursuant to these provisions.Upon forfeiture and cancellation of the shares the member is discharged from any further obligation to the Company with respect to the shares forfeitedand cancelled.10LIEN38.The Company shall have a first and paramount lien on every share issued for a promissory note or for any other binding obligation to contribute money orproperty or any combination thereof to the Company, and the Company shall also have a first and paramount lien on every share standing registered in thename of a member, whether singly or jointly with any other person or persons, for all the debts and liabilities of such member or his estate to the Company,whether the same shall have been incurred before or after notice to the Company of any interest of any person other than such member, and whether thetime for the payment or discharge of the same shall have actually arrived or not, and notwithstanding that the same are joint debts or liabilities of suchmember or his estate and any other person, whether a member of the Company or not. The Company’s lien on a share shall extend to all distributionspayable thereon. The directors may at any time either generally, or in any particular case, waive any lien that has arisen or declare any share to be wholly orin part exempt from the provisions of this Article.39.In the absence of express provisions regarding sale in the promissory note or other binding obligation to contribute money or property, the Company maysell, in such manner as the directors may by resolution of directors determine, any share on which the Company has a lien, but no sale shall be made unlesssome sum in respect of which the lien exists is presently payable nor until the expiration of twentyone days after a notice in writing, stating and demandingpayment of the sum presently payable and giving notice of the intention to sell in default of such payment, has been served on the holder for the timebeing of the share.40.The net proceeds of the sale by the Company of any shares on which it has a lien shall be applied in or towards payment of discharge of the promissorynote or other binding obligation to contribute money or property or any combination thereof in respect of which the lien exists so far as the same ispresently payable and any residue shall (subject to a like lien for debts or liabilities not presently payable as existed upon the share prior to the sale) bepaid to the holder of the share immediately before such sale. For giving effect to any such sale the directors may authorize some person to transfer theshare sold to the purchaser thereof. The purchaser shall be registered as the holder of the share and he shall not be bound to see to the application of thepurchase money, nor shall his title to the share be affected by any irregularity or invalidity in the proceedings in reference to the sale.TRANSFER OF SHARES41.Registered shares in the Company are transferred by a written instrument of transfer signed by the transferor and containing the name and address of thetransferee. The instrument of transfer shall be signed by the transferee if registration as a holder of the share shall impose a liability to the Company on thetransferee. The instrument of transfer of a registered share shall be sent to the Company for registration.42.The board of directors may resolve that interests in shares in the form of depositary receipts may be transferred or otherwise dealt with in accordance withthe regulations and practices instituted by the operator of the Relevant System and any holder of interests in shares shall be entitled to transfer suchinterests by means of such Relevant System and the operator of the Relevant System shall act as agent of the holders of such interests for the purposes ofthe transfer of those interests.43.The register of members may be closed at such times and for such periods as the board of directors may from time to time determine, upon notice beinggiven by advertisement in such newspapers as may be required by the Act and the practice of the Designated Stock Exchange.44.The transfer of a registered share is effective when the name of the transferee is entered on the register of members.45.If the directors of the Company are satisfied that an instrument of transfer relating to shares has been signed but that the instrument has been lost ordestroyed, they may resolve;(a)to accept such evidence of the transfer of the shares as they consider appropriate; and(b)that the transferee’s name should be entered in the register of members notwithstanding the absence of the instrument of transfer.46.The Company must on the receipt of an instrument of transfer from the transferor or transferee of a registered share in the Company enter the name of thetransferee of the share in the register or members unless the directors, if permitted by the Memorandum or these Articles, resolve by resolution of directorsto refuse or delay the registration of the transfer for reasons that shall be specified in the resolution of directors.11TRANSMISSION OF SHARES47.The personal representative of a deceased member may transfer a share even though the personal representative is not a member at the time of the transfer.48.The personal representative, executor or administrator of a deceased member, the guardian of an incompetent member or the trustee of a bankrupt membershall be the only person recognized by the Company as having any title to his share but they shall not be entitled to exercise any rights as a member of theCompany until they have proceeded as set forth in the next following three Articles.49.The production to the Company of any document which is evidence of probate of the will, or letters of administration of the estate, or confirmation asexecutor, of a deceased member or of the appointment of a guardian of an incompetent member or the trustee of a bankrupt member shall be accepted by theCompany even if the deceased, incompetent or bankrupt member is domiciled outside the British Virgin Islands if the document evidencing the grant ofprobate or letters of administration, confirmation as executor, appointment as guardian or trustee in bankruptcy is issued by a foreign court which hadcompetent jurisdiction in the matter. For the purpose of establishing whether or not a foreign court had competent jurisdiction in such a matter the directorsmay obtain appropriate legal advice. The directors may also require an indemnity to be given by the executor, administrator, guardian or trustee inbankruptcy.50.The Company may enter in the register of members the name of any person becoming entitled by operation of law or otherwise to a share or shares inconsequence of the death, incompetence or bankruptcy upon such evidence being produced as may reasonably be required by the directors.51.Any person who has become entitled to a share or shares in consequence of the death, incompetence or bankruptcy of any member may, instead of beingregistered himself, request in writing that some person to be named by him be registered as the transferee of such share or shares and such request shalllikewise be treated as if it were a transfer.52.What amounts to incompetence on the part of a person is a matter to be determined by the court having regard to all the relevant evidence and thecircumstances of the case.REDUCTION OR INCREASE IN AUTHORISED AND UNISSUED SHARES48.The Company may amend the Memorandum to increase or reduce the maximum number of shares the Company is authorised to issue and may in respect ofany unissued shares increase or reduce the number of such shares, or effect any combination of the foregoing.49.The Company may(1)(a) divide its shares, including issued shares, into a larger number of shares; or (b) combine its shares, including issued shares, into a smallernumber of shares.(2)A division or combination of shares, including issued shares, of a class or series shall be for a larger or smaller number, as the case may be, ofshares in the same class or series.(3)A company shall not divide its shares under subsection (1)(a) or (2) if it would cause the maximum number of shares that the Company isauthorised to issue by its memorandum to be exceeded.(4)Where shares are divided or combined under this article, the aggregate par value of the new shares must be equal to the aggregate par value of theoriginal shares.MEETINGS AND CONSENTS OF MEMBERS50.The directors of the Company may convene meetings of the members of the Company at such times and in such manner and places within or outside theBritish Virgin Islands as the directors consider necessary or desirable. The Company may hold an annual general meeting, but shall not (unless required bythe applicable rules of the Designated Stock Exchange for so long as the Company’s Securities are listed or traded on the Designated Stock Exchange) beobliged to hold an annual general meeting.51.Upon the written request of members holding 30 percent or more of the outstanding voting shares in the Company the directors shall convene a meeting ofmembers.1252.The directors shall give not less than 7 days notice of meetings of members to those persons whose names on the date the notice is given appear asmembers in the share register of the Company and are entitled to vote at the meeting.53.The directors may fix the date notice is given of a meeting of members as the record date for determining those shares that are entitled to vote at themeeting.54.A meeting of members may be called on short notice:(a)if members holding not less than 90 percent of the total number of shares entitled to vote on all matters to be considered at the meeting, or 90percent of the votes of each class or series of shares where members are entitled to vote thereon as a class or series together with not less than a90 percent majority of the remaining votes, have agreed to short notice of the meeting, or(b)if all members holding shares entitled to vote on all or any matters to be considered at the meeting have waived notice of the meeting and for thispurpose presence at the meeting shall be deemed to constitute waiver.55.The inadvertent failure of the directors to give notice of a meeting to a member, or the fact that a member has not received notice, does not invalidate themeeting.56.A member may be represented at a meeting of members by a proxy who may speak and vote on behalf of the member.57.The instrument appointing a proxy shall be produced at the place appointed for the meeting before the time for holding the meeting at which the personnamed in such instrument proposes to vote.58.An instrument appointing a proxy shall be in substantially the following form or such other form as the Chairman of the meeting shall accept as properlyevidencing the wishes of the member appointing the proxy.(Name of Company)I/Webeing a member of the aboveCompany withshares HEREBY APPOINTofor failing himofto be my/our proxy to vote for me/us at the meeting of members to be held on the dayofand at any adjournment thereof.(Any restrictions on voting to be inserted here.)Signed this day ofMember59.The following shall apply in respect of joint ownership of shares:a.if two or more persons hold shares jointly each of them may be present in person or by proxy at a meeting of members and may speak as a member;b.if only one of the joint owners is present in person or by proxy he may vote on behalf of all joint owners, andc.if two or more of the joint owners are present in person or by proxy they must vote as one.60.A member shall be deemed to be present at a meeting of members if he participates by telephone or other electronic means and all members participating inthe meeting are able to hear each other.61.A meeting of members is duly constituted if, at the commencement of the meeting, there are present in person or by proxy not less than 50 percent of thevotes of the shares or class or series of shares entitled to vote on resolutions of members to be considered at the meeting. If a quorum be present,notwithstanding the fact that such quorum may be represented by only one person then such person may resolve any matter and a certificate signed bysuch person accompanied where such person be a proxy by a copy of the proxy form shall constitute a valid resolution of members.1362.If within two hours from the time appointed for the meeting a quorum is not present, the meeting, if convened upon the requisition of members, shall bedissolved; in any other case it shall stand adjourned to the next business day at the same time and place or to such other time and place as the directorsmay determine, and if at the adjourned meeting there are present within one hour from the time appointed for the meeting in person or by proxy not lessthan one third of the votes of the shares or each class or series of shares entitled to vote on the resolutions to be considered by the meeting, those presentshall constitute a quorum but otherwise the meeting shall be dissolved.63.At every meeting of members, the Chairman of the Board of Directors shall preside as chairman of the meeting. If there is no Chairman of the Board ofDirectors or if the Chairman of the Board of Directors is not present at the meeting, the members present shall choose some one of their number to be thechairman. If the members are unable to choose a chairman for any reason, then the person representing the greatest number of voting shares present inperson or by prescribed form of proxy at the meeting shall preside as chairman failing which the oldest individual member or representative of a memberpresent shall take the chair.64.The chairman may, with the consent of the meeting, adjourn any meeting from time to time, and from place to place, but no business shall be transacted atany adjourned meeting other than the business left unfinished at the meeting from which the adjournment took place.65.At any meeting of the members the chairman shall be responsible for deciding in such manner as he shall consider appropriate whether any resolution hasbeen carried or not and the result of his decision shall be announced to the meeting and recorded in the minutes thereof. If the chairman shall have anydoubt as to the outcome of any resolution put to the vote, he shall cause a poll to be taken of all votes cast upon such resolution, but if the chairman shallfail to take a poll then any member present in person or by proxy who disputes the announcement by the chairman of the result of any vote mayimmediately following such announcement demand that a poll be taken and the chairman shall thereupon cause a poll to be taken. If a poll is taken at anymeeting, the result thereof shall be duly recorded in the minutes of that meeting by the chairman.66.Any person other than an individual shall be regarded as one member and subject to the specific provisions hereinafter contained for the appointment ofrepresentatives of such persons the right of any individual to speak for or represent such member shall be determined by the law of the jurisdiction where,and by the documents by which, the person is constituted or derives its existence. In case of doubt, the directors may in good faith seek legal advice fromany qualified person and unless and until a court of competent jurisdiction shall otherwise rule, the directors may rely and act upon such advice withoutincurring any liability to any member.67.Any person other than an individual which is a member of the Company may by resolution of its directors or other governing body authorize such personas it thinks fit to act as its representative at any meeting of the Company or of any class of members of the Company, and the person so authorized shall beentitled to exercise the same powers on behalf of the person which he represents as that person could exercise if it were an individual member of theCompany.68.The chairman of any meeting at which a vote is cast by proxy or on behalf of any person other than an individual may call for a notarially certified copy ofsuch proxy or authority which shall be produced within 7 days of being so requested or the votes cast by such proxy or on behalf of such person shall bedisregarded.69.Directors of the Company may attend and speak at any meeting of members of the Company and at any separate meeting of the holders of any class orseries of shares in the Company.70.An action that may be taken by the members at a meeting may also be taken by a resolution of members consented to in writing or by telex, telegram, cable,facsimile or other written electronic communication, without the need for any notice, but if any resolution of members is adopted otherwise than by theunanimous written consent of all members, a copy of such resolution shall forthwith be sent to all members not consenting to such resolution. The consentmay be in the form of counterparts, each counterpart being signed by one or more members.14DIRECTORS71.The first directors of the Company shall be appointed by the first registered agent of the Company and thereafter the directors shall be appointed byresolution of members, subject to Article 78, for such term as the members determine. A person shall not be appointed as a director unless he hasconsented in writing to be a director.72.The minimum number of directors shall be one and the maximum number shall be 20. Unless otherwise determined by the Company in a meeting ofshareholders and subject to the requirements of the Memorandum, the directors may by a Resolution of Directors, amend this Regulation 72 to change thenumber of directors. For as long as Securities of the Company are listed or traded on the Designated Stock Exchange, the directors shall include suchnumber of Independent Directors as applicable law, rules or regulations of the Designated Stock Exchange may require for a foreign private issuer as longas the Company is a foreign private issuer.73.Each director shall hold office for the term, if any, fixed by resolution of members or until his earlier death, resignation or removal.74.Where the Company has only one member who is an individual and that member is also the sole director of the Company, that sole member/director may, byinstrument in writing, nominate a person who is not disqualified from being a director of the Company under section 111(1) of the Act as a reserve directorof the Company to act in the place of the sole director in the event of his death.75.The nomination of a person as a reserve director of the Company ceases to have effect if;a.before the death of the sole member/director who nominated him;(i)he resigns as reserve director, or(ii)the sole member/director revokes the nomination in writing; orb.the sole member/director who nominated him ceases to be the sole member/director of the Company for any reason other than his death.76.A director may be removed from office, with or without cause, by a resolution of directors or a resolution of members. For the purposes of this Regulation76, “cause” means the willful and continuous failure by a director to substantially perform his duties to the Company (other than any such failure resultingfrom incapacity due to physical or mental illness) or the willful engaging by the director in gross misconduct materially and demonstrably injurious to theCompany. If a director is removed from office without cause by a resolution of the members, for the purposes of this Regulation, the resolution of memberswill require the affirmative vote of the holders of 66 2/3 percent or more of the outstanding votes of the shares entitled to vote thereon.77.A director may resign his office by giving written notice of his resignation to the Company and the resignation shall have effect from the date the notice isreceived by the Company or from such later date as may be specified in the notice. A director of the Company shall resign forthwith if he is, or becomes,disqualified to act as a director under the Act.78.The directors may at any time by resolution of directors appoint any person to be a director to fill a vacancy. There is a vacancy if a director dies orotherwise ceases to hold office as a director prior to the expiration of his term of office, where his term of office was fixed upon his appointment. Thedirectors may not appoint a director to fill a vacancy for a term exceeding the term that remained when the person who has ceased to be a director left orotherwise ceased to hold office.79.The Company shall keep a register of directors containing:a.the names and addresses of the persons who are directors of the Company or who have been nominated as reserve directors of the Company;b.the date on which each person whose name is entered in the register was appointed as a director of the Company or nominated as a reservedirector of the Company;c.the date on which each person named as a director ceased to be a director of the Company;d.the date on which the nomination of any person nominated as a reserve director ceased to have effect; ande.such other information as may be prescribed pursuant to the Act.1580.The original or a copy of any register of directors shall be kept at the office of the registered agent of the Company.81.The register of directors may be in any such form as the directors may approve but if it is in magnetic, electronic or other data storage form, the companymust be able to produce legible evidence of its contents.82.With the prior or subsequent approval by a resolution of members, the directors may, by a resolution of directors, fix the emoluments of directors withrespect to services to be rendered in any capacity to the Company.83.A director shall not require a share qualification and may be an individual or a company.POWERS OF DIRECTORS84.The business and affairs of the Company shall be managed by the directors who may pay all expenses incurred preliminary to and in connection with theformation and registration of the Company and may exercise all such powers of the Company as are not by the Act or by the Memorandum or theseArticles required to be exercised by the members of the Company, subject to any delegation of such powers as may be authorized by these Articles and tosuch requirements as may be prescribed by a resolution of members; but no requirement made by a resolution of members shall prevail if it be inconsistentwith these Articles nor shall such requirement invalidate any prior act of the directors which would have been valid if such requirement had not been made.Notwithstanding anything in Section 175 of the Act the directors shall have the power to sell, transfer, lease, exchange or otherwise dispose of more thanfifty percent of the assets of the Company without submitting a proposal to or obtaining the consent of the members of the Company.85.If the Company is a whollyowned subsidiary of a holding company a director may when exercising powers or performing duties as a director act in amanner which he believes is in the best interests of the holding company even though it may not be in the best interests of the Company.86.The directors may, by a resolution of directors, appoint any person, including a person who is a director, to be an officer or agent of the Company. Theresolution of directors appointing an agent may authorize the agent to appoint one or more substitutes or delegates to exercise some or all of the powersconferred on the agent by the Company.87.Every officer or agent of the Company has such powers and authority of the directors, including the power and authority to affix the Seal, as are set forth inthese Articles or in the resolution of directors appointing the officer or agent, except that no agent has any power or authority with respect to thefollowing;a.to amend the memorandum or articles;b.to change the registered office or agent;c.to designate committees of directors;d.to delegate powers to a committee of directors;e.to appoint or remove directors;f.to appoint or remove an agent;g.to fix emoluments of directors;h.to approve a plan of merger, consolidation or arrangement;i.to make a declaration of solvency for the purposes of section 198(1)(a) of the Act or to approve a liquidation plan;j.to make a determination under section 57(1) of the Act that the company will, immediately after a proposed distribution, satisfy the solvency test;ork.to authorise the Company to continue as a company incorporated under the laws of a jurisdiction outside the British Virgin Islands.1688.Any director which is a body corporate may appoint any person its duly authorized representative for the purpose of representing it at meetings of theBoard of Directors or with respect to unanimous written consents.89.The continuing directors may act notwithstanding any vacancy in their body, save that if their number is reduced to their knowledge below the numberfixed by or pursuant to these Articles as the necessary quorum for a meeting of directors, the continuing directors or director may act only for the purposeof appointing directors to fill any vacancy that has arisen or for summoning a meeting of members.90.The directors may by resolution of directors exercise all the powers of the Company to borrow money and to mortgage or charge its undertakings andproperty or any part thereof, to issue debentures, debenture stock and other securities whenever money is borrowed or as security for any debt, liability orobligation of the Company or of any third party.91.All cheques, promissory notes, drafts, bills of exchange and other negotiable instruments and all receipts for moneys paid to the Company, shall be signed,drawn, accepted, endorsed or otherwise executed, as the case may be, in such manner as shall from time to time be determined by resolution of directors.92.The Company shall keep a register of all relevant charges created by the Company showing:a.if the charge is a charge created by the Company, the date of its creation or if the charge is existing on property acquired by the Company, the dateon which the property was acquired;b.a short description of the liability secured by the charge;c.a short description of the property charged;d.the name and address of the trustee for the security, or if there is no such trustee the name and address of the chargee;e.unless the charge is a security to bearer, the name and address of the holder of the charge;f.details of any prohibition or restriction , if any, contained in the instrument creating the charge on the power of the company to create any futurecharge ranking in priority to or equally with the charge; andg.such other information as may be prescribed pursuant to the Act.93.The original or a copy of the register of charges shall be kept at the registered office of the Company or at the office of the registered agent of the Company.PROCEEDINGS OF DIRECTORS94.The directors of the Company or any committee thereof may meet at such times and in such manner and places within or outside the British Virgin Islandsas the directors may determine to be necessary or desirable. Any one or more directors may convene a meeting of directors.95.A director shall be deemed to be present at a meeting of directors if he participates by telephone or other electronic means and all directors participating inthe meeting are able to hear each other.96.A director shall be given not less than 3 days notice of meetings of directors, but a meeting of directors held without 3 days notice having been given to alldirectors shall be valid if all the directors entitled to vote at the meeting who do not attend, waive notice of the meeting and for this purpose, the presenceof a director at a meeting shall constitute waiver on his part. The inadvertent failure to give notice of a meeting to a director, or the fact that a director hasnot received the notice, does not invalidate the meeting.1797.A director may by a written instrument appoint an alternate who need not be a director and an alternate is entitled to attend meetings in the absence of thedirector who appointed him and to vote or consent in place of the director.98.A meeting of directors is duly constituted for all purposes if at the commencement of the meeting there are present in person or by alternate not less thanone half of the total number of directors, unless there are only 2 directors in which case the quorum shall be 2.99.If the Company shall have only one director the provisions herein contained for meetings of the directors shall not apply but such sole director shall havefull power to represent and act for the Company in all matters as are not by the Act or the Memorandum or these Articles required to be exercised by themembers of the Company and in lieu of minutes of a meeting shall record in writing and sign a note or memorandum of all matters requiring a resolution ofdirectors. Such a note or memorandum shall constitute sufficient evidence of such resolution for all purposes.100.At every meeting of the directors the Chairman of the Board of Directors shall preside as chairman of the meeting. If there is no Chairman of the Board ofDirectors or if the Chairman of the Board of Directors is not present at the meeting the Vice Chairman of the Board of Directors shall preside. If there is noVice Chairman of the Board of Directors or if the Vice Chairman of the Board of Directors is not present at the meeting the directors present shall choosesome one of their number to be chairman of the meeting.101.An action that may be taken by the directors or a committee of directors at a meeting may also be taken by a resolution of directors or a committee ofdirectors consented to in writing or by telex, telegram, cable, facsimile or other written electronic communication by all directors or all members of thecommittee as the case may be, without the need for any notice. The consent may be in the form of counterparts, each counterpart being signed by one ormore directors.102.The directors shall cause the following records to be kept:a.minutes of all meetings of directors, members, committees of directors and committees of members; andb.copies of all resolutions consented to by directors, members, committees of directors and committees of members.103.The resolutions, records and minutes referred to in the preceding Article shall be kept at the registered office of the Company, its principal place ofbusiness or at such other place as the directors determine.104.The directors may, by resolution of directors, designate one or more committees, each consisting of one or more directors.105.Subject to the following Article, each committee of directors has such powers and authorities of the directors, including the power and authority to affix theSeal, as are set forth in the resolution of directors establishing the committee.106.The directors have no power to delegate the following powers to a committee of directors;a.to amend the memorandum or articles;b.to change the registered office or agent;c.to designate committees of directors;d.to delegate powers to a committee of directors;e.to appoint or remove directors;f.to appoint or remove an agent;g.to fix emoluments of directors;18h.to approve a plan of merger, consolidation or arrangement;i.to make a declaration of solvency for the purposes of section 198(1)(a) or to approve a liquidation plan;j.to make a determination under section 57(1) that the company will, immediately after a proposed distribution, satisfy the solvency test; ork.to authorise the company to continue as a company incorporated under the laws of a jurisdiction outside the British Virgin Islands.Paragraphs (c) and (d) do not prevent a committee of directors, where authorised by the directors, from appointing a subcommittee and delegating powersexercisable by the committee to the subcommittee.107.The meetings and proceedings of each committee of directors consisting of 2 or more directors shall be governed mutatis mutandis by the provisions ofthese Articles regulating the proceedings of directors so far as the same are not superseded by any provisions in the resolution establishing the committee.108.Without prejudice to the freedom of the directors to establish any other committee, if the shares (or depositary receipts therefore) are listed or quoted onthe Designated Stock Exchange, and if required by the Designated Stock Exchange, the directors shall establish and maintain an audit committee as acommittee of the board of directors, the composition and responsibilities of which shall comply with the rules and regulations of the SEC and theDesignated Stock Exchange. The audit committee shall meet at least once every financial quarter, or more frequently as circumstances dictate.109.The Company shall adopt a formal written audit committee charter and review and assess the adequacy of the formal written charter on an annual basis.The charter shall specify the responsibilities of the Audit Committee which shall include responsibility for, among other things, ensuring its receipt from theoutside auditors of the Company of a formal written statement delineating all relationships between the auditor and the Company, and the AuditCommittee’s responsibility for actively engaging in a dialogue with the auditor with respect to any disclosed relationships or services that may impact theobjectivity and independence of the auditor take appropriate action to oversee the independence of the outside auditor. In addition, the Audit Committee isresponsible for reviewing potential conflict of interest situations and approving all Related Party Transactions.110.Without prejudice to the freedom of the directors to establish any other committees, the Board may establish a Stock Option Committee to administer theCompany’s stock option plans, including authority to make and modify awards under such plans. For so long as the Securities of the Company are listed ortraded on the Designated Stock Exchange, the Stock Option Committee shall have at least two Independent Directors. The Stock Option Committee willadminister the Company’s stock option plans, including the authority to make and modify awards under such plans.111.Without prejudice to the freedom of the directors to establish any other committees, the Board may establish a Nominating Committee to assist the Board inidentifying qualified individuals to become members of the Board.OFFICERS112.The Company may by resolution of directors appoint officers of the Company at such times as shall be considered necessary or expedient. Such officersmay consist of a Chairman of the Board of Directors, a Vice Chairman of the Board of Directors, a President and one or more Vice Presidents, Secretaries andTreasurers and such other officers as may from time to time be deemed desirable. Any number of offices may be held by the same person.113.The officers shall perform such duties as shall be prescribed at the time of their appointment subject to any modification in such duties as may beprescribed thereafter by resolution of directors or resolution of members, but in the absence of any specific allocation of duties it shall be the responsibilityof the Chairman of the Board of Directors to preside at meetings of directors and members, the Vice Chairman to act in the absence of the Chairman, thePresident to manage the day to day affairs of the Company, the Vice Presidents to act in order of seniority in the absence of the President but otherwise toperform such duties as may be delegated to them by the President, the Secretaries to maintain the share register, minute books and records (other thanfinancial records) of the Company and to ensure compliance with all procedural requirements imposed on the Company by applicable law, and the Treasurerto be responsible for the financial affairs of the Company.19114.Subject to the rules of the Designated Stock Exchange, the emoluments of all officers shall be fixed by resolution of directors.115.The officers of the Company shall hold office until their successors are duly elected and qualified, but any officer elected or appointed by the directors maybe removed at any time, with or without cause, by resolution of directors. Any vacancy occurring in any office of the Company may be filled by resolutionof directors.CONFLICT OF INTERESTS116.A director of the Company shall, forthwith after becoming aware of the fact that he is interested in a transaction entered into or to be entered into by theCompany, disclose the interest to all other directors of the Company.117.A director of the Company is not required to comply with Article 112 if;a.the transaction or proposed transaction is between the director and the Company; andb.the transaction or proposed transaction is or is to be entered into in the ordinary course of the company’s business and on usual terms andconditions.118.For the purposes of Article 112 a disclosure to all other directors to the effect that a director is a member, director or officer of another named entity or has afiduciary relationship with respect to the entity or a named individual and is to be regarded as interested in any transaction which may, after the date of theentry or disclosure, be entered into with that entity or individual, is a sufficient disclosure of interest in relation to that transaction.119.A.A director of the Company who is interested in a transaction entered into or to be entered into by the Company may:(i)vote on a matter relating to the transaction;(ii)attend a meeting of directors at which a matter relating to the transaction arises and be included among the directors present at the meeting for thepurposes of a quorum; and(iii)sign a document on behalf of the Company, or do any other thing in his capacity as a director, that relates to the transaction,and, subject to compliance with the Act shall not, by reason of his office be accountable to the Company for any benefit which he derives from suchtransaction and no such transaction shall be liable to be avoided on the grounds of any such interest or benefit.119.B.For so long the Securities of the Company are listed or traded on the Designated Stock Exchange, the Company shall conduct an appropriate review of allmaterial Related Party Transactions on an ongoing basis and shall utilize the Audit Committee for the review and approval of potential conflicts of interestsituations.INDEMNIFICATION120.Subject to the limitations hereinafter provided the Company may indemnify against all expenses, including legal fees, and against all judgments, fines andamounts paid in settlement and reasonably incurred in connection with legal, administrative or investigative proceedings any person who;a.is or was a party or is threatened to be made a party to any threatened, pending or completed proceedings, whether civil, criminal, administrative orinvestigative, by reason of the fact that the person is or was a director, an officer or a liquidator of the Company; orb.is or was, at the request of the Company, serving as a director of, or in any other capacity is or was acting for, another body corporate or apartnership, joint venture, trust or other enterprise.20121.The Company may only indemnify a person if the person acted honestly and in good faith in what he believed to be in the best interests of the Companyand, in the case of criminal proceedings, the person had no reasonable cause to believe that his conduct was unlawful.122.For the purposes of the preceding Article, a director acts in the best interests of the Company if he acts in the best interests of;a.the Company’s holding company; orb.a shareholder or shareholders of the Company; in either case, in the circumstances specified in Article 85.123.The decision of the directors as to whether the person acted honestly and in good faith and with a view to the best interests of the Company and as towhether the person had no reasonable cause to believe that his conduct was unlawful is, in the absence of fraud, sufficient for the purposes of theseArticles, unless a question of law is involved.124.The termination of any proceedings by any judgment, order, settlement, conviction or the entering of a nolle prosequi does not, by itself, create apresumption that the person did not act honestly and in good faith and with a view to the best interests of the Company or that the person had reasonablecause to believe that his conduct was unlawful.Consolidated Statements of Changes in Stockholder’s EquityF5Consolidated Statements of Cash FlowsF6Notes to Consolidated Financial StatementsF7 F22F1REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRMTo the Shareholder and the Sole Director ofLK Technology Ltd.Opinion on the Consolidated Financial StatementsWe have audited the accompanying consolidated balance sheets of LK Technology Ltd. and. subsidiaries (the “Company”) as of December 31, 2017 and 2016, andthe related consolidated statements of operations and comprehensive loss, changes in shareholder’s equity and cash flows for each of the years then ended, andthe related notes (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in allmaterial respects, the consolidated financial position of the Company as of December 31, 2017 and 2016, and the consolidated results of its operations and its cashflows for each of the years then ended, in conformity with accounting principles generally accepted in the United States of America.Basis for OpinionThese consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’sconsolidated financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (UnitedStates) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules andregulations of the Securities and Exchange Commission and the PCAOB.We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonableassurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have,nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internalcontrol over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting.Accordingly, we express no such opinion.An independent member firm of Moore Stephens International Limited – members in principal cities throughout the worldOur audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, andperforming procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in theconsolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well asevaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion.Certified Public AccountantsWe have served as the Company’s auditor since 2018.Hong KongMay 25, 2018F2LK TECHNOLOGY LTD. AND SUBSIDIARIESCONSOLIDATED BALANCE SHEETS(IN U.S. DOLLARS)As of December 31,20172016AssetsCurrent assets:Cash and cash equivalents$72,379$83,843Accounts receivable, net of allowance for doubtful accounts9,729,6251,865,836Other receivables and prepayment2,376,7452,287,934Amounts due from related parties11,760,692Total current assets23,939,4414,237,613Property and equipment, net5,044,8727,771,027Intangible assets, net1,154,1971,682,445Goodwill7,239,9367,239,936Amount due from a related party204,412183,811TOTAL ASSETS37,582,85821,114,832LiabilitiesCurrent liabilities:Accounts payable8,784,5186,446,584Accrued liabilities and other payables12,962,91211,329,613Amounts due to related parties3,563,68316,129,323Total current liabilities25,311,11333,905,520Total liabilities25,311,11333,905,520Commitments and contingenciesShareholder’s Equity (Deficit)Share capitalCommon stock, $1 par value per share; 50,000 shares authorized as of December 31, 2017 and 2016, 1 share issued andoutstanding as of December 31, 2017 and 201611Additional paidin capital41,819,68510,037,469Accumulated deficit(29,936,158)(23,125,704)Accumulated other comprehensive income (loss)388,217297,546Total Shareholder’s Equity (Deficit)12,271,745(12,790,688)TOTAL LIABILITIES AND SHAREHOLDER’S EQUITY (DEFICIT)$37,582,858$21,114,832F3LK TECHNOLOGY LTD. AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS(IN U.S. DOLLARS)For the years endedDecember 31,20172016Revenues$26,082,417$5,233,145Less: Cost of revenues5,547,7796,315,504Less: Operating expenses:Selling and marketing23,908,7336,209,804General and administrative2,451,2492,108,854Research and development1,046,1982,882,202Total operating expenses27,406,18011,200,860Loss from operations(6,871,542)(12,283,219)Other income (expense):Interest expense(26,611)(4,412)Foreign exchange gains (losses)350,679(298,257)Loss from investment(428,571)Other income (expense), net(262,980)(34,572)Total other income (expense), net61,088(765,812)Loss before income taxes(6,810,454)(13,049,031)Income taxesNet loss$(6,810,454)$(13,049,031)Other comprehensive income:Foreign currency translation adjustment90,671387,375Total comprehensive loss$(6,719,783)$(12,661,656)F4LK TECHNOLOGY LTD. AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDER’S EQUITY(IN U.S. DOLLARS)Accumulated otherTotalOrdinary sharesAdditionalpaidin AccumulatedcomprehensiveIncomeShareholder’sEquity SharesAmountcapitaldeficits(loss)(Deficit)Balance as of December 31, 20151$ 1$8,250,505$(10,076,673)$(89,829)$(1,915,996)Capital contribution from C Media1,786,9641,786,964Net loss(13,049,031)(13,049,031)Foreign currency translation adjustment387,375387,375Balance as of December 31, 20161110,037,469(23,125,704)297,546(12,790,688)Capital contribution from C Media31,782,21631,782,216Net loss(6,810,454)(6,810,454)Foreign currency translation adjustment90,67190,671Balance as of December 31, 20171$1$41,819,685$(29,936,158)$388,217$12,271,745F5LK TECHNOLOGY LTD. AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF CASH FLOWS(IN U.S. DOLLARS)For the years endedDecember 31,20172016CASH FLOWS FROM OPERATING ACTIVITIES:Net loss$(6,810,454)$(13,049,031)Depreciation and amortization3,316,1813,245,161Loss on disposal of property and equipment115,19373,022Increase in allowance for doubtful accounts445,39562,591Changes in assets and liabilitiesAccounts receivable(7,933,730)(1,507,296)Other receivables and prepayment(2,202,960)2,873,984Accounts payable2,230,5434,757,457Accrued liabilities and other payables1,866,1377,483,441Net cash (used in) provided by operating activities(8,973,695)3,939,329CASH FLOWS FROM INVESTING ACTIVITIES:Purchase of property and equipment(12,689)(3,554,258)Proceeds from disposal of property and equipment29,942Net cash provided by (used in) investing activities17,253(3,554,258)CASH FLOWS FROM FINANCING ACTIVITIES:Advances from related parties8,938,290(1,197,870)Net cash provided by (used in) financing activities8,938,290(1,197,870)Effect of exchange rate changes6,688(32,746)Net decrease in cash and cash equivalents(11,464)(845,545)Cash and cash equivalents, at beginning of year83,843929,388Cash and cash equivalents, at end of year$72,379$83,843Supplemental cash flow disclosures:Interest paid26,6114,412Income taxes paidF6LK TECHNOLOGY LTD. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS(IN U.S. DOLLARS)NOTE 1 – DESCRIPTION OF BUSINESS AND ORGANIZATIONStar Chariot Limited was incorporated in the British Virgin Islands (“BVI”) as an exempted limited liability company on March 3, 2011. On January 18, 2018, it wasrenamed as LK Technology Ltd. (“LK Technology ” or the “Company”).LK Technology, its subsidiaries and its variable interest entities (“VIEs”) (collectively the “Group”) operate mobile application service for longdistance travel in thePeople’s Republic of China (the “PRC”). The core mobile application product, Luokuang, is made as an LBSsocial contents and services distribution platform. Itoffers functions based on various travel scenarios, e.g. information, entertainment, travel, ecommerce, O2O, advertising, etc.As of December 31, 2017, details of the Company’s subsidiaries and VIEs are as follows:NameDate ofincorporationPlace ofincorporationPercentage oflegal ownershipSubsidiaries:MMB LimitedApr 11, 2013Hong Kong100%Mobile Media (China) LimitedNov 6, 2007Hong Kong100%Zhong Chuan Tian Xia Information and Technology (Beijing) LimitedFeb 1, 2013PRC100%Zhong Chuan Tian Xia Information and Technology (Shenzhen) LimitedDec 23, 2010PRC100%VIEs:Beijing Zhong Chuan Shi Xun Technology Limited (“Zhong Chuan Shi Xun”)May 17, 2004PRC100%Jiangsu Zhong Chuan Rui You Information and Technology Limited (“Zhong Chuan Rui You”)May 26, 2011PRC100%Huoerguosi Luokuang Information and Technology Limited (“Huoerguosi Luokuang”)Jul 19, 2017PRC100%Shenzhen Jiu Zhou Shi Dai Digital and Technology Limited (“Jiu Zhou Shi Dai”)Nov 26, 2004PRC100%F7NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIESBasis of presentationThe consolidated financial statements of the Group have been prepared in accordance with accounting principles generally accepted in the United States of America(“US GAAP”).The Group incurred losses from operations of $6,871,542 and $12,283,219 for the years ended December 31, 2017 and 2016, respectively. As of December 31, 2017, theGroup had a shareholder’s equity of $12,271,145. The Group had negative cash flows from operating activities for the year ended December 31, 2017 of $8,973,695.As of December 31, 2017, the Group had cash and cash equivalents of $72,379 and a working capital deficit of $1,371,672. From 2018 and onwards, the Group willfocus on improving operation efficiency and cost reduction, and enhancing marketing functions to attract more users. The Group regularly monitors its current andexpected liquidity requirements to ensure that it maintains sufficient cash balances and accessible credit to meet its liquidity requirements in the short and long term.The parent company continues to provide cash flow to the Group. Based on working capital conditions and forecast for future operations, the Group believes that itwill be able to meet its payment obligations and other commitments for at least the following twelve months.Principles of consolidationThe consolidated financial statements include the financial statements of the Company, its subsidiaries, including the whollyforeign owned enterprises (“WFOEs”),and VIEs for which the Company is the primary beneficiary. All transactions and balances among the Company, its subsidiaries and consolidated VIEs have beeneliminated upon consolidation. The results of subsidiaries and consolidated VIEs acquired or disposed of are recorded in the consolidated statements of operationsfrom the effective date of acquisition or up to the effective date of disposal, as appropriate.A subsidiary is an entity in which (i) the Company directly or indirectly controls more than 50% of the voting power; or (ii) the Company has the power to appoint orremove the majority of the members of the board of directors or to cast a majority of votes at the meeting of the board of directors or to govern the financial andoperating policies of the investee pursuant to a statute or under an agreement among the shareholders or equity holders. A VIE is required to be consolidated by theprimary beneficiary of the entity if the equity holders in the entity do not have the characteristics of a controlling financial interest or do not have sufficient equity atrisk for the entity to finance its activities without additional subordinated financial support from other parties.F8To comply with the PRC legal restrictions on foreign ownership of companies that operate mobile application services, the Group operates in such restricted servicesin the PRC through certain PRC domestic companies, whose equity interests are held by certain management members or founders of the Group. Part of theregistered capital of these PRC domestic companies was funded by certain management members or founders of the Group. The Group has entered into certainexclusive business services agreements with these PRC domestic companies, which entitle it to receive a majority of their residual returns and make it obligatory forthe Group to absorb a majority of the risk of losses from their activities. In addition, the Group has entered into certain agreements with those management membersor founders, including equity interest pledge agreements of the equity interests held by those management members or founders and exclusive option agreements toacquire the equity interests in these companies when permitted by the PRC laws, rules and regulations.Details of the typical VIE structure of the Group’s significant consolidated VIEs, primarily domestic companies associated with the operations such as Zhong ChuanShi Xun, Zhong Chuan Rui You, Huoerguosi Luokuang and Jiu Zhou Shi Dai, are set forth below:(i)Contracts that give the Group effective control of VIEsExclusive option agreementsThe VIE equity holders have granted the WFOEs exclusive call options to purchase their equity interest in the VIEs at an exercise price equal to the higherof (i) the registered capital in the VIEs; and (ii) the minimum price as permitted by applicable PRC laws. Each relevant VIE has further granted the relevantWFOE an exclusive call option to purchase its assets at an exercise price equal to the book value of the assets or the minimum price as permitted byapplicable PRC laws, whichever is higher. The WFOEs may nominate another entity or individual to purchase the equity interest or assets, if applicable,under the call options. Each call option is exercisable subject to the condition that applicable PRC laws, rules and regulations do not prohibit completion ofthe transfer of the equity interest or assets pursuant to the call option. Each WFOE is entitled to all dividends and other distributions declared by the VIE,and the VIE equity holders have agreed to give up their rights to receive any distributions or proceeds from the disposal of their equity interests in the VIEwhich are in excess of the original registered capital that they contributed to the VIE, and to pay any such distributions or premium to the WFOE. Theexclusive call option agreements remain in effect until the equity interest or assets that are the subject of such agreements are transferred to the WFOEs.Equity pledge agreementsPursuant to the relevant equity pledge agreements, the relevant VIE equity holders have pledged all of their interests in the equity of the VIEs as acontinuing first priority security interest in favor of the corresponding WFOEs to secure the performance of obligations by the VIEs and/or the equityholders under the other structure contracts. Each WFOE is entitled to exercise its right to dispose of the VIE equity holders’ pledged interests in the equityof the VIE and has priority in receiving payment by the application of proceeds from the auction or sale of such pledged interests, in the event of anybreach or default under the loan agreement or other structure contracts, if applicable. These equity pledge agreements remain in force for the duration ofthe relevant loan agreement and other structure contracts.F9(ii)Contracts that enable the Group to receive substantially all of the economic benefits from the VIEsExclusive business services agreementsEach relevant VIE has entered into an exclusive business services agreement with the respective WFOE, pursuant to which the relevant WFOE providesexclusive business services to the VIE. In exchange, the VIE pays a service fee to the WFOE which typically amounts to what would be substantially all ofthe VIE’s pretax profit, resulting in a transfer of substantially all of the profits from the VIE to the WFOE.Other arrangementsThe exclusive call option agreements described above also enable the Group to receive substantially all of the economic benefits from the VIEs by typicallyentitling the WFOEs to all dividends and other distributions declared by the VIEs and to any distributions or proceeds from the disposal by the VIE equityholders of their equity interests in the VIEs that are in excess of the original registered capital that they contributed to the VIEs.Based on these contractual agreements, the Group believes that the PRC domestic companies as described above should be considered as VIEs because the equityholders do not have significant equity at risk nor do they have the characteristics of a controlling financial interest. Given that the Group is the primary beneficiaryof these PRC domestic companies, the Group believes that these VIEs should be consolidated based on the structure as described above.Under the contractual arrangements with the consolidated VIEs, the Group has the power to direct activities of the consolidated VIEs and can have assetstransferred out of the consolidated VIEs under its control. Therefore, the Group considers that there is no asset in any of the consolidated VIEs that can be usedonly to settle obligations of the consolidated VIEs, except for registered capital and PRC statutory reserves. As all consolidated VIEs are incorporated as limitedliability companies under the Company Law of the PRC, creditors of the consolidated VIEs do not have recourse to the general credit of the Group for any of theliabilities of the consolidated VIEs.Currently there is no contractual arrangement which requires the Group to provide additional financial support to the consolidated VIEs. However, as the Groupconducts its businesses primarily based on the licenses and approvals held by its consolidated VIEs, the Group has provided and will continue to provide financialsupport to the consolidated VIEs considering the business requirements of the consolidated VIEs, as well as the Group’s own business objectives in the future.F10Use of estimatesThe preparation of financial statements in conformity with US GAAP requires the Group to make estimates and assumptions that affect the reported amounts ofassets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expensesduring the reporting period. The most significant estimates are the allowance for doubtful accounts, the useful lives of property and equipment and intangibleassets, impairment of longlived assets and goodwill. Actual results could differ from those estimates.Fair value measurementsFair value is the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at themeasurement date under current market conditions. When determining the fair value measurements for assets and liabilities required or permitted to be recorded atfair value, the Group considers the principal or most advantageous market in which it would transact and it considers assumptions that market participants woulduse when pricing the asset or liability.Authoritative literature provides a fair value hierarchy which prioritizes the inputs to valuation techniques used to measure fair value into three broad levels. Thelevel in the hierarchy within which the fair value measurement in its entirety falls is based upon the lowest level of input that is significant to the fair valuemeasurement as follows:Level 1Level 1 applies to assets or liabilities for which there are quoted prices in active markets for identical assets or liabilities.Level 2Level 2 applies to assets or liabilities for which there are inputs other than quoted prices included within Level 1 that are observable for the asset or liability such asquoted prices for similar assets or liabilities in active markets; quoted prices for identical assets or liabilities in markets with insufficient volume or infrequenttransactions (less active markets); or modelderived valuations in which significant inputs are observable or can be derived principally from, or corroborated by,observable market data.Level 3Level 3 applies to assets or liabilities for which there are unobservable inputs to the valuation methodology that are significant to the measurement of the fair valueof the assets or liabilities.F11Cash and cash equivalentsCash and cash equivalents primarily consist of cash, money market funds, investments in interest bearing demand deposit accounts, time deposits and highly liquidinvestments with original maturities of three months or less from the date of purchase and are stated at cost which approximates their fair value. The Group has nocash equivalents.Accounts receivable, net of allowanceAccounts receivable are recognized and carried at the original invoiced amount less an allowance for any potential uncollectible amounts. An estimate for doubtfuldebts is made when collection of the full amount is no longer probable. Bad debts are written off as incurred. The Group generally does not require collateral from itscustomers.The Group maintains allowances for doubtful accounts for estimated losses resulting from the failure of customers to make payments on time. The Group reviews theaccounts receivable on a periodic basis and makes specific allowances when there is doubt as to the collectability of individual balances. In evaluating thecollectability of individual receivable balances, the Group considers many factors, including the age of the balance, the customer’s payment history, its currentcreditworthiness and current economic trends.Property and equipment, netProperty and equipment are carried at cost less accumulated depreciation. Depreciation is calculated on a straightline basis over the following estimated usefullives:Wifi equipment– 3 yearsOffice equipment– 3 to 5 yearsVehicles– 5 yearsCosts of repairs and maintenance are expensed as incurred and asset improvements are capitalized. The gain or loss on disposal of property and equipment is thedifference between the net sales proceeds and the carrying amount of the relevant assets and is recognized in the consolidated income statement. When propertyand equipment are retired or otherwise disposed of, the cost and accumulated depreciation are removed from the accounts and any resulting gain or loss is includedin the results of operations for the respective period.Construction in progressAssets under construction are not depreciated until construction is completed and the assets are ready for their intended use.F12Intangible assetsIntangible assets with finite lives are amortized using the straightline method over the estimated economic lives.Intangible assets have weighted average economic lives from the date of purchase as follows:Software– 5 yearsTrademarks– 10 yearsGoodwillThe Group assesses goodwill for impairment in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”)subtopic 35020, Intangibles—Goodwill and Other: Goodwill (“ASC 35020”), which requires that goodwill to be tested for impairment at the reporting unit level atleast annually and more frequently upon the occurrence of certain events, as defined by ASC 35020.We have the option to assess qualitative factors first to determine whether it is necessary to perform the twostep test in accordance with ASC 35020. If we believe,as a result of the qualitative assessment, that it is morelikelythannot that the fair value of the reporting unit is less than its carrying amount, the twostepquantitative impairment test described below is required. Otherwise, no further testing is required. In the qualitative assessment, we consider primary factors such asindustry and market considerations, overall financial performance of the reporting unit, and other specific information related to the operations. In performing thetwostep quantitative impairment test, the first step compares the carrying amount of the reporting unit to the fair value of the reporting unit based on either quotedmarket prices of the ordinary shares or estimated fair value using a combination of the income approach and the market approach. If the fair value of the reportingunit exceeds the carrying value of the reporting unit, goodwill is not impaired and we are not required to perform further testing. If the carrying value of the reportingunit exceeds the fair value of the reporting unit, then we must perform the second step of the impairment test in order to determine the implied fair value of thereporting unit’s goodwill. The fair value of the reporting unit is allocated to its assets and liabilities in a manner similar to a purchase price allocation in order todetermine the implied fair value of the reporting unit goodwill. If the carrying amount of the goodwill is greater than its implied fair value, the excess is recognized asan impairment loss.In 2017, we performed a qualitative assessment for goodwill. Based on the requirements of ASC35020, we evaluated all relevant factors, including but not limited tomacroeconomic conditions, industry and market conditions, financial performance. We weighed all factors in their entirety and concluded that it was not morelikelythannot the fair value was less than the carrying amount of the reporting unit, and further impairment testing on goodwill was unnecessary as of December 31, 2017and 2016.F13Impairment or disposal of longlived assetsLonglived assets other than goodwill are included in impairment evaluations when events and circumstances exist that indicate the carrying value of these assetsmay not be recoverable. In accordance with FASB ASC 360, Property, Plant and Equipment, the Group assesses the recoverability of the carrying value of longlivedassets by first grouping its longlived assets with other assets and liabilities at the lowest level for which identifiable cash flows are largely independent of the cashflows of other assets and liabilities (the asset group) and, secondly, estimating the undiscounted future cash flows that are directly associated with and expected toarise from the use of and eventual disposition of such asset group. If the carrying value of the asset group exceeds the estimated undiscounted cash flows, theGroup recognizes an impairment loss to the extent the carrying value of the longlived asset exceeds its fair value. The Group determines fair value through quotedmarket prices in active markets or, if quotations of market prices are unavailable, through the performance of internal analysis using a discounted cash flowmethodology or obtains external appraisals from independent valuation firms. The undiscounted and discounted cash flow analyses are based on a number ofestimates and assumptions, including the expected period over which the asset will be utilized, projected future operating results of the asset group, discount rateand longterm growth rate.As of December 31, 2017 and 2016, the Group assessed the impairment of its longlived assets and concluded that there was no impairment indication.Business combinationWe account for business combinations using the purchase method of accounting in accordance with FASB ASC topic 805, Business combinations. The purchasemethod accounting requires that the consideration transferred be allocated to the assets, including separately identifiable assets and liabilities we acquired, basedon their estimated fair values. The consideration transferred in an acquisition is measured as the aggregate of the fair values at the date of exchange of the assetsgiven, liabilities incurred, and equity instruments issued as well as the contingent considerations and all contractual contingencies as of the acquisition date. Thecosts directly attributable to the acquisition are expensed as incurred. Identifiable assets, liabilities and contingent liabilities acquired or assumed are measuredseparately at their fair value as of the acquisition date, irrespective of the extent of any noncontrolling interests. The excess of (i) the total of cost of acquisition, fairvalue of the noncontrolling interests and acquisition date fair value of any previously held equity interest in the acquiree over (ii) the fair value of the identifiable netassets of the acquiree, is recorded as goodwill. If the cost of acquisition is less than the fair value of the net assets of the subsidiary acquired, the difference isrecognized directly in earnings.Revenue recognitionThe Group recognizes revenue in accordance with FASB ASC topic 605, Revenue Recognition (“ASC 605”). Revenue is recognized when the following four revenuerecognition criteria are met: (i) persuasive evidence of an arrangement exists, (ii) delivery has occurred or services have been provided, (iii) the selling price is fixed ordeterminable, and (iv) collectability is reasonably assured.F14Displaybased online advertising servicesThe Group provides displaybased online advertising services to customers by integrating text description, image and video, and displaying the advertisements in aprominent position of LuoKuang Application. The Group recognizes revenue in accordance with ASC 605, over the contractual term based on the agreements andconfirmation letters signed by both parties, commencing on the date the customer’s advertisement is displayed on the Group’s platform.Foreign currency translationThe functional and reporting currency of the Company and the Company’s subsidiaries domiciled in BVI and Hong Kong are the United States dollar (“U.S. dollar”).The financial records of the Company’s other subsidiaries and VIEs located in the PRC are maintained in their local currency, the Chinese Renminbi (“RMB”), whichare the functional currency of these entities.Monetary assets and liabilities denominated in currencies other than the functional currency are translated into the functional currency at the rates of exchangeruling at the balance sheet date. Transactions in currencies other than the functional currency during the year are converted into the functional currency at theapplicable rates of exchange prevailing when the transactions occurred. Transaction gains and losses are recognized in the statements of operations.The Company’s entities with a functional currency of RMB translate their operating results and financial position into the U.S. dollar, the Company’s reportingcurrency. Assets and liabilities are translated using the exchange rates in effect on the balance sheet date. Revenues, expenses, gains and losses are translatedusing the average rate for the year. Retained earnings and equity are translated using the historical rate. Translation adjustments are reported as cumulativetranslation adjustments and are shown as a separate component of other comprehensive income.Income taxesDeferred income taxes are recognized for temporary differences between the tax basis of assets and liabilities and their reported amounts in the financial statements,net operating loss carry forwards and credits, by applying enacted statutory tax rates applicable to future years. Deferred tax assets are reduced by a valuationallowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Current income taxesare provided for in accordance with the laws and regulations applicable to the Group as enacted by the relevant tax authorities.The impact of an uncertain income tax position on the income tax return must be recognized at the largest amount that is morelikelythan not to be sustained uponaudit by the relevant tax authorities. An uncertain income tax position will not be recognized if it has less than a 50% likelihood of being sustained. Additionally, theGroup classifies the interest and penalties, if any, as a component of the income tax expense. For years ended December 31, 2017 and 2016, the Group did not haveany material interest or penalties associated with tax positions nor did the Group have any significant unrecognized uncertain tax positions.F15Related partiesParties are considered to be related to the Company if the parties, directly or indirectly, through one or more intermediaries, control, are controlled by, or are undercommon control with the Company. Related parties also include principal owners of the Company, its management, members of the immediate families of principalowners of the Company and its management and other parties with which the Company may deal with if one party controls or can significantly influence themanagement or operating policies of the other to an extent that one of the transacting parties might be prevented from fully pursuing its own separate interests. TheCompany discloses all significant related party transactions.LeasesLeases have been classified as either capital or operating leases. Leases that transfer substantially all the benefits and risks incidental to the ownership of assets areaccounted for as if there was an acquisition of an asset and incurrence of an obligation at the inception of the lease. All other leases are accounted for as operatingleases wherein rental payments are expensed as incurred.When the Group is the lessor, minimum contractual rental from leases are recognized on a straightline basis over the noncancelable term of the lease. With respectto a particular lease, actual amounts billed in accordance with the lease during any given period may be higher or lower than the amount of rental revenue recognizedfor the period. Straightline rental revenue commences when the customer assumes control of the leased premises. Accrued straightline rents receivable representsthe amount by which straightline rental revenue exceeds rents currently billed in accordance with lease agreements. Contingent rental revenue is accrued when thecontingency is removed.Advertising costsAdvertising costs include expenses associated with direct marketing. All advertising costs are expensed as incurred and included in selling and marketing expenses.During the years ended December 31, 2017 and 2016, advertising costs amounted to $23,171,170 and $4,537,653, respectively.Comprehensive lossComprehensive loss includes net loss and foreign currency translation adjustments and is presented net of tax. The tax effect is nil for the two years endedDecember 31, 2017 and 2016 in the consolidated statements of comprehensive loss.Concentration of credit riskFinancial instruments that potentially expose the Group to concentrations of credit risk consist primarily of cash and accounts receivable. The Group places its cashwith financial institutions with highcredit rating and quality in China. For the year ended December 31, 2017, two customers accounted for over 10% of totalrevenue. For the year ended December 31, 2016, four customers accounted for over 10% of total revenue. At December 31, 2017 and 2016, the Group had credit riskexposure of uninured cash in banks of approximately $72,379 and $83,843, respectively.F16NOTE 3 – INCOME TAXAt December 31, 2017 and 2016, the Group had an unused net operating loss carryforwards of approximately $25,123,726 and $20,081,239, respectively, for income taxpurposes, which expires between 2018 to 2022 and between 2017 to 2021, respectively. At December 31, 2017 and 2016, these net operating losses carryforwards mayresult in future income tax benefits of approximately $5,043,944 and $4,008,863, respectively, however, because realization is uncertain at this time, a valuationallowance in the same amount has been established. Deferred income taxes reflect the net effects of temporary differences between the carrying amounts of assetsand liabilities for financial reporting purposes and the amounts used for income tax purposes.Significant components of the Group’s deferred tax liabilities and assets of December 31, 2017 and 2016 are as follows:December 31,December 31,20172016Deferred tax liabilities$$Deferred tax assetNet operating loss carryforward5,043,9444,008,863Valuation allowance(5,043,944)(4,008,863)Net deferred tax assetMovement of valuation allowanceDecember 31,2017December 31,2016At the beginning of the year$4,008,863$2,049,352Current year addition823,9702,159,518Expired(61,411)Exchange difference272,522(200,007)At the end of the year5,043,9444,008,863The Company is not subject to taxation in BVI under the current BVI law. Subsidiaries operating in the PRC are subject to PRC Enterprise Income Tax at the statutoryrate of 25% for the years ended December 31, 2017 and 2016. Subsidiaries operating in Hong Kong are subject to Hong Kong income taxes at a rate of 16.5% for theyears ended December 31, 2017 and 2016.F17A reconciliation of the income tax expense to the amount computed by applying the current statutory tax rate to the loss before income taxes in the consolidatedstatements of comprehensive income is as follows:December 31,December 31,20172016Loss before income taxes$(6,810,454)$(13,049,031)Tax loss at statutory tax rate(1,655,174)(3,386,822)Nondeductible items6,729,2551,712,857Nontaxable items(3,789,956)(674,189)Change in valuation allowance823,9702,159,518Tax benefits(2,108,095)188,636Income tax expensesNOTE 4 – ACCOUNTS RECEIVABLEAt December 31, 2017 and 2016, accounts receivable consisted of the following:December 31,December 31,20172016Accounts receivable$10,406,602$2,098,946Less: allowance for doubtful accounts676,977233,110$9,729,625$1,865,836NOTE 5 – OTHER RECEIVABLESAt December 31, 2017 and 2016, other receivables consisted of the following:December 31,2017December 31,2016Advances to suppliers$339,701$181,472VAT recoverable (1)3,033,0651,662,805Other5,048,189485,152$2,376,745$2,287,934(1)The balance of advanced VAT represents input VAT available for deducting the amount of VAT paid in the future. During the years ended December 31, 2017and 2016, the Group purchased a large amount of WiFi equipment for deployments, which generated related input VAT approved by tax authority.F18NOTE 6 – AMOUNTS DUE FROM RELATEDPARTIESAt December 31, 2017 and 2016, amounts due from related parties consisted of the following:Name of related partyDecember 31,2017December 31,2016C Media Limited (1)$11,760,692$Ya Tuo Ji International Consultancy (Beijing) Limited (2)204,412183,811(1)C Media Limited is the parent company of LK Technology. The Group expects the amounts due from the related party will be returned to the Group within oneyear.(2)Ya Tuo Ji is a company controlled by the spouse of a major shareholder of C Media Limited. The loan is unsecured, interestfree and repayable on January 5,2019.NOTE 7 – PROPERTY AND EQUIPMENTAt December 31, 2017 and 2016, property and equipment consisted of the following:December 31,December 31,Useful life20172016WiFi equipment3 Years$8,711,424$8,367,678Vehicles5 Years43,246Office and other equipment3 – 5 Years170,242416,434Constructioninprogress2,166,4522,652,28811,048,11811,479,646Less: accumulated depreciation(6,003,246)(3,708,619)$5,044,872$7,771,027For the years ended December 31, 2017 and 2016, depreciation expense amounted to $2,628,884 and $2,474,434, respectively, of which $2,423,655 and $2,194,582,respectively, was included in cost of revenue, $117,648 and $121,740, respectively, was included in selling and marketing expenses and the remainder was included ingeneral and administrative expense.Included in constructioninprogress are WiFI equipment under construction.F19NOTE 8 – GOODWILLIn September of 2014, Zhong Chuan Shi Xun acquired a 100% interest in Zhong Chuan Rui You for a consideration of $7,391,894 (RMB48,000,000). Zhong Chuan RuiYou is primarily engaged in on train WiFi business, deploying WiFi equipment on trains and providing passengers with entertainment and information services ontrains. The book value of the identifiable net assets of Zhong Chuan Rui You was $151,958 (RMB963,000) and a goodwill of $7,239,936 was recorded.NOTE 9 – ACCRUED LIABILITIES AND OTHER PAYABLESAt December 31, 2017 and 2016, accrued liabilities and other payables consisted of the following:December 31,December 31,20172016Deferred revenue$2,326,406$302,735Accrued payroll143,998316,458Other taxes payable3,544,469461,699Other payable852,384686,526Other loans6,095,6559,562,915$12,962,912$11,329,613Deferred revenue represents prepayments from customers for advertising service and is recognized as revenue when the advertising services are rendered.Other loans of $939,555 and $57,416, respectively, as of December 31, 2017 and 2016, are unsecured, bear daily interest at 0.04% and are repayable on demand.NOTE 10 – AMOUNTS DUE TO RELATED PARTIESAt December 31, 2017 and 2016, amounts due to related parties consisted of the following:December 31,December 31,Name of related party20172016Mr. Song Xuesong (“Mr. Song”) (1)$2,921,639$10,669,325C Media Limited (2)$$4,855,236Thumb Beijing Branch (3)$612,103$576,560Thumb Shenzhen Branch (3)$29,941$28,202(1) The Group’s CEO(2) C Media Limited, the parent company.(3) Thumb Beijing and Shenzhen Branch are controlled by the spouse of Mr. Song.Amounts due to related parties are shortterm in nature, noninterest bearing, unsecured and payable on demand.F20NOTE 11 – RETIREMENT AND WELFARE BENEFITSThe Group’s fulltime employees are entitled to staff welfare benefits including medical care, casualty, housing benefits, education benefits, unemployment insuranceand pension benefits through a PRC governmentmandated multiemployer defined contribution plan. The Group is required to accrue the employerportion forthese benefits based on certain percentages of the employees’ salaries. The total provision for such employee benefits of $170,227 and $353,033 during the yearsended December 31, 2017 and 2016, respectively, of which $23,392 and $30,455, respectively, was charged to cost of revenue, $48,957 and $97,408, respectively wascharged to selling and marketing expenses, $49,717 and $86,934, respectively, was charged to general and administrative expenses and $48,161 and $138,236,respectively was charged to research and development expenses. The Group is required to make contributions to the plan out of the amounts accrued for all staffwelfare benefits except for education benefits. The PRC government is responsible for the staff welfare benefits including medical care, casualty, housing benefits,unemployment insurance and pension benefits to be paid to these employees.NOTE 12 – STATUTORY RESERVESAs stipulated by the relevant law and regulations in the PRC, the Group’s subsidiaries and VIEs in the PRC are required to maintain a nondistributable statutorysurplus reserve. Appropriations to the statutory surplus reserve are required to be made at not less than 10% of profit after taxes as reported in the subsidiaries’statutory financial statements prepared under the PRC GAAP. Once appropriated, these amounts are not available for future distribution to owners or shareholders.Once the general reserve is accumulated to 50% of the subsidiaries’ registered capital, the subsidiaries can choose not to provide more reserves. The statutoryreserve may be applied against prior year losses, if any, and may be used for general business expansion and production and increase in registered capital of thesubsidiaries. The Group allocated $Nil to statutory reserves during the years ended December 31, 2017 and 2016, respectively. The statutory reserves cannot betransferred to the Company in the form of loans or advances and are not distributable as cash dividends except in the event of liquidation.NOTE 13 – COMMITMENTS AND CONTINGENCIESOperating leasesWe have entered into operating lease agreements primarily for our office spaces in China. These leases expire through 2018 and are renewable upon negotiation.Future minimum rental payment required under the Office Lease is as follows:Year ending December 31:Amount2018$122,138F21Contingencies(a) Litigation with Shanghai Fusheng Weier Intelligent Control Technology Co., Ltd.On January 22, 2016, Zhong Chuan Rui You and Shanghai Fusheng Weier Intelligent Control Technology Co., Ltd. (“Fusheng Weier”) signed a contract forequipment of $1,652,842 (RMB10,800,000). Since Zhong Chuan Rui You did not make the payments of $1,126,381 (RMB7,360,000) on the due dates, Fusheng Weierfiled a lawsuit against Zhong Chuan Rui You in Shanghai Xuhui District People’s Court on October 8, 2016. On March 9, 2017, Xuhui District People’s Court issuedthe verdict requiring Zhong Chuan Rui You to pay the overdue debts. In August 2017, C Media Limited made the payment of $512,075 (RMB3,346,000). Theremaining balance has been accrued in accounts payable. The payment schedule for the remaining balance is being negotiated by the two parties. On February 5,2018, a hearing was held adding Zhong Chuan Shi Xun as a defendant. The Group plans to settle the remaining balance within one year.(b) Lawsuit with Gansu Jinlun Culture Media Co., Ltd.On August 22, 2014, Zhong Chuan Rui You and Gansu Jinlun Culture Media Co., Ltd. (“Gansu Jinlun”) signed a “Lanzhou Railway Bureau Airconditioned Train WiFi Network System Advertising Operation Rights Agreement” for advertising on 72 trains of $1,467,880 (RMB9,604,633). Due to the dispute on the projectimplementation, Zhong Chuan Rui You did not pay the advertising fee. On August 23, 2017, Gansu Jinlun filed a lawsuit with Gansu Intermediate People’s Court. OnDecember 19, 2017, Gansu Intermediate People’s Court issued a verdict, ruling that Zhong Chuan Rui You settle the overdue advertising fee. Since only 18 out of 72trains have been installed with Wifi network system, Zhong Chuan Rui You disputed and appealed to the verdict. The next court trial date has not yet beendetermined.C Media and Gansu Jinlun are negotiating a potential settlement to resume the contract. According to the legal counsel, it is probable that the settlement will amountto approximately $459,000 (RMB3,000,000); therefore, this amount has been accrued in accounts payable.(c) Litigation with Shenzhen Hua Xun Fang Zhou Technology Co., Ltd.On June 16, 2015, Zhong Chuan Rui You signed a cooperation agreement with Shenzhen Hua Xun Fang Zhou Technology Co., Ltd. (“Shenzhen Hua Xun”) andXuesong Song, a major shareholder of C Media Limited. Pursuant to this agreement, Zhong Chuan Rui You procures equipment from Shenzhen Hua Xun. XuesongSong acts as a joint liability guarantor for the entire debts of Zhong Chuan Rui You under this agreement. As Zhong Chuan Rui You did not make the payments onthe due dates, Shenzhen Hua Xun filed a lawsuit with Shenzhen Baoan District People’s Court on May 31, 2016. On November 1, 2016, Zhong Chuan Rui You,Xuesong Song and Shenzhen Hua Xun reached a settlement in Shenzhen Baoan District People’s Court to settle $1,735,389 (RMB11,355,000) in four instalments. OnDecember 30, 2017, the debt was assigned to C Media Limited.NOTE 14 – SUBSEQUENT EVENTThe Group has evaluated all events or transactions that occurred after December 31, 2017 through May 25, 2018, which is the date that the financial statements wereavailable to be issued.F22EX1.1 2 f20f2017ex11_luokung.htm AMENDED AND RESTATED MEMORANDUM OF ASSOCIATION AND ARTICLES OF ASSOCIATION OF LUOKUNGTECHNOLOGY CORP., DATED AUGUST 20, 2018, AND AS CURRENTLY IN EFFECTExhibit 1.1BC NO: 1553620British Virgin IslandsThe BVI Business Companies Act, 2004(No. 16 of 2004)Memorandum of AssociationandArticles of AssociationofLuokung Technology Corp.Incorporated the 24th day of October, 2009Amended and Restated the 11th Day of December 2009Amended and Restated the 17th Day of December 2009Amended and Restated the 25th Day of March 2010Amended and Restated the 21st day of May 2018Amended and restated the 17 August 2018Amended and restated the 21 August 2018Portcullis (BVI) LimitedPortcullis Chambers4th Floor Ellen Skelton Building3076 Sir Francis Drake HighwayRoad Town, TortolaBritish Virgin IslandsTERRITORY OF THE BRITISH VIRGIN ISLANDSTHE BVI BUSINESS COMPANIES ACT, 2004(No. 16 of 2004)MEMORANDUM OF ASSOCIATIONOFLuokung Technology Corp.NAME1.The name of the Company is Luokung Technology Corp.TYPE OF COMPANY2.The Company is a company limited by shares.REGISTERED OFFICE3.The first Registered Office of the Company is the offices of Portcullis TrustNet (BVI) Limited, Portcullis TrustNet Chambers, P.O. Box 3444, Road Town,Tortola, British Virgin Islands, the office of the registered agent.3.1The current Registered Office of the Company is Portcullis Chambers, 4th Floor Ellen Skelton Building, 3076 SirFrancis Drake Highway, Road Town,Tortola, British Virgin Islands VG1110.REGISTERED AGENT4.The first Registered Agent of the Company is Portcullis TrustNet (BVI) Limited of Portcullis TrustNet Chambers, P.O. Box 3444, Road Town, Tortola,British Virgin Islands.4.1The current Registered Agent of the Company is Portcullis (BVI) Ltd of Portcullis Chambers, 4th Floor Ellen Skelton Building, 3076 Sir Francis DrakeHighway, Road Town, Tortola, British Virgin Islands VG1110.AUTHORISED NUMBER OF SHARES5.The Company is authorised to issue a maximum of 251,000,000 shares.CLASSES, NUMBER AND PAR VALUE OF SHARES6.As at the date of adoption of this memorandum, the Company is authorised to issue (a) 250,000,000 ordinary shares without par value (“OrdinaryShares”); and (b) 1,000,000 preferred shares without par value (“Preferred Shares”).FRACTIONAL SHARES7.The Company may issue fractions of a share and a fractional share shall have the same corresponding fractional liabilities, limitations, preferences,privileges, qualifications, restrictions, rights and other attributes of a whole share of the same class or series of shares.RIGHTS, PRIVILEGES, RESTRICTIONS AND CONDITIONS ATTACHING TO SHARES8.(1)Subject to the memorandum and articles of association (and, for greater clarity, without prejudice to any special rights conferred thereby on theholders of any other shares), an Ordinary Share of the Company confers on the holder;(a)the right to one vote at a meeting of the members of the Company or on any Resolution of Members;(b)the right to an equal share in any Distribution paid by the Company; and(c)the right to an equal share in the distribution of the surplus assets of the Company on a winding up.(2)Subject to the memorandum and articles of association (and, for greater clarity, without prejudice to any special rights conferred thereby on theholders of any other shares), a Preferred Share of the Company confers on the holder;(a)the right to 399 votes at a meeting of the members of the Company or on any Resolution of Members;(b)the right to an equal share in any Distribution paid by the Company;(c)the right to an equal share in the distribution of the surplus assets of the Company on its liquidation.(d)be freely transferable, in whole or in part, by Mr. Xuesong Song to any third party through one or more Private Transactions, subject toApplicable Law; and(e)be freely transferable, in whole or in part, by Mr. Xuesong Song to any third party through one or more Public Transactions, subject to ApplicableLaw and Automatic Conversion of such Preferred Share(s) into Ordinary Share(s).(3)The directors may at their discretion by resolution of directors redeem, purchase or otherwise acquire all or any of the shares in the Companysubject to the Articles..VARIATION OF CLASS RIGHTS9.If at any time the issued shares are divided into different classes or series of shares, the rights attached to any class or series (unless otherwise providedby the terms of issue of the shares of that class or series) may, whether or not the Company is being wound up, be varied with the consent in writing of theholders of not less than threefourths of the issued shares of that class or series and of the holders of not less than threefourths of the issued shares ofany other class or series of shares which may be affected by such variation.RIGHTS NOT VARIED BY THE ISSUE OF SHARES PARI PASSU10.The rights conferred upon the holders of the shares of any class issued with preferred or other rights shall not, unless otherwise expressly provided by theterms of issue of the shares of that class, be deemed to be varied by the creation or issue of further shares ranking pari passu therewith.CAPACITY AND POWERS11.Subject to the Act, any other British Virgin Islands legislation and paragraph 12 below the Company has, irrespective of corporate benefit:(a)full capacity to carry on or undertake any business or activity, do any act or enter into any transaction;(b)for the purposes of paragraph (a), full rights, powers and privileges; and(c)full powers to issue shares with preemptive rights, subject to the Articles.2LIMITATIONS ON THE COMPANY’S BUSINESS12.For the purposes of section 9(4) of the Act the Company may not;(a)carry on banking or trust business, unless it is licensed to do so under the Banks and Trust Companies Act, 1990;(b)carry on business as an insurance or reinsurance company, insurance agent or insurance broker, unless it is licensed under the Insurance Act1994;(c)carry on business of company management, unless it is licensed under the Company Management Act, 1990;(d)carry on the business of providing the registered office or the registered agent for companies incorporated in the British Virgin Islands;(e)carry on the business as a mutual fund, manager of mutual funds or administrator of mutual funds unless it is recognized or licenced as the casemay be under the Mutual Funds Act 1996; or(f)carry on any other business that gives rise to a licencing requirement under any law for the time being in force in the British Virgin Islands unlessit is licenced, regulated, recognised or otherwise approved pursuant to such law.REGISTERED SHARES AND PROHIBITION ON ISSUE OF BEARER SHARES13.Shares in the Company may only be issued as registered shares. The issue of shares to bearer is prohibited.PROHIBITION ON EXCHANGE AND CONVERSION OF REGISTERED SHARES TO BEARER SHARES14.The exchange or conversion of registered shares to bearer shares is prohibited.TRANSFER OF REGISTERED SHARES15.Subject to the provisions of the Articles the Company may upon receipt of an instrument of transfer enter the name of the transferee in the register ofmembers subject to the prior or simultaneous approval of the Company as evidenced by a resolution of directors or by a resolution of members. Subject toany resolution of the members to the contrary, the directors may resolve by resolution of directors to refuse or delay the registration of the transfer forreasons that shall be specified in the resolution of directors.AMENDMENT OF MEMORANDUM AND ARTICLES OF ASSOCIATION16.1The Company may amend its Memorandum or Articles by a resolution of members or by a resolution of directors provided that the directors shall not havethe power to amend the Memorandum or Articles;(a)to restrict the rights or powers of the members to amend the Memorandum or Articles;(b)to change the percentage of members required to pass a resolution to amend the Memorandum or Articles;(c)in circumstances where the Memorandum or Articles cannot be amended by the members; or(d)to Clauses 8, 9, 10 or this Clause 12.16.2No amendment may be made to Regulation 76 of the Articles unless approved by an affirmative vote of the holders of 66 2/3 percent or more of theoutstanding votes of the shares entitled to vote thereon.3DEFINITIONS17.The meanings of words in this Memorandum are as defined in the Articles.We, Portcullis TrustNet (BVI) Limited of Portcullis TrustNet Chambers, P.O. Box 3444, Road Town, Tortola, British Virgin Islands for the purpose ofincorporating a BVI Business Company under the laws of the British Virgin Islands hereby sign this Memorandum of Association the 27th day of October,2009.Incorporator/s/ Nicole WheatleyPortcullis TrustNet (BVI) LimitedPortcullis TrustNet ChambersP.O. Box 3444Road Town, TortolaBritish Virgin Islands(Sgd. Nicole Wheatley)4TERRITORY OF THE BRITISH VIRGIN ISLANDSTHE BVI BUSINESS COMPANIES ACT, 2004(No. 16 of 2004)ARTICLES OF ASSOCIATIONOFLuokung Technology Corp.PRELIMINARY1.In these Articles, if not inconsistent with the subject or context, the words and expressions standing in the first column of the following table shall bear themeanings set opposite them respectively in the second column thereof.WordsMeaningApplicable Lawall Laws, including those of a jurisdiction in or outside of the United States, applicable to the Private orPublic Transactions.Actthe BVI Business Companies Act, 2004 (No 16 of 2004.) including any modification, extension, reenactment or renewal thereof and any regulations made thereunder.Articlesthese Articles of Association as originally framed or as from time to time amended.Automatic Conversioneach Preferred Share shall be automatically converted at any time after issue and without the payment ofany additional sum into an equal number of fully paid Ordinary Shares upon the conclusion of anytransfer by Mr. Xuesong Song to any third party through one or more Public Transactions.Designated Stock Exchangeeither the Nasdaq National Stock Market, Inc. or such other exchange or quotation bureau on which, theCompany’s Securities are listed or traded; provided that until the Securities are listed on any such“Exchange” the rules of any such Designated Stock Exchange shall be inapplicable to these Articles.directora director of the Company.distributionin relation to a distribution by a company to a member, means(i)the direct or indirect transfer of an asset, other than the Company’s own shares, to or forthe benefit of the member or(ii)the incurring of a debt to or for the benefit of a member,in relation to shares held by a member, and whether by means of a purchase of an asset, the purchase,redemption or other acquisition of shares, a transfer of indebtedness or otherwise, and includes adividend.Independent Directora person who meets the then current requirements for “independence” of the applicable rules andregulations of the U.S. Securities and Exchange Commission and the Designated Stock Exchange.5member or shareholderin relation to the Company, means a person whose name is entered in the register of members as theholder of one or more shares, or fractional shares, in the Company.Memorandumthe Memorandum of Association of the Company as originally framed or as from time to time amended.Mr. Xuesong Songthe founder, a director and Chairman of LK Technology Ltd.Ordinary Sharesissued or unissued ordinary shares of no par value of the Company having the rights, preferences andprivileges set out in the MemorandumPersonAn individual, a corporation, a trust, trustee, the estate of a deceased individual, a partnership or anunincorporated association of persons.Preferred Sharesissued or unissued preferred shares of no par value of the Company having the rights, preferences andprivileges set out in the MemorandumPrivate Transactionstransactions that are not considered as a Public Transaction.Public Transactionstransactions through any national securities exchanges and/or through the automated quotation systemincluding but not limited to NASDAQ, NYSE (including NYSE American) or OTC Markets, or anytransaction executed by the broker or with a market maker.Related Party(a) any director, officer and employee of the Company; (b) any family member of such director, officer andemployee; and (c) any entity (e.g. a corporation, partnership, or trust) controlled by or set up for thebenefit of a director, officer or employee, or a family member of such director, officer or employee.Relevant SystemA facility for the electronic transfer of uncertificated securities administered by The Depository TrustCompany or such other Person regulated by the SEC.resolution of directors(a)A resolution approved at a duly convened and constituted meeting of directors of the Companyor of a committee of directors of the Company by the affirmative vote of a simple majority of thedirectors present at the meeting who voted and did not abstain; or(b)a resolution consented to in writing by a simple majority of the directors or of all members of thecommittee, as the case may be;except that where a director is given more than one vote, he shall be counted by the number ofvotes he casts for the purpose of establishing a majority.resolution of membersSubject to the provisions of the Memorandum and Articles means:(a)A resolution approved at a duly convened and constituted meeting of the members of theCompany by the affirmative vote of(i)a majority of in excess of 50% of the votes of the shares entitled to vote and voting onthe resolution, or(ii)a majority of in excess of 50% of the votes of each class or series of shares entitled tovote as a class or series and voting on the resolution and a majority of in excess of 50%of the votes of the remaining shares entitled to vote and voting on the resolution; or6(b)a resolution consented to in writing by(i)an absolute majority of the votes of shares entitled to vote thereon, or(ii)an absolute majority of the votes of each class or series of shares entitled to votethereon as a class or series and of an absolute majority of the votes of the remainingshares entitled to vote thereon.SealAny Seal which has been duly adopted as the common seal of the Company.SECThe United States Securities and Exchange Commission.Securitiesshares and debt obligations of every kind, and options, warrants and rights to acquire shares, or debtobligations.SharesOrdinary Shares and/or Preferred Shares, as the case may be.solvency testa company satisfies the solvency test if;(i)the value of the company’s assets exceeds its liabilities, and(ii)the company is able to pay its debts as they fall due.treasury sharesshares in the Company that were previously issued but were repurchased, redeemed or otherwiseacquired by the Company and not cancelled.2.“Written” or any term of like import includes words typewritten, printed, painted, engraved, lithographed, photographed or represented or reproduced byany mode of reproducing words in a visible form, including telex, facsimile, telegram, cable or other form of writing produced by electronic communication.3.Save as aforesaid any words or expressions defined in the Act shall bear the same meaning in these Articles.4.Whenever the singular or plural number, or the masculine, feminine or neuter gender is used in these Articles, it shall equally, where the context admits,include the others.5.A reference in these Articles to voting in relation to shares shall be construed as a reference to voting by members holding the shares except that it is thevotes allocated to the shares that shall be counted and not the number of members who actually voted and a reference to shares being present at a meetingshall be given a corresponding construction.6.A reference to money in these Articles is, unless otherwise stated, a reference to the currency in which shares in the Company shall be issued according tothe provisions of the Memorandum.7REGISTERED SHARES7.Every member holding registered shares in the Company shall be entitled to a certificate signed by a director or officer of the Company or such otherperson who may be authorised from time to time by resolution of directors or under the Seal, with or without the signature of any director of the Company,specifying the share or shares held by him and the signature of the director or officer or person so authorised and the Seal may be facsimiles.8.Any member receiving a share certificate for registered shares shall indemnify and hold the Company and its directors and officers harmless from any lossor liability which it or they may incur by reason of any wrongful or fraudulent use or representation made by any person by virtue of the possessionthereof. If a share certificate for registered shares is worn out or lost it may be renewed on production of the worn out certificate or on satisfactory proof ofits loss together with such indemnity as may be required by a resolution of directors.9.If several persons are registered as joint holders of any shares, any one of such persons may give an effectual receipt for any distribution payable inrespect of such shares.10.Nothing in these Articles shall require title to any shares or other Securities to be evidenced by a certificate if the Act and the rules of the Designated StockExchange permit otherwise.SHARES AND ISSUED SHARES11.Subject to the provisions of these Articles and, if applicable, the rules of the Designated Stock Exchange, and any resolution of members, the directors ofthe Company may, without limiting or affecting any rights previously conferred on the holders of any existing shares or class or series of shares, offer, allot,grant options over or otherwise dispose of shares to such persons, at such times and upon such terms and conditions as the Company may by resolutionof directors determine. The directors shall not issue more shares than the maximum number provided for in the Memorandum.12.The Company may issue fully paid, partly paid or nil paid shares as well as bonus shares. A partly paid or nil paid share or a share issued for a promissorynote or other written obligation for payment of a debt may be issued subject to forfeiture in the manner prescribed in these Articles.13.Shares in the Company may be issued for consideration in any form, including money, a promissory note or other obligation to contribute money orproperty, real property, personal property (including goodwill and knowhow) services rendered or a contract for future services and the amount of suchconsideration shall be determined by resolution of directors, except that in the case of shares with par value, the amount shall not be less than the parvalue, and in the absence of fraud the decision of the directors as to the value of the consideration received by the Company in respect of the issue isconclusive unless a question of law is involved.14.Before issuing shares for a consideration other than money, the directors shall pass a resolution stating;(a)the amount to be credited for the issue of the shares;(b)their determination of the reasonable present cash value of the nonmoney consideration for the issue; and(c)that, in their opinion, the present cash value of the nonmoney consideration for the issue is not less than the amount to be credited for the issueof the shares.15.A share issued by the Company upon conversion of, or in exchange for, another share or a debt obligation or other security in the Company, shall betreated for all purposes as having been issued for money equal to the consideration received or deemed to have been received by the Company in respectof the other share, debt obligation or security.16.Treasury shares may be disposed of by the Company on such terms and conditions (not otherwise inconsistent with these Articles) as the Company mayby resolution of directors determine.17.Subject to these Articles, the Company may purchase, redeem or otherwise acquire and hold its own shares save that the Company may not purchase,redeem or otherwise acquire its own shares without the consent of the member whose shares are to be purchased, redeemed or otherwise acquired unlessthe Company is permitted by the Act or any other provision in the Memorandum or Articles to purchase, redeem or otherwise acquire the shares withouttheir consent.818.No purchase, redemption or other acquisition of shares shall be made unless the directors determine by resolution of the directors that immediately after thepurchase, redemption or other acquisition the value of the Company’s assets will exceed its liabilities and the Company will be able to pay its debts as theyfall due.19.Sections 60 (Process for acquisition of own shares), 61 (Offer to one or more shareholders) and 62 (Shares redeemed otherwise than at the option ofcompany) of the Act shall not apply to the Company.20.A determination by the directors under Article 18 is not required;(a)the Company redeems a share or shares pursuant to a right of a member to have his shares redeemed or to have his shares exchanged for moneyor other property of the Company; or(b)by virtue of the provisions of Section 179 of the Act.21.Shares that the Company purchases, redeems or otherwise acquires pursuant to Article 17 may be cancelled or held as treasury shares except to the extentthat such shares are in excess of 80 percent of the issued shares of the Company in which case they shall be cancelled but they shall be available forreissue.22.Shares in the Company shall only be held as treasury shares where the directors of the Company resolve as such and the number of shares acquired, whenaggregated with shares of the same class already held by the Company as treasury shares, does not exceed 50% of the shares of that class previouslyissued by the Company, excluding shares that have been cancelled. All rights and obligations attaching to a treasury share are suspended and shall not beexercised by or against the Company while it holds the share as a treasury share. Treasury shares may be reissued by the Company as new shares.23.The Company shall keep a register of members containing;(a)the names and addresses of the persons who hold registered shares in the Company;(b)the number of each class and series of registered shares held by each member;(c)the date on which the name of each member was entered in the register of members;(d)the date on which any person ceased to be a member; and(e)such other information as may be prescribed pursuant to the Act.24.The register of members may be in any such form as the directors may approve but if it is in magnetic, electronic or other data storage form, the companymust be able to produce legible evidence of its contents.25.The original or a copy of the register of members shall be kept at the registered office of the Company or at the office of the registered agent of theCompany.26.A share is deemed to be issued when the name of the member is entered in the register of members.27.Subject to the Act and the rules of the Designated Stock Exchange, the board of directors without further consultation with the holders of any shares orSecurities may resolve that any class or series of shares or other Securities from time to time in issue or to be issued (including shares in issue at the date ofthe adoption of these Articles) may be issued, held, registered and converted to uncertificated form.28.Conversion of shares held in certificated form into shares held in uncertificated form, and vice versa, may be made in such manner as the board of directors,in its absolute discretion, may think fit. The Company or any duly authorised transfer agent (a “Transfer Agent”) shall enter on the register of membershow many shares are held by each member in uncertificated form and in certificated form and shall maintain the register of members. Notwithstanding anyprovision of these Articles, a class or series of shares shall not be treated as two classes by virtue only of that class or series comprising both certificatedshares and uncertificated Shares or as a result of any provision of these Articles which apply only in respect of certificated or uncertificated shares.9MORTGAGES AND CHARGES OF REGISTERED SHARES29.Members may mortgage or charge their registered shares in the Company with such mortgage or charge being evidenced in writing and signed by, or withthe authority of the registered holder of a registered share to which the mortgage or charge relates. The Company shall give effect to the terms of any validmortgage or charge except insofar as it may conflict with any requirements herein contained for consent to the transfer of shares.30.In the case of the mortgage or charge of registered shares there may be entered in the share register of the Company at the request of the registered holderof such shares(a)a statement that the shares are mortgaged or charged;(b)the name of the mortgagee or chargee; and(c)the date on which the aforesaid particulars are entered in the share register.31.Where particulars of a mortgage or charge are entered in the register of members, such particulars shall be cancelled(a)with the written consent of the named mortgagee or chargee or anyone authorized to act on his behalf; or(b)upon evidence satisfactory to the directors of the discharge of the liability secured by the mortgage or charge and the issue of such indemnities asthe directors shall consider necessary or desirable.32.Whilst particulars of a mortgage or charge over registered shares are entered in the register of members pursuant to the preceding articles no transfer ofany share comprised therein shall be effected without the written consent of the named mortgagee or chargee or anyone authorized to act on his behalf.FORFEITURE33.When shares not fully paid on issue or issued for a promissory note or other written obligation for payment of a debt have been issued subject toforfeiture, the following provisions shall apply.34.Written notice specifying a date for payment to be made and the shares in respect of which payment is to be made shall be served on the member whodefaults in making payment pursuant to a promissory note or other written obligations to pay a debt.35.The written notice specifying a date for payment shall(a)name a further date not earlier than the expiration of 14 days from the date of service of the notice on or before which payment required by thenotice is to be made; and(b)contain a statement that in the event of nonpayment at or before the time named in the notice the shares, or any of them, in respect of whichpayment is not made will be liable to be forfeited.36.Where a written notice has been issued and the requirements of the notice have not been complied with within the prescribed time, the directors may at anytime before tender of payment forfeit and cancel the shares to which the notice relates.37.The Company is under no obligation to refund any moneys to the member whose shares have been forfeited and cancelled pursuant to these provisions.Upon forfeiture and cancellation of the shares the member is discharged from any further obligation to the Company with respect to the shares forfeitedand cancelled.10LIEN38.The Company shall have a first and paramount lien on every share issued for a promissory note or for any other binding obligation to contribute money orproperty or any combination thereof to the Company, and the Company shall also have a first and paramount lien on every share standing registered in thename of a member, whether singly or jointly with any other person or persons, for all the debts and liabilities of such member or his estate to the Company,whether the same shall have been incurred before or after notice to the Company of any interest of any person other than such member, and whether thetime for the payment or discharge of the same shall have actually arrived or not, and notwithstanding that the same are joint debts or liabilities of suchmember or his estate and any other person, whether a member of the Company or not. The Company’s lien on a share shall extend to all distributionspayable thereon. The directors may at any time either generally, or in any particular case, waive any lien that has arisen or declare any share to be wholly orin part exempt from the provisions of this Article.39.In the absence of express provisions regarding sale in the promissory note or other binding obligation to contribute money or property, the Company maysell, in such manner as the directors may by resolution of directors determine, any share on which the Company has a lien, but no sale shall be made unlesssome sum in respect of which the lien exists is presently payable nor until the expiration of twentyone days after a notice in writing, stating and demandingpayment of the sum presently payable and giving notice of the intention to sell in default of such payment, has been served on the holder for the timebeing of the share.40.The net proceeds of the sale by the Company of any shares on which it has a lien shall be applied in or towards payment of discharge of the promissorynote or other binding obligation to contribute money or property or any combination thereof in respect of which the lien exists so far as the same ispresently payable and any residue shall (subject to a like lien for debts or liabilities not presently payable as existed upon the share prior to the sale) bepaid to the holder of the share immediately before such sale. For giving effect to any such sale the directors may authorize some person to transfer theshare sold to the purchaser thereof. The purchaser shall be registered as the holder of the share and he shall not be bound to see to the application of thepurchase money, nor shall his title to the share be affected by any irregularity or invalidity in the proceedings in reference to the sale.TRANSFER OF SHARES41.Registered shares in the Company are transferred by a written instrument of transfer signed by the transferor and containing the name and address of thetransferee. The instrument of transfer shall be signed by the transferee if registration as a holder of the share shall impose a liability to the Company on thetransferee. The instrument of transfer of a registered share shall be sent to the Company for registration.42.The board of directors may resolve that interests in shares in the form of depositary receipts may be transferred or otherwise dealt with in accordance withthe regulations and practices instituted by the operator of the Relevant System and any holder of interests in shares shall be entitled to transfer suchinterests by means of such Relevant System and the operator of the Relevant System shall act as agent of the holders of such interests for the purposes ofthe transfer of those interests.43.The register of members may be closed at such times and for such periods as the board of directors may from time to time determine, upon notice beinggiven by advertisement in such newspapers as may be required by the Act and the practice of the Designated Stock Exchange.44.The transfer of a registered share is effective when the name of the transferee is entered on the register of members.45.If the directors of the Company are satisfied that an instrument of transfer relating to shares has been signed but that the instrument has been lost ordestroyed, they may resolve;(a)to accept such evidence of the transfer of the shares as they consider appropriate; and(b)that the transferee’s name should be entered in the register of members notwithstanding the absence of the instrument of transfer.46.The Company must on the receipt of an instrument of transfer from the transferor or transferee of a registered share in the Company enter the name of thetransferee of the share in the register or members unless the directors, if permitted by the Memorandum or these Articles, resolve by resolution of directorsto refuse or delay the registration of the transfer for reasons that shall be specified in the resolution of directors.11TRANSMISSION OF SHARES47.The personal representative of a deceased member may transfer a share even though the personal representative is not a member at the time of the transfer.48.The personal representative, executor or administrator of a deceased member, the guardian of an incompetent member or the trustee of a bankrupt membershall be the only person recognized by the Company as having any title to his share but they shall not be entitled to exercise any rights as a member of theCompany until they have proceeded as set forth in the next following three Articles.49.The production to the Company of any document which is evidence of probate of the will, or letters of administration of the estate, or confirmation asexecutor, of a deceased member or of the appointment of a guardian of an incompetent member or the trustee of a bankrupt member shall be accepted by theCompany even if the deceased, incompetent or bankrupt member is domiciled outside the British Virgin Islands if the document evidencing the grant ofprobate or letters of administration, confirmation as executor, appointment as guardian or trustee in bankruptcy is issued by a foreign court which hadcompetent jurisdiction in the matter. For the purpose of establishing whether or not a foreign court had competent jurisdiction in such a matter the directorsmay obtain appropriate legal advice. The directors may also require an indemnity to be given by the executor, administrator, guardian or trustee inbankruptcy.50.The Company may enter in the register of members the name of any person becoming entitled by operation of law or otherwise to a share or shares inconsequence of the death, incompetence or bankruptcy upon such evidence being produced as may reasonably be required by the directors.51.Any person who has become entitled to a share or shares in consequence of the death, incompetence or bankruptcy of any member may, instead of beingregistered himself, request in writing that some person to be named by him be registered as the transferee of such share or shares and such request shalllikewise be treated as if it were a transfer.52.What amounts to incompetence on the part of a person is a matter to be determined by the court having regard to all the relevant evidence and thecircumstances of the case.REDUCTION OR INCREASE IN AUTHORISED AND UNISSUED SHARES48.The Company may amend the Memorandum to increase or reduce the maximum number of shares the Company is authorised to issue and may in respect ofany unissued shares increase or reduce the number of such shares, or effect any combination of the foregoing.49.The Company may(1)(a) divide its shares, including issued shares, into a larger number of shares; or (b) combine its shares, including issued shares, into a smallernumber of shares.(2)A division or combination of shares, including issued shares, of a class or series shall be for a larger or smaller number, as the case may be, ofshares in the same class or series.(3)A company shall not divide its shares under subsection (1)(a) or (2) if it would cause the maximum number of shares that the Company isauthorised to issue by its memorandum to be exceeded.(4)Where shares are divided or combined under this article, the aggregate par value of the new shares must be equal to the aggregate par value of theoriginal shares.MEETINGS AND CONSENTS OF MEMBERS50.The directors of the Company may convene meetings of the members of the Company at such times and in such manner and places within or outside theBritish Virgin Islands as the directors consider necessary or desirable. The Company may hold an annual general meeting, but shall not (unless required bythe applicable rules of the Designated Stock Exchange for so long as the Company’s Securities are listed or traded on the Designated Stock Exchange) beobliged to hold an annual general meeting.51.Upon the written request of members holding 30 percent or more of the outstanding voting shares in the Company the directors shall convene a meeting ofmembers.1252.The directors shall give not less than 7 days notice of meetings of members to those persons whose names on the date the notice is given appear asmembers in the share register of the Company and are entitled to vote at the meeting.53.The directors may fix the date notice is given of a meeting of members as the record date for determining those shares that are entitled to vote at themeeting.54.A meeting of members may be called on short notice:(a)if members holding not less than 90 percent of the total number of shares entitled to vote on all matters to be considered at the meeting, or 90percent of the votes of each class or series of shares where members are entitled to vote thereon as a class or series together with not less than a90 percent majority of the remaining votes, have agreed to short notice of the meeting, or(b)if all members holding shares entitled to vote on all or any matters to be considered at the meeting have waived notice of the meeting and for thispurpose presence at the meeting shall be deemed to constitute waiver.55.The inadvertent failure of the directors to give notice of a meeting to a member, or the fact that a member has not received notice, does not invalidate themeeting.56.A member may be represented at a meeting of members by a proxy who may speak and vote on behalf of the member.57.The instrument appointing a proxy shall be produced at the place appointed for the meeting before the time for holding the meeting at which the personnamed in such instrument proposes to vote.58.An instrument appointing a proxy shall be in substantially the following form or such other form as the Chairman of the meeting shall accept as properlyevidencing the wishes of the member appointing the proxy.(Name of Company)I/Webeing a member of the aboveCompany withshares HEREBY APPOINTofor failing himofto be my/our proxy to vote for me/us at the meeting of members to be held on the dayofand at any adjournment thereof.(Any restrictions on voting to be inserted here.)Signed this day ofMember59.The following shall apply in respect of joint ownership of shares:a.if two or more persons hold shares jointly each of them may be present in person or by proxy at a meeting of members and may speak as a member;b.if only one of the joint owners is present in person or by proxy he may vote on behalf of all joint owners, andc.if two or more of the joint owners are present in person or by proxy they must vote as one.60.A member shall be deemed to be present at a meeting of members if he participates by telephone or other electronic means and all members participating inthe meeting are able to hear each other.61.A meeting of members is duly constituted if, at the commencement of the meeting, there are present in person or by proxy not less than 50 percent of thevotes of the shares or class or series of shares entitled to vote on resolutions of members to be considered at the meeting. If a quorum be present,notwithstanding the fact that such quorum may be represented by only one person then such person may resolve any matter and a certificate signed bysuch person accompanied where such person be a proxy by a copy of the proxy form shall constitute a valid resolution of members.1362.If within two hours from the time appointed for the meeting a quorum is not present, the meeting, if convened upon the requisition of members, shall bedissolved; in any other case it shall stand adjourned to the next business day at the same time and place or to such other time and place as the directorsmay determine, and if at the adjourned meeting there are present within one hour from the time appointed for the meeting in person or by proxy not lessthan one third of the votes of the shares or each class or series of shares entitled to vote on the resolutions to be considered by the meeting, those presentshall constitute a quorum but otherwise the meeting shall be dissolved.63.At every meeting of members, the Chairman of the Board of Directors shall preside as chairman of the meeting. If there is no Chairman of the Board ofDirectors or if the Chairman of the Board of Directors is not present at the meeting, the members present shall choose some one of their number to be thechairman. If the members are unable to choose a chairman for any reason, then the person representing the greatest number of voting shares present inperson or by prescribed form of proxy at the meeting shall preside as chairman failing which the oldest individual member or representative of a memberpresent shall take the chair.64.The chairman may, with the consent of the meeting, adjourn any meeting from time to time, and from place to place, but no business shall be transacted atany adjourned meeting other than the business left unfinished at the meeting from which the adjournment took place.65.At any meeting of the members the chairman shall be responsible for deciding in such manner as he shall consider appropriate whether any resolution hasbeen carried or not and the result of his decision shall be announced to the meeting and recorded in the minutes thereof. If the chairman shall have anydoubt as to the outcome of any resolution put to the vote, he shall cause a poll to be taken of all votes cast upon such resolution, but if the chairman shallfail to take a poll then any member present in person or by proxy who disputes the announcement by the chairman of the result of any vote mayimmediately following such announcement demand that a poll be taken and the chairman shall thereupon cause a poll to be taken. If a poll is taken at anymeeting, the result thereof shall be duly recorded in the minutes of that meeting by the chairman.66.Any person other than an individual shall be regarded as one member and subject to the specific provisions hereinafter contained for the appointment ofrepresentatives of such persons the right of any individual to speak for or represent such member shall be determined by the law of the jurisdiction where,and by the documents by which, the person is constituted or derives its existence. In case of doubt, the directors may in good faith seek legal advice fromany qualified person and unless and until a court of competent jurisdiction shall otherwise rule, the directors may rely and act upon such advice withoutincurring any liability to any member.67.Any person other than an individual which is a member of the Company may by resolution of its directors or other governing body authorize such personas it thinks fit to act as its representative at any meeting of the Company or of any class of members of the Company, and the person so authorized shall beentitled to exercise the same powers on behalf of the person which he represents as that person could exercise if it were an individual member of theCompany.68.The chairman of any meeting at which a vote is cast by proxy or on behalf of any person other than an individual may call for a notarially certified copy ofsuch proxy or authority which shall be produced within 7 days of being so requested or the votes cast by such proxy or on behalf of such person shall bedisregarded.69.Directors of the Company may attend and speak at any meeting of members of the Company and at any separate meeting of the holders of any class orseries of shares in the Company.70.An action that may be taken by the members at a meeting may also be taken by a resolution of members consented to in writing or by telex, telegram, cable,facsimile or other written electronic communication, without the need for any notice, but if any resolution of members is adopted otherwise than by theunanimous written consent of all members, a copy of such resolution shall forthwith be sent to all members not consenting to such resolution. The consentmay be in the form of counterparts, each counterpart being signed by one or more members.14DIRECTORS71.The first directors of the Company shall be appointed by the first registered agent of the Company and thereafter the directors shall be appointed byresolution of members, subject to Article 78, for such term as the members determine. A person shall not be appointed as a director unless he hasconsented in writing to be a director.72.The minimum number of directors shall be one and the maximum number shall be 20. Unless otherwise determined by the Company in a meeting ofshareholders and subject to the requirements of the Memorandum, the directors may by a Resolution of Directors, amend this Regulation 72 to change thenumber of directors. For as long as Securities of the Company are listed or traded on the Designated Stock Exchange, the directors shall include suchnumber of Independent Directors as applicable law, rules or regulations of the Designated Stock Exchange may require for a foreign private issuer as longas the Company is a foreign private issuer.73.Each director shall hold office for the term, if any, fixed by resolution of members or until his earlier death, resignation or removal.74.Where the Company has only one member who is an individual and that member is also the sole director of the Company, that sole member/director may, byinstrument in writing, nominate a person who is not disqualified from being a director of the Company under section 111(1) of the Act as a reserve directorof the Company to act in the place of the sole director in the event of his death.75.The nomination of a person as a reserve director of the Company ceases to have effect if;a.before the death of the sole member/director who nominated him;(i)he resigns as reserve director, or(ii)the sole member/director revokes the nomination in writing; orb.the sole member/director who nominated him ceases to be the sole member/director of the Company for any reason other than his death.76.A director may be removed from office, with or without cause, by a resolution of directors or a resolution of members. For the purposes of this Regulation76, “cause” means the willful and continuous failure by a director to substantially perform his duties to the Company (other than any such failure resultingfrom incapacity due to physical or mental illness) or the willful engaging by the director in gross misconduct materially and demonstrably injurious to theCompany. If a director is removed from office without cause by a resolution of the members, for the purposes of this Regulation, the resolution of memberswill require the affirmative vote of the holders of 66 2/3 percent or more of the outstanding votes of the shares entitled to vote thereon.77.A director may resign his office by giving written notice of his resignation to the Company and the resignation shall have effect from the date the notice isreceived by the Company or from such later date as may be specified in the notice. A director of the Company shall resign forthwith if he is, or becomes,disqualified to act as a director under the Act.78.The directors may at any time by resolution of directors appoint any person to be a director to fill a vacancy. There is a vacancy if a director dies orotherwise ceases to hold office as a director prior to the expiration of his term of office, where his term of office was fixed upon his appointment. Thedirectors may not appoint a director to fill a vacancy for a term exceeding the term that remained when the person who has ceased to be a director left orotherwise ceased to hold office.79.The Company shall keep a register of directors containing:a.the names and addresses of the persons who are directors of the Company or who have been nominated as reserve directors of the Company;b.the date on which each person whose name is entered in the register was appointed as a director of the Company or nominated as a reservedirector of the Company;c.the date on which each person named as a director ceased to be a director of the Company;d.the date on which the nomination of any person nominated as a reserve director ceased to have effect; ande.such other information as may be prescribed pursuant to the Act.1580.The original or a copy of any register of directors shall be kept at the office of the registered agent of the Company.81.The register of directors may be in any such form as the directors may approve but if it is in magnetic, electronic or other data storage form, the companymust be able to produce legible evidence of its contents.82.With the prior or subsequent approval by a resolution of members, the directors may, by a resolution of directors, fix the emoluments of directors withrespect to services to be rendered in any capacity to the Company.83.A director shall not require a share qualification and may be an individual or a company.POWERS OF DIRECTORS84.The business and affairs of the Company shall be managed by the directors who may pay all expenses incurred preliminary to and in connection with theformation and registration of the Company and may exercise all such powers of the Company as are not by the Act or by the Memorandum or theseArticles required to be exercised by the members of the Company, subject to any delegation of such powers as may be authorized by these Articles and tosuch requirements as may be prescribed by a resolution of members; but no requirement made by a resolution of members shall prevail if it be inconsistentwith these Articles nor shall such requirement invalidate any prior act of the directors which would have been valid if such requirement had not been made.Notwithstanding anything in Section 175 of the Act the directors shall have the power to sell, transfer, lease, exchange or otherwise dispose of more thanfifty percent of the assets of the Company without submitting a proposal to or obtaining the consent of the members of the Company.85.If the Company is a whollyowned subsidiary of a holding company a director may when exercising powers or performing duties as a director act in amanner which he believes is in the best interests of the holding company even though it may not be in the best interests of the Company.86.The directors may, by a resolution of directors, appoint any person, including a person who is a director, to be an officer or agent of the Company. Theresolution of directors appointing an agent may authorize the agent to appoint one or more substitutes or delegates to exercise some or all of the powersconferred on the agent by the Company.87.Every officer or agent of the Company has such powers and authority of the directors, including the power and authority to affix the Seal, as are set forth inthese Articles or in the resolution of directors appointing the officer or agent, except that no agent has any power or authority with respect to thefollowing;a.to amend the memorandum or articles;b.to change the registered office or agent;c.to designate committees of directors;d.to delegate powers to a committee of directors;e.to appoint or remove directors;f.to appoint or remove an agent;g.to fix emoluments of directors;h.to approve a plan of merger, consolidation or arrangement;i.to make a declaration of solvency for the purposes of section 198(1)(a) of the Act or to approve a liquidation plan;j.to make a determination under section 57(1) of the Act that the company will, immediately after a proposed distribution, satisfy the solvency test;ork.to authorise the Company to continue as a company incorporated under the laws of a jurisdiction outside the British Virgin Islands.1688.Any director which is a body corporate may appoint any person its duly authorized representative for the purpose of representing it at meetings of theBoard of Directors or with respect to unanimous written consents.89.The continuing directors may act notwithstanding any vacancy in their body, save that if their number is reduced to their knowledge below the numberfixed by or pursuant to these Articles as the necessary quorum for a meeting of directors, the continuing directors or director may act only for the purposeof appointing directors to fill any vacancy that has arisen or for summoning a meeting of members.90.The directors may by resolution of directors exercise all the powers of the Company to borrow money and to mortgage or charge its undertakings andproperty or any part thereof, to issue debentures, debenture stock and other securities whenever money is borrowed or as security for any debt, liability orobligation of the Company or of any third party.91.All cheques, promissory notes, drafts, bills of exchange and other negotiable instruments and all receipts for moneys paid to the Company, shall be signed,drawn, accepted, endorsed or otherwise executed, as the case may be, in such manner as shall from time to time be determined by resolution of directors.92.The Company shall keep a register of all relevant charges created by the Company showing:a.if the charge is a charge created by the Company, the date of its creation or if the charge is existing on property acquired by the Company, the dateon which the property was acquired;b.a short description of the liability secured by the charge;c.a short description of the property charged;d.the name and address of the trustee for the security, or if there is no such trustee the name and address of the chargee;e.unless the charge is a security to bearer, the name and address of the holder of the charge;f.details of any prohibition or restriction , if any, contained in the instrument creating the charge on the power of the company to create any futurecharge ranking in priority to or equally with the charge; andg.such other information as may be prescribed pursuant to the Act.93.The original or a copy of the register of charges shall be kept at the registered office of the Company or at the office of the registered agent of the Company.PROCEEDINGS OF DIRECTORS94.The directors of the Company or any committee thereof may meet at such times and in such manner and places within or outside the British Virgin Islandsas the directors may determine to be necessary or desirable. Any one or more directors may convene a meeting of directors.95.A director shall be deemed to be present at a meeting of directors if he participates by telephone or other electronic means and all directors participating inthe meeting are able to hear each other.96.A director shall be given not less than 3 days notice of meetings of directors, but a meeting of directors held without 3 days notice having been given to alldirectors shall be valid if all the directors entitled to vote at the meeting who do not attend, waive notice of the meeting and for this purpose, the presenceof a director at a meeting shall constitute waiver on his part. The inadvertent failure to give notice of a meeting to a director, or the fact that a director hasnot received the notice, does not invalidate the meeting.1797.A director may by a written instrument appoint an alternate who need not be a director and an alternate is entitled to attend meetings in the absence of thedirector who appointed him and to vote or consent in place of the director.98.A meeting of directors is duly constituted for all purposes if at the commencement of the meeting there are present in person or by alternate not less thanone half of the total number of directors, unless there are only 2 directors in which case the quorum shall be 2.99.If the Company shall have only one director the provisions herein contained for meetings of the directors shall not apply but such sole director shall havefull power to represent and act for the Company in all matters as are not by the Act or the Memorandum or these Articles required to be exercised by themembers of the Company and in lieu of minutes of a meeting shall record in writing and sign a note or memorandum of all matters requiring a resolution ofdirectors. Such a note or memorandum shall constitute sufficient evidence of such resolution for all purposes.100.At every meeting of the directors the Chairman of the Board of Directors shall preside as chairman of the meeting. If there is no Chairman of the Board ofDirectors or if the Chairman of the Board of Directors is not present at the meeting the Vice Chairman of the Board of Directors shall preside. If there is noVice Chairman of the Board of Directors or if the Vice Chairman of the Board of Directors is not present at the meeting the directors present shall choosesome one of their number to be chairman of the meeting.101.An action that may be taken by the directors or a committee of directors at a meeting may also be taken by a resolution of directors or a committee ofdirectors consented to in writing or by telex, telegram, cable, facsimile or other written electronic communication by all directors or all members of thecommittee as the case may be, without the need for any notice. The consent may be in the form of counterparts, each counterpart being signed by one ormore directors.102.The directors shall cause the following records to be kept:a.minutes of all meetings of directors, members, committees of directors and committees of members; andb.copies of all resolutions consented to by directors, members, committees of directors and committees of members.103.The resolutions, records and minutes referred to in the preceding Article shall be kept at the registered office of the Company, its principal place ofbusiness or at such other place as the directors determine.104.The directors may, by resolution of directors, designate one or more committees, each consisting of one or more directors.105.Subject to the following Article, each committee of directors has such powers and authorities of the directors, including the power and authority to affix theSeal, as are set forth in the resolution of directors establishing the committee.106.The directors have no power to delegate the following powers to a committee of directors;a.to amend the memorandum or articles;b.to change the registered office or agent;c.to designate committees of directors;d.to delegate powers to a committee of directors;e.to appoint or remove directors;f.to appoint or remove an agent;g.to fix emoluments of directors;18h.to approve a plan of merger, consolidation or arrangement;i.to make a declaration of solvency for the purposes of section 198(1)(a) or to approve a liquidation plan;j.to make a determination under section 57(1) that the company will, immediately after a proposed distribution, satisfy the solvency test; ork.to authorise the company to continue as a company incorporated under the laws of a jurisdiction outside the British Virgin Islands.Paragraphs (c) and (d) do not prevent a committee of directors, where authorised by the directors, from appointing a subcommittee and delegating powersexercisable by the committee to the subcommittee.107.The meetings and proceedings of each committee of directors consisting of 2 or more directors shall be governed mutatis mutandis by the provisions ofthese Articles regulating the proceedings of directors so far as the same are not superseded by any provisions in the resolution establishing the committee.108.Without prejudice to the freedom of the directors to establish any other committee, if the shares (or depositary receipts therefore) are listed or quoted onthe Designated Stock Exchange, and if required by the Designated Stock Exchange, the directors shall establish and maintain an audit committee as acommittee of the board of directors, the composition and responsibilities of which shall comply with the rules and regulations of the SEC and theDesignated Stock Exchange. The audit committee shall meet at least once every financial quarter, or more frequently as circumstances dictate.109.The Company shall adopt a formal written audit committee charter and review and assess the adequacy of the formal written charter on an annual basis.The charter shall specify the responsibilities of the Audit Committee which shall include responsibility for, among other things, ensuring its receipt from theoutside auditors of the Company of a formal written statement delineating all relationships between the auditor and the Company, and the AuditCommittee’s responsibility for actively engaging in a dialogue with the auditor with respect to any disclosed relationships or services that may impact theobjectivity and independence of the auditor take appropriate action to oversee the independence of the outside auditor. In addition, the Audit Committee isresponsible for reviewing potential conflict of interest situations and approving all Related Party Transactions.110.Without prejudice to the freedom of the directors to establish any other committees, the Board may establish a Stock Option Committee to administer theCompany’s stock option plans, including authority to make and modify awards under such plans. For so long as the Securities of the Company are listed ortraded on the Designated Stock Exchange, the Stock Option Committee shall have at least two Independent Directors. The Stock Option Committee willadminister the Company’s stock option plans, including the authority to make and modify awards under such plans.111.Without prejudice to the freedom of the directors to establish any other committees, the Board may establish a Nominating Committee to assist the Board inidentifying qualified individuals to become members of the Board.OFFICERS112.The Company may by resolution of directors appoint officers of the Company at such times as shall be considered necessary or expedient. Such officersmay consist of a Chairman of the Board of Directors, a Vice Chairman of the Board of Directors, a President and one or more Vice Presidents, Secretaries andTreasurers and such other officers as may from time to time be deemed desirable. Any number of offices may be held by the same person.113.The officers shall perform such duties as shall be prescribed at the time of their appointment subject to any modification in such duties as may beprescribed thereafter by resolution of directors or resolution of members, but in the absence of any specific allocation of duties it shall be the responsibilityof the Chairman of the Board of Directors to preside at meetings of directors and members, the Vice Chairman to act in the absence of the Chairman, thePresident to manage the day to day affairs of the Company, the Vice Presidents to act in order of seniority in the absence of the President but otherwise toperform such duties as may be delegated to them by the President, the Secretaries to maintain the share register, minute books and records (other thanfinancial records) of the Company and to ensure compliance with all procedural requirements imposed on the Company by applicable law, and the Treasurerto be responsible for the financial affairs of the Company.19114.Subject to the rules of the Designated Stock Exchange, the emoluments of all officers shall be fixed by resolution of directors.115.The officers of the Company shall hold office until their successors are duly elected and qualified, but any officer elected or appointed by the directors maybe removed at any time, with or without cause, by resolution of directors. Any vacancy occurring in any office of the Company may be filled by resolutionof directors.CONFLICT OF INTERESTS116.A director of the Company shall, forthwith after becoming aware of the fact that he is interested in a transaction entered into or to be entered into by theCompany, disclose the interest to all other directors of the Company.117.A director of the Company is not required to comply with Article 112 if;a.the transaction or proposed transaction is between the director and the Company; andb.the transaction or proposed transaction is or is to be entered into in the ordinary course of the company’s business and on usual terms andconditions.118.For the purposes of Article 112 a disclosure to all other directors to the effect that a director is a member, director or officer of another named entity or has afiduciary relationship with respect to the entity or a named individual and is to be regarded as interested in any transaction which may, after the date of theentry or disclosure, be entered into with that entity or individual, is a sufficient disclosure of interest in relation to that transaction.119.A.A director of the Company who is interested in a transaction entered into or to be entered into by the Company may:(i)vote on a matter relating to the transaction;(ii)attend a meeting of directors at which a matter relating to the transaction arises and be included among the directors present at the meeting for thepurposes of a quorum; and(iii)sign a document on behalf of the Company, or do any other thing in his capacity as a director, that relates to the transaction,and, subject to compliance with the Act shall not, by reason of his office be accountable to the Company for any benefit which he derives from suchtransaction and no such transaction shall be liable to be avoided on the grounds of any such interest or benefit.119.B.For so long the Securities of the Company are listed or traded on the Designated Stock Exchange, the Company shall conduct an appropriate review of allmaterial Related Party Transactions on an ongoing basis and shall utilize the Audit Committee for the review and approval of potential conflicts of interestsituations.INDEMNIFICATION120.Subject to the limitations hereinafter provided the Company may indemnify against all expenses, including legal fees, and against all judgments, fines andamounts paid in settlement and reasonably incurred in connection with legal, administrative or investigative proceedings any person who;a.is or was a party or is threatened to be made a party to any threatened, pending or completed proceedings, whether civil, criminal, administrative orinvestigative, by reason of the fact that the person is or was a director, an officer or a liquidator of the Company; orb.is or was, at the request of the Company, serving as a director of, or in any other capacity is or was acting for, another body corporate or apartnership, joint venture, trust or other enterprise.20121.The Company may only indemnify a person if the person acted honestly and in good faith in what he believed to be in the best interests of the Companyand, in the case of criminal proceedings, the person had no reasonable cause to believe that his conduct was unlawful.122.For the purposes of the preceding Article, a director acts in the best interests of the Company if he acts in the best interests of;a.the Company’s holding company; orb.a shareholder or shareholders of the Company; in either case, in the circumstances specified in Article 85.123.The decision of the directors as to whether the person acted honestly and in good faith and with a view to the best interests of the Company and as towhether the person had no reasonable cause to believe that his conduct was unlawful is, in the absence of fraud, sufficient for the purposes of theseArticles, unless a question of law is involved.124.The termination of any proceedings by any judgment, order, settlement, conviction or the entering of a nolle prosequi does not, by itself, create apresumption that the person did not act honestly and in good faith and with a view to the best interests of the Company or that the person had reasonablecause to believe that his conduct was unlawful.Consolidated Statements of Changes in Stockholder’s EquityF5Consolidated Statements of Cash FlowsF6Notes to Consolidated Financial StatementsF7 F22F1REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRMTo the Shareholder and the Sole Director ofLK Technology Ltd.Opinion on the Consolidated Financial StatementsWe have audited the accompanying consolidated balance sheets of LK Technology Ltd. and. subsidiaries (the “Company”) as of December 31, 2017 and 2016, andthe related consolidated statements of operations and comprehensive loss, changes in shareholder’s equity and cash flows for each of the years then ended, andthe related notes (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in allmaterial respects, the consolidated financial position of the Company as of December 31, 2017 and 2016, and the consolidated results of its operations and its cashflows for each of the years then ended, in conformity with accounting principles generally accepted in the United States of America.Basis for OpinionThese consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’sconsolidated financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (UnitedStates) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules andregulations of the Securities and Exchange Commission and the PCAOB.We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonableassurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have,nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internalcontrol over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting.Accordingly, we express no such opinion.An independent member firm of Moore Stephens International Limited – members in principal cities throughout the worldOur audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, andperforming procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in theconsolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well asevaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion.Certified Public AccountantsWe have served as the Company’s auditor since 2018.Hong KongMay 25, 2018F2LK TECHNOLOGY LTD. AND SUBSIDIARIESCONSOLIDATED BALANCE SHEETS(IN U.S. DOLLARS)As of December 31,20172016AssetsCurrent assets:Cash and cash equivalents$72,379$83,843Accounts receivable, net of allowance for doubtful accounts9,729,6251,865,836Other receivables and prepayment2,376,7452,287,934Amounts due from related parties11,760,692Total current assets23,939,4414,237,613Property and equipment, net5,044,8727,771,027Intangible assets, net1,154,1971,682,445Goodwill7,239,9367,239,936Amount due from a related party204,412183,811TOTAL ASSETS37,582,85821,114,832LiabilitiesCurrent liabilities:Accounts payable8,784,5186,446,584Accrued liabilities and other payables12,962,91211,329,613Amounts due to related parties3,563,68316,129,323Total current liabilities25,311,11333,905,520Total liabilities25,311,11333,905,520Commitments and contingenciesShareholder’s Equity (Deficit)Share capitalCommon stock, $1 par value per share; 50,000 shares authorized as of December 31, 2017 and 2016, 1 share issued andoutstanding as of December 31, 2017 and 201611Additional paidin capital41,819,68510,037,469Accumulated deficit(29,936,158)(23,125,704)Accumulated other comprehensive income (loss)388,217297,546Total Shareholder’s Equity (Deficit)12,271,745(12,790,688)TOTAL LIABILITIES AND SHAREHOLDER’S EQUITY (DEFICIT)$37,582,858$21,114,832F3LK TECHNOLOGY LTD. AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS(IN U.S. DOLLARS)For the years endedDecember 31,20172016Revenues$26,082,417$5,233,145Less: Cost of revenues5,547,7796,315,504Less: Operating expenses:Selling and marketing23,908,7336,209,804General and administrative2,451,2492,108,854Research and development1,046,1982,882,202Total operating expenses27,406,18011,200,860Loss from operations(6,871,542)(12,283,219)Other income (expense):Interest expense(26,611)(4,412)Foreign exchange gains (losses)350,679(298,257)Loss from investment(428,571)Other income (expense), net(262,980)(34,572)Total other income (expense), net61,088(765,812)Loss before income taxes(6,810,454)(13,049,031)Income taxesNet loss$(6,810,454)$(13,049,031)Other comprehensive income:Foreign currency translation adjustment90,671387,375Total comprehensive loss$(6,719,783)$(12,661,656)F4LK TECHNOLOGY LTD. AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDER’S EQUITY(IN U.S. DOLLARS)Accumulated otherTotalOrdinary sharesAdditionalpaidin AccumulatedcomprehensiveIncomeShareholder’sEquity SharesAmountcapitaldeficits(loss)(Deficit)Balance as of December 31, 20151$ 1$8,250,505$(10,076,673)$(89,829)$(1,915,996)Capital contribution from C Media1,786,9641,786,964Net loss(13,049,031)(13,049,031)Foreign currency translation adjustment387,375387,375Balance as of December 31, 20161110,037,469(23,125,704)297,546(12,790,688)Capital contribution from C Media31,782,21631,782,216Net loss(6,810,454)(6,810,454)Foreign currency translation adjustment90,67190,671Balance as of December 31, 20171$1$41,819,685$(29,936,158)$388,217$12,271,745F5LK TECHNOLOGY LTD. AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF CASH FLOWS(IN U.S. DOLLARS)For the years endedDecember 31,20172016CASH FLOWS FROM OPERATING ACTIVITIES:Net loss$(6,810,454)$(13,049,031)Depreciation and amortization3,316,1813,245,161Loss on disposal of property and equipment115,19373,022Increase in allowance for doubtful accounts445,39562,591Changes in assets and liabilitiesAccounts receivable(7,933,730)(1,507,296)Other receivables and prepayment(2,202,960)2,873,984Accounts payable2,230,5434,757,457Accrued liabilities and other payables1,866,1377,483,441Net cash (used in) provided by operating activities(8,973,695)3,939,329CASH FLOWS FROM INVESTING ACTIVITIES:Purchase of property and equipment(12,689)(3,554,258)Proceeds from disposal of property and equipment29,942Net cash provided by (used in) investing activities17,253(3,554,258)CASH FLOWS FROM FINANCING ACTIVITIES:Advances from related parties8,938,290(1,197,870)Net cash provided by (used in) financing activities8,938,290(1,197,870)Effect of exchange rate changes6,688(32,746)Net decrease in cash and cash equivalents(11,464)(845,545)Cash and cash equivalents, at beginning of year83,843929,388Cash and cash equivalents, at end of year$72,379$83,843Supplemental cash flow disclosures:Interest paid26,6114,412Income taxes paidF6LK TECHNOLOGY LTD. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS(IN U.S. DOLLARS)NOTE 1 – DESCRIPTION OF BUSINESS AND ORGANIZATIONStar Chariot Limited was incorporated in the British Virgin Islands (“BVI”) as an exempted limited liability company on March 3, 2011. On January 18, 2018, it wasrenamed as LK Technology Ltd. (“LK Technology ” or the “Company”).LK Technology, its subsidiaries and its variable interest entities (“VIEs”) (collectively the “Group”) operate mobile application service for longdistance travel in thePeople’s Republic of China (the “PRC”). The core mobile application product, Luokuang, is made as an LBSsocial contents and services distribution platform. Itoffers functions based on various travel scenarios, e.g. information, entertainment, travel, ecommerce, O2O, advertising, etc.As of December 31, 2017, details of the Company’s subsidiaries and VIEs are as follows:NameDate ofincorporationPlace ofincorporationPercentage oflegal ownershipSubsidiaries:MMB LimitedApr 11, 2013Hong Kong100%Mobile Media (China) LimitedNov 6, 2007Hong Kong100%Zhong Chuan Tian Xia Information and Technology (Beijing) LimitedFeb 1, 2013PRC100%Zhong Chuan Tian Xia Information and Technology (Shenzhen) LimitedDec 23, 2010PRC100%VIEs:Beijing Zhong Chuan Shi Xun Technology Limited (“Zhong Chuan Shi Xun”)May 17, 2004PRC100%Jiangsu Zhong Chuan Rui You Information and Technology Limited (“Zhong Chuan Rui You”)May 26, 2011PRC100%Huoerguosi Luokuang Information and Technology Limited (“Huoerguosi Luokuang”)Jul 19, 2017PRC100%Shenzhen Jiu Zhou Shi Dai Digital and Technology Limited (“Jiu Zhou Shi Dai”)Nov 26, 2004PRC100%F7NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIESBasis of presentationThe consolidated financial statements of the Group have been prepared in accordance with accounting principles generally accepted in the United States of America(“US GAAP”).The Group incurred losses from operations of $6,871,542 and $12,283,219 for the years ended December 31, 2017 and 2016, respectively. As of December 31, 2017, theGroup had a shareholder’s equity of $12,271,145. The Group had negative cash flows from operating activities for the year ended December 31, 2017 of $8,973,695.As of December 31, 2017, the Group had cash and cash equivalents of $72,379 and a working capital deficit of $1,371,672. From 2018 and onwards, the Group willfocus on improving operation efficiency and cost reduction, and enhancing marketing functions to attract more users. The Group regularly monitors its current andexpected liquidity requirements to ensure that it maintains sufficient cash balances and accessible credit to meet its liquidity requirements in the short and long term.The parent company continues to provide cash flow to the Group. Based on working capital conditions and forecast for future operations, the Group believes that itwill be able to meet its payment obligations and other commitments for at least the following twelve months.Principles of consolidationThe consolidated financial statements include the financial statements of the Company, its subsidiaries, including the whollyforeign owned enterprises (“WFOEs”),and VIEs for which the Company is the primary beneficiary. All transactions and balances among the Company, its subsidiaries and consolidated VIEs have beeneliminated upon consolidation. The results of subsidiaries and consolidated VIEs acquired or disposed of are recorded in the consolidated statements of operationsfrom the effective date of acquisition or up to the effective date of disposal, as appropriate.A subsidiary is an entity in which (i) the Company directly or indirectly controls more than 50% of the voting power; or (ii) the Company has the power to appoint orremove the majority of the members of the board of directors or to cast a majority of votes at the meeting of the board of directors or to govern the financial andoperating policies of the investee pursuant to a statute or under an agreement among the shareholders or equity holders. A VIE is required to be consolidated by theprimary beneficiary of the entity if the equity holders in the entity do not have the characteristics of a controlling financial interest or do not have sufficient equity atrisk for the entity to finance its activities without additional subordinated financial support from other parties.F8To comply with the PRC legal restrictions on foreign ownership of companies that operate mobile application services, the Group operates in such restricted servicesin the PRC through certain PRC domestic companies, whose equity interests are held by certain management members or founders of the Group. Part of theregistered capital of these PRC domestic companies was funded by certain management members or founders of the Group. The Group has entered into certainexclusive business services agreements with these PRC domestic companies, which entitle it to receive a majority of their residual returns and make it obligatory forthe Group to absorb a majority of the risk of losses from their activities. In addition, the Group has entered into certain agreements with those management membersor founders, including equity interest pledge agreements of the equity interests held by those management members or founders and exclusive option agreements toacquire the equity interests in these companies when permitted by the PRC laws, rules and regulations.Details of the typical VIE structure of the Group’s significant consolidated VIEs, primarily domestic companies associated with the operations such as Zhong ChuanShi Xun, Zhong Chuan Rui You, Huoerguosi Luokuang and Jiu Zhou Shi Dai, are set forth below:(i)Contracts that give the Group effective control of VIEsExclusive option agreementsThe VIE equity holders have granted the WFOEs exclusive call options to purchase their equity interest in the VIEs at an exercise price equal to the higherof (i) the registered capital in the VIEs; and (ii) the minimum price as permitted by applicable PRC laws. Each relevant VIE has further granted the relevantWFOE an exclusive call option to purchase its assets at an exercise price equal to the book value of the assets or the minimum price as permitted byapplicable PRC laws, whichever is higher. The WFOEs may nominate another entity or individual to purchase the equity interest or assets, if applicable,under the call options. Each call option is exercisable subject to the condition that applicable PRC laws, rules and regulations do not prohibit completion ofthe transfer of the equity interest or assets pursuant to the call option. Each WFOE is entitled to all dividends and other distributions declared by the VIE,and the VIE equity holders have agreed to give up their rights to receive any distributions or proceeds from the disposal of their equity interests in the VIEwhich are in excess of the original registered capital that they contributed to the VIE, and to pay any such distributions or premium to the WFOE. Theexclusive call option agreements remain in effect until the equity interest or assets that are the subject of such agreements are transferred to the WFOEs.Equity pledge agreementsPursuant to the relevant equity pledge agreements, the relevant VIE equity holders have pledged all of their interests in the equity of the VIEs as acontinuing first priority security interest in favor of the corresponding WFOEs to secure the performance of obligations by the VIEs and/or the equityholders under the other structure contracts. Each WFOE is entitled to exercise its right to dispose of the VIE equity holders’ pledged interests in the equityof the VIE and has priority in receiving payment by the application of proceeds from the auction or sale of such pledged interests, in the event of anybreach or default under the loan agreement or other structure contracts, if applicable. These equity pledge agreements remain in force for the duration ofthe relevant loan agreement and other structure contracts.F9(ii)Contracts that enable the Group to receive substantially all of the economic benefits from the VIEsExclusive business services agreementsEach relevant VIE has entered into an exclusive business services agreement with the respective WFOE, pursuant to which the relevant WFOE providesexclusive business services to the VIE. In exchange, the VIE pays a service fee to the WFOE which typically amounts to what would be substantially all ofthe VIE’s pretax profit, resulting in a transfer of substantially all of the profits from the VIE to the WFOE.Other arrangementsThe exclusive call option agreements described above also enable the Group to receive substantially all of the economic benefits from the VIEs by typicallyentitling the WFOEs to all dividends and other distributions declared by the VIEs and to any distributions or proceeds from the disposal by the VIE equityholders of their equity interests in the VIEs that are in excess of the original registered capital that they contributed to the VIEs.Based on these contractual agreements, the Group believes that the PRC domestic companies as described above should be considered as VIEs because the equityholders do not have significant equity at risk nor do they have the characteristics of a controlling financial interest. Given that the Group is the primary beneficiaryof these PRC domestic companies, the Group believes that these VIEs should be consolidated based on the structure as described above.Under the contractual arrangements with the consolidated VIEs, the Group has the power to direct activities of the consolidated VIEs and can have assetstransferred out of the consolidated VIEs under its control. Therefore, the Group considers that there is no asset in any of the consolidated VIEs that can be usedonly to settle obligations of the consolidated VIEs, except for registered capital and PRC statutory reserves. As all consolidated VIEs are incorporated as limitedliability companies under the Company Law of the PRC, creditors of the consolidated VIEs do not have recourse to the general credit of the Group for any of theliabilities of the consolidated VIEs.Currently there is no contractual arrangement which requires the Group to provide additional financial support to the consolidated VIEs. However, as the Groupconducts its businesses primarily based on the licenses and approvals held by its consolidated VIEs, the Group has provided and will continue to provide financialsupport to the consolidated VIEs considering the business requirements of the consolidated VIEs, as well as the Group’s own business objectives in the future.F10Use of estimatesThe preparation of financial statements in conformity with US GAAP requires the Group to make estimates and assumptions that affect the reported amounts ofassets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expensesduring the reporting period. The most significant estimates are the allowance for doubtful accounts, the useful lives of property and equipment and intangibleassets, impairment of longlived assets and goodwill. Actual results could differ from those estimates.Fair value measurementsFair value is the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at themeasurement date under current market conditions. When determining the fair value measurements for assets and liabilities required or permitted to be recorded atfair value, the Group considers the principal or most advantageous market in which it would transact and it considers assumptions that market participants woulduse when pricing the asset or liability.Authoritative literature provides a fair value hierarchy which prioritizes the inputs to valuation techniques used to measure fair value into three broad levels. Thelevel in the hierarchy within which the fair value measurement in its entirety falls is based upon the lowest level of input that is significant to the fair valuemeasurement as follows:Level 1Level 1 applies to assets or liabilities for which there are quoted prices in active markets for identical assets or liabilities.Level 2Level 2 applies to assets or liabilities for which there are inputs other than quoted prices included within Level 1 that are observable for the asset or liability such asquoted prices for similar assets or liabilities in active markets; quoted prices for identical assets or liabilities in markets with insufficient volume or infrequenttransactions (less active markets); or modelderived valuations in which significant inputs are observable or can be derived principally from, or corroborated by,observable market data.Level 3Level 3 applies to assets or liabilities for which there are unobservable inputs to the valuation methodology that are significant to the measurement of the fair valueof the assets or liabilities.F11Cash and cash equivalentsCash and cash equivalents primarily consist of cash, money market funds, investments in interest bearing demand deposit accounts, time deposits and highly liquidinvestments with original maturities of three months or less from the date of purchase and are stated at cost which approximates their fair value. The Group has nocash equivalents.Accounts receivable, net of allowanceAccounts receivable are recognized and carried at the original invoiced amount less an allowance for any potential uncollectible amounts. An estimate for doubtfuldebts is made when collection of the full amount is no longer probable. Bad debts are written off as incurred. The Group generally does not require collateral from itscustomers.The Group maintains allowances for doubtful accounts for estimated losses resulting from the failure of customers to make payments on time. The Group reviews theaccounts receivable on a periodic basis and makes specific allowances when there is doubt as to the collectability of individual balances. In evaluating thecollectability of individual receivable balances, the Group considers many factors, including the age of the balance, the customer’s payment history, its currentcreditworthiness and current economic trends.Property and equipment, netProperty and equipment are carried at cost less accumulated depreciation. Depreciation is calculated on a straightline basis over the following estimated usefullives:Wifi equipment– 3 yearsOffice equipment– 3 to 5 yearsVehicles– 5 yearsCosts of repairs and maintenance are expensed as incurred and asset improvements are capitalized. The gain or loss on disposal of property and equipment is thedifference between the net sales proceeds and the carrying amount of the relevant assets and is recognized in the consolidated income statement. When propertyand equipment are retired or otherwise disposed of, the cost and accumulated depreciation are removed from the accounts and any resulting gain or loss is includedin the results of operations for the respective period.Construction in progressAssets under construction are not depreciated until construction is completed and the assets are ready for their intended use.F12Intangible assetsIntangible assets with finite lives are amortized using the straightline method over the estimated economic lives.Intangible assets have weighted average economic lives from the date of purchase as follows:Software– 5 yearsTrademarks– 10 yearsGoodwillThe Group assesses goodwill for impairment in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”)subtopic 35020, Intangibles—Goodwill and Other: Goodwill (“ASC 35020”), which requires that goodwill to be tested for impairment at the reporting unit level atleast annually and more frequently upon the occurrence of certain events, as defined by ASC 35020.We have the option to assess qualitative factors first to determine whether it is necessary to perform the twostep test in accordance with ASC 35020. If we believe,as a result of the qualitative assessment, that it is morelikelythannot that the fair value of the reporting unit is less than its carrying amount, the twostepquantitative impairment test described below is required. Otherwise, no further testing is required. In the qualitative assessment, we consider primary factors such asindustry and market considerations, overall financial performance of the reporting unit, and other specific information related to the operations. In performing thetwostep quantitative impairment test, the first step compares the carrying amount of the reporting unit to the fair value of the reporting unit based on either quotedmarket prices of the ordinary shares or estimated fair value using a combination of the income approach and the market approach. If the fair value of the reportingunit exceeds the carrying value of the reporting unit, goodwill is not impaired and we are not required to perform further testing. If the carrying value of the reportingunit exceeds the fair value of the reporting unit, then we must perform the second step of the impairment test in order to determine the implied fair value of thereporting unit’s goodwill. The fair value of the reporting unit is allocated to its assets and liabilities in a manner similar to a purchase price allocation in order todetermine the implied fair value of the reporting unit goodwill. If the carrying amount of the goodwill is greater than its implied fair value, the excess is recognized asan impairment loss.In 2017, we performed a qualitative assessment for goodwill. Based on the requirements of ASC35020, we evaluated all relevant factors, including but not limited tomacroeconomic conditions, industry and market conditions, financial performance. We weighed all factors in their entirety and concluded that it was not morelikelythannot the fair value was less than the carrying amount of the reporting unit, and further impairment testing on goodwill was unnecessary as of December 31, 2017and 2016.F13Impairment or disposal of longlived assetsLonglived assets other than goodwill are included in impairment evaluations when events and circumstances exist that indicate the carrying value of these assetsmay not be recoverable. In accordance with FASB ASC 360, Property, Plant and Equipment, the Group assesses the recoverability of the carrying value of longlivedassets by first grouping its longlived assets with other assets and liabilities at the lowest level for which identifiable cash flows are largely independent of the cashflows of other assets and liabilities (the asset group) and, secondly, estimating the undiscounted future cash flows that are directly associated with and expected toarise from the use of and eventual disposition of such asset group. If the carrying value of the asset group exceeds the estimated undiscounted cash flows, theGroup recognizes an impairment loss to the extent the carrying value of the longlived asset exceeds its fair value. The Group determines fair value through quotedmarket prices in active markets or, if quotations of market prices are unavailable, through the performance of internal analysis using a discounted cash flowmethodology or obtains external appraisals from independent valuation firms. The undiscounted and discounted cash flow analyses are based on a number ofestimates and assumptions, including the expected period over which the asset will be utilized, projected future operating results of the asset group, discount rateand longterm growth rate.As of December 31, 2017 and 2016, the Group assessed the impairment of its longlived assets and concluded that there was no impairment indication.Business combinationWe account for business combinations using the purchase method of accounting in accordance with FASB ASC topic 805, Business combinations. The purchasemethod accounting requires that the consideration transferred be allocated to the assets, including separately identifiable assets and liabilities we acquired, basedon their estimated fair values. The consideration transferred in an acquisition is measured as the aggregate of the fair values at the date of exchange of the assetsgiven, liabilities incurred, and equity instruments issued as well as the contingent considerations and all contractual contingencies as of the acquisition date. Thecosts directly attributable to the acquisition are expensed as incurred. Identifiable assets, liabilities and contingent liabilities acquired or assumed are measuredseparately at their fair value as of the acquisition date, irrespective of the extent of any noncontrolling interests. The excess of (i) the total of cost of acquisition, fairvalue of the noncontrolling interests and acquisition date fair value of any previously held equity interest in the acquiree over (ii) the fair value of the identifiable netassets of the acquiree, is recorded as goodwill. If the cost of acquisition is less than the fair value of the net assets of the subsidiary acquired, the difference isrecognized directly in earnings.Revenue recognitionThe Group recognizes revenue in accordance with FASB ASC topic 605, Revenue Recognition (“ASC 605”). Revenue is recognized when the following four revenuerecognition criteria are met: (i) persuasive evidence of an arrangement exists, (ii) delivery has occurred or services have been provided, (iii) the selling price is fixed ordeterminable, and (iv) collectability is reasonably assured.F14Displaybased online advertising servicesThe Group provides displaybased online advertising services to customers by integrating text description, image and video, and displaying the advertisements in aprominent position of LuoKuang Application. The Group recognizes revenue in accordance with ASC 605, over the contractual term based on the agreements andconfirmation letters signed by both parties, commencing on the date the customer’s advertisement is displayed on the Group’s platform.Foreign currency translationThe functional and reporting currency of the Company and the Company’s subsidiaries domiciled in BVI and Hong Kong are the United States dollar (“U.S. dollar”).The financial records of the Company’s other subsidiaries and VIEs located in the PRC are maintained in their local currency, the Chinese Renminbi (“RMB”), whichare the functional currency of these entities.Monetary assets and liabilities denominated in currencies other than the functional currency are translated into the functional currency at the rates of exchangeruling at the balance sheet date. Transactions in currencies other than the functional currency during the year are converted into the functional currency at theapplicable rates of exchange prevailing when the transactions occurred. Transaction gains and losses are recognized in the statements of operations.The Company’s entities with a functional currency of RMB translate their operating results and financial position into the U.S. dollar, the Company’s reportingcurrency. Assets and liabilities are translated using the exchange rates in effect on the balance sheet date. Revenues, expenses, gains and losses are translatedusing the average rate for the year. Retained earnings and equity are translated using the historical rate. Translation adjustments are reported as cumulativetranslation adjustments and are shown as a separate component of other comprehensive income.Income taxesDeferred income taxes are recognized for temporary differences between the tax basis of assets and liabilities and their reported amounts in the financial statements,net operating loss carry forwards and credits, by applying enacted statutory tax rates applicable to future years. Deferred tax assets are reduced by a valuationallowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Current income taxesare provided for in accordance with the laws and regulations applicable to the Group as enacted by the relevant tax authorities.The impact of an uncertain income tax position on the income tax return must be recognized at the largest amount that is morelikelythan not to be sustained uponaudit by the relevant tax authorities. An uncertain income tax position will not be recognized if it has less than a 50% likelihood of being sustained. Additionally, theGroup classifies the interest and penalties, if any, as a component of the income tax expense. For years ended December 31, 2017 and 2016, the Group did not haveany material interest or penalties associated with tax positions nor did the Group have any significant unrecognized uncertain tax positions.F15Related partiesParties are considered to be related to the Company if the parties, directly or indirectly, through one or more intermediaries, control, are controlled by, or are undercommon control with the Company. Related parties also include principal owners of the Company, its management, members of the immediate families of principalowners of the Company and its management and other parties with which the Company may deal with if one party controls or can significantly influence themanagement or operating policies of the other to an extent that one of the transacting parties might be prevented from fully pursuing its own separate interests. TheCompany discloses all significant related party transactions.LeasesLeases have been classified as either capital or operating leases. Leases that transfer substantially all the benefits and risks incidental to the ownership of assets areaccounted for as if there was an acquisition of an asset and incurrence of an obligation at the inception of the lease. All other leases are accounted for as operatingleases wherein rental payments are expensed as incurred.When the Group is the lessor, minimum contractual rental from leases are recognized on a straightline basis over the noncancelable term of the lease. With respectto a particular lease, actual amounts billed in accordance with the lease during any given period may be higher or lower than the amount of rental revenue recognizedfor the period. Straightline rental revenue commences when the customer assumes control of the leased premises. Accrued straightline rents receivable representsthe amount by which straightline rental revenue exceeds rents currently billed in accordance with lease agreements. Contingent rental revenue is accrued when thecontingency is removed.Advertising costsAdvertising costs include expenses associated with direct marketing. All advertising costs are expensed as incurred and included in selling and marketing expenses.During the years ended December 31, 2017 and 2016, advertising costs amounted to $23,171,170 and $4,537,653, respectively.Comprehensive lossComprehensive loss includes net loss and foreign currency translation adjustments and is presented net of tax. The tax effect is nil for the two years endedDecember 31, 2017 and 2016 in the consolidated statements of comprehensive loss.Concentration of credit riskFinancial instruments that potentially expose the Group to concentrations of credit risk consist primarily of cash and accounts receivable. The Group places its cashwith financial institutions with highcredit rating and quality in China. For the year ended December 31, 2017, two customers accounted for over 10% of totalrevenue. For the year ended December 31, 2016, four customers accounted for over 10% of total revenue. At December 31, 2017 and 2016, the Group had credit riskexposure of uninured cash in banks of approximately $72,379 and $83,843, respectively.F16NOTE 3 – INCOME TAXAt December 31, 2017 and 2016, the Group had an unused net operating loss carryforwards of approximately $25,123,726 and $20,081,239, respectively, for income taxpurposes, which expires between 2018 to 2022 and between 2017 to 2021, respectively. At December 31, 2017 and 2016, these net operating losses carryforwards mayresult in future income tax benefits of approximately $5,043,944 and $4,008,863, respectively, however, because realization is uncertain at this time, a valuationallowance in the same amount has been established. Deferred income taxes reflect the net effects of temporary differences between the carrying amounts of assetsand liabilities for financial reporting purposes and the amounts used for income tax purposes.Significant components of the Group’s deferred tax liabilities and assets of December 31, 2017 and 2016 are as follows:December 31,December 31,20172016Deferred tax liabilities$$Deferred tax assetNet operating loss carryforward5,043,9444,008,863Valuation allowance(5,043,944)(4,008,863)Net deferred tax assetMovement of valuation allowanceDecember 31,2017December 31,2016At the beginning of the year$4,008,863$2,049,352Current year addition823,9702,159,518Expired(61,411)Exchange difference272,522(200,007)At the end of the year5,043,9444,008,863The Company is not subject to taxation in BVI under the current BVI law. Subsidiaries operating in the PRC are subject to PRC Enterprise Income Tax at the statutoryrate of 25% for the years ended December 31, 2017 and 2016. Subsidiaries operating in Hong Kong are subject to Hong Kong income taxes at a rate of 16.5% for theyears ended December 31, 2017 and 2016.F17A reconciliation of the income tax expense to the amount computed by applying the current statutory tax rate to the loss before income taxes in the consolidatedstatements of comprehensive income is as follows:December 31,December 31,20172016Loss before income taxes$(6,810,454)$(13,049,031)Tax loss at statutory tax rate(1,655,174)(3,386,822)Nondeductible items6,729,2551,712,857Nontaxable items(3,789,956)(674,189)Change in valuation allowance823,9702,159,518Tax benefits(2,108,095)188,636Income tax expensesNOTE 4 – ACCOUNTS RECEIVABLEAt December 31, 2017 and 2016, accounts receivable consisted of the following:December 31,December 31,20172016Accounts receivable$10,406,602$2,098,946Less: allowance for doubtful accounts676,977233,110$9,729,625$1,865,836NOTE 5 – OTHER RECEIVABLESAt December 31, 2017 and 2016, other receivables consisted of the following:December 31,2017December 31,2016Advances to suppliers$339,701$181,472VAT recoverable (1)3,033,0651,662,805Other5,048,189485,152$2,376,745$2,287,934(1)The balance of advanced VAT represents input VAT available for deducting the amount of VAT paid in the future. During the years ended December 31, 2017and 2016, the Group purchased a large amount of WiFi equipment for deployments, which generated related input VAT approved by tax authority.F18NOTE 6 – AMOUNTS DUE FROM RELATEDPARTIESAt December 31, 2017 and 2016, amounts due from related parties consisted of the following:Name of related partyDecember 31,2017December 31,2016C Media Limited (1)$11,760,692$Ya Tuo Ji International Consultancy (Beijing) Limited (2)204,412183,811(1)C Media Limited is the parent company of LK Technology. The Group expects the amounts due from the related party will be returned to the Group within oneyear.(2)Ya Tuo Ji is a company controlled by the spouse of a major shareholder of C Media Limited. The loan is unsecured, interestfree and repayable on January 5,2019.NOTE 7 – PROPERTY AND EQUIPMENTAt December 31, 2017 and 2016, property and equipment consisted of the following:December 31,December 31,Useful life20172016WiFi equipment3 Years$8,711,424$8,367,678Vehicles5 Years43,246Office and other equipment3 – 5 Years170,242416,434Constructioninprogress2,166,4522,652,28811,048,11811,479,646Less: accumulated depreciation(6,003,246)(3,708,619)$5,044,872$7,771,027For the years ended December 31, 2017 and 2016, depreciation expense amounted to $2,628,884 and $2,474,434, respectively, of which $2,423,655 and $2,194,582,respectively, was included in cost of revenue, $117,648 and $121,740, respectively, was included in selling and marketing expenses and the remainder was included ingeneral and administrative expense.Included in constructioninprogress are WiFI equipment under construction.F19NOTE 8 – GOODWILLIn September of 2014, Zhong Chuan Shi Xun acquired a 100% interest in Zhong Chuan Rui You for a consideration of $7,391,894 (RMB48,000,000). Zhong Chuan RuiYou is primarily engaged in on train WiFi business, deploying WiFi equipment on trains and providing passengers with entertainment and information services ontrains. The book value of the identifiable net assets of Zhong Chuan Rui You was $151,958 (RMB963,000) and a goodwill of $7,239,936 was recorded.NOTE 9 – ACCRUED LIABILITIES AND OTHER PAYABLESAt December 31, 2017 and 2016, accrued liabilities and other payables consisted of the following:December 31,December 31,20172016Deferred revenue$2,326,406$302,735Accrued payroll143,998316,458Other taxes payable3,544,469461,699Other payable852,384686,526Other loans6,095,6559,562,915$12,962,912$11,329,613Deferred revenue represents prepayments from customers for advertising service and is recognized as revenue when the advertising services are rendered.Other loans of $939,555 and $57,416, respectively, as of December 31, 2017 and 2016, are unsecured, bear daily interest at 0.04% and are repayable on demand.NOTE 10 – AMOUNTS DUE TO RELATED PARTIESAt December 31, 2017 and 2016, amounts due to related parties consisted of the following:December 31,December 31,Name of related party20172016Mr. Song Xuesong (“Mr. Song”) (1)$2,921,639$10,669,325C Media Limited (2)$$4,855,236Thumb Beijing Branch (3)$612,103$576,560Thumb Shenzhen Branch (3)$29,941$28,202(1) The Group’s CEO(2) C Media Limited, the parent company.(3) Thumb Beijing and Shenzhen Branch are controlled by the spouse of Mr. Song.Amounts due to related parties are shortterm in nature, noninterest bearing, unsecured and payable on demand.F20NOTE 11 – RETIREMENT AND WELFARE BENEFITSThe Group’s fulltime employees are entitled to staff welfare benefits including medical care, casualty, housing benefits, education benefits, unemployment insuranceand pension benefits through a PRC governmentmandated multiemployer defined contribution plan. The Group is required to accrue the employerportion forthese benefits based on certain percentages of the employees’ salaries. The total provision for such employee benefits of $170,227 and $353,033 during the yearsended December 31, 2017 and 2016, respectively, of which $23,392 and $30,455, respectively, was charged to cost of revenue, $48,957 and $97,408, respectively wascharged to selling and marketing expenses, $49,717 and $86,934, respectively, was charged to general and administrative expenses and $48,161 and $138,236,respectively was charged to research and development expenses. The Group is required to make contributions to the plan out of the amounts accrued for all staffwelfare benefits except for education benefits. The PRC government is responsible for the staff welfare benefits including medical care, casualty, housing benefits,unemployment insurance and pension benefits to be paid to these employees.NOTE 12 – STATUTORY RESERVESAs stipulated by the relevant law and regulations in the PRC, the Group’s subsidiaries and VIEs in the PRC are required to maintain a nondistributable statutorysurplus reserve. Appropriations to the statutory surplus reserve are required to be made at not less than 10% of profit after taxes as reported in the subsidiaries’statutory financial statements prepared under the PRC GAAP. Once appropriated, these amounts are not available for future distribution to owners or shareholders.Once the general reserve is accumulated to 50% of the subsidiaries’ registered capital, the subsidiaries can choose not to provide more reserves. The statutoryreserve may be applied against prior year losses, if any, and may be used for general business expansion and production and increase in registered capital of thesubsidiaries. The Group allocated $Nil to statutory reserves during the years ended December 31, 2017 and 2016, respectively. The statutory reserves cannot betransferred to the Company in the form of loans or advances and are not distributable as cash dividends except in the event of liquidation.NOTE 13 – COMMITMENTS AND CONTINGENCIESOperating leasesWe have entered into operating lease agreements primarily for our office spaces in China. These leases expire through 2018 and are renewable upon negotiation.Future minimum rental payment required under the Office Lease is as follows:Year ending December 31:Amount2018$122,138F21Contingencies(a) Litigation with Shanghai Fusheng Weier Intelligent Control Technology Co., Ltd.On January 22, 2016, Zhong Chuan Rui You and Shanghai Fusheng Weier Intelligent Control Technology Co., Ltd. (“Fusheng Weier”) signed a contract forequipment of $1,652,842 (RMB10,800,000). Since Zhong Chuan Rui You did not make the payments of $1,126,381 (RMB7,360,000) on the due dates, Fusheng Weierfiled a lawsuit against Zhong Chuan Rui You in Shanghai Xuhui District People’s Court on October 8, 2016. On March 9, 2017, Xuhui District People’s Court issuedthe verdict requiring Zhong Chuan Rui You to pay the overdue debts. In August 2017, C Media Limited made the payment of $512,075 (RMB3,346,000). Theremaining balance has been accrued in accounts payable. The payment schedule for the remaining balance is being negotiated by the two parties. On February 5,2018, a hearing was held adding Zhong Chuan Shi Xun as a defendant. The Group plans to settle the remaining balance within one year.(b) Lawsuit with Gansu Jinlun Culture Media Co., Ltd.On August 22, 2014, Zhong Chuan Rui You and Gansu Jinlun Culture Media Co., Ltd. (“Gansu Jinlun”) signed a “Lanzhou Railway Bureau Airconditioned Train WiFi Network System Advertising Operation Rights Agreement” for advertising on 72 trains of $1,467,880 (RMB9,604,633). Due to the dispute on the projectimplementation, Zhong Chuan Rui You did not pay the advertising fee. On August 23, 2017, Gansu Jinlun filed a lawsuit with Gansu Intermediate People’s Court. OnDecember 19, 2017, Gansu Intermediate People’s Court issued a verdict, ruling that Zhong Chuan Rui You settle the overdue advertising fee. Since only 18 out of 72trains have been installed with Wifi network system, Zhong Chuan Rui You disputed and appealed to the verdict. The next court trial date has not yet beendetermined.C Media and Gansu Jinlun are negotiating a potential settlement to resume the contract. According to the legal counsel, it is probable that the settlement will amountto approximately $459,000 (RMB3,000,000); therefore, this amount has been accrued in accounts payable.(c) Litigation with Shenzhen Hua Xun Fang Zhou Technology Co., Ltd.On June 16, 2015, Zhong Chuan Rui You signed a cooperation agreement with Shenzhen Hua Xun Fang Zhou Technology Co., Ltd. (“Shenzhen Hua Xun”) andXuesong Song, a major shareholder of C Media Limited. Pursuant to this agreement, Zhong Chuan Rui You procures equipment from Shenzhen Hua Xun. XuesongSong acts as a joint liability guarantor for the entire debts of Zhong Chuan Rui You under this agreement. As Zhong Chuan Rui You did not make the payments onthe due dates, Shenzhen Hua Xun filed a lawsuit with Shenzhen Baoan District People’s Court on May 31, 2016. On November 1, 2016, Zhong Chuan Rui You,Xuesong Song and Shenzhen Hua Xun reached a settlement in Shenzhen Baoan District People’s Court to settle $1,735,389 (RMB11,355,000) in four instalments. OnDecember 30, 2017, the debt was assigned to C Media Limited.NOTE 14 – SUBSEQUENT EVENTThe Group has evaluated all events or transactions that occurred after December 31, 2017 through May 25, 2018, which is the date that the financial statements wereavailable to be issued.F22EX1.1 2 f20f2017ex11_luokung.htm AMENDED AND RESTATED MEMORANDUM OF ASSOCIATION AND ARTICLES OF ASSOCIATION OF LUOKUNGTECHNOLOGY CORP., DATED AUGUST 20, 2018, AND AS CURRENTLY IN EFFECTExhibit 1.1BC NO: 1553620British Virgin IslandsThe BVI Business Companies Act, 2004(No. 16 of 2004)Memorandum of AssociationandArticles of AssociationofLuokung Technology Corp.Incorporated the 24th day of October, 2009Amended and Restated the 11th Day of December 2009Amended and Restated the 17th Day of December 2009Amended and Restated the 25th Day of March 2010Amended and Restated the 21st day of May 2018Amended and restated the 17 August 2018Amended and restated the 21 August 2018Portcullis (BVI) LimitedPortcullis Chambers4th Floor Ellen Skelton Building3076 Sir Francis Drake HighwayRoad Town, TortolaBritish Virgin IslandsTERRITORY OF THE BRITISH VIRGIN ISLANDSTHE BVI BUSINESS COMPANIES ACT, 2004(No. 16 of 2004)MEMORANDUM OF ASSOCIATIONOFLuokung Technology Corp.NAME1.The name of the Company is Luokung Technology Corp.TYPE OF COMPANY2.The Company is a company limited by shares.REGISTERED OFFICE3.The first Registered Office of the Company is the offices of Portcullis TrustNet (BVI) Limited, Portcullis TrustNet Chambers, P.O. Box 3444, Road Town,Tortola, British Virgin Islands, the office of the registered agent.3.1The current Registered Office of the Company is Portcullis Chambers, 4th Floor Ellen Skelton Building, 3076 SirFrancis Drake Highway, Road Town,Tortola, British Virgin Islands VG1110.REGISTERED AGENT4.The first Registered Agent of the Company is Portcullis TrustNet (BVI) Limited of Portcullis TrustNet Chambers, P.O. Box 3444, Road Town, Tortola,British Virgin Islands.4.1The current Registered Agent of the Company is Portcullis (BVI) Ltd of Portcullis Chambers, 4th Floor Ellen Skelton Building, 3076 Sir Francis DrakeHighway, Road Town, Tortola, British Virgin Islands VG1110.AUTHORISED NUMBER OF SHARES5.The Company is authorised to issue a maximum of 251,000,000 shares.CLASSES, NUMBER AND PAR VALUE OF SHARES6.As at the date of adoption of this memorandum, the Company is authorised to issue (a) 250,000,000 ordinary shares without par value (“OrdinaryShares”); and (b) 1,000,000 preferred shares without par value (“Preferred Shares”).FRACTIONAL SHARES7.The Company may issue fractions of a share and a fractional share shall have the same corresponding fractional liabilities, limitations, preferences,privileges, qualifications, restrictions, rights and other attributes of a whole share of the same class or series of shares.RIGHTS, PRIVILEGES, RESTRICTIONS AND CONDITIONS ATTACHING TO SHARES8.(1)Subject to the memorandum and articles of association (and, for greater clarity, without prejudice to any special rights conferred thereby on theholders of any other shares), an Ordinary Share of the Company confers on the holder;(a)the right to one vote at a meeting of the members of the Company or on any Resolution of Members;(b)the right to an equal share in any Distribution paid by the Company; and(c)the right to an equal share in the distribution of the surplus assets of the Company on a winding up.(2)Subject to the memorandum and articles of association (and, for greater clarity, without prejudice to any special rights conferred thereby on theholders of any other shares), a Preferred Share of the Company confers on the holder;(a)the right to 399 votes at a meeting of the members of the Company or on any Resolution of Members;(b)the right to an equal share in any Distribution paid by the Company;(c)the right to an equal share in the distribution of the surplus assets of the Company on its liquidation.(d)be freely transferable, in whole or in part, by Mr. Xuesong Song to any third party through one or more Private Transactions, subject toApplicable Law; and(e)be freely transferable, in whole or in part, by Mr. Xuesong Song to any third party through one or more Public Transactions, subject to ApplicableLaw and Automatic Conversion of such Preferred Share(s) into Ordinary Share(s).(3)The directors may at their discretion by resolution of directors redeem, purchase or otherwise acquire all or any of the shares in the Companysubject to the Articles..VARIATION OF CLASS RIGHTS9.If at any time the issued shares are divided into different classes or series of shares, the rights attached to any class or series (unless otherwise providedby the terms of issue of the shares of that class or series) may, whether or not the Company is being wound up, be varied with the consent in writing of theholders of not less than threefourths of the issued shares of that class or series and of the holders of not less than threefourths of the issued shares ofany other class or series of shares which may be affected by such variation.RIGHTS NOT VARIED BY THE ISSUE OF SHARES PARI PASSU10.The rights conferred upon the holders of the shares of any class issued with preferred or other rights shall not, unless otherwise expressly provided by theterms of issue of the shares of that class, be deemed to be varied by the creation or issue of further shares ranking pari passu therewith.CAPACITY AND POWERS11.Subject to the Act, any other British Virgin Islands legislation and paragraph 12 below the Company has, irrespective of corporate benefit:(a)full capacity to carry on or undertake any business or activity, do any act or enter into any transaction;(b)for the purposes of paragraph (a), full rights, powers and privileges; and(c)full powers to issue shares with preemptive rights, subject to the Articles.2LIMITATIONS ON THE COMPANY’S BUSINESS12.For the purposes of section 9(4) of the Act the Company may not;(a)carry on banking or trust business, unless it is licensed to do so under the Banks and Trust Companies Act, 1990;(b)carry on business as an insurance or reinsurance company, insurance agent or insurance broker, unless it is licensed under the Insurance Act1994;(c)carry on business of company management, unless it is licensed under the Company Management Act, 1990;(d)carry on the business of providing the registered office or the registered agent for companies incorporated in the British Virgin Islands;(e)carry on the business as a mutual fund, manager of mutual funds or administrator of mutual funds unless it is recognized or licenced as the casemay be under the Mutual Funds Act 1996; or(f)carry on any other business that gives rise to a licencing requirement under any law for the time being in force in the British Virgin Islands unlessit is licenced, regulated, recognised or otherwise approved pursuant to such law.REGISTERED SHARES AND PROHIBITION ON ISSUE OF BEARER SHARES13.Shares in the Company may only be issued as registered shares. The issue of shares to bearer is prohibited.PROHIBITION ON EXCHANGE AND CONVERSION OF REGISTERED SHARES TO BEARER SHARES14.The exchange or conversion of registered shares to bearer shares is prohibited.TRANSFER OF REGISTERED SHARES15.Subject to the provisions of the Articles the Company may upon receipt of an instrument of transfer enter the name of the transferee in the register ofmembers subject to the prior or simultaneous approval of the Company as evidenced by a resolution of directors or by a resolution of members. Subject toany resolution of the members to the contrary, the directors may resolve by resolution of directors to refuse or delay the registration of the transfer forreasons that shall be specified in the resolution of directors.AMENDMENT OF MEMORANDUM AND ARTICLES OF ASSOCIATION16.1The Company may amend its Memorandum or Articles by a resolution of members or by a resolution of directors provided that the directors shall not havethe power to amend the Memorandum or Articles;(a)to restrict the rights or powers of the members to amend the Memorandum or Articles;(b)to change the percentage of members required to pass a resolution to amend the Memorandum or Articles;(c)in circumstances where the Memorandum or Articles cannot be amended by the members; or(d)to Clauses 8, 9, 10 or this Clause 12.16.2No amendment may be made to Regulation 76 of the Articles unless approved by an affirmative vote of the holders of 66 2/3 percent or more of theoutstanding votes of the shares entitled to vote thereon.3DEFINITIONS17.The meanings of words in this Memorandum are as defined in the Articles.We, Portcullis TrustNet (BVI) Limited of Portcullis TrustNet Chambers, P.O. Box 3444, Road Town, Tortola, British Virgin Islands for the purpose ofincorporating a BVI Business Company under the laws of the British Virgin Islands hereby sign this Memorandum of Association the 27th day of October,2009.Incorporator/s/ Nicole WheatleyPortcullis TrustNet (BVI) LimitedPortcullis TrustNet ChambersP.O. Box 3444Road Town, TortolaBritish Virgin Islands(Sgd. Nicole Wheatley)4TERRITORY OF THE BRITISH VIRGIN ISLANDSTHE BVI BUSINESS COMPANIES ACT, 2004(No. 16 of 2004)ARTICLES OF ASSOCIATIONOFLuokung Technology Corp.PRELIMINARY1.In these Articles, if not inconsistent with the subject or context, the words and expressions standing in the first column of the following table shall bear themeanings set opposite them respectively in the second column thereof.WordsMeaningApplicable Lawall Laws, including those of a jurisdiction in or outside of the United States, applicable to the Private orPublic Transactions.Actthe BVI Business Companies Act, 2004 (No 16 of 2004.) including any modification, extension, reenactment or renewal thereof and any regulations made thereunder.Articlesthese Articles of Association as originally framed or as from time to time amended.Automatic Conversioneach Preferred Share shall be automatically converted at any time after issue and without the payment ofany additional sum into an equal number of fully paid Ordinary Shares upon the conclusion of anytransfer by Mr. Xuesong Song to any third party through one or more Public Transactions.Designated Stock Exchangeeither the Nasdaq National Stock Market, Inc. or such other exchange or quotation bureau on which, theCompany’s Securities are listed or traded; provided that until the Securities are listed on any such“Exchange” the rules of any such Designated Stock Exchange shall be inapplicable to these Articles.directora director of the Company.distributionin relation to a distribution by a company to a member, means(i)the direct or indirect transfer of an asset, other than the Company’s own shares, to or forthe benefit of the member or(ii)the incurring of a debt to or for the benefit of a member,in relation to shares held by a member, and whether by means of a purchase of an asset, the purchase,redemption or other acquisition of shares, a transfer of indebtedness or otherwise, and includes adividend.Independent Directora person who meets the then current requirements for “independence” of the applicable rules andregulations of the U.S. Securities and Exchange Commission and the Designated Stock Exchange.5member or shareholderin relation to the Company, means a person whose name is entered in the register of members as theholder of one or more shares, or fractional shares, in the Company.Memorandumthe Memorandum of Association of the Company as originally framed or as from time to time amended.Mr. Xuesong Songthe founder, a director and Chairman of LK Technology Ltd.Ordinary Sharesissued or unissued ordinary shares of no par value of the Company having the rights, preferences andprivileges set out in the MemorandumPersonAn individual, a corporation, a trust, trustee, the estate of a deceased individual, a partnership or anunincorporated association of persons.Preferred Sharesissued or unissued preferred shares of no par value of the Company having the rights, preferences andprivileges set out in the MemorandumPrivate Transactionstransactions that are not considered as a Public Transaction.Public Transactionstransactions through any national securities exchanges and/or through the automated quotation systemincluding but not limited to NASDAQ, NYSE (including NYSE American) or OTC Markets, or anytransaction executed by the broker or with a market maker.Related Party(a) any director, officer and employee of the Company; (b) any family member of such director, officer andemployee; and (c) any entity (e.g. a corporation, partnership, or trust) controlled by or set up for thebenefit of a director, officer or employee, or a family member of such director, officer or employee.Relevant SystemA facility for the electronic transfer of uncertificated securities administered by The Depository TrustCompany or such other Person regulated by the SEC.resolution of directors(a)A resolution approved at a duly convened and constituted meeting of directors of the Companyor of a committee of directors of the Company by the affirmative vote of a simple majority of thedirectors present at the meeting who voted and did not abstain; or(b)a resolution consented to in writing by a simple majority of the directors or of all members of thecommittee, as the case may be;except that where a director is given more than one vote, he shall be counted by the number ofvotes he casts for the purpose of establishing a majority.resolution of membersSubject to the provisions of the Memorandum and Articles means:(a)A resolution approved at a duly convened and constituted meeting of the members of theCompany by the affirmative vote of(i)a majority of in excess of 50% of the votes of the shares entitled to vote and voting onthe resolution, or(ii)a majority of in excess of 50% of the votes of each class or series of shares entitled tovote as a class or series and voting on the resolution and a majority of in excess of 50%of the votes of the remaining shares entitled to vote and voting on the resolution; or6(b)a resolution consented to in writing by(i)an absolute majority of the votes of shares entitled to vote thereon, or(ii)an absolute majority of the votes of each class or series of shares entitled to votethereon as a class or series and of an absolute majority of the votes of the remainingshares entitled to vote thereon.SealAny Seal which has been duly adopted as the common seal of the Company.SECThe United States Securities and Exchange Commission.Securitiesshares and debt obligations of every kind, and options, warrants and rights to acquire shares, or debtobligations.SharesOrdinary Shares and/or Preferred Shares, as the case may be.solvency testa company satisfies the solvency test if;(i)the value of the company’s assets exceeds its liabilities, and(ii)the company is able to pay its debts as they fall due.treasury sharesshares in the Company that were previously issued but were repurchased, redeemed or otherwiseacquired by the Company and not cancelled.2.“Written” or any term of like import includes words typewritten, printed, painted, engraved, lithographed, photographed or represented or reproduced byany mode of reproducing words in a visible form, including telex, facsimile, telegram, cable or other form of writing produced by electronic communication.3.Save as aforesaid any words or expressions defined in the Act shall bear the same meaning in these Articles.4.Whenever the singular or plural number, or the masculine, feminine or neuter gender is used in these Articles, it shall equally, where the context admits,include the others.5.A reference in these Articles to voting in relation to shares shall be construed as a reference to voting by members holding the shares except that it is thevotes allocated to the shares that shall be counted and not the number of members who actually voted and a reference to shares being present at a meetingshall be given a corresponding construction.6.A reference to money in these Articles is, unless otherwise stated, a reference to the currency in which shares in the Company shall be issued according tothe provisions of the Memorandum.7REGISTERED SHARES7.Every member holding registered shares in the Company shall be entitled to a certificate signed by a director or officer of the Company or such otherperson who may be authorised from time to time by resolution of directors or under the Seal, with or without the signature of any director of the Company,specifying the share or shares held by him and the signature of the director or officer or person so authorised and the Seal may be facsimiles.8.Any member receiving a share certificate for registered shares shall indemnify and hold the Company and its directors and officers harmless from any lossor liability which it or they may incur by reason of any wrongful or fraudulent use or representation made by any person by virtue of the possessionthereof. If a share certificate for registered shares is worn out or lost it may be renewed on production of the worn out certificate or on satisfactory proof ofits loss together with such indemnity as may be required by a resolution of directors.9.If several persons are registered as joint holders of any shares, any one of such persons may give an effectual receipt for any distribution payable inrespect of such shares.10.Nothing in these Articles shall require title to any shares or other Securities to be evidenced by a certificate if the Act and the rules of the Designated StockExchange permit otherwise.SHARES AND ISSUED SHARES11.Subject to the provisions of these Articles and, if applicable, the rules of the Designated Stock Exchange, and any resolution of members, the directors ofthe Company may, without limiting or affecting any rights previously conferred on the holders of any existing shares or class or series of shares, offer, allot,grant options over or otherwise dispose of shares to such persons, at such times and upon such terms and conditions as the Company may by resolutionof directors determine. The directors shall not issue more shares than the maximum number provided for in the Memorandum.12.The Company may issue fully paid, partly paid or nil paid shares as well as bonus shares. A partly paid or nil paid share or a share issued for a promissorynote or other written obligation for payment of a debt may be issued subject to forfeiture in the manner prescribed in these Articles.13.Shares in the Company may be issued for consideration in any form, including money, a promissory note or other obligation to contribute money orproperty, real property, personal property (including goodwill and knowhow) services rendered or a contract for future services and the amount of suchconsideration shall be determined by resolution of directors, except that in the case of shares with par value, the amount shall not be less than the parvalue, and in the absence of fraud the decision of the directors as to the value of the consideration received by the Company in respect of the issue isconclusive unless a question of law is involved.14.Before issuing shares for a consideration other than money, the directors shall pass a resolution stating;(a)the amount to be credited for the issue of the shares;(b)their determination of the reasonable present cash value of the nonmoney consideration for the issue; and(c)that, in their opinion, the present cash value of the nonmoney consideration for the issue is not less than the amount to be credited for the issueof the shares.15.A share issued by the Company upon conversion of, or in exchange for, another share or a debt obligation or other security in the Company, shall betreated for all purposes as having been issued for money equal to the consideration received or deemed to have been received by the Company in respectof the other share, debt obligation or security.16.Treasury shares may be disposed of by the Company on such terms and conditions (not otherwise inconsistent with these Articles) as the Company mayby resolution of directors determine.17.Subject to these Articles, the Company may purchase, redeem or otherwise acquire and hold its own shares save that the Company may not purchase,redeem or otherwise acquire its own shares without the consent of the member whose shares are to be purchased, redeemed or otherwise acquired unlessthe Company is permitted by the Act or any other provision in the Memorandum or Articles to purchase, redeem or otherwise acquire the shares withouttheir consent.818.No purchase, redemption or other acquisition of shares shall be made unless the directors determine by resolution of the directors that immediately after thepurchase, redemption or other acquisition the value of the Company’s assets will exceed its liabilities and the Company will be able to pay its debts as theyfall due.19.Sections 60 (Process for acquisition of own shares), 61 (Offer to one or more shareholders) and 62 (Shares redeemed otherwise than at the option ofcompany) of the Act shall not apply to the Company.20.A determination by the directors under Article 18 is not required;(a)the Company redeems a share or shares pursuant to a right of a member to have his shares redeemed or to have his shares exchanged for moneyor other property of the Company; or(b)by virtue of the provisions of Section 179 of the Act.21.Shares that the Company purchases, redeems or otherwise acquires pursuant to Article 17 may be cancelled or held as treasury shares except to the extentthat such shares are in excess of 80 percent of the issued shares of the Company in which case they shall be cancelled but they shall be available forreissue.22.Shares in the Company shall only be held as treasury shares where the directors of the Company resolve as such and the number of shares acquired, whenaggregated with shares of the same class already held by the Company as treasury shares, does not exceed 50% of the shares of that class previouslyissued by the Company, excluding shares that have been cancelled. All rights and obligations attaching to a treasury share are suspended and shall not beexercised by or against the Company while it holds the share as a treasury share. Treasury shares may be reissued by the Company as new shares.23.The Company shall keep a register of members containing;(a)the names and addresses of the persons who hold registered shares in the Company;(b)the number of each class and series of registered shares held by each member;(c)the date on which the name of each member was entered in the register of members;(d)the date on which any person ceased to be a member; and(e)such other information as may be prescribed pursuant to the Act.24.The register of members may be in any such form as the directors may approve but if it is in magnetic, electronic or other data storage form, the companymust be able to produce legible evidence of its contents.25.The original or a copy of the register of members shall be kept at the registered office of the Company or at the office of the registered agent of theCompany.26.A share is deemed to be issued when the name of the member is entered in the register of members.27.Subject to the Act and the rules of the Designated Stock Exchange, the board of directors without further consultation with the holders of any shares orSecurities may resolve that any class or series of shares or other Securities from time to time in issue or to be issued (including shares in issue at the date ofthe adoption of these Articles) may be issued, held, registered and converted to uncertificated form.28.Conversion of shares held in certificated form into shares held in uncertificated form, and vice versa, may be made in such manner as the board of directors,in its absolute discretion, may think fit. The Company or any duly authorised transfer agent (a “Transfer Agent”) shall enter on the register of membershow many shares are held by each member in uncertificated form and in certificated form and shall maintain the register of members. Notwithstanding anyprovision of these Articles, a class or series of shares shall not be treated as two classes by virtue only of that class or series comprising both certificatedshares and uncertificated Shares or as a result of any provision of these Articles which apply only in respect of certificated or uncertificated shares.9MORTGAGES AND CHARGES OF REGISTERED SHARES29.Members may mortgage or charge their registered shares in the Company with such mortgage or charge being evidenced in writing and signed by, or withthe authority of the registered holder of a registered share to which the mortgage or charge relates. The Company shall give effect to the terms of any validmortgage or charge except insofar as it may conflict with any requirements herein contained for consent to the transfer of shares.30.In the case of the mortgage or charge of registered shares there may be entered in the share register of the Company at the request of the registered holderof such shares(a)a statement that the shares are mortgaged or charged;(b)the name of the mortgagee or chargee; and(c)the date on which the aforesaid particulars are entered in the share register.31.Where particulars of a mortgage or charge are entered in the register of members, such particulars shall be cancelled(a)with the written consent of the named mortgagee or chargee or anyone authorized to act on his behalf; or(b)upon evidence satisfactory to the directors of the discharge of the liability secured by the mortgage or charge and the issue of such indemnities asthe directors shall consider necessary or desirable.32.Whilst particulars of a mortgage or charge over registered shares are entered in the register of members pursuant to the preceding articles no transfer ofany share comprised therein shall be effected without the written consent of the named mortgagee or chargee or anyone authorized to act on his behalf.FORFEITURE33.When shares not fully paid on issue or issued for a promissory note or other written obligation for payment of a debt have been issued subject toforfeiture, the following provisions shall apply.34.Written notice specifying a date for payment to be made and the shares in respect of which payment is to be made shall be served on the member whodefaults in making payment pursuant to a promissory note or other written obligations to pay a debt.35.The written notice specifying a date for payment shall(a)name a further date not earlier than the expiration of 14 days from the date of service of the notice on or before which payment required by thenotice is to be made; and(b)contain a statement that in the event of nonpayment at or before the time named in the notice the shares, or any of them, in respect of whichpayment is not made will be liable to be forfeited.36.Where a written notice has been issued and the requirements of the notice have not been complied with within the prescribed time, the directors may at anytime before tender of payment forfeit and cancel the shares to which the notice relates.37.The Company is under no obligation to refund any moneys to the member whose shares have been forfeited and cancelled pursuant to these provisions.Upon forfeiture and cancellation of the shares the member is discharged from any further obligation to the Company with respect to the shares forfeitedand cancelled.10LIEN38.The Company shall have a first and paramount lien on every share issued for a promissory note or for any other binding obligation to contribute money orproperty or any combination thereof to the Company, and the Company shall also have a first and paramount lien on every share standing registered in thename of a member, whether singly or jointly with any other person or persons, for all the debts and liabilities of such member or his estate to the Company,whether the same shall have been incurred before or after notice to the Company of any interest of any person other than such member, and whether thetime for the payment or discharge of the same shall have actually arrived or not, and notwithstanding that the same are joint debts or liabilities of suchmember or his estate and any other person, whether a member of the Company or not. The Company’s lien on a share shall extend to all distributionspayable thereon. The directors may at any time either generally, or in any particular case, waive any lien that has arisen or declare any share to be wholly orin part exempt from the provisions of this Article.39.In the absence of express provisions regarding sale in the promissory note or other binding obligation to contribute money or property, the Company maysell, in such manner as the directors may by resolution of directors determine, any share on which the Company has a lien, but no sale shall be made unlesssome sum in respect of which the lien exists is presently payable nor until the expiration of twentyone days after a notice in writing, stating and demandingpayment of the sum presently payable and giving notice of the intention to sell in default of such payment, has been served on the holder for the timebeing of the share.40.The net proceeds of the sale by the Company of any shares on which it has a lien shall be applied in or towards payment of discharge of the promissorynote or other binding obligation to contribute money or property or any combination thereof in respect of which the lien exists so far as the same ispresently payable and any residue shall (subject to a like lien for debts or liabilities not presently payable as existed upon the share prior to the sale) bepaid to the holder of the share immediately before such sale. For giving effect to any such sale the directors may authorize some person to transfer theshare sold to the purchaser thereof. The purchaser shall be registered as the holder of the share and he shall not be bound to see to the application of thepurchase money, nor shall his title to the share be affected by any irregularity or invalidity in the proceedings in reference to the sale.TRANSFER OF SHARES41.Registered shares in the Company are transferred by a written instrument of transfer signed by the transferor and containing the name and address of thetransferee. The instrument of transfer shall be signed by the transferee if registration as a holder of the share shall impose a liability to the Company on thetransferee. The instrument of transfer of a registered share shall be sent to the Company for registration.42.The board of directors may resolve that interests in shares in the form of depositary receipts may be transferred or otherwise dealt with in accordance withthe regulations and practices instituted by the operator of the Relevant System and any holder of interests in shares shall be entitled to transfer suchinterests by means of such Relevant System and the operator of the Relevant System shall act as agent of the holders of such interests for the purposes ofthe transfer of those interests.43.The register of members may be closed at such times and for such periods as the board of directors may from time to time determine, upon notice beinggiven by advertisement in such newspapers as may be required by the Act and the practice of the Designated Stock Exchange.44.The transfer of a registered share is effective when the name of the transferee is entered on the register of members.45.If the directors of the Company are satisfied that an instrument of transfer relating to shares has been signed but that the instrument has been lost ordestroyed, they may resolve;(a)to accept such evidence of the transfer of the shares as they consider appropriate; and(b)that the transferee’s name should be entered in the register of members notwithstanding the absence of the instrument of transfer.46.The Company must on the receipt of an instrument of transfer from the transferor or transferee of a registered share in the Company enter the name of thetransferee of the share in the register or members unless the directors, if permitted by the Memorandum or these Articles, resolve by resolution of directorsto refuse or delay the registration of the transfer for reasons that shall be specified in the resolution of directors.11TRANSMISSION OF SHARES47.The personal representative of a deceased member may transfer a share even though the personal representative is not a member at the time of the transfer.48.The personal representative, executor or administrator of a deceased member, the guardian of an incompetent member or the trustee of a bankrupt membershall be the only person recognized by the Company as having any title to his share but they shall not be entitled to exercise any rights as a member of theCompany until they have proceeded as set forth in the next following three Articles.49.The production to the Company of any document which is evidence of probate of the will, or letters of administration of the estate, or confirmation asexecutor, of a deceased member or of the appointment of a guardian of an incompetent member or the trustee of a bankrupt member shall be accepted by theCompany even if the deceased, incompetent or bankrupt member is domiciled outside the British Virgin Islands if the document evidencing the grant ofprobate or letters of administration, confirmation as executor, appointment as guardian or trustee in bankruptcy is issued by a foreign court which hadcompetent jurisdiction in the matter. For the purpose of establishing whether or not a foreign court had competent jurisdiction in such a matter the directorsmay obtain appropriate legal advice. The directors may also require an indemnity to be given by the executor, administrator, guardian or trustee inbankruptcy.50.The Company may enter in the register of members the name of any person becoming entitled by operation of law or otherwise to a share or shares inconsequence of the death, incompetence or bankruptcy upon such evidence being produced as may reasonably be required by the directors.51.Any person who has become entitled to a share or shares in consequence of the death, incompetence or bankruptcy of any member may, instead of beingregistered himself, request in writing that some person to be named by him be registered as the transferee of such share or shares and such request shalllikewise be treated as if it were a transfer.52.What amounts to incompetence on the part of a person is a matter to be determined by the court having regard to all the relevant evidence and thecircumstances of the case.REDUCTION OR INCREASE IN AUTHORISED AND UNISSUED SHARES48.The Company may amend the Memorandum to increase or reduce the maximum number of shares the Company is authorised to issue and may in respect ofany unissued shares increase or reduce the number of such shares, or effect any combination of the foregoing.49.The Company may(1)(a) divide its shares, including issued shares, into a larger number of shares; or (b) combine its shares, including issued shares, into a smallernumber of shares.(2)A division or combination of shares, including issued shares, of a class or series shall be for a larger or smaller number, as the case may be, ofshares in the same class or series.(3)A company shall not divide its shares under subsection (1)(a) or (2) if it would cause the maximum number of shares that the Company isauthorised to issue by its memorandum to be exceeded.(4)Where shares are divided or combined under this article, the aggregate par value of the new shares must be equal to the aggregate par value of theoriginal shares.MEETINGS AND CONSENTS OF MEMBERS50.The directors of the Company may convene meetings of the members of the Company at such times and in such manner and places within or outside theBritish Virgin Islands as the directors consider necessary or desirable. The Company may hold an annual general meeting, but shall not (unless required bythe applicable rules of the Designated Stock Exchange for so long as the Company’s Securities are listed or traded on the Designated Stock Exchange) beobliged to hold an annual general meeting.51.Upon the written request of members holding 30 percent or more of the outstanding voting shares in the Company the directors shall convene a meeting ofmembers.1252.The directors shall give not less than 7 days notice of meetings of members to those persons whose names on the date the notice is given appear asmembers in the share register of the Company and are entitled to vote at the meeting.53.The directors may fix the date notice is given of a meeting of members as the record date for determining those shares that are entitled to vote at themeeting.54.A meeting of members may be called on short notice:(a)if members holding not less than 90 percent of the total number of shares entitled to vote on all matters to be considered at the meeting, or 90percent of the votes of each class or series of shares where members are entitled to vote thereon as a class or series together with not less than a90 percent majority of the remaining votes, have agreed to short notice of the meeting, or(b)if all members holding shares entitled to vote on all or any matters to be considered at the meeting have waived notice of the meeting and for thispurpose presence at the meeting shall be deemed to constitute waiver.55.The inadvertent failure of the directors to give notice of a meeting to a member, or the fact that a member has not received notice, does not invalidate themeeting.56.A member may be represented at a meeting of members by a proxy who may speak and vote on behalf of the member.57.The instrument appointing a proxy shall be produced at the place appointed for the meeting before the time for holding the meeting at which the personnamed in such instrument proposes to vote.58.An instrument appointing a proxy shall be in substantially the following form or such other form as the Chairman of the meeting shall accept as properlyevidencing the wishes of the member appointing the proxy.(Name of Company)I/Webeing a member of the aboveCompany withshares HEREBY APPOINTofor failing himofto be my/our proxy to vote for me/us at the meeting of members to be held on the dayofand at any adjournment thereof.(Any restrictions on voting to be inserted here.)Signed this day ofMember59.The following shall apply in respect of joint ownership of shares:a.if two or more persons hold shares jointly each of them may be present in person or by proxy at a meeting of members and may speak as a member;b.if only one of the joint owners is present in person or by proxy he may vote on behalf of all joint owners, andc.if two or more of the joint owners are present in person or by proxy they must vote as one.60.A member shall be deemed to be present at a meeting of members if he participates by telephone or other electronic means and all members participating inthe meeting are able to hear each other.61.A meeting of members is duly constituted if, at the commencement of the meeting, there are present in person or by proxy not less than 50 percent of thevotes of the shares or class or series of shares entitled to vote on resolutions of members to be considered at the meeting. If a quorum be present,notwithstanding the fact that such quorum may be represented by only one person then such person may resolve any matter and a certificate signed bysuch person accompanied where such person be a proxy by a copy of the proxy form shall constitute a valid resolution of members.1362.If within two hours from the time appointed for the meeting a quorum is not present, the meeting, if convened upon the requisition of members, shall bedissolved; in any other case it shall stand adjourned to the next business day at the same time and place or to such other time and place as the directorsmay determine, and if at the adjourned meeting there are present within one hour from the time appointed for the meeting in person or by proxy not lessthan one third of the votes of the shares or each class or series of shares entitled to vote on the resolutions to be considered by the meeting, those presentshall constitute a quorum but otherwise the meeting shall be dissolved.63.At every meeting of members, the Chairman of the Board of Directors shall preside as chairman of the meeting. If there is no Chairman of the Board ofDirectors or if the Chairman of the Board of Directors is not present at the meeting, the members present shall choose some one of their number to be thechairman. If the members are unable to choose a chairman for any reason, then the person representing the greatest number of voting shares present inperson or by prescribed form of proxy at the meeting shall preside as chairman failing which the oldest individual member or representative of a memberpresent shall take the chair.64.The chairman may, with the consent of the meeting, adjourn any meeting from time to time, and from place to place, but no business shall be transacted atany adjourned meeting other than the business left unfinished at the meeting from which the adjournment took place.65.At any meeting of the members the chairman shall be responsible for deciding in such manner as he shall consider appropriate whether any resolution hasbeen carried or not and the result of his decision shall be announced to the meeting and recorded in the minutes thereof. If the chairman shall have anydoubt as to the outcome of any resolution put to the vote, he shall cause a poll to be taken of all votes cast upon such resolution, but if the chairman shallfail to take a poll then any member present in person or by proxy who disputes the announcement by the chairman of the result of any vote mayimmediately following such announcement demand that a poll be taken and the chairman shall thereupon cause a poll to be taken. If a poll is taken at anymeeting, the result thereof shall be duly recorded in the minutes of that meeting by the chairman.66.Any person other than an individual shall be regarded as one member and subject to the specific provisions hereinafter contained for the appointment ofrepresentatives of such persons the right of any individual to speak for or represent such member shall be determined by the law of the jurisdiction where,and by the documents by which, the person is constituted or derives its existence. In case of doubt, the directors may in good faith seek legal advice fromany qualified person and unless and until a court of competent jurisdiction shall otherwise rule, the directors may rely and act upon such advice withoutincurring any liability to any member.67.Any person other than an individual which is a member of the Company may by resolution of its directors or other governing body authorize such personas it thinks fit to act as its representative at any meeting of the Company or of any class of members of the Company, and the person so authorized shall beentitled to exercise the same powers on behalf of the person which he represents as that person could exercise if it were an individual member of theCompany.68.The chairman of any meeting at which a vote is cast by proxy or on behalf of any person other than an individual may call for a notarially certified copy ofsuch proxy or authority which shall be produced within 7 days of being so requested or the votes cast by such proxy or on behalf of such person shall bedisregarded.69.Directors of the Company may attend and speak at any meeting of members of the Company and at any separate meeting of the holders of any class orseries of shares in the Company.70.An action that may be taken by the members at a meeting may also be taken by a resolution of members consented to in writing or by telex, telegram, cable,facsimile or other written electronic communication, without the need for any notice, but if any resolution of members is adopted otherwise than by theunanimous written consent of all members, a copy of such resolution shall forthwith be sent to all members not consenting to such resolution. The consentmay be in the form of counterparts, each counterpart being signed by one or more members.14DIRECTORS71.The first directors of the Company shall be appointed by the first registered agent of the Company and thereafter the directors shall be appointed byresolution of members, subject to Article 78, for such term as the members determine. A person shall not be appointed as a director unless he hasconsented in writing to be a director.72.The minimum number of directors shall be one and the maximum number shall be 20. Unless otherwise determined by the Company in a meeting ofshareholders and subject to the requirements of the Memorandum, the directors may by a Resolution of Directors, amend this Regulation 72 to change thenumber of directors. For as long as Securities of the Company are listed or traded on the Designated Stock Exchange, the directors shall include suchnumber of Independent Directors as applicable law, rules or regulations of the Designated Stock Exchange may require for a foreign private issuer as longas the Company is a foreign private issuer.73.Each director shall hold office for the term, if any, fixed by resolution of members or until his earlier death, resignation or removal.74.Where the Company has only one member who is an individual and that member is also the sole director of the Company, that sole member/director may, byinstrument in writing, nominate a person who is not disqualified from being a director of the Company under section 111(1) of the Act as a reserve directorof the Company to act in the place of the sole director in the event of his death.75.The nomination of a person as a reserve director of the Company ceases to have effect if;a.before the death of the sole member/director who nominated him;(i)he resigns as reserve director, or(ii)the sole member/director revokes the nomination in writing; orb.the sole member/director who nominated him ceases to be the sole member/director of the Company for any reason other than his death.76.A director may be removed from office, with or without cause, by a resolution of directors or a resolution of members. For the purposes of this Regulation76, “cause” means the willful and continuous failure by a director to substantially perform his duties to the Company (other than any such failure resultingfrom incapacity due to physical or mental illness) or the willful engaging by the director in gross misconduct materially and demonstrably injurious to theCompany. If a director is removed from office without cause by a resolution of the members, for the purposes of this Regulation, the resolution of memberswill require the affirmative vote of the holders of 66 2/3 percent or more of the outstanding votes of the shares entitled to vote thereon.77.A director may resign his office by giving written notice of his resignation to the Company and the resignation shall have effect from the date the notice isreceived by the Company or from such later date as may be specified in the notice. A director of the Company shall resign forthwith if he is, or becomes,disqualified to act as a director under the Act.78.The directors may at any time by resolution of directors appoint any person to be a director to fill a vacancy. There is a vacancy if a director dies orotherwise ceases to hold office as a director prior to the expiration of his term of office, where his term of office was fixed upon his appointment. Thedirectors may not appoint a director to fill a vacancy for a term exceeding the term that remained when the person who has ceased to be a director left orotherwise ceased to hold office.79.The Company shall keep a register of directors containing:a.the names and addresses of the persons who are directors of the Company or who have been nominated as reserve directors of the Company;b.the date on which each person whose name is entered in the register was appointed as a director of the Company or nominated as a reservedirector of the Company;c.the date on which each person named as a director ceased to be a director of the Company;d.the date on which the nomination of any person nominated as a reserve director ceased to have effect; ande.such other information as may be prescribed pursuant to the Act.1580.The original or a copy of any register of directors shall be kept at the office of the registered agent of the Company.81.The register of directors may be in any such form as the directors may approve but if it is in magnetic, electronic or other data storage form, the companymust be able to produce legible evidence of its contents.82.With the prior or subsequent approval by a resolution of members, the directors may, by a resolution of directors, fix the emoluments of directors withrespect to services to be rendered in any capacity to the Company.83.A director shall not require a share qualification and may be an individual or a company.POWERS OF DIRECTORS84.The business and affairs of the Company shall be managed by the directors who may pay all expenses incurred preliminary to and in connection with theformation and registration of the Company and may exercise all such powers of the Company as are not by the Act or by the Memorandum or theseArticles required to be exercised by the members of the Company, subject to any delegation of such powers as may be authorized by these Articles and tosuch requirements as may be prescribed by a resolution of members; but no requirement made by a resolution of members shall prevail if it be inconsistentwith these Articles nor shall such requirement invalidate any prior act of the directors which would have been valid if such requirement had not been made.Notwithstanding anything in Section 175 of the Act the directors shall have the power to sell, transfer, lease, exchange or otherwise dispose of more thanfifty percent of the assets of the Company without submitting a proposal to or obtaining the consent of the members of the Company.85.If the Company is a whollyowned subsidiary of a holding company a director may when exercising powers or performing duties as a director act in amanner which he believes is in the best interests of the holding company even though it may not be in the best interests of the Company.86.The directors may, by a resolution of directors, appoint any person, including a person who is a director, to be an officer or agent of the Company. Theresolution of directors appointing an agent may authorize the agent to appoint one or more substitutes or delegates to exercise some or all of the powersconferred on the agent by the Company.87.Every officer or agent of the Company has such powers and authority of the directors, including the power and authority to affix the Seal, as are set forth inthese Articles or in the resolution of directors appointing the officer or agent, except that no agent has any power or authority with respect to thefollowing;a.to amend the memorandum or articles;b.to change the registered office or agent;c.to designate committees of directors;d.to delegate powers to a committee of directors;e.to appoint or remove directors;f.to appoint or remove an agent;g.to fix emoluments of directors;h.to approve a plan of merger, consolidation or arrangement;i.to make a declaration of solvency for the purposes of section 198(1)(a) of the Act or to approve a liquidation plan;j.to make a determination under section 57(1) of the Act that the company will, immediately after a proposed distribution, satisfy the solvency test;ork.to authorise the Company to continue as a company incorporated under the laws of a jurisdiction outside the British Virgin Islands.1688.Any director which is a body corporate may appoint any person its duly authorized representative for the purpose of representing it at meetings of theBoard of Directors or with respect to unanimous written consents.89.The continuing directors may act notwithstanding any vacancy in their body, save that if their number is reduced to their knowledge below the numberfixed by or pursuant to these Articles as the necessary quorum for a meeting of directors, the continuing directors or director may act only for the purposeof appointing directors to fill any vacancy that has arisen or for summoning a meeting of members.90.The directors may by resolution of directors exercise all the powers of the Company to borrow money and to mortgage or charge its undertakings andproperty or any part thereof, to issue debentures, debenture stock and other securities whenever money is borrowed or as security for any debt, liability orobligation of the Company or of any third party.91.All cheques, promissory notes, drafts, bills of exchange and other negotiable instruments and all receipts for moneys paid to the Company, shall be signed,drawn, accepted, endorsed or otherwise executed, as the case may be, in such manner as shall from time to time be determined by resolution of directors.92.The Company shall keep a register of all relevant charges created by the Company showing:a.if the charge is a charge created by the Company, the date of its creation or if the charge is existing on property acquired by the Company, the dateon which the property was acquired;b.a short description of the liability secured by the charge;c.a short description of the property charged;d.the name and address of the trustee for the security, or if there is no such trustee the name and address of the chargee;e.unless the charge is a security to bearer, the name and address of the holder of the charge;f.details of any prohibition or restriction , if any, contained in the instrument creating the charge on the power of the company to create any futurecharge ranking in priority to or equally with the charge; andg.such other information as may be prescribed pursuant to the Act.93.The original or a copy of the register of charges shall be kept at the registered office of the Company or at the office of the registered agent of the Company.PROCEEDINGS OF DIRECTORS94.The directors of the Company or any committee thereof may meet at such times and in such manner and places within or outside the British Virgin Islandsas the directors may determine to be necessary or desirable. Any one or more directors may convene a meeting of directors.95.A director shall be deemed to be present at a meeting of directors if he participates by telephone or other electronic means and all directors participating inthe meeting are able to hear each other.96.A director shall be given not less than 3 days notice of meetings of directors, but a meeting of directors held without 3 days notice having been given to alldirectors shall be valid if all the directors entitled to vote at the meeting who do not attend, waive notice of the meeting and for this purpose, the presenceof a director at a meeting shall constitute waiver on his part. The inadvertent failure to give notice of a meeting to a director, or the fact that a director hasnot received the notice, does not invalidate the meeting.1797.A director may by a written instrument appoint an alternate who need not be a director and an alternate is entitled to attend meetings in the absence of thedirector who appointed him and to vote or consent in place of the director.98.A meeting of directors is duly constituted for all purposes if at the commencement of the meeting there are present in person or by alternate not less thanone half of the total number of directors, unless there are only 2 directors in which case the quorum shall be 2.99.If the Company shall have only one director the provisions herein contained for meetings of the directors shall not apply but such sole director shall havefull power to represent and act for the Company in all matters as are not by the Act or the Memorandum or these Articles required to be exercised by themembers of the Company and in lieu of minutes of a meeting shall record in writing and sign a note or memorandum of all matters requiring a resolution ofdirectors. Such a note or memorandum shall constitute sufficient evidence of such resolution for all purposes.100.At every meeting of the directors the Chairman of the Board of Directors shall preside as chairman of the meeting. If there is no Chairman of the Board ofDirectors or if the Chairman of the Board of Directors is not present at the meeting the Vice Chairman of the Board of Directors shall preside. If there is noVice Chairman of the Board of Directors or if the Vice Chairman of the Board of Directors is not present at the meeting the directors present shall choosesome one of their number to be chairman of the meeting.101.An action that may be taken by the directors or a committee of directors at a meeting may also be taken by a resolution of directors or a committee ofdirectors consented to in writing or by telex, telegram, cable, facsimile or other written electronic communication by all directors or all members of thecommittee as the case may be, without the need for any notice. The consent may be in the form of counterparts, each counterpart being signed by one ormore directors.102.The directors shall cause the following records to be kept:a.minutes of all meetings of directors, members, committees of directors and committees of members; andb.copies of all resolutions consented to by directors, members, committees of directors and committees of members.103.The resolutions, records and minutes referred to in the preceding Article shall be kept at the registered office of the Company, its principal place ofbusiness or at such other place as the directors determine.104.The directors may, by resolution of directors, designate one or more committees, each consisting of one or more directors.105.Subject to the following Article, each committee of directors has such powers and authorities of the directors, including the power and authority to affix theSeal, as are set forth in the resolution of directors establishing the committee.106.The directors have no power to delegate the following powers to a committee of directors;a.to amend the memorandum or articles;b.to change the registered office or agent;c.to designate committees of directors;d.to delegate powers to a committee of directors;e.to appoint or remove directors;f.to appoint or remove an agent;g.to fix emoluments of directors;18h.to approve a plan of merger, consolidation or arrangement;i.to make a declaration of solvency for the purposes of section 198(1)(a) or to approve a liquidation plan;j.to make a determination under section 57(1) that the company will, immediately after a proposed distribution, satisfy the solvency test; ork.to authorise the company to continue as a company incorporated under the laws of a jurisdiction outside the British Virgin Islands.Paragraphs (c) and (d) do not prevent a committee of directors, where authorised by the directors, from appointing a subcommittee and delegating powersexercisable by the committee to the subcommittee.107.The meetings and proceedings of each committee of directors consisting of 2 or more directors shall be governed mutatis mutandis by the provisions ofthese Articles regulating the proceedings of directors so far as the same are not superseded by any provisions in the resolution establishing the committee.108.Without prejudice to the freedom of the directors to establish any other committee, if the shares (or depositary receipts therefore) are listed or quoted onthe Designated Stock Exchange, and if required by the Designated Stock Exchange, the directors shall establish and maintain an audit committee as acommittee of the board of directors, the composition and responsibilities of which shall comply with the rules and regulations of the SEC and theDesignated Stock Exchange. The audit committee shall meet at least once every financial quarter, or more frequently as circumstances dictate.109.The Company shall adopt a formal written audit committee charter and review and assess the adequacy of the formal written charter on an annual basis.The charter shall specify the responsibilities of the Audit Committee which shall include responsibility for, among other things, ensuring its receipt from theoutside auditors of the Company of a formal written statement delineating all relationships between the auditor and the Company, and the AuditCommittee’s responsibility for actively engaging in a dialogue with the auditor with respect to any disclosed relationships or services that may impact theobjectivity and independence of the auditor take appropriate action to oversee the independence of the outside auditor. In addition, the Audit Committee isresponsible for reviewing potential conflict of interest situations and approving all Related Party Transactions.110.Without prejudice to the freedom of the directors to establish any other committees, the Board may establish a Stock Option Committee to administer theCompany’s stock option plans, including authority to make and modify awards under such plans. For so long as the Securities of the Company are listed ortraded on the Designated Stock Exchange, the Stock Option Committee shall have at least two Independent Directors. The Stock Option Committee willadminister the Company’s stock option plans, including the authority to make and modify awards under such plans.111.Without prejudice to the freedom of the directors to establish any other committees, the Board may establish a Nominating Committee to assist the Board inidentifying qualified individuals to become members of the Board.OFFICERS112.The Company may by resolution of directors appoint officers of the Company at such times as shall be considered necessary or expedient. Such officersmay consist of a Chairman of the Board of Directors, a Vice Chairman of the Board of Directors, a President and one or more Vice Presidents, Secretaries andTreasurers and such other officers as may from time to time be deemed desirable. Any number of offices may be held by the same person.113.The officers shall perform such duties as shall be prescribed at the time of their appointment subject to any modification in such duties as may beprescribed thereafter by resolution of directors or resolution of members, but in the absence of any specific allocation of duties it shall be the responsibilityof the Chairman of the Board of Directors to preside at meetings of directors and members, the Vice Chairman to act in the absence of the Chairman, thePresident to manage the day to day affairs of the Company, the Vice Presidents to act in order of seniority in the absence of the President but otherwise toperform such duties as may be delegated to them by the President, the Secretaries to maintain the share register, minute books and records (other thanfinancial records) of the Company and to ensure compliance with all procedural requirements imposed on the Company by applicable law, and the Treasurerto be responsible for the financial affairs of the Company.19114.Subject to the rules of the Designated Stock Exchange, the emoluments of all officers shall be fixed by resolution of directors.115.The officers of the Company shall hold office until their successors are duly elected and qualified, but any officer elected or appointed by the directors maybe removed at any time, with or without cause, by resolution of directors. Any vacancy occurring in any office of the Company may be filled by resolutionof directors.CONFLICT OF INTERESTS116.A director of the Company shall, forthwith after becoming aware of the fact that he is interested in a transaction entered into or to be entered into by theCompany, disclose the interest to all other directors of the Company.117.A director of the Company is not required to comply with Article 112 if;a.the transaction or proposed transaction is between the director and the Company; andb.the transaction or proposed transaction is or is to be entered into in the ordinary course of the company’s business and on usual terms andconditions.118.For the purposes of Article 112 a disclosure to all other directors to the effect that a director is a member, director or officer of another named entity or has afiduciary relationship with respect to the entity or a named individual and is to be regarded as interested in any transaction which may, after the date of theentry or disclosure, be entered into with that entity or individual, is a sufficient disclosure of interest in relation to that transaction.119.A.A director of the Company who is interested in a transaction entered into or to be entered into by the Company may:(i)vote on a matter relating to the transaction;(ii)attend a meeting of directors at which a matter relating to the transaction arises and be included among the directors present at the meeting for thepurposes of a quorum; and(iii)sign a document on behalf of the Company, or do any other thing in his capacity as a director, that relates to the transaction,and, subject to compliance with the Act shall not, by reason of his office be accountable to the Company for any benefit which he derives from suchtransaction and no such transaction shall be liable to be avoided on the grounds of any such interest or benefit.119.B.For so long the Securities of the Company are listed or traded on the Designated Stock Exchange, the Company shall conduct an appropriate review of allmaterial Related Party Transactions on an ongoing basis and shall utilize the Audit Committee for the review and approval of potential conflicts of interestsituations.INDEMNIFICATION120.Subject to the limitations hereinafter provided the Company may indemnify against all expenses, including legal fees, and against all judgments, fines andamounts paid in settlement and reasonably incurred in connection with legal, administrative or investigative proceedings any person who;a.is or was a party or is threatened to be made a party to any threatened, pending or completed proceedings, whether civil, criminal, administrative orinvestigative, by reason of the fact that the person is or was a director, an officer or a liquidator of the Company; orb.is or was, at the request of the Company, serving as a director of, or in any other capacity is or was acting for, another body corporate or apartnership, joint venture, trust or other enterprise.20121.The Company may only indemnify a person if the person acted honestly and in good faith in what he believed to be in the best interests of the Companyand, in the case of criminal proceedings, the person had no reasonable cause to believe that his conduct was unlawful.122.For the purposes of the preceding Article, a director acts in the best interests of the Company if he acts in the best interests of;a.the Company’s holding company; orb.a shareholder or shareholders of the Company; in either case, in the circumstances specified in Article 85.123.The decision of the directors as to whether the person acted honestly and in good faith and with a view to the best interests of the Company and as towhether the person had no reasonable cause to believe that his conduct was unlawful is, in the absence of fraud, sufficient for the purposes of theseArticles, unless a question of law is involved.124.The termination of any proceedings by any judgment, order, settlement, conviction or the entering of a nolle prosequi does not, by itself, create apresumption that the person did not act honestly and in good faith and with a view to the best interests of the Company or that the person had reasonablecause to believe that his conduct was unlawful.Consolidated Statements of Changes in Stockholder’s EquityF5Consolidated Statements of Cash FlowsF6Notes to Consolidated Financial StatementsF7 F22F1REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRMTo the Shareholder and the Sole Director ofLK Technology Ltd.Opinion on the Consolidated Financial StatementsWe have audited the accompanying consolidated balance sheets of LK Technology Ltd. and. subsidiaries (the “Company”) as of December 31, 2017 and 2016, andthe related consolidated statements of operations and comprehensive loss, changes in shareholder’s equity and cash flows for each of the years then ended, andthe related notes (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in allmaterial respects, the consolidated financial position of the Company as of December 31, 2017 and 2016, and the consolidated results of its operations and its cashflows for each of the years then ended, in conformity with accounting principles generally accepted in the United States of America.Basis for OpinionThese consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’sconsolidated financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (UnitedStates) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules andregulations of the Securities and Exchange Commission and the PCAOB.We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonableassurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have,nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internalcontrol over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting.Accordingly, we express no such opinion.An independent member firm of Moore Stephens International Limited – members in principal cities throughout the worldOur audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, andperforming procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in theconsolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well asevaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion.Certified Public AccountantsWe have served as the Company’s auditor since 2018.Hong KongMay 25, 2018F2LK TECHNOLOGY LTD. AND SUBSIDIARIESCONSOLIDATED BALANCE SHEETS(IN U.S. DOLLARS)As of December 31,20172016AssetsCurrent assets:Cash and cash equivalents$72,379$83,843Accounts receivable, net of allowance for doubtful accounts9,729,6251,865,836Other receivables and prepayment2,376,7452,287,934Amounts due from related parties11,760,692Total current assets23,939,4414,237,613Property and equipment, net5,044,8727,771,027Intangible assets, net1,154,1971,682,445Goodwill7,239,9367,239,936Amount due from a related party204,412183,811TOTAL ASSETS37,582,85821,114,832LiabilitiesCurrent liabilities:Accounts payable8,784,5186,446,584Accrued liabilities and other payables12,962,91211,329,613Amounts due to related parties3,563,68316,129,323Total current liabilities25,311,11333,905,520Total liabilities25,311,11333,905,520Commitments and contingenciesShareholder’s Equity (Deficit)Share capitalCommon stock, $1 par value per share; 50,000 shares authorized as of December 31, 2017 and 2016, 1 share issued andoutstanding as of December 31, 2017 and 201611Additional paidin capital41,819,68510,037,469Accumulated deficit(29,936,158)(23,125,704)Accumulated other comprehensive income (loss)388,217297,546Total Shareholder’s Equity (Deficit)12,271,745(12,790,688)TOTAL LIABILITIES AND SHAREHOLDER’S EQUITY (DEFICIT)$37,582,858$21,114,832F3LK TECHNOLOGY LTD. AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS(IN U.S. DOLLARS)For the years endedDecember 31,20172016Revenues$26,082,417$5,233,145Less: Cost of revenues5,547,7796,315,504Less: Operating expenses:Selling and marketing23,908,7336,209,804General and administrative2,451,2492,108,854Research and development1,046,1982,882,202Total operating expenses27,406,18011,200,860Loss from operations(6,871,542)(12,283,219)Other income (expense):Interest expense(26,611)(4,412)Foreign exchange gains (losses)350,679(298,257)Loss from investment(428,571)Other income (expense), net(262,980)(34,572)Total other income (expense), net61,088(765,812)Loss before income taxes(6,810,454)(13,049,031)Income taxesNet loss$(6,810,454)$(13,049,031)Other comprehensive income:Foreign currency translation adjustment90,671387,375Total comprehensive loss$(6,719,783)$(12,661,656)F4LK TECHNOLOGY LTD. AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDER’S EQUITY(IN U.S. DOLLARS)Accumulated otherTotalOrdinary sharesAdditionalpaidin AccumulatedcomprehensiveIncomeShareholder’sEquity SharesAmountcapitaldeficits(loss)(Deficit)Balance as of December 31, 20151$ 1$8,250,505$(10,076,673)$(89,829)$(1,915,996)Capital contribution from C Media1,786,9641,786,964Net loss(13,049,031)(13,049,031)Foreign currency translation adjustment387,375387,375Balance as of December 31, 20161110,037,469(23,125,704)297,546(12,790,688)Capital contribution from C Media31,782,21631,782,216Net loss(6,810,454)(6,810,454)Foreign currency translation adjustment90,67190,671Balance as of December 31, 20171$1$41,819,685$(29,936,158)$388,217$12,271,745F5LK TECHNOLOGY LTD. AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF CASH FLOWS(IN U.S. DOLLARS)For the years endedDecember 31,20172016CASH FLOWS FROM OPERATING ACTIVITIES:Net loss$(6,810,454)$(13,049,031)Depreciation and amortization3,316,1813,245,161Loss on disposal of property and equipment115,19373,022Increase in allowance for doubtful accounts445,39562,591Changes in assets and liabilitiesAccounts receivable(7,933,730)(1,507,296)Other receivables and prepayment(2,202,960)2,873,984Accounts payable2,230,5434,757,457Accrued liabilities and other payables1,866,1377,483,441Net cash (used in) provided by operating activities(8,973,695)3,939,329CASH FLOWS FROM INVESTING ACTIVITIES:Purchase of property and equipment(12,689)(3,554,258)Proceeds from disposal of property and equipment29,942Net cash provided by (used in) investing activities17,253(3,554,258)CASH FLOWS FROM FINANCING ACTIVITIES:Advances from related parties8,938,290(1,197,870)Net cash provided by (used in) financing activities8,938,290(1,197,870)Effect of exchange rate changes6,688(32,746)Net decrease in cash and cash equivalents(11,464)(845,545)Cash and cash equivalents, at beginning of year83,843929,388Cash and cash equivalents, at end of year$72,379$83,843Supplemental cash flow disclosures:Interest paid26,6114,412Income taxes paidF6LK TECHNOLOGY LTD. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS(IN U.S. DOLLARS)NOTE 1 – DESCRIPTION OF BUSINESS AND ORGANIZATIONStar Chariot Limited was incorporated in the British Virgin Islands (“BVI”) as an exempted limited liability company on March 3, 2011. On January 18, 2018, it wasrenamed as LK Technology Ltd. (“LK Technology ” or the “Company”).LK Technology, its subsidiaries and its variable interest entities (“VIEs”) (collectively the “Group”) operate mobile application service for longdistance travel in thePeople’s Republic of China (the “PRC”). The core mobile application product, Luokuang, is made as an LBSsocial contents and services distribution platform. Itoffers functions based on various travel scenarios, e.g. information, entertainment, travel, ecommerce, O2O, advertising, etc.As of December 31, 2017, details of the Company’s subsidiaries and VIEs are as follows:NameDate ofincorporationPlace ofincorporationPercentage oflegal ownershipSubsidiaries:MMB LimitedApr 11, 2013Hong Kong100%Mobile Media (China) LimitedNov 6, 2007Hong Kong100%Zhong Chuan Tian Xia Information and Technology (Beijing) LimitedFeb 1, 2013PRC100%Zhong Chuan Tian Xia Information and Technology (Shenzhen) LimitedDec 23, 2010PRC100%VIEs:Beijing Zhong Chuan Shi Xun Technology Limited (“Zhong Chuan Shi Xun”)May 17, 2004PRC100%Jiangsu Zhong Chuan Rui You Information and Technology Limited (“Zhong Chuan Rui You”)May 26, 2011PRC100%Huoerguosi Luokuang Information and Technology Limited (“Huoerguosi Luokuang”)Jul 19, 2017PRC100%Shenzhen Jiu Zhou Shi Dai Digital and Technology Limited (“Jiu Zhou Shi Dai”)Nov 26, 2004PRC100%F7NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIESBasis of presentationThe consolidated financial statements of the Group have been prepared in accordance with accounting principles generally accepted in the United States of America(“US GAAP”).The Group incurred losses from operations of $6,871,542 and $12,283,219 for the years ended December 31, 2017 and 2016, respectively. As of December 31, 2017, theGroup had a shareholder’s equity of $12,271,145. The Group had negative cash flows from operating activities for the year ended December 31, 2017 of $8,973,695.As of December 31, 2017, the Group had cash and cash equivalents of $72,379 and a working capital deficit of $1,371,672. From 2018 and onwards, the Group willfocus on improving operation efficiency and cost reduction, and enhancing marketing functions to attract more users. The Group regularly monitors its current andexpected liquidity requirements to ensure that it maintains sufficient cash balances and accessible credit to meet its liquidity requirements in the short and long term.The parent company continues to provide cash flow to the Group. Based on working capital conditions and forecast for future operations, the Group believes that itwill be able to meet its payment obligations and other commitments for at least the following twelve months.Principles of consolidationThe consolidated financial statements include the financial statements of the Company, its subsidiaries, including the whollyforeign owned enterprises (“WFOEs”),and VIEs for which the Company is the primary beneficiary. All transactions and balances among the Company, its subsidiaries and consolidated VIEs have beeneliminated upon consolidation. The results of subsidiaries and consolidated VIEs acquired or disposed of are recorded in the consolidated statements of operationsfrom the effective date of acquisition or up to the effective date of disposal, as appropriate.A subsidiary is an entity in which (i) the Company directly or indirectly controls more than 50% of the voting power; or (ii) the Company has the power to appoint orremove the majority of the members of the board of directors or to cast a majority of votes at the meeting of the board of directors or to govern the financial andoperating policies of the investee pursuant to a statute or under an agreement among the shareholders or equity holders. A VIE is required to be consolidated by theprimary beneficiary of the entity if the equity holders in the entity do not have the characteristics of a controlling financial interest or do not have sufficient equity atrisk for the entity to finance its activities without additional subordinated financial support from other parties.F8To comply with the PRC legal restrictions on foreign ownership of companies that operate mobile application services, the Group operates in such restricted servicesin the PRC through certain PRC domestic companies, whose equity interests are held by certain management members or founders of the Group. Part of theregistered capital of these PRC domestic companies was funded by certain management members or founders of the Group. The Group has entered into certainexclusive business services agreements with these PRC domestic companies, which entitle it to receive a majority of their residual returns and make it obligatory forthe Group to absorb a majority of the risk of losses from their activities. In addition, the Group has entered into certain agreements with those management membersor founders, including equity interest pledge agreements of the equity interests held by those management members or founders and exclusive option agreements toacquire the equity interests in these companies when permitted by the PRC laws, rules and regulations.Details of the typical VIE structure of the Group’s significant consolidated VIEs, primarily domestic companies associated with the operations such as Zhong ChuanShi Xun, Zhong Chuan Rui You, Huoerguosi Luokuang and Jiu Zhou Shi Dai, are set forth below:(i)Contracts that give the Group effective control of VIEsExclusive option agreementsThe VIE equity holders have granted the WFOEs exclusive call options to purchase their equity interest in the VIEs at an exercise price equal to the higherof (i) the registered capital in the VIEs; and (ii) the minimum price as permitted by applicable PRC laws. Each relevant VIE has further granted the relevantWFOE an exclusive call option to purchase its assets at an exercise price equal to the book value of the assets or the minimum price as permitted byapplicable PRC laws, whichever is higher. The WFOEs may nominate another entity or individual to purchase the equity interest or assets, if applicable,under the call options. Each call option is exercisable subject to the condition that applicable PRC laws, rules and regulations do not prohibit completion ofthe transfer of the equity interest or assets pursuant to the call option. Each WFOE is entitled to all dividends and other distributions declared by the VIE,and the VIE equity holders have agreed to give up their rights to receive any distributions or proceeds from the disposal of their equity interests in the VIEwhich are in excess of the original registered capital that they contributed to the VIE, and to pay any such distributions or premium to the WFOE. Theexclusive call option agreements remain in effect until the equity interest or assets that are the subject of such agreements are transferred to the WFOEs.Equity pledge agreementsPursuant to the relevant equity pledge agreements, the relevant VIE equity holders have pledged all of their interests in the equity of the VIEs as acontinuing first priority security interest in favor of the corresponding WFOEs to secure the performance of obligations by the VIEs and/or the equityholders under the other structure contracts. Each WFOE is entitled to exercise its right to dispose of the VIE equity holders’ pledged interests in the equityof the VIE and has priority in receiving payment by the application of proceeds from the auction or sale of such pledged interests, in the event of anybreach or default under the loan agreement or other structure contracts, if applicable. These equity pledge agreements remain in force for the duration ofthe relevant loan agreement and other structure contracts.F9(ii)Contracts that enable the Group to receive substantially all of the economic benefits from the VIEsExclusive business services agreementsEach relevant VIE has entered into an exclusive business services agreement with the respective WFOE, pursuant to which the relevant WFOE providesexclusive business services to the VIE. In exchange, the VIE pays a service fee to the WFOE which typically amounts to what would be substantially all ofthe VIE’s pretax profit, resulting in a transfer of substantially all of the profits from the VIE to the WFOE.Other arrangementsThe exclusive call option agreements described above also enable the Group to receive substantially all of the economic benefits from the VIEs by typicallyentitling the WFOEs to all dividends and other distributions declared by the VIEs and to any distributions or proceeds from the disposal by the VIE equityholders of their equity interests in the VIEs that are in excess of the original registered capital that they contributed to the VIEs.Based on these contractual agreements, the Group believes that the PRC domestic companies as described above should be considered as VIEs because the equityholders do not have significant equity at risk nor do they have the characteristics of a controlling financial interest. Given that the Group is the primary beneficiaryof these PRC domestic companies, the Group believes that these VIEs should be consolidated based on the structure as described above.Under the contractual arrangements with the consolidated VIEs, the Group has the power to direct activities of the consolidated VIEs and can have assetstransferred out of the consolidated VIEs under its control. Therefore, the Group considers that there is no asset in any of the consolidated VIEs that can be usedonly to settle obligations of the consolidated VIEs, except for registered capital and PRC statutory reserves. As all consolidated VIEs are incorporated as limitedliability companies under the Company Law of the PRC, creditors of the consolidated VIEs do not have recourse to the general credit of the Group for any of theliabilities of the consolidated VIEs.Currently there is no contractual arrangement which requires the Group to provide additional financial support to the consolidated VIEs. However, as the Groupconducts its businesses primarily based on the licenses and approvals held by its consolidated VIEs, the Group has provided and will continue to provide financialsupport to the consolidated VIEs considering the business requirements of the consolidated VIEs, as well as the Group’s own business objectives in the future.F10Use of estimatesThe preparation of financial statements in conformity with US GAAP requires the Group to make estimates and assumptions that affect the reported amounts ofassets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expensesduring the reporting period. The most significant estimates are the allowance for doubtful accounts, the useful lives of property and equipment and intangibleassets, impairment of longlived assets and goodwill. Actual results could differ from those estimates.Fair value measurementsFair value is the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at themeasurement date under current market conditions. When determining the fair value measurements for assets and liabilities required or permitted to be recorded atfair value, the Group considers the principal or most advantageous market in which it would transact and it considers assumptions that market participants woulduse when pricing the asset or liability.Authoritative literature provides a fair value hierarchy which prioritizes the inputs to valuation techniques used to measure fair value into three broad levels. Thelevel in the hierarchy within which the fair value measurement in its entirety falls is based upon the lowest level of input that is significant to the fair valuemeasurement as follows:Level 1Level 1 applies to assets or liabilities for which there are quoted prices in active markets for identical assets or liabilities.Level 2Level 2 applies to assets or liabilities for which there are inputs other than quoted prices included within Level 1 that are observable for the asset or liability such asquoted prices for similar assets or liabilities in active markets; quoted prices for identical assets or liabilities in markets with insufficient volume or infrequenttransactions (less active markets); or modelderived valuations in which significant inputs are observable or can be derived principally from, or corroborated by,observable market data.Level 3Level 3 applies to assets or liabilities for which there are unobservable inputs to the valuation methodology that are significant to the measurement of the fair valueof the assets or liabilities.F11Cash and cash equivalentsCash and cash equivalents primarily consist of cash, money market funds, investments in interest bearing demand deposit accounts, time deposits and highly liquidinvestments with original maturities of three months or less from the date of purchase and are stated at cost which approximates their fair value. The Group has nocash equivalents.Accounts receivable, net of allowanceAccounts receivable are recognized and carried at the original invoiced amount less an allowance for any potential uncollectible amounts. An estimate for doubtfuldebts is made when collection of the full amount is no longer probable. Bad debts are written off as incurred. The Group generally does not require collateral from itscustomers.The Group maintains allowances for doubtful accounts for estimated losses resulting from the failure of customers to make payments on time. The Group reviews theaccounts receivable on a periodic basis and makes specific allowances when there is doubt as to the collectability of individual balances. In evaluating thecollectability of individual receivable balances, the Group considers many factors, including the age of the balance, the customer’s payment history, its currentcreditworthiness and current economic trends.Property and equipment, netProperty and equipment are carried at cost less accumulated depreciation. Depreciation is calculated on a straightline basis over the following estimated usefullives:Wifi equipment– 3 yearsOffice equipment– 3 to 5 yearsVehicles– 5 yearsCosts of repairs and maintenance are expensed as incurred and asset improvements are capitalized. The gain or loss on disposal of property and equipment is thedifference between the net sales proceeds and the carrying amount of the relevant assets and is recognized in the consolidated income statement. When propertyand equipment are retired or otherwise disposed of, the cost and accumulated depreciation are removed from the accounts and any resulting gain or loss is includedin the results of operations for the respective period.Construction in progressAssets under construction are not depreciated until construction is completed and the assets are ready for their intended use.F12Intangible assetsIntangible assets with finite lives are amortized using the straightline method over the estimated economic lives.Intangible assets have weighted average economic lives from the date of purchase as follows:Software– 5 yearsTrademarks– 10 yearsGoodwillThe Group assesses goodwill for impairment in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”)subtopic 35020, Intangibles—Goodwill and Other: Goodwill (“ASC 35020”), which requires that goodwill to be tested for impairment at the reporting unit level atleast annually and more frequently upon the occurrence of certain events, as defined by ASC 35020.We have the option to assess qualitative factors first to determine whether it is necessary to perform the twostep test in accordance with ASC 35020. If we believe,as a result of the qualitative assessment, that it is morelikelythannot that the fair value of the reporting unit is less than its carrying amount, the twostepquantitative impairment test described below is required. Otherwise, no further testing is required. In the qualitative assessment, we consider primary factors such asindustry and market considerations, overall financial performance of the reporting unit, and other specific information related to the operations. In performing thetwostep quantitative impairment test, the first step compares the carrying amount of the reporting unit to the fair value of the reporting unit based on either quotedmarket prices of the ordinary shares or estimated fair value using a combination of the income approach and the market approach. If the fair value of the reportingunit exceeds the carrying value of the reporting unit, goodwill is not impaired and we are not required to perform further testing. If the carrying value of the reportingunit exceeds the fair value of the reporting unit, then we must perform the second step of the impairment test in order to determine the implied fair value of thereporting unit’s goodwill. The fair value of the reporting unit is allocated to its assets and liabilities in a manner similar to a purchase price allocation in order todetermine the implied fair value of the reporting unit goodwill. If the carrying amount of the goodwill is greater than its implied fair value, the excess is recognized asan impairment loss.In 2017, we performed a qualitative assessment for goodwill. Based on the requirements of ASC35020, we evaluated all relevant factors, including but not limited tomacroeconomic conditions, industry and market conditions, financial performance. We weighed all factors in their entirety and concluded that it was not morelikelythannot the fair value was less than the carrying amount of the reporting unit, and further impairment testing on goodwill was unnecessary as of December 31, 2017and 2016.F13Impairment or disposal of longlived assetsLonglived assets other than goodwill are included in impairment evaluations when events and circumstances exist that indicate the carrying value of these assetsmay not be recoverable. In accordance with FASB ASC 360, Property, Plant and Equipment, the Group assesses the recoverability of the carrying value of longlivedassets by first grouping its longlived assets with other assets and liabilities at the lowest level for which identifiable cash flows are largely independent of the cashflows of other assets and liabilities (the asset group) and, secondly, estimating the undiscounted future cash flows that are directly associated with and expected toarise from the use of and eventual disposition of such asset group. If the carrying value of the asset group exceeds the estimated undiscounted cash flows, theGroup recognizes an impairment loss to the extent the carrying value of the longlived asset exceeds its fair value. The Group determines fair value through quotedmarket prices in active markets or, if quotations of market prices are unavailable, through the performance of internal analysis using a discounted cash flowmethodology or obtains external appraisals from independent valuation firms. The undiscounted and discounted cash flow analyses are based on a number ofestimates and assumptions, including the expected period over which the asset will be utilized, projected future operating results of the asset group, discount rateand longterm growth rate.As of December 31, 2017 and 2016, the Group assessed the impairment of its longlived assets and concluded that there was no impairment indication.Business combinationWe account for business combinations using the purchase method of accounting in accordance with FASB ASC topic 805, Business combinations. The purchasemethod accounting requires that the consideration transferred be allocated to the assets, including separately identifiable assets and liabilities we acquired, basedon their estimated fair values. The consideration transferred in an acquisition is measured as the aggregate of the fair values at the date of exchange of the assetsgiven, liabilities incurred, and equity instruments issued as well as the contingent considerations and all contractual contingencies as of the acquisition date. Thecosts directly attributable to the acquisition are expensed as incurred. Identifiable assets, liabilities and contingent liabilities acquired or assumed are measuredseparately at their fair value as of the acquisition date, irrespective of the extent of any noncontrolling interests. The excess of (i) the total of cost of acquisition, fairvalue of the noncontrolling interests and acquisition date fair value of any previously held equity interest in the acquiree over (ii) the fair value of the identifiable netassets of the acquiree, is recorded as goodwill. If the cost of acquisition is less than the fair value of the net assets of the subsidiary acquired, the difference isrecognized directly in earnings.Revenue recognitionThe Group recognizes revenue in accordance with FASB ASC topic 605, Revenue Recognition (“ASC 605”). Revenue is recognized when the following four revenuerecognition criteria are met: (i) persuasive evidence of an arrangement exists, (ii) delivery has occurred or services have been provided, (iii) the selling price is fixed ordeterminable, and (iv) collectability is reasonably assured.F14Displaybased online advertising servicesThe Group provides displaybased online advertising services to customers by integrating text description, image and video, and displaying the advertisements in aprominent position of LuoKuang Application. The Group recognizes revenue in accordance with ASC 605, over the contractual term based on the agreements andconfirmation letters signed by both parties, commencing on the date the customer’s advertisement is displayed on the Group’s platform.Foreign currency translationThe functional and reporting currency of the Company and the Company’s subsidiaries domiciled in BVI and Hong Kong are the United States dollar (“U.S. dollar”).The financial records of the Company’s other subsidiaries and VIEs located in the PRC are maintained in their local currency, the Chinese Renminbi (“RMB”), whichare the functional currency of these entities.Monetary assets and liabilities denominated in currencies other than the functional currency are translated into the functional currency at the rates of exchangeruling at the balance sheet date. Transactions in currencies other than the functional currency during the year are converted into the functional currency at theapplicable rates of exchange prevailing when the transactions occurred. Transaction gains and losses are recognized in the statements of operations.The Company’s entities with a functional currency of RMB translate their operating results and financial position into the U.S. dollar, the Company’s reportingcurrency. Assets and liabilities are translated using the exchange rates in effect on the balance sheet date. Revenues, expenses, gains and losses are translatedusing the average rate for the year. Retained earnings and equity are translated using the historical rate. Translation adjustments are reported as cumulativetranslation adjustments and are shown as a separate component of other comprehensive income.Income taxesDeferred income taxes are recognized for temporary differences between the tax basis of assets and liabilities and their reported amounts in the financial statements,net operating loss carry forwards and credits, by applying enacted statutory tax rates applicable to future years. Deferred tax assets are reduced by a valuationallowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Current income taxesare provided for in accordance with the laws and regulations applicable to the Group as enacted by the relevant tax authorities.The impact of an uncertain income tax position on the income tax return must be recognized at the largest amount that is morelikelythan not to be sustained uponaudit by the relevant tax authorities. An uncertain income tax position will not be recognized if it has less than a 50% likelihood of being sustained. Additionally, theGroup classifies the interest and penalties, if any, as a component of the income tax expense. For years ended December 31, 2017 and 2016, the Group did not haveany material interest or penalties associated with tax positions nor did the Group have any significant unrecognized uncertain tax positions.F15Related partiesParties are considered to be related to the Company if the parties, directly or indirectly, through one or more intermediaries, control, are controlled by, or are undercommon control with the Company. Related parties also include principal owners of the Company, its management, members of the immediate families of principalowners of the Company and its management and other parties with which the Company may deal with if one party controls or can significantly influence themanagement or operating policies of the other to an extent that one of the transacting parties might be prevented from fully pursuing its own separate interests. TheCompany discloses all significant related party transactions.LeasesLeases have been classified as either capital or operating leases. Leases that transfer substantially all the benefits and risks incidental to the ownership of assets areaccounted for as if there was an acquisition of an asset and incurrence of an obligation at the inception of the lease. All other leases are accounted for as operatingleases wherein rental payments are expensed as incurred.When the Group is the lessor, minimum contractual rental from leases are recognized on a straightline basis over the noncancelable term of the lease. With respectto a particular lease, actual amounts billed in accordance with the lease during any given period may be higher or lower than the amount of rental revenue recognizedfor the period. Straightline rental revenue commences when the customer assumes control of the leased premises. Accrued straightline rents receivable representsthe amount by which straightline rental revenue exceeds rents currently billed in accordance with lease agreements. Contingent rental revenue is accrued when thecontingency is removed.Advertising costsAdvertising costs include expenses associated with direct marketing. All advertising costs are expensed as incurred and included in selling and marketing expenses.During the years ended December 31, 2017 and 2016, advertising costs amounted to $23,171,170 and $4,537,653, respectively.Comprehensive lossComprehensive loss includes net loss and foreign currency translation adjustments and is presented net of tax. The tax effect is nil for the two years endedDecember 31, 2017 and 2016 in the consolidated statements of comprehensive loss.Concentration of credit riskFinancial instruments that potentially expose the Group to concentrations of credit risk consist primarily of cash and accounts receivable. The Group places its cashwith financial institutions with highcredit rating and quality in China. For the year ended December 31, 2017, two customers accounted for over 10% of totalrevenue. For the year ended December 31, 2016, four customers accounted for over 10% of total revenue. At December 31, 2017 and 2016, the Group had credit riskexposure of uninured cash in banks of approximately $72,379 and $83,843, respectively.F16NOTE 3 – INCOME TAXAt December 31, 2017 and 2016, the Group had an unused net operating loss carryforwards of approximately $25,123,726 and $20,081,239, respectively, for income taxpurposes, which expires between 2018 to 2022 and between 2017 to 2021, respectively. At December 31, 2017 and 2016, these net operating losses carryforwards mayresult in future income tax benefits of approximately $5,043,944 and $4,008,863, respectively, however, because realization is uncertain at this time, a valuationallowance in the same amount has been established. Deferred income taxes reflect the net effects of temporary differences between the carrying amounts of assetsand liabilities for financial reporting purposes and the amounts used for income tax purposes.Significant components of the Group’s deferred tax liabilities and assets of December 31, 2017 and 2016 are as follows:December 31,December 31,20172016Deferred tax liabilities$$Deferred tax assetNet operating loss carryforward5,043,9444,008,863Valuation allowance(5,043,944)(4,008,863)Net deferred tax assetMovement of valuation allowanceDecember 31,2017December 31,2016At the beginning of the year$4,008,863$2,049,352Current year addition823,9702,159,518Expired(61,411)Exchange difference272,522(200,007)At the end of the year5,043,9444,008,863The Company is not subject to taxation in BVI under the current BVI law. Subsidiaries operating in the PRC are subject to PRC Enterprise Income Tax at the statutoryrate of 25% for the years ended December 31, 2017 and 2016. Subsidiaries operating in Hong Kong are subject to Hong Kong income taxes at a rate of 16.5% for theyears ended December 31, 2017 and 2016.F17A reconciliation of the income tax expense to the amount computed by applying the current statutory tax rate to the loss before income taxes in the consolidatedstatements of comprehensive income is as follows:December 31,December 31,20172016Loss before income taxes$(6,810,454)$(13,049,031)Tax loss at statutory tax rate(1,655,174)(3,386,822)Nondeductible items6,729,2551,712,857Nontaxable items(3,789,956)(674,189)Change in valuation allowance823,9702,159,518Tax benefits(2,108,095)188,636Income tax expensesNOTE 4 – ACCOUNTS RECEIVABLEAt December 31, 2017 and 2016, accounts receivable consisted of the following:December 31,December 31,20172016Accounts receivable$10,406,602$2,098,946Less: allowance for doubtful accounts676,977233,110$9,729,625$1,865,836NOTE 5 – OTHER RECEIVABLESAt December 31, 2017 and 2016, other receivables consisted of the following:December 31,2017December 31,2016Advances to suppliers$339,701$181,472VAT recoverable (1)3,033,0651,662,805Other5,048,189485,152$2,376,745$2,287,934(1)The balance of advanced VAT represents input VAT available for deducting the amount of VAT paid in the future. During the years ended December 31, 2017and 2016, the Group purchased a large amount of WiFi equipment for deployments, which generated related input VAT approved by tax authority.F18NOTE 6 – AMOUNTS DUE FROM RELATEDPARTIESAt December 31, 2017 and 2016, amounts due from related parties consisted of the following:Name of related partyDecember 31,2017December 31,2016C Media Limited (1)$11,760,692$Ya Tuo Ji International Consultancy (Beijing) Limited (2)204,412183,811(1)C Media Limited is the parent company of LK Technology. The Group expects the amounts due from the related party will be returned to the Group within oneyear.(2)Ya Tuo Ji is a company controlled by the spouse of a major shareholder of C Media Limited. The loan is unsecured, interestfree and repayable on January 5,2019.NOTE 7 – PROPERTY AND EQUIPMENTAt December 31, 2017 and 2016, property and equipment consisted of the following:December 31,December 31,Useful life20172016WiFi equipment3 Years$8,711,424$8,367,678Vehicles5 Years43,246Office and other equipment3 – 5 Years170,242416,434Constructioninprogress2,166,4522,652,28811,048,11811,479,646Less: accumulated depreciation(6,003,246)(3,708,619)$5,044,872$7,771,027For the years ended December 31, 2017 and 2016, depreciation expense amounted to $2,628,884 and $2,474,434, respectively, of which $2,423,655 and $2,194,582,respectively, was included in cost of revenue, $117,648 and $121,740, respectively, was included in selling and marketing expenses and the remainder was included ingeneral and administrative expense.Included in constructioninprogress are WiFI equipment under construction.F19NOTE 8 – GOODWILLIn September of 2014, Zhong Chuan Shi Xun acquired a 100% interest in Zhong Chuan Rui You for a consideration of $7,391,894 (RMB48,000,000). Zhong Chuan RuiYou is primarily engaged in on train WiFi business, deploying WiFi equipment on trains and providing passengers with entertainment and information services ontrains. The book value of the identifiable net assets of Zhong Chuan Rui You was $151,958 (RMB963,000) and a goodwill of $7,239,936 was recorded.NOTE 9 – ACCRUED LIABILITIES AND OTHER PAYABLESAt December 31, 2017 and 2016, accrued liabilities and other payables consisted of the following:December 31,December 31,20172016Deferred revenue$2,326,406$302,735Accrued payroll143,998316,458Other taxes payable3,544,469461,699Other payable852,384686,526Other loans6,095,6559,562,915$12,962,912$11,329,613Deferred revenue represents prepayments from customers for advertising service and is recognized as revenue when the advertising services are rendered.Other loans of $939,555 and $57,416, respectively, as of December 31, 2017 and 2016, are unsecured, bear daily interest at 0.04% and are repayable on demand.NOTE 10 – AMOUNTS DUE TO RELATED PARTIESAt December 31, 2017 and 2016, amounts due to related parties consisted of the following:December 31,December 31,Name of related party20172016Mr. Song Xuesong (“Mr. Song”) (1)$2,921,639$10,669,325C Media Limited (2)$$4,855,236Thumb Beijing Branch (3)$612,103$576,560Thumb Shenzhen Branch (3)$29,941$28,202(1) The Group’s CEO(2) C Media Limited, the parent company.(3) Thumb Beijing and Shenzhen Branch are controlled by the spouse of Mr. Song.Amounts due to related parties are shortterm in nature, noninterest bearing, unsecured and payable on demand.F20NOTE 11 – RETIREMENT AND WELFARE BENEFITSThe Group’s fulltime employees are entitled to staff welfare benefits including medical care, casualty, housing benefits, education benefits, unemployment insuranceand pension benefits through a PRC governmentmandated multiemployer defined contribution plan. The Group is required to accrue the employerportion forthese benefits based on certain percentages of the employees’ salaries. The total provision for such employee benefits of $170,227 and $353,033 during the yearsended December 31, 2017 and 2016, respectively, of which $23,392 and $30,455, respectively, was charged to cost of revenue, $48,957 and $97,408, respectively wascharged to selling and marketing expenses, $49,717 and $86,934, respectively, was charged to general and administrative expenses and $48,161 and $138,236,respectively was charged to research and development expenses. The Group is required to make contributions to the plan out of the amounts accrued for all staffwelfare benefits except for education benefits. The PRC government is responsible for the staff welfare benefits including medical care, casualty, housing benefits,unemployment insurance and pension benefits to be paid to these employees.NOTE 12 – STATUTORY RESERVESAs stipulated by the relevant law and regulations in the PRC, the Group’s subsidiaries and VIEs in the PRC are required to maintain a nondistributable statutorysurplus reserve. Appropriations to the statutory surplus reserve are required to be made at not less than 10% of profit after taxes as reported in the subsidiaries’statutory financial statements prepared under the PRC GAAP. Once appropriated, these amounts are not available for future distribution to owners or shareholders.Once the general reserve is accumulated to 50% of the subsidiaries’ registered capital, the subsidiaries can choose not to provide more reserves. The statutoryreserve may be applied against prior year losses, if any, and may be used for general business expansion and production and increase in registered capital of thesubsidiaries. The Group allocated $Nil to statutory reserves during the years ended December 31, 2017 and 2016, respectively. The statutory reserves cannot betransferred to the Company in the form of loans or advances and are not distributable as cash dividends except in the event of liquidation.NOTE 13 – COMMITMENTS AND CONTINGENCIESOperating leasesWe have entered into operating lease agreements primarily for our office spaces in China. These leases expire through 2018 and are renewable upon negotiation.Future minimum rental payment required under the Office Lease is as follows:Year ending December 31:Amount2018$122,138F21Contingencies(a) Litigation with Shanghai Fusheng Weier Intelligent Control Technology Co., Ltd.On January 22, 2016, Zhong Chuan Rui You and Shanghai Fusheng Weier Intelligent Control Technology Co., Ltd. (“Fusheng Weier”) signed a contract forequipment of $1,652,842 (RMB10,800,000). Since Zhong Chuan Rui You did not make the payments of $1,126,381 (RMB7,360,000) on the due dates, Fusheng Weierfiled a lawsuit against Zhong Chuan Rui You in Shanghai Xuhui District People’s Court on October 8, 2016. On March 9, 2017, Xuhui District People’s Court issuedthe verdict requiring Zhong Chuan Rui You to pay the overdue debts. In August 2017, C Media Limited made the payment of $512,075 (RMB3,346,000). Theremaining balance has been accrued in accounts payable. The payment schedule for the remaining balance is being negotiated by the two parties. On February 5,2018, a hearing was held adding Zhong Chuan Shi Xun as a defendant. The Group plans to settle the remaining balance within one year.(b) Lawsuit with Gansu Jinlun Culture Media Co., Ltd.On August 22, 2014, Zhong Chuan Rui You and Gansu Jinlun Culture Media Co., Ltd. (“Gansu Jinlun”) signed a “Lanzhou Railway Bureau Airconditioned Train WiFi Network System Advertising Operation Rights Agreement” for advertising on 72 trains of $1,467,880 (RMB9,604,633). Due to the dispute on the projectimplementation, Zhong Chuan Rui You did not pay the advertising fee. On August 23, 2017, Gansu Jinlun filed a lawsuit with Gansu Intermediate People’s Court. OnDecember 19, 2017, Gansu Intermediate People’s Court issued a verdict, ruling that Zhong Chuan Rui You settle the overdue advertising fee. Since only 18 out of 72trains have been installed with Wifi network system, Zhong Chuan Rui You disputed and appealed to the verdict. The next court trial date has not yet beendetermined.C Media and Gansu Jinlun are negotiating a potential settlement to resume the contract. According to the legal counsel, it is probable that the settlement will amountto approximately $459,000 (RMB3,000,000); therefore, this amount has been accrued in accounts payable.(c) Litigation with Shenzhen Hua Xun Fang Zhou Technology Co., Ltd.On June 16, 2015, Zhong Chuan Rui You signed a cooperation agreement with Shenzhen Hua Xun Fang Zhou Technology Co., Ltd. (“Shenzhen Hua Xun”) andXuesong Song, a major shareholder of C Media Limited. Pursuant to this agreement, Zhong Chuan Rui You procures equipment from Shenzhen Hua Xun. XuesongSong acts as a joint liability guarantor for the entire debts of Zhong Chuan Rui You under this agreement. As Zhong Chuan Rui You did not make the payments onthe due dates, Shenzhen Hua Xun filed a lawsuit with Shenzhen Baoan District People’s Court on May 31, 2016. On November 1, 2016, Zhong Chuan Rui You,Xuesong Song and Shenzhen Hua Xun reached a settlement in Shenzhen Baoan District People’s Court to settle $1,735,389 (RMB11,355,000) in four instalments. OnDecember 30, 2017, the debt was assigned to C Media Limited.NOTE 14 – SUBSEQUENT EVENTThe Group has evaluated all events or transactions that occurred after December 31, 2017 through May 25, 2018, which is the date that the financial statements wereavailable to be issued.F22EX1.1 2 f20f2017ex11_luokung.htm AMENDED AND RESTATED MEMORANDUM OF ASSOCIATION AND ARTICLES OF ASSOCIATION OF LUOKUNGTECHNOLOGY CORP., DATED AUGUST 20, 2018, AND AS CURRENTLY IN EFFECTExhibit 1.1BC NO: 1553620British Virgin IslandsThe BVI Business Companies Act, 2004(No. 16 of 2004)Memorandum of AssociationandArticles of AssociationofLuokung Technology Corp.Incorporated the 24th day of October, 2009Amended and Restated the 11th Day of December 2009Amended and Restated the 17th Day of December 2009Amended and Restated the 25th Day of March 2010Amended and Restated the 21st day of May 2018Amended and restated the 17 August 2018Amended and restated the 21 August 2018Portcullis (BVI) LimitedPortcullis Chambers4th Floor Ellen Skelton Building3076 Sir Francis Drake HighwayRoad Town, TortolaBritish Virgin IslandsTERRITORY OF THE BRITISH VIRGIN ISLANDSTHE BVI BUSINESS COMPANIES ACT, 2004(No. 16 of 2004)MEMORANDUM OF ASSOCIATIONOFLuokung Technology Corp.NAME1.The name of the Company is Luokung Technology Corp.TYPE OF COMPANY2.The Company is a company limited by shares.REGISTERED OFFICE3.The first Registered Office of the Company is the offices of Portcullis TrustNet (BVI) Limited, Portcullis TrustNet Chambers, P.O. Box 3444, Road Town,Tortola, British Virgin Islands, the office of the registered agent.3.1The current Registered Office of the Company is Portcullis Chambers, 4th Floor Ellen Skelton Building, 3076 SirFrancis Drake Highway, Road Town,Tortola, British Virgin Islands VG1110.REGISTERED AGENT4.The first Registered Agent of the Company is Portcullis TrustNet (BVI) Limited of Portcullis TrustNet Chambers, P.O. Box 3444, Road Town, Tortola,British Virgin Islands.4.1The current Registered Agent of the Company is Portcullis (BVI) Ltd of Portcullis Chambers, 4th Floor Ellen Skelton Building, 3076 Sir Francis DrakeHighway, Road Town, Tortola, British Virgin Islands VG1110.AUTHORISED NUMBER OF SHARES5.The Company is authorised to issue a maximum of 251,000,000 shares.CLASSES, NUMBER AND PAR VALUE OF SHARES6.As at the date of adoption of this memorandum, the Company is authorised to issue (a) 250,000,000 ordinary shares without par value (“OrdinaryShares”); and (b) 1,000,000 preferred shares without par value (“Preferred Shares”).FRACTIONAL SHARES7.The Company may issue fractions of a share and a fractional share shall have the same corresponding fractional liabilities, limitations, preferences,privileges, qualifications, restrictions, rights and other attributes of a whole share of the same class or series of shares.RIGHTS, PRIVILEGES, RESTRICTIONS AND CONDITIONS ATTACHING TO SHARES8.(1)Subject to the memorandum and articles of association (and, for greater clarity, without prejudice to any special rights conferred thereby on theholders of any other shares), an Ordinary Share of the Company confers on the holder;(a)the right to one vote at a meeting of the members of the Company or on any Resolution of Members;(b)the right to an equal share in any Distribution paid by the Company; and(c)the right to an equal share in the distribution of the surplus assets of the Company on a winding up.(2)Subject to the memorandum and articles of association (and, for greater clarity, without prejudice to any special rights conferred thereby on theholders of any other shares), a Preferred Share of the Company confers on the holder;(a)the right to 399 votes at a meeting of the members of the Company or on any Resolution of Members;(b)the right to an equal share in any Distribution paid by the Company;(c)the right to an equal share in the distribution of the surplus assets of the Company on its liquidation.(d)be freely transferable, in whole or in part, by Mr. Xuesong Song to any third party through one or more Private Transactions, subject toApplicable Law; and(e)be freely transferable, in whole or in part, by Mr. Xuesong Song to any third party through one or more Public Transactions, subject to ApplicableLaw and Automatic Conversion of such Preferred Share(s) into Ordinary Share(s).(3)The directors may at their discretion by resolution of directors redeem, purchase or otherwise acquire all or any of the shares in the Companysubject to the Articles..VARIATION OF CLASS RIGHTS9.If at any time the issued shares are divided into different classes or series of shares, the rights attached to any class or series (unless otherwise providedby the terms of issue of the shares of that class or series) may, whether or not the Company is being wound up, be varied with the consent in writing of theholders of not less than threefourths of the issued shares of that class or series and of the holders of not less than threefourths of the issued shares ofany other class or series of shares which may be affected by such variation.RIGHTS NOT VARIED BY THE ISSUE OF SHARES PARI PASSU10.The rights conferred upon the holders of the shares of any class issued with preferred or other rights shall not, unless otherwise expressly provided by theterms of issue of the shares of that class, be deemed to be varied by the creation or issue of further shares ranking pari passu therewith.CAPACITY AND POWERS11.Subject to the Act, any other British Virgin Islands legislation and paragraph 12 below the Company has, irrespective of corporate benefit:(a)full capacity to carry on or undertake any business or activity, do any act or enter into any transaction;(b)for the purposes of paragraph (a), full rights, powers and privileges; and(c)full powers to issue shares with preemptive rights, subject to the Articles.2LIMITATIONS ON THE COMPANY’S BUSINESS12.For the purposes of section 9(4) of the Act the Company may not;(a)carry on banking or trust business, unless it is licensed to do so under the Banks and Trust Companies Act, 1990;(b)carry on business as an insurance or reinsurance company, insurance agent or insurance broker, unless it is licensed under the Insurance Act1994;(c)carry on business of company management, unless it is licensed under the Company Management Act, 1990;(d)carry on the business of providing the registered office or the registered agent for companies incorporated in the British Virgin Islands;(e)carry on the business as a mutual fund, manager of mutual funds or administrator of mutual funds unless it is recognized or licenced as the casemay be under the Mutual Funds Act 1996; or(f)carry on any other business that gives rise to a licencing requirement under any law for the time being in force in the British Virgin Islands unlessit is licenced, regulated, recognised or otherwise approved pursuant to such law.REGISTERED SHARES AND PROHIBITION ON ISSUE OF BEARER SHARES13.Shares in the Company may only be issued as registered shares. The issue of shares to bearer is prohibited.PROHIBITION ON EXCHANGE AND CONVERSION OF REGISTERED SHARES TO BEARER SHARES14.The exchange or conversion of registered shares to bearer shares is prohibited.TRANSFER OF REGISTERED SHARES15.Subject to the provisions of the Articles the Company may upon receipt of an instrument of transfer enter the name of the transferee in the register ofmembers subject to the prior or simultaneous approval of the Company as evidenced by a resolution of directors or by a resolution of members. Subject toany resolution of the members to the contrary, the directors may resolve by resolution of directors to refuse or delay the registration of the transfer forreasons that shall be specified in the resolution of directors.AMENDMENT OF MEMORANDUM AND ARTICLES OF ASSOCIATION16.1The Company may amend its Memorandum or Articles by a resolution of members or by a resolution of directors provided that the directors shall not havethe power to amend the Memorandum or Articles;(a)to restrict the rights or powers of the members to amend the Memorandum or Articles;(b)to change the percentage of members required to pass a resolution to amend the Memorandum or Articles;(c)in circumstances where the Memorandum or Articles cannot be amended by the members; or(d)to Clauses 8, 9, 10 or this Clause 12.16.2No amendment may be made to Regulation 76 of the Articles unless approved by an affirmative vote of the holders of 66 2/3 percent or more of theoutstanding votes of the shares entitled to vote thereon.3DEFINITIONS17.The meanings of words in this Memorandum are as defined in the Articles.We, Portcullis TrustNet (BVI) Limited of Portcullis TrustNet Chambers, P.O. Box 3444, Road Town, Tortola, British Virgin Islands for the purpose ofincorporating a BVI Business Company under the laws of the British Virgin Islands hereby sign this Memorandum of Association the 27th day of October,2009.Incorporator/s/ Nicole WheatleyPortcullis TrustNet (BVI) LimitedPortcullis TrustNet ChambersP.O. Box 3444Road Town, TortolaBritish Virgin Islands(Sgd. Nicole Wheatley)4TERRITORY OF THE BRITISH VIRGIN ISLANDSTHE BVI BUSINESS COMPANIES ACT, 2004(No. 16 of 2004)ARTICLES OF ASSOCIATIONOFLuokung Technology Corp.PRELIMINARY1.In these Articles, if not inconsistent with the subject or context, the words and expressions standing in the first column of the following table shall bear themeanings set opposite them respectively in the second column thereof.WordsMeaningApplicable Lawall Laws, including those of a jurisdiction in or outside of the United States, applicable to the Private orPublic Transactions.Actthe BVI Business Companies Act, 2004 (No 16 of 2004.) including any modification, extension, reenactment or renewal thereof and any regulations made thereunder.Articlesthese Articles of Association as originally framed or as from time to time amended.Automatic Conversioneach Preferred Share shall be automatically converted at any time after issue and without the payment ofany additional sum into an equal number of fully paid Ordinary Shares upon the conclusion of anytransfer by Mr. Xuesong Song to any third party through one or more Public Transactions.Designated Stock Exchangeeither the Nasdaq National Stock Market, Inc. or such other exchange or quotation bureau on which, theCompany’s Securities are listed or traded; provided that until the Securities are listed on any such“Exchange” the rules of any such Designated Stock Exchange shall be inapplicable to these Articles.directora director of the Company.distributionin relation to a distribution by a company to a member, means(i)the direct or indirect transfer of an asset, other than the Company’s own shares, to or forthe benefit of the member or(ii)the incurring of a debt to or for the benefit of a member,in relation to shares held by a member, and whether by means of a purchase of an asset, the purchase,redemption or other acquisition of shares, a transfer of indebtedness or otherwise, and includes adividend.Independent Directora person who meets the then current requirements for “independence” of the applicable rules andregulations of the U.S. Securities and Exchange Commission and the Designated Stock Exchange.5member or shareholderin relation to the Company, means a person whose name is entered in the register of members as theholder of one or more shares, or fractional shares, in the Company.Memorandumthe Memorandum of Association of the Company as originally framed or as from time to time amended.Mr. Xuesong Songthe founder, a director and Chairman of LK Technology Ltd.Ordinary Sharesissued or unissued ordinary shares of no par value of the Company having the rights, preferences andprivileges set out in the MemorandumPersonAn individual, a corporation, a trust, trustee, the estate of a deceased individual, a partnership or anunincorporated association of persons.Preferred Sharesissued or unissued preferred shares of no par value of the Company having the rights, preferences andprivileges set out in the MemorandumPrivate Transactionstransactions that are not considered as a Public Transaction.Public Transactionstransactions through any national securities exchanges and/or through the automated quotation systemincluding but not limited to NASDAQ, NYSE (including NYSE American) or OTC Markets, or anytransaction executed by the broker or with a market maker.Related Party(a) any director, officer and employee of the Company; (b) any family member of such director, officer andemployee; and (c) any entity (e.g. a corporation, partnership, or trust) controlled by or set up for thebenefit of a director, officer or employee, or a family member of such director, officer or employee.Relevant SystemA facility for the electronic transfer of uncertificated securities administered by The Depository TrustCompany or such other Person regulated by the SEC.resolution of directors(a)A resolution approved at a duly convened and constituted meeting of directors of the Companyor of a committee of directors of the Company by the affirmative vote of a simple majority of thedirectors present at the meeting who voted and did not abstain; or(b)a resolution consented to in writing by a simple majority of the directors or of all members of thecommittee, as the case may be;except that where a director is given more than one vote, he shall be counted by the number ofvotes he casts for the purpose of establishing a majority.resolution of membersSubject to the provisions of the Memorandum and Articles means:(a)A resolution approved at a duly convened and constituted meeting of the members of theCompany by the affirmative vote of(i)a majority of in excess of 50% of the votes of the shares entitled to vote and voting onthe resolution, or(ii)a majority of in excess of 50% of the votes of each class or series of shares entitled tovote as a class or series and voting on the resolution and a majority of in excess of 50%of the votes of the remaining shares entitled to vote and voting on the resolution; or6(b)a resolution consented to in writing by(i)an absolute majority of the votes of shares entitled to vote thereon, or(ii)an absolute majority of the votes of each class or series of shares entitled to votethereon as a class or series and of an absolute majority of the votes of the remainingshares entitled to vote thereon.SealAny Seal which has been duly adopted as the common seal of the Company.SECThe United States Securities and Exchange Commission.Securitiesshares and debt obligations of every kind, and options, warrants and rights to acquire shares, or debtobligations.SharesOrdinary Shares and/or Preferred Shares, as the case may be.solvency testa company satisfies the solvency test if;(i)the value of the company’s assets exceeds its liabilities, and(ii)the company is able to pay its debts as they fall due.treasury sharesshares in the Company that were previously issued but were repurchased, redeemed or otherwiseacquired by the Company and not cancelled.2.“Written” or any term of like import includes words typewritten, printed, painted, engraved, lithographed, photographed or represented or reproduced byany mode of reproducing words in a visible form, including telex, facsimile, telegram, cable or other form of writing produced by electronic communication.3.Save as aforesaid any words or expressions defined in the Act shall bear the same meaning in these Articles.4.Whenever the singular or plural number, or the masculine, feminine or neuter gender is used in these Articles, it shall equally, where the context admits,include the others.5.A reference in these Articles to voting in relation to shares shall be construed as a reference to voting by members holding the shares except that it is thevotes allocated to the shares that shall be counted and not the number of members who actually voted and a reference to shares being present at a meetingshall be given a corresponding construction.6.A reference to money in these Articles is, unless otherwise stated, a reference to the currency in which shares in the Company shall be issued according tothe provisions of the Memorandum.7REGISTERED SHARES7.Every member holding registered shares in the Company shall be entitled to a certificate signed by a director or officer of the Company or such otherperson who may be authorised from time to time by resolution of directors or under the Seal, with or without the signature of any director of the Company,specifying the share or shares held by him and the signature of the director or officer or person so authorised and the Seal may be facsimiles.8.Any member receiving a share certificate for registered shares shall indemnify and hold the Company and its directors and officers harmless from any lossor liability which it or they may incur by reason of any wrongful or fraudulent use or representation made by any person by virtue of the possessionthereof. If a share certificate for registered shares is worn out or lost it may be renewed on production of the worn out certificate or on satisfactory proof ofits loss together with such indemnity as may be required by a resolution of directors.9.If several persons are registered as joint holders of any shares, any one of such persons may give an effectual receipt for any distribution payable inrespect of such shares.10.Nothing in these Articles shall require title to any shares or other Securities to be evidenced by a certificate if the Act and the rules of the Designated StockExchange permit otherwise.SHARES AND ISSUED SHARES11.Subject to the provisions of these Articles and, if applicable, the rules of the Designated Stock Exchange, and any resolution of members, the directors ofthe Company may, without limiting or affecting any rights previously conferred on the holders of any existing shares or class or series of shares, offer, allot,grant options over or otherwise dispose of shares to such persons, at such times and upon such terms and conditions as the Company may by resolutionof directors determine. The directors shall not issue more shares than the maximum number provided for in the Memorandum.12.The Company may issue fully paid, partly paid or nil paid shares as well as bonus shares. A partly paid or nil paid share or a share issued for a promissorynote or other written obligation for payment of a debt may be issued subject to forfeiture in the manner prescribed in these Articles.13.Shares in the Company may be issued for consideration in any form, including money, a promissory note or other obligation to contribute money orproperty, real property, personal property (including goodwill and knowhow) services rendered or a contract for future services and the amount of suchconsideration shall be determined by resolution of directors, except that in the case of shares with par value, the amount shall not be less than the parvalue, and in the absence of fraud the decision of the directors as to the value of the consideration received by the Company in respect of the issue isconclusive unless a question of law is involved.14.Before issuing shares for a consideration other than money, the directors shall pass a resolution stating;(a)the amount to be credited for the issue of the shares;(b)their determination of the reasonable present cash value of the nonmoney consideration for the issue; and(c)that, in their opinion, the present cash value of the nonmoney consideration for the issue is not less than the amount to be credited for the issueof the shares.15.A share issued by the Company upon conversion of, or in exchange for, another share or a debt obligation or other security in the Company, shall betreated for all purposes as having been issued for money equal to the consideration received or deemed to have been received by the Company in respectof the other share, debt obligation or security.16.Treasury shares may be disposed of by the Company on such terms and conditions (not otherwise inconsistent with these Articles) as the Company mayby resolution of directors determine.17.Subject to these Articles, the Company may purchase, redeem or otherwise acquire and hold its own shares save that the Company may not purchase,redeem or otherwise acquire its own shares without the consent of the member whose shares are to be purchased, redeemed or otherwise acquired unlessthe Company is permitted by the Act or any other provision in the Memorandum or Articles to purchase, redeem or otherwise acquire the shares withouttheir consent.818.No purchase, redemption or other acquisition of shares shall be made unless the directors determine by resolution of the directors that immediately after thepurchase, redemption or other acquisition the value of the Company’s assets will exceed its liabilities and the Company will be able to pay its debts as theyfall due.19.Sections 60 (Process for acquisition of own shares), 61 (Offer to one or more shareholders) and 62 (Shares redeemed otherwise than at the option ofcompany) of the Act shall not apply to the Company.20.A determination by the directors under Article 18 is not required;(a)the Company redeems a share or shares pursuant to a right of a member to have his shares redeemed or to have his shares exchanged for moneyor other property of the Company; or(b)by virtue of the provisions of Section 179 of the Act.21.Shares that the Company purchases, redeems or otherwise acquires pursuant to Article 17 may be cancelled or held as treasury shares except to the extentthat such shares are in excess of 80 percent of the issued shares of the Company in which case they shall be cancelled but they shall be available forreissue.22.Shares in the Company shall only be held as treasury shares where the directors of the Company resolve as such and the number of shares acquired, whenaggregated with shares of the same class already held by the Company as treasury shares, does not exceed 50% of the shares of that class previouslyissued by the Company, excluding shares that have been cancelled. All rights and obligations attaching to a treasury share are suspended and shall not beexercised by or against the Company while it holds the share as a treasury share. Treasury shares may be reissued by the Company as new shares.23.The Company shall keep a register of members containing;(a)the names and addresses of the persons who hold registered shares in the Company;(b)the number of each class and series of registered shares held by each member;(c)the date on which the name of each member was entered in the register of members;(d)the date on which any person ceased to be a member; and(e)such other information as may be prescribed pursuant to the Act.24.The register of members may be in any such form as the directors may approve but if it is in magnetic, electronic or other data storage form, the companymust be able to produce legible evidence of its contents.25.The original or a copy of the register of members shall be kept at the registered office of the Company or at the office of the registered agent of theCompany.26.A share is deemed to be issued when the name of the member is entered in the register of members.27.Subject to the Act and the rules of the Designated Stock Exchange, the board of directors without further consultation with the holders of any shares orSecurities may resolve that any class or series of shares or other Securities from time to time in issue or to be issued (including shares in issue at the date ofthe adoption of these Articles) may be issued, held, registered and converted to uncertificated form.28.Conversion of shares held in certificated form into shares held in uncertificated form, and vice versa, may be made in such manner as the board of directors,in its absolute discretion, may think fit. The Company or any duly authorised transfer agent (a “Transfer Agent”) shall enter on the register of membershow many shares are held by each member in uncertificated form and in certificated form and shall maintain the register of members. Notwithstanding anyprovision of these Articles, a class or series of shares shall not be treated as two classes by virtue only of that class or series comprising both certificatedshares and uncertificated Shares or as a result of any provision of these Articles which apply only in respect of certificated or uncertificated shares.9MORTGAGES AND CHARGES OF REGISTERED SHARES29.Members may mortgage or charge their registered shares in the Company with such mortgage or charge being evidenced in writing and signed by, or withthe authority of the registered holder of a registered share to which the mortgage or charge relates. The Company shall give effect to the terms of any validmortgage or charge except insofar as it may conflict with any requirements herein contained for consent to the transfer of shares.30.In the case of the mortgage or charge of registered shares there may be entered in the share register of the Company at the request of the registered holderof such shares(a)a statement that the shares are mortgaged or charged;(b)the name of the mortgagee or chargee; and(c)the date on which the aforesaid particulars are entered in the share register.31.Where particulars of a mortgage or charge are entered in the register of members, such particulars shall be cancelled(a)with the written consent of the named mortgagee or chargee or anyone authorized to act on his behalf; or(b)upon evidence satisfactory to the directors of the discharge of the liability secured by the mortgage or charge and the issue of such indemnities asthe directors shall consider necessary or desirable.32.Whilst particulars of a mortgage or charge over registered shares are entered in the register of members pursuant to the preceding articles no transfer ofany share comprised therein shall be effected without the written consent of the named mortgagee or chargee or anyone authorized to act on his behalf.FORFEITURE33.When shares not fully paid on issue or issued for a promissory note or other written obligation for payment of a debt have been issued subject toforfeiture, the following provisions shall apply.34.Written notice specifying a date for payment to be made and the shares in respect of which payment is to be made shall be served on the member whodefaults in making payment pursuant to a promissory note or other written obligations to pay a debt.35.The written notice specifying a date for payment shall(a)name a further date not earlier than the expiration of 14 days from the date of service of the notice on or before which payment required by thenotice is to be made; and(b)contain a statement that in the event of nonpayment at or before the time named in the notice the shares, or any of them, in respect of whichpayment is not made will be liable to be forfeited.36.Where a written notice has been issued and the requirements of the notice have not been complied with within the prescribed time, the directors may at anytime before tender of payment forfeit and cancel the shares to which the notice relates.37.The Company is under no obligation to refund any moneys to the member whose shares have been forfeited and cancelled pursuant to these provisions.Upon forfeiture and cancellation of the shares the member is discharged from any further obligation to the Company with respect to the shares forfeitedand cancelled.10LIEN38.The Company shall have a first and paramount lien on every share issued for a promissory note or for any other binding obligation to contribute money orproperty or any combination thereof to the Company, and the Company shall also have a first and paramount lien on every share standing registered in thename of a member, whether singly or jointly with any other person or persons, for all the debts and liabilities of such member or his estate to the Company,whether the same shall have been incurred before or after notice to the Company of any interest of any person other than such member, and whether thetime for the payment or discharge of the same shall have actually arrived or not, and notwithstanding that the same are joint debts or liabilities of suchmember or his estate and any other person, whether a member of the Company or not. The Company’s lien on a share shall extend to all distributionspayable thereon. The directors may at any time either generally, or in any particular case, waive any lien that has arisen or declare any share to be wholly orin part exempt from the provisions of this Article.39.In the absence of express provisions regarding sale in the promissory note or other binding obligation to contribute money or property, the Company maysell, in such manner as the directors may by resolution of directors determine, any share on which the Company has a lien, but no sale shall be made unlesssome sum in respect of which the lien exists is presently payable nor until the expiration of twentyone days after a notice in writing, stating and demandingpayment of the sum presently payable and giving notice of the intention to sell in default of such payment, has been served on the holder for the timebeing of the share.40.The net proceeds of the sale by the Company of any shares on which it has a lien shall be applied in or towards payment of discharge of the promissorynote or other binding obligation to contribute money or property or any combination thereof in respect of which the lien exists so far as the same ispresently payable and any residue shall (subject to a like lien for debts or liabilities not presently payable as existed upon the share prior to the sale) bepaid to the holder of the share immediately before such sale. For giving effect to any such sale the directors may authorize some person to transfer theshare sold to the purchaser thereof. The purchaser shall be registered as the holder of the share and he shall not be bound to see to the application of thepurchase money, nor shall his title to the share be affected by any irregularity or invalidity in the proceedings in reference to the sale.TRANSFER OF SHARES41.Registered shares in the Company are transferred by a written instrument of transfer signed by the transferor and containing the name and address of thetransferee. The instrument of transfer shall be signed by the transferee if registration as a holder of the share shall impose a liability to the Company on thetransferee. The instrument of transfer of a registered share shall be sent to the Company for registration.42.The board of directors may resolve that interests in shares in the form of depositary receipts may be transferred or otherwise dealt with in accordance withthe regulations and practices instituted by the operator of the Relevant System and any holder of interests in shares shall be entitled to transfer suchinterests by means of such Relevant System and the operator of the Relevant System shall act as agent of the holders of such interests for the purposes ofthe transfer of those interests.43.The register of members may be closed at such times and for such periods as the board of directors may from time to time determine, upon notice beinggiven by advertisement in such newspapers as may be required by the Act and the practice of the Designated Stock Exchange.44.The transfer of a registered share is effective when the name of the transferee is entered on the register of members.45.If the directors of the Company are satisfied that an instrument of transfer relating to shares has been signed but that the instrument has been lost ordestroyed, they may resolve;(a)to accept such evidence of the transfer of the shares as they consider appropriate; and(b)that the transferee’s name should be entered in the register of members notwithstanding the absence of the instrument of transfer.46.The Company must on the receipt of an instrument of transfer from the transferor or transferee of a registered share in the Company enter the name of thetransferee of the share in the register or members unless the directors, if permitted by the Memorandum or these Articles, resolve by resolution of directorsto refuse or delay the registration of the transfer for reasons that shall be specified in the resolution of directors.11TRANSMISSION OF SHARES47.The personal representative of a deceased member may transfer a share even though the personal representative is not a member at the time of the transfer.48.The personal representative, executor or administrator of a deceased member, the guardian of an incompetent member or the trustee of a bankrupt membershall be the only person recognized by the Company as having any title to his share but they shall not be entitled to exercise any rights as a member of theCompany until they have proceeded as set forth in the next following three Articles.49.The production to the Company of any document which is evidence of probate of the will, or letters of administration of the estate, or confirmation asexecutor, of a deceased member or of the appointment of a guardian of an incompetent member or the trustee of a bankrupt member shall be accepted by theCompany even if the deceased, incompetent or bankrupt member is domiciled outside the British Virgin Islands if the document evidencing the grant ofprobate or letters of administration, confirmation as executor, appointment as guardian or trustee in bankruptcy is issued by a foreign court which hadcompetent jurisdiction in the matter. For the purpose of establishing whether or not a foreign court had competent jurisdiction in such a matter the directorsmay obtain appropriate legal advice. The directors may also require an indemnity to be given by the executor, administrator, guardian or trustee inbankruptcy.50.The Company may enter in the register of members the name of any person becoming entitled by operation of law or otherwise to a share or shares inconsequence of the death, incompetence or bankruptcy upon such evidence being produced as may reasonably be required by the directors.51.Any person who has become entitled to a share or shares in consequence of the death, incompetence or bankruptcy of any member may, instead of beingregistered himself, request in writing that some person to be named by him be registered as the transferee of such share or shares and such request shalllikewise be treated as if it were a transfer.52.What amounts to incompetence on the part of a person is a matter to be determined by the court having regard to all the relevant evidence and thecircumstances of the case.REDUCTION OR INCREASE IN AUTHORISED AND UNISSUED SHARES48.The Company may amend the Memorandum to increase or reduce the maximum number of shares the Company is authorised to issue and may in respect ofany unissued shares increase or reduce the number of such shares, or effect any combination of the foregoing.49.The Company may(1)(a) divide its shares, including issued shares, into a larger number of shares; or (b) combine its shares, including issued shares, into a smallernumber of shares.(2)A division or combination of shares, including issued shares, of a class or series shall be for a larger or smaller number, as the case may be, ofshares in the same class or series.(3)A company shall not divide its shares under subsection (1)(a) or (2) if it would cause the maximum number of shares that the Company isauthorised to issue by its memorandum to be exceeded.(4)Where shares are divided or combined under this article, the aggregate par value of the new shares must be equal to the aggregate par value of theoriginal shares.MEETINGS AND CONSENTS OF MEMBERS50.The directors of the Company may convene meetings of the members of the Company at such times and in such manner and places within or outside theBritish Virgin Islands as the directors consider necessary or desirable. The Company may hold an annual general meeting, but shall not (unless required bythe applicable rules of the Designated Stock Exchange for so long as the Company’s Securities are listed or traded on the Designated Stock Exchange) beobliged to hold an annual general meeting.51.Upon the written request of members holding 30 percent or more of the outstanding voting shares in the Company the directors shall convene a meeting ofmembers.1252.The directors shall give not less than 7 days notice of meetings of members to those persons whose names on the date the notice is given appear asmembers in the share register of the Company and are entitled to vote at the meeting.53.The directors may fix the date notice is given of a meeting of members as the record date for determining those shares that are entitled to vote at themeeting.54.A meeting of members may be called on short notice:(a)if members holding not less than 90 percent of the total number of shares entitled to vote on all matters to be considered at the meeting, or 90percent of the votes of each class or series of shares where members are entitled to vote thereon as a class or series together with not less than a90 percent majority of the remaining votes, have agreed to short notice of the meeting, or(b)if all members holding shares entitled to vote on all or any matters to be considered at the meeting have waived notice of the meeting and for thispurpose presence at the meeting shall be deemed to constitute waiver.55.The inadvertent failure of the directors to give notice of a meeting to a member, or the fact that a member has not received notice, does not invalidate themeeting.56.A member may be represented at a meeting of members by a proxy who may speak and vote on behalf of the member.57.The instrument appointing a proxy shall be produced at the place appointed for the meeting before the time for holding the meeting at which the personnamed in such instrument proposes to vote.58.An instrument appointing a proxy shall be in substantially the following form or such other form as the Chairman of the meeting shall accept as properlyevidencing the wishes of the member appointing the proxy.(Name of Company)I/Webeing a member of the aboveCompany withshares HEREBY APPOINTofor failing himofto be my/our proxy to vote for me/us at the meeting of members to be held on the dayofand at any adjournment thereof.(Any restrictions on voting to be inserted here.)Signed this day ofMember59.The following shall apply in respect of joint ownership of shares:a.if two or more persons hold shares jointly each of them may be present in person or by proxy at a meeting of members and may speak as a member;b.if only one of the joint owners is present in person or by proxy he may vote on behalf of all joint owners, andc.if two or more of the joint owners are present in person or by proxy they must vote as one.60.A member shall be deemed to be present at a meeting of members if he participates by telephone or other electronic means and all members participating inthe meeting are able to hear each other.61.A meeting of members is duly constituted if, at the commencement of the meeting, there are present in person or by proxy not less than 50 percent of thevotes of the shares or class or series of shares entitled to vote on resolutions of members to be considered at the meeting. If a quorum be present,notwithstanding the fact that such quorum may be represented by only one person then such person may resolve any matter and a certificate signed bysuch person accompanied where such person be a proxy by a copy of the proxy form shall constitute a valid resolution of members.1362.If within two hours from the time appointed for the meeting a quorum is not present, the meeting, if convened upon the requisition of members, shall bedissolved; in any other case it shall stand adjourned to the next business day at the same time and place or to such other time and place as the directorsmay determine, and if at the adjourned meeting there are present within one hour from the time appointed for the meeting in person or by proxy not lessthan one third of the votes of the shares or each class or series of shares entitled to vote on the resolutions to be considered by the meeting, those presentshall constitute a quorum but otherwise the meeting shall be dissolved.63.At every meeting of members, the Chairman of the Board of Directors shall preside as chairman of the meeting. If there is no Chairman of the Board ofDirectors or if the Chairman of the Board of Directors is not present at the meeting, the members present shall choose some one of their number to be thechairman. If the members are unable to choose a chairman for any reason, then the person representing the greatest number of voting shares present inperson or by prescribed form of proxy at the meeting shall preside as chairman failing which the oldest individual member or representative of a memberpresent shall take the chair.64.The chairman may, with the consent of the meeting, adjourn any meeting from time to time, and from place to place, but no business shall be transacted atany adjourned meeting other than the business left unfinished at the meeting from which the adjournment took place.65.At any meeting of the members the chairman shall be responsible for deciding in such manner as he shall consider appropriate whether any resolution hasbeen carried or not and the result of his decision shall be announced to the meeting and recorded in the minutes thereof. If the chairman shall have anydoubt as to the outcome of any resolution put to the vote, he shall cause a poll to be taken of all votes cast upon such resolution, but if the chairman shallfail to take a poll then any member present in person or by proxy who disputes the announcement by the chairman of the result of any vote mayimmediately following such announcement demand that a poll be taken and the chairman shall thereupon cause a poll to be taken. If a poll is taken at anymeeting, the result thereof shall be duly recorded in the minutes of that meeting by the chairman.66.Any person other than an individual shall be regarded as one member and subject to the specific provisions hereinafter contained for the appointment ofrepresentatives of such persons the right of any individual to speak for or represent such member shall be determined by the law of the jurisdiction where,and by the documents by which, the person is constituted or derives its existence. In case of doubt, the directors may in good faith seek legal advice fromany qualified person and unless and until a court of competent jurisdiction shall otherwise rule, the directors may rely and act upon such advice withoutincurring any liability to any member.67.Any person other than an individual which is a member of the Company may by resolution of its directors or other governing body authorize such personas it thinks fit to act as its representative at any meeting of the Company or of any class of members of the Company, and the person so authorized shall beentitled to exercise the same powers on behalf of the person which he represents as that person could exercise if it were an individual member of theCompany.68.The chairman of any meeting at which a vote is cast by proxy or on behalf of any person other than an individual may call for a notarially certified copy ofsuch proxy or authority which shall be produced within 7 days of being so requested or the votes cast by such proxy or on behalf of such person shall bedisregarded.69.Directors of the Company may attend and speak at any meeting of members of the Company and at any separate meeting of the holders of any class orseries of shares in the Company.70.An action that may be taken by the members at a meeting may also be taken by a resolution of members consented to in writing or by telex, telegram, cable,facsimile or other written electronic communication, without the need for any notice, but if any resolution of members is adopted otherwise than by theunanimous written consent of all members, a copy of such resolution shall forthwith be sent to all members not consenting to such resolution. The consentmay be in the form of counterparts, each counterpart being signed by one or more members.14DIRECTORS71.The first directors of the Company shall be appointed by the first registered agent of the Company and thereafter the directors shall be appointed byresolution of members, subject to Article 78, for such term as the members determine. A person shall not be appointed as a director unless he hasconsented in writing to be a director.72.The minimum number of directors shall be one and the maximum number shall be 20. Unless otherwise determined by the Company in a meeting ofshareholders and subject to the requirements of the Memorandum, the directors may by a Resolution of Directors, amend this Regulation 72 to change thenumber of directors. For as long as Securities of the Company are listed or traded on the Designated Stock Exchange, the directors shall include suchnumber of Independent Directors as applicable law, rules or regulations of the Designated Stock Exchange may require for a foreign private issuer as longas the Company is a foreign private issuer.73.Each director shall hold office for the term, if any, fixed by resolution of members or until his earlier death, resignation or removal.74.Where the Company has only one member who is an individual and that member is also the sole director of the Company, that sole member/director may, byinstrument in writing, nominate a person who is not disqualified from being a director of the Company under section 111(1) of the Act as a reserve directorof the Company to act in the place of the sole director in the event of his death.75.The nomination of a person as a reserve director of the Company ceases to have effect if;a.before the death of the sole member/director who nominated him;(i)he resigns as reserve director, or(ii)the sole member/director revokes the nomination in writing; orb.the sole member/director who nominated him ceases to be the sole member/director of the Company for any reason other than his death.76.A director may be removed from office, with or without cause, by a resolution of directors or a resolution of members. For the purposes of this Regulation76, “cause” means the willful and continuous failure by a director to substantially perform his duties to the Company (other than any such failure resultingfrom incapacity due to physical or mental illness) or the willful engaging by the director in gross misconduct materially and demonstrably injurious to theCompany. If a director is removed from office without cause by a resolution of the members, for the purposes of this Regulation, the resolution of memberswill require the affirmative vote of the holders of 66 2/3 percent or more of the outstanding votes of the shares entitled to vote thereon.77.A director may resign his office by giving written notice of his resignation to the Company and the resignation shall have effect from the date the notice isreceived by the Company or from such later date as may be specified in the notice. A director of the Company shall resign forthwith if he is, or becomes,disqualified to act as a director under the Act.78.The directors may at any time by resolution of directors appoint any person to be a director to fill a vacancy. There is a vacancy if a director dies orotherwise ceases to hold office as a director prior to the expiration of his term of office, where his term of office was fixed upon his appointment. Thedirectors may not appoint a director to fill a vacancy for a term exceeding the term that remained when the person who has ceased to be a director left orotherwise ceased to hold office.79.The Company shall keep a register of directors containing:a.the names and addresses of the persons who are directors of the Company or who have been nominated as reserve directors of the Company;b.the date on which each person whose name is entered in the register was appointed as a director of the Company or nominated as a reservedirector of the Company;c.the date on which each person named as a director ceased to be a director of the Company;d.the date on which the nomination of any person nominated as a reserve director ceased to have effect; ande.such other information as may be prescribed pursuant to the Act.1580.The original or a copy of any register of directors shall be kept at the office of the registered agent of the Company.81.The register of directors may be in any such form as the directors may approve but if it is in magnetic, electronic or other data storage form, the companymust be able to produce legible evidence of its contents.82.With the prior or subsequent approval by a resolution of members, the directors may, by a resolution of directors, fix the emoluments of directors withrespect to services to be rendered in any capacity to the Company.83.A director shall not require a share qualification and may be an individual or a company.POWERS OF DIRECTORS84.The business and affairs of the Company shall be managed by the directors who may pay all expenses incurred preliminary to and in connection with theformation and registration of the Company and may exercise all such powers of the Company as are not by the Act or by the Memorandum or theseArticles required to be exercised by the members of the Company, subject to any delegation of such powers as may be authorized by these Articles and tosuch requirements as may be prescribed by a resolution of members; but no requirement made by a resolution of members shall prevail if it be inconsistentwith these Articles nor shall such requirement invalidate any prior act of the directors which would have been valid if such requirement had not been made.Notwithstanding anything in Section 175 of the Act the directors shall have the power to sell, transfer, lease, exchange or otherwise dispose of more thanfifty percent of the assets of the Company without submitting a proposal to or obtaining the consent of the members of the Company.85.If the Company is a whollyowned subsidiary of a holding company a director may when exercising powers or performing duties as a director act in amanner which he believes is in the best interests of the holding company even though it may not be in the best interests of the Company.86.The directors may, by a resolution of directors, appoint any person, including a person who is a director, to be an officer or agent of the Company. Theresolution of directors appointing an agent may authorize the agent to appoint one or more substitutes or delegates to exercise some or all of the powersconferred on the agent by the Company.87.Every officer or agent of the Company has such powers and authority of the directors, including the power and authority to affix the Seal, as are set forth inthese Articles or in the resolution of directors appointing the officer or agent, except that no agent has any power or authority with respect to thefollowing;a.to amend the memorandum or articles;b.to change the registered office or agent;c.to designate committees of directors;d.to delegate powers to a committee of directors;e.to appoint or remove directors;f.to appoint or remove an agent;g.to fix emoluments of directors;h.to approve a plan of merger, consolidation or arrangement;i.to make a declaration of solvency for the purposes of section 198(1)(a) of the Act or to approve a liquidation plan;j.to make a determination under section 57(1) of the Act that the company will, immediately after a proposed distribution, satisfy the solvency test;ork.to authorise the Company to continue as a company incorporated under the laws of a jurisdiction outside the British Virgin Islands.1688.Any director which is a body corporate may appoint any person its duly authorized representative for the purpose of representing it at meetings of theBoard of Directors or with respect to unanimous written consents.89.The continuing directors may act notwithstanding any vacancy in their body, save that if their number is reduced to their knowledge below the numberfixed by or pursuant to these Articles as the necessary quorum for a meeting of directors, the continuing directors or director may act only for the purposeof appointing directors to fill any vacancy that has arisen or for summoning a meeting of members.90.The directors may by resolution of directors exercise all the powers of the Company to borrow money and to mortgage or charge its undertakings andproperty or any part thereof, to issue debentures, debenture stock and other securities whenever money is borrowed or as security for any debt, liability orobligation of the Company or of any third party.91.All cheques, promissory notes, drafts, bills of exchange and other negotiable instruments and all receipts for moneys paid to the Company, shall be signed,drawn, accepted, endorsed or otherwise executed, as the case may be, in such manner as shall from time to time be determined by resolution of directors.92.The Company shall keep a register of all relevant charges created by the Company showing:a.if the charge is a charge created by the Company, the date of its creation or if the charge is existing on property acquired by the Company, the dateon which the property was acquired;b.a short description of the liability secured by the charge;c.a short description of the property charged;d.the name and address of the trustee for the security, or if there is no such trustee the name and address of the chargee;e.unless the charge is a security to bearer, the name and address of the holder of the charge;f.details of any prohibition or restriction , if any, contained in the instrument creating the charge on the power of the company to create any futurecharge ranking in priority to or equally with the charge; andg.such other information as may be prescribed pursuant to the Act.93.The original or a copy of the register of charges shall be kept at the registered office of the Company or at the office of the registered agent of the Company.PROCEEDINGS OF DIRECTORS94.The directors of the Company or any committee thereof may meet at such times and in such manner and places within or outside the British Virgin Islandsas the directors may determine to be necessary or desirable. Any one or more directors may convene a meeting of directors.95.A director shall be deemed to be present at a meeting of directors if he participates by telephone or other electronic means and all directors participating inthe meeting are able to hear each other.96.A director shall be given not less than 3 days notice of meetings of directors, but a meeting of directors held without 3 days notice having been given to alldirectors shall be valid if all the directors entitled to vote at the meeting who do not attend, waive notice of the meeting and for this purpose, the presenceof a director at a meeting shall constitute waiver on his part. The inadvertent failure to give notice of a meeting to a director, or the fact that a director hasnot received the notice, does not invalidate the meeting.1797.A director may by a written instrument appoint an alternate who need not be a director and an alternate is entitled to attend meetings in the absence of thedirector who appointed him and to vote or consent in place of the director.98.A meeting of directors is duly constituted for all purposes if at the commencement of the meeting there are present in person or by alternate not less thanone half of the total number of directors, unless there are only 2 directors in which case the quorum shall be 2.99.If the Company shall have only one director the provisions herein contained for meetings of the directors shall not apply but such sole director shall havefull power to represent and act for the Company in all matters as are not by the Act or the Memorandum or these Articles required to be exercised by themembers of the Company and in lieu of minutes of a meeting shall record in writing and sign a note or memorandum of all matters requiring a resolution ofdirectors. Such a note or memorandum shall constitute sufficient evidence of such resolution for all purposes.100.At every meeting of the directors the Chairman of the Board of Directors shall preside as chairman of the meeting. If there is no Chairman of the Board ofDirectors or if the Chairman of the Board of Directors is not present at the meeting the Vice Chairman of the Board of Directors shall preside. If there is noVice Chairman of the Board of Directors or if the Vice Chairman of the Board of Directors is not present at the meeting the directors present shall choosesome one of their number to be chairman of the meeting.101.An action that may be taken by the directors or a committee of directors at a meeting may also be taken by a resolution of directors or a committee ofdirectors consented to in writing or by telex, telegram, cable, facsimile or other written electronic communication by all directors or all members of thecommittee as the case may be, without the need for any notice. The consent may be in the form of counterparts, each counterpart being signed by one ormore directors.102.The directors shall cause the following records to be kept:a.minutes of all meetings of directors, members, committees of directors and committees of members; andb.copies of all resolutions consented to by directors, members, committees of directors and committees of members.103.The resolutions, records and minutes referred to in the preceding Article shall be kept at the registered office of the Company, its principal place ofbusiness or at such other place as the directors determine.104.The directors may, by resolution of directors, designate one or more committees, each consisting of one or more directors.105.Subject to the following Article, each committee of directors has such powers and authorities of the directors, including the power and authority to affix theSeal, as are set forth in the resolution of directors establishing the committee.106.The directors have no power to delegate the following powers to a committee of directors;a.to amend the memorandum or articles;b.to change the registered office or agent;c.to designate committees of directors;d.to delegate powers to a committee of directors;e.to appoint or remove directors;f.to appoint or remove an agent;g.to fix emoluments of directors;18h.to approve a plan of merger, consolidation or arrangement;i.to make a declaration of solvency for the purposes of section 198(1)(a) or to approve a liquidation plan;j.to make a determination under section 57(1) that the company will, immediately after a proposed distribution, satisfy the solvency test; ork.to authorise the company to continue as a company incorporated under the laws of a jurisdiction outside the British Virgin Islands.Paragraphs (c) and (d) do not prevent a committee of directors, where authorised by the directors, from appointing a subcommittee and delegating powersexercisable by the committee to the subcommittee.107.The meetings and proceedings of each committee of directors consisting of 2 or more directors shall be governed mutatis mutandis by the provisions ofthese Articles regulating the proceedings of directors so far as the same are not superseded by any provisions in the resolution establishing the committee.108.Without prejudice to the freedom of the directors to establish any other committee, if the shares (or depositary receipts therefore) are listed or quoted onthe Designated Stock Exchange, and if required by the Designated Stock Exchange, the directors shall establish and maintain an audit committee as acommittee of the board of directors, the composition and responsibilities of which shall comply with the rules and regulations of the SEC and theDesignated Stock Exchange. The audit committee shall meet at least once every financial quarter, or more frequently as circumstances dictate.109.The Company shall adopt a formal written audit committee charter and review and assess the adequacy of the formal written charter on an annual basis.The charter shall specify the responsibilities of the Audit Committee which shall include responsibility for, among other things, ensuring its receipt from theoutside auditors of the Company of a formal written statement delineating all relationships between the auditor and the Company, and the AuditCommittee’s responsibility for actively engaging in a dialogue with the auditor with respect to any disclosed relationships or services that may impact theobjectivity and independence of the auditor take appropriate action to oversee the independence of the outside auditor. In addition, the Audit Committee isresponsible for reviewing potential conflict of interest situations and approving all Related Party Transactions.110.Without prejudice to the freedom of the directors to establish any other committees, the Board may establish a Stock Option Committee to administer theCompany’s stock option plans, including authority to make and modify awards under such plans. For so long as the Securities of the Company are listed ortraded on the Designated Stock Exchange, the Stock Option Committee shall have at least two Independent Directors. The Stock Option Committee willadminister the Company’s stock option plans, including the authority to make and modify awards under such plans.111.Without prejudice to the freedom of the directors to establish any other committees, the Board may establish a Nominating Committee to assist the Board inidentifying qualified individuals to become members of the Board.OFFICERS112.The Company may by resolution of directors appoint officers of the Company at such times as shall be considered necessary or expedient. Such officersmay consist of a Chairman of the Board of Directors, a Vice Chairman of the Board of Directors, a President and one or more Vice Presidents, Secretaries andTreasurers and such other officers as may from time to time be deemed desirable. Any number of offices may be held by the same person.113.The officers shall perform such duties as shall be prescribed at the time of their appointment subject to any modification in such duties as may beprescribed thereafter by resolution of directors or resolution of members, but in the absence of any specific allocation of duties it shall be the responsibilityof the Chairman of the Board of Directors to preside at meetings of directors and members, the Vice Chairman to act in the absence of the Chairman, thePresident to manage the day to day affairs of the Company, the Vice Presidents to act in order of seniority in the absence of the President but otherwise toperform such duties as may be delegated to them by the President, the Secretaries to maintain the share register, minute books and records (other thanfinancial records) of the Company and to ensure compliance with all procedural requirements imposed on the Company by applicable law, and the Treasurerto be responsible for the financial affairs of the Company.19114.Subject to the rules of the Designated Stock Exchange, the emoluments of all officers shall be fixed by resolution of directors.115.The officers of the Company shall hold office until their successors are duly elected and qualified, but any officer elected or appointed by the directors maybe removed at any time, with or without cause, by resolution of directors. Any vacancy occurring in any office of the Company may be filled by resolutionof directors.CONFLICT OF INTERESTS116.A director of the Company shall, forthwith after becoming aware of the fact that he is interested in a transaction entered into or to be entered into by theCompany, disclose the interest to all other directors of the Company.117.A director of the Company is not required to comply with Article 112 if;a.the transaction or proposed transaction is between the director and the Company; andb.the transaction or proposed transaction is or is to be entered into in the ordinary course of the company’s business and on usual terms andconditions.118.For the purposes of Article 112 a disclosure to all other directors to the effect that a director is a member, director or officer of another named entity or has afiduciary relationship with respect to the entity or a named individual and is to be regarded as interested in any transaction which may, after the date of theentry or disclosure, be entered into with that entity or individual, is a sufficient disclosure of interest in relation to that transaction.119.A.A director of the Company who is interested in a transaction entered into or to be entered into by the Company may:(i)vote on a matter relating to the transaction;(ii)attend a meeting of directors at which a matter relating to the transaction arises and be included among the directors present at the meeting for thepurposes of a quorum; and(iii)sign a document on behalf of the Company, or do any other thing in his capacity as a director, that relates to the transaction,and, subject to compliance with the Act shall not, by reason of his office be accountable to the Company for any benefit which he derives from suchtransaction and no such transaction shall be liable to be avoided on the grounds of any such interest or benefit.119.B.For so long the Securities of the Company are listed or traded on the Designated Stock Exchange, the Company shall conduct an appropriate review of allmaterial Related Party Transactions on an ongoing basis and shall utilize the Audit Committee for the review and approval of potential conflicts of interestsituations.INDEMNIFICATION120.Subject to the limitations hereinafter provided the Company may indemnify against all expenses, including legal fees, and against all judgments, fines andamounts paid in settlement and reasonably incurred in connection with legal, administrative or investigative proceedings any person who;a.is or was a party or is threatened to be made a party to any threatened, pending or completed proceedings, whether civil, criminal, administrative orinvestigative, by reason of the fact that the person is or was a director, an officer or a liquidator of the Company; orb.is or was, at the request of the Company, serving as a director of, or in any other capacity is or was acting for, another body corporate or apartnership, joint venture, trust or other enterprise.20121.The Company may only indemnify a person if the person acted honestly and in good faith in what he believed to be in the best interests of the Companyand, in the case of criminal proceedings, the person had no reasonable cause to believe that his conduct was unlawful.122.For the purposes of the preceding Article, a director acts in the best interests of the Company if he acts in the best interests of;a.the Company’s holding company; orb.a shareholder or shareholders of the Company; in either case, in the circumstances specified in Article 85.123.The decision of the directors as to whether the person acted honestly and in good faith and with a view to the best interests of the Company and as towhether the person had no reasonable cause to believe that his conduct was unlawful is, in the absence of fraud, sufficient for the purposes of theseArticles, unless a question of law is involved.124.The termination of any proceedings by any judgment, order, settlement, conviction or the entering of a nolle prosequi does not, by itself, create apresumption that the person did not act honestly and in good faith and with a view to the best interests of the Company or that the person had reasonablecause to believe that his conduct was unlawful.Consolidated Statements of Changes in Stockholder’s EquityF5Consolidated Statements of Cash FlowsF6Notes to Consolidated Financial StatementsF7 F22F1REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRMTo the Shareholder and the Sole Director ofLK Technology Ltd.Opinion on the Consolidated Financial StatementsWe have audited the accompanying consolidated balance sheets of LK Technology Ltd. and. subsidiaries (the “Company”) as of December 31, 2017 and 2016, andthe related consolidated statements of operations and comprehensive loss, changes in shareholder’s equity and cash flows for each of the years then ended, andthe related notes (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in allmaterial respects, the consolidated financial position of the Company as of December 31, 2017 and 2016, and the consolidated results of its operations and its cashflows for each of the years then ended, in conformity with accounting principles generally accepted in the United States of America.Basis for OpinionThese consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’sconsolidated financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (UnitedStates) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules andregulations of the Securities and Exchange Commission and the PCAOB.We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonableassurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have,nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internalcontrol over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting.Accordingly, we express no such opinion.An independent member firm of Moore Stephens International Limited – members in principal cities throughout the worldOur audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, andperforming procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in theconsolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well asevaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion.Certified Public AccountantsWe have served as the Company’s auditor since 2018.Hong KongMay 25, 2018F2LK TECHNOLOGY LTD. AND SUBSIDIARIESCONSOLIDATED BALANCE SHEETS(IN U.S. DOLLARS)As of December 31,20172016AssetsCurrent assets:Cash and cash equivalents$72,379$83,843Accounts receivable, net of allowance for doubtful accounts9,729,6251,865,836Other receivables and prepayment2,376,7452,287,934Amounts due from related parties11,760,692Total current assets23,939,4414,237,613Property and equipment, net5,044,8727,771,027Intangible assets, net1,154,1971,682,445Goodwill7,239,9367,239,936Amount due from a related party204,412183,811TOTAL ASSETS37,582,85821,114,832LiabilitiesCurrent liabilities:Accounts payable8,784,5186,446,584Accrued liabilities and other payables12,962,91211,329,613Amounts due to related parties3,563,68316,129,323Total current liabilities25,311,11333,905,520Total liabilities25,311,11333,905,520Commitments and contingenciesShareholder’s Equity (Deficit)Share capitalCommon stock, $1 par value per share; 50,000 shares authorized as of December 31, 2017 and 2016, 1 share issued andoutstanding as of December 31, 2017 and 201611Additional paidin capital41,819,68510,037,469Accumulated deficit(29,936,158)(23,125,704)Accumulated other comprehensive income (loss)388,217297,546Total Shareholder’s Equity (Deficit)12,271,745(12,790,688)TOTAL LIABILITIES AND SHAREHOLDER’S EQUITY (DEFICIT)$37,582,858$21,114,832F3LK TECHNOLOGY LTD. AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS(IN U.S. DOLLARS)For the years endedDecember 31,20172016Revenues$26,082,417$5,233,145Less: Cost of revenues5,547,7796,315,504Less: Operating expenses:Selling and marketing23,908,7336,209,804General and administrative2,451,2492,108,854Research and development1,046,1982,882,202Total operating expenses27,406,18011,200,860Loss from operations(6,871,542)(12,283,219)Other income (expense):Interest expense(26,611)(4,412)Foreign exchange gains (losses)350,679(298,257)Loss from investment(428,571)Other income (expense), net(262,980)(34,572)Total other income (expense), net61,088(765,812)Loss before income taxes(6,810,454)(13,049,031)Income taxesNet loss$(6,810,454)$(13,049,031)Other comprehensive income:Foreign currency translation adjustment90,671387,375Total comprehensive loss$(6,719,783)$(12,661,656)F4LK TECHNOLOGY LTD. AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDER’S EQUITY(IN U.S. DOLLARS)Accumulated otherTotalOrdinary sharesAdditionalpaidin AccumulatedcomprehensiveIncomeShareholder’sEquity SharesAmountcapitaldeficits(loss)(Deficit)Balance as of December 31, 20151$ 1$8,250,505$(10,076,673)$(89,829)$(1,915,996)Capital contribution from C Media1,786,9641,786,964Net loss(13,049,031)(13,049,031)Foreign currency translation adjustment387,375387,375Balance as of December 31, 20161110,037,469(23,125,704)297,546(12,790,688)Capital contribution from C Media31,782,21631,782,216Net loss(6,810,454)(6,810,454)Foreign currency translation adjustment90,67190,671Balance as of December 31, 20171$1$41,819,685$(29,936,158)$388,217$12,271,745F5LK TECHNOLOGY LTD. AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF CASH FLOWS(IN U.S. DOLLARS)For the years endedDecember 31,20172016CASH FLOWS FROM OPERATING ACTIVITIES:Net loss$(6,810,454)$(13,049,031)Depreciation and amortization3,316,1813,245,161Loss on disposal of property and equipment115,19373,022Increase in allowance for doubtful accounts445,39562,591Changes in assets and liabilitiesAccounts receivable(7,933,730)(1,507,296)Other receivables and prepayment(2,202,960)2,873,984Accounts payable2,230,5434,757,457Accrued liabilities and other payables1,866,1377,483,441Net cash (used in) provided by operating activities(8,973,695)3,939,329CASH FLOWS FROM INVESTING ACTIVITIES:Purchase of property and equipment(12,689)(3,554,258)Proceeds from disposal of property and equipment29,942Net cash provided by (used in) investing activities17,253(3,554,258)CASH FLOWS FROM FINANCING ACTIVITIES:Advances from related parties8,938,290(1,197,870)Net cash provided by (used in) financing activities8,938,290(1,197,870)Effect of exchange rate changes6,688(32,746)Net decrease in cash and cash equivalents(11,464)(845,545)Cash and cash equivalents, at beginning of year83,843929,388Cash and cash equivalents, at end of year$72,379$83,843Supplemental cash flow disclosures:Interest paid26,6114,412Income taxes paidF6LK TECHNOLOGY LTD. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS(IN U.S. DOLLARS)NOTE 1 – DESCRIPTION OF BUSINESS AND ORGANIZATIONStar Chariot Limited was incorporated in the British Virgin Islands (“BVI”) as an exempted limited liability company on March 3, 2011. On January 18, 2018, it wasrenamed as LK Technology Ltd. (“LK Technology ” or the “Company”).LK Technology, its subsidiaries and its variable interest entities (“VIEs”) (collectively the “Group”) operate mobile application service for longdistance travel in thePeople’s Republic of China (the “PRC”). The core mobile application product, Luokuang, is made as an LBSsocial contents and services distribution platform. Itoffers functions based on various travel scenarios, e.g. information, entertainment, travel, ecommerce, O2O, advertising, etc.As of December 31, 2017, details of the Company’s subsidiaries and VIEs are as follows:NameDate ofincorporationPlace ofincorporationPercentage oflegal ownershipSubsidiaries:MMB LimitedApr 11, 2013Hong Kong100%Mobile Media (China) LimitedNov 6, 2007Hong Kong100%Zhong Chuan Tian Xia Information and Technology (Beijing) LimitedFeb 1, 2013PRC100%Zhong Chuan Tian Xia Information and Technology (Shenzhen) LimitedDec 23, 2010PRC100%VIEs:Beijing Zhong Chuan Shi Xun Technology Limited (“Zhong Chuan Shi Xun”)May 17, 2004PRC100%Jiangsu Zhong Chuan Rui You Information and Technology Limited (“Zhong Chuan Rui You”)May 26, 2011PRC100%Huoerguosi Luokuang Information and Technology Limited (“Huoerguosi Luokuang”)Jul 19, 2017PRC100%Shenzhen Jiu Zhou Shi Dai Digital and Technology Limited (“Jiu Zhou Shi Dai”)Nov 26, 2004PRC100%F7NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIESBasis of presentationThe consolidated financial statements of the Group have been prepared in accordance with accounting principles generally accepted in the United States of America(“US GAAP”).The Group incurred losses from operations of $6,871,542 and $12,283,219 for the years ended December 31, 2017 and 2016, respectively. As of December 31, 2017, theGroup had a shareholder’s equity of $12,271,145. The Group had negative cash flows from operating activities for the year ended December 31, 2017 of $8,973,695.As of December 31, 2017, the Group had cash and cash equivalents of $72,379 and a working capital deficit of $1,371,672. From 2018 and onwards, the Group willfocus on improving operation efficiency and cost reduction, and enhancing marketing functions to attract more users. The Group regularly monitors its current andexpected liquidity requirements to ensure that it maintains sufficient cash balances and accessible credit to meet its liquidity requirements in the short and long term.The parent company continues to provide cash flow to the Group. Based on working capital conditions and forecast for future operations, the Group believes that itwill be able to meet its payment obligations and other commitments for at least the following twelve months.Principles of consolidationThe consolidated financial statements include the financial statements of the Company, its subsidiaries, including the whollyforeign owned enterprises (“WFOEs”),and VIEs for which the Company is the primary beneficiary. All transactions and balances among the Company, its subsidiaries and consolidated VIEs have beeneliminated upon consolidation. The results of subsidiaries and consolidated VIEs acquired or disposed of are recorded in the consolidated statements of operationsfrom the effective date of acquisition or up to the effective date of disposal, as appropriate.A subsidiary is an entity in which (i) the Company directly or indirectly controls more than 50% of the voting power; or (ii) the Company has the power to appoint orremove the majority of the members of the board of directors or to cast a majority of votes at the meeting of the board of directors or to govern the financial andoperating policies of the investee pursuant to a statute or under an agreement among the shareholders or equity holders. A VIE is required to be consolidated by theprimary beneficiary of the entity if the equity holders in the entity do not have the characteristics of a controlling financial interest or do not have sufficient equity atrisk for the entity to finance its activities without additional subordinated financial support from other parties.F8To comply with the PRC legal restrictions on foreign ownership of companies that operate mobile application services, the Group operates in such restricted servicesin the PRC through certain PRC domestic companies, whose equity interests are held by certain management members or founders of the Group. Part of theregistered capital of these PRC domestic companies was funded by certain management members or founders of the Group. The Group has entered into certainexclusive business services agreements with these PRC domestic companies, which entitle it to receive a majority of their residual returns and make it obligatory forthe Group to absorb a majority of the risk of losses from their activities. In addition, the Group has entered into certain agreements with those management membersor founders, including equity interest pledge agreements of the equity interests held by those management members or founders and exclusive option agreements toacquire the equity interests in these companies when permitted by the PRC laws, rules and regulations.Details of the typical VIE structure of the Group’s significant consolidated VIEs, primarily domestic companies associated with the operations such as Zhong ChuanShi Xun, Zhong Chuan Rui You, Huoerguosi Luokuang and Jiu Zhou Shi Dai, are set forth below:(i)Contracts that give the Group effective control of VIEsExclusive option agreementsThe VIE equity holders have granted the WFOEs exclusive call options to purchase their equity interest in the VIEs at an exercise price equal to the higherof (i) the registered capital in the VIEs; and (ii) the minimum price as permitted by applicable PRC laws. Each relevant VIE has further granted the relevantWFOE an exclusive call option to purchase its assets at an exercise price equal to the book value of the assets or the minimum price as permitted byapplicable PRC laws, whichever is higher. The WFOEs may nominate another entity or individual to purchase the equity interest or assets, if applicable,under the call options. Each call option is exercisable subject to the condition that applicable PRC laws, rules and regulations do not prohibit completion ofthe transfer of the equity interest or assets pursuant to the call option. Each WFOE is entitled to all dividends and other distributions declared by the VIE,and the VIE equity holders have agreed to give up their rights to receive any distributions or proceeds from the disposal of their equity interests in the VIEwhich are in excess of the original registered capital that they contributed to the VIE, and to pay any such distributions or premium to the WFOE. Theexclusive call option agreements remain in effect until the equity interest or assets that are the subject of such agreements are transferred to the WFOEs.Equity pledge agreementsPursuant to the relevant equity pledge agreements, the relevant VIE equity holders have pledged all of their interests in the equity of the VIEs as acontinuing first priority security interest in favor of the corresponding WFOEs to secure the performance of obligations by the VIEs and/or the equityholders under the other structure contracts. Each WFOE is entitled to exercise its right to dispose of the VIE equity holders’ pledged interests in the equityof the VIE and has priority in receiving payment by the application of proceeds from the auction or sale of such pledged interests, in the event of anybreach or default under the loan agreement or other structure contracts, if applicable. These equity pledge agreements remain in force for the duration ofthe relevant loan agreement and other structure contracts.F9(ii)Contracts that enable the Group to receive substantially all of the economic benefits from the VIEsExclusive business services agreementsEach relevant VIE has entered into an exclusive business services agreement with the respective WFOE, pursuant to which the relevant WFOE providesexclusive business services to the VIE. In exchange, the VIE pays a service fee to the WFOE which typically amounts to what would be substantially all ofthe VIE’s pretax profit, resulting in a transfer of substantially all of the profits from the VIE to the WFOE.Other arrangementsThe exclusive call option agreements described above also enable the Group to receive substantially all of the economic benefits from the VIEs by typicallyentitling the WFOEs to all dividends and other distributions declared by the VIEs and to any distributions or proceeds from the disposal by the VIE equityholders of their equity interests in the VIEs that are in excess of the original registered capital that they contributed to the VIEs.Based on these contractual agreements, the Group believes that the PRC domestic companies as described above should be considered as VIEs because the equityholders do not have significant equity at risk nor do they have the characteristics of a controlling financial interest. Given that the Group is the primary beneficiaryof these PRC domestic companies, the Group believes that these VIEs should be consolidated based on the structure as described above.Under the contractual arrangements with the consolidated VIEs, the Group has the power to direct activities of the consolidated VIEs and can have assetstransferred out of the consolidated VIEs under its control. Therefore, the Group considers that there is no asset in any of the consolidated VIEs that can be usedonly to settle obligations of the consolidated VIEs, except for registered capital and PRC statutory reserves. As all consolidated VIEs are incorporated as limitedliability companies under the Company Law of the PRC, creditors of the consolidated VIEs do not have recourse to the general credit of the Group for any of theliabilities of the consolidated VIEs.Currently there is no contractual arrangement which requires the Group to provide additional financial support to the consolidated VIEs. However, as the Groupconducts its businesses primarily based on the licenses and approvals held by its consolidated VIEs, the Group has provided and will continue to provide financialsupport to the consolidated VIEs considering the business requirements of the consolidated VIEs, as well as the Group’s own business objectives in the future.F10Use of estimatesThe preparation of financial statements in conformity with US GAAP requires the Group to make estimates and assumptions that affect the reported amounts ofassets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expensesduring the reporting period. The most significant estimates are the allowance for doubtful accounts, the useful lives of property and equipment and intangibleassets, impairment of longlived assets and goodwill. Actual results could differ from those estimates.Fair value measurementsFair value is the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at themeasurement date under current market conditions. When determining the fair value measurements for assets and liabilities required or permitted to be recorded atfair value, the Group considers the principal or most advantageous market in which it would transact and it considers assumptions that market participants woulduse when pricing the asset or liability.Authoritative literature provides a fair value hierarchy which prioritizes the inputs to valuation techniques used to measure fair value into three broad levels. Thelevel in the hierarchy within which the fair value measurement in its entirety falls is based upon the lowest level of input that is significant to the fair valuemeasurement as follows:Level 1Level 1 applies to assets or liabilities for which there are quoted prices in active markets for identical assets or liabilities.Level 2Level 2 applies to assets or liabilities for which there are inputs other than quoted prices included within Level 1 that are observable for the asset or liability such asquoted prices for similar assets or liabilities in active markets; quoted prices for identical assets or liabilities in markets with insufficient volume or infrequenttransactions (less active markets); or modelderived valuations in which significant inputs are observable or can be derived principally from, or corroborated by,observable market data.Level 3Level 3 applies to assets or liabilities for which there are unobservable inputs to the valuation methodology that are significant to the measurement of the fair valueof the assets or liabilities.F11Cash and cash equivalentsCash and cash equivalents primarily consist of cash, money market funds, investments in interest bearing demand deposit accounts, time deposits and highly liquidinvestments with original maturities of three months or less from the date of purchase and are stated at cost which approximates their fair value. The Group has nocash equivalents.Accounts receivable, net of allowanceAccounts receivable are recognized and carried at the original invoiced amount less an allowance for any potential uncollectible amounts. An estimate for doubtfuldebts is made when collection of the full amount is no longer probable. Bad debts are written off as incurred. The Group generally does not require collateral from itscustomers.The Group maintains allowances for doubtful accounts for estimated losses resulting from the failure of customers to make payments on time. The Group reviews theaccounts receivable on a periodic basis and makes specific allowances when there is doubt as to the collectability of individual balances. In evaluating thecollectability of individual receivable balances, the Group considers many factors, including the age of the balance, the customer’s payment history, its currentcreditworthiness and current economic trends.Property and equipment, netProperty and equipment are carried at cost less accumulated depreciation. Depreciation is calculated on a straightline basis over the following estimated usefullives:Wifi equipment– 3 yearsOffice equipment– 3 to 5 yearsVehicles– 5 yearsCosts of repairs and maintenance are expensed as incurred and asset improvements are capitalized. The gain or loss on disposal of property and equipment is thedifference between the net sales proceeds and the carrying amount of the relevant assets and is recognized in the consolidated income statement. When propertyand equipment are retired or otherwise disposed of, the cost and accumulated depreciation are removed from the accounts and any resulting gain or loss is includedin the results of operations for the respective period.Construction in progressAssets under construction are not depreciated until construction is completed and the assets are ready for their intended use.F12Intangible assetsIntangible assets with finite lives are amortized using the straightline method over the estimated economic lives.Intangible assets have weighted average economic lives from the date of purchase as follows:Software– 5 yearsTrademarks– 10 yearsGoodwillThe Group assesses goodwill for impairment in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”)subtopic 35020, Intangibles—Goodwill and Other: Goodwill (“ASC 35020”), which requires that goodwill to be tested for impairment at the reporting unit level atleast annually and more frequently upon the occurrence of certain events, as defined by ASC 35020.We have the option to assess qualitative factors first to determine whether it is necessary to perform the twostep test in accordance with ASC 35020. If we believe,as a result of the qualitative assessment, that it is morelikelythannot that the fair value of the reporting unit is less than its carrying amount, the twostepquantitative impairment test described below is required. Otherwise, no further testing is required. In the qualitative assessment, we consider primary factors such asindustry and market considerations, overall financial performance of the reporting unit, and other specific information related to the operations. In performing thetwostep quantitative impairment test, the first step compares the carrying amount of the reporting unit to the fair value of the reporting unit based on either quotedmarket prices of the ordinary shares or estimated fair value using a combination of the income approach and the market approach. If the fair value of the reportingunit exceeds the carrying value of the reporting unit, goodwill is not impaired and we are not required to perform further testing. If the carrying value of the reportingunit exceeds the fair value of the reporting unit, then we must perform the second step of the impairment test in order to determine the implied fair value of thereporting unit’s goodwill. The fair value of the reporting unit is allocated to its assets and liabilities in a manner similar to a purchase price allocation in order todetermine the implied fair value of the reporting unit goodwill. If the carrying amount of the goodwill is greater than its implied fair value, the excess is recognized asan impairment loss.In 2017, we performed a qualitative assessment for goodwill. Based on the requirements of ASC35020, we evaluated all relevant factors, including but not limited tomacroeconomic conditions, industry and market conditions, financial performance. We weighed all factors in their entirety and concluded that it was not morelikelythannot the fair value was less than the carrying amount of the reporting unit, and further impairment testing on goodwill was unnecessary as of December 31, 2017and 2016.F13Impairment or disposal of longlived assetsLonglived assets other than goodwill are included in impairment evaluations when events and circumstances exist that indicate the carrying value of these assetsmay not be recoverable. In accordance with FASB ASC 360, Property, Plant and Equipment, the Group assesses the recoverability of the carrying value of longlivedassets by first grouping its longlived assets with other assets and liabilities at the lowest level for which identifiable cash flows are largely independent of the cashflows of other assets and liabilities (the asset group) and, secondly, estimating the undiscounted future cash flows that are directly associated with and expected toarise from the use of and eventual disposition of such asset group. If the carrying value of the asset group exceeds the estimated undiscounted cash flows, theGroup recognizes an impairment loss to the extent the carrying value of the longlived asset exceeds its fair value. The Group determines fair value through quotedmarket prices in active markets or, if quotations of market prices are unavailable, through the performance of internal analysis using a discounted cash flowmethodology or obtains external appraisals from independent valuation firms. The undiscounted and discounted cash flow analyses are based on a number ofestimates and assumptions, including the expected period over which the asset will be utilized, projected future operating results of the asset group, discount rateand longterm growth rate.As of December 31, 2017 and 2016, the Group assessed the impairment of its longlived assets and concluded that there was no impairment indication.Business combinationWe account for business combinations using the purchase method of accounting in accordance with FASB ASC topic 805, Business combinations. The purchasemethod accounting requires that the consideration transferred be allocated to the assets, including separately identifiable assets and liabilities we acquired, basedon their estimated fair values. The consideration transferred in an acquisition is measured as the aggregate of the fair values at the date of exchange of the assetsgiven, liabilities incurred, and equity instruments issued as well as the contingent considerations and all contractual contingencies as of the acquisition date. Thecosts directly attributable to the acquisition are expensed as incurred. Identifiable assets, liabilities and contingent liabilities acquired or assumed are measuredseparately at their fair value as of the acquisition date, irrespective of the extent of any noncontrolling interests. The excess of (i) the total of cost of acquisition, fairvalue of the noncontrolling interests and acquisition date fair value of any previously held equity interest in the acquiree over (ii) the fair value of the identifiable netassets of the acquiree, is recorded as goodwill. If the cost of acquisition is less than the fair value of the net assets of the subsidiary acquired, the difference isrecognized directly in earnings.Revenue recognitionThe Group recognizes revenue in accordance with FASB ASC topic 605, Revenue Recognition (“ASC 605”). Revenue is recognized when the following four revenuerecognition criteria are met: (i) persuasive evidence of an arrangement exists, (ii) delivery has occurred or services have been provided, (iii) the selling price is fixed ordeterminable, and (iv) collectability is reasonably assured.F14Displaybased online advertising servicesThe Group provides displaybased online advertising services to customers by integrating text description, image and video, and displaying the advertisements in aprominent position of LuoKuang Application. The Group recognizes revenue in accordance with ASC 605, over the contractual term based on the agreements andconfirmation letters signed by both parties, commencing on the date the customer’s advertisement is displayed on the Group’s platform.Foreign currency translationThe functional and reporting currency of the Company and the Company’s subsidiaries domiciled in BVI and Hong Kong are the United States dollar (“U.S. dollar”).The financial records of the Company’s other subsidiaries and VIEs located in the PRC are maintained in their local currency, the Chinese Renminbi (“RMB”), whichare the functional currency of these entities.Monetary assets and liabilities denominated in currencies other than the functional currency are translated into the functional currency at the rates of exchangeruling at the balance sheet date. Transactions in currencies other than the functional currency during the year are converted into the functional currency at theapplicable rates of exchange prevailing when the transactions occurred. Transaction gains and losses are recognized in the statements of operations.The Company’s entities with a functional currency of RMB translate their operating results and financial position into the U.S. dollar, the Company’s reportingcurrency. Assets and liabilities are translated using the exchange rates in effect on the balance sheet date. Revenues, expenses, gains and losses are translatedusing the average rate for the year. Retained earnings and equity are translated using the historical rate. Translation adjustments are reported as cumulativetranslation adjustments and are shown as a separate component of other comprehensive income.Income taxesDeferred income taxes are recognized for temporary differences between the tax basis of assets and liabilities and their reported amounts in the financial statements,net operating loss carry forwards and credits, by applying enacted statutory tax rates applicable to future years. Deferred tax assets are reduced by a valuationallowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Current income taxesare provided for in accordance with the laws and regulations applicable to the Group as enacted by the relevant tax authorities.The impact of an uncertain income tax position on the income tax return must be recognized at the largest amount that is morelikelythan not to be sustained uponaudit by the relevant tax authorities. An uncertain income tax position will not be recognized if it has less than a 50% likelihood of being sustained. Additionally, theGroup classifies the interest and penalties, if any, as a component of the income tax expense. For years ended December 31, 2017 and 2016, the Group did not haveany material interest or penalties associated with tax positions nor did the Group have any significant unrecognized uncertain tax positions.F15Related partiesParties are considered to be related to the Company if the parties, directly or indirectly, through one or more intermediaries, control, are controlled by, or are undercommon control with the Company. Related parties also include principal owners of the Company, its management, members of the immediate families of principalowners of the Company and its management and other parties with which the Company may deal with if one party controls or can significantly influence themanagement or operating policies of the other to an extent that one of the transacting parties might be prevented from fully pursuing its own separate interests. TheCompany discloses all significant related party transactions.LeasesLeases have been classified as either capital or operating leases. Leases that transfer substantially all the benefits and risks incidental to the ownership of assets areaccounted for as if there was an acquisition of an asset and incurrence of an obligation at the inception of the lease. All other leases are accounted for as operatingleases wherein rental payments are expensed as incurred.When the Group is the lessor, minimum contractual rental from leases are recognized on a straightline basis over the noncancelable term of the lease. With respectto a particular lease, actual amounts billed in accordance with the lease during any given period may be higher or lower than the amount of rental revenue recognizedfor the period. Straightline rental revenue commences when the customer assumes control of the leased premises. Accrued straightline rents receivable representsthe amount by which straightline rental revenue exceeds rents currently billed in accordance with lease agreements. Contingent rental revenue is accrued when thecontingency is removed.Advertising costsAdvertising costs include expenses associated with direct marketing. All advertising costs are expensed as incurred and included in selling and marketing expenses.During the years ended December 31, 2017 and 2016, advertising costs amounted to $23,171,170 and $4,537,653, respectively.Comprehensive lossComprehensive loss includes net loss and foreign currency translation adjustments and is presented net of tax. The tax effect is nil for the two years endedDecember 31, 2017 and 2016 in the consolidated statements of comprehensive loss.Concentration of credit riskFinancial instruments that potentially expose the Group to concentrations of credit risk consist primarily of cash and accounts receivable. The Group places its cashwith financial institutions with highcredit rating and quality in China. For the year ended December 31, 2017, two customers accounted for over 10% of totalrevenue. For the year ended December 31, 2016, four customers accounted for over 10% of total revenue. At December 31, 2017 and 2016, the Group had credit riskexposure of uninured cash in banks of approximately $72,379 and $83,843, respectively.F16NOTE 3 – INCOME TAXAt December 31, 2017 and 2016, the Group had an unused net operating loss carryforwards of approximately $25,123,726 and $20,081,239, respectively, for income taxpurposes, which expires between 2018 to 2022 and between 2017 to 2021, respectively. At December 31, 2017 and 2016, these net operating losses carryforwards mayresult in future income tax benefits of approximately $5,043,944 and $4,008,863, respectively, however, because realization is uncertain at this time, a valuationallowance in the same amount has been established. Deferred income taxes reflect the net effects of temporary differences between the carrying amounts of assetsand liabilities for financial reporting purposes and the amounts used for income tax purposes.Significant components of the Group’s deferred tax liabilities and assets of December 31, 2017 and 2016 are as follows:December 31,December 31,20172016Deferred tax liabilities$$Deferred tax assetNet operating loss carryforward5,043,9444,008,863Valuation allowance(5,043,944)(4,008,863)Net deferred tax assetMovement of valuation allowanceDecember 31,2017December 31,2016At the beginning of the year$4,008,863$2,049,352Current year addition823,9702,159,518Expired(61,411)Exchange difference272,522(200,007)At the end of the year5,043,9444,008,863The Company is not subject to taxation in BVI under the current BVI law. Subsidiaries operating in the PRC are subject to PRC Enterprise Income Tax at the statutoryrate of 25% for the years ended December 31, 2017 and 2016. Subsidiaries operating in Hong Kong are subject to Hong Kong income taxes at a rate of 16.5% for theyears ended December 31, 2017 and 2016.F17A reconciliation of the income tax expense to the amount computed by applying the current statutory tax rate to the loss before income taxes in the consolidatedstatements of comprehensive income is as follows:December 31,December 31,20172016Loss before income taxes$(6,810,454)$(13,049,031)Tax loss at statutory tax rate(1,655,174)(3,386,822)Nondeductible items6,729,2551,712,857Nontaxable items(3,789,956)(674,189)Change in valuation allowance823,9702,159,518Tax benefits(2,108,095)188,636Income tax expensesNOTE 4 – ACCOUNTS RECEIVABLEAt December 31, 2017 and 2016, accounts receivable consisted of the following:December 31,December 31,20172016Accounts receivable$10,406,602$2,098,946Less: allowance for doubtful accounts676,977233,110$9,729,625$1,865,836NOTE 5 – OTHER RECEIVABLESAt December 31, 2017 and 2016, other receivables consisted of the following:December 31,2017December 31,2016Advances to suppliers$339,701$181,472VAT recoverable (1)3,033,0651,662,805Other5,048,189485,152$2,376,745$2,287,934(1)The balance of advanced VAT represents input VAT available for deducting the amount of VAT paid in the future. During the years ended December 31, 2017and 2016, the Group purchased a large amount of WiFi equipment for deployments, which generated related input VAT approved by tax authority.F18NOTE 6 – AMOUNTS DUE FROM RELATEDPARTIESAt December 31, 2017 and 2016, amounts due from related parties consisted of the following:Name of related partyDecember 31,2017December 31,2016C Media Limited (1)$11,760,692$Ya Tuo Ji International Consultancy (Beijing) Limited (2)204,412183,811(1)C Media Limited is the parent company of LK Technology. The Group expects the amounts due from the related party will be returned to the Group within oneyear.(2)Ya Tuo Ji is a company controlled by the spouse of a major shareholder of C Media Limited. The loan is unsecured, interestfree and repayable on January 5,2019.NOTE 7 – PROPERTY AND EQUIPMENTAt December 31, 2017 and 2016, property and equipment consisted of the following:December 31,December 31,Useful life20172016WiFi equipment3 Years$8,711,424$8,367,678Vehicles5 Years43,246Office and other equipment3 – 5 Years170,242416,434Constructioninprogress2,166,4522,652,28811,048,11811,479,646Less: accumulated depreciation(6,003,246)(3,708,619)$5,044,872$7,771,027For the years ended December 31, 2017 and 2016, depreciation expense amounted to $2,628,884 and $2,474,434, respectively, of which $2,423,655 and $2,194,582,respectively, was included in cost of revenue, $117,648 and $121,740, respectively, was included in selling and marketing expenses and the remainder was included ingeneral and administrative expense.Included in constructioninprogress are WiFI equipment under construction.F19NOTE 8 – GOODWILLIn September of 2014, Zhong Chuan Shi Xun acquired a 100% interest in Zhong Chuan Rui You for a consideration of $7,391,894 (RMB48,000,000). Zhong Chuan RuiYou is primarily engaged in on train WiFi business, deploying WiFi equipment on trains and providing passengers with entertainment and information services ontrains. The book value of the identifiable net assets of Zhong Chuan Rui You was $151,958 (RMB963,000) and a goodwill of $7,239,936 was recorded.NOTE 9 – ACCRUED LIABILITIES AND OTHER PAYABLESAt December 31, 2017 and 2016, accrued liabilities and other payables consisted of the following:December 31,December 31,20172016Deferred revenue$2,326,406$302,735Accrued payroll143,998316,458Other taxes payable3,544,469461,699Other payable852,384686,526Other loans6,095,6559,562,915$12,962,912$11,329,613Deferred revenue represents prepayments from customers for advertising service and is recognized as revenue when the advertising services are rendered.Other loans of $939,555 and $57,416, respectively, as of December 31, 2017 and 2016, are unsecured, bear daily interest at 0.04% and are repayable on demand.NOTE 10 – AMOUNTS DUE TO RELATED PARTIESAt December 31, 2017 and 2016, amounts due to related parties consisted of the following:December 31,December 31,Name of related party20172016Mr. Song Xuesong (“Mr. Song”) (1)$2,921,639$10,669,325C Media Limited (2)$$4,855,236Thumb Beijing Branch (3)$612,103$576,560Thumb Shenzhen Branch (3)$29,941$28,202(1) The Group’s CEO(2) C Media Limited, the parent company.(3) Thumb Beijing and Shenzhen Branch are controlled by the spouse of Mr. Song.Amounts due to related parties are shortterm in nature, noninterest bearing, unsecured and payable on demand.F20NOTE 11 – RETIREMENT AND WELFARE BENEFITSThe Group’s fulltime employees are entitled to staff welfare benefits including medical care, casualty, housing benefits, education benefits, unemployment insuranceand pension benefits through a PRC governmentmandated multiemployer defined contribution plan. The Group is required to accrue the employerportion forthese benefits based on certain percentages of the employees’ salaries. The total provision for such employee benefits of $170,227 and $353,033 during the yearsended December 31, 2017 and 2016, respectively, of which $23,392 and $30,455, respectively, was charged to cost of revenue, $48,957 and $97,408, respectively wascharged to selling and marketing expenses, $49,717 and $86,934, respectively, was charged to general and administrative expenses and $48,161 and $138,236,respectively was charged to research and development expenses. The Group is required to make contributions to the plan out of the amounts accrued for all staffwelfare benefits except for education benefits. The PRC government is responsible for the staff welfare benefits including medical care, casualty, housing benefits,unemployment insurance and pension benefits to be paid to these employees.NOTE 12 – STATUTORY RESERVESAs stipulated by the relevant law and regulations in the PRC, the Group’s subsidiaries and VIEs in the PRC are required to maintain a nondistributable statutorysurplus reserve. Appropriations to the statutory surplus reserve are required to be made at not less than 10% of profit after taxes as reported in the subsidiaries’statutory financial statements prepared under the PRC GAAP. Once appropriated, these amounts are not available for future distribution to owners or shareholders.Once the general reserve is accumulated to 50% of the subsidiaries’ registered capital, the subsidiaries can choose not to provide more reserves. The statutoryreserve may be applied against prior year losses, if any, and may be used for general business expansion and production and increase in registered capital of thesubsidiaries. The Group allocated $Nil to statutory reserves during the years ended December 31, 2017 and 2016, respectively. The statutory reserves cannot betransferred to the Company in the form of loans or advances and are not distributable as cash dividends except in the event of liquidation.NOTE 13 – COMMITMENTS AND CONTINGENCIESOperating leasesWe have entered into operating lease agreements primarily for our office spaces in China. These leases expire through 2018 and are renewable upon negotiation.Future minimum rental payment required under the Office Lease is as follows:Year ending December 31:Amount2018$122,138F21Contingencies(a) Litigation with Shanghai Fusheng Weier Intelligent Control Technology Co., Ltd.On January 22, 2016, Zhong Chuan Rui You and Shanghai Fusheng Weier Intelligent Control Technology Co., Ltd. (“Fusheng Weier”) signed a contract forequipment of $1,652,842 (RMB10,800,000). Since Zhong Chuan Rui You did not make the payments of $1,126,381 (RMB7,360,000) on the due dates, Fusheng Weierfiled a lawsuit against Zhong Chuan Rui You in Shanghai Xuhui District People’s Court on October 8, 2016. On March 9, 2017, Xuhui District People’s Court issuedthe verdict requiring Zhong Chuan Rui You to pay the overdue debts. In August 2017, C Media Limited made the payment of $512,075 (RMB3,346,000). Theremaining balance has been accrued in accounts payable. The payment schedule for the remaining balance is being negotiated by the two parties. On February 5,2018, a hearing was held adding Zhong Chuan Shi Xun as a defendant. The Group plans to settle the remaining balance within one year.(b) Lawsuit with Gansu Jinlun Culture Media Co., Ltd.On August 22, 2014, Zhong Chuan Rui You and Gansu Jinlun Culture Media Co., Ltd. (“Gansu Jinlun”) signed a “Lanzhou Railway Bureau Airconditioned Train WiFi Network System Advertising Operation Rights Agreement” for advertising on 72 trains of $1,467,880 (RMB9,604,633). Due to the dispute on the projectimplementation, Zhong Chuan Rui You did not pay the advertising fee. On August 23, 2017, Gansu Jinlun filed a lawsuit with Gansu Intermediate People’s Court. OnDecember 19, 2017, Gansu Intermediate People’s Court issued a verdict, ruling that Zhong Chuan Rui You settle the overdue advertising fee. Since only 18 out of 72trains have been installed with Wifi network system, Zhong Chuan Rui You disputed and appealed to the verdict. The next court trial date has not yet beendetermined.C Media and Gansu Jinlun are negotiating a potential settlement to resume the contract. According to the legal counsel, it is probable that the settlement will amountto approximately $459,000 (RMB3,000,000); therefore, this amount has been accrued in accounts payable.(c) Litigation with Shenzhen Hua Xun Fang Zhou Technology Co., Ltd.On June 16, 2015, Zhong Chuan Rui You signed a cooperation agreement with Shenzhen Hua Xun Fang Zhou Technology Co., Ltd. (“Shenzhen Hua Xun”) andXuesong Song, a major shareholder of C Media Limited. Pursuant to this agreement, Zhong Chuan Rui You procures equipment from Shenzhen Hua Xun. XuesongSong acts as a joint liability guarantor for the entire debts of Zhong Chuan Rui You under this agreement. As Zhong Chuan Rui You did not make the payments onthe due dates, Shenzhen Hua Xun filed a lawsuit with Shenzhen Baoan District People’s Court on May 31, 2016. On November 1, 2016, Zhong Chuan Rui You,Xuesong Song and Shenzhen Hua Xun reached a settlement in Shenzhen Baoan District People’s Court to settle $1,735,389 (RMB11,355,000) in four instalments. OnDecember 30, 2017, the debt was assigned to C Media Limited.NOTE 14 – SUBSEQUENT EVENTThe Group has evaluated all events or transactions that occurred after December 31, 2017 through May 25, 2018, which is the date that the financial statements wereavailable to be issued.F22EX1.1 2 f20f2017ex11_luokung.htm AMENDED AND RESTATED MEMORANDUM OF ASSOCIATION AND ARTICLES OF ASSOCIATION OF LUOKUNGTECHNOLOGY CORP., DATED AUGUST 20, 2018, AND AS CURRENTLY IN EFFECTExhibit 1.1BC NO: 1553620British Virgin IslandsThe BVI Business Companies Act, 2004(No. 16 of 2004)Memorandum of AssociationandArticles of AssociationofLuokung Technology Corp.Incorporated the 24th day of October, 2009Amended and Restated the 11th Day of December 2009Amended and Restated the 17th Day of December 2009Amended and Restated the 25th Day of March 2010Amended and Restated the 21st day of May 2018Amended and restated the 17 August 2018Amended and restated the 21 August 2018Portcullis (BVI) LimitedPortcullis Chambers4th Floor Ellen Skelton Building3076 Sir Francis Drake HighwayRoad Town, TortolaBritish Virgin IslandsTERRITORY OF THE BRITISH VIRGIN ISLANDSTHE BVI BUSINESS COMPANIES ACT, 2004(No. 16 of 2004)MEMORANDUM OF ASSOCIATIONOFLuokung Technology Corp.NAME1.The name of the Company is Luokung Technology Corp.TYPE OF COMPANY2.The Company is a company limited by shares.REGISTERED OFFICE3.The first Registered Office of the Company is the offices of Portcullis TrustNet (BVI) Limited, Portcullis TrustNet Chambers, P.O. Box 3444, Road Town,Tortola, British Virgin Islands, the office of the registered agent.3.1The current Registered Office of the Company is Portcullis Chambers, 4th Floor Ellen Skelton Building, 3076 SirFrancis Drake Highway, Road Town,Tortola, British Virgin Islands VG1110.REGISTERED AGENT4.The first Registered Agent of the Company is Portcullis TrustNet (BVI) Limited of Portcullis TrustNet Chambers, P.O. Box 3444, Road Town, Tortola,British Virgin Islands.4.1The current Registered Agent of the Company is Portcullis (BVI) Ltd of Portcullis Chambers, 4th Floor Ellen Skelton Building, 3076 Sir Francis DrakeHighway, Road Town, Tortola, British Virgin Islands VG1110.AUTHORISED NUMBER OF SHARES5.The Company is authorised to issue a maximum of 251,000,000 shares.CLASSES, NUMBER AND PAR VALUE OF SHARES6.As at the date of adoption of this memorandum, the Company is authorised to issue (a) 250,000,000 ordinary shares without par value (“OrdinaryShares”); and (b) 1,000,000 preferred shares without par value (“Preferred Shares”).FRACTIONAL SHARES7.The Company may issue fractions of a share and a fractional share shall have the same corresponding fractional liabilities, limitations, preferences,privileges, qualifications, restrictions, rights and other attributes of a whole share of the same class or series of shares.RIGHTS, PRIVILEGES, RESTRICTIONS AND CONDITIONS ATTACHING TO SHARES8.(1)Subject to the memorandum and articles of association (and, for greater clarity, without prejudice to any special rights conferred thereby on theholders of any other shares), an Ordinary Share of the Company confers on the holder;(a)the right to one vote at a meeting of the members of the Company or on any Resolution of Members;(b)the right to an equal share in any Distribution paid by the Company; and(c)the right to an equal share in the distribution of the surplus assets of the Company on a winding up.(2)Subject to the memorandum and articles of association (and, for greater clarity, without prejudice to any special rights conferred thereby on theholders of any other shares), a Preferred Share of the Company confers on the holder;(a)the right to 399 votes at a meeting of the members of the Company or on any Resolution of Members;(b)the right to an equal share in any Distribution paid by the Company;(c)the right to an equal share in the distribution of the surplus assets of the Company on its liquidation.(d)be freely transferable, in whole or in part, by Mr. Xuesong Song to any third party through one or more Private Transactions, subject toApplicable Law; and(e)be freely transferable, in whole or in part, by Mr. Xuesong Song to any third party through one or more Public Transactions, subject to ApplicableLaw and Automatic Conversion of such Preferred Share(s) into Ordinary Share(s).(3)The directors may at their discretion by resolution of directors redeem, purchase or otherwise acquire all or any of the shares in the Companysubject to the Articles..VARIATION OF CLASS RIGHTS9.If at any time the issued shares are divided into different classes or series of shares, the rights attached to any class or series (unless otherwise providedby the terms of issue of the shares of that class or series) may, whether or not the Company is being wound up, be varied with the consent in writing of theholders of not less than threefourths of the issued shares of that class or series and of the holders of not less than threefourths of the issued shares ofany other class or series of shares which may be affected by such variation.RIGHTS NOT VARIED BY THE ISSUE OF SHARES PARI PASSU10.The rights conferred upon the holders of the shares of any class issued with preferred or other rights shall not, unless otherwise expressly provided by theterms of issue of the shares of that class, be deemed to be varied by the creation or issue of further shares ranking pari passu therewith.CAPACITY AND POWERS11.Subject to the Act, any other British Virgin Islands legislation and paragraph 12 below the Company has, irrespective of corporate benefit:(a)full capacity to carry on or undertake any business or activity, do any act or enter into any transaction;(b)for the purposes of paragraph (a), full rights, powers and privileges; and(c)full powers to issue shares with preemptive rights, subject to the Articles.2LIMITATIONS ON THE COMPANY’S BUSINESS12.For the purposes of section 9(4) of the Act the Company may not;(a)carry on banking or trust business, unless it is licensed to do so under the Banks and Trust Companies Act, 1990;(b)carry on business as an insurance or reinsurance company, insurance agent or insurance broker, unless it is licensed under the Insurance Act1994;(c)carry on business of company management, unless it is licensed under the Company Management Act, 1990;(d)carry on the business of providing the registered office or the registered agent for companies incorporated in the British Virgin Islands;(e)carry on the business as a mutual fund, manager of mutual funds or administrator of mutual funds unless it is recognized or licenced as the casemay be under the Mutual Funds Act 1996; or(f)carry on any other business that gives rise to a licencing requirement under any law for the time being in force in the British Virgin Islands unlessit is licenced, regulated, recognised or otherwise approved pursuant to such law.REGISTERED SHARES AND PROHIBITION ON ISSUE OF BEARER SHARES13.Shares in the Company may only be issued as registered shares. The issue of shares to bearer is prohibited.PROHIBITION ON EXCHANGE AND CONVERSION OF REGISTERED SHARES TO BEARER SHARES14.The exchange or conversion of registered shares to bearer shares is prohibited.TRANSFER OF REGISTERED SHARES15.Subject to the provisions of the Articles the Company may upon receipt of an instrument of transfer enter the name of the transferee in the register ofmembers subject to the prior or simultaneous approval of the Company as evidenced by a resolution of directors or by a resolution of members. Subject toany resolution of the members to the contrary, the directors may resolve by resolution of directors to refuse or delay the registration of the transfer forreasons that shall be specified in the resolution of directors.AMENDMENT OF MEMORANDUM AND ARTICLES OF ASSOCIATION16.1The Company may amend its Memorandum or Articles by a resolution of members or by a resolution of directors provided that the directors shall not havethe power to amend the Memorandum or Articles;(a)to restrict the rights or powers of the members to amend the Memorandum or Articles;(b)to change the percentage of members required to pass a resolution to amend the Memorandum or Articles;(c)in circumstances where the Memorandum or Articles cannot be amended by the members; or(d)to Clauses 8, 9, 10 or this Clause 12.16.2No amendment may be made to Regulation 76 of the Articles unless approved by an affirmative vote of the holders of 66 2/3 percent or more of theoutstanding votes of the shares entitled to vote thereon.3DEFINITIONS17.The meanings of words in this Memorandum are as defined in the Articles.We, Portcullis TrustNet (BVI) Limited of Portcullis TrustNet Chambers, P.O. Box 3444, Road Town, Tortola, British Virgin Islands for the purpose ofincorporating a BVI Business Company under the laws of the British Virgin Islands hereby sign this Memorandum of Association the 27th day of October,2009.Incorporator/s/ Nicole WheatleyPortcullis TrustNet (BVI) LimitedPortcullis TrustNet ChambersP.O. Box 3444Road Town, TortolaBritish Virgin Islands(Sgd. Nicole Wheatley)4TERRITORY OF THE BRITISH VIRGIN ISLANDSTHE BVI BUSINESS COMPANIES ACT, 2004(No. 16 of 2004)ARTICLES OF ASSOCIATIONOFLuokung Technology Corp.PRELIMINARY1.In these Articles, if not inconsistent with the subject or context, the words and expressions standing in the first column of the following table shall bear themeanings set opposite them respectively in the second column thereof.WordsMeaningApplicable Lawall Laws, including those of a jurisdiction in or outside of the United States, applicable to the Private orPublic Transactions.Actthe BVI Business Companies Act, 2004 (No 16 of 2004.) including any modification, extension, reenactment or renewal thereof and any regulations made thereunder.Articlesthese Articles of Association as originally framed or as from time to time amended.Automatic Conversioneach Preferred Share shall be automatically converted at any time after issue and without the payment ofany additional sum into an equal number of fully paid Ordinary Shares upon the conclusion of anytransfer by Mr. Xuesong Song to any third party through one or more Public Transactions.Designated Stock Exchangeeither the Nasdaq National Stock Market, Inc. or such other exchange or quotation bureau on which, theCompany’s Securities are listed or traded; provided that until the Securities are listed on any such“Exchange” the rules of any such Designated Stock Exchange shall be inapplicable to these Articles.directora director of the Company.distributionin relation to a distribution by a company to a member, means(i)the direct or indirect transfer of an asset, other than the Company’s own shares, to or forthe benefit of the member or(ii)the incurring of a debt to or for the benefit of a member,in relation to shares held by a member, and whether by means of a purchase of an asset, the purchase,redemption or other acquisition of shares, a transfer of indebtedness or otherwise, and includes adividend.Independent Directora person who meets the then current requirements for “independence” of the applicable rules andregulations of the U.S. Securities and Exchange Commission and the Designated Stock Exchange.5member or shareholderin relation to the Company, means a person whose name is entered in the register of members as theholder of one or more shares, or fractional shares, in the Company.Memorandumthe Memorandum of Association of the Company as originally framed or as from time to time amended.Mr. Xuesong Songthe founder, a director and Chairman of LK Technology Ltd.Ordinary Sharesissued or unissued ordinary shares of no par value of the Company having the rights, preferences andprivileges set out in the MemorandumPersonAn individual, a corporation, a trust, trustee, the estate of a deceased individual, a partnership or anunincorporated association of persons.Preferred Sharesissued or unissued preferred shares of no par value of the Company having the rights, preferences andprivileges set out in the MemorandumPrivate Transactionstransactions that are not considered as a Public Transaction.Public Transactionstransactions through any national securities exchanges and/or through the automated quotation systemincluding but not limited to NASDAQ, NYSE (including NYSE American) or OTC Markets, or anytransaction executed by the broker or with a market maker.Related Party(a) any director, officer and employee of the Company; (b) any family member of such director, officer andemployee; and (c) any entity (e.g. a corporation, partnership, or trust) controlled by or set up for thebenefit of a director, officer or employee, or a family member of such director, officer or employee.Relevant SystemA facility for the electronic transfer of uncertificated securities administered by The Depository TrustCompany or such other Person regulated by the SEC.resolution of directors(a)A resolution approved at a duly convened and constituted meeting of directors of the Companyor of a committee of directors of the Company by the affirmative vote of a simple majority of thedirectors present at the meeting who voted and did not abstain; or(b)a resolution consented to in writing by a simple majority of the directors or of all members of thecommittee, as the case may be;except that where a director is given more than one vote, he shall be counted by the number ofvotes he casts for the purpose of establishing a majority.resolution of membersSubject to the provisions of the Memorandum and Articles means:(a)A resolution approved at a duly convened and constituted meeting of the members of theCompany by the affirmative vote of(i)a majority of in excess of 50% of the votes of the shares entitled to vote and voting onthe resolution, or(ii)a majority of in excess of 50% of the votes of each class or series of shares entitled tovote as a class or series and voting on the resolution and a majority of in excess of 50%of the votes of the remaining shares entitled to vote and voting on the resolution; or6(b)a resolution consented to in writing by(i)an absolute majority of the votes of shares entitled to vote thereon, or(ii)an absolute majority of the votes of each class or series of shares entitled to votethereon as a class or series and of an absolute majority of the votes of the remainingshares entitled to vote thereon.SealAny Seal which has been duly adopted as the common seal of the Company.SECThe United States Securities and Exchange Commission.Securitiesshares and debt obligations of every kind, and options, warrants and rights to acquire shares, or debtobligations.SharesOrdinary Shares and/or Preferred Shares, as the case may be.solvency testa company satisfies the solvency test if;(i)the value of the company’s assets exceeds its liabilities, and(ii)the company is able to pay its debts as they fall due.treasury sharesshares in the Company that were previously issued but were repurchased, redeemed or otherwiseacquired by the Company and not cancelled.2.“Written” or any term of like import includes words typewritten, printed, painted, engraved, lithographed, photographed or represented or reproduced byany mode of reproducing words in a visible form, including telex, facsimile, telegram, cable or other form of writing produced by electronic communication.3.Save as aforesaid any words or expressions defined in the Act shall bear the same meaning in these Articles.4.Whenever the singular or plural number, or the masculine, feminine or neuter gender is used in these Articles, it shall equally, where the context admits,include the others.5.A reference in these Articles to voting in relation to shares shall be construed as a reference to voting by members holding the shares except that it is thevotes allocated to the shares that shall be counted and not the number of members who actually voted and a reference to shares being present at a meetingshall be given a corresponding construction.6.A reference to money in these Articles is, unless otherwise stated, a reference to the currency in which shares in the Company shall be issued according tothe provisions of the Memorandum.7REGISTERED SHARES7.Every member holding registered shares in the Company shall be entitled to a certificate signed by a director or officer of the Company or such otherperson who may be authorised from time to time by resolution of directors or under the Seal, with or without the signature of any director of the Company,specifying the share or shares held by him and the signature of the director or officer or person so authorised and the Seal may be facsimiles.8.Any member receiving a share certificate for registered shares shall indemnify and hold the Company and its directors and officers harmless from any lossor liability which it or they may incur by reason of any wrongful or fraudulent use or representation made by any person by virtue of the possessionthereof. If a share certificate for registered shares is worn out or lost it may be renewed on production of the worn out certificate or on satisfactory proof ofits loss together with such indemnity as may be required by a resolution of directors.9.If several persons are registered as joint holders of any shares, any one of such persons may give an effectual receipt for any distribution payable inrespect of such shares.10.Nothing in these Articles shall require title to any shares or other Securities to be evidenced by a certificate if the Act and the rules of the Designated StockExchange permit otherwise.SHARES AND ISSUED SHARES11.Subject to the provisions of these Articles and, if applicable, the rules of the Designated Stock Exchange, and any resolution of members, the directors ofthe Company may, without limiting or affecting any rights previously conferred on the holders of any existing shares or class or series of shares, offer, allot,grant options over or otherwise dispose of shares to such persons, at such times and upon such terms and conditions as the Company may by resolutionof directors determine. The directors shall not issue more shares than the maximum number provided for in the Memorandum.12.The Company may issue fully paid, partly paid or nil paid shares as well as bonus shares. A partly paid or nil paid share or a share issued for a promissorynote or other written obligation for payment of a debt may be issued subject to forfeiture in the manner prescribed in these Articles.13.Shares in the Company may be issued for consideration in any form, including money, a promissory note or other obligation to contribute money orproperty, real property, personal property (including goodwill and knowhow) services rendered or a contract for future services and the amount of suchconsideration shall be determined by resolution of directors, except that in the case of shares with par value, the amount shall not be less than the parvalue, and in the absence of fraud the decision of the directors as to the value of the consideration received by the Company in respect of the issue isconclusive unless a question of law is involved.14.Before issuing shares for a consideration other than money, the directors shall pass a resolution stating;(a)the amount to be credited for the issue of the shares;(b)their determination of the reasonable present cash value of the nonmoney consideration for the issue; and(c)that, in their opinion, the present cash value of the nonmoney consideration for the issue is not less than the amount to be credited for the issueof the shares.15.A share issued by the Company upon conversion of, or in exchange for, another share or a debt obligation or other security in the Company, shall betreated for all purposes as having been issued for money equal to the consideration received or deemed to have been received by the Company in respectof the other share, debt obligation or security.16.Treasury shares may be disposed of by the Company on such terms and conditions (not otherwise inconsistent with these Articles) as the Company mayby resolution of directors determine.17.Subject to these Articles, the Company may purchase, redeem or otherwise acquire and hold its own shares save that the Company may not purchase,redeem or otherwise acquire its own shares without the consent of the member whose shares are to be purchased, redeemed or otherwise acquired unlessthe Company is permitted by the Act or any other provision in the Memorandum or Articles to purchase, redeem or otherwise acquire the shares withouttheir consent.818.No purchase, redemption or other acquisition of shares shall be made unless the directors determine by resolution of the directors that immediately after thepurchase, redemption or other acquisition the value of the Company’s assets will exceed its liabilities and the Company will be able to pay its debts as theyfall due.19.Sections 60 (Process for acquisition of own shares), 61 (Offer to one or more shareholders) and 62 (Shares redeemed otherwise than at the option ofcompany) of the Act shall not apply to the Company.20.A determination by the directors under Article 18 is not required;(a)the Company redeems a share or shares pursuant to a right of a member to have his shares redeemed or to have his shares exchanged for moneyor other property of the Company; or(b)by virtue of the provisions of Section 179 of the Act.21.Shares that the Company purchases, redeems or otherwise acquires pursuant to Article 17 may be cancelled or held as treasury shares except to the extentthat such shares are in excess of 80 percent of the issued shares of the Company in which case they shall be cancelled but they shall be available forreissue.22.Shares in the Company shall only be held as treasury shares where the directors of the Company resolve as such and the number of shares acquired, whenaggregated with shares of the same class already held by the Company as treasury shares, does not exceed 50% of the shares of that class previouslyissued by the Company, excluding shares that have been cancelled. All rights and obligations attaching to a treasury share are suspended and shall not beexercised by or against the Company while it holds the share as a treasury share. Treasury shares may be reissued by the Company as new shares.23.The Company shall keep a register of members containing;(a)the names and addresses of the persons who hold registered shares in the Company;(b)the number of each class and series of registered shares held by each member;(c)the date on which the name of each member was entered in the register of members;(d)the date on which any person ceased to be a member; and(e)such other information as may be prescribed pursuant to the Act.24.The register of members may be in any such form as the directors may approve but if it is in magnetic, electronic or other data storage form, the companymust be able to produce legible evidence of its contents.25.The original or a copy of the register of members shall be kept at the registered office of the Company or at the office of the registered agent of theCompany.26.A share is deemed to be issued when the name of the member is entered in the register of members.27.Subject to the Act and the rules of the Designated Stock Exchange, the board of directors without further consultation with the holders of any shares orSecurities may resolve that any class or series of shares or other Securities from time to time in issue or to be issued (including shares in issue at the date ofthe adoption of these Articles) may be issued, held, registered and converted to uncertificated form.28.Conversion of shares held in certificated form into shares held in uncertificated form, and vice versa, may be made in such manner as the board of directors,in its absolute discretion, may think fit. The Company or any duly authorised transfer agent (a “Transfer Agent”) shall enter on the register of membershow many shares are held by each member in uncertificated form and in certificated form and shall maintain the register of members. Notwithstanding anyprovision of these Articles, a class or series of shares shall not be treated as two classes by virtue only of that class or series comprising both certificatedshares and uncertificated Shares or as a result of any provision of these Articles which apply only in respect of certificated or uncertificated shares.9MORTGAGES AND CHARGES OF REGISTERED SHARES29.Members may mortgage or charge their registered shares in the Company with such mortgage or charge being evidenced in writing and signed by, or withthe authority of the registered holder of a registered share to which the mortgage or charge relates. The Company shall give effect to the terms of any validmortgage or charge except insofar as it may conflict with any requirements herein contained for consent to the transfer of shares.30.In the case of the mortgage or charge of registered shares there may be entered in the share register of the Company at the request of the registered holderof such shares(a)a statement that the shares are mortgaged or charged;(b)the name of the mortgagee or chargee; and(c)the date on which the aforesaid particulars are entered in the share register.31.Where particulars of a mortgage or charge are entered in the register of members, such particulars shall be cancelled(a)with the written consent of the named mortgagee or chargee or anyone authorized to act on his behalf; or(b)upon evidence satisfactory to the directors of the discharge of the liability secured by the mortgage or charge and the issue of such indemnities asthe directors shall consider necessary or desirable.32.Whilst particulars of a mortgage or charge over registered shares are entered in the register of members pursuant to the preceding articles no transfer ofany share comprised therein shall be effected without the written consent of the named mortgagee or chargee or anyone authorized to act on his behalf.FORFEITURE33.When shares not fully paid on issue or issued for a promissory note or other written obligation for payment of a debt have been issued subject toforfeiture, the following provisions shall apply.34.Written notice specifying a date for payment to be made and the shares in respect of which payment is to be made shall be served on the member whodefaults in making payment pursuant to a promissory note or other written obligations to pay a debt.35.The written notice specifying a date for payment shall(a)name a further date not earlier than the expiration of 14 days from the date of service of the notice on or before which payment required by thenotice is to be made; and(b)contain a statement that in the event of nonpayment at or before the time named in the notice the shares, or any of them, in respect of whichpayment is not made will be liable to be forfeited.36.Where a written notice has been issued and the requirements of the notice have not been complied with within the prescribed time, the directors may at anytime before tender of payment forfeit and cancel the shares to which the notice relates.37.The Company is under no obligation to refund any moneys to the member whose shares have been forfeited and cancelled pursuant to these provisions.Upon forfeiture and cancellation of the shares the member is discharged from any further obligation to the Company with respect to the shares forfeitedand cancelled.10LIEN38.The Company shall have a first and paramount lien on every share issued for a promissory note or for any other binding obligation to contribute money orproperty or any combination thereof to the Company, and the Company shall also have a first and paramount lien on every share standing registered in thename of a member, whether singly or jointly with any other person or persons, for all the debts and liabilities of such member or his estate to the Company,whether the same shall have been incurred before or after notice to the Company of any interest of any person other than such member, and whether thetime for the payment or discharge of the same shall have actually arrived or not, and notwithstanding that the same are joint debts or liabilities of suchmember or his estate and any other person, whether a member of the Company or not. The Company’s lien on a share shall extend to all distributionspayable thereon. The directors may at any time either generally, or in any particular case, waive any lien that has arisen or declare any share to be wholly orin part exempt from the provisions of this Article.39.In the absence of express provisions regarding sale in the promissory note or other binding obligation to contribute money or property, the Company maysell, in such manner as the directors may by resolution of directors determine, any share on which the Company has a lien, but no sale shall be made unlesssome sum in respect of which the lien exists is presently payable nor until the expiration of twentyone days after a notice in writing, stating and demandingpayment of the sum presently payable and giving notice of the intention to sell in default of such payment, has been served on the holder for the timebeing of the share.40.The net proceeds of the sale by the Company of any shares on which it has a lien shall be applied in or towards payment of discharge of the promissorynote or other binding obligation to contribute money or property or any combination thereof in respect of which the lien exists so far as the same ispresently payable and any residue shall (subject to a like lien for debts or liabilities not presently payable as existed upon the share prior to the sale) bepaid to the holder of the share immediately before such sale. For giving effect to any such sale the directors may authorize some person to transfer theshare sold to the purchaser thereof. The purchaser shall be registered as the holder of the share and he shall not be bound to see to the application of thepurchase money, nor shall his title to the share be affected by any irregularity or invalidity in the proceedings in reference to the sale.TRANSFER OF SHARES41.Registered shares in the Company are transferred by a written instrument of transfer signed by the transferor and containing the name and address of thetransferee. The instrument of transfer shall be signed by the transferee if registration as a holder of the share shall impose a liability to the Company on thetransferee. The instrument of transfer of a registered share shall be sent to the Company for registration.42.The board of directors may resolve that interests in shares in the form of depositary receipts may be transferred or otherwise dealt with in accordance withthe regulations and practices instituted by the operator of the Relevant System and any holder of interests in shares shall be entitled to transfer suchinterests by means of such Relevant System and the operator of the Relevant System shall act as agent of the holders of such interests for the purposes ofthe transfer of those interests.43.The register of members may be closed at such times and for such periods as the board of directors may from time to time determine, upon notice beinggiven by advertisement in such newspapers as may be required by the Act and the practice of the Designated Stock Exchange.44.The transfer of a registered share is effective when the name of the transferee is entered on the register of members.45.If the directors of the Company are satisfied that an instrument of transfer relating to shares has been signed but that the instrument has been lost ordestroyed, they may resolve;(a)to accept such evidence of the transfer of the shares as they consider appropriate; and(b)that the transferee’s name should be entered in the register of members notwithstanding the absence of the instrument of transfer.46.The Company must on the receipt of an instrument of transfer from the transferor or transferee of a registered share in the Company enter the name of thetransferee of the share in the register or members unless the directors, if permitted by the Memorandum or these Articles, resolve by resolution of directorsto refuse or delay the registration of the transfer for reasons that shall be specified in the resolution of directors.11TRANSMISSION OF SHARES47.The personal representative of a deceased member may transfer a share even though the personal representative is not a member at the time of the transfer.48.The personal representative, executor or administrator of a deceased member, the guardian of an incompetent member or the trustee of a bankrupt membershall be the only person recognized by the Company as having any title to his share but they shall not be entitled to exercise any rights as a member of theCompany until they have proceeded as set forth in the next following three Articles.49.The production to the Company of any document which is evidence of probate of the will, or letters of administration of the estate, or confirmation asexecutor, of a deceased member or of the appointment of a guardian of an incompetent member or the trustee of a bankrupt member shall be accepted by theCompany even if the deceased, incompetent or bankrupt member is domiciled outside the British Virgin Islands if the document evidencing the grant ofprobate or letters of administration, confirmation as executor, appointment as guardian or trustee in bankruptcy is issued by a foreign court which hadcompetent jurisdiction in the matter. For the purpose of establishing whether or not a foreign court had competent jurisdiction in such a matter the directorsmay obtain appropriate legal advice. The directors may also require an indemnity to be given by the executor, administrator, guardian or trustee inbankruptcy.50.The Company may enter in the register of members the name of any person becoming entitled by operation of law or otherwise to a share or shares inconsequence of the death, incompetence or bankruptcy upon such evidence being produced as may reasonably be required by the directors.51.Any person who has become entitled to a share or shares in consequence of the death, incompetence or bankruptcy of any member may, instead of beingregistered himself, request in writing that some person to be named by him be registered as the transferee of such share or shares and such request shalllikewise be treated as if it were a transfer.52.What amounts to incompetence on the part of a person is a matter to be determined by the court having regard to all the relevant evidence and thecircumstances of the case.REDUCTION OR INCREASE IN AUTHORISED AND UNISSUED SHARES48.The Company may amend the Memorandum to increase or reduce the maximum number of shares the Company is authorised to issue and may in respect ofany unissued shares increase or reduce the number of such shares, or effect any combination of the foregoing.49.The Company may(1)(a) divide its shares, including issued shares, into a larger number of shares; or (b) combine its shares, including issued shares, into a smallernumber of shares.(2)A division or combination of shares, including issued shares, of a class or series shall be for a larger or smaller number, as the case may be, ofshares in the same class or series.(3)A company shall not divide its shares under subsection (1)(a) or (2) if it would cause the maximum number of shares that the Company isauthorised to issue by its memorandum to be exceeded.(4)Where shares are divided or combined under this article, the aggregate par value of the new shares must be equal to the aggregate par value of theoriginal shares.MEETINGS AND CONSENTS OF MEMBERS50.The directors of the Company may convene meetings of the members of the Company at such times and in such manner and places within or outside theBritish Virgin Islands as the directors consider necessary or desirable. The Company may hold an annual general meeting, but shall not (unless required bythe applicable rules of the Designated Stock Exchange for so long as the Company’s Securities are listed or traded on the Designated Stock Exchange) beobliged to hold an annual general meeting.51.Upon the written request of members holding 30 percent or more of the outstanding voting shares in the Company the directors shall convene a meeting ofmembers.1252.The directors shall give not less than 7 days notice of meetings of members to those persons whose names on the date the notice is given appear asmembers in the share register of the Company and are entitled to vote at the meeting.53.The directors may fix the date notice is given of a meeting of members as the record date for determining those shares that are entitled to vote at themeeting.54.A meeting of members may be called on short notice:(a)if members holding not less than 90 percent of the total number of shares entitled to vote on all matters to be considered at the meeting, or 90percent of the votes of each class or series of shares where members are entitled to vote thereon as a class or series together with not less than a90 percent majority of the remaining votes, have agreed to short notice of the meeting, or(b)if all members holding shares entitled to vote on all or any matters to be considered at the meeting have waived notice of the meeting and for thispurpose presence at the meeting shall be deemed to constitute waiver.55.The inadvertent failure of the directors to give notice of a meeting to a member, or the fact that a member has not received notice, does not invalidate themeeting.56.A member may be represented at a meeting of members by a proxy who may speak and vote on behalf of the member.57.The instrument appointing a proxy shall be produced at the place appointed for the meeting before the time for holding the meeting at which the personnamed in such instrument proposes to vote.58.An instrument appointing a proxy shall be in substantially the following form or such other form as the Chairman of the meeting shall accept as properlyevidencing the wishes of the member appointing the proxy.(Name of Company)I/Webeing a member of the aboveCompany withshares HEREBY APPOINTofor failing himofto be my/our proxy to vote for me/us at the meeting of members to be held on the dayofand at any adjournment thereof.(Any restrictions on voting to be inserted here.)Signed this day ofMember59.The following shall apply in respect of joint ownership of shares:a.if two or more persons hold shares jointly each of them may be present in person or by proxy at a meeting of members and may speak as a member;b.if only one of the joint owners is present in person or by proxy he may vote on behalf of all joint owners, andc.if two or more of the joint owners are present in person or by proxy they must vote as one.60.A member shall be deemed to be present at a meeting of members if he participates by telephone or other electronic means and all members participating inthe meeting are able to hear each other.61.A meeting of members is duly constituted if, at the commencement of the meeting, there are present in person or by proxy not less than 50 percent of thevotes of the shares or class or series of shares entitled to vote on resolutions of members to be considered at the meeting. If a quorum be present,notwithstanding the fact that such quorum may be represented by only one person then such person may resolve any matter and a certificate signed bysuch person accompanied where such person be a proxy by a copy of the proxy form shall constitute a valid resolution of members.1362.If within two hours from the time appointed for the meeting a quorum is not present, the meeting, if convened upon the requisition of members, shall bedissolved; in any other case it shall stand adjourned to the next business day at the same time and place or to such other time and place as the directorsmay determine, and if at the adjourned meeting there are present within one hour from the time appointed for the meeting in person or by proxy not lessthan one third of the votes of the shares or each class or series of shares entitled to vote on the resolutions to be considered by the meeting, those presentshall constitute a quorum but otherwise the meeting shall be dissolved.63.At every meeting of members, the Chairman of the Board of Directors shall preside as chairman of the meeting. If there is no Chairman of the Board ofDirectors or if the Chairman of the Board of Directors is not present at the meeting, the members present shall choose some one of their number to be thechairman. If the members are unable to choose a chairman for any reason, then the person representing the greatest number of voting shares present inperson or by prescribed form of proxy at the meeting shall preside as chairman failing which the oldest individual member or representative of a memberpresent shall take the chair.64.The chairman may, with the consent of the meeting, adjourn any meeting from time to time, and from place to place, but no business shall be transacted atany adjourned meeting other than the business left unfinished at the meeting from which the adjournment took place.65.At any meeting of the members the chairman shall be responsible for deciding in such manner as he shall consider appropriate whether any resolution hasbeen carried or not and the result of his decision shall be announced to the meeting and recorded in the minutes thereof. If the chairman shall have anydoubt as to the outcome of any resolution put to the vote, he shall cause a poll to be taken of all votes cast upon such resolution, but if the chairman shallfail to take a poll then any member present in person or by proxy who disputes the announcement by the chairman of the result of any vote mayimmediately following such announcement demand that a poll be taken and the chairman shall thereupon cause a poll to be taken. If a poll is taken at anymeeting, the result thereof shall be duly recorded in the minutes of that meeting by the chairman.66.Any person other than an individual shall be regarded as one member and subject to the specific provisions hereinafter contained for the appointment ofrepresentatives of such persons the right of any individual to speak for or represent such member shall be determined by the law of the jurisdiction where,and by the documents by which, the person is constituted or derives its existence. In case of doubt, the directors may in good faith seek legal advice fromany qualified person and unless and until a court of competent jurisdiction shall otherwise rule, the directors may rely and act upon such advice withoutincurring any liability to any member.67.Any person other than an individual which is a member of the Company may by resolution of its directors or other governing body authorize such personas it thinks fit to act as its representative at any meeting of the Company or of any class of members of the Company, and the person so authorized shall beentitled to exercise the same powers on behalf of the person which he represents as that person could exercise if it were an individual member of theCompany.68.The chairman of any meeting at which a vote is cast by proxy or on behalf of any person other than an individual may call for a notarially certified copy ofsuch proxy or authority which shall be produced within 7 days of being so requested or the votes cast by such proxy or on behalf of such person shall bedisregarded.69.Directors of the Company may attend and speak at any meeting of members of the Company and at any separate meeting of the holders of any class orseries of shares in the Company.70.An action that may be taken by the members at a meeting may also be taken by a resolution of members consented to in writing or by telex, telegram, cable,facsimile or other written electronic communication, without the need for any notice, but if any resolution of members is adopted otherwise than by theunanimous written consent of all members, a copy of such resolution shall forthwith be sent to all members not consenting to such resolution. The consentmay be in the form of counterparts, each counterpart being signed by one or more members.14DIRECTORS71.The first directors of the Company shall be appointed by the first registered agent of the Company and thereafter the directors shall be appointed byresolution of members, subject to Article 78, for such term as the members determine. A person shall not be appointed as a director unless he hasconsented in writing to be a director.72.The minimum number of directors shall be one and the maximum number shall be 20. Unless otherwise determined by the Company in a meeting ofshareholders and subject to the requirements of the Memorandum, the directors may by a Resolution of Directors, amend this Regulation 72 to change thenumber of directors. For as long as Securities of the Company are listed or traded on the Designated Stock Exchange, the directors shall include suchnumber of Independent Directors as applicable law, rules or regulations of the Designated Stock Exchange may require for a foreign private issuer as longas the Company is a foreign private issuer.73.Each director shall hold office for the term, if any, fixed by resolution of members or until his earlier death, resignation or removal.74.Where the Company has only one member who is an individual and that member is also the sole director of the Company, that sole member/director may, byinstrument in writing, nominate a person who is not disqualified from being a director of the Company under section 111(1) of the Act as a reserve directorof the Company to act in the place of the sole director in the event of his death.75.The nomination of a person as a reserve director of the Company ceases to have effect if;a.before the death of the sole member/director who nominated him;(i)he resigns as reserve director, or(ii)the sole member/director revokes the nomination in writing; orb.the sole member/director who nominated him ceases to be the sole member/director of the Company for any reason other than his death.76.A director may be removed from office, with or without cause, by a resolution of directors or a resolution of members. For the purposes of this Regulation76, “cause” means the willful and continuous failure by a director to substantially perform his duties to the Company (other than any such failure resultingfrom incapacity due to physical or mental illness) or the willful engaging by the director in gross misconduct materially and demonstrably injurious to theCompany. If a director is removed from office without cause by a resolution of the members, for the purposes of this Regulation, the resolution of memberswill require the affirmative vote of the holders of 66 2/3 percent or more of the outstanding votes of the shares entitled to vote thereon.77.A director may resign his office by giving written notice of his resignation to the Company and the resignation shall have effect from the date the notice isreceived by the Company or from such later date as may be specified in the notice. A director of the Company shall resign forthwith if he is, or becomes,disqualified to act as a director under the Act.78.The directors may at any time by resolution of directors appoint any person to be a director to fill a vacancy. There is a vacancy if a director dies orotherwise ceases to hold office as a director prior to the expiration of his term of office, where his term of office was fixed upon his appointment. Thedirectors may not appoint a director to fill a vacancy for a term exceeding the term that remained when the person who has ceased to be a director left orotherwise ceased to hold office.79.The Company shall keep a register of directors containing:a.the names and addresses of the persons who are directors of the Company or who have been nominated as reserve directors of the Company;b.the date on which each person whose name is entered in the register was appointed as a director of the Company or nominated as a reservedirector of the Company;c.the date on which each person named as a director ceased to be a director of the Company;d.the date on which the nomination of any person nominated as a reserve director ceased to have effect; ande.such other information as may be prescribed pursuant to the Act.1580.The original or a copy of any register of directors shall be kept at the office of the registered agent of the Company.81.The register of directors may be in any such form as the directors may approve but if it is in magnetic, electronic or other data storage form, the companymust be able to produce legible evidence of its contents.82.With the prior or subsequent approval by a resolution of members, the directors may, by a resolution of directors, fix the emoluments of directors withrespect to services to be rendered in any capacity to the Company.83.A director shall not require a share qualification and may be an individual or a company.POWERS OF DIRECTORS84.The business and affairs of the Company shall be managed by the directors who may pay all expenses incurred preliminary to and in connection with theformation and registration of the Company and may exercise all such powers of the Company as are not by the Act or by the Memorandum or theseArticles required to be exercised by the members of the Company, subject to any delegation of such powers as may be authorized by these Articles and tosuch requirements as may be prescribed by a resolution of members; but no requirement made by a resolution of members shall prevail if it be inconsistentwith these Articles nor shall such requirement invalidate any prior act of the directors which would have been valid if such requirement had not been made.Notwithstanding anything in Section 175 of the Act the directors shall have the power to sell, transfer, lease, exchange or otherwise dispose of more thanfifty percent of the assets of the Company without submitting a proposal to or obtaining the consent of the members of the Company.85.If the Company is a whollyowned subsidiary of a holding company a director may when exercising powers or performing duties as a director act in amanner which he believes is in the best interests of the holding company even though it may not be in the best interests of the Company.86.The directors may, by a resolution of directors, appoint any person, including a person who is a director, to be an officer or agent of the Company. Theresolution of directors appointing an agent may authorize the agent to appoint one or more substitutes or delegates to exercise some or all of the powersconferred on the agent by the Company.87.Every officer or agent of the Company has such powers and authority of the directors, including the power and authority to affix the Seal, as are set forth inthese Articles or in the resolution of directors appointing the officer or agent, except that no agent has any power or authority with respect to thefollowing;a.to amend the memorandum or articles;b.to change the registered office or agent;c.to designate committees of directors;d.to delegate powers to a committee of directors;e.to appoint or remove directors;f.to appoint or remove an agent;g.to fix emoluments of directors;h.to approve a plan of merger, consolidation or arrangement;i.to make a declaration of solvency for the purposes of section 198(1)(a) of the Act or to approve a liquidation plan;j.to make a determination under section 57(1) of the Act that the company will, immediately after a proposed distribution, satisfy the solvency test;ork.to authorise the Company to continue as a company incorporated under the laws of a jurisdiction outside the British Virgin Islands.1688.Any director which is a body corporate may appoint any person its duly authorized representative for the purpose of representing it at meetings of theBoard of Directors or with respect to unanimous written consents.89.The continuing directors may act notwithstanding any vacancy in their body, save that if their number is reduced to their knowledge below the numberfixed by or pursuant to these Articles as the necessary quorum for a meeting of directors, the continuing directors or director may act only for the purposeof appointing directors to fill any vacancy that has arisen or for summoning a meeting of members.90.The directors may by resolution of directors exercise all the powers of the Company to borrow money and to mortgage or charge its undertakings andproperty or any part thereof, to issue debentures, debenture stock and other securities whenever money is borrowed or as security for any debt, liability orobligation of the Company or of any third party.91.All cheques, promissory notes, drafts, bills of exchange and other negotiable instruments and all receipts for moneys paid to the Company, shall be signed,drawn, accepted, endorsed or otherwise executed, as the case may be, in such manner as shall from time to time be determined by resolution of directors.92.The Company shall keep a register of all relevant charges created by the Company showing:a.if the charge is a charge created by the Company, the date of its creation or if the charge is existing on property acquired by the Company, the dateon which the property was acquired;b.a short description of the liability secured by the charge;c.a short description of the property charged;d.the name and address of the trustee for the security, or if there is no such trustee the name and address of the chargee;e.unless the charge is a security to bearer, the name and address of the holder of the charge;f.details of any prohibition or restriction , if any, contained in the instrument creating the charge on the power of the company to create any futurecharge ranking in priority to or equally with the charge; andg.such other information as may be prescribed pursuant to the Act.93.The original or a copy of the register of charges shall be kept at the registered office of the Company or at the office of the registered agent of the Company.PROCEEDINGS OF DIRECTORS94.The directors of the Company or any committee thereof may meet at such times and in such manner and places within or outside the British Virgin Islandsas the directors may determine to be necessary or desirable. Any one or more directors may convene a meeting of directors.95.A director shall be deemed to be present at a meeting of directors if he participates by telephone or other electronic means and all directors participating inthe meeting are able to hear each other.96.A director shall be given not less than 3 days notice of meetings of directors, but a meeting of directors held without 3 days notice having been given to alldirectors shall be valid if all the directors entitled to vote at the meeting who do not attend, waive notice of the meeting and for this purpose, the presenceof a director at a meeting shall constitute waiver on his part. The inadvertent failure to give notice of a meeting to a director, or the fact that a director hasnot received the notice, does not invalidate the meeting.1797.A director may by a written instrument appoint an alternate who need not be a director and an alternate is entitled to attend meetings in the absence of thedirector who appointed him and to vote or consent in place of the director.98.A meeting of directors is duly constituted for all purposes if at the commencement of the meeting there are present in person or by alternate not less thanone half of the total number of directors, unless there are only 2 directors in which case the quorum shall be 2.99.If the Company shall have only one director the provisions herein contained for meetings of the directors shall not apply but such sole director shall havefull power to represent and act for the Company in all matters as are not by the Act or the Memorandum or these Articles required to be exercised by themembers of the Company and in lieu of minutes of a meeting shall record in writing and sign a note or memorandum of all matters requiring a resolution ofdirectors. Such a note or memorandum shall constitute sufficient evidence of such resolution for all purposes.100.At every meeting of the directors the Chairman of the Board of Directors shall preside as chairman of the meeting. If there is no Chairman of the Board ofDirectors or if the Chairman of the Board of Directors is not present at the meeting the Vice Chairman of the Board of Directors shall preside. If there is noVice Chairman of the Board of Directors or if the Vice Chairman of the Board of Directors is not present at the meeting the directors present shall choosesome one of their number to be chairman of the meeting.101.An action that may be taken by the directors or a committee of directors at a meeting may also be taken by a resolution of directors or a committee ofdirectors consented to in writing or by telex, telegram, cable, facsimile or other written electronic communication by all directors or all members of thecommittee as the case may be, without the need for any notice. The consent may be in the form of counterparts, each counterpart being signed by one ormore directors.102.The directors shall cause the following records to be kept:a.minutes of all meetings of directors, members, committees of directors and committees of members; andb.copies of all resolutions consented to by directors, members, committees of directors and committees of members.103.The resolutions, records and minutes referred to in the preceding Article shall be kept at the registered office of the Company, its principal place ofbusiness or at such other place as the directors determine.104.The directors may, by resolution of directors, designate one or more committees, each consisting of one or more directors.105.Subject to the following Article, each committee of directors has such powers and authorities of the directors, including the power and authority to affix theSeal, as are set forth in the resolution of directors establishing the committee.106.The directors have no power to delegate the following powers to a committee of directors;a.to amend the memorandum or articles;b.to change the registered office or agent;c.to designate committees of directors;d.to delegate powers to a committee of directors;e.to appoint or remove directors;f.to appoint or remove an agent;g.to fix emoluments of directors;18h.to approve a plan of merger, consolidation or arrangement;i.to make a declaration of solvency for the purposes of section 198(1)(a) or to approve a liquidation plan;j.to make a determination under section 57(1) that the company will, immediately after a proposed distribution, satisfy the solvency test; ork.to authorise the company to continue as a company incorporated under the laws of a jurisdiction outside the British Virgin Islands.Paragraphs (c) and (d) do not prevent a committee of directors, where authorised by the directors, from appointing a subcommittee and delegating powersexercisable by the committee to the subcommittee.107.The meetings and proceedings of each committee of directors consisting of 2 or more directors shall be governed mutatis mutandis by the provisions ofthese Articles regulating the proceedings of directors so far as the same are not superseded by any provisions in the resolution establishing the committee.108.Without prejudice to the freedom of the directors to establish any other committee, if the shares (or depositary receipts therefore) are listed or quoted onthe Designated Stock Exchange, and if required by the Designated Stock Exchange, the directors shall establish and maintain an audit committee as acommittee of the board of directors, the composition and responsibilities of which shall comply with the rules and regulations of the SEC and theDesignated Stock Exchange. The audit committee shall meet at least once every financial quarter, or more frequently as circumstances dictate.109.The Company shall adopt a formal written audit committee charter and review and assess the adequacy of the formal written charter on an annual basis.The charter shall specify the responsibilities of the Audit Committee which shall include responsibility for, among other things, ensuring its receipt from theoutside auditors of the Company of a formal written statement delineating all relationships between the auditor and the Company, and the AuditCommittee’s responsibility for actively engaging in a dialogue with the auditor with respect to any disclosed relationships or services that may impact theobjectivity and independence of the auditor take appropriate action to oversee the independence of the outside auditor. In addition, the Audit Committee isresponsible for reviewing potential conflict of interest situations and approving all Related Party Transactions.110.Without prejudice to the freedom of the directors to establish any other committees, the Board may establish a Stock Option Committee to administer theCompany’s stock option plans, including authority to make and modify awards under such plans. For so long as the Securities of the Company are listed ortraded on the Designated Stock Exchange, the Stock Option Committee shall have at least two Independent Directors. The Stock Option Committee willadminister the Company’s stock option plans, including the authority to make and modify awards under such plans.111.Without prejudice to the freedom of the directors to establish any other committees, the Board may establish a Nominating Committee to assist the Board inidentifying qualified individuals to become members of the Board.OFFICERS112.The Company may by resolution of directors appoint officers of the Company at such times as shall be considered necessary or expedient. Such officersmay consist of a Chairman of the Board of Directors, a Vice Chairman of the Board of Directors, a President and one or more Vice Presidents, Secretaries andTreasurers and such other officers as may from time to time be deemed desirable. Any number of offices may be held by the same person.113.The officers shall perform such duties as shall be prescribed at the time of their appointment subject to any modification in such duties as may beprescribed thereafter by resolution of directors or resolution of members, but in the absence of any specific allocation of duties it shall be the responsibilityof the Chairman of the Board of Directors to preside at meetings of directors and members, the Vice Chairman to act in the absence of the Chairman, thePresident to manage the day to day affairs of the Company, the Vice Presidents to act in order of seniority in the absence of the President but otherwise toperform such duties as may be delegated to them by the President, the Secretaries to maintain the share register, minute books and records (other thanfinancial records) of the Company and to ensure compliance with all procedural requirements imposed on the Company by applicable law, and the Treasurerto be responsible for the financial affairs of the Company.19114.Subject to the rules of the Designated Stock Exchange, the emoluments of all officers shall be fixed by resolution of directors.115.The officers of the Company shall hold office until their successors are duly elected and qualified, but any officer elected or appointed by the directors maybe removed at any time, with or without cause, by resolution of directors. Any vacancy occurring in any office of the Company may be filled by resolutionof directors.CONFLICT OF INTERESTS116.A director of the Company shall, forthwith after becoming aware of the fact that he is interested in a transaction entered into or to be entered into by theCompany, disclose the interest to all other directors of the Company.117.A director of the Company is not required to comply with Article 112 if;a.the transaction or proposed transaction is between the director and the Company; andb.the transaction or proposed transaction is or is to be entered into in the ordinary course of the company’s business and on usual terms andconditions.118.For the purposes of Article 112 a disclosure to all other directors to the effect that a director is a member, director or officer of another named entity or has afiduciary relationship with respect to the entity or a named individual and is to be regarded as interested in any transaction which may, after the date of theentry or disclosure, be entered into with that entity or individual, is a sufficient disclosure of interest in relation to that transaction.119.A.A director of the Company who is interested in a transaction entered into or to be entered into by the Company may:(i)vote on a matter relating to the transaction;(ii)attend a meeting of directors at which a matter relating to the transaction arises and be included among the directors present at the meeting for thepurposes of a quorum; and(iii)sign a document on behalf of the Company, or do any other thing in his capacity as a director, that relates to the transaction,and, subject to compliance with the Act shall not, by reason of his office be accountable to the Company for any benefit which he derives from suchtransaction and no such transaction shall be liable to be avoided on the grounds of any such interest or benefit.119.B.For so long the Securities of the Company are listed or traded on the Designated Stock Exchange, the Company shall conduct an appropriate review of allmaterial Related Party Transactions on an ongoing basis and shall utilize the Audit Committee for the review and approval of potential conflicts of interestsituations.INDEMNIFICATION120.Subject to the limitations hereinafter provided the Company may indemnify against all expenses, including legal fees, and against all judgments, fines andamounts paid in settlement and reasonably incurred in connection with legal, administrative or investigative proceedings any person who;a.is or was a party or is threatened to be made a party to any threatened, pending or completed proceedings, whether civil, criminal, administrative orinvestigative, by reason of the fact that the person is or was a director, an officer or a liquidator of the Company; orb.is or was, at the request of the Company, serving as a director of, or in any other capacity is or was acting for, another body corporate or apartnership, joint venture, trust or other enterprise.20121.The Company may only indemnify a person if the person acted honestly and in good faith in what he believed to be in the best interests of the Companyand, in the case of criminal proceedings, the person had no reasonable cause to believe that his conduct was unlawful.122.For the purposes of the preceding Article, a director acts in the best interests of the Company if he acts in the best interests of;a.the Company’s holding company; orb.a shareholder or shareholders of the Company; in either case, in the circumstances specified in Article 85.123.The decision of the directors as to whether the person acted honestly and in good faith and with a view to the best interests of the Company and as towhether the person had no reasonable cause to believe that his conduct was unlawful is, in the absence of fraud, sufficient for the purposes of theseArticles, unless a question of law is involved.124.The termination of any proceedings by any judgment, order, settlement, conviction or the entering of a nolle prosequi does not, by itself, create apresumption that the person did not act honestly and in good faith and with a view to the best interests of the Company or that the person had reasonablecause to believe that his conduct was unlawful.Consolidated Statements of Changes in Stockholder’s EquityF5Consolidated Statements of Cash FlowsF6Notes to Consolidated Financial StatementsF7 F22F1REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRMTo the Shareholder and the Sole Director ofLK Technology Ltd.Opinion on the Consolidated Financial StatementsWe have audited the accompanying consolidated balance sheets of LK Technology Ltd. and. subsidiaries (the “Company”) as of December 31, 2017 and 2016, andthe related consolidated statements of operations and comprehensive loss, changes in shareholder’s equity and cash flows for each of the years then ended, andthe related notes (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in allmaterial respects, the consolidated financial position of the Company as of December 31, 2017 and 2016, and the consolidated results of its operations and its cashflows for each of the years then ended, in conformity with accounting principles generally accepted in the United States of America.Basis for OpinionThese consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’sconsolidated financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (UnitedStates) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules andregulations of the Securities and Exchange Commission and the PCAOB.We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonableassurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have,nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internalcontrol over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting.Accordingly, we express no such opinion.An independent member firm of Moore Stephens International Limited – members in principal cities throughout the worldOur audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, andperforming procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in theconsolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well asevaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion.Certified Public AccountantsWe have served as the Company’s auditor since 2018.Hong KongMay 25, 2018F2LK TECHNOLOGY LTD. AND SUBSIDIARIESCONSOLIDATED BALANCE SHEETS(IN U.S. DOLLARS)As of December 31,20172016AssetsCurrent assets:Cash and cash equivalents$72,379$83,843Accounts receivable, net of allowance for doubtful accounts9,729,6251,865,836Other receivables and prepayment2,376,7452,287,934Amounts due from related parties11,760,692Total current assets23,939,4414,237,613Property and equipment, net5,044,8727,771,027Intangible assets, net1,154,1971,682,445Goodwill7,239,9367,239,936Amount due from a related party204,412183,811TOTAL ASSETS37,582,85821,114,832LiabilitiesCurrent liabilities:Accounts payable8,784,5186,446,584Accrued liabilities and other payables12,962,91211,329,613Amounts due to related parties3,563,68316,129,323Total current liabilities25,311,11333,905,520Total liabilities25,311,11333,905,520Commitments and contingenciesShareholder’s Equity (Deficit)Share capitalCommon stock, $1 par value per share; 50,000 shares authorized as of December 31, 2017 and 2016, 1 share issued andoutstanding as of December 31, 2017 and 201611Additional paidin capital41,819,68510,037,469Accumulated deficit(29,936,158)(23,125,704)Accumulated other comprehensive income (loss)388,217297,546Total Shareholder’s Equity (Deficit)12,271,745(12,790,688)TOTAL LIABILITIES AND SHAREHOLDER’S EQUITY (DEFICIT)$37,582,858$21,114,832F3LK TECHNOLOGY LTD. AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS(IN U.S. DOLLARS)For the years endedDecember 31,20172016Revenues$26,082,417$5,233,145Less: Cost of revenues5,547,7796,315,504Less: Operating expenses:Selling and marketing23,908,7336,209,804General and administrative2,451,2492,108,854Research and development1,046,1982,882,202Total operating expenses27,406,18011,200,860Loss from operations(6,871,542)(12,283,219)Other income (expense):Interest expense(26,611)(4,412)Foreign exchange gains (losses)350,679(298,257)Loss from investment(428,571)Other income (expense), net(262,980)(34,572)Total other income (expense), net61,088(765,812)Loss before income taxes(6,810,454)(13,049,031)Income taxesNet loss$(6,810,454)$(13,049,031)Other comprehensive income:Foreign currency translation adjustment90,671387,375Total comprehensive loss$(6,719,783)$(12,661,656)F4LK TECHNOLOGY LTD. AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDER’S EQUITY(IN U.S. DOLLARS)Accumulated otherTotalOrdinary sharesAdditionalpaidin AccumulatedcomprehensiveIncomeShareholder’sEquity SharesAmountcapitaldeficits(loss)(Deficit)Balance as of December 31, 20151$ 1$8,250,505$(10,076,673)$(89,829)$(1,915,996)Capital contribution from C Media1,786,9641,786,964Net loss(13,049,031)(13,049,031)Foreign currency translation adjustment387,375387,375Balance as of December 31, 20161110,037,469(23,125,704)297,546(12,790,688)Capital contribution from C Media31,782,21631,782,216Net loss(6,810,454)(6,810,454)Foreign currency translation adjustment90,67190,671Balance as of December 31, 20171$1$41,819,685$(29,936,158)$388,217$12,271,745F5LK TECHNOLOGY LTD. AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF CASH FLOWS(IN U.S. DOLLARS)For the years endedDecember 31,20172016CASH FLOWS FROM OPERATING ACTIVITIES:Net loss$(6,810,454)$(13,049,031)Depreciation and amortization3,316,1813,245,161Loss on disposal of property and equipment115,19373,022Increase in allowance for doubtful accounts445,39562,591Changes in assets and liabilitiesAccounts receivable(7,933,730)(1,507,296)Other receivables and prepayment(2,202,960)2,873,984Accounts payable2,230,5434,757,457Accrued liabilities and other payables1,866,1377,483,441Net cash (used in) provided by operating activities(8,973,695)3,939,329CASH FLOWS FROM INVESTING ACTIVITIES:Purchase of property and equipment(12,689)(3,554,258)Proceeds from disposal of property and equipment29,942Net cash provided by (used in) investing activities17,253(3,554,258)CASH FLOWS FROM FINANCING ACTIVITIES:Advances from related parties8,938,290(1,197,870)Net cash provided by (used in) financing activities8,938,290(1,197,870)Effect of exchange rate changes6,688(32,746)Net decrease in cash and cash equivalents(11,464)(845,545)Cash and cash equivalents, at beginning of year83,843929,388Cash and cash equivalents, at end of year$72,379$83,843Supplemental cash flow disclosures:Interest paid26,6114,412Income taxes paidF6LK TECHNOLOGY LTD. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS(IN U.S. DOLLARS)NOTE 1 – DESCRIPTION OF BUSINESS AND ORGANIZATIONStar Chariot Limited was incorporated in the British Virgin Islands (“BVI”) as an exempted limited liability company on March 3, 2011. On January 18, 2018, it wasrenamed as LK Technology Ltd. (“LK Technology ” or the “Company”).LK Technology, its subsidiaries and its variable interest entities (“VIEs”) (collectively the “Group”) operate mobile application service for longdistance travel in thePeople’s Republic of China (the “PRC”). The core mobile application product, Luokuang, is made as an LBSsocial contents and services distribution platform. Itoffers functions based on various travel scenarios, e.g. information, entertainment, travel, ecommerce, O2O, advertising, etc.As of December 31, 2017, details of the Company’s subsidiaries and VIEs are as follows:NameDate ofincorporationPlace ofincorporationPercentage oflegal ownershipSubsidiaries:MMB LimitedApr 11, 2013Hong Kong100%Mobile Media (China) LimitedNov 6, 2007Hong Kong100%Zhong Chuan Tian Xia Information and Technology (Beijing) LimitedFeb 1, 2013PRC100%Zhong Chuan Tian Xia Information and Technology (Shenzhen) LimitedDec 23, 2010PRC100%VIEs:Beijing Zhong Chuan Shi Xun Technology Limited (“Zhong Chuan Shi Xun”)May 17, 2004PRC100%Jiangsu Zhong Chuan Rui You Information and Technology Limited (“Zhong Chuan Rui You”)May 26, 2011PRC100%Huoerguosi Luokuang Information and Technology Limited (“Huoerguosi Luokuang”)Jul 19, 2017PRC100%Shenzhen Jiu Zhou Shi Dai Digital and Technology Limited (“Jiu Zhou Shi Dai”)Nov 26, 2004PRC100%F7NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIESBasis of presentationThe consolidated financial statements of the Group have been prepared in accordance with accounting principles generally accepted in the United States of America(“US GAAP”).The Group incurred losses from operations of $6,871,542 and $12,283,219 for the years ended December 31, 2017 and 2016, respectively. As of December 31, 2017, theGroup had a shareholder’s equity of $12,271,145. The Group had negative cash flows from operating activities for the year ended December 31, 2017 of $8,973,695.As of December 31, 2017, the Group had cash and cash equivalents of $72,379 and a working capital deficit of $1,371,672. From 2018 and onwards, the Group willfocus on improving operation efficiency and cost reduction, and enhancing marketing functions to attract more users. The Group regularly monitors its current andexpected liquidity requirements to ensure that it maintains sufficient cash balances and accessible credit to meet its liquidity requirements in the short and long term.The parent company continues to provide cash flow to the Group. Based on working capital conditions and forecast for future operations, the Group believes that itwill be able to meet its payment obligations and other commitments for at least the following twelve months.Principles of consolidationThe consolidated financial statements include the financial statements of the Company, its subsidiaries, including the whollyforeign owned enterprises (“WFOEs”),and VIEs for which the Company is the primary beneficiary. All transactions and balances among the Company, its subsidiaries and consolidated VIEs have beeneliminated upon consolidation. The results of subsidiaries and consolidated VIEs acquired or disposed of are recorded in the consolidated statements of operationsfrom the effective date of acquisition or up to the effective date of disposal, as appropriate.A subsidiary is an entity in which (i) the Company directly or indirectly controls more than 50% of the voting power; or (ii) the Company has the power to appoint orremove the majority of the members of the board of directors or to cast a majority of votes at the meeting of the board of directors or to govern the financial andoperating policies of the investee pursuant to a statute or under an agreement among the shareholders or equity holders. A VIE is required to be consolidated by theprimary beneficiary of the entity if the equity holders in the entity do not have the characteristics of a controlling financial interest or do not have sufficient equity atrisk for the entity to finance its activities without additional subordinated financial support from other parties.F8To comply with the PRC legal restrictions on foreign ownership of companies that operate mobile application services, the Group operates in such restricted servicesin the PRC through certain PRC domestic companies, whose equity interests are held by certain management members or founders of the Group. Part of theregistered capital of these PRC domestic companies was funded by certain management members or founders of the Group. The Group has entered into certainexclusive business services agreements with these PRC domestic companies, which entitle it to receive a majority of their residual returns and make it obligatory forthe Group to absorb a majority of the risk of losses from their activities. In addition, the Group has entered into certain agreements with those management membersor founders, including equity interest pledge agreements of the equity interests held by those management members or founders and exclusive option agreements toacquire the equity interests in these companies when permitted by the PRC laws, rules and regulations.Details of the typical VIE structure of the Group’s significant consolidated VIEs, primarily domestic companies associated with the operations such as Zhong ChuanShi Xun, Zhong Chuan Rui You, Huoerguosi Luokuang and Jiu Zhou Shi Dai, are set forth below:(i)Contracts that give the Group effective control of VIEsExclusive option agreementsThe VIE equity holders have granted the WFOEs exclusive call options to purchase their equity interest in the VIEs at an exercise price equal to the higherof (i) the registered capital in the VIEs; and (ii) the minimum price as permitted by applicable PRC laws. Each relevant VIE has further granted the relevantWFOE an exclusive call option to purchase its assets at an exercise price equal to the book value of the assets or the minimum price as permitted byapplicable PRC laws, whichever is higher. The WFOEs may nominate another entity or individual to purchase the equity interest or assets, if applicable,under the call options. Each call option is exercisable subject to the condition that applicable PRC laws, rules and regulations do not prohibit completion ofthe transfer of the equity interest or assets pursuant to the call option. Each WFOE is entitled to all dividends and other distributions declared by the VIE,and the VIE equity holders have agreed to give up their rights to receive any distributions or proceeds from the disposal of their equity interests in the VIEwhich are in excess of the original registered capital that they contributed to the VIE, and to pay any such distributions or premium to the WFOE. Theexclusive call option agreements remain in effect until the equity interest or assets that are the subject of such agreements are transferred to the WFOEs.Equity pledge agreementsPursuant to the relevant equity pledge agreements, the relevant VIE equity holders have pledged all of their interests in the equity of the VIEs as acontinuing first priority security interest in favor of the corresponding WFOEs to secure the performance of obligations by the VIEs and/or the equityholders under the other structure contracts. Each WFOE is entitled to exercise its right to dispose of the VIE equity holders’ pledged interests in the equityof the VIE and has priority in receiving payment by the application of proceeds from the auction or sale of such pledged interests, in the event of anybreach or default under the loan agreement or other structure contracts, if applicable. These equity pledge agreements remain in force for the duration ofthe relevant loan agreement and other structure contracts.F9(ii)Contracts that enable the Group to receive substantially all of the economic benefits from the VIEsExclusive business services agreementsEach relevant VIE has entered into an exclusive business services agreement with the respective WFOE, pursuant to which the relevant WFOE providesexclusive business services to the VIE. In exchange, the VIE pays a service fee to the WFOE which typically amounts to what would be substantially all ofthe VIE’s pretax profit, resulting in a transfer of substantially all of the profits from the VIE to the WFOE.Other arrangementsThe exclusive call option agreements described above also enable the Group to receive substantially all of the economic benefits from the VIEs by typicallyentitling the WFOEs to all dividends and other distributions declared by the VIEs and to any distributions or proceeds from the disposal by the VIE equityholders of their equity interests in the VIEs that are in excess of the original registered capital that they contributed to the VIEs.Based on these contractual agreements, the Group believes that the PRC domestic companies as described above should be considered as VIEs because the equityholders do not have significant equity at risk nor do they have the characteristics of a controlling financial interest. Given that the Group is the primary beneficiaryof these PRC domestic companies, the Group believes that these VIEs should be consolidated based on the structure as described above.Under the contractual arrangements with the consolidated VIEs, the Group has the power to direct activities of the consolidated VIEs and can have assetstransferred out of the consolidated VIEs under its control. Therefore, the Group considers that there is no asset in any of the consolidated VIEs that can be usedonly to settle obligations of the consolidated VIEs, except for registered capital and PRC statutory reserves. As all consolidated VIEs are incorporated as limitedliability companies under the Company Law of the PRC, creditors of the consolidated VIEs do not have recourse to the general credit of the Group for any of theliabilities of the consolidated VIEs.Currently there is no contractual arrangement which requires the Group to provide additional financial support to the consolidated VIEs. However, as the Groupconducts its businesses primarily based on the licenses and approvals held by its consolidated VIEs, the Group has provided and will continue to provide financialsupport to the consolidated VIEs considering the business requirements of the consolidated VIEs, as well as the Group’s own business objectives in the future.F10Use of estimatesThe preparation of financial statements in conformity with US GAAP requires the Group to make estimates and assumptions that affect the reported amounts ofassets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expensesduring the reporting period. The most significant estimates are the allowance for doubtful accounts, the useful lives of property and equipment and intangibleassets, impairment of longlived assets and goodwill. Actual results could differ from those estimates.Fair value measurementsFair value is the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at themeasurement date under current market conditions. When determining the fair value measurements for assets and liabilities required or permitted to be recorded atfair value, the Group considers the principal or most advantageous market in which it would transact and it considers assumptions that market participants woulduse when pricing the asset or liability.Authoritative literature provides a fair value hierarchy which prioritizes the inputs to valuation techniques used to measure fair value into three broad levels. Thelevel in the hierarchy within which the fair value measurement in its entirety falls is based upon the lowest level of input that is significant to the fair valuemeasurement as follows:Level 1Level 1 applies to assets or liabilities for which there are quoted prices in active markets for identical assets or liabilities.Level 2Level 2 applies to assets or liabilities for which there are inputs other than quoted prices included within Level 1 that are observable for the asset or liability such asquoted prices for similar assets or liabilities in active markets; quoted prices for identical assets or liabilities in markets with insufficient volume or infrequenttransactions (less active markets); or modelderived valuations in which significant inputs are observable or can be derived principally from, or corroborated by,observable market data.Level 3Level 3 applies to assets or liabilities for which there are unobservable inputs to the valuation methodology that are significant to the measurement of the fair valueof the assets or liabilities.F11Cash and cash equivalentsCash and cash equivalents primarily consist of cash, money market funds, investments in interest bearing demand deposit accounts, time deposits and highly liquidinvestments with original maturities of three months or less from the date of purchase and are stated at cost which approximates their fair value. The Group has nocash equivalents.Accounts receivable, net of allowanceAccounts receivable are recognized and carried at the original invoiced amount less an allowance for any potential uncollectible amounts. An estimate for doubtfuldebts is made when collection of the full amount is no longer probable. Bad debts are written off as incurred. The Group generally does not require collateral from itscustomers.The Group maintains allowances for doubtful accounts for estimated losses resulting from the failure of customers to make payments on time. The Group reviews theaccounts receivable on a periodic basis and makes specific allowances when there is doubt as to the collectability of individual balances. In evaluating thecollectability of individual receivable balances, the Group considers many factors, including the age of the balance, the customer’s payment history, its currentcreditworthiness and current economic trends.Property and equipment, netProperty and equipment are carried at cost less accumulated depreciation. Depreciation is calculated on a straightline basis over the following estimated usefullives:Wifi equipment– 3 yearsOffice equipment– 3 to 5 yearsVehicles– 5 yearsCosts of repairs and maintenance are expensed as incurred and asset improvements are capitalized. The gain or loss on disposal of property and equipment is thedifference between the net sales proceeds and the carrying amount of the relevant assets and is recognized in the consolidated income statement. When propertyand equipment are retired or otherwise disposed of, the cost and accumulated depreciation are removed from the accounts and any resulting gain or loss is includedin the results of operations for the respective period.Construction in progressAssets under construction are not depreciated until construction is completed and the assets are ready for their intended use.F12Intangible assetsIntangible assets with finite lives are amortized using the straightline method over the estimated economic lives.Intangible assets have weighted average economic lives from the date of purchase as follows:Software– 5 yearsTrademarks– 10 yearsGoodwillThe Group assesses goodwill for impairment in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”)subtopic 35020, Intangibles—Goodwill and Other: Goodwill (“ASC 35020”), which requires that goodwill to be tested for impairment at the reporting unit level atleast annually and more frequently upon the occurrence of certain events, as defined by ASC 35020.We have the option to assess qualitative factors first to determine whether it is necessary to perform the twostep test in accordance with ASC 35020. If we believe,as a result of the qualitative assessment, that it is morelikelythannot that the fair value of the reporting unit is less than its carrying amount, the twostepquantitative impairment test described below is required. Otherwise, no further testing is required. In the qualitative assessment, we consider primary factors such asindustry and market considerations, overall financial performance of the reporting unit, and other specific information related to the operations. In performing thetwostep quantitative impairment test, the first step compares the carrying amount of the reporting unit to the fair value of the reporting unit based on either quotedmarket prices of the ordinary shares or estimated fair value using a combination of the income approach and the market approach. If the fair value of the reportingunit exceeds the carrying value of the reporting unit, goodwill is not impaired and we are not required to perform further testing. If the carrying value of the reportingunit exceeds the fair value of the reporting unit, then we must perform the second step of the impairment test in order to determine the implied fair value of thereporting unit’s goodwill. The fair value of the reporting unit is allocated to its assets and liabilities in a manner similar to a purchase price allocation in order todetermine the implied fair value of the reporting unit goodwill. If the carrying amount of the goodwill is greater than its implied fair value, the excess is recognized asan impairment loss.In 2017, we performed a qualitative assessment for goodwill. Based on the requirements of ASC35020, we evaluated all relevant factors, including but not limited tomacroeconomic conditions, industry and market conditions, financial performance. We weighed all factors in their entirety and concluded that it was not morelikelythannot the fair value was less than the carrying amount of the reporting unit, and further impairment testing on goodwill was unnecessary as of December 31, 2017and 2016.F13Impairment or disposal of longlived assetsLonglived assets other than goodwill are included in impairment evaluations when events and circumstances exist that indicate the carrying value of these assetsmay not be recoverable. In accordance with FASB ASC 360, Property, Plant and Equipment, the Group assesses the recoverability of the carrying value of longlivedassets by first grouping its longlived assets with other assets and liabilities at the lowest level for which identifiable cash flows are largely independent of the cashflows of other assets and liabilities (the asset group) and, secondly, estimating the undiscounted future cash flows that are directly associated with and expected toarise from the use of and eventual disposition of such asset group. If the carrying value of the asset group exceeds the estimated undiscounted cash flows, theGroup recognizes an impairment loss to the extent the carrying value of the longlived asset exceeds its fair value. The Group determines fair value through quotedmarket prices in active markets or, if quotations of market prices are unavailable, through the performance of internal analysis using a discounted cash flowmethodology or obtains external appraisals from independent valuation firms. The undiscounted and discounted cash flow analyses are based on a number ofestimates and assumptions, including the expected period over which the asset will be utilized, projected future operating results of the asset group, discount rateand longterm growth rate.As of December 31, 2017 and 2016, the Group assessed the impairment of its longlived assets and concluded that there was no impairment indication.Business combinationWe account for business combinations using the purchase method of accounting in accordance with FASB ASC topic 805, Business combinations. The purchasemethod accounting requires that the consideration transferred be allocated to the assets, including separately identifiable assets and liabilities we acquired, basedon their estimated fair values. The consideration transferred in an acquisition is measured as the aggregate of the fair values at the date of exchange of the assetsgiven, liabilities incurred, and equity instruments issued as well as the contingent considerations and all contractual contingencies as of the acquisition date. Thecosts directly attributable to the acquisition are expensed as incurred. Identifiable assets, liabilities and contingent liabilities acquired or assumed are measuredseparately at their fair value as of the acquisition date, irrespective of the extent of any noncontrolling interests. The excess of (i) the total of cost of acquisition, fairvalue of the noncontrolling interests and acquisition date fair value of any previously held equity interest in the acquiree over (ii) the fair value of the identifiable netassets of the acquiree, is recorded as goodwill. If the cost of acquisition is less than the fair value of the net assets of the subsidiary acquired, the difference isrecognized directly in earnings.Revenue recognitionThe Group recognizes revenue in accordance with FASB ASC topic 605, Revenue Recognition (“ASC 605”). Revenue is recognized when the following four revenuerecognition criteria are met: (i) persuasive evidence of an arrangement exists, (ii) delivery has occurred or services have been provided, (iii) the selling price is fixed ordeterminable, and (iv) collectability is reasonably assured.F14Displaybased online advertising servicesThe Group provides displaybased online advertising services to customers by integrating text description, image and video, and displaying the advertisements in aprominent position of LuoKuang Application. The Group recognizes revenue in accordance with ASC 605, over the contractual term based on the agreements andconfirmation letters signed by both parties, commencing on the date the customer’s advertisement is displayed on the Group’s platform.Foreign currency translationThe functional and reporting currency of the Company and the Company’s subsidiaries domiciled in BVI and Hong Kong are the United States dollar (“U.S. dollar”).The financial records of the Company’s other subsidiaries and VIEs located in the PRC are maintained in their local currency, the Chinese Renminbi (“RMB”), whichare the functional currency of these entities.Monetary assets and liabilities denominated in currencies other than the functional currency are translated into the functional currency at the rates of exchangeruling at the balance sheet date. Transactions in currencies other than the functional currency during the year are converted into the functional currency at theapplicable rates of exchange prevailing when the transactions occurred. Transaction gains and losses are recognized in the statements of operations.The Company’s entities with a functional currency of RMB translate their operating results and financial position into the U.S. dollar, the Company’s reportingcurrency. Assets and liabilities are translated using the exchange rates in effect on the balance sheet date. Revenues, expenses, gains and losses are translatedusing the average rate for the year. Retained earnings and equity are translated using the historical rate. Translation adjustments are reported as cumulativetranslation adjustments and are shown as a separate component of other comprehensive income.Income taxesDeferred income taxes are recognized for temporary differences between the tax basis of assets and liabilities and their reported amounts in the financial statements,net operating loss carry forwards and credits, by applying enacted statutory tax rates applicable to future years. Deferred tax assets are reduced by a valuationallowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Current income taxesare provided for in accordance with the laws and regulations applicable to the Group as enacted by the relevant tax authorities.The impact of an uncertain income tax position on the income tax return must be recognized at the largest amount that is morelikelythan not to be sustained uponaudit by the relevant tax authorities. An uncertain income tax position will not be recognized if it has less than a 50% likelihood of being sustained. Additionally, theGroup classifies the interest and penalties, if any, as a component of the income tax expense. For years ended December 31, 2017 and 2016, the Group did not haveany material interest or penalties associated with tax positions nor did the Group have any significant unrecognized uncertain tax positions.F15Related partiesParties are considered to be related to the Company if the parties, directly or indirectly, through one or more intermediaries, control, are controlled by, or are undercommon control with the Company. Related parties also include principal owners of the Company, its management, members of the immediate families of principalowners of the Company and its management and other parties with which the Company may deal with if one party controls or can significantly influence themanagement or operating policies of the other to an extent that one of the transacting parties might be prevented from fully pursuing its own separate interests. TheCompany discloses all significant related party transactions.LeasesLeases have been classified as either capital or operating leases. Leases that transfer substantially all the benefits and risks incidental to the ownership of assets areaccounted for as if there was an acquisition of an asset and incurrence of an obligation at the inception of the lease. All other leases are accounted for as operatingleases wherein rental payments are expensed as incurred.When the Group is the lessor, minimum contractual rental from leases are recognized on a straightline basis over the noncancelable term of the lease. With respectto a particular lease, actual amounts billed in accordance with the lease during any given period may be higher or lower than the amount of rental revenue recognizedfor the period. Straightline rental revenue commences when the customer assumes control of the leased premises. Accrued straightline rents receivable representsthe amount by which straightline rental revenue exceeds rents currently billed in accordance with lease agreements. Contingent rental revenue is accrued when thecontingency is removed.Advertising costsAdvertising costs include expenses associated with direct marketing. All advertising costs are expensed as incurred and included in selling and marketing expenses.During the years ended December 31, 2017 and 2016, advertising costs amounted to $23,171,170 and $4,537,653, respectively.Comprehensive lossComprehensive loss includes net loss and foreign currency translation adjustments and is presented net of tax. The tax effect is nil for the two years endedDecember 31, 2017 and 2016 in the consolidated statements of comprehensive loss.Concentration of credit riskFinancial instruments that potentially expose the Group to concentrations of credit risk consist primarily of cash and accounts receivable. The Group places its cashwith financial institutions with highcredit rating and quality in China. For the year ended December 31, 2017, two customers accounted for over 10% of totalrevenue. For the year ended December 31, 2016, four customers accounted for over 10% of total revenue. At December 31, 2017 and 2016, the Group had credit riskexposure of uninured cash in banks of approximately $72,379 and $83,843, respectively.F16NOTE 3 – INCOME TAXAt December 31, 2017 and 2016, the Group had an unused net operating loss carryforwards of approximately $25,123,726 and $20,081,239, respectively, for income taxpurposes, which expires between 2018 to 2022 and between 2017 to 2021, respectively. At December 31, 2017 and 2016, these net operating losses carryforwards mayresult in future income tax benefits of approximately $5,043,944 and $4,008,863, respectively, however, because realization is uncertain at this time, a valuationallowance in the same amount has been established. Deferred income taxes reflect the net effects of temporary differences between the carrying amounts of assetsand liabilities for financial reporting purposes and the amounts used for income tax purposes.Significant components of the Group’s deferred tax liabilities and assets of December 31, 2017 and 2016 are as follows:December 31,December 31,20172016Deferred tax liabilities$$Deferred tax assetNet operating loss carryforward5,043,9444,008,863Valuation allowance(5,043,944)(4,008,863)Net deferred tax assetMovement of valuation allowanceDecember 31,2017December 31,2016At the beginning of the year$4,008,863$2,049,352Current year addition823,9702,159,518Expired(61,411)Exchange difference272,522(200,007)At the end of the year5,043,9444,008,863The Company is not subject to taxation in BVI under the current BVI law. Subsidiaries operating in the PRC are subject to PRC Enterprise Income Tax at the statutoryrate of 25% for the years ended December 31, 2017 and 2016. Subsidiaries operating in Hong Kong are subject to Hong Kong income taxes at a rate of 16.5% for theyears ended December 31, 2017 and 2016.F17A reconciliation of the income tax expense to the amount computed by applying the current statutory tax rate to the loss before income taxes in the consolidatedstatements of comprehensive income is as follows:December 31,December 31,20172016Loss before income taxes$(6,810,454)$(13,049,031)Tax loss at statutory tax rate(1,655,174)(3,386,822)Nondeductible items6,729,2551,712,857Nontaxable items(3,789,956)(674,189)Change in valuation allowance823,9702,159,518Tax benefits(2,108,095)188,636Income tax expensesNOTE 4 – ACCOUNTS RECEIVABLEAt December 31, 2017 and 2016, accounts receivable consisted of the following:December 31,December 31,20172016Accounts receivable$10,406,602$2,098,946Less: allowance for doubtful accounts676,977233,110$9,729,625$1,865,836NOTE 5 – OTHER RECEIVABLESAt December 31, 2017 and 2016, other receivables consisted of the following:December 31,2017December 31,2016Advances to suppliers$339,701$181,472VAT recoverable (1)3,033,0651,662,805Other5,048,189485,152$2,376,745$2,287,934(1)The balance of advanced VAT represents input VAT available for deducting the amount of VAT paid in the future. During the years ended December 31, 2017and 2016, the Group purchased a large amount of WiFi equipment for deployments, which generated related input VAT approved by tax authority.F18NOTE 6 – AMOUNTS DUE FROM RELATEDPARTIESAt December 31, 2017 and 2016, amounts due from related parties consisted of the following:Name of related partyDecember 31,2017December 31,2016C Media Limited (1)$11,760,692$Ya Tuo Ji International Consultancy (Beijing) Limited (2)204,412183,811(1)C Media Limited is the parent company of LK Technology. The Group expects the amounts due from the related party will be returned to the Group within oneyear.(2)Ya Tuo Ji is a company controlled by the spouse of a major shareholder of C Media Limited. The loan is unsecured, interestfree and repayable on January 5,2019.NOTE 7 – PROPERTY AND EQUIPMENTAt December 31, 2017 and 2016, property and equipment consisted of the following:December 31,December 31,Useful life20172016WiFi equipment3 Years$8,711,424$8,367,678Vehicles5 Years43,246Office and other equipment3 – 5 Years170,242416,434Constructioninprogress2,166,4522,652,28811,048,11811,479,646Less: accumulated depreciation(6,003,246)(3,708,619)$5,044,872$7,771,027For the years ended December 31, 2017 and 2016, depreciation expense amounted to $2,628,884 and $2,474,434, respectively, of which $2,423,655 and $2,194,582,respectively, was included in cost of revenue, $117,648 and $121,740, respectively, was included in selling and marketing expenses and the remainder was included ingeneral and administrative expense.Included in constructioninprogress are WiFI equipment under construction.F19NOTE 8 – GOODWILLIn September of 2014, Zhong Chuan Shi Xun acquired a 100% interest in Zhong Chuan Rui You for a consideration of $7,391,894 (RMB48,000,000). Zhong Chuan RuiYou is primarily engaged in on train WiFi business, deploying WiFi equipment on trains and providing passengers with entertainment and information services ontrains. The book value of the identifiable net assets of Zhong Chuan Rui You was $151,958 (RMB963,000) and a goodwill of $7,239,936 was recorded.NOTE 9 – ACCRUED LIABILITIES AND OTHER PAYABLESAt December 31, 2017 and 2016, accrued liabilities and other payables consisted of the following:December 31,December 31,20172016Deferred revenue$2,326,406$302,735Accrued payroll143,998316,458Other taxes payable3,544,469461,699Other payable852,384686,526Other loans6,095,6559,562,915$12,962,912$11,329,613Deferred revenue represents prepayments from customers for advertising service and is recognized as revenue when the advertising services are rendered.Other loans of $939,555 and $57,416, respectively, as of December 31, 2017 and 2016, are unsecured, bear daily interest at 0.04% and are repayable on demand.NOTE 10 – AMOUNTS DUE TO RELATED PARTIESAt December 31, 2017 and 2016, amounts due to related parties consisted of the following:December 31,December 31,Name of related party20172016Mr. Song Xuesong (“Mr. Song”) (1)$2,921,639$10,669,325C Media Limited (2)$$4,855,236Thumb Beijing Branch (3)$612,103$576,560Thumb Shenzhen Branch (3)$29,941$28,202(1) The Group’s CEO(2) C Media Limited, the parent company.(3) Thumb Beijing and Shenzhen Branch are controlled by the spouse of Mr. Song.Amounts due to related parties are shortterm in nature, noninterest bearing, unsecured and payable on demand.F20NOTE 11 – RETIREMENT AND WELFARE BENEFITSThe Group’s fulltime employees are entitled to staff welfare benefits including medical care, casualty, housing benefits, education benefits, unemployment insuranceand pension benefits through a PRC governmentmandated multiemployer defined contribution plan. The Group is required to accrue the employerportion forthese benefits based on certain percentages of the employees’ salaries. The total provision for such employee benefits of $170,227 and $353,033 during the yearsended December 31, 2017 and 2016, respectively, of which $23,392 and $30,455, respectively, was charged to cost of revenue, $48,957 and $97,408, respectively wascharged to selling and marketing expenses, $49,717 and $86,934, respectively, was charged to general and administrative expenses and $48,161 and $138,236,respectively was charged to research and development expenses. The Group is required to make contributions to the plan out of the amounts accrued for all staffwelfare benefits except for education benefits. The PRC government is responsible for the staff welfare benefits including medical care, casualty, housing benefits,unemployment insurance and pension benefits to be paid to these employees.NOTE 12 – STATUTORY RESERVESAs stipulated by the relevant law and regulations in the PRC, the Group’s subsidiaries and VIEs in the PRC are required to maintain a nondistributable statutorysurplus reserve. Appropriations to the statutory surplus reserve are required to be made at not less than 10% of profit after taxes as reported in the subsidiaries’statutory financial statements prepared under the PRC GAAP. Once appropriated, these amounts are not available for future distribution to owners or shareholders.Once the general reserve is accumulated to 50% of the subsidiaries’ registered capital, the subsidiaries can choose not to provide more reserves. The statutoryreserve may be applied against prior year losses, if any, and may be used for general business expansion and production and increase in registered capital of thesubsidiaries. The Group allocated $Nil to statutory reserves during the years ended December 31, 2017 and 2016, respectively. The statutory reserves cannot betransferred to the Company in the form of loans or advances and are not distributable as cash dividends except in the event of liquidation.NOTE 13 – COMMITMENTS AND CONTINGENCIESOperating leasesWe have entered into operating lease agreements primarily for our office spaces in China. These leases expire through 2018 and are renewable upon negotiation.Future minimum rental payment required under the Office Lease is as follows:Year ending December 31:Amount2018$122,138F21Contingencies(a) Litigation with Shanghai Fusheng Weier Intelligent Control Technology Co., Ltd.On January 22, 2016, Zhong Chuan Rui You and Shanghai Fusheng Weier Intelligent Control Technology Co., Ltd. (“Fusheng Weier”) signed a contract forequipment of $1,652,842 (RMB10,800,000). Since Zhong Chuan Rui You did not make the payments of $1,126,381 (RMB7,360,000) on the due dates, Fusheng Weierfiled a lawsuit against Zhong Chuan Rui You in Shanghai Xuhui District People’s Court on October 8, 2016. On March 9, 2017, Xuhui District People’s Court issuedthe verdict requiring Zhong Chuan Rui You to pay the overdue debts. In August 2017, C Media Limited made the payment of $512,075 (RMB3,346,000). Theremaining balance has been accrued in accounts payable. The payment schedule for the remaining balance is being negotiated by the two parties. On February 5,2018, a hearing was held adding Zhong Chuan Shi Xun as a defendant. The Group plans to settle the remaining balance within one year.(b) Lawsuit with Gansu Jinlun Culture Media Co., Ltd.On August 22, 2014, Zhong Chuan Rui You and Gansu Jinlun Culture Media Co., Ltd. (“Gansu Jinlun”) signed a “Lanzhou Railway Bureau Airconditioned Train WiFi Network System Advertising Operation Rights Agreement” for advertising on 72 trains of $1,467,880 (RMB9,604,633). Due to the dispute on the projectimplementation, Zhong Chuan Rui You did not pay the advertising fee. On August 23, 2017, Gansu Jinlun filed a lawsuit with Gansu Intermediate People’s Court. OnDecember 19, 2017, Gansu Intermediate People’s Court issued a verdict, ruling that Zhong Chuan Rui You settle the overdue advertising fee. Since only 18 out of 72trains have been installed with Wifi network system, Zhong Chuan Rui You disputed and appealed to the verdict. The next court trial date has not yet beendetermined.C Media and Gansu Jinlun are negotiating a potential settlement to resume the contract. According to the legal counsel, it is probable that the settlement will amountto approximately $459,000 (RMB3,000,000); therefore, this amount has been accrued in accounts payable.(c) Litigation with Shenzhen Hua Xun Fang Zhou Technology Co., Ltd.On June 16, 2015, Zhong Chuan Rui You signed a cooperation agreement with Shenzhen Hua Xun Fang Zhou Technology Co., Ltd. (“Shenzhen Hua Xun”) andXuesong Song, a major shareholder of C Media Limited. Pursuant to this agreement, Zhong Chuan Rui You procures equipment from Shenzhen Hua Xun. XuesongSong acts as a joint liability guarantor for the entire debts of Zhong Chuan Rui You under this agreement. As Zhong Chuan Rui You did not make the payments onthe due dates, Shenzhen Hua Xun filed a lawsuit with Shenzhen Baoan District People’s Court on May 31, 2016. On November 1, 2016, Zhong Chuan Rui You,Xuesong Song and Shenzhen Hua Xun reached a settlement in Shenzhen Baoan District People’s Court to settle $1,735,389 (RMB11,355,000) in four instalments. OnDecember 30, 2017, the debt was assigned to C Media Limited.NOTE 14 – SUBSEQUENT EVENTThe Group has evaluated all events or transactions that occurred after December 31, 2017 through May 25, 2018, which is the date that the financial statements wereavailable to be issued.F22EX1.1 2 f20f2017ex11_luokung.htm AMENDED AND RESTATED MEMORANDUM OF ASSOCIATION AND ARTICLES OF ASSOCIATION OF LUOKUNGTECHNOLOGY CORP., DATED AUGUST 20, 2018, AND AS CURRENTLY IN EFFECTExhibit 1.1BC NO: 1553620British Virgin IslandsThe BVI Business Companies Act, 2004(No. 16 of 2004)Memorandum of AssociationandArticles of AssociationofLuokung Technology Corp.Incorporated the 24th day of October, 2009Amended and Restated the 11th Day of December 2009Amended and Restated the 17th Day of December 2009Amended and Restated the 25th Day of March 2010Amended and Restated the 21st day of May 2018Amended and restated the 17 August 2018Amended and restated the 21 August 2018Portcullis (BVI) LimitedPortcullis Chambers4th Floor Ellen Skelton Building3076 Sir Francis Drake HighwayRoad Town, TortolaBritish Virgin IslandsTERRITORY OF THE BRITISH VIRGIN ISLANDSTHE BVI BUSINESS COMPANIES ACT, 2004(No. 16 of 2004)MEMORANDUM OF ASSOCIATIONOFLuokung Technology Corp.NAME1.The name of the Company is Luokung Technology Corp.TYPE OF COMPANY2.The Company is a company limited by shares.REGISTERED OFFICE3.The first Registered Office of the Company is the offices of Portcullis TrustNet (BVI) Limited, Portcullis TrustNet Chambers, P.O. Box 3444, Road Town,Tortola, British Virgin Islands, the office of the registered agent.3.1The current Registered Office of the Company is Portcullis Chambers, 4th Floor Ellen Skelton Building, 3076 SirFrancis Drake Highway, Road Town,Tortola, British Virgin Islands VG1110.REGISTERED AGENT4.The first Registered Agent of the Company is Portcullis TrustNet (BVI) Limited of Portcullis TrustNet Chambers, P.O. Box 3444, Road Town, Tortola,British Virgin Islands.4.1The current Registered Agent of the Company is Portcullis (BVI) Ltd of Portcullis Chambers, 4th Floor Ellen Skelton Building, 3076 Sir Francis DrakeHighway, Road Town, Tortola, British Virgin Islands VG1110.AUTHORISED NUMBER OF SHARES5.The Company is authorised to issue a maximum of 251,000,000 shares.CLASSES, NUMBER AND PAR VALUE OF SHARES6.As at the date of adoption of this memorandum, the Company is authorised to issue (a) 250,000,000 ordinary shares without par value (“OrdinaryShares”); and (b) 1,000,000 preferred shares without par value (“Preferred Shares”).FRACTIONAL SHARES7.The Company may issue fractions of a share and a fractional share shall have the same corresponding fractional liabilities, limitations, preferences,privileges, qualifications, restrictions, rights and other attributes of a whole share of the same class or series of shares.RIGHTS, PRIVILEGES, RESTRICTIONS AND CONDITIONS ATTACHING TO SHARES8.(1)Subject to the memorandum and articles of association (and, for greater clarity, without prejudice to any special rights conferred thereby on theholders of any other shares), an Ordinary Share of the Company confers on the holder;(a)the right to one vote at a meeting of the members of the Company or on any Resolution of Members;(b)the right to an equal share in any Distribution paid by the Company; and(c)the right to an equal share in the distribution of the surplus assets of the Company on a winding up.(2)Subject to the memorandum and articles of association (and, for greater clarity, without prejudice to any special rights conferred thereby on theholders of any other shares), a Preferred Share of the Company confers on the holder;(a)the right to 399 votes at a meeting of the members of the Company or on any Resolution of Members;(b)the right to an equal share in any Distribution paid by the Company;(c)the right to an equal share in the distribution of the surplus assets of the Company on its liquidation.(d)be freely transferable, in whole or in part, by Mr. Xuesong Song to any third party through one or more Private Transactions, subject toApplicable Law; and(e)be freely transferable, in whole or in part, by Mr. Xuesong Song to any third party through one or more Public Transactions, subject to ApplicableLaw and Automatic Conversion of such Preferred Share(s) into Ordinary Share(s).(3)The directors may at their discretion by resolution of directors redeem, purchase or otherwise acquire all or any of the shares in the Companysubject to the Articles..VARIATION OF CLASS RIGHTS9.If at any time the issued shares are divided into different classes or series of shares, the rights attached to any class or series (unless otherwise providedby the terms of issue of the shares of that class or series) may, whether or not the Company is being wound up, be varied with the consent in writing of theholders of not less than threefourths of the issued shares of that class or series and of the holders of not less than threefourths of the issued shares ofany other class or series of shares which may be affected by such variation.RIGHTS NOT VARIED BY THE ISSUE OF SHARES PARI PASSU10.The rights conferred upon the holders of the shares of any class issued with preferred or other rights shall not, unless otherwise expressly provided by theterms of issue of the shares of that class, be deemed to be varied by the creation or issue of further shares ranking pari passu therewith.CAPACITY AND POWERS11.Subject to the Act, any other British Virgin Islands legislation and paragraph 12 below the Company has, irrespective of corporate benefit:(a)full capacity to carry on or undertake any business or activity, do any act or enter into any transaction;(b)for the purposes of paragraph (a), full rights, powers and privileges; and(c)full powers to issue shares with preemptive rights, subject to the Articles.2LIMITATIONS ON THE COMPANY’S BUSINESS12.For the purposes of section 9(4) of the Act the Company may not;(a)carry on banking or trust business, unless it is licensed to do so under the Banks and Trust Companies Act, 1990;(b)carry on business as an insurance or reinsurance company, insurance agent or insurance broker, unless it is licensed under the Insurance Act1994;(c)carry on business of company management, unless it is licensed under the Company Management Act, 1990;(d)carry on the business of providing the registered office or the registered agent for companies incorporated in the British Virgin Islands;(e)carry on the business as a mutual fund, manager of mutual funds or administrator of mutual funds unless it is recognized or licenced as the casemay be under the Mutual Funds Act 1996; or(f)carry on any other business that gives rise to a licencing requirement under any law for the time being in force in the British Virgin Islands unlessit is licenced, regulated, recognised or otherwise approved pursuant to such law.REGISTERED SHARES AND PROHIBITION ON ISSUE OF BEARER SHARES13.Shares in the Company may only be issued as registered shares. The issue of shares to bearer is prohibited.PROHIBITION ON EXCHANGE AND CONVERSION OF REGISTERED SHARES TO BEARER SHARES14.The exchange or conversion of registered shares to bearer shares is prohibited.TRANSFER OF REGISTERED SHARES15.Subject to the provisions of the Articles the Company may upon receipt of an instrument of transfer enter the name of the transferee in the register ofmembers subject to the prior or simultaneous approval of the Company as evidenced by a resolution of directors or by a resolution of members. Subject toany resolution of the members to the contrary, the directors may resolve by resolution of directors to refuse or delay the registration of the transfer forreasons that shall be specified in the resolution of directors.AMENDMENT OF MEMORANDUM AND ARTICLES OF ASSOCIATION16.1The Company may amend its Memorandum or Articles by a resolution of members or by a resolution of directors provided that the directors shall not havethe power to amend the Memorandum or Articles;(a)to restrict the rights or powers of the members to amend the Memorandum or Articles;(b)to change the percentage of members required to pass a resolution to amend the Memorandum or Articles;(c)in circumstances where the Memorandum or Articles cannot be amended by the members; or(d)to Clauses 8, 9, 10 or this Clause 12.16.2No amendment may be made to Regulation 76 of the Articles unless approved by an affirmative vote of the holders of 66 2/3 percent or more of theoutstanding votes of the shares entitled to vote thereon.3DEFINITIONS17.The meanings of words in this Memorandum are as defined in the Articles.We, Portcullis TrustNet (BVI) Limited of Portcullis TrustNet Chambers, P.O. Box 3444, Road Town, Tortola, British Virgin Islands for the purpose ofincorporating a BVI Business Company under the laws of the British Virgin Islands hereby sign this Memorandum of Association the 27th day of October,2009.Incorporator/s/ Nicole WheatleyPortcullis TrustNet (BVI) LimitedPortcullis TrustNet ChambersP.O. Box 3444Road Town, TortolaBritish Virgin Islands(Sgd. Nicole Wheatley)4TERRITORY OF THE BRITISH VIRGIN ISLANDSTHE BVI BUSINESS COMPANIES ACT, 2004(No. 16 of 2004)ARTICLES OF ASSOCIATIONOFLuokung Technology Corp.PRELIMINARY1.In these Articles, if not inconsistent with the subject or context, the words and expressions standing in the first column of the following table shall bear themeanings set opposite them respectively in the second column thereof.WordsMeaningApplicable Lawall Laws, including those of a jurisdiction in or outside of the United States, applicable to the Private orPublic Transactions.Actthe BVI Business Companies Act, 2004 (No 16 of 2004.) including any modification, extension, reenactment or renewal thereof and any regulations made thereunder.Articlesthese Articles of Association as originally framed or as from time to time amended.Automatic Conversioneach Preferred Share shall be automatically converted at any time after issue and without the payment ofany additional sum into an equal number of fully paid Ordinary Shares upon the conclusion of anytransfer by Mr. Xuesong Song to any third party through one or more Public Transactions.Designated Stock Exchangeeither the Nasdaq National Stock Market, Inc. or such other exchange or quotation bureau on which, theCompany’s Securities are listed or traded; provided that until the Securities are listed on any such“Exchange” the rules of any such Designated Stock Exchange shall be inapplicable to these Articles.directora director of the Company.distributionin relation to a distribution by a company to a member, means(i)the direct or indirect transfer of an asset, other than the Company’s own shares, to or forthe benefit of the member or(ii)the incurring of a debt to or for the benefit of a member,in relation to shares held by a member, and whether by means of a purchase of an asset, the purchase,redemption or other acquisition of shares, a transfer of indebtedness or otherwise, and includes adividend.Independent Directora person who meets the then current requirements for “independence” of the applicable rules andregulations of the U.S. Securities and Exchange Commission and the Designated Stock Exchange.5member or shareholderin relation to the Company, means a person whose name is entered in the register of members as theholder of one or more shares, or fractional shares, in the Company.Memorandumthe Memorandum of Association of the Company as originally framed or as from time to time amended.Mr. Xuesong Songthe founder, a director and Chairman of LK Technology Ltd.Ordinary Sharesissued or unissued ordinary shares of no par value of the Company having the rights, preferences andprivileges set out in the MemorandumPersonAn individual, a corporation, a trust, trustee, the estate of a deceased individual, a partnership or anunincorporated association of persons.Preferred Sharesissued or unissued preferred shares of no par value of the Company having the rights, preferences andprivileges set out in the MemorandumPrivate Transactionstransactions that are not considered as a Public Transaction.Public Transactionstransactions through any national securities exchanges and/or through the automated quotation systemincluding but not limited to NASDAQ, NYSE (including NYSE American) or OTC Markets, or anytransaction executed by the broker or with a market maker.Related Party(a) any director, officer and employee of the Company; (b) any family member of such director, officer andemployee; and (c) any entity (e.g. a corporation, partnership, or trust) controlled by or set up for thebenefit of a director, officer or employee, or a family member of such director, officer or employee.Relevant SystemA facility for the electronic transfer of uncertificated securities administered by The Depository TrustCompany or such other Person regulated by the SEC.resolution of directors(a)A resolution approved at a duly convened and constituted meeting of directors of the Companyor of a committee of directors of the Company by the affirmative vote of a simple majority of thedirectors present at the meeting who voted and did not abstain; or(b)a resolution consented to in writing by a simple majority of the directors or of all members of thecommittee, as the case may be;except that where a director is given more than one vote, he shall be counted by the number ofvotes he casts for the purpose of establishing a majority.resolution of membersSubject to the provisions of the Memorandum and Articles means:(a)A resolution approved at a duly convened and constituted meeting of the members of theCompany by the affirmative vote of(i)a majority of in excess of 50% of the votes of the shares entitled to vote and voting onthe resolution, or(ii)a majority of in excess of 50% of the votes of each class or series of shares entitled tovote as a class or series and voting on the resolution and a majority of in excess of 50%of the votes of the remaining shares entitled to vote and voting on the resolution; or6(b)a resolution consented to in writing by(i)an absolute majority of the votes of shares entitled to vote thereon, or(ii)an absolute majority of the votes of each class or series of shares entitled to votethereon as a class or series and of an absolute majority of the votes of the remainingshares entitled to vote thereon.SealAny Seal which has been duly adopted as the common seal of the Company.SECThe United States Securities and Exchange Commission.Securitiesshares and debt obligations of every kind, and options, warrants and rights to acquire shares, or debtobligations.SharesOrdinary Shares and/or Preferred Shares, as the case may be.solvency testa company satisfies the solvency test if;(i)the value of the company’s assets exceeds its liabilities, and(ii)the company is able to pay its debts as they fall due.treasury sharesshares in the Company that were previously issued but were repurchased, redeemed or otherwiseacquired by the Company and not cancelled.2.“Written” or any term of like import includes words typewritten, printed, painted, engraved, lithographed, photographed or represented or reproduced byany mode of reproducing words in a visible form, including telex, facsimile, telegram, cable or other form of writing produced by electronic communication.3.Save as aforesaid any words or expressions defined in the Act shall bear the same meaning in these Articles.4.Whenever the singular or plural number, or the masculine, feminine or neuter gender is used in these Articles, it shall equally, where the context admits,include the others.5.A reference in these Articles to voting in relation to shares shall be construed as a reference to voting by members holding the shares except that it is thevotes allocated to the shares that shall be counted and not the number of members who actually voted and a reference to shares being present at a meetingshall be given a corresponding construction.6.A reference to money in these Articles is, unless otherwise stated, a reference to the currency in which shares in the Company shall be issued according tothe provisions of the Memorandum.7REGISTERED SHARES7.Every member holding registered shares in the Company shall be entitled to a certificate signed by a director or officer of the Company or such otherperson who may be authorised from time to time by resolution of directors or under the Seal, with or without the signature of any director of the Company,specifying the share or shares held by him and the signature of the director or officer or person so authorised and the Seal may be facsimiles.8.Any member receiving a share certificate for registered shares shall indemnify and hold the Company and its directors and officers harmless from any lossor liability which it or they may incur by reason of any wrongful or fraudulent use or representation made by any person by virtue of the possessionthereof. If a share certificate for registered shares is worn out or lost it may be renewed on production of the worn out certificate or on satisfactory proof ofits loss together with such indemnity as may be required by a resolution of directors.9.If several persons are registered as joint holders of any shares, any one of such persons may give an effectual receipt for any distribution payable inrespect of such shares.10.Nothing in these Articles shall require title to any shares or other Securities to be evidenced by a certificate if the Act and the rules of the Designated StockExchange permit otherwise.SHARES AND ISSUED SHARES11.Subject to the provisions of these Articles and, if applicable, the rules of the Designated Stock Exchange, and any resolution of members, the directors ofthe Company may, without limiting or affecting any rights previously conferred on the holders of any existing shares or class or series of shares, offer, allot,grant options over or otherwise dispose of shares to such persons, at such times and upon such terms and conditions as the Company may by resolutionof directors determine. The directors shall not issue more shares than the maximum number provided for in the Memorandum.12.The Company may issue fully paid, partly paid or nil paid shares as well as bonus shares. A partly paid or nil paid share or a share issued for a promissorynote or other written obligation for payment of a debt may be issued subject to forfeiture in the manner prescribed in these Articles.13.Shares in the Company may be issued for consideration in any form, including money, a promissory note or other obligation to contribute money orproperty, real property, personal property (including goodwill and knowhow) services rendered or a contract for future services and the amount of suchconsideration shall be determined by resolution of directors, except that in the case of shares with par value, the amount shall not be less than the parvalue, and in the absence of fraud the decision of the directors as to the value of the consideration received by the Company in respect of the issue isconclusive unless a question of law is involved.14.Before issuing shares for a consideration other than money, the directors shall pass a resolution stating;(a)the amount to be credited for the issue of the shares;(b)their determination of the reasonable present cash value of the nonmoney consideration for the issue; and(c)that, in their opinion, the present cash value of the nonmoney consideration for the issue is not less than the amount to be credited for the issueof the shares.15.A share issued by the Company upon conversion of, or in exchange for, another share or a debt obligation or other security in the Company, shall betreated for all purposes as having been issued for money equal to the consideration received or deemed to have been received by the Company in respectof the other share, debt obligation or security.16.Treasury shares may be disposed of by the Company on such terms and conditions (not otherwise inconsistent with these Articles) as the Company mayby resolution of directors determine.17.Subject to these Articles, the Company may purchase, redeem or otherwise acquire and hold its own shares save that the Company may not purchase,redeem or otherwise acquire its own shares without the consent of the member whose shares are to be purchased, redeemed or otherwise acquired unlessthe Company is permitted by the Act or any other provision in the Memorandum or Articles to purchase, redeem or otherwise acquire the shares withouttheir consent.818.No purchase, redemption or other acquisition of shares shall be made unless the directors determine by resolution of the directors that immediately after thepurchase, redemption or other acquisition the value of the Company’s assets will exceed its liabilities and the Company will be able to pay its debts as theyfall due.19.Sections 60 (Process for acquisition of own shares), 61 (Offer to one or more shareholders) and 62 (Shares redeemed otherwise than at the option ofcompany) of the Act shall not apply to the Company.20.A determination by the directors under Article 18 is not required;(a)the Company redeems a share or shares pursuant to a right of a member to have his shares redeemed or to have his shares exchanged for moneyor other property of the Company; or(b)by virtue of the provisions of Section 179 of the Act.21.Shares that the Company purchases, redeems or otherwise acquires pursuant to Article 17 may be cancelled or held as treasury shares except to the extentthat such shares are in excess of 80 percent of the issued shares of the Company in which case they shall be cancelled but they shall be available forreissue.22.Shares in the Company shall only be held as treasury shares where the directors of the Company resolve as such and the number of shares acquired, whenaggregated with shares of the same class already held by the Company as treasury shares, does not exceed 50% of the shares of that class previouslyissued by the Company, excluding shares that have been cancelled. All rights and obligations attaching to a treasury share are suspended and shall not beexercised by or against the Company while it holds the share as a treasury share. Treasury shares may be reissued by the Company as new shares.23.The Company shall keep a register of members containing;(a)the names and addresses of the persons who hold registered shares in the Company;(b)the number of each class and series of registered shares held by each member;(c)the date on which the name of each member was entered in the register of members;(d)the date on which any person ceased to be a member; and(e)such other information as may be prescribed pursuant to the Act.24.The register of members may be in any such form as the directors may approve but if it is in magnetic, electronic or other data storage form, the companymust be able to produce legible evidence of its contents.25.The original or a copy of the register of members shall be kept at the registered office of the Company or at the office of the registered agent of theCompany.26.A share is deemed to be issued when the name of the member is entered in the register of members.27.Subject to the Act and the rules of the Designated Stock Exchange, the board of directors without further consultation with the holders of any shares orSecurities may resolve that any class or series of shares or other Securities from time to time in issue or to be issued (including shares in issue at the date ofthe adoption of these Articles) may be issued, held, registered and converted to uncertificated form.28.Conversion of shares held in certificated form into shares held in uncertificated form, and vice versa, may be made in such manner as the board of directors,in its absolute discretion, may think fit. The Company or any duly authorised transfer agent (a “Transfer Agent”) shall enter on the register of membershow many shares are held by each member in uncertificated form and in certificated form and shall maintain the register of members. Notwithstanding anyprovision of these Articles, a class or series of shares shall not be treated as two classes by virtue only of that class or series comprising both certificatedshares and uncertificated Shares or as a result of any provision of these Articles which apply only in respect of certificated or uncertificated shares.9MORTGAGES AND CHARGES OF REGISTERED SHARES29.Members may mortgage or charge their registered shares in the Company with such mortgage or charge being evidenced in writing and signed by, or withthe authority of the registered holder of a registered share to which the mortgage or charge relates. The Company shall give effect to the terms of any validmortgage or charge except insofar as it may conflict with any requirements herein contained for consent to the transfer of shares.30.In the case of the mortgage or charge of registered shares there may be entered in the share register of the Company at the request of the registered holderof such shares(a)a statement that the shares are mortgaged or charged;(b)the name of the mortgagee or chargee; and(c)the date on which the aforesaid particulars are entered in the share register.31.Where particulars of a mortgage or charge are entered in the register of members, such particulars shall be cancelled(a)with the written consent of the named mortgagee or chargee or anyone authorized to act on his behalf; or(b)upon evidence satisfactory to the directors of the discharge of the liability secured by the mortgage or charge and the issue of such indemnities asthe directors shall consider necessary or desirable.32.Whilst particulars of a mortgage or charge over registered shares are entered in the register of members pursuant to the preceding articles no transfer ofany share comprised therein shall be effected without the written consent of the named mortgagee or chargee or anyone authorized to act on his behalf.FORFEITURE33.When shares not fully paid on issue or issued for a promissory note or other written obligation for payment of a debt have been issued subject toforfeiture, the following provisions shall apply.34.Written notice specifying a date for payment to be made and the shares in respect of which payment is to be made shall be served on the member whodefaults in making payment pursuant to a promissory note or other written obligations to pay a debt.35.The written notice specifying a date for payment shall(a)name a further date not earlier than the expiration of 14 days from the date of service of the notice on or before which payment required by thenotice is to be made; and(b)contain a statement that in the event of nonpayment at or before the time named in the notice the shares, or any of them, in respect of whichpayment is not made will be liable to be forfeited.36.Where a written notice has been issued and the requirements of the notice have not been complied with within the prescribed time, the directors may at anytime before tender of payment forfeit and cancel the shares to which the notice relates.37.The Company is under no obligation to refund any moneys to the member whose shares have been forfeited and cancelled pursuant to these provisions.Upon forfeiture and cancellation of the shares the member is discharged from any further obligation to the Company with respect to the shares forfeitedand cancelled.10LIEN38.The Company shall have a first and paramount lien on every share issued for a promissory note or for any other binding obligation to contribute money orproperty or any combination thereof to the Company, and the Company shall also have a first and paramount lien on every share standing registered in thename of a member, whether singly or jointly with any other person or persons, for all the debts and liabilities of such member or his estate to the Company,whether the same shall have been incurred before or after notice to the Company of any interest of any person other than such member, and whether thetime for the payment or discharge of the same shall have actually arrived or not, and notwithstanding that the same are joint debts or liabilities of suchmember or his estate and any other person, whether a member of the Company or not. The Company’s lien on a share shall extend to all distributionspayable thereon. The directors may at any time either generally, or in any particular case, waive any lien that has arisen or declare any share to be wholly orin part exempt from the provisions of this Article.39.In the absence of express provisions regarding sale in the promissory note or other binding obligation to contribute money or property, the Company maysell, in such manner as the directors may by resolution of directors determine, any share on which the Company has a lien, but no sale shall be made unlesssome sum in respect of which the lien exists is presently payable nor until the expiration of twentyone days after a notice in writing, stating and demandingpayment of the sum presently payable and giving notice of the intention to sell in default of such payment, has been served on the holder for the timebeing of the share.40.The net proceeds of the sale by the Company of any shares on which it has a lien shall be applied in or towards payment of discharge of the promissorynote or other binding obligation to contribute money or property or any combination thereof in respect of which the lien exists so far as the same ispresently payable and any residue shall (subject to a like lien for debts or liabilities not presently payable as existed upon the share prior to the sale) bepaid to the holder of the share immediately before such sale. For giving effect to any such sale the directors may authorize some person to transfer theshare sold to the purchaser thereof. The purchaser shall be registered as the holder of the share and he shall not be bound to see to the application of thepurchase money, nor shall his title to the share be affected by any irregularity or invalidity in the proceedings in reference to the sale.TRANSFER OF SHARES41.Registered shares in the Company are transferred by a written instrument of transfer signed by the transferor and containing the name and address of thetransferee. The instrument of transfer shall be signed by the transferee if registration as a holder of the share shall impose a liability to the Company on thetransferee. The instrument of transfer of a registered share shall be sent to the Company for registration.42.The board of directors may resolve that interests in shares in the form of depositary receipts may be transferred or otherwise dealt with in accordance withthe regulations and practices instituted by the operator of the Relevant System and any holder of interests in shares shall be entitled to transfer suchinterests by means of such Relevant System and the operator of the Relevant System shall act as agent of the holders of such interests for the purposes ofthe transfer of those interests.43.The register of members may be closed at such times and for such periods as the board of directors may from time to time determine, upon notice beinggiven by advertisement in such newspapers as may be required by the Act and the practice of the Designated Stock Exchange.44.The transfer of a registered share is effective when the name of the transferee is entered on the register of members.45.If the directors of the Company are satisfied that an instrument of transfer relating to shares has been signed but that the instrument has been lost ordestroyed, they may resolve;(a)to accept such evidence of the transfer of the shares as they consider appropriate; and(b)that the transferee’s name should be entered in the register of members notwithstanding the absence of the instrument of transfer.46.The Company must on the receipt of an instrument of transfer from the transferor or transferee of a registered share in the Company enter the name of thetransferee of the share in the register or members unless the directors, if permitted by the Memorandum or these Articles, resolve by resolution of directorsto refuse or delay the registration of the transfer for reasons that shall be specified in the resolution of directors.11TRANSMISSION OF SHARES47.The personal representative of a deceased member may transfer a share even though the personal representative is not a member at the time of the transfer.48.The personal representative, executor or administrator of a deceased member, the guardian of an incompetent member or the trustee of a bankrupt membershall be the only person recognized by the Company as having any title to his share but they shall not be entitled to exercise any rights as a member of theCompany until they have proceeded as set forth in the next following three Articles.49.The production to the Company of any document which is evidence of probate of the will, or letters of administration of the estate, or confirmation asexecutor, of a deceased member or of the appointment of a guardian of an incompetent member or the trustee of a bankrupt member shall be accepted by theCompany even if the deceased, incompetent or bankrupt member is domiciled outside the British Virgin Islands if the document evidencing the grant ofprobate or letters of administration, confirmation as executor, appointment as guardian or trustee in bankruptcy is issued by a foreign court which hadcompetent jurisdiction in the matter. For the purpose of establishing whether or not a foreign court had competent jurisdiction in such a matter the directorsmay obtain appropriate legal advice. The directors may also require an indemnity to be given by the executor, administrator, guardian or trustee inbankruptcy.50.The Company may enter in the register of members the name of any person becoming entitled by operation of law or otherwise to a share or shares inconsequence of the death, incompetence or bankruptcy upon such evidence being produced as may reasonably be required by the directors.51.Any person who has become entitled to a share or shares in consequence of the death, incompetence or bankruptcy of any member may, instead of beingregistered himself, request in writing that some person to be named by him be registered as the transferee of such share or shares and such request shalllikewise be treated as if it were a transfer.52.What amounts to incompetence on the part of a person is a matter to be determined by the court having regard to all the relevant evidence and thecircumstances of the case.REDUCTION OR INCREASE IN AUTHORISED AND UNISSUED SHARES48.The Company may amend the Memorandum to increase or reduce the maximum number of shares the Company is authorised to issue and may in respect ofany unissued shares increase or reduce the number of such shares, or effect any combination of the foregoing.49.The Company may(1)(a) divide its shares, including issued shares, into a larger number of shares; or (b) combine its shares, including issued shares, into a smallernumber of shares.(2)A division or combination of shares, including issued shares, of a class or series shall be for a larger or smaller number, as the case may be, ofshares in the same class or series.(3)A company shall not divide its shares under subsection (1)(a) or (2) if it would cause the maximum number of shares that the Company isauthorised to issue by its memorandum to be exceeded.(4)Where shares are divided or combined under this article, the aggregate par value of the new shares must be equal to the aggregate par value of theoriginal shares.MEETINGS AND CONSENTS OF MEMBERS50.The directors of the Company may convene meetings of the members of the Company at such times and in such manner and places within or outside theBritish Virgin Islands as the directors consider necessary or desirable. The Company may hold an annual general meeting, but shall not (unless required bythe applicable rules of the Designated Stock Exchange for so long as the Company’s Securities are listed or traded on the Designated Stock Exchange) beobliged to hold an annual general meeting.51.Upon the written request of members holding 30 percent or more of the outstanding voting shares in the Company the directors shall convene a meeting ofmembers.1252.The directors shall give not less than 7 days notice of meetings of members to those persons whose names on the date the notice is given appear asmembers in the share register of the Company and are entitled to vote at the meeting.53.The directors may fix the date notice is given of a meeting of members as the record date for determining those shares that are entitled to vote at themeeting.54.A meeting of members may be called on short notice:(a)if members holding not less than 90 percent of the total number of shares entitled to vote on all matters to be considered at the meeting, or 90percent of the votes of each class or series of shares where members are entitled to vote thereon as a class or series together with not less than a90 percent majority of the remaining votes, have agreed to short notice of the meeting, or(b)if all members holding shares entitled to vote on all or any matters to be considered at the meeting have waived notice of the meeting and for thispurpose presence at the meeting shall be deemed to constitute waiver.55.The inadvertent failure of the directors to give notice of a meeting to a member, or the fact that a member has not received notice, does not invalidate themeeting.56.A member may be represented at a meeting of members by a proxy who may speak and vote on behalf of the member.57.The instrument appointing a proxy shall be produced at the place appointed for the meeting before the time for holding the meeting at which the personnamed in such instrument proposes to vote.58.An instrument appointing a proxy shall be in substantially the following form or such other form as the Chairman of the meeting shall accept as properlyevidencing the wishes of the member appointing the proxy.(Name of Company)I/Webeing a member of the aboveCompany withshares HEREBY APPOINTofor failing himofto be my/our proxy to vote for me/us at the meeting of members to be held on the dayofand at any adjournment thereof.(Any restrictions on voting to be inserted here.)Signed this day ofMember59.The following shall apply in respect of joint ownership of shares:a.if two or more persons hold shares jointly each of them may be present in person or by proxy at a meeting of members and may speak as a member;b.if only one of the joint owners is present in person or by proxy he may vote on behalf of all joint owners, andc.if two or more of the joint owners are present in person or by proxy they must vote as one.60.A member shall be deemed to be present at a meeting of members if he participates by telephone or other electronic means and all members participating inthe meeting are able to hear each other.61.A meeting of members is duly constituted if, at the commencement of the meeting, there are present in person or by proxy not less than 50 percent of thevotes of the shares or class or series of shares entitled to vote on resolutions of members to be considered at the meeting. If a quorum be present,notwithstanding the fact that such quorum may be represented by only one person then such person may resolve any matter and a certificate signed bysuch person accompanied where such person be a proxy by a copy of the proxy form shall constitute a valid resolution of members.1362.If within two hours from the time appointed for the meeting a quorum is not present, the meeting, if convened upon the requisition of members, shall bedissolved; in any other case it shall stand adjourned to the next business day at the same time and place or to such other time and place as the directorsmay determine, and if at the adjourned meeting there are present within one hour from the time appointed for the meeting in person or by proxy not lessthan one third of the votes of the shares or each class or series of shares entitled to vote on the resolutions to be considered by the meeting, those presentshall constitute a quorum but otherwise the meeting shall be dissolved.63.At every meeting of members, the Chairman of the Board of Directors shall preside as chairman of the meeting. If there is no Chairman of the Board ofDirectors or if the Chairman of the Board of Directors is not present at the meeting, the members present shall choose some one of their number to be thechairman. If the members are unable to choose a chairman for any reason, then the person representing the greatest number of voting shares present inperson or by prescribed form of proxy at the meeting shall preside as chairman failing which the oldest individual member or representative of a memberpresent shall take the chair.64.The chairman may, with the consent of the meeting, adjourn any meeting from time to time, and from place to place, but no business shall be transacted atany adjourned meeting other than the business left unfinished at the meeting from which the adjournment took place.65.At any meeting of the members the chairman shall be responsible for deciding in such manner as he shall consider appropriate whether any resolution hasbeen carried or not and the result of his decision shall be announced to the meeting and recorded in the minutes thereof. If the chairman shall have anydoubt as to the outcome of any resolution put to the vote, he shall cause a poll to be taken of all votes cast upon such resolution, but if the chairman shallfail to take a poll then any member present in person or by proxy who disputes the announcement by the chairman of the result of any vote mayimmediately following such announcement demand that a poll be taken and the chairman shall thereupon cause a poll to be taken. If a poll is taken at anymeeting, the result thereof shall be duly recorded in the minutes of that meeting by the chairman.66.Any person other than an individual shall be regarded as one member and subject to the specific provisions hereinafter contained for the appointment ofrepresentatives of such persons the right of any individual to speak for or represent such member shall be determined by the law of the jurisdiction where,and by the documents by which, the person is constituted or derives its existence. In case of doubt, the directors may in good faith seek legal advice fromany qualified person and unless and until a court of competent jurisdiction shall otherwise rule, the directors may rely and act upon such advice withoutincurring any liability to any member.67.Any person other than an individual which is a member of the Company may by resolution of its directors or other governing body authorize such personas it thinks fit to act as its representative at any meeting of the Company or of any class of members of the Company, and the person so authorized shall beentitled to exercise the same powers on behalf of the person which he represents as that person could exercise if it were an individual member of theCompany.68.The chairman of any meeting at which a vote is cast by proxy or on behalf of any person other than an individual may call for a notarially certified copy ofsuch proxy or authority which shall be produced within 7 days of being so requested or the votes cast by such proxy or on behalf of such person shall bedisregarded.69.Directors of the Company may attend and speak at any meeting of members of the Company and at any separate meeting of the holders of any class orseries of shares in the Company.70.An action that may be taken by the members at a meeting may also be taken by a resolution of members consented to in writing or by telex, telegram, cable,facsimile or other written electronic communication, without the need for any notice, but if any resolution of members is adopted otherwise than by theunanimous written consent of all members, a copy of such resolution shall forthwith be sent to all members not consenting to such resolution. The consentmay be in the form of counterparts, each counterpart being signed by one or more members.14DIRECTORS71.The first directors of the Company shall be appointed by the first registered agent of the Company and thereafter the directors shall be appointed byresolution of members, subject to Article 78, for such term as the members determine. A person shall not be appointed as a director unless he hasconsented in writing to be a director.72.The minimum number of directors shall be one and the maximum number shall be 20. Unless otherwise determined by the Company in a meeting ofshareholders and subject to the requirements of the Memorandum, the directors may by a Resolution of Directors, amend this Regulation 72 to change thenumber of directors. For as long as Securities of the Company are listed or traded on the Designated Stock Exchange, the directors shall include suchnumber of Independent Directors as applicable law, rules or regulations of the Designated Stock Exchange may require for a foreign private issuer as longas the Company is a foreign private issuer.73.Each director shall hold office for the term, if any, fixed by resolution of members or until his earlier death, resignation or removal.74.Where the Company has only one member who is an individual and that member is also the sole director of the Company, that sole member/director may, byinstrument in writing, nominate a person who is not disqualified from being a director of the Company under section 111(1) of the Act as a reserve directorof the Company to act in the place of the sole director in the event of his death.75.The nomination of a person as a reserve director of the Company ceases to have effect if;a.before the death of the sole member/director who nominated him;(i)he resigns as reserve director, or(ii)the sole member/director revokes the nomination in writing; orb.the sole member/director who nominated him ceases to be the sole member/director of the Company for any reason other than his death.76.A director may be removed from office, with or without cause, by a resolution of directors or a resolution of members. For the purposes of this Regulation76, “cause” means the willful and continuous failure by a director to substantially perform his duties to the Company (other than any such failure resultingfrom incapacity due to physical or mental illness) or the willful engaging by the director in gross misconduct materially and demonstrably injurious to theCompany. If a director is removed from office without cause by a resolution of the members, for the purposes of this Regulation, the resolution of memberswill require the affirmative vote of the holders of 66 2/3 percent or more of the outstanding votes of the shares entitled to vote thereon.77.A director may resign his office by giving written notice of his resignation to the Company and the resignation shall have effect from the date the notice isreceived by the Company or from such later date as may be specified in the notice. A director of the Company shall resign forthwith if he is, or becomes,disqualified to act as a director under the Act.78.The directors may at any time by resolution of directors appoint any person to be a director to fill a vacancy. There is a vacancy if a director dies orotherwise ceases to hold office as a director prior to the expiration of his term of office, where his term of office was fixed upon his appointment. Thedirectors may not appoint a director to fill a vacancy for a term exceeding the term that remained when the person who has ceased to be a director left orotherwise ceased to hold office.79.The Company shall keep a register of directors containing:a.the names and addresses of the persons who are directors of the Company or who have been nominated as reserve directors of the Company;b.the date on which each person whose name is entered in the register was appointed as a director of the Company or nominated as a reservedirector of the Company;c.the date on which each person named as a director ceased to be a director of the Company;d.the date on which the nomination of any person nominated as a reserve director ceased to have effect; ande.such other information as may be prescribed pursuant to the Act.1580.The original or a copy of any register of directors shall be kept at the office of the registered agent of the Company.81.The register of directors may be in any such form as the directors may approve but if it is in magnetic, electronic or other data storage form, the companymust be able to produce legible evidence of its contents.82.With the prior or subsequent approval by a resolution of members, the directors may, by a resolution of directors, fix the emoluments of directors withrespect to services to be rendered in any capacity to the Company.83.A director shall not require a share qualification and may be an individual or a company.POWERS OF DIRECTORS84.The business and affairs of the Company shall be managed by the directors who may pay all expenses incurred preliminary to and in connection with theformation and registration of the Company and may exercise all such powers of the Company as are not by the Act or by the Memorandum or theseArticles required to be exercised by the members of the Company, subject to any delegation of such powers as may be authorized by these Articles and tosuch requirements as may be prescribed by a resolution of members; but no requirement made by a resolution of members shall prevail if it be inconsistentwith these Articles nor shall such requirement invalidate any prior act of the directors which would have been valid if such requirement had not been made.Notwithstanding anything in Section 175 of the Act the directors shall have the power to sell, transfer, lease, exchange or otherwise dispose of more thanfifty percent of the assets of the Company without submitting a proposal to or obtaining the consent of the members of the Company.85.If the Company is a whollyowned subsidiary of a holding company a director may when exercising powers or performing duties as a director act in amanner which he believes is in the best interests of the holding company even though it may not be in the best interests of the Company.86.The directors may, by a resolution of directors, appoint any person, including a person who is a director, to be an officer or agent of the Company. Theresolution of directors appointing an agent may authorize the agent to appoint one or more substitutes or delegates to exercise some or all of the powersconferred on the agent by the Company.87.Every officer or agent of the Company has such powers and authority of the directors, including the power and authority to affix the Seal, as are set forth inthese Articles or in the resolution of directors appointing the officer or agent, except that no agent has any power or authority with respect to thefollowing;a.to amend the memorandum or articles;b.to change the registered office or agent;c.to designate committees of directors;d.to delegate powers to a committee of directors;e.to appoint or remove directors;f.to appoint or remove an agent;g.to fix emoluments of directors;h.to approve a plan of merger, consolidation or arrangement;i.to make a declaration of solvency for the purposes of section 198(1)(a) of the Act or to approve a liquidation plan;j.to make a determination under section 57(1) of the Act that the company will, immediately after a proposed distribution, satisfy the solvency test;ork.to authorise the Company to continue as a company incorporated under the laws of a jurisdiction outside the British Virgin Islands.1688.Any director which is a body corporate may appoint any person its duly authorized representative for the purpose of representing it at meetings of theBoard of Directors or with respect to unanimous written consents.89.The continuing directors may act notwithstanding any vacancy in their body, save that if their number is reduced to their knowledge below the numberfixed by or pursuant to these Articles as the necessary quorum for a meeting of directors, the continuing directors or director may act only for the purposeof appointing directors to fill any vacancy that has arisen or for summoning a meeting of members.90.The directors may by resolution of directors exercise all the powers of the Company to borrow money and to mortgage or charge its undertakings andproperty or any part thereof, to issue debentures, debenture stock and other securities whenever money is borrowed or as security for any debt, liability orobligation of the Company or of any third party.91.All cheques, promissory notes, drafts, bills of exchange and other negotiable instruments and all receipts for moneys paid to the Company, shall be signed,drawn, accepted, endorsed or otherwise executed, as the case may be, in such manner as shall from time to time be determined by resolution of directors.92.The Company shall keep a register of all relevant charges created by the Company showing:a.if the charge is a charge created by the Company, the date of its creation or if the charge is existing on property acquired by the Company, the dateon which the property was acquired;b.a short description of the liability secured by the charge;c.a short description of the property charged;d.the name and address of the trustee for the security, or if there is no such trustee the name and address of the chargee;e.unless the charge is a security to bearer, the name and address of the holder of the charge;f.details of any prohibition or restriction , if any, contained in the instrument creating the charge on the power of the company to create any futurecharge ranking in priority to or equally with the charge; andg.such other information as may be prescribed pursuant to the Act.93.The original or a copy of the register of charges shall be kept at the registered office of the Company or at the office of the registered agent of the Company.PROCEEDINGS OF DIRECTORS94.The directors of the Company or any committee thereof may meet at such times and in such manner and places within or outside the British Virgin Islandsas the directors may determine to be necessary or desirable. Any one or more directors may convene a meeting of directors.95.A director shall be deemed to be present at a meeting of directors if he participates by telephone or other electronic means and all directors participating inthe meeting are able to hear each other.96.A director shall be given not less than 3 days notice of meetings of directors, but a meeting of directors held without 3 days notice having been given to alldirectors shall be valid if all the directors entitled to vote at the meeting who do not attend, waive notice of the meeting and for this purpose, the presenceof a director at a meeting shall constitute waiver on his part. The inadvertent failure to give notice of a meeting to a director, or the fact that a director hasnot received the notice, does not invalidate the meeting.1797.A director may by a written instrument appoint an alternate who need not be a director and an alternate is entitled to attend meetings in the absence of thedirector who appointed him and to vote or consent in place of the director.98.A meeting of directors is duly constituted for all purposes if at the commencement of the meeting there are present in person or by alternate not less thanone half of the total number of directors, unless there are only 2 directors in which case the quorum shall be 2.99.If the Company shall have only one director the provisions herein contained for meetings of the directors shall not apply but such sole director shall havefull power to represent and act for the Company in all matters as are not by the Act or the Memorandum or these Articles required to be exercised by themembers of the Company and in lieu of minutes of a meeting shall record in writing and sign a note or memorandum of all matters requiring a resolution ofdirectors. Such a note or memorandum shall constitute sufficient evidence of such resolution for all purposes.100.At every meeting of the directors the Chairman of the Board of Directors shall preside as chairman of the meeting. If there is no Chairman of the Board ofDirectors or if the Chairman of the Board of Directors is not present at the meeting the Vice Chairman of the Board of Directors shall preside. If there is noVice Chairman of the Board of Directors or if the Vice Chairman of the Board of Directors is not present at the meeting the directors present shall choosesome one of their number to be chairman of the meeting.101.An action that may be taken by the directors or a committee of directors at a meeting may also be taken by a resolution of directors or a committee ofdirectors consented to in writing or by telex, telegram, cable, facsimile or other written electronic communication by all directors or all members of thecommittee as the case may be, without the need for any notice. The consent may be in the form of counterparts, each counterpart being signed by one ormore directors.102.The directors shall cause the following records to be kept:a.minutes of all meetings of directors, members, committees of directors and committees of members; andb.copies of all resolutions consented to by directors, members, committees of directors and committees of members.103.The resolutions, records and minutes referred to in the preceding Article shall be kept at the registered office of the Company, its principal place ofbusiness or at such other place as the directors determine.104.The directors may, by resolution of directors, designate one or more committees, each consisting of one or more directors.105.Subject to the following Article, each committee of directors has such powers and authorities of the directors, including the power and authority to affix theSeal, as are set forth in the resolution of directors establishing the committee.106.The directors have no power to delegate the following powers to a committee of directors;a.to amend the memorandum or articles;b.to change the registered office or agent;c.to designate committees of directors;d.to delegate powers to a committee of directors;e.to appoint or remove directors;f.to appoint or remove an agent;g.to fix emoluments of directors;18h.to approve a plan of merger, consolidation or arrangement;i.to make a declaration of solvency for the purposes of section 198(1)(a) or to approve a liquidation plan;j.to make a determination under section 57(1) that the company will, immediately after a proposed distribution, satisfy the solvency test; ork.to authorise the company to continue as a company incorporated under the laws of a jurisdiction outside the British Virgin Islands.Paragraphs (c) and (d) do not prevent a committee of directors, where authorised by the directors, from appointing a subcommittee and delegating powersexercisable by the committee to the subcommittee.107.The meetings and proceedings of each committee of directors consisting of 2 or more directors shall be governed mutatis mutandis by the provisions ofthese Articles regulating the proceedings of directors so far as the same are not superseded by any provisions in the resolution establishing the committee.108.Without prejudice to the freedom of the directors to establish any other committee, if the shares (or depositary receipts therefore) are listed or quoted onthe Designated Stock Exchange, and if required by the Designated Stock Exchange, the directors shall establish and maintain an audit committee as acommittee of the board of directors, the composition and responsibilities of which shall comply with the rules and regulations of the SEC and theDesignated Stock Exchange. The audit committee shall meet at least once every financial quarter, or more frequently as circumstances dictate.109.The Company shall adopt a formal written audit committee charter and review and assess the adequacy of the formal written charter on an annual basis.The charter shall specify the responsibilities of the Audit Committee which shall include responsibility for, among other things, ensuring its receipt from theoutside auditors of the Company of a formal written statement delineating all relationships between the auditor and the Company, and the AuditCommittee’s responsibility for actively engaging in a dialogue with the auditor with respect to any disclosed relationships or services that may impact theobjectivity and independence of the auditor take appropriate action to oversee the independence of the outside auditor. In addition, the Audit Committee isresponsible for reviewing potential conflict of interest situations and approving all Related Party Transactions.110.Without prejudice to the freedom of the directors to establish any other committees, the Board may establish a Stock Option Committee to administer theCompany’s stock option plans, including authority to make and modify awards under such plans. For so long as the Securities of the Company are listed ortraded on the Designated Stock Exchange, the Stock Option Committee shall have at least two Independent Directors. The Stock Option Committee willadminister the Company’s stock option plans, including the authority to make and modify awards under such plans.111.Without prejudice to the freedom of the directors to establish any other committees, the Board may establish a Nominating Committee to assist the Board inidentifying qualified individuals to become members of the Board.OFFICERS112.The Company may by resolution of directors appoint officers of the Company at such times as shall be considered necessary or expedient. Such officersmay consist of a Chairman of the Board of Directors, a Vice Chairman of the Board of Directors, a President and one or more Vice Presidents, Secretaries andTreasurers and such other officers as may from time to time be deemed desirable. Any number of offices may be held by the same person.113.The officers shall perform such duties as shall be prescribed at the time of their appointment subject to any modification in such duties as may beprescribed thereafter by resolution of directors or resolution of members, but in the absence of any specific allocation of duties it shall be the responsibilityof the Chairman of the Board of Directors to preside at meetings of directors and members, the Vice Chairman to act in the absence of the Chairman, thePresident to manage the day to day affairs of the Company, the Vice Presidents to act in order of seniority in the absence of the President but otherwise toperform such duties as may be delegated to them by the President, the Secretaries to maintain the share register, minute books and records (other thanfinancial records) of the Company and to ensure compliance with all procedural requirements imposed on the Company by applicable law, and the Treasurerto be responsible for the financial affairs of the Company.19114.Subject to the rules of the Designated Stock Exchange, the emoluments of all officers shall be fixed by resolution of directors.115.The officers of the Company shall hold office until their successors are duly elected and qualified, but any officer elected or appointed by the directors maybe removed at any time, with or without cause, by resolution of directors. Any vacancy occurring in any office of the Company may be filled by resolutionof directors.CONFLICT OF INTERESTS116.A director of the Company shall, forthwith after becoming aware of the fact that he is interested in a transaction entered into or to be entered into by theCompany, disclose the interest to all other directors of the Company.117.A director of the Company is not required to comply with Article 112 if;a.the transaction or proposed transaction is between the director and the Company; andb.the transaction or proposed transaction is or is to be entered into in the ordinary course of the company’s business and on usual terms andconditions.118.For the purposes of Article 112 a disclosure to all other directors to the effect that a director is a member, director or officer of another named entity or has afiduciary relationship with respect to the entity or a named individual and is to be regarded as interested in any transaction which may, after the date of theentry or disclosure, be entered into with that entity or individual, is a sufficient disclosure of interest in relation to that transaction.119.A.A director of the Company who is interested in a transaction entered into or to be entered into by the Company may:(i)vote on a matter relating to the transaction;(ii)attend a meeting of directors at which a matter relating to the transaction arises and be included among the directors present at the meeting for thepurposes of a quorum; and(iii)sign a document on behalf of the Company, or do any other thing in his capacity as a director, that relates to the transaction,and, subject to compliance with the Act shall not, by reason of his office be accountable to the Company for any benefit which he derives from suchtransaction and no such transaction shall be liable to be avoided on the grounds of any such interest or benefit.119.B.For so long the Securities of the Company are listed or traded on the Designated Stock Exchange, the Company shall conduct an appropriate review of allmaterial Related Party Transactions on an ongoing basis and shall utilize the Audit Committee for the review and approval of potential conflicts of interestsituations.INDEMNIFICATION120.Subject to the limitations hereinafter provided the Company may indemnify against all expenses, including legal fees, and against all judgments, fines andamounts paid in settlement and reasonably incurred in connection with legal, administrative or investigative proceedings any person who;a.is or was a party or is threatened to be made a party to any threatened, pending or completed proceedings, whether civil, criminal, administrative orinvestigative, by reason of the fact that the person is or was a director, an officer or a liquidator of the Company; orb.is or was, at the request of the Company, serving as a director of, or in any other capacity is or was acting for, another body corporate or apartnership, joint venture, trust or other enterprise.20121.The Company may only indemnify a person if the person acted honestly and in good faith in what he believed to be in the best interests of the Companyand, in the case of criminal proceedings, the person had no reasonable cause to believe that his conduct was unlawful.122.For the purposes of the preceding Article, a director acts in the best interests of the Company if he acts in the best interests of;a.the Company’s holding company; orb.a shareholder or shareholders of the Company; in either case, in the circumstances specified in Article 85.123.The decision of the directors as to whether the person acted honestly and in good faith and with a view to the best interests of the Company and as towhether the person had no reasonable cause to believe that his conduct was unlawful is, in the absence of fraud, sufficient for the purposes of theseArticles, unless a question of law is involved.124.The termination of any proceedings by any judgment, order, settlement, conviction or the entering of a nolle prosequi does not, by itself, create apresumption that the person did not act honestly and in good faith and with a view to the best interests of the Company or that the person had reasonablecause to believe that his conduct was unlawful.Consolidated Statements of Changes in Stockholder’s EquityF5Consolidated Statements of Cash FlowsF6Notes to Consolidated Financial StatementsF7 F22F1REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRMTo the Shareholder and the Sole Director ofLK Technology Ltd.Opinion on the Consolidated Financial StatementsWe have audited the accompanying consolidated balance sheets of LK Technology Ltd. and. subsidiaries (the “Company”) as of December 31, 2017 and 2016, andthe related consolidated statements of operations and comprehensive loss, changes in shareholder’s equity and cash flows for each of the years then ended, andthe related notes (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in allmaterial respects, the consolidated financial position of the Company as of December 31, 2017 and 2016, and the consolidated results of its operations and its cashflows for each of the years then ended, in conformity with accounting principles generally accepted in the United States of America.Basis for OpinionThese consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’sconsolidated financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (UnitedStates) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules andregulations of the Securities and Exchange Commission and the PCAOB.We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonableassurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have,nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internalcontrol over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting.Accordingly, we express no such opinion.An independent member firm of Moore Stephens International Limited – members in principal cities throughout the worldOur audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, andperforming procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in theconsolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well asevaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion.Certified Public AccountantsWe have served as the Company’s auditor since 2018.Hong KongMay 25, 2018F2LK TECHNOLOGY LTD. AND SUBSIDIARIESCONSOLIDATED BALANCE SHEETS(IN U.S. DOLLARS)As of December 31,20172016AssetsCurrent assets:Cash and cash equivalents$72,379$83,843Accounts receivable, net of allowance for doubtful accounts9,729,6251,865,836Other receivables and prepayment2,376,7452,287,934Amounts due from related parties11,760,692Total current assets23,939,4414,237,613Property and equipment, net5,044,8727,771,027Intangible assets, net1,154,1971,682,445Goodwill7,239,9367,239,936Amount due from a related party204,412183,811TOTAL ASSETS37,582,85821,114,832LiabilitiesCurrent liabilities:Accounts payable8,784,5186,446,584Accrued liabilities and other payables12,962,91211,329,613Amounts due to related parties3,563,68316,129,323Total current liabilities25,311,11333,905,520Total liabilities25,311,11333,905,520Commitments and contingenciesShareholder’s Equity (Deficit)Share capitalCommon stock, $1 par value per share; 50,000 shares authorized as of December 31, 2017 and 2016, 1 share issued andoutstanding as of December 31, 2017 and 201611Additional paidin capital41,819,68510,037,469Accumulated deficit(29,936,158)(23,125,704)Accumulated other comprehensive income (loss)388,217297,546Total Shareholder’s Equity (Deficit)12,271,745(12,790,688)TOTAL LIABILITIES AND SHAREHOLDER’S EQUITY (DEFICIT)$37,582,858$21,114,832F3LK TECHNOLOGY LTD. AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS(IN U.S. DOLLARS)For the years endedDecember 31,20172016Revenues$26,082,417$5,233,145Less: Cost of revenues5,547,7796,315,504Less: Operating expenses:Selling and marketing23,908,7336,209,804General and administrative2,451,2492,108,854Research and development1,046,1982,882,202Total operating expenses27,406,18011,200,860Loss from operations(6,871,542)(12,283,219)Other income (expense):Interest expense(26,611)(4,412)Foreign exchange gains (losses)350,679(298,257)Loss from investment(428,571)Other income (expense), net(262,980)(34,572)Total other income (expense), net61,088(765,812)Loss before income taxes(6,810,454)(13,049,031)Income taxesNet loss$(6,810,454)$(13,049,031)Other comprehensive income:Foreign currency translation adjustment90,671387,375Total comprehensive loss$(6,719,783)$(12,661,656)F4LK TECHNOLOGY LTD. AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDER’S EQUITY(IN U.S. DOLLARS)Accumulated otherTotalOrdinary sharesAdditionalpaidin AccumulatedcomprehensiveIncomeShareholder’sEquity SharesAmountcapitaldeficits(loss)(Deficit)Balance as of December 31, 20151$ 1$8,250,505$(10,076,673)$(89,829)$(1,915,996)Capital contribution from C Media1,786,9641,786,964Net loss(13,049,031)(13,049,031)Foreign currency translation adjustment387,375387,375Balance as of December 31, 20161110,037,469(23,125,704)297,546(12,790,688)Capital contribution from C Media31,782,21631,782,216Net loss(6,810,454)(6,810,454)Foreign currency translation adjustment90,67190,671Balance as of December 31, 20171$1$41,819,685$(29,936,158)$388,217$12,271,745F5LK TECHNOLOGY LTD. AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF CASH FLOWS(IN U.S. DOLLARS)For the years endedDecember 31,20172016CASH FLOWS FROM OPERATING ACTIVITIES:Net loss$(6,810,454)$(13,049,031)Depreciation and amortization3,316,1813,245,161Loss on disposal of property and equipment115,19373,022Increase in allowance for doubtful accounts445,39562,591Changes in assets and liabilitiesAccounts receivable(7,933,730)(1,507,296)Other receivables and prepayment(2,202,960)2,873,984Accounts payable2,230,5434,757,457Accrued liabilities and other payables1,866,1377,483,441Net cash (used in) provided by operating activities(8,973,695)3,939,329CASH FLOWS FROM INVESTING ACTIVITIES:Purchase of property and equipment(12,689)(3,554,258)Proceeds from disposal of property and equipment29,942Net cash provided by (used in) investing activities17,253(3,554,258)CASH FLOWS FROM FINANCING ACTIVITIES:Advances from related parties8,938,290(1,197,870)Net cash provided by (used in) financing activities8,938,290(1,197,870)Effect of exchange rate changes6,688(32,746)Net decrease in cash and cash equivalents(11,464)(845,545)Cash and cash equivalents, at beginning of year83,843929,388Cash and cash equivalents, at end of year$72,379$83,843Supplemental cash flow disclosures:Interest paid26,6114,412Income taxes paidF6LK TECHNOLOGY LTD. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS(IN U.S. DOLLARS)NOTE 1 – DESCRIPTION OF BUSINESS AND ORGANIZATIONStar Chariot Limited was incorporated in the British Virgin Islands (“BVI”) as an exempted limited liability company on March 3, 2011. On January 18, 2018, it wasrenamed as LK Technology Ltd. (“LK Technology ” or the “Company”).LK Technology, its subsidiaries and its variable interest entities (“VIEs”) (collectively the “Group”) operate mobile application service for longdistance travel in thePeople’s Republic of China (the “PRC”). The core mobile application product, Luokuang, is made as an LBSsocial contents and services distribution platform. Itoffers functions based on various travel scenarios, e.g. information, entertainment, travel, ecommerce, O2O, advertising, etc.As of December 31, 2017, details of the Company’s subsidiaries and VIEs are as follows:NameDate ofincorporationPlace ofincorporationPercentage oflegal ownershipSubsidiaries:MMB LimitedApr 11, 2013Hong Kong100%Mobile Media (China) LimitedNov 6, 2007Hong Kong100%Zhong Chuan Tian Xia Information and Technology (Beijing) LimitedFeb 1, 2013PRC100%Zhong Chuan Tian Xia Information and Technology (Shenzhen) LimitedDec 23, 2010PRC100%VIEs:Beijing Zhong Chuan Shi Xun Technology Limited (“Zhong Chuan Shi Xun”)May 17, 2004PRC100%Jiangsu Zhong Chuan Rui You Information and Technology Limited (“Zhong Chuan Rui You”)May 26, 2011PRC100%Huoerguosi Luokuang Information and Technology Limited (“Huoerguosi Luokuang”)Jul 19, 2017PRC100%Shenzhen Jiu Zhou Shi Dai Digital and Technology Limited (“Jiu Zhou Shi Dai”)Nov 26, 2004PRC100%F7NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIESBasis of presentationThe consolidated financial statements of the Group have been prepared in accordance with accounting principles generally accepted in the United States of America(“US GAAP”).The Group incurred losses from operations of $6,871,542 and $12,283,219 for the years ended December 31, 2017 and 2016, respectively. As of December 31, 2017, theGroup had a shareholder’s equity of $12,271,145. The Group had negative cash flows from operating activities for the year ended December 31, 2017 of $8,973,695.As of December 31, 2017, the Group had cash and cash equivalents of $72,379 and a working capital deficit of $1,371,672. From 2018 and onwards, the Group willfocus on improving operation efficiency and cost reduction, and enhancing marketing functions to attract more users. The Group regularly monitors its current andexpected liquidity requirements to ensure that it maintains sufficient cash balances and accessible credit to meet its liquidity requirements in the short and long term.The parent company continues to provide cash flow to the Group. Based on working capital conditions and forecast for future operations, the Group believes that itwill be able to meet its payment obligations and other commitments for at least the following twelve months.Principles of consolidationThe consolidated financial statements include the financial statements of the Company, its subsidiaries, including the whollyforeign owned enterprises (“WFOEs”),and VIEs for which the Company is the primary beneficiary. All transactions and balances among the Company, its subsidiaries and consolidated VIEs have beeneliminated upon consolidation. The results of subsidiaries and consolidated VIEs acquired or disposed of are recorded in the consolidated statements of operationsfrom the effective date of acquisition or up to the effective date of disposal, as appropriate.A subsidiary is an entity in which (i) the Company directly or indirectly controls more than 50% of the voting power; or (ii) the Company has the power to appoint orremove the majority of the members of the board of directors or to cast a majority of votes at the meeting of the board of directors or to govern the financial andoperating policies of the investee pursuant to a statute or under an agreement among the shareholders or equity holders. A VIE is required to be consolidated by theprimary beneficiary of the entity if the equity holders in the entity do not have the characteristics of a controlling financial interest or do not have sufficient equity atrisk for the entity to finance its activities without additional subordinated financial support from other parties.F8To comply with the PRC legal restrictions on foreign ownership of companies that operate mobile application services, the Group operates in such restricted servicesin the PRC through certain PRC domestic companies, whose equity interests are held by certain management members or founders of the Group. Part of theregistered capital of these PRC domestic companies was funded by certain management members or founders of the Group. The Group has entered into certainexclusive business services agreements with these PRC domestic companies, which entitle it to receive a majority of their residual returns and make it obligatory forthe Group to absorb a majority of the risk of losses from their activities. In addition, the Group has entered into certain agreements with those management membersor founders, including equity interest pledge agreements of the equity interests held by those management members or founders and exclusive option agreements toacquire the equity interests in these companies when permitted by the PRC laws, rules and regulations.Details of the typical VIE structure of the Group’s significant consolidated VIEs, primarily domestic companies associated with the operations such as Zhong ChuanShi Xun, Zhong Chuan Rui You, Huoerguosi Luokuang and Jiu Zhou Shi Dai, are set forth below:(i)Contracts that give the Group effective control of VIEsExclusive option agreementsThe VIE equity holders have granted the WFOEs exclusive call options to purchase their equity interest in the VIEs at an exercise price equal to the higherof (i) the registered capital in the VIEs; and (ii) the minimum price as permitted by applicable PRC laws. Each relevant VIE has further granted the relevantWFOE an exclusive call option to purchase its assets at an exercise price equal to the book value of the assets or the minimum price as permitted byapplicable PRC laws, whichever is higher. The WFOEs may nominate another entity or individual to purchase the equity interest or assets, if applicable,under the call options. Each call option is exercisable subject to the condition that applicable PRC laws, rules and regulations do not prohibit completion ofthe transfer of the equity interest or assets pursuant to the call option. Each WFOE is entitled to all dividends and other distributions declared by the VIE,and the VIE equity holders have agreed to give up their rights to receive any distributions or proceeds from the disposal of their equity interests in the VIEwhich are in excess of the original registered capital that they contributed to the VIE, and to pay any such distributions or premium to the WFOE. Theexclusive call option agreements remain in effect until the equity interest or assets that are the subject of such agreements are transferred to the WFOEs.Equity pledge agreementsPursuant to the relevant equity pledge agreements, the relevant VIE equity holders have pledged all of their interests in the equity of the VIEs as acontinuing first priority security interest in favor of the corresponding WFOEs to secure the performance of obligations by the VIEs and/or the equityholders under the other structure contracts. Each WFOE is entitled to exercise its right to dispose of the VIE equity holders’ pledged interests in the equityof the VIE and has priority in receiving payment by the application of proceeds from the auction or sale of such pledged interests, in the event of anybreach or default under the loan agreement or other structure contracts, if applicable. These equity pledge agreements remain in force for the duration ofthe relevant loan agreement and other structure contracts.F9(ii)Contracts that enable the Group to receive substantially all of the economic benefits from the VIEsExclusive business services agreementsEach relevant VIE has entered into an exclusive business services agreement with the respective WFOE, pursuant to which the relevant WFOE providesexclusive business services to the VIE. In exchange, the VIE pays a service fee to the WFOE which typically amounts to what would be substantially all ofthe VIE’s pretax profit, resulting in a transfer of substantially all of the profits from the VIE to the WFOE.Other arrangementsThe exclusive call option agreements described above also enable the Group to receive substantially all of the economic benefits from the VIEs by typicallyentitling the WFOEs to all dividends and other distributions declared by the VIEs and to any distributions or proceeds from the disposal by the VIE equityholders of their equity interests in the VIEs that are in excess of the original registered capital that they contributed to the VIEs.Based on these contractual agreements, the Group believes that the PRC domestic companies as described above should be considered as VIEs because the equityholders do not have significant equity at risk nor do they have the characteristics of a controlling financial interest. Given that the Group is the primary beneficiaryof these PRC domestic companies, the Group believes that these VIEs should be consolidated based on the structure as described above.Under the contractual arrangements with the consolidated VIEs, the Group has the power to direct activities of the consolidated VIEs and can have assetstransferred out of the consolidated VIEs under its control. Therefore, the Group considers that there is no asset in any of the consolidated VIEs that can be usedonly to settle obligations of the consolidated VIEs, except for registered capital and PRC statutory reserves. As all consolidated VIEs are incorporated as limitedliability companies under the Company Law of the PRC, creditors of the consolidated VIEs do not have recourse to the general credit of the Group for any of theliabilities of the consolidated VIEs.Currently there is no contractual arrangement which requires the Group to provide additional financial support to the consolidated VIEs. However, as the Groupconducts its businesses primarily based on the licenses and approvals held by its consolidated VIEs, the Group has provided and will continue to provide financialsupport to the consolidated VIEs considering the business requirements of the consolidated VIEs, as well as the Group’s own business objectives in the future.F10Use of estimatesThe preparation of financial statements in conformity with US GAAP requires the Group to make estimates and assumptions that affect the reported amounts ofassets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expensesduring the reporting period. The most significant estimates are the allowance for doubtful accounts, the useful lives of property and equipment and intangibleassets, impairment of longlived assets and goodwill. Actual results could differ from those estimates.Fair value measurementsFair value is the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at themeasurement date under current market conditions. When determining the fair value measurements for assets and liabilities required or permitted to be recorded atfair value, the Group considers the principal or most advantageous market in which it would transact and it considers assumptions that market participants woulduse when pricing the asset or liability.Authoritative literature provides a fair value hierarchy which prioritizes the inputs to valuation techniques used to measure fair value into three broad levels. Thelevel in the hierarchy within which the fair value measurement in its entirety falls is based upon the lowest level of input that is significant to the fair valuemeasurement as follows:Level 1Level 1 applies to assets or liabilities for which there are quoted prices in active markets for identical assets or liabilities.Level 2Level 2 applies to assets or liabilities for which there are inputs other than quoted prices included within Level 1 that are observable for the asset or liability such asquoted prices for similar assets or liabilities in active markets; quoted prices for identical assets or liabilities in markets with insufficient volume or infrequenttransactions (less active markets); or modelderived valuations in which significant inputs are observable or can be derived principally from, or corroborated by,observable market data.Level 3Level 3 applies to assets or liabilities for which there are unobservable inputs to the valuation methodology that are significant to the measurement of the fair valueof the assets or liabilities.F11Cash and cash equivalentsCash and cash equivalents primarily consist of cash, money market funds, investments in interest bearing demand deposit accounts, time deposits and highly liquidinvestments with original maturities of three months or less from the date of purchase and are stated at cost which approximates their fair value. The Group has nocash equivalents.Accounts receivable, net of allowanceAccounts receivable are recognized and carried at the original invoiced amount less an allowance for any potential uncollectible amounts. An estimate for doubtfuldebts is made when collection of the full amount is no longer probable. Bad debts are written off as incurred. The Group generally does not require collateral from itscustomers.The Group maintains allowances for doubtful accounts for estimated losses resulting from the failure of customers to make payments on time. The Group reviews theaccounts receivable on a periodic basis and makes specific allowances when there is doubt as to the collectability of individual balances. In evaluating thecollectability of individual receivable balances, the Group considers many factors, including the age of the balance, the customer’s payment history, its currentcreditworthiness and current economic trends.Property and equipment, netProperty and equipment are carried at cost less accumulated depreciation. Depreciation is calculated on a straightline basis over the following estimated usefullives:Wifi equipment– 3 yearsOffice equipment– 3 to 5 yearsVehicles– 5 yearsCosts of repairs and maintenance are expensed as incurred and asset improvements are capitalized. The gain or loss on disposal of property and equipment is thedifference between the net sales proceeds and the carrying amount of the relevant assets and is recognized in the consolidated income statement. When propertyand equipment are retired or otherwise disposed of, the cost and accumulated depreciation are removed from the accounts and any resulting gain or loss is includedin the results of operations for the respective period.Construction in progressAssets under construction are not depreciated until construction is completed and the assets are ready for their intended use.F12Intangible assetsIntangible assets with finite lives are amortized using the straightline method over the estimated economic lives.Intangible assets have weighted average economic lives from the date of purchase as follows:Software– 5 yearsTrademarks– 10 yearsGoodwillThe Group assesses goodwill for impairment in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”)subtopic 35020, Intangibles—Goodwill and Other: Goodwill (“ASC 35020”), which requires that goodwill to be tested for impairment at the reporting unit level atleast annually and more frequently upon the occurrence of certain events, as defined by ASC 35020.We have the option to assess qualitative factors first to determine whether it is necessary to perform the twostep test in accordance with ASC 35020. If we believe,as a result of the qualitative assessment, that it is morelikelythannot that the fair value of the reporting unit is less than its carrying amount, the twostepquantitative impairment test described below is required. Otherwise, no further testing is required. In the qualitative assessment, we consider primary factors such asindustry and market considerations, overall financial performance of the reporting unit, and other specific information related to the operations. In performing thetwostep quantitative impairment test, the first step compares the carrying amount of the reporting unit to the fair value of the reporting unit based on either quotedmarket prices of the ordinary shares or estimated fair value using a combination of the income approach and the market approach. If the fair value of the reportingunit exceeds the carrying value of the reporting unit, goodwill is not impaired and we are not required to perform further testing. If the carrying value of the reportingunit exceeds the fair value of the reporting unit, then we must perform the second step of the impairment test in order to determine the implied fair value of thereporting unit’s goodwill. The fair value of the reporting unit is allocated to its assets and liabilities in a manner similar to a purchase price allocation in order todetermine the implied fair value of the reporting unit goodwill. If the carrying amount of the goodwill is greater than its implied fair value, the excess is recognized asan impairment loss.In 2017, we performed a qualitative assessment for goodwill. Based on the requirements of ASC35020, we evaluated all relevant factors, including but not limited tomacroeconomic conditions, industry and market conditions, financial performance. We weighed all factors in their entirety and concluded that it was not morelikelythannot the fair value was less than the carrying amount of the reporting unit, and further impairment testing on goodwill was unnecessary as of December 31, 2017and 2016.F13Impairment or disposal of longlived assetsLonglived assets other than goodwill are included in impairment evaluations when events and circumstances exist that indicate the carrying value of these assetsmay not be recoverable. In accordance with FASB ASC 360, Property, Plant and Equipment, the Group assesses the recoverability of the carrying value of longlivedassets by first grouping its longlived assets with other assets and liabilities at the lowest level for which identifiable cash flows are largely independent of the cashflows of other assets and liabilities (the asset group) and, secondly, estimating the undiscounted future cash flows that are directly associated with and expected toarise from the use of and eventual disposition of such asset group. If the carrying value of the asset group exceeds the estimated undiscounted cash flows, theGroup recognizes an impairment loss to the extent the carrying value of the longlived asset exceeds its fair value. The Group determines fair value through quotedmarket prices in active markets or, if quotations of market prices are unavailable, through the performance of internal analysis using a discounted cash flowmethodology or obtains external appraisals from independent valuation firms. The undiscounted and discounted cash flow analyses are based on a number ofestimates and assumptions, including the expected period over which the asset will be utilized, projected future operating results of the asset group, discount rateand longterm growth rate.As of December 31, 2017 and 2016, the Group assessed the impairment of its longlived assets and concluded that there was no impairment indication.Business combinationWe account for business combinations using the purchase method of accounting in accordance with FASB ASC topic 805, Business combinations. The purchasemethod accounting requires that the consideration transferred be allocated to the assets, including separately identifiable assets and liabilities we acquired, basedon their estimated fair values. The consideration transferred in an acquisition is measured as the aggregate of the fair values at the date of exchange of the assetsgiven, liabilities incurred, and equity instruments issued as well as the contingent considerations and all contractual contingencies as of the acquisition date. Thecosts directly attributable to the acquisition are expensed as incurred. Identifiable assets, liabilities and contingent liabilities acquired or assumed are measuredseparately at their fair value as of the acquisition date, irrespective of the extent of any noncontrolling interests. The excess of (i) the total of cost of acquisition, fairvalue of the noncontrolling interests and acquisition date fair value of any previously held equity interest in the acquiree over (ii) the fair value of the identifiable netassets of the acquiree, is recorded as goodwill. If the cost of acquisition is less than the fair value of the net assets of the subsidiary acquired, the difference isrecognized directly in earnings.Revenue recognitionThe Group recognizes revenue in accordance with FASB ASC topic 605, Revenue Recognition (“ASC 605”). Revenue is recognized when the following four revenuerecognition criteria are met: (i) persuasive evidence of an arrangement exists, (ii) delivery has occurred or services have been provided, (iii) the selling price is fixed ordeterminable, and (iv) collectability is reasonably assured.F14Displaybased online advertising servicesThe Group provides displaybased online advertising services to customers by integrating text description, image and video, and displaying the advertisements in aprominent position of LuoKuang Application. The Group recognizes revenue in accordance with ASC 605, over the contractual term based on the agreements andconfirmation letters signed by both parties, commencing on the date the customer’s advertisement is displayed on the Group’s platform.Foreign currency translationThe functional and reporting currency of the Company and the Company’s subsidiaries domiciled in BVI and Hong Kong are the United States dollar (“U.S. dollar”).The financial records of the Company’s other subsidiaries and VIEs located in the PRC are maintained in their local currency, the Chinese Renminbi (“RMB”), whichare the functional currency of these entities.Monetary assets and liabilities denominated in currencies other than the functional currency are translated into the functional currency at the rates of exchangeruling at the balance sheet date. Transactions in currencies other than the functional currency during the year are converted into the functional currency at theapplicable rates of exchange prevailing when the transactions occurred. Transaction gains and losses are recognized in the statements of operations.The Company’s entities with a functional currency of RMB translate their operating results and financial position into the U.S. dollar, the Company’s reportingcurrency. Assets and liabilities are translated using the exchange rates in effect on the balance sheet date. Revenues, expenses, gains and losses are translatedusing the average rate for the year. Retained earnings and equity are translated using the historical rate. Translation adjustments are reported as cumulativetranslation adjustments and are shown as a separate component of other comprehensive income.Income taxesDeferred income taxes are recognized for temporary differences between the tax basis of assets and liabilities and their reported amounts in the financial statements,net operating loss carry forwards and credits, by applying enacted statutory tax rates applicable to future years. Deferred tax assets are reduced by a valuationallowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Current income taxesare provided for in accordance with the laws and regulations applicable to the Group as enacted by the relevant tax authorities.The impact of an uncertain income tax position on the income tax return must be recognized at the largest amount that is morelikelythan not to be sustained uponaudit by the relevant tax authorities. An uncertain income tax position will not be recognized if it has less than a 50% likelihood of being sustained. Additionally, theGroup classifies the interest and penalties, if any, as a component of the income tax expense. For years ended December 31, 2017 and 2016, the Group did not haveany material interest or penalties associated with tax positions nor did the Group have any significant unrecognized uncertain tax positions.F15Related partiesParties are considered to be related to the Company if the parties, directly or indirectly, through one or more intermediaries, control, are controlled by, or are undercommon control with the Company. Related parties also include principal owners of the Company, its management, members of the immediate families of principalowners of the Company and its management and other parties with which the Company may deal with if one party controls or can significantly influence themanagement or operating policies of the other to an extent that one of the transacting parties might be prevented from fully pursuing its own separate interests. TheCompany discloses all significant related party transactions.LeasesLeases have been classified as either capital or operating leases. Leases that transfer substantially all the benefits and risks incidental to the ownership of assets areaccounted for as if there was an acquisition of an asset and incurrence of an obligation at the inception of the lease. All other leases are accounted for as operatingleases wherein rental payments are expensed as incurred.When the Group is the lessor, minimum contractual rental from leases are recognized on a straightline basis over the noncancelable term of the lease. With respectto a particular lease, actual amounts billed in accordance with the lease during any given period may be higher or lower than the amount of rental revenue recognizedfor the period. Straightline rental revenue commences when the customer assumes control of the leased premises. Accrued straightline rents receivable representsthe amount by which straightline rental revenue exceeds rents currently billed in accordance with lease agreements. Contingent rental revenue is accrued when thecontingency is removed.Advertising costsAdvertising costs include expenses associated with direct marketing. All advertising costs are expensed as incurred and included in selling and marketing expenses.During the years ended December 31, 2017 and 2016, advertising costs amounted to $23,171,170 and $4,537,653, respectively.Comprehensive lossComprehensive loss includes net loss and foreign currency translation adjustments and is presented net of tax. The tax effect is nil for the two years endedDecember 31, 2017 and 2016 in the consolidated statements of comprehensive loss.Concentration of credit riskFinancial instruments that potentially expose the Group to concentrations of credit risk consist primarily of cash and accounts receivable. The Group places its cashwith financial institutions with highcredit rating and quality in China. For the year ended December 31, 2017, two customers accounted for over 10% of totalrevenue. For the year ended December 31, 2016, four customers accounted for over 10% of total revenue. At December 31, 2017 and 2016, the Group had credit riskexposure of uninured cash in banks of approximately $72,379 and $83,843, respectively.F16NOTE 3 – INCOME TAXAt December 31, 2017 and 2016, the Group had an unused net operating loss carryforwards of approximately $25,123,726 and $20,081,239, respectively, for income taxpurposes, which expires between 2018 to 2022 and between 2017 to 2021, respectively. At December 31, 2017 and 2016, these net operating losses carryforwards mayresult in future income tax benefits of approximately $5,043,944 and $4,008,863, respectively, however, because realization is uncertain at this time, a valuationallowance in the same amount has been established. Deferred income taxes reflect the net effects of temporary differences between the carrying amounts of assetsand liabilities for financial reporting purposes and the amounts used for income tax purposes.Significant components of the Group’s deferred tax liabilities and assets of December 31, 2017 and 2016 are as follows:December 31,December 31,20172016Deferred tax liabilities$$Deferred tax assetNet operating loss carryforward5,043,9444,008,863Valuation allowance(5,043,944)(4,008,863)Net deferred tax assetMovement of valuation allowanceDecember 31,2017December 31,2016At the beginning of the year$4,008,863$2,049,352Current year addition823,9702,159,518Expired(61,411)Exchange difference272,522(200,007)At the end of the year5,043,9444,008,863The Company is not subject to taxation in BVI under the current BVI law. Subsidiaries operating in the PRC are subject to PRC Enterprise Income Tax at the statutoryrate of 25% for the years ended December 31, 2017 and 2016. Subsidiaries operating in Hong Kong are subject to Hong Kong income taxes at a rate of 16.5% for theyears ended December 31, 2017 and 2016.F17A reconciliation of the income tax expense to the amount computed by applying the current statutory tax rate to the loss before income taxes in the consolidatedstatements of comprehensive income is as follows:December 31,December 31,20172016Loss before income taxes$(6,810,454)$(13,049,031)Tax loss at statutory tax rate(1,655,174)(3,386,822)Nondeductible items6,729,2551,712,857Nontaxable items(3,789,956)(674,189)Change in valuation allowance823,9702,159,518Tax benefits(2,108,095)188,636Income tax expensesNOTE 4 – ACCOUNTS RECEIVABLEAt December 31, 2017 and 2016, accounts receivable consisted of the following:December 31,December 31,20172016Accounts receivable$10,406,602$2,098,946Less: allowance for doubtful accounts676,977233,110$9,729,625$1,865,836NOTE 5 – OTHER RECEIVABLESAt December 31, 2017 and 2016, other receivables consisted of the following:December 31,2017December 31,2016Advances to suppliers$339,701$181,472VAT recoverable (1)3,033,0651,662,805Other5,048,189485,152$2,376,745$2,287,934(1)The balance of advanced VAT represents input VAT available for deducting the amount of VAT paid in the future. During the years ended December 31, 2017and 2016, the Group purchased a large amount of WiFi equipment for deployments, which generated related input VAT approved by tax authority.F18NOTE 6 – AMOUNTS DUE FROM RELATEDPARTIESAt December 31, 2017 and 2016, amounts due from related parties consisted of the following:Name of related partyDecember 31,2017December 31,2016C Media Limited (1)$11,760,692$Ya Tuo Ji International Consultancy (Beijing) Limited (2)204,412183,811(1)C Media Limited is the parent company of LK Technology. The Group expects the amounts due from the related party will be returned to the Group within oneyear.(2)Ya Tuo Ji is a company controlled by the spouse of a major shareholder of C Media Limited. The loan is unsecured, interestfree and repayable on January 5,2019.NOTE 7 – PROPERTY AND EQUIPMENTAt December 31, 2017 and 2016, property and equipment consisted of the following:December 31,December 31,Useful life20172016WiFi equipment3 Years$8,711,424$8,367,678Vehicles5 Years43,246Office and other equipment3 – 5 Years170,242416,434Constructioninprogress2,166,4522,652,28811,048,11811,479,646Less: accumulated depreciation(6,003,246)(3,708,619)$5,044,872$7,771,027For the years ended December 31, 2017 and 2016, depreciation expense amounted to $2,628,884 and $2,474,434, respectively, of which $2,423,655 and $2,194,582,respectively, was included in cost of revenue, $117,648 and $121,740, respectively, was included in selling and marketing expenses and the remainder was included ingeneral and administrative expense.Included in constructioninprogress are WiFI equipment under construction.F19NOTE 8 – GOODWILLIn September of 2014, Zhong Chuan Shi Xun acquired a 100% interest in Zhong Chuan Rui You for a consideration of $7,391,894 (RMB48,000,000). Zhong Chuan RuiYou is primarily engaged in on train WiFi business, deploying WiFi equipment on trains and providing passengers with entertainment and information services ontrains. The book value of the identifiable net assets of Zhong Chuan Rui You was $151,958 (RMB963,000) and a goodwill of $7,239,936 was recorded.NOTE 9 – ACCRUED LIABILITIES AND OTHER PAYABLESAt December 31, 2017 and 2016, accrued liabilities and other payables consisted of the following:December 31,December 31,20172016Deferred revenue$2,326,406$302,735Accrued payroll143,998316,458Other taxes payable3,544,469461,699Other payable852,384686,526Other loans6,095,6559,562,915$12,962,912$11,329,613Deferred revenue represents prepayments from customers for advertising service and is recognized as revenue when the advertising services are rendered.Other loans of $939,555 and $57,416, respectively, as of December 31, 2017 and 2016, are unsecured, bear daily interest at 0.04% and are repayable on demand.NOTE 10 – AMOUNTS DUE TO RELATED PARTIESAt December 31, 2017 and 2016, amounts due to related parties consisted of the following:December 31,December 31,Name of related party20172016Mr. Song Xuesong (“Mr. Song”) (1)$2,921,639$10,669,325C Media Limited (2)$$4,855,236Thumb Beijing Branch (3)$612,103$576,560Thumb Shenzhen Branch (3)$29,941$28,202(1) The Group’s CEO(2) C Media Limited, the parent company.(3) Thumb Beijing and Shenzhen Branch are controlled by the spouse of Mr. Song.Amounts due to related parties are shortterm in nature, noninterest bearing, unsecured and payable on demand.F20NOTE 11 – RETIREMENT AND WELFARE BENEFITSThe Group’s fulltime employees are entitled to staff welfare benefits including medical care, casualty, housing benefits, education benefits, unemployment insuranceand pension benefits through a PRC governmentmandated multiemployer defined contribution plan. The Group is required to accrue the employerportion forthese benefits based on certain percentages of the employees’ salaries. The total provision for such employee benefits of $170,227 and $353,033 during the yearsended December 31, 2017 and 2016, respectively, of which $23,392 and $30,455, respectively, was charged to cost of revenue, $48,957 and $97,408, respectively wascharged to selling and marketing expenses, $49,717 and $86,934, respectively, was charged to general and administrative expenses and $48,161 and $138,236,respectively was charged to research and development expenses. The Group is required to make contributions to the plan out of the amounts accrued for all staffwelfare benefits except for education benefits. The PRC government is responsible for the staff welfare benefits including medical care, casualty, housing benefits,unemployment insurance and pension benefits to be paid to these employees.NOTE 12 – STATUTORY RESERVESAs stipulated by the relevant law and regulations in the PRC, the Group’s subsidiaries and VIEs in the PRC are required to maintain a nondistributable statutorysurplus reserve. Appropriations to the statutory surplus reserve are required to be made at not less than 10% of profit after taxes as reported in the subsidiaries’statutory financial statements prepared under the PRC GAAP. Once appropriated, these amounts are not available for future distribution to owners or shareholders.Once the general reserve is accumulated to 50% of the subsidiaries’ registered capital, the subsidiaries can choose not to provide more reserves. The statutoryreserve may be applied against prior year losses, if any, and may be used for general business expansion and production and increase in registered capital of thesubsidiaries. The Group allocated $Nil to statutory reserves during the years ended December 31, 2017 and 2016, respectively. The statutory reserves cannot betransferred to the Company in the form of loans or advances and are not distributable as cash dividends except in the event of liquidation.NOTE 13 – COMMITMENTS AND CONTINGENCIESOperating leasesWe have entered into operating lease agreements primarily for our office spaces in China. These leases expire through 2018 and are renewable upon negotiation.Future minimum rental payment required under the Office Lease is as follows:Year ending December 31:Amount2018$122,138F21Contingencies(a) Litigation with Shanghai Fusheng Weier Intelligent Control Technology Co., Ltd.On January 22, 2016, Zhong Chuan Rui You and Shanghai Fusheng Weier Intelligent Control Technology Co., Ltd. (“Fusheng Weier”) signed a contract forequipment of $1,652,842 (RMB10,800,000). Since Zhong Chuan Rui You did not make the payments of $1,126,381 (RMB7,360,000) on the due dates, Fusheng Weierfiled a lawsuit against Zhong Chuan Rui You in Shanghai Xuhui District People’s Court on October 8, 2016. On March 9, 2017, Xuhui District People’s Court issuedthe verdict requiring Zhong Chuan Rui You to pay the overdue debts. In August 2017, C Media Limited made the payment of $512,075 (RMB3,346,000). Theremaining balance has been accrued in accounts payable. The payment schedule for the remaining balance is being negotiated by the two parties. On February 5,2018, a hearing was held adding Zhong Chuan Shi Xun as a defendant. The Group plans to settle the remaining balance within one year.(b) Lawsuit with Gansu Jinlun Culture Media Co., Ltd.On August 22, 2014, Zhong Chuan Rui You and Gansu Jinlun Culture Media Co., Ltd. (“Gansu Jinlun”) signed a “Lanzhou Railway Bureau Airconditioned Train WiFi Network System Advertising Operation Rights Agreement” for advertising on 72 trains of $1,467,880 (RMB9,604,633). Due to the dispute on the projectimplementation, Zhong Chuan Rui You did not pay the advertising fee. On August 23, 2017, Gansu Jinlun filed a lawsuit with Gansu Intermediate People’s Court. OnDecember 19, 2017, Gansu Intermediate People’s Court issued a verdict, ruling that Zhong Chuan Rui You settle the overdue advertising fee. Since only 18 out of 72trains have been installed with Wifi network system, Zhong Chuan Rui You disputed and appealed to the verdict. The next court trial date has not yet beendetermined.C Media and Gansu Jinlun are negotiating a potential settlement to resume the contract. According to the legal counsel, it is probable that the settlement will amountto approximately $459,000 (RMB3,000,000); therefore, this amount has been accrued in accounts payable.(c) Litigation with Shenzhen Hua Xun Fang Zhou Technology Co., Ltd.On June 16, 2015, Zhong Chuan Rui You signed a cooperation agreement with Shenzhen Hua Xun Fang Zhou Technology Co., Ltd. (“Shenzhen Hua Xun”) andXuesong Song, a major shareholder of C Media Limited. Pursuant to this agreement, Zhong Chuan Rui You procures equipment from Shenzhen Hua Xun. XuesongSong acts as a joint liability guarantor for the entire debts of Zhong Chuan Rui You under this agreement. As Zhong Chuan Rui You did not make the payments onthe due dates, Shenzhen Hua Xun filed a lawsuit with Shenzhen Baoan District People’s Court on May 31, 2016. On November 1, 2016, Zhong Chuan Rui You,Xuesong Song and Shenzhen Hua Xun reached a settlement in Shenzhen Baoan District People’s Court to settle $1,735,389 (RMB11,355,000) in four instalments. OnDecember 30, 2017, the debt was assigned to C Media Limited.NOTE 14 – SUBSEQUENT EVENTThe Group has evaluated all events or transactions that occurred after December 31, 2017 through May 25, 2018, which is the date that the financial statements wereavailable to be issued.F22EX1.1 2 f20f2017ex11_luokung.htm AMENDED AND RESTATED MEMORANDUM OF ASSOCIATION AND ARTICLES OF ASSOCIATION OF LUOKUNGTECHNOLOGY CORP., DATED AUGUST 20, 2018, AND AS CURRENTLY IN EFFECTExhibit 1.1BC NO: 1553620British Virgin IslandsThe BVI Business Companies Act, 2004(No. 16 of 2004)Memorandum of AssociationandArticles of AssociationofLuokung Technology Corp.Incorporated the 24th day of October, 2009Amended and Restated the 11th Day of December 2009Amended and Restated the 17th Day of December 2009Amended and Restated the 25th Day of March 2010Amended and Restated the 21st day of May 2018Amended and restated the 17 August 2018Amended and restated the 21 August 2018Portcullis (BVI) LimitedPortcullis Chambers4th Floor Ellen Skelton Building3076 Sir Francis Drake HighwayRoad Town, TortolaBritish Virgin IslandsTERRITORY OF THE BRITISH VIRGIN ISLANDSTHE BVI BUSINESS COMPANIES ACT, 2004(No. 16 of 2004)MEMORANDUM OF ASSOCIATIONOFLuokung Technology Corp.NAME1.The name of the Company is Luokung Technology Corp.TYPE OF COMPANY2.The Company is a company limited by shares.REGISTERED OFFICE3.The first Registered Office of the Company is the offices of Portcullis TrustNet (BVI) Limited, Portcullis TrustNet Chambers, P.O. Box 3444, Road Town,Tortola, British Virgin Islands, the office of the registered agent.3.1The current Registered Office of the Company is Portcullis Chambers, 4th Floor Ellen Skelton Building, 3076 SirFrancis Drake Highway, Road Town,Tortola, British Virgin Islands VG1110.REGISTERED AGENT4.The first Registered Agent of the Company is Portcullis TrustNet (BVI) Limited of Portcullis TrustNet Chambers, P.O. Box 3444, Road Town, Tortola,British Virgin Islands.4.1The current Registered Agent of the Company is Portcullis (BVI) Ltd of Portcullis Chambers, 4th Floor Ellen Skelton Building, 3076 Sir Francis DrakeHighway, Road Town, Tortola, British Virgin Islands VG1110.AUTHORISED NUMBER OF SHARES5.The Company is authorised to issue a maximum of 251,000,000 shares.CLASSES, NUMBER AND PAR VALUE OF SHARES6.As at the date of adoption of this memorandum, the Company is authorised to issue (a) 250,000,000 ordinary shares without par value (“OrdinaryShares”); and (b) 1,000,000 preferred shares without par value (“Preferred Shares”).FRACTIONAL SHARES7.The Company may issue fractions of a share and a fractional share shall have the same corresponding fractional liabilities, limitations, preferences,privileges, qualifications, restrictions, rights and other attributes of a whole share of the same class or series of shares.RIGHTS, PRIVILEGES, RESTRICTIONS AND CONDITIONS ATTACHING TO SHARES8.(1)Subject to the memorandum and articles of association (and, for greater clarity, without prejudice to any special rights conferred thereby on theholders of any other shares), an Ordinary Share of the Company confers on the holder;(a)the right to one vote at a meeting of the members of the Company or on any Resolution of Members;(b)the right to an equal share in any Distribution paid by the Company; and(c)the right to an equal share in the distribution of the surplus assets of the Company on a winding up.(2)Subject to the memorandum and articles of association (and, for greater clarity, without prejudice to any special rights conferred thereby on theholders of any other shares), a Preferred Share of the Company confers on the holder;(a)the right to 399 votes at a meeting of the members of the Company or on any Resolution of Members;(b)the right to an equal share in any Distribution paid by the Company;(c)the right to an equal share in the distribution of the surplus assets of the Company on its liquidation.(d)be freely transferable, in whole or in part, by Mr. Xuesong Song to any third party through one or more Private Transactions, subject toApplicable Law; and(e)be freely transferable, in whole or in part, by Mr. Xuesong Song to any third party through one or more Public Transactions, subject to ApplicableLaw and Automatic Conversion of such Preferred Share(s) into Ordinary Share(s).(3)The directors may at their discretion by resolution of directors redeem, purchase or otherwise acquire all or any of the shares in the Companysubject to the Articles..VARIATION OF CLASS RIGHTS9.If at any time the issued shares are divided into different classes or series of shares, the rights attached to any class or series (unless otherwise providedby the terms of issue of the shares of that class or series) may, whether or not the Company is being wound up, be varied with the consent in writing of theholders of not less than threefourths of the issued shares of that class or series and of the holders of not less than threefourths of the issued shares ofany other class or series of shares which may be affected by such variation.RIGHTS NOT VARIED BY THE ISSUE OF SHARES PARI PASSU10.The rights conferred upon the holders of the shares of any class issued with preferred or other rights shall not, unless otherwise expressly provided by theterms of issue of the shares of that class, be deemed to be varied by the creation or issue of further shares ranking pari passu therewith.CAPACITY AND POWERS11.Subject to the Act, any other British Virgin Islands legislation and paragraph 12 below the Company has, irrespective of corporate benefit:(a)full capacity to carry on or undertake any business or activity, do any act or enter into any transaction;(b)for the purposes of paragraph (a), full rights, powers and privileges; and(c)full powers to issue shares with preemptive rights, subject to the Articles.2LIMITATIONS ON THE COMPANY’S BUSINESS12.For the purposes of section 9(4) of the Act the Company may not;(a)carry on banking or trust business, unless it is licensed to do so under the Banks and Trust Companies Act, 1990;(b)carry on business as an insurance or reinsurance company, insurance agent or insurance broker, unless it is licensed under the Insurance Act1994;(c)carry on business of company management, unless it is licensed under the Company Management Act, 1990;(d)carry on the business of providing the registered office or the registered agent for companies incorporated in the British Virgin Islands;(e)carry on the business as a mutual fund, manager of mutual funds or administrator of mutual funds unless it is recognized or licenced as the casemay be under the Mutual Funds Act 1996; or(f)carry on any other business that gives rise to a licencing requirement under any law for the time being in force in the British Virgin Islands unlessit is licenced, regulated, recognised or otherwise approved pursuant to such law.REGISTERED SHARES AND PROHIBITION ON ISSUE OF BEARER SHARES13.Shares in the Company may only be issued as registered shares. The issue of shares to bearer is prohibited.PROHIBITION ON EXCHANGE AND CONVERSION OF REGISTERED SHARES TO BEARER SHARES14.The exchange or conversion of registered shares to bearer shares is prohibited.TRANSFER OF REGISTERED SHARES15.Subject to the provisions of the Articles the Company may upon receipt of an instrument of transfer enter the name of the transferee in the register ofmembers subject to the prior or simultaneous approval of the Company as evidenced by a resolution of directors or by a resolution of members. Subject toany resolution of the members to the contrary, the directors may resolve by resolution of directors to refuse or delay the registration of the transfer forreasons that shall be specified in the resolution of directors.AMENDMENT OF MEMORANDUM AND ARTICLES OF ASSOCIATION16.1The Company may amend its Memorandum or Articles by a resolution of members or by a resolution of directors provided that the directors shall not havethe power to amend the Memorandum or Articles;(a)to restrict the rights or powers of the members to amend the Memorandum or Articles;(b)to change the percentage of members required to pass a resolution to amend the Memorandum or Articles;(c)in circumstances where the Memorandum or Articles cannot be amended by the members; or(d)to Clauses 8, 9, 10 or this Clause 12.16.2No amendment may be made to Regulation 76 of the Articles unless approved by an affirmative vote of the holders of 66 2/3 percent or more of theoutstanding votes of the shares entitled to vote thereon.3DEFINITIONS17.The meanings of words in this Memorandum are as defined in the Articles.We, Portcullis TrustNet (BVI) Limited of Portcullis TrustNet Chambers, P.O. Box 3444, Road Town, Tortola, British Virgin Islands for the purpose ofincorporating a BVI Business Company under the laws of the British Virgin Islands hereby sign this Memorandum of Association the 27th day of October,2009.Incorporator/s/ Nicole WheatleyPortcullis TrustNet (BVI) LimitedPortcullis TrustNet ChambersP.O. Box 3444Road Town, TortolaBritish Virgin Islands(Sgd. Nicole Wheatley)4TERRITORY OF THE BRITISH VIRGIN ISLANDSTHE BVI BUSINESS COMPANIES ACT, 2004(No. 16 of 2004)ARTICLES OF ASSOCIATIONOFLuokung Technology Corp.PRELIMINARY1.In these Articles, if not inconsistent with the subject or context, the words and expressions standing in the first column of the following table shall bear themeanings set opposite them respectively in the second column thereof.WordsMeaningApplicable Lawall Laws, including those of a jurisdiction in or outside of the United States, applicable to the Private orPublic Transactions.Actthe BVI Business Companies Act, 2004 (No 16 of 2004.) including any modification, extension, reenactment or renewal thereof and any regulations made thereunder.Articlesthese Articles of Association as originally framed or as from time to time amended.Automatic Conversioneach Preferred Share shall be automatically converted at any time after issue and without the payment ofany additional sum into an equal number of fully paid Ordinary Shares upon the conclusion of anytransfer by Mr. Xuesong Song to any third party through one or more Public Transactions.Designated Stock Exchangeeither the Nasdaq National Stock Market, Inc. or such other exchange or quotation bureau on which, theCompany’s Securities are listed or traded; provided that until the Securities are listed on any such“Exchange” the rules of any such Designated Stock Exchange shall be inapplicable to these Articles.directora director of the Company.distributionin relation to a distribution by a company to a member, means(i)the direct or indirect transfer of an asset, other than the Company’s own shares, to or forthe benefit of the member or(ii)the incurring of a debt to or for the benefit of a member,in relation to shares held by a member, and whether by means of a purchase of an asset, the purchase,redemption or other acquisition of shares, a transfer of indebtedness or otherwise, and includes adividend.Independent Directora person who meets the then current requirements for “independence” of the applicable rules andregulations of the U.S. Securities and Exchange Commission and the Designated Stock Exchange.5member or shareholderin relation to the Company, means a person whose name is entered in the register of members as theholder of one or more shares, or fractional shares, in the Company.Memorandumthe Memorandum of Association of the Company as originally framed or as from time to time amended.Mr. Xuesong Songthe founder, a director and Chairman of LK Technology Ltd.Ordinary Sharesissued or unissued ordinary shares of no par value of the Company having the rights, preferences andprivileges set out in the MemorandumPersonAn individual, a corporation, a trust, trustee, the estate of a deceased individual, a partnership or anunincorporated association of persons.Preferred Sharesissued or unissued preferred shares of no par value of the Company having the rights, preferences andprivileges set out in the MemorandumPrivate Transactionstransactions that are not considered as a Public Transaction.Public Transactionstransactions through any national securities exchanges and/or through the automated quotation systemincluding but not limited to NASDAQ, NYSE (including NYSE American) or OTC Markets, or anytransaction executed by the broker or with a market maker.Related Party(a) any director, officer and employee of the Company; (b) any family member of such director, officer andemployee; and (c) any entity (e.g. a corporation, partnership, or trust) controlled by or set up for thebenefit of a director, officer or employee, or a family member of such director, officer or employee.Relevant SystemA facility for the electronic transfer of uncertificated securities administered by The Depository TrustCompany or such other Person regulated by the SEC.resolution of directors(a)A resolution approved at a duly convened and constituted meeting of directors of the Companyor of a committee of directors of the Company by the affirmative vote of a simple majority of thedirectors present at the meeting who voted and did not abstain; or(b)a resolution consented to in writing by a simple majority of the directors or of all members of thecommittee, as the case may be;except that where a director is given more than one vote, he shall be counted by the number ofvotes he casts for the purpose of establishing a majority.resolution of membersSubject to the provisions of the Memorandum and Articles means:(a)A resolution approved at a duly convened and constituted meeting of the members of theCompany by the affirmative vote of(i)a majority of in excess of 50% of the votes of the shares entitled to vote and voting onthe resolution, or(ii)a majority of in excess of 50% of the votes of each class or series of shares entitled tovote as a class or series and voting on the resolution and a majority of in excess of 50%of the votes of the remaining shares entitled to vote and voting on the resolution; or6(b)a resolution consented to in writing by(i)an absolute majority of the votes of shares entitled to vote thereon, or(ii)an absolute majority of the votes of each class or series of shares entitled to votethereon as a class or series and of an absolute majority of the votes of the remainingshares entitled to vote thereon.SealAny Seal which has been duly adopted as the common seal of the Company.SECThe United States Securities and Exchange Commission.Securitiesshares and debt obligations of every kind, and options, warrants and rights to acquire shares, or debtobligations.SharesOrdinary Shares and/or Preferred Shares, as the case may be.solvency testa company satisfies the solvency test if;(i)the value of the company’s assets exceeds its liabilities, and(ii)the company is able to pay its debts as they fall due.treasury sharesshares in the Company that were previously issued but were repurchased, redeemed or otherwiseacquired by the Company and not cancelled.2.“Written” or any term of like import includes words typewritten, printed, painted, engraved, lithographed, photographed or represented or reproduced byany mode of reproducing words in a visible form, including telex, facsimile, telegram, cable or other form of writing produced by electronic communication.3.Save as aforesaid any words or expressions defined in the Act shall bear the same meaning in these Articles.4.Whenever the singular or plural number, or the masculine, feminine or neuter gender is used in these Articles, it shall equally, where the context admits,include the others.5.A reference in these Articles to voting in relation to shares shall be construed as a reference to voting by members holding the shares except that it is thevotes allocated to the shares that shall be counted and not the number of members who actually voted and a reference to shares being present at a meetingshall be given a corresponding construction.6.A reference to money in these Articles is, unless otherwise stated, a reference to the currency in which shares in the Company shall be issued according tothe provisions of the Memorandum.7REGISTERED SHARES7.Every member holding registered shares in the Company shall be entitled to a certificate signed by a director or officer of the Company or such otherperson who may be authorised from time to time by resolution of directors or under the Seal, with or without the signature of any director of the Company,specifying the share or shares held by him and the signature of the director or officer or person so authorised and the Seal may be facsimiles.8.Any member receiving a share certificate for registered shares shall indemnify and hold the Company and its directors and officers harmless from any lossor liability which it or they may incur by reason of any wrongful or fraudulent use or representation made by any person by virtue of the possessionthereof. If a share certificate for registered shares is worn out or lost it may be renewed on production of the worn out certificate or on satisfactory proof ofits loss together with such indemnity as may be required by a resolution of directors.9.If several persons are registered as joint holders of any shares, any one of such persons may give an effectual receipt for any distribution payable inrespect of such shares.10.Nothing in these Articles shall require title to any shares or other Securities to be evidenced by a certificate if the Act and the rules of the Designated StockExchange permit otherwise.SHARES AND ISSUED SHARES11.Subject to the provisions of these Articles and, if applicable, the rules of the Designated Stock Exchange, and any resolution of members, the directors ofthe Company may, without limiting or affecting any rights previously conferred on the holders of any existing shares or class or series of shares, offer, allot,grant options over or otherwise dispose of shares to such persons, at such times and upon such terms and conditions as the Company may by resolutionof directors determine. The directors shall not issue more shares than the maximum number provided for in the Memorandum.12.The Company may issue fully paid, partly paid or nil paid shares as well as bonus shares. A partly paid or nil paid share or a share issued for a promissorynote or other written obligation for payment of a debt may be issued subject to forfeiture in the manner prescribed in these Articles.13.Shares in the Company may be issued for consideration in any form, including money, a promissory note or other obligation to contribute money orproperty, real property, personal property (including goodwill and knowhow) services rendered or a contract for future services and the amount of suchconsideration shall be determined by resolution of directors, except that in the case of shares with par value, the amount shall not be less than the parvalue, and in the absence of fraud the decision of the directors as to the value of the consideration received by the Company in respect of the issue isconclusive unless a question of law is involved.14.Before issuing shares for a consideration other than money, the directors shall pass a resolution stating;(a)the amount to be credited for the issue of the shares;(b)their determination of the reasonable present cash value of the nonmoney consideration for the issue; and(c)that, in their opinion, the present cash value of the nonmoney consideration for the issue is not less than the amount to be credited for the issueof the shares.15.A share issued by the Company upon conversion of, or in exchange for, another share or a debt obligation or other security in the Company, shall betreated for all purposes as having been issued for money equal to the consideration received or deemed to have been received by the Company in respectof the other share, debt obligation or security.16.Treasury shares may be disposed of by the Company on such terms and conditions (not otherwise inconsistent with these Articles) as the Company mayby resolution of directors determine.17.Subject to these Articles, the Company may purchase, redeem or otherwise acquire and hold its own shares save that the Company may not purchase,redeem or otherwise acquire its own shares without the consent of the member whose shares are to be purchased, redeemed or otherwise acquired unlessthe Company is permitted by the Act or any other provision in the Memorandum or Articles to purchase, redeem or otherwise acquire the shares withouttheir consent.818.No purchase, redemption or other acquisition of shares shall be made unless the directors determine by resolution of the directors that immediately after thepurchase, redemption or other acquisition the value of the Company’s assets will exceed its liabilities and the Company will be able to pay its debts as theyfall due.19.Sections 60 (Process for acquisition of own shares), 61 (Offer to one or more shareholders) and 62 (Shares redeemed otherwise than at the option ofcompany) of the Act shall not apply to the Company.20.A determination by the directors under Article 18 is not required;(a)the Company redeems a share or shares pursuant to a right of a member to have his shares redeemed or to have his shares exchanged for moneyor other property of the Company; or(b)by virtue of the provisions of Section 179 of the Act.21.Shares that the Company purchases, redeems or otherwise acquires pursuant to Article 17 may be cancelled or held as treasury shares except to the extentthat such shares are in excess of 80 percent of the issued shares of the Company in which case they shall be cancelled but they shall be available forreissue.22.Shares in the Company shall only be held as treasury shares where the directors of the Company resolve as such and the number of shares acquired, whenaggregated with shares of the same class already held by the Company as treasury shares, does not exceed 50% of the shares of that class previouslyissued by the Company, excluding shares that have been cancelled. All rights and obligations attaching to a treasury share are suspended and shall not beexercised by or against the Company while it holds the share as a treasury share. Treasury shares may be reissued by the Company as new shares.23.The Company shall keep a register of members containing;(a)the names and addresses of the persons who hold registered shares in the Company;(b)the number of each class and series of registered shares held by each member;(c)the date on which the name of each member was entered in the register of members;(d)the date on which any person ceased to be a member; and(e)such other information as may be prescribed pursuant to the Act.24.The register of members may be in any such form as the directors may approve but if it is in magnetic, electronic or other data storage form, the companymust be able to produce legible evidence of its contents.25.The original or a copy of the register of members shall be kept at the registered office of the Company or at the office of the registered agent of theCompany.26.A share is deemed to be issued when the name of the member is entered in the register of members.27.Subject to the Act and the rules of the Designated Stock Exchange, the board of directors without further consultation with the holders of any shares orSecurities may resolve that any class or series of shares or other Securities from time to time in issue or to be issued (including shares in issue at the date ofthe adoption of these Articles) may be issued, held, registered and converted to uncertificated form.28.Conversion of shares held in certificated form into shares held in uncertificated form, and vice versa, may be made in such manner as the board of directors,in its absolute discretion, may think fit. The Company or any duly authorised transfer agent (a “Transfer Agent”) shall enter on the register of membershow many shares are held by each member in uncertificated form and in certificated form and shall maintain the register of members. Notwithstanding anyprovision of these Articles, a class or series of shares shall not be treated as two classes by virtue only of that class or series comprising both certificatedshares and uncertificated Shares or as a result of any provision of these Articles which apply only in respect of certificated or uncertificated shares.9MORTGAGES AND CHARGES OF REGISTERED SHARES29.Members may mortgage or charge their registered shares in the Company with such mortgage or charge being evidenced in writing and signed by, or withthe authority of the registered holder of a registered share to which the mortgage or charge relates. The Company shall give effect to the terms of any validmortgage or charge except insofar as it may conflict with any requirements herein contained for consent to the transfer of shares.30.In the case of the mortgage or charge of registered shares there may be entered in the share register of the Company at the request of the registered holderof such shares(a)a statement that the shares are mortgaged or charged;(b)the name of the mortgagee or chargee; and(c)the date on which the aforesaid particulars are entered in the share register.31.Where particulars of a mortgage or charge are entered in the register of members, such particulars shall be cancelled(a)with the written consent of the named mortgagee or chargee or anyone authorized to act on his behalf; or(b)upon evidence satisfactory to the directors of the discharge of the liability secured by the mortgage or charge and the issue of such indemnities asthe directors shall consider necessary or desirable.32.Whilst particulars of a mortgage or charge over registered shares are entered in the register of members pursuant to the preceding articles no transfer ofany share comprised therein shall be effected without the written consent of the named mortgagee or chargee or anyone authorized to act on his behalf.FORFEITURE33.When shares not fully paid on issue or issued for a promissory note or other written obligation for payment of a debt have been issued subject toforfeiture, the following provisions shall apply.34.Written notice specifying a date for payment to be made and the shares in respect of which payment is to be made shall be served on the member whodefaults in making payment pursuant to a promissory note or other written obligations to pay a debt.35.The written notice specifying a date for payment shall(a)name a further date not earlier than the expiration of 14 days from the date of service of the notice on or before which payment required by thenotice is to be made; and(b)contain a statement that in the event of nonpayment at or before the time named in the notice the shares, or any of them, in respect of whichpayment is not made will be liable to be forfeited.36.Where a written notice has been issued and the requirements of the notice have not been complied with within the prescribed time, the directors may at anytime before tender of payment forfeit and cancel the shares to which the notice relates.37.The Company is under no obligation to refund any moneys to the member whose shares have been forfeited and cancelled pursuant to these provisions.Upon forfeiture and cancellation of the shares the member is discharged from any further obligation to the Company with respect to the shares forfeitedand cancelled.10LIEN38.The Company shall have a first and paramount lien on every share issued for a promissory note or for any other binding obligation to contribute money orproperty or any combination thereof to the Company, and the Company shall also have a first and paramount lien on every share standing registered in thename of a member, whether singly or jointly with any other person or persons, for all the debts and liabilities of such member or his estate to the Company,whether the same shall have been incurred before or after notice to the Company of any interest of any person other than such member, and whether thetime for the payment or discharge of the same shall have actually arrived or not, and notwithstanding that the same are joint debts or liabilities of suchmember or his estate and any other person, whether a member of the Company or not. The Company’s lien on a share shall extend to all distributionspayable thereon. The directors may at any time either generally, or in any particular case, waive any lien that has arisen or declare any share to be wholly orin part exempt from the provisions of this Article.39.In the absence of express provisions regarding sale in the promissory note or other binding obligation to contribute money or property, the Company maysell, in such manner as the directors may by resolution of directors determine, any share on which the Company has a lien, but no sale shall be made unlesssome sum in respect of which the lien exists is presently payable nor until the expiration of twentyone days after a notice in writing, stating and demandingpayment of the sum presently payable and giving notice of the intention to sell in default of such payment, has been served on the holder for the timebeing of the share.40.The net proceeds of the sale by the Company of any shares on which it has a lien shall be applied in or towards payment of discharge of the promissorynote or other binding obligation to contribute money or property or any combination thereof in respect of which the lien exists so far as the same ispresently payable and any residue shall (subject to a like lien for debts or liabilities not presently payable as existed upon the share prior to the sale) bepaid to the holder of the share immediately before such sale. For giving effect to any such sale the directors may authorize some person to transfer theshare sold to the purchaser thereof. The purchaser shall be registered as the holder of the share and he shall not be bound to see to the application of thepurchase money, nor shall his title to the share be affected by any irregularity or invalidity in the proceedings in reference to the sale.TRANSFER OF SHARES41.Registered shares in the Company are transferred by a written instrument of transfer signed by the transferor and containing the name and address of thetransferee. The instrument of transfer shall be signed by the transferee if registration as a holder of the share shall impose a liability to the Company on thetransferee. The instrument of transfer of a registered share shall be sent to the Company for registration.42.The board of directors may resolve that interests in shares in the form of depositary receipts may be transferred or otherwise dealt with in accordance withthe regulations and practices instituted by the operator of the Relevant System and any holder of interests in shares shall be entitled to transfer suchinterests by means of such Relevant System and the operator of the Relevant System shall act as agent of the holders of such interests for the purposes ofthe transfer of those interests.43.The register of members may be closed at such times and for such periods as the board of directors may from time to time determine, upon notice beinggiven by advertisement in such newspapers as may be required by the Act and the practice of the Designated Stock Exchange.44.The transfer of a registered share is effective when the name of the transferee is entered on the register of members.45.If the directors of the Company are satisfied that an instrument of transfer relating to shares has been signed but that the instrument has been lost ordestroyed, they may resolve;(a)to accept such evidence of the transfer of the shares as they consider appropriate; and(b)that the transferee’s name should be entered in the register of members notwithstanding the absence of the instrument of transfer.46.The Company must on the receipt of an instrument of transfer from the transferor or transferee of a registered share in the Company enter the name of thetransferee of the share in the register or members unless the directors, if permitted by the Memorandum or these Articles, resolve by resolution of directorsto refuse or delay the registration of the transfer for reasons that shall be specified in the resolution of directors.11TRANSMISSION OF SHARES47.The personal representative of a deceased member may transfer a share even though the personal representative is not a member at the time of the transfer.48.The personal representative, executor or administrator of a deceased member, the guardian of an incompetent member or the trustee of a bankrupt membershall be the only person recognized by the Company as having any title to his share but they shall not be entitled to exercise any rights as a member of theCompany until they have proceeded as set forth in the next following three Articles.49.The production to the Company of any document which is evidence of probate of the will, or letters of administration of the estate, or confirmation asexecutor, of a deceased member or of the appointment of a guardian of an incompetent member or the trustee of a bankrupt member shall be accepted by theCompany even if the deceased, incompetent or bankrupt member is domiciled outside the British Virgin Islands if the document evidencing the grant ofprobate or letters of administration, confirmation as executor, appointment as guardian or trustee in bankruptcy is issued by a foreign court which hadcompetent jurisdiction in the matter. For the purpose of establishing whether or not a foreign court had competent jurisdiction in such a matter the directorsmay obtain appropriate legal advice. The directors may also require an indemnity to be given by the executor, administrator, guardian or trustee inbankruptcy.50.The Company may enter in the register of members the name of any person becoming entitled by operation of law or otherwise to a share or shares inconsequence of the death, incompetence or bankruptcy upon such evidence being produced as may reasonably be required by the directors.51.Any person who has become entitled to a share or shares in consequence of the death, incompetence or bankruptcy of any member may, instead of beingregistered himself, request in writing that some person to be named by him be registered as the transferee of such share or shares and such request shalllikewise be treated as if it were a transfer.52.What amounts to incompetence on the part of a person is a matter to be determined by the court having regard to all the relevant evidence and thecircumstances of the case.REDUCTION OR INCREASE IN AUTHORISED AND UNISSUED SHARES48.The Company may amend the Memorandum to increase or reduce the maximum number of shares the Company is authorised to issue and may in respect ofany unissued shares increase or reduce the number of such shares, or effect any combination of the foregoing.49.The Company may(1)(a) divide its shares, including issued shares, into a larger number of shares; or (b) combine its shares, including issued shares, into a smallernumber of shares.(2)A division or combination of shares, including issued shares, of a class or series shall be for a larger or smaller number, as the case may be, ofshares in the same class or series.(3)A company shall not divide its shares under subsection (1)(a) or (2) if it would cause the maximum number of shares that the Company isauthorised to issue by its memorandum to be exceeded.(4)Where shares are divided or combined under this article, the aggregate par value of the new shares must be equal to the aggregate par value of theoriginal shares.MEETINGS AND CONSENTS OF MEMBERS50.The directors of the Company may convene meetings of the members of the Company at such times and in such manner and places within or outside theBritish Virgin Islands as the directors consider necessary or desirable. The Company may hold an annual general meeting, but shall not (unless required bythe applicable rules of the Designated Stock Exchange for so long as the Company’s Securities are listed or traded on the Designated Stock Exchange) beobliged to hold an annual general meeting.51.Upon the written request of members holding 30 percent or more of the outstanding voting shares in the Company the directors shall convene a meeting ofmembers.1252.The directors shall give not less than 7 days notice of meetings of members to those persons whose names on the date the notice is given appear asmembers in the share register of the Company and are entitled to vote at the meeting.53.The directors may fix the date notice is given of a meeting of members as the record date for determining those shares that are entitled to vote at themeeting.54.A meeting of members may be called on short notice:(a)if members holding not less than 90 percent of the total number of shares entitled to vote on all matters to be considered at the meeting, or 90percent of the votes of each class or series of shares where members are entitled to vote thereon as a class or series together with not less than a90 percent majority of the remaining votes, have agreed to short notice of the meeting, or(b)if all members holding shares entitled to vote on all or any matters to be considered at the meeting have waived notice of the meeting and for thispurpose presence at the meeting shall be deemed to constitute waiver.55.The inadvertent failure of the directors to give notice of a meeting to a member, or the fact that a member has not received notice, does not invalidate themeeting.56.A member may be represented at a meeting of members by a proxy who may speak and vote on behalf of the member.57.The instrument appointing a proxy shall be produced at the place appointed for the meeting before the time for holding the meeting at which the personnamed in such instrument proposes to vote.58.An instrument appointing a proxy shall be in substantially the following form or such other form as the Chairman of the meeting shall accept as properlyevidencing the wishes of the member appointing the proxy.(Name of Company)I/Webeing a member of the aboveCompany withshares HEREBY APPOINTofor failing himofto be my/our proxy to vote for me/us at the meeting of members to be held on the dayofand at any adjournment thereof.(Any restrictions on voting to be inserted here.)Signed this day ofMember59.The following shall apply in respect of joint ownership of shares:a.if two or more persons hold shares jointly each of them may be present in person or by proxy at a meeting of members and may speak as a member;b.if only one of the joint owners is present in person or by proxy he may vote on behalf of all joint owners, andc.if two or more of the joint owners are present in person or by proxy they must vote as one.60.A member shall be deemed to be present at a meeting of members if he participates by telephone or other electronic means and all members participating inthe meeting are able to hear each other.61.A meeting of members is duly constituted if, at the commencement of the meeting, there are present in person or by proxy not less than 50 percent of thevotes of the shares or class or series of shares entitled to vote on resolutions of members to be considered at the meeting. If a quorum be present,notwithstanding the fact that such quorum may be represented by only one person then such person may resolve any matter and a certificate signed bysuch person accompanied where such person be a proxy by a copy of the proxy form shall constitute a valid resolution of members.1362.If within two hours from the time appointed for the meeting a quorum is not present, the meeting, if convened upon the requisition of members, shall bedissolved; in any other case it shall stand adjourned to the next business day at the same time and place or to such other time and place as the directorsmay determine, and if at the adjourned meeting there are present within one hour from the time appointed for the meeting in person or by proxy not lessthan one third of the votes of the shares or each class or series of shares entitled to vote on the resolutions to be considered by the meeting, those presentshall constitute a quorum but otherwise the meeting shall be dissolved.63.At every meeting of members, the Chairman of the Board of Directors shall preside as chairman of the meeting. If there is no Chairman of the Board ofDirectors or if the Chairman of the Board of Directors is not present at the meeting, the members present shall choose some one of their number to be thechairman. If the members are unable to choose a chairman for any reason, then the person representing the greatest number of voting shares present inperson or by prescribed form of proxy at the meeting shall preside as chairman failing which the oldest individual member or representative of a memberpresent shall take the chair.64.The chairman may, with the consent of the meeting, adjourn any meeting from time to time, and from place to place, but no business shall be transacted atany adjourned meeting other than the business left unfinished at the meeting from which the adjournment took place.65.At any meeting of the members the chairman shall be responsible for deciding in such manner as he shall consider appropriate whether any resolution hasbeen carried or not and the result of his decision shall be announced to the meeting and recorded in the minutes thereof. If the chairman shall have anydoubt as to the outcome of any resolution put to the vote, he shall cause a poll to be taken of all votes cast upon such resolution, but if the chairman shallfail to take a poll then any member present in person or by proxy who disputes the announcement by the chairman of the result of any vote mayimmediately following such announcement demand that a poll be taken and the chairman shall thereupon cause a poll to be taken. If a poll is taken at anymeeting, the result thereof shall be duly recorded in the minutes of that meeting by the chairman.66.Any person other than an individual shall be regarded as one member and subject to the specific provisions hereinafter contained for the appointment ofrepresentatives of such persons the right of any individual to speak for or represent such member shall be determined by the law of the jurisdiction where,and by the documents by which, the person is constituted or derives its existence. In case of doubt, the directors may in good faith seek legal advice fromany qualified person and unless and until a court of competent jurisdiction shall otherwise rule, the directors may rely and act upon such advice withoutincurring any liability to any member.67.Any person other than an individual which is a member of the Company may by resolution of its directors or other governing body authorize such personas it thinks fit to act as its representative at any meeting of the Company or of any class of members of the Company, and the person so authorized shall beentitled to exercise the same powers on behalf of the person which he represents as that person could exercise if it were an individual member of theCompany.68.The chairman of any meeting at which a vote is cast by proxy or on behalf of any person other than an individual may call for a notarially certified copy ofsuch proxy or authority which shall be produced within 7 days of being so requested or the votes cast by such proxy or on behalf of such person shall bedisregarded.69.Directors of the Company may attend and speak at any meeting of members of the Company and at any separate meeting of the holders of any class orseries of shares in the Company.70.An action that may be taken by the members at a meeting may also be taken by a resolution of members consented to in writing or by telex, telegram, cable,facsimile or other written electronic communication, without the need for any notice, but if any resolution of members is adopted otherwise than by theunanimous written consent of all members, a copy of such resolution shall forthwith be sent to all members not consenting to such resolution. The consentmay be in the form of counterparts, each counterpart being signed by one or more members.14DIRECTORS71.The first directors of the Company shall be appointed by the first registered agent of the Company and thereafter the directors shall be appointed byresolution of members, subject to Article 78, for such term as the members determine. A person shall not be appointed as a director unless he hasconsented in writing to be a director.72.The minimum number of directors shall be one and the maximum number shall be 20. Unless otherwise determined by the Company in a meeting ofshareholders and subject to the requirements of the Memorandum, the directors may by a Resolution of Directors, amend this Regulation 72 to change thenumber of directors. For as long as Securities of the Company are listed or traded on the Designated Stock Exchange, the directors shall include suchnumber of Independent Directors as applicable law, rules or regulations of the Designated Stock Exchange may require for a foreign private issuer as longas the Company is a foreign private issuer.73.Each director shall hold office for the term, if any, fixed by resolution of members or until his earlier death, resignation or removal.74.Where the Company has only one member who is an individual and that member is also the sole director of the Company, that sole member/director may, byinstrument in writing, nominate a person who is not disqualified from being a director of the Company under section 111(1) of the Act as a reserve directorof the Company to act in the place of the sole director in the event of his death.75.The nomination of a person as a reserve director of the Company ceases to have effect if;a.before the death of the sole member/director who nominated him;(i)he resigns as reserve director, or(ii)the sole member/director revokes the nomination in writing; orb.the sole member/director who nominated him ceases to be the sole member/director of the Company for any reason other than his death.76.A director may be removed from office, with or without cause, by a resolution of directors or a resolution of members. For the purposes of this Regulation76, “cause” means the willful and continuous failure by a director to substantially perform his duties to the Company (other than any such failure resultingfrom incapacity due to physical or mental illness) or the willful engaging by the director in gross misconduct materially and demonstrably injurious to theCompany. If a director is removed from office without cause by a resolution of the members, for the purposes of this Regulation, the resolution of memberswill require the affirmative vote of the holders of 66 2/3 percent or more of the outstanding votes of the shares entitled to vote thereon.77.A director may resign his office by giving written notice of his resignation to the Company and the resignation shall have effect from the date the notice isreceived by the Company or from such later date as may be specified in the notice. A director of the Company shall resign forthwith if he is, or becomes,disqualified to act as a director under the Act.78.The directors may at any time by resolution of directors appoint any person to be a director to fill a vacancy. There is a vacancy if a director dies orotherwise ceases to hold office as a director prior to the expiration of his term of office, where his term of office was fixed upon his appointment. Thedirectors may not appoint a director to fill a vacancy for a term exceeding the term that remained when the person who has ceased to be a director left orotherwise ceased to hold office.79.The Company shall keep a register of directors containing:a.the names and addresses of the persons who are directors of the Company or who have been nominated as reserve directors of the Company;b.the date on which each person whose name is entered in the register was appointed as a director of the Company or nominated as a reservedirector of the Company;c.the date on which each person named as a director ceased to be a director of the Company;d.the date on which the nomination of any person nominated as a reserve director ceased to have effect; ande.such other information as may be prescribed pursuant to the Act.1580.The original or a copy of any register of directors shall be kept at the office of the registered agent of the Company.81.The register of directors may be in any such form as the directors may approve but if it is in magnetic, electronic or other data storage form, the companymust be able to produce legible evidence of its contents.82.With the prior or subsequent approval by a resolution of members, the directors may, by a resolution of directors, fix the emoluments of directors withrespect to services to be rendered in any capacity to the Company.83.A director shall not require a share qualification and may be an individual or a company.POWERS OF DIRECTORS84.The business and affairs of the Company shall be managed by the directors who may pay all expenses incurred preliminary to and in connection with theformation and registration of the Company and may exercise all such powers of the Company as are not by the Act or by the Memorandum or theseArticles required to be exercised by the members of the Company, subject to any delegation of such powers as may be authorized by these Articles and tosuch requirements as may be prescribed by a resolution of members; but no requirement made by a resolution of members shall prevail if it be inconsistentwith these Articles nor shall such requirement invalidate any prior act of the directors which would have been valid if such requirement had not been made.Notwithstanding anything in Section 175 of the Act the directors shall have the power to sell, transfer, lease, exchange or otherwise dispose of more thanfifty percent of the assets of the Company without submitting a proposal to or obtaining the consent of the members of the Company.85.If the Company is a whollyowned subsidiary of a holding company a director may when exercising powers or performing duties as a director act in amanner which he believes is in the best interests of the holding company even though it may not be in the best interests of the Company.86.The directors may, by a resolution of directors, appoint any person, including a person who is a director, to be an officer or agent of the Company. Theresolution of directors appointing an agent may authorize the agent to appoint one or more substitutes or delegates to exercise some or all of the powersconferred on the agent by the Company.87.Every officer or agent of the Company has such powers and authority of the directors, including the power and authority to affix the Seal, as are set forth inthese Articles or in the resolution of directors appointing the officer or agent, except that no agent has any power or authority with respect to thefollowing;a.to amend the memorandum or articles;b.to change the registered office or agent;c.to designate committees of directors;d.to delegate powers to a committee of directors;e.to appoint or remove directors;f.to appoint or remove an agent;g.to fix emoluments of directors;h.to approve a plan of merger, consolidation or arrangement;i.to make a declaration of solvency for the purposes of section 198(1)(a) of the Act or to approve a liquidation plan;j.to make a determination under section 57(1) of the Act that the company will, immediately after a proposed distribution, satisfy the solvency test;ork.to authorise the Company to continue as a company incorporated under the laws of a jurisdiction outside the British Virgin Islands.1688.Any director which is a body corporate may appoint any person its duly authorized representative for the purpose of representing it at meetings of theBoard of Directors or with respect to unanimous written consents.89.The continuing directors may act notwithstanding any vacancy in their body, save that if their number is reduced to their knowledge below the numberfixed by or pursuant to these Articles as the necessary quorum for a meeting of directors, the continuing directors or director may act only for the purposeof appointing directors to fill any vacancy that has arisen or for summoning a meeting of members.90.The directors may by resolution of directors exercise all the powers of the Company to borrow money and to mortgage or charge its undertakings andproperty or any part thereof, to issue debentures, debenture stock and other securities whenever money is borrowed or as security for any debt, liability orobligation of the Company or of any third party.91.All cheques, promissory notes, drafts, bills of exchange and other negotiable instruments and all receipts for moneys paid to the Company, shall be signed,drawn, accepted, endorsed or otherwise executed, as the case may be, in such manner as shall from time to time be determined by resolution of directors.92.The Company shall keep a register of all relevant charges created by the Company showing:a.if the charge is a charge created by the Company, the date of its creation or if the charge is existing on property acquired by the Company, the dateon which the property was acquired;b.a short description of the liability secured by the charge;c.a short description of the property charged;d.the name and address of the trustee for the security, or if there is no such trustee the name and address of the chargee;e.unless the charge is a security to bearer, the name and address of the holder of the charge;f.details of any prohibition or restriction , if any, contained in the instrument creating the charge on the power of the company to create any futurecharge ranking in priority to or equally with the charge; andg.such other information as may be prescribed pursuant to the Act.93.The original or a copy of the register of charges shall be kept at the registered office of the Company or at the office of the registered agent of the Company.PROCEEDINGS OF DIRECTORS94.The directors of the Company or any committee thereof may meet at such times and in such manner and places within or outside the British Virgin Islandsas the directors may determine to be necessary or desirable. Any one or more directors may convene a meeting of directors.95.A director shall be deemed to be present at a meeting of directors if he participates by telephone or other electronic means and all directors participating inthe meeting are able to hear each other.96.A director shall be given not less than 3 days notice of meetings of directors, but a meeting of directors held without 3 days notice having been given to alldirectors shall be valid if all the directors entitled to vote at the meeting who do not attend, waive notice of the meeting and for this purpose, the presenceof a director at a meeting shall constitute waiver on his part. The inadvertent failure to give notice of a meeting to a director, or the fact that a director hasnot received the notice, does not invalidate the meeting.1797.A director may by a written instrument appoint an alternate who need not be a director and an alternate is entitled to attend meetings in the absence of thedirector who appointed him and to vote or consent in place of the director.98.A meeting of directors is duly constituted for all purposes if at the commencement of the meeting there are present in person or by alternate not less thanone half of the total number of directors, unless there are only 2 directors in which case the quorum shall be 2.99.If the Company shall have only one director the provisions herein contained for meetings of the directors shall not apply but such sole director shall havefull power to represent and act for the Company in all matters as are not by the Act or the Memorandum or these Articles required to be exercised by themembers of the Company and in lieu of minutes of a meeting shall record in writing and sign a note or memorandum of all matters requiring a resolution ofdirectors. Such a note or memorandum shall constitute sufficient evidence of such resolution for all purposes.100.At every meeting of the directors the Chairman of the Board of Directors shall preside as chairman of the meeting. If there is no Chairman of the Board ofDirectors or if the Chairman of the Board of Directors is not present at the meeting the Vice Chairman of the Board of Directors shall preside. If there is noVice Chairman of the Board of Directors or if the Vice Chairman of the Board of Directors is not present at the meeting the directors present shall choosesome one of their number to be chairman of the meeting.101.An action that may be taken by the directors or a committee of directors at a meeting may also be taken by a resolution of directors or a committee ofdirectors consented to in writing or by telex, telegram, cable, facsimile or other written electronic communication by all directors or all members of thecommittee as the case may be, without the need for any notice. The consent may be in the form of counterparts, each counterpart being signed by one ormore directors.102.The directors shall cause the following records to be kept:a.minutes of all meetings of directors, members, committees of directors and committees of members; andb.copies of all resolutions consented to by directors, members, committees of directors and committees of members.103.The resolutions, records and minutes referred to in the preceding Article shall be kept at the registered office of the Company, its principal place ofbusiness or at such other place as the directors determine.104.The directors may, by resolution of directors, designate one or more committees, each consisting of one or more directors.105.Subject to the following Article, each committee of directors has such powers and authorities of the directors, including the power and authority to affix theSeal, as are set forth in the resolution of directors establishing the committee.106.The directors have no power to delegate the following powers to a committee of directors;a.to amend the memorandum or articles;b.to change the registered office or agent;c.to designate committees of directors;d.to delegate powers to a committee of directors;e.to appoint or remove directors;f.to appoint or remove an agent;g.to fix emoluments of directors;18h.to approve a plan of merger, consolidation or arrangement;i.to make a declaration of solvency for the purposes of section 198(1)(a) or to approve a liquidation plan;j.to make a determination under section 57(1) that the company will, immediately after a proposed distribution, satisfy the solvency test; ork.to authorise the company to continue as a company incorporated under the laws of a jurisdiction outside the British Virgin Islands.Paragraphs (c) and (d) do not prevent a committee of directors, where authorised by the directors, from appointing a subcommittee and delegating powersexercisable by the committee to the subcommittee.107.The meetings and proceedings of each committee of directors consisting of 2 or more directors shall be governed mutatis mutandis by the provisions ofthese Articles regulating the proceedings of directors so far as the same are not superseded by any provisions in the resolution establishing the committee.108.Without prejudice to the freedom of the directors to establish any other committee, if the shares (or depositary receipts therefore) are listed or quoted onthe Designated Stock Exchange, and if required by the Designated Stock Exchange, the directors shall establish and maintain an audit committee as acommittee of the board of directors, the composition and responsibilities of which shall comply with the rules and regulations of the SEC and theDesignated Stock Exchange. The audit committee shall meet at least once every financial quarter, or more frequently as circumstances dictate.109.The Company shall adopt a formal written audit committee charter and review and assess the adequacy of the formal written charter on an annual basis.The charter shall specify the responsibilities of the Audit Committee which shall include responsibility for, among other things, ensuring its receipt from theoutside auditors of the Company of a formal written statement delineating all relationships between the auditor and the Company, and the AuditCommittee’s responsibility for actively engaging in a dialogue with the auditor with respect to any disclosed relationships or services that may impact theobjectivity and independence of the auditor take appropriate action to oversee the independence of the outside auditor. In addition, the Audit Committee isresponsible for reviewing potential conflict of interest situations and approving all Related Party Transactions.110.Without prejudice to the freedom of the directors to establish any other committees, the Board may establish a Stock Option Committee to administer theCompany’s stock option plans, including authority to make and modify awards under such plans. For so long as the Securities of the Company are listed ortraded on the Designated Stock Exchange, the Stock Option Committee shall have at least two Independent Directors. The Stock Option Committee willadminister the Company’s stock option plans, including the authority to make and modify awards under such plans.111.Without prejudice to the freedom of the directors to establish any other committees, the Board may establish a Nominating Committee to assist the Board inidentifying qualified individuals to become members of the Board.OFFICERS112.The Company may by resolution of directors appoint officers of the Company at such times as shall be considered necessary or expedient. Such officersmay consist of a Chairman of the Board of Directors, a Vice Chairman of the Board of Directors, a President and one or more Vice Presidents, Secretaries andTreasurers and such other officers as may from time to time be deemed desirable. Any number of offices may be held by the same person.113.The officers shall perform such duties as shall be prescribed at the time of their appointment subject to any modification in such duties as may beprescribed thereafter by resolution of directors or resolution of members, but in the absence of any specific allocation of duties it shall be the responsibilityof the Chairman of the Board of Directors to preside at meetings of directors and members, the Vice Chairman to act in the absence of the Chairman, thePresident to manage the day to day affairs of the Company, the Vice Presidents to act in order of seniority in the absence of the President but otherwise toperform such duties as may be delegated to them by the President, the Secretaries to maintain the share register, minute books and records (other thanfinancial records) of the Company and to ensure compliance with all procedural requirements imposed on the Company by applicable law, and the Treasurerto be responsible for the financial affairs of the Company.19114.Subject to the rules of the Designated Stock Exchange, the emoluments of all officers shall be fixed by resolution of directors.115.The officers of the Company shall hold office until their successors are duly elected and qualified, but any officer elected or appointed by the directors maybe removed at any time, with or without cause, by resolution of directors. Any vacancy occurring in any office of the Company may be filled by resolutionof directors.CONFLICT OF INTERESTS116.A director of the Company shall, forthwith after becoming aware of the fact that he is interested in a transaction entered into or to be entered into by theCompany, disclose the interest to all other directors of the Company.117.A director of the Company is not required to comply with Article 112 if;a.the transaction or proposed transaction is between the director and the Company; andb.the transaction or proposed transaction is or is to be entered into in the ordinary course of the company’s business and on usual terms andconditions.118.For the purposes of Article 112 a disclosure to all other directors to the effect that a director is a member, director or officer of another named entity or has afiduciary relationship with respect to the entity or a named individual and is to be regarded as interested in any transaction which may, after the date of theentry or disclosure, be entered into with that entity or individual, is a sufficient disclosure of interest in relation to that transaction.119.A.A director of the Company who is interested in a transaction entered into or to be entered into by the Company may:(i)vote on a matter relating to the transaction;(ii)attend a meeting of directors at which a matter relating to the transaction arises and be included among the directors present at the meeting for thepurposes of a quorum; and(iii)sign a document on behalf of the Company, or do any other thing in his capacity as a director, that relates to the transaction,and, subject to compliance with the Act shall not, by reason of his office be accountable to the Company for any benefit which he derives from suchtransaction and no such transaction shall be liable to be avoided on the grounds of any such interest or benefit.119.B.For so long the Securities of the Company are listed or traded on the Designated Stock Exchange, the Company shall conduct an appropriate review of allmaterial Related Party Transactions on an ongoing basis and shall utilize the Audit Committee for the review and approval of potential conflicts of interestsituations.INDEMNIFICATION120.Subject to the limitations hereinafter provided the Company may indemnify against all expenses, including legal fees, and against all judgments, fines andamounts paid in settlement and reasonably incurred in connection with legal, administrative or investigative proceedings any person who;a.is or was a party or is threatened to be made a party to any threatened, pending or completed proceedings, whether civil, criminal, administrative orinvestigative, by reason of the fact that the person is or was a director, an officer or a liquidator of the Company; orb.is or was, at the request of the Company, serving as a director of, or in any other capacity is or was acting for, another body corporate or apartnership, joint venture, trust or other enterprise.20121.The Company may only indemnify a person if the person acted honestly and in good faith in what he believed to be in the best interests of the Companyand, in the case of criminal proceedings, the person had no reasonable cause to believe that his conduct was unlawful.122.For the purposes of the preceding Article, a director acts in the best interests of the Company if he acts in the best interests of;a.the Company’s holding company; orb.a shareholder or shareholders of the Company; in either case, in the circumstances specified in Article 85.123.The decision of the directors as to whether the person acted honestly and in good faith and with a view to the best interests of the Company and as towhether the person had no reasonable cause to believe that his conduct was unlawful is, in the absence of fraud, sufficient for the purposes of theseArticles, unless a question of law is involved.124.The termination of any proceedings by any judgment, order, settlement, conviction or the entering of a nolle prosequi does not, by itself, create apresumption that the person did not act honestly and in good faith and with a view to the best interests of the Company or that the person had reasonablecause to believe that his conduct was unlawful.Consolidated Statements of Changes in Stockholder’s EquityF5Consolidated Statements of Cash FlowsF6Notes to Consolidated Financial StatementsF7 F22F1REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRMTo the Shareholder and the Sole Director ofLK Technology Ltd.Opinion on the Consolidated Financial StatementsWe have audited the accompanying consolidated balance sheets of LK Technology Ltd. and. subsidiaries (the “Company”) as of December 31, 2017 and 2016, andthe related consolidated statements of operations and comprehensive loss, changes in shareholder’s equity and cash flows for each of the years then ended, andthe related notes (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in allmaterial respects, the consolidated financial position of the Company as of December 31, 2017 and 2016, and the consolidated results of its operations and its cashflows for each of the years then ended, in conformity with accounting principles generally accepted in the United States of America.Basis for OpinionThese consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’sconsolidated financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (UnitedStates) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules andregulations of the Securities and Exchange Commission and the PCAOB.We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonableassurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have,nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internalcontrol over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting.Accordingly, we express no such opinion.An independent member firm of Moore Stephens International Limited – members in principal cities throughout the worldOur audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, andperforming procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in theconsolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well asevaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion.Certified Public AccountantsWe have served as the Company’s auditor since 2018.Hong KongMay 25, 2018F2LK TECHNOLOGY LTD. AND SUBSIDIARIESCONSOLIDATED BALANCE SHEETS(IN U.S. DOLLARS)As of December 31,20172016AssetsCurrent assets:Cash and cash equivalents$72,379$83,843Accounts receivable, net of allowance for doubtful accounts9,729,6251,865,836Other receivables and prepayment2,376,7452,287,934Amounts due from related parties11,760,692Total current assets23,939,4414,237,613Property and equipment, net5,044,8727,771,027Intangible assets, net1,154,1971,682,445Goodwill7,239,9367,239,936Amount due from a related party204,412183,811TOTAL ASSETS37,582,85821,114,832LiabilitiesCurrent liabilities:Accounts payable8,784,5186,446,584Accrued liabilities and other payables12,962,91211,329,613Amounts due to related parties3,563,68316,129,323Total current liabilities25,311,11333,905,520Total liabilities25,311,11333,905,520Commitments and contingenciesShareholder’s Equity (Deficit)Share capitalCommon stock, $1 par value per share; 50,000 shares authorized as of December 31, 2017 and 2016, 1 share issued andoutstanding as of December 31, 2017 and 201611Additional paidin capital41,819,68510,037,469Accumulated deficit(29,936,158)(23,125,704)Accumulated other comprehensive income (loss)388,217297,546Total Shareholder’s Equity (Deficit)12,271,745(12,790,688)TOTAL LIABILITIES AND SHAREHOLDER’S EQUITY (DEFICIT)$37,582,858$21,114,832F3LK TECHNOLOGY LTD. AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS(IN U.S. DOLLARS)For the years endedDecember 31,20172016Revenues$26,082,417$5,233,145Less: Cost of revenues5,547,7796,315,504Less: Operating expenses:Selling and marketing23,908,7336,209,804General and administrative2,451,2492,108,854Research and development1,046,1982,882,202Total operating expenses27,406,18011,200,860Loss from operations(6,871,542)(12,283,219)Other income (expense):Interest expense(26,611)(4,412)Foreign exchange gains (losses)350,679(298,257)Loss from investment(428,571)Other income (expense), net(262,980)(34,572)Total other income (expense), net61,088(765,812)Loss before income taxes(6,810,454)(13,049,031)Income taxesNet loss$(6,810,454)$(13,049,031)Other comprehensive income:Foreign currency translation adjustment90,671387,375Total comprehensive loss$(6,719,783)$(12,661,656)F4LK TECHNOLOGY LTD. AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDER’S EQUITY(IN U.S. DOLLARS)Accumulated otherTotalOrdinary sharesAdditionalpaidin AccumulatedcomprehensiveIncomeShareholder’sEquity SharesAmountcapitaldeficits(loss)(Deficit)Balance as of December 31, 20151$ 1$8,250,505$(10,076,673)$(89,829)$(1,915,996)Capital contribution from C Media1,786,9641,786,964Net loss(13,049,031)(13,049,031)Foreign currency translation adjustment387,375387,375Balance as of December 31, 20161110,037,469(23,125,704)297,546(12,790,688)Capital contribution from C Media31,782,21631,782,216Net loss(6,810,454)(6,810,454)Foreign currency translation adjustment90,67190,671Balance as of December 31, 20171$1$41,819,685$(29,936,158)$388,217$12,271,745F5LK TECHNOLOGY LTD. AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF CASH FLOWS(IN U.S. DOLLARS)For the years endedDecember 31,20172016CASH FLOWS FROM OPERATING ACTIVITIES:Net loss$(6,810,454)$(13,049,031)Depreciation and amortization3,316,1813,245,161Loss on disposal of property and equipment115,19373,022Increase in allowance for doubtful accounts445,39562,591Changes in assets and liabilitiesAccounts receivable(7,933,730)(1,507,296)Other receivables and prepayment(2,202,960)2,873,984Accounts payable2,230,5434,757,457Accrued liabilities and other payables1,866,1377,483,441Net cash (used in) provided by operating activities(8,973,695)3,939,329CASH FLOWS FROM INVESTING ACTIVITIES:Purchase of property and equipment(12,689)(3,554,258)Proceeds from disposal of property and equipment29,942Net cash provided by (used in) investing activities17,253(3,554,258)CASH FLOWS FROM FINANCING ACTIVITIES:Advances from related parties8,938,290(1,197,870)Net cash provided by (used in) financing activities8,938,290(1,197,870)Effect of exchange rate changes6,688(32,746)Net decrease in cash and cash equivalents(11,464)(845,545)Cash and cash equivalents, at beginning of year83,843929,388Cash and cash equivalents, at end of year$72,379$83,843Supplemental cash flow disclosures:Interest paid26,6114,412Income taxes paidF6LK TECHNOLOGY LTD. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS(IN U.S. DOLLARS)NOTE 1 – DESCRIPTION OF BUSINESS AND ORGANIZATIONStar Chariot Limited was incorporated in the British Virgin Islands (“BVI”) as an exempted limited liability company on March 3, 2011. On January 18, 2018, it wasrenamed as LK Technology Ltd. (“LK Technology ” or the “Company”).LK Technology, its subsidiaries and its variable interest entities (“VIEs”) (collectively the “Group”) operate mobile application service for longdistance travel in thePeople’s Republic of China (the “PRC”). The core mobile application product, Luokuang, is made as an LBSsocial contents and services distribution platform. Itoffers functions based on various travel scenarios, e.g. information, entertainment, travel, ecommerce, O2O, advertising, etc.As of December 31, 2017, details of the Company’s subsidiaries and VIEs are as follows:NameDate ofincorporationPlace ofincorporationPercentage oflegal ownershipSubsidiaries:MMB LimitedApr 11, 2013Hong Kong100%Mobile Media (China) LimitedNov 6, 2007Hong Kong100%Zhong Chuan Tian Xia Information and Technology (Beijing) LimitedFeb 1, 2013PRC100%Zhong Chuan Tian Xia Information and Technology (Shenzhen) LimitedDec 23, 2010PRC100%VIEs:Beijing Zhong Chuan Shi Xun Technology Limited (“Zhong Chuan Shi Xun”)May 17, 2004PRC100%Jiangsu Zhong Chuan Rui You Information and Technology Limited (“Zhong Chuan Rui You”)May 26, 2011PRC100%Huoerguosi Luokuang Information and Technology Limited (“Huoerguosi Luokuang”)Jul 19, 2017PRC100%Shenzhen Jiu Zhou Shi Dai Digital and Technology Limited (“Jiu Zhou Shi Dai”)Nov 26, 2004PRC100%F7NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIESBasis of presentationThe consolidated financial statements of the Group have been prepared in accordance with accounting principles generally accepted in the United States of America(“US GAAP”).The Group incurred losses from operations of $6,871,542 and $12,283,219 for the years ended December 31, 2017 and 2016, respectively. As of December 31, 2017, theGroup had a shareholder’s equity of $12,271,145. The Group had negative cash flows from operating activities for the year ended December 31, 2017 of $8,973,695.As of December 31, 2017, the Group had cash and cash equivalents of $72,379 and a working capital deficit of $1,371,672. From 2018 and onwards, the Group willfocus on improving operation efficiency and cost reduction, and enhancing marketing functions to attract more users. The Group regularly monitors its current andexpected liquidity requirements to ensure that it maintains sufficient cash balances and accessible credit to meet its liquidity requirements in the short and long term.The parent company continues to provide cash flow to the Group. Based on working capital conditions and forecast for future operations, the Group believes that itwill be able to meet its payment obligations and other commitments for at least the following twelve months.Principles of consolidationThe consolidated financial statements include the financial statements of the Company, its subsidiaries, including the whollyforeign owned enterprises (“WFOEs”),and VIEs for which the Company is the primary beneficiary. All transactions and balances among the Company, its subsidiaries and consolidated VIEs have beeneliminated upon consolidation. The results of subsidiaries and consolidated VIEs acquired or disposed of are recorded in the consolidated statements of operationsfrom the effective date of acquisition or up to the effective date of disposal, as appropriate.A subsidiary is an entity in which (i) the Company directly or indirectly controls more than 50% of the voting power; or (ii) the Company has the power to appoint orremove the majority of the members of the board of directors or to cast a majority of votes at the meeting of the board of directors or to govern the financial andoperating policies of the investee pursuant to a statute or under an agreement among the shareholders or equity holders. A VIE is required to be consolidated by theprimary beneficiary of the entity if the equity holders in the entity do not have the characteristics of a controlling financial interest or do not have sufficient equity atrisk for the entity to finance its activities without additional subordinated financial support from other parties.F8To comply with the PRC legal restrictions on foreign ownership of companies that operate mobile application services, the Group operates in such restricted servicesin the PRC through certain PRC domestic companies, whose equity interests are held by certain management members or founders of the Group. Part of theregistered capital of these PRC domestic companies was funded by certain management members or founders of the Group. The Group has entered into certainexclusive business services agreements with these PRC domestic companies, which entitle it to receive a majority of their residual returns and make it obligatory forthe Group to absorb a majority of the risk of losses from their activities. In addition, the Group has entered into certain agreements with those management membersor founders, including equity interest pledge agreements of the equity interests held by those management members or founders and exclusive option agreements toacquire the equity interests in these companies when permitted by the PRC laws, rules and regulations.Details of the typical VIE structure of the Group’s significant consolidated VIEs, primarily domestic companies associated with the operations such as Zhong ChuanShi Xun, Zhong Chuan Rui You, Huoerguosi Luokuang and Jiu Zhou Shi Dai, are set forth below:(i)Contracts that give the Group effective control of VIEsExclusive option agreementsThe VIE equity holders have granted the WFOEs exclusive call options to purchase their equity interest in the VIEs at an exercise price equal to the higherof (i) the registered capital in the VIEs; and (ii) the minimum price as permitted by applicable PRC laws. Each relevant VIE has further granted the relevantWFOE an exclusive call option to purchase its assets at an exercise price equal to the book value of the assets or the minimum price as permitted byapplicable PRC laws, whichever is higher. The WFOEs may nominate another entity or individual to purchase the equity interest or assets, if applicable,under the call options. Each call option is exercisable subject to the condition that applicable PRC laws, rules and regulations do not prohibit completion ofthe transfer of the equity interest or assets pursuant to the call option. Each WFOE is entitled to all dividends and other distributions declared by the VIE,and the VIE equity holders have agreed to give up their rights to receive any distributions or proceeds from the disposal of their equity interests in the VIEwhich are in excess of the original registered capital that they contributed to the VIE, and to pay any such distributions or premium to the WFOE. Theexclusive call option agreements remain in effect until the equity interest or assets that are the subject of such agreements are transferred to the WFOEs.Equity pledge agreementsPursuant to the relevant equity pledge agreements, the relevant VIE equity holders have pledged all of their interests in the equity of the VIEs as acontinuing first priority security interest in favor of the corresponding WFOEs to secure the performance of obligations by the VIEs and/or the equityholders under the other structure contracts. Each WFOE is entitled to exercise its right to dispose of the VIE equity holders’ pledged interests in the equityof the VIE and has priority in receiving payment by the application of proceeds from the auction or sale of such pledged interests, in the event of anybreach or default under the loan agreement or other structure contracts, if applicable. These equity pledge agreements remain in force for the duration ofthe relevant loan agreement and other structure contracts.F9(ii)Contracts that enable the Group to receive substantially all of the economic benefits from the VIEsExclusive business services agreementsEach relevant VIE has entered into an exclusive business services agreement with the respective WFOE, pursuant to which the relevant WFOE providesexclusive business services to the VIE. In exchange, the VIE pays a service fee to the WFOE which typically amounts to what would be substantially all ofthe VIE’s pretax profit, resulting in a transfer of substantially all of the profits from the VIE to the WFOE.Other arrangementsThe exclusive call option agreements described above also enable the Group to receive substantially all of the economic benefits from the VIEs by typicallyentitling the WFOEs to all dividends and other distributions declared by the VIEs and to any distributions or proceeds from the disposal by the VIE equityholders of their equity interests in the VIEs that are in excess of the original registered capital that they contributed to the VIEs.Based on these contractual agreements, the Group believes that the PRC domestic companies as described above should be considered as VIEs because the equityholders do not have significant equity at risk nor do they have the characteristics of a controlling financial interest. Given that the Group is the primary beneficiaryof these PRC domestic companies, the Group believes that these VIEs should be consolidated based on the structure as described above.Under the contractual arrangements with the consolidated VIEs, the Group has the power to direct activities of the consolidated VIEs and can have assetstransferred out of the consolidated VIEs under its control. Therefore, the Group considers that there is no asset in any of the consolidated VIEs that can be usedonly to settle obligations of the consolidated VIEs, except for registered capital and PRC statutory reserves. As all consolidated VIEs are incorporated as limitedliability companies under the Company Law of the PRC, creditors of the consolidated VIEs do not have recourse to the general credit of the Group for any of theliabilities of the consolidated VIEs.Currently there is no contractual arrangement which requires the Group to provide additional financial support to the consolidated VIEs. However, as the Groupconducts its businesses primarily based on the licenses and approvals held by its consolidated VIEs, the Group has provided and will continue to provide financialsupport to the consolidated VIEs considering the business requirements of the consolidated VIEs, as well as the Group’s own business objectives in the future.F10Use of estimatesThe preparation of financial statements in conformity with US GAAP requires the Group to make estimates and assumptions that affect the reported amounts ofassets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expensesduring the reporting period. The most significant estimates are the allowance for doubtful accounts, the useful lives of property and equipment and intangibleassets, impairment of longlived assets and goodwill. Actual results could differ from those estimates.Fair value measurementsFair value is the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at themeasurement date under current market conditions. When determining the fair value measurements for assets and liabilities required or permitted to be recorded atfair value, the Group considers the principal or most advantageous market in which it would transact and it considers assumptions that market participants woulduse when pricing the asset or liability.Authoritative literature provides a fair value hierarchy which prioritizes the inputs to valuation techniques used to measure fair value into three broad levels. Thelevel in the hierarchy within which the fair value measurement in its entirety falls is based upon the lowest level of input that is significant to the fair valuemeasurement as follows:Level 1Level 1 applies to assets or liabilities for which there are quoted prices in active markets for identical assets or liabilities.Level 2Level 2 applies to assets or liabilities for which there are inputs other than quoted prices included within Level 1 that are observable for the asset or liability such asquoted prices for similar assets or liabilities in active markets; quoted prices for identical assets or liabilities in markets with insufficient volume or infrequenttransactions (less active markets); or modelderived valuations in which significant inputs are observable or can be derived principally from, or corroborated by,observable market data.Level 3Level 3 applies to assets or liabilities for which there are unobservable inputs to the valuation methodology that are significant to the measurement of the fair valueof the assets or liabilities.F11Cash and cash equivalentsCash and cash equivalents primarily consist of cash, money market funds, investments in interest bearing demand deposit accounts, time deposits and highly liquidinvestments with original maturities of three months or less from the date of purchase and are stated at cost which approximates their fair value. The Group has nocash equivalents.Accounts receivable, net of allowanceAccounts receivable are recognized and carried at the original invoiced amount less an allowance for any potential uncollectible amounts. An estimate for doubtfuldebts is made when collection of the full amount is no longer probable. Bad debts are written off as incurred. The Group generally does not require collateral from itscustomers.The Group maintains allowances for doubtful accounts for estimated losses resulting from the failure of customers to make payments on time. The Group reviews theaccounts receivable on a periodic basis and makes specific allowances when there is doubt as to the collectability of individual balances. In evaluating thecollectability of individual receivable balances, the Group considers many factors, including the age of the balance, the customer’s payment history, its currentcreditworthiness and current economic trends.Property and equipment, netProperty and equipment are carried at cost less accumulated depreciation. Depreciation is calculated on a straightline basis over the following estimated usefullives:Wifi equipment– 3 yearsOffice equipment– 3 to 5 yearsVehicles– 5 yearsCosts of repairs and maintenance are expensed as incurred and asset improvements are capitalized. The gain or loss on disposal of property and equipment is thedifference between the net sales proceeds and the carrying amount of the relevant assets and is recognized in the consolidated income statement. When propertyand equipment are retired or otherwise disposed of, the cost and accumulated depreciation are removed from the accounts and any resulting gain or loss is includedin the results of operations for the respective period.Construction in progressAssets under construction are not depreciated until construction is completed and the assets are ready for their intended use.F12Intangible assetsIntangible assets with finite lives are amortized using the straightline method over the estimated economic lives.Intangible assets have weighted average economic lives from the date of purchase as follows:Software– 5 yearsTrademarks– 10 yearsGoodwillThe Group assesses goodwill for impairment in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”)subtopic 35020, Intangibles—Goodwill and Other: Goodwill (“ASC 35020”), which requires that goodwill to be tested for impairment at the reporting unit level atleast annually and more frequently upon the occurrence of certain events, as defined by ASC 35020.We have the option to assess qualitative factors first to determine whether it is necessary to perform the twostep test in accordance with ASC 35020. If we believe,as a result of the qualitative assessment, that it is morelikelythannot that the fair value of the reporting unit is less than its carrying amount, the twostepquantitative impairment test described below is required. Otherwise, no further testing is required. In the qualitative assessment, we consider primary factors such asindustry and market considerations, overall financial performance of the reporting unit, and other specific information related to the operations. In performing thetwostep quantitative impairment test, the first step compares the carrying amount of the reporting unit to the fair value of the reporting unit based on either quotedmarket prices of the ordinary shares or estimated fair value using a combination of the income approach and the market approach. If the fair value of the reportingunit exceeds the carrying value of the reporting unit, goodwill is not impaired and we are not required to perform further testing. If the carrying value of the reportingunit exceeds the fair value of the reporting unit, then we must perform the second step of the impairment test in order to determine the implied fair value of thereporting unit’s goodwill. The fair value of the reporting unit is allocated to its assets and liabilities in a manner similar to a purchase price allocation in order todetermine the implied fair value of the reporting unit goodwill. If the carrying amount of the goodwill is greater than its implied fair value, the excess is recognized asan impairment loss.In 2017, we performed a qualitative assessment for goodwill. Based on the requirements of ASC35020, we evaluated all relevant factors, including but not limited tomacroeconomic conditions, industry and market conditions, financial performance. We weighed all factors in their entirety and concluded that it was not morelikelythannot the fair value was less than the carrying amount of the reporting unit, and further impairment testing on goodwill was unnecessary as of December 31, 2017and 2016.F13Impairment or disposal of longlived assetsLonglived assets other than goodwill are included in impairment evaluations when events and circumstances exist that indicate the carrying value of these assetsmay not be recoverable. In accordance with FASB ASC 360, Property, Plant and Equipment, the Group assesses the recoverability of the carrying value of longlivedassets by first grouping its longlived assets with other assets and liabilities at the lowest level for which identifiable cash flows are largely independent of the cashflows of other assets and liabilities (the asset group) and, secondly, estimating the undiscounted future cash flows that are directly associated with and expected toarise from the use of and eventual disposition of such asset group. If the carrying value of the asset group exceeds the estimated undiscounted cash flows, theGroup recognizes an impairment loss to the extent the carrying value of the longlived asset exceeds its fair value. The Group determines fair value through quotedmarket prices in active markets or, if quotations of market prices are unavailable, through the performance of internal analysis using a discounted cash flowmethodology or obtains external appraisals from independent valuation firms. The undiscounted and discounted cash flow analyses are based on a number ofestimates and assumptions, including the expected period over which the asset will be utilized, projected future operating results of the asset group, discount rateand longterm growth rate.As of December 31, 2017 and 2016, the Group assessed the impairment of its longlived assets and concluded that there was no impairment indication.Business combinationWe account for business combinations using the purchase method of accounting in accordance with FASB ASC topic 805, Business combinations. The purchasemethod accounting requires that the consideration transferred be allocated to the assets, including separately identifiable assets and liabilities we acquired, basedon their estimated fair values. The consideration transferred in an acquisition is measured as the aggregate of the fair values at the date of exchange of the assetsgiven, liabilities incurred, and equity instruments issued as well as the contingent considerations and all contractual contingencies as of the acquisition date. Thecosts directly attributable to the acquisition are expensed as incurred. Identifiable assets, liabilities and contingent liabilities acquired or assumed are measuredseparately at their fair value as of the acquisition date, irrespective of the extent of any noncontrolling interests. The excess of (i) the total of cost of acquisition, fairvalue of the noncontrolling interests and acquisition date fair value of any previously held equity interest in the acquiree over (ii) the fair value of the identifiable netassets of the acquiree, is recorded as goodwill. If the cost of acquisition is less than the fair value of the net assets of the subsidiary acquired, the difference isrecognized directly in earnings.Revenue recognitionThe Group recognizes revenue in accordance with FASB ASC topic 605, Revenue Recognition (“ASC 605”). Revenue is recognized when the following four revenuerecognition criteria are met: (i) persuasive evidence of an arrangement exists, (ii) delivery has occurred or services have been provided, (iii) the selling price is fixed ordeterminable, and (iv) collectability is reasonably assured.F14Displaybased online advertising servicesThe Group provides displaybased online advertising services to customers by integrating text description, image and video, and displaying the advertisements in aprominent position of LuoKuang Application. The Group recognizes revenue in accordance with ASC 605, over the contractual term based on the agreements andconfirmation letters signed by both parties, commencing on the date the customer’s advertisement is displayed on the Group’s platform.Foreign currency translationThe functional and reporting currency of the Company and the Company’s subsidiaries domiciled in BVI and Hong Kong are the United States dollar (“U.S. dollar”).The financial records of the Company’s other subsidiaries and VIEs located in the PRC are maintained in their local currency, the Chinese Renminbi (“RMB”), whichare the functional currency of these entities.Monetary assets and liabilities denominated in currencies other than the functional currency are translated into the functional currency at the rates of exchangeruling at the balance sheet date. Transactions in currencies other than the functional currency during the year are converted into the functional currency at theapplicable rates of exchange prevailing when the transactions occurred. Transaction gains and losses are recognized in the statements of operations.The Company’s entities with a functional currency of RMB translate their operating results and financial position into the U.S. dollar, the Company’s reportingcurrency. Assets and liabilities are translated using the exchange rates in effect on the balance sheet date. Revenues, expenses, gains and losses are translatedusing the average rate for the year. Retained earnings and equity are translated using the historical rate. Translation adjustments are reported as cumulativetranslation adjustments and are shown as a separate component of other comprehensive income.Income taxesDeferred income taxes are recognized for temporary differences between the tax basis of assets and liabilities and their reported amounts in the financial statements,net operating loss carry forwards and credits, by applying enacted statutory tax rates applicable to future years. Deferred tax assets are reduced by a valuationallowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Current income taxesare provided for in accordance with the laws and regulations applicable to the Group as enacted by the relevant tax authorities.The impact of an uncertain income tax position on the income tax return must be recognized at the largest amount that is morelikelythan not to be sustained uponaudit by the relevant tax authorities. An uncertain income tax position will not be recognized if it has less than a 50% likelihood of being sustained. Additionally, theGroup classifies the interest and penalties, if any, as a component of the income tax expense. For years ended December 31, 2017 and 2016, the Group did not haveany material interest or penalties associated with tax positions nor did the Group have any significant unrecognized uncertain tax positions.F15Related partiesParties are considered to be related to the Company if the parties, directly or indirectly, through one or more intermediaries, control, are controlled by, or are undercommon control with the Company. Related parties also include principal owners of the Company, its management, members of the immediate families of principalowners of the Company and its management and other parties with which the Company may deal with if one party controls or can significantly influence themanagement or operating policies of the other to an extent that one of the transacting parties might be prevented from fully pursuing its own separate interests. TheCompany discloses all significant related party transactions.LeasesLeases have been classified as either capital or operating leases. Leases that transfer substantially all the benefits and risks incidental to the ownership of assets areaccounted for as if there was an acquisition of an asset and incurrence of an obligation at the inception of the lease. All other leases are accounted for as operatingleases wherein rental payments are expensed as incurred.When the Group is the lessor, minimum contractual rental from leases are recognized on a straightline basis over the noncancelable term of the lease. With respectto a particular lease, actual amounts billed in accordance with the lease during any given period may be higher or lower than the amount of rental revenue recognizedfor the period. Straightline rental revenue commences when the customer assumes control of the leased premises. Accrued straightline rents receivable representsthe amount by which straightline rental revenue exceeds rents currently billed in accordance with lease agreements. Contingent rental revenue is accrued when thecontingency is removed.Advertising costsAdvertising costs include expenses associated with direct marketing. All advertising costs are expensed as incurred and included in selling and marketing expenses.During the years ended December 31, 2017 and 2016, advertising costs amounted to $23,171,170 and $4,537,653, respectively.Comprehensive lossComprehensive loss includes net loss and foreign currency translation adjustments and is presented net of tax. The tax effect is nil for the two years endedDecember 31, 2017 and 2016 in the consolidated statements of comprehensive loss.Concentration of credit riskFinancial instruments that potentially expose the Group to concentrations of credit risk consist primarily of cash and accounts receivable. The Group places its cashwith financial institutions with highcredit rating and quality in China. For the year ended December 31, 2017, two customers accounted for over 10% of totalrevenue. For the year ended December 31, 2016, four customers accounted for over 10% of total revenue. At December 31, 2017 and 2016, the Group had credit riskexposure of uninured cash in banks of approximately $72,379 and $83,843, respectively.F16NOTE 3 – INCOME TAXAt December 31, 2017 and 2016, the Group had an unused net operating loss carryforwards of approximately $25,123,726 and $20,081,239, respectively, for income taxpurposes, which expires between 2018 to 2022 and between 2017 to 2021, respectively. At December 31, 2017 and 2016, these net operating losses carryforwards mayresult in future income tax benefits of approximately $5,043,944 and $4,008,863, respectively, however, because realization is uncertain at this time, a valuationallowance in the same amount has been established. Deferred income taxes reflect the net effects of temporary differences between the carrying amounts of assetsand liabilities for financial reporting purposes and the amounts used for income tax purposes.Significant components of the Group’s deferred tax liabilities and assets of December 31, 2017 and 2016 are as follows:December 31,December 31,20172016Deferred tax liabilities$$Deferred tax assetNet operating loss carryforward5,043,9444,008,863Valuation allowance(5,043,944)(4,008,863)Net deferred tax assetMovement of valuation allowanceDecember 31,2017December 31,2016At the beginning of the year$4,008,863$2,049,352Current year addition823,9702,159,518Expired(61,411)Exchange difference272,522(200,007)At the end of the year5,043,9444,008,863The Company is not subject to taxation in BVI under the current BVI law. Subsidiaries operating in the PRC are subject to PRC Enterprise Income Tax at the statutoryrate of 25% for the years ended December 31, 2017 and 2016. Subsidiaries operating in Hong Kong are subject to Hong Kong income taxes at a rate of 16.5% for theyears ended December 31, 2017 and 2016.F17A reconciliation of the income tax expense to the amount computed by applying the current statutory tax rate to the loss before income taxes in the consolidatedstatements of comprehensive income is as follows:December 31,December 31,20172016Loss before income taxes$(6,810,454)$(13,049,031)Tax loss at statutory tax rate(1,655,174)(3,386,822)Nondeductible items6,729,2551,712,857Nontaxable items(3,789,956)(674,189)Change in valuation allowance823,9702,159,518Tax benefits(2,108,095)188,636Income tax expensesNOTE 4 – ACCOUNTS RECEIVABLEAt December 31, 2017 and 2016, accounts receivable consisted of the following:December 31,December 31,20172016Accounts receivable$10,406,602$2,098,946Less: allowance for doubtful accounts676,977233,110$9,729,625$1,865,836NOTE 5 – OTHER RECEIVABLESAt December 31, 2017 and 2016, other receivables consisted of the following:December 31,2017December 31,2016Advances to suppliers$339,701$181,472VAT recoverable (1)3,033,0651,662,805Other5,048,189485,152$2,376,745$2,287,934(1)The balance of advanced VAT represents input VAT available for deducting the amount of VAT paid in the future. During the years ended December 31, 2017and 2016, the Group purchased a large amount of WiFi equipment for deployments, which generated related input VAT approved by tax authority.F18NOTE 6 – AMOUNTS DUE FROM RELATEDPARTIESAt December 31, 2017 and 2016, amounts due from related parties consisted of the following:Name of related partyDecember 31,2017December 31,2016C Media Limited (1)$11,760,692$Ya Tuo Ji International Consultancy (Beijing) Limited (2)204,412183,811(1)C Media Limited is the parent company of LK Technology. The Group expects the amounts due from the related party will be returned to the Group within oneyear.(2)Ya Tuo Ji is a company controlled by the spouse of a major shareholder of C Media Limited. The loan is unsecured, interestfree and repayable on January 5,2019.NOTE 7 – PROPERTY AND EQUIPMENTAt December 31, 2017 and 2016, property and equipment consisted of the following:December 31,December 31,Useful life20172016WiFi equipment3 Years$8,711,424$8,367,678Vehicles5 Years43,246Office and other equipment3 – 5 Years170,242416,434Constructioninprogress2,166,4522,652,28811,048,11811,479,646Less: accumulated depreciation(6,003,246)(3,708,619)$5,044,872$7,771,027For the years ended December 31, 2017 and 2016, depreciation expense amounted to $2,628,884 and $2,474,434, respectively, of which $2,423,655 and $2,194,582,respectively, was included in cost of revenue, $117,648 and $121,740, respectively, was included in selling and marketing expenses and the remainder was included ingeneral and administrative expense.Included in constructioninprogress are WiFI equipment under construction.F19NOTE 8 – GOODWILLIn September of 2014, Zhong Chuan Shi Xun acquired a 100% interest in Zhong Chuan Rui You for a consideration of $7,391,894 (RMB48,000,000). Zhong Chuan RuiYou is primarily engaged in on train WiFi business, deploying WiFi equipment on trains and providing passengers with entertainment and information services ontrains. The book value of the identifiable net assets of Zhong Chuan Rui You was $151,958 (RMB963,000) and a goodwill of $7,239,936 was recorded.NOTE 9 – ACCRUED LIABILITIES AND OTHER PAYABLESAt December 31, 2017 and 2016, accrued liabilities and other payables consisted of the following:December 31,December 31,20172016Deferred revenue$2,326,406$302,735Accrued payroll143,998316,458Other taxes payable3,544,469461,699Other payable852,384686,526Other loans6,095,6559,562,915$12,962,912$11,329,613Deferred revenue represents prepayments from customers for advertising service and is recognized as revenue when the advertising services are rendered.Other loans of $939,555 and $57,416, respectively, as of December 31, 2017 and 2016, are unsecured, bear daily interest at 0.04% and are repayable on demand.NOTE 10 – AMOUNTS DUE TO RELATED PARTIESAt December 31, 2017 and 2016, amounts due to related parties consisted of the following:December 31,December 31,Name of related party20172016Mr. Song Xuesong (“Mr. Song”) (1)$2,921,639$10,669,325C Media Limited (2)$$4,855,236Thumb Beijing Branch (3)$612,103$576,560Thumb Shenzhen Branch (3)$29,941$28,202(1) The Group’s CEO(2) C Media Limited, the parent company.(3) Thumb Beijing and Shenzhen Branch are controlled by the spouse of Mr. Song.Amounts due to related parties are shortterm in nature, noninterest bearing, unsecured and payable on demand.F20NOTE 11 – RETIREMENT AND WELFARE BENEFITSThe Group’s fulltime employees are entitled to staff welfare benefits including medical care, casualty, housing benefits, education benefits, unemployment insuranceand pension benefits through a PRC governmentmandated multiemployer defined contribution plan. The Group is required to accrue the employerportion forthese benefits based on certain percentages of the employees’ salaries. The total provision for such employee benefits of $170,227 and $353,033 during the yearsended December 31, 2017 and 2016, respectively, of which $23,392 and $30,455, respectively, was charged to cost of revenue, $48,957 and $97,408, respectively wascharged to selling and marketing expenses, $49,717 and $86,934, respectively, was charged to general and administrative expenses and $48,161 and $138,236,respectively was charged to research and development expenses. The Group is required to make contributions to the plan out of the amounts accrued for all staffwelfare benefits except for education benefits. The PRC government is responsible for the staff welfare benefits including medical care, casualty, housing benefits,unemployment insurance and pension benefits to be paid to these employees.NOTE 12 – STATUTORY RESERVESAs stipulated by the relevant law and regulations in the PRC, the Group’s subsidiaries and VIEs in the PRC are required to maintain a nondistributable statutorysurplus reserve. Appropriations to the statutory surplus reserve are required to be made at not less than 10% of profit after taxes as reported in the subsidiaries’statutory financial statements prepared under the PRC GAAP. Once appropriated, these amounts are not available for future distribution to owners or shareholders.Once the general reserve is accumulated to 50% of the subsidiaries’ registered capital, the subsidiaries can choose not to provide more reserves. The statutoryreserve may be applied against prior year losses, if any, and may be used for general business expansion and production and increase in registered capital of thesubsidiaries. The Group allocated $Nil to statutory reserves during the years ended December 31, 2017 and 2016, respectively. The statutory reserves cannot betransferred to the Company in the form of loans or advances and are not distributable as cash dividends except in the event of liquidation.NOTE 13 – COMMITMENTS AND CONTINGENCIESOperating leasesWe have entered into operating lease agreements primarily for our office spaces in China. These leases expire through 2018 and are renewable upon negotiation.Future minimum rental payment required under the Office Lease is as follows:Year ending December 31:Amount2018$122,138F21Contingencies(a) Litigation with Shanghai Fusheng Weier Intelligent Control Technology Co., Ltd.On January 22, 2016, Zhong Chuan Rui You and Shanghai Fusheng Weier Intelligent Control Technology Co., Ltd. (“Fusheng Weier”) signed a contract forequipment of $1,652,842 (RMB10,800,000). Since Zhong Chuan Rui You did not make the payments of $1,126,381 (RMB7,360,000) on the due dates, Fusheng Weierfiled a lawsuit against Zhong Chuan Rui You in Shanghai Xuhui District People’s Court on October 8, 2016. On March 9, 2017, Xuhui District People’s Court issuedthe verdict requiring Zhong Chuan Rui You to pay the overdue debts. In August 2017, C Media Limited made the payment of $512,075 (RMB3,346,000). Theremaining balance has been accrued in accounts payable. The payment schedule for the remaining balance is being negotiated by the two parties. On February 5,2018, a hearing was held adding Zhong Chuan Shi Xun as a defendant. The Group plans to settle the remaining balance within one year.(b) Lawsuit with Gansu Jinlun Culture Media Co., Ltd.On August 22, 2014, Zhong Chuan Rui You and Gansu Jinlun Culture Media Co., Ltd. (“Gansu Jinlun”) signed a “Lanzhou Railway Bureau Airconditioned Train WiFi Network System Advertising Operation Rights Agreement” for advertising on 72 trains of $1,467,880 (RMB9,604,633). Due to the dispute on the projectimplementation, Zhong Chuan Rui You did not pay the advertising fee. On August 23, 2017, Gansu Jinlun filed a lawsuit with Gansu Intermediate People’s Court. OnDecember 19, 2017, Gansu Intermediate People’s Court issued a verdict, ruling that Zhong Chuan Rui You settle the overdue advertising fee. Since only 18 out of 72trains have been installed with Wifi network system, Zhong Chuan Rui You disputed and appealed to the verdict. The next court trial date has not yet beendetermined.C Media and Gansu Jinlun are negotiating a potential settlement to resume the contract. According to the legal counsel, it is probable that the settlement will amountto approximately $459,000 (RMB3,000,000); therefore, this amount has been accrued in accounts payable.(c) Litigation with Shenzhen Hua Xun Fang Zhou Technology Co., Ltd.On June 16, 2015, Zhong Chuan Rui You signed a cooperation agreement with Shenzhen Hua Xun Fang Zhou Technology Co., Ltd. (“Shenzhen Hua Xun”) andXuesong Song, a major shareholder of C Media Limited. Pursuant to this agreement, Zhong Chuan Rui You procures equipment from Shenzhen Hua Xun. XuesongSong acts as a joint liability guarantor for the entire debts of Zhong Chuan Rui You under this agreement. As Zhong Chuan Rui You did not make the payments onthe due dates, Shenzhen Hua Xun filed a lawsuit with Shenzhen Baoan District People’s Court on May 31, 2016. On November 1, 2016, Zhong Chuan Rui You,Xuesong Song and Shenzhen Hua Xun reached a settlement in Shenzhen Baoan District People’s Court to settle $1,735,389 (RMB11,355,000) in four instalments. OnDecember 30, 2017, the debt was assigned to C Media Limited.NOTE 14 – SUBSEQUENT EVENTThe Group has evaluated all events or transactions that occurred after December 31, 2017 through May 25, 2018, which is the date that the financial statements wereavailable to be issued.F22EX1.1 2 f20f2017ex11_luokung.htm AMENDED AND RESTATED MEMORANDUM OF ASSOCIATION AND ARTICLES OF ASSOCIATION OF LUOKUNGTECHNOLOGY CORP., DATED AUGUST 20, 2018, AND AS CURRENTLY IN EFFECTExhibit 1.1BC NO: 1553620British Virgin IslandsThe BVI Business Companies Act, 2004(No. 16 of 2004)Memorandum of AssociationandArticles of AssociationofLuokung Technology Corp.Incorporated the 24th day of October, 2009Amended and Restated the 11th Day of December 2009Amended and Restated the 17th Day of December 2009Amended and Restated the 25th Day of March 2010Amended and Restated the 21st day of May 2018Amended and restated the 17 August 2018Amended and restated the 21 August 2018Portcullis (BVI) LimitedPortcullis Chambers4th Floor Ellen Skelton Building3076 Sir Francis Drake HighwayRoad Town, TortolaBritish Virgin IslandsTERRITORY OF THE BRITISH VIRGIN ISLANDSTHE BVI BUSINESS COMPANIES ACT, 2004(No. 16 of 2004)MEMORANDUM OF ASSOCIATIONOFLuokung Technology Corp.NAME1.The name of the Company is Luokung Technology Corp.TYPE OF COMPANY2.The Company is a company limited by shares.REGISTERED OFFICE3.The first Registered Office of the Company is the offices of Portcullis TrustNet (BVI) Limited, Portcullis TrustNet Chambers, P.O. Box 3444, Road Town,Tortola, British Virgin Islands, the office of the registered agent.3.1The current Registered Office of the Company is Portcullis Chambers, 4th Floor Ellen Skelton Building, 3076 SirFrancis Drake Highway, Road Town,Tortola, British Virgin Islands VG1110.REGISTERED AGENT4.The first Registered Agent of the Company is Portcullis TrustNet (BVI) Limited of Portcullis TrustNet Chambers, P.O. Box 3444, Road Town, Tortola,British Virgin Islands.4.1The current Registered Agent of the Company is Portcullis (BVI) Ltd of Portcullis Chambers, 4th Floor Ellen Skelton Building, 3076 Sir Francis DrakeHighway, Road Town, Tortola, British Virgin Islands VG1110.AUTHORISED NUMBER OF SHARES5.The Company is authorised to issue a maximum of 251,000,000 shares.CLASSES, NUMBER AND PAR VALUE OF SHARES6.As at the date of adoption of this memorandum, the Company is authorised to issue (a) 250,000,000 ordinary shares without par value (“OrdinaryShares”); and (b) 1,000,000 preferred shares without par value (“Preferred Shares”).FRACTIONAL SHARES7.The Company may issue fractions of a share and a fractional share shall have the same corresponding fractional liabilities, limitations, preferences,privileges, qualifications, restrictions, rights and other attributes of a whole share of the same class or series of shares.RIGHTS, PRIVILEGES, RESTRICTIONS AND CONDITIONS ATTACHING TO SHARES8.(1)Subject to the memorandum and articles of association (and, for greater clarity, without prejudice to any special rights conferred thereby on theholders of any other shares), an Ordinary Share of the Company confers on the holder;(a)the right to one vote at a meeting of the members of the Company or on any Resolution of Members;(b)the right to an equal share in any Distribution paid by the Company; and(c)the right to an equal share in the distribution of the surplus assets of the Company on a winding up.(2)Subject to the memorandum and articles of association (and, for greater clarity, without prejudice to any special rights conferred thereby on theholders of any other shares), a Preferred Share of the Company confers on the holder;(a)the right to 399 votes at a meeting of the members of the Company or on any Resolution of Members;(b)the right to an equal share in any Distribution paid by the Company;(c)the right to an equal share in the distribution of the surplus assets of the Company on its liquidation.(d)be freely transferable, in whole or in part, by Mr. Xuesong Song to any third party through one or more Private Transactions, subject toApplicable Law; and(e)be freely transferable, in whole or in part, by Mr. Xuesong Song to any third party through one or more Public Transactions, subject to ApplicableLaw and Automatic Conversion of such Preferred Share(s) into Ordinary Share(s).(3)The directors may at their discretion by resolution of directors redeem, purchase or otherwise acquire all or any of the shares in the Companysubject to the Articles..VARIATION OF CLASS RIGHTS9.If at any time the issued shares are divided into different classes or series of shares, the rights attached to any class or series (unless otherwise providedby the terms of issue of the shares of that class or series) may, whether or not the Company is being wound up, be varied with the consent in writing of theholders of not less than threefourths of the issued shares of that class or series and of the holders of not less than threefourths of the issued shares ofany other class or series of shares which may be affected by such variation.RIGHTS NOT VARIED BY THE ISSUE OF SHARES PARI PASSU10.The rights conferred upon the holders of the shares of any class issued with preferred or other rights shall not, unless otherwise expressly provided by theterms of issue of the shares of that class, be deemed to be varied by the creation or issue of further shares ranking pari passu therewith.CAPACITY AND POWERS11.Subject to the Act, any other British Virgin Islands legislation and paragraph 12 below the Company has, irrespective of corporate benefit:(a)full capacity to carry on or undertake any business or activity, do any act or enter into any transaction;(b)for the purposes of paragraph (a), full rights, powers and privileges; and(c)full powers to issue shares with preemptive rights, subject to the Articles.2LIMITATIONS ON THE COMPANY’S BUSINESS12.For the purposes of section 9(4) of the Act the Company may not;(a)carry on banking or trust business, unless it is licensed to do so under the Banks and Trust Companies Act, 1990;(b)carry on business as an insurance or reinsurance company, insurance agent or insurance broker, unless it is licensed under the Insurance Act1994;(c)carry on business of company management, unless it is licensed under the Company Management Act, 1990;(d)carry on the business of providing the registered office or the registered agent for companies incorporated in the British Virgin Islands;(e)carry on the business as a mutual fund, manager of mutual funds or administrator of mutual funds unless it is recognized or licenced as the casemay be under the Mutual Funds Act 1996; or(f)carry on any other business that gives rise to a licencing requirement under any law for the time being in force in the British Virgin Islands unlessit is licenced, regulated, recognised or otherwise approved pursuant to such law.REGISTERED SHARES AND PROHIBITION ON ISSUE OF BEARER SHARES13.Shares in the Company may only be issued as registered shares. The issue of shares to bearer is prohibited.PROHIBITION ON EXCHANGE AND CONVERSION OF REGISTERED SHARES TO BEARER SHARES14.The exchange or conversion of registered shares to bearer shares is prohibited.TRANSFER OF REGISTERED SHARES15.Subject to the provisions of the Articles the Company may upon receipt of an instrument of transfer enter the name of the transferee in the register ofmembers subject to the prior or simultaneous approval of the Company as evidenced by a resolution of directors or by a resolution of members. Subject toany resolution of the members to the contrary, the directors may resolve by resolution of directors to refuse or delay the registration of the transfer forreasons that shall be specified in the resolution of directors.AMENDMENT OF MEMORANDUM AND ARTICLES OF ASSOCIATION16.1The Company may amend its Memorandum or Articles by a resolution of members or by a resolution of directors provided that the directors shall not havethe power to amend the Memorandum or Articles;(a)to restrict the rights or powers of the members to amend the Memorandum or Articles;(b)to change the percentage of members required to pass a resolution to amend the Memorandum or Articles;(c)in circumstances where the Memorandum or Articles cannot be amended by the members; or(d)to Clauses 8, 9, 10 or this Clause 12.16.2No amendment may be made to Regulation 76 of the Articles unless approved by an affirmative vote of the holders of 66 2/3 percent or more of theoutstanding votes of the shares entitled to vote thereon.3DEFINITIONS17.The meanings of words in this Memorandum are as defined in the Articles.We, Portcullis TrustNet (BVI) Limited of Portcullis TrustNet Chambers, P.O. Box 3444, Road Town, Tortola, British Virgin Islands for the purpose ofincorporating a BVI Business Company under the laws of the British Virgin Islands hereby sign this Memorandum of Association the 27th day of October,2009.Incorporator/s/ Nicole WheatleyPortcullis TrustNet (BVI) LimitedPortcullis TrustNet ChambersP.O. Box 3444Road Town, TortolaBritish Virgin Islands(Sgd. Nicole Wheatley)4TERRITORY OF THE BRITISH VIRGIN ISLANDSTHE BVI BUSINESS COMPANIES ACT, 2004(No. 16 of 2004)ARTICLES OF ASSOCIATIONOFLuokung Technology Corp.PRELIMINARY1.In these Articles, if not inconsistent with the subject or context, the words and expressions standing in the first column of the following table shall bear themeanings set opposite them respectively in the second column thereof.WordsMeaningApplicable Lawall Laws, including those of a jurisdiction in or outside of the United States, applicable to the Private orPublic Transactions.Actthe BVI Business Companies Act, 2004 (No 16 of 2004.) including any modification, extension, reenactment or renewal thereof and any regulations made thereunder.Articlesthese Articles of Association as originally framed or as from time to time amended.Automatic Conversioneach Preferred Share shall be automatically converted at any time after issue and without the payment ofany additional sum into an equal number of fully paid Ordinary Shares upon the conclusion of anytransfer by Mr. Xuesong Song to any third party through one or more Public Transactions.Designated Stock Exchangeeither the Nasdaq National Stock Market, Inc. or such other exchange or quotation bureau on which, theCompany’s Securities are listed or traded; provided that until the Securities are listed on any such“Exchange” the rules of any such Designated Stock Exchange shall be inapplicable to these Articles.directora director of the Company.distributionin relation to a distribution by a company to a member, means(i)the direct or indirect transfer of an asset, other than the Company’s own shares, to or forthe benefit of the member or(ii)the incurring of a debt to or for the benefit of a member,in relation to shares held by a member, and whether by means of a purchase of an asset, the purchase,redemption or other acquisition of shares, a transfer of indebtedness or otherwise, and includes adividend.Independent Directora person who meets the then current requirements for “independence” of the applicable rules andregulations of the U.S. Securities and Exchange Commission and the Designated Stock Exchange.5member or shareholderin relation to the Company, means a person whose name is entered in the register of members as theholder of one or more shares, or fractional shares, in the Company.Memorandumthe Memorandum of Association of the Company as originally framed or as from time to time amended.Mr. Xuesong Songthe founder, a director and Chairman of LK Technology Ltd.Ordinary Sharesissued or unissued ordinary shares of no par value of the Company having the rights, preferences andprivileges set out in the MemorandumPersonAn individual, a corporation, a trust, trustee, the estate of a deceased individual, a partnership or anunincorporated association of persons.Preferred Sharesissued or unissued preferred shares of no par value of the Company having the rights, preferences andprivileges set out in the MemorandumPrivate Transactionstransactions that are not considered as a Public Transaction.Public Transactionstransactions through any national securities exchanges and/or through the automated quotation systemincluding but not limited to NASDAQ, NYSE (including NYSE American) or OTC Markets, or anytransaction executed by the broker or with a market maker.Related Party(a) any director, officer and employee of the Company; (b) any family member of such director, officer andemployee; and (c) any entity (e.g. a corporation, partnership, or trust) controlled by or set up for thebenefit of a director, officer or employee, or a family member of such director, officer or employee.Relevant SystemA facility for the electronic transfer of uncertificated securities administered by The Depository TrustCompany or such other Person regulated by the SEC.resolution of directors(a)A resolution approved at a duly convened and constituted meeting of directors of the Companyor of a committee of directors of the Company by the affirmative vote of a simple majority of thedirectors present at the meeting who voted and did not abstain; or(b)a resolution consented to in writing by a simple majority of the directors or of all members of thecommittee, as the case may be;except that where a director is given more than one vote, he shall be counted by the number ofvotes he casts for the purpose of establishing a majority.resolution of membersSubject to the provisions of the Memorandum and Articles means:(a)A resolution approved at a duly convened and constituted meeting of the members of theCompany by the affirmative vote of(i)a majority of in excess of 50% of the votes of the shares entitled to vote and voting onthe resolution, or(ii)a majority of in excess of 50% of the votes of each class or series of shares entitled tovote as a class or series and voting on the resolution and a majority of in excess of 50%of the votes of the remaining shares entitled to vote and voting on the resolution; or6(b)a resolution consented to in writing by(i)an absolute majority of the votes of shares entitled to vote thereon, or(ii)an absolute majority of the votes of each class or series of shares entitled to votethereon as a class or series and of an absolute majority of the votes of the remainingshares entitled to vote thereon.SealAny Seal which has been duly adopted as the common seal of the Company.SECThe United States Securities and Exchange Commission.Securitiesshares and debt obligations of every kind, and options, warrants and rights to acquire shares, or debtobligations.SharesOrdinary Shares and/or Preferred Shares, as the case may be.solvency testa company satisfies the solvency test if;(i)the value of the company’s assets exceeds its liabilities, and(ii)the company is able to pay its debts as they fall due.treasury sharesshares in the Company that were previously issued but were repurchased, redeemed or otherwiseacquired by the Company and not cancelled.2.“Written” or any term of like import includes words typewritten, printed, painted, engraved, lithographed, photographed or represented or reproduced byany mode of reproducing words in a visible form, including telex, facsimile, telegram, cable or other form of writing produced by electronic communication.3.Save as aforesaid any words or expressions defined in the Act shall bear the same meaning in these Articles.4.Whenever the singular or plural number, or the masculine, feminine or neuter gender is used in these Articles, it shall equally, where the context admits,include the others.5.A reference in these Articles to voting in relation to shares shall be construed as a reference to voting by members holding the shares except that it is thevotes allocated to the shares that shall be counted and not the number of members who actually voted and a reference to shares being present at a meetingshall be given a corresponding construction.6.A reference to money in these Articles is, unless otherwise stated, a reference to the currency in which shares in the Company shall be issued according tothe provisions of the Memorandum.7REGISTERED SHARES7.Every member holding registered shares in the Company shall be entitled to a certificate signed by a director or officer of the Company or such otherperson who may be authorised from time to time by resolution of directors or under the Seal, with or without the signature of any director of the Company,specifying the share or shares held by him and the signature of the director or officer or person so authorised and the Seal may be facsimiles.8.Any member receiving a share certificate for registered shares shall indemnify and hold the Company and its directors and officers harmless from any lossor liability which it or they may incur by reason of any wrongful or fraudulent use or representation made by any person by virtue of the possessionthereof. If a share certificate for registered shares is worn out or lost it may be renewed on production of the worn out certificate or on satisfactory proof ofits loss together with such indemnity as may be required by a resolution of directors.9.If several persons are registered as joint holders of any shares, any one of such persons may give an effectual receipt for any distribution payable inrespect of such shares.10.Nothing in these Articles shall require title to any shares or other Securities to be evidenced by a certificate if the Act and the rules of the Designated StockExchange permit otherwise.SHARES AND ISSUED SHARES11.Subject to the provisions of these Articles and, if applicable, the rules of the Designated Stock Exchange, and any resolution of members, the directors ofthe Company may, without limiting or affecting any rights previously conferred on the holders of any existing shares or class or series of shares, offer, allot,grant options over or otherwise dispose of shares to such persons, at such times and upon such terms and conditions as the Company may by resolutionof directors determine. The directors shall not issue more shares than the maximum number provided for in the Memorandum.12.The Company may issue fully paid, partly paid or nil paid shares as well as bonus shares. A partly paid or nil paid share or a share issued for a promissorynote or other written obligation for payment of a debt may be issued subject to forfeiture in the manner prescribed in these Articles.13.Shares in the Company may be issued for consideration in any form, including money, a promissory note or other obligation to contribute money orproperty, real property, personal property (including goodwill and knowhow) services rendered or a contract for future services and the amount of suchconsideration shall be determined by resolution of directors, except that in the case of shares with par value, the amount shall not be less than the parvalue, and in the absence of fraud the decision of the directors as to the value of the consideration received by the Company in respect of the issue isconclusive unless a question of law is involved.14.Before issuing shares for a consideration other than money, the directors shall pass a resolution stating;(a)the amount to be credited for the issue of the shares;(b)their determination of the reasonable present cash value of the nonmoney consideration for the issue; and(c)that, in their opinion, the present cash value of the nonmoney consideration for the issue is not less than the amount to be credited for the issueof the shares.15.A share issued by the Company upon conversion of, or in exchange for, another share or a debt obligation or other security in the Company, shall betreated for all purposes as having been issued for money equal to the consideration received or deemed to have been received by the Company in respectof the other share, debt obligation or security.16.Treasury shares may be disposed of by the Company on such terms and conditions (not otherwise inconsistent with these Articles) as the Company mayby resolution of directors determine.17.Subject to these Articles, the Company may purchase, redeem or otherwise acquire and hold its own shares save that the Company may not purchase,redeem or otherwise acquire its own shares without the consent of the member whose shares are to be purchased, redeemed or otherwise acquired unlessthe Company is permitted by the Act or any other provision in the Memorandum or Articles to purchase, redeem or otherwise acquire the shares withouttheir consent.818.No purchase, redemption or other acquisition of shares shall be made unless the directors determine by resolution of the directors that immediately after thepurchase, redemption or other acquisition the value of the Company’s assets will exceed its liabilities and the Company will be able to pay its debts as theyfall due.19.Sections 60 (Process for acquisition of own shares), 61 (Offer to one or more shareholders) and 62 (Shares redeemed otherwise than at the option ofcompany) of the Act shall not apply to the Company.20.A determination by the directors under Article 18 is not required;(a)the Company redeems a share or shares pursuant to a right of a member to have his shares redeemed or to have his shares exchanged for moneyor other property of the Company; or(b)by virtue of the provisions of Section 179 of the Act.21.Shares that the Company purchases, redeems or otherwise acquires pursuant to Article 17 may be cancelled or held as treasury shares except to the extentthat such shares are in excess of 80 percent of the issued shares of the Company in which case they shall be cancelled but they shall be available forreissue.22.Shares in the Company shall only be held as treasury shares where the directors of the Company resolve as such and the number of shares acquired, whenaggregated with shares of the same class already held by the Company as treasury shares, does not exceed 50% of the shares of that class previouslyissued by the Company, excluding shares that have been cancelled. All rights and obligations attaching to a treasury share are suspended and shall not beexercised by or against the Company while it holds the share as a treasury share. Treasury shares may be reissued by the Company as new shares.23.The Company shall keep a register of members containing;(a)the names and addresses of the persons who hold registered shares in the Company;(b)the number of each class and series of registered shares held by each member;(c)the date on which the name of each member was entered in the register of members;(d)the date on which any person ceased to be a member; and(e)such other information as may be prescribed pursuant to the Act.24.The register of members may be in any such form as the directors may approve but if it is in magnetic, electronic or other data storage form, the companymust be able to produce legible evidence of its contents.25.The original or a copy of the register of members shall be kept at the registered office of the Company or at the office of the registered agent of theCompany.26.A share is deemed to be issued when the name of the member is entered in the register of members.27.Subject to the Act and the rules of the Designated Stock Exchange, the board of directors without further consultation with the holders of any shares orSecurities may resolve that any class or series of shares or other Securities from time to time in issue or to be issued (including shares in issue at the date ofthe adoption of these Articles) may be issued, held, registered and converted to uncertificated form.28.Conversion of shares held in certificated form into shares held in uncertificated form, and vice versa, may be made in such manner as the board of directors,in its absolute discretion, may think fit. The Company or any duly authorised transfer agent (a “Transfer Agent”) shall enter on the register of membershow many shares are held by each member in uncertificated form and in certificated form and shall maintain the register of members. Notwithstanding anyprovision of these Articles, a class or series of shares shall not be treated as two classes by virtue only of that class or series comprising both certificatedshares and uncertificated Shares or as a result of any provision of these Articles which apply only in respect of certificated or uncertificated shares.9MORTGAGES AND CHARGES OF REGISTERED SHARES29.Members may mortgage or charge their registered shares in the Company with such mortgage or charge being evidenced in writing and signed by, or withthe authority of the registered holder of a registered share to which the mortgage or charge relates. The Company shall give effect to the terms of any validmortgage or charge except insofar as it may conflict with any requirements herein contained for consent to the transfer of shares.30.In the case of the mortgage or charge of registered shares there may be entered in the share register of the Company at the request of the registered holderof such shares(a)a statement that the shares are mortgaged or charged;(b)the name of the mortgagee or chargee; and(c)the date on which the aforesaid particulars are entered in the share register.31.Where particulars of a mortgage or charge are entered in the register of members, such particulars shall be cancelled(a)with the written consent of the named mortgagee or chargee or anyone authorized to act on his behalf; or(b)upon evidence satisfactory to the directors of the discharge of the liability secured by the mortgage or charge and the issue of such indemnities asthe directors shall consider necessary or desirable.32.Whilst particulars of a mortgage or charge over registered shares are entered in the register of members pursuant to the preceding articles no transfer ofany share comprised therein shall be effected without the written consent of the named mortgagee or chargee or anyone authorized to act on his behalf.FORFEITURE33.When shares not fully paid on issue or issued for a promissory note or other written obligation for payment of a debt have been issued subject toforfeiture, the following provisions shall apply.34.Written notice specifying a date for payment to be made and the shares in respect of which payment is to be made shall be served on the member whodefaults in making payment pursuant to a promissory note or other written obligations to pay a debt.35.The written notice specifying a date for payment shall(a)name a further date not earlier than the expiration of 14 days from the date of service of the notice on or before which payment required by thenotice is to be made; and(b)contain a statement that in the event of nonpayment at or before the time named in the notice the shares, or any of them, in respect of whichpayment is not made will be liable to be forfeited.36.Where a written notice has been issued and the requirements of the notice have not been complied with within the prescribed time, the directors may at anytime before tender of payment forfeit and cancel the shares to which the notice relates.37.The Company is under no obligation to refund any moneys to the member whose shares have been forfeited and cancelled pursuant to these provisions.Upon forfeiture and cancellation of the shares the member is discharged from any further obligation to the Company with respect to the shares forfeitedand cancelled.10LIEN38.The Company shall have a first and paramount lien on every share issued for a promissory note or for any other binding obligation to contribute money orproperty or any combination thereof to the Company, and the Company shall also have a first and paramount lien on every share standing registered in thename of a member, whether singly or jointly with any other person or persons, for all the debts and liabilities of such member or his estate to the Company,whether the same shall have been incurred before or after notice to the Company of any interest of any person other than such member, and whether thetime for the payment or discharge of the same shall have actually arrived or not, and notwithstanding that the same are joint debts or liabilities of suchmember or his estate and any other person, whether a member of the Company or not. The Company’s lien on a share shall extend to all distributionspayable thereon. The directors may at any time either generally, or in any particular case, waive any lien that has arisen or declare any share to be wholly orin part exempt from the provisions of this Article.39.In the absence of express provisions regarding sale in the promissory note or other binding obligation to contribute money or property, the Company maysell, in such manner as the directors may by resolution of directors determine, any share on which the Company has a lien, but no sale shall be made unlesssome sum in respect of which the lien exists is presently payable nor until the expiration of twentyone days after a notice in writing, stating and demandingpayment of the sum presently payable and giving notice of the intention to sell in default of such payment, has been served on the holder for the timebeing of the share.40.The net proceeds of the sale by the Company of any shares on which it has a lien shall be applied in or towards payment of discharge of the promissorynote or other binding obligation to contribute money or property or any combination thereof in respect of which the lien exists so far as the same ispresently payable and any residue shall (subject to a like lien for debts or liabilities not presently payable as existed upon the share prior to the sale) bepaid to the holder of the share immediately before such sale. For giving effect to any such sale the directors may authorize some person to transfer theshare sold to the purchaser thereof. The purchaser shall be registered as the holder of the share and he shall not be bound to see to the application of thepurchase money, nor shall his title to the share be affected by any irregularity or invalidity in the proceedings in reference to the sale.TRANSFER OF SHARES41.Registered shares in the Company are transferred by a written instrument of transfer signed by the transferor and containing the name and address of thetransferee. The instrument of transfer shall be signed by the transferee if registration as a holder of the share shall impose a liability to the Company on thetransferee. The instrument of transfer of a registered share shall be sent to the Company for registration.42.The board of directors may resolve that interests in shares in the form of depositary receipts may be transferred or otherwise dealt with in accordance withthe regulations and practices instituted by the operator of the Relevant System and any holder of interests in shares shall be entitled to transfer suchinterests by means of such Relevant System and the operator of the Relevant System shall act as agent of the holders of such interests for the purposes ofthe transfer of those interests.43.The register of members may be closed at such times and for such periods as the board of directors may from time to time determine, upon notice beinggiven by advertisement in such newspapers as may be required by the Act and the practice of the Designated Stock Exchange.44.The transfer of a registered share is effective when the name of the transferee is entered on the register of members.45.If the directors of the Company are satisfied that an instrument of transfer relating to shares has been signed but that the instrument has been lost ordestroyed, they may resolve;(a)to accept such evidence of the transfer of the shares as they consider appropriate; and(b)that the transferee’s name should be entered in the register of members notwithstanding the absence of the instrument of transfer.46.The Company must on the receipt of an instrument of transfer from the transferor or transferee of a registered share in the Company enter the name of thetransferee of the share in the register or members unless the directors, if permitted by the Memorandum or these Articles, resolve by resolution of directorsto refuse or delay the registration of the transfer for reasons that shall be specified in the resolution of directors.11TRANSMISSION OF SHARES47.The personal representative of a deceased member may transfer a share even though the personal representative is not a member at the time of the transfer.48.The personal representative, executor or administrator of a deceased member, the guardian of an incompetent member or the trustee of a bankrupt membershall be the only person recognized by the Company as having any title to his share but they shall not be entitled to exercise any rights as a member of theCompany until they have proceeded as set forth in the next following three Articles.49.The production to the Company of any document which is evidence of probate of the will, or letters of administration of the estate, or confirmation asexecutor, of a deceased member or of the appointment of a guardian of an incompetent member or the trustee of a bankrupt member shall be accepted by theCompany even if the deceased, incompetent or bankrupt member is domiciled outside the British Virgin Islands if the document evidencing the grant ofprobate or letters of administration, confirmation as executor, appointment as guardian or trustee in bankruptcy is issued by a foreign court which hadcompetent jurisdiction in the matter. For the purpose of establishing whether or not a foreign court had competent jurisdiction in such a matter the directorsmay obtain appropriate legal advice. The directors may also require an indemnity to be given by the executor, administrator, guardian or trustee inbankruptcy.50.The Company may enter in the register of members the name of any person becoming entitled by operation of law or otherwise to a share or shares inconsequence of the death, incompetence or bankruptcy upon such evidence being produced as may reasonably be required by the directors.51.Any person who has become entitled to a share or shares in consequence of the death, incompetence or bankruptcy of any member may, instead of beingregistered himself, request in writing that some person to be named by him be registered as the transferee of such share or shares and such request shalllikewise be treated as if it were a transfer.52.What amounts to incompetence on the part of a person is a matter to be determined by the court having regard to all the relevant evidence and thecircumstances of the case.REDUCTION OR INCREASE IN AUTHORISED AND UNISSUED SHARES48.The Company may amend the Memorandum to increase or reduce the maximum number of shares the Company is authorised to issue and may in respect ofany unissued shares increase or reduce the number of such shares, or effect any combination of the foregoing.49.The Company may(1)(a) divide its shares, including issued shares, into a larger number of shares; or (b) combine its shares, including issued shares, into a smallernumber of shares.(2)A division or combination of shares, including issued shares, of a class or series shall be for a larger or smaller number, as the case may be, ofshares in the same class or series.(3)A company shall not divide its shares under subsection (1)(a) or (2) if it would cause the maximum number of shares that the Company isauthorised to issue by its memorandum to be exceeded.(4)Where shares are divided or combined under this article, the aggregate par value of the new shares must be equal to the aggregate par value of theoriginal shares.MEETINGS AND CONSENTS OF MEMBERS50.The directors of the Company may convene meetings of the members of the Company at such times and in such manner and places within or outside theBritish Virgin Islands as the directors consider necessary or desirable. The Company may hold an annual general meeting, but shall not (unless required bythe applicable rules of the Designated Stock Exchange for so long as the Company’s Securities are listed or traded on the Designated Stock Exchange) beobliged to hold an annual general meeting.51.Upon the written request of members holding 30 percent or more of the outstanding voting shares in the Company the directors shall convene a meeting ofmembers.1252.The directors shall give not less than 7 days notice of meetings of members to those persons whose names on the date the notice is given appear asmembers in the share register of the Company and are entitled to vote at the meeting.53.The directors may fix the date notice is given of a meeting of members as the record date for determining those shares that are entitled to vote at themeeting.54.A meeting of members may be called on short notice:(a)if members holding not less than 90 percent of the total number of shares entitled to vote on all matters to be considered at the meeting, or 90percent of the votes of each class or series of shares where members are entitled to vote thereon as a class or series together with not less than a90 percent majority of the remaining votes, have agreed to short notice of the meeting, or(b)if all members holding shares entitled to vote on all or any matters to be considered at the meeting have waived notice of the meeting and for thispurpose presence at the meeting shall be deemed to constitute waiver.55.The inadvertent failure of the directors to give notice of a meeting to a member, or the fact that a member has not received notice, does not invalidate themeeting.56.A member may be represented at a meeting of members by a proxy who may speak and vote on behalf of the member.57.The instrument appointing a proxy shall be produced at the place appointed for the meeting before the time for holding the meeting at which the personnamed in such instrument proposes to vote.58.An instrument appointing a proxy shall be in substantially the following form or such other form as the Chairman of the meeting shall accept as properlyevidencing the wishes of the member appointing the proxy.(Name of Company)I/Webeing a member of the aboveCompany withshares HEREBY APPOINTofor failing himofto be my/our proxy to vote for me/us at the meeting of members to be held on the dayofand at any adjournment thereof.(Any restrictions on voting to be inserted here.)Signed this day ofMember59.The following shall apply in respect of joint ownership of shares:a.if two or more persons hold shares jointly each of them may be present in person or by proxy at a meeting of members and may speak as a member;b.if only one of the joint owners is present in person or by proxy he may vote on behalf of all joint owners, andc.if two or more of the joint owners are present in person or by proxy they must vote as one.60.A member shall be deemed to be present at a meeting of members if he participates by telephone or other electronic means and all members participating inthe meeting are able to hear each other.61.A meeting of members is duly constituted if, at the commencement of the meeting, there are present in person or by proxy not less than 50 percent of thevotes of the shares or class or series of shares entitled to vote on resolutions of members to be considered at the meeting. If a quorum be present,notwithstanding the fact that such quorum may be represented by only one person then such person may resolve any matter and a certificate signed bysuch person accompanied where such person be a proxy by a copy of the proxy form shall constitute a valid resolution of members.1362.If within two hours from the time appointed for the meeting a quorum is not present, the meeting, if convened upon the requisition of members, shall bedissolved; in any other case it shall stand adjourned to the next business day at the same time and place or to such other time and place as the directorsmay determine, and if at the adjourned meeting there are present within one hour from the time appointed for the meeting in person or by proxy not lessthan one third of the votes of the shares or each class or series of shares entitled to vote on the resolutions to be considered by the meeting, those presentshall constitute a quorum but otherwise the meeting shall be dissolved.63.At every meeting of members, the Chairman of the Board of Directors shall preside as chairman of the meeting. If there is no Chairman of the Board ofDirectors or if the Chairman of the Board of Directors is not present at the meeting, the members present shall choose some one of their number to be thechairman. If the members are unable to choose a chairman for any reason, then the person representing the greatest number of voting shares present inperson or by prescribed form of proxy at the meeting shall preside as chairman failing which the oldest individual member or representative of a memberpresent shall take the chair.64.The chairman may, with the consent of the meeting, adjourn any meeting from time to time, and from place to place, but no business shall be transacted atany adjourned meeting other than the business left unfinished at the meeting from which the adjournment took place.65.At any meeting of the members the chairman shall be responsible for deciding in such manner as he shall consider appropriate whether any resolution hasbeen carried or not and the result of his decision shall be announced to the meeting and recorded in the minutes thereof. If the chairman shall have anydoubt as to the outcome of any resolution put to the vote, he shall cause a poll to be taken of all votes cast upon such resolution, but if the chairman shallfail to take a poll then any member present in person or by proxy who disputes the announcement by the chairman of the result of any vote mayimmediately following such announcement demand that a poll be taken and the chairman shall thereupon cause a poll to be taken. If a poll is taken at anymeeting, the result thereof shall be duly recorded in the minutes of that meeting by the chairman.66.Any person other than an individual shall be regarded as one member and subject to the specific provisions hereinafter contained for the appointment ofrepresentatives of such persons the right of any individual to speak for or represent such member shall be determined by the law of the jurisdiction where,and by the documents by which, the person is constituted or derives its existence. In case of doubt, the directors may in good faith seek legal advice fromany qualified person and unless and until a court of competent jurisdiction shall otherwise rule, the directors may rely and act upon such advice withoutincurring any liability to any member.67.Any person other than an individual which is a member of the Company may by resolution of its directors or other governing body authorize such personas it thinks fit to act as its representative at any meeting of the Company or of any class of members of the Company, and the person so authorized shall beentitled to exercise the same powers on behalf of the person which he represents as that person could exercise if it were an individual member of theCompany.68.The chairman of any meeting at which a vote is cast by proxy or on behalf of any person other than an individual may call for a notarially certified copy ofsuch proxy or authority which shall be produced within 7 days of being so requested or the votes cast by such proxy or on behalf of such person shall bedisregarded.69.Directors of the Company may attend and speak at any meeting of members of the Company and at any separate meeting of the holders of any class orseries of shares in the Company.70.An action that may be taken by the members at a meeting may also be taken by a resolution of members consented to in writing or by telex, telegram, cable,facsimile or other written electronic communication, without the need for any notice, but if any resolution of members is adopted otherwise than by theunanimous written consent of all members, a copy of such resolution shall forthwith be sent to all members not consenting to such resolution. The consentmay be in the form of counterparts, each counterpart being signed by one or more members.14DIRECTORS71.The first directors of the Company shall be appointed by the first registered agent of the Company and thereafter the directors shall be appointed byresolution of members, subject to Article 78, for such term as the members determine. A person shall not be appointed as a director unless he hasconsented in writing to be a director.72.The minimum number of directors shall be one and the maximum number shall be 20. Unless otherwise determined by the Company in a meeting ofshareholders and subject to the requirements of the Memorandum, the directors may by a Resolution of Directors, amend this Regulation 72 to change thenumber of directors. For as long as Securities of the Company are listed or traded on the Designated Stock Exchange, the directors shall include suchnumber of Independent Directors as applicable law, rules or regulations of the Designated Stock Exchange may require for a foreign private issuer as longas the Company is a foreign private issuer.73.Each director shall hold office for the term, if any, fixed by resolution of members or until his earlier death, resignation or removal.74.Where the Company has only one member who is an individual and that member is also the sole director of the Company, that sole member/director may, byinstrument in writing, nominate a person who is not disqualified from being a director of the Company under section 111(1) of the Act as a reserve directorof the Company to act in the place of the sole director in the event of his death.75.The nomination of a person as a reserve director of the Company ceases to have effect if;a.before the death of the sole member/director who nominated him;(i)he resigns as reserve director, or(ii)the sole member/director revokes the nomination in writing; orb.the sole member/director who nominated him ceases to be the sole member/director of the Company for any reason other than his death.76.A director may be removed from office, with or without cause, by a resolution of directors or a resolution of members. For the purposes of this Regulation76, “cause” means the willful and continuous failure by a director to substantially perform his duties to the Company (other than any such failure resultingfrom incapacity due to physical or mental illness) or the willful engaging by the director in gross misconduct materially and demonstrably injurious to theCompany. If a director is removed from office without cause by a resolution of the members, for the purposes of this Regulation, the resolution of memberswill require the affirmative vote of the holders of 66 2/3 percent or more of the outstanding votes of the shares entitled to vote thereon.77.A director may resign his office by giving written notice of his resignation to the Company and the resignation shall have effect from the date the notice isreceived by the Company or from such later date as may be specified in the notice. A director of the Company shall resign forthwith if he is, or becomes,disqualified to act as a director under the Act.78.The directors may at any time by resolution of directors appoint any person to be a director to fill a vacancy. There is a vacancy if a director dies orotherwise ceases to hold office as a director prior to the expiration of his term of office, where his term of office was fixed upon his appointment. Thedirectors may not appoint a director to fill a vacancy for a term exceeding the term that remained when the person who has ceased to be a director left orotherwise ceased to hold office.79.The Company shall keep a register of directors containing:a.the names and addresses of the persons who are directors of the Company or who have been nominated as reserve directors of the Company;b.the date on which each person whose name is entered in the register was appointed as a director of the Company or nominated as a reservedirector of the Company;c.the date on which each person named as a director ceased to be a director of the Company;d.the date on which the nomination of any person nominated as a reserve director ceased to have effect; ande.such other information as may be prescribed pursuant to the Act.1580.The original or a copy of any register of directors shall be kept at the office of the registered agent of the Company.81.The register of directors may be in any such form as the directors may approve but if it is in magnetic, electronic or other data storage form, the companymust be able to produce legible evidence of its contents.82.With the prior or subsequent approval by a resolution of members, the directors may, by a resolution of directors, fix the emoluments of directors withrespect to services to be rendered in any capacity to the Company.83.A director shall not require a share qualification and may be an individual or a company.POWERS OF DIRECTORS84.The business and affairs of the Company shall be managed by the directors who may pay all expenses incurred preliminary to and in connection with theformation and registration of the Company and may exercise all such powers of the Company as are not by the Act or by the Memorandum or theseArticles required to be exercised by the members of the Company, subject to any delegation of such powers as may be authorized by these Articles and tosuch requirements as may be prescribed by a resolution of members; but no requirement made by a resolution of members shall prevail if it be inconsistentwith these Articles nor shall such requirement invalidate any prior act of the directors which would have been valid if such requirement had not been made.Notwithstanding anything in Section 175 of the Act the directors shall have the power to sell, transfer, lease, exchange or otherwise dispose of more thanfifty percent of the assets of the Company without submitting a proposal to or obtaining the consent of the members of the Company.85.If the Company is a whollyowned subsidiary of a holding company a director may when exercising powers or performing duties as a director act in amanner which he believes is in the best interests of the holding company even though it may not be in the best interests of the Company.86.The directors may, by a resolution of directors, appoint any person, including a person who is a director, to be an officer or agent of the Company. Theresolution of directors appointing an agent may authorize the agent to appoint one or more substitutes or delegates to exercise some or all of the powersconferred on the agent by the Company.87.Every officer or agent of the Company has such powers and authority of the directors, including the power and authority to affix the Seal, as are set forth inthese Articles or in the resolution of directors appointing the officer or agent, except that no agent has any power or authority with respect to thefollowing;a.to amend the memorandum or articles;b.to change the registered office or agent;c.to designate committees of directors;d.to delegate powers to a committee of directors;e.to appoint or remove directors;f.to appoint or remove an agent;g.to fix emoluments of directors;h.to approve a plan of merger, consolidation or arrangement;i.to make a declaration of solvency for the purposes of section 198(1)(a) of the Act or to approve a liquidation plan;j.to make a determination under section 57(1) of the Act that the company will, immediately after a proposed distribution, satisfy the solvency test;ork.to authorise the Company to continue as a company incorporated under the laws of a jurisdiction outside the British Virgin Islands.1688.Any director which is a body corporate may appoint any person its duly authorized representative for the purpose of representing it at meetings of theBoard of Directors or with respect to unanimous written consents.89.The continuing directors may act notwithstanding any vacancy in their body, save that if their number is reduced to their knowledge below the numberfixed by or pursuant to these Articles as the necessary quorum for a meeting of directors, the continuing directors or director may act only for the purposeof appointing directors to fill any vacancy that has arisen or for summoning a meeting of members.90.The directors may by resolution of directors exercise all the powers of the Company to borrow money and to mortgage or charge its undertakings andproperty or any part thereof, to issue debentures, debenture stock and other securities whenever money is borrowed or as security for any debt, liability orobligation of the Company or of any third party.91.All cheques, promissory notes, drafts, bills of exchange and other negotiable instruments and all receipts for moneys paid to the Company, shall be signed,drawn, accepted, endorsed or otherwise executed, as the case may be, in such manner as shall from time to time be determined by resolution of directors.92.The Company shall keep a register of all relevant charges created by the Company showing:a.if the charge is a charge created by the Company, the date of its creation or if the charge is existing on property acquired by the Company, the dateon which the property was acquired;b.a short description of the liability secured by the charge;c.a short description of the property charged;d.the name and address of the trustee for the security, or if there is no such trustee the name and address of the chargee;e.unless the charge is a security to bearer, the name and address of the holder of the charge;f.details of any prohibition or restriction , if any, contained in the instrument creating the charge on the power of the company to create any futurecharge ranking in priority to or equally with the charge; andg.such other information as may be prescribed pursuant to the Act.93.The original or a copy of the register of charges shall be kept at the registered office of the Company or at the office of the registered agent of the Company.PROCEEDINGS OF DIRECTORS94.The directors of the Company or any committee thereof may meet at such times and in such manner and places within or outside the British Virgin Islandsas the directors may determine to be necessary or desirable. Any one or more directors may convene a meeting of directors.95.A director shall be deemed to be present at a meeting of directors if he participates by telephone or other electronic means and all directors participating inthe meeting are able to hear each other.96.A director shall be given not less than 3 days notice of meetings of directors, but a meeting of directors held without 3 days notice having been given to alldirectors shall be valid if all the directors entitled to vote at the meeting who do not attend, waive notice of the meeting and for this purpose, the presenceof a director at a meeting shall constitute waiver on his part. The inadvertent failure to give notice of a meeting to a director, or the fact that a director hasnot received the notice, does not invalidate the meeting.1797.A director may by a written instrument appoint an alternate who need not be a director and an alternate is entitled to attend meetings in the absence of thedirector who appointed him and to vote or consent in place of the director.98.A meeting of directors is duly constituted for all purposes if at the commencement of the meeting there are present in person or by alternate not less thanone half of the total number of directors, unless there are only 2 directors in which case the quorum shall be 2.99.If the Company shall have only one director the provisions herein contained for meetings of the directors shall not apply but such sole director shall havefull power to represent and act for the Company in all matters as are not by the Act or the Memorandum or these Articles required to be exercised by themembers of the Company and in lieu of minutes of a meeting shall record in writing and sign a note or memorandum of all matters requiring a resolution ofdirectors. Such a note or memorandum shall constitute sufficient evidence of such resolution for all purposes.100.At every meeting of the directors the Chairman of the Board of Directors shall preside as chairman of the meeting. If there is no Chairman of the Board ofDirectors or if the Chairman of the Board of Directors is not present at the meeting the Vice Chairman of the Board of Directors shall preside. If there is noVice Chairman of the Board of Directors or if the Vice Chairman of the Board of Directors is not present at the meeting the directors present shall choosesome one of their number to be chairman of the meeting.101.An action that may be taken by the directors or a committee of directors at a meeting may also be taken by a resolution of directors or a committee ofdirectors consented to in writing or by telex, telegram, cable, facsimile or other written electronic communication by all directors or all members of thecommittee as the case may be, without the need for any notice. The consent may be in the form of counterparts, each counterpart being signed by one ormore directors.102.The directors shall cause the following records to be kept:a.minutes of all meetings of directors, members, committees of directors and committees of members; andb.copies of all resolutions consented to by directors, members, committees of directors and committees of members.103.The resolutions, records and minutes referred to in the preceding Article shall be kept at the registered office of the Company, its principal place ofbusiness or at such other place as the directors determine.104.The directors may, by resolution of directors, designate one or more committees, each consisting of one or more directors.105.Subject to the following Article, each committee of directors has such powers and authorities of the directors, including the power and authority to affix theSeal, as are set forth in the resolution of directors establishing the committee.106.The directors have no power to delegate the following powers to a committee of directors;a.to amend the memorandum or articles;b.to change the registered office or agent;c.to designate committees of directors;d.to delegate powers to a committee of directors;e.to appoint or remove directors;f.to appoint or remove an agent;g.to fix emoluments of directors;18h.to approve a plan of merger, consolidation or arrangement;i.to make a declaration of solvency for the purposes of section 198(1)(a) or to approve a liquidation plan;j.to make a determination under section 57(1) that the company will, immediately after a proposed distribution, satisfy the solvency test; ork.to authorise the company to continue as a company incorporated under the laws of a jurisdiction outside the British Virgin Islands.Paragraphs (c) and (d) do not prevent a committee of directors, where authorised by the directors, from appointing a subcommittee and delegating powersexercisable by the committee to the subcommittee.107.The meetings and proceedings of each committee of directors consisting of 2 or more directors shall be governed mutatis mutandis by the provisions ofthese Articles regulating the proceedings of directors so far as the same are not superseded by any provisions in the resolution establishing the committee.108.Without prejudice to the freedom of the directors to establish any other committee, if the shares (or depositary receipts therefore) are listed or quoted onthe Designated Stock Exchange, and if required by the Designated Stock Exchange, the directors shall establish and maintain an audit committee as acommittee of the board of directors, the composition and responsibilities of which shall comply with the rules and regulations of the SEC and theDesignated Stock Exchange. The audit committee shall meet at least once every financial quarter, or more frequently as circumstances dictate.109.The Company shall adopt a formal written audit committee charter and review and assess the adequacy of the formal written charter on an annual basis.The charter shall specify the responsibilities of the Audit Committee which shall include responsibility for, among other things, ensuring its receipt from theoutside auditors of the Company of a formal written statement delineating all relationships between the auditor and the Company, and the AuditCommittee’s responsibility for actively engaging in a dialogue with the auditor with respect to any disclosed relationships or services that may impact theobjectivity and independence of the auditor take appropriate action to oversee the independence of the outside auditor. In addition, the Audit Committee isresponsible for reviewing potential conflict of interest situations and approving all Related Party Transactions.110.Without prejudice to the freedom of the directors to establish any other committees, the Board may establish a Stock Option Committee to administer theCompany’s stock option plans, including authority to make and modify awards under such plans. For so long as the Securities of the Company are listed ortraded on the Designated Stock Exchange, the Stock Option Committee shall have at least two Independent Directors. The Stock Option Committee willadminister the Company’s stock option plans, including the authority to make and modify awards under such plans.111.Without prejudice to the freedom of the directors to establish any other committees, the Board may establish a Nominating Committee to assist the Board inidentifying qualified individuals to become members of the Board.OFFICERS112.The Company may by resolution of directors appoint officers of the Company at such times as shall be considered necessary or expedient. Such officersmay consist of a Chairman of the Board of Directors, a Vice Chairman of the Board of Directors, a President and one or more Vice Presidents, Secretaries andTreasurers and such other officers as may from time to time be deemed desirable. Any number of offices may be held by the same person.113.The officers shall perform such duties as shall be prescribed at the time of their appointment subject to any modification in such duties as may beprescribed thereafter by resolution of directors or resolution of members, but in the absence of any specific allocation of duties it shall be the responsibilityof the Chairman of the Board of Directors to preside at meetings of directors and members, the Vice Chairman to act in the absence of the Chairman, thePresident to manage the day to day affairs of the Company, the Vice Presidents to act in order of seniority in the absence of the President but otherwise toperform such duties as may be delegated to them by the President, the Secretaries to maintain the share register, minute books and records (other thanfinancial records) of the Company and to ensure compliance with all procedural requirements imposed on the Company by applicable law, and the Treasurerto be responsible for the financial affairs of the Company.19114.Subject to the rules of the Designated Stock Exchange, the emoluments of all officers shall be fixed by resolution of directors.115.The officers of the Company shall hold office until their successors are duly elected and qualified, but any officer elected or appointed by the directors maybe removed at any time, with or without cause, by resolution of directors. Any vacancy occurring in any office of the Company may be filled by resolutionof directors.CONFLICT OF INTERESTS116.A director of the Company shall, forthwith after becoming aware of the fact that he is interested in a transaction entered into or to be entered into by theCompany, disclose the interest to all other directors of the Company.117.A director of the Company is not required to comply with Article 112 if;a.the transaction or proposed transaction is between the director and the Company; andb.the transaction or proposed transaction is or is to be entered into in the ordinary course of the company’s business and on usual terms andconditions.118.For the purposes of Article 112 a disclosure to all other directors to the effect that a director is a member, director or officer of another named entity or has afiduciary relationship with respect to the entity or a named individual and is to be regarded as interested in any transaction which may, after the date of theentry or disclosure, be entered into with that entity or individual, is a sufficient disclosure of interest in relation to that transaction.119.A.A director of the Company who is interested in a transaction entered into or to be entered into by the Company may:(i)vote on a matter relating to the transaction;(ii)attend a meeting of directors at which a matter relating to the transaction arises and be included among the directors present at the meeting for thepurposes of a quorum; and(iii)sign a document on behalf of the Company, or do any other thing in his capacity as a director, that relates to the transaction,and, subject to compliance with the Act shall not, by reason of his office be accountable to the Company for any benefit which he derives from suchtransaction and no such transaction shall be liable to be avoided on the grounds of any such interest or benefit.119.B.For so long the Securities of the Company are listed or traded on the Designated Stock Exchange, the Company shall conduct an appropriate review of allmaterial Related Party Transactions on an ongoing basis and shall utilize the Audit Committee for the review and approval of potential conflicts of interestsituations.INDEMNIFICATION120.Subject to the limitations hereinafter provided the Company may indemnify against all expenses, including legal fees, and against all judgments, fines andamounts paid in settlement and reasonably incurred in connection with legal, administrative or investigative proceedings any person who;a.is or was a party or is threatened to be made a party to any threatened, pending or completed proceedings, whether civil, criminal, administrative orinvestigative, by reason of the fact that the person is or was a director, an officer or a liquidator of the Company; orb.is or was, at the request of the Company, serving as a director of, or in any other capacity is or was acting for, another body corporate or apartnership, joint venture, trust or other enterprise.20121.The Company may only indemnify a person if the person acted honestly and in good faith in what he believed to be in the best interests of the Companyand, in the case of criminal proceedings, the person had no reasonable cause to believe that his conduct was unlawful.122.For the purposes of the preceding Article, a director acts in the best interests of the Company if he acts in the best interests of;a.the Company’s holding company; orb.a shareholder or shareholders of the Company; in either case, in the circumstances specified in Article 85.123.The decision of the directors as to whether the person acted honestly and in good faith and with a view to the best interests of the Company and as towhether the person had no reasonable cause to believe that his conduct was unlawful is, in the absence of fraud, sufficient for the purposes of theseArticles, unless a question of law is involved.124.The termination of any proceedings by any judgment, order, settlement, conviction or the entering of a nolle prosequi does not, by itself, create apresumption that the person did not act honestly and in good faith and with a view to the best interests of the Company or that the person had reasonablecause to believe that his conduct was unlawful.Consolidated Statements of Changes in Stockholder’s EquityF5Consolidated Statements of Cash FlowsF6Notes to Consolidated Financial StatementsF7 F22F1REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRMTo the Shareholder and the Sole Director ofLK Technology Ltd.Opinion on the Consolidated Financial StatementsWe have audited the accompanying consolidated balance sheets of LK Technology Ltd. and. subsidiaries (the “Company”) as of December 31, 2017 and 2016, andthe related consolidated statements of operations and comprehensive loss, changes in shareholder’s equity and cash flows for each of the years then ended, andthe related notes (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in allmaterial respects, the consolidated financial position of the Company as of December 31, 2017 and 2016, and the consolidated results of its operations and its cashflows for each of the years then ended, in conformity with accounting principles generally accepted in the United States of America.Basis for OpinionThese consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’sconsolidated financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (UnitedStates) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules andregulations of the Securities and Exchange Commission and the PCAOB.We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonableassurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have,nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internalcontrol over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting.Accordingly, we express no such opinion.An independent member firm of Moore Stephens International Limited – members in principal cities throughout the worldOur audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, andperforming procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in theconsolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well asevaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion.Certified Public AccountantsWe have served as the Company’s auditor since 2018.Hong KongMay 25, 2018F2LK TECHNOLOGY LTD. AND SUBSIDIARIESCONSOLIDATED BALANCE SHEETS(IN U.S. DOLLARS)As of December 31,20172016AssetsCurrent assets:Cash and cash equivalents$72,379$83,843Accounts receivable, net of allowance for doubtful accounts9,729,6251,865,836Other receivables and prepayment2,376,7452,287,934Amounts due from related parties11,760,692Total current assets23,939,4414,237,613Property and equipment, net5,044,8727,771,027Intangible assets, net1,154,1971,682,445Goodwill7,239,9367,239,936Amount due from a related party204,412183,811TOTAL ASSETS37,582,85821,114,832LiabilitiesCurrent liabilities:Accounts payable8,784,5186,446,584Accrued liabilities and other payables12,962,91211,329,613Amounts due to related parties3,563,68316,129,323Total current liabilities25,311,11333,905,520Total liabilities25,311,11333,905,520Commitments and contingenciesShareholder’s Equity (Deficit)Share capitalCommon stock, $1 par value per share; 50,000 shares authorized as of December 31, 2017 and 2016, 1 share issued andoutstanding as of December 31, 2017 and 201611Additional paidin capital41,819,68510,037,469Accumulated deficit(29,936,158)(23,125,704)Accumulated other comprehensive income (loss)388,217297,546Total Shareholder’s Equity (Deficit)12,271,745(12,790,688)TOTAL LIABILITIES AND SHAREHOLDER’S EQUITY (DEFICIT)$37,582,858$21,114,832F3LK TECHNOLOGY LTD. AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS(IN U.S. DOLLARS)For the years endedDecember 31,20172016Revenues$26,082,417$5,233,145Less: Cost of revenues5,547,7796,315,504Less: Operating expenses:Selling and marketing23,908,7336,209,804General and administrative2,451,2492,108,854Research and development1,046,1982,882,202Total operating expenses27,406,18011,200,860Loss from operations(6,871,542)(12,283,219)Other income (expense):Interest expense(26,611)(4,412)Foreign exchange gains (losses)350,679(298,257)Loss from investment(428,571)Other income (expense), net(262,980)(34,572)Total other income (expense), net61,088(765,812)Loss before income taxes(6,810,454)(13,049,031)Income taxesNet loss$(6,810,454)$(13,049,031)Other comprehensive income:Foreign currency translation adjustment90,671387,375Total comprehensive loss$(6,719,783)$(12,661,656)F4LK TECHNOLOGY LTD. AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDER’S EQUITY(IN U.S. DOLLARS)Accumulated otherTotalOrdinary sharesAdditionalpaidin AccumulatedcomprehensiveIncomeShareholder’sEquity SharesAmountcapitaldeficits(loss)(Deficit)Balance as of December 31, 20151$ 1$8,250,505$(10,076,673)$(89,829)$(1,915,996)Capital contribution from C Media1,786,9641,786,964Net loss(13,049,031)(13,049,031)Foreign currency translation adjustment387,375387,375Balance as of December 31, 20161110,037,469(23,125,704)297,546(12,790,688)Capital contribution from C Media31,782,21631,782,216Net loss(6,810,454)(6,810,454)Foreign currency translation adjustment90,67190,671Balance as of December 31, 20171$1$41,819,685$(29,936,158)$388,217$12,271,745F5LK TECHNOLOGY LTD. AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF CASH FLOWS(IN U.S. DOLLARS)For the years endedDecember 31,20172016CASH FLOWS FROM OPERATING ACTIVITIES:Net loss$(6,810,454)$(13,049,031)Depreciation and amortization3,316,1813,245,161Loss on disposal of property and equipment115,19373,022Increase in allowance for doubtful accounts445,39562,591Changes in assets and liabilitiesAccounts receivable(7,933,730)(1,507,296)Other receivables and prepayment(2,202,960)2,873,984Accounts payable2,230,5434,757,457Accrued liabilities and other payables1,866,1377,483,441Net cash (used in) provided by operating activities(8,973,695)3,939,329CASH FLOWS FROM INVESTING ACTIVITIES:Purchase of property and equipment(12,689)(3,554,258)Proceeds from disposal of property and equipment29,942Net cash provided by (used in) investing activities17,253(3,554,258)CASH FLOWS FROM FINANCING ACTIVITIES:Advances from related parties8,938,290(1,197,870)Net cash provided by (used in) financing activities8,938,290(1,197,870)Effect of exchange rate changes6,688(32,746)Net decrease in cash and cash equivalents(11,464)(845,545)Cash and cash equivalents, at beginning of year83,843929,388Cash and cash equivalents, at end of year$72,379$83,843Supplemental cash flow disclosures:Interest paid26,6114,412Income taxes paidF6LK TECHNOLOGY LTD. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS(IN U.S. DOLLARS)NOTE 1 – DESCRIPTION OF BUSINESS AND ORGANIZATIONStar Chariot Limited was incorporated in the British Virgin Islands (“BVI”) as an exempted limited liability company on March 3, 2011. On January 18, 2018, it wasrenamed as LK Technology Ltd. (“LK Technology ” or the “Company”).LK Technology, its subsidiaries and its variable interest entities (“VIEs”) (collectively the “Group”) operate mobile application service for longdistance travel in thePeople’s Republic of China (the “PRC”). The core mobile application product, Luokuang, is made as an LBSsocial contents and services distribution platform. Itoffers functions based on various travel scenarios, e.g. information, entertainment, travel, ecommerce, O2O, advertising, etc.As of December 31, 2017, details of the Company’s subsidiaries and VIEs are as follows:NameDate ofincorporationPlace ofincorporationPercentage oflegal ownershipSubsidiaries:MMB LimitedApr 11, 2013Hong Kong100%Mobile Media (China) LimitedNov 6, 2007Hong Kong100%Zhong Chuan Tian Xia Information and Technology (Beijing) LimitedFeb 1, 2013PRC100%Zhong Chuan Tian Xia Information and Technology (Shenzhen) LimitedDec 23, 2010PRC100%VIEs:Beijing Zhong Chuan Shi Xun Technology Limited (“Zhong Chuan Shi Xun”)May 17, 2004PRC100%Jiangsu Zhong Chuan Rui You Information and Technology Limited (“Zhong Chuan Rui You”)May 26, 2011PRC100%Huoerguosi Luokuang Information and Technology Limited (“Huoerguosi Luokuang”)Jul 19, 2017PRC100%Shenzhen Jiu Zhou Shi Dai Digital and Technology Limited (“Jiu Zhou Shi Dai”)Nov 26, 2004PRC100%F7NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIESBasis of presentationThe consolidated financial statements of the Group have been prepared in accordance with accounting principles generally accepted in the United States of America(“US GAAP”).The Group incurred losses from operations of $6,871,542 and $12,283,219 for the years ended December 31, 2017 and 2016, respectively. As of December 31, 2017, theGroup had a shareholder’s equity of $12,271,145. The Group had negative cash flows from operating activities for the year ended December 31, 2017 of $8,973,695.As of December 31, 2017, the Group had cash and cash equivalents of $72,379 and a working capital deficit of $1,371,672. From 2018 and onwards, the Group willfocus on improving operation efficiency and cost reduction, and enhancing marketing functions to attract more users. The Group regularly monitors its current andexpected liquidity requirements to ensure that it maintains sufficient cash balances and accessible credit to meet its liquidity requirements in the short and long term.The parent company continues to provide cash flow to the Group. Based on working capital conditions and forecast for future operations, the Group believes that itwill be able to meet its payment obligations and other commitments for at least the following twelve months.Principles of consolidationThe consolidated financial statements include the financial statements of the Company, its subsidiaries, including the whollyforeign owned enterprises (“WFOEs”),and VIEs for which the Company is the primary beneficiary. All transactions and balances among the Company, its subsidiaries and consolidated VIEs have beeneliminated upon consolidation. The results of subsidiaries and consolidated VIEs acquired or disposed of are recorded in the consolidated statements of operationsfrom the effective date of acquisition or up to the effective date of disposal, as appropriate.A subsidiary is an entity in which (i) the Company directly or indirectly controls more than 50% of the voting power; or (ii) the Company has the power to appoint orremove the majority of the members of the board of directors or to cast a majority of votes at the meeting of the board of directors or to govern the financial andoperating policies of the investee pursuant to a statute or under an agreement among the shareholders or equity holders. A VIE is required to be consolidated by theprimary beneficiary of the entity if the equity holders in the entity do not have the characteristics of a controlling financial interest or do not have sufficient equity atrisk for the entity to finance its activities without additional subordinated financial support from other parties.F8To comply with the PRC legal restrictions on foreign ownership of companies that operate mobile application services, the Group operates in such restricted servicesin the PRC through certain PRC domestic companies, whose equity interests are held by certain management members or founders of the Group. Part of theregistered capital of these PRC domestic companies was funded by certain management members or founders of the Group. The Group has entered into certainexclusive business services agreements with these PRC domestic companies, which entitle it to receive a majority of their residual returns and make it obligatory forthe Group to absorb a majority of the risk of losses from their activities. In addition, the Group has entered into certain agreements with those management membersor founders, including equity interest pledge agreements of the equity interests held by those management members or founders and exclusive option agreements toacquire the equity interests in these companies when permitted by the PRC laws, rules and regulations.Details of the typical VIE structure of the Group’s significant consolidated VIEs, primarily domestic companies associated with the operations such as Zhong ChuanShi Xun, Zhong Chuan Rui You, Huoerguosi Luokuang and Jiu Zhou Shi Dai, are set forth below:(i)Contracts that give the Group effective control of VIEsExclusive option agreementsThe VIE equity holders have granted the WFOEs exclusive call options to purchase their equity interest in the VIEs at an exercise price equal to the higherof (i) the registered capital in the VIEs; and (ii) the minimum price as permitted by applicable PRC laws. Each relevant VIE has further granted the relevantWFOE an exclusive call option to purchase its assets at an exercise price equal to the book value of the assets or the minimum price as permitted byapplicable PRC laws, whichever is higher. The WFOEs may nominate another entity or individual to purchase the equity interest or assets, if applicable,under the call options. Each call option is exercisable subject to the condition that applicable PRC laws, rules and regulations do not prohibit completion ofthe transfer of the equity interest or assets pursuant to the call option. Each WFOE is entitled to all dividends and other distributions declared by the VIE,and the VIE equity holders have agreed to give up their rights to receive any distributions or proceeds from the disposal of their equity interests in the VIEwhich are in excess of the original registered capital that they contributed to the VIE, and to pay any such distributions or premium to the WFOE. Theexclusive call option agreements remain in effect until the equity interest or assets that are the subject of such agreements are transferred to the WFOEs.Equity pledge agreementsPursuant to the relevant equity pledge agreements, the relevant VIE equity holders have pledged all of their interests in the equity of the VIEs as acontinuing first priority security interest in favor of the corresponding WFOEs to secure the performance of obligations by the VIEs and/or the equityholders under the other structure contracts. Each WFOE is entitled to exercise its right to dispose of the VIE equity holders’ pledged interests in the equityof the VIE and has priority in receiving payment by the application of proceeds from the auction or sale of such pledged interests, in the event of anybreach or default under the loan agreement or other structure contracts, if applicable. These equity pledge agreements remain in force for the duration ofthe relevant loan agreement and other structure contracts.F9(ii)Contracts that enable the Group to receive substantially all of the economic benefits from the VIEsExclusive business services agreementsEach relevant VIE has entered into an exclusive business services agreement with the respective WFOE, pursuant to which the relevant WFOE providesexclusive business services to the VIE. In exchange, the VIE pays a service fee to the WFOE which typically amounts to what would be substantially all ofthe VIE’s pretax profit, resulting in a transfer of substantially all of the profits from the VIE to the WFOE.Other arrangementsThe exclusive call option agreements described above also enable the Group to receive substantially all of the economic benefits from the VIEs by typicallyentitling the WFOEs to all dividends and other distributions declared by the VIEs and to any distributions or proceeds from the disposal by the VIE equityholders of their equity interests in the VIEs that are in excess of the original registered capital that they contributed to the VIEs.Based on these contractual agreements, the Group believes that the PRC domestic companies as described above should be considered as VIEs because the equityholders do not have significant equity at risk nor do they have the characteristics of a controlling financial interest. Given that the Group is the primary beneficiaryof these PRC domestic companies, the Group believes that these VIEs should be consolidated based on the structure as described above.Under the contractual arrangements with the consolidated VIEs, the Group has the power to direct activities of the consolidated VIEs and can have assetstransferred out of the consolidated VIEs under its control. Therefore, the Group considers that there is no asset in any of the consolidated VIEs that can be usedonly to settle obligations of the consolidated VIEs, except for registered capital and PRC statutory reserves. As all consolidated VIEs are incorporated as limitedliability companies under the Company Law of the PRC, creditors of the consolidated VIEs do not have recourse to the general credit of the Group for any of theliabilities of the consolidated VIEs.Currently there is no contractual arrangement which requires the Group to provide additional financial support to the consolidated VIEs. However, as the Groupconducts its businesses primarily based on the licenses and approvals held by its consolidated VIEs, the Group has provided and will continue to provide financialsupport to the consolidated VIEs considering the business requirements of the consolidated VIEs, as well as the Group’s own business objectives in the future.F10Use of estimatesThe preparation of financial statements in conformity with US GAAP requires the Group to make estimates and assumptions that affect the reported amounts ofassets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expensesduring the reporting period. The most significant estimates are the allowance for doubtful accounts, the useful lives of property and equipment and intangibleassets, impairment of longlived assets and goodwill. Actual results could differ from those estimates.Fair value measurementsFair value is the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at themeasurement date under current market conditions. When determining the fair value measurements for assets and liabilities required or permitted to be recorded atfair value, the Group considers the principal or most advantageous market in which it would transact and it considers assumptions that market participants woulduse when pricing the asset or liability.Authoritative literature provides a fair value hierarchy which prioritizes the inputs to valuation techniques used to measure fair value into three broad levels. Thelevel in the hierarchy within which the fair value measurement in its entirety falls is based upon the lowest level of input that is significant to the fair valuemeasurement as follows:Level 1Level 1 applies to assets or liabilities for which there are quoted prices in active markets for identical assets or liabilities.Level 2Level 2 applies to assets or liabilities for which there are inputs other than quoted prices included within Level 1 that are observable for the asset or liability such asquoted prices for similar assets or liabilities in active markets; quoted prices for identical assets or liabilities in markets with insufficient volume or infrequenttransactions (less active markets); or modelderived valuations in which significant inputs are observable or can be derived principally from, or corroborated by,observable market data.Level 3Level 3 applies to assets or liabilities for which there are unobservable inputs to the valuation methodology that are significant to the measurement of the fair valueof the assets or liabilities.F11Cash and cash equivalentsCash and cash equivalents primarily consist of cash, money market funds, investments in interest bearing demand deposit accounts, time deposits and highly liquidinvestments with original maturities of three months or less from the date of purchase and are stated at cost which approximates their fair value. The Group has nocash equivalents.Accounts receivable, net of allowanceAccounts receivable are recognized and carried at the original invoiced amount less an allowance for any potential uncollectible amounts. An estimate for doubtfuldebts is made when collection of the full amount is no longer probable. Bad debts are written off as incurred. The Group generally does not require collateral from itscustomers.The Group maintains allowances for doubtful accounts for estimated losses resulting from the failure of customers to make payments on time. The Group reviews theaccounts receivable on a periodic basis and makes specific allowances when there is doubt as to the collectability of individual balances. In evaluating thecollectability of individual receivable balances, the Group considers many factors, including the age of the balance, the customer’s payment history, its currentcreditworthiness and current economic trends.Property and equipment, netProperty and equipment are carried at cost less accumulated depreciation. Depreciation is calculated on a straightline basis over the following estimated usefullives:Wifi equipment– 3 yearsOffice equipment– 3 to 5 yearsVehicles– 5 yearsCosts of repairs and maintenance are expensed as incurred and asset improvements are capitalized. The gain or loss on disposal of property and equipment is thedifference between the net sales proceeds and the carrying amount of the relevant assets and is recognized in the consolidated income statement. When propertyand equipment are retired or otherwise disposed of, the cost and accumulated depreciation are removed from the accounts and any resulting gain or loss is includedin the results of operations for the respective period.Construction in progressAssets under construction are not depreciated until construction is completed and the assets are ready for their intended use.F12Intangible assetsIntangible assets with finite lives are amortized using the straightline method over the estimated economic lives.Intangible assets have weighted average economic lives from the date of purchase as follows:Software– 5 yearsTrademarks– 10 yearsGoodwillThe Group assesses goodwill for impairment in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”)subtopic 35020, Intangibles—Goodwill and Other: Goodwill (“ASC 35020”), which requires that goodwill to be tested for impairment at the reporting unit level atleast annually and more frequently upon the occurrence of certain events, as defined by ASC 35020.We have the option to assess qualitative factors first to determine whether it is necessary to perform the twostep test in accordance with ASC 35020. If we believe,as a result of the qualitative assessment, that it is morelikelythannot that the fair value of the reporting unit is less than its carrying amount, the twostepquantitative impairment test described below is required. Otherwise, no further testing is required. In the qualitative assessment, we consider primary factors such asindustry and market considerations, overall financial performance of the reporting unit, and other specific information related to the operations. In performing thetwostep quantitative impairment test, the first step compares the carrying amount of the reporting unit to the fair value of the reporting unit based on either quotedmarket prices of the ordinary shares or estimated fair value using a combination of the income approach and the market approach. If the fair value of the reportingunit exceeds the carrying value of the reporting unit, goodwill is not impaired and we are not required to perform further testing. If the carrying value of the reportingunit exceeds the fair value of the reporting unit, then we must perform the second step of the impairment test in order to determine the implied fair value of thereporting unit’s goodwill. The fair value of the reporting unit is allocated to its assets and liabilities in a manner similar to a purchase price allocation in order todetermine the implied fair value of the reporting unit goodwill. If the carrying amount of the goodwill is greater than its implied fair value, the excess is recognized asan impairment loss.In 2017, we performed a qualitative assessment for goodwill. Based on the requirements of ASC35020, we evaluated all relevant factors, including but not limited tomacroeconomic conditions, industry and market conditions, financial performance. We weighed all factors in their entirety and concluded that it was not morelikelythannot the fair value was less than the carrying amount of the reporting unit, and further impairment testing on goodwill was unnecessary as of December 31, 2017and 2016.F13Impairment or disposal of longlived assetsLonglived assets other than goodwill are included in impairment evaluations when events and circumstances exist that indicate the carrying value of these assetsmay not be recoverable. In accordance with FASB ASC 360, Property, Plant and Equipment, the Group assesses the recoverability of the carrying value of longlivedassets by first grouping its longlived assets with other assets and liabilities at the lowest level for which identifiable cash flows are largely independent of the cashflows of other assets and liabilities (the asset group) and, secondly, estimating the undiscounted future cash flows that are directly associated with and expected toarise from the use of and eventual disposition of such asset group. If the carrying value of the asset group exceeds the estimated undiscounted cash flows, theGroup recognizes an impairment loss to the extent the carrying value of the longlived asset exceeds its fair value. The Group determines fair value through quotedmarket prices in active markets or, if quotations of market prices are unavailable, through the performance of internal analysis using a discounted cash flowmethodology or obtains external appraisals from independent valuation firms. The undiscounted and discounted cash flow analyses are based on a number ofestimates and assumptions, including the expected period over which the asset will be utilized, projected future operating results of the asset group, discount rateand longterm growth rate.As of December 31, 2017 and 2016, the Group assessed the impairment of its longlived assets and concluded that there was no impairment indication.Business combinationWe account for business combinations using the purchase method of accounting in accordance with FASB ASC topic 805, Business combinations. The purchasemethod accounting requires that the consideration transferred be allocated to the assets, including separately identifiable assets and liabilities we acquired, basedon their estimated fair values. The consideration transferred in an acquisition is measured as the aggregate of the fair values at the date of exchange of the assetsgiven, liabilities incurred, and equity instruments issued as well as the contingent considerations and all contractual contingencies as of the acquisition date. Thecosts directly attributable to the acquisition are expensed as incurred. Identifiable assets, liabilities and contingent liabilities acquired or assumed are measuredseparately at their fair value as of the acquisition date, irrespective of the extent of any noncontrolling interests. The excess of (i) the total of cost of acquisition, fairvalue of the noncontrolling interests and acquisition date fair value of any previously held equity interest in the acquiree over (ii) the fair value of the identifiable netassets of the acquiree, is recorded as goodwill. If the cost of acquisition is less than the fair value of the net assets of the subsidiary acquired, the difference isrecognized directly in earnings.Revenue recognitionThe Group recognizes revenue in accordance with FASB ASC topic 605, Revenue Recognition (“ASC 605”). Revenue is recognized when the following four revenuerecognition criteria are met: (i) persuasive evidence of an arrangement exists, (ii) delivery has occurred or services have been provided, (iii) the selling price is fixed ordeterminable, and (iv) collectability is reasonably assured.F14Displaybased online advertising servicesThe Group provides displaybased online advertising services to customers by integrating text description, image and video, and displaying the advertisements in aprominent position of LuoKuang Application. The Group recognizes revenue in accordance with ASC 605, over the contractual term based on the agreements andconfirmation letters signed by both parties, commencing on the date the customer’s advertisement is displayed on the Group’s platform.Foreign currency translationThe functional and reporting currency of the Company and the Company’s subsidiaries domiciled in BVI and Hong Kong are the United States dollar (“U.S. dollar”).The financial records of the Company’s other subsidiaries and VIEs located in the PRC are maintained in their local currency, the Chinese Renminbi (“RMB”), whichare the functional currency of these entities.Monetary assets and liabilities denominated in currencies other than the functional currency are translated into the functional currency at the rates of exchangeruling at the balance sheet date. Transactions in currencies other than the functional currency during the year are converted into the functional currency at theapplicable rates of exchange prevailing when the transactions occurred. Transaction gains and losses are recognized in the statements of operations.The Company’s entities with a functional currency of RMB translate their operating results and financial position into the U.S. dollar, the Company’s reportingcurrency. Assets and liabilities are translated using the exchange rates in effect on the balance sheet date. Revenues, expenses, gains and losses are translatedusing the average rate for the year. Retained earnings and equity are translated using the historical rate. Translation adjustments are reported as cumulativetranslation adjustments and are shown as a separate component of other comprehensive income.Income taxesDeferred income taxes are recognized for temporary differences between the tax basis of assets and liabilities and their reported amounts in the financial statements,net operating loss carry forwards and credits, by applying enacted statutory tax rates applicable to future years. Deferred tax assets are reduced by a valuationallowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Current income taxesare provided for in accordance with the laws and regulations applicable to the Group as enacted by the relevant tax authorities.The impact of an uncertain income tax position on the income tax return must be recognized at the largest amount that is morelikelythan not to be sustained uponaudit by the relevant tax authorities. An uncertain income tax position will not be recognized if it has less than a 50% likelihood of being sustained. Additionally, theGroup classifies the interest and penalties, if any, as a component of the income tax expense. For years ended December 31, 2017 and 2016, the Group did not haveany material interest or penalties associated with tax positions nor did the Group have any significant unrecognized uncertain tax positions.F15Related partiesParties are considered to be related to the Company if the parties, directly or indirectly, through one or more intermediaries, control, are controlled by, or are undercommon control with the Company. Related parties also include principal owners of the Company, its management, members of the immediate families of principalowners of the Company and its management and other parties with which the Company may deal with if one party controls or can significantly influence themanagement or operating policies of the other to an extent that one of the transacting parties might be prevented from fully pursuing its own separate interests. TheCompany discloses all significant related party transactions.LeasesLeases have been classified as either capital or operating leases. Leases that transfer substantially all the benefits and risks incidental to the ownership of assets areaccounted for as if there was an acquisition of an asset and incurrence of an obligation at the inception of the lease. All other leases are accounted for as operatingleases wherein rental payments are expensed as incurred.When the Group is the lessor, minimum contractual rental from leases are recognized on a straightline basis over the noncancelable term of the lease. With respectto a particular lease, actual amounts billed in accordance with the lease during any given period may be higher or lower than the amount of rental revenue recognizedfor the period. Straightline rental revenue commences when the customer assumes control of the leased premises. Accrued straightline rents receivable representsthe amount by which straightline rental revenue exceeds rents currently billed in accordance with lease agreements. Contingent rental revenue is accrued when thecontingency is removed.Advertising costsAdvertising costs include expenses associated with direct marketing. All advertising costs are expensed as incurred and included in selling and marketing expenses.During the years ended December 31, 2017 and 2016, advertising costs amounted to $23,171,170 and $4,537,653, respectively.Comprehensive lossComprehensive loss includes net loss and foreign currency translation adjustments and is presented net of tax. The tax effect is nil for the two years endedDecember 31, 2017 and 2016 in the consolidated statements of comprehensive loss.Concentration of credit riskFinancial instruments that potentially expose the Group to concentrations of credit risk consist primarily of cash and accounts receivable. The Group places its cashwith financial institutions with highcredit rating and quality in China. For the year ended December 31, 2017, two customers accounted for over 10% of totalrevenue. For the year ended December 31, 2016, four customers accounted for over 10% of total revenue. At December 31, 2017 and 2016, the Group had credit riskexposure of uninured cash in banks of approximately $72,379 and $83,843, respectively.F16NOTE 3 – INCOME TAXAt December 31, 2017 and 2016, the Group had an unused net operating loss carryforwards of approximately $25,123,726 and $20,081,239, respectively, for income taxpurposes, which expires between 2018 to 2022 and between 2017 to 2021, respectively. At December 31, 2017 and 2016, these net operating losses carryforwards mayresult in future income tax benefits of approximately $5,043,944 and $4,008,863, respectively, however, because realization is uncertain at this time, a valuationallowance in the same amount has been established. Deferred income taxes reflect the net effects of temporary differences between the carrying amounts of assetsand liabilities for financial reporting purposes and the amounts used for income tax purposes.Significant components of the Group’s deferred tax liabilities and assets of December 31, 2017 and 2016 are as follows:December 31,December 31,20172016Deferred tax liabilities$$Deferred tax assetNet operating loss carryforward5,043,9444,008,863Valuation allowance(5,043,944)(4,008,863)Net deferred tax assetMovement of valuation allowanceDecember 31,2017December 31,2016At the beginning of the year$4,008,863$2,049,352Current year addition823,9702,159,518Expired(61,411)Exchange difference272,522(200,007)At the end of the year5,043,9444,008,863The Company is not subject to taxation in BVI under the current BVI law. Subsidiaries operating in the PRC are subject to PRC Enterprise Income Tax at the statutoryrate of 25% for the years ended December 31, 2017 and 2016. Subsidiaries operating in Hong Kong are subject to Hong Kong income taxes at a rate of 16.5% for theyears ended December 31, 2017 and 2016.F17A reconciliation of the income tax expense to the amount computed by applying the current statutory tax rate to the loss before income taxes in the consolidatedstatements of comprehensive income is as follows:December 31,December 31,20172016Loss before income taxes$(6,810,454)$(13,049,031)Tax loss at statutory tax rate(1,655,174)(3,386,822)Nondeductible items6,729,2551,712,857Nontaxable items(3,789,956)(674,189)Change in valuation allowance823,9702,159,518Tax benefits(2,108,095)188,636Income tax expensesNOTE 4 – ACCOUNTS RECEIVABLEAt December 31, 2017 and 2016, accounts receivable consisted of the following:December 31,December 31,20172016Accounts receivable$10,406,602$2,098,946Less: allowance for doubtful accounts676,977233,110$9,729,625$1,865,836NOTE 5 – OTHER RECEIVABLESAt December 31, 2017 and 2016, other receivables consisted of the following:December 31,2017December 31,2016Advances to suppliers$339,701$181,472VAT recoverable (1)3,033,0651,662,805Other5,048,189485,152$2,376,745$2,287,934(1)The balance of advanced VAT represents input VAT available for deducting the amount of VAT paid in the future. During the years ended December 31, 2017and 2016, the Group purchased a large amount of WiFi equipment for deployments, which generated related input VAT approved by tax authority.F18NOTE 6 – AMOUNTS DUE FROM RELATEDPARTIESAt December 31, 2017 and 2016, amounts due from related parties consisted of the following:Name of related partyDecember 31,2017December 31,2016C Media Limited (1)$11,760,692$Ya Tuo Ji International Consultancy (Beijing) Limited (2)204,412183,811(1)C Media Limited is the parent company of LK Technology. The Group expects the amounts due from the related party will be returned to the Group within oneyear.(2)Ya Tuo Ji is a company controlled by the spouse of a major shareholder of C Media Limited. The loan is unsecured, interestfree and repayable on January 5,2019.NOTE 7 – PROPERTY AND EQUIPMENTAt December 31, 2017 and 2016, property and equipment consisted of the following:December 31,December 31,Useful life20172016WiFi equipment3 Years$8,711,424$8,367,678Vehicles5 Years43,246Office and other equipment3 – 5 Years170,242416,434Constructioninprogress2,166,4522,652,28811,048,11811,479,646Less: accumulated depreciation(6,003,246)(3,708,619)$5,044,872$7,771,027For the years ended December 31, 2017 and 2016, depreciation expense amounted to $2,628,884 and $2,474,434, respectively, of which $2,423,655 and $2,194,582,respectively, was included in cost of revenue, $117,648 and $121,740, respectively, was included in selling and marketing expenses and the remainder was included ingeneral and administrative expense.Included in constructioninprogress are WiFI equipment under construction.F19NOTE 8 – GOODWILLIn September of 2014, Zhong Chuan Shi Xun acquired a 100% interest in Zhong Chuan Rui You for a consideration of $7,391,894 (RMB48,000,000). Zhong Chuan RuiYou is primarily engaged in on train WiFi business, deploying WiFi equipment on trains and providing passengers with entertainment and information services ontrains. The book value of the identifiable net assets of Zhong Chuan Rui You was $151,958 (RMB963,000) and a goodwill of $7,239,936 was recorded.NOTE 9 – ACCRUED LIABILITIES AND OTHER PAYABLESAt December 31, 2017 and 2016, accrued liabilities and other payables consisted of the following:December 31,December 31,20172016Deferred revenue$2,326,406$302,735Accrued payroll143,998316,458Other taxes payable3,544,469461,699Other payable852,384686,526Other loans6,095,6559,562,915$12,962,912$11,329,613Deferred revenue represents prepayments from customers for advertising service and is recognized as revenue when the advertising services are rendered.Other loans of $939,555 and $57,416, respectively, as of December 31, 2017 and 2016, are unsecured, bear daily interest at 0.04% and are repayable on demand.NOTE 10 – AMOUNTS DUE TO RELATED PARTIESAt December 31, 2017 and 2016, amounts due to related parties consisted of the following:December 31,December 31,Name of related party20172016Mr. Song Xuesong (“Mr. Song”) (1)$2,921,639$10,669,325C Media Limited (2)$$4,855,236Thumb Beijing Branch (3)$612,103$576,560Thumb Shenzhen Branch (3)$29,941$28,202(1) The Group’s CEO(2) C Media Limited, the parent company.(3) Thumb Beijing and Shenzhen Branch are controlled by the spouse of Mr. Song.Amounts due to related parties are shortterm in nature, noninterest bearing, unsecured and payable on demand.F20NOTE 11 – RETIREMENT AND WELFARE BENEFITSThe Group’s fulltime employees are entitled to staff welfare benefits including medical care, casualty, housing benefits, education benefits, unemployment insuranceand pension benefits through a PRC governmentmandated multiemployer defined contribution plan. The Group is required to accrue the employerportion forthese benefits based on certain percentages of the employees’ salaries. The total provision for such employee benefits of $170,227 and $353,033 during the yearsended December 31, 2017 and 2016, respectively, of which $23,392 and $30,455, respectively, was charged to cost of revenue, $48,957 and $97,408, respectively wascharged to selling and marketing expenses, $49,717 and $86,934, respectively, was charged to general and administrative expenses and $48,161 and $138,236,respectively was charged to research and development expenses. The Group is required to make contributions to the plan out of the amounts accrued for all staffwelfare benefits except for education benefits. The PRC government is responsible for the staff welfare benefits including medical care, casualty, housing benefits,unemployment insurance and pension benefits to be paid to these employees.NOTE 12 – STATUTORY RESERVESAs stipulated by the relevant law and regulations in the PRC, the Group’s subsidiaries and VIEs in the PRC are required to maintain a nondistributable statutorysurplus reserve. Appropriations to the statutory surplus reserve are required to be made at not less than 10% of profit after taxes as reported in the subsidiaries’statutory financial statements prepared under the PRC GAAP. Once appropriated, these amounts are not available for future distribution to owners or shareholders.Once the general reserve is accumulated to 50% of the subsidiaries’ registered capital, the subsidiaries can choose not to provide more reserves. The statutoryreserve may be applied against prior year losses, if any, and may be used for general business expansion and production and increase in registered capital of thesubsidiaries. The Group allocated $Nil to statutory reserves during the years ended December 31, 2017 and 2016, respectively. The statutory reserves cannot betransferred to the Company in the form of loans or advances and are not distributable as cash dividends except in the event of liquidation.NOTE 13 – COMMITMENTS AND CONTINGENCIESOperating leasesWe have entered into operating lease agreements primarily for our office spaces in China. These leases expire through 2018 and are renewable upon negotiation.Future minimum rental payment required under the Office Lease is as follows:Year ending December 31:Amount2018$122,138F21Contingencies(a) Litigation with Shanghai Fusheng Weier Intelligent Control Technology Co., Ltd.On January 22, 2016, Zhong Chuan Rui You and Shanghai Fusheng Weier Intelligent Control Technology Co., Ltd. (“Fusheng Weier”) signed a contract forequipment of $1,652,842 (RMB10,800,000). Since Zhong Chuan Rui You did not make the payments of $1,126,381 (RMB7,360,000) on the due dates, Fusheng Weierfiled a lawsuit against Zhong Chuan Rui You in Shanghai Xuhui District People’s Court on October 8, 2016. On March 9, 2017, Xuhui District People’s Court issuedthe verdict requiring Zhong Chuan Rui You to pay the overdue debts. In August 2017, C Media Limited made the payment of $512,075 (RMB3,346,000). Theremaining balance has been accrued in accounts payable. The payment schedule for the remaining balance is being negotiated by the two parties. On February 5,2018, a hearing was held adding Zhong Chuan Shi Xun as a defendant. The Group plans to settle the remaining balance within one year.(b) Lawsuit with Gansu Jinlun Culture Media Co., Ltd.On August 22, 2014, Zhong Chuan Rui You and Gansu Jinlun Culture Media Co., Ltd. (“Gansu Jinlun”) signed a “Lanzhou Railway Bureau Airconditioned Train WiFi Network System Advertising Operation Rights Agreement” for advertising on 72 trains of $1,467,880 (RMB9,604,633). Due to the dispute on the projectimplementation, Zhong Chuan Rui You did not pay the advertising fee. On August 23, 2017, Gansu Jinlun filed a lawsuit with Gansu Intermediate People’s Court. OnDecember 19, 2017, Gansu Intermediate People’s Court issued a verdict, ruling that Zhong Chuan Rui You settle the overdue advertising fee. Since only 18 out of 72trains have been installed with Wifi network system, Zhong Chuan Rui You disputed and appealed to the verdict. The next court trial date has not yet beendetermined.C Media and Gansu Jinlun are negotiating a potential settlement to resume the contract. According to the legal counsel, it is probable that the settlement will amountto approximately $459,000 (RMB3,000,000); therefore, this amount has been accrued in accounts payable.(c) Litigation with Shenzhen Hua Xun Fang Zhou Technology Co., Ltd.On June 16, 2015, Zhong Chuan Rui You signed a cooperation agreement with Shenzhen Hua Xun Fang Zhou Technology Co., Ltd. (“Shenzhen Hua Xun”) andXuesong Song, a major shareholder of C Media Limited. Pursuant to this agreement, Zhong Chuan Rui You procures equipment from Shenzhen Hua Xun. XuesongSong acts as a joint liability guarantor for the entire debts of Zhong Chuan Rui You under this agreement. As Zhong Chuan Rui You did not make the payments onthe due dates, Shenzhen Hua Xun filed a lawsuit with Shenzhen Baoan District People’s Court on May 31, 2016. On November 1, 2016, Zhong Chuan Rui You,Xuesong Song and Shenzhen Hua Xun reached a settlement in Shenzhen Baoan District People’s Court to settle $1,735,389 (RMB11,355,000) in four instalments. OnDecember 30, 2017, the debt was assigned to C Media Limited.NOTE 14 – SUBSEQUENT EVENTThe Group has evaluated all events or transactions that occurred after December 31, 2017 through May 25, 2018, which is the date that the financial statements wereavailable to be issued.F22EX1.1 2 f20f2017ex11_luokung.htm AMENDED AND RESTATED MEMORANDUM OF ASSOCIATION AND ARTICLES OF ASSOCIATION OF LUOKUNGTECHNOLOGY CORP., DATED AUGUST 20, 2018, AND AS CURRENTLY IN EFFECTExhibit 1.1BC NO: 1553620British Virgin IslandsThe BVI Business Companies Act, 2004(No. 16 of 2004)Memorandum of AssociationandArticles of AssociationofLuokung Technology Corp.Incorporated the 24th day of October, 2009Amended and Restated the 11th Day of December 2009Amended and Restated the 17th Day of December 2009Amended and Restated the 25th Day of March 2010Amended and Restated the 21st day of May 2018Amended and restated the 17 August 2018Amended and restated the 21 August 2018Portcullis (BVI) LimitedPortcullis Chambers4th Floor Ellen Skelton Building3076 Sir Francis Drake HighwayRoad Town, TortolaBritish Virgin IslandsTERRITORY OF THE BRITISH VIRGIN ISLANDSTHE BVI BUSINESS COMPANIES ACT, 2004(No. 16 of 2004)MEMORANDUM OF ASSOCIATIONOFLuokung Technology Corp.NAME1.The name of the Company is Luokung Technology Corp.TYPE OF COMPANY2.The Company is a company limited by shares.REGISTERED OFFICE3.The first Registered Office of the Company is the offices of Portcullis TrustNet (BVI) Limited, Portcullis TrustNet Chambers, P.O. Box 3444, Road Town,Tortola, British Virgin Islands, the office of the registered agent.3.1The current Registered Office of the Company is Portcullis Chambers, 4th Floor Ellen Skelton Building, 3076 SirFrancis Drake Highway, Road Town,Tortola, British Virgin Islands VG1110.REGISTERED AGENT4.The first Registered Agent of the Company is Portcullis TrustNet (BVI) Limited of Portcullis TrustNet Chambers, P.O. Box 3444, Road Town, Tortola,British Virgin Islands.4.1The current Registered Agent of the Company is Portcullis (BVI) Ltd of Portcullis Chambers, 4th Floor Ellen Skelton Building, 3076 Sir Francis DrakeHighway, Road Town, Tortola, British Virgin Islands VG1110.AUTHORISED NUMBER OF SHARES5.The Company is authorised to issue a maximum of 251,000,000 shares.CLASSES, NUMBER AND PAR VALUE OF SHARES6.As at the date of adoption of this memorandum, the Company is authorised to issue (a) 250,000,000 ordinary shares without par value (“OrdinaryShares”); and (b) 1,000,000 preferred shares without par value (“Preferred Shares”).FRACTIONAL SHARES7.The Company may issue fractions of a share and a fractional share shall have the same corresponding fractional liabilities, limitations, preferences,privileges, qualifications, restrictions, rights and other attributes of a whole share of the same class or series of shares.RIGHTS, PRIVILEGES, RESTRICTIONS AND CONDITIONS ATTACHING TO SHARES8.(1)Subject to the memorandum and articles of association (and, for greater clarity, without prejudice to any special rights conferred thereby on theholders of any other shares), an Ordinary Share of the Company confers on the holder;(a)the right to one vote at a meeting of the members of the Company or on any Resolution of Members;(b)the right to an equal share in any Distribution paid by the Company; and(c)the right to an equal share in the distribution of the surplus assets of the Company on a winding up.(2)Subject to the memorandum and articles of association (and, for greater clarity, without prejudice to any special rights conferred thereby on theholders of any other shares), a Preferred Share of the Company confers on the holder;(a)the right to 399 votes at a meeting of the members of the Company or on any Resolution of Members;(b)the right to an equal share in any Distribution paid by the Company;(c)the right to an equal share in the distribution of the surplus assets of the Company on its liquidation.(d)be freely transferable, in whole or in part, by Mr. Xuesong Song to any third party through one or more Private Transactions, subject toApplicable Law; and(e)be freely transferable, in whole or in part, by Mr. Xuesong Song to any third party through one or more Public Transactions, subject to ApplicableLaw and Automatic Conversion of such Preferred Share(s) into Ordinary Share(s).(3)The directors may at their discretion by resolution of directors redeem, purchase or otherwise acquire all or any of the shares in the Companysubject to the Articles..VARIATION OF CLASS RIGHTS9.If at any time the issued shares are divided into different classes or series of shares, the rights attached to any class or series (unless otherwise providedby the terms of issue of the shares of that class or series) may, whether or not the Company is being wound up, be varied with the consent in writing of theholders of not less than threefourths of the issued shares of that class or series and of the holders of not less than threefourths of the issued shares ofany other class or series of shares which may be affected by such variation.RIGHTS NOT VARIED BY THE ISSUE OF SHARES PARI PASSU10.The rights conferred upon the holders of the shares of any class issued with preferred or other rights shall not, unless otherwise expressly provided by theterms of issue of the shares of that class, be deemed to be varied by the creation or issue of further shares ranking pari passu therewith.CAPACITY AND POWERS11.Subject to the Act, any other British Virgin Islands legislation and paragraph 12 below the Company has, irrespective of corporate benefit:(a)full capacity to carry on or undertake any business or activity, do any act or enter into any transaction;(b)for the purposes of paragraph (a), full rights, powers and privileges; and(c)full powers to issue shares with preemptive rights, subject to the Articles.2LIMITATIONS ON THE COMPANY’S BUSINESS12.For the purposes of section 9(4) of the Act the Company may not;(a)carry on banking or trust business, unless it is licensed to do so under the Banks and Trust Companies Act, 1990;(b)carry on business as an insurance or reinsurance company, insurance agent or insurance broker, unless it is licensed under the Insurance Act1994;(c)carry on business of company management, unless it is licensed under the Company Management Act, 1990;(d)carry on the business of providing the registered office or the registered agent for companies incorporated in the British Virgin Islands;(e)carry on the business as a mutual fund, manager of mutual funds or administrator of mutual funds unless it is recognized or licenced as the casemay be under the Mutual Funds Act 1996; or(f)carry on any other business that gives rise to a licencing requirement under any law for the time being in force in the British Virgin Islands unlessit is licenced, regulated, recognised or otherwise approved pursuant to such law.REGISTERED SHARES AND PROHIBITION ON ISSUE OF BEARER SHARES13.Shares in the Company may only be issued as registered shares. The issue of shares to bearer is prohibited.PROHIBITION ON EXCHANGE AND CONVERSION OF REGISTERED SHARES TO BEARER SHARES14.The exchange or conversion of registered shares to bearer shares is prohibited.TRANSFER OF REGISTERED SHARES15.Subject to the provisions of the Articles the Company may upon receipt of an instrument of transfer enter the name of the transferee in the register ofmembers subject to the prior or simultaneous approval of the Company as evidenced by a resolution of directors or by a resolution of members. Subject toany resolution of the members to the contrary, the directors may resolve by resolution of directors to refuse or delay the registration of the transfer forreasons that shall be specified in the resolution of directors.AMENDMENT OF MEMORANDUM AND ARTICLES OF ASSOCIATION16.1The Company may amend its Memorandum or Articles by a resolution of members or by a resolution of directors provided that the directors shall not havethe power to amend the Memorandum or Articles;(a)to restrict the rights or powers of the members to amend the Memorandum or Articles;(b)to change the percentage of members required to pass a resolution to amend the Memorandum or Articles;(c)in circumstances where the Memorandum or Articles cannot be amended by the members; or(d)to Clauses 8, 9, 10 or this Clause 12.16.2No amendment may be made to Regulation 76 of the Articles unless approved by an affirmative vote of the holders of 66 2/3 percent or more of theoutstanding votes of the shares entitled to vote thereon.3DEFINITIONS17.The meanings of words in this Memorandum are as defined in the Articles.We, Portcullis TrustNet (BVI) Limited of Portcullis TrustNet Chambers, P.O. Box 3444, Road Town, Tortola, British Virgin Islands for the purpose ofincorporating a BVI Business Company under the laws of the British Virgin Islands hereby sign this Memorandum of Association the 27th day of October,2009.Incorporator/s/ Nicole WheatleyPortcullis TrustNet (BVI) LimitedPortcullis TrustNet ChambersP.O. Box 3444Road Town, TortolaBritish Virgin Islands(Sgd. Nicole Wheatley)4TERRITORY OF THE BRITISH VIRGIN ISLANDSTHE BVI BUSINESS COMPANIES ACT, 2004(No. 16 of 2004)ARTICLES OF ASSOCIATIONOFLuokung Technology Corp.PRELIMINARY1.In these Articles, if not inconsistent with the subject or context, the words and expressions standing in the first column of the following table shall bear themeanings set opposite them respectively in the second column thereof.WordsMeaningApplicable Lawall Laws, including those of a jurisdiction in or outside of the United States, applicable to the Private orPublic Transactions.Actthe BVI Business Companies Act, 2004 (No 16 of 2004.) including any modification, extension, reenactment or renewal thereof and any regulations made thereunder.Articlesthese Articles of Association as originally framed or as from time to time amended.Automatic Conversioneach Preferred Share shall be automatically converted at any time after issue and without the payment ofany additional sum into an equal number of fully paid Ordinary Shares upon the conclusion of anytransfer by Mr. Xuesong Song to any third party through one or more Public Transactions.Designated Stock Exchangeeither the Nasdaq National Stock Market, Inc. or such other exchange or quotation bureau on which, theCompany’s Securities are listed or traded; provided that until the Securities are listed on any such“Exchange” the rules of any such Designated Stock Exchange shall be inapplicable to these Articles.directora director of the Company.distributionin relation to a distribution by a company to a member, means(i)the direct or indirect transfer of an asset, other than the Company’s own shares, to or forthe benefit of the member or(ii)the incurring of a debt to or for the benefit of a member,in relation to shares held by a member, and whether by means of a purchase of an asset, the purchase,redemption or other acquisition of shares, a transfer of indebtedness or otherwise, and includes adividend.Independent Directora person who meets the then current requirements for “independence” of the applicable rules andregulations of the U.S. Securities and Exchange Commission and the Designated Stock Exchange.5member or shareholderin relation to the Company, means a person whose name is entered in the register of members as theholder of one or more shares, or fractional shares, in the Company.Memorandumthe Memorandum of Association of the Company as originally framed or as from time to time amended.Mr. Xuesong Songthe founder, a director and Chairman of LK Technology Ltd.Ordinary Sharesissued or unissued ordinary shares of no par value of the Company having the rights, preferences andprivileges set out in the MemorandumPersonAn individual, a corporation, a trust, trustee, the estate of a deceased individual, a partnership or anunincorporated association of persons.Preferred Sharesissued or unissued preferred shares of no par value of the Company having the rights, preferences andprivileges set out in the MemorandumPrivate Transactionstransactions that are not considered as a Public Transaction.Public Transactionstransactions through any national securities exchanges and/or through the automated quotation systemincluding but not limited to NASDAQ, NYSE (including NYSE American) or OTC Markets, or anytransaction executed by the broker or with a market maker.Related Party(a) any director, officer and employee of the Company; (b) any family member of such director, officer andemployee; and (c) any entity (e.g. a corporation, partnership, or trust) controlled by or set up for thebenefit of a director, officer or employee, or a family member of such director, officer or employee.Relevant SystemA facility for the electronic transfer of uncertificated securities administered by The Depository TrustCompany or such other Person regulated by the SEC.resolution of directors(a)A resolution approved at a duly convened and constituted meeting of directors of the Companyor of a committee of directors of the Company by the affirmative vote of a simple majority of thedirectors present at the meeting who voted and did not abstain; or(b)a resolution consented to in writing by a simple majority of the directors or of all members of thecommittee, as the case may be;except that where a director is given more than one vote, he shall be counted by the number ofvotes he casts for the purpose of establishing a majority.resolution of membersSubject to the provisions of the Memorandum and Articles means:(a)A resolution approved at a duly convened and constituted meeting of the members of theCompany by the affirmative vote of(i)a majority of in excess of 50% of the votes of the shares entitled to vote and voting onthe resolution, or(ii)a majority of in excess of 50% of the votes of each class or series of shares entitled tovote as a class or series and voting on the resolution and a majority of in excess of 50%of the votes of the remaining shares entitled to vote and voting on the resolution; or6(b)a resolution consented to in writing by(i)an absolute majority of the votes of shares entitled to vote thereon, or(ii)an absolute majority of the votes of each class or series of shares entitled to votethereon as a class or series and of an absolute majority of the votes of the remainingshares entitled to vote thereon.SealAny Seal which has been duly adopted as the common seal of the Company.SECThe United States Securities and Exchange Commission.Securitiesshares and debt obligations of every kind, and options, warrants and rights to acquire shares, or debtobligations.SharesOrdinary Shares and/or Preferred Shares, as the case may be.solvency testa company satisfies the solvency test if;(i)the value of the company’s assets exceeds its liabilities, and(ii)the company is able to pay its debts as they fall due.treasury sharesshares in the Company that were previously issued but were repurchased, redeemed or otherwiseacquired by the Company and not cancelled.2.“Written” or any term of like import includes words typewritten, printed, painted, engraved, lithographed, photographed or represented or reproduced byany mode of reproducing words in a visible form, including telex, facsimile, telegram, cable or other form of writing produced by electronic communication.3.Save as aforesaid any words or expressions defined in the Act shall bear the same meaning in these Articles.4.Whenever the singular or plural number, or the masculine, feminine or neuter gender is used in these Articles, it shall equally, where the context admits,include the others.5.A reference in these Articles to voting in relation to shares shall be construed as a reference to voting by members holding the shares except that it is thevotes allocated to the shares that shall be counted and not the number of members who actually voted and a reference to shares being present at a meetingshall be given a corresponding construction.6.A reference to money in these Articles is, unless otherwise stated, a reference to the currency in which shares in the Company shall be issued according tothe provisions of the Memorandum.7REGISTERED SHARES7.Every member holding registered shares in the Company shall be entitled to a certificate signed by a director or officer of the Company or such otherperson who may be authorised from time to time by resolution of directors or under the Seal, with or without the signature of any director of the Company,specifying the share or shares held by him and the signature of the director or officer or person so authorised and the Seal may be facsimiles.8.Any member receiving a share certificate for registered shares shall indemnify and hold the Company and its directors and officers harmless from any lossor liability which it or they may incur by reason of any wrongful or fraudulent use or representation made by any person by virtue of the possessionthereof. If a share certificate for registered shares is worn out or lost it may be renewed on production of the worn out certificate or on satisfactory proof ofits loss together with such indemnity as may be required by a resolution of directors.9.If several persons are registered as joint holders of any shares, any one of such persons may give an effectual receipt for any distribution payable inrespect of such shares.10.Nothing in these Articles shall require title to any shares or other Securities to be evidenced by a certificate if the Act and the rules of the Designated StockExchange permit otherwise.SHARES AND ISSUED SHARES11.Subject to the provisions of these Articles and, if applicable, the rules of the Designated Stock Exchange, and any resolution of members, the directors ofthe Company may, without limiting or affecting any rights previously conferred on the holders of any existing shares or class or series of shares, offer, allot,grant options over or otherwise dispose of shares to such persons, at such times and upon such terms and conditions as the Company may by resolutionof directors determine. The directors shall not issue more shares than the maximum number provided for in the Memorandum.12.The Company may issue fully paid, partly paid or nil paid shares as well as bonus shares. A partly paid or nil paid share or a share issued for a promissorynote or other written obligation for payment of a debt may be issued subject to forfeiture in the manner prescribed in these Articles.13.Shares in the Company may be issued for consideration in any form, including money, a promissory note or other obligation to contribute money orproperty, real property, personal property (including goodwill and knowhow) services rendered or a contract for future services and the amount of suchconsideration shall be determined by resolution of directors, except that in the case of shares with par value, the amount shall not be less than the parvalue, and in the absence of fraud the decision of the directors as to the value of the consideration received by the Company in respect of the issue isconclusive unless a question of law is involved.14.Before issuing shares for a consideration other than money, the directors shall pass a resolution stating;(a)the amount to be credited for the issue of the shares;(b)their determination of the reasonable present cash value of the nonmoney consideration for the issue; and(c)that, in their opinion, the present cash value of the nonmoney consideration for the issue is not less than the amount to be credited for the issueof the shares.15.A share issued by the Company upon conversion of, or in exchange for, another share or a debt obligation or other security in the Company, shall betreated for all purposes as having been issued for money equal to the consideration received or deemed to have been received by the Company in respectof the other share, debt obligation or security.16.Treasury shares may be disposed of by the Company on such terms and conditions (not otherwise inconsistent with these Articles) as the Company mayby resolution of directors determine.17.Subject to these Articles, the Company may purchase, redeem or otherwise acquire and hold its own shares save that the Company may not purchase,redeem or otherwise acquire its own shares without the consent of the member whose shares are to be purchased, redeemed or otherwise acquired unlessthe Company is permitted by the Act or any other provision in the Memorandum or Articles to purchase, redeem or otherwise acquire the shares withouttheir consent.818.No purchase, redemption or other acquisition of shares shall be made unless the directors determine by resolution of the directors that immediately after thepurchase, redemption or other acquisition the value of the Company’s assets will exceed its liabilities and the Company will be able to pay its debts as theyfall due.19.Sections 60 (Process for acquisition of own shares), 61 (Offer to one or more shareholders) and 62 (Shares redeemed otherwise than at the option ofcompany) of the Act shall not apply to the Company.20.A determination by the directors under Article 18 is not required;(a)the Company redeems a share or shares pursuant to a right of a member to have his shares redeemed or to have his shares exchanged for moneyor other property of the Company; or(b)by virtue of the provisions of Section 179 of the Act.21.Shares that the Company purchases, redeems or otherwise acquires pursuant to Article 17 may be cancelled or held as treasury shares except to the extentthat such shares are in excess of 80 percent of the issued shares of the Company in which case they shall be cancelled but they shall be available forreissue.22.Shares in the Company shall only be held as treasury shares where the directors of the Company resolve as such and the number of shares acquired, whenaggregated with shares of the same class already held by the Company as treasury shares, does not exceed 50% of the shares of that class previouslyissued by the Company, excluding shares that have been cancelled. All rights and obligations attaching to a treasury share are suspended and shall not beexercised by or against the Company while it holds the share as a treasury share. Treasury shares may be reissued by the Company as new shares.23.The Company shall keep a register of members containing;(a)the names and addresses of the persons who hold registered shares in the Company;(b)the number of each class and series of registered shares held by each member;(c)the date on which the name of each member was entered in the register of members;(d)the date on which any person ceased to be a member; and(e)such other information as may be prescribed pursuant to the Act.24.The register of members may be in any such form as the directors may approve but if it is in magnetic, electronic or other data storage form, the companymust be able to produce legible evidence of its contents.25.The original or a copy of the register of members shall be kept at the registered office of the Company or at the office of the registered agent of theCompany.26.A share is deemed to be issued when the name of the member is entered in the register of members.27.Subject to the Act and the rules of the Designated Stock Exchange, the board of directors without further consultation with the holders of any shares orSecurities may resolve that any class or series of shares or other Securities from time to time in issue or to be issued (including shares in issue at the date ofthe adoption of these Articles) may be issued, held, registered and converted to uncertificated form.28.Conversion of shares held in certificated form into shares held in uncertificated form, and vice versa, may be made in such manner as the board of directors,in its absolute discretion, may think fit. The Company or any duly authorised transfer agent (a “Transfer Agent”) shall enter on the register of membershow many shares are held by each member in uncertificated form and in certificated form and shall maintain the register of members. Notwithstanding anyprovision of these Articles, a class or series of shares shall not be treated as two classes by virtue only of that class or series comprising both certificatedshares and uncertificated Shares or as a result of any provision of these Articles which apply only in respect of certificated or uncertificated shares.9MORTGAGES AND CHARGES OF REGISTERED SHARES29.Members may mortgage or charge their registered shares in the Company with such mortgage or charge being evidenced in writing and signed by, or withthe authority of the registered holder of a registered share to which the mortgage or charge relates. The Company shall give effect to the terms of any validmortgage or charge except insofar as it may conflict with any requirements herein contained for consent to the transfer of shares.30.In the case of the mortgage or charge of registered shares there may be entered in the share register of the Company at the request of the registered holderof such shares(a)a statement that the shares are mortgaged or charged;(b)the name of the mortgagee or chargee; and(c)the date on which the aforesaid particulars are entered in the share register.31.Where particulars of a mortgage or charge are entered in the register of members, such particulars shall be cancelled(a)with the written consent of the named mortgagee or chargee or anyone authorized to act on his behalf; or(b)upon evidence satisfactory to the directors of the discharge of the liability secured by the mortgage or charge and the issue of such indemnities asthe directors shall consider necessary or desirable.32.Whilst particulars of a mortgage or charge over registered shares are entered in the register of members pursuant to the preceding articles no transfer ofany share comprised therein shall be effected without the written consent of the named mortgagee or chargee or anyone authorized to act on his behalf.FORFEITURE33.When shares not fully paid on issue or issued for a promissory note or other written obligation for payment of a debt have been issued subject toforfeiture, the following provisions shall apply.34.Written notice specifying a date for payment to be made and the shares in respect of which payment is to be made shall be served on the member whodefaults in making payment pursuant to a promissory note or other written obligations to pay a debt.35.The written notice specifying a date for payment shall(a)name a further date not earlier than the expiration of 14 days from the date of service of the notice on or before which payment required by thenotice is to be made; and(b)contain a statement that in the event of nonpayment at or before the time named in the notice the shares, or any of them, in respect of whichpayment is not made will be liable to be forfeited.36.Where a written notice has been issued and the requirements of the notice have not been complied with within the prescribed time, the directors may at anytime before tender of payment forfeit and cancel the shares to which the notice relates.37.The Company is under no obligation to refund any moneys to the member whose shares have been forfeited and cancelled pursuant to these provisions.Upon forfeiture and cancellation of the shares the member is discharged from any further obligation to the Company with respect to the shares forfeitedand cancelled.10LIEN38.The Company shall have a first and paramount lien on every share issued for a promissory note or for any other binding obligation to contribute money orproperty or any combination thereof to the Company, and the Company shall also have a first and paramount lien on every share standing registered in thename of a member, whether singly or jointly with any other person or persons, for all the debts and liabilities of such member or his estate to the Company,whether the same shall have been incurred before or after notice to the Company of any interest of any person other than such member, and whether thetime for the payment or discharge of the same shall have actually arrived or not, and notwithstanding that the same are joint debts or liabilities of suchmember or his estate and any other person, whether a member of the Company or not. The Company’s lien on a share shall extend to all distributionspayable thereon. The directors may at any time either generally, or in any particular case, waive any lien that has arisen or declare any share to be wholly orin part exempt from the provisions of this Article.39.In the absence of express provisions regarding sale in the promissory note or other binding obligation to contribute money or property, the Company maysell, in such manner as the directors may by resolution of directors determine, any share on which the Company has a lien, but no sale shall be made unlesssome sum in respect of which the lien exists is presently payable nor until the expiration of twentyone days after a notice in writing, stating and demandingpayment of the sum presently payable and giving notice of the intention to sell in default of such payment, has been served on the holder for the timebeing of the share.40.The net proceeds of the sale by the Company of any shares on which it has a lien shall be applied in or towards payment of discharge of the promissorynote or other binding obligation to contribute money or property or any combination thereof in respect of which the lien exists so far as the same ispresently payable and any residue shall (subject to a like lien for debts or liabilities not presently payable as existed upon the share prior to the sale) bepaid to the holder of the share immediately before such sale. For giving effect to any such sale the directors may authorize some person to transfer theshare sold to the purchaser thereof. The purchaser shall be registered as the holder of the share and he shall not be bound to see to the application of thepurchase money, nor shall his title to the share be affected by any irregularity or invalidity in the proceedings in reference to the sale.TRANSFER OF SHARES41.Registered shares in the Company are transferred by a written instrument of transfer signed by the transferor and containing the name and address of thetransferee. The instrument of transfer shall be signed by the transferee if registration as a holder of the share shall impose a liability to the Company on thetransferee. The instrument of transfer of a registered share shall be sent to the Company for registration.42.The board of directors may resolve that interests in shares in the form of depositary receipts may be transferred or otherwise dealt with in accordance withthe regulations and practices instituted by the operator of the Relevant System and any holder of interests in shares shall be entitled to transfer suchinterests by means of such Relevant System and the operator of the Relevant System shall act as agent of the holders of such interests for the purposes ofthe transfer of those interests.43.The register of members may be closed at such times and for such periods as the board of directors may from time to time determine, upon notice beinggiven by advertisement in such newspapers as may be required by the Act and the practice of the Designated Stock Exchange.44.The transfer of a registered share is effective when the name of the transferee is entered on the register of members.45.If the directors of the Company are satisfied that an instrument of transfer relating to shares has been signed but that the instrument has been lost ordestroyed, they may resolve;(a)to accept such evidence of the transfer of the shares as they consider appropriate; and(b)that the transferee’s name should be entered in the register of members notwithstanding the absence of the instrument of transfer.46.The Company must on the receipt of an instrument of transfer from the transferor or transferee of a registered share in the Company enter the name of thetransferee of the share in the register or members unless the directors, if permitted by the Memorandum or these Articles, resolve by resolution of directorsto refuse or delay the registration of the transfer for reasons that shall be specified in the resolution of directors.11TRANSMISSION OF SHARES47.The personal representative of a deceased member may transfer a share even though the personal representative is not a member at the time of the transfer.48.The personal representative, executor or administrator of a deceased member, the guardian of an incompetent member or the trustee of a bankrupt membershall be the only person recognized by the Company as having any title to his share but they shall not be entitled to exercise any rights as a member of theCompany until they have proceeded as set forth in the next following three Articles.49.The production to the Company of any document which is evidence of probate of the will, or letters of administration of the estate, or confirmation asexecutor, of a deceased member or of the appointment of a guardian of an incompetent member or the trustee of a bankrupt member shall be accepted by theCompany even if the deceased, incompetent or bankrupt member is domiciled outside the British Virgin Islands if the document evidencing the grant ofprobate or letters of administration, confirmation as executor, appointment as guardian or trustee in bankruptcy is issued by a foreign court which hadcompetent jurisdiction in the matter. For the purpose of establishing whether or not a foreign court had competent jurisdiction in such a matter the directorsmay obtain appropriate legal advice. The directors may also require an indemnity to be given by the executor, administrator, guardian or trustee inbankruptcy.50.The Company may enter in the register of members the name of any person becoming entitled by operation of law or otherwise to a share or shares inconsequence of the death, incompetence or bankruptcy upon such evidence being produced as may reasonably be required by the directors.51.Any person who has become entitled to a share or shares in consequence of the death, incompetence or bankruptcy of any member may, instead of beingregistered himself, request in writing that some person to be named by him be registered as the transferee of such share or shares and such request shalllikewise be treated as if it were a transfer.52.What amounts to incompetence on the part of a person is a matter to be determined by the court having regard to all the relevant evidence and thecircumstances of the case.REDUCTION OR INCREASE IN AUTHORISED AND UNISSUED SHARES48.The Company may amend the Memorandum to increase or reduce the maximum number of shares the Company is authorised to issue and may in respect ofany unissued shares increase or reduce the number of such shares, or effect any combination of the foregoing.49.The Company may(1)(a) divide its shares, including issued shares, into a larger number of shares; or (b) combine its shares, including issued shares, into a smallernumber of shares.(2)A division or combination of shares, including issued shares, of a class or series shall be for a larger or smaller number, as the case may be, ofshares in the same class or series.(3)A company shall not divide its shares under subsection (1)(a) or (2) if it would cause the maximum number of shares that the Company isauthorised to issue by its memorandum to be exceeded.(4)Where shares are divided or combined under this article, the aggregate par value of the new shares must be equal to the aggregate par value of theoriginal shares.MEETINGS AND CONSENTS OF MEMBERS50.The directors of the Company may convene meetings of the members of the Company at such times and in such manner and places within or outside theBritish Virgin Islands as the directors consider necessary or desirable. The Company may hold an annual general meeting, but shall not (unless required bythe applicable rules of the Designated Stock Exchange for so long as the Company’s Securities are listed or traded on the Designated Stock Exchange) beobliged to hold an annual general meeting.51.Upon the written request of members holding 30 percent or more of the outstanding voting shares in the Company the directors shall convene a meeting ofmembers.1252.The directors shall give not less than 7 days notice of meetings of members to those persons whose names on the date the notice is given appear asmembers in the share register of the Company and are entitled to vote at the meeting.53.The directors may fix the date notice is given of a meeting of members as the record date for determining those shares that are entitled to vote at themeeting.54.A meeting of members may be called on short notice:(a)if members holding not less than 90 percent of the total number of shares entitled to vote on all matters to be considered at the meeting, or 90percent of the votes of each class or series of shares where members are entitled to vote thereon as a class or series together with not less than a90 percent majority of the remaining votes, have agreed to short notice of the meeting, or(b)if all members holding shares entitled to vote on all or any matters to be considered at the meeting have waived notice of the meeting and for thispurpose presence at the meeting shall be deemed to constitute waiver.55.The inadvertent failure of the directors to give notice of a meeting to a member, or the fact that a member has not received notice, does not invalidate themeeting.56.A member may be represented at a meeting of members by a proxy who may speak and vote on behalf of the member.57.The instrument appointing a proxy shall be produced at the place appointed for the meeting before the time for holding the meeting at which the personnamed in such instrument proposes to vote.58.An instrument appointing a proxy shall be in substantially the following form or such other form as the Chairman of the meeting shall accept as properlyevidencing the wishes of the member appointing the proxy.(Name of Company)I/Webeing a member of the aboveCompany withshares HEREBY APPOINTofor failing himofto be my/our proxy to vote for me/us at the meeting of members to be held on the dayofand at any adjournment thereof.(Any restrictions on voting to be inserted here.)Signed this day ofMember59.The following shall apply in respect of joint ownership of shares:a.if two or more persons hold shares jointly each of them may be present in person or by proxy at a meeting of members and may speak as a member;b.if only one of the joint owners is present in person or by proxy he may vote on behalf of all joint owners, andc.if two or more of the joint owners are present in person or by proxy they must vote as one.60.A member shall be deemed to be present at a meeting of members if he participates by telephone or other electronic means and all members participating inthe meeting are able to hear each other.61.A meeting of members is duly constituted if, at the commencement of the meeting, there are present in person or by proxy not less than 50 percent of thevotes of the shares or class or series of shares entitled to vote on resolutions of members to be considered at the meeting. If a quorum be present,notwithstanding the fact that such quorum may be represented by only one person then such person may resolve any matter and a certificate signed bysuch person accompanied where such person be a proxy by a copy of the proxy form shall constitute a valid resolution of members.1362.If within two hours from the time appointed for the meeting a quorum is not present, the meeting, if convened upon the requisition of members, shall bedissolved; in any other case it shall stand adjourned to the next business day at the same time and place or to such other time and place as the directorsmay determine, and if at the adjourned meeting there are present within one hour from the time appointed for the meeting in person or by proxy not lessthan one third of the votes of the shares or each class or series of shares entitled to vote on the resolutions to be considered by the meeting, those presentshall constitute a quorum but otherwise the meeting shall be dissolved.63.At every meeting of members, the Chairman of the Board of Directors shall preside as chairman of the meeting. If there is no Chairman of the Board ofDirectors or if the Chairman of the Board of Directors is not present at the meeting, the members present shall choose some one of their number to be thechairman. If the members are unable to choose a chairman for any reason, then the person representing the greatest number of voting shares present inperson or by prescribed form of proxy at the meeting shall preside as chairman failing which the oldest individual member or representative of a memberpresent shall take the chair.64.The chairman may, with the consent of the meeting, adjourn any meeting from time to time, and from place to place, but no business shall be transacted atany adjourned meeting other than the business left unfinished at the meeting from which the adjournment took place.65.At any meeting of the members the chairman shall be responsible for deciding in such manner as he shall consider appropriate whether any resolution hasbeen carried or not and the result of his decision shall be announced to the meeting and recorded in the minutes thereof. If the chairman shall have anydoubt as to the outcome of any resolution put to the vote, he shall cause a poll to be taken of all votes cast upon such resolution, but if the chairman shallfail to take a poll then any member present in person or by proxy who disputes the announcement by the chairman of the result of any vote mayimmediately following such announcement demand that a poll be taken and the chairman shall thereupon cause a poll to be taken. If a poll is taken at anymeeting, the result thereof shall be duly recorded in the minutes of that meeting by the chairman.66.Any person other than an individual shall be regarded as one member and subject to the specific provisions hereinafter contained for the appointment ofrepresentatives of such persons the right of any individual to speak for or represent such member shall be determined by the law of the jurisdiction where,and by the documents by which, the person is constituted or derives its existence. In case of doubt, the directors may in good faith seek legal advice fromany qualified person and unless and until a court of competent jurisdiction shall otherwise rule, the directors may rely and act upon such advice withoutincurring any liability to any member.67.Any person other than an individual which is a member of the Company may by resolution of its directors or other governing body authorize such personas it thinks fit to act as its representative at any meeting of the Company or of any class of members of the Company, and the person so authorized shall beentitled to exercise the same powers on behalf of the person which he represents as that person could exercise if it were an individual member of theCompany.68.The chairman of any meeting at which a vote is cast by proxy or on behalf of any person other than an individual may call for a notarially certified copy ofsuch proxy or authority which shall be produced within 7 days of being so requested or the votes cast by such proxy or on behalf of such person shall bedisregarded.69.Directors of the Company may attend and speak at any meeting of members of the Company and at any separate meeting of the holders of any class orseries of shares in the Company.70.An action that may be taken by the members at a meeting may also be taken by a resolution of members consented to in writing or by telex, telegram, cable,facsimile or other written electronic communication, without the need for any notice, but if any resolution of members is adopted otherwise than by theunanimous written consent of all members, a copy of such resolution shall forthwith be sent to all members not consenting to such resolution. The consentmay be in the form of counterparts, each counterpart being signed by one or more members.14DIRECTORS71.The first directors of the Company shall be appointed by the first registered agent of the Company and thereafter the directors shall be appointed byresolution of members, subject to Article 78, for such term as the members determine. A person shall not be appointed as a director unless he hasconsented in writing to be a director.72.The minimum number of directors shall be one and the maximum number shall be 20. Unless otherwise determined by the Company in a meeting ofshareholders and subject to the requirements of the Memorandum, the directors may by a Resolution of Directors, amend this Regulation 72 to change thenumber of directors. For as long as Securities of the Company are listed or traded on the Designated Stock Exchange, the directors shall include suchnumber of Independent Directors as applicable law, rules or regulations of the Designated Stock Exchange may require for a foreign private issuer as longas the Company is a foreign private issuer.73.Each director shall hold office for the term, if any, fixed by resolution of members or until his earlier death, resignation or removal.74.Where the Company has only one member who is an individual and that member is also the sole director of the Company, that sole member/director may, byinstrument in writing, nominate a person who is not disqualified from being a director of the Company under section 111(1) of the Act as a reserve directorof the Company to act in the place of the sole director in the event of his death.75.The nomination of a person as a reserve director of the Company ceases to have effect if;a.before the death of the sole member/director who nominated him;(i)he resigns as reserve director, or(ii)the sole member/director revokes the nomination in writing; orb.the sole member/director who nominated him ceases to be the sole member/director of the Company for any reason other than his death.76.A director may be removed from office, with or without cause, by a resolution of directors or a resolution of members. For the purposes of this Regulation76, “cause” means the willful and continuous failure by a director to substantially perform his duties to the Company (other than any such failure resultingfrom incapacity due to physical or mental illness) or the willful engaging by the director in gross misconduct materially and demonstrably injurious to theCompany. If a director is removed from office without cause by a resolution of the members, for the purposes of this Regulation, the resolution of memberswill require the affirmative vote of the holders of 66 2/3 percent or more of the outstanding votes of the shares entitled to vote thereon.77.A director may resign his office by giving written notice of his resignation to the Company and the resignation shall have effect from the date the notice isreceived by the Company or from such later date as may be specified in the notice. A director of the Company shall resign forthwith if he is, or becomes,disqualified to act as a director under the Act.78.The directors may at any time by resolution of directors appoint any person to be a director to fill a vacancy. There is a vacancy if a director dies orotherwise ceases to hold office as a director prior to the expiration of his term of office, where his term of office was fixed upon his appointment. Thedirectors may not appoint a director to fill a vacancy for a term exceeding the term that remained when the person who has ceased to be a director left orotherwise ceased to hold office.79.The Company shall keep a register of directors containing:a.the names and addresses of the persons who are directors of the Company or who have been nominated as reserve directors of the Company;b.the date on which each person whose name is entered in the register was appointed as a director of the Company or nominated as a reservedirector of the Company;c.the date on which each person named as a director ceased to be a director of the Company;d.the date on which the nomination of any person nominated as a reserve director ceased to have effect; ande.such other information as may be prescribed pursuant to the Act.1580.The original or a copy of any register of directors shall be kept at the office of the registered agent of the Company.81.The register of directors may be in any such form as the directors may approve but if it is in magnetic, electronic or other data storage form, the companymust be able to produce legible evidence of its contents.82.With the prior or subsequent approval by a resolution of members, the directors may, by a resolution of directors, fix the emoluments of directors withrespect to services to be rendered in any capacity to the Company.83.A director shall not require a share qualification and may be an individual or a company.POWERS OF DIRECTORS84.The business and affairs of the Company shall be managed by the directors who may pay all expenses incurred preliminary to and in connection with theformation and registration of the Company and may exercise all such powers of the Company as are not by the Act or by the Memorandum or theseArticles required to be exercised by the members of the Company, subject to any delegation of such powers as may be authorized by these Articles and tosuch requirements as may be prescribed by a resolution of members; but no requirement made by a resolution of members shall prevail if it be inconsistentwith these Articles nor shall such requirement invalidate any prior act of the directors which would have been valid if such requirement had not been made.Notwithstanding anything in Section 175 of the Act the directors shall have the power to sell, transfer, lease, exchange or otherwise dispose of more thanfifty percent of the assets of the Company without submitting a proposal to or obtaining the consent of the members of the Company.85.If the Company is a whollyowned subsidiary of a holding company a director may when exercising powers or performing duties as a director act in amanner which he believes is in the best interests of the holding company even though it may not be in the best interests of the Company.86.The directors may, by a resolution of directors, appoint any person, including a person who is a director, to be an officer or agent of the Company. Theresolution of directors appointing an agent may authorize the agent to appoint one or more substitutes or delegates to exercise some or all of the powersconferred on the agent by the Company.87.Every officer or agent of the Company has such powers and authority of the directors, including the power and authority to affix the Seal, as are set forth inthese Articles or in the resolution of directors appointing the officer or agent, except that no agent has any power or authority with respect to thefollowing;a.to amend the memorandum or articles;b.to change the registered office or agent;c.to designate committees of directors;d.to delegate powers to a committee of directors;e.to appoint or remove directors;f.to appoint or remove an agent;g.to fix emoluments of directors;h.to approve a plan of merger, consolidation or arrangement;i.to make a declaration of solvency for the purposes of section 198(1)(a) of the Act or to approve a liquidation plan;j.to make a determination under section 57(1) of the Act that the company will, immediately after a proposed distribution, satisfy the solvency test;ork.to authorise the Company to continue as a company incorporated under the laws of a jurisdiction outside the British Virgin Islands.1688.Any director which is a body corporate may appoint any person its duly authorized representative for the purpose of representing it at meetings of theBoard of Directors or with respect to unanimous written consents.89.The continuing directors may act notwithstanding any vacancy in their body, save that if their number is reduced to their knowledge below the numberfixed by or pursuant to these Articles as the necessary quorum for a meeting of directors, the continuing directors or director may act only for the purposeof appointing directors to fill any vacancy that has arisen or for summoning a meeting of members.90.The directors may by resolution of directors exercise all the powers of the Company to borrow money and to mortgage or charge its undertakings andproperty or any part thereof, to issue debentures, debenture stock and other securities whenever money is borrowed or as security for any debt, liability orobligation of the Company or of any third party.91.All cheques, promissory notes, drafts, bills of exchange and other negotiable instruments and all receipts for moneys paid to the Company, shall be signed,drawn, accepted, endorsed or otherwise executed, as the case may be, in such manner as shall from time to time be determined by resolution of directors.92.The Company shall keep a register of all relevant charges created by the Company showing:a.if the charge is a charge created by the Company, the date of its creation or if the charge is existing on property acquired by the Company, the dateon which the property was acquired;b.a short description of the liability secured by the charge;c.a short description of the property charged;d.the name and address of the trustee for the security, or if there is no such trustee the name and address of the chargee;e.unless the charge is a security to bearer, the name and address of the holder of the charge;f.details of any prohibition or restriction , if any, contained in the instrument creating the charge on the power of the company to create any futurecharge ranking in priority to or equally with the charge; andg.such other information as may be prescribed pursuant to the Act.93.The original or a copy of the register of charges shall be kept at the registered office of the Company or at the office of the registered agent of the Company.PROCEEDINGS OF DIRECTORS94.The directors of the Company or any committee thereof may meet at such times and in such manner and places within or outside the British Virgin Islandsas the directors may determine to be necessary or desirable. Any one or more directors may convene a meeting of directors.95.A director shall be deemed to be present at a meeting of directors if he participates by telephone or other electronic means and all directors participating inthe meeting are able to hear each other.96.A director shall be given not less than 3 days notice of meetings of directors, but a meeting of directors held without 3 days notice having been given to alldirectors shall be valid if all the directors entitled to vote at the meeting who do not attend, waive notice of the meeting and for this purpose, the presenceof a director at a meeting shall constitute waiver on his part. The inadvertent failure to give notice of a meeting to a director, or the fact that a director hasnot received the notice, does not invalidate the meeting.1797.A director may by a written instrument appoint an alternate who need not be a director and an alternate is entitled to attend meetings in the absence of thedirector who appointed him and to vote or consent in place of the director.98.A meeting of directors is duly constituted for all purposes if at the commencement of the meeting there are present in person or by alternate not less thanone half of the total number of directors, unless there are only 2 directors in which case the quorum shall be 2.99.If the Company shall have only one director the provisions herein contained for meetings of the directors shall not apply but such sole director shall havefull power to represent and act for the Company in all matters as are not by the Act or the Memorandum or these Articles required to be exercised by themembers of the Company and in lieu of minutes of a meeting shall record in writing and sign a note or memorandum of all matters requiring a resolution ofdirectors. Such a note or memorandum shall constitute sufficient evidence of such resolution for all purposes.100.At every meeting of the directors the Chairman of the Board of Directors shall preside as chairman of the meeting. If there is no Chairman of the Board ofDirectors or if the Chairman of the Board of Directors is not present at the meeting the Vice Chairman of the Board of Directors shall preside. If there is noVice Chairman of the Board of Directors or if the Vice Chairman of the Board of Directors is not present at the meeting the directors present shall choosesome one of their number to be chairman of the meeting.101.An action that may be taken by the directors or a committee of directors at a meeting may also be taken by a resolution of directors or a committee ofdirectors consented to in writing or by telex, telegram, cable, facsimile or other written electronic communication by all directors or all members of thecommittee as the case may be, without the need for any notice. The consent may be in the form of counterparts, each counterpart being signed by one ormore directors.102.The directors shall cause the following records to be kept:a.minutes of all meetings of directors, members, committees of directors and committees of members; andb.copies of all resolutions consented to by directors, members, committees of directors and committees of members.103.The resolutions, records and minutes referred to in the preceding Article shall be kept at the registered office of the Company, its principal place ofbusiness or at such other place as the directors determine.104.The directors may, by resolution of directors, designate one or more committees, each consisting of one or more directors.105.Subject to the following Article, each committee of directors has such powers and authorities of the directors, including the power and authority to affix theSeal, as are set forth in the resolution of directors establishing the committee.106.The directors have no power to delegate the following powers to a committee of directors;a.to amend the memorandum or articles;b.to change the registered office or agent;c.to designate committees of directors;d.to delegate powers to a committee of directors;e.to appoint or remove directors;f.to appoint or remove an agent;g.to fix emoluments of directors;18h.to approve a plan of merger, consolidation or arrangement;i.to make a declaration of solvency for the purposes of section 198(1)(a) or to approve a liquidation plan;j.to make a determination under section 57(1) that the company will, immediately after a proposed distribution, satisfy the solvency test; ork.to authorise the company to continue as a company incorporated under the laws of a jurisdiction outside the British Virgin Islands.Paragraphs (c) and (d) do not prevent a committee of directors, where authorised by the directors, from appointing a subcommittee and delegating powersexercisable by the committee to the subcommittee.107.The meetings and proceedings of each committee of directors consisting of 2 or more directors shall be governed mutatis mutandis by the provisions ofthese Articles regulating the proceedings of directors so far as the same are not superseded by any provisions in the resolution establishing the committee.108.Without prejudice to the freedom of the directors to establish any other committee, if the shares (or depositary receipts therefore) are listed or quoted onthe Designated Stock Exchange, and if required by the Designated Stock Exchange, the directors shall establish and maintain an audit committee as acommittee of the board of directors, the composition and responsibilities of which shall comply with the rules and regulations of the SEC and theDesignated Stock Exchange. The audit committee shall meet at least once every financial quarter, or more frequently as circumstances dictate.109.The Company shall adopt a formal written audit committee charter and review and assess the adequacy of the formal written charter on an annual basis.The charter shall specify the responsibilities of the Audit Committee which shall include responsibility for, among other things, ensuring its receipt from theoutside auditors of the Company of a formal written statement delineating all relationships between the auditor and the Company, and the AuditCommittee’s responsibility for actively engaging in a dialogue with the auditor with respect to any disclosed relationships or services that may impact theobjectivity and independence of the auditor take appropriate action to oversee the independence of the outside auditor. In addition, the Audit Committee isresponsible for reviewing potential conflict of interest situations and approving all Related Party Transactions.110.Without prejudice to the freedom of the directors to establish any other committees, the Board may establish a Stock Option Committee to administer theCompany’s stock option plans, including authority to make and modify awards under such plans. For so long as the Securities of the Company are listed ortraded on the Designated Stock Exchange, the Stock Option Committee shall have at least two Independent Directors. The Stock Option Committee willadminister the Company’s stock option plans, including the authority to make and modify awards under such plans.111.Without prejudice to the freedom of the directors to establish any other committees, the Board may establish a Nominating Committee to assist the Board inidentifying qualified individuals to become members of the Board.OFFICERS112.The Company may by resolution of directors appoint officers of the Company at such times as shall be considered necessary or expedient. Such officersmay consist of a Chairman of the Board of Directors, a Vice Chairman of the Board of Directors, a President and one or more Vice Presidents, Secretaries andTreasurers and such other officers as may from time to time be deemed desirable. Any number of offices may be held by the same person.113.The officers shall perform such duties as shall be prescribed at the time of their appointment subject to any modification in such duties as may beprescribed thereafter by resolution of directors or resolution of members, but in the absence of any specific allocation of duties it shall be the responsibilityof the Chairman of the Board of Directors to preside at meetings of directors and members, the Vice Chairman to act in the absence of the Chairman, thePresident to manage the day to day affairs of the Company, the Vice Presidents to act in order of seniority in the absence of the President but otherwise toperform such duties as may be delegated to them by the President, the Secretaries to maintain the share register, minute books and records (other thanfinancial records) of the Company and to ensure compliance with all procedural requirements imposed on the Company by applicable law, and the Treasurerto be responsible for the financial affairs of the Company.19114.Subject to the rules of the Designated Stock Exchange, the emoluments of all officers shall be fixed by resolution of directors.115.The officers of the Company shall hold office until their successors are duly elected and qualified, but any officer elected or appointed by the directors maybe removed at any time, with or without cause, by resolution of directors. Any vacancy occurring in any office of the Company may be filled by resolutionof directors.CONFLICT OF INTERESTS116.A director of the Company shall, forthwith after becoming aware of the fact that he is interested in a transaction entered into or to be entered into by theCompany, disclose the interest to all other directors of the Company.117.A director of the Company is not required to comply with Article 112 if;a.the transaction or proposed transaction is between the director and the Company; andb.the transaction or proposed transaction is or is to be entered into in the ordinary course of the company’s business and on usual terms andconditions.118.For the purposes of Article 112 a disclosure to all other directors to the effect that a director is a member, director or officer of another named entity or has afiduciary relationship with respect to the entity or a named individual and is to be regarded as interested in any transaction which may, after the date of theentry or disclosure, be entered into with that entity or individual, is a sufficient disclosure of interest in relation to that transaction.119.A.A director of the Company who is interested in a transaction entered into or to be entered into by the Company may:(i)vote on a matter relating to the transaction;(ii)attend a meeting of directors at which a matter relating to the transaction arises and be included among the directors present at the meeting for thepurposes of a quorum; and(iii)sign a document on behalf of the Company, or do any other thing in his capacity as a director, that relates to the transaction,and, subject to compliance with the Act shall not, by reason of his office be accountable to the Company for any benefit which he derives from suchtransaction and no such transaction shall be liable to be avoided on the grounds of any such interest or benefit.119.B.For so long the Securities of the Company are listed or traded on the Designated Stock Exchange, the Company shall conduct an appropriate review of allmaterial Related Party Transactions on an ongoing basis and shall utilize the Audit Committee for the review and approval of potential conflicts of interestsituations.INDEMNIFICATION120.Subject to the limitations hereinafter provided the Company may indemnify against all expenses, including legal fees, and against all judgments, fines andamounts paid in settlement and reasonably incurred in connection with legal, administrative or investigative proceedings any person who;a.is or was a party or is threatened to be made a party to any threatened, pending or completed proceedings, whether civil, criminal, administrative orinvestigative, by reason of the fact that the person is or was a director, an officer or a liquidator of the Company; orb.is or was, at the request of the Company, serving as a director of, or in any other capacity is or was acting for, another body corporate or apartnership, joint venture, trust or other enterprise.20121.The Company may only indemnify a person if the person acted honestly and in good faith in what he believed to be in the best interests of the Companyand, in the case of criminal proceedings, the person had no reasonable cause to believe that his conduct was unlawful.122.For the purposes of the preceding Article, a director acts in the best interests of the Company if he acts in the best interests of;a.the Company’s holding company; orb.a shareholder or shareholders of the Company; in either case, in the circumstances specified in Article 85.123.The decision of the directors as to whether the person acted honestly and in good faith and with a view to the best interests of the Company and as towhether the person had no reasonable cause to believe that his conduct was unlawful is, in the absence of fraud, sufficient for the purposes of theseArticles, unless a question of law is involved.124.The termination of any proceedings by any judgment, order, settlement, conviction or the entering of a nolle prosequi does not, by itself, create apresumption that the person did not act honestly and in good faith and with a view to the best interests of the Company or that the person had reasonablecause to believe that his conduct was unlawful.Consolidated Statements of Changes in Stockholder’s EquityF5Consolidated Statements of Cash FlowsF6Notes to Consolidated Financial StatementsF7 F22F1REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRMTo the Shareholder and the Sole Director ofLK Technology Ltd.Opinion on the Consolidated Financial StatementsWe have audited the accompanying consolidated balance sheets of LK Technology Ltd. and. subsidiaries (the “Company”) as of December 31, 2017 and 2016, andthe related consolidated statements of operations and comprehensive loss, changes in shareholder’s equity and cash flows for each of the years then ended, andthe related notes (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in allmaterial respects, the consolidated financial position of the Company as of December 31, 2017 and 2016, and the consolidated results of its operations and its cashflows for each of the years then ended, in conformity with accounting principles generally accepted in the United States of America.Basis for OpinionThese consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’sconsolidated financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (UnitedStates) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules andregulations of the Securities and Exchange Commission and the PCAOB.We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonableassurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have,nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internalcontrol over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting.Accordingly, we express no such opinion.An independent member firm of Moore Stephens International Limited – members in principal cities throughout the worldOur audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, andperforming procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in theconsolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well asevaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion.Certified Public AccountantsWe have served as the Company’s auditor since 2018.Hong KongMay 25, 2018F2LK TECHNOLOGY LTD. AND SUBSIDIARIESCONSOLIDATED BALANCE SHEETS(IN U.S. DOLLARS)As of December 31,20172016AssetsCurrent assets:Cash and cash equivalents$72,379$83,843Accounts receivable, net of allowance for doubtful accounts9,729,6251,865,836Other receivables and prepayment2,376,7452,287,934Amounts due from related parties11,760,692Total current assets23,939,4414,237,613Property and equipment, net5,044,8727,771,027Intangible assets, net1,154,1971,682,445Goodwill7,239,9367,239,936Amount due from a related party204,412183,811TOTAL ASSETS37,582,85821,114,832LiabilitiesCurrent liabilities:Accounts payable8,784,5186,446,584Accrued liabilities and other payables12,962,91211,329,613Amounts due to related parties3,563,68316,129,323Total current liabilities25,311,11333,905,520Total liabilities25,311,11333,905,520Commitments and contingenciesShareholder’s Equity (Deficit)Share capitalCommon stock, $1 par value per share; 50,000 shares authorized as of December 31, 2017 and 2016, 1 share issued andoutstanding as of December 31, 2017 and 201611Additional paidin capital41,819,68510,037,469Accumulated deficit(29,936,158)(23,125,704)Accumulated other comprehensive income (loss)388,217297,546Total Shareholder’s Equity (Deficit)12,271,745(12,790,688)TOTAL LIABILITIES AND SHAREHOLDER’S EQUITY (DEFICIT)$37,582,858$21,114,832F3LK TECHNOLOGY LTD. AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS(IN U.S. DOLLARS)For the years endedDecember 31,20172016Revenues$26,082,417$5,233,145Less: Cost of revenues5,547,7796,315,504Less: Operating expenses:Selling and marketing23,908,7336,209,804General and administrative2,451,2492,108,854Research and development1,046,1982,882,202Total operating expenses27,406,18011,200,860Loss from operations(6,871,542)(12,283,219)Other income (expense):Interest expense(26,611)(4,412)Foreign exchange gains (losses)350,679(298,257)Loss from investment(428,571)Other income (expense), net(262,980)(34,572)Total other income (expense), net61,088(765,812)Loss before income taxes(6,810,454)(13,049,031)Income taxesNet loss$(6,810,454)$(13,049,031)Other comprehensive income:Foreign currency translation adjustment90,671387,375Total comprehensive loss$(6,719,783)$(12,661,656)F4LK TECHNOLOGY LTD. AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDER’S EQUITY(IN U.S. DOLLARS)Accumulated otherTotalOrdinary sharesAdditionalpaidin AccumulatedcomprehensiveIncomeShareholder’sEquity SharesAmountcapitaldeficits(loss)(Deficit)Balance as of December 31, 20151$ 1$8,250,505$(10,076,673)$(89,829)$(1,915,996)Capital contribution from C Media1,786,9641,786,964Net loss(13,049,031)(13,049,031)Foreign currency translation adjustment387,375387,375Balance as of December 31, 20161110,037,469(23,125,704)297,546(12,790,688)Capital contribution from C Media31,782,21631,782,216Net loss(6,810,454)(6,810,454)Foreign currency translation adjustment90,67190,671Balance as of December 31, 20171$1$41,819,685$(29,936,158)$388,217$12,271,745F5LK TECHNOLOGY LTD. AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF CASH FLOWS(IN U.S. DOLLARS)For the years endedDecember 31,20172016CASH FLOWS FROM OPERATING ACTIVITIES:Net loss$(6,810,454)$(13,049,031)Depreciation and amortization3,316,1813,245,161Loss on disposal of property and equipment115,19373,022Increase in allowance for doubtful accounts445,39562,591Changes in assets and liabilitiesAccounts receivable(7,933,730)(1,507,296)Other receivables and prepayment(2,202,960)2,873,984Accounts payable2,230,5434,757,457Accrued liabilities and other payables1,866,1377,483,441Net cash (used in) provided by operating activities(8,973,695)3,939,329CASH FLOWS FROM INVESTING ACTIVITIES:Purchase of property and equipment(12,689)(3,554,258)Proceeds from disposal of property and equipment29,942Net cash provided by (used in) investing activities17,253(3,554,258)CASH FLOWS FROM FINANCING ACTIVITIES:Advances from related parties8,938,290(1,197,870)Net cash provided by (used in) financing activities8,938,290(1,197,870)Effect of exchange rate changes6,688(32,746)Net decrease in cash and cash equivalents(11,464)(845,545)Cash and cash equivalents, at beginning of year83,843929,388Cash and cash equivalents, at end of year$72,379$83,843Supplemental cash flow disclosures:Interest paid26,6114,412Income taxes paidF6LK TECHNOLOGY LTD. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS(IN U.S. DOLLARS)NOTE 1 – DESCRIPTION OF BUSINESS AND ORGANIZATIONStar Chariot Limited was incorporated in the British Virgin Islands (“BVI”) as an exempted limited liability company on March 3, 2011. On January 18, 2018, it wasrenamed as LK Technology Ltd. (“LK Technology ” or the “Company”).LK Technology, its subsidiaries and its variable interest entities (“VIEs”) (collectively the “Group”) operate mobile application service for longdistance travel in thePeople’s Republic of China (the “PRC”). The core mobile application product, Luokuang, is made as an LBSsocial contents and services distribution platform. Itoffers functions based on various travel scenarios, e.g. information, entertainment, travel, ecommerce, O2O, advertising, etc.As of December 31, 2017, details of the Company’s subsidiaries and VIEs are as follows:NameDate ofincorporationPlace ofincorporationPercentage oflegal ownershipSubsidiaries:MMB LimitedApr 11, 2013Hong Kong100%Mobile Media (China) LimitedNov 6, 2007Hong Kong100%Zhong Chuan Tian Xia Information and Technology (Beijing) LimitedFeb 1, 2013PRC100%Zhong Chuan Tian Xia Information and Technology (Shenzhen) LimitedDec 23, 2010PRC100%VIEs:Beijing Zhong Chuan Shi Xun Technology Limited (“Zhong Chuan Shi Xun”)May 17, 2004PRC100%Jiangsu Zhong Chuan Rui You Information and Technology Limited (“Zhong Chuan Rui You”)May 26, 2011PRC100%Huoerguosi Luokuang Information and Technology Limited (“Huoerguosi Luokuang”)Jul 19, 2017PRC100%Shenzhen Jiu Zhou Shi Dai Digital and Technology Limited (“Jiu Zhou Shi Dai”)Nov 26, 2004PRC100%F7NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIESBasis of presentationThe consolidated financial statements of the Group have been prepared in accordance with accounting principles generally accepted in the United States of America(“US GAAP”).The Group incurred losses from operations of $6,871,542 and $12,283,219 for the years ended December 31, 2017 and 2016, respectively. As of December 31, 2017, theGroup had a shareholder’s equity of $12,271,145. The Group had negative cash flows from operating activities for the year ended December 31, 2017 of $8,973,695.As of December 31, 2017, the Group had cash and cash equivalents of $72,379 and a working capital deficit of $1,371,672. From 2018 and onwards, the Group willfocus on improving operation efficiency and cost reduction, and enhancing marketing functions to attract more users. The Group regularly monitors its current andexpected liquidity requirements to ensure that it maintains sufficient cash balances and accessible credit to meet its liquidity requirements in the short and long term.The parent company continues to provide cash flow to the Group. Based on working capital conditions and forecast for future operations, the Group believes that itwill be able to meet its payment obligations and other commitments for at least the following twelve months.Principles of consolidationThe consolidated financial statements include the financial statements of the Company, its subsidiaries, including the whollyforeign owned enterprises (“WFOEs”),and VIEs for which the Company is the primary beneficiary. All transactions and balances among the Company, its subsidiaries and consolidated VIEs have beeneliminated upon consolidation. The results of subsidiaries and consolidated VIEs acquired or disposed of are recorded in the consolidated statements of operationsfrom the effective date of acquisition or up to the effective date of disposal, as appropriate.A subsidiary is an entity in which (i) the Company directly or indirectly controls more than 50% of the voting power; or (ii) the Company has the power to appoint orremove the majority of the members of the board of directors or to cast a majority of votes at the meeting of the board of directors or to govern the financial andoperating policies of the investee pursuant to a statute or under an agreement among the shareholders or equity holders. A VIE is required to be consolidated by theprimary beneficiary of the entity if the equity holders in the entity do not have the characteristics of a controlling financial interest or do not have sufficient equity atrisk for the entity to finance its activities without additional subordinated financial support from other parties.F8To comply with the PRC legal restrictions on foreign ownership of companies that operate mobile application services, the Group operates in such restricted servicesin the PRC through certain PRC domestic companies, whose equity interests are held by certain management members or founders of the Group. Part of theregistered capital of these PRC domestic companies was funded by certain management members or founders of the Group. The Group has entered into certainexclusive business services agreements with these PRC domestic companies, which entitle it to receive a majority of their residual returns and make it obligatory forthe Group to absorb a majority of the risk of losses from their activities. In addition, the Group has entered into certain agreements with those management membersor founders, including equity interest pledge agreements of the equity interests held by those management members or founders and exclusive option agreements toacquire the equity interests in these companies when permitted by the PRC laws, rules and regulations.Details of the typical VIE structure of the Group’s significant consolidated VIEs, primarily domestic companies associated with the operations such as Zhong ChuanShi Xun, Zhong Chuan Rui You, Huoerguosi Luokuang and Jiu Zhou Shi Dai, are set forth below:(i)Contracts that give the Group effective control of VIEsExclusive option agreementsThe VIE equity holders have granted the WFOEs exclusive call options to purchase their equity interest in the VIEs at an exercise price equal to the higherof (i) the registered capital in the VIEs; and (ii) the minimum price as permitted by applicable PRC laws. Each relevant VIE has further granted the relevantWFOE an exclusive call option to purchase its assets at an exercise price equal to the book value of the assets or the minimum price as permitted byapplicable PRC laws, whichever is higher. The WFOEs may nominate another entity or individual to purchase the equity interest or assets, if applicable,under the call options. Each call option is exercisable subject to the condition that applicable PRC laws, rules and regulations do not prohibit completion ofthe transfer of the equity interest or assets pursuant to the call option. Each WFOE is entitled to all dividends and other distributions declared by the VIE,and the VIE equity holders have agreed to give up their rights to receive any distributions or proceeds from the disposal of their equity interests in the VIEwhich are in excess of the original registered capital that they contributed to the VIE, and to pay any such distributions or premium to the WFOE. Theexclusive call option agreements remain in effect until the equity interest or assets that are the subject of such agreements are transferred to the WFOEs.Equity pledge agreementsPursuant to the relevant equity pledge agreements, the relevant VIE equity holders have pledged all of their interests in the equity of the VIEs as acontinuing first priority security interest in favor of the corresponding WFOEs to secure the performance of obligations by the VIEs and/or the equityholders under the other structure contracts. Each WFOE is entitled to exercise its right to dispose of the VIE equity holders’ pledged interests in the equityof the VIE and has priority in receiving payment by the application of proceeds from the auction or sale of such pledged interests, in the event of anybreach or default under the loan agreement or other structure contracts, if applicable. These equity pledge agreements remain in force for the duration ofthe relevant loan agreement and other structure contracts.F9(ii)Contracts that enable the Group to receive substantially all of the economic benefits from the VIEsExclusive business services agreementsEach relevant VIE has entered into an exclusive business services agreement with the respective WFOE, pursuant to which the relevant WFOE providesexclusive business services to the VIE. In exchange, the VIE pays a service fee to the WFOE which typically amounts to what would be substantially all ofthe VIE’s pretax profit, resulting in a transfer of substantially all of the profits from the VIE to the WFOE.Other arrangementsThe exclusive call option agreements described above also enable the Group to receive substantially all of the economic benefits from the VIEs by typicallyentitling the WFOEs to all dividends and other distributions declared by the VIEs and to any distributions or proceeds from the disposal by the VIE equityholders of their equity interests in the VIEs that are in excess of the original registered capital that they contributed to the VIEs.Based on these contractual agreements, the Group believes that the PRC domestic companies as described above should be considered as VIEs because the equityholders do not have significant equity at risk nor do they have the characteristics of a controlling financial interest. Given that the Group is the primary beneficiaryof these PRC domestic companies, the Group believes that these VIEs should be consolidated based on the structure as described above.Under the contractual arrangements with the consolidated VIEs, the Group has the power to direct activities of the consolidated VIEs and can have assetstransferred out of the consolidated VIEs under its control. Therefore, the Group considers that there is no asset in any of the consolidated VIEs that can be usedonly to settle obligations of the consolidated VIEs, except for registered capital and PRC statutory reserves. As all consolidated VIEs are incorporated as limitedliability companies under the Company Law of the PRC, creditors of the consolidated VIEs do not have recourse to the general credit of the Group for any of theliabilities of the consolidated VIEs.Currently there is no contractual arrangement which requires the Group to provide additional financial support to the consolidated VIEs. However, as the Groupconducts its businesses primarily based on the licenses and approvals held by its consolidated VIEs, the Group has provided and will continue to provide financialsupport to the consolidated VIEs considering the business requirements of the consolidated VIEs, as well as the Group’s own business objectives in the future.F10Use of estimatesThe preparation of financial statements in conformity with US GAAP requires the Group to make estimates and assumptions that affect the reported amounts ofassets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expensesduring the reporting period. The most significant estimates are the allowance for doubtful accounts, the useful lives of property and equipment and intangibleassets, impairment of longlived assets and goodwill. Actual results could differ from those estimates.Fair value measurementsFair value is the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at themeasurement date under current market conditions. When determining the fair value measurements for assets and liabilities required or permitted to be recorded atfair value, the Group considers the principal or most advantageous market in which it would transact and it considers assumptions that market participants woulduse when pricing the asset or liability.Authoritative literature provides a fair value hierarchy which prioritizes the inputs to valuation techniques used to measure fair value into three broad levels. Thelevel in the hierarchy within which the fair value measurement in its entirety falls is based upon the lowest level of input that is significant to the fair valuemeasurement as follows:Level 1Level 1 applies to assets or liabilities for which there are quoted prices in active markets for identical assets or liabilities.Level 2Level 2 applies to assets or liabilities for which there are inputs other than quoted prices included within Level 1 that are observable for the asset or liability such asquoted prices for similar assets or liabilities in active markets; quoted prices for identical assets or liabilities in markets with insufficient volume or infrequenttransactions (less active markets); or modelderived valuations in which significant inputs are observable or can be derived principally from, or corroborated by,observable market data.Level 3Level 3 applies to assets or liabilities for which there are unobservable inputs to the valuation methodology that are significant to the measurement of the fair valueof the assets or liabilities.F11Cash and cash equivalentsCash and cash equivalents primarily consist of cash, money market funds, investments in interest bearing demand deposit accounts, time deposits and highly liquidinvestments with original maturities of three months or less from the date of purchase and are stated at cost which approximates their fair value. The Group has nocash equivalents.Accounts receivable, net of allowanceAccounts receivable are recognized and carried at the original invoiced amount less an allowance for any potential uncollectible amounts. An estimate for doubtfuldebts is made when collection of the full amount is no longer probable. Bad debts are written off as incurred. The Group generally does not require collateral from itscustomers.The Group maintains allowances for doubtful accounts for estimated losses resulting from the failure of customers to make payments on time. The Group reviews theaccounts receivable on a periodic basis and makes specific allowances when there is doubt as to the collectability of individual balances. In evaluating thecollectability of individual receivable balances, the Group considers many factors, including the age of the balance, the customer’s payment history, its currentcreditworthiness and current economic trends.Property and equipment, netProperty and equipment are carried at cost less accumulated depreciation. Depreciation is calculated on a straightline basis over the following estimated usefullives:Wifi equipment– 3 yearsOffice equipment– 3 to 5 yearsVehicles– 5 yearsCosts of repairs and maintenance are expensed as incurred and asset improvements are capitalized. The gain or loss on disposal of property and equipment is thedifference between the net sales proceeds and the carrying amount of the relevant assets and is recognized in the consolidated income statement. When propertyand equipment are retired or otherwise disposed of, the cost and accumulated depreciation are removed from the accounts and any resulting gain or loss is includedin the results of operations for the respective period.Construction in progressAssets under construction are not depreciated until construction is completed and the assets are ready for their intended use.F12Intangible assetsIntangible assets with finite lives are amortized using the straightline method over the estimated economic lives.Intangible assets have weighted average economic lives from the date of purchase as follows:Software– 5 yearsTrademarks– 10 yearsGoodwillThe Group assesses goodwill for impairment in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”)subtopic 35020, Intangibles—Goodwill and Other: Goodwill (“ASC 35020”), which requires that goodwill to be tested for impairment at the reporting unit level atleast annually and more frequently upon the occurrence of certain events, as defined by ASC 35020.We have the option to assess qualitative factors first to determine whether it is necessary to perform the twostep test in accordance with ASC 35020. If we believe,as a result of the qualitative assessment, that it is morelikelythannot that the fair value of the reporting unit is less than its carrying amount, the twostepquantitative impairment test described below is required. Otherwise, no further testing is required. In the qualitative assessment, we consider primary factors such asindustry and market considerations, overall financial performance of the reporting unit, and other specific information related to the operations. In performing thetwostep quantitative impairment test, the first step compares the carrying amount of the reporting unit to the fair value of the reporting unit based on either quotedmarket prices of the ordinary shares or estimated fair value using a combination of the income approach and the market approach. If the fair value of the reportingunit exceeds the carrying value of the reporting unit, goodwill is not impaired and we are not required to perform further testing. If the carrying value of the reportingunit exceeds the fair value of the reporting unit, then we must perform the second step of the impairment test in order to determine the implied fair value of thereporting unit’s goodwill. The fair value of the reporting unit is allocated to its assets and liabilities in a manner similar to a purchase price allocation in order todetermine the implied fair value of the reporting unit goodwill. If the carrying amount of the goodwill is greater than its implied fair value, the excess is recognized asan impairment loss.In 2017, we performed a qualitative assessment for goodwill. Based on the requirements of ASC35020, we evaluated all relevant factors, including but not limited tomacroeconomic conditions, industry and market conditions, financial performance. We weighed all factors in their entirety and concluded that it was not morelikelythannot the fair value was less than the carrying amount of the reporting unit, and further impairment testing on goodwill was unnecessary as of December 31, 2017and 2016.F13Impairment or disposal of longlived assetsLonglived assets other than goodwill are included in impairment evaluations when events and circumstances exist that indicate the carrying value of these assetsmay not be recoverable. In accordance with FASB ASC 360, Property, Plant and Equipment, the Group assesses the recoverability of the carrying value of longlivedassets by first grouping its longlived assets with other assets and liabilities at the lowest level for which identifiable cash flows are largely independent of the cashflows of other assets and liabilities (the asset group) and, secondly, estimating the undiscounted future cash flows that are directly associated with and expected toarise from the use of and eventual disposition of such asset group. If the carrying value of the asset group exceeds the estimated undiscounted cash flows, theGroup recognizes an impairment loss to the extent the carrying value of the longlived asset exceeds its fair value. The Group determines fair value through quotedmarket prices in active markets or, if quotations of market prices are unavailable, through the performance of internal analysis using a discounted cash flowmethodology or obtains external appraisals from independent valuation firms. The undiscounted and discounted cash flow analyses are based on a number ofestimates and assumptions, including the expected period over which the asset will be utilized, projected future operating results of the asset group, discount rateand longterm growth rate.As of December 31, 2017 and 2016, the Group assessed the impairment of its longlived assets and concluded that there was no impairment indication.Business combinationWe account for business combinations using the purchase method of accounting in accordance with FASB ASC topic 805, Business combinations. The purchasemethod accounting requires that the consideration transferred be allocated to the assets, including separately identifiable assets and liabilities we acquired, basedon their estimated fair values. The consideration transferred in an acquisition is measured as the aggregate of the fair values at the date of exchange of the assetsgiven, liabilities incurred, and equity instruments issued as well as the contingent considerations and all contractual contingencies as of the acquisition date. Thecosts directly attributable to the acquisition are expensed as incurred. Identifiable assets, liabilities and contingent liabilities acquired or assumed are measuredseparately at their fair value as of the acquisition date, irrespective of the extent of any noncontrolling interests. The excess of (i) the total of cost of acquisition, fairvalue of the noncontrolling interests and acquisition date fair value of any previously held equity interest in the acquiree over (ii) the fair value of the identifiable netassets of the acquiree, is recorded as goodwill. If the cost of acquisition is less than the fair value of the net assets of the subsidiary acquired, the difference isrecognized directly in earnings.Revenue recognitionThe Group recognizes revenue in accordance with FASB ASC topic 605, Revenue Recognition (“ASC 605”). Revenue is recognized when the following four revenuerecognition criteria are met: (i) persuasive evidence of an arrangement exists, (ii) delivery has occurred or services have been provided, (iii) the selling price is fixed ordeterminable, and (iv) collectability is reasonably assured.F14Displaybased online advertising servicesThe Group provides displaybased online advertising services to customers by integrating text description, image and video, and displaying the advertisements in aprominent position of LuoKuang Application. The Group recognizes revenue in accordance with ASC 605, over the contractual term based on the agreements andconfirmation letters signed by both parties, commencing on the date the customer’s advertisement is displayed on the Group’s platform.Foreign currency translationThe functional and reporting currency of the Company and the Company’s subsidiaries domiciled in BVI and Hong Kong are the United States dollar (“U.S. dollar”).The financial records of the Company’s other subsidiaries and VIEs located in the PRC are maintained in their local currency, the Chinese Renminbi (“RMB”), whichare the functional currency of these entities.Monetary assets and liabilities denominated in currencies other than the functional currency are translated into the functional currency at the rates of exchangeruling at the balance sheet date. Transactions in currencies other than the functional currency during the year are converted into the functional currency at theapplicable rates of exchange prevailing when the transactions occurred. Transaction gains and losses are recognized in the statements of operations.The Company’s entities with a functional currency of RMB translate their operating results and financial position into the U.S. dollar, the Company’s reportingcurrency. Assets and liabilities are translated using the exchange rates in effect on the balance sheet date. Revenues, expenses, gains and losses are translatedusing the average rate for the year. Retained earnings and equity are translated using the historical rate. Translation adjustments are reported as cumulativetranslation adjustments and are shown as a separate component of other comprehensive income.Income taxesDeferred income taxes are recognized for temporary differences between the tax basis of assets and liabilities and their reported amounts in the financial statements,net operating loss carry forwards and credits, by applying enacted statutory tax rates applicable to future years. Deferred tax assets are reduced by a valuationallowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Current income taxesare provided for in accordance with the laws and regulations applicable to the Group as enacted by the relevant tax authorities.The impact of an uncertain income tax position on the income tax return must be recognized at the largest amount that is morelikelythan not to be sustained uponaudit by the relevant tax authorities. An uncertain income tax position will not be recognized if it has less than a 50% likelihood of being sustained. Additionally, theGroup classifies the interest and penalties, if any, as a component of the income tax expense. For years ended December 31, 2017 and 2016, the Group did not haveany material interest or penalties associated with tax positions nor did the Group have any significant unrecognized uncertain tax positions.F15Related partiesParties are considered to be related to the Company if the parties, directly or indirectly, through one or more intermediaries, control, are controlled by, or are undercommon control with the Company. Related parties also include principal owners of the Company, its management, members of the immediate families of principalowners of the Company and its management and other parties with which the Company may deal with if one party controls or can significantly influence themanagement or operating policies of the other to an extent that one of the transacting parties might be prevented from fully pursuing its own separate interests. TheCompany discloses all significant related party transactions.LeasesLeases have been classified as either capital or operating leases. Leases that transfer substantially all the benefits and risks incidental to the ownership of assets areaccounted for as if there was an acquisition of an asset and incurrence of an obligation at the inception of the lease. All other leases are accounted for as operatingleases wherein rental payments are expensed as incurred.When the Group is the lessor, minimum contractual rental from leases are recognized on a straightline basis over the noncancelable term of the lease. With respectto a particular lease, actual amounts billed in accordance with the lease during any given period may be higher or lower than the amount of rental revenue recognizedfor the period. Straightline rental revenue commences when the customer assumes control of the leased premises. Accrued straightline rents receivable representsthe amount by which straightline rental revenue exceeds rents currently billed in accordance with lease agreements. Contingent rental revenue is accrued when thecontingency is removed.Advertising costsAdvertising costs include expenses associated with direct marketing. All advertising costs are expensed as incurred and included in selling and marketing expenses.During the years ended December 31, 2017 and 2016, advertising costs amounted to $23,171,170 and $4,537,653, respectively.Comprehensive lossComprehensive loss includes net loss and foreign currency translation adjustments and is presented net of tax. The tax effect is nil for the two years endedDecember 31, 2017 and 2016 in the consolidated statements of comprehensive loss.Concentration of credit riskFinancial instruments that potentially expose the Group to concentrations of credit risk consist primarily of cash and accounts receivable. The Group places its cashwith financial institutions with highcredit rating and quality in China. For the year ended December 31, 2017, two customers accounted for over 10% of totalrevenue. For the year ended December 31, 2016, four customers accounted for over 10% of total revenue. At December 31, 2017 and 2016, the Group had credit riskexposure of uninured cash in banks of approximately $72,379 and $83,843, respectively.F16NOTE 3 – INCOME TAXAt December 31, 2017 and 2016, the Group had an unused net operating loss carryforwards of approximately $25,123,726 and $20,081,239, respectively, for income taxpurposes, which expires between 2018 to 2022 and between 2017 to 2021, respectively. At December 31, 2017 and 2016, these net operating losses carryforwards mayresult in future income tax benefits of approximately $5,043,944 and $4,008,863, respectively, however, because realization is uncertain at this time, a valuationallowance in the same amount has been established. Deferred income taxes reflect the net effects of temporary differences between the carrying amounts of assetsand liabilities for financial reporting purposes and the amounts used for income tax purposes.Significant components of the Group’s deferred tax liabilities and assets of December 31, 2017 and 2016 are as follows:December 31,December 31,20172016Deferred tax liabilities$$Deferred tax assetNet operating loss carryforward5,043,9444,008,863Valuation allowance(5,043,944)(4,008,863)Net deferred tax assetMovement of valuation allowanceDecember 31,2017December 31,2016At the beginning of the year$4,008,863$2,049,352Current year addition823,9702,159,518Expired(61,411)Exchange difference272,522(200,007)At the end of the year5,043,9444,008,863The Company is not subject to taxation in BVI under the current BVI law. Subsidiaries operating in the PRC are subject to PRC Enterprise Income Tax at the statutoryrate of 25% for the years ended December 31, 2017 and 2016. Subsidiaries operating in Hong Kong are subject to Hong Kong income taxes at a rate of 16.5% for theyears ended December 31, 2017 and 2016.F17A reconciliation of the income tax expense to the amount computed by applying the current statutory tax rate to the loss before income taxes in the consolidatedstatements of comprehensive income is as follows:December 31,December 31,20172016Loss before income taxes$(6,810,454)$(13,049,031)Tax loss at statutory tax rate(1,655,174)(3,386,822)Nondeductible items6,729,2551,712,857Nontaxable items(3,789,956)(674,189)Change in valuation allowance823,9702,159,518Tax benefits(2,108,095)188,636Income tax expensesNOTE 4 – ACCOUNTS RECEIVABLEAt December 31, 2017 and 2016, accounts receivable consisted of the following:December 31,December 31,20172016Accounts receivable$10,406,602$2,098,946Less: allowance for doubtful accounts676,977233,110$9,729,625$1,865,836NOTE 5 – OTHER RECEIVABLESAt December 31, 2017 and 2016, other receivables consisted of the following:December 31,2017December 31,2016Advances to suppliers$339,701$181,472VAT recoverable (1)3,033,0651,662,805Other5,048,189485,152$2,376,745$2,287,934(1)The balance of advanced VAT represents input VAT available for deducting the amount of VAT paid in the future. During the years ended December 31, 2017and 2016, the Group purchased a large amount of WiFi equipment for deployments, which generated related input VAT approved by tax authority.F18NOTE 6 – AMOUNTS DUE FROM RELATEDPARTIESAt December 31, 2017 and 2016, amounts due from related parties consisted of the following:Name of related partyDecember 31,2017December 31,2016C Media Limited (1)$11,760,692$Ya Tuo Ji International Consultancy (Beijing) Limited (2)204,412183,811(1)C Media Limited is the parent company of LK Technology. The Group expects the amounts due from the related party will be returned to the Group within oneyear.(2)Ya Tuo Ji is a company controlled by the spouse of a major shareholder of C Media Limited. The loan is unsecured, interestfree and repayable on January 5,2019.NOTE 7 – PROPERTY AND EQUIPMENTAt December 31, 2017 and 2016, property and equipment consisted of the following:December 31,December 31,Useful life20172016WiFi equipment3 Years$8,711,424$8,367,678Vehicles5 Years43,246Office and other equipment3 – 5 Years170,242416,434Constructioninprogress2,166,4522,652,28811,048,11811,479,646Less: accumulated depreciation(6,003,246)(3,708,619)$5,044,872$7,771,027For the years ended December 31, 2017 and 2016, depreciation expense amounted to $2,628,884 and $2,474,434, respectively, of which $2,423,655 and $2,194,582,respectively, was included in cost of revenue, $117,648 and $121,740, respectively, was included in selling and marketing expenses and the remainder was included ingeneral and administrative expense.Included in constructioninprogress are WiFI equipment under construction.F19NOTE 8 – GOODWILLIn September of 2014, Zhong Chuan Shi Xun acquired a 100% interest in Zhong Chuan Rui You for a consideration of $7,391,894 (RMB48,000,000). Zhong Chuan RuiYou is primarily engaged in on train WiFi business, deploying WiFi equipment on trains and providing passengers with entertainment and information services ontrains. The book value of the identifiable net assets of Zhong Chuan Rui You was $151,958 (RMB963,000) and a goodwill of $7,239,936 was recorded.NOTE 9 – ACCRUED LIABILITIES AND OTHER PAYABLESAt December 31, 2017 and 2016, accrued liabilities and other payables consisted of the following:December 31,December 31,20172016Deferred revenue$2,326,406$302,735Accrued payroll143,998316,458Other taxes payable3,544,469461,699Other payable852,384686,526Other loans6,095,6559,562,915$12,962,912$11,329,613Deferred revenue represents prepayments from customers for advertising service and is recognized as revenue when the advertising services are rendered.Other loans of $939,555 and $57,416, respectively, as of December 31, 2017 and 2016, are unsecured, bear daily interest at 0.04% and are repayable on demand.NOTE 10 – AMOUNTS DUE TO RELATED PARTIESAt December 31, 2017 and 2016, amounts due to related parties consisted of the following:December 31,December 31,Name of related party20172016Mr. Song Xuesong (“Mr. Song”) (1)$2,921,639$10,669,325C Media Limited (2)$$4,855,236Thumb Beijing Branch (3)$612,103$576,560Thumb Shenzhen Branch (3)$29,941$28,202(1) The Group’s CEO(2) C Media Limited, the parent company.(3) Thumb Beijing and Shenzhen Branch are controlled by the spouse of Mr. Song.Amounts due to related parties are shortterm in nature, noninterest bearing, unsecured and payable on demand.F20NOTE 11 – RETIREMENT AND WELFARE BENEFITSThe Group’s fulltime employees are entitled to staff welfare benefits including medical care, casualty, housing benefits, education benefits, unemployment insuranceand pension benefits through a PRC governmentmandated multiemployer defined contribution plan. The Group is required to accrue the employerportion forthese benefits based on certain percentages of the employees’ salaries. The total provision for such employee benefits of $170,227 and $353,033 during the yearsended December 31, 2017 and 2016, respectively, of which $23,392 and $30,455, respectively, was charged to cost of revenue, $48,957 and $97,408, respectively wascharged to selling and marketing expenses, $49,717 and $86,934, respectively, was charged to general and administrative expenses and $48,161 and $138,236,respectively was charged to research and development expenses. The Group is required to make contributions to the plan out of the amounts accrued for all staffwelfare benefits except for education benefits. The PRC government is responsible for the staff welfare benefits including medical care, casualty, housing benefits,unemployment insurance and pension benefits to be paid to these employees.NOTE 12 – STATUTORY RESERVESAs stipulated by the relevant law and regulations in the PRC, the Group’s subsidiaries and VIEs in the PRC are required to maintain a nondistributable statutorysurplus reserve. Appropriations to the statutory surplus reserve are required to be made at not less than 10% of profit after taxes as reported in the subsidiaries’statutory financial statements prepared under the PRC GAAP. Once appropriated, these amounts are not available for future distribution to owners or shareholders.Once the general reserve is accumulated to 50% of the subsidiaries’ registered capital, the subsidiaries can choose not to provide more reserves. The statutoryreserve may be applied against prior year losses, if any, and may be used for general business expansion and production and increase in registered capital of thesubsidiaries. The Group allocated $Nil to statutory reserves during the years ended December 31, 2017 and 2016, respectively. The statutory reserves cannot betransferred to the Company in the form of loans or advances and are not distributable as cash dividends except in the event of liquidation.NOTE 13 – COMMITMENTS AND CONTINGENCIESOperating leasesWe have entered into operating lease agreements primarily for our office spaces in China. These leases expire through 2018 and are renewable upon negotiation.Future minimum rental payment required under the Office Lease is as follows:Year ending December 31:Amount2018$122,138F21Contingencies(a) Litigation with Shanghai Fusheng Weier Intelligent Control Technology Co., Ltd.On January 22, 2016, Zhong Chuan Rui You and Shanghai Fusheng Weier Intelligent Control Technology Co., Ltd. (“Fusheng Weier”) signed a contract forequipment of $1,652,842 (RMB10,800,000). Since Zhong Chuan Rui You did not make the payments of $1,126,381 (RMB7,360,000) on the due dates, Fusheng Weierfiled a lawsuit against Zhong Chuan Rui You in Shanghai Xuhui District People’s Court on October 8, 2016. On March 9, 2017, Xuhui District People’s Court issuedthe verdict requiring Zhong Chuan Rui You to pay the overdue debts. In August 2017, C Media Limited made the payment of $512,075 (RMB3,346,000). Theremaining balance has been accrued in accounts payable. The payment schedule for the remaining balance is being negotiated by the two parties. On February 5,2018, a hearing was held adding Zhong Chuan Shi Xun as a defendant. The Group plans to settle the remaining balance within one year.(b) Lawsuit with Gansu Jinlun Culture Media Co., Ltd.On August 22, 2014, Zhong Chuan Rui You and Gansu Jinlun Culture Media Co., Ltd. (“Gansu Jinlun”) signed a “Lanzhou Railway Bureau Airconditioned Train WiFi Network System Advertising Operation Rights Agreement” for advertising on 72 trains of $1,467,880 (RMB9,604,633). Due to the dispute on the projectimplementation, Zhong Chuan Rui You did not pay the advertising fee. On August 23, 2017, Gansu Jinlun filed a lawsuit with Gansu Intermediate People’s Court. OnDecember 19, 2017, Gansu Intermediate People’s Court issued a verdict, ruling that Zhong Chuan Rui You settle the overdue advertising fee. Since only 18 out of 72trains have been installed with Wifi network system, Zhong Chuan Rui You disputed and appealed to the verdict. The next court trial date has not yet beendetermined.C Media and Gansu Jinlun are negotiating a potential settlement to resume the contract. According to the legal counsel, it is probable that the settlement will amountto approximately $459,000 (RMB3,000,000); therefore, this amount has been accrued in accounts payable.(c) Litigation with Shenzhen Hua Xun Fang Zhou Technology Co., Ltd.On June 16, 2015, Zhong Chuan Rui You signed a cooperation agreement with Shenzhen Hua Xun Fang Zhou Technology Co., Ltd. (“Shenzhen Hua Xun”) andXuesong Song, a major shareholder of C Media Limited. Pursuant to this agreement, Zhong Chuan Rui You procures equipment from Shenzhen Hua Xun. XuesongSong acts as a joint liability guarantor for the entire debts of Zhong Chuan Rui You under this agreement. As Zhong Chuan Rui You did not make the payments onthe due dates, Shenzhen Hua Xun filed a lawsuit with Shenzhen Baoan District People’s Court on May 31, 2016. On November 1, 2016, Zhong Chuan Rui You,Xuesong Song and Shenzhen Hua Xun reached a settlement in Shenzhen Baoan District People’s Court to settle $1,735,389 (RMB11,355,000) in four instalments. OnDecember 30, 2017, the debt was assigned to C Media Limited.NOTE 14 – SUBSEQUENT EVENTThe Group has evaluated all events or transactions that occurred after December 31, 2017 through May 25, 2018, which is the date that the financial statements wereavailable to be issued.F22EX1.1 2 f20f2017ex11_luokung.htm AMENDED AND RESTATED MEMORANDUM OF ASSOCIATION AND ARTICLES OF ASSOCIATION OF LUOKUNGTECHNOLOGY CORP., DATED AUGUST 20, 2018, AND AS CURRENTLY IN EFFECTExhibit 1.1BC NO: 1553620British Virgin IslandsThe BVI Business Companies Act, 2004(No. 16 of 2004)Memorandum of AssociationandArticles of AssociationofLuokung Technology Corp.Incorporated the 24th day of October, 2009Amended and Restated the 11th Day of December 2009Amended and Restated the 17th Day of December 2009Amended and Restated the 25th Day of March 2010Amended and Restated the 21st day of May 2018Amended and restated the 17 August 2018Amended and restated the 21 August 2018Portcullis (BVI) LimitedPortcullis Chambers4th Floor Ellen Skelton Building3076 Sir Francis Drake HighwayRoad Town, TortolaBritish Virgin IslandsTERRITORY OF THE BRITISH VIRGIN ISLANDSTHE BVI BUSINESS COMPANIES ACT, 2004(No. 16 of 2004)MEMORANDUM OF ASSOCIATIONOFLuokung Technology Corp.NAME1.The name of the Company is Luokung Technology Corp.TYPE OF COMPANY2.The Company is a company limited by shares.REGISTERED OFFICE3.The first Registered Office of the Company is the offices of Portcullis TrustNet (BVI) Limited, Portcullis TrustNet Chambers, P.O. Box 3444, Road Town,Tortola, British Virgin Islands, the office of the registered agent.3.1The current Registered Office of the Company is Portcullis Chambers, 4th Floor Ellen Skelton Building, 3076 SirFrancis Drake Highway, Road Town,Tortola, British Virgin Islands VG1110.REGISTERED AGENT4.The first Registered Agent of the Company is Portcullis TrustNet (BVI) Limited of Portcullis TrustNet Chambers, P.O. Box 3444, Road Town, Tortola,British Virgin Islands.4.1The current Registered Agent of the Company is Portcullis (BVI) Ltd of Portcullis Chambers, 4th Floor Ellen Skelton Building, 3076 Sir Francis DrakeHighway, Road Town, Tortola, British Virgin Islands VG1110.AUTHORISED NUMBER OF SHARES5.The Company is authorised to issue a maximum of 251,000,000 shares.CLASSES, NUMBER AND PAR VALUE OF SHARES6.As at the date of adoption of this memorandum, the Company is authorised to issue (a) 250,000,000 ordinary shares without par value (“OrdinaryShares”); and (b) 1,000,000 preferred shares without par value (“Preferred Shares”).FRACTIONAL SHARES7.The Company may issue fractions of a share and a fractional share shall have the same corresponding fractional liabilities, limitations, preferences,privileges, qualifications, restrictions, rights and other attributes of a whole share of the same class or series of shares.RIGHTS, PRIVILEGES, RESTRICTIONS AND CONDITIONS ATTACHING TO SHARES8.(1)Subject to the memorandum and articles of association (and, for greater clarity, without prejudice to any special rights conferred thereby on theholders of any other shares), an Ordinary Share of the Company confers on the holder;(a)the right to one vote at a meeting of the members of the Company or on any Resolution of Members;(b)the right to an equal share in any Distribution paid by the Company; and(c)the right to an equal share in the distribution of the surplus assets of the Company on a winding up.(2)Subject to the memorandum and articles of association (and, for greater clarity, without prejudice to any special rights conferred thereby on theholders of any other shares), a Preferred Share of the Company confers on the holder;(a)the right to 399 votes at a meeting of the members of the Company or on any Resolution of Members;(b)the right to an equal share in any Distribution paid by the Company;(c)the right to an equal share in the distribution of the surplus assets of the Company on its liquidation.(d)be freely transferable, in whole or in part, by Mr. Xuesong Song to any third party through one or more Private Transactions, subject toApplicable Law; and(e)be freely transferable, in whole or in part, by Mr. Xuesong Song to any third party through one or more Public Transactions, subject to ApplicableLaw and Automatic Conversion of such Preferred Share(s) into Ordinary Share(s).(3)The directors may at their discretion by resolution of directors redeem, purchase or otherwise acquire all or any of the shares in the Companysubject to the Articles..VARIATION OF CLASS RIGHTS9.If at any time the issued shares are divided into different classes or series of shares, the rights attached to any class or series (unless otherwise providedby the terms of issue of the shares of that class or series) may, whether or not the Company is being wound up, be varied with the consent in writing of theholders of not less than threefourths of the issued shares of that class or series and of the holders of not less than threefourths of the issued shares ofany other class or series of shares which may be affected by such variation.RIGHTS NOT VARIED BY THE ISSUE OF SHARES PARI PASSU10.The rights conferred upon the holders of the shares of any class issued with preferred or other rights shall not, unless otherwise expressly provided by theterms of issue of the shares of that class, be deemed to be varied by the creation or issue of further shares ranking pari passu therewith.CAPACITY AND POWERS11.Subject to the Act, any other British Virgin Islands legislation and paragraph 12 below the Company has, irrespective of corporate benefit:(a)full capacity to carry on or undertake any business or activity, do any act or enter into any transaction;(b)for the purposes of paragraph (a), full rights, powers and privileges; and(c)full powers to issue shares with preemptive rights, subject to the Articles.2LIMITATIONS ON THE COMPANY’S BUSINESS12.For the purposes of section 9(4) of the Act the Company may not;(a)carry on banking or trust business, unless it is licensed to do so under the Banks and Trust Companies Act, 1990;(b)carry on business as an insurance or reinsurance company, insurance agent or insurance broker, unless it is licensed under the Insurance Act1994;(c)carry on business of company management, unless it is licensed under the Company Management Act, 1990;(d)carry on the business of providing the registered office or the registered agent for companies incorporated in the British Virgin Islands;(e)carry on the business as a mutual fund, manager of mutual funds or administrator of mutual funds unless it is recognized or licenced as the casemay be under the Mutual Funds Act 1996; or(f)carry on any other business that gives rise to a licencing requirement under any law for the time being in force in the British Virgin Islands unlessit is licenced, regulated, recognised or otherwise approved pursuant to such law.REGISTERED SHARES AND PROHIBITION ON ISSUE OF BEARER SHARES13.Shares in the Company may only be issued as registered shares. The issue of shares to bearer is prohibited.PROHIBITION ON EXCHANGE AND CONVERSION OF REGISTERED SHARES TO BEARER SHARES14.The exchange or conversion of registered shares to bearer shares is prohibited.TRANSFER OF REGISTERED SHARES15.Subject to the provisions of the Articles the Company may upon receipt of an instrument of transfer enter the name of the transferee in the register ofmembers subject to the prior or simultaneous approval of the Company as evidenced by a resolution of directors or by a resolution of members. Subject toany resolution of the members to the contrary, the directors may resolve by resolution of directors to refuse or delay the registration of the transfer forreasons that shall be specified in the resolution of directors.AMENDMENT OF MEMORANDUM AND ARTICLES OF ASSOCIATION16.1The Company may amend its Memorandum or Articles by a resolution of members or by a resolution of directors provided that the directors shall not havethe power to amend the Memorandum or Articles;(a)to restrict the rights or powers of the members to amend the Memorandum or Articles;(b)to change the percentage of members required to pass a resolution to amend the Memorandum or Articles;(c)in circumstances where the Memorandum or Articles cannot be amended by the members; or(d)to Clauses 8, 9, 10 or this Clause 12.16.2No amendment may be made to Regulation 76 of the Articles unless approved by an affirmative vote of the holders of 66 2/3 percent or more of theoutstanding votes of the shares entitled to vote thereon.3DEFINITIONS17.The meanings of words in this Memorandum are as defined in the Articles.We, Portcullis TrustNet (BVI) Limited of Portcullis TrustNet Chambers, P.O. Box 3444, Road Town, Tortola, British Virgin Islands for the purpose ofincorporating a BVI Business Company under the laws of the British Virgin Islands hereby sign this Memorandum of Association the 27th day of October,2009.Incorporator/s/ Nicole WheatleyPortcullis TrustNet (BVI) LimitedPortcullis TrustNet ChambersP.O. Box 3444Road Town, TortolaBritish Virgin Islands(Sgd. Nicole Wheatley)4TERRITORY OF THE BRITISH VIRGIN ISLANDSTHE BVI BUSINESS COMPANIES ACT, 2004(No. 16 of 2004)ARTICLES OF ASSOCIATIONOFLuokung Technology Corp.PRELIMINARY1.In these Articles, if not inconsistent with the subject or context, the words and expressions standing in the first column of the following table shall bear themeanings set opposite them respectively in the second column thereof.WordsMeaningApplicable Lawall Laws, including those of a jurisdiction in or outside of the United States, applicable to the Private orPublic Transactions.Actthe BVI Business Companies Act, 2004 (No 16 of 2004.) including any modification, extension, reenactment or renewal thereof and any regulations made thereunder.Articlesthese Articles of Association as originally framed or as from time to time amended.Automatic Conversioneach Preferred Share shall be automatically converted at any time after issue and without the payment ofany additional sum into an equal number of fully paid Ordinary Shares upon the conclusion of anytransfer by Mr. Xuesong Song to any third party through one or more Public Transactions.Designated Stock Exchangeeither the Nasdaq National Stock Market, Inc. or such other exchange or quotation bureau on which, theCompany’s Securities are listed or traded; provided that until the Securities are listed on any such“Exchange” the rules of any such Designated Stock Exchange shall be inapplicable to these Articles.directora director of the Company.distributionin relation to a distribution by a company to a member, means(i)the direct or indirect transfer of an asset, other than the Company’s own shares, to or forthe benefit of the member or(ii)the incurring of a debt to or for the benefit of a member,in relation to shares held by a member, and whether by means of a purchase of an asset, the purchase,redemption or other acquisition of shares, a transfer of indebtedness or otherwise, and includes adividend.Independent Directora person who meets the then current requirements for “independence” of the applicable rules andregulations of the U.S. Securities and Exchange Commission and the Designated Stock Exchange.5member or shareholderin relation to the Company, means a person whose name is entered in the register of members as theholder of one or more shares, or fractional shares, in the Company.Memorandumthe Memorandum of Association of the Company as originally framed or as from time to time amended.Mr. Xuesong Songthe founder, a director and Chairman of LK Technology Ltd.Ordinary Sharesissued or unissued ordinary shares of no par value of the Company having the rights, preferences andprivileges set out in the MemorandumPersonAn individual, a corporation, a trust, trustee, the estate of a deceased individual, a partnership or anunincorporated association of persons.Preferred Sharesissued or unissued preferred shares of no par value of the Company having the rights, preferences andprivileges set out in the MemorandumPrivate Transactionstransactions that are not considered as a Public Transaction.Public Transactionstransactions through any national securities exchanges and/or through the automated quotation systemincluding but not limited to NASDAQ, NYSE (including NYSE American) or OTC Markets, or anytransaction executed by the broker or with a market maker.Related Party(a) any director, officer and employee of the Company; (b) any family member of such director, officer andemployee; and (c) any entity (e.g. a corporation, partnership, or trust) controlled by or set up for thebenefit of a director, officer or employee, or a family member of such director, officer or employee.Relevant SystemA facility for the electronic transfer of uncertificated securities administered by The Depository TrustCompany or such other Person regulated by the SEC.resolution of directors(a)A resolution approved at a duly convened and constituted meeting of directors of the Companyor of a committee of directors of the Company by the affirmative vote of a simple majority of thedirectors present at the meeting who voted and did not abstain; or(b)a resolution consented to in writing by a simple majority of the directors or of all members of thecommittee, as the case may be;except that where a director is given more than one vote, he shall be counted by the number ofvotes he casts for the purpose of establishing a majority.resolution of membersSubject to the provisions of the Memorandum and Articles means:(a)A resolution approved at a duly convened and constituted meeting of the members of theCompany by the affirmative vote of(i)a majority of in excess of 50% of the votes of the shares entitled to vote and voting onthe resolution, or(ii)a majority of in excess of 50% of the votes of each class or series of shares entitled tovote as a class or series and voting on the resolution and a majority of in excess of 50%of the votes of the remaining shares entitled to vote and voting on the resolution; or6(b)a resolution consented to in writing by(i)an absolute majority of the votes of shares entitled to vote thereon, or(ii)an absolute majority of the votes of each class or series of shares entitled to votethereon as a class or series and of an absolute majority of the votes of the remainingshares entitled to vote thereon.SealAny Seal which has been duly adopted as the common seal of the Company.SECThe United States Securities and Exchange Commission.Securitiesshares and debt obligations of every kind, and options, warrants and rights to acquire shares, or debtobligations.SharesOrdinary Shares and/or Preferred Shares, as the case may be.solvency testa company satisfies the solvency test if;(i)the value of the company’s assets exceeds its liabilities, and(ii)the company is able to pay its debts as they fall due.treasury sharesshares in the Company that were previously issued but were repurchased, redeemed or otherwiseacquired by the Company and not cancelled.2.“Written” or any term of like import includes words typewritten, printed, painted, engraved, lithographed, photographed or represented or reproduced byany mode of reproducing words in a visible form, including telex, facsimile, telegram, cable or other form of writing produced by electronic communication.3.Save as aforesaid any words or expressions defined in the Act shall bear the same meaning in these Articles.4.Whenever the singular or plural number, or the masculine, feminine or neuter gender is used in these Articles, it shall equally, where the context admits,include the others.5.A reference in these Articles to voting in relation to shares shall be construed as a reference to voting by members holding the shares except that it is thevotes allocated to the shares that shall be counted and not the number of members who actually voted and a reference to shares being present at a meetingshall be given a corresponding construction.6.A reference to money in these Articles is, unless otherwise stated, a reference to the currency in which shares in the Company shall be issued according tothe provisions of the Memorandum.7REGISTERED SHARES7.Every member holding registered shares in the Company shall be entitled to a certificate signed by a director or officer of the Company or such otherperson who may be authorised from time to time by resolution of directors or under the Seal, with or without the signature of any director of the Company,specifying the share or shares held by him and the signature of the director or officer or person so authorised and the Seal may be facsimiles.8.Any member receiving a share certificate for registered shares shall indemnify and hold the Company and its directors and officers harmless from any lossor liability which it or they may incur by reason of any wrongful or fraudulent use or representation made by any person by virtue of the possessionthereof. If a share certificate for registered shares is worn out or lost it may be renewed on production of the worn out certificate or on satisfactory proof ofits loss together with such indemnity as may be required by a resolution of directors.9.If several persons are registered as joint holders of any shares, any one of such persons may give an effectual receipt for any distribution payable inrespect of such shares.10.Nothing in these Articles shall require title to any shares or other Securities to be evidenced by a certificate if the Act and the rules of the Designated StockExchange permit otherwise.SHARES AND ISSUED SHARES11.Subject to the provisions of these Articles and, if applicable, the rules of the Designated Stock Exchange, and any resolution of members, the directors ofthe Company may, without limiting or affecting any rights previously conferred on the holders of any existing shares or class or series of shares, offer, allot,grant options over or otherwise dispose of shares to such persons, at such times and upon such terms and conditions as the Company may by resolutionof directors determine. The directors shall not issue more shares than the maximum number provided for in the Memorandum.12.The Company may issue fully paid, partly paid or nil paid shares as well as bonus shares. A partly paid or nil paid share or a share issued for a promissorynote or other written obligation for payment of a debt may be issued subject to forfeiture in the manner prescribed in these Articles.13.Shares in the Company may be issued for consideration in any form, including money, a promissory note or other obligation to contribute money orproperty, real property, personal property (including goodwill and knowhow) services rendered or a contract for future services and the amount of suchconsideration shall be determined by resolution of directors, except that in the case of shares with par value, the amount shall not be less than the parvalue, and in the absence of fraud the decision of the directors as to the value of the consideration received by the Company in respect of the issue isconclusive unless a question of law is involved.14.Before issuing shares for a consideration other than money, the directors shall pass a resolution stating;(a)the amount to be credited for the issue of the shares;(b)their determination of the reasonable present cash value of the nonmoney consideration for the issue; and(c)that, in their opinion, the present cash value of the nonmoney consideration for the issue is not less than the amount to be credited for the issueof the shares.15.A share issued by the Company upon conversion of, or in exchange for, another share or a debt obligation or other security in the Company, shall betreated for all purposes as having been issued for money equal to the consideration received or deemed to have been received by the Company in respectof the other share, debt obligation or security.16.Treasury shares may be disposed of by the Company on such terms and conditions (not otherwise inconsistent with these Articles) as the Company mayby resolution of directors determine.17.Subject to these Articles, the Company may purchase, redeem or otherwise acquire and hold its own shares save that the Company may not purchase,redeem or otherwise acquire its own shares without the consent of the member whose shares are to be purchased, redeemed or otherwise acquired unlessthe Company is permitted by the Act or any other provision in the Memorandum or Articles to purchase, redeem or otherwise acquire the shares withouttheir consent.818.No purchase, redemption or other acquisition of shares shall be made unless the directors determine by resolution of the directors that immediately after thepurchase, redemption or other acquisition the value of the Company’s assets will exceed its liabilities and the Company will be able to pay its debts as theyfall due.19.Sections 60 (Process for acquisition of own shares), 61 (Offer to one or more shareholders) and 62 (Shares redeemed otherwise than at the option ofcompany) of the Act shall not apply to the Company.20.A determination by the directors under Article 18 is not required;(a)the Company redeems a share or shares pursuant to a right of a member to have his shares redeemed or to have his shares exchanged for moneyor other property of the Company; or(b)by virtue of the provisions of Section 179 of the Act.21.Shares that the Company purchases, redeems or otherwise acquires pursuant to Article 17 may be cancelled or held as treasury shares except to the extentthat such shares are in excess of 80 percent of the issued shares of the Company in which case they shall be cancelled but they shall be available forreissue.22.Shares in the Company shall only be held as treasury shares where the directors of the Company resolve as such and the number of shares acquired, whenaggregated with shares of the same class already held by the Company as treasury shares, does not exceed 50% of the shares of that class previouslyissued by the Company, excluding shares that have been cancelled. All rights and obligations attaching to a treasury share are suspended and shall not beexercised by or against the Company while it holds the share as a treasury share. Treasury shares may be reissued by the Company as new shares.23.The Company shall keep a register of members containing;(a)the names and addresses of the persons who hold registered shares in the Company;(b)the number of each class and series of registered shares held by each member;(c)the date on which the name of each member was entered in the register of members;(d)the date on which any person ceased to be a member; and(e)such other information as may be prescribed pursuant to the Act.24.The register of members may be in any such form as the directors may approve but if it is in magnetic, electronic or other data storage form, the companymust be able to produce legible evidence of its contents.25.The original or a copy of the register of members shall be kept at the registered office of the Company or at the office of the registered agent of theCompany.26.A share is deemed to be issued when the name of the member is entered in the register of members.27.Subject to the Act and the rules of the Designated Stock Exchange, the board of directors without further consultation with the holders of any shares orSecurities may resolve that any class or series of shares or other Securities from time to time in issue or to be issued (including shares in issue at the date ofthe adoption of these Articles) may be issued, held, registered and converted to uncertificated form.28.Conversion of shares held in certificated form into shares held in uncertificated form, and vice versa, may be made in such manner as the board of directors,in its absolute discretion, may think fit. The Company or any duly authorised transfer agent (a “Transfer Agent”) shall enter on the register of membershow many shares are held by each member in uncertificated form and in certificated form and shall maintain the register of members. Notwithstanding anyprovision of these Articles, a class or series of shares shall not be treated as two classes by virtue only of that class or series comprising both certificatedshares and uncertificated Shares or as a result of any provision of these Articles which apply only in respect of certificated or uncertificated shares.9MORTGAGES AND CHARGES OF REGISTERED SHARES29.Members may mortgage or charge their registered shares in the Company with such mortgage or charge being evidenced in writing and signed by, or withthe authority of the registered holder of a registered share to which the mortgage or charge relates. The Company shall give effect to the terms of any validmortgage or charge except insofar as it may conflict with any requirements herein contained for consent to the transfer of shares.30.In the case of the mortgage or charge of registered shares there may be entered in the share register of the Company at the request of the registered holderof such shares(a)a statement that the shares are mortgaged or charged;(b)the name of the mortgagee or chargee; and(c)the date on which the aforesaid particulars are entered in the share register.31.Where particulars of a mortgage or charge are entered in the register of members, such particulars shall be cancelled(a)with the written consent of the named mortgagee or chargee or anyone authorized to act on his behalf; or(b)upon evidence satisfactory to the directors of the discharge of the liability secured by the mortgage or charge and the issue of such indemnities asthe directors shall consider necessary or desirable.32.Whilst particulars of a mortgage or charge over registered shares are entered in the register of members pursuant to the preceding articles no transfer ofany share comprised therein shall be effected without the written consent of the named mortgagee or chargee or anyone authorized to act on his behalf.FORFEITURE33.When shares not fully paid on issue or issued for a promissory note or other written obligation for payment of a debt have been issued subject toforfeiture, the following provisions shall apply.34.Written notice specifying a date for payment to be made and the shares in respect of which payment is to be made shall be served on the member whodefaults in making payment pursuant to a promissory note or other written obligations to pay a debt.35.The written notice specifying a date for payment shall(a)name a further date not earlier than the expiration of 14 days from the date of service of the notice on or before which payment required by thenotice is to be made; and(b)contain a statement that in the event of nonpayment at or before the time named in the notice the shares, or any of them, in respect of whichpayment is not made will be liable to be forfeited.36.Where a written notice has been issued and the requirements of the notice have not been complied with within the prescribed time, the directors may at anytime before tender of payment forfeit and cancel the shares to which the notice relates.37.The Company is under no obligation to refund any moneys to the member whose shares have been forfeited and cancelled pursuant to these provisions.Upon forfeiture and cancellation of the shares the member is discharged from any further obligation to the Company with respect to the shares forfeitedand cancelled.10LIEN38.The Company shall have a first and paramount lien on every share issued for a promissory note or for any other binding obligation to contribute money orproperty or any combination thereof to the Company, and the Company shall also have a first and paramount lien on every share standing registered in thename of a member, whether singly or jointly with any other person or persons, for all the debts and liabilities of such member or his estate to the Company,whether the same shall have been incurred before or after notice to the Company of any interest of any person other than such member, and whether thetime for the payment or discharge of the same shall have actually arrived or not, and notwithstanding that the same are joint debts or liabilities of suchmember or his estate and any other person, whether a member of the Company or not. The Company’s lien on a share shall extend to all distributionspayable thereon. The directors may at any time either generally, or in any particular case, waive any lien that has arisen or declare any share to be wholly orin part exempt from the provisions of this Article.39.In the absence of express provisions regarding sale in the promissory note or other binding obligation to contribute money or property, the Company maysell, in such manner as the directors may by resolution of directors determine, any share on which the Company has a lien, but no sale shall be made unlesssome sum in respect of which the lien exists is presently payable nor until the expiration of twentyone days after a notice in writing, stating and demandingpayment of the sum presently payable and giving notice of the intention to sell in default of such payment, has been served on the holder for the timebeing of the share.40.The net proceeds of the sale by the Company of any shares on which it has a lien shall be applied in or towards payment of discharge of the promissorynote or other binding obligation to contribute money or property or any combination thereof in respect of which the lien exists so far as the same ispresently payable and any residue shall (subject to a like lien for debts or liabilities not presently payable as existed upon the share prior to the sale) bepaid to the holder of the share immediately before such sale. For giving effect to any such sale the directors may authorize some person to transfer theshare sold to the purchaser thereof. The purchaser shall be registered as the holder of the share and he shall not be bound to see to the application of thepurchase money, nor shall his title to the share be affected by any irregularity or invalidity in the proceedings in reference to the sale.TRANSFER OF SHARES41.Registered shares in the Company are transferred by a written instrument of transfer signed by the transferor and containing the name and address of thetransferee. The instrument of transfer shall be signed by the transferee if registration as a holder of the share shall impose a liability to the Company on thetransferee. The instrument of transfer of a registered share shall be sent to the Company for registration.42.The board of directors may resolve that interests in shares in the form of depositary receipts may be transferred or otherwise dealt with in accordance withthe regulations and practices instituted by the operator of the Relevant System and any holder of interests in shares shall be entitled to transfer suchinterests by means of such Relevant System and the operator of the Relevant System shall act as agent of the holders of such interests for the purposes ofthe transfer of those interests.43.The register of members may be closed at such times and for such periods as the board of directors may from time to time determine, upon notice beinggiven by advertisement in such newspapers as may be required by the Act and the practice of the Designated Stock Exchange.44.The transfer of a registered share is effective when the name of the transferee is entered on the register of members.45.If the directors of the Company are satisfied that an instrument of transfer relating to shares has been signed but that the instrument has been lost ordestroyed, they may resolve;(a)to accept such evidence of the transfer of the shares as they consider appropriate; and(b)that the transferee’s name should be entered in the register of members notwithstanding the absence of the instrument of transfer.46.The Company must on the receipt of an instrument of transfer from the transferor or transferee of a registered share in the Company enter the name of thetransferee of the share in the register or members unless the directors, if permitted by the Memorandum or these Articles, resolve by resolution of directorsto refuse or delay the registration of the transfer for reasons that shall be specified in the resolution of directors.11TRANSMISSION OF SHARES47.The personal representative of a deceased member may transfer a share even though the personal representative is not a member at the time of the transfer.48.The personal representative, executor or administrator of a deceased member, the guardian of an incompetent member or the trustee of a bankrupt membershall be the only person recognized by the Company as having any title to his share but they shall not be entitled to exercise any rights as a member of theCompany until they have proceeded as set forth in the next following three Articles.49.The production to the Company of any document which is evidence of probate of the will, or letters of administration of the estate, or confirmation asexecutor, of a deceased member or of the appointment of a guardian of an incompetent member or the trustee of a bankrupt member shall be accepted by theCompany even if the deceased, incompetent or bankrupt member is domiciled outside the British Virgin Islands if the document evidencing the grant ofprobate or letters of administration, confirmation as executor, appointment as guardian or trustee in bankruptcy is issued by a foreign court which hadcompetent jurisdiction in the matter. For the purpose of establishing whether or not a foreign court had competent jurisdiction in such a matter the directorsmay obtain appropriate legal advice. The directors may also require an indemnity to be given by the executor, administrator, guardian or trustee inbankruptcy.50.The Company may enter in the register of members the name of any person becoming entitled by operation of law or otherwise to a share or shares inconsequence of the death, incompetence or bankruptcy upon such evidence being produced as may reasonably be required by the directors.51.Any person who has become entitled to a share or shares in consequence of the death, incompetence or bankruptcy of any member may, instead of beingregistered himself, request in writing that some person to be named by him be registered as the transferee of such share or shares and such request shalllikewise be treated as if it were a transfer.52.What amounts to incompetence on the part of a person is a matter to be determined by the court having regard to all the relevant evidence and thecircumstances of the case.REDUCTION OR INCREASE IN AUTHORISED AND UNISSUED SHARES48.The Company may amend the Memorandum to increase or reduce the maximum number of shares the Company is authorised to issue and may in respect ofany unissued shares increase or reduce the number of such shares, or effect any combination of the foregoing.49.The Company may(1)(a) divide its shares, including issued shares, into a larger number of shares; or (b) combine its shares, including issued shares, into a smallernumber of shares.(2)A division or combination of shares, including issued shares, of a class or series shall be for a larger or smaller number, as the case may be, ofshares in the same class or series.(3)A company shall not divide its shares under subsection (1)(a) or (2) if it would cause the maximum number of shares that the Company isauthorised to issue by its memorandum to be exceeded.(4)Where shares are divided or combined under this article, the aggregate par value of the new shares must be equal to the aggregate par value of theoriginal shares.MEETINGS AND CONSENTS OF MEMBERS50.The directors of the Company may convene meetings of the members of the Company at such times and in such manner and places within or outside theBritish Virgin Islands as the directors consider necessary or desirable. The Company may hold an annual general meeting, but shall not (unless required bythe applicable rules of the Designated Stock Exchange for so long as the Company’s Securities are listed or traded on the Designated Stock Exchange) beobliged to hold an annual general meeting.51.Upon the written request of members holding 30 percent or more of the outstanding voting shares in the Company the directors shall convene a meeting ofmembers.1252.The directors shall give not less than 7 days notice of meetings of members to those persons whose names on the date the notice is given appear asmembers in the share register of the Company and are entitled to vote at the meeting.53.The directors may fix the date notice is given of a meeting of members as the record date for determining those shares that are entitled to vote at themeeting.54.A meeting of members may be called on short notice:(a)if members holding not less than 90 percent of the total number of shares entitled to vote on all matters to be considered at the meeting, or 90percent of the votes of each class or series of shares where members are entitled to vote thereon as a class or series together with not less than a90 percent majority of the remaining votes, have agreed to short notice of the meeting, or(b)if all members holding shares entitled to vote on all or any matters to be considered at the meeting have waived notice of the meeting and for thispurpose presence at the meeting shall be deemed to constitute waiver.55.The inadvertent failure of the directors to give notice of a meeting to a member, or the fact that a member has not received notice, does not invalidate themeeting.56.A member may be represented at a meeting of members by a proxy who may speak and vote on behalf of the member.57.The instrument appointing a proxy shall be produced at the place appointed for the meeting before the time for holding the meeting at which the personnamed in such instrument proposes to vote.58.An instrument appointing a proxy shall be in substantially the following form or such other form as the Chairman of the meeting shall accept as properlyevidencing the wishes of the member appointing the proxy.(Name of Company)I/Webeing a member of the aboveCompany withshares HEREBY APPOINTofor failing himofto be my/our proxy to vote for me/us at the meeting of members to be held on the dayofand at any adjournment thereof.(Any restrictions on voting to be inserted here.)Signed this day ofMember59.The following shall apply in respect of joint ownership of shares:a.if two or more persons hold shares jointly each of them may be present in person or by proxy at a meeting of members and may speak as a member;b.if only one of the joint owners is present in person or by proxy he may vote on behalf of all joint owners, andc.if two or more of the joint owners are present in person or by proxy they must vote as one.60.A member shall be deemed to be present at a meeting of members if he participates by telephone or other electronic means and all members participating inthe meeting are able to hear each other.61.A meeting of members is duly constituted if, at the commencement of the meeting, there are present in person or by proxy not less than 50 percent of thevotes of the shares or class or series of shares entitled to vote on resolutions of members to be considered at the meeting. If a quorum be present,notwithstanding the fact that such quorum may be represented by only one person then such person may resolve any matter and a certificate signed bysuch person accompanied where such person be a proxy by a copy of the proxy form shall constitute a valid resolution of members.1362.If within two hours from the time appointed for the meeting a quorum is not present, the meeting, if convened upon the requisition of members, shall bedissolved; in any other case it shall stand adjourned to the next business day at the same time and place or to such other time and place as the directorsmay determine, and if at the adjourned meeting there are present within one hour from the time appointed for the meeting in person or by proxy not lessthan one third of the votes of the shares or each class or series of shares entitled to vote on the resolutions to be considered by the meeting, those presentshall constitute a quorum but otherwise the meeting shall be dissolved.63.At every meeting of members, the Chairman of the Board of Directors shall preside as chairman of the meeting. If there is no Chairman of the Board ofDirectors or if the Chairman of the Board of Directors is not present at the meeting, the members present shall choose some one of their number to be thechairman. If the members are unable to choose a chairman for any reason, then the person representing the greatest number of voting shares present inperson or by prescribed form of proxy at the meeting shall preside as chairman failing which the oldest individual member or representative of a memberpresent shall take the chair.64.The chairman may, with the consent of the meeting, adjourn any meeting from time to time, and from place to place, but no business shall be transacted atany adjourned meeting other than the business left unfinished at the meeting from which the adjournment took place.65.At any meeting of the members the chairman shall be responsible for deciding in such manner as he shall consider appropriate whether any resolution hasbeen carried or not and the result of his decision shall be announced to the meeting and recorded in the minutes thereof. If the chairman shall have anydoubt as to the outcome of any resolution put to the vote, he shall cause a poll to be taken of all votes cast upon such resolution, but if the chairman shallfail to take a poll then any member present in person or by proxy who disputes the announcement by the chairman of the result of any vote mayimmediately following such announcement demand that a poll be taken and the chairman shall thereupon cause a poll to be taken. If a poll is taken at anymeeting, the result thereof shall be duly recorded in the minutes of that meeting by the chairman.66.Any person other than an individual shall be regarded as one member and subject to the specific provisions hereinafter contained for the appointment ofrepresentatives of such persons the right of any individual to speak for or represent such member shall be determined by the law of the jurisdiction where,and by the documents by which, the person is constituted or derives its existence. In case of doubt, the directors may in good faith seek legal advice fromany qualified person and unless and until a court of competent jurisdiction shall otherwise rule, the directors may rely and act upon such advice withoutincurring any liability to any member.67.Any person other than an individual which is a member of the Company may by resolution of its directors or other governing body authorize such personas it thinks fit to act as its representative at any meeting of the Company or of any class of members of the Company, and the person so authorized shall beentitled to exercise the same powers on behalf of the person which he represents as that person could exercise if it were an individual member of theCompany.68.The chairman of any meeting at which a vote is cast by proxy or on behalf of any person other than an individual may call for a notarially certified copy ofsuch proxy or authority which shall be produced within 7 days of being so requested or the votes cast by such proxy or on behalf of such person shall bedisregarded.69.Directors of the Company may attend and speak at any meeting of members of the Company and at any separate meeting of the holders of any class orseries of shares in the Company.70.An action that may be taken by the members at a meeting may also be taken by a resolution of members consented to in writing or by telex, telegram, cable,facsimile or other written electronic communication, without the need for any notice, but if any resolution of members is adopted otherwise than by theunanimous written consent of all members, a copy of such resolution shall forthwith be sent to all members not consenting to such resolution. The consentmay be in the form of counterparts, each counterpart being signed by one or more members.14DIRECTORS71.The first directors of the Company shall be appointed by the first registered agent of the Company and thereafter the directors shall be appointed byresolution of members, subject to Article 78, for such term as the members determine. A person shall not be appointed as a director unless he hasconsented in writing to be a director.72.The minimum number of directors shall be one and the maximum number shall be 20. Unless otherwise determined by the Company in a meeting ofshareholders and subject to the requirements of the Memorandum, the directors may by a Resolution of Directors, amend this Regulation 72 to change thenumber of directors. For as long as Securities of the Company are listed or traded on the Designated Stock Exchange, the directors shall include suchnumber of Independent Directors as applicable law, rules or regulations of the Designated Stock Exchange may require for a foreign private issuer as longas the Company is a foreign private issuer.73.Each director shall hold office for the term, if any, fixed by resolution of members or until his earlier death, resignation or removal.74.Where the Company has only one member who is an individual and that member is also the sole director of the Company, that sole member/director may, byinstrument in writing, nominate a person who is not disqualified from being a director of the Company under section 111(1) of the Act as a reserve directorof the Company to act in the place of the sole director in the event of his death.75.The nomination of a person as a reserve director of the Company ceases to have effect if;a.before the death of the sole member/director who nominated him;(i)he resigns as reserve director, or(ii)the sole member/director revokes the nomination in writing; orb.the sole member/director who nominated him ceases to be the sole member/director of the Company for any reason other than his death.76.A director may be removed from office, with or without cause, by a resolution of directors or a resolution of members. For the purposes of this Regulation76, “cause” means the willful and continuous failure by a director to substantially perform his duties to the Company (other than any such failure resultingfrom incapacity due to physical or mental illness) or the willful engaging by the director in gross misconduct materially and demonstrably injurious to theCompany. If a director is removed from office without cause by a resolution of the members, for the purposes of this Regulation, the resolution of memberswill require the affirmative vote of the holders of 66 2/3 percent or more of the outstanding votes of the shares entitled to vote thereon.77.A director may resign his office by giving written notice of his resignation to the Company and the resignation shall have effect from the date the notice isreceived by the Company or from such later date as may be specified in the notice. A director of the Company shall resign forthwith if he is, or becomes,disqualified to act as a director under the Act.78.The directors may at any time by resolution of directors appoint any person to be a director to fill a vacancy. There is a vacancy if a director dies orotherwise ceases to hold office as a director prior to the expiration of his term of office, where his term of office was fixed upon his appointment. Thedirectors may not appoint a director to fill a vacancy for a term exceeding the term that remained when the person who has ceased to be a director left orotherwise ceased to hold office.79.The Company shall keep a register of directors containing:a.the names and addresses of the persons who are directors of the Company or who have been nominated as reserve directors of the Company;b.the date on which each person whose name is entered in the register was appointed as a director of the Company or nominated as a reservedirector of the Company;c.the date on which each person named as a director ceased to be a director of the Company;d.the date on which the nomination of any person nominated as a reserve director ceased to have effect; ande.such other information as may be prescribed pursuant to the Act.1580.The original or a copy of any register of directors shall be kept at the office of the registered agent of the Company.81.The register of directors may be in any such form as the directors may approve but if it is in magnetic, electronic or other data storage form, the companymust be able to produce legible evidence of its contents.82.With the prior or subsequent approval by a resolution of members, the directors may, by a resolution of directors, fix the emoluments of directors withrespect to services to be rendered in any capacity to the Company.83.A director shall not require a share qualification and may be an individual or a company.POWERS OF DIRECTORS84.The business and affairs of the Company shall be managed by the directors who may pay all expenses incurred preliminary to and in connection with theformation and registration of the Company and may exercise all such powers of the Company as are not by the Act or by the Memorandum or theseArticles required to be exercised by the members of the Company, subject to any delegation of such powers as may be authorized by these Articles and tosuch requirements as may be prescribed by a resolution of members; but no requirement made by a resolution of members shall prevail if it be inconsistentwith these Articles nor shall such requirement invalidate any prior act of the directors which would have been valid if such requirement had not been made.Notwithstanding anything in Section 175 of the Act the directors shall have the power to sell, transfer, lease, exchange or otherwise dispose of more thanfifty percent of the assets of the Company without submitting a proposal to or obtaining the consent of the members of the Company.85.If the Company is a whollyowned subsidiary of a holding company a director may when exercising powers or performing duties as a director act in amanner which he believes is in the best interests of the holding company even though it may not be in the best interests of the Company.86.The directors may, by a resolution of directors, appoint any person, including a person who is a director, to be an officer or agent of the Company. Theresolution of directors appointing an agent may authorize the agent to appoint one or more substitutes or delegates to exercise some or all of the powersconferred on the agent by the Company.87.Every officer or agent of the Company has such powers and authority of the directors, including the power and authority to affix the Seal, as are set forth inthese Articles or in the resolution of directors appointing the officer or agent, except that no agent has any power or authority with respect to thefollowing;a.to amend the memorandum or articles;b.to change the registered office or agent;c.to designate committees of directors;d.to delegate powers to a committee of directors;e.to appoint or remove directors;f.to appoint or remove an agent;g.to fix emoluments of directors;h.to approve a plan of merger, consolidation or arrangement;i.to make a declaration of solvency for the purposes of section 198(1)(a) of the Act or to approve a liquidation plan;j.to make a determination under section 57(1) of the Act that the company will, immediately after a proposed distribution, satisfy the solvency test;ork.to authorise the Company to continue as a company incorporated under the laws of a jurisdiction outside the British Virgin Islands.1688.Any director which is a body corporate may appoint any person its duly authorized representative for the purpose of representing it at meetings of theBoard of Directors or with respect to unanimous written consents.89.The continuing directors may act notwithstanding any vacancy in their body, save that if their number is reduced to their knowledge below the numberfixed by or pursuant to these Articles as the necessary quorum for a meeting of directors, the continuing directors or director may act only for the purposeof appointing directors to fill any vacancy that has arisen or for summoning a meeting of members.90.The directors may by resolution of directors exercise all the powers of the Company to borrow money and to mortgage or charge its undertakings andproperty or any part thereof, to issue debentures, debenture stock and other securities whenever money is borrowed or as security for any debt, liability orobligation of the Company or of any third party.91.All cheques, promissory notes, drafts, bills of exchange and other negotiable instruments and all receipts for moneys paid to the Company, shall be signed,drawn, accepted, endorsed or otherwise executed, as the case may be, in such manner as shall from time to time be determined by resolution of directors.92.The Company shall keep a register of all relevant charges created by the Company showing:a.if the charge is a charge created by the Company, the date of its creation or if the charge is existing on property acquired by the Company, the dateon which the property was acquired;b.a short description of the liability secured by the charge;c.a short description of the property charged;d.the name and address of the trustee for the security, or if there is no such trustee the name and address of the chargee;e.unless the charge is a security to bearer, the name and address of the holder of the charge;f.details of any prohibition or restriction , if any, contained in the instrument creating the charge on the power of the company to create any futurecharge ranking in priority to or equally with the charge; andg.such other information as may be prescribed pursuant to the Act.93.The original or a copy of the register of charges shall be kept at the registered office of the Company or at the office of the registered agent of the Company.PROCEEDINGS OF DIRECTORS94.The directors of the Company or any committee thereof may meet at such times and in such manner and places within or outside the British Virgin Islandsas the directors may determine to be necessary or desirable. Any one or more directors may convene a meeting of directors.95.A director shall be deemed to be present at a meeting of directors if he participates by telephone or other electronic means and all directors participating inthe meeting are able to hear each other.96.A director shall be given not less than 3 days notice of meetings of directors, but a meeting of directors held without 3 days notice having been given to alldirectors shall be valid if all the directors entitled to vote at the meeting who do not attend, waive notice of the meeting and for this purpose, the presenceof a director at a meeting shall constitute waiver on his part. The inadvertent failure to give notice of a meeting to a director, or the fact that a director hasnot received the notice, does not invalidate the meeting.1797.A director may by a written instrument appoint an alternate who need not be a director and an alternate is entitled to attend meetings in the absence of thedirector who appointed him and to vote or consent in place of the director.98.A meeting of directors is duly constituted for all purposes if at the commencement of the meeting there are present in person or by alternate not less thanone half of the total number of directors, unless there are only 2 directors in which case the quorum shall be 2.99.If the Company shall have only one director the provisions herein contained for meetings of the directors shall not apply but such sole director shall havefull power to represent and act for the Company in all matters as are not by the Act or the Memorandum or these Articles required to be exercised by themembers of the Company and in lieu of minutes of a meeting shall record in writing and sign a note or memorandum of all matters requiring a resolution ofdirectors. Such a note or memorandum shall constitute sufficient evidence of such resolution for all purposes.100.At every meeting of the directors the Chairman of the Board of Directors shall preside as chairman of the meeting. If there is no Chairman of the Board ofDirectors or if the Chairman of the Board of Directors is not present at the meeting the Vice Chairman of the Board of Directors shall preside. If there is noVice Chairman of the Board of Directors or if the Vice Chairman of the Board of Directors is not present at the meeting the directors present shall choosesome one of their number to be chairman of the meeting.101.An action that may be taken by the directors or a committee of directors at a meeting may also be taken by a resolution of directors or a committee ofdirectors consented to in writing or by telex, telegram, cable, facsimile or other written electronic communication by all directors or all members of thecommittee as the case may be, without the need for any notice. The consent may be in the form of counterparts, each counterpart being signed by one ormore directors.102.The directors shall cause the following records to be kept:a.minutes of all meetings of directors, members, committees of directors and committees of members; andb.copies of all resolutions consented to by directors, members, committees of directors and committees of members.103.The resolutions, records and minutes referred to in the preceding Article shall be kept at the registered office of the Company, its principal place ofbusiness or at such other place as the directors determine.104.The directors may, by resolution of directors, designate one or more committees, each consisting of one or more directors.105.Subject to the following Article, each committee of directors has such powers and authorities of the directors, including the power and authority to affix theSeal, as are set forth in the resolution of directors establishing the committee.106.The directors have no power to delegate the following powers to a committee of directors;a.to amend the memorandum or articles;b.to change the registered office or agent;c.to designate committees of directors;d.to delegate powers to a committee of directors;e.to appoint or remove directors;f.to appoint or remove an agent;g.to fix emoluments of directors;18h.to approve a plan of merger, consolidation or arrangement;i.to make a declaration of solvency for the purposes of section 198(1)(a) or to approve a liquidation plan;j.to make a determination under section 57(1) that the company will, immediately after a proposed distribution, satisfy the solvency test; ork.to authorise the company to continue as a company incorporated under the laws of a jurisdiction outside the British Virgin Islands.Paragraphs (c) and (d) do not prevent a committee of directors, where authorised by the directors, from appointing a subcommittee and delegating powersexercisable by the committee to the subcommittee.107.The meetings and proceedings of each committee of directors consisting of 2 or more directors shall be governed mutatis mutandis by the provisions ofthese Articles regulating the proceedings of directors so far as the same are not superseded by any provisions in the resolution establishing the committee.108.Without prejudice to the freedom of the directors to establish any other committee, if the shares (or depositary receipts therefore) are listed or quoted onthe Designated Stock Exchange, and if required by the Designated Stock Exchange, the directors shall establish and maintain an audit committee as acommittee of the board of directors, the composition and responsibilities of which shall comply with the rules and regulations of the SEC and theDesignated Stock Exchange. The audit committee shall meet at least once every financial quarter, or more frequently as circumstances dictate.109.The Company shall adopt a formal written audit committee charter and review and assess the adequacy of the formal written charter on an annual basis.The charter shall specify the responsibilities of the Audit Committee which shall include responsibility for, among other things, ensuring its receipt from theoutside auditors of the Company of a formal written statement delineating all relationships between the auditor and the Company, and the AuditCommittee’s responsibility for actively engaging in a dialogue with the auditor with respect to any disclosed relationships or services that may impact theobjectivity and independence of the auditor take appropriate action to oversee the independence of the outside auditor. In addition, the Audit Committee isresponsible for reviewing potential conflict of interest situations and approving all Related Party Transactions.110.Without prejudice to the freedom of the directors to establish any other committees, the Board may establish a Stock Option Committee to administer theCompany’s stock option plans, including authority to make and modify awards under such plans. For so long as the Securities of the Company are listed ortraded on the Designated Stock Exchange, the Stock Option Committee shall have at least two Independent Directors. The Stock Option Committee willadminister the Company’s stock option plans, including the authority to make and modify awards under such plans.111.Without prejudice to the freedom of the directors to establish any other committees, the Board may establish a Nominating Committee to assist the Board inidentifying qualified individuals to become members of the Board.OFFICERS112.The Company may by resolution of directors appoint officers of the Company at such times as shall be considered necessary or expedient. Such officersmay consist of a Chairman of the Board of Directors, a Vice Chairman of the Board of Directors, a President and one or more Vice Presidents, Secretaries andTreasurers and such other officers as may from time to time be deemed desirable. Any number of offices may be held by the same person.113.The officers shall perform such duties as shall be prescribed at the time of their appointment subject to any modification in such duties as may beprescribed thereafter by resolution of directors or resolution of members, but in the absence of any specific allocation of duties it shall be the responsibilityof the Chairman of the Board of Directors to preside at meetings of directors and members, the Vice Chairman to act in the absence of the Chairman, thePresident to manage the day to day affairs of the Company, the Vice Presidents to act in order of seniority in the absence of the President but otherwise toperform such duties as may be delegated to them by the President, the Secretaries to maintain the share register, minute books and records (other thanfinancial records) of the Company and to ensure compliance with all procedural requirements imposed on the Company by applicable law, and the Treasurerto be responsible for the financial affairs of the Company.19114.Subject to the rules of the Designated Stock Exchange, the emoluments of all officers shall be fixed by resolution of directors.115.The officers of the Company shall hold office until their successors are duly elected and qualified, but any officer elected or appointed by the directors maybe removed at any time, with or without cause, by resolution of directors. Any vacancy occurring in any office of the Company may be filled by resolutionof directors.CONFLICT OF INTERESTS116.A director of the Company shall, forthwith after becoming aware of the fact that he is interested in a transaction entered into or to be entered into by theCompany, disclose the interest to all other directors of the Company.117.A director of the Company is not required to comply with Article 112 if;a.the transaction or proposed transaction is between the director and the Company; andb.the transaction or proposed transaction is or is to be entered into in the ordinary course of the company’s business and on usual terms andconditions.118.For the purposes of Article 112 a disclosure to all other directors to the effect that a director is a member, director or officer of another named entity or has afiduciary relationship with respect to the entity or a named individual and is to be regarded as interested in any transaction which may, after the date of theentry or disclosure, be entered into with that entity or individual, is a sufficient disclosure of interest in relation to that transaction.119.A.A director of the Company who is interested in a transaction entered into or to be entered into by the Company may:(i)vote on a matter relating to the transaction;(ii)attend a meeting of directors at which a matter relating to the transaction arises and be included among the directors present at the meeting for thepurposes of a quorum; and(iii)sign a document on behalf of the Company, or do any other thing in his capacity as a director, that relates to the transaction,and, subject to compliance with the Act shall not, by reason of his office be accountable to the Company for any benefit which he derives from suchtransaction and no such transaction shall be liable to be avoided on the grounds of any such interest or benefit.119.B.For so long the Securities of the Company are listed or traded on the Designated Stock Exchange, the Company shall conduct an appropriate review of allmaterial Related Party Transactions on an ongoing basis and shall utilize the Audit Committee for the review and approval of potential conflicts of interestsituations.INDEMNIFICATION120.Subject to the limitations hereinafter provided the Company may indemnify against all expenses, including legal fees, and against all judgments, fines andamounts paid in settlement and reasonably incurred in connection with legal, administrative or investigative proceedings any person who;a.is or was a party or is threatened to be made a party to any threatened, pending or completed proceedings, whether civil, criminal, administrative orinvestigative, by reason of the fact that the person is or was a director, an officer or a liquidator of the Company; orb.is or was, at the request of the Company, serving as a director of, or in any other capacity is or was acting for, another body corporate or apartnership, joint venture, trust or other enterprise.20121.The Company may only indemnify a person if the person acted honestly and in good faith in what he believed to be in the best interests of the Companyand, in the case of criminal proceedings, the person had no reasonable cause to believe that his conduct was unlawful.122.For the purposes of the preceding Article, a director acts in the best interests of the Company if he acts in the best interests of;a.the Company’s holding company; orb.a shareholder or shareholders of the Company; in either case, in the circumstances specified in Article 85.123.The decision of the directors as to whether the person acted honestly and in good faith and with a view to the best interests of the Company and as towhether the person had no reasonable cause to believe that his conduct was unlawful is, in the absence of fraud, sufficient for the purposes of theseArticles, unless a question of law is involved.124.The termination of any proceedings by any judgment, order, settlement, conviction or the entering of a nolle prosequi does not, by itself, create apresumption that the person did not act honestly and in good faith and with a view to the best interests of the Company or that the person had reasonablecause to believe that his conduct was unlawful.Consolidated Statements of Changes in Stockholder’s EquityF5Consolidated Statements of Cash FlowsF6Notes to Consolidated Financial StatementsF7 F22F1REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRMTo the Shareholder and the Sole Director ofLK Technology Ltd.Opinion on the Consolidated Financial StatementsWe have audited the accompanying consolidated balance sheets of LK Technology Ltd. and. subsidiaries (the “Company”) as of December 31, 2017 and 2016, andthe related consolidated statements of operations and comprehensive loss, changes in shareholder’s equity and cash flows for each of the years then ended, andthe related notes (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in allmaterial respects, the consolidated financial position of the Company as of December 31, 2017 and 2016, and the consolidated results of its operations and its cashflows for each of the years then ended, in conformity with accounting principles generally accepted in the United States of America.Basis for OpinionThese consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’sconsolidated financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (UnitedStates) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules andregulations of the Securities and Exchange Commission and the PCAOB.We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonableassurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have,nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internalcontrol over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting.Accordingly, we express no such opinion.An independent member firm of Moore Stephens International Limited – members in principal cities throughout the worldOur audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, andperforming procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in theconsolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well asevaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion.Certified Public AccountantsWe have served as the Company’s auditor since 2018.Hong KongMay 25, 2018F2LK TECHNOLOGY LTD. AND SUBSIDIARIESCONSOLIDATED BALANCE SHEETS(IN U.S. DOLLARS)As of December 31,20172016AssetsCurrent assets:Cash and cash equivalents$72,379$83,843Accounts receivable, net of allowance for doubtful accounts9,729,6251,865,836Other receivables and prepayment2,376,7452,287,934Amounts due from related parties11,760,692Total current assets23,939,4414,237,613Property and equipment, net5,044,8727,771,027Intangible assets, net1,154,1971,682,445Goodwill7,239,9367,239,936Amount due from a related party204,412183,811TOTAL ASSETS37,582,85821,114,832LiabilitiesCurrent liabilities:Accounts payable8,784,5186,446,584Accrued liabilities and other payables12,962,91211,329,613Amounts due to related parties3,563,68316,129,323Total current liabilities25,311,11333,905,520Total liabilities25,311,11333,905,520Commitments and contingenciesShareholder’s Equity (Deficit)Share capitalCommon stock, $1 par value per share; 50,000 shares authorized as of December 31, 2017 and 2016, 1 share issued andoutstanding as of December 31, 2017 and 201611Additional paidin capital41,819,68510,037,469Accumulated deficit(29,936,158)(23,125,704)Accumulated other comprehensive income (loss)388,217297,546Total Shareholder’s Equity (Deficit)12,271,745(12,790,688)TOTAL LIABILITIES AND SHAREHOLDER’S EQUITY (DEFICIT)$37,582,858$21,114,832F3LK TECHNOLOGY LTD. AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS(IN U.S. DOLLARS)For the years endedDecember 31,20172016Revenues$26,082,417$5,233,145Less: Cost of revenues5,547,7796,315,504Less: Operating expenses:Selling and marketing23,908,7336,209,804General and administrative2,451,2492,108,854Research and development1,046,1982,882,202Total operating expenses27,406,18011,200,860Loss from operations(6,871,542)(12,283,219)Other income (expense):Interest expense(26,611)(4,412)Foreign exchange gains (losses)350,679(298,257)Loss from investment(428,571)Other income (expense), net(262,980)(34,572)Total other income (expense), net61,088(765,812)Loss before income taxes(6,810,454)(13,049,031)Income taxesNet loss$(6,810,454)$(13,049,031)Other comprehensive income:Foreign currency translation adjustment90,671387,375Total comprehensive loss$(6,719,783)$(12,661,656)F4LK TECHNOLOGY LTD. AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDER’S EQUITY(IN U.S. DOLLARS)Accumulated otherTotalOrdinary sharesAdditionalpaidin AccumulatedcomprehensiveIncomeShareholder’sEquity SharesAmountcapitaldeficits(loss)(Deficit)Balance as of December 31, 20151$ 1$8,250,505$(10,076,673)$(89,829)$(1,915,996)Capital contribution from C Media1,786,9641,786,964Net loss(13,049,031)(13,049,031)Foreign currency translation adjustment387,375387,375Balance as of December 31, 20161110,037,469(23,125,704)297,546(12,790,688)Capital contribution from C Media31,782,21631,782,216Net loss(6,810,454)(6,810,454)Foreign currency translation adjustment90,67190,671Balance as of December 31, 20171$1$41,819,685$(29,936,158)$388,217$12,271,745F5LK TECHNOLOGY LTD. AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF CASH FLOWS(IN U.S. DOLLARS)For the years endedDecember 31,20172016CASH FLOWS FROM OPERATING ACTIVITIES:Net loss$(6,810,454)$(13,049,031)Depreciation and amortization3,316,1813,245,161Loss on disposal of property and equipment115,19373,022Increase in allowance for doubtful accounts445,39562,591Changes in assets and liabilitiesAccounts receivable(7,933,730)(1,507,296)Other receivables and prepayment(2,202,960)2,873,984Accounts payable2,230,5434,757,457Accrued liabilities and other payables1,866,1377,483,441Net cash (used in) provided by operating activities(8,973,695)3,939,329CASH FLOWS FROM INVESTING ACTIVITIES:Purchase of property and equipment(12,689)(3,554,258)Proceeds from disposal of property and equipment29,942Net cash provided by (used in) investing activities17,253(3,554,258)CASH FLOWS FROM FINANCING ACTIVITIES:Advances from related parties8,938,290(1,197,870)Net cash provided by (used in) financing activities8,938,290(1,197,870)Effect of exchange rate changes6,688(32,746)Net decrease in cash and cash equivalents(11,464)(845,545)Cash and cash equivalents, at beginning of year83,843929,388Cash and cash equivalents, at end of year$72,379$83,843Supplemental cash flow disclosures:Interest paid26,6114,412Income taxes paidF6LK TECHNOLOGY LTD. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS(IN U.S. DOLLARS)NOTE 1 – DESCRIPTION OF BUSINESS AND ORGANIZATIONStar Chariot Limited was incorporated in the British Virgin Islands (“BVI”) as an exempted limited liability company on March 3, 2011. On January 18, 2018, it wasrenamed as LK Technology Ltd. (“LK Technology ” or the “Company”).LK Technology, its subsidiaries and its variable interest entities (“VIEs”) (collectively the “Group”) operate mobile application service for longdistance travel in thePeople’s Republic of China (the “PRC”). The core mobile application product, Luokuang, is made as an LBSsocial contents and services distribution platform. Itoffers functions based on various travel scenarios, e.g. information, entertainment, travel, ecommerce, O2O, advertising, etc.As of December 31, 2017, details of the Company’s subsidiaries and VIEs are as follows:NameDate ofincorporationPlace ofincorporationPercentage oflegal ownershipSubsidiaries:MMB LimitedApr 11, 2013Hong Kong100%Mobile Media (China) LimitedNov 6, 2007Hong Kong100%Zhong Chuan Tian Xia Information and Technology (Beijing) LimitedFeb 1, 2013PRC100%Zhong Chuan Tian Xia Information and Technology (Shenzhen) LimitedDec 23, 2010PRC100%VIEs:Beijing Zhong Chuan Shi Xun Technology Limited (“Zhong Chuan Shi Xun”)May 17, 2004PRC100%Jiangsu Zhong Chuan Rui You Information and Technology Limited (“Zhong Chuan Rui You”)May 26, 2011PRC100%Huoerguosi Luokuang Information and Technology Limited (“Huoerguosi Luokuang”)Jul 19, 2017PRC100%Shenzhen Jiu Zhou Shi Dai Digital and Technology Limited (“Jiu Zhou Shi Dai”)Nov 26, 2004PRC100%F7NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIESBasis of presentationThe consolidated financial statements of the Group have been prepared in accordance with accounting principles generally accepted in the United States of America(“US GAAP”).The Group incurred losses from operations of $6,871,542 and $12,283,219 for the years ended December 31, 2017 and 2016, respectively. As of December 31, 2017, theGroup had a shareholder’s equity of $12,271,145. The Group had negative cash flows from operating activities for the year ended December 31, 2017 of $8,973,695.As of December 31, 2017, the Group had cash and cash equivalents of $72,379 and a working capital deficit of $1,371,672. From 2018 and onwards, the Group willfocus on improving operation efficiency and cost reduction, and enhancing marketing functions to attract more users. The Group regularly monitors its current andexpected liquidity requirements to ensure that it maintains sufficient cash balances and accessible credit to meet its liquidity requirements in the short and long term.The parent company continues to provide cash flow to the Group. Based on working capital conditions and forecast for future operations, the Group believes that itwill be able to meet its payment obligations and other commitments for at least the following twelve months.Principles of consolidationThe consolidated financial statements include the financial statements of the Company, its subsidiaries, including the whollyforeign owned enterprises (“WFOEs”),and VIEs for which the Company is the primary beneficiary. All transactions and balances among the Company, its subsidiaries and consolidated VIEs have beeneliminated upon consolidation. The results of subsidiaries and consolidated VIEs acquired or disposed of are recorded in the consolidated statements of operationsfrom the effective date of acquisition or up to the effective date of disposal, as appropriate.A subsidiary is an entity in which (i) the Company directly or indirectly controls more than 50% of the voting power; or (ii) the Company has the power to appoint orremove the majority of the members of the board of directors or to cast a majority of votes at the meeting of the board of directors or to govern the financial andoperating policies of the investee pursuant to a statute or under an agreement among the shareholders or equity holders. A VIE is required to be consolidated by theprimary beneficiary of the entity if the equity holders in the entity do not have the characteristics of a controlling financial interest or do not have sufficient equity atrisk for the entity to finance its activities without additional subordinated financial support from other parties.F8To comply with the PRC legal restrictions on foreign ownership of companies that operate mobile application services, the Group operates in such restricted servicesin the PRC through certain PRC domestic companies, whose equity interests are held by certain management members or founders of the Group. Part of theregistered capital of these PRC domestic companies was funded by certain management members or founders of the Group. The Group has entered into certainexclusive business services agreements with these PRC domestic companies, which entitle it to receive a majority of their residual returns and make it obligatory forthe Group to absorb a majority of the risk of losses from their activities. In addition, the Group has entered into certain agreements with those management membersor founders, including equity interest pledge agreements of the equity interests held by those management members or founders and exclusive option agreements toacquire the equity interests in these companies when permitted by the PRC laws, rules and regulations.Details of the typical VIE structure of the Group’s significant consolidated VIEs, primarily domestic companies associated with the operations such as Zhong ChuanShi Xun, Zhong Chuan Rui You, Huoerguosi Luokuang and Jiu Zhou Shi Dai, are set forth below:(i)Contracts that give the Group effective control of VIEsExclusive option agreementsThe VIE equity holders have granted the WFOEs exclusive call options to purchase their equity interest in the VIEs at an exercise price equal to the higherof (i) the registered capital in the VIEs; and (ii) the minimum price as permitted by applicable PRC laws. Each relevant VIE has further granted the relevantWFOE an exclusive call option to purchase its assets at an exercise price equal to the book value of the assets or the minimum price as permitted byapplicable PRC laws, whichever is higher. The WFOEs may nominate another entity or individual to purchase the equity interest or assets, if applicable,under the call options. Each call option is exercisable subject to the condition that applicable PRC laws, rules and regulations do not prohibit completion ofthe transfer of the equity interest or assets pursuant to the call option. Each WFOE is entitled to all dividends and other distributions declared by the VIE,and the VIE equity holders have agreed to give up their rights to receive any distributions or proceeds from the disposal of their equity interests in the VIEwhich are in excess of the original registered capital that they contributed to the VIE, and to pay any such distributions or premium to the WFOE. Theexclusive call option agreements remain in effect until the equity interest or assets that are the subject of such agreements are transferred to the WFOEs.Equity pledge agreementsPursuant to the relevant equity pledge agreements, the relevant VIE equity holders have pledged all of their interests in the equity of the VIEs as acontinuing first priority security interest in favor of the corresponding WFOEs to secure the performance of obligations by the VIEs and/or the equityholders under the other structure contracts. Each WFOE is entitled to exercise its right to dispose of the VIE equity holders’ pledged interests in the equityof the VIE and has priority in receiving payment by the application of proceeds from the auction or sale of such pledged interests, in the event of anybreach or default under the loan agreement or other structure contracts, if applicable. These equity pledge agreements remain in force for the duration ofthe relevant loan agreement and other structure contracts.F9(ii)Contracts that enable the Group to receive substantially all of the economic benefits from the VIEsExclusive business services agreementsEach relevant VIE has entered into an exclusive business services agreement with the respective WFOE, pursuant to which the relevant WFOE providesexclusive business services to the VIE. In exchange, the VIE pays a service fee to the WFOE which typically amounts to what would be substantially all ofthe VIE’s pretax profit, resulting in a transfer of substantially all of the profits from the VIE to the WFOE.Other arrangementsThe exclusive call option agreements described above also enable the Group to receive substantially all of the economic benefits from the VIEs by typicallyentitling the WFOEs to all dividends and other distributions declared by the VIEs and to any distributions or proceeds from the disposal by the VIE equityholders of their equity interests in the VIEs that are in excess of the original registered capital that they contributed to the VIEs.Based on these contractual agreements, the Group believes that the PRC domestic companies as described above should be considered as VIEs because the equityholders do not have significant equity at risk nor do they have the characteristics of a controlling financial interest. Given that the Group is the primary beneficiaryof these PRC domestic companies, the Group believes that these VIEs should be consolidated based on the structure as described above.Under the contractual arrangements with the consolidated VIEs, the Group has the power to direct activities of the consolidated VIEs and can have assetstransferred out of the consolidated VIEs under its control. Therefore, the Group considers that there is no asset in any of the consolidated VIEs that can be usedonly to settle obligations of the consolidated VIEs, except for registered capital and PRC statutory reserves. As all consolidated VIEs are incorporated as limitedliability companies under the Company Law of the PRC, creditors of the consolidated VIEs do not have recourse to the general credit of the Group for any of theliabilities of the consolidated VIEs.Currently there is no contractual arrangement which requires the Group to provide additional financial support to the consolidated VIEs. However, as the Groupconducts its businesses primarily based on the licenses and approvals held by its consolidated VIEs, the Group has provided and will continue to provide financialsupport to the consolidated VIEs considering the business requirements of the consolidated VIEs, as well as the Group’s own business objectives in the future.F10Use of estimatesThe preparation of financial statements in conformity with US GAAP requires the Group to make estimates and assumptions that affect the reported amounts ofassets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expensesduring the reporting period. The most significant estimates are the allowance for doubtful accounts, the useful lives of property and equipment and intangibleassets, impairment of longlived assets and goodwill. Actual results could differ from those estimates.Fair value measurementsFair value is the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at themeasurement date under current market conditions. When determining the fair value measurements for assets and liabilities required or permitted to be recorded atfair value, the Group considers the principal or most advantageous market in which it would transact and it considers assumptions that market participants woulduse when pricing the asset or liability.Authoritative literature provides a fair value hierarchy which prioritizes the inputs to valuation techniques used to measure fair value into three broad levels. Thelevel in the hierarchy within which the fair value measurement in its entirety falls is based upon the lowest level of input that is significant to the fair valuemeasurement as follows:Level 1Level 1 applies to assets or liabilities for which there are quoted prices in active markets for identical assets or liabilities.Level 2Level 2 applies to assets or liabilities for which there are inputs other than quoted prices included within Level 1 that are observable for the asset or liability such asquoted prices for similar assets or liabilities in active markets; quoted prices for identical assets or liabilities in markets with insufficient volume or infrequenttransactions (less active markets); or modelderived valuations in which significant inputs are observable or can be derived principally from, or corroborated by,observable market data.Level 3Level 3 applies to assets or liabilities for which there are unobservable inputs to the valuation methodology that are significant to the measurement of the fair valueof the assets or liabilities.F11Cash and cash equivalentsCash and cash equivalents primarily consist of cash, money market funds, investments in interest bearing demand deposit accounts, time deposits and highly liquidinvestments with original maturities of three months or less from the date of purchase and are stated at cost which approximates their fair value. The Group has nocash equivalents.Accounts receivable, net of allowanceAccounts receivable are recognized and carried at the original invoiced amount less an allowance for any potential uncollectible amounts. An estimate for doubtfuldebts is made when collection of the full amount is no longer probable. Bad debts are written off as incurred. The Group generally does not require collateral from itscustomers.The Group maintains allowances for doubtful accounts for estimated losses resulting from the failure of customers to make payments on time. The Group reviews theaccounts receivable on a periodic basis and makes specific allowances when there is doubt as to the collectability of individual balances. In evaluating thecollectability of individual receivable balances, the Group considers many factors, including the age of the balance, the customer’s payment history, its currentcreditworthiness and current economic trends.Property and equipment, netProperty and equipment are carried at cost less accumulated depreciation. Depreciation is calculated on a straightline basis over the following estimated usefullives:Wifi equipment– 3 yearsOffice equipment– 3 to 5 yearsVehicles– 5 yearsCosts of repairs and maintenance are expensed as incurred and asset improvements are capitalized. The gain or loss on disposal of property and equipment is thedifference between the net sales proceeds and the carrying amount of the relevant assets and is recognized in the consolidated income statement. When propertyand equipment are retired or otherwise disposed of, the cost and accumulated depreciation are removed from the accounts and any resulting gain or loss is includedin the results of operations for the respective period.Construction in progressAssets under construction are not depreciated until construction is completed and the assets are ready for their intended use.F12Intangible assetsIntangible assets with finite lives are amortized using the straightline method over the estimated economic lives.Intangible assets have weighted average economic lives from the date of purchase as follows:Software– 5 yearsTrademarks– 10 yearsGoodwillThe Group assesses goodwill for impairment in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”)subtopic 35020, Intangibles—Goodwill and Other: Goodwill (“ASC 35020”), which requires that goodwill to be tested for impairment at the reporting unit level atleast annually and more frequently upon the occurrence of certain events, as defined by ASC 35020.We have the option to assess qualitative factors first to determine whether it is necessary to perform the twostep test in accordance with ASC 35020. If we believe,as a result of the qualitative assessment, that it is morelikelythannot that the fair value of the reporting unit is less than its carrying amount, the twostepquantitative impairment test described below is required. Otherwise, no further testing is required. In the qualitative assessment, we consider primary factors such asindustry and market considerations, overall financial performance of the reporting unit, and other specific information related to the operations. In performing thetwostep quantitative impairment test, the first step compares the carrying amount of the reporting unit to the fair value of the reporting unit based on either quotedmarket prices of the ordinary shares or estimated fair value using a combination of the income approach and the market approach. If the fair value of the reportingunit exceeds the carrying value of the reporting unit, goodwill is not impaired and we are not required to perform further testing. If the carrying value of the reportingunit exceeds the fair value of the reporting unit, then we must perform the second step of the impairment test in order to determine the implied fair value of thereporting unit’s goodwill. The fair value of the reporting unit is allocated to its assets and liabilities in a manner similar to a purchase price allocation in order todetermine the implied fair value of the reporting unit goodwill. If the carrying amount of the goodwill is greater than its implied fair value, the excess is recognized asan impairment loss.In 2017, we performed a qualitative assessment for goodwill. Based on the requirements of ASC35020, we evaluated all relevant factors, including but not limited tomacroeconomic conditions, industry and market conditions, financial performance. We weighed all factors in their entirety and concluded that it was not morelikelythannot the fair value was less than the carrying amount of the reporting unit, and further impairment testing on goodwill was unnecessary as of December 31, 2017and 2016.F13Impairment or disposal of longlived assetsLonglived assets other than goodwill are included in impairment evaluations when events and circumstances exist that indicate the carrying value of these assetsmay not be recoverable. In accordance with FASB ASC 360, Property, Plant and Equipment, the Group assesses the recoverability of the carrying value of longlivedassets by first grouping its longlived assets with other assets and liabilities at the lowest level for which identifiable cash flows are largely independent of the cashflows of other assets and liabilities (the asset group) and, secondly, estimating the undiscounted future cash flows that are directly associated with and expected toarise from the use of and eventual disposition of such asset group. If the carrying value of the asset group exceeds the estimated undiscounted cash flows, theGroup recognizes an impairment loss to the extent the carrying value of the longlived asset exceeds its fair value. The Group determines fair value through quotedmarket prices in active markets or, if quotations of market prices are unavailable, through the performance of internal analysis using a discounted cash flowmethodology or obtains external appraisals from independent valuation firms. The undiscounted and discounted cash flow analyses are based on a number ofestimates and assumptions, including the expected period over which the asset will be utilized, projected future operating results of the asset group, discount rateand longterm growth rate.As of December 31, 2017 and 2016, the Group assessed the impairment of its longlived assets and concluded that there was no impairment indication.Business combinationWe account for business combinations using the purchase method of accounting in accordance with FASB ASC topic 805, Business combinations. The purchasemethod accounting requires that the consideration transferred be allocated to the assets, including separately identifiable assets and liabilities we acquired, basedon their estimated fair values. The consideration transferred in an acquisition is measured as the aggregate of the fair values at the date of exchange of the assetsgiven, liabilities incurred, and equity instruments issued as well as the contingent considerations and all contractual contingencies as of the acquisition date. Thecosts directly attributable to the acquisition are expensed as incurred. Identifiable assets, liabilities and contingent liabilities acquired or assumed are measuredseparately at their fair value as of the acquisition date, irrespective of the extent of any noncontrolling interests. The excess of (i) the total of cost of acquisition, fairvalue of the noncontrolling interests and acquisition date fair value of any previously held equity interest in the acquiree over (ii) the fair value of the identifiable netassets of the acquiree, is recorded as goodwill. If the cost of acquisition is less than the fair value of the net assets of the subsidiary acquired, the difference isrecognized directly in earnings.Revenue recognitionThe Group recognizes revenue in accordance with FASB ASC topic 605, Revenue Recognition (“ASC 605”). Revenue is recognized when the following four revenuerecognition criteria are met: (i) persuasive evidence of an arrangement exists, (ii) delivery has occurred or services have been provided, (iii) the selling price is fixed ordeterminable, and (iv) collectability is reasonably assured.F14Displaybased online advertising servicesThe Group provides displaybased online advertising services to customers by integrating text description, image and video, and displaying the advertisements in aprominent position of LuoKuang Application. The Group recognizes revenue in accordance with ASC 605, over the contractual term based on the agreements andconfirmation letters signed by both parties, commencing on the date the customer’s advertisement is displayed on the Group’s platform.Foreign currency translationThe functional and reporting currency of the Company and the Company’s subsidiaries domiciled in BVI and Hong Kong are the United States dollar (“U.S. dollar”).The financial records of the Company’s other subsidiaries and VIEs located in the PRC are maintained in their local currency, the Chinese Renminbi (“RMB”), whichare the functional currency of these entities.Monetary assets and liabilities denominated in currencies other than the functional currency are translated into the functional currency at the rates of exchangeruling at the balance sheet date. Transactions in currencies other than the functional currency during the year are converted into the functional currency at theapplicable rates of exchange prevailing when the transactions occurred. Transaction gains and losses are recognized in the statements of operations.The Company’s entities with a functional currency of RMB translate their operating results and financial position into the U.S. dollar, the Company’s reportingcurrency. Assets and liabilities are translated using the exchange rates in effect on the balance sheet date. Revenues, expenses, gains and losses are translatedusing the average rate for the year. Retained earnings and equity are translated using the historical rate. Translation adjustments are reported as cumulativetranslation adjustments and are shown as a separate component of other comprehensive income.Income taxesDeferred income taxes are recognized for temporary differences between the tax basis of assets and liabilities and their reported amounts in the financial statements,net operating loss carry forwards and credits, by applying enacted statutory tax rates applicable to future years. Deferred tax assets are reduced by a valuationallowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Current income taxesare provided for in accordance with the laws and regulations applicable to the Group as enacted by the relevant tax authorities.The impact of an uncertain income tax position on the income tax return must be recognized at the largest amount that is morelikelythan not to be sustained uponaudit by the relevant tax authorities. An uncertain income tax position will not be recognized if it has less than a 50% likelihood of being sustained. Additionally, theGroup classifies the interest and penalties, if any, as a component of the income tax expense. For years ended December 31, 2017 and 2016, the Group did not haveany material interest or penalties associated with tax positions nor did the Group have any significant unrecognized uncertain tax positions.F15Related partiesParties are considered to be related to the Company if the parties, directly or indirectly, through one or more intermediaries, control, are controlled by, or are undercommon control with the Company. Related parties also include principal owners of the Company, its management, members of the immediate families of principalowners of the Company and its management and other parties with which the Company may deal with if one party controls or can significantly influence themanagement or operating policies of the other to an extent that one of the transacting parties might be prevented from fully pursuing its own separate interests. TheCompany discloses all significant related party transactions.LeasesLeases have been classified as either capital or operating leases. Leases that transfer substantially all the benefits and risks incidental to the ownership of assets areaccounted for as if there was an acquisition of an asset and incurrence of an obligation at the inception of the lease. All other leases are accounted for as operatingleases wherein rental payments are expensed as incurred.When the Group is the lessor, minimum contractual rental from leases are recognized on a straightline basis over the noncancelable term of the lease. With respectto a particular lease, actual amounts billed in accordance with the lease during any given period may be higher or lower than the amount of rental revenue recognizedfor the period. Straightline rental revenue commences when the customer assumes control of the leased premises. Accrued straightline rents receivable representsthe amount by which straightline rental revenue exceeds rents currently billed in accordance with lease agreements. Contingent rental revenue is accrued when thecontingency is removed.Advertising costsAdvertising costs include expenses associated with direct marketing. All advertising costs are expensed as incurred and included in selling and marketing expenses.During the years ended December 31, 2017 and 2016, advertising costs amounted to $23,171,170 and $4,537,653, respectively.Comprehensive lossComprehensive loss includes net loss and foreign currency translation adjustments and is presented net of tax. The tax effect is nil for the two years endedDecember 31, 2017 and 2016 in the consolidated statements of comprehensive loss.Concentration of credit riskFinancial instruments that potentially expose the Group to concentrations of credit risk consist primarily of cash and accounts receivable. The Group places its cashwith financial institutions with highcredit rating and quality in China. For the year ended December 31, 2017, two customers accounted for over 10% of totalrevenue. For the year ended December 31, 2016, four customers accounted for over 10% of total revenue. At December 31, 2017 and 2016, the Group had credit riskexposure of uninured cash in banks of approximately $72,379 and $83,843, respectively.F16NOTE 3 – INCOME TAXAt December 31, 2017 and 2016, the Group had an unused net operating loss carryforwards of approximately $25,123,726 and $20,081,239, respectively, for income taxpurposes, which expires between 2018 to 2022 and between 2017 to 2021, respectively. At December 31, 2017 and 2016, these net operating losses carryforwards mayresult in future income tax benefits of approximately $5,043,944 and $4,008,863, respectively, however, because realization is uncertain at this time, a valuationallowance in the same amount has been established. Deferred income taxes reflect the net effects of temporary differences between the carrying amounts of assetsand liabilities for financial reporting purposes and the amounts used for income tax purposes.Significant components of the Group’s deferred tax liabilities and assets of December 31, 2017 and 2016 are as follows:December 31,December 31,20172016Deferred tax liabilities$$Deferred tax assetNet operating loss carryforward5,043,9444,008,863Valuation allowance(5,043,944)(4,008,863)Net deferred tax assetMovement of valuation allowanceDecember 31,2017December 31,2016At the beginning of the year$4,008,863$2,049,352Current year addition823,9702,159,518Expired(61,411)Exchange difference272,522(200,007)At the end of the year5,043,9444,008,863The Company is not subject to taxation in BVI under the current BVI law. Subsidiaries operating in the PRC are subject to PRC Enterprise Income Tax at the statutoryrate of 25% for the years ended December 31, 2017 and 2016. Subsidiaries operating in Hong Kong are subject to Hong Kong income taxes at a rate of 16.5% for theyears ended December 31, 2017 and 2016.F17A reconciliation of the income tax expense to the amount computed by applying the current statutory tax rate to the loss before income taxes in the consolidatedstatements of comprehensive income is as follows:December 31,December 31,20172016Loss before income taxes$(6,810,454)$(13,049,031)Tax loss at statutory tax rate(1,655,174)(3,386,822)Nondeductible items6,729,2551,712,857Nontaxable items(3,789,956)(674,189)Change in valuation allowance823,9702,159,518Tax benefits(2,108,095)188,636Income tax expensesNOTE 4 – ACCOUNTS RECEIVABLEAt December 31, 2017 and 2016, accounts receivable consisted of the following:December 31,December 31,20172016Accounts receivable$10,406,602$2,098,946Less: allowance for doubtful accounts676,977233,110$9,729,625$1,865,836NOTE 5 – OTHER RECEIVABLESAt December 31, 2017 and 2016, other receivables consisted of the following:December 31,2017December 31,2016Advances to suppliers$339,701$181,472VAT recoverable (1)3,033,0651,662,805Other5,048,189485,152$2,376,745$2,287,934(1)The balance of advanced VAT represents input VAT available for deducting the amount of VAT paid in the future. During the years ended December 31, 2017and 2016, the Group purchased a large amount of WiFi equipment for deployments, which generated related input VAT approved by tax authority.F18NOTE 6 – AMOUNTS DUE FROM RELATEDPARTIESAt December 31, 2017 and 2016, amounts due from related parties consisted of the following:Name of related partyDecember 31,2017December 31,2016C Media Limited (1)$11,760,692$Ya Tuo Ji International Consultancy (Beijing) Limited (2)204,412183,811(1)C Media Limited is the parent company of LK Technology. The Group expects the amounts due from the related party will be returned to the Group within oneyear.(2)Ya Tuo Ji is a company controlled by the spouse of a major shareholder of C Media Limited. The loan is unsecured, interestfree and repayable on January 5,2019.NOTE 7 – PROPERTY AND EQUIPMENTAt December 31, 2017 and 2016, property and equipment consisted of the following:December 31,December 31,Useful life20172016WiFi equipment3 Years$8,711,424$8,367,678Vehicles5 Years43,246Office and other equipment3 – 5 Years170,242416,434Constructioninprogress2,166,4522,652,28811,048,11811,479,646Less: accumulated depreciation(6,003,246)(3,708,619)$5,044,872$7,771,027For the years ended December 31, 2017 and 2016, depreciation expense amounted to $2,628,884 and $2,474,434, respectively, of which $2,423,655 and $2,194,582,respectively, was included in cost of revenue, $117,648 and $121,740, respectively, was included in selling and marketing expenses and the remainder was included ingeneral and administrative expense.Included in constructioninprogress are WiFI equipment under construction.F19NOTE 8 – GOODWILLIn September of 2014, Zhong Chuan Shi Xun acquired a 100% interest in Zhong Chuan Rui You for a consideration of $7,391,894 (RMB48,000,000). Zhong Chuan RuiYou is primarily engaged in on train WiFi business, deploying WiFi equipment on trains and providing passengers with entertainment and information services ontrains. The book value of the identifiable net assets of Zhong Chuan Rui You was $151,958 (RMB963,000) and a goodwill of $7,239,936 was recorded.NOTE 9 – ACCRUED LIABILITIES AND OTHER PAYABLESAt December 31, 2017 and 2016, accrued liabilities and other payables consisted of the following:December 31,December 31,20172016Deferred revenue$2,326,406$302,735Accrued payroll143,998316,458Other taxes payable3,544,469461,699Other payable852,384686,526Other loans6,095,6559,562,915$12,962,912$11,329,613Deferred revenue represents prepayments from customers for advertising service and is recognized as revenue when the advertising services are rendered.Other loans of $939,555 and $57,416, respectively, as of December 31, 2017 and 2016, are unsecured, bear daily interest at 0.04% and are repayable on demand.NOTE 10 – AMOUNTS DUE TO RELATED PARTIESAt December 31, 2017 and 2016, amounts due to related parties consisted of the following:December 31,December 31,Name of related party20172016Mr. Song Xuesong (“Mr. Song”) (1)$2,921,639$10,669,325C Media Limited (2)$$4,855,236Thumb Beijing Branch (3)$612,103$576,560Thumb Shenzhen Branch (3)$29,941$28,202(1) The Group’s CEO(2) C Media Limited, the parent company.(3) Thumb Beijing and Shenzhen Branch are controlled by the spouse of Mr. Song.Amounts due to related parties are shortterm in nature, noninterest bearing, unsecured and payable on demand.F20NOTE 11 – RETIREMENT AND WELFARE BENEFITSThe Group’s fulltime employees are entitled to staff welfare benefits including medical care, casualty, housing benefits, education benefits, unemployment insuranceand pension benefits through a PRC governmentmandated multiemployer defined contribution plan. The Group is required to accrue the employerportion forthese benefits based on certain percentages of the employees’ salaries. The total provision for such employee benefits of $170,227 and $353,033 during the yearsended December 31, 2017 and 2016, respectively, of which $23,392 and $30,455, respectively, was charged to cost of revenue, $48,957 and $97,408, respectively wascharged to selling and marketing expenses, $49,717 and $86,934, respectively, was charged to general and administrative expenses and $48,161 and $138,236,respectively was charged to research and development expenses. The Group is required to make contributions to the plan out of the amounts accrued for all staffwelfare benefits except for education benefits. The PRC government is responsible for the staff welfare benefits including medical care, casualty, housing benefits,unemployment insurance and pension benefits to be paid to these employees.NOTE 12 – STATUTORY RESERVESAs stipulated by the relevant law and regulations in the PRC, the Group’s subsidiaries and VIEs in the PRC are required to maintain a nondistributable statutorysurplus reserve. Appropriations to the statutory surplus reserve are required to be made at not less than 10% of profit after taxes as reported in the subsidiaries’statutory financial statements prepared under the PRC GAAP. Once appropriated, these amounts are not available for future distribution to owners or shareholders.Once the general reserve is accumulated to 50% of the subsidiaries’ registered capital, the subsidiaries can choose not to provide more reserves. The statutoryreserve may be applied against prior year losses, if any, and may be used for general business expansion and production and increase in registered capital of thesubsidiaries. The Group allocated $Nil to statutory reserves during the years ended December 31, 2017 and 2016, respectively. The statutory reserves cannot betransferred to the Company in the form of loans or advances and are not distributable as cash dividends except in the event of liquidation.NOTE 13 – COMMITMENTS AND CONTINGENCIESOperating leasesWe have entered into operating lease agreements primarily for our office spaces in China. These leases expire through 2018 and are renewable upon negotiation.Future minimum rental payment required under the Office Lease is as follows:Year ending December 31:Amount2018$122,138F21Contingencies(a) Litigation with Shanghai Fusheng Weier Intelligent Control Technology Co., Ltd.On January 22, 2016, Zhong Chuan Rui You and Shanghai Fusheng Weier Intelligent Control Technology Co., Ltd. (“Fusheng Weier”) signed a contract forequipment of $1,652,842 (RMB10,800,000). Since Zhong Chuan Rui You did not make the payments of $1,126,381 (RMB7,360,000) on the due dates, Fusheng Weierfiled a lawsuit against Zhong Chuan Rui You in Shanghai Xuhui District People’s Court on October 8, 2016. On March 9, 2017, Xuhui District People’s Court issuedthe verdict requiring Zhong Chuan Rui You to pay the overdue debts. In August 2017, C Media Limited made the payment of $512,075 (RMB3,346,000). Theremaining balance has been accrued in accounts payable. The payment schedule for the remaining balance is being negotiated by the two parties. On February 5,2018, a hearing was held adding Zhong Chuan Shi Xun as a defendant. The Group plans to settle the remaining balance within one year.(b) Lawsuit with Gansu Jinlun Culture Media Co., Ltd.On August 22, 2014, Zhong Chuan Rui You and Gansu Jinlun Culture Media Co., Ltd. (“Gansu Jinlun”) signed a “Lanzhou Railway Bureau Airconditioned Train WiFi Network System Advertising Operation Rights Agreement” for advertising on 72 trains of $1,467,880 (RMB9,604,633). Due to the dispute on the projectimplementation, Zhong Chuan Rui You did not pay the advertising fee. On August 23, 2017, Gansu Jinlun filed a lawsuit with Gansu Intermediate People’s Court. OnDecember 19, 2017, Gansu Intermediate People’s Court issued a verdict, ruling that Zhong Chuan Rui You settle the overdue advertising fee. Since only 18 out of 72trains have been installed with Wifi network system, Zhong Chuan Rui You disputed and appealed to the verdict. The next court trial date has not yet beendetermined.C Media and Gansu Jinlun are negotiating a potential settlement to resume the contract. According to the legal counsel, it is probable that the settlement will amountto approximately $459,000 (RMB3,000,000); therefore, this amount has been accrued in accounts payable.(c) Litigation with Shenzhen Hua Xun Fang Zhou Technology Co., Ltd.On June 16, 2015, Zhong Chuan Rui You signed a cooperation agreement with Shenzhen Hua Xun Fang Zhou Technology Co., Ltd. (“Shenzhen Hua Xun”) andXuesong Song, a major shareholder of C Media Limited. Pursuant to this agreement, Zhong Chuan Rui You procures equipment from Shenzhen Hua Xun. XuesongSong acts as a joint liability guarantor for the entire debts of Zhong Chuan Rui You under this agreement. As Zhong Chuan Rui You did not make the payments onthe due dates, Shenzhen Hua Xun filed a lawsuit with Shenzhen Baoan District People’s Court on May 31, 2016. On November 1, 2016, Zhong Chuan Rui You,Xuesong Song and Shenzhen Hua Xun reached a settlement in Shenzhen Baoan District People’s Court to settle $1,735,389 (RMB11,355,000) in four instalments. OnDecember 30, 2017, the debt was assigned to C Media Limited.NOTE 14 – SUBSEQUENT EVENTThe Group has evaluated all events or transactions that occurred after December 31, 2017 through May 25, 2018, which is the date that the financial statements wereavailable to be issued.F22EX1.1 2 f20f2017ex11_luokung.htm AMENDED AND RESTATED MEMORANDUM OF ASSOCIATION AND ARTICLES OF ASSOCIATION OF LUOKUNGTECHNOLOGY CORP., DATED AUGUST 20, 2018, AND AS CURRENTLY IN EFFECTExhibit 1.1BC NO: 1553620British Virgin IslandsThe BVI Business Companies Act, 2004(No. 16 of 2004)Memorandum of AssociationandArticles of AssociationofLuokung Technology Corp.Incorporated the 24th day of October, 2009Amended and Restated the 11th Day of December 2009Amended and Restated the 17th Day of December 2009Amended and Restated the 25th Day of March 2010Amended and Restated the 21st day of May 2018Amended and restated the 17 August 2018Amended and restated the 21 August 2018Portcullis (BVI) LimitedPortcullis Chambers4th Floor Ellen Skelton Building3076 Sir Francis Drake HighwayRoad Town, TortolaBritish Virgin IslandsTERRITORY OF THE BRITISH VIRGIN ISLANDSTHE BVI BUSINESS COMPANIES ACT, 2004(No. 16 of 2004)MEMORANDUM OF ASSOCIATIONOFLuokung Technology Corp.NAME1.The name of the Company is Luokung Technology Corp.TYPE OF COMPANY2.The Company is a company limited by shares.REGISTERED OFFICE3.The first Registered Office of the Company is the offices of Portcullis TrustNet (BVI) Limited, Portcullis TrustNet Chambers, P.O. Box 3444, Road Town,Tortola, British Virgin Islands, the office of the registered agent.3.1The current Registered Office of the Company is Portcullis Chambers, 4th Floor Ellen Skelton Building, 3076 SirFrancis Drake Highway, Road Town,Tortola, British Virgin Islands VG1110.REGISTERED AGENT4.The first Registered Agent of the Company is Portcullis TrustNet (BVI) Limited of Portcullis TrustNet Chambers, P.O. Box 3444, Road Town, Tortola,British Virgin Islands.4.1The current Registered Agent of the Company is Portcullis (BVI) Ltd of Portcullis Chambers, 4th Floor Ellen Skelton Building, 3076 Sir Francis DrakeHighway, Road Town, Tortola, British Virgin Islands VG1110.AUTHORISED NUMBER OF SHARES5.The Company is authorised to issue a maximum of 251,000,000 shares.CLASSES, NUMBER AND PAR VALUE OF SHARES6.As at the date of adoption of this memorandum, the Company is authorised to issue (a) 250,000,000 ordinary shares without par value (“OrdinaryShares”); and (b) 1,000,000 preferred shares without par value (“Preferred Shares”).FRACTIONAL SHARES7.The Company may issue fractions of a share and a fractional share shall have the same corresponding fractional liabilities, limitations, preferences,privileges, qualifications, restrictions, rights and other attributes of a whole share of the same class or series of shares.RIGHTS, PRIVILEGES, RESTRICTIONS AND CONDITIONS ATTACHING TO SHARES8.(1)Subject to the memorandum and articles of association (and, for greater clarity, without prejudice to any special rights conferred thereby on theholders of any other shares), an Ordinary Share of the Company confers on the holder;(a)the right to one vote at a meeting of the members of the Company or on any Resolution of Members;(b)the right to an equal share in any Distribution paid by the Company; and(c)the right to an equal share in the distribution of the surplus assets of the Company on a winding up.(2)Subject to the memorandum and articles of association (and, for greater clarity, without prejudice to any special rights conferred thereby on theholders of any other shares), a Preferred Share of the Company confers on the holder;(a)the right to 399 votes at a meeting of the members of the Company or on any Resolution of Members;(b)the right to an equal share in any Distribution paid by the Company;(c)the right to an equal share in the distribution of the surplus assets of the Company on its liquidation.(d)be freely transferable, in whole or in part, by Mr. Xuesong Song to any third party through one or more Private Transactions, subject toApplicable Law; and(e)be freely transferable, in whole or in part, by Mr. Xuesong Song to any third party through one or more Public Transactions, subject to ApplicableLaw and Automatic Conversion of such Preferred Share(s) into Ordinary Share(s).(3)The directors may at their discretion by resolution of directors redeem, purchase or otherwise acquire all or any of the shares in the Companysubject to the Articles..VARIATION OF CLASS RIGHTS9.If at any time the issued shares are divided into different classes or series of shares, the rights attached to any class or series (unless otherwise providedby the terms of issue of the shares of that class or series) may, whether or not the Company is being wound up, be varied with the consent in writing of theholders of not less than threefourths of the issued shares of that class or series and of the holders of not less than threefourths of the issued shares ofany other class or series of shares which may be affected by such variation.RIGHTS NOT VARIED BY THE ISSUE OF SHARES PARI PASSU10.The rights conferred upon the holders of the shares of any class issued with preferred or other rights shall not, unless otherwise expressly provided by theterms of issue of the shares of that class, be deemed to be varied by the creation or issue of further shares ranking pari passu therewith.CAPACITY AND POWERS11.Subject to the Act, any other British Virgin Islands legislation and paragraph 12 below the Company has, irrespective of corporate benefit:(a)full capacity to carry on or undertake any business or activity, do any act or enter into any transaction;(b)for the purposes of paragraph (a), full rights, powers and privileges; and(c)full powers to issue shares with preemptive rights, subject to the Articles.2LIMITATIONS ON THE COMPANY’S BUSINESS12.For the purposes of section 9(4) of the Act the Company may not;(a)carry on banking or trust business, unless it is licensed to do so under the Banks and Trust Companies Act, 1990;(b)carry on business as an insurance or reinsurance company, insurance agent or insurance broker, unless it is licensed under the Insurance Act1994;(c)carry on business of company management, unless it is licensed under the Company Management Act, 1990;(d)carry on the business of providing the registered office or the registered agent for companies incorporated in the British Virgin Islands;(e)carry on the business as a mutual fund, manager of mutual funds or administrator of mutual funds unless it is recognized or licenced as the casemay be under the Mutual Funds Act 1996; or(f)carry on any other business that gives rise to a licencing requirement under any law for the time being in force in the British Virgin Islands unlessit is licenced, regulated, recognised or otherwise approved pursuant to such law.REGISTERED SHARES AND PROHIBITION ON ISSUE OF BEARER SHARES13.Shares in the Company may only be issued as registered shares. The issue of shares to bearer is prohibited.PROHIBITION ON EXCHANGE AND CONVERSION OF REGISTERED SHARES TO BEARER SHARES14.The exchange or conversion of registered shares to bearer shares is prohibited.TRANSFER OF REGISTERED SHARES15.Subject to the provisions of the Articles the Company may upon receipt of an instrument of transfer enter the name of the transferee in the register ofmembers subject to the prior or simultaneous approval of the Company as evidenced by a resolution of directors or by a resolution of members. Subject toany resolution of the members to the contrary, the directors may resolve by resolution of directors to refuse or delay the registration of the transfer forreasons that shall be specified in the resolution of directors.AMENDMENT OF MEMORANDUM AND ARTICLES OF ASSOCIATION16.1The Company may amend its Memorandum or Articles by a resolution of members or by a resolution of directors provided that the directors shall not havethe power to amend the Memorandum or Articles;(a)to restrict the rights or powers of the members to amend the Memorandum or Articles;(b)to change the percentage of members required to pass a resolution to amend the Memorandum or Articles;(c)in circumstances where the Memorandum or Articles cannot be amended by the members; or(d)to Clauses 8, 9, 10 or this Clause 12.16.2No amendment may be made to Regulation 76 of the Articles unless approved by an affirmative vote of the holders of 66 2/3 percent or more of theoutstanding votes of the shares entitled to vote thereon.3DEFINITIONS17.The meanings of words in this Memorandum are as defined in the Articles.We, Portcullis TrustNet (BVI) Limited of Portcullis TrustNet Chambers, P.O. Box 3444, Road Town, Tortola, British Virgin Islands for the purpose ofincorporating a BVI Business Company under the laws of the British Virgin Islands hereby sign this Memorandum of Association the 27th day of October,2009.Incorporator/s/ Nicole WheatleyPortcullis TrustNet (BVI) LimitedPortcullis TrustNet ChambersP.O. Box 3444Road Town, TortolaBritish Virgin Islands(Sgd. Nicole Wheatley)4TERRITORY OF THE BRITISH VIRGIN ISLANDSTHE BVI BUSINESS COMPANIES ACT, 2004(No. 16 of 2004)ARTICLES OF ASSOCIATIONOFLuokung Technology Corp.PRELIMINARY1.In these Articles, if not inconsistent with the subject or context, the words and expressions standing in the first column of the following table shall bear themeanings set opposite them respectively in the second column thereof.WordsMeaningApplicable Lawall Laws, including those of a jurisdiction in or outside of the United States, applicable to the Private orPublic Transactions.Actthe BVI Business Companies Act, 2004 (No 16 of 2004.) including any modification, extension, reenactment or renewal thereof and any regulations made thereunder.Articlesthese Articles of Association as originally framed or as from time to time amended.Automatic Conversioneach Preferred Share shall be automatically converted at any time after issue and without the payment ofany additional sum into an equal number of fully paid Ordinary Shares upon the conclusion of anytransfer by Mr. Xuesong Song to any third party through one or more Public Transactions.Designated Stock Exchangeeither the Nasdaq National Stock Market, Inc. or such other exchange or quotation bureau on which, theCompany’s Securities are listed or traded; provided that until the Securities are listed on any such“Exchange” the rules of any such Designated Stock Exchange shall be inapplicable to these Articles.directora director of the Company.distributionin relation to a distribution by a company to a member, means(i)the direct or indirect transfer of an asset, other than the Company’s own shares, to or forthe benefit of the member or(ii)the incurring of a debt to or for the benefit of a member,in relation to shares held by a member, and whether by means of a purchase of an asset, the purchase,redemption or other acquisition of shares, a transfer of indebtedness or otherwise, and includes adividend.Independent Directora person who meets the then current requirements for “independence” of the applicable rules andregulations of the U.S. Securities and Exchange Commission and the Designated Stock Exchange.5member or shareholderin relation to the Company, means a person whose name is entered in the register of members as theholder of one or more shares, or fractional shares, in the Company.Memorandumthe Memorandum of Association of the Company as originally framed or as from time to time amended.Mr. Xuesong Songthe founder, a director and Chairman of LK Technology Ltd.Ordinary Sharesissued or unissued ordinary shares of no par value of the Company having the rights, preferences andprivileges set out in the MemorandumPersonAn individual, a corporation, a trust, trustee, the estate of a deceased individual, a partnership or anunincorporated association of persons.Preferred Sharesissued or unissued preferred shares of no par value of the Company having the rights, preferences andprivileges set out in the MemorandumPrivate Transactionstransactions that are not considered as a Public Transaction.Public Transactionstransactions through any national securities exchanges and/or through the automated quotation systemincluding but not limited to NASDAQ, NYSE (including NYSE American) or OTC Markets, or anytransaction executed by the broker or with a market maker.Related Party(a) any director, officer and employee of the Company; (b) any family member of such director, officer andemployee; and (c) any entity (e.g. a corporation, partnership, or trust) controlled by or set up for thebenefit of a director, officer or employee, or a family member of such director, officer or employee.Relevant SystemA facility for the electronic transfer of uncertificated securities administered by The Depository TrustCompany or such other Person regulated by the SEC.resolution of directors(a)A resolution approved at a duly convened and constituted meeting of directors of the Companyor of a committee of directors of the Company by the affirmative vote of a simple majority of thedirectors present at the meeting who voted and did not abstain; or(b)a resolution consented to in writing by a simple majority of the directors or of all members of thecommittee, as the case may be;except that where a director is given more than one vote, he shall be counted by the number ofvotes he casts for the purpose of establishing a majority.resolution of membersSubject to the provisions of the Memorandum and Articles means:(a)A resolution approved at a duly convened and constituted meeting of the members of theCompany by the affirmative vote of(i)a majority of in excess of 50% of the votes of the shares entitled to vote and voting onthe resolution, or(ii)a majority of in excess of 50% of the votes of each class or series of shares entitled tovote as a class or series and voting on the resolution and a majority of in excess of 50%of the votes of the remaining shares entitled to vote and voting on the resolution; or6(b)a resolution consented to in writing by(i)an absolute majority of the votes of shares entitled to vote thereon, or(ii)an absolute majority of the votes of each class or series of shares entitled to votethereon as a class or series and of an absolute majority of the votes of the remainingshares entitled to vote thereon.SealAny Seal which has been duly adopted as the common seal of the Company.SECThe United States Securities and Exchange Commission.Securitiesshares and debt obligations of every kind, and options, warrants and rights to acquire shares, or debtobligations.SharesOrdinary Shares and/or Preferred Shares, as the case may be.solvency testa company satisfies the solvency test if;(i)the value of the company’s assets exceeds its liabilities, and(ii)the company is able to pay its debts as they fall due.treasury sharesshares in the Company that were previously issued but were repurchased, redeemed or otherwiseacquired by the Company and not cancelled.2.“Written” or any term of like import includes words typewritten, printed, painted, engraved, lithographed, photographed or represented or reproduced byany mode of reproducing words in a visible form, including telex, facsimile, telegram, cable or other form of writing produced by electronic communication.3.Save as aforesaid any words or expressions defined in the Act shall bear the same meaning in these Articles.4.Whenever the singular or plural number, or the masculine, feminine or neuter gender is used in these Articles, it shall equally, where the context admits,include the others.5.A reference in these Articles to voting in relation to shares shall be construed as a reference to voting by members holding the shares except that it is thevotes allocated to the shares that shall be counted and not the number of members who actually voted and a reference to shares being present at a meetingshall be given a corresponding construction.6.A reference to money in these Articles is, unless otherwise stated, a reference to the currency in which shares in the Company shall be issued according tothe provisions of the Memorandum.7REGISTERED SHARES7.Every member holding registered shares in the Company shall be entitled to a certificate signed by a director or officer of the Company or such otherperson who may be authorised from time to time by resolution of directors or under the Seal, with or without the signature of any director of the Company,specifying the share or shares held by him and the signature of the director or officer or person so authorised and the Seal may be facsimiles.8.Any member receiving a share certificate for registered shares shall indemnify and hold the Company and its directors and officers harmless from any lossor liability which it or they may incur by reason of any wrongful or fraudulent use or representation made by any person by virtue of the possessionthereof. If a share certificate for registered shares is worn out or lost it may be renewed on production of the worn out certificate or on satisfactory proof ofits loss together with such indemnity as may be required by a resolution of directors.9.If several persons are registered as joint holders of any shares, any one of such persons may give an effectual receipt for any distribution payable inrespect of such shares.10.Nothing in these Articles shall require title to any shares or other Securities to be evidenced by a certificate if the Act and the rules of the Designated StockExchange permit otherwise.SHARES AND ISSUED SHARES11.Subject to the provisions of these Articles and, if applicable, the rules of the Designated Stock Exchange, and any resolution of members, the directors ofthe Company may, without limiting or affecting any rights previously conferred on the holders of any existing shares or class or series of shares, offer, allot,grant options over or otherwise dispose of shares to such persons, at such times and upon such terms and conditions as the Company may by resolutionof directors determine. The directors shall not issue more shares than the maximum number provided for in the Memorandum.12.The Company may issue fully paid, partly paid or nil paid shares as well as bonus shares. A partly paid or nil paid share or a share issued for a promissorynote or other written obligation for payment of a debt may be issued subject to forfeiture in the manner prescribed in these Articles.13.Shares in the Company may be issued for consideration in any form, including money, a promissory note or other obligation to contribute money orproperty, real property, personal property (including goodwill and knowhow) services rendered or a contract for future services and the amount of suchconsideration shall be determined by resolution of directors, except that in the case of shares with par value, the amount shall not be less than the parvalue, and in the absence of fraud the decision of the directors as to the value of the consideration received by the Company in respect of the issue isconclusive unless a question of law is involved.14.Before issuing shares for a consideration other than money, the directors shall pass a resolution stating;(a)the amount to be credited for the issue of the shares;(b)their determination of the reasonable present cash value of the nonmoney consideration for the issue; and(c)that, in their opinion, the present cash value of the nonmoney consideration for the issue is not less than the amount to be credited for the issueof the shares.15.A share issued by the Company upon conversion of, or in exchange for, another share or a debt obligation or other security in the Company, shall betreated for all purposes as having been issued for money equal to the consideration received or deemed to have been received by the Company in respectof the other share, debt obligation or security.16.Treasury shares may be disposed of by the Company on such terms and conditions (not otherwise inconsistent with these Articles) as the Company mayby resolution of directors determine.17.Subject to these Articles, the Company may purchase, redeem or otherwise acquire and hold its own shares save that the Company may not purchase,redeem or otherwise acquire its own shares without the consent of the member whose shares are to be purchased, redeemed or otherwise acquired unlessthe Company is permitted by the Act or any other provision in the Memorandum or Articles to purchase, redeem or otherwise acquire the shares withouttheir consent.818.No purchase, redemption or other acquisition of shares shall be made unless the directors determine by resolution of the directors that immediately after thepurchase, redemption or other acquisition the value of the Company’s assets will exceed its liabilities and the Company will be able to pay its debts as theyfall due.19.Sections 60 (Process for acquisition of own shares), 61 (Offer to one or more shareholders) and 62 (Shares redeemed otherwise than at the option ofcompany) of the Act shall not apply to the Company.20.A determination by the directors under Article 18 is not required;(a)the Company redeems a share or shares pursuant to a right of a member to have his shares redeemed or to have his shares exchanged for moneyor other property of the Company; or(b)by virtue of the provisions of Section 179 of the Act.21.Shares that the Company purchases, redeems or otherwise acquires pursuant to Article 17 may be cancelled or held as treasury shares except to the extentthat such shares are in excess of 80 percent of the issued shares of the Company in which case they shall be cancelled but they shall be available forreissue.22.Shares in the Company shall only be held as treasury shares where the directors of the Company resolve as such and the number of shares acquired, whenaggregated with shares of the same class already held by the Company as treasury shares, does not exceed 50% of the shares of that class previouslyissued by the Company, excluding shares that have been cancelled. All rights and obligations attaching to a treasury share are suspended and shall not beexercised by or against the Company while it holds the share as a treasury share. Treasury shares may be reissued by the Company as new shares.23.The Company shall keep a register of members containing;(a)the names and addresses of the persons who hold registered shares in the Company;(b)the number of each class and series of registered shares held by each member;(c)the date on which the name of each member was entered in the register of members;(d)the date on which any person ceased to be a member; and(e)such other information as may be prescribed pursuant to the Act.24.The register of members may be in any such form as the directors may approve but if it is in magnetic, electronic or other data storage form, the companymust be able to produce legible evidence of its contents.25.The original or a copy of the register of members shall be kept at the registered office of the Company or at the office of the registered agent of theCompany.26.A share is deemed to be issued when the name of the member is entered in the register of members.27.Subject to the Act and the rules of the Designated Stock Exchange, the board of directors without further consultation with the holders of any shares orSecurities may resolve that any class or series of shares or other Securities from time to time in issue or to be issued (including shares in issue at the date ofthe adoption of these Articles) may be issued, held, registered and converted to uncertificated form.28.Conversion of shares held in certificated form into shares held in uncertificated form, and vice versa, may be made in such manner as the board of directors,in its absolute discretion, may think fit. The Company or any duly authorised transfer agent (a “Transfer Agent”) shall enter on the register of membershow many shares are held by each member in uncertificated form and in certificated form and shall maintain the register of members. Notwithstanding anyprovision of these Articles, a class or series of shares shall not be treated as two classes by virtue only of that class or series comprising both certificatedshares and uncertificated Shares or as a result of any provision of these Articles which apply only in respect of certificated or uncertificated shares.9MORTGAGES AND CHARGES OF REGISTERED SHARES29.Members may mortgage or charge their registered shares in the Company with such mortgage or charge being evidenced in writing and signed by, or withthe authority of the registered holder of a registered share to which the mortgage or charge relates. The Company shall give effect to the terms of any validmortgage or charge except insofar as it may conflict with any requirements herein contained for consent to the transfer of shares.30.In the case of the mortgage or charge of registered shares there may be entered in the share register of the Company at the request of the registered holderof such shares(a)a statement that the shares are mortgaged or charged;(b)the name of the mortgagee or chargee; and(c)the date on which the aforesaid particulars are entered in the share register.31.Where particulars of a mortgage or charge are entered in the register of members, such particulars shall be cancelled(a)with the written consent of the named mortgagee or chargee or anyone authorized to act on his behalf; or(b)upon evidence satisfactory to the directors of the discharge of the liability secured by the mortgage or charge and the issue of such indemnities asthe directors shall consider necessary or desirable.32.Whilst particulars of a mortgage or charge over registered shares are entered in the register of members pursuant to the preceding articles no transfer ofany share comprised therein shall be effected without the written consent of the named mortgagee or chargee or anyone authorized to act on his behalf.FORFEITURE33.When shares not fully paid on issue or issued for a promissory note or other written obligation for payment of a debt have been issued subject toforfeiture, the following provisions shall apply.34.Written notice specifying a date for payment to be made and the shares in respect of which payment is to be made shall be served on the member whodefaults in making payment pursuant to a promissory note or other written obligations to pay a debt.35.The written notice specifying a date for payment shall(a)name a further date not earlier than the expiration of 14 days from the date of service of the notice on or before which payment required by thenotice is to be made; and(b)contain a statement that in the event of nonpayment at or before the time named in the notice the shares, or any of them, in respect of whichpayment is not made will be liable to be forfeited.36.Where a written notice has been issued and the requirements of the notice have not been complied with within the prescribed time, the directors may at anytime before tender of payment forfeit and cancel the shares to which the notice relates.37.The Company is under no obligation to refund any moneys to the member whose shares have been forfeited and cancelled pursuant to these provisions.Upon forfeiture and cancellation of the shares the member is discharged from any further obligation to the Company with respect to the shares forfeitedand cancelled.10LIEN38.The Company shall have a first and paramount lien on every share issued for a promissory note or for any other binding obligation to contribute money orproperty or any combination thereof to the Company, and the Company shall also have a first and paramount lien on every share standing registered in thename of a member, whether singly or jointly with any other person or persons, for all the debts and liabilities of such member or his estate to the Company,whether the same shall have been incurred before or after notice to the Company of any interest of any person other than such member, and whether thetime for the payment or discharge of the same shall have actually arrived or not, and notwithstanding that the same are joint debts or liabilities of suchmember or his estate and any other person, whether a member of the Company or not. The Company’s lien on a share shall extend to all distributionspayable thereon. The directors may at any time either generally, or in any particular case, waive any lien that has arisen or declare any share to be wholly orin part exempt from the provisions of this Article.39.In the absence of express provisions regarding sale in the promissory note or other binding obligation to contribute money or property, the Company maysell, in such manner as the directors may by resolution of directors determine, any share on which the Company has a lien, but no sale shall be made unlesssome sum in respect of which the lien exists is presently payable nor until the expiration of twentyone days after a notice in writing, stating and demandingpayment of the sum presently payable and giving notice of the intention to sell in default of such payment, has been served on the holder for the timebeing of the share.40.The net proceeds of the sale by the Company of any shares on which it has a lien shall be applied in or towards payment of discharge of the promissorynote or other binding obligation to contribute money or property or any combination thereof in respect of which the lien exists so far as the same ispresently payable and any residue shall (subject to a like lien for debts or liabilities not presently payable as existed upon the share prior to the sale) bepaid to the holder of the share immediately before such sale. For giving effect to any such sale the directors may authorize some person to transfer theshare sold to the purchaser thereof. The purchaser shall be registered as the holder of the share and he shall not be bound to see to the application of thepurchase money, nor shall his title to the share be affected by any irregularity or invalidity in the proceedings in reference to the sale.TRANSFER OF SHARES41.Registered shares in the Company are transferred by a written instrument of transfer signed by the transferor and containing the name and address of thetransferee. The instrument of transfer shall be signed by the transferee if registration as a holder of the share shall impose a liability to the Company on thetransferee. The instrument of transfer of a registered share shall be sent to the Company for registration.42.The board of directors may resolve that interests in shares in the form of depositary receipts may be transferred or otherwise dealt with in accordance withthe regulations and practices instituted by the operator of the Relevant System and any holder of interests in shares shall be entitled to transfer suchinterests by means of such Relevant System and the operator of the Relevant System shall act as agent of the holders of such interests for the purposes ofthe transfer of those interests.43.The register of members may be closed at such times and for such periods as the board of directors may from time to time determine, upon notice beinggiven by advertisement in such newspapers as may be required by the Act and the practice of the Designated Stock Exchange.44.The transfer of a registered share is effective when the name of the transferee is entered on the register of members.45.If the directors of the Company are satisfied that an instrument of transfer relating to shares has been signed but that the instrument has been lost ordestroyed, they may resolve;(a)to accept such evidence of the transfer of the shares as they consider appropriate; and(b)that the transferee’s name should be entered in the register of members notwithstanding the absence of the instrument of transfer.46.The Company must on the receipt of an instrument of transfer from the transferor or transferee of a registered share in the Company enter the name of thetransferee of the share in the register or members unless the directors, if permitted by the Memorandum or these Articles, resolve by resolution of directorsto refuse or delay the registration of the transfer for reasons that shall be specified in the resolution of directors.11TRANSMISSION OF SHARES47.The personal representative of a deceased member may transfer a share even though the personal representative is not a member at the time of the transfer.48.The personal representative, executor or administrator of a deceased member, the guardian of an incompetent member or the trustee of a bankrupt membershall be the only person recognized by the Company as having any title to his share but they shall not be entitled to exercise any rights as a member of theCompany until they have proceeded as set forth in the next following three Articles.49.The production to the Company of any document which is evidence of probate of the will, or letters of administration of the estate, or confirmation asexecutor, of a deceased member or of the appointment of a guardian of an incompetent member or the trustee of a bankrupt member shall be accepted by theCompany even if the deceased, incompetent or bankrupt member is domiciled outside the British Virgin Islands if the document evidencing the grant ofprobate or letters of administration, confirmation as executor, appointment as guardian or trustee in bankruptcy is issued by a foreign court which hadcompetent jurisdiction in the matter. For the purpose of establishing whether or not a foreign court had competent jurisdiction in such a matter the directorsmay obtain appropriate legal advice. The directors may also require an indemnity to be given by the executor, administrator, guardian or trustee inbankruptcy.50.The Company may enter in the register of members the name of any person becoming entitled by operation of law or otherwise to a share or shares inconsequence of the death, incompetence or bankruptcy upon such evidence being produced as may reasonably be required by the directors.51.Any person who has become entitled to a share or shares in consequence of the death, incompetence or bankruptcy of any member may, instead of beingregistered himself, request in writing that some person to be named by him be registered as the transferee of such share or shares and such request shalllikewise be treated as if it were a transfer.52.What amounts to incompetence on the part of a person is a matter to be determined by the court having regard to all the relevant evidence and thecircumstances of the case.REDUCTION OR INCREASE IN AUTHORISED AND UNISSUED SHARES48.The Company may amend the Memorandum to increase or reduce the maximum number of shares the Company is authorised to issue and may in respect ofany unissued shares increase or reduce the number of such shares, or effect any combination of the foregoing.49.The Company may(1)(a) divide its shares, including issued shares, into a larger number of shares; or (b) combine its shares, including issued shares, into a smallernumber of shares.(2)A division or combination of shares, including issued shares, of a class or series shall be for a larger or smaller number, as the case may be, ofshares in the same class or series.(3)A company shall not divide its shares under subsection (1)(a) or (2) if it would cause the maximum number of shares that the Company isauthorised to issue by its memorandum to be exceeded.(4)Where shares are divided or combined under this article, the aggregate par value of the new shares must be equal to the aggregate par value of theoriginal shares.MEETINGS AND CONSENTS OF MEMBERS50.The directors of the Company may convene meetings of the members of the Company at such times and in such manner and places within or outside theBritish Virgin Islands as the directors consider necessary or desirable. The Company may hold an annual general meeting, but shall not (unless required bythe applicable rules of the Designated Stock Exchange for so long as the Company’s Securities are listed or traded on the Designated Stock Exchange) beobliged to hold an annual general meeting.51.Upon the written request of members holding 30 percent or more of the outstanding voting shares in the Company the directors shall convene a meeting ofmembers.1252.The directors shall give not less than 7 days notice of meetings of members to those persons whose names on the date the notice is given appear asmembers in the share register of the Company and are entitled to vote at the meeting.53.The directors may fix the date notice is given of a meeting of members as the record date for determining those shares that are entitled to vote at themeeting.54.A meeting of members may be called on short notice:(a)if members holding not less than 90 percent of the total number of shares entitled to vote on all matters to be considered at the meeting, or 90percent of the votes of each class or series of shares where members are entitled to vote thereon as a class or series together with not less than a90 percent majority of the remaining votes, have agreed to short notice of the meeting, or(b)if all members holding shares entitled to vote on all or any matters to be considered at the meeting have waived notice of the meeting and for thispurpose presence at the meeting shall be deemed to constitute waiver.55.The inadvertent failure of the directors to give notice of a meeting to a member, or the fact that a member has not received notice, does not invalidate themeeting.56.A member may be represented at a meeting of members by a proxy who may speak and vote on behalf of the member.57.The instrument appointing a proxy shall be produced at the place appointed for the meeting before the time for holding the meeting at which the personnamed in such instrument proposes to vote.58.An instrument appointing a proxy shall be in substantially the following form or such other form as the Chairman of the meeting shall accept as properlyevidencing the wishes of the member appointing the proxy.(Name of Company)I/Webeing a member of the aboveCompany withshares HEREBY APPOINTofor failing himofto be my/our proxy to vote for me/us at the meeting of members to be held on the dayofand at any adjournment thereof.(Any restrictions on voting to be inserted here.)Signed this day ofMember59.The following shall apply in respect of joint ownership of shares:a.if two or more persons hold shares jointly each of them may be present in person or by proxy at a meeting of members and may speak as a member;b.if only one of the joint owners is present in person or by proxy he may vote on behalf of all joint owners, andc.if two or more of the joint owners are present in person or by proxy they must vote as one.60.A member shall be deemed to be present at a meeting of members if he participates by telephone or other electronic means and all members participating inthe meeting are able to hear each other.61.A meeting of members is duly constituted if, at the commencement of the meeting, there are present in person or by proxy not less than 50 percent of thevotes of the shares or class or series of shares entitled to vote on resolutions of members to be considered at the meeting. If a quorum be present,notwithstanding the fact that such quorum may be represented by only one person then such person may resolve any matter and a certificate signed bysuch person accompanied where such person be a proxy by a copy of the proxy form shall constitute a valid resolution of members.1362.If within two hours from the time appointed for the meeting a quorum is not present, the meeting, if convened upon the requisition of members, shall bedissolved; in any other case it shall stand adjourned to the next business day at the same time and place or to such other time and place as the directorsmay determine, and if at the adjourned meeting there are present within one hour from the time appointed for the meeting in person or by proxy not lessthan one third of the votes of the shares or each class or series of shares entitled to vote on the resolutions to be considered by the meeting, those presentshall constitute a quorum but otherwise the meeting shall be dissolved.63.At every meeting of members, the Chairman of the Board of Directors shall preside as chairman of the meeting. If there is no Chairman of the Board ofDirectors or if the Chairman of the Board of Directors is not present at the meeting, the members present shall choose some one of their number to be thechairman. If the members are unable to choose a chairman for any reason, then the person representing the greatest number of voting shares present inperson or by prescribed form of proxy at the meeting shall preside as chairman failing which the oldest individual member or representative of a memberpresent shall take the chair.64.The chairman may, with the consent of the meeting, adjourn any meeting from time to time, and from place to place, but no business shall be transacted atany adjourned meeting other than the business left unfinished at the meeting from which the adjournment took place.65.At any meeting of the members the chairman shall be responsible for deciding in such manner as he shall consider appropriate whether any resolution hasbeen carried or not and the result of his decision shall be announced to the meeting and recorded in the minutes thereof. If the chairman shall have anydoubt as to the outcome of any resolution put to the vote, he shall cause a poll to be taken of all votes cast upon such resolution, but if the chairman shallfail to take a poll then any member present in person or by proxy who disputes the announcement by the chairman of the result of any vote mayimmediately following such announcement demand that a poll be taken and the chairman shall thereupon cause a poll to be taken. If a poll is taken at anymeeting, the result thereof shall be duly recorded in the minutes of that meeting by the chairman.66.Any person other than an individual shall be regarded as one member and subject to the specific provisions hereinafter contained for the appointment ofrepresentatives of such persons the right of any individual to speak for or represent such member shall be determined by the law of the jurisdiction where,and by the documents by which, the person is constituted or derives its existence. In case of doubt, the directors may in good faith seek legal advice fromany qualified person and unless and until a court of competent jurisdiction shall otherwise rule, the directors may rely and act upon such advice withoutincurring any liability to any member.67.Any person other than an individual which is a member of the Company may by resolution of its directors or other governing body authorize such personas it thinks fit to act as its representative at any meeting of the Company or of any class of members of the Company, and the person so authorized shall beentitled to exercise the same powers on behalf of the person which he represents as that person could exercise if it were an individual member of theCompany.68.The chairman of any meeting at which a vote is cast by proxy or on behalf of any person other than an individual may call for a notarially certified copy ofsuch proxy or authority which shall be produced within 7 days of being so requested or the votes cast by such proxy or on behalf of such person shall bedisregarded.69.Directors of the Company may attend and speak at any meeting of members of the Company and at any separate meeting of the holders of any class orseries of shares in the Company.70.An action that may be taken by the members at a meeting may also be taken by a resolution of members consented to in writing or by telex, telegram, cable,facsimile or other written electronic communication, without the need for any notice, but if any resolution of members is adopted otherwise than by theunanimous written consent of all members, a copy of such resolution shall forthwith be sent to all members not consenting to such resolution. The consentmay be in the form of counterparts, each counterpart being signed by one or more members.14DIRECTORS71.The first directors of the Company shall be appointed by the first registered agent of the Company and thereafter the directors shall be appointed byresolution of members, subject to Article 78, for such term as the members determine. A person shall not be appointed as a director unless he hasconsented in writing to be a director.72.The minimum number of directors shall be one and the maximum number shall be 20. Unless otherwise determined by the Company in a meeting ofshareholders and subject to the requirements of the Memorandum, the directors may by a Resolution of Directors, amend this Regulation 72 to change thenumber of directors. For as long as Securities of the Company are listed or traded on the Designated Stock Exchange, the directors shall include suchnumber of Independent Directors as applicable law, rules or regulations of the Designated Stock Exchange may require for a foreign private issuer as longas the Company is a foreign private issuer.73.Each director shall hold office for the term, if any, fixed by resolution of members or until his earlier death, resignation or removal.74.Where the Company has only one member who is an individual and that member is also the sole director of the Company, that sole member/director may, byinstrument in writing, nominate a person who is not disqualified from being a director of the Company under section 111(1) of the Act as a reserve directorof the Company to act in the place of the sole director in the event of his death.75.The nomination of a person as a reserve director of the Company ceases to have effect if;a.before the death of the sole member/director who nominated him;(i)he resigns as reserve director, or(ii)the sole member/director revokes the nomination in writing; orb.the sole member/director who nominated him ceases to be the sole member/director of the Company for any reason other than his death.76.A director may be removed from office, with or without cause, by a resolution of directors or a resolution of members. For the purposes of this Regulation76, “cause” means the willful and continuous failure by a director to substantially perform his duties to the Company (other than any such failure resultingfrom incapacity due to physical or mental illness) or the willful engaging by the director in gross misconduct materially and demonstrably injurious to theCompany. If a director is removed from office without cause by a resolution of the members, for the purposes of this Regulation, the resolution of memberswill require the affirmative vote of the holders of 66 2/3 percent or more of the outstanding votes of the shares entitled to vote thereon.77.A director may resign his office by giving written notice of his resignation to the Company and the resignation shall have effect from the date the notice isreceived by the Company or from such later date as may be specified in the notice. A director of the Company shall resign forthwith if he is, or becomes,disqualified to act as a director under the Act.78.The directors may at any time by resolution of directors appoint any person to be a director to fill a vacancy. There is a vacancy if a director dies orotherwise ceases to hold office as a director prior to the expiration of his term of office, where his term of office was fixed upon his appointment. Thedirectors may not appoint a director to fill a vacancy for a term exceeding the term that remained when the person who has ceased to be a director left orotherwise ceased to hold office.79.The Company shall keep a register of directors containing:a.the names and addresses of the persons who are directors of the Company or who have been nominated as reserve directors of the Company;b.the date on which each person whose name is entered in the register was appointed as a director of the Company or nominated as a reservedirector of the Company;c.the date on which each person named as a director ceased to be a director of the Company;d.the date on which the nomination of any person nominated as a reserve director ceased to have effect; ande.such other information as may be prescribed pursuant to the Act.1580.The original or a copy of any register of directors shall be kept at the office of the registered agent of the Company.81.The register of directors may be in any such form as the directors may approve but if it is in magnetic, electronic or other data storage form, the companymust be able to produce legible evidence of its contents.82.With the prior or subsequent approval by a resolution of members, the directors may, by a resolution of directors, fix the emoluments of directors withrespect to services to be rendered in any capacity to the Company.83.A director shall not require a share qualification and may be an individual or a company.POWERS OF DIRECTORS84.The business and affairs of the Company shall be managed by the directors who may pay all expenses incurred preliminary to and in connection with theformation and registration of the Company and may exercise all such powers of the Company as are not by the Act or by the Memorandum or theseArticles required to be exercised by the members of the Company, subject to any delegation of such powers as may be authorized by these Articles and tosuch requirements as may be prescribed by a resolution of members; but no requirement made by a resolution of members shall prevail if it be inconsistentwith these Articles nor shall such requirement invalidate any prior act of the directors which would have been valid if such requirement had not been made.Notwithstanding anything in Section 175 of the Act the directors shall have the power to sell, transfer, lease, exchange or otherwise dispose of more thanfifty percent of the assets of the Company without submitting a proposal to or obtaining the consent of the members of the Company.85.If the Company is a whollyowned subsidiary of a holding company a director may when exercising powers or performing duties as a director act in amanner which he believes is in the best interests of the holding company even though it may not be in the best interests of the Company.86.The directors may, by a resolution of directors, appoint any person, including a person who is a director, to be an officer or agent of the Company. Theresolution of directors appointing an agent may authorize the agent to appoint one or more substitutes or delegates to exercise some or all of the powersconferred on the agent by the Company.87.Every officer or agent of the Company has such powers and authority of the directors, including the power and authority to affix the Seal, as are set forth inthese Articles or in the resolution of directors appointing the officer or agent, except that no agent has any power or authority with respect to thefollowing;a.to amend the memorandum or articles;b.to change the registered office or agent;c.to designate committees of directors;d.to delegate powers to a committee of directors;e.to appoint or remove directors;f.to appoint or remove an agent;g.to fix emoluments of directors;h.to approve a plan of merger, consolidation or arrangement;i.to make a declaration of solvency for the purposes of section 198(1)(a) of the Act or to approve a liquidation plan;j.to make a determination under section 57(1) of the Act that the company will, immediately after a proposed distribution, satisfy the solvency test;ork.to authorise the Company to continue as a company incorporated under the laws of a jurisdiction outside the British Virgin Islands.1688.Any director which is a body corporate may appoint any person its duly authorized representative for the purpose of representing it at meetings of theBoard of Directors or with respect to unanimous written consents.89.The continuing directors may act notwithstanding any vacancy in their body, save that if their number is reduced to their knowledge below the numberfixed by or pursuant to these Articles as the necessary quorum for a meeting of directors, the continuing directors or director may act only for the purposeof appointing directors to fill any vacancy that has arisen or for summoning a meeting of members.90.The directors may by resolution of directors exercise all the powers of the Company to borrow money and to mortgage or charge its undertakings andproperty or any part thereof, to issue debentures, debenture stock and other securities whenever money is borrowed or as security for any debt, liability orobligation of the Company or of any third party.91.All cheques, promissory notes, drafts, bills of exchange and other negotiable instruments and all receipts for moneys paid to the Company, shall be signed,drawn, accepted, endorsed or otherwise executed, as the case may be, in such manner as shall from time to time be determined by resolution of directors.92.The Company shall keep a register of all relevant charges created by the Company showing:a.if the charge is a charge created by the Company, the date of its creation or if the charge is existing on property acquired by the Company, the dateon which the property was acquired;b.a short description of the liability secured by the charge;c.a short description of the property charged;d.the name and address of the trustee for the security, or if there is no such trustee the name and address of the chargee;e.unless the charge is a security to bearer, the name and address of the holder of the charge;f.details of any prohibition or restriction , if any, contained in the instrument creating the charge on the power of the company to create any futurecharge ranking in priority to or equally with the charge; andg.such other information as may be prescribed pursuant to the Act.93.The original or a copy of the register of charges shall be kept at the registered office of the Company or at the office of the registered agent of the Company.PROCEEDINGS OF DIRECTORS94.The directors of the Company or any committee thereof may meet at such times and in such manner and places within or outside the British Virgin Islandsas the directors may determine to be necessary or desirable. Any one or more directors may convene a meeting of directors.95.A director shall be deemed to be present at a meeting of directors if he participates by telephone or other electronic means and all directors participating inthe meeting are able to hear each other.96.A director shall be given not less than 3 days notice of meetings of directors, but a meeting of directors held without 3 days notice having been given to alldirectors shall be valid if all the directors entitled to vote at the meeting who do not attend, waive notice of the meeting and for this purpose, the presenceof a director at a meeting shall constitute waiver on his part. The inadvertent failure to give notice of a meeting to a director, or the fact that a director hasnot received the notice, does not invalidate the meeting.1797.A director may by a written instrument appoint an alternate who need not be a director and an alternate is entitled to attend meetings in the absence of thedirector who appointed him and to vote or consent in place of the director.98.A meeting of directors is duly constituted for all purposes if at the commencement of the meeting there are present in person or by alternate not less thanone half of the total number of directors, unless there are only 2 directors in which case the quorum shall be 2.99.If the Company shall have only one director the provisions herein contained for meetings of the directors shall not apply but such sole director shall havefull power to represent and act for the Company in all matters as are not by the Act or the Memorandum or these Articles required to be exercised by themembers of the Company and in lieu of minutes of a meeting shall record in writing and sign a note or memorandum of all matters requiring a resolution ofdirectors. Such a note or memorandum shall constitute sufficient evidence of such resolution for all purposes.100.At every meeting of the directors the Chairman of the Board of Directors shall preside as chairman of the meeting. If there is no Chairman of the Board ofDirectors or if the Chairman of the Board of Directors is not present at the meeting the Vice Chairman of the Board of Directors shall preside. If there is noVice Chairman of the Board of Directors or if the Vice Chairman of the Board of Directors is not present at the meeting the directors present shall choosesome one of their number to be chairman of the meeting.101.An action that may be taken by the directors or a committee of directors at a meeting may also be taken by a resolution of directors or a committee ofdirectors consented to in writing or by telex, telegram, cable, facsimile or other written electronic communication by all directors or all members of thecommittee as the case may be, without the need for any notice. The consent may be in the form of counterparts, each counterpart being signed by one ormore directors.102.The directors shall cause the following records to be kept:a.minutes of all meetings of directors, members, committees of directors and committees of members; andb.copies of all resolutions consented to by directors, members, committees of directors and committees of members.103.The resolutions, records and minutes referred to in the preceding Article shall be kept at the registered office of the Company, its principal place ofbusiness or at such other place as the directors determine.104.The directors may, by resolution of directors, designate one or more committees, each consisting of one or more directors.105.Subject to the following Article, each committee of directors has such powers and authorities of the directors, including the power and authority to affix theSeal, as are set forth in the resolution of directors establishing the committee.106.The directors have no power to delegate the following powers to a committee of directors;a.to amend the memorandum or articles;b.to change the registered office or agent;c.to designate committees of directors;d.to delegate powers to a committee of directors;e.to appoint or remove directors;f.to appoint or remove an agent;g.to fix emoluments of directors;18h.to approve a plan of merger, consolidation or arrangement;i.to make a declaration of solvency for the purposes of section 198(1)(a) or to approve a liquidation plan;j.to make a determination under section 57(1) that the company will, immediately after a proposed distribution, satisfy the solvency test; ork.to authorise the company to continue as a company incorporated under the laws of a jurisdiction outside the British Virgin Islands.Paragraphs (c) and (d) do not prevent a committee of directors, where authorised by the directors, from appointing a subcommittee and delegating powersexercisable by the committee to the subcommittee.107.The meetings and proceedings of each committee of directors consisting of 2 or more directors shall be governed mutatis mutandis by the provisions ofthese Articles regulating the proceedings of directors so far as the same are not superseded by any provisions in the resolution establishing the committee.108.Without prejudice to the freedom of the directors to establish any other committee, if the shares (or depositary receipts therefore) are listed or quoted onthe Designated Stock Exchange, and if required by the Designated Stock Exchange, the directors shall establish and maintain an audit committee as acommittee of the board of directors, the composition and responsibilities of which shall comply with the rules and regulations of the SEC and theDesignated Stock Exchange. The audit committee shall meet at least once every financial quarter, or more frequently as circumstances dictate.109.The Company shall adopt a formal written audit committee charter and review and assess the adequacy of the formal written charter on an annual basis.The charter shall specify the responsibilities of the Audit Committee which shall include responsibility for, among other things, ensuring its receipt from theoutside auditors of the Company of a formal written statement delineating all relationships between the auditor and the Company, and the AuditCommittee’s responsibility for actively engaging in a dialogue with the auditor with respect to any disclosed relationships or services that may impact theobjectivity and independence of the auditor take appropriate action to oversee the independence of the outside auditor. In addition, the Audit Committee isresponsible for reviewing potential conflict of interest situations and approving all Related Party Transactions.110.Without prejudice to the freedom of the directors to establish any other committees, the Board may establish a Stock Option Committee to administer theCompany’s stock option plans, including authority to make and modify awards under such plans. For so long as the Securities of the Company are listed ortraded on the Designated Stock Exchange, the Stock Option Committee shall have at least two Independent Directors. The Stock Option Committee willadminister the Company’s stock option plans, including the authority to make and modify awards under such plans.111.Without prejudice to the freedom of the directors to establish any other committees, the Board may establish a Nominating Committee to assist the Board inidentifying qualified individuals to become members of the Board.OFFICERS112.The Company may by resolution of directors appoint officers of the Company at such times as shall be considered necessary or expedient. Such officersmay consist of a Chairman of the Board of Directors, a Vice Chairman of the Board of Directors, a President and one or more Vice Presidents, Secretaries andTreasurers and such other officers as may from time to time be deemed desirable. Any number of offices may be held by the same person.113.The officers shall perform such duties as shall be prescribed at the time of their appointment subject to any modification in such duties as may beprescribed thereafter by resolution of directors or resolution of members, but in the absence of any specific allocation of duties it shall be the responsibilityof the Chairman of the Board of Directors to preside at meetings of directors and members, the Vice Chairman to act in the absence of the Chairman, thePresident to manage the day to day affairs of the Company, the Vice Presidents to act in order of seniority in the absence of the President but otherwise toperform such duties as may be delegated to them by the President, the Secretaries to maintain the share register, minute books and records (other thanfinancial records) of the Company and to ensure compliance with all procedural requirements imposed on the Company by applicable law, and the Treasurerto be responsible for the financial affairs of the Company.19114.Subject to the rules of the Designated Stock Exchange, the emoluments of all officers shall be fixed by resolution of directors.115.The officers of the Company shall hold office until their successors are duly elected and qualified, but any officer elected or appointed by the directors maybe removed at any time, with or without cause, by resolution of directors. Any vacancy occurring in any office of the Company may be filled by resolutionof directors.CONFLICT OF INTERESTS116.A director of the Company shall, forthwith after becoming aware of the fact that he is interested in a transaction entered into or to be entered into by theCompany, disclose the interest to all other directors of the Company.117.A director of the Company is not required to comply with Article 112 if;a.the transaction or proposed transaction is between the director and the Company; andb.the transaction or proposed transaction is or is to be entered into in the ordinary course of the company’s business and on usual terms andconditions.118.For the purposes of Article 112 a disclosure to all other directors to the effect that a director is a member, director or officer of another named entity or has afiduciary relationship with respect to the entity or a named individual and is to be regarded as interested in any transaction which may, after the date of theentry or disclosure, be entered into with that entity or individual, is a sufficient disclosure of interest in relation to that transaction.119.A.A director of the Company who is interested in a transaction entered into or to be entered into by the Company may:(i)vote on a matter relating to the transaction;(ii)attend a meeting of directors at which a matter relating to the transaction arises and be included among the directors present at the meeting for thepurposes of a quorum; and(iii)sign a document on behalf of the Company, or do any other thing in his capacity as a director, that relates to the transaction,and, subject to compliance with the Act shall not, by reason of his office be accountable to the Company for any benefit which he derives from suchtransaction and no such transaction shall be liable to be avoided on the grounds of any such interest or benefit.119.B.For so long the Securities of the Company are listed or traded on the Designated Stock Exchange, the Company shall conduct an appropriate review of allmaterial Related Party Transactions on an ongoing basis and shall utilize the Audit Committee for the review and approval of potential conflicts of interestsituations.INDEMNIFICATION120.Subject to the limitations hereinafter provided the Company may indemnify against all expenses, including legal fees, and against all judgments, fines andamounts paid in settlement and reasonably incurred in connection with legal, administrative or investigative proceedings any person who;a.is or was a party or is threatened to be made a party to any threatened, pending or completed proceedings, whether civil, criminal, administrative orinvestigative, by reason of the fact that the person is or was a director, an officer or a liquidator of the Company; orb.is or was, at the request of the Company, serving as a director of, or in any other capacity is or was acting for, another body corporate or apartnership, joint venture, trust or other enterprise.20121.The Company may only indemnify a person if the person acted honestly and in good faith in what he believed to be in the best interests of the Companyand, in the case of criminal proceedings, the person had no reasonable cause to believe that his conduct was unlawful.122.For the purposes of the preceding Article, a director acts in the best interests of the Company if he acts in the best interests of;a.the Company’s holding company; orb.a shareholder or shareholders of the Company; in either case, in the circumstances specified in Article 85.123.The decision of the directors as to whether the person acted honestly and in good faith and with a view to the best interests of the Company and as towhether the person had no reasonable cause to believe that his conduct was unlawful is, in the absence of fraud, sufficient for the purposes of theseArticles, unless a question of law is involved.124.The termination of any proceedings by any judgment, order, settlement, conviction or the entering of a nolle prosequi does not, by itself, create apresumption that the person did not act honestly and in good faith and with a view to the best interests of the Company or that the person had reasonablecause to believe that his conduct was unlawful.Consolidated Statements of Changes in Stockholder’s EquityF5Consolidated Statements of Cash FlowsF6Notes to Consolidated Financial StatementsF7 F22F1REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRMTo the Shareholder and the Sole Director ofLK Technology Ltd.Opinion on the Consolidated Financial StatementsWe have audited the accompanying consolidated balance sheets of LK Technology Ltd. and. subsidiaries (the “Company”) as of December 31, 2017 and 2016, andthe related consolidated statements of operations and comprehensive loss, changes in shareholder’s equity and cash flows for each of the years then ended, andthe related notes (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in allmaterial respects, the consolidated financial position of the Company as of December 31, 2017 and 2016, and the consolidated results of its operations and its cashflows for each of the years then ended, in conformity with accounting principles generally accepted in the United States of America.Basis for OpinionThese consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’sconsolidated financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (UnitedStates) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules andregulations of the Securities and Exchange Commission and the PCAOB.We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonableassurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have,nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internalcontrol over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting.Accordingly, we express no such opinion.An independent member firm of Moore Stephens International Limited – members in principal cities throughout the worldOur audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, andperforming procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in theconsolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well asevaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion.Certified Public AccountantsWe have served as the Company’s auditor since 2018.Hong KongMay 25, 2018F2LK TECHNOLOGY LTD. AND SUBSIDIARIESCONSOLIDATED BALANCE SHEETS(IN U.S. DOLLARS)As of December 31,20172016AssetsCurrent assets:Cash and cash equivalents$72,379$83,843Accounts receivable, net of allowance for doubtful accounts9,729,6251,865,836Other receivables and prepayment2,376,7452,287,934Amounts due from related parties11,760,692Total current assets23,939,4414,237,613Property and equipment, net5,044,8727,771,027Intangible assets, net1,154,1971,682,445Goodwill7,239,9367,239,936Amount due from a related party204,412183,811TOTAL ASSETS37,582,85821,114,832LiabilitiesCurrent liabilities:Accounts payable8,784,5186,446,584Accrued liabilities and other payables12,962,91211,329,613Amounts due to related parties3,563,68316,129,323Total current liabilities25,311,11333,905,520Total liabilities25,311,11333,905,520Commitments and contingenciesShareholder’s Equity (Deficit)Share capitalCommon stock, $1 par value per share; 50,000 shares authorized as of December 31, 2017 and 2016, 1 share issued andoutstanding as of December 31, 2017 and 201611Additional paidin capital41,819,68510,037,469Accumulated deficit(29,936,158)(23,125,704)Accumulated other comprehensive income (loss)388,217297,546Total Shareholder’s Equity (Deficit)12,271,745(12,790,688)TOTAL LIABILITIES AND SHAREHOLDER’S EQUITY (DEFICIT)$37,582,858$21,114,832F3LK TECHNOLOGY LTD. AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS(IN U.S. DOLLARS)For the years endedDecember 31,20172016Revenues$26,082,417$5,233,145Less: Cost of revenues5,547,7796,315,504Less: Operating expenses:Selling and marketing23,908,7336,209,804General and administrative2,451,2492,108,854Research and development1,046,1982,882,202Total operating expenses27,406,18011,200,860Loss from operations(6,871,542)(12,283,219)Other income (expense):Interest expense(26,611)(4,412)Foreign exchange gains (losses)350,679(298,257)Loss from investment(428,571)Other income (expense), net(262,980)(34,572)Total other income (expense), net61,088(765,812)Loss before income taxes(6,810,454)(13,049,031)Income taxesNet loss$(6,810,454)$(13,049,031)Other comprehensive income:Foreign currency translation adjustment90,671387,375Total comprehensive loss$(6,719,783)$(12,661,656)F4LK TECHNOLOGY LTD. AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDER’S EQUITY(IN U.S. DOLLARS)Accumulated otherTotalOrdinary sharesAdditionalpaidin AccumulatedcomprehensiveIncomeShareholder’sEquity SharesAmountcapitaldeficits(loss)(Deficit)Balance as of December 31, 20151$ 1$8,250,505$(10,076,673)$(89,829)$(1,915,996)Capital contribution from C Media1,786,9641,786,964Net loss(13,049,031)(13,049,031)Foreign currency translation adjustment387,375387,375Balance as of December 31, 20161110,037,469(23,125,704)297,546(12,790,688)Capital contribution from C Media31,782,21631,782,216Net loss(6,810,454)(6,810,454)Foreign currency translation adjustment90,67190,671Balance as of December 31, 20171$1$41,819,685$(29,936,158)$388,217$12,271,745F5LK TECHNOLOGY LTD. AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF CASH FLOWS(IN U.S. DOLLARS)For the years endedDecember 31,20172016CASH FLOWS FROM OPERATING ACTIVITIES:Net loss$(6,810,454)$(13,049,031)Depreciation and amortization3,316,1813,245,161Loss on disposal of property and equipment115,19373,022Increase in allowance for doubtful accounts445,39562,591Changes in assets and liabilitiesAccounts receivable(7,933,730)(1,507,296)Other receivables and prepayment(2,202,960)2,873,984Accounts payable2,230,5434,757,457Accrued liabilities and other payables1,866,1377,483,441Net cash (used in) provided by operating activities(8,973,695)3,939,329CASH FLOWS FROM INVESTING ACTIVITIES:Purchase of property and equipment(12,689)(3,554,258)Proceeds from disposal of property and equipment29,942Net cash provided by (used in) investing activities17,253(3,554,258)CASH FLOWS FROM FINANCING ACTIVITIES:Advances from related parties8,938,290(1,197,870)Net cash provided by (used in) financing activities8,938,290(1,197,870)Effect of exchange rate changes6,688(32,746)Net decrease in cash and cash equivalents(11,464)(845,545)Cash and cash equivalents, at beginning of year83,843929,388Cash and cash equivalents, at end of year$72,379$83,843Supplemental cash flow disclosures:Interest paid26,6114,412Income taxes paidF6LK TECHNOLOGY LTD. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS(IN U.S. DOLLARS)NOTE 1 – DESCRIPTION OF BUSINESS AND ORGANIZATIONStar Chariot Limited was incorporated in the British Virgin Islands (“BVI”) as an exempted limited liability company on March 3, 2011. On January 18, 2018, it wasrenamed as LK Technology Ltd. (“LK Technology ” or the “Company”).LK Technology, its subsidiaries and its variable interest entities (“VIEs”) (collectively the “Group”) operate mobile application service for longdistance travel in thePeople’s Republic of China (the “PRC”). The core mobile application product, Luokuang, is made as an LBSsocial contents and services distribution platform. Itoffers functions based on various travel scenarios, e.g. information, entertainment, travel, ecommerce, O2O, advertising, etc.As of December 31, 2017, details of the Company’s subsidiaries and VIEs are as follows:NameDate ofincorporationPlace ofincorporationPercentage oflegal ownershipSubsidiaries:MMB LimitedApr 11, 2013Hong Kong100%Mobile Media (China) LimitedNov 6, 2007Hong Kong100%Zhong Chuan Tian Xia Information and Technology (Beijing) LimitedFeb 1, 2013PRC100%Zhong Chuan Tian Xia Information and Technology (Shenzhen) LimitedDec 23, 2010PRC100%VIEs:Beijing Zhong Chuan Shi Xun Technology Limited (“Zhong Chuan Shi Xun”)May 17, 2004PRC100%Jiangsu Zhong Chuan Rui You Information and Technology Limited (“Zhong Chuan Rui You”)May 26, 2011PRC100%Huoerguosi Luokuang Information and Technology Limited (“Huoerguosi Luokuang”)Jul 19, 2017PRC100%Shenzhen Jiu Zhou Shi Dai Digital and Technology Limited (“Jiu Zhou Shi Dai”)Nov 26, 2004PRC100%F7NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIESBasis of presentationThe consolidated financial statements of the Group have been prepared in accordance with accounting principles generally accepted in the United States of America(“US GAAP”).The Group incurred losses from operations of $6,871,542 and $12,283,219 for the years ended December 31, 2017 and 2016, respectively. As of December 31, 2017, theGroup had a shareholder’s equity of $12,271,145. The Group had negative cash flows from operating activities for the year ended December 31, 2017 of $8,973,695.As of December 31, 2017, the Group had cash and cash equivalents of $72,379 and a working capital deficit of $1,371,672. From 2018 and onwards, the Group willfocus on improving operation efficiency and cost reduction, and enhancing marketing functions to attract more users. The Group regularly monitors its current andexpected liquidity requirements to ensure that it maintains sufficient cash balances and accessible credit to meet its liquidity requirements in the short and long term.The parent company continues to provide cash flow to the Group. Based on working capital conditions and forecast for future operations, the Group believes that itwill be able to meet its payment obligations and other commitments for at least the following twelve months.Principles of consolidationThe consolidated financial statements include the financial statements of the Company, its subsidiaries, including the whollyforeign owned enterprises (“WFOEs”),and VIEs for which the Company is the primary beneficiary. All transactions and balances among the Company, its subsidiaries and consolidated VIEs have beeneliminated upon consolidation. The results of subsidiaries and consolidated VIEs acquired or disposed of are recorded in the consolidated statements of operationsfrom the effective date of acquisition or up to the effective date of disposal, as appropriate.A subsidiary is an entity in which (i) the Company directly or indirectly controls more than 50% of the voting power; or (ii) the Company has the power to appoint orremove the majority of the members of the board of directors or to cast a majority of votes at the meeting of the board of directors or to govern the financial andoperating policies of the investee pursuant to a statute or under an agreement among the shareholders or equity holders. A VIE is required to be consolidated by theprimary beneficiary of the entity if the equity holders in the entity do not have the characteristics of a controlling financial interest or do not have sufficient equity atrisk for the entity to finance its activities without additional subordinated financial support from other parties.F8To comply with the PRC legal restrictions on foreign ownership of companies that operate mobile application services, the Group operates in such restricted servicesin the PRC through certain PRC domestic companies, whose equity interests are held by certain management members or founders of the Group. Part of theregistered capital of these PRC domestic companies was funded by certain management members or founders of the Group. The Group has entered into certainexclusive business services agreements with these PRC domestic companies, which entitle it to receive a majority of their residual returns and make it obligatory forthe Group to absorb a majority of the risk of losses from their activities. In addition, the Group has entered into certain agreements with those management membersor founders, including equity interest pledge agreements of the equity interests held by those management members or founders and exclusive option agreements toacquire the equity interests in these companies when permitted by the PRC laws, rules and regulations.Details of the typical VIE structure of the Group’s significant consolidated VIEs, primarily domestic companies associated with the operations such as Zhong ChuanShi Xun, Zhong Chuan Rui You, Huoerguosi Luokuang and Jiu Zhou Shi Dai, are set forth below:(i)Contracts that give the Group effective control of VIEsExclusive option agreementsThe VIE equity holders have granted the WFOEs exclusive call options to purchase their equity interest in the VIEs at an exercise price equal to the higherof (i) the registered capital in the VIEs; and (ii) the minimum price as permitted by applicable PRC laws. Each relevant VIE has further granted the relevantWFOE an exclusive call option to purchase its assets at an exercise price equal to the book value of the assets or the minimum price as permitted byapplicable PRC laws, whichever is higher. The WFOEs may nominate another entity or individual to purchase the equity interest or assets, if applicable,under the call options. Each call option is exercisable subject to the condition that applicable PRC laws, rules and regulations do not prohibit completion ofthe transfer of the equity interest or assets pursuant to the call option. Each WFOE is entitled to all dividends and other distributions declared by the VIE,and the VIE equity holders have agreed to give up their rights to receive any distributions or proceeds from the disposal of their equity interests in the VIEwhich are in excess of the original registered capital that they contributed to the VIE, and to pay any such distributions or premium to the WFOE. Theexclusive call option agreements remain in effect until the equity interest or assets that are the subject of such agreements are transferred to the WFOEs.Equity pledge agreementsPursuant to the relevant equity pledge agreements, the relevant VIE equity holders have pledged all of their interests in the equity of the VIEs as acontinuing first priority security interest in favor of the corresponding WFOEs to secure the performance of obligations by the VIEs and/or the equityholders under the other structure contracts. Each WFOE is entitled to exercise its right to dispose of the VIE equity holders’ pledged interests in the equityof the VIE and has priority in receiving payment by the application of proceeds from the auction or sale of such pledged interests, in the event of anybreach or default under the loan agreement or other structure contracts, if applicable. These equity pledge agreements remain in force for the duration ofthe relevant loan agreement and other structure contracts.F9(ii)Contracts that enable the Group to receive substantially all of the economic benefits from the VIEsExclusive business services agreementsEach relevant VIE has entered into an exclusive business services agreement with the respective WFOE, pursuant to which the relevant WFOE providesexclusive business services to the VIE. In exchange, the VIE pays a service fee to the WFOE which typically amounts to what would be substantially all ofthe VIE’s pretax profit, resulting in a transfer of substantially all of the profits from the VIE to the WFOE.Other arrangementsThe exclusive call option agreements described above also enable the Group to receive substantially all of the economic benefits from the VIEs by typicallyentitling the WFOEs to all dividends and other distributions declared by the VIEs and to any distributions or proceeds from the disposal by the VIE equityholders of their equity interests in the VIEs that are in excess of the original registered capital that they contributed to the VIEs.Based on these contractual agreements, the Group believes that the PRC domestic companies as described above should be considered as VIEs because the equityholders do not have significant equity at risk nor do they have the characteristics of a controlling financial interest. Given that the Group is the primary beneficiaryof these PRC domestic companies, the Group believes that these VIEs should be consolidated based on the structure as described above.Under the contractual arrangements with the consolidated VIEs, the Group has the power to direct activities of the consolidated VIEs and can have assetstransferred out of the consolidated VIEs under its control. Therefore, the Group considers that there is no asset in any of the consolidated VIEs that can be usedonly to settle obligations of the consolidated VIEs, except for registered capital and PRC statutory reserves. As all consolidated VIEs are incorporated as limitedliability companies under the Company Law of the PRC, creditors of the consolidated VIEs do not have recourse to the general credit of the Group for any of theliabilities of the consolidated VIEs.Currently there is no contractual arrangement which requires the Group to provide additional financial support to the consolidated VIEs. However, as the Groupconducts its businesses primarily based on the licenses and approvals held by its consolidated VIEs, the Group has provided and will continue to provide financialsupport to the consolidated VIEs considering the business requirements of the consolidated VIEs, as well as the Group’s own business objectives in the future.F10Use of estimatesThe preparation of financial statements in conformity with US GAAP requires the Group to make estimates and assumptions that affect the reported amounts ofassets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expensesduring the reporting period. The most significant estimates are the allowance for doubtful accounts, the useful lives of property and equipment and intangibleassets, impairment of longlived assets and goodwill. Actual results could differ from those estimates.Fair value measurementsFair value is the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at themeasurement date under current market conditions. When determining the fair value measurements for assets and liabilities required or permitted to be recorded atfair value, the Group considers the principal or most advantageous market in which it would transact and it considers assumptions that market participants woulduse when pricing the asset or liability.Authoritative literature provides a fair value hierarchy which prioritizes the inputs to valuation techniques used to measure fair value into three broad levels. Thelevel in the hierarchy within which the fair value measurement in its entirety falls is based upon the lowest level of input that is significant to the fair valuemeasurement as follows:Level 1Level 1 applies to assets or liabilities for which there are quoted prices in active markets for identical assets or liabilities.Level 2Level 2 applies to assets or liabilities for which there are inputs other than quoted prices included within Level 1 that are observable for the asset or liability such asquoted prices for similar assets or liabilities in active markets; quoted prices for identical assets or liabilities in markets with insufficient volume or infrequenttransactions (less active markets); or modelderived valuations in which significant inputs are observable or can be derived principally from, or corroborated by,observable market data.Level 3Level 3 applies to assets or liabilities for which there are unobservable inputs to the valuation methodology that are significant to the measurement of the fair valueof the assets or liabilities.F11Cash and cash equivalentsCash and cash equivalents primarily consist of cash, money market funds, investments in interest bearing demand deposit accounts, time deposits and highly liquidinvestments with original maturities of three months or less from the date of purchase and are stated at cost which approximates their fair value. The Group has nocash equivalents.Accounts receivable, net of allowanceAccounts receivable are recognized and carried at the original invoiced amount less an allowance for any potential uncollectible amounts. An estimate for doubtfuldebts is made when collection of the full amount is no longer probable. Bad debts are written off as incurred. The Group generally does not require collateral from itscustomers.The Group maintains allowances for doubtful accounts for estimated losses resulting from the failure of customers to make payments on time. The Group reviews theaccounts receivable on a periodic basis and makes specific allowances when there is doubt as to the collectability of individual balances. In evaluating thecollectability of individual receivable balances, the Group considers many factors, including the age of the balance, the customer’s payment history, its currentcreditworthiness and current economic trends.Property and equipment, netProperty and equipment are carried at cost less accumulated depreciation. Depreciation is calculated on a straightline basis over the following estimated usefullives:Wifi equipment– 3 yearsOffice equipment– 3 to 5 yearsVehicles– 5 yearsCosts of repairs and maintenance are expensed as incurred and asset improvements are capitalized. The gain or loss on disposal of property and equipment is thedifference between the net sales proceeds and the carrying amount of the relevant assets and is recognized in the consolidated income statement. When propertyand equipment are retired or otherwise disposed of, the cost and accumulated depreciation are removed from the accounts and any resulting gain or loss is includedin the results of operations for the respective period.Construction in progressAssets under construction are not depreciated until construction is completed and the assets are ready for their intended use.F12Intangible assetsIntangible assets with finite lives are amortized using the straightline method over the estimated economic lives.Intangible assets have weighted average economic lives from the date of purchase as follows:Software– 5 yearsTrademarks– 10 yearsGoodwillThe Group assesses goodwill for impairment in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”)subtopic 35020, Intangibles—Goodwill and Other: Goodwill (“ASC 35020”), which requires that goodwill to be tested for impairment at the reporting unit level atleast annually and more frequently upon the occurrence of certain events, as defined by ASC 35020.We have the option to assess qualitative factors first to determine whether it is necessary to perform the twostep test in accordance with ASC 35020. If we believe,as a result of the qualitative assessment, that it is morelikelythannot that the fair value of the reporting unit is less than its carrying amount, the twostepquantitative impairment test described below is required. Otherwise, no further testing is required. In the qualitative assessment, we consider primary factors such asindustry and market considerations, overall financial performance of the reporting unit, and other specific information related to the operations. In performing thetwostep quantitative impairment test, the first step compares the carrying amount of the reporting unit to the fair value of the reporting unit based on either quotedmarket prices of the ordinary shares or estimated fair value using a combination of the income approach and the market approach. If the fair value of the reportingunit exceeds the carrying value of the reporting unit, goodwill is not impaired and we are not required to perform further testing. If the carrying value of the reportingunit exceeds the fair value of the reporting unit, then we must perform the second step of the impairment test in order to determine the implied fair value of thereporting unit’s goodwill. The fair value of the reporting unit is allocated to its assets and liabilities in a manner similar to a purchase price allocation in order todetermine the implied fair value of the reporting unit goodwill. If the carrying amount of the goodwill is greater than its implied fair value, the excess is recognized asan impairment loss.In 2017, we performed a qualitative assessment for goodwill. Based on the requirements of ASC35020, we evaluated all relevant factors, including but not limited tomacroeconomic conditions, industry and market conditions, financial performance. We weighed all factors in their entirety and concluded that it was not morelikelythannot the fair value was less than the carrying amount of the reporting unit, and further impairment testing on goodwill was unnecessary as of December 31, 2017and 2016.F13Impairment or disposal of longlived assetsLonglived assets other than goodwill are included in impairment evaluations when events and circumstances exist that indicate the carrying value of these assetsmay not be recoverable. In accordance with FASB ASC 360, Property, Plant and Equipment, the Group assesses the recoverability of the carrying value of longlivedassets by first grouping its longlived assets with other assets and liabilities at the lowest level for which identifiable cash flows are largely independent of the cashflows of other assets and liabilities (the asset group) and, secondly, estimating the undiscounted future cash flows that are directly associated with and expected toarise from the use of and eventual disposition of such asset group. If the carrying value of the asset group exceeds the estimated undiscounted cash flows, theGroup recognizes an impairment loss to the extent the carrying value of the longlived asset exceeds its fair value. The Group determines fair value through quotedmarket prices in active markets or, if quotations of market prices are unavailable, through the performance of internal analysis using a discounted cash flowmethodology or obtains external appraisals from independent valuation firms. The undiscounted and discounted cash flow analyses are based on a number ofestimates and assumptions, including the expected period over which the asset will be utilized, projected future operating results of the asset group, discount rateand longterm growth rate.As of December 31, 2017 and 2016, the Group assessed the impairment of its longlived assets and concluded that there was no impairment indication.Business combinationWe account for business combinations using the purchase method of accounting in accordance with FASB ASC topic 805, Business combinations. The purchasemethod accounting requires that the consideration transferred be allocated to the assets, including separately identifiable assets and liabilities we acquired, basedon their estimated fair values. The consideration transferred in an acquisition is measured as the aggregate of the fair values at the date of exchange of the assetsgiven, liabilities incurred, and equity instruments issued as well as the contingent considerations and all contractual contingencies as of the acquisition date. Thecosts directly attributable to the acquisition are expensed as incurred. Identifiable assets, liabilities and contingent liabilities acquired or assumed are measuredseparately at their fair value as of the acquisition date, irrespective of the extent of any noncontrolling interests. The excess of (i) the total of cost of acquisition, fairvalue of the noncontrolling interests and acquisition date fair value of any previously held equity interest in the acquiree over (ii) the fair value of the identifiable netassets of the acquiree, is recorded as goodwill. If the cost of acquisition is less than the fair value of the net assets of the subsidiary acquired, the difference isrecognized directly in earnings.Revenue recognitionThe Group recognizes revenue in accordance with FASB ASC topic 605, Revenue Recognition (“ASC 605”). Revenue is recognized when the following four revenuerecognition criteria are met: (i) persuasive evidence of an arrangement exists, (ii) delivery has occurred or services have been provided, (iii) the selling price is fixed ordeterminable, and (iv) collectability is reasonably assured.F14Displaybased online advertising servicesThe Group provides displaybased online advertising services to customers by integrating text description, image and video, and displaying the advertisements in aprominent position of LuoKuang Application. The Group recognizes revenue in accordance with ASC 605, over the contractual term based on the agreements andconfirmation letters signed by both parties, commencing on the date the customer’s advertisement is displayed on the Group’s platform.Foreign currency translationThe functional and reporting currency of the Company and the Company’s subsidiaries domiciled in BVI and Hong Kong are the United States dollar (“U.S. dollar”).The financial records of the Company’s other subsidiaries and VIEs located in the PRC are maintained in their local currency, the Chinese Renminbi (“RMB”), whichare the functional currency of these entities.Monetary assets and liabilities denominated in currencies other than the functional currency are translated into the functional currency at the rates of exchangeruling at the balance sheet date. Transactions in currencies other than the functional currency during the year are converted into the functional currency at theapplicable rates of exchange prevailing when the transactions occurred. Transaction gains and losses are recognized in the statements of operations.The Company’s entities with a functional currency of RMB translate their operating results and financial position into the U.S. dollar, the Company’s reportingcurrency. Assets and liabilities are translated using the exchange rates in effect on the balance sheet date. Revenues, expenses, gains and losses are translatedusing the average rate for the year. Retained earnings and equity are translated using the historical rate. Translation adjustments are reported as cumulativetranslation adjustments and are shown as a separate component of other comprehensive income.Income taxesDeferred income taxes are recognized for temporary differences between the tax basis of assets and liabilities and their reported amounts in the financial statements,net operating loss carry forwards and credits, by applying enacted statutory tax rates applicable to future years. Deferred tax assets are reduced by a valuationallowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Current income taxesare provided for in accordance with the laws and regulations applicable to the Group as enacted by the relevant tax authorities.The impact of an uncertain income tax position on the income tax return must be recognized at the largest amount that is morelikelythan not to be sustained uponaudit by the relevant tax authorities. An uncertain income tax position will not be recognized if it has less than a 50% likelihood of being sustained. Additionally, theGroup classifies the interest and penalties, if any, as a component of the income tax expense. For years ended December 31, 2017 and 2016, the Group did not haveany material interest or penalties associated with tax positions nor did the Group have any significant unrecognized uncertain tax positions.F15Related partiesParties are considered to be related to the Company if the parties, directly or indirectly, through one or more intermediaries, control, are controlled by, or are undercommon control with the Company. Related parties also include principal owners of the Company, its management, members of the immediate families of principalowners of the Company and its management and other parties with which the Company may deal with if one party controls or can significantly influence themanagement or operating policies of the other to an extent that one of the transacting parties might be prevented from fully pursuing its own separate interests. TheCompany discloses all significant related party transactions.LeasesLeases have been classified as either capital or operating leases. Leases that transfer substantially all the benefits and risks incidental to the ownership of assets areaccounted for as if there was an acquisition of an asset and incurrence of an obligation at the inception of the lease. All other leases are accounted for as operatingleases wherein rental payments are expensed as incurred.When the Group is the lessor, minimum contractual rental from leases are recognized on a straightline basis over the noncancelable term of the lease. With respectto a particular lease, actual amounts billed in accordance with the lease during any given period may be higher or lower than the amount of rental revenue recognizedfor the period. Straightline rental revenue commences when the customer assumes control of the leased premises. Accrued straightline rents receivable representsthe amount by which straightline rental revenue exceeds rents currently billed in accordance with lease agreements. Contingent rental revenue is accrued when thecontingency is removed.Advertising costsAdvertising costs include expenses associated with direct marketing. All advertising costs are expensed as incurred and included in selling and marketing expenses.During the years ended December 31, 2017 and 2016, advertising costs amounted to $23,171,170 and $4,537,653, respectively.Comprehensive lossComprehensive loss includes net loss and foreign currency translation adjustments and is presented net of tax. The tax effect is nil for the two years endedDecember 31, 2017 and 2016 in the consolidated statements of comprehensive loss.Concentration of credit riskFinancial instruments that potentially expose the Group to concentrations of credit risk consist primarily of cash and accounts receivable. The Group places its cashwith financial institutions with highcredit rating and quality in China. For the year ended December 31, 2017, two customers accounted for over 10% of totalrevenue. For the year ended December 31, 2016, four customers accounted for over 10% of total revenue. At December 31, 2017 and 2016, the Group had credit riskexposure of uninured cash in banks of approximately $72,379 and $83,843, respectively.F16NOTE 3 – INCOME TAXAt December 31, 2017 and 2016, the Group had an unused net operating loss carryforwards of approximately $25,123,726 and $20,081,239, respectively, for income taxpurposes, which expires between 2018 to 2022 and between 2017 to 2021, respectively. At December 31, 2017 and 2016, these net operating losses carryforwards mayresult in future income tax benefits of approximately $5,043,944 and $4,008,863, respectively, however, because realization is uncertain at this time, a valuationallowance in the same amount has been established. Deferred income taxes reflect the net effects of temporary differences between the carrying amounts of assetsand liabilities for financial reporting purposes and the amounts used for income tax purposes.Significant components of the Group’s deferred tax liabilities and assets of December 31, 2017 and 2016 are as follows:December 31,December 31,20172016Deferred tax liabilities$$Deferred tax assetNet operating loss carryforward5,043,9444,008,863Valuation allowance(5,043,944)(4,008,863)Net deferred tax assetMovement of valuation allowanceDecember 31,2017December 31,2016At the beginning of the year$4,008,863$2,049,352Current year addition823,9702,159,518Expired(61,411)Exchange difference272,522(200,007)At the end of the year5,043,9444,008,863The Company is not subject to taxation in BVI under the current BVI law. Subsidiaries operating in the PRC are subject to PRC Enterprise Income Tax at the statutoryrate of 25% for the years ended December 31, 2017 and 2016. Subsidiaries operating in Hong Kong are subject to Hong Kong income taxes at a rate of 16.5% for theyears ended December 31, 2017 and 2016.F17A reconciliation of the income tax expense to the amount computed by applying the current statutory tax rate to the loss before income taxes in the consolidatedstatements of comprehensive income is as follows:December 31,December 31,20172016Loss before income taxes$(6,810,454)$(13,049,031)Tax loss at statutory tax rate(1,655,174)(3,386,822)Nondeductible items6,729,2551,712,857Nontaxable items(3,789,956)(674,189)Change in valuation allowance823,9702,159,518Tax benefits(2,108,095)188,636Income tax expensesNOTE 4 – ACCOUNTS RECEIVABLEAt December 31, 2017 and 2016, accounts receivable consisted of the following:December 31,December 31,20172016Accounts receivable$10,406,602$2,098,946Less: allowance for doubtful accounts676,977233,110$9,729,625$1,865,836NOTE 5 – OTHER RECEIVABLESAt December 31, 2017 and 2016, other receivables consisted of the following:December 31,2017December 31,2016Advances to suppliers$339,701$181,472VAT recoverable (1)3,033,0651,662,805Other5,048,189485,152$2,376,745$2,287,934(1)The balance of advanced VAT represents input VAT available for deducting the amount of VAT paid in the future. During the years ended December 31, 2017and 2016, the Group purchased a large amount of WiFi equipment for deployments, which generated related input VAT approved by tax authority.F18NOTE 6 – AMOUNTS DUE FROM RELATEDPARTIESAt December 31, 2017 and 2016, amounts due from related parties consisted of the following:Name of related partyDecember 31,2017December 31,2016C Media Limited (1)$11,760,692$Ya Tuo Ji International Consultancy (Beijing) Limited (2)204,412183,811(1)C Media Limited is the parent company of LK Technology. The Group expects the amounts due from the related party will be returned to the Group within oneyear.(2)Ya Tuo Ji is a company controlled by the spouse of a major shareholder of C Media Limited. The loan is unsecured, interestfree and repayable on January 5,2019.NOTE 7 – PROPERTY AND EQUIPMENTAt December 31, 2017 and 2016, property and equipment consisted of the following:December 31,December 31,Useful life20172016WiFi equipment3 Years$8,711,424$8,367,678Vehicles5 Years43,246Office and other equipment3 – 5 Years170,242416,434Constructioninprogress2,166,4522,652,28811,048,11811,479,646Less: accumulated depreciation(6,003,246)(3,708,619)$5,044,872$7,771,027For the years ended December 31, 2017 and 2016, depreciation expense amounted to $2,628,884 and $2,474,434, respectively, of which $2,423,655 and $2,194,582,respectively, was included in cost of revenue, $117,648 and $121,740, respectively, was included in selling and marketing expenses and the remainder was included ingeneral and administrative expense.Included in constructioninprogress are WiFI equipment under construction.F19NOTE 8 – GOODWILLIn September of 2014, Zhong Chuan Shi Xun acquired a 100% interest in Zhong Chuan Rui You for a consideration of $7,391,894 (RMB48,000,000). Zhong Chuan RuiYou is primarily engaged in on train WiFi business, deploying WiFi equipment on trains and providing passengers with entertainment and information services ontrains. The book value of the identifiable net assets of Zhong Chuan Rui You was $151,958 (RMB963,000) and a goodwill of $7,239,936 was recorded.NOTE 9 – ACCRUED LIABILITIES AND OTHER PAYABLESAt December 31, 2017 and 2016, accrued liabilities and other payables consisted of the following:December 31,December 31,20172016Deferred revenue$2,326,406$302,735Accrued payroll143,998316,458Other taxes payable3,544,469461,699Other payable852,384686,526Other loans6,095,6559,562,915$12,962,912$11,329,613Deferred revenue represents prepayments from customers for advertising service and is recognized as revenue when the advertising services are rendered.Other loans of $939,555 and $57,416, respectively, as of December 31, 2017 and 2016, are unsecured, bear daily interest at 0.04% and are repayable on demand.NOTE 10 – AMOUNTS DUE TO RELATED PARTIESAt December 31, 2017 and 2016, amounts due to related parties consisted of the following:December 31,December 31,Name of related party20172016Mr. Song Xuesong (“Mr. Song”) (1)$2,921,639$10,669,325C Media Limited (2)$$4,855,236Thumb Beijing Branch (3)$612,103$576,560Thumb Shenzhen Branch (3)$29,941$28,202(1) The Group’s CEO(2) C Media Limited, the parent company.(3) Thumb Beijing and Shenzhen Branch are controlled by the spouse of Mr. Song.Amounts due to related parties are shortterm in nature, noninterest bearing, unsecured and payable on demand.F20NOTE 11 – RETIREMENT AND WELFARE BENEFITSThe Group’s fulltime employees are entitled to staff welfare benefits including medical care, casualty, housing benefits, education benefits, unemployment insuranceand pension benefits through a PRC governmentmandated multiemployer defined contribution plan. The Group is required to accrue the employerportion forthese benefits based on certain percentages of the employees’ salaries. The total provision for such employee benefits of $170,227 and $353,033 during the yearsended December 31, 2017 and 2016, respectively, of which $23,392 and $30,455, respectively, was charged to cost of revenue, $48,957 and $97,408, respectively wascharged to selling and marketing expenses, $49,717 and $86,934, respectively, was charged to general and administrative expenses and $48,161 and $138,236,respectively was charged to research and development expenses. The Group is required to make contributions to the plan out of the amounts accrued for all staffwelfare benefits except for education benefits. The PRC government is responsible for the staff welfare benefits including medical care, casualty, housing benefits,unemployment insurance and pension benefits to be paid to these employees.NOTE 12 – STATUTORY RESERVESAs stipulated by the relevant law and regulations in the PRC, the Group’s subsidiaries and VIEs in the PRC are required to maintain a nondistributable statutorysurplus reserve. Appropriations to the statutory surplus reserve are required to be made at not less than 10% of profit after taxes as reported in the subsidiaries’statutory financial statements prepared under the PRC GAAP. Once appropriated, these amounts are not available for future distribution to owners or shareholders.Once the general reserve is accumulated to 50% of the subsidiaries’ registered capital, the subsidiaries can choose not to provide more reserves. The statutoryreserve may be applied against prior year losses, if any, and may be used for general business expansion and production and increase in registered capital of thesubsidiaries. The Group allocated $Nil to statutory reserves during the years ended December 31, 2017 and 2016, respectively. The statutory reserves cannot betransferred to the Company in the form of loans or advances and are not distributable as cash dividends except in the event of liquidation.NOTE 13 – COMMITMENTS AND CONTINGENCIESOperating leasesWe have entered into operating lease agreements primarily for our office spaces in China. These leases expire through 2018 and are renewable upon negotiation.Future minimum rental payment required under the Office Lease is as follows:Year ending December 31:Amount2018$122,138F21Contingencies(a) Litigation with Shanghai Fusheng Weier Intelligent Control Technology Co., Ltd.On January 22, 2016, Zhong Chuan Rui You and Shanghai Fusheng Weier Intelligent Control Technology Co., Ltd. (“Fusheng Weier”) signed a contract forequipment of $1,652,842 (RMB10,800,000). Since Zhong Chuan Rui You did not make the payments of $1,126,381 (RMB7,360,000) on the due dates, Fusheng Weierfiled a lawsuit against Zhong Chuan Rui You in Shanghai Xuhui District People’s Court on October 8, 2016. On March 9, 2017, Xuhui District People’s Court issuedthe verdict requiring Zhong Chuan Rui You to pay the overdue debts. In August 2017, C Media Limited made the payment of $512,075 (RMB3,346,000). Theremaining balance has been accrued in accounts payable. The payment schedule for the remaining balance is being negotiated by the two parties. On February 5,2018, a hearing was held adding Zhong Chuan Shi Xun as a defendant. The Group plans to settle the remaining balance within one year.(b) Lawsuit with Gansu Jinlun Culture Media Co., Ltd.On August 22, 2014, Zhong Chuan Rui You and Gansu Jinlun Culture Media Co., Ltd. (“Gansu Jinlun”) signed a “Lanzhou Railway Bureau Airconditioned Train WiFi Network System Advertising Operation Rights Agreement” for advertising on 72 trains of $1,467,880 (RMB9,604,633). Due to the dispute on the projectimplementation, Zhong Chuan Rui You did not pay the advertising fee. On August 23, 2017, Gansu Jinlun filed a lawsuit with Gansu Intermediate People’s Court. OnDecember 19, 2017, Gansu Intermediate People’s Court issued a verdict, ruling that Zhong Chuan Rui You settle the overdue advertising fee. Since only 18 out of 72trains have been installed with Wifi network system, Zhong Chuan Rui You disputed and appealed to the verdict. The next court trial date has not yet beendetermined.C Media and Gansu Jinlun are negotiating a potential settlement to resume the contract. According to the legal counsel, it is probable that the settlement will amountto approximately $459,000 (RMB3,000,000); therefore, this amount has been accrued in accounts payable.(c) Litigation with Shenzhen Hua Xun Fang Zhou Technology Co., Ltd.On June 16, 2015, Zhong Chuan Rui You signed a cooperation agreement with Shenzhen Hua Xun Fang Zhou Technology Co., Ltd. (“Shenzhen Hua Xun”) andXuesong Song, a major shareholder of C Media Limited. Pursuant to this agreement, Zhong Chuan Rui You procures equipment from Shenzhen Hua Xun. XuesongSong acts as a joint liability guarantor for the entire debts of Zhong Chuan Rui You under this agreement. As Zhong Chuan Rui You did not make the payments onthe due dates, Shenzhen Hua Xun filed a lawsuit with Shenzhen Baoan District People’s Court on May 31, 2016. On November 1, 2016, Zhong Chuan Rui You,Xuesong Song and Shenzhen Hua Xun reached a settlement in Shenzhen Baoan District People’s Court to settle $1,735,389 (RMB11,355,000) in four instalments. OnDecember 30, 2017, the debt was assigned to C Media Limited.NOTE 14 – SUBSEQUENT EVENTThe Group has evaluated all events or transactions that occurred after December 31, 2017 through May 25, 2018, which is the date that the financial statements wereavailable to be issued.F22EX1.1 2 f20f2017ex11_luokung.htm AMENDED AND RESTATED MEMORANDUM OF ASSOCIATION AND ARTICLES OF ASSOCIATION OF LUOKUNGTECHNOLOGY CORP., DATED AUGUST 20, 2018, AND AS CURRENTLY IN EFFECTExhibit 1.1BC NO: 1553620British Virgin IslandsThe BVI Business Companies Act, 2004(No. 16 of 2004)Memorandum of AssociationandArticles of AssociationofLuokung Technology Corp.Incorporated the 24th day of October, 2009Amended and Restated the 11th Day of December 2009Amended and Restated the 17th Day of December 2009Amended and Restated the 25th Day of March 2010Amended and Restated the 21st day of May 2018Amended and restated the 17 August 2018Amended and restated the 21 August 2018Portcullis (BVI) LimitedPortcullis Chambers4th Floor Ellen Skelton Building3076 Sir Francis Drake HighwayRoad Town, TortolaBritish Virgin IslandsTERRITORY OF THE BRITISH VIRGIN ISLANDSTHE BVI BUSINESS COMPANIES ACT, 2004(No. 16 of 2004)MEMORANDUM OF ASSOCIATIONOFLuokung Technology Corp.NAME1.The name of the Company is Luokung Technology Corp.TYPE OF COMPANY2.The Company is a company limited by shares.REGISTERED OFFICE3.The first Registered Office of the Company is the offices of Portcullis TrustNet (BVI) Limited, Portcullis TrustNet Chambers, P.O. Box 3444, Road Town,Tortola, British Virgin Islands, the office of the registered agent.3.1The current Registered Office of the Company is Portcullis Chambers, 4th Floor Ellen Skelton Building, 3076 SirFrancis Drake Highway, Road Town,Tortola, British Virgin Islands VG1110.REGISTERED AGENT4.The first Registered Agent of the Company is Portcullis TrustNet (BVI) Limited of Portcullis TrustNet Chambers, P.O. Box 3444, Road Town, Tortola,British Virgin Islands.4.1The current Registered Agent of the Company is Portcullis (BVI) Ltd of Portcullis Chambers, 4th Floor Ellen Skelton Building, 3076 Sir Francis DrakeHighway, Road Town, Tortola, British Virgin Islands VG1110.AUTHORISED NUMBER OF SHARES5.The Company is authorised to issue a maximum of 251,000,000 shares.CLASSES, NUMBER AND PAR VALUE OF SHARES6.As at the date of adoption of this memorandum, the Company is authorised to issue (a) 250,000,000 ordinary shares without par value (“OrdinaryShares”); and (b) 1,000,000 preferred shares without par value (“Preferred Shares”).FRACTIONAL SHARES7.The Company may issue fractions of a share and a fractional share shall have the same corresponding fractional liabilities, limitations, preferences,privileges, qualifications, restrictions, rights and other attributes of a whole share of the same class or series of shares.RIGHTS, PRIVILEGES, RESTRICTIONS AND CONDITIONS ATTACHING TO SHARES8.(1)Subject to the memorandum and articles of association (and, for greater clarity, without prejudice to any special rights conferred thereby on theholders of any other shares), an Ordinary Share of the Company confers on the holder;(a)the right to one vote at a meeting of the members of the Company or on any Resolution of Members;(b)the right to an equal share in any Distribution paid by the Company; and(c)the right to an equal share in the distribution of the surplus assets of the Company on a winding up.(2)Subject to the memorandum and articles of association (and, for greater clarity, without prejudice to any special rights conferred thereby on theholders of any other shares), a Preferred Share of the Company confers on the holder;(a)the right to 399 votes at a meeting of the members of the Company or on any Resolution of Members;(b)the right to an equal share in any Distribution paid by the Company;(c)the right to an equal share in the distribution of the surplus assets of the Company on its liquidation.(d)be freely transferable, in whole or in part, by Mr. Xuesong Song to any third party through one or more Private Transactions, subject toApplicable Law; and(e)be freely transferable, in whole or in part, by Mr. Xuesong Song to any third party through one or more Public Transactions, subject to ApplicableLaw and Automatic Conversion of such Preferred Share(s) into Ordinary Share(s).(3)The directors may at their discretion by resolution of directors redeem, purchase or otherwise acquire all or any of the shares in the Companysubject to the Articles..VARIATION OF CLASS RIGHTS9.If at any time the issued shares are divided into different classes or series of shares, the rights attached to any class or series (unless otherwise providedby the terms of issue of the shares of that class or series) may, whether or not the Company is being wound up, be varied with the consent in writing of theholders of not less than threefourths of the issued shares of that class or series and of the holders of not less than threefourths of the issued shares ofany other class or series of shares which may be affected by such variation.RIGHTS NOT VARIED BY THE ISSUE OF SHARES PARI PASSU10.The rights conferred upon the holders of the shares of any class issued with preferred or other rights shall not, unless otherwise expressly provided by theterms of issue of the shares of that class, be deemed to be varied by the creation or issue of further shares ranking pari passu therewith.CAPACITY AND POWERS11.Subject to the Act, any other British Virgin Islands legislation and paragraph 12 below the Company has, irrespective of corporate benefit:(a)full capacity to carry on or undertake any business or activity, do any act or enter into any transaction;(b)for the purposes of paragraph (a), full rights, powers and privileges; and(c)full powers to issue shares with preemptive rights, subject to the Articles.2LIMITATIONS ON THE COMPANY’S BUSINESS12.For the purposes of section 9(4) of the Act the Company may not;(a)carry on banking or trust business, unless it is licensed to do so under the Banks and Trust Companies Act, 1990;(b)carry on business as an insurance or reinsurance company, insurance agent or insurance broker, unless it is licensed under the Insurance Act1994;(c)carry on business of company management, unless it is licensed under the Company Management Act, 1990;(d)carry on the business of providing the registered office or the registered agent for companies incorporated in the British Virgin Islands;(e)carry on the business as a mutual fund, manager of mutual funds or administrator of mutual funds unless it is recognized or licenced as the casemay be under the Mutual Funds Act 1996; or(f)carry on any other business that gives rise to a licencing requirement under any law for the time being in force in the British Virgin Islands unlessit is licenced, regulated, recognised or otherwise approved pursuant to such law.REGISTERED SHARES AND PROHIBITION ON ISSUE OF BEARER SHARES13.Shares in the Company may only be issued as registered shares. The issue of shares to bearer is prohibited.PROHIBITION ON EXCHANGE AND CONVERSION OF REGISTERED SHARES TO BEARER SHARES14.The exchange or conversion of registered shares to bearer shares is prohibited.TRANSFER OF REGISTERED SHARES15.Subject to the provisions of the Articles the Company may upon receipt of an instrument of transfer enter the name of the transferee in the register ofmembers subject to the prior or simultaneous approval of the Company as evidenced by a resolution of directors or by a resolution of members. Subject toany resolution of the members to the contrary, the directors may resolve by resolution of directors to refuse or delay the registration of the transfer forreasons that shall be specified in the resolution of directors.AMENDMENT OF MEMORANDUM AND ARTICLES OF ASSOCIATION16.1The Company may amend its Memorandum or Articles by a resolution of members or by a resolution of directors provided that the directors shall not havethe power to amend the Memorandum or Articles;(a)to restrict the rights or powers of the members to amend the Memorandum or Articles;(b)to change the percentage of members required to pass a resolution to amend the Memorandum or Articles;(c)in circumstances where the Memorandum or Articles cannot be amended by the members; or(d)to Clauses 8, 9, 10 or this Clause 12.16.2No amendment may be made to Regulation 76 of the Articles unless approved by an affirmative vote of the holders of 66 2/3 percent or more of theoutstanding votes of the shares entitled to vote thereon.3DEFINITIONS17.The meanings of words in this Memorandum are as defined in the Articles.We, Portcullis TrustNet (BVI) Limited of Portcullis TrustNet Chambers, P.O. Box 3444, Road Town, Tortola, British Virgin Islands for the purpose ofincorporating a BVI Business Company under the laws of the British Virgin Islands hereby sign this Memorandum of Association the 27th day of October,2009.Incorporator/s/ Nicole WheatleyPortcullis TrustNet (BVI) LimitedPortcullis TrustNet ChambersP.O. Box 3444Road Town, TortolaBritish Virgin Islands(Sgd. Nicole Wheatley)4TERRITORY OF THE BRITISH VIRGIN ISLANDSTHE BVI BUSINESS COMPANIES ACT, 2004(No. 16 of 2004)ARTICLES OF ASSOCIATIONOFLuokung Technology Corp.PRELIMINARY1.In these Articles, if not inconsistent with the subject or context, the words and expressions standing in the first column of the following table shall bear themeanings set opposite them respectively in the second column thereof.WordsMeaningApplicable Lawall Laws, including those of a jurisdiction in or outside of the United States, applicable to the Private orPublic Transactions.Actthe BVI Business Companies Act, 2004 (No 16 of 2004.) including any modification, extension, reenactment or renewal thereof and any regulations made thereunder.Articlesthese Articles of Association as originally framed or as from time to time amended.Automatic Conversioneach Preferred Share shall be automatically converted at any time after issue and without the payment ofany additional sum into an equal number of fully paid Ordinary Shares upon the conclusion of anytransfer by Mr. Xuesong Song to any third party through one or more Public Transactions.Designated Stock Exchangeeither the Nasdaq National Stock Market, Inc. or such other exchange or quotation bureau on which, theCompany’s Securities are listed or traded; provided that until the Securities are listed on any such“Exchange” the rules of any such Designated Stock Exchange shall be inapplicable to these Articles.directora director of the Company.distributionin relation to a distribution by a company to a member, means(i)the direct or indirect transfer of an asset, other than the Company’s own shares, to or forthe benefit of the member or(ii)the incurring of a debt to or for the benefit of a member,in relation to shares held by a member, and whether by means of a purchase of an asset, the purchase,redemption or other acquisition of shares, a transfer of indebtedness or otherwise, and includes adividend.Independent Directora person who meets the then current requirements for “independence” of the applicable rules andregulations of the U.S. Securities and Exchange Commission and the Designated Stock Exchange.5member or shareholderin relation to the Company, means a person whose name is entered in the register of members as theholder of one or more shares, or fractional shares, in the Company.Memorandumthe Memorandum of Association of the Company as originally framed or as from time to time amended.Mr. Xuesong Songthe founder, a director and Chairman of LK Technology Ltd.Ordinary Sharesissued or unissued ordinary shares of no par value of the Company having the rights, preferences andprivileges set out in the MemorandumPersonAn individual, a corporation, a trust, trustee, the estate of a deceased individual, a partnership or anunincorporated association of persons.Preferred Sharesissued or unissued preferred shares of no par value of the Company having the rights, preferences andprivileges set out in the MemorandumPrivate Transactionstransactions that are not considered as a Public Transaction.Public Transactionstransactions through any national securities exchanges and/or through the automated quotation systemincluding but not limited to NASDAQ, NYSE (including NYSE American) or OTC Markets, or anytransaction executed by the broker or with a market maker.Related Party(a) any director, officer and employee of the Company; (b) any family member of such director, officer andemployee; and (c) any entity (e.g. a corporation, partnership, or trust) controlled by or set up for thebenefit of a director, officer or employee, or a family member of such director, officer or employee.Relevant SystemA facility for the electronic transfer of uncertificated securities administered by The Depository TrustCompany or such other Person regulated by the SEC.resolution of directors(a)A resolution approved at a duly convened and constituted meeting of directors of the Companyor of a committee of directors of the Company by the affirmative vote of a simple majority of thedirectors present at the meeting who voted and did not abstain; or(b)a resolution consented to in writing by a simple majority of the directors or of all members of thecommittee, as the case may be;except that where a director is given more than one vote, he shall be counted by the number ofvotes he casts for the purpose of establishing a majority.resolution of membersSubject to the provisions of the Memorandum and Articles means:(a)A resolution approved at a duly convened and constituted meeting of the members of theCompany by the affirmative vote of(i)a majority of in excess of 50% of the votes of the shares entitled to vote and voting onthe resolution, or(ii)a majority of in excess of 50% of the votes of each class or series of shares entitled tovote as a class or series and voting on the resolution and a majority of in excess of 50%of the votes of the remaining shares entitled to vote and voting on the resolution; or6(b)a resolution consented to in writing by(i)an absolute majority of the votes of shares entitled to vote thereon, or(ii)an absolute majority of the votes of each class or series of shares entitled to votethereon as a class or series and of an absolute majority of the votes of the remainingshares entitled to vote thereon.SealAny Seal which has been duly adopted as the common seal of the Company.SECThe United States Securities and Exchange Commission.Securitiesshares and debt obligations of every kind, and options, warrants and rights to acquire shares, or debtobligations.SharesOrdinary Shares and/or Preferred Shares, as the case may be.solvency testa company satisfies the solvency test if;(i)the value of the company’s assets exceeds its liabilities, and(ii)the company is able to pay its debts as they fall due.treasury sharesshares in the Company that were previously issued but were repurchased, redeemed or otherwiseacquired by the Company and not cancelled.2.“Written” or any term of like import includes words typewritten, printed, painted, engraved, lithographed, photographed or represented or reproduced byany mode of reproducing words in a visible form, including telex, facsimile, telegram, cable or other form of writing produced by electronic communication.3.Save as aforesaid any words or expressions defined in the Act shall bear the same meaning in these Articles.4.Whenever the singular or plural number, or the masculine, feminine or neuter gender is used in these Articles, it shall equally, where the context admits,include the others.5.A reference in these Articles to voting in relation to shares shall be construed as a reference to voting by members holding the shares except that it is thevotes allocated to the shares that shall be counted and not the number of members who actually voted and a reference to shares being present at a meetingshall be given a corresponding construction.6.A reference to money in these Articles is, unless otherwise stated, a reference to the currency in which shares in the Company shall be issued according tothe provisions of the Memorandum.7REGISTERED SHARES7.Every member holding registered shares in the Company shall be entitled to a certificate signed by a director or officer of the Company or such otherperson who may be authorised from time to time by resolution of directors or under the Seal, with or without the signature of any director of the Company,specifying the share or shares held by him and the signature of the director or officer or person so authorised and the Seal may be facsimiles.8.Any member receiving a share certificate for registered shares shall indemnify and hold the Company and its directors and officers harmless from any lossor liability which it or they may incur by reason of any wrongful or fraudulent use or representation made by any person by virtue of the possessionthereof. If a share certificate for registered shares is worn out or lost it may be renewed on production of the worn out certificate or on satisfactory proof ofits loss together with such indemnity as may be required by a resolution of directors.9.If several persons are registered as joint holders of any shares, any one of such persons may give an effectual receipt for any distribution payable inrespect of such shares.10.Nothing in these Articles shall require title to any shares or other Securities to be evidenced by a certificate if the Act and the rules of the Designated StockExchange permit otherwise.SHARES AND ISSUED SHARES11.Subject to the provisions of these Articles and, if applicable, the rules of the Designated Stock Exchange, and any resolution of members, the directors ofthe Company may, without limiting or affecting any rights previously conferred on the holders of any existing shares or class or series of shares, offer, allot,grant options over or otherwise dispose of shares to such persons, at such times and upon such terms and conditions as the Company may by resolutionof directors determine. The directors shall not issue more shares than the maximum number provided for in the Memorandum.12.The Company may issue fully paid, partly paid or nil paid shares as well as bonus shares. A partly paid or nil paid share or a share issued for a promissorynote or other written obligation for payment of a debt may be issued subject to forfeiture in the manner prescribed in these Articles.13.Shares in the Company may be issued for consideration in any form, including money, a promissory note or other obligation to contribute money orproperty, real property, personal property (including goodwill and knowhow) services rendered or a contract for future services and the amount of suchconsideration shall be determined by resolution of directors, except that in the case of shares with par value, the amount shall not be less than the parvalue, and in the absence of fraud the decision of the directors as to the value of the consideration received by the Company in respect of the issue isconclusive unless a question of law is involved.14.Before issuing shares for a consideration other than money, the directors shall pass a resolution stating;(a)the amount to be credited for the issue of the shares;(b)their determination of the reasonable present cash value of the nonmoney consideration for the issue; and(c)that, in their opinion, the present cash value of the nonmoney consideration for the issue is not less than the amount to be credited for the issueof the shares.15.A share issued by the Company upon conversion of, or in exchange for, another share or a debt obligation or other security in the Company, shall betreated for all purposes as having been issued for money equal to the consideration received or deemed to have been received by the Company in respectof the other share, debt obligation or security.16.Treasury shares may be disposed of by the Company on such terms and conditions (not otherwise inconsistent with these Articles) as the Company mayby resolution of directors determine.17.Subject to these Articles, the Company may purchase, redeem or otherwise acquire and hold its own shares save that the Company may not purchase,redeem or otherwise acquire its own shares without the consent of the member whose shares are to be purchased, redeemed or otherwise acquired unlessthe Company is permitted by the Act or any other provision in the Memorandum or Articles to purchase, redeem or otherwise acquire the shares withouttheir consent.818.No purchase, redemption or other acquisition of shares shall be made unless the directors determine by resolution of the directors that immediately after thepurchase, redemption or other acquisition the value of the Company’s assets will exceed its liabilities and the Company will be able to pay its debts as theyfall due.19.Sections 60 (Process for acquisition of own shares), 61 (Offer to one or more shareholders) and 62 (Shares redeemed otherwise than at the option ofcompany) of the Act shall not apply to the Company.20.A determination by the directors under Article 18 is not required;(a)the Company redeems a share or shares pursuant to a right of a member to have his shares redeemed or to have his shares exchanged for moneyor other property of the Company; or(b)by virtue of the provisions of Section 179 of the Act.21.Shares that the Company purchases, redeems or otherwise acquires pursuant to Article 17 may be cancelled or held as treasury shares except to the extentthat such shares are in excess of 80 percent of the issued shares of the Company in which case they shall be cancelled but they shall be available forreissue.22.Shares in the Company shall only be held as treasury shares where the directors of the Company resolve as such and the number of shares acquired, whenaggregated with shares of the same class already held by the Company as treasury shares, does not exceed 50% of the shares of that class previouslyissued by the Company, excluding shares that have been cancelled. All rights and obligations attaching to a treasury share are suspended and shall not beexercised by or against the Company while it holds the share as a treasury share. Treasury shares may be reissued by the Company as new shares.23.The Company shall keep a register of members containing;(a)the names and addresses of the persons who hold registered shares in the Company;(b)the number of each class and series of registered shares held by each member;(c)the date on which the name of each member was entered in the register of members;(d)the date on which any person ceased to be a member; and(e)such other information as may be prescribed pursuant to the Act.24.The register of members may be in any such form as the directors may approve but if it is in magnetic, electronic or other data storage form, the companymust be able to produce legible evidence of its contents.25.The original or a copy of the register of members shall be kept at the registered office of the Company or at the office of the registered agent of theCompany.26.A share is deemed to be issued when the name of the member is entered in the register of members.27.Subject to the Act and the rules of the Designated Stock Exchange, the board of directors without further consultation with the holders of any shares orSecurities may resolve that any class or series of shares or other Securities from time to time in issue or to be issued (including shares in issue at the date ofthe adoption of these Articles) may be issued, held, registered and converted to uncertificated form.28.Conversion of shares held in certificated form into shares held in uncertificated form, and vice versa, may be made in such manner as the board of directors,in its absolute discretion, may think fit. The Company or any duly authorised transfer agent (a “Transfer Agent”) shall enter on the register of membershow many shares are held by each member in uncertificated form and in certificated form and shall maintain the register of members. Notwithstanding anyprovision of these Articles, a class or series of shares shall not be treated as two classes by virtue only of that class or series comprising both certificatedshares and uncertificated Shares or as a result of any provision of these Articles which apply only in respect of certificated or uncertificated shares.9MORTGAGES AND CHARGES OF REGISTERED SHARES29.Members may mortgage or charge their registered shares in the Company with such mortgage or charge being evidenced in writing and signed by, or withthe authority of the registered holder of a registered share to which the mortgage or charge relates. The Company shall give effect to the terms of any validmortgage or charge except insofar as it may conflict with any requirements herein contained for consent to the transfer of shares.30.In the case of the mortgage or charge of registered shares there may be entered in the share register of the Company at the request of the registered holderof such shares(a)a statement that the shares are mortgaged or charged;(b)the name of the mortgagee or chargee; and(c)the date on which the aforesaid particulars are entered in the share register.31.Where particulars of a mortgage or charge are entered in the register of members, such particulars shall be cancelled(a)with the written consent of the named mortgagee or chargee or anyone authorized to act on his behalf; or(b)upon evidence satisfactory to the directors of the discharge of the liability secured by the mortgage or charge and the issue of such indemnities asthe directors shall consider necessary or desirable.32.Whilst particulars of a mortgage or charge over registered shares are entered in the register of members pursuant to the preceding articles no transfer ofany share comprised therein shall be effected without the written consent of the named mortgagee or chargee or anyone authorized to act on his behalf.FORFEITURE33.When shares not fully paid on issue or issued for a promissory note or other written obligation for payment of a debt have been issued subject toforfeiture, the following provisions shall apply.34.Written notice specifying a date for payment to be made and the shares in respect of which payment is to be made shall be served on the member whodefaults in making payment pursuant to a promissory note or other written obligations to pay a debt.35.The written notice specifying a date for payment shall(a)name a further date not earlier than the expiration of 14 days from the date of service of the notice on or before which payment required by thenotice is to be made; and(b)contain a statement that in the event of nonpayment at or before the time named in the notice the shares, or any of them, in respect of whichpayment is not made will be liable to be forfeited.36.Where a written notice has been issued and the requirements of the notice have not been complied with within the prescribed time, the directors may at anytime before tender of payment forfeit and cancel the shares to which the notice relates.37.The Company is under no obligation to refund any moneys to the member whose shares have been forfeited and cancelled pursuant to these provisions.Upon forfeiture and cancellation of the shares the member is discharged from any further obligation to the Company with respect to the shares forfeitedand cancelled.10LIEN38.The Company shall have a first and paramount lien on every share issued for a promissory note or for any other binding obligation to contribute money orproperty or any combination thereof to the Company, and the Company shall also have a first and paramount lien on every share standing registered in thename of a member, whether singly or jointly with any other person or persons, for all the debts and liabilities of such member or his estate to the Company,whether the same shall have been incurred before or after notice to the Company of any interest of any person other than such member, and whether thetime for the payment or discharge of the same shall have actually arrived or not, and notwithstanding that the same are joint debts or liabilities of suchmember or his estate and any other person, whether a member of the Company or not. The Company’s lien on a share shall extend to all distributionspayable thereon. The directors may at any time either generally, or in any particular case, waive any lien that has arisen or declare any share to be wholly orin part exempt from the provisions of this Article.39.In the absence of express provisions regarding sale in the promissory note or other binding obligation to contribute money or property, the Company maysell, in such manner as the directors may by resolution of directors determine, any share on which the Company has a lien, but no sale shall be made unlesssome sum in respect of which the lien exists is presently payable nor until the expiration of twentyone days after a notice in writing, stating and demandingpayment of the sum presently payable and giving notice of the intention to sell in default of such payment, has been served on the holder for the timebeing of the share.40.The net proceeds of the sale by the Company of any shares on which it has a lien shall be applied in or towards payment of discharge of the promissorynote or other binding obligation to contribute money or property or any combination thereof in respect of which the lien exists so far as the same ispresently payable and any residue shall (subject to a like lien for debts or liabilities not presently payable as existed upon the share prior to the sale) bepaid to the holder of the share immediately before such sale. For giving effect to any such sale the directors may authorize some person to transfer theshare sold to the purchaser thereof. The purchaser shall be registered as the holder of the share and he shall not be bound to see to the application of thepurchase money, nor shall his title to the share be affected by any irregularity or invalidity in the proceedings in reference to the sale.TRANSFER OF SHARES41.Registered shares in the Company are transferred by a written instrument of transfer signed by the transferor and containing the name and address of thetransferee. The instrument of transfer shall be signed by the transferee if registration as a holder of the share shall impose a liability to the Company on thetransferee. The instrument of transfer of a registered share shall be sent to the Company for registration.42.The board of directors may resolve that interests in shares in the form of depositary receipts may be transferred or otherwise dealt with in accordance withthe regulations and practices instituted by the operator of the Relevant System and any holder of interests in shares shall be entitled to transfer suchinterests by means of such Relevant System and the operator of the Relevant System shall act as agent of the holders of such interests for the purposes ofthe transfer of those interests.43.The register of members may be closed at such times and for such periods as the board of directors may from time to time determine, upon notice beinggiven by advertisement in such newspapers as may be required by the Act and the practice of the Designated Stock Exchange.44.The transfer of a registered share is effective when the name of the transferee is entered on the register of members.45.If the directors of the Company are satisfied that an instrument of transfer relating to shares has been signed but that the instrument has been lost ordestroyed, they may resolve;(a)to accept such evidence of the transfer of the shares as they consider appropriate; and(b)that the transferee’s name should be entered in the register of members notwithstanding the absence of the instrument of transfer.46.The Company must on the receipt of an instrument of transfer from the transferor or transferee of a registered share in the Company enter the name of thetransferee of the share in the register or members unless the directors, if permitted by the Memorandum or these Articles, resolve by resolution of directorsto refuse or delay the registration of the transfer for reasons that shall be specified in the resolution of directors.11TRANSMISSION OF SHARES47.The personal representative of a deceased member may transfer a share even though the personal representative is not a member at the time of the transfer.48.The personal representative, executor or administrator of a deceased member, the guardian of an incompetent member or the trustee of a bankrupt membershall be the only person recognized by the Company as having any title to his share but they shall not be entitled to exercise any rights as a member of theCompany until they have proceeded as set forth in the next following three Articles.49.The production to the Company of any document which is evidence of probate of the will, or letters of administration of the estate, or confirmation asexecutor, of a deceased member or of the appointment of a guardian of an incompetent member or the trustee of a bankrupt member shall be accepted by theCompany even if the deceased, incompetent or bankrupt member is domiciled outside the British Virgin Islands if the document evidencing the grant ofprobate or letters of administration, confirmation as executor, appointment as guardian or trustee in bankruptcy is issued by a foreign court which hadcompetent jurisdiction in the matter. For the purpose of establishing whether or not a foreign court had competent jurisdiction in such a matter the directorsmay obtain appropriate legal advice. The directors may also require an indemnity to be given by the executor, administrator, guardian or trustee inbankruptcy.50.The Company may enter in the register of members the name of any person becoming entitled by operation of law or otherwise to a share or shares inconsequence of the death, incompetence or bankruptcy upon such evidence being produced as may reasonably be required by the directors.51.Any person who has become entitled to a share or shares in consequence of the death, incompetence or bankruptcy of any member may, instead of beingregistered himself, request in writing that some person to be named by him be registered as the transferee of such share or shares and such request shalllikewise be treated as if it were a transfer.52.What amounts to incompetence on the part of a person is a matter to be determined by the court having regard to all the relevant evidence and thecircumstances of the case.REDUCTION OR INCREASE IN AUTHORISED AND UNISSUED SHARES48.The Company may amend the Memorandum to increase or reduce the maximum number of shares the Company is authorised to issue and may in respect ofany unissued shares increase or reduce the number of such shares, or effect any combination of the foregoing.49.The Company may(1)(a) divide its shares, including issued shares, into a larger number of shares; or (b) combine its shares, including issued shares, into a smallernumber of shares.(2)A division or combination of shares, including issued shares, of a class or series shall be for a larger or smaller number, as the case may be, ofshares in the same class or series.(3)A company shall not divide its shares under subsection (1)(a) or (2) if it would cause the maximum number of shares that the Company isauthorised to issue by its memorandum to be exceeded.(4)Where shares are divided or combined under this article, the aggregate par value of the new shares must be equal to the aggregate par value of theoriginal shares.MEETINGS AND CONSENTS OF MEMBERS50.The directors of the Company may convene meetings of the members of the Company at such times and in such manner and places within or outside theBritish Virgin Islands as the directors consider necessary or desirable. The Company may hold an annual general meeting, but shall not (unless required bythe applicable rules of the Designated Stock Exchange for so long as the Company’s Securities are listed or traded on the Designated Stock Exchange) beobliged to hold an annual general meeting.51.Upon the written request of members holding 30 percent or more of the outstanding voting shares in the Company the directors shall convene a meeting ofmembers.1252.The directors shall give not less than 7 days notice of meetings of members to those persons whose names on the date the notice is given appear asmembers in the share register of the Company and are entitled to vote at the meeting.53.The directors may fix the date notice is given of a meeting of members as the record date for determining those shares that are entitled to vote at themeeting.54.A meeting of members may be called on short notice:(a)if members holding not less than 90 percent of the total number of shares entitled to vote on all matters to be considered at the meeting, or 90percent of the votes of each class or series of shares where members are entitled to vote thereon as a class or series together with not less than a90 percent majority of the remaining votes, have agreed to short notice of the meeting, or(b)if all members holding shares entitled to vote on all or any matters to be considered at the meeting have waived notice of the meeting and for thispurpose presence at the meeting shall be deemed to constitute waiver.55.The inadvertent failure of the directors to give notice of a meeting to a member, or the fact that a member has not received notice, does not invalidate themeeting.56.A member may be represented at a meeting of members by a proxy who may speak and vote on behalf of the member.57.The instrument appointing a proxy shall be produced at the place appointed for the meeting before the time for holding the meeting at which the personnamed in such instrument proposes to vote.58.An instrument appointing a proxy shall be in substantially the following form or such other form as the Chairman of the meeting shall accept as properlyevidencing the wishes of the member appointing the proxy.(Name of Company)I/Webeing a member of the aboveCompany withshares HEREBY APPOINTofor failing himofto be my/our proxy to vote for me/us at the meeting of members to be held on the dayofand at any adjournment thereof.(Any restrictions on voting to be inserted here.)Signed this day ofMember59.The following shall apply in respect of joint ownership of shares:a.if two or more persons hold shares jointly each of them may be present in person or by proxy at a meeting of members and may speak as a member;b.if only one of the joint owners is present in person or by proxy he may vote on behalf of all joint owners, andc.if two or more of the joint owners are present in person or by proxy they must vote as one.60.A member shall be deemed to be present at a meeting of members if he participates by telephone or other electronic means and all members participating inthe meeting are able to hear each other.61.A meeting of members is duly constituted if, at the commencement of the meeting, there are present in person or by proxy not less than 50 percent of thevotes of the shares or class or series of shares entitled to vote on resolutions of members to be considered at the meeting. If a quorum be present,notwithstanding the fact that such quorum may be represented by only one person then such person may resolve any matter and a certificate signed bysuch person accompanied where such person be a proxy by a copy of the proxy form shall constitute a valid resolution of members.1362.If within two hours from the time appointed for the meeting a quorum is not present, the meeting, if convened upon the requisition of members, shall bedissolved; in any other case it shall stand adjourned to the next business day at the same time and place or to such other time and place as the directorsmay determine, and if at the adjourned meeting there are present within one hour from the time appointed for the meeting in person or by proxy not lessthan one third of the votes of the shares or each class or series of shares entitled to vote on the resolutions to be considered by the meeting, those presentshall constitute a quorum but otherwise the meeting shall be dissolved.63.At every meeting of members, the Chairman of the Board of Directors shall preside as chairman of the meeting. If there is no Chairman of the Board ofDirectors or if the Chairman of the Board of Directors is not present at the meeting, the members present shall choose some one of their number to be thechairman. If the members are unable to choose a chairman for any reason, then the person representing the greatest number of voting shares present inperson or by prescribed form of proxy at the meeting shall preside as chairman failing which the oldest individual member or representative of a memberpresent shall take the chair.64.The chairman may, with the consent of the meeting, adjourn any meeting from time to time, and from place to place, but no business shall be transacted atany adjourned meeting other than the business left unfinished at the meeting from which the adjournment took place.65.At any meeting of the members the chairman shall be responsible for deciding in such manner as he shall consider appropriate whether any resolution hasbeen carried or not and the result of his decision shall be announced to the meeting and recorded in the minutes thereof. If the chairman shall have anydoubt as to the outcome of any resolution put to the vote, he shall cause a poll to be taken of all votes cast upon such resolution, but if the chairman shallfail to take a poll then any member present in person or by proxy who disputes the announcement by the chairman of the result of any vote mayimmediately following such announcement demand that a poll be taken and the chairman shall thereupon cause a poll to be taken. If a poll is taken at anymeeting, the result thereof shall be duly recorded in the minutes of that meeting by the chairman.66.Any person other than an individual shall be regarded as one member and subject to the specific provisions hereinafter contained for the appointment ofrepresentatives of such persons the right of any individual to speak for or represent such member shall be determined by the law of the jurisdiction where,and by the documents by which, the person is constituted or derives its existence. In case of doubt, the directors may in good faith seek legal advice fromany qualified person and unless and until a court of competent jurisdiction shall otherwise rule, the directors may rely and act upon such advice withoutincurring any liability to any member.67.Any person other than an individual which is a member of the Company may by resolution of its directors or other governing body authorize such personas it thinks fit to act as its representative at any meeting of the Company or of any class of members of the Company, and the person so authorized shall beentitled to exercise the same powers on behalf of the person which he represents as that person could exercise if it were an individual member of theCompany.68.The chairman of any meeting at which a vote is cast by proxy or on behalf of any person other than an individual may call for a notarially certified copy ofsuch proxy or authority which shall be produced within 7 days of being so requested or the votes cast by such proxy or on behalf of such person shall bedisregarded.69.Directors of the Company may attend and speak at any meeting of members of the Company and at any separate meeting of the holders of any class orseries of shares in the Company.70.An action that may be taken by the members at a meeting may also be taken by a resolution of members consented to in writing or by telex, telegram, cable,facsimile or other written electronic communication, without the need for any notice, but if any resolution of members is adopted otherwise than by theunanimous written consent of all members, a copy of such resolution shall forthwith be sent to all members not consenting to such resolution. The consentmay be in the form of counterparts, each counterpart being signed by one or more members.14DIRECTORS71.The first directors of the Company shall be appointed by the first registered agent of the Company and thereafter the directors shall be appointed byresolution of members, subject to Article 78, for such term as the members determine. A person shall not be appointed as a director unless he hasconsented in writing to be a director.72.The minimum number of directors shall be one and the maximum number shall be 20. Unless otherwise determined by the Company in a meeting ofshareholders and subject to the requirements of the Memorandum, the directors may by a Resolution of Directors, amend this Regulation 72 to change thenumber of directors. For as long as Securities of the Company are listed or traded on the Designated Stock Exchange, the directors shall include suchnumber of Independent Directors as applicable law, rules or regulations of the Designated Stock Exchange may require for a foreign private issuer as longas the Company is a foreign private issuer.73.Each director shall hold office for the term, if any, fixed by resolution of members or until his earlier death, resignation or removal.74.Where the Company has only one member who is an individual and that member is also the sole director of the Company, that sole member/director may, byinstrument in writing, nominate a person who is not disqualified from being a director of the Company under section 111(1) of the Act as a reserve directorof the Company to act in the place of the sole director in the event of his death.75.The nomination of a person as a reserve director of the Company ceases to have effect if;a.before the death of the sole member/director who nominated him;(i)he resigns as reserve director, or(ii)the sole member/director revokes the nomination in writing; orb.the sole member/director who nominated him ceases to be the sole member/director of the Company for any reason other than his death.76.A director may be removed from office, with or without cause, by a resolution of directors or a resolution of members. For the purposes of this Regulation76, “cause” means the willful and continuous failure by a director to substantially perform his duties to the Company (other than any such failure resultingfrom incapacity due to physical or mental illness) or the willful engaging by the director in gross misconduct materially and demonstrably injurious to theCompany. If a director is removed from office without cause by a resolution of the members, for the purposes of this Regulation, the resolution of memberswill require the affirmative vote of the holders of 66 2/3 percent or more of the outstanding votes of the shares entitled to vote thereon.77.A director may resign his office by giving written notice of his resignation to the Company and the resignation shall have effect from the date the notice isreceived by the Company or from such later date as may be specified in the notice. A director of the Company shall resign forthwith if he is, or becomes,disqualified to act as a director under the Act.78.The directors may at any time by resolution of directors appoint any person to be a director to fill a vacancy. There is a vacancy if a director dies orotherwise ceases to hold office as a director prior to the expiration of his term of office, where his term of office was fixed upon his appointment. Thedirectors may not appoint a director to fill a vacancy for a term exceeding the term that remained when the person who has ceased to be a director left orotherwise ceased to hold office.79.The Company shall keep a register of directors containing:a.the names and addresses of the persons who are directors of the Company or who have been nominated as reserve directors of the Company;b.the date on which each person whose name is entered in the register was appointed as a director of the Company or nominated as a reservedirector of the Company;c.the date on which each person named as a director ceased to be a director of the Company;d.the date on which the nomination of any person nominated as a reserve director ceased to have effect; ande.such other information as may be prescribed pursuant to the Act.1580.The original or a copy of any register of directors shall be kept at the office of the registered agent of the Company.81.The register of directors may be in any such form as the directors may approve but if it is in magnetic, electronic or other data storage form, the companymust be able to produce legible evidence of its contents.82.With the prior or subsequent approval by a resolution of members, the directors may, by a resolution of directors, fix the emoluments of directors withrespect to services to be rendered in any capacity to the Company.83.A director shall not require a share qualification and may be an individual or a company.POWERS OF DIRECTORS84.The business and affairs of the Company shall be managed by the directors who may pay all expenses incurred preliminary to and in connection with theformation and registration of the Company and may exercise all such powers of the Company as are not by the Act or by the Memorandum or theseArticles required to be exercised by the members of the Company, subject to any delegation of such powers as may be authorized by these Articles and tosuch requirements as may be prescribed by a resolution of members; but no requirement made by a resolution of members shall prevail if it be inconsistentwith these Articles nor shall such requirement invalidate any prior act of the directors which would have been valid if such requirement had not been made.Notwithstanding anything in Section 175 of the Act the directors shall have the power to sell, transfer, lease, exchange or otherwise dispose of more thanfifty percent of the assets of the Company without submitting a proposal to or obtaining the consent of the members of the Company.85.If the Company is a whollyowned subsidiary of a holding company a director may when exercising powers or performing duties as a director act in amanner which he believes is in the best interests of the holding company even though it may not be in the best interests of the Company.86.The directors may, by a resolution of directors, appoint any person, including a person who is a director, to be an officer or agent of the Company. Theresolution of directors appointing an agent may authorize the agent to appoint one or more substitutes or delegates to exercise some or all of the powersconferred on the agent by the Company.87.Every officer or agent of the Company has such powers and authority of the directors, including the power and authority to affix the Seal, as are set forth inthese Articles or in the resolution of directors appointing the officer or agent, except that no agent has any power or authority with respect to thefollowing;a.to amend the memorandum or articles;b.to change the registered office or agent;c.to designate committees of directors;d.to delegate powers to a committee of directors;e.to appoint or remove directors;f.to appoint or remove an agent;g.to fix emoluments of directors;h.to approve a plan of merger, consolidation or arrangement;i.to make a declaration of solvency for the purposes of section 198(1)(a) of the Act or to approve a liquidation plan;j.to make a determination under section 57(1) of the Act that the company will, immediately after a proposed distribution, satisfy the solvency test;ork.to authorise the Company to continue as a company incorporated under the laws of a jurisdiction outside the British Virgin Islands.1688.Any director which is a body corporate may appoint any person its duly authorized representative for the purpose of representing it at meetings of theBoard of Directors or with respect to unanimous written consents.89.The continuing directors may act notwithstanding any vacancy in their body, save that if their number is reduced to their knowledge below the numberfixed by or pursuant to these Articles as the necessary quorum for a meeting of directors, the continuing directors or director may act only for the purposeof appointing directors to fill any vacancy that has arisen or for summoning a meeting of members.90.The directors may by resolution of directors exercise all the powers of the Company to borrow money and to mortgage or charge its undertakings andproperty or any part thereof, to issue debentures, debenture stock and other securities whenever money is borrowed or as security for any debt, liability orobligation of the Company or of any third party.91.All cheques, promissory notes, drafts, bills of exchange and other negotiable instruments and all receipts for moneys paid to the Company, shall be signed,drawn, accepted, endorsed or otherwise executed, as the case may be, in such manner as shall from time to time be determined by resolution of directors.92.The Company shall keep a register of all relevant charges created by the Company showing:a.if the charge is a charge created by the Company, the date of its creation or if the charge is existing on property acquired by the Company, the dateon which the property was acquired;b.a short description of the liability secured by the charge;c.a short description of the property charged;d.the name and address of the trustee for the security, or if there is no such trustee the name and address of the chargee;e.unless the charge is a security to bearer, the name and address of the holder of the charge;f.details of any prohibition or restriction , if any, contained in the instrument creating the charge on the power of the company to create any futurecharge ranking in priority to or equally with the charge; andg.such other information as may be prescribed pursuant to the Act.93.The original or a copy of the register of charges shall be kept at the registered office of the Company or at the office of the registered agent of the Company.PROCEEDINGS OF DIRECTORS94.The directors of the Company or any committee thereof may meet at such times and in such manner and places within or outside the British Virgin Islandsas the directors may determine to be necessary or desirable. Any one or more directors may convene a meeting of directors.95.A director shall be deemed to be present at a meeting of directors if he participates by telephone or other electronic means and all directors participating inthe meeting are able to hear each other.96.A director shall be given not less than 3 days notice of meetings of directors, but a meeting of directors held without 3 days notice having been given to alldirectors shall be valid if all the directors entitled to vote at the meeting who do not attend, waive notice of the meeting and for this purpose, the presenceof a director at a meeting shall constitute waiver on his part. The inadvertent failure to give notice of a meeting to a director, or the fact that a director hasnot received the notice, does not invalidate the meeting.1797.A director may by a written instrument appoint an alternate who need not be a director and an alternate is entitled to attend meetings in the absence of thedirector who appointed him and to vote or consent in place of the director.98.A meeting of directors is duly constituted for all purposes if at the commencement of the meeting there are present in person or by alternate not less thanone half of the total number of directors, unless there are only 2 directors in which case the quorum shall be 2.99.If the Company shall have only one director the provisions herein contained for meetings of the directors shall not apply but such sole director shall havefull power to represent and act for the Company in all matters as are not by the Act or the Memorandum or these Articles required to be exercised by themembers of the Company and in lieu of minutes of a meeting shall record in writing and sign a note or memorandum of all matters requiring a resolution ofdirectors. Such a note or memorandum shall constitute sufficient evidence of such resolution for all purposes.100.At every meeting of the directors the Chairman of the Board of Directors shall preside as chairman of the meeting. If there is no Chairman of the Board ofDirectors or if the Chairman of the Board of Directors is not present at the meeting the Vice Chairman of the Board of Directors shall preside. If there is noVice Chairman of the Board of Directors or if the Vice Chairman of the Board of Directors is not present at the meeting the directors present shall choosesome one of their number to be chairman of the meeting.101.An action that may be taken by the directors or a committee of directors at a meeting may also be taken by a resolution of directors or a committee ofdirectors consented to in writing or by telex, telegram, cable, facsimile or other written electronic communication by all directors or all members of thecommittee as the case may be, without the need for any notice. The consent may be in the form of counterparts, each counterpart being signed by one ormore directors.102.The directors shall cause the following records to be kept:a.minutes of all meetings of directors, members, committees of directors and committees of members; andb.copies of all resolutions consented to by directors, members, committees of directors and committees of members.103.The resolutions, records and minutes referred to in the preceding Article shall be kept at the registered office of the Company, its principal place ofbusiness or at such other place as the directors determine.104.The directors may, by resolution of directors, designate one or more committees, each consisting of one or more directors.105.Subject to the following Article, each committee of directors has such powers and authorities of the directors, including the power and authority to affix theSeal, as are set forth in the resolution of directors establishing the committee.106.The directors have no power to delegate the following powers to a committee of directors;a.to amend the memorandum or articles;b.to change the registered office or agent;c.to designate committees of directors;d.to delegate powers to a committee of directors;e.to appoint or remove directors;f.to appoint or remove an agent;g.to fix emoluments of directors;18h.to approve a plan of merger, consolidation or arrangement;i.to make a declaration of solvency for the purposes of section 198(1)(a) or to approve a liquidation plan;j.to make a determination under section 57(1) that the company will, immediately after a proposed distribution, satisfy the solvency test; ork.to authorise the company to continue as a company incorporated under the laws of a jurisdiction outside the British Virgin Islands.Paragraphs (c) and (d) do not prevent a committee of directors, where authorised by the directors, from appointing a subcommittee and delegating powersexercisable by the committee to the subcommittee.107.The meetings and proceedings of each committee of directors consisting of 2 or more directors shall be governed mutatis mutandis by the provisions ofthese Articles regulating the proceedings of directors so far as the same are not superseded by any provisions in the resolution establishing the committee.108.Without prejudice to the freedom of the directors to establish any other committee, if the shares (or depositary receipts therefore) are listed or quoted onthe Designated Stock Exchange, and if required by the Designated Stock Exchange, the directors shall establish and maintain an audit committee as acommittee of the board of directors, the composition and responsibilities of which shall comply with the rules and regulations of the SEC and theDesignated Stock Exchange. The audit committee shall meet at least once every financial quarter, or more frequently as circumstances dictate.109.The Company shall adopt a formal written audit committee charter and review and assess the adequacy of the formal written charter on an annual basis.The charter shall specify the responsibilities of the Audit Committee which shall include responsibility for, among other things, ensuring its receipt from theoutside auditors of the Company of a formal written statement delineating all relationships between the auditor and the Company, and the AuditCommittee’s responsibility for actively engaging in a dialogue with the auditor with respect to any disclosed relationships or services that may impact theobjectivity and independence of the auditor take appropriate action to oversee the independence of the outside auditor. In addition, the Audit Committee isresponsible for reviewing potential conflict of interest situations and approving all Related Party Transactions.110.Without prejudice to the freedom of the directors to establish any other committees, the Board may establish a Stock Option Committee to administer theCompany’s stock option plans, including authority to make and modify awards under such plans. For so long as the Securities of the Company are listed ortraded on the Designated Stock Exchange, the Stock Option Committee shall have at least two Independent Directors. The Stock Option Committee willadminister the Company’s stock option plans, including the authority to make and modify awards under such plans.111.Without prejudice to the freedom of the directors to establish any other committees, the Board may establish a Nominating Committee to assist the Board inidentifying qualified individuals to become members of the Board.OFFICERS112.The Company may by resolution of directors appoint officers of the Company at such times as shall be considered necessary or expedient. Such officersmay consist of a Chairman of the Board of Directors, a Vice Chairman of the Board of Directors, a President and one or more Vice Presidents, Secretaries andTreasurers and such other officers as may from time to time be deemed desirable. Any number of offices may be held by the same person.113.The officers shall perform such duties as shall be prescribed at the time of their appointment subject to any modification in such duties as may beprescribed thereafter by resolution of directors or resolution of members, but in the absence of any specific allocation of duties it shall be the responsibilityof the Chairman of the Board of Directors to preside at meetings of directors and members, the Vice Chairman to act in the absence of the Chairman, thePresident to manage the day to day affairs of the Company, the Vice Presidents to act in order of seniority in the absence of the President but otherwise toperform such duties as may be delegated to them by the President, the Secretaries to maintain the share register, minute books and records (other thanfinancial records) of the Company and to ensure compliance with all procedural requirements imposed on the Company by applicable law, and the Treasurerto be responsible for the financial affairs of the Company.19114.Subject to the rules of the Designated Stock Exchange, the emoluments of all officers shall be fixed by resolution of directors.115.The officers of the Company shall hold office until their successors are duly elected and qualified, but any officer elected or appointed by the directors maybe removed at any time, with or without cause, by resolution of directors. Any vacancy occurring in any office of the Company may be filled by resolutionof directors.CONFLICT OF INTERESTS116.A director of the Company shall, forthwith after becoming aware of the fact that he is interested in a transaction entered into or to be entered into by theCompany, disclose the interest to all other directors of the Company.117.A director of the Company is not required to comply with Article 112 if;a.the transaction or proposed transaction is between the director and the Company; andb.the transaction or proposed transaction is or is to be entered into in the ordinary course of the company’s business and on usual terms andconditions.118.For the purposes of Article 112 a disclosure to all other directors to the effect that a director is a member, director or officer of another named entity or has afiduciary relationship with respect to the entity or a named individual and is to be regarded as interested in any transaction which may, after the date of theentry or disclosure, be entered into with that entity or individual, is a sufficient disclosure of interest in relation to that transaction.119.A.A director of the Company who is interested in a transaction entered into or to be entered into by the Company may:(i)vote on a matter relating to the transaction;(ii)attend a meeting of directors at which a matter relating to the transaction arises and be included among the directors present at the meeting for thepurposes of a quorum; and(iii)sign a document on behalf of the Company, or do any other thing in his capacity as a director, that relates to the transaction,and, subject to compliance with the Act shall not, by reason of his office be accountable to the Company for any benefit which he derives from suchtransaction and no such transaction shall be liable to be avoided on the grounds of any such interest or benefit.119.B.For so long the Securities of the Company are listed or traded on the Designated Stock Exchange, the Company shall conduct an appropriate review of allmaterial Related Party Transactions on an ongoing basis and shall utilize the Audit Committee for the review and approval of potential conflicts of interestsituations.INDEMNIFICATION120.Subject to the limitations hereinafter provided the Company may indemnify against all expenses, including legal fees, and against all judgments, fines andamounts paid in settlement and reasonably incurred in connection with legal, administrative or investigative proceedings any person who;a.is or was a party or is threatened to be made a party to any threatened, pending or completed proceedings, whether civil, criminal, administrative orinvestigative, by reason of the fact that the person is or was a director, an officer or a liquidator of the Company; orb.is or was, at the request of the Company, serving as a director of, or in any other capacity is or was acting for, another body corporate or apartnership, joint venture, trust or other enterprise.20121.The Company may only indemnify a person if the person acted honestly and in good faith in what he believed to be in the best interests of the Companyand, in the case of criminal proceedings, the person had no reasonable cause to believe that his conduct was unlawful.122.For the purposes of the preceding Article, a director acts in the best interests of the Company if he acts in the best interests of;a.the Company’s holding company; orb.a shareholder or shareholders of the Company; in either case, in the circumstances specified in Article 85.123.The decision of the directors as to whether the person acted honestly and in good faith and with a view to the best interests of the Company and as towhether the person had no reasonable cause to believe that his conduct was unlawful is, in the absence of fraud, sufficient for the purposes of theseArticles, unless a question of law is involved.124.The termination of any proceedings by any judgment, order, settlement, conviction or the entering of a nolle prosequi does not, by itself, create apresumption that the person did not act honestly and in good faith and with a view to the best interests of the Company or that the person had reasonablecause to believe that his conduct was unlawful.Consolidated Statements of Changes in Stockholder’s EquityF5Consolidated Statements of Cash FlowsF6Notes to Consolidated Financial StatementsF7 F22F1REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRMTo the Shareholder and the Sole Director ofLK Technology Ltd.Opinion on the Consolidated Financial StatementsWe have audited the accompanying consolidated balance sheets of LK Technology Ltd. and. subsidiaries (the “Company”) as of December 31, 2017 and 2016, andthe related consolidated statements of operations and comprehensive loss, changes in shareholder’s equity and cash flows for each of the years then ended, andthe related notes (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in allmaterial respects, the consolidated financial position of the Company as of December 31, 2017 and 2016, and the consolidated results of its operations and its cashflows for each of the years then ended, in conformity with accounting principles generally accepted in the United States of America.Basis for OpinionThese consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’sconsolidated financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (UnitedStates) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules andregulations of the Securities and Exchange Commission and the PCAOB.We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonableassurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have,nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internalcontrol over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting.Accordingly, we express no such opinion.An independent member firm of Moore Stephens International Limited – members in principal cities throughout the worldOur audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, andperforming procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in theconsolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well asevaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion.Certified Public AccountantsWe have served as the Company’s auditor since 2018.Hong KongMay 25, 2018F2LK TECHNOLOGY LTD. AND SUBSIDIARIESCONSOLIDATED BALANCE SHEETS(IN U.S. DOLLARS)As of December 31,20172016AssetsCurrent assets:Cash and cash equivalents$72,379$83,843Accounts receivable, net of allowance for doubtful accounts9,729,6251,865,836Other receivables and prepayment2,376,7452,287,934Amounts due from related parties11,760,692Total current assets23,939,4414,237,613Property and equipment, net5,044,8727,771,027Intangible assets, net1,154,1971,682,445Goodwill7,239,9367,239,936Amount due from a related party204,412183,811TOTAL ASSETS37,582,85821,114,832LiabilitiesCurrent liabilities:Accounts payable8,784,5186,446,584Accrued liabilities and other payables12,962,91211,329,613Amounts due to related parties3,563,68316,129,323Total current liabilities25,311,11333,905,520Total liabilities25,311,11333,905,520Commitments and contingenciesShareholder’s Equity (Deficit)Share capitalCommon stock, $1 par value per share; 50,000 shares authorized as of December 31, 2017 and 2016, 1 share issued andoutstanding as of December 31, 2017 and 201611Additional paidin capital41,819,68510,037,469Accumulated deficit(29,936,158)(23,125,704)Accumulated other comprehensive income (loss)388,217297,546Total Shareholder’s Equity (Deficit)12,271,745(12,790,688)TOTAL LIABILITIES AND SHAREHOLDER’S EQUITY (DEFICIT)$37,582,858$21,114,832F3LK TECHNOLOGY LTD. AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS(IN U.S. DOLLARS)For the years endedDecember 31,20172016Revenues$26,082,417$5,233,145Less: Cost of revenues5,547,7796,315,504Less: Operating expenses:Selling and marketing23,908,7336,209,804General and administrative2,451,2492,108,854Research and development1,046,1982,882,202Total operating expenses27,406,18011,200,860Loss from operations(6,871,542)(12,283,219)Other income (expense):Interest expense(26,611)(4,412)Foreign exchange gains (losses)350,679(298,257)Loss from investment(428,571)Other income (expense), net(262,980)(34,572)Total other income (expense), net61,088(765,812)Loss before income taxes(6,810,454)(13,049,031)Income taxesNet loss$(6,810,454)$(13,049,031)Other comprehensive income:Foreign currency translation adjustment90,671387,375Total comprehensive loss$(6,719,783)$(12,661,656)F4LK TECHNOLOGY LTD. AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDER’S EQUITY(IN U.S. DOLLARS)Accumulated otherTotalOrdinary sharesAdditionalpaidin AccumulatedcomprehensiveIncomeShareholder’sEquity SharesAmountcapitaldeficits(loss)(Deficit)Balance as of December 31, 20151$ 1$8,250,505$(10,076,673)$(89,829)$(1,915,996)Capital contribution from C Media1,786,9641,786,964Net loss(13,049,031)(13,049,031)Foreign currency translation adjustment387,375387,375Balance as of December 31, 20161110,037,469(23,125,704)297,546(12,790,688)Capital contribution from C Media31,782,21631,782,216Net loss(6,810,454)(6,810,454)Foreign currency translation adjustment90,67190,671Balance as of December 31, 20171$1$41,819,685$(29,936,158)$388,217$12,271,745F5LK TECHNOLOGY LTD. AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF CASH FLOWS(IN U.S. DOLLARS)For the years endedDecember 31,20172016CASH FLOWS FROM OPERATING ACTIVITIES:Net loss$(6,810,454)$(13,049,031)Depreciation and amortization3,316,1813,245,161Loss on disposal of property and equipment115,19373,022Increase in allowance for doubtful accounts445,39562,591Changes in assets and liabilitiesAccounts receivable(7,933,730)(1,507,296)Other receivables and prepayment(2,202,960)2,873,984Accounts payable2,230,5434,757,457Accrued liabilities and other payables1,866,1377,483,441Net cash (used in) provided by operating activities(8,973,695)3,939,329CASH FLOWS FROM INVESTING ACTIVITIES:Purchase of property and equipment(12,689)(3,554,258)Proceeds from disposal of property and equipment29,942Net cash provided by (used in) investing activities17,253(3,554,258)CASH FLOWS FROM FINANCING ACTIVITIES:Advances from related parties8,938,290(1,197,870)Net cash provided by (used in) financing activities8,938,290(1,197,870)Effect of exchange rate changes6,688(32,746)Net decrease in cash and cash equivalents(11,464)(845,545)Cash and cash equivalents, at beginning of year83,843929,388Cash and cash equivalents, at end of year$72,379$83,843Supplemental cash flow disclosures:Interest paid26,6114,412Income taxes paidF6LK TECHNOLOGY LTD. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS(IN U.S. DOLLARS)NOTE 1 – DESCRIPTION OF BUSINESS AND ORGANIZATIONStar Chariot Limited was incorporated in the British Virgin Islands (“BVI”) as an exempted limited liability company on March 3, 2011. On January 18, 2018, it wasrenamed as LK Technology Ltd. (“LK Technology ” or the “Company”).LK Technology, its subsidiaries and its variable interest entities (“VIEs”) (collectively the “Group”) operate mobile application service for longdistance travel in thePeople’s Republic of China (the “PRC”). The core mobile application product, Luokuang, is made as an LBSsocial contents and services distribution platform. Itoffers functions based on various travel scenarios, e.g. information, entertainment, travel, ecommerce, O2O, advertising, etc.As of December 31, 2017, details of the Company’s subsidiaries and VIEs are as follows:NameDate ofincorporationPlace ofincorporationPercentage oflegal ownershipSubsidiaries:MMB LimitedApr 11, 2013Hong Kong100%Mobile Media (China) LimitedNov 6, 2007Hong Kong100%Zhong Chuan Tian Xia Information and Technology (Beijing) LimitedFeb 1, 2013PRC100%Zhong Chuan Tian Xia Information and Technology (Shenzhen) LimitedDec 23, 2010PRC100%VIEs:Beijing Zhong Chuan Shi Xun Technology Limited (“Zhong Chuan Shi Xun”)May 17, 2004PRC100%Jiangsu Zhong Chuan Rui You Information and Technology Limited (“Zhong Chuan Rui You”)May 26, 2011PRC100%Huoerguosi Luokuang Information and Technology Limited (“Huoerguosi Luokuang”)Jul 19, 2017PRC100%Shenzhen Jiu Zhou Shi Dai Digital and Technology Limited (“Jiu Zhou Shi Dai”)Nov 26, 2004PRC100%F7NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIESBasis of presentationThe consolidated financial statements of the Group have been prepared in accordance with accounting principles generally accepted in the United States of America(“US GAAP”).The Group incurred losses from operations of $6,871,542 and $12,283,219 for the years ended December 31, 2017 and 2016, respectively. As of December 31, 2017, theGroup had a shareholder’s equity of $12,271,145. The Group had negative cash flows from operating activities for the year ended December 31, 2017 of $8,973,695.As of December 31, 2017, the Group had cash and cash equivalents of $72,379 and a working capital deficit of $1,371,672. From 2018 and onwards, the Group willfocus on improving operation efficiency and cost reduction, and enhancing marketing functions to attract more users. The Group regularly monitors its current andexpected liquidity requirements to ensure that it maintains sufficient cash balances and accessible credit to meet its liquidity requirements in the short and long term.The parent company continues to provide cash flow to the Group. Based on working capital conditions and forecast for future operations, the Group believes that itwill be able to meet its payment obligations and other commitments for at least the following twelve months.Principles of consolidationThe consolidated financial statements include the financial statements of the Company, its subsidiaries, including the whollyforeign owned enterprises (“WFOEs”),and VIEs for which the Company is the primary beneficiary. All transactions and balances among the Company, its subsidiaries and consolidated VIEs have beeneliminated upon consolidation. The results of subsidiaries and consolidated VIEs acquired or disposed of are recorded in the consolidated statements of operationsfrom the effective date of acquisition or up to the effective date of disposal, as appropriate.A subsidiary is an entity in which (i) the Company directly or indirectly controls more than 50% of the voting power; or (ii) the Company has the power to appoint orremove the majority of the members of the board of directors or to cast a majority of votes at the meeting of the board of directors or to govern the financial andoperating policies of the investee pursuant to a statute or under an agreement among the shareholders or equity holders. A VIE is required to be consolidated by theprimary beneficiary of the entity if the equity holders in the entity do not have the characteristics of a controlling financial interest or do not have sufficient equity atrisk for the entity to finance its activities without additional subordinated financial support from other parties.F8To comply with the PRC legal restrictions on foreign ownership of companies that operate mobile application services, the Group operates in such restricted servicesin the PRC through certain PRC domestic companies, whose equity interests are held by certain management members or founders of the Group. Part of theregistered capital of these PRC domestic companies was funded by certain management members or founders of the Group. The Group has entered into certainexclusive business services agreements with these PRC domestic companies, which entitle it to receive a majority of their residual returns and make it obligatory forthe Group to absorb a majority of the risk of losses from their activities. In addition, the Group has entered into certain agreements with those management membersor founders, including equity interest pledge agreements of the equity interests held by those management members or founders and exclusive option agreements toacquire the equity interests in these companies when permitted by the PRC laws, rules and regulations.Details of the typical VIE structure of the Group’s significant consolidated VIEs, primarily domestic companies associated with the operations such as Zhong ChuanShi Xun, Zhong Chuan Rui You, Huoerguosi Luokuang and Jiu Zhou Shi Dai, are set forth below:(i)Contracts that give the Group effective control of VIEsExclusive option agreementsThe VIE equity holders have granted the WFOEs exclusive call options to purchase their equity interest in the VIEs at an exercise price equal to the higherof (i) the registered capital in the VIEs; and (ii) the minimum price as permitted by applicable PRC laws. Each relevant VIE has further granted the relevantWFOE an exclusive call option to purchase its assets at an exercise price equal to the book value of the assets or the minimum price as permitted byapplicable PRC laws, whichever is higher. The WFOEs may nominate another entity or individual to purchase the equity interest or assets, if applicable,under the call options. Each call option is exercisable subject to the condition that applicable PRC laws, rules and regulations do not prohibit completion ofthe transfer of the equity interest or assets pursuant to the call option. Each WFOE is entitled to all dividends and other distributions declared by the VIE,and the VIE equity holders have agreed to give up their rights to receive any distributions or proceeds from the disposal of their equity interests in the VIEwhich are in excess of the original registered capital that they contributed to the VIE, and to pay any such distributions or premium to the WFOE. Theexclusive call option agreements remain in effect until the equity interest or assets that are the subject of such agreements are transferred to the WFOEs.Equity pledge agreementsPursuant to the relevant equity pledge agreements, the relevant VIE equity holders have pledged all of their interests in the equity of the VIEs as acontinuing first priority security interest in favor of the corresponding WFOEs to secure the performance of obligations by the VIEs and/or the equityholders under the other structure contracts. Each WFOE is entitled to exercise its right to dispose of the VIE equity holders’ pledged interests in the equityof the VIE and has priority in receiving payment by the application of proceeds from the auction or sale of such pledged interests, in the event of anybreach or default under the loan agreement or other structure contracts, if applicable. These equity pledge agreements remain in force for the duration ofthe relevant loan agreement and other structure contracts.F9(ii)Contracts that enable the Group to receive substantially all of the economic benefits from the VIEsExclusive business services agreementsEach relevant VIE has entered into an exclusive business services agreement with the respective WFOE, pursuant to which the relevant WFOE providesexclusive business services to the VIE. In exchange, the VIE pays a service fee to the WFOE which typically amounts to what would be substantially all ofthe VIE’s pretax profit, resulting in a transfer of substantially all of the profits from the VIE to the WFOE.Other arrangementsThe exclusive call option agreements described above also enable the Group to receive substantially all of the economic benefits from the VIEs by typicallyentitling the WFOEs to all dividends and other distributions declared by the VIEs and to any distributions or proceeds from the disposal by the VIE equityholders of their equity interests in the VIEs that are in excess of the original registered capital that they contributed to the VIEs.Based on these contractual agreements, the Group believes that the PRC domestic companies as described above should be considered as VIEs because the equityholders do not have significant equity at risk nor do they have the characteristics of a controlling financial interest. Given that the Group is the primary beneficiaryof these PRC domestic companies, the Group believes that these VIEs should be consolidated based on the structure as described above.Under the contractual arrangements with the consolidated VIEs, the Group has the power to direct activities of the consolidated VIEs and can have assetstransferred out of the consolidated VIEs under its control. Therefore, the Group considers that there is no asset in any of the consolidated VIEs that can be usedonly to settle obligations of the consolidated VIEs, except for registered capital and PRC statutory reserves. As all consolidated VIEs are incorporated as limitedliability companies under the Company Law of the PRC, creditors of the consolidated VIEs do not have recourse to the general credit of the Group for any of theliabilities of the consolidated VIEs.Currently there is no contractual arrangement which requires the Group to provide additional financial support to the consolidated VIEs. However, as the Groupconducts its businesses primarily based on the licenses and approvals held by its consolidated VIEs, the Group has provided and will continue to provide financialsupport to the consolidated VIEs considering the business requirements of the consolidated VIEs, as well as the Group’s own business objectives in the future.F10Use of estimatesThe preparation of financial statements in conformity with US GAAP requires the Group to make estimates and assumptions that affect the reported amounts ofassets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expensesduring the reporting period. The most significant estimates are the allowance for doubtful accounts, the useful lives of property and equipment and intangibleassets, impairment of longlived assets and goodwill. Actual results could differ from those estimates.Fair value measurementsFair value is the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at themeasurement date under current market conditions. When determining the fair value measurements for assets and liabilities required or permitted to be recorded atfair value, the Group considers the principal or most advantageous market in which it would transact and it considers assumptions that market participants woulduse when pricing the asset or liability.Authoritative literature provides a fair value hierarchy which prioritizes the inputs to valuation techniques used to measure fair value into three broad levels. Thelevel in the hierarchy within which the fair value measurement in its entirety falls is based upon the lowest level of input that is significant to the fair valuemeasurement as follows:Level 1Level 1 applies to assets or liabilities for which there are quoted prices in active markets for identical assets or liabilities.Level 2Level 2 applies to assets or liabilities for which there are inputs other than quoted prices included within Level 1 that are observable for the asset or liability such asquoted prices for similar assets or liabilities in active markets; quoted prices for identical assets or liabilities in markets with insufficient volume or infrequenttransactions (less active markets); or modelderived valuations in which significant inputs are observable or can be derived principally from, or corroborated by,observable market data.Level 3Level 3 applies to assets or liabilities for which there are unobservable inputs to the valuation methodology that are significant to the measurement of the fair valueof the assets or liabilities.F11Cash and cash equivalentsCash and cash equivalents primarily consist of cash, money market funds, investments in interest bearing demand deposit accounts, time deposits and highly liquidinvestments with original maturities of three months or less from the date of purchase and are stated at cost which approximates their fair value. The Group has nocash equivalents.Accounts receivable, net of allowanceAccounts receivable are recognized and carried at the original invoiced amount less an allowance for any potential uncollectible amounts. An estimate for doubtfuldebts is made when collection of the full amount is no longer probable. Bad debts are written off as incurred. The Group generally does not require collateral from itscustomers.The Group maintains allowances for doubtful accounts for estimated losses resulting from the failure of customers to make payments on time. The Group reviews theaccounts receivable on a periodic basis and makes specific allowances when there is doubt as to the collectability of individual balances. In evaluating thecollectability of individual receivable balances, the Group considers many factors, including the age of the balance, the customer’s payment history, its currentcreditworthiness and current economic trends.Property and equipment, netProperty and equipment are carried at cost less accumulated depreciation. Depreciation is calculated on a straightline basis over the following estimated usefullives:Wifi equipment– 3 yearsOffice equipment– 3 to 5 yearsVehicles– 5 yearsCosts of repairs and maintenance are expensed as incurred and asset improvements are capitalized. The gain or loss on disposal of property and equipment is thedifference between the net sales proceeds and the carrying amount of the relevant assets and is recognized in the consolidated income statement. When propertyand equipment are retired or otherwise disposed of, the cost and accumulated depreciation are removed from the accounts and any resulting gain or loss is includedin the results of operations for the respective period.Construction in progressAssets under construction are not depreciated until construction is completed and the assets are ready for their intended use.F12Intangible assetsIntangible assets with finite lives are amortized using the straightline method over the estimated economic lives.Intangible assets have weighted average economic lives from the date of purchase as follows:Software– 5 yearsTrademarks– 10 yearsGoodwillThe Group assesses goodwill for impairment in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”)subtopic 35020, Intangibles—Goodwill and Other: Goodwill (“ASC 35020”), which requires that goodwill to be tested for impairment at the reporting unit level atleast annually and more frequently upon the occurrence of certain events, as defined by ASC 35020.We have the option to assess qualitative factors first to determine whether it is necessary to perform the twostep test in accordance with ASC 35020. If we believe,as a result of the qualitative assessment, that it is morelikelythannot that the fair value of the reporting unit is less than its carrying amount, the twostepquantitative impairment test described below is required. Otherwise, no further testing is required. In the qualitative assessment, we consider primary factors such asindustry and market considerations, overall financial performance of the reporting unit, and other specific information related to the operations. In performing thetwostep quantitative impairment test, the first step compares the carrying amount of the reporting unit to the fair value of the reporting unit based on either quotedmarket prices of the ordinary shares or estimated fair value using a combination of the income approach and the market approach. If the fair value of the reportingunit exceeds the carrying value of the reporting unit, goodwill is not impaired and we are not required to perform further testing. If the carrying value of the reportingunit exceeds the fair value of the reporting unit, then we must perform the second step of the impairment test in order to determine the implied fair value of thereporting unit’s goodwill. The fair value of the reporting unit is allocated to its assets and liabilities in a manner similar to a purchase price allocation in order todetermine the implied fair value of the reporting unit goodwill. If the carrying amount of the goodwill is greater than its implied fair value, the excess is recognized asan impairment loss.In 2017, we performed a qualitative assessment for goodwill. Based on the requirements of ASC35020, we evaluated all relevant factors, including but not limited tomacroeconomic conditions, industry and market conditions, financial performance. We weighed all factors in their entirety and concluded that it was not morelikelythannot the fair value was less than the carrying amount of the reporting unit, and further impairment testing on goodwill was unnecessary as of December 31, 2017and 2016.F13Impairment or disposal of longlived assetsLonglived assets other than goodwill are included in impairment evaluations when events and circumstances exist that indicate the carrying value of these assetsmay not be recoverable. In accordance with FASB ASC 360, Property, Plant and Equipment, the Group assesses the recoverability of the carrying value of longlivedassets by first grouping its longlived assets with other assets and liabilities at the lowest level for which identifiable cash flows are largely independent of the cashflows of other assets and liabilities (the asset group) and, secondly, estimating the undiscounted future cash flows that are directly associated with and expected toarise from the use of and eventual disposition of such asset group. If the carrying value of the asset group exceeds the estimated undiscounted cash flows, theGroup recognizes an impairment loss to the extent the carrying value of the longlived asset exceeds its fair value. The Group determines fair value through quotedmarket prices in active markets or, if quotations of market prices are unavailable, through the performance of internal analysis using a discounted cash flowmethodology or obtains external appraisals from independent valuation firms. The undiscounted and discounted cash flow analyses are based on a number ofestimates and assumptions, including the expected period over which the asset will be utilized, projected future operating results of the asset group, discount rateand longterm growth rate.As of December 31, 2017 and 2016, the Group assessed the impairment of its longlived assets and concluded that there was no impairment indication.Business combinationWe account for business combinations using the purchase method of accounting in accordance with FASB ASC topic 805, Business combinations. The purchasemethod accounting requires that the consideration transferred be allocated to the assets, including separately identifiable assets and liabilities we acquired, basedon their estimated fair values. The consideration transferred in an acquisition is measured as the aggregate of the fair values at the date of exchange of the assetsgiven, liabilities incurred, and equity instruments issued as well as the contingent considerations and all contractual contingencies as of the acquisition date. Thecosts directly attributable to the acquisition are expensed as incurred. Identifiable assets, liabilities and contingent liabilities acquired or assumed are measuredseparately at their fair value as of the acquisition date, irrespective of the extent of any noncontrolling interests. The excess of (i) the total of cost of acquisition, fairvalue of the noncontrolling interests and acquisition date fair value of any previously held equity interest in the acquiree over (ii) the fair value of the identifiable netassets of the acquiree, is recorded as goodwill. If the cost of acquisition is less than the fair value of the net assets of the subsidiary acquired, the difference isrecognized directly in earnings.Revenue recognitionThe Group recognizes revenue in accordance with FASB ASC topic 605, Revenue Recognition (“ASC 605”). Revenue is recognized when the following four revenuerecognition criteria are met: (i) persuasive evidence of an arrangement exists, (ii) delivery has occurred or services have been provided, (iii) the selling price is fixed ordeterminable, and (iv) collectability is reasonably assured.F14Displaybased online advertising servicesThe Group provides displaybased online advertising services to customers by integrating text description, image and video, and displaying the advertisements in aprominent position of LuoKuang Application. The Group recognizes revenue in accordance with ASC 605, over the contractual term based on the agreements andconfirmation letters signed by both parties, commencing on the date the customer’s advertisement is displayed on the Group’s platform.Foreign currency translationThe functional and reporting currency of the Company and the Company’s subsidiaries domiciled in BVI and Hong Kong are the United States dollar (“U.S. dollar”).The financial records of the Company’s other subsidiaries and VIEs located in the PRC are maintained in their local currency, the Chinese Renminbi (“RMB”), whichare the functional currency of these entities.Monetary assets and liabilities denominated in currencies other than the functional currency are translated into the functional currency at the rates of exchangeruling at the balance sheet date. Transactions in currencies other than the functional currency during the year are converted into the functional currency at theapplicable rates of exchange prevailing when the transactions occurred. Transaction gains and losses are recognized in the statements of operations.The Company’s entities with a functional currency of RMB translate their operating results and financial position into the U.S. dollar, the Company’s reportingcurrency. Assets and liabilities are translated using the exchange rates in effect on the balance sheet date. Revenues, expenses, gains and losses are translatedusing the average rate for the year. Retained earnings and equity are translated using the historical rate. Translation adjustments are reported as cumulativetranslation adjustments and are shown as a separate component of other comprehensive income.Income taxesDeferred income taxes are recognized for temporary differences between the tax basis of assets and liabilities and their reported amounts in the financial statements,net operating loss carry forwards and credits, by applying enacted statutory tax rates applicable to future years. Deferred tax assets are reduced by a valuationallowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Current income taxesare provided for in accordance with the laws and regulations applicable to the Group as enacted by the relevant tax authorities.The impact of an uncertain income tax position on the income tax return must be recognized at the largest amount that is morelikelythan not to be sustained uponaudit by the relevant tax authorities. An uncertain income tax position will not be recognized if it has less than a 50% likelihood of being sustained. Additionally, theGroup classifies the interest and penalties, if any, as a component of the income tax expense. For years ended December 31, 2017 and 2016, the Group did not haveany material interest or penalties associated with tax positions nor did the Group have any significant unrecognized uncertain tax positions.F15Related partiesParties are considered to be related to the Company if the parties, directly or indirectly, through one or more intermediaries, control, are controlled by, or are undercommon control with the Company. Related parties also include principal owners of the Company, its management, members of the immediate families of principalowners of the Company and its management and other parties with which the Company may deal with if one party controls or can significantly influence themanagement or operating policies of the other to an extent that one of the transacting parties might be prevented from fully pursuing its own separate interests. TheCompany discloses all significant related party transactions.LeasesLeases have been classified as either capital or operating leases. Leases that transfer substantially all the benefits and risks incidental to the ownership of assets areaccounted for as if there was an acquisition of an asset and incurrence of an obligation at the inception of the lease. All other leases are accounted for as operatingleases wherein rental payments are expensed as incurred.When the Group is the lessor, minimum contractual rental from leases are recognized on a straightline basis over the noncancelable term of the lease. With respectto a particular lease, actual amounts billed in accordance with the lease during any given period may be higher or lower than the amount of rental revenue recognizedfor the period. Straightline rental revenue commences when the customer assumes control of the leased premises. Accrued straightline rents receivable representsthe amount by which straightline rental revenue exceeds rents currently billed in accordance with lease agreements. Contingent rental revenue is accrued when thecontingency is removed.Advertising costsAdvertising costs include expenses associated with direct marketing. All advertising costs are expensed as incurred and included in selling and marketing expenses.During the years ended December 31, 2017 and 2016, advertising costs amounted to $23,171,170 and $4,537,653, respectively.Comprehensive lossComprehensive loss includes net loss and foreign currency translation adjustments and is presented net of tax. The tax effect is nil for the two years endedDecember 31, 2017 and 2016 in the consolidated statements of comprehensive loss.Concentration of credit riskFinancial instruments that potentially expose the Group to concentrations of credit risk consist primarily of cash and accounts receivable. The Group places its cashwith financial institutions with highcredit rating and quality in China. For the year ended December 31, 2017, two customers accounted for over 10% of totalrevenue. For the year ended December 31, 2016, four customers accounted for over 10% of total revenue. At December 31, 2017 and 2016, the Group had credit riskexposure of uninured cash in banks of approximately $72,379 and $83,843, respectively.F16NOTE 3 – INCOME TAXAt December 31, 2017 and 2016, the Group had an unused net operating loss carryforwards of approximately $25,123,726 and $20,081,239, respectively, for income taxpurposes, which expires between 2018 to 2022 and between 2017 to 2021, respectively. At December 31, 2017 and 2016, these net operating losses carryforwards mayresult in future income tax benefits of approximately $5,043,944 and $4,008,863, respectively, however, because realization is uncertain at this time, a valuationallowance in the same amount has been established. Deferred income taxes reflect the net effects of temporary differences between the carrying amounts of assetsand liabilities for financial reporting purposes and the amounts used for income tax purposes.Significant components of the Group’s deferred tax liabilities and assets of December 31, 2017 and 2016 are as follows:December 31,December 31,20172016Deferred tax liabilities$$Deferred tax assetNet operating loss carryforward5,043,9444,008,863Valuation allowance(5,043,944)(4,008,863)Net deferred tax assetMovement of valuation allowanceDecember 31,2017December 31,2016At the beginning of the year$4,008,863$2,049,352Current year addition823,9702,159,518Expired(61,411)Exchange difference272,522(200,007)At the end of the year5,043,9444,008,863The Company is not subject to taxation in BVI under the current BVI law. Subsidiaries operating in the PRC are subject to PRC Enterprise Income Tax at the statutoryrate of 25% for the years ended December 31, 2017 and 2016. Subsidiaries operating in Hong Kong are subject to Hong Kong income taxes at a rate of 16.5% for theyears ended December 31, 2017 and 2016.F17A reconciliation of the income tax expense to the amount computed by applying the current statutory tax rate to the loss before income taxes in the consolidatedstatements of comprehensive income is as follows:December 31,December 31,20172016Loss before income taxes$(6,810,454)$(13,049,031)Tax loss at statutory tax rate(1,655,174)(3,386,822)Nondeductible items6,729,2551,712,857Nontaxable items(3,789,956)(674,189)Change in valuation allowance823,9702,159,518Tax benefits(2,108,095)188,636Income tax expensesNOTE 4 – ACCOUNTS RECEIVABLEAt December 31, 2017 and 2016, accounts receivable consisted of the following:December 31,December 31,20172016Accounts receivable$10,406,602$2,098,946Less: allowance for doubtful accounts676,977233,110$9,729,625$1,865,836NOTE 5 – OTHER RECEIVABLESAt December 31, 2017 and 2016, other receivables consisted of the following:December 31,2017December 31,2016Advances to suppliers$339,701$181,472VAT recoverable (1)3,033,0651,662,805Other5,048,189485,152$2,376,745$2,287,934(1)The balance of advanced VAT represents input VAT available for deducting the amount of VAT paid in the future. During the years ended December 31, 2017and 2016, the Group purchased a large amount of WiFi equipment for deployments, which generated related input VAT approved by tax authority.F18NOTE 6 – AMOUNTS DUE FROM RELATEDPARTIESAt December 31, 2017 and 2016, amounts due from related parties consisted of the following:Name of related partyDecember 31,2017December 31,2016C Media Limited (1)$11,760,692$Ya Tuo Ji International Consultancy (Beijing) Limited (2)204,412183,811(1)C Media Limited is the parent company of LK Technology. The Group expects the amounts due from the related party will be returned to the Group within oneyear.(2)Ya Tuo Ji is a company controlled by the spouse of a major shareholder of C Media Limited. The loan is unsecured, interestfree and repayable on January 5,2019.NOTE 7 – PROPERTY AND EQUIPMENTAt December 31, 2017 and 2016, property and equipment consisted of the following:December 31,December 31,Useful life20172016WiFi equipment3 Years$8,711,424$8,367,678Vehicles5 Years43,246Office and other equipment3 – 5 Years170,242416,434Constructioninprogress2,166,4522,652,28811,048,11811,479,646Less: accumulated depreciation(6,003,246)(3,708,619)$5,044,872$7,771,027For the years ended December 31, 2017 and 2016, depreciation expense amounted to $2,628,884 and $2,474,434, respectively, of which $2,423,655 and $2,194,582,respectively, was included in cost of revenue, $117,648 and $121,740, respectively, was included in selling and marketing expenses and the remainder was included ingeneral and administrative expense.Included in constructioninprogress are WiFI equipment under construction.F19NOTE 8 – GOODWILLIn September of 2014, Zhong Chuan Shi Xun acquired a 100% interest in Zhong Chuan Rui You for a consideration of $7,391,894 (RMB48,000,000). Zhong Chuan RuiYou is primarily engaged in on train WiFi business, deploying WiFi equipment on trains and providing passengers with entertainment and information services ontrains. The book value of the identifiable net assets of Zhong Chuan Rui You was $151,958 (RMB963,000) and a goodwill of $7,239,936 was recorded.NOTE 9 – ACCRUED LIABILITIES AND OTHER PAYABLESAt December 31, 2017 and 2016, accrued liabilities and other payables consisted of the following:December 31,December 31,20172016Deferred revenue$2,326,406$302,735Accrued payroll143,998316,458Other taxes payable3,544,469461,699Other payable852,384686,526Other loans6,095,6559,562,915$12,962,912$11,329,613Deferred revenue represents prepayments from customers for advertising service and is recognized as revenue when the advertising services are rendered.Other loans of $939,555 and $57,416, respectively, as of December 31, 2017 and 2016, are unsecured, bear daily interest at 0.04% and are repayable on demand.NOTE 10 – AMOUNTS DUE TO RELATED PARTIESAt December 31, 2017 and 2016, amounts due to related parties consisted of the following:December 31,December 31,Name of related party20172016Mr. Song Xuesong (“Mr. Song”) (1)$2,921,639$10,669,325C Media Limited (2)$$4,855,236Thumb Beijing Branch (3)$612,103$576,560Thumb Shenzhen Branch (3)$29,941$28,202(1) The Group’s CEO(2) C Media Limited, the parent company.(3) Thumb Beijing and Shenzhen Branch are controlled by the spouse of Mr. Song.Amounts due to related parties are shortterm in nature, noninterest bearing, unsecured and payable on demand.F20NOTE 11 – RETIREMENT AND WELFARE BENEFITSThe Group’s fulltime employees are entitled to staff welfare benefits including medical care, casualty, housing benefits, education benefits, unemployment insuranceand pension benefits through a PRC governmentmandated multiemployer defined contribution plan. The Group is required to accrue the employerportion forthese benefits based on certain percentages of the employees’ salaries. The total provision for such employee benefits of $170,227 and $353,033 during the yearsended December 31, 2017 and 2016, respectively, of which $23,392 and $30,455, respectively, was charged to cost of revenue, $48,957 and $97,408, respectively wascharged to selling and marketing expenses, $49,717 and $86,934, respectively, was charged to general and administrative expenses and $48,161 and $138,236,respectively was charged to research and development expenses. The Group is required to make contributions to the plan out of the amounts accrued for all staffwelfare benefits except for education benefits. The PRC government is responsible for the staff welfare benefits including medical care, casualty, housing benefits,unemployment insurance and pension benefits to be paid to these employees.NOTE 12 – STATUTORY RESERVESAs stipulated by the relevant law and regulations in the PRC, the Group’s subsidiaries and VIEs in the PRC are required to maintain a nondistributable statutorysurplus reserve. Appropriations to the statutory surplus reserve are required to be made at not less than 10% of profit after taxes as reported in the subsidiaries’statutory financial statements prepared under the PRC GAAP. Once appropriated, these amounts are not available for future distribution to owners or shareholders.Once the general reserve is accumulated to 50% of the subsidiaries’ registered capital, the subsidiaries can choose not to provide more reserves. The statutoryreserve may be applied against prior year losses, if any, and may be used for general business expansion and production and increase in registered capital of thesubsidiaries. The Group allocated $Nil to statutory reserves during the years ended December 31, 2017 and 2016, respectively. The statutory reserves cannot betransferred to the Company in the form of loans or advances and are not distributable as cash dividends except in the event of liquidation.NOTE 13 – COMMITMENTS AND CONTINGENCIESOperating leasesWe have entered into operating lease agreements primarily for our office spaces in China. These leases expire through 2018 and are renewable upon negotiation.Future minimum rental payment required under the Office Lease is as follows:Year ending December 31:Amount2018$122,138F21Contingencies(a) Litigation with Shanghai Fusheng Weier Intelligent Control Technology Co., Ltd.On January 22, 2016, Zhong Chuan Rui You and Shanghai Fusheng Weier Intelligent Control Technology Co., Ltd. (“Fusheng Weier”) signed a contract forequipment of $1,652,842 (RMB10,800,000). Since Zhong Chuan Rui You did not make the payments of $1,126,381 (RMB7,360,000) on the due dates, Fusheng Weierfiled a lawsuit against Zhong Chuan Rui You in Shanghai Xuhui District People’s Court on October 8, 2016. On March 9, 2017, Xuhui District People’s Court issuedthe verdict requiring Zhong Chuan Rui You to pay the overdue debts. In August 2017, C Media Limited made the payment of $512,075 (RMB3,346,000). Theremaining balance has been accrued in accounts payable. The payment schedule for the remaining balance is being negotiated by the two parties. On February 5,2018, a hearing was held adding Zhong Chuan Shi Xun as a defendant. The Group plans to settle the remaining balance within one year.(b) Lawsuit with Gansu Jinlun Culture Media Co., Ltd.On August 22, 2014, Zhong Chuan Rui You and Gansu Jinlun Culture Media Co., Ltd. (“Gansu Jinlun”) signed a “Lanzhou Railway Bureau Airconditioned Train WiFi Network System Advertising Operation Rights Agreement” for advertising on 72 trains of $1,467,880 (RMB9,604,633). Due to the dispute on the projectimplementation, Zhong Chuan Rui You did not pay the advertising fee. On August 23, 2017, Gansu Jinlun filed a lawsuit with Gansu Intermediate People’s Court. OnDecember 19, 2017, Gansu Intermediate People’s Court issued a verdict, ruling that Zhong Chuan Rui You settle the overdue advertising fee. Since only 18 out of 72trains have been installed with Wifi network system, Zhong Chuan Rui You disputed and appealed to the verdict. The next court trial date has not yet beendetermined.C Media and Gansu Jinlun are negotiating a potential settlement to resume the contract. According to the legal counsel, it is probable that the settlement will amountto approximately $459,000 (RMB3,000,000); therefore, this amount has been accrued in accounts payable.(c) Litigation with Shenzhen Hua Xun Fang Zhou Technology Co., Ltd.On June 16, 2015, Zhong Chuan Rui You signed a cooperation agreement with Shenzhen Hua Xun Fang Zhou Technology Co., Ltd. (“Shenzhen Hua Xun”) andXuesong Song, a major shareholder of C Media Limited. Pursuant to this agreement, Zhong Chuan Rui You procures equipment from Shenzhen Hua Xun. XuesongSong acts as a joint liability guarantor for the entire debts of Zhong Chuan Rui You under this agreement. As Zhong Chuan Rui You did not make the payments onthe due dates, Shenzhen Hua Xun filed a lawsuit with Shenzhen Baoan District People’s Court on May 31, 2016. On November 1, 2016, Zhong Chuan Rui You,Xuesong Song and Shenzhen Hua Xun reached a settlement in Shenzhen Baoan District People’s Court to settle $1,735,389 (RMB11,355,000) in four instalments. OnDecember 30, 2017, the debt was assigned to C Media Limited.NOTE 14 – SUBSEQUENT EVENTThe Group has evaluated all events or transactions that occurred after December 31, 2017 through May 25, 2018, which is the date that the financial statements wereavailable to be issued.F22EX1.1 2 f20f2017ex11_luokung.htm AMENDED AND RESTATED MEMORANDUM OF ASSOCIATION AND ARTICLES OF ASSOCIATION OF LUOKUNGTECHNOLOGY CORP., DATED AUGUST 20, 2018, AND AS CURRENTLY IN EFFECTExhibit 1.1BC NO: 1553620British Virgin IslandsThe BVI Business Companies Act, 2004(No. 16 of 2004)Memorandum of AssociationandArticles of AssociationofLuokung Technology Corp.Incorporated the 24th day of October, 2009Amended and Restated the 11th Day of December 2009Amended and Restated the 17th Day of December 2009Amended and Restated the 25th Day of March 2010Amended and Restated the 21st day of May 2018Amended and restated the 17 August 2018Amended and restated the 21 August 2018Portcullis (BVI) LimitedPortcullis Chambers4th Floor Ellen Skelton Building3076 Sir Francis Drake HighwayRoad Town, TortolaBritish Virgin IslandsTERRITORY OF THE BRITISH VIRGIN ISLANDSTHE BVI BUSINESS COMPANIES ACT, 2004(No. 16 of 2004)MEMORANDUM OF ASSOCIATIONOFLuokung Technology Corp.NAME1.The name of the Company is Luokung Technology Corp.TYPE OF COMPANY2.The Company is a company limited by shares.REGISTERED OFFICE3.The first Registered Office of the Company is the offices of Portcullis TrustNet (BVI) Limited, Portcullis TrustNet Chambers, P.O. Box 3444, Road Town,Tortola, British Virgin Islands, the office of the registered agent.3.1The current Registered Office of the Company is Portcullis Chambers, 4th Floor Ellen Skelton Building, 3076 SirFrancis Drake Highway, Road Town,Tortola, British Virgin Islands VG1110.REGISTERED AGENT4.The first Registered Agent of the Company is Portcullis TrustNet (BVI) Limited of Portcullis TrustNet Chambers, P.O. Box 3444, Road Town, Tortola,British Virgin Islands.4.1The current Registered Agent of the Company is Portcullis (BVI) Ltd of Portcullis Chambers, 4th Floor Ellen Skelton Building, 3076 Sir Francis DrakeHighway, Road Town, Tortola, British Virgin Islands VG1110.AUTHORISED NUMBER OF SHARES5.The Company is authorised to issue a maximum of 251,000,000 shares.CLASSES, NUMBER AND PAR VALUE OF SHARES6.As at the date of adoption of this memorandum, the Company is authorised to issue (a) 250,000,000 ordinary shares without par value (“OrdinaryShares”); and (b) 1,000,000 preferred shares without par value (“Preferred Shares”).FRACTIONAL SHARES7.The Company may issue fractions of a share and a fractional share shall have the same corresponding fractional liabilities, limitations, preferences,privileges, qualifications, restrictions, rights and other attributes of a whole share of the same class or series of shares.RIGHTS, PRIVILEGES, RESTRICTIONS AND CONDITIONS ATTACHING TO SHARES8.(1)Subject to the memorandum and articles of association (and, for greater clarity, without prejudice to any special rights conferred thereby on theholders of any other shares), an Ordinary Share of the Company confers on the holder;(a)the right to one vote at a meeting of the members of the Company or on any Resolution of Members;(b)the right to an equal share in any Distribution paid by the Company; and(c)the right to an equal share in the distribution of the surplus assets of the Company on a winding up.(2)Subject to the memorandum and articles of association (and, for greater clarity, without prejudice to any special rights conferred thereby on theholders of any other shares), a Preferred Share of the Company confers on the holder;(a)the right to 399 votes at a meeting of the members of the Company or on any Resolution of Members;(b)the right to an equal share in any Distribution paid by the Company;(c)the right to an equal share in the distribution of the surplus assets of the Company on its liquidation.(d)be freely transferable, in whole or in part, by Mr. Xuesong Song to any third party through one or more Private Transactions, subject toApplicable Law; and(e)be freely transferable, in whole or in part, by Mr. Xuesong Song to any third party through one or more Public Transactions, subject to ApplicableLaw and Automatic Conversion of such Preferred Share(s) into Ordinary Share(s).(3)The directors may at their discretion by resolution of directors redeem, purchase or otherwise acquire all or any of the shares in the Companysubject to the Articles..VARIATION OF CLASS RIGHTS9.If at any time the issued shares are divided into different classes or series of shares, the rights attached to any class or series (unless otherwise providedby the terms of issue of the shares of that class or series) may, whether or not the Company is being wound up, be varied with the consent in writing of theholders of not less than threefourths of the issued shares of that class or series and of the holders of not less than threefourths of the issued shares ofany other class or series of shares which may be affected by such variation.RIGHTS NOT VARIED BY THE ISSUE OF SHARES PARI PASSU10.The rights conferred upon the holders of the shares of any class issued with preferred or other rights shall not, unless otherwise expressly provided by theterms of issue of the shares of that class, be deemed to be varied by the creation or issue of further shares ranking pari passu therewith.CAPACITY AND POWERS11.Subject to the Act, any other British Virgin Islands legislation and paragraph 12 below the Company has, irrespective of corporate benefit:(a)full capacity to carry on or undertake any business or activity, do any act or enter into any transaction;(b)for the purposes of paragraph (a), full rights, powers and privileges; and(c)full powers to issue shares with preemptive rights, subject to the Articles.2LIMITATIONS ON THE COMPANY’S BUSINESS12.For the purposes of section 9(4) of the Act the Company may not;(a)carry on banking or trust business, unless it is licensed to do so under the Banks and Trust Companies Act, 1990;(b)carry on business as an insurance or reinsurance company, insurance agent or insurance broker, unless it is licensed under the Insurance Act1994;(c)carry on business of company management, unless it is licensed under the Company Management Act, 1990;(d)carry on the business of providing the registered office or the registered agent for companies incorporated in the British Virgin Islands;(e)carry on the business as a mutual fund, manager of mutual funds or administrator of mutual funds unless it is recognized or licenced as the casemay be under the Mutual Funds Act 1996; or(f)carry on any other business that gives rise to a licencing requirement under any law for the time being in force in the British Virgin Islands unlessit is licenced, regulated, recognised or otherwise approved pursuant to such law.REGISTERED SHARES AND PROHIBITION ON ISSUE OF BEARER SHARES13.Shares in the Company may only be issued as registered shares. The issue of shares to bearer is prohibited.PROHIBITION ON EXCHANGE AND CONVERSION OF REGISTERED SHARES TO BEARER SHARES14.The exchange or conversion of registered shares to bearer shares is prohibited.TRANSFER OF REGISTERED SHARES15.Subject to the provisions of the Articles the Company may upon receipt of an instrument of transfer enter the name of the transferee in the register ofmembers subject to the prior or simultaneous approval of the Company as evidenced by a resolution of directors or by a resolution of members. Subject toany resolution of the members to the contrary, the directors may resolve by resolution of directors to refuse or delay the registration of the transfer forreasons that shall be specified in the resolution of directors.AMENDMENT OF MEMORANDUM AND ARTICLES OF ASSOCIATION16.1The Company may amend its Memorandum or Articles by a resolution of members or by a resolution of directors provided that the directors shall not havethe power to amend the Memorandum or Articles;(a)to restrict the rights or powers of the members to amend the Memorandum or Articles;(b)to change the percentage of members required to pass a resolution to amend the Memorandum or Articles;(c)in circumstances where the Memorandum or Articles cannot be amended by the members; or(d)to Clauses 8, 9, 10 or this Clause 12.16.2No amendment may be made to Regulation 76 of the Articles unless approved by an affirmative vote of the holders of 66 2/3 percent or more of theoutstanding votes of the shares entitled to vote thereon.3DEFINITIONS17.The meanings of words in this Memorandum are as defined in the Articles.We, Portcullis TrustNet (BVI) Limited of Portcullis TrustNet Chambers, P.O. Box 3444, Road Town, Tortola, British Virgin Islands for the purpose ofincorporating a BVI Business Company under the laws of the British Virgin Islands hereby sign this Memorandum of Association the 27th day of October,2009.Incorporator/s/ Nicole WheatleyPortcullis TrustNet (BVI) LimitedPortcullis TrustNet ChambersP.O. Box 3444Road Town, TortolaBritish Virgin Islands(Sgd. Nicole Wheatley)4TERRITORY OF THE BRITISH VIRGIN ISLANDSTHE BVI BUSINESS COMPANIES ACT, 2004(No. 16 of 2004)ARTICLES OF ASSOCIATIONOFLuokung Technology Corp.PRELIMINARY1.In these Articles, if not inconsistent with the subject or context, the words and expressions standing in the first column of the following table shall bear themeanings set opposite them respectively in the second column thereof.WordsMeaningApplicable Lawall Laws, including those of a jurisdiction in or outside of the United States, applicable to the Private orPublic Transactions.Actthe BVI Business Companies Act, 2004 (No 16 of 2004.) including any modification, extension, reenactment or renewal thereof and any regulations made thereunder.Articlesthese Articles of Association as originally framed or as from time to time amended.Automatic Conversioneach Preferred Share shall be automatically converted at any time after issue and without the payment ofany additional sum into an equal number of fully paid Ordinary Shares upon the conclusion of anytransfer by Mr. Xuesong Song to any third party through one or more Public Transactions.Designated Stock Exchangeeither the Nasdaq National Stock Market, Inc. or such other exchange or quotation bureau on which, theCompany’s Securities are listed or traded; provided that until the Securities are listed on any such“Exchange” the rules of any such Designated Stock Exchange shall be inapplicable to these Articles.directora director of the Company.distributionin relation to a distribution by a company to a member, means(i)the direct or indirect transfer of an asset, other than the Company’s own shares, to or forthe benefit of the member or(ii)the incurring of a debt to or for the benefit of a member,in relation to shares held by a member, and whether by means of a purchase of an asset, the purchase,redemption or other acquisition of shares, a transfer of indebtedness or otherwise, and includes adividend.Independent Directora person who meets the then current requirements for “independence” of the applicable rules andregulations of the U.S. Securities and Exchange Commission and the Designated Stock Exchange.5member or shareholderin relation to the Company, means a person whose name is entered in the register of members as theholder of one or more shares, or fractional shares, in the Company.Memorandumthe Memorandum of Association of the Company as originally framed or as from time to time amended.Mr. Xuesong Songthe founder, a director and Chairman of LK Technology Ltd.Ordinary Sharesissued or unissued ordinary shares of no par value of the Company having the rights, preferences andprivileges set out in the MemorandumPersonAn individual, a corporation, a trust, trustee, the estate of a deceased individual, a partnership or anunincorporated association of persons.Preferred Sharesissued or unissued preferred shares of no par value of the Company having the rights, preferences andprivileges set out in the MemorandumPrivate Transactionstransactions that are not considered as a Public Transaction.Public Transactionstransactions through any national securities exchanges and/or through the automated quotation systemincluding but not limited to NASDAQ, NYSE (including NYSE American) or OTC Markets, or anytransaction executed by the broker or with a market maker.Related Party(a) any director, officer and employee of the Company; (b) any family member of such director, officer andemployee; and (c) any entity (e.g. a corporation, partnership, or trust) controlled by or set up for thebenefit of a director, officer or employee, or a family member of such director, officer or employee.Relevant SystemA facility for the electronic transfer of uncertificated securities administered by The Depository TrustCompany or such other Person regulated by the SEC.resolution of directors(a)A resolution approved at a duly convened and constituted meeting of directors of the Companyor of a committee of directors of the Company by the affirmative vote of a simple majority of thedirectors present at the meeting who voted and did not abstain; or(b)a resolution consented to in writing by a simple majority of the directors or of all members of thecommittee, as the case may be;except that where a director is given more than one vote, he shall be counted by the number ofvotes he casts for the purpose of establishing a majority.resolution of membersSubject to the provisions of the Memorandum and Articles means:(a)A resolution approved at a duly convened and constituted meeting of the members of theCompany by the affirmative vote of(i)a majority of in excess of 50% of the votes of the shares entitled to vote and voting onthe resolution, or(ii)a majority of in excess of 50% of the votes of each class or series of shares entitled tovote as a class or series and voting on the resolution and a majority of in excess of 50%of the votes of the remaining shares entitled to vote and voting on the resolution; or6(b)a resolution consented to in writing by(i)an absolute majority of the votes of shares entitled to vote thereon, or(ii)an absolute majority of the votes of each class or series of shares entitled to votethereon as a class or series and of an absolute majority of the votes of the remainingshares entitled to vote thereon.SealAny Seal which has been duly adopted as the common seal of the Company.SECThe United States Securities and Exchange Commission.Securitiesshares and debt obligations of every kind, and options, warrants and rights to acquire shares, or debtobligations.SharesOrdinary Shares and/or Preferred Shares, as the case may be.solvency testa company satisfies the solvency test if;(i)the value of the company’s assets exceeds its liabilities, and(ii)the company is able to pay its debts as they fall due.treasury sharesshares in the Company that were previously issued but were repurchased, redeemed or otherwiseacquired by the Company and not cancelled.2.“Written” or any term of like import includes words typewritten, printed, painted, engraved, lithographed, photographed or represented or reproduced byany mode of reproducing words in a visible form, including telex, facsimile, telegram, cable or other form of writing produced by electronic communication.3.Save as aforesaid any words or expressions defined in the Act shall bear the same meaning in these Articles.4.Whenever the singular or plural number, or the masculine, feminine or neuter gender is used in these Articles, it shall equally, where the context admits,include the others.5.A reference in these Articles to voting in relation to shares shall be construed as a reference to voting by members holding the shares except that it is thevotes allocated to the shares that shall be counted and not the number of members who actually voted and a reference to shares being present at a meetingshall be given a corresponding construction.6.A reference to money in these Articles is, unless otherwise stated, a reference to the currency in which shares in the Company shall be issued according tothe provisions of the Memorandum.7REGISTERED SHARES7.Every member holding registered shares in the Company shall be entitled to a certificate signed by a director or officer of the Company or such otherperson who may be authorised from time to time by resolution of directors or under the Seal, with or without the signature of any director of the Company,specifying the share or shares held by him and the signature of the director or officer or person so authorised and the Seal may be facsimiles.8.Any member receiving a share certificate for registered shares shall indemnify and hold the Company and its directors and officers harmless from any lossor liability which it or they may incur by reason of any wrongful or fraudulent use or representation made by any person by virtue of the possessionthereof. If a share certificate for registered shares is worn out or lost it may be renewed on production of the worn out certificate or on satisfactory proof ofits loss together with such indemnity as may be required by a resolution of directors.9.If several persons are registered as joint holders of any shares, any one of such persons may give an effectual receipt for any distribution payable inrespect of such shares.10.Nothing in these Articles shall require title to any shares or other Securities to be evidenced by a certificate if the Act and the rules of the Designated StockExchange permit otherwise.SHARES AND ISSUED SHARES11.Subject to the provisions of these Articles and, if applicable, the rules of the Designated Stock Exchange, and any resolution of members, the directors ofthe Company may, without limiting or affecting any rights previously conferred on the holders of any existing shares or class or series of shares, offer, allot,grant options over or otherwise dispose of shares to such persons, at such times and upon such terms and conditions as the Company may by resolutionof directors determine. The directors shall not issue more shares than the maximum number provided for in the Memorandum.12.The Company may issue fully paid, partly paid or nil paid shares as well as bonus shares. A partly paid or nil paid share or a share issued for a promissorynote or other written obligation for payment of a debt may be issued subject to forfeiture in the manner prescribed in these Articles.13.Shares in the Company may be issued for consideration in any form, including money, a promissory note or other obligation to contribute money orproperty, real property, personal property (including goodwill and knowhow) services rendered or a contract for future services and the amount of suchconsideration shall be determined by resolution of directors, except that in the case of shares with par value, the amount shall not be less than the parvalue, and in the absence of fraud the decision of the directors as to the value of the consideration received by the Company in respect of the issue isconclusive unless a question of law is involved.14.Before issuing shares for a consideration other than money, the directors shall pass a resolution stating;(a)the amount to be credited for the issue of the shares;(b)their determination of the reasonable present cash value of the nonmoney consideration for the issue; and(c)that, in their opinion, the present cash value of the nonmoney consideration for the issue is not less than the amount to be credited for the issueof the shares.15.A share issued by the Company upon conversion of, or in exchange for, another share or a debt obligation or other security in the Company, shall betreated for all purposes as having been issued for money equal to the consideration received or deemed to have been received by the Company in respectof the other share, debt obligation or security.16.Treasury shares may be disposed of by the Company on such terms and conditions (not otherwise inconsistent with these Articles) as the Company mayby resolution of directors determine.17.Subject to these Articles, the Company may purchase, redeem or otherwise acquire and hold its own shares save that the Company may not purchase,redeem or otherwise acquire its own shares without the consent of the member whose shares are to be purchased, redeemed or otherwise acquired unlessthe Company is permitted by the Act or any other provision in the Memorandum or Articles to purchase, redeem or otherwise acquire the shares withouttheir consent.818.No purchase, redemption or other acquisition of shares shall be made unless the directors determine by resolution of the directors that immediately after thepurchase, redemption or other acquisition the value of the Company’s assets will exceed its liabilities and the Company will be able to pay its debts as theyfall due.19.Sections 60 (Process for acquisition of own shares), 61 (Offer to one or more shareholders) and 62 (Shares redeemed otherwise than at the option ofcompany) of the Act shall not apply to the Company.20.A determination by the directors under Article 18 is not required;(a)the Company redeems a share or shares pursuant to a right of a member to have his shares redeemed or to have his shares exchanged for moneyor other property of the Company; or(b)by virtue of the provisions of Section 179 of the Act.21.Shares that the Company purchases, redeems or otherwise acquires pursuant to Article 17 may be cancelled or held as treasury shares except to the extentthat such shares are in excess of 80 percent of the issued shares of the Company in which case they shall be cancelled but they shall be available forreissue.22.Shares in the Company shall only be held as treasury shares where the directors of the Company resolve as such and the number of shares acquired, whenaggregated with shares of the same class already held by the Company as treasury shares, does not exceed 50% of the shares of that class previouslyissued by the Company, excluding shares that have been cancelled. All rights and obligations attaching to a treasury share are suspended and shall not beexercised by or against the Company while it holds the share as a treasury share. Treasury shares may be reissued by the Company as new shares.23.The Company shall keep a register of members containing;(a)the names and addresses of the persons who hold registered shares in the Company;(b)the number of each class and series of registered shares held by each member;(c)the date on which the name of each member was entered in the register of members;(d)the date on which any person ceased to be a member; and(e)such other information as may be prescribed pursuant to the Act.24.The register of members may be in any such form as the directors may approve but if it is in magnetic, electronic or other data storage form, the companymust be able to produce legible evidence of its contents.25.The original or a copy of the register of members shall be kept at the registered office of the Company or at the office of the registered agent of theCompany.26.A share is deemed to be issued when the name of the member is entered in the register of members.27.Subject to the Act and the rules of the Designated Stock Exchange, the board of directors without further consultation with the holders of any shares orSecurities may resolve that any class or series of shares or other Securities from time to time in issue or to be issued (including shares in issue at the date ofthe adoption of these Articles) may be issued, held, registered and converted to uncertificated form.28.Conversion of shares held in certificated form into shares held in uncertificated form, and vice versa, may be made in such manner as the board of directors,in its absolute discretion, may think fit. The Company or any duly authorised transfer agent (a “Transfer Agent”) shall enter on the register of membershow many shares are held by each member in uncertificated form and in certificated form and shall maintain the register of members. Notwithstanding anyprovision of these Articles, a class or series of shares shall not be treated as two classes by virtue only of that class or series comprising both certificatedshares and uncertificated Shares or as a result of any provision of these Articles which apply only in respect of certificated or uncertificated shares.9MORTGAGES AND CHARGES OF REGISTERED SHARES29.Members may mortgage or charge their registered shares in the Company with such mortgage or charge being evidenced in writing and signed by, or withthe authority of the registered holder of a registered share to which the mortgage or charge relates. The Company shall give effect to the terms of any validmortgage or charge except insofar as it may conflict with any requirements herein contained for consent to the transfer of shares.30.In the case of the mortgage or charge of registered shares there may be entered in the share register of the Company at the request of the registered holderof such shares(a)a statement that the shares are mortgaged or charged;(b)the name of the mortgagee or chargee; and(c)the date on which the aforesaid particulars are entered in the share register.31.Where particulars of a mortgage or charge are entered in the register of members, such particulars shall be cancelled(a)with the written consent of the named mortgagee or chargee or anyone authorized to act on his behalf; or(b)upon evidence satisfactory to the directors of the discharge of the liability secured by the mortgage or charge and the issue of such indemnities asthe directors shall consider necessary or desirable.32.Whilst particulars of a mortgage or charge over registered shares are entered in the register of members pursuant to the preceding articles no transfer ofany share comprised therein shall be effected without the written consent of the named mortgagee or chargee or anyone authorized to act on his behalf.FORFEITURE33.When shares not fully paid on issue or issued for a promissory note or other written obligation for payment of a debt have been issued subject toforfeiture, the following provisions shall apply.34.Written notice specifying a date for payment to be made and the shares in respect of which payment is to be made shall be served on the member whodefaults in making payment pursuant to a promissory note or other written obligations to pay a debt.35.The written notice specifying a date for payment shall(a)name a further date not earlier than the expiration of 14 days from the date of service of the notice on or before which payment required by thenotice is to be made; and(b)contain a statement that in the event of nonpayment at or before the time named in the notice the shares, or any of them, in respect of whichpayment is not made will be liable to be forfeited.36.Where a written notice has been issued and the requirements of the notice have not been complied with within the prescribed time, the directors may at anytime before tender of payment forfeit and cancel the shares to which the notice relates.37.The Company is under no obligation to refund any moneys to the member whose shares have been forfeited and cancelled pursuant to these provisions.Upon forfeiture and cancellation of the shares the member is discharged from any further obligation to the Company with respect to the shares forfeitedand cancelled.10LIEN38.The Company shall have a first and paramount lien on every share issued for a promissory note or for any other binding obligation to contribute money orproperty or any combination thereof to the Company, and the Company shall also have a first and paramount lien on every share standing registered in thename of a member, whether singly or jointly with any other person or persons, for all the debts and liabilities of such member or his estate to the Company,whether the same shall have been incurred before or after notice to the Company of any interest of any person other than such member, and whether thetime for the payment or discharge of the same shall have actually arrived or not, and notwithstanding that the same are joint debts or liabilities of suchmember or his estate and any other person, whether a member of the Company or not. The Company’s lien on a share shall extend to all distributionspayable thereon. The directors may at any time either generally, or in any particular case, waive any lien that has arisen or declare any share to be wholly orin part exempt from the provisions of this Article.39.In the absence of express provisions regarding sale in the promissory note or other binding obligation to contribute money or property, the Company maysell, in such manner as the directors may by resolution of directors determine, any share on which the Company has a lien, but no sale shall be made unlesssome sum in respect of which the lien exists is presently payable nor until the expiration of twentyone days after a notice in writing, stating and demandingpayment of the sum presently payable and giving notice of the intention to sell in default of such payment, has been served on the holder for the timebeing of the share.40.The net proceeds of the sale by the Company of any shares on which it has a lien shall be applied in or towards payment of discharge of the promissorynote or other binding obligation to contribute money or property or any combination thereof in respect of which the lien exists so far as the same ispresently payable and any residue shall (subject to a like lien for debts or liabilities not presently payable as existed upon the share prior to the sale) bepaid to the holder of the share immediately before such sale. For giving effect to any such sale the directors may authorize some person to transfer theshare sold to the purchaser thereof. The purchaser shall be registered as the holder of the share and he shall not be bound to see to the application of thepurchase money, nor shall his title to the share be affected by any irregularity or invalidity in the proceedings in reference to the sale.TRANSFER OF SHARES41.Registered shares in the Company are transferred by a written instrument of transfer signed by the transferor and containing the name and address of thetransferee. The instrument of transfer shall be signed by the transferee if registration as a holder of the share shall impose a liability to the Company on thetransferee. The instrument of transfer of a registered share shall be sent to the Company for registration.42.The board of directors may resolve that interests in shares in the form of depositary receipts may be transferred or otherwise dealt with in accordance withthe regulations and practices instituted by the operator of the Relevant System and any holder of interests in shares shall be entitled to transfer suchinterests by means of such Relevant System and the operator of the Relevant System shall act as agent of the holders of such interests for the purposes ofthe transfer of those interests.43.The register of members may be closed at such times and for such periods as the board of directors may from time to time determine, upon notice beinggiven by advertisement in such newspapers as may be required by the Act and the practice of the Designated Stock Exchange.44.The transfer of a registered share is effective when the name of the transferee is entered on the register of members.45.If the directors of the Company are satisfied that an instrument of transfer relating to shares has been signed but that the instrument has been lost ordestroyed, they may resolve;(a)to accept such evidence of the transfer of the shares as they consider appropriate; and(b)that the transferee’s name should be entered in the register of members notwithstanding the absence of the instrument of transfer.46.The Company must on the receipt of an instrument of transfer from the transferor or transferee of a registered share in the Company enter the name of thetransferee of the share in the register or members unless the directors, if permitted by the Memorandum or these Articles, resolve by resolution of directorsto refuse or delay the registration of the transfer for reasons that shall be specified in the resolution of directors.11TRANSMISSION OF SHARES47.The personal representative of a deceased member may transfer a share even though the personal representative is not a member at the time of the transfer.48.The personal representative, executor or administrator of a deceased member, the guardian of an incompetent member or the trustee of a bankrupt membershall be the only person recognized by the Company as having any title to his share but they shall not be entitled to exercise any rights as a member of theCompany until they have proceeded as set forth in the next following three Articles.49.The production to the Company of any document which is evidence of probate of the will, or letters of administration of the estate, or confirmation asexecutor, of a deceased member or of the appointment of a guardian of an incompetent member or the trustee of a bankrupt member shall be accepted by theCompany even if the deceased, incompetent or bankrupt member is domiciled outside the British Virgin Islands if the document evidencing the grant ofprobate or letters of administration, confirmation as executor, appointment as guardian or trustee in bankruptcy is issued by a foreign court which hadcompetent jurisdiction in the matter. For the purpose of establishing whether or not a foreign court had competent jurisdiction in such a matter the directorsmay obtain appropriate legal advice. The directors may also require an indemnity to be given by the executor, administrator, guardian or trustee inbankruptcy.50.The Company may enter in the register of members the name of any person becoming entitled by operation of law or otherwise to a share or shares inconsequence of the death, incompetence or bankruptcy upon such evidence being produced as may reasonably be required by the directors.51.Any person who has become entitled to a share or shares in consequence of the death, incompetence or bankruptcy of any member may, instead of beingregistered himself, request in writing that some person to be named by him be registered as the transferee of such share or shares and such request shalllikewise be treated as if it were a transfer.52.What amounts to incompetence on the part of a person is a matter to be determined by the court having regard to all the relevant evidence and thecircumstances of the case.REDUCTION OR INCREASE IN AUTHORISED AND UNISSUED SHARES48.The Company may amend the Memorandum to increase or reduce the maximum number of shares the Company is authorised to issue and may in respect ofany unissued shares increase or reduce the number of such shares, or effect any combination of the foregoing.49.The Company may(1)(a) divide its shares, including issued shares, into a larger number of shares; or (b) combine its shares, including issued shares, into a smallernumber of shares.(2)A division or combination of shares, including issued shares, of a class or series shall be for a larger or smaller number, as the case may be, ofshares in the same class or series.(3)A company shall not divide its shares under subsection (1)(a) or (2) if it would cause the maximum number of shares that the Company isauthorised to issue by its memorandum to be exceeded.(4)Where shares are divided or combined under this article, the aggregate par value of the new shares must be equal to the aggregate par value of theoriginal shares.MEETINGS AND CONSENTS OF MEMBERS50.The directors of the Company may convene meetings of the members of the Company at such times and in such manner and places within or outside theBritish Virgin Islands as the directors consider necessary or desirable. The Company may hold an annual general meeting, but shall not (unless required bythe applicable rules of the Designated Stock Exchange for so long as the Company’s Securities are listed or traded on the Designated Stock Exchange) beobliged to hold an annual general meeting.51.Upon the written request of members holding 30 percent or more of the outstanding voting shares in the Company the directors shall convene a meeting ofmembers.1252.The directors shall give not less than 7 days notice of meetings of members to those persons whose names on the date the notice is given appear asmembers in the share register of the Company and are entitled to vote at the meeting.53.The directors may fix the date notice is given of a meeting of members as the record date for determining those shares that are entitled to vote at themeeting.54.A meeting of members may be called on short notice:(a)if members holding not less than 90 percent of the total number of shares entitled to vote on all matters to be considered at the meeting, or 90percent of the votes of each class or series of shares where members are entitled to vote thereon as a class or series together with not less than a90 percent majority of the remaining votes, have agreed to short notice of the meeting, or(b)if all members holding shares entitled to vote on all or any matters to be considered at the meeting have waived notice of the meeting and for thispurpose presence at the meeting shall be deemed to constitute waiver.55.The inadvertent failure of the directors to give notice of a meeting to a member, or the fact that a member has not received notice, does not invalidate themeeting.56.A member may be represented at a meeting of members by a proxy who may speak and vote on behalf of the member.57.The instrument appointing a proxy shall be produced at the place appointed for the meeting before the time for holding the meeting at which the personnamed in such instrument proposes to vote.58.An instrument appointing a proxy shall be in substantially the following form or such other form as the Chairman of the meeting shall accept as properlyevidencing the wishes of the member appointing the proxy.(Name of Company)I/Webeing a member of the aboveCompany withshares HEREBY APPOINTofor failing himofto be my/our proxy to vote for me/us at the meeting of members to be held on the dayofand at any adjournment thereof.(Any restrictions on voting to be inserted here.)Signed this day ofMember59.The following shall apply in respect of joint ownership of shares:a.if two or more persons hold shares jointly each of them may be present in person or by proxy at a meeting of members and may speak as a member;b.if only one of the joint owners is present in person or by proxy he may vote on behalf of all joint owners, andc.if two or more of the joint owners are present in person or by proxy they must vote as one.60.A member shall be deemed to be present at a meeting of members if he participates by telephone or other electronic means and all members participating inthe meeting are able to hear each other.61.A meeting of members is duly constituted if, at the commencement of the meeting, there are present in person or by proxy not less than 50 percent of thevotes of the shares or class or series of shares entitled to vote on resolutions of members to be considered at the meeting. If a quorum be present,notwithstanding the fact that such quorum may be represented by only one person then such person may resolve any matter and a certificate signed bysuch person accompanied where such person be a proxy by a copy of the proxy form shall constitute a valid resolution of members.1362.If within two hours from the time appointed for the meeting a quorum is not present, the meeting, if convened upon the requisition of members, shall bedissolved; in any other case it shall stand adjourned to the next business day at the same time and place or to such other time and place as the directorsmay determine, and if at the adjourned meeting there are present within one hour from the time appointed for the meeting in person or by proxy not lessthan one third of the votes of the shares or each class or series of shares entitled to vote on the resolutions to be considered by the meeting, those presentshall constitute a quorum but otherwise the meeting shall be dissolved.63.At every meeting of members, the Chairman of the Board of Directors shall preside as chairman of the meeting. If there is no Chairman of the Board ofDirectors or if the Chairman of the Board of Directors is not present at the meeting, the members present shall choose some one of their number to be thechairman. If the members are unable to choose a chairman for any reason, then the person representing the greatest number of voting shares present inperson or by prescribed form of proxy at the meeting shall preside as chairman failing which the oldest individual member or representative of a memberpresent shall take the chair.64.The chairman may, with the consent of the meeting, adjourn any meeting from time to time, and from place to place, but no business shall be transacted atany adjourned meeting other than the business left unfinished at the meeting from which the adjournment took place.65.At any meeting of the members the chairman shall be responsible for deciding in such manner as he shall consider appropriate whether any resolution hasbeen carried or not and the result of his decision shall be announced to the meeting and recorded in the minutes thereof. If the chairman shall have anydoubt as to the outcome of any resolution put to the vote, he shall cause a poll to be taken of all votes cast upon such resolution, but if the chairman shallfail to take a poll then any member present in person or by proxy who disputes the announcement by the chairman of the result of any vote mayimmediately following such announcement demand that a poll be taken and the chairman shall thereupon cause a poll to be taken. If a poll is taken at anymeeting, the result thereof shall be duly recorded in the minutes of that meeting by the chairman.66.Any person other than an individual shall be regarded as one member and subject to the specific provisions hereinafter contained for the appointment ofrepresentatives of such persons the right of any individual to speak for or represent such member shall be determined by the law of the jurisdiction where,and by the documents by which, the person is constituted or derives its existence. In case of doubt, the directors may in good faith seek legal advice fromany qualified person and unless and until a court of competent jurisdiction shall otherwise rule, the directors may rely and act upon such advice withoutincurring any liability to any member.67.Any person other than an individual which is a member of the Company may by resolution of its directors or other governing body authorize such personas it thinks fit to act as its representative at any meeting of the Company or of any class of members of the Company, and the person so authorized shall beentitled to exercise the same powers on behalf of the person which he represents as that person could exercise if it were an individual member of theCompany.68.The chairman of any meeting at which a vote is cast by proxy or on behalf of any person other than an individual may call for a notarially certified copy ofsuch proxy or authority which shall be produced within 7 days of being so requested or the votes cast by such proxy or on behalf of such person shall bedisregarded.69.Directors of the Company may attend and speak at any meeting of members of the Company and at any separate meeting of the holders of any class orseries of shares in the Company.70.An action that may be taken by the members at a meeting may also be taken by a resolution of members consented to in writing or by telex, telegram, cable,facsimile or other written electronic communication, without the need for any notice, but if any resolution of members is adopted otherwise than by theunanimous written consent of all members, a copy of such resolution shall forthwith be sent to all members not consenting to such resolution. The consentmay be in the form of counterparts, each counterpart being signed by one or more members.14DIRECTORS71.The first directors of the Company shall be appointed by the first registered agent of the Company and thereafter the directors shall be appointed byresolution of members, subject to Article 78, for such term as the members determine. A person shall not be appointed as a director unless he hasconsented in writing to be a director.72.The minimum number of directors shall be one and the maximum number shall be 20. Unless otherwise determined by the Company in a meeting ofshareholders and subject to the requirements of the Memorandum, the directors may by a Resolution of Directors, amend this Regulation 72 to change thenumber of directors. For as long as Securities of the Company are listed or traded on the Designated Stock Exchange, the directors shall include suchnumber of Independent Directors as applicable law, rules or regulations of the Designated Stock Exchange may require for a foreign private issuer as longas the Company is a foreign private issuer.73.Each director shall hold office for the term, if any, fixed by resolution of members or until his earlier death, resignation or removal.74.Where the Company has only one member who is an individual and that member is also the sole director of the Company, that sole member/director may, byinstrument in writing, nominate a person who is not disqualified from being a director of the Company under section 111(1) of the Act as a reserve directorof the Company to act in the place of the sole director in the event of his death.75.The nomination of a person as a reserve director of the Company ceases to have effect if;a.before the death of the sole member/director who nominated him;(i)he resigns as reserve director, or(ii)the sole member/director revokes the nomination in writing; orb.the sole member/director who nominated him ceases to be the sole member/director of the Company for any reason other than his death.76.A director may be removed from office, with or without cause, by a resolution of directors or a resolution of members. For the purposes of this Regulation76, “cause” means the willful and continuous failure by a director to substantially perform his duties to the Company (other than any such failure resultingfrom incapacity due to physical or mental illness) or the willful engaging by the director in gross misconduct materially and demonstrably injurious to theCompany. If a director is removed from office without cause by a resolution of the members, for the purposes of this Regulation, the resolution of memberswill require the affirmative vote of the holders of 66 2/3 percent or more of the outstanding votes of the shares entitled to vote thereon.77.A director may resign his office by giving written notice of his resignation to the Company and the resignation shall have effect from the date the notice isreceived by the Company or from such later date as may be specified in the notice. A director of the Company shall resign forthwith if he is, or becomes,disqualified to act as a director under the Act.78.The directors may at any time by resolution of directors appoint any person to be a director to fill a vacancy. There is a vacancy if a director dies orotherwise ceases to hold office as a director prior to the expiration of his term of office, where his term of office was fixed upon his appointment. Thedirectors may not appoint a director to fill a vacancy for a term exceeding the term that remained when the person who has ceased to be a director left orotherwise ceased to hold office.79.The Company shall keep a register of directors containing:a.the names and addresses of the persons who are directors of the Company or who have been nominated as reserve directors of the Company;b.the date on which each person whose name is entered in the register was appointed as a director of the Company or nominated as a reservedirector of the Company;c.the date on which each person named as a director ceased to be a director of the Company;d.the date on which the nomination of any person nominated as a reserve director ceased to have effect; ande.such other information as may be prescribed pursuant to the Act.1580.The original or a copy of any register of directors shall be kept at the office of the registered agent of the Company.81.The register of directors may be in any such form as the directors may approve but if it is in magnetic, electronic or other data storage form, the companymust be able to produce legible evidence of its contents.82.With the prior or subsequent approval by a resolution of members, the directors may, by a resolution of directors, fix the emoluments of directors withrespect to services to be rendered in any capacity to the Company.83.A director shall not require a share qualification and may be an individual or a company.POWERS OF DIRECTORS84.The business and affairs of the Company shall be managed by the directors who may pay all expenses incurred preliminary to and in connection with theformation and registration of the Company and may exercise all such powers of the Company as are not by the Act or by the Memorandum or theseArticles required to be exercised by the members of the Company, subject to any delegation of such powers as may be authorized by these Articles and tosuch requirements as may be prescribed by a resolution of members; but no requirement made by a resolution of members shall prevail if it be inconsistentwith these Articles nor shall such requirement invalidate any prior act of the directors which would have been valid if such requirement had not been made.Notwithstanding anything in Section 175 of the Act the directors shall have the power to sell, transfer, lease, exchange or otherwise dispose of more thanfifty percent of the assets of the Company without submitting a proposal to or obtaining the consent of the members of the Company.85.If the Company is a whollyowned subsidiary of a holding company a director may when exercising powers or performing duties as a director act in amanner which he believes is in the best interests of the holding company even though it may not be in the best interests of the Company.86.The directors may, by a resolution of directors, appoint any person, including a person who is a director, to be an officer or agent of the Company. Theresolution of directors appointing an agent may authorize the agent to appoint one or more substitutes or delegates to exercise some or all of the powersconferred on the agent by the Company.87.Every officer or agent of the Company has such powers and authority of the directors, including the power and authority to affix the Seal, as are set forth inthese Articles or in the resolution of directors appointing the officer or agent, except that no agent has any power or authority with respect to thefollowing;a.to amend the memorandum or articles;b.to change the registered office or agent;c.to designate committees of directors;d.to delegate powers to a committee of directors;e.to appoint or remove directors;f.to appoint or remove an agent;g.to fix emoluments of directors;h.to approve a plan of merger, consolidation or arrangement;i.to make a declaration of solvency for the purposes of section 198(1)(a) of the Act or to approve a liquidation plan;j.to make a determination under section 57(1) of the Act that the company will, immediately after a proposed distribution, satisfy the solvency test;ork.to authorise the Company to continue as a company incorporated under the laws of a jurisdiction outside the British Virgin Islands.1688.Any director which is a body corporate may appoint any person its duly authorized representative for the purpose of representing it at meetings of theBoard of Directors or with respect to unanimous written consents.89.The continuing directors may act notwithstanding any vacancy in their body, save that if their number is reduced to their knowledge below the numberfixed by or pursuant to these Articles as the necessary quorum for a meeting of directors, the continuing directors or director may act only for the purposeof appointing directors to fill any vacancy that has arisen or for summoning a meeting of members.90.The directors may by resolution of directors exercise all the powers of the Company to borrow money and to mortgage or charge its undertakings andproperty or any part thereof, to issue debentures, debenture stock and other securities whenever money is borrowed or as security for any debt, liability orobligation of the Company or of any third party.91.All cheques, promissory notes, drafts, bills of exchange and other negotiable instruments and all receipts for moneys paid to the Company, shall be signed,drawn, accepted, endorsed or otherwise executed, as the case may be, in such manner as shall from time to time be determined by resolution of directors.92.The Company shall keep a register of all relevant charges created by the Company showing:a.if the charge is a charge created by the Company, the date of its creation or if the charge is existing on property acquired by the Company, the dateon which the property was acquired;b.a short description of the liability secured by the charge;c.a short description of the property charged;d.the name and address of the trustee for the security, or if there is no such trustee the name and address of the chargee;e.unless the charge is a security to bearer, the name and address of the holder of the charge;f.details of any prohibition or restriction , if any, contained in the instrument creating the charge on the power of the company to create any futurecharge ranking in priority to or equally with the charge; andg.such other information as may be prescribed pursuant to the Act.93.The original or a copy of the register of charges shall be kept at the registered office of the Company or at the office of the registered agent of the Company.PROCEEDINGS OF DIRECTORS94.The directors of the Company or any committee thereof may meet at such times and in such manner and places within or outside the British Virgin Islandsas the directors may determine to be necessary or desirable. Any one or more directors may convene a meeting of directors.95.A director shall be deemed to be present at a meeting of directors if he participates by telephone or other electronic means and all directors participating inthe meeting are able to hear each other.96.A director shall be given not less than 3 days notice of meetings of directors, but a meeting of directors held without 3 days notice having been given to alldirectors shall be valid if all the directors entitled to vote at the meeting who do not attend, waive notice of the meeting and for this purpose, the presenceof a director at a meeting shall constitute waiver on his part. The inadvertent failure to give notice of a meeting to a director, or the fact that a director hasnot received the notice, does not invalidate the meeting.1797.A director may by a written instrument appoint an alternate who need not be a director and an alternate is entitled to attend meetings in the absence of thedirector who appointed him and to vote or consent in place of the director.98.A meeting of directors is duly constituted for all purposes if at the commencement of the meeting there are present in person or by alternate not less thanone half of the total number of directors, unless there are only 2 directors in which case the quorum shall be 2.99.If the Company shall have only one director the provisions herein contained for meetings of the directors shall not apply but such sole director shall havefull power to represent and act for the Company in all matters as are not by the Act or the Memorandum or these Articles required to be exercised by themembers of the Company and in lieu of minutes of a meeting shall record in writing and sign a note or memorandum of all matters requiring a resolution ofdirectors. Such a note or memorandum shall constitute sufficient evidence of such resolution for all purposes.100.At every meeting of the directors the Chairman of the Board of Directors shall preside as chairman of the meeting. If there is no Chairman of the Board ofDirectors or if the Chairman of the Board of Directors is not present at the meeting the Vice Chairman of the Board of Directors shall preside. If there is noVice Chairman of the Board of Directors or if the Vice Chairman of the Board of Directors is not present at the meeting the directors present shall choosesome one of their number to be chairman of the meeting.101.An action that may be taken by the directors or a committee of directors at a meeting may also be taken by a resolution of directors or a committee ofdirectors consented to in writing or by telex, telegram, cable, facsimile or other written electronic communication by all directors or all members of thecommittee as the case may be, without the need for any notice. The consent may be in the form of counterparts, each counterpart being signed by one ormore directors.102.The directors shall cause the following records to be kept:a.minutes of all meetings of directors, members, committees of directors and committees of members; andb.copies of all resolutions consented to by directors, members, committees of directors and committees of members.103.The resolutions, records and minutes referred to in the preceding Article shall be kept at the registered office of the Company, its principal place ofbusiness or at such other place as the directors determine.104.The directors may, by resolution of directors, designate one or more committees, each consisting of one or more directors.105.Subject to the following Article, each committee of directors has such powers and authorities of the directors, including the power and authority to affix theSeal, as are set forth in the resolution of directors establishing the committee.106.The directors have no power to delegate the following powers to a committee of directors;a.to amend the memorandum or articles;b.to change the registered office or agent;c.to designate committees of directors;d.to delegate powers to a committee of directors;e.to appoint or remove directors;f.to appoint or remove an agent;g.to fix emoluments of directors;18h.to approve a plan of merger, consolidation or arrangement;i.to make a declaration of solvency for the purposes of section 198(1)(a) or to approve a liquidation plan;j.to make a determination under section 57(1) that the company will, immediately after a proposed distribution, satisfy the solvency test; ork.to authorise the company to continue as a company incorporated under the laws of a jurisdiction outside the British Virgin Islands.Paragraphs (c) and (d) do not prevent a committee of directors, where authorised by the directors, from appointing a subcommittee and delegating powersexercisable by the committee to the subcommittee.107.The meetings and proceedings of each committee of directors consisting of 2 or more directors shall be governed mutatis mutandis by the provisions ofthese Articles regulating the proceedings of directors so far as the same are not superseded by any provisions in the resolution establishing the committee.108.Without prejudice to the freedom of the directors to establish any other committee, if the shares (or depositary receipts therefore) are listed or quoted onthe Designated Stock Exchange, and if required by the Designated Stock Exchange, the directors shall establish and maintain an audit committee as acommittee of the board of directors, the composition and responsibilities of which shall comply with the rules and regulations of the SEC and theDesignated Stock Exchange. The audit committee shall meet at least once every financial quarter, or more frequently as circumstances dictate.109.The Company shall adopt a formal written audit committee charter and review and assess the adequacy of the formal written charter on an annual basis.The charter shall specify the responsibilities of the Audit Committee which shall include responsibility for, among other things, ensuring its receipt from theoutside auditors of the Company of a formal written statement delineating all relationships between the auditor and the Company, and the AuditCommittee’s responsibility for actively engaging in a dialogue with the auditor with respect to any disclosed relationships or services that may impact theobjectivity and independence of the auditor take appropriate action to oversee the independence of the outside auditor. In addition, the Audit Committee isresponsible for reviewing potential conflict of interest situations and approving all Related Party Transactions.110.Without prejudice to the freedom of the directors to establish any other committees, the Board may establish a Stock Option Committee to administer theCompany’s stock option plans, including authority to make and modify awards under such plans. For so long as the Securities of the Company are listed ortraded on the Designated Stock Exchange, the Stock Option Committee shall have at least two Independent Directors. The Stock Option Committee willadminister the Company’s stock option plans, including the authority to make and modify awards under such plans.111.Without prejudice to the freedom of the directors to establish any other committees, the Board may establish a Nominating Committee to assist the Board inidentifying qualified individuals to become members of the Board.OFFICERS112.The Company may by resolution of directors appoint officers of the Company at such times as shall be considered necessary or expedient. Such officersmay consist of a Chairman of the Board of Directors, a Vice Chairman of the Board of Directors, a President and one or more Vice Presidents, Secretaries andTreasurers and such other officers as may from time to time be deemed desirable. Any number of offices may be held by the same person.113.The officers shall perform such duties as shall be prescribed at the time of their appointment subject to any modification in such duties as may beprescribed thereafter by resolution of directors or resolution of members, but in the absence of any specific allocation of duties it shall be the responsibilityof the Chairman of the Board of Directors to preside at meetings of directors and members, the Vice Chairman to act in the absence of the Chairman, thePresident to manage the day to day affairs of the Company, the Vice Presidents to act in order of seniority in the absence of the President but otherwise toperform such duties as may be delegated to them by the President, the Secretaries to maintain the share register, minute books and records (other thanfinancial records) of the Company and to ensure compliance with all procedural requirements imposed on the Company by applicable law, and the Treasurerto be responsible for the financial affairs of the Company.19114.Subject to the rules of the Designated Stock Exchange, the emoluments of all officers shall be fixed by resolution of directors.115.The officers of the Company shall hold office until their successors are duly elected and qualified, but any officer elected or appointed by the directors maybe removed at any time, with or without cause, by resolution of directors. Any vacancy occurring in any office of the Company may be filled by resolutionof directors.CONFLICT OF INTERESTS116.A director of the Company shall, forthwith after becoming aware of the fact that he is interested in a transaction entered into or to be entered into by theCompany, disclose the interest to all other directors of the Company.117.A director of the Company is not required to comply with Article 112 if;a.the transaction or proposed transaction is between the director and the Company; andb.the transaction or proposed transaction is or is to be entered into in the ordinary course of the company’s business and on usual terms andconditions.118.For the purposes of Article 112 a disclosure to all other directors to the effect that a director is a member, director or officer of another named entity or has afiduciary relationship with respect to the entity or a named individual and is to be regarded as interested in any transaction which may, after the date of theentry or disclosure, be entered into with that entity or individual, is a sufficient disclosure of interest in relation to that transaction.119.A.A director of the Company who is interested in a transaction entered into or to be entered into by the Company may:(i)vote on a matter relating to the transaction;(ii)attend a meeting of directors at which a matter relating to the transaction arises and be included among the directors present at the meeting for thepurposes of a quorum; and(iii)sign a document on behalf of the Company, or do any other thing in his capacity as a director, that relates to the transaction,and, subject to compliance with the Act shall not, by reason of his office be accountable to the Company for any benefit which he derives from suchtransaction and no such transaction shall be liable to be avoided on the grounds of any such interest or benefit.119.B.For so long the Securities of the Company are listed or traded on the Designated Stock Exchange, the Company shall conduct an appropriate review of allmaterial Related Party Transactions on an ongoing basis and shall utilize the Audit Committee for the review and approval of potential conflicts of interestsituations.INDEMNIFICATION120.Subject to the limitations hereinafter provided the Company may indemnify against all expenses, including legal fees, and against all judgments, fines andamounts paid in settlement and reasonably incurred in connection with legal, administrative or investigative proceedings any person who;a.is or was a party or is threatened to be made a party to any threatened, pending or completed proceedings, whether civil, criminal, administrative orinvestigative, by reason of the fact that the person is or was a director, an officer or a liquidator of the Company; orb.is or was, at the request of the Company, serving as a director of, or in any other capacity is or was acting for, another body corporate or apartnership, joint venture, trust or other enterprise.20121.The Company may only indemnify a person if the person acted honestly and in good faith in what he believed to be in the best interests of the Companyand, in the case of criminal proceedings, the person had no reasonable cause to believe that his conduct was unlawful.122.For the purposes of the preceding Article, a director acts in the best interests of the Company if he acts in the best interests of;a.the Company’s holding company; orb.a shareholder or shareholders of the Company; in either case, in the circumstances specified in Article 85.123.The decision of the directors as to whether the person acted honestly and in good faith and with a view to the best interests of the Company and as towhether the person had no reasonable cause to believe that his conduct was unlawful is, in the absence of fraud, sufficient for the purposes of theseArticles, unless a question of law is involved.124.The termination of any proceedings by any judgment, order, settlement, conviction or the entering of a nolle prosequi does not, by itself, create apresumption that the person did not act honestly and in good faith and with a view to the best interests of the Company or that the person had reasonablecause to believe that his conduct was unlawful.Consolidated Statements of Changes in Stockholder’s EquityF5Consolidated Statements of Cash FlowsF6Notes to Consolidated Financial StatementsF7 F22F1REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRMTo the Shareholder and the Sole Director ofLK Technology Ltd.Opinion on the Consolidated Financial StatementsWe have audited the accompanying consolidated balance sheets of LK Technology Ltd. and. subsidiaries (the “Company”) as of December 31, 2017 and 2016, andthe related consolidated statements of operations and comprehensive loss, changes in shareholder’s equity and cash flows for each of the years then ended, andthe related notes (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in allmaterial respects, the consolidated financial position of the Company as of December 31, 2017 and 2016, and the consolidated results of its operations and its cashflows for each of the years then ended, in conformity with accounting principles generally accepted in the United States of America.Basis for OpinionThese consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’sconsolidated financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (UnitedStates) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules andregulations of the Securities and Exchange Commission and the PCAOB.We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonableassurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have,nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internalcontrol over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting.Accordingly, we express no such opinion.An independent member firm of Moore Stephens International Limited – members in principal cities throughout the worldOur audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, andperforming procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in theconsolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well asevaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion.Certified Public AccountantsWe have served as the Company’s auditor since 2018.Hong KongMay 25, 2018F2LK TECHNOLOGY LTD. AND SUBSIDIARIESCONSOLIDATED BALANCE SHEETS(IN U.S. DOLLARS)As of December 31,20172016AssetsCurrent assets:Cash and cash equivalents$72,379$83,843Accounts receivable, net of allowance for doubtful accounts9,729,6251,865,836Other receivables and prepayment2,376,7452,287,934Amounts due from related parties11,760,692Total current assets23,939,4414,237,613Property and equipment, net5,044,8727,771,027Intangible assets, net1,154,1971,682,445Goodwill7,239,9367,239,936Amount due from a related party204,412183,811TOTAL ASSETS37,582,85821,114,832LiabilitiesCurrent liabilities:Accounts payable8,784,5186,446,584Accrued liabilities and other payables12,962,91211,329,613Amounts due to related parties3,563,68316,129,323Total current liabilities25,311,11333,905,520Total liabilities25,311,11333,905,520Commitments and contingenciesShareholder’s Equity (Deficit)Share capitalCommon stock, $1 par value per share; 50,000 shares authorized as of December 31, 2017 and 2016, 1 share issued andoutstanding as of December 31, 2017 and 201611Additional paidin capital41,819,68510,037,469Accumulated deficit(29,936,158)(23,125,704)Accumulated other comprehensive income (loss)388,217297,546Total Shareholder’s Equity (Deficit)12,271,745(12,790,688)TOTAL LIABILITIES AND SHAREHOLDER’S EQUITY (DEFICIT)$37,582,858$21,114,832F3LK TECHNOLOGY LTD. AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS(IN U.S. DOLLARS)For the years endedDecember 31,20172016Revenues$26,082,417$5,233,145Less: Cost of revenues5,547,7796,315,504Less: Operating expenses:Selling and marketing23,908,7336,209,804General and administrative2,451,2492,108,854Research and development1,046,1982,882,202Total operating expenses27,406,18011,200,860Loss from operations(6,871,542)(12,283,219)Other income (expense):Interest expense(26,611)(4,412)Foreign exchange gains (losses)350,679(298,257)Loss from investment(428,571)Other income (expense), net(262,980)(34,572)Total other income (expense), net61,088(765,812)Loss before income taxes(6,810,454)(13,049,031)Income taxesNet loss$(6,810,454)$(13,049,031)Other comprehensive income:Foreign currency translation adjustment90,671387,375Total comprehensive loss$(6,719,783)$(12,661,656)F4LK TECHNOLOGY LTD. AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDER’S EQUITY(IN U.S. DOLLARS)Accumulated otherTotalOrdinary sharesAdditionalpaidin AccumulatedcomprehensiveIncomeShareholder’sEquity SharesAmountcapitaldeficits(loss)(Deficit)Balance as of December 31, 20151$ 1$8,250,505$(10,076,673)$(89,829)$(1,915,996)Capital contribution from C Media1,786,9641,786,964Net loss(13,049,031)(13,049,031)Foreign currency translation adjustment387,375387,375Balance as of December 31, 20161110,037,469(23,125,704)297,546(12,790,688)Capital contribution from C Media31,782,21631,782,216Net loss(6,810,454)(6,810,454)Foreign currency translation adjustment90,67190,671Balance as of December 31, 20171$1$41,819,685$(29,936,158)$388,217$12,271,745F5LK TECHNOLOGY LTD. AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF CASH FLOWS(IN U.S. DOLLARS)For the years endedDecember 31,20172016CASH FLOWS FROM OPERATING ACTIVITIES:Net loss$(6,810,454)$(13,049,031)Depreciation and amortization3,316,1813,245,161Loss on disposal of property and equipment115,19373,022Increase in allowance for doubtful accounts445,39562,591Changes in assets and liabilitiesAccounts receivable(7,933,730)(1,507,296)Other receivables and prepayment(2,202,960)2,873,984Accounts payable2,230,5434,757,457Accrued liabilities and other payables1,866,1377,483,441Net cash (used in) provided by operating activities(8,973,695)3,939,329CASH FLOWS FROM INVESTING ACTIVITIES:Purchase of property and equipment(12,689)(3,554,258)Proceeds from disposal of property and equipment29,942Net cash provided by (used in) investing activities17,253(3,554,258)CASH FLOWS FROM FINANCING ACTIVITIES:Advances from related parties8,938,290(1,197,870)Net cash provided by (used in) financing activities8,938,290(1,197,870)Effect of exchange rate changes6,688(32,746)Net decrease in cash and cash equivalents(11,464)(845,545)Cash and cash equivalents, at beginning of year83,843929,388Cash and cash equivalents, at end of year$72,379$83,843Supplemental cash flow disclosures:Interest paid26,6114,412Income taxes paidF6LK TECHNOLOGY LTD. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS(IN U.S. DOLLARS)NOTE 1 – DESCRIPTION OF BUSINESS AND ORGANIZATIONStar Chariot Limited was incorporated in the British Virgin Islands (“BVI”) as an exempted limited liability company on March 3, 2011. On January 18, 2018, it wasrenamed as LK Technology Ltd. (“LK Technology ” or the “Company”).LK Technology, its subsidiaries and its variable interest entities (“VIEs”) (collectively the “Group”) operate mobile application service for longdistance travel in thePeople’s Republic of China (the “PRC”). The core mobile application product, Luokuang, is made as an LBSsocial contents and services distribution platform. Itoffers functions based on various travel scenarios, e.g. information, entertainment, travel, ecommerce, O2O, advertising, etc.As of December 31, 2017, details of the Company’s subsidiaries and VIEs are as follows:NameDate ofincorporationPlace ofincorporationPercentage oflegal ownershipSubsidiaries:MMB LimitedApr 11, 2013Hong Kong100%Mobile Media (China) LimitedNov 6, 2007Hong Kong100%Zhong Chuan Tian Xia Information and Technology (Beijing) LimitedFeb 1, 2013PRC100%Zhong Chuan Tian Xia Information and Technology (Shenzhen) LimitedDec 23, 2010PRC100%VIEs:Beijing Zhong Chuan Shi Xun Technology Limited (“Zhong Chuan Shi Xun”)May 17, 2004PRC100%Jiangsu Zhong Chuan Rui You Information and Technology Limited (“Zhong Chuan Rui You”)May 26, 2011PRC100%Huoerguosi Luokuang Information and Technology Limited (“Huoerguosi Luokuang”)Jul 19, 2017PRC100%Shenzhen Jiu Zhou Shi Dai Digital and Technology Limited (“Jiu Zhou Shi Dai”)Nov 26, 2004PRC100%F7NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIESBasis of presentationThe consolidated financial statements of the Group have been prepared in accordance with accounting principles generally accepted in the United States of America(“US GAAP”).The Group incurred losses from operations of $6,871,542 and $12,283,219 for the years ended December 31, 2017 and 2016, respectively. As of December 31, 2017, theGroup had a shareholder’s equity of $12,271,145. The Group had negative cash flows from operating activities for the year ended December 31, 2017 of $8,973,695.As of December 31, 2017, the Group had cash and cash equivalents of $72,379 and a working capital deficit of $1,371,672. From 2018 and onwards, the Group willfocus on improving operation efficiency and cost reduction, and enhancing marketing functions to attract more users. The Group regularly monitors its current andexpected liquidity requirements to ensure that it maintains sufficient cash balances and accessible credit to meet its liquidity requirements in the short and long term.The parent company continues to provide cash flow to the Group. Based on working capital conditions and forecast for future operations, the Group believes that itwill be able to meet its payment obligations and other commitments for at least the following twelve months.Principles of consolidationThe consolidated financial statements include the financial statements of the Company, its subsidiaries, including the whollyforeign owned enterprises (“WFOEs”),and VIEs for which the Company is the primary beneficiary. All transactions and balances among the Company, its subsidiaries and consolidated VIEs have beeneliminated upon consolidation. The results of subsidiaries and consolidated VIEs acquired or disposed of are recorded in the consolidated statements of operationsfrom the effective date of acquisition or up to the effective date of disposal, as appropriate.A subsidiary is an entity in which (i) the Company directly or indirectly controls more than 50% of the voting power; or (ii) the Company has the power to appoint orremove the majority of the members of the board of directors or to cast a majority of votes at the meeting of the board of directors or to govern the financial andoperating policies of the investee pursuant to a statute or under an agreement among the shareholders or equity holders. A VIE is required to be consolidated by theprimary beneficiary of the entity if the equity holders in the entity do not have the characteristics of a controlling financial interest or do not have sufficient equity atrisk for the entity to finance its activities without additional subordinated financial support from other parties.F8To comply with the PRC legal restrictions on foreign ownership of companies that operate mobile application services, the Group operates in such restricted servicesin the PRC through certain PRC domestic companies, whose equity interests are held by certain management members or founders of the Group. Part of theregistered capital of these PRC domestic companies was funded by certain management members or founders of the Group. The Group has entered into certainexclusive business services agreements with these PRC domestic companies, which entitle it to receive a majority of their residual returns and make it obligatory forthe Group to absorb a majority of the risk of losses from their activities. In addition, the Group has entered into certain agreements with those management membersor founders, including equity interest pledge agreements of the equity interests held by those management members or founders and exclusive option agreements toacquire the equity interests in these companies when permitted by the PRC laws, rules and regulations.Details of the typical VIE structure of the Group’s significant consolidated VIEs, primarily domestic companies associated with the operations such as Zhong ChuanShi Xun, Zhong Chuan Rui You, Huoerguosi Luokuang and Jiu Zhou Shi Dai, are set forth below:(i)Contracts that give the Group effective control of VIEsExclusive option agreementsThe VIE equity holders have granted the WFOEs exclusive call options to purchase their equity interest in the VIEs at an exercise price equal to the higherof (i) the registered capital in the VIEs; and (ii) the minimum price as permitted by applicable PRC laws. Each relevant VIE has further granted the relevantWFOE an exclusive call option to purchase its assets at an exercise price equal to the book value of the assets or the minimum price as permitted byapplicable PRC laws, whichever is higher. The WFOEs may nominate another entity or individual to purchase the equity interest or assets, if applicable,under the call options. Each call option is exercisable subject to the condition that applicable PRC laws, rules and regulations do not prohibit completion ofthe transfer of the equity interest or assets pursuant to the call option. Each WFOE is entitled to all dividends and other distributions declared by the VIE,and the VIE equity holders have agreed to give up their rights to receive any distributions or proceeds from the disposal of their equity interests in the VIEwhich are in excess of the original registered capital that they contributed to the VIE, and to pay any such distributions or premium to the WFOE. Theexclusive call option agreements remain in effect until the equity interest or assets that are the subject of such agreements are transferred to the WFOEs.Equity pledge agreementsPursuant to the relevant equity pledge agreements, the relevant VIE equity holders have pledged all of their interests in the equity of the VIEs as acontinuing first priority security interest in favor of the corresponding WFOEs to secure the performance of obligations by the VIEs and/or the equityholders under the other structure contracts. Each WFOE is entitled to exercise its right to dispose of the VIE equity holders’ pledged interests in the equityof the VIE and has priority in receiving payment by the application of proceeds from the auction or sale of such pledged interests, in the event of anybreach or default under the loan agreement or other structure contracts, if applicable. These equity pledge agreements remain in force for the duration ofthe relevant loan agreement and other structure contracts.F9(ii)Contracts that enable the Group to receive substantially all of the economic benefits from the VIEsExclusive business services agreementsEach relevant VIE has entered into an exclusive business services agreement with the respective WFOE, pursuant to which the relevant WFOE providesexclusive business services to the VIE. In exchange, the VIE pays a service fee to the WFOE which typically amounts to what would be substantially all ofthe VIE’s pretax profit, resulting in a transfer of substantially all of the profits from the VIE to the WFOE.Other arrangementsThe exclusive call option agreements described above also enable the Group to receive substantially all of the economic benefits from the VIEs by typicallyentitling the WFOEs to all dividends and other distributions declared by the VIEs and to any distributions or proceeds from the disposal by the VIE equityholders of their equity interests in the VIEs that are in excess of the original registered capital that they contributed to the VIEs.Based on these contractual agreements, the Group believes that the PRC domestic companies as described above should be considered as VIEs because the equityholders do not have significant equity at risk nor do they have the characteristics of a controlling financial interest. Given that the Group is the primary beneficiaryof these PRC domestic companies, the Group believes that these VIEs should be consolidated based on the structure as described above.Under the contractual arrangements with the consolidated VIEs, the Group has the power to direct activities of the consolidated VIEs and can have assetstransferred out of the consolidated VIEs under its control. Therefore, the Group considers that there is no asset in any of the consolidated VIEs that can be usedonly to settle obligations of the consolidated VIEs, except for registered capital and PRC statutory reserves. As all consolidated VIEs are incorporated as limitedliability companies under the Company Law of the PRC, creditors of the consolidated VIEs do not have recourse to the general credit of the Group for any of theliabilities of the consolidated VIEs.Currently there is no contractual arrangement which requires the Group to provide additional financial support to the consolidated VIEs. However, as the Groupconducts its businesses primarily based on the licenses and approvals held by its consolidated VIEs, the Group has provided and will continue to provide financialsupport to the consolidated VIEs considering the business requirements of the consolidated VIEs, as well as the Group’s own business objectives in the future.F10Use of estimatesThe preparation of financial statements in conformity with US GAAP requires the Group to make estimates and assumptions that affect the reported amounts ofassets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expensesduring the reporting period. The most significant estimates are the allowance for doubtful accounts, the useful lives of property and equipment and intangibleassets, impairment of longlived assets and goodwill. Actual results could differ from those estimates.Fair value measurementsFair value is the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at themeasurement date under current market conditions. When determining the fair value measurements for assets and liabilities required or permitted to be recorded atfair value, the Group considers the principal or most advantageous market in which it would transact and it considers assumptions that market participants woulduse when pricing the asset or liability.Authoritative literature provides a fair value hierarchy which prioritizes the inputs to valuation techniques used to measure fair value into three broad levels. Thelevel in the hierarchy within which the fair value measurement in its entirety falls is based upon the lowest level of input that is significant to the fair valuemeasurement as follows:Level 1Level 1 applies to assets or liabilities for which there are quoted prices in active markets for identical assets or liabilities.Level 2Level 2 applies to assets or liabilities for which there are inputs other than quoted prices included within Level 1 that are observable for the asset or liability such asquoted prices for similar assets or liabilities in active markets; quoted prices for identical assets or liabilities in markets with insufficient volume or infrequenttransactions (less active markets); or modelderived valuations in which significant inputs are observable or can be derived principally from, or corroborated by,observable market data.Level 3Level 3 applies to assets or liabilities for which there are unobservable inputs to the valuation methodology that are significant to the measurement of the fair valueof the assets or liabilities.F11Cash and cash equivalentsCash and cash equivalents primarily consist of cash, money market funds, investments in interest bearing demand deposit accounts, time deposits and highly liquidinvestments with original maturities of three months or less from the date of purchase and are stated at cost which approximates their fair value. The Group has nocash equivalents.Accounts receivable, net of allowanceAccounts receivable are recognized and carried at the original invoiced amount less an allowance for any potential uncollectible amounts. An estimate for doubtfuldebts is made when collection of the full amount is no longer probable. Bad debts are written off as incurred. The Group generally does not require collateral from itscustomers.The Group maintains allowances for doubtful accounts for estimated losses resulting from the failure of customers to make payments on time. The Group reviews theaccounts receivable on a periodic basis and makes specific allowances when there is doubt as to the collectability of individual balances. In evaluating thecollectability of individual receivable balances, the Group considers many factors, including the age of the balance, the customer’s payment history, its currentcreditworthiness and current economic trends.Property and equipment, netProperty and equipment are carried at cost less accumulated depreciation. Depreciation is calculated on a straightline basis over the following estimated usefullives:Wifi equipment– 3 yearsOffice equipment– 3 to 5 yearsVehicles– 5 yearsCosts of repairs and maintenance are expensed as incurred and asset improvements are capitalized. The gain or loss on disposal of property and equipment is thedifference between the net sales proceeds and the carrying amount of the relevant assets and is recognized in the consolidated income statement. When propertyand equipment are retired or otherwise disposed of, the cost and accumulated depreciation are removed from the accounts and any resulting gain or loss is includedin the results of operations for the respective period.Construction in progressAssets under construction are not depreciated until construction is completed and the assets are ready for their intended use.F12Intangible assetsIntangible assets with finite lives are amortized using the straightline method over the estimated economic lives.Intangible assets have weighted average economic lives from the date of purchase as follows:Software– 5 yearsTrademarks– 10 yearsGoodwillThe Group assesses goodwill for impairment in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”)subtopic 35020, Intangibles—Goodwill and Other: Goodwill (“ASC 35020”), which requires that goodwill to be tested for impairment at the reporting unit level atleast annually and more frequently upon the occurrence of certain events, as defined by ASC 35020.We have the option to assess qualitative factors first to determine whether it is necessary to perform the twostep test in accordance with ASC 35020. If we believe,as a result of the qualitative assessment, that it is morelikelythannot that the fair value of the reporting unit is less than its carrying amount, the twostepquantitative impairment test described below is required. Otherwise, no further testing is required. In the qualitative assessment, we consider primary factors such asindustry and market considerations, overall financial performance of the reporting unit, and other specific information related to the operations. In performing thetwostep quantitative impairment test, the first step compares the carrying amount of the reporting unit to the fair value of the reporting unit based on either quotedmarket prices of the ordinary shares or estimated fair value using a combination of the income approach and the market approach. If the fair value of the reportingunit exceeds the carrying value of the reporting unit, goodwill is not impaired and we are not required to perform further testing. If the carrying value of the reportingunit exceeds the fair value of the reporting unit, then we must perform the second step of the impairment test in order to determine the implied fair value of thereporting unit’s goodwill. The fair value of the reporting unit is allocated to its assets and liabilities in a manner similar to a purchase price allocation in order todetermine the implied fair value of the reporting unit goodwill. If the carrying amount of the goodwill is greater than its implied fair value, the excess is recognized asan impairment loss.In 2017, we performed a qualitative assessment for goodwill. Based on the requirements of ASC35020, we evaluated all relevant factors, including but not limited tomacroeconomic conditions, industry and market conditions, financial performance. We weighed all factors in their entirety and concluded that it was not morelikelythannot the fair value was less than the carrying amount of the reporting unit, and further impairment testing on goodwill was unnecessary as of December 31, 2017and 2016.F13Impairment or disposal of longlived assetsLonglived assets other than goodwill are included in impairment evaluations when events and circumstances exist that indicate the carrying value of these assetsmay not be recoverable. In accordance with FASB ASC 360, Property, Plant and Equipment, the Group assesses the recoverability of the carrying value of longlivedassets by first grouping its longlived assets with other assets and liabilities at the lowest level for which identifiable cash flows are largely independent of the cashflows of other assets and liabilities (the asset group) and, secondly, estimating the undiscounted future cash flows that are directly associated with and expected toarise from the use of and eventual disposition of such asset group. If the carrying value of the asset group exceeds the estimated undiscounted cash flows, theGroup recognizes an impairment loss to the extent the carrying value of the longlived asset exceeds its fair value. The Group determines fair value through quotedmarket prices in active markets or, if quotations of market prices are unavailable, through the performance of internal analysis using a discounted cash flowmethodology or obtains external appraisals from independent valuation firms. The undiscounted and discounted cash flow analyses are based on a number ofestimates and assumptions, including the expected period over which the asset will be utilized, projected future operating results of the asset group, discount rateand longterm growth rate.As of December 31, 2017 and 2016, the Group assessed the impairment of its longlived assets and concluded that there was no impairment indication.Business combinationWe account for business combinations using the purchase method of accounting in accordance with FASB ASC topic 805, Business combinations. The purchasemethod accounting requires that the consideration transferred be allocated to the assets, including separately identifiable assets and liabilities we acquired, basedon their estimated fair values. The consideration transferred in an acquisition is measured as the aggregate of the fair values at the date of exchange of the assetsgiven, liabilities incurred, and equity instruments issued as well as the contingent considerations and all contractual contingencies as of the acquisition date. Thecosts directly attributable to the acquisition are expensed as incurred. Identifiable assets, liabilities and contingent liabilities acquired or assumed are measuredseparately at their fair value as of the acquisition date, irrespective of the extent of any noncontrolling interests. The excess of (i) the total of cost of acquisition, fairvalue of the noncontrolling interests and acquisition date fair value of any previously held equity interest in the acquiree over (ii) the fair value of the identifiable netassets of the acquiree, is recorded as goodwill. If the cost of acquisition is less than the fair value of the net assets of the subsidiary acquired, the difference isrecognized directly in earnings.Revenue recognitionThe Group recognizes revenue in accordance with FASB ASC topic 605, Revenue Recognition (“ASC 605”). Revenue is recognized when the following four revenuerecognition criteria are met: (i) persuasive evidence of an arrangement exists, (ii) delivery has occurred or services have been provided, (iii) the selling price is fixed ordeterminable, and (iv) collectability is reasonably assured.F14Displaybased online advertising servicesThe Group provides displaybased online advertising services to customers by integrating text description, image and video, and displaying the advertisements in aprominent position of LuoKuang Application. The Group recognizes revenue in accordance with ASC 605, over the contractual term based on the agreements andconfirmation letters signed by both parties, commencing on the date the customer’s advertisement is displayed on the Group’s platform.Foreign currency translationThe functional and reporting currency of the Company and the Company’s subsidiaries domiciled in BVI and Hong Kong are the United States dollar (“U.S. dollar”).The financial records of the Company’s other subsidiaries and VIEs located in the PRC are maintained in their local currency, the Chinese Renminbi (“RMB”), whichare the functional currency of these entities.Monetary assets and liabilities denominated in currencies other than the functional currency are translated into the functional currency at the rates of exchangeruling at the balance sheet date. Transactions in currencies other than the functional currency during the year are converted into the functional currency at theapplicable rates of exchange prevailing when the transactions occurred. Transaction gains and losses are recognized in the statements of operations.The Company’s entities with a functional currency of RMB translate their operating results and financial position into the U.S. dollar, the Company’s reportingcurrency. Assets and liabilities are translated using the exchange rates in effect on the balance sheet date. Revenues, expenses, gains and losses are translatedusing the average rate for the year. Retained earnings and equity are translated using the historical rate. Translation adjustments are reported as cumulativetranslation adjustments and are shown as a separate component of other comprehensive income.Income taxesDeferred income taxes are recognized for temporary differences between the tax basis of assets and liabilities and their reported amounts in the financial statements,net operating loss carry forwards and credits, by applying enacted statutory tax rates applicable to future years. Deferred tax assets are reduced by a valuationallowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Current income taxesare provided for in accordance with the laws and regulations applicable to the Group as enacted by the relevant tax authorities.The impact of an uncertain income tax position on the income tax return must be recognized at the largest amount that is morelikelythan not to be sustained uponaudit by the relevant tax authorities. An uncertain income tax position will not be recognized if it has less than a 50% likelihood of being sustained. Additionally, theGroup classifies the interest and penalties, if any, as a component of the income tax expense. For years ended December 31, 2017 and 2016, the Group did not haveany material interest or penalties associated with tax positions nor did the Group have any significant unrecognized uncertain tax positions.F15Related partiesParties are considered to be related to the Company if the parties, directly or indirectly, through one or more intermediaries, control, are controlled by, or are undercommon control with the Company. Related parties also include principal owners of the Company, its management, members of the immediate families of principalowners of the Company and its management and other parties with which the Company may deal with if one party controls or can significantly influence themanagement or operating policies of the other to an extent that one of the transacting parties might be prevented from fully pursuing its own separate interests. TheCompany discloses all significant related party transactions.LeasesLeases have been classified as either capital or operating leases. Leases that transfer substantially all the benefits and risks incidental to the ownership of assets areaccounted for as if there was an acquisition of an asset and incurrence of an obligation at the inception of the lease. All other leases are accounted for as operatingleases wherein rental payments are expensed as incurred.When the Group is the lessor, minimum contractual rental from leases are recognized on a straightline basis over the noncancelable term of the lease. With respectto a particular lease, actual amounts billed in accordance with the lease during any given period may be higher or lower than the amount of rental revenue recognizedfor the period. Straightline rental revenue commences when the customer assumes control of the leased premises. Accrued straightline rents receivable representsthe amount by which straightline rental revenue exceeds rents currently billed in accordance with lease agreements. Contingent rental revenue is accrued when thecontingency is removed.Advertising costsAdvertising costs include expenses associated with direct marketing. All advertising costs are expensed as incurred and included in selling and marketing expenses.During the years ended December 31, 2017 and 2016, advertising costs amounted to $23,171,170 and $4,537,653, respectively.Comprehensive lossComprehensive loss includes net loss and foreign currency translation adjustments and is presented net of tax. The tax effect is nil for the two years endedDecember 31, 2017 and 2016 in the consolidated statements of comprehensive loss.Concentration of credit riskFinancial instruments that potentially expose the Group to concentrations of credit risk consist primarily of cash and accounts receivable. The Group places its cashwith financial institutions with highcredit rating and quality in China. For the year ended December 31, 2017, two customers accounted for over 10% of totalrevenue. For the year ended December 31, 2016, four customers accounted for over 10% of total revenue. At December 31, 2017 and 2016, the Group had credit riskexposure of uninured cash in banks of approximately $72,379 and $83,843, respectively.F16NOTE 3 – INCOME TAXAt December 31, 2017 and 2016, the Group had an unused net operating loss carryforwards of approximately $25,123,726 and $20,081,239, respectively, for income taxpurposes, which expires between 2018 to 2022 and between 2017 to 2021, respectively. At December 31, 2017 and 2016, these net operating losses carryforwards mayresult in future income tax benefits of approximately $5,043,944 and $4,008,863, respectively, however, because realization is uncertain at this time, a valuationallowance in the same amount has been established. Deferred income taxes reflect the net effects of temporary differences between the carrying amounts of assetsand liabilities for financial reporting purposes and the amounts used for income tax purposes.Significant components of the Group’s deferred tax liabilities and assets of December 31, 2017 and 2016 are as follows:December 31,December 31,20172016Deferred tax liabilities$$Deferred tax assetNet operating loss carryforward5,043,9444,008,863Valuation allowance(5,043,944)(4,008,863)Net deferred tax assetMovement of valuation allowanceDecember 31,2017December 31,2016At the beginning of the year$4,008,863$2,049,352Current year addition823,9702,159,518Expired(61,411)Exchange difference272,522(200,007)At the end of the year5,043,9444,008,863The Company is not subject to taxation in BVI under the current BVI law. Subsidiaries operating in the PRC are subject to PRC Enterprise Income Tax at the statutoryrate of 25% for the years ended December 31, 2017 and 2016. Subsidiaries operating in Hong Kong are subject to Hong Kong income taxes at a rate of 16.5% for theyears ended December 31, 2017 and 2016.F17A reconciliation of the income tax expense to the amount computed by applying the current statutory tax rate to the loss before income taxes in the consolidatedstatements of comprehensive income is as follows:December 31,December 31,20172016Loss before income taxes$(6,810,454)$(13,049,031)Tax loss at statutory tax rate(1,655,174)(3,386,822)Nondeductible items6,729,2551,712,857Nontaxable items(3,789,956)(674,189)Change in valuation allowance823,9702,159,518Tax benefits(2,108,095)188,636Income tax expensesNOTE 4 – ACCOUNTS RECEIVABLEAt December 31, 2017 and 2016, accounts receivable consisted of the following:December 31,December 31,20172016Accounts receivable$10,406,602$2,098,946Less: allowance for doubtful accounts676,977233,110$9,729,625$1,865,836NOTE 5 – OTHER RECEIVABLESAt December 31, 2017 and 2016, other receivables consisted of the following:December 31,2017December 31,2016Advances to suppliers$339,701$181,472VAT recoverable (1)3,033,0651,662,805Other5,048,189485,152$2,376,745$2,287,934(1)The balance of advanced VAT represents input VAT available for deducting the amount of VAT paid in the future. During the years ended December 31, 2017and 2016, the Group purchased a large amount of WiFi equipment for deployments, which generated related input VAT approved by tax authority.F18NOTE 6 – AMOUNTS DUE FROM RELATEDPARTIESAt December 31, 2017 and 2016, amounts due from related parties consisted of the following:Name of related partyDecember 31,2017December 31,2016C Media Limited (1)$11,760,692$Ya Tuo Ji International Consultancy (Beijing) Limited (2)204,412183,811(1)C Media Limited is the parent company of LK Technology. The Group expects the amounts due from the related party will be returned to the Group within oneyear.(2)Ya Tuo Ji is a company controlled by the spouse of a major shareholder of C Media Limited. The loan is unsecured, interestfree and repayable on January 5,2019.NOTE 7 – PROPERTY AND EQUIPMENTAt December 31, 2017 and 2016, property and equipment consisted of the following:December 31,December 31,Useful life20172016WiFi equipment3 Years$8,711,424$8,367,678Vehicles5 Years43,246Office and other equipment3 – 5 Years170,242416,434Constructioninprogress2,166,4522,652,28811,048,11811,479,646Less: accumulated depreciation(6,003,246)(3,708,619)$5,044,872$7,771,027For the years ended December 31, 2017 and 2016, depreciation expense amounted to $2,628,884 and $2,474,434, respectively, of which $2,423,655 and $2,194,582,respectively, was included in cost of revenue, $117,648 and $121,740, respectively, was included in selling and marketing expenses and the remainder was included ingeneral and administrative expense.Included in constructioninprogress are WiFI equipment under construction.F19NOTE 8 – GOODWILLIn September of 2014, Zhong Chuan Shi Xun acquired a 100% interest in Zhong Chuan Rui You for a consideration of $7,391,894 (RMB48,000,000). Zhong Chuan RuiYou is primarily engaged in on train WiFi business, deploying WiFi equipment on trains and providing passengers with entertainment and information services ontrains. The book value of the identifiable net assets of Zhong Chuan Rui You was $151,958 (RMB963,000) and a goodwill of $7,239,936 was recorded.NOTE 9 – ACCRUED LIABILITIES AND OTHER PAYABLESAt December 31, 2017 and 2016, accrued liabilities and other payables consisted of the following:December 31,December 31,20172016Deferred revenue$2,326,406$302,735Accrued payroll143,998316,458Other taxes payable3,544,469461,699Other payable852,384686,526Other loans6,095,6559,562,915$12,962,912$11,329,613Deferred revenue represents prepayments from customers for advertising service and is recognized as revenue when the advertising services are rendered.Other loans of $939,555 and $57,416, respectively, as of December 31, 2017 and 2016, are unsecured, bear daily interest at 0.04% and are repayable on demand.NOTE 10 – AMOUNTS DUE TO RELATED PARTIESAt December 31, 2017 and 2016, amounts due to related parties consisted of the following:December 31,December 31,Name of related party20172016Mr. Song Xuesong (“Mr. Song”) (1)$2,921,639$10,669,325C Media Limited (2)$$4,855,236Thumb Beijing Branch (3)$612,103$576,560Thumb Shenzhen Branch (3)$29,941$28,202(1) The Group’s CEO(2) C Media Limited, the parent company.(3) Thumb Beijing and Shenzhen Branch are controlled by the spouse of Mr. Song.Amounts due to related parties are shortterm in nature, noninterest bearing, unsecured and payable on demand.F20NOTE 11 – RETIREMENT AND WELFARE BENEFITSThe Group’s fulltime employees are entitled to staff welfare benefits including medical care, casualty, housing benefits, education benefits, unemployment insuranceand pension benefits through a PRC governmentmandated multiemployer defined contribution plan. The Group is required to accrue the employerportion forthese benefits based on certain percentages of the employees’ salaries. The total provision for such employee benefits of $170,227 and $353,033 during the yearsended December 31, 2017 and 2016, respectively, of which $23,392 and $30,455, respectively, was charged to cost of revenue, $48,957 and $97,408, respectively wascharged to selling and marketing expenses, $49,717 and $86,934, respectively, was charged to general and administrative expenses and $48,161 and $138,236,respectively was charged to research and development expenses. The Group is required to make contributions to the plan out of the amounts accrued for all staffwelfare benefits except for education benefits. The PRC government is responsible for the staff welfare benefits including medical care, casualty, housing benefits,unemployment insurance and pension benefits to be paid to these employees.NOTE 12 – STATUTORY RESERVESAs stipulated by the relevant law and regulations in the PRC, the Group’s subsidiaries and VIEs in the PRC are required to maintain a nondistributable statutorysurplus reserve. Appropriations to the statutory surplus reserve are required to be made at not less than 10% of profit after taxes as reported in the subsidiaries’statutory financial statements prepared under the PRC GAAP. Once appropriated, these amounts are not available for future distribution to owners or shareholders.Once the general reserve is accumulated to 50% of the subsidiaries’ registered capital, the subsidiaries can choose not to provide more reserves. The statutoryreserve may be applied against prior year losses, if any, and may be used for general business expansion and production and increase in registered capital of thesubsidiaries. The Group allocated $Nil to statutory reserves during the years ended December 31, 2017 and 2016, respectively. The statutory reserves cannot betransferred to the Company in the form of loans or advances and are not distributable as cash dividends except in the event of liquidation.NOTE 13 – COMMITMENTS AND CONTINGENCIESOperating leasesWe have entered into operating lease agreements primarily for our office spaces in China. These leases expire through 2018 and are renewable upon negotiation.Future minimum rental payment required under the Office Lease is as follows:Year ending December 31:Amount2018$122,138F21Contingencies(a) Litigation with Shanghai Fusheng Weier Intelligent Control Technology Co., Ltd.On January 22, 2016, Zhong Chuan Rui You and Shanghai Fusheng Weier Intelligent Control Technology Co., Ltd. (“Fusheng Weier”) signed a contract forequipment of $1,652,842 (RMB10,800,000). Since Zhong Chuan Rui You did not make the payments of $1,126,381 (RMB7,360,000) on the due dates, Fusheng Weierfiled a lawsuit against Zhong Chuan Rui You in Shanghai Xuhui District People’s Court on October 8, 2016. On March 9, 2017, Xuhui District People’s Court issuedthe verdict requiring Zhong Chuan Rui You to pay the overdue debts. In August 2017, C Media Limited made the payment of $512,075 (RMB3,346,000). Theremaining balance has been accrued in accounts payable. The payment schedule for the remaining balance is being negotiated by the two parties. On February 5,2018, a hearing was held adding Zhong Chuan Shi Xun as a defendant. The Group plans to settle the remaining balance within one year.(b) Lawsuit with Gansu Jinlun Culture Media Co., Ltd.On August 22, 2014, Zhong Chuan Rui You and Gansu Jinlun Culture Media Co., Ltd. (“Gansu Jinlun”) signed a “Lanzhou Railway Bureau Airconditioned Train WiFi Network System Advertising Operation Rights Agreement” for advertising on 72 trains of $1,467,880 (RMB9,604,633). Due to the dispute on the projectimplementation, Zhong Chuan Rui You did not pay the advertising fee. On August 23, 2017, Gansu Jinlun filed a lawsuit with Gansu Intermediate People’s Court. OnDecember 19, 2017, Gansu Intermediate People’s Court issued a verdict, ruling that Zhong Chuan Rui You settle the overdue advertising fee. Since only 18 out of 72trains have been installed with Wifi network system, Zhong Chuan Rui You disputed and appealed to the verdict. The next court trial date has not yet beendetermined.C Media and Gansu Jinlun are negotiating a potential settlement to resume the contract. According to the legal counsel, it is probable that the settlement will amountto approximately $459,000 (RMB3,000,000); therefore, this amount has been accrued in accounts payable.(c) Litigation with Shenzhen Hua Xun Fang Zhou Technology Co., Ltd.On June 16, 2015, Zhong Chuan Rui You signed a cooperation agreement with Shenzhen Hua Xun Fang Zhou Technology Co., Ltd. (“Shenzhen Hua Xun”) andXuesong Song, a major shareholder of C Media Limited. Pursuant to this agreement, Zhong Chuan Rui You procures equipment from Shenzhen Hua Xun. XuesongSong acts as a joint liability guarantor for the entire debts of Zhong Chuan Rui You under this agreement. As Zhong Chuan Rui You did not make the payments onthe due dates, Shenzhen Hua Xun filed a lawsuit with Shenzhen Baoan District People’s Court on May 31, 2016. On November 1, 2016, Zhong Chuan Rui You,Xuesong Song and Shenzhen Hua Xun reached a settlement in Shenzhen Baoan District People’s Court to settle $1,735,389 (RMB11,355,000) in four instalments. OnDecember 30, 2017, the debt was assigned to C Media Limited.NOTE 14 – SUBSEQUENT EVENTThe Group has evaluated all events or transactions that occurred after December 31, 2017 through May 25, 2018, which is the date that the financial statements wereavailable to be issued.F22EX1.1 2 f20f2017ex11_luokung.htm AMENDED AND RESTATED MEMORANDUM OF ASSOCIATION AND ARTICLES OF ASSOCIATION OF LUOKUNGTECHNOLOGY CORP., DATED AUGUST 20, 2018, AND AS CURRENTLY IN EFFECTExhibit 1.1BC NO: 1553620British Virgin IslandsThe BVI Business Companies Act, 2004(No. 16 of 2004)Memorandum of AssociationandArticles of AssociationofLuokung Technology Corp.Incorporated the 24th day of October, 2009Amended and Restated the 11th Day of December 2009Amended and Restated the 17th Day of December 2009Amended and Restated the 25th Day of March 2010Amended and Restated the 21st day of May 2018Amended and restated the 17 August 2018Amended and restated the 21 August 2018Portcullis (BVI) LimitedPortcullis Chambers4th Floor Ellen Skelton Building3076 Sir Francis Drake HighwayRoad Town, TortolaBritish Virgin IslandsTERRITORY OF THE BRITISH VIRGIN ISLANDSTHE BVI BUSINESS COMPANIES ACT, 2004(No. 16 of 2004)MEMORANDUM OF ASSOCIATIONOFLuokung Technology Corp.NAME1.The name of the Company is Luokung Technology Corp.TYPE OF COMPANY2.The Company is a company limited by shares.REGISTERED OFFICE3.The first Registered Office of the Company is the offices of Portcullis TrustNet (BVI) Limited, Portcullis TrustNet Chambers, P.O. Box 3444, Road Town,Tortola, British Virgin Islands, the office of the registered agent.3.1The current Registered Office of the Company is Portcullis Chambers, 4th Floor Ellen Skelton Building, 3076 SirFrancis Drake Highway, Road Town,Tortola, British Virgin Islands VG1110.REGISTERED AGENT4.The first Registered Agent of the Company is Portcullis TrustNet (BVI) Limited of Portcullis TrustNet Chambers, P.O. Box 3444, Road Town, Tortola,British Virgin Islands.4.1The current Registered Agent of the Company is Portcullis (BVI) Ltd of Portcullis Chambers, 4th Floor Ellen Skelton Building, 3076 Sir Francis DrakeHighway, Road Town, Tortola, British Virgin Islands VG1110.AUTHORISED NUMBER OF SHARES5.The Company is authorised to issue a maximum of 251,000,000 shares.CLASSES, NUMBER AND PAR VALUE OF SHARES6.As at the date of adoption of this memorandum, the Company is authorised to issue (a) 250,000,000 ordinary shares without par value (“OrdinaryShares”); and (b) 1,000,000 preferred shares without par value (“Preferred Shares”).FRACTIONAL SHARES7.The Company may issue fractions of a share and a fractional share shall have the same corresponding fractional liabilities, limitations, preferences,privileges, qualifications, restrictions, rights and other attributes of a whole share of the same class or series of shares.RIGHTS, PRIVILEGES, RESTRICTIONS AND CONDITIONS ATTACHING TO SHARES8.(1)Subject to the memorandum and articles of association (and, for greater clarity, without prejudice to any special rights conferred thereby on theholders of any other shares), an Ordinary Share of the Company confers on the holder;(a)the right to one vote at a meeting of the members of the Company or on any Resolution of Members;(b)the right to an equal share in any Distribution paid by the Company; and(c)the right to an equal share in the distribution of the surplus assets of the Company on a winding up.(2)Subject to the memorandum and articles of association (and, for greater clarity, without prejudice to any special rights conferred thereby on theholders of any other shares), a Preferred Share of the Company confers on the holder;(a)the right to 399 votes at a meeting of the members of the Company or on any Resolution of Members;(b)the right to an equal share in any Distribution paid by the Company;(c)the right to an equal share in the distribution of the surplus assets of the Company on its liquidation.(d)be freely transferable, in whole or in part, by Mr. Xuesong Song to any third party through one or more Private Transactions, subject toApplicable Law; and(e)be freely transferable, in whole or in part, by Mr. Xuesong Song to any third party through one or more Public Transactions, subject to ApplicableLaw and Automatic Conversion of such Preferred Share(s) into Ordinary Share(s).(3)The directors may at their discretion by resolution of directors redeem, purchase or otherwise acquire all or any of the shares in the Companysubject to the Articles..VARIATION OF CLASS RIGHTS9.If at any time the issued shares are divided into different classes or series of shares, the rights attached to any class or series (unless otherwise providedby the terms of issue of the shares of that class or series) may, whether or not the Company is being wound up, be varied with the consent in writing of theholders of not less than threefourths of the issued shares of that class or series and of the holders of not less than threefourths of the issued shares ofany other class or series of shares which may be affected by such variation.RIGHTS NOT VARIED BY THE ISSUE OF SHARES PARI PASSU10.The rights conferred upon the holders of the shares of any class issued with preferred or other rights shall not, unless otherwise expressly provided by theterms of issue of the shares of that class, be deemed to be varied by the creation or issue of further shares ranking pari passu therewith.CAPACITY AND POWERS11.Subject to the Act, any other British Virgin Islands legislation and paragraph 12 below the Company has, irrespective of corporate benefit:(a)full capacity to carry on or undertake any business or activity, do any act or enter into any transaction;(b)for the purposes of paragraph (a), full rights, powers and privileges; and(c)full powers to issue shares with preemptive rights, subject to the Articles.2LIMITATIONS ON THE COMPANY’S BUSINESS12.For the purposes of section 9(4) of the Act the Company may not;(a)carry on banking or trust business, unless it is licensed to do so under the Banks and Trust Companies Act, 1990;(b)carry on business as an insurance or reinsurance company, insurance agent or insurance broker, unless it is licensed under the Insurance Act1994;(c)carry on business of company management, unless it is licensed under the Company Management Act, 1990;(d)carry on the business of providing the registered office or the registered agent for companies incorporated in the British Virgin Islands;(e)carry on the business as a mutual fund, manager of mutual funds or administrator of mutual funds unless it is recognized or licenced as the casemay be under the Mutual Funds Act 1996; or(f)carry on any other business that gives rise to a licencing requirement under any law for the time being in force in the British Virgin Islands unlessit is licenced, regulated, recognised or otherwise approved pursuant to such law.REGISTERED SHARES AND PROHIBITION ON ISSUE OF BEARER SHARES13.Shares in the Company may only be issued as registered shares. The issue of shares to bearer is prohibited.PROHIBITION ON EXCHANGE AND CONVERSION OF REGISTERED SHARES TO BEARER SHARES14.The exchange or conversion of registered shares to bearer shares is prohibited.TRANSFER OF REGISTERED SHARES15.Subject to the provisions of the Articles the Company may upon receipt of an instrument of transfer enter the name of the transferee in the register ofmembers subject to the prior or simultaneous approval of the Company as evidenced by a resolution of directors or by a resolution of members. Subject toany resolution of the members to the contrary, the directors may resolve by resolution of directors to refuse or delay the registration of the transfer forreasons that shall be specified in the resolution of directors.AMENDMENT OF MEMORANDUM AND ARTICLES OF ASSOCIATION16.1The Company may amend its Memorandum or Articles by a resolution of members or by a resolution of directors provided that the directors shall not havethe power to amend the Memorandum or Articles;(a)to restrict the rights or powers of the members to amend the Memorandum or Articles;(b)to change the percentage of members required to pass a resolution to amend the Memorandum or Articles;(c)in circumstances where the Memorandum or Articles cannot be amended by the members; or(d)to Clauses 8, 9, 10 or this Clause 12.16.2No amendment may be made to Regulation 76 of the Articles unless approved by an affirmative vote of the holders of 66 2/3 percent or more of theoutstanding votes of the shares entitled to vote thereon.3DEFINITIONS17.The meanings of words in this Memorandum are as defined in the Articles.We, Portcullis TrustNet (BVI) Limited of Portcullis TrustNet Chambers, P.O. Box 3444, Road Town, Tortola, British Virgin Islands for the purpose ofincorporating a BVI Business Company under the laws of the British Virgin Islands hereby sign this Memorandum of Association the 27th day of October,2009.Incorporator/s/ Nicole WheatleyPortcullis TrustNet (BVI) LimitedPortcullis TrustNet ChambersP.O. Box 3444Road Town, TortolaBritish Virgin Islands(Sgd. Nicole Wheatley)4TERRITORY OF THE BRITISH VIRGIN ISLANDSTHE BVI BUSINESS COMPANIES ACT, 2004(No. 16 of 2004)ARTICLES OF ASSOCIATIONOFLuokung Technology Corp.PRELIMINARY1.In these Articles, if not inconsistent with the subject or context, the words and expressions standing in the first column of the following table shall bear themeanings set opposite them respectively in the second column thereof.WordsMeaningApplicable Lawall Laws, including those of a jurisdiction in or outside of the United States, applicable to the Private orPublic Transactions.Actthe BVI Business Companies Act, 2004 (No 16 of 2004.) including any modification, extension, reenactment or renewal thereof and any regulations made thereunder.Articlesthese Articles of Association as originally framed or as from time to time amended.Automatic Conversioneach Preferred Share shall be automatically converted at any time after issue and without the payment ofany additional sum into an equal number of fully paid Ordinary Shares upon the conclusion of anytransfer by Mr. Xuesong Song to any third party through one or more Public Transactions.Designated Stock Exchangeeither the Nasdaq National Stock Market, Inc. or such other exchange or quotation bureau on which, theCompany’s Securities are listed or traded; provided that until the Securities are listed on any such“Exchange” the rules of any such Designated Stock Exchange shall be inapplicable to these Articles.directora director of the Company.distributionin relation to a distribution by a company to a member, means(i)the direct or indirect transfer of an asset, other than the Company’s own shares, to or forthe benefit of the member or(ii)the incurring of a debt to or for the benefit of a member,in relation to shares held by a member, and whether by means of a purchase of an asset, the purchase,redemption or other acquisition of shares, a transfer of indebtedness or otherwise, and includes adividend.Independent Directora person who meets the then current requirements for “independence” of the applicable rules andregulations of the U.S. Securities and Exchange Commission and the Designated Stock Exchange.5member or shareholderin relation to the Company, means a person whose name is entered in the register of members as theholder of one or more shares, or fractional shares, in the Company.Memorandumthe Memorandum of Association of the Company as originally framed or as from time to time amended.Mr. Xuesong Songthe founder, a director and Chairman of LK Technology Ltd.Ordinary Sharesissued or unissued ordinary shares of no par value of the Company having the rights, preferences andprivileges set out in the MemorandumPersonAn individual, a corporation, a trust, trustee, the estate of a deceased individual, a partnership or anunincorporated association of persons.Preferred Sharesissued or unissued preferred shares of no par value of the Company having the rights, preferences andprivileges set out in the MemorandumPrivate Transactionstransactions that are not considered as a Public Transaction.Public Transactionstransactions through any national securities exchanges and/or through the automated quotation systemincluding but not limited to NASDAQ, NYSE (including NYSE American) or OTC Markets, or anytransaction executed by the broker or with a market maker.Related Party(a) any director, officer and employee of the Company; (b) any family member of such director, officer andemployee; and (c) any entity (e.g. a corporation, partnership, or trust) controlled by or set up for thebenefit of a director, officer or employee, or a family member of such director, officer or employee.Relevant SystemA facility for the electronic transfer of uncertificated securities administered by The Depository TrustCompany or such other Person regulated by the SEC.resolution of directors(a)A resolution approved at a duly convened and constituted meeting of directors of the Companyor of a committee of directors of the Company by the affirmative vote of a simple majority of thedirectors present at the meeting who voted and did not abstain; or(b)a resolution consented to in writing by a simple majority of the directors or of all members of thecommittee, as the case may be;except that where a director is given more than one vote, he shall be counted by the number ofvotes he casts for the purpose of establishing a majority.resolution of membersSubject to the provisions of the Memorandum and Articles means:(a)A resolution approved at a duly convened and constituted meeting of the members of theCompany by the affirmative vote of(i)a majority of in excess of 50% of the votes of the shares entitled to vote and voting onthe resolution, or(ii)a majority of in excess of 50% of the votes of each class or series of shares entitled tovote as a class or series and voting on the resolution and a majority of in excess of 50%of the votes of the remaining shares entitled to vote and voting on the resolution; or6(b)a resolution consented to in writing by(i)an absolute majority of the votes of shares entitled to vote thereon, or(ii)an absolute majority of the votes of each class or series of shares entitled to votethereon as a class or series and of an absolute majority of the votes of the remainingshares entitled to vote thereon.SealAny Seal which has been duly adopted as the common seal of the Company.SECThe United States Securities and Exchange Commission.Securitiesshares and debt obligations of every kind, and options, warrants and rights to acquire shares, or debtobligations.SharesOrdinary Shares and/or Preferred Shares, as the case may be.solvency testa company satisfies the solvency test if;(i)the value of the company’s assets exceeds its liabilities, and(ii)the company is able to pay its debts as they fall due.treasury sharesshares in the Company that were previously issued but were repurchased, redeemed or otherwiseacquired by the Company and not cancelled.2.“Written” or any term of like import includes words typewritten, printed, painted, engraved, lithographed, photographed or represented or reproduced byany mode of reproducing words in a visible form, including telex, facsimile, telegram, cable or other form of writing produced by electronic communication.3.Save as aforesaid any words or expressions defined in the Act shall bear the same meaning in these Articles.4.Whenever the singular or plural number, or the masculine, feminine or neuter gender is used in these Articles, it shall equally, where the context admits,include the others.5.A reference in these Articles to voting in relation to shares shall be construed as a reference to voting by members holding the shares except that it is thevotes allocated to the shares that shall be counted and not the number of members who actually voted and a reference to shares being present at a meetingshall be given a corresponding construction.6.A reference to money in these Articles is, unless otherwise stated, a reference to the currency in which shares in the Company shall be issued according tothe provisions of the Memorandum.7REGISTERED SHARES7.Every member holding registered shares in the Company shall be entitled to a certificate signed by a director or officer of the Company or such otherperson who may be authorised from time to time by resolution of directors or under the Seal, with or without the signature of any director of the Company,specifying the share or shares held by him and the signature of the director or officer or person so authorised and the Seal may be facsimiles.8.Any member receiving a share certificate for registered shares shall indemnify and hold the Company and its directors and officers harmless from any lossor liability which it or they may incur by reason of any wrongful or fraudulent use or representation made by any person by virtue of the possessionthereof. If a share certificate for registered shares is worn out or lost it may be renewed on production of the worn out certificate or on satisfactory proof ofits loss together with such indemnity as may be required by a resolution of directors.9.If several persons are registered as joint holders of any shares, any one of such persons may give an effectual receipt for any distribution payable inrespect of such shares.10.Nothing in these Articles shall require title to any shares or other Securities to be evidenced by a certificate if the Act and the rules of the Designated StockExchange permit otherwise.SHARES AND ISSUED SHARES11.Subject to the provisions of these Articles and, if applicable, the rules of the Designated Stock Exchange, and any resolution of members, the directors ofthe Company may, without limiting or affecting any rights previously conferred on the holders of any existing shares or class or series of shares, offer, allot,grant options over or otherwise dispose of shares to such persons, at such times and upon such terms and conditions as the Company may by resolutionof directors determine. The directors shall not issue more shares than the maximum number provided for in the Memorandum.12.The Company may issue fully paid, partly paid or nil paid shares as well as bonus shares. A partly paid or nil paid share or a share issued for a promissorynote or other written obligation for payment of a debt may be issued subject to forfeiture in the manner prescribed in these Articles.13.Shares in the Company may be issued for consideration in any form, including money, a promissory note or other obligation to contribute money orproperty, real property, personal property (including goodwill and knowhow) services rendered or a contract for future services and the amount of suchconsideration shall be determined by resolution of directors, except that in the case of shares with par value, the amount shall not be less than the parvalue, and in the absence of fraud the decision of the directors as to the value of the consideration received by the Company in respect of the issue isconclusive unless a question of law is involved.14.Before issuing shares for a consideration other than money, the directors shall pass a resolution stating;(a)the amount to be credited for the issue of the shares;(b)their determination of the reasonable present cash value of the nonmoney consideration for the issue; and(c)that, in their opinion, the present cash value of the nonmoney consideration for the issue is not less than the amount to be credited for the issueof the shares.15.A share issued by the Company upon conversion of, or in exchange for, another share or a debt obligation or other security in the Company, shall betreated for all purposes as having been issued for money equal to the consideration received or deemed to have been received by the Company in respectof the other share, debt obligation or security.16.Treasury shares may be disposed of by the Company on such terms and conditions (not otherwise inconsistent with these Articles) as the Company mayby resolution of directors determine.17.Subject to these Articles, the Company may purchase, redeem or otherwise acquire and hold its own shares save that the Company may not purchase,redeem or otherwise acquire its own shares without the consent of the member whose shares are to be purchased, redeemed or otherwise acquired unlessthe Company is permitted by the Act or any other provision in the Memorandum or Articles to purchase, redeem or otherwise acquire the shares withouttheir consent.818.No purchase, redemption or other acquisition of shares shall be made unless the directors determine by resolution of the directors that immediately after thepurchase, redemption or other acquisition the value of the Company’s assets will exceed its liabilities and the Company will be able to pay its debts as theyfall due.19.Sections 60 (Process for acquisition of own shares), 61 (Offer to one or more shareholders) and 62 (Shares redeemed otherwise than at the option ofcompany) of the Act shall not apply to the Company.20.A determination by the directors under Article 18 is not required;(a)the Company redeems a share or shares pursuant to a right of a member to have his shares redeemed or to have his shares exchanged for moneyor other property of the Company; or(b)by virtue of the provisions of Section 179 of the Act.21.Shares that the Company purchases, redeems or otherwise acquires pursuant to Article 17 may be cancelled or held as treasury shares except to the extentthat such shares are in excess of 80 percent of the issued shares of the Company in which case they shall be cancelled but they shall be available forreissue.22.Shares in the Company shall only be held as treasury shares where the directors of the Company resolve as such and the number of shares acquired, whenaggregated with shares of the same class already held by the Company as treasury shares, does not exceed 50% of the shares of that class previouslyissued by the Company, excluding shares that have been cancelled. All rights and obligations attaching to a treasury share are suspended and shall not beexercised by or against the Company while it holds the share as a treasury share. Treasury shares may be reissued by the Company as new shares.23.The Company shall keep a register of members containing;(a)the names and addresses of the persons who hold registered shares in the Company;(b)the number of each class and series of registered shares held by each member;(c)the date on which the name of each member was entered in the register of members;(d)the date on which any person ceased to be a member; and(e)such other information as may be prescribed pursuant to the Act.24.The register of members may be in any such form as the directors may approve but if it is in magnetic, electronic or other data storage form, the companymust be able to produce legible evidence of its contents.25.The original or a copy of the register of members shall be kept at the registered office of the Company or at the office of the registered agent of theCompany.26.A share is deemed to be issued when the name of the member is entered in the register of members.27.Subject to the Act and the rules of the Designated Stock Exchange, the board of directors without further consultation with the holders of any shares orSecurities may resolve that any class or series of shares or other Securities from time to time in issue or to be issued (including shares in issue at the date ofthe adoption of these Articles) may be issued, held, registered and converted to uncertificated form.28.Conversion of shares held in certificated form into shares held in uncertificated form, and vice versa, may be made in such manner as the board of directors,in its absolute discretion, may think fit. The Company or any duly authorised transfer agent (a “Transfer Agent”) shall enter on the register of membershow many shares are held by each member in uncertificated form and in certificated form and shall maintain the register of members. Notwithstanding anyprovision of these Articles, a class or series of shares shall not be treated as two classes by virtue only of that class or series comprising both certificatedshares and uncertificated Shares or as a result of any provision of these Articles which apply only in respect of certificated or uncertificated shares.9MORTGAGES AND CHARGES OF REGISTERED SHARES29.Members may mortgage or charge their registered shares in the Company with such mortgage or charge being evidenced in writing and signed by, or withthe authority of the registered holder of a registered share to which the mortgage or charge relates. The Company shall give effect to the terms of any validmortgage or charge except insofar as it may conflict with any requirements herein contained for consent to the transfer of shares.30.In the case of the mortgage or charge of registered shares there may be entered in the share register of the Company at the request of the registered holderof such shares(a)a statement that the shares are mortgaged or charged;(b)the name of the mortgagee or chargee; and(c)the date on which the aforesaid particulars are entered in the share register.31.Where particulars of a mortgage or charge are entered in the register of members, such particulars shall be cancelled(a)with the written consent of the named mortgagee or chargee or anyone authorized to act on his behalf; or(b)upon evidence satisfactory to the directors of the discharge of the liability secured by the mortgage or charge and the issue of such indemnities asthe directors shall consider necessary or desirable.32.Whilst particulars of a mortgage or charge over registered shares are entered in the register of members pursuant to the preceding articles no transfer ofany share comprised therein shall be effected without the written consent of the named mortgagee or chargee or anyone authorized to act on his behalf.FORFEITURE33.When shares not fully paid on issue or issued for a promissory note or other written obligation for payment of a debt have been issued subject toforfeiture, the following provisions shall apply.34.Written notice specifying a date for payment to be made and the shares in respect of which payment is to be made shall be served on the member whodefaults in making payment pursuant to a promissory note or other written obligations to pay a debt.35.The written notice specifying a date for payment shall(a)name a further date not earlier than the expiration of 14 days from the date of service of the notice on or before which payment required by thenotice is to be made; and(b)contain a statement that in the event of nonpayment at or before the time named in the notice the shares, or any of them, in respect of whichpayment is not made will be liable to be forfeited.36.Where a written notice has been issued and the requirements of the notice have not been complied with within the prescribed time, the directors may at anytime before tender of payment forfeit and cancel the shares to which the notice relates.37.The Company is under no obligation to refund any moneys to the member whose shares have been forfeited and cancelled pursuant to these provisions.Upon forfeiture and cancellation of the shares the member is discharged from any further obligation to the Company with respect to the shares forfeitedand cancelled.10LIEN38.The Company shall have a first and paramount lien on every share issued for a promissory note or for any other binding obligation to contribute money orproperty or any combination thereof to the Company, and the Company shall also have a first and paramount lien on every share standing registered in thename of a member, whether singly or jointly with any other person or persons, for all the debts and liabilities of such member or his estate to the Company,whether the same shall have been incurred before or after notice to the Company of any interest of any person other than such member, and whether thetime for the payment or discharge of the same shall have actually arrived or not, and notwithstanding that the same are joint debts or liabilities of suchmember or his estate and any other person, whether a member of the Company or not. The Company’s lien on a share shall extend to all distributionspayable thereon. The directors may at any time either generally, or in any particular case, waive any lien that has arisen or declare any share to be wholly orin part exempt from the provisions of this Article.39.In the absence of express provisions regarding sale in the promissory note or other binding obligation to contribute money or property, the Company maysell, in such manner as the directors may by resolution of directors determine, any share on which the Company has a lien, but no sale shall be made unlesssome sum in respect of which the lien exists is presently payable nor until the expiration of twentyone days after a notice in writing, stating and demandingpayment of the sum presently payable and giving notice of the intention to sell in default of such payment, has been served on the holder for the timebeing of the share.40.The net proceeds of the sale by the Company of any shares on which it has a lien shall be applied in or towards payment of discharge of the promissorynote or other binding obligation to contribute money or property or any combination thereof in respect of which the lien exists so far as the same ispresently payable and any residue shall (subject to a like lien for debts or liabilities not presently payable as existed upon the share prior to the sale) bepaid to the holder of the share immediately before such sale. For giving effect to any such sale the directors may authorize some person to transfer theshare sold to the purchaser thereof. The purchaser shall be registered as the holder of the share and he shall not be bound to see to the application of thepurchase money, nor shall his title to the share be affected by any irregularity or invalidity in the proceedings in reference to the sale.TRANSFER OF SHARES41.Registered shares in the Company are transferred by a written instrument of transfer signed by the transferor and containing the name and address of thetransferee. The instrument of transfer shall be signed by the transferee if registration as a holder of the share shall impose a liability to the Company on thetransferee. The instrument of transfer of a registered share shall be sent to the Company for registration.42.The board of directors may resolve that interests in shares in the form of depositary receipts may be transferred or otherwise dealt with in accordance withthe regulations and practices instituted by the operator of the Relevant System and any holder of interests in shares shall be entitled to transfer suchinterests by means of such Relevant System and the operator of the Relevant System shall act as agent of the holders of such interests for the purposes ofthe transfer of those interests.43.The register of members may be closed at such times and for such periods as the board of directors may from time to time determine, upon notice beinggiven by advertisement in such newspapers as may be required by the Act and the practice of the Designated Stock Exchange.44.The transfer of a registered share is effective when the name of the transferee is entered on the register of members.45.If the directors of the Company are satisfied that an instrument of transfer relating to shares has been signed but that the instrument has been lost ordestroyed, they may resolve;(a)to accept such evidence of the transfer of the shares as they consider appropriate; and(b)that the transferee’s name should be entered in the register of members notwithstanding the absence of the instrument of transfer.46.The Company must on the receipt of an instrument of transfer from the transferor or transferee of a registered share in the Company enter the name of thetransferee of the share in the register or members unless the directors, if permitted by the Memorandum or these Articles, resolve by resolution of directorsto refuse or delay the registration of the transfer for reasons that shall be specified in the resolution of directors.11TRANSMISSION OF SHARES47.The personal representative of a deceased member may transfer a share even though the personal representative is not a member at the time of the transfer.48.The personal representative, executor or administrator of a deceased member, the guardian of an incompetent member or the trustee of a bankrupt membershall be the only person recognized by the Company as having any title to his share but they shall not be entitled to exercise any rights as a member of theCompany until they have proceeded as set forth in the next following three Articles.49.The production to the Company of any document which is evidence of probate of the will, or letters of administration of the estate, or confirmation asexecutor, of a deceased member or of the appointment of a guardian of an incompetent member or the trustee of a bankrupt member shall be accepted by theCompany even if the deceased, incompetent or bankrupt member is domiciled outside the British Virgin Islands if the document evidencing the grant ofprobate or letters of administration, confirmation as executor, appointment as guardian or trustee in bankruptcy is issued by a foreign court which hadcompetent jurisdiction in the matter. For the purpose of establishing whether or not a foreign court had competent jurisdiction in such a matter the directorsmay obtain appropriate legal advice. The directors may also require an indemnity to be given by the executor, administrator, guardian or trustee inbankruptcy.50.The Company may enter in the register of members the name of any person becoming entitled by operation of law or otherwise to a share or shares inconsequence of the death, incompetence or bankruptcy upon such evidence being produced as may reasonably be required by the directors.51.Any person who has become entitled to a share or shares in consequence of the death, incompetence or bankruptcy of any member may, instead of beingregistered himself, request in writing that some person to be named by him be registered as the transferee of such share or shares and such request shalllikewise be treated as if it were a transfer.52.What amounts to incompetence on the part of a person is a matter to be determined by the court having regard to all the relevant evidence and thecircumstances of the case.REDUCTION OR INCREASE IN AUTHORISED AND UNISSUED SHARES48.The Company may amend the Memorandum to increase or reduce the maximum number of shares the Company is authorised to issue and may in respect ofany unissued shares increase or reduce the number of such shares, or effect any combination of the foregoing.49.The Company may(1)(a) divide its shares, including issued shares, into a larger number of shares; or (b) combine its shares, including issued shares, into a smallernumber of shares.(2)A division or combination of shares, including issued shares, of a class or series shall be for a larger or smaller number, as the case may be, ofshares in the same class or series.(3)A company shall not divide its shares under subsection (1)(a) or (2) if it would cause the maximum number of shares that the Company isauthorised to issue by its memorandum to be exceeded.(4)Where shares are divided or combined under this article, the aggregate par value of the new shares must be equal to the aggregate par value of theoriginal shares.MEETINGS AND CONSENTS OF MEMBERS50.The directors of the Company may convene meetings of the members of the Company at such times and in such manner and places within or outside theBritish Virgin Islands as the directors consider necessary or desirable. The Company may hold an annual general meeting, but shall not (unless required bythe applicable rules of the Designated Stock Exchange for so long as the Company’s Securities are listed or traded on the Designated Stock Exchange) beobliged to hold an annual general meeting.51.Upon the written request of members holding 30 percent or more of the outstanding voting shares in the Company the directors shall convene a meeting ofmembers.1252.The directors shall give not less than 7 days notice of meetings of members to those persons whose names on the date the notice is given appear asmembers in the share register of the Company and are entitled to vote at the meeting.53.The directors may fix the date notice is given of a meeting of members as the record date for determining those shares that are entitled to vote at themeeting.54.A meeting of members may be called on short notice:(a)if members holding not less than 90 percent of the total number of shares entitled to vote on all matters to be considered at the meeting, or 90percent of the votes of each class or series of shares where members are entitled to vote thereon as a class or series together with not less than a90 percent majority of the remaining votes, have agreed to short notice of the meeting, or(b)if all members holding shares entitled to vote on all or any matters to be considered at the meeting have waived notice of the meeting and for thispurpose presence at the meeting shall be deemed to constitute waiver.55.The inadvertent failure of the directors to give notice of a meeting to a member, or the fact that a member has not received notice, does not invalidate themeeting.56.A member may be represented at a meeting of members by a proxy who may speak and vote on behalf of the member.57.The instrument appointing a proxy shall be produced at the place appointed for the meeting before the time for holding the meeting at which the personnamed in such instrument proposes to vote.58.An instrument appointing a proxy shall be in substantially the following form or such other form as the Chairman of the meeting shall accept as properlyevidencing the wishes of the member appointing the proxy.(Name of Company)I/Webeing a member of the aboveCompany withshares HEREBY APPOINTofor failing himofto be my/our proxy to vote for me/us at the meeting of members to be held on the dayofand at any adjournment thereof.(Any restrictions on voting to be inserted here.)Signed this day ofMember59.The following shall apply in respect of joint ownership of shares:a.if two or more persons hold shares jointly each of them may be present in person or by proxy at a meeting of members and may speak as a member;b.if only one of the joint owners is present in person or by proxy he may vote on behalf of all joint owners, andc.if two or more of the joint owners are present in person or by proxy they must vote as one.60.A member shall be deemed to be present at a meeting of members if he participates by telephone or other electronic means and all members participating inthe meeting are able to hear each other.61.A meeting of members is duly constituted if, at the commencement of the meeting, there are present in person or by proxy not less than 50 percent of thevotes of the shares or class or series of shares entitled to vote on resolutions of members to be considered at the meeting. If a quorum be present,notwithstanding the fact that such quorum may be represented by only one person then such person may resolve any matter and a certificate signed bysuch person accompanied where such person be a proxy by a copy of the proxy form shall constitute a valid resolution of members.1362.If within two hours from the time appointed for the meeting a quorum is not present, the meeting, if convened upon the requisition of members, shall bedissolved; in any other case it shall stand adjourned to the next business day at the same time and place or to such other time and place as the directorsmay determine, and if at the adjourned meeting there are present within one hour from the time appointed for the meeting in person or by proxy not lessthan one third of the votes of the shares or each class or series of shares entitled to vote on the resolutions to be considered by the meeting, those presentshall constitute a quorum but otherwise the meeting shall be dissolved.63.At every meeting of members, the Chairman of the Board of Directors shall preside as chairman of the meeting. If there is no Chairman of the Board ofDirectors or if the Chairman of the Board of Directors is not present at the meeting, the members present shall choose some one of their number to be thechairman. If the members are unable to choose a chairman for any reason, then the person representing the greatest number of voting shares present inperson or by prescribed form of proxy at the meeting shall preside as chairman failing which the oldest individual member or representative of a memberpresent shall take the chair.64.The chairman may, with the consent of the meeting, adjourn any meeting from time to time, and from place to place, but no business shall be transacted atany adjourned meeting other than the business left unfinished at the meeting from which the adjournment took place.65.At any meeting of the members the chairman shall be responsible for deciding in such manner as he shall consider appropriate whether any resolution hasbeen carried or not and the result of his decision shall be announced to the meeting and recorded in the minutes thereof. If the chairman shall have anydoubt as to the outcome of any resolution put to the vote, he shall cause a poll to be taken of all votes cast upon such resolution, but if the chairman shallfail to take a poll then any member present in person or by proxy who disputes the announcement by the chairman of the result of any vote mayimmediately following such announcement demand that a poll be taken and the chairman shall thereupon cause a poll to be taken. If a poll is taken at anymeeting, the result thereof shall be duly recorded in the minutes of that meeting by the chairman.66.Any person other than an individual shall be regarded as one member and subject to the specific provisions hereinafter contained for the appointment ofrepresentatives of such persons the right of any individual to speak for or represent such member shall be determined by the law of the jurisdiction where,and by the documents by which, the person is constituted or derives its existence. In case of doubt, the directors may in good faith seek legal advice fromany qualified person and unless and until a court of competent jurisdiction shall otherwise rule, the directors may rely and act upon such advice withoutincurring any liability to any member.67.Any person other than an individual which is a member of the Company may by resolution of its directors or other governing body authorize such personas it thinks fit to act as its representative at any meeting of the Company or of any class of members of the Company, and the person so authorized shall beentitled to exercise the same powers on behalf of the person which he represents as that person could exercise if it were an individual member of theCompany.68.The chairman of any meeting at which a vote is cast by proxy or on behalf of any person other than an individual may call for a notarially certified copy ofsuch proxy or authority which shall be produced within 7 days of being so requested or the votes cast by such proxy or on behalf of such person shall bedisregarded.69.Directors of the Company may attend and speak at any meeting of members of the Company and at any separate meeting of the holders of any class orseries of shares in the Company.70.An action that may be taken by the members at a meeting may also be taken by a resolution of members consented to in writing or by telex, telegram, cable,facsimile or other written electronic communication, without the need for any notice, but if any resolution of members is adopted otherwise than by theunanimous written consent of all members, a copy of such resolution shall forthwith be sent to all members not consenting to such resolution. The consentmay be in the form of counterparts, each counterpart being signed by one or more members.14DIRECTORS71.The first directors of the Company shall be appointed by the first registered agent of the Company and thereafter the directors shall be appointed byresolution of members, subject to Article 78, for such term as the members determine. A person shall not be appointed as a director unless he hasconsented in writing to be a director.72.The minimum number of directors shall be one and the maximum number shall be 20. Unless otherwise determined by the Company in a meeting ofshareholders and subject to the requirements of the Memorandum, the directors may by a Resolution of Directors, amend this Regulation 72 to change thenumber of directors. For as long as Securities of the Company are listed or traded on the Designated Stock Exchange, the directors shall include suchnumber of Independent Directors as applicable law, rules or regulations of the Designated Stock Exchange may require for a foreign private issuer as longas the Company is a foreign private issuer.73.Each director shall hold office for the term, if any, fixed by resolution of members or until his earlier death, resignation or removal.74.Where the Company has only one member who is an individual and that member is also the sole director of the Company, that sole member/director may, byinstrument in writing, nominate a person who is not disqualified from being a director of the Company under section 111(1) of the Act as a reserve directorof the Company to act in the place of the sole director in the event of his death.75.The nomination of a person as a reserve director of the Company ceases to have effect if;a.before the death of the sole member/director who nominated him;(i)he resigns as reserve director, or(ii)the sole member/director revokes the nomination in writing; orb.the sole member/director who nominated him ceases to be the sole member/director of the Company for any reason other than his death.76.A director may be removed from office, with or without cause, by a resolution of directors or a resolution of members. For the purposes of this Regulation76, “cause” means the willful and continuous failure by a director to substantially perform his duties to the Company (other than any such failure resultingfrom incapacity due to physical or mental illness) or the willful engaging by the director in gross misconduct materially and demonstrably injurious to theCompany. If a director is removed from office without cause by a resolution of the members, for the purposes of this Regulation, the resolution of memberswill require the affirmative vote of the holders of 66 2/3 percent or more of the outstanding votes of the shares entitled to vote thereon.77.A director may resign his office by giving written notice of his resignation to the Company and the resignation shall have effect from the date the notice isreceived by the Company or from such later date as may be specified in the notice. A director of the Company shall resign forthwith if he is, or becomes,disqualified to act as a director under the Act.78.The directors may at any time by resolution of directors appoint any person to be a director to fill a vacancy. There is a vacancy if a director dies orotherwise ceases to hold office as a director prior to the expiration of his term of office, where his term of office was fixed upon his appointment. Thedirectors may not appoint a director to fill a vacancy for a term exceeding the term that remained when the person who has ceased to be a director left orotherwise ceased to hold office.79.The Company shall keep a register of directors containing:a.the names and addresses of the persons who are directors of the Company or who have been nominated as reserve directors of the Company;b.the date on which each person whose name is entered in the register was appointed as a director of the Company or nominated as a reservedirector of the Company;c.the date on which each person named as a director ceased to be a director of the Company;d.the date on which the nomination of any person nominated as a reserve director ceased to have effect; ande.such other information as may be prescribed pursuant to the Act.1580.The original or a copy of any register of directors shall be kept at the office of the registered agent of the Company.81.The register of directors may be in any such form as the directors may approve but if it is in magnetic, electronic or other data storage form, the companymust be able to produce legible evidence of its contents.82.With the prior or subsequent approval by a resolution of members, the directors may, by a resolution of directors, fix the emoluments of directors withrespect to services to be rendered in any capacity to the Company.83.A director shall not require a share qualification and may be an individual or a company.POWERS OF DIRECTORS84.The business and affairs of the Company shall be managed by the directors who may pay all expenses incurred preliminary to and in connection with theformation and registration of the Company and may exercise all such powers of the Company as are not by the Act or by the Memorandum or theseArticles required to be exercised by the members of the Company, subject to any delegation of such powers as may be authorized by these Articles and tosuch requirements as may be prescribed by a resolution of members; but no requirement made by a resolution of members shall prevail if it be inconsistentwith these Articles nor shall such requirement invalidate any prior act of the directors which would have been valid if such requirement had not been made.Notwithstanding anything in Section 175 of the Act the directors shall have the power to sell, transfer, lease, exchange or otherwise dispose of more thanfifty percent of the assets of the Company without submitting a proposal to or obtaining the consent of the members of the Company.85.If the Company is a whollyowned subsidiary of a holding company a director may when exercising powers or performing duties as a director act in amanner which he believes is in the best interests of the holding company even though it may not be in the best interests of the Company.86.The directors may, by a resolution of directors, appoint any person, including a person who is a director, to be an officer or agent of the Company. Theresolution of directors appointing an agent may authorize the agent to appoint one or more substitutes or delegates to exercise some or all of the powersconferred on the agent by the Company.87.Every officer or agent of the Company has such powers and authority of the directors, including the power and authority to affix the Seal, as are set forth inthese Articles or in the resolution of directors appointing the officer or agent, except that no agent has any power or authority with respect to thefollowing;a.to amend the memorandum or articles;b.to change the registered office or agent;c.to designate committees of directors;d.to delegate powers to a committee of directors;e.to appoint or remove directors;f.to appoint or remove an agent;g.to fix emoluments of directors;h.to approve a plan of merger, consolidation or arrangement;i.to make a declaration of solvency for the purposes of section 198(1)(a) of the Act or to approve a liquidation plan;j.to make a determination under section 57(1) of the Act that the company will, immediately after a proposed distribution, satisfy the solvency test;ork.to authorise the Company to continue as a company incorporated under the laws of a jurisdiction outside the British Virgin Islands.1688.Any director which is a body corporate may appoint any person its duly authorized representative for the purpose of representing it at meetings of theBoard of Directors or with respect to unanimous written consents.89.The continuing directors may act notwithstanding any vacancy in their body, save that if their number is reduced to their knowledge below the numberfixed by or pursuant to these Articles as the necessary quorum for a meeting of directors, the continuing directors or director may act only for the purposeof appointing directors to fill any vacancy that has arisen or for summoning a meeting of members.90.The directors may by resolution of directors exercise all the powers of the Company to borrow money and to mortgage or charge its undertakings andproperty or any part thereof, to issue debentures, debenture stock and other securities whenever money is borrowed or as security for any debt, liability orobligation of the Company or of any third party.91.All cheques, promissory notes, drafts, bills of exchange and other negotiable instruments and all receipts for moneys paid to the Company, shall be signed,drawn, accepted, endorsed or otherwise executed, as the case may be, in such manner as shall from time to time be determined by resolution of directors.92.The Company shall keep a register of all relevant charges created by the Company showing:a.if the charge is a charge created by the Company, the date of its creation or if the charge is existing on property acquired by the Company, the dateon which the property was acquired;b.a short description of the liability secured by the charge;c.a short description of the property charged;d.the name and address of the trustee for the security, or if there is no such trustee the name and address of the chargee;e.unless the charge is a security to bearer, the name and address of the holder of the charge;f.details of any prohibition or restriction , if any, contained in the instrument creating the charge on the power of the company to create any futurecharge ranking in priority to or equally with the charge; andg.such other information as may be prescribed pursuant to the Act.93.The original or a copy of the register of charges shall be kept at the registered office of the Company or at the office of the registered agent of the Company.PROCEEDINGS OF DIRECTORS94.The directors of the Company or any committee thereof may meet at such times and in such manner and places within or outside the British Virgin Islandsas the directors may determine to be necessary or desirable. Any one or more directors may convene a meeting of directors.95.A director shall be deemed to be present at a meeting of directors if he participates by telephone or other electronic means and all directors participating inthe meeting are able to hear each other.96.A director shall be given not less than 3 days notice of meetings of directors, but a meeting of directors held without 3 days notice having been given to alldirectors shall be valid if all the directors entitled to vote at the meeting who do not attend, waive notice of the meeting and for this purpose, the presenceof a director at a meeting shall constitute waiver on his part. The inadvertent failure to give notice of a meeting to a director, or the fact that a director hasnot received the notice, does not invalidate the meeting.1797.A director may by a written instrument appoint an alternate who need not be a director and an alternate is entitled to attend meetings in the absence of thedirector who appointed him and to vote or consent in place of the director.98.A meeting of directors is duly constituted for all purposes if at the commencement of the meeting there are present in person or by alternate not less thanone half of the total number of directors, unless there are only 2 directors in which case the quorum shall be 2.99.If the Company shall have only one director the provisions herein contained for meetings of the directors shall not apply but such sole director shall havefull power to represent and act for the Company in all matters as are not by the Act or the Memorandum or these Articles required to be exercised by themembers of the Company and in lieu of minutes of a meeting shall record in writing and sign a note or memorandum of all matters requiring a resolution ofdirectors. Such a note or memorandum shall constitute sufficient evidence of such resolution for all purposes.100.At every meeting of the directors the Chairman of the Board of Directors shall preside as chairman of the meeting. If there is no Chairman of the Board ofDirectors or if the Chairman of the Board of Directors is not present at the meeting the Vice Chairman of the Board of Directors shall preside. If there is noVice Chairman of the Board of Directors or if the Vice Chairman of the Board of Directors is not present at the meeting the directors present shall choosesome one of their number to be chairman of the meeting.101.An action that may be taken by the directors or a committee of directors at a meeting may also be taken by a resolution of directors or a committee ofdirectors consented to in writing or by telex, telegram, cable, facsimile or other written electronic communication by all directors or all members of thecommittee as the case may be, without the need for any notice. The consent may be in the form of counterparts, each counterpart being signed by one ormore directors.102.The directors shall cause the following records to be kept:a.minutes of all meetings of directors, members, committees of directors and committees of members; andb.copies of all resolutions consented to by directors, members, committees of directors and committees of members.103.The resolutions, records and minutes referred to in the preceding Article shall be kept at the registered office of the Company, its principal place ofbusiness or at such other place as the directors determine.104.The directors may, by resolution of directors, designate one or more committees, each consisting of one or more directors.105.Subject to the following Article, each committee of directors has such powers and authorities of the directors, including the power and authority to affix theSeal, as are set forth in the resolution of directors establishing the committee.106.The directors have no power to delegate the following powers to a committee of directors;a.to amend the memorandum or articles;b.to change the registered office or agent;c.to designate committees of directors;d.to delegate powers to a committee of directors;e.to appoint or remove directors;f.to appoint or remove an agent;g.to fix emoluments of directors;18h.to approve a plan of merger, consolidation or arrangement;i.to make a declaration of solvency for the purposes of section 198(1)(a) or to approve a liquidation plan;j.to make a determination under section 57(1) that the company will, immediately after a proposed distribution, satisfy the solvency test; ork.to authorise the company to continue as a company incorporated under the laws of a jurisdiction outside the British Virgin Islands.Paragraphs (c) and (d) do not prevent a committee of directors, where authorised by the directors, from appointing a subcommittee and delegating powersexercisable by the committee to the subcommittee.107.The meetings and proceedings of each committee of directors consisting of 2 or more directors shall be governed mutatis mutandis by the provisions ofthese Articles regulating the proceedings of directors so far as the same are not superseded by any provisions in the resolution establishing the committee.108.Without prejudice to the freedom of the directors to establish any other committee, if the shares (or depositary receipts therefore) are listed or quoted onthe Designated Stock Exchange, and if required by the Designated Stock Exchange, the directors shall establish and maintain an audit committee as acommittee of the board of directors, the composition and responsibilities of which shall comply with the rules and regulations of the SEC and theDesignated Stock Exchange. The audit committee shall meet at least once every financial quarter, or more frequently as circumstances dictate.109.The Company shall adopt a formal written audit committee charter and review and assess the adequacy of the formal written charter on an annual basis.The charter shall specify the responsibilities of the Audit Committee which shall include responsibility for, among other things, ensuring its receipt from theoutside auditors of the Company of a formal written statement delineating all relationships between the auditor and the Company, and the AuditCommittee’s responsibility for actively engaging in a dialogue with the auditor with respect to any disclosed relationships or services that may impact theobjectivity and independence of the auditor take appropriate action to oversee the independence of the outside auditor. In addition, the Audit Committee isresponsible for reviewing potential conflict of interest situations and approving all Related Party Transactions.110.Without prejudice to the freedom of the directors to establish any other committees, the Board may establish a Stock Option Committee to administer theCompany’s stock option plans, including authority to make and modify awards under such plans. For so long as the Securities of the Company are listed ortraded on the Designated Stock Exchange, the Stock Option Committee shall have at least two Independent Directors. The Stock Option Committee willadminister the Company’s stock option plans, including the authority to make and modify awards under such plans.111.Without prejudice to the freedom of the directors to establish any other committees, the Board may establish a Nominating Committee to assist the Board inidentifying qualified individuals to become members of the Board.OFFICERS112.The Company may by resolution of directors appoint officers of the Company at such times as shall be considered necessary or expedient. Such officersmay consist of a Chairman of the Board of Directors, a Vice Chairman of the Board of Directors, a President and one or more Vice Presidents, Secretaries andTreasurers and such other officers as may from time to time be deemed desirable. Any number of offices may be held by the same person.113.The officers shall perform such duties as shall be prescribed at the time of their appointment subject to any modification in such duties as may beprescribed thereafter by resolution of directors or resolution of members, but in the absence of any specific allocation of duties it shall be the responsibilityof the Chairman of the Board of Directors to preside at meetings of directors and members, the Vice Chairman to act in the absence of the Chairman, thePresident to manage the day to day affairs of the Company, the Vice Presidents to act in order of seniority in the absence of the President but otherwise toperform such duties as may be delegated to them by the President, the Secretaries to maintain the share register, minute books and records (other thanfinancial records) of the Company and to ensure compliance with all procedural requirements imposed on the Company by applicable law, and the Treasurerto be responsible for the financial affairs of the Company.19114.Subject to the rules of the Designated Stock Exchange, the emoluments of all officers shall be fixed by resolution of directors.115.The officers of the Company shall hold office until their successors are duly elected and qualified, but any officer elected or appointed by the directors maybe removed at any time, with or without cause, by resolution of directors. Any vacancy occurring in any office of the Company may be filled by resolutionof directors.CONFLICT OF INTERESTS116.A director of the Company shall, forthwith after becoming aware of the fact that he is interested in a transaction entered into or to be entered into by theCompany, disclose the interest to all other directors of the Company.117.A director of the Company is not required to comply with Article 112 if;a.the transaction or proposed transaction is between the director and the Company; andb.the transaction or proposed transaction is or is to be entered into in the ordinary course of the company’s business and on usual terms andconditions.118.For the purposes of Article 112 a disclosure to all other directors to the effect that a director is a member, director or officer of another named entity or has afiduciary relationship with respect to the entity or a named individual and is to be regarded as interested in any transaction which may, after the date of theentry or disclosure, be entered into with that entity or individual, is a sufficient disclosure of interest in relation to that transaction.119.A.A director of the Company who is interested in a transaction entered into or to be entered into by the Company may:(i)vote on a matter relating to the transaction;(ii)attend a meeting of directors at which a matter relating to the transaction arises and be included among the directors present at the meeting for thepurposes of a quorum; and(iii)sign a document on behalf of the Company, or do any other thing in his capacity as a director, that relates to the transaction,and, subject to compliance with the Act shall not, by reason of his office be accountable to the Company for any benefit which he derives from suchtransaction and no such transaction shall be liable to be avoided on the grounds of any such interest or benefit.119.B.For so long the Securities of the Company are listed or traded on the Designated Stock Exchange, the Company shall conduct an appropriate review of allmaterial Related Party Transactions on an ongoing basis and shall utilize the Audit Committee for the review and approval of potential conflicts of interestsituations.INDEMNIFICATION120.Subject to the limitations hereinafter provided the Company may indemnify against all expenses, including legal fees, and against all judgments, fines andamounts paid in settlement and reasonably incurred in connection with legal, administrative or investigative proceedings any person who;a.is or was a party or is threatened to be made a party to any threatened, pending or completed proceedings, whether civil, criminal, administrative orinvestigative, by reason of the fact that the person is or was a director, an officer or a liquidator of the Company; orb.is or was, at the request of the Company, serving as a director of, or in any other capacity is or was acting for, another body corporate or apartnership, joint venture, trust or other enterprise.20121.The Company may only indemnify a person if the person acted honestly and in good faith in what he believed to be in the best interests of the Companyand, in the case of criminal proceedings, the person had no reasonable cause to believe that his conduct was unlawful.122.For the purposes of the preceding Article, a director acts in the best interests of the Company if he acts in the best interests of;a.the Company’s holding company; orb.a shareholder or shareholders of the Company; in either case, in the circumstances specified in Article 85.123.The decision of the directors as to whether the person acted honestly and in good faith and with a view to the best interests of the Company and as towhether the person had no reasonable cause to believe that his conduct was unlawful is, in the absence of fraud, sufficient for the purposes of theseArticles, unless a question of law is involved.124.The termination of any proceedings by any judgment, order, settlement, conviction or the entering of a nolle prosequi does not, by itself, create apresumption that the person did not act honestly and in good faith and with a view to the best interests of the Company or that the person had reasonablecause to believe that his conduct was unlawful.125.Expenses, including legal fees, incurred by a director in defending any legal, administrative or investigative proceedings may be paid by the Company inadvance of the final disposition of such proceedings upon receipt of an undertaking by or on behalf of the director to repay the amount if it shall ultimatelybe determined that the director is not entitled to be indemnified by the Company in accordance with these Articles.126.Expenses, including legal fees, incurred by a former director in defending any legal, administrative or investigative proceedings may be paid by theCompany in advance of the final disposition of such proceedings upon receipt of an undertaking by or on behalf of the former director to repay the amountif it shall ultimately be determined that the director is not entitled to be indemnified by the Company in accordance with these Articles.127.The indemnification and advancement of expenses provided by, or granted pursuant to, these Articles is not exclusive of any other rights to which theperson seeking indemnification of advancement of expenses may be entitled under any agreement, resolution of members, resolution of disinteresteddirectors or otherwise, both as to acting in the person’s official capacity and as to acting in another capacity while serving as a director of the Company.128.If a person to be indemnified has been successful in defence of any proceedings referred to above the person is entitled to be indemnified against allexpenses, including legal fees, and against all judgments, fines and amounts paid in settlement and reasonably incurred by the person in connection withthe proceedings.129.The Company may purchase and maintain insurance in relation to any person who is or was a director, an officer or a liquidator of the Company, or who atthe request of the Company is or was serving as a director, an officer or a liquidator of, or in any other capacity is or was acting for, another body corporateor a partnership, joint venture, trust or other enterprise, against any liability asserted against the person and incurred by the person in that capacity,whether or not the Company has or would have had the power to indemnify the person against the liability as provided in these Articles.SEAL130.The Company shall have a Seal and may have more than one Seal. References herein to the Seal shall be references to every Seal which shall have beenduly adopted by resolution of directors. The directors shall provide for the safe custody of the Seal and for an imprint thereof to be kept at the office of theregistered agent of the Company. Except as otherwise expressly provided herein, the Seal when affixed to any written instrument, shall be witnessed andattested to by the signature of a director or any other person so authorized from time to time by resolution of directors. Such authorization may be before orafter the Seal is affixed, may be general or specific and may refer to any number of sealings. The Directors may provide for a facsimile of the Seal and of thesignature of any director or authorized person which may be reproduced by printing or other means on any instrument and it shall have the same force andvalidity as if the Seal had been affixed to such instrument and the same had been signed as hereinbefore described.21DISTRIBUTIONS131.The directors of the Company may by resolution authorise a distribution by the Company at any time and of any amount and to any members they think fitif they are satisfied on reasonable grounds that immediately after the distribution;a.the value of the Company’s assets will exceed its liabilities, andb.the Company will be able to pay its debts as they fall due.132.A resolution of the directors passed under the preceding Article shall contain a statement that, in the opinion of the directors, immediately after thedistribution the value of the Company’s assets will exceed its liabilities, and the Company will be able to pay its debts as they fall due.133.If, after a distribution is authorised and before it is made, the directors cease to be satisfied on reasonable grounds that the Company will, immediately afterthe distribution satisfy the solvency test, any distribution made by the Company is deemed not to have been authorised.134.If, by virtue of the preceding Article, a distribution is deemed not to have been authorised, a director who;a.ceased, after authorisation but before the making of the distribution, to be satisfied on reasonable grounds for believing that the company wouldsatisfy the solvency test immediately after the distribution is made; andb.failed to take reasonable steps to prevent the distribution being made;is personally liable to the company to repay to the company so much of the distribution as is not able to be recovered from members.135.A distribution made to a member at a time when the company did not, immediately after the distribution, satisfy the solvency test may be recovered by thecompany from the member unless;a.the member received the distribution in good faith and without knowledge of the company’s failure to satisfy the solvency test;b.the member has altered his position in reliance on the validity of the distribution; andc.it would be unfair to require repayment in full or at all.DISTRIBUTIONS BY WAY OF DIVIDEND136.The Company may by a resolution of directors declare a distribution by way of dividend and pay such distribution in money, shares or other property. Inthe event that distributions by way of dividend are paid in specie the directors shall have responsibility for establishing and recording in the resolution ofdirectors authorizing the distribution by way of dividend, a fair and proper value for the assets to be so distributed.137.The directors may from time to time pay to the members such interim distributions by way of dividend as appear to the directors to be justified by theprofits of the Company.138.The directors may, before declaring any distribution by way of dividend, set aside out of the profits of the Company such sum as they think proper as areserve fund, and may invest the sum so set aside as a reserve fund upon such securities as they may select.139.Notice of any distribution by way of dividend that may have been declared shall be given to each member in the manner hereinafter mentioned and alldistributions by way of dividend unclaimed for 3 years after having been declared may be forfeited by resolution of directors for the benefit of theCompany.140.No distribution by way of dividend shall bear interest as against the Company and no distribution by way of dividend shall be paid on treasury shares orshares held by another company of which the Company holds, directly or indirectly, shares having more than 50 percent of the vote in electing directors.22141.A share issued as a distribution by way of dividend by the Company shall be treated for all purposes as having been issued for money equal to the valuedetermined by resolution of the directors. In the absence of fraud the decision of the directors as to the value of the share is conclusive unless a questionof law is involved.142.A division of the issued and outstanding shares of a class or series of shares into a larger number of shares of the same class or series having aproportionately smaller par value does not constitute a distribution by way of dividend of shares.ACCOUNTS AND AUDIT143.The Company may by resolution of members call for the directors to prepare periodically a profit and loss account and a balance sheet. The profit and lossaccount and balance sheet shall be drawn up so as to give respectively a true and fair view of the profit and loss of the Company for the financial periodand a true and fair view of the state of affairs of the Company as at the end of the financial period.144.The Company may by resolution of members call for the accounts to be examined by auditors.145.Subject to the rules of the Designated Stock Exchange, the first auditors shall be appointed by resolution of directors; subsequent auditors shall beappointed by the Audit Committee and shall hold office until the Audit Committee appoint another independent auditor.146.Subject to the rules of the Designated Stock Exchange, the remuneration of the auditors of the Company shall be fixed by the Audit Committee.147.The auditors shall examine each profit and loss account and balance sheet required to be served on every member of the Company or laid before a meetingof the members of the Company and shall state in a written report whether or nota.in their opinion the profit and loss account and balance sheet give a true and fair view respectively of the profit and loss for the period covered bythe accounts, and of the state of affairs of the Company at the end of that period; andb.all the information and explanations required by the auditors have been obtained.148.The report of the auditors shall be annexed to the accounts and shall be read at the meeting of members at which the accounts are laid before the Companyor shall be served on the members.149.Every auditor of the Company shall have a right of access at all times to the books of account and vouchers of the Company, and shall be entitled to requirefrom the directors and officers of the Company such information and explanations as he thinks necessary for the performance of the duties of the auditors.150.The auditors of the Company shall be entitled to receive notice of, and to attend any meetings of members of the Company at which the Company’s profitand loss account and balance sheet are to be presented.NOTICES151.Any notice, information or written statement to be given by the Company to members may be served in any way by which it can reasonably be expected toreach each member or by mail addressed to each member at the address shown in the share register.152.Any summons, notice, order, document, process, information or written statement to be served on the Company may be served by leaving it, or by sendingit by registered mail addressed to the Company, at its registered office, or by leaving it with, or by sending it by registered mail to, the registered agent ofthe Company.153.Service of any summons, notice, order, document, process, information or written statement to be served on the Company may be proved by showing thatthe summons, notice, order, document, process, information or written statement was delivered to the registered office or the registered agent of theCompany or that it was mailed in such time as to admit to its being delivered to the registered office or the registered agent of the Company in the normalcourse of delivery within the period prescribed for service and was correctly addressed and the postage was prepaid.23PENSION AND SUPERANNUATION FUNDS154.The directors may establish and maintain or procure the establishment and maintenance of any noncontributory or contributory pension orsuperannuation funds for the benefit of, and give or procure the giving of donations, gratuities, pensions, allowances or emoluments to, any persons whoare or were at any time in the employment or service of the Company or any company which is a subsidiary of the Company or is allied to or associated withthe Company or with any such subsidiary, or who are or were at any time directors or officers of the Company or of any such other company as aforesaid orwho hold or held any salaried employment or office in the Company or such other company, or any persons in whose welfare the Company or any suchother company as aforesaid is or has been at any time interested, and to the wives, widows, families and dependents of any such person, and may makepayments for or towards the insurance of any such persons as aforesaid, and may do any of the matters aforesaid either alone or in conjunction with anysuch other company as aforesaid. Subject always to the proposal being approved by resolution of members, a director holding any such employment oroffice shall be entitled to participate in and retain for his own benefit any such donation, gratuity, pension allowance or emolument.VOLUNTARY WINDING UP AND DISSOLUTION155.The Company may voluntarily commence to wind up and dissolve by a resolution of members but if the Company has never issued shares it mayvoluntarily commence to wind up and dissolve by resolution of directors.CONTINUATION156.The Company may by resolution of members or by a resolution passed unanimously by all directors of the Company continue as a company incorporatedunder the laws of a jurisdiction outside the British Virgin Islands in the manner provided under those laws.ARBITRATION157.Whenever any difference arises between the Company on the one hand and any of the members or their executors, administrators or assigns on the otherhand, touching the true intent and construction or the incidence or consequences of these Articles or of the Act, touching anything done or executed,omitted or suffered in pursuance of the Act or touching any breach or alleged breach or otherwise relating to the premises or to these Articles, or to anyAct or Ordinance affecting the Company or to any of the affairs of the Company such difference shall, unless the parties agree to refer the same to a singlearbitrator, be referred to 2 arbitrators one to be chosen by each of the parties to the difference and the arbitrators shall before entering on the referenceappoint an umpire.158.If either party to the reference makes default in appointing an arbitrator either originally or by way of substitution (in the event that an appointed arbitratorshall die, be incapable of acting or refuse to act) for 10 days after the other party has given him notice to appoint the same, such other party may appoint anarbitrator to act in the place of the arbitrator of the defaulting party.We, Portcullis TrustNet (BVI) Limited of Portcullis TrustNet Chambers, P.O. Box 3444, Road Town, Tortola, British Virgin Islands for the purpose of incorporating aBVI Business Company under the laws of the British Virgin Islands hereby sign these Articles of Association the 27th day of October, 2009.Incorporator/s/ Nicole WheatleyPortcullis TrustNet (BVI) LimitedPortcullis TrustNet ChambersP.O. Box 3444Road Town, TortolaBritish Virgin Islands(Sgd. Nicole Wheatley)24EX4.15 3 f20f2017ex415_luokung.htm EXCLUSIVE BUSINESS COOPERATION AGREEMENT BY AND BETWEEN ZHONGCHUAN TIANXIA INFORMATIONTECHNOLOGY (SHENZHEN) CO., LTD., AND BEIJING MOBILE VISION TECHNOLOGY CO., LTD., DATED AUGUST 31, 2015Exhibit 4.15独家业务合作协议Exclusive Business Cooperation Agreement本独家业务合作协议（下称“本协议”）由以下双方于年月日在中华人民共和国（下称“中国”）北京市签署。This Exclusive Business Cooperation Agreement (this “Agreement”) is made and entered into by and between the following parties on in Beijing, thePeople’s Republic of China (“China” or the “PRC”).甲方：中传天下信息科技（深圳）有限公司Party A: Zhongchuan Tianxia Information Technology (Shenzhen) Co., Ltd.地址：深圳市南山区高新中三道2号深圳软件园一期五栋401A Address: 401A, Building 5, Phase 1, Shenzhen Software Park, No.2 Gaoxin Zhongsan Road, Nanshan District, Shenzhen统一社会信用代码：91440300565701058R Uniform Social Credit Code: 91440300565701058R乙方：北京中传视讯科技有限公司Party B: Beijing Mobile Vision Technology Co., Ltd.地址：北京市朝阳区光华路9号SOHO3QLAB32Address: LAB32, SOHO3Q, No 9, Guanghua Road, Chaoyang District, Beijing统一社会信用代码：9111010576215249XMUniform Social Credit Code: 9111010576215249XM甲方和乙方以下各称为“一方”，统称为“双方”。Each of Party A and Party B shall be hereinafter referred to as a “Party” respectively, and as “Parties” collectively.1秘密文件Strictly Confidential鉴于：Whereas,1.甲方是一家在中国注册的外商独资企业，拥有丰富的技术研发和产业化推广相关的管理和投资经验，并提供相关的技术支持和咨询服务；Party A is a whollyforeignowned enterprise established in China, which has rich experience in technology research development and industrializationpromotion management and investment, and provides relevant technical support and consulting services;2.乙方是一家在中国成立的有限责任公司，经中国有关政府部门批准依法主要从事手机视频技术开发、内容制作及市场推广；Party B is a limited company in China, mainly engages in mobile video technology research, development, content creation, sale and related industrialpromotion as approved by the relevant governmental authorities in China;3.甲方同意利用其技术、人员和信息优势，在本协议期间向乙方提供有关手机视频技术开发、内容制作及市场推广以及未来扩大业务规模和业务范围时乙方所需的技术支持、技术咨询等相关服务，乙方同意接受甲方或其指定方按本协议条款的规定提供的各种服务。Party A is willing to provide Party B with technology supports and technology consulting services in connection with mobile video technology research,development, content creation, sale and related industrial promotion and such services in connection with Party B’s extension of business scale orbroadening of businesses during the term of this Agreement, utilizing its advantages in technology, human resources, and information, and Party B iswilling to accept such services provided by Party A or Party A's designee(s), each on the terms set forth herein.2秘密文件Strictly Confidential据此，甲方和乙方经协商一致，达成如下协议：Now, therefore, through mutual discussion, the Parties have reached the following agreements:1.服务提供Services Provided by Party A1.1按照本协议条款和条件，乙方在此委任甲方在本协议期间作为乙方的独家服务提供者向乙方提供全面的和手机视频技术开发、内容制作及市场推广相关以及未来扩大业务规模和业务范围时乙方所需的技术支持、业务支持和相关咨询服务，具体内容包括但不限于以下内容：Party B hereby appoints Party A as Party B's exclusive services provider to provide Party B with complete technical support, business supportand related consulting services in connection with mobile video technology research, development, content creation, sale and related industrialpromotion and such services in connection with Party B’s extension of business scale or broadening of businesses during the term of thisAgreement, in accordance with the terms and conditions of this Agreement, which may include but not limited to:1.1.1为乙方提供其手机视频技术开发、内容制作及市场推广业务所需的一切服务支持，为乙方提供相当于包括总经理、行政人员、管理人员、筹划部门、商业运营、人力资源、财务、会计以及与乙方业务相关的一切业务操作所需人员所能提供的服务内容；managing all aspects of Party B’s business of mobile video technology research, development, content creation, sale and relatedindustrial promotion. In this capacity, Party A will procure or engage for Party B the services of a general manager and other managementstaff, including but not limited to personnel responsible for all administration, operations, planning, business development, humanresources, finance, accounting and other operations related to the Business of Party B;3秘密文件Strictly Confidential1.1.2为乙方制定全部的商业计划、销售目标，并为优化执行该等商业计划设计和建立相应的系统及操作程序；developing all business plans and sales projections of Party B, and for developing and establishing systems and procedures for optimumexecution of the business plans;1.1.3为乙方申请手机视频技术及内容制作相关专利提供咨询服务和支持；consulting services and support in connection with Party B’s applying for mobile video technology related patents and content creation;1.1.4为乙方手机视频技术产业化的发展方向、规模、品牌提升提供咨询服务；consulting services in connection with the development directions, size and business brands promotion of Party B’s mobile videotechnology industrialization;4秘密文件Strictly Confidential1.1.5为乙方提供与业务相关的办公、生产和销售服务，为乙方租赁场所，建立业务相关的系统和程序，满足乙方的其他要求；procuring or obtaining for Party B all office, production and distribution services related to the Business. It shall procure or obtainappropriate leases, establish systems and procedures needed to operate the business, fulfill orders for services;1.1.6尽最大努力为乙方建立手机视频技术销售市场，根据甲方为乙方制定的商业计划及销售目标代表乙方获取客户订单，同时为乙方提供与业务相关的客户服务，建立向客户开具票据的程序和与会计相关的托收服务。using its best efforts to establish mobile video technology related marketing and other structures to obtain orders for services &products from customers on behalf of Party B in accordance with Party B’s business plans, sales projections and objectives (asdeveloped by Party A) and procure or obtain customer services required in connection with the Business. It shall also establishprocedures for invoicing customers, and establish collection services with respect to accounts;1.1.7就乙方的劳动用工方面提供咨询服务和支持，包括但不限于，组织实施对乙方业务人员、行政人员、管理人员等人员进行培训和考核，协助建立健全的人力资源管理制度和实现人力资源的良好配置；consulting services and support regarding labor system of Party B, including but without limitation to labor training and evaluation ofsales person, administrative staff and management person etc. and establishment of human resources management system to well;5秘密文件Strictly Confidential1.1.8提供乙方需要的客户数据统计、分析及相关数据库的建设和维护等咨询服务；providing Party B with compile and analysis of client data and consulting services of establishment and maintenance of data base;1.1.9提供乙方需要的软件和相关技术支持服务；providing software Party B requires and other technical support;1.1.10接受乙方委托，对乙方的手机视频技术研发和产业化推广业务经营进行指导和管理；guiding and management on Party B’s business of mobile video technology research and development and related industrial promotionoperation according to Party B’s commission;1.1.11当乙方业务规模发展或业务范围扩大需要时，购买乙方业务经营需要的设备；in the event of the demand of Party B’s development of business scale or broadening of businesses, purchase the equipments which itneeds for the operation of its business;1.1.12当乙方业务规模发展或业务范围扩大需要时，完成乙方项目中的全部或部分工作；in the event of the demand of Party B’s development of business scale or broadening of businesses, complete the work of Party B’sproject in whole or in party;6秘密文件Strictly Confidential1.1.13当乙方业务规模发展或业务范围扩大需要时，开发新技术；in the event of the demand of Party B’s development of business scale or broadening of businesses, develop new technology;1.1.14乙方委托甲方，且甲方接受委托提供的其他服务。other services Party B appoints Party A to provide and Party A agrees to provide.1.2乙方接受甲方的咨询和服务。乙方进一步同意，除非经甲方事先书面同意，在本协议期间，就本协议约定的服务或其他事宜，乙方不得直接或间接地从任何第三方获得任何与本协议相同或类似的咨询和/或服务，并不得与任何第三方就本协议所述事项建立任何类似的合作关系。双方同意，甲方可以指定其他方（该被指定方可以与乙方签署本协议第1.3条描述的某些协议）为乙方提供本协议约定的服务和/或支持。Party B agrees to accept all the consultations and services provided by Party A. Party B further agrees that unless with Party A's prior writtenconsent, during the term of this Agreement, Party B shall not directly or indirectly accept the same or any similar consultations and/or servicesprovided by any third party and shall not establish similar corporation relationship with any third party regarding the matters contemplated by thisAgreement. Party A may appoint other parties, who may enter into certain agreements described in Section 1.3 with Party B, to provide Party Bwith the consultations and/or services under this Agreement.7秘密文件Strictly Confidential1.3服务的提供方式Service Providing Methodology1.3.1双方同意在本协议有效期内，视情况而定，乙方可以与甲方或甲方指定的其他方进一步签订技术服务协议和/或咨询服务协议，对各项业务培训、技术服务、咨询服务的具体内容、方式、人员、收费等进行约定。Parties agree that during the term of this Agreement, where necessary, Party B may enter into further technical service agreements and/orconsulting service agreements with Party A or any other party designated by Party A, which shall provide the specific contents, manner,personnel, and fees for the specific technical services and consulting services.1.3.2为更好地履行本协议，双方同意，在甲方认为必要时，乙方应在本协议有效期内与甲方或甲方指定的其他方根据业务进展需要随时签署协议，由甲方或其指定方向乙方提供服务。To fulfill this Agreement, Parties agree that during the term of this Agreement, where Party A deems necessary, Party B shall enter intoagreements with Party A or any other party designated by Party A which shall set forth that Party A or any other party designated byParty A provide services to Party B based on the needs of the business of Party B.8秘密文件Strictly Confidential2.服务的价格和支付方式The Calculation and Payment of the Service Fees双方同意，就甲方提供的服务，乙方应向甲方支付服务费（“服务费”）。服务费不应低于乙方税后利润的80%。服务费应当按季支付；经甲方事先书面同意，服务费可以根据乙方的经营需要进行调整。Both Parties agree that, in consideration of the services provided by Party A, Party B shall pay Party A fees (the “Service Fees”), which shall not be lessthan 80% of Party B’s aftertax profits . The Service Fees shall be due and payable on a quarterly basis; upon the prior written consent by Party A, the rateof Service Fees may be adjusted pursuant to the operational needs of Party B.3.知识产权和保密条款Intellectual Property Rights and Confidentiality Clauses3.1在中国法律允许的范围内，甲方对履行本协议而产生或创造的任何权利、所有权、权益和所有知识产权包括但不限于著作权、专利权、专利申请权、软件、技术秘密、商业机密及其他均享有独占的和排他的权利和利益。乙方须签署所有适当的文件，采取所有适当的行动，递交所有的文件和/或申请，提供所有适当的协助，以及做出所有其他依据甲方的自行决定认为是必要的行为，以将任何对该等知识产权的所有权、权利和权益赋予甲方，和/或完善对甲方此等知识产权权利的保护。To the extent permitted under the PRC laws, Party A shall have exclusive and proprietary rights and interests in all rights, ownership, interests andintellectual properties arising out of or created during the performance of this Agreement, including but not limited to copyrights, patents, patentapplications, software, technical secrets, trade secrets and others. Party B shall execute all appropriate documents, take all appropriate actions,submit all filings and/or applications, render all appropriate assistance and otherwise conduct whatever is necessary deemed as by Party A in itssole discretion for the purposes of vesting any ownership, right or interest of any such intellectual property rights in Party A, and/or perfectingthe protections for any such intellectual property rights in Party A.9秘密文件Strictly Confidential3.2双方承认及确定有关本协议、本协议内容，以及彼此就准备或履行本协议而交换的任何口头或书面资料均被视为保密信息。双方应当对所有该等保密信息予以保密，而在未得到另一方书面同意前，不得向任何第三者披露任何保密信息，惟下列信息除外：(a)公众人士知悉或将会知悉的任何信息（惟并非由接受保密信息之一方擅自向公众披露）；(b)根据适用法律法规、股票交易规则、或政府部门或法院的命令而所需披露之任何信息；或(c)由任何一方就本协议所述交易而需向其股东、投资者、法律或财务顾问披露之信息，而该股东、法律或财务顾问亦需遵守与本条款相类似之保密责任。如任何一方工作人员或聘请机构的泄密均视为该方的泄密，需依本协议承担违约责任。无论本协议以任何理由终止，本条款仍然生效。The Parties acknowledge that the existence and the terms of this Agreement and any oral or written information exchanged between the Parties inconnection with the preparation and performance this Agreement are regarded as confidential information. Each Party shall maintainconfidentiality of all such confidential information, and without obtaining the written consent of the other Party, it shall not disclose any relevantconfidential information to any third parties, except for the information that: (a) is or will be in the public domain (other than through the receivingParty’s unauthorized disclosure); (b) is under the obligation to be disclosed pursuant to the applicable laws or regulations, rules of any stockexchange, or orders of the court or other government authorities; or (c) is required to be disclosed by any Party to its shareholders, investors,legal counsels or financial advisors regarding the transaction contemplated hereunder, provided that such shareholders, investors, legal counselsor financial advisors shall be bound by the confidentiality obligations similar to those set forth in this Section. Disclosure of any confidentialinformation by the staff members or agencies hired by any Party shall be deemed disclosure of such confidential information by such Party, whichParty shall be held liable for breach of this Agreement. This Section shall survive the termination of this Agreement for any reason.3.3双方同意，不论本协议是否变更、解除或终止，本条款将持续有效。The Parties agree that this Section shall survive changes to, and rescission or termination of, this Agreement.4.陈述和保证Representations and Warranties4.1甲方陈述和保证如下：Party A hereby represents and warrants as follows:4.1.1甲方是按照中国法律合法注册并有效存续的外商独资企业。Party A is a whollyforeignowned enterprise legally registered and validly existing in accordance with the laws of China.10秘密文件Strictly Confidential4.1.2甲方已采取必要的公司行为，获得必要的授权，并取得第三方和政府部门的同意及批准（若需）以签署和履行本协议；甲方对本协议的签署和履行并不违反法律法规的明确规定。Party A has taken all necessary corporate actions, obtained all necessary authorization and the consent and approval from third partiesand government agencies (if any) for the execution and performance of this Agreement. Party A’s execution and performance of thisAgreement do not violate any explicit requirements under any law or regulation binding on Party A.4.1.3本协议构成对其合法、有效、有约束力并依本协议之条款对其强制执行的义务。This Agreement constitutes Party A's legal, valid and binding obligations, enforceable in accordance with its terms.4.2乙方陈述和保证如下：Party B hereby represents and warrants as follows:4.2.1乙方是按照中国法律合法登记且有效存续的有限责任公司，乙方根据政府部门的批准和许可从事手机视频技术开发、内容制作和产业化市场推广的经营。Party B is a limited company legally registered and validly existing in accordance with the laws of China, engages in mobile videotechnology research, development, content creation, sale and related industrial promotion pursuant to governmental approvals andpermits;11秘密文件Strictly Confidential4.2.2乙方已采取必要的行为，获得必要的授权，并取得第三方和政府部门的同意及批准（若需）以签署和履行本协议；乙方对本协议的签署和履行并不违反法律法规的明确规定。Party B has taken all necessary actions, obtained all necessary authorization and the consent and approval from third parties andgovernment agencies (if any) for the execution and performance of this Agreement. Party B’s execution and performance of thisAgreement do not violate any explicit requirements under any law or regulation binding on Party B.4.2.3本协议构成对其合法、有效、有约束力并依本协议之条款对其强制执行的义务。This Agreement constitutes Party B's legal, valid and binding obligations, and shall be enforceable against it.5.生效和有效期Effectiveness and Term5.1本协议于文首标明的协议日期签署并同时生效。除非依本协议或双方其他协议的约定而提前终止，本协议有效期为20年，但甲、乙双方应自本协议签署后，每3个月对本协议的内容做一次审查，以决定是否需要根据当时的情况对本协议作出相应修改和补充。This Agreement is executed on the date first above written and shall take effect as of such date. Unless earlier terminated in accordance with theprovisions of this Agreement or relevant agreements separately executed between the Parties, the term of this Agreement shall be 20 years. Afterthe execution of this Agreement, both Parties shall review this Agreement every 3 months to determine whether to amend or supplement theprovisions in this Agreement based on the actual circumstances at that time.12秘密文件Strictly Confidential5.2协议期满前，经甲方书面确认，本协议可以延期。延期的期限由甲方决定，乙方必须无条件地同意该延期。The term of this Agreement may be extended if confirmed in writing by Party A prior to the expiration thereof. The extended term shall bedetermined by Party A, and Party B shall accept such extended term unconditionally.6.终止Termination6.1除非依据本协议续期，本协议于到期之日终止。Unless renewed in accordance with the relevant terms of this Agreement, this Agreement shall be terminated upon the date of expiration hereof.6.2本协议有效期内，除非甲方对乙方有重大过失或存在欺诈行为，乙方不得提前终止本协议。尽管如此，甲方可在任何时候通过提前30天向乙方发出书面通知的方式终止本协议。During the term of this Agreement, unless Party A commits gross negligence, or a fraudulent act, against Party B, Party B shall not terminate thisAgreement prior to its expiration date. Nevertheless, Party A shall have the right to terminate this Agreement upon giving 30 days' prior writtennotice to Party B at any time.6.3在本协议终止之后，双方在第3、7和8条项下的权利和义务将继续有效。The rights and obligations of the Parties under Articles 3, 7 and 8 shall survive the termination of this Agreement.13秘密文件Strictly Confidential7.适用法律和争议解决Governing Law and Resolution of Disputes7.1本协议的订立、效力、解释、履行、修改和终止以及争议的解决适用中国的法律。The execution, effectiveness, construction, performance, amendment and termination of this Agreement and the resolution of disputes hereundershall be governed by the laws of China.7.2因解释和履行本协议而发生的任何争议，本协议双方应首先通过友好协商的方式加以解决。如果在一方向其他方发出要求协商解决的书面通知后30天之内争议仍然得不到解决，则任何一方均可将有关争议提交给中国国际经济贸易仲裁委员会，由该会按照其仲裁规则仲裁解决。仲裁应在北京进行，使用之语言为中文。仲裁裁决是终局性的，对各方均有约束力。In the event of any dispute with respect to the construction and performance of this Agreement, the Parties shall first resolve the dispute throughfriendly negotiations. In the event the Parties fail to reach an agreement on the dispute within 30 days after either Party's request to the otherParties for resolution of the dispute through negotiations, either Party may submit the relevant dispute to the China International Economic andTrade Arbitration Commission for arbitration, in accordance with its Arbitration Rules. The arbitration shall be conducted in Beijing, and thelanguage used in arbitration shall be Chinese. The arbitration award shall be final and binding on all Parties.14秘密文件Strictly Confidential7.3因解释和履行本协议而发生任何争议或任何争议正在进行仲裁时，除争议的事项外，本协议双方仍应继续行使各自在本协议项下的其他权利并履行各自在本协议项下的其他义务。Upon the occurrence of any disputes arising from the construction and performance of this Agreement or during the pending arbitration of anydispute, except for the matters under dispute, the Parties to this Agreement shall continue to exercise their respective rights under this Agreementand perform their respective obligations under this Agreement.8.补偿Indemnification就甲方根据本协议向乙方提供的咨询和服务内容所产生或引起的针对甲方的诉讼、请求或其他要求而招致的任何损失、损害、责任或费用都应由乙方补偿给甲方，以使甲方不受损害，除非该损失、损害、责任或费用是因甲方的重大过失或故意而产生的。Party B shall indemnify and hold harmless Party A from any losses, injuries, obligations or expenses caused by any lawsuit, claims or other demandsagainst Party A arising from or caused by the consultations and services provided by Party A to Party B pursuant this Agreement, except where suchlosses, injuries, obligations or expenses arise from the gross negligence or willful misconduct of Party A.15秘密文件Strictly Confidential9.通知Notices9.1本协议项下要求或发出的所有通知和其他通信应通过专人递送、挂号邮寄、邮资预付或快递服务或传真的方式发到该方下列地址。每一通知还应再以电子邮件送达。该等通知视为有效送达的日期按如下方式确定：All notices and other communications required or permitted to be given pursuant to this Agreement shall be delivered personally or sent byregistered mail, postage prepaid, by a courier service or by facsimile transmission to the address of such Party set forth below. A confirmationcopy of each notice shall also be sent by email. The dates on which notices shall be deemed to have been effectively given shall be determined asfollows:9.1.1通知如果是以专人递送、快递服务或挂号邮寄、邮资预付发出的，则以于设定为通知的地址在接收或拒收之日为有效送达日。Notices given by personal delivery, by courier service or by registered mail, postage prepaid, shall be deemed effectively given on thedate of receipt or refusal at the address specified for notices.9.1.2通知如果是以传真发出的，则以成功传送之日为有效送达日（应以自动生成的传送确认信息为证）。Notices given by facsimile transmission shall be deemed effectively given on the date of successful transmission (as evidenced by anautomatically generated confirmation of transmission).16秘密文件Strictly Confidential9.2为通知的目的，双方地址如下：For the purpose of notices, the addresses of the Parties are as follows:甲方：中传天下信息科技（深圳）有限公司Party A: Zhongchuan Tianxia Information Technology (Shenzhen) Co., Ltd.地址：深圳市南山区高新中三道2号深圳软件园一期五栋401AAddress:401A, Building 5, Phase 1, Shenzhen Software Park, No.2 Gaoxin Zhongsan Road, Nanshan District, Shenzhen收件人：洪婷Attn: Hong Ting乙方：北京中传视讯科技有限公司Party B: Beijing Mobile Vision Technology Co., Ltd地址：北京市朝阳区光华路9号SOHO3QLAB32Address: LAB32, SOHO3Q, No 9, Guanghua Road, Chaoyang District, Beijing.收件人：宋雪松Attn.: Song Xuesong9.3任何一方可按本条规定随时给另一方发出通知来改变其接收通知的地址。Any Party may at any time change its address for notices by a notice delivered to the other Party in accordance with the terms hereof.17秘密文件Strictly Confidential10.协议的转让Assignment10.1乙方不得将其在本协议项下的权利与义务转让给第三方，除非事先征得甲方的书面同意。Without Party A's prior written consent, Party B shall not assign its rights and obligations under this Agreement to any third party.10.2乙方在此同意，甲方可以在其需要时向其他第三方转让其在本协议项下的权利和义务，并在该等转让发生时甲方仅需向乙方发出书面通知，并且无需再就该等转让征得乙方的同意。Party B agrees that Party A may assign its obligations and rights under this Agreement to any third party upon a prior written notice to Party Bbut without the consent of Party B.11.协议的分割性Severability如果本协议有任何一条或多条规定根据任何法律或法规在任何方面被裁定为无效、不合法或不可执行，本协议其余规定的有效性、合法性或可执行性不应因此在任何方面受到影响或损害。双方应通过诚意磋商，争取以法律许可以及双方期望的最大限度内有效的规定取代那些无效、不合法或不可执行的规定，而该等有效的规定所产生的经济效果应尽可能与那些无效、不合法或不能强制执行的规定所产生的经济效果相似。In the event that one or several of the provisions of this Agreement are found to be invalid, illegal or unenforceable in any aspect in accordance with anylaws or regulations, the validity, legality or enforceability of the remaining provisions of this Agreement shall not be affected or compromised in any aspect.The Parties shall strive in good faith to replace such invalid, illegal or unenforceable provisions with effective provisions that accomplish to the greatestextent permitted by law and the intentions of the Parties, and the economic effect of such effective provisions shall be as close as possible to the economiceffect of those invalid, illegal or unenforceable provisions.18秘密文件Strictly Confidential12.协议的修改、补充Amendments and Supplements双方可以书面协议方式对本协议作出修改和补充。经过双方签署的有关本协议的修改协议和补充协议是本协议组成部分，具有与本协议同等的法律效力。Any amendments and supplements to this Agreement shall be in writing. The amendment agreements and supplementary agreements that have beensigned by the Parties and that relate to this Agreement shall be an integral part of this Agreement and shall have the same legal validity as this Agreement.13.语言和副本Language and Counterparts本协议以中文和英文书就，一式二份，甲乙双方各持一份，具有同等效力；中英文版本如有冲突，应以中文版为准。This Agreement is written in both Chinese and English language in two copies, each Party having one copy with equal legal validity; in case there is anyconflict between the Chinese version and the English version, the Chinese version shall prevail.本页其余部分刻意留为空白The Remainder of this page is intentionally left blank19秘密文件Strictly Confidential有鉴于此，双方已使得经其授权的代表于文首所述日期签署了本独家业务合作协议并即生效，以昭信守。IN WITNESS WHEREOF, the Parties have caused their authorized representatives to execute this Exclusive Business Cooperation Agreement as of thedate first above written.甲方：中传天下信息科技（深圳）有限公司（盖章）Party A: Zhongchuan Tianxia Information Technology (Shenzhen) Co., Ltd.(Seal)签字：By: /s/ Hong Ting 姓名：洪婷Name: Hong Ting职务：总经理Title: General Manager20秘密文件Strictly Confidential有鉴于此，双方已使得经其授权的代表于文首所述日期签署了本独家业务合作协议并即生效，以昭信守。IN WITNESS WHEREOF, the Parties have caused their authorized representatives to execute this Exclusive Business Cooperation Agreement as of thedate first above written. 乙方：北京中传视讯科技有限公司（盖章）Party B: Beijing Mobile Vision Technology Co., Ltd. (Seal)签字：By: /s/ Song Xuesong 姓名：宋雪松Name: Song Xuesong职务：董事长Title: Chairman of the Board21秘密文件Strictly ConfidentialEX4.16 4 f20f2017ex416_luokung.htm EXCLUSIVE OPTION AGREEMENT BY AND AMONG ZHONGCHUAN TIANXIA INFORMATION TECHNOLOGY(SHENZHEN) CO., LTD., XUESONG SONG, WEILI CHEN, PING WANG, DONGLAI LIU, AND BEIJING MOBILE VISION TECHNOLOGY CO., LTD., DATEDAUGUST 31, 2015Exhibit 4.16独家购买权协议Exclusive Option Agreement本独家购买权协议 (下称“本协议”) 由以下各方于年月日在中华人民共和国（下称“中国”）北京签订：This Exclusive Option Agreement (this “Agreement”) is executed by and among the Parties below as of in Beijing, the People’s Republic of China (the“China” or “PRC”):甲方：中传天下信息科技（深圳）有限公司，一家依照中国法律设立和存在的外商独资企业，地址为深圳市南山区高新中三道2号深圳软件园一期五栋401A；Party A:Zhongchuan Tianxia Information Technology (Shenzhen) Co., Ltd., a whollyforeignowned enterprise organized and existing under the laws of China,with its address at 401A, Building 5, Phase 1, Shenzhen Software Park, No.2 Gaoxin Zhongsan Road, Nanshan District, Shenzhen.乙方：Party B:a)宋雪松Song Xuesong身份证号码:120112196809040417ID Card No.:120112196809040417住所：天津市河西区广东路中裕园33702Address:Zhongyu Yuan 33702, Guangdong Road, Hexi District, Tianjinb)陈蔚力Chen Weili身份证号码:120106197309240516ID Card No.:120106197309240516住所：广东省深圳市宝安区宝城上川路15号Address:Baocheng Shangchuan Road 15, Baoan District, Shenzhen, Guangdong1秘密文件Strictly Confidentialc)王平Wang Ping身份证号码:35020319691030401xID Card No.:35020319691030401x住所：广东省深圳市南山区高新南环路36号彩虹之岸12栋4AAddress:Caihong Zhi’an Building No.12 Suite 4A, Gaoxin Nanhuan Road 36, Nanshan District, Shenzhen, Guangdongd)刘东来Liu Donglai身份证号码:120107196810103912ID Card No.:120107196810103912住所：天津市和平区南京路诚基经贸中心1号楼2门1702号Address:No 1702, Door 2, Build 1, Chengji Economic and Trade Centre, Nanjing Road, Heping District, Tianjin.丙方：北京中传视讯科技有限公司，一家依照中国法律设立和存在的有限责任公司，地址为北京市朝阳区光华路9号SOHO3QLAB32，统一社会信用代码为9111010576215249XM；Party C:Beijing Mobile Vision Technology Co., Ltd., a limited company duly registered in China, with its address at LAB32, SOHO3Q, No 9, Guanghua Road,Chaoyang District, Beijing and its uniform social credit code of 9111010576215249XM.2秘密文件Strictly Confidential在本协议中，甲方、乙方和丙方以下各称“一方”，合称“各方”。In this Agreement, each of Party A, Party B and Party C shall be referred to as a “Party” respectively, and they shall be collectively referred to as the“Parties”.鉴于，乙方系丙方股东并合计持有丙方100%股权，乙方将按本协议之条款授予甲方购买全部或部分该股权的权利。Whereas, Party B are the shareholders of Party C and jointly hold 100% of the equity interest in Party C, and Party B are willing to grant to Party A the rightto acquire such equity interest, in whole or in part, on the terms herein.现各方协商一致，达成如下协议：Now therefore, upon mutual discussion and negotiation, the Parties have reached the following agreement:1.股权买卖Sale and Purchase of Equity Interest1.1授予权利Option Granted乙方在此不可撤销地授予甲方在中国法律允许的前提下，按照甲方自行决定的行使步骤，并按照本协议第1.3条所述的价格，随时一次或多次从乙方购买或指定一人或多人(“被指定人”)从乙方购买其目前和将来所持有的丙方的全部或部分股权（无论乙方出资额和/或持股比例将来是否发生变化）的一项不可撤销的专有权(“股权购买权”)。除甲方和被指定人外，任何第三人均不得享有股权购买权或其他与乙方股权有关的权利。丙方特此同意乙方向甲方授予股权购买权。本款及本协议所规定的“人”指个人、公司、合营企业、合伙、企业、信托或非公司组织。Party B hereby irrevocably grant Party A an irrevocable and exclusive right to purchase, or designate one or more persons (each, a “Designee”) topurchase the equity interests in Party C now and in the future held by Party B (regardless whether Party B’s capital contribution amount and/orpercentage of shareholding will be changed in the future) once or at multiple times at any time in part or in whole at Party A’s sole and absolutediscretion to the extent permitted by Chinese laws and at the price described in Section 1.3 herein (such right being the “Equity Interest PurchaseOption”). Except for Party A and the Designee(s), no other person shall be entitled to the Equity Interest Purchase Option or other rights withrespect to the equity interests of Party B. Party C hereby agrees to the grant by Party B of the Equity Interest Purchase Option to Party A. Theterm “person” as used herein shall refer to individuals, corporations, partnerships, partners, enterprises, trusts or noncorporate organizations.3秘密文件Strictly Confidential1.2行使步骤Steps for Exercise of Equity Interest Purchase Option甲方行使其股权购买权以符合中国法律和法规的规定为前提。甲方行使股权购买权时，应向乙方发出书面通知(“股权购买通知”)，股权购买通知应载明以下事项：(a)甲方关于行使股权购买权的决定；(b)甲方拟从乙方购买的股权份额(“被购买的股权”)；和(c)被购买的股权的买入日期。Subject to the provisions of the laws and regulations of China, Party A may exercise the Equity Interest Purchase Option by issuing a writtennotice to Party B (the “Equity Interest Purchase Option Notice”), specifying: (a) Party A’s decision to exercise the Equity Interest PurchaseOption; (b) the portion of equity interests to be purchased from Party B (the “Optioned Interests”); and (c) the date for purchasing the OptionedInterests.1.3股权买价Equity Interest Purchase Price被购买的股权的买价（“股权买价”）应是行权当时中国法律允许的最低价格。乙方收到该股权对价后，应当提供给丙方与该股权买价相同金额的借款，该借款的期限为20年，且为无息。乙方应当在该借款期限届满时就该借款放弃对丙方的债权。The purchase price of the Optioned Interests (the “Equity Interest Purchase Price”) shall be the lowest price permitted by the laws of China. Afterreceiving the Equity Interest Purchase Price, Party B shall make an interestfree loan equivalent to the amount of Equity Interest Purchase Price toParty C, of which term is 20 years. Each member of Party B shall give up his(her) creditor’s right when the loan term expires.4秘密文件Strictly Confidential1.4转让被购买股权Transfer of Optioned Interests甲方每次行使股权购买权时：For each exercise of the Equity Interest Purchase Option:1.4.1乙方应责成丙方及时召开股东会会议，在该会议上，应通过批准乙方向甲方和/或被指定人转让被购买的股权的决议；Party B shall cause Party C to promptly convene a shareholders meeting, at which a resolution shall be adopted approving Party B’stransfer of the Optioned Interests to Party A and/or the Designee(s);1.4.2乙方应就其向甲方和/或被指定人转让被购买股权取得丙方其他股东同意该转让并放弃优先购买权的书面声明。Party B shall obtain written statements from the other shareholder of Party C giving consent to the transfer of the equity interest to PartyA and/or the Designee(s) and waiving any right of first refusal related thereto.1.4.3乙方应与甲方和/或(在适用的情况下)被指定人按照本协议及股权购买通知的规定，为每次转让签订股权转让协议；Party B shall execute a share transfer contract with respect to each transfer with Party A and/or each Designee (whichever is applicable),in accordance with the provisions of this Agreement and the Equity Interest Purchase Option Notice regarding the Optioned Interests;5秘密文件Strictly Confidential1.4.4有关方应签署所有其他所需协议、协议或文件，取得全部所需的政府批准和同意，并采取所有所需行动，在不附带任何担保权益的情况下，将被购买的股权的有效所有权转移给甲方和/或被指定人并使甲方和/或被指定人成为被购买的股权的登记在册所有人。为本款及本协议的目的，“担保权益”包括担保、抵押、第三方权利或权益，任何购股权、收购权、优先购买权、抵销权、所有权扣留或其他担保安排等；但为了明确起见，不包括在本协议、乙方股权质押协议项下产生的任何担保权益。本款及本协议所规定的“乙方股权质押协议”指甲方、乙方和丙方于本协议签署之日签订的股权质押协议，根据股权质押协议，乙方为担保丙方能履行丙方与甲方签订的独家业务合作协议项下的义务，而向甲方质押其在丙方的全部乙方股权。The relevant Parties shall execute all other necessary contracts, agreements or documents, obtain all necessary government licenses andpermits and take all necessary actions to transfer valid ownership of the Optioned Interests to Party A and/or the Designee(s),unencumbered by any security interests, and cause Party A and/or the Designee(s) to become the registered owner(s) of the OptionedInterests. For the purpose of this Section and this Agreement, “security interests” shall include securities, mortgages, third party’s rightsor interests, any stock options, acquisition right, right of first refusal, right to offset, ownership retention or other security arrangements,but shall be deemed to exclude any security interest created by this Agreement and Party B’s Equity Interest Pledge Agreement. “PartyB’s Equity Interest Pledge Agreement” as used in this Section and this Agreement shall refer to the Equity Interest Pledge Agreementexecuted by and among Party A, Party B and Party C on the date of this Agreement, whereby Party B pledge all of their equity interests inParty C to Party A, in order to guarantee Party C’s performance of its obligations under the Exclusive Business Corporation Agreementexecuted by and between Party C and Party A.6秘密文件Strictly Confidential2.知识产权独家购买权Exclusive Option regarding the Intellectual Property Rights2.1本协议签订之日起，若乙方拟转让、出售或以其他方式处置（任一处置方式以下简称“转让”）其拥有或持有的全部或部分知识产权（以下称“知识产权”，定义见第2.4条），甲方有权独家购买该等知识产权。From the date hereof, if Party B proposes to transfer, sell or dispose of (each, a “transfer”) all or any part of the intellectual property rights ownedor held by Party B (“IPR”), Party A shall have exclusive option.2.2若乙方有意转让全部或部分知识产权，应事先向甲方发出书面通知(“转让通知”)，转让通知应载明以下事项：(a) 乙方关于转让知识产权的意向；(b) 乙方拟转让的知识产权清单(“拟转让知识产权”)及转让的价格和其他条件。转让通知视为乙方向甲方发出的一份要约，按照该要约，乙方同意按转让通知中指定的价格条件向甲方转让全部或部分拟转让知识产权。Prior to Party B proposes to transfer all or any part of its IPR, Party B shall give Party A a written notice (“Transfer Notice”), which shall specify (a)Party B’s intention to make the transfer; (b) the list of IPR to be transferred (“Offered IPR”) and the consideration and other conditions uponwhich the transfer is to be made. The Transfer Notice constitutes Party B’s offer given to Party A, pursuant to which, Party B agrees to transfer allor any part of its Offered IPR to Party A based on the same conditions described in the Transfer Notice.7秘密文件Strictly Confidential2.3甲方收到转让通知后，有权在30日内选择按照转让通知中列明的转让价格和条件购买拟转让知识产权。如果甲方行使其独家购买权，双方应于甲方收到转让通知后45日内签订有关的知识产权转让协议，乙方应办理法律规定的知识产权转让的批准和登记手续。Party A shall have an option for a period of 30 days from Party A’s receipt of the Transfer Notice to elect to purchase the Offered IPR at the sameprice and subject to the same conditions as described in the Transfer Notice. If Party A decides to exercise its exclusive option, the parties shallenter into relevant IPR transfer agreement within 45 days upon Party A’s receipt of the Transfer Notice and Party B is responsible to complete allrelated approvals and registrations formalities as prescribed by the PRC law.2.4本协议第2条所称“知识产权”指任何知识产权，包括但不限于著作权、专利权、专利申请权、商标、域名、软件、专有技术，并包括前述知识产权申请权利以及登记注册的权利，以及其他所有与前述知识产权有关的权利和权益。The “IPR” referred to in this Article 2 means any intellectual property rights, including, without limitations, copyrights, patents, patentapplications, trademarks, domain names, software and knowhow together with (a) all rights to apply for or register any of the foregoing and (b) allother rights and interests to any of the foregoing.8秘密文件Strictly Confidential3.承诺Covenants3.1有关丙方的承诺Covenants regarding Party C乙方（作为丙方的股东）和丙方在此承诺：Party B (as the shareholders of Party C) and Party C hereby covenant as follows:3.1.1未经甲方的事先书面同意，不以任何形式补充、更改或修改丙方公司章程文件，增加或减少其注册资本，或以其他方式改变其注册资本结构；Without the prior written consent of Party A, they shall not in any manner supplement, change or amend the articles of association andbylaws of Party C, increase or decrease its registered capital, or change its structure of registered capital in other manners;3.1.2按照良好的财务和商业标准及惯例，保持其公司的存续，审慎地及有效地经营其业务和处理事务；They shall maintain Party C’s corporate existence in accordance with good financial and business standards and practices by prudentlyand effectively operating its business and handling its affairs;3.1.3未经甲方的事先书面同意，不在本协议签署之日起的任何时间出售、转让、抵押或以其他方式处置丙方的任何资产、业务或收入的合法或受益权益，或允许在其上设置任何其他担保权益；Without the prior written consent of Party A, they shall not at any time following the date hereof, sell, transfer, mortgage or dispose of inany manner any assets of Party C or legal or beneficial interest in the business or revenues of Party C, or allow the encumbrance thereonof any security interest;3.1.4未经甲方的事先书面同意，不发生、继承、保证或容许存在任何债务，但(i)正常或日常业务过程中产生而不是通过借款方式产生的债务；和(ii)已向甲方披露和得到甲方书面同意的债务除外；Without the prior written consent of Party A, they shall not incur, inherit, guarantee or suffer the existence of any debt, except for (i)debts incurred in the ordinary course of business other than through loans; and (ii) debts disclosed to Party A for which Party A’swritten consent has been obtained;9秘密文件Strictly Confidential3.1.5一直在正常业务过程中经营所有业务，以保持丙方的资产价值，不进行任何足以影响其经营状况和资产价值的作为/不作为；They shall always operate all of Party C’s businesses during the ordinary course of business to maintain the asset value of Party C andrefrain from any action/omission that may affect Party C’s operating status and asset value;3.1.6未经甲方的事先书面同意，不得让丙方签订任何重大协议，但在正常业务过程中签订的协议除外(就本段而言，如果一份协议的价值超过【人民币10万元】，即被视为重大协议)；Without the prior written consent of Party A, they shall not cause Party C to execute any major contract, except the contracts in theordinary course of business (for purpose of this subsection, a contract with a value exceeding RMB 100,000 shall be deemed a majorcontract);3.1.7未经甲方的事先书面同意，丙方不得向任何人提供贷款或信贷；Without the prior written consent of Party A, they shall not cause Party C to provide any person with any loan or credit;3.1.8应甲方要求，向其提供所有关于丙方的营运和财务状况的资料；They shall provide Party A with information on Party C’s business operations and financial condition at Party A’s request;10秘密文件Strictly Confidential3.1.9如甲方提出要求，丙方应从甲方接受的保险公司处购买和持有有关其资产和业务的保险，该保险的金额和险种应与经营类似业务的公司一致；If requested by Party A, they shall procure and maintain insurance in respect of Party C’s assets and business from an insurance carrieracceptable to Party A, at an amount and type of coverage typical for companies that operate similar businesses;3.1.10未经甲方的事先书面同意，丙方不得与任何人合并或联合，或对任何人进行收购或投资；Without the prior written consent of Party A, they shall not cause or permit Party C to merge, consolidate with, acquire or invest in anyperson;3.1.11将发生的或可能发生的与丙方资产、业务或收入有关的诉讼、仲裁或行政程序立即通知甲方；They shall immediately notify Party A of the occurrence or possible occurrence of any litigation, arbitration or administrative proceedingsrelating to Party C’s assets, business or revenue;3.1.12为保持丙方对其全部资产的所有权，签署所有必要或适当的文件，采取所有必要或适当的行动和提出所有必要或适当的控告或对所有索偿进行必要和适当的抗辩；To maintain the ownership by Party C of all of its assets, they shall execute all necessary or appropriate documents, take all necessary orappropriate actions and file all necessary or appropriate complaints or raise necessary and appropriate defenses against all claims;11秘密文件Strictly Confidential3.1.13未经甲方事先书面同意，不得以任何形式派发股息予各股东，但一经甲方要求，丙方应立即将其所有可分配利润全部立即分配给其各股东；及Without the prior written consent of Party A, they shall ensure that Party C shall not in any manner distribute dividends to itsshareholders, provided that upon Party A’s written request, Party C shall immediately distribute all distributable profits to itsshareholders; and3.1.14根据甲方的要求，委任由其指定的任何人士出任丙方的董事和/或执行董事。At the request of Party A, they shall appoint any persons designated by Party A as the director and/or executive director of Party C.3.2乙方和丙方的承诺Covenants of Party B and Party C乙方承诺：Party B hereby covenant as follows:3.2.1未经甲方的事先书面同意，不出售、转让、抵押或以其他方式处置其拥有的丙方的股权的合法或受益权益，或允许在其上设置任何其他担保权益，但根据乙方签署的《股权质押协议》在该股权上设置的质押则除外；Without the prior written consent of Party A, Party B shall not sell, transfer, mortgage or dispose of in any other manner any legal orbeneficial interest in the equity interests in Party C held by Party B, or allow the encumbrance thereon of any security interest, except forthe pledge placed on these equity interests in accordance with Party B’s Equity Interest Pledge Agreement;12秘密文件Strictly Confidential3.2.2促使丙方股东会和/或执行董事不批准在未经甲方的事先书面同意的情况下，出售、转让、抵押或以其他方式处置任何乙方持有之丙方的股权的合法权益或受益权，或允许在其上设置任何其他担保权益，但批准根据乙方签署的《股权质押协议》在乙方股权上设置的质押则除外；Party B shall cause the shareholders’ meeting and/or the executive director of Party C not to approve the sale, transfer, mortgage ordisposition in any other manner of any legal or beneficial interest in the equity interests in Party C held by Party B, or allow theencumbrance thereon of any security interest, without the prior written consent of Party A, except for the pledge placed on these equityinterests in accordance with Party B’s Equity Interest Pledge Agreement;3.2.3未经甲方的事先书面同意的情况下，对于丙方与任何人合并或联合，或对任何人进行收购或投资，乙方将促成丙方股东会或执行董事不予批准；Party B shall cause the shareholders’ meeting or the executive director of Party C not to approve the merger or consolidation with anyperson, or the acquisition of or investment in any person, without the prior written consent of Party A;3.2.4将发生的或可能发生的任何关于其所拥有的股权的诉讼、仲裁或行政程序立即通知甲方；Party B shall immediately notify Party A of the occurrence or possible occurrence of any litigation, arbitration or administrativeproceedings relating to the equity interests in Party C held by Party B;13秘密文件Strictly Confidential3.2.5促使丙方股东会或执行董事表决赞成本协议规定的被购买的股权的转让并应甲方之要求采取其他任何行动；Party B shall cause the shareholders’ meeting or the executive director of Party C to vote their approval of the transfer of the OptionedInterests as set forth in this Agreement and to take any and all other actions that may be requested by Party A;3.2.6为保持其对股权的所有权，签署所有必要或适当的文件，采取所有必要或适当的行动和提出所有必要或适当的控告或对所有索偿进行必要和适当的抗辩；To the extent necessary to maintain Party B’s ownership in Party C, Party B shall execute all necessary or appropriate documents, take allnecessary or appropriate actions and file all necessary or appropriate complaints or raise necessary and appropriate defenses against allclaims;3.2.7应甲方的要求，委任由其指定的任何人士出任丙方的董事和/或执行董事；Party B shall appoint any designee of Party A as the director and/or executive director of Party C, at the request of Party A;3.2.8经甲方随时要求，应向其指定的代表在任何时间无条件地根据本协议的股权购买权立即转让其股权，并放弃其对其他现有股东进行上述股权转让所享有的优先购买权（如有的话）；和At the request of Party A at any time, Party B shall promptly and unconditionally transfer its equity interests in Party C to Party A’sDesignee(s) in accordance with the Equity Interest Purchase Option under this Agreement, and Party B hereby waives its right of firstrefusal (if any) to the share transfer by the other existing shareholder of Party C (if any); and14秘密文件Strictly Confidential3.2.9严格遵守本协议及各方共同或分别签订的其他协议的各项规定，切实履行该等协议项下的各项义务，并不进行任何足以影响该等协议的有效性和可执行性的作为/不作为。如果乙方对于本协议项下或乙方股权质押协议下或对甲方的授权委托书中的股权，还留存有任何权利，除非甲方书面指示，否则乙方仍不得行使该权利。Party B shall strictly abide by the provisions of this Agreement and other contracts jointly or separately executed by and among Party B,Party C and Party A, perform the obligations hereunder and thereunder, and refrain from any action/omission that may affect theeffectiveness and enforceability thereof. To the extent that Party B has any remaining rights with respect to the equity interests subject tothis Agreement hereunder or under Party B’s Equity Interest Pledge Agreement or under the Power of Attorney granted in favor of PartyA, Party B shall not exercise such rights except in accordance with the written instructions of Party A.4.陈述和保证Representations and Warranties乙方和丙方特此在本协议签署之日和每一个转让日向甲方共同及分别陈述和保证如下：Party B and Party C hereby represent and warrant to Party A, jointly and severally, as of the date of this Agreement and each date of transfer of theOptioned Interests, that:4.1其具有签订和交付本协议和其为一方的、根据本协议为每一次转让被购买的股权而签订的任何股权转让协议(各称为"转让协议")，并履行其在本协议和任何转让协议项下的义务的权力和能力。乙方和丙方同意在甲方行使购买权时，他们将签署与本协议条款一致的转让协议。本协议和其是一方的各转让协议一旦签署后，构成或将对其构成合法、有效及具有约束力的义务并可按照其条款对其强制执行；They have the authority to execute and deliver this Agreement and any share transfer contracts to which they are a party concerning theOptioned Interests to be transferred thereunder (each, a “Transfer Contracts”), and to perform their obligations under this Agreement and anyTransfer Contracts. Party B and Party C agree to enter into Transfer Contracts consistent with the terms of this Agreement upon Party A’s exerciseof the Equity Interest Purchase Option. This Agreement and the Transfer Contracts to which they are a party constitute or will constitute theirlegal, valid and binding obligations and shall be enforceable against them in accordance with the provisions thereof;15秘密文件Strictly Confidential4.2无论是本协议或任何转让协议的签署和交付还是其在本协议或任何转让协议项下的义务的履行均不会：(i)导致违反任何有关的中国法律；(ii)与丙方章程或其他组织文件相抵触；(iii)导致违反其是一方或对其有约束力的任何协议或文件，或构成其是一方或对其有约束力的任何协议或文件项下的违约；(iv)导致违反有关向任何一方颁发的任何许可或批准的授予和(或)继续有效的任何条件；或(v)导致向任何一方颁发的任何许可或批准中止或被撤销或附加条件；The execution and delivery of this Agreement or any Transfer Contracts and the obligations under this Agreement or any Transfer Contracts shallnot: (i) cause any violation of any applicable laws of China; (ii) be inconsistent with the articles of association, bylaws or other organizationaldocuments of Party C; (iii) cause the violation of any contracts or instruments to which they are a party or which are binding on them, orconstitute any breach under any contracts or instruments to which they are a party or which are binding on them; (iv) cause any violation of anycondition for the grant and/or continued effectiveness of any licenses or permits issued to either of them; or (v) cause the suspension orrevocation of or imposition of additional conditions to any licenses or permits issued to either of them;4.3乙方对其在丙方拥有的股权拥有良好和可出售的所有权，除乙方签署的《股权质押协议》外，乙方在上述股权上没有设置任何担保权益；Party B have a good and merchantable title to the equity interests in Party C they hold. Except for Party B’s Equity Interest Pledge Agreement,Party B have not placed any security interest on such equity interests;16秘密文件Strictly Confidential4.4目前没有悬而未决的或构成威胁的与丙方的股权、丙方资产有关的或与丙方有关的诉讼、仲裁或行政程序。There are no pending or threatened litigation, arbitration or administrative proceedings relating to the equity interests in Party C, assets of Party Cor Party C.5.生效日Effective Date5.1本协议于各方签署本协议之日生效，有效期10年，经甲方选择可再延长10年。This Agreement shall become effective upon the date hereof, and remain effective for a term of 10 years, and may be renewed for an additional 10years at Party A’s election.5.2若丙方股东发生变化，由新股东签署此协议，在此协议签署之日，原协议自动视为无效。In the event of a change in the shareholders of Party C, the new shareholder should sign this agreement and the original agreement willautomatically be deemed invalid on the date of signing of this agreement.17秘密文件Strictly Confidential6.适用法律与争议解决Governing Law and Resolution of Disputes6.1适用法律Governing law本协议的订立、效力、解释、履行、修改和终止以及争议解决均适用中国正式公布并可公开得到的法律。对中国正式公布并可公开得到的法律没有规定的事项，将适用国际法律原则和惯例。The execution, effectiveness, construction, performance, amendment and termination of this Agreement and the resolution of disputes hereundershall be governed by the formally published and publicly available laws of China. Matters not covered by formally published and publiclyavailable laws of China shall be governed by international legal principles and practices.6.2争议的解决方法Methods of Resolution of Disputes因解释和履行本协议而发生的任何争议，本协议各方应首先通过友好协商的方式加以解决。如果在一方向其他方发出要求协商解决的书面通知后30天之内争议仍然得不到解决，则任何一方均可将有关争议提交给中国国际经济贸易仲裁委员会，由该会按照其届时有效的仲裁规则仲裁解决。仲裁应在北京进行，使用之语言为中文。仲裁裁决是终局性的，对各方均有约束力。In the event of any dispute with respect to the construction and performance of this Agreement, the Parties shall first resolve the dispute throughfriendly negotiations. In the event the Parties fail to reach an agreement on the dispute within 30 days after either Party’s request to the otherParties for resolution of the dispute through negotiations, either Party may submit the relevant dispute to the China International Economic andTrade Arbitration Commission for arbitration, in accordance with its then effective arbitration rules. The arbitration shall be conducted in Beijing,and the language used in arbitration shall be Chinese. The arbitration award shall be final and binding on all Parties.18秘密文件Strictly Confidential7.税款、费用Taxes and Fees每一方应承担根据中国法律因准备和签署本协议和各转让协议以及完成本协议和各转让协议拟定的交易而由该方发生的或对其征收的任何和全部的转让和注册的税、花费和费用。Each Party shall pay any and all transfer and registration tax, expenses and fees incurred thereby or levied thereon in accordance with the laws of China inconnection with the preparation and execution of this Agreement and the Transfer Contracts, as well as the consummation of the transactionscontemplated under this Agreement and the Transfer Contracts.8.通知Notices8.1本协议项下要求或发出的所有通知和其他通信应通过专人递送、挂号邮寄、邮资预付或商业快递服务或传真的方式发到该方下列地址。每一通知还应再以电子邮件送达。该等通知视为有效送达的日期按如下方式确定：All notices and other communications required or permitted to be given pursuant to this Agreement shall be delivered personally or sent byregistered mail, postage prepaid, by a commercial courier service or by facsimile transmission to the address of such Party set forth below. Aconfirmation copy of each notice shall also be sent by email. The dates on which notices shall be deemed to have been effectively given shall bedetermined as follows:8.1.1通知如果是以专人递送、快递服务或挂号邮寄、邮资预付发出的，则以于设定为通知的地址在接收或拒收之日为有效送达日。Notices given by personal delivery, by courier service or by registered mail, postage prepaid, shall be deemed effectively given on thedate of receipt or refusal at the address specified for notices.19秘密文件Strictly Confidential8.1.2通知如果是以传真发出的，则以成功传送之日为有效送达日（应以自动生成的传送确认信息为证）。Notices given by facsimile transmission shall be deemed effectively given on the date of successful transmission (as evidenced by anautomatically generated confirmation of transmission).8.2为通知的目的，各方地址如下：For the purpose of notices, the addresses of the Parties are as follows:甲方：中传天下信息科技（深圳）有限公司Party A:Zhongchuan Tianxia Information Technology (Shenzhen) Co., Ltd.地址：深圳市南山区高新中三道2号深圳软件园一期五栋401AAddress:401A, Building 5, Phase 1, Shenzhen Software Park, No.2 Gaoxin Zhongsan Road, Nanshan District, Shenzhen.收件人：洪婷Attn:Hong Ting乙方：Party B: 宋雪松Song Xuesong住所：天津市河西区广东路中裕园33702Address:Zhongyu Yuan 33702, Guangdong Road, Hexi District, Tianjin20秘密文件Strictly Confidential陈蔚力Chen Weili住所：广东省深圳市宝安区宝城上川路15号Address:Baocheng Shangchuan Road 15, Baoan District, Shenzhen, Guangdong王平Wang Ping住所：广东省深圳市南山区高新南环路36号彩虹之岸12栋4AAddress:Caihong Zhi’an Building No.12 Suite 4A, Gaoxin Nanhuan Road 36, Nanshan District, Shenzhen, Guangdong刘东来Liu Donglai住所：天津市和平区南京路诚基经贸中心1号楼2门1702号Address:No 1702, Door 2, Build 1, Chengji Economic and Trade Centre, Nanjing Road, Heping District, Tianjin.丙方：北京中传视讯科技有限公司Party C:Beijing Mobile Vision Technology Co., Ltd.地址：北京市朝阳区光华路9号SOHO3QLAB32Address: LAB32, SOHO3Q, No 9, Guanghua Road, Chaoyang District, Beijing .收件人：宋雪松Attn: Song Xuesong8.3任何一方可按本条规定随时给其他方发出通知来改变其接收通知的地址。Any Party may at any time change its address for notices by a notice delivered to the other Parties in accordance with the terms hereof.21秘密文件Strictly Confidential9.保密责任Confidentiality各方承认及确定彼此就有关本协议而交换的任何口头或书面资料均属机密资料。各方应当对所有该等资料予以保密，而在未得其他方书面同意前，不得向任何第三者披露任何有关资料，惟下列情况除外：(a)公众人士知悉或将会知悉该等资料(并非由接受资料之一方擅自向公众披露)；(b)适用法律法规或股票交易的规则或规例所需披露之资料；或(c)由任何一方就本协议所述交易而需向其法律或财务顾问披露之资料而该法律或财务顾问亦需遵守与本条款相类似之保密责任。如任何一方工作人员或聘请机构的泄密均视为该方的泄密，需依本协议承担违约责任。无论本协议以任何理由终止，本条款仍然生效。The Parties acknowledge that any oral or written information exchanged among them with respect to this Agreement is confidential information. Each Partyshall maintain the confidentiality of all such information, and without obtaining the written consent of other Parties, it shall not disclose any relevantinformation to any third parties, except in the following circumstances: (a) such information is or will be in the public domain (provided that this is not theresult of a public disclosure by the receiving party); (b) information disclosed as required by applicable laws or rules or regulations of any stock exchange;or (c) information required to be disclosed by any Party to its legal counsel or financial advisor regarding the transaction contemplated hereunder, and suchlegal counsel or financial advisor are also bound by confidentiality duties similar to the duties in this section. Disclosure of any confidential information bythe staff members or agency hired by any Party shall be deemed disclosure of such confidential information by such Party, which Party shall be held liablefor breach of this Agreement. This Section shall survive the termination of this Agreement for any reason.22秘密文件Strictly Confidential10.进一步保证Further Warranties各方同意迅速签署为执行本协议的各项规定和目的而合理需要的或对其有利的文件，以及为执行本协议的各项规定和目的而采取合理需要的或对其有利的进一步行动。The Parties agree to promptly execute documents that are reasonably required for or are conducive to the implementation of the provisions and purposes ofthis Agreement and take further actions that are reasonably required for or are conducive to the implementation of the provisions and purposes of thisAgreement.11.其他Miscellaneous11.1修订、修改与补充Amendment, change and supplement对本协议作出修订、修改与补充，必须经每一方签署书面协议。Any amendment, change and supplement to this Agreement shall require the execution of a written agreement by all of the Parties.11.2完整协议Entire agreement除了在本协议签署后所作出的书面修订、补充或修改以外，本协议构成本协议各方就本协议标的物所达成的完整协议，取代在此之前就本协议标的物所达成的所有口头或书面的协商、陈述和协议。 Except for the amendments, supplements or changes in writing executed after theexecution of this Agreement, this Agreement shall constitute the entire agreement reached by and among the Parties hereto with respect to thesubject matter hereof, and shall supercede all prior oral and written consultations, representations and contracts reached with respect to thesubject matter of this Agreement.23秘密文件Strictly Confidential11.3标题Headings本协议的标题仅为方便阅读而设，不应被用来解释、说明或在其他方面影响本协议各项规定的含义。The headings of this Agreement are for convenience only, and shall not be used to interpret, explain or otherwise affect the meanings of theprovisions of this Agreement.11.4语言Language本协议以中文和英文书就，一式八份，乙方共计六名股东以及甲方、丙方各持一份，具有同等效力；中英文版本如有冲突，应以中文版为准。This Agreement is written in both Chinese and English language in eight copies, the 6 shareholders of Party B, Party A and Party C having onecopy with equal legal validity respectively; in case there is any conflict between the Chinese version and the English version, the Chinese versionshall prevail.11.5可分割性Severability如果本协议有任何一条或多条规定根据任何法律或法规在任何方面被裁定为无效、不合法或不可执行，本协议其余规定的有效性、合法性或可执行性不应因此在任何方面受到影响或损害。各方应通过诚意磋商，争取以法律许可以及各方期望的最大限度内有效的规定取代那些无效、不合法或不可执行的规定，而该等有效的规定所产生的经济效果应尽可能与那些无效、不合法或不能强制执行的规定所产生的经济效果相似。In the event that one or several of the provisions of this Agreement are found to be invalid, illegal or unenforceable in any aspect in accordancewith any laws or regulations, the validity, legality or enforceability of the remaining provisions of this Agreement shall not be affected orcompromised in any respect. The Parties shall strive in good faith to replace such invalid, illegal or unenforceable provisions with effectiveprovisions that accomplish to the greatest extent permitted by law and the intentions of the Parties, and the economic effect of such effectiveprovisions shall be as close as possible to the economic effect of those invalid, illegal or unenforceable provisions.24秘密文件Strictly Confidential11.6继任者Successors本协议对各方各自的继任者和各方所允许的受让方应具有约束力并对其有利。This Agreement shall be binding on and shall inure to the interest of the respective successors of the Parties and the permitted assigns of suchParties.11.7继续有效Survival11.7.1协议期满或提前终止前因本协议而发生的或到期的任何义务在本协议期满或提前终止后继续有效。Any obligations that occur or that are due as a result of this Agreement upon the expiration or early termination of this Agreement shallsurvive the expiration or early termination thereof.11.7.2本协议第5、6、9条和本第11.7条的规定在本协议终止后继续有效。The provisions of Articles 5, 6, 9 and this Section 11.7 shall survive the termination of this Agreement.25秘密文件Strictly Confidential11.8弃权Waivers任何一方可以对本协议的条款和条件作出弃权，但必须经书面作出并经各方签字。一方在某种情况下就其他方的违约所作的弃权不应被视为该方在其他情况下就类似的违约已经对其他方作出弃权。Any Party may waive the terms and conditions of this Agreement, provided that such a waiver must be provided in writing and shall require thesignatures of the Parties. No waiver by any Party in certain circumstances with respect to a breach by other Parties shall operate as a waiver bysuch a Party with respect to any similar breach in other circumstances.本页其余部分刻意留为空白The Remainder of this page is intentionally left blank26秘密文件Strictly Confidential有鉴于此，各方已自行或使得其各自授权代表于文首所载日期签署本独家购买权协议。IN WITNESS WHEREOF, the Parties have executed, or caused their respective duly authorized representatives to execute, this Exclusive Option Agreement as ofthe date first above written.甲方：中传天下信息科技（深圳）有限公司（盖章）Party A: Zhongchuan Tianxia Information Technology (Shenzhen) Co., Ltd. (Seal)签字：By:/s/ Hong Ting姓名：洪婷Name: Hong Ting职务：总经理Title: General Manager秘密文件 Strictly Confidential有鉴于此，各方已自行或使得其各自授权代表于文首所载日期签署本独家购买权协议。IN WITNESS WHEREOF, the Parties have executed, or caused their respective duly authorized representatives to execute, this Exclusive Option Agreement as ofthe date first above written.乙方：Party B:宋雪松Song Xuesong签字：By:/s/ Song Xuesong秘密文件 Strictly Confidential有鉴于此，各方已自行或使得其各自授权代表于文首所载日期签署本独家购买权协议。IN WITNESS WHEREOF, the Parties have executed, or caused their respective duly authorized representatives to execute, this Exclusive Option Agreement as ofthe date first above written.乙方：Party B:陈蔚力Chen Weili签字：By:/s/ Chen Weili秘密文件 Strictly Confidential有鉴于此，各方已自行或使得其各自授权代表于文首所载日期签署本独家购买权协议。IN WITNESS WHEREOF, the Parties have executed, or caused their respective duly authorized representatives to execute, this Exclusive Option Agreement as ofthe date first above written.乙方：Party B:王平Wang Ping签字：By:/s/ Wang Ping秘密文件 Strictly Confidential有鉴于此，各方已自行或使得其各自授权代表于文首所载日期签署本独家购买权协议。IN WITNESS WHEREOF, the Parties have executed, or caused their respective duly authorized representatives to execute, this Exclusive Option Agreement as ofthe date first above written.乙方：Party B:刘东来Liu Donglai签字：By:/s/ Liu Donglai秘密文件 Strictly Confidential有鉴于此，各方已自行或使得其各自授权代表于文首所载日期签署本独家购买权协议。IN WITNESS WHEREOF, the Parties have executed, or caused their respective duly authorized representatives to execute, this Exclusive Option Agreement as ofthe date first above written.丙方：北京中传视讯科技有限公司（盖章）Party B: Beijing Mobile Vision Technology Co., Ltd. (Seal)签字：By:/s/ Song Xuesong姓名：宋雪松Name:Song Xuesong职务：董事长Title:Chairman of the Board秘密文件 Strictly ConfidentialEX4.17 5 f20f2017ex417_luokung.htm EQUITY INTEREST PLEDGE AGREEMENT BY AND AMONG ZHONGCHUAN TIANXIA INFORMATION TECHNOLOGY(SHENZHEN) CO., LTD., XUESONG SONG, WEILI CHEN, PING WANG, DONGLAI LIU, AND BEIJING MOBILE VISION TECHNOLOGY CO., LTD., DATEDAUGUST 31, 2015Exhibit 4.17股权质押协议Equity Interest Pledge Agreement本股权质押协议（下称"本协议”）由下列各方于年月日在中华人民共和国（下称“中国”）北京签订：This Equity Interest Pledge Agreement (this "Agreement") has been executed by and among the following parties on in Beijing, the People’sRepublic of China (the “China” or “PRC”):甲方：中传天下信息科技（深圳）有限公司（下称“质权人”）Party A: Zhongchuan Tianxia Information Technology (Beijing) Co., Ltd. (“Pledgee”)地址：深圳市南山区高新中三道2号深圳软件园一期五栋401AAddress: 401A, Building 5, Phase 1, Shenzhen Software Park, No.2 Gaoxin Zhongsan Road, Nanshan District, Shenzhen统一社会信用代码： 91440300565701058RUniform Social Credit Code: 91440300565701058R乙方(下称“出质人”)：Party B ( “Pledgors”):a)宋雪松Song Xuesong身份证号码:ID Card No.:b)陈蔚力Chen Weili身份证号码:ID Card No.:1秘密文件 Strictly Confidentialc)王平Wang Ping身份证号码:ID Card No.:d)刘东来Liu Donglai身份证号码:ID Card No.:丙方：北京中传视讯科技有限公司Party C: Beijing Mobile Vision Technology Co., Ltd.地址：北京市朝阳区光华路9号SOHO3QLAB32Address: LAB32, SOHO3Q, No 9, Guanghua Road, Chaoyang District, Beijing统一社会信用代码：9111010576215249XMUniform Social Credit Code: 9111010576215249XM在本协议中，质权人、出质人和丙方以下各称“一方”，合称“各方”。In this Agreement, each of Pledgee, Pledgors and Party C shall be referred to as a "Party" respectively, and they shall be collectively referred to as the"Parties".鉴于：Whereas:1．出质人全部为中国境内居民自然人，共同持有丙方100%的股权。丙方是一家在中国注册成立的、主要从事手机视频技术研发、内容制作和产业化市场推广的有限责任公司。丙方有意在此确认出质人和质权人在本协议下的权利和义务并提供必要的协助登记该质权；All of the Pledgors are natural persons resided in PRC, and collectively hold 100% of the equity interest in Party C. Party C is a limited company registered inChina, mainly engaging in mobile video frequency technology research, development, content creation, sale and related industrialization promotion. Party Cacknowledges the respective rights and obligations of Pledgors and Pledgee under this Agreement, and intends to provide any necessary assistance inregistering the Pledge;2．质权人是一家在中国注册的外商独资企业。质权人与丙方于年月日签订了独家业务合作协议；Pledgee is a whollyforeignowned enterprise registered in China. Pledgee and Party C have executed an Exclusive Business Cooperation Agreement as of [*],[*];3．为了保证丙方全面履行独家业务合作协议项下的义务，出质人以其拥有的全部丙方股权向质权人做出质押担保。To ensure that Party C fully performs its obligations under the Exclusive Business Cooperation Agreement, Pledgors hereby pledge to the Pledgee all of theequity interests they hold in Party C.为了履行业务合作协议的条款，各方商定按照以下条款签订本协议。To perform the provisions of the Business Cooperation Agreement, the Parties have mutually agreed to execute this Agreement upon the following terms.2秘密文件 Strictly Confidential1.定义Definitions除非本协议另有规定，下列词语含义为：Unless otherwise provided herein, the terms below shall have the following meanings:1.1质权：指出质人根据本协议第2条给予质权人的担保物权，即指质权人所享有的，以出质人质押给质权人的股权折价或拍卖、变卖该股权的价款优先受偿的权利。Pledge: shall refer to the security interest granted by Pledgors to Pledgee pursuant to Article 2 of this Agreement, i.e., the right of Pledgee to becompensated on a preferential basis with the conversion, auction or sales price of the Equity Interest.1.2股权：指出质人现在和将来（通过增资和/或转股）合法持有的其在丙方的全部股权权益。Equity Interest: shall refer to all of the equity interest in Party C lawfully, held now and to be held (through capital increase and/or equity transfer)hereafter by Pledgors.1.3质押期限：指本协议第3条规定的期间。Term of Pledge: shall refer to the term set forth in Article 3 of this Agreement.1.4业务合作协议：指丙方与质权人于本协议日签订的独家业务合作协议。Business Cooperation Agreement: shall refer to the Exclusive Business Cooperation Agreement executed by and between Party C and Pledgee on thedate of this Agreement.1.5违约事件：指本协议第7条所列任何情况。Event of Default: shall refer to any of the circumstances set forth in Article 7 of this Agreement.1.6违约通知：指质权人根据本协议发出的宣布违约事件的通知。Notice of Default: shall refer to the notice issued by Pledgee in accordance with this Agreement declaring an Event of Default.3秘密文件 Strictly Confidential2.质权The Pledge作为丙方按时和全额支付业务合作协议项下质权人应得的任何或全部的款项，包括但不限于业务合作协议中规定的咨询和服务费的担保（无论该等费用的到期应付是由于到期日的到来、提前收款的要求或其它原因），以及丙方充分履行其在业务合作协议项下其他所有义务（丙方按时和全额支付业务合作协议项下甲方应得的任何或全部的款项及丙方在业务合作协议项下其他所有义务，以下统称为“被担保债务”）的担保，出质人特此将其现有或将拥有的丙方的全部股权权益质押给质权人。As collateral security for the timely and complete payment and performance when due (whether at stated maturity, by acceleration or otherwise) of any or all ofthe payments due (the “all payments in pledge”) by Party C, including without limitation the consulting and services fees payable to the Pledgee under theBusiness Cooperation Agreement, Pledgors hereby pledge to Pledgee a first security interest in all of Pledgors’ right, title and interest, whether now owned orhereafter acquired by Pledgors, in the Equity Interest of Party C.3.质押期限Term of Pledge3.1本质权自本协议项下的股权出质在相应的工商行政管理机关登记之日起生效，质权有效期持续到业务合作协议下所有丙方欠付质权人的款项结清为止。出质人和丙方应（一）自本协议签署之日起3个工作日内，将本协议的质权登记在丙方股东名册上，并（二）自本协议签署之日起10个工作日内向相应的工商行政管理机关申请登记本协议项下的质权。各方共同确认，为办理股权质押工商登记手续，各方及丙方其他股东应按照丙方所在地工商行政管理部门要求的形式签署、真实反映本协议项下质权信息的《股权质押合同》（以下简称“工商登记质押合同”）提交给工商管理机关，工商登记质押合同中未约定事项，仍以本协议约定为准。出质人和丙方应当按照中国法律法规和有关工商行政管理机关的各项要求，提交所有必要的文件并办理所有必要手续，保证质权在递交申请后尽快获得登记。如果出质人持有的丙方注册资本数额增加（不管是通过直接认缴丙方的增资还是从其他股东处受让股权），各方一致同意将采取一切必要的行动和签署一切必要的文件以按照登记机关的要求完成质权的变更登记，以确保本协议项下的质权的持续有效。The Pledge shall become effective on such date when the pledge of the Equity Interest contemplated herein has been registered’ with relevantadministration for industry and commerce (the “AIC”). The Pledge shall be continuously valid until all payments due under the Business CooperationAgreement have been fulfilled by Party C. Pledgors and Party C shall (1) register the Pledge in the shareholders' register of Party C within 3 businessdays following the execution of this Agreement, and (2) submit an application to the AIC for the registration of the Pledge of the Equity Interestcontemplated herein within 10 business days following the execution of this Agreement. The parties covenant that for the purpose of registration of thePledge, the parties hereto and all other shareholders of Party C shall submit to the AIC the Equity Interest Pledge Contract in the form required by theAIC at the location of Party C which shall truly reflect the information of the Pledge hereunder (the “AIC Pledge Contract”). For matters not specified inthe AIC Pledge Contract, the parties shall be bound by the provisions of this Agreement. Pledgors and Party C shall submit all necessary documentsand complete all necessary procedures, as required by the PRC laws and regulations and the relevant AIC, to ensure that the Pledge of the EquityInterest shall be registered with the AIC as soon as possible after filing. In the event that the amount of registered capital held by Pledgors is increased(either by subscribing increased registered capital from Party C or acquiring equity interest from other shareholders), the Parties hereto agree that theyshall take any necessary action and execute any necessary document to complete the registration of change of Pledge according to the requirement ofAIC so that the Pledge in this Agreement remains effective.4秘密文件 Strictly Confidential3.2质押期限内，如丙方未按业务合作协议交付咨询服务费等费用，质权人有权但无义务按本协议的规定处分质权。During the Term of Pledge, in the event Party C fails to pay the exclusive consulting or service fees in accordance with the Business CooperationAgreement, Pledgee shall have the right, but not the obligation, to dispose of the Pledge in accordance with the provisions of this Agreement.4.质权凭证的保管Custody of Records for Equity Interest subject to Pledge4.1在本协议规定的质押期限内，出质人应将其在丙方的股权出资证明书及记载质权的股东名册交付质权人保管。出质人应在本协议签订之日起一周内将上述股权出资证明书及股东名册交付给质权人。质权人将在本协议规定的全部质押期间一直保管这些项目。During the Term of Pledge set forth in this Agreement, Pledgors shall deliver to Pledgee's custody the capital contribution certificate for the EquityInterest and the shareholders' register containing the Pledge within one week from the execution of this Agreement. Pledgee shall have custody of suchitems during the entire Term of Pledge set forth in this Agreement.4.2在质押期限内，股权所产生的红利应当无条件归质权人所有。Dividends generated by the Equity Interest shall be unconditionally owned by the Pledgee during the Term of Pledge.5秘密文件 Strictly Confidential5.出质人的声明和保证Representations and Warranties of Pledgors5.1出质人是股权唯一的合法所有人。Pledgors are the sole legal and beneficial owners of the Equity Interest.5.2质权人有权以本协议规定的方式处分并转让股权。Pledgee shall have the right to dispose of and transfer the Equity Interest in accordance with the provisions set forth in this Agreement.5.3除本质权之外，出质人未在股权上设置任何其他质押权利或其他担保权益。Except for the Pledge, Pledgors have not placed any security interest or other encumbrance on the Equity Interest.6.出质人的承诺和确认Covenants and Further Agreements of Pledgors6.1在本协议存续期间，所有出质人向质权人承诺，出质人将：All of the Pledgors hereby covenant to the Pledgee, that during the term of this Agreement, Pledgors shall:6.1.1除履行由出质人与质权人、丙方于本协议签署日签订的《独家购买权合同》外，未经质权人事先书面同意，不得转让股权，不得在股权上设立或允许存在任何担保或其他债务负担；not transfer the Equity Interest, place or permit the existence of any security interest or other encumbrance on the Equity Interest, without theprior written consent of Pledgee, except for the performance of the Exclusive Option Agreement executed by Pledgors, the Pledgee and Party Con the execution date of this Agreement;6秘密文件 Strictly Confidential6.1.2遵守并执行所有有关权利质押的法律、法规的规定，在收到有关主管机关就质权发出或制定的通知、指令或建议时，于五日内向质权人出示上述通知、指令或建议，同时遵守上述通知、指令或建议，或按照质权人的合理要求或经质权人同意就上述事宜提出反对意见和陈述；comply with the provisions of all laws and regulations applicable to the pledge of rights, and within 5 days of receipt of any notice, order orrecommendation issued or prepared by relevant competent authorities regarding the Pledge, shall present the aforementioned notice, order orrecommendation to Pledgee, and shall comply with the aforementioned notice, order or recommendation or submit objections andrepresentations with respect to the aforementioned matters upon Pledgee's reasonable request or upon consent of Pledgee;6.1.3将任何可能导致对出质人股权或其任何部分的权利产生影响的事件或收到的通知，以及可能改变出质人在本协议中的任何保证、义务或对出质人履行其在本协议中义务可能产生影响的任何事件或收到的通知及时通知质权人。promptly notify Pledgee of any event or notice received by Pledgors that may have an impact on Pledgee's rights to the Equity Interest or anyportion thereof, as well as any event or notice received by Pledgors that may have an impact on any guarantees and other obligations ofPledgors arising out of this Agreement.6.2出质人同意，质权人按本协议条款取得的对质权享有的权利，不应受到出质人或出质人的继承人或出质人之委托人或任何其他人通过法律程序的中断或妨害。Pledgors agree that the rights acquired by Pledgee in accordance with this Agreement with respect to the Pledge shall not be interrupted or harmed byPledgors or any heirs or representatives of Pledgors or any other persons through any legal proceedings.7秘密文件 Strictly Confidential6.3出质人向质权人保证，为保护或完善本协议对偿付业务合作协议项下被担保债务的担保，出质人将诚实签署、并促使其他与质权有利害关系的当事人签署质权人所要求的所有的权利证书、契约和/或履行并促使其他有利害关系的当事人履行质权人所要求的行为，并为本协议赋予质权人之权利、授权的行使提供便利，与质权人或其指定的人(自然人/法人)签署所有的有关股权所有权的文件，并在合理期间内向质权人提供其认为需要的所有的有关质权的通知、命令及决定。To protect or perfect the security interest granted by this Agreement for payment of all payment in pledge under the Business Cooperation Agreement,Pledgors hereby undertake to execute in good faith and to cause other parties who have an interest in the Pledge to execute all certificates, agreements,deeds and/or covenants required by Pledgee. Pledgors also undertake to perform and to cause other parties who have an interest in the Pledge toperform actions required by Pledgee, to facilitate the exercise by Pledgee of its rights and authority granted thereto by this Agreement, and to enter intoall relevant documents regarding ownership of Equity Interest with Pledgee or designee(s) of Pledgee (natural persons/legal persons). Pledgorsundertake to provide Pledgee within a reasonable time with all notices, orders and decisions regarding the Pledge that are required by Pledgee.6.4出质人向质权人保证，出质人将遵守、履行本协议项下所有的保证、承诺、协议、陈述及条件。如出质人不履行或不完全履行其保证、承诺、协议、陈述及条件，出质人应赔偿质权人由此遭受的一切损失。Pledgors hereby undertake to comply with and perform all guarantees, promises, agreements, representations and conditions under this Agreement. Inthe event of failure the whole or partial performance of its guarantees, promises, agreements, representations and conditions, Pledgors shall indemnifyPledgee for all losses resulting therefrom.8秘密文件 Strictly Confidential7.违约事件Event of Default7.1下列事项均被视为违约事件：The following circumstances shall be deemed Event of Default:7.1.1丙方未能按期、完整履行任何业务合作协议项下责任，包括但不限于丙方未能按期足额支付业务合作协议项下的应付的被担保债务或有违反该协议其他义务的行为；Party C fails to fully and timely fulfill any liabilities under the Business Cooperation Agreement, including without limitation failure to pay infull any of the all payment in pledge payable under the Business Cooperation Agreement or breaches any other obligations of Party Cthereunder;7.1.2出质人或丙方实质违反本协议的任何条款；Pledgors or Party C have committed a material breach of any provisions of this Agreement;7.1.3除本协议第6.1.1条的约定外，出质人舍弃出质的股权或未获得质权人书面同意而擅自转让或意图转让出质的股权；和Except as expressly stipulated in Section 6.1.1, Pledgors transfers or purports to transfer or abandons the Equity Interest pledged or assignsthe Equity Interest pledged without the written consent of Pledgee; and7.1.4丙方的继承人或代管人只能履行部分或拒绝履行业务合作协议项下的支付责任。The successor or custodian of Party C is capable of only partially perform or refuses to perform the payment obligations under the BusinessCooperation Agreement.9秘密文件 Strictly Confidential7.2如知道或发现本第7.1条所述的任何事项或可能导致上述事项的事件已经发生，出质人应立即以书面形式通知质权人。Upon notice or discovery of the occurrence of any circumstances or event that may lead to the aforementioned circumstances described in Section 7.1,Pledgors shall immediately notify Pledgee in writing accordingly.7.3除非第7.1部分下的违约事件在质权人向出质人发出要求其修补此违约行为通知后的二十（20）天之内已经按质权人要求获得救济，质权人在其后的任何时间，可向出质人发出书面违约通知，要求依据第8部分履行其处理股权的权利。Unless an Event of Default set forth in this Section 7.1 has been successfully resolved to Pledgee's satisfaction within twenty (20) days after the Pledgeedelivers a notice to the Pledgors requesting ratification of such Event of Default, Pledgee may issue a Notice of Default to Pledgors in writing at any timethereafter, demanding the Pledgors to immediately dispose of the Pledge in accordance with the provisions of Article 8 of this Agreement.8.质权的行使Exercise of Pledge8.1在被担保债务被全部清偿或履行前，未经质权人书面同意，出质人不得转让本质权和其拥有的丙方股权。Prior to the full payment of all payments in pledge, without the Pledgee's written consent, Pledgors shall not assign the Pledge or the Equity Interest inParty C.8.2在质权人行使其质押权利时，质权人可以向出质人发出书面违约通知。Pledgee may issue a Notice of Default to Pledgors when exercising the Pledge.10秘密文件 Strictly Confidential8.3在质权人行使其质押权利时，根据中国有关法律的规定，质权人有权按照法定程序处置质押股权。仅在中国法律允许的范围内，对于处置的所得，质权人无需给付出质人；除非中国法律另有规定，出质人特此放弃其可能有的能向质权人要求任何质押股权处置所得的权利；同样，出质人对质权人在该质押股权处置后的亏损也不承担任何义务。When the Pledgor exercises the pledge right, Pledgee is entitled to dispose of the Equity Interest pledged in accordance with applicable PRC laws. Onlyto the extent permitted under applicable PRC laws, Pledgee has no obligation to account to Pledgors for proceeds of disposition of the Equity Interest.Unless otherwise required by PRC laws, Pledgors hereby waive any rights it may have to demand any such accounting from Pledgee; Likewise, in suchcircumstance Pledgors shall have no obligation to Pledgee for any deficiency remaining after such disposition of the Equity Interest pledged.8.4质权人依照本协议处分质权时，出质人和丙方应予以必要的协助，以使质权人实现其质权。When Pledgee disposes of the Pledge in accordance with this Agreement, Pledgors and Party C shall provide necessary assistance to enable Pledgee toenforce the Pledge in accordance with this Agreement.9.转让Assignment9.1除非经质权人事先同意，出质人无权赠予或转让其在本协议项下的权利义务。Without Pledgee's prior written consent, Pledgors shall not have the right to assign or delegate its rights and obligations under this Agreement.11秘密文件 Strictly Confidential9.2本协议对出质人及其继任人和经许可的受让人均有约束力，并且对质权人及每一继任人和受让人有效。This Agreement shall be binding on Pledgors and their successors and permitted assigns, and shall be valid with respect to Pledgee and each of itssuccessors and assigns.9.3经出质人同意，质权人可以在任何时候将其在业务合作协议项下的所有或任何权利和义务转让给其指定的关联方（自然人/法人），在这种情况下，受让人应享有和承担本协议项下质权人享有和承担的权利和义务，如同其作为原协议方应享有和承担的一样。质权人转让业务合作协议项下的权利和义务时，应质权人要求，出质人应就此转让签署有关协议和/或文件。Upon the Pledgors’ agreement, Pledgee may assign any or all of its rights and obligations under the Business Cooperation Agreement to its designee(s)(natural/legal persons) at any time, in which case the assigns shall have the rights and obligations of Pledgee under this Agreement, as if it were theoriginal party to this Agreement. When the Pledgee assigns the rights and obligations under the Business Cooperation Agreement, upon Pledgee'srequest, Pledgors shall execute relevant agreements or other documents relating to such assignment.9.4因转让所导致的质权人变更后，应质权人要求，出质人应与新的质权人签订一份内容与本协议一致的新质押协议，并在相应的工商行政管理机关进行登记。In the event of a change in Pledgee due to an assignment, Pledgors shall, at the request of Pledgee, execute a new pledge agreement with the newpledgee on the same terms and conditions as this Agreement, and register the same with the relevant AIC.12秘密文件 Strictly Confidential9.5出质人应严格遵守本协议和各方单独或共同签署的其他有关协议的规定，包括独家购买权合同和对质权人的授权委托书，履行各协议项下的义务，并不进行任何足以影响协议的有效性和可强制执行性的作为/不作为。除非根据质权人的书面指示，出质人不得行使其对质押股权还留存的权利。Pledgors shall strictly abide by the provisions of this Agreement and other contracts jointly or separately executed by the Parties hereto or any of them,including the Exclusive Option Agreement and the Power of Attorney granted to Pledgee, perform the obligations hereunder and thereunder, and refrainfrom any action/omission that may affect the effectiveness and enforceability thereof. Any remaining rights of Pledgors with respect to the EquityInterest pledged hereunder shall not be exercised by Pledgors except in accordance with the written instructions of Pledgee.10.终止Termination在被担保债务被全部清偿或履行完毕之后，本质权人应在尽早合理可行的时间内办理或配合办理解除质押的手续，出质人与丙方应提供相应的配合与协助。Upon the full payment of all payments in pledge under the Business Cooperation Agreement a, Pledgor shall then, with the assistance of Party B and Party C,go through the procedures of cancellation of pledge rights at a reasonable time as soon as practicable.11.手续费及其他费用Handling Fees and Other Expenses一切与本协议有关的费用及实际开支，其中包括但不限于法律费用、工本费、印花税以及任何其他税收、费用等全部由丙方承担。All fees and out of pocket expenses relating to this Agreement, including but not limited to legal costs, costs of production, stamp tax and any other taxes andfees, shall be borne by Party C.13秘密文件 Strictly Confidential12.保密责任Confidentiality各方承认及确定有关本协议、本协议内容，以及彼此就准备或履行本协议而交换的任何口头或书面资料均被视为保密信息。各方应当对所有该等保密信息予以保密，而在未得到另一方书面同意前，不得向任何第三者披露任何保密信息，惟下列信息除外：(a)公众人士知悉或将会知悉的任何信息（惟并非由接受保密信息之一方擅自向公众披露）；(b)根据适用法律法规、股票交易规则、或政府部门或法院的命令而所需披露之任何信息；或(c)由任何一方就本协议所述交易而需向其股东、投资者、法律或财务顾问披露之信息，而该股东、法律或财务顾问亦需遵守与本条款相类似之保密责任。如任何一方工作人员或聘请机构的泄密均视为该方的泄密，需依本协议承担违约责任。无论本协议以任何理由终止，本条款仍然生效。The Parties acknowledge that the existence and the terms of this Agreement and any oral or written information exchanged between the Parties in connectionwith the preparation and performance this Agreement are regarded as confidential information. Each Party shall maintain confidentiality of all such confidentialinformation, and without obtaining the written consent of the other Party, it shall not disclose any relevant confidential information to any third parties, exceptfor the information that: (a) is or will be in the public domain (other than through the receiving Party’s unauthorized disclosure); (b) is under the obligation tobe disclosed pursuant to the applicable laws or regulations, rules of any stock exchange, or orders of the court or other government authorities; or (c) isrequired to be disclosed by any Party to its shareholders, investors, legal counsels or financial advisors regarding the transaction contemplated hereunder,provided that such shareholders, investors, legal counsels or financial advisors shall be bound by the confidentiality obligations similar to those set forth inthis Section. Disclosure of any confidential information by the staff members or agencies hired by any Party shall be deemed disclosure of such confidentialinformation by such Party, which Party shall be held liable for breach of this Agreement. This Section shall survive the termination of this Agreement for anyreason.14秘密文件 Strictly Confidential13.适用法律和争议的解决Governing Law and Resolution of Disputes13.1本协议的订立、效力、解释、履行、修改和终止以及争议的解决均适用中国法律。The execution, effectiveness, construction, performance, amendment and termination of this Agreement and the resolution of disputes hereunder shallbe governed by the laws of China.13.2因解释和履行本协议而发生的任何争议，本协议各方应首先通过友好协商的方式加以解决。如果在一方向其他方发出要求协商解决的书面通知后30天之内争议仍然得不到解决，则任何一方均可将有关争议提交给中国国际经济贸易仲裁委员会，由该会按照其仲裁规则仲裁解决。仲裁应在北京进行，使用之语言为中文。仲裁裁决是终局性的，对各方均有约束力。In the event of any dispute with respect to the construction and performance of this Agreement, the Parties shall first resolve the dispute throughfriendly negotiations. In the event the Parties fail to reach an agreement on the dispute within 30 days after either Party's request to the other Parties forresolution of the dispute through negotiations, either Party may submit the relevant dispute to the China International Economic and Trade ArbitrationCommission for arbitration, in accordance with its Arbitration Rules. The arbitration shall be conducted in Beijing, and the language used in arbitrationshall be Chinese. The arbitration award shall be final and binding on all Parties.13.3因解释和履行本协议而发生任何争议或任何争议正在进行仲裁时，除争议的事项外，本协议各方仍应继续行使各自在本协议项下的其他权利并履行各自在本协议项下的其他义务。Upon the occurrence of any disputes arising from the construction and performance of this Agreement or during the pending arbitration of any dispute,except for the matters under dispute, the Parties to this Agreement shall continue to exercise their respective rights under this Agreement and performtheir respective obligations under this Agreement.15秘密文件 Strictly Confidential14.通知Notices14.1本协议项下要求或发出的所有通知和其他通信应通过专人递送、挂号邮寄、邮资预付或商业快递服务或传真的方式发到该方下列地址。每一通知还应再以电子邮件送达。该等通知视为有效送达的日期按如下方式确定：All notices and other communications required or permitted to be given pursuant to this Agreement shall be delivered personally or sent by registeredmail, postage prepaid, by a commercial courier service or by facsimile transmission to the address of such party set forth below. A confirmation copy ofeach notice shall also be sent by Email. The dates on which notices shall be deemed to have been effectively given shall be determined as follows:14.1.1通知如果是以专人递送、快递服务或挂号邮寄、邮资预付发出的，则以于设定为通知的地址在接收或拒收之日为有效送达日。Notices given by personal delivery, by courier service or by registered mail, postage prepaid, shall be deemed effectively given on the date ofreceipt or refusal at the address specified for notices.14.1.2通知如果是以传真发出的，则以成功传送之日为有效送达日（应以自动生成的传送确认信息为证）。Notices given by facsimile transmission shall be deemed effectively given on the date of successful transmission (as evidenced by anautomatically generated confirmation of transmission).16秘密文件 Strictly Confidential14.2为通知的目的，各方地址如下：For the purpose of notices, the addresses of the Parties are as follows:甲方：中传天下信息科技（深圳）有限公司Party A: Zhongchuan Tianxia Information Technology (Shenzhen) Co., Ltd.地址：深圳市南山区高新中三道2号深圳软件园一期五栋401AAddress: 401A, Building 5, Phase 1, Shenzhen Software Park, No.2 Gaoxin Zhongsan Road, Nanshan District, Shenzhen.收件人：洪婷Attn: Hong Ting乙方：Party B:a)宋雪松Song Xuesong地址：125.Expenses, including legal fees, incurred by a director in defending any legal, administrative or investigative proceedings may be paid by the Company inadvance of the final disposition of such proceedings upon receipt of an undertaking by or on behalf of the director to repay the amount if it shall ultimatelybe determined that the director is not entitled to be indemnified by the Company in accordance with these Articles.126.Expenses, including legal fees, incurred by a former director in defending any legal, administrative or investigative proceedings may be paid by theCompany in advance of the final disposition of such proceedings upon receipt of an undertaking by or on behalf of the former director to repay the amountif it shall ultimately be determined that the director is not entitled to be indemnified by the Company in accordance with these Articles.127.The indemnification and advancement of expenses provided by, or granted pursuant to, these Articles is not exclusive of any other rights to which theperson seeking indemnification of advancement of expenses may be entitled under any agreement, resolution of members, resolution of disinteresteddirectors or otherwise, both as to acting in the person’s official capacity and as to acting in another capacity while serving as a director of the Company.128.If a person to be indemnified has been successful in defence of any proceedings referred to above the person is entitled to be indemnified against allexpenses, including legal fees, and against all judgments, fines and amounts paid in settlement and reasonably incurred by the person in connection withthe proceedings.129.The Company may purchase and maintain insurance in relation to any person who is or was a director, an officer or a liquidator of the Company, or who atthe request of the Company is or was serving as a director, an officer or a liquidator of, or in any other capacity is or was acting for, another body corporateor a partnership, joint venture, trust or other enterprise, against any liability asserted against the person and incurred by the person in that capacity,whether or not the Company has or would have had the power to indemnify the person against the liability as provided in these Articles.SEAL130.The Company shall have a Seal and may have more than one Seal. References herein to the Seal shall be references to every Seal which shall have beenduly adopted by resolution of directors. The directors shall provide for the safe custody of the Seal and for an imprint thereof to be kept at the office of theregistered agent of the Company. Except as otherwise expressly provided herein, the Seal when affixed to any written instrument, shall be witnessed andattested to by the signature of a director or any other person so authorized from time to time by resolution of directors. Such authorization may be before orafter the Seal is affixed, may be general or specific and may refer to any number of sealings. The Directors may provide for a facsimile of the Seal and of thesignature of any director or authorized person which may be reproduced by printing or other means on any instrument and it shall have the same force andvalidity as if the Seal had been affixed to such instrument and the same had been signed as hereinbefore described.21DISTRIBUTIONS131.The directors of the Company may by resolution authorise a distribution by the Company at any time and of any amount and to any members they think fitif they are satisfied on reasonable grounds that immediately after the distribution;a.the value of the Company’s assets will exceed its liabilities, andb.the Company will be able to pay its debts as they fall due.132.A resolution of the directors passed under the preceding Article shall contain a statement that, in the opinion of the directors, immediately after thedistribution the value of the Company’s assets will exceed its liabilities, and the Company will be able to pay its debts as they fall due.133.If, after a distribution is authorised and before it is made, the directors cease to be satisfied on reasonable grounds that the Company will, immediately afterthe distribution satisfy the solvency test, any distribution made by the Company is deemed not to have been authorised.134.If, by virtue of the preceding Article, a distribution is deemed not to have been authorised, a director who;a.ceased, after authorisation but before the making of the distribution, to be satisfied on reasonable grounds for believing that the company wouldsatisfy the solvency test immediately after the distribution is made; andb.failed to take reasonable steps to prevent the distribution being made;is personally liable to the company to repay to the company so much of the distribution as is not able to be recovered from members.135.A distribution made to a member at a time when the company did not, immediately after the distribution, satisfy the solvency test may be recovered by thecompany from the member unless;a.the member received the distribution in good faith and without knowledge of the company’s failure to satisfy the solvency test;b.the member has altered his position in reliance on the validity of the distribution; andc.it would be unfair to require repayment in full or at all.DISTRIBUTIONS BY WAY OF DIVIDEND136.The Company may by a resolution of directors declare a distribution by way of dividend and pay such distribution in money, shares or other property. Inthe event that distributions by way of dividend are paid in specie the directors shall have responsibility for establishing and recording in the resolution ofdirectors authorizing the distribution by way of dividend, a fair and proper value for the assets to be so distributed.137.The directors may from time to time pay to the members such interim distributions by way of dividend as appear to the directors to be justified by theprofits of the Company.138.The directors may, before declaring any distribution by way of dividend, set aside out of the profits of the Company such sum as they think proper as areserve fund, and may invest the sum so set aside as a reserve fund upon such securities as they may select.139.Notice of any distribution by way of dividend that may have been declared shall be given to each member in the manner hereinafter mentioned and alldistributions by way of dividend unclaimed for 3 years after having been declared may be forfeited by resolution of directors for the benefit of theCompany.140.No distribution by way of dividend shall bear interest as against the Company and no distribution by way of dividend shall be paid on treasury shares orshares held by another company of which the Company holds, directly or indirectly, shares having more than 50 percent of the vote in electing directors.22141.A share issued as a distribution by way of dividend by the Company shall be treated for all purposes as having been issued for money equal to the valuedetermined by resolution of the directors. In the absence of fraud the decision of the directors as to the value of the share is conclusive unless a questionof law is involved.142.A division of the issued and outstanding shares of a class or series of shares into a larger number of shares of the same class or series having aproportionately smaller par value does not constitute a distribution by way of dividend of shares.ACCOUNTS AND AUDIT143.The Company may by resolution of members call for the directors to prepare periodically a profit and loss account and a balance sheet. The profit and lossaccount and balance sheet shall be drawn up so as to give respectively a true and fair view of the profit and loss of the Company for the financial periodand a true and fair view of the state of affairs of the Company as at the end of the financial period.144.The Company may by resolution of members call for the accounts to be examined by auditors.145.Subject to the rules of the Designated Stock Exchange, the first auditors shall be appointed by resolution of directors; subsequent auditors shall beappointed by the Audit Committee and shall hold office until the Audit Committee appoint another independent auditor.146.Subject to the rules of the Designated Stock Exchange, the remuneration of the auditors of the Company shall be fixed by the Audit Committee.147.The auditors shall examine each profit and loss account and balance sheet required to be served on every member of the Company or laid before a meetingof the members of the Company and shall state in a written report whether or nota.in their opinion the profit and loss account and balance sheet give a true and fair view respectively of the profit and loss for the period covered bythe accounts, and of the state of affairs of the Company at the end of that period; andb.all the information and explanations required by the auditors have been obtained.148.The report of the auditors shall be annexed to the accounts and shall be read at the meeting of members at which the accounts are laid before the Companyor shall be served on the members.149.Every auditor of the Company shall have a right of access at all times to the books of account and vouchers of the Company, and shall be entitled to requirefrom the directors and officers of the Company such information and explanations as he thinks necessary for the performance of the duties of the auditors.150.The auditors of the Company shall be entitled to receive notice of, and to attend any meetings of members of the Company at which the Company’s profitand loss account and balance sheet are to be presented.NOTICES151.Any notice, information or written statement to be given by the Company to members may be served in any way by which it can reasonably be expected toreach each member or by mail addressed to each member at the address shown in the share register.152.Any summons, notice, order, document, process, information or written statement to be served on the Company may be served by leaving it, or by sendingit by registered mail addressed to the Company, at its registered office, or by leaving it with, or by sending it by registered mail to, the registered agent ofthe Company.153.Service of any summons, notice, order, document, process, information or written statement to be served on the Company may be proved by showing thatthe summons, notice, order, document, process, information or written statement was delivered to the registered office or the registered agent of theCompany or that it was mailed in such time as to admit to its being delivered to the registered office or the registered agent of the Company in the normalcourse of delivery within the period prescribed for service and was correctly addressed and the postage was prepaid.23PENSION AND SUPERANNUATION FUNDS154.The directors may establish and maintain or procure the establishment and maintenance of any noncontributory or contributory pension orsuperannuation funds for the benefit of, and give or procure the giving of donations, gratuities, pensions, allowances or emoluments to, any persons whoare or were at any time in the employment or service of the Company or any company which is a subsidiary of the Company or is allied to or associated withthe Company or with any such subsidiary, or who are or were at any time directors or officers of the Company or of any such other company as aforesaid orwho hold or held any salaried employment or office in the Company or such other company, or any persons in whose welfare the Company or any suchother company as aforesaid is or has been at any time interested, and to the wives, widows, families and dependents of any such person, and may makepayments for or towards the insurance of any such persons as aforesaid, and may do any of the matters aforesaid either alone or in conjunction with anysuch other company as aforesaid. Subject always to the proposal being approved by resolution of members, a director holding any such employment oroffice shall be entitled to participate in and retain for his own benefit any such donation, gratuity, pension allowance or emolument.VOLUNTARY WINDING UP AND DISSOLUTION155.The Company may voluntarily commence to wind up and dissolve by a resolution of members but if the Company has never issued shares it mayvoluntarily commence to wind up and dissolve by resolution of directors.CONTINUATION156.The Company may by resolution of members or by a resolution passed unanimously by all directors of the Company continue as a company incorporatedunder the laws of a jurisdiction outside the British Virgin Islands in the manner provided under those laws.ARBITRATION157.Whenever any difference arises between the Company on the one hand and any of the members or their executors, administrators or assigns on the otherhand, touching the true intent and construction or the incidence or consequences of these Articles or of the Act, touching anything done or executed,omitted or suffered in pursuance of the Act or touching any breach or alleged breach or otherwise relating to the premises or to these Articles, or to anyAct or Ordinance affecting the Company or to any of the affairs of the Company such difference shall, unless the parties agree to refer the same to a singlearbitrator, be referred to 2 arbitrators one to be chosen by each of the parties to the difference and the arbitrators shall before entering on the referenceappoint an umpire.158.If either party to the reference makes default in appointing an arbitrator either originally or by way of substitution (in the event that an appointed arbitratorshall die, be incapable of acting or refuse to act) for 10 days after the other party has given him notice to appoint the same, such other party may appoint anarbitrator to act in the place of the arbitrator of the defaulting party.We, Portcullis TrustNet (BVI) Limited of Portcullis TrustNet Chambers, P.O. Box 3444, Road Town, Tortola, British Virgin Islands for the purpose of incorporating aBVI Business Company under the laws of the British Virgin Islands hereby sign these Articles of Association the 27th day of October, 2009.Incorporator/s/ Nicole WheatleyPortcullis TrustNet (BVI) LimitedPortcullis TrustNet ChambersP.O. Box 3444Road Town, TortolaBritish Virgin Islands(Sgd. Nicole Wheatley)24EX4.15 3 f20f2017ex415_luokung.htm EXCLUSIVE BUSINESS COOPERATION AGREEMENT BY AND BETWEEN ZHONGCHUAN TIANXIA INFORMATIONTECHNOLOGY (SHENZHEN) CO., LTD., AND BEIJING MOBILE VISION TECHNOLOGY CO., LTD., DATED AUGUST 31, 2015Exhibit 4.15独家业务合作协议Exclusive Business Cooperation Agreement本独家业务合作协议（下称“本协议”）由以下双方于年月日在中华人民共和国（下称“中国”）北京市签署。This Exclusive Business Cooperation Agreement (this “Agreement”) is made and entered into by and between the following parties on in Beijing, thePeople’s Republic of China (“China” or the “PRC”).甲方：中传天下信息科技（深圳）有限公司Party A: Zhongchuan Tianxia Information Technology (Shenzhen) Co., Ltd.地址：深圳市南山区高新中三道2号深圳软件园一期五栋401A Address: 401A, Building 5, Phase 1, Shenzhen Software Park, No.2 Gaoxin Zhongsan Road, Nanshan District, Shenzhen统一社会信用代码：91440300565701058R Uniform Social Credit Code: 91440300565701058R乙方：北京中传视讯科技有限公司Party B: Beijing Mobile Vision Technology Co., Ltd.地址：北京市朝阳区光华路9号SOHO3QLAB32Address: LAB32, SOHO3Q, No 9, Guanghua Road, Chaoyang District, Beijing统一社会信用代码：9111010576215249XMUniform Social Credit Code: 9111010576215249XM甲方和乙方以下各称为“一方”，统称为“双方”。Each of Party A and Party B shall be hereinafter referred to as a “Party” respectively, and as “Parties” collectively.1秘密文件Strictly Confidential鉴于：Whereas,1.甲方是一家在中国注册的外商独资企业，拥有丰富的技术研发和产业化推广相关的管理和投资经验，并提供相关的技术支持和咨询服务；Party A is a whollyforeignowned enterprise established in China, which has rich experience in technology research development and industrializationpromotion management and investment, and provides relevant technical support and consulting services;2.乙方是一家在中国成立的有限责任公司，经中国有关政府部门批准依法主要从事手机视频技术开发、内容制作及市场推广；Party B is a limited company in China, mainly engages in mobile video technology research, development, content creation, sale and related industrialpromotion as approved by the relevant governmental authorities in China;3.甲方同意利用其技术、人员和信息优势，在本协议期间向乙方提供有关手机视频技术开发、内容制作及市场推广以及未来扩大业务规模和业务范围时乙方所需的技术支持、技术咨询等相关服务，乙方同意接受甲方或其指定方按本协议条款的规定提供的各种服务。Party A is willing to provide Party B with technology supports and technology consulting services in connection with mobile video technology research,development, content creation, sale and related industrial promotion and such services in connection with Party B’s extension of business scale orbroadening of businesses during the term of this Agreement, utilizing its advantages in technology, human resources, and information, and Party B iswilling to accept such services provided by Party A or Party A's designee(s), each on the terms set forth herein.2秘密文件Strictly Confidential据此，甲方和乙方经协商一致，达成如下协议：Now, therefore, through mutual discussion, the Parties have reached the following agreements:1.服务提供Services Provided by Party A1.1按照本协议条款和条件，乙方在此委任甲方在本协议期间作为乙方的独家服务提供者向乙方提供全面的和手机视频技术开发、内容制作及市场推广相关以及未来扩大业务规模和业务范围时乙方所需的技术支持、业务支持和相关咨询服务，具体内容包括但不限于以下内容：Party B hereby appoints Party A as Party B's exclusive services provider to provide Party B with complete technical support, business supportand related consulting services in connection with mobile video technology research, development, content creation, sale and related industrialpromotion and such services in connection with Party B’s extension of business scale or broadening of businesses during the term of thisAgreement, in accordance with the terms and conditions of this Agreement, which may include but not limited to:1.1.1为乙方提供其手机视频技术开发、内容制作及市场推广业务所需的一切服务支持，为乙方提供相当于包括总经理、行政人员、管理人员、筹划部门、商业运营、人力资源、财务、会计以及与乙方业务相关的一切业务操作所需人员所能提供的服务内容；managing all aspects of Party B’s business of mobile video technology research, development, content creation, sale and relatedindustrial promotion. In this capacity, Party A will procure or engage for Party B the services of a general manager and other managementstaff, including but not limited to personnel responsible for all administration, operations, planning, business development, humanresources, finance, accounting and other operations related to the Business of Party B;3秘密文件Strictly Confidential1.1.2为乙方制定全部的商业计划、销售目标，并为优化执行该等商业计划设计和建立相应的系统及操作程序；developing all business plans and sales projections of Party B, and for developing and establishing systems and procedures for optimumexecution of the business plans;1.1.3为乙方申请手机视频技术及内容制作相关专利提供咨询服务和支持；consulting services and support in connection with Party B’s applying for mobile video technology related patents and content creation;1.1.4为乙方手机视频技术产业化的发展方向、规模、品牌提升提供咨询服务；consulting services in connection with the development directions, size and business brands promotion of Party B’s mobile videotechnology industrialization;4秘密文件Strictly Confidential1.1.5为乙方提供与业务相关的办公、生产和销售服务，为乙方租赁场所，建立业务相关的系统和程序，满足乙方的其他要求；procuring or obtaining for Party B all office, production and distribution services related to the Business. It shall procure or obtainappropriate leases, establish systems and procedures needed to operate the business, fulfill orders for services;1.1.6尽最大努力为乙方建立手机视频技术销售市场，根据甲方为乙方制定的商业计划及销售目标代表乙方获取客户订单，同时为乙方提供与业务相关的客户服务，建立向客户开具票据的程序和与会计相关的托收服务。using its best efforts to establish mobile video technology related marketing and other structures to obtain orders for services &products from customers on behalf of Party B in accordance with Party B’s business plans, sales projections and objectives (asdeveloped by Party A) and procure or obtain customer services required in connection with the Business. It shall also establishprocedures for invoicing customers, and establish collection services with respect to accounts;1.1.7就乙方的劳动用工方面提供咨询服务和支持，包括但不限于，组织实施对乙方业务人员、行政人员、管理人员等人员进行培训和考核，协助建立健全的人力资源管理制度和实现人力资源的良好配置；consulting services and support regarding labor system of Party B, including but without limitation to labor training and evaluation ofsales person, administrative staff and management person etc. and establishment of human resources management system to well;5秘密文件Strictly Confidential1.1.8提供乙方需要的客户数据统计、分析及相关数据库的建设和维护等咨询服务；providing Party B with compile and analysis of client data and consulting services of establishment and maintenance of data base;1.1.9提供乙方需要的软件和相关技术支持服务；providing software Party B requires and other technical support;1.1.10接受乙方委托，对乙方的手机视频技术研发和产业化推广业务经营进行指导和管理；guiding and management on Party B’s business of mobile video technology research and development and related industrial promotionoperation according to Party B’s commission;1.1.11当乙方业务规模发展或业务范围扩大需要时，购买乙方业务经营需要的设备；in the event of the demand of Party B’s development of business scale or broadening of businesses, purchase the equipments which itneeds for the operation of its business;1.1.12当乙方业务规模发展或业务范围扩大需要时，完成乙方项目中的全部或部分工作；in the event of the demand of Party B’s development of business scale or broadening of businesses, complete the work of Party B’sproject in whole or in party;6秘密文件Strictly Confidential1.1.13当乙方业务规模发展或业务范围扩大需要时，开发新技术；in the event of the demand of Party B’s development of business scale or broadening of businesses, develop new technology;1.1.14乙方委托甲方，且甲方接受委托提供的其他服务。other services Party B appoints Party A to provide and Party A agrees to provide.1.2乙方接受甲方的咨询和服务。乙方进一步同意，除非经甲方事先书面同意，在本协议期间，就本协议约定的服务或其他事宜，乙方不得直接或间接地从任何第三方获得任何与本协议相同或类似的咨询和/或服务，并不得与任何第三方就本协议所述事项建立任何类似的合作关系。双方同意，甲方可以指定其他方（该被指定方可以与乙方签署本协议第1.3条描述的某些协议）为乙方提供本协议约定的服务和/或支持。Party B agrees to accept all the consultations and services provided by Party A. Party B further agrees that unless with Party A's prior writtenconsent, during the term of this Agreement, Party B shall not directly or indirectly accept the same or any similar consultations and/or servicesprovided by any third party and shall not establish similar corporation relationship with any third party regarding the matters contemplated by thisAgreement. Party A may appoint other parties, who may enter into certain agreements described in Section 1.3 with Party B, to provide Party Bwith the consultations and/or services under this Agreement.7秘密文件Strictly Confidential1.3服务的提供方式Service Providing Methodology1.3.1双方同意在本协议有效期内，视情况而定，乙方可以与甲方或甲方指定的其他方进一步签订技术服务协议和/或咨询服务协议，对各项业务培训、技术服务、咨询服务的具体内容、方式、人员、收费等进行约定。Parties agree that during the term of this Agreement, where necessary, Party B may enter into further technical service agreements and/orconsulting service agreements with Party A or any other party designated by Party A, which shall provide the specific contents, manner,personnel, and fees for the specific technical services and consulting services.1.3.2为更好地履行本协议，双方同意，在甲方认为必要时，乙方应在本协议有效期内与甲方或甲方指定的其他方根据业务进展需要随时签署协议，由甲方或其指定方向乙方提供服务。To fulfill this Agreement, Parties agree that during the term of this Agreement, where Party A deems necessary, Party B shall enter intoagreements with Party A or any other party designated by Party A which shall set forth that Party A or any other party designated byParty A provide services to Party B based on the needs of the business of Party B.8秘密文件Strictly Confidential2.服务的价格和支付方式The Calculation and Payment of the Service Fees双方同意，就甲方提供的服务，乙方应向甲方支付服务费（“服务费”）。服务费不应低于乙方税后利润的80%。服务费应当按季支付；经甲方事先书面同意，服务费可以根据乙方的经营需要进行调整。Both Parties agree that, in consideration of the services provided by Party A, Party B shall pay Party A fees (the “Service Fees”), which shall not be lessthan 80% of Party B’s aftertax profits . The Service Fees shall be due and payable on a quarterly basis; upon the prior written consent by Party A, the rateof Service Fees may be adjusted pursuant to the operational needs of Party B.3.知识产权和保密条款Intellectual Property Rights and Confidentiality Clauses3.1在中国法律允许的范围内，甲方对履行本协议而产生或创造的任何权利、所有权、权益和所有知识产权包括但不限于著作权、专利权、专利申请权、软件、技术秘密、商业机密及其他均享有独占的和排他的权利和利益。乙方须签署所有适当的文件，采取所有适当的行动，递交所有的文件和/或申请，提供所有适当的协助，以及做出所有其他依据甲方的自行决定认为是必要的行为，以将任何对该等知识产权的所有权、权利和权益赋予甲方，和/或完善对甲方此等知识产权权利的保护。To the extent permitted under the PRC laws, Party A shall have exclusive and proprietary rights and interests in all rights, ownership, interests andintellectual properties arising out of or created during the performance of this Agreement, including but not limited to copyrights, patents, patentapplications, software, technical secrets, trade secrets and others. Party B shall execute all appropriate documents, take all appropriate actions,submit all filings and/or applications, render all appropriate assistance and otherwise conduct whatever is necessary deemed as by Party A in itssole discretion for the purposes of vesting any ownership, right or interest of any such intellectual property rights in Party A, and/or perfectingthe protections for any such intellectual property rights in Party A.9秘密文件Strictly Confidential3.2双方承认及确定有关本协议、本协议内容，以及彼此就准备或履行本协议而交换的任何口头或书面资料均被视为保密信息。双方应当对所有该等保密信息予以保密，而在未得到另一方书面同意前，不得向任何第三者披露任何保密信息，惟下列信息除外：(a)公众人士知悉或将会知悉的任何信息（惟并非由接受保密信息之一方擅自向公众披露）；(b)根据适用法律法规、股票交易规则、或政府部门或法院的命令而所需披露之任何信息；或(c)由任何一方就本协议所述交易而需向其股东、投资者、法律或财务顾问披露之信息，而该股东、法律或财务顾问亦需遵守与本条款相类似之保密责任。如任何一方工作人员或聘请机构的泄密均视为该方的泄密，需依本协议承担违约责任。无论本协议以任何理由终止，本条款仍然生效。The Parties acknowledge that the existence and the terms of this Agreement and any oral or written information exchanged between the Parties inconnection with the preparation and performance this Agreement are regarded as confidential information. Each Party shall maintainconfidentiality of all such confidential information, and without obtaining the written consent of the other Party, it shall not disclose any relevantconfidential information to any third parties, except for the information that: (a) is or will be in the public domain (other than through the receivingParty’s unauthorized disclosure); (b) is under the obligation to be disclosed pursuant to the applicable laws or regulations, rules of any stockexchange, or orders of the court or other government authorities; or (c) is required to be disclosed by any Party to its shareholders, investors,legal counsels or financial advisors regarding the transaction contemplated hereunder, provided that such shareholders, investors, legal counselsor financial advisors shall be bound by the confidentiality obligations similar to those set forth in this Section. Disclosure of any confidentialinformation by the staff members or agencies hired by any Party shall be deemed disclosure of such confidential information by such Party, whichParty shall be held liable for breach of this Agreement. This Section shall survive the termination of this Agreement for any reason.3.3双方同意，不论本协议是否变更、解除或终止，本条款将持续有效。The Parties agree that this Section shall survive changes to, and rescission or termination of, this Agreement.4.陈述和保证Representations and Warranties4.1甲方陈述和保证如下：Party A hereby represents and warrants as follows:4.1.1甲方是按照中国法律合法注册并有效存续的外商独资企业。Party A is a whollyforeignowned enterprise legally registered and validly existing in accordance with the laws of China.10秘密文件Strictly Confidential4.1.2甲方已采取必要的公司行为，获得必要的授权，并取得第三方和政府部门的同意及批准（若需）以签署和履行本协议；甲方对本协议的签署和履行并不违反法律法规的明确规定。Party A has taken all necessary corporate actions, obtained all necessary authorization and the consent and approval from third partiesand government agencies (if any) for the execution and performance of this Agreement. Party A’s execution and performance of thisAgreement do not violate any explicit requirements under any law or regulation binding on Party A.4.1.3本协议构成对其合法、有效、有约束力并依本协议之条款对其强制执行的义务。This Agreement constitutes Party A's legal, valid and binding obligations, enforceable in accordance with its terms.4.2乙方陈述和保证如下：Party B hereby represents and warrants as follows:4.2.1乙方是按照中国法律合法登记且有效存续的有限责任公司，乙方根据政府部门的批准和许可从事手机视频技术开发、内容制作和产业化市场推广的经营。Party B is a limited company legally registered and validly existing in accordance with the laws of China, engages in mobile videotechnology research, development, content creation, sale and related industrial promotion pursuant to governmental approvals andpermits;11秘密文件Strictly Confidential4.2.2乙方已采取必要的行为，获得必要的授权，并取得第三方和政府部门的同意及批准（若需）以签署和履行本协议；乙方对本协议的签署和履行并不违反法律法规的明确规定。Party B has taken all necessary actions, obtained all necessary authorization and the consent and approval from third parties andgovernment agencies (if any) for the execution and performance of this Agreement. Party B’s execution and performance of thisAgreement do not violate any explicit requirements under any law or regulation binding on Party B.4.2.3本协议构成对其合法、有效、有约束力并依本协议之条款对其强制执行的义务。This Agreement constitutes Party B's legal, valid and binding obligations, and shall be enforceable against it.5.生效和有效期Effectiveness and Term5.1本协议于文首标明的协议日期签署并同时生效。除非依本协议或双方其他协议的约定而提前终止，本协议有效期为20年，但甲、乙双方应自本协议签署后，每3个月对本协议的内容做一次审查，以决定是否需要根据当时的情况对本协议作出相应修改和补充。This Agreement is executed on the date first above written and shall take effect as of such date. Unless earlier terminated in accordance with theprovisions of this Agreement or relevant agreements separately executed between the Parties, the term of this Agreement shall be 20 years. Afterthe execution of this Agreement, both Parties shall review this Agreement every 3 months to determine whether to amend or supplement theprovisions in this Agreement based on the actual circumstances at that time.12秘密文件Strictly Confidential5.2协议期满前，经甲方书面确认，本协议可以延期。延期的期限由甲方决定，乙方必须无条件地同意该延期。The term of this Agreement may be extended if confirmed in writing by Party A prior to the expiration thereof. The extended term shall bedetermined by Party A, and Party B shall accept such extended term unconditionally.6.终止Termination6.1除非依据本协议续期，本协议于到期之日终止。Unless renewed in accordance with the relevant terms of this Agreement, this Agreement shall be terminated upon the date of expiration hereof.6.2本协议有效期内，除非甲方对乙方有重大过失或存在欺诈行为，乙方不得提前终止本协议。尽管如此，甲方可在任何时候通过提前30天向乙方发出书面通知的方式终止本协议。During the term of this Agreement, unless Party A commits gross negligence, or a fraudulent act, against Party B, Party B shall not terminate thisAgreement prior to its expiration date. Nevertheless, Party A shall have the right to terminate this Agreement upon giving 30 days' prior writtennotice to Party B at any time.6.3在本协议终止之后，双方在第3、7和8条项下的权利和义务将继续有效。The rights and obligations of the Parties under Articles 3, 7 and 8 shall survive the termination of this Agreement.13秘密文件Strictly Confidential7.适用法律和争议解决Governing Law and Resolution of Disputes7.1本协议的订立、效力、解释、履行、修改和终止以及争议的解决适用中国的法律。The execution, effectiveness, construction, performance, amendment and termination of this Agreement and the resolution of disputes hereundershall be governed by the laws of China.7.2因解释和履行本协议而发生的任何争议，本协议双方应首先通过友好协商的方式加以解决。如果在一方向其他方发出要求协商解决的书面通知后30天之内争议仍然得不到解决，则任何一方均可将有关争议提交给中国国际经济贸易仲裁委员会，由该会按照其仲裁规则仲裁解决。仲裁应在北京进行，使用之语言为中文。仲裁裁决是终局性的，对各方均有约束力。In the event of any dispute with respect to the construction and performance of this Agreement, the Parties shall first resolve the dispute throughfriendly negotiations. In the event the Parties fail to reach an agreement on the dispute within 30 days after either Party's request to the otherParties for resolution of the dispute through negotiations, either Party may submit the relevant dispute to the China International Economic andTrade Arbitration Commission for arbitration, in accordance with its Arbitration Rules. The arbitration shall be conducted in Beijing, and thelanguage used in arbitration shall be Chinese. The arbitration award shall be final and binding on all Parties.14秘密文件Strictly Confidential7.3因解释和履行本协议而发生任何争议或任何争议正在进行仲裁时，除争议的事项外，本协议双方仍应继续行使各自在本协议项下的其他权利并履行各自在本协议项下的其他义务。Upon the occurrence of any disputes arising from the construction and performance of this Agreement or during the pending arbitration of anydispute, except for the matters under dispute, the Parties to this Agreement shall continue to exercise their respective rights under this Agreementand perform their respective obligations under this Agreement.8.补偿Indemnification就甲方根据本协议向乙方提供的咨询和服务内容所产生或引起的针对甲方的诉讼、请求或其他要求而招致的任何损失、损害、责任或费用都应由乙方补偿给甲方，以使甲方不受损害，除非该损失、损害、责任或费用是因甲方的重大过失或故意而产生的。Party B shall indemnify and hold harmless Party A from any losses, injuries, obligations or expenses caused by any lawsuit, claims or other demandsagainst Party A arising from or caused by the consultations and services provided by Party A to Party B pursuant this Agreement, except where suchlosses, injuries, obligations or expenses arise from the gross negligence or willful misconduct of Party A.15秘密文件Strictly Confidential9.通知Notices9.1本协议项下要求或发出的所有通知和其他通信应通过专人递送、挂号邮寄、邮资预付或快递服务或传真的方式发到该方下列地址。每一通知还应再以电子邮件送达。该等通知视为有效送达的日期按如下方式确定：All notices and other communications required or permitted to be given pursuant to this Agreement shall be delivered personally or sent byregistered mail, postage prepaid, by a courier service or by facsimile transmission to the address of such Party set forth below. A confirmationcopy of each notice shall also be sent by email. The dates on which notices shall be deemed to have been effectively given shall be determined asfollows:9.1.1通知如果是以专人递送、快递服务或挂号邮寄、邮资预付发出的，则以于设定为通知的地址在接收或拒收之日为有效送达日。Notices given by personal delivery, by courier service or by registered mail, postage prepaid, shall be deemed effectively given on thedate of receipt or refusal at the address specified for notices.9.1.2通知如果是以传真发出的，则以成功传送之日为有效送达日（应以自动生成的传送确认信息为证）。Notices given by facsimile transmission shall be deemed effectively given on the date of successful transmission (as evidenced by anautomatically generated confirmation of transmission).16秘密文件Strictly Confidential9.2为通知的目的，双方地址如下：For the purpose of notices, the addresses of the Parties are as follows:甲方：中传天下信息科技（深圳）有限公司Party A: Zhongchuan Tianxia Information Technology (Shenzhen) Co., Ltd.地址：深圳市南山区高新中三道2号深圳软件园一期五栋401AAddress:401A, Building 5, Phase 1, Shenzhen Software Park, No.2 Gaoxin Zhongsan Road, Nanshan District, Shenzhen收件人：洪婷Attn: Hong Ting乙方：北京中传视讯科技有限公司Party B: Beijing Mobile Vision Technology Co., Ltd地址：北京市朝阳区光华路9号SOHO3QLAB32Address: LAB32, SOHO3Q, No 9, Guanghua Road, Chaoyang District, Beijing.收件人：宋雪松Attn.: Song Xuesong9.3任何一方可按本条规定随时给另一方发出通知来改变其接收通知的地址。Any Party may at any time change its address for notices by a notice delivered to the other Party in accordance with the terms hereof.17秘密文件Strictly Confidential10.协议的转让Assignment10.1乙方不得将其在本协议项下的权利与义务转让给第三方，除非事先征得甲方的书面同意。Without Party A's prior written consent, Party B shall not assign its rights and obligations under this Agreement to any third party.10.2乙方在此同意，甲方可以在其需要时向其他第三方转让其在本协议项下的权利和义务，并在该等转让发生时甲方仅需向乙方发出书面通知，并且无需再就该等转让征得乙方的同意。Party B agrees that Party A may assign its obligations and rights under this Agreement to any third party upon a prior written notice to Party Bbut without the consent of Party B.11.协议的分割性Severability如果本协议有任何一条或多条规定根据任何法律或法规在任何方面被裁定为无效、不合法或不可执行，本协议其余规定的有效性、合法性或可执行性不应因此在任何方面受到影响或损害。双方应通过诚意磋商，争取以法律许可以及双方期望的最大限度内有效的规定取代那些无效、不合法或不可执行的规定，而该等有效的规定所产生的经济效果应尽可能与那些无效、不合法或不能强制执行的规定所产生的经济效果相似。In the event that one or several of the provisions of this Agreement are found to be invalid, illegal or unenforceable in any aspect in accordance with anylaws or regulations, the validity, legality or enforceability of the remaining provisions of this Agreement shall not be affected or compromised in any aspect.The Parties shall strive in good faith to replace such invalid, illegal or unenforceable provisions with effective provisions that accomplish to the greatestextent permitted by law and the intentions of the Parties, and the economic effect of such effective provisions shall be as close as possible to the economiceffect of those invalid, illegal or unenforceable provisions.18秘密文件Strictly Confidential12.协议的修改、补充Amendments and Supplements双方可以书面协议方式对本协议作出修改和补充。经过双方签署的有关本协议的修改协议和补充协议是本协议组成部分，具有与本协议同等的法律效力。Any amendments and supplements to this Agreement shall be in writing. The amendment agreements and supplementary agreements that have beensigned by the Parties and that relate to this Agreement shall be an integral part of this Agreement and shall have the same legal validity as this Agreement.13.语言和副本Language and Counterparts本协议以中文和英文书就，一式二份，甲乙双方各持一份，具有同等效力；中英文版本如有冲突，应以中文版为准。This Agreement is written in both Chinese and English language in two copies, each Party having one copy with equal legal validity; in case there is anyconflict between the Chinese version and the English version, the Chinese version shall prevail.本页其余部分刻意留为空白The Remainder of this page is intentionally left blank19秘密文件Strictly Confidential有鉴于此，双方已使得经其授权的代表于文首所述日期签署了本独家业务合作协议并即生效，以昭信守。IN WITNESS WHEREOF, the Parties have caused their authorized representatives to execute this Exclusive Business Cooperation Agreement as of thedate first above written.甲方：中传天下信息科技（深圳）有限公司（盖章）Party A: Zhongchuan Tianxia Information Technology (Shenzhen) Co., Ltd.(Seal)签字：By: /s/ Hong Ting 姓名：洪婷Name: Hong Ting职务：总经理Title: General Manager20秘密文件Strictly Confidential有鉴于此，双方已使得经其授权的代表于文首所述日期签署了本独家业务合作协议并即生效，以昭信守。IN WITNESS WHEREOF, the Parties have caused their authorized representatives to execute this Exclusive Business Cooperation Agreement as of thedate first above written. 乙方：北京中传视讯科技有限公司（盖章）Party B: Beijing Mobile Vision Technology Co., Ltd. (Seal)签字：By: /s/ Song Xuesong 姓名：宋雪松Name: Song Xuesong职务：董事长Title: Chairman of the Board21秘密文件Strictly ConfidentialEX4.16 4 f20f2017ex416_luokung.htm EXCLUSIVE OPTION AGREEMENT BY AND AMONG ZHONGCHUAN TIANXIA INFORMATION TECHNOLOGY(SHENZHEN) CO., LTD., XUESONG SONG, WEILI CHEN, PING WANG, DONGLAI LIU, AND BEIJING MOBILE VISION TECHNOLOGY CO., LTD., DATEDAUGUST 31, 2015Exhibit 4.16独家购买权协议Exclusive Option Agreement本独家购买权协议 (下称“本协议”) 由以下各方于年月日在中华人民共和国（下称“中国”）北京签订：This Exclusive Option Agreement (this “Agreement”) is executed by and among the Parties below as of in Beijing, the People’s Republic of China (the“China” or “PRC”):甲方：中传天下信息科技（深圳）有限公司，一家依照中国法律设立和存在的外商独资企业，地址为深圳市南山区高新中三道2号深圳软件园一期五栋401A；Party A:Zhongchuan Tianxia Information Technology (Shenzhen) Co., Ltd., a whollyforeignowned enterprise organized and existing under the laws of China,with its address at 401A, Building 5, Phase 1, Shenzhen Software Park, No.2 Gaoxin Zhongsan Road, Nanshan District, Shenzhen.乙方：Party B:a)宋雪松Song Xuesong身份证号码:120112196809040417ID Card No.:120112196809040417住所：天津市河西区广东路中裕园33702Address:Zhongyu Yuan 33702, Guangdong Road, Hexi District, Tianjinb)陈蔚力Chen Weili身份证号码:120106197309240516ID Card No.:120106197309240516住所：广东省深圳市宝安区宝城上川路15号Address:Baocheng Shangchuan Road 15, Baoan District, Shenzhen, Guangdong1秘密文件Strictly Confidentialc)王平Wang Ping身份证号码:35020319691030401xID Card No.:35020319691030401x住所：广东省深圳市南山区高新南环路36号彩虹之岸12栋4AAddress:Caihong Zhi’an Building No.12 Suite 4A, Gaoxin Nanhuan Road 36, Nanshan District, Shenzhen, Guangdongd)刘东来Liu Donglai身份证号码:120107196810103912ID Card No.:120107196810103912住所：天津市和平区南京路诚基经贸中心1号楼2门1702号Address:No 1702, Door 2, Build 1, Chengji Economic and Trade Centre, Nanjing Road, Heping District, Tianjin.丙方：北京中传视讯科技有限公司，一家依照中国法律设立和存在的有限责任公司，地址为北京市朝阳区光华路9号SOHO3QLAB32，统一社会信用代码为9111010576215249XM；Party C:Beijing Mobile Vision Technology Co., Ltd., a limited company duly registered in China, with its address at LAB32, SOHO3Q, No 9, Guanghua Road,Chaoyang District, Beijing and its uniform social credit code of 9111010576215249XM.2秘密文件Strictly Confidential在本协议中，甲方、乙方和丙方以下各称“一方”，合称“各方”。In this Agreement, each of Party A, Party B and Party C shall be referred to as a “Party” respectively, and they shall be collectively referred to as the“Parties”.鉴于，乙方系丙方股东并合计持有丙方100%股权，乙方将按本协议之条款授予甲方购买全部或部分该股权的权利。Whereas, Party B are the shareholders of Party C and jointly hold 100% of the equity interest in Party C, and Party B are willing to grant to Party A the rightto acquire such equity interest, in whole or in part, on the terms herein.现各方协商一致，达成如下协议：Now therefore, upon mutual discussion and negotiation, the Parties have reached the following agreement:1.股权买卖Sale and Purchase of Equity Interest1.1授予权利Option Granted乙方在此不可撤销地授予甲方在中国法律允许的前提下，按照甲方自行决定的行使步骤，并按照本协议第1.3条所述的价格，随时一次或多次从乙方购买或指定一人或多人(“被指定人”)从乙方购买其目前和将来所持有的丙方的全部或部分股权（无论乙方出资额和/或持股比例将来是否发生变化）的一项不可撤销的专有权(“股权购买权”)。除甲方和被指定人外，任何第三人均不得享有股权购买权或其他与乙方股权有关的权利。丙方特此同意乙方向甲方授予股权购买权。本款及本协议所规定的“人”指个人、公司、合营企业、合伙、企业、信托或非公司组织。Party B hereby irrevocably grant Party A an irrevocable and exclusive right to purchase, or designate one or more persons (each, a “Designee”) topurchase the equity interests in Party C now and in the future held by Party B (regardless whether Party B’s capital contribution amount and/orpercentage of shareholding will be changed in the future) once or at multiple times at any time in part or in whole at Party A’s sole and absolutediscretion to the extent permitted by Chinese laws and at the price described in Section 1.3 herein (such right being the “Equity Interest PurchaseOption”). Except for Party A and the Designee(s), no other person shall be entitled to the Equity Interest Purchase Option or other rights withrespect to the equity interests of Party B. Party C hereby agrees to the grant by Party B of the Equity Interest Purchase Option to Party A. Theterm “person” as used herein shall refer to individuals, corporations, partnerships, partners, enterprises, trusts or noncorporate organizations.3秘密文件Strictly Confidential1.2行使步骤Steps for Exercise of Equity Interest Purchase Option甲方行使其股权购买权以符合中国法律和法规的规定为前提。甲方行使股权购买权时，应向乙方发出书面通知(“股权购买通知”)，股权购买通知应载明以下事项：(a)甲方关于行使股权购买权的决定；(b)甲方拟从乙方购买的股权份额(“被购买的股权”)；和(c)被购买的股权的买入日期。Subject to the provisions of the laws and regulations of China, Party A may exercise the Equity Interest Purchase Option by issuing a writtennotice to Party B (the “Equity Interest Purchase Option Notice”), specifying: (a) Party A’s decision to exercise the Equity Interest PurchaseOption; (b) the portion of equity interests to be purchased from Party B (the “Optioned Interests”); and (c) the date for purchasing the OptionedInterests.1.3股权买价Equity Interest Purchase Price被购买的股权的买价（“股权买价”）应是行权当时中国法律允许的最低价格。乙方收到该股权对价后，应当提供给丙方与该股权买价相同金额的借款，该借款的期限为20年，且为无息。乙方应当在该借款期限届满时就该借款放弃对丙方的债权。The purchase price of the Optioned Interests (the “Equity Interest Purchase Price”) shall be the lowest price permitted by the laws of China. Afterreceiving the Equity Interest Purchase Price, Party B shall make an interestfree loan equivalent to the amount of Equity Interest Purchase Price toParty C, of which term is 20 years. Each member of Party B shall give up his(her) creditor’s right when the loan term expires.4秘密文件Strictly Confidential1.4转让被购买股权Transfer of Optioned Interests甲方每次行使股权购买权时：For each exercise of the Equity Interest Purchase Option:1.4.1乙方应责成丙方及时召开股东会会议，在该会议上，应通过批准乙方向甲方和/或被指定人转让被购买的股权的决议；Party B shall cause Party C to promptly convene a shareholders meeting, at which a resolution shall be adopted approving Party B’stransfer of the Optioned Interests to Party A and/or the Designee(s);1.4.2乙方应就其向甲方和/或被指定人转让被购买股权取得丙方其他股东同意该转让并放弃优先购买权的书面声明。Party B shall obtain written statements from the other shareholder of Party C giving consent to the transfer of the equity interest to PartyA and/or the Designee(s) and waiving any right of first refusal related thereto.1.4.3乙方应与甲方和/或(在适用的情况下)被指定人按照本协议及股权购买通知的规定，为每次转让签订股权转让协议；Party B shall execute a share transfer contract with respect to each transfer with Party A and/or each Designee (whichever is applicable),in accordance with the provisions of this Agreement and the Equity Interest Purchase Option Notice regarding the Optioned Interests;5秘密文件Strictly Confidential1.4.4有关方应签署所有其他所需协议、协议或文件，取得全部所需的政府批准和同意，并采取所有所需行动，在不附带任何担保权益的情况下，将被购买的股权的有效所有权转移给甲方和/或被指定人并使甲方和/或被指定人成为被购买的股权的登记在册所有人。为本款及本协议的目的，“担保权益”包括担保、抵押、第三方权利或权益，任何购股权、收购权、优先购买权、抵销权、所有权扣留或其他担保安排等；但为了明确起见，不包括在本协议、乙方股权质押协议项下产生的任何担保权益。本款及本协议所规定的“乙方股权质押协议”指甲方、乙方和丙方于本协议签署之日签订的股权质押协议，根据股权质押协议，乙方为担保丙方能履行丙方与甲方签订的独家业务合作协议项下的义务，而向甲方质押其在丙方的全部乙方股权。The relevant Parties shall execute all other necessary contracts, agreements or documents, obtain all necessary government licenses andpermits and take all necessary actions to transfer valid ownership of the Optioned Interests to Party A and/or the Designee(s),unencumbered by any security interests, and cause Party A and/or the Designee(s) to become the registered owner(s) of the OptionedInterests. For the purpose of this Section and this Agreement, “security interests” shall include securities, mortgages, third party’s rightsor interests, any stock options, acquisition right, right of first refusal, right to offset, ownership retention or other security arrangements,but shall be deemed to exclude any security interest created by this Agreement and Party B’s Equity Interest Pledge Agreement. “PartyB’s Equity Interest Pledge Agreement” as used in this Section and this Agreement shall refer to the Equity Interest Pledge Agreementexecuted by and among Party A, Party B and Party C on the date of this Agreement, whereby Party B pledge all of their equity interests inParty C to Party A, in order to guarantee Party C’s performance of its obligations under the Exclusive Business Corporation Agreementexecuted by and between Party C and Party A.6秘密文件Strictly Confidential2.知识产权独家购买权Exclusive Option regarding the Intellectual Property Rights2.1本协议签订之日起，若乙方拟转让、出售或以其他方式处置（任一处置方式以下简称“转让”）其拥有或持有的全部或部分知识产权（以下称“知识产权”，定义见第2.4条），甲方有权独家购买该等知识产权。From the date hereof, if Party B proposes to transfer, sell or dispose of (each, a “transfer”) all or any part of the intellectual property rights ownedor held by Party B (“IPR”), Party A shall have exclusive option.2.2若乙方有意转让全部或部分知识产权，应事先向甲方发出书面通知(“转让通知”)，转让通知应载明以下事项：(a) 乙方关于转让知识产权的意向；(b) 乙方拟转让的知识产权清单(“拟转让知识产权”)及转让的价格和其他条件。转让通知视为乙方向甲方发出的一份要约，按照该要约，乙方同意按转让通知中指定的价格条件向甲方转让全部或部分拟转让知识产权。Prior to Party B proposes to transfer all or any part of its IPR, Party B shall give Party A a written notice (“Transfer Notice”), which shall specify (a)Party B’s intention to make the transfer; (b) the list of IPR to be transferred (“Offered IPR”) and the consideration and other conditions uponwhich the transfer is to be made. The Transfer Notice constitutes Party B’s offer given to Party A, pursuant to which, Party B agrees to transfer allor any part of its Offered IPR to Party A based on the same conditions described in the Transfer Notice.7秘密文件Strictly Confidential2.3甲方收到转让通知后，有权在30日内选择按照转让通知中列明的转让价格和条件购买拟转让知识产权。如果甲方行使其独家购买权，双方应于甲方收到转让通知后45日内签订有关的知识产权转让协议，乙方应办理法律规定的知识产权转让的批准和登记手续。Party A shall have an option for a period of 30 days from Party A’s receipt of the Transfer Notice to elect to purchase the Offered IPR at the sameprice and subject to the same conditions as described in the Transfer Notice. If Party A decides to exercise its exclusive option, the parties shallenter into relevant IPR transfer agreement within 45 days upon Party A’s receipt of the Transfer Notice and Party B is responsible to complete allrelated approvals and registrations formalities as prescribed by the PRC law.2.4本协议第2条所称“知识产权”指任何知识产权，包括但不限于著作权、专利权、专利申请权、商标、域名、软件、专有技术，并包括前述知识产权申请权利以及登记注册的权利，以及其他所有与前述知识产权有关的权利和权益。The “IPR” referred to in this Article 2 means any intellectual property rights, including, without limitations, copyrights, patents, patentapplications, trademarks, domain names, software and knowhow together with (a) all rights to apply for or register any of the foregoing and (b) allother rights and interests to any of the foregoing.8秘密文件Strictly Confidential3.承诺Covenants3.1有关丙方的承诺Covenants regarding Party C乙方（作为丙方的股东）和丙方在此承诺：Party B (as the shareholders of Party C) and Party C hereby covenant as follows:3.1.1未经甲方的事先书面同意，不以任何形式补充、更改或修改丙方公司章程文件，增加或减少其注册资本，或以其他方式改变其注册资本结构；Without the prior written consent of Party A, they shall not in any manner supplement, change or amend the articles of association andbylaws of Party C, increase or decrease its registered capital, or change its structure of registered capital in other manners;3.1.2按照良好的财务和商业标准及惯例，保持其公司的存续，审慎地及有效地经营其业务和处理事务；They shall maintain Party C’s corporate existence in accordance with good financial and business standards and practices by prudentlyand effectively operating its business and handling its affairs;3.1.3未经甲方的事先书面同意，不在本协议签署之日起的任何时间出售、转让、抵押或以其他方式处置丙方的任何资产、业务或收入的合法或受益权益，或允许在其上设置任何其他担保权益；Without the prior written consent of Party A, they shall not at any time following the date hereof, sell, transfer, mortgage or dispose of inany manner any assets of Party C or legal or beneficial interest in the business or revenues of Party C, or allow the encumbrance thereonof any security interest;3.1.4未经甲方的事先书面同意，不发生、继承、保证或容许存在任何债务，但(i)正常或日常业务过程中产生而不是通过借款方式产生的债务；和(ii)已向甲方披露和得到甲方书面同意的债务除外；Without the prior written consent of Party A, they shall not incur, inherit, guarantee or suffer the existence of any debt, except for (i)debts incurred in the ordinary course of business other than through loans; and (ii) debts disclosed to Party A for which Party A’swritten consent has been obtained;9秘密文件Strictly Confidential3.1.5一直在正常业务过程中经营所有业务，以保持丙方的资产价值，不进行任何足以影响其经营状况和资产价值的作为/不作为；They shall always operate all of Party C’s businesses during the ordinary course of business to maintain the asset value of Party C andrefrain from any action/omission that may affect Party C’s operating status and asset value;3.1.6未经甲方的事先书面同意，不得让丙方签订任何重大协议，但在正常业务过程中签订的协议除外(就本段而言，如果一份协议的价值超过【人民币10万元】，即被视为重大协议)；Without the prior written consent of Party A, they shall not cause Party C to execute any major contract, except the contracts in theordinary course of business (for purpose of this subsection, a contract with a value exceeding RMB 100,000 shall be deemed a majorcontract);3.1.7未经甲方的事先书面同意，丙方不得向任何人提供贷款或信贷；Without the prior written consent of Party A, they shall not cause Party C to provide any person with any loan or credit;3.1.8应甲方要求，向其提供所有关于丙方的营运和财务状况的资料；They shall provide Party A with information on Party C’s business operations and financial condition at Party A’s request;10秘密文件Strictly Confidential3.1.9如甲方提出要求，丙方应从甲方接受的保险公司处购买和持有有关其资产和业务的保险，该保险的金额和险种应与经营类似业务的公司一致；If requested by Party A, they shall procure and maintain insurance in respect of Party C’s assets and business from an insurance carrieracceptable to Party A, at an amount and type of coverage typical for companies that operate similar businesses;3.1.10未经甲方的事先书面同意，丙方不得与任何人合并或联合，或对任何人进行收购或投资；Without the prior written consent of Party A, they shall not cause or permit Party C to merge, consolidate with, acquire or invest in anyperson;3.1.11将发生的或可能发生的与丙方资产、业务或收入有关的诉讼、仲裁或行政程序立即通知甲方；They shall immediately notify Party A of the occurrence or possible occurrence of any litigation, arbitration or administrative proceedingsrelating to Party C’s assets, business or revenue;3.1.12为保持丙方对其全部资产的所有权，签署所有必要或适当的文件，采取所有必要或适当的行动和提出所有必要或适当的控告或对所有索偿进行必要和适当的抗辩；To maintain the ownership by Party C of all of its assets, they shall execute all necessary or appropriate documents, take all necessary orappropriate actions and file all necessary or appropriate complaints or raise necessary and appropriate defenses against all claims;11秘密文件Strictly Confidential3.1.13未经甲方事先书面同意，不得以任何形式派发股息予各股东，但一经甲方要求，丙方应立即将其所有可分配利润全部立即分配给其各股东；及Without the prior written consent of Party A, they shall ensure that Party C shall not in any manner distribute dividends to itsshareholders, provided that upon Party A’s written request, Party C shall immediately distribute all distributable profits to itsshareholders; and3.1.14根据甲方的要求，委任由其指定的任何人士出任丙方的董事和/或执行董事。At the request of Party A, they shall appoint any persons designated by Party A as the director and/or executive director of Party C.3.2乙方和丙方的承诺Covenants of Party B and Party C乙方承诺：Party B hereby covenant as follows:3.2.1未经甲方的事先书面同意，不出售、转让、抵押或以其他方式处置其拥有的丙方的股权的合法或受益权益，或允许在其上设置任何其他担保权益，但根据乙方签署的《股权质押协议》在该股权上设置的质押则除外；Without the prior written consent of Party A, Party B shall not sell, transfer, mortgage or dispose of in any other manner any legal orbeneficial interest in the equity interests in Party C held by Party B, or allow the encumbrance thereon of any security interest, except forthe pledge placed on these equity interests in accordance with Party B’s Equity Interest Pledge Agreement;12秘密文件Strictly Confidential3.2.2促使丙方股东会和/或执行董事不批准在未经甲方的事先书面同意的情况下，出售、转让、抵押或以其他方式处置任何乙方持有之丙方的股权的合法权益或受益权，或允许在其上设置任何其他担保权益，但批准根据乙方签署的《股权质押协议》在乙方股权上设置的质押则除外；Party B shall cause the shareholders’ meeting and/or the executive director of Party C not to approve the sale, transfer, mortgage ordisposition in any other manner of any legal or beneficial interest in the equity interests in Party C held by Party B, or allow theencumbrance thereon of any security interest, without the prior written consent of Party A, except for the pledge placed on these equityinterests in accordance with Party B’s Equity Interest Pledge Agreement;3.2.3未经甲方的事先书面同意的情况下，对于丙方与任何人合并或联合，或对任何人进行收购或投资，乙方将促成丙方股东会或执行董事不予批准；Party B shall cause the shareholders’ meeting or the executive director of Party C not to approve the merger or consolidation with anyperson, or the acquisition of or investment in any person, without the prior written consent of Party A;3.2.4将发生的或可能发生的任何关于其所拥有的股权的诉讼、仲裁或行政程序立即通知甲方；Party B shall immediately notify Party A of the occurrence or possible occurrence of any litigation, arbitration or administrativeproceedings relating to the equity interests in Party C held by Party B;13秘密文件Strictly Confidential3.2.5促使丙方股东会或执行董事表决赞成本协议规定的被购买的股权的转让并应甲方之要求采取其他任何行动；Party B shall cause the shareholders’ meeting or the executive director of Party C to vote their approval of the transfer of the OptionedInterests as set forth in this Agreement and to take any and all other actions that may be requested by Party A;3.2.6为保持其对股权的所有权，签署所有必要或适当的文件，采取所有必要或适当的行动和提出所有必要或适当的控告或对所有索偿进行必要和适当的抗辩；To the extent necessary to maintain Party B’s ownership in Party C, Party B shall execute all necessary or appropriate documents, take allnecessary or appropriate actions and file all necessary or appropriate complaints or raise necessary and appropriate defenses against allclaims;3.2.7应甲方的要求，委任由其指定的任何人士出任丙方的董事和/或执行董事；Party B shall appoint any designee of Party A as the director and/or executive director of Party C, at the request of Party A;3.2.8经甲方随时要求，应向其指定的代表在任何时间无条件地根据本协议的股权购买权立即转让其股权，并放弃其对其他现有股东进行上述股权转让所享有的优先购买权（如有的话）；和At the request of Party A at any time, Party B shall promptly and unconditionally transfer its equity interests in Party C to Party A’sDesignee(s) in accordance with the Equity Interest Purchase Option under this Agreement, and Party B hereby waives its right of firstrefusal (if any) to the share transfer by the other existing shareholder of Party C (if any); and14秘密文件Strictly Confidential3.2.9严格遵守本协议及各方共同或分别签订的其他协议的各项规定，切实履行该等协议项下的各项义务，并不进行任何足以影响该等协议的有效性和可执行性的作为/不作为。如果乙方对于本协议项下或乙方股权质押协议下或对甲方的授权委托书中的股权，还留存有任何权利，除非甲方书面指示，否则乙方仍不得行使该权利。Party B shall strictly abide by the provisions of this Agreement and other contracts jointly or separately executed by and among Party B,Party C and Party A, perform the obligations hereunder and thereunder, and refrain from any action/omission that may affect theeffectiveness and enforceability thereof. To the extent that Party B has any remaining rights with respect to the equity interests subject tothis Agreement hereunder or under Party B’s Equity Interest Pledge Agreement or under the Power of Attorney granted in favor of PartyA, Party B shall not exercise such rights except in accordance with the written instructions of Party A.4.陈述和保证Representations and Warranties乙方和丙方特此在本协议签署之日和每一个转让日向甲方共同及分别陈述和保证如下：Party B and Party C hereby represent and warrant to Party A, jointly and severally, as of the date of this Agreement and each date of transfer of theOptioned Interests, that:4.1其具有签订和交付本协议和其为一方的、根据本协议为每一次转让被购买的股权而签订的任何股权转让协议(各称为"转让协议")，并履行其在本协议和任何转让协议项下的义务的权力和能力。乙方和丙方同意在甲方行使购买权时，他们将签署与本协议条款一致的转让协议。本协议和其是一方的各转让协议一旦签署后，构成或将对其构成合法、有效及具有约束力的义务并可按照其条款对其强制执行；They have the authority to execute and deliver this Agreement and any share transfer contracts to which they are a party concerning theOptioned Interests to be transferred thereunder (each, a “Transfer Contracts”), and to perform their obligations under this Agreement and anyTransfer Contracts. Party B and Party C agree to enter into Transfer Contracts consistent with the terms of this Agreement upon Party A’s exerciseof the Equity Interest Purchase Option. This Agreement and the Transfer Contracts to which they are a party constitute or will constitute theirlegal, valid and binding obligations and shall be enforceable against them in accordance with the provisions thereof;15秘密文件Strictly Confidential4.2无论是本协议或任何转让协议的签署和交付还是其在本协议或任何转让协议项下的义务的履行均不会：(i)导致违反任何有关的中国法律；(ii)与丙方章程或其他组织文件相抵触；(iii)导致违反其是一方或对其有约束力的任何协议或文件，或构成其是一方或对其有约束力的任何协议或文件项下的违约；(iv)导致违反有关向任何一方颁发的任何许可或批准的授予和(或)继续有效的任何条件；或(v)导致向任何一方颁发的任何许可或批准中止或被撤销或附加条件；The execution and delivery of this Agreement or any Transfer Contracts and the obligations under this Agreement or any Transfer Contracts shallnot: (i) cause any violation of any applicable laws of China; (ii) be inconsistent with the articles of association, bylaws or other organizationaldocuments of Party C; (iii) cause the violation of any contracts or instruments to which they are a party or which are binding on them, orconstitute any breach under any contracts or instruments to which they are a party or which are binding on them; (iv) cause any violation of anycondition for the grant and/or continued effectiveness of any licenses or permits issued to either of them; or (v) cause the suspension orrevocation of or imposition of additional conditions to any licenses or permits issued to either of them;4.3乙方对其在丙方拥有的股权拥有良好和可出售的所有权，除乙方签署的《股权质押协议》外，乙方在上述股权上没有设置任何担保权益；Party B have a good and merchantable title to the equity interests in Party C they hold. Except for Party B’s Equity Interest Pledge Agreement,Party B have not placed any security interest on such equity interests;16秘密文件Strictly Confidential4.4目前没有悬而未决的或构成威胁的与丙方的股权、丙方资产有关的或与丙方有关的诉讼、仲裁或行政程序。There are no pending or threatened litigation, arbitration or administrative proceedings relating to the equity interests in Party C, assets of Party Cor Party C.5.生效日Effective Date5.1本协议于各方签署本协议之日生效，有效期10年，经甲方选择可再延长10年。This Agreement shall become effective upon the date hereof, and remain effective for a term of 10 years, and may be renewed for an additional 10years at Party A’s election.5.2若丙方股东发生变化，由新股东签署此协议，在此协议签署之日，原协议自动视为无效。In the event of a change in the shareholders of Party C, the new shareholder should sign this agreement and the original agreement willautomatically be deemed invalid on the date of signing of this agreement.17秘密文件Strictly Confidential6.适用法律与争议解决Governing Law and Resolution of Disputes6.1适用法律Governing law本协议的订立、效力、解释、履行、修改和终止以及争议解决均适用中国正式公布并可公开得到的法律。对中国正式公布并可公开得到的法律没有规定的事项，将适用国际法律原则和惯例。The execution, effectiveness, construction, performance, amendment and termination of this Agreement and the resolution of disputes hereundershall be governed by the formally published and publicly available laws of China. Matters not covered by formally published and publiclyavailable laws of China shall be governed by international legal principles and practices.6.2争议的解决方法Methods of Resolution of Disputes因解释和履行本协议而发生的任何争议，本协议各方应首先通过友好协商的方式加以解决。如果在一方向其他方发出要求协商解决的书面通知后30天之内争议仍然得不到解决，则任何一方均可将有关争议提交给中国国际经济贸易仲裁委员会，由该会按照其届时有效的仲裁规则仲裁解决。仲裁应在北京进行，使用之语言为中文。仲裁裁决是终局性的，对各方均有约束力。In the event of any dispute with respect to the construction and performance of this Agreement, the Parties shall first resolve the dispute throughfriendly negotiations. In the event the Parties fail to reach an agreement on the dispute within 30 days after either Party’s request to the otherParties for resolution of the dispute through negotiations, either Party may submit the relevant dispute to the China International Economic andTrade Arbitration Commission for arbitration, in accordance with its then effective arbitration rules. The arbitration shall be conducted in Beijing,and the language used in arbitration shall be Chinese. The arbitration award shall be final and binding on all Parties.18秘密文件Strictly Confidential7.税款、费用Taxes and Fees每一方应承担根据中国法律因准备和签署本协议和各转让协议以及完成本协议和各转让协议拟定的交易而由该方发生的或对其征收的任何和全部的转让和注册的税、花费和费用。Each Party shall pay any and all transfer and registration tax, expenses and fees incurred thereby or levied thereon in accordance with the laws of China inconnection with the preparation and execution of this Agreement and the Transfer Contracts, as well as the consummation of the transactionscontemplated under this Agreement and the Transfer Contracts.8.通知Notices8.1本协议项下要求或发出的所有通知和其他通信应通过专人递送、挂号邮寄、邮资预付或商业快递服务或传真的方式发到该方下列地址。每一通知还应再以电子邮件送达。该等通知视为有效送达的日期按如下方式确定：All notices and other communications required or permitted to be given pursuant to this Agreement shall be delivered personally or sent byregistered mail, postage prepaid, by a commercial courier service or by facsimile transmission to the address of such Party set forth below. Aconfirmation copy of each notice shall also be sent by email. The dates on which notices shall be deemed to have been effectively given shall bedetermined as follows:8.1.1通知如果是以专人递送、快递服务或挂号邮寄、邮资预付发出的，则以于设定为通知的地址在接收或拒收之日为有效送达日。Notices given by personal delivery, by courier service or by registered mail, postage prepaid, shall be deemed effectively given on thedate of receipt or refusal at the address specified for notices.19秘密文件Strictly Confidential8.1.2通知如果是以传真发出的，则以成功传送之日为有效送达日（应以自动生成的传送确认信息为证）。Notices given by facsimile transmission shall be deemed effectively given on the date of successful transmission (as evidenced by anautomatically generated confirmation of transmission).8.2为通知的目的，各方地址如下：For the purpose of notices, the addresses of the Parties are as follows:甲方：中传天下信息科技（深圳）有限公司Party A:Zhongchuan Tianxia Information Technology (Shenzhen) Co., Ltd.地址：深圳市南山区高新中三道2号深圳软件园一期五栋401AAddress:401A, Building 5, Phase 1, Shenzhen Software Park, No.2 Gaoxin Zhongsan Road, Nanshan District, Shenzhen.收件人：洪婷Attn:Hong Ting乙方：Party B: 宋雪松Song Xuesong住所：天津市河西区广东路中裕园33702Address:Zhongyu Yuan 33702, Guangdong Road, Hexi District, Tianjin20秘密文件Strictly Confidential陈蔚力Chen Weili住所：广东省深圳市宝安区宝城上川路15号Address:Baocheng Shangchuan Road 15, Baoan District, Shenzhen, Guangdong王平Wang Ping住所：广东省深圳市南山区高新南环路36号彩虹之岸12栋4AAddress:Caihong Zhi’an Building No.12 Suite 4A, Gaoxin Nanhuan Road 36, Nanshan District, Shenzhen, Guangdong刘东来Liu Donglai住所：天津市和平区南京路诚基经贸中心1号楼2门1702号Address:No 1702, Door 2, Build 1, Chengji Economic and Trade Centre, Nanjing Road, Heping District, Tianjin.丙方：北京中传视讯科技有限公司Party C:Beijing Mobile Vision Technology Co., Ltd.地址：北京市朝阳区光华路9号SOHO3QLAB32Address: LAB32, SOHO3Q, No 9, Guanghua Road, Chaoyang District, Beijing .收件人：宋雪松Attn: Song Xuesong8.3任何一方可按本条规定随时给其他方发出通知来改变其接收通知的地址。Any Party may at any time change its address for notices by a notice delivered to the other Parties in accordance with the terms hereof.21秘密文件Strictly Confidential9.保密责任Confidentiality各方承认及确定彼此就有关本协议而交换的任何口头或书面资料均属机密资料。各方应当对所有该等资料予以保密，而在未得其他方书面同意前，不得向任何第三者披露任何有关资料，惟下列情况除外：(a)公众人士知悉或将会知悉该等资料(并非由接受资料之一方擅自向公众披露)；(b)适用法律法规或股票交易的规则或规例所需披露之资料；或(c)由任何一方就本协议所述交易而需向其法律或财务顾问披露之资料而该法律或财务顾问亦需遵守与本条款相类似之保密责任。如任何一方工作人员或聘请机构的泄密均视为该方的泄密，需依本协议承担违约责任。无论本协议以任何理由终止，本条款仍然生效。The Parties acknowledge that any oral or written information exchanged among them with respect to this Agreement is confidential information. Each Partyshall maintain the confidentiality of all such information, and without obtaining the written consent of other Parties, it shall not disclose any relevantinformation to any third parties, except in the following circumstances: (a) such information is or will be in the public domain (provided that this is not theresult of a public disclosure by the receiving party); (b) information disclosed as required by applicable laws or rules or regulations of any stock exchange;or (c) information required to be disclosed by any Party to its legal counsel or financial advisor regarding the transaction contemplated hereunder, and suchlegal counsel or financial advisor are also bound by confidentiality duties similar to the duties in this section. Disclosure of any confidential information bythe staff members or agency hired by any Party shall be deemed disclosure of such confidential information by such Party, which Party shall be held liablefor breach of this Agreement. This Section shall survive the termination of this Agreement for any reason.22秘密文件Strictly Confidential10.进一步保证Further Warranties各方同意迅速签署为执行本协议的各项规定和目的而合理需要的或对其有利的文件，以及为执行本协议的各项规定和目的而采取合理需要的或对其有利的进一步行动。The Parties agree to promptly execute documents that are reasonably required for or are conducive to the implementation of the provisions and purposes ofthis Agreement and take further actions that are reasonably required for or are conducive to the implementation of the provisions and purposes of thisAgreement.11.其他Miscellaneous11.1修订、修改与补充Amendment, change and supplement对本协议作出修订、修改与补充，必须经每一方签署书面协议。Any amendment, change and supplement to this Agreement shall require the execution of a written agreement by all of the Parties.11.2完整协议Entire agreement除了在本协议签署后所作出的书面修订、补充或修改以外，本协议构成本协议各方就本协议标的物所达成的完整协议，取代在此之前就本协议标的物所达成的所有口头或书面的协商、陈述和协议。 Except for the amendments, supplements or changes in writing executed after theexecution of this Agreement, this Agreement shall constitute the entire agreement reached by and among the Parties hereto with respect to thesubject matter hereof, and shall supercede all prior oral and written consultations, representations and contracts reached with respect to thesubject matter of this Agreement.23秘密文件Strictly Confidential11.3标题Headings本协议的标题仅为方便阅读而设，不应被用来解释、说明或在其他方面影响本协议各项规定的含义。The headings of this Agreement are for convenience only, and shall not be used to interpret, explain or otherwise affect the meanings of theprovisions of this Agreement.11.4语言Language本协议以中文和英文书就，一式八份，乙方共计六名股东以及甲方、丙方各持一份，具有同等效力；中英文版本如有冲突，应以中文版为准。This Agreement is written in both Chinese and English language in eight copies, the 6 shareholders of Party B, Party A and Party C having onecopy with equal legal validity respectively; in case there is any conflict between the Chinese version and the English version, the Chinese versionshall prevail.11.5可分割性Severability如果本协议有任何一条或多条规定根据任何法律或法规在任何方面被裁定为无效、不合法或不可执行，本协议其余规定的有效性、合法性或可执行性不应因此在任何方面受到影响或损害。各方应通过诚意磋商，争取以法律许可以及各方期望的最大限度内有效的规定取代那些无效、不合法或不可执行的规定，而该等有效的规定所产生的经济效果应尽可能与那些无效、不合法或不能强制执行的规定所产生的经济效果相似。In the event that one or several of the provisions of this Agreement are found to be invalid, illegal or unenforceable in any aspect in accordancewith any laws or regulations, the validity, legality or enforceability of the remaining provisions of this Agreement shall not be affected orcompromised in any respect. The Parties shall strive in good faith to replace such invalid, illegal or unenforceable provisions with effectiveprovisions that accomplish to the greatest extent permitted by law and the intentions of the Parties, and the economic effect of such effectiveprovisions shall be as close as possible to the economic effect of those invalid, illegal or unenforceable provisions.24秘密文件Strictly Confidential11.6继任者Successors本协议对各方各自的继任者和各方所允许的受让方应具有约束力并对其有利。This Agreement shall be binding on and shall inure to the interest of the respective successors of the Parties and the permitted assigns of suchParties.11.7继续有效Survival11.7.1协议期满或提前终止前因本协议而发生的或到期的任何义务在本协议期满或提前终止后继续有效。Any obligations that occur or that are due as a result of this Agreement upon the expiration or early termination of this Agreement shallsurvive the expiration or early termination thereof.11.7.2本协议第5、6、9条和本第11.7条的规定在本协议终止后继续有效。The provisions of Articles 5, 6, 9 and this Section 11.7 shall survive the termination of this Agreement.25秘密文件Strictly Confidential11.8弃权Waivers任何一方可以对本协议的条款和条件作出弃权，但必须经书面作出并经各方签字。一方在某种情况下就其他方的违约所作的弃权不应被视为该方在其他情况下就类似的违约已经对其他方作出弃权。Any Party may waive the terms and conditions of this Agreement, provided that such a waiver must be provided in writing and shall require thesignatures of the Parties. No waiver by any Party in certain circumstances with respect to a breach by other Parties shall operate as a waiver bysuch a Party with respect to any similar breach in other circumstances.本页其余部分刻意留为空白The Remainder of this page is intentionally left blank26秘密文件Strictly Confidential有鉴于此，各方已自行或使得其各自授权代表于文首所载日期签署本独家购买权协议。IN WITNESS WHEREOF, the Parties have executed, or caused their respective duly authorized representatives to execute, this Exclusive Option Agreement as ofthe date first above written.甲方：中传天下信息科技（深圳）有限公司（盖章）Party A: Zhongchuan Tianxia Information Technology (Shenzhen) Co., Ltd. (Seal)签字：By:/s/ Hong Ting姓名：洪婷Name: Hong Ting职务：总经理Title: General Manager秘密文件 Strictly Confidential有鉴于此，各方已自行或使得其各自授权代表于文首所载日期签署本独家购买权协议。IN WITNESS WHEREOF, the Parties have executed, or caused their respective duly authorized representatives to execute, this Exclusive Option Agreement as ofthe date first above written.乙方：Party B:宋雪松Song Xuesong签字：By:/s/ Song Xuesong秘密文件 Strictly Confidential有鉴于此，各方已自行或使得其各自授权代表于文首所载日期签署本独家购买权协议。IN WITNESS WHEREOF, the Parties have executed, or caused their respective duly authorized representatives to execute, this Exclusive Option Agreement as ofthe date first above written.乙方：Party B:陈蔚力Chen Weili签字：By:/s/ Chen Weili秘密文件 Strictly Confidential有鉴于此，各方已自行或使得其各自授权代表于文首所载日期签署本独家购买权协议。IN WITNESS WHEREOF, the Parties have executed, or caused their respective duly authorized representatives to execute, this Exclusive Option Agreement as ofthe date first above written.乙方：Party B:王平Wang Ping签字：By:/s/ Wang Ping秘密文件 Strictly Confidential有鉴于此，各方已自行或使得其各自授权代表于文首所载日期签署本独家购买权协议。IN WITNESS WHEREOF, the Parties have executed, or caused their respective duly authorized representatives to execute, this Exclusive Option Agreement as ofthe date first above written.乙方：Party B:刘东来Liu Donglai签字：By:/s/ Liu Donglai秘密文件 Strictly Confidential有鉴于此，各方已自行或使得其各自授权代表于文首所载日期签署本独家购买权协议。IN WITNESS WHEREOF, the Parties have executed, or caused their respective duly authorized representatives to execute, this Exclusive Option Agreement as ofthe date first above written.丙方：北京中传视讯科技有限公司（盖章）Party B: Beijing Mobile Vision Technology Co., Ltd. (Seal)签字：By:/s/ Song Xuesong姓名：宋雪松Name:Song Xuesong职务：董事长Title:Chairman of the Board秘密文件 Strictly ConfidentialEX4.17 5 f20f2017ex417_luokung.htm EQUITY INTEREST PLEDGE AGREEMENT BY AND AMONG ZHONGCHUAN TIANXIA INFORMATION TECHNOLOGY(SHENZHEN) CO., LTD., XUESONG SONG, WEILI CHEN, PING WANG, DONGLAI LIU, AND BEIJING MOBILE VISION TECHNOLOGY CO., LTD., DATEDAUGUST 31, 2015Exhibit 4.17股权质押协议Equity Interest Pledge Agreement本股权质押协议（下称"本协议”）由下列各方于年月日在中华人民共和国（下称“中国”）北京签订：This Equity Interest Pledge Agreement (this "Agreement") has been executed by and among the following parties on in Beijing, the People’sRepublic of China (the “China” or “PRC”):甲方：中传天下信息科技（深圳）有限公司（下称“质权人”）Party A: Zhongchuan Tianxia Information Technology (Beijing) Co., Ltd. (“Pledgee”)地址：深圳市南山区高新中三道2号深圳软件园一期五栋401AAddress: 401A, Building 5, Phase 1, Shenzhen Software Park, No.2 Gaoxin Zhongsan Road, Nanshan District, Shenzhen统一社会信用代码： 91440300565701058RUniform Social Credit Code: 91440300565701058R乙方(下称“出质人”)：Party B ( “Pledgors”):a)宋雪松Song Xuesong身份证号码:ID Card No.:b)陈蔚力Chen Weili身份证号码:ID Card No.:1秘密文件 Strictly Confidentialc)王平Wang Ping身份证号码:ID Card No.:d)刘东来Liu Donglai身份证号码:ID Card No.:丙方：北京中传视讯科技有限公司Party C: Beijing Mobile Vision Technology Co., Ltd.地址：北京市朝阳区光华路9号SOHO3QLAB32Address: LAB32, SOHO3Q, No 9, Guanghua Road, Chaoyang District, Beijing统一社会信用代码：9111010576215249XMUniform Social Credit Code: 9111010576215249XM在本协议中，质权人、出质人和丙方以下各称“一方”，合称“各方”。In this Agreement, each of Pledgee, Pledgors and Party C shall be referred to as a "Party" respectively, and they shall be collectively referred to as the"Parties".鉴于：Whereas:1．出质人全部为中国境内居民自然人，共同持有丙方100%的股权。丙方是一家在中国注册成立的、主要从事手机视频技术研发、内容制作和产业化市场推广的有限责任公司。丙方有意在此确认出质人和质权人在本协议下的权利和义务并提供必要的协助登记该质权；All of the Pledgors are natural persons resided in PRC, and collectively hold 100% of the equity interest in Party C. Party C is a limited company registered inChina, mainly engaging in mobile video frequency technology research, development, content creation, sale and related industrialization promotion. Party Cacknowledges the respective rights and obligations of Pledgors and Pledgee under this Agreement, and intends to provide any necessary assistance inregistering the Pledge;2．质权人是一家在中国注册的外商独资企业。质权人与丙方于年月日签订了独家业务合作协议；Pledgee is a whollyforeignowned enterprise registered in China. Pledgee and Party C have executed an Exclusive Business Cooperation Agreement as of [*],[*];3．为了保证丙方全面履行独家业务合作协议项下的义务，出质人以其拥有的全部丙方股权向质权人做出质押担保。To ensure that Party C fully performs its obligations under the Exclusive Business Cooperation Agreement, Pledgors hereby pledge to the Pledgee all of theequity interests they hold in Party C.为了履行业务合作协议的条款，各方商定按照以下条款签订本协议。To perform the provisions of the Business Cooperation Agreement, the Parties have mutually agreed to execute this Agreement upon the following terms.2秘密文件 Strictly Confidential1.定义Definitions除非本协议另有规定，下列词语含义为：Unless otherwise provided herein, the terms below shall have the following meanings:1.1质权：指出质人根据本协议第2条给予质权人的担保物权，即指质权人所享有的，以出质人质押给质权人的股权折价或拍卖、变卖该股权的价款优先受偿的权利。Pledge: shall refer to the security interest granted by Pledgors to Pledgee pursuant to Article 2 of this Agreement, i.e., the right of Pledgee to becompensated on a preferential basis with the conversion, auction or sales price of the Equity Interest.1.2股权：指出质人现在和将来（通过增资和/或转股）合法持有的其在丙方的全部股权权益。Equity Interest: shall refer to all of the equity interest in Party C lawfully, held now and to be held (through capital increase and/or equity transfer)hereafter by Pledgors.1.3质押期限：指本协议第3条规定的期间。Term of Pledge: shall refer to the term set forth in Article 3 of this Agreement.1.4业务合作协议：指丙方与质权人于本协议日签订的独家业务合作协议。Business Cooperation Agreement: shall refer to the Exclusive Business Cooperation Agreement executed by and between Party C and Pledgee on thedate of this Agreement.1.5违约事件：指本协议第7条所列任何情况。Event of Default: shall refer to any of the circumstances set forth in Article 7 of this Agreement.1.6违约通知：指质权人根据本协议发出的宣布违约事件的通知。Notice of Default: shall refer to the notice issued by Pledgee in accordance with this Agreement declaring an Event of Default.3秘密文件 Strictly Confidential2.质权The Pledge作为丙方按时和全额支付业务合作协议项下质权人应得的任何或全部的款项，包括但不限于业务合作协议中规定的咨询和服务费的担保（无论该等费用的到期应付是由于到期日的到来、提前收款的要求或其它原因），以及丙方充分履行其在业务合作协议项下其他所有义务（丙方按时和全额支付业务合作协议项下甲方应得的任何或全部的款项及丙方在业务合作协议项下其他所有义务，以下统称为“被担保债务”）的担保，出质人特此将其现有或将拥有的丙方的全部股权权益质押给质权人。As collateral security for the timely and complete payment and performance when due (whether at stated maturity, by acceleration or otherwise) of any or all ofthe payments due (the “all payments in pledge”) by Party C, including without limitation the consulting and services fees payable to the Pledgee under theBusiness Cooperation Agreement, Pledgors hereby pledge to Pledgee a first security interest in all of Pledgors’ right, title and interest, whether now owned orhereafter acquired by Pledgors, in the Equity Interest of Party C.3.质押期限Term of Pledge3.1本质权自本协议项下的股权出质在相应的工商行政管理机关登记之日起生效，质权有效期持续到业务合作协议下所有丙方欠付质权人的款项结清为止。出质人和丙方应（一）自本协议签署之日起3个工作日内，将本协议的质权登记在丙方股东名册上，并（二）自本协议签署之日起10个工作日内向相应的工商行政管理机关申请登记本协议项下的质权。各方共同确认，为办理股权质押工商登记手续，各方及丙方其他股东应按照丙方所在地工商行政管理部门要求的形式签署、真实反映本协议项下质权信息的《股权质押合同》（以下简称“工商登记质押合同”）提交给工商管理机关，工商登记质押合同中未约定事项，仍以本协议约定为准。出质人和丙方应当按照中国法律法规和有关工商行政管理机关的各项要求，提交所有必要的文件并办理所有必要手续，保证质权在递交申请后尽快获得登记。如果出质人持有的丙方注册资本数额增加（不管是通过直接认缴丙方的增资还是从其他股东处受让股权），各方一致同意将采取一切必要的行动和签署一切必要的文件以按照登记机关的要求完成质权的变更登记，以确保本协议项下的质权的持续有效。The Pledge shall become effective on such date when the pledge of the Equity Interest contemplated herein has been registered’ with relevantadministration for industry and commerce (the “AIC”). The Pledge shall be continuously valid until all payments due under the Business CooperationAgreement have been fulfilled by Party C. Pledgors and Party C shall (1) register the Pledge in the shareholders' register of Party C within 3 businessdays following the execution of this Agreement, and (2) submit an application to the AIC for the registration of the Pledge of the Equity Interestcontemplated herein within 10 business days following the execution of this Agreement. The parties covenant that for the purpose of registration of thePledge, the parties hereto and all other shareholders of Party C shall submit to the AIC the Equity Interest Pledge Contract in the form required by theAIC at the location of Party C which shall truly reflect the information of the Pledge hereunder (the “AIC Pledge Contract”). For matters not specified inthe AIC Pledge Contract, the parties shall be bound by the provisions of this Agreement. Pledgors and Party C shall submit all necessary documentsand complete all necessary procedures, as required by the PRC laws and regulations and the relevant AIC, to ensure that the Pledge of the EquityInterest shall be registered with the AIC as soon as possible after filing. In the event that the amount of registered capital held by Pledgors is increased(either by subscribing increased registered capital from Party C or acquiring equity interest from other shareholders), the Parties hereto agree that theyshall take any necessary action and execute any necessary document to complete the registration of change of Pledge according to the requirement ofAIC so that the Pledge in this Agreement remains effective.4秘密文件 Strictly Confidential3.2质押期限内，如丙方未按业务合作协议交付咨询服务费等费用，质权人有权但无义务按本协议的规定处分质权。During the Term of Pledge, in the event Party C fails to pay the exclusive consulting or service fees in accordance with the Business CooperationAgreement, Pledgee shall have the right, but not the obligation, to dispose of the Pledge in accordance with the provisions of this Agreement.4.质权凭证的保管Custody of Records for Equity Interest subject to Pledge4.1在本协议规定的质押期限内，出质人应将其在丙方的股权出资证明书及记载质权的股东名册交付质权人保管。出质人应在本协议签订之日起一周内将上述股权出资证明书及股东名册交付给质权人。质权人将在本协议规定的全部质押期间一直保管这些项目。During the Term of Pledge set forth in this Agreement, Pledgors shall deliver to Pledgee's custody the capital contribution certificate for the EquityInterest and the shareholders' register containing the Pledge within one week from the execution of this Agreement. Pledgee shall have custody of suchitems during the entire Term of Pledge set forth in this Agreement.4.2在质押期限内，股权所产生的红利应当无条件归质权人所有。Dividends generated by the Equity Interest shall be unconditionally owned by the Pledgee during the Term of Pledge.5秘密文件 Strictly Confidential5.出质人的声明和保证Representations and Warranties of Pledgors5.1出质人是股权唯一的合法所有人。Pledgors are the sole legal and beneficial owners of the Equity Interest.5.2质权人有权以本协议规定的方式处分并转让股权。Pledgee shall have the right to dispose of and transfer the Equity Interest in accordance with the provisions set forth in this Agreement.5.3除本质权之外，出质人未在股权上设置任何其他质押权利或其他担保权益。Except for the Pledge, Pledgors have not placed any security interest or other encumbrance on the Equity Interest.6.出质人的承诺和确认Covenants and Further Agreements of Pledgors6.1在本协议存续期间，所有出质人向质权人承诺，出质人将：All of the Pledgors hereby covenant to the Pledgee, that during the term of this Agreement, Pledgors shall:6.1.1除履行由出质人与质权人、丙方于本协议签署日签订的《独家购买权合同》外，未经质权人事先书面同意，不得转让股权，不得在股权上设立或允许存在任何担保或其他债务负担；not transfer the Equity Interest, place or permit the existence of any security interest or other encumbrance on the Equity Interest, without theprior written consent of Pledgee, except for the performance of the Exclusive Option Agreement executed by Pledgors, the Pledgee and Party Con the execution date of this Agreement;6秘密文件 Strictly Confidential6.1.2遵守并执行所有有关权利质押的法律、法规的规定，在收到有关主管机关就质权发出或制定的通知、指令或建议时，于五日内向质权人出示上述通知、指令或建议，同时遵守上述通知、指令或建议，或按照质权人的合理要求或经质权人同意就上述事宜提出反对意见和陈述；comply with the provisions of all laws and regulations applicable to the pledge of rights, and within 5 days of receipt of any notice, order orrecommendation issued or prepared by relevant competent authorities regarding the Pledge, shall present the aforementioned notice, order orrecommendation to Pledgee, and shall comply with the aforementioned notice, order or recommendation or submit objections andrepresentations with respect to the aforementioned matters upon Pledgee's reasonable request or upon consent of Pledgee;6.1.3将任何可能导致对出质人股权或其任何部分的权利产生影响的事件或收到的通知，以及可能改变出质人在本协议中的任何保证、义务或对出质人履行其在本协议中义务可能产生影响的任何事件或收到的通知及时通知质权人。promptly notify Pledgee of any event or notice received by Pledgors that may have an impact on Pledgee's rights to the Equity Interest or anyportion thereof, as well as any event or notice received by Pledgors that may have an impact on any guarantees and other obligations ofPledgors arising out of this Agreement.6.2出质人同意，质权人按本协议条款取得的对质权享有的权利，不应受到出质人或出质人的继承人或出质人之委托人或任何其他人通过法律程序的中断或妨害。Pledgors agree that the rights acquired by Pledgee in accordance with this Agreement with respect to the Pledge shall not be interrupted or harmed byPledgors or any heirs or representatives of Pledgors or any other persons through any legal proceedings.7秘密文件 Strictly Confidential6.3出质人向质权人保证，为保护或完善本协议对偿付业务合作协议项下被担保债务的担保，出质人将诚实签署、并促使其他与质权有利害关系的当事人签署质权人所要求的所有的权利证书、契约和/或履行并促使其他有利害关系的当事人履行质权人所要求的行为，并为本协议赋予质权人之权利、授权的行使提供便利，与质权人或其指定的人(自然人/法人)签署所有的有关股权所有权的文件，并在合理期间内向质权人提供其认为需要的所有的有关质权的通知、命令及决定。To protect or perfect the security interest granted by this Agreement for payment of all payment in pledge under the Business Cooperation Agreement,Pledgors hereby undertake to execute in good faith and to cause other parties who have an interest in the Pledge to execute all certificates, agreements,deeds and/or covenants required by Pledgee. Pledgors also undertake to perform and to cause other parties who have an interest in the Pledge toperform actions required by Pledgee, to facilitate the exercise by Pledgee of its rights and authority granted thereto by this Agreement, and to enter intoall relevant documents regarding ownership of Equity Interest with Pledgee or designee(s) of Pledgee (natural persons/legal persons). Pledgorsundertake to provide Pledgee within a reasonable time with all notices, orders and decisions regarding the Pledge that are required by Pledgee.6.4出质人向质权人保证，出质人将遵守、履行本协议项下所有的保证、承诺、协议、陈述及条件。如出质人不履行或不完全履行其保证、承诺、协议、陈述及条件，出质人应赔偿质权人由此遭受的一切损失。Pledgors hereby undertake to comply with and perform all guarantees, promises, agreements, representations and conditions under this Agreement. Inthe event of failure the whole or partial performance of its guarantees, promises, agreements, representations and conditions, Pledgors shall indemnifyPledgee for all losses resulting therefrom.8秘密文件 Strictly Confidential7.违约事件Event of Default7.1下列事项均被视为违约事件：The following circumstances shall be deemed Event of Default:7.1.1丙方未能按期、完整履行任何业务合作协议项下责任，包括但不限于丙方未能按期足额支付业务合作协议项下的应付的被担保债务或有违反该协议其他义务的行为；Party C fails to fully and timely fulfill any liabilities under the Business Cooperation Agreement, including without limitation failure to pay infull any of the all payment in pledge payable under the Business Cooperation Agreement or breaches any other obligations of Party Cthereunder;7.1.2出质人或丙方实质违反本协议的任何条款；Pledgors or Party C have committed a material breach of any provisions of this Agreement;7.1.3除本协议第6.1.1条的约定外，出质人舍弃出质的股权或未获得质权人书面同意而擅自转让或意图转让出质的股权；和Except as expressly stipulated in Section 6.1.1, Pledgors transfers or purports to transfer or abandons the Equity Interest pledged or assignsthe Equity Interest pledged without the written consent of Pledgee; and7.1.4丙方的继承人或代管人只能履行部分或拒绝履行业务合作协议项下的支付责任。The successor or custodian of Party C is capable of only partially perform or refuses to perform the payment obligations under the BusinessCooperation Agreement.9秘密文件 Strictly Confidential7.2如知道或发现本第7.1条所述的任何事项或可能导致上述事项的事件已经发生，出质人应立即以书面形式通知质权人。Upon notice or discovery of the occurrence of any circumstances or event that may lead to the aforementioned circumstances described in Section 7.1,Pledgors shall immediately notify Pledgee in writing accordingly.7.3除非第7.1部分下的违约事件在质权人向出质人发出要求其修补此违约行为通知后的二十（20）天之内已经按质权人要求获得救济，质权人在其后的任何时间，可向出质人发出书面违约通知，要求依据第8部分履行其处理股权的权利。Unless an Event of Default set forth in this Section 7.1 has been successfully resolved to Pledgee's satisfaction within twenty (20) days after the Pledgeedelivers a notice to the Pledgors requesting ratification of such Event of Default, Pledgee may issue a Notice of Default to Pledgors in writing at any timethereafter, demanding the Pledgors to immediately dispose of the Pledge in accordance with the provisions of Article 8 of this Agreement.8.质权的行使Exercise of Pledge8.1在被担保债务被全部清偿或履行前，未经质权人书面同意，出质人不得转让本质权和其拥有的丙方股权。Prior to the full payment of all payments in pledge, without the Pledgee's written consent, Pledgors shall not assign the Pledge or the Equity Interest inParty C.8.2在质权人行使其质押权利时，质权人可以向出质人发出书面违约通知。Pledgee may issue a Notice of Default to Pledgors when exercising the Pledge.10秘密文件 Strictly Confidential8.3在质权人行使其质押权利时，根据中国有关法律的规定，质权人有权按照法定程序处置质押股权。仅在中国法律允许的范围内，对于处置的所得，质权人无需给付出质人；除非中国法律另有规定，出质人特此放弃其可能有的能向质权人要求任何质押股权处置所得的权利；同样，出质人对质权人在该质押股权处置后的亏损也不承担任何义务。When the Pledgor exercises the pledge right, Pledgee is entitled to dispose of the Equity Interest pledged in accordance with applicable PRC laws. Onlyto the extent permitted under applicable PRC laws, Pledgee has no obligation to account to Pledgors for proceeds of disposition of the Equity Interest.Unless otherwise required by PRC laws, Pledgors hereby waive any rights it may have to demand any such accounting from Pledgee; Likewise, in suchcircumstance Pledgors shall have no obligation to Pledgee for any deficiency remaining after such disposition of the Equity Interest pledged.8.4质权人依照本协议处分质权时，出质人和丙方应予以必要的协助，以使质权人实现其质权。When Pledgee disposes of the Pledge in accordance with this Agreement, Pledgors and Party C shall provide necessary assistance to enable Pledgee toenforce the Pledge in accordance with this Agreement.9.转让Assignment9.1除非经质权人事先同意，出质人无权赠予或转让其在本协议项下的权利义务。Without Pledgee's prior written consent, Pledgors shall not have the right to assign or delegate its rights and obligations under this Agreement.11秘密文件 Strictly Confidential9.2本协议对出质人及其继任人和经许可的受让人均有约束力，并且对质权人及每一继任人和受让人有效。This Agreement shall be binding on Pledgors and their successors and permitted assigns, and shall be valid with respect to Pledgee and each of itssuccessors and assigns.9.3经出质人同意，质权人可以在任何时候将其在业务合作协议项下的所有或任何权利和义务转让给其指定的关联方（自然人/法人），在这种情况下，受让人应享有和承担本协议项下质权人享有和承担的权利和义务，如同其作为原协议方应享有和承担的一样。质权人转让业务合作协议项下的权利和义务时，应质权人要求，出质人应就此转让签署有关协议和/或文件。Upon the Pledgors’ agreement, Pledgee may assign any or all of its rights and obligations under the Business Cooperation Agreement to its designee(s)(natural/legal persons) at any time, in which case the assigns shall have the rights and obligations of Pledgee under this Agreement, as if it were theoriginal party to this Agreement. When the Pledgee assigns the rights and obligations under the Business Cooperation Agreement, upon Pledgee'srequest, Pledgors shall execute relevant agreements or other documents relating to such assignment.9.4因转让所导致的质权人变更后，应质权人要求，出质人应与新的质权人签订一份内容与本协议一致的新质押协议，并在相应的工商行政管理机关进行登记。In the event of a change in Pledgee due to an assignment, Pledgors shall, at the request of Pledgee, execute a new pledge agreement with the newpledgee on the same terms and conditions as this Agreement, and register the same with the relevant AIC.12秘密文件 Strictly Confidential9.5出质人应严格遵守本协议和各方单独或共同签署的其他有关协议的规定，包括独家购买权合同和对质权人的授权委托书，履行各协议项下的义务，并不进行任何足以影响协议的有效性和可强制执行性的作为/不作为。除非根据质权人的书面指示，出质人不得行使其对质押股权还留存的权利。Pledgors shall strictly abide by the provisions of this Agreement and other contracts jointly or separately executed by the Parties hereto or any of them,including the Exclusive Option Agreement and the Power of Attorney granted to Pledgee, perform the obligations hereunder and thereunder, and refrainfrom any action/omission that may affect the effectiveness and enforceability thereof. Any remaining rights of Pledgors with respect to the EquityInterest pledged hereunder shall not be exercised by Pledgors except in accordance with the written instructions of Pledgee.10.终止Termination在被担保债务被全部清偿或履行完毕之后，本质权人应在尽早合理可行的时间内办理或配合办理解除质押的手续，出质人与丙方应提供相应的配合与协助。Upon the full payment of all payments in pledge under the Business Cooperation Agreement a, Pledgor shall then, with the assistance of Party B and Party C,go through the procedures of cancellation of pledge rights at a reasonable time as soon as practicable.11.手续费及其他费用Handling Fees and Other Expenses一切与本协议有关的费用及实际开支，其中包括但不限于法律费用、工本费、印花税以及任何其他税收、费用等全部由丙方承担。All fees and out of pocket expenses relating to this Agreement, including but not limited to legal costs, costs of production, stamp tax and any other taxes andfees, shall be borne by Party C.13秘密文件 Strictly Confidential12.保密责任Confidentiality各方承认及确定有关本协议、本协议内容，以及彼此就准备或履行本协议而交换的任何口头或书面资料均被视为保密信息。各方应当对所有该等保密信息予以保密，而在未得到另一方书面同意前，不得向任何第三者披露任何保密信息，惟下列信息除外：(a)公众人士知悉或将会知悉的任何信息（惟并非由接受保密信息之一方擅自向公众披露）；(b)根据适用法律法规、股票交易规则、或政府部门或法院的命令而所需披露之任何信息；或(c)由任何一方就本协议所述交易而需向其股东、投资者、法律或财务顾问披露之信息，而该股东、法律或财务顾问亦需遵守与本条款相类似之保密责任。如任何一方工作人员或聘请机构的泄密均视为该方的泄密，需依本协议承担违约责任。无论本协议以任何理由终止，本条款仍然生效。The Parties acknowledge that the existence and the terms of this Agreement and any oral or written information exchanged between the Parties in connectionwith the preparation and performance this Agreement are regarded as confidential information. Each Party shall maintain confidentiality of all such confidentialinformation, and without obtaining the written consent of the other Party, it shall not disclose any relevant confidential information to any third parties, exceptfor the information that: (a) is or will be in the public domain (other than through the receiving Party’s unauthorized disclosure); (b) is under the obligation tobe disclosed pursuant to the applicable laws or regulations, rules of any stock exchange, or orders of the court or other government authorities; or (c) isrequired to be disclosed by any Party to its shareholders, investors, legal counsels or financial advisors regarding the transaction contemplated hereunder,provided that such shareholders, investors, legal counsels or financial advisors shall be bound by the confidentiality obligations similar to those set forth inthis Section. Disclosure of any confidential information by the staff members or agencies hired by any Party shall be deemed disclosure of such confidentialinformation by such Party, which Party shall be held liable for breach of this Agreement. This Section shall survive the termination of this Agreement for anyreason.14秘密文件 Strictly Confidential13.适用法律和争议的解决Governing Law and Resolution of Disputes13.1本协议的订立、效力、解释、履行、修改和终止以及争议的解决均适用中国法律。The execution, effectiveness, construction, performance, amendment and termination of this Agreement and the resolution of disputes hereunder shallbe governed by the laws of China.13.2因解释和履行本协议而发生的任何争议，本协议各方应首先通过友好协商的方式加以解决。如果在一方向其他方发出要求协商解决的书面通知后30天之内争议仍然得不到解决，则任何一方均可将有关争议提交给中国国际经济贸易仲裁委员会，由该会按照其仲裁规则仲裁解决。仲裁应在北京进行，使用之语言为中文。仲裁裁决是终局性的，对各方均有约束力。In the event of any dispute with respect to the construction and performance of this Agreement, the Parties shall first resolve the dispute throughfriendly negotiations. In the event the Parties fail to reach an agreement on the dispute within 30 days after either Party's request to the other Parties forresolution of the dispute through negotiations, either Party may submit the relevant dispute to the China International Economic and Trade ArbitrationCommission for arbitration, in accordance with its Arbitration Rules. The arbitration shall be conducted in Beijing, and the language used in arbitrationshall be Chinese. The arbitration award shall be final and binding on all Parties.13.3因解释和履行本协议而发生任何争议或任何争议正在进行仲裁时，除争议的事项外，本协议各方仍应继续行使各自在本协议项下的其他权利并履行各自在本协议项下的其他义务。Upon the occurrence of any disputes arising from the construction and performance of this Agreement or during the pending arbitration of any dispute,except for the matters under dispute, the Parties to this Agreement shall continue to exercise their respective rights under this Agreement and performtheir respective obligations under this Agreement.15秘密文件 Strictly Confidential14.通知Notices14.1本协议项下要求或发出的所有通知和其他通信应通过专人递送、挂号邮寄、邮资预付或商业快递服务或传真的方式发到该方下列地址。每一通知还应再以电子邮件送达。该等通知视为有效送达的日期按如下方式确定：All notices and other communications required or permitted to be given pursuant to this Agreement shall be delivered personally or sent by registeredmail, postage prepaid, by a commercial courier service or by facsimile transmission to the address of such party set forth below. A confirmation copy ofeach notice shall also be sent by Email. The dates on which notices shall be deemed to have been effectively given shall be determined as follows:14.1.1通知如果是以专人递送、快递服务或挂号邮寄、邮资预付发出的，则以于设定为通知的地址在接收或拒收之日为有效送达日。Notices given by personal delivery, by courier service or by registered mail, postage prepaid, shall be deemed effectively given on the date ofreceipt or refusal at the address specified for notices.14.1.2通知如果是以传真发出的，则以成功传送之日为有效送达日（应以自动生成的传送确认信息为证）。Notices given by facsimile transmission shall be deemed effectively given on the date of successful transmission (as evidenced by anautomatically generated confirmation of transmission).16秘密文件 Strictly Confidential14.2为通知的目的，各方地址如下：For the purpose of notices, the addresses of the Parties are as follows:甲方：中传天下信息科技（深圳）有限公司Party A: Zhongchuan Tianxia Information Technology (Shenzhen) Co., Ltd.地址：深圳市南山区高新中三道2号深圳软件园一期五栋401AAddress: 401A, Building 5, Phase 1, Shenzhen Software Park, No.2 Gaoxin Zhongsan Road, Nanshan District, Shenzhen.收件人：洪婷Attn: Hong Ting乙方：Party B:a)宋雪松Song Xuesong地址：125.Expenses, including legal fees, incurred by a director in defending any legal, administrative or investigative proceedings may be paid by the Company inadvance of the final disposition of such proceedings upon receipt of an undertaking by or on behalf of the director to repay the amount if it shall ultimatelybe determined that the director is not entitled to be indemnified by the Company in accordance with these Articles.126.Expenses, including legal fees, incurred by a former director in defending any legal, administrative or investigative proceedings may be paid by theCompany in advance of the final disposition of such proceedings upon receipt of an undertaking by or on behalf of the former director to repay the amountif it shall ultimately be determined that the director is not entitled to be indemnified by the Company in accordance with these Articles.127.The indemnification and advancement of expenses provided by, or granted pursuant to, these Articles is not exclusive of any other rights to which theperson seeking indemnification of advancement of expenses may be entitled under any agreement, resolution of members, resolution of disinteresteddirectors or otherwise, both as to acting in the person’s official capacity and as to acting in another capacity while serving as a director of the Company.128.If a person to be indemnified has been successful in defence of any proceedings referred to above the person is entitled to be indemnified against allexpenses, including legal fees, and against all judgments, fines and amounts paid in settlement and reasonably incurred by the person in connection withthe proceedings.129.The Company may purchase and maintain insurance in relation to any person who is or was a director, an officer or a liquidator of the Company, or who atthe request of the Company is or was serving as a director, an officer or a liquidator of, or in any other capacity is or was acting for, another body corporateor a partnership, joint venture, trust or other enterprise, against any liability asserted against the person and incurred by the person in that capacity,whether or not the Company has or would have had the power to indemnify the person against the liability as provided in these Articles.SEAL130.The Company shall have a Seal and may have more than one Seal. References herein to the Seal shall be references to every Seal which shall have beenduly adopted by resolution of directors. The directors shall provide for the safe custody of the Seal and for an imprint thereof to be kept at the office of theregistered agent of the Company. Except as otherwise expressly provided herein, the Seal when affixed to any written instrument, shall be witnessed andattested to by the signature of a director or any other person so authorized from time to time by resolution of directors. Such authorization may be before orafter the Seal is affixed, may be general or specific and may refer to any number of sealings. The Directors may provide for a facsimile of the Seal and of thesignature of any director or authorized person which may be reproduced by printing or other means on any instrument and it shall have the same force andvalidity as if the Seal had been affixed to such instrument and the same had been signed as hereinbefore described.21DISTRIBUTIONS131.The directors of the Company may by resolution authorise a distribution by the Company at any time and of any amount and to any members they think fitif they are satisfied on reasonable grounds that immediately after the distribution;a.the value of the Company’s assets will exceed its liabilities, andb.the Company will be able to pay its debts as they fall due.132.A resolution of the directors passed under the preceding Article shall contain a statement that, in the opinion of the directors, immediately after thedistribution the value of the Company’s assets will exceed its liabilities, and the Company will be able to pay its debts as they fall due.133.If, after a distribution is authorised and before it is made, the directors cease to be satisfied on reasonable grounds that the Company will, immediately afterthe distribution satisfy the solvency test, any distribution made by the Company is deemed not to have been authorised.134.If, by virtue of the preceding Article, a distribution is deemed not to have been authorised, a director who;a.ceased, after authorisation but before the making of the distribution, to be satisfied on reasonable grounds for believing that the company wouldsatisfy the solvency test immediately after the distribution is made; andb.failed to take reasonable steps to prevent the distribution being made;is personally liable to the company to repay to the company so much of the distribution as is not able to be recovered from members.135.A distribution made to a member at a time when the company did not, immediately after the distribution, satisfy the solvency test may be recovered by thecompany from the member unless;a.the member received the distribution in good faith and without knowledge of the company’s failure to satisfy the solvency test;b.the member has altered his position in reliance on the validity of the distribution; andc.it would be unfair to require repayment in full or at all.DISTRIBUTIONS BY WAY OF DIVIDEND136.The Company may by a resolution of directors declare a distribution by way of dividend and pay such distribution in money, shares or other property. Inthe event that distributions by way of dividend are paid in specie the directors shall have responsibility for establishing and recording in the resolution ofdirectors authorizing the distribution by way of dividend, a fair and proper value for the assets to be so distributed.137.The directors may from time to time pay to the members such interim distributions by way of dividend as appear to the directors to be justified by theprofits of the Company.138.The directors may, before declaring any distribution by way of dividend, set aside out of the profits of the Company such sum as they think proper as areserve fund, and may invest the sum so set aside as a reserve fund upon such securities as they may select.139.Notice of any distribution by way of dividend that may have been declared shall be given to each member in the manner hereinafter mentioned and alldistributions by way of dividend unclaimed for 3 years after having been declared may be forfeited by resolution of directors for the benefit of theCompany.140.No distribution by way of dividend shall bear interest as against the Company and no distribution by way of dividend shall be paid on treasury shares orshares held by another company of which the Company holds, directly or indirectly, shares having more than 50 percent of the vote in electing directors.22141.A share issued as a distribution by way of dividend by the Company shall be treated for all purposes as having been issued for money equal to the valuedetermined by resolution of the directors. In the absence of fraud the decision of the directors as to the value of the share is conclusive unless a questionof law is involved.142.A division of the issued and outstanding shares of a class or series of shares into a larger number of shares of the same class or series having aproportionately smaller par value does not constitute a distribution by way of dividend of shares.ACCOUNTS AND AUDIT143.The Company may by resolution of members call for the directors to prepare periodically a profit and loss account and a balance sheet. The profit and lossaccount and balance sheet shall be drawn up so as to give respectively a true and fair view of the profit and loss of the Company for the financial periodand a true and fair view of the state of affairs of the Company as at the end of the financial period.144.The Company may by resolution of members call for the accounts to be examined by auditors.145.Subject to the rules of the Designated Stock Exchange, the first auditors shall be appointed by resolution of directors; subsequent auditors shall beappointed by the Audit Committee and shall hold office until the Audit Committee appoint another independent auditor.146.Subject to the rules of the Designated Stock Exchange, the remuneration of the auditors of the Company shall be fixed by the Audit Committee.147.The auditors shall examine each profit and loss account and balance sheet required to be served on every member of the Company or laid before a meetingof the members of the Company and shall state in a written report whether or nota.in their opinion the profit and loss account and balance sheet give a true and fair view respectively of the profit and loss for the period covered bythe accounts, and of the state of affairs of the Company at the end of that period; andb.all the information and explanations required by the auditors have been obtained.148.The report of the auditors shall be annexed to the accounts and shall be read at the meeting of members at which the accounts are laid before the Companyor shall be served on the members.149.Every auditor of the Company shall have a right of access at all times to the books of account and vouchers of the Company, and shall be entitled to requirefrom the directors and officers of the Company such information and explanations as he thinks necessary for the performance of the duties of the auditors.150.The auditors of the Company shall be entitled to receive notice of, and to attend any meetings of members of the Company at which the Company’s profitand loss account and balance sheet are to be presented.NOTICES151.Any notice, information or written statement to be given by the Company to members may be served in any way by which it can reasonably be expected toreach each member or by mail addressed to each member at the address shown in the share register.152.Any summons, notice, order, document, process, information or written statement to be served on the Company may be served by leaving it, or by sendingit by registered mail addressed to the Company, at its registered office, or by leaving it with, or by sending it by registered mail to, the registered agent ofthe Company.153.Service of any summons, notice, order, document, process, information or written statement to be served on the Company may be proved by showing thatthe summons, notice, order, document, process, information or written statement was delivered to the registered office or the registered agent of theCompany or that it was mailed in such time as to admit to its being delivered to the registered office or the registered agent of the Company in the normalcourse of delivery within the period prescribed for service and was correctly addressed and the postage was prepaid.23PENSION AND SUPERANNUATION FUNDS154.The directors may establish and maintain or procure the establishment and maintenance of any noncontributory or contributory pension orsuperannuation funds for the benefit of, and give or procure the giving of donations, gratuities, pensions, allowances or emoluments to, any persons whoare or were at any time in the employment or service of the Company or any company which is a subsidiary of the Company or is allied to or associated withthe Company or with any such subsidiary, or who are or were at any time directors or officers of the Company or of any such other company as aforesaid orwho hold or held any salaried employment or office in the Company or such other company, or any persons in whose welfare the Company or any suchother company as aforesaid is or has been at any time interested, and to the wives, widows, families and dependents of any such person, and may makepayments for or towards the insurance of any such persons as aforesaid, and may do any of the matters aforesaid either alone or in conjunction with anysuch other company as aforesaid. Subject always to the proposal being approved by resolution of members, a director holding any such employment oroffice shall be entitled to participate in and retain for his own benefit any such donation, gratuity, pension allowance or emolument.VOLUNTARY WINDING UP AND DISSOLUTION155.The Company may voluntarily commence to wind up and dissolve by a resolution of members but if the Company has never issued shares it mayvoluntarily commence to wind up and dissolve by resolution of directors.CONTINUATION156.The Company may by resolution of members or by a resolution passed unanimously by all directors of the Company continue as a company incorporatedunder the laws of a jurisdiction outside the British Virgin Islands in the manner provided under those laws.ARBITRATION157.Whenever any difference arises between the Company on the one hand and any of the members or their executors, administrators or assigns on the otherhand, touching the true intent and construction or the incidence or consequences of these Articles or of the Act, touching anything done or executed,omitted or suffered in pursuance of the Act or touching any breach or alleged breach or otherwise relating to the premises or to these Articles, or to anyAct or Ordinance affecting the Company or to any of the affairs of the Company such difference shall, unless the parties agree to refer the same to a singlearbitrator, be referred to 2 arbitrators one to be chosen by each of the parties to the difference and the arbitrators shall before entering on the referenceappoint an umpire.158.If either party to the reference makes default in appointing an arbitrator either originally or by way of substitution (in the event that an appointed arbitratorshall die, be incapable of acting or refuse to act) for 10 days after the other party has given him notice to appoint the same, such other party may appoint anarbitrator to act in the place of the arbitrator of the defaulting party.We, Portcullis TrustNet (BVI) Limited of Portcullis TrustNet Chambers, P.O. Box 3444, Road Town, Tortola, British Virgin Islands for the purpose of incorporating aBVI Business Company under the laws of the British Virgin Islands hereby sign these Articles of Association the 27th day of October, 2009.Incorporator/s/ Nicole WheatleyPortcullis TrustNet (BVI) LimitedPortcullis TrustNet ChambersP.O. Box 3444Road Town, TortolaBritish Virgin Islands(Sgd. Nicole Wheatley)24EX4.15 3 f20f2017ex415_luokung.htm EXCLUSIVE BUSINESS COOPERATION AGREEMENT BY AND BETWEEN ZHONGCHUAN TIANXIA INFORMATIONTECHNOLOGY (SHENZHEN) CO., LTD., AND BEIJING MOBILE VISION TECHNOLOGY CO., LTD., DATED AUGUST 31, 2015Exhibit 4.15独家业务合作协议Exclusive Business Cooperation Agreement本独家业务合作协议（下称“本协议”）由以下双方于年月日在中华人民共和国（下称“中国”）北京市签署。This Exclusive Business Cooperation Agreement (this “Agreement”) is made and entered into by and between the following parties on in Beijing, thePeople’s Republic of China (“China” or the “PRC”).甲方：中传天下信息科技（深圳）有限公司Party A: Zhongchuan Tianxia Information Technology (Shenzhen) Co., Ltd.地址：深圳市南山区高新中三道2号深圳软件园一期五栋401A Address: 401A, Building 5, Phase 1, Shenzhen Software Park, No.2 Gaoxin Zhongsan Road, Nanshan District, Shenzhen统一社会信用代码：91440300565701058R Uniform Social Credit Code: 91440300565701058R乙方：北京中传视讯科技有限公司Party B: Beijing Mobile Vision Technology Co., Ltd.地址：北京市朝阳区光华路9号SOHO3QLAB32Address: LAB32, SOHO3Q, No 9, Guanghua Road, Chaoyang District, Beijing统一社会信用代码：9111010576215249XMUniform Social Credit Code: 9111010576215249XM甲方和乙方以下各称为“一方”，统称为“双方”。Each of Party A and Party B shall be hereinafter referred to as a “Party” respectively, and as “Parties” collectively.1秘密文件Strictly Confidential鉴于：Whereas,1.甲方是一家在中国注册的外商独资企业，拥有丰富的技术研发和产业化推广相关的管理和投资经验，并提供相关的技术支持和咨询服务；Party A is a whollyforeignowned enterprise established in China, which has rich experience in technology research development and industrializationpromotion management and investment, and provides relevant technical support and consulting services;2.乙方是一家在中国成立的有限责任公司，经中国有关政府部门批准依法主要从事手机视频技术开发、内容制作及市场推广；Party B is a limited company in China, mainly engages in mobile video technology research, development, content creation, sale and related industrialpromotion as approved by the relevant governmental authorities in China;3.甲方同意利用其技术、人员和信息优势，在本协议期间向乙方提供有关手机视频技术开发、内容制作及市场推广以及未来扩大业务规模和业务范围时乙方所需的技术支持、技术咨询等相关服务，乙方同意接受甲方或其指定方按本协议条款的规定提供的各种服务。Party A is willing to provide Party B with technology supports and technology consulting services in connection with mobile video technology research,development, content creation, sale and related industrial promotion and such services in connection with Party B’s extension of business scale orbroadening of businesses during the term of this Agreement, utilizing its advantages in technology, human resources, and information, and Party B iswilling to accept such services provided by Party A or Party A's designee(s), each on the terms set forth herein.2秘密文件Strictly Confidential据此，甲方和乙方经协商一致，达成如下协议：Now, therefore, through mutual discussion, the Parties have reached the following agreements:1.服务提供Services Provided by Party A1.1按照本协议条款和条件，乙方在此委任甲方在本协议期间作为乙方的独家服务提供者向乙方提供全面的和手机视频技术开发、内容制作及市场推广相关以及未来扩大业务规模和业务范围时乙方所需的技术支持、业务支持和相关咨询服务，具体内容包括但不限于以下内容：Party B hereby appoints Party A as Party B's exclusive services provider to provide Party B with complete technical support, business supportand related consulting services in connection with mobile video technology research, development, content creation, sale and related industrialpromotion and such services in connection with Party B’s extension of business scale or broadening of businesses during the term of thisAgreement, in accordance with the terms and conditions of this Agreement, which may include but not limited to:1.1.1为乙方提供其手机视频技术开发、内容制作及市场推广业务所需的一切服务支持，为乙方提供相当于包括总经理、行政人员、管理人员、筹划部门、商业运营、人力资源、财务、会计以及与乙方业务相关的一切业务操作所需人员所能提供的服务内容；managing all aspects of Party B’s business of mobile video technology research, development, content creation, sale and relatedindustrial promotion. In this capacity, Party A will procure or engage for Party B the services of a general manager and other managementstaff, including but not limited to personnel responsible for all administration, operations, planning, business development, humanresources, finance, accounting and other operations related to the Business of Party B;3秘密文件Strictly Confidential1.1.2为乙方制定全部的商业计划、销售目标，并为优化执行该等商业计划设计和建立相应的系统及操作程序；developing all business plans and sales projections of Party B, and for developing and establishing systems and procedures for optimumexecution of the business plans;1.1.3为乙方申请手机视频技术及内容制作相关专利提供咨询服务和支持；consulting services and support in connection with Party B’s applying for mobile video technology related patents and content creation;1.1.4为乙方手机视频技术产业化的发展方向、规模、品牌提升提供咨询服务；consulting services in connection with the development directions, size and business brands promotion of Party B’s mobile videotechnology industrialization;4秘密文件Strictly Confidential1.1.5为乙方提供与业务相关的办公、生产和销售服务，为乙方租赁场所，建立业务相关的系统和程序，满足乙方的其他要求；procuring or obtaining for Party B all office, production and distribution services related to the Business. It shall procure or obtainappropriate leases, establish systems and procedures needed to operate the business, fulfill orders for services;1.1.6尽最大努力为乙方建立手机视频技术销售市场，根据甲方为乙方制定的商业计划及销售目标代表乙方获取客户订单，同时为乙方提供与业务相关的客户服务，建立向客户开具票据的程序和与会计相关的托收服务。using its best efforts to establish mobile video technology related marketing and other structures to obtain orders for services &products from customers on behalf of Party B in accordance with Party B’s business plans, sales projections and objectives (asdeveloped by Party A) and procure or obtain customer services required in connection with the Business. It shall also establishprocedures for invoicing customers, and establish collection services with respect to accounts;1.1.7就乙方的劳动用工方面提供咨询服务和支持，包括但不限于，组织实施对乙方业务人员、行政人员、管理人员等人员进行培训和考核，协助建立健全的人力资源管理制度和实现人力资源的良好配置；consulting services and support regarding labor system of Party B, including but without limitation to labor training and evaluation ofsales person, administrative staff and management person etc. and establishment of human resources management system to well;5秘密文件Strictly Confidential1.1.8提供乙方需要的客户数据统计、分析及相关数据库的建设和维护等咨询服务；providing Party B with compile and analysis of client data and consulting services of establishment and maintenance of data base;1.1.9提供乙方需要的软件和相关技术支持服务；providing software Party B requires and other technical support;1.1.10接受乙方委托，对乙方的手机视频技术研发和产业化推广业务经营进行指导和管理；guiding and management on Party B’s business of mobile video technology research and development and related industrial promotionoperation according to Party B’s commission;1.1.11当乙方业务规模发展或业务范围扩大需要时，购买乙方业务经营需要的设备；in the event of the demand of Party B’s development of business scale or broadening of businesses, purchase the equipments which itneeds for the operation of its business;1.1.12当乙方业务规模发展或业务范围扩大需要时，完成乙方项目中的全部或部分工作；in the event of the demand of Party B’s development of business scale or broadening of businesses, complete the work of Party B’sproject in whole or in party;6秘密文件Strictly Confidential1.1.13当乙方业务规模发展或业务范围扩大需要时，开发新技术；in the event of the demand of Party B’s development of business scale or broadening of businesses, develop new technology;1.1.14乙方委托甲方，且甲方接受委托提供的其他服务。other services Party B appoints Party A to provide and Party A agrees to provide.1.2乙方接受甲方的咨询和服务。乙方进一步同意，除非经甲方事先书面同意，在本协议期间，就本协议约定的服务或其他事宜，乙方不得直接或间接地从任何第三方获得任何与本协议相同或类似的咨询和/或服务，并不得与任何第三方就本协议所述事项建立任何类似的合作关系。双方同意，甲方可以指定其他方（该被指定方可以与乙方签署本协议第1.3条描述的某些协议）为乙方提供本协议约定的服务和/或支持。Party B agrees to accept all the consultations and services provided by Party A. Party B further agrees that unless with Party A's prior writtenconsent, during the term of this Agreement, Party B shall not directly or indirectly accept the same or any similar consultations and/or servicesprovided by any third party and shall not establish similar corporation relationship with any third party regarding the matters contemplated by thisAgreement. Party A may appoint other parties, who may enter into certain agreements described in Section 1.3 with Party B, to provide Party Bwith the consultations and/or services under this Agreement.7秘密文件Strictly Confidential1.3服务的提供方式Service Providing Methodology1.3.1双方同意在本协议有效期内，视情况而定，乙方可以与甲方或甲方指定的其他方进一步签订技术服务协议和/或咨询服务协议，对各项业务培训、技术服务、咨询服务的具体内容、方式、人员、收费等进行约定。Parties agree that during the term of this Agreement, where necessary, Party B may enter into further technical service agreements and/orconsulting service agreements with Party A or any other party designated by Party A, which shall provide the specific contents, manner,personnel, and fees for the specific technical services and consulting services.1.3.2为更好地履行本协议，双方同意，在甲方认为必要时，乙方应在本协议有效期内与甲方或甲方指定的其他方根据业务进展需要随时签署协议，由甲方或其指定方向乙方提供服务。To fulfill this Agreement, Parties agree that during the term of this Agreement, where Party A deems necessary, Party B shall enter intoagreements with Party A or any other party designated by Party A which shall set forth that Party A or any other party designated byParty A provide services to Party B based on the needs of the business of Party B.8秘密文件Strictly Confidential2.服务的价格和支付方式The Calculation and Payment of the Service Fees双方同意，就甲方提供的服务，乙方应向甲方支付服务费（“服务费”）。服务费不应低于乙方税后利润的80%。服务费应当按季支付；经甲方事先书面同意，服务费可以根据乙方的经营需要进行调整。Both Parties agree that, in consideration of the services provided by Party A, Party B shall pay Party A fees (the “Service Fees”), which shall not be lessthan 80% of Party B’s aftertax profits . The Service Fees shall be due and payable on a quarterly basis; upon the prior written consent by Party A, the rateof Service Fees may be adjusted pursuant to the operational needs of Party B.3.知识产权和保密条款Intellectual Property Rights and Confidentiality Clauses3.1在中国法律允许的范围内，甲方对履行本协议而产生或创造的任何权利、所有权、权益和所有知识产权包括但不限于著作权、专利权、专利申请权、软件、技术秘密、商业机密及其他均享有独占的和排他的权利和利益。乙方须签署所有适当的文件，采取所有适当的行动，递交所有的文件和/或申请，提供所有适当的协助，以及做出所有其他依据甲方的自行决定认为是必要的行为，以将任何对该等知识产权的所有权、权利和权益赋予甲方，和/或完善对甲方此等知识产权权利的保护。To the extent permitted under the PRC laws, Party A shall have exclusive and proprietary rights and interests in all rights, ownership, interests andintellectual properties arising out of or created during the performance of this Agreement, including but not limited to copyrights, patents, patentapplications, software, technical secrets, trade secrets and others. Party B shall execute all appropriate documents, take all appropriate actions,submit all filings and/or applications, render all appropriate assistance and otherwise conduct whatever is necessary deemed as by Party A in itssole discretion for the purposes of vesting any ownership, right or interest of any such intellectual property rights in Party A, and/or perfectingthe protections for any such intellectual property rights in Party A.9秘密文件Strictly Confidential3.2双方承认及确定有关本协议、本协议内容，以及彼此就准备或履行本协议而交换的任何口头或书面资料均被视为保密信息。双方应当对所有该等保密信息予以保密，而在未得到另一方书面同意前，不得向任何第三者披露任何保密信息，惟下列信息除外：(a)公众人士知悉或将会知悉的任何信息（惟并非由接受保密信息之一方擅自向公众披露）；(b)根据适用法律法规、股票交易规则、或政府部门或法院的命令而所需披露之任何信息；或(c)由任何一方就本协议所述交易而需向其股东、投资者、法律或财务顾问披露之信息，而该股东、法律或财务顾问亦需遵守与本条款相类似之保密责任。如任何一方工作人员或聘请机构的泄密均视为该方的泄密，需依本协议承担违约责任。无论本协议以任何理由终止，本条款仍然生效。The Parties acknowledge that the existence and the terms of this Agreement and any oral or written information exchanged between the Parties inconnection with the preparation and performance this Agreement are regarded as confidential information. Each Party shall maintainconfidentiality of all such confidential information, and without obtaining the written consent of the other Party, it shall not disclose any relevantconfidential information to any third parties, except for the information that: (a) is or will be in the public domain (other than through the receivingParty’s unauthorized disclosure); (b) is under the obligation to be disclosed pursuant to the applicable laws or regulations, rules of any stockexchange, or orders of the court or other government authorities; or (c) is required to be disclosed by any Party to its shareholders, investors,legal counsels or financial advisors regarding the transaction contemplated hereunder, provided that such shareholders, investors, legal counselsor financial advisors shall be bound by the confidentiality obligations similar to those set forth in this Section. Disclosure of any confidentialinformation by the staff members or agencies hired by any Party shall be deemed disclosure of such confidential information by such Party, whichParty shall be held liable for breach of this Agreement. This Section shall survive the termination of this Agreement for any reason.3.3双方同意，不论本协议是否变更、解除或终止，本条款将持续有效。The Parties agree that this Section shall survive changes to, and rescission or termination of, this Agreement.4.陈述和保证Representations and Warranties4.1甲方陈述和保证如下：Party A hereby represents and warrants as follows:4.1.1甲方是按照中国法律合法注册并有效存续的外商独资企业。Party A is a whollyforeignowned enterprise legally registered and validly existing in accordance with the laws of China.10秘密文件Strictly Confidential4.1.2甲方已采取必要的公司行为，获得必要的授权，并取得第三方和政府部门的同意及批准（若需）以签署和履行本协议；甲方对本协议的签署和履行并不违反法律法规的明确规定。Party A has taken all necessary corporate actions, obtained all necessary authorization and the consent and approval from third partiesand government agencies (if any) for the execution and performance of this Agreement. Party A’s execution and performance of thisAgreement do not violate any explicit requirements under any law or regulation binding on Party A.4.1.3本协议构成对其合法、有效、有约束力并依本协议之条款对其强制执行的义务。This Agreement constitutes Party A's legal, valid and binding obligations, enforceable in accordance with its terms.4.2乙方陈述和保证如下：Party B hereby represents and warrants as follows:4.2.1乙方是按照中国法律合法登记且有效存续的有限责任公司，乙方根据政府部门的批准和许可从事手机视频技术开发、内容制作和产业化市场推广的经营。Party B is a limited company legally registered and validly existing in accordance with the laws of China, engages in mobile videotechnology research, development, content creation, sale and related industrial promotion pursuant to governmental approvals andpermits;11秘密文件Strictly Confidential4.2.2乙方已采取必要的行为，获得必要的授权，并取得第三方和政府部门的同意及批准（若需）以签署和履行本协议；乙方对本协议的签署和履行并不违反法律法规的明确规定。Party B has taken all necessary actions, obtained all necessary authorization and the consent and approval from third parties andgovernment agencies (if any) for the execution and performance of this Agreement. Party B’s execution and performance of thisAgreement do not violate any explicit requirements under any law or regulation binding on Party B.4.2.3本协议构成对其合法、有效、有约束力并依本协议之条款对其强制执行的义务。This Agreement constitutes Party B's legal, valid and binding obligations, and shall be enforceable against it.5.生效和有效期Effectiveness and Term5.1本协议于文首标明的协议日期签署并同时生效。除非依本协议或双方其他协议的约定而提前终止，本协议有效期为20年，但甲、乙双方应自本协议签署后，每3个月对本协议的内容做一次审查，以决定是否需要根据当时的情况对本协议作出相应修改和补充。This Agreement is executed on the date first above written and shall take effect as of such date. Unless earlier terminated in accordance with theprovisions of this Agreement or relevant agreements separately executed between the Parties, the term of this Agreement shall be 20 years. Afterthe execution of this Agreement, both Parties shall review this Agreement every 3 months to determine whether to amend or supplement theprovisions in this Agreement based on the actual circumstances at that time.12秘密文件Strictly Confidential5.2协议期满前，经甲方书面确认，本协议可以延期。延期的期限由甲方决定，乙方必须无条件地同意该延期。The term of this Agreement may be extended if confirmed in writing by Party A prior to the expiration thereof. The extended term shall bedetermined by Party A, and Party B shall accept such extended term unconditionally.6.终止Termination6.1除非依据本协议续期，本协议于到期之日终止。Unless renewed in accordance with the relevant terms of this Agreement, this Agreement shall be terminated upon the date of expiration hereof.6.2本协议有效期内，除非甲方对乙方有重大过失或存在欺诈行为，乙方不得提前终止本协议。尽管如此，甲方可在任何时候通过提前30天向乙方发出书面通知的方式终止本协议。During the term of this Agreement, unless Party A commits gross negligence, or a fraudulent act, against Party B, Party B shall not terminate thisAgreement prior to its expiration date. Nevertheless, Party A shall have the right to terminate this Agreement upon giving 30 days' prior writtennotice to Party B at any time.6.3在本协议终止之后，双方在第3、7和8条项下的权利和义务将继续有效。The rights and obligations of the Parties under Articles 3, 7 and 8 shall survive the termination of this Agreement.13秘密文件Strictly Confidential7.适用法律和争议解决Governing Law and Resolution of Disputes7.1本协议的订立、效力、解释、履行、修改和终止以及争议的解决适用中国的法律。The execution, effectiveness, construction, performance, amendment and termination of this Agreement and the resolution of disputes hereundershall be governed by the laws of China.7.2因解释和履行本协议而发生的任何争议，本协议双方应首先通过友好协商的方式加以解决。如果在一方向其他方发出要求协商解决的书面通知后30天之内争议仍然得不到解决，则任何一方均可将有关争议提交给中国国际经济贸易仲裁委员会，由该会按照其仲裁规则仲裁解决。仲裁应在北京进行，使用之语言为中文。仲裁裁决是终局性的，对各方均有约束力。In the event of any dispute with respect to the construction and performance of this Agreement, the Parties shall first resolve the dispute throughfriendly negotiations. In the event the Parties fail to reach an agreement on the dispute within 30 days after either Party's request to the otherParties for resolution of the dispute through negotiations, either Party may submit the relevant dispute to the China International Economic andTrade Arbitration Commission for arbitration, in accordance with its Arbitration Rules. The arbitration shall be conducted in Beijing, and thelanguage used in arbitration shall be Chinese. The arbitration award shall be final and binding on all Parties.14秘密文件Strictly Confidential7.3因解释和履行本协议而发生任何争议或任何争议正在进行仲裁时，除争议的事项外，本协议双方仍应继续行使各自在本协议项下的其他权利并履行各自在本协议项下的其他义务。Upon the occurrence of any disputes arising from the construction and performance of this Agreement or during the pending arbitration of anydispute, except for the matters under dispute, the Parties to this Agreement shall continue to exercise their respective rights under this Agreementand perform their respective obligations under this Agreement.8.补偿Indemnification就甲方根据本协议向乙方提供的咨询和服务内容所产生或引起的针对甲方的诉讼、请求或其他要求而招致的任何损失、损害、责任或费用都应由乙方补偿给甲方，以使甲方不受损害，除非该损失、损害、责任或费用是因甲方的重大过失或故意而产生的。Party B shall indemnify and hold harmless Party A from any losses, injuries, obligations or expenses caused by any lawsuit, claims or other demandsagainst Party A arising from or caused by the consultations and services provided by Party A to Party B pursuant this Agreement, except where suchlosses, injuries, obligations or expenses arise from the gross negligence or willful misconduct of Party A.15秘密文件Strictly Confidential9.通知Notices9.1本协议项下要求或发出的所有通知和其他通信应通过专人递送、挂号邮寄、邮资预付或快递服务或传真的方式发到该方下列地址。每一通知还应再以电子邮件送达。该等通知视为有效送达的日期按如下方式确定：All notices and other communications required or permitted to be given pursuant to this Agreement shall be delivered personally or sent byregistered mail, postage prepaid, by a courier service or by facsimile transmission to the address of such Party set forth below. A confirmationcopy of each notice shall also be sent by email. The dates on which notices shall be deemed to have been effectively given shall be determined asfollows:9.1.1通知如果是以专人递送、快递服务或挂号邮寄、邮资预付发出的，则以于设定为通知的地址在接收或拒收之日为有效送达日。Notices given by personal delivery, by courier service or by registered mail, postage prepaid, shall be deemed effectively given on thedate of receipt or refusal at the address specified for notices.9.1.2通知如果是以传真发出的，则以成功传送之日为有效送达日（应以自动生成的传送确认信息为证）。Notices given by facsimile transmission shall be deemed effectively given on the date of successful transmission (as evidenced by anautomatically generated confirmation of transmission).16秘密文件Strictly Confidential9.2为通知的目的，双方地址如下：For the purpose of notices, the addresses of the Parties are as follows:甲方：中传天下信息科技（深圳）有限公司Party A: Zhongchuan Tianxia Information Technology (Shenzhen) Co., Ltd.地址：深圳市南山区高新中三道2号深圳软件园一期五栋401AAddress:401A, Building 5, Phase 1, Shenzhen Software Park, No.2 Gaoxin Zhongsan Road, Nanshan District, Shenzhen收件人：洪婷Attn: Hong Ting乙方：北京中传视讯科技有限公司Party B: Beijing Mobile Vision Technology Co., Ltd地址：北京市朝阳区光华路9号SOHO3QLAB32Address: LAB32, SOHO3Q, No 9, Guanghua Road, Chaoyang District, Beijing.收件人：宋雪松Attn.: Song Xuesong9.3任何一方可按本条规定随时给另一方发出通知来改变其接收通知的地址。Any Party may at any time change its address for notices by a notice delivered to the other Party in accordance with the terms hereof.17秘密文件Strictly Confidential10.协议的转让Assignment10.1乙方不得将其在本协议项下的权利与义务转让给第三方，除非事先征得甲方的书面同意。Without Party A's prior written consent, Party B shall not assign its rights and obligations under this Agreement to any third party.10.2乙方在此同意，甲方可以在其需要时向其他第三方转让其在本协议项下的权利和义务，并在该等转让发生时甲方仅需向乙方发出书面通知，并且无需再就该等转让征得乙方的同意。Party B agrees that Party A may assign its obligations and rights under this Agreement to any third party upon a prior written notice to Party Bbut without the consent of Party B.11.协议的分割性Severability如果本协议有任何一条或多条规定根据任何法律或法规在任何方面被裁定为无效、不合法或不可执行，本协议其余规定的有效性、合法性或可执行性不应因此在任何方面受到影响或损害。双方应通过诚意磋商，争取以法律许可以及双方期望的最大限度内有效的规定取代那些无效、不合法或不可执行的规定，而该等有效的规定所产生的经济效果应尽可能与那些无效、不合法或不能强制执行的规定所产生的经济效果相似。In the event that one or several of the provisions of this Agreement are found to be invalid, illegal or unenforceable in any aspect in accordance with anylaws or regulations, the validity, legality or enforceability of the remaining provisions of this Agreement shall not be affected or compromised in any aspect.The Parties shall strive in good faith to replace such invalid, illegal or unenforceable provisions with effective provisions that accomplish to the greatestextent permitted by law and the intentions of the Parties, and the economic effect of such effective provisions shall be as close as possible to the economiceffect of those invalid, illegal or unenforceable provisions.18秘密文件Strictly Confidential12.协议的修改、补充Amendments and Supplements双方可以书面协议方式对本协议作出修改和补充。经过双方签署的有关本协议的修改协议和补充协议是本协议组成部分，具有与本协议同等的法律效力。Any amendments and supplements to this Agreement shall be in writing. The amendment agreements and supplementary agreements that have beensigned by the Parties and that relate to this Agreement shall be an integral part of this Agreement and shall have the same legal validity as this Agreement.13.语言和副本Language and Counterparts本协议以中文和英文书就，一式二份，甲乙双方各持一份，具有同等效力；中英文版本如有冲突，应以中文版为准。This Agreement is written in both Chinese and English language in two copies, each Party having one copy with equal legal validity; in case there is anyconflict between the Chinese version and the English version, the Chinese version shall prevail.本页其余部分刻意留为空白The Remainder of this page is intentionally left blank19秘密文件Strictly Confidential有鉴于此，双方已使得经其授权的代表于文首所述日期签署了本独家业务合作协议并即生效，以昭信守。IN WITNESS WHEREOF, the Parties have caused their authorized representatives to execute this Exclusive Business Cooperation Agreement as of thedate first above written.甲方：中传天下信息科技（深圳）有限公司（盖章）Party A: Zhongchuan Tianxia Information Technology (Shenzhen) Co., Ltd.(Seal)签字：By: /s/ Hong Ting 姓名：洪婷Name: Hong Ting职务：总经理Title: General Manager20秘密文件Strictly Confidential有鉴于此，双方已使得经其授权的代表于文首所述日期签署了本独家业务合作协议并即生效，以昭信守。IN WITNESS WHEREOF, the Parties have caused their authorized representatives to execute this Exclusive Business Cooperation Agreement as of thedate first above written. 乙方：北京中传视讯科技有限公司（盖章）Party B: Beijing Mobile Vision Technology Co., Ltd. (Seal)签字：By: /s/ Song Xuesong 姓名：宋雪松Name: Song Xuesong职务：董事长Title: Chairman of the Board21秘密文件Strictly ConfidentialEX4.16 4 f20f2017ex416_luokung.htm EXCLUSIVE OPTION AGREEMENT BY AND AMONG ZHONGCHUAN TIANXIA INFORMATION TECHNOLOGY(SHENZHEN) CO., LTD., XUESONG SONG, WEILI CHEN, PING WANG, DONGLAI LIU, AND BEIJING MOBILE VISION TECHNOLOGY CO., LTD., DATEDAUGUST 31, 2015Exhibit 4.16独家购买权协议Exclusive Option Agreement本独家购买权协议 (下称“本协议”) 由以下各方于年月日在中华人民共和国（下称“中国”）北京签订：This Exclusive Option Agreement (this “Agreement”) is executed by and among the Parties below as of in Beijing, the People’s Republic of China (the“China” or “PRC”):甲方：中传天下信息科技（深圳）有限公司，一家依照中国法律设立和存在的外商独资企业，地址为深圳市南山区高新中三道2号深圳软件园一期五栋401A；Party A:Zhongchuan Tianxia Information Technology (Shenzhen) Co., Ltd., a whollyforeignowned enterprise organized and existing under the laws of China,with its address at 401A, Building 5, Phase 1, Shenzhen Software Park, No.2 Gaoxin Zhongsan Road, Nanshan District, Shenzhen.乙方：Party B:a)宋雪松Song Xuesong身份证号码:120112196809040417ID Card No.:120112196809040417住所：天津市河西区广东路中裕园33702Address:Zhongyu Yuan 33702, Guangdong Road, Hexi District, Tianjinb)陈蔚力Chen Weili身份证号码:120106197309240516ID Card No.:120106197309240516住所：广东省深圳市宝安区宝城上川路15号Address:Baocheng Shangchuan Road 15, Baoan District, Shenzhen, Guangdong1秘密文件Strictly Confidentialc)王平Wang Ping身份证号码:35020319691030401xID Card No.:35020319691030401x住所：广东省深圳市南山区高新南环路36号彩虹之岸12栋4AAddress:Caihong Zhi’an Building No.12 Suite 4A, Gaoxin Nanhuan Road 36, Nanshan District, Shenzhen, Guangdongd)刘东来Liu Donglai身份证号码:120107196810103912ID Card No.:120107196810103912住所：天津市和平区南京路诚基经贸中心1号楼2门1702号Address:No 1702, Door 2, Build 1, Chengji Economic and Trade Centre, Nanjing Road, Heping District, Tianjin.丙方：北京中传视讯科技有限公司，一家依照中国法律设立和存在的有限责任公司，地址为北京市朝阳区光华路9号SOHO3QLAB32，统一社会信用代码为9111010576215249XM；Party C:Beijing Mobile Vision Technology Co., Ltd., a limited company duly registered in China, with its address at LAB32, SOHO3Q, No 9, Guanghua Road,Chaoyang District, Beijing and its uniform social credit code of 9111010576215249XM.2秘密文件Strictly Confidential在本协议中，甲方、乙方和丙方以下各称“一方”，合称“各方”。In this Agreement, each of Party A, Party B and Party C shall be referred to as a “Party” respectively, and they shall be collectively referred to as the“Parties”.鉴于，乙方系丙方股东并合计持有丙方100%股权，乙方将按本协议之条款授予甲方购买全部或部分该股权的权利。Whereas, Party B are the shareholders of Party C and jointly hold 100% of the equity interest in Party C, and Party B are willing to grant to Party A the rightto acquire such equity interest, in whole or in part, on the terms herein.现各方协商一致，达成如下协议：Now therefore, upon mutual discussion and negotiation, the Parties have reached the following agreement:1.股权买卖Sale and Purchase of Equity Interest1.1授予权利Option Granted乙方在此不可撤销地授予甲方在中国法律允许的前提下，按照甲方自行决定的行使步骤，并按照本协议第1.3条所述的价格，随时一次或多次从乙方购买或指定一人或多人(“被指定人”)从乙方购买其目前和将来所持有的丙方的全部或部分股权（无论乙方出资额和/或持股比例将来是否发生变化）的一项不可撤销的专有权(“股权购买权”)。除甲方和被指定人外，任何第三人均不得享有股权购买权或其他与乙方股权有关的权利。丙方特此同意乙方向甲方授予股权购买权。本款及本协议所规定的“人”指个人、公司、合营企业、合伙、企业、信托或非公司组织。Party B hereby irrevocably grant Party A an irrevocable and exclusive right to purchase, or designate one or more persons (each, a “Designee”) topurchase the equity interests in Party C now and in the future held by Party B (regardless whether Party B’s capital contribution amount and/orpercentage of shareholding will be changed in the future) once or at multiple times at any time in part or in whole at Party A’s sole and absolutediscretion to the extent permitted by Chinese laws and at the price described in Section 1.3 herein (such right being the “Equity Interest PurchaseOption”). Except for Party A and the Designee(s), no other person shall be entitled to the Equity Interest Purchase Option or other rights withrespect to the equity interests of Party B. Party C hereby agrees to the grant by Party B of the Equity Interest Purchase Option to Party A. Theterm “person” as used herein shall refer to individuals, corporations, partnerships, partners, enterprises, trusts or noncorporate organizations.3秘密文件Strictly Confidential1.2行使步骤Steps for Exercise of Equity Interest Purchase Option甲方行使其股权购买权以符合中国法律和法规的规定为前提。甲方行使股权购买权时，应向乙方发出书面通知(“股权购买通知”)，股权购买通知应载明以下事项：(a)甲方关于行使股权购买权的决定；(b)甲方拟从乙方购买的股权份额(“被购买的股权”)；和(c)被购买的股权的买入日期。Subject to the provisions of the laws and regulations of China, Party A may exercise the Equity Interest Purchase Option by issuing a writtennotice to Party B (the “Equity Interest Purchase Option Notice”), specifying: (a) Party A’s decision to exercise the Equity Interest PurchaseOption; (b) the portion of equity interests to be purchased from Party B (the “Optioned Interests”); and (c) the date for purchasing the OptionedInterests.1.3股权买价Equity Interest Purchase Price被购买的股权的买价（“股权买价”）应是行权当时中国法律允许的最低价格。乙方收到该股权对价后，应当提供给丙方与该股权买价相同金额的借款，该借款的期限为20年，且为无息。乙方应当在该借款期限届满时就该借款放弃对丙方的债权。The purchase price of the Optioned Interests (the “Equity Interest Purchase Price”) shall be the lowest price permitted by the laws of China. Afterreceiving the Equity Interest Purchase Price, Party B shall make an interestfree loan equivalent to the amount of Equity Interest Purchase Price toParty C, of which term is 20 years. Each member of Party B shall give up his(her) creditor’s right when the loan term expires.4秘密文件Strictly Confidential1.4转让被购买股权Transfer of Optioned Interests甲方每次行使股权购买权时：For each exercise of the Equity Interest Purchase Option:1.4.1乙方应责成丙方及时召开股东会会议，在该会议上，应通过批准乙方向甲方和/或被指定人转让被购买的股权的决议；Party B shall cause Party C to promptly convene a shareholders meeting, at which a resolution shall be adopted approving Party B’stransfer of the Optioned Interests to Party A and/or the Designee(s);1.4.2乙方应就其向甲方和/或被指定人转让被购买股权取得丙方其他股东同意该转让并放弃优先购买权的书面声明。Party B shall obtain written statements from the other shareholder of Party C giving consent to the transfer of the equity interest to PartyA and/or the Designee(s) and waiving any right of first refusal related thereto.1.4.3乙方应与甲方和/或(在适用的情况下)被指定人按照本协议及股权购买通知的规定，为每次转让签订股权转让协议；Party B shall execute a share transfer contract with respect to each transfer with Party A and/or each Designee (whichever is applicable),in accordance with the provisions of this Agreement and the Equity Interest Purchase Option Notice regarding the Optioned Interests;5秘密文件Strictly Confidential1.4.4有关方应签署所有其他所需协议、协议或文件，取得全部所需的政府批准和同意，并采取所有所需行动，在不附带任何担保权益的情况下，将被购买的股权的有效所有权转移给甲方和/或被指定人并使甲方和/或被指定人成为被购买的股权的登记在册所有人。为本款及本协议的目的，“担保权益”包括担保、抵押、第三方权利或权益，任何购股权、收购权、优先购买权、抵销权、所有权扣留或其他担保安排等；但为了明确起见，不包括在本协议、乙方股权质押协议项下产生的任何担保权益。本款及本协议所规定的“乙方股权质押协议”指甲方、乙方和丙方于本协议签署之日签订的股权质押协议，根据股权质押协议，乙方为担保丙方能履行丙方与甲方签订的独家业务合作协议项下的义务，而向甲方质押其在丙方的全部乙方股权。The relevant Parties shall execute all other necessary contracts, agreements or documents, obtain all necessary government licenses andpermits and take all necessary actions to transfer valid ownership of the Optioned Interests to Party A and/or the Designee(s),unencumbered by any security interests, and cause Party A and/or the Designee(s) to become the registered owner(s) of the OptionedInterests. For the purpose of this Section and this Agreement, “security interests” shall include securities, mortgages, third party’s rightsor interests, any stock options, acquisition right, right of first refusal, right to offset, ownership retention or other security arrangements,but shall be deemed to exclude any security interest created by this Agreement and Party B’s Equity Interest Pledge Agreement. “PartyB’s Equity Interest Pledge Agreement” as used in this Section and this Agreement shall refer to the Equity Interest Pledge Agreementexecuted by and among Party A, Party B and Party C on the date of this Agreement, whereby Party B pledge all of their equity interests inParty C to Party A, in order to guarantee Party C’s performance of its obligations under the Exclusive Business Corporation Agreementexecuted by and between Party C and Party A.6秘密文件Strictly Confidential2.知识产权独家购买权Exclusive Option regarding the Intellectual Property Rights2.1本协议签订之日起，若乙方拟转让、出售或以其他方式处置（任一处置方式以下简称“转让”）其拥有或持有的全部或部分知识产权（以下称“知识产权”，定义见第2.4条），甲方有权独家购买该等知识产权。From the date hereof, if Party B proposes to transfer, sell or dispose of (each, a “transfer”) all or any part of the intellectual property rights ownedor held by Party B (“IPR”), Party A shall have exclusive option.2.2若乙方有意转让全部或部分知识产权，应事先向甲方发出书面通知(“转让通知”)，转让通知应载明以下事项：(a) 乙方关于转让知识产权的意向；(b) 乙方拟转让的知识产权清单(“拟转让知识产权”)及转让的价格和其他条件。转让通知视为乙方向甲方发出的一份要约，按照该要约，乙方同意按转让通知中指定的价格条件向甲方转让全部或部分拟转让知识产权。Prior to Party B proposes to transfer all or any part of its IPR, Party B shall give Party A a written notice (“Transfer Notice”), which shall specify (a)Party B’s intention to make the transfer; (b) the list of IPR to be transferred (“Offered IPR”) and the consideration and other conditions uponwhich the transfer is to be made. The Transfer Notice constitutes Party B’s offer given to Party A, pursuant to which, Party B agrees to transfer allor any part of its Offered IPR to Party A based on the same conditions described in the Transfer Notice.7秘密文件Strictly Confidential2.3甲方收到转让通知后，有权在30日内选择按照转让通知中列明的转让价格和条件购买拟转让知识产权。如果甲方行使其独家购买权，双方应于甲方收到转让通知后45日内签订有关的知识产权转让协议，乙方应办理法律规定的知识产权转让的批准和登记手续。Party A shall have an option for a period of 30 days from Party A’s receipt of the Transfer Notice to elect to purchase the Offered IPR at the sameprice and subject to the same conditions as described in the Transfer Notice. If Party A decides to exercise its exclusive option, the parties shallenter into relevant IPR transfer agreement within 45 days upon Party A’s receipt of the Transfer Notice and Party B is responsible to complete allrelated approvals and registrations formalities as prescribed by the PRC law.2.4本协议第2条所称“知识产权”指任何知识产权，包括但不限于著作权、专利权、专利申请权、商标、域名、软件、专有技术，并包括前述知识产权申请权利以及登记注册的权利，以及其他所有与前述知识产权有关的权利和权益。The “IPR” referred to in this Article 2 means any intellectual property rights, including, without limitations, copyrights, patents, patentapplications, trademarks, domain names, software and knowhow together with (a) all rights to apply for or register any of the foregoing and (b) allother rights and interests to any of the foregoing.8秘密文件Strictly Confidential3.承诺Covenants3.1有关丙方的承诺Covenants regarding Party C乙方（作为丙方的股东）和丙方在此承诺：Party B (as the shareholders of Party C) and Party C hereby covenant as follows:3.1.1未经甲方的事先书面同意，不以任何形式补充、更改或修改丙方公司章程文件，增加或减少其注册资本，或以其他方式改变其注册资本结构；Without the prior written consent of Party A, they shall not in any manner supplement, change or amend the articles of association andbylaws of Party C, increase or decrease its registered capital, or change its structure of registered capital in other manners;3.1.2按照良好的财务和商业标准及惯例，保持其公司的存续，审慎地及有效地经营其业务和处理事务；They shall maintain Party C’s corporate existence in accordance with good financial and business standards and practices by prudentlyand effectively operating its business and handling its affairs;3.1.3未经甲方的事先书面同意，不在本协议签署之日起的任何时间出售、转让、抵押或以其他方式处置丙方的任何资产、业务或收入的合法或受益权益，或允许在其上设置任何其他担保权益；Without the prior written consent of Party A, they shall not at any time following the date hereof, sell, transfer, mortgage or dispose of inany manner any assets of Party C or legal or beneficial interest in the business or revenues of Party C, or allow the encumbrance thereonof any security interest;3.1.4未经甲方的事先书面同意，不发生、继承、保证或容许存在任何债务，但(i)正常或日常业务过程中产生而不是通过借款方式产生的债务；和(ii)已向甲方披露和得到甲方书面同意的债务除外；Without the prior written consent of Party A, they shall not incur, inherit, guarantee or suffer the existence of any debt, except for (i)debts incurred in the ordinary course of business other than through loans; and (ii) debts disclosed to Party A for which Party A’swritten consent has been obtained;9秘密文件Strictly Confidential3.1.5一直在正常业务过程中经营所有业务，以保持丙方的资产价值，不进行任何足以影响其经营状况和资产价值的作为/不作为；They shall always operate all of Party C’s businesses during the ordinary course of business to maintain the asset value of Party C andrefrain from any action/omission that may affect Party C’s operating status and asset value;3.1.6未经甲方的事先书面同意，不得让丙方签订任何重大协议，但在正常业务过程中签订的协议除外(就本段而言，如果一份协议的价值超过【人民币10万元】，即被视为重大协议)；Without the prior written consent of Party A, they shall not cause Party C to execute any major contract, except the contracts in theordinary course of business (for purpose of this subsection, a contract with a value exceeding RMB 100,000 shall be deemed a majorcontract);3.1.7未经甲方的事先书面同意，丙方不得向任何人提供贷款或信贷；Without the prior written consent of Party A, they shall not cause Party C to provide any person with any loan or credit;3.1.8应甲方要求，向其提供所有关于丙方的营运和财务状况的资料；They shall provide Party A with information on Party C’s business operations and financial condition at Party A’s request;10秘密文件Strictly Confidential3.1.9如甲方提出要求，丙方应从甲方接受的保险公司处购买和持有有关其资产和业务的保险，该保险的金额和险种应与经营类似业务的公司一致；If requested by Party A, they shall procure and maintain insurance in respect of Party C’s assets and business from an insurance carrieracceptable to Party A, at an amount and type of coverage typical for companies that operate similar businesses;3.1.10未经甲方的事先书面同意，丙方不得与任何人合并或联合，或对任何人进行收购或投资；Without the prior written consent of Party A, they shall not cause or permit Party C to merge, consolidate with, acquire or invest in anyperson;3.1.11将发生的或可能发生的与丙方资产、业务或收入有关的诉讼、仲裁或行政程序立即通知甲方；They shall immediately notify Party A of the occurrence or possible occurrence of any litigation, arbitration or administrative proceedingsrelating to Party C’s assets, business or revenue;3.1.12为保持丙方对其全部资产的所有权，签署所有必要或适当的文件，采取所有必要或适当的行动和提出所有必要或适当的控告或对所有索偿进行必要和适当的抗辩；To maintain the ownership by Party C of all of its assets, they shall execute all necessary or appropriate documents, take all necessary orappropriate actions and file all necessary or appropriate complaints or raise necessary and appropriate defenses against all claims;11秘密文件Strictly Confidential3.1.13未经甲方事先书面同意，不得以任何形式派发股息予各股东，但一经甲方要求，丙方应立即将其所有可分配利润全部立即分配给其各股东；及Without the prior written consent of Party A, they shall ensure that Party C shall not in any manner distribute dividends to itsshareholders, provided that upon Party A’s written request, Party C shall immediately distribute all distributable profits to itsshareholders; and3.1.14根据甲方的要求，委任由其指定的任何人士出任丙方的董事和/或执行董事。At the request of Party A, they shall appoint any persons designated by Party A as the director and/or executive director of Party C.3.2乙方和丙方的承诺Covenants of Party B and Party C乙方承诺：Party B hereby covenant as follows:3.2.1未经甲方的事先书面同意，不出售、转让、抵押或以其他方式处置其拥有的丙方的股权的合法或受益权益，或允许在其上设置任何其他担保权益，但根据乙方签署的《股权质押协议》在该股权上设置的质押则除外；Without the prior written consent of Party A, Party B shall not sell, transfer, mortgage or dispose of in any other manner any legal orbeneficial interest in the equity interests in Party C held by Party B, or allow the encumbrance thereon of any security interest, except forthe pledge placed on these equity interests in accordance with Party B’s Equity Interest Pledge Agreement;12秘密文件Strictly Confidential3.2.2促使丙方股东会和/或执行董事不批准在未经甲方的事先书面同意的情况下，出售、转让、抵押或以其他方式处置任何乙方持有之丙方的股权的合法权益或受益权，或允许在其上设置任何其他担保权益，但批准根据乙方签署的《股权质押协议》在乙方股权上设置的质押则除外；Party B shall cause the shareholders’ meeting and/or the executive director of Party C not to approve the sale, transfer, mortgage ordisposition in any other manner of any legal or beneficial interest in the equity interests in Party C held by Party B, or allow theencumbrance thereon of any security interest, without the prior written consent of Party A, except for the pledge placed on these equityinterests in accordance with Party B’s Equity Interest Pledge Agreement;3.2.3未经甲方的事先书面同意的情况下，对于丙方与任何人合并或联合，或对任何人进行收购或投资，乙方将促成丙方股东会或执行董事不予批准；Party B shall cause the shareholders’ meeting or the executive director of Party C not to approve the merger or consolidation with anyperson, or the acquisition of or investment in any person, without the prior written consent of Party A;3.2.4将发生的或可能发生的任何关于其所拥有的股权的诉讼、仲裁或行政程序立即通知甲方；Party B shall immediately notify Party A of the occurrence or possible occurrence of any litigation, arbitration or administrativeproceedings relating to the equity interests in Party C held by Party B;13秘密文件Strictly Confidential3.2.5促使丙方股东会或执行董事表决赞成本协议规定的被购买的股权的转让并应甲方之要求采取其他任何行动；Party B shall cause the shareholders’ meeting or the executive director of Party C to vote their approval of the transfer of the OptionedInterests as set forth in this Agreement and to take any and all other actions that may be requested by Party A;3.2.6为保持其对股权的所有权，签署所有必要或适当的文件，采取所有必要或适当的行动和提出所有必要或适当的控告或对所有索偿进行必要和适当的抗辩；To the extent necessary to maintain Party B’s ownership in Party C, Party B shall execute all necessary or appropriate documents, take allnecessary or appropriate actions and file all necessary or appropriate complaints or raise necessary and appropriate defenses against allclaims;3.2.7应甲方的要求，委任由其指定的任何人士出任丙方的董事和/或执行董事；Party B shall appoint any designee of Party A as the director and/or executive director of Party C, at the request of Party A;3.2.8经甲方随时要求，应向其指定的代表在任何时间无条件地根据本协议的股权购买权立即转让其股权，并放弃其对其他现有股东进行上述股权转让所享有的优先购买权（如有的话）；和At the request of Party A at any time, Party B shall promptly and unconditionally transfer its equity interests in Party C to Party A’sDesignee(s) in accordance with the Equity Interest Purchase Option under this Agreement, and Party B hereby waives its right of firstrefusal (if any) to the share transfer by the other existing shareholder of Party C (if any); and14秘密文件Strictly Confidential3.2.9严格遵守本协议及各方共同或分别签订的其他协议的各项规定，切实履行该等协议项下的各项义务，并不进行任何足以影响该等协议的有效性和可执行性的作为/不作为。如果乙方对于本协议项下或乙方股权质押协议下或对甲方的授权委托书中的股权，还留存有任何权利，除非甲方书面指示，否则乙方仍不得行使该权利。Party B shall strictly abide by the provisions of this Agreement and other contracts jointly or separately executed by and among Party B,Party C and Party A, perform the obligations hereunder and thereunder, and refrain from any action/omission that may affect theeffectiveness and enforceability thereof. To the extent that Party B has any remaining rights with respect to the equity interests subject tothis Agreement hereunder or under Party B’s Equity Interest Pledge Agreement or under the Power of Attorney granted in favor of PartyA, Party B shall not exercise such rights except in accordance with the written instructions of Party A.4.陈述和保证Representations and Warranties乙方和丙方特此在本协议签署之日和每一个转让日向甲方共同及分别陈述和保证如下：Party B and Party C hereby represent and warrant to Party A, jointly and severally, as of the date of this Agreement and each date of transfer of theOptioned Interests, that:4.1其具有签订和交付本协议和其为一方的、根据本协议为每一次转让被购买的股权而签订的任何股权转让协议(各称为"转让协议")，并履行其在本协议和任何转让协议项下的义务的权力和能力。乙方和丙方同意在甲方行使购买权时，他们将签署与本协议条款一致的转让协议。本协议和其是一方的各转让协议一旦签署后，构成或将对其构成合法、有效及具有约束力的义务并可按照其条款对其强制执行；They have the authority to execute and deliver this Agreement and any share transfer contracts to which they are a party concerning theOptioned Interests to be transferred thereunder (each, a “Transfer Contracts”), and to perform their obligations under this Agreement and anyTransfer Contracts. Party B and Party C agree to enter into Transfer Contracts consistent with the terms of this Agreement upon Party A’s exerciseof the Equity Interest Purchase Option. This Agreement and the Transfer Contracts to which they are a party constitute or will constitute theirlegal, valid and binding obligations and shall be enforceable against them in accordance with the provisions thereof;15秘密文件Strictly Confidential4.2无论是本协议或任何转让协议的签署和交付还是其在本协议或任何转让协议项下的义务的履行均不会：(i)导致违反任何有关的中国法律；(ii)与丙方章程或其他组织文件相抵触；(iii)导致违反其是一方或对其有约束力的任何协议或文件，或构成其是一方或对其有约束力的任何协议或文件项下的违约；(iv)导致违反有关向任何一方颁发的任何许可或批准的授予和(或)继续有效的任何条件；或(v)导致向任何一方颁发的任何许可或批准中止或被撤销或附加条件；The execution and delivery of this Agreement or any Transfer Contracts and the obligations under this Agreement or any Transfer Contracts shallnot: (i) cause any violation of any applicable laws of China; (ii) be inconsistent with the articles of association, bylaws or other organizationaldocuments of Party C; (iii) cause the violation of any contracts or instruments to which they are a party or which are binding on them, orconstitute any breach under any contracts or instruments to which they are a party or which are binding on them; (iv) cause any violation of anycondition for the grant and/or continued effectiveness of any licenses or permits issued to either of them; or (v) cause the suspension orrevocation of or imposition of additional conditions to any licenses or permits issued to either of them;4.3乙方对其在丙方拥有的股权拥有良好和可出售的所有权，除乙方签署的《股权质押协议》外，乙方在上述股权上没有设置任何担保权益；Party B have a good and merchantable title to the equity interests in Party C they hold. Except for Party B’s Equity Interest Pledge Agreement,Party B have not placed any security interest on such equity interests;16秘密文件Strictly Confidential4.4目前没有悬而未决的或构成威胁的与丙方的股权、丙方资产有关的或与丙方有关的诉讼、仲裁或行政程序。There are no pending or threatened litigation, arbitration or administrative proceedings relating to the equity interests in Party C, assets of Party Cor Party C.5.生效日Effective Date5.1本协议于各方签署本协议之日生效，有效期10年，经甲方选择可再延长10年。This Agreement shall become effective upon the date hereof, and remain effective for a term of 10 years, and may be renewed for an additional 10years at Party A’s election.5.2若丙方股东发生变化，由新股东签署此协议，在此协议签署之日，原协议自动视为无效。In the event of a change in the shareholders of Party C, the new shareholder should sign this agreement and the original agreement willautomatically be deemed invalid on the date of signing of this agreement.17秘密文件Strictly Confidential6.适用法律与争议解决Governing Law and Resolution of Disputes6.1适用法律Governing law本协议的订立、效力、解释、履行、修改和终止以及争议解决均适用中国正式公布并可公开得到的法律。对中国正式公布并可公开得到的法律没有规定的事项，将适用国际法律原则和惯例。The execution, effectiveness, construction, performance, amendment and termination of this Agreement and the resolution of disputes hereundershall be governed by the formally published and publicly available laws of China. Matters not covered by formally published and publiclyavailable laws of China shall be governed by international legal principles and practices.6.2争议的解决方法Methods of Resolution of Disputes因解释和履行本协议而发生的任何争议，本协议各方应首先通过友好协商的方式加以解决。如果在一方向其他方发出要求协商解决的书面通知后30天之内争议仍然得不到解决，则任何一方均可将有关争议提交给中国国际经济贸易仲裁委员会，由该会按照其届时有效的仲裁规则仲裁解决。仲裁应在北京进行，使用之语言为中文。仲裁裁决是终局性的，对各方均有约束力。In the event of any dispute with respect to the construction and performance of this Agreement, the Parties shall first resolve the dispute throughfriendly negotiations. In the event the Parties fail to reach an agreement on the dispute within 30 days after either Party’s request to the otherParties for resolution of the dispute through negotiations, either Party may submit the relevant dispute to the China International Economic andTrade Arbitration Commission for arbitration, in accordance with its then effective arbitration rules. The arbitration shall be conducted in Beijing,and the language used in arbitration shall be Chinese. The arbitration award shall be final and binding on all Parties.18秘密文件Strictly Confidential7.税款、费用Taxes and Fees每一方应承担根据中国法律因准备和签署本协议和各转让协议以及完成本协议和各转让协议拟定的交易而由该方发生的或对其征收的任何和全部的转让和注册的税、花费和费用。Each Party shall pay any and all transfer and registration tax, expenses and fees incurred thereby or levied thereon in accordance with the laws of China inconnection with the preparation and execution of this Agreement and the Transfer Contracts, as well as the consummation of the transactionscontemplated under this Agreement and the Transfer Contracts.8.通知Notices8.1本协议项下要求或发出的所有通知和其他通信应通过专人递送、挂号邮寄、邮资预付或商业快递服务或传真的方式发到该方下列地址。每一通知还应再以电子邮件送达。该等通知视为有效送达的日期按如下方式确定：All notices and other communications required or permitted to be given pursuant to this Agreement shall be delivered personally or sent byregistered mail, postage prepaid, by a commercial courier service or by facsimile transmission to the address of such Party set forth below. Aconfirmation copy of each notice shall also be sent by email. The dates on which notices shall be deemed to have been effectively given shall bedetermined as follows:8.1.1通知如果是以专人递送、快递服务或挂号邮寄、邮资预付发出的，则以于设定为通知的地址在接收或拒收之日为有效送达日。Notices given by personal delivery, by courier service or by registered mail, postage prepaid, shall be deemed effectively given on thedate of receipt or refusal at the address specified for notices.19秘密文件Strictly Confidential8.1.2通知如果是以传真发出的，则以成功传送之日为有效送达日（应以自动生成的传送确认信息为证）。Notices given by facsimile transmission shall be deemed effectively given on the date of successful transmission (as evidenced by anautomatically generated confirmation of transmission).8.2为通知的目的，各方地址如下：For the purpose of notices, the addresses of the Parties are as follows:甲方：中传天下信息科技（深圳）有限公司Party A:Zhongchuan Tianxia Information Technology (Shenzhen) Co., Ltd.地址：深圳市南山区高新中三道2号深圳软件园一期五栋401AAddress:401A, Building 5, Phase 1, Shenzhen Software Park, No.2 Gaoxin Zhongsan Road, Nanshan District, Shenzhen.收件人：洪婷Attn:Hong Ting乙方：Party B: 宋雪松Song Xuesong住所：天津市河西区广东路中裕园33702Address:Zhongyu Yuan 33702, Guangdong Road, Hexi District, Tianjin20秘密文件Strictly Confidential陈蔚力Chen Weili住所：广东省深圳市宝安区宝城上川路15号Address:Baocheng Shangchuan Road 15, Baoan District, Shenzhen, Guangdong王平Wang Ping住所：广东省深圳市南山区高新南环路36号彩虹之岸12栋4AAddress:Caihong Zhi’an Building No.12 Suite 4A, Gaoxin Nanhuan Road 36, Nanshan District, Shenzhen, Guangdong刘东来Liu Donglai住所：天津市和平区南京路诚基经贸中心1号楼2门1702号Address:No 1702, Door 2, Build 1, Chengji Economic and Trade Centre, Nanjing Road, Heping District, Tianjin.丙方：北京中传视讯科技有限公司Party C:Beijing Mobile Vision Technology Co., Ltd.地址：北京市朝阳区光华路9号SOHO3QLAB32Address: LAB32, SOHO3Q, No 9, Guanghua Road, Chaoyang District, Beijing .收件人：宋雪松Attn: Song Xuesong8.3任何一方可按本条规定随时给其他方发出通知来改变其接收通知的地址。Any Party may at any time change its address for notices by a notice delivered to the other Parties in accordance with the terms hereof.21秘密文件Strictly Confidential9.保密责任Confidentiality各方承认及确定彼此就有关本协议而交换的任何口头或书面资料均属机密资料。各方应当对所有该等资料予以保密，而在未得其他方书面同意前，不得向任何第三者披露任何有关资料，惟下列情况除外：(a)公众人士知悉或将会知悉该等资料(并非由接受资料之一方擅自向公众披露)；(b)适用法律法规或股票交易的规则或规例所需披露之资料；或(c)由任何一方就本协议所述交易而需向其法律或财务顾问披露之资料而该法律或财务顾问亦需遵守与本条款相类似之保密责任。如任何一方工作人员或聘请机构的泄密均视为该方的泄密，需依本协议承担违约责任。无论本协议以任何理由终止，本条款仍然生效。The Parties acknowledge that any oral or written information exchanged among them with respect to this Agreement is confidential information. Each Partyshall maintain the confidentiality of all such information, and without obtaining the written consent of other Parties, it shall not disclose any relevantinformation to any third parties, except in the following circumstances: (a) such information is or will be in the public domain (provided that this is not theresult of a public disclosure by the receiving party); (b) information disclosed as required by applicable laws or rules or regulations of any stock exchange;or (c) information required to be disclosed by any Party to its legal counsel or financial advisor regarding the transaction contemplated hereunder, and suchlegal counsel or financial advisor are also bound by confidentiality duties similar to the duties in this section. Disclosure of any confidential information bythe staff members or agency hired by any Party shall be deemed disclosure of such confidential information by such Party, which Party shall be held liablefor breach of this Agreement. This Section shall survive the termination of this Agreement for any reason.22秘密文件Strictly Confidential10.进一步保证Further Warranties各方同意迅速签署为执行本协议的各项规定和目的而合理需要的或对其有利的文件，以及为执行本协议的各项规定和目的而采取合理需要的或对其有利的进一步行动。The Parties agree to promptly execute documents that are reasonably required for or are conducive to the implementation of the provisions and purposes ofthis Agreement and take further actions that are reasonably required for or are conducive to the implementation of the provisions and purposes of thisAgreement.11.其他Miscellaneous11.1修订、修改与补充Amendment, change and supplement对本协议作出修订、修改与补充，必须经每一方签署书面协议。Any amendment, change and supplement to this Agreement shall require the execution of a written agreement by all of the Parties.11.2完整协议Entire agreement除了在本协议签署后所作出的书面修订、补充或修改以外，本协议构成本协议各方就本协议标的物所达成的完整协议，取代在此之前就本协议标的物所达成的所有口头或书面的协商、陈述和协议。 Except for the amendments, supplements or changes in writing executed after theexecution of this Agreement, this Agreement shall constitute the entire agreement reached by and among the Parties hereto with respect to thesubject matter hereof, and shall supercede all prior oral and written consultations, representations and contracts reached with respect to thesubject matter of this Agreement.23秘密文件Strictly Confidential11.3标题Headings本协议的标题仅为方便阅读而设，不应被用来解释、说明或在其他方面影响本协议各项规定的含义。The headings of this Agreement are for convenience only, and shall not be used to interpret, explain or otherwise affect the meanings of theprovisions of this Agreement.11.4语言Language本协议以中文和英文书就，一式八份，乙方共计六名股东以及甲方、丙方各持一份，具有同等效力；中英文版本如有冲突，应以中文版为准。This Agreement is written in both Chinese and English language in eight copies, the 6 shareholders of Party B, Party A and Party C having onecopy with equal legal validity respectively; in case there is any conflict between the Chinese version and the English version, the Chinese versionshall prevail.11.5可分割性Severability如果本协议有任何一条或多条规定根据任何法律或法规在任何方面被裁定为无效、不合法或不可执行，本协议其余规定的有效性、合法性或可执行性不应因此在任何方面受到影响或损害。各方应通过诚意磋商，争取以法律许可以及各方期望的最大限度内有效的规定取代那些无效、不合法或不可执行的规定，而该等有效的规定所产生的经济效果应尽可能与那些无效、不合法或不能强制执行的规定所产生的经济效果相似。In the event that one or several of the provisions of this Agreement are found to be invalid, illegal or unenforceable in any aspect in accordancewith any laws or regulations, the validity, legality or enforceability of the remaining provisions of this Agreement shall not be affected orcompromised in any respect. The Parties shall strive in good faith to replace such invalid, illegal or unenforceable provisions with effectiveprovisions that accomplish to the greatest extent permitted by law and the intentions of the Parties, and the economic effect of such effectiveprovisions shall be as close as possible to the economic effect of those invalid, illegal or unenforceable provisions.24秘密文件Strictly Confidential11.6继任者Successors本协议对各方各自的继任者和各方所允许的受让方应具有约束力并对其有利。This Agreement shall be binding on and shall inure to the interest of the respective successors of the Parties and the permitted assigns of suchParties.11.7继续有效Survival11.7.1协议期满或提前终止前因本协议而发生的或到期的任何义务在本协议期满或提前终止后继续有效。Any obligations that occur or that are due as a result of this Agreement upon the expiration or early termination of this Agreement shallsurvive the expiration or early termination thereof.11.7.2本协议第5、6、9条和本第11.7条的规定在本协议终止后继续有效。The provisions of Articles 5, 6, 9 and this Section 11.7 shall survive the termination of this Agreement.25秘密文件Strictly Confidential11.8弃权Waivers任何一方可以对本协议的条款和条件作出弃权，但必须经书面作出并经各方签字。一方在某种情况下就其他方的违约所作的弃权不应被视为该方在其他情况下就类似的违约已经对其他方作出弃权。Any Party may waive the terms and conditions of this Agreement, provided that such a waiver must be provided in writing and shall require thesignatures of the Parties. No waiver by any Party in certain circumstances with respect to a breach by other Parties shall operate as a waiver bysuch a Party with respect to any similar breach in other circumstances.本页其余部分刻意留为空白The Remainder of this page is intentionally left blank26秘密文件Strictly Confidential有鉴于此，各方已自行或使得其各自授权代表于文首所载日期签署本独家购买权协议。IN WITNESS WHEREOF, the Parties have executed, or caused their respective duly authorized representatives to execute, this Exclusive Option Agreement as ofthe date first above written.甲方：中传天下信息科技（深圳）有限公司（盖章）Party A: Zhongchuan Tianxia Information Technology (Shenzhen) Co., Ltd. (Seal)签字：By:/s/ Hong Ting姓名：洪婷Name: Hong Ting职务：总经理Title: General Manager秘密文件 Strictly Confidential有鉴于此，各方已自行或使得其各自授权代表于文首所载日期签署本独家购买权协议。IN WITNESS WHEREOF, the Parties have executed, or caused their respective duly authorized representatives to execute, this Exclusive Option Agreement as ofthe date first above written.乙方：Party B:宋雪松Song Xuesong签字：By:/s/ Song Xuesong秘密文件 Strictly Confidential有鉴于此，各方已自行或使得其各自授权代表于文首所载日期签署本独家购买权协议。IN WITNESS WHEREOF, the Parties have executed, or caused their respective duly authorized representatives to execute, this Exclusive Option Agreement as ofthe date first above written.乙方：Party B:陈蔚力Chen Weili签字：By:/s/ Chen Weili秘密文件 Strictly Confidential有鉴于此，各方已自行或使得其各自授权代表于文首所载日期签署本独家购买权协议。IN WITNESS WHEREOF, the Parties have executed, or caused their respective duly authorized representatives to execute, this Exclusive Option Agreement as ofthe date first above written.乙方：Party B:王平Wang Ping签字：By:/s/ Wang Ping秘密文件 Strictly Confidential有鉴于此，各方已自行或使得其各自授权代表于文首所载日期签署本独家购买权协议。IN WITNESS WHEREOF, the Parties have executed, or caused their respective duly authorized representatives to execute, this Exclusive Option Agreement as ofthe date first above written.乙方：Party B:刘东来Liu Donglai签字：By:/s/ Liu Donglai秘密文件 Strictly Confidential有鉴于此，各方已自行或使得其各自授权代表于文首所载日期签署本独家购买权协议。IN WITNESS WHEREOF, the Parties have executed, or caused their respective duly authorized representatives to execute, this Exclusive Option Agreement as ofthe date first above written.丙方：北京中传视讯科技有限公司（盖章）Party B: Beijing Mobile Vision Technology Co., Ltd. (Seal)签字：By:/s/ Song Xuesong姓名：宋雪松Name:Song Xuesong职务：董事长Title:Chairman of the Board秘密文件 Strictly ConfidentialEX4.17 5 f20f2017ex417_luokung.htm EQUITY INTEREST PLEDGE AGREEMENT BY AND AMONG ZHONGCHUAN TIANXIA INFORMATION TECHNOLOGY(SHENZHEN) CO., LTD., XUESONG SONG, WEILI CHEN, PING WANG, DONGLAI LIU, AND BEIJING MOBILE VISION TECHNOLOGY CO., LTD., DATEDAUGUST 31, 2015Exhibit 4.17股权质押协议Equity Interest Pledge Agreement本股权质押协议（下称"本协议”）由下列各方于年月日在中华人民共和国（下称“中国”）北京签订：This Equity Interest Pledge Agreement (this "Agreement") has been executed by and among the following parties on in Beijing, the People’sRepublic of China (the “China” or “PRC”):甲方：中传天下信息科技（深圳）有限公司（下称“质权人”）Party A: Zhongchuan Tianxia Information Technology (Beijing) Co., Ltd. (“Pledgee”)地址：深圳市南山区高新中三道2号深圳软件园一期五栋401AAddress: 401A, Building 5, Phase 1, Shenzhen Software Park, No.2 Gaoxin Zhongsan Road, Nanshan District, Shenzhen统一社会信用代码： 91440300565701058RUniform Social Credit Code: 91440300565701058R乙方(下称“出质人”)：Party B ( “Pledgors”):a)宋雪松Song Xuesong身份证号码:ID Card No.:b)陈蔚力Chen Weili身份证号码:ID Card No.:1秘密文件 Strictly Confidentialc)王平Wang Ping身份证号码:ID Card No.:d)刘东来Liu Donglai身份证号码:ID Card No.:丙方：北京中传视讯科技有限公司Party C: Beijing Mobile Vision Technology Co., Ltd.地址：北京市朝阳区光华路9号SOHO3QLAB32Address: LAB32, SOHO3Q, No 9, Guanghua Road, Chaoyang District, Beijing统一社会信用代码：9111010576215249XMUniform Social Credit Code: 9111010576215249XM在本协议中，质权人、出质人和丙方以下各称“一方”，合称“各方”。In this Agreement, each of Pledgee, Pledgors and Party C shall be referred to as a "Party" respectively, and they shall be collectively referred to as the"Parties".鉴于：Whereas:1．出质人全部为中国境内居民自然人，共同持有丙方100%的股权。丙方是一家在中国注册成立的、主要从事手机视频技术研发、内容制作和产业化市场推广的有限责任公司。丙方有意在此确认出质人和质权人在本协议下的权利和义务并提供必要的协助登记该质权；All of the Pledgors are natural persons resided in PRC, and collectively hold 100% of the equity interest in Party C. Party C is a limited company registered inChina, mainly engaging in mobile video frequency technology research, development, content creation, sale and related industrialization promotion. Party Cacknowledges the respective rights and obligations of Pledgors and Pledgee under this Agreement, and intends to provide any necessary assistance inregistering the Pledge;2．质权人是一家在中国注册的外商独资企业。质权人与丙方于年月日签订了独家业务合作协议；Pledgee is a whollyforeignowned enterprise registered in China. Pledgee and Party C have executed an Exclusive Business Cooperation Agreement as of [*],[*];3．为了保证丙方全面履行独家业务合作协议项下的义务，出质人以其拥有的全部丙方股权向质权人做出质押担保。To ensure that Party C fully performs its obligations under the Exclusive Business Cooperation Agreement, Pledgors hereby pledge to the Pledgee all of theequity interests they hold in Party C.为了履行业务合作协议的条款，各方商定按照以下条款签订本协议。To perform the provisions of the Business Cooperation Agreement, the Parties have mutually agreed to execute this Agreement upon the following terms.2秘密文件 Strictly Confidential1.定义Definitions除非本协议另有规定，下列词语含义为：Unless otherwise provided herein, the terms below shall have the following meanings:1.1质权：指出质人根据本协议第2条给予质权人的担保物权，即指质权人所享有的，以出质人质押给质权人的股权折价或拍卖、变卖该股权的价款优先受偿的权利。Pledge: shall refer to the security interest granted by Pledgors to Pledgee pursuant to Article 2 of this Agreement, i.e., the right of Pledgee to becompensated on a preferential basis with the conversion, auction or sales price of the Equity Interest.1.2股权：指出质人现在和将来（通过增资和/或转股）合法持有的其在丙方的全部股权权益。Equity Interest: shall refer to all of the equity interest in Party C lawfully, held now and to be held (through capital increase and/or equity transfer)hereafter by Pledgors.1.3质押期限：指本协议第3条规定的期间。Term of Pledge: shall refer to the term set forth in Article 3 of this Agreement.1.4业务合作协议：指丙方与质权人于本协议日签订的独家业务合作协议。Business Cooperation Agreement: shall refer to the Exclusive Business Cooperation Agreement executed by and between Party C and Pledgee on thedate of this Agreement.1.5违约事件：指本协议第7条所列任何情况。Event of Default: shall refer to any of the circumstances set forth in Article 7 of this Agreement.1.6违约通知：指质权人根据本协议发出的宣布违约事件的通知。Notice of Default: shall refer to the notice issued by Pledgee in accordance with this Agreement declaring an Event of Default.3秘密文件 Strictly Confidential2.质权The Pledge作为丙方按时和全额支付业务合作协议项下质权人应得的任何或全部的款项，包括但不限于业务合作协议中规定的咨询和服务费的担保（无论该等费用的到期应付是由于到期日的到来、提前收款的要求或其它原因），以及丙方充分履行其在业务合作协议项下其他所有义务（丙方按时和全额支付业务合作协议项下甲方应得的任何或全部的款项及丙方在业务合作协议项下其他所有义务，以下统称为“被担保债务”）的担保，出质人特此将其现有或将拥有的丙方的全部股权权益质押给质权人。As collateral security for the timely and complete payment and performance when due (whether at stated maturity, by acceleration or otherwise) of any or all ofthe payments due (the “all payments in pledge”) by Party C, including without limitation the consulting and services fees payable to the Pledgee under theBusiness Cooperation Agreement, Pledgors hereby pledge to Pledgee a first security interest in all of Pledgors’ right, title and interest, whether now owned orhereafter acquired by Pledgors, in the Equity Interest of Party C.3.质押期限Term of Pledge3.1本质权自本协议项下的股权出质在相应的工商行政管理机关登记之日起生效，质权有效期持续到业务合作协议下所有丙方欠付质权人的款项结清为止。出质人和丙方应（一）自本协议签署之日起3个工作日内，将本协议的质权登记在丙方股东名册上，并（二）自本协议签署之日起10个工作日内向相应的工商行政管理机关申请登记本协议项下的质权。各方共同确认，为办理股权质押工商登记手续，各方及丙方其他股东应按照丙方所在地工商行政管理部门要求的形式签署、真实反映本协议项下质权信息的《股权质押合同》（以下简称“工商登记质押合同”）提交给工商管理机关，工商登记质押合同中未约定事项，仍以本协议约定为准。出质人和丙方应当按照中国法律法规和有关工商行政管理机关的各项要求，提交所有必要的文件并办理所有必要手续，保证质权在递交申请后尽快获得登记。如果出质人持有的丙方注册资本数额增加（不管是通过直接认缴丙方的增资还是从其他股东处受让股权），各方一致同意将采取一切必要的行动和签署一切必要的文件以按照登记机关的要求完成质权的变更登记，以确保本协议项下的质权的持续有效。The Pledge shall become effective on such date when the pledge of the Equity Interest contemplated herein has been registered’ with relevantadministration for industry and commerce (the “AIC”). The Pledge shall be continuously valid until all payments due under the Business CooperationAgreement have been fulfilled by Party C. Pledgors and Party C shall (1) register the Pledge in the shareholders' register of Party C within 3 businessdays following the execution of this Agreement, and (2) submit an application to the AIC for the registration of the Pledge of the Equity Interestcontemplated herein within 10 business days following the execution of this Agreement. The parties covenant that for the purpose of registration of thePledge, the parties hereto and all other shareholders of Party C shall submit to the AIC the Equity Interest Pledge Contract in the form required by theAIC at the location of Party C which shall truly reflect the information of the Pledge hereunder (the “AIC Pledge Contract”). For matters not specified inthe AIC Pledge Contract, the parties shall be bound by the provisions of this Agreement. Pledgors and Party C shall submit all necessary documentsand complete all necessary procedures, as required by the PRC laws and regulations and the relevant AIC, to ensure that the Pledge of the EquityInterest shall be registered with the AIC as soon as possible after filing. In the event that the amount of registered capital held by Pledgors is increased(either by subscribing increased registered capital from Party C or acquiring equity interest from other shareholders), the Parties hereto agree that theyshall take any necessary action and execute any necessary document to complete the registration of change of Pledge according to the requirement ofAIC so that the Pledge in this Agreement remains effective.4秘密文件 Strictly Confidential3.2质押期限内，如丙方未按业务合作协议交付咨询服务费等费用，质权人有权但无义务按本协议的规定处分质权。During the Term of Pledge, in the event Party C fails to pay the exclusive consulting or service fees in accordance with the Business CooperationAgreement, Pledgee shall have the right, but not the obligation, to dispose of the Pledge in accordance with the provisions of this Agreement.4.质权凭证的保管Custody of Records for Equity Interest subject to Pledge4.1在本协议规定的质押期限内，出质人应将其在丙方的股权出资证明书及记载质权的股东名册交付质权人保管。出质人应在本协议签订之日起一周内将上述股权出资证明书及股东名册交付给质权人。质权人将在本协议规定的全部质押期间一直保管这些项目。During the Term of Pledge set forth in this Agreement, Pledgors shall deliver to Pledgee's custody the capital contribution certificate for the EquityInterest and the shareholders' register containing the Pledge within one week from the execution of this Agreement. Pledgee shall have custody of suchitems during the entire Term of Pledge set forth in this Agreement.4.2在质押期限内，股权所产生的红利应当无条件归质权人所有。Dividends generated by the Equity Interest shall be unconditionally owned by the Pledgee during the Term of Pledge.5秘密文件 Strictly Confidential5.出质人的声明和保证Representations and Warranties of Pledgors5.1出质人是股权唯一的合法所有人。Pledgors are the sole legal and beneficial owners of the Equity Interest.5.2质权人有权以本协议规定的方式处分并转让股权。Pledgee shall have the right to dispose of and transfer the Equity Interest in accordance with the provisions set forth in this Agreement.5.3除本质权之外，出质人未在股权上设置任何其他质押权利或其他担保权益。Except for the Pledge, Pledgors have not placed any security interest or other encumbrance on the Equity Interest.6.出质人的承诺和确认Covenants and Further Agreements of Pledgors6.1在本协议存续期间，所有出质人向质权人承诺，出质人将：All of the Pledgors hereby covenant to the Pledgee, that during the term of this Agreement, Pledgors shall:6.1.1除履行由出质人与质权人、丙方于本协议签署日签订的《独家购买权合同》外，未经质权人事先书面同意，不得转让股权，不得在股权上设立或允许存在任何担保或其他债务负担；not transfer the Equity Interest, place or permit the existence of any security interest or other encumbrance on the Equity Interest, without theprior written consent of Pledgee, except for the performance of the Exclusive Option Agreement executed by Pledgors, the Pledgee and Party Con the execution date of this Agreement;6秘密文件 Strictly Confidential6.1.2遵守并执行所有有关权利质押的法律、法规的规定，在收到有关主管机关就质权发出或制定的通知、指令或建议时，于五日内向质权人出示上述通知、指令或建议，同时遵守上述通知、指令或建议，或按照质权人的合理要求或经质权人同意就上述事宜提出反对意见和陈述；comply with the provisions of all laws and regulations applicable to the pledge of rights, and within 5 days of receipt of any notice, order orrecommendation issued or prepared by relevant competent authorities regarding the Pledge, shall present the aforementioned notice, order orrecommendation to Pledgee, and shall comply with the aforementioned notice, order or recommendation or submit objections andrepresentations with respect to the aforementioned matters upon Pledgee's reasonable request or upon consent of Pledgee;6.1.3将任何可能导致对出质人股权或其任何部分的权利产生影响的事件或收到的通知，以及可能改变出质人在本协议中的任何保证、义务或对出质人履行其在本协议中义务可能产生影响的任何事件或收到的通知及时通知质权人。promptly notify Pledgee of any event or notice received by Pledgors that may have an impact on Pledgee's rights to the Equity Interest or anyportion thereof, as well as any event or notice received by Pledgors that may have an impact on any guarantees and other obligations ofPledgors arising out of this Agreement.6.2出质人同意，质权人按本协议条款取得的对质权享有的权利，不应受到出质人或出质人的继承人或出质人之委托人或任何其他人通过法律程序的中断或妨害。Pledgors agree that the rights acquired by Pledgee in accordance with this Agreement with respect to the Pledge shall not be interrupted or harmed byPledgors or any heirs or representatives of Pledgors or any other persons through any legal proceedings.7秘密文件 Strictly Confidential6.3出质人向质权人保证，为保护或完善本协议对偿付业务合作协议项下被担保债务的担保，出质人将诚实签署、并促使其他与质权有利害关系的当事人签署质权人所要求的所有的权利证书、契约和/或履行并促使其他有利害关系的当事人履行质权人所要求的行为，并为本协议赋予质权人之权利、授权的行使提供便利，与质权人或其指定的人(自然人/法人)签署所有的有关股权所有权的文件，并在合理期间内向质权人提供其认为需要的所有的有关质权的通知、命令及决定。To protect or perfect the security interest granted by this Agreement for payment of all payment in pledge under the Business Cooperation Agreement,Pledgors hereby undertake to execute in good faith and to cause other parties who have an interest in the Pledge to execute all certificates, agreements,deeds and/or covenants required by Pledgee. Pledgors also undertake to perform and to cause other parties who have an interest in the Pledge toperform actions required by Pledgee, to facilitate the exercise by Pledgee of its rights and authority granted thereto by this Agreement, and to enter intoall relevant documents regarding ownership of Equity Interest with Pledgee or designee(s) of Pledgee (natural persons/legal persons). Pledgorsundertake to provide Pledgee within a reasonable time with all notices, orders and decisions regarding the Pledge that are required by Pledgee.6.4出质人向质权人保证，出质人将遵守、履行本协议项下所有的保证、承诺、协议、陈述及条件。如出质人不履行或不完全履行其保证、承诺、协议、陈述及条件，出质人应赔偿质权人由此遭受的一切损失。Pledgors hereby undertake to comply with and perform all guarantees, promises, agreements, representations and conditions under this Agreement. Inthe event of failure the whole or partial performance of its guarantees, promises, agreements, representations and conditions, Pledgors shall indemnifyPledgee for all losses resulting therefrom.8秘密文件 Strictly Confidential7.违约事件Event of Default7.1下列事项均被视为违约事件：The following circumstances shall be deemed Event of Default:7.1.1丙方未能按期、完整履行任何业务合作协议项下责任，包括但不限于丙方未能按期足额支付业务合作协议项下的应付的被担保债务或有违反该协议其他义务的行为；Party C fails to fully and timely fulfill any liabilities under the Business Cooperation Agreement, including without limitation failure to pay infull any of the all payment in pledge payable under the Business Cooperation Agreement or breaches any other obligations of Party Cthereunder;7.1.2出质人或丙方实质违反本协议的任何条款；Pledgors or Party C have committed a material breach of any provisions of this Agreement;7.1.3除本协议第6.1.1条的约定外，出质人舍弃出质的股权或未获得质权人书面同意而擅自转让或意图转让出质的股权；和Except as expressly stipulated in Section 6.1.1, Pledgors transfers or purports to transfer or abandons the Equity Interest pledged or assignsthe Equity Interest pledged without the written consent of Pledgee; and7.1.4丙方的继承人或代管人只能履行部分或拒绝履行业务合作协议项下的支付责任。The successor or custodian of Party C is capable of only partially perform or refuses to perform the payment obligations under the BusinessCooperation Agreement.9秘密文件 Strictly Confidential7.2如知道或发现本第7.1条所述的任何事项或可能导致上述事项的事件已经发生，出质人应立即以书面形式通知质权人。Upon notice or discovery of the occurrence of any circumstances or event that may lead to the aforementioned circumstances described in Section 7.1,Pledgors shall immediately notify Pledgee in writing accordingly.7.3除非第7.1部分下的违约事件在质权人向出质人发出要求其修补此违约行为通知后的二十（20）天之内已经按质权人要求获得救济，质权人在其后的任何时间，可向出质人发出书面违约通知，要求依据第8部分履行其处理股权的权利。Unless an Event of Default set forth in this Section 7.1 has been successfully resolved to Pledgee's satisfaction within twenty (20) days after the Pledgeedelivers a notice to the Pledgors requesting ratification of such Event of Default, Pledgee may issue a Notice of Default to Pledgors in writing at any timethereafter, demanding the Pledgors to immediately dispose of the Pledge in accordance with the provisions of Article 8 of this Agreement.8.质权的行使Exercise of Pledge8.1在被担保债务被全部清偿或履行前，未经质权人书面同意，出质人不得转让本质权和其拥有的丙方股权。Prior to the full payment of all payments in pledge, without the Pledgee's written consent, Pledgors shall not assign the Pledge or the Equity Interest inParty C.8.2在质权人行使其质押权利时，质权人可以向出质人发出书面违约通知。Pledgee may issue a Notice of Default to Pledgors when exercising the Pledge.10秘密文件 Strictly Confidential8.3在质权人行使其质押权利时，根据中国有关法律的规定，质权人有权按照法定程序处置质押股权。仅在中国法律允许的范围内，对于处置的所得，质权人无需给付出质人；除非中国法律另有规定，出质人特此放弃其可能有的能向质权人要求任何质押股权处置所得的权利；同样，出质人对质权人在该质押股权处置后的亏损也不承担任何义务。When the Pledgor exercises the pledge right, Pledgee is entitled to dispose of the Equity Interest pledged in accordance with applicable PRC laws. Onlyto the extent permitted under applicable PRC laws, Pledgee has no obligation to account to Pledgors for proceeds of disposition of the Equity Interest.Unless otherwise required by PRC laws, Pledgors hereby waive any rights it may have to demand any such accounting from Pledgee; Likewise, in suchcircumstance Pledgors shall have no obligation to Pledgee for any deficiency remaining after such disposition of the Equity Interest pledged.8.4质权人依照本协议处分质权时，出质人和丙方应予以必要的协助，以使质权人实现其质权。When Pledgee disposes of the Pledge in accordance with this Agreement, Pledgors and Party C shall provide necessary assistance to enable Pledgee toenforce the Pledge in accordance with this Agreement.9.转让Assignment9.1除非经质权人事先同意，出质人无权赠予或转让其在本协议项下的权利义务。Without Pledgee's prior written consent, Pledgors shall not have the right to assign or delegate its rights and obligations under this Agreement.11秘密文件 Strictly Confidential9.2本协议对出质人及其继任人和经许可的受让人均有约束力，并且对质权人及每一继任人和受让人有效。This Agreement shall be binding on Pledgors and their successors and permitted assigns, and shall be valid with respect to Pledgee and each of itssuccessors and assigns.9.3经出质人同意，质权人可以在任何时候将其在业务合作协议项下的所有或任何权利和义务转让给其指定的关联方（自然人/法人），在这种情况下，受让人应享有和承担本协议项下质权人享有和承担的权利和义务，如同其作为原协议方应享有和承担的一样。质权人转让业务合作协议项下的权利和义务时，应质权人要求，出质人应就此转让签署有关协议和/或文件。Upon the Pledgors’ agreement, Pledgee may assign any or all of its rights and obligations under the Business Cooperation Agreement to its designee(s)(natural/legal persons) at any time, in which case the assigns shall have the rights and obligations of Pledgee under this Agreement, as if it were theoriginal party to this Agreement. When the Pledgee assigns the rights and obligations under the Business Cooperation Agreement, upon Pledgee'srequest, Pledgors shall execute relevant agreements or other documents relating to such assignment.9.4因转让所导致的质权人变更后，应质权人要求，出质人应与新的质权人签订一份内容与本协议一致的新质押协议，并在相应的工商行政管理机关进行登记。In the event of a change in Pledgee due to an assignment, Pledgors shall, at the request of Pledgee, execute a new pledge agreement with the newpledgee on the same terms and conditions as this Agreement, and register the same with the relevant AIC.12秘密文件 Strictly Confidential9.5出质人应严格遵守本协议和各方单独或共同签署的其他有关协议的规定，包括独家购买权合同和对质权人的授权委托书，履行各协议项下的义务，并不进行任何足以影响协议的有效性和可强制执行性的作为/不作为。除非根据质权人的书面指示，出质人不得行使其对质押股权还留存的权利。Pledgors shall strictly abide by the provisions of this Agreement and other contracts jointly or separately executed by the Parties hereto or any of them,including the Exclusive Option Agreement and the Power of Attorney granted to Pledgee, perform the obligations hereunder and thereunder, and refrainfrom any action/omission that may affect the effectiveness and enforceability thereof. Any remaining rights of Pledgors with respect to the EquityInterest pledged hereunder shall not be exercised by Pledgors except in accordance with the written instructions of Pledgee.10.终止Termination在被担保债务被全部清偿或履行完毕之后，本质权人应在尽早合理可行的时间内办理或配合办理解除质押的手续，出质人与丙方应提供相应的配合与协助。Upon the full payment of all payments in pledge under the Business Cooperation Agreement a, Pledgor shall then, with the assistance of Party B and Party C,go through the procedures of cancellation of pledge rights at a reasonable time as soon as practicable.11.手续费及其他费用Handling Fees and Other Expenses一切与本协议有关的费用及实际开支，其中包括但不限于法律费用、工本费、印花税以及任何其他税收、费用等全部由丙方承担。All fees and out of pocket expenses relating to this Agreement, including but not limited to legal costs, costs of production, stamp tax and any other taxes andfees, shall be borne by Party C.13秘密文件 Strictly Confidential12.保密责任Confidentiality各方承认及确定有关本协议、本协议内容，以及彼此就准备或履行本协议而交换的任何口头或书面资料均被视为保密信息。各方应当对所有该等保密信息予以保密，而在未得到另一方书面同意前，不得向任何第三者披露任何保密信息，惟下列信息除外：(a)公众人士知悉或将会知悉的任何信息（惟并非由接受保密信息之一方擅自向公众披露）；(b)根据适用法律法规、股票交易规则、或政府部门或法院的命令而所需披露之任何信息；或(c)由任何一方就本协议所述交易而需向其股东、投资者、法律或财务顾问披露之信息，而该股东、法律或财务顾问亦需遵守与本条款相类似之保密责任。如任何一方工作人员或聘请机构的泄密均视为该方的泄密，需依本协议承担违约责任。无论本协议以任何理由终止，本条款仍然生效。The Parties acknowledge that the existence and the terms of this Agreement and any oral or written information exchanged between the Parties in connectionwith the preparation and performance this Agreement are regarded as confidential information. Each Party shall maintain confidentiality of all such confidentialinformation, and without obtaining the written consent of the other Party, it shall not disclose any relevant confidential information to any third parties, exceptfor the information that: (a) is or will be in the public domain (other than through the receiving Party’s unauthorized disclosure); (b) is under the obligation tobe disclosed pursuant to the applicable laws or regulations, rules of any stock exchange, or orders of the court or other government authorities; or (c) isrequired to be disclosed by any Party to its shareholders, investors, legal counsels or financial advisors regarding the transaction contemplated hereunder,provided that such shareholders, investors, legal counsels or financial advisors shall be bound by the confidentiality obligations similar to those set forth inthis Section. Disclosure of any confidential information by the staff members or agencies hired by any Party shall be deemed disclosure of such confidentialinformation by such Party, which Party shall be held liable for breach of this Agreement. This Section shall survive the termination of this Agreement for anyreason.14秘密文件 Strictly Confidential13.适用法律和争议的解决Governing Law and Resolution of Disputes13.1本协议的订立、效力、解释、履行、修改和终止以及争议的解决均适用中国法律。The execution, effectiveness, construction, performance, amendment and termination of this Agreement and the resolution of disputes hereunder shallbe governed by the laws of China.13.2因解释和履行本协议而发生的任何争议，本协议各方应首先通过友好协商的方式加以解决。如果在一方向其他方发出要求协商解决的书面通知后30天之内争议仍然得不到解决，则任何一方均可将有关争议提交给中国国际经济贸易仲裁委员会，由该会按照其仲裁规则仲裁解决。仲裁应在北京进行，使用之语言为中文。仲裁裁决是终局性的，对各方均有约束力。In the event of any dispute with respect to the construction and performance of this Agreement, the Parties shall first resolve the dispute throughfriendly negotiations. In the event the Parties fail to reach an agreement on the dispute within 30 days after either Party's request to the other Parties forresolution of the dispute through negotiations, either Party may submit the relevant dispute to the China International Economic and Trade ArbitrationCommission for arbitration, in accordance with its Arbitration Rules. The arbitration shall be conducted in Beijing, and the language used in arbitrationshall be Chinese. The arbitration award shall be final and binding on all Parties.13.3因解释和履行本协议而发生任何争议或任何争议正在进行仲裁时，除争议的事项外，本协议各方仍应继续行使各自在本协议项下的其他权利并履行各自在本协议项下的其他义务。Upon the occurrence of any disputes arising from the construction and performance of this Agreement or during the pending arbitration of any dispute,except for the matters under dispute, the Parties to this Agreement shall continue to exercise their respective rights under this Agreement and performtheir respective obligations under this Agreement.15秘密文件 Strictly Confidential14.通知Notices14.1本协议项下要求或发出的所有通知和其他通信应通过专人递送、挂号邮寄、邮资预付或商业快递服务或传真的方式发到该方下列地址。每一通知还应再以电子邮件送达。该等通知视为有效送达的日期按如下方式确定：All notices and other communications required or permitted to be given pursuant to this Agreement shall be delivered personally or sent by registeredmail, postage prepaid, by a commercial courier service or by facsimile transmission to the address of such party set forth below. A confirmation copy ofeach notice shall also be sent by Email. The dates on which notices shall be deemed to have been effectively given shall be determined as follows:14.1.1通知如果是以专人递送、快递服务或挂号邮寄、邮资预付发出的，则以于设定为通知的地址在接收或拒收之日为有效送达日。Notices given by personal delivery, by courier service or by registered mail, postage prepaid, shall be deemed effectively given on the date ofreceipt or refusal at the address specified for notices.14.1.2通知如果是以传真发出的，则以成功传送之日为有效送达日（应以自动生成的传送确认信息为证）。Notices given by facsimile transmission shall be deemed effectively given on the date of successful transmission (as evidenced by anautomatically generated confirmation of transmission).16秘密文件 Strictly Confidential14.2为通知的目的，各方地址如下：For the purpose of notices, the addresses of the Parties are as follows:甲方：中传天下信息科技（深圳）有限公司Party A: Zhongchuan Tianxia Information Technology (Shenzhen) Co., Ltd.地址：深圳市南山区高新中三道2号深圳软件园一期五栋401AAddress: 401A, Building 5, Phase 1, Shenzhen Software Park, No.2 Gaoxin Zhongsan Road, Nanshan District, Shenzhen.收件人：洪婷Attn: Hong Ting乙方：Party B:a)宋雪松Song Xuesong地址：125.Expenses, including legal fees, incurred by a director in defending any legal, administrative or investigative proceedings may be paid by the Company inadvance of the final disposition of such proceedings upon receipt of an undertaking by or on behalf of the director to repay the amount if it shall ultimatelybe determined that the director is not entitled to be indemnified by the Company in accordance with these Articles.126.Expenses, including legal fees, incurred by a former director in defending any legal, administrative or investigative proceedings may be paid by theCompany in advance of the final disposition of such proceedings upon receipt of an undertaking by or on behalf of the former director to repay the amountif it shall ultimately be determined that the director is not entitled to be indemnified by the Company in accordance with these Articles.127.The indemnification and advancement of expenses provided by, or granted pursuant to, these Articles is not exclusive of any other rights to which theperson seeking indemnification of advancement of expenses may be entitled under any agreement, resolution of members, resolution of disinteresteddirectors or otherwise, both as to acting in the person’s official capacity and as to acting in another capacity while serving as a director of the Company.128.If a person to be indemnified has been successful in defence of any proceedings referred to above the person is entitled to be indemnified against allexpenses, including legal fees, and against all judgments, fines and amounts paid in settlement and reasonably incurred by the person in connection withthe proceedings.129.The Company may purchase and maintain insurance in relation to any person who is or was a director, an officer or a liquidator of the Company, or who atthe request of the Company is or was serving as a director, an officer or a liquidator of, or in any other capacity is or was acting for, another body corporateor a partnership, joint venture, trust or other enterprise, against any liability asserted against the person and incurred by the person in that capacity,whether or not the Company has or would have had the power to indemnify the person against the liability as provided in these Articles.SEAL130.The Company shall have a Seal and may have more than one Seal. References herein to the Seal shall be references to every Seal which shall have beenduly adopted by resolution of directors. The directors shall provide for the safe custody of the Seal and for an imprint thereof to be kept at the office of theregistered agent of the Company. Except as otherwise expressly provided herein, the Seal when affixed to any written instrument, shall be witnessed andattested to by the signature of a director or any other person so authorized from time to time by resolution of directors. Such authorization may be before orafter the Seal is affixed, may be general or specific and may refer to any number of sealings. The Directors may provide for a facsimile of the Seal and of thesignature of any director or authorized person which may be reproduced by printing or other means on any instrument and it shall have the same force andvalidity as if the Seal had been affixed to such instrument and the same had been signed as hereinbefore described.21DISTRIBUTIONS131.The directors of the Company may by resolution authorise a distribution by the Company at any time and of any amount and to any members they think fitif they are satisfied on reasonable grounds that immediately after the distribution;a.the value of the Company’s assets will exceed its liabilities, andb.the Company will be able to pay its debts as they fall due.132.A resolution of the directors passed under the preceding Article shall contain a statement that, in the opinion of the directors, immediately after thedistribution the value of the Company’s assets will exceed its liabilities, and the Company will be able to pay its debts as they fall due.133.If, after a distribution is authorised and before it is made, the directors cease to be satisfied on reasonable grounds that the Company will, immediately afterthe distribution satisfy the solvency test, any distribution made by the Company is deemed not to have been authorised.134.If, by virtue of the preceding Article, a distribution is deemed not to have been authorised, a director who;a.ceased, after authorisation but before the making of the distribution, to be satisfied on reasonable grounds for believing that the company wouldsatisfy the solvency test immediately after the distribution is made; andb.failed to take reasonable steps to prevent the distribution being made;is personally liable to the company to repay to the company so much of the distribution as is not able to be recovered from members.135.A distribution made to a member at a time when the company did not, immediately after the distribution, satisfy the solvency test may be recovered by thecompany from the member unless;a.the member received the distribution in good faith and without knowledge of the company’s failure to satisfy the solvency test;b.the member has altered his position in reliance on the validity of the distribution; andc.it would be unfair to require repayment in full or at all.DISTRIBUTIONS BY WAY OF DIVIDEND136.The Company may by a resolution of directors declare a distribution by way of dividend and pay such distribution in money, shares or other property. Inthe event that distributions by way of dividend are paid in specie the directors shall have responsibility for establishing and recording in the resolution ofdirectors authorizing the distribution by way of dividend, a fair and proper value for the assets to be so distributed.137.The directors may from time to time pay to the members such interim distributions by way of dividend as appear to the directors to be justified by theprofits of the Company.138.The directors may, before declaring any distribution by way of dividend, set aside out of the profits of the Company such sum as they think proper as areserve fund, and may invest the sum so set aside as a reserve fund upon such securities as they may select.139.Notice of any distribution by way of dividend that may have been declared shall be given to each member in the manner hereinafter mentioned and alldistributions by way of dividend unclaimed for 3 years after having been declared may be forfeited by resolution of directors for the benefit of theCompany.140.No distribution by way of dividend shall bear interest as against the Company and no distribution by way of dividend shall be paid on treasury shares orshares held by another company of which the Company holds, directly or indirectly, shares having more than 50 percent of the vote in electing directors.22141.A share issued as a distribution by way of dividend by the Company shall be treated for all purposes as having been issued for money equal to the valuedetermined by resolution of the directors. In the absence of fraud the decision of the directors as to the value of the share is conclusive unless a questionof law is involved.142.A division of the issued and outstanding shares of a class or series of shares into a larger number of shares of the same class or series having aproportionately smaller par value does not constitute a distribution by way of dividend of shares.ACCOUNTS AND AUDIT143.The Company may by resolution of members call for the directors to prepare periodically a profit and loss account and a balance sheet. The profit and lossaccount and balance sheet shall be drawn up so as to give respectively a true and fair view of the profit and loss of the Company for the financial periodand a true and fair view of the state of affairs of the Company as at the end of the financial period.144.The Company may by resolution of members call for the accounts to be examined by auditors.145.Subject to the rules of the Designated Stock Exchange, the first auditors shall be appointed by resolution of directors; subsequent auditors shall beappointed by the Audit Committee and shall hold office until the Audit Committee appoint another independent auditor.146.Subject to the rules of the Designated Stock Exchange, the remuneration of the auditors of the Company shall be fixed by the Audit Committee.147.The auditors shall examine each profit and loss account and balance sheet required to be served on every member of the Company or laid before a meetingof the members of the Company and shall state in a written report whether or nota.in their opinion the profit and loss account and balance sheet give a true and fair view respectively of the profit and loss for the period covered bythe accounts, and of the state of affairs of the Company at the end of that period; andb.all the information and explanations required by the auditors have been obtained.148.The report of the auditors shall be annexed to the accounts and shall be read at the meeting of members at which the accounts are laid before the Companyor shall be served on the members.149.Every auditor of the Company shall have a right of access at all times to the books of account and vouchers of the Company, and shall be entitled to requirefrom the directors and officers of the Company such information and explanations as he thinks necessary for the performance of the duties of the auditors.150.The auditors of the Company shall be entitled to receive notice of, and to attend any meetings of members of the Company at which the Company’s profitand loss account and balance sheet are to be presented.NOTICES151.Any notice, information or written statement to be given by the Company to members may be served in any way by which it can reasonably be expected toreach each member or by mail addressed to each member at the address shown in the share register.152.Any summons, notice, order, document, process, information or written statement to be served on the Company may be served by leaving it, or by sendingit by registered mail addressed to the Company, at its registered office, or by leaving it with, or by sending it by registered mail to, the registered agent ofthe Company.153.Service of any summons, notice, order, document, process, information or written statement to be served on the Company may be proved by showing thatthe summons, notice, order, document, process, information or written statement was delivered to the registered office or the registered agent of theCompany or that it was mailed in such time as to admit to its being delivered to the registered office or the registered agent of the Company in the normalcourse of delivery within the period prescribed for service and was correctly addressed and the postage was prepaid.23PENSION AND SUPERANNUATION FUNDS154.The directors may establish and maintain or procure the establishment and maintenance of any noncontributory or contributory pension orsuperannuation funds for the benefit of, and give or procure the giving of donations, gratuities, pensions, allowances or emoluments to, any persons whoare or were at any time in the employment or service of the Company or any company which is a subsidiary of the Company or is allied to or associated withthe Company or with any such subsidiary, or who are or were at any time directors or officers of the Company or of any such other company as aforesaid orwho hold or held any salaried employment or office in the Company or such other company, or any persons in whose welfare the Company or any suchother company as aforesaid is or has been at any time interested, and to the wives, widows, families and dependents of any such person, and may makepayments for or towards the insurance of any such persons as aforesaid, and may do any of the matters aforesaid either alone or in conjunction with anysuch other company as aforesaid. Subject always to the proposal being approved by resolution of members, a director holding any such employment oroffice shall be entitled to participate in and retain for his own benefit any such donation, gratuity, pension allowance or emolument.VOLUNTARY WINDING UP AND DISSOLUTION155.The Company may voluntarily commence to wind up and dissolve by a resolution of members but if the Company has never issued shares it mayvoluntarily commence to wind up and dissolve by resolution of directors.CONTINUATION156.The Company may by resolution of members or by a resolution passed unanimously by all directors of the Company continue as a company incorporatedunder the laws of a jurisdiction outside the British Virgin Islands in the manner provided under those laws.ARBITRATION157.Whenever any difference arises between the Company on the one hand and any of the members or their executors, administrators or assigns on the otherhand, touching the true intent and construction or the incidence or consequences of these Articles or of the Act, touching anything done or executed,omitted or suffered in pursuance of the Act or touching any breach or alleged breach or otherwise relating to the premises or to these Articles, or to anyAct or Ordinance affecting the Company or to any of the affairs of the Company such difference shall, unless the parties agree to refer the same to a singlearbitrator, be referred to 2 arbitrators one to be chosen by each of the parties to the difference and the arbitrators shall before entering on the referenceappoint an umpire.158.If either party to the reference makes default in appointing an arbitrator either originally or by way of substitution (in the event that an appointed arbitratorshall die, be incapable of acting or refuse to act) for 10 days after the other party has given him notice to appoint the same, such other party may appoint anarbitrator to act in the place of the arbitrator of the defaulting party.We, Portcullis TrustNet (BVI) Limited of Portcullis TrustNet Chambers, P.O. Box 3444, Road Town, Tortola, British Virgin Islands for the purpose of incorporating aBVI Business Company under the laws of the British Virgin Islands hereby sign these Articles of Association the 27th day of October, 2009.Incorporator/s/ Nicole WheatleyPortcullis TrustNet (BVI) LimitedPortcullis TrustNet ChambersP.O. Box 3444Road Town, TortolaBritish Virgin Islands(Sgd. Nicole Wheatley)24EX4.15 3 f20f2017ex415_luokung.htm EXCLUSIVE BUSINESS COOPERATION AGREEMENT BY AND BETWEEN ZHONGCHUAN TIANXIA INFORMATIONTECHNOLOGY (SHENZHEN) CO., LTD., AND BEIJING MOBILE VISION TECHNOLOGY CO., LTD., DATED AUGUST 31, 2015Exhibit 4.15独家业务合作协议Exclusive Business Cooperation Agreement本独家业务合作协议（下称“本协议”）由以下双方于年月日在中华人民共和国（下称“中国”）北京市签署。This Exclusive Business Cooperation Agreement (this “Agreement”) is made and entered into by and between the following parties on in Beijing, thePeople’s Republic of China (“China” or the “PRC”).甲方：中传天下信息科技（深圳）有限公司Party A: Zhongchuan Tianxia Information Technology (Shenzhen) Co., Ltd.地址：深圳市南山区高新中三道2号深圳软件园一期五栋401A Address: 401A, Building 5, Phase 1, Shenzhen Software Park, No.2 Gaoxin Zhongsan Road, Nanshan District, Shenzhen统一社会信用代码：91440300565701058R Uniform Social Credit Code: 91440300565701058R乙方：北京中传视讯科技有限公司Party B: Beijing Mobile Vision Technology Co., Ltd.地址：北京市朝阳区光华路9号SOHO3QLAB32Address: LAB32, SOHO3Q, No 9, Guanghua Road, Chaoyang District, Beijing统一社会信用代码：9111010576215249XMUniform Social Credit Code: 9111010576215249XM甲方和乙方以下各称为“一方”，统称为“双方”。Each of Party A and Party B shall be hereinafter referred to as a “Party” respectively, and as “Parties” collectively.1秘密文件Strictly Confidential鉴于：Whereas,1.甲方是一家在中国注册的外商独资企业，拥有丰富的技术研发和产业化推广相关的管理和投资经验，并提供相关的技术支持和咨询服务；Party A is a whollyforeignowned enterprise established in China, which has rich experience in technology research development and industrializationpromotion management and investment, and provides relevant technical support and consulting services;2.乙方是一家在中国成立的有限责任公司，经中国有关政府部门批准依法主要从事手机视频技术开发、内容制作及市场推广；Party B is a limited company in China, mainly engages in mobile video technology research, development, content creation, sale and related industrialpromotion as approved by the relevant governmental authorities in China;3.甲方同意利用其技术、人员和信息优势，在本协议期间向乙方提供有关手机视频技术开发、内容制作及市场推广以及未来扩大业务规模和业务范围时乙方所需的技术支持、技术咨询等相关服务，乙方同意接受甲方或其指定方按本协议条款的规定提供的各种服务。Party A is willing to provide Party B with technology supports and technology consulting services in connection with mobile video technology research,development, content creation, sale and related industrial promotion and such services in connection with Party B’s extension of business scale orbroadening of businesses during the term of this Agreement, utilizing its advantages in technology, human resources, and information, and Party B iswilling to accept such services provided by Party A or Party A's designee(s), each on the terms set forth herein.2秘密文件Strictly Confidential据此，甲方和乙方经协商一致，达成如下协议：Now, therefore, through mutual discussion, the Parties have reached the following agreements:1.服务提供Services Provided by Party A1.1按照本协议条款和条件，乙方在此委任甲方在本协议期间作为乙方的独家服务提供者向乙方提供全面的和手机视频技术开发、内容制作及市场推广相关以及未来扩大业务规模和业务范围时乙方所需的技术支持、业务支持和相关咨询服务，具体内容包括但不限于以下内容：Party B hereby appoints Party A as Party B's exclusive services provider to provide Party B with complete technical support, business supportand related consulting services in connection with mobile video technology research, development, content creation, sale and related industrialpromotion and such services in connection with Party B’s extension of business scale or broadening of businesses during the term of thisAgreement, in accordance with the terms and conditions of this Agreement, which may include but not limited to:1.1.1为乙方提供其手机视频技术开发、内容制作及市场推广业务所需的一切服务支持，为乙方提供相当于包括总经理、行政人员、管理人员、筹划部门、商业运营、人力资源、财务、会计以及与乙方业务相关的一切业务操作所需人员所能提供的服务内容；managing all aspects of Party B’s business of mobile video technology research, development, content creation, sale and relatedindustrial promotion. In this capacity, Party A will procure or engage for Party B the services of a general manager and other managementstaff, including but not limited to personnel responsible for all administration, operations, planning, business development, humanresources, finance, accounting and other operations related to the Business of Party B;3秘密文件Strictly Confidential1.1.2为乙方制定全部的商业计划、销售目标，并为优化执行该等商业计划设计和建立相应的系统及操作程序；developing all business plans and sales projections of Party B, and for developing and establishing systems and procedures for optimumexecution of the business plans;1.1.3为乙方申请手机视频技术及内容制作相关专利提供咨询服务和支持；consulting services and support in connection with Party B’s applying for mobile video technology related patents and content creation;1.1.4为乙方手机视频技术产业化的发展方向、规模、品牌提升提供咨询服务；consulting services in connection with the development directions, size and business brands promotion of Party B’s mobile videotechnology industrialization;4秘密文件Strictly Confidential1.1.5为乙方提供与业务相关的办公、生产和销售服务，为乙方租赁场所，建立业务相关的系统和程序，满足乙方的其他要求；procuring or obtaining for Party B all office, production and distribution services related to the Business. It shall procure or obtainappropriate leases, establish systems and procedures needed to operate the business, fulfill orders for services;1.1.6尽最大努力为乙方建立手机视频技术销售市场，根据甲方为乙方制定的商业计划及销售目标代表乙方获取客户订单，同时为乙方提供与业务相关的客户服务，建立向客户开具票据的程序和与会计相关的托收服务。using its best efforts to establish mobile video technology related marketing and other structures to obtain orders for services &products from customers on behalf of Party B in accordance with Party B’s business plans, sales projections and objectives (asdeveloped by Party A) and procure or obtain customer services required in connection with the Business. It shall also establishprocedures for invoicing customers, and establish collection services with respect to accounts;1.1.7就乙方的劳动用工方面提供咨询服务和支持，包括但不限于，组织实施对乙方业务人员、行政人员、管理人员等人员进行培训和考核，协助建立健全的人力资源管理制度和实现人力资源的良好配置；consulting services and support regarding labor system of Party B, including but without limitation to labor training and evaluation ofsales person, administrative staff and management person etc. and establishment of human resources management system to well;5秘密文件Strictly Confidential1.1.8提供乙方需要的客户数据统计、分析及相关数据库的建设和维护等咨询服务；providing Party B with compile and analysis of client data and consulting services of establishment and maintenance of data base;1.1.9提供乙方需要的软件和相关技术支持服务；providing software Party B requires and other technical support;1.1.10接受乙方委托，对乙方的手机视频技术研发和产业化推广业务经营进行指导和管理；guiding and management on Party B’s business of mobile video technology research and development and related industrial promotionoperation according to Party B’s commission;1.1.11当乙方业务规模发展或业务范围扩大需要时，购买乙方业务经营需要的设备；in the event of the demand of Party B’s development of business scale or broadening of businesses, purchase the equipments which itneeds for the operation of its business;1.1.12当乙方业务规模发展或业务范围扩大需要时，完成乙方项目中的全部或部分工作；in the event of the demand of Party B’s development of business scale or broadening of businesses, complete the work of Party B’sproject in whole or in party;6秘密文件Strictly Confidential1.1.13当乙方业务规模发展或业务范围扩大需要时，开发新技术；in the event of the demand of Party B’s development of business scale or broadening of businesses, develop new technology;1.1.14乙方委托甲方，且甲方接受委托提供的其他服务。other services Party B appoints Party A to provide and Party A agrees to provide.1.2乙方接受甲方的咨询和服务。乙方进一步同意，除非经甲方事先书面同意，在本协议期间，就本协议约定的服务或其他事宜，乙方不得直接或间接地从任何第三方获得任何与本协议相同或类似的咨询和/或服务，并不得与任何第三方就本协议所述事项建立任何类似的合作关系。双方同意，甲方可以指定其他方（该被指定方可以与乙方签署本协议第1.3条描述的某些协议）为乙方提供本协议约定的服务和/或支持。Party B agrees to accept all the consultations and services provided by Party A. Party B further agrees that unless with Party A's prior writtenconsent, during the term of this Agreement, Party B shall not directly or indirectly accept the same or any similar consultations and/or servicesprovided by any third party and shall not establish similar corporation relationship with any third party regarding the matters contemplated by thisAgreement. Party A may appoint other parties, who may enter into certain agreements described in Section 1.3 with Party B, to provide Party Bwith the consultations and/or services under this Agreement.7秘密文件Strictly Confidential1.3服务的提供方式Service Providing Methodology1.3.1双方同意在本协议有效期内，视情况而定，乙方可以与甲方或甲方指定的其他方进一步签订技术服务协议和/或咨询服务协议，对各项业务培训、技术服务、咨询服务的具体内容、方式、人员、收费等进行约定。Parties agree that during the term of this Agreement, where necessary, Party B may enter into further technical service agreements and/orconsulting service agreements with Party A or any other party designated by Party A, which shall provide the specific contents, manner,personnel, and fees for the specific technical services and consulting services.1.3.2为更好地履行本协议，双方同意，在甲方认为必要时，乙方应在本协议有效期内与甲方或甲方指定的其他方根据业务进展需要随时签署协议，由甲方或其指定方向乙方提供服务。To fulfill this Agreement, Parties agree that during the term of this Agreement, where Party A deems necessary, Party B shall enter intoagreements with Party A or any other party designated by Party A which shall set forth that Party A or any other party designated byParty A provide services to Party B based on the needs of the business of Party B.8秘密文件Strictly Confidential2.服务的价格和支付方式The Calculation and Payment of the Service Fees双方同意，就甲方提供的服务，乙方应向甲方支付服务费（“服务费”）。服务费不应低于乙方税后利润的80%。服务费应当按季支付；经甲方事先书面同意，服务费可以根据乙方的经营需要进行调整。Both Parties agree that, in consideration of the services provided by Party A, Party B shall pay Party A fees (the “Service Fees”), which shall not be lessthan 80% of Party B’s aftertax profits . The Service Fees shall be due and payable on a quarterly basis; upon the prior written consent by Party A, the rateof Service Fees may be adjusted pursuant to the operational needs of Party B.3.知识产权和保密条款Intellectual Property Rights and Confidentiality Clauses3.1在中国法律允许的范围内，甲方对履行本协议而产生或创造的任何权利、所有权、权益和所有知识产权包括但不限于著作权、专利权、专利申请权、软件、技术秘密、商业机密及其他均享有独占的和排他的权利和利益。乙方须签署所有适当的文件，采取所有适当的行动，递交所有的文件和/或申请，提供所有适当的协助，以及做出所有其他依据甲方的自行决定认为是必要的行为，以将任何对该等知识产权的所有权、权利和权益赋予甲方，和/或完善对甲方此等知识产权权利的保护。To the extent permitted under the PRC laws, Party A shall have exclusive and proprietary rights and interests in all rights, ownership, interests andintellectual properties arising out of or created during the performance of this Agreement, including but not limited to copyrights, patents, patentapplications, software, technical secrets, trade secrets and others. Party B shall execute all appropriate documents, take all appropriate actions,submit all filings and/or applications, render all appropriate assistance and otherwise conduct whatever is necessary deemed as by Party A in itssole discretion for the purposes of vesting any ownership, right or interest of any such intellectual property rights in Party A, and/or perfectingthe protections for any such intellectual property rights in Party A.9秘密文件Strictly Confidential3.2双方承认及确定有关本协议、本协议内容，以及彼此就准备或履行本协议而交换的任何口头或书面资料均被视为保密信息。双方应当对所有该等保密信息予以保密，而在未得到另一方书面同意前，不得向任何第三者披露任何保密信息，惟下列信息除外：(a)公众人士知悉或将会知悉的任何信息（惟并非由接受保密信息之一方擅自向公众披露）；(b)根据适用法律法规、股票交易规则、或政府部门或法院的命令而所需披露之任何信息；或(c)由任何一方就本协议所述交易而需向其股东、投资者、法律或财务顾问披露之信息，而该股东、法律或财务顾问亦需遵守与本条款相类似之保密责任。如任何一方工作人员或聘请机构的泄密均视为该方的泄密，需依本协议承担违约责任。无论本协议以任何理由终止，本条款仍然生效。The Parties acknowledge that the existence and the terms of this Agreement and any oral or written information exchanged between the Parties inconnection with the preparation and performance this Agreement are regarded as confidential information. Each Party shall maintainconfidentiality of all such confidential information, and without obtaining the written consent of the other Party, it shall not disclose any relevantconfidential information to any third parties, except for the information that: (a) is or will be in the public domain (other than through the receivingParty’s unauthorized disclosure); (b) is under the obligation to be disclosed pursuant to the applicable laws or regulations, rules of any stockexchange, or orders of the court or other government authorities; or (c) is required to be disclosed by any Party to its shareholders, investors,legal counsels or financial advisors regarding the transaction contemplated hereunder, provided that such shareholders, investors, legal counselsor financial advisors shall be bound by the confidentiality obligations similar to those set forth in this Section. Disclosure of any confidentialinformation by the staff members or agencies hired by any Party shall be deemed disclosure of such confidential information by such Party, whichParty shall be held liable for breach of this Agreement. This Section shall survive the termination of this Agreement for any reason.3.3双方同意，不论本协议是否变更、解除或终止，本条款将持续有效。The Parties agree that this Section shall survive changes to, and rescission or termination of, this Agreement.4.陈述和保证Representations and Warranties4.1甲方陈述和保证如下：Party A hereby represents and warrants as follows:4.1.1甲方是按照中国法律合法注册并有效存续的外商独资企业。Party A is a whollyforeignowned enterprise legally registered and validly existing in accordance with the laws of China.10秘密文件Strictly Confidential4.1.2甲方已采取必要的公司行为，获得必要的授权，并取得第三方和政府部门的同意及批准（若需）以签署和履行本协议；甲方对本协议的签署和履行并不违反法律法规的明确规定。Party A has taken all necessary corporate actions, obtained all necessary authorization and the consent and approval from third partiesand government agencies (if any) for the execution and performance of this Agreement. Party A’s execution and performance of thisAgreement do not violate any explicit requirements under any law or regulation binding on Party A.4.1.3本协议构成对其合法、有效、有约束力并依本协议之条款对其强制执行的义务。This Agreement constitutes Party A's legal, valid and binding obligations, enforceable in accordance with its terms.4.2乙方陈述和保证如下：Party B hereby represents and warrants as follows:4.2.1乙方是按照中国法律合法登记且有效存续的有限责任公司，乙方根据政府部门的批准和许可从事手机视频技术开发、内容制作和产业化市场推广的经营。Party B is a limited company legally registered and validly existing in accordance with the laws of China, engages in mobile videotechnology research, development, content creation, sale and related industrial promotion pursuant to governmental approvals andpermits;11秘密文件Strictly Confidential4.2.2乙方已采取必要的行为，获得必要的授权，并取得第三方和政府部门的同意及批准（若需）以签署和履行本协议；乙方对本协议的签署和履行并不违反法律法规的明确规定。Party B has taken all necessary actions, obtained all necessary authorization and the consent and approval from third parties andgovernment agencies (if any) for the execution and performance of this Agreement. Party B’s execution and performance of thisAgreement do not violate any explicit requirements under any law or regulation binding on Party B.4.2.3本协议构成对其合法、有效、有约束力并依本协议之条款对其强制执行的义务。This Agreement constitutes Party B's legal, valid and binding obligations, and shall be enforceable against it.5.生效和有效期Effectiveness and Term5.1本协议于文首标明的协议日期签署并同时生效。除非依本协议或双方其他协议的约定而提前终止，本协议有效期为20年，但甲、乙双方应自本协议签署后，每3个月对本协议的内容做一次审查，以决定是否需要根据当时的情况对本协议作出相应修改和补充。This Agreement is executed on the date first above written and shall take effect as of such date. Unless earlier terminated in accordance with theprovisions of this Agreement or relevant agreements separately executed between the Parties, the term of this Agreement shall be 20 years. Afterthe execution of this Agreement, both Parties shall review this Agreement every 3 months to determine whether to amend or supplement theprovisions in this Agreement based on the actual circumstances at that time.12秘密文件Strictly Confidential5.2协议期满前，经甲方书面确认，本协议可以延期。延期的期限由甲方决定，乙方必须无条件地同意该延期。The term of this Agreement may be extended if confirmed in writing by Party A prior to the expiration thereof. The extended term shall bedetermined by Party A, and Party B shall accept such extended term unconditionally.6.终止Termination6.1除非依据本协议续期，本协议于到期之日终止。Unless renewed in accordance with the relevant terms of this Agreement, this Agreement shall be terminated upon the date of expiration hereof.6.2本协议有效期内，除非甲方对乙方有重大过失或存在欺诈行为，乙方不得提前终止本协议。尽管如此，甲方可在任何时候通过提前30天向乙方发出书面通知的方式终止本协议。During the term of this Agreement, unless Party A commits gross negligence, or a fraudulent act, against Party B, Party B shall not terminate thisAgreement prior to its expiration date. Nevertheless, Party A shall have the right to terminate this Agreement upon giving 30 days' prior writtennotice to Party B at any time.6.3在本协议终止之后，双方在第3、7和8条项下的权利和义务将继续有效。The rights and obligations of the Parties under Articles 3, 7 and 8 shall survive the termination of this Agreement.13秘密文件Strictly Confidential7.适用法律和争议解决Governing Law and Resolution of Disputes7.1本协议的订立、效力、解释、履行、修改和终止以及争议的解决适用中国的法律。The execution, effectiveness, construction, performance, amendment and termination of this Agreement and the resolution of disputes hereundershall be governed by the laws of China.7.2因解释和履行本协议而发生的任何争议，本协议双方应首先通过友好协商的方式加以解决。如果在一方向其他方发出要求协商解决的书面通知后30天之内争议仍然得不到解决，则任何一方均可将有关争议提交给中国国际经济贸易仲裁委员会，由该会按照其仲裁规则仲裁解决。仲裁应在北京进行，使用之语言为中文。仲裁裁决是终局性的，对各方均有约束力。In the event of any dispute with respect to the construction and performance of this Agreement, the Parties shall first resolve the dispute throughfriendly negotiations. In the event the Parties fail to reach an agreement on the dispute within 30 days after either Party's request to the otherParties for resolution of the dispute through negotiations, either Party may submit the relevant dispute to the China International Economic andTrade Arbitration Commission for arbitration, in accordance with its Arbitration Rules. The arbitration shall be conducted in Beijing, and thelanguage used in arbitration shall be Chinese. The arbitration award shall be final and binding on all Parties.14秘密文件Strictly Confidential7.3因解释和履行本协议而发生任何争议或任何争议正在进行仲裁时，除争议的事项外，本协议双方仍应继续行使各自在本协议项下的其他权利并履行各自在本协议项下的其他义务。Upon the occurrence of any disputes arising from the construction and performance of this Agreement or during the pending arbitration of anydispute, except for the matters under dispute, the Parties to this Agreement shall continue to exercise their respective rights under this Agreementand perform their respective obligations under this Agreement.8.补偿Indemnification就甲方根据本协议向乙方提供的咨询和服务内容所产生或引起的针对甲方的诉讼、请求或其他要求而招致的任何损失、损害、责任或费用都应由乙方补偿给甲方，以使甲方不受损害，除非该损失、损害、责任或费用是因甲方的重大过失或故意而产生的。Party B shall indemnify and hold harmless Party A from any losses, injuries, obligations or expenses caused by any lawsuit, claims or other demandsagainst Party A arising from or caused by the consultations and services provided by Party A to Party B pursuant this Agreement, except where suchlosses, injuries, obligations or expenses arise from the gross negligence or willful misconduct of Party A.15秘密文件Strictly Confidential9.通知Notices9.1本协议项下要求或发出的所有通知和其他通信应通过专人递送、挂号邮寄、邮资预付或快递服务或传真的方式发到该方下列地址。每一通知还应再以电子邮件送达。该等通知视为有效送达的日期按如下方式确定：All notices and other communications required or permitted to be given pursuant to this Agreement shall be delivered personally or sent byregistered mail, postage prepaid, by a courier service or by facsimile transmission to the address of such Party set forth below. A confirmationcopy of each notice shall also be sent by email. The dates on which notices shall be deemed to have been effectively given shall be determined asfollows:9.1.1通知如果是以专人递送、快递服务或挂号邮寄、邮资预付发出的，则以于设定为通知的地址在接收或拒收之日为有效送达日。Notices given by personal delivery, by courier service or by registered mail, postage prepaid, shall be deemed effectively given on thedate of receipt or refusal at the address specified for notices.9.1.2通知如果是以传真发出的，则以成功传送之日为有效送达日（应以自动生成的传送确认信息为证）。Notices given by facsimile transmission shall be deemed effectively given on the date of successful transmission (as evidenced by anautomatically generated confirmation of transmission).16秘密文件Strictly Confidential9.2为通知的目的，双方地址如下：For the purpose of notices, the addresses of the Parties are as follows:甲方：中传天下信息科技（深圳）有限公司Party A: Zhongchuan Tianxia Information Technology (Shenzhen) Co., Ltd.地址：深圳市南山区高新中三道2号深圳软件园一期五栋401AAddress:401A, Building 5, Phase 1, Shenzhen Software Park, No.2 Gaoxin Zhongsan Road, Nanshan District, Shenzhen收件人：洪婷Attn: Hong Ting乙方：北京中传视讯科技有限公司Party B: Beijing Mobile Vision Technology Co., Ltd地址：北京市朝阳区光华路9号SOHO3QLAB32Address: LAB32, SOHO3Q, No 9, Guanghua Road, Chaoyang District, Beijing.收件人：宋雪松Attn.: Song Xuesong9.3任何一方可按本条规定随时给另一方发出通知来改变其接收通知的地址。Any Party may at any time change its address for notices by a notice delivered to the other Party in accordance with the terms hereof.17秘密文件Strictly Confidential10.协议的转让Assignment10.1乙方不得将其在本协议项下的权利与义务转让给第三方，除非事先征得甲方的书面同意。Without Party A's prior written consent, Party B shall not assign its rights and obligations under this Agreement to any third party.10.2乙方在此同意，甲方可以在其需要时向其他第三方转让其在本协议项下的权利和义务，并在该等转让发生时甲方仅需向乙方发出书面通知，并且无需再就该等转让征得乙方的同意。Party B agrees that Party A may assign its obligations and rights under this Agreement to any third party upon a prior written notice to Party Bbut without the consent of Party B.11.协议的分割性Severability如果本协议有任何一条或多条规定根据任何法律或法规在任何方面被裁定为无效、不合法或不可执行，本协议其余规定的有效性、合法性或可执行性不应因此在任何方面受到影响或损害。双方应通过诚意磋商，争取以法律许可以及双方期望的最大限度内有效的规定取代那些无效、不合法或不可执行的规定，而该等有效的规定所产生的经济效果应尽可能与那些无效、不合法或不能强制执行的规定所产生的经济效果相似。In the event that one or several of the provisions of this Agreement are found to be invalid, illegal or unenforceable in any aspect in accordance with anylaws or regulations, the validity, legality or enforceability of the remaining provisions of this Agreement shall not be affected or compromised in any aspect.The Parties shall strive in good faith to replace such invalid, illegal or unenforceable provisions with effective provisions that accomplish to the greatestextent permitted by law and the intentions of the Parties, and the economic effect of such effective provisions shall be as close as possible to the economiceffect of those invalid, illegal or unenforceable provisions.18秘密文件Strictly Confidential12.协议的修改、补充Amendments and Supplements双方可以书面协议方式对本协议作出修改和补充。经过双方签署的有关本协议的修改协议和补充协议是本协议组成部分，具有与本协议同等的法律效力。Any amendments and supplements to this Agreement shall be in writing. The amendment agreements and supplementary agreements that have beensigned by the Parties and that relate to this Agreement shall be an integral part of this Agreement and shall have the same legal validity as this Agreement.13.语言和副本Language and Counterparts本协议以中文和英文书就，一式二份，甲乙双方各持一份，具有同等效力；中英文版本如有冲突，应以中文版为准。This Agreement is written in both Chinese and English language in two copies, each Party having one copy with equal legal validity; in case there is anyconflict between the Chinese version and the English version, the Chinese version shall prevail.本页其余部分刻意留为空白The Remainder of this page is intentionally left blank19秘密文件Strictly Confidential有鉴于此，双方已使得经其授权的代表于文首所述日期签署了本独家业务合作协议并即生效，以昭信守。IN WITNESS WHEREOF, the Parties have caused their authorized representatives to execute this Exclusive Business Cooperation Agreement as of thedate first above written.甲方：中传天下信息科技（深圳）有限公司（盖章）Party A: Zhongchuan Tianxia Information Technology (Shenzhen) Co., Ltd.(Seal)签字：By: /s/ Hong Ting 姓名：洪婷Name: Hong Ting职务：总经理Title: General Manager20秘密文件Strictly Confidential有鉴于此，双方已使得经其授权的代表于文首所述日期签署了本独家业务合作协议并即生效，以昭信守。IN WITNESS WHEREOF, the Parties have caused their authorized representatives to execute this Exclusive Business Cooperation Agreement as of thedate first above written. 乙方：北京中传视讯科技有限公司（盖章）Party B: Beijing Mobile Vision Technology Co., Ltd. (Seal)签字：By: /s/ Song Xuesong 姓名：宋雪松Name: Song Xuesong职务：董事长Title: Chairman of the Board21秘密文件Strictly ConfidentialEX4.16 4 f20f2017ex416_luokung.htm EXCLUSIVE OPTION AGREEMENT BY AND AMONG ZHONGCHUAN TIANXIA INFORMATION TECHNOLOGY(SHENZHEN) CO., LTD., XUESONG SONG, WEILI CHEN, PING WANG, DONGLAI LIU, AND BEIJING MOBILE VISION TECHNOLOGY CO., LTD., DATEDAUGUST 31, 2015Exhibit 4.16独家购买权协议Exclusive Option Agreement本独家购买权协议 (下称“本协议”) 由以下各方于年月日在中华人民共和国（下称“中国”）北京签订：This Exclusive Option Agreement (this “Agreement”) is executed by and among the Parties below as of in Beijing, the People’s Republic of China (the“China” or “PRC”):甲方：中传天下信息科技（深圳）有限公司，一家依照中国法律设立和存在的外商独资企业，地址为深圳市南山区高新中三道2号深圳软件园一期五栋401A；Party A:Zhongchuan Tianxia Information Technology (Shenzhen) Co., Ltd., a whollyforeignowned enterprise organized and existing under the laws of China,with its address at 401A, Building 5, Phase 1, Shenzhen Software Park, No.2 Gaoxin Zhongsan Road, Nanshan District, Shenzhen.乙方：Party B:a)宋雪松Song Xuesong身份证号码:120112196809040417ID Card No.:120112196809040417住所：天津市河西区广东路中裕园33702Address:Zhongyu Yuan 33702, Guangdong Road, Hexi District, Tianjinb)陈蔚力Chen Weili身份证号码:120106197309240516ID Card No.:120106197309240516住所：广东省深圳市宝安区宝城上川路15号Address:Baocheng Shangchuan Road 15, Baoan District, Shenzhen, Guangdong1秘密文件Strictly Confidentialc)王平Wang Ping身份证号码:35020319691030401xID Card No.:35020319691030401x住所：广东省深圳市南山区高新南环路36号彩虹之岸12栋4AAddress:Caihong Zhi’an Building No.12 Suite 4A, Gaoxin Nanhuan Road 36, Nanshan District, Shenzhen, Guangdongd)刘东来Liu Donglai身份证号码:120107196810103912ID Card No.:120107196810103912住所：天津市和平区南京路诚基经贸中心1号楼2门1702号Address:No 1702, Door 2, Build 1, Chengji Economic and Trade Centre, Nanjing Road, Heping District, Tianjin.丙方：北京中传视讯科技有限公司，一家依照中国法律设立和存在的有限责任公司，地址为北京市朝阳区光华路9号SOHO3QLAB32，统一社会信用代码为9111010576215249XM；Party C:Beijing Mobile Vision Technology Co., Ltd., a limited company duly registered in China, with its address at LAB32, SOHO3Q, No 9, Guanghua Road,Chaoyang District, Beijing and its uniform social credit code of 9111010576215249XM.2秘密文件Strictly Confidential在本协议中，甲方、乙方和丙方以下各称“一方”，合称“各方”。In this Agreement, each of Party A, Party B and Party C shall be referred to as a “Party” respectively, and they shall be collectively referred to as the“Parties”.鉴于，乙方系丙方股东并合计持有丙方100%股权，乙方将按本协议之条款授予甲方购买全部或部分该股权的权利。Whereas, Party B are the shareholders of Party C and jointly hold 100% of the equity interest in Party C, and Party B are willing to grant to Party A the rightto acquire such equity interest, in whole or in part, on the terms herein.现各方协商一致，达成如下协议：Now therefore, upon mutual discussion and negotiation, the Parties have reached the following agreement:1.股权买卖Sale and Purchase of Equity Interest1.1授予权利Option Granted乙方在此不可撤销地授予甲方在中国法律允许的前提下，按照甲方自行决定的行使步骤，并按照本协议第1.3条所述的价格，随时一次或多次从乙方购买或指定一人或多人(“被指定人”)从乙方购买其目前和将来所持有的丙方的全部或部分股权（无论乙方出资额和/或持股比例将来是否发生变化）的一项不可撤销的专有权(“股权购买权”)。除甲方和被指定人外，任何第三人均不得享有股权购买权或其他与乙方股权有关的权利。丙方特此同意乙方向甲方授予股权购买权。本款及本协议所规定的“人”指个人、公司、合营企业、合伙、企业、信托或非公司组织。Party B hereby irrevocably grant Party A an irrevocable and exclusive right to purchase, or designate one or more persons (each, a “Designee”) topurchase the equity interests in Party C now and in the future held by Party B (regardless whether Party B’s capital contribution amount and/orpercentage of shareholding will be changed in the future) once or at multiple times at any time in part or in whole at Party A’s sole and absolutediscretion to the extent permitted by Chinese laws and at the price described in Section 1.3 herein (such right being the “Equity Interest PurchaseOption”). Except for Party A and the Designee(s), no other person shall be entitled to the Equity Interest Purchase Option or other rights withrespect to the equity interests of Party B. Party C hereby agrees to the grant by Party B of the Equity Interest Purchase Option to Party A. Theterm “person” as used herein shall refer to individuals, corporations, partnerships, partners, enterprises, trusts or noncorporate organizations.3秘密文件Strictly Confidential1.2行使步骤Steps for Exercise of Equity Interest Purchase Option甲方行使其股权购买权以符合中国法律和法规的规定为前提。甲方行使股权购买权时，应向乙方发出书面通知(“股权购买通知”)，股权购买通知应载明以下事项：(a)甲方关于行使股权购买权的决定；(b)甲方拟从乙方购买的股权份额(“被购买的股权”)；和(c)被购买的股权的买入日期。Subject to the provisions of the laws and regulations of China, Party A may exercise the Equity Interest Purchase Option by issuing a writtennotice to Party B (the “Equity Interest Purchase Option Notice”), specifying: (a) Party A’s decision to exercise the Equity Interest PurchaseOption; (b) the portion of equity interests to be purchased from Party B (the “Optioned Interests”); and (c) the date for purchasing the OptionedInterests.1.3股权买价Equity Interest Purchase Price被购买的股权的买价（“股权买价”）应是行权当时中国法律允许的最低价格。乙方收到该股权对价后，应当提供给丙方与该股权买价相同金额的借款，该借款的期限为20年，且为无息。乙方应当在该借款期限届满时就该借款放弃对丙方的债权。The purchase price of the Optioned Interests (the “Equity Interest Purchase Price”) shall be the lowest price permitted by the laws of China. Afterreceiving the Equity Interest Purchase Price, Party B shall make an interestfree loan equivalent to the amount of Equity Interest Purchase Price toParty C, of which term is 20 years. Each member of Party B shall give up his(her) creditor’s right when the loan term expires.4秘密文件Strictly Confidential1.4转让被购买股权Transfer of Optioned Interests甲方每次行使股权购买权时：For each exercise of the Equity Interest Purchase Option:1.4.1乙方应责成丙方及时召开股东会会议，在该会议上，应通过批准乙方向甲方和/或被指定人转让被购买的股权的决议；Party B shall cause Party C to promptly convene a shareholders meeting, at which a resolution shall be adopted approving Party B’stransfer of the Optioned Interests to Party A and/or the Designee(s);1.4.2乙方应就其向甲方和/或被指定人转让被购买股权取得丙方其他股东同意该转让并放弃优先购买权的书面声明。Party B shall obtain written statements from the other shareholder of Party C giving consent to the transfer of the equity interest to PartyA and/or the Designee(s) and waiving any right of first refusal related thereto.1.4.3乙方应与甲方和/或(在适用的情况下)被指定人按照本协议及股权购买通知的规定，为每次转让签订股权转让协议；Party B shall execute a share transfer contract with respect to each transfer with Party A and/or each Designee (whichever is applicable),in accordance with the provisions of this Agreement and the Equity Interest Purchase Option Notice regarding the Optioned Interests;5秘密文件Strictly Confidential1.4.4有关方应签署所有其他所需协议、协议或文件，取得全部所需的政府批准和同意，并采取所有所需行动，在不附带任何担保权益的情况下，将被购买的股权的有效所有权转移给甲方和/或被指定人并使甲方和/或被指定人成为被购买的股权的登记在册所有人。为本款及本协议的目的，“担保权益”包括担保、抵押、第三方权利或权益，任何购股权、收购权、优先购买权、抵销权、所有权扣留或其他担保安排等；但为了明确起见，不包括在本协议、乙方股权质押协议项下产生的任何担保权益。本款及本协议所规定的“乙方股权质押协议”指甲方、乙方和丙方于本协议签署之日签订的股权质押协议，根据股权质押协议，乙方为担保丙方能履行丙方与甲方签订的独家业务合作协议项下的义务，而向甲方质押其在丙方的全部乙方股权。The relevant Parties shall execute all other necessary contracts, agreements or documents, obtain all necessary government licenses andpermits and take all necessary actions to transfer valid ownership of the Optioned Interests to Party A and/or the Designee(s),unencumbered by any security interests, and cause Party A and/or the Designee(s) to become the registered owner(s) of the OptionedInterests. For the purpose of this Section and this Agreement, “security interests” shall include securities, mortgages, third party’s rightsor interests, any stock options, acquisition right, right of first refusal, right to offset, ownership retention or other security arrangements,but shall be deemed to exclude any security interest created by this Agreement and Party B’s Equity Interest Pledge Agreement. “PartyB’s Equity Interest Pledge Agreement” as used in this Section and this Agreement shall refer to the Equity Interest Pledge Agreementexecuted by and among Party A, Party B and Party C on the date of this Agreement, whereby Party B pledge all of their equity interests inParty C to Party A, in order to guarantee Party C’s performance of its obligations under the Exclusive Business Corporation Agreementexecuted by and between Party C and Party A.6秘密文件Strictly Confidential2.知识产权独家购买权Exclusive Option regarding the Intellectual Property Rights2.1本协议签订之日起，若乙方拟转让、出售或以其他方式处置（任一处置方式以下简称“转让”）其拥有或持有的全部或部分知识产权（以下称“知识产权”，定义见第2.4条），甲方有权独家购买该等知识产权。From the date hereof, if Party B proposes to transfer, sell or dispose of (each, a “transfer”) all or any part of the intellectual property rights ownedor held by Party B (“IPR”), Party A shall have exclusive option.2.2若乙方有意转让全部或部分知识产权，应事先向甲方发出书面通知(“转让通知”)，转让通知应载明以下事项：(a) 乙方关于转让知识产权的意向；(b) 乙方拟转让的知识产权清单(“拟转让知识产权”)及转让的价格和其他条件。转让通知视为乙方向甲方发出的一份要约，按照该要约，乙方同意按转让通知中指定的价格条件向甲方转让全部或部分拟转让知识产权。Prior to Party B proposes to transfer all or any part of its IPR, Party B shall give Party A a written notice (“Transfer Notice”), which shall specify (a)Party B’s intention to make the transfer; (b) the list of IPR to be transferred (“Offered IPR”) and the consideration and other conditions uponwhich the transfer is to be made. The Transfer Notice constitutes Party B’s offer given to Party A, pursuant to which, Party B agrees to transfer allor any part of its Offered IPR to Party A based on the same conditions described in the Transfer Notice.7秘密文件Strictly Confidential2.3甲方收到转让通知后，有权在30日内选择按照转让通知中列明的转让价格和条件购买拟转让知识产权。如果甲方行使其独家购买权，双方应于甲方收到转让通知后45日内签订有关的知识产权转让协议，乙方应办理法律规定的知识产权转让的批准和登记手续。Party A shall have an option for a period of 30 days from Party A’s receipt of the Transfer Notice to elect to purchase the Offered IPR at the sameprice and subject to the same conditions as described in the Transfer Notice. If Party A decides to exercise its exclusive option, the parties shallenter into relevant IPR transfer agreement within 45 days upon Party A’s receipt of the Transfer Notice and Party B is responsible to complete allrelated approvals and registrations formalities as prescribed by the PRC law.2.4本协议第2条所称“知识产权”指任何知识产权，包括但不限于著作权、专利权、专利申请权、商标、域名、软件、专有技术，并包括前述知识产权申请权利以及登记注册的权利，以及其他所有与前述知识产权有关的权利和权益。The “IPR” referred to in this Article 2 means any intellectual property rights, including, without limitations, copyrights, patents, patentapplications, trademarks, domain names, software and knowhow together with (a) all rights to apply for or register any of the foregoing and (b) allother rights and interests to any of the foregoing.8秘密文件Strictly Confidential3.承诺Covenants3.1有关丙方的承诺Covenants regarding Party C乙方（作为丙方的股东）和丙方在此承诺：Party B (as the shareholders of Party C) and Party C hereby covenant as follows:3.1.1未经甲方的事先书面同意，不以任何形式补充、更改或修改丙方公司章程文件，增加或减少其注册资本，或以其他方式改变其注册资本结构；Without the prior written consent of Party A, they shall not in any manner supplement, change or amend the articles of association andbylaws of Party C, increase or decrease its registered capital, or change its structure of registered capital in other manners;3.1.2按照良好的财务和商业标准及惯例，保持其公司的存续，审慎地及有效地经营其业务和处理事务；They shall maintain Party C’s corporate existence in accordance with good financial and business standards and practices by prudentlyand effectively operating its business and handling its affairs;3.1.3未经甲方的事先书面同意，不在本协议签署之日起的任何时间出售、转让、抵押或以其他方式处置丙方的任何资产、业务或收入的合法或受益权益，或允许在其上设置任何其他担保权益；Without the prior written consent of Party A, they shall not at any time following the date hereof, sell, transfer, mortgage or dispose of inany manner any assets of Party C or legal or beneficial interest in the business or revenues of Party C, or allow the encumbrance thereonof any security interest;3.1.4未经甲方的事先书面同意，不发生、继承、保证或容许存在任何债务，但(i)正常或日常业务过程中产生而不是通过借款方式产生的债务；和(ii)已向甲方披露和得到甲方书面同意的债务除外；Without the prior written consent of Party A, they shall not incur, inherit, guarantee or suffer the existence of any debt, except for (i)debts incurred in the ordinary course of business other than through loans; and (ii) debts disclosed to Party A for which Party A’swritten consent has been obtained;9秘密文件Strictly Confidential3.1.5一直在正常业务过程中经营所有业务，以保持丙方的资产价值，不进行任何足以影响其经营状况和资产价值的作为/不作为；They shall always operate all of Party C’s businesses during the ordinary course of business to maintain the asset value of Party C andrefrain from any action/omission that may affect Party C’s operating status and asset value;3.1.6未经甲方的事先书面同意，不得让丙方签订任何重大协议，但在正常业务过程中签订的协议除外(就本段而言，如果一份协议的价值超过【人民币10万元】，即被视为重大协议)；Without the prior written consent of Party A, they shall not cause Party C to execute any major contract, except the contracts in theordinary course of business (for purpose of this subsection, a contract with a value exceeding RMB 100,000 shall be deemed a majorcontract);3.1.7未经甲方的事先书面同意，丙方不得向任何人提供贷款或信贷；Without the prior written consent of Party A, they shall not cause Party C to provide any person with any loan or credit;3.1.8应甲方要求，向其提供所有关于丙方的营运和财务状况的资料；They shall provide Party A with information on Party C’s business operations and financial condition at Party A’s request;10秘密文件Strictly Confidential3.1.9如甲方提出要求，丙方应从甲方接受的保险公司处购买和持有有关其资产和业务的保险，该保险的金额和险种应与经营类似业务的公司一致；If requested by Party A, they shall procure and maintain insurance in respect of Party C’s assets and business from an insurance carrieracceptable to Party A, at an amount and type of coverage typical for companies that operate similar businesses;3.1.10未经甲方的事先书面同意，丙方不得与任何人合并或联合，或对任何人进行收购或投资；Without the prior written consent of Party A, they shall not cause or permit Party C to merge, consolidate with, acquire or invest in anyperson;3.1.11将发生的或可能发生的与丙方资产、业务或收入有关的诉讼、仲裁或行政程序立即通知甲方；They shall immediately notify Party A of the occurrence or possible occurrence of any litigation, arbitration or administrative proceedingsrelating to Party C’s assets, business or revenue;3.1.12为保持丙方对其全部资产的所有权，签署所有必要或适当的文件，采取所有必要或适当的行动和提出所有必要或适当的控告或对所有索偿进行必要和适当的抗辩；To maintain the ownership by Party C of all of its assets, they shall execute all necessary or appropriate documents, take all necessary orappropriate actions and file all necessary or appropriate complaints or raise necessary and appropriate defenses against all claims;11秘密文件Strictly Confidential3.1.13未经甲方事先书面同意，不得以任何形式派发股息予各股东，但一经甲方要求，丙方应立即将其所有可分配利润全部立即分配给其各股东；及Without the prior written consent of Party A, they shall ensure that Party C shall not in any manner distribute dividends to itsshareholders, provided that upon Party A’s written request, Party C shall immediately distribute all distributable profits to itsshareholders; and3.1.14根据甲方的要求，委任由其指定的任何人士出任丙方的董事和/或执行董事。At the request of Party A, they shall appoint any persons designated by Party A as the director and/or executive director of Party C.3.2乙方和丙方的承诺Covenants of Party B and Party C乙方承诺：Party B hereby covenant as follows:3.2.1未经甲方的事先书面同意，不出售、转让、抵押或以其他方式处置其拥有的丙方的股权的合法或受益权益，或允许在其上设置任何其他担保权益，但根据乙方签署的《股权质押协议》在该股权上设置的质押则除外；Without the prior written consent of Party A, Party B shall not sell, transfer, mortgage or dispose of in any other manner any legal orbeneficial interest in the equity interests in Party C held by Party B, or allow the encumbrance thereon of any security interest, except forthe pledge placed on these equity interests in accordance with Party B’s Equity Interest Pledge Agreement;12秘密文件Strictly Confidential3.2.2促使丙方股东会和/或执行董事不批准在未经甲方的事先书面同意的情况下，出售、转让、抵押或以其他方式处置任何乙方持有之丙方的股权的合法权益或受益权，或允许在其上设置任何其他担保权益，但批准根据乙方签署的《股权质押协议》在乙方股权上设置的质押则除外；Party B shall cause the shareholders’ meeting and/or the executive director of Party C not to approve the sale, transfer, mortgage ordisposition in any other manner of any legal or beneficial interest in the equity interests in Party C held by Party B, or allow theencumbrance thereon of any security interest, without the prior written consent of Party A, except for the pledge placed on these equityinterests in accordance with Party B’s Equity Interest Pledge Agreement;3.2.3未经甲方的事先书面同意的情况下，对于丙方与任何人合并或联合，或对任何人进行收购或投资，乙方将促成丙方股东会或执行董事不予批准；Party B shall cause the shareholders’ meeting or the executive director of Party C not to approve the merger or consolidation with anyperson, or the acquisition of or investment in any person, without the prior written consent of Party A;3.2.4将发生的或可能发生的任何关于其所拥有的股权的诉讼、仲裁或行政程序立即通知甲方；Party B shall immediately notify Party A of the occurrence or possible occurrence of any litigation, arbitration or administrativeproceedings relating to the equity interests in Party C held by Party B;13秘密文件Strictly Confidential3.2.5促使丙方股东会或执行董事表决赞成本协议规定的被购买的股权的转让并应甲方之要求采取其他任何行动；Party B shall cause the shareholders’ meeting or the executive director of Party C to vote their approval of the transfer of the OptionedInterests as set forth in this Agreement and to take any and all other actions that may be requested by Party A;3.2.6为保持其对股权的所有权，签署所有必要或适当的文件，采取所有必要或适当的行动和提出所有必要或适当的控告或对所有索偿进行必要和适当的抗辩；To the extent necessary to maintain Party B’s ownership in Party C, Party B shall execute all necessary or appropriate documents, take allnecessary or appropriate actions and file all necessary or appropriate complaints or raise necessary and appropriate defenses against allclaims;3.2.7应甲方的要求，委任由其指定的任何人士出任丙方的董事和/或执行董事；Party B shall appoint any designee of Party A as the director and/or executive director of Party C, at the request of Party A;3.2.8经甲方随时要求，应向其指定的代表在任何时间无条件地根据本协议的股权购买权立即转让其股权，并放弃其对其他现有股东进行上述股权转让所享有的优先购买权（如有的话）；和At the request of Party A at any time, Party B shall promptly and unconditionally transfer its equity interests in Party C to Party A’sDesignee(s) in accordance with the Equity Interest Purchase Option under this Agreement, and Party B hereby waives its right of firstrefusal (if any) to the share transfer by the other existing shareholder of Party C (if any); and14秘密文件Strictly Confidential3.2.9严格遵守本协议及各方共同或分别签订的其他协议的各项规定，切实履行该等协议项下的各项义务，并不进行任何足以影响该等协议的有效性和可执行性的作为/不作为。如果乙方对于本协议项下或乙方股权质押协议下或对甲方的授权委托书中的股权，还留存有任何权利，除非甲方书面指示，否则乙方仍不得行使该权利。Party B shall strictly abide by the provisions of this Agreement and other contracts jointly or separately executed by and among Party B,Party C and Party A, perform the obligations hereunder and thereunder, and refrain from any action/omission that may affect theeffectiveness and enforceability thereof. To the extent that Party B has any remaining rights with respect to the equity interests subject tothis Agreement hereunder or under Party B’s Equity Interest Pledge Agreement or under the Power of Attorney granted in favor of PartyA, Party B shall not exercise such rights except in accordance with the written instructions of Party A.4.陈述和保证Representations and Warranties乙方和丙方特此在本协议签署之日和每一个转让日向甲方共同及分别陈述和保证如下：Party B and Party C hereby represent and warrant to Party A, jointly and severally, as of the date of this Agreement and each date of transfer of theOptioned Interests, that:4.1其具有签订和交付本协议和其为一方的、根据本协议为每一次转让被购买的股权而签订的任何股权转让协议(各称为"转让协议")，并履行其在本协议和任何转让协议项下的义务的权力和能力。乙方和丙方同意在甲方行使购买权时，他们将签署与本协议条款一致的转让协议。本协议和其是一方的各转让协议一旦签署后，构成或将对其构成合法、有效及具有约束力的义务并可按照其条款对其强制执行；They have the authority to execute and deliver this Agreement and any share transfer contracts to which they are a party concerning theOptioned Interests to be transferred thereunder (each, a “Transfer Contracts”), and to perform their obligations under this Agreement and anyTransfer Contracts. Party B and Party C agree to enter into Transfer Contracts consistent with the terms of this Agreement upon Party A’s exerciseof the Equity Interest Purchase Option. This Agreement and the Transfer Contracts to which they are a party constitute or will constitute theirlegal, valid and binding obligations and shall be enforceable against them in accordance with the provisions thereof;15秘密文件Strictly Confidential4.2无论是本协议或任何转让协议的签署和交付还是其在本协议或任何转让协议项下的义务的履行均不会：(i)导致违反任何有关的中国法律；(ii)与丙方章程或其他组织文件相抵触；(iii)导致违反其是一方或对其有约束力的任何协议或文件，或构成其是一方或对其有约束力的任何协议或文件项下的违约；(iv)导致违反有关向任何一方颁发的任何许可或批准的授予和(或)继续有效的任何条件；或(v)导致向任何一方颁发的任何许可或批准中止或被撤销或附加条件；The execution and delivery of this Agreement or any Transfer Contracts and the obligations under this Agreement or any Transfer Contracts shallnot: (i) cause any violation of any applicable laws of China; (ii) be inconsistent with the articles of association, bylaws or other organizationaldocuments of Party C; (iii) cause the violation of any contracts or instruments to which they are a party or which are binding on them, orconstitute any breach under any contracts or instruments to which they are a party or which are binding on them; (iv) cause any violation of anycondition for the grant and/or continued effectiveness of any licenses or permits issued to either of them; or (v) cause the suspension orrevocation of or imposition of additional conditions to any licenses or permits issued to either of them;4.3乙方对其在丙方拥有的股权拥有良好和可出售的所有权，除乙方签署的《股权质押协议》外，乙方在上述股权上没有设置任何担保权益；Party B have a good and merchantable title to the equity interests in Party C they hold. Except for Party B’s Equity Interest Pledge Agreement,Party B have not placed any security interest on such equity interests;16秘密文件Strictly Confidential4.4目前没有悬而未决的或构成威胁的与丙方的股权、丙方资产有关的或与丙方有关的诉讼、仲裁或行政程序。There are no pending or threatened litigation, arbitration or administrative proceedings relating to the equity interests in Party C, assets of Party Cor Party C.5.生效日Effective Date5.1本协议于各方签署本协议之日生效，有效期10年，经甲方选择可再延长10年。This Agreement shall become effective upon the date hereof, and remain effective for a term of 10 years, and may be renewed for an additional 10years at Party A’s election.5.2若丙方股东发生变化，由新股东签署此协议，在此协议签署之日，原协议自动视为无效。In the event of a change in the shareholders of Party C, the new shareholder should sign this agreement and the original agreement willautomatically be deemed invalid on the date of signing of this agreement.17秘密文件Strictly Confidential6.适用法律与争议解决Governing Law and Resolution of Disputes6.1适用法律Governing law本协议的订立、效力、解释、履行、修改和终止以及争议解决均适用中国正式公布并可公开得到的法律。对中国正式公布并可公开得到的法律没有规定的事项，将适用国际法律原则和惯例。The execution, effectiveness, construction, performance, amendment and termination of this Agreement and the resolution of disputes hereundershall be governed by the formally published and publicly available laws of China. Matters not covered by formally published and publiclyavailable laws of China shall be governed by international legal principles and practices.6.2争议的解决方法Methods of Resolution of Disputes因解释和履行本协议而发生的任何争议，本协议各方应首先通过友好协商的方式加以解决。如果在一方向其他方发出要求协商解决的书面通知后30天之内争议仍然得不到解决，则任何一方均可将有关争议提交给中国国际经济贸易仲裁委员会，由该会按照其届时有效的仲裁规则仲裁解决。仲裁应在北京进行，使用之语言为中文。仲裁裁决是终局性的，对各方均有约束力。In the event of any dispute with respect to the construction and performance of this Agreement, the Parties shall first resolve the dispute throughfriendly negotiations. In the event the Parties fail to reach an agreement on the dispute within 30 days after either Party’s request to the otherParties for resolution of the dispute through negotiations, either Party may submit the relevant dispute to the China International Economic andTrade Arbitration Commission for arbitration, in accordance with its then effective arbitration rules. The arbitration shall be conducted in Beijing,and the language used in arbitration shall be Chinese. The arbitration award shall be final and binding on all Parties.18秘密文件Strictly Confidential7.税款、费用Taxes and Fees每一方应承担根据中国法律因准备和签署本协议和各转让协议以及完成本协议和各转让协议拟定的交易而由该方发生的或对其征收的任何和全部的转让和注册的税、花费和费用。Each Party shall pay any and all transfer and registration tax, expenses and fees incurred thereby or levied thereon in accordance with the laws of China inconnection with the preparation and execution of this Agreement and the Transfer Contracts, as well as the consummation of the transactionscontemplated under this Agreement and the Transfer Contracts.8.通知Notices8.1本协议项下要求或发出的所有通知和其他通信应通过专人递送、挂号邮寄、邮资预付或商业快递服务或传真的方式发到该方下列地址。每一通知还应再以电子邮件送达。该等通知视为有效送达的日期按如下方式确定：All notices and other communications required or permitted to be given pursuant to this Agreement shall be delivered personally or sent byregistered mail, postage prepaid, by a commercial courier service or by facsimile transmission to the address of such Party set forth below. Aconfirmation copy of each notice shall also be sent by email. The dates on which notices shall be deemed to have been effectively given shall bedetermined as follows:8.1.1通知如果是以专人递送、快递服务或挂号邮寄、邮资预付发出的，则以于设定为通知的地址在接收或拒收之日为有效送达日。Notices given by personal delivery, by courier service or by registered mail, postage prepaid, shall be deemed effectively given on thedate of receipt or refusal at the address specified for notices.19秘密文件Strictly Confidential8.1.2通知如果是以传真发出的，则以成功传送之日为有效送达日（应以自动生成的传送确认信息为证）。Notices given by facsimile transmission shall be deemed effectively given on the date of successful transmission (as evidenced by anautomatically generated confirmation of transmission).8.2为通知的目的，各方地址如下：For the purpose of notices, the addresses of the Parties are as follows:甲方：中传天下信息科技（深圳）有限公司Party A:Zhongchuan Tianxia Information Technology (Shenzhen) Co., Ltd.地址：深圳市南山区高新中三道2号深圳软件园一期五栋401AAddress:401A, Building 5, Phase 1, Shenzhen Software Park, No.2 Gaoxin Zhongsan Road, Nanshan District, Shenzhen.收件人：洪婷Attn:Hong Ting乙方：Party B: 宋雪松Song Xuesong住所：天津市河西区广东路中裕园33702Address:Zhongyu Yuan 33702, Guangdong Road, Hexi District, Tianjin20秘密文件Strictly Confidential陈蔚力Chen Weili住所：广东省深圳市宝安区宝城上川路15号Address:Baocheng Shangchuan Road 15, Baoan District, Shenzhen, Guangdong王平Wang Ping住所：广东省深圳市南山区高新南环路36号彩虹之岸12栋4AAddress:Caihong Zhi’an Building No.12 Suite 4A, Gaoxin Nanhuan Road 36, Nanshan District, Shenzhen, Guangdong刘东来Liu Donglai住所：天津市和平区南京路诚基经贸中心1号楼2门1702号Address:No 1702, Door 2, Build 1, Chengji Economic and Trade Centre, Nanjing Road, Heping District, Tianjin.丙方：北京中传视讯科技有限公司Party C:Beijing Mobile Vision Technology Co., Ltd.地址：北京市朝阳区光华路9号SOHO3QLAB32Address: LAB32, SOHO3Q, No 9, Guanghua Road, Chaoyang District, Beijing .收件人：宋雪松Attn: Song Xuesong8.3任何一方可按本条规定随时给其他方发出通知来改变其接收通知的地址。Any Party may at any time change its address for notices by a notice delivered to the other Parties in accordance with the terms hereof.21秘密文件Strictly Confidential9.保密责任Confidentiality各方承认及确定彼此就有关本协议而交换的任何口头或书面资料均属机密资料。各方应当对所有该等资料予以保密，而在未得其他方书面同意前，不得向任何第三者披露任何有关资料，惟下列情况除外：(a)公众人士知悉或将会知悉该等资料(并非由接受资料之一方擅自向公众披露)；(b)适用法律法规或股票交易的规则或规例所需披露之资料；或(c)由任何一方就本协议所述交易而需向其法律或财务顾问披露之资料而该法律或财务顾问亦需遵守与本条款相类似之保密责任。如任何一方工作人员或聘请机构的泄密均视为该方的泄密，需依本协议承担违约责任。无论本协议以任何理由终止，本条款仍然生效。The Parties acknowledge that any oral or written information exchanged among them with respect to this Agreement is confidential information. Each Partyshall maintain the confidentiality of all such information, and without obtaining the written consent of other Parties, it shall not disclose any relevantinformation to any third parties, except in the following circumstances: (a) such information is or will be in the public domain (provided that this is not theresult of a public disclosure by the receiving party); (b) information disclosed as required by applicable laws or rules or regulations of any stock exchange;or (c) information required to be disclosed by any Party to its legal counsel or financial advisor regarding the transaction contemplated hereunder, and suchlegal counsel or financial advisor are also bound by confidentiality duties similar to the duties in this section. Disclosure of any confidential information bythe staff members or agency hired by any Party shall be deemed disclosure of such confidential information by such Party, which Party shall be held liablefor breach of this Agreement. This Section shall survive the termination of this Agreement for any reason.22秘密文件Strictly Confidential10.进一步保证Further Warranties各方同意迅速签署为执行本协议的各项规定和目的而合理需要的或对其有利的文件，以及为执行本协议的各项规定和目的而采取合理需要的或对其有利的进一步行动。The Parties agree to promptly execute documents that are reasonably required for or are conducive to the implementation of the provisions and purposes ofthis Agreement and take further actions that are reasonably required for or are conducive to the implementation of the provisions and purposes of thisAgreement.11.其他Miscellaneous11.1修订、修改与补充Amendment, change and supplement对本协议作出修订、修改与补充，必须经每一方签署书面协议。Any amendment, change and supplement to this Agreement shall require the execution of a written agreement by all of the Parties.11.2完整协议Entire agreement除了在本协议签署后所作出的书面修订、补充或修改以外，本协议构成本协议各方就本协议标的物所达成的完整协议，取代在此之前就本协议标的物所达成的所有口头或书面的协商、陈述和协议。 Except for the amendments, supplements or changes in writing executed after theexecution of this Agreement, this Agreement shall constitute the entire agreement reached by and among the Parties hereto with respect to thesubject matter hereof, and shall supercede all prior oral and written consultations, representations and contracts reached with respect to thesubject matter of this Agreement.23秘密文件Strictly Confidential11.3标题Headings本协议的标题仅为方便阅读而设，不应被用来解释、说明或在其他方面影响本协议各项规定的含义。The headings of this Agreement are for convenience only, and shall not be used to interpret, explain or otherwise affect the meanings of theprovisions of this Agreement.11.4语言Language本协议以中文和英文书就，一式八份，乙方共计六名股东以及甲方、丙方各持一份，具有同等效力；中英文版本如有冲突，应以中文版为准。This Agreement is written in both Chinese and English language in eight copies, the 6 shareholders of Party B, Party A and Party C having onecopy with equal legal validity respectively; in case there is any conflict between the Chinese version and the English version, the Chinese versionshall prevail.11.5可分割性Severability如果本协议有任何一条或多条规定根据任何法律或法规在任何方面被裁定为无效、不合法或不可执行，本协议其余规定的有效性、合法性或可执行性不应因此在任何方面受到影响或损害。各方应通过诚意磋商，争取以法律许可以及各方期望的最大限度内有效的规定取代那些无效、不合法或不可执行的规定，而该等有效的规定所产生的经济效果应尽可能与那些无效、不合法或不能强制执行的规定所产生的经济效果相似。In the event that one or several of the provisions of this Agreement are found to be invalid, illegal or unenforceable in any aspect in accordancewith any laws or regulations, the validity, legality or enforceability of the remaining provisions of this Agreement shall not be affected orcompromised in any respect. The Parties shall strive in good faith to replace such invalid, illegal or unenforceable provisions with effectiveprovisions that accomplish to the greatest extent permitted by law and the intentions of the Parties, and the economic effect of such effectiveprovisions shall be as close as possible to the economic effect of those invalid, illegal or unenforceable provisions.24秘密文件Strictly Confidential11.6继任者Successors本协议对各方各自的继任者和各方所允许的受让方应具有约束力并对其有利。This Agreement shall be binding on and shall inure to the interest of the respective successors of the Parties and the permitted assigns of suchParties.11.7继续有效Survival11.7.1协议期满或提前终止前因本协议而发生的或到期的任何义务在本协议期满或提前终止后继续有效。Any obligations that occur or that are due as a result of this Agreement upon the expiration or early termination of this Agreement shallsurvive the expiration or early termination thereof.11.7.2本协议第5、6、9条和本第11.7条的规定在本协议终止后继续有效。The provisions of Articles 5, 6, 9 and this Section 11.7 shall survive the termination of this Agreement.25秘密文件Strictly Confidential11.8弃权Waivers任何一方可以对本协议的条款和条件作出弃权，但必须经书面作出并经各方签字。一方在某种情况下就其他方的违约所作的弃权不应被视为该方在其他情况下就类似的违约已经对其他方作出弃权。Any Party may waive the terms and conditions of this Agreement, provided that such a waiver must be provided in writing and shall require thesignatures of the Parties. No waiver by any Party in certain circumstances with respect to a breach by other Parties shall operate as a waiver bysuch a Party with respect to any similar breach in other circumstances.本页其余部分刻意留为空白The Remainder of this page is intentionally left blank26秘密文件Strictly Confidential有鉴于此，各方已自行或使得其各自授权代表于文首所载日期签署本独家购买权协议。IN WITNESS WHEREOF, the Parties have executed, or caused their respective duly authorized representatives to execute, this Exclusive Option Agreement as ofthe date first above written.甲方：中传天下信息科技（深圳）有限公司（盖章）Party A: Zhongchuan Tianxia Information Technology (Shenzhen) Co., Ltd. (Seal)签字：By:/s/ Hong Ting姓名：洪婷Name: Hong Ting职务：总经理Title: General Manager秘密文件 Strictly Confidential有鉴于此，各方已自行或使得其各自授权代表于文首所载日期签署本独家购买权协议。IN WITNESS WHEREOF, the Parties have executed, or caused their respective duly authorized representatives to execute, this Exclusive Option Agreement as ofthe date first above written.乙方：Party B:宋雪松Song Xuesong签字：By:/s/ Song Xuesong秘密文件 Strictly Confidential有鉴于此，各方已自行或使得其各自授权代表于文首所载日期签署本独家购买权协议。IN WITNESS WHEREOF, the Parties have executed, or caused their respective duly authorized representatives to execute, this Exclusive Option Agreement as ofthe date first above written.乙方：Party B:陈蔚力Chen Weili签字：By:/s/ Chen Weili秘密文件 Strictly Confidential有鉴于此，各方已自行或使得其各自授权代表于文首所载日期签署本独家购买权协议。IN WITNESS WHEREOF, the Parties have executed, or caused their respective duly authorized representatives to execute, this Exclusive Option Agreement as ofthe date first above written.乙方：Party B:王平Wang Ping签字：By:/s/ Wang Ping秘密文件 Strictly Confidential有鉴于此，各方已自行或使得其各自授权代表于文首所载日期签署本独家购买权协议。IN WITNESS WHEREOF, the Parties have executed, or caused their respective duly authorized representatives to execute, this Exclusive Option Agreement as ofthe date first above written.乙方：Party B:刘东来Liu Donglai签字：By:/s/ Liu Donglai秘密文件 Strictly Confidential有鉴于此，各方已自行或使得其各自授权代表于文首所载日期签署本独家购买权协议。IN WITNESS WHEREOF, the Parties have executed, or caused their respective duly authorized representatives to execute, this Exclusive Option Agreement as ofthe date first above written.丙方：北京中传视讯科技有限公司（盖章）Party B: Beijing Mobile Vision Technology Co., Ltd. (Seal)签字：By:/s/ Song Xuesong姓名：宋雪松Name:Song Xuesong职务：董事长Title:Chairman of the Board秘密文件 Strictly ConfidentialEX4.17 5 f20f2017ex417_luokung.htm EQUITY INTEREST PLEDGE AGREEMENT BY AND AMONG ZHONGCHUAN TIANXIA INFORMATION TECHNOLOGY(SHENZHEN) CO., LTD., XUESONG SONG, WEILI CHEN, PING WANG, DONGLAI LIU, AND BEIJING MOBILE VISION TECHNOLOGY CO., LTD., DATEDAUGUST 31, 2015Exhibit 4.17股权质押协议Equity Interest Pledge Agreement本股权质押协议（下称"本协议”）由下列各方于年月日在中华人民共和国（下称“中国”）北京签订：This Equity Interest Pledge Agreement (this "Agreement") has been executed by and among the following parties on in Beijing, the People’sRepublic of China (the “China” or “PRC”):甲方：中传天下信息科技（深圳）有限公司（下称“质权人”）Party A: Zhongchuan Tianxia Information Technology (Beijing) Co., Ltd. (“Pledgee”)地址：深圳市南山区高新中三道2号深圳软件园一期五栋401AAddress: 401A, Building 5, Phase 1, Shenzhen Software Park, No.2 Gaoxin Zhongsan Road, Nanshan District, Shenzhen统一社会信用代码： 91440300565701058RUniform Social Credit Code: 91440300565701058R乙方(下称“出质人”)：Party B ( “Pledgors”):a)宋雪松Song Xuesong身份证号码:ID Card No.:b)陈蔚力Chen Weili身份证号码:ID Card No.:1秘密文件 Strictly Confidentialc)王平Wang Ping身份证号码:ID Card No.:d)刘东来Liu Donglai身份证号码:ID Card No.:丙方：北京中传视讯科技有限公司Party C: Beijing Mobile Vision Technology Co., Ltd.地址：北京市朝阳区光华路9号SOHO3QLAB32Address: LAB32, SOHO3Q, No 9, Guanghua Road, Chaoyang District, Beijing统一社会信用代码：9111010576215249XMUniform Social Credit Code: 9111010576215249XM在本协议中，质权人、出质人和丙方以下各称“一方”，合称“各方”。In this Agreement, each of Pledgee, Pledgors and Party C shall be referred to as a "Party" respectively, and they shall be collectively referred to as the"Parties".鉴于：Whereas:1．出质人全部为中国境内居民自然人，共同持有丙方100%的股权。丙方是一家在中国注册成立的、主要从事手机视频技术研发、内容制作和产业化市场推广的有限责任公司。丙方有意在此确认出质人和质权人在本协议下的权利和义务并提供必要的协助登记该质权；All of the Pledgors are natural persons resided in PRC, and collectively hold 100% of the equity interest in Party C. Party C is a limited company registered inChina, mainly engaging in mobile video frequency technology research, development, content creation, sale and related industrialization promotion. Party Cacknowledges the respective rights and obligations of Pledgors and Pledgee under this Agreement, and intends to provide any necessary assistance inregistering the Pledge;2．质权人是一家在中国注册的外商独资企业。质权人与丙方于年月日签订了独家业务合作协议；Pledgee is a whollyforeignowned enterprise registered in China. Pledgee and Party C have executed an Exclusive Business Cooperation Agreement as of [*],[*];3．为了保证丙方全面履行独家业务合作协议项下的义务，出质人以其拥有的全部丙方股权向质权人做出质押担保。To ensure that Party C fully performs its obligations under the Exclusive Business Cooperation Agreement, Pledgors hereby pledge to the Pledgee all of theequity interests they hold in Party C.为了履行业务合作协议的条款，各方商定按照以下条款签订本协议。To perform the provisions of the Business Cooperation Agreement, the Parties have mutually agreed to execute this Agreement upon the following terms.2秘密文件 Strictly Confidential1.定义Definitions除非本协议另有规定，下列词语含义为：Unless otherwise provided herein, the terms below shall have the following meanings:1.1质权：指出质人根据本协议第2条给予质权人的担保物权，即指质权人所享有的，以出质人质押给质权人的股权折价或拍卖、变卖该股权的价款优先受偿的权利。Pledge: shall refer to the security interest granted by Pledgors to Pledgee pursuant to Article 2 of this Agreement, i.e., the right of Pledgee to becompensated on a preferential basis with the conversion, auction or sales price of the Equity Interest.1.2股权：指出质人现在和将来（通过增资和/或转股）合法持有的其在丙方的全部股权权益。Equity Interest: shall refer to all of the equity interest in Party C lawfully, held now and to be held (through capital increase and/or equity transfer)hereafter by Pledgors.1.3质押期限：指本协议第3条规定的期间。Term of Pledge: shall refer to the term set forth in Article 3 of this Agreement.1.4业务合作协议：指丙方与质权人于本协议日签订的独家业务合作协议。Business Cooperation Agreement: shall refer to the Exclusive Business Cooperation Agreement executed by and between Party C and Pledgee on thedate of this Agreement.1.5违约事件：指本协议第7条所列任何情况。Event of Default: shall refer to any of the circumstances set forth in Article 7 of this Agreement.1.6违约通知：指质权人根据本协议发出的宣布违约事件的通知。Notice of Default: shall refer to the notice issued by Pledgee in accordance with this Agreement declaring an Event of Default.3秘密文件 Strictly Confidential2.质权The Pledge作为丙方按时和全额支付业务合作协议项下质权人应得的任何或全部的款项，包括但不限于业务合作协议中规定的咨询和服务费的担保（无论该等费用的到期应付是由于到期日的到来、提前收款的要求或其它原因），以及丙方充分履行其在业务合作协议项下其他所有义务（丙方按时和全额支付业务合作协议项下甲方应得的任何或全部的款项及丙方在业务合作协议项下其他所有义务，以下统称为“被担保债务”）的担保，出质人特此将其现有或将拥有的丙方的全部股权权益质押给质权人。As collateral security for the timely and complete payment and performance when due (whether at stated maturity, by acceleration or otherwise) of any or all ofthe payments due (the “all payments in pledge”) by Party C, including without limitation the consulting and services fees payable to the Pledgee under theBusiness Cooperation Agreement, Pledgors hereby pledge to Pledgee a first security interest in all of Pledgors’ right, title and interest, whether now owned orhereafter acquired by Pledgors, in the Equity Interest of Party C.3.质押期限Term of Pledge3.1本质权自本协议项下的股权出质在相应的工商行政管理机关登记之日起生效，质权有效期持续到业务合作协议下所有丙方欠付质权人的款项结清为止。出质人和丙方应（一）自本协议签署之日起3个工作日内，将本协议的质权登记在丙方股东名册上，并（二）自本协议签署之日起10个工作日内向相应的工商行政管理机关申请登记本协议项下的质权。各方共同确认，为办理股权质押工商登记手续，各方及丙方其他股东应按照丙方所在地工商行政管理部门要求的形式签署、真实反映本协议项下质权信息的《股权质押合同》（以下简称“工商登记质押合同”）提交给工商管理机关，工商登记质押合同中未约定事项，仍以本协议约定为准。出质人和丙方应当按照中国法律法规和有关工商行政管理机关的各项要求，提交所有必要的文件并办理所有必要手续，保证质权在递交申请后尽快获得登记。如果出质人持有的丙方注册资本数额增加（不管是通过直接认缴丙方的增资还是从其他股东处受让股权），各方一致同意将采取一切必要的行动和签署一切必要的文件以按照登记机关的要求完成质权的变更登记，以确保本协议项下的质权的持续有效。The Pledge shall become effective on such date when the pledge of the Equity Interest contemplated herein has been registered’ with relevantadministration for industry and commerce (the “AIC”). The Pledge shall be continuously valid until all payments due under the Business CooperationAgreement have been fulfilled by Party C. Pledgors and Party C shall (1) register the Pledge in the shareholders' register of Party C within 3 businessdays following the execution of this Agreement, and (2) submit an application to the AIC for the registration of the Pledge of the Equity Interestcontemplated herein within 10 business days following the execution of this Agreement. The parties covenant that for the purpose of registration of thePledge, the parties hereto and all other shareholders of Party C shall submit to the AIC the Equity Interest Pledge Contract in the form required by theAIC at the location of Party C which shall truly reflect the information of the Pledge hereunder (the “AIC Pledge Contract”). For matters not specified inthe AIC Pledge Contract, the parties shall be bound by the provisions of this Agreement. Pledgors and Party C shall submit all necessary documentsand complete all necessary procedures, as required by the PRC laws and regulations and the relevant AIC, to ensure that the Pledge of the EquityInterest shall be registered with the AIC as soon as possible after filing. In the event that the amount of registered capital held by Pledgors is increased(either by subscribing increased registered capital from Party C or acquiring equity interest from other shareholders), the Parties hereto agree that theyshall take any necessary action and execute any necessary document to complete the registration of change of Pledge according to the requirement ofAIC so that the Pledge in this Agreement remains effective.4秘密文件 Strictly Confidential3.2质押期限内，如丙方未按业务合作协议交付咨询服务费等费用，质权人有权但无义务按本协议的规定处分质权。During the Term of Pledge, in the event Party C fails to pay the exclusive consulting or service fees in accordance with the Business CooperationAgreement, Pledgee shall have the right, but not the obligation, to dispose of the Pledge in accordance with the provisions of this Agreement.4.质权凭证的保管Custody of Records for Equity Interest subject to Pledge4.1在本协议规定的质押期限内，出质人应将其在丙方的股权出资证明书及记载质权的股东名册交付质权人保管。出质人应在本协议签订之日起一周内将上述股权出资证明书及股东名册交付给质权人。质权人将在本协议规定的全部质押期间一直保管这些项目。During the Term of Pledge set forth in this Agreement, Pledgors shall deliver to Pledgee's custody the capital contribution certificate for the EquityInterest and the shareholders' register containing the Pledge within one week from the execution of this Agreement. Pledgee shall have custody of suchitems during the entire Term of Pledge set forth in this Agreement.4.2在质押期限内，股权所产生的红利应当无条件归质权人所有。Dividends generated by the Equity Interest shall be unconditionally owned by the Pledgee during the Term of Pledge.5秘密文件 Strictly Confidential5.出质人的声明和保证Representations and Warranties of Pledgors5.1出质人是股权唯一的合法所有人。Pledgors are the sole legal and beneficial owners of the Equity Interest.5.2质权人有权以本协议规定的方式处分并转让股权。Pledgee shall have the right to dispose of and transfer the Equity Interest in accordance with the provisions set forth in this Agreement.5.3除本质权之外，出质人未在股权上设置任何其他质押权利或其他担保权益。Except for the Pledge, Pledgors have not placed any security interest or other encumbrance on the Equity Interest.6.出质人的承诺和确认Covenants and Further Agreements of Pledgors6.1在本协议存续期间，所有出质人向质权人承诺，出质人将：All of the Pledgors hereby covenant to the Pledgee, that during the term of this Agreement, Pledgors shall:6.1.1除履行由出质人与质权人、丙方于本协议签署日签订的《独家购买权合同》外，未经质权人事先书面同意，不得转让股权，不得在股权上设立或允许存在任何担保或其他债务负担；not transfer the Equity Interest, place or permit the existence of any security interest or other encumbrance on the Equity Interest, without theprior written consent of Pledgee, except for the performance of the Exclusive Option Agreement executed by Pledgors, the Pledgee and Party Con the execution date of this Agreement;6秘密文件 Strictly Confidential6.1.2遵守并执行所有有关权利质押的法律、法规的规定，在收到有关主管机关就质权发出或制定的通知、指令或建议时，于五日内向质权人出示上述通知、指令或建议，同时遵守上述通知、指令或建议，或按照质权人的合理要求或经质权人同意就上述事宜提出反对意见和陈述；comply with the provisions of all laws and regulations applicable to the pledge of rights, and within 5 days of receipt of any notice, order orrecommendation issued or prepared by relevant competent authorities regarding the Pledge, shall present the aforementioned notice, order orrecommendation to Pledgee, and shall comply with the aforementioned notice, order or recommendation or submit objections andrepresentations with respect to the aforementioned matters upon Pledgee's reasonable request or upon consent of Pledgee;6.1.3将任何可能导致对出质人股权或其任何部分的权利产生影响的事件或收到的通知，以及可能改变出质人在本协议中的任何保证、义务或对出质人履行其在本协议中义务可能产生影响的任何事件或收到的通知及时通知质权人。promptly notify Pledgee of any event or notice received by Pledgors that may have an impact on Pledgee's rights to the Equity Interest or anyportion thereof, as well as any event or notice received by Pledgors that may have an impact on any guarantees and other obligations ofPledgors arising out of this Agreement.6.2出质人同意，质权人按本协议条款取得的对质权享有的权利，不应受到出质人或出质人的继承人或出质人之委托人或任何其他人通过法律程序的中断或妨害。Pledgors agree that the rights acquired by Pledgee in accordance with this Agreement with respect to the Pledge shall not be interrupted or harmed byPledgors or any heirs or representatives of Pledgors or any other persons through any legal proceedings.7秘密文件 Strictly Confidential6.3出质人向质权人保证，为保护或完善本协议对偿付业务合作协议项下被担保债务的担保，出质人将诚实签署、并促使其他与质权有利害关系的当事人签署质权人所要求的所有的权利证书、契约和/或履行并促使其他有利害关系的当事人履行质权人所要求的行为，并为本协议赋予质权人之权利、授权的行使提供便利，与质权人或其指定的人(自然人/法人)签署所有的有关股权所有权的文件，并在合理期间内向质权人提供其认为需要的所有的有关质权的通知、命令及决定。To protect or perfect the security interest granted by this Agreement for payment of all payment in pledge under the Business Cooperation Agreement,Pledgors hereby undertake to execute in good faith and to cause other parties who have an interest in the Pledge to execute all certificates, agreements,deeds and/or covenants required by Pledgee. Pledgors also undertake to perform and to cause other parties who have an interest in the Pledge toperform actions required by Pledgee, to facilitate the exercise by Pledgee of its rights and authority granted thereto by this Agreement, and to enter intoall relevant documents regarding ownership of Equity Interest with Pledgee or designee(s) of Pledgee (natural persons/legal persons). Pledgorsundertake to provide Pledgee within a reasonable time with all notices, orders and decisions regarding the Pledge that are required by Pledgee.6.4出质人向质权人保证，出质人将遵守、履行本协议项下所有的保证、承诺、协议、陈述及条件。如出质人不履行或不完全履行其保证、承诺、协议、陈述及条件，出质人应赔偿质权人由此遭受的一切损失。Pledgors hereby undertake to comply with and perform all guarantees, promises, agreements, representations and conditions under this Agreement. Inthe event of failure the whole or partial performance of its guarantees, promises, agreements, representations and conditions, Pledgors shall indemnifyPledgee for all losses resulting therefrom.8秘密文件 Strictly Confidential7.违约事件Event of Default7.1下列事项均被视为违约事件：The following circumstances shall be deemed Event of Default:7.1.1丙方未能按期、完整履行任何业务合作协议项下责任，包括但不限于丙方未能按期足额支付业务合作协议项下的应付的被担保债务或有违反该协议其他义务的行为；Party C fails to fully and timely fulfill any liabilities under the Business Cooperation Agreement, including without limitation failure to pay infull any of the all payment in pledge payable under the Business Cooperation Agreement or breaches any other obligations of Party Cthereunder;7.1.2出质人或丙方实质违反本协议的任何条款；Pledgors or Party C have committed a material breach of any provisions of this Agreement;7.1.3除本协议第6.1.1条的约定外，出质人舍弃出质的股权或未获得质权人书面同意而擅自转让或意图转让出质的股权；和Except as expressly stipulated in Section 6.1.1, Pledgors transfers or purports to transfer or abandons the Equity Interest pledged or assignsthe Equity Interest pledged without the written consent of Pledgee; and7.1.4丙方的继承人或代管人只能履行部分或拒绝履行业务合作协议项下的支付责任。The successor or custodian of Party C is capable of only partially perform or refuses to perform the payment obligations under the BusinessCooperation Agreement.9秘密文件 Strictly Confidential7.2如知道或发现本第7.1条所述的任何事项或可能导致上述事项的事件已经发生，出质人应立即以书面形式通知质权人。Upon notice or discovery of the occurrence of any circumstances or event that may lead to the aforementioned circumstances described in Section 7.1,Pledgors shall immediately notify Pledgee in writing accordingly.7.3除非第7.1部分下的违约事件在质权人向出质人发出要求其修补此违约行为通知后的二十（20）天之内已经按质权人要求获得救济，质权人在其后的任何时间，可向出质人发出书面违约通知，要求依据第8部分履行其处理股权的权利。Unless an Event of Default set forth in this Section 7.1 has been successfully resolved to Pledgee's satisfaction within twenty (20) days after the Pledgeedelivers a notice to the Pledgors requesting ratification of such Event of Default, Pledgee may issue a Notice of Default to Pledgors in writing at any timethereafter, demanding the Pledgors to immediately dispose of the Pledge in accordance with the provisions of Article 8 of this Agreement.8.质权的行使Exercise of Pledge8.1在被担保债务被全部清偿或履行前，未经质权人书面同意，出质人不得转让本质权和其拥有的丙方股权。Prior to the full payment of all payments in pledge, without the Pledgee's written consent, Pledgors shall not assign the Pledge or the Equity Interest inParty C.8.2在质权人行使其质押权利时，质权人可以向出质人发出书面违约通知。Pledgee may issue a Notice of Default to Pledgors when exercising the Pledge.10秘密文件 Strictly Confidential8.3在质权人行使其质押权利时，根据中国有关法律的规定，质权人有权按照法定程序处置质押股权。仅在中国法律允许的范围内，对于处置的所得，质权人无需给付出质人；除非中国法律另有规定，出质人特此放弃其可能有的能向质权人要求任何质押股权处置所得的权利；同样，出质人对质权人在该质押股权处置后的亏损也不承担任何义务。When the Pledgor exercises the pledge right, Pledgee is entitled to dispose of the Equity Interest pledged in accordance with applicable PRC laws. Onlyto the extent permitted under applicable PRC laws, Pledgee has no obligation to account to Pledgors for proceeds of disposition of the Equity Interest.Unless otherwise required by PRC laws, Pledgors hereby waive any rights it may have to demand any such accounting from Pledgee; Likewise, in suchcircumstance Pledgors shall have no obligation to Pledgee for any deficiency remaining after such disposition of the Equity Interest pledged.8.4质权人依照本协议处分质权时，出质人和丙方应予以必要的协助，以使质权人实现其质权。When Pledgee disposes of the Pledge in accordance with this Agreement, Pledgors and Party C shall provide necessary assistance to enable Pledgee toenforce the Pledge in accordance with this Agreement.9.转让Assignment9.1除非经质权人事先同意，出质人无权赠予或转让其在本协议项下的权利义务。Without Pledgee's prior written consent, Pledgors shall not have the right to assign or delegate its rights and obligations under this Agreement.11秘密文件 Strictly Confidential9.2本协议对出质人及其继任人和经许可的受让人均有约束力，并且对质权人及每一继任人和受让人有效。This Agreement shall be binding on Pledgors and their successors and permitted assigns, and shall be valid with respect to Pledgee and each of itssuccessors and assigns.9.3经出质人同意，质权人可以在任何时候将其在业务合作协议项下的所有或任何权利和义务转让给其指定的关联方（自然人/法人），在这种情况下，受让人应享有和承担本协议项下质权人享有和承担的权利和义务，如同其作为原协议方应享有和承担的一样。质权人转让业务合作协议项下的权利和义务时，应质权人要求，出质人应就此转让签署有关协议和/或文件。Upon the Pledgors’ agreement, Pledgee may assign any or all of its rights and obligations under the Business Cooperation Agreement to its designee(s)(natural/legal persons) at any time, in which case the assigns shall have the rights and obligations of Pledgee under this Agreement, as if it were theoriginal party to this Agreement. When the Pledgee assigns the rights and obligations under the Business Cooperation Agreement, upon Pledgee'srequest, Pledgors shall execute relevant agreements or other documents relating to such assignment.9.4因转让所导致的质权人变更后，应质权人要求，出质人应与新的质权人签订一份内容与本协议一致的新质押协议，并在相应的工商行政管理机关进行登记。In the event of a change in Pledgee due to an assignment, Pledgors shall, at the request of Pledgee, execute a new pledge agreement with the newpledgee on the same terms and conditions as this Agreement, and register the same with the relevant AIC.12秘密文件 Strictly Confidential9.5出质人应严格遵守本协议和各方单独或共同签署的其他有关协议的规定，包括独家购买权合同和对质权人的授权委托书，履行各协议项下的义务，并不进行任何足以影响协议的有效性和可强制执行性的作为/不作为。除非根据质权人的书面指示，出质人不得行使其对质押股权还留存的权利。Pledgors shall strictly abide by the provisions of this Agreement and other contracts jointly or separately executed by the Parties hereto or any of them,including the Exclusive Option Agreement and the Power of Attorney granted to Pledgee, perform the obligations hereunder and thereunder, and refrainfrom any action/omission that may affect the effectiveness and enforceability thereof. Any remaining rights of Pledgors with respect to the EquityInterest pledged hereunder shall not be exercised by Pledgors except in accordance with the written instructions of Pledgee.10.终止Termination在被担保债务被全部清偿或履行完毕之后，本质权人应在尽早合理可行的时间内办理或配合办理解除质押的手续，出质人与丙方应提供相应的配合与协助。Upon the full payment of all payments in pledge under the Business Cooperation Agreement a, Pledgor shall then, with the assistance of Party B and Party C,go through the procedures of cancellation of pledge rights at a reasonable time as soon as practicable.11.手续费及其他费用Handling Fees and Other Expenses一切与本协议有关的费用及实际开支，其中包括但不限于法律费用、工本费、印花税以及任何其他税收、费用等全部由丙方承担。All fees and out of pocket expenses relating to this Agreement, including but not limited to legal costs, costs of production, stamp tax and any other taxes andfees, shall be borne by Party C.13秘密文件 Strictly Confidential12.保密责任Confidentiality各方承认及确定有关本协议、本协议内容，以及彼此就准备或履行本协议而交换的任何口头或书面资料均被视为保密信息。各方应当对所有该等保密信息予以保密，而在未得到另一方书面同意前，不得向任何第三者披露任何保密信息，惟下列信息除外：(a)公众人士知悉或将会知悉的任何信息（惟并非由接受保密信息之一方擅自向公众披露）；(b)根据适用法律法规、股票交易规则、或政府部门或法院的命令而所需披露之任何信息；或(c)由任何一方就本协议所述交易而需向其股东、投资者、法律或财务顾问披露之信息，而该股东、法律或财务顾问亦需遵守与本条款相类似之保密责任。如任何一方工作人员或聘请机构的泄密均视为该方的泄密，需依本协议承担违约责任。无论本协议以任何理由终止，本条款仍然生效。The Parties acknowledge that the existence and the terms of this Agreement and any oral or written information exchanged between the Parties in connectionwith the preparation and performance this Agreement are regarded as confidential information. Each Party shall maintain confidentiality of all such confidentialinformation, and without obtaining the written consent of the other Party, it shall not disclose any relevant confidential information to any third parties, exceptfor the information that: (a) is or will be in the public domain (other than through the receiving Party’s unauthorized disclosure); (b) is under the obligation tobe disclosed pursuant to the applicable laws or regulations, rules of any stock exchange, or orders of the court or other government authorities; or (c) isrequired to be disclosed by any Party to its shareholders, investors, legal counsels or financial advisors regarding the transaction contemplated hereunder,provided that such shareholders, investors, legal counsels or financial advisors shall be bound by the confidentiality obligations similar to those set forth inthis Section. Disclosure of any confidential information by the staff members or agencies hired by any Party shall be deemed disclosure of such confidentialinformation by such Party, which Party shall be held liable for breach of this Agreement. This Section shall survive the termination of this Agreement for anyreason.14秘密文件 Strictly Confidential13.适用法律和争议的解决Governing Law and Resolution of Disputes13.1本协议的订立、效力、解释、履行、修改和终止以及争议的解决均适用中国法律。The execution, effectiveness, construction, performance, amendment and termination of this Agreement and the resolution of disputes hereunder shallbe governed by the laws of China.13.2因解释和履行本协议而发生的任何争议，本协议各方应首先通过友好协商的方式加以解决。如果在一方向其他方发出要求协商解决的书面通知后30天之内争议仍然得不到解决，则任何一方均可将有关争议提交给中国国际经济贸易仲裁委员会，由该会按照其仲裁规则仲裁解决。仲裁应在北京进行，使用之语言为中文。仲裁裁决是终局性的，对各方均有约束力。In the event of any dispute with respect to the construction and performance of this Agreement, the Parties shall first resolve the dispute throughfriendly negotiations. In the event the Parties fail to reach an agreement on the dispute within 30 days after either Party's request to the other Parties forresolution of the dispute through negotiations, either Party may submit the relevant dispute to the China International Economic and Trade ArbitrationCommission for arbitration, in accordance with its Arbitration Rules. The arbitration shall be conducted in Beijing, and the language used in arbitrationshall be Chinese. The arbitration award shall be final and binding on all Parties.13.3因解释和履行本协议而发生任何争议或任何争议正在进行仲裁时，除争议的事项外，本协议各方仍应继续行使各自在本协议项下的其他权利并履行各自在本协议项下的其他义务。Upon the occurrence of any disputes arising from the construction and performance of this Agreement or during the pending arbitration of any dispute,except for the matters under dispute, the Parties to this Agreement shall continue to exercise their respective rights under this Agreement and performtheir respective obligations under this Agreement.15秘密文件 Strictly Confidential14.通知Notices14.1本协议项下要求或发出的所有通知和其他通信应通过专人递送、挂号邮寄、邮资预付或商业快递服务或传真的方式发到该方下列地址。每一通知还应再以电子邮件送达。该等通知视为有效送达的日期按如下方式确定：All notices and other communications required or permitted to be given pursuant to this Agreement shall be delivered personally or sent by registeredmail, postage prepaid, by a commercial courier service or by facsimile transmission to the address of such party set forth below. A confirmation copy ofeach notice shall also be sent by Email. The dates on which notices shall be deemed to have been effectively given shall be determined as follows:14.1.1通知如果是以专人递送、快递服务或挂号邮寄、邮资预付发出的，则以于设定为通知的地址在接收或拒收之日为有效送达日。Notices given by personal delivery, by courier service or by registered mail, postage prepaid, shall be deemed effectively given on the date ofreceipt or refusal at the address specified for notices.14.1.2通知如果是以传真发出的，则以成功传送之日为有效送达日（应以自动生成的传送确认信息为证）。Notices given by facsimile transmission shall be deemed effectively given on the date of successful transmission (as evidenced by anautomatically generated confirmation of transmission).16秘密文件 Strictly Confidential14.2为通知的目的，各方地址如下：For the purpose of notices, the addresses of the Parties are as follows:甲方：中传天下信息科技（深圳）有限公司Party A: Zhongchuan Tianxia Information Technology (Shenzhen) Co., Ltd.地址：深圳市南山区高新中三道2号深圳软件园一期五栋401AAddress: 401A, Building 5, Phase 1, Shenzhen Software Park, No.2 Gaoxin Zhongsan Road, Nanshan District, Shenzhen.收件人：洪婷Attn: Hong Ting乙方：Party B:a)宋雪松Song Xuesong地址：125.Expenses, including legal fees, incurred by a director in defending any legal, administrative or investigative proceedings may be paid by the Company inadvance of the final disposition of such proceedings upon receipt of an undertaking by or on behalf of the director to repay the amount if it shall ultimatelybe determined that the director is not entitled to be indemnified by the Company in accordance with these Articles.126.Expenses, including legal fees, incurred by a former director in defending any legal, administrative or investigative proceedings may be paid by theCompany in advance of the final disposition of such proceedings upon receipt of an undertaking by or on behalf of the former director to repay the amountif it shall ultimately be determined that the director is not entitled to be indemnified by the Company in accordance with these Articles.127.The indemnification and advancement of expenses provided by, or granted pursuant to, these Articles is not exclusive of any other rights to which theperson seeking indemnification of advancement of expenses may be entitled under any agreement, resolution of members, resolution of disinteresteddirectors or otherwise, both as to acting in the person’s official capacity and as to acting in another capacity while serving as a director of the Company.128.If a person to be indemnified has been successful in defence of any proceedings referred to above the person is entitled to be indemnified against allexpenses, including legal fees, and against all judgments, fines and amounts paid in settlement and reasonably incurred by the person in connection withthe proceedings.129.The Company may purchase and maintain insurance in relation to any person who is or was a director, an officer or a liquidator of the Company, or who atthe request of the Company is or was serving as a director, an officer or a liquidator of, or in any other capacity is or was acting for, another body corporateor a partnership, joint venture, trust or other enterprise, against any liability asserted against the person and incurred by the person in that capacity,whether or not the Company has or would have had the power to indemnify the person against the liability as provided in these Articles.SEAL130.The Company shall have a Seal and may have more than one Seal. References herein to the Seal shall be references to every Seal which shall have beenduly adopted by resolution of directors. The directors shall provide for the safe custody of the Seal and for an imprint thereof to be kept at the office of theregistered agent of the Company. Except as otherwise expressly provided herein, the Seal when affixed to any written instrument, shall be witnessed andattested to by the signature of a director or any other person so authorized from time to time by resolution of directors. Such authorization may be before orafter the Seal is affixed, may be general or specific and may refer to any number of sealings. The Directors may provide for a facsimile of the Seal and of thesignature of any director or authorized person which may be reproduced by printing or other means on any instrument and it shall have the same force andvalidity as if the Seal had been affixed to such instrument and the same had been signed as hereinbefore described.21DISTRIBUTIONS131.The directors of the Company may by resolution authorise a distribution by the Company at any time and of any amount and to any members they think fitif they are satisfied on reasonable grounds that immediately after the distribution;a.the value of the Company’s assets will exceed its liabilities, andb.the Company will be able to pay its debts as they fall due.132.A resolution of the directors passed under the preceding Article shall contain a statement that, in the opinion of the directors, immediately after thedistribution the value of the Company’s assets will exceed its liabilities, and the Company will be able to pay its debts as they fall due.133.If, after a distribution is authorised and before it is made, the directors cease to be satisfied on reasonable grounds that the Company will, immediately afterthe distribution satisfy the solvency test, any distribution made by the Company is deemed not to have been authorised.134.If, by virtue of the preceding Article, a distribution is deemed not to have been authorised, a director who;a.ceased, after authorisation but before the making of the distribution, to be satisfied on reasonable grounds for believing that the company wouldsatisfy the solvency test immediately after the distribution is made; andb.failed to take reasonable steps to prevent the distribution being made;is personally liable to the company to repay to the company so much of the distribution as is not able to be recovered from members.135.A distribution made to a member at a time when the company did not, immediately after the distribution, satisfy the solvency test may be recovered by thecompany from the member unless;a.the member received the distribution in good faith and without knowledge of the company’s failure to satisfy the solvency test;b.the member has altered his position in reliance on the validity of the distribution; andc.it would be unfair to require repayment in full or at all.DISTRIBUTIONS BY WAY OF DIVIDEND136.The Company may by a resolution of directors declare a distribution by way of dividend and pay such distribution in money, shares or other property. Inthe event that distributions by way of dividend are paid in specie the directors shall have responsibility for establishing and recording in the resolution ofdirectors authorizing the distribution by way of dividend, a fair and proper value for the assets to be so distributed.137.The directors may from time to time pay to the members such interim distributions by way of dividend as appear to the directors to be justified by theprofits of the Company.138.The directors may, before declaring any distribution by way of dividend, set aside out of the profits of the Company such sum as they think proper as areserve fund, and may invest the sum so set aside as a reserve fund upon such securities as they may select.139.Notice of any distribution by way of dividend that may have been declared shall be given to each member in the manner hereinafter mentioned and alldistributions by way of dividend unclaimed for 3 years after having been declared may be forfeited by resolution of directors for the benefit of theCompany.140.No distribution by way of dividend shall bear interest as against the Company and no distribution by way of dividend shall be paid on treasury shares orshares held by another company of which the Company holds, directly or indirectly, shares having more than 50 percent of the vote in electing directors.22141.A share issued as a distribution by way of dividend by the Company shall be treated for all purposes as having been issued for money equal to the valuedetermined by resolution of the directors. In the absence of fraud the decision of the directors as to the value of the share is conclusive unless a questionof law is involved.142.A division of the issued and outstanding shares of a class or series of shares into a larger number of shares of the same class or series having aproportionately smaller par value does not constitute a distribution by way of dividend of shares.ACCOUNTS AND AUDIT143.The Company may by resolution of members call for the directors to prepare periodically a profit and loss account and a balance sheet. The profit and lossaccount and balance sheet shall be drawn up so as to give respectively a true and fair view of the profit and loss of the Company for the financial periodand a true and fair view of the state of affairs of the Company as at the end of the financial period.144.The Company may by resolution of members call for the accounts to be examined by auditors.145.Subject to the rules of the Designated Stock Exchange, the first auditors shall be appointed by resolution of directors; subsequent auditors shall beappointed by the Audit Committee and shall hold office until the Audit Committee appoint another independent auditor.146.Subject to the rules of the Designated Stock Exchange, the remuneration of the auditors of the Company shall be fixed by the Audit Committee.147.The auditors shall examine each profit and loss account and balance sheet required to be served on every member of the Company or laid before a meetingof the members of the Company and shall state in a written report whether or nota.in their opinion the profit and loss account and balance sheet give a true and fair view respectively of the profit and loss for the period covered bythe accounts, and of the state of affairs of the Company at the end of that period; andb.all the information and explanations required by the auditors have been obtained.148.The report of the auditors shall be annexed to the accounts and shall be read at the meeting of members at which the accounts are laid before the Companyor shall be served on the members.149.Every auditor of the Company shall have a right of access at all times to the books of account and vouchers of the Company, and shall be entitled to requirefrom the directors and officers of the Company such information and explanations as he thinks necessary for the performance of the duties of the auditors.150.The auditors of the Company shall be entitled to receive notice of, and to attend any meetings of members of the Company at which the Company’s profitand loss account and balance sheet are to be presented.NOTICES151.Any notice, information or written statement to be given by the Company to members may be served in any way by which it can reasonably be expected toreach each member or by mail addressed to each member at the address shown in the share register.152.Any summons, notice, order, document, process, information or written statement to be served on the Company may be served by leaving it, or by sendingit by registered mail addressed to the Company, at its registered office, or by leaving it with, or by sending it by registered mail to, the registered agent ofthe Company.153.Service of any summons, notice, order, document, process, information or written statement to be served on the Company may be proved by showing thatthe summons, notice, order, document, process, information or written statement was delivered to the registered office or the registered agent of theCompany or that it was mailed in such time as to admit to its being delivered to the registered office or the registered agent of the Company in the normalcourse of delivery within the period prescribed for service and was correctly addressed and the postage was prepaid.23PENSION AND SUPERANNUATION FUNDS154.The directors may establish and maintain or procure the establishment and maintenance of any noncontributory or contributory pension orsuperannuation funds for the benefit of, and give or procure the giving of donations, gratuities, pensions, allowances or emoluments to, any persons whoare or were at any time in the employment or service of the Company or any company which is a subsidiary of the Company or is allied to or associated withthe Company or with any such subsidiary, or who are or were at any time directors or officers of the Company or of any such other company as aforesaid orwho hold or held any salaried employment or office in the Company or such other company, or any persons in whose welfare the Company or any suchother company as aforesaid is or has been at any time interested, and to the wives, widows, families and dependents of any such person, and may makepayments for or towards the insurance of any such persons as aforesaid, and may do any of the matters aforesaid either alone or in conjunction with anysuch other company as aforesaid. Subject always to the proposal being approved by resolution of members, a director holding any such employment oroffice shall be entitled to participate in and retain for his own benefit any such donation, gratuity, pension allowance or emolument.VOLUNTARY WINDING UP AND DISSOLUTION155.The Company may voluntarily commence to wind up and dissolve by a resolution of members but if the Company has never issued shares it mayvoluntarily commence to wind up and dissolve by resolution of directors.CONTINUATION156.The Company may by resolution of members or by a resolution passed unanimously by all directors of the Company continue as a company incorporatedunder the laws of a jurisdiction outside the British Virgin Islands in the manner provided under those laws.ARBITRATION157.Whenever any difference arises between the Company on the one hand and any of the members or their executors, administrators or assigns on the otherhand, touching the true intent and construction or the incidence or consequences of these Articles or of the Act, touching anything done or executed,omitted or suffered in pursuance of the Act or touching any breach or alleged breach or otherwise relating to the premises or to these Articles, or to anyAct or Ordinance affecting the Company or to any of the affairs of the Company such difference shall, unless the parties agree to refer the same to a singlearbitrator, be referred to 2 arbitrators one to be chosen by each of the parties to the difference and the arbitrators shall before entering on the referenceappoint an umpire.158.If either party to the reference makes default in appointing an arbitrator either originally or by way of substitution (in the event that an appointed arbitratorshall die, be incapable of acting or refuse to act) for 10 days after the other party has given him notice to appoint the same, such other party may appoint anarbitrator to act in the place of the arbitrator of the defaulting party.We, Portcullis TrustNet (BVI) Limited of Portcullis TrustNet Chambers, P.O. Box 3444, Road Town, Tortola, British Virgin Islands for the purpose of incorporating aBVI Business Company under the laws of the British Virgin Islands hereby sign these Articles of Association the 27th day of October, 2009.Incorporator/s/ Nicole WheatleyPortcullis TrustNet (BVI) LimitedPortcullis TrustNet ChambersP.O. Box 3444Road Town, TortolaBritish Virgin Islands(Sgd. Nicole Wheatley)24EX4.15 3 f20f2017ex415_luokung.htm EXCLUSIVE BUSINESS COOPERATION AGREEMENT BY AND BETWEEN ZHONGCHUAN TIANXIA INFORMATIONTECHNOLOGY (SHENZHEN) CO., LTD., AND BEIJING MOBILE VISION TECHNOLOGY CO., LTD., DATED AUGUST 31, 2015Exhibit 4.15独家业务合作协议Exclusive Business Cooperation Agreement本独家业务合作协议（下称“本协议”）由以下双方于年月日在中华人民共和国（下称“中国”）北京市签署。This Exclusive Business Cooperation Agreement (this “Agreement”) is made and entered into by and between the following parties on in Beijing, thePeople’s Republic of China (“China” or the “PRC”).甲方：中传天下信息科技（深圳）有限公司Party A: Zhongchuan Tianxia Information Technology (Shenzhen) Co., Ltd.地址：深圳市南山区高新中三道2号深圳软件园一期五栋401A Address: 401A, Building 5, Phase 1, Shenzhen Software Park, No.2 Gaoxin Zhongsan Road, Nanshan District, Shenzhen统一社会信用代码：91440300565701058R Uniform Social Credit Code: 91440300565701058R乙方：北京中传视讯科技有限公司Party B: Beijing Mobile Vision Technology Co., Ltd.地址：北京市朝阳区光华路9号SOHO3QLAB32Address: LAB32, SOHO3Q, No 9, Guanghua Road, Chaoyang District, Beijing统一社会信用代码：9111010576215249XMUniform Social Credit Code: 9111010576215249XM甲方和乙方以下各称为“一方”，统称为“双方”。Each of Party A and Party B shall be hereinafter referred to as a “Party” respectively, and as “Parties” collectively.1秘密文件Strictly Confidential鉴于：Whereas,1.甲方是一家在中国注册的外商独资企业，拥有丰富的技术研发和产业化推广相关的管理和投资经验，并提供相关的技术支持和咨询服务；Party A is a whollyforeignowned enterprise established in China, which has rich experience in technology research development and industrializationpromotion management and investment, and provides relevant technical support and consulting services;2.乙方是一家在中国成立的有限责任公司，经中国有关政府部门批准依法主要从事手机视频技术开发、内容制作及市场推广；Party B is a limited company in China, mainly engages in mobile video technology research, development, content creation, sale and related industrialpromotion as approved by the relevant governmental authorities in China;3.甲方同意利用其技术、人员和信息优势，在本协议期间向乙方提供有关手机视频技术开发、内容制作及市场推广以及未来扩大业务规模和业务范围时乙方所需的技术支持、技术咨询等相关服务，乙方同意接受甲方或其指定方按本协议条款的规定提供的各种服务。Party A is willing to provide Party B with technology supports and technology consulting services in connection with mobile video technology research,development, content creation, sale and related industrial promotion and such services in connection with Party B’s extension of business scale orbroadening of businesses during the term of this Agreement, utilizing its advantages in technology, human resources, and information, and Party B iswilling to accept such services provided by Party A or Party A's designee(s), each on the terms set forth herein.2秘密文件Strictly Confidential据此，甲方和乙方经协商一致，达成如下协议：Now, therefore, through mutual discussion, the Parties have reached the following agreements:1.服务提供Services Provided by Party A1.1按照本协议条款和条件，乙方在此委任甲方在本协议期间作为乙方的独家服务提供者向乙方提供全面的和手机视频技术开发、内容制作及市场推广相关以及未来扩大业务规模和业务范围时乙方所需的技术支持、业务支持和相关咨询服务，具体内容包括但不限于以下内容：Party B hereby appoints Party A as Party B's exclusive services provider to provide Party B with complete technical support, business supportand related consulting services in connection with mobile video technology research, development, content creation, sale and related industrialpromotion and such services in connection with Party B’s extension of business scale or broadening of businesses during the term of thisAgreement, in accordance with the terms and conditions of this Agreement, which may include but not limited to:1.1.1为乙方提供其手机视频技术开发、内容制作及市场推广业务所需的一切服务支持，为乙方提供相当于包括总经理、行政人员、管理人员、筹划部门、商业运营、人力资源、财务、会计以及与乙方业务相关的一切业务操作所需人员所能提供的服务内容；managing all aspects of Party B’s business of mobile video technology research, development, content creation, sale and relatedindustrial promotion. In this capacity, Party A will procure or engage for Party B the services of a general manager and other managementstaff, including but not limited to personnel responsible for all administration, operations, planning, business development, humanresources, finance, accounting and other operations related to the Business of Party B;3秘密文件Strictly Confidential1.1.2为乙方制定全部的商业计划、销售目标，并为优化执行该等商业计划设计和建立相应的系统及操作程序；developing all business plans and sales projections of Party B, and for developing and establishing systems and procedures for optimumexecution of the business plans;1.1.3为乙方申请手机视频技术及内容制作相关专利提供咨询服务和支持；consulting services and support in connection with Party B’s applying for mobile video technology related patents and content creation;1.1.4为乙方手机视频技术产业化的发展方向、规模、品牌提升提供咨询服务；consulting services in connection with the development directions, size and business brands promotion of Party B’s mobile videotechnology industrialization;4秘密文件Strictly Confidential1.1.5为乙方提供与业务相关的办公、生产和销售服务，为乙方租赁场所，建立业务相关的系统和程序，满足乙方的其他要求；procuring or obtaining for Party B all office, production and distribution services related to the Business. It shall procure or obtainappropriate leases, establish systems and procedures needed to operate the business, fulfill orders for services;1.1.6尽最大努力为乙方建立手机视频技术销售市场，根据甲方为乙方制定的商业计划及销售目标代表乙方获取客户订单，同时为乙方提供与业务相关的客户服务，建立向客户开具票据的程序和与会计相关的托收服务。using its best efforts to establish mobile video technology related marketing and other structures to obtain orders for services &products from customers on behalf of Party B in accordance with Party B’s business plans, sales projections and objectives (asdeveloped by Party A) and procure or obtain customer services required in connection with the Business. It shall also establishprocedures for invoicing customers, and establish collection services with respect to accounts;1.1.7就乙方的劳动用工方面提供咨询服务和支持，包括但不限于，组织实施对乙方业务人员、行政人员、管理人员等人员进行培训和考核，协助建立健全的人力资源管理制度和实现人力资源的良好配置；consulting services and support regarding labor system of Party B, including but without limitation to labor training and evaluation ofsales person, administrative staff and management person etc. and establishment of human resources management system to well;5秘密文件Strictly Confidential1.1.8提供乙方需要的客户数据统计、分析及相关数据库的建设和维护等咨询服务；providing Party B with compile and analysis of client data and consulting services of establishment and maintenance of data base;1.1.9提供乙方需要的软件和相关技术支持服务；providing software Party B requires and other technical support;1.1.10接受乙方委托，对乙方的手机视频技术研发和产业化推广业务经营进行指导和管理；guiding and management on Party B’s business of mobile video technology research and development and related industrial promotionoperation according to Party B’s commission;1.1.11当乙方业务规模发展或业务范围扩大需要时，购买乙方业务经营需要的设备；in the event of the demand of Party B’s development of business scale or broadening of businesses, purchase the equipments which itneeds for the operation of its business;1.1.12当乙方业务规模发展或业务范围扩大需要时，完成乙方项目中的全部或部分工作；in the event of the demand of Party B’s development of business scale or broadening of businesses, complete the work of Party B’sproject in whole or in party;6秘密文件Strictly Confidential1.1.13当乙方业务规模发展或业务范围扩大需要时，开发新技术；in the event of the demand of Party B’s development of business scale or broadening of businesses, develop new technology;1.1.14乙方委托甲方，且甲方接受委托提供的其他服务。other services Party B appoints Party A to provide and Party A agrees to provide.1.2乙方接受甲方的咨询和服务。乙方进一步同意，除非经甲方事先书面同意，在本协议期间，就本协议约定的服务或其他事宜，乙方不得直接或间接地从任何第三方获得任何与本协议相同或类似的咨询和/或服务，并不得与任何第三方就本协议所述事项建立任何类似的合作关系。双方同意，甲方可以指定其他方（该被指定方可以与乙方签署本协议第1.3条描述的某些协议）为乙方提供本协议约定的服务和/或支持。Party B agrees to accept all the consultations and services provided by Party A. Party B further agrees that unless with Party A's prior writtenconsent, during the term of this Agreement, Party B shall not directly or indirectly accept the same or any similar consultations and/or servicesprovided by any third party and shall not establish similar corporation relationship with any third party regarding the matters contemplated by thisAgreement. Party A may appoint other parties, who may enter into certain agreements described in Section 1.3 with Party B, to provide Party Bwith the consultations and/or services under this Agreement.7秘密文件Strictly Confidential1.3服务的提供方式Service Providing Methodology1.3.1双方同意在本协议有效期内，视情况而定，乙方可以与甲方或甲方指定的其他方进一步签订技术服务协议和/或咨询服务协议，对各项业务培训、技术服务、咨询服务的具体内容、方式、人员、收费等进行约定。Parties agree that during the term of this Agreement, where necessary, Party B may enter into further technical service agreements and/orconsulting service agreements with Party A or any other party designated by Party A, which shall provide the specific contents, manner,personnel, and fees for the specific technical services and consulting services.1.3.2为更好地履行本协议，双方同意，在甲方认为必要时，乙方应在本协议有效期内与甲方或甲方指定的其他方根据业务进展需要随时签署协议，由甲方或其指定方向乙方提供服务。To fulfill this Agreement, Parties agree that during the term of this Agreement, where Party A deems necessary, Party B shall enter intoagreements with Party A or any other party designated by Party A which shall set forth that Party A or any other party designated byParty A provide services to Party B based on the needs of the business of Party B.8秘密文件Strictly Confidential2.服务的价格和支付方式The Calculation and Payment of the Service Fees双方同意，就甲方提供的服务，乙方应向甲方支付服务费（“服务费”）。服务费不应低于乙方税后利润的80%。服务费应当按季支付；经甲方事先书面同意，服务费可以根据乙方的经营需要进行调整。Both Parties agree that, in consideration of the services provided by Party A, Party B shall pay Party A fees (the “Service Fees”), which shall not be lessthan 80% of Party B’s aftertax profits . The Service Fees shall be due and payable on a quarterly basis; upon the prior written consent by Party A, the rateof Service Fees may be adjusted pursuant to the operational needs of Party B.3.知识产权和保密条款Intellectual Property Rights and Confidentiality Clauses3.1在中国法律允许的范围内，甲方对履行本协议而产生或创造的任何权利、所有权、权益和所有知识产权包括但不限于著作权、专利权、专利申请权、软件、技术秘密、商业机密及其他均享有独占的和排他的权利和利益。乙方须签署所有适当的文件，采取所有适当的行动，递交所有的文件和/或申请，提供所有适当的协助，以及做出所有其他依据甲方的自行决定认为是必要的行为，以将任何对该等知识产权的所有权、权利和权益赋予甲方，和/或完善对甲方此等知识产权权利的保护。To the extent permitted under the PRC laws, Party A shall have exclusive and proprietary rights and interests in all rights, ownership, interests andintellectual properties arising out of or created during the performance of this Agreement, including but not limited to copyrights, patents, patentapplications, software, technical secrets, trade secrets and others. Party B shall execute all appropriate documents, take all appropriate actions,submit all filings and/or applications, render all appropriate assistance and otherwise conduct whatever is necessary deemed as by Party A in itssole discretion for the purposes of vesting any ownership, right or interest of any such intellectual property rights in Party A, and/or perfectingthe protections for any such intellectual property rights in Party A.9秘密文件Strictly Confidential3.2双方承认及确定有关本协议、本协议内容，以及彼此就准备或履行本协议而交换的任何口头或书面资料均被视为保密信息。双方应当对所有该等保密信息予以保密，而在未得到另一方书面同意前，不得向任何第三者披露任何保密信息，惟下列信息除外：(a)公众人士知悉或将会知悉的任何信息（惟并非由接受保密信息之一方擅自向公众披露）；(b)根据适用法律法规、股票交易规则、或政府部门或法院的命令而所需披露之任何信息；或(c)由任何一方就本协议所述交易而需向其股东、投资者、法律或财务顾问披露之信息，而该股东、法律或财务顾问亦需遵守与本条款相类似之保密责任。如任何一方工作人员或聘请机构的泄密均视为该方的泄密，需依本协议承担违约责任。无论本协议以任何理由终止，本条款仍然生效。The Parties acknowledge that the existence and the terms of this Agreement and any oral or written information exchanged between the Parties inconnection with the preparation and performance this Agreement are regarded as confidential information. Each Party shall maintainconfidentiality of all such confidential information, and without obtaining the written consent of the other Party, it shall not disclose any relevantconfidential information to any third parties, except for the information that: (a) is or will be in the public domain (other than through the receivingParty’s unauthorized disclosure); (b) is under the obligation to be disclosed pursuant to the applicable laws or regulations, rules of any stockexchange, or orders of the court or other government authorities; or (c) is required to be disclosed by any Party to its shareholders, investors,legal counsels or financial advisors regarding the transaction contemplated hereunder, provided that such shareholders, investors, legal counselsor financial advisors shall be bound by the confidentiality obligations similar to those set forth in this Section. Disclosure of any confidentialinformation by the staff members or agencies hired by any Party shall be deemed disclosure of such confidential information by such Party, whichParty shall be held liable for breach of this Agreement. This Section shall survive the termination of this Agreement for any reason.3.3双方同意，不论本协议是否变更、解除或终止，本条款将持续有效。The Parties agree that this Section shall survive changes to, and rescission or termination of, this Agreement.4.陈述和保证Representations and Warranties4.1甲方陈述和保证如下：Party A hereby represents and warrants as follows:4.1.1甲方是按照中国法律合法注册并有效存续的外商独资企业。Party A is a whollyforeignowned enterprise legally registered and validly existing in accordance with the laws of China.10秘密文件Strictly Confidential4.1.2甲方已采取必要的公司行为，获得必要的授权，并取得第三方和政府部门的同意及批准（若需）以签署和履行本协议；甲方对本协议的签署和履行并不违反法律法规的明确规定。Party A has taken all necessary corporate actions, obtained all necessary authorization and the consent and approval from third partiesand government agencies (if any) for the execution and performance of this Agreement. Party A’s execution and performance of thisAgreement do not violate any explicit requirements under any law or regulation binding on Party A.4.1.3本协议构成对其合法、有效、有约束力并依本协议之条款对其强制执行的义务。This Agreement constitutes Party A's legal, valid and binding obligations, enforceable in accordance with its terms.4.2乙方陈述和保证如下：Party B hereby represents and warrants as follows:4.2.1乙方是按照中国法律合法登记且有效存续的有限责任公司，乙方根据政府部门的批准和许可从事手机视频技术开发、内容制作和产业化市场推广的经营。Party B is a limited company legally registered and validly existing in accordance with the laws of China, engages in mobile videotechnology research, development, content creation, sale and related industrial promotion pursuant to governmental approvals andpermits;11秘密文件Strictly Confidential4.2.2乙方已采取必要的行为，获得必要的授权，并取得第三方和政府部门的同意及批准（若需）以签署和履行本协议；乙方对本协议的签署和履行并不违反法律法规的明确规定。Party B has taken all necessary actions, obtained all necessary authorization and the consent and approval from third parties andgovernment agencies (if any) for the execution and performance of this Agreement. Party B’s execution and performance of thisAgreement do not violate any explicit requirements under any law or regulation binding on Party B.4.2.3本协议构成对其合法、有效、有约束力并依本协议之条款对其强制执行的义务。This Agreement constitutes Party B's legal, valid and binding obligations, and shall be enforceable against it.5.生效和有效期Effectiveness and Term5.1本协议于文首标明的协议日期签署并同时生效。除非依本协议或双方其他协议的约定而提前终止，本协议有效期为20年，但甲、乙双方应自本协议签署后，每3个月对本协议的内容做一次审查，以决定是否需要根据当时的情况对本协议作出相应修改和补充。This Agreement is executed on the date first above written and shall take effect as of such date. Unless earlier terminated in accordance with theprovisions of this Agreement or relevant agreements separately executed between the Parties, the term of this Agreement shall be 20 years. Afterthe execution of this Agreement, both Parties shall review this Agreement every 3 months to determine whether to amend or supplement theprovisions in this Agreement based on the actual circumstances at that time.12秘密文件Strictly Confidential5.2协议期满前，经甲方书面确认，本协议可以延期。延期的期限由甲方决定，乙方必须无条件地同意该延期。The term of this Agreement may be extended if confirmed in writing by Party A prior to the expiration thereof. The extended term shall bedetermined by Party A, and Party B shall accept such extended term unconditionally.6.终止Termination6.1除非依据本协议续期，本协议于到期之日终止。Unless renewed in accordance with the relevant terms of this Agreement, this Agreement shall be terminated upon the date of expiration hereof.6.2本协议有效期内，除非甲方对乙方有重大过失或存在欺诈行为，乙方不得提前终止本协议。尽管如此，甲方可在任何时候通过提前30天向乙方发出书面通知的方式终止本协议。During the term of this Agreement, unless Party A commits gross negligence, or a fraudulent act, against Party B, Party B shall not terminate thisAgreement prior to its expiration date. Nevertheless, Party A shall have the right to terminate this Agreement upon giving 30 days' prior writtennotice to Party B at any time.6.3在本协议终止之后，双方在第3、7和8条项下的权利和义务将继续有效。The rights and obligations of the Parties under Articles 3, 7 and 8 shall survive the termination of this Agreement.13秘密文件Strictly Confidential7.适用法律和争议解决Governing Law and Resolution of Disputes7.1本协议的订立、效力、解释、履行、修改和终止以及争议的解决适用中国的法律。The execution, effectiveness, construction, performance, amendment and termination of this Agreement and the resolution of disputes hereundershall be governed by the laws of China.7.2因解释和履行本协议而发生的任何争议，本协议双方应首先通过友好协商的方式加以解决。如果在一方向其他方发出要求协商解决的书面通知后30天之内争议仍然得不到解决，则任何一方均可将有关争议提交给中国国际经济贸易仲裁委员会，由该会按照其仲裁规则仲裁解决。仲裁应在北京进行，使用之语言为中文。仲裁裁决是终局性的，对各方均有约束力。In the event of any dispute with respect to the construction and performance of this Agreement, the Parties shall first resolve the dispute throughfriendly negotiations. In the event the Parties fail to reach an agreement on the dispute within 30 days after either Party's request to the otherParties for resolution of the dispute through negotiations, either Party may submit the relevant dispute to the China International Economic andTrade Arbitration Commission for arbitration, in accordance with its Arbitration Rules. The arbitration shall be conducted in Beijing, and thelanguage used in arbitration shall be Chinese. The arbitration award shall be final and binding on all Parties.14秘密文件Strictly Confidential7.3因解释和履行本协议而发生任何争议或任何争议正在进行仲裁时，除争议的事项外，本协议双方仍应继续行使各自在本协议项下的其他权利并履行各自在本协议项下的其他义务。Upon the occurrence of any disputes arising from the construction and performance of this Agreement or during the pending arbitration of anydispute, except for the matters under dispute, the Parties to this Agreement shall continue to exercise their respective rights under this Agreementand perform their respective obligations under this Agreement.8.补偿Indemnification就甲方根据本协议向乙方提供的咨询和服务内容所产生或引起的针对甲方的诉讼、请求或其他要求而招致的任何损失、损害、责任或费用都应由乙方补偿给甲方，以使甲方不受损害，除非该损失、损害、责任或费用是因甲方的重大过失或故意而产生的。Party B shall indemnify and hold harmless Party A from any losses, injuries, obligations or expenses caused by any lawsuit, claims or other demandsagainst Party A arising from or caused by the consultations and services provided by Party A to Party B pursuant this Agreement, except where suchlosses, injuries, obligations or expenses arise from the gross negligence or willful misconduct of Party A.15秘密文件Strictly Confidential9.通知Notices9.1本协议项下要求或发出的所有通知和其他通信应通过专人递送、挂号邮寄、邮资预付或快递服务或传真的方式发到该方下列地址。每一通知还应再以电子邮件送达。该等通知视为有效送达的日期按如下方式确定：All notices and other communications required or permitted to be given pursuant to this Agreement shall be delivered personally or sent byregistered mail, postage prepaid, by a courier service or by facsimile transmission to the address of such Party set forth below. A confirmationcopy of each notice shall also be sent by email. The dates on which notices shall be deemed to have been effectively given shall be determined asfollows:9.1.1通知如果是以专人递送、快递服务或挂号邮寄、邮资预付发出的，则以于设定为通知的地址在接收或拒收之日为有效送达日。Notices given by personal delivery, by courier service or by registered mail, postage prepaid, shall be deemed effectively given on thedate of receipt or refusal at the address specified for notices.9.1.2通知如果是以传真发出的，则以成功传送之日为有效送达日（应以自动生成的传送确认信息为证）。Notices given by facsimile transmission shall be deemed effectively given on the date of successful transmission (as evidenced by anautomatically generated confirmation of transmission).16秘密文件Strictly Confidential9.2为通知的目的，双方地址如下：For the purpose of notices, the addresses of the Parties are as follows:甲方：中传天下信息科技（深圳）有限公司Party A: Zhongchuan Tianxia Information Technology (Shenzhen) Co., Ltd.地址：深圳市南山区高新中三道2号深圳软件园一期五栋401AAddress:401A, Building 5, Phase 1, Shenzhen Software Park, No.2 Gaoxin Zhongsan Road, Nanshan District, Shenzhen收件人：洪婷Attn: Hong Ting乙方：北京中传视讯科技有限公司Party B: Beijing Mobile Vision Technology Co., Ltd地址：北京市朝阳区光华路9号SOHO3QLAB32Address: LAB32, SOHO3Q, No 9, Guanghua Road, Chaoyang District, Beijing.收件人：宋雪松Attn.: Song Xuesong9.3任何一方可按本条规定随时给另一方发出通知来改变其接收通知的地址。Any Party may at any time change its address for notices by a notice delivered to the other Party in accordance with the terms hereof.17秘密文件Strictly Confidential10.协议的转让Assignment10.1乙方不得将其在本协议项下的权利与义务转让给第三方，除非事先征得甲方的书面同意。Without Party A's prior written consent, Party B shall not assign its rights and obligations under this Agreement to any third party.10.2乙方在此同意，甲方可以在其需要时向其他第三方转让其在本协议项下的权利和义务，并在该等转让发生时甲方仅需向乙方发出书面通知，并且无需再就该等转让征得乙方的同意。Party B agrees that Party A may assign its obligations and rights under this Agreement to any third party upon a prior written notice to Party Bbut without the consent of Party B.11.协议的分割性Severability如果本协议有任何一条或多条规定根据任何法律或法规在任何方面被裁定为无效、不合法或不可执行，本协议其余规定的有效性、合法性或可执行性不应因此在任何方面受到影响或损害。双方应通过诚意磋商，争取以法律许可以及双方期望的最大限度内有效的规定取代那些无效、不合法或不可执行的规定，而该等有效的规定所产生的经济效果应尽可能与那些无效、不合法或不能强制执行的规定所产生的经济效果相似。In the event that one or several of the provisions of this Agreement are found to be invalid, illegal or unenforceable in any aspect in accordance with anylaws or regulations, the validity, legality or enforceability of the remaining provisions of this Agreement shall not be affected or compromised in any aspect.The Parties shall strive in good faith to replace such invalid, illegal or unenforceable provisions with effective provisions that accomplish to the greatestextent permitted by law and the intentions of the Parties, and the economic effect of such effective provisions shall be as close as possible to the economiceffect of those invalid, illegal or unenforceable provisions.18秘密文件Strictly Confidential12.协议的修改、补充Amendments and Supplements双方可以书面协议方式对本协议作出修改和补充。经过双方签署的有关本协议的修改协议和补充协议是本协议组成部分，具有与本协议同等的法律效力。Any amendments and supplements to this Agreement shall be in writing. The amendment agreements and supplementary agreements that have beensigned by the Parties and that relate to this Agreement shall be an integral part of this Agreement and shall have the same legal validity as this Agreement.13.语言和副本Language and Counterparts本协议以中文和英文书就，一式二份，甲乙双方各持一份，具有同等效力；中英文版本如有冲突，应以中文版为准。This Agreement is written in both Chinese and English language in two copies, each Party having one copy with equal legal validity; in case there is anyconflict between the Chinese version and the English version, the Chinese version shall prevail.本页其余部分刻意留为空白The Remainder of this page is intentionally left blank19秘密文件Strictly Confidential有鉴于此，双方已使得经其授权的代表于文首所述日期签署了本独家业务合作协议并即生效，以昭信守。IN WITNESS WHEREOF, the Parties have caused their authorized representatives to execute this Exclusive Business Cooperation Agreement as of thedate first above written.甲方：中传天下信息科技（深圳）有限公司（盖章）Party A: Zhongchuan Tianxia Information Technology (Shenzhen) Co., Ltd.(Seal)签字：By: /s/ Hong Ting 姓名：洪婷Name: Hong Ting职务：总经理Title: General Manager20秘密文件Strictly Confidential有鉴于此，双方已使得经其授权的代表于文首所述日期签署了本独家业务合作协议并即生效，以昭信守。IN WITNESS WHEREOF, the Parties have caused their authorized representatives to execute this Exclusive Business Cooperation Agreement as of thedate first above written. 乙方：北京中传视讯科技有限公司（盖章）Party B: Beijing Mobile Vision Technology Co., Ltd. (Seal)签字：By: /s/ Song Xuesong 姓名：宋雪松Name: Song Xuesong职务：董事长Title: Chairman of the Board21秘密文件Strictly ConfidentialEX4.16 4 f20f2017ex416_luokung.htm EXCLUSIVE OPTION AGREEMENT BY AND AMONG ZHONGCHUAN TIANXIA INFORMATION TECHNOLOGY(SHENZHEN) CO., LTD., XUESONG SONG, WEILI CHEN, PING WANG, DONGLAI LIU, AND BEIJING MOBILE VISION TECHNOLOGY CO., LTD., DATEDAUGUST 31, 2015Exhibit 4.16独家购买权协议Exclusive Option Agreement本独家购买权协议 (下称“本协议”) 由以下各方于年月日在中华人民共和国（下称“中国”）北京签订：This Exclusive Option Agreement (this “Agreement”) is executed by and among the Parties below as of in Beijing, the People’s Republic of China (the“China” or “PRC”):甲方：中传天下信息科技（深圳）有限公司，一家依照中国法律设立和存在的外商独资企业，地址为深圳市南山区高新中三道2号深圳软件园一期五栋401A；Party A:Zhongchuan Tianxia Information Technology (Shenzhen) Co., Ltd., a whollyforeignowned enterprise organized and existing under the laws of China,with its address at 401A, Building 5, Phase 1, Shenzhen Software Park, No.2 Gaoxin Zhongsan Road, Nanshan District, Shenzhen.乙方：Party B:a)宋雪松Song Xuesong身份证号码:120112196809040417ID Card No.:120112196809040417住所：天津市河西区广东路中裕园33702Address:Zhongyu Yuan 33702, Guangdong Road, Hexi District, Tianjinb)陈蔚力Chen Weili身份证号码:120106197309240516ID Card No.:120106197309240516住所：广东省深圳市宝安区宝城上川路15号Address:Baocheng Shangchuan Road 15, Baoan District, Shenzhen, Guangdong1秘密文件Strictly Confidentialc)王平Wang Ping身份证号码:35020319691030401xID Card No.:35020319691030401x住所：广东省深圳市南山区高新南环路36号彩虹之岸12栋4AAddress:Caihong Zhi’an Building No.12 Suite 4A, Gaoxin Nanhuan Road 36, Nanshan District, Shenzhen, Guangdongd)刘东来Liu Donglai身份证号码:120107196810103912ID Card No.:120107196810103912住所：天津市和平区南京路诚基经贸中心1号楼2门1702号Address:No 1702, Door 2, Build 1, Chengji Economic and Trade Centre, Nanjing Road, Heping District, Tianjin.丙方：北京中传视讯科技有限公司，一家依照中国法律设立和存在的有限责任公司，地址为北京市朝阳区光华路9号SOHO3QLAB32，统一社会信用代码为9111010576215249XM；Party C:Beijing Mobile Vision Technology Co., Ltd., a limited company duly registered in China, with its address at LAB32, SOHO3Q, No 9, Guanghua Road,Chaoyang District, Beijing and its uniform social credit code of 9111010576215249XM.2秘密文件Strictly Confidential在本协议中，甲方、乙方和丙方以下各称“一方”，合称“各方”。In this Agreement, each of Party A, Party B and Party C shall be referred to as a “Party” respectively, and they shall be collectively referred to as the“Parties”.鉴于，乙方系丙方股东并合计持有丙方100%股权，乙方将按本协议之条款授予甲方购买全部或部分该股权的权利。Whereas, Party B are the shareholders of Party C and jointly hold 100% of the equity interest in Party C, and Party B are willing to grant to Party A the rightto acquire such equity interest, in whole or in part, on the terms herein.现各方协商一致，达成如下协议：Now therefore, upon mutual discussion and negotiation, the Parties have reached the following agreement:1.股权买卖Sale and Purchase of Equity Interest1.1授予权利Option Granted乙方在此不可撤销地授予甲方在中国法律允许的前提下，按照甲方自行决定的行使步骤，并按照本协议第1.3条所述的价格，随时一次或多次从乙方购买或指定一人或多人(“被指定人”)从乙方购买其目前和将来所持有的丙方的全部或部分股权（无论乙方出资额和/或持股比例将来是否发生变化）的一项不可撤销的专有权(“股权购买权”)。除甲方和被指定人外，任何第三人均不得享有股权购买权或其他与乙方股权有关的权利。丙方特此同意乙方向甲方授予股权购买权。本款及本协议所规定的“人”指个人、公司、合营企业、合伙、企业、信托或非公司组织。Party B hereby irrevocably grant Party A an irrevocable and exclusive right to purchase, or designate one or more persons (each, a “Designee”) topurchase the equity interests in Party C now and in the future held by Party B (regardless whether Party B’s capital contribution amount and/orpercentage of shareholding will be changed in the future) once or at multiple times at any time in part or in whole at Party A’s sole and absolutediscretion to the extent permitted by Chinese laws and at the price described in Section 1.3 herein (such right being the “Equity Interest PurchaseOption”). Except for Party A and the Designee(s), no other person shall be entitled to the Equity Interest Purchase Option or other rights withrespect to the equity interests of Party B. Party C hereby agrees to the grant by Party B of the Equity Interest Purchase Option to Party A. Theterm “person” as used herein shall refer to individuals, corporations, partnerships, partners, enterprises, trusts or noncorporate organizations.3秘密文件Strictly Confidential1.2行使步骤Steps for Exercise of Equity Interest Purchase Option甲方行使其股权购买权以符合中国法律和法规的规定为前提。甲方行使股权购买权时，应向乙方发出书面通知(“股权购买通知”)，股权购买通知应载明以下事项：(a)甲方关于行使股权购买权的决定；(b)甲方拟从乙方购买的股权份额(“被购买的股权”)；和(c)被购买的股权的买入日期。Subject to the provisions of the laws and regulations of China, Party A may exercise the Equity Interest Purchase Option by issuing a writtennotice to Party B (the “Equity Interest Purchase Option Notice”), specifying: (a) Party A’s decision to exercise the Equity Interest PurchaseOption; (b) the portion of equity interests to be purchased from Party B (the “Optioned Interests”); and (c) the date for purchasing the OptionedInterests.1.3股权买价Equity Interest Purchase Price被购买的股权的买价（“股权买价”）应是行权当时中国法律允许的最低价格。乙方收到该股权对价后，应当提供给丙方与该股权买价相同金额的借款，该借款的期限为20年，且为无息。乙方应当在该借款期限届满时就该借款放弃对丙方的债权。The purchase price of the Optioned Interests (the “Equity Interest Purchase Price”) shall be the lowest price permitted by the laws of China. Afterreceiving the Equity Interest Purchase Price, Party B shall make an interestfree loan equivalent to the amount of Equity Interest Purchase Price toParty C, of which term is 20 years. Each member of Party B shall give up his(her) creditor’s right when the loan term expires.4秘密文件Strictly Confidential1.4转让被购买股权Transfer of Optioned Interests甲方每次行使股权购买权时：For each exercise of the Equity Interest Purchase Option:1.4.1乙方应责成丙方及时召开股东会会议，在该会议上，应通过批准乙方向甲方和/或被指定人转让被购买的股权的决议；Party B shall cause Party C to promptly convene a shareholders meeting, at which a resolution shall be adopted approving Party B’stransfer of the Optioned Interests to Party A and/or the Designee(s);1.4.2乙方应就其向甲方和/或被指定人转让被购买股权取得丙方其他股东同意该转让并放弃优先购买权的书面声明。Party B shall obtain written statements from the other shareholder of Party C giving consent to the transfer of the equity interest to PartyA and/or the Designee(s) and waiving any right of first refusal related thereto.1.4.3乙方应与甲方和/或(在适用的情况下)被指定人按照本协议及股权购买通知的规定，为每次转让签订股权转让协议；Party B shall execute a share transfer contract with respect to each transfer with Party A and/or each Designee (whichever is applicable),in accordance with the provisions of this Agreement and the Equity Interest Purchase Option Notice regarding the Optioned Interests;5秘密文件Strictly Confidential1.4.4有关方应签署所有其他所需协议、协议或文件，取得全部所需的政府批准和同意，并采取所有所需行动，在不附带任何担保权益的情况下，将被购买的股权的有效所有权转移给甲方和/或被指定人并使甲方和/或被指定人成为被购买的股权的登记在册所有人。为本款及本协议的目的，“担保权益”包括担保、抵押、第三方权利或权益，任何购股权、收购权、优先购买权、抵销权、所有权扣留或其他担保安排等；但为了明确起见，不包括在本协议、乙方股权质押协议项下产生的任何担保权益。本款及本协议所规定的“乙方股权质押协议”指甲方、乙方和丙方于本协议签署之日签订的股权质押协议，根据股权质押协议，乙方为担保丙方能履行丙方与甲方签订的独家业务合作协议项下的义务，而向甲方质押其在丙方的全部乙方股权。The relevant Parties shall execute all other necessary contracts, agreements or documents, obtain all necessary government licenses andpermits and take all necessary actions to transfer valid ownership of the Optioned Interests to Party A and/or the Designee(s),unencumbered by any security interests, and cause Party A and/or the Designee(s) to become the registered owner(s) of the OptionedInterests. For the purpose of this Section and this Agreement, “security interests” shall include securities, mortgages, third party’s rightsor interests, any stock options, acquisition right, right of first refusal, right to offset, ownership retention or other security arrangements,but shall be deemed to exclude any security interest created by this Agreement and Party B’s Equity Interest Pledge Agreement. “PartyB’s Equity Interest Pledge Agreement” as used in this Section and this Agreement shall refer to the Equity Interest Pledge Agreementexecuted by and among Party A, Party B and Party C on the date of this Agreement, whereby Party B pledge all of their equity interests inParty C to Party A, in order to guarantee Party C’s performance of its obligations under the Exclusive Business Corporation Agreementexecuted by and between Party C and Party A.6秘密文件Strictly Confidential2.知识产权独家购买权Exclusive Option regarding the Intellectual Property Rights2.1本协议签订之日起，若乙方拟转让、出售或以其他方式处置（任一处置方式以下简称“转让”）其拥有或持有的全部或部分知识产权（以下称“知识产权”，定义见第2.4条），甲方有权独家购买该等知识产权。From the date hereof, if Party B proposes to transfer, sell or dispose of (each, a “transfer”) all or any part of the intellectual property rights ownedor held by Party B (“IPR”), Party A shall have exclusive option.2.2若乙方有意转让全部或部分知识产权，应事先向甲方发出书面通知(“转让通知”)，转让通知应载明以下事项：(a) 乙方关于转让知识产权的意向；(b) 乙方拟转让的知识产权清单(“拟转让知识产权”)及转让的价格和其他条件。转让通知视为乙方向甲方发出的一份要约，按照该要约，乙方同意按转让通知中指定的价格条件向甲方转让全部或部分拟转让知识产权。Prior to Party B proposes to transfer all or any part of its IPR, Party B shall give Party A a written notice (“Transfer Notice”), which shall specify (a)Party B’s intention to make the transfer; (b) the list of IPR to be transferred (“Offered IPR”) and the consideration and other conditions uponwhich the transfer is to be made. The Transfer Notice constitutes Party B’s offer given to Party A, pursuant to which, Party B agrees to transfer allor any part of its Offered IPR to Party A based on the same conditions described in the Transfer Notice.7秘密文件Strictly Confidential2.3甲方收到转让通知后，有权在30日内选择按照转让通知中列明的转让价格和条件购买拟转让知识产权。如果甲方行使其独家购买权，双方应于甲方收到转让通知后45日内签订有关的知识产权转让协议，乙方应办理法律规定的知识产权转让的批准和登记手续。Party A shall have an option for a period of 30 days from Party A’s receipt of the Transfer Notice to elect to purchase the Offered IPR at the sameprice and subject to the same conditions as described in the Transfer Notice. If Party A decides to exercise its exclusive option, the parties shallenter into relevant IPR transfer agreement within 45 days upon Party A’s receipt of the Transfer Notice and Party B is responsible to complete allrelated approvals and registrations formalities as prescribed by the PRC law.2.4本协议第2条所称“知识产权”指任何知识产权，包括但不限于著作权、专利权、专利申请权、商标、域名、软件、专有技术，并包括前述知识产权申请权利以及登记注册的权利，以及其他所有与前述知识产权有关的权利和权益。The “IPR” referred to in this Article 2 means any intellectual property rights, including, without limitations, copyrights, patents, patentapplications, trademarks, domain names, software and knowhow together with (a) all rights to apply for or register any of the foregoing and (b) allother rights and interests to any of the foregoing.8秘密文件Strictly Confidential3.承诺Covenants3.1有关丙方的承诺Covenants regarding Party C乙方（作为丙方的股东）和丙方在此承诺：Party B (as the shareholders of Party C) and Party C hereby covenant as follows:3.1.1未经甲方的事先书面同意，不以任何形式补充、更改或修改丙方公司章程文件，增加或减少其注册资本，或以其他方式改变其注册资本结构；Without the prior written consent of Party A, they shall not in any manner supplement, change or amend the articles of association andbylaws of Party C, increase or decrease its registered capital, or change its structure of registered capital in other manners;3.1.2按照良好的财务和商业标准及惯例，保持其公司的存续，审慎地及有效地经营其业务和处理事务；They shall maintain Party C’s corporate existence in accordance with good financial and business standards and practices by prudentlyand effectively operating its business and handling its affairs;3.1.3未经甲方的事先书面同意，不在本协议签署之日起的任何时间出售、转让、抵押或以其他方式处置丙方的任何资产、业务或收入的合法或受益权益，或允许在其上设置任何其他担保权益；Without the prior written consent of Party A, they shall not at any time following the date hereof, sell, transfer, mortgage or dispose of inany manner any assets of Party C or legal or beneficial interest in the business or revenues of Party C, or allow the encumbrance thereonof any security interest;3.1.4未经甲方的事先书面同意，不发生、继承、保证或容许存在任何债务，但(i)正常或日常业务过程中产生而不是通过借款方式产生的债务；和(ii)已向甲方披露和得到甲方书面同意的债务除外；Without the prior written consent of Party A, they shall not incur, inherit, guarantee or suffer the existence of any debt, except for (i)debts incurred in the ordinary course of business other than through loans; and (ii) debts disclosed to Party A for which Party A’swritten consent has been obtained;9秘密文件Strictly Confidential3.1.5一直在正常业务过程中经营所有业务，以保持丙方的资产价值，不进行任何足以影响其经营状况和资产价值的作为/不作为；They shall always operate all of Party C’s businesses during the ordinary course of business to maintain the asset value of Party C andrefrain from any action/omission that may affect Party C’s operating status and asset value;3.1.6未经甲方的事先书面同意，不得让丙方签订任何重大协议，但在正常业务过程中签订的协议除外(就本段而言，如果一份协议的价值超过【人民币10万元】，即被视为重大协议)；Without the prior written consent of Party A, they shall not cause Party C to execute any major contract, except the contracts in theordinary course of business (for purpose of this subsection, a contract with a value exceeding RMB 100,000 shall be deemed a majorcontract);3.1.7未经甲方的事先书面同意，丙方不得向任何人提供贷款或信贷；Without the prior written consent of Party A, they shall not cause Party C to provide any person with any loan or credit;3.1.8应甲方要求，向其提供所有关于丙方的营运和财务状况的资料；They shall provide Party A with information on Party C’s business operations and financial condition at Party A’s request;10秘密文件Strictly Confidential3.1.9如甲方提出要求，丙方应从甲方接受的保险公司处购买和持有有关其资产和业务的保险，该保险的金额和险种应与经营类似业务的公司一致；If requested by Party A, they shall procure and maintain insurance in respect of Party C’s assets and business from an insurance carrieracceptable to Party A, at an amount and type of coverage typical for companies that operate similar businesses;3.1.10未经甲方的事先书面同意，丙方不得与任何人合并或联合，或对任何人进行收购或投资；Without the prior written consent of Party A, they shall not cause or permit Party C to merge, consolidate with, acquire or invest in anyperson;3.1.11将发生的或可能发生的与丙方资产、业务或收入有关的诉讼、仲裁或行政程序立即通知甲方；They shall immediately notify Party A of the occurrence or possible occurrence of any litigation, arbitration or administrative proceedingsrelating to Party C’s assets, business or revenue;3.1.12为保持丙方对其全部资产的所有权，签署所有必要或适当的文件，采取所有必要或适当的行动和提出所有必要或适当的控告或对所有索偿进行必要和适当的抗辩；To maintain the ownership by Party C of all of its assets, they shall execute all necessary or appropriate documents, take all necessary orappropriate actions and file all necessary or appropriate complaints or raise necessary and appropriate defenses against all claims;11秘密文件Strictly Confidential3.1.13未经甲方事先书面同意，不得以任何形式派发股息予各股东，但一经甲方要求，丙方应立即将其所有可分配利润全部立即分配给其各股东；及Without the prior written consent of Party A, they shall ensure that Party C shall not in any manner distribute dividends to itsshareholders, provided that upon Party A’s written request, Party C shall immediately distribute all distributable profits to itsshareholders; and3.1.14根据甲方的要求，委任由其指定的任何人士出任丙方的董事和/或执行董事。At the request of Party A, they shall appoint any persons designated by Party A as the director and/or executive director of Party C.3.2乙方和丙方的承诺Covenants of Party B and Party C乙方承诺：Party B hereby covenant as follows:3.2.1未经甲方的事先书面同意，不出售、转让、抵押或以其他方式处置其拥有的丙方的股权的合法或受益权益，或允许在其上设置任何其他担保权益，但根据乙方签署的《股权质押协议》在该股权上设置的质押则除外；Without the prior written consent of Party A, Party B shall not sell, transfer, mortgage or dispose of in any other manner any legal orbeneficial interest in the equity interests in Party C held by Party B, or allow the encumbrance thereon of any security interest, except forthe pledge placed on these equity interests in accordance with Party B’s Equity Interest Pledge Agreement;12秘密文件Strictly Confidential3.2.2促使丙方股东会和/或执行董事不批准在未经甲方的事先书面同意的情况下，出售、转让、抵押或以其他方式处置任何乙方持有之丙方的股权的合法权益或受益权，或允许在其上设置任何其他担保权益，但批准根据乙方签署的《股权质押协议》在乙方股权上设置的质押则除外；Party B shall cause the shareholders’ meeting and/or the executive director of Party C not to approve the sale, transfer, mortgage ordisposition in any other manner of any legal or beneficial interest in the equity interests in Party C held by Party B, or allow theencumbrance thereon of any security interest, without the prior written consent of Party A, except for the pledge placed on these equityinterests in accordance with Party B’s Equity Interest Pledge Agreement;3.2.3未经甲方的事先书面同意的情况下，对于丙方与任何人合并或联合，或对任何人进行收购或投资，乙方将促成丙方股东会或执行董事不予批准；Party B shall cause the shareholders’ meeting or the executive director of Party C not to approve the merger or consolidation with anyperson, or the acquisition of or investment in any person, without the prior written consent of Party A;3.2.4将发生的或可能发生的任何关于其所拥有的股权的诉讼、仲裁或行政程序立即通知甲方；Party B shall immediately notify Party A of the occurrence or possible occurrence of any litigation, arbitration or administrativeproceedings relating to the equity interests in Party C held by Party B;13秘密文件Strictly Confidential3.2.5促使丙方股东会或执行董事表决赞成本协议规定的被购买的股权的转让并应甲方之要求采取其他任何行动；Party B shall cause the shareholders’ meeting or the executive director of Party C to vote their approval of the transfer of the OptionedInterests as set forth in this Agreement and to take any and all other actions that may be requested by Party A;3.2.6为保持其对股权的所有权，签署所有必要或适当的文件，采取所有必要或适当的行动和提出所有必要或适当的控告或对所有索偿进行必要和适当的抗辩；To the extent necessary to maintain Party B’s ownership in Party C, Party B shall execute all necessary or appropriate documents, take allnecessary or appropriate actions and file all necessary or appropriate complaints or raise necessary and appropriate defenses against allclaims;3.2.7应甲方的要求，委任由其指定的任何人士出任丙方的董事和/或执行董事；Party B shall appoint any designee of Party A as the director and/or executive director of Party C, at the request of Party A;3.2.8经甲方随时要求，应向其指定的代表在任何时间无条件地根据本协议的股权购买权立即转让其股权，并放弃其对其他现有股东进行上述股权转让所享有的优先购买权（如有的话）；和At the request of Party A at any time, Party B shall promptly and unconditionally transfer its equity interests in Party C to Party A’sDesignee(s) in accordance with the Equity Interest Purchase Option under this Agreement, and Party B hereby waives its right of firstrefusal (if any) to the share transfer by the other existing shareholder of Party C (if any); and14秘密文件Strictly Confidential3.2.9严格遵守本协议及各方共同或分别签订的其他协议的各项规定，切实履行该等协议项下的各项义务，并不进行任何足以影响该等协议的有效性和可执行性的作为/不作为。如果乙方对于本协议项下或乙方股权质押协议下或对甲方的授权委托书中的股权，还留存有任何权利，除非甲方书面指示，否则乙方仍不得行使该权利。Party B shall strictly abide by the provisions of this Agreement and other contracts jointly or separately executed by and among Party B,Party C and Party A, perform the obligations hereunder and thereunder, and refrain from any action/omission that may affect theeffectiveness and enforceability thereof. To the extent that Party B has any remaining rights with respect to the equity interests subject tothis Agreement hereunder or under Party B’s Equity Interest Pledge Agreement or under the Power of Attorney granted in favor of PartyA, Party B shall not exercise such rights except in accordance with the written instructions of Party A.4.陈述和保证Representations and Warranties乙方和丙方特此在本协议签署之日和每一个转让日向甲方共同及分别陈述和保证如下：Party B and Party C hereby represent and warrant to Party A, jointly and severally, as of the date of this Agreement and each date of transfer of theOptioned Interests, that:4.1其具有签订和交付本协议和其为一方的、根据本协议为每一次转让被购买的股权而签订的任何股权转让协议(各称为"转让协议")，并履行其在本协议和任何转让协议项下的义务的权力和能力。乙方和丙方同意在甲方行使购买权时，他们将签署与本协议条款一致的转让协议。本协议和其是一方的各转让协议一旦签署后，构成或将对其构成合法、有效及具有约束力的义务并可按照其条款对其强制执行；They have the authority to execute and deliver this Agreement and any share transfer contracts to which they are a party concerning theOptioned Interests to be transferred thereunder (each, a “Transfer Contracts”), and to perform their obligations under this Agreement and anyTransfer Contracts. Party B and Party C agree to enter into Transfer Contracts consistent with the terms of this Agreement upon Party A’s exerciseof the Equity Interest Purchase Option. This Agreement and the Transfer Contracts to which they are a party constitute or will constitute theirlegal, valid and binding obligations and shall be enforceable against them in accordance with the provisions thereof;15秘密文件Strictly Confidential4.2无论是本协议或任何转让协议的签署和交付还是其在本协议或任何转让协议项下的义务的履行均不会：(i)导致违反任何有关的中国法律；(ii)与丙方章程或其他组织文件相抵触；(iii)导致违反其是一方或对其有约束力的任何协议或文件，或构成其是一方或对其有约束力的任何协议或文件项下的违约；(iv)导致违反有关向任何一方颁发的任何许可或批准的授予和(或)继续有效的任何条件；或(v)导致向任何一方颁发的任何许可或批准中止或被撤销或附加条件；The execution and delivery of this Agreement or any Transfer Contracts and the obligations under this Agreement or any Transfer Contracts shallnot: (i) cause any violation of any applicable laws of China; (ii) be inconsistent with the articles of association, bylaws or other organizationaldocuments of Party C; (iii) cause the violation of any contracts or instruments to which they are a party or which are binding on them, orconstitute any breach under any contracts or instruments to which they are a party or which are binding on them; (iv) cause any violation of anycondition for the grant and/or continued effectiveness of any licenses or permits issued to either of them; or (v) cause the suspension orrevocation of or imposition of additional conditions to any licenses or permits issued to either of them;4.3乙方对其在丙方拥有的股权拥有良好和可出售的所有权，除乙方签署的《股权质押协议》外，乙方在上述股权上没有设置任何担保权益；Party B have a good and merchantable title to the equity interests in Party C they hold. Except for Party B’s Equity Interest Pledge Agreement,Party B have not placed any security interest on such equity interests;16秘密文件Strictly Confidential4.4目前没有悬而未决的或构成威胁的与丙方的股权、丙方资产有关的或与丙方有关的诉讼、仲裁或行政程序。There are no pending or threatened litigation, arbitration or administrative proceedings relating to the equity interests in Party C, assets of Party Cor Party C.5.生效日Effective Date5.1本协议于各方签署本协议之日生效，有效期10年，经甲方选择可再延长10年。This Agreement shall become effective upon the date hereof, and remain effective for a term of 10 years, and may be renewed for an additional 10years at Party A’s election.5.2若丙方股东发生变化，由新股东签署此协议，在此协议签署之日，原协议自动视为无效。In the event of a change in the shareholders of Party C, the new shareholder should sign this agreement and the original agreement willautomatically be deemed invalid on the date of signing of this agreement.17秘密文件Strictly Confidential6.适用法律与争议解决Governing Law and Resolution of Disputes6.1适用法律Governing law本协议的订立、效力、解释、履行、修改和终止以及争议解决均适用中国正式公布并可公开得到的法律。对中国正式公布并可公开得到的法律没有规定的事项，将适用国际法律原则和惯例。The execution, effectiveness, construction, performance, amendment and termination of this Agreement and the resolution of disputes hereundershall be governed by the formally published and publicly available laws of China. Matters not covered by formally published and publiclyavailable laws of China shall be governed by international legal principles and practices.6.2争议的解决方法Methods of Resolution of Disputes因解释和履行本协议而发生的任何争议，本协议各方应首先通过友好协商的方式加以解决。如果在一方向其他方发出要求协商解决的书面通知后30天之内争议仍然得不到解决，则任何一方均可将有关争议提交给中国国际经济贸易仲裁委员会，由该会按照其届时有效的仲裁规则仲裁解决。仲裁应在北京进行，使用之语言为中文。仲裁裁决是终局性的，对各方均有约束力。In the event of any dispute with respect to the construction and performance of this Agreement, the Parties shall first resolve the dispute throughfriendly negotiations. In the event the Parties fail to reach an agreement on the dispute within 30 days after either Party’s request to the otherParties for resolution of the dispute through negotiations, either Party may submit the relevant dispute to the China International Economic andTrade Arbitration Commission for arbitration, in accordance with its then effective arbitration rules. The arbitration shall be conducted in Beijing,and the language used in arbitration shall be Chinese. The arbitration award shall be final and binding on all Parties.18秘密文件Strictly Confidential7.税款、费用Taxes and Fees每一方应承担根据中国法律因准备和签署本协议和各转让协议以及完成本协议和各转让协议拟定的交易而由该方发生的或对其征收的任何和全部的转让和注册的税、花费和费用。Each Party shall pay any and all transfer and registration tax, expenses and fees incurred thereby or levied thereon in accordance with the laws of China inconnection with the preparation and execution of this Agreement and the Transfer Contracts, as well as the consummation of the transactionscontemplated under this Agreement and the Transfer Contracts.8.通知Notices8.1本协议项下要求或发出的所有通知和其他通信应通过专人递送、挂号邮寄、邮资预付或商业快递服务或传真的方式发到该方下列地址。每一通知还应再以电子邮件送达。该等通知视为有效送达的日期按如下方式确定：All notices and other communications required or permitted to be given pursuant to this Agreement shall be delivered personally or sent byregistered mail, postage prepaid, by a commercial courier service or by facsimile transmission to the address of such Party set forth below. Aconfirmation copy of each notice shall also be sent by email. The dates on which notices shall be deemed to have been effectively given shall bedetermined as follows:8.1.1通知如果是以专人递送、快递服务或挂号邮寄、邮资预付发出的，则以于设定为通知的地址在接收或拒收之日为有效送达日。Notices given by personal delivery, by courier service or by registered mail, postage prepaid, shall be deemed effectively given on thedate of receipt or refusal at the address specified for notices.19秘密文件Strictly Confidential8.1.2通知如果是以传真发出的，则以成功传送之日为有效送达日（应以自动生成的传送确认信息为证）。Notices given by facsimile transmission shall be deemed effectively given on the date of successful transmission (as evidenced by anautomatically generated confirmation of transmission).8.2为通知的目的，各方地址如下：For the purpose of notices, the addresses of the Parties are as follows:甲方：中传天下信息科技（深圳）有限公司Party A:Zhongchuan Tianxia Information Technology (Shenzhen) Co., Ltd.地址：深圳市南山区高新中三道2号深圳软件园一期五栋401AAddress:401A, Building 5, Phase 1, Shenzhen Software Park, No.2 Gaoxin Zhongsan Road, Nanshan District, Shenzhen.收件人：洪婷Attn:Hong Ting乙方：Party B: 宋雪松Song Xuesong住所：天津市河西区广东路中裕园33702Address:Zhongyu Yuan 33702, Guangdong Road, Hexi District, Tianjin20秘密文件Strictly Confidential陈蔚力Chen Weili住所：广东省深圳市宝安区宝城上川路15号Address:Baocheng Shangchuan Road 15, Baoan District, Shenzhen, Guangdong王平Wang Ping住所：广东省深圳市南山区高新南环路36号彩虹之岸12栋4AAddress:Caihong Zhi’an Building No.12 Suite 4A, Gaoxin Nanhuan Road 36, Nanshan District, Shenzhen, Guangdong刘东来Liu Donglai住所：天津市和平区南京路诚基经贸中心1号楼2门1702号Address:No 1702, Door 2, Build 1, Chengji Economic and Trade Centre, Nanjing Road, Heping District, Tianjin.丙方：北京中传视讯科技有限公司Party C:Beijing Mobile Vision Technology Co., Ltd.地址：北京市朝阳区光华路9号SOHO3QLAB32Address: LAB32, SOHO3Q, No 9, Guanghua Road, Chaoyang District, Beijing .收件人：宋雪松Attn: Song Xuesong8.3任何一方可按本条规定随时给其他方发出通知来改变其接收通知的地址。Any Party may at any time change its address for notices by a notice delivered to the other Parties in accordance with the terms hereof.21秘密文件Strictly Confidential9.保密责任Confidentiality各方承认及确定彼此就有关本协议而交换的任何口头或书面资料均属机密资料。各方应当对所有该等资料予以保密，而在未得其他方书面同意前，不得向任何第三者披露任何有关资料，惟下列情况除外：(a)公众人士知悉或将会知悉该等资料(并非由接受资料之一方擅自向公众披露)；(b)适用法律法规或股票交易的规则或规例所需披露之资料；或(c)由任何一方就本协议所述交易而需向其法律或财务顾问披露之资料而该法律或财务顾问亦需遵守与本条款相类似之保密责任。如任何一方工作人员或聘请机构的泄密均视为该方的泄密，需依本协议承担违约责任。无论本协议以任何理由终止，本条款仍然生效。The Parties acknowledge that any oral or written information exchanged among them with respect to this Agreement is confidential information. Each Partyshall maintain the confidentiality of all such information, and without obtaining the written consent of other Parties, it shall not disclose any relevantinformation to any third parties, except in the following circumstances: (a) such information is or will be in the public domain (provided that this is not theresult of a public disclosure by the receiving party); (b) information disclosed as required by applicable laws or rules or regulations of any stock exchange;or (c) information required to be disclosed by any Party to its legal counsel or financial advisor regarding the transaction contemplated hereunder, and suchlegal counsel or financial advisor are also bound by confidentiality duties similar to the duties in this section. Disclosure of any confidential information bythe staff members or agency hired by any Party shall be deemed disclosure of such confidential information by such Party, which Party shall be held liablefor breach of this Agreement. This Section shall survive the termination of this Agreement for any reason.22秘密文件Strictly Confidential10.进一步保证Further Warranties各方同意迅速签署为执行本协议的各项规定和目的而合理需要的或对其有利的文件，以及为执行本协议的各项规定和目的而采取合理需要的或对其有利的进一步行动。The Parties agree to promptly execute documents that are reasonably required for or are conducive to the implementation of the provisions and purposes ofthis Agreement and take further actions that are reasonably required for or are conducive to the implementation of the provisions and purposes of thisAgreement.11.其他Miscellaneous11.1修订、修改与补充Amendment, change and supplement对本协议作出修订、修改与补充，必须经每一方签署书面协议。Any amendment, change and supplement to this Agreement shall require the execution of a written agreement by all of the Parties.11.2完整协议Entire agreement除了在本协议签署后所作出的书面修订、补充或修改以外，本协议构成本协议各方就本协议标的物所达成的完整协议，取代在此之前就本协议标的物所达成的所有口头或书面的协商、陈述和协议。 Except for the amendments, supplements or changes in writing executed after theexecution of this Agreement, this Agreement shall constitute the entire agreement reached by and among the Parties hereto with respect to thesubject matter hereof, and shall supercede all prior oral and written consultations, representations and contracts reached with respect to thesubject matter of this Agreement.23秘密文件Strictly Confidential11.3标题Headings本协议的标题仅为方便阅读而设，不应被用来解释、说明或在其他方面影响本协议各项规定的含义。The headings of this Agreement are for convenience only, and shall not be used to interpret, explain or otherwise affect the meanings of theprovisions of this Agreement.11.4语言Language本协议以中文和英文书就，一式八份，乙方共计六名股东以及甲方、丙方各持一份，具有同等效力；中英文版本如有冲突，应以中文版为准。This Agreement is written in both Chinese and English language in eight copies, the 6 shareholders of Party B, Party A and Party C having onecopy with equal legal validity respectively; in case there is any conflict between the Chinese version and the English version, the Chinese versionshall prevail.11.5可分割性Severability如果本协议有任何一条或多条规定根据任何法律或法规在任何方面被裁定为无效、不合法或不可执行，本协议其余规定的有效性、合法性或可执行性不应因此在任何方面受到影响或损害。各方应通过诚意磋商，争取以法律许可以及各方期望的最大限度内有效的规定取代那些无效、不合法或不可执行的规定，而该等有效的规定所产生的经济效果应尽可能与那些无效、不合法或不能强制执行的规定所产生的经济效果相似。In the event that one or several of the provisions of this Agreement are found to be invalid, illegal or unenforceable in any aspect in accordancewith any laws or regulations, the validity, legality or enforceability of the remaining provisions of this Agreement shall not be affected orcompromised in any respect. The Parties shall strive in good faith to replace such invalid, illegal or unenforceable provisions with effectiveprovisions that accomplish to the greatest extent permitted by law and the intentions of the Parties, and the economic effect of such effectiveprovisions shall be as close as possible to the economic effect of those invalid, illegal or unenforceable provisions.24秘密文件Strictly Confidential11.6继任者Successors本协议对各方各自的继任者和各方所允许的受让方应具有约束力并对其有利。This Agreement shall be binding on and shall inure to the interest of the respective successors of the Parties and the permitted assigns of suchParties.11.7继续有效Survival11.7.1协议期满或提前终止前因本协议而发生的或到期的任何义务在本协议期满或提前终止后继续有效。Any obligations that occur or that are due as a result of this Agreement upon the expiration or early termination of this Agreement shallsurvive the expiration or early termination thereof.11.7.2本协议第5、6、9条和本第11.7条的规定在本协议终止后继续有效。The provisions of Articles 5, 6, 9 and this Section 11.7 shall survive the termination of this Agreement.25秘密文件Strictly Confidential11.8弃权Waivers任何一方可以对本协议的条款和条件作出弃权，但必须经书面作出并经各方签字。一方在某种情况下就其他方的违约所作的弃权不应被视为该方在其他情况下就类似的违约已经对其他方作出弃权。Any Party may waive the terms and conditions of this Agreement, provided that such a waiver must be provided in writing and shall require thesignatures of the Parties. No waiver by any Party in certain circumstances with respect to a breach by other Parties shall operate as a waiver bysuch a Party with respect to any similar breach in other circumstances.本页其余部分刻意留为空白The Remainder of this page is intentionally left blank26秘密文件Strictly Confidential有鉴于此，各方已自行或使得其各自授权代表于文首所载日期签署本独家购买权协议。IN WITNESS WHEREOF, the Parties have executed, or caused their respective duly authorized representatives to execute, this Exclusive Option Agreement as ofthe date first above written.甲方：中传天下信息科技（深圳）有限公司（盖章）Party A: Zhongchuan Tianxia Information Technology (Shenzhen) Co., Ltd. (Seal)签字：By:/s/ Hong Ting姓名：洪婷Name: Hong Ting职务：总经理Title: General Manager秘密文件 Strictly Confidential有鉴于此，各方已自行或使得其各自授权代表于文首所载日期签署本独家购买权协议。IN WITNESS WHEREOF, the Parties have executed, or caused their respective duly authorized representatives to execute, this Exclusive Option Agreement as ofthe date first above written.乙方：Party B:宋雪松Song Xuesong签字：By:/s/ Song Xuesong秘密文件 Strictly Confidential有鉴于此，各方已自行或使得其各自授权代表于文首所载日期签署本独家购买权协议。IN WITNESS WHEREOF, the Parties have executed, or caused their respective duly authorized representatives to execute, this Exclusive Option Agreement as ofthe date first above written.乙方：Party B:陈蔚力Chen Weili签字：By:/s/ Chen Weili秘密文件 Strictly Confidential有鉴于此，各方已自行或使得其各自授权代表于文首所载日期签署本独家购买权协议。IN WITNESS WHEREOF, the Parties have executed, or caused their respective duly authorized representatives to execute, this Exclusive Option Agreement as ofthe date first above written.乙方：Party B:王平Wang Ping签字：By:/s/ Wang Ping秘密文件 Strictly Confidential有鉴于此，各方已自行或使得其各自授权代表于文首所载日期签署本独家购买权协议。IN WITNESS WHEREOF, the Parties have executed, or caused their respective duly authorized representatives to execute, this Exclusive Option Agreement as ofthe date first above written.乙方：Party B:刘东来Liu Donglai签字：By:/s/ Liu Donglai秘密文件 Strictly Confidential有鉴于此，各方已自行或使得其各自授权代表于文首所载日期签署本独家购买权协议。IN WITNESS WHEREOF, the Parties have executed, or caused their respective duly authorized representatives to execute, this Exclusive Option Agreement as ofthe date first above written.丙方：北京中传视讯科技有限公司（盖章）Party B: Beijing Mobile Vision Technology Co., Ltd. (Seal)签字：By:/s/ Song Xuesong姓名：宋雪松Name:Song Xuesong职务：董事长Title:Chairman of the Board秘密文件 Strictly ConfidentialEX4.17 5 f20f2017ex417_luokung.htm EQUITY INTEREST PLEDGE AGREEMENT BY AND AMONG ZHONGCHUAN TIANXIA INFORMATION TECHNOLOGY(SHENZHEN) CO., LTD., XUESONG SONG, WEILI CHEN, PING WANG, DONGLAI LIU, AND BEIJING MOBILE VISION TECHNOLOGY CO., LTD., DATEDAUGUST 31, 2015Exhibit 4.17股权质押协议Equity Interest Pledge Agreement本股权质押协议（下称"本协议”）由下列各方于年月日在中华人民共和国（下称“中国”）北京签订：This Equity Interest Pledge Agreement (this "Agreement") has been executed by and among the following parties on in Beijing, the People’sRepublic of China (the “China” or “PRC”):甲方：中传天下信息科技（深圳）有限公司（下称“质权人”）Party A: Zhongchuan Tianxia Information Technology (Beijing) Co., Ltd. (“Pledgee”)地址：深圳市南山区高新中三道2号深圳软件园一期五栋401AAddress: 401A, Building 5, Phase 1, Shenzhen Software Park, No.2 Gaoxin Zhongsan Road, Nanshan District, Shenzhen统一社会信用代码： 91440300565701058RUniform Social Credit Code: 91440300565701058R乙方(下称“出质人”)：Party B ( “Pledgors”):a)宋雪松Song Xuesong身份证号码:ID Card No.:b)陈蔚力Chen Weili身份证号码:ID Card No.:1秘密文件 Strictly Confidentialc)王平Wang Ping身份证号码:ID Card No.:d)刘东来Liu Donglai身份证号码:ID Card No.:丙方：北京中传视讯科技有限公司Party C: Beijing Mobile Vision Technology Co., Ltd.地址：北京市朝阳区光华路9号SOHO3QLAB32Address: LAB32, SOHO3Q, No 9, Guanghua Road, Chaoyang District, Beijing统一社会信用代码：9111010576215249XMUniform Social Credit Code: 9111010576215249XM在本协议中，质权人、出质人和丙方以下各称“一方”，合称“各方”。In this Agreement, each of Pledgee, Pledgors and Party C shall be referred to as a "Party" respectively, and they shall be collectively referred to as the"Parties".鉴于：Whereas:1．出质人全部为中国境内居民自然人，共同持有丙方100%的股权。丙方是一家在中国注册成立的、主要从事手机视频技术研发、内容制作和产业化市场推广的有限责任公司。丙方有意在此确认出质人和质权人在本协议下的权利和义务并提供必要的协助登记该质权；All of the Pledgors are natural persons resided in PRC, and collectively hold 100% of the equity interest in Party C. Party C is a limited company registered inChina, mainly engaging in mobile video frequency technology research, development, content creation, sale and related industrialization promotion. Party Cacknowledges the respective rights and obligations of Pledgors and Pledgee under this Agreement, and intends to provide any necessary assistance inregistering the Pledge;2．质权人是一家在中国注册的外商独资企业。质权人与丙方于年月日签订了独家业务合作协议；Pledgee is a whollyforeignowned enterprise registered in China. Pledgee and Party C have executed an Exclusive Business Cooperation Agreement as of [*],[*];3．为了保证丙方全面履行独家业务合作协议项下的义务，出质人以其拥有的全部丙方股权向质权人做出质押担保。To ensure that Party C fully performs its obligations under the Exclusive Business Cooperation Agreement, Pledgors hereby pledge to the Pledgee all of theequity interests they hold in Party C.为了履行业务合作协议的条款，各方商定按照以下条款签订本协议。To perform the provisions of the Business Cooperation Agreement, the Parties have mutually agreed to execute this Agreement upon the following terms.2秘密文件 Strictly Confidential1.定义Definitions除非本协议另有规定，下列词语含义为：Unless otherwise provided herein, the terms below shall have the following meanings:1.1质权：指出质人根据本协议第2条给予质权人的担保物权，即指质权人所享有的，以出质人质押给质权人的股权折价或拍卖、变卖该股权的价款优先受偿的权利。Pledge: shall refer to the security interest granted by Pledgors to Pledgee pursuant to Article 2 of this Agreement, i.e., the right of Pledgee to becompensated on a preferential basis with the conversion, auction or sales price of the Equity Interest.1.2股权：指出质人现在和将来（通过增资和/或转股）合法持有的其在丙方的全部股权权益。Equity Interest: shall refer to all of the equity interest in Party C lawfully, held now and to be held (through capital increase and/or equity transfer)hereafter by Pledgors.1.3质押期限：指本协议第3条规定的期间。Term of Pledge: shall refer to the term set forth in Article 3 of this Agreement.1.4业务合作协议：指丙方与质权人于本协议日签订的独家业务合作协议。Business Cooperation Agreement: shall refer to the Exclusive Business Cooperation Agreement executed by and between Party C and Pledgee on thedate of this Agreement.1.5违约事件：指本协议第7条所列任何情况。Event of Default: shall refer to any of the circumstances set forth in Article 7 of this Agreement.1.6违约通知：指质权人根据本协议发出的宣布违约事件的通知。Notice of Default: shall refer to the notice issued by Pledgee in accordance with this Agreement declaring an Event of Default.3秘密文件 Strictly Confidential2.质权The Pledge作为丙方按时和全额支付业务合作协议项下质权人应得的任何或全部的款项，包括但不限于业务合作协议中规定的咨询和服务费的担保（无论该等费用的到期应付是由于到期日的到来、提前收款的要求或其它原因），以及丙方充分履行其在业务合作协议项下其他所有义务（丙方按时和全额支付业务合作协议项下甲方应得的任何或全部的款项及丙方在业务合作协议项下其他所有义务，以下统称为“被担保债务”）的担保，出质人特此将其现有或将拥有的丙方的全部股权权益质押给质权人。As collateral security for the timely and complete payment and performance when due (whether at stated maturity, by acceleration or otherwise) of any or all ofthe payments due (the “all payments in pledge”) by Party C, including without limitation the consulting and services fees payable to the Pledgee under theBusiness Cooperation Agreement, Pledgors hereby pledge to Pledgee a first security interest in all of Pledgors’ right, title and interest, whether now owned orhereafter acquired by Pledgors, in the Equity Interest of Party C.3.质押期限Term of Pledge3.1本质权自本协议项下的股权出质在相应的工商行政管理机关登记之日起生效，质权有效期持续到业务合作协议下所有丙方欠付质权人的款项结清为止。出质人和丙方应（一）自本协议签署之日起3个工作日内，将本协议的质权登记在丙方股东名册上，并（二）自本协议签署之日起10个工作日内向相应的工商行政管理机关申请登记本协议项下的质权。各方共同确认，为办理股权质押工商登记手续，各方及丙方其他股东应按照丙方所在地工商行政管理部门要求的形式签署、真实反映本协议项下质权信息的《股权质押合同》（以下简称“工商登记质押合同”）提交给工商管理机关，工商登记质押合同中未约定事项，仍以本协议约定为准。出质人和丙方应当按照中国法律法规和有关工商行政管理机关的各项要求，提交所有必要的文件并办理所有必要手续，保证质权在递交申请后尽快获得登记。如果出质人持有的丙方注册资本数额增加（不管是通过直接认缴丙方的增资还是从其他股东处受让股权），各方一致同意将采取一切必要的行动和签署一切必要的文件以按照登记机关的要求完成质权的变更登记，以确保本协议项下的质权的持续有效。The Pledge shall become effective on such date when the pledge of the Equity Interest contemplated herein has been registered’ with relevantadministration for industry and commerce (the “AIC”). The Pledge shall be continuously valid until all payments due under the Business CooperationAgreement have been fulfilled by Party C. Pledgors and Party C shall (1) register the Pledge in the shareholders' register of Party C within 3 businessdays following the execution of this Agreement, and (2) submit an application to the AIC for the registration of the Pledge of the Equity Interestcontemplated herein within 10 business days following the execution of this Agreement. The parties covenant that for the purpose of registration of thePledge, the parties hereto and all other shareholders of Party C shall submit to the AIC the Equity Interest Pledge Contract in the form required by theAIC at the location of Party C which shall truly reflect the information of the Pledge hereunder (the “AIC Pledge Contract”). For matters not specified inthe AIC Pledge Contract, the parties shall be bound by the provisions of this Agreement. Pledgors and Party C shall submit all necessary documentsand complete all necessary procedures, as required by the PRC laws and regulations and the relevant AIC, to ensure that the Pledge of the EquityInterest shall be registered with the AIC as soon as possible after filing. In the event that the amount of registered capital held by Pledgors is increased(either by subscribing increased registered capital from Party C or acquiring equity interest from other shareholders), the Parties hereto agree that theyshall take any necessary action and execute any necessary document to complete the registration of change of Pledge according to the requirement ofAIC so that the Pledge in this Agreement remains effective.4秘密文件 Strictly Confidential3.2质押期限内，如丙方未按业务合作协议交付咨询服务费等费用，质权人有权但无义务按本协议的规定处分质权。During the Term of Pledge, in the event Party C fails to pay the exclusive consulting or service fees in accordance with the Business CooperationAgreement, Pledgee shall have the right, but not the obligation, to dispose of the Pledge in accordance with the provisions of this Agreement.4.质权凭证的保管Custody of Records for Equity Interest subject to Pledge4.1在本协议规定的质押期限内，出质人应将其在丙方的股权出资证明书及记载质权的股东名册交付质权人保管。出质人应在本协议签订之日起一周内将上述股权出资证明书及股东名册交付给质权人。质权人将在本协议规定的全部质押期间一直保管这些项目。During the Term of Pledge set forth in this Agreement, Pledgors shall deliver to Pledgee's custody the capital contribution certificate for the EquityInterest and the shareholders' register containing the Pledge within one week from the execution of this Agreement. Pledgee shall have custody of suchitems during the entire Term of Pledge set forth in this Agreement.4.2在质押期限内，股权所产生的红利应当无条件归质权人所有。Dividends generated by the Equity Interest shall be unconditionally owned by the Pledgee during the Term of Pledge.5秘密文件 Strictly Confidential5.出质人的声明和保证Representations and Warranties of Pledgors5.1出质人是股权唯一的合法所有人。Pledgors are the sole legal and beneficial owners of the Equity Interest.5.2质权人有权以本协议规定的方式处分并转让股权。Pledgee shall have the right to dispose of and transfer the Equity Interest in accordance with the provisions set forth in this Agreement.5.3除本质权之外，出质人未在股权上设置任何其他质押权利或其他担保权益。Except for the Pledge, Pledgors have not placed any security interest or other encumbrance on the Equity Interest.6.出质人的承诺和确认Covenants and Further Agreements of Pledgors6.1在本协议存续期间，所有出质人向质权人承诺，出质人将：All of the Pledgors hereby covenant to the Pledgee, that during the term of this Agreement, Pledgors shall:6.1.1除履行由出质人与质权人、丙方于本协议签署日签订的《独家购买权合同》外，未经质权人事先书面同意，不得转让股权，不得在股权上设立或允许存在任何担保或其他债务负担；not transfer the Equity Interest, place or permit the existence of any security interest or other encumbrance on the Equity Interest, without theprior written consent of Pledgee, except for the performance of the Exclusive Option Agreement executed by Pledgors, the Pledgee and Party Con the execution date of this Agreement;6秘密文件 Strictly Confidential6.1.2遵守并执行所有有关权利质押的法律、法规的规定，在收到有关主管机关就质权发出或制定的通知、指令或建议时，于五日内向质权人出示上述通知、指令或建议，同时遵守上述通知、指令或建议，或按照质权人的合理要求或经质权人同意就上述事宜提出反对意见和陈述；comply with the provisions of all laws and regulations applicable to the pledge of rights, and within 5 days of receipt of any notice, order orrecommendation issued or prepared by relevant competent authorities regarding the Pledge, shall present the aforementioned notice, order orrecommendation to Pledgee, and shall comply with the aforementioned notice, order or recommendation or submit objections andrepresentations with respect to the aforementioned matters upon Pledgee's reasonable request or upon consent of Pledgee;6.1.3将任何可能导致对出质人股权或其任何部分的权利产生影响的事件或收到的通知，以及可能改变出质人在本协议中的任何保证、义务或对出质人履行其在本协议中义务可能产生影响的任何事件或收到的通知及时通知质权人。promptly notify Pledgee of any event or notice received by Pledgors that may have an impact on Pledgee's rights to the Equity Interest or anyportion thereof, as well as any event or notice received by Pledgors that may have an impact on any guarantees and other obligations ofPledgors arising out of this Agreement.6.2出质人同意，质权人按本协议条款取得的对质权享有的权利，不应受到出质人或出质人的继承人或出质人之委托人或任何其他人通过法律程序的中断或妨害。Pledgors agree that the rights acquired by Pledgee in accordance with this Agreement with respect to the Pledge shall not be interrupted or harmed byPledgors or any heirs or representatives of Pledgors or any other persons through any legal proceedings.7秘密文件 Strictly Confidential6.3出质人向质权人保证，为保护或完善本协议对偿付业务合作协议项下被担保债务的担保，出质人将诚实签署、并促使其他与质权有利害关系的当事人签署质权人所要求的所有的权利证书、契约和/或履行并促使其他有利害关系的当事人履行质权人所要求的行为，并为本协议赋予质权人之权利、授权的行使提供便利，与质权人或其指定的人(自然人/法人)签署所有的有关股权所有权的文件，并在合理期间内向质权人提供其认为需要的所有的有关质权的通知、命令及决定。To protect or perfect the security interest granted by this Agreement for payment of all payment in pledge under the Business Cooperation Agreement,Pledgors hereby undertake to execute in good faith and to cause other parties who have an interest in the Pledge to execute all certificates, agreements,deeds and/or covenants required by Pledgee. Pledgors also undertake to perform and to cause other parties who have an interest in the Pledge toperform actions required by Pledgee, to facilitate the exercise by Pledgee of its rights and authority granted thereto by this Agreement, and to enter intoall relevant documents regarding ownership of Equity Interest with Pledgee or designee(s) of Pledgee (natural persons/legal persons). Pledgorsundertake to provide Pledgee within a reasonable time with all notices, orders and decisions regarding the Pledge that are required by Pledgee.6.4出质人向质权人保证，出质人将遵守、履行本协议项下所有的保证、承诺、协议、陈述及条件。如出质人不履行或不完全履行其保证、承诺、协议、陈述及条件，出质人应赔偿质权人由此遭受的一切损失。Pledgors hereby undertake to comply with and perform all guarantees, promises, agreements, representations and conditions under this Agreement. Inthe event of failure the whole or partial performance of its guarantees, promises, agreements, representations and conditions, Pledgors shall indemnifyPledgee for all losses resulting therefrom.8秘密文件 Strictly Confidential7.违约事件Event of Default7.1下列事项均被视为违约事件：The following circumstances shall be deemed Event of Default:7.1.1丙方未能按期、完整履行任何业务合作协议项下责任，包括但不限于丙方未能按期足额支付业务合作协议项下的应付的被担保债务或有违反该协议其他义务的行为；Party C fails to fully and timely fulfill any liabilities under the Business Cooperation Agreement, including without limitation failure to pay infull any of the all payment in pledge payable under the Business Cooperation Agreement or breaches any other obligations of Party Cthereunder;7.1.2出质人或丙方实质违反本协议的任何条款；Pledgors or Party C have committed a material breach of any provisions of this Agreement;7.1.3除本协议第6.1.1条的约定外，出质人舍弃出质的股权或未获得质权人书面同意而擅自转让或意图转让出质的股权；和Except as expressly stipulated in Section 6.1.1, Pledgors transfers or purports to transfer or abandons the Equity Interest pledged or assignsthe Equity Interest pledged without the written consent of Pledgee; and7.1.4丙方的继承人或代管人只能履行部分或拒绝履行业务合作协议项下的支付责任。The successor or custodian of Party C is capable of only partially perform or refuses to perform the payment obligations under the BusinessCooperation Agreement.9秘密文件 Strictly Confidential7.2如知道或发现本第7.1条所述的任何事项或可能导致上述事项的事件已经发生，出质人应立即以书面形式通知质权人。Upon notice or discovery of the occurrence of any circumstances or event that may lead to the aforementioned circumstances described in Section 7.1,Pledgors shall immediately notify Pledgee in writing accordingly.7.3除非第7.1部分下的违约事件在质权人向出质人发出要求其修补此违约行为通知后的二十（20）天之内已经按质权人要求获得救济，质权人在其后的任何时间，可向出质人发出书面违约通知，要求依据第8部分履行其处理股权的权利。Unless an Event of Default set forth in this Section 7.1 has been successfully resolved to Pledgee's satisfaction within twenty (20) days after the Pledgeedelivers a notice to the Pledgors requesting ratification of such Event of Default, Pledgee may issue a Notice of Default to Pledgors in writing at any timethereafter, demanding the Pledgors to immediately dispose of the Pledge in accordance with the provisions of Article 8 of this Agreement.8.质权的行使Exercise of Pledge8.1在被担保债务被全部清偿或履行前，未经质权人书面同意，出质人不得转让本质权和其拥有的丙方股权。Prior to the full payment of all payments in pledge, without the Pledgee's written consent, Pledgors shall not assign the Pledge or the Equity Interest inParty C.8.2在质权人行使其质押权利时，质权人可以向出质人发出书面违约通知。Pledgee may issue a Notice of Default to Pledgors when exercising the Pledge.10秘密文件 Strictly Confidential8.3在质权人行使其质押权利时，根据中国有关法律的规定，质权人有权按照法定程序处置质押股权。仅在中国法律允许的范围内，对于处置的所得，质权人无需给付出质人；除非中国法律另有规定，出质人特此放弃其可能有的能向质权人要求任何质押股权处置所得的权利；同样，出质人对质权人在该质押股权处置后的亏损也不承担任何义务。When the Pledgor exercises the pledge right, Pledgee is entitled to dispose of the Equity Interest pledged in accordance with applicable PRC laws. Onlyto the extent permitted under applicable PRC laws, Pledgee has no obligation to account to Pledgors for proceeds of disposition of the Equity Interest.Unless otherwise required by PRC laws, Pledgors hereby waive any rights it may have to demand any such accounting from Pledgee; Likewise, in suchcircumstance Pledgors shall have no obligation to Pledgee for any deficiency remaining after such disposition of the Equity Interest pledged.8.4质权人依照本协议处分质权时，出质人和丙方应予以必要的协助，以使质权人实现其质权。When Pledgee disposes of the Pledge in accordance with this Agreement, Pledgors and Party C shall provide necessary assistance to enable Pledgee toenforce the Pledge in accordance with this Agreement.9.转让Assignment9.1除非经质权人事先同意，出质人无权赠予或转让其在本协议项下的权利义务。Without Pledgee's prior written consent, Pledgors shall not have the right to assign or delegate its rights and obligations under this Agreement.11秘密文件 Strictly Confidential9.2本协议对出质人及其继任人和经许可的受让人均有约束力，并且对质权人及每一继任人和受让人有效。This Agreement shall be binding on Pledgors and their successors and permitted assigns, and shall be valid with respect to Pledgee and each of itssuccessors and assigns.9.3经出质人同意，质权人可以在任何时候将其在业务合作协议项下的所有或任何权利和义务转让给其指定的关联方（自然人/法人），在这种情况下，受让人应享有和承担本协议项下质权人享有和承担的权利和义务，如同其作为原协议方应享有和承担的一样。质权人转让业务合作协议项下的权利和义务时，应质权人要求，出质人应就此转让签署有关协议和/或文件。Upon the Pledgors’ agreement, Pledgee may assign any or all of its rights and obligations under the Business Cooperation Agreement to its designee(s)(natural/legal persons) at any time, in which case the assigns shall have the rights and obligations of Pledgee under this Agreement, as if it were theoriginal party to this Agreement. When the Pledgee assigns the rights and obligations under the Business Cooperation Agreement, upon Pledgee'srequest, Pledgors shall execute relevant agreements or other documents relating to such assignment.9.4因转让所导致的质权人变更后，应质权人要求，出质人应与新的质权人签订一份内容与本协议一致的新质押协议，并在相应的工商行政管理机关进行登记。In the event of a change in Pledgee due to an assignment, Pledgors shall, at the request of Pledgee, execute a new pledge agreement with the newpledgee on the same terms and conditions as this Agreement, and register the same with the relevant AIC.12秘密文件 Strictly Confidential9.5出质人应严格遵守本协议和各方单独或共同签署的其他有关协议的规定，包括独家购买权合同和对质权人的授权委托书，履行各协议项下的义务，并不进行任何足以影响协议的有效性和可强制执行性的作为/不作为。除非根据质权人的书面指示，出质人不得行使其对质押股权还留存的权利。Pledgors shall strictly abide by the provisions of this Agreement and other contracts jointly or separately executed by the Parties hereto or any of them,including the Exclusive Option Agreement and the Power of Attorney granted to Pledgee, perform the obligations hereunder and thereunder, and refrainfrom any action/omission that may affect the effectiveness and enforceability thereof. Any remaining rights of Pledgors with respect to the EquityInterest pledged hereunder shall not be exercised by Pledgors except in accordance with the written instructions of Pledgee.10.终止Termination在被担保债务被全部清偿或履行完毕之后，本质权人应在尽早合理可行的时间内办理或配合办理解除质押的手续，出质人与丙方应提供相应的配合与协助。Upon the full payment of all payments in pledge under the Business Cooperation Agreement a, Pledgor shall then, with the assistance of Party B and Party C,go through the procedures of cancellation of pledge rights at a reasonable time as soon as practicable.11.手续费及其他费用Handling Fees and Other Expenses一切与本协议有关的费用及实际开支，其中包括但不限于法律费用、工本费、印花税以及任何其他税收、费用等全部由丙方承担。All fees and out of pocket expenses relating to this Agreement, including but not limited to legal costs, costs of production, stamp tax and any other taxes andfees, shall be borne by Party C.13秘密文件 Strictly Confidential12.保密责任Confidentiality各方承认及确定有关本协议、本协议内容，以及彼此就准备或履行本协议而交换的任何口头或书面资料均被视为保密信息。各方应当对所有该等保密信息予以保密，而在未得到另一方书面同意前，不得向任何第三者披露任何保密信息，惟下列信息除外：(a)公众人士知悉或将会知悉的任何信息（惟并非由接受保密信息之一方擅自向公众披露）；(b)根据适用法律法规、股票交易规则、或政府部门或法院的命令而所需披露之任何信息；或(c)由任何一方就本协议所述交易而需向其股东、投资者、法律或财务顾问披露之信息，而该股东、法律或财务顾问亦需遵守与本条款相类似之保密责任。如任何一方工作人员或聘请机构的泄密均视为该方的泄密，需依本协议承担违约责任。无论本协议以任何理由终止，本条款仍然生效。The Parties acknowledge that the existence and the terms of this Agreement and any oral or written information exchanged between the Parties in connectionwith the preparation and performance this Agreement are regarded as confidential information. Each Party shall maintain confidentiality of all such confidentialinformation, and without obtaining the written consent of the other Party, it shall not disclose any relevant confidential information to any third parties, exceptfor the information that: (a) is or will be in the public domain (other than through the receiving Party’s unauthorized disclosure); (b) is under the obligation tobe disclosed pursuant to the applicable laws or regulations, rules of any stock exchange, or orders of the court or other government authorities; or (c) isrequired to be disclosed by any Party to its shareholders, investors, legal counsels or financial advisors regarding the transaction contemplated hereunder,provided that such shareholders, investors, legal counsels or financial advisors shall be bound by the confidentiality obligations similar to those set forth inthis Section. Disclosure of any confidential information by the staff members or agencies hired by any Party shall be deemed disclosure of such confidentialinformation by such Party, which Party shall be held liable for breach of this Agreement. This Section shall survive the termination of this Agreement for anyreason.14秘密文件 Strictly Confidential13.适用法律和争议的解决Governing Law and Resolution of Disputes13.1本协议的订立、效力、解释、履行、修改和终止以及争议的解决均适用中国法律。The execution, effectiveness, construction, performance, amendment and termination of this Agreement and the resolution of disputes hereunder shallbe governed by the laws of China.13.2因解释和履行本协议而发生的任何争议，本协议各方应首先通过友好协商的方式加以解决。如果在一方向其他方发出要求协商解决的书面通知后30天之内争议仍然得不到解决，则任何一方均可将有关争议提交给中国国际经济贸易仲裁委员会，由该会按照其仲裁规则仲裁解决。仲裁应在北京进行，使用之语言为中文。仲裁裁决是终局性的，对各方均有约束力。In the event of any dispute with respect to the construction and performance of this Agreement, the Parties shall first resolve the dispute throughfriendly negotiations. In the event the Parties fail to reach an agreement on the dispute within 30 days after either Party's request to the other Parties forresolution of the dispute through negotiations, either Party may submit the relevant dispute to the China International Economic and Trade ArbitrationCommission for arbitration, in accordance with its Arbitration Rules. The arbitration shall be conducted in Beijing, and the language used in arbitrationshall be Chinese. The arbitration award shall be final and binding on all Parties.13.3因解释和履行本协议而发生任何争议或任何争议正在进行仲裁时，除争议的事项外，本协议各方仍应继续行使各自在本协议项下的其他权利并履行各自在本协议项下的其他义务。Upon the occurrence of any disputes arising from the construction and performance of this Agreement or during the pending arbitration of any dispute,except for the matters under dispute, the Parties to this Agreement shall continue to exercise their respective rights under this Agreement and performtheir respective obligations under this Agreement.15秘密文件 Strictly Confidential14.通知Notices14.1本协议项下要求或发出的所有通知和其他通信应通过专人递送、挂号邮寄、邮资预付或商业快递服务或传真的方式发到该方下列地址。每一通知还应再以电子邮件送达。该等通知视为有效送达的日期按如下方式确定：All notices and other communications required or permitted to be given pursuant to this Agreement shall be delivered personally or sent by registeredmail, postage prepaid, by a commercial courier service or by facsimile transmission to the address of such party set forth below. A confirmation copy ofeach notice shall also be sent by Email. The dates on which notices shall be deemed to have been effectively given shall be determined as follows:14.1.1通知如果是以专人递送、快递服务或挂号邮寄、邮资预付发出的，则以于设定为通知的地址在接收或拒收之日为有效送达日。Notices given by personal delivery, by courier service or by registered mail, postage prepaid, shall be deemed effectively given on the date ofreceipt or refusal at the address specified for notices.14.1.2通知如果是以传真发出的，则以成功传送之日为有效送达日（应以自动生成的传送确认信息为证）。Notices given by facsimile transmission shall be deemed effectively given on the date of successful transmission (as evidenced by anautomatically generated confirmation of transmission).16秘密文件 Strictly Confidential14.2为通知的目的，各方地址如下：For the purpose of notices, the addresses of the Parties are as follows:甲方：中传天下信息科技（深圳）有限公司Party A: Zhongchuan Tianxia Information Technology (Shenzhen) Co., Ltd.地址：深圳市南山区高新中三道2号深圳软件园一期五栋401AAddress: 401A, Building 5, Phase 1, Shenzhen Software Park, No.2 Gaoxin Zhongsan Road, Nanshan District, Shenzhen.收件人：洪婷Attn: Hong Ting乙方：Party B:a)宋雪松Song Xuesong地址：125.Expenses, including legal fees, incurred by a director in defending any legal, administrative or investigative proceedings may be paid by the Company inadvance of the final disposition of such proceedings upon receipt of an undertaking by or on behalf of the director to repay the amount if it shall ultimatelybe determined that the director is not entitled to be indemnified by the Company in accordance with these Articles.126.Expenses, including legal fees, incurred by a former director in defending any legal, administrative or investigative proceedings may be paid by theCompany in advance of the final disposition of such proceedings upon receipt of an undertaking by or on behalf of the former director to repay the amountif it shall ultimately be determined that the director is not entitled to be indemnified by the Company in accordance with these Articles.127.The indemnification and advancement of expenses provided by, or granted pursuant to, these Articles is not exclusive of any other rights to which theperson seeking indemnification of advancement of expenses may be entitled under any agreement, resolution of members, resolution of disinteresteddirectors or otherwise, both as to acting in the person’s official capacity and as to acting in another capacity while serving as a director of the Company.128.If a person to be indemnified has been successful in defence of any proceedings referred to above the person is entitled to be indemnified against allexpenses, including legal fees, and against all judgments, fines and amounts paid in settlement and reasonably incurred by the person in connection withthe proceedings.129.The Company may purchase and maintain insurance in relation to any person who is or was a director, an officer or a liquidator of the Company, or who atthe request of the Company is or was serving as a director, an officer or a liquidator of, or in any other capacity is or was acting for, another body corporateor a partnership, joint venture, trust or other enterprise, against any liability asserted against the person and incurred by the person in that capacity,whether or not the Company has or would have had the power to indemnify the person against the liability as provided in these Articles.SEAL130.The Company shall have a Seal and may have more than one Seal. References herein to the Seal shall be references to every Seal which shall have beenduly adopted by resolution of directors. The directors shall provide for the safe custody of the Seal and for an imprint thereof to be kept at the office of theregistered agent of the Company. Except as otherwise expressly provided herein, the Seal when affixed to any written instrument, shall be witnessed andattested to by the signature of a director or any other person so authorized from time to time by resolution of directors. Such authorization may be before orafter the Seal is affixed, may be general or specific and may refer to any number of sealings. The Directors may provide for a facsimile of the Seal and of thesignature of any director or authorized person which may be reproduced by printing or other means on any instrument and it shall have the same force andvalidity as if the Seal had been affixed to such instrument and the same had been signed as hereinbefore described.21DISTRIBUTIONS131.The directors of the Company may by resolution authorise a distribution by the Company at any time and of any amount and to any members they think fitif they are satisfied on reasonable grounds that immediately after the distribution;a.the value of the Company’s assets will exceed its liabilities, andb.the Company will be able to pay its debts as they fall due.132.A resolution of the directors passed under the preceding Article shall contain a statement that, in the opinion of the directors, immediately after thedistribution the value of the Company’s assets will exceed its liabilities, and the Company will be able to pay its debts as they fall due.133.If, after a distribution is authorised and before it is made, the directors cease to be satisfied on reasonable grounds that the Company will, immediately afterthe distribution satisfy the solvency test, any distribution made by the Company is deemed not to have been authorised.134.If, by virtue of the preceding Article, a distribution is deemed not to have been authorised, a director who;a.ceased, after authorisation but before the making of the distribution, to be satisfied on reasonable grounds for believing that the company wouldsatisfy the solvency test immediately after the distribution is made; andb.failed to take reasonable steps to prevent the distribution being made;is personally liable to the company to repay to the company so much of the distribution as is not able to be recovered from members.135.A distribution made to a member at a time when the company did not, immediately after the distribution, satisfy the solvency test may be recovered by thecompany from the member unless;a.the member received the distribution in good faith and without knowledge of the company’s failure to satisfy the solvency test;b.the member has altered his position in reliance on the validity of the distribution; andc.it would be unfair to require repayment in full or at all.DISTRIBUTIONS BY WAY OF DIVIDEND136.The Company may by a resolution of directors declare a distribution by way of dividend and pay such distribution in money, shares or other property. Inthe event that distributions by way of dividend are paid in specie the directors shall have responsibility for establishing and recording in the resolution ofdirectors authorizing the distribution by way of dividend, a fair and proper value for the assets to be so distributed.137.The directors may from time to time pay to the members such interim distributions by way of dividend as appear to the directors to be justified by theprofits of the Company.138.The directors may, before declaring any distribution by way of dividend, set aside out of the profits of the Company such sum as they think proper as areserve fund, and may invest the sum so set aside as a reserve fund upon such securities as they may select.139.Notice of any distribution by way of dividend that may have been declared shall be given to each member in the manner hereinafter mentioned and alldistributions by way of dividend unclaimed for 3 years after having been declared may be forfeited by resolution of directors for the benefit of theCompany.140.No distribution by way of dividend shall bear interest as against the Company and no distribution by way of dividend shall be paid on treasury shares orshares held by another company of which the Company holds, directly or indirectly, shares having more than 50 percent of the vote in electing directors.22141.A share issued as a distribution by way of dividend by the Company shall be treated for all purposes as having been issued for money equal to the valuedetermined by resolution of the directors. In the absence of fraud the decision of the directors as to the value of the share is conclusive unless a questionof law is involved.142.A division of the issued and outstanding shares of a class or series of shares into a larger number of shares of the same class or series having aproportionately smaller par value does not constitute a distribution by way of dividend of shares.ACCOUNTS AND AUDIT143.The Company may by resolution of members call for the directors to prepare periodically a profit and loss account and a balance sheet. The profit and lossaccount and balance sheet shall be drawn up so as to give respectively a true and fair view of the profit and loss of the Company for the financial periodand a true and fair view of the state of affairs of the Company as at the end of the financial period.144.The Company may by resolution of members call for the accounts to be examined by auditors.145.Subject to the rules of the Designated Stock Exchange, the first auditors shall be appointed by resolution of directors; subsequent auditors shall beappointed by the Audit Committee and shall hold office until the Audit Committee appoint another independent auditor.146.Subject to the rules of the Designated Stock Exchange, the remuneration of the auditors of the Company shall be fixed by the Audit Committee.147.The auditors shall examine each profit and loss account and balance sheet required to be served on every member of the Company or laid before a meetingof the members of the Company and shall state in a written report whether or nota.in their opinion the profit and loss account and balance sheet give a true and fair view respectively of the profit and loss for the period covered bythe accounts, and of the state of affairs of the Company at the end of that period; andb.all the information and explanations required by the auditors have been obtained.148.The report of the auditors shall be annexed to the accounts and shall be read at the meeting of members at which the accounts are laid before the Companyor shall be served on the members.149.Every auditor of the Company shall have a right of access at all times to the books of account and vouchers of the Company, and shall be entitled to requirefrom the directors and officers of the Company such information and explanations as he thinks necessary for the performance of the duties of the auditors.150.The auditors of the Company shall be entitled to receive notice of, and to attend any meetings of members of the Company at which the Company’s profitand loss account and balance sheet are to be presented.NOTICES151.Any notice, information or written statement to be given by the Company to members may be served in any way by which it can reasonably be expected toreach each member or by mail addressed to each member at the address shown in the share register.152.Any summons, notice, order, document, process, information or written statement to be served on the Company may be served by leaving it, or by sendingit by registered mail addressed to the Company, at its registered office, or by leaving it with, or by sending it by registered mail to, the registered agent ofthe Company.153.Service of any summons, notice, order, document, process, information or written statement to be served on the Company may be proved by showing thatthe summons, notice, order, document, process, information or written statement was delivered to the registered office or the registered agent of theCompany or that it was mailed in such time as to admit to its being delivered to the registered office or the registered agent of the Company in the normalcourse of delivery within the period prescribed for service and was correctly addressed and the postage was prepaid.23PENSION AND SUPERANNUATION FUNDS154.The directors may establish and maintain or procure the establishment and maintenance of any noncontributory or contributory pension orsuperannuation funds for the benefit of, and give or procure the giving of donations, gratuities, pensions, allowances or emoluments to, any persons whoare or were at any time in the employment or service of the Company or any company which is a subsidiary of the Company or is allied to or associated withthe Company or with any such subsidiary, or who are or were at any time directors or officers of the Company or of any such other company as aforesaid orwho hold or held any salaried employment or office in the Company or such other company, or any persons in whose welfare the Company or any suchother company as aforesaid is or has been at any time interested, and to the wives, widows, families and dependents of any such person, and may makepayments for or towards the insurance of any such persons as aforesaid, and may do any of the matters aforesaid either alone or in conjunction with anysuch other company as aforesaid. Subject always to the proposal being approved by resolution of members, a director holding any such employment oroffice shall be entitled to participate in and retain for his own benefit any such donation, gratuity, pension allowance or emolument.VOLUNTARY WINDING UP AND DISSOLUTION155.The Company may voluntarily commence to wind up and dissolve by a resolution of members but if the Company has never issued shares it mayvoluntarily commence to wind up and dissolve by resolution of directors.CONTINUATION156.The Company may by resolution of members or by a resolution passed unanimously by all directors of the Company continue as a company incorporatedunder the laws of a jurisdiction outside the British Virgin Islands in the manner provided under those laws.ARBITRATION157.Whenever any difference arises between the Company on the one hand and any of the members or their executors, administrators or assigns on the otherhand, touching the true intent and construction or the incidence or consequences of these Articles or of the Act, touching anything done or executed,omitted or suffered in pursuance of the Act or touching any breach or alleged breach or otherwise relating to the premises or to these Articles, or to anyAct or Ordinance affecting the Company or to any of the affairs of the Company such difference shall, unless the parties agree to refer the same to a singlearbitrator, be referred to 2 arbitrators one to be chosen by each of the parties to the difference and the arbitrators shall before entering on the referenceappoint an umpire.158.If either party to the reference makes default in appointing an arbitrator either originally or by way of substitution (in the event that an appointed arbitratorshall die, be incapable of acting or refuse to act) for 10 days after the other party has given him notice to appoint the same, such other party may appoint anarbitrator to act in the place of the arbitrator of the defaulting party.We, Portcullis TrustNet (BVI) Limited of Portcullis TrustNet Chambers, P.O. Box 3444, Road Town, Tortola, British Virgin Islands for the purpose of incorporating aBVI Business Company under the laws of the British Virgin Islands hereby sign these Articles of Association the 27th day of October, 2009.Incorporator/s/ Nicole WheatleyPortcullis TrustNet (BVI) LimitedPortcullis TrustNet ChambersP.O. Box 3444Road Town, TortolaBritish Virgin Islands(Sgd. Nicole Wheatley)24EX4.15 3 f20f2017ex415_luokung.htm EXCLUSIVE BUSINESS COOPERATION AGREEMENT BY AND BETWEEN ZHONGCHUAN TIANXIA INFORMATIONTECHNOLOGY (SHENZHEN) CO., LTD., AND BEIJING MOBILE VISION TECHNOLOGY CO., LTD., DATED AUGUST 31, 2015Exhibit 4.15独家业务合作协议Exclusive Business Cooperation Agreement本独家业务合作协议（下称“本协议”）由以下双方于年月日在中华人民共和国（下称“中国”）北京市签署。This Exclusive Business Cooperation Agreement (this “Agreement”) is made and entered into by and between the following parties on in Beijing, thePeople’s Republic of China (“China” or the “PRC”).甲方：中传天下信息科技（深圳）有限公司Party A: Zhongchuan Tianxia Information Technology (Shenzhen) Co., Ltd.地址：深圳市南山区高新中三道2号深圳软件园一期五栋401A Address: 401A, Building 5, Phase 1, Shenzhen Software Park, No.2 Gaoxin Zhongsan Road, Nanshan District, Shenzhen统一社会信用代码：91440300565701058R Uniform Social Credit Code: 91440300565701058R乙方：北京中传视讯科技有限公司Party B: Beijing Mobile Vision Technology Co., Ltd.地址：北京市朝阳区光华路9号SOHO3QLAB32Address: LAB32, SOHO3Q, No 9, Guanghua Road, Chaoyang District, Beijing统一社会信用代码：9111010576215249XMUniform Social Credit Code: 9111010576215249XM甲方和乙方以下各称为“一方”，统称为“双方”。Each of Party A and Party B shall be hereinafter referred to as a “Party” respectively, and as “Parties” collectively.1秘密文件Strictly Confidential鉴于：Whereas,1.甲方是一家在中国注册的外商独资企业，拥有丰富的技术研发和产业化推广相关的管理和投资经验，并提供相关的技术支持和咨询服务；Party A is a whollyforeignowned enterprise established in China, which has rich experience in technology research development and industrializationpromotion management and investment, and provides relevant technical support and consulting services;2.乙方是一家在中国成立的有限责任公司，经中国有关政府部门批准依法主要从事手机视频技术开发、内容制作及市场推广；Party B is a limited company in China, mainly engages in mobile video technology research, development, content creation, sale and related industrialpromotion as approved by the relevant governmental authorities in China;3.甲方同意利用其技术、人员和信息优势，在本协议期间向乙方提供有关手机视频技术开发、内容制作及市场推广以及未来扩大业务规模和业务范围时乙方所需的技术支持、技术咨询等相关服务，乙方同意接受甲方或其指定方按本协议条款的规定提供的各种服务。Party A is willing to provide Party B with technology supports and technology consulting services in connection with mobile video technology research,development, content creation, sale and related industrial promotion and such services in connection with Party B’s extension of business scale orbroadening of businesses during the term of this Agreement, utilizing its advantages in technology, human resources, and information, and Party B iswilling to accept such services provided by Party A or Party A's designee(s), each on the terms set forth herein.2秘密文件Strictly Confidential据此，甲方和乙方经协商一致，达成如下协议：Now, therefore, through mutual discussion, the Parties have reached the following agreements:1.服务提供Services Provided by Party A1.1按照本协议条款和条件，乙方在此委任甲方在本协议期间作为乙方的独家服务提供者向乙方提供全面的和手机视频技术开发、内容制作及市场推广相关以及未来扩大业务规模和业务范围时乙方所需的技术支持、业务支持和相关咨询服务，具体内容包括但不限于以下内容：Party B hereby appoints Party A as Party B's exclusive services provider to provide Party B with complete technical support, business supportand related consulting services in connection with mobile video technology research, development, content creation, sale and related industrialpromotion and such services in connection with Party B’s extension of business scale or broadening of businesses during the term of thisAgreement, in accordance with the terms and conditions of this Agreement, which may include but not limited to:1.1.1为乙方提供其手机视频技术开发、内容制作及市场推广业务所需的一切服务支持，为乙方提供相当于包括总经理、行政人员、管理人员、筹划部门、商业运营、人力资源、财务、会计以及与乙方业务相关的一切业务操作所需人员所能提供的服务内容；managing all aspects of Party B’s business of mobile video technology research, development, content creation, sale and relatedindustrial promotion. In this capacity, Party A will procure or engage for Party B the services of a general manager and other managementstaff, including but not limited to personnel responsible for all administration, operations, planning, business development, humanresources, finance, accounting and other operations related to the Business of Party B;3秘密文件Strictly Confidential1.1.2为乙方制定全部的商业计划、销售目标，并为优化执行该等商业计划设计和建立相应的系统及操作程序；developing all business plans and sales projections of Party B, and for developing and establishing systems and procedures for optimumexecution of the business plans;1.1.3为乙方申请手机视频技术及内容制作相关专利提供咨询服务和支持；consulting services and support in connection with Party B’s applying for mobile video technology related patents and content creation;1.1.4为乙方手机视频技术产业化的发展方向、规模、品牌提升提供咨询服务；consulting services in connection with the development directions, size and business brands promotion of Party B’s mobile videotechnology industrialization;4秘密文件Strictly Confidential1.1.5为乙方提供与业务相关的办公、生产和销售服务，为乙方租赁场所，建立业务相关的系统和程序，满足乙方的其他要求；procuring or obtaining for Party B all office, production and distribution services related to the Business. It shall procure or obtainappropriate leases, establish systems and procedures needed to operate the business, fulfill orders for services;1.1.6尽最大努力为乙方建立手机视频技术销售市场，根据甲方为乙方制定的商业计划及销售目标代表乙方获取客户订单，同时为乙方提供与业务相关的客户服务，建立向客户开具票据的程序和与会计相关的托收服务。using its best efforts to establish mobile video technology related marketing and other structures to obtain orders for services &products from customers on behalf of Party B in accordance with Party B’s business plans, sales projections and objectives (asdeveloped by Party A) and procure or obtain customer services required in connection with the Business. It shall also establishprocedures for invoicing customers, and establish collection services with respect to accounts;1.1.7就乙方的劳动用工方面提供咨询服务和支持，包括但不限于，组织实施对乙方业务人员、行政人员、管理人员等人员进行培训和考核，协助建立健全的人力资源管理制度和实现人力资源的良好配置；consulting services and support regarding labor system of Party B, including but without limitation to labor training and evaluation ofsales person, administrative staff and management person etc. and establishment of human resources management system to well;5秘密文件Strictly Confidential1.1.8提供乙方需要的客户数据统计、分析及相关数据库的建设和维护等咨询服务；providing Party B with compile and analysis of client data and consulting services of establishment and maintenance of data base;1.1.9提供乙方需要的软件和相关技术支持服务；providing software Party B requires and other technical support;1.1.10接受乙方委托，对乙方的手机视频技术研发和产业化推广业务经营进行指导和管理；guiding and management on Party B’s business of mobile video technology research and development and related industrial promotionoperation according to Party B’s commission;1.1.11当乙方业务规模发展或业务范围扩大需要时，购买乙方业务经营需要的设备；in the event of the demand of Party B’s development of business scale or broadening of businesses, purchase the equipments which itneeds for the operation of its business;1.1.12当乙方业务规模发展或业务范围扩大需要时，完成乙方项目中的全部或部分工作；in the event of the demand of Party B’s development of business scale or broadening of businesses, complete the work of Party B’sproject in whole or in party;6秘密文件Strictly Confidential1.1.13当乙方业务规模发展或业务范围扩大需要时，开发新技术；in the event of the demand of Party B’s development of business scale or broadening of businesses, develop new technology;1.1.14乙方委托甲方，且甲方接受委托提供的其他服务。other services Party B appoints Party A to provide and Party A agrees to provide.1.2乙方接受甲方的咨询和服务。乙方进一步同意，除非经甲方事先书面同意，在本协议期间，就本协议约定的服务或其他事宜，乙方不得直接或间接地从任何第三方获得任何与本协议相同或类似的咨询和/或服务，并不得与任何第三方就本协议所述事项建立任何类似的合作关系。双方同意，甲方可以指定其他方（该被指定方可以与乙方签署本协议第1.3条描述的某些协议）为乙方提供本协议约定的服务和/或支持。Party B agrees to accept all the consultations and services provided by Party A. Party B further agrees that unless with Party A's prior writtenconsent, during the term of this Agreement, Party B shall not directly or indirectly accept the same or any similar consultations and/or servicesprovided by any third party and shall not establish similar corporation relationship with any third party regarding the matters contemplated by thisAgreement. Party A may appoint other parties, who may enter into certain agreements described in Section 1.3 with Party B, to provide Party Bwith the consultations and/or services under this Agreement.7秘密文件Strictly Confidential1.3服务的提供方式Service Providing Methodology1.3.1双方同意在本协议有效期内，视情况而定，乙方可以与甲方或甲方指定的其他方进一步签订技术服务协议和/或咨询服务协议，对各项业务培训、技术服务、咨询服务的具体内容、方式、人员、收费等进行约定。Parties agree that during the term of this Agreement, where necessary, Party B may enter into further technical service agreements and/orconsulting service agreements with Party A or any other party designated by Party A, which shall provide the specific contents, manner,personnel, and fees for the specific technical services and consulting services.1.3.2为更好地履行本协议，双方同意，在甲方认为必要时，乙方应在本协议有效期内与甲方或甲方指定的其他方根据业务进展需要随时签署协议，由甲方或其指定方向乙方提供服务。To fulfill this Agreement, Parties agree that during the term of this Agreement, where Party A deems necessary, Party B shall enter intoagreements with Party A or any other party designated by Party A which shall set forth that Party A or any other party designated byParty A provide services to Party B based on the needs of the business of Party B.8秘密文件Strictly Confidential2.服务的价格和支付方式The Calculation and Payment of the Service Fees双方同意，就甲方提供的服务，乙方应向甲方支付服务费（“服务费”）。服务费不应低于乙方税后利润的80%。服务费应当按季支付；经甲方事先书面同意，服务费可以根据乙方的经营需要进行调整。Both Parties agree that, in consideration of the services provided by Party A, Party B shall pay Party A fees (the “Service Fees”), which shall not be lessthan 80% of Party B’s aftertax profits . The Service Fees shall be due and payable on a quarterly basis; upon the prior written consent by Party A, the rateof Service Fees may be adjusted pursuant to the operational needs of Party B.3.知识产权和保密条款Intellectual Property Rights and Confidentiality Clauses3.1在中国法律允许的范围内，甲方对履行本协议而产生或创造的任何权利、所有权、权益和所有知识产权包括但不限于著作权、专利权、专利申请权、软件、技术秘密、商业机密及其他均享有独占的和排他的权利和利益。乙方须签署所有适当的文件，采取所有适当的行动，递交所有的文件和/或申请，提供所有适当的协助，以及做出所有其他依据甲方的自行决定认为是必要的行为，以将任何对该等知识产权的所有权、权利和权益赋予甲方，和/或完善对甲方此等知识产权权利的保护。To the extent permitted under the PRC laws, Party A shall have exclusive and proprietary rights and interests in all rights, ownership, interests andintellectual properties arising out of or created during the performance of this Agreement, including but not limited to copyrights, patents, patentapplications, software, technical secrets, trade secrets and others. Party B shall execute all appropriate documents, take all appropriate actions,submit all filings and/or applications, render all appropriate assistance and otherwise conduct whatever is necessary deemed as by Party A in itssole discretion for the purposes of vesting any ownership, right or interest of any such intellectual property rights in Party A, and/or perfectingthe protections for any such intellectual property rights in Party A.9秘密文件Strictly Confidential3.2双方承认及确定有关本协议、本协议内容，以及彼此就准备或履行本协议而交换的任何口头或书面资料均被视为保密信息。双方应当对所有该等保密信息予以保密，而在未得到另一方书面同意前，不得向任何第三者披露任何保密信息，惟下列信息除外：(a)公众人士知悉或将会知悉的任何信息（惟并非由接受保密信息之一方擅自向公众披露）；(b)根据适用法律法规、股票交易规则、或政府部门或法院的命令而所需披露之任何信息；或(c)由任何一方就本协议所述交易而需向其股东、投资者、法律或财务顾问披露之信息，而该股东、法律或财务顾问亦需遵守与本条款相类似之保密责任。如任何一方工作人员或聘请机构的泄密均视为该方的泄密，需依本协议承担违约责任。无论本协议以任何理由终止，本条款仍然生效。The Parties acknowledge that the existence and the terms of this Agreement and any oral or written information exchanged between the Parties inconnection with the preparation and performance this Agreement are regarded as confidential information. Each Party shall maintainconfidentiality of all such confidential information, and without obtaining the written consent of the other Party, it shall not disclose any relevantconfidential information to any third parties, except for the information that: (a) is or will be in the public domain (other than through the receivingParty’s unauthorized disclosure); (b) is under the obligation to be disclosed pursuant to the applicable laws or regulations, rules of any stockexchange, or orders of the court or other government authorities; or (c) is required to be disclosed by any Party to its shareholders, investors,legal counsels or financial advisors regarding the transaction contemplated hereunder, provided that such shareholders, investors, legal counselsor financial advisors shall be bound by the confidentiality obligations similar to those set forth in this Section. Disclosure of any confidentialinformation by the staff members or agencies hired by any Party shall be deemed disclosure of such confidential information by such Party, whichParty shall be held liable for breach of this Agreement. This Section shall survive the termination of this Agreement for any reason.3.3双方同意，不论本协议是否变更、解除或终止，本条款将持续有效。The Parties agree that this Section shall survive changes to, and rescission or termination of, this Agreement.4.陈述和保证Representations and Warranties4.1甲方陈述和保证如下：Party A hereby represents and warrants as follows:4.1.1甲方是按照中国法律合法注册并有效存续的外商独资企业。Party A is a whollyforeignowned enterprise legally registered and validly existing in accordance with the laws of China.10秘密文件Strictly Confidential4.1.2甲方已采取必要的公司行为，获得必要的授权，并取得第三方和政府部门的同意及批准（若需）以签署和履行本协议；甲方对本协议的签署和履行并不违反法律法规的明确规定。Party A has taken all necessary corporate actions, obtained all necessary authorization and the consent and approval from third partiesand government agencies (if any) for the execution and performance of this Agreement. Party A’s execution and performance of thisAgreement do not violate any explicit requirements under any law or regulation binding on Party A.4.1.3本协议构成对其合法、有效、有约束力并依本协议之条款对其强制执行的义务。This Agreement constitutes Party A's legal, valid and binding obligations, enforceable in accordance with its terms.4.2乙方陈述和保证如下：Party B hereby represents and warrants as follows:4.2.1乙方是按照中国法律合法登记且有效存续的有限责任公司，乙方根据政府部门的批准和许可从事手机视频技术开发、内容制作和产业化市场推广的经营。Party B is a limited company legally registered and validly existing in accordance with the laws of China, engages in mobile videotechnology research, development, content creation, sale and related industrial promotion pursuant to governmental approvals andpermits;11秘密文件Strictly Confidential4.2.2乙方已采取必要的行为，获得必要的授权，并取得第三方和政府部门的同意及批准（若需）以签署和履行本协议；乙方对本协议的签署和履行并不违反法律法规的明确规定。Party B has taken all necessary actions, obtained all necessary authorization and the consent and approval from third parties andgovernment agencies (if any) for the execution and performance of this Agreement. Party B’s execution and performance of thisAgreement do not violate any explicit requirements under any law or regulation binding on Party B.4.2.3本协议构成对其合法、有效、有约束力并依本协议之条款对其强制执行的义务。This Agreement constitutes Party B's legal, valid and binding obligations, and shall be enforceable against it.5.生效和有效期Effectiveness and Term5.1本协议于文首标明的协议日期签署并同时生效。除非依本协议或双方其他协议的约定而提前终止，本协议有效期为20年，但甲、乙双方应自本协议签署后，每3个月对本协议的内容做一次审查，以决定是否需要根据当时的情况对本协议作出相应修改和补充。This Agreement is executed on the date first above written and shall take effect as of such date. Unless earlier terminated in accordance with theprovisions of this Agreement or relevant agreements separately executed between the Parties, the term of this Agreement shall be 20 years. Afterthe execution of this Agreement, both Parties shall review this Agreement every 3 months to determine whether to amend or supplement theprovisions in this Agreement based on the actual circumstances at that time.12秘密文件Strictly Confidential5.2协议期满前，经甲方书面确认，本协议可以延期。延期的期限由甲方决定，乙方必须无条件地同意该延期。The term of this Agreement may be extended if confirmed in writing by Party A prior to the expiration thereof. The extended term shall bedetermined by Party A, and Party B shall accept such extended term unconditionally.6.终止Termination6.1除非依据本协议续期，本协议于到期之日终止。Unless renewed in accordance with the relevant terms of this Agreement, this Agreement shall be terminated upon the date of expiration hereof.6.2本协议有效期内，除非甲方对乙方有重大过失或存在欺诈行为，乙方不得提前终止本协议。尽管如此，甲方可在任何时候通过提前30天向乙方发出书面通知的方式终止本协议。During the term of this Agreement, unless Party A commits gross negligence, or a fraudulent act, against Party B, Party B shall not terminate thisAgreement prior to its expiration date. Nevertheless, Party A shall have the right to terminate this Agreement upon giving 30 days' prior writtennotice to Party B at any time.6.3在本协议终止之后，双方在第3、7和8条项下的权利和义务将继续有效。The rights and obligations of the Parties under Articles 3, 7 and 8 shall survive the termination of this Agreement.13秘密文件Strictly Confidential7.适用法律和争议解决Governing Law and Resolution of Disputes7.1本协议的订立、效力、解释、履行、修改和终止以及争议的解决适用中国的法律。The execution, effectiveness, construction, performance, amendment and termination of this Agreement and the resolution of disputes hereundershall be governed by the laws of China.7.2因解释和履行本协议而发生的任何争议，本协议双方应首先通过友好协商的方式加以解决。如果在一方向其他方发出要求协商解决的书面通知后30天之内争议仍然得不到解决，则任何一方均可将有关争议提交给中国国际经济贸易仲裁委员会，由该会按照其仲裁规则仲裁解决。仲裁应在北京进行，使用之语言为中文。仲裁裁决是终局性的，对各方均有约束力。In the event of any dispute with respect to the construction and performance of this Agreement, the Parties shall first resolve the dispute throughfriendly negotiations. In the event the Parties fail to reach an agreement on the dispute within 30 days after either Party's request to the otherParties for resolution of the dispute through negotiations, either Party may submit the relevant dispute to the China International Economic andTrade Arbitration Commission for arbitration, in accordance with its Arbitration Rules. The arbitration shall be conducted in Beijing, and thelanguage used in arbitration shall be Chinese. The arbitration award shall be final and binding on all Parties.14秘密文件Strictly Confidential7.3因解释和履行本协议而发生任何争议或任何争议正在进行仲裁时，除争议的事项外，本协议双方仍应继续行使各自在本协议项下的其他权利并履行各自在本协议项下的其他义务。Upon the occurrence of any disputes arising from the construction and performance of this Agreement or during the pending arbitration of anydispute, except for the matters under dispute, the Parties to this Agreement shall continue to exercise their respective rights under this Agreementand perform their respective obligations under this Agreement.8.补偿Indemnification就甲方根据本协议向乙方提供的咨询和服务内容所产生或引起的针对甲方的诉讼、请求或其他要求而招致的任何损失、损害、责任或费用都应由乙方补偿给甲方，以使甲方不受损害，除非该损失、损害、责任或费用是因甲方的重大过失或故意而产生的。Party B shall indemnify and hold harmless Party A from any losses, injuries, obligations or expenses caused by any lawsuit, claims or other demandsagainst Party A arising from or caused by the consultations and services provided by Party A to Party B pursuant this Agreement, except where suchlosses, injuries, obligations or expenses arise from the gross negligence or willful misconduct of Party A.15秘密文件Strictly Confidential9.通知Notices9.1本协议项下要求或发出的所有通知和其他通信应通过专人递送、挂号邮寄、邮资预付或快递服务或传真的方式发到该方下列地址。每一通知还应再以电子邮件送达。该等通知视为有效送达的日期按如下方式确定：All notices and other communications required or permitted to be given pursuant to this Agreement shall be delivered personally or sent byregistered mail, postage prepaid, by a courier service or by facsimile transmission to the address of such Party set forth below. A confirmationcopy of each notice shall also be sent by email. The dates on which notices shall be deemed to have been effectively given shall be determined asfollows:9.1.1通知如果是以专人递送、快递服务或挂号邮寄、邮资预付发出的，则以于设定为通知的地址在接收或拒收之日为有效送达日。Notices given by personal delivery, by courier service or by registered mail, postage prepaid, shall be deemed effectively given on thedate of receipt or refusal at the address specified for notices.9.1.2通知如果是以传真发出的，则以成功传送之日为有效送达日（应以自动生成的传送确认信息为证）。Notices given by facsimile transmission shall be deemed effectively given on the date of successful transmission (as evidenced by anautomatically generated confirmation of transmission).16秘密文件Strictly Confidential9.2为通知的目的，双方地址如下：For the purpose of notices, the addresses of the Parties are as follows:甲方：中传天下信息科技（深圳）有限公司Party A: Zhongchuan Tianxia Information Technology (Shenzhen) Co., Ltd.地址：深圳市南山区高新中三道2号深圳软件园一期五栋401AAddress:401A, Building 5, Phase 1, Shenzhen Software Park, No.2 Gaoxin Zhongsan Road, Nanshan District, Shenzhen收件人：洪婷Attn: Hong Ting乙方：北京中传视讯科技有限公司Party B: Beijing Mobile Vision Technology Co., Ltd地址：北京市朝阳区光华路9号SOHO3QLAB32Address: LAB32, SOHO3Q, No 9, Guanghua Road, Chaoyang District, Beijing.收件人：宋雪松Attn.: Song Xuesong9.3任何一方可按本条规定随时给另一方发出通知来改变其接收通知的地址。Any Party may at any time change its address for notices by a notice delivered to the other Party in accordance with the terms hereof.17秘密文件Strictly Confidential10.协议的转让Assignment10.1乙方不得将其在本协议项下的权利与义务转让给第三方，除非事先征得甲方的书面同意。Without Party A's prior written consent, Party B shall not assign its rights and obligations under this Agreement to any third party.10.2乙方在此同意，甲方可以在其需要时向其他第三方转让其在本协议项下的权利和义务，并在该等转让发生时甲方仅需向乙方发出书面通知，并且无需再就该等转让征得乙方的同意。Party B agrees that Party A may assign its obligations and rights under this Agreement to any third party upon a prior written notice to Party Bbut without the consent of Party B.11.协议的分割性Severability如果本协议有任何一条或多条规定根据任何法律或法规在任何方面被裁定为无效、不合法或不可执行，本协议其余规定的有效性、合法性或可执行性不应因此在任何方面受到影响或损害。双方应通过诚意磋商，争取以法律许可以及双方期望的最大限度内有效的规定取代那些无效、不合法或不可执行的规定，而该等有效的规定所产生的经济效果应尽可能与那些无效、不合法或不能强制执行的规定所产生的经济效果相似。In the event that one or several of the provisions of this Agreement are found to be invalid, illegal or unenforceable in any aspect in accordance with anylaws or regulations, the validity, legality or enforceability of the remaining provisions of this Agreement shall not be affected or compromised in any aspect.The Parties shall strive in good faith to replace such invalid, illegal or unenforceable provisions with effective provisions that accomplish to the greatestextent permitted by law and the intentions of the Parties, and the economic effect of such effective provisions shall be as close as possible to the economiceffect of those invalid, illegal or unenforceable provisions.18秘密文件Strictly Confidential12.协议的修改、补充Amendments and Supplements双方可以书面协议方式对本协议作出修改和补充。经过双方签署的有关本协议的修改协议和补充协议是本协议组成部分，具有与本协议同等的法律效力。Any amendments and supplements to this Agreement shall be in writing. The amendment agreements and supplementary agreements that have beensigned by the Parties and that relate to this Agreement shall be an integral part of this Agreement and shall have the same legal validity as this Agreement.13.语言和副本Language and Counterparts本协议以中文和英文书就，一式二份，甲乙双方各持一份，具有同等效力；中英文版本如有冲突，应以中文版为准。This Agreement is written in both Chinese and English language in two copies, each Party having one copy with equal legal validity; in case there is anyconflict between the Chinese version and the English version, the Chinese version shall prevail.本页其余部分刻意留为空白The Remainder of this page is intentionally left blank19秘密文件Strictly Confidential有鉴于此，双方已使得经其授权的代表于文首所述日期签署了本独家业务合作协议并即生效，以昭信守。IN WITNESS WHEREOF, the Parties have caused their authorized representatives to execute this Exclusive Business Cooperation Agreement as of thedate first above written.甲方：中传天下信息科技（深圳）有限公司（盖章）Party A: Zhongchuan Tianxia Information Technology (Shenzhen) Co., Ltd.(Seal)签字：By: /s/ Hong Ting 姓名：洪婷Name: Hong Ting职务：总经理Title: General Manager20秘密文件Strictly Confidential有鉴于此，双方已使得经其授权的代表于文首所述日期签署了本独家业务合作协议并即生效，以昭信守。IN WITNESS WHEREOF, the Parties have caused their authorized representatives to execute this Exclusive Business Cooperation Agreement as of thedate first above written. 乙方：北京中传视讯科技有限公司（盖章）Party B: Beijing Mobile Vision Technology Co., Ltd. (Seal)签字：By: /s/ Song Xuesong 姓名：宋雪松Name: Song Xuesong职务：董事长Title: Chairman of the Board21秘密文件Strictly ConfidentialEX4.16 4 f20f2017ex416_luokung.htm EXCLUSIVE OPTION AGREEMENT BY AND AMONG ZHONGCHUAN TIANXIA INFORMATION TECHNOLOGY(SHENZHEN) CO., LTD., XUESONG SONG, WEILI CHEN, PING WANG, DONGLAI LIU, AND BEIJING MOBILE VISION TECHNOLOGY CO., LTD., DATEDAUGUST 31, 2015Exhibit 4.16独家购买权协议Exclusive Option Agreement本独家购买权协议 (下称“本协议”) 由以下各方于年月日在中华人民共和国（下称“中国”）北京签订：This Exclusive Option Agreement (this “Agreement”) is executed by and among the Parties below as of in Beijing, the People’s Republic of China (the“China” or “PRC”):甲方：中传天下信息科技（深圳）有限公司，一家依照中国法律设立和存在的外商独资企业，地址为深圳市南山区高新中三道2号深圳软件园一期五栋401A；Party A:Zhongchuan Tianxia Information Technology (Shenzhen) Co., Ltd., a whollyforeignowned enterprise organized and existing under the laws of China,with its address at 401A, Building 5, Phase 1, Shenzhen Software Park, No.2 Gaoxin Zhongsan Road, Nanshan District, Shenzhen.乙方：Party B:a)宋雪松Song Xuesong身份证号码:120112196809040417ID Card No.:120112196809040417住所：天津市河西区广东路中裕园33702Address:Zhongyu Yuan 33702, Guangdong Road, Hexi District, Tianjinb)陈蔚力Chen Weili身份证号码:120106197309240516ID Card No.:120106197309240516住所：广东省深圳市宝安区宝城上川路15号Address:Baocheng Shangchuan Road 15, Baoan District, Shenzhen, Guangdong1秘密文件Strictly Confidentialc)王平Wang Ping身份证号码:35020319691030401xID Card No.:35020319691030401x住所：广东省深圳市南山区高新南环路36号彩虹之岸12栋4AAddress:Caihong Zhi’an Building No.12 Suite 4A, Gaoxin Nanhuan Road 36, Nanshan District, Shenzhen, Guangdongd)刘东来Liu Donglai身份证号码:120107196810103912ID Card No.:120107196810103912住所：天津市和平区南京路诚基经贸中心1号楼2门1702号Address:No 1702, Door 2, Build 1, Chengji Economic and Trade Centre, Nanjing Road, Heping District, Tianjin.丙方：北京中传视讯科技有限公司，一家依照中国法律设立和存在的有限责任公司，地址为北京市朝阳区光华路9号SOHO3QLAB32，统一社会信用代码为9111010576215249XM；Party C:Beijing Mobile Vision Technology Co., Ltd., a limited company duly registered in China, with its address at LAB32, SOHO3Q, No 9, Guanghua Road,Chaoyang District, Beijing and its uniform social credit code of 9111010576215249XM.2秘密文件Strictly Confidential在本协议中，甲方、乙方和丙方以下各称“一方”，合称“各方”。In this Agreement, each of Party A, Party B and Party C shall be referred to as a “Party” respectively, and they shall be collectively referred to as the“Parties”.鉴于，乙方系丙方股东并合计持有丙方100%股权，乙方将按本协议之条款授予甲方购买全部或部分该股权的权利。Whereas, Party B are the shareholders of Party C and jointly hold 100% of the equity interest in Party C, and Party B are willing to grant to Party A the rightto acquire such equity interest, in whole or in part, on the terms herein.现各方协商一致，达成如下协议：Now therefore, upon mutual discussion and negotiation, the Parties have reached the following agreement:1.股权买卖Sale and Purchase of Equity Interest1.1授予权利Option Granted乙方在此不可撤销地授予甲方在中国法律允许的前提下，按照甲方自行决定的行使步骤，并按照本协议第1.3条所述的价格，随时一次或多次从乙方购买或指定一人或多人(“被指定人”)从乙方购买其目前和将来所持有的丙方的全部或部分股权（无论乙方出资额和/或持股比例将来是否发生变化）的一项不可撤销的专有权(“股权购买权”)。除甲方和被指定人外，任何第三人均不得享有股权购买权或其他与乙方股权有关的权利。丙方特此同意乙方向甲方授予股权购买权。本款及本协议所规定的“人”指个人、公司、合营企业、合伙、企业、信托或非公司组织。Party B hereby irrevocably grant Party A an irrevocable and exclusive right to purchase, or designate one or more persons (each, a “Designee”) topurchase the equity interests in Party C now and in the future held by Party B (regardless whether Party B’s capital contribution amount and/orpercentage of shareholding will be changed in the future) once or at multiple times at any time in part or in whole at Party A’s sole and absolutediscretion to the extent permitted by Chinese laws and at the price described in Section 1.3 herein (such right being the “Equity Interest PurchaseOption”). Except for Party A and the Designee(s), no other person shall be entitled to the Equity Interest Purchase Option or other rights withrespect to the equity interests of Party B. Party C hereby agrees to the grant by Party B of the Equity Interest Purchase Option to Party A. Theterm “person” as used herein shall refer to individuals, corporations, partnerships, partners, enterprises, trusts or noncorporate organizations.3秘密文件Strictly Confidential1.2行使步骤Steps for Exercise of Equity Interest Purchase Option甲方行使其股权购买权以符合中国法律和法规的规定为前提。甲方行使股权购买权时，应向乙方发出书面通知(“股权购买通知”)，股权购买通知应载明以下事项：(a)甲方关于行使股权购买权的决定；(b)甲方拟从乙方购买的股权份额(“被购买的股权”)；和(c)被购买的股权的买入日期。Subject to the provisions of the laws and regulations of China, Party A may exercise the Equity Interest Purchase Option by issuing a writtennotice to Party B (the “Equity Interest Purchase Option Notice”), specifying: (a) Party A’s decision to exercise the Equity Interest PurchaseOption; (b) the portion of equity interests to be purchased from Party B (the “Optioned Interests”); and (c) the date for purchasing the OptionedInterests.1.3股权买价Equity Interest Purchase Price被购买的股权的买价（“股权买价”）应是行权当时中国法律允许的最低价格。乙方收到该股权对价后，应当提供给丙方与该股权买价相同金额的借款，该借款的期限为20年，且为无息。乙方应当在该借款期限届满时就该借款放弃对丙方的债权。The purchase price of the Optioned Interests (the “Equity Interest Purchase Price”) shall be the lowest price permitted by the laws of China. Afterreceiving the Equity Interest Purchase Price, Party B shall make an interestfree loan equivalent to the amount of Equity Interest Purchase Price toParty C, of which term is 20 years. Each member of Party B shall give up his(her) creditor’s right when the loan term expires.4秘密文件Strictly Confidential1.4转让被购买股权Transfer of Optioned Interests甲方每次行使股权购买权时：For each exercise of the Equity Interest Purchase Option:1.4.1乙方应责成丙方及时召开股东会会议，在该会议上，应通过批准乙方向甲方和/或被指定人转让被购买的股权的决议；Party B shall cause Party C to promptly convene a shareholders meeting, at which a resolution shall be adopted approving Party B’stransfer of the Optioned Interests to Party A and/or the Designee(s);1.4.2乙方应就其向甲方和/或被指定人转让被购买股权取得丙方其他股东同意该转让并放弃优先购买权的书面声明。Party B shall obtain written statements from the other shareholder of Party C giving consent to the transfer of the equity interest to PartyA and/or the Designee(s) and waiving any right of first refusal related thereto.1.4.3乙方应与甲方和/或(在适用的情况下)被指定人按照本协议及股权购买通知的规定，为每次转让签订股权转让协议；Party B shall execute a share transfer contract with respect to each transfer with Party A and/or each Designee (whichever is applicable),in accordance with the provisions of this Agreement and the Equity Interest Purchase Option Notice regarding the Optioned Interests;5秘密文件Strictly Confidential1.4.4有关方应签署所有其他所需协议、协议或文件，取得全部所需的政府批准和同意，并采取所有所需行动，在不附带任何担保权益的情况下，将被购买的股权的有效所有权转移给甲方和/或被指定人并使甲方和/或被指定人成为被购买的股权的登记在册所有人。为本款及本协议的目的，“担保权益”包括担保、抵押、第三方权利或权益，任何购股权、收购权、优先购买权、抵销权、所有权扣留或其他担保安排等；但为了明确起见，不包括在本协议、乙方股权质押协议项下产生的任何担保权益。本款及本协议所规定的“乙方股权质押协议”指甲方、乙方和丙方于本协议签署之日签订的股权质押协议，根据股权质押协议，乙方为担保丙方能履行丙方与甲方签订的独家业务合作协议项下的义务，而向甲方质押其在丙方的全部乙方股权。The relevant Parties shall execute all other necessary contracts, agreements or documents, obtain all necessary government licenses andpermits and take all necessary actions to transfer valid ownership of the Optioned Interests to Party A and/or the Designee(s),unencumbered by any security interests, and cause Party A and/or the Designee(s) to become the registered owner(s) of the OptionedInterests. For the purpose of this Section and this Agreement, “security interests” shall include securities, mortgages, third party’s rightsor interests, any stock options, acquisition right, right of first refusal, right to offset, ownership retention or other security arrangements,but shall be deemed to exclude any security interest created by this Agreement and Party B’s Equity Interest Pledge Agreement. “PartyB’s Equity Interest Pledge Agreement” as used in this Section and this Agreement shall refer to the Equity Interest Pledge Agreementexecuted by and among Party A, Party B and Party C on the date of this Agreement, whereby Party B pledge all of their equity interests inParty C to Party A, in order to guarantee Party C’s performance of its obligations under the Exclusive Business Corporation Agreementexecuted by and between Party C and Party A.6秘密文件Strictly Confidential2.知识产权独家购买权Exclusive Option regarding the Intellectual Property Rights2.1本协议签订之日起，若乙方拟转让、出售或以其他方式处置（任一处置方式以下简称“转让”）其拥有或持有的全部或部分知识产权（以下称“知识产权”，定义见第2.4条），甲方有权独家购买该等知识产权。From the date hereof, if Party B proposes to transfer, sell or dispose of (each, a “transfer”) all or any part of the intellectual property rights ownedor held by Party B (“IPR”), Party A shall have exclusive option.2.2若乙方有意转让全部或部分知识产权，应事先向甲方发出书面通知(“转让通知”)，转让通知应载明以下事项：(a) 乙方关于转让知识产权的意向；(b) 乙方拟转让的知识产权清单(“拟转让知识产权”)及转让的价格和其他条件。转让通知视为乙方向甲方发出的一份要约，按照该要约，乙方同意按转让通知中指定的价格条件向甲方转让全部或部分拟转让知识产权。Prior to Party B proposes to transfer all or any part of its IPR, Party B shall give Party A a written notice (“Transfer Notice”), which shall specify (a)Party B’s intention to make the transfer; (b) the list of IPR to be transferred (“Offered IPR”) and the consideration and other conditions uponwhich the transfer is to be made. The Transfer Notice constitutes Party B’s offer given to Party A, pursuant to which, Party B agrees to transfer allor any part of its Offered IPR to Party A based on the same conditions described in the Transfer Notice.7秘密文件Strictly Confidential2.3甲方收到转让通知后，有权在30日内选择按照转让通知中列明的转让价格和条件购买拟转让知识产权。如果甲方行使其独家购买权，双方应于甲方收到转让通知后45日内签订有关的知识产权转让协议，乙方应办理法律规定的知识产权转让的批准和登记手续。Party A shall have an option for a period of 30 days from Party A’s receipt of the Transfer Notice to elect to purchase the Offered IPR at the sameprice and subject to the same conditions as described in the Transfer Notice. If Party A decides to exercise its exclusive option, the parties shallenter into relevant IPR transfer agreement within 45 days upon Party A’s receipt of the Transfer Notice and Party B is responsible to complete allrelated approvals and registrations formalities as prescribed by the PRC law.2.4本协议第2条所称“知识产权”指任何知识产权，包括但不限于著作权、专利权、专利申请权、商标、域名、软件、专有技术，并包括前述知识产权申请权利以及登记注册的权利，以及其他所有与前述知识产权有关的权利和权益。The “IPR” referred to in this Article 2 means any intellectual property rights, including, without limitations, copyrights, patents, patentapplications, trademarks, domain names, software and knowhow together with (a) all rights to apply for or register any of the foregoing and (b) allother rights and interests to any of the foregoing.8秘密文件Strictly Confidential3.承诺Covenants3.1有关丙方的承诺Covenants regarding Party C乙方（作为丙方的股东）和丙方在此承诺：Party B (as the shareholders of Party C) and Party C hereby covenant as follows:3.1.1未经甲方的事先书面同意，不以任何形式补充、更改或修改丙方公司章程文件，增加或减少其注册资本，或以其他方式改变其注册资本结构；Without the prior written consent of Party A, they shall not in any manner supplement, change or amend the articles of association andbylaws of Party C, increase or decrease its registered capital, or change its structure of registered capital in other manners;3.1.2按照良好的财务和商业标准及惯例，保持其公司的存续，审慎地及有效地经营其业务和处理事务；They shall maintain Party C’s corporate existence in accordance with good financial and business standards and practices by prudentlyand effectively operating its business and handling its affairs;3.1.3未经甲方的事先书面同意，不在本协议签署之日起的任何时间出售、转让、抵押或以其他方式处置丙方的任何资产、业务或收入的合法或受益权益，或允许在其上设置任何其他担保权益；Without the prior written consent of Party A, they shall not at any time following the date hereof, sell, transfer, mortgage or dispose of inany manner any assets of Party C or legal or beneficial interest in the business or revenues of Party C, or allow the encumbrance thereonof any security interest;3.1.4未经甲方的事先书面同意，不发生、继承、保证或容许存在任何债务，但(i)正常或日常业务过程中产生而不是通过借款方式产生的债务；和(ii)已向甲方披露和得到甲方书面同意的债务除外；Without the prior written consent of Party A, they shall not incur, inherit, guarantee or suffer the existence of any debt, except for (i)debts incurred in the ordinary course of business other than through loans; and (ii) debts disclosed to Party A for which Party A’swritten consent has been obtained;9秘密文件Strictly Confidential3.1.5一直在正常业务过程中经营所有业务，以保持丙方的资产价值，不进行任何足以影响其经营状况和资产价值的作为/不作为；They shall always operate all of Party C’s businesses during the ordinary course of business to maintain the asset value of Party C andrefrain from any action/omission that may affect Party C’s operating status and asset value;3.1.6未经甲方的事先书面同意，不得让丙方签订任何重大协议，但在正常业务过程中签订的协议除外(就本段而言，如果一份协议的价值超过【人民币10万元】，即被视为重大协议)；Without the prior written consent of Party A, they shall not cause Party C to execute any major contract, except the contracts in theordinary course of business (for purpose of this subsection, a contract with a value exceeding RMB 100,000 shall be deemed a majorcontract);3.1.7未经甲方的事先书面同意，丙方不得向任何人提供贷款或信贷；Without the prior written consent of Party A, they shall not cause Party C to provide any person with any loan or credit;3.1.8应甲方要求，向其提供所有关于丙方的营运和财务状况的资料；They shall provide Party A with information on Party C’s business operations and financial condition at Party A’s request;10秘密文件Strictly Confidential3.1.9如甲方提出要求，丙方应从甲方接受的保险公司处购买和持有有关其资产和业务的保险，该保险的金额和险种应与经营类似业务的公司一致；If requested by Party A, they shall procure and maintain insurance in respect of Party C’s assets and business from an insurance carrieracceptable to Party A, at an amount and type of coverage typical for companies that operate similar businesses;3.1.10未经甲方的事先书面同意，丙方不得与任何人合并或联合，或对任何人进行收购或投资；Without the prior written consent of Party A, they shall not cause or permit Party C to merge, consolidate with, acquire or invest in anyperson;3.1.11将发生的或可能发生的与丙方资产、业务或收入有关的诉讼、仲裁或行政程序立即通知甲方；They shall immediately notify Party A of the occurrence or possible occurrence of any litigation, arbitration or administrative proceedingsrelating to Party C’s assets, business or revenue;3.1.12为保持丙方对其全部资产的所有权，签署所有必要或适当的文件，采取所有必要或适当的行动和提出所有必要或适当的控告或对所有索偿进行必要和适当的抗辩；To maintain the ownership by Party C of all of its assets, they shall execute all necessary or appropriate documents, take all necessary orappropriate actions and file all necessary or appropriate complaints or raise necessary and appropriate defenses against all claims;11秘密文件Strictly Confidential3.1.13未经甲方事先书面同意，不得以任何形式派发股息予各股东，但一经甲方要求，丙方应立即将其所有可分配利润全部立即分配给其各股东；及Without the prior written consent of Party A, they shall ensure that Party C shall not in any manner distribute dividends to itsshareholders, provided that upon Party A’s written request, Party C shall immediately distribute all distributable profits to itsshareholders; and3.1.14根据甲方的要求，委任由其指定的任何人士出任丙方的董事和/或执行董事。At the request of Party A, they shall appoint any persons designated by Party A as the director and/or executive director of Party C.3.2乙方和丙方的承诺Covenants of Party B and Party C乙方承诺：Party B hereby covenant as follows:3.2.1未经甲方的事先书面同意，不出售、转让、抵押或以其他方式处置其拥有的丙方的股权的合法或受益权益，或允许在其上设置任何其他担保权益，但根据乙方签署的《股权质押协议》在该股权上设置的质押则除外；Without the prior written consent of Party A, Party B shall not sell, transfer, mortgage or dispose of in any other manner any legal orbeneficial interest in the equity interests in Party C held by Party B, or allow the encumbrance thereon of any security interest, except forthe pledge placed on these equity interests in accordance with Party B’s Equity Interest Pledge Agreement;12秘密文件Strictly Confidential3.2.2促使丙方股东会和/或执行董事不批准在未经甲方的事先书面同意的情况下，出售、转让、抵押或以其他方式处置任何乙方持有之丙方的股权的合法权益或受益权，或允许在其上设置任何其他担保权益，但批准根据乙方签署的《股权质押协议》在乙方股权上设置的质押则除外；Party B shall cause the shareholders’ meeting and/or the executive director of Party C not to approve the sale, transfer, mortgage ordisposition in any other manner of any legal or beneficial interest in the equity interests in Party C held by Party B, or allow theencumbrance thereon of any security interest, without the prior written consent of Party A, except for the pledge placed on these equityinterests in accordance with Party B’s Equity Interest Pledge Agreement;3.2.3未经甲方的事先书面同意的情况下，对于丙方与任何人合并或联合，或对任何人进行收购或投资，乙方将促成丙方股东会或执行董事不予批准；Party B shall cause the shareholders’ meeting or the executive director of Party C not to approve the merger or consolidation with anyperson, or the acquisition of or investment in any person, without the prior written consent of Party A;3.2.4将发生的或可能发生的任何关于其所拥有的股权的诉讼、仲裁或行政程序立即通知甲方；Party B shall immediately notify Party A of the occurrence or possible occurrence of any litigation, arbitration or administrativeproceedings relating to the equity interests in Party C held by Party B;13秘密文件Strictly Confidential3.2.5促使丙方股东会或执行董事表决赞成本协议规定的被购买的股权的转让并应甲方之要求采取其他任何行动；Party B shall cause the shareholders’ meeting or the executive director of Party C to vote their approval of the transfer of the OptionedInterests as set forth in this Agreement and to take any and all other actions that may be requested by Party A;3.2.6为保持其对股权的所有权，签署所有必要或适当的文件，采取所有必要或适当的行动和提出所有必要或适当的控告或对所有索偿进行必要和适当的抗辩；To the extent necessary to maintain Party B’s ownership in Party C, Party B shall execute all necessary or appropriate documents, take allnecessary or appropriate actions and file all necessary or appropriate complaints or raise necessary and appropriate defenses against allclaims;3.2.7应甲方的要求，委任由其指定的任何人士出任丙方的董事和/或执行董事；Party B shall appoint any designee of Party A as the director and/or executive director of Party C, at the request of Party A;3.2.8经甲方随时要求，应向其指定的代表在任何时间无条件地根据本协议的股权购买权立即转让其股权，并放弃其对其他现有股东进行上述股权转让所享有的优先购买权（如有的话）；和At the request of Party A at any time, Party B shall promptly and unconditionally transfer its equity interests in Party C to Party A’sDesignee(s) in accordance with the Equity Interest Purchase Option under this Agreement, and Party B hereby waives its right of firstrefusal (if any) to the share transfer by the other existing shareholder of Party C (if any); and14秘密文件Strictly Confidential3.2.9严格遵守本协议及各方共同或分别签订的其他协议的各项规定，切实履行该等协议项下的各项义务，并不进行任何足以影响该等协议的有效性和可执行性的作为/不作为。如果乙方对于本协议项下或乙方股权质押协议下或对甲方的授权委托书中的股权，还留存有任何权利，除非甲方书面指示，否则乙方仍不得行使该权利。Party B shall strictly abide by the provisions of this Agreement and other contracts jointly or separately executed by and among Party B,Party C and Party A, perform the obligations hereunder and thereunder, and refrain from any action/omission that may affect theeffectiveness and enforceability thereof. To the extent that Party B has any remaining rights with respect to the equity interests subject tothis Agreement hereunder or under Party B’s Equity Interest Pledge Agreement or under the Power of Attorney granted in favor of PartyA, Party B shall not exercise such rights except in accordance with the written instructions of Party A.4.陈述和保证Representations and Warranties乙方和丙方特此在本协议签署之日和每一个转让日向甲方共同及分别陈述和保证如下：Party B and Party C hereby represent and warrant to Party A, jointly and severally, as of the date of this Agreement and each date of transfer of theOptioned Interests, that:4.1其具有签订和交付本协议和其为一方的、根据本协议为每一次转让被购买的股权而签订的任何股权转让协议(各称为"转让协议")，并履行其在本协议和任何转让协议项下的义务的权力和能力。乙方和丙方同意在甲方行使购买权时，他们将签署与本协议条款一致的转让协议。本协议和其是一方的各转让协议一旦签署后，构成或将对其构成合法、有效及具有约束力的义务并可按照其条款对其强制执行；They have the authority to execute and deliver this Agreement and any share transfer contracts to which they are a party concerning theOptioned Interests to be transferred thereunder (each, a “Transfer Contracts”), and to perform their obligations under this Agreement and anyTransfer Contracts. Party B and Party C agree to enter into Transfer Contracts consistent with the terms of this Agreement upon Party A’s exerciseof the Equity Interest Purchase Option. This Agreement and the Transfer Contracts to which they are a party constitute or will constitute theirlegal, valid and binding obligations and shall be enforceable against them in accordance with the provisions thereof;15秘密文件Strictly Confidential4.2无论是本协议或任何转让协议的签署和交付还是其在本协议或任何转让协议项下的义务的履行均不会：(i)导致违反任何有关的中国法律；(ii)与丙方章程或其他组织文件相抵触；(iii)导致违反其是一方或对其有约束力的任何协议或文件，或构成其是一方或对其有约束力的任何协议或文件项下的违约；(iv)导致违反有关向任何一方颁发的任何许可或批准的授予和(或)继续有效的任何条件；或(v)导致向任何一方颁发的任何许可或批准中止或被撤销或附加条件；The execution and delivery of this Agreement or any Transfer Contracts and the obligations under this Agreement or any Transfer Contracts shallnot: (i) cause any violation of any applicable laws of China; (ii) be inconsistent with the articles of association, bylaws or other organizationaldocuments of Party C; (iii) cause the violation of any contracts or instruments to which they are a party or which are binding on them, orconstitute any breach under any contracts or instruments to which they are a party or which are binding on them; (iv) cause any violation of anycondition for the grant and/or continued effectiveness of any licenses or permits issued to either of them; or (v) cause the suspension orrevocation of or imposition of additional conditions to any licenses or permits issued to either of them;4.3乙方对其在丙方拥有的股权拥有良好和可出售的所有权，除乙方签署的《股权质押协议》外，乙方在上述股权上没有设置任何担保权益；Party B have a good and merchantable title to the equity interests in Party C they hold. Except for Party B’s Equity Interest Pledge Agreement,Party B have not placed any security interest on such equity interests;16秘密文件Strictly Confidential4.4目前没有悬而未决的或构成威胁的与丙方的股权、丙方资产有关的或与丙方有关的诉讼、仲裁或行政程序。There are no pending or threatened litigation, arbitration or administrative proceedings relating to the equity interests in Party C, assets of Party Cor Party C.5.生效日Effective Date5.1本协议于各方签署本协议之日生效，有效期10年，经甲方选择可再延长10年。This Agreement shall become effective upon the date hereof, and remain effective for a term of 10 years, and may be renewed for an additional 10years at Party A’s election.5.2若丙方股东发生变化，由新股东签署此协议，在此协议签署之日，原协议自动视为无效。In the event of a change in the shareholders of Party C, the new shareholder should sign this agreement and the original agreement willautomatically be deemed invalid on the date of signing of this agreement.17秘密文件Strictly Confidential6.适用法律与争议解决Governing Law and Resolution of Disputes6.1适用法律Governing law本协议的订立、效力、解释、履行、修改和终止以及争议解决均适用中国正式公布并可公开得到的法律。对中国正式公布并可公开得到的法律没有规定的事项，将适用国际法律原则和惯例。The execution, effectiveness, construction, performance, amendment and termination of this Agreement and the resolution of disputes hereundershall be governed by the formally published and publicly available laws of China. Matters not covered by formally published and publiclyavailable laws of China shall be governed by international legal principles and practices.6.2争议的解决方法Methods of Resolution of Disputes因解释和履行本协议而发生的任何争议，本协议各方应首先通过友好协商的方式加以解决。如果在一方向其他方发出要求协商解决的书面通知后30天之内争议仍然得不到解决，则任何一方均可将有关争议提交给中国国际经济贸易仲裁委员会，由该会按照其届时有效的仲裁规则仲裁解决。仲裁应在北京进行，使用之语言为中文。仲裁裁决是终局性的，对各方均有约束力。In the event of any dispute with respect to the construction and performance of this Agreement, the Parties shall first resolve the dispute throughfriendly negotiations. In the event the Parties fail to reach an agreement on the dispute within 30 days after either Party’s request to the otherParties for resolution of the dispute through negotiations, either Party may submit the relevant dispute to the China International Economic andTrade Arbitration Commission for arbitration, in accordance with its then effective arbitration rules. The arbitration shall be conducted in Beijing,and the language used in arbitration shall be Chinese. The arbitration award shall be final and binding on all Parties.18秘密文件Strictly Confidential7.税款、费用Taxes and Fees每一方应承担根据中国法律因准备和签署本协议和各转让协议以及完成本协议和各转让协议拟定的交易而由该方发生的或对其征收的任何和全部的转让和注册的税、花费和费用。Each Party shall pay any and all transfer and registration tax, expenses and fees incurred thereby or levied thereon in accordance with the laws of China inconnection with the preparation and execution of this Agreement and the Transfer Contracts, as well as the consummation of the transactionscontemplated under this Agreement and the Transfer Contracts.8.通知Notices8.1本协议项下要求或发出的所有通知和其他通信应通过专人递送、挂号邮寄、邮资预付或商业快递服务或传真的方式发到该方下列地址。每一通知还应再以电子邮件送达。该等通知视为有效送达的日期按如下方式确定：All notices and other communications required or permitted to be given pursuant to this Agreement shall be delivered personally or sent byregistered mail, postage prepaid, by a commercial courier service or by facsimile transmission to the address of such Party set forth below. Aconfirmation copy of each notice shall also be sent by email. The dates on which notices shall be deemed to have been effectively given shall bedetermined as follows:8.1.1通知如果是以专人递送、快递服务或挂号邮寄、邮资预付发出的，则以于设定为通知的地址在接收或拒收之日为有效送达日。Notices given by personal delivery, by courier service or by registered mail, postage prepaid, shall be deemed effectively given on thedate of receipt or refusal at the address specified for notices.19秘密文件Strictly Confidential8.1.2通知如果是以传真发出的，则以成功传送之日为有效送达日（应以自动生成的传送确认信息为证）。Notices given by facsimile transmission shall be deemed effectively given on the date of successful transmission (as evidenced by anautomatically generated confirmation of transmission).8.2为通知的目的，各方地址如下：For the purpose of notices, the addresses of the Parties are as follows:甲方：中传天下信息科技（深圳）有限公司Party A:Zhongchuan Tianxia Information Technology (Shenzhen) Co., Ltd.地址：深圳市南山区高新中三道2号深圳软件园一期五栋401AAddress:401A, Building 5, Phase 1, Shenzhen Software Park, No.2 Gaoxin Zhongsan Road, Nanshan District, Shenzhen.收件人：洪婷Attn:Hong Ting乙方：Party B: 宋雪松Song Xuesong住所：天津市河西区广东路中裕园33702Address:Zhongyu Yuan 33702, Guangdong Road, Hexi District, Tianjin20秘密文件Strictly Confidential陈蔚力Chen Weili住所：广东省深圳市宝安区宝城上川路15号Address:Baocheng Shangchuan Road 15, Baoan District, Shenzhen, Guangdong王平Wang Ping住所：广东省深圳市南山区高新南环路36号彩虹之岸12栋4AAddress:Caihong Zhi’an Building No.12 Suite 4A, Gaoxin Nanhuan Road 36, Nanshan District, Shenzhen, Guangdong刘东来Liu Donglai住所：天津市和平区南京路诚基经贸中心1号楼2门1702号Address:No 1702, Door 2, Build 1, Chengji Economic and Trade Centre, Nanjing Road, Heping District, Tianjin.丙方：北京中传视讯科技有限公司Party C:Beijing Mobile Vision Technology Co., Ltd.地址：北京市朝阳区光华路9号SOHO3QLAB32Address: LAB32, SOHO3Q, No 9, Guanghua Road, Chaoyang District, Beijing .收件人：宋雪松Attn: Song Xuesong8.3任何一方可按本条规定随时给其他方发出通知来改变其接收通知的地址。Any Party may at any time change its address for notices by a notice delivered to the other Parties in accordance with the terms hereof.21秘密文件Strictly Confidential9.保密责任Confidentiality各方承认及确定彼此就有关本协议而交换的任何口头或书面资料均属机密资料。各方应当对所有该等资料予以保密，而在未得其他方书面同意前，不得向任何第三者披露任何有关资料，惟下列情况除外：(a)公众人士知悉或将会知悉该等资料(并非由接受资料之一方擅自向公众披露)；(b)适用法律法规或股票交易的规则或规例所需披露之资料；或(c)由任何一方就本协议所述交易而需向其法律或财务顾问披露之资料而该法律或财务顾问亦需遵守与本条款相类似之保密责任。如任何一方工作人员或聘请机构的泄密均视为该方的泄密，需依本协议承担违约责任。无论本协议以任何理由终止，本条款仍然生效。The Parties acknowledge that any oral or written information exchanged among them with respect to this Agreement is confidential information. Each Partyshall maintain the confidentiality of all such information, and without obtaining the written consent of other Parties, it shall not disclose any relevantinformation to any third parties, except in the following circumstances: (a) such information is or will be in the public domain (provided that this is not theresult of a public disclosure by the receiving party); (b) information disclosed as required by applicable laws or rules or regulations of any stock exchange;or (c) information required to be disclosed by any Party to its legal counsel or financial advisor regarding the transaction contemplated hereunder, and suchlegal counsel or financial advisor are also bound by confidentiality duties similar to the duties in this section. Disclosure of any confidential information bythe staff members or agency hired by any Party shall be deemed disclosure of such confidential information by such Party, which Party shall be held liablefor breach of this Agreement. This Section shall survive the termination of this Agreement for any reason.22秘密文件Strictly Confidential10.进一步保证Further Warranties各方同意迅速签署为执行本协议的各项规定和目的而合理需要的或对其有利的文件，以及为执行本协议的各项规定和目的而采取合理需要的或对其有利的进一步行动。The Parties agree to promptly execute documents that are reasonably required for or are conducive to the implementation of the provisions and purposes ofthis Agreement and take further actions that are reasonably required for or are conducive to the implementation of the provisions and purposes of thisAgreement.11.其他Miscellaneous11.1修订、修改与补充Amendment, change and supplement对本协议作出修订、修改与补充，必须经每一方签署书面协议。Any amendment, change and supplement to this Agreement shall require the execution of a written agreement by all of the Parties.11.2完整协议Entire agreement除了在本协议签署后所作出的书面修订、补充或修改以外，本协议构成本协议各方就本协议标的物所达成的完整协议，取代在此之前就本协议标的物所达成的所有口头或书面的协商、陈述和协议。 Except for the amendments, supplements or changes in writing executed after theexecution of this Agreement, this Agreement shall constitute the entire agreement reached by and among the Parties hereto with respect to thesubject matter hereof, and shall supercede all prior oral and written consultations, representations and contracts reached with respect to thesubject matter of this Agreement.23秘密文件Strictly Confidential11.3标题Headings本协议的标题仅为方便阅读而设，不应被用来解释、说明或在其他方面影响本协议各项规定的含义。The headings of this Agreement are for convenience only, and shall not be used to interpret, explain or otherwise affect the meanings of theprovisions of this Agreement.11.4语言Language本协议以中文和英文书就，一式八份，乙方共计六名股东以及甲方、丙方各持一份，具有同等效力；中英文版本如有冲突，应以中文版为准。This Agreement is written in both Chinese and English language in eight copies, the 6 shareholders of Party B, Party A and Party C having onecopy with equal legal validity respectively; in case there is any conflict between the Chinese version and the English version, the Chinese versionshall prevail.11.5可分割性Severability如果本协议有任何一条或多条规定根据任何法律或法规在任何方面被裁定为无效、不合法或不可执行，本协议其余规定的有效性、合法性或可执行性不应因此在任何方面受到影响或损害。各方应通过诚意磋商，争取以法律许可以及各方期望的最大限度内有效的规定取代那些无效、不合法或不可执行的规定，而该等有效的规定所产生的经济效果应尽可能与那些无效、不合法或不能强制执行的规定所产生的经济效果相似。In the event that one or several of the provisions of this Agreement are found to be invalid, illegal or unenforceable in any aspect in accordancewith any laws or regulations, the validity, legality or enforceability of the remaining provisions of this Agreement shall not be affected orcompromised in any respect. The Parties shall strive in good faith to replace such invalid, illegal or unenforceable provisions with effectiveprovisions that accomplish to the greatest extent permitted by law and the intentions of the Parties, and the economic effect of such effectiveprovisions shall be as close as possible to the economic effect of those invalid, illegal or unenforceable provisions.24秘密文件Strictly Confidential11.6继任者Successors本协议对各方各自的继任者和各方所允许的受让方应具有约束力并对其有利。This Agreement shall be binding on and shall inure to the interest of the respective successors of the Parties and the permitted assigns of suchParties.11.7继续有效Survival11.7.1协议期满或提前终止前因本协议而发生的或到期的任何义务在本协议期满或提前终止后继续有效。Any obligations that occur or that are due as a result of this Agreement upon the expiration or early termination of this Agreement shallsurvive the expiration or early termination thereof.11.7.2本协议第5、6、9条和本第11.7条的规定在本协议终止后继续有效。The provisions of Articles 5, 6, 9 and this Section 11.7 shall survive the termination of this Agreement.25秘密文件Strictly Confidential11.8弃权Waivers任何一方可以对本协议的条款和条件作出弃权，但必须经书面作出并经各方签字。一方在某种情况下就其他方的违约所作的弃权不应被视为该方在其他情况下就类似的违约已经对其他方作出弃权。Any Party may waive the terms and conditions of this Agreement, provided that such a waiver must be provided in writing and shall require thesignatures of the Parties. No waiver by any Party in certain circumstances with respect to a breach by other Parties shall operate as a waiver bysuch a Party with respect to any similar breach in other circumstances.本页其余部分刻意留为空白The Remainder of this page is intentionally left blank26秘密文件Strictly Confidential有鉴于此，各方已自行或使得其各自授权代表于文首所载日期签署本独家购买权协议。IN WITNESS WHEREOF, the Parties have executed, or caused their respective duly authorized representatives to execute, this Exclusive Option Agreement as ofthe date first above written.甲方：中传天下信息科技（深圳）有限公司（盖章）Party A: Zhongchuan Tianxia Information Technology (Shenzhen) Co., Ltd. (Seal)签字：By:/s/ Hong Ting姓名：洪婷Name: Hong Ting职务：总经理Title: General Manager秘密文件 Strictly Confidential有鉴于此，各方已自行或使得其各自授权代表于文首所载日期签署本独家购买权协议。IN WITNESS WHEREOF, the Parties have executed, or caused their respective duly authorized representatives to execute, this Exclusive Option Agreement as ofthe date first above written.乙方：Party B:宋雪松Song Xuesong签字：By:/s/ Song Xuesong秘密文件 Strictly Confidential有鉴于此，各方已自行或使得其各自授权代表于文首所载日期签署本独家购买权协议。IN WITNESS WHEREOF, the Parties have executed, or caused their respective duly authorized representatives to execute, this Exclusive Option Agreement as ofthe date first above written.乙方：Party B:陈蔚力Chen Weili签字：By:/s/ Chen Weili秘密文件 Strictly Confidential有鉴于此，各方已自行或使得其各自授权代表于文首所载日期签署本独家购买权协议。IN WITNESS WHEREOF, the Parties have executed, or caused their respective duly authorized representatives to execute, this Exclusive Option Agreement as ofthe date first above written.乙方：Party B:王平Wang Ping签字：By:/s/ Wang Ping秘密文件 Strictly Confidential有鉴于此，各方已自行或使得其各自授权代表于文首所载日期签署本独家购买权协议。IN WITNESS WHEREOF, the Parties have executed, or caused their respective duly authorized representatives to execute, this Exclusive Option Agreement as ofthe date first above written.乙方：Party B:刘东来Liu Donglai签字：By:/s/ Liu Donglai秘密文件 Strictly Confidential有鉴于此，各方已自行或使得其各自授权代表于文首所载日期签署本独家购买权协议。IN WITNESS WHEREOF, the Parties have executed, or caused their respective duly authorized representatives to execute, this Exclusive Option Agreement as ofthe date first above written.丙方：北京中传视讯科技有限公司（盖章）Party B: Beijing Mobile Vision Technology Co., Ltd. (Seal)签字：By:/s/ Song Xuesong姓名：宋雪松Name:Song Xuesong职务：董事长Title:Chairman of the Board秘密文件 Strictly ConfidentialEX4.17 5 f20f2017ex417_luokung.htm EQUITY INTEREST PLEDGE AGREEMENT BY AND AMONG ZHONGCHUAN TIANXIA INFORMATION TECHNOLOGY(SHENZHEN) CO., LTD., XUESONG SONG, WEILI CHEN, PING WANG, DONGLAI LIU, AND BEIJING MOBILE VISION TECHNOLOGY CO., LTD., DATEDAUGUST 31, 2015Exhibit 4.17股权质押协议Equity Interest Pledge Agreement本股权质押协议（下称"本协议”）由下列各方于年月日在中华人民共和国（下称“中国”）北京签订：This Equity Interest Pledge Agreement (this "Agreement") has been executed by and among the following parties on in Beijing, the People’sRepublic of China (the “China” or “PRC”):甲方：中传天下信息科技（深圳）有限公司（下称“质权人”）Party A: Zhongchuan Tianxia Information Technology (Beijing) Co., Ltd. (“Pledgee”)地址：深圳市南山区高新中三道2号深圳软件园一期五栋401AAddress: 401A, Building 5, Phase 1, Shenzhen Software Park, No.2 Gaoxin Zhongsan Road, Nanshan District, Shenzhen统一社会信用代码： 91440300565701058RUniform Social Credit Code: 91440300565701058R乙方(下称“出质人”)：Party B ( “Pledgors”):a)宋雪松Song Xuesong身份证号码:ID Card No.:b)陈蔚力Chen Weili身份证号码:ID Card No.:1秘密文件 Strictly Confidentialc)王平Wang Ping身份证号码:ID Card No.:d)刘东来Liu Donglai身份证号码:ID Card No.:丙方：北京中传视讯科技有限公司Party C: Beijing Mobile Vision Technology Co., Ltd.地址：北京市朝阳区光华路9号SOHO3QLAB32Address: LAB32, SOHO3Q, No 9, Guanghua Road, Chaoyang District, Beijing统一社会信用代码：9111010576215249XMUniform Social Credit Code: 9111010576215249XM在本协议中，质权人、出质人和丙方以下各称“一方”，合称“各方”。In this Agreement, each of Pledgee, Pledgors and Party C shall be referred to as a "Party" respectively, and they shall be collectively referred to as the"Parties".鉴于：Whereas:1．出质人全部为中国境内居民自然人，共同持有丙方100%的股权。丙方是一家在中国注册成立的、主要从事手机视频技术研发、内容制作和产业化市场推广的有限责任公司。丙方有意在此确认出质人和质权人在本协议下的权利和义务并提供必要的协助登记该质权；All of the Pledgors are natural persons resided in PRC, and collectively hold 100% of the equity interest in Party C. Party C is a limited company registered inChina, mainly engaging in mobile video frequency technology research, development, content creation, sale and related industrialization promotion. Party Cacknowledges the respective rights and obligations of Pledgors and Pledgee under this Agreement, and intends to provide any necessary assistance inregistering the Pledge;2．质权人是一家在中国注册的外商独资企业。质权人与丙方于年月日签订了独家业务合作协议；Pledgee is a whollyforeignowned enterprise registered in China. Pledgee and Party C have executed an Exclusive Business Cooperation Agreement as of [*],[*];3．为了保证丙方全面履行独家业务合作协议项下的义务，出质人以其拥有的全部丙方股权向质权人做出质押担保。To ensure that Party C fully performs its obligations under the Exclusive Business Cooperation Agreement, Pledgors hereby pledge to the Pledgee all of theequity interests they hold in Party C.为了履行业务合作协议的条款，各方商定按照以下条款签订本协议。To perform the provisions of the Business Cooperation Agreement, the Parties have mutually agreed to execute this Agreement upon the following terms.2秘密文件 Strictly Confidential1.定义Definitions除非本协议另有规定，下列词语含义为：Unless otherwise provided herein, the terms below shall have the following meanings:1.1质权：指出质人根据本协议第2条给予质权人的担保物权，即指质权人所享有的，以出质人质押给质权人的股权折价或拍卖、变卖该股权的价款优先受偿的权利。Pledge: shall refer to the security interest granted by Pledgors to Pledgee pursuant to Article 2 of this Agreement, i.e., the right of Pledgee to becompensated on a preferential basis with the conversion, auction or sales price of the Equity Interest.1.2股权：指出质人现在和将来（通过增资和/或转股）合法持有的其在丙方的全部股权权益。Equity Interest: shall refer to all of the equity interest in Party C lawfully, held now and to be held (through capital increase and/or equity transfer)hereafter by Pledgors.1.3质押期限：指本协议第3条规定的期间。Term of Pledge: shall refer to the term set forth in Article 3 of this Agreement.1.4业务合作协议：指丙方与质权人于本协议日签订的独家业务合作协议。Business Cooperation Agreement: shall refer to the Exclusive Business Cooperation Agreement executed by and between Party C and Pledgee on thedate of this Agreement.1.5违约事件：指本协议第7条所列任何情况。Event of Default: shall refer to any of the circumstances set forth in Article 7 of this Agreement.1.6违约通知：指质权人根据本协议发出的宣布违约事件的通知。Notice of Default: shall refer to the notice issued by Pledgee in accordance with this Agreement declaring an Event of Default.3秘密文件 Strictly Confidential2.质权The Pledge作为丙方按时和全额支付业务合作协议项下质权人应得的任何或全部的款项，包括但不限于业务合作协议中规定的咨询和服务费的担保（无论该等费用的到期应付是由于到期日的到来、提前收款的要求或其它原因），以及丙方充分履行其在业务合作协议项下其他所有义务（丙方按时和全额支付业务合作协议项下甲方应得的任何或全部的款项及丙方在业务合作协议项下其他所有义务，以下统称为“被担保债务”）的担保，出质人特此将其现有或将拥有的丙方的全部股权权益质押给质权人。As collateral security for the timely and complete payment and performance when due (whether at stated maturity, by acceleration or otherwise) of any or all ofthe payments due (the “all payments in pledge”) by Party C, including without limitation the consulting and services fees payable to the Pledgee under theBusiness Cooperation Agreement, Pledgors hereby pledge to Pledgee a first security interest in all of Pledgors’ right, title and interest, whether now owned orhereafter acquired by Pledgors, in the Equity Interest of Party C.3.质押期限Term of Pledge3.1本质权自本协议项下的股权出质在相应的工商行政管理机关登记之日起生效，质权有效期持续到业务合作协议下所有丙方欠付质权人的款项结清为止。出质人和丙方应（一）自本协议签署之日起3个工作日内，将本协议的质权登记在丙方股东名册上，并（二）自本协议签署之日起10个工作日内向相应的工商行政管理机关申请登记本协议项下的质权。各方共同确认，为办理股权质押工商登记手续，各方及丙方其他股东应按照丙方所在地工商行政管理部门要求的形式签署、真实反映本协议项下质权信息的《股权质押合同》（以下简称“工商登记质押合同”）提交给工商管理机关，工商登记质押合同中未约定事项，仍以本协议约定为准。出质人和丙方应当按照中国法律法规和有关工商行政管理机关的各项要求，提交所有必要的文件并办理所有必要手续，保证质权在递交申请后尽快获得登记。如果出质人持有的丙方注册资本数额增加（不管是通过直接认缴丙方的增资还是从其他股东处受让股权），各方一致同意将采取一切必要的行动和签署一切必要的文件以按照登记机关的要求完成质权的变更登记，以确保本协议项下的质权的持续有效。The Pledge shall become effective on such date when the pledge of the Equity Interest contemplated herein has been registered’ with relevantadministration for industry and commerce (the “AIC”). The Pledge shall be continuously valid until all payments due under the Business CooperationAgreement have been fulfilled by Party C. Pledgors and Party C shall (1) register the Pledge in the shareholders' register of Party C within 3 businessdays following the execution of this Agreement, and (2) submit an application to the AIC for the registration of the Pledge of the Equity Interestcontemplated herein within 10 business days following the execution of this Agreement. The parties covenant that for the purpose of registration of thePledge, the parties hereto and all other shareholders of Party C shall submit to the AIC the Equity Interest Pledge Contract in the form required by theAIC at the location of Party C which shall truly reflect the information of the Pledge hereunder (the “AIC Pledge Contract”). For matters not specified inthe AIC Pledge Contract, the parties shall be bound by the provisions of this Agreement. Pledgors and Party C shall submit all necessary documentsand complete all necessary procedures, as required by the PRC laws and regulations and the relevant AIC, to ensure that the Pledge of the EquityInterest shall be registered with the AIC as soon as possible after filing. In the event that the amount of registered capital held by Pledgors is increased(either by subscribing increased registered capital from Party C or acquiring equity interest from other shareholders), the Parties hereto agree that theyshall take any necessary action and execute any necessary document to complete the registration of change of Pledge according to the requirement ofAIC so that the Pledge in this Agreement remains effective.4秘密文件 Strictly Confidential3.2质押期限内，如丙方未按业务合作协议交付咨询服务费等费用，质权人有权但无义务按本协议的规定处分质权。During the Term of Pledge, in the event Party C fails to pay the exclusive consulting or service fees in accordance with the Business CooperationAgreement, Pledgee shall have the right, but not the obligation, to dispose of the Pledge in accordance with the provisions of this Agreement.4.质权凭证的保管Custody of Records for Equity Interest subject to Pledge4.1在本协议规定的质押期限内，出质人应将其在丙方的股权出资证明书及记载质权的股东名册交付质权人保管。出质人应在本协议签订之日起一周内将上述股权出资证明书及股东名册交付给质权人。质权人将在本协议规定的全部质押期间一直保管这些项目。During the Term of Pledge set forth in this Agreement, Pledgors shall deliver to Pledgee's custody the capital contribution certificate for the EquityInterest and the shareholders' register containing the Pledge within one week from the execution of this Agreement. Pledgee shall have custody of suchitems during the entire Term of Pledge set forth in this Agreement.4.2在质押期限内，股权所产生的红利应当无条件归质权人所有。Dividends generated by the Equity Interest shall be unconditionally owned by the Pledgee during the Term of Pledge.5秘密文件 Strictly Confidential5.出质人的声明和保证Representations and Warranties of Pledgors5.1出质人是股权唯一的合法所有人。Pledgors are the sole legal and beneficial owners of the Equity Interest.5.2质权人有权以本协议规定的方式处分并转让股权。Pledgee shall have the right to dispose of and transfer the Equity Interest in accordance with the provisions set forth in this Agreement.5.3除本质权之外，出质人未在股权上设置任何其他质押权利或其他担保权益。Except for the Pledge, Pledgors have not placed any security interest or other encumbrance on the Equity Interest.6.出质人的承诺和确认Covenants and Further Agreements of Pledgors6.1在本协议存续期间，所有出质人向质权人承诺，出质人将：All of the Pledgors hereby covenant to the Pledgee, that during the term of this Agreement, Pledgors shall:6.1.1除履行由出质人与质权人、丙方于本协议签署日签订的《独家购买权合同》外，未经质权人事先书面同意，不得转让股权，不得在股权上设立或允许存在任何担保或其他债务负担；not transfer the Equity Interest, place or permit the existence of any security interest or other encumbrance on the Equity Interest, without theprior written consent of Pledgee, except for the performance of the Exclusive Option Agreement executed by Pledgors, the Pledgee and Party Con the execution date of this Agreement;6秘密文件 Strictly Confidential6.1.2遵守并执行所有有关权利质押的法律、法规的规定，在收到有关主管机关就质权发出或制定的通知、指令或建议时，于五日内向质权人出示上述通知、指令或建议，同时遵守上述通知、指令或建议，或按照质权人的合理要求或经质权人同意就上述事宜提出反对意见和陈述；comply with the provisions of all laws and regulations applicable to the pledge of rights, and within 5 days of receipt of any notice, order orrecommendation issued or prepared by relevant competent authorities regarding the Pledge, shall present the aforementioned notice, order orrecommendation to Pledgee, and shall comply with the aforementioned notice, order or recommendation or submit objections andrepresentations with respect to the aforementioned matters upon Pledgee's reasonable request or upon consent of Pledgee;6.1.3将任何可能导致对出质人股权或其任何部分的权利产生影响的事件或收到的通知，以及可能改变出质人在本协议中的任何保证、义务或对出质人履行其在本协议中义务可能产生影响的任何事件或收到的通知及时通知质权人。promptly notify Pledgee of any event or notice received by Pledgors that may have an impact on Pledgee's rights to the Equity Interest or anyportion thereof, as well as any event or notice received by Pledgors that may have an impact on any guarantees and other obligations ofPledgors arising out of this Agreement.6.2出质人同意，质权人按本协议条款取得的对质权享有的权利，不应受到出质人或出质人的继承人或出质人之委托人或任何其他人通过法律程序的中断或妨害。Pledgors agree that the rights acquired by Pledgee in accordance with this Agreement with respect to the Pledge shall not be interrupted or harmed byPledgors or any heirs or representatives of Pledgors or any other persons through any legal proceedings.7秘密文件 Strictly Confidential6.3出质人向质权人保证，为保护或完善本协议对偿付业务合作协议项下被担保债务的担保，出质人将诚实签署、并促使其他与质权有利害关系的当事人签署质权人所要求的所有的权利证书、契约和/或履行并促使其他有利害关系的当事人履行质权人所要求的行为，并为本协议赋予质权人之权利、授权的行使提供便利，与质权人或其指定的人(自然人/法人)签署所有的有关股权所有权的文件，并在合理期间内向质权人提供其认为需要的所有的有关质权的通知、命令及决定。To protect or perfect the security interest granted by this Agreement for payment of all payment in pledge under the Business Cooperation Agreement,Pledgors hereby undertake to execute in good faith and to cause other parties who have an interest in the Pledge to execute all certificates, agreements,deeds and/or covenants required by Pledgee. Pledgors also undertake to perform and to cause other parties who have an interest in the Pledge toperform actions required by Pledgee, to facilitate the exercise by Pledgee of its rights and authority granted thereto by this Agreement, and to enter intoall relevant documents regarding ownership of Equity Interest with Pledgee or designee(s) of Pledgee (natural persons/legal persons). Pledgorsundertake to provide Pledgee within a reasonable time with all notices, orders and decisions regarding the Pledge that are required by Pledgee.6.4出质人向质权人保证，出质人将遵守、履行本协议项下所有的保证、承诺、协议、陈述及条件。如出质人不履行或不完全履行其保证、承诺、协议、陈述及条件，出质人应赔偿质权人由此遭受的一切损失。Pledgors hereby undertake to comply with and perform all guarantees, promises, agreements, representations and conditions under this Agreement. Inthe event of failure the whole or partial performance of its guarantees, promises, agreements, representations and conditions, Pledgors shall indemnifyPledgee for all losses resulting therefrom.8秘密文件 Strictly Confidential7.违约事件Event of Default7.1下列事项均被视为违约事件：The following circumstances shall be deemed Event of Default:7.1.1丙方未能按期、完整履行任何业务合作协议项下责任，包括但不限于丙方未能按期足额支付业务合作协议项下的应付的被担保债务或有违反该协议其他义务的行为；Party C fails to fully and timely fulfill any liabilities under the Business Cooperation Agreement, including without limitation failure to pay infull any of the all payment in pledge payable under the Business Cooperation Agreement or breaches any other obligations of Party Cthereunder;7.1.2出质人或丙方实质违反本协议的任何条款；Pledgors or Party C have committed a material breach of any provisions of this Agreement;7.1.3除本协议第6.1.1条的约定外，出质人舍弃出质的股权或未获得质权人书面同意而擅自转让或意图转让出质的股权；和Except as expressly stipulated in Section 6.1.1, Pledgors transfers or purports to transfer or abandons the Equity Interest pledged or assignsthe Equity Interest pledged without the written consent of Pledgee; and7.1.4丙方的继承人或代管人只能履行部分或拒绝履行业务合作协议项下的支付责任。The successor or custodian of Party C is capable of only partially perform or refuses to perform the payment obligations under the BusinessCooperation Agreement.9秘密文件 Strictly Confidential7.2如知道或发现本第7.1条所述的任何事项或可能导致上述事项的事件已经发生，出质人应立即以书面形式通知质权人。Upon notice or discovery of the occurrence of any circumstances or event that may lead to the aforementioned circumstances described in Section 7.1,Pledgors shall immediately notify Pledgee in writing accordingly.7.3除非第7.1部分下的违约事件在质权人向出质人发出要求其修补此违约行为通知后的二十（20）天之内已经按质权人要求获得救济，质权人在其后的任何时间，可向出质人发出书面违约通知，要求依据第8部分履行其处理股权的权利。Unless an Event of Default set forth in this Section 7.1 has been successfully resolved to Pledgee's satisfaction within twenty (20) days after the Pledgeedelivers a notice to the Pledgors requesting ratification of such Event of Default, Pledgee may issue a Notice of Default to Pledgors in writing at any timethereafter, demanding the Pledgors to immediately dispose of the Pledge in accordance with the provisions of Article 8 of this Agreement.8.质权的行使Exercise of Pledge8.1在被担保债务被全部清偿或履行前，未经质权人书面同意，出质人不得转让本质权和其拥有的丙方股权。Prior to the full payment of all payments in pledge, without the Pledgee's written consent, Pledgors shall not assign the Pledge or the Equity Interest inParty C.8.2在质权人行使其质押权利时，质权人可以向出质人发出书面违约通知。Pledgee may issue a Notice of Default to Pledgors when exercising the Pledge.10秘密文件 Strictly Confidential8.3在质权人行使其质押权利时，根据中国有关法律的规定，质权人有权按照法定程序处置质押股权。仅在中国法律允许的范围内，对于处置的所得，质权人无需给付出质人；除非中国法律另有规定，出质人特此放弃其可能有的能向质权人要求任何质押股权处置所得的权利；同样，出质人对质权人在该质押股权处置后的亏损也不承担任何义务。When the Pledgor exercises the pledge right, Pledgee is entitled to dispose of the Equity Interest pledged in accordance with applicable PRC laws. Onlyto the extent permitted under applicable PRC laws, Pledgee has no obligation to account to Pledgors for proceeds of disposition of the Equity Interest.Unless otherwise required by PRC laws, Pledgors hereby waive any rights it may have to demand any such accounting from Pledgee; Likewise, in suchcircumstance Pledgors shall have no obligation to Pledgee for any deficiency remaining after such disposition of the Equity Interest pledged.8.4质权人依照本协议处分质权时，出质人和丙方应予以必要的协助，以使质权人实现其质权。When Pledgee disposes of the Pledge in accordance with this Agreement, Pledgors and Party C shall provide necessary assistance to enable Pledgee toenforce the Pledge in accordance with this Agreement.9.转让Assignment9.1除非经质权人事先同意，出质人无权赠予或转让其在本协议项下的权利义务。Without Pledgee's prior written consent, Pledgors shall not have the right to assign or delegate its rights and obligations under this Agreement.11秘密文件 Strictly Confidential9.2本协议对出质人及其继任人和经许可的受让人均有约束力，并且对质权人及每一继任人和受让人有效。This Agreement shall be binding on Pledgors and their successors and permitted assigns, and shall be valid with respect to Pledgee and each of itssuccessors and assigns.9.3经出质人同意，质权人可以在任何时候将其在业务合作协议项下的所有或任何权利和义务转让给其指定的关联方（自然人/法人），在这种情况下，受让人应享有和承担本协议项下质权人享有和承担的权利和义务，如同其作为原协议方应享有和承担的一样。质权人转让业务合作协议项下的权利和义务时，应质权人要求，出质人应就此转让签署有关协议和/或文件。Upon the Pledgors’ agreement, Pledgee may assign any or all of its rights and obligations under the Business Cooperation Agreement to its designee(s)(natural/legal persons) at any time, in which case the assigns shall have the rights and obligations of Pledgee under this Agreement, as if it were theoriginal party to this Agreement. When the Pledgee assigns the rights and obligations under the Business Cooperation Agreement, upon Pledgee'srequest, Pledgors shall execute relevant agreements or other documents relating to such assignment.9.4因转让所导致的质权人变更后，应质权人要求，出质人应与新的质权人签订一份内容与本协议一致的新质押协议，并在相应的工商行政管理机关进行登记。In the event of a change in Pledgee due to an assignment, Pledgors shall, at the request of Pledgee, execute a new pledge agreement with the newpledgee on the same terms and conditions as this Agreement, and register the same with the relevant AIC.12秘密文件 Strictly Confidential9.5出质人应严格遵守本协议和各方单独或共同签署的其他有关协议的规定，包括独家购买权合同和对质权人的授权委托书，履行各协议项下的义务，并不进行任何足以影响协议的有效性和可强制执行性的作为/不作为。除非根据质权人的书面指示，出质人不得行使其对质押股权还留存的权利。Pledgors shall strictly abide by the provisions of this Agreement and other contracts jointly or separately executed by the Parties hereto or any of them,including the Exclusive Option Agreement and the Power of Attorney granted to Pledgee, perform the obligations hereunder and thereunder, and refrainfrom any action/omission that may affect the effectiveness and enforceability thereof. Any remaining rights of Pledgors with respect to the EquityInterest pledged hereunder shall not be exercised by Pledgors except in accordance with the written instructions of Pledgee.10.终止Termination在被担保债务被全部清偿或履行完毕之后，本质权人应在尽早合理可行的时间内办理或配合办理解除质押的手续，出质人与丙方应提供相应的配合与协助。Upon the full payment of all payments in pledge under the Business Cooperation Agreement a, Pledgor shall then, with the assistance of Party B and Party C,go through the procedures of cancellation of pledge rights at a reasonable time as soon as practicable.11.手续费及其他费用Handling Fees and Other Expenses一切与本协议有关的费用及实际开支，其中包括但不限于法律费用、工本费、印花税以及任何其他税收、费用等全部由丙方承担。All fees and out of pocket expenses relating to this Agreement, including but not limited to legal costs, costs of production, stamp tax and any other taxes andfees, shall be borne by Party C.13秘密文件 Strictly Confidential12.保密责任Confidentiality各方承认及确定有关本协议、本协议内容，以及彼此就准备或履行本协议而交换的任何口头或书面资料均被视为保密信息。各方应当对所有该等保密信息予以保密，而在未得到另一方书面同意前，不得向任何第三者披露任何保密信息，惟下列信息除外：(a)公众人士知悉或将会知悉的任何信息（惟并非由接受保密信息之一方擅自向公众披露）；(b)根据适用法律法规、股票交易规则、或政府部门或法院的命令而所需披露之任何信息；或(c)由任何一方就本协议所述交易而需向其股东、投资者、法律或财务顾问披露之信息，而该股东、法律或财务顾问亦需遵守与本条款相类似之保密责任。如任何一方工作人员或聘请机构的泄密均视为该方的泄密，需依本协议承担违约责任。无论本协议以任何理由终止，本条款仍然生效。The Parties acknowledge that the existence and the terms of this Agreement and any oral or written information exchanged between the Parties in connectionwith the preparation and performance this Agreement are regarded as confidential information. Each Party shall maintain confidentiality of all such confidentialinformation, and without obtaining the written consent of the other Party, it shall not disclose any relevant confidential information to any third parties, exceptfor the information that: (a) is or will be in the public domain (other than through the receiving Party’s unauthorized disclosure); (b) is under the obligation tobe disclosed pursuant to the applicable laws or regulations, rules of any stock exchange, or orders of the court or other government authorities; or (c) isrequired to be disclosed by any Party to its shareholders, investors, legal counsels or financial advisors regarding the transaction contemplated hereunder,provided that such shareholders, investors, legal counsels or financial advisors shall be bound by the confidentiality obligations similar to those set forth inthis Section. Disclosure of any confidential information by the staff members or agencies hired by any Party shall be deemed disclosure of such confidentialinformation by such Party, which Party shall be held liable for breach of this Agreement. This Section shall survive the termination of this Agreement for anyreason.14秘密文件 Strictly Confidential13.适用法律和争议的解决Governing Law and Resolution of Disputes13.1本协议的订立、效力、解释、履行、修改和终止以及争议的解决均适用中国法律。The execution, effectiveness, construction, performance, amendment and termination of this Agreement and the resolution of disputes hereunder shallbe governed by the laws of China.13.2因解释和履行本协议而发生的任何争议，本协议各方应首先通过友好协商的方式加以解决。如果在一方向其他方发出要求协商解决的书面通知后30天之内争议仍然得不到解决，则任何一方均可将有关争议提交给中国国际经济贸易仲裁委员会，由该会按照其仲裁规则仲裁解决。仲裁应在北京进行，使用之语言为中文。仲裁裁决是终局性的，对各方均有约束力。In the event of any dispute with respect to the construction and performance of this Agreement, the Parties shall first resolve the dispute throughfriendly negotiations. In the event the Parties fail to reach an agreement on the dispute within 30 days after either Party's request to the other Parties forresolution of the dispute through negotiations, either Party may submit the relevant dispute to the China International Economic and Trade ArbitrationCommission for arbitration, in accordance with its Arbitration Rules. The arbitration shall be conducted in Beijing, and the language used in arbitrationshall be Chinese. The arbitration award shall be final and binding on all Parties.13.3因解释和履行本协议而发生任何争议或任何争议正在进行仲裁时，除争议的事项外，本协议各方仍应继续行使各自在本协议项下的其他权利并履行各自在本协议项下的其他义务。Upon the occurrence of any disputes arising from the construction and performance of this Agreement or during the pending arbitration of any dispute,except for the matters under dispute, the Parties to this Agreement shall continue to exercise their respective rights under this Agreement and performtheir respective obligations under this Agreement.15秘密文件 Strictly Confidential14.通知Notices14.1本协议项下要求或发出的所有通知和其他通信应通过专人递送、挂号邮寄、邮资预付或商业快递服务或传真的方式发到该方下列地址。每一通知还应再以电子邮件送达。该等通知视为有效送达的日期按如下方式确定：All notices and other communications required or permitted to be given pursuant to this Agreement shall be delivered personally or sent by registeredmail, postage prepaid, by a commercial courier service or by facsimile transmission to the address of such party set forth below. A confirmation copy ofeach notice shall also be sent by Email. The dates on which notices shall be deemed to have been effectively given shall be determined as follows:14.1.1通知如果是以专人递送、快递服务或挂号邮寄、邮资预付发出的，则以于设定为通知的地址在接收或拒收之日为有效送达日。Notices given by personal delivery, by courier service or by registered mail, postage prepaid, shall be deemed effectively given on the date ofreceipt or refusal at the address specified for notices.14.1.2通知如果是以传真发出的，则以成功传送之日为有效送达日（应以自动生成的传送确认信息为证）。Notices given by facsimile transmission shall be deemed effectively given on the date of successful transmission (as evidenced by anautomatically generated confirmation of transmission).16秘密文件 Strictly Confidential14.2为通知的目的，各方地址如下：For the purpose of notices, the addresses of the Parties are as follows:甲方：中传天下信息科技（深圳）有限公司Party A: Zhongchuan Tianxia Information Technology (Shenzhen) Co., Ltd.地址：深圳市南山区高新中三道2号深圳软件园一期五栋401AAddress: 401A, Building 5, Phase 1, Shenzhen Software Park, No.2 Gaoxin Zhongsan Road, Nanshan District, Shenzhen.收件人：洪婷Attn: Hong Ting乙方：Party B:a)宋雪松Song Xuesong地址：125.Expenses, including legal fees, incurred by a director in defending any legal, administrative or investigative proceedings may be paid by the Company inadvance of the final disposition of such proceedings upon receipt of an undertaking by or on behalf of the director to repay the amount if it shall ultimatelybe determined that the director is not entitled to be indemnified by the Company in accordance with these Articles.126.Expenses, including legal fees, incurred by a former director in defending any legal, administrative or investigative proceedings may be paid by theCompany in advance of the final disposition of such proceedings upon receipt of an undertaking by or on behalf of the former director to repay the amountif it shall ultimately be determined that the director is not entitled to be indemnified by the Company in accordance with these Articles.127.The indemnification and advancement of expenses provided by, or granted pursuant to, these Articles is not exclusive of any other rights to which theperson seeking indemnification of advancement of expenses may be entitled under any agreement, resolution of members, resolution of disinteresteddirectors or otherwise, both as to acting in the person’s official capacity and as to acting in another capacity while serving as a director of the Company.128.If a person to be indemnified has been successful in defence of any proceedings referred to above the person is entitled to be indemnified against allexpenses, including legal fees, and against all judgments, fines and amounts paid in settlement and reasonably incurred by the person in connection withthe proceedings.129.The Company may purchase and maintain insurance in relation to any person who is or was a director, an officer or a liquidator of the Company, or who atthe request of the Company is or was serving as a director, an officer or a liquidator of, or in any other capacity is or was acting for, another body corporateor a partnership, joint venture, trust or other enterprise, against any liability asserted against the person and incurred by the person in that capacity,whether or not the Company has or would have had the power to indemnify the person against the liability as provided in these Articles.SEAL130.The Company shall have a Seal and may have more than one Seal. References herein to the Seal shall be references to every Seal which shall have beenduly adopted by resolution of directors. The directors shall provide for the safe custody of the Seal and for an imprint thereof to be kept at the office of theregistered agent of the Company. Except as otherwise expressly provided herein, the Seal when affixed to any written instrument, shall be witnessed andattested to by the signature of a director or any other person so authorized from time to time by resolution of directors. Such authorization may be before orafter the Seal is affixed, may be general or specific and may refer to any number of sealings. The Directors may provide for a facsimile of the Seal and of thesignature of any director or authorized person which may be reproduced by printing or other means on any instrument and it shall have the same force andvalidity as if the Seal had been affixed to such instrument and the same had been signed as hereinbefore described.21DISTRIBUTIONS131.The directors of the Company may by resolution authorise a distribution by the Company at any time and of any amount and to any members they think fitif they are satisfied on reasonable grounds that immediately after the distribution;a.the value of the Company’s assets will exceed its liabilities, andb.the Company will be able to pay its debts as they fall due.132.A resolution of the directors passed under the preceding Article shall contain a statement that, in the opinion of the directors, immediately after thedistribution the value of the Company’s assets will exceed its liabilities, and the Company will be able to pay its debts as they fall due.133.If, after a distribution is authorised and before it is made, the directors cease to be satisfied on reasonable grounds that the Company will, immediately afterthe distribution satisfy the solvency test, any distribution made by the Company is deemed not to have been authorised.134.If, by virtue of the preceding Article, a distribution is deemed not to have been authorised, a director who;a.ceased, after authorisation but before the making of the distribution, to be satisfied on reasonable grounds for believing that the company wouldsatisfy the solvency test immediately after the distribution is made; andb.failed to take reasonable steps to prevent the distribution being made;is personally liable to the company to repay to the company so much of the distribution as is not able to be recovered from members.135.A distribution made to a member at a time when the company did not, immediately after the distribution, satisfy the solvency test may be recovered by thecompany from the member unless;a.the member received the distribution in good faith and without knowledge of the company’s failure to satisfy the solvency test;b.the member has altered his position in reliance on the validity of the distribution; andc.it would be unfair to require repayment in full or at all.DISTRIBUTIONS BY WAY OF DIVIDEND136.The Company may by a resolution of directors declare a distribution by way of dividend and pay such distribution in money, shares or other property. Inthe event that distributions by way of dividend are paid in specie the directors shall have responsibility for establishing and recording in the resolution ofdirectors authorizing the distribution by way of dividend, a fair and proper value for the assets to be so distributed.137.The directors may from time to time pay to the members such interim distributions by way of dividend as appear to the directors to be justified by theprofits of the Company.138.The directors may, before declaring any distribution by way of dividend, set aside out of the profits of the Company such sum as they think proper as areserve fund, and may invest the sum so set aside as a reserve fund upon such securities as they may select.139.Notice of any distribution by way of dividend that may have been declared shall be given to each member in the manner hereinafter mentioned and alldistributions by way of dividend unclaimed for 3 years after having been declared may be forfeited by resolution of directors for the benefit of theCompany.140.No distribution by way of dividend shall bear interest as against the Company and no distribution by way of dividend shall be paid on treasury shares orshares held by another company of which the Company holds, directly or indirectly, shares having more than 50 percent of the vote in electing directors.22141.A share issued as a distribution by way of dividend by the Company shall be treated for all purposes as having been issued for money equal to the valuedetermined by resolution of the directors. In the absence of fraud the decision of the directors as to the value of the share is conclusive unless a questionof law is involved.142.A division of the issued and outstanding shares of a class or series of shares into a larger number of shares of the same class or series having aproportionately smaller par value does not constitute a distribution by way of dividend of shares.ACCOUNTS AND AUDIT143.The Company may by resolution of members call for the directors to prepare periodically a profit and loss account and a balance sheet. The profit and lossaccount and balance sheet shall be drawn up so as to give respectively a true and fair view of the profit and loss of the Company for the financial periodand a true and fair view of the state of affairs of the Company as at the end of the financial period.144.The Company may by resolution of members call for the accounts to be examined by auditors.145.Subject to the rules of the Designated Stock Exchange, the first auditors shall be appointed by resolution of directors; subsequent auditors shall beappointed by the Audit Committee and shall hold office until the Audit Committee appoint another independent auditor.146.Subject to the rules of the Designated Stock Exchange, the remuneration of the auditors of the Company shall be fixed by the Audit Committee.147.The auditors shall examine each profit and loss account and balance sheet required to be served on every member of the Company or laid before a meetingof the members of the Company and shall state in a written report whether or nota.in their opinion the profit and loss account and balance sheet give a true and fair view respectively of the profit and loss for the period covered bythe accounts, and of the state of affairs of the Company at the end of that period; andb.all the information and explanations required by the auditors have been obtained.148.The report of the auditors shall be annexed to the accounts and shall be read at the meeting of members at which the accounts are laid before the Companyor shall be served on the members.149.Every auditor of the Company shall have a right of access at all times to the books of account and vouchers of the Company, and shall be entitled to requirefrom the directors and officers of the Company such information and explanations as he thinks necessary for the performance of the duties of the auditors.150.The auditors of the Company shall be entitled to receive notice of, and to attend any meetings of members of the Company at which the Company’s profitand loss account and balance sheet are to be presented.NOTICES151.Any notice, information or written statement to be given by the Company to members may be served in any way by which it can reasonably be expected toreach each member or by mail addressed to each member at the address shown in the share register.152.Any summons, notice, order, document, process, information or written statement to be served on the Company may be served by leaving it, or by sendingit by registered mail addressed to the Company, at its registered office, or by leaving it with, or by sending it by registered mail to, the registered agent ofthe Company.153.Service of any summons, notice, order, document, process, information or written statement to be served on the Company may be proved by showing thatthe summons, notice, order, document, process, information or written statement was delivered to the registered office or the registered agent of theCompany or that it was mailed in such time as to admit to its being delivered to the registered office or the registered agent of the Company in the normalcourse of delivery within the period prescribed for service and was correctly addressed and the postage was prepaid.23PENSION AND SUPERANNUATION FUNDS154.The directors may establish and maintain or procure the establishment and maintenance of any noncontributory or contributory pension orsuperannuation funds for the benefit of, and give or procure the giving of donations, gratuities, pensions, allowances or emoluments to, any persons whoare or were at any time in the employment or service of the Company or any company which is a subsidiary of the Company or is allied to or associated withthe Company or with any such subsidiary, or who are or were at any time directors or officers of the Company or of any such other company as aforesaid orwho hold or held any salaried employment or office in the Company or such other company, or any persons in whose welfare the Company or any suchother company as aforesaid is or has been at any time interested, and to the wives, widows, families and dependents of any such person, and may makepayments for or towards the insurance of any such persons as aforesaid, and may do any of the matters aforesaid either alone or in conjunction with anysuch other company as aforesaid. Subject always to the proposal being approved by resolution of members, a director holding any such employment oroffice shall be entitled to participate in and retain for his own benefit any such donation, gratuity, pension allowance or emolument.VOLUNTARY WINDING UP AND DISSOLUTION155.The Company may voluntarily commence to wind up and dissolve by a resolution of members but if the Company has never issued shares it mayvoluntarily commence to wind up and dissolve by resolution of directors.CONTINUATION156.The Company may by resolution of members or by a resolution passed unanimously by all directors of the Company continue as a company incorporatedunder the laws of a jurisdiction outside the British Virgin Islands in the manner provided under those laws.ARBITRATION157.Whenever any difference arises between the Company on the one hand and any of the members or their executors, administrators or assigns on the otherhand, touching the true intent and construction or the incidence or consequences of these Articles or of the Act, touching anything done or executed,omitted or suffered in pursuance of the Act or touching any breach or alleged breach or otherwise relating to the premises or to these Articles, or to anyAct or Ordinance affecting the Company or to any of the affairs of the Company such difference shall, unless the parties agree to refer the same to a singlearbitrator, be referred to 2 arbitrators one to be chosen by each of the parties to the difference and the arbitrators shall before entering on the referenceappoint an umpire.158.If either party to the reference makes default in appointing an arbitrator either originally or by way of substitution (in the event that an appointed arbitratorshall die, be incapable of acting or refuse to act) for 10 days after the other party has given him notice to appoint the same, such other party may appoint anarbitrator to act in the place of the arbitrator of the defaulting party.We, Portcullis TrustNet (BVI) Limited of Portcullis TrustNet Chambers, P.O. Box 3444, Road Town, Tortola, British Virgin Islands for the purpose of incorporating aBVI Business Company under the laws of the British Virgin Islands hereby sign these Articles of Association the 27th day of October, 2009.Incorporator/s/ Nicole WheatleyPortcullis TrustNet (BVI) LimitedPortcullis TrustNet ChambersP.O. Box 3444Road Town, TortolaBritish Virgin Islands(Sgd. Nicole Wheatley)24EX4.15 3 f20f2017ex415_luokung.htm EXCLUSIVE BUSINESS COOPERATION AGREEMENT BY AND BETWEEN ZHONGCHUAN TIANXIA INFORMATIONTECHNOLOGY (SHENZHEN) CO., LTD., AND BEIJING MOBILE VISION TECHNOLOGY CO., LTD., DATED AUGUST 31, 2015Exhibit 4.15独家业务合作协议Exclusive Business Cooperation Agreement本独家业务合作协议（下称“本协议”）由以下双方于年月日在中华人民共和国（下称“中国”）北京市签署。This Exclusive Business Cooperation Agreement (this “Agreement”) is made and entered into by and between the following parties on in Beijing, thePeople’s Republic of China (“China” or the “PRC”).甲方：中传天下信息科技（深圳）有限公司Party A: Zhongchuan Tianxia Information Technology (Shenzhen) Co., Ltd.地址：深圳市南山区高新中三道2号深圳软件园一期五栋401A Address: 401A, Building 5, Phase 1, Shenzhen Software Park, No.2 Gaoxin Zhongsan Road, Nanshan District, Shenzhen统一社会信用代码：91440300565701058R Uniform Social Credit Code: 91440300565701058R乙方：北京中传视讯科技有限公司Party B: Beijing Mobile Vision Technology Co., Ltd.地址：北京市朝阳区光华路9号SOHO3QLAB32Address: LAB32, SOHO3Q, No 9, Guanghua Road, Chaoyang District, Beijing统一社会信用代码：9111010576215249XMUniform Social Credit Code: 9111010576215249XM甲方和乙方以下各称为“一方”，统称为“双方”。Each of Party A and Party B shall be hereinafter referred to as a “Party” respectively, and as “Parties” collectively.1秘密文件Strictly Confidential鉴于：Whereas,1.甲方是一家在中国注册的外商独资企业，拥有丰富的技术研发和产业化推广相关的管理和投资经验，并提供相关的技术支持和咨询服务；Party A is a whollyforeignowned enterprise established in China, which has rich experience in technology research development and industrializationpromotion management and investment, and provides relevant technical support and consulting services;2.乙方是一家在中国成立的有限责任公司，经中国有关政府部门批准依法主要从事手机视频技术开发、内容制作及市场推广；Party B is a limited company in China, mainly engages in mobile video technology research, development, content creation, sale and related industrialpromotion as approved by the relevant governmental authorities in China;3.甲方同意利用其技术、人员和信息优势，在本协议期间向乙方提供有关手机视频技术开发、内容制作及市场推广以及未来扩大业务规模和业务范围时乙方所需的技术支持、技术咨询等相关服务，乙方同意接受甲方或其指定方按本协议条款的规定提供的各种服务。Party A is willing to provide Party B with technology supports and technology consulting services in connection with mobile video technology research,development, content creation, sale and related industrial promotion and such services in connection with Party B’s extension of business scale orbroadening of businesses during the term of this Agreement, utilizing its advantages in technology, human resources, and information, and Party B iswilling to accept such services provided by Party A or Party A's designee(s), each on the terms set forth herein.2秘密文件Strictly Confidential据此，甲方和乙方经协商一致，达成如下协议：Now, therefore, through mutual discussion, the Parties have reached the following agreements:1.服务提供Services Provided by Party A1.1按照本协议条款和条件，乙方在此委任甲方在本协议期间作为乙方的独家服务提供者向乙方提供全面的和手机视频技术开发、内容制作及市场推广相关以及未来扩大业务规模和业务范围时乙方所需的技术支持、业务支持和相关咨询服务，具体内容包括但不限于以下内容：Party B hereby appoints Party A as Party B's exclusive services provider to provide Party B with complete technical support, business supportand related consulting services in connection with mobile video technology research, development, content creation, sale and related industrialpromotion and such services in connection with Party B’s extension of business scale or broadening of businesses during the term of thisAgreement, in accordance with the terms and conditions of this Agreement, which may include but not limited to:1.1.1为乙方提供其手机视频技术开发、内容制作及市场推广业务所需的一切服务支持，为乙方提供相当于包括总经理、行政人员、管理人员、筹划部门、商业运营、人力资源、财务、会计以及与乙方业务相关的一切业务操作所需人员所能提供的服务内容；managing all aspects of Party B’s business of mobile video technology research, development, content creation, sale and relatedindustrial promotion. In this capacity, Party A will procure or engage for Party B the services of a general manager and other managementstaff, including but not limited to personnel responsible for all administration, operations, planning, business development, humanresources, finance, accounting and other operations related to the Business of Party B;3秘密文件Strictly Confidential1.1.2为乙方制定全部的商业计划、销售目标，并为优化执行该等商业计划设计和建立相应的系统及操作程序；developing all business plans and sales projections of Party B, and for developing and establishing systems and procedures for optimumexecution of the business plans;1.1.3为乙方申请手机视频技术及内容制作相关专利提供咨询服务和支持；consulting services and support in connection with Party B’s applying for mobile video technology related patents and content creation;1.1.4为乙方手机视频技术产业化的发展方向、规模、品牌提升提供咨询服务；consulting services in connection with the development directions, size and business brands promotion of Party B’s mobile videotechnology industrialization;4秘密文件Strictly Confidential1.1.5为乙方提供与业务相关的办公、生产和销售服务，为乙方租赁场所，建立业务相关的系统和程序，满足乙方的其他要求；procuring or obtaining for Party B all office, production and distribution services related to the Business. It shall procure or obtainappropriate leases, establish systems and procedures needed to operate the business, fulfill orders for services;1.1.6尽最大努力为乙方建立手机视频技术销售市场，根据甲方为乙方制定的商业计划及销售目标代表乙方获取客户订单，同时为乙方提供与业务相关的客户服务，建立向客户开具票据的程序和与会计相关的托收服务。using its best efforts to establish mobile video technology related marketing and other structures to obtain orders for services &products from customers on behalf of Party B in accordance with Party B’s business plans, sales projections and objectives (asdeveloped by Party A) and procure or obtain customer services required in connection with the Business. It shall also establishprocedures for invoicing customers, and establish collection services with respect to accounts;1.1.7就乙方的劳动用工方面提供咨询服务和支持，包括但不限于，组织实施对乙方业务人员、行政人员、管理人员等人员进行培训和考核，协助建立健全的人力资源管理制度和实现人力资源的良好配置；consulting services and support regarding labor system of Party B, including but without limitation to labor training and evaluation ofsales person, administrative staff and management person etc. and establishment of human resources management system to well;5秘密文件Strictly Confidential1.1.8提供乙方需要的客户数据统计、分析及相关数据库的建设和维护等咨询服务；providing Party B with compile and analysis of client data and consulting services of establishment and maintenance of data base;1.1.9提供乙方需要的软件和相关技术支持服务；providing software Party B requires and other technical support;1.1.10接受乙方委托，对乙方的手机视频技术研发和产业化推广业务经营进行指导和管理；guiding and management on Party B’s business of mobile video technology research and development and related industrial promotionoperation according to Party B’s commission;1.1.11当乙方业务规模发展或业务范围扩大需要时，购买乙方业务经营需要的设备；in the event of the demand of Party B’s development of business scale or broadening of businesses, purchase the equipments which itneeds for the operation of its business;1.1.12当乙方业务规模发展或业务范围扩大需要时，完成乙方项目中的全部或部分工作；in the event of the demand of Party B’s development of business scale or broadening of businesses, complete the work of Party B’sproject in whole or in party;6秘密文件Strictly Confidential1.1.13当乙方业务规模发展或业务范围扩大需要时，开发新技术；in the event of the demand of Party B’s development of business scale or broadening of businesses, develop new technology;1.1.14乙方委托甲方，且甲方接受委托提供的其他服务。other services Party B appoints Party A to provide and Party A agrees to provide.1.2乙方接受甲方的咨询和服务。乙方进一步同意，除非经甲方事先书面同意，在本协议期间，就本协议约定的服务或其他事宜，乙方不得直接或间接地从任何第三方获得任何与本协议相同或类似的咨询和/或服务，并不得与任何第三方就本协议所述事项建立任何类似的合作关系。双方同意，甲方可以指定其他方（该被指定方可以与乙方签署本协议第1.3条描述的某些协议）为乙方提供本协议约定的服务和/或支持。Party B agrees to accept all the consultations and services provided by Party A. Party B further agrees that unless with Party A's prior writtenconsent, during the term of this Agreement, Party B shall not directly or indirectly accept the same or any similar consultations and/or servicesprovided by any third party and shall not establish similar corporation relationship with any third party regarding the matters contemplated by thisAgreement. Party A may appoint other parties, who may enter into certain agreements described in Section 1.3 with Party B, to provide Party Bwith the consultations and/or services under this Agreement.7秘密文件Strictly Confidential1.3服务的提供方式Service Providing Methodology1.3.1双方同意在本协议有效期内，视情况而定，乙方可以与甲方或甲方指定的其他方进一步签订技术服务协议和/或咨询服务协议，对各项业务培训、技术服务、咨询服务的具体内容、方式、人员、收费等进行约定。Parties agree that during the term of this Agreement, where necessary, Party B may enter into further technical service agreements and/orconsulting service agreements with Party A or any other party designated by Party A, which shall provide the specific contents, manner,personnel, and fees for the specific technical services and consulting services.1.3.2为更好地履行本协议，双方同意，在甲方认为必要时，乙方应在本协议有效期内与甲方或甲方指定的其他方根据业务进展需要随时签署协议，由甲方或其指定方向乙方提供服务。To fulfill this Agreement, Parties agree that during the term of this Agreement, where Party A deems necessary, Party B shall enter intoagreements with Party A or any other party designated by Party A which shall set forth that Party A or any other party designated byParty A provide services to Party B based on the needs of the business of Party B.8秘密文件Strictly Confidential2.服务的价格和支付方式The Calculation and Payment of the Service Fees双方同意，就甲方提供的服务，乙方应向甲方支付服务费（“服务费”）。服务费不应低于乙方税后利润的80%。服务费应当按季支付；经甲方事先书面同意，服务费可以根据乙方的经营需要进行调整。Both Parties agree that, in consideration of the services provided by Party A, Party B shall pay Party A fees (the “Service Fees”), which shall not be lessthan 80% of Party B’s aftertax profits . The Service Fees shall be due and payable on a quarterly basis; upon the prior written consent by Party A, the rateof Service Fees may be adjusted pursuant to the operational needs of Party B.3.知识产权和保密条款Intellectual Property Rights and Confidentiality Clauses3.1在中国法律允许的范围内，甲方对履行本协议而产生或创造的任何权利、所有权、权益和所有知识产权包括但不限于著作权、专利权、专利申请权、软件、技术秘密、商业机密及其他均享有独占的和排他的权利和利益。乙方须签署所有适当的文件，采取所有适当的行动，递交所有的文件和/或申请，提供所有适当的协助，以及做出所有其他依据甲方的自行决定认为是必要的行为，以将任何对该等知识产权的所有权、权利和权益赋予甲方，和/或完善对甲方此等知识产权权利的保护。To the extent permitted under the PRC laws, Party A shall have exclusive and proprietary rights and interests in all rights, ownership, interests andintellectual properties arising out of or created during the performance of this Agreement, including but not limited to copyrights, patents, patentapplications, software, technical secrets, trade secrets and others. Party B shall execute all appropriate documents, take all appropriate actions,submit all filings and/or applications, render all appropriate assistance and otherwise conduct whatever is necessary deemed as by Party A in itssole discretion for the purposes of vesting any ownership, right or interest of any such intellectual property rights in Party A, and/or perfectingthe protections for any such intellectual property rights in Party A.9秘密文件Strictly Confidential3.2双方承认及确定有关本协议、本协议内容，以及彼此就准备或履行本协议而交换的任何口头或书面资料均被视为保密信息。双方应当对所有该等保密信息予以保密，而在未得到另一方书面同意前，不得向任何第三者披露任何保密信息，惟下列信息除外：(a)公众人士知悉或将会知悉的任何信息（惟并非由接受保密信息之一方擅自向公众披露）；(b)根据适用法律法规、股票交易规则、或政府部门或法院的命令而所需披露之任何信息；或(c)由任何一方就本协议所述交易而需向其股东、投资者、法律或财务顾问披露之信息，而该股东、法律或财务顾问亦需遵守与本条款相类似之保密责任。如任何一方工作人员或聘请机构的泄密均视为该方的泄密，需依本协议承担违约责任。无论本协议以任何理由终止，本条款仍然生效。The Parties acknowledge that the existence and the terms of this Agreement and any oral or written information exchanged between the Parties inconnection with the preparation and performance this Agreement are regarded as confidential information. Each Party shall maintainconfidentiality of all such confidential information, and without obtaining the written consent of the other Party, it shall not disclose any relevantconfidential information to any third parties, except for the information that: (a) is or will be in the public domain (other than through the receivingParty’s unauthorized disclosure); (b) is under the obligation to be disclosed pursuant to the applicable laws or regulations, rules of any stockexchange, or orders of the court or other government authorities; or (c) is required to be disclosed by any Party to its shareholders, investors,legal counsels or financial advisors regarding the transaction contemplated hereunder, provided that such shareholders, investors, legal counselsor financial advisors shall be bound by the confidentiality obligations similar to those set forth in this Section. Disclosure of any confidentialinformation by the staff members or agencies hired by any Party shall be deemed disclosure of such confidential information by such Party, whichParty shall be held liable for breach of this Agreement. This Section shall survive the termination of this Agreement for any reason.3.3双方同意，不论本协议是否变更、解除或终止，本条款将持续有效。The Parties agree that this Section shall survive changes to, and rescission or termination of, this Agreement.4.陈述和保证Representations and Warranties4.1甲方陈述和保证如下：Party A hereby represents and warrants as follows:4.1.1甲方是按照中国法律合法注册并有效存续的外商独资企业。Party A is a whollyforeignowned enterprise legally registered and validly existing in accordance with the laws of China.10秘密文件Strictly Confidential4.1.2甲方已采取必要的公司行为，获得必要的授权，并取得第三方和政府部门的同意及批准（若需）以签署和履行本协议；甲方对本协议的签署和履行并不违反法律法规的明确规定。Party A has taken all necessary corporate actions, obtained all necessary authorization and the consent and approval from third partiesand government agencies (if any) for the execution and performance of this Agreement. Party A’s execution and performance of thisAgreement do not violate any explicit requirements under any law or regulation binding on Party A.4.1.3本协议构成对其合法、有效、有约束力并依本协议之条款对其强制执行的义务。This Agreement constitutes Party A's legal, valid and binding obligations, enforceable in accordance with its terms.4.2乙方陈述和保证如下：Party B hereby represents and warrants as follows:4.2.1乙方是按照中国法律合法登记且有效存续的有限责任公司，乙方根据政府部门的批准和许可从事手机视频技术开发、内容制作和产业化市场推广的经营。Party B is a limited company legally registered and validly existing in accordance with the laws of China, engages in mobile videotechnology research, development, content creation, sale and related industrial promotion pursuant to governmental approvals andpermits;11秘密文件Strictly Confidential4.2.2乙方已采取必要的行为，获得必要的授权，并取得第三方和政府部门的同意及批准（若需）以签署和履行本协议；乙方对本协议的签署和履行并不违反法律法规的明确规定。Party B has taken all necessary actions, obtained all necessary authorization and the consent and approval from third parties andgovernment agencies (if any) for the execution and performance of this Agreement. Party B’s execution and performance of thisAgreement do not violate any explicit requirements under any law or regulation binding on Party B.4.2.3本协议构成对其合法、有效、有约束力并依本协议之条款对其强制执行的义务。This Agreement constitutes Party B's legal, valid and binding obligations, and shall be enforceable against it.5.生效和有效期Effectiveness and Term5.1本协议于文首标明的协议日期签署并同时生效。除非依本协议或双方其他协议的约定而提前终止，本协议有效期为20年，但甲、乙双方应自本协议签署后，每3个月对本协议的内容做一次审查，以决定是否需要根据当时的情况对本协议作出相应修改和补充。This Agreement is executed on the date first above written and shall take effect as of such date. Unless earlier terminated in accordance with theprovisions of this Agreement or relevant agreements separately executed between the Parties, the term of this Agreement shall be 20 years. Afterthe execution of this Agreement, both Parties shall review this Agreement every 3 months to determine whether to amend or supplement theprovisions in this Agreement based on the actual circumstances at that time.12秘密文件Strictly Confidential5.2协议期满前，经甲方书面确认，本协议可以延期。延期的期限由甲方决定，乙方必须无条件地同意该延期。The term of this Agreement may be extended if confirmed in writing by Party A prior to the expiration thereof. The extended term shall bedetermined by Party A, and Party B shall accept such extended term unconditionally.6.终止Termination6.1除非依据本协议续期，本协议于到期之日终止。Unless renewed in accordance with the relevant terms of this Agreement, this Agreement shall be terminated upon the date of expiration hereof.6.2本协议有效期内，除非甲方对乙方有重大过失或存在欺诈行为，乙方不得提前终止本协议。尽管如此，甲方可在任何时候通过提前30天向乙方发出书面通知的方式终止本协议。During the term of this Agreement, unless Party A commits gross negligence, or a fraudulent act, against Party B, Party B shall not terminate thisAgreement prior to its expiration date. Nevertheless, Party A shall have the right to terminate this Agreement upon giving 30 days' prior writtennotice to Party B at any time.6.3在本协议终止之后，双方在第3、7和8条项下的权利和义务将继续有效。The rights and obligations of the Parties under Articles 3, 7 and 8 shall survive the termination of this Agreement.13秘密文件Strictly Confidential7.适用法律和争议解决Governing Law and Resolution of Disputes7.1本协议的订立、效力、解释、履行、修改和终止以及争议的解决适用中国的法律。The execution, effectiveness, construction, performance, amendment and termination of this Agreement and the resolution of disputes hereundershall be governed by the laws of China.7.2因解释和履行本协议而发生的任何争议，本协议双方应首先通过友好协商的方式加以解决。如果在一方向其他方发出要求协商解决的书面通知后30天之内争议仍然得不到解决，则任何一方均可将有关争议提交给中国国际经济贸易仲裁委员会，由该会按照其仲裁规则仲裁解决。仲裁应在北京进行，使用之语言为中文。仲裁裁决是终局性的，对各方均有约束力。In the event of any dispute with respect to the construction and performance of this Agreement, the Parties shall first resolve the dispute throughfriendly negotiations. In the event the Parties fail to reach an agreement on the dispute within 30 days after either Party's request to the otherParties for resolution of the dispute through negotiations, either Party may submit the relevant dispute to the China International Economic andTrade Arbitration Commission for arbitration, in accordance with its Arbitration Rules. The arbitration shall be conducted in Beijing, and thelanguage used in arbitration shall be Chinese. The arbitration award shall be final and binding on all Parties.14秘密文件Strictly Confidential7.3因解释和履行本协议而发生任何争议或任何争议正在进行仲裁时，除争议的事项外，本协议双方仍应继续行使各自在本协议项下的其他权利并履行各自在本协议项下的其他义务。Upon the occurrence of any disputes arising from the construction and performance of this Agreement or during the pending arbitration of anydispute, except for the matters under dispute, the Parties to this Agreement shall continue to exercise their respective rights under this Agreementand perform their respective obligations under this Agreement.8.补偿Indemnification就甲方根据本协议向乙方提供的咨询和服务内容所产生或引起的针对甲方的诉讼、请求或其他要求而招致的任何损失、损害、责任或费用都应由乙方补偿给甲方，以使甲方不受损害，除非该损失、损害、责任或费用是因甲方的重大过失或故意而产生的。Party B shall indemnify and hold harmless Party A from any losses, injuries, obligations or expenses caused by any lawsuit, claims or other demandsagainst Party A arising from or caused by the consultations and services provided by Party A to Party B pursuant this Agreement, except where suchlosses, injuries, obligations or expenses arise from the gross negligence or willful misconduct of Party A.15秘密文件Strictly Confidential9.通知Notices9.1本协议项下要求或发出的所有通知和其他通信应通过专人递送、挂号邮寄、邮资预付或快递服务或传真的方式发到该方下列地址。每一通知还应再以电子邮件送达。该等通知视为有效送达的日期按如下方式确定：All notices and other communications required or permitted to be given pursuant to this Agreement shall be delivered personally or sent byregistered mail, postage prepaid, by a courier service or by facsimile transmission to the address of such Party set forth below. A confirmationcopy of each notice shall also be sent by email. The dates on which notices shall be deemed to have been effectively given shall be determined asfollows:9.1.1通知如果是以专人递送、快递服务或挂号邮寄、邮资预付发出的，则以于设定为通知的地址在接收或拒收之日为有效送达日。Notices given by personal delivery, by courier service or by registered mail, postage prepaid, shall be deemed effectively given on thedate of receipt or refusal at the address specified for notices.9.1.2通知如果是以传真发出的，则以成功传送之日为有效送达日（应以自动生成的传送确认信息为证）。Notices given by facsimile transmission shall be deemed effectively given on the date of successful transmission (as evidenced by anautomatically generated confirmation of transmission).16秘密文件Strictly Confidential9.2为通知的目的，双方地址如下：For the purpose of notices, the addresses of the Parties are as follows:甲方：中传天下信息科技（深圳）有限公司Party A: Zhongchuan Tianxia Information Technology (Shenzhen) Co., Ltd.地址：深圳市南山区高新中三道2号深圳软件园一期五栋401AAddress:401A, Building 5, Phase 1, Shenzhen Software Park, No.2 Gaoxin Zhongsan Road, Nanshan District, Shenzhen收件人：洪婷Attn: Hong Ting乙方：北京中传视讯科技有限公司Party B: Beijing Mobile Vision Technology Co., Ltd地址：北京市朝阳区光华路9号SOHO3QLAB32Address: LAB32, SOHO3Q, No 9, Guanghua Road, Chaoyang District, Beijing.收件人：宋雪松Attn.: Song Xuesong9.3任何一方可按本条规定随时给另一方发出通知来改变其接收通知的地址。Any Party may at any time change its address for notices by a notice delivered to the other Party in accordance with the terms hereof.17秘密文件Strictly Confidential10.协议的转让Assignment10.1乙方不得将其在本协议项下的权利与义务转让给第三方，除非事先征得甲方的书面同意。Without Party A's prior written consent, Party B shall not assign its rights and obligations under this Agreement to any third party.10.2乙方在此同意，甲方可以在其需要时向其他第三方转让其在本协议项下的权利和义务，并在该等转让发生时甲方仅需向乙方发出书面通知，并且无需再就该等转让征得乙方的同意。Party B agrees that Party A may assign its obligations and rights under this Agreement to any third party upon a prior written notice to Party Bbut without the consent of Party B.11.协议的分割性Severability如果本协议有任何一条或多条规定根据任何法律或法规在任何方面被裁定为无效、不合法或不可执行，本协议其余规定的有效性、合法性或可执行性不应因此在任何方面受到影响或损害。双方应通过诚意磋商，争取以法律许可以及双方期望的最大限度内有效的规定取代那些无效、不合法或不可执行的规定，而该等有效的规定所产生的经济效果应尽可能与那些无效、不合法或不能强制执行的规定所产生的经济效果相似。In the event that one or several of the provisions of this Agreement are found to be invalid, illegal or unenforceable in any aspect in accordance with anylaws or regulations, the validity, legality or enforceability of the remaining provisions of this Agreement shall not be affected or compromised in any aspect.The Parties shall strive in good faith to replace such invalid, illegal or unenforceable provisions with effective provisions that accomplish to the greatestextent permitted by law and the intentions of the Parties, and the economic effect of such effective provisions shall be as close as possible to the economiceffect of those invalid, illegal or unenforceable provisions.18秘密文件Strictly Confidential12.协议的修改、补充Amendments and Supplements双方可以书面协议方式对本协议作出修改和补充。经过双方签署的有关本协议的修改协议和补充协议是本协议组成部分，具有与本协议同等的法律效力。Any amendments and supplements to this Agreement shall be in writing. The amendment agreements and supplementary agreements that have beensigned by the Parties and that relate to this Agreement shall be an integral part of this Agreement and shall have the same legal validity as this Agreement.13.语言和副本Language and Counterparts本协议以中文和英文书就，一式二份，甲乙双方各持一份，具有同等效力；中英文版本如有冲突，应以中文版为准。This Agreement is written in both Chinese and English language in two copies, each Party having one copy with equal legal validity; in case there is anyconflict between the Chinese version and the English version, the Chinese version shall prevail.本页其余部分刻意留为空白The Remainder of this page is intentionally left blank19秘密文件Strictly Confidential有鉴于此，双方已使得经其授权的代表于文首所述日期签署了本独家业务合作协议并即生效，以昭信守。IN WITNESS WHEREOF, the Parties have caused their authorized representatives to execute this Exclusive Business Cooperation Agreement as of thedate first above written.甲方：中传天下信息科技（深圳）有限公司（盖章）Party A: Zhongchuan Tianxia Information Technology (Shenzhen) Co., Ltd.(Seal)签字：By: /s/ Hong Ting 姓名：洪婷Name: Hong Ting职务：总经理Title: General Manager20秘密文件Strictly Confidential有鉴于此，双方已使得经其授权的代表于文首所述日期签署了本独家业务合作协议并即生效，以昭信守。IN WITNESS WHEREOF, the Parties have caused their authorized representatives to execute this Exclusive Business Cooperation Agreement as of thedate first above written. 乙方：北京中传视讯科技有限公司（盖章）Party B: Beijing Mobile Vision Technology Co., Ltd. (Seal)签字：By: /s/ Song Xuesong 姓名：宋雪松Name: Song Xuesong职务：董事长Title: Chairman of the Board21秘密文件Strictly ConfidentialEX4.16 4 f20f2017ex416_luokung.htm EXCLUSIVE OPTION AGREEMENT BY AND AMONG ZHONGCHUAN TIANXIA INFORMATION TECHNOLOGY(SHENZHEN) CO., LTD., XUESONG SONG, WEILI CHEN, PING WANG, DONGLAI LIU, AND BEIJING MOBILE VISION TECHNOLOGY CO., LTD., DATEDAUGUST 31, 2015Exhibit 4.16独家购买权协议Exclusive Option Agreement本独家购买权协议 (下称“本协议”) 由以下各方于年月日在中华人民共和国（下称“中国”）北京签订：This Exclusive Option Agreement (this “Agreement”) is executed by and among the Parties below as of in Beijing, the People’s Republic of China (the“China” or “PRC”):甲方：中传天下信息科技（深圳）有限公司，一家依照中国法律设立和存在的外商独资企业，地址为深圳市南山区高新中三道2号深圳软件园一期五栋401A；Party A:Zhongchuan Tianxia Information Technology (Shenzhen) Co., Ltd., a whollyforeignowned enterprise organized and existing under the laws of China,with its address at 401A, Building 5, Phase 1, Shenzhen Software Park, No.2 Gaoxin Zhongsan Road, Nanshan District, Shenzhen.乙方：Party B:a)宋雪松Song Xuesong身份证号码:120112196809040417ID Card No.:120112196809040417住所：天津市河西区广东路中裕园33702Address:Zhongyu Yuan 33702, Guangdong Road, Hexi District, Tianjinb)陈蔚力Chen Weili身份证号码:120106197309240516ID Card No.:120106197309240516住所：广东省深圳市宝安区宝城上川路15号Address:Baocheng Shangchuan Road 15, Baoan District, Shenzhen, Guangdong1秘密文件Strictly Confidentialc)王平Wang Ping身份证号码:35020319691030401xID Card No.:35020319691030401x住所：广东省深圳市南山区高新南环路36号彩虹之岸12栋4AAddress:Caihong Zhi’an Building No.12 Suite 4A, Gaoxin Nanhuan Road 36, Nanshan District, Shenzhen, Guangdongd)刘东来Liu Donglai身份证号码:120107196810103912ID Card No.:120107196810103912住所：天津市和平区南京路诚基经贸中心1号楼2门1702号Address:No 1702, Door 2, Build 1, Chengji Economic and Trade Centre, Nanjing Road, Heping District, Tianjin.丙方：北京中传视讯科技有限公司，一家依照中国法律设立和存在的有限责任公司，地址为北京市朝阳区光华路9号SOHO3QLAB32，统一社会信用代码为9111010576215249XM；Party C:Beijing Mobile Vision Technology Co., Ltd., a limited company duly registered in China, with its address at LAB32, SOHO3Q, No 9, Guanghua Road,Chaoyang District, Beijing and its uniform social credit code of 9111010576215249XM.2秘密文件Strictly Confidential在本协议中，甲方、乙方和丙方以下各称“一方”，合称“各方”。In this Agreement, each of Party A, Party B and Party C shall be referred to as a “Party” respectively, and they shall be collectively referred to as the“Parties”.鉴于，乙方系丙方股东并合计持有丙方100%股权，乙方将按本协议之条款授予甲方购买全部或部分该股权的权利。Whereas, Party B are the shareholders of Party C and jointly hold 100% of the equity interest in Party C, and Party B are willing to grant to Party A the rightto acquire such equity interest, in whole or in part, on the terms herein.现各方协商一致，达成如下协议：Now therefore, upon mutual discussion and negotiation, the Parties have reached the following agreement:1.股权买卖Sale and Purchase of Equity Interest1.1授予权利Option Granted乙方在此不可撤销地授予甲方在中国法律允许的前提下，按照甲方自行决定的行使步骤，并按照本协议第1.3条所述的价格，随时一次或多次从乙方购买或指定一人或多人(“被指定人”)从乙方购买其目前和将来所持有的丙方的全部或部分股权（无论乙方出资额和/或持股比例将来是否发生变化）的一项不可撤销的专有权(“股权购买权”)。除甲方和被指定人外，任何第三人均不得享有股权购买权或其他与乙方股权有关的权利。丙方特此同意乙方向甲方授予股权购买权。本款及本协议所规定的“人”指个人、公司、合营企业、合伙、企业、信托或非公司组织。Party B hereby irrevocably grant Party A an irrevocable and exclusive right to purchase, or designate one or more persons (each, a “Designee”) topurchase the equity interests in Party C now and in the future held by Party B (regardless whether Party B’s capital contribution amount and/orpercentage of shareholding will be changed in the future) once or at multiple times at any time in part or in whole at Party A’s sole and absolutediscretion to the extent permitted by Chinese laws and at the price described in Section 1.3 herein (such right being the “Equity Interest PurchaseOption”). Except for Party A and the Designee(s), no other person shall be entitled to the Equity Interest Purchase Option or other rights withrespect to the equity interests of Party B. Party C hereby agrees to the grant by Party B of the Equity Interest Purchase Option to Party A. Theterm “person” as used herein shall refer to individuals, corporations, partnerships, partners, enterprises, trusts or noncorporate organizations.3秘密文件Strictly Confidential1.2行使步骤Steps for Exercise of Equity Interest Purchase Option甲方行使其股权购买权以符合中国法律和法规的规定为前提。甲方行使股权购买权时，应向乙方发出书面通知(“股权购买通知”)，股权购买通知应载明以下事项：(a)甲方关于行使股权购买权的决定；(b)甲方拟从乙方购买的股权份额(“被购买的股权”)；和(c)被购买的股权的买入日期。Subject to the provisions of the laws and regulations of China, Party A may exercise the Equity Interest Purchase Option by issuing a writtennotice to Party B (the “Equity Interest Purchase Option Notice”), specifying: (a) Party A’s decision to exercise the Equity Interest PurchaseOption; (b) the portion of equity interests to be purchased from Party B (the “Optioned Interests”); and (c) the date for purchasing the OptionedInterests.1.3股权买价Equity Interest Purchase Price被购买的股权的买价（“股权买价”）应是行权当时中国法律允许的最低价格。乙方收到该股权对价后，应当提供给丙方与该股权买价相同金额的借款，该借款的期限为20年，且为无息。乙方应当在该借款期限届满时就该借款放弃对丙方的债权。The purchase price of the Optioned Interests (the “Equity Interest Purchase Price”) shall be the lowest price permitted by the laws of China. Afterreceiving the Equity Interest Purchase Price, Party B shall make an interestfree loan equivalent to the amount of Equity Interest Purchase Price toParty C, of which term is 20 years. Each member of Party B shall give up his(her) creditor’s right when the loan term expires.4秘密文件Strictly Confidential1.4转让被购买股权Transfer of Optioned Interests甲方每次行使股权购买权时：For each exercise of the Equity Interest Purchase Option:1.4.1乙方应责成丙方及时召开股东会会议，在该会议上，应通过批准乙方向甲方和/或被指定人转让被购买的股权的决议；Party B shall cause Party C to promptly convene a shareholders meeting, at which a resolution shall be adopted approving Party B’stransfer of the Optioned Interests to Party A and/or the Designee(s);1.4.2乙方应就其向甲方和/或被指定人转让被购买股权取得丙方其他股东同意该转让并放弃优先购买权的书面声明。Party B shall obtain written statements from the other shareholder of Party C giving consent to the transfer of the equity interest to PartyA and/or the Designee(s) and waiving any right of first refusal related thereto.1.4.3乙方应与甲方和/或(在适用的情况下)被指定人按照本协议及股权购买通知的规定，为每次转让签订股权转让协议；Party B shall execute a share transfer contract with respect to each transfer with Party A and/or each Designee (whichever is applicable),in accordance with the provisions of this Agreement and the Equity Interest Purchase Option Notice regarding the Optioned Interests;5秘密文件Strictly Confidential1.4.4有关方应签署所有其他所需协议、协议或文件，取得全部所需的政府批准和同意，并采取所有所需行动，在不附带任何担保权益的情况下，将被购买的股权的有效所有权转移给甲方和/或被指定人并使甲方和/或被指定人成为被购买的股权的登记在册所有人。为本款及本协议的目的，“担保权益”包括担保、抵押、第三方权利或权益，任何购股权、收购权、优先购买权、抵销权、所有权扣留或其他担保安排等；但为了明确起见，不包括在本协议、乙方股权质押协议项下产生的任何担保权益。本款及本协议所规定的“乙方股权质押协议”指甲方、乙方和丙方于本协议签署之日签订的股权质押协议，根据股权质押协议，乙方为担保丙方能履行丙方与甲方签订的独家业务合作协议项下的义务，而向甲方质押其在丙方的全部乙方股权。The relevant Parties shall execute all other necessary contracts, agreements or documents, obtain all necessary government licenses andpermits and take all necessary actions to transfer valid ownership of the Optioned Interests to Party A and/or the Designee(s),unencumbered by any security interests, and cause Party A and/or the Designee(s) to become the registered owner(s) of the OptionedInterests. For the purpose of this Section and this Agreement, “security interests” shall include securities, mortgages, third party’s rightsor interests, any stock options, acquisition right, right of first refusal, right to offset, ownership retention or other security arrangements,but shall be deemed to exclude any security interest created by this Agreement and Party B’s Equity Interest Pledge Agreement. “PartyB’s Equity Interest Pledge Agreement” as used in this Section and this Agreement shall refer to the Equity Interest Pledge Agreementexecuted by and among Party A, Party B and Party C on the date of this Agreement, whereby Party B pledge all of their equity interests inParty C to Party A, in order to guarantee Party C’s performance of its obligations under the Exclusive Business Corporation Agreementexecuted by and between Party C and Party A.6秘密文件Strictly Confidential2.知识产权独家购买权Exclusive Option regarding the Intellectual Property Rights2.1本协议签订之日起，若乙方拟转让、出售或以其他方式处置（任一处置方式以下简称“转让”）其拥有或持有的全部或部分知识产权（以下称“知识产权”，定义见第2.4条），甲方有权独家购买该等知识产权。From the date hereof, if Party B proposes to transfer, sell or dispose of (each, a “transfer”) all or any part of the intellectual property rights ownedor held by Party B (“IPR”), Party A shall have exclusive option.2.2若乙方有意转让全部或部分知识产权，应事先向甲方发出书面通知(“转让通知”)，转让通知应载明以下事项：(a) 乙方关于转让知识产权的意向；(b) 乙方拟转让的知识产权清单(“拟转让知识产权”)及转让的价格和其他条件。转让通知视为乙方向甲方发出的一份要约，按照该要约，乙方同意按转让通知中指定的价格条件向甲方转让全部或部分拟转让知识产权。Prior to Party B proposes to transfer all or any part of its IPR, Party B shall give Party A a written notice (“Transfer Notice”), which shall specify (a)Party B’s intention to make the transfer; (b) the list of IPR to be transferred (“Offered IPR”) and the consideration and other conditions uponwhich the transfer is to be made. The Transfer Notice constitutes Party B’s offer given to Party A, pursuant to which, Party B agrees to transfer allor any part of its Offered IPR to Party A based on the same conditions described in the Transfer Notice.7秘密文件Strictly Confidential2.3甲方收到转让通知后，有权在30日内选择按照转让通知中列明的转让价格和条件购买拟转让知识产权。如果甲方行使其独家购买权，双方应于甲方收到转让通知后45日内签订有关的知识产权转让协议，乙方应办理法律规定的知识产权转让的批准和登记手续。Party A shall have an option for a period of 30 days from Party A’s receipt of the Transfer Notice to elect to purchase the Offered IPR at the sameprice and subject to the same conditions as described in the Transfer Notice. If Party A decides to exercise its exclusive option, the parties shallenter into relevant IPR transfer agreement within 45 days upon Party A’s receipt of the Transfer Notice and Party B is responsible to complete allrelated approvals and registrations formalities as prescribed by the PRC law.2.4本协议第2条所称“知识产权”指任何知识产权，包括但不限于著作权、专利权、专利申请权、商标、域名、软件、专有技术，并包括前述知识产权申请权利以及登记注册的权利，以及其他所有与前述知识产权有关的权利和权益。The “IPR” referred to in this Article 2 means any intellectual property rights, including, without limitations, copyrights, patents, patentapplications, trademarks, domain names, software and knowhow together with (a) all rights to apply for or register any of the foregoing and (b) allother rights and interests to any of the foregoing.8秘密文件Strictly Confidential3.承诺Covenants3.1有关丙方的承诺Covenants regarding Party C乙方（作为丙方的股东）和丙方在此承诺：Party B (as the shareholders of Party C) and Party C hereby covenant as follows:3.1.1未经甲方的事先书面同意，不以任何形式补充、更改或修改丙方公司章程文件，增加或减少其注册资本，或以其他方式改变其注册资本结构；Without the prior written consent of Party A, they shall not in any manner supplement, change or amend the articles of association andbylaws of Party C, increase or decrease its registered capital, or change its structure of registered capital in other manners;3.1.2按照良好的财务和商业标准及惯例，保持其公司的存续，审慎地及有效地经营其业务和处理事务；They shall maintain Party C’s corporate existence in accordance with good financial and business standards and practices by prudentlyand effectively operating its business and handling its affairs;3.1.3未经甲方的事先书面同意，不在本协议签署之日起的任何时间出售、转让、抵押或以其他方式处置丙方的任何资产、业务或收入的合法或受益权益，或允许在其上设置任何其他担保权益；Without the prior written consent of Party A, they shall not at any time following the date hereof, sell, transfer, mortgage or dispose of inany manner any assets of Party C or legal or beneficial interest in the business or revenues of Party C, or allow the encumbrance thereonof any security interest;3.1.4未经甲方的事先书面同意，不发生、继承、保证或容许存在任何债务，但(i)正常或日常业务过程中产生而不是通过借款方式产生的债务；和(ii)已向甲方披露和得到甲方书面同意的债务除外；Without the prior written consent of Party A, they shall not incur, inherit, guarantee or suffer the existence of any debt, except for (i)debts incurred in the ordinary course of business other than through loans; and (ii) debts disclosed to Party A for which Party A’swritten consent has been obtained;9秘密文件Strictly Confidential3.1.5一直在正常业务过程中经营所有业务，以保持丙方的资产价值，不进行任何足以影响其经营状况和资产价值的作为/不作为；They shall always operate all of Party C’s businesses during the ordinary course of business to maintain the asset value of Party C andrefrain from any action/omission that may affect Party C’s operating status and asset value;3.1.6未经甲方的事先书面同意，不得让丙方签订任何重大协议，但在正常业务过程中签订的协议除外(就本段而言，如果一份协议的价值超过【人民币10万元】，即被视为重大协议)；Without the prior written consent of Party A, they shall not cause Party C to execute any major contract, except the contracts in theordinary course of business (for purpose of this subsection, a contract with a value exceeding RMB 100,000 shall be deemed a majorcontract);3.1.7未经甲方的事先书面同意，丙方不得向任何人提供贷款或信贷；Without the prior written consent of Party A, they shall not cause Party C to provide any person with any loan or credit;3.1.8应甲方要求，向其提供所有关于丙方的营运和财务状况的资料；They shall provide Party A with information on Party C’s business operations and financial condition at Party A’s request;10秘密文件Strictly Confidential3.1.9如甲方提出要求，丙方应从甲方接受的保险公司处购买和持有有关其资产和业务的保险，该保险的金额和险种应与经营类似业务的公司一致；If requested by Party A, they shall procure and maintain insurance in respect of Party C’s assets and business from an insurance carrieracceptable to Party A, at an amount and type of coverage typical for companies that operate similar businesses;3.1.10未经甲方的事先书面同意，丙方不得与任何人合并或联合，或对任何人进行收购或投资；Without the prior written consent of Party A, they shall not cause or permit Party C to merge, consolidate with, acquire or invest in anyperson;3.1.11将发生的或可能发生的与丙方资产、业务或收入有关的诉讼、仲裁或行政程序立即通知甲方；They shall immediately notify Party A of the occurrence or possible occurrence of any litigation, arbitration or administrative proceedingsrelating to Party C’s assets, business or revenue;3.1.12为保持丙方对其全部资产的所有权，签署所有必要或适当的文件，采取所有必要或适当的行动和提出所有必要或适当的控告或对所有索偿进行必要和适当的抗辩；To maintain the ownership by Party C of all of its assets, they shall execute all necessary or appropriate documents, take all necessary orappropriate actions and file all necessary or appropriate complaints or raise necessary and appropriate defenses against all claims;11秘密文件Strictly Confidential3.1.13未经甲方事先书面同意，不得以任何形式派发股息予各股东，但一经甲方要求，丙方应立即将其所有可分配利润全部立即分配给其各股东；及Without the prior written consent of Party A, they shall ensure that Party C shall not in any manner distribute dividends to itsshareholders, provided that upon Party A’s written request, Party C shall immediately distribute all distributable profits to itsshareholders; and3.1.14根据甲方的要求，委任由其指定的任何人士出任丙方的董事和/或执行董事。At the request of Party A, they shall appoint any persons designated by Party A as the director and/or executive director of Party C.3.2乙方和丙方的承诺Covenants of Party B and Party C乙方承诺：Party B hereby covenant as follows:3.2.1未经甲方的事先书面同意，不出售、转让、抵押或以其他方式处置其拥有的丙方的股权的合法或受益权益，或允许在其上设置任何其他担保权益，但根据乙方签署的《股权质押协议》在该股权上设置的质押则除外；Without the prior written consent of Party A, Party B shall not sell, transfer, mortgage or dispose of in any other manner any legal orbeneficial interest in the equity interests in Party C held by Party B, or allow the encumbrance thereon of any security interest, except forthe pledge placed on these equity interests in accordance with Party B’s Equity Interest Pledge Agreement;12秘密文件Strictly Confidential3.2.2促使丙方股东会和/或执行董事不批准在未经甲方的事先书面同意的情况下，出售、转让、抵押或以其他方式处置任何乙方持有之丙方的股权的合法权益或受益权，或允许在其上设置任何其他担保权益，但批准根据乙方签署的《股权质押协议》在乙方股权上设置的质押则除外；Party B shall cause the shareholders’ meeting and/or the executive director of Party C not to approve the sale, transfer, mortgage ordisposition in any other manner of any legal or beneficial interest in the equity interests in Party C held by Party B, or allow theencumbrance thereon of any security interest, without the prior written consent of Party A, except for the pledge placed on these equityinterests in accordance with Party B’s Equity Interest Pledge Agreement;3.2.3未经甲方的事先书面同意的情况下，对于丙方与任何人合并或联合，或对任何人进行收购或投资，乙方将促成丙方股东会或执行董事不予批准；Party B shall cause the shareholders’ meeting or the executive director of Party C not to approve the merger or consolidation with anyperson, or the acquisition of or investment in any person, without the prior written consent of Party A;3.2.4将发生的或可能发生的任何关于其所拥有的股权的诉讼、仲裁或行政程序立即通知甲方；Party B shall immediately notify Party A of the occurrence or possible occurrence of any litigation, arbitration or administrativeproceedings relating to the equity interests in Party C held by Party B;13秘密文件Strictly Confidential3.2.5促使丙方股东会或执行董事表决赞成本协议规定的被购买的股权的转让并应甲方之要求采取其他任何行动；Party B shall cause the shareholders’ meeting or the executive director of Party C to vote their approval of the transfer of the OptionedInterests as set forth in this Agreement and to take any and all other actions that may be requested by Party A;3.2.6为保持其对股权的所有权，签署所有必要或适当的文件，采取所有必要或适当的行动和提出所有必要或适当的控告或对所有索偿进行必要和适当的抗辩；To the extent necessary to maintain Party B’s ownership in Party C, Party B shall execute all necessary or appropriate documents, take allnecessary or appropriate actions and file all necessary or appropriate complaints or raise necessary and appropriate defenses against allclaims;3.2.7应甲方的要求，委任由其指定的任何人士出任丙方的董事和/或执行董事；Party B shall appoint any designee of Party A as the director and/or executive director of Party C, at the request of Party A;3.2.8经甲方随时要求，应向其指定的代表在任何时间无条件地根据本协议的股权购买权立即转让其股权，并放弃其对其他现有股东进行上述股权转让所享有的优先购买权（如有的话）；和At the request of Party A at any time, Party B shall promptly and unconditionally transfer its equity interests in Party C to Party A’sDesignee(s) in accordance with the Equity Interest Purchase Option under this Agreement, and Party B hereby waives its right of firstrefusal (if any) to the share transfer by the other existing shareholder of Party C (if any); and14秘密文件Strictly Confidential3.2.9严格遵守本协议及各方共同或分别签订的其他协议的各项规定，切实履行该等协议项下的各项义务，并不进行任何足以影响该等协议的有效性和可执行性的作为/不作为。如果乙方对于本协议项下或乙方股权质押协议下或对甲方的授权委托书中的股权，还留存有任何权利，除非甲方书面指示，否则乙方仍不得行使该权利。Party B shall strictly abide by the provisions of this Agreement and other contracts jointly or separately executed by and among Party B,Party C and Party A, perform the obligations hereunder and thereunder, and refrain from any action/omission that may affect theeffectiveness and enforceability thereof. To the extent that Party B has any remaining rights with respect to the equity interests subject tothis Agreement hereunder or under Party B’s Equity Interest Pledge Agreement or under the Power of Attorney granted in favor of PartyA, Party B shall not exercise such rights except in accordance with the written instructions of Party A.4.陈述和保证Representations and Warranties乙方和丙方特此在本协议签署之日和每一个转让日向甲方共同及分别陈述和保证如下：Party B and Party C hereby represent and warrant to Party A, jointly and severally, as of the date of this Agreement and each date of transfer of theOptioned Interests, that:4.1其具有签订和交付本协议和其为一方的、根据本协议为每一次转让被购买的股权而签订的任何股权转让协议(各称为"转让协议")，并履行其在本协议和任何转让协议项下的义务的权力和能力。乙方和丙方同意在甲方行使购买权时，他们将签署与本协议条款一致的转让协议。本协议和其是一方的各转让协议一旦签署后，构成或将对其构成合法、有效及具有约束力的义务并可按照其条款对其强制执行；They have the authority to execute and deliver this Agreement and any share transfer contracts to which they are a party concerning theOptioned Interests to be transferred thereunder (each, a “Transfer Contracts”), and to perform their obligations under this Agreement and anyTransfer Contracts. Party B and Party C agree to enter into Transfer Contracts consistent with the terms of this Agreement upon Party A’s exerciseof the Equity Interest Purchase Option. This Agreement and the Transfer Contracts to which they are a party constitute or will constitute theirlegal, valid and binding obligations and shall be enforceable against them in accordance with the provisions thereof;15秘密文件Strictly Confidential4.2无论是本协议或任何转让协议的签署和交付还是其在本协议或任何转让协议项下的义务的履行均不会：(i)导致违反任何有关的中国法律；(ii)与丙方章程或其他组织文件相抵触；(iii)导致违反其是一方或对其有约束力的任何协议或文件，或构成其是一方或对其有约束力的任何协议或文件项下的违约；(iv)导致违反有关向任何一方颁发的任何许可或批准的授予和(或)继续有效的任何条件；或(v)导致向任何一方颁发的任何许可或批准中止或被撤销或附加条件；The execution and delivery of this Agreement or any Transfer Contracts and the obligations under this Agreement or any Transfer Contracts shallnot: (i) cause any violation of any applicable laws of China; (ii) be inconsistent with the articles of association, bylaws or other organizationaldocuments of Party C; (iii) cause the violation of any contracts or instruments to which they are a party or which are binding on them, orconstitute any breach under any contracts or instruments to which they are a party or which are binding on them; (iv) cause any violation of anycondition for the grant and/or continued effectiveness of any licenses or permits issued to either of them; or (v) cause the suspension orrevocation of or imposition of additional conditions to any licenses or permits issued to either of them;4.3乙方对其在丙方拥有的股权拥有良好和可出售的所有权，除乙方签署的《股权质押协议》外，乙方在上述股权上没有设置任何担保权益；Party B have a good and merchantable title to the equity interests in Party C they hold. Except for Party B’s Equity Interest Pledge Agreement,Party B have not placed any security interest on such equity interests;16秘密文件Strictly Confidential4.4目前没有悬而未决的或构成威胁的与丙方的股权、丙方资产有关的或与丙方有关的诉讼、仲裁或行政程序。There are no pending or threatened litigation, arbitration or administrative proceedings relating to the equity interests in Party C, assets of Party Cor Party C.5.生效日Effective Date5.1本协议于各方签署本协议之日生效，有效期10年，经甲方选择可再延长10年。This Agreement shall become effective upon the date hereof, and remain effective for a term of 10 years, and may be renewed for an additional 10years at Party A’s election.5.2若丙方股东发生变化，由新股东签署此协议，在此协议签署之日，原协议自动视为无效。In the event of a change in the shareholders of Party C, the new shareholder should sign this agreement and the original agreement willautomatically be deemed invalid on the date of signing of this agreement.17秘密文件Strictly Confidential6.适用法律与争议解决Governing Law and Resolution of Disputes6.1适用法律Governing law本协议的订立、效力、解释、履行、修改和终止以及争议解决均适用中国正式公布并可公开得到的法律。对中国正式公布并可公开得到的法律没有规定的事项，将适用国际法律原则和惯例。The execution, effectiveness, construction, performance, amendment and termination of this Agreement and the resolution of disputes hereundershall be governed by the formally published and publicly available laws of China. Matters not covered by formally published and publiclyavailable laws of China shall be governed by international legal principles and practices.6.2争议的解决方法Methods of Resolution of Disputes因解释和履行本协议而发生的任何争议，本协议各方应首先通过友好协商的方式加以解决。如果在一方向其他方发出要求协商解决的书面通知后30天之内争议仍然得不到解决，则任何一方均可将有关争议提交给中国国际经济贸易仲裁委员会，由该会按照其届时有效的仲裁规则仲裁解决。仲裁应在北京进行，使用之语言为中文。仲裁裁决是终局性的，对各方均有约束力。In the event of any dispute with respect to the construction and performance of this Agreement, the Parties shall first resolve the dispute throughfriendly negotiations. In the event the Parties fail to reach an agreement on the dispute within 30 days after either Party’s request to the otherParties for resolution of the dispute through negotiations, either Party may submit the relevant dispute to the China International Economic andTrade Arbitration Commission for arbitration, in accordance with its then effective arbitration rules. The arbitration shall be conducted in Beijing,and the language used in arbitration shall be Chinese. The arbitration award shall be final and binding on all Parties.18秘密文件Strictly Confidential7.税款、费用Taxes and Fees每一方应承担根据中国法律因准备和签署本协议和各转让协议以及完成本协议和各转让协议拟定的交易而由该方发生的或对其征收的任何和全部的转让和注册的税、花费和费用。Each Party shall pay any and all transfer and registration tax, expenses and fees incurred thereby or levied thereon in accordance with the laws of China inconnection with the preparation and execution of this Agreement and the Transfer Contracts, as well as the consummation of the transactionscontemplated under this Agreement and the Transfer Contracts.8.通知Notices8.1本协议项下要求或发出的所有通知和其他通信应通过专人递送、挂号邮寄、邮资预付或商业快递服务或传真的方式发到该方下列地址。每一通知还应再以电子邮件送达。该等通知视为有效送达的日期按如下方式确定：All notices and other communications required or permitted to be given pursuant to this Agreement shall be delivered personally or sent byregistered mail, postage prepaid, by a commercial courier service or by facsimile transmission to the address of such Party set forth below. Aconfirmation copy of each notice shall also be sent by email. The dates on which notices shall be deemed to have been effectively given shall bedetermined as follows:8.1.1通知如果是以专人递送、快递服务或挂号邮寄、邮资预付发出的，则以于设定为通知的地址在接收或拒收之日为有效送达日。Notices given by personal delivery, by courier service or by registered mail, postage prepaid, shall be deemed effectively given on thedate of receipt or refusal at the address specified for notices.19秘密文件Strictly Confidential8.1.2通知如果是以传真发出的，则以成功传送之日为有效送达日（应以自动生成的传送确认信息为证）。Notices given by facsimile transmission shall be deemed effectively given on the date of successful transmission (as evidenced by anautomatically generated confirmation of transmission).8.2为通知的目的，各方地址如下：For the purpose of notices, the addresses of the Parties are as follows:甲方：中传天下信息科技（深圳）有限公司Party A:Zhongchuan Tianxia Information Technology (Shenzhen) Co., Ltd.地址：深圳市南山区高新中三道2号深圳软件园一期五栋401AAddress:401A, Building 5, Phase 1, Shenzhen Software Park, No.2 Gaoxin Zhongsan Road, Nanshan District, Shenzhen.收件人：洪婷Attn:Hong Ting乙方：Party B: 宋雪松Song Xuesong住所：天津市河西区广东路中裕园33702Address:Zhongyu Yuan 33702, Guangdong Road, Hexi District, Tianjin20秘密文件Strictly Confidential陈蔚力Chen Weili住所：广东省深圳市宝安区宝城上川路15号Address:Baocheng Shangchuan Road 15, Baoan District, Shenzhen, Guangdong王平Wang Ping住所：广东省深圳市南山区高新南环路36号彩虹之岸12栋4AAddress:Caihong Zhi’an Building No.12 Suite 4A, Gaoxin Nanhuan Road 36, Nanshan District, Shenzhen, Guangdong刘东来Liu Donglai住所：天津市和平区南京路诚基经贸中心1号楼2门1702号Address:No 1702, Door 2, Build 1, Chengji Economic and Trade Centre, Nanjing Road, Heping District, Tianjin.丙方：北京中传视讯科技有限公司Party C:Beijing Mobile Vision Technology Co., Ltd.地址：北京市朝阳区光华路9号SOHO3QLAB32Address: LAB32, SOHO3Q, No 9, Guanghua Road, Chaoyang District, Beijing .收件人：宋雪松Attn: Song Xuesong8.3任何一方可按本条规定随时给其他方发出通知来改变其接收通知的地址。Any Party may at any time change its address for notices by a notice delivered to the other Parties in accordance with the terms hereof.21秘密文件Strictly Confidential9.保密责任Confidentiality各方承认及确定彼此就有关本协议而交换的任何口头或书面资料均属机密资料。各方应当对所有该等资料予以保密，而在未得其他方书面同意前，不得向任何第三者披露任何有关资料，惟下列情况除外：(a)公众人士知悉或将会知悉该等资料(并非由接受资料之一方擅自向公众披露)；(b)适用法律法规或股票交易的规则或规例所需披露之资料；或(c)由任何一方就本协议所述交易而需向其法律或财务顾问披露之资料而该法律或财务顾问亦需遵守与本条款相类似之保密责任。如任何一方工作人员或聘请机构的泄密均视为该方的泄密，需依本协议承担违约责任。无论本协议以任何理由终止，本条款仍然生效。The Parties acknowledge that any oral or written information exchanged among them with respect to this Agreement is confidential information. Each Partyshall maintain the confidentiality of all such information, and without obtaining the written consent of other Parties, it shall not disclose any relevantinformation to any third parties, except in the following circumstances: (a) such information is or will be in the public domain (provided that this is not theresult of a public disclosure by the receiving party); (b) information disclosed as required by applicable laws or rules or regulations of any stock exchange;or (c) information required to be disclosed by any Party to its legal counsel or financial advisor regarding the transaction contemplated hereunder, and suchlegal counsel or financial advisor are also bound by confidentiality duties similar to the duties in this section. Disclosure of any confidential information bythe staff members or agency hired by any Party shall be deemed disclosure of such confidential information by such Party, which Party shall be held liablefor breach of this Agreement. This Section shall survive the termination of this Agreement for any reason.22秘密文件Strictly Confidential10.进一步保证Further Warranties各方同意迅速签署为执行本协议的各项规定和目的而合理需要的或对其有利的文件，以及为执行本协议的各项规定和目的而采取合理需要的或对其有利的进一步行动。The Parties agree to promptly execute documents that are reasonably required for or are conducive to the implementation of the provisions and purposes ofthis Agreement and take further actions that are reasonably required for or are conducive to the implementation of the provisions and purposes of thisAgreement.11.其他Miscellaneous11.1修订、修改与补充Amendment, change and supplement对本协议作出修订、修改与补充，必须经每一方签署书面协议。Any amendment, change and supplement to this Agreement shall require the execution of a written agreement by all of the Parties.11.2完整协议Entire agreement除了在本协议签署后所作出的书面修订、补充或修改以外，本协议构成本协议各方就本协议标的物所达成的完整协议，取代在此之前就本协议标的物所达成的所有口头或书面的协商、陈述和协议。 Except for the amendments, supplements or changes in writing executed after theexecution of this Agreement, this Agreement shall constitute the entire agreement reached by and among the Parties hereto with respect to thesubject matter hereof, and shall supercede all prior oral and written consultations, representations and contracts reached with respect to thesubject matter of this Agreement.23秘密文件Strictly Confidential11.3标题Headings本协议的标题仅为方便阅读而设，不应被用来解释、说明或在其他方面影响本协议各项规定的含义。The headings of this Agreement are for convenience only, and shall not be used to interpret, explain or otherwise affect the meanings of theprovisions of this Agreement.11.4语言Language本协议以中文和英文书就，一式八份，乙方共计六名股东以及甲方、丙方各持一份，具有同等效力；中英文版本如有冲突，应以中文版为准。This Agreement is written in both Chinese and English language in eight copies, the 6 shareholders of Party B, Party A and Party C having onecopy with equal legal validity respectively; in case there is any conflict between the Chinese version and the English version, the Chinese versionshall prevail.11.5可分割性Severability如果本协议有任何一条或多条规定根据任何法律或法规在任何方面被裁定为无效、不合法或不可执行，本协议其余规定的有效性、合法性或可执行性不应因此在任何方面受到影响或损害。各方应通过诚意磋商，争取以法律许可以及各方期望的最大限度内有效的规定取代那些无效、不合法或不可执行的规定，而该等有效的规定所产生的经济效果应尽可能与那些无效、不合法或不能强制执行的规定所产生的经济效果相似。In the event that one or several of the provisions of this Agreement are found to be invalid, illegal or unenforceable in any aspect in accordancewith any laws or regulations, the validity, legality or enforceability of the remaining provisions of this Agreement shall not be affected orcompromised in any respect. The Parties shall strive in good faith to replace such invalid, illegal or unenforceable provisions with effectiveprovisions that accomplish to the greatest extent permitted by law and the intentions of the Parties, and the economic effect of such effectiveprovisions shall be as close as possible to the economic effect of those invalid, illegal or unenforceable provisions.24秘密文件Strictly Confidential11.6继任者Successors本协议对各方各自的继任者和各方所允许的受让方应具有约束力并对其有利。This Agreement shall be binding on and shall inure to the interest of the respective successors of the Parties and the permitted assigns of suchParties.11.7继续有效Survival11.7.1协议期满或提前终止前因本协议而发生的或到期的任何义务在本协议期满或提前终止后继续有效。Any obligations that occur or that are due as a result of this Agreement upon the expiration or early termination of this Agreement shallsurvive the expiration or early termination thereof.11.7.2本协议第5、6、9条和本第11.7条的规定在本协议终止后继续有效。The provisions of Articles 5, 6, 9 and this Section 11.7 shall survive the termination of this Agreement.25秘密文件Strictly Confidential11.8弃权Waivers任何一方可以对本协议的条款和条件作出弃权，但必须经书面作出并经各方签字。一方在某种情况下就其他方的违约所作的弃权不应被视为该方在其他情况下就类似的违约已经对其他方作出弃权。Any Party may waive the terms and conditions of this Agreement, provided that such a waiver must be provided in writing and shall require thesignatures of the Parties. No waiver by any Party in certain circumstances with respect to a breach by other Parties shall operate as a waiver bysuch a Party with respect to any similar breach in other circumstances.本页其余部分刻意留为空白The Remainder of this page is intentionally left blank26秘密文件Strictly Confidential有鉴于此，各方已自行或使得其各自授权代表于文首所载日期签署本独家购买权协议。IN WITNESS WHEREOF, the Parties have executed, or caused their respective duly authorized representatives to execute, this Exclusive Option Agreement as ofthe date first above written.甲方：中传天下信息科技（深圳）有限公司（盖章）Party A: Zhongchuan Tianxia Information Technology (Shenzhen) Co., Ltd. (Seal)签字：By:/s/ Hong Ting姓名：洪婷Name: Hong Ting职务：总经理Title: General Manager秘密文件 Strictly Confidential有鉴于此，各方已自行或使得其各自授权代表于文首所载日期签署本独家购买权协议。IN WITNESS WHEREOF, the Parties have executed, or caused their respective duly authorized representatives to execute, this Exclusive Option Agreement as ofthe date first above written.乙方：Party B:宋雪松Song Xuesong签字：By:/s/ Song Xuesong秘密文件 Strictly Confidential有鉴于此，各方已自行或使得其各自授权代表于文首所载日期签署本独家购买权协议。IN WITNESS WHEREOF, the Parties have executed, or caused their respective duly authorized representatives to execute, this Exclusive Option Agreement as ofthe date first above written.乙方：Party B:陈蔚力Chen Weili签字：By:/s/ Chen Weili秘密文件 Strictly Confidential有鉴于此，各方已自行或使得其各自授权代表于文首所载日期签署本独家购买权协议。IN WITNESS WHEREOF, the Parties have executed, or caused their respective duly authorized representatives to execute, this Exclusive Option Agreement as ofthe date first above written.乙方：Party B:王平Wang Ping签字：By:/s/ Wang Ping秘密文件 Strictly Confidential有鉴于此，各方已自行或使得其各自授权代表于文首所载日期签署本独家购买权协议。IN WITNESS WHEREOF, the Parties have executed, or caused their respective duly authorized representatives to execute, this Exclusive Option Agreement as ofthe date first above written.乙方：Party B:刘东来Liu Donglai签字：By:/s/ Liu Donglai秘密文件 Strictly Confidential有鉴于此，各方已自行或使得其各自授权代表于文首所载日期签署本独家购买权协议。IN WITNESS WHEREOF, the Parties have executed, or caused their respective duly authorized representatives to execute, this Exclusive Option Agreement as ofthe date first above written.丙方：北京中传视讯科技有限公司（盖章）Party B: Beijing Mobile Vision Technology Co., Ltd. (Seal)签字：By:/s/ Song Xuesong姓名：宋雪松Name:Song Xuesong职务：董事长Title:Chairman of the Board秘密文件 Strictly ConfidentialEX4.17 5 f20f2017ex417_luokung.htm EQUITY INTEREST PLEDGE AGREEMENT BY AND AMONG ZHONGCHUAN TIANXIA INFORMATION TECHNOLOGY(SHENZHEN) CO., LTD., XUESONG SONG, WEILI CHEN, PING WANG, DONGLAI LIU, AND BEIJING MOBILE VISION TECHNOLOGY CO., LTD., DATEDAUGUST 31, 2015Exhibit 4.17股权质押协议Equity Interest Pledge Agreement本股权质押协议（下称"本协议”）由下列各方于年月日在中华人民共和国（下称“中国”）北京签订：This Equity Interest Pledge Agreement (this "Agreement") has been executed by and among the following parties on in Beijing, the People’sRepublic of China (the “China” or “PRC”):甲方：中传天下信息科技（深圳）有限公司（下称“质权人”）Party A: Zhongchuan Tianxia Information Technology (Beijing) Co., Ltd. (“Pledgee”)地址：深圳市南山区高新中三道2号深圳软件园一期五栋401AAddress: 401A, Building 5, Phase 1, Shenzhen Software Park, No.2 Gaoxin Zhongsan Road, Nanshan District, Shenzhen统一社会信用代码： 91440300565701058RUniform Social Credit Code: 91440300565701058R乙方(下称“出质人”)：Party B ( “Pledgors”):a)宋雪松Song Xuesong身份证号码:ID Card No.:b)陈蔚力Chen Weili身份证号码:ID Card No.:1秘密文件 Strictly Confidentialc)王平Wang Ping身份证号码:ID Card No.:d)刘东来Liu Donglai身份证号码:ID Card No.:丙方：北京中传视讯科技有限公司Party C: Beijing Mobile Vision Technology Co., Ltd.地址：北京市朝阳区光华路9号SOHO3QLAB32Address: LAB32, SOHO3Q, No 9, Guanghua Road, Chaoyang District, Beijing统一社会信用代码：9111010576215249XMUniform Social Credit Code: 9111010576215249XM在本协议中，质权人、出质人和丙方以下各称“一方”，合称“各方”。In this Agreement, each of Pledgee, Pledgors and Party C shall be referred to as a "Party" respectively, and they shall be collectively referred to as the"Parties".鉴于：Whereas:1．出质人全部为中国境内居民自然人，共同持有丙方100%的股权。丙方是一家在中国注册成立的、主要从事手机视频技术研发、内容制作和产业化市场推广的有限责任公司。丙方有意在此确认出质人和质权人在本协议下的权利和义务并提供必要的协助登记该质权；All of the Pledgors are natural persons resided in PRC, and collectively hold 100% of the equity interest in Party C. Party C is a limited company registered inChina, mainly engaging in mobile video frequency technology research, development, content creation, sale and related industrialization promotion. Party Cacknowledges the respective rights and obligations of Pledgors and Pledgee under this Agreement, and intends to provide any necessary assistance inregistering the Pledge;2．质权人是一家在中国注册的外商独资企业。质权人与丙方于年月日签订了独家业务合作协议；Pledgee is a whollyforeignowned enterprise registered in China. Pledgee and Party C have executed an Exclusive Business Cooperation Agreement as of [*],[*];3．为了保证丙方全面履行独家业务合作协议项下的义务，出质人以其拥有的全部丙方股权向质权人做出质押担保。To ensure that Party C fully performs its obligations under the Exclusive Business Cooperation Agreement, Pledgors hereby pledge to the Pledgee all of theequity interests they hold in Party C.为了履行业务合作协议的条款，各方商定按照以下条款签订本协议。To perform the provisions of the Business Cooperation Agreement, the Parties have mutually agreed to execute this Agreement upon the following terms.2秘密文件 Strictly Confidential1.定义Definitions除非本协议另有规定，下列词语含义为：Unless otherwise provided herein, the terms below shall have the following meanings:1.1质权：指出质人根据本协议第2条给予质权人的担保物权，即指质权人所享有的，以出质人质押给质权人的股权折价或拍卖、变卖该股权的价款优先受偿的权利。Pledge: shall refer to the security interest granted by Pledgors to Pledgee pursuant to Article 2 of this Agreement, i.e., the right of Pledgee to becompensated on a preferential basis with the conversion, auction or sales price of the Equity Interest.1.2股权：指出质人现在和将来（通过增资和/或转股）合法持有的其在丙方的全部股权权益。Equity Interest: shall refer to all of the equity interest in Party C lawfully, held now and to be held (through capital increase and/or equity transfer)hereafter by Pledgors.1.3质押期限：指本协议第3条规定的期间。Term of Pledge: shall refer to the term set forth in Article 3 of this Agreement.1.4业务合作协议：指丙方与质权人于本协议日签订的独家业务合作协议。Business Cooperation Agreement: shall refer to the Exclusive Business Cooperation Agreement executed by and between Party C and Pledgee on thedate of this Agreement.1.5违约事件：指本协议第7条所列任何情况。Event of Default: shall refer to any of the circumstances set forth in Article 7 of this Agreement.1.6违约通知：指质权人根据本协议发出的宣布违约事件的通知。Notice of Default: shall refer to the notice issued by Pledgee in accordance with this Agreement declaring an Event of Default.3秘密文件 Strictly Confidential2.质权The Pledge作为丙方按时和全额支付业务合作协议项下质权人应得的任何或全部的款项，包括但不限于业务合作协议中规定的咨询和服务费的担保（无论该等费用的到期应付是由于到期日的到来、提前收款的要求或其它原因），以及丙方充分履行其在业务合作协议项下其他所有义务（丙方按时和全额支付业务合作协议项下甲方应得的任何或全部的款项及丙方在业务合作协议项下其他所有义务，以下统称为“被担保债务”）的担保，出质人特此将其现有或将拥有的丙方的全部股权权益质押给质权人。As collateral security for the timely and complete payment and performance when due (whether at stated maturity, by acceleration or otherwise) of any or all ofthe payments due (the “all payments in pledge”) by Party C, including without limitation the consulting and services fees payable to the Pledgee under theBusiness Cooperation Agreement, Pledgors hereby pledge to Pledgee a first security interest in all of Pledgors’ right, title and interest, whether now owned orhereafter acquired by Pledgors, in the Equity Interest of Party C.3.质押期限Term of Pledge3.1本质权自本协议项下的股权出质在相应的工商行政管理机关登记之日起生效，质权有效期持续到业务合作协议下所有丙方欠付质权人的款项结清为止。出质人和丙方应（一）自本协议签署之日起3个工作日内，将本协议的质权登记在丙方股东名册上，并（二）自本协议签署之日起10个工作日内向相应的工商行政管理机关申请登记本协议项下的质权。各方共同确认，为办理股权质押工商登记手续，各方及丙方其他股东应按照丙方所在地工商行政管理部门要求的形式签署、真实反映本协议项下质权信息的《股权质押合同》（以下简称“工商登记质押合同”）提交给工商管理机关，工商登记质押合同中未约定事项，仍以本协议约定为准。出质人和丙方应当按照中国法律法规和有关工商行政管理机关的各项要求，提交所有必要的文件并办理所有必要手续，保证质权在递交申请后尽快获得登记。如果出质人持有的丙方注册资本数额增加（不管是通过直接认缴丙方的增资还是从其他股东处受让股权），各方一致同意将采取一切必要的行动和签署一切必要的文件以按照登记机关的要求完成质权的变更登记，以确保本协议项下的质权的持续有效。The Pledge shall become effective on such date when the pledge of the Equity Interest contemplated herein has been registered’ with relevantadministration for industry and commerce (the “AIC”). The Pledge shall be continuously valid until all payments due under the Business CooperationAgreement have been fulfilled by Party C. Pledgors and Party C shall (1) register the Pledge in the shareholders' register of Party C within 3 businessdays following the execution of this Agreement, and (2) submit an application to the AIC for the registration of the Pledge of the Equity Interestcontemplated herein within 10 business days following the execution of this Agreement. The parties covenant that for the purpose of registration of thePledge, the parties hereto and all other shareholders of Party C shall submit to the AIC the Equity Interest Pledge Contract in the form required by theAIC at the location of Party C which shall truly reflect the information of the Pledge hereunder (the “AIC Pledge Contract”). For matters not specified inthe AIC Pledge Contract, the parties shall be bound by the provisions of this Agreement. Pledgors and Party C shall submit all necessary documentsand complete all necessary procedures, as required by the PRC laws and regulations and the relevant AIC, to ensure that the Pledge of the EquityInterest shall be registered with the AIC as soon as possible after filing. In the event that the amount of registered capital held by Pledgors is increased(either by subscribing increased registered capital from Party C or acquiring equity interest from other shareholders), the Parties hereto agree that theyshall take any necessary action and execute any necessary document to complete the registration of change of Pledge according to the requirement ofAIC so that the Pledge in this Agreement remains effective.4秘密文件 Strictly Confidential3.2质押期限内，如丙方未按业务合作协议交付咨询服务费等费用，质权人有权但无义务按本协议的规定处分质权。During the Term of Pledge, in the event Party C fails to pay the exclusive consulting or service fees in accordance with the Business CooperationAgreement, Pledgee shall have the right, but not the obligation, to dispose of the Pledge in accordance with the provisions of this Agreement.4.质权凭证的保管Custody of Records for Equity Interest subject to Pledge4.1在本协议规定的质押期限内，出质人应将其在丙方的股权出资证明书及记载质权的股东名册交付质权人保管。出质人应在本协议签订之日起一周内将上述股权出资证明书及股东名册交付给质权人。质权人将在本协议规定的全部质押期间一直保管这些项目。During the Term of Pledge set forth in this Agreement, Pledgors shall deliver to Pledgee's custody the capital contribution certificate for the EquityInterest and the shareholders' register containing the Pledge within one week from the execution of this Agreement. Pledgee shall have custody of suchitems during the entire Term of Pledge set forth in this Agreement.4.2在质押期限内，股权所产生的红利应当无条件归质权人所有。Dividends generated by the Equity Interest shall be unconditionally owned by the Pledgee during the Term of Pledge.5秘密文件 Strictly Confidential5.出质人的声明和保证Representations and Warranties of Pledgors5.1出质人是股权唯一的合法所有人。Pledgors are the sole legal and beneficial owners of the Equity Interest.5.2质权人有权以本协议规定的方式处分并转让股权。Pledgee shall have the right to dispose of and transfer the Equity Interest in accordance with the provisions set forth in this Agreement.5.3除本质权之外，出质人未在股权上设置任何其他质押权利或其他担保权益。Except for the Pledge, Pledgors have not placed any security interest or other encumbrance on the Equity Interest.6.出质人的承诺和确认Covenants and Further Agreements of Pledgors6.1在本协议存续期间，所有出质人向质权人承诺，出质人将：All of the Pledgors hereby covenant to the Pledgee, that during the term of this Agreement, Pledgors shall:6.1.1除履行由出质人与质权人、丙方于本协议签署日签订的《独家购买权合同》外，未经质权人事先书面同意，不得转让股权，不得在股权上设立或允许存在任何担保或其他债务负担；not transfer the Equity Interest, place or permit the existence of any security interest or other encumbrance on the Equity Interest, without theprior written consent of Pledgee, except for the performance of the Exclusive Option Agreement executed by Pledgors, the Pledgee and Party Con the execution date of this Agreement;6秘密文件 Strictly Confidential6.1.2遵守并执行所有有关权利质押的法律、法规的规定，在收到有关主管机关就质权发出或制定的通知、指令或建议时，于五日内向质权人出示上述通知、指令或建议，同时遵守上述通知、指令或建议，或按照质权人的合理要求或经质权人同意就上述事宜提出反对意见和陈述；comply with the provisions of all laws and regulations applicable to the pledge of rights, and within 5 days of receipt of any notice, order orrecommendation issued or prepared by relevant competent authorities regarding the Pledge, shall present the aforementioned notice, order orrecommendation to Pledgee, and shall comply with the aforementioned notice, order or recommendation or submit objections andrepresentations with respect to the aforementioned matters upon Pledgee's reasonable request or upon consent of Pledgee;6.1.3将任何可能导致对出质人股权或其任何部分的权利产生影响的事件或收到的通知，以及可能改变出质人在本协议中的任何保证、义务或对出质人履行其在本协议中义务可能产生影响的任何事件或收到的通知及时通知质权人。promptly notify Pledgee of any event or notice received by Pledgors that may have an impact on Pledgee's rights to the Equity Interest or anyportion thereof, as well as any event or notice received by Pledgors that may have an impact on any guarantees and other obligations ofPledgors arising out of this Agreement.6.2出质人同意，质权人按本协议条款取得的对质权享有的权利，不应受到出质人或出质人的继承人或出质人之委托人或任何其他人通过法律程序的中断或妨害。Pledgors agree that the rights acquired by Pledgee in accordance with this Agreement with respect to the Pledge shall not be interrupted or harmed byPledgors or any heirs or representatives of Pledgors or any other persons through any legal proceedings.7秘密文件 Strictly Confidential6.3出质人向质权人保证，为保护或完善本协议对偿付业务合作协议项下被担保债务的担保，出质人将诚实签署、并促使其他与质权有利害关系的当事人签署质权人所要求的所有的权利证书、契约和/或履行并促使其他有利害关系的当事人履行质权人所要求的行为，并为本协议赋予质权人之权利、授权的行使提供便利，与质权人或其指定的人(自然人/法人)签署所有的有关股权所有权的文件，并在合理期间内向质权人提供其认为需要的所有的有关质权的通知、命令及决定。To protect or perfect the security interest granted by this Agreement for payment of all payment in pledge under the Business Cooperation Agreement,Pledgors hereby undertake to execute in good faith and to cause other parties who have an interest in the Pledge to execute all certificates, agreements,deeds and/or covenants required by Pledgee. Pledgors also undertake to perform and to cause other parties who have an interest in the Pledge toperform actions required by Pledgee, to facilitate the exercise by Pledgee of its rights and authority granted thereto by this Agreement, and to enter intoall relevant documents regarding ownership of Equity Interest with Pledgee or designee(s) of Pledgee (natural persons/legal persons). Pledgorsundertake to provide Pledgee within a reasonable time with all notices, orders and decisions regarding the Pledge that are required by Pledgee.6.4出质人向质权人保证，出质人将遵守、履行本协议项下所有的保证、承诺、协议、陈述及条件。如出质人不履行或不完全履行其保证、承诺、协议、陈述及条件，出质人应赔偿质权人由此遭受的一切损失。Pledgors hereby undertake to comply with and perform all guarantees, promises, agreements, representations and conditions under this Agreement. Inthe event of failure the whole or partial performance of its guarantees, promises, agreements, representations and conditions, Pledgors shall indemnifyPledgee for all losses resulting therefrom.8秘密文件 Strictly Confidential7.违约事件Event of Default7.1下列事项均被视为违约事件：The following circumstances shall be deemed Event of Default:7.1.1丙方未能按期、完整履行任何业务合作协议项下责任，包括但不限于丙方未能按期足额支付业务合作协议项下的应付的被担保债务或有违反该协议其他义务的行为；Party C fails to fully and timely fulfill any liabilities under the Business Cooperation Agreement, including without limitation failure to pay infull any of the all payment in pledge payable under the Business Cooperation Agreement or breaches any other obligations of Party Cthereunder;7.1.2出质人或丙方实质违反本协议的任何条款；Pledgors or Party C have committed a material breach of any provisions of this Agreement;7.1.3除本协议第6.1.1条的约定外，出质人舍弃出质的股权或未获得质权人书面同意而擅自转让或意图转让出质的股权；和Except as expressly stipulated in Section 6.1.1, Pledgors transfers or purports to transfer or abandons the Equity Interest pledged or assignsthe Equity Interest pledged without the written consent of Pledgee; and7.1.4丙方的继承人或代管人只能履行部分或拒绝履行业务合作协议项下的支付责任。The successor or custodian of Party C is capable of only partially perform or refuses to perform the payment obligations under the BusinessCooperation Agreement.9秘密文件 Strictly Confidential7.2如知道或发现本第7.1条所述的任何事项或可能导致上述事项的事件已经发生，出质人应立即以书面形式通知质权人。Upon notice or discovery of the occurrence of any circumstances or event that may lead to the aforementioned circumstances described in Section 7.1,Pledgors shall immediately notify Pledgee in writing accordingly.7.3除非第7.1部分下的违约事件在质权人向出质人发出要求其修补此违约行为通知后的二十（20）天之内已经按质权人要求获得救济，质权人在其后的任何时间，可向出质人发出书面违约通知，要求依据第8部分履行其处理股权的权利。Unless an Event of Default set forth in this Section 7.1 has been successfully resolved to Pledgee's satisfaction within twenty (20) days after the Pledgeedelivers a notice to the Pledgors requesting ratification of such Event of Default, Pledgee may issue a Notice of Default to Pledgors in writing at any timethereafter, demanding the Pledgors to immediately dispose of the Pledge in accordance with the provisions of Article 8 of this Agreement.8.质权的行使Exercise of Pledge8.1在被担保债务被全部清偿或履行前，未经质权人书面同意，出质人不得转让本质权和其拥有的丙方股权。Prior to the full payment of all payments in pledge, without the Pledgee's written consent, Pledgors shall not assign the Pledge or the Equity Interest inParty C.8.2在质权人行使其质押权利时，质权人可以向出质人发出书面违约通知。Pledgee may issue a Notice of Default to Pledgors when exercising the Pledge.10秘密文件 Strictly Confidential8.3在质权人行使其质押权利时，根据中国有关法律的规定，质权人有权按照法定程序处置质押股权。仅在中国法律允许的范围内，对于处置的所得，质权人无需给付出质人；除非中国法律另有规定，出质人特此放弃其可能有的能向质权人要求任何质押股权处置所得的权利；同样，出质人对质权人在该质押股权处置后的亏损也不承担任何义务。When the Pledgor exercises the pledge right, Pledgee is entitled to dispose of the Equity Interest pledged in accordance with applicable PRC laws. Onlyto the extent permitted under applicable PRC laws, Pledgee has no obligation to account to Pledgors for proceeds of disposition of the Equity Interest.Unless otherwise required by PRC laws, Pledgors hereby waive any rights it may have to demand any such accounting from Pledgee; Likewise, in suchcircumstance Pledgors shall have no obligation to Pledgee for any deficiency remaining after such disposition of the Equity Interest pledged.8.4质权人依照本协议处分质权时，出质人和丙方应予以必要的协助，以使质权人实现其质权。When Pledgee disposes of the Pledge in accordance with this Agreement, Pledgors and Party C shall provide necessary assistance to enable Pledgee toenforce the Pledge in accordance with this Agreement.9.转让Assignment9.1除非经质权人事先同意，出质人无权赠予或转让其在本协议项下的权利义务。Without Pledgee's prior written consent, Pledgors shall not have the right to assign or delegate its rights and obligations under this Agreement.11秘密文件 Strictly Confidential9.2本协议对出质人及其继任人和经许可的受让人均有约束力，并且对质权人及每一继任人和受让人有效。This Agreement shall be binding on Pledgors and their successors and permitted assigns, and shall be valid with respect to Pledgee and each of itssuccessors and assigns.9.3经出质人同意，质权人可以在任何时候将其在业务合作协议项下的所有或任何权利和义务转让给其指定的关联方（自然人/法人），在这种情况下，受让人应享有和承担本协议项下质权人享有和承担的权利和义务，如同其作为原协议方应享有和承担的一样。质权人转让业务合作协议项下的权利和义务时，应质权人要求，出质人应就此转让签署有关协议和/或文件。Upon the Pledgors’ agreement, Pledgee may assign any or all of its rights and obligations under the Business Cooperation Agreement to its designee(s)(natural/legal persons) at any time, in which case the assigns shall have the rights and obligations of Pledgee under this Agreement, as if it were theoriginal party to this Agreement. When the Pledgee assigns the rights and obligations under the Business Cooperation Agreement, upon Pledgee'srequest, Pledgors shall execute relevant agreements or other documents relating to such assignment.9.4因转让所导致的质权人变更后，应质权人要求，出质人应与新的质权人签订一份内容与本协议一致的新质押协议，并在相应的工商行政管理机关进行登记。In the event of a change in Pledgee due to an assignment, Pledgors shall, at the request of Pledgee, execute a new pledge agreement with the newpledgee on the same terms and conditions as this Agreement, and register the same with the relevant AIC.12秘密文件 Strictly Confidential9.5出质人应严格遵守本协议和各方单独或共同签署的其他有关协议的规定，包括独家购买权合同和对质权人的授权委托书，履行各协议项下的义务，并不进行任何足以影响协议的有效性和可强制执行性的作为/不作为。除非根据质权人的书面指示，出质人不得行使其对质押股权还留存的权利。Pledgors shall strictly abide by the provisions of this Agreement and other contracts jointly or separately executed by the Parties hereto or any of them,including the Exclusive Option Agreement and the Power of Attorney granted to Pledgee, perform the obligations hereunder and thereunder, and refrainfrom any action/omission that may affect the effectiveness and enforceability thereof. Any remaining rights of Pledgors with respect to the EquityInterest pledged hereunder shall not be exercised by Pledgors except in accordance with the written instructions of Pledgee.10.终止Termination在被担保债务被全部清偿或履行完毕之后，本质权人应在尽早合理可行的时间内办理或配合办理解除质押的手续，出质人与丙方应提供相应的配合与协助。Upon the full payment of all payments in pledge under the Business Cooperation Agreement a, Pledgor shall then, with the assistance of Party B and Party C,go through the procedures of cancellation of pledge rights at a reasonable time as soon as practicable.11.手续费及其他费用Handling Fees and Other Expenses一切与本协议有关的费用及实际开支，其中包括但不限于法律费用、工本费、印花税以及任何其他税收、费用等全部由丙方承担。All fees and out of pocket expenses relating to this Agreement, including but not limited to legal costs, costs of production, stamp tax and any other taxes andfees, shall be borne by Party C.13秘密文件 Strictly Confidential12.保密责任Confidentiality各方承认及确定有关本协议、本协议内容，以及彼此就准备或履行本协议而交换的任何口头或书面资料均被视为保密信息。各方应当对所有该等保密信息予以保密，而在未得到另一方书面同意前，不得向任何第三者披露任何保密信息，惟下列信息除外：(a)公众人士知悉或将会知悉的任何信息（惟并非由接受保密信息之一方擅自向公众披露）；(b)根据适用法律法规、股票交易规则、或政府部门或法院的命令而所需披露之任何信息；或(c)由任何一方就本协议所述交易而需向其股东、投资者、法律或财务顾问披露之信息，而该股东、法律或财务顾问亦需遵守与本条款相类似之保密责任。如任何一方工作人员或聘请机构的泄密均视为该方的泄密，需依本协议承担违约责任。无论本协议以任何理由终止，本条款仍然生效。The Parties acknowledge that the existence and the terms of this Agreement and any oral or written information exchanged between the Parties in connectionwith the preparation and performance this Agreement are regarded as confidential information. Each Party shall maintain confidentiality of all such confidentialinformation, and without obtaining the written consent of the other Party, it shall not disclose any relevant confidential information to any third parties, exceptfor the information that: (a) is or will be in the public domain (other than through the receiving Party’s unauthorized disclosure); (b) is under the obligation tobe disclosed pursuant to the applicable laws or regulations, rules of any stock exchange, or orders of the court or other government authorities; or (c) isrequired to be disclosed by any Party to its shareholders, investors, legal counsels or financial advisors regarding the transaction contemplated hereunder,provided that such shareholders, investors, legal counsels or financial advisors shall be bound by the confidentiality obligations similar to those set forth inthis Section. Disclosure of any confidential information by the staff members or agencies hired by any Party shall be deemed disclosure of such confidentialinformation by such Party, which Party shall be held liable for breach of this Agreement. This Section shall survive the termination of this Agreement for anyreason.14秘密文件 Strictly Confidential13.适用法律和争议的解决Governing Law and Resolution of Disputes13.1本协议的订立、效力、解释、履行、修改和终止以及争议的解决均适用中国法律。The execution, effectiveness, construction, performance, amendment and termination of this Agreement and the resolution of disputes hereunder shallbe governed by the laws of China.13.2因解释和履行本协议而发生的任何争议，本协议各方应首先通过友好协商的方式加以解决。如果在一方向其他方发出要求协商解决的书面通知后30天之内争议仍然得不到解决，则任何一方均可将有关争议提交给中国国际经济贸易仲裁委员会，由该会按照其仲裁规则仲裁解决。仲裁应在北京进行，使用之语言为中文。仲裁裁决是终局性的，对各方均有约束力。In the event of any dispute with respect to the construction and performance of this Agreement, the Parties shall first resolve the dispute throughfriendly negotiations. In the event the Parties fail to reach an agreement on the dispute within 30 days after either Party's request to the other Parties forresolution of the dispute through negotiations, either Party may submit the relevant dispute to the China International Economic and Trade ArbitrationCommission for arbitration, in accordance with its Arbitration Rules. The arbitration shall be conducted in Beijing, and the language used in arbitrationshall be Chinese. The arbitration award shall be final and binding on all Parties.13.3因解释和履行本协议而发生任何争议或任何争议正在进行仲裁时，除争议的事项外，本协议各方仍应继续行使各自在本协议项下的其他权利并履行各自在本协议项下的其他义务。Upon the occurrence of any disputes arising from the construction and performance of this Agreement or during the pending arbitration of any dispute,except for the matters under dispute, the Parties to this Agreement shall continue to exercise their respective rights under this Agreement and performtheir respective obligations under this Agreement.15秘密文件 Strictly Confidential14.通知Notices14.1本协议项下要求或发出的所有通知和其他通信应通过专人递送、挂号邮寄、邮资预付或商业快递服务或传真的方式发到该方下列地址。每一通知还应再以电子邮件送达。该等通知视为有效送达的日期按如下方式确定：All notices and other communications required or permitted to be given pursuant to this Agreement shall be delivered personally or sent by registeredmail, postage prepaid, by a commercial courier service or by facsimile transmission to the address of such party set forth below. A confirmation copy ofeach notice shall also be sent by Email. The dates on which notices shall be deemed to have been effectively given shall be determined as follows:14.1.1通知如果是以专人递送、快递服务或挂号邮寄、邮资预付发出的，则以于设定为通知的地址在接收或拒收之日为有效送达日。Notices given by personal delivery, by courier service or by registered mail, postage prepaid, shall be deemed effectively given on the date ofreceipt or refusal at the address specified for notices.14.1.2通知如果是以传真发出的，则以成功传送之日为有效送达日（应以自动生成的传送确认信息为证）。Notices given by facsimile transmission shall be deemed effectively given on the date of successful transmission (as evidenced by anautomatically generated confirmation of transmission).16秘密文件 Strictly Confidential14.2为通知的目的，各方地址如下：For the purpose of notices, the addresses of the Parties are as follows:甲方：中传天下信息科技（深圳）有限公司Party A: Zhongchuan Tianxia Information Technology (Shenzhen) Co., Ltd.地址：深圳市南山区高新中三道2号深圳软件园一期五栋401AAddress: 401A, Building 5, Phase 1, Shenzhen Software Park, No.2 Gaoxin Zhongsan Road, Nanshan District, Shenzhen.收件人：洪婷Attn: Hong Ting乙方：Party B:a)宋雪松Song Xuesong地址：125.Expenses, including legal fees, incurred by a director in defending any legal, administrative or investigative proceedings may be paid by the Company inadvance of the final disposition of such proceedings upon receipt of an undertaking by or on behalf of the director to repay the amount if it shall ultimatelybe determined that the director is not entitled to be indemnified by the Company in accordance with these Articles.126.Expenses, including legal fees, incurred by a former director in defending any legal, administrative or investigative proceedings may be paid by theCompany in advance of the final disposition of such proceedings upon receipt of an undertaking by or on behalf of the former director to repay the amountif it shall ultimately be determined that the director is not entitled to be indemnified by the Company in accordance with these Articles.127.The indemnification and advancement of expenses provided by, or granted pursuant to, these Articles is not exclusive of any other rights to which theperson seeking indemnification of advancement of expenses may be entitled under any agreement, resolution of members, resolution of disinteresteddirectors or otherwise, both as to acting in the person’s official capacity and as to acting in another capacity while serving as a director of the Company.128.If a person to be indemnified has been successful in defence of any proceedings referred to above the person is entitled to be indemnified against allexpenses, including legal fees, and against all judgments, fines and amounts paid in settlement and reasonably incurred by the person in connection withthe proceedings.129.The Company may purchase and maintain insurance in relation to any person who is or was a director, an officer or a liquidator of the Company, or who atthe request of the Company is or was serving as a director, an officer or a liquidator of, or in any other capacity is or was acting for, another body corporateor a partnership, joint venture, trust or other enterprise, against any liability asserted against the person and incurred by the person in that capacity,whether or not the Company has or would have had the power to indemnify the person against the liability as provided in these Articles.SEAL130.The Company shall have a Seal and may have more than one Seal. References herein to the Seal shall be references to every Seal which shall have beenduly adopted by resolution of directors. The directors shall provide for the safe custody of the Seal and for an imprint thereof to be kept at the office of theregistered agent of the Company. Except as otherwise expressly provided herein, the Seal when affixed to any written instrument, shall be witnessed andattested to by the signature of a director or any other person so authorized from time to time by resolution of directors. Such authorization may be before orafter the Seal is affixed, may be general or specific and may refer to any number of sealings. The Directors may provide for a facsimile of the Seal and of thesignature of any director or authorized person which may be reproduced by printing or other means on any instrument and it shall have the same force andvalidity as if the Seal had been affixed to such instrument and the same had been signed as hereinbefore described.21DISTRIBUTIONS131.The directors of the Company may by resolution authorise a distribution by the Company at any time and of any amount and to any members they think fitif they are satisfied on reasonable grounds that immediately after the distribution;a.the value of the Company’s assets will exceed its liabilities, andb.the Company will be able to pay its debts as they fall due.132.A resolution of the directors passed under the preceding Article shall contain a statement that, in the opinion of the directors, immediately after thedistribution the value of the Company’s assets will exceed its liabilities, and the Company will be able to pay its debts as they fall due.133.If, after a distribution is authorised and before it is made, the directors cease to be satisfied on reasonable grounds that the Company will, immediately afterthe distribution satisfy the solvency test, any distribution made by the Company is deemed not to have been authorised.134.If, by virtue of the preceding Article, a distribution is deemed not to have been authorised, a director who;a.ceased, after authorisation but before the making of the distribution, to be satisfied on reasonable grounds for believing that the company wouldsatisfy the solvency test immediately after the distribution is made; andb.failed to take reasonable steps to prevent the distribution being made;is personally liable to the company to repay to the company so much of the distribution as is not able to be recovered from members.135.A distribution made to a member at a time when the company did not, immediately after the distribution, satisfy the solvency test may be recovered by thecompany from the member unless;a.the member received the distribution in good faith and without knowledge of the company’s failure to satisfy the solvency test;b.the member has altered his position in reliance on the validity of the distribution; andc.it would be unfair to require repayment in full or at all.DISTRIBUTIONS BY WAY OF DIVIDEND136.The Company may by a resolution of directors declare a distribution by way of dividend and pay such distribution in money, shares or other property. Inthe event that distributions by way of dividend are paid in specie the directors shall have responsibility for establishing and recording in the resolution ofdirectors authorizing the distribution by way of dividend, a fair and proper value for the assets to be so distributed.137.The directors may from time to time pay to the members such interim distributions by way of dividend as appear to the directors to be justified by theprofits of the Company.138.The directors may, before declaring any distribution by way of dividend, set aside out of the profits of the Company such sum as they think proper as areserve fund, and may invest the sum so set aside as a reserve fund upon such securities as they may select.139.Notice of any distribution by way of dividend that may have been declared shall be given to each member in the manner hereinafter mentioned and alldistributions by way of dividend unclaimed for 3 years after having been declared may be forfeited by resolution of directors for the benefit of theCompany.140.No distribution by way of dividend shall bear interest as against the Company and no distribution by way of dividend shall be paid on treasury shares orshares held by another company of which the Company holds, directly or indirectly, shares having more than 50 percent of the vote in electing directors.22141.A share issued as a distribution by way of dividend by the Company shall be treated for all purposes as having been issued for money equal to the valuedetermined by resolution of the directors. In the absence of fraud the decision of the directors as to the value of the share is conclusive unless a questionof law is involved.142.A division of the issued and outstanding shares of a class or series of shares into a larger number of shares of the same class or series having aproportionately smaller par value does not constitute a distribution by way of dividend of shares.ACCOUNTS AND AUDIT143.The Company may by resolution of members call for the directors to prepare periodically a profit and loss account and a balance sheet. The profit and lossaccount and balance sheet shall be drawn up so as to give respectively a true and fair view of the profit and loss of the Company for the financial periodand a true and fair view of the state of affairs of the Company as at the end of the financial period.144.The Company may by resolution of members call for the accounts to be examined by auditors.145.Subject to the rules of the Designated Stock Exchange, the first auditors shall be appointed by resolution of directors; subsequent auditors shall beappointed by the Audit Committee and shall hold office until the Audit Committee appoint another independent auditor.146.Subject to the rules of the Designated Stock Exchange, the remuneration of the auditors of the Company shall be fixed by the Audit Committee.147.The auditors shall examine each profit and loss account and balance sheet required to be served on every member of the Company or laid before a meetingof the members of the Company and shall state in a written report whether or nota.in their opinion the profit and loss account and balance sheet give a true and fair view respectively of the profit and loss for the period covered bythe accounts, and of the state of affairs of the Company at the end of that period; andb.all the information and explanations required by the auditors have been obtained.148.The report of the auditors shall be annexed to the accounts and shall be read at the meeting of members at which the accounts are laid before the Companyor shall be served on the members.149.Every auditor of the Company shall have a right of access at all times to the books of account and vouchers of the Company, and shall be entitled to requirefrom the directors and officers of the Company such information and explanations as he thinks necessary for the performance of the duties of the auditors.150.The auditors of the Company shall be entitled to receive notice of, and to attend any meetings of members of the Company at which the Company’s profitand loss account and balance sheet are to be presented.NOTICES151.Any notice, information or written statement to be given by the Company to members may be served in any way by which it can reasonably be expected toreach each member or by mail addressed to each member at the address shown in the share register.152.Any summons, notice, order, document, process, information or written statement to be served on the Company may be served by leaving it, or by sendingit by registered mail addressed to the Company, at its registered office, or by leaving it with, or by sending it by registered mail to, the registered agent ofthe Company.153.Service of any summons, notice, order, document, process, information or written statement to be served on the Company may be proved by showing thatthe summons, notice, order, document, process, information or written statement was delivered to the registered office or the registered agent of theCompany or that it was mailed in such time as to admit to its being delivered to the registered office or the registered agent of the Company in the normalcourse of delivery within the period prescribed for service and was correctly addressed and the postage was prepaid.23PENSION AND SUPERANNUATION FUNDS154.The directors may establish and maintain or procure the establishment and maintenance of any noncontributory or contributory pension orsuperannuation funds for the benefit of, and give or procure the giving of donations, gratuities, pensions, allowances or emoluments to, any persons whoare or were at any time in the employment or service of the Company or any company which is a subsidiary of the Company or is allied to or associated withthe Company or with any such subsidiary, or who are or were at any time directors or officers of the Company or of any such other company as aforesaid orwho hold or held any salaried employment or office in the Company or such other company, or any persons in whose welfare the Company or any suchother company as aforesaid is or has been at any time interested, and to the wives, widows, families and dependents of any such person, and may makepayments for or towards the insurance of any such persons as aforesaid, and may do any of the matters aforesaid either alone or in conjunction with anysuch other company as aforesaid. Subject always to the proposal being approved by resolution of members, a director holding any such employment oroffice shall be entitled to participate in and retain for his own benefit any such donation, gratuity, pension allowance or emolument.VOLUNTARY WINDING UP AND DISSOLUTION155.The Company may voluntarily commence to wind up and dissolve by a resolution of members but if the Company has never issued shares it mayvoluntarily commence to wind up and dissolve by resolution of directors.CONTINUATION156.The Company may by resolution of members or by a resolution passed unanimously by all directors of the Company continue as a company incorporatedunder the laws of a jurisdiction outside the British Virgin Islands in the manner provided under those laws.ARBITRATION157.Whenever any difference arises between the Company on the one hand and any of the members or their executors, administrators or assigns on the otherhand, touching the true intent and construction or the incidence or consequences of these Articles or of the Act, touching anything done or executed,omitted or suffered in pursuance of the Act or touching any breach or alleged breach or otherwise relating to the premises or to these Articles, or to anyAct or Ordinance affecting the Company or to any of the affairs of the Company such difference shall, unless the parties agree to refer the same to a singlearbitrator, be referred to 2 arbitrators one to be chosen by each of the parties to the difference and the arbitrators shall before entering on the referenceappoint an umpire.158.If either party to the reference makes default in appointing an arbitrator either originally or by way of substitution (in the event that an appointed arbitratorshall die, be incapable of acting or refuse to act) for 10 days after the other party has given him notice to appoint the same, such other party may appoint anarbitrator to act in the place of the arbitrator of the defaulting party.We, Portcullis TrustNet (BVI) Limited of Portcullis TrustNet Chambers, P.O. Box 3444, Road Town, Tortola, British Virgin Islands for the purpose of incorporating aBVI Business Company under the laws of the British Virgin Islands hereby sign these Articles of Association the 27th day of October, 2009.Incorporator/s/ Nicole WheatleyPortcullis TrustNet (BVI) LimitedPortcullis TrustNet ChambersP.O. Box 3444Road Town, TortolaBritish Virgin Islands(Sgd. Nicole Wheatley)24EX4.15 3 f20f2017ex415_luokung.htm EXCLUSIVE BUSINESS COOPERATION AGREEMENT BY AND BETWEEN ZHONGCHUAN TIANXIA INFORMATIONTECHNOLOGY (SHENZHEN) CO., LTD., AND BEIJING MOBILE VISION TECHNOLOGY CO., LTD., DATED AUGUST 31, 2015Exhibit 4.15独家业务合作协议Exclusive Business Cooperation Agreement本独家业务合作协议（下称“本协议”）由以下双方于年月日在中华人民共和国（下称“中国”）北京市签署。This Exclusive Business Cooperation Agreement (this “Agreement”) is made and entered into by and between the following parties on in Beijing, thePeople’s Republic of China (“China” or the “PRC”).甲方：中传天下信息科技（深圳）有限公司Party A: Zhongchuan Tianxia Information Technology (Shenzhen) Co., Ltd.地址：深圳市南山区高新中三道2号深圳软件园一期五栋401A Address: 401A, Building 5, Phase 1, Shenzhen Software Park, No.2 Gaoxin Zhongsan Road, Nanshan District, Shenzhen统一社会信用代码：91440300565701058R Uniform Social Credit Code: 91440300565701058R乙方：北京中传视讯科技有限公司Party B: Beijing Mobile Vision Technology Co., Ltd.地址：北京市朝阳区光华路9号SOHO3QLAB32Address: LAB32, SOHO3Q, No 9, Guanghua Road, Chaoyang District, Beijing统一社会信用代码：9111010576215249XMUniform Social Credit Code: 9111010576215249XM甲方和乙方以下各称为“一方”，统称为“双方”。Each of Party A and Party B shall be hereinafter referred to as a “Party” respectively, and as “Parties” collectively.1秘密文件Strictly Confidential鉴于：Whereas,1.甲方是一家在中国注册的外商独资企业，拥有丰富的技术研发和产业化推广相关的管理和投资经验，并提供相关的技术支持和咨询服务；Party A is a whollyforeignowned enterprise established in China, which has rich experience in technology research development and industrializationpromotion management and investment, and provides relevant technical support and consulting services;2.乙方是一家在中国成立的有限责任公司，经中国有关政府部门批准依法主要从事手机视频技术开发、内容制作及市场推广；Party B is a limited company in China, mainly engages in mobile video technology research, development, content creation, sale and related industrialpromotion as approved by the relevant governmental authorities in China;3.甲方同意利用其技术、人员和信息优势，在本协议期间向乙方提供有关手机视频技术开发、内容制作及市场推广以及未来扩大业务规模和业务范围时乙方所需的技术支持、技术咨询等相关服务，乙方同意接受甲方或其指定方按本协议条款的规定提供的各种服务。Party A is willing to provide Party B with technology supports and technology consulting services in connection with mobile video technology research,development, content creation, sale and related industrial promotion and such services in connection with Party B’s extension of business scale orbroadening of businesses during the term of this Agreement, utilizing its advantages in technology, human resources, and information, and Party B iswilling to accept such services provided by Party A or Party A's designee(s), each on the terms set forth herein.2秘密文件Strictly Confidential据此，甲方和乙方经协商一致，达成如下协议：Now, therefore, through mutual discussion, the Parties have reached the following agreements:1.服务提供Services Provided by Party A1.1按照本协议条款和条件，乙方在此委任甲方在本协议期间作为乙方的独家服务提供者向乙方提供全面的和手机视频技术开发、内容制作及市场推广相关以及未来扩大业务规模和业务范围时乙方所需的技术支持、业务支持和相关咨询服务，具体内容包括但不限于以下内容：Party B hereby appoints Party A as Party B's exclusive services provider to provide Party B with complete technical support, business supportand related consulting services in connection with mobile video technology research, development, content creation, sale and related industrialpromotion and such services in connection with Party B’s extension of business scale or broadening of businesses during the term of thisAgreement, in accordance with the terms and conditions of this Agreement, which may include but not limited to:1.1.1为乙方提供其手机视频技术开发、内容制作及市场推广业务所需的一切服务支持，为乙方提供相当于包括总经理、行政人员、管理人员、筹划部门、商业运营、人力资源、财务、会计以及与乙方业务相关的一切业务操作所需人员所能提供的服务内容；managing all aspects of Party B’s business of mobile video technology research, development, content creation, sale and relatedindustrial promotion. In this capacity, Party A will procure or engage for Party B the services of a general manager and other managementstaff, including but not limited to personnel responsible for all administration, operations, planning, business development, humanresources, finance, accounting and other operations related to the Business of Party B;3秘密文件Strictly Confidential1.1.2为乙方制定全部的商业计划、销售目标，并为优化执行该等商业计划设计和建立相应的系统及操作程序；developing all business plans and sales projections of Party B, and for developing and establishing systems and procedures for optimumexecution of the business plans;1.1.3为乙方申请手机视频技术及内容制作相关专利提供咨询服务和支持；consulting services and support in connection with Party B’s applying for mobile video technology related patents and content creation;1.1.4为乙方手机视频技术产业化的发展方向、规模、品牌提升提供咨询服务；consulting services in connection with the development directions, size and business brands promotion of Party B’s mobile videotechnology industrialization;4秘密文件Strictly Confidential1.1.5为乙方提供与业务相关的办公、生产和销售服务，为乙方租赁场所，建立业务相关的系统和程序，满足乙方的其他要求；procuring or obtaining for Party B all office, production and distribution services related to the Business. It shall procure or obtainappropriate leases, establish systems and procedures needed to operate the business, fulfill orders for services;1.1.6尽最大努力为乙方建立手机视频技术销售市场，根据甲方为乙方制定的商业计划及销售目标代表乙方获取客户订单，同时为乙方提供与业务相关的客户服务，建立向客户开具票据的程序和与会计相关的托收服务。using its best efforts to establish mobile video technology related marketing and other structures to obtain orders for services &products from customers on behalf of Party B in accordance with Party B’s business plans, sales projections and objectives (asdeveloped by Party A) and procure or obtain customer services required in connection with the Business. It shall also establishprocedures for invoicing customers, and establish collection services with respect to accounts;1.1.7就乙方的劳动用工方面提供咨询服务和支持，包括但不限于，组织实施对乙方业务人员、行政人员、管理人员等人员进行培训和考核，协助建立健全的人力资源管理制度和实现人力资源的良好配置；consulting services and support regarding labor system of Party B, including but without limitation to labor training and evaluation ofsales person, administrative staff and management person etc. and establishment of human resources management system to well;5秘密文件Strictly Confidential1.1.8提供乙方需要的客户数据统计、分析及相关数据库的建设和维护等咨询服务；providing Party B with compile and analysis of client data and consulting services of establishment and maintenance of data base;1.1.9提供乙方需要的软件和相关技术支持服务；providing software Party B requires and other technical support;1.1.10接受乙方委托，对乙方的手机视频技术研发和产业化推广业务经营进行指导和管理；guiding and management on Party B’s business of mobile video technology research and development and related industrial promotionoperation according to Party B’s commission;1.1.11当乙方业务规模发展或业务范围扩大需要时，购买乙方业务经营需要的设备；in the event of the demand of Party B’s development of business scale or broadening of businesses, purchase the equipments which itneeds for the operation of its business;1.1.12当乙方业务规模发展或业务范围扩大需要时，完成乙方项目中的全部或部分工作；in the event of the demand of Party B’s development of business scale or broadening of businesses, complete the work of Party B’sproject in whole or in party;6秘密文件Strictly Confidential1.1.13当乙方业务规模发展或业务范围扩大需要时，开发新技术；in the event of the demand of Party B’s development of business scale or broadening of businesses, develop new technology;1.1.14乙方委托甲方，且甲方接受委托提供的其他服务。other services Party B appoints Party A to provide and Party A agrees to provide.1.2乙方接受甲方的咨询和服务。乙方进一步同意，除非经甲方事先书面同意，在本协议期间，就本协议约定的服务或其他事宜，乙方不得直接或间接地从任何第三方获得任何与本协议相同或类似的咨询和/或服务，并不得与任何第三方就本协议所述事项建立任何类似的合作关系。双方同意，甲方可以指定其他方（该被指定方可以与乙方签署本协议第1.3条描述的某些协议）为乙方提供本协议约定的服务和/或支持。Party B agrees to accept all the consultations and services provided by Party A. Party B further agrees that unless with Party A's prior writtenconsent, during the term of this Agreement, Party B shall not directly or indirectly accept the same or any similar consultations and/or servicesprovided by any third party and shall not establish similar corporation relationship with any third party regarding the matters contemplated by thisAgreement. Party A may appoint other parties, who may enter into certain agreements described in Section 1.3 with Party B, to provide Party Bwith the consultations and/or services under this Agreement.7秘密文件Strictly Confidential1.3服务的提供方式Service Providing Methodology1.3.1双方同意在本协议有效期内，视情况而定，乙方可以与甲方或甲方指定的其他方进一步签订技术服务协议和/或咨询服务协议，对各项业务培训、技术服务、咨询服务的具体内容、方式、人员、收费等进行约定。Parties agree that during the term of this Agreement, where necessary, Party B may enter into further technical service agreements and/orconsulting service agreements with Party A or any other party designated by Party A, which shall provide the specific contents, manner,personnel, and fees for the specific technical services and consulting services.1.3.2为更好地履行本协议，双方同意，在甲方认为必要时，乙方应在本协议有效期内与甲方或甲方指定的其他方根据业务进展需要随时签署协议，由甲方或其指定方向乙方提供服务。To fulfill this Agreement, Parties agree that during the term of this Agreement, where Party A deems necessary, Party B shall enter intoagreements with Party A or any other party designated by Party A which shall set forth that Party A or any other party designated byParty A provide services to Party B based on the needs of the business of Party B.8秘密文件Strictly Confidential2.服务的价格和支付方式The Calculation and Payment of the Service Fees双方同意，就甲方提供的服务，乙方应向甲方支付服务费（“服务费”）。服务费不应低于乙方税后利润的80%。服务费应当按季支付；经甲方事先书面同意，服务费可以根据乙方的经营需要进行调整。Both Parties agree that, in consideration of the services provided by Party A, Party B shall pay Party A fees (the “Service Fees”), which shall not be lessthan 80% of Party B’s aftertax profits . The Service Fees shall be due and payable on a quarterly basis; upon the prior written consent by Party A, the rateof Service Fees may be adjusted pursuant to the operational needs of Party B.3.知识产权和保密条款Intellectual Property Rights and Confidentiality Clauses3.1在中国法律允许的范围内，甲方对履行本协议而产生或创造的任何权利、所有权、权益和所有知识产权包括但不限于著作权、专利权、专利申请权、软件、技术秘密、商业机密及其他均享有独占的和排他的权利和利益。乙方须签署所有适当的文件，采取所有适当的行动，递交所有的文件和/或申请，提供所有适当的协助，以及做出所有其他依据甲方的自行决定认为是必要的行为，以将任何对该等知识产权的所有权、权利和权益赋予甲方，和/或完善对甲方此等知识产权权利的保护。To the extent permitted under the PRC laws, Party A shall have exclusive and proprietary rights and interests in all rights, ownership, interests andintellectual properties arising out of or created during the performance of this Agreement, including but not limited to copyrights, patents, patentapplications, software, technical secrets, trade secrets and others. Party B shall execute all appropriate documents, take all appropriate actions,submit all filings and/or applications, render all appropriate assistance and otherwise conduct whatever is necessary deemed as by Party A in itssole discretion for the purposes of vesting any ownership, right or interest of any such intellectual property rights in Party A, and/or perfectingthe protections for any such intellectual property rights in Party A.9秘密文件Strictly Confidential3.2双方承认及确定有关本协议、本协议内容，以及彼此就准备或履行本协议而交换的任何口头或书面资料均被视为保密信息。双方应当对所有该等保密信息予以保密，而在未得到另一方书面同意前，不得向任何第三者披露任何保密信息，惟下列信息除外：(a)公众人士知悉或将会知悉的任何信息（惟并非由接受保密信息之一方擅自向公众披露）；(b)根据适用法律法规、股票交易规则、或政府部门或法院的命令而所需披露之任何信息；或(c)由任何一方就本协议所述交易而需向其股东、投资者、法律或财务顾问披露之信息，而该股东、法律或财务顾问亦需遵守与本条款相类似之保密责任。如任何一方工作人员或聘请机构的泄密均视为该方的泄密，需依本协议承担违约责任。无论本协议以任何理由终止，本条款仍然生效。The Parties acknowledge that the existence and the terms of this Agreement and any oral or written information exchanged between the Parties inconnection with the preparation and performance this Agreement are regarded as confidential information. Each Party shall maintainconfidentiality of all such confidential information, and without obtaining the written consent of the other Party, it shall not disclose any relevantconfidential information to any third parties, except for the information that: (a) is or will be in the public domain (other than through the receivingParty’s unauthorized disclosure); (b) is under the obligation to be disclosed pursuant to the applicable laws or regulations, rules of any stockexchange, or orders of the court or other government authorities; or (c) is required to be disclosed by any Party to its shareholders, investors,legal counsels or financial advisors regarding the transaction contemplated hereunder, provided that such shareholders, investors, legal counselsor financial advisors shall be bound by the confidentiality obligations similar to those set forth in this Section. Disclosure of any confidentialinformation by the staff members or agencies hired by any Party shall be deemed disclosure of such confidential information by such Party, whichParty shall be held liable for breach of this Agreement. This Section shall survive the termination of this Agreement for any reason.3.3双方同意，不论本协议是否变更、解除或终止，本条款将持续有效。The Parties agree that this Section shall survive changes to, and rescission or termination of, this Agreement.4.陈述和保证Representations and Warranties4.1甲方陈述和保证如下：Party A hereby represents and warrants as follows:4.1.1甲方是按照中国法律合法注册并有效存续的外商独资企业。Party A is a whollyforeignowned enterprise legally registered and validly existing in accordance with the laws of China.10秘密文件Strictly Confidential4.1.2甲方已采取必要的公司行为，获得必要的授权，并取得第三方和政府部门的同意及批准（若需）以签署和履行本协议；甲方对本协议的签署和履行并不违反法律法规的明确规定。Party A has taken all necessary corporate actions, obtained all necessary authorization and the consent and approval from third partiesand government agencies (if any) for the execution and performance of this Agreement. Party A’s execution and performance of thisAgreement do not violate any explicit requirements under any law or regulation binding on Party A.4.1.3本协议构成对其合法、有效、有约束力并依本协议之条款对其强制执行的义务。This Agreement constitutes Party A's legal, valid and binding obligations, enforceable in accordance with its terms.4.2乙方陈述和保证如下：Party B hereby represents and warrants as follows:4.2.1乙方是按照中国法律合法登记且有效存续的有限责任公司，乙方根据政府部门的批准和许可从事手机视频技术开发、内容制作和产业化市场推广的经营。Party B is a limited company legally registered and validly existing in accordance with the laws of China, engages in mobile videotechnology research, development, content creation, sale and related industrial promotion pursuant to governmental approvals andpermits;11秘密文件Strictly Confidential4.2.2乙方已采取必要的行为，获得必要的授权，并取得第三方和政府部门的同意及批准（若需）以签署和履行本协议；乙方对本协议的签署和履行并不违反法律法规的明确规定。Party B has taken all necessary actions, obtained all necessary authorization and the consent and approval from third parties andgovernment agencies (if any) for the execution and performance of this Agreement. Party B’s execution and performance of thisAgreement do not violate any explicit requirements under any law or regulation binding on Party B.4.2.3本协议构成对其合法、有效、有约束力并依本协议之条款对其强制执行的义务。This Agreement constitutes Party B's legal, valid and binding obligations, and shall be enforceable against it.5.生效和有效期Effectiveness and Term5.1本协议于文首标明的协议日期签署并同时生效。除非依本协议或双方其他协议的约定而提前终止，本协议有效期为20年，但甲、乙双方应自本协议签署后，每3个月对本协议的内容做一次审查，以决定是否需要根据当时的情况对本协议作出相应修改和补充。This Agreement is executed on the date first above written and shall take effect as of such date. Unless earlier terminated in accordance with theprovisions of this Agreement or relevant agreements separately executed between the Parties, the term of this Agreement shall be 20 years. Afterthe execution of this Agreement, both Parties shall review this Agreement every 3 months to determine whether to amend or supplement theprovisions in this Agreement based on the actual circumstances at that time.12秘密文件Strictly Confidential5.2协议期满前，经甲方书面确认，本协议可以延期。延期的期限由甲方决定，乙方必须无条件地同意该延期。The term of this Agreement may be extended if confirmed in writing by Party A prior to the expiration thereof. The extended term shall bedetermined by Party A, and Party B shall accept such extended term unconditionally.6.终止Termination6.1除非依据本协议续期，本协议于到期之日终止。Unless renewed in accordance with the relevant terms of this Agreement, this Agreement shall be terminated upon the date of expiration hereof.6.2本协议有效期内，除非甲方对乙方有重大过失或存在欺诈行为，乙方不得提前终止本协议。尽管如此，甲方可在任何时候通过提前30天向乙方发出书面通知的方式终止本协议。During the term of this Agreement, unless Party A commits gross negligence, or a fraudulent act, against Party B, Party B shall not terminate thisAgreement prior to its expiration date. Nevertheless, Party A shall have the right to terminate this Agreement upon giving 30 days' prior writtennotice to Party B at any time.6.3在本协议终止之后，双方在第3、7和8条项下的权利和义务将继续有效。The rights and obligations of the Parties under Articles 3, 7 and 8 shall survive the termination of this Agreement.13秘密文件Strictly Confidential7.适用法律和争议解决Governing Law and Resolution of Disputes7.1本协议的订立、效力、解释、履行、修改和终止以及争议的解决适用中国的法律。The execution, effectiveness, construction, performance, amendment and termination of this Agreement and the resolution of disputes hereundershall be governed by the laws of China.7.2因解释和履行本协议而发生的任何争议，本协议双方应首先通过友好协商的方式加以解决。如果在一方向其他方发出要求协商解决的书面通知后30天之内争议仍然得不到解决，则任何一方均可将有关争议提交给中国国际经济贸易仲裁委员会，由该会按照其仲裁规则仲裁解决。仲裁应在北京进行，使用之语言为中文。仲裁裁决是终局性的，对各方均有约束力。In the event of any dispute with respect to the construction and performance of this Agreement, the Parties shall first resolve the dispute throughfriendly negotiations. In the event the Parties fail to reach an agreement on the dispute within 30 days after either Party's request to the otherParties for resolution of the dispute through negotiations, either Party may submit the relevant dispute to the China International Economic andTrade Arbitration Commission for arbitration, in accordance with its Arbitration Rules. The arbitration shall be conducted in Beijing, and thelanguage used in arbitration shall be Chinese. The arbitration award shall be final and binding on all Parties.14秘密文件Strictly Confidential7.3因解释和履行本协议而发生任何争议或任何争议正在进行仲裁时，除争议的事项外，本协议双方仍应继续行使各自在本协议项下的其他权利并履行各自在本协议项下的其他义务。Upon the occurrence of any disputes arising from the construction and performance of this Agreement or during the pending arbitration of anydispute, except for the matters under dispute, the Parties to this Agreement shall continue to exercise their respective rights under this Agreementand perform their respective obligations under this Agreement.8.补偿Indemnification就甲方根据本协议向乙方提供的咨询和服务内容所产生或引起的针对甲方的诉讼、请求或其他要求而招致的任何损失、损害、责任或费用都应由乙方补偿给甲方，以使甲方不受损害，除非该损失、损害、责任或费用是因甲方的重大过失或故意而产生的。Party B shall indemnify and hold harmless Party A from any losses, injuries, obligations or expenses caused by any lawsuit, claims or other demandsagainst Party A arising from or caused by the consultations and services provided by Party A to Party B pursuant this Agreement, except where suchlosses, injuries, obligations or expenses arise from the gross negligence or willful misconduct of Party A.15秘密文件Strictly Confidential9.通知Notices9.1本协议项下要求或发出的所有通知和其他通信应通过专人递送、挂号邮寄、邮资预付或快递服务或传真的方式发到该方下列地址。每一通知还应再以电子邮件送达。该等通知视为有效送达的日期按如下方式确定：All notices and other communications required or permitted to be given pursuant to this Agreement shall be delivered personally or sent byregistered mail, postage prepaid, by a courier service or by facsimile transmission to the address of such Party set forth below. A confirmationcopy of each notice shall also be sent by email. The dates on which notices shall be deemed to have been effectively given shall be determined asfollows:9.1.1通知如果是以专人递送、快递服务或挂号邮寄、邮资预付发出的，则以于设定为通知的地址在接收或拒收之日为有效送达日。Notices given by personal delivery, by courier service or by registered mail, postage prepaid, shall be deemed effectively given on thedate of receipt or refusal at the address specified for notices.9.1.2通知如果是以传真发出的，则以成功传送之日为有效送达日（应以自动生成的传送确认信息为证）。Notices given by facsimile transmission shall be deemed effectively given on the date of successful transmission (as evidenced by anautomatically generated confirmation of transmission).16秘密文件Strictly Confidential9.2为通知的目的，双方地址如下：For the purpose of notices, the addresses of the Parties are as follows:甲方：中传天下信息科技（深圳）有限公司Party A: Zhongchuan Tianxia Information Technology (Shenzhen) Co., Ltd.地址：深圳市南山区高新中三道2号深圳软件园一期五栋401AAddress:401A, Building 5, Phase 1, Shenzhen Software Park, No.2 Gaoxin Zhongsan Road, Nanshan District, Shenzhen收件人：洪婷Attn: Hong Ting乙方：北京中传视讯科技有限公司Party B: Beijing Mobile Vision Technology Co., Ltd地址：北京市朝阳区光华路9号SOHO3QLAB32Address: LAB32, SOHO3Q, No 9, Guanghua Road, Chaoyang District, Beijing.收件人：宋雪松Attn.: Song Xuesong9.3任何一方可按本条规定随时给另一方发出通知来改变其接收通知的地址。Any Party may at any time change its address for notices by a notice delivered to the other Party in accordance with the terms hereof.17秘密文件Strictly Confidential10.协议的转让Assignment10.1乙方不得将其在本协议项下的权利与义务转让给第三方，除非事先征得甲方的书面同意。Without Party A's prior written consent, Party B shall not assign its rights and obligations under this Agreement to any third party.10.2乙方在此同意，甲方可以在其需要时向其他第三方转让其在本协议项下的权利和义务，并在该等转让发生时甲方仅需向乙方发出书面通知，并且无需再就该等转让征得乙方的同意。Party B agrees that Party A may assign its obligations and rights under this Agreement to any third party upon a prior written notice to Party Bbut without the consent of Party B.11.协议的分割性Severability如果本协议有任何一条或多条规定根据任何法律或法规在任何方面被裁定为无效、不合法或不可执行，本协议其余规定的有效性、合法性或可执行性不应因此在任何方面受到影响或损害。双方应通过诚意磋商，争取以法律许可以及双方期望的最大限度内有效的规定取代那些无效、不合法或不可执行的规定，而该等有效的规定所产生的经济效果应尽可能与那些无效、不合法或不能强制执行的规定所产生的经济效果相似。In the event that one or several of the provisions of this Agreement are found to be invalid, illegal or unenforceable in any aspect in accordance with anylaws or regulations, the validity, legality or enforceability of the remaining provisions of this Agreement shall not be affected or compromised in any aspect.The Parties shall strive in good faith to replace such invalid, illegal or unenforceable provisions with effective provisions that accomplish to the greatestextent permitted by law and the intentions of the Parties, and the economic effect of such effective provisions shall be as close as possible to the economiceffect of those invalid, illegal or unenforceable provisions.18秘密文件Strictly Confidential12.协议的修改、补充Amendments and Supplements双方可以书面协议方式对本协议作出修改和补充。经过双方签署的有关本协议的修改协议和补充协议是本协议组成部分，具有与本协议同等的法律效力。Any amendments and supplements to this Agreement shall be in writing. The amendment agreements and supplementary agreements that have beensigned by the Parties and that relate to this Agreement shall be an integral part of this Agreement and shall have the same legal validity as this Agreement.13.语言和副本Language and Counterparts本协议以中文和英文书就，一式二份，甲乙双方各持一份，具有同等效力；中英文版本如有冲突，应以中文版为准。This Agreement is written in both Chinese and English language in two copies, each Party having one copy with equal legal validity; in case there is anyconflict between the Chinese version and the English version, the Chinese version shall prevail.本页其余部分刻意留为空白The Remainder of this page is intentionally left blank19秘密文件Strictly Confidential有鉴于此，双方已使得经其授权的代表于文首所述日期签署了本独家业务合作协议并即生效，以昭信守。IN WITNESS WHEREOF, the Parties have caused their authorized representatives to execute this Exclusive Business Cooperation Agreement as of thedate first above written.甲方：中传天下信息科技（深圳）有限公司（盖章）Party A: Zhongchuan Tianxia Information Technology (Shenzhen) Co., Ltd.(Seal)签字：By: /s/ Hong Ting 姓名：洪婷Name: Hong Ting职务：总经理Title: General Manager20秘密文件Strictly Confidential有鉴于此，双方已使得经其授权的代表于文首所述日期签署了本独家业务合作协议并即生效，以昭信守。IN WITNESS WHEREOF, the Parties have caused their authorized representatives to execute this Exclusive Business Cooperation Agreement as of thedate first above written. 乙方：北京中传视讯科技有限公司（盖章）Party B: Beijing Mobile Vision Technology Co., Ltd. (Seal)签字：By: /s/ Song Xuesong 姓名：宋雪松Name: Song Xuesong职务：董事长Title: Chairman of the Board21秘密文件Strictly ConfidentialEX4.16 4 f20f2017ex416_luokung.htm EXCLUSIVE OPTION AGREEMENT BY AND AMONG ZHONGCHUAN TIANXIA INFORMATION TECHNOLOGY(SHENZHEN) CO., LTD., XUESONG SONG, WEILI CHEN, PING WANG, DONGLAI LIU, AND BEIJING MOBILE VISION TECHNOLOGY CO., LTD., DATEDAUGUST 31, 2015Exhibit 4.16独家购买权协议Exclusive Option Agreement本独家购买权协议 (下称“本协议”) 由以下各方于年月日在中华人民共和国（下称“中国”）北京签订：This Exclusive Option Agreement (this “Agreement”) is executed by and among the Parties below as of in Beijing, the People’s Republic of China (the“China” or “PRC”):甲方：中传天下信息科技（深圳）有限公司，一家依照中国法律设立和存在的外商独资企业，地址为深圳市南山区高新中三道2号深圳软件园一期五栋401A；Party A:Zhongchuan Tianxia Information Technology (Shenzhen) Co., Ltd., a whollyforeignowned enterprise organized and existing under the laws of China,with its address at 401A, Building 5, Phase 1, Shenzhen Software Park, No.2 Gaoxin Zhongsan Road, Nanshan District, Shenzhen.乙方：Party B:a)宋雪松Song Xuesong身份证号码:120112196809040417ID Card No.:120112196809040417住所：天津市河西区广东路中裕园33702Address:Zhongyu Yuan 33702, Guangdong Road, Hexi District, Tianjinb)陈蔚力Chen Weili身份证号码:120106197309240516ID Card No.:120106197309240516住所：广东省深圳市宝安区宝城上川路15号Address:Baocheng Shangchuan Road 15, Baoan District, Shenzhen, Guangdong1秘密文件Strictly Confidentialc)王平Wang Ping身份证号码:35020319691030401xID Card No.:35020319691030401x住所：广东省深圳市南山区高新南环路36号彩虹之岸12栋4AAddress:Caihong Zhi’an Building No.12 Suite 4A, Gaoxin Nanhuan Road 36, Nanshan District, Shenzhen, Guangdongd)刘东来Liu Donglai身份证号码:120107196810103912ID Card No.:120107196810103912住所：天津市和平区南京路诚基经贸中心1号楼2门1702号Address:No 1702, Door 2, Build 1, Chengji Economic and Trade Centre, Nanjing Road, Heping District, Tianjin.丙方：北京中传视讯科技有限公司，一家依照中国法律设立和存在的有限责任公司，地址为北京市朝阳区光华路9号SOHO3QLAB32，统一社会信用代码为9111010576215249XM；Party C:Beijing Mobile Vision Technology Co., Ltd., a limited company duly registered in China, with its address at LAB32, SOHO3Q, No 9, Guanghua Road,Chaoyang District, Beijing and its uniform social credit code of 9111010576215249XM.2秘密文件Strictly Confidential在本协议中，甲方、乙方和丙方以下各称“一方”，合称“各方”。In this Agreement, each of Party A, Party B and Party C shall be referred to as a “Party” respectively, and they shall be collectively referred to as the“Parties”.鉴于，乙方系丙方股东并合计持有丙方100%股权，乙方将按本协议之条款授予甲方购买全部或部分该股权的权利。Whereas, Party B are the shareholders of Party C and jointly hold 100% of the equity interest in Party C, and Party B are willing to grant to Party A the rightto acquire such equity interest, in whole or in part, on the terms herein.现各方协商一致，达成如下协议：Now therefore, upon mutual discussion and negotiation, the Parties have reached the following agreement:1.股权买卖Sale and Purchase of Equity Interest1.1授予权利Option Granted乙方在此不可撤销地授予甲方在中国法律允许的前提下，按照甲方自行决定的行使步骤，并按照本协议第1.3条所述的价格，随时一次或多次从乙方购买或指定一人或多人(“被指定人”)从乙方购买其目前和将来所持有的丙方的全部或部分股权（无论乙方出资额和/或持股比例将来是否发生变化）的一项不可撤销的专有权(“股权购买权”)。除甲方和被指定人外，任何第三人均不得享有股权购买权或其他与乙方股权有关的权利。丙方特此同意乙方向甲方授予股权购买权。本款及本协议所规定的“人”指个人、公司、合营企业、合伙、企业、信托或非公司组织。Party B hereby irrevocably grant Party A an irrevocable and exclusive right to purchase, or designate one or more persons (each, a “Designee”) topurchase the equity interests in Party C now and in the future held by Party B (regardless whether Party B’s capital contribution amount and/orpercentage of shareholding will be changed in the future) once or at multiple times at any time in part or in whole at Party A’s sole and absolutediscretion to the extent permitted by Chinese laws and at the price described in Section 1.3 herein (such right being the “Equity Interest PurchaseOption”). Except for Party A and the Designee(s), no other person shall be entitled to the Equity Interest Purchase Option or other rights withrespect to the equity interests of Party B. Party C hereby agrees to the grant by Party B of the Equity Interest Purchase Option to Party A. Theterm “person” as used herein shall refer to individuals, corporations, partnerships, partners, enterprises, trusts or noncorporate organizations.3秘密文件Strictly Confidential1.2行使步骤Steps for Exercise of Equity Interest Purchase Option甲方行使其股权购买权以符合中国法律和法规的规定为前提。甲方行使股权购买权时，应向乙方发出书面通知(“股权购买通知”)，股权购买通知应载明以下事项：(a)甲方关于行使股权购买权的决定；(b)甲方拟从乙方购买的股权份额(“被购买的股权”)；和(c)被购买的股权的买入日期。Subject to the provisions of the laws and regulations of China, Party A may exercise the Equity Interest Purchase Option by issuing a writtennotice to Party B (the “Equity Interest Purchase Option Notice”), specifying: (a) Party A’s decision to exercise the Equity Interest PurchaseOption; (b) the portion of equity interests to be purchased from Party B (the “Optioned Interests”); and (c) the date for purchasing the OptionedInterests.1.3股权买价Equity Interest Purchase Price被购买的股权的买价（“股权买价”）应是行权当时中国法律允许的最低价格。乙方收到该股权对价后，应当提供给丙方与该股权买价相同金额的借款，该借款的期限为20年，且为无息。乙方应当在该借款期限届满时就该借款放弃对丙方的债权。The purchase price of the Optioned Interests (the “Equity Interest Purchase Price”) shall be the lowest price permitted by the laws of China. Afterreceiving the Equity Interest Purchase Price, Party B shall make an interestfree loan equivalent to the amount of Equity Interest Purchase Price toParty C, of which term is 20 years. Each member of Party B shall give up his(her) creditor’s right when the loan term expires.4秘密文件Strictly Confidential1.4转让被购买股权Transfer of Optioned Interests甲方每次行使股权购买权时：For each exercise of the Equity Interest Purchase Option:1.4.1乙方应责成丙方及时召开股东会会议，在该会议上，应通过批准乙方向甲方和/或被指定人转让被购买的股权的决议；Party B shall cause Party C to promptly convene a shareholders meeting, at which a resolution shall be adopted approving Party B’stransfer of the Optioned Interests to Party A and/or the Designee(s);1.4.2乙方应就其向甲方和/或被指定人转让被购买股权取得丙方其他股东同意该转让并放弃优先购买权的书面声明。Party B shall obtain written statements from the other shareholder of Party C giving consent to the transfer of the equity interest to PartyA and/or the Designee(s) and waiving any right of first refusal related thereto.1.4.3乙方应与甲方和/或(在适用的情况下)被指定人按照本协议及股权购买通知的规定，为每次转让签订股权转让协议；Party B shall execute a share transfer contract with respect to each transfer with Party A and/or each Designee (whichever is applicable),in accordance with the provisions of this Agreement and the Equity Interest Purchase Option Notice regarding the Optioned Interests;5秘密文件Strictly Confidential1.4.4有关方应签署所有其他所需协议、协议或文件，取得全部所需的政府批准和同意，并采取所有所需行动，在不附带任何担保权益的情况下，将被购买的股权的有效所有权转移给甲方和/或被指定人并使甲方和/或被指定人成为被购买的股权的登记在册所有人。为本款及本协议的目的，“担保权益”包括担保、抵押、第三方权利或权益，任何购股权、收购权、优先购买权、抵销权、所有权扣留或其他担保安排等；但为了明确起见，不包括在本协议、乙方股权质押协议项下产生的任何担保权益。本款及本协议所规定的“乙方股权质押协议”指甲方、乙方和丙方于本协议签署之日签订的股权质押协议，根据股权质押协议，乙方为担保丙方能履行丙方与甲方签订的独家业务合作协议项下的义务，而向甲方质押其在丙方的全部乙方股权。The relevant Parties shall execute all other necessary contracts, agreements or documents, obtain all necessary government licenses andpermits and take all necessary actions to transfer valid ownership of the Optioned Interests to Party A and/or the Designee(s),unencumbered by any security interests, and cause Party A and/or the Designee(s) to become the registered owner(s) of the OptionedInterests. For the purpose of this Section and this Agreement, “security interests” shall include securities, mortgages, third party’s rightsor interests, any stock options, acquisition right, right of first refusal, right to offset, ownership retention or other security arrangements,but shall be deemed to exclude any security interest created by this Agreement and Party B’s Equity Interest Pledge Agreement. “PartyB’s Equity Interest Pledge Agreement” as used in this Section and this Agreement shall refer to the Equity Interest Pledge Agreementexecuted by and among Party A, Party B and Party C on the date of this Agreement, whereby Party B pledge all of their equity interests inParty C to Party A, in order to guarantee Party C’s performance of its obligations under the Exclusive Business Corporation Agreementexecuted by and between Party C and Party A.6秘密文件Strictly Confidential2.知识产权独家购买权Exclusive Option regarding the Intellectual Property Rights2.1本协议签订之日起，若乙方拟转让、出售或以其他方式处置（任一处置方式以下简称“转让”）其拥有或持有的全部或部分知识产权（以下称“知识产权”，定义见第2.4条），甲方有权独家购买该等知识产权。From the date hereof, if Party B proposes to transfer, sell or dispose of (each, a “transfer”) all or any part of the intellectual property rights ownedor held by Party B (“IPR”), Party A shall have exclusive option.2.2若乙方有意转让全部或部分知识产权，应事先向甲方发出书面通知(“转让通知”)，转让通知应载明以下事项：(a) 乙方关于转让知识产权的意向；(b) 乙方拟转让的知识产权清单(“拟转让知识产权”)及转让的价格和其他条件。转让通知视为乙方向甲方发出的一份要约，按照该要约，乙方同意按转让通知中指定的价格条件向甲方转让全部或部分拟转让知识产权。Prior to Party B proposes to transfer all or any part of its IPR, Party B shall give Party A a written notice (“Transfer Notice”), which shall specify (a)Party B’s intention to make the transfer; (b) the list of IPR to be transferred (“Offered IPR”) and the consideration and other conditions uponwhich the transfer is to be made. The Transfer Notice constitutes Party B’s offer given to Party A, pursuant to which, Party B agrees to transfer allor any part of its Offered IPR to Party A based on the same conditions described in the Transfer Notice.7秘密文件Strictly Confidential2.3甲方收到转让通知后，有权在30日内选择按照转让通知中列明的转让价格和条件购买拟转让知识产权。如果甲方行使其独家购买权，双方应于甲方收到转让通知后45日内签订有关的知识产权转让协议，乙方应办理法律规定的知识产权转让的批准和登记手续。Party A shall have an option for a period of 30 days from Party A’s receipt of the Transfer Notice to elect to purchase the Offered IPR at the sameprice and subject to the same conditions as described in the Transfer Notice. If Party A decides to exercise its exclusive option, the parties shallenter into relevant IPR transfer agreement within 45 days upon Party A’s receipt of the Transfer Notice and Party B is responsible to complete allrelated approvals and registrations formalities as prescribed by the PRC law.2.4本协议第2条所称“知识产权”指任何知识产权，包括但不限于著作权、专利权、专利申请权、商标、域名、软件、专有技术，并包括前述知识产权申请权利以及登记注册的权利，以及其他所有与前述知识产权有关的权利和权益。The “IPR” referred to in this Article 2 means any intellectual property rights, including, without limitations, copyrights, patents, patentapplications, trademarks, domain names, software and knowhow together with (a) all rights to apply for or register any of the foregoing and (b) allother rights and interests to any of the foregoing.8秘密文件Strictly Confidential3.承诺Covenants3.1有关丙方的承诺Covenants regarding Party C乙方（作为丙方的股东）和丙方在此承诺：Party B (as the shareholders of Party C) and Party C hereby covenant as follows:3.1.1未经甲方的事先书面同意，不以任何形式补充、更改或修改丙方公司章程文件，增加或减少其注册资本，或以其他方式改变其注册资本结构；Without the prior written consent of Party A, they shall not in any manner supplement, change or amend the articles of association andbylaws of Party C, increase or decrease its registered capital, or change its structure of registered capital in other manners;3.1.2按照良好的财务和商业标准及惯例，保持其公司的存续，审慎地及有效地经营其业务和处理事务；They shall maintain Party C’s corporate existence in accordance with good financial and business standards and practices by prudentlyand effectively operating its business and handling its affairs;3.1.3未经甲方的事先书面同意，不在本协议签署之日起的任何时间出售、转让、抵押或以其他方式处置丙方的任何资产、业务或收入的合法或受益权益，或允许在其上设置任何其他担保权益；Without the prior written consent of Party A, they shall not at any time following the date hereof, sell, transfer, mortgage or dispose of inany manner any assets of Party C or legal or beneficial interest in the business or revenues of Party C, or allow the encumbrance thereonof any security interest;3.1.4未经甲方的事先书面同意，不发生、继承、保证或容许存在任何债务，但(i)正常或日常业务过程中产生而不是通过借款方式产生的债务；和(ii)已向甲方披露和得到甲方书面同意的债务除外；Without the prior written consent of Party A, they shall not incur, inherit, guarantee or suffer the existence of any debt, except for (i)debts incurred in the ordinary course of business other than through loans; and (ii) debts disclosed to Party A for which Party A’swritten consent has been obtained;9秘密文件Strictly Confidential3.1.5一直在正常业务过程中经营所有业务，以保持丙方的资产价值，不进行任何足以影响其经营状况和资产价值的作为/不作为；They shall always operate all of Party C’s businesses during the ordinary course of business to maintain the asset value of Party C andrefrain from any action/omission that may affect Party C’s operating status and asset value;3.1.6未经甲方的事先书面同意，不得让丙方签订任何重大协议，但在正常业务过程中签订的协议除外(就本段而言，如果一份协议的价值超过【人民币10万元】，即被视为重大协议)；Without the prior written consent of Party A, they shall not cause Party C to execute any major contract, except the contracts in theordinary course of business (for purpose of this subsection, a contract with a value exceeding RMB 100,000 shall be deemed a majorcontract);3.1.7未经甲方的事先书面同意，丙方不得向任何人提供贷款或信贷；Without the prior written consent of Party A, they shall not cause Party C to provide any person with any loan or credit;3.1.8应甲方要求，向其提供所有关于丙方的营运和财务状况的资料；They shall provide Party A with information on Party C’s business operations and financial condition at Party A’s request;10秘密文件Strictly Confidential3.1.9如甲方提出要求，丙方应从甲方接受的保险公司处购买和持有有关其资产和业务的保险，该保险的金额和险种应与经营类似业务的公司一致；If requested by Party A, they shall procure and maintain insurance in respect of Party C’s assets and business from an insurance carrieracceptable to Party A, at an amount and type of coverage typical for companies that operate similar businesses;3.1.10未经甲方的事先书面同意，丙方不得与任何人合并或联合，或对任何人进行收购或投资；Without the prior written consent of Party A, they shall not cause or permit Party C to merge, consolidate with, acquire or invest in anyperson;3.1.11将发生的或可能发生的与丙方资产、业务或收入有关的诉讼、仲裁或行政程序立即通知甲方；They shall immediately notify Party A of the occurrence or possible occurrence of any litigation, arbitration or administrative proceedingsrelating to Party C’s assets, business or revenue;3.1.12为保持丙方对其全部资产的所有权，签署所有必要或适当的文件，采取所有必要或适当的行动和提出所有必要或适当的控告或对所有索偿进行必要和适当的抗辩；To maintain the ownership by Party C of all of its assets, they shall execute all necessary or appropriate documents, take all necessary orappropriate actions and file all necessary or appropriate complaints or raise necessary and appropriate defenses against all claims;11秘密文件Strictly Confidential3.1.13未经甲方事先书面同意，不得以任何形式派发股息予各股东，但一经甲方要求，丙方应立即将其所有可分配利润全部立即分配给其各股东；及Without the prior written consent of Party A, they shall ensure that Party C shall not in any manner distribute dividends to itsshareholders, provided that upon Party A’s written request, Party C shall immediately distribute all distributable profits to itsshareholders; and3.1.14根据甲方的要求，委任由其指定的任何人士出任丙方的董事和/或执行董事。At the request of Party A, they shall appoint any persons designated by Party A as the director and/or executive director of Party C.3.2乙方和丙方的承诺Covenants of Party B and Party C乙方承诺：Party B hereby covenant as follows:3.2.1未经甲方的事先书面同意，不出售、转让、抵押或以其他方式处置其拥有的丙方的股权的合法或受益权益，或允许在其上设置任何其他担保权益，但根据乙方签署的《股权质押协议》在该股权上设置的质押则除外；Without the prior written consent of Party A, Party B shall not sell, transfer, mortgage or dispose of in any other manner any legal orbeneficial interest in the equity interests in Party C held by Party B, or allow the encumbrance thereon of any security interest, except forthe pledge placed on these equity interests in accordance with Party B’s Equity Interest Pledge Agreement;12秘密文件Strictly Confidential3.2.2促使丙方股东会和/或执行董事不批准在未经甲方的事先书面同意的情况下，出售、转让、抵押或以其他方式处置任何乙方持有之丙方的股权的合法权益或受益权，或允许在其上设置任何其他担保权益，但批准根据乙方签署的《股权质押协议》在乙方股权上设置的质押则除外；Party B shall cause the shareholders’ meeting and/or the executive director of Party C not to approve the sale, transfer, mortgage ordisposition in any other manner of any legal or beneficial interest in the equity interests in Party C held by Party B, or allow theencumbrance thereon of any security interest, without the prior written consent of Party A, except for the pledge placed on these equityinterests in accordance with Party B’s Equity Interest Pledge Agreement;3.2.3未经甲方的事先书面同意的情况下，对于丙方与任何人合并或联合，或对任何人进行收购或投资，乙方将促成丙方股东会或执行董事不予批准；Party B shall cause the shareholders’ meeting or the executive director of Party C not to approve the merger or consolidation with anyperson, or the acquisition of or investment in any person, without the prior written consent of Party A;3.2.4将发生的或可能发生的任何关于其所拥有的股权的诉讼、仲裁或行政程序立即通知甲方；Party B shall immediately notify Party A of the occurrence or possible occurrence of any litigation, arbitration or administrativeproceedings relating to the equity interests in Party C held by Party B;13秘密文件Strictly Confidential3.2.5促使丙方股东会或执行董事表决赞成本协议规定的被购买的股权的转让并应甲方之要求采取其他任何行动；Party B shall cause the shareholders’ meeting or the executive director of Party C to vote their approval of the transfer of the OptionedInterests as set forth in this Agreement and to take any and all other actions that may be requested by Party A;3.2.6为保持其对股权的所有权，签署所有必要或适当的文件，采取所有必要或适当的行动和提出所有必要或适当的控告或对所有索偿进行必要和适当的抗辩；To the extent necessary to maintain Party B’s ownership in Party C, Party B shall execute all necessary or appropriate documents, take allnecessary or appropriate actions and file all necessary or appropriate complaints or raise necessary and appropriate defenses against allclaims;3.2.7应甲方的要求，委任由其指定的任何人士出任丙方的董事和/或执行董事；Party B shall appoint any designee of Party A as the director and/or executive director of Party C, at the request of Party A;3.2.8经甲方随时要求，应向其指定的代表在任何时间无条件地根据本协议的股权购买权立即转让其股权，并放弃其对其他现有股东进行上述股权转让所享有的优先购买权（如有的话）；和At the request of Party A at any time, Party B shall promptly and unconditionally transfer its equity interests in Party C to Party A’sDesignee(s) in accordance with the Equity Interest Purchase Option under this Agreement, and Party B hereby waives its right of firstrefusal (if any) to the share transfer by the other existing shareholder of Party C (if any); and14秘密文件Strictly Confidential3.2.9严格遵守本协议及各方共同或分别签订的其他协议的各项规定，切实履行该等协议项下的各项义务，并不进行任何足以影响该等协议的有效性和可执行性的作为/不作为。如果乙方对于本协议项下或乙方股权质押协议下或对甲方的授权委托书中的股权，还留存有任何权利，除非甲方书面指示，否则乙方仍不得行使该权利。Party B shall strictly abide by the provisions of this Agreement and other contracts jointly or separately executed by and among Party B,Party C and Party A, perform the obligations hereunder and thereunder, and refrain from any action/omission that may affect theeffectiveness and enforceability thereof. To the extent that Party B has any remaining rights with respect to the equity interests subject tothis Agreement hereunder or under Party B’s Equity Interest Pledge Agreement or under the Power of Attorney granted in favor of PartyA, Party B shall not exercise such rights except in accordance with the written instructions of Party A.4.陈述和保证Representations and Warranties乙方和丙方特此在本协议签署之日和每一个转让日向甲方共同及分别陈述和保证如下：Party B and Party C hereby represent and warrant to Party A, jointly and severally, as of the date of this Agreement and each date of transfer of theOptioned Interests, that:4.1其具有签订和交付本协议和其为一方的、根据本协议为每一次转让被购买的股权而签订的任何股权转让协议(各称为"转让协议")，并履行其在本协议和任何转让协议项下的义务的权力和能力。乙方和丙方同意在甲方行使购买权时，他们将签署与本协议条款一致的转让协议。本协议和其是一方的各转让协议一旦签署后，构成或将对其构成合法、有效及具有约束力的义务并可按照其条款对其强制执行；They have the authority to execute and deliver this Agreement and any share transfer contracts to which they are a party concerning theOptioned Interests to be transferred thereunder (each, a “Transfer Contracts”), and to perform their obligations under this Agreement and anyTransfer Contracts. Party B and Party C agree to enter into Transfer Contracts consistent with the terms of this Agreement upon Party A’s exerciseof the Equity Interest Purchase Option. This Agreement and the Transfer Contracts to which they are a party constitute or will constitute theirlegal, valid and binding obligations and shall be enforceable against them in accordance with the provisions thereof;15秘密文件Strictly Confidential4.2无论是本协议或任何转让协议的签署和交付还是其在本协议或任何转让协议项下的义务的履行均不会：(i)导致违反任何有关的中国法律；(ii)与丙方章程或其他组织文件相抵触；(iii)导致违反其是一方或对其有约束力的任何协议或文件，或构成其是一方或对其有约束力的任何协议或文件项下的违约；(iv)导致违反有关向任何一方颁发的任何许可或批准的授予和(或)继续有效的任何条件；或(v)导致向任何一方颁发的任何许可或批准中止或被撤销或附加条件；The execution and delivery of this Agreement or any Transfer Contracts and the obligations under this Agreement or any Transfer Contracts shallnot: (i) cause any violation of any applicable laws of China; (ii) be inconsistent with the articles of association, bylaws or other organizationaldocuments of Party C; (iii) cause the violation of any contracts or instruments to which they are a party or which are binding on them, orconstitute any breach under any contracts or instruments to which they are a party or which are binding on them; (iv) cause any violation of anycondition for the grant and/or continued effectiveness of any licenses or permits issued to either of them; or (v) cause the suspension orrevocation of or imposition of additional conditions to any licenses or permits issued to either of them;4.3乙方对其在丙方拥有的股权拥有良好和可出售的所有权，除乙方签署的《股权质押协议》外，乙方在上述股权上没有设置任何担保权益；Party B have a good and merchantable title to the equity interests in Party C they hold. Except for Party B’s Equity Interest Pledge Agreement,Party B have not placed any security interest on such equity interests;16秘密文件Strictly Confidential4.4目前没有悬而未决的或构成威胁的与丙方的股权、丙方资产有关的或与丙方有关的诉讼、仲裁或行政程序。There are no pending or threatened litigation, arbitration or administrative proceedings relating to the equity interests in Party C, assets of Party Cor Party C.5.生效日Effective Date5.1本协议于各方签署本协议之日生效，有效期10年，经甲方选择可再延长10年。This Agreement shall become effective upon the date hereof, and remain effective for a term of 10 years, and may be renewed for an additional 10years at Party A’s election.5.2若丙方股东发生变化，由新股东签署此协议，在此协议签署之日，原协议自动视为无效。In the event of a change in the shareholders of Party C, the new shareholder should sign this agreement and the original agreement willautomatically be deemed invalid on the date of signing of this agreement.17秘密文件Strictly Confidential6.适用法律与争议解决Governing Law and Resolution of Disputes6.1适用法律Governing law本协议的订立、效力、解释、履行、修改和终止以及争议解决均适用中国正式公布并可公开得到的法律。对中国正式公布并可公开得到的法律没有规定的事项，将适用国际法律原则和惯例。The execution, effectiveness, construction, performance, amendment and termination of this Agreement and the resolution of disputes hereundershall be governed by the formally published and publicly available laws of China. Matters not covered by formally published and publiclyavailable laws of China shall be governed by international legal principles and practices.6.2争议的解决方法Methods of Resolution of Disputes因解释和履行本协议而发生的任何争议，本协议各方应首先通过友好协商的方式加以解决。如果在一方向其他方发出要求协商解决的书面通知后30天之内争议仍然得不到解决，则任何一方均可将有关争议提交给中国国际经济贸易仲裁委员会，由该会按照其届时有效的仲裁规则仲裁解决。仲裁应在北京进行，使用之语言为中文。仲裁裁决是终局性的，对各方均有约束力。In the event of any dispute with respect to the construction and performance of this Agreement, the Parties shall first resolve the dispute throughfriendly negotiations. In the event the Parties fail to reach an agreement on the dispute within 30 days after either Party’s request to the otherParties for resolution of the dispute through negotiations, either Party may submit the relevant dispute to the China International Economic andTrade Arbitration Commission for arbitration, in accordance with its then effective arbitration rules. The arbitration shall be conducted in Beijing,and the language used in arbitration shall be Chinese. The arbitration award shall be final and binding on all Parties.18秘密文件Strictly Confidential7.税款、费用Taxes and Fees每一方应承担根据中国法律因准备和签署本协议和各转让协议以及完成本协议和各转让协议拟定的交易而由该方发生的或对其征收的任何和全部的转让和注册的税、花费和费用。Each Party shall pay any and all transfer and registration tax, expenses and fees incurred thereby or levied thereon in accordance with the laws of China inconnection with the preparation and execution of this Agreement and the Transfer Contracts, as well as the consummation of the transactionscontemplated under this Agreement and the Transfer Contracts.8.通知Notices8.1本协议项下要求或发出的所有通知和其他通信应通过专人递送、挂号邮寄、邮资预付或商业快递服务或传真的方式发到该方下列地址。每一通知还应再以电子邮件送达。该等通知视为有效送达的日期按如下方式确定：All notices and other communications required or permitted to be given pursuant to this Agreement shall be delivered personally or sent byregistered mail, postage prepaid, by a commercial courier service or by facsimile transmission to the address of such Party set forth below. Aconfirmation copy of each notice shall also be sent by email. The dates on which notices shall be deemed to have been effectively given shall bedetermined as follows:8.1.1通知如果是以专人递送、快递服务或挂号邮寄、邮资预付发出的，则以于设定为通知的地址在接收或拒收之日为有效送达日。Notices given by personal delivery, by courier service or by registered mail, postage prepaid, shall be deemed effectively given on thedate of receipt or refusal at the address specified for notices.19秘密文件Strictly Confidential8.1.2通知如果是以传真发出的，则以成功传送之日为有效送达日（应以自动生成的传送确认信息为证）。Notices given by facsimile transmission shall be deemed effectively given on the date of successful transmission (as evidenced by anautomatically generated confirmation of transmission).8.2为通知的目的，各方地址如下：For the purpose of notices, the addresses of the Parties are as follows:甲方：中传天下信息科技（深圳）有限公司Party A:Zhongchuan Tianxia Information Technology (Shenzhen) Co., Ltd.地址：深圳市南山区高新中三道2号深圳软件园一期五栋401AAddress:401A, Building 5, Phase 1, Shenzhen Software Park, No.2 Gaoxin Zhongsan Road, Nanshan District, Shenzhen.收件人：洪婷Attn:Hong Ting乙方：Party B: 宋雪松Song Xuesong住所：天津市河西区广东路中裕园33702Address:Zhongyu Yuan 33702, Guangdong Road, Hexi District, Tianjin20秘密文件Strictly Confidential陈蔚力Chen Weili住所：广东省深圳市宝安区宝城上川路15号Address:Baocheng Shangchuan Road 15, Baoan District, Shenzhen, Guangdong王平Wang Ping住所：广东省深圳市南山区高新南环路36号彩虹之岸12栋4AAddress:Caihong Zhi’an Building No.12 Suite 4A, Gaoxin Nanhuan Road 36, Nanshan District, Shenzhen, Guangdong刘东来Liu Donglai住所：天津市和平区南京路诚基经贸中心1号楼2门1702号Address:No 1702, Door 2, Build 1, Chengji Economic and Trade Centre, Nanjing Road, Heping District, Tianjin.丙方：北京中传视讯科技有限公司Party C:Beijing Mobile Vision Technology Co., Ltd.地址：北京市朝阳区光华路9号SOHO3QLAB32Address: LAB32, SOHO3Q, No 9, Guanghua Road, Chaoyang District, Beijing .收件人：宋雪松Attn: Song Xuesong8.3任何一方可按本条规定随时给其他方发出通知来改变其接收通知的地址。Any Party may at any time change its address for notices by a notice delivered to the other Parties in accordance with the terms hereof.21秘密文件Strictly Confidential9.保密责任Confidentiality各方承认及确定彼此就有关本协议而交换的任何口头或书面资料均属机密资料。各方应当对所有该等资料予以保密，而在未得其他方书面同意前，不得向任何第三者披露任何有关资料，惟下列情况除外：(a)公众人士知悉或将会知悉该等资料(并非由接受资料之一方擅自向公众披露)；(b)适用法律法规或股票交易的规则或规例所需披露之资料；或(c)由任何一方就本协议所述交易而需向其法律或财务顾问披露之资料而该法律或财务顾问亦需遵守与本条款相类似之保密责任。如任何一方工作人员或聘请机构的泄密均视为该方的泄密，需依本协议承担违约责任。无论本协议以任何理由终止，本条款仍然生效。The Parties acknowledge that any oral or written information exchanged among them with respect to this Agreement is confidential information. Each Partyshall maintain the confidentiality of all such information, and without obtaining the written consent of other Parties, it shall not disclose any relevantinformation to any third parties, except in the following circumstances: (a) such information is or will be in the public domain (provided that this is not theresult of a public disclosure by the receiving party); (b) information disclosed as required by applicable laws or rules or regulations of any stock exchange;or (c) information required to be disclosed by any Party to its legal counsel or financial advisor regarding the transaction contemplated hereunder, and suchlegal counsel or financial advisor are also bound by confidentiality duties similar to the duties in this section. Disclosure of any confidential information bythe staff members or agency hired by any Party shall be deemed disclosure of such confidential information by such Party, which Party shall be held liablefor breach of this Agreement. This Section shall survive the termination of this Agreement for any reason.22秘密文件Strictly Confidential10.进一步保证Further Warranties各方同意迅速签署为执行本协议的各项规定和目的而合理需要的或对其有利的文件，以及为执行本协议的各项规定和目的而采取合理需要的或对其有利的进一步行动。The Parties agree to promptly execute documents that are reasonably required for or are conducive to the implementation of the provisions and purposes ofthis Agreement and take further actions that are reasonably required for or are conducive to the implementation of the provisions and purposes of thisAgreement.11.其他Miscellaneous11.1修订、修改与补充Amendment, change and supplement对本协议作出修订、修改与补充，必须经每一方签署书面协议。Any amendment, change and supplement to this Agreement shall require the execution of a written agreement by all of the Parties.11.2完整协议Entire agreement除了在本协议签署后所作出的书面修订、补充或修改以外，本协议构成本协议各方就本协议标的物所达成的完整协议，取代在此之前就本协议标的物所达成的所有口头或书面的协商、陈述和协议。 Except for the amendments, supplements or changes in writing executed after theexecution of this Agreement, this Agreement shall constitute the entire agreement reached by and among the Parties hereto with respect to thesubject matter hereof, and shall supercede all prior oral and written consultations, representations and contracts reached with respect to thesubject matter of this Agreement.23秘密文件Strictly Confidential11.3标题Headings本协议的标题仅为方便阅读而设，不应被用来解释、说明或在其他方面影响本协议各项规定的含义。The headings of this Agreement are for convenience only, and shall not be used to interpret, explain or otherwise affect the meanings of theprovisions of this Agreement.11.4语言Language本协议以中文和英文书就，一式八份，乙方共计六名股东以及甲方、丙方各持一份，具有同等效力；中英文版本如有冲突，应以中文版为准。This Agreement is written in both Chinese and English language in eight copies, the 6 shareholders of Party B, Party A and Party C having onecopy with equal legal validity respectively; in case there is any conflict between the Chinese version and the English version, the Chinese versionshall prevail.11.5可分割性Severability如果本协议有任何一条或多条规定根据任何法律或法规在任何方面被裁定为无效、不合法或不可执行，本协议其余规定的有效性、合法性或可执行性不应因此在任何方面受到影响或损害。各方应通过诚意磋商，争取以法律许可以及各方期望的最大限度内有效的规定取代那些无效、不合法或不可执行的规定，而该等有效的规定所产生的经济效果应尽可能与那些无效、不合法或不能强制执行的规定所产生的经济效果相似。In the event that one or several of the provisions of this Agreement are found to be invalid, illegal or unenforceable in any aspect in accordancewith any laws or regulations, the validity, legality or enforceability of the remaining provisions of this Agreement shall not be affected orcompromised in any respect. The Parties shall strive in good faith to replace such invalid, illegal or unenforceable provisions with effectiveprovisions that accomplish to the greatest extent permitted by law and the intentions of the Parties, and the economic effect of such effectiveprovisions shall be as close as possible to the economic effect of those invalid, illegal or unenforceable provisions.24秘密文件Strictly Confidential11.6继任者Successors本协议对各方各自的继任者和各方所允许的受让方应具有约束力并对其有利。This Agreement shall be binding on and shall inure to the interest of the respective successors of the Parties and the permitted assigns of suchParties.11.7继续有效Survival11.7.1协议期满或提前终止前因本协议而发生的或到期的任何义务在本协议期满或提前终止后继续有效。Any obligations that occur or that are due as a result of this Agreement upon the expiration or early termination of this Agreement shallsurvive the expiration or early termination thereof.11.7.2本协议第5、6、9条和本第11.7条的规定在本协议终止后继续有效。The provisions of Articles 5, 6, 9 and this Section 11.7 shall survive the termination of this Agreement.25秘密文件Strictly Confidential11.8弃权Waivers任何一方可以对本协议的条款和条件作出弃权，但必须经书面作出并经各方签字。一方在某种情况下就其他方的违约所作的弃权不应被视为该方在其他情况下就类似的违约已经对其他方作出弃权。Any Party may waive the terms and conditions of this Agreement, provided that such a waiver must be provided in writing and shall require thesignatures of the Parties. No waiver by any Party in certain circumstances with respect to a breach by other Parties shall operate as a waiver bysuch a Party with respect to any similar breach in other circumstances.本页其余部分刻意留为空白The Remainder of this page is intentionally left blank26秘密文件Strictly Confidential有鉴于此，各方已自行或使得其各自授权代表于文首所载日期签署本独家购买权协议。IN WITNESS WHEREOF, the Parties have executed, or caused their respective duly authorized representatives to execute, this Exclusive Option Agreement as ofthe date first above written.甲方：中传天下信息科技（深圳）有限公司（盖章）Party A: Zhongchuan Tianxia Information Technology (Shenzhen) Co., Ltd. (Seal)签字：By:/s/ Hong Ting姓名：洪婷Name: Hong Ting职务：总经理Title: General Manager秘密文件 Strictly Confidential有鉴于此，各方已自行或使得其各自授权代表于文首所载日期签署本独家购买权协议。IN WITNESS WHEREOF, the Parties have executed, or caused their respective duly authorized representatives to execute, this Exclusive Option Agreement as ofthe date first above written.乙方：Party B:宋雪松Song Xuesong签字：By:/s/ Song Xuesong秘密文件 Strictly Confidential有鉴于此，各方已自行或使得其各自授权代表于文首所载日期签署本独家购买权协议。IN WITNESS WHEREOF, the Parties have executed, or caused their respective duly authorized representatives to execute, this Exclusive Option Agreement as ofthe date first above written.乙方：Party B:陈蔚力Chen Weili签字：By:/s/ Chen Weili秘密文件 Strictly Confidential有鉴于此，各方已自行或使得其各自授权代表于文首所载日期签署本独家购买权协议。IN WITNESS WHEREOF, the Parties have executed, or caused their respective duly authorized representatives to execute, this Exclusive Option Agreement as ofthe date first above written.乙方：Party B:王平Wang Ping签字：By:/s/ Wang Ping秘密文件 Strictly Confidential有鉴于此，各方已自行或使得其各自授权代表于文首所载日期签署本独家购买权协议。IN WITNESS WHEREOF, the Parties have executed, or caused their respective duly authorized representatives to execute, this Exclusive Option Agreement as ofthe date first above written.乙方：Party B:刘东来Liu Donglai签字：By:/s/ Liu Donglai秘密文件 Strictly Confidential有鉴于此，各方已自行或使得其各自授权代表于文首所载日期签署本独家购买权协议。IN WITNESS WHEREOF, the Parties have executed, or caused their respective duly authorized representatives to execute, this Exclusive Option Agreement as ofthe date first above written.丙方：北京中传视讯科技有限公司（盖章）Party B: Beijing Mobile Vision Technology Co., Ltd. (Seal)签字：By:/s/ Song Xuesong姓名：宋雪松Name:Song Xuesong职务：董事长Title:Chairman of the Board秘密文件 Strictly ConfidentialEX4.17 5 f20f2017ex417_luokung.htm EQUITY INTEREST PLEDGE AGREEMENT BY AND AMONG ZHONGCHUAN TIANXIA INFORMATION TECHNOLOGY(SHENZHEN) CO., LTD., XUESONG SONG, WEILI CHEN, PING WANG, DONGLAI LIU, AND BEIJING MOBILE VISION TECHNOLOGY CO., LTD., DATEDAUGUST 31, 2015Exhibit 4.17股权质押协议Equity Interest Pledge Agreement本股权质押协议（下称"本协议”）由下列各方于年月日在中华人民共和国（下称“中国”）北京签订：This Equity Interest Pledge Agreement (this "Agreement") has been executed by and among the following parties on in Beijing, the People’sRepublic of China (the “China” or “PRC”):甲方：中传天下信息科技（深圳）有限公司（下称“质权人”）Party A: Zhongchuan Tianxia Information Technology (Beijing) Co., Ltd. (“Pledgee”)地址：深圳市南山区高新中三道2号深圳软件园一期五栋401AAddress: 401A, Building 5, Phase 1, Shenzhen Software Park, No.2 Gaoxin Zhongsan Road, Nanshan District, Shenzhen统一社会信用代码： 91440300565701058RUniform Social Credit Code: 91440300565701058R乙方(下称“出质人”)：Party B ( “Pledgors”):a)宋雪松Song Xuesong身份证号码:ID Card No.:b)陈蔚力Chen Weili身份证号码:ID Card No.:1秘密文件 Strictly Confidentialc)王平Wang Ping身份证号码:ID Card No.:d)刘东来Liu Donglai身份证号码:ID Card No.:丙方：北京中传视讯科技有限公司Party C: Beijing Mobile Vision Technology Co., Ltd.地址：北京市朝阳区光华路9号SOHO3QLAB32Address: LAB32, SOHO3Q, No 9, Guanghua Road, Chaoyang District, Beijing统一社会信用代码：9111010576215249XMUniform Social Credit Code: 9111010576215249XM在本协议中，质权人、出质人和丙方以下各称“一方”，合称“各方”。In this Agreement, each of Pledgee, Pledgors and Party C shall be referred to as a "Party" respectively, and they shall be collectively referred to as the"Parties".鉴于：Whereas:1．出质人全部为中国境内居民自然人，共同持有丙方100%的股权。丙方是一家在中国注册成立的、主要从事手机视频技术研发、内容制作和产业化市场推广的有限责任公司。丙方有意在此确认出质人和质权人在本协议下的权利和义务并提供必要的协助登记该质权；All of the Pledgors are natural persons resided in PRC, and collectively hold 100% of the equity interest in Party C. Party C is a limited company registered inChina, mainly engaging in mobile video frequency technology research, development, content creation, sale and related industrialization promotion. Party Cacknowledges the respective rights and obligations of Pledgors and Pledgee under this Agreement, and intends to provide any necessary assistance inregistering the Pledge;2．质权人是一家在中国注册的外商独资企业。质权人与丙方于年月日签订了独家业务合作协议；Pledgee is a whollyforeignowned enterprise registered in China. Pledgee and Party C have executed an Exclusive Business Cooperation Agreement as of [*],[*];3．为了保证丙方全面履行独家业务合作协议项下的义务，出质人以其拥有的全部丙方股权向质权人做出质押担保。To ensure that Party C fully performs its obligations under the Exclusive Business Cooperation Agreement, Pledgors hereby pledge to the Pledgee all of theequity interests they hold in Party C.为了履行业务合作协议的条款，各方商定按照以下条款签订本协议。To perform the provisions of the Business Cooperation Agreement, the Parties have mutually agreed to execute this Agreement upon the following terms.2秘密文件 Strictly Confidential1.定义Definitions除非本协议另有规定，下列词语含义为：Unless otherwise provided herein, the terms below shall have the following meanings:1.1质权：指出质人根据本协议第2条给予质权人的担保物权，即指质权人所享有的，以出质人质押给质权人的股权折价或拍卖、变卖该股权的价款优先受偿的权利。Pledge: shall refer to the security interest granted by Pledgors to Pledgee pursuant to Article 2 of this Agreement, i.e., the right of Pledgee to becompensated on a preferential basis with the conversion, auction or sales price of the Equity Interest.1.2股权：指出质人现在和将来（通过增资和/或转股）合法持有的其在丙方的全部股权权益。Equity Interest: shall refer to all of the equity interest in Party C lawfully, held now and to be held (through capital increase and/or equity transfer)hereafter by Pledgors.1.3质押期限：指本协议第3条规定的期间。Term of Pledge: shall refer to the term set forth in Article 3 of this Agreement.1.4业务合作协议：指丙方与质权人于本协议日签订的独家业务合作协议。Business Cooperation Agreement: shall refer to the Exclusive Business Cooperation Agreement executed by and between Party C and Pledgee on thedate of this Agreement.1.5违约事件：指本协议第7条所列任何情况。Event of Default: shall refer to any of the circumstances set forth in Article 7 of this Agreement.1.6违约通知：指质权人根据本协议发出的宣布违约事件的通知。Notice of Default: shall refer to the notice issued by Pledgee in accordance with this Agreement declaring an Event of Default.3秘密文件 Strictly Confidential2.质权The Pledge作为丙方按时和全额支付业务合作协议项下质权人应得的任何或全部的款项，包括但不限于业务合作协议中规定的咨询和服务费的担保（无论该等费用的到期应付是由于到期日的到来、提前收款的要求或其它原因），以及丙方充分履行其在业务合作协议项下其他所有义务（丙方按时和全额支付业务合作协议项下甲方应得的任何或全部的款项及丙方在业务合作协议项下其他所有义务，以下统称为“被担保债务”）的担保，出质人特此将其现有或将拥有的丙方的全部股权权益质押给质权人。As collateral security for the timely and complete payment and performance when due (whether at stated maturity, by acceleration or otherwise) of any or all ofthe payments due (the “all payments in pledge”) by Party C, including without limitation the consulting and services fees payable to the Pledgee under theBusiness Cooperation Agreement, Pledgors hereby pledge to Pledgee a first security interest in all of Pledgors’ right, title and interest, whether now owned orhereafter acquired by Pledgors, in the Equity Interest of Party C.3.质押期限Term of Pledge3.1本质权自本协议项下的股权出质在相应的工商行政管理机关登记之日起生效，质权有效期持续到业务合作协议下所有丙方欠付质权人的款项结清为止。出质人和丙方应（一）自本协议签署之日起3个工作日内，将本协议的质权登记在丙方股东名册上，并（二）自本协议签署之日起10个工作日内向相应的工商行政管理机关申请登记本协议项下的质权。各方共同确认，为办理股权质押工商登记手续，各方及丙方其他股东应按照丙方所在地工商行政管理部门要求的形式签署、真实反映本协议项下质权信息的《股权质押合同》（以下简称“工商登记质押合同”）提交给工商管理机关，工商登记质押合同中未约定事项，仍以本协议约定为准。出质人和丙方应当按照中国法律法规和有关工商行政管理机关的各项要求，提交所有必要的文件并办理所有必要手续，保证质权在递交申请后尽快获得登记。如果出质人持有的丙方注册资本数额增加（不管是通过直接认缴丙方的增资还是从其他股东处受让股权），各方一致同意将采取一切必要的行动和签署一切必要的文件以按照登记机关的要求完成质权的变更登记，以确保本协议项下的质权的持续有效。The Pledge shall become effective on such date when the pledge of the Equity Interest contemplated herein has been registered’ with relevantadministration for industry and commerce (the “AIC”). The Pledge shall be continuously valid until all payments due under the Business CooperationAgreement have been fulfilled by Party C. Pledgors and Party C shall (1) register the Pledge in the shareholders' register of Party C within 3 businessdays following the execution of this Agreement, and (2) submit an application to the AIC for the registration of the Pledge of the Equity Interestcontemplated herein within 10 business days following the execution of this Agreement. The parties covenant that for the purpose of registration of thePledge, the parties hereto and all other shareholders of Party C shall submit to the AIC the Equity Interest Pledge Contract in the form required by theAIC at the location of Party C which shall truly reflect the information of the Pledge hereunder (the “AIC Pledge Contract”). For matters not specified inthe AIC Pledge Contract, the parties shall be bound by the provisions of this Agreement. Pledgors and Party C shall submit all necessary documentsand complete all necessary procedures, as required by the PRC laws and regulations and the relevant AIC, to ensure that the Pledge of the EquityInterest shall be registered with the AIC as soon as possible after filing. In the event that the amount of registered capital held by Pledgors is increased(either by subscribing increased registered capital from Party C or acquiring equity interest from other shareholders), the Parties hereto agree that theyshall take any necessary action and execute any necessary document to complete the registration of change of Pledge according to the requirement ofAIC so that the Pledge in this Agreement remains effective.4秘密文件 Strictly Confidential3.2质押期限内，如丙方未按业务合作协议交付咨询服务费等费用，质权人有权但无义务按本协议的规定处分质权。During the Term of Pledge, in the event Party C fails to pay the exclusive consulting or service fees in accordance with the Business CooperationAgreement, Pledgee shall have the right, but not the obligation, to dispose of the Pledge in accordance with the provisions of this Agreement.4.质权凭证的保管Custody of Records for Equity Interest subject to Pledge4.1在本协议规定的质押期限内，出质人应将其在丙方的股权出资证明书及记载质权的股东名册交付质权人保管。出质人应在本协议签订之日起一周内将上述股权出资证明书及股东名册交付给质权人。质权人将在本协议规定的全部质押期间一直保管这些项目。During the Term of Pledge set forth in this Agreement, Pledgors shall deliver to Pledgee's custody the capital contribution certificate for the EquityInterest and the shareholders' register containing the Pledge within one week from the execution of this Agreement. Pledgee shall have custody of suchitems during the entire Term of Pledge set forth in this Agreement.4.2在质押期限内，股权所产生的红利应当无条件归质权人所有。Dividends generated by the Equity Interest shall be unconditionally owned by the Pledgee during the Term of Pledge.5秘密文件 Strictly Confidential5.出质人的声明和保证Representations and Warranties of Pledgors5.1出质人是股权唯一的合法所有人。Pledgors are the sole legal and beneficial owners of the Equity Interest.5.2质权人有权以本协议规定的方式处分并转让股权。Pledgee shall have the right to dispose of and transfer the Equity Interest in accordance with the provisions set forth in this Agreement.5.3除本质权之外，出质人未在股权上设置任何其他质押权利或其他担保权益。Except for the Pledge, Pledgors have not placed any security interest or other encumbrance on the Equity Interest.6.出质人的承诺和确认Covenants and Further Agreements of Pledgors6.1在本协议存续期间，所有出质人向质权人承诺，出质人将：All of the Pledgors hereby covenant to the Pledgee, that during the term of this Agreement, Pledgors shall:6.1.1除履行由出质人与质权人、丙方于本协议签署日签订的《独家购买权合同》外，未经质权人事先书面同意，不得转让股权，不得在股权上设立或允许存在任何担保或其他债务负担；not transfer the Equity Interest, place or permit the existence of any security interest or other encumbrance on the Equity Interest, without theprior written consent of Pledgee, except for the performance of the Exclusive Option Agreement executed by Pledgors, the Pledgee and Party Con the execution date of this Agreement;6秘密文件 Strictly Confidential6.1.2遵守并执行所有有关权利质押的法律、法规的规定，在收到有关主管机关就质权发出或制定的通知、指令或建议时，于五日内向质权人出示上述通知、指令或建议，同时遵守上述通知、指令或建议，或按照质权人的合理要求或经质权人同意就上述事宜提出反对意见和陈述；comply with the provisions of all laws and regulations applicable to the pledge of rights, and within 5 days of receipt of any notice, order orrecommendation issued or prepared by relevant competent authorities regarding the Pledge, shall present the aforementioned notice, order orrecommendation to Pledgee, and shall comply with the aforementioned notice, order or recommendation or submit objections andrepresentations with respect to the aforementioned matters upon Pledgee's reasonable request or upon consent of Pledgee;6.1.3将任何可能导致对出质人股权或其任何部分的权利产生影响的事件或收到的通知，以及可能改变出质人在本协议中的任何保证、义务或对出质人履行其在本协议中义务可能产生影响的任何事件或收到的通知及时通知质权人。promptly notify Pledgee of any event or notice received by Pledgors that may have an impact on Pledgee's rights to the Equity Interest or anyportion thereof, as well as any event or notice received by Pledgors that may have an impact on any guarantees and other obligations ofPledgors arising out of this Agreement.6.2出质人同意，质权人按本协议条款取得的对质权享有的权利，不应受到出质人或出质人的继承人或出质人之委托人或任何其他人通过法律程序的中断或妨害。Pledgors agree that the rights acquired by Pledgee in accordance with this Agreement with respect to the Pledge shall not be interrupted or harmed byPledgors or any heirs or representatives of Pledgors or any other persons through any legal proceedings.7秘密文件 Strictly Confidential6.3出质人向质权人保证，为保护或完善本协议对偿付业务合作协议项下被担保债务的担保，出质人将诚实签署、并促使其他与质权有利害关系的当事人签署质权人所要求的所有的权利证书、契约和/或履行并促使其他有利害关系的当事人履行质权人所要求的行为，并为本协议赋予质权人之权利、授权的行使提供便利，与质权人或其指定的人(自然人/法人)签署所有的有关股权所有权的文件，并在合理期间内向质权人提供其认为需要的所有的有关质权的通知、命令及决定。To protect or perfect the security interest granted by this Agreement for payment of all payment in pledge under the Business Cooperation Agreement,Pledgors hereby undertake to execute in good faith and to cause other parties who have an interest in the Pledge to execute all certificates, agreements,deeds and/or covenants required by Pledgee. Pledgors also undertake to perform and to cause other parties who have an interest in the Pledge toperform actions required by Pledgee, to facilitate the exercise by Pledgee of its rights and authority granted thereto by this Agreement, and to enter intoall relevant documents regarding ownership of Equity Interest with Pledgee or designee(s) of Pledgee (natural persons/legal persons). Pledgorsundertake to provide Pledgee within a reasonable time with all notices, orders and decisions regarding the Pledge that are required by Pledgee.6.4出质人向质权人保证，出质人将遵守、履行本协议项下所有的保证、承诺、协议、陈述及条件。如出质人不履行或不完全履行其保证、承诺、协议、陈述及条件，出质人应赔偿质权人由此遭受的一切损失。Pledgors hereby undertake to comply with and perform all guarantees, promises, agreements, representations and conditions under this Agreement. Inthe event of failure the whole or partial performance of its guarantees, promises, agreements, representations and conditions, Pledgors shall indemnifyPledgee for all losses resulting therefrom.8秘密文件 Strictly Confidential7.违约事件Event of Default7.1下列事项均被视为违约事件：The following circumstances shall be deemed Event of Default:7.1.1丙方未能按期、完整履行任何业务合作协议项下责任，包括但不限于丙方未能按期足额支付业务合作协议项下的应付的被担保债务或有违反该协议其他义务的行为；Party C fails to fully and timely fulfill any liabilities under the Business Cooperation Agreement, including without limitation failure to pay infull any of the all payment in pledge payable under the Business Cooperation Agreement or breaches any other obligations of Party Cthereunder;7.1.2出质人或丙方实质违反本协议的任何条款；Pledgors or Party C have committed a material breach of any provisions of this Agreement;7.1.3除本协议第6.1.1条的约定外，出质人舍弃出质的股权或未获得质权人书面同意而擅自转让或意图转让出质的股权；和Except as expressly stipulated in Section 6.1.1, Pledgors transfers or purports to transfer or abandons the Equity Interest pledged or assignsthe Equity Interest pledged without the written consent of Pledgee; and7.1.4丙方的继承人或代管人只能履行部分或拒绝履行业务合作协议项下的支付责任。The successor or custodian of Party C is capable of only partially perform or refuses to perform the payment obligations under the BusinessCooperation Agreement.9秘密文件 Strictly Confidential7.2如知道或发现本第7.1条所述的任何事项或可能导致上述事项的事件已经发生，出质人应立即以书面形式通知质权人。Upon notice or discovery of the occurrence of any circumstances or event that may lead to the aforementioned circumstances described in Section 7.1,Pledgors shall immediately notify Pledgee in writing accordingly.7.3除非第7.1部分下的违约事件在质权人向出质人发出要求其修补此违约行为通知后的二十（20）天之内已经按质权人要求获得救济，质权人在其后的任何时间，可向出质人发出书面违约通知，要求依据第8部分履行其处理股权的权利。Unless an Event of Default set forth in this Section 7.1 has been successfully resolved to Pledgee's satisfaction within twenty (20) days after the Pledgeedelivers a notice to the Pledgors requesting ratification of such Event of Default, Pledgee may issue a Notice of Default to Pledgors in writing at any timethereafter, demanding the Pledgors to immediately dispose of the Pledge in accordance with the provisions of Article 8 of this Agreement.8.质权的行使Exercise of Pledge8.1在被担保债务被全部清偿或履行前，未经质权人书面同意，出质人不得转让本质权和其拥有的丙方股权。Prior to the full payment of all payments in pledge, without the Pledgee's written consent, Pledgors shall not assign the Pledge or the Equity Interest inParty C.8.2在质权人行使其质押权利时，质权人可以向出质人发出书面违约通知。Pledgee may issue a Notice of Default to Pledgors when exercising the Pledge.10秘密文件 Strictly Confidential8.3在质权人行使其质押权利时，根据中国有关法律的规定，质权人有权按照法定程序处置质押股权。仅在中国法律允许的范围内，对于处置的所得，质权人无需给付出质人；除非中国法律另有规定，出质人特此放弃其可能有的能向质权人要求任何质押股权处置所得的权利；同样，出质人对质权人在该质押股权处置后的亏损也不承担任何义务。When the Pledgor exercises the pledge right, Pledgee is entitled to dispose of the Equity Interest pledged in accordance with applicable PRC laws. Onlyto the extent permitted under applicable PRC laws, Pledgee has no obligation to account to Pledgors for proceeds of disposition of the Equity Interest.Unless otherwise required by PRC laws, Pledgors hereby waive any rights it may have to demand any such accounting from Pledgee; Likewise, in suchcircumstance Pledgors shall have no obligation to Pledgee for any deficiency remaining after such disposition of the Equity Interest pledged.8.4质权人依照本协议处分质权时，出质人和丙方应予以必要的协助，以使质权人实现其质权。When Pledgee disposes of the Pledge in accordance with this Agreement, Pledgors and Party C shall provide necessary assistance to enable Pledgee toenforce the Pledge in accordance with this Agreement.9.转让Assignment9.1除非经质权人事先同意，出质人无权赠予或转让其在本协议项下的权利义务。Without Pledgee's prior written consent, Pledgors shall not have the right to assign or delegate its rights and obligations under this Agreement.11秘密文件 Strictly Confidential9.2本协议对出质人及其继任人和经许可的受让人均有约束力，并且对质权人及每一继任人和受让人有效。This Agreement shall be binding on Pledgors and their successors and permitted assigns, and shall be valid with respect to Pledgee and each of itssuccessors and assigns.9.3经出质人同意，质权人可以在任何时候将其在业务合作协议项下的所有或任何权利和义务转让给其指定的关联方（自然人/法人），在这种情况下，受让人应享有和承担本协议项下质权人享有和承担的权利和义务，如同其作为原协议方应享有和承担的一样。质权人转让业务合作协议项下的权利和义务时，应质权人要求，出质人应就此转让签署有关协议和/或文件。Upon the Pledgors’ agreement, Pledgee may assign any or all of its rights and obligations under the Business Cooperation Agreement to its designee(s)(natural/legal persons) at any time, in which case the assigns shall have the rights and obligations of Pledgee under this Agreement, as if it were theoriginal party to this Agreement. When the Pledgee assigns the rights and obligations under the Business Cooperation Agreement, upon Pledgee'srequest, Pledgors shall execute relevant agreements or other documents relating to such assignment.9.4因转让所导致的质权人变更后，应质权人要求，出质人应与新的质权人签订一份内容与本协议一致的新质押协议，并在相应的工商行政管理机关进行登记。In the event of a change in Pledgee due to an assignment, Pledgors shall, at the request of Pledgee, execute a new pledge agreement with the newpledgee on the same terms and conditions as this Agreement, and register the same with the relevant AIC.12秘密文件 Strictly Confidential9.5出质人应严格遵守本协议和各方单独或共同签署的其他有关协议的规定，包括独家购买权合同和对质权人的授权委托书，履行各协议项下的义务，并不进行任何足以影响协议的有效性和可强制执行性的作为/不作为。除非根据质权人的书面指示，出质人不得行使其对质押股权还留存的权利。Pledgors shall strictly abide by the provisions of this Agreement and other contracts jointly or separately executed by the Parties hereto or any of them,including the Exclusive Option Agreement and the Power of Attorney granted to Pledgee, perform the obligations hereunder and thereunder, and refrainfrom any action/omission that may affect the effectiveness and enforceability thereof. Any remaining rights of Pledgors with respect to the EquityInterest pledged hereunder shall not be exercised by Pledgors except in accordance with the written instructions of Pledgee.10.终止Termination在被担保债务被全部清偿或履行完毕之后，本质权人应在尽早合理可行的时间内办理或配合办理解除质押的手续，出质人与丙方应提供相应的配合与协助。Upon the full payment of all payments in pledge under the Business Cooperation Agreement a, Pledgor shall then, with the assistance of Party B and Party C,go through the procedures of cancellation of pledge rights at a reasonable time as soon as practicable.11.手续费及其他费用Handling Fees and Other Expenses一切与本协议有关的费用及实际开支，其中包括但不限于法律费用、工本费、印花税以及任何其他税收、费用等全部由丙方承担。All fees and out of pocket expenses relating to this Agreement, including but not limited to legal costs, costs of production, stamp tax and any other taxes andfees, shall be borne by Party C.13秘密文件 Strictly Confidential12.保密责任Confidentiality各方承认及确定有关本协议、本协议内容，以及彼此就准备或履行本协议而交换的任何口头或书面资料均被视为保密信息。各方应当对所有该等保密信息予以保密，而在未得到另一方书面同意前，不得向任何第三者披露任何保密信息，惟下列信息除外：(a)公众人士知悉或将会知悉的任何信息（惟并非由接受保密信息之一方擅自向公众披露）；(b)根据适用法律法规、股票交易规则、或政府部门或法院的命令而所需披露之任何信息；或(c)由任何一方就本协议所述交易而需向其股东、投资者、法律或财务顾问披露之信息，而该股东、法律或财务顾问亦需遵守与本条款相类似之保密责任。如任何一方工作人员或聘请机构的泄密均视为该方的泄密，需依本协议承担违约责任。无论本协议以任何理由终止，本条款仍然生效。The Parties acknowledge that the existence and the terms of this Agreement and any oral or written information exchanged between the Parties in connectionwith the preparation and performance this Agreement are regarded as confidential information. Each Party shall maintain confidentiality of all such confidentialinformation, and without obtaining the written consent of the other Party, it shall not disclose any relevant confidential information to any third parties, exceptfor the information that: (a) is or will be in the public domain (other than through the receiving Party’s unauthorized disclosure); (b) is under the obligation tobe disclosed pursuant to the applicable laws or regulations, rules of any stock exchange, or orders of the court or other government authorities; or (c) isrequired to be disclosed by any Party to its shareholders, investors, legal counsels or financial advisors regarding the transaction contemplated hereunder,provided that such shareholders, investors, legal counsels or financial advisors shall be bound by the confidentiality obligations similar to those set forth inthis Section. Disclosure of any confidential information by the staff members or agencies hired by any Party shall be deemed disclosure of such confidentialinformation by such Party, which Party shall be held liable for breach of this Agreement. This Section shall survive the termination of this Agreement for anyreason.14秘密文件 Strictly Confidential13.适用法律和争议的解决Governing Law and Resolution of Disputes13.1本协议的订立、效力、解释、履行、修改和终止以及争议的解决均适用中国法律。The execution, effectiveness, construction, performance, amendment and termination of this Agreement and the resolution of disputes hereunder shallbe governed by the laws of China.13.2因解释和履行本协议而发生的任何争议，本协议各方应首先通过友好协商的方式加以解决。如果在一方向其他方发出要求协商解决的书面通知后30天之内争议仍然得不到解决，则任何一方均可将有关争议提交给中国国际经济贸易仲裁委员会，由该会按照其仲裁规则仲裁解决。仲裁应在北京进行，使用之语言为中文。仲裁裁决是终局性的，对各方均有约束力。In the event of any dispute with respect to the construction and performance of this Agreement, the Parties shall first resolve the dispute throughfriendly negotiations. In the event the Parties fail to reach an agreement on the dispute within 30 days after either Party's request to the other Parties forresolution of the dispute through negotiations, either Party may submit the relevant dispute to the China International Economic and Trade ArbitrationCommission for arbitration, in accordance with its Arbitration Rules. The arbitration shall be conducted in Beijing, and the language used in arbitrationshall be Chinese. The arbitration award shall be final and binding on all Parties.13.3因解释和履行本协议而发生任何争议或任何争议正在进行仲裁时，除争议的事项外，本协议各方仍应继续行使各自在本协议项下的其他权利并履行各自在本协议项下的其他义务。Upon the occurrence of any disputes arising from the construction and performance of this Agreement or during the pending arbitration of any dispute,except for the matters under dispute, the Parties to this Agreement shall continue to exercise their respective rights under this Agreement and performtheir respective obligations under this Agreement.15秘密文件 Strictly Confidential14.通知Notices14.1本协议项下要求或发出的所有通知和其他通信应通过专人递送、挂号邮寄、邮资预付或商业快递服务或传真的方式发到该方下列地址。每一通知还应再以电子邮件送达。该等通知视为有效送达的日期按如下方式确定：All notices and other communications required or permitted to be given pursuant to this Agreement shall be delivered personally or sent by registeredmail, postage prepaid, by a commercial courier service or by facsimile transmission to the address of such party set forth below. A confirmation copy ofeach notice shall also be sent by Email. The dates on which notices shall be deemed to have been effectively given shall be determined as follows:14.1.1通知如果是以专人递送、快递服务或挂号邮寄、邮资预付发出的，则以于设定为通知的地址在接收或拒收之日为有效送达日。Notices given by personal delivery, by courier service or by registered mail, postage prepaid, shall be deemed effectively given on the date ofreceipt or refusal at the address specified for notices.14.1.2通知如果是以传真发出的，则以成功传送之日为有效送达日（应以自动生成的传送确认信息为证）。Notices given by facsimile transmission shall be deemed effectively given on the date of successful transmission (as evidenced by anautomatically generated confirmation of transmission).16秘密文件 Strictly Confidential14.2为通知的目的，各方地址如下：For the purpose of notices, the addresses of the Parties are as follows:甲方：中传天下信息科技（深圳）有限公司Party A: Zhongchuan Tianxia Information Technology (Shenzhen) Co., Ltd.地址：深圳市南山区高新中三道2号深圳软件园一期五栋401AAddress: 401A, Building 5, Phase 1, Shenzhen Software Park, No.2 Gaoxin Zhongsan Road, Nanshan District, Shenzhen.收件人：洪婷Attn: Hong Ting乙方：Party B:a)宋雪松Song Xuesong地址：125.Expenses, including legal fees, incurred by a director in defending any legal, administrative or investigative proceedings may be paid by the Company inadvance of the final disposition of such proceedings upon receipt of an undertaking by or on behalf of the director to repay the amount if it shall ultimatelybe determined that the director is not entitled to be indemnified by the Company in accordance with these Articles.126.Expenses, including legal fees, incurred by a former director in defending any legal, administrative or investigative proceedings may be paid by theCompany in advance of the final disposition of such proceedings upon receipt of an undertaking by or on behalf of the former director to repay the amountif it shall ultimately be determined that the director is not entitled to be indemnified by the Company in accordance with these Articles.127.The indemnification and advancement of expenses provided by, or granted pursuant to, these Articles is not exclusive of any other rights to which theperson seeking indemnification of advancement of expenses may be entitled under any agreement, resolution of members, resolution of disinteresteddirectors or otherwise, both as to acting in the person’s official capacity and as to acting in another capacity while serving as a director of the Company.128.If a person to be indemnified has been successful in defence of any proceedings referred to above the person is entitled to be indemnified against allexpenses, including legal fees, and against all judgments, fines and amounts paid in settlement and reasonably incurred by the person in connection withthe proceedings.129.The Company may purchase and maintain insurance in relation to any person who is or was a director, an officer or a liquidator of the Company, or who atthe request of the Company is or was serving as a director, an officer or a liquidator of, or in any other capacity is or was acting for, another body corporateor a partnership, joint venture, trust or other enterprise, against any liability asserted against the person and incurred by the person in that capacity,whether or not the Company has or would have had the power to indemnify the person against the liability as provided in these Articles.SEAL130.The Company shall have a Seal and may have more than one Seal. References herein to the Seal shall be references to every Seal which shall have beenduly adopted by resolution of directors. The directors shall provide for the safe custody of the Seal and for an imprint thereof to be kept at the office of theregistered agent of the Company. Except as otherwise expressly provided herein, the Seal when affixed to any written instrument, shall be witnessed andattested to by the signature of a director or any other person so authorized from time to time by resolution of directors. Such authorization may be before orafter the Seal is affixed, may be general or specific and may refer to any number of sealings. The Directors may provide for a facsimile of the Seal and of thesignature of any director or authorized person which may be reproduced by printing or other means on any instrument and it shall have the same force andvalidity as if the Seal had been affixed to such instrument and the same had been signed as hereinbefore described.21DISTRIBUTIONS131.The directors of the Company may by resolution authorise a distribution by the Company at any time and of any amount and to any members they think fitif they are satisfied on reasonable grounds that immediately after the distribution;a.the value of the Company’s assets will exceed its liabilities, andb.the Company will be able to pay its debts as they fall due.132.A resolution of the directors passed under the preceding Article shall contain a statement that, in the opinion of the directors, immediately after thedistribution the value of the Company’s assets will exceed its liabilities, and the Company will be able to pay its debts as they fall due.133.If, after a distribution is authorised and before it is made, the directors cease to be satisfied on reasonable grounds that the Company will, immediately afterthe distribution satisfy the solvency test, any distribution made by the Company is deemed not to have been authorised.134.If, by virtue of the preceding Article, a distribution is deemed not to have been authorised, a director who;a.ceased, after authorisation but before the making of the distribution, to be satisfied on reasonable grounds for believing that the company wouldsatisfy the solvency test immediately after the distribution is made; andb.failed to take reasonable steps to prevent the distribution being made;is personally liable to the company to repay to the company so much of the distribution as is not able to be recovered from members.135.A distribution made to a member at a time when the company did not, immediately after the distribution, satisfy the solvency test may be recovered by thecompany from the member unless;a.the member received the distribution in good faith and without knowledge of the company’s failure to satisfy the solvency test;b.the member has altered his position in reliance on the validity of the distribution; andc.it would be unfair to require repayment in full or at all.DISTRIBUTIONS BY WAY OF DIVIDEND136.The Company may by a resolution of directors declare a distribution by way of dividend and pay such distribution in money, shares or other property. Inthe event that distributions by way of dividend are paid in specie the directors shall have responsibility for establishing and recording in the resolution ofdirectors authorizing the distribution by way of dividend, a fair and proper value for the assets to be so distributed.137.The directors may from time to time pay to the members such interim distributions by way of dividend as appear to the directors to be justified by theprofits of the Company.138.The directors may, before declaring any distribution by way of dividend, set aside out of the profits of the Company such sum as they think proper as areserve fund, and may invest the sum so set aside as a reserve fund upon such securities as they may select.139.Notice of any distribution by way of dividend that may have been declared shall be given to each member in the manner hereinafter mentioned and alldistributions by way of dividend unclaimed for 3 years after having been declared may be forfeited by resolution of directors for the benefit of theCompany.140.No distribution by way of dividend shall bear interest as against the Company and no distribution by way of dividend shall be paid on treasury shares orshares held by another company of which the Company holds, directly or indirectly, shares having more than 50 percent of the vote in electing directors.22141.A share issued as a distribution by way of dividend by the Company shall be treated for all purposes as having been issued for money equal to the valuedetermined by resolution of the directors. In the absence of fraud the decision of the directors as to the value of the share is conclusive unless a questionof law is involved.142.A division of the issued and outstanding shares of a class or series of shares into a larger number of shares of the same class or series having aproportionately smaller par value does not constitute a distribution by way of dividend of shares.ACCOUNTS AND AUDIT143.The Company may by resolution of members call for the directors to prepare periodically a profit and loss account and a balance sheet. The profit and lossaccount and balance sheet shall be drawn up so as to give respectively a true and fair view of the profit and loss of the Company for the financial periodand a true and fair view of the state of affairs of the Company as at the end of the financial period.144.The Company may by resolution of members call for the accounts to be examined by auditors.145.Subject to the rules of the Designated Stock Exchange, the first auditors shall be appointed by resolution of directors; subsequent auditors shall beappointed by the Audit Committee and shall hold office until the Audit Committee appoint another independent auditor.146.Subject to the rules of the Designated Stock Exchange, the remuneration of the auditors of the Company shall be fixed by the Audit Committee.147.The auditors shall examine each profit and loss account and balance sheet required to be served on every member of the Company or laid before a meetingof the members of the Company and shall state in a written report whether or nota.in their opinion the profit and loss account and balance sheet give a true and fair view respectively of the profit and loss for the period covered bythe accounts, and of the state of affairs of the Company at the end of that period; andb.all the information and explanations required by the auditors have been obtained.148.The report of the auditors shall be annexed to the accounts and shall be read at the meeting of members at which the accounts are laid before the Companyor shall be served on the members.149.Every auditor of the Company shall have a right of access at all times to the books of account and vouchers of the Company, and shall be entitled to requirefrom the directors and officers of the Company such information and explanations as he thinks necessary for the performance of the duties of the auditors.150.The auditors of the Company shall be entitled to receive notice of, and to attend any meetings of members of the Company at which the Company’s profitand loss account and balance sheet are to be presented.NOTICES151.Any notice, information or written statement to be given by the Company to members may be served in any way by which it can reasonably be expected toreach each member or by mail addressed to each member at the address shown in the share register.152.Any summons, notice, order, document, process, information or written statement to be served on the Company may be served by leaving it, or by sendingit by registered mail addressed to the Company, at its registered office, or by leaving it with, or by sending it by registered mail to, the registered agent ofthe Company.153.Service of any summons, notice, order, document, process, information or written statement to be served on the Company may be proved by showing thatthe summons, notice, order, document, process, information or written statement was delivered to the registered office or the registered agent of theCompany or that it was mailed in such time as to admit to its being delivered to the registered office or the registered agent of the Company in the normalcourse of delivery within the period prescribed for service and was correctly addressed and the postage was prepaid.23PENSION AND SUPERANNUATION FUNDS154.The directors may establish and maintain or procure the establishment and maintenance of any noncontributory or contributory pension orsuperannuation funds for the benefit of, and give or procure the giving of donations, gratuities, pensions, allowances or emoluments to, any persons whoare or were at any time in the employment or service of the Company or any company which is a subsidiary of the Company or is allied to or associated withthe Company or with any such subsidiary, or who are or were at any time directors or officers of the Company or of any such other company as aforesaid orwho hold or held any salaried employment or office in the Company or such other company, or any persons in whose welfare the Company or any suchother company as aforesaid is or has been at any time interested, and to the wives, widows, families and dependents of any such person, and may makepayments for or towards the insurance of any such persons as aforesaid, and may do any of the matters aforesaid either alone or in conjunction with anysuch other company as aforesaid. Subject always to the proposal being approved by resolution of members, a director holding any such employment oroffice shall be entitled to participate in and retain for his own benefit any such donation, gratuity, pension allowance or emolument.VOLUNTARY WINDING UP AND DISSOLUTION155.The Company may voluntarily commence to wind up and dissolve by a resolution of members but if the Company has never issued shares it mayvoluntarily commence to wind up and dissolve by resolution of directors.CONTINUATION156.The Company may by resolution of members or by a resolution passed unanimously by all directors of the Company continue as a company incorporatedunder the laws of a jurisdiction outside the British Virgin Islands in the manner provided under those laws.ARBITRATION157.Whenever any difference arises between the Company on the one hand and any of the members or their executors, administrators or assigns on the otherhand, touching the true intent and construction or the incidence or consequences of these Articles or of the Act, touching anything done or executed,omitted or suffered in pursuance of the Act or touching any breach or alleged breach or otherwise relating to the premises or to these Articles, or to anyAct or Ordinance affecting the Company or to any of the affairs of the Company such difference shall, unless the parties agree to refer the same to a singlearbitrator, be referred to 2 arbitrators one to be chosen by each of the parties to the difference and the arbitrators shall before entering on the referenceappoint an umpire.158.If either party to the reference makes default in appointing an arbitrator either originally or by way of substitution (in the event that an appointed arbitratorshall die, be incapable of acting or refuse to act) for 10 days after the other party has given him notice to appoint the same, such other party may appoint anarbitrator to act in the place of the arbitrator of the defaulting party.We, Portcullis TrustNet (BVI) Limited of Portcullis TrustNet Chambers, P.O. Box 3444, Road Town, Tortola, British Virgin Islands for the purpose of incorporating aBVI Business Company under the laws of the British Virgin Islands hereby sign these Articles of Association the 27th day of October, 2009.Incorporator/s/ Nicole WheatleyPortcullis TrustNet (BVI) LimitedPortcullis TrustNet ChambersP.O. Box 3444Road Town, TortolaBritish Virgin Islands(Sgd. Nicole Wheatley)24EX4.15 3 f20f2017ex415_luokung.htm EXCLUSIVE BUSINESS COOPERATION AGREEMENT BY AND BETWEEN ZHONGCHUAN TIANXIA INFORMATIONTECHNOLOGY (SHENZHEN) CO., LTD., AND BEIJING MOBILE VISION TECHNOLOGY CO., LTD., DATED AUGUST 31, 2015Exhibit 4.15独家业务合作协议Exclusive Business Cooperation Agreement本独家业务合作协议（下称“本协议”）由以下双方于年月日在中华人民共和国（下称“中国”）北京市签署。This Exclusive Business Cooperation Agreement (this “Agreement”) is made and entered into by and between the following parties on in Beijing, thePeople’s Republic of China (“China” or the “PRC”).甲方：中传天下信息科技（深圳）有限公司Party A: Zhongchuan Tianxia Information Technology (Shenzhen) Co., Ltd.地址：深圳市南山区高新中三道2号深圳软件园一期五栋401A Address: 401A, Building 5, Phase 1, Shenzhen Software Park, No.2 Gaoxin Zhongsan Road, Nanshan District, Shenzhen统一社会信用代码：91440300565701058R Uniform Social Credit Code: 91440300565701058R乙方：北京中传视讯科技有限公司Party B: Beijing Mobile Vision Technology Co., Ltd.地址：北京市朝阳区光华路9号SOHO3QLAB32Address: LAB32, SOHO3Q, No 9, Guanghua Road, Chaoyang District, Beijing统一社会信用代码：9111010576215249XMUniform Social Credit Code: 9111010576215249XM甲方和乙方以下各称为“一方”，统称为“双方”。Each of Party A and Party B shall be hereinafter referred to as a “Party” respectively, and as “Parties” collectively.1秘密文件Strictly Confidential鉴于：Whereas,1.甲方是一家在中国注册的外商独资企业，拥有丰富的技术研发和产业化推广相关的管理和投资经验，并提供相关的技术支持和咨询服务；Party A is a whollyforeignowned enterprise established in China, which has rich experience in technology research development and industrializationpromotion management and investment, and provides relevant technical support and consulting services;2.乙方是一家在中国成立的有限责任公司，经中国有关政府部门批准依法主要从事手机视频技术开发、内容制作及市场推广；Party B is a limited company in China, mainly engages in mobile video technology research, development, content creation, sale and related industrialpromotion as approved by the relevant governmental authorities in China;3.甲方同意利用其技术、人员和信息优势，在本协议期间向乙方提供有关手机视频技术开发、内容制作及市场推广以及未来扩大业务规模和业务范围时乙方所需的技术支持、技术咨询等相关服务，乙方同意接受甲方或其指定方按本协议条款的规定提供的各种服务。Party A is willing to provide Party B with technology supports and technology consulting services in connection with mobile video technology research,development, content creation, sale and related industrial promotion and such services in connection with Party B’s extension of business scale orbroadening of businesses during the term of this Agreement, utilizing its advantages in technology, human resources, and information, and Party B iswilling to accept such services provided by Party A or Party A's designee(s), each on the terms set forth herein.2秘密文件Strictly Confidential据此，甲方和乙方经协商一致，达成如下协议：Now, therefore, through mutual discussion, the Parties have reached the following agreements:1.服务提供Services Provided by Party A1.1按照本协议条款和条件，乙方在此委任甲方在本协议期间作为乙方的独家服务提供者向乙方提供全面的和手机视频技术开发、内容制作及市场推广相关以及未来扩大业务规模和业务范围时乙方所需的技术支持、业务支持和相关咨询服务，具体内容包括但不限于以下内容：Party B hereby appoints Party A as Party B's exclusive services provider to provide Party B with complete technical support, business supportand related consulting services in connection with mobile video technology research, development, content creation, sale and related industrialpromotion and such services in connection with Party B’s extension of business scale or broadening of businesses during the term of thisAgreement, in accordance with the terms and conditions of this Agreement, which may include but not limited to:1.1.1为乙方提供其手机视频技术开发、内容制作及市场推广业务所需的一切服务支持，为乙方提供相当于包括总经理、行政人员、管理人员、筹划部门、商业运营、人力资源、财务、会计以及与乙方业务相关的一切业务操作所需人员所能提供的服务内容；managing all aspects of Party B’s business of mobile video technology research, development, content creation, sale and relatedindustrial promotion. In this capacity, Party A will procure or engage for Party B the services of a general manager and other managementstaff, including but not limited to personnel responsible for all administration, operations, planning, business development, humanresources, finance, accounting and other operations related to the Business of Party B;3秘密文件Strictly Confidential1.1.2为乙方制定全部的商业计划、销售目标，并为优化执行该等商业计划设计和建立相应的系统及操作程序；developing all business plans and sales projections of Party B, and for developing and establishing systems and procedures for optimumexecution of the business plans;1.1.3为乙方申请手机视频技术及内容制作相关专利提供咨询服务和支持；consulting services and support in connection with Party B’s applying for mobile video technology related patents and content creation;1.1.4为乙方手机视频技术产业化的发展方向、规模、品牌提升提供咨询服务；consulting services in connection with the development directions, size and business brands promotion of Party B’s mobile videotechnology industrialization;4秘密文件Strictly Confidential1.1.5为乙方提供与业务相关的办公、生产和销售服务，为乙方租赁场所，建立业务相关的系统和程序，满足乙方的其他要求；procuring or obtaining for Party B all office, production and distribution services related to the Business. It shall procure or obtainappropriate leases, establish systems and procedures needed to operate the business, fulfill orders for services;1.1.6尽最大努力为乙方建立手机视频技术销售市场，根据甲方为乙方制定的商业计划及销售目标代表乙方获取客户订单，同时为乙方提供与业务相关的客户服务，建立向客户开具票据的程序和与会计相关的托收服务。using its best efforts to establish mobile video technology related marketing and other structures to obtain orders for services &products from customers on behalf of Party B in accordance with Party B’s business plans, sales projections and objectives (asdeveloped by Party A) and procure or obtain customer services required in connection with the Business. It shall also establishprocedures for invoicing customers, and establish collection services with respect to accounts;1.1.7就乙方的劳动用工方面提供咨询服务和支持，包括但不限于，组织实施对乙方业务人员、行政人员、管理人员等人员进行培训和考核，协助建立健全的人力资源管理制度和实现人力资源的良好配置；consulting services and support regarding labor system of Party B, including but without limitation to labor training and evaluation ofsales person, administrative staff and management person etc. and establishment of human resources management system to well;5秘密文件Strictly Confidential1.1.8提供乙方需要的客户数据统计、分析及相关数据库的建设和维护等咨询服务；providing Party B with compile and analysis of client data and consulting services of establishment and maintenance of data base;1.1.9提供乙方需要的软件和相关技术支持服务；providing software Party B requires and other technical support;1.1.10接受乙方委托，对乙方的手机视频技术研发和产业化推广业务经营进行指导和管理；guiding and management on Party B’s business of mobile video technology research and development and related industrial promotionoperation according to Party B’s commission;1.1.11当乙方业务规模发展或业务范围扩大需要时，购买乙方业务经营需要的设备；in the event of the demand of Party B’s development of business scale or broadening of businesses, purchase the equipments which itneeds for the operation of its business;1.1.12当乙方业务规模发展或业务范围扩大需要时，完成乙方项目中的全部或部分工作；in the event of the demand of Party B’s development of business scale or broadening of businesses, complete the work of Party B’sproject in whole or in party;6秘密文件Strictly Confidential1.1.13当乙方业务规模发展或业务范围扩大需要时，开发新技术；in the event of the demand of Party B’s development of business scale or broadening of businesses, develop new technology;1.1.14乙方委托甲方，且甲方接受委托提供的其他服务。other services Party B appoints Party A to provide and Party A agrees to provide.1.2乙方接受甲方的咨询和服务。乙方进一步同意，除非经甲方事先书面同意，在本协议期间，就本协议约定的服务或其他事宜，乙方不得直接或间接地从任何第三方获得任何与本协议相同或类似的咨询和/或服务，并不得与任何第三方就本协议所述事项建立任何类似的合作关系。双方同意，甲方可以指定其他方（该被指定方可以与乙方签署本协议第1.3条描述的某些协议）为乙方提供本协议约定的服务和/或支持。Party B agrees to accept all the consultations and services provided by Party A. Party B further agrees that unless with Party A's prior writtenconsent, during the term of this Agreement, Party B shall not directly or indirectly accept the same or any similar consultations and/or servicesprovided by any third party and shall not establish similar corporation relationship with any third party regarding the matters contemplated by thisAgreement. Party A may appoint other parties, who may enter into certain agreements described in Section 1.3 with Party B, to provide Party Bwith the consultations and/or services under this Agreement.7秘密文件Strictly Confidential1.3服务的提供方式Service Providing Methodology1.3.1双方同意在本协议有效期内，视情况而定，乙方可以与甲方或甲方指定的其他方进一步签订技术服务协议和/或咨询服务协议，对各项业务培训、技术服务、咨询服务的具体内容、方式、人员、收费等进行约定。Parties agree that during the term of this Agreement, where necessary, Party B may enter into further technical service agreements and/orconsulting service agreements with Party A or any other party designated by Party A, which shall provide the specific contents, manner,personnel, and fees for the specific technical services and consulting services.1.3.2为更好地履行本协议，双方同意，在甲方认为必要时，乙方应在本协议有效期内与甲方或甲方指定的其他方根据业务进展需要随时签署协议，由甲方或其指定方向乙方提供服务。To fulfill this Agreement, Parties agree that during the term of this Agreement, where Party A deems necessary, Party B shall enter intoagreements with Party A or any other party designated by Party A which shall set forth that Party A or any other party designated byParty A provide services to Party B based on the needs of the business of Party B.8秘密文件Strictly Confidential2.服务的价格和支付方式The Calculation and Payment of the Service Fees双方同意，就甲方提供的服务，乙方应向甲方支付服务费（“服务费”）。服务费不应低于乙方税后利润的80%。服务费应当按季支付；经甲方事先书面同意，服务费可以根据乙方的经营需要进行调整。Both Parties agree that, in consideration of the services provided by Party A, Party B shall pay Party A fees (the “Service Fees”), which shall not be lessthan 80% of Party B’s aftertax profits . The Service Fees shall be due and payable on a quarterly basis; upon the prior written consent by Party A, the rateof Service Fees may be adjusted pursuant to the operational needs of Party B.3.知识产权和保密条款Intellectual Property Rights and Confidentiality Clauses3.1在中国法律允许的范围内，甲方对履行本协议而产生或创造的任何权利、所有权、权益和所有知识产权包括但不限于著作权、专利权、专利申请权、软件、技术秘密、商业机密及其他均享有独占的和排他的权利和利益。乙方须签署所有适当的文件，采取所有适当的行动，递交所有的文件和/或申请，提供所有适当的协助，以及做出所有其他依据甲方的自行决定认为是必要的行为，以将任何对该等知识产权的所有权、权利和权益赋予甲方，和/或完善对甲方此等知识产权权利的保护。To the extent permitted under the PRC laws, Party A shall have exclusive and proprietary rights and interests in all rights, ownership, interests andintellectual properties arising out of or created during the performance of this Agreement, including but not limited to copyrights, patents, patentapplications, software, technical secrets, trade secrets and others. Party B shall execute all appropriate documents, take all appropriate actions,submit all filings and/or applications, render all appropriate assistance and otherwise conduct whatever is necessary deemed as by Party A in itssole discretion for the purposes of vesting any ownership, right or interest of any such intellectual property rights in Party A, and/or perfectingthe protections for any such intellectual property rights in Party A.9秘密文件Strictly Confidential3.2双方承认及确定有关本协议、本协议内容，以及彼此就准备或履行本协议而交换的任何口头或书面资料均被视为保密信息。双方应当对所有该等保密信息予以保密，而在未得到另一方书面同意前，不得向任何第三者披露任何保密信息，惟下列信息除外：(a)公众人士知悉或将会知悉的任何信息（惟并非由接受保密信息之一方擅自向公众披露）；(b)根据适用法律法规、股票交易规则、或政府部门或法院的命令而所需披露之任何信息；或(c)由任何一方就本协议所述交易而需向其股东、投资者、法律或财务顾问披露之信息，而该股东、法律或财务顾问亦需遵守与本条款相类似之保密责任。如任何一方工作人员或聘请机构的泄密均视为该方的泄密，需依本协议承担违约责任。无论本协议以任何理由终止，本条款仍然生效。The Parties acknowledge that the existence and the terms of this Agreement and any oral or written information exchanged between the Parties inconnection with the preparation and performance this Agreement are regarded as confidential information. Each Party shall maintainconfidentiality of all such confidential information, and without obtaining the written consent of the other Party, it shall not disclose any relevantconfidential information to any third parties, except for the information that: (a) is or will be in the public domain (other than through the receivingParty’s unauthorized disclosure); (b) is under the obligation to be disclosed pursuant to the applicable laws or regulations, rules of any stockexchange, or orders of the court or other government authorities; or (c) is required to be disclosed by any Party to its shareholders, investors,legal counsels or financial advisors regarding the transaction contemplated hereunder, provided that such shareholders, investors, legal counselsor financial advisors shall be bound by the confidentiality obligations similar to those set forth in this Section. Disclosure of any confidentialinformation by the staff members or agencies hired by any Party shall be deemed disclosure of such confidential information by such Party, whichParty shall be held liable for breach of this Agreement. This Section shall survive the termination of this Agreement for any reason.3.3双方同意，不论本协议是否变更、解除或终止，本条款将持续有效。The Parties agree that this Section shall survive changes to, and rescission or termination of, this Agreement.4.陈述和保证Representations and Warranties4.1甲方陈述和保证如下：Party A hereby represents and warrants as follows:4.1.1甲方是按照中国法律合法注册并有效存续的外商独资企业。Party A is a whollyforeignowned enterprise legally registered and validly existing in accordance with the laws of China.10秘密文件Strictly Confidential4.1.2甲方已采取必要的公司行为，获得必要的授权，并取得第三方和政府部门的同意及批准（若需）以签署和履行本协议；甲方对本协议的签署和履行并不违反法律法规的明确规定。Party A has taken all necessary corporate actions, obtained all necessary authorization and the consent and approval from third partiesand government agencies (if any) for the execution and performance of this Agreement. Party A’s execution and performance of thisAgreement do not violate any explicit requirements under any law or regulation binding on Party A.4.1.3本协议构成对其合法、有效、有约束力并依本协议之条款对其强制执行的义务。This Agreement constitutes Party A's legal, valid and binding obligations, enforceable in accordance with its terms.4.2乙方陈述和保证如下：Party B hereby represents and warrants as follows:4.2.1乙方是按照中国法律合法登记且有效存续的有限责任公司，乙方根据政府部门的批准和许可从事手机视频技术开发、内容制作和产业化市场推广的经营。Party B is a limited company legally registered and validly existing in accordance with the laws of China, engages in mobile videotechnology research, development, content creation, sale and related industrial promotion pursuant to governmental approvals andpermits;11秘密文件Strictly Confidential4.2.2乙方已采取必要的行为，获得必要的授权，并取得第三方和政府部门的同意及批准（若需）以签署和履行本协议；乙方对本协议的签署和履行并不违反法律法规的明确规定。Party B has taken all necessary actions, obtained all necessary authorization and the consent and approval from third parties andgovernment agencies (if any) for the execution and performance of this Agreement. Party B’s execution and performance of thisAgreement do not violate any explicit requirements under any law or regulation binding on Party B.4.2.3本协议构成对其合法、有效、有约束力并依本协议之条款对其强制执行的义务。This Agreement constitutes Party B's legal, valid and binding obligations, and shall be enforceable against it.5.生效和有效期Effectiveness and Term5.1本协议于文首标明的协议日期签署并同时生效。除非依本协议或双方其他协议的约定而提前终止，本协议有效期为20年，但甲、乙双方应自本协议签署后，每3个月对本协议的内容做一次审查，以决定是否需要根据当时的情况对本协议作出相应修改和补充。This Agreement is executed on the date first above written and shall take effect as of such date. Unless earlier terminated in accordance with theprovisions of this Agreement or relevant agreements separately executed between the Parties, the term of this Agreement shall be 20 years. Afterthe execution of this Agreement, both Parties shall review this Agreement every 3 months to determine whether to amend or supplement theprovisions in this Agreement based on the actual circumstances at that time.12秘密文件Strictly Confidential5.2协议期满前，经甲方书面确认，本协议可以延期。延期的期限由甲方决定，乙方必须无条件地同意该延期。The term of this Agreement may be extended if confirmed in writing by Party A prior to the expiration thereof. The extended term shall bedetermined by Party A, and Party B shall accept such extended term unconditionally.6.终止Termination6.1除非依据本协议续期，本协议于到期之日终止。Unless renewed in accordance with the relevant terms of this Agreement, this Agreement shall be terminated upon the date of expiration hereof.6.2本协议有效期内，除非甲方对乙方有重大过失或存在欺诈行为，乙方不得提前终止本协议。尽管如此，甲方可在任何时候通过提前30天向乙方发出书面通知的方式终止本协议。During the term of this Agreement, unless Party A commits gross negligence, or a fraudulent act, against Party B, Party B shall not terminate thisAgreement prior to its expiration date. Nevertheless, Party A shall have the right to terminate this Agreement upon giving 30 days' prior writtennotice to Party B at any time.6.3在本协议终止之后，双方在第3、7和8条项下的权利和义务将继续有效。The rights and obligations of the Parties under Articles 3, 7 and 8 shall survive the termination of this Agreement.13秘密文件Strictly Confidential7.适用法律和争议解决Governing Law and Resolution of Disputes7.1本协议的订立、效力、解释、履行、修改和终止以及争议的解决适用中国的法律。The execution, effectiveness, construction, performance, amendment and termination of this Agreement and the resolution of disputes hereundershall be governed by the laws of China.7.2因解释和履行本协议而发生的任何争议，本协议双方应首先通过友好协商的方式加以解决。如果在一方向其他方发出要求协商解决的书面通知后30天之内争议仍然得不到解决，则任何一方均可将有关争议提交给中国国际经济贸易仲裁委员会，由该会按照其仲裁规则仲裁解决。仲裁应在北京进行，使用之语言为中文。仲裁裁决是终局性的，对各方均有约束力。In the event of any dispute with respect to the construction and performance of this Agreement, the Parties shall first resolve the dispute throughfriendly negotiations. In the event the Parties fail to reach an agreement on the dispute within 30 days after either Party's request to the otherParties for resolution of the dispute through negotiations, either Party may submit the relevant dispute to the China International Economic andTrade Arbitration Commission for arbitration, in accordance with its Arbitration Rules. The arbitration shall be conducted in Beijing, and thelanguage used in arbitration shall be Chinese. The arbitration award shall be final and binding on all Parties.14秘密文件Strictly Confidential7.3因解释和履行本协议而发生任何争议或任何争议正在进行仲裁时，除争议的事项外，本协议双方仍应继续行使各自在本协议项下的其他权利并履行各自在本协议项下的其他义务。Upon the occurrence of any disputes arising from the construction and performance of this Agreement or during the pending arbitration of anydispute, except for the matters under dispute, the Parties to this Agreement shall continue to exercise their respective rights under this Agreementand perform their respective obligations under this Agreement.8.补偿Indemnification就甲方根据本协议向乙方提供的咨询和服务内容所产生或引起的针对甲方的诉讼、请求或其他要求而招致的任何损失、损害、责任或费用都应由乙方补偿给甲方，以使甲方不受损害，除非该损失、损害、责任或费用是因甲方的重大过失或故意而产生的。Party B shall indemnify and hold harmless Party A from any losses, injuries, obligations or expenses caused by any lawsuit, claims or other demandsagainst Party A arising from or caused by the consultations and services provided by Party A to Party B pursuant this Agreement, except where suchlosses, injuries, obligations or expenses arise from the gross negligence or willful misconduct of Party A.15秘密文件Strictly Confidential9.通知Notices9.1本协议项下要求或发出的所有通知和其他通信应通过专人递送、挂号邮寄、邮资预付或快递服务或传真的方式发到该方下列地址。每一通知还应再以电子邮件送达。该等通知视为有效送达的日期按如下方式确定：All notices and other communications required or permitted to be given pursuant to this Agreement shall be delivered personally or sent byregistered mail, postage prepaid, by a courier service or by facsimile transmission to the address of such Party set forth below. A confirmationcopy of each notice shall also be sent by email. The dates on which notices shall be deemed to have been effectively given shall be determined asfollows:9.1.1通知如果是以专人递送、快递服务或挂号邮寄、邮资预付发出的，则以于设定为通知的地址在接收或拒收之日为有效送达日。Notices given by personal delivery, by courier service or by registered mail, postage prepaid, shall be deemed effectively given on thedate of receipt or refusal at the address specified for notices.9.1.2通知如果是以传真发出的，则以成功传送之日为有效送达日（应以自动生成的传送确认信息为证）。Notices given by facsimile transmission shall be deemed effectively given on the date of successful transmission (as evidenced by anautomatically generated confirmation of transmission).16秘密文件Strictly Confidential9.2为通知的目的，双方地址如下：For the purpose of notices, the addresses of the Parties are as follows:甲方：中传天下信息科技（深圳）有限公司Party A: Zhongchuan Tianxia Information Technology (Shenzhen) Co., Ltd.地址：深圳市南山区高新中三道2号深圳软件园一期五栋401AAddress:401A, Building 5, Phase 1, Shenzhen Software Park, No.2 Gaoxin Zhongsan Road, Nanshan District, Shenzhen收件人：洪婷Attn: Hong Ting乙方：北京中传视讯科技有限公司Party B: Beijing Mobile Vision Technology Co., Ltd地址：北京市朝阳区光华路9号SOHO3QLAB32Address: LAB32, SOHO3Q, No 9, Guanghua Road, Chaoyang District, Beijing.收件人：宋雪松Attn.: Song Xuesong9.3任何一方可按本条规定随时给另一方发出通知来改变其接收通知的地址。Any Party may at any time change its address for notices by a notice delivered to the other Party in accordance with the terms hereof.17秘密文件Strictly Confidential10.协议的转让Assignment10.1乙方不得将其在本协议项下的权利与义务转让给第三方，除非事先征得甲方的书面同意。Without Party A's prior written consent, Party B shall not assign its rights and obligations under this Agreement to any third party.10.2乙方在此同意，甲方可以在其需要时向其他第三方转让其在本协议项下的权利和义务，并在该等转让发生时甲方仅需向乙方发出书面通知，并且无需再就该等转让征得乙方的同意。Party B agrees that Party A may assign its obligations and rights under this Agreement to any third party upon a prior written notice to Party Bbut without the consent of Party B.11.协议的分割性Severability如果本协议有任何一条或多条规定根据任何法律或法规在任何方面被裁定为无效、不合法或不可执行，本协议其余规定的有效性、合法性或可执行性不应因此在任何方面受到影响或损害。双方应通过诚意磋商，争取以法律许可以及双方期望的最大限度内有效的规定取代那些无效、不合法或不可执行的规定，而该等有效的规定所产生的经济效果应尽可能与那些无效、不合法或不能强制执行的规定所产生的经济效果相似。In the event that one or several of the provisions of this Agreement are found to be invalid, illegal or unenforceable in any aspect in accordance with anylaws or regulations, the validity, legality or enforceability of the remaining provisions of this Agreement shall not be affected or compromised in any aspect.The Parties shall strive in good faith to replace such invalid, illegal or unenforceable provisions with effective provisions that accomplish to the greatestextent permitted by law and the intentions of the Parties, and the economic effect of such effective provisions shall be as close as possible to the economiceffect of those invalid, illegal or unenforceable provisions.18秘密文件Strictly Confidential12.协议的修改、补充Amendments and Supplements双方可以书面协议方式对本协议作出修改和补充。经过双方签署的有关本协议的修改协议和补充协议是本协议组成部分，具有与本协议同等的法律效力。Any amendments and supplements to this Agreement shall be in writing. The amendment agreements and supplementary agreements that have beensigned by the Parties and that relate to this Agreement shall be an integral part of this Agreement and shall have the same legal validity as this Agreement.13.语言和副本Language and Counterparts本协议以中文和英文书就，一式二份，甲乙双方各持一份，具有同等效力；中英文版本如有冲突，应以中文版为准。This Agreement is written in both Chinese and English language in two copies, each Party having one copy with equal legal validity; in case there is anyconflict between the Chinese version and the English version, the Chinese version shall prevail.本页其余部分刻意留为空白The Remainder of this page is intentionally left blank19秘密文件Strictly Confidential有鉴于此，双方已使得经其授权的代表于文首所述日期签署了本独家业务合作协议并即生效，以昭信守。IN WITNESS WHEREOF, the Parties have caused their authorized representatives to execute this Exclusive Business Cooperation Agreement as of thedate first above written.甲方：中传天下信息科技（深圳）有限公司（盖章）Party A: Zhongchuan Tianxia Information Technology (Shenzhen) Co., Ltd.(Seal)签字：By: /s/ Hong Ting 姓名：洪婷Name: Hong Ting职务：总经理Title: General Manager20秘密文件Strictly Confidential有鉴于此，双方已使得经其授权的代表于文首所述日期签署了本独家业务合作协议并即生效，以昭信守。IN WITNESS WHEREOF, the Parties have caused their authorized representatives to execute this Exclusive Business Cooperation Agreement as of thedate first above written. 乙方：北京中传视讯科技有限公司（盖章）Party B: Beijing Mobile Vision Technology Co., Ltd. (Seal)签字：By: /s/ Song Xuesong 姓名：宋雪松Name: Song Xuesong职务：董事长Title: Chairman of the Board21秘密文件Strictly ConfidentialEX4.16 4 f20f2017ex416_luokung.htm EXCLUSIVE OPTION AGREEMENT BY AND AMONG ZHONGCHUAN TIANXIA INFORMATION TECHNOLOGY(SHENZHEN) CO., LTD., XUESONG SONG, WEILI CHEN, PING WANG, DONGLAI LIU, AND BEIJING MOBILE VISION TECHNOLOGY CO., LTD., DATEDAUGUST 31, 2015Exhibit 4.16独家购买权协议Exclusive Option Agreement本独家购买权协议 (下称“本协议”) 由以下各方于年月日在中华人民共和国（下称“中国”）北京签订：This Exclusive Option Agreement (this “Agreement”) is executed by and among the Parties below as of in Beijing, the People’s Republic of China (the“China” or “PRC”):甲方：中传天下信息科技（深圳）有限公司，一家依照中国法律设立和存在的外商独资企业，地址为深圳市南山区高新中三道2号深圳软件园一期五栋401A；Party A:Zhongchuan Tianxia Information Technology (Shenzhen) Co., Ltd., a whollyforeignowned enterprise organized and existing under the laws of China,with its address at 401A, Building 5, Phase 1, Shenzhen Software Park, No.2 Gaoxin Zhongsan Road, Nanshan District, Shenzhen.乙方：Party B:a)宋雪松Song Xuesong身份证号码:120112196809040417ID Card No.:120112196809040417住所：天津市河西区广东路中裕园33702Address:Zhongyu Yuan 33702, Guangdong Road, Hexi District, Tianjinb)陈蔚力Chen Weili身份证号码:120106197309240516ID Card No.:120106197309240516住所：广东省深圳市宝安区宝城上川路15号Address:Baocheng Shangchuan Road 15, Baoan District, Shenzhen, Guangdong1秘密文件Strictly Confidentialc)王平Wang Ping身份证号码:35020319691030401xID Card No.:35020319691030401x住所：广东省深圳市南山区高新南环路36号彩虹之岸12栋4AAddress:Caihong Zhi’an Building No.12 Suite 4A, Gaoxin Nanhuan Road 36, Nanshan District, Shenzhen, Guangdongd)刘东来Liu Donglai身份证号码:120107196810103912ID Card No.:120107196810103912住所：天津市和平区南京路诚基经贸中心1号楼2门1702号Address:No 1702, Door 2, Build 1, Chengji Economic and Trade Centre, Nanjing Road, Heping District, Tianjin.丙方：北京中传视讯科技有限公司，一家依照中国法律设立和存在的有限责任公司，地址为北京市朝阳区光华路9号SOHO3QLAB32，统一社会信用代码为9111010576215249XM；Party C:Beijing Mobile Vision Technology Co., Ltd., a limited company duly registered in China, with its address at LAB32, SOHO3Q, No 9, Guanghua Road,Chaoyang District, Beijing and its uniform social credit code of 9111010576215249XM.2秘密文件Strictly Confidential在本协议中，甲方、乙方和丙方以下各称“一方”，合称“各方”。In this Agreement, each of Party A, Party B and Party C shall be referred to as a “Party” respectively, and they shall be collectively referred to as the“Parties”.鉴于，乙方系丙方股东并合计持有丙方100%股权，乙方将按本协议之条款授予甲方购买全部或部分该股权的权利。Whereas, Party B are the shareholders of Party C and jointly hold 100% of the equity interest in Party C, and Party B are willing to grant to Party A the rightto acquire such equity interest, in whole or in part, on the terms herein.现各方协商一致，达成如下协议：Now therefore, upon mutual discussion and negotiation, the Parties have reached the following agreement:1.股权买卖Sale and Purchase of Equity Interest1.1授予权利Option Granted乙方在此不可撤销地授予甲方在中国法律允许的前提下，按照甲方自行决定的行使步骤，并按照本协议第1.3条所述的价格，随时一次或多次从乙方购买或指定一人或多人(“被指定人”)从乙方购买其目前和将来所持有的丙方的全部或部分股权（无论乙方出资额和/或持股比例将来是否发生变化）的一项不可撤销的专有权(“股权购买权”)。除甲方和被指定人外，任何第三人均不得享有股权购买权或其他与乙方股权有关的权利。丙方特此同意乙方向甲方授予股权购买权。本款及本协议所规定的“人”指个人、公司、合营企业、合伙、企业、信托或非公司组织。Party B hereby irrevocably grant Party A an irrevocable and exclusive right to purchase, or designate one or more persons (each, a “Designee”) topurchase the equity interests in Party C now and in the future held by Party B (regardless whether Party B’s capital contribution amount and/orpercentage of shareholding will be changed in the future) once or at multiple times at any time in part or in whole at Party A’s sole and absolutediscretion to the extent permitted by Chinese laws and at the price described in Section 1.3 herein (such right being the “Equity Interest PurchaseOption”). Except for Party A and the Designee(s), no other person shall be entitled to the Equity Interest Purchase Option or other rights withrespect to the equity interests of Party B. Party C hereby agrees to the grant by Party B of the Equity Interest Purchase Option to Party A. Theterm “person” as used herein shall refer to individuals, corporations, partnerships, partners, enterprises, trusts or noncorporate organizations.3秘密文件Strictly Confidential1.2行使步骤Steps for Exercise of Equity Interest Purchase Option甲方行使其股权购买权以符合中国法律和法规的规定为前提。甲方行使股权购买权时，应向乙方发出书面通知(“股权购买通知”)，股权购买通知应载明以下事项：(a)甲方关于行使股权购买权的决定；(b)甲方拟从乙方购买的股权份额(“被购买的股权”)；和(c)被购买的股权的买入日期。Subject to the provisions of the laws and regulations of China, Party A may exercise the Equity Interest Purchase Option by issuing a writtennotice to Party B (the “Equity Interest Purchase Option Notice”), specifying: (a) Party A’s decision to exercise the Equity Interest PurchaseOption; (b) the portion of equity interests to be purchased from Party B (the “Optioned Interests”); and (c) the date for purchasing the OptionedInterests.1.3股权买价Equity Interest Purchase Price被购买的股权的买价（“股权买价”）应是行权当时中国法律允许的最低价格。乙方收到该股权对价后，应当提供给丙方与该股权买价相同金额的借款，该借款的期限为20年，且为无息。乙方应当在该借款期限届满时就该借款放弃对丙方的债权。The purchase price of the Optioned Interests (the “Equity Interest Purchase Price”) shall be the lowest price permitted by the laws of China. Afterreceiving the Equity Interest Purchase Price, Party B shall make an interestfree loan equivalent to the amount of Equity Interest Purchase Price toParty C, of which term is 20 years. Each member of Party B shall give up his(her) creditor’s right when the loan term expires.4秘密文件Strictly Confidential1.4转让被购买股权Transfer of Optioned Interests甲方每次行使股权购买权时：For each exercise of the Equity Interest Purchase Option:1.4.1乙方应责成丙方及时召开股东会会议，在该会议上，应通过批准乙方向甲方和/或被指定人转让被购买的股权的决议；Party B shall cause Party C to promptly convene a shareholders meeting, at which a resolution shall be adopted approving Party B’stransfer of the Optioned Interests to Party A and/or the Designee(s);1.4.2乙方应就其向甲方和/或被指定人转让被购买股权取得丙方其他股东同意该转让并放弃优先购买权的书面声明。Party B shall obtain written statements from the other shareholder of Party C giving consent to the transfer of the equity interest to PartyA and/or the Designee(s) and waiving any right of first refusal related thereto.1.4.3乙方应与甲方和/或(在适用的情况下)被指定人按照本协议及股权购买通知的规定，为每次转让签订股权转让协议；Party B shall execute a share transfer contract with respect to each transfer with Party A and/or each Designee (whichever is applicable),in accordance with the provisions of this Agreement and the Equity Interest Purchase Option Notice regarding the Optioned Interests;5秘密文件Strictly Confidential1.4.4有关方应签署所有其他所需协议、协议或文件，取得全部所需的政府批准和同意，并采取所有所需行动，在不附带任何担保权益的情况下，将被购买的股权的有效所有权转移给甲方和/或被指定人并使甲方和/或被指定人成为被购买的股权的登记在册所有人。为本款及本协议的目的，“担保权益”包括担保、抵押、第三方权利或权益，任何购股权、收购权、优先购买权、抵销权、所有权扣留或其他担保安排等；但为了明确起见，不包括在本协议、乙方股权质押协议项下产生的任何担保权益。本款及本协议所规定的“乙方股权质押协议”指甲方、乙方和丙方于本协议签署之日签订的股权质押协议，根据股权质押协议，乙方为担保丙方能履行丙方与甲方签订的独家业务合作协议项下的义务，而向甲方质押其在丙方的全部乙方股权。The relevant Parties shall execute all other necessary contracts, agreements or documents, obtain all necessary government licenses andpermits and take all necessary actions to transfer valid ownership of the Optioned Interests to Party A and/or the Designee(s),unencumbered by any security interests, and cause Party A and/or the Designee(s) to become the registered owner(s) of the OptionedInterests. For the purpose of this Section and this Agreement, “security interests” shall include securities, mortgages, third party’s rightsor interests, any stock options, acquisition right, right of first refusal, right to offset, ownership retention or other security arrangements,but shall be deemed to exclude any security interest created by this Agreement and Party B’s Equity Interest Pledge Agreement. “PartyB’s Equity Interest Pledge Agreement” as used in this Section and this Agreement shall refer to the Equity Interest Pledge Agreementexecuted by and among Party A, Party B and Party C on the date of this Agreement, whereby Party B pledge all of their equity interests inParty C to Party A, in order to guarantee Party C’s performance of its obligations under the Exclusive Business Corporation Agreementexecuted by and between Party C and Party A.6秘密文件Strictly Confidential2.知识产权独家购买权Exclusive Option regarding the Intellectual Property Rights2.1本协议签订之日起，若乙方拟转让、出售或以其他方式处置（任一处置方式以下简称“转让”）其拥有或持有的全部或部分知识产权（以下称“知识产权”，定义见第2.4条），甲方有权独家购买该等知识产权。From the date hereof, if Party B proposes to transfer, sell or dispose of (each, a “transfer”) all or any part of the intellectual property rights ownedor held by Party B (“IPR”), Party A shall have exclusive option.2.2若乙方有意转让全部或部分知识产权，应事先向甲方发出书面通知(“转让通知”)，转让通知应载明以下事项：(a) 乙方关于转让知识产权的意向；(b) 乙方拟转让的知识产权清单(“拟转让知识产权”)及转让的价格和其他条件。转让通知视为乙方向甲方发出的一份要约，按照该要约，乙方同意按转让通知中指定的价格条件向甲方转让全部或部分拟转让知识产权。Prior to Party B proposes to transfer all or any part of its IPR, Party B shall give Party A a written notice (“Transfer Notice”), which shall specify (a)Party B’s intention to make the transfer; (b) the list of IPR to be transferred (“Offered IPR”) and the consideration and other conditions uponwhich the transfer is to be made. The Transfer Notice constitutes Party B’s offer given to Party A, pursuant to which, Party B agrees to transfer allor any part of its Offered IPR to Party A based on the same conditions described in the Transfer Notice.7秘密文件Strictly Confidential2.3甲方收到转让通知后，有权在30日内选择按照转让通知中列明的转让价格和条件购买拟转让知识产权。如果甲方行使其独家购买权，双方应于甲方收到转让通知后45日内签订有关的知识产权转让协议，乙方应办理法律规定的知识产权转让的批准和登记手续。Party A shall have an option for a period of 30 days from Party A’s receipt of the Transfer Notice to elect to purchase the Offered IPR at the sameprice and subject to the same conditions as described in the Transfer Notice. If Party A decides to exercise its exclusive option, the parties shallenter into relevant IPR transfer agreement within 45 days upon Party A’s receipt of the Transfer Notice and Party B is responsible to complete allrelated approvals and registrations formalities as prescribed by the PRC law.2.4本协议第2条所称“知识产权”指任何知识产权，包括但不限于著作权、专利权、专利申请权、商标、域名、软件、专有技术，并包括前述知识产权申请权利以及登记注册的权利，以及其他所有与前述知识产权有关的权利和权益。The “IPR” referred to in this Article 2 means any intellectual property rights, including, without limitations, copyrights, patents, patentapplications, trademarks, domain names, software and knowhow together with (a) all rights to apply for or register any of the foregoing and (b) allother rights and interests to any of the foregoing.8秘密文件Strictly Confidential3.承诺Covenants3.1有关丙方的承诺Covenants regarding Party C乙方（作为丙方的股东）和丙方在此承诺：Party B (as the shareholders of Party C) and Party C hereby covenant as follows:3.1.1未经甲方的事先书面同意，不以任何形式补充、更改或修改丙方公司章程文件，增加或减少其注册资本，或以其他方式改变其注册资本结构；Without the prior written consent of Party A, they shall not in any manner supplement, change or amend the articles of association andbylaws of Party C, increase or decrease its registered capital, or change its structure of registered capital in other manners;3.1.2按照良好的财务和商业标准及惯例，保持其公司的存续，审慎地及有效地经营其业务和处理事务；They shall maintain Party C’s corporate existence in accordance with good financial and business standards and practices by prudentlyand effectively operating its business and handling its affairs;3.1.3未经甲方的事先书面同意，不在本协议签署之日起的任何时间出售、转让、抵押或以其他方式处置丙方的任何资产、业务或收入的合法或受益权益，或允许在其上设置任何其他担保权益；Without the prior written consent of Party A, they shall not at any time following the date hereof, sell, transfer, mortgage or dispose of inany manner any assets of Party C or legal or beneficial interest in the business or revenues of Party C, or allow the encumbrance thereonof any security interest;3.1.4未经甲方的事先书面同意，不发生、继承、保证或容许存在任何债务，但(i)正常或日常业务过程中产生而不是通过借款方式产生的债务；和(ii)已向甲方披露和得到甲方书面同意的债务除外；Without the prior written consent of Party A, they shall not incur, inherit, guarantee or suffer the existence of any debt, except for (i)debts incurred in the ordinary course of business other than through loans; and (ii) debts disclosed to Party A for which Party A’swritten consent has been obtained;9秘密文件Strictly Confidential3.1.5一直在正常业务过程中经营所有业务，以保持丙方的资产价值，不进行任何足以影响其经营状况和资产价值的作为/不作为；They shall always operate all of Party C’s businesses during the ordinary course of business to maintain the asset value of Party C andrefrain from any action/omission that may affect Party C’s operating status and asset value;3.1.6未经甲方的事先书面同意，不得让丙方签订任何重大协议，但在正常业务过程中签订的协议除外(就本段而言，如果一份协议的价值超过【人民币10万元】，即被视为重大协议)；Without the prior written consent of Party A, they shall not cause Party C to execute any major contract, except the contracts in theordinary course of business (for purpose of this subsection, a contract with a value exceeding RMB 100,000 shall be deemed a majorcontract);3.1.7未经甲方的事先书面同意，丙方不得向任何人提供贷款或信贷；Without the prior written consent of Party A, they shall not cause Party C to provide any person with any loan or credit;3.1.8应甲方要求，向其提供所有关于丙方的营运和财务状况的资料；They shall provide Party A with information on Party C’s business operations and financial condition at Party A’s request;10秘密文件Strictly Confidential3.1.9如甲方提出要求，丙方应从甲方接受的保险公司处购买和持有有关其资产和业务的保险，该保险的金额和险种应与经营类似业务的公司一致；If requested by Party A, they shall procure and maintain insurance in respect of Party C’s assets and business from an insurance carrieracceptable to Party A, at an amount and type of coverage typical for companies that operate similar businesses;3.1.10未经甲方的事先书面同意，丙方不得与任何人合并或联合，或对任何人进行收购或投资；Without the prior written consent of Party A, they shall not cause or permit Party C to merge, consolidate with, acquire or invest in anyperson;3.1.11将发生的或可能发生的与丙方资产、业务或收入有关的诉讼、仲裁或行政程序立即通知甲方；They shall immediately notify Party A of the occurrence or possible occurrence of any litigation, arbitration or administrative proceedingsrelating to Party C’s assets, business or revenue;3.1.12为保持丙方对其全部资产的所有权，签署所有必要或适当的文件，采取所有必要或适当的行动和提出所有必要或适当的控告或对所有索偿进行必要和适当的抗辩；To maintain the ownership by Party C of all of its assets, they shall execute all necessary or appropriate documents, take all necessary orappropriate actions and file all necessary or appropriate complaints or raise necessary and appropriate defenses against all claims;11秘密文件Strictly Confidential3.1.13未经甲方事先书面同意，不得以任何形式派发股息予各股东，但一经甲方要求，丙方应立即将其所有可分配利润全部立即分配给其各股东；及Without the prior written consent of Party A, they shall ensure that Party C shall not in any manner distribute dividends to itsshareholders, provided that upon Party A’s written request, Party C shall immediately distribute all distributable profits to itsshareholders; and3.1.14根据甲方的要求，委任由其指定的任何人士出任丙方的董事和/或执行董事。At the request of Party A, they shall appoint any persons designated by Party A as the director and/or executive director of Party C.3.2乙方和丙方的承诺Covenants of Party B and Party C乙方承诺：Party B hereby covenant as follows:3.2.1未经甲方的事先书面同意，不出售、转让、抵押或以其他方式处置其拥有的丙方的股权的合法或受益权益，或允许在其上设置任何其他担保权益，但根据乙方签署的《股权质押协议》在该股权上设置的质押则除外；Without the prior written consent of Party A, Party B shall not sell, transfer, mortgage or dispose of in any other manner any legal orbeneficial interest in the equity interests in Party C held by Party B, or allow the encumbrance thereon of any security interest, except forthe pledge placed on these equity interests in accordance with Party B’s Equity Interest Pledge Agreement;12秘密文件Strictly Confidential3.2.2促使丙方股东会和/或执行董事不批准在未经甲方的事先书面同意的情况下，出售、转让、抵押或以其他方式处置任何乙方持有之丙方的股权的合法权益或受益权，或允许在其上设置任何其他担保权益，但批准根据乙方签署的《股权质押协议》在乙方股权上设置的质押则除外；Party B shall cause the shareholders’ meeting and/or the executive director of Party C not to approve the sale, transfer, mortgage ordisposition in any other manner of any legal or beneficial interest in the equity interests in Party C held by Party B, or allow theencumbrance thereon of any security interest, without the prior written consent of Party A, except for the pledge placed on these equityinterests in accordance with Party B’s Equity Interest Pledge Agreement;3.2.3未经甲方的事先书面同意的情况下，对于丙方与任何人合并或联合，或对任何人进行收购或投资，乙方将促成丙方股东会或执行董事不予批准；Party B shall cause the shareholders’ meeting or the executive director of Party C not to approve the merger or consolidation with anyperson, or the acquisition of or investment in any person, without the prior written consent of Party A;3.2.4将发生的或可能发生的任何关于其所拥有的股权的诉讼、仲裁或行政程序立即通知甲方；Party B shall immediately notify Party A of the occurrence or possible occurrence of any litigation, arbitration or administrativeproceedings relating to the equity interests in Party C held by Party B;13秘密文件Strictly Confidential3.2.5促使丙方股东会或执行董事表决赞成本协议规定的被购买的股权的转让并应甲方之要求采取其他任何行动；Party B shall cause the shareholders’ meeting or the executive director of Party C to vote their approval of the transfer of the OptionedInterests as set forth in this Agreement and to take any and all other actions that may be requested by Party A;3.2.6为保持其对股权的所有权，签署所有必要或适当的文件，采取所有必要或适当的行动和提出所有必要或适当的控告或对所有索偿进行必要和适当的抗辩；To the extent necessary to maintain Party B’s ownership in Party C, Party B shall execute all necessary or appropriate documents, take allnecessary or appropriate actions and file all necessary or appropriate complaints or raise necessary and appropriate defenses against allclaims;3.2.7应甲方的要求，委任由其指定的任何人士出任丙方的董事和/或执行董事；Party B shall appoint any designee of Party A as the director and/or executive director of Party C, at the request of Party A;3.2.8经甲方随时要求，应向其指定的代表在任何时间无条件地根据本协议的股权购买权立即转让其股权，并放弃其对其他现有股东进行上述股权转让所享有的优先购买权（如有的话）；和At the request of Party A at any time, Party B shall promptly and unconditionally transfer its equity interests in Party C to Party A’sDesignee(s) in accordance with the Equity Interest Purchase Option under this Agreement, and Party B hereby waives its right of firstrefusal (if any) to the share transfer by the other existing shareholder of Party C (if any); and14秘密文件Strictly Confidential3.2.9严格遵守本协议及各方共同或分别签订的其他协议的各项规定，切实履行该等协议项下的各项义务，并不进行任何足以影响该等协议的有效性和可执行性的作为/不作为。如果乙方对于本协议项下或乙方股权质押协议下或对甲方的授权委托书中的股权，还留存有任何权利，除非甲方书面指示，否则乙方仍不得行使该权利。Party B shall strictly abide by the provisions of this Agreement and other contracts jointly or separately executed by and among Party B,Party C and Party A, perform the obligations hereunder and thereunder, and refrain from any action/omission that may affect theeffectiveness and enforceability thereof. To the extent that Party B has any remaining rights with respect to the equity interests subject tothis Agreement hereunder or under Party B’s Equity Interest Pledge Agreement or under the Power of Attorney granted in favor of PartyA, Party B shall not exercise such rights except in accordance with the written instructions of Party A.4.陈述和保证Representations and Warranties乙方和丙方特此在本协议签署之日和每一个转让日向甲方共同及分别陈述和保证如下：Party B and Party C hereby represent and warrant to Party A, jointly and severally, as of the date of this Agreement and each date of transfer of theOptioned Interests, that:4.1其具有签订和交付本协议和其为一方的、根据本协议为每一次转让被购买的股权而签订的任何股权转让协议(各称为"转让协议")，并履行其在本协议和任何转让协议项下的义务的权力和能力。乙方和丙方同意在甲方行使购买权时，他们将签署与本协议条款一致的转让协议。本协议和其是一方的各转让协议一旦签署后，构成或将对其构成合法、有效及具有约束力的义务并可按照其条款对其强制执行；They have the authority to execute and deliver this Agreement and any share transfer contracts to which they are a party concerning theOptioned Interests to be transferred thereunder (each, a “Transfer Contracts”), and to perform their obligations under this Agreement and anyTransfer Contracts. Party B and Party C agree to enter into Transfer Contracts consistent with the terms of this Agreement upon Party A’s exerciseof the Equity Interest Purchase Option. This Agreement and the Transfer Contracts to which they are a party constitute or will constitute theirlegal, valid and binding obligations and shall be enforceable against them in accordance with the provisions thereof;15秘密文件Strictly Confidential4.2无论是本协议或任何转让协议的签署和交付还是其在本协议或任何转让协议项下的义务的履行均不会：(i)导致违反任何有关的中国法律；(ii)与丙方章程或其他组织文件相抵触；(iii)导致违反其是一方或对其有约束力的任何协议或文件，或构成其是一方或对其有约束力的任何协议或文件项下的违约；(iv)导致违反有关向任何一方颁发的任何许可或批准的授予和(或)继续有效的任何条件；或(v)导致向任何一方颁发的任何许可或批准中止或被撤销或附加条件；The execution and delivery of this Agreement or any Transfer Contracts and the obligations under this Agreement or any Transfer Contracts shallnot: (i) cause any violation of any applicable laws of China; (ii) be inconsistent with the articles of association, bylaws or other organizationaldocuments of Party C; (iii) cause the violation of any contracts or instruments to which they are a party or which are binding on them, orconstitute any breach under any contracts or instruments to which they are a party or which are binding on them; (iv) cause any violation of anycondition for the grant and/or continued effectiveness of any licenses or permits issued to either of them; or (v) cause the suspension orrevocation of or imposition of additional conditions to any licenses or permits issued to either of them;4.3乙方对其在丙方拥有的股权拥有良好和可出售的所有权，除乙方签署的《股权质押协议》外，乙方在上述股权上没有设置任何担保权益；Party B have a good and merchantable title to the equity interests in Party C they hold. Except for Party B’s Equity Interest Pledge Agreement,Party B have not placed any security interest on such equity interests;16秘密文件Strictly Confidential4.4目前没有悬而未决的或构成威胁的与丙方的股权、丙方资产有关的或与丙方有关的诉讼、仲裁或行政程序。There are no pending or threatened litigation, arbitration or administrative proceedings relating to the equity interests in Party C, assets of Party Cor Party C.5.生效日Effective Date5.1本协议于各方签署本协议之日生效，有效期10年，经甲方选择可再延长10年。This Agreement shall become effective upon the date hereof, and remain effective for a term of 10 years, and may be renewed for an additional 10years at Party A’s election.5.2若丙方股东发生变化，由新股东签署此协议，在此协议签署之日，原协议自动视为无效。In the event of a change in the shareholders of Party C, the new shareholder should sign this agreement and the original agreement willautomatically be deemed invalid on the date of signing of this agreement.17秘密文件Strictly Confidential6.适用法律与争议解决Governing Law and Resolution of Disputes6.1适用法律Governing law本协议的订立、效力、解释、履行、修改和终止以及争议解决均适用中国正式公布并可公开得到的法律。对中国正式公布并可公开得到的法律没有规定的事项，将适用国际法律原则和惯例。The execution, effectiveness, construction, performance, amendment and termination of this Agreement and the resolution of disputes hereundershall be governed by the formally published and publicly available laws of China. Matters not covered by formally published and publiclyavailable laws of China shall be governed by international legal principles and practices.6.2争议的解决方法Methods of Resolution of Disputes因解释和履行本协议而发生的任何争议，本协议各方应首先通过友好协商的方式加以解决。如果在一方向其他方发出要求协商解决的书面通知后30天之内争议仍然得不到解决，则任何一方均可将有关争议提交给中国国际经济贸易仲裁委员会，由该会按照其届时有效的仲裁规则仲裁解决。仲裁应在北京进行，使用之语言为中文。仲裁裁决是终局性的，对各方均有约束力。In the event of any dispute with respect to the construction and performance of this Agreement, the Parties shall first resolve the dispute throughfriendly negotiations. In the event the Parties fail to reach an agreement on the dispute within 30 days after either Party’s request to the otherParties for resolution of the dispute through negotiations, either Party may submit the relevant dispute to the China International Economic andTrade Arbitration Commission for arbitration, in accordance with its then effective arbitration rules. The arbitration shall be conducted in Beijing,and the language used in arbitration shall be Chinese. The arbitration award shall be final and binding on all Parties.18秘密文件Strictly Confidential7.税款、费用Taxes and Fees每一方应承担根据中国法律因准备和签署本协议和各转让协议以及完成本协议和各转让协议拟定的交易而由该方发生的或对其征收的任何和全部的转让和注册的税、花费和费用。Each Party shall pay any and all transfer and registration tax, expenses and fees incurred thereby or levied thereon in accordance with the laws of China inconnection with the preparation and execution of this Agreement and the Transfer Contracts, as well as the consummation of the transactionscontemplated under this Agreement and the Transfer Contracts.8.通知Notices8.1本协议项下要求或发出的所有通知和其他通信应通过专人递送、挂号邮寄、邮资预付或商业快递服务或传真的方式发到该方下列地址。每一通知还应再以电子邮件送达。该等通知视为有效送达的日期按如下方式确定：All notices and other communications required or permitted to be given pursuant to this Agreement shall be delivered personally or sent byregistered mail, postage prepaid, by a commercial courier service or by facsimile transmission to the address of such Party set forth below. Aconfirmation copy of each notice shall also be sent by email. The dates on which notices shall be deemed to have been effectively given shall bedetermined as follows:8.1.1通知如果是以专人递送、快递服务或挂号邮寄、邮资预付发出的，则以于设定为通知的地址在接收或拒收之日为有效送达日。Notices given by personal delivery, by courier service or by registered mail, postage prepaid, shall be deemed effectively given on thedate of receipt or refusal at the address specified for notices.19秘密文件Strictly Confidential8.1.2通知如果是以传真发出的，则以成功传送之日为有效送达日（应以自动生成的传送确认信息为证）。Notices given by facsimile transmission shall be deemed effectively given on the date of successful transmission (as evidenced by anautomatically generated confirmation of transmission).8.2为通知的目的，各方地址如下：For the purpose of notices, the addresses of the Parties are as follows:甲方：中传天下信息科技（深圳）有限公司Party A:Zhongchuan Tianxia Information Technology (Shenzhen) Co., Ltd.地址：深圳市南山区高新中三道2号深圳软件园一期五栋401AAddress:401A, Building 5, Phase 1, Shenzhen Software Park, No.2 Gaoxin Zhongsan Road, Nanshan District, Shenzhen.收件人：洪婷Attn:Hong Ting乙方：Party B: 宋雪松Song Xuesong住所：天津市河西区广东路中裕园33702Address:Zhongyu Yuan 33702, Guangdong Road, Hexi District, Tianjin20秘密文件Strictly Confidential陈蔚力Chen Weili住所：广东省深圳市宝安区宝城上川路15号Address:Baocheng Shangchuan Road 15, Baoan District, Shenzhen, Guangdong王平Wang Ping住所：广东省深圳市南山区高新南环路36号彩虹之岸12栋4AAddress:Caihong Zhi’an Building No.12 Suite 4A, Gaoxin Nanhuan Road 36, Nanshan District, Shenzhen, Guangdong刘东来Liu Donglai住所：天津市和平区南京路诚基经贸中心1号楼2门1702号Address:No 1702, Door 2, Build 1, Chengji Economic and Trade Centre, Nanjing Road, Heping District, Tianjin.丙方：北京中传视讯科技有限公司Party C:Beijing Mobile Vision Technology Co., Ltd.地址：北京市朝阳区光华路9号SOHO3QLAB32Address: LAB32, SOHO3Q, No 9, Guanghua Road, Chaoyang District, Beijing .收件人：宋雪松Attn: Song Xuesong8.3任何一方可按本条规定随时给其他方发出通知来改变其接收通知的地址。Any Party may at any time change its address for notices by a notice delivered to the other Parties in accordance with the terms hereof.21秘密文件Strictly Confidential9.保密责任Confidentiality各方承认及确定彼此就有关本协议而交换的任何口头或书面资料均属机密资料。各方应当对所有该等资料予以保密，而在未得其他方书面同意前，不得向任何第三者披露任何有关资料，惟下列情况除外：(a)公众人士知悉或将会知悉该等资料(并非由接受资料之一方擅自向公众披露)；(b)适用法律法规或股票交易的规则或规例所需披露之资料；或(c)由任何一方就本协议所述交易而需向其法律或财务顾问披露之资料而该法律或财务顾问亦需遵守与本条款相类似之保密责任。如任何一方工作人员或聘请机构的泄密均视为该方的泄密，需依本协议承担违约责任。无论本协议以任何理由终止，本条款仍然生效。The Parties acknowledge that any oral or written information exchanged among them with respect to this Agreement is confidential information. Each Partyshall maintain the confidentiality of all such information, and without obtaining the written consent of other Parties, it shall not disclose any relevantinformation to any third parties, except in the following circumstances: (a) such information is or will be in the public domain (provided that this is not theresult of a public disclosure by the receiving party); (b) information disclosed as required by applicable laws or rules or regulations of any stock exchange;or (c) information required to be disclosed by any Party to its legal counsel or financial advisor regarding the transaction contemplated hereunder, and suchlegal counsel or financial advisor are also bound by confidentiality duties similar to the duties in this section. Disclosure of any confidential information bythe staff members or agency hired by any Party shall be deemed disclosure of such confidential information by such Party, which Party shall be held liablefor breach of this Agreement. This Section shall survive the termination of this Agreement for any reason.22秘密文件Strictly Confidential10.进一步保证Further Warranties各方同意迅速签署为执行本协议的各项规定和目的而合理需要的或对其有利的文件，以及为执行本协议的各项规定和目的而采取合理需要的或对其有利的进一步行动。The Parties agree to promptly execute documents that are reasonably required for or are conducive to the implementation of the provisions and purposes ofthis Agreement and take further actions that are reasonably required for or are conducive to the implementation of the provisions and purposes of thisAgreement.11.其他Miscellaneous11.1修订、修改与补充Amendment, change and supplement对本协议作出修订、修改与补充，必须经每一方签署书面协议。Any amendment, change and supplement to this Agreement shall require the execution of a written agreement by all of the Parties.11.2完整协议Entire agreement除了在本协议签署后所作出的书面修订、补充或修改以外，本协议构成本协议各方就本协议标的物所达成的完整协议，取代在此之前就本协议标的物所达成的所有口头或书面的协商、陈述和协议。 Except for the amendments, supplements or changes in writing executed after theexecution of this Agreement, this Agreement shall constitute the entire agreement reached by and among the Parties hereto with respect to thesubject matter hereof, and shall supercede all prior oral and written consultations, representations and contracts reached with respect to thesubject matter of this Agreement.23秘密文件Strictly Confidential11.3标题Headings本协议的标题仅为方便阅读而设，不应被用来解释、说明或在其他方面影响本协议各项规定的含义。The headings of this Agreement are for convenience only, and shall not be used to interpret, explain or otherwise affect the meanings of theprovisions of this Agreement.11.4语言Language本协议以中文和英文书就，一式八份，乙方共计六名股东以及甲方、丙方各持一份，具有同等效力；中英文版本如有冲突，应以中文版为准。This Agreement is written in both Chinese and English language in eight copies, the 6 shareholders of Party B, Party A and Party C having onecopy with equal legal validity respectively; in case there is any conflict between the Chinese version and the English version, the Chinese versionshall prevail.11.5可分割性Severability如果本协议有任何一条或多条规定根据任何法律或法规在任何方面被裁定为无效、不合法或不可执行，本协议其余规定的有效性、合法性或可执行性不应因此在任何方面受到影响或损害。各方应通过诚意磋商，争取以法律许可以及各方期望的最大限度内有效的规定取代那些无效、不合法或不可执行的规定，而该等有效的规定所产生的经济效果应尽可能与那些无效、不合法或不能强制执行的规定所产生的经济效果相似。In the event that one or several of the provisions of this Agreement are found to be invalid, illegal or unenforceable in any aspect in accordancewith any laws or regulations, the validity, legality or enforceability of the remaining provisions of this Agreement shall not be affected orcompromised in any respect. The Parties shall strive in good faith to replace such invalid, illegal or unenforceable provisions with effectiveprovisions that accomplish to the greatest extent permitted by law and the intentions of the Parties, and the economic effect of such effectiveprovisions shall be as close as possible to the economic effect of those invalid, illegal or unenforceable provisions.24秘密文件Strictly Confidential11.6继任者Successors本协议对各方各自的继任者和各方所允许的受让方应具有约束力并对其有利。This Agreement shall be binding on and shall inure to the interest of the respective successors of the Parties and the permitted assigns of suchParties.11.7继续有效Survival11.7.1协议期满或提前终止前因本协议而发生的或到期的任何义务在本协议期满或提前终止后继续有效。Any obligations that occur or that are due as a result of this Agreement upon the expiration or early termination of this Agreement shallsurvive the expiration or early termination thereof.11.7.2本协议第5、6、9条和本第11.7条的规定在本协议终止后继续有效。The provisions of Articles 5, 6, 9 and this Section 11.7 shall survive the termination of this Agreement.25秘密文件Strictly Confidential11.8弃权Waivers任何一方可以对本协议的条款和条件作出弃权，但必须经书面作出并经各方签字。一方在某种情况下就其他方的违约所作的弃权不应被视为该方在其他情况下就类似的违约已经对其他方作出弃权。Any Party may waive the terms and conditions of this Agreement, provided that such a waiver must be provided in writing and shall require thesignatures of the Parties. No waiver by any Party in certain circumstances with respect to a breach by other Parties shall operate as a waiver bysuch a Party with respect to any similar breach in other circumstances.本页其余部分刻意留为空白The Remainder of this page is intentionally left blank26秘密文件Strictly Confidential有鉴于此，各方已自行或使得其各自授权代表于文首所载日期签署本独家购买权协议。IN WITNESS WHEREOF, the Parties have executed, or caused their respective duly authorized representatives to execute, this Exclusive Option Agreement as ofthe date first above written.甲方：中传天下信息科技（深圳）有限公司（盖章）Party A: Zhongchuan Tianxia Information Technology (Shenzhen) Co., Ltd. (Seal)签字：By:/s/ Hong Ting姓名：洪婷Name: Hong Ting职务：总经理Title: General Manager秘密文件 Strictly Confidential有鉴于此，各方已自行或使得其各自授权代表于文首所载日期签署本独家购买权协议。IN WITNESS WHEREOF, the Parties have executed, or caused their respective duly authorized representatives to execute, this Exclusive Option Agreement as ofthe date first above written.乙方：Party B:宋雪松Song Xuesong签字：By:/s/ Song Xuesong秘密文件 Strictly Confidential有鉴于此，各方已自行或使得其各自授权代表于文首所载日期签署本独家购买权协议。IN WITNESS WHEREOF, the Parties have executed, or caused their respective duly authorized representatives to execute, this Exclusive Option Agreement as ofthe date first above written.乙方：Party B:陈蔚力Chen Weili签字：By:/s/ Chen Weili秘密文件 Strictly Confidential有鉴于此，各方已自行或使得其各自授权代表于文首所载日期签署本独家购买权协议。IN WITNESS WHEREOF, the Parties have executed, or caused their respective duly authorized representatives to execute, this Exclusive Option Agreement as ofthe date first above written.乙方：Party B:王平Wang Ping签字：By:/s/ Wang Ping秘密文件 Strictly Confidential有鉴于此，各方已自行或使得其各自授权代表于文首所载日期签署本独家购买权协议。IN WITNESS WHEREOF, the Parties have executed, or caused their respective duly authorized representatives to execute, this Exclusive Option Agreement as ofthe date first above written.乙方：Party B:刘东来Liu Donglai签字：By:/s/ Liu Donglai秘密文件 Strictly Confidential有鉴于此，各方已自行或使得其各自授权代表于文首所载日期签署本独家购买权协议。IN WITNESS WHEREOF, the Parties have executed, or caused their respective duly authorized representatives to execute, this Exclusive Option Agreement as ofthe date first above written.丙方：北京中传视讯科技有限公司（盖章）Party B: Beijing Mobile Vision Technology Co., Ltd. (Seal)签字：By:/s/ Song Xuesong姓名：宋雪松Name:Song Xuesong职务：董事长Title:Chairman of the Board秘密文件 Strictly ConfidentialEX4.17 5 f20f2017ex417_luokung.htm EQUITY INTEREST PLEDGE AGREEMENT BY AND AMONG ZHONGCHUAN TIANXIA INFORMATION TECHNOLOGY(SHENZHEN) CO., LTD., XUESONG SONG, WEILI CHEN, PING WANG, DONGLAI LIU, AND BEIJING MOBILE VISION TECHNOLOGY CO., LTD., DATEDAUGUST 31, 2015Exhibit 4.17股权质押协议Equity Interest Pledge Agreement本股权质押协议（下称"本协议”）由下列各方于年月日在中华人民共和国（下称“中国”）北京签订：This Equity Interest Pledge Agreement (this "Agreement") has been executed by and among the following parties on in Beijing, the People’sRepublic of China (the “China” or “PRC”):甲方：中传天下信息科技（深圳）有限公司（下称“质权人”）Party A: Zhongchuan Tianxia Information Technology (Beijing) Co., Ltd. (“Pledgee”)地址：深圳市南山区高新中三道2号深圳软件园一期五栋401AAddress: 401A, Building 5, Phase 1, Shenzhen Software Park, No.2 Gaoxin Zhongsan Road, Nanshan District, Shenzhen统一社会信用代码： 91440300565701058RUniform Social Credit Code: 91440300565701058R乙方(下称“出质人”)：Party B ( “Pledgors”):a)宋雪松Song Xuesong身份证号码:ID Card No.:b)陈蔚力Chen Weili身份证号码:ID Card No.:1秘密文件 Strictly Confidentialc)王平Wang Ping身份证号码:ID Card No.:d)刘东来Liu Donglai身份证号码:ID Card No.:丙方：北京中传视讯科技有限公司Party C: Beijing Mobile Vision Technology Co., Ltd.地址：北京市朝阳区光华路9号SOHO3QLAB32Address: LAB32, SOHO3Q, No 9, Guanghua Road, Chaoyang District, Beijing统一社会信用代码：9111010576215249XMUniform Social Credit Code: 9111010576215249XM在本协议中，质权人、出质人和丙方以下各称“一方”，合称“各方”。In this Agreement, each of Pledgee, Pledgors and Party C shall be referred to as a "Party" respectively, and they shall be collectively referred to as the"Parties".鉴于：Whereas:1．出质人全部为中国境内居民自然人，共同持有丙方100%的股权。丙方是一家在中国注册成立的、主要从事手机视频技术研发、内容制作和产业化市场推广的有限责任公司。丙方有意在此确认出质人和质权人在本协议下的权利和义务并提供必要的协助登记该质权；All of the Pledgors are natural persons resided in PRC, and collectively hold 100% of the equity interest in Party C. Party C is a limited company registered inChina, mainly engaging in mobile video frequency technology research, development, content creation, sale and related industrialization promotion. Party Cacknowledges the respective rights and obligations of Pledgors and Pledgee under this Agreement, and intends to provide any necessary assistance inregistering the Pledge;2．质权人是一家在中国注册的外商独资企业。质权人与丙方于年月日签订了独家业务合作协议；Pledgee is a whollyforeignowned enterprise registered in China. Pledgee and Party C have executed an Exclusive Business Cooperation Agreement as of [*],[*];3．为了保证丙方全面履行独家业务合作协议项下的义务，出质人以其拥有的全部丙方股权向质权人做出质押担保。To ensure that Party C fully performs its obligations under the Exclusive Business Cooperation Agreement, Pledgors hereby pledge to the Pledgee all of theequity interests they hold in Party C.为了履行业务合作协议的条款，各方商定按照以下条款签订本协议。To perform the provisions of the Business Cooperation Agreement, the Parties have mutually agreed to execute this Agreement upon the following terms.2秘密文件 Strictly Confidential1.定义Definitions除非本协议另有规定，下列词语含义为：Unless otherwise provided herein, the terms below shall have the following meanings:1.1质权：指出质人根据本协议第2条给予质权人的担保物权，即指质权人所享有的，以出质人质押给质权人的股权折价或拍卖、变卖该股权的价款优先受偿的权利。Pledge: shall refer to the security interest granted by Pledgors to Pledgee pursuant to Article 2 of this Agreement, i.e., the right of Pledgee to becompensated on a preferential basis with the conversion, auction or sales price of the Equity Interest.1.2股权：指出质人现在和将来（通过增资和/或转股）合法持有的其在丙方的全部股权权益。Equity Interest: shall refer to all of the equity interest in Party C lawfully, held now and to be held (through capital increase and/or equity transfer)hereafter by Pledgors.1.3质押期限：指本协议第3条规定的期间。Term of Pledge: shall refer to the term set forth in Article 3 of this Agreement.1.4业务合作协议：指丙方与质权人于本协议日签订的独家业务合作协议。Business Cooperation Agreement: shall refer to the Exclusive Business Cooperation Agreement executed by and between Party C and Pledgee on thedate of this Agreement.1.5违约事件：指本协议第7条所列任何情况。Event of Default: shall refer to any of the circumstances set forth in Article 7 of this Agreement.1.6违约通知：指质权人根据本协议发出的宣布违约事件的通知。Notice of Default: shall refer to the notice issued by Pledgee in accordance with this Agreement declaring an Event of Default.3秘密文件 Strictly Confidential2.质权The Pledge作为丙方按时和全额支付业务合作协议项下质权人应得的任何或全部的款项，包括但不限于业务合作协议中规定的咨询和服务费的担保（无论该等费用的到期应付是由于到期日的到来、提前收款的要求或其它原因），以及丙方充分履行其在业务合作协议项下其他所有义务（丙方按时和全额支付业务合作协议项下甲方应得的任何或全部的款项及丙方在业务合作协议项下其他所有义务，以下统称为“被担保债务”）的担保，出质人特此将其现有或将拥有的丙方的全部股权权益质押给质权人。As collateral security for the timely and complete payment and performance when due (whether at stated maturity, by acceleration or otherwise) of any or all ofthe payments due (the “all payments in pledge”) by Party C, including without limitation the consulting and services fees payable to the Pledgee under theBusiness Cooperation Agreement, Pledgors hereby pledge to Pledgee a first security interest in all of Pledgors’ right, title and interest, whether now owned orhereafter acquired by Pledgors, in the Equity Interest of Party C.3.质押期限Term of Pledge3.1本质权自本协议项下的股权出质在相应的工商行政管理机关登记之日起生效，质权有效期持续到业务合作协议下所有丙方欠付质权人的款项结清为止。出质人和丙方应（一）自本协议签署之日起3个工作日内，将本协议的质权登记在丙方股东名册上，并（二）自本协议签署之日起10个工作日内向相应的工商行政管理机关申请登记本协议项下的质权。各方共同确认，为办理股权质押工商登记手续，各方及丙方其他股东应按照丙方所在地工商行政管理部门要求的形式签署、真实反映本协议项下质权信息的《股权质押合同》（以下简称“工商登记质押合同”）提交给工商管理机关，工商登记质押合同中未约定事项，仍以本协议约定为准。出质人和丙方应当按照中国法律法规和有关工商行政管理机关的各项要求，提交所有必要的文件并办理所有必要手续，保证质权在递交申请后尽快获得登记。如果出质人持有的丙方注册资本数额增加（不管是通过直接认缴丙方的增资还是从其他股东处受让股权），各方一致同意将采取一切必要的行动和签署一切必要的文件以按照登记机关的要求完成质权的变更登记，以确保本协议项下的质权的持续有效。The Pledge shall become effective on such date when the pledge of the Equity Interest contemplated herein has been registered’ with relevantadministration for industry and commerce (the “AIC”). The Pledge shall be continuously valid until all payments due under the Business CooperationAgreement have been fulfilled by Party C. Pledgors and Party C shall (1) register the Pledge in the shareholders' register of Party C within 3 businessdays following the execution of this Agreement, and (2) submit an application to the AIC for the registration of the Pledge of the Equity Interestcontemplated herein within 10 business days following the execution of this Agreement. The parties covenant that for the purpose of registration of thePledge, the parties hereto and all other shareholders of Party C shall submit to the AIC the Equity Interest Pledge Contract in the form required by theAIC at the location of Party C which shall truly reflect the information of the Pledge hereunder (the “AIC Pledge Contract”). For matters not specified inthe AIC Pledge Contract, the parties shall be bound by the provisions of this Agreement. Pledgors and Party C shall submit all necessary documentsand complete all necessary procedures, as required by the PRC laws and regulations and the relevant AIC, to ensure that the Pledge of the EquityInterest shall be registered with the AIC as soon as possible after filing. In the event that the amount of registered capital held by Pledgors is increased(either by subscribing increased registered capital from Party C or acquiring equity interest from other shareholders), the Parties hereto agree that theyshall take any necessary action and execute any necessary document to complete the registration of change of Pledge according to the requirement ofAIC so that the Pledge in this Agreement remains effective.4秘密文件 Strictly Confidential3.2质押期限内，如丙方未按业务合作协议交付咨询服务费等费用，质权人有权但无义务按本协议的规定处分质权。During the Term of Pledge, in the event Party C fails to pay the exclusive consulting or service fees in accordance with the Business CooperationAgreement, Pledgee shall have the right, but not the obligation, to dispose of the Pledge in accordance with the provisions of this Agreement.4.质权凭证的保管Custody of Records for Equity Interest subject to Pledge4.1在本协议规定的质押期限内，出质人应将其在丙方的股权出资证明书及记载质权的股东名册交付质权人保管。出质人应在本协议签订之日起一周内将上述股权出资证明书及股东名册交付给质权人。质权人将在本协议规定的全部质押期间一直保管这些项目。During the Term of Pledge set forth in this Agreement, Pledgors shall deliver to Pledgee's custody the capital contribution certificate for the EquityInterest and the shareholders' register containing the Pledge within one week from the execution of this Agreement. Pledgee shall have custody of suchitems during the entire Term of Pledge set forth in this Agreement.4.2在质押期限内，股权所产生的红利应当无条件归质权人所有。Dividends generated by the Equity Interest shall be unconditionally owned by the Pledgee during the Term of Pledge.5秘密文件 Strictly Confidential5.出质人的声明和保证Representations and Warranties of Pledgors5.1出质人是股权唯一的合法所有人。Pledgors are the sole legal and beneficial owners of the Equity Interest.5.2质权人有权以本协议规定的方式处分并转让股权。Pledgee shall have the right to dispose of and transfer the Equity Interest in accordance with the provisions set forth in this Agreement.5.3除本质权之外，出质人未在股权上设置任何其他质押权利或其他担保权益。Except for the Pledge, Pledgors have not placed any security interest or other encumbrance on the Equity Interest.6.出质人的承诺和确认Covenants and Further Agreements of Pledgors6.1在本协议存续期间，所有出质人向质权人承诺，出质人将：All of the Pledgors hereby covenant to the Pledgee, that during the term of this Agreement, Pledgors shall:6.1.1除履行由出质人与质权人、丙方于本协议签署日签订的《独家购买权合同》外，未经质权人事先书面同意，不得转让股权，不得在股权上设立或允许存在任何担保或其他债务负担；not transfer the Equity Interest, place or permit the existence of any security interest or other encumbrance on the Equity Interest, without theprior written consent of Pledgee, except for the performance of the Exclusive Option Agreement executed by Pledgors, the Pledgee and Party Con the execution date of this Agreement;6秘密文件 Strictly Confidential6.1.2遵守并执行所有有关权利质押的法律、法规的规定，在收到有关主管机关就质权发出或制定的通知、指令或建议时，于五日内向质权人出示上述通知、指令或建议，同时遵守上述通知、指令或建议，或按照质权人的合理要求或经质权人同意就上述事宜提出反对意见和陈述；comply with the provisions of all laws and regulations applicable to the pledge of rights, and within 5 days of receipt of any notice, order orrecommendation issued or prepared by relevant competent authorities regarding the Pledge, shall present the aforementioned notice, order orrecommendation to Pledgee, and shall comply with the aforementioned notice, order or recommendation or submit objections andrepresentations with respect to the aforementioned matters upon Pledgee's reasonable request or upon consent of Pledgee;6.1.3将任何可能导致对出质人股权或其任何部分的权利产生影响的事件或收到的通知，以及可能改变出质人在本协议中的任何保证、义务或对出质人履行其在本协议中义务可能产生影响的任何事件或收到的通知及时通知质权人。promptly notify Pledgee of any event or notice received by Pledgors that may have an impact on Pledgee's rights to the Equity Interest or anyportion thereof, as well as any event or notice received by Pledgors that may have an impact on any guarantees and other obligations ofPledgors arising out of this Agreement.6.2出质人同意，质权人按本协议条款取得的对质权享有的权利，不应受到出质人或出质人的继承人或出质人之委托人或任何其他人通过法律程序的中断或妨害。Pledgors agree that the rights acquired by Pledgee in accordance with this Agreement with respect to the Pledge shall not be interrupted or harmed byPledgors or any heirs or representatives of Pledgors or any other persons through any legal proceedings.7秘密文件 Strictly Confidential6.3出质人向质权人保证，为保护或完善本协议对偿付业务合作协议项下被担保债务的担保，出质人将诚实签署、并促使其他与质权有利害关系的当事人签署质权人所要求的所有的权利证书、契约和/或履行并促使其他有利害关系的当事人履行质权人所要求的行为，并为本协议赋予质权人之权利、授权的行使提供便利，与质权人或其指定的人(自然人/法人)签署所有的有关股权所有权的文件，并在合理期间内向质权人提供其认为需要的所有的有关质权的通知、命令及决定。To protect or perfect the security interest granted by this Agreement for payment of all payment in pledge under the Business Cooperation Agreement,Pledgors hereby undertake to execute in good faith and to cause other parties who have an interest in the Pledge to execute all certificates, agreements,deeds and/or covenants required by Pledgee. Pledgors also undertake to perform and to cause other parties who have an interest in the Pledge toperform actions required by Pledgee, to facilitate the exercise by Pledgee of its rights and authority granted thereto by this Agreement, and to enter intoall relevant documents regarding ownership of Equity Interest with Pledgee or designee(s) of Pledgee (natural persons/legal persons). Pledgorsundertake to provide Pledgee within a reasonable time with all notices, orders and decisions regarding the Pledge that are required by Pledgee.6.4出质人向质权人保证，出质人将遵守、履行本协议项下所有的保证、承诺、协议、陈述及条件。如出质人不履行或不完全履行其保证、承诺、协议、陈述及条件，出质人应赔偿质权人由此遭受的一切损失。Pledgors hereby undertake to comply with and perform all guarantees, promises, agreements, representations and conditions under this Agreement. Inthe event of failure the whole or partial performance of its guarantees, promises, agreements, representations and conditions, Pledgors shall indemnifyPledgee for all losses resulting therefrom.8秘密文件 Strictly Confidential7.违约事件Event of Default7.1下列事项均被视为违约事件：The following circumstances shall be deemed Event of Default:7.1.1丙方未能按期、完整履行任何业务合作协议项下责任，包括但不限于丙方未能按期足额支付业务合作协议项下的应付的被担保债务或有违反该协议其他义务的行为；Party C fails to fully and timely fulfill any liabilities under the Business Cooperation Agreement, including without limitation failure to pay infull any of the all payment in pledge payable under the Business Cooperation Agreement or breaches any other obligations of Party Cthereunder;7.1.2出质人或丙方实质违反本协议的任何条款；Pledgors or Party C have committed a material breach of any provisions of this Agreement;7.1.3除本协议第6.1.1条的约定外，出质人舍弃出质的股权或未获得质权人书面同意而擅自转让或意图转让出质的股权；和Except as expressly stipulated in Section 6.1.1, Pledgors transfers or purports to transfer or abandons the Equity Interest pledged or assignsthe Equity Interest pledged without the written consent of Pledgee; and7.1.4丙方的继承人或代管人只能履行部分或拒绝履行业务合作协议项下的支付责任。The successor or custodian of Party C is capable of only partially perform or refuses to perform the payment obligations under the BusinessCooperation Agreement.9秘密文件 Strictly Confidential7.2如知道或发现本第7.1条所述的任何事项或可能导致上述事项的事件已经发生，出质人应立即以书面形式通知质权人。Upon notice or discovery of the occurrence of any circumstances or event that may lead to the aforementioned circumstances described in Section 7.1,Pledgors shall immediately notify Pledgee in writing accordingly.7.3除非第7.1部分下的违约事件在质权人向出质人发出要求其修补此违约行为通知后的二十（20）天之内已经按质权人要求获得救济，质权人在其后的任何时间，可向出质人发出书面违约通知，要求依据第8部分履行其处理股权的权利。Unless an Event of Default set forth in this Section 7.1 has been successfully resolved to Pledgee's satisfaction within twenty (20) days after the Pledgeedelivers a notice to the Pledgors requesting ratification of such Event of Default, Pledgee may issue a Notice of Default to Pledgors in writing at any timethereafter, demanding the Pledgors to immediately dispose of the Pledge in accordance with the provisions of Article 8 of this Agreement.8.质权的行使Exercise of Pledge8.1在被担保债务被全部清偿或履行前，未经质权人书面同意，出质人不得转让本质权和其拥有的丙方股权。Prior to the full payment of all payments in pledge, without the Pledgee's written consent, Pledgors shall not assign the Pledge or the Equity Interest inParty C.8.2在质权人行使其质押权利时，质权人可以向出质人发出书面违约通知。Pledgee may issue a Notice of Default to Pledgors when exercising the Pledge.10秘密文件 Strictly Confidential8.3在质权人行使其质押权利时，根据中国有关法律的规定，质权人有权按照法定程序处置质押股权。仅在中国法律允许的范围内，对于处置的所得，质权人无需给付出质人；除非中国法律另有规定，出质人特此放弃其可能有的能向质权人要求任何质押股权处置所得的权利；同样，出质人对质权人在该质押股权处置后的亏损也不承担任何义务。When the Pledgor exercises the pledge right, Pledgee is entitled to dispose of the Equity Interest pledged in accordance with applicable PRC laws. Onlyto the extent permitted under applicable PRC laws, Pledgee has no obligation to account to Pledgors for proceeds of disposition of the Equity Interest.Unless otherwise required by PRC laws, Pledgors hereby waive any rights it may have to demand any such accounting from Pledgee; Likewise, in suchcircumstance Pledgors shall have no obligation to Pledgee for any deficiency remaining after such disposition of the Equity Interest pledged.8.4质权人依照本协议处分质权时，出质人和丙方应予以必要的协助，以使质权人实现其质权。When Pledgee disposes of the Pledge in accordance with this Agreement, Pledgors and Party C shall provide necessary assistance to enable Pledgee toenforce the Pledge in accordance with this Agreement.9.转让Assignment9.1除非经质权人事先同意，出质人无权赠予或转让其在本协议项下的权利义务。Without Pledgee's prior written consent, Pledgors shall not have the right to assign or delegate its rights and obligations under this Agreement.11秘密文件 Strictly Confidential9.2本协议对出质人及其继任人和经许可的受让人均有约束力，并且对质权人及每一继任人和受让人有效。This Agreement shall be binding on Pledgors and their successors and permitted assigns, and shall be valid with respect to Pledgee and each of itssuccessors and assigns.9.3经出质人同意，质权人可以在任何时候将其在业务合作协议项下的所有或任何权利和义务转让给其指定的关联方（自然人/法人），在这种情况下，受让人应享有和承担本协议项下质权人享有和承担的权利和义务，如同其作为原协议方应享有和承担的一样。质权人转让业务合作协议项下的权利和义务时，应质权人要求，出质人应就此转让签署有关协议和/或文件。Upon the Pledgors’ agreement, Pledgee may assign any or all of its rights and obligations under the Business Cooperation Agreement to its designee(s)(natural/legal persons) at any time, in which case the assigns shall have the rights and obligations of Pledgee under this Agreement, as if it were theoriginal party to this Agreement. When the Pledgee assigns the rights and obligations under the Business Cooperation Agreement, upon Pledgee'srequest, Pledgors shall execute relevant agreements or other documents relating to such assignment.9.4因转让所导致的质权人变更后，应质权人要求，出质人应与新的质权人签订一份内容与本协议一致的新质押协议，并在相应的工商行政管理机关进行登记。In the event of a change in Pledgee due to an assignment, Pledgors shall, at the request of Pledgee, execute a new pledge agreement with the newpledgee on the same terms and conditions as this Agreement, and register the same with the relevant AIC.12秘密文件 Strictly Confidential9.5出质人应严格遵守本协议和各方单独或共同签署的其他有关协议的规定，包括独家购买权合同和对质权人的授权委托书，履行各协议项下的义务，并不进行任何足以影响协议的有效性和可强制执行性的作为/不作为。除非根据质权人的书面指示，出质人不得行使其对质押股权还留存的权利。Pledgors shall strictly abide by the provisions of this Agreement and other contracts jointly or separately executed by the Parties hereto or any of them,including the Exclusive Option Agreement and the Power of Attorney granted to Pledgee, perform the obligations hereunder and thereunder, and refrainfrom any action/omission that may affect the effectiveness and enforceability thereof. Any remaining rights of Pledgors with respect to the EquityInterest pledged hereunder shall not be exercised by Pledgors except in accordance with the written instructions of Pledgee.10.终止Termination在被担保债务被全部清偿或履行完毕之后，本质权人应在尽早合理可行的时间内办理或配合办理解除质押的手续，出质人与丙方应提供相应的配合与协助。Upon the full payment of all payments in pledge under the Business Cooperation Agreement a, Pledgor shall then, with the assistance of Party B and Party C,go through the procedures of cancellation of pledge rights at a reasonable time as soon as practicable.11.手续费及其他费用Handling Fees and Other Expenses一切与本协议有关的费用及实际开支，其中包括但不限于法律费用、工本费、印花税以及任何其他税收、费用等全部由丙方承担。All fees and out of pocket expenses relating to this Agreement, including but not limited to legal costs, costs of production, stamp tax and any other taxes andfees, shall be borne by Party C.13秘密文件 Strictly Confidential12.保密责任Confidentiality各方承认及确定有关本协议、本协议内容，以及彼此就准备或履行本协议而交换的任何口头或书面资料均被视为保密信息。各方应当对所有该等保密信息予以保密，而在未得到另一方书面同意前，不得向任何第三者披露任何保密信息，惟下列信息除外：(a)公众人士知悉或将会知悉的任何信息（惟并非由接受保密信息之一方擅自向公众披露）；(b)根据适用法律法规、股票交易规则、或政府部门或法院的命令而所需披露之任何信息；或(c)由任何一方就本协议所述交易而需向其股东、投资者、法律或财务顾问披露之信息，而该股东、法律或财务顾问亦需遵守与本条款相类似之保密责任。如任何一方工作人员或聘请机构的泄密均视为该方的泄密，需依本协议承担违约责任。无论本协议以任何理由终止，本条款仍然生效。The Parties acknowledge that the existence and the terms of this Agreement and any oral or written information exchanged between the Parties in connectionwith the preparation and performance this Agreement are regarded as confidential information. Each Party shall maintain confidentiality of all such confidentialinformation, and without obtaining the written consent of the other Party, it shall not disclose any relevant confidential information to any third parties, exceptfor the information that: (a) is or will be in the public domain (other than through the receiving Party’s unauthorized disclosure); (b) is under the obligation tobe disclosed pursuant to the applicable laws or regulations, rules of any stock exchange, or orders of the court or other government authorities; or (c) isrequired to be disclosed by any Party to its shareholders, investors, legal counsels or financial advisors regarding the transaction contemplated hereunder,provided that such shareholders, investors, legal counsels or financial advisors shall be bound by the confidentiality obligations similar to those set forth inthis Section. Disclosure of any confidential information by the staff members or agencies hired by any Party shall be deemed disclosure of such confidentialinformation by such Party, which Party shall be held liable for breach of this Agreement. This Section shall survive the termination of this Agreement for anyreason.14秘密文件 Strictly Confidential13.适用法律和争议的解决Governing Law and Resolution of Disputes13.1本协议的订立、效力、解释、履行、修改和终止以及争议的解决均适用中国法律。The execution, effectiveness, construction, performance, amendment and termination of this Agreement and the resolution of disputes hereunder shallbe governed by the laws of China.13.2因解释和履行本协议而发生的任何争议，本协议各方应首先通过友好协商的方式加以解决。如果在一方向其他方发出要求协商解决的书面通知后30天之内争议仍然得不到解决，则任何一方均可将有关争议提交给中国国际经济贸易仲裁委员会，由该会按照其仲裁规则仲裁解决。仲裁应在北京进行，使用之语言为中文。仲裁裁决是终局性的，对各方均有约束力。In the event of any dispute with respect to the construction and performance of this Agreement, the Parties shall first resolve the dispute throughfriendly negotiations. In the event the Parties fail to reach an agreement on the dispute within 30 days after either Party's request to the other Parties forresolution of the dispute through negotiations, either Party may submit the relevant dispute to the China International Economic and Trade ArbitrationCommission for arbitration, in accordance with its Arbitration Rules. The arbitration shall be conducted in Beijing, and the language used in arbitrationshall be Chinese. The arbitration award shall be final and binding on all Parties.13.3因解释和履行本协议而发生任何争议或任何争议正在进行仲裁时，除争议的事项外，本协议各方仍应继续行使各自在本协议项下的其他权利并履行各自在本协议项下的其他义务。Upon the occurrence of any disputes arising from the construction and performance of this Agreement or during the pending arbitration of any dispute,except for the matters under dispute, the Parties to this Agreement shall continue to exercise their respective rights under this Agreement and performtheir respective obligations under this Agreement.15秘密文件 Strictly Confidential14.通知Notices14.1本协议项下要求或发出的所有通知和其他通信应通过专人递送、挂号邮寄、邮资预付或商业快递服务或传真的方式发到该方下列地址。每一通知还应再以电子邮件送达。该等通知视为有效送达的日期按如下方式确定：All notices and other communications required or permitted to be given pursuant to this Agreement shall be delivered personally or sent by registeredmail, postage prepaid, by a commercial courier service or by facsimile transmission to the address of such party set forth below. A confirmation copy ofeach notice shall also be sent by Email. The dates on which notices shall be deemed to have been effectively given shall be determined as follows:14.1.1通知如果是以专人递送、快递服务或挂号邮寄、邮资预付发出的，则以于设定为通知的地址在接收或拒收之日为有效送达日。Notices given by personal delivery, by courier service or by registered mail, postage prepaid, shall be deemed effectively given on the date ofreceipt or refusal at the address specified for notices.14.1.2通知如果是以传真发出的，则以成功传送之日为有效送达日（应以自动生成的传送确认信息为证）。Notices given by facsimile transmission shall be deemed effectively given on the date of successful transmission (as evidenced by anautomatically generated confirmation of transmission).16秘密文件 Strictly Confidential14.2为通知的目的，各方地址如下：For the purpose of notices, the addresses of the Parties are as follows:甲方：中传天下信息科技（深圳）有限公司Party A: Zhongchuan Tianxia Information Technology (Shenzhen) Co., Ltd.地址：深圳市南山区高新中三道2号深圳软件园一期五栋401AAddress: 401A, Building 5, Phase 1, Shenzhen Software Park, No.2 Gaoxin Zhongsan Road, Nanshan District, Shenzhen.收件人：洪婷Attn: Hong Ting乙方：Party B:a)宋雪松Song Xuesong地址：125.Expenses, including legal fees, incurred by a director in defending any legal, administrative or investigative proceedings may be paid by the Company inadvance of the final disposition of such proceedings upon receipt of an undertaking by or on behalf of the director to repay the amount if it shall ultimatelybe determined that the director is not entitled to be indemnified by the Company in accordance with these Articles.126.Expenses, including legal fees, incurred by a former director in defending any legal, administrative or investigative proceedings may be paid by theCompany in advance of the final disposition of such proceedings upon receipt of an undertaking by or on behalf of the former director to repay the amountif it shall ultimately be determined that the director is not entitled to be indemnified by the Company in accordance with these Articles.127.The indemnification and advancement of expenses provided by, or granted pursuant to, these Articles is not exclusive of any other rights to which theperson seeking indemnification of advancement of expenses may be entitled under any agreement, resolution of members, resolution of disinteresteddirectors or otherwise, both as to acting in the person’s official capacity and as to acting in another capacity while serving as a director of the Company.128.If a person to be indemnified has been successful in defence of any proceedings referred to above the person is entitled to be indemnified against allexpenses, including legal fees, and against all judgments, fines and amounts paid in settlement and reasonably incurred by the person in connection withthe proceedings.129.The Company may purchase and maintain insurance in relation to any person who is or was a director, an officer or a liquidator of the Company, or who atthe request of the Company is or was serving as a director, an officer or a liquidator of, or in any other capacity is or was acting for, another body corporateor a partnership, joint venture, trust or other enterprise, against any liability asserted against the person and incurred by the person in that capacity,whether or not the Company has or would have had the power to indemnify the person against the liability as provided in these Articles.SEAL130.The Company shall have a Seal and may have more than one Seal. References herein to the Seal shall be references to every Seal which shall have beenduly adopted by resolution of directors. The directors shall provide for the safe custody of the Seal and for an imprint thereof to be kept at the office of theregistered agent of the Company. Except as otherwise expressly provided herein, the Seal when affixed to any written instrument, shall be witnessed andattested to by the signature of a director or any other person so authorized from time to time by resolution of directors. Such authorization may be before orafter the Seal is affixed, may be general or specific and may refer to any number of sealings. The Directors may provide for a facsimile of the Seal and of thesignature of any director or authorized person which may be reproduced by printing or other means on any instrument and it shall have the same force andvalidity as if the Seal had been affixed to such instrument and the same had been signed as hereinbefore described.21DISTRIBUTIONS131.The directors of the Company may by resolution authorise a distribution by the Company at any time and of any amount and to any members they think fitif they are satisfied on reasonable grounds that immediately after the distribution;a.the value of the Company’s assets will exceed its liabilities, andb.the Company will be able to pay its debts as they fall due.132.A resolution of the directors passed under the preceding Article shall contain a statement that, in the opinion of the directors, immediately after thedistribution the value of the Company’s assets will exceed its liabilities, and the Company will be able to pay its debts as they fall due.133.If, after a distribution is authorised and before it is made, the directors cease to be satisfied on reasonable grounds that the Company will, immediately afterthe distribution satisfy the solvency test, any distribution made by the Company is deemed not to have been authorised.134.If, by virtue of the preceding Article, a distribution is deemed not to have been authorised, a director who;a.ceased, after authorisation but before the making of the distribution, to be satisfied on reasonable grounds for believing that the company wouldsatisfy the solvency test immediately after the distribution is made; andb.failed to take reasonable steps to prevent the distribution being made;is personally liable to the company to repay to the company so much of the distribution as is not able to be recovered from members.135.A distribution made to a member at a time when the company did not, immediately after the distribution, satisfy the solvency test may be recovered by thecompany from the member unless;a.the member received the distribution in good faith and without knowledge of the company’s failure to satisfy the solvency test;b.the member has altered his position in reliance on the validity of the distribution; andc.it would be unfair to require repayment in full or at all.DISTRIBUTIONS BY WAY OF DIVIDEND136.The Company may by a resolution of directors declare a distribution by way of dividend and pay such distribution in money, shares or other property. Inthe event that distributions by way of dividend are paid in specie the directors shall have responsibility for establishing and recording in the resolution ofdirectors authorizing the distribution by way of dividend, a fair and proper value for the assets to be so distributed.137.The directors may from time to time pay to the members such interim distributions by way of dividend as appear to the directors to be justified by theprofits of the Company.138.The directors may, before declaring any distribution by way of dividend, set aside out of the profits of the Company such sum as they think proper as areserve fund, and may invest the sum so set aside as a reserve fund upon such securities as they may select.139.Notice of any distribution by way of dividend that may have been declared shall be given to each member in the manner hereinafter mentioned and alldistributions by way of dividend unclaimed for 3 years after having been declared may be forfeited by resolution of directors for the benefit of theCompany.140.No distribution by way of dividend shall bear interest as against the Company and no distribution by way of dividend shall be paid on treasury shares orshares held by another company of which the Company holds, directly or indirectly, shares having more than 50 percent of the vote in electing directors.22141.A share issued as a distribution by way of dividend by the Company shall be treated for all purposes as having been issued for money equal to the valuedetermined by resolution of the directors. In the absence of fraud the decision of the directors as to the value of the share is conclusive unless a questionof law is involved.142.A division of the issued and outstanding shares of a class or series of shares into a larger number of shares of the same class or series having aproportionately smaller par value does not constitute a distribution by way of dividend of shares.ACCOUNTS AND AUDIT143.The Company may by resolution of members call for the directors to prepare periodically a profit and loss account and a balance sheet. The profit and lossaccount and balance sheet shall be drawn up so as to give respectively a true and fair view of the profit and loss of the Company for the financial periodand a true and fair view of the state of affairs of the Company as at the end of the financial period.144.The Company may by resolution of members call for the accounts to be examined by auditors.145.Subject to the rules of the Designated Stock Exchange, the first auditors shall be appointed by resolution of directors; subsequent auditors shall beappointed by the Audit Committee and shall hold office until the Audit Committee appoint another independent auditor.146.Subject to the rules of the Designated Stock Exchange, the remuneration of the auditors of the Company shall be fixed by the Audit Committee.147.The auditors shall examine each profit and loss account and balance sheet required to be served on every member of the Company or laid before a meetingof the members of the Company and shall state in a written report whether or nota.in their opinion the profit and loss account and balance sheet give a true and fair view respectively of the profit and loss for the period covered bythe accounts, and of the state of affairs of the Company at the end of that period; andb.all the information and explanations required by the auditors have been obtained.148.The report of the auditors shall be annexed to the accounts and shall be read at the meeting of members at which the accounts are laid before the Companyor shall be served on the members.149.Every auditor of the Company shall have a right of access at all times to the books of account and vouchers of the Company, and shall be entitled to requirefrom the directors and officers of the Company such information and explanations as he thinks necessary for the performance of the duties of the auditors.150.The auditors of the Company shall be entitled to receive notice of, and to attend any meetings of members of the Company at which the Company’s profitand loss account and balance sheet are to be presented.NOTICES151.Any notice, information or written statement to be given by the Company to members may be served in any way by which it can reasonably be expected toreach each member or by mail addressed to each member at the address shown in the share register.152.Any summons, notice, order, document, process, information or written statement to be served on the Company may be served by leaving it, or by sendingit by registered mail addressed to the Company, at its registered office, or by leaving it with, or by sending it by registered mail to, the registered agent ofthe Company.153.Service of any summons, notice, order, document, process, information or written statement to be served on the Company may be proved by showing thatthe summons, notice, order, document, process, information or written statement was delivered to the registered office or the registered agent of theCompany or that it was mailed in such time as to admit to its being delivered to the registered office or the registered agent of the Company in the normalcourse of delivery within the period prescribed for service and was correctly addressed and the postage was prepaid.23PENSION AND SUPERANNUATION FUNDS154.The directors may establish and maintain or procure the establishment and maintenance of any noncontributory or contributory pension orsuperannuation funds for the benefit of, and give or procure the giving of donations, gratuities, pensions, allowances or emoluments to, any persons whoare or were at any time in the employment or service of the Company or any company which is a subsidiary of the Company or is allied to or associated withthe Company or with any such subsidiary, or who are or were at any time directors or officers of the Company or of any such other company as aforesaid orwho hold or held any salaried employment or office in the Company or such other company, or any persons in whose welfare the Company or any suchother company as aforesaid is or has been at any time interested, and to the wives, widows, families and dependents of any such person, and may makepayments for or towards the insurance of any such persons as aforesaid, and may do any of the matters aforesaid either alone or in conjunction with anysuch other company as aforesaid. Subject always to the proposal being approved by resolution of members, a director holding any such employment oroffice shall be entitled to participate in and retain for his own benefit any such donation, gratuity, pension allowance or emolument.VOLUNTARY WINDING UP AND DISSOLUTION155.The Company may voluntarily commence to wind up and dissolve by a resolution of members but if the Company has never issued shares it mayvoluntarily commence to wind up and dissolve by resolution of directors.CONTINUATION156.The Company may by resolution of members or by a resolution passed unanimously by all directors of the Company continue as a company incorporatedunder the laws of a jurisdiction outside the British Virgin Islands in the manner provided under those laws.ARBITRATION157.Whenever any difference arises between the Company on the one hand and any of the members or their executors, administrators or assigns on the otherhand, touching the true intent and construction or the incidence or consequences of these Articles or of the Act, touching anything done or executed,omitted or suffered in pursuance of the Act or touching any breach or alleged breach or otherwise relating to the premises or to these Articles, or to anyAct or Ordinance affecting the Company or to any of the affairs of the Company such difference shall, unless the parties agree to refer the same to a singlearbitrator, be referred to 2 arbitrators one to be chosen by each of the parties to the difference and the arbitrators shall before entering on the referenceappoint an umpire.158.If either party to the reference makes default in appointing an arbitrator either originally or by way of substitution (in the event that an appointed arbitratorshall die, be incapable of acting or refuse to act) for 10 days after the other party has given him notice to appoint the same, such other party may appoint anarbitrator to act in the place of the arbitrator of the defaulting party.We, Portcullis TrustNet (BVI) Limited of Portcullis TrustNet Chambers, P.O. Box 3444, Road Town, Tortola, British Virgin Islands for the purpose of incorporating aBVI Business Company under the laws of the British Virgin Islands hereby sign these Articles of Association the 27th day of October, 2009.Incorporator/s/ Nicole WheatleyPortcullis TrustNet (BVI) LimitedPortcullis TrustNet ChambersP.O. Box 3444Road Town, TortolaBritish Virgin Islands(Sgd. Nicole Wheatley)24EX4.15 3 f20f2017ex415_luokung.htm EXCLUSIVE BUSINESS COOPERATION AGREEMENT BY AND BETWEEN ZHONGCHUAN TIANXIA INFORMATIONTECHNOLOGY (SHENZHEN) CO., LTD., AND BEIJING MOBILE VISION TECHNOLOGY CO., LTD., DATED AUGUST 31, 2015Exhibit 4.15独家业务合作协议Exclusive Business Cooperation Agreement本独家业务合作协议（下称“本协议”）由以下双方于年月日在中华人民共和国（下称“中国”）北京市签署。This Exclusive Business Cooperation Agreement (this “Agreement”) is made and entered into by and between the following parties on in Beijing, thePeople’s Republic of China (“China” or the “PRC”).甲方：中传天下信息科技（深圳）有限公司Party A: Zhongchuan Tianxia Information Technology (Shenzhen) Co., Ltd.地址：深圳市南山区高新中三道2号深圳软件园一期五栋401A Address: 401A, Building 5, Phase 1, Shenzhen Software Park, No.2 Gaoxin Zhongsan Road, Nanshan District, Shenzhen统一社会信用代码：91440300565701058R Uniform Social Credit Code: 91440300565701058R乙方：北京中传视讯科技有限公司Party B: Beijing Mobile Vision Technology Co., Ltd.地址：北京市朝阳区光华路9号SOHO3QLAB32Address: LAB32, SOHO3Q, No 9, Guanghua Road, Chaoyang District, Beijing统一社会信用代码：9111010576215249XMUniform Social Credit Code: 9111010576215249XM甲方和乙方以下各称为“一方”，统称为“双方”。Each of Party A and Party B shall be hereinafter referred to as a “Party” respectively, and as “Parties” collectively.1秘密文件Strictly Confidential鉴于：Whereas,1.甲方是一家在中国注册的外商独资企业，拥有丰富的技术研发和产业化推广相关的管理和投资经验，并提供相关的技术支持和咨询服务；Party A is a whollyforeignowned enterprise established in China, which has rich experience in technology research development and industrializationpromotion management and investment, and provides relevant technical support and consulting services;2.乙方是一家在中国成立的有限责任公司，经中国有关政府部门批准依法主要从事手机视频技术开发、内容制作及市场推广；Party B is a limited company in China, mainly engages in mobile video technology research, development, content creation, sale and related industrialpromotion as approved by the relevant governmental authorities in China;3.甲方同意利用其技术、人员和信息优势，在本协议期间向乙方提供有关手机视频技术开发、内容制作及市场推广以及未来扩大业务规模和业务范围时乙方所需的技术支持、技术咨询等相关服务，乙方同意接受甲方或其指定方按本协议条款的规定提供的各种服务。Party A is willing to provide Party B with technology supports and technology consulting services in connection with mobile video technology research,development, content creation, sale and related industrial promotion and such services in connection with Party B’s extension of business scale orbroadening of businesses during the term of this Agreement, utilizing its advantages in technology, human resources, and information, and Party B iswilling to accept such services provided by Party A or Party A's designee(s), each on the terms set forth herein.2秘密文件Strictly Confidential据此，甲方和乙方经协商一致，达成如下协议：Now, therefore, through mutual discussion, the Parties have reached the following agreements:1.服务提供Services Provided by Party A1.1按照本协议条款和条件，乙方在此委任甲方在本协议期间作为乙方的独家服务提供者向乙方提供全面的和手机视频技术开发、内容制作及市场推广相关以及未来扩大业务规模和业务范围时乙方所需的技术支持、业务支持和相关咨询服务，具体内容包括但不限于以下内容：Party B hereby appoints Party A as Party B's exclusive services provider to provide Party B with complete technical support, business supportand related consulting services in connection with mobile video technology research, development, content creation, sale and related industrialpromotion and such services in connection with Party B’s extension of business scale or broadening of businesses during the term of thisAgreement, in accordance with the terms and conditions of this Agreement, which may include but not limited to:1.1.1为乙方提供其手机视频技术开发、内容制作及市场推广业务所需的一切服务支持，为乙方提供相当于包括总经理、行政人员、管理人员、筹划部门、商业运营、人力资源、财务、会计以及与乙方业务相关的一切业务操作所需人员所能提供的服务内容；managing all aspects of Party B’s business of mobile video technology research, development, content creation, sale and relatedindustrial promotion. In this capacity, Party A will procure or engage for Party B the services of a general manager and other managementstaff, including but not limited to personnel responsible for all administration, operations, planning, business development, humanresources, finance, accounting and other operations related to the Business of Party B;3秘密文件Strictly Confidential1.1.2为乙方制定全部的商业计划、销售目标，并为优化执行该等商业计划设计和建立相应的系统及操作程序；developing all business plans and sales projections of Party B, and for developing and establishing systems and procedures for optimumexecution of the business plans;1.1.3为乙方申请手机视频技术及内容制作相关专利提供咨询服务和支持；consulting services and support in connection with Party B’s applying for mobile video technology related patents and content creation;1.1.4为乙方手机视频技术产业化的发展方向、规模、品牌提升提供咨询服务；consulting services in connection with the development directions, size and business brands promotion of Party B’s mobile videotechnology industrialization;4秘密文件Strictly Confidential1.1.5为乙方提供与业务相关的办公、生产和销售服务，为乙方租赁场所，建立业务相关的系统和程序，满足乙方的其他要求；procuring or obtaining for Party B all office, production and distribution services related to the Business. It shall procure or obtainappropriate leases, establish systems and procedures needed to operate the business, fulfill orders for services;1.1.6尽最大努力为乙方建立手机视频技术销售市场，根据甲方为乙方制定的商业计划及销售目标代表乙方获取客户订单，同时为乙方提供与业务相关的客户服务，建立向客户开具票据的程序和与会计相关的托收服务。using its best efforts to establish mobile video technology related marketing and other structures to obtain orders for services &products from customers on behalf of Party B in accordance with Party B’s business plans, sales projections and objectives (asdeveloped by Party A) and procure or obtain customer services required in connection with the Business. It shall also establishprocedures for invoicing customers, and establish collection services with respect to accounts;1.1.7就乙方的劳动用工方面提供咨询服务和支持，包括但不限于，组织实施对乙方业务人员、行政人员、管理人员等人员进行培训和考核，协助建立健全的人力资源管理制度和实现人力资源的良好配置；consulting services and support regarding labor system of Party B, including but without limitation to labor training and evaluation ofsales person, administrative staff and management person etc. and establishment of human resources management system to well;5秘密文件Strictly Confidential1.1.8提供乙方需要的客户数据统计、分析及相关数据库的建设和维护等咨询服务；providing Party B with compile and analysis of client data and consulting services of establishment and maintenance of data base;1.1.9提供乙方需要的软件和相关技术支持服务；providing software Party B requires and other technical support;1.1.10接受乙方委托，对乙方的手机视频技术研发和产业化推广业务经营进行指导和管理；guiding and management on Party B’s business of mobile video technology research and development and related industrial promotionoperation according to Party B’s commission;1.1.11当乙方业务规模发展或业务范围扩大需要时，购买乙方业务经营需要的设备；in the event of the demand of Party B’s development of business scale or broadening of businesses, purchase the equipments which itneeds for the operation of its business;1.1.12当乙方业务规模发展或业务范围扩大需要时，完成乙方项目中的全部或部分工作；in the event of the demand of Party B’s development of business scale or broadening of businesses, complete the work of Party B’sproject in whole or in party;6秘密文件Strictly Confidential1.1.13当乙方业务规模发展或业务范围扩大需要时，开发新技术；in the event of the demand of Party B’s development of business scale or broadening of businesses, develop new technology;1.1.14乙方委托甲方，且甲方接受委托提供的其他服务。other services Party B appoints Party A to provide and Party A agrees to provide.1.2乙方接受甲方的咨询和服务。乙方进一步同意，除非经甲方事先书面同意，在本协议期间，就本协议约定的服务或其他事宜，乙方不得直接或间接地从任何第三方获得任何与本协议相同或类似的咨询和/或服务，并不得与任何第三方就本协议所述事项建立任何类似的合作关系。双方同意，甲方可以指定其他方（该被指定方可以与乙方签署本协议第1.3条描述的某些协议）为乙方提供本协议约定的服务和/或支持。Party B agrees to accept all the consultations and services provided by Party A. Party B further agrees that unless with Party A's prior writtenconsent, during the term of this Agreement, Party B shall not directly or indirectly accept the same or any similar consultations and/or servicesprovided by any third party and shall not establish similar corporation relationship with any third party regarding the matters contemplated by thisAgreement. Party A may appoint other parties, who may enter into certain agreements described in Section 1.3 with Party B, to provide Party Bwith the consultations and/or services under this Agreement.7秘密文件Strictly Confidential1.3服务的提供方式Service Providing Methodology1.3.1双方同意在本协议有效期内，视情况而定，乙方可以与甲方或甲方指定的其他方进一步签订技术服务协议和/或咨询服务协议，对各项业务培训、技术服务、咨询服务的具体内容、方式、人员、收费等进行约定。Parties agree that during the term of this Agreement, where necessary, Party B may enter into further technical service agreements and/orconsulting service agreements with Party A or any other party designated by Party A, which shall provide the specific contents, manner,personnel, and fees for the specific technical services and consulting services.1.3.2为更好地履行本协议，双方同意，在甲方认为必要时，乙方应在本协议有效期内与甲方或甲方指定的其他方根据业务进展需要随时签署协议，由甲方或其指定方向乙方提供服务。To fulfill this Agreement, Parties agree that during the term of this Agreement, where Party A deems necessary, Party B shall enter intoagreements with Party A or any other party designated by Party A which shall set forth that Party A or any other party designated byParty A provide services to Party B based on the needs of the business of Party B.8秘密文件Strictly Confidential2.服务的价格和支付方式The Calculation and Payment of the Service Fees双方同意，就甲方提供的服务，乙方应向甲方支付服务费（“服务费”）。服务费不应低于乙方税后利润的80%。服务费应当按季支付；经甲方事先书面同意，服务费可以根据乙方的经营需要进行调整。Both Parties agree that, in consideration of the services provided by Party A, Party B shall pay Party A fees (the “Service Fees”), which shall not be lessthan 80% of Party B’s aftertax profits . The Service Fees shall be due and payable on a quarterly basis; upon the prior written consent by Party A, the rateof Service Fees may be adjusted pursuant to the operational needs of Party B.3.知识产权和保密条款Intellectual Property Rights and Confidentiality Clauses3.1在中国法律允许的范围内，甲方对履行本协议而产生或创造的任何权利、所有权、权益和所有知识产权包括但不限于著作权、专利权、专利申请权、软件、技术秘密、商业机密及其他均享有独占的和排他的权利和利益。乙方须签署所有适当的文件，采取所有适当的行动，递交所有的文件和/或申请，提供所有适当的协助，以及做出所有其他依据甲方的自行决定认为是必要的行为，以将任何对该等知识产权的所有权、权利和权益赋予甲方，和/或完善对甲方此等知识产权权利的保护。To the extent permitted under the PRC laws, Party A shall have exclusive and proprietary rights and interests in all rights, ownership, interests andintellectual properties arising out of or created during the performance of this Agreement, including but not limited to copyrights, patents, patentapplications, software, technical secrets, trade secrets and others. Party B shall execute all appropriate documents, take all appropriate actions,submit all filings and/or applications, render all appropriate assistance and otherwise conduct whatever is necessary deemed as by Party A in itssole discretion for the purposes of vesting any ownership, right or interest of any such intellectual property rights in Party A, and/or perfectingthe protections for any such intellectual property rights in Party A.9秘密文件Strictly Confidential3.2双方承认及确定有关本协议、本协议内容，以及彼此就准备或履行本协议而交换的任何口头或书面资料均被视为保密信息。双方应当对所有该等保密信息予以保密，而在未得到另一方书面同意前，不得向任何第三者披露任何保密信息，惟下列信息除外：(a)公众人士知悉或将会知悉的任何信息（惟并非由接受保密信息之一方擅自向公众披露）；(b)根据适用法律法规、股票交易规则、或政府部门或法院的命令而所需披露之任何信息；或(c)由任何一方就本协议所述交易而需向其股东、投资者、法律或财务顾问披露之信息，而该股东、法律或财务顾问亦需遵守与本条款相类似之保密责任。如任何一方工作人员或聘请机构的泄密均视为该方的泄密，需依本协议承担违约责任。无论本协议以任何理由终止，本条款仍然生效。The Parties acknowledge that the existence and the terms of this Agreement and any oral or written information exchanged between the Parties inconnection with the preparation and performance this Agreement are regarded as confidential information. Each Party shall maintainconfidentiality of all such confidential information, and without obtaining the written consent of the other Party, it shall not disclose any relevantconfidential information to any third parties, except for the information that: (a) is or will be in the public domain (other than through the receivingParty’s unauthorized disclosure); (b) is under the obligation to be disclosed pursuant to the applicable laws or regulations, rules of any stockexchange, or orders of the court or other government authorities; or (c) is required to be disclosed by any Party to its shareholders, investors,legal counsels or financial advisors regarding the transaction contemplated hereunder, provided that such shareholders, investors, legal counselsor financial advisors shall be bound by the confidentiality obligations similar to those set forth in this Section. Disclosure of any confidentialinformation by the staff members or agencies hired by any Party shall be deemed disclosure of such confidential information by such Party, whichParty shall be held liable for breach of this Agreement. This Section shall survive the termination of this Agreement for any reason.3.3双方同意，不论本协议是否变更、解除或终止，本条款将持续有效。The Parties agree that this Section shall survive changes to, and rescission or termination of, this Agreement.4.陈述和保证Representations and Warranties4.1甲方陈述和保证如下：Party A hereby represents and warrants as follows:4.1.1甲方是按照中国法律合法注册并有效存续的外商独资企业。Party A is a whollyforeignowned enterprise legally registered and validly existing in accordance with the laws of China.10秘密文件Strictly Confidential4.1.2甲方已采取必要的公司行为，获得必要的授权，并取得第三方和政府部门的同意及批准（若需）以签署和履行本协议；甲方对本协议的签署和履行并不违反法律法规的明确规定。Party A has taken all necessary corporate actions, obtained all necessary authorization and the consent and approval from third partiesand government agencies (if any) for the execution and performance of this Agreement. Party A’s execution and performance of thisAgreement do not violate any explicit requirements under any law or regulation binding on Party A.4.1.3本协议构成对其合法、有效、有约束力并依本协议之条款对其强制执行的义务。This Agreement constitutes Party A's legal, valid and binding obligations, enforceable in accordance with its terms.4.2乙方陈述和保证如下：Party B hereby represents and warrants as follows:4.2.1乙方是按照中国法律合法登记且有效存续的有限责任公司，乙方根据政府部门的批准和许可从事手机视频技术开发、内容制作和产业化市场推广的经营。Party B is a limited company legally registered and validly existing in accordance with the laws of China, engages in mobile videotechnology research, development, content creation, sale and related industrial promotion pursuant to governmental approvals andpermits;11秘密文件Strictly Confidential4.2.2乙方已采取必要的行为，获得必要的授权，并取得第三方和政府部门的同意及批准（若需）以签署和履行本协议；乙方对本协议的签署和履行并不违反法律法规的明确规定。Party B has taken all necessary actions, obtained all necessary authorization and the consent and approval from third parties andgovernment agencies (if any) for the execution and performance of this Agreement. Party B’s execution and performance of thisAgreement do not violate any explicit requirements under any law or regulation binding on Party B.4.2.3本协议构成对其合法、有效、有约束力并依本协议之条款对其强制执行的义务。This Agreement constitutes Party B's legal, valid and binding obligations, and shall be enforceable against it.5.生效和有效期Effectiveness and Term5.1本协议于文首标明的协议日期签署并同时生效。除非依本协议或双方其他协议的约定而提前终止，本协议有效期为20年，但甲、乙双方应自本协议签署后，每3个月对本协议的内容做一次审查，以决定是否需要根据当时的情况对本协议作出相应修改和补充。This Agreement is executed on the date first above written and shall take effect as of such date. Unless earlier terminated in accordance with theprovisions of this Agreement or relevant agreements separately executed between the Parties, the term of this Agreement shall be 20 years. Afterthe execution of this Agreement, both Parties shall review this Agreement every 3 months to determine whether to amend or supplement theprovisions in this Agreement based on the actual circumstances at that time.12秘密文件Strictly Confidential5.2协议期满前，经甲方书面确认，本协议可以延期。延期的期限由甲方决定，乙方必须无条件地同意该延期。The term of this Agreement may be extended if confirmed in writing by Party A prior to the expiration thereof. The extended term shall bedetermined by Party A, and Party B shall accept such extended term unconditionally.6.终止Termination6.1除非依据本协议续期，本协议于到期之日终止。Unless renewed in accordance with the relevant terms of this Agreement, this Agreement shall be terminated upon the date of expiration hereof.6.2本协议有效期内，除非甲方对乙方有重大过失或存在欺诈行为，乙方不得提前终止本协议。尽管如此，甲方可在任何时候通过提前30天向乙方发出书面通知的方式终止本协议。During the term of this Agreement, unless Party A commits gross negligence, or a fraudulent act, against Party B, Party B shall not terminate thisAgreement prior to its expiration date. Nevertheless, Party A shall have the right to terminate this Agreement upon giving 30 days' prior writtennotice to Party B at any time.6.3在本协议终止之后，双方在第3、7和8条项下的权利和义务将继续有效。The rights and obligations of the Parties under Articles 3, 7 and 8 shall survive the termination of this Agreement.13秘密文件Strictly Confidential7.适用法律和争议解决Governing Law and Resolution of Disputes7.1本协议的订立、效力、解释、履行、修改和终止以及争议的解决适用中国的法律。The execution, effectiveness, construction, performance, amendment and termination of this Agreement and the resolution of disputes hereundershall be governed by the laws of China.7.2因解释和履行本协议而发生的任何争议，本协议双方应首先通过友好协商的方式加以解决。如果在一方向其他方发出要求协商解决的书面通知后30天之内争议仍然得不到解决，则任何一方均可将有关争议提交给中国国际经济贸易仲裁委员会，由该会按照其仲裁规则仲裁解决。仲裁应在北京进行，使用之语言为中文。仲裁裁决是终局性的，对各方均有约束力。In the event of any dispute with respect to the construction and performance of this Agreement, the Parties shall first resolve the dispute throughfriendly negotiations. In the event the Parties fail to reach an agreement on the dispute within 30 days after either Party's request to the otherParties for resolution of the dispute through negotiations, either Party may submit the relevant dispute to the China International Economic andTrade Arbitration Commission for arbitration, in accordance with its Arbitration Rules. The arbitration shall be conducted in Beijing, and thelanguage used in arbitration shall be Chinese. The arbitration award shall be final and binding on all Parties.14秘密文件Strictly Confidential7.3因解释和履行本协议而发生任何争议或任何争议正在进行仲裁时，除争议的事项外，本协议双方仍应继续行使各自在本协议项下的其他权利并履行各自在本协议项下的其他义务。Upon the occurrence of any disputes arising from the construction and performance of this Agreement or during the pending arbitration of anydispute, except for the matters under dispute, the Parties to this Agreement shall continue to exercise their respective rights under this Agreementand perform their respective obligations under this Agreement.8.补偿Indemnification就甲方根据本协议向乙方提供的咨询和服务内容所产生或引起的针对甲方的诉讼、请求或其他要求而招致的任何损失、损害、责任或费用都应由乙方补偿给甲方，以使甲方不受损害，除非该损失、损害、责任或费用是因甲方的重大过失或故意而产生的。Party B shall indemnify and hold harmless Party A from any losses, injuries, obligations or expenses caused by any lawsuit, claims or other demandsagainst Party A arising from or caused by the consultations and services provided by Party A to Party B pursuant this Agreement, except where suchlosses, injuries, obligations or expenses arise from the gross negligence or willful misconduct of Party A.15秘密文件Strictly Confidential9.通知Notices9.1本协议项下要求或发出的所有通知和其他通信应通过专人递送、挂号邮寄、邮资预付或快递服务或传真的方式发到该方下列地址。每一通知还应再以电子邮件送达。该等通知视为有效送达的日期按如下方式确定：All notices and other communications required or permitted to be given pursuant to this Agreement shall be delivered personally or sent byregistered mail, postage prepaid, by a courier service or by facsimile transmission to the address of such Party set forth below. A confirmationcopy of each notice shall also be sent by email. The dates on which notices shall be deemed to have been effectively given shall be determined asfollows:9.1.1通知如果是以专人递送、快递服务或挂号邮寄、邮资预付发出的，则以于设定为通知的地址在接收或拒收之日为有效送达日。Notices given by personal delivery, by courier service or by registered mail, postage prepaid, shall be deemed effectively given on thedate of receipt or refusal at the address specified for notices.9.1.2通知如果是以传真发出的，则以成功传送之日为有效送达日（应以自动生成的传送确认信息为证）。Notices given by facsimile transmission shall be deemed effectively given on the date of successful transmission (as evidenced by anautomatically generated confirmation of transmission).16秘密文件Strictly Confidential9.2为通知的目的，双方地址如下：For the purpose of notices, the addresses of the Parties are as follows:甲方：中传天下信息科技（深圳）有限公司Party A: Zhongchuan Tianxia Information Technology (Shenzhen) Co., Ltd.地址：深圳市南山区高新中三道2号深圳软件园一期五栋401AAddress:401A, Building 5, Phase 1, Shenzhen Software Park, No.2 Gaoxin Zhongsan Road, Nanshan District, Shenzhen收件人：洪婷Attn: Hong Ting乙方：北京中传视讯科技有限公司Party B: Beijing Mobile Vision Technology Co., Ltd地址：北京市朝阳区光华路9号SOHO3QLAB32Address: LAB32, SOHO3Q, No 9, Guanghua Road, Chaoyang District, Beijing.收件人：宋雪松Attn.: Song Xuesong9.3任何一方可按本条规定随时给另一方发出通知来改变其接收通知的地址。Any Party may at any time change its address for notices by a notice delivered to the other Party in accordance with the terms hereof.17秘密文件Strictly Confidential10.协议的转让Assignment10.1乙方不得将其在本协议项下的权利与义务转让给第三方，除非事先征得甲方的书面同意。Without Party A's prior written consent, Party B shall not assign its rights and obligations under this Agreement to any third party.10.2乙方在此同意，甲方可以在其需要时向其他第三方转让其在本协议项下的权利和义务，并在该等转让发生时甲方仅需向乙方发出书面通知，并且无需再就该等转让征得乙方的同意。Party B agrees that Party A may assign its obligations and rights under this Agreement to any third party upon a prior written notice to Party Bbut without the consent of Party B.11.协议的分割性Severability如果本协议有任何一条或多条规定根据任何法律或法规在任何方面被裁定为无效、不合法或不可执行，本协议其余规定的有效性、合法性或可执行性不应因此在任何方面受到影响或损害。双方应通过诚意磋商，争取以法律许可以及双方期望的最大限度内有效的规定取代那些无效、不合法或不可执行的规定，而该等有效的规定所产生的经济效果应尽可能与那些无效、不合法或不能强制执行的规定所产生的经济效果相似。In the event that one or several of the provisions of this Agreement are found to be invalid, illegal or unenforceable in any aspect in accordance with anylaws or regulations, the validity, legality or enforceability of the remaining provisions of this Agreement shall not be affected or compromised in any aspect.The Parties shall strive in good faith to replace such invalid, illegal or unenforceable provisions with effective provisions that accomplish to the greatestextent permitted by law and the intentions of the Parties, and the economic effect of such effective provisions shall be as close as possible to the economiceffect of those invalid, illegal or unenforceable provisions.18秘密文件Strictly Confidential12.协议的修改、补充Amendments and Supplements双方可以书面协议方式对本协议作出修改和补充。经过双方签署的有关本协议的修改协议和补充协议是本协议组成部分，具有与本协议同等的法律效力。Any amendments and supplements to this Agreement shall be in writing. The amendment agreements and supplementary agreements that have beensigned by the Parties and that relate to this Agreement shall be an integral part of this Agreement and shall have the same legal validity as this Agreement.13.语言和副本Language and Counterparts本协议以中文和英文书就，一式二份，甲乙双方各持一份，具有同等效力；中英文版本如有冲突，应以中文版为准。This Agreement is written in both Chinese and English language in two copies, each Party having one copy with equal legal validity; in case there is anyconflict between the Chinese version and the English version, the Chinese version shall prevail.本页其余部分刻意留为空白The Remainder of this page is intentionally left blank19秘密文件Strictly Confidential有鉴于此，双方已使得经其授权的代表于文首所述日期签署了本独家业务合作协议并即生效，以昭信守。IN WITNESS WHEREOF, the Parties have caused their authorized representatives to execute this Exclusive Business Cooperation Agreement as of thedate first above written.甲方：中传天下信息科技（深圳）有限公司（盖章）Party A: Zhongchuan Tianxia Information Technology (Shenzhen) Co., Ltd.(Seal)签字：By: /s/ Hong Ting 姓名：洪婷Name: Hong Ting职务：总经理Title: General Manager20秘密文件Strictly Confidential有鉴于此，双方已使得经其授权的代表于文首所述日期签署了本独家业务合作协议并即生效，以昭信守。IN WITNESS WHEREOF, the Parties have caused their authorized representatives to execute this Exclusive Business Cooperation Agreement as of thedate first above written. 乙方：北京中传视讯科技有限公司（盖章）Party B: Beijing Mobile Vision Technology Co., Ltd. (Seal)签字：By: /s/ Song Xuesong 姓名：宋雪松Name: Song Xuesong职务：董事长Title: Chairman of the Board21秘密文件Strictly ConfidentialEX4.16 4 f20f2017ex416_luokung.htm EXCLUSIVE OPTION AGREEMENT BY AND AMONG ZHONGCHUAN TIANXIA INFORMATION TECHNOLOGY(SHENZHEN) CO., LTD., XUESONG SONG, WEILI CHEN, PING WANG, DONGLAI LIU, AND BEIJING MOBILE VISION TECHNOLOGY CO., LTD., DATEDAUGUST 31, 2015Exhibit 4.16独家购买权协议Exclusive Option Agreement本独家购买权协议 (下称“本协议”) 由以下各方于年月日在中华人民共和国（下称“中国”）北京签订：This Exclusive Option Agreement (this “Agreement”) is executed by and among the Parties below as of in Beijing, the People’s Republic of China (the“China” or “PRC”):甲方：中传天下信息科技（深圳）有限公司，一家依照中国法律设立和存在的外商独资企业，地址为深圳市南山区高新中三道2号深圳软件园一期五栋401A；Party A:Zhongchuan Tianxia Information Technology (Shenzhen) Co., Ltd., a whollyforeignowned enterprise organized and existing under the laws of China,with its address at 401A, Building 5, Phase 1, Shenzhen Software Park, No.2 Gaoxin Zhongsan Road, Nanshan District, Shenzhen.乙方：Party B:a)宋雪松Song Xuesong身份证号码:120112196809040417ID Card No.:120112196809040417住所：天津市河西区广东路中裕园33702Address:Zhongyu Yuan 33702, Guangdong Road, Hexi District, Tianjinb)陈蔚力Chen Weili身份证号码:120106197309240516ID Card No.:120106197309240516住所：广东省深圳市宝安区宝城上川路15号Address:Baocheng Shangchuan Road 15, Baoan District, Shenzhen, Guangdong1秘密文件Strictly Confidentialc)王平Wang Ping身份证号码:35020319691030401xID Card No.:35020319691030401x住所：广东省深圳市南山区高新南环路36号彩虹之岸12栋4AAddress:Caihong Zhi’an Building No.12 Suite 4A, Gaoxin Nanhuan Road 36, Nanshan District, Shenzhen, Guangdongd)刘东来Liu Donglai身份证号码:120107196810103912ID Card No.:120107196810103912住所：天津市和平区南京路诚基经贸中心1号楼2门1702号Address:No 1702, Door 2, Build 1, Chengji Economic and Trade Centre, Nanjing Road, Heping District, Tianjin.丙方：北京中传视讯科技有限公司，一家依照中国法律设立和存在的有限责任公司，地址为北京市朝阳区光华路9号SOHO3QLAB32，统一社会信用代码为9111010576215249XM；Party C:Beijing Mobile Vision Technology Co., Ltd., a limited company duly registered in China, with its address at LAB32, SOHO3Q, No 9, Guanghua Road,Chaoyang District, Beijing and its uniform social credit code of 9111010576215249XM.2秘密文件Strictly Confidential在本协议中，甲方、乙方和丙方以下各称“一方”，合称“各方”。In this Agreement, each of Party A, Party B and Party C shall be referred to as a “Party” respectively, and they shall be collectively referred to as the“Parties”.鉴于，乙方系丙方股东并合计持有丙方100%股权，乙方将按本协议之条款授予甲方购买全部或部分该股权的权利。Whereas, Party B are the shareholders of Party C and jointly hold 100% of the equity interest in Party C, and Party B are willing to grant to Party A the rightto acquire such equity interest, in whole or in part, on the terms herein.现各方协商一致，达成如下协议：Now therefore, upon mutual discussion and negotiation, the Parties have reached the following agreement:1.股权买卖Sale and Purchase of Equity Interest1.1授予权利Option Granted乙方在此不可撤销地授予甲方在中国法律允许的前提下，按照甲方自行决定的行使步骤，并按照本协议第1.3条所述的价格，随时一次或多次从乙方购买或指定一人或多人(“被指定人”)从乙方购买其目前和将来所持有的丙方的全部或部分股权（无论乙方出资额和/或持股比例将来是否发生变化）的一项不可撤销的专有权(“股权购买权”)。除甲方和被指定人外，任何第三人均不得享有股权购买权或其他与乙方股权有关的权利。丙方特此同意乙方向甲方授予股权购买权。本款及本协议所规定的“人”指个人、公司、合营企业、合伙、企业、信托或非公司组织。Party B hereby irrevocably grant Party A an irrevocable and exclusive right to purchase, or designate one or more persons (each, a “Designee”) topurchase the equity interests in Party C now and in the future held by Party B (regardless whether Party B’s capital contribution amount and/orpercentage of shareholding will be changed in the future) once or at multiple times at any time in part or in whole at Party A’s sole and absolutediscretion to the extent permitted by Chinese laws and at the price described in Section 1.3 herein (such right being the “Equity Interest PurchaseOption”). Except for Party A and the Designee(s), no other person shall be entitled to the Equity Interest Purchase Option or other rights withrespect to the equity interests of Party B. Party C hereby agrees to the grant by Party B of the Equity Interest Purchase Option to Party A. Theterm “person” as used herein shall refer to individuals, corporations, partnerships, partners, enterprises, trusts or noncorporate organizations.3秘密文件Strictly Confidential1.2行使步骤Steps for Exercise of Equity Interest Purchase Option甲方行使其股权购买权以符合中国法律和法规的规定为前提。甲方行使股权购买权时，应向乙方发出书面通知(“股权购买通知”)，股权购买通知应载明以下事项：(a)甲方关于行使股权购买权的决定；(b)甲方拟从乙方购买的股权份额(“被购买的股权”)；和(c)被购买的股权的买入日期。Subject to the provisions of the laws and regulations of China, Party A may exercise the Equity Interest Purchase Option by issuing a writtennotice to Party B (the “Equity Interest Purchase Option Notice”), specifying: (a) Party A’s decision to exercise the Equity Interest PurchaseOption; (b) the portion of equity interests to be purchased from Party B (the “Optioned Interests”); and (c) the date for purchasing the OptionedInterests.1.3股权买价Equity Interest Purchase Price被购买的股权的买价（“股权买价”）应是行权当时中国法律允许的最低价格。乙方收到该股权对价后，应当提供给丙方与该股权买价相同金额的借款，该借款的期限为20年，且为无息。乙方应当在该借款期限届满时就该借款放弃对丙方的债权。The purchase price of the Optioned Interests (the “Equity Interest Purchase Price”) shall be the lowest price permitted by the laws of China. Afterreceiving the Equity Interest Purchase Price, Party B shall make an interestfree loan equivalent to the amount of Equity Interest Purchase Price toParty C, of which term is 20 years. Each member of Party B shall give up his(her) creditor’s right when the loan term expires.4秘密文件Strictly Confidential1.4转让被购买股权Transfer of Optioned Interests甲方每次行使股权购买权时：For each exercise of the Equity Interest Purchase Option:1.4.1乙方应责成丙方及时召开股东会会议，在该会议上，应通过批准乙方向甲方和/或被指定人转让被购买的股权的决议；Party B shall cause Party C to promptly convene a shareholders meeting, at which a resolution shall be adopted approving Party B’stransfer of the Optioned Interests to Party A and/or the Designee(s);1.4.2乙方应就其向甲方和/或被指定人转让被购买股权取得丙方其他股东同意该转让并放弃优先购买权的书面声明。Party B shall obtain written statements from the other shareholder of Party C giving consent to the transfer of the equity interest to PartyA and/or the Designee(s) and waiving any right of first refusal related thereto.1.4.3乙方应与甲方和/或(在适用的情况下)被指定人按照本协议及股权购买通知的规定，为每次转让签订股权转让协议；Party B shall execute a share transfer contract with respect to each transfer with Party A and/or each Designee (whichever is applicable),in accordance with the provisions of this Agreement and the Equity Interest Purchase Option Notice regarding the Optioned Interests;5秘密文件Strictly Confidential1.4.4有关方应签署所有其他所需协议、协议或文件，取得全部所需的政府批准和同意，并采取所有所需行动，在不附带任何担保权益的情况下，将被购买的股权的有效所有权转移给甲方和/或被指定人并使甲方和/或被指定人成为被购买的股权的登记在册所有人。为本款及本协议的目的，“担保权益”包括担保、抵押、第三方权利或权益，任何购股权、收购权、优先购买权、抵销权、所有权扣留或其他担保安排等；但为了明确起见，不包括在本协议、乙方股权质押协议项下产生的任何担保权益。本款及本协议所规定的“乙方股权质押协议”指甲方、乙方和丙方于本协议签署之日签订的股权质押协议，根据股权质押协议，乙方为担保丙方能履行丙方与甲方签订的独家业务合作协议项下的义务，而向甲方质押其在丙方的全部乙方股权。The relevant Parties shall execute all other necessary contracts, agreements or documents, obtain all necessary government licenses andpermits and take all necessary actions to transfer valid ownership of the Optioned Interests to Party A and/or the Designee(s),unencumbered by any security interests, and cause Party A and/or the Designee(s) to become the registered owner(s) of the OptionedInterests. For the purpose of this Section and this Agreement, “security interests” shall include securities, mortgages, third party’s rightsor interests, any stock options, acquisition right, right of first refusal, right to offset, ownership retention or other security arrangements,but shall be deemed to exclude any security interest created by this Agreement and Party B’s Equity Interest Pledge Agreement. “PartyB’s Equity Interest Pledge Agreement” as used in this Section and this Agreement shall refer to the Equity Interest Pledge Agreementexecuted by and among Party A, Party B and Party C on the date of this Agreement, whereby Party B pledge all of their equity interests inParty C to Party A, in order to guarantee Party C’s performance of its obligations under the Exclusive Business Corporation Agreementexecuted by and between Party C and Party A.6秘密文件Strictly Confidential2.知识产权独家购买权Exclusive Option regarding the Intellectual Property Rights2.1本协议签订之日起，若乙方拟转让、出售或以其他方式处置（任一处置方式以下简称“转让”）其拥有或持有的全部或部分知识产权（以下称“知识产权”，定义见第2.4条），甲方有权独家购买该等知识产权。From the date hereof, if Party B proposes to transfer, sell or dispose of (each, a “transfer”) all or any part of the intellectual property rights ownedor held by Party B (“IPR”), Party A shall have exclusive option.2.2若乙方有意转让全部或部分知识产权，应事先向甲方发出书面通知(“转让通知”)，转让通知应载明以下事项：(a) 乙方关于转让知识产权的意向；(b) 乙方拟转让的知识产权清单(“拟转让知识产权”)及转让的价格和其他条件。转让通知视为乙方向甲方发出的一份要约，按照该要约，乙方同意按转让通知中指定的价格条件向甲方转让全部或部分拟转让知识产权。Prior to Party B proposes to transfer all or any part of its IPR, Party B shall give Party A a written notice (“Transfer Notice”), which shall specify (a)Party B’s intention to make the transfer; (b) the list of IPR to be transferred (“Offered IPR”) and the consideration and other conditions uponwhich the transfer is to be made. The Transfer Notice constitutes Party B’s offer given to Party A, pursuant to which, Party B agrees to transfer allor any part of its Offered IPR to Party A based on the same conditions described in the Transfer Notice.7秘密文件Strictly Confidential2.3甲方收到转让通知后，有权在30日内选择按照转让通知中列明的转让价格和条件购买拟转让知识产权。如果甲方行使其独家购买权，双方应于甲方收到转让通知后45日内签订有关的知识产权转让协议，乙方应办理法律规定的知识产权转让的批准和登记手续。Party A shall have an option for a period of 30 days from Party A’s receipt of the Transfer Notice to elect to purchase the Offered IPR at the sameprice and subject to the same conditions as described in the Transfer Notice. If Party A decides to exercise its exclusive option, the parties shallenter into relevant IPR transfer agreement within 45 days upon Party A’s receipt of the Transfer Notice and Party B is responsible to complete allrelated approvals and registrations formalities as prescribed by the PRC law.2.4本协议第2条所称“知识产权”指任何知识产权，包括但不限于著作权、专利权、专利申请权、商标、域名、软件、专有技术，并包括前述知识产权申请权利以及登记注册的权利，以及其他所有与前述知识产权有关的权利和权益。The “IPR” referred to in this Article 2 means any intellectual property rights, including, without limitations, copyrights, patents, patentapplications, trademarks, domain names, software and knowhow together with (a) all rights to apply for or register any of the foregoing and (b) allother rights and interests to any of the foregoing.8秘密文件Strictly Confidential3.承诺Covenants3.1有关丙方的承诺Covenants regarding Party C乙方（作为丙方的股东）和丙方在此承诺：Party B (as the shareholders of Party C) and Party C hereby covenant as follows:3.1.1未经甲方的事先书面同意，不以任何形式补充、更改或修改丙方公司章程文件，增加或减少其注册资本，或以其他方式改变其注册资本结构；Without the prior written consent of Party A, they shall not in any manner supplement, change or amend the articles of association andbylaws of Party C, increase or decrease its registered capital, or change its structure of registered capital in other manners;3.1.2按照良好的财务和商业标准及惯例，保持其公司的存续，审慎地及有效地经营其业务和处理事务；They shall maintain Party C’s corporate existence in accordance with good financial and business standards and practices by prudentlyand effectively operating its business and handling its affairs;3.1.3未经甲方的事先书面同意，不在本协议签署之日起的任何时间出售、转让、抵押或以其他方式处置丙方的任何资产、业务或收入的合法或受益权益，或允许在其上设置任何其他担保权益；Without the prior written consent of Party A, they shall not at any time following the date hereof, sell, transfer, mortgage or dispose of inany manner any assets of Party C or legal or beneficial interest in the business or revenues of Party C, or allow the encumbrance thereonof any security interest;3.1.4未经甲方的事先书面同意，不发生、继承、保证或容许存在任何债务，但(i)正常或日常业务过程中产生而不是通过借款方式产生的债务；和(ii)已向甲方披露和得到甲方书面同意的债务除外；Without the prior written consent of Party A, they shall not incur, inherit, guarantee or suffer the existence of any debt, except for (i)debts incurred in the ordinary course of business other than through loans; and (ii) debts disclosed to Party A for which Party A’swritten consent has been obtained;9秘密文件Strictly Confidential3.1.5一直在正常业务过程中经营所有业务，以保持丙方的资产价值，不进行任何足以影响其经营状况和资产价值的作为/不作为；They shall always operate all of Party C’s businesses during the ordinary course of business to maintain the asset value of Party C andrefrain from any action/omission that may affect Party C’s operating status and asset value;3.1.6未经甲方的事先书面同意，不得让丙方签订任何重大协议，但在正常业务过程中签订的协议除外(就本段而言，如果一份协议的价值超过【人民币10万元】，即被视为重大协议)；Without the prior written consent of Party A, they shall not cause Party C to execute any major contract, except the contracts in theordinary course of business (for purpose of this subsection, a contract with a value exceeding RMB 100,000 shall be deemed a majorcontract);3.1.7未经甲方的事先书面同意，丙方不得向任何人提供贷款或信贷；Without the prior written consent of Party A, they shall not cause Party C to provide any person with any loan or credit;3.1.8应甲方要求，向其提供所有关于丙方的营运和财务状况的资料；They shall provide Party A with information on Party C’s business operations and financial condition at Party A’s request;10秘密文件Strictly Confidential3.1.9如甲方提出要求，丙方应从甲方接受的保险公司处购买和持有有关其资产和业务的保险，该保险的金额和险种应与经营类似业务的公司一致；If requested by Party A, they shall procure and maintain insurance in respect of Party C’s assets and business from an insurance carrieracceptable to Party A, at an amount and type of coverage typical for companies that operate similar businesses;3.1.10未经甲方的事先书面同意，丙方不得与任何人合并或联合，或对任何人进行收购或投资；Without the prior written consent of Party A, they shall not cause or permit Party C to merge, consolidate with, acquire or invest in anyperson;3.1.11将发生的或可能发生的与丙方资产、业务或收入有关的诉讼、仲裁或行政程序立即通知甲方；They shall immediately notify Party A of the occurrence or possible occurrence of any litigation, arbitration or administrative proceedingsrelating to Party C’s assets, business or revenue;3.1.12为保持丙方对其全部资产的所有权，签署所有必要或适当的文件，采取所有必要或适当的行动和提出所有必要或适当的控告或对所有索偿进行必要和适当的抗辩；To maintain the ownership by Party C of all of its assets, they shall execute all necessary or appropriate documents, take all necessary orappropriate actions and file all necessary or appropriate complaints or raise necessary and appropriate defenses against all claims;11秘密文件Strictly Confidential3.1.13未经甲方事先书面同意，不得以任何形式派发股息予各股东，但一经甲方要求，丙方应立即将其所有可分配利润全部立即分配给其各股东；及Without the prior written consent of Party A, they shall ensure that Party C shall not in any manner distribute dividends to itsshareholders, provided that upon Party A’s written request, Party C shall immediately distribute all distributable profits to itsshareholders; and3.1.14根据甲方的要求，委任由其指定的任何人士出任丙方的董事和/或执行董事。At the request of Party A, they shall appoint any persons designated by Party A as the director and/or executive director of Party C.3.2乙方和丙方的承诺Covenants of Party B and Party C乙方承诺：Party B hereby covenant as follows:3.2.1未经甲方的事先书面同意，不出售、转让、抵押或以其他方式处置其拥有的丙方的股权的合法或受益权益，或允许在其上设置任何其他担保权益，但根据乙方签署的《股权质押协议》在该股权上设置的质押则除外；Without the prior written consent of Party A, Party B shall not sell, transfer, mortgage or dispose of in any other manner any legal orbeneficial interest in the equity interests in Party C held by Party B, or allow the encumbrance thereon of any security interest, except forthe pledge placed on these equity interests in accordance with Party B’s Equity Interest Pledge Agreement;12秘密文件Strictly Confidential3.2.2促使丙方股东会和/或执行董事不批准在未经甲方的事先书面同意的情况下，出售、转让、抵押或以其他方式处置任何乙方持有之丙方的股权的合法权益或受益权，或允许在其上设置任何其他担保权益，但批准根据乙方签署的《股权质押协议》在乙方股权上设置的质押则除外；Party B shall cause the shareholders’ meeting and/or the executive director of Party C not to approve the sale, transfer, mortgage ordisposition in any other manner of any legal or beneficial interest in the equity interests in Party C held by Party B, or allow theencumbrance thereon of any security interest, without the prior written consent of Party A, except for the pledge placed on these equityinterests in accordance with Party B’s Equity Interest Pledge Agreement;3.2.3未经甲方的事先书面同意的情况下，对于丙方与任何人合并或联合，或对任何人进行收购或投资，乙方将促成丙方股东会或执行董事不予批准；Party B shall cause the shareholders’ meeting or the executive director of Party C not to approve the merger or consolidation with anyperson, or the acquisition of or investment in any person, without the prior written consent of Party A;3.2.4将发生的或可能发生的任何关于其所拥有的股权的诉讼、仲裁或行政程序立即通知甲方；Party B shall immediately notify Party A of the occurrence or possible occurrence of any litigation, arbitration or administrativeproceedings relating to the equity interests in Party C held by Party B;13秘密文件Strictly Confidential3.2.5促使丙方股东会或执行董事表决赞成本协议规定的被购买的股权的转让并应甲方之要求采取其他任何行动；Party B shall cause the shareholders’ meeting or the executive director of Party C to vote their approval of the transfer of the OptionedInterests as set forth in this Agreement and to take any and all other actions that may be requested by Party A;3.2.6为保持其对股权的所有权，签署所有必要或适当的文件，采取所有必要或适当的行动和提出所有必要或适当的控告或对所有索偿进行必要和适当的抗辩；To the extent necessary to maintain Party B’s ownership in Party C, Party B shall execute all necessary or appropriate documents, take allnecessary or appropriate actions and file all necessary or appropriate complaints or raise necessary and appropriate defenses against allclaims;3.2.7应甲方的要求，委任由其指定的任何人士出任丙方的董事和/或执行董事；Party B shall appoint any designee of Party A as the director and/or executive director of Party C, at the request of Party A;3.2.8经甲方随时要求，应向其指定的代表在任何时间无条件地根据本协议的股权购买权立即转让其股权，并放弃其对其他现有股东进行上述股权转让所享有的优先购买权（如有的话）；和At the request of Party A at any time, Party B shall promptly and unconditionally transfer its equity interests in Party C to Party A’sDesignee(s) in accordance with the Equity Interest Purchase Option under this Agreement, and Party B hereby waives its right of firstrefusal (if any) to the share transfer by the other existing shareholder of Party C (if any); and14秘密文件Strictly Confidential3.2.9严格遵守本协议及各方共同或分别签订的其他协议的各项规定，切实履行该等协议项下的各项义务，并不进行任何足以影响该等协议的有效性和可执行性的作为/不作为。如果乙方对于本协议项下或乙方股权质押协议下或对甲方的授权委托书中的股权，还留存有任何权利，除非甲方书面指示，否则乙方仍不得行使该权利。Party B shall strictly abide by the provisions of this Agreement and other contracts jointly or separately executed by and among Party B,Party C and Party A, perform the obligations hereunder and thereunder, and refrain from any action/omission that may affect theeffectiveness and enforceability thereof. To the extent that Party B has any remaining rights with respect to the equity interests subject tothis Agreement hereunder or under Party B’s Equity Interest Pledge Agreement or under the Power of Attorney granted in favor of PartyA, Party B shall not exercise such rights except in accordance with the written instructions of Party A.4.陈述和保证Representations and Warranties乙方和丙方特此在本协议签署之日和每一个转让日向甲方共同及分别陈述和保证如下：Party B and Party C hereby represent and warrant to Party A, jointly and severally, as of the date of this Agreement and each date of transfer of theOptioned Interests, that:4.1其具有签订和交付本协议和其为一方的、根据本协议为每一次转让被购买的股权而签订的任何股权转让协议(各称为"转让协议")，并履行其在本协议和任何转让协议项下的义务的权力和能力。乙方和丙方同意在甲方行使购买权时，他们将签署与本协议条款一致的转让协议。本协议和其是一方的各转让协议一旦签署后，构成或将对其构成合法、有效及具有约束力的义务并可按照其条款对其强制执行；They have the authority to execute and deliver this Agreement and any share transfer contracts to which they are a party concerning theOptioned Interests to be transferred thereunder (each, a “Transfer Contracts”), and to perform their obligations under this Agreement and anyTransfer Contracts. Party B and Party C agree to enter into Transfer Contracts consistent with the terms of this Agreement upon Party A’s exerciseof the Equity Interest Purchase Option. This Agreement and the Transfer Contracts to which they are a party constitute or will constitute theirlegal, valid and binding obligations and shall be enforceable against them in accordance with the provisions thereof;15秘密文件Strictly Confidential4.2无论是本协议或任何转让协议的签署和交付还是其在本协议或任何转让协议项下的义务的履行均不会：(i)导致违反任何有关的中国法律；(ii)与丙方章程或其他组织文件相抵触；(iii)导致违反其是一方或对其有约束力的任何协议或文件，或构成其是一方或对其有约束力的任何协议或文件项下的违约；(iv)导致违反有关向任何一方颁发的任何许可或批准的授予和(或)继续有效的任何条件；或(v)导致向任何一方颁发的任何许可或批准中止或被撤销或附加条件；The execution and delivery of this Agreement or any Transfer Contracts and the obligations under this Agreement or any Transfer Contracts shallnot: (i) cause any violation of any applicable laws of China; (ii) be inconsistent with the articles of association, bylaws or other organizationaldocuments of Party C; (iii) cause the violation of any contracts or instruments to which they are a party or which are binding on them, orconstitute any breach under any contracts or instruments to which they are a party or which are binding on them; (iv) cause any violation of anycondition for the grant and/or continued effectiveness of any licenses or permits issued to either of them; or (v) cause the suspension orrevocation of or imposition of additional conditions to any licenses or permits issued to either of them;4.3乙方对其在丙方拥有的股权拥有良好和可出售的所有权，除乙方签署的《股权质押协议》外，乙方在上述股权上没有设置任何担保权益；Party B have a good and merchantable title to the equity interests in Party C they hold. Except for Party B’s Equity Interest Pledge Agreement,Party B have not placed any security interest on such equity interests;16秘密文件Strictly Confidential4.4目前没有悬而未决的或构成威胁的与丙方的股权、丙方资产有关的或与丙方有关的诉讼、仲裁或行政程序。There are no pending or threatened litigation, arbitration or administrative proceedings relating to the equity interests in Party C, assets of Party Cor Party C.5.生效日Effective Date5.1本协议于各方签署本协议之日生效，有效期10年，经甲方选择可再延长10年。This Agreement shall become effective upon the date hereof, and remain effective for a term of 10 years, and may be renewed for an additional 10years at Party A’s election.5.2若丙方股东发生变化，由新股东签署此协议，在此协议签署之日，原协议自动视为无效。In the event of a change in the shareholders of Party C, the new shareholder should sign this agreement and the original agreement willautomatically be deemed invalid on the date of signing of this agreement.17秘密文件Strictly Confidential6.适用法律与争议解决Governing Law and Resolution of Disputes6.1适用法律Governing law本协议的订立、效力、解释、履行、修改和终止以及争议解决均适用中国正式公布并可公开得到的法律。对中国正式公布并可公开得到的法律没有规定的事项，将适用国际法律原则和惯例。The execution, effectiveness, construction, performance, amendment and termination of this Agreement and the resolution of disputes hereundershall be governed by the formally published and publicly available laws of China. Matters not covered by formally published and publiclyavailable laws of China shall be governed by international legal principles and practices.6.2争议的解决方法Methods of Resolution of Disputes因解释和履行本协议而发生的任何争议，本协议各方应首先通过友好协商的方式加以解决。如果在一方向其他方发出要求协商解决的书面通知后30天之内争议仍然得不到解决，则任何一方均可将有关争议提交给中国国际经济贸易仲裁委员会，由该会按照其届时有效的仲裁规则仲裁解决。仲裁应在北京进行，使用之语言为中文。仲裁裁决是终局性的，对各方均有约束力。In the event of any dispute with respect to the construction and performance of this Agreement, the Parties shall first resolve the dispute throughfriendly negotiations. In the event the Parties fail to reach an agreement on the dispute within 30 days after either Party’s request to the otherParties for resolution of the dispute through negotiations, either Party may submit the relevant dispute to the China International Economic andTrade Arbitration Commission for arbitration, in accordance with its then effective arbitration rules. The arbitration shall be conducted in Beijing,and the language used in arbitration shall be Chinese. The arbitration award shall be final and binding on all Parties.18秘密文件Strictly Confidential7.税款、费用Taxes and Fees每一方应承担根据中国法律因准备和签署本协议和各转让协议以及完成本协议和各转让协议拟定的交易而由该方发生的或对其征收的任何和全部的转让和注册的税、花费和费用。Each Party shall pay any and all transfer and registration tax, expenses and fees incurred thereby or levied thereon in accordance with the laws of China inconnection with the preparation and execution of this Agreement and the Transfer Contracts, as well as the consummation of the transactionscontemplated under this Agreement and the Transfer Contracts.8.通知Notices8.1本协议项下要求或发出的所有通知和其他通信应通过专人递送、挂号邮寄、邮资预付或商业快递服务或传真的方式发到该方下列地址。每一通知还应再以电子邮件送达。该等通知视为有效送达的日期按如下方式确定：All notices and other communications required or permitted to be given pursuant to this Agreement shall be delivered personally or sent byregistered mail, postage prepaid, by a commercial courier service or by facsimile transmission to the address of such Party set forth below. Aconfirmation copy of each notice shall also be sent by email. The dates on which notices shall be deemed to have been effectively given shall bedetermined as follows:8.1.1通知如果是以专人递送、快递服务或挂号邮寄、邮资预付发出的，则以于设定为通知的地址在接收或拒收之日为有效送达日。Notices given by personal delivery, by courier service or by registered mail, postage prepaid, shall be deemed effectively given on thedate of receipt or refusal at the address specified for notices.19秘密文件Strictly Confidential8.1.2通知如果是以传真发出的，则以成功传送之日为有效送达日（应以自动生成的传送确认信息为证）。Notices given by facsimile transmission shall be deemed effectively given on the date of successful transmission (as evidenced by anautomatically generated confirmation of transmission).8.2为通知的目的，各方地址如下：For the purpose of notices, the addresses of the Parties are as follows:甲方：中传天下信息科技（深圳）有限公司Party A:Zhongchuan Tianxia Information Technology (Shenzhen) Co., Ltd.地址：深圳市南山区高新中三道2号深圳软件园一期五栋401AAddress:401A, Building 5, Phase 1, Shenzhen Software Park, No.2 Gaoxin Zhongsan Road, Nanshan District, Shenzhen.收件人：洪婷Attn:Hong Ting乙方：Party B: 宋雪松Song Xuesong住所：天津市河西区广东路中裕园33702Address:Zhongyu Yuan 33702, Guangdong Road, Hexi District, Tianjin20秘密文件Strictly Confidential陈蔚力Chen Weili住所：广东省深圳市宝安区宝城上川路15号Address:Baocheng Shangchuan Road 15, Baoan District, Shenzhen, Guangdong王平Wang Ping住所：广东省深圳市南山区高新南环路36号彩虹之岸12栋4AAddress:Caihong Zhi’an Building No.12 Suite 4A, Gaoxin Nanhuan Road 36, Nanshan District, Shenzhen, Guangdong刘东来Liu Donglai住所：天津市和平区南京路诚基经贸中心1号楼2门1702号Address:No 1702, Door 2, Build 1, Chengji Economic and Trade Centre, Nanjing Road, Heping District, Tianjin.丙方：北京中传视讯科技有限公司Party C:Beijing Mobile Vision Technology Co., Ltd.地址：北京市朝阳区光华路9号SOHO3QLAB32Address: LAB32, SOHO3Q, No 9, Guanghua Road, Chaoyang District, Beijing .收件人：宋雪松Attn: Song Xuesong8.3任何一方可按本条规定随时给其他方发出通知来改变其接收通知的地址。Any Party may at any time change its address for notices by a notice delivered to the other Parties in accordance with the terms hereof.21秘密文件Strictly Confidential9.保密责任Confidentiality各方承认及确定彼此就有关本协议而交换的任何口头或书面资料均属机密资料。各方应当对所有该等资料予以保密，而在未得其他方书面同意前，不得向任何第三者披露任何有关资料，惟下列情况除外：(a)公众人士知悉或将会知悉该等资料(并非由接受资料之一方擅自向公众披露)；(b)适用法律法规或股票交易的规则或规例所需披露之资料；或(c)由任何一方就本协议所述交易而需向其法律或财务顾问披露之资料而该法律或财务顾问亦需遵守与本条款相类似之保密责任。如任何一方工作人员或聘请机构的泄密均视为该方的泄密，需依本协议承担违约责任。无论本协议以任何理由终止，本条款仍然生效。The Parties acknowledge that any oral or written information exchanged among them with respect to this Agreement is confidential information. Each Partyshall maintain the confidentiality of all such information, and without obtaining the written consent of other Parties, it shall not disclose any relevantinformation to any third parties, except in the following circumstances: (a) such information is or will be in the public domain (provided that this is not theresult of a public disclosure by the receiving party); (b) information disclosed as required by applicable laws or rules or regulations of any stock exchange;or (c) information required to be disclosed by any Party to its legal counsel or financial advisor regarding the transaction contemplated hereunder, and suchlegal counsel or financial advisor are also bound by confidentiality duties similar to the duties in this section. Disclosure of any confidential information bythe staff members or agency hired by any Party shall be deemed disclosure of such confidential information by such Party, which Party shall be held liablefor breach of this Agreement. This Section shall survive the termination of this Agreement for any reason.22秘密文件Strictly Confidential10.进一步保证Further Warranties各方同意迅速签署为执行本协议的各项规定和目的而合理需要的或对其有利的文件，以及为执行本协议的各项规定和目的而采取合理需要的或对其有利的进一步行动。The Parties agree to promptly execute documents that are reasonably required for or are conducive to the implementation of the provisions and purposes ofthis Agreement and take further actions that are reasonably required for or are conducive to the implementation of the provisions and purposes of thisAgreement.11.其他Miscellaneous11.1修订、修改与补充Amendment, change and supplement对本协议作出修订、修改与补充，必须经每一方签署书面协议。Any amendment, change and supplement to this Agreement shall require the execution of a written agreement by all of the Parties.11.2完整协议Entire agreement除了在本协议签署后所作出的书面修订、补充或修改以外，本协议构成本协议各方就本协议标的物所达成的完整协议，取代在此之前就本协议标的物所达成的所有口头或书面的协商、陈述和协议。 Except for the amendments, supplements or changes in writing executed after theexecution of this Agreement, this Agreement shall constitute the entire agreement reached by and among the Parties hereto with respect to thesubject matter hereof, and shall supercede all prior oral and written consultations, representations and contracts reached with respect to thesubject matter of this Agreement.23秘密文件Strictly Confidential11.3标题Headings本协议的标题仅为方便阅读而设，不应被用来解释、说明或在其他方面影响本协议各项规定的含义。The headings of this Agreement are for convenience only, and shall not be used to interpret, explain or otherwise affect the meanings of theprovisions of this Agreement.11.4语言Language本协议以中文和英文书就，一式八份，乙方共计六名股东以及甲方、丙方各持一份，具有同等效力；中英文版本如有冲突，应以中文版为准。This Agreement is written in both Chinese and English language in eight copies, the 6 shareholders of Party B, Party A and Party C having onecopy with equal legal validity respectively; in case there is any conflict between the Chinese version and the English version, the Chinese versionshall prevail.11.5可分割性Severability如果本协议有任何一条或多条规定根据任何法律或法规在任何方面被裁定为无效、不合法或不可执行，本协议其余规定的有效性、合法性或可执行性不应因此在任何方面受到影响或损害。各方应通过诚意磋商，争取以法律许可以及各方期望的最大限度内有效的规定取代那些无效、不合法或不可执行的规定，而该等有效的规定所产生的经济效果应尽可能与那些无效、不合法或不能强制执行的规定所产生的经济效果相似。In the event that one or several of the provisions of this Agreement are found to be invalid, illegal or unenforceable in any aspect in accordancewith any laws or regulations, the validity, legality or enforceability of the remaining provisions of this Agreement shall not be affected orcompromised in any respect. The Parties shall strive in good faith to replace such invalid, illegal or unenforceable provisions with effectiveprovisions that accomplish to the greatest extent permitted by law and the intentions of the Parties, and the economic effect of such effectiveprovisions shall be as close as possible to the economic effect of those invalid, illegal or unenforceable provisions.24秘密文件Strictly Confidential11.6继任者Successors本协议对各方各自的继任者和各方所允许的受让方应具有约束力并对其有利。This Agreement shall be binding on and shall inure to the interest of the respective successors of the Parties and the permitted assigns of suchParties.11.7继续有效Survival11.7.1协议期满或提前终止前因本协议而发生的或到期的任何义务在本协议期满或提前终止后继续有效。Any obligations that occur or that are due as a result of this Agreement upon the expiration or early termination of this Agreement shallsurvive the expiration or early termination thereof.11.7.2本协议第5、6、9条和本第11.7条的规定在本协议终止后继续有效。The provisions of Articles 5, 6, 9 and this Section 11.7 shall survive the termination of this Agreement.25秘密文件Strictly Confidential11.8弃权Waivers任何一方可以对本协议的条款和条件作出弃权，但必须经书面作出并经各方签字。一方在某种情况下就其他方的违约所作的弃权不应被视为该方在其他情况下就类似的违约已经对其他方作出弃权。Any Party may waive the terms and conditions of this Agreement, provided that such a waiver must be provided in writing and shall require thesignatures of the Parties. No waiver by any Party in certain circumstances with respect to a breach by other Parties shall operate as a waiver bysuch a Party with respect to any similar breach in other circumstances.本页其余部分刻意留为空白The Remainder of this page is intentionally left blank26秘密文件Strictly Confidential有鉴于此，各方已自行或使得其各自授权代表于文首所载日期签署本独家购买权协议。IN WITNESS WHEREOF, the Parties have executed, or caused their respective duly authorized representatives to execute, this Exclusive Option Agreement as ofthe date first above written.甲方：中传天下信息科技（深圳）有限公司（盖章）Party A: Zhongchuan Tianxia Information Technology (Shenzhen) Co., Ltd. (Seal)签字：By:/s/ Hong Ting姓名：洪婷Name: Hong Ting职务：总经理Title: General Manager秘密文件 Strictly Confidential有鉴于此，各方已自行或使得其各自授权代表于文首所载日期签署本独家购买权协议。IN WITNESS WHEREOF, the Parties have executed, or caused their respective duly authorized representatives to execute, this Exclusive Option Agreement as ofthe date first above written.乙方：Party B:宋雪松Song Xuesong签字：By:/s/ Song Xuesong秘密文件 Strictly Confidential有鉴于此，各方已自行或使得其各自授权代表于文首所载日期签署本独家购买权协议。IN WITNESS WHEREOF, the Parties have executed, or caused their respective duly authorized representatives to execute, this Exclusive Option Agreement as ofthe date first above written.乙方：Party B:陈蔚力Chen Weili签字：By:/s/ Chen Weili秘密文件 Strictly Confidential有鉴于此，各方已自行或使得其各自授权代表于文首所载日期签署本独家购买权协议。IN WITNESS WHEREOF, the Parties have executed, or caused their respective duly authorized representatives to execute, this Exclusive Option Agreement as ofthe date first above written.乙方：Party B:王平Wang Ping签字：By:/s/ Wang Ping秘密文件 Strictly Confidential有鉴于此，各方已自行或使得其各自授权代表于文首所载日期签署本独家购买权协议。IN WITNESS WHEREOF, the Parties have executed, or caused their respective duly authorized representatives to execute, this Exclusive Option Agreement as ofthe date first above written.乙方：Party B:刘东来Liu Donglai签字：By:/s/ Liu Donglai秘密文件 Strictly Confidential有鉴于此，各方已自行或使得其各自授权代表于文首所载日期签署本独家购买权协议。IN WITNESS WHEREOF, the Parties have executed, or caused their respective duly authorized representatives to execute, this Exclusive Option Agreement as ofthe date first above written.丙方：北京中传视讯科技有限公司（盖章）Party B: Beijing Mobile Vision Technology Co., Ltd. (Seal)签字：By:/s/ Song Xuesong姓名：宋雪松Name:Song Xuesong职务：董事长Title:Chairman of the Board秘密文件 Strictly ConfidentialEX4.17 5 f20f2017ex417_luokung.htm EQUITY INTEREST PLEDGE AGREEMENT BY AND AMONG ZHONGCHUAN TIANXIA INFORMATION TECHNOLOGY(SHENZHEN) CO., LTD., XUESONG SONG, WEILI CHEN, PING WANG, DONGLAI LIU, AND BEIJING MOBILE VISION TECHNOLOGY CO., LTD., DATEDAUGUST 31, 2015Exhibit 4.17股权质押协议Equity Interest Pledge Agreement本股权质押协议（下称"本协议”）由下列各方于年月日在中华人民共和国（下称“中国”）北京签订：This Equity Interest Pledge Agreement (this "Agreement") has been executed by and among the following parties on in Beijing, the People’sRepublic of China (the “China” or “PRC”):甲方：中传天下信息科技（深圳）有限公司（下称“质权人”）Party A: Zhongchuan Tianxia Information Technology (Beijing) Co., Ltd. (“Pledgee”)地址：深圳市南山区高新中三道2号深圳软件园一期五栋401AAddress: 401A, Building 5, Phase 1, Shenzhen Software Park, No.2 Gaoxin Zhongsan Road, Nanshan District, Shenzhen统一社会信用代码： 91440300565701058RUniform Social Credit Code: 91440300565701058R乙方(下称“出质人”)：Party B ( “Pledgors”):a)宋雪松Song Xuesong身份证号码:ID Card No.:b)陈蔚力Chen Weili身份证号码:ID Card No.:1秘密文件 Strictly Confidentialc)王平Wang Ping身份证号码:ID Card No.:d)刘东来Liu Donglai身份证号码:ID Card No.:丙方：北京中传视讯科技有限公司Party C: Beijing Mobile Vision Technology Co., Ltd.地址：北京市朝阳区光华路9号SOHO3QLAB32Address: LAB32, SOHO3Q, No 9, Guanghua Road, Chaoyang District, Beijing统一社会信用代码：9111010576215249XMUniform Social Credit Code: 9111010576215249XM在本协议中，质权人、出质人和丙方以下各称“一方”，合称“各方”。In this Agreement, each of Pledgee, Pledgors and Party C shall be referred to as a "Party" respectively, and they shall be collectively referred to as the"Parties".鉴于：Whereas:1．出质人全部为中国境内居民自然人，共同持有丙方100%的股权。丙方是一家在中国注册成立的、主要从事手机视频技术研发、内容制作和产业化市场推广的有限责任公司。丙方有意在此确认出质人和质权人在本协议下的权利和义务并提供必要的协助登记该质权；All of the Pledgors are natural persons resided in PRC, and collectively hold 100% of the equity interest in Party C. Party C is a limited company registered inChina, mainly engaging in mobile video frequency technology research, development, content creation, sale and related industrialization promotion. Party Cacknowledges the respective rights and obligations of Pledgors and Pledgee under this Agreement, and intends to provide any necessary assistance inregistering the Pledge;2．质权人是一家在中国注册的外商独资企业。质权人与丙方于年月日签订了独家业务合作协议；Pledgee is a whollyforeignowned enterprise registered in China. Pledgee and Party C have executed an Exclusive Business Cooperation Agreement as of [*],[*];3．为了保证丙方全面履行独家业务合作协议项下的义务，出质人以其拥有的全部丙方股权向质权人做出质押担保。To ensure that Party C fully performs its obligations under the Exclusive Business Cooperation Agreement, Pledgors hereby pledge to the Pledgee all of theequity interests they hold in Party C.为了履行业务合作协议的条款，各方商定按照以下条款签订本协议。To perform the provisions of the Business Cooperation Agreement, the Parties have mutually agreed to execute this Agreement upon the following terms.2秘密文件 Strictly Confidential1.定义Definitions除非本协议另有规定，下列词语含义为：Unless otherwise provided herein, the terms below shall have the following meanings:1.1质权：指出质人根据本协议第2条给予质权人的担保物权，即指质权人所享有的，以出质人质押给质权人的股权折价或拍卖、变卖该股权的价款优先受偿的权利。Pledge: shall refer to the security interest granted by Pledgors to Pledgee pursuant to Article 2 of this Agreement, i.e., the right of Pledgee to becompensated on a preferential basis with the conversion, auction or sales price of the Equity Interest.1.2股权：指出质人现在和将来（通过增资和/或转股）合法持有的其在丙方的全部股权权益。Equity Interest: shall refer to all of the equity interest in Party C lawfully, held now and to be held (through capital increase and/or equity transfer)hereafter by Pledgors.1.3质押期限：指本协议第3条规定的期间。Term of Pledge: shall refer to the term set forth in Article 3 of this Agreement.1.4业务合作协议：指丙方与质权人于本协议日签订的独家业务合作协议。Business Cooperation Agreement: shall refer to the Exclusive Business Cooperation Agreement executed by and between Party C and Pledgee on thedate of this Agreement.1.5违约事件：指本协议第7条所列任何情况。Event of Default: shall refer to any of the circumstances set forth in Article 7 of this Agreement.1.6违约通知：指质权人根据本协议发出的宣布违约事件的通知。Notice of Default: shall refer to the notice issued by Pledgee in accordance with this Agreement declaring an Event of Default.3秘密文件 Strictly Confidential2.质权The Pledge作为丙方按时和全额支付业务合作协议项下质权人应得的任何或全部的款项，包括但不限于业务合作协议中规定的咨询和服务费的担保（无论该等费用的到期应付是由于到期日的到来、提前收款的要求或其它原因），以及丙方充分履行其在业务合作协议项下其他所有义务（丙方按时和全额支付业务合作协议项下甲方应得的任何或全部的款项及丙方在业务合作协议项下其他所有义务，以下统称为“被担保债务”）的担保，出质人特此将其现有或将拥有的丙方的全部股权权益质押给质权人。As collateral security for the timely and complete payment and performance when due (whether at stated maturity, by acceleration or otherwise) of any or all ofthe payments due (the “all payments in pledge”) by Party C, including without limitation the consulting and services fees payable to the Pledgee under theBusiness Cooperation Agreement, Pledgors hereby pledge to Pledgee a first security interest in all of Pledgors’ right, title and interest, whether now owned orhereafter acquired by Pledgors, in the Equity Interest of Party C.3.质押期限Term of Pledge3.1本质权自本协议项下的股权出质在相应的工商行政管理机关登记之日起生效，质权有效期持续到业务合作协议下所有丙方欠付质权人的款项结清为止。出质人和丙方应（一）自本协议签署之日起3个工作日内，将本协议的质权登记在丙方股东名册上，并（二）自本协议签署之日起10个工作日内向相应的工商行政管理机关申请登记本协议项下的质权。各方共同确认，为办理股权质押工商登记手续，各方及丙方其他股东应按照丙方所在地工商行政管理部门要求的形式签署、真实反映本协议项下质权信息的《股权质押合同》（以下简称“工商登记质押合同”）提交给工商管理机关，工商登记质押合同中未约定事项，仍以本协议约定为准。出质人和丙方应当按照中国法律法规和有关工商行政管理机关的各项要求，提交所有必要的文件并办理所有必要手续，保证质权在递交申请后尽快获得登记。如果出质人持有的丙方注册资本数额增加（不管是通过直接认缴丙方的增资还是从其他股东处受让股权），各方一致同意将采取一切必要的行动和签署一切必要的文件以按照登记机关的要求完成质权的变更登记，以确保本协议项下的质权的持续有效。The Pledge shall become effective on such date when the pledge of the Equity Interest contemplated herein has been registered’ with relevantadministration for industry and commerce (the “AIC”). The Pledge shall be continuously valid until all payments due under the Business CooperationAgreement have been fulfilled by Party C. Pledgors and Party C shall (1) register the Pledge in the shareholders' register of Party C within 3 businessdays following the execution of this Agreement, and (2) submit an application to the AIC for the registration of the Pledge of the Equity Interestcontemplated herein within 10 business days following the execution of this Agreement. The parties covenant that for the purpose of registration of thePledge, the parties hereto and all other shareholders of Party C shall submit to the AIC the Equity Interest Pledge Contract in the form required by theAIC at the location of Party C which shall truly reflect the information of the Pledge hereunder (the “AIC Pledge Contract”). For matters not specified inthe AIC Pledge Contract, the parties shall be bound by the provisions of this Agreement. Pledgors and Party C shall submit all necessary documentsand complete all necessary procedures, as required by the PRC laws and regulations and the relevant AIC, to ensure that the Pledge of the EquityInterest shall be registered with the AIC as soon as possible after filing. In the event that the amount of registered capital held by Pledgors is increased(either by subscribing increased registered capital from Party C or acquiring equity interest from other shareholders), the Parties hereto agree that theyshall take any necessary action and execute any necessary document to complete the registration of change of Pledge according to the requirement ofAIC so that the Pledge in this Agreement remains effective.4秘密文件 Strictly Confidential3.2质押期限内，如丙方未按业务合作协议交付咨询服务费等费用，质权人有权但无义务按本协议的规定处分质权。During the Term of Pledge, in the event Party C fails to pay the exclusive consulting or service fees in accordance with the Business CooperationAgreement, Pledgee shall have the right, but not the obligation, to dispose of the Pledge in accordance with the provisions of this Agreement.4.质权凭证的保管Custody of Records for Equity Interest subject to Pledge4.1在本协议规定的质押期限内，出质人应将其在丙方的股权出资证明书及记载质权的股东名册交付质权人保管。出质人应在本协议签订之日起一周内将上述股权出资证明书及股东名册交付给质权人。质权人将在本协议规定的全部质押期间一直保管这些项目。During the Term of Pledge set forth in this Agreement, Pledgors shall deliver to Pledgee's custody the capital contribution certificate for the EquityInterest and the shareholders' register containing the Pledge within one week from the execution of this Agreement. Pledgee shall have custody of suchitems during the entire Term of Pledge set forth in this Agreement.4.2在质押期限内，股权所产生的红利应当无条件归质权人所有。Dividends generated by the Equity Interest shall be unconditionally owned by the Pledgee during the Term of Pledge.5秘密文件 Strictly Confidential5.出质人的声明和保证Representations and Warranties of Pledgors5.1出质人是股权唯一的合法所有人。Pledgors are the sole legal and beneficial owners of the Equity Interest.5.2质权人有权以本协议规定的方式处分并转让股权。Pledgee shall have the right to dispose of and transfer the Equity Interest in accordance with the provisions set forth in this Agreement.5.3除本质权之外，出质人未在股权上设置任何其他质押权利或其他担保权益。Except for the Pledge, Pledgors have not placed any security interest or other encumbrance on the Equity Interest.6.出质人的承诺和确认Covenants and Further Agreements of Pledgors6.1在本协议存续期间，所有出质人向质权人承诺，出质人将：All of the Pledgors hereby covenant to the Pledgee, that during the term of this Agreement, Pledgors shall:6.1.1除履行由出质人与质权人、丙方于本协议签署日签订的《独家购买权合同》外，未经质权人事先书面同意，不得转让股权，不得在股权上设立或允许存在任何担保或其他债务负担；not transfer the Equity Interest, place or permit the existence of any security interest or other encumbrance on the Equity Interest, without theprior written consent of Pledgee, except for the performance of the Exclusive Option Agreement executed by Pledgors, the Pledgee and Party Con the execution date of this Agreement;6秘密文件 Strictly Confidential6.1.2遵守并执行所有有关权利质押的法律、法规的规定，在收到有关主管机关就质权发出或制定的通知、指令或建议时，于五日内向质权人出示上述通知、指令或建议，同时遵守上述通知、指令或建议，或按照质权人的合理要求或经质权人同意就上述事宜提出反对意见和陈述；comply with the provisions of all laws and regulations applicable to the pledge of rights, and within 5 days of receipt of any notice, order orrecommendation issued or prepared by relevant competent authorities regarding the Pledge, shall present the aforementioned notice, order orrecommendation to Pledgee, and shall comply with the aforementioned notice, order or recommendation or submit objections andrepresentations with respect to the aforementioned matters upon Pledgee's reasonable request or upon consent of Pledgee;6.1.3将任何可能导致对出质人股权或其任何部分的权利产生影响的事件或收到的通知，以及可能改变出质人在本协议中的任何保证、义务或对出质人履行其在本协议中义务可能产生影响的任何事件或收到的通知及时通知质权人。promptly notify Pledgee of any event or notice received by Pledgors that may have an impact on Pledgee's rights to the Equity Interest or anyportion thereof, as well as any event or notice received by Pledgors that may have an impact on any guarantees and other obligations ofPledgors arising out of this Agreement.6.2出质人同意，质权人按本协议条款取得的对质权享有的权利，不应受到出质人或出质人的继承人或出质人之委托人或任何其他人通过法律程序的中断或妨害。Pledgors agree that the rights acquired by Pledgee in accordance with this Agreement with respect to the Pledge shall not be interrupted or harmed byPledgors or any heirs or representatives of Pledgors or any other persons through any legal proceedings.7秘密文件 Strictly Confidential6.3出质人向质权人保证，为保护或完善本协议对偿付业务合作协议项下被担保债务的担保，出质人将诚实签署、并促使其他与质权有利害关系的当事人签署质权人所要求的所有的权利证书、契约和/或履行并促使其他有利害关系的当事人履行质权人所要求的行为，并为本协议赋予质权人之权利、授权的行使提供便利，与质权人或其指定的人(自然人/法人)签署所有的有关股权所有权的文件，并在合理期间内向质权人提供其认为需要的所有的有关质权的通知、命令及决定。To protect or perfect the security interest granted by this Agreement for payment of all payment in pledge under the Business Cooperation Agreement,Pledgors hereby undertake to execute in good faith and to cause other parties who have an interest in the Pledge to execute all certificates, agreements,deeds and/or covenants required by Pledgee. Pledgors also undertake to perform and to cause other parties who have an interest in the Pledge toperform actions required by Pledgee, to facilitate the exercise by Pledgee of its rights and authority granted thereto by this Agreement, and to enter intoall relevant documents regarding ownership of Equity Interest with Pledgee or designee(s) of Pledgee (natural persons/legal persons). Pledgorsundertake to provide Pledgee within a reasonable time with all notices, orders and decisions regarding the Pledge that are required by Pledgee.6.4出质人向质权人保证，出质人将遵守、履行本协议项下所有的保证、承诺、协议、陈述及条件。如出质人不履行或不完全履行其保证、承诺、协议、陈述及条件，出质人应赔偿质权人由此遭受的一切损失。Pledgors hereby undertake to comply with and perform all guarantees, promises, agreements, representations and conditions under this Agreement. Inthe event of failure the whole or partial performance of its guarantees, promises, agreements, representations and conditions, Pledgors shall indemnifyPledgee for all losses resulting therefrom.8秘密文件 Strictly Confidential7.违约事件Event of Default7.1下列事项均被视为违约事件：The following circumstances shall be deemed Event of Default:7.1.1丙方未能按期、完整履行任何业务合作协议项下责任，包括但不限于丙方未能按期足额支付业务合作协议项下的应付的被担保债务或有违反该协议其他义务的行为；Party C fails to fully and timely fulfill any liabilities under the Business Cooperation Agreement, including without limitation failure to pay infull any of the all payment in pledge payable under the Business Cooperation Agreement or breaches any other obligations of Party Cthereunder;7.1.2出质人或丙方实质违反本协议的任何条款；Pledgors or Party C have committed a material breach of any provisions of this Agreement;7.1.3除本协议第6.1.1条的约定外，出质人舍弃出质的股权或未获得质权人书面同意而擅自转让或意图转让出质的股权；和Except as expressly stipulated in Section 6.1.1, Pledgors transfers or purports to transfer or abandons the Equity Interest pledged or assignsthe Equity Interest pledged without the written consent of Pledgee; and7.1.4丙方的继承人或代管人只能履行部分或拒绝履行业务合作协议项下的支付责任。The successor or custodian of Party C is capable of only partially perform or refuses to perform the payment obligations under the BusinessCooperation Agreement.9秘密文件 Strictly Confidential7.2如知道或发现本第7.1条所述的任何事项或可能导致上述事项的事件已经发生，出质人应立即以书面形式通知质权人。Upon notice or discovery of the occurrence of any circumstances or event that may lead to the aforementioned circumstances described in Section 7.1,Pledgors shall immediately notify Pledgee in writing accordingly.7.3除非第7.1部分下的违约事件在质权人向出质人发出要求其修补此违约行为通知后的二十（20）天之内已经按质权人要求获得救济，质权人在其后的任何时间，可向出质人发出书面违约通知，要求依据第8部分履行其处理股权的权利。Unless an Event of Default set forth in this Section 7.1 has been successfully resolved to Pledgee's satisfaction within twenty (20) days after the Pledgeedelivers a notice to the Pledgors requesting ratification of such Event of Default, Pledgee may issue a Notice of Default to Pledgors in writing at any timethereafter, demanding the Pledgors to immediately dispose of the Pledge in accordance with the provisions of Article 8 of this Agreement.8.质权的行使Exercise of Pledge8.1在被担保债务被全部清偿或履行前，未经质权人书面同意，出质人不得转让本质权和其拥有的丙方股权。Prior to the full payment of all payments in pledge, without the Pledgee's written consent, Pledgors shall not assign the Pledge or the Equity Interest inParty C.8.2在质权人行使其质押权利时，质权人可以向出质人发出书面违约通知。Pledgee may issue a Notice of Default to Pledgors when exercising the Pledge.10秘密文件 Strictly Confidential8.3在质权人行使其质押权利时，根据中国有关法律的规定，质权人有权按照法定程序处置质押股权。仅在中国法律允许的范围内，对于处置的所得，质权人无需给付出质人；除非中国法律另有规定，出质人特此放弃其可能有的能向质权人要求任何质押股权处置所得的权利；同样，出质人对质权人在该质押股权处置后的亏损也不承担任何义务。When the Pledgor exercises the pledge right, Pledgee is entitled to dispose of the Equity Interest pledged in accordance with applicable PRC laws. Onlyto the extent permitted under applicable PRC laws, Pledgee has no obligation to account to Pledgors for proceeds of disposition of the Equity Interest.Unless otherwise required by PRC laws, Pledgors hereby waive any rights it may have to demand any such accounting from Pledgee; Likewise, in suchcircumstance Pledgors shall have no obligation to Pledgee for any deficiency remaining after such disposition of the Equity Interest pledged.8.4质权人依照本协议处分质权时，出质人和丙方应予以必要的协助，以使质权人实现其质权。When Pledgee disposes of the Pledge in accordance with this Agreement, Pledgors and Party C shall provide necessary assistance to enable Pledgee toenforce the Pledge in accordance with this Agreement.9.转让Assignment9.1除非经质权人事先同意，出质人无权赠予或转让其在本协议项下的权利义务。Without Pledgee's prior written consent, Pledgors shall not have the right to assign or delegate its rights and obligations under this Agreement.11秘密文件 Strictly Confidential9.2本协议对出质人及其继任人和经许可的受让人均有约束力，并且对质权人及每一继任人和受让人有效。This Agreement shall be binding on Pledgors and their successors and permitted assigns, and shall be valid with respect to Pledgee and each of itssuccessors and assigns.9.3经出质人同意，质权人可以在任何时候将其在业务合作协议项下的所有或任何权利和义务转让给其指定的关联方（自然人/法人），在这种情况下，受让人应享有和承担本协议项下质权人享有和承担的权利和义务，如同其作为原协议方应享有和承担的一样。质权人转让业务合作协议项下的权利和义务时，应质权人要求，出质人应就此转让签署有关协议和/或文件。Upon the Pledgors’ agreement, Pledgee may assign any or all of its rights and obligations under the Business Cooperation Agreement to its designee(s)(natural/legal persons) at any time, in which case the assigns shall have the rights and obligations of Pledgee under this Agreement, as if it were theoriginal party to this Agreement. When the Pledgee assigns the rights and obligations under the Business Cooperation Agreement, upon Pledgee'srequest, Pledgors shall execute relevant agreements or other documents relating to such assignment.9.4因转让所导致的质权人变更后，应质权人要求，出质人应与新的质权人签订一份内容与本协议一致的新质押协议，并在相应的工商行政管理机关进行登记。In the event of a change in Pledgee due to an assignment, Pledgors shall, at the request of Pledgee, execute a new pledge agreement with the newpledgee on the same terms and conditions as this Agreement, and register the same with the relevant AIC.12秘密文件 Strictly Confidential9.5出质人应严格遵守本协议和各方单独或共同签署的其他有关协议的规定，包括独家购买权合同和对质权人的授权委托书，履行各协议项下的义务，并不进行任何足以影响协议的有效性和可强制执行性的作为/不作为。除非根据质权人的书面指示，出质人不得行使其对质押股权还留存的权利。Pledgors shall strictly abide by the provisions of this Agreement and other contracts jointly or separately executed by the Parties hereto or any of them,including the Exclusive Option Agreement and the Power of Attorney granted to Pledgee, perform the obligations hereunder and thereunder, and refrainfrom any action/omission that may affect the effectiveness and enforceability thereof. Any remaining rights of Pledgors with respect to the EquityInterest pledged hereunder shall not be exercised by Pledgors except in accordance with the written instructions of Pledgee.10.终止Termination在被担保债务被全部清偿或履行完毕之后，本质权人应在尽早合理可行的时间内办理或配合办理解除质押的手续，出质人与丙方应提供相应的配合与协助。Upon the full payment of all payments in pledge under the Business Cooperation Agreement a, Pledgor shall then, with the assistance of Party B and Party C,go through the procedures of cancellation of pledge rights at a reasonable time as soon as practicable.11.手续费及其他费用Handling Fees and Other Expenses一切与本协议有关的费用及实际开支，其中包括但不限于法律费用、工本费、印花税以及任何其他税收、费用等全部由丙方承担。All fees and out of pocket expenses relating to this Agreement, including but not limited to legal costs, costs of production, stamp tax and any other taxes andfees, shall be borne by Party C.13秘密文件 Strictly Confidential12.保密责任Confidentiality各方承认及确定有关本协议、本协议内容，以及彼此就准备或履行本协议而交换的任何口头或书面资料均被视为保密信息。各方应当对所有该等保密信息予以保密，而在未得到另一方书面同意前，不得向任何第三者披露任何保密信息，惟下列信息除外：(a)公众人士知悉或将会知悉的任何信息（惟并非由接受保密信息之一方擅自向公众披露）；(b)根据适用法律法规、股票交易规则、或政府部门或法院的命令而所需披露之任何信息；或(c)由任何一方就本协议所述交易而需向其股东、投资者、法律或财务顾问披露之信息，而该股东、法律或财务顾问亦需遵守与本条款相类似之保密责任。如任何一方工作人员或聘请机构的泄密均视为该方的泄密，需依本协议承担违约责任。无论本协议以任何理由终止，本条款仍然生效。The Parties acknowledge that the existence and the terms of this Agreement and any oral or written information exchanged between the Parties in connectionwith the preparation and performance this Agreement are regarded as confidential information. Each Party shall maintain confidentiality of all such confidentialinformation, and without obtaining the written consent of the other Party, it shall not disclose any relevant confidential information to any third parties, exceptfor the information that: (a) is or will be in the public domain (other than through the receiving Party’s unauthorized disclosure); (b) is under the obligation tobe disclosed pursuant to the applicable laws or regulations, rules of any stock exchange, or orders of the court or other government authorities; or (c) isrequired to be disclosed by any Party to its shareholders, investors, legal counsels or financial advisors regarding the transaction contemplated hereunder,provided that such shareholders, investors, legal counsels or financial advisors shall be bound by the confidentiality obligations similar to those set forth inthis Section. Disclosure of any confidential information by the staff members or agencies hired by any Party shall be deemed disclosure of such confidentialinformation by such Party, which Party shall be held liable for breach of this Agreement. This Section shall survive the termination of this Agreement for anyreason.14秘密文件 Strictly Confidential13.适用法律和争议的解决Governing Law and Resolution of Disputes13.1本协议的订立、效力、解释、履行、修改和终止以及争议的解决均适用中国法律。The execution, effectiveness, construction, performance, amendment and termination of this Agreement and the resolution of disputes hereunder shallbe governed by the laws of China.13.2因解释和履行本协议而发生的任何争议，本协议各方应首先通过友好协商的方式加以解决。如果在一方向其他方发出要求协商解决的书面通知后30天之内争议仍然得不到解决，则任何一方均可将有关争议提交给中国国际经济贸易仲裁委员会，由该会按照其仲裁规则仲裁解决。仲裁应在北京进行，使用之语言为中文。仲裁裁决是终局性的，对各方均有约束力。In the event of any dispute with respect to the construction and performance of this Agreement, the Parties shall first resolve the dispute throughfriendly negotiations. In the event the Parties fail to reach an agreement on the dispute within 30 days after either Party's request to the other Parties forresolution of the dispute through negotiations, either Party may submit the relevant dispute to the China International Economic and Trade ArbitrationCommission for arbitration, in accordance with its Arbitration Rules. The arbitration shall be conducted in Beijing, and the language used in arbitrationshall be Chinese. The arbitration award shall be final and binding on all Parties.13.3因解释和履行本协议而发生任何争议或任何争议正在进行仲裁时，除争议的事项外，本协议各方仍应继续行使各自在本协议项下的其他权利并履行各自在本协议项下的其他义务。Upon the occurrence of any disputes arising from the construction and performance of this Agreement or during the pending arbitration of any dispute,except for the matters under dispute, the Parties to this Agreement shall continue to exercise their respective rights under this Agreement and performtheir respective obligations under this Agreement.15秘密文件 Strictly Confidential14.通知Notices14.1本协议项下要求或发出的所有通知和其他通信应通过专人递送、挂号邮寄、邮资预付或商业快递服务或传真的方式发到该方下列地址。每一通知还应再以电子邮件送达。该等通知视为有效送达的日期按如下方式确定：All notices and other communications required or permitted to be given pursuant to this Agreement shall be delivered personally or sent by registeredmail, postage prepaid, by a commercial courier service or by facsimile transmission to the address of such party set forth below. A confirmation copy ofeach notice shall also be sent by Email. The dates on which notices shall be deemed to have been effectively given shall be determined as follows:14.1.1通知如果是以专人递送、快递服务或挂号邮寄、邮资预付发出的，则以于设定为通知的地址在接收或拒收之日为有效送达日。Notices given by personal delivery, by courier service or by registered mail, postage prepaid, shall be deemed effectively given on the date ofreceipt or refusal at the address specified for notices.14.1.2通知如果是以传真发出的，则以成功传送之日为有效送达日（应以自动生成的传送确认信息为证）。Notices given by facsimile transmission shall be deemed effectively given on the date of successful transmission (as evidenced by anautomatically generated confirmation of transmission).16秘密文件 Strictly Confidential14.2为通知的目的，各方地址如下：For the purpose of notices, the addresses of the Parties are as follows:甲方：中传天下信息科技（深圳）有限公司Party A: Zhongchuan Tianxia Information Technology (Shenzhen) Co., Ltd.地址：深圳市南山区高新中三道2号深圳软件园一期五栋401AAddress: 401A, Building 5, Phase 1, Shenzhen Software Park, No.2 Gaoxin Zhongsan Road, Nanshan District, Shenzhen.收件人：洪婷Attn: Hong Ting乙方：Party B:a)宋雪松Song Xuesong地址：125.Expenses, including legal fees, incurred by a director in defending any legal, administrative or investigative proceedings may be paid by the Company inadvance of the final disposition of such proceedings upon receipt of an undertaking by or on behalf of the director to repay the amount if it shall ultimatelybe determined that the director is not entitled to be indemnified by the Company in accordance with these Articles.126.Expenses, including legal fees, incurred by a former director in defending any legal, administrative or investigative proceedings may be paid by theCompany in advance of the final disposition of such proceedings upon receipt of an undertaking by or on behalf of the former director to repay the amountif it shall ultimately be determined that the director is not entitled to be indemnified by the Company in accordance with these Articles.127.The indemnification and advancement of expenses provided by, or granted pursuant to, these Articles is not exclusive of any other rights to which theperson seeking indemnification of advancement of expenses may be entitled under any agreement, resolution of members, resolution of disinteresteddirectors or otherwise, both as to acting in the person’s official capacity and as to acting in another capacity while serving as a director of the Company.128.If a person to be indemnified has been successful in defence of any proceedings referred to above the person is entitled to be indemnified against allexpenses, including legal fees, and against all judgments, fines and amounts paid in settlement and reasonably incurred by the person in connection withthe proceedings.129.The Company may purchase and maintain insurance in relation to any person who is or was a director, an officer or a liquidator of the Company, or who atthe request of the Company is or was serving as a director, an officer or a liquidator of, or in any other capacity is or was acting for, another body corporateor a partnership, joint venture, trust or other enterprise, against any liability asserted against the person and incurred by the person in that capacity,whether or not the Company has or would have had the power to indemnify the person against the liability as provided in these Articles.SEAL130.The Company shall have a Seal and may have more than one Seal. References herein to the Seal shall be references to every Seal which shall have beenduly adopted by resolution of directors. The directors shall provide for the safe custody of the Seal and for an imprint thereof to be kept at the office of theregistered agent of the Company. Except as otherwise expressly provided herein, the Seal when affixed to any written instrument, shall be witnessed andattested to by the signature of a director or any other person so authorized from time to time by resolution of directors. Such authorization may be before orafter the Seal is affixed, may be general or specific and may refer to any number of sealings. The Directors may provide for a facsimile of the Seal and of thesignature of any director or authorized person which may be reproduced by printing or other means on any instrument and it shall have the same force andvalidity as if the Seal had been affixed to such instrument and the same had been signed as hereinbefore described.21DISTRIBUTIONS131.The directors of the Company may by resolution authorise a distribution by the Company at any time and of any amount and to any members they think fitif they are satisfied on reasonable grounds that immediately after the distribution;a.the value of the Company’s assets will exceed its liabilities, andb.the Company will be able to pay its debts as they fall due.132.A resolution of the directors passed under the preceding Article shall contain a statement that, in the opinion of the directors, immediately after thedistribution the value of the Company’s assets will exceed its liabilities, and the Company will be able to pay its debts as they fall due.133.If, after a distribution is authorised and before it is made, the directors cease to be satisfied on reasonable grounds that the Company will, immediately afterthe distribution satisfy the solvency test, any distribution made by the Company is deemed not to have been authorised.134.If, by virtue of the preceding Article, a distribution is deemed not to have been authorised, a director who;a.ceased, after authorisation but before the making of the distribution, to be satisfied on reasonable grounds for believing that the company wouldsatisfy the solvency test immediately after the distribution is made; andb.failed to take reasonable steps to prevent the distribution being made;is personally liable to the company to repay to the company so much of the distribution as is not able to be recovered from members.135.A distribution made to a member at a time when the company did not, immediately after the distribution, satisfy the solvency test may be recovered by thecompany from the member unless;a.the member received the distribution in good faith and without knowledge of the company’s failure to satisfy the solvency test;b.the member has altered his position in reliance on the validity of the distribution; andc.it would be unfair to require repayment in full or at all.DISTRIBUTIONS BY WAY OF DIVIDEND136.The Company may by a resolution of directors declare a distribution by way of dividend and pay such distribution in money, shares or other property. Inthe event that distributions by way of dividend are paid in specie the directors shall have responsibility for establishing and recording in the resolution ofdirectors authorizing the distribution by way of dividend, a fair and proper value for the assets to be so distributed.137.The directors may from time to time pay to the members such interim distributions by way of dividend as appear to the directors to be justified by theprofits of the Company.138.The directors may, before declaring any distribution by way of dividend, set aside out of the profits of the Company such sum as they think proper as areserve fund, and may invest the sum so set aside as a reserve fund upon such securities as they may select.139.Notice of any distribution by way of dividend that may have been declared shall be given to each member in the manner hereinafter mentioned and alldistributions by way of dividend unclaimed for 3 years after having been declared may be forfeited by resolution of directors for the benefit of theCompany.140.No distribution by way of dividend shall bear interest as against the Company and no distribution by way of dividend shall be paid on treasury shares orshares held by another company of which the Company holds, directly or indirectly, shares having more than 50 percent of the vote in electing directors.22141.A share issued as a distribution by way of dividend by the Company shall be treated for all purposes as having been issued for money equal to the valuedetermined by resolution of the directors. In the absence of fraud the decision of the directors as to the value of the share is conclusive unless a questionof law is involved.142.A division of the issued and outstanding shares of a class or series of shares into a larger number of shares of the same class or series having aproportionately smaller par value does not constitute a distribution by way of dividend of shares.ACCOUNTS AND AUDIT143.The Company may by resolution of members call for the directors to prepare periodically a profit and loss account and a balance sheet. The profit and lossaccount and balance sheet shall be drawn up so as to give respectively a true and fair view of the profit and loss of the Company for the financial periodand a true and fair view of the state of affairs of the Company as at the end of the financial period.144.The Company may by resolution of members call for the accounts to be examined by auditors.145.Subject to the rules of the Designated Stock Exchange, the first auditors shall be appointed by resolution of directors; subsequent auditors shall beappointed by the Audit Committee and shall hold office until the Audit Committee appoint another independent auditor.146.Subject to the rules of the Designated Stock Exchange, the remuneration of the auditors of the Company shall be fixed by the Audit Committee.147.The auditors shall examine each profit and loss account and balance sheet required to be served on every member of the Company or laid before a meetingof the members of the Company and shall state in a written report whether or nota.in their opinion the profit and loss account and balance sheet give a true and fair view respectively of the profit and loss for the period covered bythe accounts, and of the state of affairs of the Company at the end of that period; andb.all the information and explanations required by the auditors have been obtained.148.The report of the auditors shall be annexed to the accounts and shall be read at the meeting of members at which the accounts are laid before the Companyor shall be served on the members.149.Every auditor of the Company shall have a right of access at all times to the books of account and vouchers of the Company, and shall be entitled to requirefrom the directors and officers of the Company such information and explanations as he thinks necessary for the performance of the duties of the auditors.150.The auditors of the Company shall be entitled to receive notice of, and to attend any meetings of members of the Company at which the Company’s profitand loss account and balance sheet are to be presented.NOTICES151.Any notice, information or written statement to be given by the Company to members may be served in any way by which it can reasonably be expected toreach each member or by mail addressed to each member at the address shown in the share register.152.Any summons, notice, order, document, process, information or written statement to be served on the Company may be served by leaving it, or by sendingit by registered mail addressed to the Company, at its registered office, or by leaving it with, or by sending it by registered mail to, the registered agent ofthe Company.153.Service of any summons, notice, order, document, process, information or written statement to be served on the Company may be proved by showing thatthe summons, notice, order, document, process, information or written statement was delivered to the registered office or the registered agent of theCompany or that it was mailed in such time as to admit to its being delivered to the registered office or the registered agent of the Company in the normalcourse of delivery within the period prescribed for service and was correctly addressed and the postage was prepaid.23PENSION AND SUPERANNUATION FUNDS154.The directors may establish and maintain or procure the establishment and maintenance of any noncontributory or contributory pension orsuperannuation funds for the benefit of, and give or procure the giving of donations, gratuities, pensions, allowances or emoluments to, any persons whoare or were at any time in the employment or service of the Company or any company which is a subsidiary of the Company or is allied to or associated withthe Company or with any such subsidiary, or who are or were at any time directors or officers of the Company or of any such other company as aforesaid orwho hold or held any salaried employment or office in the Company or such other company, or any persons in whose welfare the Company or any suchother company as aforesaid is or has been at any time interested, and to the wives, widows, families and dependents of any such person, and may makepayments for or towards the insurance of any such persons as aforesaid, and may do any of the matters aforesaid either alone or in conjunction with anysuch other company as aforesaid. Subject always to the proposal being approved by resolution of members, a director holding any such employment oroffice shall be entitled to participate in and retain for his own benefit any such donation, gratuity, pension allowance or emolument.VOLUNTARY WINDING UP AND DISSOLUTION155.The Company may voluntarily commence to wind up and dissolve by a resolution of members but if the Company has never issued shares it mayvoluntarily commence to wind up and dissolve by resolution of directors.CONTINUATION156.The Company may by resolution of members or by a resolution passed unanimously by all directors of the Company continue as a company incorporatedunder the laws of a jurisdiction outside the British Virgin Islands in the manner provided under those laws.ARBITRATION157.Whenever any difference arises between the Company on the one hand and any of the members or their executors, administrators or assigns on the otherhand, touching the true intent and construction or the incidence or consequences of these Articles or of the Act, touching anything done or executed,omitted or suffered in pursuance of the Act or touching any breach or alleged breach or otherwise relating to the premises or to these Articles, or to anyAct or Ordinance affecting the Company or to any of the affairs of the Company such difference shall, unless the parties agree to refer the same to a singlearbitrator, be referred to 2 arbitrators one to be chosen by each of the parties to the difference and the arbitrators shall before entering on the referenceappoint an umpire.158.If either party to the reference makes default in appointing an arbitrator either originally or by way of substitution (in the event that an appointed arbitratorshall die, be incapable of acting or refuse to act) for 10 days after the other party has given him notice to appoint the same, such other party may appoint anarbitrator to act in the place of the arbitrator of the defaulting party.We, Portcullis TrustNet (BVI) Limited of Portcullis TrustNet Chambers, P.O. Box 3444, Road Town, Tortola, British Virgin Islands for the purpose of incorporating aBVI Business Company under the laws of the British Virgin Islands hereby sign these Articles of Association the 27th day of October, 2009.Incorporator/s/ Nicole WheatleyPortcullis TrustNet (BVI) LimitedPortcullis TrustNet ChambersP.O. Box 3444Road Town, TortolaBritish Virgin Islands(Sgd. Nicole Wheatley)24EX4.15 3 f20f2017ex415_luokung.htm EXCLUSIVE BUSINESS COOPERATION AGREEMENT BY AND BETWEEN ZHONGCHUAN TIANXIA INFORMATIONTECHNOLOGY (SHENZHEN) CO., LTD., AND BEIJING MOBILE VISION TECHNOLOGY CO., LTD., DATED AUGUST 31, 2015Exhibit 4.15独家业务合作协议Exclusive Business Cooperation Agreement本独家业务合作协议（下称“本协议”）由以下双方于年月日在中华人民共和国（下称“中国”）北京市签署。This Exclusive Business Cooperation Agreement (this “Agreement”) is made and entered into by and between the following parties on in Beijing, thePeople’s Republic of China (“China” or the “PRC”).甲方：中传天下信息科技（深圳）有限公司Party A: Zhongchuan Tianxia Information Technology (Shenzhen) Co., Ltd.地址：深圳市南山区高新中三道2号深圳软件园一期五栋401A Address: 401A, Building 5, Phase 1, Shenzhen Software Park, No.2 Gaoxin Zhongsan Road, Nanshan District, Shenzhen统一社会信用代码：91440300565701058R Uniform Social Credit Code: 91440300565701058R乙方：北京中传视讯科技有限公司Party B: Beijing Mobile Vision Technology Co., Ltd.地址：北京市朝阳区光华路9号SOHO3QLAB32Address: LAB32, SOHO3Q, No 9, Guanghua Road, Chaoyang District, Beijing统一社会信用代码：9111010576215249XMUniform Social Credit Code: 9111010576215249XM甲方和乙方以下各称为“一方”，统称为“双方”。Each of Party A and Party B shall be hereinafter referred to as a “Party” respectively, and as “Parties” collectively.1秘密文件Strictly Confidential鉴于：Whereas,1.甲方是一家在中国注册的外商独资企业，拥有丰富的技术研发和产业化推广相关的管理和投资经验，并提供相关的技术支持和咨询服务；Party A is a whollyforeignowned enterprise established in China, which has rich experience in technology research development and industrializationpromotion management and investment, and provides relevant technical support and consulting services;2.乙方是一家在中国成立的有限责任公司，经中国有关政府部门批准依法主要从事手机视频技术开发、内容制作及市场推广；Party B is a limited company in China, mainly engages in mobile video technology research, development, content creation, sale and related industrialpromotion as approved by the relevant governmental authorities in China;3.甲方同意利用其技术、人员和信息优势，在本协议期间向乙方提供有关手机视频技术开发、内容制作及市场推广以及未来扩大业务规模和业务范围时乙方所需的技术支持、技术咨询等相关服务，乙方同意接受甲方或其指定方按本协议条款的规定提供的各种服务。Party A is willing to provide Party B with technology supports and technology consulting services in connection with mobile video technology research,development, content creation, sale and related industrial promotion and such services in connection with Party B’s extension of business scale orbroadening of businesses during the term of this Agreement, utilizing its advantages in technology, human resources, and information, and Party B iswilling to accept such services provided by Party A or Party A's designee(s), each on the terms set forth herein.2秘密文件Strictly Confidential据此，甲方和乙方经协商一致，达成如下协议：Now, therefore, through mutual discussion, the Parties have reached the following agreements:1.服务提供Services Provided by Party A1.1按照本协议条款和条件，乙方在此委任甲方在本协议期间作为乙方的独家服务提供者向乙方提供全面的和手机视频技术开发、内容制作及市场推广相关以及未来扩大业务规模和业务范围时乙方所需的技术支持、业务支持和相关咨询服务，具体内容包括但不限于以下内容：Party B hereby appoints Party A as Party B's exclusive services provider to provide Party B with complete technical support, business supportand related consulting services in connection with mobile video technology research, development, content creation, sale and related industrialpromotion and such services in connection with Party B’s extension of business scale or broadening of businesses during the term of thisAgreement, in accordance with the terms and conditions of this Agreement, which may include but not limited to:1.1.1为乙方提供其手机视频技术开发、内容制作及市场推广业务所需的一切服务支持，为乙方提供相当于包括总经理、行政人员、管理人员、筹划部门、商业运营、人力资源、财务、会计以及与乙方业务相关的一切业务操作所需人员所能提供的服务内容；managing all aspects of Party B’s business of mobile video technology research, development, content creation, sale and relatedindustrial promotion. In this capacity, Party A will procure or engage for Party B the services of a general manager and other managementstaff, including but not limited to personnel responsible for all administration, operations, planning, business development, humanresources, finance, accounting and other operations related to the Business of Party B;3秘密文件Strictly Confidential1.1.2为乙方制定全部的商业计划、销售目标，并为优化执行该等商业计划设计和建立相应的系统及操作程序；developing all business plans and sales projections of Party B, and for developing and establishing systems and procedures for optimumexecution of the business plans;1.1.3为乙方申请手机视频技术及内容制作相关专利提供咨询服务和支持；consulting services and support in connection with Party B’s applying for mobile video technology related patents and content creation;1.1.4为乙方手机视频技术产业化的发展方向、规模、品牌提升提供咨询服务；consulting services in connection with the development directions, size and business brands promotion of Party B’s mobile videotechnology industrialization;4秘密文件Strictly Confidential1.1.5为乙方提供与业务相关的办公、生产和销售服务，为乙方租赁场所，建立业务相关的系统和程序，满足乙方的其他要求；procuring or obtaining for Party B all office, production and distribution services related to the Business. It shall procure or obtainappropriate leases, establish systems and procedures needed to operate the business, fulfill orders for services;1.1.6尽最大努力为乙方建立手机视频技术销售市场，根据甲方为乙方制定的商业计划及销售目标代表乙方获取客户订单，同时为乙方提供与业务相关的客户服务，建立向客户开具票据的程序和与会计相关的托收服务。using its best efforts to establish mobile video technology related marketing and other structures to obtain orders for services &products from customers on behalf of Party B in accordance with Party B’s business plans, sales projections and objectives (asdeveloped by Party A) and procure or obtain customer services required in connection with the Business. It shall also establishprocedures for invoicing customers, and establish collection services with respect to accounts;1.1.7就乙方的劳动用工方面提供咨询服务和支持，包括但不限于，组织实施对乙方业务人员、行政人员、管理人员等人员进行培训和考核，协助建立健全的人力资源管理制度和实现人力资源的良好配置；consulting services and support regarding labor system of Party B, including but without limitation to labor training and evaluation ofsales person, administrative staff and management person etc. and establishment of human resources management system to well;5秘密文件Strictly Confidential1.1.8提供乙方需要的客户数据统计、分析及相关数据库的建设和维护等咨询服务；providing Party B with compile and analysis of client data and consulting services of establishment and maintenance of data base;1.1.9提供乙方需要的软件和相关技术支持服务；providing software Party B requires and other technical support;1.1.10接受乙方委托，对乙方的手机视频技术研发和产业化推广业务经营进行指导和管理；guiding and management on Party B’s business of mobile video technology research and development and related industrial promotionoperation according to Party B’s commission;1.1.11当乙方业务规模发展或业务范围扩大需要时，购买乙方业务经营需要的设备；in the event of the demand of Party B’s development of business scale or broadening of businesses, purchase the equipments which itneeds for the operation of its business;1.1.12当乙方业务规模发展或业务范围扩大需要时，完成乙方项目中的全部或部分工作；in the event of the demand of Party B’s development of business scale or broadening of businesses, complete the work of Party B’sproject in whole or in party;6秘密文件Strictly Confidential1.1.13当乙方业务规模发展或业务范围扩大需要时，开发新技术；in the event of the demand of Party B’s development of business scale or broadening of businesses, develop new technology;1.1.14乙方委托甲方，且甲方接受委托提供的其他服务。other services Party B appoints Party A to provide and Party A agrees to provide.1.2乙方接受甲方的咨询和服务。乙方进一步同意，除非经甲方事先书面同意，在本协议期间，就本协议约定的服务或其他事宜，乙方不得直接或间接地从任何第三方获得任何与本协议相同或类似的咨询和/或服务，并不得与任何第三方就本协议所述事项建立任何类似的合作关系。双方同意，甲方可以指定其他方（该被指定方可以与乙方签署本协议第1.3条描述的某些协议）为乙方提供本协议约定的服务和/或支持。Party B agrees to accept all the consultations and services provided by Party A. Party B further agrees that unless with Party A's prior writtenconsent, during the term of this Agreement, Party B shall not directly or indirectly accept the same or any similar consultations and/or servicesprovided by any third party and shall not establish similar corporation relationship with any third party regarding the matters contemplated by thisAgreement. Party A may appoint other parties, who may enter into certain agreements described in Section 1.3 with Party B, to provide Party Bwith the consultations and/or services under this Agreement.7秘密文件Strictly Confidential1.3服务的提供方式Service Providing Methodology1.3.1双方同意在本协议有效期内，视情况而定，乙方可以与甲方或甲方指定的其他方进一步签订技术服务协议和/或咨询服务协议，对各项业务培训、技术服务、咨询服务的具体内容、方式、人员、收费等进行约定。Parties agree that during the term of this Agreement, where necessary, Party B may enter into further technical service agreements and/orconsulting service agreements with Party A or any other party designated by Party A, which shall provide the specific contents, manner,personnel, and fees for the specific technical services and consulting services.1.3.2为更好地履行本协议，双方同意，在甲方认为必要时，乙方应在本协议有效期内与甲方或甲方指定的其他方根据业务进展需要随时签署协议，由甲方或其指定方向乙方提供服务。To fulfill this Agreement, Parties agree that during the term of this Agreement, where Party A deems necessary, Party B shall enter intoagreements with Party A or any other party designated by Party A which shall set forth that Party A or any other party designated byParty A provide services to Party B based on the needs of the business of Party B.8秘密文件Strictly Confidential2.服务的价格和支付方式The Calculation and Payment of the Service Fees双方同意，就甲方提供的服务，乙方应向甲方支付服务费（“服务费”）。服务费不应低于乙方税后利润的80%。服务费应当按季支付；经甲方事先书面同意，服务费可以根据乙方的经营需要进行调整。Both Parties agree that, in consideration of the services provided by Party A, Party B shall pay Party A fees (the “Service Fees”), which shall not be lessthan 80% of Party B’s aftertax profits . The Service Fees shall be due and payable on a quarterly basis; upon the prior written consent by Party A, the rateof Service Fees may be adjusted pursuant to the operational needs of Party B.3.知识产权和保密条款Intellectual Property Rights and Confidentiality Clauses3.1在中国法律允许的范围内，甲方对履行本协议而产生或创造的任何权利、所有权、权益和所有知识产权包括但不限于著作权、专利权、专利申请权、软件、技术秘密、商业机密及其他均享有独占的和排他的权利和利益。乙方须签署所有适当的文件，采取所有适当的行动，递交所有的文件和/或申请，提供所有适当的协助，以及做出所有其他依据甲方的自行决定认为是必要的行为，以将任何对该等知识产权的所有权、权利和权益赋予甲方，和/或完善对甲方此等知识产权权利的保护。To the extent permitted under the PRC laws, Party A shall have exclusive and proprietary rights and interests in all rights, ownership, interests andintellectual properties arising out of or created during the performance of this Agreement, including but not limited to copyrights, patents, patentapplications, software, technical secrets, trade secrets and others. Party B shall execute all appropriate documents, take all appropriate actions,submit all filings and/or applications, render all appropriate assistance and otherwise conduct whatever is necessary deemed as by Party A in itssole discretion for the purposes of vesting any ownership, right or interest of any such intellectual property rights in Party A, and/or perfectingthe protections for any such intellectual property rights in Party A.9秘密文件Strictly Confidential3.2双方承认及确定有关本协议、本协议内容，以及彼此就准备或履行本协议而交换的任何口头或书面资料均被视为保密信息。双方应当对所有该等保密信息予以保密，而在未得到另一方书面同意前，不得向任何第三者披露任何保密信息，惟下列信息除外：(a)公众人士知悉或将会知悉的任何信息（惟并非由接受保密信息之一方擅自向公众披露）；(b)根据适用法律法规、股票交易规则、或政府部门或法院的命令而所需披露之任何信息；或(c)由任何一方就本协议所述交易而需向其股东、投资者、法律或财务顾问披露之信息，而该股东、法律或财务顾问亦需遵守与本条款相类似之保密责任。如任何一方工作人员或聘请机构的泄密均视为该方的泄密，需依本协议承担违约责任。无论本协议以任何理由终止，本条款仍然生效。The Parties acknowledge that the existence and the terms of this Agreement and any oral or written information exchanged between the Parties inconnection with the preparation and performance this Agreement are regarded as confidential information. Each Party shall maintainconfidentiality of all such confidential information, and without obtaining the written consent of the other Party, it shall not disclose any relevantconfidential information to any third parties, except for the information that: (a) is or will be in the public domain (other than through the receivingParty’s unauthorized disclosure); (b) is under the obligation to be disclosed pursuant to the applicable laws or regulations, rules of any stockexchange, or orders of the court or other government authorities; or (c) is required to be disclosed by any Party to its shareholders, investors,legal counsels or financial advisors regarding the transaction contemplated hereunder, provided that such shareholders, investors, legal counselsor financial advisors shall be bound by the confidentiality obligations similar to those set forth in this Section. Disclosure of any confidentialinformation by the staff members or agencies hired by any Party shall be deemed disclosure of such confidential information by such Party, whichParty shall be held liable for breach of this Agreement. This Section shall survive the termination of this Agreement for any reason.3.3双方同意，不论本协议是否变更、解除或终止，本条款将持续有效。The Parties agree that this Section shall survive changes to, and rescission or termination of, this Agreement.4.陈述和保证Representations and Warranties4.1甲方陈述和保证如下：Party A hereby represents and warrants as follows:4.1.1甲方是按照中国法律合法注册并有效存续的外商独资企业。Party A is a whollyforeignowned enterprise legally registered and validly existing in accordance with the laws of China.10秘密文件Strictly Confidential4.1.2甲方已采取必要的公司行为，获得必要的授权，并取得第三方和政府部门的同意及批准（若需）以签署和履行本协议；甲方对本协议的签署和履行并不违反法律法规的明确规定。Party A has taken all necessary corporate actions, obtained all necessary authorization and the consent and approval from third partiesand government agencies (if any) for the execution and performance of this Agreement. Party A’s execution and performance of thisAgreement do not violate any explicit requirements under any law or regulation binding on Party A.4.1.3本协议构成对其合法、有效、有约束力并依本协议之条款对其强制执行的义务。This Agreement constitutes Party A's legal, valid and binding obligations, enforceable in accordance with its terms.4.2乙方陈述和保证如下：Party B hereby represents and warrants as follows:4.2.1乙方是按照中国法律合法登记且有效存续的有限责任公司，乙方根据政府部门的批准和许可从事手机视频技术开发、内容制作和产业化市场推广的经营。Party B is a limited company legally registered and validly existing in accordance with the laws of China, engages in mobile videotechnology research, development, content creation, sale and related industrial promotion pursuant to governmental approvals andpermits;11秘密文件Strictly Confidential4.2.2乙方已采取必要的行为，获得必要的授权，并取得第三方和政府部门的同意及批准（若需）以签署和履行本协议；乙方对本协议的签署和履行并不违反法律法规的明确规定。Party B has taken all necessary actions, obtained all necessary authorization and the consent and approval from third parties andgovernment agencies (if any) for the execution and performance of this Agreement. Party B’s execution and performance of thisAgreement do not violate any explicit requirements under any law or regulation binding on Party B.4.2.3本协议构成对其合法、有效、有约束力并依本协议之条款对其强制执行的义务。This Agreement constitutes Party B's legal, valid and binding obligations, and shall be enforceable against it.5.生效和有效期Effectiveness and Term5.1本协议于文首标明的协议日期签署并同时生效。除非依本协议或双方其他协议的约定而提前终止，本协议有效期为20年，但甲、乙双方应自本协议签署后，每3个月对本协议的内容做一次审查，以决定是否需要根据当时的情况对本协议作出相应修改和补充。This Agreement is executed on the date first above written and shall take effect as of such date. Unless earlier terminated in accordance with theprovisions of this Agreement or relevant agreements separately executed between the Parties, the term of this Agreement shall be 20 years. Afterthe execution of this Agreement, both Parties shall review this Agreement every 3 months to determine whether to amend or supplement theprovisions in this Agreement based on the actual circumstances at that time.12秘密文件Strictly Confidential5.2协议期满前，经甲方书面确认，本协议可以延期。延期的期限由甲方决定，乙方必须无条件地同意该延期。The term of this Agreement may be extended if confirmed in writing by Party A prior to the expiration thereof. The extended term shall bedetermined by Party A, and Party B shall accept such extended term unconditionally.6.终止Termination6.1除非依据本协议续期，本协议于到期之日终止。Unless renewed in accordance with the relevant terms of this Agreement, this Agreement shall be terminated upon the date of expiration hereof.6.2本协议有效期内，除非甲方对乙方有重大过失或存在欺诈行为，乙方不得提前终止本协议。尽管如此，甲方可在任何时候通过提前30天向乙方发出书面通知的方式终止本协议。During the term of this Agreement, unless Party A commits gross negligence, or a fraudulent act, against Party B, Party B shall not terminate thisAgreement prior to its expiration date. Nevertheless, Party A shall have the right to terminate this Agreement upon giving 30 days' prior writtennotice to Party B at any time.6.3在本协议终止之后，双方在第3、7和8条项下的权利和义务将继续有效。The rights and obligations of the Parties under Articles 3, 7 and 8 shall survive the termination of this Agreement.13秘密文件Strictly Confidential7.适用法律和争议解决Governing Law and Resolution of Disputes7.1本协议的订立、效力、解释、履行、修改和终止以及争议的解决适用中国的法律。The execution, effectiveness, construction, performance, amendment and termination of this Agreement and the resolution of disputes hereundershall be governed by the laws of China.7.2因解释和履行本协议而发生的任何争议，本协议双方应首先通过友好协商的方式加以解决。如果在一方向其他方发出要求协商解决的书面通知后30天之内争议仍然得不到解决，则任何一方均可将有关争议提交给中国国际经济贸易仲裁委员会，由该会按照其仲裁规则仲裁解决。仲裁应在北京进行，使用之语言为中文。仲裁裁决是终局性的，对各方均有约束力。In the event of any dispute with respect to the construction and performance of this Agreement, the Parties shall first resolve the dispute throughfriendly negotiations. In the event the Parties fail to reach an agreement on the dispute within 30 days after either Party's request to the otherParties for resolution of the dispute through negotiations, either Party may submit the relevant dispute to the China International Economic andTrade Arbitration Commission for arbitration, in accordance with its Arbitration Rules. The arbitration shall be conducted in Beijing, and thelanguage used in arbitration shall be Chinese. The arbitration award shall be final and binding on all Parties.14秘密文件Strictly Confidential7.3因解释和履行本协议而发生任何争议或任何争议正在进行仲裁时，除争议的事项外，本协议双方仍应继续行使各自在本协议项下的其他权利并履行各自在本协议项下的其他义务。Upon the occurrence of any disputes arising from the construction and performance of this Agreement or during the pending arbitration of anydispute, except for the matters under dispute, the Parties to this Agreement shall continue to exercise their respective rights under this Agreementand perform their respective obligations under this Agreement.8.补偿Indemnification就甲方根据本协议向乙方提供的咨询和服务内容所产生或引起的针对甲方的诉讼、请求或其他要求而招致的任何损失、损害、责任或费用都应由乙方补偿给甲方，以使甲方不受损害，除非该损失、损害、责任或费用是因甲方的重大过失或故意而产生的。Party B shall indemnify and hold harmless Party A from any losses, injuries, obligations or expenses caused by any lawsuit, claims or other demandsagainst Party A arising from or caused by the consultations and services provided by Party A to Party B pursuant this Agreement, except where suchlosses, injuries, obligations or expenses arise from the gross negligence or willful misconduct of Party A.15秘密文件Strictly Confidential9.通知Notices9.1本协议项下要求或发出的所有通知和其他通信应通过专人递送、挂号邮寄、邮资预付或快递服务或传真的方式发到该方下列地址。每一通知还应再以电子邮件送达。该等通知视为有效送达的日期按如下方式确定：All notices and other communications required or permitted to be given pursuant to this Agreement shall be delivered personally or sent byregistered mail, postage prepaid, by a courier service or by facsimile transmission to the address of such Party set forth below. A confirmationcopy of each notice shall also be sent by email. The dates on which notices shall be deemed to have been effectively given shall be determined asfollows:9.1.1通知如果是以专人递送、快递服务或挂号邮寄、邮资预付发出的，则以于设定为通知的地址在接收或拒收之日为有效送达日。Notices given by personal delivery, by courier service or by registered mail, postage prepaid, shall be deemed effectively given on thedate of receipt or refusal at the address specified for notices.9.1.2通知如果是以传真发出的，则以成功传送之日为有效送达日（应以自动生成的传送确认信息为证）。Notices given by facsimile transmission shall be deemed effectively given on the date of successful transmission (as evidenced by anautomatically generated confirmation of transmission).16秘密文件Strictly Confidential9.2为通知的目的，双方地址如下：For the purpose of notices, the addresses of the Parties are as follows:甲方：中传天下信息科技（深圳）有限公司Party A: Zhongchuan Tianxia Information Technology (Shenzhen) Co., Ltd.地址：深圳市南山区高新中三道2号深圳软件园一期五栋401AAddress:401A, Building 5, Phase 1, Shenzhen Software Park, No.2 Gaoxin Zhongsan Road, Nanshan District, Shenzhen收件人：洪婷Attn: Hong Ting乙方：北京中传视讯科技有限公司Party B: Beijing Mobile Vision Technology Co., Ltd地址：北京市朝阳区光华路9号SOHO3QLAB32Address: LAB32, SOHO3Q, No 9, Guanghua Road, Chaoyang District, Beijing.收件人：宋雪松Attn.: Song Xuesong9.3任何一方可按本条规定随时给另一方发出通知来改变其接收通知的地址。Any Party may at any time change its address for notices by a notice delivered to the other Party in accordance with the terms hereof.17秘密文件Strictly Confidential10.协议的转让Assignment10.1乙方不得将其在本协议项下的权利与义务转让给第三方，除非事先征得甲方的书面同意。Without Party A's prior written consent, Party B shall not assign its rights and obligations under this Agreement to any third party.10.2乙方在此同意，甲方可以在其需要时向其他第三方转让其在本协议项下的权利和义务，并在该等转让发生时甲方仅需向乙方发出书面通知，并且无需再就该等转让征得乙方的同意。Party B agrees that Party A may assign its obligations and rights under this Agreement to any third party upon a prior written notice to Party Bbut without the consent of Party B.11.协议的分割性Severability如果本协议有任何一条或多条规定根据任何法律或法规在任何方面被裁定为无效、不合法或不可执行，本协议其余规定的有效性、合法性或可执行性不应因此在任何方面受到影响或损害。双方应通过诚意磋商，争取以法律许可以及双方期望的最大限度内有效的规定取代那些无效、不合法或不可执行的规定，而该等有效的规定所产生的经济效果应尽可能与那些无效、不合法或不能强制执行的规定所产生的经济效果相似。In the event that one or several of the provisions of this Agreement are found to be invalid, illegal or unenforceable in any aspect in accordance with anylaws or regulations, the validity, legality or enforceability of the remaining provisions of this Agreement shall not be affected or compromised in any aspect.The Parties shall strive in good faith to replace such invalid, illegal or unenforceable provisions with effective provisions that accomplish to the greatestextent permitted by law and the intentions of the Parties, and the economic effect of such effective provisions shall be as close as possible to the economiceffect of those invalid, illegal or unenforceable provisions.18秘密文件Strictly Confidential12.协议的修改、补充Amendments and Supplements双方可以书面协议方式对本协议作出修改和补充。经过双方签署的有关本协议的修改协议和补充协议是本协议组成部分，具有与本协议同等的法律效力。Any amendments and supplements to this Agreement shall be in writing. The amendment agreements and supplementary agreements that have beensigned by the Parties and that relate to this Agreement shall be an integral part of this Agreement and shall have the same legal validity as this Agreement.13.语言和副本Language and Counterparts本协议以中文和英文书就，一式二份，甲乙双方各持一份，具有同等效力；中英文版本如有冲突，应以中文版为准。This Agreement is written in both Chinese and English language in two copies, each Party having one copy with equal legal validity; in case there is anyconflict between the Chinese version and the English version, the Chinese version shall prevail.本页其余部分刻意留为空白The Remainder of this page is intentionally left blank19秘密文件Strictly Confidential有鉴于此，双方已使得经其授权的代表于文首所述日期签署了本独家业务合作协议并即生效，以昭信守。IN WITNESS WHEREOF, the Parties have caused their authorized representatives to execute this Exclusive Business Cooperation Agreement as of thedate first above written.甲方：中传天下信息科技（深圳）有限公司（盖章）Party A: Zhongchuan Tianxia Information Technology (Shenzhen) Co., Ltd.(Seal)签字：By: /s/ Hong Ting 姓名：洪婷Name: Hong Ting职务：总经理Title: General Manager20秘密文件Strictly Confidential有鉴于此，双方已使得经其授权的代表于文首所述日期签署了本独家业务合作协议并即生效，以昭信守。IN WITNESS WHEREOF, the Parties have caused their authorized representatives to execute this Exclusive Business Cooperation Agreement as of thedate first above written. 乙方：北京中传视讯科技有限公司（盖章）Party B: Beijing Mobile Vision Technology Co., Ltd. (Seal)签字：By: /s/ Song Xuesong 姓名：宋雪松Name: Song Xuesong职务：董事长Title: Chairman of the Board21秘密文件Strictly ConfidentialEX4.16 4 f20f2017ex416_luokung.htm EXCLUSIVE OPTION AGREEMENT BY AND AMONG ZHONGCHUAN TIANXIA INFORMATION TECHNOLOGY(SHENZHEN) CO., LTD., XUESONG SONG, WEILI CHEN, PING WANG, DONGLAI LIU, AND BEIJING MOBILE VISION TECHNOLOGY CO., LTD., DATEDAUGUST 31, 2015Exhibit 4.16独家购买权协议Exclusive Option Agreement本独家购买权协议 (下称“本协议”) 由以下各方于年月日在中华人民共和国（下称“中国”）北京签订：This Exclusive Option Agreement (this “Agreement”) is executed by and among the Parties below as of in Beijing, the People’s Republic of China (the“China” or “PRC”):甲方：中传天下信息科技（深圳）有限公司，一家依照中国法律设立和存在的外商独资企业，地址为深圳市南山区高新中三道2号深圳软件园一期五栋401A；Party A:Zhongchuan Tianxia Information Technology (Shenzhen) Co., Ltd., a whollyforeignowned enterprise organized and existing under the laws of China,with its address at 401A, Building 5, Phase 1, Shenzhen Software Park, No.2 Gaoxin Zhongsan Road, Nanshan District, Shenzhen.乙方：Party B:a)宋雪松Song Xuesong身份证号码:120112196809040417ID Card No.:120112196809040417住所：天津市河西区广东路中裕园33702Address:Zhongyu Yuan 33702, Guangdong Road, Hexi District, Tianjinb)陈蔚力Chen Weili身份证号码:120106197309240516ID Card No.:120106197309240516住所：广东省深圳市宝安区宝城上川路15号Address:Baocheng Shangchuan Road 15, Baoan District, Shenzhen, Guangdong1秘密文件Strictly Confidentialc)王平Wang Ping身份证号码:35020319691030401xID Card No.:35020319691030401x住所：广东省深圳市南山区高新南环路36号彩虹之岸12栋4AAddress:Caihong Zhi’an Building No.12 Suite 4A, Gaoxin Nanhuan Road 36, Nanshan District, Shenzhen, Guangdongd)刘东来Liu Donglai身份证号码:120107196810103912ID Card No.:120107196810103912住所：天津市和平区南京路诚基经贸中心1号楼2门1702号Address:No 1702, Door 2, Build 1, Chengji Economic and Trade Centre, Nanjing Road, Heping District, Tianjin.丙方：北京中传视讯科技有限公司，一家依照中国法律设立和存在的有限责任公司，地址为北京市朝阳区光华路9号SOHO3QLAB32，统一社会信用代码为9111010576215249XM；Party C:Beijing Mobile Vision Technology Co., Ltd., a limited company duly registered in China, with its address at LAB32, SOHO3Q, No 9, Guanghua Road,Chaoyang District, Beijing and its uniform social credit code of 9111010576215249XM.2秘密文件Strictly Confidential在本协议中，甲方、乙方和丙方以下各称“一方”，合称“各方”。In this Agreement, each of Party A, Party B and Party C shall be referred to as a “Party” respectively, and they shall be collectively referred to as the“Parties”.鉴于，乙方系丙方股东并合计持有丙方100%股权，乙方将按本协议之条款授予甲方购买全部或部分该股权的权利。Whereas, Party B are the shareholders of Party C and jointly hold 100% of the equity interest in Party C, and Party B are willing to grant to Party A the rightto acquire such equity interest, in whole or in part, on the terms herein.现各方协商一致，达成如下协议：Now therefore, upon mutual discussion and negotiation, the Parties have reached the following agreement:1.股权买卖Sale and Purchase of Equity Interest1.1授予权利Option Granted乙方在此不可撤销地授予甲方在中国法律允许的前提下，按照甲方自行决定的行使步骤，并按照本协议第1.3条所述的价格，随时一次或多次从乙方购买或指定一人或多人(“被指定人”)从乙方购买其目前和将来所持有的丙方的全部或部分股权（无论乙方出资额和/或持股比例将来是否发生变化）的一项不可撤销的专有权(“股权购买权”)。除甲方和被指定人外，任何第三人均不得享有股权购买权或其他与乙方股权有关的权利。丙方特此同意乙方向甲方授予股权购买权。本款及本协议所规定的“人”指个人、公司、合营企业、合伙、企业、信托或非公司组织。Party B hereby irrevocably grant Party A an irrevocable and exclusive right to purchase, or designate one or more persons (each, a “Designee”) topurchase the equity interests in Party C now and in the future held by Party B (regardless whether Party B’s capital contribution amount and/orpercentage of shareholding will be changed in the future) once or at multiple times at any time in part or in whole at Party A’s sole and absolutediscretion to the extent permitted by Chinese laws and at the price described in Section 1.3 herein (such right being the “Equity Interest PurchaseOption”). Except for Party A and the Designee(s), no other person shall be entitled to the Equity Interest Purchase Option or other rights withrespect to the equity interests of Party B. Party C hereby agrees to the grant by Party B of the Equity Interest Purchase Option to Party A. Theterm “person” as used herein shall refer to individuals, corporations, partnerships, partners, enterprises, trusts or noncorporate organizations.3秘密文件Strictly Confidential1.2行使步骤Steps for Exercise of Equity Interest Purchase Option甲方行使其股权购买权以符合中国法律和法规的规定为前提。甲方行使股权购买权时，应向乙方发出书面通知(“股权购买通知”)，股权购买通知应载明以下事项：(a)甲方关于行使股权购买权的决定；(b)甲方拟从乙方购买的股权份额(“被购买的股权”)；和(c)被购买的股权的买入日期。Subject to the provisions of the laws and regulations of China, Party A may exercise the Equity Interest Purchase Option by issuing a writtennotice to Party B (the “Equity Interest Purchase Option Notice”), specifying: (a) Party A’s decision to exercise the Equity Interest PurchaseOption; (b) the portion of equity interests to be purchased from Party B (the “Optioned Interests”); and (c) the date for purchasing the OptionedInterests.1.3股权买价Equity Interest Purchase Price被购买的股权的买价（“股权买价”）应是行权当时中国法律允许的最低价格。乙方收到该股权对价后，应当提供给丙方与该股权买价相同金额的借款，该借款的期限为20年，且为无息。乙方应当在该借款期限届满时就该借款放弃对丙方的债权。The purchase price of the Optioned Interests (the “Equity Interest Purchase Price”) shall be the lowest price permitted by the laws of China. Afterreceiving the Equity Interest Purchase Price, Party B shall make an interestfree loan equivalent to the amount of Equity Interest Purchase Price toParty C, of which term is 20 years. Each member of Party B shall give up his(her) creditor’s right when the loan term expires.4秘密文件Strictly Confidential1.4转让被购买股权Transfer of Optioned Interests甲方每次行使股权购买权时：For each exercise of the Equity Interest Purchase Option:1.4.1乙方应责成丙方及时召开股东会会议，在该会议上，应通过批准乙方向甲方和/或被指定人转让被购买的股权的决议；Party B shall cause Party C to promptly convene a shareholders meeting, at which a resolution shall be adopted approving Party B’stransfer of the Optioned Interests to Party A and/or the Designee(s);1.4.2乙方应就其向甲方和/或被指定人转让被购买股权取得丙方其他股东同意该转让并放弃优先购买权的书面声明。Party B shall obtain written statements from the other shareholder of Party C giving consent to the transfer of the equity interest to PartyA and/or the Designee(s) and waiving any right of first refusal related thereto.1.4.3乙方应与甲方和/或(在适用的情况下)被指定人按照本协议及股权购买通知的规定，为每次转让签订股权转让协议；Party B shall execute a share transfer contract with respect to each transfer with Party A and/or each Designee (whichever is applicable),in accordance with the provisions of this Agreement and the Equity Interest Purchase Option Notice regarding the Optioned Interests;5秘密文件Strictly Confidential1.4.4有关方应签署所有其他所需协议、协议或文件，取得全部所需的政府批准和同意，并采取所有所需行动，在不附带任何担保权益的情况下，将被购买的股权的有效所有权转移给甲方和/或被指定人并使甲方和/或被指定人成为被购买的股权的登记在册所有人。为本款及本协议的目的，“担保权益”包括担保、抵押、第三方权利或权益，任何购股权、收购权、优先购买权、抵销权、所有权扣留或其他担保安排等；但为了明确起见，不包括在本协议、乙方股权质押协议项下产生的任何担保权益。本款及本协议所规定的“乙方股权质押协议”指甲方、乙方和丙方于本协议签署之日签订的股权质押协议，根据股权质押协议，乙方为担保丙方能履行丙方与甲方签订的独家业务合作协议项下的义务，而向甲方质押其在丙方的全部乙方股权。The relevant Parties shall execute all other necessary contracts, agreements or documents, obtain all necessary government licenses andpermits and take all necessary actions to transfer valid ownership of the Optioned Interests to Party A and/or the Designee(s),unencumbered by any security interests, and cause Party A and/or the Designee(s) to become the registered owner(s) of the OptionedInterests. For the purpose of this Section and this Agreement, “security interests” shall include securities, mortgages, third party’s rightsor interests, any stock options, acquisition right, right of first refusal, right to offset, ownership retention or other security arrangements,but shall be deemed to exclude any security interest created by this Agreement and Party B’s Equity Interest Pledge Agreement. “PartyB’s Equity Interest Pledge Agreement” as used in this Section and this Agreement shall refer to the Equity Interest Pledge Agreementexecuted by and among Party A, Party B and Party C on the date of this Agreement, whereby Party B pledge all of their equity interests inParty C to Party A, in order to guarantee Party C’s performance of its obligations under the Exclusive Business Corporation Agreementexecuted by and between Party C and Party A.6秘密文件Strictly Confidential2.知识产权独家购买权Exclusive Option regarding the Intellectual Property Rights2.1本协议签订之日起，若乙方拟转让、出售或以其他方式处置（任一处置方式以下简称“转让”）其拥有或持有的全部或部分知识产权（以下称“知识产权”，定义见第2.4条），甲方有权独家购买该等知识产权。From the date hereof, if Party B proposes to transfer, sell or dispose of (each, a “transfer”) all or any part of the intellectual property rights ownedor held by Party B (“IPR”), Party A shall have exclusive option.2.2若乙方有意转让全部或部分知识产权，应事先向甲方发出书面通知(“转让通知”)，转让通知应载明以下事项：(a) 乙方关于转让知识产权的意向；(b) 乙方拟转让的知识产权清单(“拟转让知识产权”)及转让的价格和其他条件。转让通知视为乙方向甲方发出的一份要约，按照该要约，乙方同意按转让通知中指定的价格条件向甲方转让全部或部分拟转让知识产权。Prior to Party B proposes to transfer all or any part of its IPR, Party B shall give Party A a written notice (“Transfer Notice”), which shall specify (a)Party B’s intention to make the transfer; (b) the list of IPR to be transferred (“Offered IPR”) and the consideration and other conditions uponwhich the transfer is to be made. The Transfer Notice constitutes Party B’s offer given to Party A, pursuant to which, Party B agrees to transfer allor any part of its Offered IPR to Party A based on the same conditions described in the Transfer Notice.7秘密文件Strictly Confidential2.3甲方收到转让通知后，有权在30日内选择按照转让通知中列明的转让价格和条件购买拟转让知识产权。如果甲方行使其独家购买权，双方应于甲方收到转让通知后45日内签订有关的知识产权转让协议，乙方应办理法律规定的知识产权转让的批准和登记手续。Party A shall have an option for a period of 30 days from Party A’s receipt of the Transfer Notice to elect to purchase the Offered IPR at the sameprice and subject to the same conditions as described in the Transfer Notice. If Party A decides to exercise its exclusive option, the parties shallenter into relevant IPR transfer agreement within 45 days upon Party A’s receipt of the Transfer Notice and Party B is responsible to complete allrelated approvals and registrations formalities as prescribed by the PRC law.2.4本协议第2条所称“知识产权”指任何知识产权，包括但不限于著作权、专利权、专利申请权、商标、域名、软件、专有技术，并包括前述知识产权申请权利以及登记注册的权利，以及其他所有与前述知识产权有关的权利和权益。The “IPR” referred to in this Article 2 means any intellectual property rights, including, without limitations, copyrights, patents, patentapplications, trademarks, domain names, software and knowhow together with (a) all rights to apply for or register any of the foregoing and (b) allother rights and interests to any of the foregoing.8秘密文件Strictly Confidential3.承诺Covenants3.1有关丙方的承诺Covenants regarding Party C乙方（作为丙方的股东）和丙方在此承诺：Party B (as the shareholders of Party C) and Party C hereby covenant as follows:3.1.1未经甲方的事先书面同意，不以任何形式补充、更改或修改丙方公司章程文件，增加或减少其注册资本，或以其他方式改变其注册资本结构；Without the prior written consent of Party A, they shall not in any manner supplement, change or amend the articles of association andbylaws of Party C, increase or decrease its registered capital, or change its structure of registered capital in other manners;3.1.2按照良好的财务和商业标准及惯例，保持其公司的存续，审慎地及有效地经营其业务和处理事务；They shall maintain Party C’s corporate existence in accordance with good financial and business standards and practices by prudentlyand effectively operating its business and handling its affairs;3.1.3未经甲方的事先书面同意，不在本协议签署之日起的任何时间出售、转让、抵押或以其他方式处置丙方的任何资产、业务或收入的合法或受益权益，或允许在其上设置任何其他担保权益；Without the prior written consent of Party A, they shall not at any time following the date hereof, sell, transfer, mortgage or dispose of inany manner any assets of Party C or legal or beneficial interest in the business or revenues of Party C, or allow the encumbrance thereonof any security interest;3.1.4未经甲方的事先书面同意，不发生、继承、保证或容许存在任何债务，但(i)正常或日常业务过程中产生而不是通过借款方式产生的债务；和(ii)已向甲方披露和得到甲方书面同意的债务除外；Without the prior written consent of Party A, they shall not incur, inherit, guarantee or suffer the existence of any debt, except for (i)debts incurred in the ordinary course of business other than through loans; and (ii) debts disclosed to Party A for which Party A’swritten consent has been obtained;9秘密文件Strictly Confidential3.1.5一直在正常业务过程中经营所有业务，以保持丙方的资产价值，不进行任何足以影响其经营状况和资产价值的作为/不作为；They shall always operate all of Party C’s businesses during the ordinary course of business to maintain the asset value of Party C andrefrain from any action/omission that may affect Party C’s operating status and asset value;3.1.6未经甲方的事先书面同意，不得让丙方签订任何重大协议，但在正常业务过程中签订的协议除外(就本段而言，如果一份协议的价值超过【人民币10万元】，即被视为重大协议)；Without the prior written consent of Party A, they shall not cause Party C to execute any major contract, except the contracts in theordinary course of business (for purpose of this subsection, a contract with a value exceeding RMB 100,000 shall be deemed a majorcontract);3.1.7未经甲方的事先书面同意，丙方不得向任何人提供贷款或信贷；Without the prior written consent of Party A, they shall not cause Party C to provide any person with any loan or credit;3.1.8应甲方要求，向其提供所有关于丙方的营运和财务状况的资料；They shall provide Party A with information on Party C’s business operations and financial condition at Party A’s request;10秘密文件Strictly Confidential3.1.9如甲方提出要求，丙方应从甲方接受的保险公司处购买和持有有关其资产和业务的保险，该保险的金额和险种应与经营类似业务的公司一致；If requested by Party A, they shall procure and maintain insurance in respect of Party C’s assets and business from an insurance carrieracceptable to Party A, at an amount and type of coverage typical for companies that operate similar businesses;3.1.10未经甲方的事先书面同意，丙方不得与任何人合并或联合，或对任何人进行收购或投资；Without the prior written consent of Party A, they shall not cause or permit Party C to merge, consolidate with, acquire or invest in anyperson;3.1.11将发生的或可能发生的与丙方资产、业务或收入有关的诉讼、仲裁或行政程序立即通知甲方；They shall immediately notify Party A of the occurrence or possible occurrence of any litigation, arbitration or administrative proceedingsrelating to Party C’s assets, business or revenue;3.1.12为保持丙方对其全部资产的所有权，签署所有必要或适当的文件，采取所有必要或适当的行动和提出所有必要或适当的控告或对所有索偿进行必要和适当的抗辩；To maintain the ownership by Party C of all of its assets, they shall execute all necessary or appropriate documents, take all necessary orappropriate actions and file all necessary or appropriate complaints or raise necessary and appropriate defenses against all claims;11秘密文件Strictly Confidential3.1.13未经甲方事先书面同意，不得以任何形式派发股息予各股东，但一经甲方要求，丙方应立即将其所有可分配利润全部立即分配给其各股东；及Without the prior written consent of Party A, they shall ensure that Party C shall not in any manner distribute dividends to itsshareholders, provided that upon Party A’s written request, Party C shall immediately distribute all distributable profits to itsshareholders; and3.1.14根据甲方的要求，委任由其指定的任何人士出任丙方的董事和/或执行董事。At the request of Party A, they shall appoint any persons designated by Party A as the director and/or executive director of Party C.3.2乙方和丙方的承诺Covenants of Party B and Party C乙方承诺：Party B hereby covenant as follows:3.2.1未经甲方的事先书面同意，不出售、转让、抵押或以其他方式处置其拥有的丙方的股权的合法或受益权益，或允许在其上设置任何其他担保权益，但根据乙方签署的《股权质押协议》在该股权上设置的质押则除外；Without the prior written consent of Party A, Party B shall not sell, transfer, mortgage or dispose of in any other manner any legal orbeneficial interest in the equity interests in Party C held by Party B, or allow the encumbrance thereon of any security interest, except forthe pledge placed on these equity interests in accordance with Party B’s Equity Interest Pledge Agreement;12秘密文件Strictly Confidential3.2.2促使丙方股东会和/或执行董事不批准在未经甲方的事先书面同意的情况下，出售、转让、抵押或以其他方式处置任何乙方持有之丙方的股权的合法权益或受益权，或允许在其上设置任何其他担保权益，但批准根据乙方签署的《股权质押协议》在乙方股权上设置的质押则除外；Party B shall cause the shareholders’ meeting and/or the executive director of Party C not to approve the sale, transfer, mortgage ordisposition in any other manner of any legal or beneficial interest in the equity interests in Party C held by Party B, or allow theencumbrance thereon of any security interest, without the prior written consent of Party A, except for the pledge placed on these equityinterests in accordance with Party B’s Equity Interest Pledge Agreement;3.2.3未经甲方的事先书面同意的情况下，对于丙方与任何人合并或联合，或对任何人进行收购或投资，乙方将促成丙方股东会或执行董事不予批准；Party B shall cause the shareholders’ meeting or the executive director of Party C not to approve the merger or consolidation with anyperson, or the acquisition of or investment in any person, without the prior written consent of Party A;3.2.4将发生的或可能发生的任何关于其所拥有的股权的诉讼、仲裁或行政程序立即通知甲方；Party B shall immediately notify Party A of the occurrence or possible occurrence of any litigation, arbitration or administrativeproceedings relating to the equity interests in Party C held by Party B;13秘密文件Strictly Confidential3.2.5促使丙方股东会或执行董事表决赞成本协议规定的被购买的股权的转让并应甲方之要求采取其他任何行动；Party B shall cause the shareholders’ meeting or the executive director of Party C to vote their approval of the transfer of the OptionedInterests as set forth in this Agreement and to take any and all other actions that may be requested by Party A;3.2.6为保持其对股权的所有权，签署所有必要或适当的文件，采取所有必要或适当的行动和提出所有必要或适当的控告或对所有索偿进行必要和适当的抗辩；To the extent necessary to maintain Party B’s ownership in Party C, Party B shall execute all necessary or appropriate documents, take allnecessary or appropriate actions and file all necessary or appropriate complaints or raise necessary and appropriate defenses against allclaims;3.2.7应甲方的要求，委任由其指定的任何人士出任丙方的董事和/或执行董事；Party B shall appoint any designee of Party A as the director and/or executive director of Party C, at the request of Party A;3.2.8经甲方随时要求，应向其指定的代表在任何时间无条件地根据本协议的股权购买权立即转让其股权，并放弃其对其他现有股东进行上述股权转让所享有的优先购买权（如有的话）；和At the request of Party A at any time, Party B shall promptly and unconditionally transfer its equity interests in Party C to Party A’sDesignee(s) in accordance with the Equity Interest Purchase Option under this Agreement, and Party B hereby waives its right of firstrefusal (if any) to the share transfer by the other existing shareholder of Party C (if any); and14秘密文件Strictly Confidential3.2.9严格遵守本协议及各方共同或分别签订的其他协议的各项规定，切实履行该等协议项下的各项义务，并不进行任何足以影响该等协议的有效性和可执行性的作为/不作为。如果乙方对于本协议项下或乙方股权质押协议下或对甲方的授权委托书中的股权，还留存有任何权利，除非甲方书面指示，否则乙方仍不得行使该权利。Party B shall strictly abide by the provisions of this Agreement and other contracts jointly or separately executed by and among Party B,Party C and Party A, perform the obligations hereunder and thereunder, and refrain from any action/omission that may affect theeffectiveness and enforceability thereof. To the extent that Party B has any remaining rights with respect to the equity interests subject tothis Agreement hereunder or under Party B’s Equity Interest Pledge Agreement or under the Power of Attorney granted in favor of PartyA, Party B shall not exercise such rights except in accordance with the written instructions of Party A.4.陈述和保证Representations and Warranties乙方和丙方特此在本协议签署之日和每一个转让日向甲方共同及分别陈述和保证如下：Party B and Party C hereby represent and warrant to Party A, jointly and severally, as of the date of this Agreement and each date of transfer of theOptioned Interests, that:4.1其具有签订和交付本协议和其为一方的、根据本协议为每一次转让被购买的股权而签订的任何股权转让协议(各称为"转让协议")，并履行其在本协议和任何转让协议项下的义务的权力和能力。乙方和丙方同意在甲方行使购买权时，他们将签署与本协议条款一致的转让协议。本协议和其是一方的各转让协议一旦签署后，构成或将对其构成合法、有效及具有约束力的义务并可按照其条款对其强制执行；They have the authority to execute and deliver this Agreement and any share transfer contracts to which they are a party concerning theOptioned Interests to be transferred thereunder (each, a “Transfer Contracts”), and to perform their obligations under this Agreement and anyTransfer Contracts. Party B and Party C agree to enter into Transfer Contracts consistent with the terms of this Agreement upon Party A’s exerciseof the Equity Interest Purchase Option. This Agreement and the Transfer Contracts to which they are a party constitute or will constitute theirlegal, valid and binding obligations and shall be enforceable against them in accordance with the provisions thereof;15秘密文件Strictly Confidential4.2无论是本协议或任何转让协议的签署和交付还是其在本协议或任何转让协议项下的义务的履行均不会：(i)导致违反任何有关的中国法律；(ii)与丙方章程或其他组织文件相抵触；(iii)导致违反其是一方或对其有约束力的任何协议或文件，或构成其是一方或对其有约束力的任何协议或文件项下的违约；(iv)导致违反有关向任何一方颁发的任何许可或批准的授予和(或)继续有效的任何条件；或(v)导致向任何一方颁发的任何许可或批准中止或被撤销或附加条件；The execution and delivery of this Agreement or any Transfer Contracts and the obligations under this Agreement or any Transfer Contracts shallnot: (i) cause any violation of any applicable laws of China; (ii) be inconsistent with the articles of association, bylaws or other organizationaldocuments of Party C; (iii) cause the violation of any contracts or instruments to which they are a party or which are binding on them, orconstitute any breach under any contracts or instruments to which they are a party or which are binding on them; (iv) cause any violation of anycondition for the grant and/or continued effectiveness of any licenses or permits issued to either of them; or (v) cause the suspension orrevocation of or imposition of additional conditions to any licenses or permits issued to either of them;4.3乙方对其在丙方拥有的股权拥有良好和可出售的所有权，除乙方签署的《股权质押协议》外，乙方在上述股权上没有设置任何担保权益；Party B have a good and merchantable title to the equity interests in Party C they hold. Except for Party B’s Equity Interest Pledge Agreement,Party B have not placed any security interest on such equity interests;16秘密文件Strictly Confidential4.4目前没有悬而未决的或构成威胁的与丙方的股权、丙方资产有关的或与丙方有关的诉讼、仲裁或行政程序。There are no pending or threatened litigation, arbitration or administrative proceedings relating to the equity interests in Party C, assets of Party Cor Party C.5.生效日Effective Date5.1本协议于各方签署本协议之日生效，有效期10年，经甲方选择可再延长10年。This Agreement shall become effective upon the date hereof, and remain effective for a term of 10 years, and may be renewed for an additional 10years at Party A’s election.5.2若丙方股东发生变化，由新股东签署此协议，在此协议签署之日，原协议自动视为无效。In the event of a change in the shareholders of Party C, the new shareholder should sign this agreement and the original agreement willautomatically be deemed invalid on the date of signing of this agreement.17秘密文件Strictly Confidential6.适用法律与争议解决Governing Law and Resolution of Disputes6.1适用法律Governing law本协议的订立、效力、解释、履行、修改和终止以及争议解决均适用中国正式公布并可公开得到的法律。对中国正式公布并可公开得到的法律没有规定的事项，将适用国际法律原则和惯例。The execution, effectiveness, construction, performance, amendment and termination of this Agreement and the resolution of disputes hereundershall be governed by the formally published and publicly available laws of China. Matters not covered by formally published and publiclyavailable laws of China shall be governed by international legal principles and practices.6.2争议的解决方法Methods of Resolution of Disputes因解释和履行本协议而发生的任何争议，本协议各方应首先通过友好协商的方式加以解决。如果在一方向其他方发出要求协商解决的书面通知后30天之内争议仍然得不到解决，则任何一方均可将有关争议提交给中国国际经济贸易仲裁委员会，由该会按照其届时有效的仲裁规则仲裁解决。仲裁应在北京进行，使用之语言为中文。仲裁裁决是终局性的，对各方均有约束力。In the event of any dispute with respect to the construction and performance of this Agreement, the Parties shall first resolve the dispute throughfriendly negotiations. In the event the Parties fail to reach an agreement on the dispute within 30 days after either Party’s request to the otherParties for resolution of the dispute through negotiations, either Party may submit the relevant dispute to the China International Economic andTrade Arbitration Commission for arbitration, in accordance with its then effective arbitration rules. The arbitration shall be conducted in Beijing,and the language used in arbitration shall be Chinese. The arbitration award shall be final and binding on all Parties.18秘密文件Strictly Confidential7.税款、费用Taxes and Fees每一方应承担根据中国法律因准备和签署本协议和各转让协议以及完成本协议和各转让协议拟定的交易而由该方发生的或对其征收的任何和全部的转让和注册的税、花费和费用。Each Party shall pay any and all transfer and registration tax, expenses and fees incurred thereby or levied thereon in accordance with the laws of China inconnection with the preparation and execution of this Agreement and the Transfer Contracts, as well as the consummation of the transactionscontemplated under this Agreement and the Transfer Contracts.8.通知Notices8.1本协议项下要求或发出的所有通知和其他通信应通过专人递送、挂号邮寄、邮资预付或商业快递服务或传真的方式发到该方下列地址。每一通知还应再以电子邮件送达。该等通知视为有效送达的日期按如下方式确定：All notices and other communications required or permitted to be given pursuant to this Agreement shall be delivered personally or sent byregistered mail, postage prepaid, by a commercial courier service or by facsimile transmission to the address of such Party set forth below. Aconfirmation copy of each notice shall also be sent by email. The dates on which notices shall be deemed to have been effectively given shall bedetermined as follows:8.1.1通知如果是以专人递送、快递服务或挂号邮寄、邮资预付发出的，则以于设定为通知的地址在接收或拒收之日为有效送达日。Notices given by personal delivery, by courier service or by registered mail, postage prepaid, shall be deemed effectively given on thedate of receipt or refusal at the address specified for notices.19秘密文件Strictly Confidential8.1.2通知如果是以传真发出的，则以成功传送之日为有效送达日（应以自动生成的传送确认信息为证）。Notices given by facsimile transmission shall be deemed effectively given on the date of successful transmission (as evidenced by anautomatically generated confirmation of transmission).8.2为通知的目的，各方地址如下：For the purpose of notices, the addresses of the Parties are as follows:甲方：中传天下信息科技（深圳）有限公司Party A:Zhongchuan Tianxia Information Technology (Shenzhen) Co., Ltd.地址：深圳市南山区高新中三道2号深圳软件园一期五栋401AAddress:401A, Building 5, Phase 1, Shenzhen Software Park, No.2 Gaoxin Zhongsan Road, Nanshan District, Shenzhen.收件人：洪婷Attn:Hong Ting乙方：Party B: 宋雪松Song Xuesong住所：天津市河西区广东路中裕园33702Address:Zhongyu Yuan 33702, Guangdong Road, Hexi District, Tianjin20秘密文件Strictly Confidential陈蔚力Chen Weili住所：广东省深圳市宝安区宝城上川路15号Address:Baocheng Shangchuan Road 15, Baoan District, Shenzhen, Guangdong王平Wang Ping住所：广东省深圳市南山区高新南环路36号彩虹之岸12栋4AAddress:Caihong Zhi’an Building No.12 Suite 4A, Gaoxin Nanhuan Road 36, Nanshan District, Shenzhen, Guangdong刘东来Liu Donglai住所：天津市和平区南京路诚基经贸中心1号楼2门1702号Address:No 1702, Door 2, Build 1, Chengji Economic and Trade Centre, Nanjing Road, Heping District, Tianjin.丙方：北京中传视讯科技有限公司Party C:Beijing Mobile Vision Technology Co., Ltd.地址：北京市朝阳区光华路9号SOHO3QLAB32Address: LAB32, SOHO3Q, No 9, Guanghua Road, Chaoyang District, Beijing .收件人：宋雪松Attn: Song Xuesong8.3任何一方可按本条规定随时给其他方发出通知来改变其接收通知的地址。Any Party may at any time change its address for notices by a notice delivered to the other Parties in accordance with the terms hereof.21秘密文件Strictly Confidential9.保密责任Confidentiality各方承认及确定彼此就有关本协议而交换的任何口头或书面资料均属机密资料。各方应当对所有该等资料予以保密，而在未得其他方书面同意前，不得向任何第三者披露任何有关资料，惟下列情况除外：(a)公众人士知悉或将会知悉该等资料(并非由接受资料之一方擅自向公众披露)；(b)适用法律法规或股票交易的规则或规例所需披露之资料；或(c)由任何一方就本协议所述交易而需向其法律或财务顾问披露之资料而该法律或财务顾问亦需遵守与本条款相类似之保密责任。如任何一方工作人员或聘请机构的泄密均视为该方的泄密，需依本协议承担违约责任。无论本协议以任何理由终止，本条款仍然生效。The Parties acknowledge that any oral or written information exchanged among them with respect to this Agreement is confidential information. Each Partyshall maintain the confidentiality of all such information, and without obtaining the written consent of other Parties, it shall not disclose any relevantinformation to any third parties, except in the following circumstances: (a) such information is or will be in the public domain (provided that this is not theresult of a public disclosure by the receiving party); (b) information disclosed as required by applicable laws or rules or regulations of any stock exchange;or (c) information required to be disclosed by any Party to its legal counsel or financial advisor regarding the transaction contemplated hereunder, and suchlegal counsel or financial advisor are also bound by confidentiality duties similar to the duties in this section. Disclosure of any confidential information bythe staff members or agency hired by any Party shall be deemed disclosure of such confidential information by such Party, which Party shall be held liablefor breach of this Agreement. This Section shall survive the termination of this Agreement for any reason.22秘密文件Strictly Confidential10.进一步保证Further Warranties各方同意迅速签署为执行本协议的各项规定和目的而合理需要的或对其有利的文件，以及为执行本协议的各项规定和目的而采取合理需要的或对其有利的进一步行动。The Parties agree to promptly execute documents that are reasonably required for or are conducive to the implementation of the provisions and purposes ofthis Agreement and take further actions that are reasonably required for or are conducive to the implementation of the provisions and purposes of thisAgreement.11.其他Miscellaneous11.1修订、修改与补充Amendment, change and supplement对本协议作出修订、修改与补充，必须经每一方签署书面协议。Any amendment, change and supplement to this Agreement shall require the execution of a written agreement by all of the Parties.11.2完整协议Entire agreement除了在本协议签署后所作出的书面修订、补充或修改以外，本协议构成本协议各方就本协议标的物所达成的完整协议，取代在此之前就本协议标的物所达成的所有口头或书面的协商、陈述和协议。 Except for the amendments, supplements or changes in writing executed after theexecution of this Agreement, this Agreement shall constitute the entire agreement reached by and among the Parties hereto with respect to thesubject matter hereof, and shall supercede all prior oral and written consultations, representations and contracts reached with respect to thesubject matter of this Agreement.23秘密文件Strictly Confidential11.3标题Headings本协议的标题仅为方便阅读而设，不应被用来解释、说明或在其他方面影响本协议各项规定的含义。The headings of this Agreement are for convenience only, and shall not be used to interpret, explain or otherwise affect the meanings of theprovisions of this Agreement.11.4语言Language本协议以中文和英文书就，一式八份，乙方共计六名股东以及甲方、丙方各持一份，具有同等效力；中英文版本如有冲突，应以中文版为准。This Agreement is written in both Chinese and English language in eight copies, the 6 shareholders of Party B, Party A and Party C having onecopy with equal legal validity respectively; in case there is any conflict between the Chinese version and the English version, the Chinese versionshall prevail.11.5可分割性Severability如果本协议有任何一条或多条规定根据任何法律或法规在任何方面被裁定为无效、不合法或不可执行，本协议其余规定的有效性、合法性或可执行性不应因此在任何方面受到影响或损害。各方应通过诚意磋商，争取以法律许可以及各方期望的最大限度内有效的规定取代那些无效、不合法或不可执行的规定，而该等有效的规定所产生的经济效果应尽可能与那些无效、不合法或不能强制执行的规定所产生的经济效果相似。In the event that one or several of the provisions of this Agreement are found to be invalid, illegal or unenforceable in any aspect in accordancewith any laws or regulations, the validity, legality or enforceability of the remaining provisions of this Agreement shall not be affected orcompromised in any respect. The Parties shall strive in good faith to replace such invalid, illegal or unenforceable provisions with effectiveprovisions that accomplish to the greatest extent permitted by law and the intentions of the Parties, and the economic effect of such effectiveprovisions shall be as close as possible to the economic effect of those invalid, illegal or unenforceable provisions.24秘密文件Strictly Confidential11.6继任者Successors本协议对各方各自的继任者和各方所允许的受让方应具有约束力并对其有利。This Agreement shall be binding on and shall inure to the interest of the respective successors of the Parties and the permitted assigns of suchParties.11.7继续有效Survival11.7.1协议期满或提前终止前因本协议而发生的或到期的任何义务在本协议期满或提前终止后继续有效。Any obligations that occur or that are due as a result of this Agreement upon the expiration or early termination of this Agreement shallsurvive the expiration or early termination thereof.11.7.2本协议第5、6、9条和本第11.7条的规定在本协议终止后继续有效。The provisions of Articles 5, 6, 9 and this Section 11.7 shall survive the termination of this Agreement.25秘密文件Strictly Confidential11.8弃权Waivers任何一方可以对本协议的条款和条件作出弃权，但必须经书面作出并经各方签字。一方在某种情况下就其他方的违约所作的弃权不应被视为该方在其他情况下就类似的违约已经对其他方作出弃权。Any Party may waive the terms and conditions of this Agreement, provided that such a waiver must be provided in writing and shall require thesignatures of the Parties. No waiver by any Party in certain circumstances with respect to a breach by other Parties shall operate as a waiver bysuch a Party with respect to any similar breach in other circumstances.本页其余部分刻意留为空白The Remainder of this page is intentionally left blank26秘密文件Strictly Confidential有鉴于此，各方已自行或使得其各自授权代表于文首所载日期签署本独家购买权协议。IN WITNESS WHEREOF, the Parties have executed, or caused their respective duly authorized representatives to execute, this Exclusive Option Agreement as ofthe date first above written.甲方：中传天下信息科技（深圳）有限公司（盖章）Party A: Zhongchuan Tianxia Information Technology (Shenzhen) Co., Ltd. (Seal)签字：By:/s/ Hong Ting姓名：洪婷Name: Hong Ting职务：总经理Title: General Manager秘密文件 Strictly Confidential有鉴于此，各方已自行或使得其各自授权代表于文首所载日期签署本独家购买权协议。IN WITNESS WHEREOF, the Parties have executed, or caused their respective duly authorized representatives to execute, this Exclusive Option Agreement as ofthe date first above written.乙方：Party B:宋雪松Song Xuesong签字：By:/s/ Song Xuesong秘密文件 Strictly Confidential有鉴于此，各方已自行或使得其各自授权代表于文首所载日期签署本独家购买权协议。IN WITNESS WHEREOF, the Parties have executed, or caused their respective duly authorized representatives to execute, this Exclusive Option Agreement as ofthe date first above written.乙方：Party B:陈蔚力Chen Weili签字：By:/s/ Chen Weili秘密文件 Strictly Confidential有鉴于此，各方已自行或使得其各自授权代表于文首所载日期签署本独家购买权协议。IN WITNESS WHEREOF, the Parties have executed, or caused their respective duly authorized representatives to execute, this Exclusive Option Agreement as ofthe date first above written.乙方：Party B:王平Wang Ping签字：By:/s/ Wang Ping秘密文件 Strictly Confidential有鉴于此，各方已自行或使得其各自授权代表于文首所载日期签署本独家购买权协议。IN WITNESS WHEREOF, the Parties have executed, or caused their respective duly authorized representatives to execute, this Exclusive Option Agreement as ofthe date first above written.乙方：Party B:刘东来Liu Donglai签字：By:/s/ Liu Donglai秘密文件 Strictly Confidential有鉴于此，各方已自行或使得其各自授权代表于文首所载日期签署本独家购买权协议。IN WITNESS WHEREOF, the Parties have executed, or caused their respective duly authorized representatives to execute, this Exclusive Option Agreement as ofthe date first above written.丙方：北京中传视讯科技有限公司（盖章）Party B: Beijing Mobile Vision Technology Co., Ltd. (Seal)签字：By:/s/ Song Xuesong姓名：宋雪松Name:Song Xuesong职务：董事长Title:Chairman of the Board秘密文件 Strictly ConfidentialEX4.17 5 f20f2017ex417_luokung.htm EQUITY INTEREST PLEDGE AGREEMENT BY AND AMONG ZHONGCHUAN TIANXIA INFORMATION TECHNOLOGY(SHENZHEN) CO., LTD., XUESONG SONG, WEILI CHEN, PING WANG, DONGLAI LIU, AND BEIJING MOBILE VISION TECHNOLOGY CO., LTD., DATEDAUGUST 31, 2015Exhibit 4.17股权质押协议Equity Interest Pledge Agreement本股权质押协议（下称"本协议”）由下列各方于年月日在中华人民共和国（下称“中国”）北京签订：This Equity Interest Pledge Agreement (this "Agreement") has been executed by and among the following parties on in Beijing, the People’sRepublic of China (the “China” or “PRC”):甲方：中传天下信息科技（深圳）有限公司（下称“质权人”）Party A: Zhongchuan Tianxia Information Technology (Beijing) Co., Ltd. (“Pledgee”)地址：深圳市南山区高新中三道2号深圳软件园一期五栋401AAddress: 401A, Building 5, Phase 1, Shenzhen Software Park, No.2 Gaoxin Zhongsan Road, Nanshan District, Shenzhen统一社会信用代码： 91440300565701058RUniform Social Credit Code: 91440300565701058R乙方(下称“出质人”)：Party B ( “Pledgors”):a)宋雪松Song Xuesong身份证号码:ID Card No.:b)陈蔚力Chen Weili身份证号码:ID Card No.:1秘密文件 Strictly Confidentialc)王平Wang Ping身份证号码:ID Card No.:d)刘东来Liu Donglai身份证号码:ID Card No.:丙方：北京中传视讯科技有限公司Party C: Beijing Mobile Vision Technology Co., Ltd.地址：北京市朝阳区光华路9号SOHO3QLAB32Address: LAB32, SOHO3Q, No 9, Guanghua Road, Chaoyang District, Beijing统一社会信用代码：9111010576215249XMUniform Social Credit Code: 9111010576215249XM在本协议中，质权人、出质人和丙方以下各称“一方”，合称“各方”。In this Agreement, each of Pledgee, Pledgors and Party C shall be referred to as a "Party" respectively, and they shall be collectively referred to as the"Parties".鉴于：Whereas:1．出质人全部为中国境内居民自然人，共同持有丙方100%的股权。丙方是一家在中国注册成立的、主要从事手机视频技术研发、内容制作和产业化市场推广的有限责任公司。丙方有意在此确认出质人和质权人在本协议下的权利和义务并提供必要的协助登记该质权；All of the Pledgors are natural persons resided in PRC, and collectively hold 100% of the equity interest in Party C. Party C is a limited company registered inChina, mainly engaging in mobile video frequency technology research, development, content creation, sale and related industrialization promotion. Party Cacknowledges the respective rights and obligations of Pledgors and Pledgee under this Agreement, and intends to provide any necessary assistance inregistering the Pledge;2．质权人是一家在中国注册的外商独资企业。质权人与丙方于年月日签订了独家业务合作协议；Pledgee is a whollyforeignowned enterprise registered in China. Pledgee and Party C have executed an Exclusive Business Cooperation Agreement as of [*],[*];3．为了保证丙方全面履行独家业务合作协议项下的义务，出质人以其拥有的全部丙方股权向质权人做出质押担保。To ensure that Party C fully performs its obligations under the Exclusive Business Cooperation Agreement, Pledgors hereby pledge to the Pledgee all of theequity interests they hold in Party C.为了履行业务合作协议的条款，各方商定按照以下条款签订本协议。To perform the provisions of the Business Cooperation Agreement, the Parties have mutually agreed to execute this Agreement upon the following terms.2秘密文件 Strictly Confidential1.定义Definitions除非本协议另有规定，下列词语含义为：Unless otherwise provided herein, the terms below shall have the following meanings:1.1质权：指出质人根据本协议第2条给予质权人的担保物权，即指质权人所享有的，以出质人质押给质权人的股权折价或拍卖、变卖该股权的价款优先受偿的权利。Pledge: shall refer to the security interest granted by Pledgors to Pledgee pursuant to Article 2 of this Agreement, i.e., the right of Pledgee to becompensated on a preferential basis with the conversion, auction or sales price of the Equity Interest.1.2股权：指出质人现在和将来（通过增资和/或转股）合法持有的其在丙方的全部股权权益。Equity Interest: shall refer to all of the equity interest in Party C lawfully, held now and to be held (through capital increase and/or equity transfer)hereafter by Pledgors.1.3质押期限：指本协议第3条规定的期间。Term of Pledge: shall refer to the term set forth in Article 3 of this Agreement.1.4业务合作协议：指丙方与质权人于本协议日签订的独家业务合作协议。Business Cooperation Agreement: shall refer to the Exclusive Business Cooperation Agreement executed by and between Party C and Pledgee on thedate of this Agreement.1.5违约事件：指本协议第7条所列任何情况。Event of Default: shall refer to any of the circumstances set forth in Article 7 of this Agreement.1.6违约通知：指质权人根据本协议发出的宣布违约事件的通知。Notice of Default: shall refer to the notice issued by Pledgee in accordance with this Agreement declaring an Event of Default.3秘密文件 Strictly Confidential2.质权The Pledge作为丙方按时和全额支付业务合作协议项下质权人应得的任何或全部的款项，包括但不限于业务合作协议中规定的咨询和服务费的担保（无论该等费用的到期应付是由于到期日的到来、提前收款的要求或其它原因），以及丙方充分履行其在业务合作协议项下其他所有义务（丙方按时和全额支付业务合作协议项下甲方应得的任何或全部的款项及丙方在业务合作协议项下其他所有义务，以下统称为“被担保债务”）的担保，出质人特此将其现有或将拥有的丙方的全部股权权益质押给质权人。As collateral security for the timely and complete payment and performance when due (whether at stated maturity, by acceleration or otherwise) of any or all ofthe payments due (the “all payments in pledge”) by Party C, including without limitation the consulting and services fees payable to the Pledgee under theBusiness Cooperation Agreement, Pledgors hereby pledge to Pledgee a first security interest in all of Pledgors’ right, title and interest, whether now owned orhereafter acquired by Pledgors, in the Equity Interest of Party C.3.质押期限Term of Pledge3.1本质权自本协议项下的股权出质在相应的工商行政管理机关登记之日起生效，质权有效期持续到业务合作协议下所有丙方欠付质权人的款项结清为止。出质人和丙方应（一）自本协议签署之日起3个工作日内，将本协议的质权登记在丙方股东名册上，并（二）自本协议签署之日起10个工作日内向相应的工商行政管理机关申请登记本协议项下的质权。各方共同确认，为办理股权质押工商登记手续，各方及丙方其他股东应按照丙方所在地工商行政管理部门要求的形式签署、真实反映本协议项下质权信息的《股权质押合同》（以下简称“工商登记质押合同”）提交给工商管理机关，工商登记质押合同中未约定事项，仍以本协议约定为准。出质人和丙方应当按照中国法律法规和有关工商行政管理机关的各项要求，提交所有必要的文件并办理所有必要手续，保证质权在递交申请后尽快获得登记。如果出质人持有的丙方注册资本数额增加（不管是通过直接认缴丙方的增资还是从其他股东处受让股权），各方一致同意将采取一切必要的行动和签署一切必要的文件以按照登记机关的要求完成质权的变更登记，以确保本协议项下的质权的持续有效。The Pledge shall become effective on such date when the pledge of the Equity Interest contemplated herein has been registered’ with relevantadministration for industry and commerce (the “AIC”). The Pledge shall be continuously valid until all payments due under the Business CooperationAgreement have been fulfilled by Party C. Pledgors and Party C shall (1) register the Pledge in the shareholders' register of Party C within 3 businessdays following the execution of this Agreement, and (2) submit an application to the AIC for the registration of the Pledge of the Equity Interestcontemplated herein within 10 business days following the execution of this Agreement. The parties covenant that for the purpose of registration of thePledge, the parties hereto and all other shareholders of Party C shall submit to the AIC the Equity Interest Pledge Contract in the form required by theAIC at the location of Party C which shall truly reflect the information of the Pledge hereunder (the “AIC Pledge Contract”). For matters not specified inthe AIC Pledge Contract, the parties shall be bound by the provisions of this Agreement. Pledgors and Party C shall submit all necessary documentsand complete all necessary procedures, as required by the PRC laws and regulations and the relevant AIC, to ensure that the Pledge of the EquityInterest shall be registered with the AIC as soon as possible after filing. In the event that the amount of registered capital held by Pledgors is increased(either by subscribing increased registered capital from Party C or acquiring equity interest from other shareholders), the Parties hereto agree that theyshall take any necessary action and execute any necessary document to complete the registration of change of Pledge according to the requirement ofAIC so that the Pledge in this Agreement remains effective.4秘密文件 Strictly Confidential3.2质押期限内，如丙方未按业务合作协议交付咨询服务费等费用，质权人有权但无义务按本协议的规定处分质权。During the Term of Pledge, in the event Party C fails to pay the exclusive consulting or service fees in accordance with the Business CooperationAgreement, Pledgee shall have the right, but not the obligation, to dispose of the Pledge in accordance with the provisions of this Agreement.4.质权凭证的保管Custody of Records for Equity Interest subject to Pledge4.1在本协议规定的质押期限内，出质人应将其在丙方的股权出资证明书及记载质权的股东名册交付质权人保管。出质人应在本协议签订之日起一周内将上述股权出资证明书及股东名册交付给质权人。质权人将在本协议规定的全部质押期间一直保管这些项目。During the Term of Pledge set forth in this Agreement, Pledgors shall deliver to Pledgee's custody the capital contribution certificate for the EquityInterest and the shareholders' register containing the Pledge within one week from the execution of this Agreement. Pledgee shall have custody of suchitems during the entire Term of Pledge set forth in this Agreement.4.2在质押期限内，股权所产生的红利应当无条件归质权人所有。Dividends generated by the Equity Interest shall be unconditionally owned by the Pledgee during the Term of Pledge.5秘密文件 Strictly Confidential5.出质人的声明和保证Representations and Warranties of Pledgors5.1出质人是股权唯一的合法所有人。Pledgors are the sole legal and beneficial owners of the Equity Interest.5.2质权人有权以本协议规定的方式处分并转让股权。Pledgee shall have the right to dispose of and transfer the Equity Interest in accordance with the provisions set forth in this Agreement.5.3除本质权之外，出质人未在股权上设置任何其他质押权利或其他担保权益。Except for the Pledge, Pledgors have not placed any security interest or other encumbrance on the Equity Interest.6.出质人的承诺和确认Covenants and Further Agreements of Pledgors6.1在本协议存续期间，所有出质人向质权人承诺，出质人将：All of the Pledgors hereby covenant to the Pledgee, that during the term of this Agreement, Pledgors shall:6.1.1除履行由出质人与质权人、丙方于本协议签署日签订的《独家购买权合同》外，未经质权人事先书面同意，不得转让股权，不得在股权上设立或允许存在任何担保或其他债务负担；not transfer the Equity Interest, place or permit the existence of any security interest or other encumbrance on the Equity Interest, without theprior written consent of Pledgee, except for the performance of the Exclusive Option Agreement executed by Pledgors, the Pledgee and Party Con the execution date of this Agreement;6秘密文件 Strictly Confidential6.1.2遵守并执行所有有关权利质押的法律、法规的规定，在收到有关主管机关就质权发出或制定的通知、指令或建议时，于五日内向质权人出示上述通知、指令或建议，同时遵守上述通知、指令或建议，或按照质权人的合理要求或经质权人同意就上述事宜提出反对意见和陈述；comply with the provisions of all laws and regulations applicable to the pledge of rights, and within 5 days of receipt of any notice, order orrecommendation issued or prepared by relevant competent authorities regarding the Pledge, shall present the aforementioned notice, order orrecommendation to Pledgee, and shall comply with the aforementioned notice, order or recommendation or submit objections andrepresentations with respect to the aforementioned matters upon Pledgee's reasonable request or upon consent of Pledgee;6.1.3将任何可能导致对出质人股权或其任何部分的权利产生影响的事件或收到的通知，以及可能改变出质人在本协议中的任何保证、义务或对出质人履行其在本协议中义务可能产生影响的任何事件或收到的通知及时通知质权人。promptly notify Pledgee of any event or notice received by Pledgors that may have an impact on Pledgee's rights to the Equity Interest or anyportion thereof, as well as any event or notice received by Pledgors that may have an impact on any guarantees and other obligations ofPledgors arising out of this Agreement.6.2出质人同意，质权人按本协议条款取得的对质权享有的权利，不应受到出质人或出质人的继承人或出质人之委托人或任何其他人通过法律程序的中断或妨害。Pledgors agree that the rights acquired by Pledgee in accordance with this Agreement with respect to the Pledge shall not be interrupted or harmed byPledgors or any heirs or representatives of Pledgors or any other persons through any legal proceedings.7秘密文件 Strictly Confidential6.3出质人向质权人保证，为保护或完善本协议对偿付业务合作协议项下被担保债务的担保，出质人将诚实签署、并促使其他与质权有利害关系的当事人签署质权人所要求的所有的权利证书、契约和/或履行并促使其他有利害关系的当事人履行质权人所要求的行为，并为本协议赋予质权人之权利、授权的行使提供便利，与质权人或其指定的人(自然人/法人)签署所有的有关股权所有权的文件，并在合理期间内向质权人提供其认为需要的所有的有关质权的通知、命令及决定。To protect or perfect the security interest granted by this Agreement for payment of all payment in pledge under the Business Cooperation Agreement,Pledgors hereby undertake to execute in good faith and to cause other parties who have an interest in the Pledge to execute all certificates, agreements,deeds and/or covenants required by Pledgee. Pledgors also undertake to perform and to cause other parties who have an interest in the Pledge toperform actions required by Pledgee, to facilitate the exercise by Pledgee of its rights and authority granted thereto by this Agreement, and to enter intoall relevant documents regarding ownership of Equity Interest with Pledgee or designee(s) of Pledgee (natural persons/legal persons). Pledgorsundertake to provide Pledgee within a reasonable time with all notices, orders and decisions regarding the Pledge that are required by Pledgee.6.4出质人向质权人保证，出质人将遵守、履行本协议项下所有的保证、承诺、协议、陈述及条件。如出质人不履行或不完全履行其保证、承诺、协议、陈述及条件，出质人应赔偿质权人由此遭受的一切损失。Pledgors hereby undertake to comply with and perform all guarantees, promises, agreements, representations and conditions under this Agreement. Inthe event of failure the whole or partial performance of its guarantees, promises, agreements, representations and conditions, Pledgors shall indemnifyPledgee for all losses resulting therefrom.8秘密文件 Strictly Confidential7.违约事件Event of Default7.1下列事项均被视为违约事件：The following circumstances shall be deemed Event of Default:7.1.1丙方未能按期、完整履行任何业务合作协议项下责任，包括但不限于丙方未能按期足额支付业务合作协议项下的应付的被担保债务或有违反该协议其他义务的行为；Party C fails to fully and timely fulfill any liabilities under the Business Cooperation Agreement, including without limitation failure to pay infull any of the all payment in pledge payable under the Business Cooperation Agreement or breaches any other obligations of Party Cthereunder;7.1.2出质人或丙方实质违反本协议的任何条款；Pledgors or Party C have committed a material breach of any provisions of this Agreement;7.1.3除本协议第6.1.1条的约定外，出质人舍弃出质的股权或未获得质权人书面同意而擅自转让或意图转让出质的股权；和Except as expressly stipulated in Section 6.1.1, Pledgors transfers or purports to transfer or abandons the Equity Interest pledged or assignsthe Equity Interest pledged without the written consent of Pledgee; and7.1.4丙方的继承人或代管人只能履行部分或拒绝履行业务合作协议项下的支付责任。The successor or custodian of Party C is capable of only partially perform or refuses to perform the payment obligations under the BusinessCooperation Agreement.9秘密文件 Strictly Confidential7.2如知道或发现本第7.1条所述的任何事项或可能导致上述事项的事件已经发生，出质人应立即以书面形式通知质权人。Upon notice or discovery of the occurrence of any circumstances or event that may lead to the aforementioned circumstances described in Section 7.1,Pledgors shall immediately notify Pledgee in writing accordingly.7.3除非第7.1部分下的违约事件在质权人向出质人发出要求其修补此违约行为通知后的二十（20）天之内已经按质权人要求获得救济，质权人在其后的任何时间，可向出质人发出书面违约通知，要求依据第8部分履行其处理股权的权利。Unless an Event of Default set forth in this Section 7.1 has been successfully resolved to Pledgee's satisfaction within twenty (20) days after the Pledgeedelivers a notice to the Pledgors requesting ratification of such Event of Default, Pledgee may issue a Notice of Default to Pledgors in writing at any timethereafter, demanding the Pledgors to immediately dispose of the Pledge in accordance with the provisions of Article 8 of this Agreement.8.质权的行使Exercise of Pledge8.1在被担保债务被全部清偿或履行前，未经质权人书面同意，出质人不得转让本质权和其拥有的丙方股权。Prior to the full payment of all payments in pledge, without the Pledgee's written consent, Pledgors shall not assign the Pledge or the Equity Interest inParty C.8.2在质权人行使其质押权利时，质权人可以向出质人发出书面违约通知。Pledgee may issue a Notice of Default to Pledgors when exercising the Pledge.10秘密文件 Strictly Confidential8.3在质权人行使其质押权利时，根据中国有关法律的规定，质权人有权按照法定程序处置质押股权。仅在中国法律允许的范围内，对于处置的所得，质权人无需给付出质人；除非中国法律另有规定，出质人特此放弃其可能有的能向质权人要求任何质押股权处置所得的权利；同样，出质人对质权人在该质押股权处置后的亏损也不承担任何义务。When the Pledgor exercises the pledge right, Pledgee is entitled to dispose of the Equity Interest pledged in accordance with applicable PRC laws. Onlyto the extent permitted under applicable PRC laws, Pledgee has no obligation to account to Pledgors for proceeds of disposition of the Equity Interest.Unless otherwise required by PRC laws, Pledgors hereby waive any rights it may have to demand any such accounting from Pledgee; Likewise, in suchcircumstance Pledgors shall have no obligation to Pledgee for any deficiency remaining after such disposition of the Equity Interest pledged.8.4质权人依照本协议处分质权时，出质人和丙方应予以必要的协助，以使质权人实现其质权。When Pledgee disposes of the Pledge in accordance with this Agreement, Pledgors and Party C shall provide necessary assistance to enable Pledgee toenforce the Pledge in accordance with this Agreement.9.转让Assignment9.1除非经质权人事先同意，出质人无权赠予或转让其在本协议项下的权利义务。Without Pledgee's prior written consent, Pledgors shall not have the right to assign or delegate its rights and obligations under this Agreement.11秘密文件 Strictly Confidential9.2本协议对出质人及其继任人和经许可的受让人均有约束力，并且对质权人及每一继任人和受让人有效。This Agreement shall be binding on Pledgors and their successors and permitted assigns, and shall be valid with respect to Pledgee and each of itssuccessors and assigns.9.3经出质人同意，质权人可以在任何时候将其在业务合作协议项下的所有或任何权利和义务转让给其指定的关联方（自然人/法人），在这种情况下，受让人应享有和承担本协议项下质权人享有和承担的权利和义务，如同其作为原协议方应享有和承担的一样。质权人转让业务合作协议项下的权利和义务时，应质权人要求，出质人应就此转让签署有关协议和/或文件。Upon the Pledgors’ agreement, Pledgee may assign any or all of its rights and obligations under the Business Cooperation Agreement to its designee(s)(natural/legal persons) at any time, in which case the assigns shall have the rights and obligations of Pledgee under this Agreement, as if it were theoriginal party to this Agreement. When the Pledgee assigns the rights and obligations under the Business Cooperation Agreement, upon Pledgee'srequest, Pledgors shall execute relevant agreements or other documents relating to such assignment.9.4因转让所导致的质权人变更后，应质权人要求，出质人应与新的质权人签订一份内容与本协议一致的新质押协议，并在相应的工商行政管理机关进行登记。In the event of a change in Pledgee due to an assignment, Pledgors shall, at the request of Pledgee, execute a new pledge agreement with the newpledgee on the same terms and conditions as this Agreement, and register the same with the relevant AIC.12秘密文件 Strictly Confidential9.5出质人应严格遵守本协议和各方单独或共同签署的其他有关协议的规定，包括独家购买权合同和对质权人的授权委托书，履行各协议项下的义务，并不进行任何足以影响协议的有效性和可强制执行性的作为/不作为。除非根据质权人的书面指示，出质人不得行使其对质押股权还留存的权利。Pledgors shall strictly abide by the provisions of this Agreement and other contracts jointly or separately executed by the Parties hereto or any of them,including the Exclusive Option Agreement and the Power of Attorney granted to Pledgee, perform the obligations hereunder and thereunder, and refrainfrom any action/omission that may affect the effectiveness and enforceability thereof. Any remaining rights of Pledgors with respect to the EquityInterest pledged hereunder shall not be exercised by Pledgors except in accordance with the written instructions of Pledgee.10.终止Termination在被担保债务被全部清偿或履行完毕之后，本质权人应在尽早合理可行的时间内办理或配合办理解除质押的手续，出质人与丙方应提供相应的配合与协助。Upon the full payment of all payments in pledge under the Business Cooperation Agreement a, Pledgor shall then, with the assistance of Party B and Party C,go through the procedures of cancellation of pledge rights at a reasonable time as soon as practicable.11.手续费及其他费用Handling Fees and Other Expenses一切与本协议有关的费用及实际开支，其中包括但不限于法律费用、工本费、印花税以及任何其他税收、费用等全部由丙方承担。All fees and out of pocket expenses relating to this Agreement, including but not limited to legal costs, costs of production, stamp tax and any other taxes andfees, shall be borne by Party C.13秘密文件 Strictly Confidential12.保密责任Confidentiality各方承认及确定有关本协议、本协议内容，以及彼此就准备或履行本协议而交换的任何口头或书面资料均被视为保密信息。各方应当对所有该等保密信息予以保密，而在未得到另一方书面同意前，不得向任何第三者披露任何保密信息，惟下列信息除外：(a)公众人士知悉或将会知悉的任何信息（惟并非由接受保密信息之一方擅自向公众披露）；(b)根据适用法律法规、股票交易规则、或政府部门或法院的命令而所需披露之任何信息；或(c)由任何一方就本协议所述交易而需向其股东、投资者、法律或财务顾问披露之信息，而该股东、法律或财务顾问亦需遵守与本条款相类似之保密责任。如任何一方工作人员或聘请机构的泄密均视为该方的泄密，需依本协议承担违约责任。无论本协议以任何理由终止，本条款仍然生效。The Parties acknowledge that the existence and the terms of this Agreement and any oral or written information exchanged between the Parties in connectionwith the preparation and performance this Agreement are regarded as confidential information. Each Party shall maintain confidentiality of all such confidentialinformation, and without obtaining the written consent of the other Party, it shall not disclose any relevant confidential information to any third parties, exceptfor the information that: (a) is or will be in the public domain (other than through the receiving Party’s unauthorized disclosure); (b) is under the obligation tobe disclosed pursuant to the applicable laws or regulations, rules of any stock exchange, or orders of the court or other government authorities; or (c) isrequired to be disclosed by any Party to its shareholders, investors, legal counsels or financial advisors regarding the transaction contemplated hereunder,provided that such shareholders, investors, legal counsels or financial advisors shall be bound by the confidentiality obligations similar to those set forth inthis Section. Disclosure of any confidential information by the staff members or agencies hired by any Party shall be deemed disclosure of such confidentialinformation by such Party, which Party shall be held liable for breach of this Agreement. This Section shall survive the termination of this Agreement for anyreason.14秘密文件 Strictly Confidential13.适用法律和争议的解决Governing Law and Resolution of Disputes13.1本协议的订立、效力、解释、履行、修改和终止以及争议的解决均适用中国法律。The execution, effectiveness, construction, performance, amendment and termination of this Agreement and the resolution of disputes hereunder shallbe governed by the laws of China.13.2因解释和履行本协议而发生的任何争议，本协议各方应首先通过友好协商的方式加以解决。如果在一方向其他方发出要求协商解决的书面通知后30天之内争议仍然得不到解决，则任何一方均可将有关争议提交给中国国际经济贸易仲裁委员会，由该会按照其仲裁规则仲裁解决。仲裁应在北京进行，使用之语言为中文。仲裁裁决是终局性的，对各方均有约束力。In the event of any dispute with respect to the construction and performance of this Agreement, the Parties shall first resolve the dispute throughfriendly negotiations. In the event the Parties fail to reach an agreement on the dispute within 30 days after either Party's request to the other Parties forresolution of the dispute through negotiations, either Party may submit the relevant dispute to the China International Economic and Trade ArbitrationCommission for arbitration, in accordance with its Arbitration Rules. The arbitration shall be conducted in Beijing, and the language used in arbitrationshall be Chinese. The arbitration award shall be final and binding on all Parties.13.3因解释和履行本协议而发生任何争议或任何争议正在进行仲裁时，除争议的事项外，本协议各方仍应继续行使各自在本协议项下的其他权利并履行各自在本协议项下的其他义务。Upon the occurrence of any disputes arising from the construction and performance of this Agreement or during the pending arbitration of any dispute,except for the matters under dispute, the Parties to this Agreement shall continue to exercise their respective rights under this Agreement and performtheir respective obligations under this Agreement.15秘密文件 Strictly Confidential14.通知Notices14.1本协议项下要求或发出的所有通知和其他通信应通过专人递送、挂号邮寄、邮资预付或商业快递服务或传真的方式发到该方下列地址。每一通知还应再以电子邮件送达。该等通知视为有效送达的日期按如下方式确定：All notices and other communications required or permitted to be given pursuant to this Agreement shall be delivered personally or sent by registeredmail, postage prepaid, by a commercial courier service or by facsimile transmission to the address of such party set forth below. A confirmation copy ofeach notice shall also be sent by Email. The dates on which notices shall be deemed to have been effectively given shall be determined as follows:14.1.1通知如果是以专人递送、快递服务或挂号邮寄、邮资预付发出的，则以于设定为通知的地址在接收或拒收之日为有效送达日。Notices given by personal delivery, by courier service or by registered mail, postage prepaid, shall be deemed effectively given on the date ofreceipt or refusal at the address specified for notices.14.1.2通知如果是以传真发出的，则以成功传送之日为有效送达日（应以自动生成的传送确认信息为证）。Notices given by facsimile transmission shall be deemed effectively given on the date of successful transmission (as evidenced by anautomatically generated confirmation of transmission).16秘密文件 Strictly Confidential14.2为通知的目的，各方地址如下：For the purpose of notices, the addresses of the Parties are as follows:甲方：中传天下信息科技（深圳）有限公司Party A: Zhongchuan Tianxia Information Technology (Shenzhen) Co., Ltd.地址：深圳市南山区高新中三道2号深圳软件园一期五栋401AAddress: 401A, Building 5, Phase 1, Shenzhen Software Park, No.2 Gaoxin Zhongsan Road, Nanshan District, Shenzhen.收件人：洪婷Attn: Hong Ting乙方：Party B:a)宋雪松Song Xuesong地址：125.Expenses, including legal fees, incurred by a director in defending any legal, administrative or investigative proceedings may be paid by the Company inadvance of the final disposition of such proceedings upon receipt of an undertaking by or on behalf of the director to repay the amount if it shall ultimatelybe determined that the director is not entitled to be indemnified by the Company in accordance with these Articles.126.Expenses, including legal fees, incurred by a former director in defending any legal, administrative or investigative proceedings may be paid by theCompany in advance of the final disposition of such proceedings upon receipt of an undertaking by or on behalf of the former director to repay the amountif it shall ultimately be determined that the director is not entitled to be indemnified by the Company in accordance with these Articles.127.The indemnification and advancement of expenses provided by, or granted pursuant to, these Articles is not exclusive of any other rights to which theperson seeking indemnification of advancement of expenses may be entitled under any agreement, resolution of members, resolution of disinteresteddirectors or otherwise, both as to acting in the person’s official capacity and as to acting in another capacity while serving as a director of the Company.128.If a person to be indemnified has been successful in defence of any proceedings referred to above the person is entitled to be indemnified against allexpenses, including legal fees, and against all judgments, fines and amounts paid in settlement and reasonably incurred by the person in connection withthe proceedings.129.The Company may purchase and maintain insurance in relation to any person who is or was a director, an officer or a liquidator of the Company, or who atthe request of the Company is or was serving as a director, an officer or a liquidator of, or in any other capacity is or was acting for, another body corporateor a partnership, joint venture, trust or other enterprise, against any liability asserted against the person and incurred by the person in that capacity,whether or not the Company has or would have had the power to indemnify the person against the liability as provided in these Articles.SEAL130.The Company shall have a Seal and may have more than one Seal. References herein to the Seal shall be references to every Seal which shall have beenduly adopted by resolution of directors. The directors shall provide for the safe custody of the Seal and for an imprint thereof to be kept at the office of theregistered agent of the Company. Except as otherwise expressly provided herein, the Seal when affixed to any written instrument, shall be witnessed andattested to by the signature of a director or any other person so authorized from time to time by resolution of directors. Such authorization may be before orafter the Seal is affixed, may be general or specific and may refer to any number of sealings. The Directors may provide for a facsimile of the Seal and of thesignature of any director or authorized person which may be reproduced by printing or other means on any instrument and it shall have the same force andvalidity as if the Seal had been affixed to such instrument and the same had been signed as hereinbefore described.21DISTRIBUTIONS131.The directors of the Company may by resolution authorise a distribution by the Company at any time and of any amount and to any members they think fitif they are satisfied on reasonable grounds that immediately after the distribution;a.the value of the Company’s assets will exceed its liabilities, andb.the Company will be able to pay its debts as they fall due.132.A resolution of the directors passed under the preceding Article shall contain a statement that, in the opinion of the directors, immediately after thedistribution the value of the Company’s assets will exceed its liabilities, and the Company will be able to pay its debts as they fall due.133.If, after a distribution is authorised and before it is made, the directors cease to be satisfied on reasonable grounds that the Company will, immediately afterthe distribution satisfy the solvency test, any distribution made by the Company is deemed not to have been authorised.134.If, by virtue of the preceding Article, a distribution is deemed not to have been authorised, a director who;a.ceased, after authorisation but before the making of the distribution, to be satisfied on reasonable grounds for believing that the company wouldsatisfy the solvency test immediately after the distribution is made; andb.failed to take reasonable steps to prevent the distribution being made;is personally liable to the company to repay to the company so much of the distribution as is not able to be recovered from members.135.A distribution made to a member at a time when the company did not, immediately after the distribution, satisfy the solvency test may be recovered by thecompany from the member unless;a.the member received the distribution in good faith and without knowledge of the company’s failure to satisfy the solvency test;b.the member has altered his position in reliance on the validity of the distribution; andc.it would be unfair to require repayment in full or at all.DISTRIBUTIONS BY WAY OF DIVIDEND136.The Company may by a resolution of directors declare a distribution by way of dividend and pay such distribution in money, shares or other property. Inthe event that distributions by way of dividend are paid in specie the directors shall have responsibility for establishing and recording in the resolution ofdirectors authorizing the distribution by way of dividend, a fair and proper value for the assets to be so distributed.137.The directors may from time to time pay to the members such interim distributions by way of dividend as appear to the directors to be justified by theprofits of the Company.138.The directors may, before declaring any distribution by way of dividend, set aside out of the profits of the Company such sum as they think proper as areserve fund, and may invest the sum so set aside as a reserve fund upon such securities as they may select.139.Notice of any distribution by way of dividend that may have been declared shall be given to each member in the manner hereinafter mentioned and alldistributions by way of dividend unclaimed for 3 years after having been declared may be forfeited by resolution of directors for the benefit of theCompany.140.No distribution by way of dividend shall bear interest as against the Company and no distribution by way of dividend shall be paid on treasury shares orshares held by another company of which the Company holds, directly or indirectly, shares having more than 50 percent of the vote in electing directors.22141.A share issued as a distribution by way of dividend by the Company shall be treated for all purposes as having been issued for money equal to the valuedetermined by resolution of the directors. In the absence of fraud the decision of the directors as to the value of the share is conclusive unless a questionof law is involved.142.A division of the issued and outstanding shares of a class or series of shares into a larger number of shares of the same class or series having aproportionately smaller par value does not constitute a distribution by way of dividend of shares.ACCOUNTS AND AUDIT143.The Company may by resolution of members call for the directors to prepare periodically a profit and loss account and a balance sheet. The profit and lossaccount and balance sheet shall be drawn up so as to give respectively a true and fair view of the profit and loss of the Company for the financial periodand a true and fair view of the state of affairs of the Company as at the end of the financial period.144.The Company may by resolution of members call for the accounts to be examined by auditors.145.Subject to the rules of the Designated Stock Exchange, the first auditors shall be appointed by resolution of directors; subsequent auditors shall beappointed by the Audit Committee and shall hold office until the Audit Committee appoint another independent auditor.146.Subject to the rules of the Designated Stock Exchange, the remuneration of the auditors of the Company shall be fixed by the Audit Committee.147.The auditors shall examine each profit and loss account and balance sheet required to be served on every member of the Company or laid before a meetingof the members of the Company and shall state in a written report whether or nota.in their opinion the profit and loss account and balance sheet give a true and fair view respectively of the profit and loss for the period covered bythe accounts, and of the state of affairs of the Company at the end of that period; andb.all the information and explanations required by the auditors have been obtained.148.The report of the auditors shall be annexed to the accounts and shall be read at the meeting of members at which the accounts are laid before the Companyor shall be served on the members.149.Every auditor of the Company shall have a right of access at all times to the books of account and vouchers of the Company, and shall be entitled to requirefrom the directors and officers of the Company such information and explanations as he thinks necessary for the performance of the duties of the auditors.150.The auditors of the Company shall be entitled to receive notice of, and to attend any meetings of members of the Company at which the Company’s profitand loss account and balance sheet are to be presented.NOTICES151.Any notice, information or written statement to be given by the Company to members may be served in any way by which it can reasonably be expected toreach each member or by mail addressed to each member at the address shown in the share register.152.Any summons, notice, order, document, process, information or written statement to be served on the Company may be served by leaving it, or by sendingit by registered mail addressed to the Company, at its registered office, or by leaving it with, or by sending it by registered mail to, the registered agent ofthe Company.153.Service of any summons, notice, order, document, process, information or written statement to be served on the Company may be proved by showing thatthe summons, notice, order, document, process, information or written statement was delivered to the registered office or the registered agent of theCompany or that it was mailed in such time as to admit to its being delivered to the registered office or the registered agent of the Company in the normalcourse of delivery within the period prescribed for service and was correctly addressed and the postage was prepaid.23PENSION AND SUPERANNUATION FUNDS154.The directors may establish and maintain or procure the establishment and maintenance of any noncontributory or contributory pension orsuperannuation funds for the benefit of, and give or procure the giving of donations, gratuities, pensions, allowances or emoluments to, any persons whoare or were at any time in the employment or service of the Company or any company which is a subsidiary of the Company or is allied to or associated withthe Company or with any such subsidiary, or who are or were at any time directors or officers of the Company or of any such other company as aforesaid orwho hold or held any salaried employment or office in the Company or such other company, or any persons in whose welfare the Company or any suchother company as aforesaid is or has been at any time interested, and to the wives, widows, families and dependents of any such person, and may makepayments for or towards the insurance of any such persons as aforesaid, and may do any of the matters aforesaid either alone or in conjunction with anysuch other company as aforesaid. Subject always to the proposal being approved by resolution of members, a director holding any such employment oroffice shall be entitled to participate in and retain for his own benefit any such donation, gratuity, pension allowance or emolument.VOLUNTARY WINDING UP AND DISSOLUTION155.The Company may voluntarily commence to wind up and dissolve by a resolution of members but if the Company has never issued shares it mayvoluntarily commence to wind up and dissolve by resolution of directors.CONTINUATION156.The Company may by resolution of members or by a resolution passed unanimously by all directors of the Company continue as a company incorporatedunder the laws of a jurisdiction outside the British Virgin Islands in the manner provided under those laws.ARBITRATION157.Whenever any difference arises between the Company on the one hand and any of the members or their executors, administrators or assigns on the otherhand, touching the true intent and construction or the incidence or consequences of these Articles or of the Act, touching anything done or executed,omitted or suffered in pursuance of the Act or touching any breach or alleged breach or otherwise relating to the premises or to these Articles, or to anyAct or Ordinance affecting the Company or to any of the affairs of the Company such difference shall, unless the parties agree to refer the same to a singlearbitrator, be referred to 2 arbitrators one to be chosen by each of the parties to the difference and the arbitrators shall before entering on the referenceappoint an umpire.158.If either party to the reference makes default in appointing an arbitrator either originally or by way of substitution (in the event that an appointed arbitratorshall die, be incapable of acting or refuse to act) for 10 days after the other party has given him notice to appoint the same, such other party may appoint anarbitrator to act in the place of the arbitrator of the defaulting party.We, Portcullis TrustNet (BVI) Limited of Portcullis TrustNet Chambers, P.O. Box 3444, Road Town, Tortola, British Virgin Islands for the purpose of incorporating aBVI Business Company under the laws of the British Virgin Islands hereby sign these Articles of Association the 27th day of October, 2009.Incorporator/s/ Nicole WheatleyPortcullis TrustNet (BVI) LimitedPortcullis TrustNet ChambersP.O. Box 3444Road Town, TortolaBritish Virgin Islands(Sgd. Nicole Wheatley)24EX4.15 3 f20f2017ex415_luokung.htm EXCLUSIVE BUSINESS COOPERATION AGREEMENT BY AND BETWEEN ZHONGCHUAN TIANXIA INFORMATIONTECHNOLOGY (SHENZHEN) CO., LTD., AND BEIJING MOBILE VISION TECHNOLOGY CO., LTD., DATED AUGUST 31, 2015Exhibit 4.15独家业务合作协议Exclusive Business Cooperation Agreement本独家业务合作协议（下称“本协议”）由以下双方于年月日在中华人民共和国（下称“中国”）北京市签署。This Exclusive Business Cooperation Agreement (this “Agreement”) is made and entered into by and between the following parties on in Beijing, thePeople’s Republic of China (“China” or the “PRC”).甲方：中传天下信息科技（深圳）有限公司Party A: Zhongchuan Tianxia Information Technology (Shenzhen) Co., Ltd.地址：深圳市南山区高新中三道2号深圳软件园一期五栋401A Address: 401A, Building 5, Phase 1, Shenzhen Software Park, No.2 Gaoxin Zhongsan Road, Nanshan District, Shenzhen统一社会信用代码：91440300565701058R Uniform Social Credit Code: 91440300565701058R乙方：北京中传视讯科技有限公司Party B: Beijing Mobile Vision Technology Co., Ltd.地址：北京市朝阳区光华路9号SOHO3QLAB32Address: LAB32, SOHO3Q, No 9, Guanghua Road, Chaoyang District, Beijing统一社会信用代码：9111010576215249XMUniform Social Credit Code: 9111010576215249XM甲方和乙方以下各称为“一方”，统称为“双方”。Each of Party A and Party B shall be hereinafter referred to as a “Party” respectively, and as “Parties” collectively.1秘密文件Strictly Confidential鉴于：Whereas,1.甲方是一家在中国注册的外商独资企业，拥有丰富的技术研发和产业化推广相关的管理和投资经验，并提供相关的技术支持和咨询服务；Party A is a whollyforeignowned enterprise established in China, which has rich experience in technology research development and industrializationpromotion management and investment, and provides relevant technical support and consulting services;2.乙方是一家在中国成立的有限责任公司，经中国有关政府部门批准依法主要从事手机视频技术开发、内容制作及市场推广；Party B is a limited company in China, mainly engages in mobile video technology research, development, content creation, sale and related industrialpromotion as approved by the relevant governmental authorities in China;3.甲方同意利用其技术、人员和信息优势，在本协议期间向乙方提供有关手机视频技术开发、内容制作及市场推广以及未来扩大业务规模和业务范围时乙方所需的技术支持、技术咨询等相关服务，乙方同意接受甲方或其指定方按本协议条款的规定提供的各种服务。Party A is willing to provide Party B with technology supports and technology consulting services in connection with mobile video technology research,development, content creation, sale and related industrial promotion and such services in connection with Party B’s extension of business scale orbroadening of businesses during the term of this Agreement, utilizing its advantages in technology, human resources, and information, and Party B iswilling to accept such services provided by Party A or Party A's designee(s), each on the terms set forth herein.2秘密文件Strictly Confidential据此，甲方和乙方经协商一致，达成如下协议：Now, therefore, through mutual discussion, the Parties have reached the following agreements:1.服务提供Services Provided by Party A1.1按照本协议条款和条件，乙方在此委任甲方在本协议期间作为乙方的独家服务提供者向乙方提供全面的和手机视频技术开发、内容制作及市场推广相关以及未来扩大业务规模和业务范围时乙方所需的技术支持、业务支持和相关咨询服务，具体内容包括但不限于以下内容：Party B hereby appoints Party A as Party B's exclusive services provider to provide Party B with complete technical support, business supportand related consulting services in connection with mobile video technology research, development, content creation, sale and related industrialpromotion and such services in connection with Party B’s extension of business scale or broadening of businesses during the term of thisAgreement, in accordance with the terms and conditions of this Agreement, which may include but not limited to:1.1.1为乙方提供其手机视频技术开发、内容制作及市场推广业务所需的一切服务支持，为乙方提供相当于包括总经理、行政人员、管理人员、筹划部门、商业运营、人力资源、财务、会计以及与乙方业务相关的一切业务操作所需人员所能提供的服务内容；managing all aspects of Party B’s business of mobile video technology research, development, content creation, sale and relatedindustrial promotion. In this capacity, Party A will procure or engage for Party B the services of a general manager and other managementstaff, including but not limited to personnel responsible for all administration, operations, planning, business development, humanresources, finance, accounting and other operations related to the Business of Party B;3秘密文件Strictly Confidential1.1.2为乙方制定全部的商业计划、销售目标，并为优化执行该等商业计划设计和建立相应的系统及操作程序；developing all business plans and sales projections of Party B, and for developing and establishing systems and procedures for optimumexecution of the business plans;1.1.3为乙方申请手机视频技术及内容制作相关专利提供咨询服务和支持；consulting services and support in connection with Party B’s applying for mobile video technology related patents and content creation;1.1.4为乙方手机视频技术产业化的发展方向、规模、品牌提升提供咨询服务；consulting services in connection with the development directions, size and business brands promotion of Party B’s mobile videotechnology industrialization;4秘密文件Strictly Confidential1.1.5为乙方提供与业务相关的办公、生产和销售服务，为乙方租赁场所，建立业务相关的系统和程序，满足乙方的其他要求；procuring or obtaining for Party B all office, production and distribution services related to the Business. It shall procure or obtainappropriate leases, establish systems and procedures needed to operate the business, fulfill orders for services;1.1.6尽最大努力为乙方建立手机视频技术销售市场，根据甲方为乙方制定的商业计划及销售目标代表乙方获取客户订单，同时为乙方提供与业务相关的客户服务，建立向客户开具票据的程序和与会计相关的托收服务。using its best efforts to establish mobile video technology related marketing and other structures to obtain orders for services &products from customers on behalf of Party B in accordance with Party B’s business plans, sales projections and objectives (asdeveloped by Party A) and procure or obtain customer services required in connection with the Business. It shall also establishprocedures for invoicing customers, and establish collection services with respect to accounts;1.1.7就乙方的劳动用工方面提供咨询服务和支持，包括但不限于，组织实施对乙方业务人员、行政人员、管理人员等人员进行培训和考核，协助建立健全的人力资源管理制度和实现人力资源的良好配置；consulting services and support regarding labor system of Party B, including but without limitation to labor training and evaluation ofsales person, administrative staff and management person etc. and establishment of human resources management system to well;5秘密文件Strictly Confidential1.1.8提供乙方需要的客户数据统计、分析及相关数据库的建设和维护等咨询服务；providing Party B with compile and analysis of client data and consulting services of establishment and maintenance of data base;1.1.9提供乙方需要的软件和相关技术支持服务；providing software Party B requires and other technical support;1.1.10接受乙方委托，对乙方的手机视频技术研发和产业化推广业务经营进行指导和管理；guiding and management on Party B’s business of mobile video technology research and development and related industrial promotionoperation according to Party B’s commission;1.1.11当乙方业务规模发展或业务范围扩大需要时，购买乙方业务经营需要的设备；in the event of the demand of Party B’s development of business scale or broadening of businesses, purchase the equipments which itneeds for the operation of its business;1.1.12当乙方业务规模发展或业务范围扩大需要时，完成乙方项目中的全部或部分工作；in the event of the demand of Party B’s development of business scale or broadening of businesses, complete the work of Party B’sproject in whole or in party;6秘密文件Strictly Confidential1.1.13当乙方业务规模发展或业务范围扩大需要时，开发新技术；in the event of the demand of Party B’s development of business scale or broadening of businesses, develop new technology;1.1.14乙方委托甲方，且甲方接受委托提供的其他服务。other services Party B appoints Party A to provide and Party A agrees to provide.1.2乙方接受甲方的咨询和服务。乙方进一步同意，除非经甲方事先书面同意，在本协议期间，就本协议约定的服务或其他事宜，乙方不得直接或间接地从任何第三方获得任何与本协议相同或类似的咨询和/或服务，并不得与任何第三方就本协议所述事项建立任何类似的合作关系。双方同意，甲方可以指定其他方（该被指定方可以与乙方签署本协议第1.3条描述的某些协议）为乙方提供本协议约定的服务和/或支持。Party B agrees to accept all the consultations and services provided by Party A. Party B further agrees that unless with Party A's prior writtenconsent, during the term of this Agreement, Party B shall not directly or indirectly accept the same or any similar consultations and/or servicesprovided by any third party and shall not establish similar corporation relationship with any third party regarding the matters contemplated by thisAgreement. Party A may appoint other parties, who may enter into certain agreements described in Section 1.3 with Party B, to provide Party Bwith the consultations and/or services under this Agreement.7秘密文件Strictly Confidential1.3服务的提供方式Service Providing Methodology1.3.1双方同意在本协议有效期内，视情况而定，乙方可以与甲方或甲方指定的其他方进一步签订技术服务协议和/或咨询服务协议，对各项业务培训、技术服务、咨询服务的具体内容、方式、人员、收费等进行约定。Parties agree that during the term of this Agreement, where necessary, Party B may enter into further technical service agreements and/orconsulting service agreements with Party A or any other party designated by Party A, which shall provide the specific contents, manner,personnel, and fees for the specific technical services and consulting services.1.3.2为更好地履行本协议，双方同意，在甲方认为必要时，乙方应在本协议有效期内与甲方或甲方指定的其他方根据业务进展需要随时签署协议，由甲方或其指定方向乙方提供服务。To fulfill this Agreement, Parties agree that during the term of this Agreement, where Party A deems necessary, Party B shall enter intoagreements with Party A or any other party designated by Party A which shall set forth that Party A or any other party designated byParty A provide services to Party B based on the needs of the business of Party B.8秘密文件Strictly Confidential2.服务的价格和支付方式The Calculation and Payment of the Service Fees双方同意，就甲方提供的服务，乙方应向甲方支付服务费（“服务费”）。服务费不应低于乙方税后利润的80%。服务费应当按季支付；经甲方事先书面同意，服务费可以根据乙方的经营需要进行调整。Both Parties agree that, in consideration of the services provided by Party A, Party B shall pay Party A fees (the “Service Fees”), which shall not be lessthan 80% of Party B’s aftertax profits . The Service Fees shall be due and payable on a quarterly basis; upon the prior written consent by Party A, the rateof Service Fees may be adjusted pursuant to the operational needs of Party B.3.知识产权和保密条款Intellectual Property Rights and Confidentiality Clauses3.1在中国法律允许的范围内，甲方对履行本协议而产生或创造的任何权利、所有权、权益和所有知识产权包括但不限于著作权、专利权、专利申请权、软件、技术秘密、商业机密及其他均享有独占的和排他的权利和利益。乙方须签署所有适当的文件，采取所有适当的行动，递交所有的文件和/或申请，提供所有适当的协助，以及做出所有其他依据甲方的自行决定认为是必要的行为，以将任何对该等知识产权的所有权、权利和权益赋予甲方，和/或完善对甲方此等知识产权权利的保护。To the extent permitted under the PRC laws, Party A shall have exclusive and proprietary rights and interests in all rights, ownership, interests andintellectual properties arising out of or created during the performance of this Agreement, including but not limited to copyrights, patents, patentapplications, software, technical secrets, trade secrets and others. Party B shall execute all appropriate documents, take all appropriate actions,submit all filings and/or applications, render all appropriate assistance and otherwise conduct whatever is necessary deemed as by Party A in itssole discretion for the purposes of vesting any ownership, right or interest of any such intellectual property rights in Party A, and/or perfectingthe protections for any such intellectual property rights in Party A.9秘密文件Strictly Confidential3.2双方承认及确定有关本协议、本协议内容，以及彼此就准备或履行本协议而交换的任何口头或书面资料均被视为保密信息。双方应当对所有该等保密信息予以保密，而在未得到另一方书面同意前，不得向任何第三者披露任何保密信息，惟下列信息除外：(a)公众人士知悉或将会知悉的任何信息（惟并非由接受保密信息之一方擅自向公众披露）；(b)根据适用法律法规、股票交易规则、或政府部门或法院的命令而所需披露之任何信息；或(c)由任何一方就本协议所述交易而需向其股东、投资者、法律或财务顾问披露之信息，而该股东、法律或财务顾问亦需遵守与本条款相类似之保密责任。如任何一方工作人员或聘请机构的泄密均视为该方的泄密，需依本协议承担违约责任。无论本协议以任何理由终止，本条款仍然生效。The Parties acknowledge that the existence and the terms of this Agreement and any oral or written information exchanged between the Parties inconnection with the preparation and performance this Agreement are regarded as confidential information. Each Party shall maintainconfidentiality of all such confidential information, and without obtaining the written consent of the other Party, it shall not disclose any relevantconfidential information to any third parties, except for the information that: (a) is or will be in the public domain (other than through the receivingParty’s unauthorized disclosure); (b) is under the obligation to be disclosed pursuant to the applicable laws or regulations, rules of any stockexchange, or orders of the court or other government authorities; or (c) is required to be disclosed by any Party to its shareholders, investors,legal counsels or financial advisors regarding the transaction contemplated hereunder, provided that such shareholders, investors, legal counselsor financial advisors shall be bound by the confidentiality obligations similar to those set forth in this Section. Disclosure of any confidentialinformation by the staff members or agencies hired by any Party shall be deemed disclosure of such confidential information by such Party, whichParty shall be held liable for breach of this Agreement. This Section shall survive the termination of this Agreement for any reason.3.3双方同意，不论本协议是否变更、解除或终止，本条款将持续有效。The Parties agree that this Section shall survive changes to, and rescission or termination of, this Agreement.4.陈述和保证Representations and Warranties4.1甲方陈述和保证如下：Party A hereby represents and warrants as follows:4.1.1甲方是按照中国法律合法注册并有效存续的外商独资企业。Party A is a whollyforeignowned enterprise legally registered and validly existing in accordance with the laws of China.10秘密文件Strictly Confidential4.1.2甲方已采取必要的公司行为，获得必要的授权，并取得第三方和政府部门的同意及批准（若需）以签署和履行本协议；甲方对本协议的签署和履行并不违反法律法规的明确规定。Party A has taken all necessary corporate actions, obtained all necessary authorization and the consent and approval from third partiesand government agencies (if any) for the execution and performance of this Agreement. Party A’s execution and performance of thisAgreement do not violate any explicit requirements under any law or regulation binding on Party A.4.1.3本协议构成对其合法、有效、有约束力并依本协议之条款对其强制执行的义务。This Agreement constitutes Party A's legal, valid and binding obligations, enforceable in accordance with its terms.4.2乙方陈述和保证如下：Party B hereby represents and warrants as follows:4.2.1乙方是按照中国法律合法登记且有效存续的有限责任公司，乙方根据政府部门的批准和许可从事手机视频技术开发、内容制作和产业化市场推广的经营。Party B is a limited company legally registered and validly existing in accordance with the laws of China, engages in mobile videotechnology research, development, content creation, sale and related industrial promotion pursuant to governmental approvals andpermits;11秘密文件Strictly Confidential4.2.2乙方已采取必要的行为，获得必要的授权，并取得第三方和政府部门的同意及批准（若需）以签署和履行本协议；乙方对本协议的签署和履行并不违反法律法规的明确规定。Party B has taken all necessary actions, obtained all necessary authorization and the consent and approval from third parties andgovernment agencies (if any) for the execution and performance of this Agreement. Party B’s execution and performance of thisAgreement do not violate any explicit requirements under any law or regulation binding on Party B.4.2.3本协议构成对其合法、有效、有约束力并依本协议之条款对其强制执行的义务。This Agreement constitutes Party B's legal, valid and binding obligations, and shall be enforceable against it.5.生效和有效期Effectiveness and Term5.1本协议于文首标明的协议日期签署并同时生效。除非依本协议或双方其他协议的约定而提前终止，本协议有效期为20年，但甲、乙双方应自本协议签署后，每3个月对本协议的内容做一次审查，以决定是否需要根据当时的情况对本协议作出相应修改和补充。This Agreement is executed on the date first above written and shall take effect as of such date. Unless earlier terminated in accordance with theprovisions of this Agreement or relevant agreements separately executed between the Parties, the term of this Agreement shall be 20 years. Afterthe execution of this Agreement, both Parties shall review this Agreement every 3 months to determine whether to amend or supplement theprovisions in this Agreement based on the actual circumstances at that time.12秘密文件Strictly Confidential5.2协议期满前，经甲方书面确认，本协议可以延期。延期的期限由甲方决定，乙方必须无条件地同意该延期。The term of this Agreement may be extended if confirmed in writing by Party A prior to the expiration thereof. The extended term shall bedetermined by Party A, and Party B shall accept such extended term unconditionally.6.终止Termination6.1除非依据本协议续期，本协议于到期之日终止。Unless renewed in accordance with the relevant terms of this Agreement, this Agreement shall be terminated upon the date of expiration hereof.6.2本协议有效期内，除非甲方对乙方有重大过失或存在欺诈行为，乙方不得提前终止本协议。尽管如此，甲方可在任何时候通过提前30天向乙方发出书面通知的方式终止本协议。During the term of this Agreement, unless Party A commits gross negligence, or a fraudulent act, against Party B, Party B shall not terminate thisAgreement prior to its expiration date. Nevertheless, Party A shall have the right to terminate this Agreement upon giving 30 days' prior writtennotice to Party B at any time.6.3在本协议终止之后，双方在第3、7和8条项下的权利和义务将继续有效。The rights and obligations of the Parties under Articles 3, 7 and 8 shall survive the termination of this Agreement.13秘密文件Strictly Confidential7.适用法律和争议解决Governing Law and Resolution of Disputes7.1本协议的订立、效力、解释、履行、修改和终止以及争议的解决适用中国的法律。The execution, effectiveness, construction, performance, amendment and termination of this Agreement and the resolution of disputes hereundershall be governed by the laws of China.7.2因解释和履行本协议而发生的任何争议，本协议双方应首先通过友好协商的方式加以解决。如果在一方向其他方发出要求协商解决的书面通知后30天之内争议仍然得不到解决，则任何一方均可将有关争议提交给中国国际经济贸易仲裁委员会，由该会按照其仲裁规则仲裁解决。仲裁应在北京进行，使用之语言为中文。仲裁裁决是终局性的，对各方均有约束力。In the event of any dispute with respect to the construction and performance of this Agreement, the Parties shall first resolve the dispute throughfriendly negotiations. In the event the Parties fail to reach an agreement on the dispute within 30 days after either Party's request to the otherParties for resolution of the dispute through negotiations, either Party may submit the relevant dispute to the China International Economic andTrade Arbitration Commission for arbitration, in accordance with its Arbitration Rules. The arbitration shall be conducted in Beijing, and thelanguage used in arbitration shall be Chinese. The arbitration award shall be final and binding on all Parties.14秘密文件Strictly Confidential7.3因解释和履行本协议而发生任何争议或任何争议正在进行仲裁时，除争议的事项外，本协议双方仍应继续行使各自在本协议项下的其他权利并履行各自在本协议项下的其他义务。Upon the occurrence of any disputes arising from the construction and performance of this Agreement or during the pending arbitration of anydispute, except for the matters under dispute, the Parties to this Agreement shall continue to exercise their respective rights under this Agreementand perform their respective obligations under this Agreement.8.补偿Indemnification就甲方根据本协议向乙方提供的咨询和服务内容所产生或引起的针对甲方的诉讼、请求或其他要求而招致的任何损失、损害、责任或费用都应由乙方补偿给甲方，以使甲方不受损害，除非该损失、损害、责任或费用是因甲方的重大过失或故意而产生的。Party B shall indemnify and hold harmless Party A from any losses, injuries, obligations or expenses caused by any lawsuit, claims or other demandsagainst Party A arising from or caused by the consultations and services provided by Party A to Party B pursuant this Agreement, except where suchlosses, injuries, obligations or expenses arise from the gross negligence or willful misconduct of Party A.15秘密文件Strictly Confidential9.通知Notices9.1本协议项下要求或发出的所有通知和其他通信应通过专人递送、挂号邮寄、邮资预付或快递服务或传真的方式发到该方下列地址。每一通知还应再以电子邮件送达。该等通知视为有效送达的日期按如下方式确定：All notices and other communications required or permitted to be given pursuant to this Agreement shall be delivered personally or sent byregistered mail, postage prepaid, by a courier service or by facsimile transmission to the address of such Party set forth below. A confirmationcopy of each notice shall also be sent by email. The dates on which notices shall be deemed to have been effectively given shall be determined asfollows:9.1.1通知如果是以专人递送、快递服务或挂号邮寄、邮资预付发出的，则以于设定为通知的地址在接收或拒收之日为有效送达日。Notices given by personal delivery, by courier service or by registered mail, postage prepaid, shall be deemed effectively given on thedate of receipt or refusal at the address specified for notices.9.1.2通知如果是以传真发出的，则以成功传送之日为有效送达日（应以自动生成的传送确认信息为证）。Notices given by facsimile transmission shall be deemed effectively given on the date of successful transmission (as evidenced by anautomatically generated confirmation of transmission).16秘密文件Strictly Confidential9.2为通知的目的，双方地址如下：For the purpose of notices, the addresses of the Parties are as follows:甲方：中传天下信息科技（深圳）有限公司Party A: Zhongchuan Tianxia Information Technology (Shenzhen) Co., Ltd.地址：深圳市南山区高新中三道2号深圳软件园一期五栋401AAddress:401A, Building 5, Phase 1, Shenzhen Software Park, No.2 Gaoxin Zhongsan Road, Nanshan District, Shenzhen收件人：洪婷Attn: Hong Ting乙方：北京中传视讯科技有限公司Party B: Beijing Mobile Vision Technology Co., Ltd地址：北京市朝阳区光华路9号SOHO3QLAB32Address: LAB32, SOHO3Q, No 9, Guanghua Road, Chaoyang District, Beijing.收件人：宋雪松Attn.: Song Xuesong9.3任何一方可按本条规定随时给另一方发出通知来改变其接收通知的地址。Any Party may at any time change its address for notices by a notice delivered to the other Party in accordance with the terms hereof.17秘密文件Strictly Confidential10.协议的转让Assignment10.1乙方不得将其在本协议项下的权利与义务转让给第三方，除非事先征得甲方的书面同意。Without Party A's prior written consent, Party B shall not assign its rights and obligations under this Agreement to any third party.10.2乙方在此同意，甲方可以在其需要时向其他第三方转让其在本协议项下的权利和义务，并在该等转让发生时甲方仅需向乙方发出书面通知，并且无需再就该等转让征得乙方的同意。Party B agrees that Party A may assign its obligations and rights under this Agreement to any third party upon a prior written notice to Party Bbut without the consent of Party B.11.协议的分割性Severability如果本协议有任何一条或多条规定根据任何法律或法规在任何方面被裁定为无效、不合法或不可执行，本协议其余规定的有效性、合法性或可执行性不应因此在任何方面受到影响或损害。双方应通过诚意磋商，争取以法律许可以及双方期望的最大限度内有效的规定取代那些无效、不合法或不可执行的规定，而该等有效的规定所产生的经济效果应尽可能与那些无效、不合法或不能强制执行的规定所产生的经济效果相似。In the event that one or several of the provisions of this Agreement are found to be invalid, illegal or unenforceable in any aspect in accordance with anylaws or regulations, the validity, legality or enforceability of the remaining provisions of this Agreement shall not be affected or compromised in any aspect.The Parties shall strive in good faith to replace such invalid, illegal or unenforceable provisions with effective provisions that accomplish to the greatestextent permitted by law and the intentions of the Parties, and the economic effect of such effective provisions shall be as close as possible to the economiceffect of those invalid, illegal or unenforceable provisions.18秘密文件Strictly Confidential12.协议的修改、补充Amendments and Supplements双方可以书面协议方式对本协议作出修改和补充。经过双方签署的有关本协议的修改协议和补充协议是本协议组成部分，具有与本协议同等的法律效力。Any amendments and supplements to this Agreement shall be in writing. The amendment agreements and supplementary agreements that have beensigned by the Parties and that relate to this Agreement shall be an integral part of this Agreement and shall have the same legal validity as this Agreement.13.语言和副本Language and Counterparts本协议以中文和英文书就，一式二份，甲乙双方各持一份，具有同等效力；中英文版本如有冲突，应以中文版为准。This Agreement is written in both Chinese and English language in two copies, each Party having one copy with equal legal validity; in case there is anyconflict between the Chinese version and the English version, the Chinese version shall prevail.本页其余部分刻意留为空白The Remainder of this page is intentionally left blank19秘密文件Strictly Confidential有鉴于此，双方已使得经其授权的代表于文首所述日期签署了本独家业务合作协议并即生效，以昭信守。IN WITNESS WHEREOF, the Parties have caused their authorized representatives to execute this Exclusive Business Cooperation Agreement as of thedate first above written.甲方：中传天下信息科技（深圳）有限公司（盖章）Party A: Zhongchuan Tianxia Information Technology (Shenzhen) Co., Ltd.(Seal)签字：By: /s/ Hong Ting 姓名：洪婷Name: Hong Ting职务：总经理Title: General Manager20秘密文件Strictly Confidential有鉴于此，双方已使得经其授权的代表于文首所述日期签署了本独家业务合作协议并即生效，以昭信守。IN WITNESS WHEREOF, the Parties have caused their authorized representatives to execute this Exclusive Business Cooperation Agreement as of thedate first above written. 乙方：北京中传视讯科技有限公司（盖章）Party B: Beijing Mobile Vision Technology Co., Ltd. (Seal)签字：By: /s/ Song Xuesong 姓名：宋雪松Name: Song Xuesong职务：董事长Title: Chairman of the Board21秘密文件Strictly ConfidentialEX4.16 4 f20f2017ex416_luokung.htm EXCLUSIVE OPTION AGREEMENT BY AND AMONG ZHONGCHUAN TIANXIA INFORMATION TECHNOLOGY(SHENZHEN) CO., LTD., XUESONG SONG, WEILI CHEN, PING WANG, DONGLAI LIU, AND BEIJING MOBILE VISION TECHNOLOGY CO., LTD., DATEDAUGUST 31, 2015Exhibit 4.16独家购买权协议Exclusive Option Agreement本独家购买权协议 (下称“本协议”) 由以下各方于年月日在中华人民共和国（下称“中国”）北京签订：This Exclusive Option Agreement (this “Agreement”) is executed by and among the Parties below as of in Beijing, the People’s Republic of China (the“China” or “PRC”):甲方：中传天下信息科技（深圳）有限公司，一家依照中国法律设立和存在的外商独资企业，地址为深圳市南山区高新中三道2号深圳软件园一期五栋401A；Party A:Zhongchuan Tianxia Information Technology (Shenzhen) Co., Ltd., a whollyforeignowned enterprise organized and existing under the laws of China,with its address at 401A, Building 5, Phase 1, Shenzhen Software Park, No.2 Gaoxin Zhongsan Road, Nanshan District, Shenzhen.乙方：Party B:a)宋雪松Song Xuesong身份证号码:120112196809040417ID Card No.:120112196809040417住所：天津市河西区广东路中裕园33702Address:Zhongyu Yuan 33702, Guangdong Road, Hexi District, Tianjinb)陈蔚力Chen Weili身份证号码:120106197309240516ID Card No.:120106197309240516住所：广东省深圳市宝安区宝城上川路15号Address:Baocheng Shangchuan Road 15, Baoan District, Shenzhen, Guangdong1秘密文件Strictly Confidentialc)王平Wang Ping身份证号码:35020319691030401xID Card No.:35020319691030401x住所：广东省深圳市南山区高新南环路36号彩虹之岸12栋4AAddress:Caihong Zhi’an Building No.12 Suite 4A, Gaoxin Nanhuan Road 36, Nanshan District, Shenzhen, Guangdongd)刘东来Liu Donglai身份证号码:120107196810103912ID Card No.:120107196810103912住所：天津市和平区南京路诚基经贸中心1号楼2门1702号Address:No 1702, Door 2, Build 1, Chengji Economic and Trade Centre, Nanjing Road, Heping District, Tianjin.丙方：北京中传视讯科技有限公司，一家依照中国法律设立和存在的有限责任公司，地址为北京市朝阳区光华路9号SOHO3QLAB32，统一社会信用代码为9111010576215249XM；Party C:Beijing Mobile Vision Technology Co., Ltd., a limited company duly registered in China, with its address at LAB32, SOHO3Q, No 9, Guanghua Road,Chaoyang District, Beijing and its uniform social credit code of 9111010576215249XM.2秘密文件Strictly Confidential在本协议中，甲方、乙方和丙方以下各称“一方”，合称“各方”。In this Agreement, each of Party A, Party B and Party C shall be referred to as a “Party” respectively, and they shall be collectively referred to as the“Parties”.鉴于，乙方系丙方股东并合计持有丙方100%股权，乙方将按本协议之条款授予甲方购买全部或部分该股权的权利。Whereas, Party B are the shareholders of Party C and jointly hold 100% of the equity interest in Party C, and Party B are willing to grant to Party A the rightto acquire such equity interest, in whole or in part, on the terms herein.现各方协商一致，达成如下协议：Now therefore, upon mutual discussion and negotiation, the Parties have reached the following agreement:1.股权买卖Sale and Purchase of Equity Interest1.1授予权利Option Granted乙方在此不可撤销地授予甲方在中国法律允许的前提下，按照甲方自行决定的行使步骤，并按照本协议第1.3条所述的价格，随时一次或多次从乙方购买或指定一人或多人(“被指定人”)从乙方购买其目前和将来所持有的丙方的全部或部分股权（无论乙方出资额和/或持股比例将来是否发生变化）的一项不可撤销的专有权(“股权购买权”)。除甲方和被指定人外，任何第三人均不得享有股权购买权或其他与乙方股权有关的权利。丙方特此同意乙方向甲方授予股权购买权。本款及本协议所规定的“人”指个人、公司、合营企业、合伙、企业、信托或非公司组织。Party B hereby irrevocably grant Party A an irrevocable and exclusive right to purchase, or designate one or more persons (each, a “Designee”) topurchase the equity interests in Party C now and in the future held by Party B (regardless whether Party B’s capital contribution amount and/orpercentage of shareholding will be changed in the future) once or at multiple times at any time in part or in whole at Party A’s sole and absolutediscretion to the extent permitted by Chinese laws and at the price described in Section 1.3 herein (such right being the “Equity Interest PurchaseOption”). Except for Party A and the Designee(s), no other person shall be entitled to the Equity Interest Purchase Option or other rights withrespect to the equity interests of Party B. Party C hereby agrees to the grant by Party B of the Equity Interest Purchase Option to Party A. Theterm “person” as used herein shall refer to individuals, corporations, partnerships, partners, enterprises, trusts or noncorporate organizations.3秘密文件Strictly Confidential1.2行使步骤Steps for Exercise of Equity Interest Purchase Option甲方行使其股权购买权以符合中国法律和法规的规定为前提。甲方行使股权购买权时，应向乙方发出书面通知(“股权购买通知”)，股权购买通知应载明以下事项：(a)甲方关于行使股权购买权的决定；(b)甲方拟从乙方购买的股权份额(“被购买的股权”)；和(c)被购买的股权的买入日期。Subject to the provisions of the laws and regulations of China, Party A may exercise the Equity Interest Purchase Option by issuing a writtennotice to Party B (the “Equity Interest Purchase Option Notice”), specifying: (a) Party A’s decision to exercise the Equity Interest PurchaseOption; (b) the portion of equity interests to be purchased from Party B (the “Optioned Interests”); and (c) the date for purchasing the OptionedInterests.1.3股权买价Equity Interest Purchase Price被购买的股权的买价（“股权买价”）应是行权当时中国法律允许的最低价格。乙方收到该股权对价后，应当提供给丙方与该股权买价相同金额的借款，该借款的期限为20年，且为无息。乙方应当在该借款期限届满时就该借款放弃对丙方的债权。The purchase price of the Optioned Interests (the “Equity Interest Purchase Price”) shall be the lowest price permitted by the laws of China. Afterreceiving the Equity Interest Purchase Price, Party B shall make an interestfree loan equivalent to the amount of Equity Interest Purchase Price toParty C, of which term is 20 years. Each member of Party B shall give up his(her) creditor’s right when the loan term expires.4秘密文件Strictly Confidential1.4转让被购买股权Transfer of Optioned Interests甲方每次行使股权购买权时：For each exercise of the Equity Interest Purchase Option:1.4.1乙方应责成丙方及时召开股东会会议，在该会议上，应通过批准乙方向甲方和/或被指定人转让被购买的股权的决议；Party B shall cause Party C to promptly convene a shareholders meeting, at which a resolution shall be adopted approving Party B’stransfer of the Optioned Interests to Party A and/or the Designee(s);1.4.2乙方应就其向甲方和/或被指定人转让被购买股权取得丙方其他股东同意该转让并放弃优先购买权的书面声明。Party B shall obtain written statements from the other shareholder of Party C giving consent to the transfer of the equity interest to PartyA and/or the Designee(s) and waiving any right of first refusal related thereto.1.4.3乙方应与甲方和/或(在适用的情况下)被指定人按照本协议及股权购买通知的规定，为每次转让签订股权转让协议；Party B shall execute a share transfer contract with respect to each transfer with Party A and/or each Designee (whichever is applicable),in accordance with the provisions of this Agreement and the Equity Interest Purchase Option Notice regarding the Optioned Interests;5秘密文件Strictly Confidential1.4.4有关方应签署所有其他所需协议、协议或文件，取得全部所需的政府批准和同意，并采取所有所需行动，在不附带任何担保权益的情况下，将被购买的股权的有效所有权转移给甲方和/或被指定人并使甲方和/或被指定人成为被购买的股权的登记在册所有人。为本款及本协议的目的，“担保权益”包括担保、抵押、第三方权利或权益，任何购股权、收购权、优先购买权、抵销权、所有权扣留或其他担保安排等；但为了明确起见，不包括在本协议、乙方股权质押协议项下产生的任何担保权益。本款及本协议所规定的“乙方股权质押协议”指甲方、乙方和丙方于本协议签署之日签订的股权质押协议，根据股权质押协议，乙方为担保丙方能履行丙方与甲方签订的独家业务合作协议项下的义务，而向甲方质押其在丙方的全部乙方股权。The relevant Parties shall execute all other necessary contracts, agreements or documents, obtain all necessary government licenses andpermits and take all necessary actions to transfer valid ownership of the Optioned Interests to Party A and/or the Designee(s),unencumbered by any security interests, and cause Party A and/or the Designee(s) to become the registered owner(s) of the OptionedInterests. For the purpose of this Section and this Agreement, “security interests” shall include securities, mortgages, third party’s rightsor interests, any stock options, acquisition right, right of first refusal, right to offset, ownership retention or other security arrangements,but shall be deemed to exclude any security interest created by this Agreement and Party B’s Equity Interest Pledge Agreement. “PartyB’s Equity Interest Pledge Agreement” as used in this Section and this Agreement shall refer to the Equity Interest Pledge Agreementexecuted by and among Party A, Party B and Party C on the date of this Agreement, whereby Party B pledge all of their equity interests inParty C to Party A, in order to guarantee Party C’s performance of its obligations under the Exclusive Business Corporation Agreementexecuted by and between Party C and Party A.6秘密文件Strictly Confidential2.知识产权独家购买权Exclusive Option regarding the Intellectual Property Rights2.1本协议签订之日起，若乙方拟转让、出售或以其他方式处置（任一处置方式以下简称“转让”）其拥有或持有的全部或部分知识产权（以下称“知识产权”，定义见第2.4条），甲方有权独家购买该等知识产权。From the date hereof, if Party B proposes to transfer, sell or dispose of (each, a “transfer”) all or any part of the intellectual property rights ownedor held by Party B (“IPR”), Party A shall have exclusive option.2.2若乙方有意转让全部或部分知识产权，应事先向甲方发出书面通知(“转让通知”)，转让通知应载明以下事项：(a) 乙方关于转让知识产权的意向；(b) 乙方拟转让的知识产权清单(“拟转让知识产权”)及转让的价格和其他条件。转让通知视为乙方向甲方发出的一份要约，按照该要约，乙方同意按转让通知中指定的价格条件向甲方转让全部或部分拟转让知识产权。Prior to Party B proposes to transfer all or any part of its IPR, Party B shall give Party A a written notice (“Transfer Notice”), which shall specify (a)Party B’s intention to make the transfer; (b) the list of IPR to be transferred (“Offered IPR”) and the consideration and other conditions uponwhich the transfer is to be made. The Transfer Notice constitutes Party B’s offer given to Party A, pursuant to which, Party B agrees to transfer allor any part of its Offered IPR to Party A based on the same conditions described in the Transfer Notice.7秘密文件Strictly Confidential2.3甲方收到转让通知后，有权在30日内选择按照转让通知中列明的转让价格和条件购买拟转让知识产权。如果甲方行使其独家购买权，双方应于甲方收到转让通知后45日内签订有关的知识产权转让协议，乙方应办理法律规定的知识产权转让的批准和登记手续。Party A shall have an option for a period of 30 days from Party A’s receipt of the Transfer Notice to elect to purchase the Offered IPR at the sameprice and subject to the same conditions as described in the Transfer Notice. If Party A decides to exercise its exclusive option, the parties shallenter into relevant IPR transfer agreement within 45 days upon Party A’s receipt of the Transfer Notice and Party B is responsible to complete allrelated approvals and registrations formalities as prescribed by the PRC law.2.4本协议第2条所称“知识产权”指任何知识产权，包括但不限于著作权、专利权、专利申请权、商标、域名、软件、专有技术，并包括前述知识产权申请权利以及登记注册的权利，以及其他所有与前述知识产权有关的权利和权益。The “IPR” referred to in this Article 2 means any intellectual property rights, including, without limitations, copyrights, patents, patentapplications, trademarks, domain names, software and knowhow together with (a) all rights to apply for or register any of the foregoing and (b) allother rights and interests to any of the foregoing.8秘密文件Strictly Confidential3.承诺Covenants3.1有关丙方的承诺Covenants regarding Party C乙方（作为丙方的股东）和丙方在此承诺：Party B (as the shareholders of Party C) and Party C hereby covenant as follows:3.1.1未经甲方的事先书面同意，不以任何形式补充、更改或修改丙方公司章程文件，增加或减少其注册资本，或以其他方式改变其注册资本结构；Without the prior written consent of Party A, they shall not in any manner supplement, change or amend the articles of association andbylaws of Party C, increase or decrease its registered capital, or change its structure of registered capital in other manners;3.1.2按照良好的财务和商业标准及惯例，保持其公司的存续，审慎地及有效地经营其业务和处理事务；They shall maintain Party C’s corporate existence in accordance with good financial and business standards and practices by prudentlyand effectively operating its business and handling its affairs;3.1.3未经甲方的事先书面同意，不在本协议签署之日起的任何时间出售、转让、抵押或以其他方式处置丙方的任何资产、业务或收入的合法或受益权益，或允许在其上设置任何其他担保权益；Without the prior written consent of Party A, they shall not at any time following the date hereof, sell, transfer, mortgage or dispose of inany manner any assets of Party C or legal or beneficial interest in the business or revenues of Party C, or allow the encumbrance thereonof any security interest;3.1.4未经甲方的事先书面同意，不发生、继承、保证或容许存在任何债务，但(i)正常或日常业务过程中产生而不是通过借款方式产生的债务；和(ii)已向甲方披露和得到甲方书面同意的债务除外；Without the prior written consent of Party A, they shall not incur, inherit, guarantee or suffer the existence of any debt, except for (i)debts incurred in the ordinary course of business other than through loans; and (ii) debts disclosed to Party A for which Party A’swritten consent has been obtained;9秘密文件Strictly Confidential3.1.5一直在正常业务过程中经营所有业务，以保持丙方的资产价值，不进行任何足以影响其经营状况和资产价值的作为/不作为；They shall always operate all of Party C’s businesses during the ordinary course of business to maintain the asset value of Party C andrefrain from any action/omission that may affect Party C’s operating status and asset value;3.1.6未经甲方的事先书面同意，不得让丙方签订任何重大协议，但在正常业务过程中签订的协议除外(就本段而言，如果一份协议的价值超过【人民币10万元】，即被视为重大协议)；Without the prior written consent of Party A, they shall not cause Party C to execute any major contract, except the contracts in theordinary course of business (for purpose of this subsection, a contract with a value exceeding RMB 100,000 shall be deemed a majorcontract);3.1.7未经甲方的事先书面同意，丙方不得向任何人提供贷款或信贷；Without the prior written consent of Party A, they shall not cause Party C to provide any person with any loan or credit;3.1.8应甲方要求，向其提供所有关于丙方的营运和财务状况的资料；They shall provide Party A with information on Party C’s business operations and financial condition at Party A’s request;10秘密文件Strictly Confidential3.1.9如甲方提出要求，丙方应从甲方接受的保险公司处购买和持有有关其资产和业务的保险，该保险的金额和险种应与经营类似业务的公司一致；If requested by Party A, they shall procure and maintain insurance in respect of Party C’s assets and business from an insurance carrieracceptable to Party A, at an amount and type of coverage typical for companies that operate similar businesses;3.1.10未经甲方的事先书面同意，丙方不得与任何人合并或联合，或对任何人进行收购或投资；Without the prior written consent of Party A, they shall not cause or permit Party C to merge, consolidate with, acquire or invest in anyperson;3.1.11将发生的或可能发生的与丙方资产、业务或收入有关的诉讼、仲裁或行政程序立即通知甲方；They shall immediately notify Party A of the occurrence or possible occurrence of any litigation, arbitration or administrative proceedingsrelating to Party C’s assets, business or revenue;3.1.12为保持丙方对其全部资产的所有权，签署所有必要或适当的文件，采取所有必要或适当的行动和提出所有必要或适当的控告或对所有索偿进行必要和适当的抗辩；To maintain the ownership by Party C of all of its assets, they shall execute all necessary or appropriate documents, take all necessary orappropriate actions and file all necessary or appropriate complaints or raise necessary and appropriate defenses against all claims;11秘密文件Strictly Confidential3.1.13未经甲方事先书面同意，不得以任何形式派发股息予各股东，但一经甲方要求，丙方应立即将其所有可分配利润全部立即分配给其各股东；及Without the prior written consent of Party A, they shall ensure that Party C shall not in any manner distribute dividends to itsshareholders, provided that upon Party A’s written request, Party C shall immediately distribute all distributable profits to itsshareholders; and3.1.14根据甲方的要求，委任由其指定的任何人士出任丙方的董事和/或执行董事。At the request of Party A, they shall appoint any persons designated by Party A as the director and/or executive director of Party C.3.2乙方和丙方的承诺Covenants of Party B and Party C乙方承诺：Party B hereby covenant as follows:3.2.1未经甲方的事先书面同意，不出售、转让、抵押或以其他方式处置其拥有的丙方的股权的合法或受益权益，或允许在其上设置任何其他担保权益，但根据乙方签署的《股权质押协议》在该股权上设置的质押则除外；Without the prior written consent of Party A, Party B shall not sell, transfer, mortgage or dispose of in any other manner any legal orbeneficial interest in the equity interests in Party C held by Party B, or allow the encumbrance thereon of any security interest, except forthe pledge placed on these equity interests in accordance with Party B’s Equity Interest Pledge Agreement;12秘密文件Strictly Confidential3.2.2促使丙方股东会和/或执行董事不批准在未经甲方的事先书面同意的情况下，出售、转让、抵押或以其他方式处置任何乙方持有之丙方的股权的合法权益或受益权，或允许在其上设置任何其他担保权益，但批准根据乙方签署的《股权质押协议》在乙方股权上设置的质押则除外；Party B shall cause the shareholders’ meeting and/or the executive director of Party C not to approve the sale, transfer, mortgage ordisposition in any other manner of any legal or beneficial interest in the equity interests in Party C held by Party B, or allow theencumbrance thereon of any security interest, without the prior written consent of Party A, except for the pledge placed on these equityinterests in accordance with Party B’s Equity Interest Pledge Agreement;3.2.3未经甲方的事先书面同意的情况下，对于丙方与任何人合并或联合，或对任何人进行收购或投资，乙方将促成丙方股东会或执行董事不予批准；Party B shall cause the shareholders’ meeting or the executive director of Party C not to approve the merger or consolidation with anyperson, or the acquisition of or investment in any person, without the prior written consent of Party A;3.2.4将发生的或可能发生的任何关于其所拥有的股权的诉讼、仲裁或行政程序立即通知甲方；Party B shall immediately notify Party A of the occurrence or possible occurrence of any litigation, arbitration or administrativeproceedings relating to the equity interests in Party C held by Party B;13秘密文件Strictly Confidential3.2.5促使丙方股东会或执行董事表决赞成本协议规定的被购买的股权的转让并应甲方之要求采取其他任何行动；Party B shall cause the shareholders’ meeting or the executive director of Party C to vote their approval of the transfer of the OptionedInterests as set forth in this Agreement and to take any and all other actions that may be requested by Party A;3.2.6为保持其对股权的所有权，签署所有必要或适当的文件，采取所有必要或适当的行动和提出所有必要或适当的控告或对所有索偿进行必要和适当的抗辩；To the extent necessary to maintain Party B’s ownership in Party C, Party B shall execute all necessary or appropriate documents, take allnecessary or appropriate actions and file all necessary or appropriate complaints or raise necessary and appropriate defenses against allclaims;3.2.7应甲方的要求，委任由其指定的任何人士出任丙方的董事和/或执行董事；Party B shall appoint any designee of Party A as the director and/or executive director of Party C, at the request of Party A;3.2.8经甲方随时要求，应向其指定的代表在任何时间无条件地根据本协议的股权购买权立即转让其股权，并放弃其对其他现有股东进行上述股权转让所享有的优先购买权（如有的话）；和At the request of Party A at any time, Party B shall promptly and unconditionally transfer its equity interests in Party C to Party A’sDesignee(s) in accordance with the Equity Interest Purchase Option under this Agreement, and Party B hereby waives its right of firstrefusal (if any) to the share transfer by the other existing shareholder of Party C (if any); and14秘密文件Strictly Confidential3.2.9严格遵守本协议及各方共同或分别签订的其他协议的各项规定，切实履行该等协议项下的各项义务，并不进行任何足以影响该等协议的有效性和可执行性的作为/不作为。如果乙方对于本协议项下或乙方股权质押协议下或对甲方的授权委托书中的股权，还留存有任何权利，除非甲方书面指示，否则乙方仍不得行使该权利。Party B shall strictly abide by the provisions of this Agreement and other contracts jointly or separately executed by and among Party B,Party C and Party A, perform the obligations hereunder and thereunder, and refrain from any action/omission that may affect theeffectiveness and enforceability thereof. To the extent that Party B has any remaining rights with respect to the equity interests subject tothis Agreement hereunder or under Party B’s Equity Interest Pledge Agreement or under the Power of Attorney granted in favor of PartyA, Party B shall not exercise such rights except in accordance with the written instructions of Party A.4.陈述和保证Representations and Warranties乙方和丙方特此在本协议签署之日和每一个转让日向甲方共同及分别陈述和保证如下：Party B and Party C hereby represent and warrant to Party A, jointly and severally, as of the date of this Agreement and each date of transfer of theOptioned Interests, that:4.1其具有签订和交付本协议和其为一方的、根据本协议为每一次转让被购买的股权而签订的任何股权转让协议(各称为"转让协议")，并履行其在本协议和任何转让协议项下的义务的权力和能力。乙方和丙方同意在甲方行使购买权时，他们将签署与本协议条款一致的转让协议。本协议和其是一方的各转让协议一旦签署后，构成或将对其构成合法、有效及具有约束力的义务并可按照其条款对其强制执行；They have the authority to execute and deliver this Agreement and any share transfer contracts to which they are a party concerning theOptioned Interests to be transferred thereunder (each, a “Transfer Contracts”), and to perform their obligations under this Agreement and anyTransfer Contracts. Party B and Party C agree to enter into Transfer Contracts consistent with the terms of this Agreement upon Party A’s exerciseof the Equity Interest Purchase Option. This Agreement and the Transfer Contracts to which they are a party constitute or will constitute theirlegal, valid and binding obligations and shall be enforceable against them in accordance with the provisions thereof;15秘密文件Strictly Confidential4.2无论是本协议或任何转让协议的签署和交付还是其在本协议或任何转让协议项下的义务的履行均不会：(i)导致违反任何有关的中国法律；(ii)与丙方章程或其他组织文件相抵触；(iii)导致违反其是一方或对其有约束力的任何协议或文件，或构成其是一方或对其有约束力的任何协议或文件项下的违约；(iv)导致违反有关向任何一方颁发的任何许可或批准的授予和(或)继续有效的任何条件；或(v)导致向任何一方颁发的任何许可或批准中止或被撤销或附加条件；The execution and delivery of this Agreement or any Transfer Contracts and the obligations under this Agreement or any Transfer Contracts shallnot: (i) cause any violation of any applicable laws of China; (ii) be inconsistent with the articles of association, bylaws or other organizationaldocuments of Party C; (iii) cause the violation of any contracts or instruments to which they are a party or which are binding on them, orconstitute any breach under any contracts or instruments to which they are a party or which are binding on them; (iv) cause any violation of anycondition for the grant and/or continued effectiveness of any licenses or permits issued to either of them; or (v) cause the suspension orrevocation of or imposition of additional conditions to any licenses or permits issued to either of them;4.3乙方对其在丙方拥有的股权拥有良好和可出售的所有权，除乙方签署的《股权质押协议》外，乙方在上述股权上没有设置任何担保权益；Party B have a good and merchantable title to the equity interests in Party C they hold. Except for Party B’s Equity Interest Pledge Agreement,Party B have not placed any security interest on such equity interests;16秘密文件Strictly Confidential4.4目前没有悬而未决的或构成威胁的与丙方的股权、丙方资产有关的或与丙方有关的诉讼、仲裁或行政程序。There are no pending or threatened litigation, arbitration or administrative proceedings relating to the equity interests in Party C, assets of Party Cor Party C.5.生效日Effective Date5.1本协议于各方签署本协议之日生效，有效期10年，经甲方选择可再延长10年。This Agreement shall become effective upon the date hereof, and remain effective for a term of 10 years, and may be renewed for an additional 10years at Party A’s election.5.2若丙方股东发生变化，由新股东签署此协议，在此协议签署之日，原协议自动视为无效。In the event of a change in the shareholders of Party C, the new shareholder should sign this agreement and the original agreement willautomatically be deemed invalid on the date of signing of this agreement.17秘密文件Strictly Confidential6.适用法律与争议解决Governing Law and Resolution of Disputes6.1适用法律Governing law本协议的订立、效力、解释、履行、修改和终止以及争议解决均适用中国正式公布并可公开得到的法律。对中国正式公布并可公开得到的法律没有规定的事项，将适用国际法律原则和惯例。The execution, effectiveness, construction, performance, amendment and termination of this Agreement and the resolution of disputes hereundershall be governed by the formally published and publicly available laws of China. Matters not covered by formally published and publiclyavailable laws of China shall be governed by international legal principles and practices.6.2争议的解决方法Methods of Resolution of Disputes因解释和履行本协议而发生的任何争议，本协议各方应首先通过友好协商的方式加以解决。如果在一方向其他方发出要求协商解决的书面通知后30天之内争议仍然得不到解决，则任何一方均可将有关争议提交给中国国际经济贸易仲裁委员会，由该会按照其届时有效的仲裁规则仲裁解决。仲裁应在北京进行，使用之语言为中文。仲裁裁决是终局性的，对各方均有约束力。In the event of any dispute with respect to the construction and performance of this Agreement, the Parties shall first resolve the dispute throughfriendly negotiations. In the event the Parties fail to reach an agreement on the dispute within 30 days after either Party’s request to the otherParties for resolution of the dispute through negotiations, either Party may submit the relevant dispute to the China International Economic andTrade Arbitration Commission for arbitration, in accordance with its then effective arbitration rules. The arbitration shall be conducted in Beijing,and the language used in arbitration shall be Chinese. The arbitration award shall be final and binding on all Parties.18秘密文件Strictly Confidential7.税款、费用Taxes and Fees每一方应承担根据中国法律因准备和签署本协议和各转让协议以及完成本协议和各转让协议拟定的交易而由该方发生的或对其征收的任何和全部的转让和注册的税、花费和费用。Each Party shall pay any and all transfer and registration tax, expenses and fees incurred thereby or levied thereon in accordance with the laws of China inconnection with the preparation and execution of this Agreement and the Transfer Contracts, as well as the consummation of the transactionscontemplated under this Agreement and the Transfer Contracts.8.通知Notices8.1本协议项下要求或发出的所有通知和其他通信应通过专人递送、挂号邮寄、邮资预付或商业快递服务或传真的方式发到该方下列地址。每一通知还应再以电子邮件送达。该等通知视为有效送达的日期按如下方式确定：All notices and other communications required or permitted to be given pursuant to this Agreement shall be delivered personally or sent byregistered mail, postage prepaid, by a commercial courier service or by facsimile transmission to the address of such Party set forth below. Aconfirmation copy of each notice shall also be sent by email. The dates on which notices shall be deemed to have been effectively given shall bedetermined as follows:8.1.1通知如果是以专人递送、快递服务或挂号邮寄、邮资预付发出的，则以于设定为通知的地址在接收或拒收之日为有效送达日。Notices given by personal delivery, by courier service or by registered mail, postage prepaid, shall be deemed effectively given on thedate of receipt or refusal at the address specified for notices.19秘密文件Strictly Confidential8.1.2通知如果是以传真发出的，则以成功传送之日为有效送达日（应以自动生成的传送确认信息为证）。Notices given by facsimile transmission shall be deemed effectively given on the date of successful transmission (as evidenced by anautomatically generated confirmation of transmission).8.2为通知的目的，各方地址如下：For the purpose of notices, the addresses of the Parties are as follows:甲方：中传天下信息科技（深圳）有限公司Party A:Zhongchuan Tianxia Information Technology (Shenzhen) Co., Ltd.地址：深圳市南山区高新中三道2号深圳软件园一期五栋401AAddress:401A, Building 5, Phase 1, Shenzhen Software Park, No.2 Gaoxin Zhongsan Road, Nanshan District, Shenzhen.收件人：洪婷Attn:Hong Ting乙方：Party B: 宋雪松Song Xuesong住所：天津市河西区广东路中裕园33702Address:Zhongyu Yuan 33702, Guangdong Road, Hexi District, Tianjin20秘密文件Strictly Confidential陈蔚力Chen Weili住所：广东省深圳市宝安区宝城上川路15号Address:Baocheng Shangchuan Road 15, Baoan District, Shenzhen, Guangdong王平Wang Ping住所：广东省深圳市南山区高新南环路36号彩虹之岸12栋4AAddress:Caihong Zhi’an Building No.12 Suite 4A, Gaoxin Nanhuan Road 36, Nanshan District, Shenzhen, Guangdong刘东来Liu Donglai住所：天津市和平区南京路诚基经贸中心1号楼2门1702号Address:No 1702, Door 2, Build 1, Chengji Economic and Trade Centre, Nanjing Road, Heping District, Tianjin.丙方：北京中传视讯科技有限公司Party C:Beijing Mobile Vision Technology Co., Ltd.地址：北京市朝阳区光华路9号SOHO3QLAB32Address: LAB32, SOHO3Q, No 9, Guanghua Road, Chaoyang District, Beijing .收件人：宋雪松Attn: Song Xuesong8.3任何一方可按本条规定随时给其他方发出通知来改变其接收通知的地址。Any Party may at any time change its address for notices by a notice delivered to the other Parties in accordance with the terms hereof.21秘密文件Strictly Confidential9.保密责任Confidentiality各方承认及确定彼此就有关本协议而交换的任何口头或书面资料均属机密资料。各方应当对所有该等资料予以保密，而在未得其他方书面同意前，不得向任何第三者披露任何有关资料，惟下列情况除外：(a)公众人士知悉或将会知悉该等资料(并非由接受资料之一方擅自向公众披露)；(b)适用法律法规或股票交易的规则或规例所需披露之资料；或(c)由任何一方就本协议所述交易而需向其法律或财务顾问披露之资料而该法律或财务顾问亦需遵守与本条款相类似之保密责任。如任何一方工作人员或聘请机构的泄密均视为该方的泄密，需依本协议承担违约责任。无论本协议以任何理由终止，本条款仍然生效。The Parties acknowledge that any oral or written information exchanged among them with respect to this Agreement is confidential information. Each Partyshall maintain the confidentiality of all such information, and without obtaining the written consent of other Parties, it shall not disclose any relevantinformation to any third parties, except in the following circumstances: (a) such information is or will be in the public domain (provided that this is not theresult of a public disclosure by the receiving party); (b) information disclosed as required by applicable laws or rules or regulations of any stock exchange;or (c) information required to be disclosed by any Party to its legal counsel or financial advisor regarding the transaction contemplated hereunder, and suchlegal counsel or financial advisor are also bound by confidentiality duties similar to the duties in this section. Disclosure of any confidential information bythe staff members or agency hired by any Party shall be deemed disclosure of such confidential information by such Party, which Party shall be held liablefor breach of this Agreement. This Section shall survive the termination of this Agreement for any reason.22秘密文件Strictly Confidential10.进一步保证Further Warranties各方同意迅速签署为执行本协议的各项规定和目的而合理需要的或对其有利的文件，以及为执行本协议的各项规定和目的而采取合理需要的或对其有利的进一步行动。The Parties agree to promptly execute documents that are reasonably required for or are conducive to the implementation of the provisions and purposes ofthis Agreement and take further actions that are reasonably required for or are conducive to the implementation of the provisions and purposes of thisAgreement.11.其他Miscellaneous11.1修订、修改与补充Amendment, change and supplement对本协议作出修订、修改与补充，必须经每一方签署书面协议。Any amendment, change and supplement to this Agreement shall require the execution of a written agreement by all of the Parties.11.2完整协议Entire agreement除了在本协议签署后所作出的书面修订、补充或修改以外，本协议构成本协议各方就本协议标的物所达成的完整协议，取代在此之前就本协议标的物所达成的所有口头或书面的协商、陈述和协议。 Except for the amendments, supplements or changes in writing executed after theexecution of this Agreement, this Agreement shall constitute the entire agreement reached by and among the Parties hereto with respect to thesubject matter hereof, and shall supercede all prior oral and written consultations, representations and contracts reached with respect to thesubject matter of this Agreement.23秘密文件Strictly Confidential11.3标题Headings本协议的标题仅为方便阅读而设，不应被用来解释、说明或在其他方面影响本协议各项规定的含义。The headings of this Agreement are for convenience only, and shall not be used to interpret, explain or otherwise affect the meanings of theprovisions of this Agreement.11.4语言Language本协议以中文和英文书就，一式八份，乙方共计六名股东以及甲方、丙方各持一份，具有同等效力；中英文版本如有冲突，应以中文版为准。This Agreement is written in both Chinese and English language in eight copies, the 6 shareholders of Party B, Party A and Party C having onecopy with equal legal validity respectively; in case there is any conflict between the Chinese version and the English version, the Chinese versionshall prevail.11.5可分割性Severability如果本协议有任何一条或多条规定根据任何法律或法规在任何方面被裁定为无效、不合法或不可执行，本协议其余规定的有效性、合法性或可执行性不应因此在任何方面受到影响或损害。各方应通过诚意磋商，争取以法律许可以及各方期望的最大限度内有效的规定取代那些无效、不合法或不可执行的规定，而该等有效的规定所产生的经济效果应尽可能与那些无效、不合法或不能强制执行的规定所产生的经济效果相似。In the event that one or several of the provisions of this Agreement are found to be invalid, illegal or unenforceable in any aspect in accordancewith any laws or regulations, the validity, legality or enforceability of the remaining provisions of this Agreement shall not be affected orcompromised in any respect. The Parties shall strive in good faith to replace such invalid, illegal or unenforceable provisions with effectiveprovisions that accomplish to the greatest extent permitted by law and the intentions of the Parties, and the economic effect of such effectiveprovisions shall be as close as possible to the economic effect of those invalid, illegal or unenforceable provisions.24秘密文件Strictly Confidential11.6继任者Successors本协议对各方各自的继任者和各方所允许的受让方应具有约束力并对其有利。This Agreement shall be binding on and shall inure to the interest of the respective successors of the Parties and the permitted assigns of suchParties.11.7继续有效Survival11.7.1协议期满或提前终止前因本协议而发生的或到期的任何义务在本协议期满或提前终止后继续有效。Any obligations that occur or that are due as a result of this Agreement upon the expiration or early termination of this Agreement shallsurvive the expiration or early termination thereof.11.7.2本协议第5、6、9条和本第11.7条的规定在本协议终止后继续有效。The provisions of Articles 5, 6, 9 and this Section 11.7 shall survive the termination of this Agreement.25秘密文件Strictly Confidential11.8弃权Waivers任何一方可以对本协议的条款和条件作出弃权，但必须经书面作出并经各方签字。一方在某种情况下就其他方的违约所作的弃权不应被视为该方在其他情况下就类似的违约已经对其他方作出弃权。Any Party may waive the terms and conditions of this Agreement, provided that such a waiver must be provided in writing and shall require thesignatures of the Parties. No waiver by any Party in certain circumstances with respect to a breach by other Parties shall operate as a waiver bysuch a Party with respect to any similar breach in other circumstances.本页其余部分刻意留为空白The Remainder of this page is intentionally left blank26秘密文件Strictly Confidential有鉴于此，各方已自行或使得其各自授权代表于文首所载日期签署本独家购买权协议。IN WITNESS WHEREOF, the Parties have executed, or caused their respective duly authorized representatives to execute, this Exclusive Option Agreement as ofthe date first above written.甲方：中传天下信息科技（深圳）有限公司（盖章）Party A: Zhongchuan Tianxia Information Technology (Shenzhen) Co., Ltd. (Seal)签字：By:/s/ Hong Ting姓名：洪婷Name: Hong Ting职务：总经理Title: General Manager秘密文件 Strictly Confidential有鉴于此，各方已自行或使得其各自授权代表于文首所载日期签署本独家购买权协议。IN WITNESS WHEREOF, the Parties have executed, or caused their respective duly authorized representatives to execute, this Exclusive Option Agreement as ofthe date first above written.乙方：Party B:宋雪松Song Xuesong签字：By:/s/ Song Xuesong秘密文件 Strictly Confidential有鉴于此，各方已自行或使得其各自授权代表于文首所载日期签署本独家购买权协议。IN WITNESS WHEREOF, the Parties have executed, or caused their respective duly authorized representatives to execute, this Exclusive Option Agreement as ofthe date first above written.乙方：Party B:陈蔚力Chen Weili签字：By:/s/ Chen Weili秘密文件 Strictly Confidential有鉴于此，各方已自行或使得其各自授权代表于文首所载日期签署本独家购买权协议。IN WITNESS WHEREOF, the Parties have executed, or caused their respective duly authorized representatives to execute, this Exclusive Option Agreement as ofthe date first above written.乙方：Party B:王平Wang Ping签字：By:/s/ Wang Ping秘密文件 Strictly Confidential有鉴于此，各方已自行或使得其各自授权代表于文首所载日期签署本独家购买权协议。IN WITNESS WHEREOF, the Parties have executed, or caused their respective duly authorized representatives to execute, this Exclusive Option Agreement as ofthe date first above written.乙方：Party B:刘东来Liu Donglai签字：By:/s/ Liu Donglai秘密文件 Strictly Confidential有鉴于此，各方已自行或使得其各自授权代表于文首所载日期签署本独家购买权协议。IN WITNESS WHEREOF, the Parties have executed, or caused their respective duly authorized representatives to execute, this Exclusive Option Agreement as ofthe date first above written.丙方：北京中传视讯科技有限公司（盖章）Party B: Beijing Mobile Vision Technology Co., Ltd. (Seal)签字：By:/s/ Song Xuesong姓名：宋雪松Name:Song Xuesong职务：董事长Title:Chairman of the Board秘密文件 Strictly ConfidentialEX4.17 5 f20f2017ex417_luokung.htm EQUITY INTEREST PLEDGE AGREEMENT BY AND AMONG ZHONGCHUAN TIANXIA INFORMATION TECHNOLOGY(SHENZHEN) CO., LTD., XUESONG SONG, WEILI CHEN, PING WANG, DONGLAI LIU, AND BEIJING MOBILE VISION TECHNOLOGY CO., LTD., DATEDAUGUST 31, 2015Exhibit 4.17股权质押协议Equity Interest Pledge Agreement本股权质押协议（下称"本协议”）由下列各方于年月日在中华人民共和国（下称“中国”）北京签订：This Equity Interest Pledge Agreement (this "Agreement") has been executed by and among the following parties on in Beijing, the People’sRepublic of China (the “China” or “PRC”):甲方：中传天下信息科技（深圳）有限公司（下称“质权人”）Party A: Zhongchuan Tianxia Information Technology (Beijing) Co., Ltd. (“Pledgee”)地址：深圳市南山区高新中三道2号深圳软件园一期五栋401AAddress: 401A, Building 5, Phase 1, Shenzhen Software Park, No.2 Gaoxin Zhongsan Road, Nanshan District, Shenzhen统一社会信用代码： 91440300565701058RUniform Social Credit Code: 91440300565701058R乙方(下称“出质人”)：Party B ( “Pledgors”):a)宋雪松Song Xuesong身份证号码:ID Card No.:b)陈蔚力Chen Weili身份证号码:ID Card No.:1秘密文件 Strictly Confidentialc)王平Wang Ping身份证号码:ID Card No.:d)刘东来Liu Donglai身份证号码:ID Card No.:丙方：北京中传视讯科技有限公司Party C: Beijing Mobile Vision Technology Co., Ltd.地址：北京市朝阳区光华路9号SOHO3QLAB32Address: LAB32, SOHO3Q, No 9, Guanghua Road, Chaoyang District, Beijing统一社会信用代码：9111010576215249XMUniform Social Credit Code: 9111010576215249XM在本协议中，质权人、出质人和丙方以下各称“一方”，合称“各方”。In this Agreement, each of Pledgee, Pledgors and Party C shall be referred to as a "Party" respectively, and they shall be collectively referred to as the"Parties".鉴于：Whereas:1．出质人全部为中国境内居民自然人，共同持有丙方100%的股权。丙方是一家在中国注册成立的、主要从事手机视频技术研发、内容制作和产业化市场推广的有限责任公司。丙方有意在此确认出质人和质权人在本协议下的权利和义务并提供必要的协助登记该质权；All of the Pledgors are natural persons resided in PRC, and collectively hold 100% of the equity interest in Party C. Party C is a limited company registered inChina, mainly engaging in mobile video frequency technology research, development, content creation, sale and related industrialization promotion. Party Cacknowledges the respective rights and obligations of Pledgors and Pledgee under this Agreement, and intends to provide any necessary assistance inregistering the Pledge;2．质权人是一家在中国注册的外商独资企业。质权人与丙方于年月日签订了独家业务合作协议；Pledgee is a whollyforeignowned enterprise registered in China. Pledgee and Party C have executed an Exclusive Business Cooperation Agreement as of [*],[*];3．为了保证丙方全面履行独家业务合作协议项下的义务，出质人以其拥有的全部丙方股权向质权人做出质押担保。To ensure that Party C fully performs its obligations under the Exclusive Business Cooperation Agreement, Pledgors hereby pledge to the Pledgee all of theequity interests they hold in Party C.为了履行业务合作协议的条款，各方商定按照以下条款签订本协议。To perform the provisions of the Business Cooperation Agreement, the Parties have mutually agreed to execute this Agreement upon the following terms.2秘密文件 Strictly Confidential1.定义Definitions除非本协议另有规定，下列词语含义为：Unless otherwise provided herein, the terms below shall have the following meanings:1.1质权：指出质人根据本协议第2条给予质权人的担保物权，即指质权人所享有的，以出质人质押给质权人的股权折价或拍卖、变卖该股权的价款优先受偿的权利。Pledge: shall refer to the security interest granted by Pledgors to Pledgee pursuant to Article 2 of this Agreement, i.e., the right of Pledgee to becompensated on a preferential basis with the conversion, auction or sales price of the Equity Interest.1.2股权：指出质人现在和将来（通过增资和/或转股）合法持有的其在丙方的全部股权权益。Equity Interest: shall refer to all of the equity interest in Party C lawfully, held now and to be held (through capital increase and/or equity transfer)hereafter by Pledgors.1.3质押期限：指本协议第3条规定的期间。Term of Pledge: shall refer to the term set forth in Article 3 of this Agreement.1.4业务合作协议：指丙方与质权人于本协议日签订的独家业务合作协议。Business Cooperation Agreement: shall refer to the Exclusive Business Cooperation Agreement executed by and between Party C and Pledgee on thedate of this Agreement.1.5违约事件：指本协议第7条所列任何情况。Event of Default: shall refer to any of the circumstances set forth in Article 7 of this Agreement.1.6违约通知：指质权人根据本协议发出的宣布违约事件的通知。Notice of Default: shall refer to the notice issued by Pledgee in accordance with this Agreement declaring an Event of Default.3秘密文件 Strictly Confidential2.质权The Pledge作为丙方按时和全额支付业务合作协议项下质权人应得的任何或全部的款项，包括但不限于业务合作协议中规定的咨询和服务费的担保（无论该等费用的到期应付是由于到期日的到来、提前收款的要求或其它原因），以及丙方充分履行其在业务合作协议项下其他所有义务（丙方按时和全额支付业务合作协议项下甲方应得的任何或全部的款项及丙方在业务合作协议项下其他所有义务，以下统称为“被担保债务”）的担保，出质人特此将其现有或将拥有的丙方的全部股权权益质押给质权人。As collateral security for the timely and complete payment and performance when due (whether at stated maturity, by acceleration or otherwise) of any or all ofthe payments due (the “all payments in pledge”) by Party C, including without limitation the consulting and services fees payable to the Pledgee under theBusiness Cooperation Agreement, Pledgors hereby pledge to Pledgee a first security interest in all of Pledgors’ right, title and interest, whether now owned orhereafter acquired by Pledgors, in the Equity Interest of Party C.3.质押期限Term of Pledge3.1本质权自本协议项下的股权出质在相应的工商行政管理机关登记之日起生效，质权有效期持续到业务合作协议下所有丙方欠付质权人的款项结清为止。出质人和丙方应（一）自本协议签署之日起3个工作日内，将本协议的质权登记在丙方股东名册上，并（二）自本协议签署之日起10个工作日内向相应的工商行政管理机关申请登记本协议项下的质权。各方共同确认，为办理股权质押工商登记手续，各方及丙方其他股东应按照丙方所在地工商行政管理部门要求的形式签署、真实反映本协议项下质权信息的《股权质押合同》（以下简称“工商登记质押合同”）提交给工商管理机关，工商登记质押合同中未约定事项，仍以本协议约定为准。出质人和丙方应当按照中国法律法规和有关工商行政管理机关的各项要求，提交所有必要的文件并办理所有必要手续，保证质权在递交申请后尽快获得登记。如果出质人持有的丙方注册资本数额增加（不管是通过直接认缴丙方的增资还是从其他股东处受让股权），各方一致同意将采取一切必要的行动和签署一切必要的文件以按照登记机关的要求完成质权的变更登记，以确保本协议项下的质权的持续有效。The Pledge shall become effective on such date when the pledge of the Equity Interest contemplated herein has been registered’ with relevantadministration for industry and commerce (the “AIC”). The Pledge shall be continuously valid until all payments due under the Business CooperationAgreement have been fulfilled by Party C. Pledgors and Party C shall (1) register the Pledge in the shareholders' register of Party C within 3 businessdays following the execution of this Agreement, and (2) submit an application to the AIC for the registration of the Pledge of the Equity Interestcontemplated herein within 10 business days following the execution of this Agreement. The parties covenant that for the purpose of registration of thePledge, the parties hereto and all other shareholders of Party C shall submit to the AIC the Equity Interest Pledge Contract in the form required by theAIC at the location of Party C which shall truly reflect the information of the Pledge hereunder (the “AIC Pledge Contract”). For matters not specified inthe AIC Pledge Contract, the parties shall be bound by the provisions of this Agreement. Pledgors and Party C shall submit all necessary documentsand complete all necessary procedures, as required by the PRC laws and regulations and the relevant AIC, to ensure that the Pledge of the EquityInterest shall be registered with the AIC as soon as possible after filing. In the event that the amount of registered capital held by Pledgors is increased(either by subscribing increased registered capital from Party C or acquiring equity interest from other shareholders), the Parties hereto agree that theyshall take any necessary action and execute any necessary document to complete the registration of change of Pledge according to the requirement ofAIC so that the Pledge in this Agreement remains effective.4秘密文件 Strictly Confidential3.2质押期限内，如丙方未按业务合作协议交付咨询服务费等费用，质权人有权但无义务按本协议的规定处分质权。During the Term of Pledge, in the event Party C fails to pay the exclusive consulting or service fees in accordance with the Business CooperationAgreement, Pledgee shall have the right, but not the obligation, to dispose of the Pledge in accordance with the provisions of this Agreement.4.质权凭证的保管Custody of Records for Equity Interest subject to Pledge4.1在本协议规定的质押期限内，出质人应将其在丙方的股权出资证明书及记载质权的股东名册交付质权人保管。出质人应在本协议签订之日起一周内将上述股权出资证明书及股东名册交付给质权人。质权人将在本协议规定的全部质押期间一直保管这些项目。During the Term of Pledge set forth in this Agreement, Pledgors shall deliver to Pledgee's custody the capital contribution certificate for the EquityInterest and the shareholders' register containing the Pledge within one week from the execution of this Agreement. Pledgee shall have custody of suchitems during the entire Term of Pledge set forth in this Agreement.4.2在质押期限内，股权所产生的红利应当无条件归质权人所有。Dividends generated by the Equity Interest shall be unconditionally owned by the Pledgee during the Term of Pledge.5秘密文件 Strictly Confidential5.出质人的声明和保证Representations and Warranties of Pledgors5.1出质人是股权唯一的合法所有人。Pledgors are the sole legal and beneficial owners of the Equity Interest.5.2质权人有权以本协议规定的方式处分并转让股权。Pledgee shall have the right to dispose of and transfer the Equity Interest in accordance with the provisions set forth in this Agreement.5.3除本质权之外，出质人未在股权上设置任何其他质押权利或其他担保权益。Except for the Pledge, Pledgors have not placed any security interest or other encumbrance on the Equity Interest.6.出质人的承诺和确认Covenants and Further Agreements of Pledgors6.1在本协议存续期间，所有出质人向质权人承诺，出质人将：All of the Pledgors hereby covenant to the Pledgee, that during the term of this Agreement, Pledgors shall:6.1.1除履行由出质人与质权人、丙方于本协议签署日签订的《独家购买权合同》外，未经质权人事先书面同意，不得转让股权，不得在股权上设立或允许存在任何担保或其他债务负担；not transfer the Equity Interest, place or permit the existence of any security interest or other encumbrance on the Equity Interest, without theprior written consent of Pledgee, except for the performance of the Exclusive Option Agreement executed by Pledgors, the Pledgee and Party Con the execution date of this Agreement;6秘密文件 Strictly Confidential6.1.2遵守并执行所有有关权利质押的法律、法规的规定，在收到有关主管机关就质权发出或制定的通知、指令或建议时，于五日内向质权人出示上述通知、指令或建议，同时遵守上述通知、指令或建议，或按照质权人的合理要求或经质权人同意就上述事宜提出反对意见和陈述；comply with the provisions of all laws and regulations applicable to the pledge of rights, and within 5 days of receipt of any notice, order orrecommendation issued or prepared by relevant competent authorities regarding the Pledge, shall present the aforementioned notice, order orrecommendation to Pledgee, and shall comply with the aforementioned notice, order or recommendation or submit objections andrepresentations with respect to the aforementioned matters upon Pledgee's reasonable request or upon consent of Pledgee;6.1.3将任何可能导致对出质人股权或其任何部分的权利产生影响的事件或收到的通知，以及可能改变出质人在本协议中的任何保证、义务或对出质人履行其在本协议中义务可能产生影响的任何事件或收到的通知及时通知质权人。promptly notify Pledgee of any event or notice received by Pledgors that may have an impact on Pledgee's rights to the Equity Interest or anyportion thereof, as well as any event or notice received by Pledgors that may have an impact on any guarantees and other obligations ofPledgors arising out of this Agreement.6.2出质人同意，质权人按本协议条款取得的对质权享有的权利，不应受到出质人或出质人的继承人或出质人之委托人或任何其他人通过法律程序的中断或妨害。Pledgors agree that the rights acquired by Pledgee in accordance with this Agreement with respect to the Pledge shall not be interrupted or harmed byPledgors or any heirs or representatives of Pledgors or any other persons through any legal proceedings.7秘密文件 Strictly Confidential6.3出质人向质权人保证，为保护或完善本协议对偿付业务合作协议项下被担保债务的担保，出质人将诚实签署、并促使其他与质权有利害关系的当事人签署质权人所要求的所有的权利证书、契约和/或履行并促使其他有利害关系的当事人履行质权人所要求的行为，并为本协议赋予质权人之权利、授权的行使提供便利，与质权人或其指定的人(自然人/法人)签署所有的有关股权所有权的文件，并在合理期间内向质权人提供其认为需要的所有的有关质权的通知、命令及决定。To protect or perfect the security interest granted by this Agreement for payment of all payment in pledge under the Business Cooperation Agreement,Pledgors hereby undertake to execute in good faith and to cause other parties who have an interest in the Pledge to execute all certificates, agreements,deeds and/or covenants required by Pledgee. Pledgors also undertake to perform and to cause other parties who have an interest in the Pledge toperform actions required by Pledgee, to facilitate the exercise by Pledgee of its rights and authority granted thereto by this Agreement, and to enter intoall relevant documents regarding ownership of Equity Interest with Pledgee or designee(s) of Pledgee (natural persons/legal persons). Pledgorsundertake to provide Pledgee within a reasonable time with all notices, orders and decisions regarding the Pledge that are required by Pledgee.6.4出质人向质权人保证，出质人将遵守、履行本协议项下所有的保证、承诺、协议、陈述及条件。如出质人不履行或不完全履行其保证、承诺、协议、陈述及条件，出质人应赔偿质权人由此遭受的一切损失。Pledgors hereby undertake to comply with and perform all guarantees, promises, agreements, representations and conditions under this Agreement. Inthe event of failure the whole or partial performance of its guarantees, promises, agreements, representations and conditions, Pledgors shall indemnifyPledgee for all losses resulting therefrom.8秘密文件 Strictly Confidential7.违约事件Event of Default7.1下列事项均被视为违约事件：The following circumstances shall be deemed Event of Default:7.1.1丙方未能按期、完整履行任何业务合作协议项下责任，包括但不限于丙方未能按期足额支付业务合作协议项下的应付的被担保债务或有违反该协议其他义务的行为；Party C fails to fully and timely fulfill any liabilities under the Business Cooperation Agreement, including without limitation failure to pay infull any of the all payment in pledge payable under the Business Cooperation Agreement or breaches any other obligations of Party Cthereunder;7.1.2出质人或丙方实质违反本协议的任何条款；Pledgors or Party C have committed a material breach of any provisions of this Agreement;7.1.3除本协议第6.1.1条的约定外，出质人舍弃出质的股权或未获得质权人书面同意而擅自转让或意图转让出质的股权；和Except as expressly stipulated in Section 6.1.1, Pledgors transfers or purports to transfer or abandons the Equity Interest pledged or assignsthe Equity Interest pledged without the written consent of Pledgee; and7.1.4丙方的继承人或代管人只能履行部分或拒绝履行业务合作协议项下的支付责任。The successor or custodian of Party C is capable of only partially perform or refuses to perform the payment obligations under the BusinessCooperation Agreement.9秘密文件 Strictly Confidential7.2如知道或发现本第7.1条所述的任何事项或可能导致上述事项的事件已经发生，出质人应立即以书面形式通知质权人。Upon notice or discovery of the occurrence of any circumstances or event that may lead to the aforementioned circumstances described in Section 7.1,Pledgors shall immediately notify Pledgee in writing accordingly.7.3除非第7.1部分下的违约事件在质权人向出质人发出要求其修补此违约行为通知后的二十（20）天之内已经按质权人要求获得救济，质权人在其后的任何时间，可向出质人发出书面违约通知，要求依据第8部分履行其处理股权的权利。Unless an Event of Default set forth in this Section 7.1 has been successfully resolved to Pledgee's satisfaction within twenty (20) days after the Pledgeedelivers a notice to the Pledgors requesting ratification of such Event of Default, Pledgee may issue a Notice of Default to Pledgors in writing at any timethereafter, demanding the Pledgors to immediately dispose of the Pledge in accordance with the provisions of Article 8 of this Agreement.8.质权的行使Exercise of Pledge8.1在被担保债务被全部清偿或履行前，未经质权人书面同意，出质人不得转让本质权和其拥有的丙方股权。Prior to the full payment of all payments in pledge, without the Pledgee's written consent, Pledgors shall not assign the Pledge or the Equity Interest inParty C.8.2在质权人行使其质押权利时，质权人可以向出质人发出书面违约通知。Pledgee may issue a Notice of Default to Pledgors when exercising the Pledge.10秘密文件 Strictly Confidential8.3在质权人行使其质押权利时，根据中国有关法律的规定，质权人有权按照法定程序处置质押股权。仅在中国法律允许的范围内，对于处置的所得，质权人无需给付出质人；除非中国法律另有规定，出质人特此放弃其可能有的能向质权人要求任何质押股权处置所得的权利；同样，出质人对质权人在该质押股权处置后的亏损也不承担任何义务。When the Pledgor exercises the pledge right, Pledgee is entitled to dispose of the Equity Interest pledged in accordance with applicable PRC laws. Onlyto the extent permitted under applicable PRC laws, Pledgee has no obligation to account to Pledgors for proceeds of disposition of the Equity Interest.Unless otherwise required by PRC laws, Pledgors hereby waive any rights it may have to demand any such accounting from Pledgee; Likewise, in suchcircumstance Pledgors shall have no obligation to Pledgee for any deficiency remaining after such disposition of the Equity Interest pledged.8.4质权人依照本协议处分质权时，出质人和丙方应予以必要的协助，以使质权人实现其质权。When Pledgee disposes of the Pledge in accordance with this Agreement, Pledgors and Party C shall provide necessary assistance to enable Pledgee toenforce the Pledge in accordance with this Agreement.9.转让Assignment9.1除非经质权人事先同意，出质人无权赠予或转让其在本协议项下的权利义务。Without Pledgee's prior written consent, Pledgors shall not have the right to assign or delegate its rights and obligations under this Agreement.11秘密文件 Strictly Confidential9.2本协议对出质人及其继任人和经许可的受让人均有约束力，并且对质权人及每一继任人和受让人有效。This Agreement shall be binding on Pledgors and their successors and permitted assigns, and shall be valid with respect to Pledgee and each of itssuccessors and assigns.9.3经出质人同意，质权人可以在任何时候将其在业务合作协议项下的所有或任何权利和义务转让给其指定的关联方（自然人/法人），在这种情况下，受让人应享有和承担本协议项下质权人享有和承担的权利和义务，如同其作为原协议方应享有和承担的一样。质权人转让业务合作协议项下的权利和义务时，应质权人要求，出质人应就此转让签署有关协议和/或文件。Upon the Pledgors’ agreement, Pledgee may assign any or all of its rights and obligations under the Business Cooperation Agreement to its designee(s)(natural/legal persons) at any time, in which case the assigns shall have the rights and obligations of Pledgee under this Agreement, as if it were theoriginal party to this Agreement. When the Pledgee assigns the rights and obligations under the Business Cooperation Agreement, upon Pledgee'srequest, Pledgors shall execute relevant agreements or other documents relating to such assignment.9.4因转让所导致的质权人变更后，应质权人要求，出质人应与新的质权人签订一份内容与本协议一致的新质押协议，并在相应的工商行政管理机关进行登记。In the event of a change in Pledgee due to an assignment, Pledgors shall, at the request of Pledgee, execute a new pledge agreement with the newpledgee on the same terms and conditions as this Agreement, and register the same with the relevant AIC.12秘密文件 Strictly Confidential9.5出质人应严格遵守本协议和各方单独或共同签署的其他有关协议的规定，包括独家购买权合同和对质权人的授权委托书，履行各协议项下的义务，并不进行任何足以影响协议的有效性和可强制执行性的作为/不作为。除非根据质权人的书面指示，出质人不得行使其对质押股权还留存的权利。Pledgors shall strictly abide by the provisions of this Agreement and other contracts jointly or separately executed by the Parties hereto or any of them,including the Exclusive Option Agreement and the Power of Attorney granted to Pledgee, perform the obligations hereunder and thereunder, and refrainfrom any action/omission that may affect the effectiveness and enforceability thereof. Any remaining rights of Pledgors with respect to the EquityInterest pledged hereunder shall not be exercised by Pledgors except in accordance with the written instructions of Pledgee.10.终止Termination在被担保债务被全部清偿或履行完毕之后，本质权人应在尽早合理可行的时间内办理或配合办理解除质押的手续，出质人与丙方应提供相应的配合与协助。Upon the full payment of all payments in pledge under the Business Cooperation Agreement a, Pledgor shall then, with the assistance of Party B and Party C,go through the procedures of cancellation of pledge rights at a reasonable time as soon as practicable.11.手续费及其他费用Handling Fees and Other Expenses一切与本协议有关的费用及实际开支，其中包括但不限于法律费用、工本费、印花税以及任何其他税收、费用等全部由丙方承担。All fees and out of pocket expenses relating to this Agreement, including but not limited to legal costs, costs of production, stamp tax and any other taxes andfees, shall be borne by Party C.13秘密文件 Strictly Confidential12.保密责任Confidentiality各方承认及确定有关本协议、本协议内容，以及彼此就准备或履行本协议而交换的任何口头或书面资料均被视为保密信息。各方应当对所有该等保密信息予以保密，而在未得到另一方书面同意前，不得向任何第三者披露任何保密信息，惟下列信息除外：(a)公众人士知悉或将会知悉的任何信息（惟并非由接受保密信息之一方擅自向公众披露）；(b)根据适用法律法规、股票交易规则、或政府部门或法院的命令而所需披露之任何信息；或(c)由任何一方就本协议所述交易而需向其股东、投资者、法律或财务顾问披露之信息，而该股东、法律或财务顾问亦需遵守与本条款相类似之保密责任。如任何一方工作人员或聘请机构的泄密均视为该方的泄密，需依本协议承担违约责任。无论本协议以任何理由终止，本条款仍然生效。The Parties acknowledge that the existence and the terms of this Agreement and any oral or written information exchanged between the Parties in connectionwith the preparation and performance this Agreement are regarded as confidential information. Each Party shall maintain confidentiality of all such confidentialinformation, and without obtaining the written consent of the other Party, it shall not disclose any relevant confidential information to any third parties, exceptfor the information that: (a) is or will be in the public domain (other than through the receiving Party’s unauthorized disclosure); (b) is under the obligation tobe disclosed pursuant to the applicable laws or regulations, rules of any stock exchange, or orders of the court or other government authorities; or (c) isrequired to be disclosed by any Party to its shareholders, investors, legal counsels or financial advisors regarding the transaction contemplated hereunder,provided that such shareholders, investors, legal counsels or financial advisors shall be bound by the confidentiality obligations similar to those set forth inthis Section. Disclosure of any confidential information by the staff members or agencies hired by any Party shall be deemed disclosure of such confidentialinformation by such Party, which Party shall be held liable for breach of this Agreement. This Section shall survive the termination of this Agreement for anyreason.14秘密文件 Strictly Confidential13.适用法律和争议的解决Governing Law and Resolution of Disputes13.1本协议的订立、效力、解释、履行、修改和终止以及争议的解决均适用中国法律。The execution, effectiveness, construction, performance, amendment and termination of this Agreement and the resolution of disputes hereunder shallbe governed by the laws of China.13.2因解释和履行本协议而发生的任何争议，本协议各方应首先通过友好协商的方式加以解决。如果在一方向其他方发出要求协商解决的书面通知后30天之内争议仍然得不到解决，则任何一方均可将有关争议提交给中国国际经济贸易仲裁委员会，由该会按照其仲裁规则仲裁解决。仲裁应在北京进行，使用之语言为中文。仲裁裁决是终局性的，对各方均有约束力。In the event of any dispute with respect to the construction and performance of this Agreement, the Parties shall first resolve the dispute throughfriendly negotiations. In the event the Parties fail to reach an agreement on the dispute within 30 days after either Party's request to the other Parties forresolution of the dispute through negotiations, either Party may submit the relevant dispute to the China International Economic and Trade ArbitrationCommission for arbitration, in accordance with its Arbitration Rules. The arbitration shall be conducted in Beijing, and the language used in arbitrationshall be Chinese. The arbitration award shall be final and binding on all Parties.13.3因解释和履行本协议而发生任何争议或任何争议正在进行仲裁时，除争议的事项外，本协议各方仍应继续行使各自在本协议项下的其他权利并履行各自在本协议项下的其他义务。Upon the occurrence of any disputes arising from the construction and performance of this Agreement or during the pending arbitration of any dispute,except for the matters under dispute, the Parties to this Agreement shall continue to exercise their respective rights under this Agreement and performtheir respective obligations under this Agreement.15秘密文件 Strictly Confidential14.通知Notices14.1本协议项下要求或发出的所有通知和其他通信应通过专人递送、挂号邮寄、邮资预付或商业快递服务或传真的方式发到该方下列地址。每一通知还应再以电子邮件送达。该等通知视为有效送达的日期按如下方式确定：All notices and other communications required or permitted to be given pursuant to this Agreement shall be delivered personally or sent by registeredmail, postage prepaid, by a commercial courier service or by facsimile transmission to the address of such party set forth below. A confirmation copy ofeach notice shall also be sent by Email. The dates on which notices shall be deemed to have been effectively given shall be determined as follows:14.1.1通知如果是以专人递送、快递服务或挂号邮寄、邮资预付发出的，则以于设定为通知的地址在接收或拒收之日为有效送达日。Notices given by personal delivery, by courier service or by registered mail, postage prepaid, shall be deemed effectively given on the date ofreceipt or refusal at the address specified for notices.14.1.2通知如果是以传真发出的，则以成功传送之日为有效送达日（应以自动生成的传送确认信息为证）。Notices given by facsimile transmission shall be deemed effectively given on the date of successful transmission (as evidenced by anautomatically generated confirmation of transmission).16秘密文件 Strictly Confidential14.2为通知的目的，各方地址如下：For the purpose of notices, the addresses of the Parties are as follows:甲方：中传天下信息科技（深圳）有限公司Party A: Zhongchuan Tianxia Information Technology (Shenzhen) Co., Ltd.地址：深圳市南山区高新中三道2号深圳软件园一期五栋401AAddress: 401A, Building 5, Phase 1, Shenzhen Software Park, No.2 Gaoxin Zhongsan Road, Nanshan District, Shenzhen.收件人：洪婷Attn: Hong Ting乙方：Party B:a)宋雪松Song Xuesong地址：125.Expenses, including legal fees, incurred by a director in defending any legal, administrative or investigative proceedings may be paid by the Company inadvance of the final disposition of such proceedings upon receipt of an undertaking by or on behalf of the director to repay the amount if it shall ultimatelybe determined that the director is not entitled to be indemnified by the Company in accordance with these Articles.126.Expenses, including legal fees, incurred by a former director in defending any legal, administrative or investigative proceedings may be paid by theCompany in advance of the final disposition of such proceedings upon receipt of an undertaking by or on behalf of the former director to repay the amountif it shall ultimately be determined that the director is not entitled to be indemnified by the Company in accordance with these Articles.127.The indemnification and advancement of expenses provided by, or granted pursuant to, these Articles is not exclusive of any other rights to which theperson seeking indemnification of advancement of expenses may be entitled under any agreement, resolution of members, resolution of disinteresteddirectors or otherwise, both as to acting in the person’s official capacity and as to acting in another capacity while serving as a director of the Company.128.If a person to be indemnified has been successful in defence of any proceedings referred to above the person is entitled to be indemnified against allexpenses, including legal fees, and against all judgments, fines and amounts paid in settlement and reasonably incurred by the person in connection withthe proceedings.129.The Company may purchase and maintain insurance in relation to any person who is or was a director, an officer or a liquidator of the Company, or who atthe request of the Company is or was serving as a director, an officer or a liquidator of, or in any other capacity is or was acting for, another body corporateor a partnership, joint venture, trust or other enterprise, against any liability asserted against the person and incurred by the person in that capacity,whether or not the Company has or would have had the power to indemnify the person against the liability as provided in these Articles.SEAL130.The Company shall have a Seal and may have more than one Seal. References herein to the Seal shall be references to every Seal which shall have beenduly adopted by resolution of directors. The directors shall provide for the safe custody of the Seal and for an imprint thereof to be kept at the office of theregistered agent of the Company. Except as otherwise expressly provided herein, the Seal when affixed to any written instrument, shall be witnessed andattested to by the signature of a director or any other person so authorized from time to time by resolution of directors. Such authorization may be before orafter the Seal is affixed, may be general or specific and may refer to any number of sealings. The Directors may provide for a facsimile of the Seal and of thesignature of any director or authorized person which may be reproduced by printing or other means on any instrument and it shall have the same force andvalidity as if the Seal had been affixed to such instrument and the same had been signed as hereinbefore described.21DISTRIBUTIONS131.The directors of the Company may by resolution authorise a distribution by the Company at any time and of any amount and to any members they think fitif they are satisfied on reasonable grounds that immediately after the distribution;a.the value of the Company’s assets will exceed its liabilities, andb.the Company will be able to pay its debts as they fall due.132.A resolution of the directors passed under the preceding Article shall contain a statement that, in the opinion of the directors, immediately after thedistribution the value of the Company’s assets will exceed its liabilities, and the Company will be able to pay its debts as they fall due.133.If, after a distribution is authorised and before it is made, the directors cease to be satisfied on reasonable grounds that the Company will, immediately afterthe distribution satisfy the solvency test, any distribution made by the Company is deemed not to have been authorised.134.If, by virtue of the preceding Article, a distribution is deemed not to have been authorised, a director who;a.ceased, after authorisation but before the making of the distribution, to be satisfied on reasonable grounds for believing that the company wouldsatisfy the solvency test immediately after the distribution is made; andb.failed to take reasonable steps to prevent the distribution being made;is personally liable to the company to repay to the company so much of the distribution as is not able to be recovered from members.135.A distribution made to a member at a time when the company did not, immediately after the distribution, satisfy the solvency test may be recovered by thecompany from the member unless;a.the member received the distribution in good faith and without knowledge of the company’s failure to satisfy the solvency test;b.the member has altered his position in reliance on the validity of the distribution; andc.it would be unfair to require repayment in full or at all.DISTRIBUTIONS BY WAY OF DIVIDEND136.The Company may by a resolution of directors declare a distribution by way of dividend and pay such distribution in money, shares or other property. Inthe event that distributions by way of dividend are paid in specie the directors shall have responsibility for establishing and recording in the resolution ofdirectors authorizing the distribution by way of dividend, a fair and proper value for the assets to be so distributed.137.The directors may from time to time pay to the members such interim distributions by way of dividend as appear to the directors to be justified by theprofits of the Company.138.The directors may, before declaring any distribution by way of dividend, set aside out of the profits of the Company such sum as they think proper as areserve fund, and may invest the sum so set aside as a reserve fund upon such securities as they may select.139.Notice of any distribution by way of dividend that may have been declared shall be given to each member in the manner hereinafter mentioned and alldistributions by way of dividend unclaimed for 3 years after having been declared may be forfeited by resolution of directors for the benefit of theCompany.140.No distribution by way of dividend shall bear interest as against the Company and no distribution by way of dividend shall be paid on treasury shares orshares held by another company of which the Company holds, directly or indirectly, shares having more than 50 percent of the vote in electing directors.22141.A share issued as a distribution by way of dividend by the Company shall be treated for all purposes as having been issued for money equal to the valuedetermined by resolution of the directors. In the absence of fraud the decision of the directors as to the value of the share is conclusive unless a questionof law is involved.142.A division of the issued and outstanding shares of a class or series of shares into a larger number of shares of the same class or series having aproportionately smaller par value does not constitute a distribution by way of dividend of shares.ACCOUNTS AND AUDIT143.The Company may by resolution of members call for the directors to prepare periodically a profit and loss account and a balance sheet. The profit and lossaccount and balance sheet shall be drawn up so as to give respectively a true and fair view of the profit and loss of the Company for the financial periodand a true and fair view of the state of affairs of the Company as at the end of the financial period.144.The Company may by resolution of members call for the accounts to be examined by auditors.145.Subject to the rules of the Designated Stock Exchange, the first auditors shall be appointed by resolution of directors; subsequent auditors shall beappointed by the Audit Committee and shall hold office until the Audit Committee appoint another independent auditor.146.Subject to the rules of the Designated Stock Exchange, the remuneration of the auditors of the Company shall be fixed by the Audit Committee.147.The auditors shall examine each profit and loss account and balance sheet required to be served on every member of the Company or laid before a meetingof the members of the Company and shall state in a written report whether or nota.in their opinion the profit and loss account and balance sheet give a true and fair view respectively of the profit and loss for the period covered bythe accounts, and of the state of affairs of the Company at the end of that period; andb.all the information and explanations required by the auditors have been obtained.148.The report of the auditors shall be annexed to the accounts and shall be read at the meeting of members at which the accounts are laid before the Companyor shall be served on the members.149.Every auditor of the Company shall have a right of access at all times to the books of account and vouchers of the Company, and shall be entitled to requirefrom the directors and officers of the Company such information and explanations as he thinks necessary for the performance of the duties of the auditors.150.The auditors of the Company shall be entitled to receive notice of, and to attend any meetings of members of the Company at which the Company’s profitand loss account and balance sheet are to be presented.NOTICES151.Any notice, information or written statement to be given by the Company to members may be served in any way by which it can reasonably be expected toreach each member or by mail addressed to each member at the address shown in the share register.152.Any summons, notice, order, document, process, information or written statement to be served on the Company may be served by leaving it, or by sendingit by registered mail addressed to the Company, at its registered office, or by leaving it with, or by sending it by registered mail to, the registered agent ofthe Company.153.Service of any summons, notice, order, document, process, information or written statement to be served on the Company may be proved by showing thatthe summons, notice, order, document, process, information or written statement was delivered to the registered office or the registered agent of theCompany or that it was mailed in such time as to admit to its being delivered to the registered office or the registered agent of the Company in the normalcourse of delivery within the period prescribed for service and was correctly addressed and the postage was prepaid.23PENSION AND SUPERANNUATION FUNDS154.The directors may establish and maintain or procure the establishment and maintenance of any noncontributory or contributory pension orsuperannuation funds for the benefit of, and give or procure the giving of donations, gratuities, pensions, allowances or emoluments to, any persons whoare or were at any time in the employment or service of the Company or any company which is a subsidiary of the Company or is allied to or associated withthe Company or with any such subsidiary, or who are or were at any time directors or officers of the Company or of any such other company as aforesaid orwho hold or held any salaried employment or office in the Company or such other company, or any persons in whose welfare the Company or any suchother company as aforesaid is or has been at any time interested, and to the wives, widows, families and dependents of any such person, and may makepayments for or towards the insurance of any such persons as aforesaid, and may do any of the matters aforesaid either alone or in conjunction with anysuch other company as aforesaid. Subject always to the proposal being approved by resolution of members, a director holding any such employment oroffice shall be entitled to participate in and retain for his own benefit any such donation, gratuity, pension allowance or emolument.VOLUNTARY WINDING UP AND DISSOLUTION155.The Company may voluntarily commence to wind up and dissolve by a resolution of members but if the Company has never issued shares it mayvoluntarily commence to wind up and dissolve by resolution of directors.CONTINUATION156.The Company may by resolution of members or by a resolution passed unanimously by all directors of the Company continue as a company incorporatedunder the laws of a jurisdiction outside the British Virgin Islands in the manner provided under those laws.ARBITRATION157.Whenever any difference arises between the Company on the one hand and any of the members or their executors, administrators or assigns on the otherhand, touching the true intent and construction or the incidence or consequences of these Articles or of the Act, touching anything done or executed,omitted or suffered in pursuance of the Act or touching any breach or alleged breach or otherwise relating to the premises or to these Articles, or to anyAct or Ordinance affecting the Company or to any of the affairs of the Company such difference shall, unless the parties agree to refer the same to a singlearbitrator, be referred to 2 arbitrators one to be chosen by each of the parties to the difference and the arbitrators shall before entering on the referenceappoint an umpire.158.If either party to the reference makes default in appointing an arbitrator either originally or by way of substitution (in the event that an appointed arbitratorshall die, be incapable of acting or refuse to act) for 10 days after the other party has given him notice to appoint the same, such other party may appoint anarbitrator to act in the place of the arbitrator of the defaulting party.We, Portcullis TrustNet (BVI) Limited of Portcullis TrustNet Chambers, P.O. Box 3444, Road Town, Tortola, British Virgin Islands for the purpose of incorporating aBVI Business Company under the laws of the British Virgin Islands hereby sign these Articles of Association the 27th day of October, 2009.Incorporator/s/ Nicole WheatleyPortcullis TrustNet (BVI) LimitedPortcullis TrustNet ChambersP.O. Box 3444Road Town, TortolaBritish Virgin Islands(Sgd. Nicole Wheatley)24EX4.15 3 f20f2017ex415_luokung.htm EXCLUSIVE BUSINESS COOPERATION AGREEMENT BY AND BETWEEN ZHONGCHUAN TIANXIA INFORMATIONTECHNOLOGY (SHENZHEN) CO., LTD., AND BEIJING MOBILE VISION TECHNOLOGY CO., LTD., DATED AUGUST 31, 2015Exhibit 4.15独家业务合作协议Exclusive Business Cooperation Agreement本独家业务合作协议（下称“本协议”）由以下双方于年月日在中华人民共和国（下称“中国”）北京市签署。This Exclusive Business Cooperation Agreement (this “Agreement”) is made and entered into by and between the following parties on in Beijing, thePeople’s Republic of China (“China” or the “PRC”).甲方：中传天下信息科技（深圳）有限公司Party A: Zhongchuan Tianxia Information Technology (Shenzhen) Co., Ltd.地址：深圳市南山区高新中三道2号深圳软件园一期五栋401A Address: 401A, Building 5, Phase 1, Shenzhen Software Park, No.2 Gaoxin Zhongsan Road, Nanshan District, Shenzhen统一社会信用代码：91440300565701058R Uniform Social Credit Code: 91440300565701058R乙方：北京中传视讯科技有限公司Party B: Beijing Mobile Vision Technology Co., Ltd.地址：北京市朝阳区光华路9号SOHO3QLAB32Address: LAB32, SOHO3Q, No 9, Guanghua Road, Chaoyang District, Beijing统一社会信用代码：9111010576215249XMUniform Social Credit Code: 9111010576215249XM甲方和乙方以下各称为“一方”，统称为“双方”。Each of Party A and Party B shall be hereinafter referred to as a “Party” respectively, and as “Parties” collectively.1秘密文件Strictly Confidential鉴于：Whereas,1.甲方是一家在中国注册的外商独资企业，拥有丰富的技术研发和产业化推广相关的管理和投资经验，并提供相关的技术支持和咨询服务；Party A is a whollyforeignowned enterprise established in China, which has rich experience in technology research development and industrializationpromotion management and investment, and provides relevant technical support and consulting services;2.乙方是一家在中国成立的有限责任公司，经中国有关政府部门批准依法主要从事手机视频技术开发、内容制作及市场推广；Party B is a limited company in China, mainly engages in mobile video technology research, development, content creation, sale and related industrialpromotion as approved by the relevant governmental authorities in China;3.甲方同意利用其技术、人员和信息优势，在本协议期间向乙方提供有关手机视频技术开发、内容制作及市场推广以及未来扩大业务规模和业务范围时乙方所需的技术支持、技术咨询等相关服务，乙方同意接受甲方或其指定方按本协议条款的规定提供的各种服务。Party A is willing to provide Party B with technology supports and technology consulting services in connection with mobile video technology research,development, content creation, sale and related industrial promotion and such services in connection with Party B’s extension of business scale orbroadening of businesses during the term of this Agreement, utilizing its advantages in technology, human resources, and information, and Party B iswilling to accept such services provided by Party A or Party A's designee(s), each on the terms set forth herein.2秘密文件Strictly Confidential据此，甲方和乙方经协商一致，达成如下协议：Now, therefore, through mutual discussion, the Parties have reached the following agreements:1.服务提供Services Provided by Party A1.1按照本协议条款和条件，乙方在此委任甲方在本协议期间作为乙方的独家服务提供者向乙方提供全面的和手机视频技术开发、内容制作及市场推广相关以及未来扩大业务规模和业务范围时乙方所需的技术支持、业务支持和相关咨询服务，具体内容包括但不限于以下内容：Party B hereby appoints Party A as Party B's exclusive services provider to provide Party B with complete technical support, business supportand related consulting services in connection with mobile video technology research, development, content creation, sale and related industrialpromotion and such services in connection with Party B’s extension of business scale or broadening of businesses during the term of thisAgreement, in accordance with the terms and conditions of this Agreement, which may include but not limited to:1.1.1为乙方提供其手机视频技术开发、内容制作及市场推广业务所需的一切服务支持，为乙方提供相当于包括总经理、行政人员、管理人员、筹划部门、商业运营、人力资源、财务、会计以及与乙方业务相关的一切业务操作所需人员所能提供的服务内容；managing all aspects of Party B’s business of mobile video technology research, development, content creation, sale and relatedindustrial promotion. In this capacity, Party A will procure or engage for Party B the services of a general manager and other managementstaff, including but not limited to personnel responsible for all administration, operations, planning, business development, humanresources, finance, accounting and other operations related to the Business of Party B;3秘密文件Strictly Confidential1.1.2为乙方制定全部的商业计划、销售目标，并为优化执行该等商业计划设计和建立相应的系统及操作程序；developing all business plans and sales projections of Party B, and for developing and establishing systems and procedures for optimumexecution of the business plans;1.1.3为乙方申请手机视频技术及内容制作相关专利提供咨询服务和支持；consulting services and support in connection with Party B’s applying for mobile video technology related patents and content creation;1.1.4为乙方手机视频技术产业化的发展方向、规模、品牌提升提供咨询服务；consulting services in connection with the development directions, size and business brands promotion of Party B’s mobile videotechnology industrialization;4秘密文件Strictly Confidential1.1.5为乙方提供与业务相关的办公、生产和销售服务，为乙方租赁场所，建立业务相关的系统和程序，满足乙方的其他要求；procuring or obtaining for Party B all office, production and distribution services related to the Business. It shall procure or obtainappropriate leases, establish systems and procedures needed to operate the business, fulfill orders for services;1.1.6尽最大努力为乙方建立手机视频技术销售市场，根据甲方为乙方制定的商业计划及销售目标代表乙方获取客户订单，同时为乙方提供与业务相关的客户服务，建立向客户开具票据的程序和与会计相关的托收服务。using its best efforts to establish mobile video technology related marketing and other structures to obtain orders for services &products from customers on behalf of Party B in accordance with Party B’s business plans, sales projections and objectives (asdeveloped by Party A) and procure or obtain customer services required in connection with the Business. It shall also establishprocedures for invoicing customers, and establish collection services with respect to accounts;1.1.7就乙方的劳动用工方面提供咨询服务和支持，包括但不限于，组织实施对乙方业务人员、行政人员、管理人员等人员进行培训和考核，协助建立健全的人力资源管理制度和实现人力资源的良好配置；consulting services and support regarding labor system of Party B, including but without limitation to labor training and evaluation ofsales person, administrative staff and management person etc. and establishment of human resources management system to well;5秘密文件Strictly Confidential1.1.8提供乙方需要的客户数据统计、分析及相关数据库的建设和维护等咨询服务；providing Party B with compile and analysis of client data and consulting services of establishment and maintenance of data base;1.1.9提供乙方需要的软件和相关技术支持服务；providing software Party B requires and other technical support;1.1.10接受乙方委托，对乙方的手机视频技术研发和产业化推广业务经营进行指导和管理；guiding and management on Party B’s business of mobile video technology research and development and related industrial promotionoperation according to Party B’s commission;1.1.11当乙方业务规模发展或业务范围扩大需要时，购买乙方业务经营需要的设备；in the event of the demand of Party B’s development of business scale or broadening of businesses, purchase the equipments which itneeds for the operation of its business;1.1.12当乙方业务规模发展或业务范围扩大需要时，完成乙方项目中的全部或部分工作；in the event of the demand of Party B’s development of business scale or broadening of businesses, complete the work of Party B’sproject in whole or in party;6秘密文件Strictly Confidential1.1.13当乙方业务规模发展或业务范围扩大需要时，开发新技术；in the event of the demand of Party B’s development of business scale or broadening of businesses, develop new technology;1.1.14乙方委托甲方，且甲方接受委托提供的其他服务。other services Party B appoints Party A to provide and Party A agrees to provide.1.2乙方接受甲方的咨询和服务。乙方进一步同意，除非经甲方事先书面同意，在本协议期间，就本协议约定的服务或其他事宜，乙方不得直接或间接地从任何第三方获得任何与本协议相同或类似的咨询和/或服务，并不得与任何第三方就本协议所述事项建立任何类似的合作关系。双方同意，甲方可以指定其他方（该被指定方可以与乙方签署本协议第1.3条描述的某些协议）为乙方提供本协议约定的服务和/或支持。Party B agrees to accept all the consultations and services provided by Party A. Party B further agrees that unless with Party A's prior writtenconsent, during the term of this Agreement, Party B shall not directly or indirectly accept the same or any similar consultations and/or servicesprovided by any third party and shall not establish similar corporation relationship with any third party regarding the matters contemplated by thisAgreement. Party A may appoint other parties, who may enter into certain agreements described in Section 1.3 with Party B, to provide Party Bwith the consultations and/or services under this Agreement.7秘密文件Strictly Confidential1.3服务的提供方式Service Providing Methodology1.3.1双方同意在本协议有效期内，视情况而定，乙方可以与甲方或甲方指定的其他方进一步签订技术服务协议和/或咨询服务协议，对各项业务培训、技术服务、咨询服务的具体内容、方式、人员、收费等进行约定。Parties agree that during the term of this Agreement, where necessary, Party B may enter into further technical service agreements and/orconsulting service agreements with Party A or any other party designated by Party A, which shall provide the specific contents, manner,personnel, and fees for the specific technical services and consulting services.1.3.2为更好地履行本协议，双方同意，在甲方认为必要时，乙方应在本协议有效期内与甲方或甲方指定的其他方根据业务进展需要随时签署协议，由甲方或其指定方向乙方提供服务。To fulfill this Agreement, Parties agree that during the term of this Agreement, where Party A deems necessary, Party B shall enter intoagreements with Party A or any other party designated by Party A which shall set forth that Party A or any other party designated byParty A provide services to Party B based on the needs of the business of Party B.8秘密文件Strictly Confidential2.服务的价格和支付方式The Calculation and Payment of the Service Fees双方同意，就甲方提供的服务，乙方应向甲方支付服务费（“服务费”）。服务费不应低于乙方税后利润的80%。服务费应当按季支付；经甲方事先书面同意，服务费可以根据乙方的经营需要进行调整。Both Parties agree that, in consideration of the services provided by Party A, Party B shall pay Party A fees (the “Service Fees”), which shall not be lessthan 80% of Party B’s aftertax profits . The Service Fees shall be due and payable on a quarterly basis; upon the prior written consent by Party A, the rateof Service Fees may be adjusted pursuant to the operational needs of Party B.3.知识产权和保密条款Intellectual Property Rights and Confidentiality Clauses3.1在中国法律允许的范围内，甲方对履行本协议而产生或创造的任何权利、所有权、权益和所有知识产权包括但不限于著作权、专利权、专利申请权、软件、技术秘密、商业机密及其他均享有独占的和排他的权利和利益。乙方须签署所有适当的文件，采取所有适当的行动，递交所有的文件和/或申请，提供所有适当的协助，以及做出所有其他依据甲方的自行决定认为是必要的行为，以将任何对该等知识产权的所有权、权利和权益赋予甲方，和/或完善对甲方此等知识产权权利的保护。To the extent permitted under the PRC laws, Party A shall have exclusive and proprietary rights and interests in all rights, ownership, interests andintellectual properties arising out of or created during the performance of this Agreement, including but not limited to copyrights, patents, patentapplications, software, technical secrets, trade secrets and others. Party B shall execute all appropriate documents, take all appropriate actions,submit all filings and/or applications, render all appropriate assistance and otherwise conduct whatever is necessary deemed as by Party A in itssole discretion for the purposes of vesting any ownership, right or interest of any such intellectual property rights in Party A, and/or perfectingthe protections for any such intellectual property rights in Party A.9秘密文件Strictly Confidential3.2双方承认及确定有关本协议、本协议内容，以及彼此就准备或履行本协议而交换的任何口头或书面资料均被视为保密信息。双方应当对所有该等保密信息予以保密，而在未得到另一方书面同意前，不得向任何第三者披露任何保密信息，惟下列信息除外：(a)公众人士知悉或将会知悉的任何信息（惟并非由接受保密信息之一方擅自向公众披露）；(b)根据适用法律法规、股票交易规则、或政府部门或法院的命令而所需披露之任何信息；或(c)由任何一方就本协议所述交易而需向其股东、投资者、法律或财务顾问披露之信息，而该股东、法律或财务顾问亦需遵守与本条款相类似之保密责任。如任何一方工作人员或聘请机构的泄密均视为该方的泄密，需依本协议承担违约责任。无论本协议以任何理由终止，本条款仍然生效。The Parties acknowledge that the existence and the terms of this Agreement and any oral or written information exchanged between the Parties inconnection with the preparation and performance this Agreement are regarded as confidential information. Each Party shall maintainconfidentiality of all such confidential information, and without obtaining the written consent of the other Party, it shall not disclose any relevantconfidential information to any third parties, except for the information that: (a) is or will be in the public domain (other than through the receivingParty’s unauthorized disclosure); (b) is under the obligation to be disclosed pursuant to the applicable laws or regulations, rules of any stockexchange, or orders of the court or other government authorities; or (c) is required to be disclosed by any Party to its shareholders, investors,legal counsels or financial advisors regarding the transaction contemplated hereunder, provided that such shareholders, investors, legal counselsor financial advisors shall be bound by the confidentiality obligations similar to those set forth in this Section. Disclosure of any confidentialinformation by the staff members or agencies hired by any Party shall be deemed disclosure of such confidential information by such Party, whichParty shall be held liable for breach of this Agreement. This Section shall survive the termination of this Agreement for any reason.3.3双方同意，不论本协议是否变更、解除或终止，本条款将持续有效。The Parties agree that this Section shall survive changes to, and rescission or termination of, this Agreement.4.陈述和保证Representations and Warranties4.1甲方陈述和保证如下：Party A hereby represents and warrants as follows:4.1.1甲方是按照中国法律合法注册并有效存续的外商独资企业。Party A is a whollyforeignowned enterprise legally registered and validly existing in accordance with the laws of China.10秘密文件Strictly Confidential4.1.2甲方已采取必要的公司行为，获得必要的授权，并取得第三方和政府部门的同意及批准（若需）以签署和履行本协议；甲方对本协议的签署和履行并不违反法律法规的明确规定。Party A has taken all necessary corporate actions, obtained all necessary authorization and the consent and approval from third partiesand government agencies (if any) for the execution and performance of this Agreement. Party A’s execution and performance of thisAgreement do not violate any explicit requirements under any law or regulation binding on Party A.4.1.3本协议构成对其合法、有效、有约束力并依本协议之条款对其强制执行的义务。This Agreement constitutes Party A's legal, valid and binding obligations, enforceable in accordance with its terms.4.2乙方陈述和保证如下：Party B hereby represents and warrants as follows:4.2.1乙方是按照中国法律合法登记且有效存续的有限责任公司，乙方根据政府部门的批准和许可从事手机视频技术开发、内容制作和产业化市场推广的经营。Party B is a limited company legally registered and validly existing in accordance with the laws of China, engages in mobile videotechnology research, development, content creation, sale and related industrial promotion pursuant to governmental approvals andpermits;11秘密文件Strictly Confidential4.2.2乙方已采取必要的行为，获得必要的授权，并取得第三方和政府部门的同意及批准（若需）以签署和履行本协议；乙方对本协议的签署和履行并不违反法律法规的明确规定。Party B has taken all necessary actions, obtained all necessary authorization and the consent and approval from third parties andgovernment agencies (if any) for the execution and performance of this Agreement. Party B’s execution and performance of thisAgreement do not violate any explicit requirements under any law or regulation binding on Party B.4.2.3本协议构成对其合法、有效、有约束力并依本协议之条款对其强制执行的义务。This Agreement constitutes Party B's legal, valid and binding obligations, and shall be enforceable against it.5.生效和有效期Effectiveness and Term5.1本协议于文首标明的协议日期签署并同时生效。除非依本协议或双方其他协议的约定而提前终止，本协议有效期为20年，但甲、乙双方应自本协议签署后，每3个月对本协议的内容做一次审查，以决定是否需要根据当时的情况对本协议作出相应修改和补充。This Agreement is executed on the date first above written and shall take effect as of such date. Unless earlier terminated in accordance with theprovisions of this Agreement or relevant agreements separately executed between the Parties, the term of this Agreement shall be 20 years. Afterthe execution of this Agreement, both Parties shall review this Agreement every 3 months to determine whether to amend or supplement theprovisions in this Agreement based on the actual circumstances at that time.12秘密文件Strictly Confidential5.2协议期满前，经甲方书面确认，本协议可以延期。延期的期限由甲方决定，乙方必须无条件地同意该延期。The term of this Agreement may be extended if confirmed in writing by Party A prior to the expiration thereof. The extended term shall bedetermined by Party A, and Party B shall accept such extended term unconditionally.6.终止Termination6.1除非依据本协议续期，本协议于到期之日终止。Unless renewed in accordance with the relevant terms of this Agreement, this Agreement shall be terminated upon the date of expiration hereof.6.2本协议有效期内，除非甲方对乙方有重大过失或存在欺诈行为，乙方不得提前终止本协议。尽管如此，甲方可在任何时候通过提前30天向乙方发出书面通知的方式终止本协议。During the term of this Agreement, unless Party A commits gross negligence, or a fraudulent act, against Party B, Party B shall not terminate thisAgreement prior to its expiration date. Nevertheless, Party A shall have the right to terminate this Agreement upon giving 30 days' prior writtennotice to Party B at any time.6.3在本协议终止之后，双方在第3、7和8条项下的权利和义务将继续有效。The rights and obligations of the Parties under Articles 3, 7 and 8 shall survive the termination of this Agreement.13秘密文件Strictly Confidential7.适用法律和争议解决Governing Law and Resolution of Disputes7.1本协议的订立、效力、解释、履行、修改和终止以及争议的解决适用中国的法律。The execution, effectiveness, construction, performance, amendment and termination of this Agreement and the resolution of disputes hereundershall be governed by the laws of China.7.2因解释和履行本协议而发生的任何争议，本协议双方应首先通过友好协商的方式加以解决。如果在一方向其他方发出要求协商解决的书面通知后30天之内争议仍然得不到解决，则任何一方均可将有关争议提交给中国国际经济贸易仲裁委员会，由该会按照其仲裁规则仲裁解决。仲裁应在北京进行，使用之语言为中文。仲裁裁决是终局性的，对各方均有约束力。In the event of any dispute with respect to the construction and performance of this Agreement, the Parties shall first resolve the dispute throughfriendly negotiations. In the event the Parties fail to reach an agreement on the dispute within 30 days after either Party's request to the otherParties for resolution of the dispute through negotiations, either Party may submit the relevant dispute to the China International Economic andTrade Arbitration Commission for arbitration, in accordance with its Arbitration Rules. The arbitration shall be conducted in Beijing, and thelanguage used in arbitration shall be Chinese. The arbitration award shall be final and binding on all Parties.14秘密文件Strictly Confidential7.3因解释和履行本协议而发生任何争议或任何争议正在进行仲裁时，除争议的事项外，本协议双方仍应继续行使各自在本协议项下的其他权利并履行各自在本协议项下的其他义务。Upon the occurrence of any disputes arising from the construction and performance of this Agreement or during the pending arbitration of anydispute, except for the matters under dispute, the Parties to this Agreement shall continue to exercise their respective rights under this Agreementand perform their respective obligations under this Agreement.8.补偿Indemnification就甲方根据本协议向乙方提供的咨询和服务内容所产生或引起的针对甲方的诉讼、请求或其他要求而招致的任何损失、损害、责任或费用都应由乙方补偿给甲方，以使甲方不受损害，除非该损失、损害、责任或费用是因甲方的重大过失或故意而产生的。Party B shall indemnify and hold harmless Party A from any losses, injuries, obligations or expenses caused by any lawsuit, claims or other demandsagainst Party A arising from or caused by the consultations and services provided by Party A to Party B pursuant this Agreement, except where suchlosses, injuries, obligations or expenses arise from the gross negligence or willful misconduct of Party A.15秘密文件Strictly Confidential9.通知Notices9.1本协议项下要求或发出的所有通知和其他通信应通过专人递送、挂号邮寄、邮资预付或快递服务或传真的方式发到该方下列地址。每一通知还应再以电子邮件送达。该等通知视为有效送达的日期按如下方式确定：All notices and other communications required or permitted to be given pursuant to this Agreement shall be delivered personally or sent byregistered mail, postage prepaid, by a courier service or by facsimile transmission to the address of such Party set forth below. A confirmationcopy of each notice shall also be sent by email. The dates on which notices shall be deemed to have been effectively given shall be determined asfollows:9.1.1通知如果是以专人递送、快递服务或挂号邮寄、邮资预付发出的，则以于设定为通知的地址在接收或拒收之日为有效送达日。Notices given by personal delivery, by courier service or by registered mail, postage prepaid, shall be deemed effectively given on thedate of receipt or refusal at the address specified for notices.9.1.2通知如果是以传真发出的，则以成功传送之日为有效送达日（应以自动生成的传送确认信息为证）。Notices given by facsimile transmission shall be deemed effectively given on the date of successful transmission (as evidenced by anautomatically generated confirmation of transmission).16秘密文件Strictly Confidential9.2为通知的目的，双方地址如下：For the purpose of notices, the addresses of the Parties are as follows:甲方：中传天下信息科技（深圳）有限公司Party A: Zhongchuan Tianxia Information Technology (Shenzhen) Co., Ltd.地址：深圳市南山区高新中三道2号深圳软件园一期五栋401AAddress:401A, Building 5, Phase 1, Shenzhen Software Park, No.2 Gaoxin Zhongsan Road, Nanshan District, Shenzhen收件人：洪婷Attn: Hong Ting乙方：北京中传视讯科技有限公司Party B: Beijing Mobile Vision Technology Co., Ltd地址：北京市朝阳区光华路9号SOHO3QLAB32Address: LAB32, SOHO3Q, No 9, Guanghua Road, Chaoyang District, Beijing.收件人：宋雪松Attn.: Song Xuesong9.3任何一方可按本条规定随时给另一方发出通知来改变其接收通知的地址。Any Party may at any time change its address for notices by a notice delivered to the other Party in accordance with the terms hereof.17秘密文件Strictly Confidential10.协议的转让Assignment10.1乙方不得将其在本协议项下的权利与义务转让给第三方，除非事先征得甲方的书面同意。Without Party A's prior written consent, Party B shall not assign its rights and obligations under this Agreement to any third party.10.2乙方在此同意，甲方可以在其需要时向其他第三方转让其在本协议项下的权利和义务，并在该等转让发生时甲方仅需向乙方发出书面通知，并且无需再就该等转让征得乙方的同意。Party B agrees that Party A may assign its obligations and rights under this Agreement to any third party upon a prior written notice to Party Bbut without the consent of Party B.11.协议的分割性Severability如果本协议有任何一条或多条规定根据任何法律或法规在任何方面被裁定为无效、不合法或不可执行，本协议其余规定的有效性、合法性或可执行性不应因此在任何方面受到影响或损害。双方应通过诚意磋商，争取以法律许可以及双方期望的最大限度内有效的规定取代那些无效、不合法或不可执行的规定，而该等有效的规定所产生的经济效果应尽可能与那些无效、不合法或不能强制执行的规定所产生的经济效果相似。In the event that one or several of the provisions of this Agreement are found to be invalid, illegal or unenforceable in any aspect in accordance with anylaws or regulations, the validity, legality or enforceability of the remaining provisions of this Agreement shall not be affected or compromised in any aspect.The Parties shall strive in good faith to replace such invalid, illegal or unenforceable provisions with effective provisions that accomplish to the greatestextent permitted by law and the intentions of the Parties, and the economic effect of such effective provisions shall be as close as possible to the economiceffect of those invalid, illegal or unenforceable provisions.18秘密文件Strictly Confidential12.协议的修改、补充Amendments and Supplements双方可以书面协议方式对本协议作出修改和补充。经过双方签署的有关本协议的修改协议和补充协议是本协议组成部分，具有与本协议同等的法律效力。Any amendments and supplements to this Agreement shall be in writing. The amendment agreements and supplementary agreements that have beensigned by the Parties and that relate to this Agreement shall be an integral part of this Agreement and shall have the same legal validity as this Agreement.13.语言和副本Language and Counterparts本协议以中文和英文书就，一式二份，甲乙双方各持一份，具有同等效力；中英文版本如有冲突，应以中文版为准。This Agreement is written in both Chinese and English language in two copies, each Party having one copy with equal legal validity; in case there is anyconflict between the Chinese version and the English version, the Chinese version shall prevail.本页其余部分刻意留为空白The Remainder of this page is intentionally left blank19秘密文件Strictly Confidential有鉴于此，双方已使得经其授权的代表于文首所述日期签署了本独家业务合作协议并即生效，以昭信守。IN WITNESS WHEREOF, the Parties have caused their authorized representatives to execute this Exclusive Business Cooperation Agreement as of thedate first above written.甲方：中传天下信息科技（深圳）有限公司（盖章）Party A: Zhongchuan Tianxia Information Technology (Shenzhen) Co., Ltd.(Seal)签字：By: /s/ Hong Ting 姓名：洪婷Name: Hong Ting职务：总经理Title: General Manager20秘密文件Strictly Confidential有鉴于此，双方已使得经其授权的代表于文首所述日期签署了本独家业务合作协议并即生效，以昭信守。IN WITNESS WHEREOF, the Parties have caused their authorized representatives to execute this Exclusive Business Cooperation Agreement as of thedate first above written. 乙方：北京中传视讯科技有限公司（盖章）Party B: Beijing Mobile Vision Technology Co., Ltd. (Seal)签字：By: /s/ Song Xuesong 姓名：宋雪松Name: Song Xuesong职务：董事长Title: Chairman of the Board21秘密文件Strictly ConfidentialEX4.16 4 f20f2017ex416_luokung.htm EXCLUSIVE OPTION AGREEMENT BY AND AMONG ZHONGCHUAN TIANXIA INFORMATION TECHNOLOGY(SHENZHEN) CO., LTD., XUESONG SONG, WEILI CHEN, PING WANG, DONGLAI LIU, AND BEIJING MOBILE VISION TECHNOLOGY CO., LTD., DATEDAUGUST 31, 2015Exhibit 4.16独家购买权协议Exclusive Option Agreement本独家购买权协议 (下称“本协议”) 由以下各方于年月日在中华人民共和国（下称“中国”）北京签订：This Exclusive Option Agreement (this “Agreement”) is executed by and among the Parties below as of in Beijing, the People’s Republic of China (the“China” or “PRC”):甲方：中传天下信息科技（深圳）有限公司，一家依照中国法律设立和存在的外商独资企业，地址为深圳市南山区高新中三道2号深圳软件园一期五栋401A；Party A:Zhongchuan Tianxia Information Technology (Shenzhen) Co., Ltd., a whollyforeignowned enterprise organized and existing under the laws of China,with its address at 401A, Building 5, Phase 1, Shenzhen Software Park, No.2 Gaoxin Zhongsan Road, Nanshan District, Shenzhen.乙方：Party B:a)宋雪松Song Xuesong身份证号码:120112196809040417ID Card No.:120112196809040417住所：天津市河西区广东路中裕园33702Address:Zhongyu Yuan 33702, Guangdong Road, Hexi District, Tianjinb)陈蔚力Chen Weili身份证号码:120106197309240516ID Card No.:120106197309240516住所：广东省深圳市宝安区宝城上川路15号Address:Baocheng Shangchuan Road 15, Baoan District, Shenzhen, Guangdong1秘密文件Strictly Confidentialc)王平Wang Ping身份证号码:35020319691030401xID Card No.:35020319691030401x住所：广东省深圳市南山区高新南环路36号彩虹之岸12栋4AAddress:Caihong Zhi’an Building No.12 Suite 4A, Gaoxin Nanhuan Road 36, Nanshan District, Shenzhen, Guangdongd)刘东来Liu Donglai身份证号码:120107196810103912ID Card No.:120107196810103912住所：天津市和平区南京路诚基经贸中心1号楼2门1702号Address:No 1702, Door 2, Build 1, Chengji Economic and Trade Centre, Nanjing Road, Heping District, Tianjin.丙方：北京中传视讯科技有限公司，一家依照中国法律设立和存在的有限责任公司，地址为北京市朝阳区光华路9号SOHO3QLAB32，统一社会信用代码为9111010576215249XM；Party C:Beijing Mobile Vision Technology Co., Ltd., a limited company duly registered in China, with its address at LAB32, SOHO3Q, No 9, Guanghua Road,Chaoyang District, Beijing and its uniform social credit code of 9111010576215249XM.2秘密文件Strictly Confidential在本协议中，甲方、乙方和丙方以下各称“一方”，合称“各方”。In this Agreement, each of Party A, Party B and Party C shall be referred to as a “Party” respectively, and they shall be collectively referred to as the“Parties”.鉴于，乙方系丙方股东并合计持有丙方100%股权，乙方将按本协议之条款授予甲方购买全部或部分该股权的权利。Whereas, Party B are the shareholders of Party C and jointly hold 100% of the equity interest in Party C, and Party B are willing to grant to Party A the rightto acquire such equity interest, in whole or in part, on the terms herein.现各方协商一致，达成如下协议：Now therefore, upon mutual discussion and negotiation, the Parties have reached the following agreement:1.股权买卖Sale and Purchase of Equity Interest1.1授予权利Option Granted乙方在此不可撤销地授予甲方在中国法律允许的前提下，按照甲方自行决定的行使步骤，并按照本协议第1.3条所述的价格，随时一次或多次从乙方购买或指定一人或多人(“被指定人”)从乙方购买其目前和将来所持有的丙方的全部或部分股权（无论乙方出资额和/或持股比例将来是否发生变化）的一项不可撤销的专有权(“股权购买权”)。除甲方和被指定人外，任何第三人均不得享有股权购买权或其他与乙方股权有关的权利。丙方特此同意乙方向甲方授予股权购买权。本款及本协议所规定的“人”指个人、公司、合营企业、合伙、企业、信托或非公司组织。Party B hereby irrevocably grant Party A an irrevocable and exclusive right to purchase, or designate one or more persons (each, a “Designee”) topurchase the equity interests in Party C now and in the future held by Party B (regardless whether Party B’s capital contribution amount and/orpercentage of shareholding will be changed in the future) once or at multiple times at any time in part or in whole at Party A’s sole and absolutediscretion to the extent permitted by Chinese laws and at the price described in Section 1.3 herein (such right being the “Equity Interest PurchaseOption”). Except for Party A and the Designee(s), no other person shall be entitled to the Equity Interest Purchase Option or other rights withrespect to the equity interests of Party B. Party C hereby agrees to the grant by Party B of the Equity Interest Purchase Option to Party A. Theterm “person” as used herein shall refer to individuals, corporations, partnerships, partners, enterprises, trusts or noncorporate organizations.3秘密文件Strictly Confidential1.2行使步骤Steps for Exercise of Equity Interest Purchase Option甲方行使其股权购买权以符合中国法律和法规的规定为前提。甲方行使股权购买权时，应向乙方发出书面通知(“股权购买通知”)，股权购买通知应载明以下事项：(a)甲方关于行使股权购买权的决定；(b)甲方拟从乙方购买的股权份额(“被购买的股权”)；和(c)被购买的股权的买入日期。Subject to the provisions of the laws and regulations of China, Party A may exercise the Equity Interest Purchase Option by issuing a writtennotice to Party B (the “Equity Interest Purchase Option Notice”), specifying: (a) Party A’s decision to exercise the Equity Interest PurchaseOption; (b) the portion of equity interests to be purchased from Party B (the “Optioned Interests”); and (c) the date for purchasing the OptionedInterests.1.3股权买价Equity Interest Purchase Price被购买的股权的买价（“股权买价”）应是行权当时中国法律允许的最低价格。乙方收到该股权对价后，应当提供给丙方与该股权买价相同金额的借款，该借款的期限为20年，且为无息。乙方应当在该借款期限届满时就该借款放弃对丙方的债权。The purchase price of the Optioned Interests (the “Equity Interest Purchase Price”) shall be the lowest price permitted by the laws of China. Afterreceiving the Equity Interest Purchase Price, Party B shall make an interestfree loan equivalent to the amount of Equity Interest Purchase Price toParty C, of which term is 20 years. Each member of Party B shall give up his(her) creditor’s right when the loan term expires.4秘密文件Strictly Confidential1.4转让被购买股权Transfer of Optioned Interests甲方每次行使股权购买权时：For each exercise of the Equity Interest Purchase Option:1.4.1乙方应责成丙方及时召开股东会会议，在该会议上，应通过批准乙方向甲方和/或被指定人转让被购买的股权的决议；Party B shall cause Party C to promptly convene a shareholders meeting, at which a resolution shall be adopted approving Party B’stransfer of the Optioned Interests to Party A and/or the Designee(s);1.4.2乙方应就其向甲方和/或被指定人转让被购买股权取得丙方其他股东同意该转让并放弃优先购买权的书面声明。Party B shall obtain written statements from the other shareholder of Party C giving consent to the transfer of the equity interest to PartyA and/or the Designee(s) and waiving any right of first refusal related thereto.1.4.3乙方应与甲方和/或(在适用的情况下)被指定人按照本协议及股权购买通知的规定，为每次转让签订股权转让协议；Party B shall execute a share transfer contract with respect to each transfer with Party A and/or each Designee (whichever is applicable),in accordance with the provisions of this Agreement and the Equity Interest Purchase Option Notice regarding the Optioned Interests;5秘密文件Strictly Confidential1.4.4有关方应签署所有其他所需协议、协议或文件，取得全部所需的政府批准和同意，并采取所有所需行动，在不附带任何担保权益的情况下，将被购买的股权的有效所有权转移给甲方和/或被指定人并使甲方和/或被指定人成为被购买的股权的登记在册所有人。为本款及本协议的目的，“担保权益”包括担保、抵押、第三方权利或权益，任何购股权、收购权、优先购买权、抵销权、所有权扣留或其他担保安排等；但为了明确起见，不包括在本协议、乙方股权质押协议项下产生的任何担保权益。本款及本协议所规定的“乙方股权质押协议”指甲方、乙方和丙方于本协议签署之日签订的股权质押协议，根据股权质押协议，乙方为担保丙方能履行丙方与甲方签订的独家业务合作协议项下的义务，而向甲方质押其在丙方的全部乙方股权。The relevant Parties shall execute all other necessary contracts, agreements or documents, obtain all necessary government licenses andpermits and take all necessary actions to transfer valid ownership of the Optioned Interests to Party A and/or the Designee(s),unencumbered by any security interests, and cause Party A and/or the Designee(s) to become the registered owner(s) of the OptionedInterests. For the purpose of this Section and this Agreement, “security interests” shall include securities, mortgages, third party’s rightsor interests, any stock options, acquisition right, right of first refusal, right to offset, ownership retention or other security arrangements,but shall be deemed to exclude any security interest created by this Agreement and Party B’s Equity Interest Pledge Agreement. “PartyB’s Equity Interest Pledge Agreement” as used in this Section and this Agreement shall refer to the Equity Interest Pledge Agreementexecuted by and among Party A, Party B and Party C on the date of this Agreement, whereby Party B pledge all of their equity interests inParty C to Party A, in order to guarantee Party C’s performance of its obligations under the Exclusive Business Corporation Agreementexecuted by and between Party C and Party A.6秘密文件Strictly Confidential2.知识产权独家购买权Exclusive Option regarding the Intellectual Property Rights2.1本协议签订之日起，若乙方拟转让、出售或以其他方式处置（任一处置方式以下简称“转让”）其拥有或持有的全部或部分知识产权（以下称“知识产权”，定义见第2.4条），甲方有权独家购买该等知识产权。From the date hereof, if Party B proposes to transfer, sell or dispose of (each, a “transfer”) all or any part of the intellectual property rights ownedor held by Party B (“IPR”), Party A shall have exclusive option.2.2若乙方有意转让全部或部分知识产权，应事先向甲方发出书面通知(“转让通知”)，转让通知应载明以下事项：(a) 乙方关于转让知识产权的意向；(b) 乙方拟转让的知识产权清单(“拟转让知识产权”)及转让的价格和其他条件。转让通知视为乙方向甲方发出的一份要约，按照该要约，乙方同意按转让通知中指定的价格条件向甲方转让全部或部分拟转让知识产权。Prior to Party B proposes to transfer all or any part of its IPR, Party B shall give Party A a written notice (“Transfer Notice”), which shall specify (a)Party B’s intention to make the transfer; (b) the list of IPR to be transferred (“Offered IPR”) and the consideration and other conditions uponwhich the transfer is to be made. The Transfer Notice constitutes Party B’s offer given to Party A, pursuant to which, Party B agrees to transfer allor any part of its Offered IPR to Party A based on the same conditions described in the Transfer Notice.7秘密文件Strictly Confidential2.3甲方收到转让通知后，有权在30日内选择按照转让通知中列明的转让价格和条件购买拟转让知识产权。如果甲方行使其独家购买权，双方应于甲方收到转让通知后45日内签订有关的知识产权转让协议，乙方应办理法律规定的知识产权转让的批准和登记手续。Party A shall have an option for a period of 30 days from Party A’s receipt of the Transfer Notice to elect to purchase the Offered IPR at the sameprice and subject to the same conditions as described in the Transfer Notice. If Party A decides to exercise its exclusive option, the parties shallenter into relevant IPR transfer agreement within 45 days upon Party A’s receipt of the Transfer Notice and Party B is responsible to complete allrelated approvals and registrations formalities as prescribed by the PRC law.2.4本协议第2条所称“知识产权”指任何知识产权，包括但不限于著作权、专利权、专利申请权、商标、域名、软件、专有技术，并包括前述知识产权申请权利以及登记注册的权利，以及其他所有与前述知识产权有关的权利和权益。The “IPR” referred to in this Article 2 means any intellectual property rights, including, without limitations, copyrights, patents, patentapplications, trademarks, domain names, software and knowhow together with (a) all rights to apply for or register any of the foregoing and (b) allother rights and interests to any of the foregoing.8秘密文件Strictly Confidential3.承诺Covenants3.1有关丙方的承诺Covenants regarding Party C乙方（作为丙方的股东）和丙方在此承诺：Party B (as the shareholders of Party C) and Party C hereby covenant as follows:3.1.1未经甲方的事先书面同意，不以任何形式补充、更改或修改丙方公司章程文件，增加或减少其注册资本，或以其他方式改变其注册资本结构；Without the prior written consent of Party A, they shall not in any manner supplement, change or amend the articles of association andbylaws of Party C, increase or decrease its registered capital, or change its structure of registered capital in other manners;3.1.2按照良好的财务和商业标准及惯例，保持其公司的存续，审慎地及有效地经营其业务和处理事务；They shall maintain Party C’s corporate existence in accordance with good financial and business standards and practices by prudentlyand effectively operating its business and handling its affairs;3.1.3未经甲方的事先书面同意，不在本协议签署之日起的任何时间出售、转让、抵押或以其他方式处置丙方的任何资产、业务或收入的合法或受益权益，或允许在其上设置任何其他担保权益；Without the prior written consent of Party A, they shall not at any time following the date hereof, sell, transfer, mortgage or dispose of inany manner any assets of Party C or legal or beneficial interest in the business or revenues of Party C, or allow the encumbrance thereonof any security interest;3.1.4未经甲方的事先书面同意，不发生、继承、保证或容许存在任何债务，但(i)正常或日常业务过程中产生而不是通过借款方式产生的债务；和(ii)已向甲方披露和得到甲方书面同意的债务除外；Without the prior written consent of Party A, they shall not incur, inherit, guarantee or suffer the existence of any debt, except for (i)debts incurred in the ordinary course of business other than through loans; and (ii) debts disclosed to Party A for which Party A’swritten consent has been obtained;9秘密文件Strictly Confidential3.1.5一直在正常业务过程中经营所有业务，以保持丙方的资产价值，不进行任何足以影响其经营状况和资产价值的作为/不作为；They shall always operate all of Party C’s businesses during the ordinary course of business to maintain the asset value of Party C andrefrain from any action/omission that may affect Party C’s operating status and asset value;3.1.6未经甲方的事先书面同意，不得让丙方签订任何重大协议，但在正常业务过程中签订的协议除外(就本段而言，如果一份协议的价值超过【人民币10万元】，即被视为重大协议)；Without the prior written consent of Party A, they shall not cause Party C to execute any major contract, except the contracts in theordinary course of business (for purpose of this subsection, a contract with a value exceeding RMB 100,000 shall be deemed a majorcontract);3.1.7未经甲方的事先书面同意，丙方不得向任何人提供贷款或信贷；Without the prior written consent of Party A, they shall not cause Party C to provide any person with any loan or credit;3.1.8应甲方要求，向其提供所有关于丙方的营运和财务状况的资料；They shall provide Party A with information on Party C’s business operations and financial condition at Party A’s request;10秘密文件Strictly Confidential3.1.9如甲方提出要求，丙方应从甲方接受的保险公司处购买和持有有关其资产和业务的保险，该保险的金额和险种应与经营类似业务的公司一致；If requested by Party A, they shall procure and maintain insurance in respect of Party C’s assets and business from an insurance carrieracceptable to Party A, at an amount and type of coverage typical for companies that operate similar businesses;3.1.10未经甲方的事先书面同意，丙方不得与任何人合并或联合，或对任何人进行收购或投资；Without the prior written consent of Party A, they shall not cause or permit Party C to merge, consolidate with, acquire or invest in anyperson;3.1.11将发生的或可能发生的与丙方资产、业务或收入有关的诉讼、仲裁或行政程序立即通知甲方；They shall immediately notify Party A of the occurrence or possible occurrence of any litigation, arbitration or administrative proceedingsrelating to Party C’s assets, business or revenue;3.1.12为保持丙方对其全部资产的所有权，签署所有必要或适当的文件，采取所有必要或适当的行动和提出所有必要或适当的控告或对所有索偿进行必要和适当的抗辩；To maintain the ownership by Party C of all of its assets, they shall execute all necessary or appropriate documents, take all necessary orappropriate actions and file all necessary or appropriate complaints or raise necessary and appropriate defenses against all claims;11秘密文件Strictly Confidential3.1.13未经甲方事先书面同意，不得以任何形式派发股息予各股东，但一经甲方要求，丙方应立即将其所有可分配利润全部立即分配给其各股东；及Without the prior written consent of Party A, they shall ensure that Party C shall not in any manner distribute dividends to itsshareholders, provided that upon Party A’s written request, Party C shall immediately distribute all distributable profits to itsshareholders; and3.1.14根据甲方的要求，委任由其指定的任何人士出任丙方的董事和/或执行董事。At the request of Party A, they shall appoint any persons designated by Party A as the director and/or executive director of Party C.3.2乙方和丙方的承诺Covenants of Party B and Party C乙方承诺：Party B hereby covenant as follows:3.2.1未经甲方的事先书面同意，不出售、转让、抵押或以其他方式处置其拥有的丙方的股权的合法或受益权益，或允许在其上设置任何其他担保权益，但根据乙方签署的《股权质押协议》在该股权上设置的质押则除外；Without the prior written consent of Party A, Party B shall not sell, transfer, mortgage or dispose of in any other manner any legal orbeneficial interest in the equity interests in Party C held by Party B, or allow the encumbrance thereon of any security interest, except forthe pledge placed on these equity interests in accordance with Party B’s Equity Interest Pledge Agreement;12秘密文件Strictly Confidential3.2.2促使丙方股东会和/或执行董事不批准在未经甲方的事先书面同意的情况下，出售、转让、抵押或以其他方式处置任何乙方持有之丙方的股权的合法权益或受益权，或允许在其上设置任何其他担保权益，但批准根据乙方签署的《股权质押协议》在乙方股权上设置的质押则除外；Party B shall cause the shareholders’ meeting and/or the executive director of Party C not to approve the sale, transfer, mortgage ordisposition in any other manner of any legal or beneficial interest in the equity interests in Party C held by Party B, or allow theencumbrance thereon of any security interest, without the prior written consent of Party A, except for the pledge placed on these equityinterests in accordance with Party B’s Equity Interest Pledge Agreement;3.2.3未经甲方的事先书面同意的情况下，对于丙方与任何人合并或联合，或对任何人进行收购或投资，乙方将促成丙方股东会或执行董事不予批准；Party B shall cause the shareholders’ meeting or the executive director of Party C not to approve the merger or consolidation with anyperson, or the acquisition of or investment in any person, without the prior written consent of Party A;3.2.4将发生的或可能发生的任何关于其所拥有的股权的诉讼、仲裁或行政程序立即通知甲方；Party B shall immediately notify Party A of the occurrence or possible occurrence of any litigation, arbitration or administrativeproceedings relating to the equity interests in Party C held by Party B;13秘密文件Strictly Confidential3.2.5促使丙方股东会或执行董事表决赞成本协议规定的被购买的股权的转让并应甲方之要求采取其他任何行动；Party B shall cause the shareholders’ meeting or the executive director of Party C to vote their approval of the transfer of the OptionedInterests as set forth in this Agreement and to take any and all other actions that may be requested by Party A;3.2.6为保持其对股权的所有权，签署所有必要或适当的文件，采取所有必要或适当的行动和提出所有必要或适当的控告或对所有索偿进行必要和适当的抗辩；To the extent necessary to maintain Party B’s ownership in Party C, Party B shall execute all necessary or appropriate documents, take allnecessary or appropriate actions and file all necessary or appropriate complaints or raise necessary and appropriate defenses against allclaims;3.2.7应甲方的要求，委任由其指定的任何人士出任丙方的董事和/或执行董事；Party B shall appoint any designee of Party A as the director and/or executive director of Party C, at the request of Party A;3.2.8经甲方随时要求，应向其指定的代表在任何时间无条件地根据本协议的股权购买权立即转让其股权，并放弃其对其他现有股东进行上述股权转让所享有的优先购买权（如有的话）；和At the request of Party A at any time, Party B shall promptly and unconditionally transfer its equity interests in Party C to Party A’sDesignee(s) in accordance with the Equity Interest Purchase Option under this Agreement, and Party B hereby waives its right of firstrefusal (if any) to the share transfer by the other existing shareholder of Party C (if any); and14秘密文件Strictly Confidential3.2.9严格遵守本协议及各方共同或分别签订的其他协议的各项规定，切实履行该等协议项下的各项义务，并不进行任何足以影响该等协议的有效性和可执行性的作为/不作为。如果乙方对于本协议项下或乙方股权质押协议下或对甲方的授权委托书中的股权，还留存有任何权利，除非甲方书面指示，否则乙方仍不得行使该权利。Party B shall strictly abide by the provisions of this Agreement and other contracts jointly or separately executed by and among Party B,Party C and Party A, perform the obligations hereunder and thereunder, and refrain from any action/omission that may affect theeffectiveness and enforceability thereof. To the extent that Party B has any remaining rights with respect to the equity interests subject tothis Agreement hereunder or under Party B’s Equity Interest Pledge Agreement or under the Power of Attorney granted in favor of PartyA, Party B shall not exercise such rights except in accordance with the written instructions of Party A.4.陈述和保证Representations and Warranties乙方和丙方特此在本协议签署之日和每一个转让日向甲方共同及分别陈述和保证如下：Party B and Party C hereby represent and warrant to Party A, jointly and severally, as of the date of this Agreement and each date of transfer of theOptioned Interests, that:4.1其具有签订和交付本协议和其为一方的、根据本协议为每一次转让被购买的股权而签订的任何股权转让协议(各称为"转让协议")，并履行其在本协议和任何转让协议项下的义务的权力和能力。乙方和丙方同意在甲方行使购买权时，他们将签署与本协议条款一致的转让协议。本协议和其是一方的各转让协议一旦签署后，构成或将对其构成合法、有效及具有约束力的义务并可按照其条款对其强制执行；They have the authority to execute and deliver this Agreement and any share transfer contracts to which they are a party concerning theOptioned Interests to be transferred thereunder (each, a “Transfer Contracts”), and to perform their obligations under this Agreement and anyTransfer Contracts. Party B and Party C agree to enter into Transfer Contracts consistent with the terms of this Agreement upon Party A’s exerciseof the Equity Interest Purchase Option. This Agreement and the Transfer Contracts to which they are a party constitute or will constitute theirlegal, valid and binding obligations and shall be enforceable against them in accordance with the provisions thereof;15秘密文件Strictly Confidential4.2无论是本协议或任何转让协议的签署和交付还是其在本协议或任何转让协议项下的义务的履行均不会：(i)导致违反任何有关的中国法律；(ii)与丙方章程或其他组织文件相抵触；(iii)导致违反其是一方或对其有约束力的任何协议或文件，或构成其是一方或对其有约束力的任何协议或文件项下的违约；(iv)导致违反有关向任何一方颁发的任何许可或批准的授予和(或)继续有效的任何条件；或(v)导致向任何一方颁发的任何许可或批准中止或被撤销或附加条件；The execution and delivery of this Agreement or any Transfer Contracts and the obligations under this Agreement or any Transfer Contracts shallnot: (i) cause any violation of any applicable laws of China; (ii) be inconsistent with the articles of association, bylaws or other organizationaldocuments of Party C; (iii) cause the violation of any contracts or instruments to which they are a party or which are binding on them, orconstitute any breach under any contracts or instruments to which they are a party or which are binding on them; (iv) cause any violation of anycondition for the grant and/or continued effectiveness of any licenses or permits issued to either of them; or (v) cause the suspension orrevocation of or imposition of additional conditions to any licenses or permits issued to either of them;4.3乙方对其在丙方拥有的股权拥有良好和可出售的所有权，除乙方签署的《股权质押协议》外，乙方在上述股权上没有设置任何担保权益；Party B have a good and merchantable title to the equity interests in Party C they hold. Except for Party B’s Equity Interest Pledge Agreement,Party B have not placed any security interest on such equity interests;16秘密文件Strictly Confidential4.4目前没有悬而未决的或构成威胁的与丙方的股权、丙方资产有关的或与丙方有关的诉讼、仲裁或行政程序。There are no pending or threatened litigation, arbitration or administrative proceedings relating to the equity interests in Party C, assets of Party Cor Party C.5.生效日Effective Date5.1本协议于各方签署本协议之日生效，有效期10年，经甲方选择可再延长10年。This Agreement shall become effective upon the date hereof, and remain effective for a term of 10 years, and may be renewed for an additional 10years at Party A’s election.5.2若丙方股东发生变化，由新股东签署此协议，在此协议签署之日，原协议自动视为无效。In the event of a change in the shareholders of Party C, the new shareholder should sign this agreement and the original agreement willautomatically be deemed invalid on the date of signing of this agreement.17秘密文件Strictly Confidential6.适用法律与争议解决Governing Law and Resolution of Disputes6.1适用法律Governing law本协议的订立、效力、解释、履行、修改和终止以及争议解决均适用中国正式公布并可公开得到的法律。对中国正式公布并可公开得到的法律没有规定的事项，将适用国际法律原则和惯例。The execution, effectiveness, construction, performance, amendment and termination of this Agreement and the resolution of disputes hereundershall be governed by the formally published and publicly available laws of China. Matters not covered by formally published and publiclyavailable laws of China shall be governed by international legal principles and practices.6.2争议的解决方法Methods of Resolution of Disputes因解释和履行本协议而发生的任何争议，本协议各方应首先通过友好协商的方式加以解决。如果在一方向其他方发出要求协商解决的书面通知后30天之内争议仍然得不到解决，则任何一方均可将有关争议提交给中国国际经济贸易仲裁委员会，由该会按照其届时有效的仲裁规则仲裁解决。仲裁应在北京进行，使用之语言为中文。仲裁裁决是终局性的，对各方均有约束力。In the event of any dispute with respect to the construction and performance of this Agreement, the Parties shall first resolve the dispute throughfriendly negotiations. In the event the Parties fail to reach an agreement on the dispute within 30 days after either Party’s request to the otherParties for resolution of the dispute through negotiations, either Party may submit the relevant dispute to the China International Economic andTrade Arbitration Commission for arbitration, in accordance with its then effective arbitration rules. The arbitration shall be conducted in Beijing,and the language used in arbitration shall be Chinese. The arbitration award shall be final and binding on all Parties.18秘密文件Strictly Confidential7.税款、费用Taxes and Fees每一方应承担根据中国法律因准备和签署本协议和各转让协议以及完成本协议和各转让协议拟定的交易而由该方发生的或对其征收的任何和全部的转让和注册的税、花费和费用。Each Party shall pay any and all transfer and registration tax, expenses and fees incurred thereby or levied thereon in accordance with the laws of China inconnection with the preparation and execution of this Agreement and the Transfer Contracts, as well as the consummation of the transactionscontemplated under this Agreement and the Transfer Contracts.8.通知Notices8.1本协议项下要求或发出的所有通知和其他通信应通过专人递送、挂号邮寄、邮资预付或商业快递服务或传真的方式发到该方下列地址。每一通知还应再以电子邮件送达。该等通知视为有效送达的日期按如下方式确定：All notices and other communications required or permitted to be given pursuant to this Agreement shall be delivered personally or sent byregistered mail, postage prepaid, by a commercial courier service or by facsimile transmission to the address of such Party set forth below. Aconfirmation copy of each notice shall also be sent by email. The dates on which notices shall be deemed to have been effectively given shall bedetermined as follows:8.1.1通知如果是以专人递送、快递服务或挂号邮寄、邮资预付发出的，则以于设定为通知的地址在接收或拒收之日为有效送达日。Notices given by personal delivery, by courier service or by registered mail, postage prepaid, shall be deemed effectively given on thedate of receipt or refusal at the address specified for notices.19秘密文件Strictly Confidential8.1.2通知如果是以传真发出的，则以成功传送之日为有效送达日（应以自动生成的传送确认信息为证）。Notices given by facsimile transmission shall be deemed effectively given on the date of successful transmission (as evidenced by anautomatically generated confirmation of transmission).8.2为通知的目的，各方地址如下：For the purpose of notices, the addresses of the Parties are as follows:甲方：中传天下信息科技（深圳）有限公司Party A:Zhongchuan Tianxia Information Technology (Shenzhen) Co., Ltd.地址：深圳市南山区高新中三道2号深圳软件园一期五栋401AAddress:401A, Building 5, Phase 1, Shenzhen Software Park, No.2 Gaoxin Zhongsan Road, Nanshan District, Shenzhen.收件人：洪婷Attn:Hong Ting乙方：Party B: 宋雪松Song Xuesong住所：天津市河西区广东路中裕园33702Address:Zhongyu Yuan 33702, Guangdong Road, Hexi District, Tianjin20秘密文件Strictly Confidential陈蔚力Chen Weili住所：广东省深圳市宝安区宝城上川路15号Address:Baocheng Shangchuan Road 15, Baoan District, Shenzhen, Guangdong王平Wang Ping住所：广东省深圳市南山区高新南环路36号彩虹之岸12栋4AAddress:Caihong Zhi’an Building No.12 Suite 4A, Gaoxin Nanhuan Road 36, Nanshan District, Shenzhen, Guangdong刘东来Liu Donglai住所：天津市和平区南京路诚基经贸中心1号楼2门1702号Address:No 1702, Door 2, Build 1, Chengji Economic and Trade Centre, Nanjing Road, Heping District, Tianjin.丙方：北京中传视讯科技有限公司Party C:Beijing Mobile Vision Technology Co., Ltd.地址：北京市朝阳区光华路9号SOHO3QLAB32Address: LAB32, SOHO3Q, No 9, Guanghua Road, Chaoyang District, Beijing .收件人：宋雪松Attn: Song Xuesong8.3任何一方可按本条规定随时给其他方发出通知来改变其接收通知的地址。Any Party may at any time change its address for notices by a notice delivered to the other Parties in accordance with the terms hereof.21秘密文件Strictly Confidential9.保密责任Confidentiality各方承认及确定彼此就有关本协议而交换的任何口头或书面资料均属机密资料。各方应当对所有该等资料予以保密，而在未得其他方书面同意前，不得向任何第三者披露任何有关资料，惟下列情况除外：(a)公众人士知悉或将会知悉该等资料(并非由接受资料之一方擅自向公众披露)；(b)适用法律法规或股票交易的规则或规例所需披露之资料；或(c)由任何一方就本协议所述交易而需向其法律或财务顾问披露之资料而该法律或财务顾问亦需遵守与本条款相类似之保密责任。如任何一方工作人员或聘请机构的泄密均视为该方的泄密，需依本协议承担违约责任。无论本协议以任何理由终止，本条款仍然生效。The Parties acknowledge that any oral or written information exchanged among them with respect to this Agreement is confidential information. Each Partyshall maintain the confidentiality of all such information, and without obtaining the written consent of other Parties, it shall not disclose any relevantinformation to any third parties, except in the following circumstances: (a) such information is or will be in the public domain (provided that this is not theresult of a public disclosure by the receiving party); (b) information disclosed as required by applicable laws or rules or regulations of any stock exchange;or (c) information required to be disclosed by any Party to its legal counsel or financial advisor regarding the transaction contemplated hereunder, and suchlegal counsel or financial advisor are also bound by confidentiality duties similar to the duties in this section. Disclosure of any confidential information bythe staff members or agency hired by any Party shall be deemed disclosure of such confidential information by such Party, which Party shall be held liablefor breach of this Agreement. This Section shall survive the termination of this Agreement for any reason.22秘密文件Strictly Confidential10.进一步保证Further Warranties各方同意迅速签署为执行本协议的各项规定和目的而合理需要的或对其有利的文件，以及为执行本协议的各项规定和目的而采取合理需要的或对其有利的进一步行动。The Parties agree to promptly execute documents that are reasonably required for or are conducive to the implementation of the provisions and purposes ofthis Agreement and take further actions that are reasonably required for or are conducive to the implementation of the provisions and purposes of thisAgreement.11.其他Miscellaneous11.1修订、修改与补充Amendment, change and supplement对本协议作出修订、修改与补充，必须经每一方签署书面协议。Any amendment, change and supplement to this Agreement shall require the execution of a written agreement by all of the Parties.11.2完整协议Entire agreement除了在本协议签署后所作出的书面修订、补充或修改以外，本协议构成本协议各方就本协议标的物所达成的完整协议，取代在此之前就本协议标的物所达成的所有口头或书面的协商、陈述和协议。 Except for the amendments, supplements or changes in writing executed after theexecution of this Agreement, this Agreement shall constitute the entire agreement reached by and among the Parties hereto with respect to thesubject matter hereof, and shall supercede all prior oral and written consultations, representations and contracts reached with respect to thesubject matter of this Agreement.23秘密文件Strictly Confidential11.3标题Headings本协议的标题仅为方便阅读而设，不应被用来解释、说明或在其他方面影响本协议各项规定的含义。The headings of this Agreement are for convenience only, and shall not be used to interpret, explain or otherwise affect the meanings of theprovisions of this Agreement.11.4语言Language本协议以中文和英文书就，一式八份，乙方共计六名股东以及甲方、丙方各持一份，具有同等效力；中英文版本如有冲突，应以中文版为准。This Agreement is written in both Chinese and English language in eight copies, the 6 shareholders of Party B, Party A and Party C having onecopy with equal legal validity respectively; in case there is any conflict between the Chinese version and the English version, the Chinese versionshall prevail.11.5可分割性Severability如果本协议有任何一条或多条规定根据任何法律或法规在任何方面被裁定为无效、不合法或不可执行，本协议其余规定的有效性、合法性或可执行性不应因此在任何方面受到影响或损害。各方应通过诚意磋商，争取以法律许可以及各方期望的最大限度内有效的规定取代那些无效、不合法或不可执行的规定，而该等有效的规定所产生的经济效果应尽可能与那些无效、不合法或不能强制执行的规定所产生的经济效果相似。In the event that one or several of the provisions of this Agreement are found to be invalid, illegal or unenforceable in any aspect in accordancewith any laws or regulations, the validity, legality or enforceability of the remaining provisions of this Agreement shall not be affected orcompromised in any respect. The Parties shall strive in good faith to replace such invalid, illegal or unenforceable provisions with effectiveprovisions that accomplish to the greatest extent permitted by law and the intentions of the Parties, and the economic effect of such effectiveprovisions shall be as close as possible to the economic effect of those invalid, illegal or unenforceable provisions.24秘密文件Strictly Confidential11.6继任者Successors本协议对各方各自的继任者和各方所允许的受让方应具有约束力并对其有利。This Agreement shall be binding on and shall inure to the interest of the respective successors of the Parties and the permitted assigns of suchParties.11.7继续有效Survival11.7.1协议期满或提前终止前因本协议而发生的或到期的任何义务在本协议期满或提前终止后继续有效。Any obligations that occur or that are due as a result of this Agreement upon the expiration or early termination of this Agreement shallsurvive the expiration or early termination thereof.11.7.2本协议第5、6、9条和本第11.7条的规定在本协议终止后继续有效。The provisions of Articles 5, 6, 9 and this Section 11.7 shall survive the termination of this Agreement.25秘密文件Strictly Confidential11.8弃权Waivers任何一方可以对本协议的条款和条件作出弃权，但必须经书面作出并经各方签字。一方在某种情况下就其他方的违约所作的弃权不应被视为该方在其他情况下就类似的违约已经对其他方作出弃权。Any Party may waive the terms and conditions of this Agreement, provided that such a waiver must be provided in writing and shall require thesignatures of the Parties. No waiver by any Party in certain circumstances with respect to a breach by other Parties shall operate as a waiver bysuch a Party with respect to any similar breach in other circumstances.本页其余部分刻意留为空白The Remainder of this page is intentionally left blank26秘密文件Strictly Confidential有鉴于此，各方已自行或使得其各自授权代表于文首所载日期签署本独家购买权协议。IN WITNESS WHEREOF, the Parties have executed, or caused their respective duly authorized representatives to execute, this Exclusive Option Agreement as ofthe date first above written.甲方：中传天下信息科技（深圳）有限公司（盖章）Party A: Zhongchuan Tianxia Information Technology (Shenzhen) Co., Ltd. (Seal)签字：By:/s/ Hong Ting姓名：洪婷Name: Hong Ting职务：总经理Title: General Manager秘密文件 Strictly Confidential有鉴于此，各方已自行或使得其各自授权代表于文首所载日期签署本独家购买权协议。IN WITNESS WHEREOF, the Parties have executed, or caused their respective duly authorized representatives to execute, this Exclusive Option Agreement as ofthe date first above written.乙方：Party B:宋雪松Song Xuesong签字：By:/s/ Song Xuesong秘密文件 Strictly Confidential有鉴于此，各方已自行或使得其各自授权代表于文首所载日期签署本独家购买权协议。IN WITNESS WHEREOF, the Parties have executed, or caused their respective duly authorized representatives to execute, this Exclusive Option Agreement as ofthe date first above written.乙方：Party B:陈蔚力Chen Weili签字：By:/s/ Chen Weili秘密文件 Strictly Confidential有鉴于此，各方已自行或使得其各自授权代表于文首所载日期签署本独家购买权协议。IN WITNESS WHEREOF, the Parties have executed, or caused their respective duly authorized representatives to execute, this Exclusive Option Agreement as ofthe date first above written.乙方：Party B:王平Wang Ping签字：By:/s/ Wang Ping秘密文件 Strictly Confidential有鉴于此，各方已自行或使得其各自授权代表于文首所载日期签署本独家购买权协议。IN WITNESS WHEREOF, the Parties have executed, or caused their respective duly authorized representatives to execute, this Exclusive Option Agreement as ofthe date first above written.乙方：Party B:刘东来Liu Donglai签字：By:/s/ Liu Donglai秘密文件 Strictly Confidential有鉴于此，各方已自行或使得其各自授权代表于文首所载日期签署本独家购买权协议。IN WITNESS WHEREOF, the Parties have executed, or caused their respective duly authorized representatives to execute, this Exclusive Option Agreement as ofthe date first above written.丙方：北京中传视讯科技有限公司（盖章）Party B: Beijing Mobile Vision Technology Co., Ltd. (Seal)签字：By:/s/ Song Xuesong姓名：宋雪松Name:Song Xuesong职务：董事长Title:Chairman of the Board秘密文件 Strictly ConfidentialEX4.17 5 f20f2017ex417_luokung.htm EQUITY INTEREST PLEDGE AGREEMENT BY AND AMONG ZHONGCHUAN TIANXIA INFORMATION TECHNOLOGY(SHENZHEN) CO., LTD., XUESONG SONG, WEILI CHEN, PING WANG, DONGLAI LIU, AND BEIJING MOBILE VISION TECHNOLOGY CO., LTD., DATEDAUGUST 31, 2015Exhibit 4.17股权质押协议Equity Interest Pledge Agreement本股权质押协议（下称"本协议”）由下列各方于年月日在中华人民共和国（下称“中国”）北京签订：This Equity Interest Pledge Agreement (this "Agreement") has been executed by and among the following parties on in Beijing, the People’sRepublic of China (the “China” or “PRC”):甲方：中传天下信息科技（深圳）有限公司（下称“质权人”）Party A: Zhongchuan Tianxia Information Technology (Beijing) Co., Ltd. (“Pledgee”)地址：深圳市南山区高新中三道2号深圳软件园一期五栋401AAddress: 401A, Building 5, Phase 1, Shenzhen Software Park, No.2 Gaoxin Zhongsan Road, Nanshan District, Shenzhen统一社会信用代码： 91440300565701058RUniform Social Credit Code: 91440300565701058R乙方(下称“出质人”)：Party B ( “Pledgors”):a)宋雪松Song Xuesong身份证号码:ID Card No.:b)陈蔚力Chen Weili身份证号码:ID Card No.:1秘密文件 Strictly Confidentialc)王平Wang Ping身份证号码:ID Card No.:d)刘东来Liu Donglai身份证号码:ID Card No.:丙方：北京中传视讯科技有限公司Party C: Beijing Mobile Vision Technology Co., Ltd.地址：北京市朝阳区光华路9号SOHO3QLAB32Address: LAB32, SOHO3Q, No 9, Guanghua Road, Chaoyang District, Beijing统一社会信用代码：9111010576215249XMUniform Social Credit Code: 9111010576215249XM在本协议中，质权人、出质人和丙方以下各称“一方”，合称“各方”。In this Agreement, each of Pledgee, Pledgors and Party C shall be referred to as a "Party" respectively, and they shall be collectively referred to as the"Parties".鉴于：Whereas:1．出质人全部为中国境内居民自然人，共同持有丙方100%的股权。丙方是一家在中国注册成立的、主要从事手机视频技术研发、内容制作和产业化市场推广的有限责任公司。丙方有意在此确认出质人和质权人在本协议下的权利和义务并提供必要的协助登记该质权；All of the Pledgors are natural persons resided in PRC, and collectively hold 100% of the equity interest in Party C. Party C is a limited company registered inChina, mainly engaging in mobile video frequency technology research, development, content creation, sale and related industrialization promotion. Party Cacknowledges the respective rights and obligations of Pledgors and Pledgee under this Agreement, and intends to provide any necessary assistance inregistering the Pledge;2．质权人是一家在中国注册的外商独资企业。质权人与丙方于年月日签订了独家业务合作协议；Pledgee is a whollyforeignowned enterprise registered in China. Pledgee and Party C have executed an Exclusive Business Cooperation Agreement as of [*],[*];3．为了保证丙方全面履行独家业务合作协议项下的义务，出质人以其拥有的全部丙方股权向质权人做出质押担保。To ensure that Party C fully performs its obligations under the Exclusive Business Cooperation Agreement, Pledgors hereby pledge to the Pledgee all of theequity interests they hold in Party C.为了履行业务合作协议的条款，各方商定按照以下条款签订本协议。To perform the provisions of the Business Cooperation Agreement, the Parties have mutually agreed to execute this Agreement upon the following terms.2秘密文件 Strictly Confidential1.定义Definitions除非本协议另有规定，下列词语含义为：Unless otherwise provided herein, the terms below shall have the following meanings:1.1质权：指出质人根据本协议第2条给予质权人的担保物权，即指质权人所享有的，以出质人质押给质权人的股权折价或拍卖、变卖该股权的价款优先受偿的权利。Pledge: shall refer to the security interest granted by Pledgors to Pledgee pursuant to Article 2 of this Agreement, i.e., the right of Pledgee to becompensated on a preferential basis with the conversion, auction or sales price of the Equity Interest.1.2股权：指出质人现在和将来（通过增资和/或转股）合法持有的其在丙方的全部股权权益。Equity Interest: shall refer to all of the equity interest in Party C lawfully, held now and to be held (through capital increase and/or equity transfer)hereafter by Pledgors.1.3质押期限：指本协议第3条规定的期间。Term of Pledge: shall refer to the term set forth in Article 3 of this Agreement.1.4业务合作协议：指丙方与质权人于本协议日签订的独家业务合作协议。Business Cooperation Agreement: shall refer to the Exclusive Business Cooperation Agreement executed by and between Party C and Pledgee on thedate of this Agreement.1.5违约事件：指本协议第7条所列任何情况。Event of Default: shall refer to any of the circumstances set forth in Article 7 of this Agreement.1.6违约通知：指质权人根据本协议发出的宣布违约事件的通知。Notice of Default: shall refer to the notice issued by Pledgee in accordance with this Agreement declaring an Event of Default.3秘密文件 Strictly Confidential2.质权The Pledge作为丙方按时和全额支付业务合作协议项下质权人应得的任何或全部的款项，包括但不限于业务合作协议中规定的咨询和服务费的担保（无论该等费用的到期应付是由于到期日的到来、提前收款的要求或其它原因），以及丙方充分履行其在业务合作协议项下其他所有义务（丙方按时和全额支付业务合作协议项下甲方应得的任何或全部的款项及丙方在业务合作协议项下其他所有义务，以下统称为“被担保债务”）的担保，出质人特此将其现有或将拥有的丙方的全部股权权益质押给质权人。As collateral security for the timely and complete payment and performance when due (whether at stated maturity, by acceleration or otherwise) of any or all ofthe payments due (the “all payments in pledge”) by Party C, including without limitation the consulting and services fees payable to the Pledgee under theBusiness Cooperation Agreement, Pledgors hereby pledge to Pledgee a first security interest in all of Pledgors’ right, title and interest, whether now owned orhereafter acquired by Pledgors, in the Equity Interest of Party C.3.质押期限Term of Pledge3.1本质权自本协议项下的股权出质在相应的工商行政管理机关登记之日起生效，质权有效期持续到业务合作协议下所有丙方欠付质权人的款项结清为止。出质人和丙方应（一）自本协议签署之日起3个工作日内，将本协议的质权登记在丙方股东名册上，并（二）自本协议签署之日起10个工作日内向相应的工商行政管理机关申请登记本协议项下的质权。各方共同确认，为办理股权质押工商登记手续，各方及丙方其他股东应按照丙方所在地工商行政管理部门要求的形式签署、真实反映本协议项下质权信息的《股权质押合同》（以下简称“工商登记质押合同”）提交给工商管理机关，工商登记质押合同中未约定事项，仍以本协议约定为准。出质人和丙方应当按照中国法律法规和有关工商行政管理机关的各项要求，提交所有必要的文件并办理所有必要手续，保证质权在递交申请后尽快获得登记。如果出质人持有的丙方注册资本数额增加（不管是通过直接认缴丙方的增资还是从其他股东处受让股权），各方一致同意将采取一切必要的行动和签署一切必要的文件以按照登记机关的要求完成质权的变更登记，以确保本协议项下的质权的持续有效。The Pledge shall become effective on such date when the pledge of the Equity Interest contemplated herein has been registered’ with relevantadministration for industry and commerce (the “AIC”). The Pledge shall be continuously valid until all payments due under the Business CooperationAgreement have been fulfilled by Party C. Pledgors and Party C shall (1) register the Pledge in the shareholders' register of Party C within 3 businessdays following the execution of this Agreement, and (2) submit an application to the AIC for the registration of the Pledge of the Equity Interestcontemplated herein within 10 business days following the execution of this Agreement. The parties covenant that for the purpose of registration of thePledge, the parties hereto and all other shareholders of Party C shall submit to the AIC the Equity Interest Pledge Contract in the form required by theAIC at the location of Party C which shall truly reflect the information of the Pledge hereunder (the “AIC Pledge Contract”). For matters not specified inthe AIC Pledge Contract, the parties shall be bound by the provisions of this Agreement. Pledgors and Party C shall submit all necessary documentsand complete all necessary procedures, as required by the PRC laws and regulations and the relevant AIC, to ensure that the Pledge of the EquityInterest shall be registered with the AIC as soon as possible after filing. In the event that the amount of registered capital held by Pledgors is increased(either by subscribing increased registered capital from Party C or acquiring equity interest from other shareholders), the Parties hereto agree that theyshall take any necessary action and execute any necessary document to complete the registration of change of Pledge according to the requirement ofAIC so that the Pledge in this Agreement remains effective.4秘密文件 Strictly Confidential3.2质押期限内，如丙方未按业务合作协议交付咨询服务费等费用，质权人有权但无义务按本协议的规定处分质权。During the Term of Pledge, in the event Party C fails to pay the exclusive consulting or service fees in accordance with the Business CooperationAgreement, Pledgee shall have the right, but not the obligation, to dispose of the Pledge in accordance with the provisions of this Agreement.4.质权凭证的保管Custody of Records for Equity Interest subject to Pledge4.1在本协议规定的质押期限内，出质人应将其在丙方的股权出资证明书及记载质权的股东名册交付质权人保管。出质人应在本协议签订之日起一周内将上述股权出资证明书及股东名册交付给质权人。质权人将在本协议规定的全部质押期间一直保管这些项目。During the Term of Pledge set forth in this Agreement, Pledgors shall deliver to Pledgee's custody the capital contribution certificate for the EquityInterest and the shareholders' register containing the Pledge within one week from the execution of this Agreement. Pledgee shall have custody of suchitems during the entire Term of Pledge set forth in this Agreement.4.2在质押期限内，股权所产生的红利应当无条件归质权人所有。Dividends generated by the Equity Interest shall be unconditionally owned by the Pledgee during the Term of Pledge.5秘密文件 Strictly Confidential5.出质人的声明和保证Representations and Warranties of Pledgors5.1出质人是股权唯一的合法所有人。Pledgors are the sole legal and beneficial owners of the Equity Interest.5.2质权人有权以本协议规定的方式处分并转让股权。Pledgee shall have the right to dispose of and transfer the Equity Interest in accordance with the provisions set forth in this Agreement.5.3除本质权之外，出质人未在股权上设置任何其他质押权利或其他担保权益。Except for the Pledge, Pledgors have not placed any security interest or other encumbrance on the Equity Interest.6.出质人的承诺和确认Covenants and Further Agreements of Pledgors6.1在本协议存续期间，所有出质人向质权人承诺，出质人将：All of the Pledgors hereby covenant to the Pledgee, that during the term of this Agreement, Pledgors shall:6.1.1除履行由出质人与质权人、丙方于本协议签署日签订的《独家购买权合同》外，未经质权人事先书面同意，不得转让股权，不得在股权上设立或允许存在任何担保或其他债务负担；not transfer the Equity Interest, place or permit the existence of any security interest or other encumbrance on the Equity Interest, without theprior written consent of Pledgee, except for the performance of the Exclusive Option Agreement executed by Pledgors, the Pledgee and Party Con the execution date of this Agreement;6秘密文件 Strictly Confidential6.1.2遵守并执行所有有关权利质押的法律、法规的规定，在收到有关主管机关就质权发出或制定的通知、指令或建议时，于五日内向质权人出示上述通知、指令或建议，同时遵守上述通知、指令或建议，或按照质权人的合理要求或经质权人同意就上述事宜提出反对意见和陈述；comply with the provisions of all laws and regulations applicable to the pledge of rights, and within 5 days of receipt of any notice, order orrecommendation issued or prepared by relevant competent authorities regarding the Pledge, shall present the aforementioned notice, order orrecommendation to Pledgee, and shall comply with the aforementioned notice, order or recommendation or submit objections andrepresentations with respect to the aforementioned matters upon Pledgee's reasonable request or upon consent of Pledgee;6.1.3将任何可能导致对出质人股权或其任何部分的权利产生影响的事件或收到的通知，以及可能改变出质人在本协议中的任何保证、义务或对出质人履行其在本协议中义务可能产生影响的任何事件或收到的通知及时通知质权人。promptly notify Pledgee of any event or notice received by Pledgors that may have an impact on Pledgee's rights to the Equity Interest or anyportion thereof, as well as any event or notice received by Pledgors that may have an impact on any guarantees and other obligations ofPledgors arising out of this Agreement.6.2出质人同意，质权人按本协议条款取得的对质权享有的权利，不应受到出质人或出质人的继承人或出质人之委托人或任何其他人通过法律程序的中断或妨害。Pledgors agree that the rights acquired by Pledgee in accordance with this Agreement with respect to the Pledge shall not be interrupted or harmed byPledgors or any heirs or representatives of Pledgors or any other persons through any legal proceedings.7秘密文件 Strictly Confidential6.3出质人向质权人保证，为保护或完善本协议对偿付业务合作协议项下被担保债务的担保，出质人将诚实签署、并促使其他与质权有利害关系的当事人签署质权人所要求的所有的权利证书、契约和/或履行并促使其他有利害关系的当事人履行质权人所要求的行为，并为本协议赋予质权人之权利、授权的行使提供便利，与质权人或其指定的人(自然人/法人)签署所有的有关股权所有权的文件，并在合理期间内向质权人提供其认为需要的所有的有关质权的通知、命令及决定。To protect or perfect the security interest granted by this Agreement for payment of all payment in pledge under the Business Cooperation Agreement,Pledgors hereby undertake to execute in good faith and to cause other parties who have an interest in the Pledge to execute all certificates, agreements,deeds and/or covenants required by Pledgee. Pledgors also undertake to perform and to cause other parties who have an interest in the Pledge toperform actions required by Pledgee, to facilitate the exercise by Pledgee of its rights and authority granted thereto by this Agreement, and to enter intoall relevant documents regarding ownership of Equity Interest with Pledgee or designee(s) of Pledgee (natural persons/legal persons). Pledgorsundertake to provide Pledgee within a reasonable time with all notices, orders and decisions regarding the Pledge that are required by Pledgee.6.4出质人向质权人保证，出质人将遵守、履行本协议项下所有的保证、承诺、协议、陈述及条件。如出质人不履行或不完全履行其保证、承诺、协议、陈述及条件，出质人应赔偿质权人由此遭受的一切损失。Pledgors hereby undertake to comply with and perform all guarantees, promises, agreements, representations and conditions under this Agreement. Inthe event of failure the whole or partial performance of its guarantees, promises, agreements, representations and conditions, Pledgors shall indemnifyPledgee for all losses resulting therefrom.8秘密文件 Strictly Confidential7.违约事件Event of Default7.1下列事项均被视为违约事件：The following circumstances shall be deemed Event of Default:7.1.1丙方未能按期、完整履行任何业务合作协议项下责任，包括但不限于丙方未能按期足额支付业务合作协议项下的应付的被担保债务或有违反该协议其他义务的行为；Party C fails to fully and timely fulfill any liabilities under the Business Cooperation Agreement, including without limitation failure to pay infull any of the all payment in pledge payable under the Business Cooperation Agreement or breaches any other obligations of Party Cthereunder;7.1.2出质人或丙方实质违反本协议的任何条款；Pledgors or Party C have committed a material breach of any provisions of this Agreement;7.1.3除本协议第6.1.1条的约定外，出质人舍弃出质的股权或未获得质权人书面同意而擅自转让或意图转让出质的股权；和Except as expressly stipulated in Section 6.1.1, Pledgors transfers or purports to transfer or abandons the Equity Interest pledged or assignsthe Equity Interest pledged without the written consent of Pledgee; and7.1.4丙方的继承人或代管人只能履行部分或拒绝履行业务合作协议项下的支付责任。The successor or custodian of Party C is capable of only partially perform or refuses to perform the payment obligations under the BusinessCooperation Agreement.9秘密文件 Strictly Confidential7.2如知道或发现本第7.1条所述的任何事项或可能导致上述事项的事件已经发生，出质人应立即以书面形式通知质权人。Upon notice or discovery of the occurrence of any circumstances or event that may lead to the aforementioned circumstances described in Section 7.1,Pledgors shall immediately notify Pledgee in writing accordingly.7.3除非第7.1部分下的违约事件在质权人向出质人发出要求其修补此违约行为通知后的二十（20）天之内已经按质权人要求获得救济，质权人在其后的任何时间，可向出质人发出书面违约通知，要求依据第8部分履行其处理股权的权利。Unless an Event of Default set forth in this Section 7.1 has been successfully resolved to Pledgee's satisfaction within twenty (20) days after the Pledgeedelivers a notice to the Pledgors requesting ratification of such Event of Default, Pledgee may issue a Notice of Default to Pledgors in writing at any timethereafter, demanding the Pledgors to immediately dispose of the Pledge in accordance with the provisions of Article 8 of this Agreement.8.质权的行使Exercise of Pledge8.1在被担保债务被全部清偿或履行前，未经质权人书面同意，出质人不得转让本质权和其拥有的丙方股权。Prior to the full payment of all payments in pledge, without the Pledgee's written consent, Pledgors shall not assign the Pledge or the Equity Interest inParty C.8.2在质权人行使其质押权利时，质权人可以向出质人发出书面违约通知。Pledgee may issue a Notice of Default to Pledgors when exercising the Pledge.10秘密文件 Strictly Confidential8.3在质权人行使其质押权利时，根据中国有关法律的规定，质权人有权按照法定程序处置质押股权。仅在中国法律允许的范围内，对于处置的所得，质权人无需给付出质人；除非中国法律另有规定，出质人特此放弃其可能有的能向质权人要求任何质押股权处置所得的权利；同样，出质人对质权人在该质押股权处置后的亏损也不承担任何义务。When the Pledgor exercises the pledge right, Pledgee is entitled to dispose of the Equity Interest pledged in accordance with applicable PRC laws. Onlyto the extent permitted under applicable PRC laws, Pledgee has no obligation to account to Pledgors for proceeds of disposition of the Equity Interest.Unless otherwise required by PRC laws, Pledgors hereby waive any rights it may have to demand any such accounting from Pledgee; Likewise, in suchcircumstance Pledgors shall have no obligation to Pledgee for any deficiency remaining after such disposition of the Equity Interest pledged.8.4质权人依照本协议处分质权时，出质人和丙方应予以必要的协助，以使质权人实现其质权。When Pledgee disposes of the Pledge in accordance with this Agreement, Pledgors and Party C shall provide necessary assistance to enable Pledgee toenforce the Pledge in accordance with this Agreement.9.转让Assignment9.1除非经质权人事先同意，出质人无权赠予或转让其在本协议项下的权利义务。Without Pledgee's prior written consent, Pledgors shall not have the right to assign or delegate its rights and obligations under this Agreement.11秘密文件 Strictly Confidential9.2本协议对出质人及其继任人和经许可的受让人均有约束力，并且对质权人及每一继任人和受让人有效。This Agreement shall be binding on Pledgors and their successors and permitted assigns, and shall be valid with respect to Pledgee and each of itssuccessors and assigns.9.3经出质人同意，质权人可以在任何时候将其在业务合作协议项下的所有或任何权利和义务转让给其指定的关联方（自然人/法人），在这种情况下，受让人应享有和承担本协议项下质权人享有和承担的权利和义务，如同其作为原协议方应享有和承担的一样。质权人转让业务合作协议项下的权利和义务时，应质权人要求，出质人应就此转让签署有关协议和/或文件。Upon the Pledgors’ agreement, Pledgee may assign any or all of its rights and obligations under the Business Cooperation Agreement to its designee(s)(natural/legal persons) at any time, in which case the assigns shall have the rights and obligations of Pledgee under this Agreement, as if it were theoriginal party to this Agreement. When the Pledgee assigns the rights and obligations under the Business Cooperation Agreement, upon Pledgee'srequest, Pledgors shall execute relevant agreements or other documents relating to such assignment.9.4因转让所导致的质权人变更后，应质权人要求，出质人应与新的质权人签订一份内容与本协议一致的新质押协议，并在相应的工商行政管理机关进行登记。In the event of a change in Pledgee due to an assignment, Pledgors shall, at the request of Pledgee, execute a new pledge agreement with the newpledgee on the same terms and conditions as this Agreement, and register the same with the relevant AIC.12秘密文件 Strictly Confidential9.5出质人应严格遵守本协议和各方单独或共同签署的其他有关协议的规定，包括独家购买权合同和对质权人的授权委托书，履行各协议项下的义务，并不进行任何足以影响协议的有效性和可强制执行性的作为/不作为。除非根据质权人的书面指示，出质人不得行使其对质押股权还留存的权利。Pledgors shall strictly abide by the provisions of this Agreement and other contracts jointly or separately executed by the Parties hereto or any of them,including the Exclusive Option Agreement and the Power of Attorney granted to Pledgee, perform the obligations hereunder and thereunder, and refrainfrom any action/omission that may affect the effectiveness and enforceability thereof. Any remaining rights of Pledgors with respect to the EquityInterest pledged hereunder shall not be exercised by Pledgors except in accordance with the written instructions of Pledgee.10.终止Termination在被担保债务被全部清偿或履行完毕之后，本质权人应在尽早合理可行的时间内办理或配合办理解除质押的手续，出质人与丙方应提供相应的配合与协助。Upon the full payment of all payments in pledge under the Business Cooperation Agreement a, Pledgor shall then, with the assistance of Party B and Party C,go through the procedures of cancellation of pledge rights at a reasonable time as soon as practicable.11.手续费及其他费用Handling Fees and Other Expenses一切与本协议有关的费用及实际开支，其中包括但不限于法律费用、工本费、印花税以及任何其他税收、费用等全部由丙方承担。All fees and out of pocket expenses relating to this Agreement, including but not limited to legal costs, costs of production, stamp tax and any other taxes andfees, shall be borne by Party C.13秘密文件 Strictly Confidential12.保密责任Confidentiality各方承认及确定有关本协议、本协议内容，以及彼此就准备或履行本协议而交换的任何口头或书面资料均被视为保密信息。各方应当对所有该等保密信息予以保密，而在未得到另一方书面同意前，不得向任何第三者披露任何保密信息，惟下列信息除外：(a)公众人士知悉或将会知悉的任何信息（惟并非由接受保密信息之一方擅自向公众披露）；(b)根据适用法律法规、股票交易规则、或政府部门或法院的命令而所需披露之任何信息；或(c)由任何一方就本协议所述交易而需向其股东、投资者、法律或财务顾问披露之信息，而该股东、法律或财务顾问亦需遵守与本条款相类似之保密责任。如任何一方工作人员或聘请机构的泄密均视为该方的泄密，需依本协议承担违约责任。无论本协议以任何理由终止，本条款仍然生效。The Parties acknowledge that the existence and the terms of this Agreement and any oral or written information exchanged between the Parties in connectionwith the preparation and performance this Agreement are regarded as confidential information. Each Party shall maintain confidentiality of all such confidentialinformation, and without obtaining the written consent of the other Party, it shall not disclose any relevant confidential information to any third parties, exceptfor the information that: (a) is or will be in the public domain (other than through the receiving Party’s unauthorized disclosure); (b) is under the obligation tobe disclosed pursuant to the applicable laws or regulations, rules of any stock exchange, or orders of the court or other government authorities; or (c) isrequired to be disclosed by any Party to its shareholders, investors, legal counsels or financial advisors regarding the transaction contemplated hereunder,provided that such shareholders, investors, legal counsels or financial advisors shall be bound by the confidentiality obligations similar to those set forth inthis Section. Disclosure of any confidential information by the staff members or agencies hired by any Party shall be deemed disclosure of such confidentialinformation by such Party, which Party shall be held liable for breach of this Agreement. This Section shall survive the termination of this Agreement for anyreason.14秘密文件 Strictly Confidential13.适用法律和争议的解决Governing Law and Resolution of Disputes13.1本协议的订立、效力、解释、履行、修改和终止以及争议的解决均适用中国法律。The execution, effectiveness, construction, performance, amendment and termination of this Agreement and the resolution of disputes hereunder shallbe governed by the laws of China.13.2因解释和履行本协议而发生的任何争议，本协议各方应首先通过友好协商的方式加以解决。如果在一方向其他方发出要求协商解决的书面通知后30天之内争议仍然得不到解决，则任何一方均可将有关争议提交给中国国际经济贸易仲裁委员会，由该会按照其仲裁规则仲裁解决。仲裁应在北京进行，使用之语言为中文。仲裁裁决是终局性的，对各方均有约束力。In the event of any dispute with respect to the construction and performance of this Agreement, the Parties shall first resolve the dispute throughfriendly negotiations. In the event the Parties fail to reach an agreement on the dispute within 30 days after either Party's request to the other Parties forresolution of the dispute through negotiations, either Party may submit the relevant dispute to the China International Economic and Trade ArbitrationCommission for arbitration, in accordance with its Arbitration Rules. The arbitration shall be conducted in Beijing, and the language used in arbitrationshall be Chinese. The arbitration award shall be final and binding on all Parties.13.3因解释和履行本协议而发生任何争议或任何争议正在进行仲裁时，除争议的事项外，本协议各方仍应继续行使各自在本协议项下的其他权利并履行各自在本协议项下的其他义务。Upon the occurrence of any disputes arising from the construction and performance of this Agreement or during the pending arbitration of any dispute,except for the matters under dispute, the Parties to this Agreement shall continue to exercise their respective rights under this Agreement and performtheir respective obligations under this Agreement.15秘密文件 Strictly Confidential14.通知Notices14.1本协议项下要求或发出的所有通知和其他通信应通过专人递送、挂号邮寄、邮资预付或商业快递服务或传真的方式发到该方下列地址。每一通知还应再以电子邮件送达。该等通知视为有效送达的日期按如下方式确定：All notices and other communications required or permitted to be given pursuant to this Agreement shall be delivered personally or sent by registeredmail, postage prepaid, by a commercial courier service or by facsimile transmission to the address of such party set forth below. A confirmation copy ofeach notice shall also be sent by Email. The dates on which notices shall be deemed to have been effectively given shall be determined as follows:14.1.1通知如果是以专人递送、快递服务或挂号邮寄、邮资预付发出的，则以于设定为通知的地址在接收或拒收之日为有效送达日。Notices given by personal delivery, by courier service or by registered mail, postage prepaid, shall be deemed effectively given on the date ofreceipt or refusal at the address specified for notices.14.1.2通知如果是以传真发出的，则以成功传送之日为有效送达日（应以自动生成的传送确认信息为证）。Notices given by facsimile transmission shall be deemed effectively given on the date of successful transmission (as evidenced by anautomatically generated confirmation of transmission).16秘密文件 Strictly Confidential14.2为通知的目的，各方地址如下：For the purpose of notices, the addresses of the Parties are as follows:甲方：中传天下信息科技（深圳）有限公司Party A: Zhongchuan Tianxia Information Technology (Shenzhen) Co., Ltd.地址：深圳市南山区高新中三道2号深圳软件园一期五栋401AAddress: 401A, Building 5, Phase 1, Shenzhen Software Park, No.2 Gaoxin Zhongsan Road, Nanshan District, Shenzhen.收件人：洪婷Attn: Hong Ting乙方：Party B:a)宋雪松Song Xuesong地址：125.Expenses, including legal fees, incurred by a director in defending any legal, administrative or investigative proceedings may be paid by the Company inadvance of the final disposition of such proceedings upon receipt of an undertaking by or on behalf of the director to repay the amount if it shall ultimatelybe determined that the director is not entitled to be indemnified by the Company in accordance with these Articles.126.Expenses, including legal fees, incurred by a former director in defending any legal, administrative or investigative proceedings may be paid by theCompany in advance of the final disposition of such proceedings upon receipt of an undertaking by or on behalf of the former director to repay the amountif it shall ultimately be determined that the director is not entitled to be indemnified by the Company in accordance with these Articles.127.The indemnification and advancement of expenses provided by, or granted pursuant to, these Articles is not exclusive of any other rights to which theperson seeking indemnification of advancement of expenses may be entitled under any agreement, resolution of members, resolution of disinteresteddirectors or otherwise, both as to acting in the person’s official capacity and as to acting in another capacity while serving as a director of the Company.128.If a person to be indemnified has been successful in defence of any proceedings referred to above the person is entitled to be indemnified against allexpenses, including legal fees, and against all judgments, fines and amounts paid in settlement and reasonably incurred by the person in connection withthe proceedings.129.The Company may purchase and maintain insurance in relation to any person who is or was a director, an officer or a liquidator of the Company, or who atthe request of the Company is or was serving as a director, an officer or a liquidator of, or in any other capacity is or was acting for, another body corporateor a partnership, joint venture, trust or other enterprise, against any liability asserted against the person and incurred by the person in that capacity,whether or not the Company has or would have had the power to indemnify the person against the liability as provided in these Articles.SEAL130.The Company shall have a Seal and may have more than one Seal. References herein to the Seal shall be references to every Seal which shall have beenduly adopted by resolution of directors. The directors shall provide for the safe custody of the Seal and for an imprint thereof to be kept at the office of theregistered agent of the Company. Except as otherwise expressly provided herein, the Seal when affixed to any written instrument, shall be witnessed andattested to by the signature of a director or any other person so authorized from time to time by resolution of directors. Such authorization may be before orafter the Seal is affixed, may be general or specific and may refer to any number of sealings. The Directors may provide for a facsimile of the Seal and of thesignature of any director or authorized person which may be reproduced by printing or other means on any instrument and it shall have the same force andvalidity as if the Seal had been affixed to such instrument and the same had been signed as hereinbefore described.21DISTRIBUTIONS131.The directors of the Company may by resolution authorise a distribution by the Company at any time and of any amount and to any members they think fitif they are satisfied on reasonable grounds that immediately after the distribution;a.the value of the Company’s assets will exceed its liabilities, andb.the Company will be able to pay its debts as they fall due.132.A resolution of the directors passed under the preceding Article shall contain a statement that, in the opinion of the directors, immediately after thedistribution the value of the Company’s assets will exceed its liabilities, and the Company will be able to pay its debts as they fall due.133.If, after a distribution is authorised and before it is made, the directors cease to be satisfied on reasonable grounds that the Company will, immediately afterthe distribution satisfy the solvency test, any distribution made by the Company is deemed not to have been authorised.134.If, by virtue of the preceding Article, a distribution is deemed not to have been authorised, a director who;a.ceased, after authorisation but before the making of the distribution, to be satisfied on reasonable grounds for believing that the company wouldsatisfy the solvency test immediately after the distribution is made; andb.failed to take reasonable steps to prevent the distribution being made;is personally liable to the company to repay to the company so much of the distribution as is not able to be recovered from members.135.A distribution made to a member at a time when the company did not, immediately after the distribution, satisfy the solvency test may be recovered by thecompany from the member unless;a.the member received the distribution in good faith and without knowledge of the company’s failure to satisfy the solvency test;b.the member has altered his position in reliance on the validity of the distribution; andc.it would be unfair to require repayment in full or at all.DISTRIBUTIONS BY WAY OF DIVIDEND136.The Company may by a resolution of directors declare a distribution by way of dividend and pay such distribution in money, shares or other property. Inthe event that distributions by way of dividend are paid in specie the directors shall have responsibility for establishing and recording in the resolution ofdirectors authorizing the distribution by way of dividend, a fair and proper value for the assets to be so distributed.137.The directors may from time to time pay to the members such interim distributions by way of dividend as appear to the directors to be justified by theprofits of the Company.138.The directors may, before declaring any distribution by way of dividend, set aside out of the profits of the Company such sum as they think proper as areserve fund, and may invest the sum so set aside as a reserve fund upon such securities as they may select.139.Notice of any distribution by way of dividend that may have been declared shall be given to each member in the manner hereinafter mentioned and alldistributions by way of dividend unclaimed for 3 years after having been declared may be forfeited by resolution of directors for the benefit of theCompany.140.No distribution by way of dividend shall bear interest as against the Company and no distribution by way of dividend shall be paid on treasury shares orshares held by another company of which the Company holds, directly or indirectly, shares having more than 50 percent of the vote in electing directors.22141.A share issued as a distribution by way of dividend by the Company shall be treated for all purposes as having been issued for money equal to the valuedetermined by resolution of the directors. In the absence of fraud the decision of the directors as to the value of the share is conclusive unless a questionof law is involved.142.A division of the issued and outstanding shares of a class or series of shares into a larger number of shares of the same class or series having aproportionately smaller par value does not constitute a distribution by way of dividend of shares.ACCOUNTS AND AUDIT143.The Company may by resolution of members call for the directors to prepare periodically a profit and loss account and a balance sheet. The profit and lossaccount and balance sheet shall be drawn up so as to give respectively a true and fair view of the profit and loss of the Company for the financial periodand a true and fair view of the state of affairs of the Company as at the end of the financial period.144.The Company may by resolution of members call for the accounts to be examined by auditors.145.Subject to the rules of the Designated Stock Exchange, the first auditors shall be appointed by resolution of directors; subsequent auditors shall beappointed by the Audit Committee and shall hold office until the Audit Committee appoint another independent auditor.146.Subject to the rules of the Designated Stock Exchange, the remuneration of the auditors of the Company shall be fixed by the Audit Committee.147.The auditors shall examine each profit and loss account and balance sheet required to be served on every member of the Company or laid before a meetingof the members of the Company and shall state in a written report whether or nota.in their opinion the profit and loss account and balance sheet give a true and fair view respectively of the profit and loss for the period covered bythe accounts, and of the state of affairs of the Company at the end of that period; andb.all the information and explanations required by the auditors have been obtained.148.The report of the auditors shall be annexed to the accounts and shall be read at the meeting of members at which the accounts are laid before the Companyor shall be served on the members.149.Every auditor of the Company shall have a right of access at all times to the books of account and vouchers of the Company, and shall be entitled to requirefrom the directors and officers of the Company such information and explanations as he thinks necessary for the performance of the duties of the auditors.150.The auditors of the Company shall be entitled to receive notice of, and to attend any meetings of members of the Company at which the Company’s profitand loss account and balance sheet are to be presented.NOTICES151.Any notice, information or written statement to be given by the Company to members may be served in any way by which it can reasonably be expected toreach each member or by mail addressed to each member at the address shown in the share register.152.Any summons, notice, order, document, process, information or written statement to be served on the Company may be served by leaving it, or by sendingit by registered mail addressed to the Company, at its registered office, or by leaving it with, or by sending it by registered mail to, the registered agent ofthe Company.153.Service of any summons, notice, order, document, process, information or written statement to be served on the Company may be proved by showing thatthe summons, notice, order, document, process, information or written statement was delivered to the registered office or the registered agent of theCompany or that it was mailed in such time as to admit to its being delivered to the registered office or the registered agent of the Company in the normalcourse of delivery within the period prescribed for service and was correctly addressed and the postage was prepaid.23PENSION AND SUPERANNUATION FUNDS154.The directors may establish and maintain or procure the establishment and maintenance of any noncontributory or contributory pension orsuperannuation funds for the benefit of, and give or procure the giving of donations, gratuities, pensions, allowances or emoluments to, any persons whoare or were at any time in the employment or service of the Company or any company which is a subsidiary of the Company or is allied to or associated withthe Company or with any such subsidiary, or who are or were at any time directors or officers of the Company or of any such other company as aforesaid orwho hold or held any salaried employment or office in the Company or such other company, or any persons in whose welfare the Company or any suchother company as aforesaid is or has been at any time interested, and to the wives, widows, families and dependents of any such person, and may makepayments for or towards the insurance of any such persons as aforesaid, and may do any of the matters aforesaid either alone or in conjunction with anysuch other company as aforesaid. Subject always to the proposal being approved by resolution of members, a director holding any such employment oroffice shall be entitled to participate in and retain for his own benefit any such donation, gratuity, pension allowance or emolument.VOLUNTARY WINDING UP AND DISSOLUTION155.The Company may voluntarily commence to wind up and dissolve by a resolution of members but if the Company has never issued shares it mayvoluntarily commence to wind up and dissolve by resolution of directors.CONTINUATION156.The Company may by resolution of members or by a resolution passed unanimously by all directors of the Company continue as a company incorporatedunder the laws of a jurisdiction outside the British Virgin Islands in the manner provided under those laws.ARBITRATION157.Whenever any difference arises between the Company on the one hand and any of the members or their executors, administrators or assigns on the otherhand, touching the true intent and construction or the incidence or consequences of these Articles or of the Act, touching anything done or executed,omitted or suffered in pursuance of the Act or touching any breach or alleged breach or otherwise relating to the premises or to these Articles, or to anyAct or Ordinance affecting the Company or to any of the affairs of the Company such difference shall, unless the parties agree to refer the same to a singlearbitrator, be referred to 2 arbitrators one to be chosen by each of the parties to the difference and the arbitrators shall before entering on the referenceappoint an umpire.158.If either party to the reference makes default in appointing an arbitrator either originally or by way of substitution (in the event that an appointed arbitratorshall die, be incapable of acting or refuse to act) for 10 days after the other party has given him notice to appoint the same, such other party may appoint anarbitrator to act in the place of the arbitrator of the defaulting party.We, Portcullis TrustNet (BVI) Limited of Portcullis TrustNet Chambers, P.O. Box 3444, Road Town, Tortola, British Virgin Islands for the purpose of incorporating aBVI Business Company under the laws of the British Virgin Islands hereby sign these Articles of Association the 27th day of October, 2009.Incorporator/s/ Nicole WheatleyPortcullis TrustNet (BVI) LimitedPortcullis TrustNet ChambersP.O. Box 3444Road Town, TortolaBritish Virgin Islands(Sgd. Nicole Wheatley)24EX4.15 3 f20f2017ex415_luokung.htm EXCLUSIVE BUSINESS COOPERATION AGREEMENT BY AND BETWEEN ZHONGCHUAN TIANXIA INFORMATIONTECHNOLOGY (SHENZHEN) CO., LTD., AND BEIJING MOBILE VISION TECHNOLOGY CO., LTD., DATED AUGUST 31, 2015Exhibit 4.15独家业务合作协议Exclusive Business Cooperation Agreement本独家业务合作协议（下称“本协议”）由以下双方于年月日在中华人民共和国（下称“中国”）北京市签署。This Exclusive Business Cooperation Agreement (this “Agreement”) is made and entered into by and between the following parties on in Beijing, thePeople’s Republic of China (“China” or the “PRC”).甲方：中传天下信息科技（深圳）有限公司Party A: Zhongchuan Tianxia Information Technology (Shenzhen) Co., Ltd.地址：深圳市南山区高新中三道2号深圳软件园一期五栋401A Address: 401A, Building 5, Phase 1, Shenzhen Software Park, No.2 Gaoxin Zhongsan Road, Nanshan District, Shenzhen统一社会信用代码：91440300565701058R Uniform Social Credit Code: 91440300565701058R乙方：北京中传视讯科技有限公司Party B: Beijing Mobile Vision Technology Co., Ltd.地址：北京市朝阳区光华路9号SOHO3QLAB32Address: LAB32, SOHO3Q, No 9, Guanghua Road, Chaoyang District, Beijing统一社会信用代码：9111010576215249XMUniform Social Credit Code: 9111010576215249XM甲方和乙方以下各称为“一方”，统称为“双方”。Each of Party A and Party B shall be hereinafter referred to as a “Party” respectively, and as “Parties” collectively.1秘密文件Strictly Confidential鉴于：Whereas,1.甲方是一家在中国注册的外商独资企业，拥有丰富的技术研发和产业化推广相关的管理和投资经验，并提供相关的技术支持和咨询服务；Party A is a whollyforeignowned enterprise established in China, which has rich experience in technology research development and industrializationpromotion management and investment, and provides relevant technical support and consulting services;2.乙方是一家在中国成立的有限责任公司，经中国有关政府部门批准依法主要从事手机视频技术开发、内容制作及市场推广；Party B is a limited company in China, mainly engages in mobile video technology research, development, content creation, sale and related industrialpromotion as approved by the relevant governmental authorities in China;3.甲方同意利用其技术、人员和信息优势，在本协议期间向乙方提供有关手机视频技术开发、内容制作及市场推广以及未来扩大业务规模和业务范围时乙方所需的技术支持、技术咨询等相关服务，乙方同意接受甲方或其指定方按本协议条款的规定提供的各种服务。Party A is willing to provide Party B with technology supports and technology consulting services in connection with mobile video technology research,development, content creation, sale and related industrial promotion and such services in connection with Party B’s extension of business scale orbroadening of businesses during the term of this Agreement, utilizing its advantages in technology, human resources, and information, and Party B iswilling to accept such services provided by Party A or Party A's designee(s), each on the terms set forth herein.2秘密文件Strictly Confidential据此，甲方和乙方经协商一致，达成如下协议：Now, therefore, through mutual discussion, the Parties have reached the following agreements:1.服务提供Services Provided by Party A1.1按照本协议条款和条件，乙方在此委任甲方在本协议期间作为乙方的独家服务提供者向乙方提供全面的和手机视频技术开发、内容制作及市场推广相关以及未来扩大业务规模和业务范围时乙方所需的技术支持、业务支持和相关咨询服务，具体内容包括但不限于以下内容：Party B hereby appoints Party A as Party B's exclusive services provider to provide Party B with complete technical support, business supportand related consulting services in connection with mobile video technology research, development, content creation, sale and related industrialpromotion and such services in connection with Party B’s extension of business scale or broadening of businesses during the term of thisAgreement, in accordance with the terms and conditions of this Agreement, which may include but not limited to:1.1.1为乙方提供其手机视频技术开发、内容制作及市场推广业务所需的一切服务支持，为乙方提供相当于包括总经理、行政人员、管理人员、筹划部门、商业运营、人力资源、财务、会计以及与乙方业务相关的一切业务操作所需人员所能提供的服务内容；managing all aspects of Party B’s business of mobile video technology research, development, content creation, sale and relatedindustrial promotion. In this capacity, Party A will procure or engage for Party B the services of a general manager and other managementstaff, including but not limited to personnel responsible for all administration, operations, planning, business development, humanresources, finance, accounting and other operations related to the Business of Party B;3秘密文件Strictly Confidential1.1.2为乙方制定全部的商业计划、销售目标，并为优化执行该等商业计划设计和建立相应的系统及操作程序；developing all business plans and sales projections of Party B, and for developing and establishing systems and procedures for optimumexecution of the business plans;1.1.3为乙方申请手机视频技术及内容制作相关专利提供咨询服务和支持；consulting services and support in connection with Party B’s applying for mobile video technology related patents and content creation;1.1.4为乙方手机视频技术产业化的发展方向、规模、品牌提升提供咨询服务；consulting services in connection with the development directions, size and business brands promotion of Party B’s mobile videotechnology industrialization;4秘密文件Strictly Confidential1.1.5为乙方提供与业务相关的办公、生产和销售服务，为乙方租赁场所，建立业务相关的系统和程序，满足乙方的其他要求；procuring or obtaining for Party B all office, production and distribution services related to the Business. It shall procure or obtainappropriate leases, establish systems and procedures needed to operate the business, fulfill orders for services;1.1.6尽最大努力为乙方建立手机视频技术销售市场，根据甲方为乙方制定的商业计划及销售目标代表乙方获取客户订单，同时为乙方提供与业务相关的客户服务，建立向客户开具票据的程序和与会计相关的托收服务。using its best efforts to establish mobile video technology related marketing and other structures to obtain orders for services &products from customers on behalf of Party B in accordance with Party B’s business plans, sales projections and objectives (asdeveloped by Party A) and procure or obtain customer services required in connection with the Business. It shall also establishprocedures for invoicing customers, and establish collection services with respect to accounts;1.1.7就乙方的劳动用工方面提供咨询服务和支持，包括但不限于，组织实施对乙方业务人员、行政人员、管理人员等人员进行培训和考核，协助建立健全的人力资源管理制度和实现人力资源的良好配置；consulting services and support regarding labor system of Party B, including but without limitation to labor training and evaluation ofsales person, administrative staff and management person etc. and establishment of human resources management system to well;5秘密文件Strictly Confidential1.1.8提供乙方需要的客户数据统计、分析及相关数据库的建设和维护等咨询服务；providing Party B with compile and analysis of client data and consulting services of establishment and maintenance of data base;1.1.9提供乙方需要的软件和相关技术支持服务；providing software Party B requires and other technical support;1.1.10接受乙方委托，对乙方的手机视频技术研发和产业化推广业务经营进行指导和管理；guiding and management on Party B’s business of mobile video technology research and development and related industrial promotionoperation according to Party B’s commission;1.1.11当乙方业务规模发展或业务范围扩大需要时，购买乙方业务经营需要的设备；in the event of the demand of Party B’s development of business scale or broadening of businesses, purchase the equipments which itneeds for the operation of its business;1.1.12当乙方业务规模发展或业务范围扩大需要时，完成乙方项目中的全部或部分工作；in the event of the demand of Party B’s development of business scale or broadening of businesses, complete the work of Party B’sproject in whole or in party;6秘密文件Strictly Confidential1.1.13当乙方业务规模发展或业务范围扩大需要时，开发新技术；in the event of the demand of Party B’s development of business scale or broadening of businesses, develop new technology;1.1.14乙方委托甲方，且甲方接受委托提供的其他服务。other services Party B appoints Party A to provide and Party A agrees to provide.1.2乙方接受甲方的咨询和服务。乙方进一步同意，除非经甲方事先书面同意，在本协议期间，就本协议约定的服务或其他事宜，乙方不得直接或间接地从任何第三方获得任何与本协议相同或类似的咨询和/或服务，并不得与任何第三方就本协议所述事项建立任何类似的合作关系。双方同意，甲方可以指定其他方（该被指定方可以与乙方签署本协议第1.3条描述的某些协议）为乙方提供本协议约定的服务和/或支持。Party B agrees to accept all the consultations and services provided by Party A. Party B further agrees that unless with Party A's prior writtenconsent, during the term of this Agreement, Party B shall not directly or indirectly accept the same or any similar consultations and/or servicesprovided by any third party and shall not establish similar corporation relationship with any third party regarding the matters contemplated by thisAgreement. Party A may appoint other parties, who may enter into certain agreements described in Section 1.3 with Party B, to provide Party Bwith the consultations and/or services under this Agreement.7秘密文件Strictly Confidential1.3服务的提供方式Service Providing Methodology1.3.1双方同意在本协议有效期内，视情况而定，乙方可以与甲方或甲方指定的其他方进一步签订技术服务协议和/或咨询服务协议，对各项业务培训、技术服务、咨询服务的具体内容、方式、人员、收费等进行约定。Parties agree that during the term of this Agreement, where necessary, Party B may enter into further technical service agreements and/orconsulting service agreements with Party A or any other party designated by Party A, which shall provide the specific contents, manner,personnel, and fees for the specific technical services and consulting services.1.3.2为更好地履行本协议，双方同意，在甲方认为必要时，乙方应在本协议有效期内与甲方或甲方指定的其他方根据业务进展需要随时签署协议，由甲方或其指定方向乙方提供服务。To fulfill this Agreement, Parties agree that during the term of this Agreement, where Party A deems necessary, Party B shall enter intoagreements with Party A or any other party designated by Party A which shall set forth that Party A or any other party designated byParty A provide services to Party B based on the needs of the business of Party B.8秘密文件Strictly Confidential2.服务的价格和支付方式The Calculation and Payment of the Service Fees双方同意，就甲方提供的服务，乙方应向甲方支付服务费（“服务费”）。服务费不应低于乙方税后利润的80%。服务费应当按季支付；经甲方事先书面同意，服务费可以根据乙方的经营需要进行调整。Both Parties agree that, in consideration of the services provided by Party A, Party B shall pay Party A fees (the “Service Fees”), which shall not be lessthan 80% of Party B’s aftertax profits . The Service Fees shall be due and payable on a quarterly basis; upon the prior written consent by Party A, the rateof Service Fees may be adjusted pursuant to the operational needs of Party B.3.知识产权和保密条款Intellectual Property Rights and Confidentiality Clauses3.1在中国法律允许的范围内，甲方对履行本协议而产生或创造的任何权利、所有权、权益和所有知识产权包括但不限于著作权、专利权、专利申请权、软件、技术秘密、商业机密及其他均享有独占的和排他的权利和利益。乙方须签署所有适当的文件，采取所有适当的行动，递交所有的文件和/或申请，提供所有适当的协助，以及做出所有其他依据甲方的自行决定认为是必要的行为，以将任何对该等知识产权的所有权、权利和权益赋予甲方，和/或完善对甲方此等知识产权权利的保护。To the extent permitted under the PRC laws, Party A shall have exclusive and proprietary rights and interests in all rights, ownership, interests andintellectual properties arising out of or created during the performance of this Agreement, including but not limited to copyrights, patents, patentapplications, software, technical secrets, trade secrets and others. Party B shall execute all appropriate documents, take all appropriate actions,submit all filings and/or applications, render all appropriate assistance and otherwise conduct whatever is necessary deemed as by Party A in itssole discretion for the purposes of vesting any ownership, right or interest of any such intellectual property rights in Party A, and/or perfectingthe protections for any such intellectual property rights in Party A.9秘密文件Strictly Confidential3.2双方承认及确定有关本协议、本协议内容，以及彼此就准备或履行本协议而交换的任何口头或书面资料均被视为保密信息。双方应当对所有该等保密信息予以保密，而在未得到另一方书面同意前，不得向任何第三者披露任何保密信息，惟下列信息除外：(a)公众人士知悉或将会知悉的任何信息（惟并非由接受保密信息之一方擅自向公众披露）；(b)根据适用法律法规、股票交易规则、或政府部门或法院的命令而所需披露之任何信息；或(c)由任何一方就本协议所述交易而需向其股东、投资者、法律或财务顾问披露之信息，而该股东、法律或财务顾问亦需遵守与本条款相类似之保密责任。如任何一方工作人员或聘请机构的泄密均视为该方的泄密，需依本协议承担违约责任。无论本协议以任何理由终止，本条款仍然生效。The Parties acknowledge that the existence and the terms of this Agreement and any oral or written information exchanged between the Parties inconnection with the preparation and performance this Agreement are regarded as confidential information. Each Party shall maintainconfidentiality of all such confidential information, and without obtaining the written consent of the other Party, it shall not disclose any relevantconfidential information to any third parties, except for the information that: (a) is or will be in the public domain (other than through the receivingParty’s unauthorized disclosure); (b) is under the obligation to be disclosed pursuant to the applicable laws or regulations, rules of any stockexchange, or orders of the court or other government authorities; or (c) is required to be disclosed by any Party to its shareholders, investors,legal counsels or financial advisors regarding the transaction contemplated hereunder, provided that such shareholders, investors, legal counselsor financial advisors shall be bound by the confidentiality obligations similar to those set forth in this Section. Disclosure of any confidentialinformation by the staff members or agencies hired by any Party shall be deemed disclosure of such confidential information by such Party, whichParty shall be held liable for breach of this Agreement. This Section shall survive the termination of this Agreement for any reason.3.3双方同意，不论本协议是否变更、解除或终止，本条款将持续有效。The Parties agree that this Section shall survive changes to, and rescission or termination of, this Agreement.4.陈述和保证Representations and Warranties4.1甲方陈述和保证如下：Party A hereby represents and warrants as follows:4.1.1甲方是按照中国法律合法注册并有效存续的外商独资企业。Party A is a whollyforeignowned enterprise legally registered and validly existing in accordance with the laws of China.10秘密文件Strictly Confidential4.1.2甲方已采取必要的公司行为，获得必要的授权，并取得第三方和政府部门的同意及批准（若需）以签署和履行本协议；甲方对本协议的签署和履行并不违反法律法规的明确规定。Party A has taken all necessary corporate actions, obtained all necessary authorization and the consent and approval from third partiesand government agencies (if any) for the execution and performance of this Agreement. Party A’s execution and performance of thisAgreement do not violate any explicit requirements under any law or regulation binding on Party A.4.1.3本协议构成对其合法、有效、有约束力并依本协议之条款对其强制执行的义务。This Agreement constitutes Party A's legal, valid and binding obligations, enforceable in accordance with its terms.4.2乙方陈述和保证如下：Party B hereby represents and warrants as follows:4.2.1乙方是按照中国法律合法登记且有效存续的有限责任公司，乙方根据政府部门的批准和许可从事手机视频技术开发、内容制作和产业化市场推广的经营。Party B is a limited company legally registered and validly existing in accordance with the laws of China, engages in mobile videotechnology research, development, content creation, sale and related industrial promotion pursuant to governmental approvals andpermits;11秘密文件Strictly Confidential4.2.2乙方已采取必要的行为，获得必要的授权，并取得第三方和政府部门的同意及批准（若需）以签署和履行本协议；乙方对本协议的签署和履行并不违反法律法规的明确规定。Party B has taken all necessary actions, obtained all necessary authorization and the consent and approval from third parties andgovernment agencies (if any) for the execution and performance of this Agreement. Party B’s execution and performance of thisAgreement do not violate any explicit requirements under any law or regulation binding on Party B.4.2.3本协议构成对其合法、有效、有约束力并依本协议之条款对其强制执行的义务。This Agreement constitutes Party B's legal, valid and binding obligations, and shall be enforceable against it.5.生效和有效期Effectiveness and Term5.1本协议于文首标明的协议日期签署并同时生效。除非依本协议或双方其他协议的约定而提前终止，本协议有效期为20年，但甲、乙双方应自本协议签署后，每3个月对本协议的内容做一次审查，以决定是否需要根据当时的情况对本协议作出相应修改和补充。This Agreement is executed on the date first above written and shall take effect as of such date. Unless earlier terminated in accordance with theprovisions of this Agreement or relevant agreements separately executed between the Parties, the term of this Agreement shall be 20 years. Afterthe execution of this Agreement, both Parties shall review this Agreement every 3 months to determine whether to amend or supplement theprovisions in this Agreement based on the actual circumstances at that time.12秘密文件Strictly Confidential5.2协议期满前，经甲方书面确认，本协议可以延期。延期的期限由甲方决定，乙方必须无条件地同意该延期。The term of this Agreement may be extended if confirmed in writing by Party A prior to the expiration thereof. The extended term shall bedetermined by Party A, and Party B shall accept such extended term unconditionally.6.终止Termination6.1除非依据本协议续期，本协议于到期之日终止。Unless renewed in accordance with the relevant terms of this Agreement, this Agreement shall be terminated upon the date of expiration hereof.6.2本协议有效期内，除非甲方对乙方有重大过失或存在欺诈行为，乙方不得提前终止本协议。尽管如此，甲方可在任何时候通过提前30天向乙方发出书面通知的方式终止本协议。During the term of this Agreement, unless Party A commits gross negligence, or a fraudulent act, against Party B, Party B shall not terminate thisAgreement prior to its expiration date. Nevertheless, Party A shall have the right to terminate this Agreement upon giving 30 days' prior writtennotice to Party B at any time.6.3在本协议终止之后，双方在第3、7和8条项下的权利和义务将继续有效。The rights and obligations of the Parties under Articles 3, 7 and 8 shall survive the termination of this Agreement.13秘密文件Strictly Confidential7.适用法律和争议解决Governing Law and Resolution of Disputes7.1本协议的订立、效力、解释、履行、修改和终止以及争议的解决适用中国的法律。The execution, effectiveness, construction, performance, amendment and termination of this Agreement and the resolution of disputes hereundershall be governed by the laws of China.7.2因解释和履行本协议而发生的任何争议，本协议双方应首先通过友好协商的方式加以解决。如果在一方向其他方发出要求协商解决的书面通知后30天之内争议仍然得不到解决，则任何一方均可将有关争议提交给中国国际经济贸易仲裁委员会，由该会按照其仲裁规则仲裁解决。仲裁应在北京进行，使用之语言为中文。仲裁裁决是终局性的，对各方均有约束力。In the event of any dispute with respect to the construction and performance of this Agreement, the Parties shall first resolve the dispute throughfriendly negotiations. In the event the Parties fail to reach an agreement on the dispute within 30 days after either Party's request to the otherParties for resolution of the dispute through negotiations, either Party may submit the relevant dispute to the China International Economic andTrade Arbitration Commission for arbitration, in accordance with its Arbitration Rules. The arbitration shall be conducted in Beijing, and thelanguage used in arbitration shall be Chinese. The arbitration award shall be final and binding on all Parties.14秘密文件Strictly Confidential7.3因解释和履行本协议而发生任何争议或任何争议正在进行仲裁时，除争议的事项外，本协议双方仍应继续行使各自在本协议项下的其他权利并履行各自在本协议项下的其他义务。Upon the occurrence of any disputes arising from the construction and performance of this Agreement or during the pending arbitration of anydispute, except for the matters under dispute, the Parties to this Agreement shall continue to exercise their respective rights under this Agreementand perform their respective obligations under this Agreement.8.补偿Indemnification就甲方根据本协议向乙方提供的咨询和服务内容所产生或引起的针对甲方的诉讼、请求或其他要求而招致的任何损失、损害、责任或费用都应由乙方补偿给甲方，以使甲方不受损害，除非该损失、损害、责任或费用是因甲方的重大过失或故意而产生的。Party B shall indemnify and hold harmless Party A from any losses, injuries, obligations or expenses caused by any lawsuit, claims or other demandsagainst Party A arising from or caused by the consultations and services provided by Party A to Party B pursuant this Agreement, except where suchlosses, injuries, obligations or expenses arise from the gross negligence or willful misconduct of Party A.15秘密文件Strictly Confidential9.通知Notices9.1本协议项下要求或发出的所有通知和其他通信应通过专人递送、挂号邮寄、邮资预付或快递服务或传真的方式发到该方下列地址。每一通知还应再以电子邮件送达。该等通知视为有效送达的日期按如下方式确定：All notices and other communications required or permitted to be given pursuant to this Agreement shall be delivered personally or sent byregistered mail, postage prepaid, by a courier service or by facsimile transmission to the address of such Party set forth below. A confirmationcopy of each notice shall also be sent by email. The dates on which notices shall be deemed to have been effectively given shall be determined asfollows:9.1.1通知如果是以专人递送、快递服务或挂号邮寄、邮资预付发出的，则以于设定为通知的地址在接收或拒收之日为有效送达日。Notices given by personal delivery, by courier service or by registered mail, postage prepaid, shall be deemed effectively given on thedate of receipt or refusal at the address specified for notices.9.1.2通知如果是以传真发出的，则以成功传送之日为有效送达日（应以自动生成的传送确认信息为证）。Notices given by facsimile transmission shall be deemed effectively given on the date of successful transmission (as evidenced by anautomatically generated confirmation of transmission).16秘密文件Strictly Confidential9.2为通知的目的，双方地址如下：For the purpose of notices, the addresses of the Parties are as follows:甲方：中传天下信息科技（深圳）有限公司Party A: Zhongchuan Tianxia Information Technology (Shenzhen) Co., Ltd.地址：深圳市南山区高新中三道2号深圳软件园一期五栋401AAddress:401A, Building 5, Phase 1, Shenzhen Software Park, No.2 Gaoxin Zhongsan Road, Nanshan District, Shenzhen收件人：洪婷Attn: Hong Ting乙方：北京中传视讯科技有限公司Party B: Beijing Mobile Vision Technology Co., Ltd地址：北京市朝阳区光华路9号SOHO3QLAB32Address: LAB32, SOHO3Q, No 9, Guanghua Road, Chaoyang District, Beijing.收件人：宋雪松Attn.: Song Xuesong9.3任何一方可按本条规定随时给另一方发出通知来改变其接收通知的地址。Any Party may at any time change its address for notices by a notice delivered to the other Party in accordance with the terms hereof.17秘密文件Strictly Confidential10.协议的转让Assignment10.1乙方不得将其在本协议项下的权利与义务转让给第三方，除非事先征得甲方的书面同意。Without Party A's prior written consent, Party B shall not assign its rights and obligations under this Agreement to any third party.10.2乙方在此同意，甲方可以在其需要时向其他第三方转让其在本协议项下的权利和义务，并在该等转让发生时甲方仅需向乙方发出书面通知，并且无需再就该等转让征得乙方的同意。Party B agrees that Party A may assign its obligations and rights under this Agreement to any third party upon a prior written notice to Party Bbut without the consent of Party B.11.协议的分割性Severability如果本协议有任何一条或多条规定根据任何法律或法规在任何方面被裁定为无效、不合法或不可执行，本协议其余规定的有效性、合法性或可执行性不应因此在任何方面受到影响或损害。双方应通过诚意磋商，争取以法律许可以及双方期望的最大限度内有效的规定取代那些无效、不合法或不可执行的规定，而该等有效的规定所产生的经济效果应尽可能与那些无效、不合法或不能强制执行的规定所产生的经济效果相似。In the event that one or several of the provisions of this Agreement are found to be invalid, illegal or unenforceable in any aspect in accordance with anylaws or regulations, the validity, legality or enforceability of the remaining provisions of this Agreement shall not be affected or compromised in any aspect.The Parties shall strive in good faith to replace such invalid, illegal or unenforceable provisions with effective provisions that accomplish to the greatestextent permitted by law and the intentions of the Parties, and the economic effect of such effective provisions shall be as close as possible to the economiceffect of those invalid, illegal or unenforceable provisions.18秘密文件Strictly Confidential12.协议的修改、补充Amendments and Supplements双方可以书面协议方式对本协议作出修改和补充。经过双方签署的有关本协议的修改协议和补充协议是本协议组成部分，具有与本协议同等的法律效力。Any amendments and supplements to this Agreement shall be in writing. The amendment agreements and supplementary agreements that have beensigned by the Parties and that relate to this Agreement shall be an integral part of this Agreement and shall have the same legal validity as this Agreement.13.语言和副本Language and Counterparts本协议以中文和英文书就，一式二份，甲乙双方各持一份，具有同等效力；中英文版本如有冲突，应以中文版为准。This Agreement is written in both Chinese and English language in two copies, each Party having one copy with equal legal validity; in case there is anyconflict between the Chinese version and the English version, the Chinese version shall prevail.本页其余部分刻意留为空白The Remainder of this page is intentionally left blank19秘密文件Strictly Confidential有鉴于此，双方已使得经其授权的代表于文首所述日期签署了本独家业务合作协议并即生效，以昭信守。IN WITNESS WHEREOF, the Parties have caused their authorized representatives to execute this Exclusive Business Cooperation Agreement as of thedate first above written.甲方：中传天下信息科技（深圳）有限公司（盖章）Party A: Zhongchuan Tianxia Information Technology (Shenzhen) Co., Ltd.(Seal)签字：By: /s/ Hong Ting 姓名：洪婷Name: Hong Ting职务：总经理Title: General Manager20秘密文件Strictly Confidential有鉴于此，双方已使得经其授权的代表于文首所述日期签署了本独家业务合作协议并即生效，以昭信守。IN WITNESS WHEREOF, the Parties have caused their authorized representatives to execute this Exclusive Business Cooperation Agreement as of thedate first above written. 乙方：北京中传视讯科技有限公司（盖章）Party B: Beijing Mobile Vision Technology Co., Ltd. (Seal)签字：By: /s/ Song Xuesong 姓名：宋雪松Name: Song Xuesong职务：董事长Title: Chairman of the Board21秘密文件Strictly ConfidentialEX4.16 4 f20f2017ex416_luokung.htm EXCLUSIVE OPTION AGREEMENT BY AND AMONG ZHONGCHUAN TIANXIA INFORMATION TECHNOLOGY(SHENZHEN) CO., LTD., XUESONG SONG, WEILI CHEN, PING WANG, DONGLAI LIU, AND BEIJING MOBILE VISION TECHNOLOGY CO., LTD., DATEDAUGUST 31, 2015Exhibit 4.16独家购买权协议Exclusive Option Agreement本独家购买权协议 (下称“本协议”) 由以下各方于年月日在中华人民共和国（下称“中国”）北京签订：This Exclusive Option Agreement (this “Agreement”) is executed by and among the Parties below as of in Beijing, the People’s Republic of China (the“China” or “PRC”):甲方：中传天下信息科技（深圳）有限公司，一家依照中国法律设立和存在的外商独资企业，地址为深圳市南山区高新中三道2号深圳软件园一期五栋401A；Party A:Zhongchuan Tianxia Information Technology (Shenzhen) Co., Ltd., a whollyforeignowned enterprise organized and existing under the laws of China,with its address at 401A, Building 5, Phase 1, Shenzhen Software Park, No.2 Gaoxin Zhongsan Road, Nanshan District, Shenzhen.乙方：Party B:a)宋雪松Song Xuesong身份证号码:120112196809040417ID Card No.:120112196809040417住所：天津市河西区广东路中裕园33702Address:Zhongyu Yuan 33702, Guangdong Road, Hexi District, Tianjinb)陈蔚力Chen Weili身份证号码:120106197309240516ID Card No.:120106197309240516住所：广东省深圳市宝安区宝城上川路15号Address:Baocheng Shangchuan Road 15, Baoan District, Shenzhen, Guangdong1秘密文件Strictly Confidentialc)王平Wang Ping身份证号码:35020319691030401xID Card No.:35020319691030401x住所：广东省深圳市南山区高新南环路36号彩虹之岸12栋4AAddress:Caihong Zhi’an Building No.12 Suite 4A, Gaoxin Nanhuan Road 36, Nanshan District, Shenzhen, Guangdongd)刘东来Liu Donglai身份证号码:120107196810103912ID Card No.:120107196810103912住所：天津市和平区南京路诚基经贸中心1号楼2门1702号Address:No 1702, Door 2, Build 1, Chengji Economic and Trade Centre, Nanjing Road, Heping District, Tianjin.丙方：北京中传视讯科技有限公司，一家依照中国法律设立和存在的有限责任公司，地址为北京市朝阳区光华路9号SOHO3QLAB32，统一社会信用代码为9111010576215249XM；Party C:Beijing Mobile Vision Technology Co., Ltd., a limited company duly registered in China, with its address at LAB32, SOHO3Q, No 9, Guanghua Road,Chaoyang District, Beijing and its uniform social credit code of 9111010576215249XM.2秘密文件Strictly Confidential在本协议中，甲方、乙方和丙方以下各称“一方”，合称“各方”。In this Agreement, each of Party A, Party B and Party C shall be referred to as a “Party” respectively, and they shall be collectively referred to as the“Parties”.鉴于，乙方系丙方股东并合计持有丙方100%股权，乙方将按本协议之条款授予甲方购买全部或部分该股权的权利。Whereas, Party B are the shareholders of Party C and jointly hold 100% of the equity interest in Party C, and Party B are willing to grant to Party A the rightto acquire such equity interest, in whole or in part, on the terms herein.现各方协商一致，达成如下协议：Now therefore, upon mutual discussion and negotiation, the Parties have reached the following agreement:1.股权买卖Sale and Purchase of Equity Interest1.1授予权利Option Granted乙方在此不可撤销地授予甲方在中国法律允许的前提下，按照甲方自行决定的行使步骤，并按照本协议第1.3条所述的价格，随时一次或多次从乙方购买或指定一人或多人(“被指定人”)从乙方购买其目前和将来所持有的丙方的全部或部分股权（无论乙方出资额和/或持股比例将来是否发生变化）的一项不可撤销的专有权(“股权购买权”)。除甲方和被指定人外，任何第三人均不得享有股权购买权或其他与乙方股权有关的权利。丙方特此同意乙方向甲方授予股权购买权。本款及本协议所规定的“人”指个人、公司、合营企业、合伙、企业、信托或非公司组织。Party B hereby irrevocably grant Party A an irrevocable and exclusive right to purchase, or designate one or more persons (each, a “Designee”) topurchase the equity interests in Party C now and in the future held by Party B (regardless whether Party B’s capital contribution amount and/orpercentage of shareholding will be changed in the future) once or at multiple times at any time in part or in whole at Party A’s sole and absolutediscretion to the extent permitted by Chinese laws and at the price described in Section 1.3 herein (such right being the “Equity Interest PurchaseOption”). Except for Party A and the Designee(s), no other person shall be entitled to the Equity Interest Purchase Option or other rights withrespect to the equity interests of Party B. Party C hereby agrees to the grant by Party B of the Equity Interest Purchase Option to Party A. Theterm “person” as used herein shall refer to individuals, corporations, partnerships, partners, enterprises, trusts or noncorporate organizations.3秘密文件Strictly Confidential1.2行使步骤Steps for Exercise of Equity Interest Purchase Option甲方行使其股权购买权以符合中国法律和法规的规定为前提。甲方行使股权购买权时，应向乙方发出书面通知(“股权购买通知”)，股权购买通知应载明以下事项：(a)甲方关于行使股权购买权的决定；(b)甲方拟从乙方购买的股权份额(“被购买的股权”)；和(c)被购买的股权的买入日期。Subject to the provisions of the laws and regulations of China, Party A may exercise the Equity Interest Purchase Option by issuing a writtennotice to Party B (the “Equity Interest Purchase Option Notice”), specifying: (a) Party A’s decision to exercise the Equity Interest PurchaseOption; (b) the portion of equity interests to be purchased from Party B (the “Optioned Interests”); and (c) the date for purchasing the OptionedInterests.1.3股权买价Equity Interest Purchase Price被购买的股权的买价（“股权买价”）应是行权当时中国法律允许的最低价格。乙方收到该股权对价后，应当提供给丙方与该股权买价相同金额的借款，该借款的期限为20年，且为无息。乙方应当在该借款期限届满时就该借款放弃对丙方的债权。The purchase price of the Optioned Interests (the “Equity Interest Purchase Price”) shall be the lowest price permitted by the laws of China. Afterreceiving the Equity Interest Purchase Price, Party B shall make an interestfree loan equivalent to the amount of Equity Interest Purchase Price toParty C, of which term is 20 years. Each member of Party B shall give up his(her) creditor’s right when the loan term expires.4秘密文件Strictly Confidential1.4转让被购买股权Transfer of Optioned Interests甲方每次行使股权购买权时：For each exercise of the Equity Interest Purchase Option:1.4.1乙方应责成丙方及时召开股东会会议，在该会议上，应通过批准乙方向甲方和/或被指定人转让被购买的股权的决议；Party B shall cause Party C to promptly convene a shareholders meeting, at which a resolution shall be adopted approving Party B’stransfer of the Optioned Interests to Party A and/or the Designee(s);1.4.2乙方应就其向甲方和/或被指定人转让被购买股权取得丙方其他股东同意该转让并放弃优先购买权的书面声明。Party B shall obtain written statements from the other shareholder of Party C giving consent to the transfer of the equity interest to PartyA and/or the Designee(s) and waiving any right of first refusal related thereto.1.4.3乙方应与甲方和/或(在适用的情况下)被指定人按照本协议及股权购买通知的规定，为每次转让签订股权转让协议；Party B shall execute a share transfer contract with respect to each transfer with Party A and/or each Designee (whichever is applicable),in accordance with the provisions of this Agreement and the Equity Interest Purchase Option Notice regarding the Optioned Interests;5秘密文件Strictly Confidential1.4.4有关方应签署所有其他所需协议、协议或文件，取得全部所需的政府批准和同意，并采取所有所需行动，在不附带任何担保权益的情况下，将被购买的股权的有效所有权转移给甲方和/或被指定人并使甲方和/或被指定人成为被购买的股权的登记在册所有人。为本款及本协议的目的，“担保权益”包括担保、抵押、第三方权利或权益，任何购股权、收购权、优先购买权、抵销权、所有权扣留或其他担保安排等；但为了明确起见，不包括在本协议、乙方股权质押协议项下产生的任何担保权益。本款及本协议所规定的“乙方股权质押协议”指甲方、乙方和丙方于本协议签署之日签订的股权质押协议，根据股权质押协议，乙方为担保丙方能履行丙方与甲方签订的独家业务合作协议项下的义务，而向甲方质押其在丙方的全部乙方股权。The relevant Parties shall execute all other necessary contracts, agreements or documents, obtain all necessary government licenses andpermits and take all necessary actions to transfer valid ownership of the Optioned Interests to Party A and/or the Designee(s),unencumbered by any security interests, and cause Party A and/or the Designee(s) to become the registered owner(s) of the OptionedInterests. For the purpose of this Section and this Agreement, “security interests” shall include securities, mortgages, third party’s rightsor interests, any stock options, acquisition right, right of first refusal, right to offset, ownership retention or other security arrangements,but shall be deemed to exclude any security interest created by this Agreement and Party B’s Equity Interest Pledge Agreement. “PartyB’s Equity Interest Pledge Agreement” as used in this Section and this Agreement shall refer to the Equity Interest Pledge Agreementexecuted by and among Party A, Party B and Party C on the date of this Agreement, whereby Party B pledge all of their equity interests inParty C to Party A, in order to guarantee Party C’s performance of its obligations under the Exclusive Business Corporation Agreementexecuted by and between Party C and Party A.6秘密文件Strictly Confidential2.知识产权独家购买权Exclusive Option regarding the Intellectual Property Rights2.1本协议签订之日起，若乙方拟转让、出售或以其他方式处置（任一处置方式以下简称“转让”）其拥有或持有的全部或部分知识产权（以下称“知识产权”，定义见第2.4条），甲方有权独家购买该等知识产权。From the date hereof, if Party B proposes to transfer, sell or dispose of (each, a “transfer”) all or any part of the intellectual property rights ownedor held by Party B (“IPR”), Party A shall have exclusive option.2.2若乙方有意转让全部或部分知识产权，应事先向甲方发出书面通知(“转让通知”)，转让通知应载明以下事项：(a) 乙方关于转让知识产权的意向；(b) 乙方拟转让的知识产权清单(“拟转让知识产权”)及转让的价格和其他条件。转让通知视为乙方向甲方发出的一份要约，按照该要约，乙方同意按转让通知中指定的价格条件向甲方转让全部或部分拟转让知识产权。Prior to Party B proposes to transfer all or any part of its IPR, Party B shall give Party A a written notice (“Transfer Notice”), which shall specify (a)Party B’s intention to make the transfer; (b) the list of IPR to be transferred (“Offered IPR”) and the consideration and other conditions uponwhich the transfer is to be made. The Transfer Notice constitutes Party B’s offer given to Party A, pursuant to which, Party B agrees to transfer allor any part of its Offered IPR to Party A based on the same conditions described in the Transfer Notice.7秘密文件Strictly Confidential2.3甲方收到转让通知后，有权在30日内选择按照转让通知中列明的转让价格和条件购买拟转让知识产权。如果甲方行使其独家购买权，双方应于甲方收到转让通知后45日内签订有关的知识产权转让协议，乙方应办理法律规定的知识产权转让的批准和登记手续。Party A shall have an option for a period of 30 days from Party A’s receipt of the Transfer Notice to elect to purchase the Offered IPR at the sameprice and subject to the same conditions as described in the Transfer Notice. If Party A decides to exercise its exclusive option, the parties shallenter into relevant IPR transfer agreement within 45 days upon Party A’s receipt of the Transfer Notice and Party B is responsible to complete allrelated approvals and registrations formalities as prescribed by the PRC law.2.4本协议第2条所称“知识产权”指任何知识产权，包括但不限于著作权、专利权、专利申请权、商标、域名、软件、专有技术，并包括前述知识产权申请权利以及登记注册的权利，以及其他所有与前述知识产权有关的权利和权益。The “IPR” referred to in this Article 2 means any intellectual property rights, including, without limitations, copyrights, patents, patentapplications, trademarks, domain names, software and knowhow together with (a) all rights to apply for or register any of the foregoing and (b) allother rights and interests to any of the foregoing.8秘密文件Strictly Confidential3.承诺Covenants3.1有关丙方的承诺Covenants regarding Party C乙方（作为丙方的股东）和丙方在此承诺：Party B (as the shareholders of Party C) and Party C hereby covenant as follows:3.1.1未经甲方的事先书面同意，不以任何形式补充、更改或修改丙方公司章程文件，增加或减少其注册资本，或以其他方式改变其注册资本结构；Without the prior written consent of Party A, they shall not in any manner supplement, change or amend the articles of association andbylaws of Party C, increase or decrease its registered capital, or change its structure of registered capital in other manners;3.1.2按照良好的财务和商业标准及惯例，保持其公司的存续，审慎地及有效地经营其业务和处理事务；They shall maintain Party C’s corporate existence in accordance with good financial and business standards and practices by prudentlyand effectively operating its business and handling its affairs;3.1.3未经甲方的事先书面同意，不在本协议签署之日起的任何时间出售、转让、抵押或以其他方式处置丙方的任何资产、业务或收入的合法或受益权益，或允许在其上设置任何其他担保权益；Without the prior written consent of Party A, they shall not at any time following the date hereof, sell, transfer, mortgage or dispose of inany manner any assets of Party C or legal or beneficial interest in the business or revenues of Party C, or allow the encumbrance thereonof any security interest;3.1.4未经甲方的事先书面同意，不发生、继承、保证或容许存在任何债务，但(i)正常或日常业务过程中产生而不是通过借款方式产生的债务；和(ii)已向甲方披露和得到甲方书面同意的债务除外；Without the prior written consent of Party A, they shall not incur, inherit, guarantee or suffer the existence of any debt, except for (i)debts incurred in the ordinary course of business other than through loans; and (ii) debts disclosed to Party A for which Party A’swritten consent has been obtained;9秘密文件Strictly Confidential3.1.5一直在正常业务过程中经营所有业务，以保持丙方的资产价值，不进行任何足以影响其经营状况和资产价值的作为/不作为；They shall always operate all of Party C’s businesses during the ordinary course of business to maintain the asset value of Party C andrefrain from any action/omission that may affect Party C’s operating status and asset value;3.1.6未经甲方的事先书面同意，不得让丙方签订任何重大协议，但在正常业务过程中签订的协议除外(就本段而言，如果一份协议的价值超过【人民币10万元】，即被视为重大协议)；Without the prior written consent of Party A, they shall not cause Party C to execute any major contract, except the contracts in theordinary course of business (for purpose of this subsection, a contract with a value exceeding RMB 100,000 shall be deemed a majorcontract);3.1.7未经甲方的事先书面同意，丙方不得向任何人提供贷款或信贷；Without the prior written consent of Party A, they shall not cause Party C to provide any person with any loan or credit;3.1.8应甲方要求，向其提供所有关于丙方的营运和财务状况的资料；They shall provide Party A with information on Party C’s business operations and financial condition at Party A’s request;10秘密文件Strictly Confidential3.1.9如甲方提出要求，丙方应从甲方接受的保险公司处购买和持有有关其资产和业务的保险，该保险的金额和险种应与经营类似业务的公司一致；If requested by Party A, they shall procure and maintain insurance in respect of Party C’s assets and business from an insurance carrieracceptable to Party A, at an amount and type of coverage typical for companies that operate similar businesses;3.1.10未经甲方的事先书面同意，丙方不得与任何人合并或联合，或对任何人进行收购或投资；Without the prior written consent of Party A, they shall not cause or permit Party C to merge, consolidate with, acquire or invest in anyperson;3.1.11将发生的或可能发生的与丙方资产、业务或收入有关的诉讼、仲裁或行政程序立即通知甲方；They shall immediately notify Party A of the occurrence or possible occurrence of any litigation, arbitration or administrative proceedingsrelating to Party C’s assets, business or revenue;3.1.12为保持丙方对其全部资产的所有权，签署所有必要或适当的文件，采取所有必要或适当的行动和提出所有必要或适当的控告或对所有索偿进行必要和适当的抗辩；To maintain the ownership by Party C of all of its assets, they shall execute all necessary or appropriate documents, take all necessary orappropriate actions and file all necessary or appropriate complaints or raise necessary and appropriate defenses against all claims;11秘密文件Strictly Confidential3.1.13未经甲方事先书面同意，不得以任何形式派发股息予各股东，但一经甲方要求，丙方应立即将其所有可分配利润全部立即分配给其各股东；及Without the prior written consent of Party A, they shall ensure that Party C shall not in any manner distribute dividends to itsshareholders, provided that upon Party A’s written request, Party C shall immediately distribute all distributable profits to itsshareholders; and3.1.14根据甲方的要求，委任由其指定的任何人士出任丙方的董事和/或执行董事。At the request of Party A, they shall appoint any persons designated by Party A as the director and/or executive director of Party C.3.2乙方和丙方的承诺Covenants of Party B and Party C乙方承诺：Party B hereby covenant as follows:3.2.1未经甲方的事先书面同意，不出售、转让、抵押或以其他方式处置其拥有的丙方的股权的合法或受益权益，或允许在其上设置任何其他担保权益，但根据乙方签署的《股权质押协议》在该股权上设置的质押则除外；Without the prior written consent of Party A, Party B shall not sell, transfer, mortgage or dispose of in any other manner any legal orbeneficial interest in the equity interests in Party C held by Party B, or allow the encumbrance thereon of any security interest, except forthe pledge placed on these equity interests in accordance with Party B’s Equity Interest Pledge Agreement;12秘密文件Strictly Confidential3.2.2促使丙方股东会和/或执行董事不批准在未经甲方的事先书面同意的情况下，出售、转让、抵押或以其他方式处置任何乙方持有之丙方的股权的合法权益或受益权，或允许在其上设置任何其他担保权益，但批准根据乙方签署的《股权质押协议》在乙方股权上设置的质押则除外；Party B shall cause the shareholders’ meeting and/or the executive director of Party C not to approve the sale, transfer, mortgage ordisposition in any other manner of any legal or beneficial interest in the equity interests in Party C held by Party B, or allow theencumbrance thereon of any security interest, without the prior written consent of Party A, except for the pledge placed on these equityinterests in accordance with Party B’s Equity Interest Pledge Agreement;3.2.3未经甲方的事先书面同意的情况下，对于丙方与任何人合并或联合，或对任何人进行收购或投资，乙方将促成丙方股东会或执行董事不予批准；Party B shall cause the shareholders’ meeting or the executive director of Party C not to approve the merger or consolidation with anyperson, or the acquisition of or investment in any person, without the prior written consent of Party A;3.2.4将发生的或可能发生的任何关于其所拥有的股权的诉讼、仲裁或行政程序立即通知甲方；Party B shall immediately notify Party A of the occurrence or possible occurrence of any litigation, arbitration or administrativeproceedings relating to the equity interests in Party C held by Party B;13秘密文件Strictly Confidential3.2.5促使丙方股东会或执行董事表决赞成本协议规定的被购买的股权的转让并应甲方之要求采取其他任何行动；Party B shall cause the shareholders’ meeting or the executive director of Party C to vote their approval of the transfer of the OptionedInterests as set forth in this Agreement and to take any and all other actions that may be requested by Party A;3.2.6为保持其对股权的所有权，签署所有必要或适当的文件，采取所有必要或适当的行动和提出所有必要或适当的控告或对所有索偿进行必要和适当的抗辩；To the extent necessary to maintain Party B’s ownership in Party C, Party B shall execute all necessary or appropriate documents, take allnecessary or appropriate actions and file all necessary or appropriate complaints or raise necessary and appropriate defenses against allclaims;3.2.7应甲方的要求，委任由其指定的任何人士出任丙方的董事和/或执行董事；Party B shall appoint any designee of Party A as the director and/or executive director of Party C, at the request of Party A;3.2.8经甲方随时要求，应向其指定的代表在任何时间无条件地根据本协议的股权购买权立即转让其股权，并放弃其对其他现有股东进行上述股权转让所享有的优先购买权（如有的话）；和At the request of Party A at any time, Party B shall promptly and unconditionally transfer its equity interests in Party C to Party A’sDesignee(s) in accordance with the Equity Interest Purchase Option under this Agreement, and Party B hereby waives its right of firstrefusal (if any) to the share transfer by the other existing shareholder of Party C (if any); and14秘密文件Strictly Confidential3.2.9严格遵守本协议及各方共同或分别签订的其他协议的各项规定，切实履行该等协议项下的各项义务，并不进行任何足以影响该等协议的有效性和可执行性的作为/不作为。如果乙方对于本协议项下或乙方股权质押协议下或对甲方的授权委托书中的股权，还留存有任何权利，除非甲方书面指示，否则乙方仍不得行使该权利。Party B shall strictly abide by the provisions of this Agreement and other contracts jointly or separately executed by and among Party B,Party C and Party A, perform the obligations hereunder and thereunder, and refrain from any action/omission that may affect theeffectiveness and enforceability thereof. To the extent that Party B has any remaining rights with respect to the equity interests subject tothis Agreement hereunder or under Party B’s Equity Interest Pledge Agreement or under the Power of Attorney granted in favor of PartyA, Party B shall not exercise such rights except in accordance with the written instructions of Party A.4.陈述和保证Representations and Warranties乙方和丙方特此在本协议签署之日和每一个转让日向甲方共同及分别陈述和保证如下：Party B and Party C hereby represent and warrant to Party A, jointly and severally, as of the date of this Agreement and each date of transfer of theOptioned Interests, that:4.1其具有签订和交付本协议和其为一方的、根据本协议为每一次转让被购买的股权而签订的任何股权转让协议(各称为"转让协议")，并履行其在本协议和任何转让协议项下的义务的权力和能力。乙方和丙方同意在甲方行使购买权时，他们将签署与本协议条款一致的转让协议。本协议和其是一方的各转让协议一旦签署后，构成或将对其构成合法、有效及具有约束力的义务并可按照其条款对其强制执行；They have the authority to execute and deliver this Agreement and any share transfer contracts to which they are a party concerning theOptioned Interests to be transferred thereunder (each, a “Transfer Contracts”), and to perform their obligations under this Agreement and anyTransfer Contracts. Party B and Party C agree to enter into Transfer Contracts consistent with the terms of this Agreement upon Party A’s exerciseof the Equity Interest Purchase Option. This Agreement and the Transfer Contracts to which they are a party constitute or will constitute theirlegal, valid and binding obligations and shall be enforceable against them in accordance with the provisions thereof;15秘密文件Strictly Confidential4.2无论是本协议或任何转让协议的签署和交付还是其在本协议或任何转让协议项下的义务的履行均不会：(i)导致违反任何有关的中国法律；(ii)与丙方章程或其他组织文件相抵触；(iii)导致违反其是一方或对其有约束力的任何协议或文件，或构成其是一方或对其有约束力的任何协议或文件项下的违约；(iv)导致违反有关向任何一方颁发的任何许可或批准的授予和(或)继续有效的任何条件；或(v)导致向任何一方颁发的任何许可或批准中止或被撤销或附加条件；The execution and delivery of this Agreement or any Transfer Contracts and the obligations under this Agreement or any Transfer Contracts shallnot: (i) cause any violation of any applicable laws of China; (ii) be inconsistent with the articles of association, bylaws or other organizationaldocuments of Party C; (iii) cause the violation of any contracts or instruments to which they are a party or which are binding on them, orconstitute any breach under any contracts or instruments to which they are a party or which are binding on them; (iv) cause any violation of anycondition for the grant and/or continued effectiveness of any licenses or permits issued to either of them; or (v) cause the suspension orrevocation of or imposition of additional conditions to any licenses or permits issued to either of them;4.3乙方对其在丙方拥有的股权拥有良好和可出售的所有权，除乙方签署的《股权质押协议》外，乙方在上述股权上没有设置任何担保权益；Party B have a good and merchantable title to the equity interests in Party C they hold. Except for Party B’s Equity Interest Pledge Agreement,Party B have not placed any security interest on such equity interests;16秘密文件Strictly Confidential4.4目前没有悬而未决的或构成威胁的与丙方的股权、丙方资产有关的或与丙方有关的诉讼、仲裁或行政程序。There are no pending or threatened litigation, arbitration or administrative proceedings relating to the equity interests in Party C, assets of Party Cor Party C.5.生效日Effective Date5.1本协议于各方签署本协议之日生效，有效期10年，经甲方选择可再延长10年。This Agreement shall become effective upon the date hereof, and remain effective for a term of 10 years, and may be renewed for an additional 10years at Party A’s election.5.2若丙方股东发生变化，由新股东签署此协议，在此协议签署之日，原协议自动视为无效。In the event of a change in the shareholders of Party C, the new shareholder should sign this agreement and the original agreement willautomatically be deemed invalid on the date of signing of this agreement.17秘密文件Strictly Confidential6.适用法律与争议解决Governing Law and Resolution of Disputes6.1适用法律Governing law本协议的订立、效力、解释、履行、修改和终止以及争议解决均适用中国正式公布并可公开得到的法律。对中国正式公布并可公开得到的法律没有规定的事项，将适用国际法律原则和惯例。The execution, effectiveness, construction, performance, amendment and termination of this Agreement and the resolution of disputes hereundershall be governed by the formally published and publicly available laws of China. Matters not covered by formally published and publiclyavailable laws of China shall be governed by international legal principles and practices.6.2争议的解决方法Methods of Resolution of Disputes因解释和履行本协议而发生的任何争议，本协议各方应首先通过友好协商的方式加以解决。如果在一方向其他方发出要求协商解决的书面通知后30天之内争议仍然得不到解决，则任何一方均可将有关争议提交给中国国际经济贸易仲裁委员会，由该会按照其届时有效的仲裁规则仲裁解决。仲裁应在北京进行，使用之语言为中文。仲裁裁决是终局性的，对各方均有约束力。In the event of any dispute with respect to the construction and performance of this Agreement, the Parties shall first resolve the dispute throughfriendly negotiations. In the event the Parties fail to reach an agreement on the dispute within 30 days after either Party’s request to the otherParties for resolution of the dispute through negotiations, either Party may submit the relevant dispute to the China International Economic andTrade Arbitration Commission for arbitration, in accordance with its then effective arbitration rules. The arbitration shall be conducted in Beijing,and the language used in arbitration shall be Chinese. The arbitration award shall be final and binding on all Parties.18秘密文件Strictly Confidential7.税款、费用Taxes and Fees每一方应承担根据中国法律因准备和签署本协议和各转让协议以及完成本协议和各转让协议拟定的交易而由该方发生的或对其征收的任何和全部的转让和注册的税、花费和费用。Each Party shall pay any and all transfer and registration tax, expenses and fees incurred thereby or levied thereon in accordance with the laws of China inconnection with the preparation and execution of this Agreement and the Transfer Contracts, as well as the consummation of the transactionscontemplated under this Agreement and the Transfer Contracts.8.通知Notices8.1本协议项下要求或发出的所有通知和其他通信应通过专人递送、挂号邮寄、邮资预付或商业快递服务或传真的方式发到该方下列地址。每一通知还应再以电子邮件送达。该等通知视为有效送达的日期按如下方式确定：All notices and other communications required or permitted to be given pursuant to this Agreement shall be delivered personally or sent byregistered mail, postage prepaid, by a commercial courier service or by facsimile transmission to the address of such Party set forth below. Aconfirmation copy of each notice shall also be sent by email. The dates on which notices shall be deemed to have been effectively given shall bedetermined as follows:8.1.1通知如果是以专人递送、快递服务或挂号邮寄、邮资预付发出的，则以于设定为通知的地址在接收或拒收之日为有效送达日。Notices given by personal delivery, by courier service or by registered mail, postage prepaid, shall be deemed effectively given on thedate of receipt or refusal at the address specified for notices.19秘密文件Strictly Confidential8.1.2通知如果是以传真发出的，则以成功传送之日为有效送达日（应以自动生成的传送确认信息为证）。Notices given by facsimile transmission shall be deemed effectively given on the date of successful transmission (as evidenced by anautomatically generated confirmation of transmission).8.2为通知的目的，各方地址如下：For the purpose of notices, the addresses of the Parties are as follows:甲方：中传天下信息科技（深圳）有限公司Party A:Zhongchuan Tianxia Information Technology (Shenzhen) Co., Ltd.地址：深圳市南山区高新中三道2号深圳软件园一期五栋401AAddress:401A, Building 5, Phase 1, Shenzhen Software Park, No.2 Gaoxin Zhongsan Road, Nanshan District, Shenzhen.收件人：洪婷Attn:Hong Ting乙方：Party B: 宋雪松Song Xuesong住所：天津市河西区广东路中裕园33702Address:Zhongyu Yuan 33702, Guangdong Road, Hexi District, Tianjin20秘密文件Strictly Confidential陈蔚力Chen Weili住所：广东省深圳市宝安区宝城上川路15号Address:Baocheng Shangchuan Road 15, Baoan District, Shenzhen, Guangdong王平Wang Ping住所：广东省深圳市南山区高新南环路36号彩虹之岸12栋4AAddress:Caihong Zhi’an Building No.12 Suite 4A, Gaoxin Nanhuan Road 36, Nanshan District, Shenzhen, Guangdong刘东来Liu Donglai住所：天津市和平区南京路诚基经贸中心1号楼2门1702号Address:No 1702, Door 2, Build 1, Chengji Economic and Trade Centre, Nanjing Road, Heping District, Tianjin.丙方：北京中传视讯科技有限公司Party C:Beijing Mobile Vision Technology Co., Ltd.地址：北京市朝阳区光华路9号SOHO3QLAB32Address: LAB32, SOHO3Q, No 9, Guanghua Road, Chaoyang District, Beijing .收件人：宋雪松Attn: Song Xuesong8.3任何一方可按本条规定随时给其他方发出通知来改变其接收通知的地址。Any Party may at any time change its address for notices by a notice delivered to the other Parties in accordance with the terms hereof.21秘密文件Strictly Confidential9.保密责任Confidentiality各方承认及确定彼此就有关本协议而交换的任何口头或书面资料均属机密资料。各方应当对所有该等资料予以保密，而在未得其他方书面同意前，不得向任何第三者披露任何有关资料，惟下列情况除外：(a)公众人士知悉或将会知悉该等资料(并非由接受资料之一方擅自向公众披露)；(b)适用法律法规或股票交易的规则或规例所需披露之资料；或(c)由任何一方就本协议所述交易而需向其法律或财务顾问披露之资料而该法律或财务顾问亦需遵守与本条款相类似之保密责任。如任何一方工作人员或聘请机构的泄密均视为该方的泄密，需依本协议承担违约责任。无论本协议以任何理由终止，本条款仍然生效。The Parties acknowledge that any oral or written information exchanged among them with respect to this Agreement is confidential information. Each Partyshall maintain the confidentiality of all such information, and without obtaining the written consent of other Parties, it shall not disclose any relevantinformation to any third parties, except in the following circumstances: (a) such information is or will be in the public domain (provided that this is not theresult of a public disclosure by the receiving party); (b) information disclosed as required by applicable laws or rules or regulations of any stock exchange;or (c) information required to be disclosed by any Party to its legal counsel or financial advisor regarding the transaction contemplated hereunder, and suchlegal counsel or financial advisor are also bound by confidentiality duties similar to the duties in this section. Disclosure of any confidential information bythe staff members or agency hired by any Party shall be deemed disclosure of such confidential information by such Party, which Party shall be held liablefor breach of this Agreement. This Section shall survive the termination of this Agreement for any reason.22秘密文件Strictly Confidential10.进一步保证Further Warranties各方同意迅速签署为执行本协议的各项规定和目的而合理需要的或对其有利的文件，以及为执行本协议的各项规定和目的而采取合理需要的或对其有利的进一步行动。The Parties agree to promptly execute documents that are reasonably required for or are conducive to the implementation of the provisions and purposes ofthis Agreement and take further actions that are reasonably required for or are conducive to the implementation of the provisions and purposes of thisAgreement.11.其他Miscellaneous11.1修订、修改与补充Amendment, change and supplement对本协议作出修订、修改与补充，必须经每一方签署书面协议。Any amendment, change and supplement to this Agreement shall require the execution of a written agreement by all of the Parties.11.2完整协议Entire agreement除了在本协议签署后所作出的书面修订、补充或修改以外，本协议构成本协议各方就本协议标的物所达成的完整协议，取代在此之前就本协议标的物所达成的所有口头或书面的协商、陈述和协议。 Except for the amendments, supplements or changes in writing executed after theexecution of this Agreement, this Agreement shall constitute the entire agreement reached by and among the Parties hereto with respect to thesubject matter hereof, and shall supercede all prior oral and written consultations, representations and contracts reached with respect to thesubject matter of this Agreement.23秘密文件Strictly Confidential11.3标题Headings本协议的标题仅为方便阅读而设，不应被用来解释、说明或在其他方面影响本协议各项规定的含义。The headings of this Agreement are for convenience only, and shall not be used to interpret, explain or otherwise affect the meanings of theprovisions of this Agreement.11.4语言Language本协议以中文和英文书就，一式八份，乙方共计六名股东以及甲方、丙方各持一份，具有同等效力；中英文版本如有冲突，应以中文版为准。This Agreement is written in both Chinese and English language in eight copies, the 6 shareholders of Party B, Party A and Party C having onecopy with equal legal validity respectively; in case there is any conflict between the Chinese version and the English version, the Chinese versionshall prevail.11.5可分割性Severability如果本协议有任何一条或多条规定根据任何法律或法规在任何方面被裁定为无效、不合法或不可执行，本协议其余规定的有效性、合法性或可执行性不应因此在任何方面受到影响或损害。各方应通过诚意磋商，争取以法律许可以及各方期望的最大限度内有效的规定取代那些无效、不合法或不可执行的规定，而该等有效的规定所产生的经济效果应尽可能与那些无效、不合法或不能强制执行的规定所产生的经济效果相似。In the event that one or several of the provisions of this Agreement are found to be invalid, illegal or unenforceable in any aspect in accordancewith any laws or regulations, the validity, legality or enforceability of the remaining provisions of this Agreement shall not be affected orcompromised in any respect. The Parties shall strive in good faith to replace such invalid, illegal or unenforceable provisions with effectiveprovisions that accomplish to the greatest extent permitted by law and the intentions of the Parties, and the economic effect of such effectiveprovisions shall be as close as possible to the economic effect of those invalid, illegal or unenforceable provisions.24秘密文件Strictly Confidential11.6继任者Successors本协议对各方各自的继任者和各方所允许的受让方应具有约束力并对其有利。This Agreement shall be binding on and shall inure to the interest of the respective successors of the Parties and the permitted assigns of suchParties.11.7继续有效Survival11.7.1协议期满或提前终止前因本协议而发生的或到期的任何义务在本协议期满或提前终止后继续有效。Any obligations that occur or that are due as a result of this Agreement upon the expiration or early termination of this Agreement shallsurvive the expiration or early termination thereof.11.7.2本协议第5、6、9条和本第11.7条的规定在本协议终止后继续有效。The provisions of Articles 5, 6, 9 and this Section 11.7 shall survive the termination of this Agreement.25秘密文件Strictly Confidential11.8弃权Waivers任何一方可以对本协议的条款和条件作出弃权，但必须经书面作出并经各方签字。一方在某种情况下就其他方的违约所作的弃权不应被视为该方在其他情况下就类似的违约已经对其他方作出弃权。Any Party may waive the terms and conditions of this Agreement, provided that such a waiver must be provided in writing and shall require thesignatures of the Parties. No waiver by any Party in certain circumstances with respect to a breach by other Parties shall operate as a waiver bysuch a Party with respect to any similar breach in other circumstances.本页其余部分刻意留为空白The Remainder of this page is intentionally left blank26秘密文件Strictly Confidential有鉴于此，各方已自行或使得其各自授权代表于文首所载日期签署本独家购买权协议。IN WITNESS WHEREOF, the Parties have executed, or caused their respective duly authorized representatives to execute, this Exclusive Option Agreement as ofthe date first above written.甲方：中传天下信息科技（深圳）有限公司（盖章）Party A: Zhongchuan Tianxia Information Technology (Shenzhen) Co., Ltd. (Seal)签字：By:/s/ Hong Ting姓名：洪婷Name: Hong Ting职务：总经理Title: General Manager秘密文件 Strictly Confidential有鉴于此，各方已自行或使得其各自授权代表于文首所载日期签署本独家购买权协议。IN WITNESS WHEREOF, the Parties have executed, or caused their respective duly authorized representatives to execute, this Exclusive Option Agreement as ofthe date first above written.乙方：Party B:宋雪松Song Xuesong签字：By:/s/ Song Xuesong秘密文件 Strictly Confidential有鉴于此，各方已自行或使得其各自授权代表于文首所载日期签署本独家购买权协议。IN WITNESS WHEREOF, the Parties have executed, or caused their respective duly authorized representatives to execute, this Exclusive Option Agreement as ofthe date first above written.乙方：Party B:陈蔚力Chen Weili签字：By:/s/ Chen Weili秘密文件 Strictly Confidential有鉴于此，各方已自行或使得其各自授权代表于文首所载日期签署本独家购买权协议。IN WITNESS WHEREOF, the Parties have executed, or caused their respective duly authorized representatives to execute, this Exclusive Option Agreement as ofthe date first above written.乙方：Party B:王平Wang Ping签字：By:/s/ Wang Ping秘密文件 Strictly Confidential有鉴于此，各方已自行或使得其各自授权代表于文首所载日期签署本独家购买权协议。IN WITNESS WHEREOF, the Parties have executed, or caused their respective duly authorized representatives to execute, this Exclusive Option Agreement as ofthe date first above written.乙方：Party B:刘东来Liu Donglai签字：By:/s/ Liu Donglai秘密文件 Strictly Confidential有鉴于此，各方已自行或使得其各自授权代表于文首所载日期签署本独家购买权协议。IN WITNESS WHEREOF, the Parties have executed, or caused their respective duly authorized representatives to execute, this Exclusive Option Agreement as ofthe date first above written.丙方：北京中传视讯科技有限公司（盖章）Party B: Beijing Mobile Vision Technology Co., Ltd. (Seal)签字：By:/s/ Song Xuesong姓名：宋雪松Name:Song Xuesong职务：董事长Title:Chairman of the Board秘密文件 Strictly ConfidentialEX4.17 5 f20f2017ex417_luokung.htm EQUITY INTEREST PLEDGE AGREEMENT BY AND AMONG ZHONGCHUAN TIANXIA INFORMATION TECHNOLOGY(SHENZHEN) CO., LTD., XUESONG SONG, WEILI CHEN, PING WANG, DONGLAI LIU, AND BEIJING MOBILE VISION TECHNOLOGY CO., LTD., DATEDAUGUST 31, 2015Exhibit 4.17股权质押协议Equity Interest Pledge Agreement本股权质押协议（下称"本协议”）由下列各方于年月日在中华人民共和国（下称“中国”）北京签订：This Equity Interest Pledge Agreement (this "Agreement") has been executed by and among the following parties on in Beijing, the People’sRepublic of China (the “China” or “PRC”):甲方：中传天下信息科技（深圳）有限公司（下称“质权人”）Party A: Zhongchuan Tianxia Information Technology (Beijing) Co., Ltd. (“Pledgee”)地址：深圳市南山区高新中三道2号深圳软件园一期五栋401AAddress: 401A, Building 5, Phase 1, Shenzhen Software Park, No.2 Gaoxin Zhongsan Road, Nanshan District, Shenzhen统一社会信用代码： 91440300565701058RUniform Social Credit Code: 91440300565701058R乙方(下称“出质人”)：Party B ( “Pledgors”):a)宋雪松Song Xuesong身份证号码:ID Card No.:b)陈蔚力Chen Weili身份证号码:ID Card No.:1秘密文件 Strictly Confidentialc)王平Wang Ping身份证号码:ID Card No.:d)刘东来Liu Donglai身份证号码:ID Card No.:丙方：北京中传视讯科技有限公司Party C: Beijing Mobile Vision Technology Co., Ltd.地址：北京市朝阳区光华路9号SOHO3QLAB32Address: LAB32, SOHO3Q, No 9, Guanghua Road, Chaoyang District, Beijing统一社会信用代码：9111010576215249XMUniform Social Credit Code: 9111010576215249XM在本协议中，质权人、出质人和丙方以下各称“一方”，合称“各方”。In this Agreement, each of Pledgee, Pledgors and Party C shall be referred to as a "Party" respectively, and they shall be collectively referred to as the"Parties".鉴于：Whereas:1．出质人全部为中国境内居民自然人，共同持有丙方100%的股权。丙方是一家在中国注册成立的、主要从事手机视频技术研发、内容制作和产业化市场推广的有限责任公司。丙方有意在此确认出质人和质权人在本协议下的权利和义务并提供必要的协助登记该质权；All of the Pledgors are natural persons resided in PRC, and collectively hold 100% of the equity interest in Party C. Party C is a limited company registered inChina, mainly engaging in mobile video frequency technology research, development, content creation, sale and related industrialization promotion. Party Cacknowledges the respective rights and obligations of Pledgors and Pledgee under this Agreement, and intends to provide any necessary assistance inregistering the Pledge;2．质权人是一家在中国注册的外商独资企业。质权人与丙方于年月日签订了独家业务合作协议；Pledgee is a whollyforeignowned enterprise registered in China. Pledgee and Party C have executed an Exclusive Business Cooperation Agreement as of [*],[*];3．为了保证丙方全面履行独家业务合作协议项下的义务，出质人以其拥有的全部丙方股权向质权人做出质押担保。To ensure that Party C fully performs its obligations under the Exclusive Business Cooperation Agreement, Pledgors hereby pledge to the Pledgee all of theequity interests they hold in Party C.为了履行业务合作协议的条款，各方商定按照以下条款签订本协议。To perform the provisions of the Business Cooperation Agreement, the Parties have mutually agreed to execute this Agreement upon the following terms.2秘密文件 Strictly Confidential1.定义Definitions除非本协议另有规定，下列词语含义为：Unless otherwise provided herein, the terms below shall have the following meanings:1.1质权：指出质人根据本协议第2条给予质权人的担保物权，即指质权人所享有的，以出质人质押给质权人的股权折价或拍卖、变卖该股权的价款优先受偿的权利。Pledge: shall refer to the security interest granted by Pledgors to Pledgee pursuant to Article 2 of this Agreement, i.e., the right of Pledgee to becompensated on a preferential basis with the conversion, auction or sales price of the Equity Interest.1.2股权：指出质人现在和将来（通过增资和/或转股）合法持有的其在丙方的全部股权权益。Equity Interest: shall refer to all of the equity interest in Party C lawfully, held now and to be held (through capital increase and/or equity transfer)hereafter by Pledgors.1.3质押期限：指本协议第3条规定的期间。Term of Pledge: shall refer to the term set forth in Article 3 of this Agreement.1.4业务合作协议：指丙方与质权人于本协议日签订的独家业务合作协议。Business Cooperation Agreement: shall refer to the Exclusive Business Cooperation Agreement executed by and between Party C and Pledgee on thedate of this Agreement.1.5违约事件：指本协议第7条所列任何情况。Event of Default: shall refer to any of the circumstances set forth in Article 7 of this Agreement.1.6违约通知：指质权人根据本协议发出的宣布违约事件的通知。Notice of Default: shall refer to the notice issued by Pledgee in accordance with this Agreement declaring an Event of Default.3秘密文件 Strictly Confidential2.质权The Pledge作为丙方按时和全额支付业务合作协议项下质权人应得的任何或全部的款项，包括但不限于业务合作协议中规定的咨询和服务费的担保（无论该等费用的到期应付是由于到期日的到来、提前收款的要求或其它原因），以及丙方充分履行其在业务合作协议项下其他所有义务（丙方按时和全额支付业务合作协议项下甲方应得的任何或全部的款项及丙方在业务合作协议项下其他所有义务，以下统称为“被担保债务”）的担保，出质人特此将其现有或将拥有的丙方的全部股权权益质押给质权人。As collateral security for the timely and complete payment and performance when due (whether at stated maturity, by acceleration or otherwise) of any or all ofthe payments due (the “all payments in pledge”) by Party C, including without limitation the consulting and services fees payable to the Pledgee under theBusiness Cooperation Agreement, Pledgors hereby pledge to Pledgee a first security interest in all of Pledgors’ right, title and interest, whether now owned orhereafter acquired by Pledgors, in the Equity Interest of Party C.3.质押期限Term of Pledge3.1本质权自本协议项下的股权出质在相应的工商行政管理机关登记之日起生效，质权有效期持续到业务合作协议下所有丙方欠付质权人的款项结清为止。出质人和丙方应（一）自本协议签署之日起3个工作日内，将本协议的质权登记在丙方股东名册上，并（二）自本协议签署之日起10个工作日内向相应的工商行政管理机关申请登记本协议项下的质权。各方共同确认，为办理股权质押工商登记手续，各方及丙方其他股东应按照丙方所在地工商行政管理部门要求的形式签署、真实反映本协议项下质权信息的《股权质押合同》（以下简称“工商登记质押合同”）提交给工商管理机关，工商登记质押合同中未约定事项，仍以本协议约定为准。出质人和丙方应当按照中国法律法规和有关工商行政管理机关的各项要求，提交所有必要的文件并办理所有必要手续，保证质权在递交申请后尽快获得登记。如果出质人持有的丙方注册资本数额增加（不管是通过直接认缴丙方的增资还是从其他股东处受让股权），各方一致同意将采取一切必要的行动和签署一切必要的文件以按照登记机关的要求完成质权的变更登记，以确保本协议项下的质权的持续有效。The Pledge shall become effective on such date when the pledge of the Equity Interest contemplated herein has been registered’ with relevantadministration for industry and commerce (the “AIC”). The Pledge shall be continuously valid until all payments due under the Business CooperationAgreement have been fulfilled by Party C. Pledgors and Party C shall (1) register the Pledge in the shareholders' register of Party C within 3 businessdays following the execution of this Agreement, and (2) submit an application to the AIC for the registration of the Pledge of the Equity Interestcontemplated herein within 10 business days following the execution of this Agreement. The parties covenant that for the purpose of registration of thePledge, the parties hereto and all other shareholders of Party C shall submit to the AIC the Equity Interest Pledge Contract in the form required by theAIC at the location of Party C which shall truly reflect the information of the Pledge hereunder (the “AIC Pledge Contract”). For matters not specified inthe AIC Pledge Contract, the parties shall be bound by the provisions of this Agreement. Pledgors and Party C shall submit all necessary documentsand complete all necessary procedures, as required by the PRC laws and regulations and the relevant AIC, to ensure that the Pledge of the EquityInterest shall be registered with the AIC as soon as possible after filing. In the event that the amount of registered capital held by Pledgors is increased(either by subscribing increased registered capital from Party C or acquiring equity interest from other shareholders), the Parties hereto agree that theyshall take any necessary action and execute any necessary document to complete the registration of change of Pledge according to the requirement ofAIC so that the Pledge in this Agreement remains effective.4秘密文件 Strictly Confidential3.2质押期限内，如丙方未按业务合作协议交付咨询服务费等费用，质权人有权但无义务按本协议的规定处分质权。During the Term of Pledge, in the event Party C fails to pay the exclusive consulting or service fees in accordance with the Business CooperationAgreement, Pledgee shall have the right, but not the obligation, to dispose of the Pledge in accordance with the provisions of this Agreement.4.质权凭证的保管Custody of Records for Equity Interest subject to Pledge4.1在本协议规定的质押期限内，出质人应将其在丙方的股权出资证明书及记载质权的股东名册交付质权人保管。出质人应在本协议签订之日起一周内将上述股权出资证明书及股东名册交付给质权人。质权人将在本协议规定的全部质押期间一直保管这些项目。During the Term of Pledge set forth in this Agreement, Pledgors shall deliver to Pledgee's custody the capital contribution certificate for the EquityInterest and the shareholders' register containing the Pledge within one week from the execution of this Agreement. Pledgee shall have custody of suchitems during the entire Term of Pledge set forth in this Agreement.4.2在质押期限内，股权所产生的红利应当无条件归质权人所有。Dividends generated by the Equity Interest shall be unconditionally owned by the Pledgee during the Term of Pledge.5秘密文件 Strictly Confidential5.出质人的声明和保证Representations and Warranties of Pledgors5.1出质人是股权唯一的合法所有人。Pledgors are the sole legal and beneficial owners of the Equity Interest.5.2质权人有权以本协议规定的方式处分并转让股权。Pledgee shall have the right to dispose of and transfer the Equity Interest in accordance with the provisions set forth in this Agreement.5.3除本质权之外，出质人未在股权上设置任何其他质押权利或其他担保权益。Except for the Pledge, Pledgors have not placed any security interest or other encumbrance on the Equity Interest.6.出质人的承诺和确认Covenants and Further Agreements of Pledgors6.1在本协议存续期间，所有出质人向质权人承诺，出质人将：All of the Pledgors hereby covenant to the Pledgee, that during the term of this Agreement, Pledgors shall:6.1.1除履行由出质人与质权人、丙方于本协议签署日签订的《独家购买权合同》外，未经质权人事先书面同意，不得转让股权，不得在股权上设立或允许存在任何担保或其他债务负担；not transfer the Equity Interest, place or permit the existence of any security interest or other encumbrance on the Equity Interest, without theprior written consent of Pledgee, except for the performance of the Exclusive Option Agreement executed by Pledgors, the Pledgee and Party Con the execution date of this Agreement;6秘密文件 Strictly Confidential6.1.2遵守并执行所有有关权利质押的法律、法规的规定，在收到有关主管机关就质权发出或制定的通知、指令或建议时，于五日内向质权人出示上述通知、指令或建议，同时遵守上述通知、指令或建议，或按照质权人的合理要求或经质权人同意就上述事宜提出反对意见和陈述；comply with the provisions of all laws and regulations applicable to the pledge of rights, and within 5 days of receipt of any notice, order orrecommendation issued or prepared by relevant competent authorities regarding the Pledge, shall present the aforementioned notice, order orrecommendation to Pledgee, and shall comply with the aforementioned notice, order or recommendation or submit objections andrepresentations with respect to the aforementioned matters upon Pledgee's reasonable request or upon consent of Pledgee;6.1.3将任何可能导致对出质人股权或其任何部分的权利产生影响的事件或收到的通知，以及可能改变出质人在本协议中的任何保证、义务或对出质人履行其在本协议中义务可能产生影响的任何事件或收到的通知及时通知质权人。promptly notify Pledgee of any event or notice received by Pledgors that may have an impact on Pledgee's rights to the Equity Interest or anyportion thereof, as well as any event or notice received by Pledgors that may have an impact on any guarantees and other obligations ofPledgors arising out of this Agreement.6.2出质人同意，质权人按本协议条款取得的对质权享有的权利，不应受到出质人或出质人的继承人或出质人之委托人或任何其他人通过法律程序的中断或妨害。Pledgors agree that the rights acquired by Pledgee in accordance with this Agreement with respect to the Pledge shall not be interrupted or harmed byPledgors or any heirs or representatives of Pledgors or any other persons through any legal proceedings.7秘密文件 Strictly Confidential6.3出质人向质权人保证，为保护或完善本协议对偿付业务合作协议项下被担保债务的担保，出质人将诚实签署、并促使其他与质权有利害关系的当事人签署质权人所要求的所有的权利证书、契约和/或履行并促使其他有利害关系的当事人履行质权人所要求的行为，并为本协议赋予质权人之权利、授权的行使提供便利，与质权人或其指定的人(自然人/法人)签署所有的有关股权所有权的文件，并在合理期间内向质权人提供其认为需要的所有的有关质权的通知、命令及决定。To protect or perfect the security interest granted by this Agreement for payment of all payment in pledge under the Business Cooperation Agreement,Pledgors hereby undertake to execute in good faith and to cause other parties who have an interest in the Pledge to execute all certificates, agreements,deeds and/or covenants required by Pledgee. Pledgors also undertake to perform and to cause other parties who have an interest in the Pledge toperform actions required by Pledgee, to facilitate the exercise by Pledgee of its rights and authority granted thereto by this Agreement, and to enter intoall relevant documents regarding ownership of Equity Interest with Pledgee or designee(s) of Pledgee (natural persons/legal persons). Pledgorsundertake to provide Pledgee within a reasonable time with all notices, orders and decisions regarding the Pledge that are required by Pledgee.6.4出质人向质权人保证，出质人将遵守、履行本协议项下所有的保证、承诺、协议、陈述及条件。如出质人不履行或不完全履行其保证、承诺、协议、陈述及条件，出质人应赔偿质权人由此遭受的一切损失。Pledgors hereby undertake to comply with and perform all guarantees, promises, agreements, representations and conditions under this Agreement. Inthe event of failure the whole or partial performance of its guarantees, promises, agreements, representations and conditions, Pledgors shall indemnifyPledgee for all losses resulting therefrom.8秘密文件 Strictly Confidential7.违约事件Event of Default7.1下列事项均被视为违约事件：The following circumstances shall be deemed Event of Default:7.1.1丙方未能按期、完整履行任何业务合作协议项下责任，包括但不限于丙方未能按期足额支付业务合作协议项下的应付的被担保债务或有违反该协议其他义务的行为；Party C fails to fully and timely fulfill any liabilities under the Business Cooperation Agreement, including without limitation failure to pay infull any of the all payment in pledge payable under the Business Cooperation Agreement or breaches any other obligations of Party Cthereunder;7.1.2出质人或丙方实质违反本协议的任何条款；Pledgors or Party C have committed a material breach of any provisions of this Agreement;7.1.3除本协议第6.1.1条的约定外，出质人舍弃出质的股权或未获得质权人书面同意而擅自转让或意图转让出质的股权；和Except as expressly stipulated in Section 6.1.1, Pledgors transfers or purports to transfer or abandons the Equity Interest pledged or assignsthe Equity Interest pledged without the written consent of Pledgee; and7.1.4丙方的继承人或代管人只能履行部分或拒绝履行业务合作协议项下的支付责任。The successor or custodian of Party C is capable of only partially perform or refuses to perform the payment obligations under the BusinessCooperation Agreement.9秘密文件 Strictly Confidential7.2如知道或发现本第7.1条所述的任何事项或可能导致上述事项的事件已经发生，出质人应立即以书面形式通知质权人。Upon notice or discovery of the occurrence of any circumstances or event that may lead to the aforementioned circumstances described in Section 7.1,Pledgors shall immediately notify Pledgee in writing accordingly.7.3除非第7.1部分下的违约事件在质权人向出质人发出要求其修补此违约行为通知后的二十（20）天之内已经按质权人要求获得救济，质权人在其后的任何时间，可向出质人发出书面违约通知，要求依据第8部分履行其处理股权的权利。Unless an Event of Default set forth in this Section 7.1 has been successfully resolved to Pledgee's satisfaction within twenty (20) days after the Pledgeedelivers a notice to the Pledgors requesting ratification of such Event of Default, Pledgee may issue a Notice of Default to Pledgors in writing at any timethereafter, demanding the Pledgors to immediately dispose of the Pledge in accordance with the provisions of Article 8 of this Agreement.8.质权的行使Exercise of Pledge8.1在被担保债务被全部清偿或履行前，未经质权人书面同意，出质人不得转让本质权和其拥有的丙方股权。Prior to the full payment of all payments in pledge, without the Pledgee's written consent, Pledgors shall not assign the Pledge or the Equity Interest inParty C.8.2在质权人行使其质押权利时，质权人可以向出质人发出书面违约通知。Pledgee may issue a Notice of Default to Pledgors when exercising the Pledge.10秘密文件 Strictly Confidential8.3在质权人行使其质押权利时，根据中国有关法律的规定，质权人有权按照法定程序处置质押股权。仅在中国法律允许的范围内，对于处置的所得，质权人无需给付出质人；除非中国法律另有规定，出质人特此放弃其可能有的能向质权人要求任何质押股权处置所得的权利；同样，出质人对质权人在该质押股权处置后的亏损也不承担任何义务。When the Pledgor exercises the pledge right, Pledgee is entitled to dispose of the Equity Interest pledged in accordance with applicable PRC laws. Onlyto the extent permitted under applicable PRC laws, Pledgee has no obligation to account to Pledgors for proceeds of disposition of the Equity Interest.Unless otherwise required by PRC laws, Pledgors hereby waive any rights it may have to demand any such accounting from Pledgee; Likewise, in suchcircumstance Pledgors shall have no obligation to Pledgee for any deficiency remaining after such disposition of the Equity Interest pledged.8.4质权人依照本协议处分质权时，出质人和丙方应予以必要的协助，以使质权人实现其质权。When Pledgee disposes of the Pledge in accordance with this Agreement, Pledgors and Party C shall provide necessary assistance to enable Pledgee toenforce the Pledge in accordance with this Agreement.9.转让Assignment9.1除非经质权人事先同意，出质人无权赠予或转让其在本协议项下的权利义务。Without Pledgee's prior written consent, Pledgors shall not have the right to assign or delegate its rights and obligations under this Agreement.11秘密文件 Strictly Confidential9.2本协议对出质人及其继任人和经许可的受让人均有约束力，并且对质权人及每一继任人和受让人有效。This Agreement shall be binding on Pledgors and their successors and permitted assigns, and shall be valid with respect to Pledgee and each of itssuccessors and assigns.9.3经出质人同意，质权人可以在任何时候将其在业务合作协议项下的所有或任何权利和义务转让给其指定的关联方（自然人/法人），在这种情况下，受让人应享有和承担本协议项下质权人享有和承担的权利和义务，如同其作为原协议方应享有和承担的一样。质权人转让业务合作协议项下的权利和义务时，应质权人要求，出质人应就此转让签署有关协议和/或文件。Upon the Pledgors’ agreement, Pledgee may assign any or all of its rights and obligations under the Business Cooperation Agreement to its designee(s)(natural/legal persons) at any time, in which case the assigns shall have the rights and obligations of Pledgee under this Agreement, as if it were theoriginal party to this Agreement. When the Pledgee assigns the rights and obligations under the Business Cooperation Agreement, upon Pledgee'srequest, Pledgors shall execute relevant agreements or other documents relating to such assignment.9.4因转让所导致的质权人变更后，应质权人要求，出质人应与新的质权人签订一份内容与本协议一致的新质押协议，并在相应的工商行政管理机关进行登记。In the event of a change in Pledgee due to an assignment, Pledgors shall, at the request of Pledgee, execute a new pledge agreement with the newpledgee on the same terms and conditions as this Agreement, and register the same with the relevant AIC.12秘密文件 Strictly Confidential9.5出质人应严格遵守本协议和各方单独或共同签署的其他有关协议的规定，包括独家购买权合同和对质权人的授权委托书，履行各协议项下的义务，并不进行任何足以影响协议的有效性和可强制执行性的作为/不作为。除非根据质权人的书面指示，出质人不得行使其对质押股权还留存的权利。Pledgors shall strictly abide by the provisions of this Agreement and other contracts jointly or separately executed by the Parties hereto or any of them,including the Exclusive Option Agreement and the Power of Attorney granted to Pledgee, perform the obligations hereunder and thereunder, and refrainfrom any action/omission that may affect the effectiveness and enforceability thereof. Any remaining rights of Pledgors with respect to the EquityInterest pledged hereunder shall not be exercised by Pledgors except in accordance with the written instructions of Pledgee.10.终止Termination在被担保债务被全部清偿或履行完毕之后，本质权人应在尽早合理可行的时间内办理或配合办理解除质押的手续，出质人与丙方应提供相应的配合与协助。Upon the full payment of all payments in pledge under the Business Cooperation Agreement a, Pledgor shall then, with the assistance of Party B and Party C,go through the procedures of cancellation of pledge rights at a reasonable time as soon as practicable.11.手续费及其他费用Handling Fees and Other Expenses一切与本协议有关的费用及实际开支，其中包括但不限于法律费用、工本费、印花税以及任何其他税收、费用等全部由丙方承担。All fees and out of pocket expenses relating to this Agreement, including but not limited to legal costs, costs of production, stamp tax and any other taxes andfees, shall be borne by Party C.13秘密文件 Strictly Confidential12.保密责任Confidentiality各方承认及确定有关本协议、本协议内容，以及彼此就准备或履行本协议而交换的任何口头或书面资料均被视为保密信息。各方应当对所有该等保密信息予以保密，而在未得到另一方书面同意前，不得向任何第三者披露任何保密信息，惟下列信息除外：(a)公众人士知悉或将会知悉的任何信息（惟并非由接受保密信息之一方擅自向公众披露）；(b)根据适用法律法规、股票交易规则、或政府部门或法院的命令而所需披露之任何信息；或(c)由任何一方就本协议所述交易而需向其股东、投资者、法律或财务顾问披露之信息，而该股东、法律或财务顾问亦需遵守与本条款相类似之保密责任。如任何一方工作人员或聘请机构的泄密均视为该方的泄密，需依本协议承担违约责任。无论本协议以任何理由终止，本条款仍然生效。The Parties acknowledge that the existence and the terms of this Agreement and any oral or written information exchanged between the Parties in connectionwith the preparation and performance this Agreement are regarded as confidential information. Each Party shall maintain confidentiality of all such confidentialinformation, and without obtaining the written consent of the other Party, it shall not disclose any relevant confidential information to any third parties, exceptfor the information that: (a) is or will be in the public domain (other than through the receiving Party’s unauthorized disclosure); (b) is under the obligation tobe disclosed pursuant to the applicable laws or regulations, rules of any stock exchange, or orders of the court or other government authorities; or (c) isrequired to be disclosed by any Party to its shareholders, investors, legal counsels or financial advisors regarding the transaction contemplated hereunder,provided that such shareholders, investors, legal counsels or financial advisors shall be bound by the confidentiality obligations similar to those set forth inthis Section. Disclosure of any confidential information by the staff members or agencies hired by any Party shall be deemed disclosure of such confidentialinformation by such Party, which Party shall be held liable for breach of this Agreement. This Section shall survive the termination of this Agreement for anyreason.14秘密文件 Strictly Confidential13.适用法律和争议的解决Governing Law and Resolution of Disputes13.1本协议的订立、效力、解释、履行、修改和终止以及争议的解决均适用中国法律。The execution, effectiveness, construction, performance, amendment and termination of this Agreement and the resolution of disputes hereunder shallbe governed by the laws of China.13.2因解释和履行本协议而发生的任何争议，本协议各方应首先通过友好协商的方式加以解决。如果在一方向其他方发出要求协商解决的书面通知后30天之内争议仍然得不到解决，则任何一方均可将有关争议提交给中国国际经济贸易仲裁委员会，由该会按照其仲裁规则仲裁解决。仲裁应在北京进行，使用之语言为中文。仲裁裁决是终局性的，对各方均有约束力。In the event of any dispute with respect to the construction and performance of this Agreement, the Parties shall first resolve the dispute throughfriendly negotiations. In the event the Parties fail to reach an agreement on the dispute within 30 days after either Party's request to the other Parties forresolution of the dispute through negotiations, either Party may submit the relevant dispute to the China International Economic and Trade ArbitrationCommission for arbitration, in accordance with its Arbitration Rules. The arbitration shall be conducted in Beijing, and the language used in arbitrationshall be Chinese. The arbitration award shall be final and binding on all Parties.13.3因解释和履行本协议而发生任何争议或任何争议正在进行仲裁时，除争议的事项外，本协议各方仍应继续行使各自在本协议项下的其他权利并履行各自在本协议项下的其他义务。Upon the occurrence of any disputes arising from the construction and performance of this Agreement or during the pending arbitration of any dispute,except for the matters under dispute, the Parties to this Agreement shall continue to exercise their respective rights under this Agreement and performtheir respective obligations under this Agreement.15秘密文件 Strictly Confidential14.通知Notices14.1本协议项下要求或发出的所有通知和其他通信应通过专人递送、挂号邮寄、邮资预付或商业快递服务或传真的方式发到该方下列地址。每一通知还应再以电子邮件送达。该等通知视为有效送达的日期按如下方式确定：All notices and other communications required or permitted to be given pursuant to this Agreement shall be delivered personally or sent by registeredmail, postage prepaid, by a commercial courier service or by facsimile transmission to the address of such party set forth below. A confirmation copy ofeach notice shall also be sent by Email. The dates on which notices shall be deemed to have been effectively given shall be determined as follows:14.1.1通知如果是以专人递送、快递服务或挂号邮寄、邮资预付发出的，则以于设定为通知的地址在接收或拒收之日为有效送达日。Notices given by personal delivery, by courier service or by registered mail, postage prepaid, shall be deemed effectively given on the date ofreceipt or refusal at the address specified for notices.14.1.2通知如果是以传真发出的，则以成功传送之日为有效送达日（应以自动生成的传送确认信息为证）。Notices given by facsimile transmission shall be deemed effectively given on the date of successful transmission (as evidenced by anautomatically generated confirmation of transmission).16秘密文件 Strictly Confidential14.2为通知的目的，各方地址如下：For the purpose of notices, the addresses of the Parties are as follows:甲方：中传天下信息科技（深圳）有限公司Party A: Zhongchuan Tianxia Information Technology (Shenzhen) Co., Ltd.地址：深圳市南山区高新中三道2号深圳软件园一期五栋401AAddress: 401A, Building 5, Phase 1, Shenzhen Software Park, No.2 Gaoxin Zhongsan Road, Nanshan District, Shenzhen.收件人：洪婷Attn: Hong Ting乙方：Party B:a)宋雪松Song Xuesong地址：125.Expenses, including legal fees, incurred by a director in defending any legal, administrative or investigative proceedings may be paid by the Company inadvance of the final disposition of such proceedings upon receipt of an undertaking by or on behalf of the director to repay the amount if it shall ultimatelybe determined that the director is not entitled to be indemnified by the Company in accordance with these Articles.126.Expenses, including legal fees, incurred by a former director in defending any legal, administrative or investigative proceedings may be paid by theCompany in advance of the final disposition of such proceedings upon receipt of an undertaking by or on behalf of the former director to repay the amountif it shall ultimately be determined that the director is not entitled to be indemnified by the Company in accordance with these Articles.127.The indemnification and advancement of expenses provided by, or granted pursuant to, these Articles is not exclusive of any other rights to which theperson seeking indemnification of advancement of expenses may be entitled under any agreement, resolution of members, resolution of disinteresteddirectors or otherwise, both as to acting in the person’s official capacity and as to acting in another capacity while serving as a director of the Company.128.If a person to be indemnified has been successful in defence of any proceedings referred to above the person is entitled to be indemnified against allexpenses, including legal fees, and against all judgments, fines and amounts paid in settlement and reasonably incurred by the person in connection withthe proceedings.129.The Company may purchase and maintain insurance in relation to any person who is or was a director, an officer or a liquidator of the Company, or who atthe request of the Company is or was serving as a director, an officer or a liquidator of, or in any other capacity is or was acting for, another body corporateor a partnership, joint venture, trust or other enterprise, against any liability asserted against the person and incurred by the person in that capacity,whether or not the Company has or would have had the power to indemnify the person against the liability as provided in these Articles.SEAL130.The Company shall have a Seal and may have more than one Seal. References herein to the Seal shall be references to every Seal which shall have beenduly adopted by resolution of directors. The directors shall provide for the safe custody of the Seal and for an imprint thereof to be kept at the office of theregistered agent of the Company. Except as otherwise expressly provided herein, the Seal when affixed to any written instrument, shall be witnessed andattested to by the signature of a director or any other person so authorized from time to time by resolution of directors. Such authorization may be before orafter the Seal is affixed, may be general or specific and may refer to any number of sealings. The Directors may provide for a facsimile of the Seal and of thesignature of any director or authorized person which may be reproduced by printing or other means on any instrument and it shall have the same force andvalidity as if the Seal had been affixed to such instrument and the same had been signed as hereinbefore described.21DISTRIBUTIONS131.The directors of the Company may by resolution authorise a distribution by the Company at any time and of any amount and to any members they think fitif they are satisfied on reasonable grounds that immediately after the distribution;a.the value of the Company’s assets will exceed its liabilities, andb.the Company will be able to pay its debts as they fall due.132.A resolution of the directors passed under the preceding Article shall contain a statement that, in the opinion of the directors, immediately after thedistribution the value of the Company’s assets will exceed its liabilities, and the Company will be able to pay its debts as they fall due.133.If, after a distribution is authorised and before it is made, the directors cease to be satisfied on reasonable grounds that the Company will, immediately afterthe distribution satisfy the solvency test, any distribution made by the Company is deemed not to have been authorised.134.If, by virtue of the preceding Article, a distribution is deemed not to have been authorised, a director who;a.ceased, after authorisation but before the making of the distribution, to be satisfied on reasonable grounds for believing that the company wouldsatisfy the solvency test immediately after the distribution is made; andb.failed to take reasonable steps to prevent the distribution being made;is personally liable to the company to repay to the company so much of the distribution as is not able to be recovered from members.135.A distribution made to a member at a time when the company did not, immediately after the distribution, satisfy the solvency test may be recovered by thecompany from the member unless;a.the member received the distribution in good faith and without knowledge of the company’s failure to satisfy the solvency test;b.the member has altered his position in reliance on the validity of the distribution; andc.it would be unfair to require repayment in full or at all.DISTRIBUTIONS BY WAY OF DIVIDEND136.The Company may by a resolution of directors declare a distribution by way of dividend and pay such distribution in money, shares or other property. Inthe event that distributions by way of dividend are paid in specie the directors shall have responsibility for establishing and recording in the resolution ofdirectors authorizing the distribution by way of dividend, a fair and proper value for the assets to be so distributed.137.The directors may from time to time pay to the members such interim distributions by way of dividend as appear to the directors to be justified by theprofits of the Company.138.The directors may, before declaring any distribution by way of dividend, set aside out of the profits of the Company such sum as they think proper as areserve fund, and may invest the sum so set aside as a reserve fund upon such securities as they may select.139.Notice of any distribution by way of dividend that may have been declared shall be given to each member in the manner hereinafter mentioned and alldistributions by way of dividend unclaimed for 3 years after having been declared may be forfeited by resolution of directors for the benefit of theCompany.140.No distribution by way of dividend shall bear interest as against the Company and no distribution by way of dividend shall be paid on treasury shares orshares held by another company of which the Company holds, directly or indirectly, shares having more than 50 percent of the vote in electing directors.22141.A share issued as a distribution by way of dividend by the Company shall be treated for all purposes as having been issued for money equal to the valuedetermined by resolution of the directors. In the absence of fraud the decision of the directors as to the value of the share is conclusive unless a questionof law is involved.142.A division of the issued and outstanding shares of a class or series of shares into a larger number of shares of the same class or series having aproportionately smaller par value does not constitute a distribution by way of dividend of shares.ACCOUNTS AND AUDIT143.The Company may by resolution of members call for the directors to prepare periodically a profit and loss account and a balance sheet. The profit and lossaccount and balance sheet shall be drawn up so as to give respectively a true and fair view of the profit and loss of the Company for the financial periodand a true and fair view of the state of affairs of the Company as at the end of the financial period.144.The Company may by resolution of members call for the accounts to be examined by auditors.145.Subject to the rules of the Designated Stock Exchange, the first auditors shall be appointed by resolution of directors; subsequent auditors shall beappointed by the Audit Committee and shall hold office until the Audit Committee appoint another independent auditor.146.Subject to the rules of the Designated Stock Exchange, the remuneration of the auditors of the Company shall be fixed by the Audit Committee.147.The auditors shall examine each profit and loss account and balance sheet required to be served on every member of the Company or laid before a meetingof the members of the Company and shall state in a written report whether or nota.in their opinion the profit and loss account and balance sheet give a true and fair view respectively of the profit and loss for the period covered bythe accounts, and of the state of affairs of the Company at the end of that period; andb.all the information and explanations required by the auditors have been obtained.148.The report of the auditors shall be annexed to the accounts and shall be read at the meeting of members at which the accounts are laid before the Companyor shall be served on the members.149.Every auditor of the Company shall have a right of access at all times to the books of account and vouchers of the Company, and shall be entitled to requirefrom the directors and officers of the Company such information and explanations as he thinks necessary for the performance of the duties of the auditors.150.The auditors of the Company shall be entitled to receive notice of, and to attend any meetings of members of the Company at which the Company’s profitand loss account and balance sheet are to be presented.NOTICES151.Any notice, information or written statement to be given by the Company to members may be served in any way by which it can reasonably be expected toreach each member or by mail addressed to each member at the address shown in the share register.152.Any summons, notice, order, document, process, information or written statement to be served on the Company may be served by leaving it, or by sendingit by registered mail addressed to the Company, at its registered office, or by leaving it with, or by sending it by registered mail to, the registered agent ofthe Company.153.Service of any summons, notice, order, document, process, information or written statement to be served on the Company may be proved by showing thatthe summons, notice, order, document, process, information or written statement was delivered to the registered office or the registered agent of theCompany or that it was mailed in such time as to admit to its being delivered to the registered office or the registered agent of the Company in the normalcourse of delivery within the period prescribed for service and was correctly addressed and the postage was prepaid.23PENSION AND SUPERANNUATION FUNDS154.The directors may establish and maintain or procure the establishment and maintenance of any noncontributory or contributory pension orsuperannuation funds for the benefit of, and give or procure the giving of donations, gratuities, pensions, allowances or emoluments to, any persons whoare or were at any time in the employment or service of the Company or any company which is a subsidiary of the Company or is allied to or associated withthe Company or with any such subsidiary, or who are or were at any time directors or officers of the Company or of any such other company as aforesaid orwho hold or held any salaried employment or office in the Company or such other company, or any persons in whose welfare the Company or any suchother company as aforesaid is or has been at any time interested, and to the wives, widows, families and dependents of any such person, and may makepayments for or towards the insurance of any such persons as aforesaid, and may do any of the matters aforesaid either alone or in conjunction with anysuch other company as aforesaid. Subject always to the proposal being approved by resolution of members, a director holding any such employment oroffice shall be entitled to participate in and retain for his own benefit any such donation, gratuity, pension allowance or emolument.VOLUNTARY WINDING UP AND DISSOLUTION155.The Company may voluntarily commence to wind up and dissolve by a resolution of members but if the Company has never issued shares it mayvoluntarily commence to wind up and dissolve by resolution of directors.CONTINUATION156.The Company may by resolution of members or by a resolution passed unanimously by all directors of the Company continue as a company incorporatedunder the laws of a jurisdiction outside the British Virgin Islands in the manner provided under those laws.ARBITRATION157.Whenever any difference arises between the Company on the one hand and any of the members or their executors, administrators or assigns on the otherhand, touching the true intent and construction or the incidence or consequences of these Articles or of the Act, touching anything done or executed,omitted or suffered in pursuance of the Act or touching any breach or alleged breach or otherwise relating to the premises or to these Articles, or to anyAct or Ordinance affecting the Company or to any of the affairs of the Company such difference shall, unless the parties agree to refer the same to a singlearbitrator, be referred to 2 arbitrators one to be chosen by each of the parties to the difference and the arbitrators shall before entering on the referenceappoint an umpire.158.If either party to the reference makes default in appointing an arbitrator either originally or by way of substitution (in the event that an appointed arbitratorshall die, be incapable of acting or refuse to act) for 10 days after the other party has given him notice to appoint the same, such other party may appoint anarbitrator to act in the place of the arbitrator of the defaulting party.We, Portcullis TrustNet (BVI) Limited of Portcullis TrustNet Chambers, P.O. Box 3444, Road Town, Tortola, British Virgin Islands for the purpose of incorporating aBVI Business Company under the laws of the British Virgin Islands hereby sign these Articles of Association the 27th day of October, 2009.Incorporator/s/ Nicole WheatleyPortcullis TrustNet (BVI) LimitedPortcullis TrustNet ChambersP.O. Box 3444Road Town, TortolaBritish Virgin Islands(Sgd. Nicole Wheatley)24EX4.15 3 f20f2017ex415_luokung.htm EXCLUSIVE BUSINESS COOPERATION AGREEMENT BY AND BETWEEN ZHONGCHUAN TIANXIA INFORMATIONTECHNOLOGY (SHENZHEN) CO., LTD., AND BEIJING MOBILE VISION TECHNOLOGY CO., LTD., DATED AUGUST 31, 2015Exhibit 4.15独家业务合作协议Exclusive Business Cooperation Agreement本独家业务合作协议（下称“本协议”）由以下双方于年月日在中华人民共和国（下称“中国”）北京市签署。This Exclusive Business Cooperation Agreement (this “Agreement”) is made and entered into by and between the following parties on in Beijing, thePeople’s Republic of China (“China” or the “PRC”).甲方：中传天下信息科技（深圳）有限公司Party A: Zhongchuan Tianxia Information Technology (Shenzhen) Co., Ltd.地址：深圳市南山区高新中三道2号深圳软件园一期五栋401A Address: 401A, Building 5, Phase 1, Shenzhen Software Park, No.2 Gaoxin Zhongsan Road, Nanshan District, Shenzhen统一社会信用代码：91440300565701058R Uniform Social Credit Code: 91440300565701058R乙方：北京中传视讯科技有限公司Party B: Beijing Mobile Vision Technology Co., Ltd.地址：北京市朝阳区光华路9号SOHO3QLAB32Address: LAB32, SOHO3Q, No 9, Guanghua Road, Chaoyang District, Beijing统一社会信用代码：9111010576215249XMUniform Social Credit Code: 9111010576215249XM甲方和乙方以下各称为“一方”，统称为“双方”。Each of Party A and Party B shall be hereinafter referred to as a “Party” respectively, and as “Parties” collectively.1秘密文件Strictly Confidential鉴于：Whereas,1.甲方是一家在中国注册的外商独资企业，拥有丰富的技术研发和产业化推广相关的管理和投资经验，并提供相关的技术支持和咨询服务；Party A is a whollyforeignowned enterprise established in China, which has rich experience in technology research development and industrializationpromotion management and investment, and provides relevant technical support and consulting services;2.乙方是一家在中国成立的有限责任公司，经中国有关政府部门批准依法主要从事手机视频技术开发、内容制作及市场推广；Party B is a limited company in China, mainly engages in mobile video technology research, development, content creation, sale and related industrialpromotion as approved by the relevant governmental authorities in China;3.甲方同意利用其技术、人员和信息优势，在本协议期间向乙方提供有关手机视频技术开发、内容制作及市场推广以及未来扩大业务规模和业务范围时乙方所需的技术支持、技术咨询等相关服务，乙方同意接受甲方或其指定方按本协议条款的规定提供的各种服务。Party A is willing to provide Party B with technology supports and technology consulting services in connection with mobile video technology research,development, content creation, sale and related industrial promotion and such services in connection with Party B’s extension of business scale orbroadening of businesses during the term of this Agreement, utilizing its advantages in technology, human resources, and information, and Party B iswilling to accept such services provided by Party A or Party A's designee(s), each on the terms set forth herein.2秘密文件Strictly Confidential据此，甲方和乙方经协商一致，达成如下协议：Now, therefore, through mutual discussion, the Parties have reached the following agreements:1.服务提供Services Provided by Party A1.1按照本协议条款和条件，乙方在此委任甲方在本协议期间作为乙方的独家服务提供者向乙方提供全面的和手机视频技术开发、内容制作及市场推广相关以及未来扩大业务规模和业务范围时乙方所需的技术支持、业务支持和相关咨询服务，具体内容包括但不限于以下内容：Party B hereby appoints Party A as Party B's exclusive services provider to provide Party B with complete technical support, business supportand related consulting services in connection with mobile video technology research, development, content creation, sale and related industrialpromotion and such services in connection with Party B’s extension of business scale or broadening of businesses during the term of thisAgreement, in accordance with the terms and conditions of this Agreement, which may include but not limited to:1.1.1为乙方提供其手机视频技术开发、内容制作及市场推广业务所需的一切服务支持，为乙方提供相当于包括总经理、行政人员、管理人员、筹划部门、商业运营、人力资源、财务、会计以及与乙方业务相关的一切业务操作所需人员所能提供的服务内容；managing all aspects of Party B’s business of mobile video technology research, development, content creation, sale and relatedindustrial promotion. In this capacity, Party A will procure or engage for Party B the services of a general manager and other managementstaff, including but not limited to personnel responsible for all administration, operations, planning, business development, humanresources, finance, accounting and other operations related to the Business of Party B;3秘密文件Strictly Confidential1.1.2为乙方制定全部的商业计划、销售目标，并为优化执行该等商业计划设计和建立相应的系统及操作程序；developing all business plans and sales projections of Party B, and for developing and establishing systems and procedures for optimumexecution of the business plans;1.1.3为乙方申请手机视频技术及内容制作相关专利提供咨询服务和支持；consulting services and support in connection with Party B’s applying for mobile video technology related patents and content creation;1.1.4为乙方手机视频技术产业化的发展方向、规模、品牌提升提供咨询服务；consulting services in connection with the development directions, size and business brands promotion of Party B’s mobile videotechnology industrialization;4秘密文件Strictly Confidential1.1.5为乙方提供与业务相关的办公、生产和销售服务，为乙方租赁场所，建立业务相关的系统和程序，满足乙方的其他要求；procuring or obtaining for Party B all office, production and distribution services related to the Business. It shall procure or obtainappropriate leases, establish systems and procedures needed to operate the business, fulfill orders for services;1.1.6尽最大努力为乙方建立手机视频技术销售市场，根据甲方为乙方制定的商业计划及销售目标代表乙方获取客户订单，同时为乙方提供与业务相关的客户服务，建立向客户开具票据的程序和与会计相关的托收服务。using its best efforts to establish mobile video technology related marketing and other structures to obtain orders for services &products from customers on behalf of Party B in accordance with Party B’s business plans, sales projections and objectives (asdeveloped by Party A) and procure or obtain customer services required in connection with the Business. It shall also establishprocedures for invoicing customers, and establish collection services with respect to accounts;1.1.7就乙方的劳动用工方面提供咨询服务和支持，包括但不限于，组织实施对乙方业务人员、行政人员、管理人员等人员进行培训和考核，协助建立健全的人力资源管理制度和实现人力资源的良好配置；consulting services and support regarding labor system of Party B, including but without limitation to labor training and evaluation ofsales person, administrative staff and management person etc. and establishment of human resources management system to well;5秘密文件Strictly Confidential1.1.8提供乙方需要的客户数据统计、分析及相关数据库的建设和维护等咨询服务；providing Party B with compile and analysis of client data and consulting services of establishment and maintenance of data base;1.1.9提供乙方需要的软件和相关技术支持服务；providing software Party B requires and other technical support;1.1.10接受乙方委托，对乙方的手机视频技术研发和产业化推广业务经营进行指导和管理；guiding and management on Party B’s business of mobile video technology research and development and related industrial promotionoperation according to Party B’s commission;1.1.11当乙方业务规模发展或业务范围扩大需要时，购买乙方业务经营需要的设备；in the event of the demand of Party B’s development of business scale or broadening of businesses, purchase the equipments which itneeds for the operation of its business;1.1.12当乙方业务规模发展或业务范围扩大需要时，完成乙方项目中的全部或部分工作；in the event of the demand of Party B’s development of business scale or broadening of businesses, complete the work of Party B’sproject in whole or in party;6秘密文件Strictly Confidential1.1.13当乙方业务规模发展或业务范围扩大需要时，开发新技术；in the event of the demand of Party B’s development of business scale or broadening of businesses, develop new technology;1.1.14乙方委托甲方，且甲方接受委托提供的其他服务。other services Party B appoints Party A to provide and Party A agrees to provide.1.2乙方接受甲方的咨询和服务。乙方进一步同意，除非经甲方事先书面同意，在本协议期间，就本协议约定的服务或其他事宜，乙方不得直接或间接地从任何第三方获得任何与本协议相同或类似的咨询和/或服务，并不得与任何第三方就本协议所述事项建立任何类似的合作关系。双方同意，甲方可以指定其他方（该被指定方可以与乙方签署本协议第1.3条描述的某些协议）为乙方提供本协议约定的服务和/或支持。Party B agrees to accept all the consultations and services provided by Party A. Party B further agrees that unless with Party A's prior writtenconsent, during the term of this Agreement, Party B shall not directly or indirectly accept the same or any similar consultations and/or servicesprovided by any third party and shall not establish similar corporation relationship with any third party regarding the matters contemplated by thisAgreement. Party A may appoint other parties, who may enter into certain agreements described in Section 1.3 with Party B, to provide Party Bwith the consultations and/or services under this Agreement.7秘密文件Strictly Confidential1.3服务的提供方式Service Providing Methodology1.3.1双方同意在本协议有效期内，视情况而定，乙方可以与甲方或甲方指定的其他方进一步签订技术服务协议和/或咨询服务协议，对各项业务培训、技术服务、咨询服务的具体内容、方式、人员、收费等进行约定。Parties agree that during the term of this Agreement, where necessary, Party B may enter into further technical service agreements and/orconsulting service agreements with Party A or any other party designated by Party A, which shall provide the specific contents, manner,personnel, and fees for the specific technical services and consulting services.1.3.2为更好地履行本协议，双方同意，在甲方认为必要时，乙方应在本协议有效期内与甲方或甲方指定的其他方根据业务进展需要随时签署协议，由甲方或其指定方向乙方提供服务。To fulfill this Agreement, Parties agree that during the term of this Agreement, where Party A deems necessary, Party B shall enter intoagreements with Party A or any other party designated by Party A which shall set forth that Party A or any other party designated byParty A provide services to Party B based on the needs of the business of Party B.8秘密文件Strictly Confidential2.服务的价格和支付方式The Calculation and Payment of the Service Fees双方同意，就甲方提供的服务，乙方应向甲方支付服务费（“服务费”）。服务费不应低于乙方税后利润的80%。服务费应当按季支付；经甲方事先书面同意，服务费可以根据乙方的经营需要进行调整。Both Parties agree that, in consideration of the services provided by Party A, Party B shall pay Party A fees (the “Service Fees”), which shall not be lessthan 80% of Party B’s aftertax profits . The Service Fees shall be due and payable on a quarterly basis; upon the prior written consent by Party A, the rateof Service Fees may be adjusted pursuant to the operational needs of Party B.3.知识产权和保密条款Intellectual Property Rights and Confidentiality Clauses3.1在中国法律允许的范围内，甲方对履行本协议而产生或创造的任何权利、所有权、权益和所有知识产权包括但不限于著作权、专利权、专利申请权、软件、技术秘密、商业机密及其他均享有独占的和排他的权利和利益。乙方须签署所有适当的文件，采取所有适当的行动，递交所有的文件和/或申请，提供所有适当的协助，以及做出所有其他依据甲方的自行决定认为是必要的行为，以将任何对该等知识产权的所有权、权利和权益赋予甲方，和/或完善对甲方此等知识产权权利的保护。To the extent permitted under the PRC laws, Party A shall have exclusive and proprietary rights and interests in all rights, ownership, interests andintellectual properties arising out of or created during the performance of this Agreement, including but not limited to copyrights, patents, patentapplications, software, technical secrets, trade secrets and others. Party B shall execute all appropriate documents, take all appropriate actions,submit all filings and/or applications, render all appropriate assistance and otherwise conduct whatever is necessary deemed as by Party A in itssole discretion for the purposes of vesting any ownership, right or interest of any such intellectual property rights in Party A, and/or perfectingthe protections for any such intellectual property rights in Party A.9秘密文件Strictly Confidential3.2双方承认及确定有关本协议、本协议内容，以及彼此就准备或履行本协议而交换的任何口头或书面资料均被视为保密信息。双方应当对所有该等保密信息予以保密，而在未得到另一方书面同意前，不得向任何第三者披露任何保密信息，惟下列信息除外：(a)公众人士知悉或将会知悉的任何信息（惟并非由接受保密信息之一方擅自向公众披露）；(b)根据适用法律法规、股票交易规则、或政府部门或法院的命令而所需披露之任何信息；或(c)由任何一方就本协议所述交易而需向其股东、投资者、法律或财务顾问披露之信息，而该股东、法律或财务顾问亦需遵守与本条款相类似之保密责任。如任何一方工作人员或聘请机构的泄密均视为该方的泄密，需依本协议承担违约责任。无论本协议以任何理由终止，本条款仍然生效。The Parties acknowledge that the existence and the terms of this Agreement and any oral or written information exchanged between the Parties inconnection with the preparation and performance this Agreement are regarded as confidential information. Each Party shall maintainconfidentiality of all such confidential information, and without obtaining the written consent of the other Party, it shall not disclose any relevantconfidential information to any third parties, except for the information that: (a) is or will be in the public domain (other than through the receivingParty’s unauthorized disclosure); (b) is under the obligation to be disclosed pursuant to the applicable laws or regulations, rules of any stockexchange, or orders of the court or other government authorities; or (c) is required to be disclosed by any Party to its shareholders, investors,legal counsels or financial advisors regarding the transaction contemplated hereunder, provided that such shareholders, investors, legal counselsor financial advisors shall be bound by the confidentiality obligations similar to those set forth in this Section. Disclosure of any confidentialinformation by the staff members or agencies hired by any Party shall be deemed disclosure of such confidential information by such Party, whichParty shall be held liable for breach of this Agreement. This Section shall survive the termination of this Agreement for any reason.3.3双方同意，不论本协议是否变更、解除或终止，本条款将持续有效。The Parties agree that this Section shall survive changes to, and rescission or termination of, this Agreement.4.陈述和保证Representations and Warranties4.1甲方陈述和保证如下：Party A hereby represents and warrants as follows:4.1.1甲方是按照中国法律合法注册并有效存续的外商独资企业。Party A is a whollyforeignowned enterprise legally registered and validly existing in accordance with the laws of China.10秘密文件Strictly Confidential4.1.2甲方已采取必要的公司行为，获得必要的授权，并取得第三方和政府部门的同意及批准（若需）以签署和履行本协议；甲方对本协议的签署和履行并不违反法律法规的明确规定。Party A has taken all necessary corporate actions, obtained all necessary authorization and the consent and approval from third partiesand government agencies (if any) for the execution and performance of this Agreement. Party A’s execution and performance of thisAgreement do not violate any explicit requirements under any law or regulation binding on Party A.4.1.3本协议构成对其合法、有效、有约束力并依本协议之条款对其强制执行的义务。This Agreement constitutes Party A's legal, valid and binding obligations, enforceable in accordance with its terms.4.2乙方陈述和保证如下：Party B hereby represents and warrants as follows:4.2.1乙方是按照中国法律合法登记且有效存续的有限责任公司，乙方根据政府部门的批准和许可从事手机视频技术开发、内容制作和产业化市场推广的经营。Party B is a limited company legally registered and validly existing in accordance with the laws of China, engages in mobile videotechnology research, development, content creation, sale and related industrial promotion pursuant to governmental approvals andpermits;11秘密文件Strictly Confidential4.2.2乙方已采取必要的行为，获得必要的授权，并取得第三方和政府部门的同意及批准（若需）以签署和履行本协议；乙方对本协议的签署和履行并不违反法律法规的明确规定。Party B has taken all necessary actions, obtained all necessary authorization and the consent and approval from third parties andgovernment agencies (if any) for the execution and performance of this Agreement. Party B’s execution and performance of thisAgreement do not violate any explicit requirements under any law or regulation binding on Party B.4.2.3本协议构成对其合法、有效、有约束力并依本协议之条款对其强制执行的义务。This Agreement constitutes Party B's legal, valid and binding obligations, and shall be enforceable against it.5.生效和有效期Effectiveness and Term5.1本协议于文首标明的协议日期签署并同时生效。除非依本协议或双方其他协议的约定而提前终止，本协议有效期为20年，但甲、乙双方应自本协议签署后，每3个月对本协议的内容做一次审查，以决定是否需要根据当时的情况对本协议作出相应修改和补充。This Agreement is executed on the date first above written and shall take effect as of such date. Unless earlier terminated in accordance with theprovisions of this Agreement or relevant agreements separately executed between the Parties, the term of this Agreement shall be 20 years. Afterthe execution of this Agreement, both Parties shall review this Agreement every 3 months to determine whether to amend or supplement theprovisions in this Agreement based on the actual circumstances at that time.12秘密文件Strictly Confidential5.2协议期满前，经甲方书面确认，本协议可以延期。延期的期限由甲方决定，乙方必须无条件地同意该延期。The term of this Agreement may be extended if confirmed in writing by Party A prior to the expiration thereof. The extended term shall bedetermined by Party A, and Party B shall accept such extended term unconditionally.6.终止Termination6.1除非依据本协议续期，本协议于到期之日终止。Unless renewed in accordance with the relevant terms of this Agreement, this Agreement shall be terminated upon the date of expiration hereof.6.2本协议有效期内，除非甲方对乙方有重大过失或存在欺诈行为，乙方不得提前终止本协议。尽管如此，甲方可在任何时候通过提前30天向乙方发出书面通知的方式终止本协议。During the term of this Agreement, unless Party A commits gross negligence, or a fraudulent act, against Party B, Party B shall not terminate thisAgreement prior to its expiration date. Nevertheless, Party A shall have the right to terminate this Agreement upon giving 30 days' prior writtennotice to Party B at any time.6.3在本协议终止之后，双方在第3、7和8条项下的权利和义务将继续有效。The rights and obligations of the Parties under Articles 3, 7 and 8 shall survive the termination of this Agreement.13秘密文件Strictly Confidential7.适用法律和争议解决Governing Law and Resolution of Disputes7.1本协议的订立、效力、解释、履行、修改和终止以及争议的解决适用中国的法律。The execution, effectiveness, construction, performance, amendment and termination of this Agreement and the resolution of disputes hereundershall be governed by the laws of China.7.2因解释和履行本协议而发生的任何争议，本协议双方应首先通过友好协商的方式加以解决。如果在一方向其他方发出要求协商解决的书面通知后30天之内争议仍然得不到解决，则任何一方均可将有关争议提交给中国国际经济贸易仲裁委员会，由该会按照其仲裁规则仲裁解决。仲裁应在北京进行，使用之语言为中文。仲裁裁决是终局性的，对各方均有约束力。In the event of any dispute with respect to the construction and performance of this Agreement, the Parties shall first resolve the dispute throughfriendly negotiations. In the event the Parties fail to reach an agreement on the dispute within 30 days after either Party's request to the otherParties for resolution of the dispute through negotiations, either Party may submit the relevant dispute to the China International Economic andTrade Arbitration Commission for arbitration, in accordance with its Arbitration Rules. The arbitration shall be conducted in Beijing, and thelanguage used in arbitration shall be Chinese. The arbitration award shall be final and binding on all Parties.14秘密文件Strictly Confidential7.3因解释和履行本协议而发生任何争议或任何争议正在进行仲裁时，除争议的事项外，本协议双方仍应继续行使各自在本协议项下的其他权利并履行各自在本协议项下的其他义务。Upon the occurrence of any disputes arising from the construction and performance of this Agreement or during the pending arbitration of anydispute, except for the matters under dispute, the Parties to this Agreement shall continue to exercise their respective rights under this Agreementand perform their respective obligations under this Agreement.8.补偿Indemnification就甲方根据本协议向乙方提供的咨询和服务内容所产生或引起的针对甲方的诉讼、请求或其他要求而招致的任何损失、损害、责任或费用都应由乙方补偿给甲方，以使甲方不受损害，除非该损失、损害、责任或费用是因甲方的重大过失或故意而产生的。Party B shall indemnify and hold harmless Party A from any losses, injuries, obligations or expenses caused by any lawsuit, claims or other demandsagainst Party A arising from or caused by the consultations and services provided by Party A to Party B pursuant this Agreement, except where suchlosses, injuries, obligations or expenses arise from the gross negligence or willful misconduct of Party A.15秘密文件Strictly Confidential9.通知Notices9.1本协议项下要求或发出的所有通知和其他通信应通过专人递送、挂号邮寄、邮资预付或快递服务或传真的方式发到该方下列地址。每一通知还应再以电子邮件送达。该等通知视为有效送达的日期按如下方式确定：All notices and other communications required or permitted to be given pursuant to this Agreement shall be delivered personally or sent byregistered mail, postage prepaid, by a courier service or by facsimile transmission to the address of such Party set forth below. A confirmationcopy of each notice shall also be sent by email. The dates on which notices shall be deemed to have been effectively given shall be determined asfollows:9.1.1通知如果是以专人递送、快递服务或挂号邮寄、邮资预付发出的，则以于设定为通知的地址在接收或拒收之日为有效送达日。Notices given by personal delivery, by courier service or by registered mail, postage prepaid, shall be deemed effectively given on thedate of receipt or refusal at the address specified for notices.9.1.2通知如果是以传真发出的，则以成功传送之日为有效送达日（应以自动生成的传送确认信息为证）。Notices given by facsimile transmission shall be deemed effectively given on the date of successful transmission (as evidenced by anautomatically generated confirmation of transmission).16秘密文件Strictly Confidential9.2为通知的目的，双方地址如下：For the purpose of notices, the addresses of the Parties are as follows:甲方：中传天下信息科技（深圳）有限公司Party A: Zhongchuan Tianxia Information Technology (Shenzhen) Co., Ltd.地址：深圳市南山区高新中三道2号深圳软件园一期五栋401AAddress:401A, Building 5, Phase 1, Shenzhen Software Park, No.2 Gaoxin Zhongsan Road, Nanshan District, Shenzhen收件人：洪婷Attn: Hong Ting乙方：北京中传视讯科技有限公司Party B: Beijing Mobile Vision Technology Co., Ltd地址：北京市朝阳区光华路9号SOHO3QLAB32Address: LAB32, SOHO3Q, No 9, Guanghua Road, Chaoyang District, Beijing.收件人：宋雪松Attn.: Song Xuesong9.3任何一方可按本条规定随时给另一方发出通知来改变其接收通知的地址。Any Party may at any time change its address for notices by a notice delivered to the other Party in accordance with the terms hereof.17秘密文件Strictly Confidential10.协议的转让Assignment10.1乙方不得将其在本协议项下的权利与义务转让给第三方，除非事先征得甲方的书面同意。Without Party A's prior written consent, Party B shall not assign its rights and obligations under this Agreement to any third party.10.2乙方在此同意，甲方可以在其需要时向其他第三方转让其在本协议项下的权利和义务，并在该等转让发生时甲方仅需向乙方发出书面通知，并且无需再就该等转让征得乙方的同意。Party B agrees that Party A may assign its obligations and rights under this Agreement to any third party upon a prior written notice to Party Bbut without the consent of Party B.11.协议的分割性Severability如果本协议有任何一条或多条规定根据任何法律或法规在任何方面被裁定为无效、不合法或不可执行，本协议其余规定的有效性、合法性或可执行性不应因此在任何方面受到影响或损害。双方应通过诚意磋商，争取以法律许可以及双方期望的最大限度内有效的规定取代那些无效、不合法或不可执行的规定，而该等有效的规定所产生的经济效果应尽可能与那些无效、不合法或不能强制执行的规定所产生的经济效果相似。In the event that one or several of the provisions of this Agreement are found to be invalid, illegal or unenforceable in any aspect in accordance with anylaws or regulations, the validity, legality or enforceability of the remaining provisions of this Agreement shall not be affected or compromised in any aspect.The Parties shall strive in good faith to replace such invalid, illegal or unenforceable provisions with effective provisions that accomplish to the greatestextent permitted by law and the intentions of the Parties, and the economic effect of such effective provisions shall be as close as possible to the economiceffect of those invalid, illegal or unenforceable provisions.18秘密文件Strictly Confidential12.协议的修改、补充Amendments and Supplements双方可以书面协议方式对本协议作出修改和补充。经过双方签署的有关本协议的修改协议和补充协议是本协议组成部分，具有与本协议同等的法律效力。Any amendments and supplements to this Agreement shall be in writing. The amendment agreements and supplementary agreements that have beensigned by the Parties and that relate to this Agreement shall be an integral part of this Agreement and shall have the same legal validity as this Agreement.13.语言和副本Language and Counterparts本协议以中文和英文书就，一式二份，甲乙双方各持一份，具有同等效力；中英文版本如有冲突，应以中文版为准。This Agreement is written in both Chinese and English language in two copies, each Party having one copy with equal legal validity; in case there is anyconflict between the Chinese version and the English version, the Chinese version shall prevail.本页其余部分刻意留为空白The Remainder of this page is intentionally left blank19秘密文件Strictly Confidential有鉴于此，双方已使得经其授权的代表于文首所述日期签署了本独家业务合作协议并即生效，以昭信守。IN WITNESS WHEREOF, the Parties have caused their authorized representatives to execute this Exclusive Business Cooperation Agreement as of thedate first above written.甲方：中传天下信息科技（深圳）有限公司（盖章）Party A: Zhongchuan Tianxia Information Technology (Shenzhen) Co., Ltd.(Seal)签字：By: /s/ Hong Ting 姓名：洪婷Name: Hong Ting职务：总经理Title: General Manager20秘密文件Strictly Confidential有鉴于此，双方已使得经其授权的代表于文首所述日期签署了本独家业务合作协议并即生效，以昭信守。IN WITNESS WHEREOF, the Parties have caused their authorized representatives to execute this Exclusive Business Cooperation Agreement as of thedate first above written. 乙方：北京中传视讯科技有限公司（盖章）Party B: Beijing Mobile Vision Technology Co., Ltd. (Seal)签字：By: /s/ Song Xuesong 姓名：宋雪松Name: Song Xuesong职务：董事长Title: Chairman of the Board21秘密文件Strictly ConfidentialEX4.16 4 f20f2017ex416_luokung.htm EXCLUSIVE OPTION AGREEMENT BY AND AMONG ZHONGCHUAN TIANXIA INFORMATION TECHNOLOGY(SHENZHEN) CO., LTD., XUESONG SONG, WEILI CHEN, PING WANG, DONGLAI LIU, AND BEIJING MOBILE VISION TECHNOLOGY CO., LTD., DATEDAUGUST 31, 2015Exhibit 4.16独家购买权协议Exclusive Option Agreement本独家购买权协议 (下称“本协议”) 由以下各方于年月日在中华人民共和国（下称“中国”）北京签订：This Exclusive Option Agreement (this “Agreement”) is executed by and among the Parties below as of in Beijing, the People’s Republic of China (the“China” or “PRC”):甲方：中传天下信息科技（深圳）有限公司，一家依照中国法律设立和存在的外商独资企业，地址为深圳市南山区高新中三道2号深圳软件园一期五栋401A；Party A:Zhongchuan Tianxia Information Technology (Shenzhen) Co., Ltd., a whollyforeignowned enterprise organized and existing under the laws of China,with its address at 401A, Building 5, Phase 1, Shenzhen Software Park, No.2 Gaoxin Zhongsan Road, Nanshan District, Shenzhen.乙方：Party B:a)宋雪松Song Xuesong身份证号码:120112196809040417ID Card No.:120112196809040417住所：天津市河西区广东路中裕园33702Address:Zhongyu Yuan 33702, Guangdong Road, Hexi District, Tianjinb)陈蔚力Chen Weili身份证号码:120106197309240516ID Card No.:120106197309240516住所：广东省深圳市宝安区宝城上川路15号Address:Baocheng Shangchuan Road 15, Baoan District, Shenzhen, Guangdong1秘密文件Strictly Confidentialc)王平Wang Ping身份证号码:35020319691030401xID Card No.:35020319691030401x住所：广东省深圳市南山区高新南环路36号彩虹之岸12栋4AAddress:Caihong Zhi’an Building No.12 Suite 4A, Gaoxin Nanhuan Road 36, Nanshan District, Shenzhen, Guangdongd)刘东来Liu Donglai身份证号码:120107196810103912ID Card No.:120107196810103912住所：天津市和平区南京路诚基经贸中心1号楼2门1702号Address:No 1702, Door 2, Build 1, Chengji Economic and Trade Centre, Nanjing Road, Heping District, Tianjin.丙方：北京中传视讯科技有限公司，一家依照中国法律设立和存在的有限责任公司，地址为北京市朝阳区光华路9号SOHO3QLAB32，统一社会信用代码为9111010576215249XM；Party C:Beijing Mobile Vision Technology Co., Ltd., a limited company duly registered in China, with its address at LAB32, SOHO3Q, No 9, Guanghua Road,Chaoyang District, Beijing and its uniform social credit code of 9111010576215249XM.2秘密文件Strictly Confidential在本协议中，甲方、乙方和丙方以下各称“一方”，合称“各方”。In this Agreement, each of Party A, Party B and Party C shall be referred to as a “Party” respectively, and they shall be collectively referred to as the“Parties”.鉴于，乙方系丙方股东并合计持有丙方100%股权，乙方将按本协议之条款授予甲方购买全部或部分该股权的权利。Whereas, Party B are the shareholders of Party C and jointly hold 100% of the equity interest in Party C, and Party B are willing to grant to Party A the rightto acquire such equity interest, in whole or in part, on the terms herein.现各方协商一致，达成如下协议：Now therefore, upon mutual discussion and negotiation, the Parties have reached the following agreement:1.股权买卖Sale and Purchase of Equity Interest1.1授予权利Option Granted乙方在此不可撤销地授予甲方在中国法律允许的前提下，按照甲方自行决定的行使步骤，并按照本协议第1.3条所述的价格，随时一次或多次从乙方购买或指定一人或多人(“被指定人”)从乙方购买其目前和将来所持有的丙方的全部或部分股权（无论乙方出资额和/或持股比例将来是否发生变化）的一项不可撤销的专有权(“股权购买权”)。除甲方和被指定人外，任何第三人均不得享有股权购买权或其他与乙方股权有关的权利。丙方特此同意乙方向甲方授予股权购买权。本款及本协议所规定的“人”指个人、公司、合营企业、合伙、企业、信托或非公司组织。Party B hereby irrevocably grant Party A an irrevocable and exclusive right to purchase, or designate one or more persons (each, a “Designee”) topurchase the equity interests in Party C now and in the future held by Party B (regardless whether Party B’s capital contribution amount and/orpercentage of shareholding will be changed in the future) once or at multiple times at any time in part or in whole at Party A’s sole and absolutediscretion to the extent permitted by Chinese laws and at the price described in Section 1.3 herein (such right being the “Equity Interest PurchaseOption”). Except for Party A and the Designee(s), no other person shall be entitled to the Equity Interest Purchase Option or other rights withrespect to the equity interests of Party B. Party C hereby agrees to the grant by Party B of the Equity Interest Purchase Option to Party A. Theterm “person” as used herein shall refer to individuals, corporations, partnerships, partners, enterprises, trusts or noncorporate organizations.3秘密文件Strictly Confidential1.2行使步骤Steps for Exercise of Equity Interest Purchase Option甲方行使其股权购买权以符合中国法律和法规的规定为前提。甲方行使股权购买权时，应向乙方发出书面通知(“股权购买通知”)，股权购买通知应载明以下事项：(a)甲方关于行使股权购买权的决定；(b)甲方拟从乙方购买的股权份额(“被购买的股权”)；和(c)被购买的股权的买入日期。Subject to the provisions of the laws and regulations of China, Party A may exercise the Equity Interest Purchase Option by issuing a writtennotice to Party B (the “Equity Interest Purchase Option Notice”), specifying: (a) Party A’s decision to exercise the Equity Interest PurchaseOption; (b) the portion of equity interests to be purchased from Party B (the “Optioned Interests”); and (c) the date for purchasing the OptionedInterests.1.3股权买价Equity Interest Purchase Price被购买的股权的买价（“股权买价”）应是行权当时中国法律允许的最低价格。乙方收到该股权对价后，应当提供给丙方与该股权买价相同金额的借款，该借款的期限为20年，且为无息。乙方应当在该借款期限届满时就该借款放弃对丙方的债权。The purchase price of the Optioned Interests (the “Equity Interest Purchase Price”) shall be the lowest price permitted by the laws of China. Afterreceiving the Equity Interest Purchase Price, Party B shall make an interestfree loan equivalent to the amount of Equity Interest Purchase Price toParty C, of which term is 20 years. Each member of Party B shall give up his(her) creditor’s right when the loan term expires.4秘密文件Strictly Confidential1.4转让被购买股权Transfer of Optioned Interests甲方每次行使股权购买权时：For each exercise of the Equity Interest Purchase Option:1.4.1乙方应责成丙方及时召开股东会会议，在该会议上，应通过批准乙方向甲方和/或被指定人转让被购买的股权的决议；Party B shall cause Party C to promptly convene a shareholders meeting, at which a resolution shall be adopted approving Party B’stransfer of the Optioned Interests to Party A and/or the Designee(s);1.4.2乙方应就其向甲方和/或被指定人转让被购买股权取得丙方其他股东同意该转让并放弃优先购买权的书面声明。Party B shall obtain written statements from the other shareholder of Party C giving consent to the transfer of the equity interest to PartyA and/or the Designee(s) and waiving any right of first refusal related thereto.1.4.3乙方应与甲方和/或(在适用的情况下)被指定人按照本协议及股权购买通知的规定，为每次转让签订股权转让协议；Party B shall execute a share transfer contract with respect to each transfer with Party A and/or each Designee (whichever is applicable),in accordance with the provisions of this Agreement and the Equity Interest Purchase Option Notice regarding the Optioned Interests;5秘密文件Strictly Confidential1.4.4有关方应签署所有其他所需协议、协议或文件，取得全部所需的政府批准和同意，并采取所有所需行动，在不附带任何担保权益的情况下，将被购买的股权的有效所有权转移给甲方和/或被指定人并使甲方和/或被指定人成为被购买的股权的登记在册所有人。为本款及本协议的目的，“担保权益”包括担保、抵押、第三方权利或权益，任何购股权、收购权、优先购买权、抵销权、所有权扣留或其他担保安排等；但为了明确起见，不包括在本协议、乙方股权质押协议项下产生的任何担保权益。本款及本协议所规定的“乙方股权质押协议”指甲方、乙方和丙方于本协议签署之日签订的股权质押协议，根据股权质押协议，乙方为担保丙方能履行丙方与甲方签订的独家业务合作协议项下的义务，而向甲方质押其在丙方的全部乙方股权。The relevant Parties shall execute all other necessary contracts, agreements or documents, obtain all necessary government licenses andpermits and take all necessary actions to transfer valid ownership of the Optioned Interests to Party A and/or the Designee(s),unencumbered by any security interests, and cause Party A and/or the Designee(s) to become the registered owner(s) of the OptionedInterests. For the purpose of this Section and this Agreement, “security interests” shall include securities, mortgages, third party’s rightsor interests, any stock options, acquisition right, right of first refusal, right to offset, ownership retention or other security arrangements,but shall be deemed to exclude any security interest created by this Agreement and Party B’s Equity Interest Pledge Agreement. “PartyB’s Equity Interest Pledge Agreement” as used in this Section and this Agreement shall refer to the Equity Interest Pledge Agreementexecuted by and among Party A, Party B and Party C on the date of this Agreement, whereby Party B pledge all of their equity interests inParty C to Party A, in order to guarantee Party C’s performance of its obligations under the Exclusive Business Corporation Agreementexecuted by and between Party C and Party A.6秘密文件Strictly Confidential2.知识产权独家购买权Exclusive Option regarding the Intellectual Property Rights2.1本协议签订之日起，若乙方拟转让、出售或以其他方式处置（任一处置方式以下简称“转让”）其拥有或持有的全部或部分知识产权（以下称“知识产权”，定义见第2.4条），甲方有权独家购买该等知识产权。From the date hereof, if Party B proposes to transfer, sell or dispose of (each, a “transfer”) all or any part of the intellectual property rights ownedor held by Party B (“IPR”), Party A shall have exclusive option.2.2若乙方有意转让全部或部分知识产权，应事先向甲方发出书面通知(“转让通知”)，转让通知应载明以下事项：(a) 乙方关于转让知识产权的意向；(b) 乙方拟转让的知识产权清单(“拟转让知识产权”)及转让的价格和其他条件。转让通知视为乙方向甲方发出的一份要约，按照该要约，乙方同意按转让通知中指定的价格条件向甲方转让全部或部分拟转让知识产权。Prior to Party B proposes to transfer all or any part of its IPR, Party B shall give Party A a written notice (“Transfer Notice”), which shall specify (a)Party B’s intention to make the transfer; (b) the list of IPR to be transferred (“Offered IPR”) and the consideration and other conditions uponwhich the transfer is to be made. The Transfer Notice constitutes Party B’s offer given to Party A, pursuant to which, Party B agrees to transfer allor any part of its Offered IPR to Party A based on the same conditions described in the Transfer Notice.7秘密文件Strictly Confidential2.3甲方收到转让通知后，有权在30日内选择按照转让通知中列明的转让价格和条件购买拟转让知识产权。如果甲方行使其独家购买权，双方应于甲方收到转让通知后45日内签订有关的知识产权转让协议，乙方应办理法律规定的知识产权转让的批准和登记手续。Party A shall have an option for a period of 30 days from Party A’s receipt of the Transfer Notice to elect to purchase the Offered IPR at the sameprice and subject to the same conditions as described in the Transfer Notice. If Party A decides to exercise its exclusive option, the parties shallenter into relevant IPR transfer agreement within 45 days upon Party A’s receipt of the Transfer Notice and Party B is responsible to complete allrelated approvals and registrations formalities as prescribed by the PRC law.2.4本协议第2条所称“知识产权”指任何知识产权，包括但不限于著作权、专利权、专利申请权、商标、域名、软件、专有技术，并包括前述知识产权申请权利以及登记注册的权利，以及其他所有与前述知识产权有关的权利和权益。The “IPR” referred to in this Article 2 means any intellectual property rights, including, without limitations, copyrights, patents, patentapplications, trademarks, domain names, software and knowhow together with (a) all rights to apply for or register any of the foregoing and (b) allother rights and interests to any of the foregoing.8秘密文件Strictly Confidential3.承诺Covenants3.1有关丙方的承诺Covenants regarding Party C乙方（作为丙方的股东）和丙方在此承诺：Party B (as the shareholders of Party C) and Party C hereby covenant as follows:3.1.1未经甲方的事先书面同意，不以任何形式补充、更改或修改丙方公司章程文件，增加或减少其注册资本，或以其他方式改变其注册资本结构；Without the prior written consent of Party A, they shall not in any manner supplement, change or amend the articles of association andbylaws of Party C, increase or decrease its registered capital, or change its structure of registered capital in other manners;3.1.2按照良好的财务和商业标准及惯例，保持其公司的存续，审慎地及有效地经营其业务和处理事务；They shall maintain Party C’s corporate existence in accordance with good financial and business standards and practices by prudentlyand effectively operating its business and handling its affairs;3.1.3未经甲方的事先书面同意，不在本协议签署之日起的任何时间出售、转让、抵押或以其他方式处置丙方的任何资产、业务或收入的合法或受益权益，或允许在其上设置任何其他担保权益；Without the prior written consent of Party A, they shall not at any time following the date hereof, sell, transfer, mortgage or dispose of inany manner any assets of Party C or legal or beneficial interest in the business or revenues of Party C, or allow the encumbrance thereonof any security interest;3.1.4未经甲方的事先书面同意，不发生、继承、保证或容许存在任何债务，但(i)正常或日常业务过程中产生而不是通过借款方式产生的债务；和(ii)已向甲方披露和得到甲方书面同意的债务除外；Without the prior written consent of Party A, they shall not incur, inherit, guarantee or suffer the existence of any debt, except for (i)debts incurred in the ordinary course of business other than through loans; and (ii) debts disclosed to Party A for which Party A’swritten consent has been obtained;9秘密文件Strictly Confidential3.1.5一直在正常业务过程中经营所有业务，以保持丙方的资产价值，不进行任何足以影响其经营状况和资产价值的作为/不作为；They shall always operate all of Party C’s businesses during the ordinary course of business to maintain the asset value of Party C andrefrain from any action/omission that may affect Party C’s operating status and asset value;3.1.6未经甲方的事先书面同意，不得让丙方签订任何重大协议，但在正常业务过程中签订的协议除外(就本段而言，如果一份协议的价值超过【人民币10万元】，即被视为重大协议)；Without the prior written consent of Party A, they shall not cause Party C to execute any major contract, except the contracts in theordinary course of business (for purpose of this subsection, a contract with a value exceeding RMB 100,000 shall be deemed a majorcontract);3.1.7未经甲方的事先书面同意，丙方不得向任何人提供贷款或信贷；Without the prior written consent of Party A, they shall not cause Party C to provide any person with any loan or credit;3.1.8应甲方要求，向其提供所有关于丙方的营运和财务状况的资料；They shall provide Party A with information on Party C’s business operations and financial condition at Party A’s request;10秘密文件Strictly Confidential3.1.9如甲方提出要求，丙方应从甲方接受的保险公司处购买和持有有关其资产和业务的保险，该保险的金额和险种应与经营类似业务的公司一致；If requested by Party A, they shall procure and maintain insurance in respect of Party C’s assets and business from an insurance carrieracceptable to Party A, at an amount and type of coverage typical for companies that operate similar businesses;3.1.10未经甲方的事先书面同意，丙方不得与任何人合并或联合，或对任何人进行收购或投资；Without the prior written consent of Party A, they shall not cause or permit Party C to merge, consolidate with, acquire or invest in anyperson;3.1.11将发生的或可能发生的与丙方资产、业务或收入有关的诉讼、仲裁或行政程序立即通知甲方；They shall immediately notify Party A of the occurrence or possible occurrence of any litigation, arbitration or administrative proceedingsrelating to Party C’s assets, business or revenue;3.1.12为保持丙方对其全部资产的所有权，签署所有必要或适当的文件，采取所有必要或适当的行动和提出所有必要或适当的控告或对所有索偿进行必要和适当的抗辩；To maintain the ownership by Party C of all of its assets, they shall execute all necessary or appropriate documents, take all necessary orappropriate actions and file all necessary or appropriate complaints or raise necessary and appropriate defenses against all claims;11秘密文件Strictly Confidential3.1.13未经甲方事先书面同意，不得以任何形式派发股息予各股东，但一经甲方要求，丙方应立即将其所有可分配利润全部立即分配给其各股东；及Without the prior written consent of Party A, they shall ensure that Party C shall not in any manner distribute dividends to itsshareholders, provided that upon Party A’s written request, Party C shall immediately distribute all distributable profits to itsshareholders; and3.1.14根据甲方的要求，委任由其指定的任何人士出任丙方的董事和/或执行董事。At the request of Party A, they shall appoint any persons designated by Party A as the director and/or executive director of Party C.3.2乙方和丙方的承诺Covenants of Party B and Party C乙方承诺：Party B hereby covenant as follows:3.2.1未经甲方的事先书面同意，不出售、转让、抵押或以其他方式处置其拥有的丙方的股权的合法或受益权益，或允许在其上设置任何其他担保权益，但根据乙方签署的《股权质押协议》在该股权上设置的质押则除外；Without the prior written consent of Party A, Party B shall not sell, transfer, mortgage or dispose of in any other manner any legal orbeneficial interest in the equity interests in Party C held by Party B, or allow the encumbrance thereon of any security interest, except forthe pledge placed on these equity interests in accordance with Party B’s Equity Interest Pledge Agreement;12秘密文件Strictly Confidential3.2.2促使丙方股东会和/或执行董事不批准在未经甲方的事先书面同意的情况下，出售、转让、抵押或以其他方式处置任何乙方持有之丙方的股权的合法权益或受益权，或允许在其上设置任何其他担保权益，但批准根据乙方签署的《股权质押协议》在乙方股权上设置的质押则除外；Party B shall cause the shareholders’ meeting and/or the executive director of Party C not to approve the sale, transfer, mortgage ordisposition in any other manner of any legal or beneficial interest in the equity interests in Party C held by Party B, or allow theencumbrance thereon of any security interest, without the prior written consent of Party A, except for the pledge placed on these equityinterests in accordance with Party B’s Equity Interest Pledge Agreement;3.2.3未经甲方的事先书面同意的情况下，对于丙方与任何人合并或联合，或对任何人进行收购或投资，乙方将促成丙方股东会或执行董事不予批准；Party B shall cause the shareholders’ meeting or the executive director of Party C not to approve the merger or consolidation with anyperson, or the acquisition of or investment in any person, without the prior written consent of Party A;3.2.4将发生的或可能发生的任何关于其所拥有的股权的诉讼、仲裁或行政程序立即通知甲方；Party B shall immediately notify Party A of the occurrence or possible occurrence of any litigation, arbitration or administrativeproceedings relating to the equity interests in Party C held by Party B;13秘密文件Strictly Confidential3.2.5促使丙方股东会或执行董事表决赞成本协议规定的被购买的股权的转让并应甲方之要求采取其他任何行动；Party B shall cause the shareholders’ meeting or the executive director of Party C to vote their approval of the transfer of the OptionedInterests as set forth in this Agreement and to take any and all other actions that may be requested by Party A;3.2.6为保持其对股权的所有权，签署所有必要或适当的文件，采取所有必要或适当的行动和提出所有必要或适当的控告或对所有索偿进行必要和适当的抗辩；To the extent necessary to maintain Party B’s ownership in Party C, Party B shall execute all necessary or appropriate documents, take allnecessary or appropriate actions and file all necessary or appropriate complaints or raise necessary and appropriate defenses against allclaims;3.2.7应甲方的要求，委任由其指定的任何人士出任丙方的董事和/或执行董事；Party B shall appoint any designee of Party A as the director and/or executive director of Party C, at the request of Party A;3.2.8经甲方随时要求，应向其指定的代表在任何时间无条件地根据本协议的股权购买权立即转让其股权，并放弃其对其他现有股东进行上述股权转让所享有的优先购买权（如有的话）；和At the request of Party A at any time, Party B shall promptly and unconditionally transfer its equity interests in Party C to Party A’sDesignee(s) in accordance with the Equity Interest Purchase Option under this Agreement, and Party B hereby waives its right of firstrefusal (if any) to the share transfer by the other existing shareholder of Party C (if any); and14秘密文件Strictly Confidential3.2.9严格遵守本协议及各方共同或分别签订的其他协议的各项规定，切实履行该等协议项下的各项义务，并不进行任何足以影响该等协议的有效性和可执行性的作为/不作为。如果乙方对于本协议项下或乙方股权质押协议下或对甲方的授权委托书中的股权，还留存有任何权利，除非甲方书面指示，否则乙方仍不得行使该权利。Party B shall strictly abide by the provisions of this Agreement and other contracts jointly or separately executed by and among Party B,Party C and Party A, perform the obligations hereunder and thereunder, and refrain from any action/omission that may affect theeffectiveness and enforceability thereof. To the extent that Party B has any remaining rights with respect to the equity interests subject tothis Agreement hereunder or under Party B’s Equity Interest Pledge Agreement or under the Power of Attorney granted in favor of PartyA, Party B shall not exercise such rights except in accordance with the written instructions of Party A.4.陈述和保证Representations and Warranties乙方和丙方特此在本协议签署之日和每一个转让日向甲方共同及分别陈述和保证如下：Party B and Party C hereby represent and warrant to Party A, jointly and severally, as of the date of this Agreement and each date of transfer of theOptioned Interests, that:4.1其具有签订和交付本协议和其为一方的、根据本协议为每一次转让被购买的股权而签订的任何股权转让协议(各称为"转让协议")，并履行其在本协议和任何转让协议项下的义务的权力和能力。乙方和丙方同意在甲方行使购买权时，他们将签署与本协议条款一致的转让协议。本协议和其是一方的各转让协议一旦签署后，构成或将对其构成合法、有效及具有约束力的义务并可按照其条款对其强制执行；They have the authority to execute and deliver this Agreement and any share transfer contracts to which they are a party concerning theOptioned Interests to be transferred thereunder (each, a “Transfer Contracts”), and to perform their obligations under this Agreement and anyTransfer Contracts. Party B and Party C agree to enter into Transfer Contracts consistent with the terms of this Agreement upon Party A’s exerciseof the Equity Interest Purchase Option. This Agreement and the Transfer Contracts to which they are a party constitute or will constitute theirlegal, valid and binding obligations and shall be enforceable against them in accordance with the provisions thereof;15秘密文件Strictly Confidential4.2无论是本协议或任何转让协议的签署和交付还是其在本协议或任何转让协议项下的义务的履行均不会：(i)导致违反任何有关的中国法律；(ii)与丙方章程或其他组织文件相抵触；(iii)导致违反其是一方或对其有约束力的任何协议或文件，或构成其是一方或对其有约束力的任何协议或文件项下的违约；(iv)导致违反有关向任何一方颁发的任何许可或批准的授予和(或)继续有效的任何条件；或(v)导致向任何一方颁发的任何许可或批准中止或被撤销或附加条件；The execution and delivery of this Agreement or any Transfer Contracts and the obligations under this Agreement or any Transfer Contracts shallnot: (i) cause any violation of any applicable laws of China; (ii) be inconsistent with the articles of association, bylaws or other organizationaldocuments of Party C; (iii) cause the violation of any contracts or instruments to which they are a party or which are binding on them, orconstitute any breach under any contracts or instruments to which they are a party or which are binding on them; (iv) cause any violation of anycondition for the grant and/or continued effectiveness of any licenses or permits issued to either of them; or (v) cause the suspension orrevocation of or imposition of additional conditions to any licenses or permits issued to either of them;4.3乙方对其在丙方拥有的股权拥有良好和可出售的所有权，除乙方签署的《股权质押协议》外，乙方在上述股权上没有设置任何担保权益；Party B have a good and merchantable title to the equity interests in Party C they hold. Except for Party B’s Equity Interest Pledge Agreement,Party B have not placed any security interest on such equity interests;16秘密文件Strictly Confidential4.4目前没有悬而未决的或构成威胁的与丙方的股权、丙方资产有关的或与丙方有关的诉讼、仲裁或行政程序。There are no pending or threatened litigation, arbitration or administrative proceedings relating to the equity interests in Party C, assets of Party Cor Party C.5.生效日Effective Date5.1本协议于各方签署本协议之日生效，有效期10年，经甲方选择可再延长10年。This Agreement shall become effective upon the date hereof, and remain effective for a term of 10 years, and may be renewed for an additional 10years at Party A’s election.5.2若丙方股东发生变化，由新股东签署此协议，在此协议签署之日，原协议自动视为无效。In the event of a change in the shareholders of Party C, the new shareholder should sign this agreement and the original agreement willautomatically be deemed invalid on the date of signing of this agreement.17秘密文件Strictly Confidential6.适用法律与争议解决Governing Law and Resolution of Disputes6.1适用法律Governing law本协议的订立、效力、解释、履行、修改和终止以及争议解决均适用中国正式公布并可公开得到的法律。对中国正式公布并可公开得到的法律没有规定的事项，将适用国际法律原则和惯例。The execution, effectiveness, construction, performance, amendment and termination of this Agreement and the resolution of disputes hereundershall be governed by the formally published and publicly available laws of China. Matters not covered by formally published and publiclyavailable laws of China shall be governed by international legal principles and practices.6.2争议的解决方法Methods of Resolution of Disputes因解释和履行本协议而发生的任何争议，本协议各方应首先通过友好协商的方式加以解决。如果在一方向其他方发出要求协商解决的书面通知后30天之内争议仍然得不到解决，则任何一方均可将有关争议提交给中国国际经济贸易仲裁委员会，由该会按照其届时有效的仲裁规则仲裁解决。仲裁应在北京进行，使用之语言为中文。仲裁裁决是终局性的，对各方均有约束力。In the event of any dispute with respect to the construction and performance of this Agreement, the Parties shall first resolve the dispute throughfriendly negotiations. In the event the Parties fail to reach an agreement on the dispute within 30 days after either Party’s request to the otherParties for resolution of the dispute through negotiations, either Party may submit the relevant dispute to the China International Economic andTrade Arbitration Commission for arbitration, in accordance with its then effective arbitration rules. The arbitration shall be conducted in Beijing,and the language used in arbitration shall be Chinese. The arbitration award shall be final and binding on all Parties.18秘密文件Strictly Confidential7.税款、费用Taxes and Fees每一方应承担根据中国法律因准备和签署本协议和各转让协议以及完成本协议和各转让协议拟定的交易而由该方发生的或对其征收的任何和全部的转让和注册的税、花费和费用。Each Party shall pay any and all transfer and registration tax, expenses and fees incurred thereby or levied thereon in accordance with the laws of China inconnection with the preparation and execution of this Agreement and the Transfer Contracts, as well as the consummation of the transactionscontemplated under this Agreement and the Transfer Contracts.8.通知Notices8.1本协议项下要求或发出的所有通知和其他通信应通过专人递送、挂号邮寄、邮资预付或商业快递服务或传真的方式发到该方下列地址。每一通知还应再以电子邮件送达。该等通知视为有效送达的日期按如下方式确定：All notices and other communications required or permitted to be given pursuant to this Agreement shall be delivered personally or sent byregistered mail, postage prepaid, by a commercial courier service or by facsimile transmission to the address of such Party set forth below. Aconfirmation copy of each notice shall also be sent by email. The dates on which notices shall be deemed to have been effectively given shall bedetermined as follows:8.1.1通知如果是以专人递送、快递服务或挂号邮寄、邮资预付发出的，则以于设定为通知的地址在接收或拒收之日为有效送达日。Notices given by personal delivery, by courier service or by registered mail, postage prepaid, shall be deemed effectively given on thedate of receipt or refusal at the address specified for notices.19秘密文件Strictly Confidential8.1.2通知如果是以传真发出的，则以成功传送之日为有效送达日（应以自动生成的传送确认信息为证）。Notices given by facsimile transmission shall be deemed effectively given on the date of successful transmission (as evidenced by anautomatically generated confirmation of transmission).8.2为通知的目的，各方地址如下：For the purpose of notices, the addresses of the Parties are as follows:甲方：中传天下信息科技（深圳）有限公司Party A:Zhongchuan Tianxia Information Technology (Shenzhen) Co., Ltd.地址：深圳市南山区高新中三道2号深圳软件园一期五栋401AAddress:401A, Building 5, Phase 1, Shenzhen Software Park, No.2 Gaoxin Zhongsan Road, Nanshan District, Shenzhen.收件人：洪婷Attn:Hong Ting乙方：Party B: 宋雪松Song Xuesong住所：天津市河西区广东路中裕园33702Address:Zhongyu Yuan 33702, Guangdong Road, Hexi District, Tianjin20秘密文件Strictly Confidential陈蔚力Chen Weili住所：广东省深圳市宝安区宝城上川路15号Address:Baocheng Shangchuan Road 15, Baoan District, Shenzhen, Guangdong王平Wang Ping住所：广东省深圳市南山区高新南环路36号彩虹之岸12栋4AAddress:Caihong Zhi’an Building No.12 Suite 4A, Gaoxin Nanhuan Road 36, Nanshan District, Shenzhen, Guangdong刘东来Liu Donglai住所：天津市和平区南京路诚基经贸中心1号楼2门1702号Address:No 1702, Door 2, Build 1, Chengji Economic and Trade Centre, Nanjing Road, Heping District, Tianjin.丙方：北京中传视讯科技有限公司Party C:Beijing Mobile Vision Technology Co., Ltd.地址：北京市朝阳区光华路9号SOHO3QLAB32Address: LAB32, SOHO3Q, No 9, Guanghua Road, Chaoyang District, Beijing .收件人：宋雪松Attn: Song Xuesong8.3任何一方可按本条规定随时给其他方发出通知来改变其接收通知的地址。Any Party may at any time change its address for notices by a notice delivered to the other Parties in accordance with the terms hereof.21秘密文件Strictly Confidential9.保密责任Confidentiality各方承认及确定彼此就有关本协议而交换的任何口头或书面资料均属机密资料。各方应当对所有该等资料予以保密，而在未得其他方书面同意前，不得向任何第三者披露任何有关资料，惟下列情况除外：(a)公众人士知悉或将会知悉该等资料(并非由接受资料之一方擅自向公众披露)；(b)适用法律法规或股票交易的规则或规例所需披露之资料；或(c)由任何一方就本协议所述交易而需向其法律或财务顾问披露之资料而该法律或财务顾问亦需遵守与本条款相类似之保密责任。如任何一方工作人员或聘请机构的泄密均视为该方的泄密，需依本协议承担违约责任。无论本协议以任何理由终止，本条款仍然生效。The Parties acknowledge that any oral or written information exchanged among them with respect to this Agreement is confidential information. Each Partyshall maintain the confidentiality of all such information, and without obtaining the written consent of other Parties, it shall not disclose any relevantinformation to any third parties, except in the following circumstances: (a) such information is or will be in the public domain (provided that this is not theresult of a public disclosure by the receiving party); (b) information disclosed as required by applicable laws or rules or regulations of any stock exchange;or (c) information required to be disclosed by any Party to its legal counsel or financial advisor regarding the transaction contemplated hereunder, and suchlegal counsel or financial advisor are also bound by confidentiality duties similar to the duties in this section. Disclosure of any confidential information bythe staff members or agency hired by any Party shall be deemed disclosure of such confidential information by such Party, which Party shall be held liablefor breach of this Agreement. This Section shall survive the termination of this Agreement for any reason.22秘密文件Strictly Confidential10.进一步保证Further Warranties各方同意迅速签署为执行本协议的各项规定和目的而合理需要的或对其有利的文件，以及为执行本协议的各项规定和目的而采取合理需要的或对其有利的进一步行动。The Parties agree to promptly execute documents that are reasonably required for or are conducive to the implementation of the provisions and purposes ofthis Agreement and take further actions that are reasonably required for or are conducive to the implementation of the provisions and purposes of thisAgreement.11.其他Miscellaneous11.1修订、修改与补充Amendment, change and supplement对本协议作出修订、修改与补充，必须经每一方签署书面协议。Any amendment, change and supplement to this Agreement shall require the execution of a written agreement by all of the Parties.11.2完整协议Entire agreement除了在本协议签署后所作出的书面修订、补充或修改以外，本协议构成本协议各方就本协议标的物所达成的完整协议，取代在此之前就本协议标的物所达成的所有口头或书面的协商、陈述和协议。 Except for the amendments, supplements or changes in writing executed after theexecution of this Agreement, this Agreement shall constitute the entire agreement reached by and among the Parties hereto with respect to thesubject matter hereof, and shall supercede all prior oral and written consultations, representations and contracts reached with respect to thesubject matter of this Agreement.23秘密文件Strictly Confidential11.3标题Headings本协议的标题仅为方便阅读而设，不应被用来解释、说明或在其他方面影响本协议各项规定的含义。The headings of this Agreement are for convenience only, and shall not be used to interpret, explain or otherwise affect the meanings of theprovisions of this Agreement.11.4语言Language本协议以中文和英文书就，一式八份，乙方共计六名股东以及甲方、丙方各持一份，具有同等效力；中英文版本如有冲突，应以中文版为准。This Agreement is written in both Chinese and English language in eight copies, the 6 shareholders of Party B, Party A and Party C having onecopy with equal legal validity respectively; in case there is any conflict between the Chinese version and the English version, the Chinese versionshall prevail.11.5可分割性Severability如果本协议有任何一条或多条规定根据任何法律或法规在任何方面被裁定为无效、不合法或不可执行，本协议其余规定的有效性、合法性或可执行性不应因此在任何方面受到影响或损害。各方应通过诚意磋商，争取以法律许可以及各方期望的最大限度内有效的规定取代那些无效、不合法或不可执行的规定，而该等有效的规定所产生的经济效果应尽可能与那些无效、不合法或不能强制执行的规定所产生的经济效果相似。In the event that one or several of the provisions of this Agreement are found to be invalid, illegal or unenforceable in any aspect in accordancewith any laws or regulations, the validity, legality or enforceability of the remaining provisions of this Agreement shall not be affected orcompromised in any respect. The Parties shall strive in good faith to replace such invalid, illegal or unenforceable provisions with effectiveprovisions that accomplish to the greatest extent permitted by law and the intentions of the Parties, and the economic effect of such effectiveprovisions shall be as close as possible to the economic effect of those invalid, illegal or unenforceable provisions.24秘密文件Strictly Confidential11.6继任者Successors本协议对各方各自的继任者和各方所允许的受让方应具有约束力并对其有利。This Agreement shall be binding on and shall inure to the interest of the respective successors of the Parties and the permitted assigns of suchParties.11.7继续有效Survival11.7.1协议期满或提前终止前因本协议而发生的或到期的任何义务在本协议期满或提前终止后继续有效。Any obligations that occur or that are due as a result of this Agreement upon the expiration or early termination of this Agreement shallsurvive the expiration or early termination thereof.11.7.2本协议第5、6、9条和本第11.7条的规定在本协议终止后继续有效。The provisions of Articles 5, 6, 9 and this Section 11.7 shall survive the termination of this Agreement.25秘密文件Strictly Confidential11.8弃权Waivers任何一方可以对本协议的条款和条件作出弃权，但必须经书面作出并经各方签字。一方在某种情况下就其他方的违约所作的弃权不应被视为该方在其他情况下就类似的违约已经对其他方作出弃权。Any Party may waive the terms and conditions of this Agreement, provided that such a waiver must be provided in writing and shall require thesignatures of the Parties. No waiver by any Party in certain circumstances with respect to a breach by other Parties shall operate as a waiver bysuch a Party with respect to any similar breach in other circumstances.本页其余部分刻意留为空白The Remainder of this page is intentionally left blank26秘密文件Strictly Confidential有鉴于此，各方已自行或使得其各自授权代表于文首所载日期签署本独家购买权协议。IN WITNESS WHEREOF, the Parties have executed, or caused their respective duly authorized representatives to execute, this Exclusive Option Agreement as ofthe date first above written.甲方：中传天下信息科技（深圳）有限公司（盖章）Party A: Zhongchuan Tianxia Information Technology (Shenzhen) Co., Ltd. (Seal)签字：By:/s/ Hong Ting姓名：洪婷Name: Hong Ting职务：总经理Title: General Manager秘密文件 Strictly Confidential有鉴于此，各方已自行或使得其各自授权代表于文首所载日期签署本独家购买权协议。IN WITNESS WHEREOF, the Parties have executed, or caused their respective duly authorized representatives to execute, this Exclusive Option Agreement as ofthe date first above written.乙方：Party B:宋雪松Song Xuesong签字：By:/s/ Song Xuesong秘密文件 Strictly Confidential有鉴于此，各方已自行或使得其各自授权代表于文首所载日期签署本独家购买权协议。IN WITNESS WHEREOF, the Parties have executed, or caused their respective duly authorized representatives to execute, this Exclusive Option Agreement as ofthe date first above written.乙方：Party B:陈蔚力Chen Weili签字：By:/s/ Chen Weili秘密文件 Strictly Confidential有鉴于此，各方已自行或使得其各自授权代表于文首所载日期签署本独家购买权协议。IN WITNESS WHEREOF, the Parties have executed, or caused their respective duly authorized representatives to execute, this Exclusive Option Agreement as ofthe date first above written.乙方：Party B:王平Wang Ping签字：By:/s/ Wang Ping秘密文件 Strictly Confidential有鉴于此，各方已自行或使得其各自授权代表于文首所载日期签署本独家购买权协议。IN WITNESS WHEREOF, the Parties have executed, or caused their respective duly authorized representatives to execute, this Exclusive Option Agreement as ofthe date first above written.乙方：Party B:刘东来Liu Donglai签字：By:/s/ Liu Donglai秘密文件 Strictly Confidential有鉴于此，各方已自行或使得其各自授权代表于文首所载日期签署本独家购买权协议。IN WITNESS WHEREOF, the Parties have executed, or caused their respective duly authorized representatives to execute, this Exclusive Option Agreement as ofthe date first above written.丙方：北京中传视讯科技有限公司（盖章）Party B: Beijing Mobile Vision Technology Co., Ltd. (Seal)签字：By:/s/ Song Xuesong姓名：宋雪松Name:Song Xuesong职务：董事长Title:Chairman of the Board秘密文件 Strictly ConfidentialEX4.17 5 f20f2017ex417_luokung.htm EQUITY INTEREST PLEDGE AGREEMENT BY AND AMONG ZHONGCHUAN TIANXIA INFORMATION TECHNOLOGY(SHENZHEN) CO., LTD., XUESONG SONG, WEILI CHEN, PING WANG, DONGLAI LIU, AND BEIJING MOBILE VISION TECHNOLOGY CO., LTD., DATEDAUGUST 31, 2015Exhibit 4.17股权质押协议Equity Interest Pledge Agreement本股权质押协议（下称"本协议”）由下列各方于年月日在中华人民共和国（下称“中国”）北京签订：This Equity Interest Pledge Agreement (this "Agreement") has been executed by and among the following parties on in Beijing, the People’sRepublic of China (the “China” or “PRC”):甲方：中传天下信息科技（深圳）有限公司（下称“质权人”）Party A: Zhongchuan Tianxia Information Technology (Beijing) Co., Ltd. (“Pledgee”)地址：深圳市南山区高新中三道2号深圳软件园一期五栋401AAddress: 401A, Building 5, Phase 1, Shenzhen Software Park, No.2 Gaoxin Zhongsan Road, Nanshan District, Shenzhen统一社会信用代码： 91440300565701058RUniform Social Credit Code: 91440300565701058R乙方(下称“出质人”)：Party B ( “Pledgors”):a)宋雪松Song Xuesong身份证号码:ID Card No.:b)陈蔚力Chen Weili身份证号码:ID Card No.:1秘密文件 Strictly Confidentialc)王平Wang Ping身份证号码:ID Card No.:d)刘东来Liu Donglai身份证号码:ID Card No.:丙方：北京中传视讯科技有限公司Party C: Beijing Mobile Vision Technology Co., Ltd.地址：北京市朝阳区光华路9号SOHO3QLAB32Address: LAB32, SOHO3Q, No 9, Guanghua Road, Chaoyang District, Beijing统一社会信用代码：9111010576215249XMUniform Social Credit Code: 9111010576215249XM在本协议中，质权人、出质人和丙方以下各称“一方”，合称“各方”。In this Agreement, each of Pledgee, Pledgors and Party C shall be referred to as a "Party" respectively, and they shall be collectively referred to as the"Parties".鉴于：Whereas:1．出质人全部为中国境内居民自然人，共同持有丙方100%的股权。丙方是一家在中国注册成立的、主要从事手机视频技术研发、内容制作和产业化市场推广的有限责任公司。丙方有意在此确认出质人和质权人在本协议下的权利和义务并提供必要的协助登记该质权；All of the Pledgors are natural persons resided in PRC, and collectively hold 100% of the equity interest in Party C. Party C is a limited company registered inChina, mainly engaging in mobile video frequency technology research, development, content creation, sale and related industrialization promotion. Party Cacknowledges the respective rights and obligations of Pledgors and Pledgee under this Agreement, and intends to provide any necessary assistance inregistering the Pledge;2．质权人是一家在中国注册的外商独资企业。质权人与丙方于年月日签订了独家业务合作协议；Pledgee is a whollyforeignowned enterprise registered in China. Pledgee and Party C have executed an Exclusive Business Cooperation Agreement as of [*],[*];3．为了保证丙方全面履行独家业务合作协议项下的义务，出质人以其拥有的全部丙方股权向质权人做出质押担保。To ensure that Party C fully performs its obligations under the Exclusive Business Cooperation Agreement, Pledgors hereby pledge to the Pledgee all of theequity interests they hold in Party C.为了履行业务合作协议的条款，各方商定按照以下条款签订本协议。To perform the provisions of the Business Cooperation Agreement, the Parties have mutually agreed to execute this Agreement upon the following terms.2秘密文件 Strictly Confidential1.定义Definitions除非本协议另有规定，下列词语含义为：Unless otherwise provided herein, the terms below shall have the following meanings:1.1质权：指出质人根据本协议第2条给予质权人的担保物权，即指质权人所享有的，以出质人质押给质权人的股权折价或拍卖、变卖该股权的价款优先受偿的权利。Pledge: shall refer to the security interest granted by Pledgors to Pledgee pursuant to Article 2 of this Agreement, i.e., the right of Pledgee to becompensated on a preferential basis with the conversion, auction or sales price of the Equity Interest.1.2股权：指出质人现在和将来（通过增资和/或转股）合法持有的其在丙方的全部股权权益。Equity Interest: shall refer to all of the equity interest in Party C lawfully, held now and to be held (through capital increase and/or equity transfer)hereafter by Pledgors.1.3质押期限：指本协议第3条规定的期间。Term of Pledge: shall refer to the term set forth in Article 3 of this Agreement.1.4业务合作协议：指丙方与质权人于本协议日签订的独家业务合作协议。Business Cooperation Agreement: shall refer to the Exclusive Business Cooperation Agreement executed by and between Party C and Pledgee on thedate of this Agreement.1.5违约事件：指本协议第7条所列任何情况。Event of Default: shall refer to any of the circumstances set forth in Article 7 of this Agreement.1.6违约通知：指质权人根据本协议发出的宣布违约事件的通知。Notice of Default: shall refer to the notice issued by Pledgee in accordance with this Agreement declaring an Event of Default.3秘密文件 Strictly Confidential2.质权The Pledge作为丙方按时和全额支付业务合作协议项下质权人应得的任何或全部的款项，包括但不限于业务合作协议中规定的咨询和服务费的担保（无论该等费用的到期应付是由于到期日的到来、提前收款的要求或其它原因），以及丙方充分履行其在业务合作协议项下其他所有义务（丙方按时和全额支付业务合作协议项下甲方应得的任何或全部的款项及丙方在业务合作协议项下其他所有义务，以下统称为“被担保债务”）的担保，出质人特此将其现有或将拥有的丙方的全部股权权益质押给质权人。As collateral security for the timely and complete payment and performance when due (whether at stated maturity, by acceleration or otherwise) of any or all ofthe payments due (the “all payments in pledge”) by Party C, including without limitation the consulting and services fees payable to the Pledgee under theBusiness Cooperation Agreement, Pledgors hereby pledge to Pledgee a first security interest in all of Pledgors’ right, title and interest, whether now owned orhereafter acquired by Pledgors, in the Equity Interest of Party C.3.质押期限Term of Pledge3.1本质权自本协议项下的股权出质在相应的工商行政管理机关登记之日起生效，质权有效期持续到业务合作协议下所有丙方欠付质权人的款项结清为止。出质人和丙方应（一）自本协议签署之日起3个工作日内，将本协议的质权登记在丙方股东名册上，并（二）自本协议签署之日起10个工作日内向相应的工商行政管理机关申请登记本协议项下的质权。各方共同确认，为办理股权质押工商登记手续，各方及丙方其他股东应按照丙方所在地工商行政管理部门要求的形式签署、真实反映本协议项下质权信息的《股权质押合同》（以下简称“工商登记质押合同”）提交给工商管理机关，工商登记质押合同中未约定事项，仍以本协议约定为准。出质人和丙方应当按照中国法律法规和有关工商行政管理机关的各项要求，提交所有必要的文件并办理所有必要手续，保证质权在递交申请后尽快获得登记。如果出质人持有的丙方注册资本数额增加（不管是通过直接认缴丙方的增资还是从其他股东处受让股权），各方一致同意将采取一切必要的行动和签署一切必要的文件以按照登记机关的要求完成质权的变更登记，以确保本协议项下的质权的持续有效。The Pledge shall become effective on such date when the pledge of the Equity Interest contemplated herein has been registered’ with relevantadministration for industry and commerce (the “AIC”). The Pledge shall be continuously valid until all payments due under the Business CooperationAgreement have been fulfilled by Party C. Pledgors and Party C shall (1) register the Pledge in the shareholders' register of Party C within 3 businessdays following the execution of this Agreement, and (2) submit an application to the AIC for the registration of the Pledge of the Equity Interestcontemplated herein within 10 business days following the execution of this Agreement. The parties covenant that for the purpose of registration of thePledge, the parties hereto and all other shareholders of Party C shall submit to the AIC the Equity Interest Pledge Contract in the form required by theAIC at the location of Party C which shall truly reflect the information of the Pledge hereunder (the “AIC Pledge Contract”). For matters not specified inthe AIC Pledge Contract, the parties shall be bound by the provisions of this Agreement. Pledgors and Party C shall submit all necessary documentsand complete all necessary procedures, as required by the PRC laws and regulations and the relevant AIC, to ensure that the Pledge of the EquityInterest shall be registered with the AIC as soon as possible after filing. In the event that the amount of registered capital held by Pledgors is increased(either by subscribing increased registered capital from Party C or acquiring equity interest from other shareholders), the Parties hereto agree that theyshall take any necessary action and execute any necessary document to complete the registration of change of Pledge according to the requirement ofAIC so that the Pledge in this Agreement remains effective.4秘密文件 Strictly Confidential3.2质押期限内，如丙方未按业务合作协议交付咨询服务费等费用，质权人有权但无义务按本协议的规定处分质权。During the Term of Pledge, in the event Party C fails to pay the exclusive consulting or service fees in accordance with the Business CooperationAgreement, Pledgee shall have the right, but not the obligation, to dispose of the Pledge in accordance with the provisions of this Agreement.4.质权凭证的保管Custody of Records for Equity Interest subject to Pledge4.1在本协议规定的质押期限内，出质人应将其在丙方的股权出资证明书及记载质权的股东名册交付质权人保管。出质人应在本协议签订之日起一周内将上述股权出资证明书及股东名册交付给质权人。质权人将在本协议规定的全部质押期间一直保管这些项目。During the Term of Pledge set forth in this Agreement, Pledgors shall deliver to Pledgee's custody the capital contribution certificate for the EquityInterest and the shareholders' register containing the Pledge within one week from the execution of this Agreement. Pledgee shall have custody of suchitems during the entire Term of Pledge set forth in this Agreement.4.2在质押期限内，股权所产生的红利应当无条件归质权人所有。Dividends generated by the Equity Interest shall be unconditionally owned by the Pledgee during the Term of Pledge.5秘密文件 Strictly Confidential5.出质人的声明和保证Representations and Warranties of Pledgors5.1出质人是股权唯一的合法所有人。Pledgors are the sole legal and beneficial owners of the Equity Interest.5.2质权人有权以本协议规定的方式处分并转让股权。Pledgee shall have the right to dispose of and transfer the Equity Interest in accordance with the provisions set forth in this Agreement.5.3除本质权之外，出质人未在股权上设置任何其他质押权利或其他担保权益。Except for the Pledge, Pledgors have not placed any security interest or other encumbrance on the Equity Interest.6.出质人的承诺和确认Covenants and Further Agreements of Pledgors6.1在本协议存续期间，所有出质人向质权人承诺，出质人将：All of the Pledgors hereby covenant to the Pledgee, that during the term of this Agreement, Pledgors shall:6.1.1除履行由出质人与质权人、丙方于本协议签署日签订的《独家购买权合同》外，未经质权人事先书面同意，不得转让股权，不得在股权上设立或允许存在任何担保或其他债务负担；not transfer the Equity Interest, place or permit the existence of any security interest or other encumbrance on the Equity Interest, without theprior written consent of Pledgee, except for the performance of the Exclusive Option Agreement executed by Pledgors, the Pledgee and Party Con the execution date of this Agreement;6秘密文件 Strictly Confidential6.1.2遵守并执行所有有关权利质押的法律、法规的规定，在收到有关主管机关就质权发出或制定的通知、指令或建议时，于五日内向质权人出示上述通知、指令或建议，同时遵守上述通知、指令或建议，或按照质权人的合理要求或经质权人同意就上述事宜提出反对意见和陈述；comply with the provisions of all laws and regulations applicable to the pledge of rights, and within 5 days of receipt of any notice, order orrecommendation issued or prepared by relevant competent authorities regarding the Pledge, shall present the aforementioned notice, order orrecommendation to Pledgee, and shall comply with the aforementioned notice, order or recommendation or submit objections andrepresentations with respect to the aforementioned matters upon Pledgee's reasonable request or upon consent of Pledgee;6.1.3将任何可能导致对出质人股权或其任何部分的权利产生影响的事件或收到的通知，以及可能改变出质人在本协议中的任何保证、义务或对出质人履行其在本协议中义务可能产生影响的任何事件或收到的通知及时通知质权人。promptly notify Pledgee of any event or notice received by Pledgors that may have an impact on Pledgee's rights to the Equity Interest or anyportion thereof, as well as any event or notice received by Pledgors that may have an impact on any guarantees and other obligations ofPledgors arising out of this Agreement.6.2出质人同意，质权人按本协议条款取得的对质权享有的权利，不应受到出质人或出质人的继承人或出质人之委托人或任何其他人通过法律程序的中断或妨害。Pledgors agree that the rights acquired by Pledgee in accordance with this Agreement with respect to the Pledge shall not be interrupted or harmed byPledgors or any heirs or representatives of Pledgors or any other persons through any legal proceedings.7秘密文件 Strictly Confidential6.3出质人向质权人保证，为保护或完善本协议对偿付业务合作协议项下被担保债务的担保，出质人将诚实签署、并促使其他与质权有利害关系的当事人签署质权人所要求的所有的权利证书、契约和/或履行并促使其他有利害关系的当事人履行质权人所要求的行为，并为本协议赋予质权人之权利、授权的行使提供便利，与质权人或其指定的人(自然人/法人)签署所有的有关股权所有权的文件，并在合理期间内向质权人提供其认为需要的所有的有关质权的通知、命令及决定。To protect or perfect the security interest granted by this Agreement for payment of all payment in pledge under the Business Cooperation Agreement,Pledgors hereby undertake to execute in good faith and to cause other parties who have an interest in the Pledge to execute all certificates, agreements,deeds and/or covenants required by Pledgee. Pledgors also undertake to perform and to cause other parties who have an interest in the Pledge toperform actions required by Pledgee, to facilitate the exercise by Pledgee of its rights and authority granted thereto by this Agreement, and to enter intoall relevant documents regarding ownership of Equity Interest with Pledgee or designee(s) of Pledgee (natural persons/legal persons). Pledgorsundertake to provide Pledgee within a reasonable time with all notices, orders and decisions regarding the Pledge that are required by Pledgee.6.4出质人向质权人保证，出质人将遵守、履行本协议项下所有的保证、承诺、协议、陈述及条件。如出质人不履行或不完全履行其保证、承诺、协议、陈述及条件，出质人应赔偿质权人由此遭受的一切损失。Pledgors hereby undertake to comply with and perform all guarantees, promises, agreements, representations and conditions under this Agreement. Inthe event of failure the whole or partial performance of its guarantees, promises, agreements, representations and conditions, Pledgors shall indemnifyPledgee for all losses resulting therefrom.8秘密文件 Strictly Confidential7.违约事件Event of Default7.1下列事项均被视为违约事件：The following circumstances shall be deemed Event of Default:7.1.1丙方未能按期、完整履行任何业务合作协议项下责任，包括但不限于丙方未能按期足额支付业务合作协议项下的应付的被担保债务或有违反该协议其他义务的行为；Party C fails to fully and timely fulfill any liabilities under the Business Cooperation Agreement, including without limitation failure to pay infull any of the all payment in pledge payable under the Business Cooperation Agreement or breaches any other obligations of Party Cthereunder;7.1.2出质人或丙方实质违反本协议的任何条款；Pledgors or Party C have committed a material breach of any provisions of this Agreement;7.1.3除本协议第6.1.1条的约定外，出质人舍弃出质的股权或未获得质权人书面同意而擅自转让或意图转让出质的股权；和Except as expressly stipulated in Section 6.1.1, Pledgors transfers or purports to transfer or abandons the Equity Interest pledged or assignsthe Equity Interest pledged without the written consent of Pledgee; and7.1.4丙方的继承人或代管人只能履行部分或拒绝履行业务合作协议项下的支付责任。The successor or custodian of Party C is capable of only partially perform or refuses to perform the payment obligations under the BusinessCooperation Agreement.9秘密文件 Strictly Confidential7.2如知道或发现本第7.1条所述的任何事项或可能导致上述事项的事件已经发生，出质人应立即以书面形式通知质权人。Upon notice or discovery of the occurrence of any circumstances or event that may lead to the aforementioned circumstances described in Section 7.1,Pledgors shall immediately notify Pledgee in writing accordingly.7.3除非第7.1部分下的违约事件在质权人向出质人发出要求其修补此违约行为通知后的二十（20）天之内已经按质权人要求获得救济，质权人在其后的任何时间，可向出质人发出书面违约通知，要求依据第8部分履行其处理股权的权利。Unless an Event of Default set forth in this Section 7.1 has been successfully resolved to Pledgee's satisfaction within twenty (20) days after the Pledgeedelivers a notice to the Pledgors requesting ratification of such Event of Default, Pledgee may issue a Notice of Default to Pledgors in writing at any timethereafter, demanding the Pledgors to immediately dispose of the Pledge in accordance with the provisions of Article 8 of this Agreement.8.质权的行使Exercise of Pledge8.1在被担保债务被全部清偿或履行前，未经质权人书面同意，出质人不得转让本质权和其拥有的丙方股权。Prior to the full payment of all payments in pledge, without the Pledgee's written consent, Pledgors shall not assign the Pledge or the Equity Interest inParty C.8.2在质权人行使其质押权利时，质权人可以向出质人发出书面违约通知。Pledgee may issue a Notice of Default to Pledgors when exercising the Pledge.10秘密文件 Strictly Confidential8.3在质权人行使其质押权利时，根据中国有关法律的规定，质权人有权按照法定程序处置质押股权。仅在中国法律允许的范围内，对于处置的所得，质权人无需给付出质人；除非中国法律另有规定，出质人特此放弃其可能有的能向质权人要求任何质押股权处置所得的权利；同样，出质人对质权人在该质押股权处置后的亏损也不承担任何义务。When the Pledgor exercises the pledge right, Pledgee is entitled to dispose of the Equity Interest pledged in accordance with applicable PRC laws. Onlyto the extent permitted under applicable PRC laws, Pledgee has no obligation to account to Pledgors for proceeds of disposition of the Equity Interest.Unless otherwise required by PRC laws, Pledgors hereby waive any rights it may have to demand any such accounting from Pledgee; Likewise, in suchcircumstance Pledgors shall have no obligation to Pledgee for any deficiency remaining after such disposition of the Equity Interest pledged.8.4质权人依照本协议处分质权时，出质人和丙方应予以必要的协助，以使质权人实现其质权。When Pledgee disposes of the Pledge in accordance with this Agreement, Pledgors and Party C shall provide necessary assistance to enable Pledgee toenforce the Pledge in accordance with this Agreement.9.转让Assignment9.1除非经质权人事先同意，出质人无权赠予或转让其在本协议项下的权利义务。Without Pledgee's prior written consent, Pledgors shall not have the right to assign or delegate its rights and obligations under this Agreement.11秘密文件 Strictly Confidential9.2本协议对出质人及其继任人和经许可的受让人均有约束力，并且对质权人及每一继任人和受让人有效。This Agreement shall be binding on Pledgors and their successors and permitted assigns, and shall be valid with respect to Pledgee and each of itssuccessors and assigns.9.3经出质人同意，质权人可以在任何时候将其在业务合作协议项下的所有或任何权利和义务转让给其指定的关联方（自然人/法人），在这种情况下，受让人应享有和承担本协议项下质权人享有和承担的权利和义务，如同其作为原协议方应享有和承担的一样。质权人转让业务合作协议项下的权利和义务时，应质权人要求，出质人应就此转让签署有关协议和/或文件。Upon the Pledgors’ agreement, Pledgee may assign any or all of its rights and obligations under the Business Cooperation Agreement to its designee(s)(natural/legal persons) at any time, in which case the assigns shall have the rights and obligations of Pledgee under this Agreement, as if it were theoriginal party to this Agreement. When the Pledgee assigns the rights and obligations under the Business Cooperation Agreement, upon Pledgee'srequest, Pledgors shall execute relevant agreements or other documents relating to such assignment.9.4因转让所导致的质权人变更后，应质权人要求，出质人应与新的质权人签订一份内容与本协议一致的新质押协议，并在相应的工商行政管理机关进行登记。In the event of a change in Pledgee due to an assignment, Pledgors shall, at the request of Pledgee, execute a new pledge agreement with the newpledgee on the same terms and conditions as this Agreement, and register the same with the relevant AIC.12秘密文件 Strictly Confidential9.5出质人应严格遵守本协议和各方单独或共同签署的其他有关协议的规定，包括独家购买权合同和对质权人的授权委托书，履行各协议项下的义务，并不进行任何足以影响协议的有效性和可强制执行性的作为/不作为。除非根据质权人的书面指示，出质人不得行使其对质押股权还留存的权利。Pledgors shall strictly abide by the provisions of this Agreement and other contracts jointly or separately executed by the Parties hereto or any of them,including the Exclusive Option Agreement and the Power of Attorney granted to Pledgee, perform the obligations hereunder and thereunder, and refrainfrom any action/omission that may affect the effectiveness and enforceability thereof. Any remaining rights of Pledgors with respect to the EquityInterest pledged hereunder shall not be exercised by Pledgors except in accordance with the written instructions of Pledgee.10.终止Termination在被担保债务被全部清偿或履行完毕之后，本质权人应在尽早合理可行的时间内办理或配合办理解除质押的手续，出质人与丙方应提供相应的配合与协助。Upon the full payment of all payments in pledge under the Business Cooperation Agreement a, Pledgor shall then, with the assistance of Party B and Party C,go through the procedures of cancellation of pledge rights at a reasonable time as soon as practicable.11.手续费及其他费用Handling Fees and Other Expenses一切与本协议有关的费用及实际开支，其中包括但不限于法律费用、工本费、印花税以及任何其他税收、费用等全部由丙方承担。All fees and out of pocket expenses relating to this Agreement, including but not limited to legal costs, costs of production, stamp tax and any other taxes andfees, shall be borne by Party C.13秘密文件 Strictly Confidential12.保密责任Confidentiality各方承认及确定有关本协议、本协议内容，以及彼此就准备或履行本协议而交换的任何口头或书面资料均被视为保密信息。各方应当对所有该等保密信息予以保密，而在未得到另一方书面同意前，不得向任何第三者披露任何保密信息，惟下列信息除外：(a)公众人士知悉或将会知悉的任何信息（惟并非由接受保密信息之一方擅自向公众披露）；(b)根据适用法律法规、股票交易规则、或政府部门或法院的命令而所需披露之任何信息；或(c)由任何一方就本协议所述交易而需向其股东、投资者、法律或财务顾问披露之信息，而该股东、法律或财务顾问亦需遵守与本条款相类似之保密责任。如任何一方工作人员或聘请机构的泄密均视为该方的泄密，需依本协议承担违约责任。无论本协议以任何理由终止，本条款仍然生效。The Parties acknowledge that the existence and the terms of this Agreement and any oral or written information exchanged between the Parties in connectionwith the preparation and performance this Agreement are regarded as confidential information. Each Party shall maintain confidentiality of all such confidentialinformation, and without obtaining the written consent of the other Party, it shall not disclose any relevant confidential information to any third parties, exceptfor the information that: (a) is or will be in the public domain (other than through the receiving Party’s unauthorized disclosure); (b) is under the obligation tobe disclosed pursuant to the applicable laws or regulations, rules of any stock exchange, or orders of the court or other government authorities; or (c) isrequired to be disclosed by any Party to its shareholders, investors, legal counsels or financial advisors regarding the transaction contemplated hereunder,provided that such shareholders, investors, legal counsels or financial advisors shall be bound by the confidentiality obligations similar to those set forth inthis Section. Disclosure of any confidential information by the staff members or agencies hired by any Party shall be deemed disclosure of such confidentialinformation by such Party, which Party shall be held liable for breach of this Agreement. This Section shall survive the termination of this Agreement for anyreason.14秘密文件 Strictly Confidential13.适用法律和争议的解决Governing Law and Resolution of Disputes13.1本协议的订立、效力、解释、履行、修改和终止以及争议的解决均适用中国法律。The execution, effectiveness, construction, performance, amendment and termination of this Agreement and the resolution of disputes hereunder shallbe governed by the laws of China.13.2因解释和履行本协议而发生的任何争议，本协议各方应首先通过友好协商的方式加以解决。如果在一方向其他方发出要求协商解决的书面通知后30天之内争议仍然得不到解决，则任何一方均可将有关争议提交给中国国际经济贸易仲裁委员会，由该会按照其仲裁规则仲裁解决。仲裁应在北京进行，使用之语言为中文。仲裁裁决是终局性的，对各方均有约束力。In the event of any dispute with respect to the construction and performance of this Agreement, the Parties shall first resolve the dispute throughfriendly negotiations. In the event the Parties fail to reach an agreement on the dispute within 30 days after either Party's request to the other Parties forresolution of the dispute through negotiations, either Party may submit the relevant dispute to the China International Economic and Trade ArbitrationCommission for arbitration, in accordance with its Arbitration Rules. The arbitration shall be conducted in Beijing, and the language used in arbitrationshall be Chinese. The arbitration award shall be final and binding on all Parties.13.3因解释和履行本协议而发生任何争议或任何争议正在进行仲裁时，除争议的事项外，本协议各方仍应继续行使各自在本协议项下的其他权利并履行各自在本协议项下的其他义务。Upon the occurrence of any disputes arising from the construction and performance of this Agreement or during the pending arbitration of any dispute,except for the matters under dispute, the Parties to this Agreement shall continue to exercise their respective rights under this Agreement and performtheir respective obligations under this Agreement.15秘密文件 Strictly Confidential14.通知Notices14.1本协议项下要求或发出的所有通知和其他通信应通过专人递送、挂号邮寄、邮资预付或商业快递服务或传真的方式发到该方下列地址。每一通知还应再以电子邮件送达。该等通知视为有效送达的日期按如下方式确定：All notices and other communications required or permitted to be given pursuant to this Agreement shall be delivered personally or sent by registeredmail, postage prepaid, by a commercial courier service or by facsimile transmission to the address of such party set forth below. A confirmation copy ofeach notice shall also be sent by Email. The dates on which notices shall be deemed to have been effectively given shall be determined as follows:14.1.1通知如果是以专人递送、快递服务或挂号邮寄、邮资预付发出的，则以于设定为通知的地址在接收或拒收之日为有效送达日。Notices given by personal delivery, by courier service or by registered mail, postage prepaid, shall be deemed effectively given on the date ofreceipt or refusal at the address specified for notices.14.1.2通知如果是以传真发出的，则以成功传送之日为有效送达日（应以自动生成的传送确认信息为证）。Notices given by facsimile transmission shall be deemed effectively given on the date of successful transmission (as evidenced by anautomatically generated confirmation of transmission).16秘密文件 Strictly Confidential14.2为通知的目的，各方地址如下：For the purpose of notices, the addresses of the Parties are as follows:甲方：中传天下信息科技（深圳）有限公司Party A: Zhongchuan Tianxia Information Technology (Shenzhen) Co., Ltd.地址：深圳市南山区高新中三道2号深圳软件园一期五栋401AAddress: 401A, Building 5, Phase 1, Shenzhen Software Park, No.2 Gaoxin Zhongsan Road, Nanshan District, Shenzhen.收件人：洪婷Attn: Hong Ting乙方：Party B:a)宋雪松Song Xuesong地址：125.Expenses, including legal fees, incurred by a director in defending any legal, administrative or investigative proceedings may be paid by the Company inadvance of the final disposition of such proceedings upon receipt of an undertaking by or on behalf of the director to repay the amount if it shall ultimatelybe determined that the director is not entitled to be indemnified by the Company in accordance with these Articles.126.Expenses, including legal fees, incurred by a former director in defending any legal, administrative or investigative proceedings may be paid by theCompany in advance of the final disposition of such proceedings upon receipt of an undertaking by or on behalf of the former director to repay the amountif it shall ultimately be determined that the director is not entitled to be indemnified by the Company in accordance with these Articles.127.The indemnification and advancement of expenses provided by, or granted pursuant to, these Articles is not exclusive of any other rights to which theperson seeking indemnification of advancement of expenses may be entitled under any agreement, resolution of members, resolution of disinteresteddirectors or otherwise, both as to acting in the person’s official capacity and as to acting in another capacity while serving as a director of the Company.128.If a person to be indemnified has been successful in defence of any proceedings referred to above the person is entitled to be indemnified against allexpenses, including legal fees, and against all judgments, fines and amounts paid in settlement and reasonably incurred by the person in connection withthe proceedings.129.The Company may purchase and maintain insurance in relation to any person who is or was a director, an officer or a liquidator of the Company, or who atthe request of the Company is or was serving as a director, an officer or a liquidator of, or in any other capacity is or was acting for, another body corporateor a partnership, joint venture, trust or other enterprise, against any liability asserted against the person and incurred by the person in that capacity,whether or not the Company has or would have had the power to indemnify the person against the liability as provided in these Articles.SEAL130.The Company shall have a Seal and may have more than one Seal. References herein to the Seal shall be references to every Seal which shall have beenduly adopted by resolution of directors. The directors shall provide for the safe custody of the Seal and for an imprint thereof to be kept at the office of theregistered agent of the Company. Except as otherwise expressly provided herein, the Seal when affixed to any written instrument, shall be witnessed andattested to by the signature of a director or any other person so authorized from time to time by resolution of directors. Such authorization may be before orafter the Seal is affixed, may be general or specific and may refer to any number of sealings. The Directors may provide for a facsimile of the Seal and of thesignature of any director or authorized person which may be reproduced by printing or other means on any instrument and it shall have the same force andvalidity as if the Seal had been affixed to such instrument and the same had been signed as hereinbefore described.21DISTRIBUTIONS131.The directors of the Company may by resolution authorise a distribution by the Company at any time and of any amount and to any members they think fitif they are satisfied on reasonable grounds that immediately after the distribution;a.the value of the Company’s assets will exceed its liabilities, andb.the Company will be able to pay its debts as they fall due.132.A resolution of the directors passed under the preceding Article shall contain a statement that, in the opinion of the directors, immediately after thedistribution the value of the Company’s assets will exceed its liabilities, and the Company will be able to pay its debts as they fall due.133.If, after a distribution is authorised and before it is made, the directors cease to be satisfied on reasonable grounds that the Company will, immediately afterthe distribution satisfy the solvency test, any distribution made by the Company is deemed not to have been authorised.134.If, by virtue of the preceding Article, a distribution is deemed not to have been authorised, a director who;a.ceased, after authorisation but before the making of the distribution, to be satisfied on reasonable grounds for believing that the company wouldsatisfy the solvency test immediately after the distribution is made; andb.failed to take reasonable steps to prevent the distribution being made;is personally liable to the company to repay to the company so much of the distribution as is not able to be recovered from members.135.A distribution made to a member at a time when the company did not, immediately after the distribution, satisfy the solvency test may be recovered by thecompany from the member unless;a.the member received the distribution in good faith and without knowledge of the company’s failure to satisfy the solvency test;b.the member has altered his position in reliance on the validity of the distribution; andc.it would be unfair to require repayment in full or at all.DISTRIBUTIONS BY WAY OF DIVIDEND136.The Company may by a resolution of directors declare a distribution by way of dividend and pay such distribution in money, shares or other property. Inthe event that distributions by way of dividend are paid in specie the directors shall have responsibility for establishing and recording in the resolution ofdirectors authorizing the distribution by way of dividend, a fair and proper value for the assets to be so distributed.137.The directors may from time to time pay to the members such interim distributions by way of dividend as appear to the directors to be justified by theprofits of the Company.138.The directors may, before declaring any distribution by way of dividend, set aside out of the profits of the Company such sum as they think proper as areserve fund, and may invest the sum so set aside as a reserve fund upon such securities as they may select.139.Notice of any distribution by way of dividend that may have been declared shall be given to each member in the manner hereinafter mentioned and alldistributions by way of dividend unclaimed for 3 years after having been declared may be forfeited by resolution of directors for the benefit of theCompany.140.No distribution by way of dividend shall bear interest as against the Company and no distribution by way of dividend shall be paid on treasury shares orshares held by another company of which the Company holds, directly or indirectly, shares having more than 50 percent of the vote in electing directors.22141.A share issued as a distribution by way of dividend by the Company shall be treated for all purposes as having been issued for money equal to the valuedetermined by resolution of the directors. In the absence of fraud the decision of the directors as to the value of the share is conclusive unless a questionof law is involved.142.A division of the issued and outstanding shares of a class or series of shares into a larger number of shares of the same class or series having aproportionately smaller par value does not constitute a distribution by way of dividend of shares.ACCOUNTS AND AUDIT143.The Company may by resolution of members call for the directors to prepare periodically a profit and loss account and a balance sheet. The profit and lossaccount and balance sheet shall be drawn up so as to give respectively a true and fair view of the profit and loss of the Company for the financial periodand a true and fair view of the state of affairs of the Company as at the end of the financial period.144.The Company may by resolution of members call for the accounts to be examined by auditors.145.Subject to the rules of the Designated Stock Exchange, the first auditors shall be appointed by resolution of directors; subsequent auditors shall beappointed by the Audit Committee and shall hold office until the Audit Committee appoint another independent auditor.146.Subject to the rules of the Designated Stock Exchange, the remuneration of the auditors of the Company shall be fixed by the Audit Committee.147.The auditors shall examine each profit and loss account and balance sheet required to be served on every member of the Company or laid before a meetingof the members of the Company and shall state in a written report whether or nota.in their opinion the profit and loss account and balance sheet give a true and fair view respectively of the profit and loss for the period covered bythe accounts, and of the state of affairs of the Company at the end of that period; andb.all the information and explanations required by the auditors have been obtained.148.The report of the auditors shall be annexed to the accounts and shall be read at the meeting of members at which the accounts are laid before the Companyor shall be served on the members.149.Every auditor of the Company shall have a right of access at all times to the books of account and vouchers of the Company, and shall be entitled to requirefrom the directors and officers of the Company such information and explanations as he thinks necessary for the performance of the duties of the auditors.150.The auditors of the Company shall be entitled to receive notice of, and to attend any meetings of members of the Company at which the Company’s profitand loss account and balance sheet are to be presented.NOTICES151.Any notice, information or written statement to be given by the Company to members may be served in any way by which it can reasonably be expected toreach each member or by mail addressed to each member at the address shown in the share register.152.Any summons, notice, order, document, process, information or written statement to be served on the Company may be served by leaving it, or by sendingit by registered mail addressed to the Company, at its registered office, or by leaving it with, or by sending it by registered mail to, the registered agent ofthe Company.153.Service of any summons, notice, order, document, process, information or written statement to be served on the Company may be proved by showing thatthe summons, notice, order, document, process, information or written statement was delivered to the registered office or the registered agent of theCompany or that it was mailed in such time as to admit to its being delivered to the registered office or the registered agent of the Company in the normalcourse of delivery within the period prescribed for service and was correctly addressed and the postage was prepaid.23PENSION AND SUPERANNUATION FUNDS154.The directors may establish and maintain or procure the establishment and maintenance of any noncontributory or contributory pension orsuperannuation funds for the benefit of, and give or procure the giving of donations, gratuities, pensions, allowances or emoluments to, any persons whoare or were at any time in the employment or service of the Company or any company which is a subsidiary of the Company or is allied to or associated withthe Company or with any such subsidiary, or who are or were at any time directors or officers of the Company or of any such other company as aforesaid orwho hold or held any salaried employment or office in the Company or such other company, or any persons in whose welfare the Company or any suchother company as aforesaid is or has been at any time interested, and to the wives, widows, families and dependents of any such person, and may makepayments for or towards the insurance of any such persons as aforesaid, and may do any of the matters aforesaid either alone or in conjunction with anysuch other company as aforesaid. Subject always to the proposal being approved by resolution of members, a director holding any such employment oroffice shall be entitled to participate in and retain for his own benefit any such donation, gratuity, pension allowance or emolument.VOLUNTARY WINDING UP AND DISSOLUTION155.The Company may voluntarily commence to wind up and dissolve by a resolution of members but if the Company has never issued shares it mayvoluntarily commence to wind up and dissolve by resolution of directors.CONTINUATION156.The Company may by resolution of members or by a resolution passed unanimously by all directors of the Company continue as a company incorporatedunder the laws of a jurisdiction outside the British Virgin Islands in the manner provided under those laws.ARBITRATION157.Whenever any difference arises between the Company on the one hand and any of the members or their executors, administrators or assigns on the otherhand, touching the true intent and construction or the incidence or consequences of these Articles or of the Act, touching anything done or executed,omitted or suffered in pursuance of the Act or touching any breach or alleged breach or otherwise relating to the premises or to these Articles, or to anyAct or Ordinance affecting the Company or to any of the affairs of the Company such difference shall, unless the parties agree to refer the same to a singlearbitrator, be referred to 2 arbitrators one to be chosen by each of the parties to the difference and the arbitrators shall before entering on the referenceappoint an umpire.158.If either party to the reference makes default in appointing an arbitrator either originally or by way of substitution (in the event that an appointed arbitratorshall die, be incapable of acting or refuse to act) for 10 days after the other party has given him notice to appoint the same, such other party may appoint anarbitrator to act in the place of the arbitrator of the defaulting party.We, Portcullis TrustNet (BVI) Limited of Portcullis TrustNet Chambers, P.O. Box 3444, Road Town, Tortola, British Virgin Islands for the purpose of incorporating aBVI Business Company under the laws of the British Virgin Islands hereby sign these Articles of Association the 27th day of October, 2009.Incorporator/s/ Nicole WheatleyPortcullis TrustNet (BVI) LimitedPortcullis TrustNet ChambersP.O. Box 3444Road Town, TortolaBritish Virgin Islands(Sgd. Nicole Wheatley)24EX4.15 3 f20f2017ex415_luokung.htm EXCLUSIVE BUSINESS COOPERATION AGREEMENT BY AND BETWEEN ZHONGCHUAN TIANXIA INFORMATIONTECHNOLOGY (SHENZHEN) CO., LTD., AND BEIJING MOBILE VISION TECHNOLOGY CO., LTD., DATED AUGUST 31, 2015Exhibit 4.15独家业务合作协议Exclusive Business Cooperation Agreement本独家业务合作协议（下称“本协议”）由以下双方于年月日在中华人民共和国（下称“中国”）北京市签署。This Exclusive Business Cooperation Agreement (this “Agreement”) is made and entered into by and between the following parties on in Beijing, thePeople’s Republic of China (“China” or the “PRC”).甲方：中传天下信息科技（深圳）有限公司Party A: Zhongchuan Tianxia Information Technology (Shenzhen) Co., Ltd.地址：深圳市南山区高新中三道2号深圳软件园一期五栋401A Address: 401A, Building 5, Phase 1, Shenzhen Software Park, No.2 Gaoxin Zhongsan Road, Nanshan District, Shenzhen统一社会信用代码：91440300565701058R Uniform Social Credit Code: 91440300565701058R乙方：北京中传视讯科技有限公司Party B: Beijing Mobile Vision Technology Co., Ltd.地址：北京市朝阳区光华路9号SOHO3QLAB32Address: LAB32, SOHO3Q, No 9, Guanghua Road, Chaoyang District, Beijing统一社会信用代码：9111010576215249XMUniform Social Credit Code: 9111010576215249XM甲方和乙方以下各称为“一方”，统称为“双方”。Each of Party A and Party B shall be hereinafter referred to as a “Party” respectively, and as “Parties” collectively.1秘密文件Strictly Confidential鉴于：Whereas,1.甲方是一家在中国注册的外商独资企业，拥有丰富的技术研发和产业化推广相关的管理和投资经验，并提供相关的技术支持和咨询服务；Party A is a whollyforeignowned enterprise established in China, which has rich experience in technology research development and industrializationpromotion management and investment, and provides relevant technical support and consulting services;2.乙方是一家在中国成立的有限责任公司，经中国有关政府部门批准依法主要从事手机视频技术开发、内容制作及市场推广；Party B is a limited company in China, mainly engages in mobile video technology research, development, content creation, sale and related industrialpromotion as approved by the relevant governmental authorities in China;3.甲方同意利用其技术、人员和信息优势，在本协议期间向乙方提供有关手机视频技术开发、内容制作及市场推广以及未来扩大业务规模和业务范围时乙方所需的技术支持、技术咨询等相关服务，乙方同意接受甲方或其指定方按本协议条款的规定提供的各种服务。Party A is willing to provide Party B with technology supports and technology consulting services in connection with mobile video technology research,development, content creation, sale and related industrial promotion and such services in connection with Party B’s extension of business scale orbroadening of businesses during the term of this Agreement, utilizing its advantages in technology, human resources, and information, and Party B iswilling to accept such services provided by Party A or Party A's designee(s), each on the terms set forth herein.2秘密文件Strictly Confidential据此，甲方和乙方经协商一致，达成如下协议：Now, therefore, through mutual discussion, the Parties have reached the following agreements:1.服务提供Services Provided by Party A1.1按照本协议条款和条件，乙方在此委任甲方在本协议期间作为乙方的独家服务提供者向乙方提供全面的和手机视频技术开发、内容制作及市场推广相关以及未来扩大业务规模和业务范围时乙方所需的技术支持、业务支持和相关咨询服务，具体内容包括但不限于以下内容：Party B hereby appoints Party A as Party B's exclusive services provider to provide Party B with complete technical support, business supportand related consulting services in connection with mobile video technology research, development, content creation, sale and related industrialpromotion and such services in connection with Party B’s extension of business scale or broadening of businesses during the term of thisAgreement, in accordance with the terms and conditions of this Agreement, which may include but not limited to:1.1.1为乙方提供其手机视频技术开发、内容制作及市场推广业务所需的一切服务支持，为乙方提供相当于包括总经理、行政人员、管理人员、筹划部门、商业运营、人力资源、财务、会计以及与乙方业务相关的一切业务操作所需人员所能提供的服务内容；managing all aspects of Party B’s business of mobile video technology research, development, content creation, sale and relatedindustrial promotion. In this capacity, Party A will procure or engage for Party B the services of a general manager and other managementstaff, including but not limited to personnel responsible for all administration, operations, planning, business development, humanresources, finance, accounting and other operations related to the Business of Party B;3秘密文件Strictly Confidential1.1.2为乙方制定全部的商业计划、销售目标，并为优化执行该等商业计划设计和建立相应的系统及操作程序；developing all business plans and sales projections of Party B, and for developing and establishing systems and procedures for optimumexecution of the business plans;1.1.3为乙方申请手机视频技术及内容制作相关专利提供咨询服务和支持；consulting services and support in connection with Party B’s applying for mobile video technology related patents and content creation;1.1.4为乙方手机视频技术产业化的发展方向、规模、品牌提升提供咨询服务；consulting services in connection with the development directions, size and business brands promotion of Party B’s mobile videotechnology industrialization;4秘密文件Strictly Confidential1.1.5为乙方提供与业务相关的办公、生产和销售服务，为乙方租赁场所，建立业务相关的系统和程序，满足乙方的其他要求；procuring or obtaining for Party B all office, production and distribution services related to the Business. It shall procure or obtainappropriate leases, establish systems and procedures needed to operate the business, fulfill orders for services;1.1.6尽最大努力为乙方建立手机视频技术销售市场，根据甲方为乙方制定的商业计划及销售目标代表乙方获取客户订单，同时为乙方提供与业务相关的客户服务，建立向客户开具票据的程序和与会计相关的托收服务。using its best efforts to establish mobile video technology related marketing and other structures to obtain orders for services &products from customers on behalf of Party B in accordance with Party B’s business plans, sales projections and objectives (asdeveloped by Party A) and procure or obtain customer services required in connection with the Business. It shall also establishprocedures for invoicing customers, and establish collection services with respect to accounts;1.1.7就乙方的劳动用工方面提供咨询服务和支持，包括但不限于，组织实施对乙方业务人员、行政人员、管理人员等人员进行培训和考核，协助建立健全的人力资源管理制度和实现人力资源的良好配置；consulting services and support regarding labor system of Party B, including but without limitation to labor training and evaluation ofsales person, administrative staff and management person etc. and establishment of human resources management system to well;5秘密文件Strictly Confidential1.1.8提供乙方需要的客户数据统计、分析及相关数据库的建设和维护等咨询服务；providing Party B with compile and analysis of client data and consulting services of establishment and maintenance of data base;1.1.9提供乙方需要的软件和相关技术支持服务；providing software Party B requires and other technical support;1.1.10接受乙方委托，对乙方的手机视频技术研发和产业化推广业务经营进行指导和管理；guiding and management on Party B’s business of mobile video technology research and development and related industrial promotionoperation according to Party B’s commission;1.1.11当乙方业务规模发展或业务范围扩大需要时，购买乙方业务经营需要的设备；in the event of the demand of Party B’s development of business scale or broadening of businesses, purchase the equipments which itneeds for the operation of its business;1.1.12当乙方业务规模发展或业务范围扩大需要时，完成乙方项目中的全部或部分工作；in the event of the demand of Party B’s development of business scale or broadening of businesses, complete the work of Party B’sproject in whole or in party;6秘密文件Strictly Confidential1.1.13当乙方业务规模发展或业务范围扩大需要时，开发新技术；in the event of the demand of Party B’s development of business scale or broadening of businesses, develop new technology;1.1.14乙方委托甲方，且甲方接受委托提供的其他服务。other services Party B appoints Party A to provide and Party A agrees to provide.1.2乙方接受甲方的咨询和服务。乙方进一步同意，除非经甲方事先书面同意，在本协议期间，就本协议约定的服务或其他事宜，乙方不得直接或间接地从任何第三方获得任何与本协议相同或类似的咨询和/或服务，并不得与任何第三方就本协议所述事项建立任何类似的合作关系。双方同意，甲方可以指定其他方（该被指定方可以与乙方签署本协议第1.3条描述的某些协议）为乙方提供本协议约定的服务和/或支持。Party B agrees to accept all the consultations and services provided by Party A. Party B further agrees that unless with Party A's prior writtenconsent, during the term of this Agreement, Party B shall not directly or indirectly accept the same or any similar consultations and/or servicesprovided by any third party and shall not establish similar corporation relationship with any third party regarding the matters contemplated by thisAgreement. Party A may appoint other parties, who may enter into certain agreements described in Section 1.3 with Party B, to provide Party Bwith the consultations and/or services under this Agreement.7秘密文件Strictly Confidential1.3服务的提供方式Service Providing Methodology1.3.1双方同意在本协议有效期内，视情况而定，乙方可以与甲方或甲方指定的其他方进一步签订技术服务协议和/或咨询服务协议，对各项业务培训、技术服务、咨询服务的具体内容、方式、人员、收费等进行约定。Parties agree that during the term of this Agreement, where necessary, Party B may enter into further technical service agreements and/orconsulting service agreements with Party A or any other party designated by Party A, which shall provide the specific contents, manner,personnel, and fees for the specific technical services and consulting services.1.3.2为更好地履行本协议，双方同意，在甲方认为必要时，乙方应在本协议有效期内与甲方或甲方指定的其他方根据业务进展需要随时签署协议，由甲方或其指定方向乙方提供服务。To fulfill this Agreement, Parties agree that during the term of this Agreement, where Party A deems necessary, Party B shall enter intoagreements with Party A or any other party designated by Party A which shall set forth that Party A or any other party designated byParty A provide services to Party B based on the needs of the business of Party B.8秘密文件Strictly Confidential2.服务的价格和支付方式The Calculation and Payment of the Service Fees双方同意，就甲方提供的服务，乙方应向甲方支付服务费（“服务费”）。服务费不应低于乙方税后利润的80%。服务费应当按季支付；经甲方事先书面同意，服务费可以根据乙方的经营需要进行调整。Both Parties agree that, in consideration of the services provided by Party A, Party B shall pay Party A fees (the “Service Fees”), which shall not be lessthan 80% of Party B’s aftertax profits . The Service Fees shall be due and payable on a quarterly basis; upon the prior written consent by Party A, the rateof Service Fees may be adjusted pursuant to the operational needs of Party B.3.知识产权和保密条款Intellectual Property Rights and Confidentiality Clauses3.1在中国法律允许的范围内，甲方对履行本协议而产生或创造的任何权利、所有权、权益和所有知识产权包括但不限于著作权、专利权、专利申请权、软件、技术秘密、商业机密及其他均享有独占的和排他的权利和利益。乙方须签署所有适当的文件，采取所有适当的行动，递交所有的文件和/或申请，提供所有适当的协助，以及做出所有其他依据甲方的自行决定认为是必要的行为，以将任何对该等知识产权的所有权、权利和权益赋予甲方，和/或完善对甲方此等知识产权权利的保护。To the extent permitted under the PRC laws, Party A shall have exclusive and proprietary rights and interests in all rights, ownership, interests andintellectual properties arising out of or created during the performance of this Agreement, including but not limited to copyrights, patents, patentapplications, software, technical secrets, trade secrets and others. Party B shall execute all appropriate documents, take all appropriate actions,submit all filings and/or applications, render all appropriate assistance and otherwise conduct whatever is necessary deemed as by Party A in itssole discretion for the purposes of vesting any ownership, right or interest of any such intellectual property rights in Party A, and/or perfectingthe protections for any such intellectual property rights in Party A.9秘密文件Strictly Confidential3.2双方承认及确定有关本协议、本协议内容，以及彼此就准备或履行本协议而交换的任何口头或书面资料均被视为保密信息。双方应当对所有该等保密信息予以保密，而在未得到另一方书面同意前，不得向任何第三者披露任何保密信息，惟下列信息除外：(a)公众人士知悉或将会知悉的任何信息（惟并非由接受保密信息之一方擅自向公众披露）；(b)根据适用法律法规、股票交易规则、或政府部门或法院的命令而所需披露之任何信息；或(c)由任何一方就本协议所述交易而需向其股东、投资者、法律或财务顾问披露之信息，而该股东、法律或财务顾问亦需遵守与本条款相类似之保密责任。如任何一方工作人员或聘请机构的泄密均视为该方的泄密，需依本协议承担违约责任。无论本协议以任何理由终止，本条款仍然生效。The Parties acknowledge that the existence and the terms of this Agreement and any oral or written information exchanged between the Parties inconnection with the preparation and performance this Agreement are regarded as confidential information. Each Party shall maintainconfidentiality of all such confidential information, and without obtaining the written consent of the other Party, it shall not disclose any relevantconfidential information to any third parties, except for the information that: (a) is or will be in the public domain (other than through the receivingParty’s unauthorized disclosure); (b) is under the obligation to be disclosed pursuant to the applicable laws or regulations, rules of any stockexchange, or orders of the court or other government authorities; or (c) is required to be disclosed by any Party to its shareholders, investors,legal counsels or financial advisors regarding the transaction contemplated hereunder, provided that such shareholders, investors, legal counselsor financial advisors shall be bound by the confidentiality obligations similar to those set forth in this Section. Disclosure of any confidentialinformation by the staff members or agencies hired by any Party shall be deemed disclosure of such confidential information by such Party, whichParty shall be held liable for breach of this Agreement. This Section shall survive the termination of this Agreement for any reason.3.3双方同意，不论本协议是否变更、解除或终止，本条款将持续有效。The Parties agree that this Section shall survive changes to, and rescission or termination of, this Agreement.4.陈述和保证Representations and Warranties4.1甲方陈述和保证如下：Party A hereby represents and warrants as follows:4.1.1甲方是按照中国法律合法注册并有效存续的外商独资企业。Party A is a whollyforeignowned enterprise legally registered and validly existing in accordance with the laws of China.10秘密文件Strictly Confidential4.1.2甲方已采取必要的公司行为，获得必要的授权，并取得第三方和政府部门的同意及批准（若需）以签署和履行本协议；甲方对本协议的签署和履行并不违反法律法规的明确规定。Party A has taken all necessary corporate actions, obtained all necessary authorization and the consent and approval from third partiesand government agencies (if any) for the execution and performance of this Agreement. Party A’s execution and performance of thisAgreement do not violate any explicit requirements under any law or regulation binding on Party A.4.1.3本协议构成对其合法、有效、有约束力并依本协议之条款对其强制执行的义务。This Agreement constitutes Party A's legal, valid and binding obligations, enforceable in accordance with its terms.4.2乙方陈述和保证如下：Party B hereby represents and warrants as follows:4.2.1乙方是按照中国法律合法登记且有效存续的有限责任公司，乙方根据政府部门的批准和许可从事手机视频技术开发、内容制作和产业化市场推广的经营。Party B is a limited company legally registered and validly existing in accordance with the laws of China, engages in mobile videotechnology research, development, content creation, sale and related industrial promotion pursuant to governmental approvals andpermits;11秘密文件Strictly Confidential4.2.2乙方已采取必要的行为，获得必要的授权，并取得第三方和政府部门的同意及批准（若需）以签署和履行本协议；乙方对本协议的签署和履行并不违反法律法规的明确规定。Party B has taken all necessary actions, obtained all necessary authorization and the consent and approval from third parties andgovernment agencies (if any) for the execution and performance of this Agreement. Party B’s execution and performance of thisAgreement do not violate any explicit requirements under any law or regulation binding on Party B.4.2.3本协议构成对其合法、有效、有约束力并依本协议之条款对其强制执行的义务。This Agreement constitutes Party B's legal, valid and binding obligations, and shall be enforceable against it.5.生效和有效期Effectiveness and Term5.1本协议于文首标明的协议日期签署并同时生效。除非依本协议或双方其他协议的约定而提前终止，本协议有效期为20年，但甲、乙双方应自本协议签署后，每3个月对本协议的内容做一次审查，以决定是否需要根据当时的情况对本协议作出相应修改和补充。This Agreement is executed on the date first above written and shall take effect as of such date. Unless earlier terminated in accordance with theprovisions of this Agreement or relevant agreements separately executed between the Parties, the term of this Agreement shall be 20 years. Afterthe execution of this Agreement, both Parties shall review this Agreement every 3 months to determine whether to amend or supplement theprovisions in this Agreement based on the actual circumstances at that time.12秘密文件Strictly Confidential5.2协议期满前，经甲方书面确认，本协议可以延期。延期的期限由甲方决定，乙方必须无条件地同意该延期。The term of this Agreement may be extended if confirmed in writing by Party A prior to the expiration thereof. The extended term shall bedetermined by Party A, and Party B shall accept such extended term unconditionally.6.终止Termination6.1除非依据本协议续期，本协议于到期之日终止。Unless renewed in accordance with the relevant terms of this Agreement, this Agreement shall be terminated upon the date of expiration hereof.6.2本协议有效期内，除非甲方对乙方有重大过失或存在欺诈行为，乙方不得提前终止本协议。尽管如此，甲方可在任何时候通过提前30天向乙方发出书面通知的方式终止本协议。During the term of this Agreement, unless Party A commits gross negligence, or a fraudulent act, against Party B, Party B shall not terminate thisAgreement prior to its expiration date. Nevertheless, Party A shall have the right to terminate this Agreement upon giving 30 days' prior writtennotice to Party B at any time.6.3在本协议终止之后，双方在第3、7和8条项下的权利和义务将继续有效。The rights and obligations of the Parties under Articles 3, 7 and 8 shall survive the termination of this Agreement.13秘密文件Strictly Confidential7.适用法律和争议解决Governing Law and Resolution of Disputes7.1本协议的订立、效力、解释、履行、修改和终止以及争议的解决适用中国的法律。The execution, effectiveness, construction, performance, amendment and termination of this Agreement and the resolution of disputes hereundershall be governed by the laws of China.7.2因解释和履行本协议而发生的任何争议，本协议双方应首先通过友好协商的方式加以解决。如果在一方向其他方发出要求协商解决的书面通知后30天之内争议仍然得不到解决，则任何一方均可将有关争议提交给中国国际经济贸易仲裁委员会，由该会按照其仲裁规则仲裁解决。仲裁应在北京进行，使用之语言为中文。仲裁裁决是终局性的，对各方均有约束力。In the event of any dispute with respect to the construction and performance of this Agreement, the Parties shall first resolve the dispute throughfriendly negotiations. In the event the Parties fail to reach an agreement on the dispute within 30 days after either Party's request to the otherParties for resolution of the dispute through negotiations, either Party may submit the relevant dispute to the China International Economic andTrade Arbitration Commission for arbitration, in accordance with its Arbitration Rules. The arbitration shall be conducted in Beijing, and thelanguage used in arbitration shall be Chinese. The arbitration award shall be final and binding on all Parties.14秘密文件Strictly Confidential7.3因解释和履行本协议而发生任何争议或任何争议正在进行仲裁时，除争议的事项外，本协议双方仍应继续行使各自在本协议项下的其他权利并履行各自在本协议项下的其他义务。Upon the occurrence of any disputes arising from the construction and performance of this Agreement or during the pending arbitration of anydispute, except for the matters under dispute, the Parties to this Agreement shall continue to exercise their respective rights under this Agreementand perform their respective obligations under this Agreement.8.补偿Indemnification就甲方根据本协议向乙方提供的咨询和服务内容所产生或引起的针对甲方的诉讼、请求或其他要求而招致的任何损失、损害、责任或费用都应由乙方补偿给甲方，以使甲方不受损害，除非该损失、损害、责任或费用是因甲方的重大过失或故意而产生的。Party B shall indemnify and hold harmless Party A from any losses, injuries, obligations or expenses caused by any lawsuit, claims or other demandsagainst Party A arising from or caused by the consultations and services provided by Party A to Party B pursuant this Agreement, except where suchlosses, injuries, obligations or expenses arise from the gross negligence or willful misconduct of Party A.15秘密文件Strictly Confidential9.通知Notices9.1本协议项下要求或发出的所有通知和其他通信应通过专人递送、挂号邮寄、邮资预付或快递服务或传真的方式发到该方下列地址。每一通知还应再以电子邮件送达。该等通知视为有效送达的日期按如下方式确定：All notices and other communications required or permitted to be given pursuant to this Agreement shall be delivered personally or sent byregistered mail, postage prepaid, by a courier service or by facsimile transmission to the address of such Party set forth below. A confirmationcopy of each notice shall also be sent by email. The dates on which notices shall be deemed to have been effectively given shall be determined asfollows:9.1.1通知如果是以专人递送、快递服务或挂号邮寄、邮资预付发出的，则以于设定为通知的地址在接收或拒收之日为有效送达日。Notices given by personal delivery, by courier service or by registered mail, postage prepaid, shall be deemed effectively given on thedate of receipt or refusal at the address specified for notices.9.1.2通知如果是以传真发出的，则以成功传送之日为有效送达日（应以自动生成的传送确认信息为证）。Notices given by facsimile transmission shall be deemed effectively given on the date of successful transmission (as evidenced by anautomatically generated confirmation of transmission).16秘密文件Strictly Confidential9.2为通知的目的，双方地址如下：For the purpose of notices, the addresses of the Parties are as follows:甲方：中传天下信息科技（深圳）有限公司Party A: Zhongchuan Tianxia Information Technology (Shenzhen) Co., Ltd.地址：深圳市南山区高新中三道2号深圳软件园一期五栋401AAddress:401A, Building 5, Phase 1, Shenzhen Software Park, No.2 Gaoxin Zhongsan Road, Nanshan District, Shenzhen收件人：洪婷Attn: Hong Ting乙方：北京中传视讯科技有限公司Party B: Beijing Mobile Vision Technology Co., Ltd地址：北京市朝阳区光华路9号SOHO3QLAB32Address: LAB32, SOHO3Q, No 9, Guanghua Road, Chaoyang District, Beijing.收件人：宋雪松Attn.: Song Xuesong9.3任何一方可按本条规定随时给另一方发出通知来改变其接收通知的地址。Any Party may at any time change its address for notices by a notice delivered to the other Party in accordance with the terms hereof.17秘密文件Strictly Confidential10.协议的转让Assignment10.1乙方不得将其在本协议项下的权利与义务转让给第三方，除非事先征得甲方的书面同意。Without Party A's prior written consent, Party B shall not assign its rights and obligations under this Agreement to any third party.10.2乙方在此同意，甲方可以在其需要时向其他第三方转让其在本协议项下的权利和义务，并在该等转让发生时甲方仅需向乙方发出书面通知，并且无需再就该等转让征得乙方的同意。Party B agrees that Party A may assign its obligations and rights under this Agreement to any third party upon a prior written notice to Party Bbut without the consent of Party B.11.协议的分割性Severability如果本协议有任何一条或多条规定根据任何法律或法规在任何方面被裁定为无效、不合法或不可执行，本协议其余规定的有效性、合法性或可执行性不应因此在任何方面受到影响或损害。双方应通过诚意磋商，争取以法律许可以及双方期望的最大限度内有效的规定取代那些无效、不合法或不可执行的规定，而该等有效的规定所产生的经济效果应尽可能与那些无效、不合法或不能强制执行的规定所产生的经济效果相似。In the event that one or several of the provisions of this Agreement are found to be invalid, illegal or unenforceable in any aspect in accordance with anylaws or regulations, the validity, legality or enforceability of the remaining provisions of this Agreement shall not be affected or compromised in any aspect.The Parties shall strive in good faith to replace such invalid, illegal or unenforceable provisions with effective provisions that accomplish to the greatestextent permitted by law and the intentions of the Parties, and the economic effect of such effective provisions shall be as close as possible to the economiceffect of those invalid, illegal or unenforceable provisions.18秘密文件Strictly Confidential12.协议的修改、补充Amendments and Supplements双方可以书面协议方式对本协议作出修改和补充。经过双方签署的有关本协议的修改协议和补充协议是本协议组成部分，具有与本协议同等的法律效力。Any amendments and supplements to this Agreement shall be in writing. The amendment agreements and supplementary agreements that have beensigned by the Parties and that relate to this Agreement shall be an integral part of this Agreement and shall have the same legal validity as this Agreement.13.语言和副本Language and Counterparts本协议以中文和英文书就，一式二份，甲乙双方各持一份，具有同等效力；中英文版本如有冲突，应以中文版为准。This Agreement is written in both Chinese and English language in two copies, each Party having one copy with equal legal validity; in case there is anyconflict between the Chinese version and the English version, the Chinese version shall prevail.本页其余部分刻意留为空白The Remainder of this page is intentionally left blank19秘密文件Strictly Confidential有鉴于此，双方已使得经其授权的代表于文首所述日期签署了本独家业务合作协议并即生效，以昭信守。IN WITNESS WHEREOF, the Parties have caused their authorized representatives to execute this Exclusive Business Cooperation Agreement as of thedate first above written.甲方：中传天下信息科技（深圳）有限公司（盖章）Party A: Zhongchuan Tianxia Information Technology (Shenzhen) Co., Ltd.(Seal)签字：By: /s/ Hong Ting 姓名：洪婷Name: Hong Ting职务：总经理Title: General Manager20秘密文件Strictly Confidential有鉴于此，双方已使得经其授权的代表于文首所述日期签署了本独家业务合作协议并即生效，以昭信守。IN WITNESS WHEREOF, the Parties have caused their authorized representatives to execute this Exclusive Business Cooperation Agreement as of thedate first above written. 乙方：北京中传视讯科技有限公司（盖章）Party B: Beijing Mobile Vision Technology Co., Ltd. (Seal)签字：By: /s/ Song Xuesong 姓名：宋雪松Name: Song Xuesong职务：董事长Title: Chairman of the Board21秘密文件Strictly ConfidentialEX4.16 4 f20f2017ex416_luokung.htm EXCLUSIVE OPTION AGREEMENT BY AND AMONG ZHONGCHUAN TIANXIA INFORMATION TECHNOLOGY(SHENZHEN) CO., LTD., XUESONG SONG, WEILI CHEN, PING WANG, DONGLAI LIU, AND BEIJING MOBILE VISION TECHNOLOGY CO., LTD., DATEDAUGUST 31, 2015Exhibit 4.16独家购买权协议Exclusive Option Agreement本独家购买权协议 (下称“本协议”) 由以下各方于年月日在中华人民共和国（下称“中国”）北京签订：This Exclusive Option Agreement (this “Agreement”) is executed by and among the Parties below as of in Beijing, the People’s Republic of China (the“China” or “PRC”):甲方：中传天下信息科技（深圳）有限公司，一家依照中国法律设立和存在的外商独资企业，地址为深圳市南山区高新中三道2号深圳软件园一期五栋401A；Party A:Zhongchuan Tianxia Information Technology (Shenzhen) Co., Ltd., a whollyforeignowned enterprise organized and existing under the laws of China,with its address at 401A, Building 5, Phase 1, Shenzhen Software Park, No.2 Gaoxin Zhongsan Road, Nanshan District, Shenzhen.乙方：Party B:a)宋雪松Song Xuesong身份证号码:120112196809040417ID Card No.:120112196809040417住所：天津市河西区广东路中裕园33702Address:Zhongyu Yuan 33702, Guangdong Road, Hexi District, Tianjinb)陈蔚力Chen Weili身份证号码:120106197309240516ID Card No.:120106197309240516住所：广东省深圳市宝安区宝城上川路15号Address:Baocheng Shangchuan Road 15, Baoan District, Shenzhen, Guangdong1秘密文件Strictly Confidentialc)王平Wang Ping身份证号码:35020319691030401xID Card No.:35020319691030401x住所：广东省深圳市南山区高新南环路36号彩虹之岸12栋4AAddress:Caihong Zhi’an Building No.12 Suite 4A, Gaoxin Nanhuan Road 36, Nanshan District, Shenzhen, Guangdongd)刘东来Liu Donglai身份证号码:120107196810103912ID Card No.:120107196810103912住所：天津市和平区南京路诚基经贸中心1号楼2门1702号Address:No 1702, Door 2, Build 1, Chengji Economic and Trade Centre, Nanjing Road, Heping District, Tianjin.丙方：北京中传视讯科技有限公司，一家依照中国法律设立和存在的有限责任公司，地址为北京市朝阳区光华路9号SOHO3QLAB32，统一社会信用代码为9111010576215249XM；Party C:Beijing Mobile Vision Technology Co., Ltd., a limited company duly registered in China, with its address at LAB32, SOHO3Q, No 9, Guanghua Road,Chaoyang District, Beijing and its uniform social credit code of 9111010576215249XM.2秘密文件Strictly Confidential在本协议中，甲方、乙方和丙方以下各称“一方”，合称“各方”。In this Agreement, each of Party A, Party B and Party C shall be referred to as a “Party” respectively, and they shall be collectively referred to as the“Parties”.鉴于，乙方系丙方股东并合计持有丙方100%股权，乙方将按本协议之条款授予甲方购买全部或部分该股权的权利。Whereas, Party B are the shareholders of Party C and jointly hold 100% of the equity interest in Party C, and Party B are willing to grant to Party A the rightto acquire such equity interest, in whole or in part, on the terms herein.现各方协商一致，达成如下协议：Now therefore, upon mutual discussion and negotiation, the Parties have reached the following agreement:1.股权买卖Sale and Purchase of Equity Interest1.1授予权利Option Granted乙方在此不可撤销地授予甲方在中国法律允许的前提下，按照甲方自行决定的行使步骤，并按照本协议第1.3条所述的价格，随时一次或多次从乙方购买或指定一人或多人(“被指定人”)从乙方购买其目前和将来所持有的丙方的全部或部分股权（无论乙方出资额和/或持股比例将来是否发生变化）的一项不可撤销的专有权(“股权购买权”)。除甲方和被指定人外，任何第三人均不得享有股权购买权或其他与乙方股权有关的权利。丙方特此同意乙方向甲方授予股权购买权。本款及本协议所规定的“人”指个人、公司、合营企业、合伙、企业、信托或非公司组织。Party B hereby irrevocably grant Party A an irrevocable and exclusive right to purchase, or designate one or more persons (each, a “Designee”) topurchase the equity interests in Party C now and in the future held by Party B (regardless whether Party B’s capital contribution amount and/orpercentage of shareholding will be changed in the future) once or at multiple times at any time in part or in whole at Party A’s sole and absolutediscretion to the extent permitted by Chinese laws and at the price described in Section 1.3 herein (such right being the “Equity Interest PurchaseOption”). Except for Party A and the Designee(s), no other person shall be entitled to the Equity Interest Purchase Option or other rights withrespect to the equity interests of Party B. Party C hereby agrees to the grant by Party B of the Equity Interest Purchase Option to Party A. Theterm “person” as used herein shall refer to individuals, corporations, partnerships, partners, enterprises, trusts or noncorporate organizations.3秘密文件Strictly Confidential1.2行使步骤Steps for Exercise of Equity Interest Purchase Option甲方行使其股权购买权以符合中国法律和法规的规定为前提。甲方行使股权购买权时，应向乙方发出书面通知(“股权购买通知”)，股权购买通知应载明以下事项：(a)甲方关于行使股权购买权的决定；(b)甲方拟从乙方购买的股权份额(“被购买的股权”)；和(c)被购买的股权的买入日期。Subject to the provisions of the laws and regulations of China, Party A may exercise the Equity Interest Purchase Option by issuing a writtennotice to Party B (the “Equity Interest Purchase Option Notice”), specifying: (a) Party A’s decision to exercise the Equity Interest PurchaseOption; (b) the portion of equity interests to be purchased from Party B (the “Optioned Interests”); and (c) the date for purchasing the OptionedInterests.1.3股权买价Equity Interest Purchase Price被购买的股权的买价（“股权买价”）应是行权当时中国法律允许的最低价格。乙方收到该股权对价后，应当提供给丙方与该股权买价相同金额的借款，该借款的期限为20年，且为无息。乙方应当在该借款期限届满时就该借款放弃对丙方的债权。The purchase price of the Optioned Interests (the “Equity Interest Purchase Price”) shall be the lowest price permitted by the laws of China. Afterreceiving the Equity Interest Purchase Price, Party B shall make an interestfree loan equivalent to the amount of Equity Interest Purchase Price toParty C, of which term is 20 years. Each member of Party B shall give up his(her) creditor’s right when the loan term expires.4秘密文件Strictly Confidential1.4转让被购买股权Transfer of Optioned Interests甲方每次行使股权购买权时：For each exercise of the Equity Interest Purchase Option:1.4.1乙方应责成丙方及时召开股东会会议，在该会议上，应通过批准乙方向甲方和/或被指定人转让被购买的股权的决议；Party B shall cause Party C to promptly convene a shareholders meeting, at which a resolution shall be adopted approving Party B’stransfer of the Optioned Interests to Party A and/or the Designee(s);1.4.2乙方应就其向甲方和/或被指定人转让被购买股权取得丙方其他股东同意该转让并放弃优先购买权的书面声明。Party B shall obtain written statements from the other shareholder of Party C giving consent to the transfer of the equity interest to PartyA and/or the Designee(s) and waiving any right of first refusal related thereto.1.4.3乙方应与甲方和/或(在适用的情况下)被指定人按照本协议及股权购买通知的规定，为每次转让签订股权转让协议；Party B shall execute a share transfer contract with respect to each transfer with Party A and/or each Designee (whichever is applicable),in accordance with the provisions of this Agreement and the Equity Interest Purchase Option Notice regarding the Optioned Interests;5秘密文件Strictly Confidential1.4.4有关方应签署所有其他所需协议、协议或文件，取得全部所需的政府批准和同意，并采取所有所需行动，在不附带任何担保权益的情况下，将被购买的股权的有效所有权转移给甲方和/或被指定人并使甲方和/或被指定人成为被购买的股权的登记在册所有人。为本款及本协议的目的，“担保权益”包括担保、抵押、第三方权利或权益，任何购股权、收购权、优先购买权、抵销权、所有权扣留或其他担保安排等；但为了明确起见，不包括在本协议、乙方股权质押协议项下产生的任何担保权益。本款及本协议所规定的“乙方股权质押协议”指甲方、乙方和丙方于本协议签署之日签订的股权质押协议，根据股权质押协议，乙方为担保丙方能履行丙方与甲方签订的独家业务合作协议项下的义务，而向甲方质押其在丙方的全部乙方股权。The relevant Parties shall execute all other necessary contracts, agreements or documents, obtain all necessary government licenses andpermits and take all necessary actions to transfer valid ownership of the Optioned Interests to Party A and/or the Designee(s),unencumbered by any security interests, and cause Party A and/or the Designee(s) to become the registered owner(s) of the OptionedInterests. For the purpose of this Section and this Agreement, “security interests” shall include securities, mortgages, third party’s rightsor interests, any stock options, acquisition right, right of first refusal, right to offset, ownership retention or other security arrangements,but shall be deemed to exclude any security interest created by this Agreement and Party B’s Equity Interest Pledge Agreement. “PartyB’s Equity Interest Pledge Agreement” as used in this Section and this Agreement shall refer to the Equity Interest Pledge Agreementexecuted by and among Party A, Party B and Party C on the date of this Agreement, whereby Party B pledge all of their equity interests inParty C to Party A, in order to guarantee Party C’s performance of its obligations under the Exclusive Business Corporation Agreementexecuted by and between Party C and Party A.6秘密文件Strictly Confidential2.知识产权独家购买权Exclusive Option regarding the Intellectual Property Rights2.1本协议签订之日起，若乙方拟转让、出售或以其他方式处置（任一处置方式以下简称“转让”）其拥有或持有的全部或部分知识产权（以下称“知识产权”，定义见第2.4条），甲方有权独家购买该等知识产权。From the date hereof, if Party B proposes to transfer, sell or dispose of (each, a “transfer”) all or any part of the intellectual property rights ownedor held by Party B (“IPR”), Party A shall have exclusive option.2.2若乙方有意转让全部或部分知识产权，应事先向甲方发出书面通知(“转让通知”)，转让通知应载明以下事项：(a) 乙方关于转让知识产权的意向；(b) 乙方拟转让的知识产权清单(“拟转让知识产权”)及转让的价格和其他条件。转让通知视为乙方向甲方发出的一份要约，按照该要约，乙方同意按转让通知中指定的价格条件向甲方转让全部或部分拟转让知识产权。Prior to Party B proposes to transfer all or any part of its IPR, Party B shall give Party A a written notice (“Transfer Notice”), which shall specify (a)Party B’s intention to make the transfer; (b) the list of IPR to be transferred (“Offered IPR”) and the consideration and other conditions uponwhich the transfer is to be made. The Transfer Notice constitutes Party B’s offer given to Party A, pursuant to which, Party B agrees to transfer allor any part of its Offered IPR to Party A based on the same conditions described in the Transfer Notice.7秘密文件Strictly Confidential2.3甲方收到转让通知后，有权在30日内选择按照转让通知中列明的转让价格和条件购买拟转让知识产权。如果甲方行使其独家购买权，双方应于甲方收到转让通知后45日内签订有关的知识产权转让协议，乙方应办理法律规定的知识产权转让的批准和登记手续。Party A shall have an option for a period of 30 days from Party A’s receipt of the Transfer Notice to elect to purchase the Offered IPR at the sameprice and subject to the same conditions as described in the Transfer Notice. If Party A decides to exercise its exclusive option, the parties shallenter into relevant IPR transfer agreement within 45 days upon Party A’s receipt of the Transfer Notice and Party B is responsible to complete allrelated approvals and registrations formalities as prescribed by the PRC law.2.4本协议第2条所称“知识产权”指任何知识产权，包括但不限于著作权、专利权、专利申请权、商标、域名、软件、专有技术，并包括前述知识产权申请权利以及登记注册的权利，以及其他所有与前述知识产权有关的权利和权益。The “IPR” referred to in this Article 2 means any intellectual property rights, including, without limitations, copyrights, patents, patentapplications, trademarks, domain names, software and knowhow together with (a) all rights to apply for or register any of the foregoing and (b) allother rights and interests to any of the foregoing.8秘密文件Strictly Confidential3.承诺Covenants3.1有关丙方的承诺Covenants regarding Party C乙方（作为丙方的股东）和丙方在此承诺：Party B (as the shareholders of Party C) and Party C hereby covenant as follows:3.1.1未经甲方的事先书面同意，不以任何形式补充、更改或修改丙方公司章程文件，增加或减少其注册资本，或以其他方式改变其注册资本结构；Without the prior written consent of Party A, they shall not in any manner supplement, change or amend the articles of association andbylaws of Party C, increase or decrease its registered capital, or change its structure of registered capital in other manners;3.1.2按照良好的财务和商业标准及惯例，保持其公司的存续，审慎地及有效地经营其业务和处理事务；They shall maintain Party C’s corporate existence in accordance with good financial and business standards and practices by prudentlyand effectively operating its business and handling its affairs;3.1.3未经甲方的事先书面同意，不在本协议签署之日起的任何时间出售、转让、抵押或以其他方式处置丙方的任何资产、业务或收入的合法或受益权益，或允许在其上设置任何其他担保权益；Without the prior written consent of Party A, they shall not at any time following the date hereof, sell, transfer, mortgage or dispose of inany manner any assets of Party C or legal or beneficial interest in the business or revenues of Party C, or allow the encumbrance thereonof any security interest;3.1.4未经甲方的事先书面同意，不发生、继承、保证或容许存在任何债务，但(i)正常或日常业务过程中产生而不是通过借款方式产生的债务；和(ii)已向甲方披露和得到甲方书面同意的债务除外；Without the prior written consent of Party A, they shall not incur, inherit, guarantee or suffer the existence of any debt, except for (i)debts incurred in the ordinary course of business other than through loans; and (ii) debts disclosed to Party A for which Party A’swritten consent has been obtained;9秘密文件Strictly Confidential3.1.5一直在正常业务过程中经营所有业务，以保持丙方的资产价值，不进行任何足以影响其经营状况和资产价值的作为/不作为；They shall always operate all of Party C’s businesses during the ordinary course of business to maintain the asset value of Party C andrefrain from any action/omission that may affect Party C’s operating status and asset value;3.1.6未经甲方的事先书面同意，不得让丙方签订任何重大协议，但在正常业务过程中签订的协议除外(就本段而言，如果一份协议的价值超过【人民币10万元】，即被视为重大协议)；Without the prior written consent of Party A, they shall not cause Party C to execute any major contract, except the contracts in theordinary course of business (for purpose of this subsection, a contract with a value exceeding RMB 100,000 shall be deemed a majorcontract);3.1.7未经甲方的事先书面同意，丙方不得向任何人提供贷款或信贷；Without the prior written consent of Party A, they shall not cause Party C to provide any person with any loan or credit;3.1.8应甲方要求，向其提供所有关于丙方的营运和财务状况的资料；They shall provide Party A with information on Party C’s business operations and financial condition at Party A’s request;10秘密文件Strictly Confidential3.1.9如甲方提出要求，丙方应从甲方接受的保险公司处购买和持有有关其资产和业务的保险，该保险的金额和险种应与经营类似业务的公司一致；If requested by Party A, they shall procure and maintain insurance in respect of Party C’s assets and business from an insurance carrieracceptable to Party A, at an amount and type of coverage typical for companies that operate similar businesses;3.1.10未经甲方的事先书面同意，丙方不得与任何人合并或联合，或对任何人进行收购或投资；Without the prior written consent of Party A, they shall not cause or permit Party C to merge, consolidate with, acquire or invest in anyperson;3.1.11将发生的或可能发生的与丙方资产、业务或收入有关的诉讼、仲裁或行政程序立即通知甲方；They shall immediately notify Party A of the occurrence or possible occurrence of any litigation, arbitration or administrative proceedingsrelating to Party C’s assets, business or revenue;3.1.12为保持丙方对其全部资产的所有权，签署所有必要或适当的文件，采取所有必要或适当的行动和提出所有必要或适当的控告或对所有索偿进行必要和适当的抗辩；To maintain the ownership by Party C of all of its assets, they shall execute all necessary or appropriate documents, take all necessary orappropriate actions and file all necessary or appropriate complaints or raise necessary and appropriate defenses against all claims;11秘密文件Strictly Confidential3.1.13未经甲方事先书面同意，不得以任何形式派发股息予各股东，但一经甲方要求，丙方应立即将其所有可分配利润全部立即分配给其各股东；及Without the prior written consent of Party A, they shall ensure that Party C shall not in any manner distribute dividends to itsshareholders, provided that upon Party A’s written request, Party C shall immediately distribute all distributable profits to itsshareholders; and3.1.14根据甲方的要求，委任由其指定的任何人士出任丙方的董事和/或执行董事。At the request of Party A, they shall appoint any persons designated by Party A as the director and/or executive director of Party C.3.2乙方和丙方的承诺Covenants of Party B and Party C乙方承诺：Party B hereby covenant as follows:3.2.1未经甲方的事先书面同意，不出售、转让、抵押或以其他方式处置其拥有的丙方的股权的合法或受益权益，或允许在其上设置任何其他担保权益，但根据乙方签署的《股权质押协议》在该股权上设置的质押则除外；Without the prior written consent of Party A, Party B shall not sell, transfer, mortgage or dispose of in any other manner any legal orbeneficial interest in the equity interests in Party C held by Party B, or allow the encumbrance thereon of any security interest, except forthe pledge placed on these equity interests in accordance with Party B’s Equity Interest Pledge Agreement;12秘密文件Strictly Confidential3.2.2促使丙方股东会和/或执行董事不批准在未经甲方的事先书面同意的情况下，出售、转让、抵押或以其他方式处置任何乙方持有之丙方的股权的合法权益或受益权，或允许在其上设置任何其他担保权益，但批准根据乙方签署的《股权质押协议》在乙方股权上设置的质押则除外；Party B shall cause the shareholders’ meeting and/or the executive director of Party C not to approve the sale, transfer, mortgage ordisposition in any other manner of any legal or beneficial interest in the equity interests in Party C held by Party B, or allow theencumbrance thereon of any security interest, without the prior written consent of Party A, except for the pledge placed on these equityinterests in accordance with Party B’s Equity Interest Pledge Agreement;3.2.3未经甲方的事先书面同意的情况下，对于丙方与任何人合并或联合，或对任何人进行收购或投资，乙方将促成丙方股东会或执行董事不予批准；Party B shall cause the shareholders’ meeting or the executive director of Party C not to approve the merger or consolidation with anyperson, or the acquisition of or investment in any person, without the prior written consent of Party A;3.2.4将发生的或可能发生的任何关于其所拥有的股权的诉讼、仲裁或行政程序立即通知甲方；Party B shall immediately notify Party A of the occurrence or possible occurrence of any litigation, arbitration or administrativeproceedings relating to the equity interests in Party C held by Party B;13秘密文件Strictly Confidential3.2.5促使丙方股东会或执行董事表决赞成本协议规定的被购买的股权的转让并应甲方之要求采取其他任何行动；Party B shall cause the shareholders’ meeting or the executive director of Party C to vote their approval of the transfer of the OptionedInterests as set forth in this Agreement and to take any and all other actions that may be requested by Party A;3.2.6为保持其对股权的所有权，签署所有必要或适当的文件，采取所有必要或适当的行动和提出所有必要或适当的控告或对所有索偿进行必要和适当的抗辩；To the extent necessary to maintain Party B’s ownership in Party C, Party B shall execute all necessary or appropriate documents, take allnecessary or appropriate actions and file all necessary or appropriate complaints or raise necessary and appropriate defenses against allclaims;3.2.7应甲方的要求，委任由其指定的任何人士出任丙方的董事和/或执行董事；Party B shall appoint any designee of Party A as the director and/or executive director of Party C, at the request of Party A;3.2.8经甲方随时要求，应向其指定的代表在任何时间无条件地根据本协议的股权购买权立即转让其股权，并放弃其对其他现有股东进行上述股权转让所享有的优先购买权（如有的话）；和At the request of Party A at any time, Party B shall promptly and unconditionally transfer its equity interests in Party C to Party A’sDesignee(s) in accordance with the Equity Interest Purchase Option under this Agreement, and Party B hereby waives its right of firstrefusal (if any) to the share transfer by the other existing shareholder of Party C (if any); and14秘密文件Strictly Confidential3.2.9严格遵守本协议及各方共同或分别签订的其他协议的各项规定，切实履行该等协议项下的各项义务，并不进行任何足以影响该等协议的有效性和可执行性的作为/不作为。如果乙方对于本协议项下或乙方股权质押协议下或对甲方的授权委托书中的股权，还留存有任何权利，除非甲方书面指示，否则乙方仍不得行使该权利。Party B shall strictly abide by the provisions of this Agreement and other contracts jointly or separately executed by and among Party B,Party C and Party A, perform the obligations hereunder and thereunder, and refrain from any action/omission that may affect theeffectiveness and enforceability thereof. To the extent that Party B has any remaining rights with respect to the equity interests subject tothis Agreement hereunder or under Party B’s Equity Interest Pledge Agreement or under the Power of Attorney granted in favor of PartyA, Party B shall not exercise such rights except in accordance with the written instructions of Party A.4.陈述和保证Representations and Warranties乙方和丙方特此在本协议签署之日和每一个转让日向甲方共同及分别陈述和保证如下：Party B and Party C hereby represent and warrant to Party A, jointly and severally, as of the date of this Agreement and each date of transfer of theOptioned Interests, that:4.1其具有签订和交付本协议和其为一方的、根据本协议为每一次转让被购买的股权而签订的任何股权转让协议(各称为"转让协议")，并履行其在本协议和任何转让协议项下的义务的权力和能力。乙方和丙方同意在甲方行使购买权时，他们将签署与本协议条款一致的转让协议。本协议和其是一方的各转让协议一旦签署后，构成或将对其构成合法、有效及具有约束力的义务并可按照其条款对其强制执行；They have the authority to execute and deliver this Agreement and any share transfer contracts to which they are a party concerning theOptioned Interests to be transferred thereunder (each, a “Transfer Contracts”), and to perform their obligations under this Agreement and anyTransfer Contracts. Party B and Party C agree to enter into Transfer Contracts consistent with the terms of this Agreement upon Party A’s exerciseof the Equity Interest Purchase Option. This Agreement and the Transfer Contracts to which they are a party constitute or will constitute theirlegal, valid and binding obligations and shall be enforceable against them in accordance with the provisions thereof;15秘密文件Strictly Confidential4.2无论是本协议或任何转让协议的签署和交付还是其在本协议或任何转让协议项下的义务的履行均不会：(i)导致违反任何有关的中国法律；(ii)与丙方章程或其他组织文件相抵触；(iii)导致违反其是一方或对其有约束力的任何协议或文件，或构成其是一方或对其有约束力的任何协议或文件项下的违约；(iv)导致违反有关向任何一方颁发的任何许可或批准的授予和(或)继续有效的任何条件；或(v)导致向任何一方颁发的任何许可或批准中止或被撤销或附加条件；The execution and delivery of this Agreement or any Transfer Contracts and the obligations under this Agreement or any Transfer Contracts shallnot: (i) cause any violation of any applicable laws of China; (ii) be inconsistent with the articles of association, bylaws or other organizationaldocuments of Party C; (iii) cause the violation of any contracts or instruments to which they are a party or which are binding on them, orconstitute any breach under any contracts or instruments to which they are a party or which are binding on them; (iv) cause any violation of anycondition for the grant and/or continued effectiveness of any licenses or permits issued to either of them; or (v) cause the suspension orrevocation of or imposition of additional conditions to any licenses or permits issued to either of them;4.3乙方对其在丙方拥有的股权拥有良好和可出售的所有权，除乙方签署的《股权质押协议》外，乙方在上述股权上没有设置任何担保权益；Party B have a good and merchantable title to the equity interests in Party C they hold. Except for Party B’s Equity Interest Pledge Agreement,Party B have not placed any security interest on such equity interests;16秘密文件Strictly Confidential4.4目前没有悬而未决的或构成威胁的与丙方的股权、丙方资产有关的或与丙方有关的诉讼、仲裁或行政程序。There are no pending or threatened litigation, arbitration or administrative proceedings relating to the equity interests in Party C, assets of Party Cor Party C.5.生效日Effective Date5.1本协议于各方签署本协议之日生效，有效期10年，经甲方选择可再延长10年。This Agreement shall become effective upon the date hereof, and remain effective for a term of 10 years, and may be renewed for an additional 10years at Party A’s election.5.2若丙方股东发生变化，由新股东签署此协议，在此协议签署之日，原协议自动视为无效。In the event of a change in the shareholders of Party C, the new shareholder should sign this agreement and the original agreement willautomatically be deemed invalid on the date of signing of this agreement.17秘密文件Strictly Confidential6.适用法律与争议解决Governing Law and Resolution of Disputes6.1适用法律Governing law本协议的订立、效力、解释、履行、修改和终止以及争议解决均适用中国正式公布并可公开得到的法律。对中国正式公布并可公开得到的法律没有规定的事项，将适用国际法律原则和惯例。The execution, effectiveness, construction, performance, amendment and termination of this Agreement and the resolution of disputes hereundershall be governed by the formally published and publicly available laws of China. Matters not covered by formally published and publiclyavailable laws of China shall be governed by international legal principles and practices.6.2争议的解决方法Methods of Resolution of Disputes因解释和履行本协议而发生的任何争议，本协议各方应首先通过友好协商的方式加以解决。如果在一方向其他方发出要求协商解决的书面通知后30天之内争议仍然得不到解决，则任何一方均可将有关争议提交给中国国际经济贸易仲裁委员会，由该会按照其届时有效的仲裁规则仲裁解决。仲裁应在北京进行，使用之语言为中文。仲裁裁决是终局性的，对各方均有约束力。In the event of any dispute with respect to the construction and performance of this Agreement, the Parties shall first resolve the dispute throughfriendly negotiations. In the event the Parties fail to reach an agreement on the dispute within 30 days after either Party’s request to the otherParties for resolution of the dispute through negotiations, either Party may submit the relevant dispute to the China International Economic andTrade Arbitration Commission for arbitration, in accordance with its then effective arbitration rules. The arbitration shall be conducted in Beijing,and the language used in arbitration shall be Chinese. The arbitration award shall be final and binding on all Parties.18秘密文件Strictly Confidential7.税款、费用Taxes and Fees每一方应承担根据中国法律因准备和签署本协议和各转让协议以及完成本协议和各转让协议拟定的交易而由该方发生的或对其征收的任何和全部的转让和注册的税、花费和费用。Each Party shall pay any and all transfer and registration tax, expenses and fees incurred thereby or levied thereon in accordance with the laws of China inconnection with the preparation and execution of this Agreement and the Transfer Contracts, as well as the consummation of the transactionscontemplated under this Agreement and the Transfer Contracts.8.通知Notices8.1本协议项下要求或发出的所有通知和其他通信应通过专人递送、挂号邮寄、邮资预付或商业快递服务或传真的方式发到该方下列地址。每一通知还应再以电子邮件送达。该等通知视为有效送达的日期按如下方式确定：All notices and other communications required or permitted to be given pursuant to this Agreement shall be delivered personally or sent byregistered mail, postage prepaid, by a commercial courier service or by facsimile transmission to the address of such Party set forth below. Aconfirmation copy of each notice shall also be sent by email. The dates on which notices shall be deemed to have been effectively given shall bedetermined as follows:8.1.1通知如果是以专人递送、快递服务或挂号邮寄、邮资预付发出的，则以于设定为通知的地址在接收或拒收之日为有效送达日。Notices given by personal delivery, by courier service or by registered mail, postage prepaid, shall be deemed effectively given on thedate of receipt or refusal at the address specified for notices.19秘密文件Strictly Confidential8.1.2通知如果是以传真发出的，则以成功传送之日为有效送达日（应以自动生成的传送确认信息为证）。Notices given by facsimile transmission shall be deemed effectively given on the date of successful transmission (as evidenced by anautomatically generated confirmation of transmission).8.2为通知的目的，各方地址如下：For the purpose of notices, the addresses of the Parties are as follows:甲方：中传天下信息科技（深圳）有限公司Party A:Zhongchuan Tianxia Information Technology (Shenzhen) Co., Ltd.地址：深圳市南山区高新中三道2号深圳软件园一期五栋401AAddress:401A, Building 5, Phase 1, Shenzhen Software Park, No.2 Gaoxin Zhongsan Road, Nanshan District, Shenzhen.收件人：洪婷Attn:Hong Ting乙方：Party B: 宋雪松Song Xuesong住所：天津市河西区广东路中裕园33702Address:Zhongyu Yuan 33702, Guangdong Road, Hexi District, Tianjin20秘密文件Strictly Confidential陈蔚力Chen Weili住所：广东省深圳市宝安区宝城上川路15号Address:Baocheng Shangchuan Road 15, Baoan District, Shenzhen, Guangdong王平Wang Ping住所：广东省深圳市南山区高新南环路36号彩虹之岸12栋4AAddress:Caihong Zhi’an Building No.12 Suite 4A, Gaoxin Nanhuan Road 36, Nanshan District, Shenzhen, Guangdong刘东来Liu Donglai住所：天津市和平区南京路诚基经贸中心1号楼2门1702号Address:No 1702, Door 2, Build 1, Chengji Economic and Trade Centre, Nanjing Road, Heping District, Tianjin.丙方：北京中传视讯科技有限公司Party C:Beijing Mobile Vision Technology Co., Ltd.地址：北京市朝阳区光华路9号SOHO3QLAB32Address: LAB32, SOHO3Q, No 9, Guanghua Road, Chaoyang District, Beijing .收件人：宋雪松Attn: Song Xuesong8.3任何一方可按本条规定随时给其他方发出通知来改变其接收通知的地址。Any Party may at any time change its address for notices by a notice delivered to the other Parties in accordance with the terms hereof.21秘密文件Strictly Confidential9.保密责任Confidentiality各方承认及确定彼此就有关本协议而交换的任何口头或书面资料均属机密资料。各方应当对所有该等资料予以保密，而在未得其他方书面同意前，不得向任何第三者披露任何有关资料，惟下列情况除外：(a)公众人士知悉或将会知悉该等资料(并非由接受资料之一方擅自向公众披露)；(b)适用法律法规或股票交易的规则或规例所需披露之资料；或(c)由任何一方就本协议所述交易而需向其法律或财务顾问披露之资料而该法律或财务顾问亦需遵守与本条款相类似之保密责任。如任何一方工作人员或聘请机构的泄密均视为该方的泄密，需依本协议承担违约责任。无论本协议以任何理由终止，本条款仍然生效。The Parties acknowledge that any oral or written information exchanged among them with respect to this Agreement is confidential information. Each Partyshall maintain the confidentiality of all such information, and without obtaining the written consent of other Parties, it shall not disclose any relevantinformation to any third parties, except in the following circumstances: (a) such information is or will be in the public domain (provided that this is not theresult of a public disclosure by the receiving party); (b) information disclosed as required by applicable laws or rules or regulations of any stock exchange;or (c) information required to be disclosed by any Party to its legal counsel or financial advisor regarding the transaction contemplated hereunder, and suchlegal counsel or financial advisor are also bound by confidentiality duties similar to the duties in this section. Disclosure of any confidential information bythe staff members or agency hired by any Party shall be deemed disclosure of such confidential information by such Party, which Party shall be held liablefor breach of this Agreement. This Section shall survive the termination of this Agreement for any reason.22秘密文件Strictly Confidential10.进一步保证Further Warranties各方同意迅速签署为执行本协议的各项规定和目的而合理需要的或对其有利的文件，以及为执行本协议的各项规定和目的而采取合理需要的或对其有利的进一步行动。The Parties agree to promptly execute documents that are reasonably required for or are conducive to the implementation of the provisions and purposes ofthis Agreement and take further actions that are reasonably required for or are conducive to the implementation of the provisions and purposes of thisAgreement.11.其他Miscellaneous11.1修订、修改与补充Amendment, change and supplement对本协议作出修订、修改与补充，必须经每一方签署书面协议。Any amendment, change and supplement to this Agreement shall require the execution of a written agreement by all of the Parties.11.2完整协议Entire agreement除了在本协议签署后所作出的书面修订、补充或修改以外，本协议构成本协议各方就本协议标的物所达成的完整协议，取代在此之前就本协议标的物所达成的所有口头或书面的协商、陈述和协议。 Except for the amendments, supplements or changes in writing executed after theexecution of this Agreement, this Agreement shall constitute the entire agreement reached by and among the Parties hereto with respect to thesubject matter hereof, and shall supercede all prior oral and written consultations, representations and contracts reached with respect to thesubject matter of this Agreement.23秘密文件Strictly Confidential11.3标题Headings本协议的标题仅为方便阅读而设，不应被用来解释、说明或在其他方面影响本协议各项规定的含义。The headings of this Agreement are for convenience only, and shall not be used to interpret, explain or otherwise affect the meanings of theprovisions of this Agreement.11.4语言Language本协议以中文和英文书就，一式八份，乙方共计六名股东以及甲方、丙方各持一份，具有同等效力；中英文版本如有冲突，应以中文版为准。This Agreement is written in both Chinese and English language in eight copies, the 6 shareholders of Party B, Party A and Party C having onecopy with equal legal validity respectively; in case there is any conflict between the Chinese version and the English version, the Chinese versionshall prevail.11.5可分割性Severability如果本协议有任何一条或多条规定根据任何法律或法规在任何方面被裁定为无效、不合法或不可执行，本协议其余规定的有效性、合法性或可执行性不应因此在任何方面受到影响或损害。各方应通过诚意磋商，争取以法律许可以及各方期望的最大限度内有效的规定取代那些无效、不合法或不可执行的规定，而该等有效的规定所产生的经济效果应尽可能与那些无效、不合法或不能强制执行的规定所产生的经济效果相似。In the event that one or several of the provisions of this Agreement are found to be invalid, illegal or unenforceable in any aspect in accordancewith any laws or regulations, the validity, legality or enforceability of the remaining provisions of this Agreement shall not be affected orcompromised in any respect. The Parties shall strive in good faith to replace such invalid, illegal or unenforceable provisions with effectiveprovisions that accomplish to the greatest extent permitted by law and the intentions of the Parties, and the economic effect of such effectiveprovisions shall be as close as possible to the economic effect of those invalid, illegal or unenforceable provisions.24秘密文件Strictly Confidential11.6继任者Successors本协议对各方各自的继任者和各方所允许的受让方应具有约束力并对其有利。This Agreement shall be binding on and shall inure to the interest of the respective successors of the Parties and the permitted assigns of suchParties.11.7继续有效Survival11.7.1协议期满或提前终止前因本协议而发生的或到期的任何义务在本协议期满或提前终止后继续有效。Any obligations that occur or that are due as a result of this Agreement upon the expiration or early termination of this Agreement shallsurvive the expiration or early termination thereof.11.7.2本协议第5、6、9条和本第11.7条的规定在本协议终止后继续有效。The provisions of Articles 5, 6, 9 and this Section 11.7 shall survive the termination of this Agreement.25秘密文件Strictly Confidential11.8弃权Waivers任何一方可以对本协议的条款和条件作出弃权，但必须经书面作出并经各方签字。一方在某种情况下就其他方的违约所作的弃权不应被视为该方在其他情况下就类似的违约已经对其他方作出弃权。Any Party may waive the terms and conditions of this Agreement, provided that such a waiver must be provided in writing and shall require thesignatures of the Parties. No waiver by any Party in certain circumstances with respect to a breach by other Parties shall operate as a waiver bysuch a Party with respect to any similar breach in other circumstances.本页其余部分刻意留为空白The Remainder of this page is intentionally left blank26秘密文件Strictly Confidential有鉴于此，各方已自行或使得其各自授权代表于文首所载日期签署本独家购买权协议。IN WITNESS WHEREOF, the Parties have executed, or caused their respective duly authorized representatives to execute, this Exclusive Option Agreement as ofthe date first above written.甲方：中传天下信息科技（深圳）有限公司（盖章）Party A: Zhongchuan Tianxia Information Technology (Shenzhen) Co., Ltd. (Seal)签字：By:/s/ Hong Ting姓名：洪婷Name: Hong Ting职务：总经理Title: General Manager秘密文件 Strictly Confidential有鉴于此，各方已自行或使得其各自授权代表于文首所载日期签署本独家购买权协议。IN WITNESS WHEREOF, the Parties have executed, or caused their respective duly authorized representatives to execute, this Exclusive Option Agreement as ofthe date first above written.乙方：Party B:宋雪松Song Xuesong签字：By:/s/ Song Xuesong秘密文件 Strictly Confidential有鉴于此，各方已自行或使得其各自授权代表于文首所载日期签署本独家购买权协议。IN WITNESS WHEREOF, the Parties have executed, or caused their respective duly authorized representatives to execute, this Exclusive Option Agreement as ofthe date first above written.乙方：Party B:陈蔚力Chen Weili签字：By:/s/ Chen Weili秘密文件 Strictly Confidential有鉴于此，各方已自行或使得其各自授权代表于文首所载日期签署本独家购买权协议。IN WITNESS WHEREOF, the Parties have executed, or caused their respective duly authorized representatives to execute, this Exclusive Option Agreement as ofthe date first above written.乙方：Party B:王平Wang Ping签字：By:/s/ Wang Ping秘密文件 Strictly Confidential有鉴于此，各方已自行或使得其各自授权代表于文首所载日期签署本独家购买权协议。IN WITNESS WHEREOF, the Parties have executed, or caused their respective duly authorized representatives to execute, this Exclusive Option Agreement as ofthe date first above written.乙方：Party B:刘东来Liu Donglai签字：By:/s/ Liu Donglai秘密文件 Strictly Confidential有鉴于此，各方已自行或使得其各自授权代表于文首所载日期签署本独家购买权协议。IN WITNESS WHEREOF, the Parties have executed, or caused their respective duly authorized representatives to execute, this Exclusive Option Agreement as ofthe date first above written.丙方：北京中传视讯科技有限公司（盖章）Party B: Beijing Mobile Vision Technology Co., Ltd. (Seal)签字：By:/s/ Song Xuesong姓名：宋雪松Name:Song Xuesong职务：董事长Title:Chairman of the Board秘密文件 Strictly ConfidentialEX4.17 5 f20f2017ex417_luokung.htm EQUITY INTEREST PLEDGE AGREEMENT BY AND AMONG ZHONGCHUAN TIANXIA INFORMATION TECHNOLOGY(SHENZHEN) CO., LTD., XUESONG SONG, WEILI CHEN, PING WANG, DONGLAI LIU, AND BEIJING MOBILE VISION TECHNOLOGY CO., LTD., DATEDAUGUST 31, 2015Exhibit 4.17股权质押协议Equity Interest Pledge Agreement本股权质押协议（下称"本协议”）由下列各方于年月日在中华人民共和国（下称“中国”）北京签订：This Equity Interest Pledge Agreement (this "Agreement") has been executed by and among the following parties on in Beijing, the People’sRepublic of China (the “China” or “PRC”):甲方：中传天下信息科技（深圳）有限公司（下称“质权人”）Party A: Zhongchuan Tianxia Information Technology (Beijing) Co., Ltd. (“Pledgee”)地址：深圳市南山区高新中三道2号深圳软件园一期五栋401AAddress: 401A, Building 5, Phase 1, Shenzhen Software Park, No.2 Gaoxin Zhongsan Road, Nanshan District, Shenzhen统一社会信用代码： 91440300565701058RUniform Social Credit Code: 91440300565701058R乙方(下称“出质人”)：Party B ( “Pledgors”):a)宋雪松Song Xuesong身份证号码:ID Card No.:b)陈蔚力Chen Weili身份证号码:ID Card No.:1秘密文件 Strictly Confidentialc)王平Wang Ping身份证号码:ID Card No.:d)刘东来Liu Donglai身份证号码:ID Card No.:丙方：北京中传视讯科技有限公司Party C: Beijing Mobile Vision Technology Co., Ltd.地址：北京市朝阳区光华路9号SOHO3QLAB32Address: LAB32, SOHO3Q, No 9, Guanghua Road, Chaoyang District, Beijing统一社会信用代码：9111010576215249XMUniform Social Credit Code: 9111010576215249XM在本协议中，质权人、出质人和丙方以下各称“一方”，合称“各方”。In this Agreement, each of Pledgee, Pledgors and Party C shall be referred to as a "Party" respectively, and they shall be collectively referred to as the"Parties".鉴于：Whereas:1．出质人全部为中国境内居民自然人，共同持有丙方100%的股权。丙方是一家在中国注册成立的、主要从事手机视频技术研发、内容制作和产业化市场推广的有限责任公司。丙方有意在此确认出质人和质权人在本协议下的权利和义务并提供必要的协助登记该质权；All of the Pledgors are natural persons resided in PRC, and collectively hold 100% of the equity interest in Party C. Party C is a limited company registered inChina, mainly engaging in mobile video frequency technology research, development, content creation, sale and related industrialization promotion. Party Cacknowledges the respective rights and obligations of Pledgors and Pledgee under this Agreement, and intends to provide any necessary assistance inregistering the Pledge;2．质权人是一家在中国注册的外商独资企业。质权人与丙方于年月日签订了独家业务合作协议；Pledgee is a whollyforeignowned enterprise registered in China. Pledgee and Party C have executed an Exclusive Business Cooperation Agreement as of [*],[*];3．为了保证丙方全面履行独家业务合作协议项下的义务，出质人以其拥有的全部丙方股权向质权人做出质押担保。To ensure that Party C fully performs its obligations under the Exclusive Business Cooperation Agreement, Pledgors hereby pledge to the Pledgee all of theequity interests they hold in Party C.为了履行业务合作协议的条款，各方商定按照以下条款签订本协议。To perform the provisions of the Business Cooperation Agreement, the Parties have mutually agreed to execute this Agreement upon the following terms.2秘密文件 Strictly Confidential1.定义Definitions除非本协议另有规定，下列词语含义为：Unless otherwise provided herein, the terms below shall have the following meanings:1.1质权：指出质人根据本协议第2条给予质权人的担保物权，即指质权人所享有的，以出质人质押给质权人的股权折价或拍卖、变卖该股权的价款优先受偿的权利。Pledge: shall refer to the security interest granted by Pledgors to Pledgee pursuant to Article 2 of this Agreement, i.e., the right of Pledgee to becompensated on a preferential basis with the conversion, auction or sales price of the Equity Interest.1.2股权：指出质人现在和将来（通过增资和/或转股）合法持有的其在丙方的全部股权权益。Equity Interest: shall refer to all of the equity interest in Party C lawfully, held now and to be held (through capital increase and/or equity transfer)hereafter by Pledgors.1.3质押期限：指本协议第3条规定的期间。Term of Pledge: shall refer to the term set forth in Article 3 of this Agreement.1.4业务合作协议：指丙方与质权人于本协议日签订的独家业务合作协议。Business Cooperation Agreement: shall refer to the Exclusive Business Cooperation Agreement executed by and between Party C and Pledgee on thedate of this Agreement.1.5违约事件：指本协议第7条所列任何情况。Event of Default: shall refer to any of the circumstances set forth in Article 7 of this Agreement.1.6违约通知：指质权人根据本协议发出的宣布违约事件的通知。Notice of Default: shall refer to the notice issued by Pledgee in accordance with this Agreement declaring an Event of Default.3秘密文件 Strictly Confidential2.质权The Pledge作为丙方按时和全额支付业务合作协议项下质权人应得的任何或全部的款项，包括但不限于业务合作协议中规定的咨询和服务费的担保（无论该等费用的到期应付是由于到期日的到来、提前收款的要求或其它原因），以及丙方充分履行其在业务合作协议项下其他所有义务（丙方按时和全额支付业务合作协议项下甲方应得的任何或全部的款项及丙方在业务合作协议项下其他所有义务，以下统称为“被担保债务”）的担保，出质人特此将其现有或将拥有的丙方的全部股权权益质押给质权人。As collateral security for the timely and complete payment and performance when due (whether at stated maturity, by acceleration or otherwise) of any or all ofthe payments due (the “all payments in pledge”) by Party C, including without limitation the consulting and services fees payable to the Pledgee under theBusiness Cooperation Agreement, Pledgors hereby pledge to Pledgee a first security interest in all of Pledgors’ right, title and interest, whether now owned orhereafter acquired by Pledgors, in the Equity Interest of Party C.3.质押期限Term of Pledge3.1本质权自本协议项下的股权出质在相应的工商行政管理机关登记之日起生效，质权有效期持续到业务合作协议下所有丙方欠付质权人的款项结清为止。出质人和丙方应（一）自本协议签署之日起3个工作日内，将本协议的质权登记在丙方股东名册上，并（二）自本协议签署之日起10个工作日内向相应的工商行政管理机关申请登记本协议项下的质权。各方共同确认，为办理股权质押工商登记手续，各方及丙方其他股东应按照丙方所在地工商行政管理部门要求的形式签署、真实反映本协议项下质权信息的《股权质押合同》（以下简称“工商登记质押合同”）提交给工商管理机关，工商登记质押合同中未约定事项，仍以本协议约定为准。出质人和丙方应当按照中国法律法规和有关工商行政管理机关的各项要求，提交所有必要的文件并办理所有必要手续，保证质权在递交申请后尽快获得登记。如果出质人持有的丙方注册资本数额增加（不管是通过直接认缴丙方的增资还是从其他股东处受让股权），各方一致同意将采取一切必要的行动和签署一切必要的文件以按照登记机关的要求完成质权的变更登记，以确保本协议项下的质权的持续有效。The Pledge shall become effective on such date when the pledge of the Equity Interest contemplated herein has been registered’ with relevantadministration for industry and commerce (the “AIC”). The Pledge shall be continuously valid until all payments due under the Business CooperationAgreement have been fulfilled by Party C. Pledgors and Party C shall (1) register the Pledge in the shareholders' register of Party C within 3 businessdays following the execution of this Agreement, and (2) submit an application to the AIC for the registration of the Pledge of the Equity Interestcontemplated herein within 10 business days following the execution of this Agreement. The parties covenant that for the purpose of registration of thePledge, the parties hereto and all other shareholders of Party C shall submit to the AIC the Equity Interest Pledge Contract in the form required by theAIC at the location of Party C which shall truly reflect the information of the Pledge hereunder (the “AIC Pledge Contract”). For matters not specified inthe AIC Pledge Contract, the parties shall be bound by the provisions of this Agreement. Pledgors and Party C shall submit all necessary documentsand complete all necessary procedures, as required by the PRC laws and regulations and the relevant AIC, to ensure that the Pledge of the EquityInterest shall be registered with the AIC as soon as possible after filing. In the event that the amount of registered capital held by Pledgors is increased(either by subscribing increased registered capital from Party C or acquiring equity interest from other shareholders), the Parties hereto agree that theyshall take any necessary action and execute any necessary document to complete the registration of change of Pledge according to the requirement ofAIC so that the Pledge in this Agreement remains effective.4秘密文件 Strictly Confidential3.2质押期限内，如丙方未按业务合作协议交付咨询服务费等费用，质权人有权但无义务按本协议的规定处分质权。During the Term of Pledge, in the event Party C fails to pay the exclusive consulting or service fees in accordance with the Business CooperationAgreement, Pledgee shall have the right, but not the obligation, to dispose of the Pledge in accordance with the provisions of this Agreement.4.质权凭证的保管Custody of Records for Equity Interest subject to Pledge4.1在本协议规定的质押期限内，出质人应将其在丙方的股权出资证明书及记载质权的股东名册交付质权人保管。出质人应在本协议签订之日起一周内将上述股权出资证明书及股东名册交付给质权人。质权人将在本协议规定的全部质押期间一直保管这些项目。During the Term of Pledge set forth in this Agreement, Pledgors shall deliver to Pledgee's custody the capital contribution certificate for the EquityInterest and the shareholders' register containing the Pledge within one week from the execution of this Agreement. Pledgee shall have custody of suchitems during the entire Term of Pledge set forth in this Agreement.4.2在质押期限内，股权所产生的红利应当无条件归质权人所有。Dividends generated by the Equity Interest shall be unconditionally owned by the Pledgee during the Term of Pledge.5秘密文件 Strictly Confidential5.出质人的声明和保证Representations and Warranties of Pledgors5.1出质人是股权唯一的合法所有人。Pledgors are the sole legal and beneficial owners of the Equity Interest.5.2质权人有权以本协议规定的方式处分并转让股权。Pledgee shall have the right to dispose of and transfer the Equity Interest in accordance with the provisions set forth in this Agreement.5.3除本质权之外，出质人未在股权上设置任何其他质押权利或其他担保权益。Except for the Pledge, Pledgors have not placed any security interest or other encumbrance on the Equity Interest.6.出质人的承诺和确认Covenants and Further Agreements of Pledgors6.1在本协议存续期间，所有出质人向质权人承诺，出质人将：All of the Pledgors hereby covenant to the Pledgee, that during the term of this Agreement, Pledgors shall:6.1.1除履行由出质人与质权人、丙方于本协议签署日签订的《独家购买权合同》外，未经质权人事先书面同意，不得转让股权，不得在股权上设立或允许存在任何担保或其他债务负担；not transfer the Equity Interest, place or permit the existence of any security interest or other encumbrance on the Equity Interest, without theprior written consent of Pledgee, except for the performance of the Exclusive Option Agreement executed by Pledgors, the Pledgee and Party Con the execution date of this Agreement;6秘密文件 Strictly Confidential6.1.2遵守并执行所有有关权利质押的法律、法规的规定，在收到有关主管机关就质权发出或制定的通知、指令或建议时，于五日内向质权人出示上述通知、指令或建议，同时遵守上述通知、指令或建议，或按照质权人的合理要求或经质权人同意就上述事宜提出反对意见和陈述；comply with the provisions of all laws and regulations applicable to the pledge of rights, and within 5 days of receipt of any notice, order orrecommendation issued or prepared by relevant competent authorities regarding the Pledge, shall present the aforementioned notice, order orrecommendation to Pledgee, and shall comply with the aforementioned notice, order or recommendation or submit objections andrepresentations with respect to the aforementioned matters upon Pledgee's reasonable request or upon consent of Pledgee;6.1.3将任何可能导致对出质人股权或其任何部分的权利产生影响的事件或收到的通知，以及可能改变出质人在本协议中的任何保证、义务或对出质人履行其在本协议中义务可能产生影响的任何事件或收到的通知及时通知质权人。promptly notify Pledgee of any event or notice received by Pledgors that may have an impact on Pledgee's rights to the Equity Interest or anyportion thereof, as well as any event or notice received by Pledgors that may have an impact on any guarantees and other obligations ofPledgors arising out of this Agreement.6.2出质人同意，质权人按本协议条款取得的对质权享有的权利，不应受到出质人或出质人的继承人或出质人之委托人或任何其他人通过法律程序的中断或妨害。Pledgors agree that the rights acquired by Pledgee in accordance with this Agreement with respect to the Pledge shall not be interrupted or harmed byPledgors or any heirs or representatives of Pledgors or any other persons through any legal proceedings.7秘密文件 Strictly Confidential6.3出质人向质权人保证，为保护或完善本协议对偿付业务合作协议项下被担保债务的担保，出质人将诚实签署、并促使其他与质权有利害关系的当事人签署质权人所要求的所有的权利证书、契约和/或履行并促使其他有利害关系的当事人履行质权人所要求的行为，并为本协议赋予质权人之权利、授权的行使提供便利，与质权人或其指定的人(自然人/法人)签署所有的有关股权所有权的文件，并在合理期间内向质权人提供其认为需要的所有的有关质权的通知、命令及决定。To protect or perfect the security interest granted by this Agreement for payment of all payment in pledge under the Business Cooperation Agreement,Pledgors hereby undertake to execute in good faith and to cause other parties who have an interest in the Pledge to execute all certificates, agreements,deeds and/or covenants required by Pledgee. Pledgors also undertake to perform and to cause other parties who have an interest in the Pledge toperform actions required by Pledgee, to facilitate the exercise by Pledgee of its rights and authority granted thereto by this Agreement, and to enter intoall relevant documents regarding ownership of Equity Interest with Pledgee or designee(s) of Pledgee (natural persons/legal persons). Pledgorsundertake to provide Pledgee within a reasonable time with all notices, orders and decisions regarding the Pledge that are required by Pledgee.6.4出质人向质权人保证，出质人将遵守、履行本协议项下所有的保证、承诺、协议、陈述及条件。如出质人不履行或不完全履行其保证、承诺、协议、陈述及条件，出质人应赔偿质权人由此遭受的一切损失。Pledgors hereby undertake to comply with and perform all guarantees, promises, agreements, representations and conditions under this Agreement. Inthe event of failure the whole or partial performance of its guarantees, promises, agreements, representations and conditions, Pledgors shall indemnifyPledgee for all losses resulting therefrom.8秘密文件 Strictly Confidential7.违约事件Event of Default7.1下列事项均被视为违约事件：The following circumstances shall be deemed Event of Default:7.1.1丙方未能按期、完整履行任何业务合作协议项下责任，包括但不限于丙方未能按期足额支付业务合作协议项下的应付的被担保债务或有违反该协议其他义务的行为；Party C fails to fully and timely fulfill any liabilities under the Business Cooperation Agreement, including without limitation failure to pay infull any of the all payment in pledge payable under the Business Cooperation Agreement or breaches any other obligations of Party Cthereunder;7.1.2出质人或丙方实质违反本协议的任何条款；Pledgors or Party C have committed a material breach of any provisions of this Agreement;7.1.3除本协议第6.1.1条的约定外，出质人舍弃出质的股权或未获得质权人书面同意而擅自转让或意图转让出质的股权；和Except as expressly stipulated in Section 6.1.1, Pledgors transfers or purports to transfer or abandons the Equity Interest pledged or assignsthe Equity Interest pledged without the written consent of Pledgee; and7.1.4丙方的继承人或代管人只能履行部分或拒绝履行业务合作协议项下的支付责任。The successor or custodian of Party C is capable of only partially perform or refuses to perform the payment obligations under the BusinessCooperation Agreement.9秘密文件 Strictly Confidential7.2如知道或发现本第7.1条所述的任何事项或可能导致上述事项的事件已经发生，出质人应立即以书面形式通知质权人。Upon notice or discovery of the occurrence of any circumstances or event that may lead to the aforementioned circumstances described in Section 7.1,Pledgors shall immediately notify Pledgee in writing accordingly.7.3除非第7.1部分下的违约事件在质权人向出质人发出要求其修补此违约行为通知后的二十（20）天之内已经按质权人要求获得救济，质权人在其后的任何时间，可向出质人发出书面违约通知，要求依据第8部分履行其处理股权的权利。Unless an Event of Default set forth in this Section 7.1 has been successfully resolved to Pledgee's satisfaction within twenty (20) days after the Pledgeedelivers a notice to the Pledgors requesting ratification of such Event of Default, Pledgee may issue a Notice of Default to Pledgors in writing at any timethereafter, demanding the Pledgors to immediately dispose of the Pledge in accordance with the provisions of Article 8 of this Agreement.8.质权的行使Exercise of Pledge8.1在被担保债务被全部清偿或履行前，未经质权人书面同意，出质人不得转让本质权和其拥有的丙方股权。Prior to the full payment of all payments in pledge, without the Pledgee's written consent, Pledgors shall not assign the Pledge or the Equity Interest inParty C.8.2在质权人行使其质押权利时，质权人可以向出质人发出书面违约通知。Pledgee may issue a Notice of Default to Pledgors when exercising the Pledge.10秘密文件 Strictly Confidential8.3在质权人行使其质押权利时，根据中国有关法律的规定，质权人有权按照法定程序处置质押股权。仅在中国法律允许的范围内，对于处置的所得，质权人无需给付出质人；除非中国法律另有规定，出质人特此放弃其可能有的能向质权人要求任何质押股权处置所得的权利；同样，出质人对质权人在该质押股权处置后的亏损也不承担任何义务。When the Pledgor exercises the pledge right, Pledgee is entitled to dispose of the Equity Interest pledged in accordance with applicable PRC laws. Onlyto the extent permitted under applicable PRC laws, Pledgee has no obligation to account to Pledgors for proceeds of disposition of the Equity Interest.Unless otherwise required by PRC laws, Pledgors hereby waive any rights it may have to demand any such accounting from Pledgee; Likewise, in suchcircumstance Pledgors shall have no obligation to Pledgee for any deficiency remaining after such disposition of the Equity Interest pledged.8.4质权人依照本协议处分质权时，出质人和丙方应予以必要的协助，以使质权人实现其质权。When Pledgee disposes of the Pledge in accordance with this Agreement, Pledgors and Party C shall provide necessary assistance to enable Pledgee toenforce the Pledge in accordance with this Agreement.9.转让Assignment9.1除非经质权人事先同意，出质人无权赠予或转让其在本协议项下的权利义务。Without Pledgee's prior written consent, Pledgors shall not have the right to assign or delegate its rights and obligations under this Agreement.11秘密文件 Strictly Confidential9.2本协议对出质人及其继任人和经许可的受让人均有约束力，并且对质权人及每一继任人和受让人有效。This Agreement shall be binding on Pledgors and their successors and permitted assigns, and shall be valid with respect to Pledgee and each of itssuccessors and assigns.9.3经出质人同意，质权人可以在任何时候将其在业务合作协议项下的所有或任何权利和义务转让给其指定的关联方（自然人/法人），在这种情况下，受让人应享有和承担本协议项下质权人享有和承担的权利和义务，如同其作为原协议方应享有和承担的一样。质权人转让业务合作协议项下的权利和义务时，应质权人要求，出质人应就此转让签署有关协议和/或文件。Upon the Pledgors’ agreement, Pledgee may assign any or all of its rights and obligations under the Business Cooperation Agreement to its designee(s)(natural/legal persons) at any time, in which case the assigns shall have the rights and obligations of Pledgee under this Agreement, as if it were theoriginal party to this Agreement. When the Pledgee assigns the rights and obligations under the Business Cooperation Agreement, upon Pledgee'srequest, Pledgors shall execute relevant agreements or other documents relating to such assignment.9.4因转让所导致的质权人变更后，应质权人要求，出质人应与新的质权人签订一份内容与本协议一致的新质押协议，并在相应的工商行政管理机关进行登记。In the event of a change in Pledgee due to an assignment, Pledgors shall, at the request of Pledgee, execute a new pledge agreement with the newpledgee on the same terms and conditions as this Agreement, and register the same with the relevant AIC.12秘密文件 Strictly Confidential9.5出质人应严格遵守本协议和各方单独或共同签署的其他有关协议的规定，包括独家购买权合同和对质权人的授权委托书，履行各协议项下的义务，并不进行任何足以影响协议的有效性和可强制执行性的作为/不作为。除非根据质权人的书面指示，出质人不得行使其对质押股权还留存的权利。Pledgors shall strictly abide by the provisions of this Agreement and other contracts jointly or separately executed by the Parties hereto or any of them,including the Exclusive Option Agreement and the Power of Attorney granted to Pledgee, perform the obligations hereunder and thereunder, and refrainfrom any action/omission that may affect the effectiveness and enforceability thereof. Any remaining rights of Pledgors with respect to the EquityInterest pledged hereunder shall not be exercised by Pledgors except in accordance with the written instructions of Pledgee.10.终止Termination在被担保债务被全部清偿或履行完毕之后，本质权人应在尽早合理可行的时间内办理或配合办理解除质押的手续，出质人与丙方应提供相应的配合与协助。Upon the full payment of all payments in pledge under the Business Cooperation Agreement a, Pledgor shall then, with the assistance of Party B and Party C,go through the procedures of cancellation of pledge rights at a reasonable time as soon as practicable.11.手续费及其他费用Handling Fees and Other Expenses一切与本协议有关的费用及实际开支，其中包括但不限于法律费用、工本费、印花税以及任何其他税收、费用等全部由丙方承担。All fees and out of pocket expenses relating to this Agreement, including but not limited to legal costs, costs of production, stamp tax and any other taxes andfees, shall be borne by Party C.13秘密文件 Strictly Confidential12.保密责任Confidentiality各方承认及确定有关本协议、本协议内容，以及彼此就准备或履行本协议而交换的任何口头或书面资料均被视为保密信息。各方应当对所有该等保密信息予以保密，而在未得到另一方书面同意前，不得向任何第三者披露任何保密信息，惟下列信息除外：(a)公众人士知悉或将会知悉的任何信息（惟并非由接受保密信息之一方擅自向公众披露）；(b)根据适用法律法规、股票交易规则、或政府部门或法院的命令而所需披露之任何信息；或(c)由任何一方就本协议所述交易而需向其股东、投资者、法律或财务顾问披露之信息，而该股东、法律或财务顾问亦需遵守与本条款相类似之保密责任。如任何一方工作人员或聘请机构的泄密均视为该方的泄密，需依本协议承担违约责任。无论本协议以任何理由终止，本条款仍然生效。The Parties acknowledge that the existence and the terms of this Agreement and any oral or written information exchanged between the Parties in connectionwith the preparation and performance this Agreement are regarded as confidential information. Each Party shall maintain confidentiality of all such confidentialinformation, and without obtaining the written consent of the other Party, it shall not disclose any relevant confidential information to any third parties, exceptfor the information that: (a) is or will be in the public domain (other than through the receiving Party’s unauthorized disclosure); (b) is under the obligation tobe disclosed pursuant to the applicable laws or regulations, rules of any stock exchange, or orders of the court or other government authorities; or (c) isrequired to be disclosed by any Party to its shareholders, investors, legal counsels or financial advisors regarding the transaction contemplated hereunder,provided that such shareholders, investors, legal counsels or financial advisors shall be bound by the confidentiality obligations similar to those set forth inthis Section. Disclosure of any confidential information by the staff members or agencies hired by any Party shall be deemed disclosure of such confidentialinformation by such Party, which Party shall be held liable for breach of this Agreement. This Section shall survive the termination of this Agreement for anyreason.14秘密文件 Strictly Confidential13.适用法律和争议的解决Governing Law and Resolution of Disputes13.1本协议的订立、效力、解释、履行、修改和终止以及争议的解决均适用中国法律。The execution, effectiveness, construction, performance, amendment and termination of this Agreement and the resolution of disputes hereunder shallbe governed by the laws of China.13.2因解释和履行本协议而发生的任何争议，本协议各方应首先通过友好协商的方式加以解决。如果在一方向其他方发出要求协商解决的书面通知后30天之内争议仍然得不到解决，则任何一方均可将有关争议提交给中国国际经济贸易仲裁委员会，由该会按照其仲裁规则仲裁解决。仲裁应在北京进行，使用之语言为中文。仲裁裁决是终局性的，对各方均有约束力。In the event of any dispute with respect to the construction and performance of this Agreement, the Parties shall first resolve the dispute throughfriendly negotiations. In the event the Parties fail to reach an agreement on the dispute within 30 days after either Party's request to the other Parties forresolution of the dispute through negotiations, either Party may submit the relevant dispute to the China International Economic and Trade ArbitrationCommission for arbitration, in accordance with its Arbitration Rules. The arbitration shall be conducted in Beijing, and the language used in arbitrationshall be Chinese. The arbitration award shall be final and binding on all Parties.13.3因解释和履行本协议而发生任何争议或任何争议正在进行仲裁时，除争议的事项外，本协议各方仍应继续行使各自在本协议项下的其他权利并履行各自在本协议项下的其他义务。Upon the occurrence of any disputes arising from the construction and performance of this Agreement or during the pending arbitration of any dispute,except for the matters under dispute, the Parties to this Agreement shall continue to exercise their respective rights under this Agreement and performtheir respective obligations under this Agreement.15秘密文件 Strictly Confidential14.通知Notices14.1本协议项下要求或发出的所有通知和其他通信应通过专人递送、挂号邮寄、邮资预付或商业快递服务或传真的方式发到该方下列地址。每一通知还应再以电子邮件送达。该等通知视为有效送达的日期按如下方式确定：All notices and other communications required or permitted to be given pursuant to this Agreement shall be delivered personally or sent by registeredmail, postage prepaid, by a commercial courier service or by facsimile transmission to the address of such party set forth below. A confirmation copy ofeach notice shall also be sent by Email. The dates on which notices shall be deemed to have been effectively given shall be determined as follows:14.1.1通知如果是以专人递送、快递服务或挂号邮寄、邮资预付发出的，则以于设定为通知的地址在接收或拒收之日为有效送达日。Notices given by personal delivery, by courier service or by registered mail, postage prepaid, shall be deemed effectively given on the date ofreceipt or refusal at the address specified for notices.14.1.2通知如果是以传真发出的，则以成功传送之日为有效送达日（应以自动生成的传送确认信息为证）。Notices given by facsimile transmission shall be deemed effectively given on the date of successful transmission (as evidenced by anautomatically generated confirmation of transmission).16秘密文件 Strictly Confidential14.2为通知的目的，各方地址如下：For the purpose of notices, the addresses of the Parties are as follows:甲方：中传天下信息科技（深圳）有限公司Party A: Zhongchuan Tianxia Information Technology (Shenzhen) Co., Ltd.地址：深圳市南山区高新中三道2号深圳软件园一期五栋401AAddress: 401A, Building 5, Phase 1, Shenzhen Software Park, No.2 Gaoxin Zhongsan Road, Nanshan District, Shenzhen.收件人：洪婷Attn: Hong Ting乙方：Party B:a)宋雪松Song Xuesong地址：125.Expenses, including legal fees, incurred by a director in defending any legal, administrative or investigative proceedings may be paid by the Company inadvance of the final disposition of such proceedings upon receipt of an undertaking by or on behalf of the director to repay the amount if it shall ultimatelybe determined that the director is not entitled to be indemnified by the Company in accordance with these Articles.126.Expenses, including legal fees, incurred by a former director in defending any legal, administrative or investigative proceedings may be paid by theCompany in advance of the final disposition of such proceedings upon receipt of an undertaking by or on behalf of the former director to repay the amountif it shall ultimately be determined that the director is not entitled to be indemnified by the Company in accordance with these Articles.127.The indemnification and advancement of expenses provided by, or granted pursuant to, these Articles is not exclusive of any other rights to which theperson seeking indemnification of advancement of expenses may be entitled under any agreement, resolution of members, resolution of disinteresteddirectors or otherwise, both as to acting in the person’s official capacity and as to acting in another capacity while serving as a director of the Company.128.If a person to be indemnified has been successful in defence of any proceedings referred to above the person is entitled to be indemnified against allexpenses, including legal fees, and against all judgments, fines and amounts paid in settlement and reasonably incurred by the person in connection withthe proceedings.129.The Company may purchase and maintain insurance in relation to any person who is or was a director, an officer or a liquidator of the Company, or who atthe request of the Company is or was serving as a director, an officer or a liquidator of, or in any other capacity is or was acting for, another body corporateor a partnership, joint venture, trust or other enterprise, against any liability asserted against the person and incurred by the person in that capacity,whether or not the Company has or would have had the power to indemnify the person against the liability as provided in these Articles.SEAL130.The Company shall have a Seal and may have more than one Seal. References herein to the Seal shall be references to every Seal which shall have beenduly adopted by resolution of directors. The directors shall provide for the safe custody of the Seal and for an imprint thereof to be kept at the office of theregistered agent of the Company. Except as otherwise expressly provided herein, the Seal when affixed to any written instrument, shall be witnessed andattested to by the signature of a director or any other person so authorized from time to time by resolution of directors. Such authorization may be before orafter the Seal is affixed, may be general or specific and may refer to any number of sealings. The Directors may provide for a facsimile of the Seal and of thesignature of any director or authorized person which may be reproduced by printing or other means on any instrument and it shall have the same force andvalidity as if the Seal had been affixed to such instrument and the same had been signed as hereinbefore described.21DISTRIBUTIONS131.The directors of the Company may by resolution authorise a distribution by the Company at any time and of any amount and to any members they think fitif they are satisfied on reasonable grounds that immediately after the distribution;a.the value of the Company’s assets will exceed its liabilities, andb.the Company will be able to pay its debts as they fall due.132.A resolution of the directors passed under the preceding Article shall contain a statement that, in the opinion of the directors, immediately after thedistribution the value of the Company’s assets will exceed its liabilities, and the Company will be able to pay its debts as they fall due.133.If, after a distribution is authorised and before it is made, the directors cease to be satisfied on reasonable grounds that the Company will, immediately afterthe distribution satisfy the solvency test, any distribution made by the Company is deemed not to have been authorised.134.If, by virtue of the preceding Article, a distribution is deemed not to have been authorised, a director who;a.ceased, after authorisation but before the making of the distribution, to be satisfied on reasonable grounds for believing that the company wouldsatisfy the solvency test immediately after the distribution is made; andb.failed to take reasonable steps to prevent the distribution being made;is personally liable to the company to repay to the company so much of the distribution as is not able to be recovered from members.135.A distribution made to a member at a time when the company did not, immediately after the distribution, satisfy the solvency test may be recovered by thecompany from the member unless;a.the member received the distribution in good faith and without knowledge of the company’s failure to satisfy the solvency test;b.the member has altered his position in reliance on the validity of the distribution; andc.it would be unfair to require repayment in full or at all.DISTRIBUTIONS BY WAY OF DIVIDEND136.The Company may by a resolution of directors declare a distribution by way of dividend and pay such distribution in money, shares or other property. Inthe event that distributions by way of dividend are paid in specie the directors shall have responsibility for establishing and recording in the resolution ofdirectors authorizing the distribution by way of dividend, a fair and proper value for the assets to be so distributed.137.The directors may from time to time pay to the members such interim distributions by way of dividend as appear to the directors to be justified by theprofits of the Company.138.The directors may, before declaring any distribution by way of dividend, set aside out of the profits of the Company such sum as they think proper as areserve fund, and may invest the sum so set aside as a reserve fund upon such securities as they may select.139.Notice of any distribution by way of dividend that may have been declared shall be given to each member in the manner hereinafter mentioned and alldistributions by way of dividend unclaimed for 3 years after having been declared may be forfeited by resolution of directors for the benefit of theCompany.140.No distribution by way of dividend shall bear interest as against the Company and no distribution by way of dividend shall be paid on treasury shares orshares held by another company of which the Company holds, directly or indirectly, shares having more than 50 percent of the vote in electing directors.22141.A share issued as a distribution by way of dividend by the Company shall be treated for all purposes as having been issued for money equal to the valuedetermined by resolution of the directors. In the absence of fraud the decision of the directors as to the value of the share is conclusive unless a questionof law is involved.142.A division of the issued and outstanding shares of a class or series of shares into a larger number of shares of the same class or series having aproportionately smaller par value does not constitute a distribution by way of dividend of shares.ACCOUNTS AND AUDIT143.The Company may by resolution of members call for the directors to prepare periodically a profit and loss account and a balance sheet. The profit and lossaccount and balance sheet shall be drawn up so as to give respectively a true and fair view of the profit and loss of the Company for the financial periodand a true and fair view of the state of affairs of the Company as at the end of the financial period.144.The Company may by resolution of members call for the accounts to be examined by auditors.145.Subject to the rules of the Designated Stock Exchange, the first auditors shall be appointed by resolution of directors; subsequent auditors shall beappointed by the Audit Committee and shall hold office until the Audit Committee appoint another independent auditor.146.Subject to the rules of the Designated Stock Exchange, the remuneration of the auditors of the Company shall be fixed by the Audit Committee.147.The auditors shall examine each profit and loss account and balance sheet required to be served on every member of the Company or laid before a meetingof the members of the Company and shall state in a written report whether or nota.in their opinion the profit and loss account and balance sheet give a true and fair view respectively of the profit and loss for the period covered bythe accounts, and of the state of affairs of the Company at the end of that period; andb.all the information and explanations required by the auditors have been obtained.148.The report of the auditors shall be annexed to the accounts and shall be read at the meeting of members at which the accounts are laid before the Companyor shall be served on the members.149.Every auditor of the Company shall have a right of access at all times to the books of account and vouchers of the Company, and shall be entitled to requirefrom the directors and officers of the Company such information and explanations as he thinks necessary for the performance of the duties of the auditors.150.The auditors of the Company shall be entitled to receive notice of, and to attend any meetings of members of the Company at which the Company’s profitand loss account and balance sheet are to be presented.NOTICES151.Any notice, information or written statement to be given by the Company to members may be served in any way by which it can reasonably be expected toreach each member or by mail addressed to each member at the address shown in the share register.152.Any summons, notice, order, document, process, information or written statement to be served on the Company may be served by leaving it, or by sendingit by registered mail addressed to the Company, at its registered office, or by leaving it with, or by sending it by registered mail to, the registered agent ofthe Company.153.Service of any summons, notice, order, document, process, information or written statement to be served on the Company may be proved by showing thatthe summons, notice, order, document, process, information or written statement was delivered to the registered office or the registered agent of theCompany or that it was mailed in such time as to admit to its being delivered to the registered office or the registered agent of the Company in the normalcourse of delivery within the period prescribed for service and was correctly addressed and the postage was prepaid.23PENSION AND SUPERANNUATION FUNDS154.The directors may establish and maintain or procure the establishment and maintenance of any noncontributory or contributory pension orsuperannuation funds for the benefit of, and give or procure the giving of donations, gratuities, pensions, allowances or emoluments to, any persons whoare or were at any time in the employment or service of the Company or any company which is a subsidiary of the Company or is allied to or associated withthe Company or with any such subsidiary, or who are or were at any time directors or officers of the Company or of any such other company as aforesaid orwho hold or held any salaried employment or office in the Company or such other company, or any persons in whose welfare the Company or any suchother company as aforesaid is or has been at any time interested, and to the wives, widows, families and dependents of any such person, and may makepayments for or towards the insurance of any such persons as aforesaid, and may do any of the matters aforesaid either alone or in conjunction with anysuch other company as aforesaid. Subject always to the proposal being approved by resolution of members, a director holding any such employment oroffice shall be entitled to participate in and retain for his own benefit any such donation, gratuity, pension allowance or emolument.VOLUNTARY WINDING UP AND DISSOLUTION155.The Company may voluntarily commence to wind up and dissolve by a resolution of members but if the Company has never issued shares it mayvoluntarily commence to wind up and dissolve by resolution of directors.CONTINUATION156.The Company may by resolution of members or by a resolution passed unanimously by all directors of the Company continue as a company incorporatedunder the laws of a jurisdiction outside the British Virgin Islands in the manner provided under those laws.ARBITRATION157.Whenever any difference arises between the Company on the one hand and any of the members or their executors, administrators or assigns on the otherhand, touching the true intent and construction or the incidence or consequences of these Articles or of the Act, touching anything done or executed,omitted or suffered in pursuance of the Act or touching any breach or alleged breach or otherwise relating to the premises or to these Articles, or to anyAct or Ordinance affecting the Company or to any of the affairs of the Company such difference shall, unless the parties agree to refer the same to a singlearbitrator, be referred to 2 arbitrators one to be chosen by each of the parties to the difference and the arbitrators shall before entering on the referenceappoint an umpire.158.If either party to the reference makes default in appointing an arbitrator either originally or by way of substitution (in the event that an appointed arbitratorshall die, be incapable of acting or refuse to act) for 10 days after the other party has given him notice to appoint the same, such other party may appoint anarbitrator to act in the place of the arbitrator of the defaulting party.We, Portcullis TrustNet (BVI) Limited of Portcullis TrustNet Chambers, P.O. Box 3444, Road Town, Tortola, British Virgin Islands for the purpose of incorporating aBVI Business Company under the laws of the British Virgin Islands hereby sign these Articles of Association the 27th day of October, 2009.Incorporator/s/ Nicole WheatleyPortcullis TrustNet (BVI) LimitedPortcullis TrustNet ChambersP.O. Box 3444Road Town, TortolaBritish Virgin Islands(Sgd. Nicole Wheatley)24EX4.15 3 f20f2017ex415_luokung.htm EXCLUSIVE BUSINESS COOPERATION AGREEMENT BY AND BETWEEN ZHONGCHUAN TIANXIA INFORMATIONTECHNOLOGY (SHENZHEN) CO., LTD., AND BEIJING MOBILE VISION TECHNOLOGY CO., LTD., DATED AUGUST 31, 2015Exhibit 4.15独家业务合作协议Exclusive Business Cooperation Agreement本独家业务合作协议（下称“本协议”）由以下双方于年月日在中华人民共和国（下称“中国”）北京市签署。This Exclusive Business Cooperation Agreement (this “Agreement”) is made and entered into by and between the following parties on in Beijing, thePeople’s Republic of China (“China” or the “PRC”).甲方：中传天下信息科技（深圳）有限公司Party A: Zhongchuan Tianxia Information Technology (Shenzhen) Co., Ltd.地址：深圳市南山区高新中三道2号深圳软件园一期五栋401A Address: 401A, Building 5, Phase 1, Shenzhen Software Park, No.2 Gaoxin Zhongsan Road, Nanshan District, Shenzhen统一社会信用代码：91440300565701058R Uniform Social Credit Code: 91440300565701058R乙方：北京中传视讯科技有限公司Party B: Beijing Mobile Vision Technology Co., Ltd.地址：北京市朝阳区光华路9号SOHO3QLAB32Address: LAB32, SOHO3Q, No 9, Guanghua Road, Chaoyang District, Beijing统一社会信用代码：9111010576215249XMUniform Social Credit Code: 9111010576215249XM甲方和乙方以下各称为“一方”，统称为“双方”。Each of Party A and Party B shall be hereinafter referred to as a “Party” respectively, and as “Parties” collectively.1秘密文件Strictly Confidential鉴于：Whereas,1.甲方是一家在中国注册的外商独资企业，拥有丰富的技术研发和产业化推广相关的管理和投资经验，并提供相关的技术支持和咨询服务；Party A is a whollyforeignowned enterprise established in China, which has rich experience in technology research development and industrializationpromotion management and investment, and provides relevant technical support and consulting services;2.乙方是一家在中国成立的有限责任公司，经中国有关政府部门批准依法主要从事手机视频技术开发、内容制作及市场推广；Party B is a limited company in China, mainly engages in mobile video technology research, development, content creation, sale and related industrialpromotion as approved by the relevant governmental authorities in China;3.甲方同意利用其技术、人员和信息优势，在本协议期间向乙方提供有关手机视频技术开发、内容制作及市场推广以及未来扩大业务规模和业务范围时乙方所需的技术支持、技术咨询等相关服务，乙方同意接受甲方或其指定方按本协议条款的规定提供的各种服务。Party A is willing to provide Party B with technology supports and technology consulting services in connection with mobile video technology research,development, content creation, sale and related industrial promotion and such services in connection with Party B’s extension of business scale orbroadening of businesses during the term of this Agreement, utilizing its advantages in technology, human resources, and information, and Party B iswilling to accept such services provided by Party A or Party A's designee(s), each on the terms set forth herein.2秘密文件Strictly Confidential据此，甲方和乙方经协商一致，达成如下协议：Now, therefore, through mutual discussion, the Parties have reached the following agreements:1.服务提供Services Provided by Party A1.1按照本协议条款和条件，乙方在此委任甲方在本协议期间作为乙方的独家服务提供者向乙方提供全面的和手机视频技术开发、内容制作及市场推广相关以及未来扩大业务规模和业务范围时乙方所需的技术支持、业务支持和相关咨询服务，具体内容包括但不限于以下内容：Party B hereby appoints Party A as Party B's exclusive services provider to provide Party B with complete technical support, business supportand related consulting services in connection with mobile video technology research, development, content creation, sale and related industrialpromotion and such services in connection with Party B’s extension of business scale or broadening of businesses during the term of thisAgreement, in accordance with the terms and conditions of this Agreement, which may include but not limited to:1.1.1为乙方提供其手机视频技术开发、内容制作及市场推广业务所需的一切服务支持，为乙方提供相当于包括总经理、行政人员、管理人员、筹划部门、商业运营、人力资源、财务、会计以及与乙方业务相关的一切业务操作所需人员所能提供的服务内容；managing all aspects of Party B’s business of mobile video technology research, development, content creation, sale and relatedindustrial promotion. In this capacity, Party A will procure or engage for Party B the services of a general manager and other managementstaff, including but not limited to personnel responsible for all administration, operations, planning, business development, humanresources, finance, accounting and other operations related to the Business of Party B;3秘密文件Strictly Confidential1.1.2为乙方制定全部的商业计划、销售目标，并为优化执行该等商业计划设计和建立相应的系统及操作程序；developing all business plans and sales projections of Party B, and for developing and establishing systems and procedures for optimumexecution of the business plans;1.1.3为乙方申请手机视频技术及内容制作相关专利提供咨询服务和支持；consulting services and support in connection with Party B’s applying for mobile video technology related patents and content creation;1.1.4为乙方手机视频技术产业化的发展方向、规模、品牌提升提供咨询服务；consulting services in connection with the development directions, size and business brands promotion of Party B’s mobile videotechnology industrialization;4秘密文件Strictly Confidential1.1.5为乙方提供与业务相关的办公、生产和销售服务，为乙方租赁场所，建立业务相关的系统和程序，满足乙方的其他要求；procuring or obtaining for Party B all office, production and distribution services related to the Business. It shall procure or obtainappropriate leases, establish systems and procedures needed to operate the business, fulfill orders for services;1.1.6尽最大努力为乙方建立手机视频技术销售市场，根据甲方为乙方制定的商业计划及销售目标代表乙方获取客户订单，同时为乙方提供与业务相关的客户服务，建立向客户开具票据的程序和与会计相关的托收服务。using its best efforts to establish mobile video technology related marketing and other structures to obtain orders for services &products from customers on behalf of Party B in accordance with Party B’s business plans, sales projections and objectives (asdeveloped by Party A) and procure or obtain customer services required in connection with the Business. It shall also establishprocedures for invoicing customers, and establish collection services with respect to accounts;1.1.7就乙方的劳动用工方面提供咨询服务和支持，包括但不限于，组织实施对乙方业务人员、行政人员、管理人员等人员进行培训和考核，协助建立健全的人力资源管理制度和实现人力资源的良好配置；consulting services and support regarding labor system of Party B, including but without limitation to labor training and evaluation ofsales person, administrative staff and management person etc. and establishment of human resources management system to well;5秘密文件Strictly Confidential1.1.8提供乙方需要的客户数据统计、分析及相关数据库的建设和维护等咨询服务；providing Party B with compile and analysis of client data and consulting services of establishment and maintenance of data base;1.1.9提供乙方需要的软件和相关技术支持服务；providing software Party B requires and other technical support;1.1.10接受乙方委托，对乙方的手机视频技术研发和产业化推广业务经营进行指导和管理；guiding and management on Party B’s business of mobile video technology research and development and related industrial promotionoperation according to Party B’s commission;1.1.11当乙方业务规模发展或业务范围扩大需要时，购买乙方业务经营需要的设备；in the event of the demand of Party B’s development of business scale or broadening of businesses, purchase the equipments which itneeds for the operation of its business;1.1.12当乙方业务规模发展或业务范围扩大需要时，完成乙方项目中的全部或部分工作；in the event of the demand of Party B’s development of business scale or broadening of businesses, complete the work of Party B’sproject in whole or in party;6秘密文件Strictly Confidential1.1.13当乙方业务规模发展或业务范围扩大需要时，开发新技术；in the event of the demand of Party B’s development of business scale or broadening of businesses, develop new technology;1.1.14乙方委托甲方，且甲方接受委托提供的其他服务。other services Party B appoints Party A to provide and Party A agrees to provide.1.2乙方接受甲方的咨询和服务。乙方进一步同意，除非经甲方事先书面同意，在本协议期间，就本协议约定的服务或其他事宜，乙方不得直接或间接地从任何第三方获得任何与本协议相同或类似的咨询和/或服务，并不得与任何第三方就本协议所述事项建立任何类似的合作关系。双方同意，甲方可以指定其他方（该被指定方可以与乙方签署本协议第1.3条描述的某些协议）为乙方提供本协议约定的服务和/或支持。Party B agrees to accept all the consultations and services provided by Party A. Party B further agrees that unless with Party A's prior writtenconsent, during the term of this Agreement, Party B shall not directly or indirectly accept the same or any similar consultations and/or servicesprovided by any third party and shall not establish similar corporation relationship with any third party regarding the matters contemplated by thisAgreement. Party A may appoint other parties, who may enter into certain agreements described in Section 1.3 with Party B, to provide Party Bwith the consultations and/or services under this Agreement.7秘密文件Strictly Confidential1.3服务的提供方式Service Providing Methodology1.3.1双方同意在本协议有效期内，视情况而定，乙方可以与甲方或甲方指定的其他方进一步签订技术服务协议和/或咨询服务协议，对各项业务培训、技术服务、咨询服务的具体内容、方式、人员、收费等进行约定。Parties agree that during the term of this Agreement, where necessary, Party B may enter into further technical service agreements and/orconsulting service agreements with Party A or any other party designated by Party A, which shall provide the specific contents, manner,personnel, and fees for the specific technical services and consulting services.1.3.2为更好地履行本协议，双方同意，在甲方认为必要时，乙方应在本协议有效期内与甲方或甲方指定的其他方根据业务进展需要随时签署协议，由甲方或其指定方向乙方提供服务。To fulfill this Agreement, Parties agree that during the term of this Agreement, where Party A deems necessary, Party B shall enter intoagreements with Party A or any other party designated by Party A which shall set forth that Party A or any other party designated byParty A provide services to Party B based on the needs of the business of Party B.8秘密文件Strictly Confidential2.服务的价格和支付方式The Calculation and Payment of the Service Fees双方同意，就甲方提供的服务，乙方应向甲方支付服务费（“服务费”）。服务费不应低于乙方税后利润的80%。服务费应当按季支付；经甲方事先书面同意，服务费可以根据乙方的经营需要进行调整。Both Parties agree that, in consideration of the services provided by Party A, Party B shall pay Party A fees (the “Service Fees”), which shall not be lessthan 80% of Party B’s aftertax profits . The Service Fees shall be due and payable on a quarterly basis; upon the prior written consent by Party A, the rateof Service Fees may be adjusted pursuant to the operational needs of Party B.3.知识产权和保密条款Intellectual Property Rights and Confidentiality Clauses3.1在中国法律允许的范围内，甲方对履行本协议而产生或创造的任何权利、所有权、权益和所有知识产权包括但不限于著作权、专利权、专利申请权、软件、技术秘密、商业机密及其他均享有独占的和排他的权利和利益。乙方须签署所有适当的文件，采取所有适当的行动，递交所有的文件和/或申请，提供所有适当的协助，以及做出所有其他依据甲方的自行决定认为是必要的行为，以将任何对该等知识产权的所有权、权利和权益赋予甲方，和/或完善对甲方此等知识产权权利的保护。To the extent permitted under the PRC laws, Party A shall have exclusive and proprietary rights and interests in all rights, ownership, interests andintellectual properties arising out of or created during the performance of this Agreement, including but not limited to copyrights, patents, patentapplications, software, technical secrets, trade secrets and others. Party B shall execute all appropriate documents, take all appropriate actions,submit all filings and/or applications, render all appropriate assistance and otherwise conduct whatever is necessary deemed as by Party A in itssole discretion for the purposes of vesting any ownership, right or interest of any such intellectual property rights in Party A, and/or perfectingthe protections for any such intellectual property rights in Party A.9秘密文件Strictly Confidential3.2双方承认及确定有关本协议、本协议内容，以及彼此就准备或履行本协议而交换的任何口头或书面资料均被视为保密信息。双方应当对所有该等保密信息予以保密，而在未得到另一方书面同意前，不得向任何第三者披露任何保密信息，惟下列信息除外：(a)公众人士知悉或将会知悉的任何信息（惟并非由接受保密信息之一方擅自向公众披露）；(b)根据适用法律法规、股票交易规则、或政府部门或法院的命令而所需披露之任何信息；或(c)由任何一方就本协议所述交易而需向其股东、投资者、法律或财务顾问披露之信息，而该股东、法律或财务顾问亦需遵守与本条款相类似之保密责任。如任何一方工作人员或聘请机构的泄密均视为该方的泄密，需依本协议承担违约责任。无论本协议以任何理由终止，本条款仍然生效。The Parties acknowledge that the existence and the terms of this Agreement and any oral or written information exchanged between the Parties inconnection with the preparation and performance this Agreement are regarded as confidential information. Each Party shall maintainconfidentiality of all such confidential information, and without obtaining the written consent of the other Party, it shall not disclose any relevantconfidential information to any third parties, except for the information that: (a) is or will be in the public domain (other than through the receivingParty’s unauthorized disclosure); (b) is under the obligation to be disclosed pursuant to the applicable laws or regulations, rules of any stockexchange, or orders of the court or other government authorities; or (c) is required to be disclosed by any Party to its shareholders, investors,legal counsels or financial advisors regarding the transaction contemplated hereunder, provided that such shareholders, investors, legal counselsor financial advisors shall be bound by the confidentiality obligations similar to those set forth in this Section. Disclosure of any confidentialinformation by the staff members or agencies hired by any Party shall be deemed disclosure of such confidential information by such Party, whichParty shall be held liable for breach of this Agreement. This Section shall survive the termination of this Agreement for any reason.3.3双方同意，不论本协议是否变更、解除或终止，本条款将持续有效。The Parties agree that this Section shall survive changes to, and rescission or termination of, this Agreement.4.陈述和保证Representations and Warranties4.1甲方陈述和保证如下：Party A hereby represents and warrants as follows:4.1.1甲方是按照中国法律合法注册并有效存续的外商独资企业。Party A is a whollyforeignowned enterprise legally registered and validly existing in accordance with the laws of China.10秘密文件Strictly Confidential4.1.2甲方已采取必要的公司行为，获得必要的授权，并取得第三方和政府部门的同意及批准（若需）以签署和履行本协议；甲方对本协议的签署和履行并不违反法律法规的明确规定。Party A has taken all necessary corporate actions, obtained all necessary authorization and the consent and approval from third partiesand government agencies (if any) for the execution and performance of this Agreement. Party A’s execution and performance of thisAgreement do not violate any explicit requirements under any law or regulation binding on Party A.4.1.3本协议构成对其合法、有效、有约束力并依本协议之条款对其强制执行的义务。This Agreement constitutes Party A's legal, valid and binding obligations, enforceable in accordance with its terms.4.2乙方陈述和保证如下：Party B hereby represents and warrants as follows:4.2.1乙方是按照中国法律合法登记且有效存续的有限责任公司，乙方根据政府部门的批准和许可从事手机视频技术开发、内容制作和产业化市场推广的经营。Party B is a limited company legally registered and validly existing in accordance with the laws of China, engages in mobile videotechnology research, development, content creation, sale and related industrial promotion pursuant to governmental approvals andpermits;11秘密文件Strictly Confidential4.2.2乙方已采取必要的行为，获得必要的授权，并取得第三方和政府部门的同意及批准（若需）以签署和履行本协议；乙方对本协议的签署和履行并不违反法律法规的明确规定。Party B has taken all necessary actions, obtained all necessary authorization and the consent and approval from third parties andgovernment agencies (if any) for the execution and performance of this Agreement. Party B’s execution and performance of thisAgreement do not violate any explicit requirements under any law or regulation binding on Party B.4.2.3本协议构成对其合法、有效、有约束力并依本协议之条款对其强制执行的义务。This Agreement constitutes Party B's legal, valid and binding obligations, and shall be enforceable against it.5.生效和有效期Effectiveness and Term5.1本协议于文首标明的协议日期签署并同时生效。除非依本协议或双方其他协议的约定而提前终止，本协议有效期为20年，但甲、乙双方应自本协议签署后，每3个月对本协议的内容做一次审查，以决定是否需要根据当时的情况对本协议作出相应修改和补充。This Agreement is executed on the date first above written and shall take effect as of such date. Unless earlier terminated in accordance with theprovisions of this Agreement or relevant agreements separately executed between the Parties, the term of this Agreement shall be 20 years. Afterthe execution of this Agreement, both Parties shall review this Agreement every 3 months to determine whether to amend or supplement theprovisions in this Agreement based on the actual circumstances at that time.12秘密文件Strictly Confidential5.2协议期满前，经甲方书面确认，本协议可以延期。延期的期限由甲方决定，乙方必须无条件地同意该延期。The term of this Agreement may be extended if confirmed in writing by Party A prior to the expiration thereof. The extended term shall bedetermined by Party A, and Party B shall accept such extended term unconditionally.6.终止Termination6.1除非依据本协议续期，本协议于到期之日终止。Unless renewed in accordance with the relevant terms of this Agreement, this Agreement shall be terminated upon the date of expiration hereof.6.2本协议有效期内，除非甲方对乙方有重大过失或存在欺诈行为，乙方不得提前终止本协议。尽管如此，甲方可在任何时候通过提前30天向乙方发出书面通知的方式终止本协议。During the term of this Agreement, unless Party A commits gross negligence, or a fraudulent act, against Party B, Party B shall not terminate thisAgreement prior to its expiration date. Nevertheless, Party A shall have the right to terminate this Agreement upon giving 30 days' prior writtennotice to Party B at any time.6.3在本协议终止之后，双方在第3、7和8条项下的权利和义务将继续有效。The rights and obligations of the Parties under Articles 3, 7 and 8 shall survive the termination of this Agreement.13秘密文件Strictly Confidential7.适用法律和争议解决Governing Law and Resolution of Disputes7.1本协议的订立、效力、解释、履行、修改和终止以及争议的解决适用中国的法律。The execution, effectiveness, construction, performance, amendment and termination of this Agreement and the resolution of disputes hereundershall be governed by the laws of China.7.2因解释和履行本协议而发生的任何争议，本协议双方应首先通过友好协商的方式加以解决。如果在一方向其他方发出要求协商解决的书面通知后30天之内争议仍然得不到解决，则任何一方均可将有关争议提交给中国国际经济贸易仲裁委员会，由该会按照其仲裁规则仲裁解决。仲裁应在北京进行，使用之语言为中文。仲裁裁决是终局性的，对各方均有约束力。In the event of any dispute with respect to the construction and performance of this Agreement, the Parties shall first resolve the dispute throughfriendly negotiations. In the event the Parties fail to reach an agreement on the dispute within 30 days after either Party's request to the otherParties for resolution of the dispute through negotiations, either Party may submit the relevant dispute to the China International Economic andTrade Arbitration Commission for arbitration, in accordance with its Arbitration Rules. The arbitration shall be conducted in Beijing, and thelanguage used in arbitration shall be Chinese. The arbitration award shall be final and binding on all Parties.14秘密文件Strictly Confidential7.3因解释和履行本协议而发生任何争议或任何争议正在进行仲裁时，除争议的事项外，本协议双方仍应继续行使各自在本协议项下的其他权利并履行各自在本协议项下的其他义务。Upon the occurrence of any disputes arising from the construction and performance of this Agreement or during the pending arbitration of anydispute, except for the matters under dispute, the Parties to this Agreement shall continue to exercise their respective rights under this Agreementand perform their respective obligations under this Agreement.8.补偿Indemnification就甲方根据本协议向乙方提供的咨询和服务内容所产生或引起的针对甲方的诉讼、请求或其他要求而招致的任何损失、损害、责任或费用都应由乙方补偿给甲方，以使甲方不受损害，除非该损失、损害、责任或费用是因甲方的重大过失或故意而产生的。Party B shall indemnify and hold harmless Party A from any losses, injuries, obligations or expenses caused by any lawsuit, claims or other demandsagainst Party A arising from or caused by the consultations and services provided by Party A to Party B pursuant this Agreement, except where suchlosses, injuries, obligations or expenses arise from the gross negligence or willful misconduct of Party A.15秘密文件Strictly Confidential9.通知Notices9.1本协议项下要求或发出的所有通知和其他通信应通过专人递送、挂号邮寄、邮资预付或快递服务或传真的方式发到该方下列地址。每一通知还应再以电子邮件送达。该等通知视为有效送达的日期按如下方式确定：All notices and other communications required or permitted to be given pursuant to this Agreement shall be delivered personally or sent byregistered mail, postage prepaid, by a courier service or by facsimile transmission to the address of such Party set forth below. A confirmationcopy of each notice shall also be sent by email. The dates on which notices shall be deemed to have been effectively given shall be determined asfollows:9.1.1通知如果是以专人递送、快递服务或挂号邮寄、邮资预付发出的，则以于设定为通知的地址在接收或拒收之日为有效送达日。Notices given by personal delivery, by courier service or by registered mail, postage prepaid, shall be deemed effectively given on thedate of receipt or refusal at the address specified for notices.9.1.2通知如果是以传真发出的，则以成功传送之日为有效送达日（应以自动生成的传送确认信息为证）。Notices given by facsimile transmission shall be deemed effectively given on the date of successful transmission (as evidenced by anautomatically generated confirmation of transmission).16秘密文件Strictly Confidential9.2为通知的目的，双方地址如下：For the purpose of notices, the addresses of the Parties are as follows:甲方：中传天下信息科技（深圳）有限公司Party A: Zhongchuan Tianxia Information Technology (Shenzhen) Co., Ltd.地址：深圳市南山区高新中三道2号深圳软件园一期五栋401AAddress:401A, Building 5, Phase 1, Shenzhen Software Park, No.2 Gaoxin Zhongsan Road, Nanshan District, Shenzhen收件人：洪婷Attn: Hong Ting乙方：北京中传视讯科技有限公司Party B: Beijing Mobile Vision Technology Co., Ltd地址：北京市朝阳区光华路9号SOHO3QLAB32Address: LAB32, SOHO3Q, No 9, Guanghua Road, Chaoyang District, Beijing.收件人：宋雪松Attn.: Song Xuesong9.3任何一方可按本条规定随时给另一方发出通知来改变其接收通知的地址。Any Party may at any time change its address for notices by a notice delivered to the other Party in accordance with the terms hereof.17秘密文件Strictly Confidential10.协议的转让Assignment10.1乙方不得将其在本协议项下的权利与义务转让给第三方，除非事先征得甲方的书面同意。Without Party A's prior written consent, Party B shall not assign its rights and obligations under this Agreement to any third party.10.2乙方在此同意，甲方可以在其需要时向其他第三方转让其在本协议项下的权利和义务，并在该等转让发生时甲方仅需向乙方发出书面通知，并且无需再就该等转让征得乙方的同意。Party B agrees that Party A may assign its obligations and rights under this Agreement to any third party upon a prior written notice to Party Bbut without the consent of Party B.11.协议的分割性Severability如果本协议有任何一条或多条规定根据任何法律或法规在任何方面被裁定为无效、不合法或不可执行，本协议其余规定的有效性、合法性或可执行性不应因此在任何方面受到影响或损害。双方应通过诚意磋商，争取以法律许可以及双方期望的最大限度内有效的规定取代那些无效、不合法或不可执行的规定，而该等有效的规定所产生的经济效果应尽可能与那些无效、不合法或不能强制执行的规定所产生的经济效果相似。In the event that one or several of the provisions of this Agreement are found to be invalid, illegal or unenforceable in any aspect in accordance with anylaws or regulations, the validity, legality or enforceability of the remaining provisions of this Agreement shall not be affected or compromised in any aspect.The Parties shall strive in good faith to replace such invalid, illegal or unenforceable provisions with effective provisions that accomplish to the greatestextent permitted by law and the intentions of the Parties, and the economic effect of such effective provisions shall be as close as possible to the economiceffect of those invalid, illegal or unenforceable provisions.18秘密文件Strictly Confidential12.协议的修改、补充Amendments and Supplements双方可以书面协议方式对本协议作出修改和补充。经过双方签署的有关本协议的修改协议和补充协议是本协议组成部分，具有与本协议同等的法律效力。Any amendments and supplements to this Agreement shall be in writing. The amendment agreements and supplementary agreements that have beensigned by the Parties and that relate to this Agreement shall be an integral part of this Agreement and shall have the same legal validity as this Agreement.13.语言和副本Language and Counterparts本协议以中文和英文书就，一式二份，甲乙双方各持一份，具有同等效力；中英文版本如有冲突，应以中文版为准。This Agreement is written in both Chinese and English language in two copies, each Party having one copy with equal legal validity; in case there is anyconflict between the Chinese version and the English version, the Chinese version shall prevail.本页其余部分刻意留为空白The Remainder of this page is intentionally left blank19秘密文件Strictly Confidential有鉴于此，双方已使得经其授权的代表于文首所述日期签署了本独家业务合作协议并即生效，以昭信守。IN WITNESS WHEREOF, the Parties have caused their authorized representatives to execute this Exclusive Business Cooperation Agreement as of thedate first above written.甲方：中传天下信息科技（深圳）有限公司（盖章）Party A: Zhongchuan Tianxia Information Technology (Shenzhen) Co., Ltd.(Seal)签字：By: /s/ Hong Ting 姓名：洪婷Name: Hong Ting职务：总经理Title: General Manager20秘密文件Strictly Confidential有鉴于此，双方已使得经其授权的代表于文首所述日期签署了本独家业务合作协议并即生效，以昭信守。IN WITNESS WHEREOF, the Parties have caused their authorized representatives to execute this Exclusive Business Cooperation Agreement as of thedate first above written. 乙方：北京中传视讯科技有限公司（盖章）Party B: Beijing Mobile Vision Technology Co., Ltd. (Seal)签字：By: /s/ Song Xuesong 姓名：宋雪松Name: Song Xuesong职务：董事长Title: Chairman of the Board21秘密文件Strictly ConfidentialEX4.16 4 f20f2017ex416_luokung.htm EXCLUSIVE OPTION AGREEMENT BY AND AMONG ZHONGCHUAN TIANXIA INFORMATION TECHNOLOGY(SHENZHEN) CO., LTD., XUESONG SONG, WEILI CHEN, PING WANG, DONGLAI LIU, AND BEIJING MOBILE VISION TECHNOLOGY CO., LTD., DATEDAUGUST 31, 2015Exhibit 4.16独家购买权协议Exclusive Option Agreement本独家购买权协议 (下称“本协议”) 由以下各方于年月日在中华人民共和国（下称“中国”）北京签订：This Exclusive Option Agreement (this “Agreement”) is executed by and among the Parties below as of in Beijing, the People’s Republic of China (the“China” or “PRC”):甲方：中传天下信息科技（深圳）有限公司，一家依照中国法律设立和存在的外商独资企业，地址为深圳市南山区高新中三道2号深圳软件园一期五栋401A；Party A:Zhongchuan Tianxia Information Technology (Shenzhen) Co., Ltd., a whollyforeignowned enterprise organized and existing under the laws of China,with its address at 401A, Building 5, Phase 1, Shenzhen Software Park, No.2 Gaoxin Zhongsan Road, Nanshan District, Shenzhen.乙方：Party B:a)宋雪松Song Xuesong身份证号码:120112196809040417ID Card No.:120112196809040417住所：天津市河西区广东路中裕园33702Address:Zhongyu Yuan 33702, Guangdong Road, Hexi District, Tianjinb)陈蔚力Chen Weili身份证号码:120106197309240516ID Card No.:120106197309240516住所：广东省深圳市宝安区宝城上川路15号Address:Baocheng Shangchuan Road 15, Baoan District, Shenzhen, Guangdong1秘密文件Strictly Confidentialc)王平Wang Ping身份证号码:35020319691030401xID Card No.:35020319691030401x住所：广东省深圳市南山区高新南环路36号彩虹之岸12栋4AAddress:Caihong Zhi’an Building No.12 Suite 4A, Gaoxin Nanhuan Road 36, Nanshan District, Shenzhen, Guangdongd)刘东来Liu Donglai身份证号码:120107196810103912ID Card No.:120107196810103912住所：天津市和平区南京路诚基经贸中心1号楼2门1702号Address:No 1702, Door 2, Build 1, Chengji Economic and Trade Centre, Nanjing Road, Heping District, Tianjin.丙方：北京中传视讯科技有限公司，一家依照中国法律设立和存在的有限责任公司，地址为北京市朝阳区光华路9号SOHO3QLAB32，统一社会信用代码为9111010576215249XM；Party C:Beijing Mobile Vision Technology Co., Ltd., a limited company duly registered in China, with its address at LAB32, SOHO3Q, No 9, Guanghua Road,Chaoyang District, Beijing and its uniform social credit code of 9111010576215249XM.2秘密文件Strictly Confidential在本协议中，甲方、乙方和丙方以下各称“一方”，合称“各方”。In this Agreement, each of Party A, Party B and Party C shall be referred to as a “Party” respectively, and they shall be collectively referred to as the“Parties”.鉴于，乙方系丙方股东并合计持有丙方100%股权，乙方将按本协议之条款授予甲方购买全部或部分该股权的权利。Whereas, Party B are the shareholders of Party C and jointly hold 100% of the equity interest in Party C, and Party B are willing to grant to Party A the rightto acquire such equity interest, in whole or in part, on the terms herein.现各方协商一致，达成如下协议：Now therefore, upon mutual discussion and negotiation, the Parties have reached the following agreement:1.股权买卖Sale and Purchase of Equity Interest1.1授予权利Option Granted乙方在此不可撤销地授予甲方在中国法律允许的前提下，按照甲方自行决定的行使步骤，并按照本协议第1.3条所述的价格，随时一次或多次从乙方购买或指定一人或多人(“被指定人”)从乙方购买其目前和将来所持有的丙方的全部或部分股权（无论乙方出资额和/或持股比例将来是否发生变化）的一项不可撤销的专有权(“股权购买权”)。除甲方和被指定人外，任何第三人均不得享有股权购买权或其他与乙方股权有关的权利。丙方特此同意乙方向甲方授予股权购买权。本款及本协议所规定的“人”指个人、公司、合营企业、合伙、企业、信托或非公司组织。Party B hereby irrevocably grant Party A an irrevocable and exclusive right to purchase, or designate one or more persons (each, a “Designee”) topurchase the equity interests in Party C now and in the future held by Party B (regardless whether Party B’s capital contribution amount and/orpercentage of shareholding will be changed in the future) once or at multiple times at any time in part or in whole at Party A’s sole and absolutediscretion to the extent permitted by Chinese laws and at the price described in Section 1.3 herein (such right being the “Equity Interest PurchaseOption”). Except for Party A and the Designee(s), no other person shall be entitled to the Equity Interest Purchase Option or other rights withrespect to the equity interests of Party B. Party C hereby agrees to the grant by Party B of the Equity Interest Purchase Option to Party A. Theterm “person” as used herein shall refer to individuals, corporations, partnerships, partners, enterprises, trusts or noncorporate organizations.3秘密文件Strictly Confidential1.2行使步骤Steps for Exercise of Equity Interest Purchase Option甲方行使其股权购买权以符合中国法律和法规的规定为前提。甲方行使股权购买权时，应向乙方发出书面通知(“股权购买通知”)，股权购买通知应载明以下事项：(a)甲方关于行使股权购买权的决定；(b)甲方拟从乙方购买的股权份额(“被购买的股权”)；和(c)被购买的股权的买入日期。Subject to the provisions of the laws and regulations of China, Party A may exercise the Equity Interest Purchase Option by issuing a writtennotice to Party B (the “Equity Interest Purchase Option Notice”), specifying: (a) Party A’s decision to exercise the Equity Interest PurchaseOption; (b) the portion of equity interests to be purchased from Party B (the “Optioned Interests”); and (c) the date for purchasing the OptionedInterests.1.3股权买价Equity Interest Purchase Price被购买的股权的买价（“股权买价”）应是行权当时中国法律允许的最低价格。乙方收到该股权对价后，应当提供给丙方与该股权买价相同金额的借款，该借款的期限为20年，且为无息。乙方应当在该借款期限届满时就该借款放弃对丙方的债权。The purchase price of the Optioned Interests (the “Equity Interest Purchase Price”) shall be the lowest price permitted by the laws of China. Afterreceiving the Equity Interest Purchase Price, Party B shall make an interestfree loan equivalent to the amount of Equity Interest Purchase Price toParty C, of which term is 20 years. Each member of Party B shall give up his(her) creditor’s right when the loan term expires.4秘密文件Strictly Confidential1.4转让被购买股权Transfer of Optioned Interests甲方每次行使股权购买权时：For each exercise of the Equity Interest Purchase Option:1.4.1乙方应责成丙方及时召开股东会会议，在该会议上，应通过批准乙方向甲方和/或被指定人转让被购买的股权的决议；Party B shall cause Party C to promptly convene a shareholders meeting, at which a resolution shall be adopted approving Party B’stransfer of the Optioned Interests to Party A and/or the Designee(s);1.4.2乙方应就其向甲方和/或被指定人转让被购买股权取得丙方其他股东同意该转让并放弃优先购买权的书面声明。Party B shall obtain written statements from the other shareholder of Party C giving consent to the transfer of the equity interest to PartyA and/or the Designee(s) and waiving any right of first refusal related thereto.1.4.3乙方应与甲方和/或(在适用的情况下)被指定人按照本协议及股权购买通知的规定，为每次转让签订股权转让协议；Party B shall execute a share transfer contract with respect to each transfer with Party A and/or each Designee (whichever is applicable),in accordance with the provisions of this Agreement and the Equity Interest Purchase Option Notice regarding the Optioned Interests;5秘密文件Strictly Confidential1.4.4有关方应签署所有其他所需协议、协议或文件，取得全部所需的政府批准和同意，并采取所有所需行动，在不附带任何担保权益的情况下，将被购买的股权的有效所有权转移给甲方和/或被指定人并使甲方和/或被指定人成为被购买的股权的登记在册所有人。为本款及本协议的目的，“担保权益”包括担保、抵押、第三方权利或权益，任何购股权、收购权、优先购买权、抵销权、所有权扣留或其他担保安排等；但为了明确起见，不包括在本协议、乙方股权质押协议项下产生的任何担保权益。本款及本协议所规定的“乙方股权质押协议”指甲方、乙方和丙方于本协议签署之日签订的股权质押协议，根据股权质押协议，乙方为担保丙方能履行丙方与甲方签订的独家业务合作协议项下的义务，而向甲方质押其在丙方的全部乙方股权。The relevant Parties shall execute all other necessary contracts, agreements or documents, obtain all necessary government licenses andpermits and take all necessary actions to transfer valid ownership of the Optioned Interests to Party A and/or the Designee(s),unencumbered by any security interests, and cause Party A and/or the Designee(s) to become the registered owner(s) of the OptionedInterests. For the purpose of this Section and this Agreement, “security interests” shall include securities, mortgages, third party’s rightsor interests, any stock options, acquisition right, right of first refusal, right to offset, ownership retention or other security arrangements,but shall be deemed to exclude any security interest created by this Agreement and Party B’s Equity Interest Pledge Agreement. “PartyB’s Equity Interest Pledge Agreement” as used in this Section and this Agreement shall refer to the Equity Interest Pledge Agreementexecuted by and among Party A, Party B and Party C on the date of this Agreement, whereby Party B pledge all of their equity interests inParty C to Party A, in order to guarantee Party C’s performance of its obligations under the Exclusive Business Corporation Agreementexecuted by and between Party C and Party A.6秘密文件Strictly Confidential2.知识产权独家购买权Exclusive Option regarding the Intellectual Property Rights2.1本协议签订之日起，若乙方拟转让、出售或以其他方式处置（任一处置方式以下简称“转让”）其拥有或持有的全部或部分知识产权（以下称“知识产权”，定义见第2.4条），甲方有权独家购买该等知识产权。From the date hereof, if Party B proposes to transfer, sell or dispose of (each, a “transfer”) all or any part of the intellectual property rights ownedor held by Party B (“IPR”), Party A shall have exclusive option.2.2若乙方有意转让全部或部分知识产权，应事先向甲方发出书面通知(“转让通知”)，转让通知应载明以下事项：(a) 乙方关于转让知识产权的意向；(b) 乙方拟转让的知识产权清单(“拟转让知识产权”)及转让的价格和其他条件。转让通知视为乙方向甲方发出的一份要约，按照该要约，乙方同意按转让通知中指定的价格条件向甲方转让全部或部分拟转让知识产权。Prior to Party B proposes to transfer all or any part of its IPR, Party B shall give Party A a written notice (“Transfer Notice”), which shall specify (a)Party B’s intention to make the transfer; (b) the list of IPR to be transferred (“Offered IPR”) and the consideration and other conditions uponwhich the transfer is to be made. The Transfer Notice constitutes Party B’s offer given to Party A, pursuant to which, Party B agrees to transfer allor any part of its Offered IPR to Party A based on the same conditions described in the Transfer Notice.7秘密文件Strictly Confidential2.3甲方收到转让通知后，有权在30日内选择按照转让通知中列明的转让价格和条件购买拟转让知识产权。如果甲方行使其独家购买权，双方应于甲方收到转让通知后45日内签订有关的知识产权转让协议，乙方应办理法律规定的知识产权转让的批准和登记手续。Party A shall have an option for a period of 30 days from Party A’s receipt of the Transfer Notice to elect to purchase the Offered IPR at the sameprice and subject to the same conditions as described in the Transfer Notice. If Party A decides to exercise its exclusive option, the parties shallenter into relevant IPR transfer agreement within 45 days upon Party A’s receipt of the Transfer Notice and Party B is responsible to complete allrelated approvals and registrations formalities as prescribed by the PRC law.2.4本协议第2条所称“知识产权”指任何知识产权，包括但不限于著作权、专利权、专利申请权、商标、域名、软件、专有技术，并包括前述知识产权申请权利以及登记注册的权利，以及其他所有与前述知识产权有关的权利和权益。The “IPR” referred to in this Article 2 means any intellectual property rights, including, without limitations, copyrights, patents, patentapplications, trademarks, domain names, software and knowhow together with (a) all rights to apply for or register any of the foregoing and (b) allother rights and interests to any of the foregoing.8秘密文件Strictly Confidential3.承诺Covenants3.1有关丙方的承诺Covenants regarding Party C乙方（作为丙方的股东）和丙方在此承诺：Party B (as the shareholders of Party C) and Party C hereby covenant as follows:3.1.1未经甲方的事先书面同意，不以任何形式补充、更改或修改丙方公司章程文件，增加或减少其注册资本，或以其他方式改变其注册资本结构；Without the prior written consent of Party A, they shall not in any manner supplement, change or amend the articles of association andbylaws of Party C, increase or decrease its registered capital, or change its structure of registered capital in other manners;3.1.2按照良好的财务和商业标准及惯例，保持其公司的存续，审慎地及有效地经营其业务和处理事务；They shall maintain Party C’s corporate existence in accordance with good financial and business standards and practices by prudentlyand effectively operating its business and handling its affairs;3.1.3未经甲方的事先书面同意，不在本协议签署之日起的任何时间出售、转让、抵押或以其他方式处置丙方的任何资产、业务或收入的合法或受益权益，或允许在其上设置任何其他担保权益；Without the prior written consent of Party A, they shall not at any time following the date hereof, sell, transfer, mortgage or dispose of inany manner any assets of Party C or legal or beneficial interest in the business or revenues of Party C, or allow the encumbrance thereonof any security interest;3.1.4未经甲方的事先书面同意，不发生、继承、保证或容许存在任何债务，但(i)正常或日常业务过程中产生而不是通过借款方式产生的债务；和(ii)已向甲方披露和得到甲方书面同意的债务除外；Without the prior written consent of Party A, they shall not incur, inherit, guarantee or suffer the existence of any debt, except for (i)debts incurred in the ordinary course of business other than through loans; and (ii) debts disclosed to Party A for which Party A’swritten consent has been obtained;9秘密文件Strictly Confidential3.1.5一直在正常业务过程中经营所有业务，以保持丙方的资产价值，不进行任何足以影响其经营状况和资产价值的作为/不作为；They shall always operate all of Party C’s businesses during the ordinary course of business to maintain the asset value of Party C andrefrain from any action/omission that may affect Party C’s operating status and asset value;3.1.6未经甲方的事先书面同意，不得让丙方签订任何重大协议，但在正常业务过程中签订的协议除外(就本段而言，如果一份协议的价值超过【人民币10万元】，即被视为重大协议)；Without the prior written consent of Party A, they shall not cause Party C to execute any major contract, except the contracts in theordinary course of business (for purpose of this subsection, a contract with a value exceeding RMB 100,000 shall be deemed a majorcontract);3.1.7未经甲方的事先书面同意，丙方不得向任何人提供贷款或信贷；Without the prior written consent of Party A, they shall not cause Party C to provide any person with any loan or credit;3.1.8应甲方要求，向其提供所有关于丙方的营运和财务状况的资料；They shall provide Party A with information on Party C’s business operations and financial condition at Party A’s request;10秘密文件Strictly Confidential3.1.9如甲方提出要求，丙方应从甲方接受的保险公司处购买和持有有关其资产和业务的保险，该保险的金额和险种应与经营类似业务的公司一致；If requested by Party A, they shall procure and maintain insurance in respect of Party C’s assets and business from an insurance carrieracceptable to Party A, at an amount and type of coverage typical for companies that operate similar businesses;3.1.10未经甲方的事先书面同意，丙方不得与任何人合并或联合，或对任何人进行收购或投资；Without the prior written consent of Party A, they shall not cause or permit Party C to merge, consolidate with, acquire or invest in anyperson;3.1.11将发生的或可能发生的与丙方资产、业务或收入有关的诉讼、仲裁或行政程序立即通知甲方；They shall immediately notify Party A of the occurrence or possible occurrence of any litigation, arbitration or administrative proceedingsrelating to Party C’s assets, business or revenue;3.1.12为保持丙方对其全部资产的所有权，签署所有必要或适当的文件，采取所有必要或适当的行动和提出所有必要或适当的控告或对所有索偿进行必要和适当的抗辩；To maintain the ownership by Party C of all of its assets, they shall execute all necessary or appropriate documents, take all necessary orappropriate actions and file all necessary or appropriate complaints or raise necessary and appropriate defenses against all claims;11秘密文件Strictly Confidential3.1.13未经甲方事先书面同意，不得以任何形式派发股息予各股东，但一经甲方要求，丙方应立即将其所有可分配利润全部立即分配给其各股东；及Without the prior written consent of Party A, they shall ensure that Party C shall not in any manner distribute dividends to itsshareholders, provided that upon Party A’s written request, Party C shall immediately distribute all distributable profits to itsshareholders; and3.1.14根据甲方的要求，委任由其指定的任何人士出任丙方的董事和/或执行董事。At the request of Party A, they shall appoint any persons designated by Party A as the director and/or executive director of Party C.3.2乙方和丙方的承诺Covenants of Party B and Party C乙方承诺：Party B hereby covenant as follows:3.2.1未经甲方的事先书面同意，不出售、转让、抵押或以其他方式处置其拥有的丙方的股权的合法或受益权益，或允许在其上设置任何其他担保权益，但根据乙方签署的《股权质押协议》在该股权上设置的质押则除外；Without the prior written consent of Party A, Party B shall not sell, transfer, mortgage or dispose of in any other manner any legal orbeneficial interest in the equity interests in Party C held by Party B, or allow the encumbrance thereon of any security interest, except forthe pledge placed on these equity interests in accordance with Party B’s Equity Interest Pledge Agreement;12秘密文件Strictly Confidential3.2.2促使丙方股东会和/或执行董事不批准在未经甲方的事先书面同意的情况下，出售、转让、抵押或以其他方式处置任何乙方持有之丙方的股权的合法权益或受益权，或允许在其上设置任何其他担保权益，但批准根据乙方签署的《股权质押协议》在乙方股权上设置的质押则除外；Party B shall cause the shareholders’ meeting and/or the executive director of Party C not to approve the sale, transfer, mortgage ordisposition in any other manner of any legal or beneficial interest in the equity interests in Party C held by Party B, or allow theencumbrance thereon of any security interest, without the prior written consent of Party A, except for the pledge placed on these equityinterests in accordance with Party B’s Equity Interest Pledge Agreement;3.2.3未经甲方的事先书面同意的情况下，对于丙方与任何人合并或联合，或对任何人进行收购或投资，乙方将促成丙方股东会或执行董事不予批准；Party B shall cause the shareholders’ meeting or the executive director of Party C not to approve the merger or consolidation with anyperson, or the acquisition of or investment in any person, without the prior written consent of Party A;3.2.4将发生的或可能发生的任何关于其所拥有的股权的诉讼、仲裁或行政程序立即通知甲方；Party B shall immediately notify Party A of the occurrence or possible occurrence of any litigation, arbitration or administrativeproceedings relating to the equity interests in Party C held by Party B;13秘密文件Strictly Confidential3.2.5促使丙方股东会或执行董事表决赞成本协议规定的被购买的股权的转让并应甲方之要求采取其他任何行动；Party B shall cause the shareholders’ meeting or the executive director of Party C to vote their approval of the transfer of the OptionedInterests as set forth in this Agreement and to take any and all other actions that may be requested by Party A;3.2.6为保持其对股权的所有权，签署所有必要或适当的文件，采取所有必要或适当的行动和提出所有必要或适当的控告或对所有索偿进行必要和适当的抗辩；To the extent necessary to maintain Party B’s ownership in Party C, Party B shall execute all necessary or appropriate documents, take allnecessary or appropriate actions and file all necessary or appropriate complaints or raise necessary and appropriate defenses against allclaims;3.2.7应甲方的要求，委任由其指定的任何人士出任丙方的董事和/或执行董事；Party B shall appoint any designee of Party A as the director and/or executive director of Party C, at the request of Party A;3.2.8经甲方随时要求，应向其指定的代表在任何时间无条件地根据本协议的股权购买权立即转让其股权，并放弃其对其他现有股东进行上述股权转让所享有的优先购买权（如有的话）；和At the request of Party A at any time, Party B shall promptly and unconditionally transfer its equity interests in Party C to Party A’sDesignee(s) in accordance with the Equity Interest Purchase Option under this Agreement, and Party B hereby waives its right of firstrefusal (if any) to the share transfer by the other existing shareholder of Party C (if any); and14秘密文件Strictly Confidential3.2.9严格遵守本协议及各方共同或分别签订的其他协议的各项规定，切实履行该等协议项下的各项义务，并不进行任何足以影响该等协议的有效性和可执行性的作为/不作为。如果乙方对于本协议项下或乙方股权质押协议下或对甲方的授权委托书中的股权，还留存有任何权利，除非甲方书面指示，否则乙方仍不得行使该权利。Party B shall strictly abide by the provisions of this Agreement and other contracts jointly or separately executed by and among Party B,Party C and Party A, perform the obligations hereunder and thereunder, and refrain from any action/omission that may affect theeffectiveness and enforceability thereof. To the extent that Party B has any remaining rights with respect to the equity interests subject tothis Agreement hereunder or under Party B’s Equity Interest Pledge Agreement or under the Power of Attorney granted in favor of PartyA, Party B shall not exercise such rights except in accordance with the written instructions of Party A.4.陈述和保证Representations and Warranties乙方和丙方特此在本协议签署之日和每一个转让日向甲方共同及分别陈述和保证如下：Party B and Party C hereby represent and warrant to Party A, jointly and severally, as of the date of this Agreement and each date of transfer of theOptioned Interests, that:4.1其具有签订和交付本协议和其为一方的、根据本协议为每一次转让被购买的股权而签订的任何股权转让协议(各称为"转让协议")，并履行其在本协议和任何转让协议项下的义务的权力和能力。乙方和丙方同意在甲方行使购买权时，他们将签署与本协议条款一致的转让协议。本协议和其是一方的各转让协议一旦签署后，构成或将对其构成合法、有效及具有约束力的义务并可按照其条款对其强制执行；They have the authority to execute and deliver this Agreement and any share transfer contracts to which they are a party concerning theOptioned Interests to be transferred thereunder (each, a “Transfer Contracts”), and to perform their obligations under this Agreement and anyTransfer Contracts. Party B and Party C agree to enter into Transfer Contracts consistent with the terms of this Agreement upon Party A’s exerciseof the Equity Interest Purchase Option. This Agreement and the Transfer Contracts to which they are a party constitute or will constitute theirlegal, valid and binding obligations and shall be enforceable against them in accordance with the provisions thereof;15秘密文件Strictly Confidential4.2无论是本协议或任何转让协议的签署和交付还是其在本协议或任何转让协议项下的义务的履行均不会：(i)导致违反任何有关的中国法律；(ii)与丙方章程或其他组织文件相抵触；(iii)导致违反其是一方或对其有约束力的任何协议或文件，或构成其是一方或对其有约束力的任何协议或文件项下的违约；(iv)导致违反有关向任何一方颁发的任何许可或批准的授予和(或)继续有效的任何条件；或(v)导致向任何一方颁发的任何许可或批准中止或被撤销或附加条件；The execution and delivery of this Agreement or any Transfer Contracts and the obligations under this Agreement or any Transfer Contracts shallnot: (i) cause any violation of any applicable laws of China; (ii) be inconsistent with the articles of association, bylaws or other organizationaldocuments of Party C; (iii) cause the violation of any contracts or instruments to which they are a party or which are binding on them, orconstitute any breach under any contracts or instruments to which they are a party or which are binding on them; (iv) cause any violation of anycondition for the grant and/or continued effectiveness of any licenses or permits issued to either of them; or (v) cause the suspension orrevocation of or imposition of additional conditions to any licenses or permits issued to either of them;4.3乙方对其在丙方拥有的股权拥有良好和可出售的所有权，除乙方签署的《股权质押协议》外，乙方在上述股权上没有设置任何担保权益；Party B have a good and merchantable title to the equity interests in Party C they hold. Except for Party B’s Equity Interest Pledge Agreement,Party B have not placed any security interest on such equity interests;16秘密文件Strictly Confidential4.4目前没有悬而未决的或构成威胁的与丙方的股权、丙方资产有关的或与丙方有关的诉讼、仲裁或行政程序。There are no pending or threatened litigation, arbitration or administrative proceedings relating to the equity interests in Party C, assets of Party Cor Party C.5.生效日Effective Date5.1本协议于各方签署本协议之日生效，有效期10年，经甲方选择可再延长10年。This Agreement shall become effective upon the date hereof, and remain effective for a term of 10 years, and may be renewed for an additional 10years at Party A’s election.5.2若丙方股东发生变化，由新股东签署此协议，在此协议签署之日，原协议自动视为无效。In the event of a change in the shareholders of Party C, the new shareholder should sign this agreement and the original agreement willautomatically be deemed invalid on the date of signing of this agreement.17秘密文件Strictly Confidential6.适用法律与争议解决Governing Law and Resolution of Disputes6.1适用法律Governing law本协议的订立、效力、解释、履行、修改和终止以及争议解决均适用中国正式公布并可公开得到的法律。对中国正式公布并可公开得到的法律没有规定的事项，将适用国际法律原则和惯例。The execution, effectiveness, construction, performance, amendment and termination of this Agreement and the resolution of disputes hereundershall be governed by the formally published and publicly available laws of China. Matters not covered by formally published and publiclyavailable laws of China shall be governed by international legal principles and practices.6.2争议的解决方法Methods of Resolution of Disputes因解释和履行本协议而发生的任何争议，本协议各方应首先通过友好协商的方式加以解决。如果在一方向其他方发出要求协商解决的书面通知后30天之内争议仍然得不到解决，则任何一方均可将有关争议提交给中国国际经济贸易仲裁委员会，由该会按照其届时有效的仲裁规则仲裁解决。仲裁应在北京进行，使用之语言为中文。仲裁裁决是终局性的，对各方均有约束力。In the event of any dispute with respect to the construction and performance of this Agreement, the Parties shall first resolve the dispute throughfriendly negotiations. In the event the Parties fail to reach an agreement on the dispute within 30 days after either Party’s request to the otherParties for resolution of the dispute through negotiations, either Party may submit the relevant dispute to the China International Economic andTrade Arbitration Commission for arbitration, in accordance with its then effective arbitration rules. The arbitration shall be conducted in Beijing,and the language used in arbitration shall be Chinese. The arbitration award shall be final and binding on all Parties.18秘密文件Strictly Confidential7.税款、费用Taxes and Fees每一方应承担根据中国法律因准备和签署本协议和各转让协议以及完成本协议和各转让协议拟定的交易而由该方发生的或对其征收的任何和全部的转让和注册的税、花费和费用。Each Party shall pay any and all transfer and registration tax, expenses and fees incurred thereby or levied thereon in accordance with the laws of China inconnection with the preparation and execution of this Agreement and the Transfer Contracts, as well as the consummation of the transactionscontemplated under this Agreement and the Transfer Contracts.8.通知Notices8.1本协议项下要求或发出的所有通知和其他通信应通过专人递送、挂号邮寄、邮资预付或商业快递服务或传真的方式发到该方下列地址。每一通知还应再以电子邮件送达。该等通知视为有效送达的日期按如下方式确定：All notices and other communications required or permitted to be given pursuant to this Agreement shall be delivered personally or sent byregistered mail, postage prepaid, by a commercial courier service or by facsimile transmission to the address of such Party set forth below. Aconfirmation copy of each notice shall also be sent by email. The dates on which notices shall be deemed to have been effectively given shall bedetermined as follows:8.1.1通知如果是以专人递送、快递服务或挂号邮寄、邮资预付发出的，则以于设定为通知的地址在接收或拒收之日为有效送达日。Notices given by personal delivery, by courier service or by registered mail, postage prepaid, shall be deemed effectively given on thedate of receipt or refusal at the address specified for notices.19秘密文件Strictly Confidential8.1.2通知如果是以传真发出的，则以成功传送之日为有效送达日（应以自动生成的传送确认信息为证）。Notices given by facsimile transmission shall be deemed effectively given on the date of successful transmission (as evidenced by anautomatically generated confirmation of transmission).8.2为通知的目的，各方地址如下：For the purpose of notices, the addresses of the Parties are as follows:甲方：中传天下信息科技（深圳）有限公司Party A:Zhongchuan Tianxia Information Technology (Shenzhen) Co., Ltd.地址：深圳市南山区高新中三道2号深圳软件园一期五栋401AAddress:401A, Building 5, Phase 1, Shenzhen Software Park, No.2 Gaoxin Zhongsan Road, Nanshan District, Shenzhen.收件人：洪婷Attn:Hong Ting乙方：Party B: 宋雪松Song Xuesong住所：天津市河西区广东路中裕园33702Address:Zhongyu Yuan 33702, Guangdong Road, Hexi District, Tianjin20秘密文件Strictly Confidential陈蔚力Chen Weili住所：广东省深圳市宝安区宝城上川路15号Address:Baocheng Shangchuan Road 15, Baoan District, Shenzhen, Guangdong王平Wang Ping住所：广东省深圳市南山区高新南环路36号彩虹之岸12栋4AAddress:Caihong Zhi’an Building No.12 Suite 4A, Gaoxin Nanhuan Road 36, Nanshan District, Shenzhen, Guangdong刘东来Liu Donglai住所：天津市和平区南京路诚基经贸中心1号楼2门1702号Address:No 1702, Door 2, Build 1, Chengji Economic and Trade Centre, Nanjing Road, Heping District, Tianjin.丙方：北京中传视讯科技有限公司Party C:Beijing Mobile Vision Technology Co., Ltd.地址：北京市朝阳区光华路9号SOHO3QLAB32Address: LAB32, SOHO3Q, No 9, Guanghua Road, Chaoyang District, Beijing .收件人：宋雪松Attn: Song Xuesong8.3任何一方可按本条规定随时给其他方发出通知来改变其接收通知的地址。Any Party may at any time change its address for notices by a notice delivered to the other Parties in accordance with the terms hereof.21秘密文件Strictly Confidential9.保密责任Confidentiality各方承认及确定彼此就有关本协议而交换的任何口头或书面资料均属机密资料。各方应当对所有该等资料予以保密，而在未得其他方书面同意前，不得向任何第三者披露任何有关资料，惟下列情况除外：(a)公众人士知悉或将会知悉该等资料(并非由接受资料之一方擅自向公众披露)；(b)适用法律法规或股票交易的规则或规例所需披露之资料；或(c)由任何一方就本协议所述交易而需向其法律或财务顾问披露之资料而该法律或财务顾问亦需遵守与本条款相类似之保密责任。如任何一方工作人员或聘请机构的泄密均视为该方的泄密，需依本协议承担违约责任。无论本协议以任何理由终止，本条款仍然生效。The Parties acknowledge that any oral or written information exchanged among them with respect to this Agreement is confidential information. Each Partyshall maintain the confidentiality of all such information, and without obtaining the written consent of other Parties, it shall not disclose any relevantinformation to any third parties, except in the following circumstances: (a) such information is or will be in the public domain (provided that this is not theresult of a public disclosure by the receiving party); (b) information disclosed as required by applicable laws or rules or regulations of any stock exchange;or (c) information required to be disclosed by any Party to its legal counsel or financial advisor regarding the transaction contemplated hereunder, and suchlegal counsel or financial advisor are also bound by confidentiality duties similar to the duties in this section. Disclosure of any confidential information bythe staff members or agency hired by any Party shall be deemed disclosure of such confidential information by such Party, which Party shall be held liablefor breach of this Agreement. This Section shall survive the termination of this Agreement for any reason.22秘密文件Strictly Confidential10.进一步保证Further Warranties各方同意迅速签署为执行本协议的各项规定和目的而合理需要的或对其有利的文件，以及为执行本协议的各项规定和目的而采取合理需要的或对其有利的进一步行动。The Parties agree to promptly execute documents that are reasonably required for or are conducive to the implementation of the provisions and purposes ofthis Agreement and take further actions that are reasonably required for or are conducive to the implementation of the provisions and purposes of thisAgreement.11.其他Miscellaneous11.1修订、修改与补充Amendment, change and supplement对本协议作出修订、修改与补充，必须经每一方签署书面协议。Any amendment, change and supplement to this Agreement shall require the execution of a written agreement by all of the Parties.11.2完整协议Entire agreement除了在本协议签署后所作出的书面修订、补充或修改以外，本协议构成本协议各方就本协议标的物所达成的完整协议，取代在此之前就本协议标的物所达成的所有口头或书面的协商、陈述和协议。 Except for the amendments, supplements or changes in writing executed after theexecution of this Agreement, this Agreement shall constitute the entire agreement reached by and among the Parties hereto with respect to thesubject matter hereof, and shall supercede all prior oral and written consultations, representations and contracts reached with respect to thesubject matter of this Agreement.23秘密文件Strictly Confidential11.3标题Headings本协议的标题仅为方便阅读而设，不应被用来解释、说明或在其他方面影响本协议各项规定的含义。The headings of this Agreement are for convenience only, and shall not be used to interpret, explain or otherwise affect the meanings of theprovisions of this Agreement.11.4语言Language本协议以中文和英文书就，一式八份，乙方共计六名股东以及甲方、丙方各持一份，具有同等效力；中英文版本如有冲突，应以中文版为准。This Agreement is written in both Chinese and English language in eight copies, the 6 shareholders of Party B, Party A and Party C having onecopy with equal legal validity respectively; in case there is any conflict between the Chinese version and the English version, the Chinese versionshall prevail.11.5可分割性Severability如果本协议有任何一条或多条规定根据任何法律或法规在任何方面被裁定为无效、不合法或不可执行，本协议其余规定的有效性、合法性或可执行性不应因此在任何方面受到影响或损害。各方应通过诚意磋商，争取以法律许可以及各方期望的最大限度内有效的规定取代那些无效、不合法或不可执行的规定，而该等有效的规定所产生的经济效果应尽可能与那些无效、不合法或不能强制执行的规定所产生的经济效果相似。In the event that one or several of the provisions of this Agreement are found to be invalid, illegal or unenforceable in any aspect in accordancewith any laws or regulations, the validity, legality or enforceability of the remaining provisions of this Agreement shall not be affected orcompromised in any respect. The Parties shall strive in good faith to replace such invalid, illegal or unenforceable provisions with effectiveprovisions that accomplish to the greatest extent permitted by law and the intentions of the Parties, and the economic effect of such effectiveprovisions shall be as close as possible to the economic effect of those invalid, illegal or unenforceable provisions.24秘密文件Strictly Confidential11.6继任者Successors本协议对各方各自的继任者和各方所允许的受让方应具有约束力并对其有利。This Agreement shall be binding on and shall inure to the interest of the respective successors of the Parties and the permitted assigns of suchParties.11.7继续有效Survival11.7.1协议期满或提前终止前因本协议而发生的或到期的任何义务在本协议期满或提前终止后继续有效。Any obligations that occur or that are due as a result of this Agreement upon the expiration or early termination of this Agreement shallsurvive the expiration or early termination thereof.11.7.2本协议第5、6、9条和本第11.7条的规定在本协议终止后继续有效。The provisions of Articles 5, 6, 9 and this Section 11.7 shall survive the termination of this Agreement.25秘密文件Strictly Confidential11.8弃权Waivers任何一方可以对本协议的条款和条件作出弃权，但必须经书面作出并经各方签字。一方在某种情况下就其他方的违约所作的弃权不应被视为该方在其他情况下就类似的违约已经对其他方作出弃权。Any Party may waive the terms and conditions of this Agreement, provided that such a waiver must be provided in writing and shall require thesignatures of the Parties. No waiver by any Party in certain circumstances with respect to a breach by other Parties shall operate as a waiver bysuch a Party with respect to any similar breach in other circumstances.本页其余部分刻意留为空白The Remainder of this page is intentionally left blank26秘密文件Strictly Confidential有鉴于此，各方已自行或使得其各自授权代表于文首所载日期签署本独家购买权协议。IN WITNESS WHEREOF, the Parties have executed, or caused their respective duly authorized representatives to execute, this Exclusive Option Agreement as ofthe date first above written.甲方：中传天下信息科技（深圳）有限公司（盖章）Party A: Zhongchuan Tianxia Information Technology (Shenzhen) Co., Ltd. (Seal)签字：By:/s/ Hong Ting姓名：洪婷Name: Hong Ting职务：总经理Title: General Manager秘密文件 Strictly Confidential有鉴于此，各方已自行或使得其各自授权代表于文首所载日期签署本独家购买权协议。IN WITNESS WHEREOF, the Parties have executed, or caused their respective duly authorized representatives to execute, this Exclusive Option Agreement as ofthe date first above written.乙方：Party B:宋雪松Song Xuesong签字：By:/s/ Song Xuesong秘密文件 Strictly Confidential有鉴于此，各方已自行或使得其各自授权代表于文首所载日期签署本独家购买权协议。IN WITNESS WHEREOF, the Parties have executed, or caused their respective duly authorized representatives to execute, this Exclusive Option Agreement as ofthe date first above written.乙方：Party B:陈蔚力Chen Weili签字：By:/s/ Chen Weili秘密文件 Strictly Confidential有鉴于此，各方已自行或使得其各自授权代表于文首所载日期签署本独家购买权协议。IN WITNESS WHEREOF, the Parties have executed, or caused their respective duly authorized representatives to execute, this Exclusive Option Agreement as ofthe date first above written.乙方：Party B:王平Wang Ping签字：By:/s/ Wang Ping秘密文件 Strictly Confidential有鉴于此，各方已自行或使得其各自授权代表于文首所载日期签署本独家购买权协议。IN WITNESS WHEREOF, the Parties have executed, or caused their respective duly authorized representatives to execute, this Exclusive Option Agreement as ofthe date first above written.乙方：Party B:刘东来Liu Donglai签字：By:/s/ Liu Donglai秘密文件 Strictly Confidential有鉴于此，各方已自行或使得其各自授权代表于文首所载日期签署本独家购买权协议。IN WITNESS WHEREOF, the Parties have executed, or caused their respective duly authorized representatives to execute, this Exclusive Option Agreement as ofthe date first above written.丙方：北京中传视讯科技有限公司（盖章）Party B: Beijing Mobile Vision Technology Co., Ltd. (Seal)签字：By:/s/ Song Xuesong姓名：宋雪松Name:Song Xuesong职务：董事长Title:Chairman of the Board秘密文件 Strictly ConfidentialEX4.17 5 f20f2017ex417_luokung.htm EQUITY INTEREST PLEDGE AGREEMENT BY AND AMONG ZHONGCHUAN TIANXIA INFORMATION TECHNOLOGY(SHENZHEN) CO., LTD., XUESONG SONG, WEILI CHEN, PING WANG, DONGLAI LIU, AND BEIJING MOBILE VISION TECHNOLOGY CO., LTD., DATEDAUGUST 31, 2015Exhibit 4.17股权质押协议Equity Interest Pledge Agreement本股权质押协议（下称"本协议”）由下列各方于年月日在中华人民共和国（下称“中国”）北京签订：This Equity Interest Pledge Agreement (this "Agreement") has been executed by and among the following parties on in Beijing, the People’sRepublic of China (the “China” or “PRC”):甲方：中传天下信息科技（深圳）有限公司（下称“质权人”）Party A: Zhongchuan Tianxia Information Technology (Beijing) Co., Ltd. (“Pledgee”)地址：深圳市南山区高新中三道2号深圳软件园一期五栋401AAddress: 401A, Building 5, Phase 1, Shenzhen Software Park, No.2 Gaoxin Zhongsan Road, Nanshan District, Shenzhen统一社会信用代码： 91440300565701058RUniform Social Credit Code: 91440300565701058R乙方(下称“出质人”)：Party B ( “Pledgors”):a)宋雪松Song Xuesong身份证号码:ID Card No.:b)陈蔚力Chen Weili身份证号码:ID Card No.:1秘密文件 Strictly Confidentialc)王平Wang Ping身份证号码:ID Card No.:d)刘东来Liu Donglai身份证号码:ID Card No.:丙方：北京中传视讯科技有限公司Party C: Beijing Mobile Vision Technology Co., Ltd.地址：北京市朝阳区光华路9号SOHO3QLAB32Address: LAB32, SOHO3Q, No 9, Guanghua Road, Chaoyang District, Beijing统一社会信用代码：9111010576215249XMUniform Social Credit Code: 9111010576215249XM在本协议中，质权人、出质人和丙方以下各称“一方”，合称“各方”。In this Agreement, each of Pledgee, Pledgors and Party C shall be referred to as a "Party" respectively, and they shall be collectively referred to as the"Parties".鉴于：Whereas:1．出质人全部为中国境内居民自然人，共同持有丙方100%的股权。丙方是一家在中国注册成立的、主要从事手机视频技术研发、内容制作和产业化市场推广的有限责任公司。丙方有意在此确认出质人和质权人在本协议下的权利和义务并提供必要的协助登记该质权；All of the Pledgors are natural persons resided in PRC, and collectively hold 100% of the equity interest in Party C. Party C is a limited company registered inChina, mainly engaging in mobile video frequency technology research, development, content creation, sale and related industrialization promotion. Party Cacknowledges the respective rights and obligations of Pledgors and Pledgee under this Agreement, and intends to provide any necessary assistance inregistering the Pledge;2．质权人是一家在中国注册的外商独资企业。质权人与丙方于年月日签订了独家业务合作协议；Pledgee is a whollyforeignowned enterprise registered in China. Pledgee and Party C have executed an Exclusive Business Cooperation Agreement as of [*],[*];3．为了保证丙方全面履行独家业务合作协议项下的义务，出质人以其拥有的全部丙方股权向质权人做出质押担保。To ensure that Party C fully performs its obligations under the Exclusive Business Cooperation Agreement, Pledgors hereby pledge to the Pledgee all of theequity interests they hold in Party C.为了履行业务合作协议的条款，各方商定按照以下条款签订本协议。To perform the provisions of the Business Cooperation Agreement, the Parties have mutually agreed to execute this Agreement upon the following terms.2秘密文件 Strictly Confidential1.定义Definitions除非本协议另有规定，下列词语含义为：Unless otherwise provided herein, the terms below shall have the following meanings:1.1质权：指出质人根据本协议第2条给予质权人的担保物权，即指质权人所享有的，以出质人质押给质权人的股权折价或拍卖、变卖该股权的价款优先受偿的权利。Pledge: shall refer to the security interest granted by Pledgors to Pledgee pursuant to Article 2 of this Agreement, i.e., the right of Pledgee to becompensated on a preferential basis with the conversion, auction or sales price of the Equity Interest.1.2股权：指出质人现在和将来（通过增资和/或转股）合法持有的其在丙方的全部股权权益。Equity Interest: shall refer to all of the equity interest in Party C lawfully, held now and to be held (through capital increase and/or equity transfer)hereafter by Pledgors.1.3质押期限：指本协议第3条规定的期间。Term of Pledge: shall refer to the term set forth in Article 3 of this Agreement.1.4业务合作协议：指丙方与质权人于本协议日签订的独家业务合作协议。Business Cooperation Agreement: shall refer to the Exclusive Business Cooperation Agreement executed by and between Party C and Pledgee on thedate of this Agreement.1.5违约事件：指本协议第7条所列任何情况。Event of Default: shall refer to any of the circumstances set forth in Article 7 of this Agreement.1.6违约通知：指质权人根据本协议发出的宣布违约事件的通知。Notice of Default: shall refer to the notice issued by Pledgee in accordance with this Agreement declaring an Event of Default.3秘密文件 Strictly Confidential2.质权The Pledge作为丙方按时和全额支付业务合作协议项下质权人应得的任何或全部的款项，包括但不限于业务合作协议中规定的咨询和服务费的担保（无论该等费用的到期应付是由于到期日的到来、提前收款的要求或其它原因），以及丙方充分履行其在业务合作协议项下其他所有义务（丙方按时和全额支付业务合作协议项下甲方应得的任何或全部的款项及丙方在业务合作协议项下其他所有义务，以下统称为“被担保债务”）的担保，出质人特此将其现有或将拥有的丙方的全部股权权益质押给质权人。As collateral security for the timely and complete payment and performance when due (whether at stated maturity, by acceleration or otherwise) of any or all ofthe payments due (the “all payments in pledge”) by Party C, including without limitation the consulting and services fees payable to the Pledgee under theBusiness Cooperation Agreement, Pledgors hereby pledge to Pledgee a first security interest in all of Pledgors’ right, title and interest, whether now owned orhereafter acquired by Pledgors, in the Equity Interest of Party C.3.质押期限Term of Pledge3.1本质权自本协议项下的股权出质在相应的工商行政管理机关登记之日起生效，质权有效期持续到业务合作协议下所有丙方欠付质权人的款项结清为止。出质人和丙方应（一）自本协议签署之日起3个工作日内，将本协议的质权登记在丙方股东名册上，并（二）自本协议签署之日起10个工作日内向相应的工商行政管理机关申请登记本协议项下的质权。各方共同确认，为办理股权质押工商登记手续，各方及丙方其他股东应按照丙方所在地工商行政管理部门要求的形式签署、真实反映本协议项下质权信息的《股权质押合同》（以下简称“工商登记质押合同”）提交给工商管理机关，工商登记质押合同中未约定事项，仍以本协议约定为准。出质人和丙方应当按照中国法律法规和有关工商行政管理机关的各项要求，提交所有必要的文件并办理所有必要手续，保证质权在递交申请后尽快获得登记。如果出质人持有的丙方注册资本数额增加（不管是通过直接认缴丙方的增资还是从其他股东处受让股权），各方一致同意将采取一切必要的行动和签署一切必要的文件以按照登记机关的要求完成质权的变更登记，以确保本协议项下的质权的持续有效。The Pledge shall become effective on such date when the pledge of the Equity Interest contemplated herein has been registered’ with relevantadministration for industry and commerce (the “AIC”). The Pledge shall be continuously valid until all payments due under the Business CooperationAgreement have been fulfilled by Party C. Pledgors and Party C shall (1) register the Pledge in the shareholders' register of Party C within 3 businessdays following the execution of this Agreement, and (2) submit an application to the AIC for the registration of the Pledge of the Equity Interestcontemplated herein within 10 business days following the execution of this Agreement. The parties covenant that for the purpose of registration of thePledge, the parties hereto and all other shareholders of Party C shall submit to the AIC the Equity Interest Pledge Contract in the form required by theAIC at the location of Party C which shall truly reflect the information of the Pledge hereunder (the “AIC Pledge Contract”). For matters not specified inthe AIC Pledge Contract, the parties shall be bound by the provisions of this Agreement. Pledgors and Party C shall submit all necessary documentsand complete all necessary procedures, as required by the PRC laws and regulations and the relevant AIC, to ensure that the Pledge of the EquityInterest shall be registered with the AIC as soon as possible after filing. In the event that the amount of registered capital held by Pledgors is increased(either by subscribing increased registered capital from Party C or acquiring equity interest from other shareholders), the Parties hereto agree that theyshall take any necessary action and execute any necessary document to complete the registration of change of Pledge according to the requirement ofAIC so that the Pledge in this Agreement remains effective.4秘密文件 Strictly Confidential3.2质押期限内，如丙方未按业务合作协议交付咨询服务费等费用，质权人有权但无义务按本协议的规定处分质权。During the Term of Pledge, in the event Party C fails to pay the exclusive consulting or service fees in accordance with the Business CooperationAgreement, Pledgee shall have the right, but not the obligation, to dispose of the Pledge in accordance with the provisions of this Agreement.4.质权凭证的保管Custody of Records for Equity Interest subject to Pledge4.1在本协议规定的质押期限内，出质人应将其在丙方的股权出资证明书及记载质权的股东名册交付质权人保管。出质人应在本协议签订之日起一周内将上述股权出资证明书及股东名册交付给质权人。质权人将在本协议规定的全部质押期间一直保管这些项目。During the Term of Pledge set forth in this Agreement, Pledgors shall deliver to Pledgee's custody the capital contribution certificate for the EquityInterest and the shareholders' register containing the Pledge within one week from the execution of this Agreement. Pledgee shall have custody of suchitems during the entire Term of Pledge set forth in this Agreement.4.2在质押期限内，股权所产生的红利应当无条件归质权人所有。Dividends generated by the Equity Interest shall be unconditionally owned by the Pledgee during the Term of Pledge.5秘密文件 Strictly Confidential5.出质人的声明和保证Representations and Warranties of Pledgors5.1出质人是股权唯一的合法所有人。Pledgors are the sole legal and beneficial owners of the Equity Interest.5.2质权人有权以本协议规定的方式处分并转让股权。Pledgee shall have the right to dispose of and transfer the Equity Interest in accordance with the provisions set forth in this Agreement.5.3除本质权之外，出质人未在股权上设置任何其他质押权利或其他担保权益。Except for the Pledge, Pledgors have not placed any security interest or other encumbrance on the Equity Interest.6.出质人的承诺和确认Covenants and Further Agreements of Pledgors6.1在本协议存续期间，所有出质人向质权人承诺，出质人将：All of the Pledgors hereby covenant to the Pledgee, that during the term of this Agreement, Pledgors shall:6.1.1除履行由出质人与质权人、丙方于本协议签署日签订的《独家购买权合同》外，未经质权人事先书面同意，不得转让股权，不得在股权上设立或允许存在任何担保或其他债务负担；not transfer the Equity Interest, place or permit the existence of any security interest or other encumbrance on the Equity Interest, without theprior written consent of Pledgee, except for the performance of the Exclusive Option Agreement executed by Pledgors, the Pledgee and Party Con the execution date of this Agreement;6秘密文件 Strictly Confidential6.1.2遵守并执行所有有关权利质押的法律、法规的规定，在收到有关主管机关就质权发出或制定的通知、指令或建议时，于五日内向质权人出示上述通知、指令或建议，同时遵守上述通知、指令或建议，或按照质权人的合理要求或经质权人同意就上述事宜提出反对意见和陈述；comply with the provisions of all laws and regulations applicable to the pledge of rights, and within 5 days of receipt of any notice, order orrecommendation issued or prepared by relevant competent authorities regarding the Pledge, shall present the aforementioned notice, order orrecommendation to Pledgee, and shall comply with the aforementioned notice, order or recommendation or submit objections andrepresentations with respect to the aforementioned matters upon Pledgee's reasonable request or upon consent of Pledgee;6.1.3将任何可能导致对出质人股权或其任何部分的权利产生影响的事件或收到的通知，以及可能改变出质人在本协议中的任何保证、义务或对出质人履行其在本协议中义务可能产生影响的任何事件或收到的通知及时通知质权人。promptly notify Pledgee of any event or notice received by Pledgors that may have an impact on Pledgee's rights to the Equity Interest or anyportion thereof, as well as any event or notice received by Pledgors that may have an impact on any guarantees and other obligations ofPledgors arising out of this Agreement.6.2出质人同意，质权人按本协议条款取得的对质权享有的权利，不应受到出质人或出质人的继承人或出质人之委托人或任何其他人通过法律程序的中断或妨害。Pledgors agree that the rights acquired by Pledgee in accordance with this Agreement with respect to the Pledge shall not be interrupted or harmed byPledgors or any heirs or representatives of Pledgors or any other persons through any legal proceedings.7秘密文件 Strictly Confidential6.3出质人向质权人保证，为保护或完善本协议对偿付业务合作协议项下被担保债务的担保，出质人将诚实签署、并促使其他与质权有利害关系的当事人签署质权人所要求的所有的权利证书、契约和/或履行并促使其他有利害关系的当事人履行质权人所要求的行为，并为本协议赋予质权人之权利、授权的行使提供便利，与质权人或其指定的人(自然人/法人)签署所有的有关股权所有权的文件，并在合理期间内向质权人提供其认为需要的所有的有关质权的通知、命令及决定。To protect or perfect the security interest granted by this Agreement for payment of all payment in pledge under the Business Cooperation Agreement,Pledgors hereby undertake to execute in good faith and to cause other parties who have an interest in the Pledge to execute all certificates, agreements,deeds and/or covenants required by Pledgee. Pledgors also undertake to perform and to cause other parties who have an interest in the Pledge toperform actions required by Pledgee, to facilitate the exercise by Pledgee of its rights and authority granted thereto by this Agreement, and to enter intoall relevant documents regarding ownership of Equity Interest with Pledgee or designee(s) of Pledgee (natural persons/legal persons). Pledgorsundertake to provide Pledgee within a reasonable time with all notices, orders and decisions regarding the Pledge that are required by Pledgee.6.4出质人向质权人保证，出质人将遵守、履行本协议项下所有的保证、承诺、协议、陈述及条件。如出质人不履行或不完全履行其保证、承诺、协议、陈述及条件，出质人应赔偿质权人由此遭受的一切损失。Pledgors hereby undertake to comply with and perform all guarantees, promises, agreements, representations and conditions under this Agreement. Inthe event of failure the whole or partial performance of its guarantees, promises, agreements, representations and conditions, Pledgors shall indemnifyPledgee for all losses resulting therefrom.8秘密文件 Strictly Confidential7.违约事件Event of Default7.1下列事项均被视为违约事件：The following circumstances shall be deemed Event of Default:7.1.1丙方未能按期、完整履行任何业务合作协议项下责任，包括但不限于丙方未能按期足额支付业务合作协议项下的应付的被担保债务或有违反该协议其他义务的行为；Party C fails to fully and timely fulfill any liabilities under the Business Cooperation Agreement, including without limitation failure to pay infull any of the all payment in pledge payable under the Business Cooperation Agreement or breaches any other obligations of Party Cthereunder;7.1.2出质人或丙方实质违反本协议的任何条款；Pledgors or Party C have committed a material breach of any provisions of this Agreement;7.1.3除本协议第6.1.1条的约定外，出质人舍弃出质的股权或未获得质权人书面同意而擅自转让或意图转让出质的股权；和Except as expressly stipulated in Section 6.1.1, Pledgors transfers or purports to transfer or abandons the Equity Interest pledged or assignsthe Equity Interest pledged without the written consent of Pledgee; and7.1.4丙方的继承人或代管人只能履行部分或拒绝履行业务合作协议项下的支付责任。The successor or custodian of Party C is capable of only partially perform or refuses to perform the payment obligations under the BusinessCooperation Agreement.9秘密文件 Strictly Confidential7.2如知道或发现本第7.1条所述的任何事项或可能导致上述事项的事件已经发生，出质人应立即以书面形式通知质权人。Upon notice or discovery of the occurrence of any circumstances or event that may lead to the aforementioned circumstances described in Section 7.1,Pledgors shall immediately notify Pledgee in writing accordingly.7.3除非第7.1部分下的违约事件在质权人向出质人发出要求其修补此违约行为通知后的二十（20）天之内已经按质权人要求获得救济，质权人在其后的任何时间，可向出质人发出书面违约通知，要求依据第8部分履行其处理股权的权利。Unless an Event of Default set forth in this Section 7.1 has been successfully resolved to Pledgee's satisfaction within twenty (20) days after the Pledgeedelivers a notice to the Pledgors requesting ratification of such Event of Default, Pledgee may issue a Notice of Default to Pledgors in writing at any timethereafter, demanding the Pledgors to immediately dispose of the Pledge in accordance with the provisions of Article 8 of this Agreement.8.质权的行使Exercise of Pledge8.1在被担保债务被全部清偿或履行前，未经质权人书面同意，出质人不得转让本质权和其拥有的丙方股权。Prior to the full payment of all payments in pledge, without the Pledgee's written consent, Pledgors shall not assign the Pledge or the Equity Interest inParty C.8.2在质权人行使其质押权利时，质权人可以向出质人发出书面违约通知。Pledgee may issue a Notice of Default to Pledgors when exercising the Pledge.10秘密文件 Strictly Confidential8.3在质权人行使其质押权利时，根据中国有关法律的规定，质权人有权按照法定程序处置质押股权。仅在中国法律允许的范围内，对于处置的所得，质权人无需给付出质人；除非中国法律另有规定，出质人特此放弃其可能有的能向质权人要求任何质押股权处置所得的权利；同样，出质人对质权人在该质押股权处置后的亏损也不承担任何义务。When the Pledgor exercises the pledge right, Pledgee is entitled to dispose of the Equity Interest pledged in accordance with applicable PRC laws. Onlyto the extent permitted under applicable PRC laws, Pledgee has no obligation to account to Pledgors for proceeds of disposition of the Equity Interest.Unless otherwise required by PRC laws, Pledgors hereby waive any rights it may have to demand any such accounting from Pledgee; Likewise, in suchcircumstance Pledgors shall have no obligation to Pledgee for any deficiency remaining after such disposition of the Equity Interest pledged.8.4质权人依照本协议处分质权时，出质人和丙方应予以必要的协助，以使质权人实现其质权。When Pledgee disposes of the Pledge in accordance with this Agreement, Pledgors and Party C shall provide necessary assistance to enable Pledgee toenforce the Pledge in accordance with this Agreement.9.转让Assignment9.1除非经质权人事先同意，出质人无权赠予或转让其在本协议项下的权利义务。Without Pledgee's prior written consent, Pledgors shall not have the right to assign or delegate its rights and obligations under this Agreement.11秘密文件 Strictly Confidential9.2本协议对出质人及其继任人和经许可的受让人均有约束力，并且对质权人及每一继任人和受让人有效。This Agreement shall be binding on Pledgors and their successors and permitted assigns, and shall be valid with respect to Pledgee and each of itssuccessors and assigns.9.3经出质人同意，质权人可以在任何时候将其在业务合作协议项下的所有或任何权利和义务转让给其指定的关联方（自然人/法人），在这种情况下，受让人应享有和承担本协议项下质权人享有和承担的权利和义务，如同其作为原协议方应享有和承担的一样。质权人转让业务合作协议项下的权利和义务时，应质权人要求，出质人应就此转让签署有关协议和/或文件。Upon the Pledgors’ agreement, Pledgee may assign any or all of its rights and obligations under the Business Cooperation Agreement to its designee(s)(natural/legal persons) at any time, in which case the assigns shall have the rights and obligations of Pledgee under this Agreement, as if it were theoriginal party to this Agreement. When the Pledgee assigns the rights and obligations under the Business Cooperation Agreement, upon Pledgee'srequest, Pledgors shall execute relevant agreements or other documents relating to such assignment.9.4因转让所导致的质权人变更后，应质权人要求，出质人应与新的质权人签订一份内容与本协议一致的新质押协议，并在相应的工商行政管理机关进行登记。In the event of a change in Pledgee due to an assignment, Pledgors shall, at the request of Pledgee, execute a new pledge agreement with the newpledgee on the same terms and conditions as this Agreement, and register the same with the relevant AIC.12秘密文件 Strictly Confidential9.5出质人应严格遵守本协议和各方单独或共同签署的其他有关协议的规定，包括独家购买权合同和对质权人的授权委托书，履行各协议项下的义务，并不进行任何足以影响协议的有效性和可强制执行性的作为/不作为。除非根据质权人的书面指示，出质人不得行使其对质押股权还留存的权利。Pledgors shall strictly abide by the provisions of this Agreement and other contracts jointly or separately executed by the Parties hereto or any of them,including the Exclusive Option Agreement and the Power of Attorney granted to Pledgee, perform the obligations hereunder and thereunder, and refrainfrom any action/omission that may affect the effectiveness and enforceability thereof. Any remaining rights of Pledgors with respect to the EquityInterest pledged hereunder shall not be exercised by Pledgors except in accordance with the written instructions of Pledgee.10.终止Termination在被担保债务被全部清偿或履行完毕之后，本质权人应在尽早合理可行的时间内办理或配合办理解除质押的手续，出质人与丙方应提供相应的配合与协助。Upon the full payment of all payments in pledge under the Business Cooperation Agreement a, Pledgor shall then, with the assistance of Party B and Party C,go through the procedures of cancellation of pledge rights at a reasonable time as soon as practicable.11.手续费及其他费用Handling Fees and Other Expenses一切与本协议有关的费用及实际开支，其中包括但不限于法律费用、工本费、印花税以及任何其他税收、费用等全部由丙方承担。All fees and out of pocket expenses relating to this Agreement, including but not limited to legal costs, costs of production, stamp tax and any other taxes andfees, shall be borne by Party C.13秘密文件 Strictly Confidential12.保密责任Confidentiality各方承认及确定有关本协议、本协议内容，以及彼此就准备或履行本协议而交换的任何口头或书面资料均被视为保密信息。各方应当对所有该等保密信息予以保密，而在未得到另一方书面同意前，不得向任何第三者披露任何保密信息，惟下列信息除外：(a)公众人士知悉或将会知悉的任何信息（惟并非由接受保密信息之一方擅自向公众披露）；(b)根据适用法律法规、股票交易规则、或政府部门或法院的命令而所需披露之任何信息；或(c)由任何一方就本协议所述交易而需向其股东、投资者、法律或财务顾问披露之信息，而该股东、法律或财务顾问亦需遵守与本条款相类似之保密责任。如任何一方工作人员或聘请机构的泄密均视为该方的泄密，需依本协议承担违约责任。无论本协议以任何理由终止，本条款仍然生效。The Parties acknowledge that the existence and the terms of this Agreement and any oral or written information exchanged between the Parties in connectionwith the preparation and performance this Agreement are regarded as confidential information. Each Party shall maintain confidentiality of all such confidentialinformation, and without obtaining the written consent of the other Party, it shall not disclose any relevant confidential information to any third parties, exceptfor the information that: (a) is or will be in the public domain (other than through the receiving Party’s unauthorized disclosure); (b) is under the obligation tobe disclosed pursuant to the applicable laws or regulations, rules of any stock exchange, or orders of the court or other government authorities; or (c) isrequired to be disclosed by any Party to its shareholders, investors, legal counsels or financial advisors regarding the transaction contemplated hereunder,provided that such shareholders, investors, legal counsels or financial advisors shall be bound by the confidentiality obligations similar to those set forth inthis Section. Disclosure of any confidential information by the staff members or agencies hired by any Party shall be deemed disclosure of such confidentialinformation by such Party, which Party shall be held liable for breach of this Agreement. This Section shall survive the termination of this Agreement for anyreason.14秘密文件 Strictly Confidential13.适用法律和争议的解决Governing Law and Resolution of Disputes13.1本协议的订立、效力、解释、履行、修改和终止以及争议的解决均适用中国法律。The execution, effectiveness, construction, performance, amendment and termination of this Agreement and the resolution of disputes hereunder shallbe governed by the laws of China.13.2因解释和履行本协议而发生的任何争议，本协议各方应首先通过友好协商的方式加以解决。如果在一方向其他方发出要求协商解决的书面通知后30天之内争议仍然得不到解决，则任何一方均可将有关争议提交给中国国际经济贸易仲裁委员会，由该会按照其仲裁规则仲裁解决。仲裁应在北京进行，使用之语言为中文。仲裁裁决是终局性的，对各方均有约束力。In the event of any dispute with respect to the construction and performance of this Agreement, the Parties shall first resolve the dispute throughfriendly negotiations. In the event the Parties fail to reach an agreement on the dispute within 30 days after either Party's request to the other Parties forresolution of the dispute through negotiations, either Party may submit the relevant dispute to the China International Economic and Trade ArbitrationCommission for arbitration, in accordance with its Arbitration Rules. The arbitration shall be conducted in Beijing, and the language used in arbitrationshall be Chinese. The arbitration award shall be final and binding on all Parties.13.3因解释和履行本协议而发生任何争议或任何争议正在进行仲裁时，除争议的事项外，本协议各方仍应继续行使各自在本协议项下的其他权利并履行各自在本协议项下的其他义务。Upon the occurrence of any disputes arising from the construction and performance of this Agreement or during the pending arbitration of any dispute,except for the matters under dispute, the Parties to this Agreement shall continue to exercise their respective rights under this Agreement and performtheir respective obligations under this Agreement.15秘密文件 Strictly Confidential14.通知Notices14.1本协议项下要求或发出的所有通知和其他通信应通过专人递送、挂号邮寄、邮资预付或商业快递服务或传真的方式发到该方下列地址。每一通知还应再以电子邮件送达。该等通知视为有效送达的日期按如下方式确定：All notices and other communications required or permitted to be given pursuant to this Agreement shall be delivered personally or sent by registeredmail, postage prepaid, by a commercial courier service or by facsimile transmission to the address of such party set forth below. A confirmation copy ofeach notice shall also be sent by Email. The dates on which notices shall be deemed to have been effectively given shall be determined as follows:14.1.1通知如果是以专人递送、快递服务或挂号邮寄、邮资预付发出的，则以于设定为通知的地址在接收或拒收之日为有效送达日。Notices given by personal delivery, by courier service or by registered mail, postage prepaid, shall be deemed effectively given on the date ofreceipt or refusal at the address specified for notices.14.1.2通知如果是以传真发出的，则以成功传送之日为有效送达日（应以自动生成的传送确认信息为证）。Notices given by facsimile transmission shall be deemed effectively given on the date of successful transmission (as evidenced by anautomatically generated confirmation of transmission).16秘密文件 Strictly Confidential14.2为通知的目的，各方地址如下：For the purpose of notices, the addresses of the Parties are as follows:甲方：中传天下信息科技（深圳）有限公司Party A: Zhongchuan Tianxia Information Technology (Shenzhen) Co., Ltd.地址：深圳市南山区高新中三道2号深圳软件园一期五栋401AAddress: 401A, Building 5, Phase 1, Shenzhen Software Park, No.2 Gaoxin Zhongsan Road, Nanshan District, Shenzhen.收件人：洪婷Attn: Hong Ting乙方：Party B:a)宋雪松Song Xuesong地址：125.Expenses, including legal fees, incurred by a director in defending any legal, administrative or investigative proceedings may be paid by the Company inadvance of the final disposition of such proceedings upon receipt of an undertaking by or on behalf of the director to repay the amount if it shall ultimatelybe determined that the director is not entitled to be indemnified by the Company in accordance with these Articles.126.Expenses, including legal fees, incurred by a former director in defending any legal, administrative or investigative proceedings may be paid by theCompany in advance of the final disposition of such proceedings upon receipt of an undertaking by or on behalf of the former director to repay the amountif it shall ultimately be determined that the director is not entitled to be indemnified by the Company in accordance with these Articles.127.The indemnification and advancement of expenses provided by, or granted pursuant to, these Articles is not exclusive of any other rights to which theperson seeking indemnification of advancement of expenses may be entitled under any agreement, resolution of members, resolution of disinteresteddirectors or otherwise, both as to acting in the person’s official capacity and as to acting in another capacity while serving as a director of the Company.128.If a person to be indemnified has been successful in defence of any proceedings referred to above the person is entitled to be indemnified against allexpenses, including legal fees, and against all judgments, fines and amounts paid in settlement and reasonably incurred by the person in connection withthe proceedings.129.The Company may purchase and maintain insurance in relation to any person who is or was a director, an officer or a liquidator of the Company, or who atthe request of the Company is or was serving as a director, an officer or a liquidator of, or in any other capacity is or was acting for, another body corporateor a partnership, joint venture, trust or other enterprise, against any liability asserted against the person and incurred by the person in that capacity,whether or not the Company has or would have had the power to indemnify the person against the liability as provided in these Articles.SEAL130.The Company shall have a Seal and may have more than one Seal. References herein to the Seal shall be references to every Seal which shall have beenduly adopted by resolution of directors. The directors shall provide for the safe custody of the Seal and for an imprint thereof to be kept at the office of theregistered agent of the Company. Except as otherwise expressly provided herein, the Seal when affixed to any written instrument, shall be witnessed andattested to by the signature of a director or any other person so authorized from time to time by resolution of directors. Such authorization may be before orafter the Seal is affixed, may be general or specific and may refer to any number of sealings. The Directors may provide for a facsimile of the Seal and of thesignature of any director or authorized person which may be reproduced by printing or other means on any instrument and it shall have the same force andvalidity as if the Seal had been affixed to such instrument and the same had been signed as hereinbefore described.21DISTRIBUTIONS131.The directors of the Company may by resolution authorise a distribution by the Company at any time and of any amount and to any members they think fitif they are satisfied on reasonable grounds that immediately after the distribution;a.the value of the Company’s assets will exceed its liabilities, andb.the Company will be able to pay its debts as they fall due.132.A resolution of the directors passed under the preceding Article shall contain a statement that, in the opinion of the directors, immediately after thedistribution the value of the Company’s assets will exceed its liabilities, and the Company will be able to pay its debts as they fall due.133.If, after a distribution is authorised and before it is made, the directors cease to be satisfied on reasonable grounds that the Company will, immediately afterthe distribution satisfy the solvency test, any distribution made by the Company is deemed not to have been authorised.134.If, by virtue of the preceding Article, a distribution is deemed not to have been authorised, a director who;a.ceased, after authorisation but before the making of the distribution, to be satisfied on reasonable grounds for believing that the company wouldsatisfy the solvency test immediately after the distribution is made; andb.failed to take reasonable steps to prevent the distribution being made;is personally liable to the company to repay to the company so much of the distribution as is not able to be recovered from members.135.A distribution made to a member at a time when the company did not, immediately after the distribution, satisfy the solvency test may be recovered by thecompany from the member unless;a.the member received the distribution in good faith and without knowledge of the company’s failure to satisfy the solvency test;b.the member has altered his position in reliance on the validity of the distribution; andc.it would be unfair to require repayment in full or at all.DISTRIBUTIONS BY WAY OF DIVIDEND136.The Company may by a resolution of directors declare a distribution by way of dividend and pay such distribution in money, shares or other property. Inthe event that distributions by way of dividend are paid in specie the directors shall have responsibility for establishing and recording in the resolution ofdirectors authorizing the distribution by way of dividend, a fair and proper value for the assets to be so distributed.137.The directors may from time to time pay to the members such interim distributions by way of dividend as appear to the directors to be justified by theprofits of the Company.138.The directors may, before declaring any distribution by way of dividend, set aside out of the profits of the Company such sum as they think proper as areserve fund, and may invest the sum so set aside as a reserve fund upon such securities as they may select.139.Notice of any distribution by way of dividend that may have been declared shall be given to each member in the manner hereinafter mentioned and alldistributions by way of dividend unclaimed for 3 years after having been declared may be forfeited by resolution of directors for the benefit of theCompany.140.No distribution by way of dividend shall bear interest as against the Company and no distribution by way of dividend shall be paid on treasury shares orshares held by another company of which the Company holds, directly or indirectly, shares having more than 50 percent of the vote in electing directors.22141.A share issued as a distribution by way of dividend by the Company shall be treated for all purposes as having been issued for money equal to the valuedetermined by resolution of the directors. In the absence of fraud the decision of the directors as to the value of the share is conclusive unless a questionof law is involved.142.A division of the issued and outstanding shares of a class or series of shares into a larger number of shares of the same class or series having aproportionately smaller par value does not constitute a distribution by way of dividend of shares.ACCOUNTS AND AUDIT143.The Company may by resolution of members call for the directors to prepare periodically a profit and loss account and a balance sheet. The profit and lossaccount and balance sheet shall be drawn up so as to give respectively a true and fair view of the profit and loss of the Company for the financial periodand a true and fair view of the state of affairs of the Company as at the end of the financial period.144.The Company may by resolution of members call for the accounts to be examined by auditors.145.Subject to the rules of the Designated Stock Exchange, the first auditors shall be appointed by resolution of directors; subsequent auditors shall beappointed by the Audit Committee and shall hold office until the Audit Committee appoint another independent auditor.146.Subject to the rules of the Designated Stock Exchange, the remuneration of the auditors of the Company shall be fixed by the Audit Committee.147.The auditors shall examine each profit and loss account and balance sheet required to be served on every member of the Company or laid before a meetingof the members of the Company and shall state in a written report whether or nota.in their opinion the profit and loss account and balance sheet give a true and fair view respectively of the profit and loss for the period covered bythe accounts, and of the state of affairs of the Company at the end of that period; andb.all the information and explanations required by the auditors have been obtained.148.The report of the auditors shall be annexed to the accounts and shall be read at the meeting of members at which the accounts are laid before the Companyor shall be served on the members.149.Every auditor of the Company shall have a right of access at all times to the books of account and vouchers of the Company, and shall be entitled to requirefrom the directors and officers of the Company such information and explanations as he thinks necessary for the performance of the duties of the auditors.150.The auditors of the Company shall be entitled to receive notice of, and to attend any meetings of members of the Company at which the Company’s profitand loss account and balance sheet are to be presented.NOTICES151.Any notice, information or written statement to be given by the Company to members may be served in any way by which it can reasonably be expected toreach each member or by mail addressed to each member at the address shown in the share register.152.Any summons, notice, order, document, process, information or written statement to be served on the Company may be served by leaving it, or by sendingit by registered mail addressed to the Company, at its registered office, or by leaving it with, or by sending it by registered mail to, the registered agent ofthe Company.153.Service of any summons, notice, order, document, process, information or written statement to be served on the Company may be proved by showing thatthe summons, notice, order, document, process, information or written statement was delivered to the registered office or the registered agent of theCompany or that it was mailed in such time as to admit to its being delivered to the registered office or the registered agent of the Company in the normalcourse of delivery within the period prescribed for service and was correctly addressed and the postage was prepaid.23PENSION AND SUPERANNUATION FUNDS154.The directors may establish and maintain or procure the establishment and maintenance of any noncontributory or contributory pension orsuperannuation funds for the benefit of, and give or procure the giving of donations, gratuities, pensions, allowances or emoluments to, any persons whoare or were at any time in the employment or service of the Company or any company which is a subsidiary of the Company or is allied to or associated withthe Company or with any such subsidiary, or who are or were at any time directors or officers of the Company or of any such other company as aforesaid orwho hold or held any salaried employment or office in the Company or such other company, or any persons in whose welfare the Company or any suchother company as aforesaid is or has been at any time interested, and to the wives, widows, families and dependents of any such person, and may makepayments for or towards the insurance of any such persons as aforesaid, and may do any of the matters aforesaid either alone or in conjunction with anysuch other company as aforesaid. Subject always to the proposal being approved by resolution of members, a director holding any such employment oroffice shall be entitled to participate in and retain for his own benefit any such donation, gratuity, pension allowance or emolument.VOLUNTARY WINDING UP AND DISSOLUTION155.The Company may voluntarily commence to wind up and dissolve by a resolution of members but if the Company has never issued shares it mayvoluntarily commence to wind up and dissolve by resolution of directors.CONTINUATION156.The Company may by resolution of members or by a resolution passed unanimously by all directors of the Company continue as a company incorporatedunder the laws of a jurisdiction outside the British Virgin Islands in the manner provided under those laws.ARBITRATION157.Whenever any difference arises between the Company on the one hand and any of the members or their executors, administrators or assigns on the otherhand, touching the true intent and construction or the incidence or consequences of these Articles or of the Act, touching anything done or executed,omitted or suffered in pursuance of the Act or touching any breach or alleged breach or otherwise relating to the premises or to these Articles, or to anyAct or Ordinance affecting the Company or to any of the affairs of the Company such difference shall, unless the parties agree to refer the same to a singlearbitrator, be referred to 2 arbitrators one to be chosen by each of the parties to the difference and the arbitrators shall before entering on the referenceappoint an umpire.158.If either party to the reference makes default in appointing an arbitrator either originally or by way of substitution (in the event that an appointed arbitratorshall die, be incapable of acting or refuse to act) for 10 days after the other party has given him notice to appoint the same, such other party may appoint anarbitrator to act in the place of the arbitrator of the defaulting party.We, Portcullis TrustNet (BVI) Limited of Portcullis TrustNet Chambers, P.O. Box 3444, Road Town, Tortola, British Virgin Islands for the purpose of incorporating aBVI Business Company under the laws of the British Virgin Islands hereby sign these Articles of Association the 27th day of October, 2009.Incorporator/s/ Nicole WheatleyPortcullis TrustNet (BVI) LimitedPortcullis TrustNet ChambersP.O. Box 3444Road Town, TortolaBritish Virgin Islands(Sgd. Nicole Wheatley)24EX4.15 3 f20f2017ex415_luokung.htm EXCLUSIVE BUSINESS COOPERATION AGREEMENT BY AND BETWEEN ZHONGCHUAN TIANXIA INFORMATIONTECHNOLOGY (SHENZHEN) CO., LTD., AND BEIJING MOBILE VISION TECHNOLOGY CO., LTD., DATED AUGUST 31, 2015Exhibit 4.15独家业务合作协议Exclusive Business Cooperation Agreement本独家业务合作协议（下称“本协议”）由以下双方于年月日在中华人民共和国（下称“中国”）北京市签署。This Exclusive Business Cooperation Agreement (this “Agreement”) is made and entered into by and between the following parties on in Beijing, thePeople’s Republic of China (“China” or the “PRC”).甲方：中传天下信息科技（深圳）有限公司Party A: Zhongchuan Tianxia Information Technology (Shenzhen) Co., Ltd.地址：深圳市南山区高新中三道2号深圳软件园一期五栋401A Address: 401A, Building 5, Phase 1, Shenzhen Software Park, No.2 Gaoxin Zhongsan Road, Nanshan District, Shenzhen统一社会信用代码：91440300565701058R Uniform Social Credit Code: 91440300565701058R乙方：北京中传视讯科技有限公司Party B: Beijing Mobile Vision Technology Co., Ltd.地址：北京市朝阳区光华路9号SOHO3QLAB32Address: LAB32, SOHO3Q, No 9, Guanghua Road, Chaoyang District, Beijing统一社会信用代码：9111010576215249XMUniform Social Credit Code: 9111010576215249XM甲方和乙方以下各称为“一方”，统称为“双方”。Each of Party A and Party B shall be hereinafter referred to as a “Party” respectively, and as “Parties” collectively.1秘密文件Strictly Confidential鉴于：Whereas,1.甲方是一家在中国注册的外商独资企业，拥有丰富的技术研发和产业化推广相关的管理和投资经验，并提供相关的技术支持和咨询服务；Party A is a whollyforeignowned enterprise established in China, which has rich experience in technology research development and industrializationpromotion management and investment, and provides relevant technical support and consulting services;2.乙方是一家在中国成立的有限责任公司，经中国有关政府部门批准依法主要从事手机视频技术开发、内容制作及市场推广；Party B is a limited company in China, mainly engages in mobile video technology research, development, content creation, sale and related industrialpromotion as approved by the relevant governmental authorities in China;3.甲方同意利用其技术、人员和信息优势，在本协议期间向乙方提供有关手机视频技术开发、内容制作及市场推广以及未来扩大业务规模和业务范围时乙方所需的技术支持、技术咨询等相关服务，乙方同意接受甲方或其指定方按本协议条款的规定提供的各种服务。Party A is willing to provide Party B with technology supports and technology consulting services in connection with mobile video technology research,development, content creation, sale and related industrial promotion and such services in connection with Party B’s extension of business scale orbroadening of businesses during the term of this Agreement, utilizing its advantages in technology, human resources, and information, and Party B iswilling to accept such services provided by Party A or Party A's designee(s), each on the terms set forth herein.2秘密文件Strictly Confidential据此，甲方和乙方经协商一致，达成如下协议：Now, therefore, through mutual discussion, the Parties have reached the following agreements:1.服务提供Services Provided by Party A1.1按照本协议条款和条件，乙方在此委任甲方在本协议期间作为乙方的独家服务提供者向乙方提供全面的和手机视频技术开发、内容制作及市场推广相关以及未来扩大业务规模和业务范围时乙方所需的技术支持、业务支持和相关咨询服务，具体内容包括但不限于以下内容：Party B hereby appoints Party A as Party B's exclusive services provider to provide Party B with complete technical support, business supportand related consulting services in connection with mobile video technology research, development, content creation, sale and related industrialpromotion and such services in connection with Party B’s extension of business scale or broadening of businesses during the term of thisAgreement, in accordance with the terms and conditions of this Agreement, which may include but not limited to:1.1.1为乙方提供其手机视频技术开发、内容制作及市场推广业务所需的一切服务支持，为乙方提供相当于包括总经理、行政人员、管理人员、筹划部门、商业运营、人力资源、财务、会计以及与乙方业务相关的一切业务操作所需人员所能提供的服务内容；managing all aspects of Party B’s business of mobile video technology research, development, content creation, sale and relatedindustrial promotion. In this capacity, Party A will procure or engage for Party B the services of a general manager and other managementstaff, including but not limited to personnel responsible for all administration, operations, planning, business development, humanresources, finance, accounting and other operations related to the Business of Party B;3秘密文件Strictly Confidential1.1.2为乙方制定全部的商业计划、销售目标，并为优化执行该等商业计划设计和建立相应的系统及操作程序；developing all business plans and sales projections of Party B, and for developing and establishing systems and procedures for optimumexecution of the business plans;1.1.3为乙方申请手机视频技术及内容制作相关专利提供咨询服务和支持；consulting services and support in connection with Party B’s applying for mobile video technology related patents and content creation;1.1.4为乙方手机视频技术产业化的发展方向、规模、品牌提升提供咨询服务；consulting services in connection with the development directions, size and business brands promotion of Party B’s mobile videotechnology industrialization;4秘密文件Strictly Confidential1.1.5为乙方提供与业务相关的办公、生产和销售服务，为乙方租赁场所，建立业务相关的系统和程序，满足乙方的其他要求；procuring or obtaining for Party B all office, production and distribution services related to the Business. It shall procure or obtainappropriate leases, establish systems and procedures needed to operate the business, fulfill orders for services;1.1.6尽最大努力为乙方建立手机视频技术销售市场，根据甲方为乙方制定的商业计划及销售目标代表乙方获取客户订单，同时为乙方提供与业务相关的客户服务，建立向客户开具票据的程序和与会计相关的托收服务。using its best efforts to establish mobile video technology related marketing and other structures to obtain orders for services &products from customers on behalf of Party B in accordance with Party B’s business plans, sales projections and objectives (asdeveloped by Party A) and procure or obtain customer services required in connection with the Business. It shall also establishprocedures for invoicing customers, and establish collection services with respect to accounts;1.1.7就乙方的劳动用工方面提供咨询服务和支持，包括但不限于，组织实施对乙方业务人员、行政人员、管理人员等人员进行培训和考核，协助建立健全的人力资源管理制度和实现人力资源的良好配置；consulting services and support regarding labor system of Party B, including but without limitation to labor training and evaluation ofsales person, administrative staff and management person etc. and establishment of human resources management system to well;5秘密文件Strictly Confidential1.1.8提供乙方需要的客户数据统计、分析及相关数据库的建设和维护等咨询服务；providing Party B with compile and analysis of client data and consulting services of establishment and maintenance of data base;1.1.9提供乙方需要的软件和相关技术支持服务；providing software Party B requires and other technical support;1.1.10接受乙方委托，对乙方的手机视频技术研发和产业化推广业务经营进行指导和管理；guiding and management on Party B’s business of mobile video technology research and development and related industrial promotionoperation according to Party B’s commission;1.1.11当乙方业务规模发展或业务范围扩大需要时，购买乙方业务经营需要的设备；in the event of the demand of Party B’s development of business scale or broadening of businesses, purchase the equipments which itneeds for the operation of its business;1.1.12当乙方业务规模发展或业务范围扩大需要时，完成乙方项目中的全部或部分工作；in the event of the demand of Party B’s development of business scale or broadening of businesses, complete the work of Party B’sproject in whole or in party;6秘密文件Strictly Confidential1.1.13当乙方业务规模发展或业务范围扩大需要时，开发新技术；in the event of the demand of Party B’s development of business scale or broadening of businesses, develop new technology;1.1.14乙方委托甲方，且甲方接受委托提供的其他服务。other services Party B appoints Party A to provide and Party A agrees to provide.1.2乙方接受甲方的咨询和服务。乙方进一步同意，除非经甲方事先书面同意，在本协议期间，就本协议约定的服务或其他事宜，乙方不得直接或间接地从任何第三方获得任何与本协议相同或类似的咨询和/或服务，并不得与任何第三方就本协议所述事项建立任何类似的合作关系。双方同意，甲方可以指定其他方（该被指定方可以与乙方签署本协议第1.3条描述的某些协议）为乙方提供本协议约定的服务和/或支持。Party B agrees to accept all the consultations and services provided by Party A. Party B further agrees that unless with Party A's prior writtenconsent, during the term of this Agreement, Party B shall not directly or indirectly accept the same or any similar consultations and/or servicesprovided by any third party and shall not establish similar corporation relationship with any third party regarding the matters contemplated by thisAgreement. Party A may appoint other parties, who may enter into certain agreements described in Section 1.3 with Party B, to provide Party Bwith the consultations and/or services under this Agreement.7秘密文件Strictly Confidential1.3服务的提供方式Service Providing Methodology1.3.1双方同意在本协议有效期内，视情况而定，乙方可以与甲方或甲方指定的其他方进一步签订技术服务协议和/或咨询服务协议，对各项业务培训、技术服务、咨询服务的具体内容、方式、人员、收费等进行约定。Parties agree that during the term of this Agreement, where necessary, Party B may enter into further technical service agreements and/orconsulting service agreements with Party A or any other party designated by Party A, which shall provide the specific contents, manner,personnel, and fees for the specific technical services and consulting services.1.3.2为更好地履行本协议，双方同意，在甲方认为必要时，乙方应在本协议有效期内与甲方或甲方指定的其他方根据业务进展需要随时签署协议，由甲方或其指定方向乙方提供服务。To fulfill this Agreement, Parties agree that during the term of this Agreement, where Party A deems necessary, Party B shall enter intoagreements with Party A or any other party designated by Party A which shall set forth that Party A or any other party designated byParty A provide services to Party B based on the needs of the business of Party B.8秘密文件Strictly Confidential2.服务的价格和支付方式The Calculation and Payment of the Service Fees双方同意，就甲方提供的服务，乙方应向甲方支付服务费（“服务费”）。服务费不应低于乙方税后利润的80%。服务费应当按季支付；经甲方事先书面同意，服务费可以根据乙方的经营需要进行调整。Both Parties agree that, in consideration of the services provided by Party A, Party B shall pay Party A fees (the “Service Fees”), which shall not be lessthan 80% of Party B’s aftertax profits . The Service Fees shall be due and payable on a quarterly basis; upon the prior written consent by Party A, the rateof Service Fees may be adjusted pursuant to the operational needs of Party B.3.知识产权和保密条款Intellectual Property Rights and Confidentiality Clauses3.1在中国法律允许的范围内，甲方对履行本协议而产生或创造的任何权利、所有权、权益和所有知识产权包括但不限于著作权、专利权、专利申请权、软件、技术秘密、商业机密及其他均享有独占的和排他的权利和利益。乙方须签署所有适当的文件，采取所有适当的行动，递交所有的文件和/或申请，提供所有适当的协助，以及做出所有其他依据甲方的自行决定认为是必要的行为，以将任何对该等知识产权的所有权、权利和权益赋予甲方，和/或完善对甲方此等知识产权权利的保护。To the extent permitted under the PRC laws, Party A shall have exclusive and proprietary rights and interests in all rights, ownership, interests andintellectual properties arising out of or created during the performance of this Agreement, including but not limited to copyrights, patents, patentapplications, software, technical secrets, trade secrets and others. Party B shall execute all appropriate documents, take all appropriate actions,submit all filings and/or applications, render all appropriate assistance and otherwise conduct whatever is necessary deemed as by Party A in itssole discretion for the purposes of vesting any ownership, right or interest of any such intellectual property rights in Party A, and/or perfectingthe protections for any such intellectual property rights in Party A.9秘密文件Strictly Confidential3.2双方承认及确定有关本协议、本协议内容，以及彼此就准备或履行本协议而交换的任何口头或书面资料均被视为保密信息。双方应当对所有该等保密信息予以保密，而在未得到另一方书面同意前，不得向任何第三者披露任何保密信息，惟下列信息除外：(a)公众人士知悉或将会知悉的任何信息（惟并非由接受保密信息之一方擅自向公众披露）；(b)根据适用法律法规、股票交易规则、或政府部门或法院的命令而所需披露之任何信息；或(c)由任何一方就本协议所述交易而需向其股东、投资者、法律或财务顾问披露之信息，而该股东、法律或财务顾问亦需遵守与本条款相类似之保密责任。如任何一方工作人员或聘请机构的泄密均视为该方的泄密，需依本协议承担违约责任。无论本协议以任何理由终止，本条款仍然生效。The Parties acknowledge that the existence and the terms of this Agreement and any oral or written information exchanged between the Parties inconnection with the preparation and performance this Agreement are regarded as confidential information. Each Party shall maintainconfidentiality of all such confidential information, and without obtaining the written consent of the other Party, it shall not disclose any relevantconfidential information to any third parties, except for the information that: (a) is or will be in the public domain (other than through the receivingParty’s unauthorized disclosure); (b) is under the obligation to be disclosed pursuant to the applicable laws or regulations, rules of any stockexchange, or orders of the court or other government authorities; or (c) is required to be disclosed by any Party to its shareholders, investors,legal counsels or financial advisors regarding the transaction contemplated hereunder, provided that such shareholders, investors, legal counselsor financial advisors shall be bound by the confidentiality obligations similar to those set forth in this Section. Disclosure of any confidentialinformation by the staff members or agencies hired by any Party shall be deemed disclosure of such confidential information by such Party, whichParty shall be held liable for breach of this Agreement. This Section shall survive the termination of this Agreement for any reason.3.3双方同意，不论本协议是否变更、解除或终止，本条款将持续有效。The Parties agree that this Section shall survive changes to, and rescission or termination of, this Agreement.4.陈述和保证Representations and Warranties4.1甲方陈述和保证如下：Party A hereby represents and warrants as follows:4.1.1甲方是按照中国法律合法注册并有效存续的外商独资企业。Party A is a whollyforeignowned enterprise legally registered and validly existing in accordance with the laws of China.10秘密文件Strictly Confidential4.1.2甲方已采取必要的公司行为，获得必要的授权，并取得第三方和政府部门的同意及批准（若需）以签署和履行本协议；甲方对本协议的签署和履行并不违反法律法规的明确规定。Party A has taken all necessary corporate actions, obtained all necessary authorization and the consent and approval from third partiesand government agencies (if any) for the execution and performance of this Agreement. Party A’s execution and performance of thisAgreement do not violate any explicit requirements under any law or regulation binding on Party A.4.1.3本协议构成对其合法、有效、有约束力并依本协议之条款对其强制执行的义务。This Agreement constitutes Party A's legal, valid and binding obligations, enforceable in accordance with its terms.4.2乙方陈述和保证如下：Party B hereby represents and warrants as follows:4.2.1乙方是按照中国法律合法登记且有效存续的有限责任公司，乙方根据政府部门的批准和许可从事手机视频技术开发、内容制作和产业化市场推广的经营。Party B is a limited company legally registered and validly existing in accordance with the laws of China, engages in mobile videotechnology research, development, content creation, sale and related industrial promotion pursuant to governmental approvals andpermits;11秘密文件Strictly Confidential4.2.2乙方已采取必要的行为，获得必要的授权，并取得第三方和政府部门的同意及批准（若需）以签署和履行本协议；乙方对本协议的签署和履行并不违反法律法规的明确规定。Party B has taken all necessary actions, obtained all necessary authorization and the consent and approval from third parties andgovernment agencies (if any) for the execution and performance of this Agreement. Party B’s execution and performance of thisAgreement do not violate any explicit requirements under any law or regulation binding on Party B.4.2.3本协议构成对其合法、有效、有约束力并依本协议之条款对其强制执行的义务。This Agreement constitutes Party B's legal, valid and binding obligations, and shall be enforceable against it.5.生效和有效期Effectiveness and Term5.1本协议于文首标明的协议日期签署并同时生效。除非依本协议或双方其他协议的约定而提前终止，本协议有效期为20年，但甲、乙双方应自本协议签署后，每3个月对本协议的内容做一次审查，以决定是否需要根据当时的情况对本协议作出相应修改和补充。This Agreement is executed on the date first above written and shall take effect as of such date. Unless earlier terminated in accordance with theprovisions of this Agreement or relevant agreements separately executed between the Parties, the term of this Agreement shall be 20 years. Afterthe execution of this Agreement, both Parties shall review this Agreement every 3 months to determine whether to amend or supplement theprovisions in this Agreement based on the actual circumstances at that time.12秘密文件Strictly Confidential5.2协议期满前，经甲方书面确认，本协议可以延期。延期的期限由甲方决定，乙方必须无条件地同意该延期。The term of this Agreement may be extended if confirmed in writing by Party A prior to the expiration thereof. The extended term shall bedetermined by Party A, and Party B shall accept such extended term unconditionally.6.终止Termination6.1除非依据本协议续期，本协议于到期之日终止。Unless renewed in accordance with the relevant terms of this Agreement, this Agreement shall be terminated upon the date of expiration hereof.6.2本协议有效期内，除非甲方对乙方有重大过失或存在欺诈行为，乙方不得提前终止本协议。尽管如此，甲方可在任何时候通过提前30天向乙方发出书面通知的方式终止本协议。During the term of this Agreement, unless Party A commits gross negligence, or a fraudulent act, against Party B, Party B shall not terminate thisAgreement prior to its expiration date. Nevertheless, Party A shall have the right to terminate this Agreement upon giving 30 days' prior writtennotice to Party B at any time.6.3在本协议终止之后，双方在第3、7和8条项下的权利和义务将继续有效。The rights and obligations of the Parties under Articles 3, 7 and 8 shall survive the termination of this Agreement.13秘密文件Strictly Confidential7.适用法律和争议解决Governing Law and Resolution of Disputes7.1本协议的订立、效力、解释、履行、修改和终止以及争议的解决适用中国的法律。The execution, effectiveness, construction, performance, amendment and termination of this Agreement and the resolution of disputes hereundershall be governed by the laws of China.7.2因解释和履行本协议而发生的任何争议，本协议双方应首先通过友好协商的方式加以解决。如果在一方向其他方发出要求协商解决的书面通知后30天之内争议仍然得不到解决，则任何一方均可将有关争议提交给中国国际经济贸易仲裁委员会，由该会按照其仲裁规则仲裁解决。仲裁应在北京进行，使用之语言为中文。仲裁裁决是终局性的，对各方均有约束力。In the event of any dispute with respect to the construction and performance of this Agreement, the Parties shall first resolve the dispute throughfriendly negotiations. In the event the Parties fail to reach an agreement on the dispute within 30 days after either Party's request to the otherParties for resolution of the dispute through negotiations, either Party may submit the relevant dispute to the China International Economic andTrade Arbitration Commission for arbitration, in accordance with its Arbitration Rules. The arbitration shall be conducted in Beijing, and thelanguage used in arbitration shall be Chinese. The arbitration award shall be final and binding on all Parties.14秘密文件Strictly Confidential7.3因解释和履行本协议而发生任何争议或任何争议正在进行仲裁时，除争议的事项外，本协议双方仍应继续行使各自在本协议项下的其他权利并履行各自在本协议项下的其他义务。Upon the occurrence of any disputes arising from the construction and performance of this Agreement or during the pending arbitration of anydispute, except for the matters under dispute, the Parties to this Agreement shall continue to exercise their respective rights under this Agreementand perform their respective obligations under this Agreement.8.补偿Indemnification就甲方根据本协议向乙方提供的咨询和服务内容所产生或引起的针对甲方的诉讼、请求或其他要求而招致的任何损失、损害、责任或费用都应由乙方补偿给甲方，以使甲方不受损害，除非该损失、损害、责任或费用是因甲方的重大过失或故意而产生的。Party B shall indemnify and hold harmless Party A from any losses, injuries, obligations or expenses caused by any lawsuit, claims or other demandsagainst Party A arising from or caused by the consultations and services provided by Party A to Party B pursuant this Agreement, except where suchlosses, injuries, obligations or expenses arise from the gross negligence or willful misconduct of Party A.15秘密文件Strictly Confidential9.通知Notices9.1本协议项下要求或发出的所有通知和其他通信应通过专人递送、挂号邮寄、邮资预付或快递服务或传真的方式发到该方下列地址。每一通知还应再以电子邮件送达。该等通知视为有效送达的日期按如下方式确定：All notices and other communications required or permitted to be given pursuant to this Agreement shall be delivered personally or sent byregistered mail, postage prepaid, by a courier service or by facsimile transmission to the address of such Party set forth below. A confirmationcopy of each notice shall also be sent by email. The dates on which notices shall be deemed to have been effectively given shall be determined asfollows:9.1.1通知如果是以专人递送、快递服务或挂号邮寄、邮资预付发出的，则以于设定为通知的地址在接收或拒收之日为有效送达日。Notices given by personal delivery, by courier service or by registered mail, postage prepaid, shall be deemed effectively given on thedate of receipt or refusal at the address specified for notices.9.1.2通知如果是以传真发出的，则以成功传送之日为有效送达日（应以自动生成的传送确认信息为证）。Notices given by facsimile transmission shall be deemed effectively given on the date of successful transmission (as evidenced by anautomatically generated confirmation of transmission).16秘密文件Strictly Confidential9.2为通知的目的，双方地址如下：For the purpose of notices, the addresses of the Parties are as follows:甲方：中传天下信息科技（深圳）有限公司Party A: Zhongchuan Tianxia Information Technology (Shenzhen) Co., Ltd.地址：深圳市南山区高新中三道2号深圳软件园一期五栋401AAddress:401A, Building 5, Phase 1, Shenzhen Software Park, No.2 Gaoxin Zhongsan Road, Nanshan District, Shenzhen收件人：洪婷Attn: Hong Ting乙方：北京中传视讯科技有限公司Party B: Beijing Mobile Vision Technology Co., Ltd地址：北京市朝阳区光华路9号SOHO3QLAB32Address: LAB32, SOHO3Q, No 9, Guanghua Road, Chaoyang District, Beijing.收件人：宋雪松Attn.: Song Xuesong9.3任何一方可按本条规定随时给另一方发出通知来改变其接收通知的地址。Any Party may at any time change its address for notices by a notice delivered to the other Party in accordance with the terms hereof.17秘密文件Strictly Confidential10.协议的转让Assignment10.1乙方不得将其在本协议项下的权利与义务转让给第三方，除非事先征得甲方的书面同意。Without Party A's prior written consent, Party B shall not assign its rights and obligations under this Agreement to any third party.10.2乙方在此同意，甲方可以在其需要时向其他第三方转让其在本协议项下的权利和义务，并在该等转让发生时甲方仅需向乙方发出书面通知，并且无需再就该等转让征得乙方的同意。Party B agrees that Party A may assign its obligations and rights under this Agreement to any third party upon a prior written notice to Party Bbut without the consent of Party B.11.协议的分割性Severability如果本协议有任何一条或多条规定根据任何法律或法规在任何方面被裁定为无效、不合法或不可执行，本协议其余规定的有效性、合法性或可执行性不应因此在任何方面受到影响或损害。双方应通过诚意磋商，争取以法律许可以及双方期望的最大限度内有效的规定取代那些无效、不合法或不可执行的规定，而该等有效的规定所产生的经济效果应尽可能与那些无效、不合法或不能强制执行的规定所产生的经济效果相似。In the event that one or several of the provisions of this Agreement are found to be invalid, illegal or unenforceable in any aspect in accordance with anylaws or regulations, the validity, legality or enforceability of the remaining provisions of this Agreement shall not be affected or compromised in any aspect.The Parties shall strive in good faith to replace such invalid, illegal or unenforceable provisions with effective provisions that accomplish to the greatestextent permitted by law and the intentions of the Parties, and the economic effect of such effective provisions shall be as close as possible to the economiceffect of those invalid, illegal or unenforceable provisions.18秘密文件Strictly Confidential12.协议的修改、补充Amendments and Supplements双方可以书面协议方式对本协议作出修改和补充。经过双方签署的有关本协议的修改协议和补充协议是本协议组成部分，具有与本协议同等的法律效力。Any amendments and supplements to this Agreement shall be in writing. The amendment agreements and supplementary agreements that have beensigned by the Parties and that relate to this Agreement shall be an integral part of this Agreement and shall have the same legal validity as this Agreement.13.语言和副本Language and Counterparts本协议以中文和英文书就，一式二份，甲乙双方各持一份，具有同等效力；中英文版本如有冲突，应以中文版为准。This Agreement is written in both Chinese and English language in two copies, each Party having one copy with equal legal validity; in case there is anyconflict between the Chinese version and the English version, the Chinese version shall prevail.本页其余部分刻意留为空白The Remainder of this page is intentionally left blank19秘密文件Strictly Confidential有鉴于此，双方已使得经其授权的代表于文首所述日期签署了本独家业务合作协议并即生效，以昭信守。IN WITNESS WHEREOF, the Parties have caused their authorized representatives to execute this Exclusive Business Cooperation Agreement as of thedate first above written.甲方：中传天下信息科技（深圳）有限公司（盖章）Party A: Zhongchuan Tianxia Information Technology (Shenzhen) Co., Ltd.(Seal)签字：By: /s/ Hong Ting 姓名：洪婷Name: Hong Ting职务：总经理Title: General Manager20秘密文件Strictly Confidential有鉴于此，双方已使得经其授权的代表于文首所述日期签署了本独家业务合作协议并即生效，以昭信守。IN WITNESS WHEREOF, the Parties have caused their authorized representatives to execute this Exclusive Business Cooperation Agreement as of thedate first above written. 乙方：北京中传视讯科技有限公司（盖章）Party B: Beijing Mobile Vision Technology Co., Ltd. (Seal)签字：By: /s/ Song Xuesong 姓名：宋雪松Name: Song Xuesong职务：董事长Title: Chairman of the Board21秘密文件Strictly ConfidentialEX4.16 4 f20f2017ex416_luokung.htm EXCLUSIVE OPTION AGREEMENT BY AND AMONG ZHONGCHUAN TIANXIA INFORMATION TECHNOLOGY(SHENZHEN) CO., LTD., XUESONG SONG, WEILI CHEN, PING WANG, DONGLAI LIU, AND BEIJING MOBILE VISION TECHNOLOGY CO., LTD., DATEDAUGUST 31, 2015Exhibit 4.16独家购买权协议Exclusive Option Agreement本独家购买权协议 (下称“本协议”) 由以下各方于年月日在中华人民共和国（下称“中国”）北京签订：This Exclusive Option Agreement (this “Agreement”) is executed by and among the Parties below as of in Beijing, the People’s Republic of China (the“China” or “PRC”):甲方：中传天下信息科技（深圳）有限公司，一家依照中国法律设立和存在的外商独资企业，地址为深圳市南山区高新中三道2号深圳软件园一期五栋401A；Party A:Zhongchuan Tianxia Information Technology (Shenzhen) Co., Ltd., a whollyforeignowned enterprise organized and existing under the laws of China,with its address at 401A, Building 5, Phase 1, Shenzhen Software Park, No.2 Gaoxin Zhongsan Road, Nanshan District, Shenzhen.乙方：Party B:a)宋雪松Song Xuesong身份证号码:120112196809040417ID Card No.:120112196809040417住所：天津市河西区广东路中裕园33702Address:Zhongyu Yuan 33702, Guangdong Road, Hexi District, Tianjinb)陈蔚力Chen Weili身份证号码:120106197309240516ID Card No.:120106197309240516住所：广东省深圳市宝安区宝城上川路15号Address:Baocheng Shangchuan Road 15, Baoan District, Shenzhen, Guangdong1秘密文件Strictly Confidentialc)王平Wang Ping身份证号码:35020319691030401xID Card No.:35020319691030401x住所：广东省深圳市南山区高新南环路36号彩虹之岸12栋4AAddress:Caihong Zhi’an Building No.12 Suite 4A, Gaoxin Nanhuan Road 36, Nanshan District, Shenzhen, Guangdongd)刘东来Liu Donglai身份证号码:120107196810103912ID Card No.:120107196810103912住所：天津市和平区南京路诚基经贸中心1号楼2门1702号Address:No 1702, Door 2, Build 1, Chengji Economic and Trade Centre, Nanjing Road, Heping District, Tianjin.丙方：北京中传视讯科技有限公司，一家依照中国法律设立和存在的有限责任公司，地址为北京市朝阳区光华路9号SOHO3QLAB32，统一社会信用代码为9111010576215249XM；Party C:Beijing Mobile Vision Technology Co., Ltd., a limited company duly registered in China, with its address at LAB32, SOHO3Q, No 9, Guanghua Road,Chaoyang District, Beijing and its uniform social credit code of 9111010576215249XM.2秘密文件Strictly Confidential在本协议中，甲方、乙方和丙方以下各称“一方”，合称“各方”。In this Agreement, each of Party A, Party B and Party C shall be referred to as a “Party” respectively, and they shall be collectively referred to as the“Parties”.鉴于，乙方系丙方股东并合计持有丙方100%股权，乙方将按本协议之条款授予甲方购买全部或部分该股权的权利。Whereas, Party B are the shareholders of Party C and jointly hold 100% of the equity interest in Party C, and Party B are willing to grant to Party A the rightto acquire such equity interest, in whole or in part, on the terms herein.现各方协商一致，达成如下协议：Now therefore, upon mutual discussion and negotiation, the Parties have reached the following agreement:1.股权买卖Sale and Purchase of Equity Interest1.1授予权利Option Granted乙方在此不可撤销地授予甲方在中国法律允许的前提下，按照甲方自行决定的行使步骤，并按照本协议第1.3条所述的价格，随时一次或多次从乙方购买或指定一人或多人(“被指定人”)从乙方购买其目前和将来所持有的丙方的全部或部分股权（无论乙方出资额和/或持股比例将来是否发生变化）的一项不可撤销的专有权(“股权购买权”)。除甲方和被指定人外，任何第三人均不得享有股权购买权或其他与乙方股权有关的权利。丙方特此同意乙方向甲方授予股权购买权。本款及本协议所规定的“人”指个人、公司、合营企业、合伙、企业、信托或非公司组织。Party B hereby irrevocably grant Party A an irrevocable and exclusive right to purchase, or designate one or more persons (each, a “Designee”) topurchase the equity interests in Party C now and in the future held by Party B (regardless whether Party B’s capital contribution amount and/orpercentage of shareholding will be changed in the future) once or at multiple times at any time in part or in whole at Party A’s sole and absolutediscretion to the extent permitted by Chinese laws and at the price described in Section 1.3 herein (such right being the “Equity Interest PurchaseOption”). Except for Party A and the Designee(s), no other person shall be entitled to the Equity Interest Purchase Option or other rights withrespect to the equity interests of Party B. Party C hereby agrees to the grant by Party B of the Equity Interest Purchase Option to Party A. Theterm “person” as used herein shall refer to individuals, corporations, partnerships, partners, enterprises, trusts or noncorporate organizations.3秘密文件Strictly Confidential1.2行使步骤Steps for Exercise of Equity Interest Purchase Option甲方行使其股权购买权以符合中国法律和法规的规定为前提。甲方行使股权购买权时，应向乙方发出书面通知(“股权购买通知”)，股权购买通知应载明以下事项：(a)甲方关于行使股权购买权的决定；(b)甲方拟从乙方购买的股权份额(“被购买的股权”)；和(c)被购买的股权的买入日期。Subject to the provisions of the laws and regulations of China, Party A may exercise the Equity Interest Purchase Option by issuing a writtennotice to Party B (the “Equity Interest Purchase Option Notice”), specifying: (a) Party A’s decision to exercise the Equity Interest PurchaseOption; (b) the portion of equity interests to be purchased from Party B (the “Optioned Interests”); and (c) the date for purchasing the OptionedInterests.1.3股权买价Equity Interest Purchase Price被购买的股权的买价（“股权买价”）应是行权当时中国法律允许的最低价格。乙方收到该股权对价后，应当提供给丙方与该股权买价相同金额的借款，该借款的期限为20年，且为无息。乙方应当在该借款期限届满时就该借款放弃对丙方的债权。The purchase price of the Optioned Interests (the “Equity Interest Purchase Price”) shall be the lowest price permitted by the laws of China. Afterreceiving the Equity Interest Purchase Price, Party B shall make an interestfree loan equivalent to the amount of Equity Interest Purchase Price toParty C, of which term is 20 years. Each member of Party B shall give up his(her) creditor’s right when the loan term expires.4秘密文件Strictly Confidential1.4转让被购买股权Transfer of Optioned Interests甲方每次行使股权购买权时：For each exercise of the Equity Interest Purchase Option:1.4.1乙方应责成丙方及时召开股东会会议，在该会议上，应通过批准乙方向甲方和/或被指定人转让被购买的股权的决议；Party B shall cause Party C to promptly convene a shareholders meeting, at which a resolution shall be adopted approving Party B’stransfer of the Optioned Interests to Party A and/or the Designee(s);1.4.2乙方应就其向甲方和/或被指定人转让被购买股权取得丙方其他股东同意该转让并放弃优先购买权的书面声明。Party B shall obtain written statements from the other shareholder of Party C giving consent to the transfer of the equity interest to PartyA and/or the Designee(s) and waiving any right of first refusal related thereto.1.4.3乙方应与甲方和/或(在适用的情况下)被指定人按照本协议及股权购买通知的规定，为每次转让签订股权转让协议；Party B shall execute a share transfer contract with respect to each transfer with Party A and/or each Designee (whichever is applicable),in accordance with the provisions of this Agreement and the Equity Interest Purchase Option Notice regarding the Optioned Interests;5秘密文件Strictly Confidential1.4.4有关方应签署所有其他所需协议、协议或文件，取得全部所需的政府批准和同意，并采取所有所需行动，在不附带任何担保权益的情况下，将被购买的股权的有效所有权转移给甲方和/或被指定人并使甲方和/或被指定人成为被购买的股权的登记在册所有人。为本款及本协议的目的，“担保权益”包括担保、抵押、第三方权利或权益，任何购股权、收购权、优先购买权、抵销权、所有权扣留或其他担保安排等；但为了明确起见，不包括在本协议、乙方股权质押协议项下产生的任何担保权益。本款及本协议所规定的“乙方股权质押协议”指甲方、乙方和丙方于本协议签署之日签订的股权质押协议，根据股权质押协议，乙方为担保丙方能履行丙方与甲方签订的独家业务合作协议项下的义务，而向甲方质押其在丙方的全部乙方股权。The relevant Parties shall execute all other necessary contracts, agreements or documents, obtain all necessary government licenses andpermits and take all necessary actions to transfer valid ownership of the Optioned Interests to Party A and/or the Designee(s),unencumbered by any security interests, and cause Party A and/or the Designee(s) to become the registered owner(s) of the OptionedInterests. For the purpose of this Section and this Agreement, “security interests” shall include securities, mortgages, third party’s rightsor interests, any stock options, acquisition right, right of first refusal, right to offset, ownership retention or other security arrangements,but shall be deemed to exclude any security interest created by this Agreement and Party B’s Equity Interest Pledge Agreement. “PartyB’s Equity Interest Pledge Agreement” as used in this Section and this Agreement shall refer to the Equity Interest Pledge Agreementexecuted by and among Party A, Party B and Party C on the date of this Agreement, whereby Party B pledge all of their equity interests inParty C to Party A, in order to guarantee Party C’s performance of its obligations under the Exclusive Business Corporation Agreementexecuted by and between Party C and Party A.6秘密文件Strictly Confidential2.知识产权独家购买权Exclusive Option regarding the Intellectual Property Rights2.1本协议签订之日起，若乙方拟转让、出售或以其他方式处置（任一处置方式以下简称“转让”）其拥有或持有的全部或部分知识产权（以下称“知识产权”，定义见第2.4条），甲方有权独家购买该等知识产权。From the date hereof, if Party B proposes to transfer, sell or dispose of (each, a “transfer”) all or any part of the intellectual property rights ownedor held by Party B (“IPR”), Party A shall have exclusive option.2.2若乙方有意转让全部或部分知识产权，应事先向甲方发出书面通知(“转让通知”)，转让通知应载明以下事项：(a) 乙方关于转让知识产权的意向；(b) 乙方拟转让的知识产权清单(“拟转让知识产权”)及转让的价格和其他条件。转让通知视为乙方向甲方发出的一份要约，按照该要约，乙方同意按转让通知中指定的价格条件向甲方转让全部或部分拟转让知识产权。Prior to Party B proposes to transfer all or any part of its IPR, Party B shall give Party A a written notice (“Transfer Notice”), which shall specify (a)Party B’s intention to make the transfer; (b) the list of IPR to be transferred (“Offered IPR”) and the consideration and other conditions uponwhich the transfer is to be made. The Transfer Notice constitutes Party B’s offer given to Party A, pursuant to which, Party B agrees to transfer allor any part of its Offered IPR to Party A based on the same conditions described in the Transfer Notice.7秘密文件Strictly Confidential2.3甲方收到转让通知后，有权在30日内选择按照转让通知中列明的转让价格和条件购买拟转让知识产权。如果甲方行使其独家购买权，双方应于甲方收到转让通知后45日内签订有关的知识产权转让协议，乙方应办理法律规定的知识产权转让的批准和登记手续。Party A shall have an option for a period of 30 days from Party A’s receipt of the Transfer Notice to elect to purchase the Offered IPR at the sameprice and subject to the same conditions as described in the Transfer Notice. If Party A decides to exercise its exclusive option, the parties shallenter into relevant IPR transfer agreement within 45 days upon Party A’s receipt of the Transfer Notice and Party B is responsible to complete allrelated approvals and registrations formalities as prescribed by the PRC law.2.4本协议第2条所称“知识产权”指任何知识产权，包括但不限于著作权、专利权、专利申请权、商标、域名、软件、专有技术，并包括前述知识产权申请权利以及登记注册的权利，以及其他所有与前述知识产权有关的权利和权益。The “IPR” referred to in this Article 2 means any intellectual property rights, including, without limitations, copyrights, patents, patentapplications, trademarks, domain names, software and knowhow together with (a) all rights to apply for or register any of the foregoing and (b) allother rights and interests to any of the foregoing.8秘密文件Strictly Confidential3.承诺Covenants3.1有关丙方的承诺Covenants regarding Party C乙方（作为丙方的股东）和丙方在此承诺：Party B (as the shareholders of Party C) and Party C hereby covenant as follows:3.1.1未经甲方的事先书面同意，不以任何形式补充、更改或修改丙方公司章程文件，增加或减少其注册资本，或以其他方式改变其注册资本结构；Without the prior written consent of Party A, they shall not in any manner supplement, change or amend the articles of association andbylaws of Party C, increase or decrease its registered capital, or change its structure of registered capital in other manners;3.1.2按照良好的财务和商业标准及惯例，保持其公司的存续，审慎地及有效地经营其业务和处理事务；They shall maintain Party C’s corporate existence in accordance with good financial and business standards and practices by prudentlyand effectively operating its business and handling its affairs;3.1.3未经甲方的事先书面同意，不在本协议签署之日起的任何时间出售、转让、抵押或以其他方式处置丙方的任何资产、业务或收入的合法或受益权益，或允许在其上设置任何其他担保权益；Without the prior written consent of Party A, they shall not at any time following the date hereof, sell, transfer, mortgage or dispose of inany manner any assets of Party C or legal or beneficial interest in the business or revenues of Party C, or allow the encumbrance thereonof any security interest;3.1.4未经甲方的事先书面同意，不发生、继承、保证或容许存在任何债务，但(i)正常或日常业务过程中产生而不是通过借款方式产生的债务；和(ii)已向甲方披露和得到甲方书面同意的债务除外；Without the prior written consent of Party A, they shall not incur, inherit, guarantee or suffer the existence of any debt, except for (i)debts incurred in the ordinary course of business other than through loans; and (ii) debts disclosed to Party A for which Party A’swritten consent has been obtained;9秘密文件Strictly Confidential3.1.5一直在正常业务过程中经营所有业务，以保持丙方的资产价值，不进行任何足以影响其经营状况和资产价值的作为/不作为；They shall always operate all of Party C’s businesses during the ordinary course of business to maintain the asset value of Party C andrefrain from any action/omission that may affect Party C’s operating status and asset value;3.1.6未经甲方的事先书面同意，不得让丙方签订任何重大协议，但在正常业务过程中签订的协议除外(就本段而言，如果一份协议的价值超过【人民币10万元】，即被视为重大协议)；Without the prior written consent of Party A, they shall not cause Party C to execute any major contract, except the contracts in theordinary course of business (for purpose of this subsection, a contract with a value exceeding RMB 100,000 shall be deemed a majorcontract);3.1.7未经甲方的事先书面同意，丙方不得向任何人提供贷款或信贷；Without the prior written consent of Party A, they shall not cause Party C to provide any person with any loan or credit;3.1.8应甲方要求，向其提供所有关于丙方的营运和财务状况的资料；They shall provide Party A with information on Party C’s business operations and financial condition at Party A’s request;10秘密文件Strictly Confidential3.1.9如甲方提出要求，丙方应从甲方接受的保险公司处购买和持有有关其资产和业务的保险，该保险的金额和险种应与经营类似业务的公司一致；If requested by Party A, they shall procure and maintain insurance in respect of Party C’s assets and business from an insurance carrieracceptable to Party A, at an amount and type of coverage typical for companies that operate similar businesses;3.1.10未经甲方的事先书面同意，丙方不得与任何人合并或联合，或对任何人进行收购或投资；Without the prior written consent of Party A, they shall not cause or permit Party C to merge, consolidate with, acquire or invest in anyperson;3.1.11将发生的或可能发生的与丙方资产、业务或收入有关的诉讼、仲裁或行政程序立即通知甲方；They shall immediately notify Party A of the occurrence or possible occurrence of any litigation, arbitration or administrative proceedingsrelating to Party C’s assets, business or revenue;3.1.12为保持丙方对其全部资产的所有权，签署所有必要或适当的文件，采取所有必要或适当的行动和提出所有必要或适当的控告或对所有索偿进行必要和适当的抗辩；To maintain the ownership by Party C of all of its assets, they shall execute all necessary or appropriate documents, take all necessary orappropriate actions and file all necessary or appropriate complaints or raise necessary and appropriate defenses against all claims;11秘密文件Strictly Confidential3.1.13未经甲方事先书面同意，不得以任何形式派发股息予各股东，但一经甲方要求，丙方应立即将其所有可分配利润全部立即分配给其各股东；及Without the prior written consent of Party A, they shall ensure that Party C shall not in any manner distribute dividends to itsshareholders, provided that upon Party A’s written request, Party C shall immediately distribute all distributable profits to itsshareholders; and3.1.14根据甲方的要求，委任由其指定的任何人士出任丙方的董事和/或执行董事。At the request of Party A, they shall appoint any persons designated by Party A as the director and/or executive director of Party C.3.2乙方和丙方的承诺Covenants of Party B and Party C乙方承诺：Party B hereby covenant as follows:3.2.1未经甲方的事先书面同意，不出售、转让、抵押或以其他方式处置其拥有的丙方的股权的合法或受益权益，或允许在其上设置任何其他担保权益，但根据乙方签署的《股权质押协议》在该股权上设置的质押则除外；Without the prior written consent of Party A, Party B shall not sell, transfer, mortgage or dispose of in any other manner any legal orbeneficial interest in the equity interests in Party C held by Party B, or allow the encumbrance thereon of any security interest, except forthe pledge placed on these equity interests in accordance with Party B’s Equity Interest Pledge Agreement;12秘密文件Strictly Confidential3.2.2促使丙方股东会和/或执行董事不批准在未经甲方的事先书面同意的情况下，出售、转让、抵押或以其他方式处置任何乙方持有之丙方的股权的合法权益或受益权，或允许在其上设置任何其他担保权益，但批准根据乙方签署的《股权质押协议》在乙方股权上设置的质押则除外；Party B shall cause the shareholders’ meeting and/or the executive director of Party C not to approve the sale, transfer, mortgage ordisposition in any other manner of any legal or beneficial interest in the equity interests in Party C held by Party B, or allow theencumbrance thereon of any security interest, without the prior written consent of Party A, except for the pledge placed on these equityinterests in accordance with Party B’s Equity Interest Pledge Agreement;3.2.3未经甲方的事先书面同意的情况下，对于丙方与任何人合并或联合，或对任何人进行收购或投资，乙方将促成丙方股东会或执行董事不予批准；Party B shall cause the shareholders’ meeting or the executive director of Party C not to approve the merger or consolidation with anyperson, or the acquisition of or investment in any person, without the prior written consent of Party A;3.2.4将发生的或可能发生的任何关于其所拥有的股权的诉讼、仲裁或行政程序立即通知甲方；Party B shall immediately notify Party A of the occurrence or possible occurrence of any litigation, arbitration or administrativeproceedings relating to the equity interests in Party C held by Party B;13秘密文件Strictly Confidential3.2.5促使丙方股东会或执行董事表决赞成本协议规定的被购买的股权的转让并应甲方之要求采取其他任何行动；Party B shall cause the shareholders’ meeting or the executive director of Party C to vote their approval of the transfer of the OptionedInterests as set forth in this Agreement and to take any and all other actions that may be requested by Party A;3.2.6为保持其对股权的所有权，签署所有必要或适当的文件，采取所有必要或适当的行动和提出所有必要或适当的控告或对所有索偿进行必要和适当的抗辩；To the extent necessary to maintain Party B’s ownership in Party C, Party B shall execute all necessary or appropriate documents, take allnecessary or appropriate actions and file all necessary or appropriate complaints or raise necessary and appropriate defenses against allclaims;3.2.7应甲方的要求，委任由其指定的任何人士出任丙方的董事和/或执行董事；Party B shall appoint any designee of Party A as the director and/or executive director of Party C, at the request of Party A;3.2.8经甲方随时要求，应向其指定的代表在任何时间无条件地根据本协议的股权购买权立即转让其股权，并放弃其对其他现有股东进行上述股权转让所享有的优先购买权（如有的话）；和At the request of Party A at any time, Party B shall promptly and unconditionally transfer its equity interests in Party C to Party A’sDesignee(s) in accordance with the Equity Interest Purchase Option under this Agreement, and Party B hereby waives its right of firstrefusal (if any) to the share transfer by the other existing shareholder of Party C (if any); and14秘密文件Strictly Confidential3.2.9严格遵守本协议及各方共同或分别签订的其他协议的各项规定，切实履行该等协议项下的各项义务，并不进行任何足以影响该等协议的有效性和可执行性的作为/不作为。如果乙方对于本协议项下或乙方股权质押协议下或对甲方的授权委托书中的股权，还留存有任何权利，除非甲方书面指示，否则乙方仍不得行使该权利。Party B shall strictly abide by the provisions of this Agreement and other contracts jointly or separately executed by and among Party B,Party C and Party A, perform the obligations hereunder and thereunder, and refrain from any action/omission that may affect theeffectiveness and enforceability thereof. To the extent that Party B has any remaining rights with respect to the equity interests subject tothis Agreement hereunder or under Party B’s Equity Interest Pledge Agreement or under the Power of Attorney granted in favor of PartyA, Party B shall not exercise such rights except in accordance with the written instructions of Party A.4.陈述和保证Representations and Warranties乙方和丙方特此在本协议签署之日和每一个转让日向甲方共同及分别陈述和保证如下：Party B and Party C hereby represent and warrant to Party A, jointly and severally, as of the date of this Agreement and each date of transfer of theOptioned Interests, that:4.1其具有签订和交付本协议和其为一方的、根据本协议为每一次转让被购买的股权而签订的任何股权转让协议(各称为"转让协议")，并履行其在本协议和任何转让协议项下的义务的权力和能力。乙方和丙方同意在甲方行使购买权时，他们将签署与本协议条款一致的转让协议。本协议和其是一方的各转让协议一旦签署后，构成或将对其构成合法、有效及具有约束力的义务并可按照其条款对其强制执行；They have the authority to execute and deliver this Agreement and any share transfer contracts to which they are a party concerning theOptioned Interests to be transferred thereunder (each, a “Transfer Contracts”), and to perform their obligations under this Agreement and anyTransfer Contracts. Party B and Party C agree to enter into Transfer Contracts consistent with the terms of this Agreement upon Party A’s exerciseof the Equity Interest Purchase Option. This Agreement and the Transfer Contracts to which they are a party constitute or will constitute theirlegal, valid and binding obligations and shall be enforceable against them in accordance with the provisions thereof;15秘密文件Strictly Confidential4.2无论是本协议或任何转让协议的签署和交付还是其在本协议或任何转让协议项下的义务的履行均不会：(i)导致违反任何有关的中国法律；(ii)与丙方章程或其他组织文件相抵触；(iii)导致违反其是一方或对其有约束力的任何协议或文件，或构成其是一方或对其有约束力的任何协议或文件项下的违约；(iv)导致违反有关向任何一方颁发的任何许可或批准的授予和(或)继续有效的任何条件；或(v)导致向任何一方颁发的任何许可或批准中止或被撤销或附加条件；The execution and delivery of this Agreement or any Transfer Contracts and the obligations under this Agreement or any Transfer Contracts shallnot: (i) cause any violation of any applicable laws of China; (ii) be inconsistent with the articles of association, bylaws or other organizationaldocuments of Party C; (iii) cause the violation of any contracts or instruments to which they are a party or which are binding on them, orconstitute any breach under any contracts or instruments to which they are a party or which are binding on them; (iv) cause any violation of anycondition for the grant and/or continued effectiveness of any licenses or permits issued to either of them; or (v) cause the suspension orrevocation of or imposition of additional conditions to any licenses or permits issued to either of them;4.3乙方对其在丙方拥有的股权拥有良好和可出售的所有权，除乙方签署的《股权质押协议》外，乙方在上述股权上没有设置任何担保权益；Party B have a good and merchantable title to the equity interests in Party C they hold. Except for Party B’s Equity Interest Pledge Agreement,Party B have not placed any security interest on such equity interests;16秘密文件Strictly Confidential4.4目前没有悬而未决的或构成威胁的与丙方的股权、丙方资产有关的或与丙方有关的诉讼、仲裁或行政程序。There are no pending or threatened litigation, arbitration or administrative proceedings relating to the equity interests in Party C, assets of Party Cor Party C.5.生效日Effective Date5.1本协议于各方签署本协议之日生效，有效期10年，经甲方选择可再延长10年。This Agreement shall become effective upon the date hereof, and remain effective for a term of 10 years, and may be renewed for an additional 10years at Party A’s election.5.2若丙方股东发生变化，由新股东签署此协议，在此协议签署之日，原协议自动视为无效。In the event of a change in the shareholders of Party C, the new shareholder should sign this agreement and the original agreement willautomatically be deemed invalid on the date of signing of this agreement.17秘密文件Strictly Confidential6.适用法律与争议解决Governing Law and Resolution of Disputes6.1适用法律Governing law本协议的订立、效力、解释、履行、修改和终止以及争议解决均适用中国正式公布并可公开得到的法律。对中国正式公布并可公开得到的法律没有规定的事项，将适用国际法律原则和惯例。The execution, effectiveness, construction, performance, amendment and termination of this Agreement and the resolution of disputes hereundershall be governed by the formally published and publicly available laws of China. Matters not covered by formally published and publiclyavailable laws of China shall be governed by international legal principles and practices.6.2争议的解决方法Methods of Resolution of Disputes因解释和履行本协议而发生的任何争议，本协议各方应首先通过友好协商的方式加以解决。如果在一方向其他方发出要求协商解决的书面通知后30天之内争议仍然得不到解决，则任何一方均可将有关争议提交给中国国际经济贸易仲裁委员会，由该会按照其届时有效的仲裁规则仲裁解决。仲裁应在北京进行，使用之语言为中文。仲裁裁决是终局性的，对各方均有约束力。In the event of any dispute with respect to the construction and performance of this Agreement, the Parties shall first resolve the dispute throughfriendly negotiations. In the event the Parties fail to reach an agreement on the dispute within 30 days after either Party’s request to the otherParties for resolution of the dispute through negotiations, either Party may submit the relevant dispute to the China International Economic andTrade Arbitration Commission for arbitration, in accordance with its then effective arbitration rules. The arbitration shall be conducted in Beijing,and the language used in arbitration shall be Chinese. The arbitration award shall be final and binding on all Parties.18秘密文件Strictly Confidential7.税款、费用Taxes and Fees每一方应承担根据中国法律因准备和签署本协议和各转让协议以及完成本协议和各转让协议拟定的交易而由该方发生的或对其征收的任何和全部的转让和注册的税、花费和费用。Each Party shall pay any and all transfer and registration tax, expenses and fees incurred thereby or levied thereon in accordance with the laws of China inconnection with the preparation and execution of this Agreement and the Transfer Contracts, as well as the consummation of the transactionscontemplated under this Agreement and the Transfer Contracts.8.通知Notices8.1本协议项下要求或发出的所有通知和其他通信应通过专人递送、挂号邮寄、邮资预付或商业快递服务或传真的方式发到该方下列地址。每一通知还应再以电子邮件送达。该等通知视为有效送达的日期按如下方式确定：All notices and other communications required or permitted to be given pursuant to this Agreement shall be delivered personally or sent byregistered mail, postage prepaid, by a commercial courier service or by facsimile transmission to the address of such Party set forth below. Aconfirmation copy of each notice shall also be sent by email. The dates on which notices shall be deemed to have been effectively given shall bedetermined as follows:8.1.1通知如果是以专人递送、快递服务或挂号邮寄、邮资预付发出的，则以于设定为通知的地址在接收或拒收之日为有效送达日。Notices given by personal delivery, by courier service or by registered mail, postage prepaid, shall be deemed effectively given on thedate of receipt or refusal at the address specified for notices.19秘密文件Strictly Confidential8.1.2通知如果是以传真发出的，则以成功传送之日为有效送达日（应以自动生成的传送确认信息为证）。Notices given by facsimile transmission shall be deemed effectively given on the date of successful transmission (as evidenced by anautomatically generated confirmation of transmission).8.2为通知的目的，各方地址如下：For the purpose of notices, the addresses of the Parties are as follows:甲方：中传天下信息科技（深圳）有限公司Party A:Zhongchuan Tianxia Information Technology (Shenzhen) Co., Ltd.地址：深圳市南山区高新中三道2号深圳软件园一期五栋401AAddress:401A, Building 5, Phase 1, Shenzhen Software Park, No.2 Gaoxin Zhongsan Road, Nanshan District, Shenzhen.收件人：洪婷Attn:Hong Ting乙方：Party B: 宋雪松Song Xuesong住所：天津市河西区广东路中裕园33702Address:Zhongyu Yuan 33702, Guangdong Road, Hexi District, Tianjin20秘密文件Strictly Confidential陈蔚力Chen Weili住所：广东省深圳市宝安区宝城上川路15号Address:Baocheng Shangchuan Road 15, Baoan District, Shenzhen, Guangdong王平Wang Ping住所：广东省深圳市南山区高新南环路36号彩虹之岸12栋4AAddress:Caihong Zhi’an Building No.12 Suite 4A, Gaoxin Nanhuan Road 36, Nanshan District, Shenzhen, Guangdong刘东来Liu Donglai住所：天津市和平区南京路诚基经贸中心1号楼2门1702号Address:No 1702, Door 2, Build 1, Chengji Economic and Trade Centre, Nanjing Road, Heping District, Tianjin.丙方：北京中传视讯科技有限公司Party C:Beijing Mobile Vision Technology Co., Ltd.地址：北京市朝阳区光华路9号SOHO3QLAB32Address: LAB32, SOHO3Q, No 9, Guanghua Road, Chaoyang District, Beijing .收件人：宋雪松Attn: Song Xuesong8.3任何一方可按本条规定随时给其他方发出通知来改变其接收通知的地址。Any Party may at any time change its address for notices by a notice delivered to the other Parties in accordance with the terms hereof.21秘密文件Strictly Confidential9.保密责任Confidentiality各方承认及确定彼此就有关本协议而交换的任何口头或书面资料均属机密资料。各方应当对所有该等资料予以保密，而在未得其他方书面同意前，不得向任何第三者披露任何有关资料，惟下列情况除外：(a)公众人士知悉或将会知悉该等资料(并非由接受资料之一方擅自向公众披露)；(b)适用法律法规或股票交易的规则或规例所需披露之资料；或(c)由任何一方就本协议所述交易而需向其法律或财务顾问披露之资料而该法律或财务顾问亦需遵守与本条款相类似之保密责任。如任何一方工作人员或聘请机构的泄密均视为该方的泄密，需依本协议承担违约责任。无论本协议以任何理由终止，本条款仍然生效。The Parties acknowledge that any oral or written information exchanged among them with respect to this Agreement is confidential information. Each Partyshall maintain the confidentiality of all such information, and without obtaining the written consent of other Parties, it shall not disclose any relevantinformation to any third parties, except in the following circumstances: (a) such information is or will be in the public domain (provided that this is not theresult of a public disclosure by the receiving party); (b) information disclosed as required by applicable laws or rules or regulations of any stock exchange;or (c) information required to be disclosed by any Party to its legal counsel or financial advisor regarding the transaction contemplated hereunder, and suchlegal counsel or financial advisor are also bound by confidentiality duties similar to the duties in this section. Disclosure of any confidential information bythe staff members or agency hired by any Party shall be deemed disclosure of such confidential information by such Party, which Party shall be held liablefor breach of this Agreement. This Section shall survive the termination of this Agreement for any reason.22秘密文件Strictly Confidential10.进一步保证Further Warranties各方同意迅速签署为执行本协议的各项规定和目的而合理需要的或对其有利的文件，以及为执行本协议的各项规定和目的而采取合理需要的或对其有利的进一步行动。The Parties agree to promptly execute documents that are reasonably required for or are conducive to the implementation of the provisions and purposes ofthis Agreement and take further actions that are reasonably required for or are conducive to the implementation of the provisions and purposes of thisAgreement.11.其他Miscellaneous11.1修订、修改与补充Amendment, change and supplement对本协议作出修订、修改与补充，必须经每一方签署书面协议。Any amendment, change and supplement to this Agreement shall require the execution of a written agreement by all of the Parties.11.2完整协议Entire agreement除了在本协议签署后所作出的书面修订、补充或修改以外，本协议构成本协议各方就本协议标的物所达成的完整协议，取代在此之前就本协议标的物所达成的所有口头或书面的协商、陈述和协议。 Except for the amendments, supplements or changes in writing executed after theexecution of this Agreement, this Agreement shall constitute the entire agreement reached by and among the Parties hereto with respect to thesubject matter hereof, and shall supercede all prior oral and written consultations, representations and contracts reached with respect to thesubject matter of this Agreement.23秘密文件Strictly Confidential11.3标题Headings本协议的标题仅为方便阅读而设，不应被用来解释、说明或在其他方面影响本协议各项规定的含义。The headings of this Agreement are for convenience only, and shall not be used to interpret, explain or otherwise affect the meanings of theprovisions of this Agreement.11.4语言Language本协议以中文和英文书就，一式八份，乙方共计六名股东以及甲方、丙方各持一份，具有同等效力；中英文版本如有冲突，应以中文版为准。This Agreement is written in both Chinese and English language in eight copies, the 6 shareholders of Party B, Party A and Party C having onecopy with equal legal validity respectively; in case there is any conflict between the Chinese version and the English version, the Chinese versionshall prevail.11.5可分割性Severability如果本协议有任何一条或多条规定根据任何法律或法规在任何方面被裁定为无效、不合法或不可执行，本协议其余规定的有效性、合法性或可执行性不应因此在任何方面受到影响或损害。各方应通过诚意磋商，争取以法律许可以及各方期望的最大限度内有效的规定取代那些无效、不合法或不可执行的规定，而该等有效的规定所产生的经济效果应尽可能与那些无效、不合法或不能强制执行的规定所产生的经济效果相似。In the event that one or several of the provisions of this Agreement are found to be invalid, illegal or unenforceable in any aspect in accordancewith any laws or regulations, the validity, legality or enforceability of the remaining provisions of this Agreement shall not be affected orcompromised in any respect. The Parties shall strive in good faith to replace such invalid, illegal or unenforceable provisions with effectiveprovisions that accomplish to the greatest extent permitted by law and the intentions of the Parties, and the economic effect of such effectiveprovisions shall be as close as possible to the economic effect of those invalid, illegal or unenforceable provisions.24秘密文件Strictly Confidential11.6继任者Successors本协议对各方各自的继任者和各方所允许的受让方应具有约束力并对其有利。This Agreement shall be binding on and shall inure to the interest of the respective successors of the Parties and the permitted assigns of suchParties.11.7继续有效Survival11.7.1协议期满或提前终止前因本协议而发生的或到期的任何义务在本协议期满或提前终止后继续有效。Any obligations that occur or that are due as a result of this Agreement upon the expiration or early termination of this Agreement shallsurvive the expiration or early termination thereof.11.7.2本协议第5、6、9条和本第11.7条的规定在本协议终止后继续有效。The provisions of Articles 5, 6, 9 and this Section 11.7 shall survive the termination of this Agreement.25秘密文件Strictly Confidential11.8弃权Waivers任何一方可以对本协议的条款和条件作出弃权，但必须经书面作出并经各方签字。一方在某种情况下就其他方的违约所作的弃权不应被视为该方在其他情况下就类似的违约已经对其他方作出弃权。Any Party may waive the terms and conditions of this Agreement, provided that such a waiver must be provided in writing and shall require thesignatures of the Parties. No waiver by any Party in certain circumstances with respect to a breach by other Parties shall operate as a waiver bysuch a Party with respect to any similar breach in other circumstances.本页其余部分刻意留为空白The Remainder of this page is intentionally left blank26秘密文件Strictly Confidential有鉴于此，各方已自行或使得其各自授权代表于文首所载日期签署本独家购买权协议。IN WITNESS WHEREOF, the Parties have executed, or caused their respective duly authorized representatives to execute, this Exclusive Option Agreement as ofthe date first above written.甲方：中传天下信息科技（深圳）有限公司（盖章）Party A: Zhongchuan Tianxia Information Technology (Shenzhen) Co., Ltd. (Seal)签字：By:/s/ Hong Ting姓名：洪婷Name: Hong Ting职务：总经理Title: General Manager秘密文件 Strictly Confidential有鉴于此，各方已自行或使得其各自授权代表于文首所载日期签署本独家购买权协议。IN WITNESS WHEREOF, the Parties have executed, or caused their respective duly authorized representatives to execute, this Exclusive Option Agreement as ofthe date first above written.乙方：Party B:宋雪松Song Xuesong签字：By:/s/ Song Xuesong秘密文件 Strictly Confidential有鉴于此，各方已自行或使得其各自授权代表于文首所载日期签署本独家购买权协议。IN WITNESS WHEREOF, the Parties have executed, or caused their respective duly authorized representatives to execute, this Exclusive Option Agreement as ofthe date first above written.乙方：Party B:陈蔚力Chen Weili签字：By:/s/ Chen Weili秘密文件 Strictly Confidential有鉴于此，各方已自行或使得其各自授权代表于文首所载日期签署本独家购买权协议。IN WITNESS WHEREOF, the Parties have executed, or caused their respective duly authorized representatives to execute, this Exclusive Option Agreement as ofthe date first above written.乙方：Party B:王平Wang Ping签字：By:/s/ Wang Ping秘密文件 Strictly Confidential有鉴于此，各方已自行或使得其各自授权代表于文首所载日期签署本独家购买权协议。IN WITNESS WHEREOF, the Parties have executed, or caused their respective duly authorized representatives to execute, this Exclusive Option Agreement as ofthe date first above written.乙方：Party B:刘东来Liu Donglai签字：By:/s/ Liu Donglai秘密文件 Strictly Confidential有鉴于此，各方已自行或使得其各自授权代表于文首所载日期签署本独家购买权协议。IN WITNESS WHEREOF, the Parties have executed, or caused their respective duly authorized representatives to execute, this Exclusive Option Agreement as ofthe date first above written.丙方：北京中传视讯科技有限公司（盖章）Party B: Beijing Mobile Vision Technology Co., Ltd. (Seal)签字：By:/s/ Song Xuesong姓名：宋雪松Name:Song Xuesong职务：董事长Title:Chairman of the Board秘密文件 Strictly ConfidentialEX4.17 5 f20f2017ex417_luokung.htm EQUITY INTEREST PLEDGE AGREEMENT BY AND AMONG ZHONGCHUAN TIANXIA INFORMATION TECHNOLOGY(SHENZHEN) CO., LTD., XUESONG SONG, WEILI CHEN, PING WANG, DONGLAI LIU, AND BEIJING MOBILE VISION TECHNOLOGY CO., LTD., DATEDAUGUST 31, 2015Exhibit 4.17股权质押协议Equity Interest Pledge Agreement本股权质押协议（下称"本协议”）由下列各方于年月日在中华人民共和国（下称“中国”）北京签订：This Equity Interest Pledge Agreement (this "Agreement") has been executed by and among the following parties on in Beijing, the People’sRepublic of China (the “China” or “PRC”):甲方：中传天下信息科技（深圳）有限公司（下称“质权人”）Party A: Zhongchuan Tianxia Information Technology (Beijing) Co., Ltd. (“Pledgee”)地址：深圳市南山区高新中三道2号深圳软件园一期五栋401AAddress: 401A, Building 5, Phase 1, Shenzhen Software Park, No.2 Gaoxin Zhongsan Road, Nanshan District, Shenzhen统一社会信用代码： 91440300565701058RUniform Social Credit Code: 91440300565701058R乙方(下称“出质人”)：Party B ( “Pledgors”):a)宋雪松Song Xuesong身份证号码:ID Card No.:b)陈蔚力Chen Weili身份证号码:ID Card No.:1秘密文件 Strictly Confidentialc)王平Wang Ping身份证号码:ID Card No.:d)刘东来Liu Donglai身份证号码:ID Card No.:丙方：北京中传视讯科技有限公司Party C: Beijing Mobile Vision Technology Co., Ltd.地址：北京市朝阳区光华路9号SOHO3QLAB32Address: LAB32, SOHO3Q, No 9, Guanghua Road, Chaoyang District, Beijing统一社会信用代码：9111010576215249XMUniform Social Credit Code: 9111010576215249XM在本协议中，质权人、出质人和丙方以下各称“一方”，合称“各方”。In this Agreement, each of Pledgee, Pledgors and Party C shall be referred to as a "Party" respectively, and they shall be collectively referred to as the"Parties".鉴于：Whereas:1．出质人全部为中国境内居民自然人，共同持有丙方100%的股权。丙方是一家在中国注册成立的、主要从事手机视频技术研发、内容制作和产业化市场推广的有限责任公司。丙方有意在此确认出质人和质权人在本协议下的权利和义务并提供必要的协助登记该质权；All of the Pledgors are natural persons resided in PRC, and collectively hold 100% of the equity interest in Party C. Party C is a limited company registered inChina, mainly engaging in mobile video frequency technology research, development, content creation, sale and related industrialization promotion. Party Cacknowledges the respective rights and obligations of Pledgors and Pledgee under this Agreement, and intends to provide any necessary assistance inregistering the Pledge;2．质权人是一家在中国注册的外商独资企业。质权人与丙方于年月日签订了独家业务合作协议；Pledgee is a whollyforeignowned enterprise registered in China. Pledgee and Party C have executed an Exclusive Business Cooperation Agreement as of [*],[*];3．为了保证丙方全面履行独家业务合作协议项下的义务，出质人以其拥有的全部丙方股权向质权人做出质押担保。To ensure that Party C fully performs its obligations under the Exclusive Business Cooperation Agreement, Pledgors hereby pledge to the Pledgee all of theequity interests they hold in Party C.为了履行业务合作协议的条款，各方商定按照以下条款签订本协议。To perform the provisions of the Business Cooperation Agreement, the Parties have mutually agreed to execute this Agreement upon the following terms.2秘密文件 Strictly Confidential1.定义Definitions除非本协议另有规定，下列词语含义为：Unless otherwise provided herein, the terms below shall have the following meanings:1.1质权：指出质人根据本协议第2条给予质权人的担保物权，即指质权人所享有的，以出质人质押给质权人的股权折价或拍卖、变卖该股权的价款优先受偿的权利。Pledge: shall refer to the security interest granted by Pledgors to Pledgee pursuant to Article 2 of this Agreement, i.e., the right of Pledgee to becompensated on a preferential basis with the conversion, auction or sales price of the Equity Interest.1.2股权：指出质人现在和将来（通过增资和/或转股）合法持有的其在丙方的全部股权权益。Equity Interest: shall refer to all of the equity interest in Party C lawfully, held now and to be held (through capital increase and/or equity transfer)hereafter by Pledgors.1.3质押期限：指本协议第3条规定的期间。Term of Pledge: shall refer to the term set forth in Article 3 of this Agreement.1.4业务合作协议：指丙方与质权人于本协议日签订的独家业务合作协议。Business Cooperation Agreement: shall refer to the Exclusive Business Cooperation Agreement executed by and between Party C and Pledgee on thedate of this Agreement.1.5违约事件：指本协议第7条所列任何情况。Event of Default: shall refer to any of the circumstances set forth in Article 7 of this Agreement.1.6违约通知：指质权人根据本协议发出的宣布违约事件的通知。Notice of Default: shall refer to the notice issued by Pledgee in accordance with this Agreement declaring an Event of Default.3秘密文件 Strictly Confidential2.质权The Pledge作为丙方按时和全额支付业务合作协议项下质权人应得的任何或全部的款项，包括但不限于业务合作协议中规定的咨询和服务费的担保（无论该等费用的到期应付是由于到期日的到来、提前收款的要求或其它原因），以及丙方充分履行其在业务合作协议项下其他所有义务（丙方按时和全额支付业务合作协议项下甲方应得的任何或全部的款项及丙方在业务合作协议项下其他所有义务，以下统称为“被担保债务”）的担保，出质人特此将其现有或将拥有的丙方的全部股权权益质押给质权人。As collateral security for the timely and complete payment and performance when due (whether at stated maturity, by acceleration or otherwise) of any or all ofthe payments due (the “all payments in pledge”) by Party C, including without limitation the consulting and services fees payable to the Pledgee under theBusiness Cooperation Agreement, Pledgors hereby pledge to Pledgee a first security interest in all of Pledgors’ right, title and interest, whether now owned orhereafter acquired by Pledgors, in the Equity Interest of Party C.3.质押期限Term of Pledge3.1本质权自本协议项下的股权出质在相应的工商行政管理机关登记之日起生效，质权有效期持续到业务合作协议下所有丙方欠付质权人的款项结清为止。出质人和丙方应（一）自本协议签署之日起3个工作日内，将本协议的质权登记在丙方股东名册上，并（二）自本协议签署之日起10个工作日内向相应的工商行政管理机关申请登记本协议项下的质权。各方共同确认，为办理股权质押工商登记手续，各方及丙方其他股东应按照丙方所在地工商行政管理部门要求的形式签署、真实反映本协议项下质权信息的《股权质押合同》（以下简称“工商登记质押合同”）提交给工商管理机关，工商登记质押合同中未约定事项，仍以本协议约定为准。出质人和丙方应当按照中国法律法规和有关工商行政管理机关的各项要求，提交所有必要的文件并办理所有必要手续，保证质权在递交申请后尽快获得登记。如果出质人持有的丙方注册资本数额增加（不管是通过直接认缴丙方的增资还是从其他股东处受让股权），各方一致同意将采取一切必要的行动和签署一切必要的文件以按照登记机关的要求完成质权的变更登记，以确保本协议项下的质权的持续有效。The Pledge shall become effective on such date when the pledge of the Equity Interest contemplated herein has been registered’ with relevantadministration for industry and commerce (the “AIC”). The Pledge shall be continuously valid until all payments due under the Business CooperationAgreement have been fulfilled by Party C. Pledgors and Party C shall (1) register the Pledge in the shareholders' register of Party C within 3 businessdays following the execution of this Agreement, and (2) submit an application to the AIC for the registration of the Pledge of the Equity Interestcontemplated herein within 10 business days following the execution of this Agreement. The parties covenant that for the purpose of registration of thePledge, the parties hereto and all other shareholders of Party C shall submit to the AIC the Equity Interest Pledge Contract in the form required by theAIC at the location of Party C which shall truly reflect the information of the Pledge hereunder (the “AIC Pledge Contract”). For matters not specified inthe AIC Pledge Contract, the parties shall be bound by the provisions of this Agreement. Pledgors and Party C shall submit all necessary documentsand complete all necessary procedures, as required by the PRC laws and regulations and the relevant AIC, to ensure that the Pledge of the EquityInterest shall be registered with the AIC as soon as possible after filing. In the event that the amount of registered capital held by Pledgors is increased(either by subscribing increased registered capital from Party C or acquiring equity interest from other shareholders), the Parties hereto agree that theyshall take any necessary action and execute any necessary document to complete the registration of change of Pledge according to the requirement ofAIC so that the Pledge in this Agreement remains effective.4秘密文件 Strictly Confidential3.2质押期限内，如丙方未按业务合作协议交付咨询服务费等费用，质权人有权但无义务按本协议的规定处分质权。During the Term of Pledge, in the event Party C fails to pay the exclusive consulting or service fees in accordance with the Business CooperationAgreement, Pledgee shall have the right, but not the obligation, to dispose of the Pledge in accordance with the provisions of this Agreement.4.质权凭证的保管Custody of Records for Equity Interest subject to Pledge4.1在本协议规定的质押期限内，出质人应将其在丙方的股权出资证明书及记载质权的股东名册交付质权人保管。出质人应在本协议签订之日起一周内将上述股权出资证明书及股东名册交付给质权人。质权人将在本协议规定的全部质押期间一直保管这些项目。During the Term of Pledge set forth in this Agreement, Pledgors shall deliver to Pledgee's custody the capital contribution certificate for the EquityInterest and the shareholders' register containing the Pledge within one week from the execution of this Agreement. Pledgee shall have custody of suchitems during the entire Term of Pledge set forth in this Agreement.4.2在质押期限内，股权所产生的红利应当无条件归质权人所有。Dividends generated by the Equity Interest shall be unconditionally owned by the Pledgee during the Term of Pledge.5秘密文件 Strictly Confidential5.出质人的声明和保证Representations and Warranties of Pledgors5.1出质人是股权唯一的合法所有人。Pledgors are the sole legal and beneficial owners of the Equity Interest.5.2质权人有权以本协议规定的方式处分并转让股权。Pledgee shall have the right to dispose of and transfer the Equity Interest in accordance with the provisions set forth in this Agreement.5.3除本质权之外，出质人未在股权上设置任何其他质押权利或其他担保权益。Except for the Pledge, Pledgors have not placed any security interest or other encumbrance on the Equity Interest.6.出质人的承诺和确认Covenants and Further Agreements of Pledgors6.1在本协议存续期间，所有出质人向质权人承诺，出质人将：All of the Pledgors hereby covenant to the Pledgee, that during the term of this Agreement, Pledgors shall:6.1.1除履行由出质人与质权人、丙方于本协议签署日签订的《独家购买权合同》外，未经质权人事先书面同意，不得转让股权，不得在股权上设立或允许存在任何担保或其他债务负担；not transfer the Equity Interest, place or permit the existence of any security interest or other encumbrance on the Equity Interest, without theprior written consent of Pledgee, except for the performance of the Exclusive Option Agreement executed by Pledgors, the Pledgee and Party Con the execution date of this Agreement;6秘密文件 Strictly Confidential6.1.2遵守并执行所有有关权利质押的法律、法规的规定，在收到有关主管机关就质权发出或制定的通知、指令或建议时，于五日内向质权人出示上述通知、指令或建议，同时遵守上述通知、指令或建议，或按照质权人的合理要求或经质权人同意就上述事宜提出反对意见和陈述；comply with the provisions of all laws and regulations applicable to the pledge of rights, and within 5 days of receipt of any notice, order orrecommendation issued or prepared by relevant competent authorities regarding the Pledge, shall present the aforementioned notice, order orrecommendation to Pledgee, and shall comply with the aforementioned notice, order or recommendation or submit objections andrepresentations with respect to the aforementioned matters upon Pledgee's reasonable request or upon consent of Pledgee;6.1.3将任何可能导致对出质人股权或其任何部分的权利产生影响的事件或收到的通知，以及可能改变出质人在本协议中的任何保证、义务或对出质人履行其在本协议中义务可能产生影响的任何事件或收到的通知及时通知质权人。promptly notify Pledgee of any event or notice received by Pledgors that may have an impact on Pledgee's rights to the Equity Interest or anyportion thereof, as well as any event or notice received by Pledgors that may have an impact on any guarantees and other obligations ofPledgors arising out of this Agreement.6.2出质人同意，质权人按本协议条款取得的对质权享有的权利，不应受到出质人或出质人的继承人或出质人之委托人或任何其他人通过法律程序的中断或妨害。Pledgors agree that the rights acquired by Pledgee in accordance with this Agreement with respect to the Pledge shall not be interrupted or harmed byPledgors or any heirs or representatives of Pledgors or any other persons through any legal proceedings.7秘密文件 Strictly Confidential6.3出质人向质权人保证，为保护或完善本协议对偿付业务合作协议项下被担保债务的担保，出质人将诚实签署、并促使其他与质权有利害关系的当事人签署质权人所要求的所有的权利证书、契约和/或履行并促使其他有利害关系的当事人履行质权人所要求的行为，并为本协议赋予质权人之权利、授权的行使提供便利，与质权人或其指定的人(自然人/法人)签署所有的有关股权所有权的文件，并在合理期间内向质权人提供其认为需要的所有的有关质权的通知、命令及决定。To protect or perfect the security interest granted by this Agreement for payment of all payment in pledge under the Business Cooperation Agreement,Pledgors hereby undertake to execute in good faith and to cause other parties who have an interest in the Pledge to execute all certificates, agreements,deeds and/or covenants required by Pledgee. Pledgors also undertake to perform and to cause other parties who have an interest in the Pledge toperform actions required by Pledgee, to facilitate the exercise by Pledgee of its rights and authority granted thereto by this Agreement, and to enter intoall relevant documents regarding ownership of Equity Interest with Pledgee or designee(s) of Pledgee (natural persons/legal persons). Pledgorsundertake to provide Pledgee within a reasonable time with all notices, orders and decisions regarding the Pledge that are required by Pledgee.6.4出质人向质权人保证，出质人将遵守、履行本协议项下所有的保证、承诺、协议、陈述及条件。如出质人不履行或不完全履行其保证、承诺、协议、陈述及条件，出质人应赔偿质权人由此遭受的一切损失。Pledgors hereby undertake to comply with and perform all guarantees, promises, agreements, representations and conditions under this Agreement. Inthe event of failure the whole or partial performance of its guarantees, promises, agreements, representations and conditions, Pledgors shall indemnifyPledgee for all losses resulting therefrom.8秘密文件 Strictly Confidential7.违约事件Event of Default7.1下列事项均被视为违约事件：The following circumstances shall be deemed Event of Default:7.1.1丙方未能按期、完整履行任何业务合作协议项下责任，包括但不限于丙方未能按期足额支付业务合作协议项下的应付的被担保债务或有违反该协议其他义务的行为；Party C fails to fully and timely fulfill any liabilities under the Business Cooperation Agreement, including without limitation failure to pay infull any of the all payment in pledge payable under the Business Cooperation Agreement or breaches any other obligations of Party Cthereunder;7.1.2出质人或丙方实质违反本协议的任何条款；Pledgors or Party C have committed a material breach of any provisions of this Agreement;7.1.3除本协议第6.1.1条的约定外，出质人舍弃出质的股权或未获得质权人书面同意而擅自转让或意图转让出质的股权；和Except as expressly stipulated in Section 6.1.1, Pledgors transfers or purports to transfer or abandons the Equity Interest pledged or assignsthe Equity Interest pledged without the written consent of Pledgee; and7.1.4丙方的继承人或代管人只能履行部分或拒绝履行业务合作协议项下的支付责任。The successor or custodian of Party C is capable of only partially perform or refuses to perform the payment obligations under the BusinessCooperation Agreement.9秘密文件 Strictly Confidential7.2如知道或发现本第7.1条所述的任何事项或可能导致上述事项的事件已经发生，出质人应立即以书面形式通知质权人。Upon notice or discovery of the occurrence of any circumstances or event that may lead to the aforementioned circumstances described in Section 7.1,Pledgors shall immediately notify Pledgee in writing accordingly.7.3除非第7.1部分下的违约事件在质权人向出质人发出要求其修补此违约行为通知后的二十（20）天之内已经按质权人要求获得救济，质权人在其后的任何时间，可向出质人发出书面违约通知，要求依据第8部分履行其处理股权的权利。Unless an Event of Default set forth in this Section 7.1 has been successfully resolved to Pledgee's satisfaction within twenty (20) days after the Pledgeedelivers a notice to the Pledgors requesting ratification of such Event of Default, Pledgee may issue a Notice of Default to Pledgors in writing at any timethereafter, demanding the Pledgors to immediately dispose of the Pledge in accordance with the provisions of Article 8 of this Agreement.8.质权的行使Exercise of Pledge8.1在被担保债务被全部清偿或履行前，未经质权人书面同意，出质人不得转让本质权和其拥有的丙方股权。Prior to the full payment of all payments in pledge, without the Pledgee's written consent, Pledgors shall not assign the Pledge or the Equity Interest inParty C.8.2在质权人行使其质押权利时，质权人可以向出质人发出书面违约通知。Pledgee may issue a Notice of Default to Pledgors when exercising the Pledge.10秘密文件 Strictly Confidential8.3在质权人行使其质押权利时，根据中国有关法律的规定，质权人有权按照法定程序处置质押股权。仅在中国法律允许的范围内，对于处置的所得，质权人无需给付出质人；除非中国法律另有规定，出质人特此放弃其可能有的能向质权人要求任何质押股权处置所得的权利；同样，出质人对质权人在该质押股权处置后的亏损也不承担任何义务。When the Pledgor exercises the pledge right, Pledgee is entitled to dispose of the Equity Interest pledged in accordance with applicable PRC laws. Onlyto the extent permitted under applicable PRC laws, Pledgee has no obligation to account to Pledgors for proceeds of disposition of the Equity Interest.Unless otherwise required by PRC laws, Pledgors hereby waive any rights it may have to demand any such accounting from Pledgee; Likewise, in suchcircumstance Pledgors shall have no obligation to Pledgee for any deficiency remaining after such disposition of the Equity Interest pledged.8.4质权人依照本协议处分质权时，出质人和丙方应予以必要的协助，以使质权人实现其质权。When Pledgee disposes of the Pledge in accordance with this Agreement, Pledgors and Party C shall provide necessary assistance to enable Pledgee toenforce the Pledge in accordance with this Agreement.9.转让Assignment9.1除非经质权人事先同意，出质人无权赠予或转让其在本协议项下的权利义务。Without Pledgee's prior written consent, Pledgors shall not have the right to assign or delegate its rights and obligations under this Agreement.11秘密文件 Strictly Confidential9.2本协议对出质人及其继任人和经许可的受让人均有约束力，并且对质权人及每一继任人和受让人有效。This Agreement shall be binding on Pledgors and their successors and permitted assigns, and shall be valid with respect to Pledgee and each of itssuccessors and assigns.9.3经出质人同意，质权人可以在任何时候将其在业务合作协议项下的所有或任何权利和义务转让给其指定的关联方（自然人/法人），在这种情况下，受让人应享有和承担本协议项下质权人享有和承担的权利和义务，如同其作为原协议方应享有和承担的一样。质权人转让业务合作协议项下的权利和义务时，应质权人要求，出质人应就此转让签署有关协议和/或文件。Upon the Pledgors’ agreement, Pledgee may assign any or all of its rights and obligations under the Business Cooperation Agreement to its designee(s)(natural/legal persons) at any time, in which case the assigns shall have the rights and obligations of Pledgee under this Agreement, as if it were theoriginal party to this Agreement. When the Pledgee assigns the rights and obligations under the Business Cooperation Agreement, upon Pledgee'srequest, Pledgors shall execute relevant agreements or other documents relating to such assignment.9.4因转让所导致的质权人变更后，应质权人要求，出质人应与新的质权人签订一份内容与本协议一致的新质押协议，并在相应的工商行政管理机关进行登记。In the event of a change in Pledgee due to an assignment, Pledgors shall, at the request of Pledgee, execute a new pledge agreement with the newpledgee on the same terms and conditions as this Agreement, and register the same with the relevant AIC.12秘密文件 Strictly Confidential9.5出质人应严格遵守本协议和各方单独或共同签署的其他有关协议的规定，包括独家购买权合同和对质权人的授权委托书，履行各协议项下的义务，并不进行任何足以影响协议的有效性和可强制执行性的作为/不作为。除非根据质权人的书面指示，出质人不得行使其对质押股权还留存的权利。Pledgors shall strictly abide by the provisions of this Agreement and other contracts jointly or separately executed by the Parties hereto or any of them,including the Exclusive Option Agreement and the Power of Attorney granted to Pledgee, perform the obligations hereunder and thereunder, and refrainfrom any action/omission that may affect the effectiveness and enforceability thereof. Any remaining rights of Pledgors with respect to the EquityInterest pledged hereunder shall not be exercised by Pledgors except in accordance with the written instructions of Pledgee.10.终止Termination在被担保债务被全部清偿或履行完毕之后，本质权人应在尽早合理可行的时间内办理或配合办理解除质押的手续，出质人与丙方应提供相应的配合与协助。Upon the full payment of all payments in pledge under the Business Cooperation Agreement a, Pledgor shall then, with the assistance of Party B and Party C,go through the procedures of cancellation of pledge rights at a reasonable time as soon as practicable.11.手续费及其他费用Handling Fees and Other Expenses一切与本协议有关的费用及实际开支，其中包括但不限于法律费用、工本费、印花税以及任何其他税收、费用等全部由丙方承担。All fees and out of pocket expenses relating to this Agreement, including but not limited to legal costs, costs of production, stamp tax and any other taxes andfees, shall be borne by Party C.13秘密文件 Strictly Confidential12.保密责任Confidentiality各方承认及确定有关本协议、本协议内容，以及彼此就准备或履行本协议而交换的任何口头或书面资料均被视为保密信息。各方应当对所有该等保密信息予以保密，而在未得到另一方书面同意前，不得向任何第三者披露任何保密信息，惟下列信息除外：(a)公众人士知悉或将会知悉的任何信息（惟并非由接受保密信息之一方擅自向公众披露）；(b)根据适用法律法规、股票交易规则、或政府部门或法院的命令而所需披露之任何信息；或(c)由任何一方就本协议所述交易而需向其股东、投资者、法律或财务顾问披露之信息，而该股东、法律或财务顾问亦需遵守与本条款相类似之保密责任。如任何一方工作人员或聘请机构的泄密均视为该方的泄密，需依本协议承担违约责任。无论本协议以任何理由终止，本条款仍然生效。The Parties acknowledge that the existence and the terms of this Agreement and any oral or written information exchanged between the Parties in connectionwith the preparation and performance this Agreement are regarded as confidential information. Each Party shall maintain confidentiality of all such confidentialinformation, and without obtaining the written consent of the other Party, it shall not disclose any relevant confidential information to any third parties, exceptfor the information that: (a) is or will be in the public domain (other than through the receiving Party’s unauthorized disclosure); (b) is under the obligation tobe disclosed pursuant to the applicable laws or regulations, rules of any stock exchange, or orders of the court or other government authorities; or (c) isrequired to be disclosed by any Party to its shareholders, investors, legal counsels or financial advisors regarding the transaction contemplated hereunder,provided that such shareholders, investors, legal counsels or financial advisors shall be bound by the confidentiality obligations similar to those set forth inthis Section. Disclosure of any confidential information by the staff members or agencies hired by any Party shall be deemed disclosure of such confidentialinformation by such Party, which Party shall be held liable for breach of this Agreement. This Section shall survive the termination of this Agreement for anyreason.14秘密文件 Strictly Confidential13.适用法律和争议的解决Governing Law and Resolution of Disputes13.1本协议的订立、效力、解释、履行、修改和终止以及争议的解决均适用中国法律。The execution, effectiveness, construction, performance, amendment and termination of this Agreement and the resolution of disputes hereunder shallbe governed by the laws of China.13.2因解释和履行本协议而发生的任何争议，本协议各方应首先通过友好协商的方式加以解决。如果在一方向其他方发出要求协商解决的书面通知后30天之内争议仍然得不到解决，则任何一方均可将有关争议提交给中国国际经济贸易仲裁委员会，由该会按照其仲裁规则仲裁解决。仲裁应在北京进行，使用之语言为中文。仲裁裁决是终局性的，对各方均有约束力。In the event of any dispute with respect to the construction and performance of this Agreement, the Parties shall first resolve the dispute throughfriendly negotiations. In the event the Parties fail to reach an agreement on the dispute within 30 days after either Party's request to the other Parties forresolution of the dispute through negotiations, either Party may submit the relevant dispute to the China International Economic and Trade ArbitrationCommission for arbitration, in accordance with its Arbitration Rules. The arbitration shall be conducted in Beijing, and the language used in arbitrationshall be Chinese. The arbitration award shall be final and binding on all Parties.13.3因解释和履行本协议而发生任何争议或任何争议正在进行仲裁时，除争议的事项外，本协议各方仍应继续行使各自在本协议项下的其他权利并履行各自在本协议项下的其他义务。Upon the occurrence of any disputes arising from the construction and performance of this Agreement or during the pending arbitration of any dispute,except for the matters under dispute, the Parties to this Agreement shall continue to exercise their respective rights under this Agreement and performtheir respective obligations under this Agreement.15秘密文件 Strictly Confidential14.通知Notices14.1本协议项下要求或发出的所有通知和其他通信应通过专人递送、挂号邮寄、邮资预付或商业快递服务或传真的方式发到该方下列地址。每一通知还应再以电子邮件送达。该等通知视为有效送达的日期按如下方式确定：All notices and other communications required or permitted to be given pursuant to this Agreement shall be delivered personally or sent by registeredmail, postage prepaid, by a commercial courier service or by facsimile transmission to the address of such party set forth below. A confirmation copy ofeach notice shall also be sent by Email. The dates on which notices shall be deemed to have been effectively given shall be determined as follows:14.1.1通知如果是以专人递送、快递服务或挂号邮寄、邮资预付发出的，则以于设定为通知的地址在接收或拒收之日为有效送达日。Notices given by personal delivery, by courier service or by registered mail, postage prepaid, shall be deemed effectively given on the date ofreceipt or refusal at the address specified for notices.14.1.2通知如果是以传真发出的，则以成功传送之日为有效送达日（应以自动生成的传送确认信息为证）。Notices given by facsimile transmission shall be deemed effectively given on the date of successful transmission (as evidenced by anautomatically generated confirmation of transmission).16秘密文件 Strictly Confidential14.2为通知的目的，各方地址如下：For the purpose of notices, the addresses of the Parties are as follows:甲方：中传天下信息科技（深圳）有限公司Party A: Zhongchuan Tianxia Information Technology (Shenzhen) Co., Ltd.地址：深圳市南山区高新中三道2号深圳软件园一期五栋401AAddress: 401A, Building 5, Phase 1, Shenzhen Software Park, No.2 Gaoxin Zhongsan Road, Nanshan District, Shenzhen.收件人：洪婷Attn: Hong Ting乙方：Party B:a)宋雪松Song Xuesong地址：125.Expenses, including legal fees, incurred by a director in defending any legal, administrative or investigative proceedings may be paid by the Company inadvance of the final disposition of such proceedings upon receipt of an undertaking by or on behalf of the director to repay the amount if it shall ultimatelybe determined that the director is not entitled to be indemnified by the Company in accordance with these Articles.126.Expenses, including legal fees, incurred by a former director in defending any legal, administrative or investigative proceedings may be paid by theCompany in advance of the final disposition of such proceedings upon receipt of an undertaking by or on behalf of the former director to repay the amountif it shall ultimately be determined that the director is not entitled to be indemnified by the Company in accordance with these Articles.127.The indemnification and advancement of expenses provided by, or granted pursuant to, these Articles is not exclusive of any other rights to which theperson seeking indemnification of advancement of expenses may be entitled under any agreement, resolution of members, resolution of disinteresteddirectors or otherwise, both as to acting in the person’s official capacity and as to acting in another capacity while serving as a director of the Company.128.If a person to be indemnified has been successful in defence of any proceedings referred to above the person is entitled to be indemnified against allexpenses, including legal fees, and against all judgments, fines and amounts paid in settlement and reasonably incurred by the person in connection withthe proceedings.129.The Company may purchase and maintain insurance in relation to any person who is or was a director, an officer or a liquidator of the Company, or who atthe request of the Company is or was serving as a director, an officer or a liquidator of, or in any other capacity is or was acting for, another body corporateor a partnership, joint venture, trust or other enterprise, against any liability asserted against the person and incurred by the person in that capacity,whether or not the Company has or would have had the power to indemnify the person against the liability as provided in these Articles.SEAL130.The Company shall have a Seal and may have more than one Seal. References herein to the Seal shall be references to every Seal which shall have beenduly adopted by resolution of directors. The directors shall provide for the safe custody of the Seal and for an imprint thereof to be kept at the office of theregistered agent of the Company. Except as otherwise expressly provided herein, the Seal when affixed to any written instrument, shall be witnessed andattested to by the signature of a director or any other person so authorized from time to time by resolution of directors. Such authorization may be before orafter the Seal is affixed, may be general or specific and may refer to any number of sealings. The Directors may provide for a facsimile of the Seal and of thesignature of any director or authorized person which may be reproduced by printing or other means on any instrument and it shall have the same force andvalidity as if the Seal had been affixed to such instrument and the same had been signed as hereinbefore described.21DISTRIBUTIONS131.The directors of the Company may by resolution authorise a distribution by the Company at any time and of any amount and to any members they think fitif they are satisfied on reasonable grounds that immediately after the distribution;a.the value of the Company’s assets will exceed its liabilities, andb.the Company will be able to pay its debts as they fall due.132.A resolution of the directors passed under the preceding Article shall contain a statement that, in the opinion of the directors, immediately after thedistribution the value of the Company’s assets will exceed its liabilities, and the Company will be able to pay its debts as they fall due.133.If, after a distribution is authorised and before it is made, the directors cease to be satisfied on reasonable grounds that the Company will, immediately afterthe distribution satisfy the solvency test, any distribution made by the Company is deemed not to have been authorised.134.If, by virtue of the preceding Article, a distribution is deemed not to have been authorised, a director who;a.ceased, after authorisation but before the making of the distribution, to be satisfied on reasonable grounds for believing that the company wouldsatisfy the solvency test immediately after the distribution is made; andb.failed to take reasonable steps to prevent the distribution being made;is personally liable to the company to repay to the company so much of the distribution as is not able to be recovered from members.135.A distribution made to a member at a time when the company did not, immediately after the distribution, satisfy the solvency test may be recovered by thecompany from the member unless;a.the member received the distribution in good faith and without knowledge of the company’s failure to satisfy the solvency test;b.the member has altered his position in reliance on the validity of the distribution; andc.it would be unfair to require repayment in full or at all.DISTRIBUTIONS BY WAY OF DIVIDEND136.The Company may by a resolution of directors declare a distribution by way of dividend and pay such distribution in money, shares or other property. Inthe event that distributions by way of dividend are paid in specie the directors shall have responsibility for establishing and recording in the resolution ofdirectors authorizing the distribution by way of dividend, a fair and proper value for the assets to be so distributed.137.The directors may from time to time pay to the members such interim distributions by way of dividend as appear to the directors to be justified by theprofits of the Company.138.The directors may, before declaring any distribution by way of dividend, set aside out of the profits of the Company such sum as they think proper as areserve fund, and may invest the sum so set aside as a reserve fund upon such securities as they may select.139.Notice of any distribution by way of dividend that may have been declared shall be given to each member in the manner hereinafter mentioned and alldistributions by way of dividend unclaimed for 3 years after having been declared may be forfeited by resolution of directors for the benefit of theCompany.140.No distribution by way of dividend shall bear interest as against the Company and no distribution by way of dividend shall be paid on treasury shares orshares held by another company of which the Company holds, directly or indirectly, shares having more than 50 percent of the vote in electing directors.22141.A share issued as a distribution by way of dividend by the Company shall be treated for all purposes as having been issued for money equal to the valuedetermined by resolution of the directors. In the absence of fraud the decision of the directors as to the value of the share is conclusive unless a questionof law is involved.142.A division of the issued and outstanding shares of a class or series of shares into a larger number of shares of the same class or series having aproportionately smaller par value does not constitute a distribution by way of dividend of shares.ACCOUNTS AND AUDIT143.The Company may by resolution of members call for the directors to prepare periodically a profit and loss account and a balance sheet. The profit and lossaccount and balance sheet shall be drawn up so as to give respectively a true and fair view of the profit and loss of the Company for the financial periodand a true and fair view of the state of affairs of the Company as at the end of the financial period.144.The Company may by resolution of members call for the accounts to be examined by auditors.145.Subject to the rules of the Designated Stock Exchange, the first auditors shall be appointed by resolution of directors; subsequent auditors shall beappointed by the Audit Committee and shall hold office until the Audit Committee appoint another independent auditor.146.Subject to the rules of the Designated Stock Exchange, the remuneration of the auditors of the Company shall be fixed by the Audit Committee.147.The auditors shall examine each profit and loss account and balance sheet required to be served on every member of the Company or laid before a meetingof the members of the Company and shall state in a written report whether or nota.in their opinion the profit and loss account and balance sheet give a true and fair view respectively of the profit and loss for the period covered bythe accounts, and of the state of affairs of the Company at the end of that period; andb.all the information and explanations required by the auditors have been obtained.148.The report of the auditors shall be annexed to the accounts and shall be read at the meeting of members at which the accounts are laid before the Companyor shall be served on the members.149.Every auditor of the Company shall have a right of access at all times to the books of account and vouchers of the Company, and shall be entitled to requirefrom the directors and officers of the Company such information and explanations as he thinks necessary for the performance of the duties of the auditors.150.The auditors of the Company shall be entitled to receive notice of, and to attend any meetings of members of the Company at which the Company’s profitand loss account and balance sheet are to be presented.NOTICES151.Any notice, information or written statement to be given by the Company to members may be served in any way by which it can reasonably be expected toreach each member or by mail addressed to each member at the address shown in the share register.152.Any summons, notice, order, document, process, information or written statement to be served on the Company may be served by leaving it, or by sendingit by registered mail addressed to the Company, at its registered office, or by leaving it with, or by sending it by registered mail to, the registered agent ofthe Company.153.Service of any summons, notice, order, document, process, information or written statement to be served on the Company may be proved by showing thatthe summons, notice, order, document, process, information or written statement was delivered to the registered office or the registered agent of theCompany or that it was mailed in such time as to admit to its being delivered to the registered office or the registered agent of the Company in the normalcourse of delivery within the period prescribed for service and was correctly addressed and the postage was prepaid.23PENSION AND SUPERANNUATION FUNDS154.The directors may establish and maintain or procure the establishment and maintenance of any noncontributory or contributory pension orsuperannuation funds for the benefit of, and give or procure the giving of donations, gratuities, pensions, allowances or emoluments to, any persons whoare or were at any time in the employment or service of the Company or any company which is a subsidiary of the Company or is allied to or associated withthe Company or with any such subsidiary, or who are or were at any time directors or officers of the Company or of any such other company as aforesaid orwho hold or held any salaried employment or office in the Company or such other company, or any persons in whose welfare the Company or any suchother company as aforesaid is or has been at any time interested, and to the wives, widows, families and dependents of any such person, and may makepayments for or towards the insurance of any such persons as aforesaid, and may do any of the matters aforesaid either alone or in conjunction with anysuch other company as aforesaid. Subject always to the proposal being approved by resolution of members, a director holding any such employment oroffice shall be entitled to participate in and retain for his own benefit any such donation, gratuity, pension allowance or emolument.VOLUNTARY WINDING UP AND DISSOLUTION155.The Company may voluntarily commence to wind up and dissolve by a resolution of members but if the Company has never issued shares it mayvoluntarily commence to wind up and dissolve by resolution of directors.CONTINUATION156.The Company may by resolution of members or by a resolution passed unanimously by all directors of the Company continue as a company incorporatedunder the laws of a jurisdiction outside the British Virgin Islands in the manner provided under those laws.ARBITRATION157.Whenever any difference arises between the Company on the one hand and any of the members or their executors, administrators or assigns on the otherhand, touching the true intent and construction or the incidence or consequences of these Articles or of the Act, touching anything done or executed,omitted or suffered in pursuance of the Act or touching any breach or alleged breach or otherwise relating to the premises or to these Articles, or to anyAct or Ordinance affecting the Company or to any of the affairs of the Company such difference shall, unless the parties agree to refer the same to a singlearbitrator, be referred to 2 arbitrators one to be chosen by each of the parties to the difference and the arbitrators shall before entering on the referenceappoint an umpire.158.If either party to the reference makes default in appointing an arbitrator either originally or by way of substitution (in the event that an appointed arbitratorshall die, be incapable of acting or refuse to act) for 10 days after the other party has given him notice to appoint the same, such other party may appoint anarbitrator to act in the place of the arbitrator of the defaulting party.We, Portcullis TrustNet (BVI) Limited of Portcullis TrustNet Chambers, P.O. Box 3444, Road Town, Tortola, British Virgin Islands for the purpose of incorporating aBVI Business Company under the laws of the British Virgin Islands hereby sign these Articles of Association the 27th day of October, 2009.Incorporator/s/ Nicole WheatleyPortcullis TrustNet (BVI) LimitedPortcullis TrustNet ChambersP.O. Box 3444Road Town, TortolaBritish Virgin Islands(Sgd. Nicole Wheatley)24EX4.15 3 f20f2017ex415_luokung.htm EXCLUSIVE BUSINESS COOPERATION AGREEMENT BY AND BETWEEN ZHONGCHUAN TIANXIA INFORMATIONTECHNOLOGY (SHENZHEN) CO., LTD., AND BEIJING MOBILE VISION TECHNOLOGY CO., LTD., DATED AUGUST 31, 2015Exhibit 4.15独家业务合作协议Exclusive Business Cooperation Agreement本独家业务合作协议（下称“本协议”）由以下双方于年月日在中华人民共和国（下称“中国”）北京市签署。This Exclusive Business Cooperation Agreement (this “Agreement”) is made and entered into by and between the following parties on in Beijing, thePeople’s Republic of China (“China” or the “PRC”).甲方：中传天下信息科技（深圳）有限公司Party A: Zhongchuan Tianxia Information Technology (Shenzhen) Co., Ltd.地址：深圳市南山区高新中三道2号深圳软件园一期五栋401A Address: 401A, Building 5, Phase 1, Shenzhen Software Park, No.2 Gaoxin Zhongsan Road, Nanshan District, Shenzhen统一社会信用代码：91440300565701058R Uniform Social Credit Code: 91440300565701058R乙方：北京中传视讯科技有限公司Party B: Beijing Mobile Vision Technology Co., Ltd.地址：北京市朝阳区光华路9号SOHO3QLAB32Address: LAB32, SOHO3Q, No 9, Guanghua Road, Chaoyang District, Beijing统一社会信用代码：9111010576215249XMUniform Social Credit Code: 9111010576215249XM甲方和乙方以下各称为“一方”，统称为“双方”。Each of Party A and Party B shall be hereinafter referred to as a “Party” respectively, and as “Parties” collectively.1秘密文件Strictly Confidential鉴于：Whereas,1.甲方是一家在中国注册的外商独资企业，拥有丰富的技术研发和产业化推广相关的管理和投资经验，并提供相关的技术支持和咨询服务；Party A is a whollyforeignowned enterprise established in China, which has rich experience in technology research development and industrializationpromotion management and investment, and provides relevant technical support and consulting services;2.乙方是一家在中国成立的有限责任公司，经中国有关政府部门批准依法主要从事手机视频技术开发、内容制作及市场推广；Party B is a limited company in China, mainly engages in mobile video technology research, development, content creation, sale and related industrialpromotion as approved by the relevant governmental authorities in China;3.甲方同意利用其技术、人员和信息优势，在本协议期间向乙方提供有关手机视频技术开发、内容制作及市场推广以及未来扩大业务规模和业务范围时乙方所需的技术支持、技术咨询等相关服务，乙方同意接受甲方或其指定方按本协议条款的规定提供的各种服务。Party A is willing to provide Party B with technology supports and technology consulting services in connection with mobile video technology research,development, content creation, sale and related industrial promotion and such services in connection with Party B’s extension of business scale orbroadening of businesses during the term of this Agreement, utilizing its advantages in technology, human resources, and information, and Party B iswilling to accept such services provided by Party A or Party A's designee(s), each on the terms set forth herein.2秘密文件Strictly Confidential据此，甲方和乙方经协商一致，达成如下协议：Now, therefore, through mutual discussion, the Parties have reached the following agreements:1.服务提供Services Provided by Party A1.1按照本协议条款和条件，乙方在此委任甲方在本协议期间作为乙方的独家服务提供者向乙方提供全面的和手机视频技术开发、内容制作及市场推广相关以及未来扩大业务规模和业务范围时乙方所需的技术支持、业务支持和相关咨询服务，具体内容包括但不限于以下内容：Party B hereby appoints Party A as Party B's exclusive services provider to provide Party B with complete technical support, business supportand related consulting services in connection with mobile video technology research, development, content creation, sale and related industrialpromotion and such services in connection with Party B’s extension of business scale or broadening of businesses during the term of thisAgreement, in accordance with the terms and conditions of this Agreement, which may include but not limited to:1.1.1为乙方提供其手机视频技术开发、内容制作及市场推广业务所需的一切服务支持，为乙方提供相当于包括总经理、行政人员、管理人员、筹划部门、商业运营、人力资源、财务、会计以及与乙方业务相关的一切业务操作所需人员所能提供的服务内容；managing all aspects of Party B’s business of mobile video technology research, development, content creation, sale and relatedindustrial promotion. In this capacity, Party A will procure or engage for Party B the services of a general manager and other managementstaff, including but not limited to personnel responsible for all administration, operations, planning, business development, humanresources, finance, accounting and other operations related to the Business of Party B;3秘密文件Strictly Confidential1.1.2为乙方制定全部的商业计划、销售目标，并为优化执行该等商业计划设计和建立相应的系统及操作程序；developing all business plans and sales projections of Party B, and for developing and establishing systems and procedures for optimumexecution of the business plans;1.1.3为乙方申请手机视频技术及内容制作相关专利提供咨询服务和支持；consulting services and support in connection with Party B’s applying for mobile video technology related patents and content creation;1.1.4为乙方手机视频技术产业化的发展方向、规模、品牌提升提供咨询服务；consulting services in connection with the development directions, size and business brands promotion of Party B’s mobile videotechnology industrialization;4秘密文件Strictly Confidential1.1.5为乙方提供与业务相关的办公、生产和销售服务，为乙方租赁场所，建立业务相关的系统和程序，满足乙方的其他要求；procuring or obtaining for Party B all office, production and distribution services related to the Business. It shall procure or obtainappropriate leases, establish systems and procedures needed to operate the business, fulfill orders for services;1.1.6尽最大努力为乙方建立手机视频技术销售市场，根据甲方为乙方制定的商业计划及销售目标代表乙方获取客户订单，同时为乙方提供与业务相关的客户服务，建立向客户开具票据的程序和与会计相关的托收服务。using its best efforts to establish mobile video technology related marketing and other structures to obtain orders for services &products from customers on behalf of Party B in accordance with Party B’s business plans, sales projections and objectives (asdeveloped by Party A) and procure or obtain customer services required in connection with the Business. It shall also establishprocedures for invoicing customers, and establish collection services with respect to accounts;1.1.7就乙方的劳动用工方面提供咨询服务和支持，包括但不限于，组织实施对乙方业务人员、行政人员、管理人员等人员进行培训和考核，协助建立健全的人力资源管理制度和实现人力资源的良好配置；consulting services and support regarding labor system of Party B, including but without limitation to labor training and evaluation ofsales person, administrative staff and management person etc. and establishment of human resources management system to well;5秘密文件Strictly Confidential1.1.8提供乙方需要的客户数据统计、分析及相关数据库的建设和维护等咨询服务；providing Party B with compile and analysis of client data and consulting services of establishment and maintenance of data base;1.1.9提供乙方需要的软件和相关技术支持服务；providing software Party B requires and other technical support;1.1.10接受乙方委托，对乙方的手机视频技术研发和产业化推广业务经营进行指导和管理；guiding and management on Party B’s business of mobile video technology research and development and related industrial promotionoperation according to Party B’s commission;1.1.11当乙方业务规模发展或业务范围扩大需要时，购买乙方业务经营需要的设备；in the event of the demand of Party B’s development of business scale or broadening of businesses, purchase the equipments which itneeds for the operation of its business;1.1.12当乙方业务规模发展或业务范围扩大需要时，完成乙方项目中的全部或部分工作；in the event of the demand of Party B’s development of business scale or broadening of businesses, complete the work of Party B’sproject in whole or in party;6秘密文件Strictly Confidential1.1.13当乙方业务规模发展或业务范围扩大需要时，开发新技术；in the event of the demand of Party B’s development of business scale or broadening of businesses, develop new technology;1.1.14乙方委托甲方，且甲方接受委托提供的其他服务。other services Party B appoints Party A to provide and Party A agrees to provide.1.2乙方接受甲方的咨询和服务。乙方进一步同意，除非经甲方事先书面同意，在本协议期间，就本协议约定的服务或其他事宜，乙方不得直接或间接地从任何第三方获得任何与本协议相同或类似的咨询和/或服务，并不得与任何第三方就本协议所述事项建立任何类似的合作关系。双方同意，甲方可以指定其他方（该被指定方可以与乙方签署本协议第1.3条描述的某些协议）为乙方提供本协议约定的服务和/或支持。Party B agrees to accept all the consultations and services provided by Party A. Party B further agrees that unless with Party A's prior writtenconsent, during the term of this Agreement, Party B shall not directly or indirectly accept the same or any similar consultations and/or servicesprovided by any third party and shall not establish similar corporation relationship with any third party regarding the matters contemplated by thisAgreement. Party A may appoint other parties, who may enter into certain agreements described in Section 1.3 with Party B, to provide Party Bwith the consultations and/or services under this Agreement.7秘密文件Strictly Confidential1.3服务的提供方式Service Providing Methodology1.3.1双方同意在本协议有效期内，视情况而定，乙方可以与甲方或甲方指定的其他方进一步签订技术服务协议和/或咨询服务协议，对各项业务培训、技术服务、咨询服务的具体内容、方式、人员、收费等进行约定。Parties agree that during the term of this Agreement, where necessary, Party B may enter into further technical service agreements and/orconsulting service agreements with Party A or any other party designated by Party A, which shall provide the specific contents, manner,personnel, and fees for the specific technical services and consulting services.1.3.2为更好地履行本协议，双方同意，在甲方认为必要时，乙方应在本协议有效期内与甲方或甲方指定的其他方根据业务进展需要随时签署协议，由甲方或其指定方向乙方提供服务。To fulfill this Agreement, Parties agree that during the term of this Agreement, where Party A deems necessary, Party B shall enter intoagreements with Party A or any other party designated by Party A which shall set forth that Party A or any other party designated byParty A provide services to Party B based on the needs of the business of Party B.8秘密文件Strictly Confidential2.服务的价格和支付方式The Calculation and Payment of the Service Fees双方同意，就甲方提供的服务，乙方应向甲方支付服务费（“服务费”）。服务费不应低于乙方税后利润的80%。服务费应当按季支付；经甲方事先书面同意，服务费可以根据乙方的经营需要进行调整。Both Parties agree that, in consideration of the services provided by Party A, Party B shall pay Party A fees (the “Service Fees”), which shall not be lessthan 80% of Party B’s aftertax profits . The Service Fees shall be due and payable on a quarterly basis; upon the prior written consent by Party A, the rateof Service Fees may be adjusted pursuant to the operational needs of Party B.3.知识产权和保密条款Intellectual Property Rights and Confidentiality Clauses3.1在中国法律允许的范围内，甲方对履行本协议而产生或创造的任何权利、所有权、权益和所有知识产权包括但不限于著作权、专利权、专利申请权、软件、技术秘密、商业机密及其他均享有独占的和排他的权利和利益。乙方须签署所有适当的文件，采取所有适当的行动，递交所有的文件和/或申请，提供所有适当的协助，以及做出所有其他依据甲方的自行决定认为是必要的行为，以将任何对该等知识产权的所有权、权利和权益赋予甲方，和/或完善对甲方此等知识产权权利的保护。To the extent permitted under the PRC laws, Party A shall have exclusive and proprietary rights and interests in all rights, ownership, interests andintellectual properties arising out of or created during the performance of this Agreement, including but not limited to copyrights, patents, patentapplications, software, technical secrets, trade secrets and others. Party B shall execute all appropriate documents, take all appropriate actions,submit all filings and/or applications, render all appropriate assistance and otherwise conduct whatever is necessary deemed as by Party A in itssole discretion for the purposes of vesting any ownership, right or interest of any such intellectual property rights in Party A, and/or perfectingthe protections for any such intellectual property rights in Party A.9秘密文件Strictly Confidential3.2双方承认及确定有关本协议、本协议内容，以及彼此就准备或履行本协议而交换的任何口头或书面资料均被视为保密信息。双方应当对所有该等保密信息予以保密，而在未得到另一方书面同意前，不得向任何第三者披露任何保密信息，惟下列信息除外：(a)公众人士知悉或将会知悉的任何信息（惟并非由接受保密信息之一方擅自向公众披露）；(b)根据适用法律法规、股票交易规则、或政府部门或法院的命令而所需披露之任何信息；或(c)由任何一方就本协议所述交易而需向其股东、投资者、法律或财务顾问披露之信息，而该股东、法律或财务顾问亦需遵守与本条款相类似之保密责任。如任何一方工作人员或聘请机构的泄密均视为该方的泄密，需依本协议承担违约责任。无论本协议以任何理由终止，本条款仍然生效。The Parties acknowledge that the existence and the terms of this Agreement and any oral or written information exchanged between the Parties inconnection with the preparation and performance this Agreement are regarded as confidential information. Each Party shall maintainconfidentiality of all such confidential information, and without obtaining the written consent of the other Party, it shall not disclose any relevantconfidential information to any third parties, except for the information that: (a) is or will be in the public domain (other than through the receivingParty’s unauthorized disclosure); (b) is under the obligation to be disclosed pursuant to the applicable laws or regulations, rules of any stockexchange, or orders of the court or other government authorities; or (c) is required to be disclosed by any Party to its shareholders, investors,legal counsels or financial advisors regarding the transaction contemplated hereunder, provided that such shareholders, investors, legal counselsor financial advisors shall be bound by the confidentiality obligations similar to those set forth in this Section. Disclosure of any confidentialinformation by the staff members or agencies hired by any Party shall be deemed disclosure of such confidential information by such Party, whichParty shall be held liable for breach of this Agreement. This Section shall survive the termination of this Agreement for any reason.3.3双方同意，不论本协议是否变更、解除或终止，本条款将持续有效。The Parties agree that this Section shall survive changes to, and rescission or termination of, this Agreement.4.陈述和保证Representations and Warranties4.1甲方陈述和保证如下：Party A hereby represents and warrants as follows:4.1.1甲方是按照中国法律合法注册并有效存续的外商独资企业。Party A is a whollyforeignowned enterprise legally registered and validly existing in accordance with the laws of China.10秘密文件Strictly Confidential4.1.2甲方已采取必要的公司行为，获得必要的授权，并取得第三方和政府部门的同意及批准（若需）以签署和履行本协议；甲方对本协议的签署和履行并不违反法律法规的明确规定。Party A has taken all necessary corporate actions, obtained all necessary authorization and the consent and approval from third partiesand government agencies (if any) for the execution and performance of this Agreement. Party A’s execution and performance of thisAgreement do not violate any explicit requirements under any law or regulation binding on Party A.4.1.3本协议构成对其合法、有效、有约束力并依本协议之条款对其强制执行的义务。This Agreement constitutes Party A's legal, valid and binding obligations, enforceable in accordance with its terms.4.2乙方陈述和保证如下：Party B hereby represents and warrants as follows:4.2.1乙方是按照中国法律合法登记且有效存续的有限责任公司，乙方根据政府部门的批准和许可从事手机视频技术开发、内容制作和产业化市场推广的经营。Party B is a limited company legally registered and validly existing in accordance with the laws of China, engages in mobile videotechnology research, development, content creation, sale and related industrial promotion pursuant to governmental approvals andpermits;11秘密文件Strictly Confidential4.2.2乙方已采取必要的行为，获得必要的授权，并取得第三方和政府部门的同意及批准（若需）以签署和履行本协议；乙方对本协议的签署和履行并不违反法律法规的明确规定。Party B has taken all necessary actions, obtained all necessary authorization and the consent and approval from third parties andgovernment agencies (if any) for the execution and performance of this Agreement. Party B’s execution and performance of thisAgreement do not violate any explicit requirements under any law or regulation binding on Party B.4.2.3本协议构成对其合法、有效、有约束力并依本协议之条款对其强制执行的义务。This Agreement constitutes Party B's legal, valid and binding obligations, and shall be enforceable against it.5.生效和有效期Effectiveness and Term5.1本协议于文首标明的协议日期签署并同时生效。除非依本协议或双方其他协议的约定而提前终止，本协议有效期为20年，但甲、乙双方应自本协议签署后，每3个月对本协议的内容做一次审查，以决定是否需要根据当时的情况对本协议作出相应修改和补充。This Agreement is executed on the date first above written and shall take effect as of such date. Unless earlier terminated in accordance with theprovisions of this Agreement or relevant agreements separately executed between the Parties, the term of this Agreement shall be 20 years. Afterthe execution of this Agreement, both Parties shall review this Agreement every 3 months to determine whether to amend or supplement theprovisions in this Agreement based on the actual circumstances at that time.12秘密文件Strictly Confidential5.2协议期满前，经甲方书面确认，本协议可以延期。延期的期限由甲方决定，乙方必须无条件地同意该延期。The term of this Agreement may be extended if confirmed in writing by Party A prior to the expiration thereof. The extended term shall bedetermined by Party A, and Party B shall accept such extended term unconditionally.6.终止Termination6.1除非依据本协议续期，本协议于到期之日终止。Unless renewed in accordance with the relevant terms of this Agreement, this Agreement shall be terminated upon the date of expiration hereof.6.2本协议有效期内，除非甲方对乙方有重大过失或存在欺诈行为，乙方不得提前终止本协议。尽管如此，甲方可在任何时候通过提前30天向乙方发出书面通知的方式终止本协议。During the term of this Agreement, unless Party A commits gross negligence, or a fraudulent act, against Party B, Party B shall not terminate thisAgreement prior to its expiration date. Nevertheless, Party A shall have the right to terminate this Agreement upon giving 30 days' prior writtennotice to Party B at any time.6.3在本协议终止之后，双方在第3、7和8条项下的权利和义务将继续有效。The rights and obligations of the Parties under Articles 3, 7 and 8 shall survive the termination of this Agreement.13秘密文件Strictly Confidential7.适用法律和争议解决Governing Law and Resolution of Disputes7.1本协议的订立、效力、解释、履行、修改和终止以及争议的解决适用中国的法律。The execution, effectiveness, construction, performance, amendment and termination of this Agreement and the resolution of disputes hereundershall be governed by the laws of China.7.2因解释和履行本协议而发生的任何争议，本协议双方应首先通过友好协商的方式加以解决。如果在一方向其他方发出要求协商解决的书面通知后30天之内争议仍然得不到解决，则任何一方均可将有关争议提交给中国国际经济贸易仲裁委员会，由该会按照其仲裁规则仲裁解决。仲裁应在北京进行，使用之语言为中文。仲裁裁决是终局性的，对各方均有约束力。In the event of any dispute with respect to the construction and performance of this Agreement, the Parties shall first resolve the dispute throughfriendly negotiations. In the event the Parties fail to reach an agreement on the dispute within 30 days after either Party's request to the otherParties for resolution of the dispute through negotiations, either Party may submit the relevant dispute to the China International Economic andTrade Arbitration Commission for arbitration, in accordance with its Arbitration Rules. The arbitration shall be conducted in Beijing, and thelanguage used in arbitration shall be Chinese. The arbitration award shall be final and binding on all Parties.14秘密文件Strictly Confidential7.3因解释和履行本协议而发生任何争议或任何争议正在进行仲裁时，除争议的事项外，本协议双方仍应继续行使各自在本协议项下的其他权利并履行各自在本协议项下的其他义务。Upon the occurrence of any disputes arising from the construction and performance of this Agreement or during the pending arbitration of anydispute, except for the matters under dispute, the Parties to this Agreement shall continue to exercise their respective rights under this Agreementand perform their respective obligations under this Agreement.8.补偿Indemnification就甲方根据本协议向乙方提供的咨询和服务内容所产生或引起的针对甲方的诉讼、请求或其他要求而招致的任何损失、损害、责任或费用都应由乙方补偿给甲方，以使甲方不受损害，除非该损失、损害、责任或费用是因甲方的重大过失或故意而产生的。Party B shall indemnify and hold harmless Party A from any losses, injuries, obligations or expenses caused by any lawsuit, claims or other demandsagainst Party A arising from or caused by the consultations and services provided by Party A to Party B pursuant this Agreement, except where suchlosses, injuries, obligations or expenses arise from the gross negligence or willful misconduct of Party A.15秘密文件Strictly Confidential9.通知Notices9.1本协议项下要求或发出的所有通知和其他通信应通过专人递送、挂号邮寄、邮资预付或快递服务或传真的方式发到该方下列地址。每一通知还应再以电子邮件送达。该等通知视为有效送达的日期按如下方式确定：All notices and other communications required or permitted to be given pursuant to this Agreement shall be delivered personally or sent byregistered mail, postage prepaid, by a courier service or by facsimile transmission to the address of such Party set forth below. A confirmationcopy of each notice shall also be sent by email. The dates on which notices shall be deemed to have been effectively given shall be determined asfollows:9.1.1通知如果是以专人递送、快递服务或挂号邮寄、邮资预付发出的，则以于设定为通知的地址在接收或拒收之日为有效送达日。Notices given by personal delivery, by courier service or by registered mail, postage prepaid, shall be deemed effectively given on thedate of receipt or refusal at the address specified for notices.9.1.2通知如果是以传真发出的，则以成功传送之日为有效送达日（应以自动生成的传送确认信息为证）。Notices given by facsimile transmission shall be deemed effectively given on the date of successful transmission (as evidenced by anautomatically generated confirmation of transmission).16秘密文件Strictly Confidential9.2为通知的目的，双方地址如下：For the purpose of notices, the addresses of the Parties are as follows:甲方：中传天下信息科技（深圳）有限公司Party A: Zhongchuan Tianxia Information Technology (Shenzhen) Co., Ltd.地址：深圳市南山区高新中三道2号深圳软件园一期五栋401AAddress:401A, Building 5, Phase 1, Shenzhen Software Park, No.2 Gaoxin Zhongsan Road, Nanshan District, Shenzhen收件人：洪婷Attn: Hong Ting乙方：北京中传视讯科技有限公司Party B: Beijing Mobile Vision Technology Co., Ltd地址：北京市朝阳区光华路9号SOHO3QLAB32Address: LAB32, SOHO3Q, No 9, Guanghua Road, Chaoyang District, Beijing.收件人：宋雪松Attn.: Song Xuesong9.3任何一方可按本条规定随时给另一方发出通知来改变其接收通知的地址。Any Party may at any time change its address for notices by a notice delivered to the other Party in accordance with the terms hereof.17秘密文件Strictly Confidential10.协议的转让Assignment10.1乙方不得将其在本协议项下的权利与义务转让给第三方，除非事先征得甲方的书面同意。Without Party A's prior written consent, Party B shall not assign its rights and obligations under this Agreement to any third party.10.2乙方在此同意，甲方可以在其需要时向其他第三方转让其在本协议项下的权利和义务，并在该等转让发生时甲方仅需向乙方发出书面通知，并且无需再就该等转让征得乙方的同意。Party B agrees that Party A may assign its obligations and rights under this Agreement to any third party upon a prior written notice to Party Bbut without the consent of Party B.11.协议的分割性Severability如果本协议有任何一条或多条规定根据任何法律或法规在任何方面被裁定为无效、不合法或不可执行，本协议其余规定的有效性、合法性或可执行性不应因此在任何方面受到影响或损害。双方应通过诚意磋商，争取以法律许可以及双方期望的最大限度内有效的规定取代那些无效、不合法或不可执行的规定，而该等有效的规定所产生的经济效果应尽可能与那些无效、不合法或不能强制执行的规定所产生的经济效果相似。In the event that one or several of the provisions of this Agreement are found to be invalid, illegal or unenforceable in any aspect in accordance with anylaws or regulations, the validity, legality or enforceability of the remaining provisions of this Agreement shall not be affected or compromised in any aspect.The Parties shall strive in good faith to replace such invalid, illegal or unenforceable provisions with effective provisions that accomplish to the greatestextent permitted by law and the intentions of the Parties, and the economic effect of such effective provisions shall be as close as possible to the economiceffect of those invalid, illegal or unenforceable provisions.18秘密文件Strictly Confidential12.协议的修改、补充Amendments and Supplements双方可以书面协议方式对本协议作出修改和补充。经过双方签署的有关本协议的修改协议和补充协议是本协议组成部分，具有与本协议同等的法律效力。Any amendments and supplements to this Agreement shall be in writing. The amendment agreements and supplementary agreements that have beensigned by the Parties and that relate to this Agreement shall be an integral part of this Agreement and shall have the same legal validity as this Agreement.13.语言和副本Language and Counterparts本协议以中文和英文书就，一式二份，甲乙双方各持一份，具有同等效力；中英文版本如有冲突，应以中文版为准。This Agreement is written in both Chinese and English language in two copies, each Party having one copy with equal legal validity; in case there is anyconflict between the Chinese version and the English version, the Chinese version shall prevail.本页其余部分刻意留为空白The Remainder of this page is intentionally left blank19秘密文件Strictly Confidential有鉴于此，双方已使得经其授权的代表于文首所述日期签署了本独家业务合作协议并即生效，以昭信守。IN WITNESS WHEREOF, the Parties have caused their authorized representatives to execute this Exclusive Business Cooperation Agreement as of thedate first above written.甲方：中传天下信息科技（深圳）有限公司（盖章）Party A: Zhongchuan Tianxia Information Technology (Shenzhen) Co., Ltd.(Seal)签字：By: /s/ Hong Ting 姓名：洪婷Name: Hong Ting职务：总经理Title: General Manager20秘密文件Strictly Confidential有鉴于此，双方已使得经其授权的代表于文首所述日期签署了本独家业务合作协议并即生效，以昭信守。IN WITNESS WHEREOF, the Parties have caused their authorized representatives to execute this Exclusive Business Cooperation Agreement as of thedate first above written. 乙方：北京中传视讯科技有限公司（盖章）Party B: Beijing Mobile Vision Technology Co., Ltd. (Seal)签字：By: /s/ Song Xuesong 姓名：宋雪松Name: Song Xuesong职务：董事长Title: Chairman of the Board21秘密文件Strictly ConfidentialEX4.16 4 f20f2017ex416_luokung.htm EXCLUSIVE OPTION AGREEMENT BY AND AMONG ZHONGCHUAN TIANXIA INFORMATION TECHNOLOGY(SHENZHEN) CO., LTD., XUESONG SONG, WEILI CHEN, PING WANG, DONGLAI LIU, AND BEIJING MOBILE VISION TECHNOLOGY CO., LTD., DATEDAUGUST 31, 2015Exhibit 4.16独家购买权协议Exclusive Option Agreement本独家购买权协议 (下称“本协议”) 由以下各方于年月日在中华人民共和国（下称“中国”）北京签订：This Exclusive Option Agreement (this “Agreement”) is executed by and among the Parties below as of in Beijing, the People’s Republic of China (the“China” or “PRC”):甲方：中传天下信息科技（深圳）有限公司，一家依照中国法律设立和存在的外商独资企业，地址为深圳市南山区高新中三道2号深圳软件园一期五栋401A；Party A:Zhongchuan Tianxia Information Technology (Shenzhen) Co., Ltd., a whollyforeignowned enterprise organized and existing under the laws of China,with its address at 401A, Building 5, Phase 1, Shenzhen Software Park, No.2 Gaoxin Zhongsan Road, Nanshan District, Shenzhen.乙方：Party B:a)宋雪松Song Xuesong身份证号码:120112196809040417ID Card No.:120112196809040417住所：天津市河西区广东路中裕园33702Address:Zhongyu Yuan 33702, Guangdong Road, Hexi District, Tianjinb)陈蔚力Chen Weili身份证号码:120106197309240516ID Card No.:120106197309240516住所：广东省深圳市宝安区宝城上川路15号Address:Baocheng Shangchuan Road 15, Baoan District, Shenzhen, Guangdong1秘密文件Strictly Confidentialc)王平Wang Ping身份证号码:35020319691030401xID Card No.:35020319691030401x住所：广东省深圳市南山区高新南环路36号彩虹之岸12栋4AAddress:Caihong Zhi’an Building No.12 Suite 4A, Gaoxin Nanhuan Road 36, Nanshan District, Shenzhen, Guangdongd)刘东来Liu Donglai身份证号码:120107196810103912ID Card No.:120107196810103912住所：天津市和平区南京路诚基经贸中心1号楼2门1702号Address:No 1702, Door 2, Build 1, Chengji Economic and Trade Centre, Nanjing Road, Heping District, Tianjin.丙方：北京中传视讯科技有限公司，一家依照中国法律设立和存在的有限责任公司，地址为北京市朝阳区光华路9号SOHO3QLAB32，统一社会信用代码为9111010576215249XM；Party C:Beijing Mobile Vision Technology Co., Ltd., a limited company duly registered in China, with its address at LAB32, SOHO3Q, No 9, Guanghua Road,Chaoyang District, Beijing and its uniform social credit code of 9111010576215249XM.2秘密文件Strictly Confidential在本协议中，甲方、乙方和丙方以下各称“一方”，合称“各方”。In this Agreement, each of Party A, Party B and Party C shall be referred to as a “Party” respectively, and they shall be collectively referred to as the“Parties”.鉴于，乙方系丙方股东并合计持有丙方100%股权，乙方将按本协议之条款授予甲方购买全部或部分该股权的权利。Whereas, Party B are the shareholders of Party C and jointly hold 100% of the equity interest in Party C, and Party B are willing to grant to Party A the rightto acquire such equity interest, in whole or in part, on the terms herein.现各方协商一致，达成如下协议：Now therefore, upon mutual discussion and negotiation, the Parties have reached the following agreement:1.股权买卖Sale and Purchase of Equity Interest1.1授予权利Option Granted乙方在此不可撤销地授予甲方在中国法律允许的前提下，按照甲方自行决定的行使步骤，并按照本协议第1.3条所述的价格，随时一次或多次从乙方购买或指定一人或多人(“被指定人”)从乙方购买其目前和将来所持有的丙方的全部或部分股权（无论乙方出资额和/或持股比例将来是否发生变化）的一项不可撤销的专有权(“股权购买权”)。除甲方和被指定人外，任何第三人均不得享有股权购买权或其他与乙方股权有关的权利。丙方特此同意乙方向甲方授予股权购买权。本款及本协议所规定的“人”指个人、公司、合营企业、合伙、企业、信托或非公司组织。Party B hereby irrevocably grant Party A an irrevocable and exclusive right to purchase, or designate one or more persons (each, a “Designee”) topurchase the equity interests in Party C now and in the future held by Party B (regardless whether Party B’s capital contribution amount and/orpercentage of shareholding will be changed in the future) once or at multiple times at any time in part or in whole at Party A’s sole and absolutediscretion to the extent permitted by Chinese laws and at the price described in Section 1.3 herein (such right being the “Equity Interest PurchaseOption”). Except for Party A and the Designee(s), no other person shall be entitled to the Equity Interest Purchase Option or other rights withrespect to the equity interests of Party B. Party C hereby agrees to the grant by Party B of the Equity Interest Purchase Option to Party A. Theterm “person” as used herein shall refer to individuals, corporations, partnerships, partners, enterprises, trusts or noncorporate organizations.3秘密文件Strictly Confidential1.2行使步骤Steps for Exercise of Equity Interest Purchase Option甲方行使其股权购买权以符合中国法律和法规的规定为前提。甲方行使股权购买权时，应向乙方发出书面通知(“股权购买通知”)，股权购买通知应载明以下事项：(a)甲方关于行使股权购买权的决定；(b)甲方拟从乙方购买的股权份额(“被购买的股权”)；和(c)被购买的股权的买入日期。Subject to the provisions of the laws and regulations of China, Party A may exercise the Equity Interest Purchase Option by issuing a writtennotice to Party B (the “Equity Interest Purchase Option Notice”), specifying: (a) Party A’s decision to exercise the Equity Interest PurchaseOption; (b) the portion of equity interests to be purchased from Party B (the “Optioned Interests”); and (c) the date for purchasing the OptionedInterests.1.3股权买价Equity Interest Purchase Price被购买的股权的买价（“股权买价”）应是行权当时中国法律允许的最低价格。乙方收到该股权对价后，应当提供给丙方与该股权买价相同金额的借款，该借款的期限为20年，且为无息。乙方应当在该借款期限届满时就该借款放弃对丙方的债权。The purchase price of the Optioned Interests (the “Equity Interest Purchase Price”) shall be the lowest price permitted by the laws of China. Afterreceiving the Equity Interest Purchase Price, Party B shall make an interestfree loan equivalent to the amount of Equity Interest Purchase Price toParty C, of which term is 20 years. Each member of Party B shall give up his(her) creditor’s right when the loan term expires.4秘密文件Strictly Confidential1.4转让被购买股权Transfer of Optioned Interests甲方每次行使股权购买权时：For each exercise of the Equity Interest Purchase Option:1.4.1乙方应责成丙方及时召开股东会会议，在该会议上，应通过批准乙方向甲方和/或被指定人转让被购买的股权的决议；Party B shall cause Party C to promptly convene a shareholders meeting, at which a resolution shall be adopted approving Party B’stransfer of the Optioned Interests to Party A and/or the Designee(s);1.4.2乙方应就其向甲方和/或被指定人转让被购买股权取得丙方其他股东同意该转让并放弃优先购买权的书面声明。Party B shall obtain written statements from the other shareholder of Party C giving consent to the transfer of the equity interest to PartyA and/or the Designee(s) and waiving any right of first refusal related thereto.1.4.3乙方应与甲方和/或(在适用的情况下)被指定人按照本协议及股权购买通知的规定，为每次转让签订股权转让协议；Party B shall execute a share transfer contract with respect to each transfer with Party A and/or each Designee (whichever is applicable),in accordance with the provisions of this Agreement and the Equity Interest Purchase Option Notice regarding the Optioned Interests;5秘密文件Strictly Confidential1.4.4有关方应签署所有其他所需协议、协议或文件，取得全部所需的政府批准和同意，并采取所有所需行动，在不附带任何担保权益的情况下，将被购买的股权的有效所有权转移给甲方和/或被指定人并使甲方和/或被指定人成为被购买的股权的登记在册所有人。为本款及本协议的目的，“担保权益”包括担保、抵押、第三方权利或权益，任何购股权、收购权、优先购买权、抵销权、所有权扣留或其他担保安排等；但为了明确起见，不包括在本协议、乙方股权质押协议项下产生的任何担保权益。本款及本协议所规定的“乙方股权质押协议”指甲方、乙方和丙方于本协议签署之日签订的股权质押协议，根据股权质押协议，乙方为担保丙方能履行丙方与甲方签订的独家业务合作协议项下的义务，而向甲方质押其在丙方的全部乙方股权。The relevant Parties shall execute all other necessary contracts, agreements or documents, obtain all necessary government licenses andpermits and take all necessary actions to transfer valid ownership of the Optioned Interests to Party A and/or the Designee(s),unencumbered by any security interests, and cause Party A and/or the Designee(s) to become the registered owner(s) of the OptionedInterests. For the purpose of this Section and this Agreement, “security interests” shall include securities, mortgages, third party’s rightsor interests, any stock options, acquisition right, right of first refusal, right to offset, ownership retention or other security arrangements,but shall be deemed to exclude any security interest created by this Agreement and Party B’s Equity Interest Pledge Agreement. “PartyB’s Equity Interest Pledge Agreement” as used in this Section and this Agreement shall refer to the Equity Interest Pledge Agreementexecuted by and among Party A, Party B and Party C on the date of this Agreement, whereby Party B pledge all of their equity interests inParty C to Party A, in order to guarantee Party C’s performance of its obligations under the Exclusive Business Corporation Agreementexecuted by and between Party C and Party A.6秘密文件Strictly Confidential2.知识产权独家购买权Exclusive Option regarding the Intellectual Property Rights2.1本协议签订之日起，若乙方拟转让、出售或以其他方式处置（任一处置方式以下简称“转让”）其拥有或持有的全部或部分知识产权（以下称“知识产权”，定义见第2.4条），甲方有权独家购买该等知识产权。From the date hereof, if Party B proposes to transfer, sell or dispose of (each, a “transfer”) all or any part of the intellectual property rights ownedor held by Party B (“IPR”), Party A shall have exclusive option.2.2若乙方有意转让全部或部分知识产权，应事先向甲方发出书面通知(“转让通知”)，转让通知应载明以下事项：(a) 乙方关于转让知识产权的意向；(b) 乙方拟转让的知识产权清单(“拟转让知识产权”)及转让的价格和其他条件。转让通知视为乙方向甲方发出的一份要约，按照该要约，乙方同意按转让通知中指定的价格条件向甲方转让全部或部分拟转让知识产权。Prior to Party B proposes to transfer all or any part of its IPR, Party B shall give Party A a written notice (“Transfer Notice”), which shall specify (a)Party B’s intention to make the transfer; (b) the list of IPR to be transferred (“Offered IPR”) and the consideration and other conditions uponwhich the transfer is to be made. The Transfer Notice constitutes Party B’s offer given to Party A, pursuant to which, Party B agrees to transfer allor any part of its Offered IPR to Party A based on the same conditions described in the Transfer Notice.7秘密文件Strictly Confidential2.3甲方收到转让通知后，有权在30日内选择按照转让通知中列明的转让价格和条件购买拟转让知识产权。如果甲方行使其独家购买权，双方应于甲方收到转让通知后45日内签订有关的知识产权转让协议，乙方应办理法律规定的知识产权转让的批准和登记手续。Party A shall have an option for a period of 30 days from Party A’s receipt of the Transfer Notice to elect to purchase the Offered IPR at the sameprice and subject to the same conditions as described in the Transfer Notice. If Party A decides to exercise its exclusive option, the parties shallenter into relevant IPR transfer agreement within 45 days upon Party A’s receipt of the Transfer Notice and Party B is responsible to complete allrelated approvals and registrations formalities as prescribed by the PRC law.2.4本协议第2条所称“知识产权”指任何知识产权，包括但不限于著作权、专利权、专利申请权、商标、域名、软件、专有技术，并包括前述知识产权申请权利以及登记注册的权利，以及其他所有与前述知识产权有关的权利和权益。The “IPR” referred to in this Article 2 means any intellectual property rights, including, without limitations, copyrights, patents, patentapplications, trademarks, domain names, software and knowhow together with (a) all rights to apply for or register any of the foregoing and (b) allother rights and interests to any of the foregoing.8秘密文件Strictly Confidential3.承诺Covenants3.1有关丙方的承诺Covenants regarding Party C乙方（作为丙方的股东）和丙方在此承诺：Party B (as the shareholders of Party C) and Party C hereby covenant as follows:3.1.1未经甲方的事先书面同意，不以任何形式补充、更改或修改丙方公司章程文件，增加或减少其注册资本，或以其他方式改变其注册资本结构；Without the prior written consent of Party A, they shall not in any manner supplement, change or amend the articles of association andbylaws of Party C, increase or decrease its registered capital, or change its structure of registered capital in other manners;3.1.2按照良好的财务和商业标准及惯例，保持其公司的存续，审慎地及有效地经营其业务和处理事务；They shall maintain Party C’s corporate existence in accordance with good financial and business standards and practices by prudentlyand effectively operating its business and handling its affairs;3.1.3未经甲方的事先书面同意，不在本协议签署之日起的任何时间出售、转让、抵押或以其他方式处置丙方的任何资产、业务或收入的合法或受益权益，或允许在其上设置任何其他担保权益；Without the prior written consent of Party A, they shall not at any time following the date hereof, sell, transfer, mortgage or dispose of inany manner any assets of Party C or legal or beneficial interest in the business or revenues of Party C, or allow the encumbrance thereonof any security interest;3.1.4未经甲方的事先书面同意，不发生、继承、保证或容许存在任何债务，但(i)正常或日常业务过程中产生而不是通过借款方式产生的债务；和(ii)已向甲方披露和得到甲方书面同意的债务除外；Without the prior written consent of Party A, they shall not incur, inherit, guarantee or suffer the existence of any debt, except for (i)debts incurred in the ordinary course of business other than through loans; and (ii) debts disclosed to Party A for which Party A’swritten consent has been obtained;9秘密文件Strictly Confidential3.1.5一直在正常业务过程中经营所有业务，以保持丙方的资产价值，不进行任何足以影响其经营状况和资产价值的作为/不作为；They shall always operate all of Party C’s businesses during the ordinary course of business to maintain the asset value of Party C andrefrain from any action/omission that may affect Party C’s operating status and asset value;3.1.6未经甲方的事先书面同意，不得让丙方签订任何重大协议，但在正常业务过程中签订的协议除外(就本段而言，如果一份协议的价值超过【人民币10万元】，即被视为重大协议)；Without the prior written consent of Party A, they shall not cause Party C to execute any major contract, except the contracts in theordinary course of business (for purpose of this subsection, a contract with a value exceeding RMB 100,000 shall be deemed a majorcontract);3.1.7未经甲方的事先书面同意，丙方不得向任何人提供贷款或信贷；Without the prior written consent of Party A, they shall not cause Party C to provide any person with any loan or credit;3.1.8应甲方要求，向其提供所有关于丙方的营运和财务状况的资料；They shall provide Party A with information on Party C’s business operations and financial condition at Party A’s request;10秘密文件Strictly Confidential3.1.9如甲方提出要求，丙方应从甲方接受的保险公司处购买和持有有关其资产和业务的保险，该保险的金额和险种应与经营类似业务的公司一致；If requested by Party A, they shall procure and maintain insurance in respect of Party C’s assets and business from an insurance carrieracceptable to Party A, at an amount and type of coverage typical for companies that operate similar businesses;3.1.10未经甲方的事先书面同意，丙方不得与任何人合并或联合，或对任何人进行收购或投资；Without the prior written consent of Party A, they shall not cause or permit Party C to merge, consolidate with, acquire or invest in anyperson;3.1.11将发生的或可能发生的与丙方资产、业务或收入有关的诉讼、仲裁或行政程序立即通知甲方；They shall immediately notify Party A of the occurrence or possible occurrence of any litigation, arbitration or administrative proceedingsrelating to Party C’s assets, business or revenue;3.1.12为保持丙方对其全部资产的所有权，签署所有必要或适当的文件，采取所有必要或适当的行动和提出所有必要或适当的控告或对所有索偿进行必要和适当的抗辩；To maintain the ownership by Party C of all of its assets, they shall execute all necessary or appropriate documents, take all necessary orappropriate actions and file all necessary or appropriate complaints or raise necessary and appropriate defenses against all claims;11秘密文件Strictly Confidential3.1.13未经甲方事先书面同意，不得以任何形式派发股息予各股东，但一经甲方要求，丙方应立即将其所有可分配利润全部立即分配给其各股东；及Without the prior written consent of Party A, they shall ensure that Party C shall not in any manner distribute dividends to itsshareholders, provided that upon Party A’s written request, Party C shall immediately distribute all distributable profits to itsshareholders; and3.1.14根据甲方的要求，委任由其指定的任何人士出任丙方的董事和/或执行董事。At the request of Party A, they shall appoint any persons designated by Party A as the director and/or executive director of Party C.3.2乙方和丙方的承诺Covenants of Party B and Party C乙方承诺：Party B hereby covenant as follows:3.2.1未经甲方的事先书面同意，不出售、转让、抵押或以其他方式处置其拥有的丙方的股权的合法或受益权益，或允许在其上设置任何其他担保权益，但根据乙方签署的《股权质押协议》在该股权上设置的质押则除外；Without the prior written consent of Party A, Party B shall not sell, transfer, mortgage or dispose of in any other manner any legal orbeneficial interest in the equity interests in Party C held by Party B, or allow the encumbrance thereon of any security interest, except forthe pledge placed on these equity interests in accordance with Party B’s Equity Interest Pledge Agreement;12秘密文件Strictly Confidential3.2.2促使丙方股东会和/或执行董事不批准在未经甲方的事先书面同意的情况下，出售、转让、抵押或以其他方式处置任何乙方持有之丙方的股权的合法权益或受益权，或允许在其上设置任何其他担保权益，但批准根据乙方签署的《股权质押协议》在乙方股权上设置的质押则除外；Party B shall cause the shareholders’ meeting and/or the executive director of Party C not to approve the sale, transfer, mortgage ordisposition in any other manner of any legal or beneficial interest in the equity interests in Party C held by Party B, or allow theencumbrance thereon of any security interest, without the prior written consent of Party A, except for the pledge placed on these equityinterests in accordance with Party B’s Equity Interest Pledge Agreement;3.2.3未经甲方的事先书面同意的情况下，对于丙方与任何人合并或联合，或对任何人进行收购或投资，乙方将促成丙方股东会或执行董事不予批准；Party B shall cause the shareholders’ meeting or the executive director of Party C not to approve the merger or consolidation with anyperson, or the acquisition of or investment in any person, without the prior written consent of Party A;3.2.4将发生的或可能发生的任何关于其所拥有的股权的诉讼、仲裁或行政程序立即通知甲方；Party B shall immediately notify Party A of the occurrence or possible occurrence of any litigation, arbitration or administrativeproceedings relating to the equity interests in Party C held by Party B;13秘密文件Strictly Confidential3.2.5促使丙方股东会或执行董事表决赞成本协议规定的被购买的股权的转让并应甲方之要求采取其他任何行动；Party B shall cause the shareholders’ meeting or the executive director of Party C to vote their approval of the transfer of the OptionedInterests as set forth in this Agreement and to take any and all other actions that may be requested by Party A;3.2.6为保持其对股权的所有权，签署所有必要或适当的文件，采取所有必要或适当的行动和提出所有必要或适当的控告或对所有索偿进行必要和适当的抗辩；To the extent necessary to maintain Party B’s ownership in Party C, Party B shall execute all necessary or appropriate documents, take allnecessary or appropriate actions and file all necessary or appropriate complaints or raise necessary and appropriate defenses against allclaims;3.2.7应甲方的要求，委任由其指定的任何人士出任丙方的董事和/或执行董事；Party B shall appoint any designee of Party A as the director and/or executive director of Party C, at the request of Party A;3.2.8经甲方随时要求，应向其指定的代表在任何时间无条件地根据本协议的股权购买权立即转让其股权，并放弃其对其他现有股东进行上述股权转让所享有的优先购买权（如有的话）；和At the request of Party A at any time, Party B shall promptly and unconditionally transfer its equity interests in Party C to Party A’sDesignee(s) in accordance with the Equity Interest Purchase Option under this Agreement, and Party B hereby waives its right of firstrefusal (if any) to the share transfer by the other existing shareholder of Party C (if any); and14秘密文件Strictly Confidential3.2.9严格遵守本协议及各方共同或分别签订的其他协议的各项规定，切实履行该等协议项下的各项义务，并不进行任何足以影响该等协议的有效性和可执行性的作为/不作为。如果乙方对于本协议项下或乙方股权质押协议下或对甲方的授权委托书中的股权，还留存有任何权利，除非甲方书面指示，否则乙方仍不得行使该权利。Party B shall strictly abide by the provisions of this Agreement and other contracts jointly or separately executed by and among Party B,Party C and Party A, perform the obligations hereunder and thereunder, and refrain from any action/omission that may affect theeffectiveness and enforceability thereof. To the extent that Party B has any remaining rights with respect to the equity interests subject tothis Agreement hereunder or under Party B’s Equity Interest Pledge Agreement or under the Power of Attorney granted in favor of PartyA, Party B shall not exercise such rights except in accordance with the written instructions of Party A.4.陈述和保证Representations and Warranties乙方和丙方特此在本协议签署之日和每一个转让日向甲方共同及分别陈述和保证如下：Party B and Party C hereby represent and warrant to Party A, jointly and severally, as of the date of this Agreement and each date of transfer of theOptioned Interests, that:4.1其具有签订和交付本协议和其为一方的、根据本协议为每一次转让被购买的股权而签订的任何股权转让协议(各称为"转让协议")，并履行其在本协议和任何转让协议项下的义务的权力和能力。乙方和丙方同意在甲方行使购买权时，他们将签署与本协议条款一致的转让协议。本协议和其是一方的各转让协议一旦签署后，构成或将对其构成合法、有效及具有约束力的义务并可按照其条款对其强制执行；They have the authority to execute and deliver this Agreement and any share transfer contracts to which they are a party concerning theOptioned Interests to be transferred thereunder (each, a “Transfer Contracts”), and to perform their obligations under this Agreement and anyTransfer Contracts. Party B and Party C agree to enter into Transfer Contracts consistent with the terms of this Agreement upon Party A’s exerciseof the Equity Interest Purchase Option. This Agreement and the Transfer Contracts to which they are a party constitute or will constitute theirlegal, valid and binding obligations and shall be enforceable against them in accordance with the provisions thereof;15秘密文件Strictly Confidential4.2无论是本协议或任何转让协议的签署和交付还是其在本协议或任何转让协议项下的义务的履行均不会：(i)导致违反任何有关的中国法律；(ii)与丙方章程或其他组织文件相抵触；(iii)导致违反其是一方或对其有约束力的任何协议或文件，或构成其是一方或对其有约束力的任何协议或文件项下的违约；(iv)导致违反有关向任何一方颁发的任何许可或批准的授予和(或)继续有效的任何条件；或(v)导致向任何一方颁发的任何许可或批准中止或被撤销或附加条件；The execution and delivery of this Agreement or any Transfer Contracts and the obligations under this Agreement or any Transfer Contracts shallnot: (i) cause any violation of any applicable laws of China; (ii) be inconsistent with the articles of association, bylaws or other organizationaldocuments of Party C; (iii) cause the violation of any contracts or instruments to which they are a party or which are binding on them, orconstitute any breach under any contracts or instruments to which they are a party or which are binding on them; (iv) cause any violation of anycondition for the grant and/or continued effectiveness of any licenses or permits issued to either of them; or (v) cause the suspension orrevocation of or imposition of additional conditions to any licenses or permits issued to either of them;4.3乙方对其在丙方拥有的股权拥有良好和可出售的所有权，除乙方签署的《股权质押协议》外，乙方在上述股权上没有设置任何担保权益；Party B have a good and merchantable title to the equity interests in Party C they hold. Except for Party B’s Equity Interest Pledge Agreement,Party B have not placed any security interest on such equity interests;16秘密文件Strictly Confidential4.4目前没有悬而未决的或构成威胁的与丙方的股权、丙方资产有关的或与丙方有关的诉讼、仲裁或行政程序。There are no pending or threatened litigation, arbitration or administrative proceedings relating to the equity interests in Party C, assets of Party Cor Party C.5.生效日Effective Date5.1本协议于各方签署本协议之日生效，有效期10年，经甲方选择可再延长10年。This Agreement shall become effective upon the date hereof, and remain effective for a term of 10 years, and may be renewed for an additional 10years at Party A’s election.5.2若丙方股东发生变化，由新股东签署此协议，在此协议签署之日，原协议自动视为无效。In the event of a change in the shareholders of Party C, the new shareholder should sign this agreement and the original agreement willautomatically be deemed invalid on the date of signing of this agreement.17秘密文件Strictly Confidential6.适用法律与争议解决Governing Law and Resolution of Disputes6.1适用法律Governing law本协议的订立、效力、解释、履行、修改和终止以及争议解决均适用中国正式公布并可公开得到的法律。对中国正式公布并可公开得到的法律没有规定的事项，将适用国际法律原则和惯例。The execution, effectiveness, construction, performance, amendment and termination of this Agreement and the resolution of disputes hereundershall be governed by the formally published and publicly available laws of China. Matters not covered by formally published and publiclyavailable laws of China shall be governed by international legal principles and practices.6.2争议的解决方法Methods of Resolution of Disputes因解释和履行本协议而发生的任何争议，本协议各方应首先通过友好协商的方式加以解决。如果在一方向其他方发出要求协商解决的书面通知后30天之内争议仍然得不到解决，则任何一方均可将有关争议提交给中国国际经济贸易仲裁委员会，由该会按照其届时有效的仲裁规则仲裁解决。仲裁应在北京进行，使用之语言为中文。仲裁裁决是终局性的，对各方均有约束力。In the event of any dispute with respect to the construction and performance of this Agreement, the Parties shall first resolve the dispute throughfriendly negotiations. In the event the Parties fail to reach an agreement on the dispute within 30 days after either Party’s request to the otherParties for resolution of the dispute through negotiations, either Party may submit the relevant dispute to the China International Economic andTrade Arbitration Commission for arbitration, in accordance with its then effective arbitration rules. The arbitration shall be conducted in Beijing,and the language used in arbitration shall be Chinese. The arbitration award shall be final and binding on all Parties.18秘密文件Strictly Confidential7.税款、费用Taxes and Fees每一方应承担根据中国法律因准备和签署本协议和各转让协议以及完成本协议和各转让协议拟定的交易而由该方发生的或对其征收的任何和全部的转让和注册的税、花费和费用。Each Party shall pay any and all transfer and registration tax, expenses and fees incurred thereby or levied thereon in accordance with the laws of China inconnection with the preparation and execution of this Agreement and the Transfer Contracts, as well as the consummation of the transactionscontemplated under this Agreement and the Transfer Contracts.8.通知Notices8.1本协议项下要求或发出的所有通知和其他通信应通过专人递送、挂号邮寄、邮资预付或商业快递服务或传真的方式发到该方下列地址。每一通知还应再以电子邮件送达。该等通知视为有效送达的日期按如下方式确定：All notices and other communications required or permitted to be given pursuant to this Agreement shall be delivered personally or sent byregistered mail, postage prepaid, by a commercial courier service or by facsimile transmission to the address of such Party set forth below. Aconfirmation copy of each notice shall also be sent by email. The dates on which notices shall be deemed to have been effectively given shall bedetermined as follows:8.1.1通知如果是以专人递送、快递服务或挂号邮寄、邮资预付发出的，则以于设定为通知的地址在接收或拒收之日为有效送达日。Notices given by personal delivery, by courier service or by registered mail, postage prepaid, shall be deemed effectively given on thedate of receipt or refusal at the address specified for notices.19秘密文件Strictly Confidential8.1.2通知如果是以传真发出的，则以成功传送之日为有效送达日（应以自动生成的传送确认信息为证）。Notices given by facsimile transmission shall be deemed effectively given on the date of successful transmission (as evidenced by anautomatically generated confirmation of transmission).8.2为通知的目的，各方地址如下：For the purpose of notices, the addresses of the Parties are as follows:甲方：中传天下信息科技（深圳）有限公司Party A:Zhongchuan Tianxia Information Technology (Shenzhen) Co., Ltd.地址：深圳市南山区高新中三道2号深圳软件园一期五栋401AAddress:401A, Building 5, Phase 1, Shenzhen Software Park, No.2 Gaoxin Zhongsan Road, Nanshan District, Shenzhen.收件人：洪婷Attn:Hong Ting乙方：Party B: 宋雪松Song Xuesong住所：天津市河西区广东路中裕园33702Address:Zhongyu Yuan 33702, Guangdong Road, Hexi District, Tianjin20秘密文件Strictly Confidential陈蔚力Chen Weili住所：广东省深圳市宝安区宝城上川路15号Address:Baocheng Shangchuan Road 15, Baoan District, Shenzhen, Guangdong王平Wang Ping住所：广东省深圳市南山区高新南环路36号彩虹之岸12栋4AAddress:Caihong Zhi’an Building No.12 Suite 4A, Gaoxin Nanhuan Road 36, Nanshan District, Shenzhen, Guangdong刘东来Liu Donglai住所：天津市和平区南京路诚基经贸中心1号楼2门1702号Address:No 1702, Door 2, Build 1, Chengji Economic and Trade Centre, Nanjing Road, Heping District, Tianjin.丙方：北京中传视讯科技有限公司Party C:Beijing Mobile Vision Technology Co., Ltd.地址：北京市朝阳区光华路9号SOHO3QLAB32Address: LAB32, SOHO3Q, No 9, Guanghua Road, Chaoyang District, Beijing .收件人：宋雪松Attn: Song Xuesong8.3任何一方可按本条规定随时给其他方发出通知来改变其接收通知的地址。Any Party may at any time change its address for notices by a notice delivered to the other Parties in accordance with the terms hereof.21秘密文件Strictly Confidential9.保密责任Confidentiality各方承认及确定彼此就有关本协议而交换的任何口头或书面资料均属机密资料。各方应当对所有该等资料予以保密，而在未得其他方书面同意前，不得向任何第三者披露任何有关资料，惟下列情况除外：(a)公众人士知悉或将会知悉该等资料(并非由接受资料之一方擅自向公众披露)；(b)适用法律法规或股票交易的规则或规例所需披露之资料；或(c)由任何一方就本协议所述交易而需向其法律或财务顾问披露之资料而该法律或财务顾问亦需遵守与本条款相类似之保密责任。如任何一方工作人员或聘请机构的泄密均视为该方的泄密，需依本协议承担违约责任。无论本协议以任何理由终止，本条款仍然生效。The Parties acknowledge that any oral or written information exchanged among them with respect to this Agreement is confidential information. Each Partyshall maintain the confidentiality of all such information, and without obtaining the written consent of other Parties, it shall not disclose any relevantinformation to any third parties, except in the following circumstances: (a) such information is or will be in the public domain (provided that this is not theresult of a public disclosure by the receiving party); (b) information disclosed as required by applicable laws or rules or regulations of any stock exchange;or (c) information required to be disclosed by any Party to its legal counsel or financial advisor regarding the transaction contemplated hereunder, and suchlegal counsel or financial advisor are also bound by confidentiality duties similar to the duties in this section. Disclosure of any confidential information bythe staff members or agency hired by any Party shall be deemed disclosure of such confidential information by such Party, which Party shall be held liablefor breach of this Agreement. This Section shall survive the termination of this Agreement for any reason.22秘密文件Strictly Confidential10.进一步保证Further Warranties各方同意迅速签署为执行本协议的各项规定和目的而合理需要的或对其有利的文件，以及为执行本协议的各项规定和目的而采取合理需要的或对其有利的进一步行动。The Parties agree to promptly execute documents that are reasonably required for or are conducive to the implementation of the provisions and purposes ofthis Agreement and take further actions that are reasonably required for or are conducive to the implementation of the provisions and purposes of thisAgreement.11.其他Miscellaneous11.1修订、修改与补充Amendment, change and supplement对本协议作出修订、修改与补充，必须经每一方签署书面协议。Any amendment, change and supplement to this Agreement shall require the execution of a written agreement by all of the Parties.11.2完整协议Entire agreement除了在本协议签署后所作出的书面修订、补充或修改以外，本协议构成本协议各方就本协议标的物所达成的完整协议，取代在此之前就本协议标的物所达成的所有口头或书面的协商、陈述和协议。 Except for the amendments, supplements or changes in writing executed after theexecution of this Agreement, this Agreement shall constitute the entire agreement reached by and among the Parties hereto with respect to thesubject matter hereof, and shall supercede all prior oral and written consultations, representations and contracts reached with respect to thesubject matter of this Agreement.23秘密文件Strictly Confidential11.3标题Headings本协议的标题仅为方便阅读而设，不应被用来解释、说明或在其他方面影响本协议各项规定的含义。The headings of this Agreement are for convenience only, and shall not be used to interpret, explain or otherwise affect the meanings of theprovisions of this Agreement.11.4语言Language本协议以中文和英文书就，一式八份，乙方共计六名股东以及甲方、丙方各持一份，具有同等效力；中英文版本如有冲突，应以中文版为准。This Agreement is written in both Chinese and English language in eight copies, the 6 shareholders of Party B, Party A and Party C having onecopy with equal legal validity respectively; in case there is any conflict between the Chinese version and the English version, the Chinese versionshall prevail.11.5可分割性Severability如果本协议有任何一条或多条规定根据任何法律或法规在任何方面被裁定为无效、不合法或不可执行，本协议其余规定的有效性、合法性或可执行性不应因此在任何方面受到影响或损害。各方应通过诚意磋商，争取以法律许可以及各方期望的最大限度内有效的规定取代那些无效、不合法或不可执行的规定，而该等有效的规定所产生的经济效果应尽可能与那些无效、不合法或不能强制执行的规定所产生的经济效果相似。In the event that one or several of the provisions of this Agreement are found to be invalid, illegal or unenforceable in any aspect in accordancewith any laws or regulations, the validity, legality or enforceability of the remaining provisions of this Agreement shall not be affected orcompromised in any respect. The Parties shall strive in good faith to replace such invalid, illegal or unenforceable provisions with effectiveprovisions that accomplish to the greatest extent permitted by law and the intentions of the Parties, and the economic effect of such effectiveprovisions shall be as close as possible to the economic effect of those invalid, illegal or unenforceable provisions.24秘密文件Strictly Confidential11.6继任者Successors本协议对各方各自的继任者和各方所允许的受让方应具有约束力并对其有利。This Agreement shall be binding on and shall inure to the interest of the respective successors of the Parties and the permitted assigns of suchParties.11.7继续有效Survival11.7.1协议期满或提前终止前因本协议而发生的或到期的任何义务在本协议期满或提前终止后继续有效。Any obligations that occur or that are due as a result of this Agreement upon the expiration or early termination of this Agreement shallsurvive the expiration or early termination thereof.11.7.2本协议第5、6、9条和本第11.7条的规定在本协议终止后继续有效。The provisions of Articles 5, 6, 9 and this Section 11.7 shall survive the termination of this Agreement.25秘密文件Strictly Confidential11.8弃权Waivers任何一方可以对本协议的条款和条件作出弃权，但必须经书面作出并经各方签字。一方在某种情况下就其他方的违约所作的弃权不应被视为该方在其他情况下就类似的违约已经对其他方作出弃权。Any Party may waive the terms and conditions of this Agreement, provided that such a waiver must be provided in writing and shall require thesignatures of the Parties. No waiver by any Party in certain circumstances with respect to a breach by other Parties shall operate as a waiver bysuch a Party with respect to any similar breach in other circumstances.本页其余部分刻意留为空白The Remainder of this page is intentionally left blank26秘密文件Strictly Confidential有鉴于此，各方已自行或使得其各自授权代表于文首所载日期签署本独家购买权协议。IN WITNESS WHEREOF, the Parties have executed, or caused their respective duly authorized representatives to execute, this Exclusive Option Agreement as ofthe date first above written.甲方：中传天下信息科技（深圳）有限公司（盖章）Party A: Zhongchuan Tianxia Information Technology (Shenzhen) Co., Ltd. (Seal)签字：By:/s/ Hong Ting姓名：洪婷Name: Hong Ting职务：总经理Title: General Manager秘密文件 Strictly Confidential有鉴于此，各方已自行或使得其各自授权代表于文首所载日期签署本独家购买权协议。IN WITNESS WHEREOF, the Parties have executed, or caused their respective duly authorized representatives to execute, this Exclusive Option Agreement as ofthe date first above written.乙方：Party B:宋雪松Song Xuesong签字：By:/s/ Song Xuesong秘密文件 Strictly Confidential有鉴于此，各方已自行或使得其各自授权代表于文首所载日期签署本独家购买权协议。IN WITNESS WHEREOF, the Parties have executed, or caused their respective duly authorized representatives to execute, this Exclusive Option Agreement as ofthe date first above written.乙方：Party B:陈蔚力Chen Weili签字：By:/s/ Chen Weili秘密文件 Strictly Confidential有鉴于此，各方已自行或使得其各自授权代表于文首所载日期签署本独家购买权协议。IN WITNESS WHEREOF, the Parties have executed, or caused their respective duly authorized representatives to execute, this Exclusive Option Agreement as ofthe date first above written.乙方：Party B:王平Wang Ping签字：By:/s/ Wang Ping秘密文件 Strictly Confidential有鉴于此，各方已自行或使得其各自授权代表于文首所载日期签署本独家购买权协议。IN WITNESS WHEREOF, the Parties have executed, or caused their respective duly authorized representatives to execute, this Exclusive Option Agreement as ofthe date first above written.乙方：Party B:刘东来Liu Donglai签字：By:/s/ Liu Donglai秘密文件 Strictly Confidential有鉴于此，各方已自行或使得其各自授权代表于文首所载日期签署本独家购买权协议。IN WITNESS WHEREOF, the Parties have executed, or caused their respective duly authorized representatives to execute, this Exclusive Option Agreement as ofthe date first above written.丙方：北京中传视讯科技有限公司（盖章）Party B: Beijing Mobile Vision Technology Co., Ltd. (Seal)签字：By:/s/ Song Xuesong姓名：宋雪松Name:Song Xuesong职务：董事长Title:Chairman of the Board秘密文件 Strictly ConfidentialEX4.17 5 f20f2017ex417_luokung.htm EQUITY INTEREST PLEDGE AGREEMENT BY AND AMONG ZHONGCHUAN TIANXIA INFORMATION TECHNOLOGY(SHENZHEN) CO., LTD., XUESONG SONG, WEILI CHEN, PING WANG, DONGLAI LIU, AND BEIJING MOBILE VISION TECHNOLOGY CO., LTD., DATEDAUGUST 31, 2015Exhibit 4.17股权质押协议Equity Interest Pledge Agreement本股权质押协议（下称"本协议”）由下列各方于年月日在中华人民共和国（下称“中国”）北京签订：This Equity Interest Pledge Agreement (this "Agreement") has been executed by and among the following parties on in Beijing, the People’sRepublic of China (the “China” or “PRC”):甲方：中传天下信息科技（深圳）有限公司（下称“质权人”）Party A: Zhongchuan Tianxia Information Technology (Beijing) Co., Ltd. (“Pledgee”)地址：深圳市南山区高新中三道2号深圳软件园一期五栋401AAddress: 401A, Building 5, Phase 1, Shenzhen Software Park, No.2 Gaoxin Zhongsan Road, Nanshan District, Shenzhen统一社会信用代码： 91440300565701058RUniform Social Credit Code: 91440300565701058R乙方(下称“出质人”)：Party B ( “Pledgors”):a)宋雪松Song Xuesong身份证号码:ID Card No.:b)陈蔚力Chen Weili身份证号码:ID Card No.:1秘密文件 Strictly Confidentialc)王平Wang Ping身份证号码:ID Card No.:d)刘东来Liu Donglai身份证号码:ID Card No.:丙方：北京中传视讯科技有限公司Party C: Beijing Mobile Vision Technology Co., Ltd.地址：北京市朝阳区光华路9号SOHO3QLAB32Address: LAB32, SOHO3Q, No 9, Guanghua Road, Chaoyang District, Beijing统一社会信用代码：9111010576215249XMUniform Social Credit Code: 9111010576215249XM在本协议中，质权人、出质人和丙方以下各称“一方”，合称“各方”。In this Agreement, each of Pledgee, Pledgors and Party C shall be referred to as a "Party" respectively, and they shall be collectively referred to as the"Parties".鉴于：Whereas:1．出质人全部为中国境内居民自然人，共同持有丙方100%的股权。丙方是一家在中国注册成立的、主要从事手机视频技术研发、内容制作和产业化市场推广的有限责任公司。丙方有意在此确认出质人和质权人在本协议下的权利和义务并提供必要的协助登记该质权；All of the Pledgors are natural persons resided in PRC, and collectively hold 100% of the equity interest in Party C. Party C is a limited company registered inChina, mainly engaging in mobile video frequency technology research, development, content creation, sale and related industrialization promotion. Party Cacknowledges the respective rights and obligations of Pledgors and Pledgee under this Agreement, and intends to provide any necessary assistance inregistering the Pledge;2．质权人是一家在中国注册的外商独资企业。质权人与丙方于年月日签订了独家业务合作协议；Pledgee is a whollyforeignowned enterprise registered in China. Pledgee and Party C have executed an Exclusive Business Cooperation Agreement as of [*],[*];3．为了保证丙方全面履行独家业务合作协议项下的义务，出质人以其拥有的全部丙方股权向质权人做出质押担保。To ensure that Party C fully performs its obligations under the Exclusive Business Cooperation Agreement, Pledgors hereby pledge to the Pledgee all of theequity interests they hold in Party C.为了履行业务合作协议的条款，各方商定按照以下条款签订本协议。To perform the provisions of the Business Cooperation Agreement, the Parties have mutually agreed to execute this Agreement upon the following terms.2秘密文件 Strictly Confidential1.定义Definitions除非本协议另有规定，下列词语含义为：Unless otherwise provided herein, the terms below shall have the following meanings:1.1质权：指出质人根据本协议第2条给予质权人的担保物权，即指质权人所享有的，以出质人质押给质权人的股权折价或拍卖、变卖该股权的价款优先受偿的权利。Pledge: shall refer to the security interest granted by Pledgors to Pledgee pursuant to Article 2 of this Agreement, i.e., the right of Pledgee to becompensated on a preferential basis with the conversion, auction or sales price of the Equity Interest.1.2股权：指出质人现在和将来（通过增资和/或转股）合法持有的其在丙方的全部股权权益。Equity Interest: shall refer to all of the equity interest in Party C lawfully, held now and to be held (through capital increase and/or equity transfer)hereafter by Pledgors.1.3质押期限：指本协议第3条规定的期间。Term of Pledge: shall refer to the term set forth in Article 3 of this Agreement.1.4业务合作协议：指丙方与质权人于本协议日签订的独家业务合作协议。Business Cooperation Agreement: shall refer to the Exclusive Business Cooperation Agreement executed by and between Party C and Pledgee on thedate of this Agreement.1.5违约事件：指本协议第7条所列任何情况。Event of Default: shall refer to any of the circumstances set forth in Article 7 of this Agreement.1.6违约通知：指质权人根据本协议发出的宣布违约事件的通知。Notice of Default: shall refer to the notice issued by Pledgee in accordance with this Agreement declaring an Event of Default.3秘密文件 Strictly Confidential2.质权The Pledge作为丙方按时和全额支付业务合作协议项下质权人应得的任何或全部的款项，包括但不限于业务合作协议中规定的咨询和服务费的担保（无论该等费用的到期应付是由于到期日的到来、提前收款的要求或其它原因），以及丙方充分履行其在业务合作协议项下其他所有义务（丙方按时和全额支付业务合作协议项下甲方应得的任何或全部的款项及丙方在业务合作协议项下其他所有义务，以下统称为“被担保债务”）的担保，出质人特此将其现有或将拥有的丙方的全部股权权益质押给质权人。As collateral security for the timely and complete payment and performance when due (whether at stated maturity, by acceleration or otherwise) of any or all ofthe payments due (the “all payments in pledge”) by Party C, including without limitation the consulting and services fees payable to the Pledgee under theBusiness Cooperation Agreement, Pledgors hereby pledge to Pledgee a first security interest in all of Pledgors’ right, title and interest, whether now owned orhereafter acquired by Pledgors, in the Equity Interest of Party C.3.质押期限Term of Pledge3.1本质权自本协议项下的股权出质在相应的工商行政管理机关登记之日起生效，质权有效期持续到业务合作协议下所有丙方欠付质权人的款项结清为止。出质人和丙方应（一）自本协议签署之日起3个工作日内，将本协议的质权登记在丙方股东名册上，并（二）自本协议签署之日起10个工作日内向相应的工商行政管理机关申请登记本协议项下的质权。各方共同确认，为办理股权质押工商登记手续，各方及丙方其他股东应按照丙方所在地工商行政管理部门要求的形式签署、真实反映本协议项下质权信息的《股权质押合同》（以下简称“工商登记质押合同”）提交给工商管理机关，工商登记质押合同中未约定事项，仍以本协议约定为准。出质人和丙方应当按照中国法律法规和有关工商行政管理机关的各项要求，提交所有必要的文件并办理所有必要手续，保证质权在递交申请后尽快获得登记。如果出质人持有的丙方注册资本数额增加（不管是通过直接认缴丙方的增资还是从其他股东处受让股权），各方一致同意将采取一切必要的行动和签署一切必要的文件以按照登记机关的要求完成质权的变更登记，以确保本协议项下的质权的持续有效。The Pledge shall become effective on such date when the pledge of the Equity Interest contemplated herein has been registered’ with relevantadministration for industry and commerce (the “AIC”). The Pledge shall be continuously valid until all payments due under the Business CooperationAgreement have been fulfilled by Party C. Pledgors and Party C shall (1) register the Pledge in the shareholders' register of Party C within 3 businessdays following the execution of this Agreement, and (2) submit an application to the AIC for the registration of the Pledge of the Equity Interestcontemplated herein within 10 business days following the execution of this Agreement. The parties covenant that for the purpose of registration of thePledge, the parties hereto and all other shareholders of Party C shall submit to the AIC the Equity Interest Pledge Contract in the form required by theAIC at the location of Party C which shall truly reflect the information of the Pledge hereunder (the “AIC Pledge Contract”). For matters not specified inthe AIC Pledge Contract, the parties shall be bound by the provisions of this Agreement. Pledgors and Party C shall submit all necessary documentsand complete all necessary procedures, as required by the PRC laws and regulations and the relevant AIC, to ensure that the Pledge of the EquityInterest shall be registered with the AIC as soon as possible after filing. In the event that the amount of registered capital held by Pledgors is increased(either by subscribing increased registered capital from Party C or acquiring equity interest from other shareholders), the Parties hereto agree that theyshall take any necessary action and execute any necessary document to complete the registration of change of Pledge according to the requirement ofAIC so that the Pledge in this Agreement remains effective.4秘密文件 Strictly Confidential3.2质押期限内，如丙方未按业务合作协议交付咨询服务费等费用，质权人有权但无义务按本协议的规定处分质权。During the Term of Pledge, in the event Party C fails to pay the exclusive consulting or service fees in accordance with the Business CooperationAgreement, Pledgee shall have the right, but not the obligation, to dispose of the Pledge in accordance with the provisions of this Agreement.4.质权凭证的保管Custody of Records for Equity Interest subject to Pledge4.1在本协议规定的质押期限内，出质人应将其在丙方的股权出资证明书及记载质权的股东名册交付质权人保管。出质人应在本协议签订之日起一周内将上述股权出资证明书及股东名册交付给质权人。质权人将在本协议规定的全部质押期间一直保管这些项目。During the Term of Pledge set forth in this Agreement, Pledgors shall deliver to Pledgee's custody the capital contribution certificate for the EquityInterest and the shareholders' register containing the Pledge within one week from the execution of this Agreement. Pledgee shall have custody of suchitems during the entire Term of Pledge set forth in this Agreement.4.2在质押期限内，股权所产生的红利应当无条件归质权人所有。Dividends generated by the Equity Interest shall be unconditionally owned by the Pledgee during the Term of Pledge.5秘密文件 Strictly Confidential5.出质人的声明和保证Representations and Warranties of Pledgors5.1出质人是股权唯一的合法所有人。Pledgors are the sole legal and beneficial owners of the Equity Interest.5.2质权人有权以本协议规定的方式处分并转让股权。Pledgee shall have the right to dispose of and transfer the Equity Interest in accordance with the provisions set forth in this Agreement.5.3除本质权之外，出质人未在股权上设置任何其他质押权利或其他担保权益。Except for the Pledge, Pledgors have not placed any security interest or other encumbrance on the Equity Interest.6.出质人的承诺和确认Covenants and Further Agreements of Pledgors6.1在本协议存续期间，所有出质人向质权人承诺，出质人将：All of the Pledgors hereby covenant to the Pledgee, that during the term of this Agreement, Pledgors shall:6.1.1除履行由出质人与质权人、丙方于本协议签署日签订的《独家购买权合同》外，未经质权人事先书面同意，不得转让股权，不得在股权上设立或允许存在任何担保或其他债务负担；not transfer the Equity Interest, place or permit the existence of any security interest or other encumbrance on the Equity Interest, without theprior written consent of Pledgee, except for the performance of the Exclusive Option Agreement executed by Pledgors, the Pledgee and Party Con the execution date of this Agreement;6秘密文件 Strictly Confidential6.1.2遵守并执行所有有关权利质押的法律、法规的规定，在收到有关主管机关就质权发出或制定的通知、指令或建议时，于五日内向质权人出示上述通知、指令或建议，同时遵守上述通知、指令或建议，或按照质权人的合理要求或经质权人同意就上述事宜提出反对意见和陈述；comply with the provisions of all laws and regulations applicable to the pledge of rights, and within 5 days of receipt of any notice, order orrecommendation issued or prepared by relevant competent authorities regarding the Pledge, shall present the aforementioned notice, order orrecommendation to Pledgee, and shall comply with the aforementioned notice, order or recommendation or submit objections andrepresentations with respect to the aforementioned matters upon Pledgee's reasonable request or upon consent of Pledgee;6.1.3将任何可能导致对出质人股权或其任何部分的权利产生影响的事件或收到的通知，以及可能改变出质人在本协议中的任何保证、义务或对出质人履行其在本协议中义务可能产生影响的任何事件或收到的通知及时通知质权人。promptly notify Pledgee of any event or notice received by Pledgors that may have an impact on Pledgee's rights to the Equity Interest or anyportion thereof, as well as any event or notice received by Pledgors that may have an impact on any guarantees and other obligations ofPledgors arising out of this Agreement.6.2出质人同意，质权人按本协议条款取得的对质权享有的权利，不应受到出质人或出质人的继承人或出质人之委托人或任何其他人通过法律程序的中断或妨害。Pledgors agree that the rights acquired by Pledgee in accordance with this Agreement with respect to the Pledge shall not be interrupted or harmed byPledgors or any heirs or representatives of Pledgors or any other persons through any legal proceedings.7秘密文件 Strictly Confidential6.3出质人向质权人保证，为保护或完善本协议对偿付业务合作协议项下被担保债务的担保，出质人将诚实签署、并促使其他与质权有利害关系的当事人签署质权人所要求的所有的权利证书、契约和/或履行并促使其他有利害关系的当事人履行质权人所要求的行为，并为本协议赋予质权人之权利、授权的行使提供便利，与质权人或其指定的人(自然人/法人)签署所有的有关股权所有权的文件，并在合理期间内向质权人提供其认为需要的所有的有关质权的通知、命令及决定。To protect or perfect the security interest granted by this Agreement for payment of all payment in pledge under the Business Cooperation Agreement,Pledgors hereby undertake to execute in good faith and to cause other parties who have an interest in the Pledge to execute all certificates, agreements,deeds and/or covenants required by Pledgee. Pledgors also undertake to perform and to cause other parties who have an interest in the Pledge toperform actions required by Pledgee, to facilitate the exercise by Pledgee of its rights and authority granted thereto by this Agreement, and to enter intoall relevant documents regarding ownership of Equity Interest with Pledgee or designee(s) of Pledgee (natural persons/legal persons). Pledgorsundertake to provide Pledgee within a reasonable time with all notices, orders and decisions regarding the Pledge that are required by Pledgee.6.4出质人向质权人保证，出质人将遵守、履行本协议项下所有的保证、承诺、协议、陈述及条件。如出质人不履行或不完全履行其保证、承诺、协议、陈述及条件，出质人应赔偿质权人由此遭受的一切损失。Pledgors hereby undertake to comply with and perform all guarantees, promises, agreements, representations and conditions under this Agreement. Inthe event of failure the whole or partial performance of its guarantees, promises, agreements, representations and conditions, Pledgors shall indemnifyPledgee for all losses resulting therefrom.8秘密文件 Strictly Confidential7.违约事件Event of Default7.1下列事项均被视为违约事件：The following circumstances shall be deemed Event of Default:7.1.1丙方未能按期、完整履行任何业务合作协议项下责任，包括但不限于丙方未能按期足额支付业务合作协议项下的应付的被担保债务或有违反该协议其他义务的行为；Party C fails to fully and timely fulfill any liabilities under the Business Cooperation Agreement, including without limitation failure to pay infull any of the all payment in pledge payable under the Business Cooperation Agreement or breaches any other obligations of Party Cthereunder;7.1.2出质人或丙方实质违反本协议的任何条款；Pledgors or Party C have committed a material breach of any provisions of this Agreement;7.1.3除本协议第6.1.1条的约定外，出质人舍弃出质的股权或未获得质权人书面同意而擅自转让或意图转让出质的股权；和Except as expressly stipulated in Section 6.1.1, Pledgors transfers or purports to transfer or abandons the Equity Interest pledged or assignsthe Equity Interest pledged without the written consent of Pledgee; and7.1.4丙方的继承人或代管人只能履行部分或拒绝履行业务合作协议项下的支付责任。The successor or custodian of Party C is capable of only partially perform or refuses to perform the payment obligations under the BusinessCooperation Agreement.9秘密文件 Strictly Confidential7.2如知道或发现本第7.1条所述的任何事项或可能导致上述事项的事件已经发生，出质人应立即以书面形式通知质权人。Upon notice or discovery of the occurrence of any circumstances or event that may lead to the aforementioned circumstances described in Section 7.1,Pledgors shall immediately notify Pledgee in writing accordingly.7.3除非第7.1部分下的违约事件在质权人向出质人发出要求其修补此违约行为通知后的二十（20）天之内已经按质权人要求获得救济，质权人在其后的任何时间，可向出质人发出书面违约通知，要求依据第8部分履行其处理股权的权利。Unless an Event of Default set forth in this Section 7.1 has been successfully resolved to Pledgee's satisfaction within twenty (20) days after the Pledgeedelivers a notice to the Pledgors requesting ratification of such Event of Default, Pledgee may issue a Notice of Default to Pledgors in writing at any timethereafter, demanding the Pledgors to immediately dispose of the Pledge in accordance with the provisions of Article 8 of this Agreement.8.质权的行使Exercise of Pledge8.1在被担保债务被全部清偿或履行前，未经质权人书面同意，出质人不得转让本质权和其拥有的丙方股权。Prior to the full payment of all payments in pledge, without the Pledgee's written consent, Pledgors shall not assign the Pledge or the Equity Interest inParty C.8.2在质权人行使其质押权利时，质权人可以向出质人发出书面违约通知。Pledgee may issue a Notice of Default to Pledgors when exercising the Pledge.10秘密文件 Strictly Confidential8.3在质权人行使其质押权利时，根据中国有关法律的规定，质权人有权按照法定程序处置质押股权。仅在中国法律允许的范围内，对于处置的所得，质权人无需给付出质人；除非中国法律另有规定，出质人特此放弃其可能有的能向质权人要求任何质押股权处置所得的权利；同样，出质人对质权人在该质押股权处置后的亏损也不承担任何义务。When the Pledgor exercises the pledge right, Pledgee is entitled to dispose of the Equity Interest pledged in accordance with applicable PRC laws. Onlyto the extent permitted under applicable PRC laws, Pledgee has no obligation to account to Pledgors for proceeds of disposition of the Equity Interest.Unless otherwise required by PRC laws, Pledgors hereby waive any rights it may have to demand any such accounting from Pledgee; Likewise, in suchcircumstance Pledgors shall have no obligation to Pledgee for any deficiency remaining after such disposition of the Equity Interest pledged.8.4质权人依照本协议处分质权时，出质人和丙方应予以必要的协助，以使质权人实现其质权。When Pledgee disposes of the Pledge in accordance with this Agreement, Pledgors and Party C shall provide necessary assistance to enable Pledgee toenforce the Pledge in accordance with this Agreement.9.转让Assignment9.1除非经质权人事先同意，出质人无权赠予或转让其在本协议项下的权利义务。Without Pledgee's prior written consent, Pledgors shall not have the right to assign or delegate its rights and obligations under this Agreement.11秘密文件 Strictly Confidential9.2本协议对出质人及其继任人和经许可的受让人均有约束力，并且对质权人及每一继任人和受让人有效。This Agreement shall be binding on Pledgors and their successors and permitted assigns, and shall be valid with respect to Pledgee and each of itssuccessors and assigns.9.3经出质人同意，质权人可以在任何时候将其在业务合作协议项下的所有或任何权利和义务转让给其指定的关联方（自然人/法人），在这种情况下，受让人应享有和承担本协议项下质权人享有和承担的权利和义务，如同其作为原协议方应享有和承担的一样。质权人转让业务合作协议项下的权利和义务时，应质权人要求，出质人应就此转让签署有关协议和/或文件。Upon the Pledgors’ agreement, Pledgee may assign any or all of its rights and obligations under the Business Cooperation Agreement to its designee(s)(natural/legal persons) at any time, in which case the assigns shall have the rights and obligations of Pledgee under this Agreement, as if it were theoriginal party to this Agreement. When the Pledgee assigns the rights and obligations under the Business Cooperation Agreement, upon Pledgee'srequest, Pledgors shall execute relevant agreements or other documents relating to such assignment.9.4因转让所导致的质权人变更后，应质权人要求，出质人应与新的质权人签订一份内容与本协议一致的新质押协议，并在相应的工商行政管理机关进行登记。In the event of a change in Pledgee due to an assignment, Pledgors shall, at the request of Pledgee, execute a new pledge agreement with the newpledgee on the same terms and conditions as this Agreement, and register the same with the relevant AIC.12秘密文件 Strictly Confidential9.5出质人应严格遵守本协议和各方单独或共同签署的其他有关协议的规定，包括独家购买权合同和对质权人的授权委托书，履行各协议项下的义务，并不进行任何足以影响协议的有效性和可强制执行性的作为/不作为。除非根据质权人的书面指示，出质人不得行使其对质押股权还留存的权利。Pledgors shall strictly abide by the provisions of this Agreement and other contracts jointly or separately executed by the Parties hereto or any of them,including the Exclusive Option Agreement and the Power of Attorney granted to Pledgee, perform the obligations hereunder and thereunder, and refrainfrom any action/omission that may affect the effectiveness and enforceability thereof. Any remaining rights of Pledgors with respect to the EquityInterest pledged hereunder shall not be exercised by Pledgors except in accordance with the written instructions of Pledgee.10.终止Termination在被担保债务被全部清偿或履行完毕之后，本质权人应在尽早合理可行的时间内办理或配合办理解除质押的手续，出质人与丙方应提供相应的配合与协助。Upon the full payment of all payments in pledge under the Business Cooperation Agreement a, Pledgor shall then, with the assistance of Party B and Party C,go through the procedures of cancellation of pledge rights at a reasonable time as soon as practicable.11.手续费及其他费用Handling Fees and Other Expenses一切与本协议有关的费用及实际开支，其中包括但不限于法律费用、工本费、印花税以及任何其他税收、费用等全部由丙方承担。All fees and out of pocket expenses relating to this Agreement, including but not limited to legal costs, costs of production, stamp tax and any other taxes andfees, shall be borne by Party C.13秘密文件 Strictly Confidential12.保密责任Confidentiality各方承认及确定有关本协议、本协议内容，以及彼此就准备或履行本协议而交换的任何口头或书面资料均被视为保密信息。各方应当对所有该等保密信息予以保密，而在未得到另一方书面同意前，不得向任何第三者披露任何保密信息，惟下列信息除外：(a)公众人士知悉或将会知悉的任何信息（惟并非由接受保密信息之一方擅自向公众披露）；(b)根据适用法律法规、股票交易规则、或政府部门或法院的命令而所需披露之任何信息；或(c)由任何一方就本协议所述交易而需向其股东、投资者、法律或财务顾问披露之信息，而该股东、法律或财务顾问亦需遵守与本条款相类似之保密责任。如任何一方工作人员或聘请机构的泄密均视为该方的泄密，需依本协议承担违约责任。无论本协议以任何理由终止，本条款仍然生效。The Parties acknowledge that the existence and the terms of this Agreement and any oral or written information exchanged between the Parties in connectionwith the preparation and performance this Agreement are regarded as confidential information. Each Party shall maintain confidentiality of all such confidentialinformation, and without obtaining the written consent of the other Party, it shall not disclose any relevant confidential information to any third parties, exceptfor the information that: (a) is or will be in the public domain (other than through the receiving Party’s unauthorized disclosure); (b) is under the obligation tobe disclosed pursuant to the applicable laws or regulations, rules of any stock exchange, or orders of the court or other government authorities; or (c) isrequired to be disclosed by any Party to its shareholders, investors, legal counsels or financial advisors regarding the transaction contemplated hereunder,provided that such shareholders, investors, legal counsels or financial advisors shall be bound by the confidentiality obligations similar to those set forth inthis Section. Disclosure of any confidential information by the staff members or agencies hired by any Party shall be deemed disclosure of such confidentialinformation by such Party, which Party shall be held liable for breach of this Agreement. This Section shall survive the termination of this Agreement for anyreason.14秘密文件 Strictly Confidential13.适用法律和争议的解决Governing Law and Resolution of Disputes13.1本协议的订立、效力、解释、履行、修改和终止以及争议的解决均适用中国法律。The execution, effectiveness, construction, performance, amendment and termination of this Agreement and the resolution of disputes hereunder shallbe governed by the laws of China.13.2因解释和履行本协议而发生的任何争议，本协议各方应首先通过友好协商的方式加以解决。如果在一方向其他方发出要求协商解决的书面通知后30天之内争议仍然得不到解决，则任何一方均可将有关争议提交给中国国际经济贸易仲裁委员会，由该会按照其仲裁规则仲裁解决。仲裁应在北京进行，使用之语言为中文。仲裁裁决是终局性的，对各方均有约束力。In the event of any dispute with respect to the construction and performance of this Agreement, the Parties shall first resolve the dispute throughfriendly negotiations. In the event the Parties fail to reach an agreement on the dispute within 30 days after either Party's request to the other Parties forresolution of the dispute through negotiations, either Party may submit the relevant dispute to the China International Economic and Trade ArbitrationCommission for arbitration, in accordance with its Arbitration Rules. The arbitration shall be conducted in Beijing, and the language used in arbitrationshall be Chinese. The arbitration award shall be final and binding on all Parties.13.3因解释和履行本协议而发生任何争议或任何争议正在进行仲裁时，除争议的事项外，本协议各方仍应继续行使各自在本协议项下的其他权利并履行各自在本协议项下的其他义务。Upon the occurrence of any disputes arising from the construction and performance of this Agreement or during the pending arbitration of any dispute,except for the matters under dispute, the Parties to this Agreement shall continue to exercise their respective rights under this Agreement and performtheir respective obligations under this Agreement.15秘密文件 Strictly Confidential14.通知Notices14.1本协议项下要求或发出的所有通知和其他通信应通过专人递送、挂号邮寄、邮资预付或商业快递服务或传真的方式发到该方下列地址。每一通知还应再以电子邮件送达。该等通知视为有效送达的日期按如下方式确定：All notices and other communications required or permitted to be given pursuant to this Agreement shall be delivered personally or sent by registeredmail, postage prepaid, by a commercial courier service or by facsimile transmission to the address of such party set forth below. A confirmation copy ofeach notice shall also be sent by Email. The dates on which notices shall be deemed to have been effectively given shall be determined as follows:14.1.1通知如果是以专人递送、快递服务或挂号邮寄、邮资预付发出的，则以于设定为通知的地址在接收或拒收之日为有效送达日。Notices given by personal delivery, by courier service or by registered mail, postage prepaid, shall be deemed effectively given on the date ofreceipt or refusal at the address specified for notices.14.1.2通知如果是以传真发出的，则以成功传送之日为有效送达日（应以自动生成的传送确认信息为证）。Notices given by facsimile transmission shall be deemed effectively given on the date of successful transmission (as evidenced by anautomatically generated confirmation of transmission).16秘密文件 Strictly Confidential14.2为通知的目的，各方地址如下：For the purpose of notices, the addresses of the Parties are as follows:甲方：中传天下信息科技（深圳）有限公司Party A: Zhongchuan Tianxia Information Technology (Shenzhen) Co., Ltd.地址：深圳市南山区高新中三道2号深圳软件园一期五栋401AAddress: 401A, Building 5, Phase 1, Shenzhen Software Park, No.2 Gaoxin Zhongsan Road, Nanshan District, Shenzhen.收件人：洪婷Attn: Hong Ting乙方：Party B:a)宋雪松Song Xuesong地址：125.Expenses, including legal fees, incurred by a director in defending any legal, administrative or investigative proceedings may be paid by the Company inadvance of the final disposition of such proceedings upon receipt of an undertaking by or on behalf of the director to repay the amount if it shall ultimatelybe determined that the director is not entitled to be indemnified by the Company in accordance with these Articles.126.Expenses, including legal fees, incurred by a former director in defending any legal, administrative or investigative proceedings may be paid by theCompany in advance of the final disposition of such proceedings upon receipt of an undertaking by or on behalf of the former director to repay the amountif it shall ultimately be determined that the director is not entitled to be indemnified by the Company in accordance with these Articles.127.The indemnification and advancement of expenses provided by, or granted pursuant to, these Articles is not exclusive of any other rights to which theperson seeking indemnification of advancement of expenses may be entitled under any agreement, resolution of members, resolution of disinteresteddirectors or otherwise, both as to acting in the person’s official capacity and as to acting in another capacity while serving as a director of the Company.128.If a person to be indemnified has been successful in defence of any proceedings referred to above the person is entitled to be indemnified against allexpenses, including legal fees, and against all judgments, fines and amounts paid in settlement and reasonably incurred by the person in connection withthe proceedings.129.The Company may purchase and maintain insurance in relation to any person who is or was a director, an officer or a liquidator of the Company, or who atthe request of the Company is or was serving as a director, an officer or a liquidator of, or in any other capacity is or was acting for, another body corporateor a partnership, joint venture, trust or other enterprise, against any liability asserted against the person and incurred by the person in that capacity,whether or not the Company has or would have had the power to indemnify the person against the liability as provided in these Articles.SEAL130.The Company shall have a Seal and may have more than one Seal. References herein to the Seal shall be references to every Seal which shall have beenduly adopted by resolution of directors. The directors shall provide for the safe custody of the Seal and for an imprint thereof to be kept at the office of theregistered agent of the Company. Except as otherwise expressly provided herein, the Seal when affixed to any written instrument, shall be witnessed andattested to by the signature of a director or any other person so authorized from time to time by resolution of directors. Such authorization may be before orafter the Seal is affixed, may be general or specific and may refer to any number of sealings. The Directors may provide for a facsimile of the Seal and of thesignature of any director or authorized person which may be reproduced by printing or other means on any instrument and it shall have the same force andvalidity as if the Seal had been affixed to such instrument and the same had been signed as hereinbefore described.21DISTRIBUTIONS131.The directors of the Company may by resolution authorise a distribution by the Company at any time and of any amount and to any members they think fitif they are satisfied on reasonable grounds that immediately after the distribution;a.the value of the Company’s assets will exceed its liabilities, andb.the Company will be able to pay its debts as they fall due.132.A resolution of the directors passed under the preceding Article shall contain a statement that, in the opinion of the directors, immediately after thedistribution the value of the Company’s assets will exceed its liabilities, and the Company will be able to pay its debts as they fall due.133.If, after a distribution is authorised and before it is made, the directors cease to be satisfied on reasonable grounds that the Company will, immediately afterthe distribution satisfy the solvency test, any distribution made by the Company is deemed not to have been authorised.134.If, by virtue of the preceding Article, a distribution is deemed not to have been authorised, a director who;a.ceased, after authorisation but before the making of the distribution, to be satisfied on reasonable grounds for believing that the company wouldsatisfy the solvency test immediately after the distribution is made; andb.failed to take reasonable steps to prevent the distribution being made;is personally liable to the company to repay to the company so much of the distribution as is not able to be recovered from members.135.A distribution made to a member at a time when the company did not, immediately after the distribution, satisfy the solvency test may be recovered by thecompany from the member unless;a.the member received the distribution in good faith and without knowledge of the company’s failure to satisfy the solvency test;b.the member has altered his position in reliance on the validity of the distribution; andc.it would be unfair to require repayment in full or at all.DISTRIBUTIONS BY WAY OF DIVIDEND136.The Company may by a resolution of directors declare a distribution by way of dividend and pay such distribution in money, shares or other property. Inthe event that distributions by way of dividend are paid in specie the directors shall have responsibility for establishing and recording in the resolution ofdirectors authorizing the distribution by way of dividend, a fair and proper value for the assets to be so distributed.137.The directors may from time to time pay to the members such interim distributions by way of dividend as appear to the directors to be justified by theprofits of the Company.138.The directors may, before declaring any distribution by way of dividend, set aside out of the profits of the Company such sum as they think proper as areserve fund, and may invest the sum so set aside as a reserve fund upon such securities as they may select.139.Notice of any distribution by way of dividend that may have been declared shall be given to each member in the manner hereinafter mentioned and alldistributions by way of dividend unclaimed for 3 years after having been declared may be forfeited by resolution of directors for the benefit of theCompany.140.No distribution by way of dividend shall bear interest as against the Company and no distribution by way of dividend shall be paid on treasury shares orshares held by another company of which the Company holds, directly or indirectly, shares having more than 50 percent of the vote in electing directors.22141.A share issued as a distribution by way of dividend by the Company shall be treated for all purposes as having been issued for money equal to the valuedetermined by resolution of the directors. In the absence of fraud the decision of the directors as to the value of the share is conclusive unless a questionof law is involved.142.A division of the issued and outstanding shares of a class or series of shares into a larger number of shares of the same class or series having aproportionately smaller par value does not constitute a distribution by way of dividend of shares.ACCOUNTS AND AUDIT143.The Company may by resolution of members call for the directors to prepare periodically a profit and loss account and a balance sheet. The profit and lossaccount and balance sheet shall be drawn up so as to give respectively a true and fair view of the profit and loss of the Company for the financial periodand a true and fair view of the state of affairs of the Company as at the end of the financial period.144.The Company may by resolution of members call for the accounts to be examined by auditors.145.Subject to the rules of the Designated Stock Exchange, the first auditors shall be appointed by resolution of directors; subsequent auditors shall beappointed by the Audit Committee and shall hold office until the Audit Committee appoint another independent auditor.146.Subject to the rules of the Designated Stock Exchange, the remuneration of the auditors of the Company shall be fixed by the Audit Committee.147.The auditors shall examine each profit and loss account and balance sheet required to be served on every member of the Company or laid before a meetingof the members of the Company and shall state in a written report whether or nota.in their opinion the profit and loss account and balance sheet give a true and fair view respectively of the profit and loss for the period covered bythe accounts, and of the state of affairs of the Company at the end of that period; andb.all the information and explanations required by the auditors have been obtained.148.The report of the auditors shall be annexed to the accounts and shall be read at the meeting of members at which the accounts are laid before the Companyor shall be served on the members.149.Every auditor of the Company shall have a right of access at all times to the books of account and vouchers of the Company, and shall be entitled to requirefrom the directors and officers of the Company such information and explanations as he thinks necessary for the performance of the duties of the auditors.150.The auditors of the Company shall be entitled to receive notice of, and to attend any meetings of members of the Company at which the Company’s profitand loss account and balance sheet are to be presented.NOTICES151.Any notice, information or written statement to be given by the Company to members may be served in any way by which it can reasonably be expected toreach each member or by mail addressed to each member at the address shown in the share register.152.Any summons, notice, order, document, process, information or written statement to be served on the Company may be served by leaving it, or by sendingit by registered mail addressed to the Company, at its registered office, or by leaving it with, or by sending it by registered mail to, the registered agent ofthe Company.153.Service of any summons, notice, order, document, process, information or written statement to be served on the Company may be proved by showing thatthe summons, notice, order, document, process, information or written statement was delivered to the registered office or the registered agent of theCompany or that it was mailed in such time as to admit to its being delivered to the registered office or the registered agent of the Company in the normalcourse of delivery within the period prescribed for service and was correctly addressed and the postage was prepaid.23PENSION AND SUPERANNUATION FUNDS154.The directors may establish and maintain or procure the establishment and maintenance of any noncontributory or contributory pension orsuperannuation funds for the benefit of, and give or procure the giving of donations, gratuities, pensions, allowances or emoluments to, any persons whoare or were at any time in the employment or service of the Company or any company which is a subsidiary of the Company or is allied to or associated withthe Company or with any such subsidiary, or who are or were at any time directors or officers of the Company or of any such other company as aforesaid orwho hold or held any salaried employment or office in the Company or such other company, or any persons in whose welfare the Company or any suchother company as aforesaid is or has been at any time interested, and to the wives, widows, families and dependents of any such person, and may makepayments for or towards the insurance of any such persons as aforesaid, and may do any of the matters aforesaid either alone or in conjunction with anysuch other company as aforesaid. Subject always to the proposal being approved by resolution of members, a director holding any such employment oroffice shall be entitled to participate in and retain for his own benefit any such donation, gratuity, pension allowance or emolument.VOLUNTARY WINDING UP AND DISSOLUTION155.The Company may voluntarily commence to wind up and dissolve by a resolution of members but if the Company has never issued shares it mayvoluntarily commence to wind up and dissolve by resolution of directors.CONTINUATION156.The Company may by resolution of members or by a resolution passed unanimously by all directors of the Company continue as a company incorporatedunder the laws of a jurisdiction outside the British Virgin Islands in the manner provided under those laws.ARBITRATION157.Whenever any difference arises between the Company on the one hand and any of the members or their executors, administrators or assigns on the otherhand, touching the true intent and construction or the incidence or consequences of these Articles or of the Act, touching anything done or executed,omitted or suffered in pursuance of the Act or touching any breach or alleged breach or otherwise relating to the premises or to these Articles, or to anyAct or Ordinance affecting the Company or to any of the affairs of the Company such difference shall, unless the parties agree to refer the same to a singlearbitrator, be referred to 2 arbitrators one to be chosen by each of the parties to the difference and the arbitrators shall before entering on the referenceappoint an umpire.158.If either party to the reference makes default in appointing an arbitrator either originally or by way of substitution (in the event that an appointed arbitratorshall die, be incapable of acting or refuse to act) for 10 days after the other party has given him notice to appoint the same, such other party may appoint anarbitrator to act in the place of the arbitrator of the defaulting party.We, Portcullis TrustNet (BVI) Limited of Portcullis TrustNet Chambers, P.O. Box 3444, Road Town, Tortola, British Virgin Islands for the purpose of incorporating aBVI Business Company under the laws of the British Virgin Islands hereby sign these Articles of Association the 27th day of October, 2009.Incorporator/s/ Nicole WheatleyPortcullis TrustNet (BVI) LimitedPortcullis TrustNet ChambersP.O. Box 3444Road Town, TortolaBritish Virgin Islands(Sgd. Nicole Wheatley)24EX4.15 3 f20f2017ex415_luokung.htm EXCLUSIVE BUSINESS COOPERATION AGREEMENT BY AND BETWEEN ZHONGCHUAN TIANXIA INFORMATIONTECHNOLOGY (SHENZHEN) CO., LTD., AND BEIJING MOBILE VISION TECHNOLOGY CO., LTD., DATED AUGUST 31, 2015Exhibit 4.15独家业务合作协议Exclusive Business Cooperation Agreement本独家业务合作协议（下称“本协议”）由以下双方于年月日在中华人民共和国（下称“中国”）北京市签署。This Exclusive Business Cooperation Agreement (this “Agreement”) is made and entered into by and between the following parties on in Beijing, thePeople’s Republic of China (“China” or the “PRC”).甲方：中传天下信息科技（深圳）有限公司Party A: Zhongchuan Tianxia Information Technology (Shenzhen) Co., Ltd.地址：深圳市南山区高新中三道2号深圳软件园一期五栋401A Address: 401A, Building 5, Phase 1, Shenzhen Software Park, No.2 Gaoxin Zhongsan Road, Nanshan District, Shenzhen统一社会信用代码：91440300565701058R Uniform Social Credit Code: 91440300565701058R乙方：北京中传视讯科技有限公司Party B: Beijing Mobile Vision Technology Co., Ltd.地址：北京市朝阳区光华路9号SOHO3QLAB32Address: LAB32, SOHO3Q, No 9, Guanghua Road, Chaoyang District, Beijing统一社会信用代码：9111010576215249XMUniform Social Credit Code: 9111010576215249XM甲方和乙方以下各称为“一方”，统称为“双方”。Each of Party A and Party B shall be hereinafter referred to as a “Party” respectively, and as “Parties” collectively.1秘密文件Strictly Confidential鉴于：Whereas,1.甲方是一家在中国注册的外商独资企业，拥有丰富的技术研发和产业化推广相关的管理和投资经验，并提供相关的技术支持和咨询服务；Party A is a whollyforeignowned enterprise established in China, which has rich experience in technology research development and industrializationpromotion management and investment, and provides relevant technical support and consulting services;2.乙方是一家在中国成立的有限责任公司，经中国有关政府部门批准依法主要从事手机视频技术开发、内容制作及市场推广；Party B is a limited company in China, mainly engages in mobile video technology research, development, content creation, sale and related industrialpromotion as approved by the relevant governmental authorities in China;3.甲方同意利用其技术、人员和信息优势，在本协议期间向乙方提供有关手机视频技术开发、内容制作及市场推广以及未来扩大业务规模和业务范围时乙方所需的技术支持、技术咨询等相关服务，乙方同意接受甲方或其指定方按本协议条款的规定提供的各种服务。Party A is willing to provide Party B with technology supports and technology consulting services in connection with mobile video technology research,development, content creation, sale and related industrial promotion and such services in connection with Party B’s extension of business scale orbroadening of businesses during the term of this Agreement, utilizing its advantages in technology, human resources, and information, and Party B iswilling to accept such services provided by Party A or Party A's designee(s), each on the terms set forth herein.2秘密文件Strictly Confidential据此，甲方和乙方经协商一致，达成如下协议：Now, therefore, through mutual discussion, the Parties have reached the following agreements:1.服务提供Services Provided by Party A1.1按照本协议条款和条件，乙方在此委任甲方在本协议期间作为乙方的独家服务提供者向乙方提供全面的和手机视频技术开发、内容制作及市场推广相关以及未来扩大业务规模和业务范围时乙方所需的技术支持、业务支持和相关咨询服务，具体内容包括但不限于以下内容：Party B hereby appoints Party A as Party B's exclusive services provider to provide Party B with complete technical support, business supportand related consulting services in connection with mobile video technology research, development, content creation, sale and related industrialpromotion and such services in connection with Party B’s extension of business scale or broadening of businesses during the term of thisAgreement, in accordance with the terms and conditions of this Agreement, which may include but not limited to:1.1.1为乙方提供其手机视频技术开发、内容制作及市场推广业务所需的一切服务支持，为乙方提供相当于包括总经理、行政人员、管理人员、筹划部门、商业运营、人力资源、财务、会计以及与乙方业务相关的一切业务操作所需人员所能提供的服务内容；managing all aspects of Party B’s business of mobile video technology research, development, content creation, sale and relatedindustrial promotion. In this capacity, Party A will procure or engage for Party B the services of a general manager and other managementstaff, including but not limited to personnel responsible for all administration, operations, planning, business development, humanresources, finance, accounting and other operations related to the Business of Party B;3秘密文件Strictly Confidential1.1.2为乙方制定全部的商业计划、销售目标，并为优化执行该等商业计划设计和建立相应的系统及操作程序；developing all business plans and sales projections of Party B, and for developing and establishing systems and procedures for optimumexecution of the business plans;1.1.3为乙方申请手机视频技术及内容制作相关专利提供咨询服务和支持；consulting services and support in connection with Party B’s applying for mobile video technology related patents and content creation;1.1.4为乙方手机视频技术产业化的发展方向、规模、品牌提升提供咨询服务；consulting services in connection with the development directions, size and business brands promotion of Party B’s mobile videotechnology industrialization;4秘密文件Strictly Confidential1.1.5为乙方提供与业务相关的办公、生产和销售服务，为乙方租赁场所，建立业务相关的系统和程序，满足乙方的其他要求；procuring or obtaining for Party B all office, production and distribution services related to the Business. It shall procure or obtainappropriate leases, establish systems and procedures needed to operate the business, fulfill orders for services;1.1.6尽最大努力为乙方建立手机视频技术销售市场，根据甲方为乙方制定的商业计划及销售目标代表乙方获取客户订单，同时为乙方提供与业务相关的客户服务，建立向客户开具票据的程序和与会计相关的托收服务。using its best efforts to establish mobile video technology related marketing and other structures to obtain orders for services &products from customers on behalf of Party B in accordance with Party B’s business plans, sales projections and objectives (asdeveloped by Party A) and procure or obtain customer services required in connection with the Business. It shall also establishprocedures for invoicing customers, and establish collection services with respect to accounts;1.1.7就乙方的劳动用工方面提供咨询服务和支持，包括但不限于，组织实施对乙方业务人员、行政人员、管理人员等人员进行培训和考核，协助建立健全的人力资源管理制度和实现人力资源的良好配置；consulting services and support regarding labor system of Party B, including but without limitation to labor training and evaluation ofsales person, administrative staff and management person etc. and establishment of human resources management system to well;5秘密文件Strictly Confidential1.1.8提供乙方需要的客户数据统计、分析及相关数据库的建设和维护等咨询服务；providing Party B with compile and analysis of client data and consulting services of establishment and maintenance of data base;1.1.9提供乙方需要的软件和相关技术支持服务；providing software Party B requires and other technical support;1.1.10接受乙方委托，对乙方的手机视频技术研发和产业化推广业务经营进行指导和管理；guiding and management on Party B’s business of mobile video technology research and development and related industrial promotionoperation according to Party B’s commission;1.1.11当乙方业务规模发展或业务范围扩大需要时，购买乙方业务经营需要的设备；in the event of the demand of Party B’s development of business scale or broadening of businesses, purchase the equipments which itneeds for the operation of its business;1.1.12当乙方业务规模发展或业务范围扩大需要时，完成乙方项目中的全部或部分工作；in the event of the demand of Party B’s development of business scale or broadening of businesses, complete the work of Party B’sproject in whole or in party;6秘密文件Strictly Confidential1.1.13当乙方业务规模发展或业务范围扩大需要时，开发新技术；in the event of the demand of Party B’s development of business scale or broadening of businesses, develop new technology;1.1.14乙方委托甲方，且甲方接受委托提供的其他服务。other services Party B appoints Party A to provide and Party A agrees to provide.1.2乙方接受甲方的咨询和服务。乙方进一步同意，除非经甲方事先书面同意，在本协议期间，就本协议约定的服务或其他事宜，乙方不得直接或间接地从任何第三方获得任何与本协议相同或类似的咨询和/或服务，并不得与任何第三方就本协议所述事项建立任何类似的合作关系。双方同意，甲方可以指定其他方（该被指定方可以与乙方签署本协议第1.3条描述的某些协议）为乙方提供本协议约定的服务和/或支持。Party B agrees to accept all the consultations and services provided by Party A. Party B further agrees that unless with Party A's prior writtenconsent, during the term of this Agreement, Party B shall not directly or indirectly accept the same or any similar consultations and/or servicesprovided by any third party and shall not establish similar corporation relationship with any third party regarding the matters contemplated by thisAgreement. Party A may appoint other parties, who may enter into certain agreements described in Section 1.3 with Party B, to provide Party Bwith the consultations and/or services under this Agreement.7秘密文件Strictly Confidential1.3服务的提供方式Service Providing Methodology1.3.1双方同意在本协议有效期内，视情况而定，乙方可以与甲方或甲方指定的其他方进一步签订技术服务协议和/或咨询服务协议，对各项业务培训、技术服务、咨询服务的具体内容、方式、人员、收费等进行约定。Parties agree that during the term of this Agreement, where necessary, Party B may enter into further technical service agreements and/orconsulting service agreements with Party A or any other party designated by Party A, which shall provide the specific contents, manner,personnel, and fees for the specific technical services and consulting services.1.3.2为更好地履行本协议，双方同意，在甲方认为必要时，乙方应在本协议有效期内与甲方或甲方指定的其他方根据业务进展需要随时签署协议，由甲方或其指定方向乙方提供服务。To fulfill this Agreement, Parties agree that during the term of this Agreement, where Party A deems necessary, Party B shall enter intoagreements with Party A or any other party designated by Party A which shall set forth that Party A or any other party designated byParty A provide services to Party B based on the needs of the business of Party B.8秘密文件Strictly Confidential2.服务的价格和支付方式The Calculation and Payment of the Service Fees双方同意，就甲方提供的服务，乙方应向甲方支付服务费（“服务费”）。服务费不应低于乙方税后利润的80%。服务费应当按季支付；经甲方事先书面同意，服务费可以根据乙方的经营需要进行调整。Both Parties agree that, in consideration of the services provided by Party A, Party B shall pay Party A fees (the “Service Fees”), which shall not be lessthan 80% of Party B’s aftertax profits . The Service Fees shall be due and payable on a quarterly basis; upon the prior written consent by Party A, the rateof Service Fees may be adjusted pursuant to the operational needs of Party B.3.知识产权和保密条款Intellectual Property Rights and Confidentiality Clauses3.1在中国法律允许的范围内，甲方对履行本协议而产生或创造的任何权利、所有权、权益和所有知识产权包括但不限于著作权、专利权、专利申请权、软件、技术秘密、商业机密及其他均享有独占的和排他的权利和利益。乙方须签署所有适当的文件，采取所有适当的行动，递交所有的文件和/或申请，提供所有适当的协助，以及做出所有其他依据甲方的自行决定认为是必要的行为，以将任何对该等知识产权的所有权、权利和权益赋予甲方，和/或完善对甲方此等知识产权权利的保护。To the extent permitted under the PRC laws, Party A shall have exclusive and proprietary rights and interests in all rights, ownership, interests andintellectual properties arising out of or created during the performance of this Agreement, including but not limited to copyrights, patents, patentapplications, software, technical secrets, trade secrets and others. Party B shall execute all appropriate documents, take all appropriate actions,submit all filings and/or applications, render all appropriate assistance and otherwise conduct whatever is necessary deemed as by Party A in itssole discretion for the purposes of vesting any ownership, right or interest of any such intellectual property rights in Party A, and/or perfectingthe protections for any such intellectual property rights in Party A.9秘密文件Strictly Confidential3.2双方承认及确定有关本协议、本协议内容，以及彼此就准备或履行本协议而交换的任何口头或书面资料均被视为保密信息。双方应当对所有该等保密信息予以保密，而在未得到另一方书面同意前，不得向任何第三者披露任何保密信息，惟下列信息除外：(a)公众人士知悉或将会知悉的任何信息（惟并非由接受保密信息之一方擅自向公众披露）；(b)根据适用法律法规、股票交易规则、或政府部门或法院的命令而所需披露之任何信息；或(c)由任何一方就本协议所述交易而需向其股东、投资者、法律或财务顾问披露之信息，而该股东、法律或财务顾问亦需遵守与本条款相类似之保密责任。如任何一方工作人员或聘请机构的泄密均视为该方的泄密，需依本协议承担违约责任。无论本协议以任何理由终止，本条款仍然生效。The Parties acknowledge that the existence and the terms of this Agreement and any oral or written information exchanged between the Parties inconnection with the preparation and performance this Agreement are regarded as confidential information. Each Party shall maintainconfidentiality of all such confidential information, and without obtaining the written consent of the other Party, it shall not disclose any relevantconfidential information to any third parties, except for the information that: (a) is or will be in the public domain (other than through the receivingParty’s unauthorized disclosure); (b) is under the obligation to be disclosed pursuant to the applicable laws or regulations, rules of any stockexchange, or orders of the court or other government authorities; or (c) is required to be disclosed by any Party to its shareholders, investors,legal counsels or financial advisors regarding the transaction contemplated hereunder, provided that such shareholders, investors, legal counselsor financial advisors shall be bound by the confidentiality obligations similar to those set forth in this Section. Disclosure of any confidentialinformation by the staff members or agencies hired by any Party shall be deemed disclosure of such confidential information by such Party, whichParty shall be held liable for breach of this Agreement. This Section shall survive the termination of this Agreement for any reason.3.3双方同意，不论本协议是否变更、解除或终止，本条款将持续有效。The Parties agree that this Section shall survive changes to, and rescission or termination of, this Agreement.4.陈述和保证Representations and Warranties4.1甲方陈述和保证如下：Party A hereby represents and warrants as follows:4.1.1甲方是按照中国法律合法注册并有效存续的外商独资企业。Party A is a whollyforeignowned enterprise legally registered and validly existing in accordance with the laws of China.10秘密文件Strictly Confidential4.1.2甲方已采取必要的公司行为，获得必要的授权，并取得第三方和政府部门的同意及批准（若需）以签署和履行本协议；甲方对本协议的签署和履行并不违反法律法规的明确规定。Party A has taken all necessary corporate actions, obtained all necessary authorization and the consent and approval from third partiesand government agencies (if any) for the execution and performance of this Agreement. Party A’s execution and performance of thisAgreement do not violate any explicit requirements under any law or regulation binding on Party A.4.1.3本协议构成对其合法、有效、有约束力并依本协议之条款对其强制执行的义务。This Agreement constitutes Party A's legal, valid and binding obligations, enforceable in accordance with its terms.4.2乙方陈述和保证如下：Party B hereby represents and warrants as follows:4.2.1乙方是按照中国法律合法登记且有效存续的有限责任公司，乙方根据政府部门的批准和许可从事手机视频技术开发、内容制作和产业化市场推广的经营。Party B is a limited company legally registered and validly existing in accordance with the laws of China, engages in mobile videotechnology research, development, content creation, sale and related industrial promotion pursuant to governmental approvals andpermits;11秘密文件Strictly Confidential4.2.2乙方已采取必要的行为，获得必要的授权，并取得第三方和政府部门的同意及批准（若需）以签署和履行本协议；乙方对本协议的签署和履行并不违反法律法规的明确规定。Party B has taken all necessary actions, obtained all necessary authorization and the consent and approval from third parties andgovernment agencies (if any) for the execution and performance of this Agreement. Party B’s execution and performance of thisAgreement do not violate any explicit requirements under any law or regulation binding on Party B.4.2.3本协议构成对其合法、有效、有约束力并依本协议之条款对其强制执行的义务。This Agreement constitutes Party B's legal, valid and binding obligations, and shall be enforceable against it.5.生效和有效期Effectiveness and Term5.1本协议于文首标明的协议日期签署并同时生效。除非依本协议或双方其他协议的约定而提前终止，本协议有效期为20年，但甲、乙双方应自本协议签署后，每3个月对本协议的内容做一次审查，以决定是否需要根据当时的情况对本协议作出相应修改和补充。This Agreement is executed on the date first above written and shall take effect as of such date. Unless earlier terminated in accordance with theprovisions of this Agreement or relevant agreements separately executed between the Parties, the term of this Agreement shall be 20 years. Afterthe execution of this Agreement, both Parties shall review this Agreement every 3 months to determine whether to amend or supplement theprovisions in this Agreement based on the actual circumstances at that time.12秘密文件Strictly Confidential5.2协议期满前，经甲方书面确认，本协议可以延期。延期的期限由甲方决定，乙方必须无条件地同意该延期。The term of this Agreement may be extended if confirmed in writing by Party A prior to the expiration thereof. The extended term shall bedetermined by Party A, and Party B shall accept such extended term unconditionally.6.终止Termination6.1除非依据本协议续期，本协议于到期之日终止。Unless renewed in accordance with the relevant terms of this Agreement, this Agreement shall be terminated upon the date of expiration hereof.6.2本协议有效期内，除非甲方对乙方有重大过失或存在欺诈行为，乙方不得提前终止本协议。尽管如此，甲方可在任何时候通过提前30天向乙方发出书面通知的方式终止本协议。During the term of this Agreement, unless Party A commits gross negligence, or a fraudulent act, against Party B, Party B shall not terminate thisAgreement prior to its expiration date. Nevertheless, Party A shall have the right to terminate this Agreement upon giving 30 days' prior writtennotice to Party B at any time.6.3在本协议终止之后，双方在第3、7和8条项下的权利和义务将继续有效。The rights and obligations of the Parties under Articles 3, 7 and 8 shall survive the termination of this Agreement.13秘密文件Strictly Confidential7.适用法律和争议解决Governing Law and Resolution of Disputes7.1本协议的订立、效力、解释、履行、修改和终止以及争议的解决适用中国的法律。The execution, effectiveness, construction, performance, amendment and termination of this Agreement and the resolution of disputes hereundershall be governed by the laws of China.7.2因解释和履行本协议而发生的任何争议，本协议双方应首先通过友好协商的方式加以解决。如果在一方向其他方发出要求协商解决的书面通知后30天之内争议仍然得不到解决，则任何一方均可将有关争议提交给中国国际经济贸易仲裁委员会，由该会按照其仲裁规则仲裁解决。仲裁应在北京进行，使用之语言为中文。仲裁裁决是终局性的，对各方均有约束力。In the event of any dispute with respect to the construction and performance of this Agreement, the Parties shall first resolve the dispute throughfriendly negotiations. In the event the Parties fail to reach an agreement on the dispute within 30 days after either Party's request to the otherParties for resolution of the dispute through negotiations, either Party may submit the relevant dispute to the China International Economic andTrade Arbitration Commission for arbitration, in accordance with its Arbitration Rules. The arbitration shall be conducted in Beijing, and thelanguage used in arbitration shall be Chinese. The arbitration award shall be final and binding on all Parties.14秘密文件Strictly Confidential7.3因解释和履行本协议而发生任何争议或任何争议正在进行仲裁时，除争议的事项外，本协议双方仍应继续行使各自在本协议项下的其他权利并履行各自在本协议项下的其他义务。Upon the occurrence of any disputes arising from the construction and performance of this Agreement or during the pending arbitration of anydispute, except for the matters under dispute, the Parties to this Agreement shall continue to exercise their respective rights under this Agreementand perform their respective obligations under this Agreement.8.补偿Indemnification就甲方根据本协议向乙方提供的咨询和服务内容所产生或引起的针对甲方的诉讼、请求或其他要求而招致的任何损失、损害、责任或费用都应由乙方补偿给甲方，以使甲方不受损害，除非该损失、损害、责任或费用是因甲方的重大过失或故意而产生的。Party B shall indemnify and hold harmless Party A from any losses, injuries, obligations or expenses caused by any lawsuit, claims or other demandsagainst Party A arising from or caused by the consultations and services provided by Party A to Party B pursuant this Agreement, except where suchlosses, injuries, obligations or expenses arise from the gross negligence or willful misconduct of Party A.15秘密文件Strictly Confidential9.通知Notices9.1本协议项下要求或发出的所有通知和其他通信应通过专人递送、挂号邮寄、邮资预付或快递服务或传真的方式发到该方下列地址。每一通知还应再以电子邮件送达。该等通知视为有效送达的日期按如下方式确定：All notices and other communications required or permitted to be given pursuant to this Agreement shall be delivered personally or sent byregistered mail, postage prepaid, by a courier service or by facsimile transmission to the address of such Party set forth below. A confirmationcopy of each notice shall also be sent by email. The dates on which notices shall be deemed to have been effectively given shall be determined asfollows:9.1.1通知如果是以专人递送、快递服务或挂号邮寄、邮资预付发出的，则以于设定为通知的地址在接收或拒收之日为有效送达日。Notices given by personal delivery, by courier service or by registered mail, postage prepaid, shall be deemed effectively given on thedate of receipt or refusal at the address specified for notices.9.1.2通知如果是以传真发出的，则以成功传送之日为有效送达日（应以自动生成的传送确认信息为证）。Notices given by facsimile transmission shall be deemed effectively given on the date of successful transmission (as evidenced by anautomatically generated confirmation of transmission).16秘密文件Strictly Confidential9.2为通知的目的，双方地址如下：For the purpose of notices, the addresses of the Parties are as follows:甲方：中传天下信息科技（深圳）有限公司Party A: Zhongchuan Tianxia Information Technology (Shenzhen) Co., Ltd.地址：深圳市南山区高新中三道2号深圳软件园一期五栋401AAddress:401A, Building 5, Phase 1, Shenzhen Software Park, No.2 Gaoxin Zhongsan Road, Nanshan District, Shenzhen收件人：洪婷Attn: Hong Ting乙方：北京中传视讯科技有限公司Party B: Beijing Mobile Vision Technology Co., Ltd地址：北京市朝阳区光华路9号SOHO3QLAB32Address: LAB32, SOHO3Q, No 9, Guanghua Road, Chaoyang District, Beijing.收件人：宋雪松Attn.: Song Xuesong9.3任何一方可按本条规定随时给另一方发出通知来改变其接收通知的地址。Any Party may at any time change its address for notices by a notice delivered to the other Party in accordance with the terms hereof.17秘密文件Strictly Confidential10.协议的转让Assignment10.1乙方不得将其在本协议项下的权利与义务转让给第三方，除非事先征得甲方的书面同意。Without Party A's prior written consent, Party B shall not assign its rights and obligations under this Agreement to any third party.10.2乙方在此同意，甲方可以在其需要时向其他第三方转让其在本协议项下的权利和义务，并在该等转让发生时甲方仅需向乙方发出书面通知，并且无需再就该等转让征得乙方的同意。Party B agrees that Party A may assign its obligations and rights under this Agreement to any third party upon a prior written notice to Party Bbut without the consent of Party B.11.协议的分割性Severability如果本协议有任何一条或多条规定根据任何法律或法规在任何方面被裁定为无效、不合法或不可执行，本协议其余规定的有效性、合法性或可执行性不应因此在任何方面受到影响或损害。双方应通过诚意磋商，争取以法律许可以及双方期望的最大限度内有效的规定取代那些无效、不合法或不可执行的规定，而该等有效的规定所产生的经济效果应尽可能与那些无效、不合法或不能强制执行的规定所产生的经济效果相似。In the event that one or several of the provisions of this Agreement are found to be invalid, illegal or unenforceable in any aspect in accordance with anylaws or regulations, the validity, legality or enforceability of the remaining provisions of this Agreement shall not be affected or compromised in any aspect.The Parties shall strive in good faith to replace such invalid, illegal or unenforceable provisions with effective provisions that accomplish to the greatestextent permitted by law and the intentions of the Parties, and the economic effect of such effective provisions shall be as close as possible to the economiceffect of those invalid, illegal or unenforceable provisions.18秘密文件Strictly Confidential12.协议的修改、补充Amendments and Supplements双方可以书面协议方式对本协议作出修改和补充。经过双方签署的有关本协议的修改协议和补充协议是本协议组成部分，具有与本协议同等的法律效力。Any amendments and supplements to this Agreement shall be in writing. The amendment agreements and supplementary agreements that have beensigned by the Parties and that relate to this Agreement shall be an integral part of this Agreement and shall have the same legal validity as this Agreement.13.语言和副本Language and Counterparts本协议以中文和英文书就，一式二份，甲乙双方各持一份，具有同等效力；中英文版本如有冲突，应以中文版为准。This Agreement is written in both Chinese and English language in two copies, each Party having one copy with equal legal validity; in case there is anyconflict between the Chinese version and the English version, the Chinese version shall prevail.本页其余部分刻意留为空白The Remainder of this page is intentionally left blank19秘密文件Strictly Confidential有鉴于此，双方已使得经其授权的代表于文首所述日期签署了本独家业务合作协议并即生效，以昭信守。IN WITNESS WHEREOF, the Parties have caused their authorized representatives to execute this Exclusive Business Cooperation Agreement as of thedate first above written.甲方：中传天下信息科技（深圳）有限公司（盖章）Party A: Zhongchuan Tianxia Information Technology (Shenzhen) Co., Ltd.(Seal)签字：By: /s/ Hong Ting 姓名：洪婷Name: Hong Ting职务：总经理Title: General Manager20秘密文件Strictly Confidential有鉴于此，双方已使得经其授权的代表于文首所述日期签署了本独家业务合作协议并即生效，以昭信守。IN WITNESS WHEREOF, the Parties have caused their authorized representatives to execute this Exclusive Business Cooperation Agreement as of thedate first above written. 乙方：北京中传视讯科技有限公司（盖章）Party B: Beijing Mobile Vision Technology Co., Ltd. (Seal)签字：By: /s/ Song Xuesong 姓名：宋雪松Name: Song Xuesong职务：董事长Title: Chairman of the Board21秘密文件Strictly ConfidentialEX4.16 4 f20f2017ex416_luokung.htm EXCLUSIVE OPTION AGREEMENT BY AND AMONG ZHONGCHUAN TIANXIA INFORMATION TECHNOLOGY(SHENZHEN) CO., LTD., XUESONG SONG, WEILI CHEN, PING WANG, DONGLAI LIU, AND BEIJING MOBILE VISION TECHNOLOGY CO., LTD., DATEDAUGUST 31, 2015Exhibit 4.16独家购买权协议Exclusive Option Agreement本独家购买权协议 (下称“本协议”) 由以下各方于年月日在中华人民共和国（下称“中国”）北京签订：This Exclusive Option Agreement (this “Agreement”) is executed by and among the Parties below as of in Beijing, the People’s Republic of China (the“China” or “PRC”):甲方：中传天下信息科技（深圳）有限公司，一家依照中国法律设立和存在的外商独资企业，地址为深圳市南山区高新中三道2号深圳软件园一期五栋401A；Party A:Zhongchuan Tianxia Information Technology (Shenzhen) Co., Ltd., a whollyforeignowned enterprise organized and existing under the laws of China,with its address at 401A, Building 5, Phase 1, Shenzhen Software Park, No.2 Gaoxin Zhongsan Road, Nanshan District, Shenzhen.乙方：Party B:a)宋雪松Song Xuesong身份证号码:120112196809040417ID Card No.:120112196809040417住所：天津市河西区广东路中裕园33702Address:Zhongyu Yuan 33702, Guangdong Road, Hexi District, Tianjinb)陈蔚力Chen Weili身份证号码:120106197309240516ID Card No.:120106197309240516住所：广东省深圳市宝安区宝城上川路15号Address:Baocheng Shangchuan Road 15, Baoan District, Shenzhen, Guangdong1秘密文件Strictly Confidentialc)王平Wang Ping身份证号码:35020319691030401xID Card No.:35020319691030401x住所：广东省深圳市南山区高新南环路36号彩虹之岸12栋4AAddress:Caihong Zhi’an Building No.12 Suite 4A, Gaoxin Nanhuan Road 36, Nanshan District, Shenzhen, Guangdongd)刘东来Liu Donglai身份证号码:120107196810103912ID Card No.:120107196810103912住所：天津市和平区南京路诚基经贸中心1号楼2门1702号Address:No 1702, Door 2, Build 1, Chengji Economic and Trade Centre, Nanjing Road, Heping District, Tianjin.丙方：北京中传视讯科技有限公司，一家依照中国法律设立和存在的有限责任公司，地址为北京市朝阳区光华路9号SOHO3QLAB32，统一社会信用代码为9111010576215249XM；Party C:Beijing Mobile Vision Technology Co., Ltd., a limited company duly registered in China, with its address at LAB32, SOHO3Q, No 9, Guanghua Road,Chaoyang District, Beijing and its uniform social credit code of 9111010576215249XM.2秘密文件Strictly Confidential在本协议中，甲方、乙方和丙方以下各称“一方”，合称“各方”。In this Agreement, each of Party A, Party B and Party C shall be referred to as a “Party” respectively, and they shall be collectively referred to as the“Parties”.鉴于，乙方系丙方股东并合计持有丙方100%股权，乙方将按本协议之条款授予甲方购买全部或部分该股权的权利。Whereas, Party B are the shareholders of Party C and jointly hold 100% of the equity interest in Party C, and Party B are willing to grant to Party A the rightto acquire such equity interest, in whole or in part, on the terms herein.现各方协商一致，达成如下协议：Now therefore, upon mutual discussion and negotiation, the Parties have reached the following agreement:1.股权买卖Sale and Purchase of Equity Interest1.1授予权利Option Granted乙方在此不可撤销地授予甲方在中国法律允许的前提下，按照甲方自行决定的行使步骤，并按照本协议第1.3条所述的价格，随时一次或多次从乙方购买或指定一人或多人(“被指定人”)从乙方购买其目前和将来所持有的丙方的全部或部分股权（无论乙方出资额和/或持股比例将来是否发生变化）的一项不可撤销的专有权(“股权购买权”)。除甲方和被指定人外，任何第三人均不得享有股权购买权或其他与乙方股权有关的权利。丙方特此同意乙方向甲方授予股权购买权。本款及本协议所规定的“人”指个人、公司、合营企业、合伙、企业、信托或非公司组织。Party B hereby irrevocably grant Party A an irrevocable and exclusive right to purchase, or designate one or more persons (each, a “Designee”) topurchase the equity interests in Party C now and in the future held by Party B (regardless whether Party B’s capital contribution amount and/orpercentage of shareholding will be changed in the future) once or at multiple times at any time in part or in whole at Party A’s sole and absolutediscretion to the extent permitted by Chinese laws and at the price described in Section 1.3 herein (such right being the “Equity Interest PurchaseOption”). Except for Party A and the Designee(s), no other person shall be entitled to the Equity Interest Purchase Option or other rights withrespect to the equity interests of Party B. Party C hereby agrees to the grant by Party B of the Equity Interest Purchase Option to Party A. Theterm “person” as used herein shall refer to individuals, corporations, partnerships, partners, enterprises, trusts or noncorporate organizations.3秘密文件Strictly Confidential1.2行使步骤Steps for Exercise of Equity Interest Purchase Option甲方行使其股权购买权以符合中国法律和法规的规定为前提。甲方行使股权购买权时，应向乙方发出书面通知(“股权购买通知”)，股权购买通知应载明以下事项：(a)甲方关于行使股权购买权的决定；(b)甲方拟从乙方购买的股权份额(“被购买的股权”)；和(c)被购买的股权的买入日期。Subject to the provisions of the laws and regulations of China, Party A may exercise the Equity Interest Purchase Option by issuing a writtennotice to Party B (the “Equity Interest Purchase Option Notice”), specifying: (a) Party A’s decision to exercise the Equity Interest PurchaseOption; (b) the portion of equity interests to be purchased from Party B (the “Optioned Interests”); and (c) the date for purchasing the OptionedInterests.1.3股权买价Equity Interest Purchase Price被购买的股权的买价（“股权买价”）应是行权当时中国法律允许的最低价格。乙方收到该股权对价后，应当提供给丙方与该股权买价相同金额的借款，该借款的期限为20年，且为无息。乙方应当在该借款期限届满时就该借款放弃对丙方的债权。The purchase price of the Optioned Interests (the “Equity Interest Purchase Price”) shall be the lowest price permitted by the laws of China. Afterreceiving the Equity Interest Purchase Price, Party B shall make an interestfree loan equivalent to the amount of Equity Interest Purchase Price toParty C, of which term is 20 years. Each member of Party B shall give up his(her) creditor’s right when the loan term expires.4秘密文件Strictly Confidential1.4转让被购买股权Transfer of Optioned Interests甲方每次行使股权购买权时：For each exercise of the Equity Interest Purchase Option:1.4.1乙方应责成丙方及时召开股东会会议，在该会议上，应通过批准乙方向甲方和/或被指定人转让被购买的股权的决议；Party B shall cause Party C to promptly convene a shareholders meeting, at which a resolution shall be adopted approving Party B’stransfer of the Optioned Interests to Party A and/or the Designee(s);1.4.2乙方应就其向甲方和/或被指定人转让被购买股权取得丙方其他股东同意该转让并放弃优先购买权的书面声明。Party B shall obtain written statements from the other shareholder of Party C giving consent to the transfer of the equity interest to PartyA and/or the Designee(s) and waiving any right of first refusal related thereto.1.4.3乙方应与甲方和/或(在适用的情况下)被指定人按照本协议及股权购买通知的规定，为每次转让签订股权转让协议；Party B shall execute a share transfer contract with respect to each transfer with Party A and/or each Designee (whichever is applicable),in accordance with the provisions of this Agreement and the Equity Interest Purchase Option Notice regarding the Optioned Interests;5秘密文件Strictly Confidential1.4.4有关方应签署所有其他所需协议、协议或文件，取得全部所需的政府批准和同意，并采取所有所需行动，在不附带任何担保权益的情况下，将被购买的股权的有效所有权转移给甲方和/或被指定人并使甲方和/或被指定人成为被购买的股权的登记在册所有人。为本款及本协议的目的，“担保权益”包括担保、抵押、第三方权利或权益，任何购股权、收购权、优先购买权、抵销权、所有权扣留或其他担保安排等；但为了明确起见，不包括在本协议、乙方股权质押协议项下产生的任何担保权益。本款及本协议所规定的“乙方股权质押协议”指甲方、乙方和丙方于本协议签署之日签订的股权质押协议，根据股权质押协议，乙方为担保丙方能履行丙方与甲方签订的独家业务合作协议项下的义务，而向甲方质押其在丙方的全部乙方股权。The relevant Parties shall execute all other necessary contracts, agreements or documents, obtain all necessary government licenses andpermits and take all necessary actions to transfer valid ownership of the Optioned Interests to Party A and/or the Designee(s),unencumbered by any security interests, and cause Party A and/or the Designee(s) to become the registered owner(s) of the OptionedInterests. For the purpose of this Section and this Agreement, “security interests” shall include securities, mortgages, third party’s rightsor interests, any stock options, acquisition right, right of first refusal, right to offset, ownership retention or other security arrangements,but shall be deemed to exclude any security interest created by this Agreement and Party B’s Equity Interest Pledge Agreement. “PartyB’s Equity Interest Pledge Agreement” as used in this Section and this Agreement shall refer to the Equity Interest Pledge Agreementexecuted by and among Party A, Party B and Party C on the date of this Agreement, whereby Party B pledge all of their equity interests inParty C to Party A, in order to guarantee Party C’s performance of its obligations under the Exclusive Business Corporation Agreementexecuted by and between Party C and Party A.6秘密文件Strictly Confidential2.知识产权独家购买权Exclusive Option regarding the Intellectual Property Rights2.1本协议签订之日起，若乙方拟转让、出售或以其他方式处置（任一处置方式以下简称“转让”）其拥有或持有的全部或部分知识产权（以下称“知识产权”，定义见第2.4条），甲方有权独家购买该等知识产权。From the date hereof, if Party B proposes to transfer, sell or dispose of (each, a “transfer”) all or any part of the intellectual property rights ownedor held by Party B (“IPR”), Party A shall have exclusive option.2.2若乙方有意转让全部或部分知识产权，应事先向甲方发出书面通知(“转让通知”)，转让通知应载明以下事项：(a) 乙方关于转让知识产权的意向；(b) 乙方拟转让的知识产权清单(“拟转让知识产权”)及转让的价格和其他条件。转让通知视为乙方向甲方发出的一份要约，按照该要约，乙方同意按转让通知中指定的价格条件向甲方转让全部或部分拟转让知识产权。Prior to Party B proposes to transfer all or any part of its IPR, Party B shall give Party A a written notice (“Transfer Notice”), which shall specify (a)Party B’s intention to make the transfer; (b) the list of IPR to be transferred (“Offered IPR”) and the consideration and other conditions uponwhich the transfer is to be made. The Transfer Notice constitutes Party B’s offer given to Party A, pursuant to which, Party B agrees to transfer allor any part of its Offered IPR to Party A based on the same conditions described in the Transfer Notice.7秘密文件Strictly Confidential2.3甲方收到转让通知后，有权在30日内选择按照转让通知中列明的转让价格和条件购买拟转让知识产权。如果甲方行使其独家购买权，双方应于甲方收到转让通知后45日内签订有关的知识产权转让协议，乙方应办理法律规定的知识产权转让的批准和登记手续。Party A shall have an option for a period of 30 days from Party A’s receipt of the Transfer Notice to elect to purchase the Offered IPR at the sameprice and subject to the same conditions as described in the Transfer Notice. If Party A decides to exercise its exclusive option, the parties shallenter into relevant IPR transfer agreement within 45 days upon Party A’s receipt of the Transfer Notice and Party B is responsible to complete allrelated approvals and registrations formalities as prescribed by the PRC law.2.4本协议第2条所称“知识产权”指任何知识产权，包括但不限于著作权、专利权、专利申请权、商标、域名、软件、专有技术，并包括前述知识产权申请权利以及登记注册的权利，以及其他所有与前述知识产权有关的权利和权益。The “IPR” referred to in this Article 2 means any intellectual property rights, including, without limitations, copyrights, patents, patentapplications, trademarks, domain names, software and knowhow together with (a) all rights to apply for or register any of the foregoing and (b) allother rights and interests to any of the foregoing.8秘密文件Strictly Confidential3.承诺Covenants3.1有关丙方的承诺Covenants regarding Party C乙方（作为丙方的股东）和丙方在此承诺：Party B (as the shareholders of Party C) and Party C hereby covenant as follows:3.1.1未经甲方的事先书面同意，不以任何形式补充、更改或修改丙方公司章程文件，增加或减少其注册资本，或以其他方式改变其注册资本结构；Without the prior written consent of Party A, they shall not in any manner supplement, change or amend the articles of association andbylaws of Party C, increase or decrease its registered capital, or change its structure of registered capital in other manners;3.1.2按照良好的财务和商业标准及惯例，保持其公司的存续，审慎地及有效地经营其业务和处理事务；They shall maintain Party C’s corporate existence in accordance with good financial and business standards and practices by prudentlyand effectively operating its business and handling its affairs;3.1.3未经甲方的事先书面同意，不在本协议签署之日起的任何时间出售、转让、抵押或以其他方式处置丙方的任何资产、业务或收入的合法或受益权益，或允许在其上设置任何其他担保权益；Without the prior written consent of Party A, they shall not at any time following the date hereof, sell, transfer, mortgage or dispose of inany manner any assets of Party C or legal or beneficial interest in the business or revenues of Party C, or allow the encumbrance thereonof any security interest;3.1.4未经甲方的事先书面同意，不发生、继承、保证或容许存在任何债务，但(i)正常或日常业务过程中产生而不是通过借款方式产生的债务；和(ii)已向甲方披露和得到甲方书面同意的债务除外；Without the prior written consent of Party A, they shall not incur, inherit, guarantee or suffer the existence of any debt, except for (i)debts incurred in the ordinary course of business other than through loans; and (ii) debts disclosed to Party A for which Party A’swritten consent has been obtained;9秘密文件Strictly Confidential3.1.5一直在正常业务过程中经营所有业务，以保持丙方的资产价值，不进行任何足以影响其经营状况和资产价值的作为/不作为；They shall always operate all of Party C’s businesses during the ordinary course of business to maintain the asset value of Party C andrefrain from any action/omission that may affect Party C’s operating status and asset value;3.1.6未经甲方的事先书面同意，不得让丙方签订任何重大协议，但在正常业务过程中签订的协议除外(就本段而言，如果一份协议的价值超过【人民币10万元】，即被视为重大协议)；Without the prior written consent of Party A, they shall not cause Party C to execute any major contract, except the contracts in theordinary course of business (for purpose of this subsection, a contract with a value exceeding RMB 100,000 shall be deemed a majorcontract);3.1.7未经甲方的事先书面同意，丙方不得向任何人提供贷款或信贷；Without the prior written consent of Party A, they shall not cause Party C to provide any person with any loan or credit;3.1.8应甲方要求，向其提供所有关于丙方的营运和财务状况的资料；They shall provide Party A with information on Party C’s business operations and financial condition at Party A’s request;10秘密文件Strictly Confidential3.1.9如甲方提出要求，丙方应从甲方接受的保险公司处购买和持有有关其资产和业务的保险，该保险的金额和险种应与经营类似业务的公司一致；If requested by Party A, they shall procure and maintain insurance in respect of Party C’s assets and business from an insurance carrieracceptable to Party A, at an amount and type of coverage typical for companies that operate similar businesses;3.1.10未经甲方的事先书面同意，丙方不得与任何人合并或联合，或对任何人进行收购或投资；Without the prior written consent of Party A, they shall not cause or permit Party C to merge, consolidate with, acquire or invest in anyperson;3.1.11将发生的或可能发生的与丙方资产、业务或收入有关的诉讼、仲裁或行政程序立即通知甲方；They shall immediately notify Party A of the occurrence or possible occurrence of any litigation, arbitration or administrative proceedingsrelating to Party C’s assets, business or revenue;3.1.12为保持丙方对其全部资产的所有权，签署所有必要或适当的文件，采取所有必要或适当的行动和提出所有必要或适当的控告或对所有索偿进行必要和适当的抗辩；To maintain the ownership by Party C of all of its assets, they shall execute all necessary or appropriate documents, take all necessary orappropriate actions and file all necessary or appropriate complaints or raise necessary and appropriate defenses against all claims;11秘密文件Strictly Confidential3.1.13未经甲方事先书面同意，不得以任何形式派发股息予各股东，但一经甲方要求，丙方应立即将其所有可分配利润全部立即分配给其各股东；及Without the prior written consent of Party A, they shall ensure that Party C shall not in any manner distribute dividends to itsshareholders, provided that upon Party A’s written request, Party C shall immediately distribute all distributable profits to itsshareholders; and3.1.14根据甲方的要求，委任由其指定的任何人士出任丙方的董事和/或执行董事。At the request of Party A, they shall appoint any persons designated by Party A as the director and/or executive director of Party C.3.2乙方和丙方的承诺Covenants of Party B and Party C乙方承诺：Party B hereby covenant as follows:3.2.1未经甲方的事先书面同意，不出售、转让、抵押或以其他方式处置其拥有的丙方的股权的合法或受益权益，或允许在其上设置任何其他担保权益，但根据乙方签署的《股权质押协议》在该股权上设置的质押则除外；Without the prior written consent of Party A, Party B shall not sell, transfer, mortgage or dispose of in any other manner any legal orbeneficial interest in the equity interests in Party C held by Party B, or allow the encumbrance thereon of any security interest, except forthe pledge placed on these equity interests in accordance with Party B’s Equity Interest Pledge Agreement;12秘密文件Strictly Confidential3.2.2促使丙方股东会和/或执行董事不批准在未经甲方的事先书面同意的情况下，出售、转让、抵押或以其他方式处置任何乙方持有之丙方的股权的合法权益或受益权，或允许在其上设置任何其他担保权益，但批准根据乙方签署的《股权质押协议》在乙方股权上设置的质押则除外；Party B shall cause the shareholders’ meeting and/or the executive director of Party C not to approve the sale, transfer, mortgage ordisposition in any other manner of any legal or beneficial interest in the equity interests in Party C held by Party B, or allow theencumbrance thereon of any security interest, without the prior written consent of Party A, except for the pledge placed on these equityinterests in accordance with Party B’s Equity Interest Pledge Agreement;3.2.3未经甲方的事先书面同意的情况下，对于丙方与任何人合并或联合，或对任何人进行收购或投资，乙方将促成丙方股东会或执行董事不予批准；Party B shall cause the shareholders’ meeting or the executive director of Party C not to approve the merger or consolidation with anyperson, or the acquisition of or investment in any person, without the prior written consent of Party A;3.2.4将发生的或可能发生的任何关于其所拥有的股权的诉讼、仲裁或行政程序立即通知甲方；Party B shall immediately notify Party A of the occurrence or possible occurrence of any litigation, arbitration or administrativeproceedings relating to the equity interests in Party C held by Party B;13秘密文件Strictly Confidential3.2.5促使丙方股东会或执行董事表决赞成本协议规定的被购买的股权的转让并应甲方之要求采取其他任何行动；Party B shall cause the shareholders’ meeting or the executive director of Party C to vote their approval of the transfer of the OptionedInterests as set forth in this Agreement and to take any and all other actions that may be requested by Party A;3.2.6为保持其对股权的所有权，签署所有必要或适当的文件，采取所有必要或适当的行动和提出所有必要或适当的控告或对所有索偿进行必要和适当的抗辩；To the extent necessary to maintain Party B’s ownership in Party C, Party B shall execute all necessary or appropriate documents, take allnecessary or appropriate actions and file all necessary or appropriate complaints or raise necessary and appropriate defenses against allclaims;3.2.7应甲方的要求，委任由其指定的任何人士出任丙方的董事和/或执行董事；Party B shall appoint any designee of Party A as the director and/or executive director of Party C, at the request of Party A;3.2.8经甲方随时要求，应向其指定的代表在任何时间无条件地根据本协议的股权购买权立即转让其股权，并放弃其对其他现有股东进行上述股权转让所享有的优先购买权（如有的话）；和At the request of Party A at any time, Party B shall promptly and unconditionally transfer its equity interests in Party C to Party A’sDesignee(s) in accordance with the Equity Interest Purchase Option under this Agreement, and Party B hereby waives its right of firstrefusal (if any) to the share transfer by the other existing shareholder of Party C (if any); and14秘密文件Strictly Confidential3.2.9严格遵守本协议及各方共同或分别签订的其他协议的各项规定，切实履行该等协议项下的各项义务，并不进行任何足以影响该等协议的有效性和可执行性的作为/不作为。如果乙方对于本协议项下或乙方股权质押协议下或对甲方的授权委托书中的股权，还留存有任何权利，除非甲方书面指示，否则乙方仍不得行使该权利。Party B shall strictly abide by the provisions of this Agreement and other contracts jointly or separately executed by and among Party B,Party C and Party A, perform the obligations hereunder and thereunder, and refrain from any action/omission that may affect theeffectiveness and enforceability thereof. To the extent that Party B has any remaining rights with respect to the equity interests subject tothis Agreement hereunder or under Party B’s Equity Interest Pledge Agreement or under the Power of Attorney granted in favor of PartyA, Party B shall not exercise such rights except in accordance with the written instructions of Party A.4.陈述和保证Representations and Warranties乙方和丙方特此在本协议签署之日和每一个转让日向甲方共同及分别陈述和保证如下：Party B and Party C hereby represent and warrant to Party A, jointly and severally, as of the date of this Agreement and each date of transfer of theOptioned Interests, that:4.1其具有签订和交付本协议和其为一方的、根据本协议为每一次转让被购买的股权而签订的任何股权转让协议(各称为"转让协议")，并履行其在本协议和任何转让协议项下的义务的权力和能力。乙方和丙方同意在甲方行使购买权时，他们将签署与本协议条款一致的转让协议。本协议和其是一方的各转让协议一旦签署后，构成或将对其构成合法、有效及具有约束力的义务并可按照其条款对其强制执行；They have the authority to execute and deliver this Agreement and any share transfer contracts to which they are a party concerning theOptioned Interests to be transferred thereunder (each, a “Transfer Contracts”), and to perform their obligations under this Agreement and anyTransfer Contracts. Party B and Party C agree to enter into Transfer Contracts consistent with the terms of this Agreement upon Party A’s exerciseof the Equity Interest Purchase Option. This Agreement and the Transfer Contracts to which they are a party constitute or will constitute theirlegal, valid and binding obligations and shall be enforceable against them in accordance with the provisions thereof;15秘密文件Strictly Confidential4.2无论是本协议或任何转让协议的签署和交付还是其在本协议或任何转让协议项下的义务的履行均不会：(i)导致违反任何有关的中国法律；(ii)与丙方章程或其他组织文件相抵触；(iii)导致违反其是一方或对其有约束力的任何协议或文件，或构成其是一方或对其有约束力的任何协议或文件项下的违约；(iv)导致违反有关向任何一方颁发的任何许可或批准的授予和(或)继续有效的任何条件；或(v)导致向任何一方颁发的任何许可或批准中止或被撤销或附加条件；The execution and delivery of this Agreement or any Transfer Contracts and the obligations under this Agreement or any Transfer Contracts shallnot: (i) cause any violation of any applicable laws of China; (ii) be inconsistent with the articles of association, bylaws or other organizationaldocuments of Party C; (iii) cause the violation of any contracts or instruments to which they are a party or which are binding on them, orconstitute any breach under any contracts or instruments to which they are a party or which are binding on them; (iv) cause any violation of anycondition for the grant and/or continued effectiveness of any licenses or permits issued to either of them; or (v) cause the suspension orrevocation of or imposition of additional conditions to any licenses or permits issued to either of them;4.3乙方对其在丙方拥有的股权拥有良好和可出售的所有权，除乙方签署的《股权质押协议》外，乙方在上述股权上没有设置任何担保权益；Party B have a good and merchantable title to the equity interests in Party C they hold. Except for Party B’s Equity Interest Pledge Agreement,Party B have not placed any security interest on such equity interests;16秘密文件Strictly Confidential4.4目前没有悬而未决的或构成威胁的与丙方的股权、丙方资产有关的或与丙方有关的诉讼、仲裁或行政程序。There are no pending or threatened litigation, arbitration or administrative proceedings relating to the equity interests in Party C, assets of Party Cor Party C.5.生效日Effective Date5.1本协议于各方签署本协议之日生效，有效期10年，经甲方选择可再延长10年。This Agreement shall become effective upon the date hereof, and remain effective for a term of 10 years, and may be renewed for an additional 10years at Party A’s election.5.2若丙方股东发生变化，由新股东签署此协议，在此协议签署之日，原协议自动视为无效。In the event of a change in the shareholders of Party C, the new shareholder should sign this agreement and the original agreement willautomatically be deemed invalid on the date of signing of this agreement.17秘密文件Strictly Confidential6.适用法律与争议解决Governing Law and Resolution of Disputes6.1适用法律Governing law本协议的订立、效力、解释、履行、修改和终止以及争议解决均适用中国正式公布并可公开得到的法律。对中国正式公布并可公开得到的法律没有规定的事项，将适用国际法律原则和惯例。The execution, effectiveness, construction, performance, amendment and termination of this Agreement and the resolution of disputes hereundershall be governed by the formally published and publicly available laws of China. Matters not covered by formally published and publiclyavailable laws of China shall be governed by international legal principles and practices.6.2争议的解决方法Methods of Resolution of Disputes因解释和履行本协议而发生的任何争议，本协议各方应首先通过友好协商的方式加以解决。如果在一方向其他方发出要求协商解决的书面通知后30天之内争议仍然得不到解决，则任何一方均可将有关争议提交给中国国际经济贸易仲裁委员会，由该会按照其届时有效的仲裁规则仲裁解决。仲裁应在北京进行，使用之语言为中文。仲裁裁决是终局性的，对各方均有约束力。In the event of any dispute with respect to the construction and performance of this Agreement, the Parties shall first resolve the dispute throughfriendly negotiations. In the event the Parties fail to reach an agreement on the dispute within 30 days after either Party’s request to the otherParties for resolution of the dispute through negotiations, either Party may submit the relevant dispute to the China International Economic andTrade Arbitration Commission for arbitration, in accordance with its then effective arbitration rules. The arbitration shall be conducted in Beijing,and the language used in arbitration shall be Chinese. The arbitration award shall be final and binding on all Parties.18秘密文件Strictly Confidential7.税款、费用Taxes and Fees每一方应承担根据中国法律因准备和签署本协议和各转让协议以及完成本协议和各转让协议拟定的交易而由该方发生的或对其征收的任何和全部的转让和注册的税、花费和费用。Each Party shall pay any and all transfer and registration tax, expenses and fees incurred thereby or levied thereon in accordance with the laws of China inconnection with the preparation and execution of this Agreement and the Transfer Contracts, as well as the consummation of the transactionscontemplated under this Agreement and the Transfer Contracts.8.通知Notices8.1本协议项下要求或发出的所有通知和其他通信应通过专人递送、挂号邮寄、邮资预付或商业快递服务或传真的方式发到该方下列地址。每一通知还应再以电子邮件送达。该等通知视为有效送达的日期按如下方式确定：All notices and other communications required or permitted to be given pursuant to this Agreement shall be delivered personally or sent byregistered mail, postage prepaid, by a commercial courier service or by facsimile transmission to the address of such Party set forth below. Aconfirmation copy of each notice shall also be sent by email. The dates on which notices shall be deemed to have been effectively given shall bedetermined as follows:8.1.1通知如果是以专人递送、快递服务或挂号邮寄、邮资预付发出的，则以于设定为通知的地址在接收或拒收之日为有效送达日。Notices given by personal delivery, by courier service or by registered mail, postage prepaid, shall be deemed effectively given on thedate of receipt or refusal at the address specified for notices.19秘密文件Strictly Confidential8.1.2通知如果是以传真发出的，则以成功传送之日为有效送达日（应以自动生成的传送确认信息为证）。Notices given by facsimile transmission shall be deemed effectively given on the date of successful transmission (as evidenced by anautomatically generated confirmation of transmission).8.2为通知的目的，各方地址如下：For the purpose of notices, the addresses of the Parties are as follows:甲方：中传天下信息科技（深圳）有限公司Party A:Zhongchuan Tianxia Information Technology (Shenzhen) Co., Ltd.地址：深圳市南山区高新中三道2号深圳软件园一期五栋401AAddress:401A, Building 5, Phase 1, Shenzhen Software Park, No.2 Gaoxin Zhongsan Road, Nanshan District, Shenzhen.收件人：洪婷Attn:Hong Ting乙方：Party B: 宋雪松Song Xuesong住所：天津市河西区广东路中裕园33702Address:Zhongyu Yuan 33702, Guangdong Road, Hexi District, Tianjin20秘密文件Strictly Confidential陈蔚力Chen Weili住所：广东省深圳市宝安区宝城上川路15号Address:Baocheng Shangchuan Road 15, Baoan District, Shenzhen, Guangdong王平Wang Ping住所：广东省深圳市南山区高新南环路36号彩虹之岸12栋4AAddress:Caihong Zhi’an Building No.12 Suite 4A, Gaoxin Nanhuan Road 36, Nanshan District, Shenzhen, Guangdong刘东来Liu Donglai住所：天津市和平区南京路诚基经贸中心1号楼2门1702号Address:No 1702, Door 2, Build 1, Chengji Economic and Trade Centre, Nanjing Road, Heping District, Tianjin.丙方：北京中传视讯科技有限公司Party C:Beijing Mobile Vision Technology Co., Ltd.地址：北京市朝阳区光华路9号SOHO3QLAB32Address: LAB32, SOHO3Q, No 9, Guanghua Road, Chaoyang District, Beijing .收件人：宋雪松Attn: Song Xuesong8.3任何一方可按本条规定随时给其他方发出通知来改变其接收通知的地址。Any Party may at any time change its address for notices by a notice delivered to the other Parties in accordance with the terms hereof.21秘密文件Strictly Confidential9.保密责任Confidentiality各方承认及确定彼此就有关本协议而交换的任何口头或书面资料均属机密资料。各方应当对所有该等资料予以保密，而在未得其他方书面同意前，不得向任何第三者披露任何有关资料，惟下列情况除外：(a)公众人士知悉或将会知悉该等资料(并非由接受资料之一方擅自向公众披露)；(b)适用法律法规或股票交易的规则或规例所需披露之资料；或(c)由任何一方就本协议所述交易而需向其法律或财务顾问披露之资料而该法律或财务顾问亦需遵守与本条款相类似之保密责任。如任何一方工作人员或聘请机构的泄密均视为该方的泄密，需依本协议承担违约责任。无论本协议以任何理由终止，本条款仍然生效。The Parties acknowledge that any oral or written information exchanged among them with respect to this Agreement is confidential information. Each Partyshall maintain the confidentiality of all such information, and without obtaining the written consent of other Parties, it shall not disclose any relevantinformation to any third parties, except in the following circumstances: (a) such information is or will be in the public domain (provided that this is not theresult of a public disclosure by the receiving party); (b) information disclosed as required by applicable laws or rules or regulations of any stock exchange;or (c) information required to be disclosed by any Party to its legal counsel or financial advisor regarding the transaction contemplated hereunder, and suchlegal counsel or financial advisor are also bound by confidentiality duties similar to the duties in this section. Disclosure of any confidential information bythe staff members or agency hired by any Party shall be deemed disclosure of such confidential information by such Party, which Party shall be held liablefor breach of this Agreement. This Section shall survive the termination of this Agreement for any reason.22秘密文件Strictly Confidential10.进一步保证Further Warranties各方同意迅速签署为执行本协议的各项规定和目的而合理需要的或对其有利的文件，以及为执行本协议的各项规定和目的而采取合理需要的或对其有利的进一步行动。The Parties agree to promptly execute documents that are reasonably required for or are conducive to the implementation of the provisions and purposes ofthis Agreement and take further actions that are reasonably required for or are conducive to the implementation of the provisions and purposes of thisAgreement.11.其他Miscellaneous11.1修订、修改与补充Amendment, change and supplement对本协议作出修订、修改与补充，必须经每一方签署书面协议。Any amendment, change and supplement to this Agreement shall require the execution of a written agreement by all of the Parties.11.2完整协议Entire agreement除了在本协议签署后所作出的书面修订、补充或修改以外，本协议构成本协议各方就本协议标的物所达成的完整协议，取代在此之前就本协议标的物所达成的所有口头或书面的协商、陈述和协议。 Except for the amendments, supplements or changes in writing executed after theexecution of this Agreement, this Agreement shall constitute the entire agreement reached by and among the Parties hereto with respect to thesubject matter hereof, and shall supercede all prior oral and written consultations, representations and contracts reached with respect to thesubject matter of this Agreement.23秘密文件Strictly Confidential11.3标题Headings本协议的标题仅为方便阅读而设，不应被用来解释、说明或在其他方面影响本协议各项规定的含义。The headings of this Agreement are for convenience only, and shall not be used to interpret, explain or otherwise affect the meanings of theprovisions of this Agreement.11.4语言Language本协议以中文和英文书就，一式八份，乙方共计六名股东以及甲方、丙方各持一份，具有同等效力；中英文版本如有冲突，应以中文版为准。This Agreement is written in both Chinese and English language in eight copies, the 6 shareholders of Party B, Party A and Party C having onecopy with equal legal validity respectively; in case there is any conflict between the Chinese version and the English version, the Chinese versionshall prevail.11.5可分割性Severability如果本协议有任何一条或多条规定根据任何法律或法规在任何方面被裁定为无效、不合法或不可执行，本协议其余规定的有效性、合法性或可执行性不应因此在任何方面受到影响或损害。各方应通过诚意磋商，争取以法律许可以及各方期望的最大限度内有效的规定取代那些无效、不合法或不可执行的规定，而该等有效的规定所产生的经济效果应尽可能与那些无效、不合法或不能强制执行的规定所产生的经济效果相似。In the event that one or several of the provisions of this Agreement are found to be invalid, illegal or unenforceable in any aspect in accordancewith any laws or regulations, the validity, legality or enforceability of the remaining provisions of this Agreement shall not be affected orcompromised in any respect. The Parties shall strive in good faith to replace such invalid, illegal or unenforceable provisions with effectiveprovisions that accomplish to the greatest extent permitted by law and the intentions of the Parties, and the economic effect of such effectiveprovisions shall be as close as possible to the economic effect of those invalid, illegal or unenforceable provisions.24秘密文件Strictly Confidential11.6继任者Successors本协议对各方各自的继任者和各方所允许的受让方应具有约束力并对其有利。This Agreement shall be binding on and shall inure to the interest of the respective successors of the Parties and the permitted assigns of suchParties.11.7继续有效Survival11.7.1协议期满或提前终止前因本协议而发生的或到期的任何义务在本协议期满或提前终止后继续有效。Any obligations that occur or that are due as a result of this Agreement upon the expiration or early termination of this Agreement shallsurvive the expiration or early termination thereof.11.7.2本协议第5、6、9条和本第11.7条的规定在本协议终止后继续有效。The provisions of Articles 5, 6, 9 and this Section 11.7 shall survive the termination of this Agreement.25秘密文件Strictly Confidential11.8弃权Waivers任何一方可以对本协议的条款和条件作出弃权，但必须经书面作出并经各方签字。一方在某种情况下就其他方的违约所作的弃权不应被视为该方在其他情况下就类似的违约已经对其他方作出弃权。Any Party may waive the terms and conditions of this Agreement, provided that such a waiver must be provided in writing and shall require thesignatures of the Parties. No waiver by any Party in certain circumstances with respect to a breach by other Parties shall operate as a waiver bysuch a Party with respect to any similar breach in other circumstances.本页其余部分刻意留为空白The Remainder of this page is intentionally left blank26秘密文件Strictly Confidential有鉴于此，各方已自行或使得其各自授权代表于文首所载日期签署本独家购买权协议。IN WITNESS WHEREOF, the Parties have executed, or caused their respective duly authorized representatives to execute, this Exclusive Option Agreement as ofthe date first above written.甲方：中传天下信息科技（深圳）有限公司（盖章）Party A: Zhongchuan Tianxia Information Technology (Shenzhen) Co., Ltd. (Seal)签字：By:/s/ Hong Ting姓名：洪婷Name: Hong Ting职务：总经理Title: General Manager秘密文件 Strictly Confidential有鉴于此，各方已自行或使得其各自授权代表于文首所载日期签署本独家购买权协议。IN WITNESS WHEREOF, the Parties have executed, or caused their respective duly authorized representatives to execute, this Exclusive Option Agreement as ofthe date first above written.乙方：Party B:宋雪松Song Xuesong签字：By:/s/ Song Xuesong秘密文件 Strictly Confidential有鉴于此，各方已自行或使得其各自授权代表于文首所载日期签署本独家购买权协议。IN WITNESS WHEREOF, the Parties have executed, or caused their respective duly authorized representatives to execute, this Exclusive Option Agreement as ofthe date first above written.乙方：Party B:陈蔚力Chen Weili签字：By:/s/ Chen Weili秘密文件 Strictly Confidential有鉴于此，各方已自行或使得其各自授权代表于文首所载日期签署本独家购买权协议。IN WITNESS WHEREOF, the Parties have executed, or caused their respective duly authorized representatives to execute, this Exclusive Option Agreement as ofthe date first above written.乙方：Party B:王平Wang Ping签字：By:/s/ Wang Ping秘密文件 Strictly Confidential有鉴于此，各方已自行或使得其各自授权代表于文首所载日期签署本独家购买权协议。IN WITNESS WHEREOF, the Parties have executed, or caused their respective duly authorized representatives to execute, this Exclusive Option Agreement as ofthe date first above written.乙方：Party B:刘东来Liu Donglai签字：By:/s/ Liu Donglai秘密文件 Strictly Confidential有鉴于此，各方已自行或使得其各自授权代表于文首所载日期签署本独家购买权协议。IN WITNESS WHEREOF, the Parties have executed, or caused their respective duly authorized representatives to execute, this Exclusive Option Agreement as ofthe date first above written.丙方：北京中传视讯科技有限公司（盖章）Party B: Beijing Mobile Vision Technology Co., Ltd. (Seal)签字：By:/s/ Song Xuesong姓名：宋雪松Name:Song Xuesong职务：董事长Title:Chairman of the Board秘密文件 Strictly ConfidentialEX4.17 5 f20f2017ex417_luokung.htm EQUITY INTEREST PLEDGE AGREEMENT BY AND AMONG ZHONGCHUAN TIANXIA INFORMATION TECHNOLOGY(SHENZHEN) CO., LTD., XUESONG SONG, WEILI CHEN, PING WANG, DONGLAI LIU, AND BEIJING MOBILE VISION TECHNOLOGY CO., LTD., DATEDAUGUST 31, 2015Exhibit 4.17股权质押协议Equity Interest Pledge Agreement本股权质押协议（下称"本协议”）由下列各方于年月日在中华人民共和国（下称“中国”）北京签订：This Equity Interest Pledge Agreement (this "Agreement") has been executed by and among the following parties on in Beijing, the People’sRepublic of China (the “China” or “PRC”):甲方：中传天下信息科技（深圳）有限公司（下称“质权人”）Party A: Zhongchuan Tianxia Information Technology (Beijing) Co., Ltd. (“Pledgee”)地址：深圳市南山区高新中三道2号深圳软件园一期五栋401AAddress: 401A, Building 5, Phase 1, Shenzhen Software Park, No.2 Gaoxin Zhongsan Road, Nanshan District, Shenzhen统一社会信用代码： 91440300565701058RUniform Social Credit Code: 91440300565701058R乙方(下称“出质人”)：Party B ( “Pledgors”):a)宋雪松Song Xuesong身份证号码:ID Card No.:b)陈蔚力Chen Weili身份证号码:ID Card No.:1秘密文件 Strictly Confidentialc)王平Wang Ping身份证号码:ID Card No.:d)刘东来Liu Donglai身份证号码:ID Card No.:丙方：北京中传视讯科技有限公司Party C: Beijing Mobile Vision Technology Co., Ltd.地址：北京市朝阳区光华路9号SOHO3QLAB32Address: LAB32, SOHO3Q, No 9, Guanghua Road, Chaoyang District, Beijing统一社会信用代码：9111010576215249XMUniform Social Credit Code: 9111010576215249XM在本协议中，质权人、出质人和丙方以下各称“一方”，合称“各方”。In this Agreement, each of Pledgee, Pledgors and Party C shall be referred to as a "Party" respectively, and they shall be collectively referred to as the"Parties".鉴于：Whereas:1．出质人全部为中国境内居民自然人，共同持有丙方100%的股权。丙方是一家在中国注册成立的、主要从事手机视频技术研发、内容制作和产业化市场推广的有限责任公司。丙方有意在此确认出质人和质权人在本协议下的权利和义务并提供必要的协助登记该质权；All of the Pledgors are natural persons resided in PRC, and collectively hold 100% of the equity interest in Party C. Party C is a limited company registered inChina, mainly engaging in mobile video frequency technology research, development, content creation, sale and related industrialization promotion. Party Cacknowledges the respective rights and obligations of Pledgors and Pledgee under this Agreement, and intends to provide any necessary assistance inregistering the Pledge;2．质权人是一家在中国注册的外商独资企业。质权人与丙方于年月日签订了独家业务合作协议；Pledgee is a whollyforeignowned enterprise registered in China. Pledgee and Party C have executed an Exclusive Business Cooperation Agreement as of [*],[*];3．为了保证丙方全面履行独家业务合作协议项下的义务，出质人以其拥有的全部丙方股权向质权人做出质押担保。To ensure that Party C fully performs its obligations under the Exclusive Business Cooperation Agreement, Pledgors hereby pledge to the Pledgee all of theequity interests they hold in Party C.为了履行业务合作协议的条款，各方商定按照以下条款签订本协议。To perform the provisions of the Business Cooperation Agreement, the Parties have mutually agreed to execute this Agreement upon the following terms.2秘密文件 Strictly Confidential1.定义Definitions除非本协议另有规定，下列词语含义为：Unless otherwise provided herein, the terms below shall have the following meanings:1.1质权：指出质人根据本协议第2条给予质权人的担保物权，即指质权人所享有的，以出质人质押给质权人的股权折价或拍卖、变卖该股权的价款优先受偿的权利。Pledge: shall refer to the security interest granted by Pledgors to Pledgee pursuant to Article 2 of this Agreement, i.e., the right of Pledgee to becompensated on a preferential basis with the conversion, auction or sales price of the Equity Interest.1.2股权：指出质人现在和将来（通过增资和/或转股）合法持有的其在丙方的全部股权权益。Equity Interest: shall refer to all of the equity interest in Party C lawfully, held now and to be held (through capital increase and/or equity transfer)hereafter by Pledgors.1.3质押期限：指本协议第3条规定的期间。Term of Pledge: shall refer to the term set forth in Article 3 of this Agreement.1.4业务合作协议：指丙方与质权人于本协议日签订的独家业务合作协议。Business Cooperation Agreement: shall refer to the Exclusive Business Cooperation Agreement executed by and between Party C and Pledgee on thedate of this Agreement.1.5违约事件：指本协议第7条所列任何情况。Event of Default: shall refer to any of the circumstances set forth in Article 7 of this Agreement.1.6违约通知：指质权人根据本协议发出的宣布违约事件的通知。Notice of Default: shall refer to the notice issued by Pledgee in accordance with this Agreement declaring an Event of Default.3秘密文件 Strictly Confidential2.质权The Pledge作为丙方按时和全额支付业务合作协议项下质权人应得的任何或全部的款项，包括但不限于业务合作协议中规定的咨询和服务费的担保（无论该等费用的到期应付是由于到期日的到来、提前收款的要求或其它原因），以及丙方充分履行其在业务合作协议项下其他所有义务（丙方按时和全额支付业务合作协议项下甲方应得的任何或全部的款项及丙方在业务合作协议项下其他所有义务，以下统称为“被担保债务”）的担保，出质人特此将其现有或将拥有的丙方的全部股权权益质押给质权人。As collateral security for the timely and complete payment and performance when due (whether at stated maturity, by acceleration or otherwise) of any or all ofthe payments due (the “all payments in pledge”) by Party C, including without limitation the consulting and services fees payable to the Pledgee under theBusiness Cooperation Agreement, Pledgors hereby pledge to Pledgee a first security interest in all of Pledgors’ right, title and interest, whether now owned orhereafter acquired by Pledgors, in the Equity Interest of Party C.3.质押期限Term of Pledge3.1本质权自本协议项下的股权出质在相应的工商行政管理机关登记之日起生效，质权有效期持续到业务合作协议下所有丙方欠付质权人的款项结清为止。出质人和丙方应（一）自本协议签署之日起3个工作日内，将本协议的质权登记在丙方股东名册上，并（二）自本协议签署之日起10个工作日内向相应的工商行政管理机关申请登记本协议项下的质权。各方共同确认，为办理股权质押工商登记手续，各方及丙方其他股东应按照丙方所在地工商行政管理部门要求的形式签署、真实反映本协议项下质权信息的《股权质押合同》（以下简称“工商登记质押合同”）提交给工商管理机关，工商登记质押合同中未约定事项，仍以本协议约定为准。出质人和丙方应当按照中国法律法规和有关工商行政管理机关的各项要求，提交所有必要的文件并办理所有必要手续，保证质权在递交申请后尽快获得登记。如果出质人持有的丙方注册资本数额增加（不管是通过直接认缴丙方的增资还是从其他股东处受让股权），各方一致同意将采取一切必要的行动和签署一切必要的文件以按照登记机关的要求完成质权的变更登记，以确保本协议项下的质权的持续有效。The Pledge shall become effective on such date when the pledge of the Equity Interest contemplated herein has been registered’ with relevantadministration for industry and commerce (the “AIC”). The Pledge shall be continuously valid until all payments due under the Business CooperationAgreement have been fulfilled by Party C. Pledgors and Party C shall (1) register the Pledge in the shareholders' register of Party C within 3 businessdays following the execution of this Agreement, and (2) submit an application to the AIC for the registration of the Pledge of the Equity Interestcontemplated herein within 10 business days following the execution of this Agreement. The parties covenant that for the purpose of registration of thePledge, the parties hereto and all other shareholders of Party C shall submit to the AIC the Equity Interest Pledge Contract in the form required by theAIC at the location of Party C which shall truly reflect the information of the Pledge hereunder (the “AIC Pledge Contract”). For matters not specified inthe AIC Pledge Contract, the parties shall be bound by the provisions of this Agreement. Pledgors and Party C shall submit all necessary documentsand complete all necessary procedures, as required by the PRC laws and regulations and the relevant AIC, to ensure that the Pledge of the EquityInterest shall be registered with the AIC as soon as possible after filing. In the event that the amount of registered capital held by Pledgors is increased(either by subscribing increased registered capital from Party C or acquiring equity interest from other shareholders), the Parties hereto agree that theyshall take any necessary action and execute any necessary document to complete the registration of change of Pledge according to the requirement ofAIC so that the Pledge in this Agreement remains effective.4秘密文件 Strictly Confidential3.2质押期限内，如丙方未按业务合作协议交付咨询服务费等费用，质权人有权但无义务按本协议的规定处分质权。During the Term of Pledge, in the event Party C fails to pay the exclusive consulting or service fees in accordance with the Business CooperationAgreement, Pledgee shall have the right, but not the obligation, to dispose of the Pledge in accordance with the provisions of this Agreement.4.质权凭证的保管Custody of Records for Equity Interest subject to Pledge4.1在本协议规定的质押期限内，出质人应将其在丙方的股权出资证明书及记载质权的股东名册交付质权人保管。出质人应在本协议签订之日起一周内将上述股权出资证明书及股东名册交付给质权人。质权人将在本协议规定的全部质押期间一直保管这些项目。During the Term of Pledge set forth in this Agreement, Pledgors shall deliver to Pledgee's custody the capital contribution certificate for the EquityInterest and the shareholders' register containing the Pledge within one week from the execution of this Agreement. Pledgee shall have custody of suchitems during the entire Term of Pledge set forth in this Agreement.4.2在质押期限内，股权所产生的红利应当无条件归质权人所有。Dividends generated by the Equity Interest shall be unconditionally owned by the Pledgee during the Term of Pledge.5秘密文件 Strictly Confidential5.出质人的声明和保证Representations and Warranties of Pledgors5.1出质人是股权唯一的合法所有人。Pledgors are the sole legal and beneficial owners of the Equity Interest.5.2质权人有权以本协议规定的方式处分并转让股权。Pledgee shall have the right to dispose of and transfer the Equity Interest in accordance with the provisions set forth in this Agreement.5.3除本质权之外，出质人未在股权上设置任何其他质押权利或其他担保权益。Except for the Pledge, Pledgors have not placed any security interest or other encumbrance on the Equity Interest.6.出质人的承诺和确认Covenants and Further Agreements of Pledgors6.1在本协议存续期间，所有出质人向质权人承诺，出质人将：All of the Pledgors hereby covenant to the Pledgee, that during the term of this Agreement, Pledgors shall:6.1.1除履行由出质人与质权人、丙方于本协议签署日签订的《独家购买权合同》外，未经质权人事先书面同意，不得转让股权，不得在股权上设立或允许存在任何担保或其他债务负担；not transfer the Equity Interest, place or permit the existence of any security interest or other encumbrance on the Equity Interest, without theprior written consent of Pledgee, except for the performance of the Exclusive Option Agreement executed by Pledgors, the Pledgee and Party Con the execution date of this Agreement;6秘密文件 Strictly Confidential6.1.2遵守并执行所有有关权利质押的法律、法规的规定，在收到有关主管机关就质权发出或制定的通知、指令或建议时，于五日内向质权人出示上述通知、指令或建议，同时遵守上述通知、指令或建议，或按照质权人的合理要求或经质权人同意就上述事宜提出反对意见和陈述；comply with the provisions of all laws and regulations applicable to the pledge of rights, and within 5 days of receipt of any notice, order orrecommendation issued or prepared by relevant competent authorities regarding the Pledge, shall present the aforementioned notice, order orrecommendation to Pledgee, and shall comply with the aforementioned notice, order or recommendation or submit objections andrepresentations with respect to the aforementioned matters upon Pledgee's reasonable request or upon consent of Pledgee;6.1.3将任何可能导致对出质人股权或其任何部分的权利产生影响的事件或收到的通知，以及可能改变出质人在本协议中的任何保证、义务或对出质人履行其在本协议中义务可能产生影响的任何事件或收到的通知及时通知质权人。promptly notify Pledgee of any event or notice received by Pledgors that may have an impact on Pledgee's rights to the Equity Interest or anyportion thereof, as well as any event or notice received by Pledgors that may have an impact on any guarantees and other obligations ofPledgors arising out of this Agreement.6.2出质人同意，质权人按本协议条款取得的对质权享有的权利，不应受到出质人或出质人的继承人或出质人之委托人或任何其他人通过法律程序的中断或妨害。Pledgors agree that the rights acquired by Pledgee in accordance with this Agreement with respect to the Pledge shall not be interrupted or harmed byPledgors or any heirs or representatives of Pledgors or any other persons through any legal proceedings.7秘密文件 Strictly Confidential6.3出质人向质权人保证，为保护或完善本协议对偿付业务合作协议项下被担保债务的担保，出质人将诚实签署、并促使其他与质权有利害关系的当事人签署质权人所要求的所有的权利证书、契约和/或履行并促使其他有利害关系的当事人履行质权人所要求的行为，并为本协议赋予质权人之权利、授权的行使提供便利，与质权人或其指定的人(自然人/法人)签署所有的有关股权所有权的文件，并在合理期间内向质权人提供其认为需要的所有的有关质权的通知、命令及决定。To protect or perfect the security interest granted by this Agreement for payment of all payment in pledge under the Business Cooperation Agreement,Pledgors hereby undertake to execute in good faith and to cause other parties who have an interest in the Pledge to execute all certificates, agreements,deeds and/or covenants required by Pledgee. Pledgors also undertake to perform and to cause other parties who have an interest in the Pledge toperform actions required by Pledgee, to facilitate the exercise by Pledgee of its rights and authority granted thereto by this Agreement, and to enter intoall relevant documents regarding ownership of Equity Interest with Pledgee or designee(s) of Pledgee (natural persons/legal persons). Pledgorsundertake to provide Pledgee within a reasonable time with all notices, orders and decisions regarding the Pledge that are required by Pledgee.6.4出质人向质权人保证，出质人将遵守、履行本协议项下所有的保证、承诺、协议、陈述及条件。如出质人不履行或不完全履行其保证、承诺、协议、陈述及条件，出质人应赔偿质权人由此遭受的一切损失。Pledgors hereby undertake to comply with and perform all guarantees, promises, agreements, representations and conditions under this Agreement. Inthe event of failure the whole or partial performance of its guarantees, promises, agreements, representations and conditions, Pledgors shall indemnifyPledgee for all losses resulting therefrom.8秘密文件 Strictly Confidential7.违约事件Event of Default7.1下列事项均被视为违约事件：The following circumstances shall be deemed Event of Default:7.1.1丙方未能按期、完整履行任何业务合作协议项下责任，包括但不限于丙方未能按期足额支付业务合作协议项下的应付的被担保债务或有违反该协议其他义务的行为；Party C fails to fully and timely fulfill any liabilities under the Business Cooperation Agreement, including without limitation failure to pay infull any of the all payment in pledge payable under the Business Cooperation Agreement or breaches any other obligations of Party Cthereunder;7.1.2出质人或丙方实质违反本协议的任何条款；Pledgors or Party C have committed a material breach of any provisions of this Agreement;7.1.3除本协议第6.1.1条的约定外，出质人舍弃出质的股权或未获得质权人书面同意而擅自转让或意图转让出质的股权；和Except as expressly stipulated in Section 6.1.1, Pledgors transfers or purports to transfer or abandons the Equity Interest pledged or assignsthe Equity Interest pledged without the written consent of Pledgee; and7.1.4丙方的继承人或代管人只能履行部分或拒绝履行业务合作协议项下的支付责任。The successor or custodian of Party C is capable of only partially perform or refuses to perform the payment obligations under the BusinessCooperation Agreement.9秘密文件 Strictly Confidential7.2如知道或发现本第7.1条所述的任何事项或可能导致上述事项的事件已经发生，出质人应立即以书面形式通知质权人。Upon notice or discovery of the occurrence of any circumstances or event that may lead to the aforementioned circumstances described in Section 7.1,Pledgors shall immediately notify Pledgee in writing accordingly.7.3除非第7.1部分下的违约事件在质权人向出质人发出要求其修补此违约行为通知后的二十（20）天之内已经按质权人要求获得救济，质权人在其后的任何时间，可向出质人发出书面违约通知，要求依据第8部分履行其处理股权的权利。Unless an Event of Default set forth in this Section 7.1 has been successfully resolved to Pledgee's satisfaction within twenty (20) days after the Pledgeedelivers a notice to the Pledgors requesting ratification of such Event of Default, Pledgee may issue a Notice of Default to Pledgors in writing at any timethereafter, demanding the Pledgors to immediately dispose of the Pledge in accordance with the provisions of Article 8 of this Agreement.8.质权的行使Exercise of Pledge8.1在被担保债务被全部清偿或履行前，未经质权人书面同意，出质人不得转让本质权和其拥有的丙方股权。Prior to the full payment of all payments in pledge, without the Pledgee's written consent, Pledgors shall not assign the Pledge or the Equity Interest inParty C.8.2在质权人行使其质押权利时，质权人可以向出质人发出书面违约通知。Pledgee may issue a Notice of Default to Pledgors when exercising the Pledge.10秘密文件 Strictly Confidential8.3在质权人行使其质押权利时，根据中国有关法律的规定，质权人有权按照法定程序处置质押股权。仅在中国法律允许的范围内，对于处置的所得，质权人无需给付出质人；除非中国法律另有规定，出质人特此放弃其可能有的能向质权人要求任何质押股权处置所得的权利；同样，出质人对质权人在该质押股权处置后的亏损也不承担任何义务。When the Pledgor exercises the pledge right, Pledgee is entitled to dispose of the Equity Interest pledged in accordance with applicable PRC laws. Onlyto the extent permitted under applicable PRC laws, Pledgee has no obligation to account to Pledgors for proceeds of disposition of the Equity Interest.Unless otherwise required by PRC laws, Pledgors hereby waive any rights it may have to demand any such accounting from Pledgee; Likewise, in suchcircumstance Pledgors shall have no obligation to Pledgee for any deficiency remaining after such disposition of the Equity Interest pledged.8.4质权人依照本协议处分质权时，出质人和丙方应予以必要的协助，以使质权人实现其质权。When Pledgee disposes of the Pledge in accordance with this Agreement, Pledgors and Party C shall provide necessary assistance to enable Pledgee toenforce the Pledge in accordance with this Agreement.9.转让Assignment9.1除非经质权人事先同意，出质人无权赠予或转让其在本协议项下的权利义务。Without Pledgee's prior written consent, Pledgors shall not have the right to assign or delegate its rights and obligations under this Agreement.11秘密文件 Strictly Confidential9.2本协议对出质人及其继任人和经许可的受让人均有约束力，并且对质权人及每一继任人和受让人有效。This Agreement shall be binding on Pledgors and their successors and permitted assigns, and shall be valid with respect to Pledgee and each of itssuccessors and assigns.9.3经出质人同意，质权人可以在任何时候将其在业务合作协议项下的所有或任何权利和义务转让给其指定的关联方（自然人/法人），在这种情况下，受让人应享有和承担本协议项下质权人享有和承担的权利和义务，如同其作为原协议方应享有和承担的一样。质权人转让业务合作协议项下的权利和义务时，应质权人要求，出质人应就此转让签署有关协议和/或文件。Upon the Pledgors’ agreement, Pledgee may assign any or all of its rights and obligations under the Business Cooperation Agreement to its designee(s)(natural/legal persons) at any time, in which case the assigns shall have the rights and obligations of Pledgee under this Agreement, as if it were theoriginal party to this Agreement. When the Pledgee assigns the rights and obligations under the Business Cooperation Agreement, upon Pledgee'srequest, Pledgors shall execute relevant agreements or other documents relating to such assignment.9.4因转让所导致的质权人变更后，应质权人要求，出质人应与新的质权人签订一份内容与本协议一致的新质押协议，并在相应的工商行政管理机关进行登记。In the event of a change in Pledgee due to an assignment, Pledgors shall, at the request of Pledgee, execute a new pledge agreement with the newpledgee on the same terms and conditions as this Agreement, and register the same with the relevant AIC.12秘密文件 Strictly Confidential9.5出质人应严格遵守本协议和各方单独或共同签署的其他有关协议的规定，包括独家购买权合同和对质权人的授权委托书，履行各协议项下的义务，并不进行任何足以影响协议的有效性和可强制执行性的作为/不作为。除非根据质权人的书面指示，出质人不得行使其对质押股权还留存的权利。Pledgors shall strictly abide by the provisions of this Agreement and other contracts jointly or separately executed by the Parties hereto or any of them,including the Exclusive Option Agreement and the Power of Attorney granted to Pledgee, perform the obligations hereunder and thereunder, and refrainfrom any action/omission that may affect the effectiveness and enforceability thereof. Any remaining rights of Pledgors with respect to the EquityInterest pledged hereunder shall not be exercised by Pledgors except in accordance with the written instructions of Pledgee.10.终止Termination在被担保债务被全部清偿或履行完毕之后，本质权人应在尽早合理可行的时间内办理或配合办理解除质押的手续，出质人与丙方应提供相应的配合与协助。Upon the full payment of all payments in pledge under the Business Cooperation Agreement a, Pledgor shall then, with the assistance of Party B and Party C,go through the procedures of cancellation of pledge rights at a reasonable time as soon as practicable.11.手续费及其他费用Handling Fees and Other Expenses一切与本协议有关的费用及实际开支，其中包括但不限于法律费用、工本费、印花税以及任何其他税收、费用等全部由丙方承担。All fees and out of pocket expenses relating to this Agreement, including but not limited to legal costs, costs of production, stamp tax and any other taxes andfees, shall be borne by Party C.13秘密文件 Strictly Confidential12.保密责任Confidentiality各方承认及确定有关本协议、本协议内容，以及彼此就准备或履行本协议而交换的任何口头或书面资料均被视为保密信息。各方应当对所有该等保密信息予以保密，而在未得到另一方书面同意前，不得向任何第三者披露任何保密信息，惟下列信息除外：(a)公众人士知悉或将会知悉的任何信息（惟并非由接受保密信息之一方擅自向公众披露）；(b)根据适用法律法规、股票交易规则、或政府部门或法院的命令而所需披露之任何信息；或(c)由任何一方就本协议所述交易而需向其股东、投资者、法律或财务顾问披露之信息，而该股东、法律或财务顾问亦需遵守与本条款相类似之保密责任。如任何一方工作人员或聘请机构的泄密均视为该方的泄密，需依本协议承担违约责任。无论本协议以任何理由终止，本条款仍然生效。The Parties acknowledge that the existence and the terms of this Agreement and any oral or written information exchanged between the Parties in connectionwith the preparation and performance this Agreement are regarded as confidential information. Each Party shall maintain confidentiality of all such confidentialinformation, and without obtaining the written consent of the other Party, it shall not disclose any relevant confidential information to any third parties, exceptfor the information that: (a) is or will be in the public domain (other than through the receiving Party’s unauthorized disclosure); (b) is under the obligation tobe disclosed pursuant to the applicable laws or regulations, rules of any stock exchange, or orders of the court or other government authorities; or (c) isrequired to be disclosed by any Party to its shareholders, investors, legal counsels or financial advisors regarding the transaction contemplated hereunder,provided that such shareholders, investors, legal counsels or financial advisors shall be bound by the confidentiality obligations similar to those set forth inthis Section. Disclosure of any confidential information by the staff members or agencies hired by any Party shall be deemed disclosure of such confidentialinformation by such Party, which Party shall be held liable for breach of this Agreement. This Section shall survive the termination of this Agreement for anyreason.14秘密文件 Strictly Confidential13.适用法律和争议的解决Governing Law and Resolution of Disputes13.1本协议的订立、效力、解释、履行、修改和终止以及争议的解决均适用中国法律。The execution, effectiveness, construction, performance, amendment and termination of this Agreement and the resolution of disputes hereunder shallbe governed by the laws of China.13.2因解释和履行本协议而发生的任何争议，本协议各方应首先通过友好协商的方式加以解决。如果在一方向其他方发出要求协商解决的书面通知后30天之内争议仍然得不到解决，则任何一方均可将有关争议提交给中国国际经济贸易仲裁委员会，由该会按照其仲裁规则仲裁解决。仲裁应在北京进行，使用之语言为中文。仲裁裁决是终局性的，对各方均有约束力。In the event of any dispute with respect to the construction and performance of this Agreement, the Parties shall first resolve the dispute throughfriendly negotiations. In the event the Parties fail to reach an agreement on the dispute within 30 days after either Party's request to the other Parties forresolution of the dispute through negotiations, either Party may submit the relevant dispute to the China International Economic and Trade ArbitrationCommission for arbitration, in accordance with its Arbitration Rules. The arbitration shall be conducted in Beijing, and the language used in arbitrationshall be Chinese. The arbitration award shall be final and binding on all Parties.13.3因解释和履行本协议而发生任何争议或任何争议正在进行仲裁时，除争议的事项外，本协议各方仍应继续行使各自在本协议项下的其他权利并履行各自在本协议项下的其他义务。Upon the occurrence of any disputes arising from the construction and performance of this Agreement or during the pending arbitration of any dispute,except for the matters under dispute, the Parties to this Agreement shall continue to exercise their respective rights under this Agreement and performtheir respective obligations under this Agreement.15秘密文件 Strictly Confidential14.通知Notices14.1本协议项下要求或发出的所有通知和其他通信应通过专人递送、挂号邮寄、邮资预付或商业快递服务或传真的方式发到该方下列地址。每一通知还应再以电子邮件送达。该等通知视为有效送达的日期按如下方式确定：All notices and other communications required or permitted to be given pursuant to this Agreement shall be delivered personally or sent by registeredmail, postage prepaid, by a commercial courier service or by facsimile transmission to the address of such party set forth below. A confirmation copy ofeach notice shall also be sent by Email. The dates on which notices shall be deemed to have been effectively given shall be determined as follows:14.1.1通知如果是以专人递送、快递服务或挂号邮寄、邮资预付发出的，则以于设定为通知的地址在接收或拒收之日为有效送达日。Notices given by personal delivery, by courier service or by registered mail, postage prepaid, shall be deemed effectively given on the date ofreceipt or refusal at the address specified for notices.14.1.2通知如果是以传真发出的，则以成功传送之日为有效送达日（应以自动生成的传送确认信息为证）。Notices given by facsimile transmission shall be deemed effectively given on the date of successful transmission (as evidenced by anautomatically generated confirmation of transmission).16秘密文件 Strictly Confidential14.2为通知的目的，各方地址如下：For the purpose of notices, the addresses of the Parties are as follows:甲方：中传天下信息科技（深圳）有限公司Party A: Zhongchuan Tianxia Information Technology (Shenzhen) Co., Ltd.地址：深圳市南山区高新中三道2号深圳软件园一期五栋401AAddress: 401A, Building 5, Phase 1, Shenzhen Software Park, No.2 Gaoxin Zhongsan Road, Nanshan District, Shenzhen.收件人：洪婷Attn: Hong Ting乙方：Party B:a)宋雪松Song Xuesong地址：125.Expenses, including legal fees, incurred by a director in defending any legal, administrative or investigative proceedings may be paid by the Company inadvance of the final disposition of such proceedings upon receipt of an undertaking by or on behalf of the director to repay the amount if it shall ultimatelybe determined that the director is not entitled to be indemnified by the Company in accordance with these Articles.126.Expenses, including legal fees, incurred by a former director in defending any legal, administrative or investigative proceedings may be paid by theCompany in advance of the final disposition of such proceedings upon receipt of an undertaking by or on behalf of the former director to repay the amountif it shall ultimately be determined that the director is not entitled to be indemnified by the Company in accordance with these Articles.127.The indemnification and advancement of expenses provided by, or granted pursuant to, these Articles is not exclusive of any other rights to which theperson seeking indemnification of advancement of expenses may be entitled under any agreement, resolution of members, resolution of disinteresteddirectors or otherwise, both as to acting in the person’s official capacity and as to acting in another capacity while serving as a director of the Company.128.If a person to be indemnified has been successful in defence of any proceedings referred to above the person is entitled to be indemnified against allexpenses, including legal fees, and against all judgments, fines and amounts paid in settlement and reasonably incurred by the person in connection withthe proceedings.129.The Company may purchase and maintain insurance in relation to any person who is or was a director, an officer or a liquidator of the Company, or who atthe request of the Company is or was serving as a director, an officer or a liquidator of, or in any other capacity is or was acting for, another body corporateor a partnership, joint venture, trust or other enterprise, against any liability asserted against the person and incurred by the person in that capacity,whether or not the Company has or would have had the power to indemnify the person against the liability as provided in these Articles.SEAL130.The Company shall have a Seal and may have more than one Seal. References herein to the Seal shall be references to every Seal which shall have beenduly adopted by resolution of directors. The directors shall provide for the safe custody of the Seal and for an imprint thereof to be kept at the office of theregistered agent of the Company. Except as otherwise expressly provided herein, the Seal when affixed to any written instrument, shall be witnessed andattested to by the signature of a director or any other person so authorized from time to time by resolution of directors. Such authorization may be before orafter the Seal is affixed, may be general or specific and may refer to any number of sealings. The Directors may provide for a facsimile of the Seal and of thesignature of any director or authorized person which may be reproduced by printing or other means on any instrument and it shall have the same force andvalidity as if the Seal had been affixed to such instrument and the same had been signed as hereinbefore described.21DISTRIBUTIONS131.The directors of the Company may by resolution authorise a distribution by the Company at any time and of any amount and to any members they think fitif they are satisfied on reasonable grounds that immediately after the distribution;a.the value of the Company’s assets will exceed its liabilities, andb.the Company will be able to pay its debts as they fall due.132.A resolution of the directors passed under the preceding Article shall contain a statement that, in the opinion of the directors, immediately after thedistribution the value of the Company’s assets will exceed its liabilities, and the Company will be able to pay its debts as they fall due.133.If, after a distribution is authorised and before it is made, the directors cease to be satisfied on reasonable grounds that the Company will, immediately afterthe distribution satisfy the solvency test, any distribution made by the Company is deemed not to have been authorised.134.If, by virtue of the preceding Article, a distribution is deemed not to have been authorised, a director who;a.ceased, after authorisation but before the making of the distribution, to be satisfied on reasonable grounds for believing that the company wouldsatisfy the solvency test immediately after the distribution is made; andb.failed to take reasonable steps to prevent the distribution being made;is personally liable to the company to repay to the company so much of the distribution as is not able to be recovered from members.135.A distribution made to a member at a time when the company did not, immediately after the distribution, satisfy the solvency test may be recovered by thecompany from the member unless;a.the member received the distribution in good faith and without knowledge of the company’s failure to satisfy the solvency test;b.the member has altered his position in reliance on the validity of the distribution; andc.it would be unfair to require repayment in full or at all.DISTRIBUTIONS BY WAY OF DIVIDEND136.The Company may by a resolution of directors declare a distribution by way of dividend and pay such distribution in money, shares or other property. Inthe event that distributions by way of dividend are paid in specie the directors shall have responsibility for establishing and recording in the resolution ofdirectors authorizing the distribution by way of dividend, a fair and proper value for the assets to be so distributed.137.The directors may from time to time pay to the members such interim distributions by way of dividend as appear to the directors to be justified by theprofits of the Company.138.The directors may, before declaring any distribution by way of dividend, set aside out of the profits of the Company such sum as they think proper as areserve fund, and may invest the sum so set aside as a reserve fund upon such securities as they may select.139.Notice of any distribution by way of dividend that may have been declared shall be given to each member in the manner hereinafter mentioned and alldistributions by way of dividend unclaimed for 3 years after having been declared may be forfeited by resolution of directors for the benefit of theCompany.140.No distribution by way of dividend shall bear interest as against the Company and no distribution by way of dividend shall be paid on treasury shares orshares held by another company of which the Company holds, directly or indirectly, shares having more than 50 percent of the vote in electing directors.22141.A share issued as a distribution by way of dividend by the Company shall be treated for all purposes as having been issued for money equal to the valuedetermined by resolution of the directors. In the absence of fraud the decision of the directors as to the value of the share is conclusive unless a questionof law is involved.142.A division of the issued and outstanding shares of a class or series of shares into a larger number of shares of the same class or series having aproportionately smaller par value does not constitute a distribution by way of dividend of shares.ACCOUNTS AND AUDIT143.The Company may by resolution of members call for the directors to prepare periodically a profit and loss account and a balance sheet. The profit and lossaccount and balance sheet shall be drawn up so as to give respectively a true and fair view of the profit and loss of the Company for the financial periodand a true and fair view of the state of affairs of the Company as at the end of the financial period.144.The Company may by resolution of members call for the accounts to be examined by auditors.145.Subject to the rules of the Designated Stock Exchange, the first auditors shall be appointed by resolution of directors; subsequent auditors shall beappointed by the Audit Committee and shall hold office until the Audit Committee appoint another independent auditor.146.Subject to the rules of the Designated Stock Exchange, the remuneration of the auditors of the Company shall be fixed by the Audit Committee.147.The auditors shall examine each profit and loss account and balance sheet required to be served on every member of the Company or laid before a meetingof the members of the Company and shall state in a written report whether or nota.in their opinion the profit and loss account and balance sheet give a true and fair view respectively of the profit and loss for the period covered bythe accounts, and of the state of affairs of the Company at the end of that period; andb.all the information and explanations required by the auditors have been obtained.148.The report of the auditors shall be annexed to the accounts and shall be read at the meeting of members at which the accounts are laid before the Companyor shall be served on the members.149.Every auditor of the Company shall have a right of access at all times to the books of account and vouchers of the Company, and shall be entitled to requirefrom the directors and officers of the Company such information and explanations as he thinks necessary for the performance of the duties of the auditors.150.The auditors of the Company shall be entitled to receive notice of, and to attend any meetings of members of the Company at which the Company’s profitand loss account and balance sheet are to be presented.NOTICES151.Any notice, information or written statement to be given by the Company to members may be served in any way by which it can reasonably be expected toreach each member or by mail addressed to each member at the address shown in the share register.152.Any summons, notice, order, document, process, information or written statement to be served on the Company may be served by leaving it, or by sendingit by registered mail addressed to the Company, at its registered office, or by leaving it with, or by sending it by registered mail to, the registered agent ofthe Company.153.Service of any summons, notice, order, document, process, information or written statement to be served on the Company may be proved by showing thatthe summons, notice, order, document, process, information or written statement was delivered to the registered office or the registered agent of theCompany or that it was mailed in such time as to admit to its being delivered to the registered office or the registered agent of the Company in the normalcourse of delivery within the period prescribed for service and was correctly addressed and the postage was prepaid.23PENSION AND SUPERANNUATION FUNDS154.The directors may establish and maintain or procure the establishment and maintenance of any noncontributory or contributory pension orsuperannuation funds for the benefit of, and give or procure the giving of donations, gratuities, pensions, allowances or emoluments to, any persons whoare or were at any time in the employment or service of the Company or any company which is a subsidiary of the Company or is allied to or associated withthe Company or with any such subsidiary, or who are or were at any time directors or officers of the Company or of any such other company as aforesaid orwho hold or held any salaried employment or office in the Company or such other company, or any persons in whose welfare the Company or any suchother company as aforesaid is or has been at any time interested, and to the wives, widows, families and dependents of any such person, and may makepayments for or towards the insurance of any such persons as aforesaid, and may do any of the matters aforesaid either alone or in conjunction with anysuch other company as aforesaid. Subject always to the proposal being approved by resolution of members, a director holding any such employment oroffice shall be entitled to participate in and retain for his own benefit any such donation, gratuity, pension allowance or emolument.VOLUNTARY WINDING UP AND DISSOLUTION155.The Company may voluntarily commence to wind up and dissolve by a resolution of members but if the Company has never issued shares it mayvoluntarily commence to wind up and dissolve by resolution of directors.CONTINUATION156.The Company may by resolution of members or by a resolution passed unanimously by all directors of the Company continue as a company incorporatedunder the laws of a jurisdiction outside the British Virgin Islands in the manner provided under those laws.ARBITRATION157.Whenever any difference arises between the Company on the one hand and any of the members or their executors, administrators or assigns on the otherhand, touching the true intent and construction or the incidence or consequences of these Articles or of the Act, touching anything done or executed,omitted or suffered in pursuance of the Act or touching any breach or alleged breach or otherwise relating to the premises or to these Articles, or to anyAct or Ordinance affecting the Company or to any of the affairs of the Company such difference shall, unless the parties agree to refer the same to a singlearbitrator, be referred to 2 arbitrators one to be chosen by each of the parties to the difference and the arbitrators shall before entering on the referenceappoint an umpire.158.If either party to the reference makes default in appointing an arbitrator either originally or by way of substitution (in the event that an appointed arbitratorshall die, be incapable of acting or refuse to act) for 10 days after the other party has given him notice to appoint the same, such other party may appoint anarbitrator to act in the place of the arbitrator of the defaulting party.We, Portcullis TrustNet (BVI) Limited of Portcullis TrustNet Chambers, P.O. Box 3444, Road Town, Tortola, British Virgin Islands for the purpose of incorporating aBVI Business Company under the laws of the British Virgin Islands hereby sign these Articles of Association the 27th day of October, 2009.Incorporator/s/ Nicole WheatleyPortcullis TrustNet (BVI) LimitedPortcullis TrustNet ChambersP.O. Box 3444Road Town, TortolaBritish Virgin Islands(Sgd. Nicole Wheatley)24EX4.15 3 f20f2017ex415_luokung.htm EXCLUSIVE BUSINESS COOPERATION AGREEMENT BY AND BETWEEN ZHONGCHUAN TIANXIA INFORMATIONTECHNOLOGY (SHENZHEN) CO., LTD., AND BEIJING MOBILE VISION TECHNOLOGY CO., LTD., DATED AUGUST 31, 2015Exhibit 4.15独家业务合作协议Exclusive Business Cooperation Agreement本独家业务合作协议（下称“本协议”）由以下双方于年月日在中华人民共和国（下称“中国”）北京市签署。This Exclusive Business Cooperation Agreement (this “Agreement”) is made and entered into by and between the following parties on in Beijing, thePeople’s Republic of China (“China” or the “PRC”).甲方：中传天下信息科技（深圳）有限公司Party A: Zhongchuan Tianxia Information Technology (Shenzhen) Co., Ltd.地址：深圳市南山区高新中三道2号深圳软件园一期五栋401A Address: 401A, Building 5, Phase 1, Shenzhen Software Park, No.2 Gaoxin Zhongsan Road, Nanshan District, Shenzhen统一社会信用代码：91440300565701058R Uniform Social Credit Code: 91440300565701058R乙方：北京中传视讯科技有限公司Party B: Beijing Mobile Vision Technology Co., Ltd.地址：北京市朝阳区光华路9号SOHO3QLAB32Address: LAB32, SOHO3Q, No 9, Guanghua Road, Chaoyang District, Beijing统一社会信用代码：9111010576215249XMUniform Social Credit Code: 9111010576215249XM甲方和乙方以下各称为“一方”，统称为“双方”。Each of Party A and Party B shall be hereinafter referred to as a “Party” respectively, and as “Parties” collectively.1秘密文件Strictly Confidential鉴于：Whereas,1.甲方是一家在中国注册的外商独资企业，拥有丰富的技术研发和产业化推广相关的管理和投资经验，并提供相关的技术支持和咨询服务；Party A is a whollyforeignowned enterprise established in China, which has rich experience in technology research development and industrializationpromotion management and investment, and provides relevant technical support and consulting services;2.乙方是一家在中国成立的有限责任公司，经中国有关政府部门批准依法主要从事手机视频技术开发、内容制作及市场推广；Party B is a limited company in China, mainly engages in mobile video technology research, development, content creation, sale and related industrialpromotion as approved by the relevant governmental authorities in China;3.甲方同意利用其技术、人员和信息优势，在本协议期间向乙方提供有关手机视频技术开发、内容制作及市场推广以及未来扩大业务规模和业务范围时乙方所需的技术支持、技术咨询等相关服务，乙方同意接受甲方或其指定方按本协议条款的规定提供的各种服务。Party A is willing to provide Party B with technology supports and technology consulting services in connection with mobile video technology research,development, content creation, sale and related industrial promotion and such services in connection with Party B’s extension of business scale orbroadening of businesses during the term of this Agreement, utilizing its advantages in technology, human resources, and information, and Party B iswilling to accept such services provided by Party A or Party A's designee(s), each on the terms set forth herein.2秘密文件Strictly Confidential据此，甲方和乙方经协商一致，达成如下协议：Now, therefore, through mutual discussion, the Parties have reached the following agreements:1.服务提供Services Provided by Party A1.1按照本协议条款和条件，乙方在此委任甲方在本协议期间作为乙方的独家服务提供者向乙方提供全面的和手机视频技术开发、内容制作及市场推广相关以及未来扩大业务规模和业务范围时乙方所需的技术支持、业务支持和相关咨询服务，具体内容包括但不限于以下内容：Party B hereby appoints Party A as Party B's exclusive services provider to provide Party B with complete technical support, business supportand related consulting services in connection with mobile video technology research, development, content creation, sale and related industrialpromotion and such services in connection with Party B’s extension of business scale or broadening of businesses during the term of thisAgreement, in accordance with the terms and conditions of this Agreement, which may include but not limited to:1.1.1为乙方提供其手机视频技术开发、内容制作及市场推广业务所需的一切服务支持，为乙方提供相当于包括总经理、行政人员、管理人员、筹划部门、商业运营、人力资源、财务、会计以及与乙方业务相关的一切业务操作所需人员所能提供的服务内容；managing all aspects of Party B’s business of mobile video technology research, development, content creation, sale and relatedindustrial promotion. In this capacity, Party A will procure or engage for Party B the services of a general manager and other managementstaff, including but not limited to personnel responsible for all administration, operations, planning, business development, humanresources, finance, accounting and other operations related to the Business of Party B;3秘密文件Strictly Confidential1.1.2为乙方制定全部的商业计划、销售目标，并为优化执行该等商业计划设计和建立相应的系统及操作程序；developing all business plans and sales projections of Party B, and for developing and establishing systems and procedures for optimumexecution of the business plans;1.1.3为乙方申请手机视频技术及内容制作相关专利提供咨询服务和支持；consulting services and support in connection with Party B’s applying for mobile video technology related patents and content creation;1.1.4为乙方手机视频技术产业化的发展方向、规模、品牌提升提供咨询服务；consulting services in connection with the development directions, size and business brands promotion of Party B’s mobile videotechnology industrialization;4秘密文件Strictly Confidential1.1.5为乙方提供与业务相关的办公、生产和销售服务，为乙方租赁场所，建立业务相关的系统和程序，满足乙方的其他要求；procuring or obtaining for Party B all office, production and distribution services related to the Business. It shall procure or obtainappropriate leases, establish systems and procedures needed to operate the business, fulfill orders for services;1.1.6尽最大努力为乙方建立手机视频技术销售市场，根据甲方为乙方制定的商业计划及销售目标代表乙方获取客户订单，同时为乙方提供与业务相关的客户服务，建立向客户开具票据的程序和与会计相关的托收服务。using its best efforts to establish mobile video technology related marketing and other structures to obtain orders for services &products from customers on behalf of Party B in accordance with Party B’s business plans, sales projections and objectives (asdeveloped by Party A) and procure or obtain customer services required in connection with the Business. It shall also establishprocedures for invoicing customers, and establish collection services with respect to accounts;1.1.7就乙方的劳动用工方面提供咨询服务和支持，包括但不限于，组织实施对乙方业务人员、行政人员、管理人员等人员进行培训和考核，协助建立健全的人力资源管理制度和实现人力资源的良好配置；consulting services and support regarding labor system of Party B, including but without limitation to labor training and evaluation ofsales person, administrative staff and management person etc. and establishment of human resources management system to well;5秘密文件Strictly Confidential1.1.8提供乙方需要的客户数据统计、分析及相关数据库的建设和维护等咨询服务；providing Party B with compile and analysis of client data and consulting services of establishment and maintenance of data base;1.1.9提供乙方需要的软件和相关技术支持服务；providing software Party B requires and other technical support;1.1.10接受乙方委托，对乙方的手机视频技术研发和产业化推广业务经营进行指导和管理；guiding and management on Party B’s business of mobile video technology research and development and related industrial promotionoperation according to Party B’s commission;1.1.11当乙方业务规模发展或业务范围扩大需要时，购买乙方业务经营需要的设备；in the event of the demand of Party B’s development of business scale or broadening of businesses, purchase the equipments which itneeds for the operation of its business;1.1.12当乙方业务规模发展或业务范围扩大需要时，完成乙方项目中的全部或部分工作；in the event of the demand of Party B’s development of business scale or broadening of businesses, complete the work of Party B’sproject in whole or in party;6秘密文件Strictly Confidential1.1.13当乙方业务规模发展或业务范围扩大需要时，开发新技术；in the event of the demand of Party B’s development of business scale or broadening of businesses, develop new technology;1.1.14乙方委托甲方，且甲方接受委托提供的其他服务。other services Party B appoints Party A to provide and Party A agrees to provide.1.2乙方接受甲方的咨询和服务。乙方进一步同意，除非经甲方事先书面同意，在本协议期间，就本协议约定的服务或其他事宜，乙方不得直接或间接地从任何第三方获得任何与本协议相同或类似的咨询和/或服务，并不得与任何第三方就本协议所述事项建立任何类似的合作关系。双方同意，甲方可以指定其他方（该被指定方可以与乙方签署本协议第1.3条描述的某些协议）为乙方提供本协议约定的服务和/或支持。Party B agrees to accept all the consultations and services provided by Party A. Party B further agrees that unless with Party A's prior writtenconsent, during the term of this Agreement, Party B shall not directly or indirectly accept the same or any similar consultations and/or servicesprovided by any third party and shall not establish similar corporation relationship with any third party regarding the matters contemplated by thisAgreement. Party A may appoint other parties, who may enter into certain agreements described in Section 1.3 with Party B, to provide Party Bwith the consultations and/or services under this Agreement.7秘密文件Strictly Confidential1.3服务的提供方式Service Providing Methodology1.3.1双方同意在本协议有效期内，视情况而定，乙方可以与甲方或甲方指定的其他方进一步签订技术服务协议和/或咨询服务协议，对各项业务培训、技术服务、咨询服务的具体内容、方式、人员、收费等进行约定。Parties agree that during the term of this Agreement, where necessary, Party B may enter into further technical service agreements and/orconsulting service agreements with Party A or any other party designated by Party A, which shall provide the specific contents, manner,personnel, and fees for the specific technical services and consulting services.1.3.2为更好地履行本协议，双方同意，在甲方认为必要时，乙方应在本协议有效期内与甲方或甲方指定的其他方根据业务进展需要随时签署协议，由甲方或其指定方向乙方提供服务。To fulfill this Agreement, Parties agree that during the term of this Agreement, where Party A deems necessary, Party B shall enter intoagreements with Party A or any other party designated by Party A which shall set forth that Party A or any other party designated byParty A provide services to Party B based on the needs of the business of Party B.8秘密文件Strictly Confidential2.服务的价格和支付方式The Calculation and Payment of the Service Fees双方同意，就甲方提供的服务，乙方应向甲方支付服务费（“服务费”）。服务费不应低于乙方税后利润的80%。服务费应当按季支付；经甲方事先书面同意，服务费可以根据乙方的经营需要进行调整。Both Parties agree that, in consideration of the services provided by Party A, Party B shall pay Party A fees (the “Service Fees”), which shall not be lessthan 80% of Party B’s aftertax profits . The Service Fees shall be due and payable on a quarterly basis; upon the prior written consent by Party A, the rateof Service Fees may be adjusted pursuant to the operational needs of Party B.3.知识产权和保密条款Intellectual Property Rights and Confidentiality Clauses3.1在中国法律允许的范围内，甲方对履行本协议而产生或创造的任何权利、所有权、权益和所有知识产权包括但不限于著作权、专利权、专利申请权、软件、技术秘密、商业机密及其他均享有独占的和排他的权利和利益。乙方须签署所有适当的文件，采取所有适当的行动，递交所有的文件和/或申请，提供所有适当的协助，以及做出所有其他依据甲方的自行决定认为是必要的行为，以将任何对该等知识产权的所有权、权利和权益赋予甲方，和/或完善对甲方此等知识产权权利的保护。To the extent permitted under the PRC laws, Party A shall have exclusive and proprietary rights and interests in all rights, ownership, interests andintellectual properties arising out of or created during the performance of this Agreement, including but not limited to copyrights, patents, patentapplications, software, technical secrets, trade secrets and others. Party B shall execute all appropriate documents, take all appropriate actions,submit all filings and/or applications, render all appropriate assistance and otherwise conduct whatever is necessary deemed as by Party A in itssole discretion for the purposes of vesting any ownership, right or interest of any such intellectual property rights in Party A, and/or perfectingthe protections for any such intellectual property rights in Party A.9秘密文件Strictly Confidential3.2双方承认及确定有关本协议、本协议内容，以及彼此就准备或履行本协议而交换的任何口头或书面资料均被视为保密信息。双方应当对所有该等保密信息予以保密，而在未得到另一方书面同意前，不得向任何第三者披露任何保密信息，惟下列信息除外：(a)公众人士知悉或将会知悉的任何信息（惟并非由接受保密信息之一方擅自向公众披露）；(b)根据适用法律法规、股票交易规则、或政府部门或法院的命令而所需披露之任何信息；或(c)由任何一方就本协议所述交易而需向其股东、投资者、法律或财务顾问披露之信息，而该股东、法律或财务顾问亦需遵守与本条款相类似之保密责任。如任何一方工作人员或聘请机构的泄密均视为该方的泄密，需依本协议承担违约责任。无论本协议以任何理由终止，本条款仍然生效。The Parties acknowledge that the existence and the terms of this Agreement and any oral or written information exchanged between the Parties inconnection with the preparation and performance this Agreement are regarded as confidential information. Each Party shall maintainconfidentiality of all such confidential information, and without obtaining the written consent of the other Party, it shall not disclose any relevantconfidential information to any third parties, except for the information that: (a) is or will be in the public domain (other than through the receivingParty’s unauthorized disclosure); (b) is under the obligation to be disclosed pursuant to the applicable laws or regulations, rules of any stockexchange, or orders of the court or other government authorities; or (c) is required to be disclosed by any Party to its shareholders, investors,legal counsels or financial advisors regarding the transaction contemplated hereunder, provided that such shareholders, investors, legal counselsor financial advisors shall be bound by the confidentiality obligations similar to those set forth in this Section. Disclosure of any confidentialinformation by the staff members or agencies hired by any Party shall be deemed disclosure of such confidential information by such Party, whichParty shall be held liable for breach of this Agreement. This Section shall survive the termination of this Agreement for any reason.3.3双方同意，不论本协议是否变更、解除或终止，本条款将持续有效。The Parties agree that this Section shall survive changes to, and rescission or termination of, this Agreement.4.陈述和保证Representations and Warranties4.1甲方陈述和保证如下：Party A hereby represents and warrants as follows:4.1.1甲方是按照中国法律合法注册并有效存续的外商独资企业。Party A is a whollyforeignowned enterprise legally registered and validly existing in accordance with the laws of China.10秘密文件Strictly Confidential4.1.2甲方已采取必要的公司行为，获得必要的授权，并取得第三方和政府部门的同意及批准（若需）以签署和履行本协议；甲方对本协议的签署和履行并不违反法律法规的明确规定。Party A has taken all necessary corporate actions, obtained all necessary authorization and the consent and approval from third partiesand government agencies (if any) for the execution and performance of this Agreement. Party A’s execution and performance of thisAgreement do not violate any explicit requirements under any law or regulation binding on Party A.4.1.3本协议构成对其合法、有效、有约束力并依本协议之条款对其强制执行的义务。This Agreement constitutes Party A's legal, valid and binding obligations, enforceable in accordance with its terms.4.2乙方陈述和保证如下：Party B hereby represents and warrants as follows:4.2.1乙方是按照中国法律合法登记且有效存续的有限责任公司，乙方根据政府部门的批准和许可从事手机视频技术开发、内容制作和产业化市场推广的经营。Party B is a limited company legally registered and validly existing in accordance with the laws of China, engages in mobile videotechnology research, development, content creation, sale and related industrial promotion pursuant to governmental approvals andpermits;11秘密文件Strictly Confidential4.2.2乙方已采取必要的行为，获得必要的授权，并取得第三方和政府部门的同意及批准（若需）以签署和履行本协议；乙方对本协议的签署和履行并不违反法律法规的明确规定。Party B has taken all necessary actions, obtained all necessary authorization and the consent and approval from third parties andgovernment agencies (if any) for the execution and performance of this Agreement. Party B’s execution and performance of thisAgreement do not violate any explicit requirements under any law or regulation binding on Party B.4.2.3本协议构成对其合法、有效、有约束力并依本协议之条款对其强制执行的义务。This Agreement constitutes Party B's legal, valid and binding obligations, and shall be enforceable against it.5.生效和有效期Effectiveness and Term5.1本协议于文首标明的协议日期签署并同时生效。除非依本协议或双方其他协议的约定而提前终止，本协议有效期为20年，但甲、乙双方应自本协议签署后，每3个月对本协议的内容做一次审查，以决定是否需要根据当时的情况对本协议作出相应修改和补充。This Agreement is executed on the date first above written and shall take effect as of such date. Unless earlier terminated in accordance with theprovisions of this Agreement or relevant agreements separately executed between the Parties, the term of this Agreement shall be 20 years. Afterthe execution of this Agreement, both Parties shall review this Agreement every 3 months to determine whether to amend or supplement theprovisions in this Agreement based on the actual circumstances at that time.12秘密文件Strictly Confidential5.2协议期满前，经甲方书面确认，本协议可以延期。延期的期限由甲方决定，乙方必须无条件地同意该延期。The term of this Agreement may be extended if confirmed in writing by Party A prior to the expiration thereof. The extended term shall bedetermined by Party A, and Party B shall accept such extended term unconditionally.6.终止Termination6.1除非依据本协议续期，本协议于到期之日终止。Unless renewed in accordance with the relevant terms of this Agreement, this Agreement shall be terminated upon the date of expiration hereof.6.2本协议有效期内，除非甲方对乙方有重大过失或存在欺诈行为，乙方不得提前终止本协议。尽管如此，甲方可在任何时候通过提前30天向乙方发出书面通知的方式终止本协议。During the term of this Agreement, unless Party A commits gross negligence, or a fraudulent act, against Party B, Party B shall not terminate thisAgreement prior to its expiration date. Nevertheless, Party A shall have the right to terminate this Agreement upon giving 30 days' prior writtennotice to Party B at any time.6.3在本协议终止之后，双方在第3、7和8条项下的权利和义务将继续有效。The rights and obligations of the Parties under Articles 3, 7 and 8 shall survive the termination of this Agreement.13秘密文件Strictly Confidential7.适用法律和争议解决Governing Law and Resolution of Disputes7.1本协议的订立、效力、解释、履行、修改和终止以及争议的解决适用中国的法律。The execution, effectiveness, construction, performance, amendment and termination of this Agreement and the resolution of disputes hereundershall be governed by the laws of China.7.2因解释和履行本协议而发生的任何争议，本协议双方应首先通过友好协商的方式加以解决。如果在一方向其他方发出要求协商解决的书面通知后30天之内争议仍然得不到解决，则任何一方均可将有关争议提交给中国国际经济贸易仲裁委员会，由该会按照其仲裁规则仲裁解决。仲裁应在北京进行，使用之语言为中文。仲裁裁决是终局性的，对各方均有约束力。In the event of any dispute with respect to the construction and performance of this Agreement, the Parties shall first resolve the dispute throughfriendly negotiations. In the event the Parties fail to reach an agreement on the dispute within 30 days after either Party's request to the otherParties for resolution of the dispute through negotiations, either Party may submit the relevant dispute to the China International Economic andTrade Arbitration Commission for arbitration, in accordance with its Arbitration Rules. The arbitration shall be conducted in Beijing, and thelanguage used in arbitration shall be Chinese. The arbitration award shall be final and binding on all Parties.14秘密文件Strictly Confidential7.3因解释和履行本协议而发生任何争议或任何争议正在进行仲裁时，除争议的事项外，本协议双方仍应继续行使各自在本协议项下的其他权利并履行各自在本协议项下的其他义务。Upon the occurrence of any disputes arising from the construction and performance of this Agreement or during the pending arbitration of anydispute, except for the matters under dispute, the Parties to this Agreement shall continue to exercise their respective rights under this Agreementand perform their respective obligations under this Agreement.8.补偿Indemnification就甲方根据本协议向乙方提供的咨询和服务内容所产生或引起的针对甲方的诉讼、请求或其他要求而招致的任何损失、损害、责任或费用都应由乙方补偿给甲方，以使甲方不受损害，除非该损失、损害、责任或费用是因甲方的重大过失或故意而产生的。Party B shall indemnify and hold harmless Party A from any losses, injuries, obligations or expenses caused by any lawsuit, claims or other demandsagainst Party A arising from or caused by the consultations and services provided by Party A to Party B pursuant this Agreement, except where suchlosses, injuries, obligations or expenses arise from the gross negligence or willful misconduct of Party A.15秘密文件Strictly Confidential9.通知Notices9.1本协议项下要求或发出的所有通知和其他通信应通过专人递送、挂号邮寄、邮资预付或快递服务或传真的方式发到该方下列地址。每一通知还应再以电子邮件送达。该等通知视为有效送达的日期按如下方式确定：All notices and other communications required or permitted to be given pursuant to this Agreement shall be delivered personally or sent byregistered mail, postage prepaid, by a courier service or by facsimile transmission to the address of such Party set forth below. A confirmationcopy of each notice shall also be sent by email. The dates on which notices shall be deemed to have been effectively given shall be determined asfollows:9.1.1通知如果是以专人递送、快递服务或挂号邮寄、邮资预付发出的，则以于设定为通知的地址在接收或拒收之日为有效送达日。Notices given by personal delivery, by courier service or by registered mail, postage prepaid, shall be deemed effectively given on thedate of receipt or refusal at the address specified for notices.9.1.2通知如果是以传真发出的，则以成功传送之日为有效送达日（应以自动生成的传送确认信息为证）。Notices given by facsimile transmission shall be deemed effectively given on the date of successful transmission (as evidenced by anautomatically generated confirmation of transmission).16秘密文件Strictly Confidential9.2为通知的目的，双方地址如下：For the purpose of notices, the addresses of the Parties are as follows:甲方：中传天下信息科技（深圳）有限公司Party A: Zhongchuan Tianxia Information Technology (Shenzhen) Co., Ltd.地址：深圳市南山区高新中三道2号深圳软件园一期五栋401AAddress:401A, Building 5, Phase 1, Shenzhen Software Park, No.2 Gaoxin Zhongsan Road, Nanshan District, Shenzhen收件人：洪婷Attn: Hong Ting乙方：北京中传视讯科技有限公司Party B: Beijing Mobile Vision Technology Co., Ltd地址：北京市朝阳区光华路9号SOHO3QLAB32Address: LAB32, SOHO3Q, No 9, Guanghua Road, Chaoyang District, Beijing.收件人：宋雪松Attn.: Song Xuesong9.3任何一方可按本条规定随时给另一方发出通知来改变其接收通知的地址。Any Party may at any time change its address for notices by a notice delivered to the other Party in accordance with the terms hereof.17秘密文件Strictly Confidential10.协议的转让Assignment10.1乙方不得将其在本协议项下的权利与义务转让给第三方，除非事先征得甲方的书面同意。Without Party A's prior written consent, Party B shall not assign its rights and obligations under this Agreement to any third party.10.2乙方在此同意，甲方可以在其需要时向其他第三方转让其在本协议项下的权利和义务，并在该等转让发生时甲方仅需向乙方发出书面通知，并且无需再就该等转让征得乙方的同意。Party B agrees that Party A may assign its obligations and rights under this Agreement to any third party upon a prior written notice to Party Bbut without the consent of Party B.11.协议的分割性Severability如果本协议有任何一条或多条规定根据任何法律或法规在任何方面被裁定为无效、不合法或不可执行，本协议其余规定的有效性、合法性或可执行性不应因此在任何方面受到影响或损害。双方应通过诚意磋商，争取以法律许可以及双方期望的最大限度内有效的规定取代那些无效、不合法或不可执行的规定，而该等有效的规定所产生的经济效果应尽可能与那些无效、不合法或不能强制执行的规定所产生的经济效果相似。In the event that one or several of the provisions of this Agreement are found to be invalid, illegal or unenforceable in any aspect in accordance with anylaws or regulations, the validity, legality or enforceability of the remaining provisions of this Agreement shall not be affected or compromised in any aspect.The Parties shall strive in good faith to replace such invalid, illegal or unenforceable provisions with effective provisions that accomplish to the greatestextent permitted by law and the intentions of the Parties, and the economic effect of such effective provisions shall be as close as possible to the economiceffect of those invalid, illegal or unenforceable provisions.18秘密文件Strictly Confidential12.协议的修改、补充Amendments and Supplements双方可以书面协议方式对本协议作出修改和补充。经过双方签署的有关本协议的修改协议和补充协议是本协议组成部分，具有与本协议同等的法律效力。Any amendments and supplements to this Agreement shall be in writing. The amendment agreements and supplementary agreements that have beensigned by the Parties and that relate to this Agreement shall be an integral part of this Agreement and shall have the same legal validity as this Agreement.13.语言和副本Language and Counterparts本协议以中文和英文书就，一式二份，甲乙双方各持一份，具有同等效力；中英文版本如有冲突，应以中文版为准。This Agreement is written in both Chinese and English language in two copies, each Party having one copy with equal legal validity; in case there is anyconflict between the Chinese version and the English version, the Chinese version shall prevail.本页其余部分刻意留为空白The Remainder of this page is intentionally left blank19秘密文件Strictly Confidential有鉴于此，双方已使得经其授权的代表于文首所述日期签署了本独家业务合作协议并即生效，以昭信守。IN WITNESS WHEREOF, the Parties have caused their authorized representatives to execute this Exclusive Business Cooperation Agreement as of thedate first above written.甲方：中传天下信息科技（深圳）有限公司（盖章）Party A: Zhongchuan Tianxia Information Technology (Shenzhen) Co., Ltd.(Seal)签字：By: /s/ Hong Ting 姓名：洪婷Name: Hong Ting职务：总经理Title: General Manager20秘密文件Strictly Confidential有鉴于此，双方已使得经其授权的代表于文首所述日期签署了本独家业务合作协议并即生效，以昭信守。IN WITNESS WHEREOF, the Parties have caused their authorized representatives to execute this Exclusive Business Cooperation Agreement as of thedate first above written. 乙方：北京中传视讯科技有限公司（盖章）Party B: Beijing Mobile Vision Technology Co., Ltd. (Seal)签字：By: /s/ Song Xuesong 姓名：宋雪松Name: Song Xuesong职务：董事长Title: Chairman of the Board21秘密文件Strictly ConfidentialEX4.16 4 f20f2017ex416_luokung.htm EXCLUSIVE OPTION AGREEMENT BY AND AMONG ZHONGCHUAN TIANXIA INFORMATION TECHNOLOGY(SHENZHEN) CO., LTD., XUESONG SONG, WEILI CHEN, PING WANG, DONGLAI LIU, AND BEIJING MOBILE VISION TECHNOLOGY CO., LTD., DATEDAUGUST 31, 2015Exhibit 4.16独家购买权协议Exclusive Option Agreement本独家购买权协议 (下称“本协议”) 由以下各方于年月日在中华人民共和国（下称“中国”）北京签订：This Exclusive Option Agreement (this “Agreement”) is executed by and among the Parties below as of in Beijing, the People’s Republic of China (the“China” or “PRC”):甲方：中传天下信息科技（深圳）有限公司，一家依照中国法律设立和存在的外商独资企业，地址为深圳市南山区高新中三道2号深圳软件园一期五栋401A；Party A:Zhongchuan Tianxia Information Technology (Shenzhen) Co., Ltd., a whollyforeignowned enterprise organized and existing under the laws of China,with its address at 401A, Building 5, Phase 1, Shenzhen Software Park, No.2 Gaoxin Zhongsan Road, Nanshan District, Shenzhen.乙方：Party B:a)宋雪松Song Xuesong身份证号码:120112196809040417ID Card No.:120112196809040417住所：天津市河西区广东路中裕园33702Address:Zhongyu Yuan 33702, Guangdong Road, Hexi District, Tianjinb)陈蔚力Chen Weili身份证号码:120106197309240516ID Card No.:120106197309240516住所：广东省深圳市宝安区宝城上川路15号Address:Baocheng Shangchuan Road 15, Baoan District, Shenzhen, Guangdong1秘密文件Strictly Confidentialc)王平Wang Ping身份证号码:35020319691030401xID Card No.:35020319691030401x住所：广东省深圳市南山区高新南环路36号彩虹之岸12栋4AAddress:Caihong Zhi’an Building No.12 Suite 4A, Gaoxin Nanhuan Road 36, Nanshan District, Shenzhen, Guangdongd)刘东来Liu Donglai身份证号码:120107196810103912ID Card No.:120107196810103912住所：天津市和平区南京路诚基经贸中心1号楼2门1702号Address:No 1702, Door 2, Build 1, Chengji Economic and Trade Centre, Nanjing Road, Heping District, Tianjin.丙方：北京中传视讯科技有限公司，一家依照中国法律设立和存在的有限责任公司，地址为北京市朝阳区光华路9号SOHO3QLAB32，统一社会信用代码为9111010576215249XM；Party C:Beijing Mobile Vision Technology Co., Ltd., a limited company duly registered in China, with its address at LAB32, SOHO3Q, No 9, Guanghua Road,Chaoyang District, Beijing and its uniform social credit code of 9111010576215249XM.2秘密文件Strictly Confidential在本协议中，甲方、乙方和丙方以下各称“一方”，合称“各方”。In this Agreement, each of Party A, Party B and Party C shall be referred to as a “Party” respectively, and they shall be collectively referred to as the“Parties”.鉴于，乙方系丙方股东并合计持有丙方100%股权，乙方将按本协议之条款授予甲方购买全部或部分该股权的权利。Whereas, Party B are the shareholders of Party C and jointly hold 100% of the equity interest in Party C, and Party B are willing to grant to Party A the rightto acquire such equity interest, in whole or in part, on the terms herein.现各方协商一致，达成如下协议：Now therefore, upon mutual discussion and negotiation, the Parties have reached the following agreement:1.股权买卖Sale and Purchase of Equity Interest1.1授予权利Option Granted乙方在此不可撤销地授予甲方在中国法律允许的前提下，按照甲方自行决定的行使步骤，并按照本协议第1.3条所述的价格，随时一次或多次从乙方购买或指定一人或多人(“被指定人”)从乙方购买其目前和将来所持有的丙方的全部或部分股权（无论乙方出资额和/或持股比例将来是否发生变化）的一项不可撤销的专有权(“股权购买权”)。除甲方和被指定人外，任何第三人均不得享有股权购买权或其他与乙方股权有关的权利。丙方特此同意乙方向甲方授予股权购买权。本款及本协议所规定的“人”指个人、公司、合营企业、合伙、企业、信托或非公司组织。Party B hereby irrevocably grant Party A an irrevocable and exclusive right to purchase, or designate one or more persons (each, a “Designee”) topurchase the equity interests in Party C now and in the future held by Party B (regardless whether Party B’s capital contribution amount and/orpercentage of shareholding will be changed in the future) once or at multiple times at any time in part or in whole at Party A’s sole and absolutediscretion to the extent permitted by Chinese laws and at the price described in Section 1.3 herein (such right being the “Equity Interest PurchaseOption”). Except for Party A and the Designee(s), no other person shall be entitled to the Equity Interest Purchase Option or other rights withrespect to the equity interests of Party B. Party C hereby agrees to the grant by Party B of the Equity Interest Purchase Option to Party A. Theterm “person” as used herein shall refer to individuals, corporations, partnerships, partners, enterprises, trusts or noncorporate organizations.3秘密文件Strictly Confidential1.2行使步骤Steps for Exercise of Equity Interest Purchase Option甲方行使其股权购买权以符合中国法律和法规的规定为前提。甲方行使股权购买权时，应向乙方发出书面通知(“股权购买通知”)，股权购买通知应载明以下事项：(a)甲方关于行使股权购买权的决定；(b)甲方拟从乙方购买的股权份额(“被购买的股权”)；和(c)被购买的股权的买入日期。Subject to the provisions of the laws and regulations of China, Party A may exercise the Equity Interest Purchase Option by issuing a writtennotice to Party B (the “Equity Interest Purchase Option Notice”), specifying: (a) Party A’s decision to exercise the Equity Interest PurchaseOption; (b) the portion of equity interests to be purchased from Party B (the “Optioned Interests”); and (c) the date for purchasing the OptionedInterests.1.3股权买价Equity Interest Purchase Price被购买的股权的买价（“股权买价”）应是行权当时中国法律允许的最低价格。乙方收到该股权对价后，应当提供给丙方与该股权买价相同金额的借款，该借款的期限为20年，且为无息。乙方应当在该借款期限届满时就该借款放弃对丙方的债权。The purchase price of the Optioned Interests (the “Equity Interest Purchase Price”) shall be the lowest price permitted by the laws of China. Afterreceiving the Equity Interest Purchase Price, Party B shall make an interestfree loan equivalent to the amount of Equity Interest Purchase Price toParty C, of which term is 20 years. Each member of Party B shall give up his(her) creditor’s right when the loan term expires.4秘密文件Strictly Confidential1.4转让被购买股权Transfer of Optioned Interests甲方每次行使股权购买权时：For each exercise of the Equity Interest Purchase Option:1.4.1乙方应责成丙方及时召开股东会会议，在该会议上，应通过批准乙方向甲方和/或被指定人转让被购买的股权的决议；Party B shall cause Party C to promptly convene a shareholders meeting, at which a resolution shall be adopted approving Party B’stransfer of the Optioned Interests to Party A and/or the Designee(s);1.4.2乙方应就其向甲方和/或被指定人转让被购买股权取得丙方其他股东同意该转让并放弃优先购买权的书面声明。Party B shall obtain written statements from the other shareholder of Party C giving consent to the transfer of the equity interest to PartyA and/or the Designee(s) and waiving any right of first refusal related thereto.1.4.3乙方应与甲方和/或(在适用的情况下)被指定人按照本协议及股权购买通知的规定，为每次转让签订股权转让协议；Party B shall execute a share transfer contract with respect to each transfer with Party A and/or each Designee (whichever is applicable),in accordance with the provisions of this Agreement and the Equity Interest Purchase Option Notice regarding the Optioned Interests;5秘密文件Strictly Confidential1.4.4有关方应签署所有其他所需协议、协议或文件，取得全部所需的政府批准和同意，并采取所有所需行动，在不附带任何担保权益的情况下，将被购买的股权的有效所有权转移给甲方和/或被指定人并使甲方和/或被指定人成为被购买的股权的登记在册所有人。为本款及本协议的目的，“担保权益”包括担保、抵押、第三方权利或权益，任何购股权、收购权、优先购买权、抵销权、所有权扣留或其他担保安排等；但为了明确起见，不包括在本协议、乙方股权质押协议项下产生的任何担保权益。本款及本协议所规定的“乙方股权质押协议”指甲方、乙方和丙方于本协议签署之日签订的股权质押协议，根据股权质押协议，乙方为担保丙方能履行丙方与甲方签订的独家业务合作协议项下的义务，而向甲方质押其在丙方的全部乙方股权。The relevant Parties shall execute all other necessary contracts, agreements or documents, obtain all necessary government licenses andpermits and take all necessary actions to transfer valid ownership of the Optioned Interests to Party A and/or the Designee(s),unencumbered by any security interests, and cause Party A and/or the Designee(s) to become the registered owner(s) of the OptionedInterests. For the purpose of this Section and this Agreement, “security interests” shall include securities, mortgages, third party’s rightsor interests, any stock options, acquisition right, right of first refusal, right to offset, ownership retention or other security arrangements,but shall be deemed to exclude any security interest created by this Agreement and Party B’s Equity Interest Pledge Agreement. “PartyB’s Equity Interest Pledge Agreement” as used in this Section and this Agreement shall refer to the Equity Interest Pledge Agreementexecuted by and among Party A, Party B and Party C on the date of this Agreement, whereby Party B pledge all of their equity interests inParty C to Party A, in order to guarantee Party C’s performance of its obligations under the Exclusive Business Corporation Agreementexecuted by and between Party C and Party A.6秘密文件Strictly Confidential2.知识产权独家购买权Exclusive Option regarding the Intellectual Property Rights2.1本协议签订之日起，若乙方拟转让、出售或以其他方式处置（任一处置方式以下简称“转让”）其拥有或持有的全部或部分知识产权（以下称“知识产权”，定义见第2.4条），甲方有权独家购买该等知识产权。From the date hereof, if Party B proposes to transfer, sell or dispose of (each, a “transfer”) all or any part of the intellectual property rights ownedor held by Party B (“IPR”), Party A shall have exclusive option.2.2若乙方有意转让全部或部分知识产权，应事先向甲方发出书面通知(“转让通知”)，转让通知应载明以下事项：(a) 乙方关于转让知识产权的意向；(b) 乙方拟转让的知识产权清单(“拟转让知识产权”)及转让的价格和其他条件。转让通知视为乙方向甲方发出的一份要约，按照该要约，乙方同意按转让通知中指定的价格条件向甲方转让全部或部分拟转让知识产权。Prior to Party B proposes to transfer all or any part of its IPR, Party B shall give Party A a written notice (“Transfer Notice”), which shall specify (a)Party B’s intention to make the transfer; (b) the list of IPR to be transferred (“Offered IPR”) and the consideration and other conditions uponwhich the transfer is to be made. The Transfer Notice constitutes Party B’s offer given to Party A, pursuant to which, Party B agrees to transfer allor any part of its Offered IPR to Party A based on the same conditions described in the Transfer Notice.7秘密文件Strictly Confidential2.3甲方收到转让通知后，有权在30日内选择按照转让通知中列明的转让价格和条件购买拟转让知识产权。如果甲方行使其独家购买权，双方应于甲方收到转让通知后45日内签订有关的知识产权转让协议，乙方应办理法律规定的知识产权转让的批准和登记手续。Party A shall have an option for a period of 30 days from Party A’s receipt of the Transfer Notice to elect to purchase the Offered IPR at the sameprice and subject to the same conditions as described in the Transfer Notice. If Party A decides to exercise its exclusive option, the parties shallenter into relevant IPR transfer agreement within 45 days upon Party A’s receipt of the Transfer Notice and Party B is responsible to complete allrelated approvals and registrations formalities as prescribed by the PRC law.2.4本协议第2条所称“知识产权”指任何知识产权，包括但不限于著作权、专利权、专利申请权、商标、域名、软件、专有技术，并包括前述知识产权申请权利以及登记注册的权利，以及其他所有与前述知识产权有关的权利和权益。The “IPR” referred to in this Article 2 means any intellectual property rights, including, without limitations, copyrights, patents, patentapplications, trademarks, domain names, software and knowhow together with (a) all rights to apply for or register any of the foregoing and (b) allother rights and interests to any of the foregoing.8秘密文件Strictly Confidential3.承诺Covenants3.1有关丙方的承诺Covenants regarding Party C乙方（作为丙方的股东）和丙方在此承诺：Party B (as the shareholders of Party C) and Party C hereby covenant as follows:3.1.1未经甲方的事先书面同意，不以任何形式补充、更改或修改丙方公司章程文件，增加或减少其注册资本，或以其他方式改变其注册资本结构；Without the prior written consent of Party A, they shall not in any manner supplement, change or amend the articles of association andbylaws of Party C, increase or decrease its registered capital, or change its structure of registered capital in other manners;3.1.2按照良好的财务和商业标准及惯例，保持其公司的存续，审慎地及有效地经营其业务和处理事务；They shall maintain Party C’s corporate existence in accordance with good financial and business standards and practices by prudentlyand effectively operating its business and handling its affairs;3.1.3未经甲方的事先书面同意，不在本协议签署之日起的任何时间出售、转让、抵押或以其他方式处置丙方的任何资产、业务或收入的合法或受益权益，或允许在其上设置任何其他担保权益；Without the prior written consent of Party A, they shall not at any time following the date hereof, sell, transfer, mortgage or dispose of inany manner any assets of Party C or legal or beneficial interest in the business or revenues of Party C, or allow the encumbrance thereonof any security interest;3.1.4未经甲方的事先书面同意，不发生、继承、保证或容许存在任何债务，但(i)正常或日常业务过程中产生而不是通过借款方式产生的债务；和(ii)已向甲方披露和得到甲方书面同意的债务除外；Without the prior written consent of Party A, they shall not incur, inherit, guarantee or suffer the existence of any debt, except for (i)debts incurred in the ordinary course of business other than through loans; and (ii) debts disclosed to Party A for which Party A’swritten consent has been obtained;9秘密文件Strictly Confidential3.1.5一直在正常业务过程中经营所有业务，以保持丙方的资产价值，不进行任何足以影响其经营状况和资产价值的作为/不作为；They shall always operate all of Party C’s businesses during the ordinary course of business to maintain the asset value of Party C andrefrain from any action/omission that may affect Party C’s operating status and asset value;3.1.6未经甲方的事先书面同意，不得让丙方签订任何重大协议，但在正常业务过程中签订的协议除外(就本段而言，如果一份协议的价值超过【人民币10万元】，即被视为重大协议)；Without the prior written consent of Party A, they shall not cause Party C to execute any major contract, except the contracts in theordinary course of business (for purpose of this subsection, a contract with a value exceeding RMB 100,000 shall be deemed a majorcontract);3.1.7未经甲方的事先书面同意，丙方不得向任何人提供贷款或信贷；Without the prior written consent of Party A, they shall not cause Party C to provide any person with any loan or credit;3.1.8应甲方要求，向其提供所有关于丙方的营运和财务状况的资料；They shall provide Party A with information on Party C’s business operations and financial condition at Party A’s request;10秘密文件Strictly Confidential3.1.9如甲方提出要求，丙方应从甲方接受的保险公司处购买和持有有关其资产和业务的保险，该保险的金额和险种应与经营类似业务的公司一致；If requested by Party A, they shall procure and maintain insurance in respect of Party C’s assets and business from an insurance carrieracceptable to Party A, at an amount and type of coverage typical for companies that operate similar businesses;3.1.10未经甲方的事先书面同意，丙方不得与任何人合并或联合，或对任何人进行收购或投资；Without the prior written consent of Party A, they shall not cause or permit Party C to merge, consolidate with, acquire or invest in anyperson;3.1.11将发生的或可能发生的与丙方资产、业务或收入有关的诉讼、仲裁或行政程序立即通知甲方；They shall immediately notify Party A of the occurrence or possible occurrence of any litigation, arbitration or administrative proceedingsrelating to Party C’s assets, business or revenue;3.1.12为保持丙方对其全部资产的所有权，签署所有必要或适当的文件，采取所有必要或适当的行动和提出所有必要或适当的控告或对所有索偿进行必要和适当的抗辩；To maintain the ownership by Party C of all of its assets, they shall execute all necessary or appropriate documents, take all necessary orappropriate actions and file all necessary or appropriate complaints or raise necessary and appropriate defenses against all claims;11秘密文件Strictly Confidential3.1.13未经甲方事先书面同意，不得以任何形式派发股息予各股东，但一经甲方要求，丙方应立即将其所有可分配利润全部立即分配给其各股东；及Without the prior written consent of Party A, they shall ensure that Party C shall not in any manner distribute dividends to itsshareholders, provided that upon Party A’s written request, Party C shall immediately distribute all distributable profits to itsshareholders; and3.1.14根据甲方的要求，委任由其指定的任何人士出任丙方的董事和/或执行董事。At the request of Party A, they shall appoint any persons designated by Party A as the director and/or executive director of Party C.3.2乙方和丙方的承诺Covenants of Party B and Party C乙方承诺：Party B hereby covenant as follows:3.2.1未经甲方的事先书面同意，不出售、转让、抵押或以其他方式处置其拥有的丙方的股权的合法或受益权益，或允许在其上设置任何其他担保权益，但根据乙方签署的《股权质押协议》在该股权上设置的质押则除外；Without the prior written consent of Party A, Party B shall not sell, transfer, mortgage or dispose of in any other manner any legal orbeneficial interest in the equity interests in Party C held by Party B, or allow the encumbrance thereon of any security interest, except forthe pledge placed on these equity interests in accordance with Party B’s Equity Interest Pledge Agreement;12秘密文件Strictly Confidential3.2.2促使丙方股东会和/或执行董事不批准在未经甲方的事先书面同意的情况下，出售、转让、抵押或以其他方式处置任何乙方持有之丙方的股权的合法权益或受益权，或允许在其上设置任何其他担保权益，但批准根据乙方签署的《股权质押协议》在乙方股权上设置的质押则除外；Party B shall cause the shareholders’ meeting and/or the executive director of Party C not to approve the sale, transfer, mortgage ordisposition in any other manner of any legal or beneficial interest in the equity interests in Party C held by Party B, or allow theencumbrance thereon of any security interest, without the prior written consent of Party A, except for the pledge placed on these equityinterests in accordance with Party B’s Equity Interest Pledge Agreement;3.2.3未经甲方的事先书面同意的情况下，对于丙方与任何人合并或联合，或对任何人进行收购或投资，乙方将促成丙方股东会或执行董事不予批准；Party B shall cause the shareholders’ meeting or the executive director of Party C not to approve the merger or consolidation with anyperson, or the acquisition of or investment in any person, without the prior written consent of Party A;3.2.4将发生的或可能发生的任何关于其所拥有的股权的诉讼、仲裁或行政程序立即通知甲方；Party B shall immediately notify Party A of the occurrence or possible occurrence of any litigation, arbitration or administrativeproceedings relating to the equity interests in Party C held by Party B;13秘密文件Strictly Confidential3.2.5促使丙方股东会或执行董事表决赞成本协议规定的被购买的股权的转让并应甲方之要求采取其他任何行动；Party B shall cause the shareholders’ meeting or the executive director of Party C to vote their approval of the transfer of the OptionedInterests as set forth in this Agreement and to take any and all other actions that may be requested by Party A;3.2.6为保持其对股权的所有权，签署所有必要或适当的文件，采取所有必要或适当的行动和提出所有必要或适当的控告或对所有索偿进行必要和适当的抗辩；To the extent necessary to maintain Party B’s ownership in Party C, Party B shall execute all necessary or appropriate documents, take allnecessary or appropriate actions and file all necessary or appropriate complaints or raise necessary and appropriate defenses against allclaims;3.2.7应甲方的要求，委任由其指定的任何人士出任丙方的董事和/或执行董事；Party B shall appoint any designee of Party A as the director and/or executive director of Party C, at the request of Party A;3.2.8经甲方随时要求，应向其指定的代表在任何时间无条件地根据本协议的股权购买权立即转让其股权，并放弃其对其他现有股东进行上述股权转让所享有的优先购买权（如有的话）；和At the request of Party A at any time, Party B shall promptly and unconditionally transfer its equity interests in Party C to Party A’sDesignee(s) in accordance with the Equity Interest Purchase Option under this Agreement, and Party B hereby waives its right of firstrefusal (if any) to the share transfer by the other existing shareholder of Party C (if any); and14秘密文件Strictly Confidential3.2.9严格遵守本协议及各方共同或分别签订的其他协议的各项规定，切实履行该等协议项下的各项义务，并不进行任何足以影响该等协议的有效性和可执行性的作为/不作为。如果乙方对于本协议项下或乙方股权质押协议下或对甲方的授权委托书中的股权，还留存有任何权利，除非甲方书面指示，否则乙方仍不得行使该权利。Party B shall strictly abide by the provisions of this Agreement and other contracts jointly or separately executed by and among Party B,Party C and Party A, perform the obligations hereunder and thereunder, and refrain from any action/omission that may affect theeffectiveness and enforceability thereof. To the extent that Party B has any remaining rights with respect to the equity interests subject tothis Agreement hereunder or under Party B’s Equity Interest Pledge Agreement or under the Power of Attorney granted in favor of PartyA, Party B shall not exercise such rights except in accordance with the written instructions of Party A.4.陈述和保证Representations and Warranties乙方和丙方特此在本协议签署之日和每一个转让日向甲方共同及分别陈述和保证如下：Party B and Party C hereby represent and warrant to Party A, jointly and severally, as of the date of this Agreement and each date of transfer of theOptioned Interests, that:4.1其具有签订和交付本协议和其为一方的、根据本协议为每一次转让被购买的股权而签订的任何股权转让协议(各称为"转让协议")，并履行其在本协议和任何转让协议项下的义务的权力和能力。乙方和丙方同意在甲方行使购买权时，他们将签署与本协议条款一致的转让协议。本协议和其是一方的各转让协议一旦签署后，构成或将对其构成合法、有效及具有约束力的义务并可按照其条款对其强制执行；They have the authority to execute and deliver this Agreement and any share transfer contracts to which they are a party concerning theOptioned Interests to be transferred thereunder (each, a “Transfer Contracts”), and to perform their obligations under this Agreement and anyTransfer Contracts. Party B and Party C agree to enter into Transfer Contracts consistent with the terms of this Agreement upon Party A’s exerciseof the Equity Interest Purchase Option. This Agreement and the Transfer Contracts to which they are a party constitute or will constitute theirlegal, valid and binding obligations and shall be enforceable against them in accordance with the provisions thereof;15秘密文件Strictly Confidential4.2无论是本协议或任何转让协议的签署和交付还是其在本协议或任何转让协议项下的义务的履行均不会：(i)导致违反任何有关的中国法律；(ii)与丙方章程或其他组织文件相抵触；(iii)导致违反其是一方或对其有约束力的任何协议或文件，或构成其是一方或对其有约束力的任何协议或文件项下的违约；(iv)导致违反有关向任何一方颁发的任何许可或批准的授予和(或)继续有效的任何条件；或(v)导致向任何一方颁发的任何许可或批准中止或被撤销或附加条件；The execution and delivery of this Agreement or any Transfer Contracts and the obligations under this Agreement or any Transfer Contracts shallnot: (i) cause any violation of any applicable laws of China; (ii) be inconsistent with the articles of association, bylaws or other organizationaldocuments of Party C; (iii) cause the violation of any contracts or instruments to which they are a party or which are binding on them, orconstitute any breach under any contracts or instruments to which they are a party or which are binding on them; (iv) cause any violation of anycondition for the grant and/or continued effectiveness of any licenses or permits issued to either of them; or (v) cause the suspension orrevocation of or imposition of additional conditions to any licenses or permits issued to either of them;4.3乙方对其在丙方拥有的股权拥有良好和可出售的所有权，除乙方签署的《股权质押协议》外，乙方在上述股权上没有设置任何担保权益；Party B have a good and merchantable title to the equity interests in Party C they hold. Except for Party B’s Equity Interest Pledge Agreement,Party B have not placed any security interest on such equity interests;16秘密文件Strictly Confidential4.4目前没有悬而未决的或构成威胁的与丙方的股权、丙方资产有关的或与丙方有关的诉讼、仲裁或行政程序。There are no pending or threatened litigation, arbitration or administrative proceedings relating to the equity interests in Party C, assets of Party Cor Party C.5.生效日Effective Date5.1本协议于各方签署本协议之日生效，有效期10年，经甲方选择可再延长10年。This Agreement shall become effective upon the date hereof, and remain effective for a term of 10 years, and may be renewed for an additional 10years at Party A’s election.5.2若丙方股东发生变化，由新股东签署此协议，在此协议签署之日，原协议自动视为无效。In the event of a change in the shareholders of Party C, the new shareholder should sign this agreement and the original agreement willautomatically be deemed invalid on the date of signing of this agreement.17秘密文件Strictly Confidential6.适用法律与争议解决Governing Law and Resolution of Disputes6.1适用法律Governing law本协议的订立、效力、解释、履行、修改和终止以及争议解决均适用中国正式公布并可公开得到的法律。对中国正式公布并可公开得到的法律没有规定的事项，将适用国际法律原则和惯例。The execution, effectiveness, construction, performance, amendment and termination of this Agreement and the resolution of disputes hereundershall be governed by the formally published and publicly available laws of China. Matters not covered by formally published and publiclyavailable laws of China shall be governed by international legal principles and practices.6.2争议的解决方法Methods of Resolution of Disputes因解释和履行本协议而发生的任何争议，本协议各方应首先通过友好协商的方式加以解决。如果在一方向其他方发出要求协商解决的书面通知后30天之内争议仍然得不到解决，则任何一方均可将有关争议提交给中国国际经济贸易仲裁委员会，由该会按照其届时有效的仲裁规则仲裁解决。仲裁应在北京进行，使用之语言为中文。仲裁裁决是终局性的，对各方均有约束力。In the event of any dispute with respect to the construction and performance of this Agreement, the Parties shall first resolve the dispute throughfriendly negotiations. In the event the Parties fail to reach an agreement on the dispute within 30 days after either Party’s request to the otherParties for resolution of the dispute through negotiations, either Party may submit the relevant dispute to the China International Economic andTrade Arbitration Commission for arbitration, in accordance with its then effective arbitration rules. The arbitration shall be conducted in Beijing,and the language used in arbitration shall be Chinese. The arbitration award shall be final and binding on all Parties.18秘密文件Strictly Confidential7.税款、费用Taxes and Fees每一方应承担根据中国法律因准备和签署本协议和各转让协议以及完成本协议和各转让协议拟定的交易而由该方发生的或对其征收的任何和全部的转让和注册的税、花费和费用。Each Party shall pay any and all transfer and registration tax, expenses and fees incurred thereby or levied thereon in accordance with the laws of China inconnection with the preparation and execution of this Agreement and the Transfer Contracts, as well as the consummation of the transactionscontemplated under this Agreement and the Transfer Contracts.8.通知Notices8.1本协议项下要求或发出的所有通知和其他通信应通过专人递送、挂号邮寄、邮资预付或商业快递服务或传真的方式发到该方下列地址。每一通知还应再以电子邮件送达。该等通知视为有效送达的日期按如下方式确定：All notices and other communications required or permitted to be given pursuant to this Agreement shall be delivered personally or sent byregistered mail, postage prepaid, by a commercial courier service or by facsimile transmission to the address of such Party set forth below. Aconfirmation copy of each notice shall also be sent by email. The dates on which notices shall be deemed to have been effectively given shall bedetermined as follows:8.1.1通知如果是以专人递送、快递服务或挂号邮寄、邮资预付发出的，则以于设定为通知的地址在接收或拒收之日为有效送达日。Notices given by personal delivery, by courier service or by registered mail, postage prepaid, shall be deemed effectively given on thedate of receipt or refusal at the address specified for notices.19秘密文件Strictly Confidential8.1.2通知如果是以传真发出的，则以成功传送之日为有效送达日（应以自动生成的传送确认信息为证）。Notices given by facsimile transmission shall be deemed effectively given on the date of successful transmission (as evidenced by anautomatically generated confirmation of transmission).8.2为通知的目的，各方地址如下：For the purpose of notices, the addresses of the Parties are as follows:甲方：中传天下信息科技（深圳）有限公司Party A:Zhongchuan Tianxia Information Technology (Shenzhen) Co., Ltd.地址：深圳市南山区高新中三道2号深圳软件园一期五栋401AAddress:401A, Building 5, Phase 1, Shenzhen Software Park, No.2 Gaoxin Zhongsan Road, Nanshan District, Shenzhen.收件人：洪婷Attn:Hong Ting乙方：Party B: 宋雪松Song Xuesong住所：天津市河西区广东路中裕园33702Address:Zhongyu Yuan 33702, Guangdong Road, Hexi District, Tianjin20秘密文件Strictly Confidential陈蔚力Chen Weili住所：广东省深圳市宝安区宝城上川路15号Address:Baocheng Shangchuan Road 15, Baoan District, Shenzhen, Guangdong王平Wang Ping住所：广东省深圳市南山区高新南环路36号彩虹之岸12栋4AAddress:Caihong Zhi’an Building No.12 Suite 4A, Gaoxin Nanhuan Road 36, Nanshan District, Shenzhen, Guangdong刘东来Liu Donglai住所：天津市和平区南京路诚基经贸中心1号楼2门1702号Address:No 1702, Door 2, Build 1, Chengji Economic and Trade Centre, Nanjing Road, Heping District, Tianjin.丙方：北京中传视讯科技有限公司Party C:Beijing Mobile Vision Technology Co., Ltd.地址：北京市朝阳区光华路9号SOHO3QLAB32Address: LAB32, SOHO3Q, No 9, Guanghua Road, Chaoyang District, Beijing .收件人：宋雪松Attn: Song Xuesong8.3任何一方可按本条规定随时给其他方发出通知来改变其接收通知的地址。Any Party may at any time change its address for notices by a notice delivered to the other Parties in accordance with the terms hereof.21秘密文件Strictly Confidential9.保密责任Confidentiality各方承认及确定彼此就有关本协议而交换的任何口头或书面资料均属机密资料。各方应当对所有该等资料予以保密，而在未得其他方书面同意前，不得向任何第三者披露任何有关资料，惟下列情况除外：(a)公众人士知悉或将会知悉该等资料(并非由接受资料之一方擅自向公众披露)；(b)适用法律法规或股票交易的规则或规例所需披露之资料；或(c)由任何一方就本协议所述交易而需向其法律或财务顾问披露之资料而该法律或财务顾问亦需遵守与本条款相类似之保密责任。如任何一方工作人员或聘请机构的泄密均视为该方的泄密，需依本协议承担违约责任。无论本协议以任何理由终止，本条款仍然生效。The Parties acknowledge that any oral or written information exchanged among them with respect to this Agreement is confidential information. Each Partyshall maintain the confidentiality of all such information, and without obtaining the written consent of other Parties, it shall not disclose any relevantinformation to any third parties, except in the following circumstances: (a) such information is or will be in the public domain (provided that this is not theresult of a public disclosure by the receiving party); (b) information disclosed as required by applicable laws or rules or regulations of any stock exchange;or (c) information required to be disclosed by any Party to its legal counsel or financial advisor regarding the transaction contemplated hereunder, and suchlegal counsel or financial advisor are also bound by confidentiality duties similar to the duties in this section. Disclosure of any confidential information bythe staff members or agency hired by any Party shall be deemed disclosure of such confidential information by such Party, which Party shall be held liablefor breach of this Agreement. This Section shall survive the termination of this Agreement for any reason.22秘密文件Strictly Confidential10.进一步保证Further Warranties各方同意迅速签署为执行本协议的各项规定和目的而合理需要的或对其有利的文件，以及为执行本协议的各项规定和目的而采取合理需要的或对其有利的进一步行动。The Parties agree to promptly execute documents that are reasonably required for or are conducive to the implementation of the provisions and purposes ofthis Agreement and take further actions that are reasonably required for or are conducive to the implementation of the provisions and purposes of thisAgreement.11.其他Miscellaneous11.1修订、修改与补充Amendment, change and supplement对本协议作出修订、修改与补充，必须经每一方签署书面协议。Any amendment, change and supplement to this Agreement shall require the execution of a written agreement by all of the Parties.11.2完整协议Entire agreement除了在本协议签署后所作出的书面修订、补充或修改以外，本协议构成本协议各方就本协议标的物所达成的完整协议，取代在此之前就本协议标的物所达成的所有口头或书面的协商、陈述和协议。 Except for the amendments, supplements or changes in writing executed after theexecution of this Agreement, this Agreement shall constitute the entire agreement reached by and among the Parties hereto with respect to thesubject matter hereof, and shall supercede all prior oral and written consultations, representations and contracts reached with respect to thesubject matter of this Agreement.23秘密文件Strictly Confidential11.3标题Headings本协议的标题仅为方便阅读而设，不应被用来解释、说明或在其他方面影响本协议各项规定的含义。The headings of this Agreement are for convenience only, and shall not be used to interpret, explain or otherwise affect the meanings of theprovisions of this Agreement.11.4语言Language本协议以中文和英文书就，一式八份，乙方共计六名股东以及甲方、丙方各持一份，具有同等效力；中英文版本如有冲突，应以中文版为准。This Agreement is written in both Chinese and English language in eight copies, the 6 shareholders of Party B, Party A and Party C having onecopy with equal legal validity respectively; in case there is any conflict between the Chinese version and the English version, the Chinese versionshall prevail.11.5可分割性Severability如果本协议有任何一条或多条规定根据任何法律或法规在任何方面被裁定为无效、不合法或不可执行，本协议其余规定的有效性、合法性或可执行性不应因此在任何方面受到影响或损害。各方应通过诚意磋商，争取以法律许可以及各方期望的最大限度内有效的规定取代那些无效、不合法或不可执行的规定，而该等有效的规定所产生的经济效果应尽可能与那些无效、不合法或不能强制执行的规定所产生的经济效果相似。In the event that one or several of the provisions of this Agreement are found to be invalid, illegal or unenforceable in any aspect in accordancewith any laws or regulations, the validity, legality or enforceability of the remaining provisions of this Agreement shall not be affected orcompromised in any respect. The Parties shall strive in good faith to replace such invalid, illegal or unenforceable provisions with effectiveprovisions that accomplish to the greatest extent permitted by law and the intentions of the Parties, and the economic effect of such effectiveprovisions shall be as close as possible to the economic effect of those invalid, illegal or unenforceable provisions.24秘密文件Strictly Confidential11.6继任者Successors本协议对各方各自的继任者和各方所允许的受让方应具有约束力并对其有利。This Agreement shall be binding on and shall inure to the interest of the respective successors of the Parties and the permitted assigns of suchParties.11.7继续有效Survival11.7.1协议期满或提前终止前因本协议而发生的或到期的任何义务在本协议期满或提前终止后继续有效。Any obligations that occur or that are due as a result of this Agreement upon the expiration or early termination of this Agreement shallsurvive the expiration or early termination thereof.11.7.2本协议第5、6、9条和本第11.7条的规定在本协议终止后继续有效。The provisions of Articles 5, 6, 9 and this Section 11.7 shall survive the termination of this Agreement.25秘密文件Strictly Confidential11.8弃权Waivers任何一方可以对本协议的条款和条件作出弃权，但必须经书面作出并经各方签字。一方在某种情况下就其他方的违约所作的弃权不应被视为该方在其他情况下就类似的违约已经对其他方作出弃权。Any Party may waive the terms and conditions of this Agreement, provided that such a waiver must be provided in writing and shall require thesignatures of the Parties. No waiver by any Party in certain circumstances with respect to a breach by other Parties shall operate as a waiver bysuch a Party with respect to any similar breach in other circumstances.本页其余部分刻意留为空白The Remainder of this page is intentionally left blank26秘密文件Strictly Confidential有鉴于此，各方已自行或使得其各自授权代表于文首所载日期签署本独家购买权协议。IN WITNESS WHEREOF, the Parties have executed, or caused their respective duly authorized representatives to execute, this Exclusive Option Agreement as ofthe date first above written.甲方：中传天下信息科技（深圳）有限公司（盖章）Party A: Zhongchuan Tianxia Information Technology (Shenzhen) Co., Ltd. (Seal)签字：By:/s/ Hong Ting姓名：洪婷Name: Hong Ting职务：总经理Title: General Manager秘密文件 Strictly Confidential有鉴于此，各方已自行或使得其各自授权代表于文首所载日期签署本独家购买权协议。IN WITNESS WHEREOF, the Parties have executed, or caused their respective duly authorized representatives to execute, this Exclusive Option Agreement as ofthe date first above written.乙方：Party B:宋雪松Song Xuesong签字：By:/s/ Song Xuesong秘密文件 Strictly Confidential有鉴于此，各方已自行或使得其各自授权代表于文首所载日期签署本独家购买权协议。IN WITNESS WHEREOF, the Parties have executed, or caused their respective duly authorized representatives to execute, this Exclusive Option Agreement as ofthe date first above written.乙方：Party B:陈蔚力Chen Weili签字：By:/s/ Chen Weili秘密文件 Strictly Confidential有鉴于此，各方已自行或使得其各自授权代表于文首所载日期签署本独家购买权协议。IN WITNESS WHEREOF, the Parties have executed, or caused their respective duly authorized representatives to execute, this Exclusive Option Agreement as ofthe date first above written.乙方：Party B:王平Wang Ping签字：By:/s/ Wang Ping秘密文件 Strictly Confidential有鉴于此，各方已自行或使得其各自授权代表于文首所载日期签署本独家购买权协议。IN WITNESS WHEREOF, the Parties have executed, or caused their respective duly authorized representatives to execute, this Exclusive Option Agreement as ofthe date first above written.乙方：Party B:刘东来Liu Donglai签字：By:/s/ Liu Donglai秘密文件 Strictly Confidential有鉴于此，各方已自行或使得其各自授权代表于文首所载日期签署本独家购买权协议。IN WITNESS WHEREOF, the Parties have executed, or caused their respective duly authorized representatives to execute, this Exclusive Option Agreement as ofthe date first above written.丙方：北京中传视讯科技有限公司（盖章）Party B: Beijing Mobile Vision Technology Co., Ltd. (Seal)签字：By:/s/ Song Xuesong姓名：宋雪松Name:Song Xuesong职务：董事长Title:Chairman of the Board秘密文件 Strictly ConfidentialEX4.17 5 f20f2017ex417_luokung.htm EQUITY INTEREST PLEDGE AGREEMENT BY AND AMONG ZHONGCHUAN TIANXIA INFORMATION TECHNOLOGY(SHENZHEN) CO., LTD., XUESONG SONG, WEILI CHEN, PING WANG, DONGLAI LIU, AND BEIJING MOBILE VISION TECHNOLOGY CO., LTD., DATEDAUGUST 31, 2015Exhibit 4.17股权质押协议Equity Interest Pledge Agreement本股权质押协议（下称"本协议”）由下列各方于年月日在中华人民共和国（下称“中国”）北京签订：This Equity Interest Pledge Agreement (this "Agreement") has been executed by and among the following parties on in Beijing, the People’sRepublic of China (the “China” or “PRC”):甲方：中传天下信息科技（深圳）有限公司（下称“质权人”）Party A: Zhongchuan Tianxia Information Technology (Beijing) Co., Ltd. (“Pledgee”)地址：深圳市南山区高新中三道2号深圳软件园一期五栋401AAddress: 401A, Building 5, Phase 1, Shenzhen Software Park, No.2 Gaoxin Zhongsan Road, Nanshan District, Shenzhen统一社会信用代码： 91440300565701058RUniform Social Credit Code: 91440300565701058R乙方(下称“出质人”)：Party B ( “Pledgors”):a)宋雪松Song Xuesong身份证号码:ID Card No.:b)陈蔚力Chen Weili身份证号码:ID Card No.:1秘密文件 Strictly Confidentialc)王平Wang Ping身份证号码:ID Card No.:d)刘东来Liu Donglai身份证号码:ID Card No.:丙方：北京中传视讯科技有限公司Party C: Beijing Mobile Vision Technology Co., Ltd.地址：北京市朝阳区光华路9号SOHO3QLAB32Address: LAB32, SOHO3Q, No 9, Guanghua Road, Chaoyang District, Beijing统一社会信用代码：9111010576215249XMUniform Social Credit Code: 9111010576215249XM在本协议中，质权人、出质人和丙方以下各称“一方”，合称“各方”。In this Agreement, each of Pledgee, Pledgors and Party C shall be referred to as a "Party" respectively, and they shall be collectively referred to as the"Parties".鉴于：Whereas:1．出质人全部为中国境内居民自然人，共同持有丙方100%的股权。丙方是一家在中国注册成立的、主要从事手机视频技术研发、内容制作和产业化市场推广的有限责任公司。丙方有意在此确认出质人和质权人在本协议下的权利和义务并提供必要的协助登记该质权；All of the Pledgors are natural persons resided in PRC, and collectively hold 100% of the equity interest in Party C. Party C is a limited company registered inChina, mainly engaging in mobile video frequency technology research, development, content creation, sale and related industrialization promotion. Party Cacknowledges the respective rights and obligations of Pledgors and Pledgee under this Agreement, and intends to provide any necessary assistance inregistering the Pledge;2．质权人是一家在中国注册的外商独资企业。质权人与丙方于年月日签订了独家业务合作协议；Pledgee is a whollyforeignowned enterprise registered in China. Pledgee and Party C have executed an Exclusive Business Cooperation Agreement as of [*],[*];3．为了保证丙方全面履行独家业务合作协议项下的义务，出质人以其拥有的全部丙方股权向质权人做出质押担保。To ensure that Party C fully performs its obligations under the Exclusive Business Cooperation Agreement, Pledgors hereby pledge to the Pledgee all of theequity interests they hold in Party C.为了履行业务合作协议的条款，各方商定按照以下条款签订本协议。To perform the provisions of the Business Cooperation Agreement, the Parties have mutually agreed to execute this Agreement upon the following terms.2秘密文件 Strictly Confidential1.定义Definitions除非本协议另有规定，下列词语含义为：Unless otherwise provided herein, the terms below shall have the following meanings:1.1质权：指出质人根据本协议第2条给予质权人的担保物权，即指质权人所享有的，以出质人质押给质权人的股权折价或拍卖、变卖该股权的价款优先受偿的权利。Pledge: shall refer to the security interest granted by Pledgors to Pledgee pursuant to Article 2 of this Agreement, i.e., the right of Pledgee to becompensated on a preferential basis with the conversion, auction or sales price of the Equity Interest.1.2股权：指出质人现在和将来（通过增资和/或转股）合法持有的其在丙方的全部股权权益。Equity Interest: shall refer to all of the equity interest in Party C lawfully, held now and to be held (through capital increase and/or equity transfer)hereafter by Pledgors.1.3质押期限：指本协议第3条规定的期间。Term of Pledge: shall refer to the term set forth in Article 3 of this Agreement.1.4业务合作协议：指丙方与质权人于本协议日签订的独家业务合作协议。Business Cooperation Agreement: shall refer to the Exclusive Business Cooperation Agreement executed by and between Party C and Pledgee on thedate of this Agreement.1.5违约事件：指本协议第7条所列任何情况。Event of Default: shall refer to any of the circumstances set forth in Article 7 of this Agreement.1.6违约通知：指质权人根据本协议发出的宣布违约事件的通知。Notice of Default: shall refer to the notice issued by Pledgee in accordance with this Agreement declaring an Event of Default.3秘密文件 Strictly Confidential2.质权The Pledge作为丙方按时和全额支付业务合作协议项下质权人应得的任何或全部的款项，包括但不限于业务合作协议中规定的咨询和服务费的担保（无论该等费用的到期应付是由于到期日的到来、提前收款的要求或其它原因），以及丙方充分履行其在业务合作协议项下其他所有义务（丙方按时和全额支付业务合作协议项下甲方应得的任何或全部的款项及丙方在业务合作协议项下其他所有义务，以下统称为“被担保债务”）的担保，出质人特此将其现有或将拥有的丙方的全部股权权益质押给质权人。As collateral security for the timely and complete payment and performance when due (whether at stated maturity, by acceleration or otherwise) of any or all ofthe payments due (the “all payments in pledge”) by Party C, including without limitation the consulting and services fees payable to the Pledgee under theBusiness Cooperation Agreement, Pledgors hereby pledge to Pledgee a first security interest in all of Pledgors’ right, title and interest, whether now owned orhereafter acquired by Pledgors, in the Equity Interest of Party C.3.质押期限Term of Pledge3.1本质权自本协议项下的股权出质在相应的工商行政管理机关登记之日起生效，质权有效期持续到业务合作协议下所有丙方欠付质权人的款项结清为止。出质人和丙方应（一）自本协议签署之日起3个工作日内，将本协议的质权登记在丙方股东名册上，并（二）自本协议签署之日起10个工作日内向相应的工商行政管理机关申请登记本协议项下的质权。各方共同确认，为办理股权质押工商登记手续，各方及丙方其他股东应按照丙方所在地工商行政管理部门要求的形式签署、真实反映本协议项下质权信息的《股权质押合同》（以下简称“工商登记质押合同”）提交给工商管理机关，工商登记质押合同中未约定事项，仍以本协议约定为准。出质人和丙方应当按照中国法律法规和有关工商行政管理机关的各项要求，提交所有必要的文件并办理所有必要手续，保证质权在递交申请后尽快获得登记。如果出质人持有的丙方注册资本数额增加（不管是通过直接认缴丙方的增资还是从其他股东处受让股权），各方一致同意将采取一切必要的行动和签署一切必要的文件以按照登记机关的要求完成质权的变更登记，以确保本协议项下的质权的持续有效。The Pledge shall become effective on such date when the pledge of the Equity Interest contemplated herein has been registered’ with relevantadministration for industry and commerce (the “AIC”). The Pledge shall be continuously valid until all payments due under the Business CooperationAgreement have been fulfilled by Party C. Pledgors and Party C shall (1) register the Pledge in the shareholders' register of Party C within 3 businessdays following the execution of this Agreement, and (2) submit an application to the AIC for the registration of the Pledge of the Equity Interestcontemplated herein within 10 business days following the execution of this Agreement. The parties covenant that for the purpose of registration of thePledge, the parties hereto and all other shareholders of Party C shall submit to the AIC the Equity Interest Pledge Contract in the form required by theAIC at the location of Party C which shall truly reflect the information of the Pledge hereunder (the “AIC Pledge Contract”). For matters not specified inthe AIC Pledge Contract, the parties shall be bound by the provisions of this Agreement. Pledgors and Party C shall submit all necessary documentsand complete all necessary procedures, as required by the PRC laws and regulations and the relevant AIC, to ensure that the Pledge of the EquityInterest shall be registered with the AIC as soon as possible after filing. In the event that the amount of registered capital held by Pledgors is increased(either by subscribing increased registered capital from Party C or acquiring equity interest from other shareholders), the Parties hereto agree that theyshall take any necessary action and execute any necessary document to complete the registration of change of Pledge according to the requirement ofAIC so that the Pledge in this Agreement remains effective.4秘密文件 Strictly Confidential3.2质押期限内，如丙方未按业务合作协议交付咨询服务费等费用，质权人有权但无义务按本协议的规定处分质权。During the Term of Pledge, in the event Party C fails to pay the exclusive consulting or service fees in accordance with the Business CooperationAgreement, Pledgee shall have the right, but not the obligation, to dispose of the Pledge in accordance with the provisions of this Agreement.4.质权凭证的保管Custody of Records for Equity Interest subject to Pledge4.1在本协议规定的质押期限内，出质人应将其在丙方的股权出资证明书及记载质权的股东名册交付质权人保管。出质人应在本协议签订之日起一周内将上述股权出资证明书及股东名册交付给质权人。质权人将在本协议规定的全部质押期间一直保管这些项目。During the Term of Pledge set forth in this Agreement, Pledgors shall deliver to Pledgee's custody the capital contribution certificate for the EquityInterest and the shareholders' register containing the Pledge within one week from the execution of this Agreement. Pledgee shall have custody of suchitems during the entire Term of Pledge set forth in this Agreement.4.2在质押期限内，股权所产生的红利应当无条件归质权人所有。Dividends generated by the Equity Interest shall be unconditionally owned by the Pledgee during the Term of Pledge.5秘密文件 Strictly Confidential5.出质人的声明和保证Representations and Warranties of Pledgors5.1出质人是股权唯一的合法所有人。Pledgors are the sole legal and beneficial owners of the Equity Interest.5.2质权人有权以本协议规定的方式处分并转让股权。Pledgee shall have the right to dispose of and transfer the Equity Interest in accordance with the provisions set forth in this Agreement.5.3除本质权之外，出质人未在股权上设置任何其他质押权利或其他担保权益。Except for the Pledge, Pledgors have not placed any security interest or other encumbrance on the Equity Interest.6.出质人的承诺和确认Covenants and Further Agreements of Pledgors6.1在本协议存续期间，所有出质人向质权人承诺，出质人将：All of the Pledgors hereby covenant to the Pledgee, that during the term of this Agreement, Pledgors shall:6.1.1除履行由出质人与质权人、丙方于本协议签署日签订的《独家购买权合同》外，未经质权人事先书面同意，不得转让股权，不得在股权上设立或允许存在任何担保或其他债务负担；not transfer the Equity Interest, place or permit the existence of any security interest or other encumbrance on the Equity Interest, without theprior written consent of Pledgee, except for the performance of the Exclusive Option Agreement executed by Pledgors, the Pledgee and Party Con the execution date of this Agreement;6秘密文件 Strictly Confidential6.1.2遵守并执行所有有关权利质押的法律、法规的规定，在收到有关主管机关就质权发出或制定的通知、指令或建议时，于五日内向质权人出示上述通知、指令或建议，同时遵守上述通知、指令或建议，或按照质权人的合理要求或经质权人同意就上述事宜提出反对意见和陈述；comply with the provisions of all laws and regulations applicable to the pledge of rights, and within 5 days of receipt of any notice, order orrecommendation issued or prepared by relevant competent authorities regarding the Pledge, shall present the aforementioned notice, order orrecommendation to Pledgee, and shall comply with the aforementioned notice, order or recommendation or submit objections andrepresentations with respect to the aforementioned matters upon Pledgee's reasonable request or upon consent of Pledgee;6.1.3将任何可能导致对出质人股权或其任何部分的权利产生影响的事件或收到的通知，以及可能改变出质人在本协议中的任何保证、义务或对出质人履行其在本协议中义务可能产生影响的任何事件或收到的通知及时通知质权人。promptly notify Pledgee of any event or notice received by Pledgors that may have an impact on Pledgee's rights to the Equity Interest or anyportion thereof, as well as any event or notice received by Pledgors that may have an impact on any guarantees and other obligations ofPledgors arising out of this Agreement.6.2出质人同意，质权人按本协议条款取得的对质权享有的权利，不应受到出质人或出质人的继承人或出质人之委托人或任何其他人通过法律程序的中断或妨害。Pledgors agree that the rights acquired by Pledgee in accordance with this Agreement with respect to the Pledge shall not be interrupted or harmed byPledgors or any heirs or representatives of Pledgors or any other persons through any legal proceedings.7秘密文件 Strictly Confidential6.3出质人向质权人保证，为保护或完善本协议对偿付业务合作协议项下被担保债务的担保，出质人将诚实签署、并促使其他与质权有利害关系的当事人签署质权人所要求的所有的权利证书、契约和/或履行并促使其他有利害关系的当事人履行质权人所要求的行为，并为本协议赋予质权人之权利、授权的行使提供便利，与质权人或其指定的人(自然人/法人)签署所有的有关股权所有权的文件，并在合理期间内向质权人提供其认为需要的所有的有关质权的通知、命令及决定。To protect or perfect the security interest granted by this Agreement for payment of all payment in pledge under the Business Cooperation Agreement,Pledgors hereby undertake to execute in good faith and to cause other parties who have an interest in the Pledge to execute all certificates, agreements,deeds and/or covenants required by Pledgee. Pledgors also undertake to perform and to cause other parties who have an interest in the Pledge toperform actions required by Pledgee, to facilitate the exercise by Pledgee of its rights and authority granted thereto by this Agreement, and to enter intoall relevant documents regarding ownership of Equity Interest with Pledgee or designee(s) of Pledgee (natural persons/legal persons). Pledgorsundertake to provide Pledgee within a reasonable time with all notices, orders and decisions regarding the Pledge that are required by Pledgee.6.4出质人向质权人保证，出质人将遵守、履行本协议项下所有的保证、承诺、协议、陈述及条件。如出质人不履行或不完全履行其保证、承诺、协议、陈述及条件，出质人应赔偿质权人由此遭受的一切损失。Pledgors hereby undertake to comply with and perform all guarantees, promises, agreements, representations and conditions under this Agreement. Inthe event of failure the whole or partial performance of its guarantees, promises, agreements, representations and conditions, Pledgors shall indemnifyPledgee for all losses resulting therefrom.8秘密文件 Strictly Confidential7.违约事件Event of Default7.1下列事项均被视为违约事件：The following circumstances shall be deemed Event of Default:7.1.1丙方未能按期、完整履行任何业务合作协议项下责任，包括但不限于丙方未能按期足额支付业务合作协议项下的应付的被担保债务或有违反该协议其他义务的行为；Party C fails to fully and timely fulfill any liabilities under the Business Cooperation Agreement, including without limitation failure to pay infull any of the all payment in pledge payable under the Business Cooperation Agreement or breaches any other obligations of Party Cthereunder;7.1.2出质人或丙方实质违反本协议的任何条款；Pledgors or Party C have committed a material breach of any provisions of this Agreement;7.1.3除本协议第6.1.1条的约定外，出质人舍弃出质的股权或未获得质权人书面同意而擅自转让或意图转让出质的股权；和Except as expressly stipulated in Section 6.1.1, Pledgors transfers or purports to transfer or abandons the Equity Interest pledged or assignsthe Equity Interest pledged without the written consent of Pledgee; and7.1.4丙方的继承人或代管人只能履行部分或拒绝履行业务合作协议项下的支付责任。The successor or custodian of Party C is capable of only partially perform or refuses to perform the payment obligations under the BusinessCooperation Agreement.9秘密文件 Strictly Confidential7.2如知道或发现本第7.1条所述的任何事项或可能导致上述事项的事件已经发生，出质人应立即以书面形式通知质权人。Upon notice or discovery of the occurrence of any circumstances or event that may lead to the aforementioned circumstances described in Section 7.1,Pledgors shall immediately notify Pledgee in writing accordingly.7.3除非第7.1部分下的违约事件在质权人向出质人发出要求其修补此违约行为通知后的二十（20）天之内已经按质权人要求获得救济，质权人在其后的任何时间，可向出质人发出书面违约通知，要求依据第8部分履行其处理股权的权利。Unless an Event of Default set forth in this Section 7.1 has been successfully resolved to Pledgee's satisfaction within twenty (20) days after the Pledgeedelivers a notice to the Pledgors requesting ratification of such Event of Default, Pledgee may issue a Notice of Default to Pledgors in writing at any timethereafter, demanding the Pledgors to immediately dispose of the Pledge in accordance with the provisions of Article 8 of this Agreement.8.质权的行使Exercise of Pledge8.1在被担保债务被全部清偿或履行前，未经质权人书面同意，出质人不得转让本质权和其拥有的丙方股权。Prior to the full payment of all payments in pledge, without the Pledgee's written consent, Pledgors shall not assign the Pledge or the Equity Interest inParty C.8.2在质权人行使其质押权利时，质权人可以向出质人发出书面违约通知。Pledgee may issue a Notice of Default to Pledgors when exercising the Pledge.10秘密文件 Strictly Confidential8.3在质权人行使其质押权利时，根据中国有关法律的规定，质权人有权按照法定程序处置质押股权。仅在中国法律允许的范围内，对于处置的所得，质权人无需给付出质人；除非中国法律另有规定，出质人特此放弃其可能有的能向质权人要求任何质押股权处置所得的权利；同样，出质人对质权人在该质押股权处置后的亏损也不承担任何义务。When the Pledgor exercises the pledge right, Pledgee is entitled to dispose of the Equity Interest pledged in accordance with applicable PRC laws. Onlyto the extent permitted under applicable PRC laws, Pledgee has no obligation to account to Pledgors for proceeds of disposition of the Equity Interest.Unless otherwise required by PRC laws, Pledgors hereby waive any rights it may have to demand any such accounting from Pledgee; Likewise, in suchcircumstance Pledgors shall have no obligation to Pledgee for any deficiency remaining after such disposition of the Equity Interest pledged.8.4质权人依照本协议处分质权时，出质人和丙方应予以必要的协助，以使质权人实现其质权。When Pledgee disposes of the Pledge in accordance with this Agreement, Pledgors and Party C shall provide necessary assistance to enable Pledgee toenforce the Pledge in accordance with this Agreement.9.转让Assignment9.1除非经质权人事先同意，出质人无权赠予或转让其在本协议项下的权利义务。Without Pledgee's prior written consent, Pledgors shall not have the right to assign or delegate its rights and obligations under this Agreement.11秘密文件 Strictly Confidential9.2本协议对出质人及其继任人和经许可的受让人均有约束力，并且对质权人及每一继任人和受让人有效。This Agreement shall be binding on Pledgors and their successors and permitted assigns, and shall be valid with respect to Pledgee and each of itssuccessors and assigns.9.3经出质人同意，质权人可以在任何时候将其在业务合作协议项下的所有或任何权利和义务转让给其指定的关联方（自然人/法人），在这种情况下，受让人应享有和承担本协议项下质权人享有和承担的权利和义务，如同其作为原协议方应享有和承担的一样。质权人转让业务合作协议项下的权利和义务时，应质权人要求，出质人应就此转让签署有关协议和/或文件。Upon the Pledgors’ agreement, Pledgee may assign any or all of its rights and obligations under the Business Cooperation Agreement to its designee(s)(natural/legal persons) at any time, in which case the assigns shall have the rights and obligations of Pledgee under this Agreement, as if it were theoriginal party to this Agreement. When the Pledgee assigns the rights and obligations under the Business Cooperation Agreement, upon Pledgee'srequest, Pledgors shall execute relevant agreements or other documents relating to such assignment.9.4因转让所导致的质权人变更后，应质权人要求，出质人应与新的质权人签订一份内容与本协议一致的新质押协议，并在相应的工商行政管理机关进行登记。In the event of a change in Pledgee due to an assignment, Pledgors shall, at the request of Pledgee, execute a new pledge agreement with the newpledgee on the same terms and conditions as this Agreement, and register the same with the relevant AIC.12秘密文件 Strictly Confidential9.5出质人应严格遵守本协议和各方单独或共同签署的其他有关协议的规定，包括独家购买权合同和对质权人的授权委托书，履行各协议项下的义务，并不进行任何足以影响协议的有效性和可强制执行性的作为/不作为。除非根据质权人的书面指示，出质人不得行使其对质押股权还留存的权利。Pledgors shall strictly abide by the provisions of this Agreement and other contracts jointly or separately executed by the Parties hereto or any of them,including the Exclusive Option Agreement and the Power of Attorney granted to Pledgee, perform the obligations hereunder and thereunder, and refrainfrom any action/omission that may affect the effectiveness and enforceability thereof. Any remaining rights of Pledgors with respect to the EquityInterest pledged hereunder shall not be exercised by Pledgors except in accordance with the written instructions of Pledgee.10.终止Termination在被担保债务被全部清偿或履行完毕之后，本质权人应在尽早合理可行的时间内办理或配合办理解除质押的手续，出质人与丙方应提供相应的配合与协助。Upon the full payment of all payments in pledge under the Business Cooperation Agreement a, Pledgor shall then, with the assistance of Party B and Party C,go through the procedures of cancellation of pledge rights at a reasonable time as soon as practicable.11.手续费及其他费用Handling Fees and Other Expenses一切与本协议有关的费用及实际开支，其中包括但不限于法律费用、工本费、印花税以及任何其他税收、费用等全部由丙方承担。All fees and out of pocket expenses relating to this Agreement, including but not limited to legal costs, costs of production, stamp tax and any other taxes andfees, shall be borne by Party C.13秘密文件 Strictly Confidential12.保密责任Confidentiality各方承认及确定有关本协议、本协议内容，以及彼此就准备或履行本协议而交换的任何口头或书面资料均被视为保密信息。各方应当对所有该等保密信息予以保密，而在未得到另一方书面同意前，不得向任何第三者披露任何保密信息，惟下列信息除外：(a)公众人士知悉或将会知悉的任何信息（惟并非由接受保密信息之一方擅自向公众披露）；(b)根据适用法律法规、股票交易规则、或政府部门或法院的命令而所需披露之任何信息；或(c)由任何一方就本协议所述交易而需向其股东、投资者、法律或财务顾问披露之信息，而该股东、法律或财务顾问亦需遵守与本条款相类似之保密责任。如任何一方工作人员或聘请机构的泄密均视为该方的泄密，需依本协议承担违约责任。无论本协议以任何理由终止，本条款仍然生效。The Parties acknowledge that the existence and the terms of this Agreement and any oral or written information exchanged between the Parties in connectionwith the preparation and performance this Agreement are regarded as confidential information. Each Party shall maintain confidentiality of all such confidentialinformation, and without obtaining the written consent of the other Party, it shall not disclose any relevant confidential information to any third parties, exceptfor the information that: (a) is or will be in the public domain (other than through the receiving Party’s unauthorized disclosure); (b) is under the obligation tobe disclosed pursuant to the applicable laws or regulations, rules of any stock exchange, or orders of the court or other government authorities; or (c) isrequired to be disclosed by any Party to its shareholders, investors, legal counsels or financial advisors regarding the transaction contemplated hereunder,provided that such shareholders, investors, legal counsels or financial advisors shall be bound by the confidentiality obligations similar to those set forth inthis Section. Disclosure of any confidential information by the staff members or agencies hired by any Party shall be deemed disclosure of such confidentialinformation by such Party, which Party shall be held liable for breach of this Agreement. This Section shall survive the termination of this Agreement for anyreason.14秘密文件 Strictly Confidential13.适用法律和争议的解决Governing Law and Resolution of Disputes13.1本协议的订立、效力、解释、履行、修改和终止以及争议的解决均适用中国法律。The execution, effectiveness, construction, performance, amendment and termination of this Agreement and the resolution of disputes hereunder shallbe governed by the laws of China.13.2因解释和履行本协议而发生的任何争议，本协议各方应首先通过友好协商的方式加以解决。如果在一方向其他方发出要求协商解决的书面通知后30天之内争议仍然得不到解决，则任何一方均可将有关争议提交给中国国际经济贸易仲裁委员会，由该会按照其仲裁规则仲裁解决。仲裁应在北京进行，使用之语言为中文。仲裁裁决是终局性的，对各方均有约束力。In the event of any dispute with respect to the construction and performance of this Agreement, the Parties shall first resolve the dispute throughfriendly negotiations. In the event the Parties fail to reach an agreement on the dispute within 30 days after either Party's request to the other Parties forresolution of the dispute through negotiations, either Party may submit the relevant dispute to the China International Economic and Trade ArbitrationCommission for arbitration, in accordance with its Arbitration Rules. The arbitration shall be conducted in Beijing, and the language used in arbitrationshall be Chinese. The arbitration award shall be final and binding on all Parties.13.3因解释和履行本协议而发生任何争议或任何争议正在进行仲裁时，除争议的事项外，本协议各方仍应继续行使各自在本协议项下的其他权利并履行各自在本协议项下的其他义务。Upon the occurrence of any disputes arising from the construction and performance of this Agreement or during the pending arbitration of any dispute,except for the matters under dispute, the Parties to this Agreement shall continue to exercise their respective rights under this Agreement and performtheir respective obligations under this Agreement.15秘密文件 Strictly Confidential14.通知Notices14.1本协议项下要求或发出的所有通知和其他通信应通过专人递送、挂号邮寄、邮资预付或商业快递服务或传真的方式发到该方下列地址。每一通知还应再以电子邮件送达。该等通知视为有效送达的日期按如下方式确定：All notices and other communications required or permitted to be given pursuant to this Agreement shall be delivered personally or sent by registeredmail, postage prepaid, by a commercial courier service or by facsimile transmission to the address of such party set forth below. A confirmation copy ofeach notice shall also be sent by Email. The dates on which notices shall be deemed to have been effectively given shall be determined as follows:14.1.1通知如果是以专人递送、快递服务或挂号邮寄、邮资预付发出的，则以于设定为通知的地址在接收或拒收之日为有效送达日。Notices given by personal delivery, by courier service or by registered mail, postage prepaid, shall be deemed effectively given on the date ofreceipt or refusal at the address specified for notices.14.1.2通知如果是以传真发出的，则以成功传送之日为有效送达日（应以自动生成的传送确认信息为证）。Notices given by facsimile transmission shall be deemed effectively given on the date of successful transmission (as evidenced by anautomatically generated confirmation of transmission).16秘密文件 Strictly Confidential14.2为通知的目的，各方地址如下：For the purpose of notices, the addresses of the Parties are as follows:甲方：中传天下信息科技（深圳）有限公司Party A: Zhongchuan Tianxia Information Technology (Shenzhen) Co., Ltd.地址：深圳市南山区高新中三道2号深圳软件园一期五栋401AAddress: 401A, Building 5, Phase 1, Shenzhen Software Park, No.2 Gaoxin Zhongsan Road, Nanshan District, Shenzhen.收件人：洪婷Attn: Hong Ting乙方：Party B:a)宋雪松Song Xuesong地址：125.Expenses, including legal fees, incurred by a director in defending any legal, administrative or investigative proceedings may be paid by the Company inadvance of the final disposition of such proceedings upon receipt of an undertaking by or on behalf of the director to repay the amount if it shall ultimatelybe determined that the director is not entitled to be indemnified by the Company in accordance with these Articles.126.Expenses, including legal fees, incurred by a former director in defending any legal, administrative or investigative proceedings may be paid by theCompany in advance of the final disposition of such proceedings upon receipt of an undertaking by or on behalf of the former director to repay the amountif it shall ultimately be determined that the director is not entitled to be indemnified by the Company in accordance with these Articles.127.The indemnification and advancement of expenses provided by, or granted pursuant to, these Articles is not exclusive of any other rights to which theperson seeking indemnification of advancement of expenses may be entitled under any agreement, resolution of members, resolution of disinteresteddirectors or otherwise, both as to acting in the person’s official capacity and as to acting in another capacity while serving as a director of the Company.128.If a person to be indemnified has been successful in defence of any proceedings referred to above the person is entitled to be indemnified against allexpenses, including legal fees, and against all judgments, fines and amounts paid in settlement and reasonably incurred by the person in connection withthe proceedings.129.The Company may purchase and maintain insurance in relation to any person who is or was a director, an officer or a liquidator of the Company, or who atthe request of the Company is or was serving as a director, an officer or a liquidator of, or in any other capacity is or was acting for, another body corporateor a partnership, joint venture, trust or other enterprise, against any liability asserted against the person and incurred by the person in that capacity,whether or not the Company has or would have had the power to indemnify the person against the liability as provided in these Articles.SEAL130.The Company shall have a Seal and may have more than one Seal. References herein to the Seal shall be references to every Seal which shall have beenduly adopted by resolution of directors. The directors shall provide for the safe custody of the Seal and for an imprint thereof to be kept at the office of theregistered agent of the Company. Except as otherwise expressly provided herein, the Seal when affixed to any written instrument, shall be witnessed andattested to by the signature of a director or any other person so authorized from time to time by resolution of directors. Such authorization may be before orafter the Seal is affixed, may be general or specific and may refer to any number of sealings. The Directors may provide for a facsimile of the Seal and of thesignature of any director or authorized person which may be reproduced by printing or other means on any instrument and it shall have the same force andvalidity as if the Seal had been affixed to such instrument and the same had been signed as hereinbefore described.21DISTRIBUTIONS131.The directors of the Company may by resolution authorise a distribution by the Company at any time and of any amount and to any members they think fitif they are satisfied on reasonable grounds that immediately after the distribution;a.the value of the Company’s assets will exceed its liabilities, andb.the Company will be able to pay its debts as they fall due.132.A resolution of the directors passed under the preceding Article shall contain a statement that, in the opinion of the directors, immediately after thedistribution the value of the Company’s assets will exceed its liabilities, and the Company will be able to pay its debts as they fall due.133.If, after a distribution is authorised and before it is made, the directors cease to be satisfied on reasonable grounds that the Company will, immediately afterthe distribution satisfy the solvency test, any distribution made by the Company is deemed not to have been authorised.134.If, by virtue of the preceding Article, a distribution is deemed not to have been authorised, a director who;a.ceased, after authorisation but before the making of the distribution, to be satisfied on reasonable grounds for believing that the company wouldsatisfy the solvency test immediately after the distribution is made; andb.failed to take reasonable steps to prevent the distribution being made;is personally liable to the company to repay to the company so much of the distribution as is not able to be recovered from members.135.A distribution made to a member at a time when the company did not, immediately after the distribution, satisfy the solvency test may be recovered by thecompany from the member unless;a.the member received the distribution in good faith and without knowledge of the company’s failure to satisfy the solvency test;b.the member has altered his position in reliance on the validity of the distribution; andc.it would be unfair to require repayment in full or at all.DISTRIBUTIONS BY WAY OF DIVIDEND136.The Company may by a resolution of directors declare a distribution by way of dividend and pay such distribution in money, shares or other property. Inthe event that distributions by way of dividend are paid in specie the directors shall have responsibility for establishing and recording in the resolution ofdirectors authorizing the distribution by way of dividend, a fair and proper value for the assets to be so distributed.137.The directors may from time to time pay to the members such interim distributions by way of dividend as appear to the directors to be justified by theprofits of the Company.138.The directors may, before declaring any distribution by way of dividend, set aside out of the profits of the Company such sum as they think proper as areserve fund, and may invest the sum so set aside as a reserve fund upon such securities as they may select.139.Notice of any distribution by way of dividend that may have been declared shall be given to each member in the manner hereinafter mentioned and alldistributions by way of dividend unclaimed for 3 years after having been declared may be forfeited by resolution of directors for the benefit of theCompany.140.No distribution by way of dividend shall bear interest as against the Company and no distribution by way of dividend shall be paid on treasury shares orshares held by another company of which the Company holds, directly or indirectly, shares having more than 50 percent of the vote in electing directors.22141.A share issued as a distribution by way of dividend by the Company shall be treated for all purposes as having been issued for money equal to the valuedetermined by resolution of the directors. In the absence of fraud the decision of the directors as to the value of the share is conclusive unless a questionof law is involved.142.A division of the issued and outstanding shares of a class or series of shares into a larger number of shares of the same class or series having aproportionately smaller par value does not constitute a distribution by way of dividend of shares.ACCOUNTS AND AUDIT143.The Company may by resolution of members call for the directors to prepare periodically a profit and loss account and a balance sheet. The profit and lossaccount and balance sheet shall be drawn up so as to give respectively a true and fair view of the profit and loss of the Company for the financial periodand a true and fair view of the state of affairs of the Company as at the end of the financial period.144.The Company may by resolution of members call for the accounts to be examined by auditors.145.Subject to the rules of the Designated Stock Exchange, the first auditors shall be appointed by resolution of directors; subsequent auditors shall beappointed by the Audit Committee and shall hold office until the Audit Committee appoint another independent auditor.146.Subject to the rules of the Designated Stock Exchange, the remuneration of the auditors of the Company shall be fixed by the Audit Committee.147.The auditors shall examine each profit and loss account and balance sheet required to be served on every member of the Company or laid before a meetingof the members of the Company and shall state in a written report whether or nota.in their opinion the profit and loss account and balance sheet give a true and fair view respectively of the profit and loss for the period covered bythe accounts, and of the state of affairs of the Company at the end of that period; andb.all the information and explanations required by the auditors have been obtained.148.The report of the auditors shall be annexed to the accounts and shall be read at the meeting of members at which the accounts are laid before the Companyor shall be served on the members.149.Every auditor of the Company shall have a right of access at all times to the books of account and vouchers of the Company, and shall be entitled to requirefrom the directors and officers of the Company such information and explanations as he thinks necessary for the performance of the duties of the auditors.150.The auditors of the Company shall be entitled to receive notice of, and to attend any meetings of members of the Company at which the Company’s profitand loss account and balance sheet are to be presented.NOTICES151.Any notice, information or written statement to be given by the Company to members may be served in any way by which it can reasonably be expected toreach each member or by mail addressed to each member at the address shown in the share register.152.Any summons, notice, order, document, process, information or written statement to be served on the Company may be served by leaving it, or by sendingit by registered mail addressed to the Company, at its registered office, or by leaving it with, or by sending it by registered mail to, the registered agent ofthe Company.153.Service of any summons, notice, order, document, process, information or written statement to be served on the Company may be proved by showing thatthe summons, notice, order, document, process, information or written statement was delivered to the registered office or the registered agent of theCompany or that it was mailed in such time as to admit to its being delivered to the registered office or the registered agent of the Company in the normalcourse of delivery within the period prescribed for service and was correctly addressed and the postage was prepaid.23PENSION AND SUPERANNUATION FUNDS154.The directors may establish and maintain or procure the establishment and maintenance of any noncontributory or contributory pension orsuperannuation funds for the benefit of, and give or procure the giving of donations, gratuities, pensions, allowances or emoluments to, any persons whoare or were at any time in the employment or service of the Company or any company which is a subsidiary of the Company or is allied to or associated withthe Company or with any such subsidiary, or who are or were at any time directors or officers of the Company or of any such other company as aforesaid orwho hold or held any salaried employment or office in the Company or such other company, or any persons in whose welfare the Company or any suchother company as aforesaid is or has been at any time interested, and to the wives, widows, families and dependents of any such person, and may makepayments for or towards the insurance of any such persons as aforesaid, and may do any of the matters aforesaid either alone or in conjunction with anysuch other company as aforesaid. Subject always to the proposal being approved by resolution of members, a director holding any such employment oroffice shall be entitled to participate in and retain for his own benefit any such donation, gratuity, pension allowance or emolument.VOLUNTARY WINDING UP AND DISSOLUTION155.The Company may voluntarily commence to wind up and dissolve by a resolution of members but if the Company has never issued shares it mayvoluntarily commence to wind up and dissolve by resolution of directors.CONTINUATION156.The Company may by resolution of members or by a resolution passed unanimously by all directors of the Company continue as a company incorporatedunder the laws of a jurisdiction outside the British Virgin Islands in the manner provided under those laws.ARBITRATION157.Whenever any difference arises between the Company on the one hand and any of the members or their executors, administrators or assigns on the otherhand, touching the true intent and construction or the incidence or consequences of these Articles or of the Act, touching anything done or executed,omitted or suffered in pursuance of the Act or touching any breach or alleged breach or otherwise relating to the premises or to these Articles, or to anyAct or Ordinance affecting the Company or to any of the affairs of the Company such difference shall, unless the parties agree to refer the same to a singlearbitrator, be referred to 2 arbitrators one to be chosen by each of the parties to the difference and the arbitrators shall before entering on the referenceappoint an umpire.158.If either party to the reference makes default in appointing an arbitrator either originally or by way of substitution (in the event that an appointed arbitratorshall die, be incapable of acting or refuse to act) for 10 days after the other party has given him notice to appoint the same, such other party may appoint anarbitrator to act in the place of the arbitrator of the defaulting party.We, Portcullis TrustNet (BVI) Limited of Portcullis TrustNet Chambers, P.O. Box 3444, Road Town, Tortola, British Virgin Islands for the purpose of incorporating aBVI Business Company under the laws of the British Virgin Islands hereby sign these Articles of Association the 27th day of October, 2009.Incorporator/s/ Nicole WheatleyPortcullis TrustNet (BVI) LimitedPortcullis TrustNet ChambersP.O. Box 3444Road Town, TortolaBritish Virgin Islands(Sgd. Nicole Wheatley)24EX4.15 3 f20f2017ex415_luokung.htm EXCLUSIVE BUSINESS COOPERATION AGREEMENT BY AND BETWEEN ZHONGCHUAN TIANXIA INFORMATIONTECHNOLOGY (SHENZHEN) CO., LTD., AND BEIJING MOBILE VISION TECHNOLOGY CO., LTD., DATED AUGUST 31, 2015Exhibit 4.15独家业务合作协议Exclusive Business Cooperation Agreement本独家业务合作协议（下称“本协议”）由以下双方于年月日在中华人民共和国（下称“中国”）北京市签署。This Exclusive Business Cooperation Agreement (this “Agreement”) is made and entered into by and between the following parties on in Beijing, thePeople’s Republic of China (“China” or the “PRC”).甲方：中传天下信息科技（深圳）有限公司Party A: Zhongchuan Tianxia Information Technology (Shenzhen) Co., Ltd.地址：深圳市南山区高新中三道2号深圳软件园一期五栋401A Address: 401A, Building 5, Phase 1, Shenzhen Software Park, No.2 Gaoxin Zhongsan Road, Nanshan District, Shenzhen统一社会信用代码：91440300565701058R Uniform Social Credit Code: 91440300565701058R乙方：北京中传视讯科技有限公司Party B: Beijing Mobile Vision Technology Co., Ltd.地址：北京市朝阳区光华路9号SOHO3QLAB32Address: LAB32, SOHO3Q, No 9, Guanghua Road, Chaoyang District, Beijing统一社会信用代码：9111010576215249XMUniform Social Credit Code: 9111010576215249XM甲方和乙方以下各称为“一方”，统称为“双方”。Each of Party A and Party B shall be hereinafter referred to as a “Party” respectively, and as “Parties” collectively.1秘密文件Strictly Confidential鉴于：Whereas,1.甲方是一家在中国注册的外商独资企业，拥有丰富的技术研发和产业化推广相关的管理和投资经验，并提供相关的技术支持和咨询服务；Party A is a whollyforeignowned enterprise established in China, which has rich experience in technology research development and industrializationpromotion management and investment, and provides relevant technical support and consulting services;2.乙方是一家在中国成立的有限责任公司，经中国有关政府部门批准依法主要从事手机视频技术开发、内容制作及市场推广；Party B is a limited company in China, mainly engages in mobile video technology research, development, content creation, sale and related industrialpromotion as approved by the relevant governmental authorities in China;3.甲方同意利用其技术、人员和信息优势，在本协议期间向乙方提供有关手机视频技术开发、内容制作及市场推广以及未来扩大业务规模和业务范围时乙方所需的技术支持、技术咨询等相关服务，乙方同意接受甲方或其指定方按本协议条款的规定提供的各种服务。Party A is willing to provide Party B with technology supports and technology consulting services in connection with mobile video technology research,development, content creation, sale and related industrial promotion and such services in connection with Party B’s extension of business scale orbroadening of businesses during the term of this Agreement, utilizing its advantages in technology, human resources, and information, and Party B iswilling to accept such services provided by Party A or Party A's designee(s), each on the terms set forth herein.2秘密文件Strictly Confidential据此，甲方和乙方经协商一致，达成如下协议：Now, therefore, through mutual discussion, the Parties have reached the following agreements:1.服务提供Services Provided by Party A1.1按照本协议条款和条件，乙方在此委任甲方在本协议期间作为乙方的独家服务提供者向乙方提供全面的和手机视频技术开发、内容制作及市场推广相关以及未来扩大业务规模和业务范围时乙方所需的技术支持、业务支持和相关咨询服务，具体内容包括但不限于以下内容：Party B hereby appoints Party A as Party B's exclusive services provider to provide Party B with complete technical support, business supportand related consulting services in connection with mobile video technology research, development, content creation, sale and related industrialpromotion and such services in connection with Party B’s extension of business scale or broadening of businesses during the term of thisAgreement, in accordance with the terms and conditions of this Agreement, which may include but not limited to:1.1.1为乙方提供其手机视频技术开发、内容制作及市场推广业务所需的一切服务支持，为乙方提供相当于包括总经理、行政人员、管理人员、筹划部门、商业运营、人力资源、财务、会计以及与乙方业务相关的一切业务操作所需人员所能提供的服务内容；managing all aspects of Party B’s business of mobile video technology research, development, content creation, sale and relatedindustrial promotion. In this capacity, Party A will procure or engage for Party B the services of a general manager and other managementstaff, including but not limited to personnel responsible for all administration, operations, planning, business development, humanresources, finance, accounting and other operations related to the Business of Party B;3秘密文件Strictly Confidential1.1.2为乙方制定全部的商业计划、销售目标，并为优化执行该等商业计划设计和建立相应的系统及操作程序；developing all business plans and sales projections of Party B, and for developing and establishing systems and procedures for optimumexecution of the business plans;1.1.3为乙方申请手机视频技术及内容制作相关专利提供咨询服务和支持；consulting services and support in connection with Party B’s applying for mobile video technology related patents and content creation;1.1.4为乙方手机视频技术产业化的发展方向、规模、品牌提升提供咨询服务；consulting services in connection with the development directions, size and business brands promotion of Party B’s mobile videotechnology industrialization;4秘密文件Strictly Confidential1.1.5为乙方提供与业务相关的办公、生产和销售服务，为乙方租赁场所，建立业务相关的系统和程序，满足乙方的其他要求；procuring or obtaining for Party B all office, production and distribution services related to the Business. It shall procure or obtainappropriate leases, establish systems and procedures needed to operate the business, fulfill orders for services;1.1.6尽最大努力为乙方建立手机视频技术销售市场，根据甲方为乙方制定的商业计划及销售目标代表乙方获取客户订单，同时为乙方提供与业务相关的客户服务，建立向客户开具票据的程序和与会计相关的托收服务。using its best efforts to establish mobile video technology related marketing and other structures to obtain orders for services &products from customers on behalf of Party B in accordance with Party B’s business plans, sales projections and objectives (asdeveloped by Party A) and procure or obtain customer services required in connection with the Business. It shall also establishprocedures for invoicing customers, and establish collection services with respect to accounts;1.1.7就乙方的劳动用工方面提供咨询服务和支持，包括但不限于，组织实施对乙方业务人员、行政人员、管理人员等人员进行培训和考核，协助建立健全的人力资源管理制度和实现人力资源的良好配置；consulting services and support regarding labor system of Party B, including but without limitation to labor training and evaluation ofsales person, administrative staff and management person etc. and establishment of human resources management system to well;5秘密文件Strictly Confidential1.1.8提供乙方需要的客户数据统计、分析及相关数据库的建设和维护等咨询服务；providing Party B with compile and analysis of client data and consulting services of establishment and maintenance of data base;1.1.9提供乙方需要的软件和相关技术支持服务；providing software Party B requires and other technical support;1.1.10接受乙方委托，对乙方的手机视频技术研发和产业化推广业务经营进行指导和管理；guiding and management on Party B’s business of mobile video technology research and development and related industrial promotionoperation according to Party B’s commission;1.1.11当乙方业务规模发展或业务范围扩大需要时，购买乙方业务经营需要的设备；in the event of the demand of Party B’s development of business scale or broadening of businesses, purchase the equipments which itneeds for the operation of its business;1.1.12当乙方业务规模发展或业务范围扩大需要时，完成乙方项目中的全部或部分工作；in the event of the demand of Party B’s development of business scale or broadening of businesses, complete the work of Party B’sproject in whole or in party;6秘密文件Strictly Confidential1.1.13当乙方业务规模发展或业务范围扩大需要时，开发新技术；in the event of the demand of Party B’s development of business scale or broadening of businesses, develop new technology;1.1.14乙方委托甲方，且甲方接受委托提供的其他服务。other services Party B appoints Party A to provide and Party A agrees to provide.1.2乙方接受甲方的咨询和服务。乙方进一步同意，除非经甲方事先书面同意，在本协议期间，就本协议约定的服务或其他事宜，乙方不得直接或间接地从任何第三方获得任何与本协议相同或类似的咨询和/或服务，并不得与任何第三方就本协议所述事项建立任何类似的合作关系。双方同意，甲方可以指定其他方（该被指定方可以与乙方签署本协议第1.3条描述的某些协议）为乙方提供本协议约定的服务和/或支持。Party B agrees to accept all the consultations and services provided by Party A. Party B further agrees that unless with Party A's prior writtenconsent, during the term of this Agreement, Party B shall not directly or indirectly accept the same or any similar consultations and/or servicesprovided by any third party and shall not establish similar corporation relationship with any third party regarding the matters contemplated by thisAgreement. Party A may appoint other parties, who may enter into certain agreements described in Section 1.3 with Party B, to provide Party Bwith the consultations and/or services under this Agreement.7秘密文件Strictly Confidential1.3服务的提供方式Service Providing Methodology1.3.1双方同意在本协议有效期内，视情况而定，乙方可以与甲方或甲方指定的其他方进一步签订技术服务协议和/或咨询服务协议，对各项业务培训、技术服务、咨询服务的具体内容、方式、人员、收费等进行约定。Parties agree that during the term of this Agreement, where necessary, Party B may enter into further technical service agreements and/orconsulting service agreements with Party A or any other party designated by Party A, which shall provide the specific contents, manner,personnel, and fees for the specific technical services and consulting services.1.3.2为更好地履行本协议，双方同意，在甲方认为必要时，乙方应在本协议有效期内与甲方或甲方指定的其他方根据业务进展需要随时签署协议，由甲方或其指定方向乙方提供服务。To fulfill this Agreement, Parties agree that during the term of this Agreement, where Party A deems necessary, Party B shall enter intoagreements with Party A or any other party designated by Party A which shall set forth that Party A or any other party designated byParty A provide services to Party B based on the needs of the business of Party B.8秘密文件Strictly Confidential2.服务的价格和支付方式The Calculation and Payment of the Service Fees双方同意，就甲方提供的服务，乙方应向甲方支付服务费（“服务费”）。服务费不应低于乙方税后利润的80%。服务费应当按季支付；经甲方事先书面同意，服务费可以根据乙方的经营需要进行调整。Both Parties agree that, in consideration of the services provided by Party A, Party B shall pay Party A fees (the “Service Fees”), which shall not be lessthan 80% of Party B’s aftertax profits . The Service Fees shall be due and payable on a quarterly basis; upon the prior written consent by Party A, the rateof Service Fees may be adjusted pursuant to the operational needs of Party B.3.知识产权和保密条款Intellectual Property Rights and Confidentiality Clauses3.1在中国法律允许的范围内，甲方对履行本协议而产生或创造的任何权利、所有权、权益和所有知识产权包括但不限于著作权、专利权、专利申请权、软件、技术秘密、商业机密及其他均享有独占的和排他的权利和利益。乙方须签署所有适当的文件，采取所有适当的行动，递交所有的文件和/或申请，提供所有适当的协助，以及做出所有其他依据甲方的自行决定认为是必要的行为，以将任何对该等知识产权的所有权、权利和权益赋予甲方，和/或完善对甲方此等知识产权权利的保护。To the extent permitted under the PRC laws, Party A shall have exclusive and proprietary rights and interests in all rights, ownership, interests andintellectual properties arising out of or created during the performance of this Agreement, including but not limited to copyrights, patents, patentapplications, software, technical secrets, trade secrets and others. Party B shall execute all appropriate documents, take all appropriate actions,submit all filings and/or applications, render all appropriate assistance and otherwise conduct whatever is necessary deemed as by Party A in itssole discretion for the purposes of vesting any ownership, right or interest of any such intellectual property rights in Party A, and/or perfectingthe protections for any such intellectual property rights in Party A.9秘密文件Strictly Confidential3.2双方承认及确定有关本协议、本协议内容，以及彼此就准备或履行本协议而交换的任何口头或书面资料均被视为保密信息。双方应当对所有该等保密信息予以保密，而在未得到另一方书面同意前，不得向任何第三者披露任何保密信息，惟下列信息除外：(a)公众人士知悉或将会知悉的任何信息（惟并非由接受保密信息之一方擅自向公众披露）；(b)根据适用法律法规、股票交易规则、或政府部门或法院的命令而所需披露之任何信息；或(c)由任何一方就本协议所述交易而需向其股东、投资者、法律或财务顾问披露之信息，而该股东、法律或财务顾问亦需遵守与本条款相类似之保密责任。如任何一方工作人员或聘请机构的泄密均视为该方的泄密，需依本协议承担违约责任。无论本协议以任何理由终止，本条款仍然生效。The Parties acknowledge that the existence and the terms of this Agreement and any oral or written information exchanged between the Parties inconnection with the preparation and performance this Agreement are regarded as confidential information. Each Party shall maintainconfidentiality of all such confidential information, and without obtaining the written consent of the other Party, it shall not disclose any relevantconfidential information to any third parties, except for the information that: (a) is or will be in the public domain (other than through the receivingParty’s unauthorized disclosure); (b) is under the obligation to be disclosed pursuant to the applicable laws or regulations, rules of any stockexchange, or orders of the court or other government authorities; or (c) is required to be disclosed by any Party to its shareholders, investors,legal counsels or financial advisors regarding the transaction contemplated hereunder, provided that such shareholders, investors, legal counselsor financial advisors shall be bound by the confidentiality obligations similar to those set forth in this Section. Disclosure of any confidentialinformation by the staff members or agencies hired by any Party shall be deemed disclosure of such confidential information by such Party, whichParty shall be held liable for breach of this Agreement. This Section shall survive the termination of this Agreement for any reason.3.3双方同意，不论本协议是否变更、解除或终止，本条款将持续有效。The Parties agree that this Section shall survive changes to, and rescission or termination of, this Agreement.4.陈述和保证Representations and Warranties4.1甲方陈述和保证如下：Party A hereby represents and warrants as follows:4.1.1甲方是按照中国法律合法注册并有效存续的外商独资企业。Party A is a whollyforeignowned enterprise legally registered and validly existing in accordance with the laws of China.10秘密文件Strictly Confidential4.1.2甲方已采取必要的公司行为，获得必要的授权，并取得第三方和政府部门的同意及批准（若需）以签署和履行本协议；甲方对本协议的签署和履行并不违反法律法规的明确规定。Party A has taken all necessary corporate actions, obtained all necessary authorization and the consent and approval from third partiesand government agencies (if any) for the execution and performance of this Agreement. Party A’s execution and performance of thisAgreement do not violate any explicit requirements under any law or regulation binding on Party A.4.1.3本协议构成对其合法、有效、有约束力并依本协议之条款对其强制执行的义务。This Agreement constitutes Party A's legal, valid and binding obligations, enforceable in accordance with its terms.4.2乙方陈述和保证如下：Party B hereby represents and warrants as follows:4.2.1乙方是按照中国法律合法登记且有效存续的有限责任公司，乙方根据政府部门的批准和许可从事手机视频技术开发、内容制作和产业化市场推广的经营。Party B is a limited company legally registered and validly existing in accordance with the laws of China, engages in mobile videotechnology research, development, content creation, sale and related industrial promotion pursuant to governmental approvals andpermits;11秘密文件Strictly Confidential4.2.2乙方已采取必要的行为，获得必要的授权，并取得第三方和政府部门的同意及批准（若需）以签署和履行本协议；乙方对本协议的签署和履行并不违反法律法规的明确规定。Party B has taken all necessary actions, obtained all necessary authorization and the consent and approval from third parties andgovernment agencies (if any) for the execution and performance of this Agreement. Party B’s execution and performance of thisAgreement do not violate any explicit requirements under any law or regulation binding on Party B.4.2.3本协议构成对其合法、有效、有约束力并依本协议之条款对其强制执行的义务。This Agreement constitutes Party B's legal, valid and binding obligations, and shall be enforceable against it.5.生效和有效期Effectiveness and Term5.1本协议于文首标明的协议日期签署并同时生效。除非依本协议或双方其他协议的约定而提前终止，本协议有效期为20年，但甲、乙双方应自本协议签署后，每3个月对本协议的内容做一次审查，以决定是否需要根据当时的情况对本协议作出相应修改和补充。This Agreement is executed on the date first above written and shall take effect as of such date. Unless earlier terminated in accordance with theprovisions of this Agreement or relevant agreements separately executed between the Parties, the term of this Agreement shall be 20 years. Afterthe execution of this Agreement, both Parties shall review this Agreement every 3 months to determine whether to amend or supplement theprovisions in this Agreement based on the actual circumstances at that time.12秘密文件Strictly Confidential5.2协议期满前，经甲方书面确认，本协议可以延期。延期的期限由甲方决定，乙方必须无条件地同意该延期。The term of this Agreement may be extended if confirmed in writing by Party A prior to the expiration thereof. The extended term shall bedetermined by Party A, and Party B shall accept such extended term unconditionally.6.终止Termination6.1除非依据本协议续期，本协议于到期之日终止。Unless renewed in accordance with the relevant terms of this Agreement, this Agreement shall be terminated upon the date of expiration hereof.6.2本协议有效期内，除非甲方对乙方有重大过失或存在欺诈行为，乙方不得提前终止本协议。尽管如此，甲方可在任何时候通过提前30天向乙方发出书面通知的方式终止本协议。During the term of this Agreement, unless Party A commits gross negligence, or a fraudulent act, against Party B, Party B shall not terminate thisAgreement prior to its expiration date. Nevertheless, Party A shall have the right to terminate this Agreement upon giving 30 days' prior writtennotice to Party B at any time.6.3在本协议终止之后，双方在第3、7和8条项下的权利和义务将继续有效。The rights and obligations of the Parties under Articles 3, 7 and 8 shall survive the termination of this Agreement.13秘密文件Strictly Confidential7.适用法律和争议解决Governing Law and Resolution of Disputes7.1本协议的订立、效力、解释、履行、修改和终止以及争议的解决适用中国的法律。The execution, effectiveness, construction, performance, amendment and termination of this Agreement and the resolution of disputes hereundershall be governed by the laws of China.7.2因解释和履行本协议而发生的任何争议，本协议双方应首先通过友好协商的方式加以解决。如果在一方向其他方发出要求协商解决的书面通知后30天之内争议仍然得不到解决，则任何一方均可将有关争议提交给中国国际经济贸易仲裁委员会，由该会按照其仲裁规则仲裁解决。仲裁应在北京进行，使用之语言为中文。仲裁裁决是终局性的，对各方均有约束力。In the event of any dispute with respect to the construction and performance of this Agreement, the Parties shall first resolve the dispute throughfriendly negotiations. In the event the Parties fail to reach an agreement on the dispute within 30 days after either Party's request to the otherParties for resolution of the dispute through negotiations, either Party may submit the relevant dispute to the China International Economic andTrade Arbitration Commission for arbitration, in accordance with its Arbitration Rules. The arbitration shall be conducted in Beijing, and thelanguage used in arbitration shall be Chinese. The arbitration award shall be final and binding on all Parties.14秘密文件Strictly Confidential7.3因解释和履行本协议而发生任何争议或任何争议正在进行仲裁时，除争议的事项外，本协议双方仍应继续行使各自在本协议项下的其他权利并履行各自在本协议项下的其他义务。Upon the occurrence of any disputes arising from the construction and performance of this Agreement or during the pending arbitration of anydispute, except for the matters under dispute, the Parties to this Agreement shall continue to exercise their respective rights under this Agreementand perform their respective obligations under this Agreement.8.补偿Indemnification就甲方根据本协议向乙方提供的咨询和服务内容所产生或引起的针对甲方的诉讼、请求或其他要求而招致的任何损失、损害、责任或费用都应由乙方补偿给甲方，以使甲方不受损害，除非该损失、损害、责任或费用是因甲方的重大过失或故意而产生的。Party B shall indemnify and hold harmless Party A from any losses, injuries, obligations or expenses caused by any lawsuit, claims or other demandsagainst Party A arising from or caused by the consultations and services provided by Party A to Party B pursuant this Agreement, except where suchlosses, injuries, obligations or expenses arise from the gross negligence or willful misconduct of Party A.15秘密文件Strictly Confidential9.通知Notices9.1本协议项下要求或发出的所有通知和其他通信应通过专人递送、挂号邮寄、邮资预付或快递服务或传真的方式发到该方下列地址。每一通知还应再以电子邮件送达。该等通知视为有效送达的日期按如下方式确定：All notices and other communications required or permitted to be given pursuant to this Agreement shall be delivered personally or sent byregistered mail, postage prepaid, by a courier service or by facsimile transmission to the address of such Party set forth below. A confirmationcopy of each notice shall also be sent by email. The dates on which notices shall be deemed to have been effectively given shall be determined asfollows:9.1.1通知如果是以专人递送、快递服务或挂号邮寄、邮资预付发出的，则以于设定为通知的地址在接收或拒收之日为有效送达日。Notices given by personal delivery, by courier service or by registered mail, postage prepaid, shall be deemed effectively given on thedate of receipt or refusal at the address specified for notices.9.1.2通知如果是以传真发出的，则以成功传送之日为有效送达日（应以自动生成的传送确认信息为证）。Notices given by facsimile transmission shall be deemed effectively given on the date of successful transmission (as evidenced by anautomatically generated confirmation of transmission).16秘密文件Strictly Confidential9.2为通知的目的，双方地址如下：For the purpose of notices, the addresses of the Parties are as follows:甲方：中传天下信息科技（深圳）有限公司Party A: Zhongchuan Tianxia Information Technology (Shenzhen) Co., Ltd.地址：深圳市南山区高新中三道2号深圳软件园一期五栋401AAddress:401A, Building 5, Phase 1, Shenzhen Software Park, No.2 Gaoxin Zhongsan Road, Nanshan District, Shenzhen收件人：洪婷Attn: Hong Ting乙方：北京中传视讯科技有限公司Party B: Beijing Mobile Vision Technology Co., Ltd地址：北京市朝阳区光华路9号SOHO3QLAB32Address: LAB32, SOHO3Q, No 9, Guanghua Road, Chaoyang District, Beijing.收件人：宋雪松Attn.: Song Xuesong9.3任何一方可按本条规定随时给另一方发出通知来改变其接收通知的地址。Any Party may at any time change its address for notices by a notice delivered to the other Party in accordance with the terms hereof.17秘密文件Strictly Confidential10.协议的转让Assignment10.1乙方不得将其在本协议项下的权利与义务转让给第三方，除非事先征得甲方的书面同意。Without Party A's prior written consent, Party B shall not assign its rights and obligations under this Agreement to any third party.10.2乙方在此同意，甲方可以在其需要时向其他第三方转让其在本协议项下的权利和义务，并在该等转让发生时甲方仅需向乙方发出书面通知，并且无需再就该等转让征得乙方的同意。Party B agrees that Party A may assign its obligations and rights under this Agreement to any third party upon a prior written notice to Party Bbut without the consent of Party B.11.协议的分割性Severability如果本协议有任何一条或多条规定根据任何法律或法规在任何方面被裁定为无效、不合法或不可执行，本协议其余规定的有效性、合法性或可执行性不应因此在任何方面受到影响或损害。双方应通过诚意磋商，争取以法律许可以及双方期望的最大限度内有效的规定取代那些无效、不合法或不可执行的规定，而该等有效的规定所产生的经济效果应尽可能与那些无效、不合法或不能强制执行的规定所产生的经济效果相似。In the event that one or several of the provisions of this Agreement are found to be invalid, illegal or unenforceable in any aspect in accordance with anylaws or regulations, the validity, legality or enforceability of the remaining provisions of this Agreement shall not be affected or compromised in any aspect.The Parties shall strive in good faith to replace such invalid, illegal or unenforceable provisions with effective provisions that accomplish to the greatestextent permitted by law and the intentions of the Parties, and the economic effect of such effective provisions shall be as close as possible to the economiceffect of those invalid, illegal or unenforceable provisions.18秘密文件Strictly Confidential12.协议的修改、补充Amendments and Supplements双方可以书面协议方式对本协议作出修改和补充。经过双方签署的有关本协议的修改协议和补充协议是本协议组成部分，具有与本协议同等的法律效力。Any amendments and supplements to this Agreement shall be in writing. The amendment agreements and supplementary agreements that have beensigned by the Parties and that relate to this Agreement shall be an integral part of this Agreement and shall have the same legal validity as this Agreement.13.语言和副本Language and Counterparts本协议以中文和英文书就，一式二份，甲乙双方各持一份，具有同等效力；中英文版本如有冲突，应以中文版为准。This Agreement is written in both Chinese and English language in two copies, each Party having one copy with equal legal validity; in case there is anyconflict between the Chinese version and the English version, the Chinese version shall prevail.本页其余部分刻意留为空白The Remainder of this page is intentionally left blank19秘密文件Strictly Confidential有鉴于此，双方已使得经其授权的代表于文首所述日期签署了本独家业务合作协议并即生效，以昭信守。IN WITNESS WHEREOF, the Parties have caused their authorized representatives to execute this Exclusive Business Cooperation Agreement as of thedate first above written.甲方：中传天下信息科技（深圳）有限公司（盖章）Party A: Zhongchuan Tianxia Information Technology (Shenzhen) Co., Ltd.(Seal)签字：By: /s/ Hong Ting 姓名：洪婷Name: Hong Ting职务：总经理Title: General Manager20秘密文件Strictly Confidential有鉴于此，双方已使得经其授权的代表于文首所述日期签署了本独家业务合作协议并即生效，以昭信守。IN WITNESS WHEREOF, the Parties have caused their authorized representatives to execute this Exclusive Business Cooperation Agreement as of thedate first above written. 乙方：北京中传视讯科技有限公司（盖章）Party B: Beijing Mobile Vision Technology Co., Ltd. (Seal)签字：By: /s/ Song Xuesong 姓名：宋雪松Name: Song Xuesong职务：董事长Title: Chairman of the Board21秘密文件Strictly ConfidentialEX4.16 4 f20f2017ex416_luokung.htm EXCLUSIVE OPTION AGREEMENT BY AND AMONG ZHONGCHUAN TIANXIA INFORMATION TECHNOLOGY(SHENZHEN) CO., LTD., XUESONG SONG, WEILI CHEN, PING WANG, DONGLAI LIU, AND BEIJING MOBILE VISION TECHNOLOGY CO., LTD., DATEDAUGUST 31, 2015Exhibit 4.16独家购买权协议Exclusive Option Agreement本独家购买权协议 (下称“本协议”) 由以下各方于年月日在中华人民共和国（下称“中国”）北京签订：This Exclusive Option Agreement (this “Agreement”) is executed by and among the Parties below as of in Beijing, the People’s Republic of China (the“China” or “PRC”):甲方：中传天下信息科技（深圳）有限公司，一家依照中国法律设立和存在的外商独资企业，地址为深圳市南山区高新中三道2号深圳软件园一期五栋401A；Party A:Zhongchuan Tianxia Information Technology (Shenzhen) Co., Ltd., a whollyforeignowned enterprise organized and existing under the laws of China,with its address at 401A, Building 5, Phase 1, Shenzhen Software Park, No.2 Gaoxin Zhongsan Road, Nanshan District, Shenzhen.乙方：Party B:a)宋雪松Song Xuesong身份证号码:120112196809040417ID Card No.:120112196809040417住所：天津市河西区广东路中裕园33702Address:Zhongyu Yuan 33702, Guangdong Road, Hexi District, Tianjinb)陈蔚力Chen Weili身份证号码:120106197309240516ID Card No.:120106197309240516住所：广东省深圳市宝安区宝城上川路15号Address:Baocheng Shangchuan Road 15, Baoan District, Shenzhen, Guangdong1秘密文件Strictly Confidentialc)王平Wang Ping身份证号码:35020319691030401xID Card No.:35020319691030401x住所：广东省深圳市南山区高新南环路36号彩虹之岸12栋4AAddress:Caihong Zhi’an Building No.12 Suite 4A, Gaoxin Nanhuan Road 36, Nanshan District, Shenzhen, Guangdongd)刘东来Liu Donglai身份证号码:120107196810103912ID Card No.:120107196810103912住所：天津市和平区南京路诚基经贸中心1号楼2门1702号Address:No 1702, Door 2, Build 1, Chengji Economic and Trade Centre, Nanjing Road, Heping District, Tianjin.丙方：北京中传视讯科技有限公司，一家依照中国法律设立和存在的有限责任公司，地址为北京市朝阳区光华路9号SOHO3QLAB32，统一社会信用代码为9111010576215249XM；Party C:Beijing Mobile Vision Technology Co., Ltd., a limited company duly registered in China, with its address at LAB32, SOHO3Q, No 9, Guanghua Road,Chaoyang District, Beijing and its uniform social credit code of 9111010576215249XM.2秘密文件Strictly Confidential在本协议中，甲方、乙方和丙方以下各称“一方”，合称“各方”。In this Agreement, each of Party A, Party B and Party C shall be referred to as a “Party” respectively, and they shall be collectively referred to as the“Parties”.鉴于，乙方系丙方股东并合计持有丙方100%股权，乙方将按本协议之条款授予甲方购买全部或部分该股权的权利。Whereas, Party B are the shareholders of Party C and jointly hold 100% of the equity interest in Party C, and Party B are willing to grant to Party A the rightto acquire such equity interest, in whole or in part, on the terms herein.现各方协商一致，达成如下协议：Now therefore, upon mutual discussion and negotiation, the Parties have reached the following agreement:1.股权买卖Sale and Purchase of Equity Interest1.1授予权利Option Granted乙方在此不可撤销地授予甲方在中国法律允许的前提下，按照甲方自行决定的行使步骤，并按照本协议第1.3条所述的价格，随时一次或多次从乙方购买或指定一人或多人(“被指定人”)从乙方购买其目前和将来所持有的丙方的全部或部分股权（无论乙方出资额和/或持股比例将来是否发生变化）的一项不可撤销的专有权(“股权购买权”)。除甲方和被指定人外，任何第三人均不得享有股权购买权或其他与乙方股权有关的权利。丙方特此同意乙方向甲方授予股权购买权。本款及本协议所规定的“人”指个人、公司、合营企业、合伙、企业、信托或非公司组织。Party B hereby irrevocably grant Party A an irrevocable and exclusive right to purchase, or designate one or more persons (each, a “Designee”) topurchase the equity interests in Party C now and in the future held by Party B (regardless whether Party B’s capital contribution amount and/orpercentage of shareholding will be changed in the future) once or at multiple times at any time in part or in whole at Party A’s sole and absolutediscretion to the extent permitted by Chinese laws and at the price described in Section 1.3 herein (such right being the “Equity Interest PurchaseOption”). Except for Party A and the Designee(s), no other person shall be entitled to the Equity Interest Purchase Option or other rights withrespect to the equity interests of Party B. Party C hereby agrees to the grant by Party B of the Equity Interest Purchase Option to Party A. Theterm “person” as used herein shall refer to individuals, corporations, partnerships, partners, enterprises, trusts or noncorporate organizations.3秘密文件Strictly Confidential1.2行使步骤Steps for Exercise of Equity Interest Purchase Option甲方行使其股权购买权以符合中国法律和法规的规定为前提。甲方行使股权购买权时，应向乙方发出书面通知(“股权购买通知”)，股权购买通知应载明以下事项：(a)甲方关于行使股权购买权的决定；(b)甲方拟从乙方购买的股权份额(“被购买的股权”)；和(c)被购买的股权的买入日期。Subject to the provisions of the laws and regulations of China, Party A may exercise the Equity Interest Purchase Option by issuing a writtennotice to Party B (the “Equity Interest Purchase Option Notice”), specifying: (a) Party A’s decision to exercise the Equity Interest PurchaseOption; (b) the portion of equity interests to be purchased from Party B (the “Optioned Interests”); and (c) the date for purchasing the OptionedInterests.1.3股权买价Equity Interest Purchase Price被购买的股权的买价（“股权买价”）应是行权当时中国法律允许的最低价格。乙方收到该股权对价后，应当提供给丙方与该股权买价相同金额的借款，该借款的期限为20年，且为无息。乙方应当在该借款期限届满时就该借款放弃对丙方的债权。The purchase price of the Optioned Interests (the “Equity Interest Purchase Price”) shall be the lowest price permitted by the laws of China. Afterreceiving the Equity Interest Purchase Price, Party B shall make an interestfree loan equivalent to the amount of Equity Interest Purchase Price toParty C, of which term is 20 years. Each member of Party B shall give up his(her) creditor’s right when the loan term expires.4秘密文件Strictly Confidential1.4转让被购买股权Transfer of Optioned Interests甲方每次行使股权购买权时：For each exercise of the Equity Interest Purchase Option:1.4.1乙方应责成丙方及时召开股东会会议，在该会议上，应通过批准乙方向甲方和/或被指定人转让被购买的股权的决议；Party B shall cause Party C to promptly convene a shareholders meeting, at which a resolution shall be adopted approving Party B’stransfer of the Optioned Interests to Party A and/or the Designee(s);1.4.2乙方应就其向甲方和/或被指定人转让被购买股权取得丙方其他股东同意该转让并放弃优先购买权的书面声明。Party B shall obtain written statements from the other shareholder of Party C giving consent to the transfer of the equity interest to PartyA and/or the Designee(s) and waiving any right of first refusal related thereto.1.4.3乙方应与甲方和/或(在适用的情况下)被指定人按照本协议及股权购买通知的规定，为每次转让签订股权转让协议；Party B shall execute a share transfer contract with respect to each transfer with Party A and/or each Designee (whichever is applicable),in accordance with the provisions of this Agreement and the Equity Interest Purchase Option Notice regarding the Optioned Interests;5秘密文件Strictly Confidential1.4.4有关方应签署所有其他所需协议、协议或文件，取得全部所需的政府批准和同意，并采取所有所需行动，在不附带任何担保权益的情况下，将被购买的股权的有效所有权转移给甲方和/或被指定人并使甲方和/或被指定人成为被购买的股权的登记在册所有人。为本款及本协议的目的，“担保权益”包括担保、抵押、第三方权利或权益，任何购股权、收购权、优先购买权、抵销权、所有权扣留或其他担保安排等；但为了明确起见，不包括在本协议、乙方股权质押协议项下产生的任何担保权益。本款及本协议所规定的“乙方股权质押协议”指甲方、乙方和丙方于本协议签署之日签订的股权质押协议，根据股权质押协议，乙方为担保丙方能履行丙方与甲方签订的独家业务合作协议项下的义务，而向甲方质押其在丙方的全部乙方股权。The relevant Parties shall execute all other necessary contracts, agreements or documents, obtain all necessary government licenses andpermits and take all necessary actions to transfer valid ownership of the Optioned Interests to Party A and/or the Designee(s),unencumbered by any security interests, and cause Party A and/or the Designee(s) to become the registered owner(s) of the OptionedInterests. For the purpose of this Section and this Agreement, “security interests” shall include securities, mortgages, third party’s rightsor interests, any stock options, acquisition right, right of first refusal, right to offset, ownership retention or other security arrangements,but shall be deemed to exclude any security interest created by this Agreement and Party B’s Equity Interest Pledge Agreement. “PartyB’s Equity Interest Pledge Agreement” as used in this Section and this Agreement shall refer to the Equity Interest Pledge Agreementexecuted by and among Party A, Party B and Party C on the date of this Agreement, whereby Party B pledge all of their equity interests inParty C to Party A, in order to guarantee Party C’s performance of its obligations under the Exclusive Business Corporation Agreementexecuted by and between Party C and Party A.6秘密文件Strictly Confidential2.知识产权独家购买权Exclusive Option regarding the Intellectual Property Rights2.1本协议签订之日起，若乙方拟转让、出售或以其他方式处置（任一处置方式以下简称“转让”）其拥有或持有的全部或部分知识产权（以下称“知识产权”，定义见第2.4条），甲方有权独家购买该等知识产权。From the date hereof, if Party B proposes to transfer, sell or dispose of (each, a “transfer”) all or any part of the intellectual property rights ownedor held by Party B (“IPR”), Party A shall have exclusive option.2.2若乙方有意转让全部或部分知识产权，应事先向甲方发出书面通知(“转让通知”)，转让通知应载明以下事项：(a) 乙方关于转让知识产权的意向；(b) 乙方拟转让的知识产权清单(“拟转让知识产权”)及转让的价格和其他条件。转让通知视为乙方向甲方发出的一份要约，按照该要约，乙方同意按转让通知中指定的价格条件向甲方转让全部或部分拟转让知识产权。Prior to Party B proposes to transfer all or any part of its IPR, Party B shall give Party A a written notice (“Transfer Notice”), which shall specify (a)Party B’s intention to make the transfer; (b) the list of IPR to be transferred (“Offered IPR”) and the consideration and other conditions uponwhich the transfer is to be made. The Transfer Notice constitutes Party B’s offer given to Party A, pursuant to which, Party B agrees to transfer allor any part of its Offered IPR to Party A based on the same conditions described in the Transfer Notice.7秘密文件Strictly Confidential2.3甲方收到转让通知后，有权在30日内选择按照转让通知中列明的转让价格和条件购买拟转让知识产权。如果甲方行使其独家购买权，双方应于甲方收到转让通知后45日内签订有关的知识产权转让协议，乙方应办理法律规定的知识产权转让的批准和登记手续。Party A shall have an option for a period of 30 days from Party A’s receipt of the Transfer Notice to elect to purchase the Offered IPR at the sameprice and subject to the same conditions as described in the Transfer Notice. If Party A decides to exercise its exclusive option, the parties shallenter into relevant IPR transfer agreement within 45 days upon Party A’s receipt of the Transfer Notice and Party B is responsible to complete allrelated approvals and registrations formalities as prescribed by the PRC law.2.4本协议第2条所称“知识产权”指任何知识产权，包括但不限于著作权、专利权、专利申请权、商标、域名、软件、专有技术，并包括前述知识产权申请权利以及登记注册的权利，以及其他所有与前述知识产权有关的权利和权益。The “IPR” referred to in this Article 2 means any intellectual property rights, including, without limitations, copyrights, patents, patentapplications, trademarks, domain names, software and knowhow together with (a) all rights to apply for or register any of the foregoing and (b) allother rights and interests to any of the foregoing.8秘密文件Strictly Confidential3.承诺Covenants3.1有关丙方的承诺Covenants regarding Party C乙方（作为丙方的股东）和丙方在此承诺：Party B (as the shareholders of Party C) and Party C hereby covenant as follows:3.1.1未经甲方的事先书面同意，不以任何形式补充、更改或修改丙方公司章程文件，增加或减少其注册资本，或以其他方式改变其注册资本结构；Without the prior written consent of Party A, they shall not in any manner supplement, change or amend the articles of association andbylaws of Party C, increase or decrease its registered capital, or change its structure of registered capital in other manners;3.1.2按照良好的财务和商业标准及惯例，保持其公司的存续，审慎地及有效地经营其业务和处理事务；They shall maintain Party C’s corporate existence in accordance with good financial and business standards and practices by prudentlyand effectively operating its business and handling its affairs;3.1.3未经甲方的事先书面同意，不在本协议签署之日起的任何时间出售、转让、抵押或以其他方式处置丙方的任何资产、业务或收入的合法或受益权益，或允许在其上设置任何其他担保权益；Without the prior written consent of Party A, they shall not at any time following the date hereof, sell, transfer, mortgage or dispose of inany manner any assets of Party C or legal or beneficial interest in the business or revenues of Party C, or allow the encumbrance thereonof any security interest;3.1.4未经甲方的事先书面同意，不发生、继承、保证或容许存在任何债务，但(i)正常或日常业务过程中产生而不是通过借款方式产生的债务；和(ii)已向甲方披露和得到甲方书面同意的债务除外；Without the prior written consent of Party A, they shall not incur, inherit, guarantee or suffer the existence of any debt, except for (i)debts incurred in the ordinary course of business other than through loans; and (ii) debts disclosed to Party A for which Party A’swritten consent has been obtained;9秘密文件Strictly Confidential3.1.5一直在正常业务过程中经营所有业务，以保持丙方的资产价值，不进行任何足以影响其经营状况和资产价值的作为/不作为；They shall always operate all of Party C’s businesses during the ordinary course of business to maintain the asset value of Party C andrefrain from any action/omission that may affect Party C’s operating status and asset value;3.1.6未经甲方的事先书面同意，不得让丙方签订任何重大协议，但在正常业务过程中签订的协议除外(就本段而言，如果一份协议的价值超过【人民币10万元】，即被视为重大协议)；Without the prior written consent of Party A, they shall not cause Party C to execute any major contract, except the contracts in theordinary course of business (for purpose of this subsection, a contract with a value exceeding RMB 100,000 shall be deemed a majorcontract);3.1.7未经甲方的事先书面同意，丙方不得向任何人提供贷款或信贷；Without the prior written consent of Party A, they shall not cause Party C to provide any person with any loan or credit;3.1.8应甲方要求，向其提供所有关于丙方的营运和财务状况的资料；They shall provide Party A with information on Party C’s business operations and financial condition at Party A’s request;10秘密文件Strictly Confidential3.1.9如甲方提出要求，丙方应从甲方接受的保险公司处购买和持有有关其资产和业务的保险，该保险的金额和险种应与经营类似业务的公司一致；If requested by Party A, they shall procure and maintain insurance in respect of Party C’s assets and business from an insurance carrieracceptable to Party A, at an amount and type of coverage typical for companies that operate similar businesses;3.1.10未经甲方的事先书面同意，丙方不得与任何人合并或联合，或对任何人进行收购或投资；Without the prior written consent of Party A, they shall not cause or permit Party C to merge, consolidate with, acquire or invest in anyperson;3.1.11将发生的或可能发生的与丙方资产、业务或收入有关的诉讼、仲裁或行政程序立即通知甲方；They shall immediately notify Party A of the occurrence or possible occurrence of any litigation, arbitration or administrative proceedingsrelating to Party C’s assets, business or revenue;3.1.12为保持丙方对其全部资产的所有权，签署所有必要或适当的文件，采取所有必要或适当的行动和提出所有必要或适当的控告或对所有索偿进行必要和适当的抗辩；To maintain the ownership by Party C of all of its assets, they shall execute all necessary or appropriate documents, take all necessary orappropriate actions and file all necessary or appropriate complaints or raise necessary and appropriate defenses against all claims;11秘密文件Strictly Confidential3.1.13未经甲方事先书面同意，不得以任何形式派发股息予各股东，但一经甲方要求，丙方应立即将其所有可分配利润全部立即分配给其各股东；及Without the prior written consent of Party A, they shall ensure that Party C shall not in any manner distribute dividends to itsshareholders, provided that upon Party A’s written request, Party C shall immediately distribute all distributable profits to itsshareholders; and3.1.14根据甲方的要求，委任由其指定的任何人士出任丙方的董事和/或执行董事。At the request of Party A, they shall appoint any persons designated by Party A as the director and/or executive director of Party C.3.2乙方和丙方的承诺Covenants of Party B and Party C乙方承诺：Party B hereby covenant as follows:3.2.1未经甲方的事先书面同意，不出售、转让、抵押或以其他方式处置其拥有的丙方的股权的合法或受益权益，或允许在其上设置任何其他担保权益，但根据乙方签署的《股权质押协议》在该股权上设置的质押则除外；Without the prior written consent of Party A, Party B shall not sell, transfer, mortgage or dispose of in any other manner any legal orbeneficial interest in the equity interests in Party C held by Party B, or allow the encumbrance thereon of any security interest, except forthe pledge placed on these equity interests in accordance with Party B’s Equity Interest Pledge Agreement;12秘密文件Strictly Confidential3.2.2促使丙方股东会和/或执行董事不批准在未经甲方的事先书面同意的情况下，出售、转让、抵押或以其他方式处置任何乙方持有之丙方的股权的合法权益或受益权，或允许在其上设置任何其他担保权益，但批准根据乙方签署的《股权质押协议》在乙方股权上设置的质押则除外；Party B shall cause the shareholders’ meeting and/or the executive director of Party C not to approve the sale, transfer, mortgage ordisposition in any other manner of any legal or beneficial interest in the equity interests in Party C held by Party B, or allow theencumbrance thereon of any security interest, without the prior written consent of Party A, except for the pledge placed on these equityinterests in accordance with Party B’s Equity Interest Pledge Agreement;3.2.3未经甲方的事先书面同意的情况下，对于丙方与任何人合并或联合，或对任何人进行收购或投资，乙方将促成丙方股东会或执行董事不予批准；Party B shall cause the shareholders’ meeting or the executive director of Party C not to approve the merger or consolidation with anyperson, or the acquisition of or investment in any person, without the prior written consent of Party A;3.2.4将发生的或可能发生的任何关于其所拥有的股权的诉讼、仲裁或行政程序立即通知甲方；Party B shall immediately notify Party A of the occurrence or possible occurrence of any litigation, arbitration or administrativeproceedings relating to the equity interests in Party C held by Party B;13秘密文件Strictly Confidential3.2.5促使丙方股东会或执行董事表决赞成本协议规定的被购买的股权的转让并应甲方之要求采取其他任何行动；Party B shall cause the shareholders’ meeting or the executive director of Party C to vote their approval of the transfer of the OptionedInterests as set forth in this Agreement and to take any and all other actions that may be requested by Party A;3.2.6为保持其对股权的所有权，签署所有必要或适当的文件，采取所有必要或适当的行动和提出所有必要或适当的控告或对所有索偿进行必要和适当的抗辩；To the extent necessary to maintain Party B’s ownership in Party C, Party B shall execute all necessary or appropriate documents, take allnecessary or appropriate actions and file all necessary or appropriate complaints or raise necessary and appropriate defenses against allclaims;3.2.7应甲方的要求，委任由其指定的任何人士出任丙方的董事和/或执行董事；Party B shall appoint any designee of Party A as the director and/or executive director of Party C, at the request of Party A;3.2.8经甲方随时要求，应向其指定的代表在任何时间无条件地根据本协议的股权购买权立即转让其股权，并放弃其对其他现有股东进行上述股权转让所享有的优先购买权（如有的话）；和At the request of Party A at any time, Party B shall promptly and unconditionally transfer its equity interests in Party C to Party A’sDesignee(s) in accordance with the Equity Interest Purchase Option under this Agreement, and Party B hereby waives its right of firstrefusal (if any) to the share transfer by the other existing shareholder of Party C (if any); and14秘密文件Strictly Confidential3.2.9严格遵守本协议及各方共同或分别签订的其他协议的各项规定，切实履行该等协议项下的各项义务，并不进行任何足以影响该等协议的有效性和可执行性的作为/不作为。如果乙方对于本协议项下或乙方股权质押协议下或对甲方的授权委托书中的股权，还留存有任何权利，除非甲方书面指示，否则乙方仍不得行使该权利。Party B shall strictly abide by the provisions of this Agreement and other contracts jointly or separately executed by and among Party B,Party C and Party A, perform the obligations hereunder and thereunder, and refrain from any action/omission that may affect theeffectiveness and enforceability thereof. To the extent that Party B has any remaining rights with respect to the equity interests subject tothis Agreement hereunder or under Party B’s Equity Interest Pledge Agreement or under the Power of Attorney granted in favor of PartyA, Party B shall not exercise such rights except in accordance with the written instructions of Party A.4.陈述和保证Representations and Warranties乙方和丙方特此在本协议签署之日和每一个转让日向甲方共同及分别陈述和保证如下：Party B and Party C hereby represent and warrant to Party A, jointly and severally, as of the date of this Agreement and each date of transfer of theOptioned Interests, that:4.1其具有签订和交付本协议和其为一方的、根据本协议为每一次转让被购买的股权而签订的任何股权转让协议(各称为"转让协议")，并履行其在本协议和任何转让协议项下的义务的权力和能力。乙方和丙方同意在甲方行使购买权时，他们将签署与本协议条款一致的转让协议。本协议和其是一方的各转让协议一旦签署后，构成或将对其构成合法、有效及具有约束力的义务并可按照其条款对其强制执行；They have the authority to execute and deliver this Agreement and any share transfer contracts to which they are a party concerning theOptioned Interests to be transferred thereunder (each, a “Transfer Contracts”), and to perform their obligations under this Agreement and anyTransfer Contracts. Party B and Party C agree to enter into Transfer Contracts consistent with the terms of this Agreement upon Party A’s exerciseof the Equity Interest Purchase Option. This Agreement and the Transfer Contracts to which they are a party constitute or will constitute theirlegal, valid and binding obligations and shall be enforceable against them in accordance with the provisions thereof;15秘密文件Strictly Confidential4.2无论是本协议或任何转让协议的签署和交付还是其在本协议或任何转让协议项下的义务的履行均不会：(i)导致违反任何有关的中国法律；(ii)与丙方章程或其他组织文件相抵触；(iii)导致违反其是一方或对其有约束力的任何协议或文件，或构成其是一方或对其有约束力的任何协议或文件项下的违约；(iv)导致违反有关向任何一方颁发的任何许可或批准的授予和(或)继续有效的任何条件；或(v)导致向任何一方颁发的任何许可或批准中止或被撤销或附加条件；The execution and delivery of this Agreement or any Transfer Contracts and the obligations under this Agreement or any Transfer Contracts shallnot: (i) cause any violation of any applicable laws of China; (ii) be inconsistent with the articles of association, bylaws or other organizationaldocuments of Party C; (iii) cause the violation of any contracts or instruments to which they are a party or which are binding on them, orconstitute any breach under any contracts or instruments to which they are a party or which are binding on them; (iv) cause any violation of anycondition for the grant and/or continued effectiveness of any licenses or permits issued to either of them; or (v) cause the suspension orrevocation of or imposition of additional conditions to any licenses or permits issued to either of them;4.3乙方对其在丙方拥有的股权拥有良好和可出售的所有权，除乙方签署的《股权质押协议》外，乙方在上述股权上没有设置任何担保权益；Party B have a good and merchantable title to the equity interests in Party C they hold. Except for Party B’s Equity Interest Pledge Agreement,Party B have not placed any security interest on such equity interests;16秘密文件Strictly Confidential4.4目前没有悬而未决的或构成威胁的与丙方的股权、丙方资产有关的或与丙方有关的诉讼、仲裁或行政程序。There are no pending or threatened litigation, arbitration or administrative proceedings relating to the equity interests in Party C, assets of Party Cor Party C.5.生效日Effective Date5.1本协议于各方签署本协议之日生效，有效期10年，经甲方选择可再延长10年。This Agreement shall become effective upon the date hereof, and remain effective for a term of 10 years, and may be renewed for an additional 10years at Party A’s election.5.2若丙方股东发生变化，由新股东签署此协议，在此协议签署之日，原协议自动视为无效。In the event of a change in the shareholders of Party C, the new shareholder should sign this agreement and the original agreement willautomatically be deemed invalid on the date of signing of this agreement.17秘密文件Strictly Confidential6.适用法律与争议解决Governing Law and Resolution of Disputes6.1适用法律Governing law本协议的订立、效力、解释、履行、修改和终止以及争议解决均适用中国正式公布并可公开得到的法律。对中国正式公布并可公开得到的法律没有规定的事项，将适用国际法律原则和惯例。The execution, effectiveness, construction, performance, amendment and termination of this Agreement and the resolution of disputes hereundershall be governed by the formally published and publicly available laws of China. Matters not covered by formally published and publiclyavailable laws of China shall be governed by international legal principles and practices.6.2争议的解决方法Methods of Resolution of Disputes因解释和履行本协议而发生的任何争议，本协议各方应首先通过友好协商的方式加以解决。如果在一方向其他方发出要求协商解决的书面通知后30天之内争议仍然得不到解决，则任何一方均可将有关争议提交给中国国际经济贸易仲裁委员会，由该会按照其届时有效的仲裁规则仲裁解决。仲裁应在北京进行，使用之语言为中文。仲裁裁决是终局性的，对各方均有约束力。In the event of any dispute with respect to the construction and performance of this Agreement, the Parties shall first resolve the dispute throughfriendly negotiations. In the event the Parties fail to reach an agreement on the dispute within 30 days after either Party’s request to the otherParties for resolution of the dispute through negotiations, either Party may submit the relevant dispute to the China International Economic andTrade Arbitration Commission for arbitration, in accordance with its then effective arbitration rules. The arbitration shall be conducted in Beijing,and the language used in arbitration shall be Chinese. The arbitration award shall be final and binding on all Parties.18秘密文件Strictly Confidential7.税款、费用Taxes and Fees每一方应承担根据中国法律因准备和签署本协议和各转让协议以及完成本协议和各转让协议拟定的交易而由该方发生的或对其征收的任何和全部的转让和注册的税、花费和费用。Each Party shall pay any and all transfer and registration tax, expenses and fees incurred thereby or levied thereon in accordance with the laws of China inconnection with the preparation and execution of this Agreement and the Transfer Contracts, as well as the consummation of the transactionscontemplated under this Agreement and the Transfer Contracts.8.通知Notices8.1本协议项下要求或发出的所有通知和其他通信应通过专人递送、挂号邮寄、邮资预付或商业快递服务或传真的方式发到该方下列地址。每一通知还应再以电子邮件送达。该等通知视为有效送达的日期按如下方式确定：All notices and other communications required or permitted to be given pursuant to this Agreement shall be delivered personally or sent byregistered mail, postage prepaid, by a commercial courier service or by facsimile transmission to the address of such Party set forth below. Aconfirmation copy of each notice shall also be sent by email. The dates on which notices shall be deemed to have been effectively given shall bedetermined as follows:8.1.1通知如果是以专人递送、快递服务或挂号邮寄、邮资预付发出的，则以于设定为通知的地址在接收或拒收之日为有效送达日。Notices given by personal delivery, by courier service or by registered mail, postage prepaid, shall be deemed effectively given on thedate of receipt or refusal at the address specified for notices.19秘密文件Strictly Confidential8.1.2通知如果是以传真发出的，则以成功传送之日为有效送达日（应以自动生成的传送确认信息为证）。Notices given by facsimile transmission shall be deemed effectively given on the date of successful transmission (as evidenced by anautomatically generated confirmation of transmission).8.2为通知的目的，各方地址如下：For the purpose of notices, the addresses of the Parties are as follows:甲方：中传天下信息科技（深圳）有限公司Party A:Zhongchuan Tianxia Information Technology (Shenzhen) Co., Ltd.地址：深圳市南山区高新中三道2号深圳软件园一期五栋401AAddress:401A, Building 5, Phase 1, Shenzhen Software Park, No.2 Gaoxin Zhongsan Road, Nanshan District, Shenzhen.收件人：洪婷Attn:Hong Ting乙方：Party B: 宋雪松Song Xuesong住所：天津市河西区广东路中裕园33702Address:Zhongyu Yuan 33702, Guangdong Road, Hexi District, Tianjin20秘密文件Strictly Confidential陈蔚力Chen Weili住所：广东省深圳市宝安区宝城上川路15号Address:Baocheng Shangchuan Road 15, Baoan District, Shenzhen, Guangdong王平Wang Ping住所：广东省深圳市南山区高新南环路36号彩虹之岸12栋4AAddress:Caihong Zhi’an Building No.12 Suite 4A, Gaoxin Nanhuan Road 36, Nanshan District, Shenzhen, Guangdong刘东来Liu Donglai住所：天津市和平区南京路诚基经贸中心1号楼2门1702号Address:No 1702, Door 2, Build 1, Chengji Economic and Trade Centre, Nanjing Road, Heping District, Tianjin.丙方：北京中传视讯科技有限公司Party C:Beijing Mobile Vision Technology Co., Ltd.地址：北京市朝阳区光华路9号SOHO3QLAB32Address: LAB32, SOHO3Q, No 9, Guanghua Road, Chaoyang District, Beijing .收件人：宋雪松Attn: Song Xuesong8.3任何一方可按本条规定随时给其他方发出通知来改变其接收通知的地址。Any Party may at any time change its address for notices by a notice delivered to the other Parties in accordance with the terms hereof.21秘密文件Strictly Confidential9.保密责任Confidentiality各方承认及确定彼此就有关本协议而交换的任何口头或书面资料均属机密资料。各方应当对所有该等资料予以保密，而在未得其他方书面同意前，不得向任何第三者披露任何有关资料，惟下列情况除外：(a)公众人士知悉或将会知悉该等资料(并非由接受资料之一方擅自向公众披露)；(b)适用法律法规或股票交易的规则或规例所需披露之资料；或(c)由任何一方就本协议所述交易而需向其法律或财务顾问披露之资料而该法律或财务顾问亦需遵守与本条款相类似之保密责任。如任何一方工作人员或聘请机构的泄密均视为该方的泄密，需依本协议承担违约责任。无论本协议以任何理由终止，本条款仍然生效。The Parties acknowledge that any oral or written information exchanged among them with respect to this Agreement is confidential information. Each Partyshall maintain the confidentiality of all such information, and without obtaining the written consent of other Parties, it shall not disclose any relevantinformation to any third parties, except in the following circumstances: (a) such information is or will be in the public domain (provided that this is not theresult of a public disclosure by the receiving party); (b) information disclosed as required by applicable laws or rules or regulations of any stock exchange;or (c) information required to be disclosed by any Party to its legal counsel or financial advisor regarding the transaction contemplated hereunder, and suchlegal counsel or financial advisor are also bound by confidentiality duties similar to the duties in this section. Disclosure of any confidential information bythe staff members or agency hired by any Party shall be deemed disclosure of such confidential information by such Party, which Party shall be held liablefor breach of this Agreement. This Section shall survive the termination of this Agreement for any reason.22秘密文件Strictly Confidential10.进一步保证Further Warranties各方同意迅速签署为执行本协议的各项规定和目的而合理需要的或对其有利的文件，以及为执行本协议的各项规定和目的而采取合理需要的或对其有利的进一步行动。The Parties agree to promptly execute documents that are reasonably required for or are conducive to the implementation of the provisions and purposes ofthis Agreement and take further actions that are reasonably required for or are conducive to the implementation of the provisions and purposes of thisAgreement.11.其他Miscellaneous11.1修订、修改与补充Amendment, change and supplement对本协议作出修订、修改与补充，必须经每一方签署书面协议。Any amendment, change and supplement to this Agreement shall require the execution of a written agreement by all of the Parties.11.2完整协议Entire agreement除了在本协议签署后所作出的书面修订、补充或修改以外，本协议构成本协议各方就本协议标的物所达成的完整协议，取代在此之前就本协议标的物所达成的所有口头或书面的协商、陈述和协议。 Except for the amendments, supplements or changes in writing executed after theexecution of this Agreement, this Agreement shall constitute the entire agreement reached by and among the Parties hereto with respect to thesubject matter hereof, and shall supercede all prior oral and written consultations, representations and contracts reached with respect to thesubject matter of this Agreement.23秘密文件Strictly Confidential11.3标题Headings本协议的标题仅为方便阅读而设，不应被用来解释、说明或在其他方面影响本协议各项规定的含义。The headings of this Agreement are for convenience only, and shall not be used to interpret, explain or otherwise affect the meanings of theprovisions of this Agreement.11.4语言Language本协议以中文和英文书就，一式八份，乙方共计六名股东以及甲方、丙方各持一份，具有同等效力；中英文版本如有冲突，应以中文版为准。This Agreement is written in both Chinese and English language in eight copies, the 6 shareholders of Party B, Party A and Party C having onecopy with equal legal validity respectively; in case there is any conflict between the Chinese version and the English version, the Chinese versionshall prevail.11.5可分割性Severability如果本协议有任何一条或多条规定根据任何法律或法规在任何方面被裁定为无效、不合法或不可执行，本协议其余规定的有效性、合法性或可执行性不应因此在任何方面受到影响或损害。各方应通过诚意磋商，争取以法律许可以及各方期望的最大限度内有效的规定取代那些无效、不合法或不可执行的规定，而该等有效的规定所产生的经济效果应尽可能与那些无效、不合法或不能强制执行的规定所产生的经济效果相似。In the event that one or several of the provisions of this Agreement are found to be invalid, illegal or unenforceable in any aspect in accordancewith any laws or regulations, the validity, legality or enforceability of the remaining provisions of this Agreement shall not be affected orcompromised in any respect. The Parties shall strive in good faith to replace such invalid, illegal or unenforceable provisions with effectiveprovisions that accomplish to the greatest extent permitted by law and the intentions of the Parties, and the economic effect of such effectiveprovisions shall be as close as possible to the economic effect of those invalid, illegal or unenforceable provisions.24秘密文件Strictly Confidential11.6继任者Successors本协议对各方各自的继任者和各方所允许的受让方应具有约束力并对其有利。This Agreement shall be binding on and shall inure to the interest of the respective successors of the Parties and the permitted assigns of suchParties.11.7继续有效Survival11.7.1协议期满或提前终止前因本协议而发生的或到期的任何义务在本协议期满或提前终止后继续有效。Any obligations that occur or that are due as a result of this Agreement upon the expiration or early termination of this Agreement shallsurvive the expiration or early termination thereof.11.7.2本协议第5、6、9条和本第11.7条的规定在本协议终止后继续有效。The provisions of Articles 5, 6, 9 and this Section 11.7 shall survive the termination of this Agreement.25秘密文件Strictly Confidential11.8弃权Waivers任何一方可以对本协议的条款和条件作出弃权，但必须经书面作出并经各方签字。一方在某种情况下就其他方的违约所作的弃权不应被视为该方在其他情况下就类似的违约已经对其他方作出弃权。Any Party may waive the terms and conditions of this Agreement, provided that such a waiver must be provided in writing and shall require thesignatures of the Parties. No waiver by any Party in certain circumstances with respect to a breach by other Parties shall operate as a waiver bysuch a Party with respect to any similar breach in other circumstances.本页其余部分刻意留为空白The Remainder of this page is intentionally left blank26秘密文件Strictly Confidential有鉴于此，各方已自行或使得其各自授权代表于文首所载日期签署本独家购买权协议。IN WITNESS WHEREOF, the Parties have executed, or caused their respective duly authorized representatives to execute, this Exclusive Option Agreement as ofthe date first above written.甲方：中传天下信息科技（深圳）有限公司（盖章）Party A: Zhongchuan Tianxia Information Technology (Shenzhen) Co., Ltd. (Seal)签字：By:/s/ Hong Ting姓名：洪婷Name: Hong Ting职务：总经理Title: General Manager秘密文件 Strictly Confidential有鉴于此，各方已自行或使得其各自授权代表于文首所载日期签署本独家购买权协议。IN WITNESS WHEREOF, the Parties have executed, or caused their respective duly authorized representatives to execute, this Exclusive Option Agreement as ofthe date first above written.乙方：Party B:宋雪松Song Xuesong签字：By:/s/ Song Xuesong秘密文件 Strictly Confidential有鉴于此，各方已自行或使得其各自授权代表于文首所载日期签署本独家购买权协议。IN WITNESS WHEREOF, the Parties have executed, or caused their respective duly authorized representatives to execute, this Exclusive Option Agreement as ofthe date first above written.乙方：Party B:陈蔚力Chen Weili签字：By:/s/ Chen Weili秘密文件 Strictly Confidential有鉴于此，各方已自行或使得其各自授权代表于文首所载日期签署本独家购买权协议。IN WITNESS WHEREOF, the Parties have executed, or caused their respective duly authorized representatives to execute, this Exclusive Option Agreement as ofthe date first above written.乙方：Party B:王平Wang Ping签字：By:/s/ Wang Ping秘密文件 Strictly Confidential有鉴于此，各方已自行或使得其各自授权代表于文首所载日期签署本独家购买权协议。IN WITNESS WHEREOF, the Parties have executed, or caused their respective duly authorized representatives to execute, this Exclusive Option Agreement as ofthe date first above written.乙方：Party B:刘东来Liu Donglai签字：By:/s/ Liu Donglai秘密文件 Strictly Confidential有鉴于此，各方已自行或使得其各自授权代表于文首所载日期签署本独家购买权协议。IN WITNESS WHEREOF, the Parties have executed, or caused their respective duly authorized representatives to execute, this Exclusive Option Agreement as ofthe date first above written.丙方：北京中传视讯科技有限公司（盖章）Party B: Beijing Mobile Vision Technology Co., Ltd. (Seal)签字：By:/s/ Song Xuesong姓名：宋雪松Name:Song Xuesong职务：董事长Title:Chairman of the Board秘密文件 Strictly ConfidentialEX4.17 5 f20f2017ex417_luokung.htm EQUITY INTEREST PLEDGE AGREEMENT BY AND AMONG ZHONGCHUAN TIANXIA INFORMATION TECHNOLOGY(SHENZHEN) CO., LTD., XUESONG SONG, WEILI CHEN, PING WANG, DONGLAI LIU, AND BEIJING MOBILE VISION TECHNOLOGY CO., LTD., DATEDAUGUST 31, 2015Exhibit 4.17股权质押协议Equity Interest Pledge Agreement本股权质押协议（下称"本协议”）由下列各方于年月日在中华人民共和国（下称“中国”）北京签订：This Equity Interest Pledge Agreement (this "Agreement") has been executed by and among the following parties on in Beijing, the People’sRepublic of China (the “China” or “PRC”):甲方：中传天下信息科技（深圳）有限公司（下称“质权人”）Party A: Zhongchuan Tianxia Information Technology (Beijing) Co., Ltd. (“Pledgee”)地址：深圳市南山区高新中三道2号深圳软件园一期五栋401AAddress: 401A, Building 5, Phase 1, Shenzhen Software Park, No.2 Gaoxin Zhongsan Road, Nanshan District, Shenzhen统一社会信用代码： 91440300565701058RUniform Social Credit Code: 91440300565701058R乙方(下称“出质人”)：Party B ( “Pledgors”):a)宋雪松Song Xuesong身份证号码:ID Card No.:b)陈蔚力Chen Weili身份证号码:ID Card No.:1秘密文件 Strictly Confidentialc)王平Wang Ping身份证号码:ID Card No.:d)刘东来Liu Donglai身份证号码:ID Card No.:丙方：北京中传视讯科技有限公司Party C: Beijing Mobile Vision Technology Co., Ltd.地址：北京市朝阳区光华路9号SOHO3QLAB32Address: LAB32, SOHO3Q, No 9, Guanghua Road, Chaoyang District, Beijing统一社会信用代码：9111010576215249XMUniform Social Credit Code: 9111010576215249XM在本协议中，质权人、出质人和丙方以下各称“一方”，合称“各方”。In this Agreement, each of Pledgee, Pledgors and Party C shall be referred to as a "Party" respectively, and they shall be collectively referred to as the"Parties".鉴于：Whereas:1．出质人全部为中国境内居民自然人，共同持有丙方100%的股权。丙方是一家在中国注册成立的、主要从事手机视频技术研发、内容制作和产业化市场推广的有限责任公司。丙方有意在此确认出质人和质权人在本协议下的权利和义务并提供必要的协助登记该质权；All of the Pledgors are natural persons resided in PRC, and collectively hold 100% of the equity interest in Party C. Party C is a limited company registered inChina, mainly engaging in mobile video frequency technology research, development, content creation, sale and related industrialization promotion. Party Cacknowledges the respective rights and obligations of Pledgors and Pledgee under this Agreement, and intends to provide any necessary assistance inregistering the Pledge;2．质权人是一家在中国注册的外商独资企业。质权人与丙方于年月日签订了独家业务合作协议；Pledgee is a whollyforeignowned enterprise registered in China. Pledgee and Party C have executed an Exclusive Business Cooperation Agreement as of [*],[*];3．为了保证丙方全面履行独家业务合作协议项下的义务，出质人以其拥有的全部丙方股权向质权人做出质押担保。To ensure that Party C fully performs its obligations under the Exclusive Business Cooperation Agreement, Pledgors hereby pledge to the Pledgee all of theequity interests they hold in Party C.为了履行业务合作协议的条款，各方商定按照以下条款签订本协议。To perform the provisions of the Business Cooperation Agreement, the Parties have mutually agreed to execute this Agreement upon the following terms.2秘密文件 Strictly Confidential1.定义Definitions除非本协议另有规定，下列词语含义为：Unless otherwise provided herein, the terms below shall have the following meanings:1.1质权：指出质人根据本协议第2条给予质权人的担保物权，即指质权人所享有的，以出质人质押给质权人的股权折价或拍卖、变卖该股权的价款优先受偿的权利。Pledge: shall refer to the security interest granted by Pledgors to Pledgee pursuant to Article 2 of this Agreement, i.e., the right of Pledgee to becompensated on a preferential basis with the conversion, auction or sales price of the Equity Interest.1.2股权：指出质人现在和将来（通过增资和/或转股）合法持有的其在丙方的全部股权权益。Equity Interest: shall refer to all of the equity interest in Party C lawfully, held now and to be held (through capital increase and/or equity transfer)hereafter by Pledgors.1.3质押期限：指本协议第3条规定的期间。Term of Pledge: shall refer to the term set forth in Article 3 of this Agreement.1.4业务合作协议：指丙方与质权人于本协议日签订的独家业务合作协议。Business Cooperation Agreement: shall refer to the Exclusive Business Cooperation Agreement executed by and between Party C and Pledgee on thedate of this Agreement.1.5违约事件：指本协议第7条所列任何情况。Event of Default: shall refer to any of the circumstances set forth in Article 7 of this Agreement.1.6违约通知：指质权人根据本协议发出的宣布违约事件的通知。Notice of Default: shall refer to the notice issued by Pledgee in accordance with this Agreement declaring an Event of Default.3秘密文件 Strictly Confidential2.质权The Pledge作为丙方按时和全额支付业务合作协议项下质权人应得的任何或全部的款项，包括但不限于业务合作协议中规定的咨询和服务费的担保（无论该等费用的到期应付是由于到期日的到来、提前收款的要求或其它原因），以及丙方充分履行其在业务合作协议项下其他所有义务（丙方按时和全额支付业务合作协议项下甲方应得的任何或全部的款项及丙方在业务合作协议项下其他所有义务，以下统称为“被担保债务”）的担保，出质人特此将其现有或将拥有的丙方的全部股权权益质押给质权人。As collateral security for the timely and complete payment and performance when due (whether at stated maturity, by acceleration or otherwise) of any or all ofthe payments due (the “all payments in pledge”) by Party C, including without limitation the consulting and services fees payable to the Pledgee under theBusiness Cooperation Agreement, Pledgors hereby pledge to Pledgee a first security interest in all of Pledgors’ right, title and interest, whether now owned orhereafter acquired by Pledgors, in the Equity Interest of Party C.3.质押期限Term of Pledge3.1本质权自本协议项下的股权出质在相应的工商行政管理机关登记之日起生效，质权有效期持续到业务合作协议下所有丙方欠付质权人的款项结清为止。出质人和丙方应（一）自本协议签署之日起3个工作日内，将本协议的质权登记在丙方股东名册上，并（二）自本协议签署之日起10个工作日内向相应的工商行政管理机关申请登记本协议项下的质权。各方共同确认，为办理股权质押工商登记手续，各方及丙方其他股东应按照丙方所在地工商行政管理部门要求的形式签署、真实反映本协议项下质权信息的《股权质押合同》（以下简称“工商登记质押合同”）提交给工商管理机关，工商登记质押合同中未约定事项，仍以本协议约定为准。出质人和丙方应当按照中国法律法规和有关工商行政管理机关的各项要求，提交所有必要的文件并办理所有必要手续，保证质权在递交申请后尽快获得登记。如果出质人持有的丙方注册资本数额增加（不管是通过直接认缴丙方的增资还是从其他股东处受让股权），各方一致同意将采取一切必要的行动和签署一切必要的文件以按照登记机关的要求完成质权的变更登记，以确保本协议项下的质权的持续有效。The Pledge shall become effective on such date when the pledge of the Equity Interest contemplated herein has been registered’ with relevantadministration for industry and commerce (the “AIC”). The Pledge shall be continuously valid until all payments due under the Business CooperationAgreement have been fulfilled by Party C. Pledgors and Party C shall (1) register the Pledge in the shareholders' register of Party C within 3 businessdays following the execution of this Agreement, and (2) submit an application to the AIC for the registration of the Pledge of the Equity Interestcontemplated herein within 10 business days following the execution of this Agreement. The parties covenant that for the purpose of registration of thePledge, the parties hereto and all other shareholders of Party C shall submit to the AIC the Equity Interest Pledge Contract in the form required by theAIC at the location of Party C which shall truly reflect the information of the Pledge hereunder (the “AIC Pledge Contract”). For matters not specified inthe AIC Pledge Contract, the parties shall be bound by the provisions of this Agreement. Pledgors and Party C shall submit all necessary documentsand complete all necessary procedures, as required by the PRC laws and regulations and the relevant AIC, to ensure that the Pledge of the EquityInterest shall be registered with the AIC as soon as possible after filing. In the event that the amount of registered capital held by Pledgors is increased(either by subscribing increased registered capital from Party C or acquiring equity interest from other shareholders), the Parties hereto agree that theyshall take any necessary action and execute any necessary document to complete the registration of change of Pledge according to the requirement ofAIC so that the Pledge in this Agreement remains effective.4秘密文件 Strictly Confidential3.2质押期限内，如丙方未按业务合作协议交付咨询服务费等费用，质权人有权但无义务按本协议的规定处分质权。During the Term of Pledge, in the event Party C fails to pay the exclusive consulting or service fees in accordance with the Business CooperationAgreement, Pledgee shall have the right, but not the obligation, to dispose of the Pledge in accordance with the provisions of this Agreement.4.质权凭证的保管Custody of Records for Equity Interest subject to Pledge4.1在本协议规定的质押期限内，出质人应将其在丙方的股权出资证明书及记载质权的股东名册交付质权人保管。出质人应在本协议签订之日起一周内将上述股权出资证明书及股东名册交付给质权人。质权人将在本协议规定的全部质押期间一直保管这些项目。During the Term of Pledge set forth in this Agreement, Pledgors shall deliver to Pledgee's custody the capital contribution certificate for the EquityInterest and the shareholders' register containing the Pledge within one week from the execution of this Agreement. Pledgee shall have custody of suchitems during the entire Term of Pledge set forth in this Agreement.4.2在质押期限内，股权所产生的红利应当无条件归质权人所有。Dividends generated by the Equity Interest shall be unconditionally owned by the Pledgee during the Term of Pledge.5秘密文件 Strictly Confidential5.出质人的声明和保证Representations and Warranties of Pledgors5.1出质人是股权唯一的合法所有人。Pledgors are the sole legal and beneficial owners of the Equity Interest.5.2质权人有权以本协议规定的方式处分并转让股权。Pledgee shall have the right to dispose of and transfer the Equity Interest in accordance with the provisions set forth in this Agreement.5.3除本质权之外，出质人未在股权上设置任何其他质押权利或其他担保权益。Except for the Pledge, Pledgors have not placed any security interest or other encumbrance on the Equity Interest.6.出质人的承诺和确认Covenants and Further Agreements of Pledgors6.1在本协议存续期间，所有出质人向质权人承诺，出质人将：All of the Pledgors hereby covenant to the Pledgee, that during the term of this Agreement, Pledgors shall:6.1.1除履行由出质人与质权人、丙方于本协议签署日签订的《独家购买权合同》外，未经质权人事先书面同意，不得转让股权，不得在股权上设立或允许存在任何担保或其他债务负担；not transfer the Equity Interest, place or permit the existence of any security interest or other encumbrance on the Equity Interest, without theprior written consent of Pledgee, except for the performance of the Exclusive Option Agreement executed by Pledgors, the Pledgee and Party Con the execution date of this Agreement;6秘密文件 Strictly Confidential6.1.2遵守并执行所有有关权利质押的法律、法规的规定，在收到有关主管机关就质权发出或制定的通知、指令或建议时，于五日内向质权人出示上述通知、指令或建议，同时遵守上述通知、指令或建议，或按照质权人的合理要求或经质权人同意就上述事宜提出反对意见和陈述；comply with the provisions of all laws and regulations applicable to the pledge of rights, and within 5 days of receipt of any notice, order orrecommendation issued or prepared by relevant competent authorities regarding the Pledge, shall present the aforementioned notice, order orrecommendation to Pledgee, and shall comply with the aforementioned notice, order or recommendation or submit objections andrepresentations with respect to the aforementioned matters upon Pledgee's reasonable request or upon consent of Pledgee;6.1.3将任何可能导致对出质人股权或其任何部分的权利产生影响的事件或收到的通知，以及可能改变出质人在本协议中的任何保证、义务或对出质人履行其在本协议中义务可能产生影响的任何事件或收到的通知及时通知质权人。promptly notify Pledgee of any event or notice received by Pledgors that may have an impact on Pledgee's rights to the Equity Interest or anyportion thereof, as well as any event or notice received by Pledgors that may have an impact on any guarantees and other obligations ofPledgors arising out of this Agreement.6.2出质人同意，质权人按本协议条款取得的对质权享有的权利，不应受到出质人或出质人的继承人或出质人之委托人或任何其他人通过法律程序的中断或妨害。Pledgors agree that the rights acquired by Pledgee in accordance with this Agreement with respect to the Pledge shall not be interrupted or harmed byPledgors or any heirs or representatives of Pledgors or any other persons through any legal proceedings.7秘密文件 Strictly Confidential6.3出质人向质权人保证，为保护或完善本协议对偿付业务合作协议项下被担保债务的担保，出质人将诚实签署、并促使其他与质权有利害关系的当事人签署质权人所要求的所有的权利证书、契约和/或履行并促使其他有利害关系的当事人履行质权人所要求的行为，并为本协议赋予质权人之权利、授权的行使提供便利，与质权人或其指定的人(自然人/法人)签署所有的有关股权所有权的文件，并在合理期间内向质权人提供其认为需要的所有的有关质权的通知、命令及决定。To protect or perfect the security interest granted by this Agreement for payment of all payment in pledge under the Business Cooperation Agreement,Pledgors hereby undertake to execute in good faith and to cause other parties who have an interest in the Pledge to execute all certificates, agreements,deeds and/or covenants required by Pledgee. Pledgors also undertake to perform and to cause other parties who have an interest in the Pledge toperform actions required by Pledgee, to facilitate the exercise by Pledgee of its rights and authority granted thereto by this Agreement, and to enter intoall relevant documents regarding ownership of Equity Interest with Pledgee or designee(s) of Pledgee (natural persons/legal persons). Pledgorsundertake to provide Pledgee within a reasonable time with all notices, orders and decisions regarding the Pledge that are required by Pledgee.6.4出质人向质权人保证，出质人将遵守、履行本协议项下所有的保证、承诺、协议、陈述及条件。如出质人不履行或不完全履行其保证、承诺、协议、陈述及条件，出质人应赔偿质权人由此遭受的一切损失。Pledgors hereby undertake to comply with and perform all guarantees, promises, agreements, representations and conditions under this Agreement. Inthe event of failure the whole or partial performance of its guarantees, promises, agreements, representations and conditions, Pledgors shall indemnifyPledgee for all losses resulting therefrom.8秘密文件 Strictly Confidential7.违约事件Event of Default7.1下列事项均被视为违约事件：The following circumstances shall be deemed Event of Default:7.1.1丙方未能按期、完整履行任何业务合作协议项下责任，包括但不限于丙方未能按期足额支付业务合作协议项下的应付的被担保债务或有违反该协议其他义务的行为；Party C fails to fully and timely fulfill any liabilities under the Business Cooperation Agreement, including without limitation failure to pay infull any of the all payment in pledge payable under the Business Cooperation Agreement or breaches any other obligations of Party Cthereunder;7.1.2出质人或丙方实质违反本协议的任何条款；Pledgors or Party C have committed a material breach of any provisions of this Agreement;7.1.3除本协议第6.1.1条的约定外，出质人舍弃出质的股权或未获得质权人书面同意而擅自转让或意图转让出质的股权；和Except as expressly stipulated in Section 6.1.1, Pledgors transfers or purports to transfer or abandons the Equity Interest pledged or assignsthe Equity Interest pledged without the written consent of Pledgee; and7.1.4丙方的继承人或代管人只能履行部分或拒绝履行业务合作协议项下的支付责任。The successor or custodian of Party C is capable of only partially perform or refuses to perform the payment obligations under the BusinessCooperation Agreement.9秘密文件 Strictly Confidential7.2如知道或发现本第7.1条所述的任何事项或可能导致上述事项的事件已经发生，出质人应立即以书面形式通知质权人。Upon notice or discovery of the occurrence of any circumstances or event that may lead to the aforementioned circumstances described in Section 7.1,Pledgors shall immediately notify Pledgee in writing accordingly.7.3除非第7.1部分下的违约事件在质权人向出质人发出要求其修补此违约行为通知后的二十（20）天之内已经按质权人要求获得救济，质权人在其后的任何时间，可向出质人发出书面违约通知，要求依据第8部分履行其处理股权的权利。Unless an Event of Default set forth in this Section 7.1 has been successfully resolved to Pledgee's satisfaction within twenty (20) days after the Pledgeedelivers a notice to the Pledgors requesting ratification of such Event of Default, Pledgee may issue a Notice of Default to Pledgors in writing at any timethereafter, demanding the Pledgors to immediately dispose of the Pledge in accordance with the provisions of Article 8 of this Agreement.8.质权的行使Exercise of Pledge8.1在被担保债务被全部清偿或履行前，未经质权人书面同意，出质人不得转让本质权和其拥有的丙方股权。Prior to the full payment of all payments in pledge, without the Pledgee's written consent, Pledgors shall not assign the Pledge or the Equity Interest inParty C.8.2在质权人行使其质押权利时，质权人可以向出质人发出书面违约通知。Pledgee may issue a Notice of Default to Pledgors when exercising the Pledge.10秘密文件 Strictly Confidential8.3在质权人行使其质押权利时，根据中国有关法律的规定，质权人有权按照法定程序处置质押股权。仅在中国法律允许的范围内，对于处置的所得，质权人无需给付出质人；除非中国法律另有规定，出质人特此放弃其可能有的能向质权人要求任何质押股权处置所得的权利；同样，出质人对质权人在该质押股权处置后的亏损也不承担任何义务。When the Pledgor exercises the pledge right, Pledgee is entitled to dispose of the Equity Interest pledged in accordance with applicable PRC laws. Onlyto the extent permitted under applicable PRC laws, Pledgee has no obligation to account to Pledgors for proceeds of disposition of the Equity Interest.Unless otherwise required by PRC laws, Pledgors hereby waive any rights it may have to demand any such accounting from Pledgee; Likewise, in suchcircumstance Pledgors shall have no obligation to Pledgee for any deficiency remaining after such disposition of the Equity Interest pledged.8.4质权人依照本协议处分质权时，出质人和丙方应予以必要的协助，以使质权人实现其质权。When Pledgee disposes of the Pledge in accordance with this Agreement, Pledgors and Party C shall provide necessary assistance to enable Pledgee toenforce the Pledge in accordance with this Agreement.9.转让Assignment9.1除非经质权人事先同意，出质人无权赠予或转让其在本协议项下的权利义务。Without Pledgee's prior written consent, Pledgors shall not have the right to assign or delegate its rights and obligations under this Agreement.11秘密文件 Strictly Confidential9.2本协议对出质人及其继任人和经许可的受让人均有约束力，并且对质权人及每一继任人和受让人有效。This Agreement shall be binding on Pledgors and their successors and permitted assigns, and shall be valid with respect to Pledgee and each of itssuccessors and assigns.9.3经出质人同意，质权人可以在任何时候将其在业务合作协议项下的所有或任何权利和义务转让给其指定的关联方（自然人/法人），在这种情况下，受让人应享有和承担本协议项下质权人享有和承担的权利和义务，如同其作为原协议方应享有和承担的一样。质权人转让业务合作协议项下的权利和义务时，应质权人要求，出质人应就此转让签署有关协议和/或文件。Upon the Pledgors’ agreement, Pledgee may assign any or all of its rights and obligations under the Business Cooperation Agreement to its designee(s)(natural/legal persons) at any time, in which case the assigns shall have the rights and obligations of Pledgee under this Agreement, as if it were theoriginal party to this Agreement. When the Pledgee assigns the rights and obligations under the Business Cooperation Agreement, upon Pledgee'srequest, Pledgors shall execute relevant agreements or other documents relating to such assignment.9.4因转让所导致的质权人变更后，应质权人要求，出质人应与新的质权人签订一份内容与本协议一致的新质押协议，并在相应的工商行政管理机关进行登记。In the event of a change in Pledgee due to an assignment, Pledgors shall, at the request of Pledgee, execute a new pledge agreement with the newpledgee on the same terms and conditions as this Agreement, and register the same with the relevant AIC.12秘密文件 Strictly Confidential9.5出质人应严格遵守本协议和各方单独或共同签署的其他有关协议的规定，包括独家购买权合同和对质权人的授权委托书，履行各协议项下的义务，并不进行任何足以影响协议的有效性和可强制执行性的作为/不作为。除非根据质权人的书面指示，出质人不得行使其对质押股权还留存的权利。Pledgors shall strictly abide by the provisions of this Agreement and other contracts jointly or separately executed by the Parties hereto or any of them,including the Exclusive Option Agreement and the Power of Attorney granted to Pledgee, perform the obligations hereunder and thereunder, and refrainfrom any action/omission that may affect the effectiveness and enforceability thereof. Any remaining rights of Pledgors with respect to the EquityInterest pledged hereunder shall not be exercised by Pledgors except in accordance with the written instructions of Pledgee.10.终止Termination在被担保债务被全部清偿或履行完毕之后，本质权人应在尽早合理可行的时间内办理或配合办理解除质押的手续，出质人与丙方应提供相应的配合与协助。Upon the full payment of all payments in pledge under the Business Cooperation Agreement a, Pledgor shall then, with the assistance of Party B and Party C,go through the procedures of cancellation of pledge rights at a reasonable time as soon as practicable.11.手续费及其他费用Handling Fees and Other Expenses一切与本协议有关的费用及实际开支，其中包括但不限于法律费用、工本费、印花税以及任何其他税收、费用等全部由丙方承担。All fees and out of pocket expenses relating to this Agreement, including but not limited to legal costs, costs of production, stamp tax and any other taxes andfees, shall be borne by Party C.13秘密文件 Strictly Confidential12.保密责任Confidentiality各方承认及确定有关本协议、本协议内容，以及彼此就准备或履行本协议而交换的任何口头或书面资料均被视为保密信息。各方应当对所有该等保密信息予以保密，而在未得到另一方书面同意前，不得向任何第三者披露任何保密信息，惟下列信息除外：(a)公众人士知悉或将会知悉的任何信息（惟并非由接受保密信息之一方擅自向公众披露）；(b)根据适用法律法规、股票交易规则、或政府部门或法院的命令而所需披露之任何信息；或(c)由任何一方就本协议所述交易而需向其股东、投资者、法律或财务顾问披露之信息，而该股东、法律或财务顾问亦需遵守与本条款相类似之保密责任。如任何一方工作人员或聘请机构的泄密均视为该方的泄密，需依本协议承担违约责任。无论本协议以任何理由终止，本条款仍然生效。The Parties acknowledge that the existence and the terms of this Agreement and any oral or written information exchanged between the Parties in connectionwith the preparation and performance this Agreement are regarded as confidential information. Each Party shall maintain confidentiality of all such confidentialinformation, and without obtaining the written consent of the other Party, it shall not disclose any relevant confidential information to any third parties, exceptfor the information that: (a) is or will be in the public domain (other than through the receiving Party’s unauthorized disclosure); (b) is under the obligation tobe disclosed pursuant to the applicable laws or regulations, rules of any stock exchange, or orders of the court or other government authorities; or (c) isrequired to be disclosed by any Party to its shareholders, investors, legal counsels or financial advisors regarding the transaction contemplated hereunder,provided that such shareholders, investors, legal counsels or financial advisors shall be bound by the confidentiality obligations similar to those set forth inthis Section. Disclosure of any confidential information by the staff members or agencies hired by any Party shall be deemed disclosure of such confidentialinformation by such Party, which Party shall be held liable for breach of this Agreement. This Section shall survive the termination of this Agreement for anyreason.14秘密文件 Strictly Confidential13.适用法律和争议的解决Governing Law and Resolution of Disputes13.1本协议的订立、效力、解释、履行、修改和终止以及争议的解决均适用中国法律。The execution, effectiveness, construction, performance, amendment and termination of this Agreement and the resolution of disputes hereunder shallbe governed by the laws of China.13.2因解释和履行本协议而发生的任何争议，本协议各方应首先通过友好协商的方式加以解决。如果在一方向其他方发出要求协商解决的书面通知后30天之内争议仍然得不到解决，则任何一方均可将有关争议提交给中国国际经济贸易仲裁委员会，由该会按照其仲裁规则仲裁解决。仲裁应在北京进行，使用之语言为中文。仲裁裁决是终局性的，对各方均有约束力。In the event of any dispute with respect to the construction and performance of this Agreement, the Parties shall first resolve the dispute throughfriendly negotiations. In the event the Parties fail to reach an agreement on the dispute within 30 days after either Party's request to the other Parties forresolution of the dispute through negotiations, either Party may submit the relevant dispute to the China International Economic and Trade ArbitrationCommission for arbitration, in accordance with its Arbitration Rules. The arbitration shall be conducted in Beijing, and the language used in arbitrationshall be Chinese. The arbitration award shall be final and binding on all Parties.13.3因解释和履行本协议而发生任何争议或任何争议正在进行仲裁时，除争议的事项外，本协议各方仍应继续行使各自在本协议项下的其他权利并履行各自在本协议项下的其他义务。Upon the occurrence of any disputes arising from the construction and performance of this Agreement or during the pending arbitration of any dispute,except for the matters under dispute, the Parties to this Agreement shall continue to exercise their respective rights under this Agreement and performtheir respective obligations under this Agreement.15秘密文件 Strictly Confidential14.通知Notices14.1本协议项下要求或发出的所有通知和其他通信应通过专人递送、挂号邮寄、邮资预付或商业快递服务或传真的方式发到该方下列地址。每一通知还应再以电子邮件送达。该等通知视为有效送达的日期按如下方式确定：All notices and other communications required or permitted to be given pursuant to this Agreement shall be delivered personally or sent by registeredmail, postage prepaid, by a commercial courier service or by facsimile transmission to the address of such party set forth below. A confirmation copy ofeach notice shall also be sent by Email. The dates on which notices shall be deemed to have been effectively given shall be determined as follows:14.1.1通知如果是以专人递送、快递服务或挂号邮寄、邮资预付发出的，则以于设定为通知的地址在接收或拒收之日为有效送达日。Notices given by personal delivery, by courier service or by registered mail, postage prepaid, shall be deemed effectively given on the date ofreceipt or refusal at the address specified for notices.14.1.2通知如果是以传真发出的，则以成功传送之日为有效送达日（应以自动生成的传送确认信息为证）。Notices given by facsimile transmission shall be deemed effectively given on the date of successful transmission (as evidenced by anautomatically generated confirmation of transmission).16秘密文件 Strictly Confidential14.2为通知的目的，各方地址如下：For the purpose of notices, the addresses of the Parties are as follows:甲方：中传天下信息科技（深圳）有限公司Party A: Zhongchuan Tianxia Information Technology (Shenzhen) Co., Ltd.地址：深圳市南山区高新中三道2号深圳软件园一期五栋401AAddress: 401A, Building 5, Phase 1, Shenzhen Software Park, No.2 Gaoxin Zhongsan Road, Nanshan District, Shenzhen.收件人：洪婷Attn: Hong Ting乙方：Party B:a)宋雪松Song Xuesong地址：125.Expenses, including legal fees, incurred by a director in defending any legal, administrative or investigative proceedings may be paid by the Company inadvance of the final disposition of such proceedings upon receipt of an undertaking by or on behalf of the director to repay the amount if it shall ultimatelybe determined that the director is not entitled to be indemnified by the Company in accordance with these Articles.126.Expenses, including legal fees, incurred by a former director in defending any legal, administrative or investigative proceedings may be paid by theCompany in advance of the final disposition of such proceedings upon receipt of an undertaking by or on behalf of the former director to repay the amountif it shall ultimately be determined that the director is not entitled to be indemnified by the Company in accordance with these Articles.127.The indemnification and advancement of expenses provided by, or granted pursuant to, these Articles is not exclusive of any other rights to which theperson seeking indemnification of advancement of expenses may be entitled under any agreement, resolution of members, resolution of disinteresteddirectors or otherwise, both as to acting in the person’s official capacity and as to acting in another capacity while serving as a director of the Company.128.If a person to be indemnified has been successful in defence of any proceedings referred to above the person is entitled to be indemnified against allexpenses, including legal fees, and against all judgments, fines and amounts paid in settlement and reasonably incurred by the person in connection withthe proceedings.129.The Company may purchase and maintain insurance in relation to any person who is or was a director, an officer or a liquidator of the Company, or who atthe request of the Company is or was serving as a director, an officer or a liquidator of, or in any other capacity is or was acting for, another body corporateor a partnership, joint venture, trust or other enterprise, against any liability asserted against the person and incurred by the person in that capacity,whether or not the Company has or would have had the power to indemnify the person against the liability as provided in these Articles.SEAL130.The Company shall have a Seal and may have more than one Seal. References herein to the Seal shall be references to every Seal which shall have beenduly adopted by resolution of directors. The directors shall provide for the safe custody of the Seal and for an imprint thereof to be kept at the office of theregistered agent of the Company. Except as otherwise expressly provided herein, the Seal when affixed to any written instrument, shall be witnessed andattested to by the signature of a director or any other person so authorized from time to time by resolution of directors. Such authorization may be before orafter the Seal is affixed, may be general or specific and may refer to any number of sealings. The Directors may provide for a facsimile of the Seal and of thesignature of any director or authorized person which may be reproduced by printing or other means on any instrument and it shall have the same force andvalidity as if the Seal had been affixed to such instrument and the same had been signed as hereinbefore described.21DISTRIBUTIONS131.The directors of the Company may by resolution authorise a distribution by the Company at any time and of any amount and to any members they think fitif they are satisfied on reasonable grounds that immediately after the distribution;a.the value of the Company’s assets will exceed its liabilities, andb.the Company will be able to pay its debts as they fall due.132.A resolution of the directors passed under the preceding Article shall contain a statement that, in the opinion of the directors, immediately after thedistribution the value of the Company’s assets will exceed its liabilities, and the Company will be able to pay its debts as they fall due.133.If, after a distribution is authorised and before it is made, the directors cease to be satisfied on reasonable grounds that the Company will, immediately afterthe distribution satisfy the solvency test, any distribution made by the Company is deemed not to have been authorised.134.If, by virtue of the preceding Article, a distribution is deemed not to have been authorised, a director who;a.ceased, after authorisation but before the making of the distribution, to be satisfied on reasonable grounds for believing that the company wouldsatisfy the solvency test immediately after the distribution is made; andb.failed to take reasonable steps to prevent the distribution being made;is personally liable to the company to repay to the company so much of the distribution as is not able to be recovered from members.135.A distribution made to a member at a time when the company did not, immediately after the distribution, satisfy the solvency test may be recovered by thecompany from the member unless;a.the member received the distribution in good faith and without knowledge of the company’s failure to satisfy the solvency test;b.the member has altered his position in reliance on the validity of the distribution; andc.it would be unfair to require repayment in full or at all.DISTRIBUTIONS BY WAY OF DIVIDEND136.The Company may by a resolution of directors declare a distribution by way of dividend and pay such distribution in money, shares or other property. Inthe event that distributions by way of dividend are paid in specie the directors shall have responsibility for establishing and recording in the resolution ofdirectors authorizing the distribution by way of dividend, a fair and proper value for the assets to be so distributed.137.The directors may from time to time pay to the members such interim distributions by way of dividend as appear to the directors to be justified by theprofits of the Company.138.The directors may, before declaring any distribution by way of dividend, set aside out of the profits of the Company such sum as they think proper as areserve fund, and may invest the sum so set aside as a reserve fund upon such securities as they may select.139.Notice of any distribution by way of dividend that may have been declared shall be given to each member in the manner hereinafter mentioned and alldistributions by way of dividend unclaimed for 3 years after having been declared may be forfeited by resolution of directors for the benefit of theCompany.140.No distribution by way of dividend shall bear interest as against the Company and no distribution by way of dividend shall be paid on treasury shares orshares held by another company of which the Company holds, directly or indirectly, shares having more than 50 percent of the vote in electing directors.22141.A share issued as a distribution by way of dividend by the Company shall be treated for all purposes as having been issued for money equal to the valuedetermined by resolution of the directors. In the absence of fraud the decision of the directors as to the value of the share is conclusive unless a questionof law is involved.142.A division of the issued and outstanding shares of a class or series of shares into a larger number of shares of the same class or series having aproportionately smaller par value does not constitute a distribution by way of dividend of shares.ACCOUNTS AND AUDIT143.The Company may by resolution of members call for the directors to prepare periodically a profit and loss account and a balance sheet. The profit and lossaccount and balance sheet shall be drawn up so as to give respectively a true and fair view of the profit and loss of the Company for the financial periodand a true and fair view of the state of affairs of the Company as at the end of the financial period.144.The Company may by resolution of members call for the accounts to be examined by auditors.145.Subject to the rules of the Designated Stock Exchange, the first auditors shall be appointed by resolution of directors; subsequent auditors shall beappointed by the Audit Committee and shall hold office until the Audit Committee appoint another independent auditor.146.Subject to the rules of the Designated Stock Exchange, the remuneration of the auditors of the Company shall be fixed by the Audit Committee.147.The auditors shall examine each profit and loss account and balance sheet required to be served on every member of the Company or laid before a meetingof the members of the Company and shall state in a written report whether or nota.in their opinion the profit and loss account and balance sheet give a true and fair view respectively of the profit and loss for the period covered bythe accounts, and of the state of affairs of the Company at the end of that period; andb.all the information and explanations required by the auditors have been obtained.148.The report of the auditors shall be annexed to the accounts and shall be read at the meeting of members at which the accounts are laid before the Companyor shall be served on the members.149.Every auditor of the Company shall have a right of access at all times to the books of account and vouchers of the Company, and shall be entitled to requirefrom the directors and officers of the Company such information and explanations as he thinks necessary for the performance of the duties of the auditors.150.The auditors of the Company shall be entitled to receive notice of, and to attend any meetings of members of the Company at which the Company’s profitand loss account and balance sheet are to be presented.NOTICES151.Any notice, information or written statement to be given by the Company to members may be served in any way by which it can reasonably be expected toreach each member or by mail addressed to each member at the address shown in the share register.152.Any summons, notice, order, document, process, information or written statement to be served on the Company may be served by leaving it, or by sendingit by registered mail addressed to the Company, at its registered office, or by leaving it with, or by sending it by registered mail to, the registered agent ofthe Company.153.Service of any summons, notice, order, document, process, information or written statement to be served on the Company may be proved by showing thatthe summons, notice, order, document, process, information or written statement was delivered to the registered office or the registered agent of theCompany or that it was mailed in such time as to admit to its being delivered to the registered office or the registered agent of the Company in the normalcourse of delivery within the period prescribed for service and was correctly addressed and the postage was prepaid.23PENSION AND SUPERANNUATION FUNDS154.The directors may establish and maintain or procure the establishment and maintenance of any noncontributory or contributory pension orsuperannuation funds for the benefit of, and give or procure the giving of donations, gratuities, pensions, allowances or emoluments to, any persons whoare or were at any time in the employment or service of the Company or any company which is a subsidiary of the Company or is allied to or associated withthe Company or with any such subsidiary, or who are or were at any time directors or officers of the Company or of any such other company as aforesaid orwho hold or held any salaried employment or office in the Company or such other company, or any persons in whose welfare the Company or any suchother company as aforesaid is or has been at any time interested, and to the wives, widows, families and dependents of any such person, and may makepayments for or towards the insurance of any such persons as aforesaid, and may do any of the matters aforesaid either alone or in conjunction with anysuch other company as aforesaid. Subject always to the proposal being approved by resolution of members, a director holding any such employment oroffice shall be entitled to participate in and retain for his own benefit any such donation, gratuity, pension allowance or emolument.VOLUNTARY WINDING UP AND DISSOLUTION155.The Company may voluntarily commence to wind up and dissolve by a resolution of members but if the Company has never issued shares it mayvoluntarily commence to wind up and dissolve by resolution of directors.CONTINUATION156.The Company may by resolution of members or by a resolution passed unanimously by all directors of the Company continue as a company incorporatedunder the laws of a jurisdiction outside the British Virgin Islands in the manner provided under those laws.ARBITRATION157.Whenever any difference arises between the Company on the one hand and any of the members or their executors, administrators or assigns on the otherhand, touching the true intent and construction or the incidence or consequences of these Articles or of the Act, touching anything done or executed,omitted or suffered in pursuance of the Act or touching any breach or alleged breach or otherwise relating to the premises or to these Articles, or to anyAct or Ordinance affecting the Company or to any of the affairs of the Company such difference shall, unless the parties agree to refer the same to a singlearbitrator, be referred to 2 arbitrators one to be chosen by each of the parties to the difference and the arbitrators shall before entering on the referenceappoint an umpire.158.If either party to the reference makes default in appointing an arbitrator either originally or by way of substitution (in the event that an appointed arbitratorshall die, be incapable of acting or refuse to act) for 10 days after the other party has given him notice to appoint the same, such other party may appoint anarbitrator to act in the place of the arbitrator of the defaulting party.We, Portcullis TrustNet (BVI) Limited of Portcullis TrustNet Chambers, P.O. Box 3444, Road Town, Tortola, British Virgin Islands for the purpose of incorporating aBVI Business Company under the laws of the British Virgin Islands hereby sign these Articles of Association the 27th day of October, 2009.Incorporator/s/ Nicole WheatleyPortcullis TrustNet (BVI) LimitedPortcullis TrustNet ChambersP.O. Box 3444Road Town, TortolaBritish Virgin Islands(Sgd. Nicole Wheatley)24EX4.15 3 f20f2017ex415_luokung.htm EXCLUSIVE BUSINESS COOPERATION AGREEMENT BY AND BETWEEN ZHONGCHUAN TIANXIA INFORMATIONTECHNOLOGY (SHENZHEN) CO., LTD., AND BEIJING MOBILE VISION TECHNOLOGY CO., LTD., DATED AUGUST 31, 2015Exhibit 4.15独家业务合作协议Exclusive Business Cooperation Agreement本独家业务合作协议（下称“本协议”）由以下双方于年月日在中华人民共和国（下称“中国”）北京市签署。This Exclusive Business Cooperation Agreement (this “Agreement”) is made and entered into by and between the following parties on in Beijing, thePeople’s Republic of China (“China” or the “PRC”).甲方：中传天下信息科技（深圳）有限公司Party A: Zhongchuan Tianxia Information Technology (Shenzhen) Co., Ltd.地址：深圳市南山区高新中三道2号深圳软件园一期五栋401A Address: 401A, Building 5, Phase 1, Shenzhen Software Park, No.2 Gaoxin Zhongsan Road, Nanshan District, Shenzhen统一社会信用代码：91440300565701058R Uniform Social Credit Code: 91440300565701058R乙方：北京中传视讯科技有限公司Party B: Beijing Mobile Vision Technology Co., Ltd.地址：北京市朝阳区光华路9号SOHO3QLAB32Address: LAB32, SOHO3Q, No 9, Guanghua Road, Chaoyang District, Beijing统一社会信用代码：9111010576215249XMUniform Social Credit Code: 9111010576215249XM甲方和乙方以下各称为“一方”，统称为“双方”。Each of Party A and Party B shall be hereinafter referred to as a “Party” respectively, and as “Parties” collectively.1秘密文件Strictly Confidential鉴于：Whereas,1.甲方是一家在中国注册的外商独资企业，拥有丰富的技术研发和产业化推广相关的管理和投资经验，并提供相关的技术支持和咨询服务；Party A is a whollyforeignowned enterprise established in China, which has rich experience in technology research development and industrializationpromotion management and investment, and provides relevant technical support and consulting services;2.乙方是一家在中国成立的有限责任公司，经中国有关政府部门批准依法主要从事手机视频技术开发、内容制作及市场推广；Party B is a limited company in China, mainly engages in mobile video technology research, development, content creation, sale and related industrialpromotion as approved by the relevant governmental authorities in China;3.甲方同意利用其技术、人员和信息优势，在本协议期间向乙方提供有关手机视频技术开发、内容制作及市场推广以及未来扩大业务规模和业务范围时乙方所需的技术支持、技术咨询等相关服务，乙方同意接受甲方或其指定方按本协议条款的规定提供的各种服务。Party A is willing to provide Party B with technology supports and technology consulting services in connection with mobile video technology research,development, content creation, sale and related industrial promotion and such services in connection with Party B’s extension of business scale orbroadening of businesses during the term of this Agreement, utilizing its advantages in technology, human resources, and information, and Party B iswilling to accept such services provided by Party A or Party A's designee(s), each on the terms set forth herein.2秘密文件Strictly Confidential据此，甲方和乙方经协商一致，达成如下协议：Now, therefore, through mutual discussion, the Parties have reached the following agreements:1.服务提供Services Provided by Party A1.1按照本协议条款和条件，乙方在此委任甲方在本协议期间作为乙方的独家服务提供者向乙方提供全面的和手机视频技术开发、内容制作及市场推广相关以及未来扩大业务规模和业务范围时乙方所需的技术支持、业务支持和相关咨询服务，具体内容包括但不限于以下内容：Party B hereby appoints Party A as Party B's exclusive services provider to provide Party B with complete technical support, business supportand related consulting services in connection with mobile video technology research, development, content creation, sale and related industrialpromotion and such services in connection with Party B’s extension of business scale or broadening of businesses during the term of thisAgreement, in accordance with the terms and conditions of this Agreement, which may include but not limited to:1.1.1为乙方提供其手机视频技术开发、内容制作及市场推广业务所需的一切服务支持，为乙方提供相当于包括总经理、行政人员、管理人员、筹划部门、商业运营、人力资源、财务、会计以及与乙方业务相关的一切业务操作所需人员所能提供的服务内容；managing all aspects of Party B’s business of mobile video technology research, development, content creation, sale and relatedindustrial promotion. In this capacity, Party A will procure or engage for Party B the services of a general manager and other managementstaff, including but not limited to personnel responsible for all administration, operations, planning, business development, humanresources, finance, accounting and other operations related to the Business of Party B;3秘密文件Strictly Confidential1.1.2为乙方制定全部的商业计划、销售目标，并为优化执行该等商业计划设计和建立相应的系统及操作程序；developing all business plans and sales projections of Party B, and for developing and establishing systems and procedures for optimumexecution of the business plans;1.1.3为乙方申请手机视频技术及内容制作相关专利提供咨询服务和支持；consulting services and support in connection with Party B’s applying for mobile video technology related patents and content creation;1.1.4为乙方手机视频技术产业化的发展方向、规模、品牌提升提供咨询服务；consulting services in connection with the development directions, size and business brands promotion of Party B’s mobile videotechnology industrialization;4秘密文件Strictly Confidential1.1.5为乙方提供与业务相关的办公、生产和销售服务，为乙方租赁场所，建立业务相关的系统和程序，满足乙方的其他要求；procuring or obtaining for Party B all office, production and distribution services related to the Business. It shall procure or obtainappropriate leases, establish systems and procedures needed to operate the business, fulfill orders for services;1.1.6尽最大努力为乙方建立手机视频技术销售市场，根据甲方为乙方制定的商业计划及销售目标代表乙方获取客户订单，同时为乙方提供与业务相关的客户服务，建立向客户开具票据的程序和与会计相关的托收服务。using its best efforts to establish mobile video technology related marketing and other structures to obtain orders for services &products from customers on behalf of Party B in accordance with Party B’s business plans, sales projections and objectives (asdeveloped by Party A) and procure or obtain customer services required in connection with the Business. It shall also establishprocedures for invoicing customers, and establish collection services with respect to accounts;1.1.7就乙方的劳动用工方面提供咨询服务和支持，包括但不限于，组织实施对乙方业务人员、行政人员、管理人员等人员进行培训和考核，协助建立健全的人力资源管理制度和实现人力资源的良好配置；consulting services and support regarding labor system of Party B, including but without limitation to labor training and evaluation ofsales person, administrative staff and management person etc. and establishment of human resources management system to well;5秘密文件Strictly Confidential1.1.8提供乙方需要的客户数据统计、分析及相关数据库的建设和维护等咨询服务；providing Party B with compile and analysis of client data and consulting services of establishment and maintenance of data base;1.1.9提供乙方需要的软件和相关技术支持服务；providing software Party B requires and other technical support;1.1.10接受乙方委托，对乙方的手机视频技术研发和产业化推广业务经营进行指导和管理；guiding and management on Party B’s business of mobile video technology research and development and related industrial promotionoperation according to Party B’s commission;1.1.11当乙方业务规模发展或业务范围扩大需要时，购买乙方业务经营需要的设备；in the event of the demand of Party B’s development of business scale or broadening of businesses, purchase the equipments which itneeds for the operation of its business;1.1.12当乙方业务规模发展或业务范围扩大需要时，完成乙方项目中的全部或部分工作；in the event of the demand of Party B’s development of business scale or broadening of businesses, complete the work of Party B’sproject in whole or in party;6秘密文件Strictly Confidential1.1.13当乙方业务规模发展或业务范围扩大需要时，开发新技术；in the event of the demand of Party B’s development of business scale or broadening of businesses, develop new technology;1.1.14乙方委托甲方，且甲方接受委托提供的其他服务。other services Party B appoints Party A to provide and Party A agrees to provide.1.2乙方接受甲方的咨询和服务。乙方进一步同意，除非经甲方事先书面同意，在本协议期间，就本协议约定的服务或其他事宜，乙方不得直接或间接地从任何第三方获得任何与本协议相同或类似的咨询和/或服务，并不得与任何第三方就本协议所述事项建立任何类似的合作关系。双方同意，甲方可以指定其他方（该被指定方可以与乙方签署本协议第1.3条描述的某些协议）为乙方提供本协议约定的服务和/或支持。Party B agrees to accept all the consultations and services provided by Party A. Party B further agrees that unless with Party A's prior writtenconsent, during the term of this Agreement, Party B shall not directly or indirectly accept the same or any similar consultations and/or servicesprovided by any third party and shall not establish similar corporation relationship with any third party regarding the matters contemplated by thisAgreement. Party A may appoint other parties, who may enter into certain agreements described in Section 1.3 with Party B, to provide Party Bwith the consultations and/or services under this Agreement.7秘密文件Strictly Confidential1.3服务的提供方式Service Providing Methodology1.3.1双方同意在本协议有效期内，视情况而定，乙方可以与甲方或甲方指定的其他方进一步签订技术服务协议和/或咨询服务协议，对各项业务培训、技术服务、咨询服务的具体内容、方式、人员、收费等进行约定。Parties agree that during the term of this Agreement, where necessary, Party B may enter into further technical service agreements and/orconsulting service agreements with Party A or any other party designated by Party A, which shall provide the specific contents, manner,personnel, and fees for the specific technical services and consulting services.1.3.2为更好地履行本协议，双方同意，在甲方认为必要时，乙方应在本协议有效期内与甲方或甲方指定的其他方根据业务进展需要随时签署协议，由甲方或其指定方向乙方提供服务。To fulfill this Agreement, Parties agree that during the term of this Agreement, where Party A deems necessary, Party B shall enter intoagreements with Party A or any other party designated by Party A which shall set forth that Party A or any other party designated byParty A provide services to Party B based on the needs of the business of Party B.8秘密文件Strictly Confidential2.服务的价格和支付方式The Calculation and Payment of the Service Fees双方同意，就甲方提供的服务，乙方应向甲方支付服务费（“服务费”）。服务费不应低于乙方税后利润的80%。服务费应当按季支付；经甲方事先书面同意，服务费可以根据乙方的经营需要进行调整。Both Parties agree that, in consideration of the services provided by Party A, Party B shall pay Party A fees (the “Service Fees”), which shall not be lessthan 80% of Party B’s aftertax profits . The Service Fees shall be due and payable on a quarterly basis; upon the prior written consent by Party A, the rateof Service Fees may be adjusted pursuant to the operational needs of Party B.3.知识产权和保密条款Intellectual Property Rights and Confidentiality Clauses3.1在中国法律允许的范围内，甲方对履行本协议而产生或创造的任何权利、所有权、权益和所有知识产权包括但不限于著作权、专利权、专利申请权、软件、技术秘密、商业机密及其他均享有独占的和排他的权利和利益。乙方须签署所有适当的文件，采取所有适当的行动，递交所有的文件和/或申请，提供所有适当的协助，以及做出所有其他依据甲方的自行决定认为是必要的行为，以将任何对该等知识产权的所有权、权利和权益赋予甲方，和/或完善对甲方此等知识产权权利的保护。To the extent permitted under the PRC laws, Party A shall have exclusive and proprietary rights and interests in all rights, ownership, interests andintellectual properties arising out of or created during the performance of this Agreement, including but not limited to copyrights, patents, patentapplications, software, technical secrets, trade secrets and others. Party B shall execute all appropriate documents, take all appropriate actions,submit all filings and/or applications, render all appropriate assistance and otherwise conduct whatever is necessary deemed as by Party A in itssole discretion for the purposes of vesting any ownership, right or interest of any such intellectual property rights in Party A, and/or perfectingthe protections for any such intellectual property rights in Party A.9秘密文件Strictly Confidential3.2双方承认及确定有关本协议、本协议内容，以及彼此就准备或履行本协议而交换的任何口头或书面资料均被视为保密信息。双方应当对所有该等保密信息予以保密，而在未得到另一方书面同意前，不得向任何第三者披露任何保密信息，惟下列信息除外：(a)公众人士知悉或将会知悉的任何信息（惟并非由接受保密信息之一方擅自向公众披露）；(b)根据适用法律法规、股票交易规则、或政府部门或法院的命令而所需披露之任何信息；或(c)由任何一方就本协议所述交易而需向其股东、投资者、法律或财务顾问披露之信息，而该股东、法律或财务顾问亦需遵守与本条款相类似之保密责任。如任何一方工作人员或聘请机构的泄密均视为该方的泄密，需依本协议承担违约责任。无论本协议以任何理由终止，本条款仍然生效。The Parties acknowledge that the existence and the terms of this Agreement and any oral or written information exchanged between the Parties inconnection with the preparation and performance this Agreement are regarded as confidential information. Each Party shall maintainconfidentiality of all such confidential information, and without obtaining the written consent of the other Party, it shall not disclose any relevantconfidential information to any third parties, except for the information that: (a) is or will be in the public domain (other than through the receivingParty’s unauthorized disclosure); (b) is under the obligation to be disclosed pursuant to the applicable laws or regulations, rules of any stockexchange, or orders of the court or other government authorities; or (c) is required to be disclosed by any Party to its shareholders, investors,legal counsels or financial advisors regarding the transaction contemplated hereunder, provided that such shareholders, investors, legal counselsor financial advisors shall be bound by the confidentiality obligations similar to those set forth in this Section. Disclosure of any confidentialinformation by the staff members or agencies hired by any Party shall be deemed disclosure of such confidential information by such Party, whichParty shall be held liable for breach of this Agreement. This Section shall survive the termination of this Agreement for any reason.3.3双方同意，不论本协议是否变更、解除或终止，本条款将持续有效。The Parties agree that this Section shall survive changes to, and rescission or termination of, this Agreement.4.陈述和保证Representations and Warranties4.1甲方陈述和保证如下：Party A hereby represents and warrants as follows:4.1.1甲方是按照中国法律合法注册并有效存续的外商独资企业。Party A is a whollyforeignowned enterprise legally registered and validly existing in accordance with the laws of China.10秘密文件Strictly Confidential4.1.2甲方已采取必要的公司行为，获得必要的授权，并取得第三方和政府部门的同意及批准（若需）以签署和履行本协议；甲方对本协议的签署和履行并不违反法律法规的明确规定。Party A has taken all necessary corporate actions, obtained all necessary authorization and the consent and approval from third partiesand government agencies (if any) for the execution and performance of this Agreement. Party A’s execution and performance of thisAgreement do not violate any explicit requirements under any law or regulation binding on Party A.4.1.3本协议构成对其合法、有效、有约束力并依本协议之条款对其强制执行的义务。This Agreement constitutes Party A's legal, valid and binding obligations, enforceable in accordance with its terms.4.2乙方陈述和保证如下：Party B hereby represents and warrants as follows:4.2.1乙方是按照中国法律合法登记且有效存续的有限责任公司，乙方根据政府部门的批准和许可从事手机视频技术开发、内容制作和产业化市场推广的经营。Party B is a limited company legally registered and validly existing in accordance with the laws of China, engages in mobile videotechnology research, development, content creation, sale and related industrial promotion pursuant to governmental approvals andpermits;11秘密文件Strictly Confidential4.2.2乙方已采取必要的行为，获得必要的授权，并取得第三方和政府部门的同意及批准（若需）以签署和履行本协议；乙方对本协议的签署和履行并不违反法律法规的明确规定。Party B has taken all necessary actions, obtained all necessary authorization and the consent and approval from third parties andgovernment agencies (if any) for the execution and performance of this Agreement. Party B’s execution and performance of thisAgreement do not violate any explicit requirements under any law or regulation binding on Party B.4.2.3本协议构成对其合法、有效、有约束力并依本协议之条款对其强制执行的义务。This Agreement constitutes Party B's legal, valid and binding obligations, and shall be enforceable against it.5.生效和有效期Effectiveness and Term5.1本协议于文首标明的协议日期签署并同时生效。除非依本协议或双方其他协议的约定而提前终止，本协议有效期为20年，但甲、乙双方应自本协议签署后，每3个月对本协议的内容做一次审查，以决定是否需要根据当时的情况对本协议作出相应修改和补充。This Agreement is executed on the date first above written and shall take effect as of such date. Unless earlier terminated in accordance with theprovisions of this Agreement or relevant agreements separately executed between the Parties, the term of this Agreement shall be 20 years. Afterthe execution of this Agreement, both Parties shall review this Agreement every 3 months to determine whether to amend or supplement theprovisions in this Agreement based on the actual circumstances at that time.12秘密文件Strictly Confidential5.2协议期满前，经甲方书面确认，本协议可以延期。延期的期限由甲方决定，乙方必须无条件地同意该延期。The term of this Agreement may be extended if confirmed in writing by Party A prior to the expiration thereof. The extended term shall bedetermined by Party A, and Party B shall accept such extended term unconditionally.6.终止Termination6.1除非依据本协议续期，本协议于到期之日终止。Unless renewed in accordance with the relevant terms of this Agreement, this Agreement shall be terminated upon the date of expiration hereof.6.2本协议有效期内，除非甲方对乙方有重大过失或存在欺诈行为，乙方不得提前终止本协议。尽管如此，甲方可在任何时候通过提前30天向乙方发出书面通知的方式终止本协议。During the term of this Agreement, unless Party A commits gross negligence, or a fraudulent act, against Party B, Party B shall not terminate thisAgreement prior to its expiration date. Nevertheless, Party A shall have the right to terminate this Agreement upon giving 30 days' prior writtennotice to Party B at any time.6.3在本协议终止之后，双方在第3、7和8条项下的权利和义务将继续有效。The rights and obligations of the Parties under Articles 3, 7 and 8 shall survive the termination of this Agreement.13秘密文件Strictly Confidential7.适用法律和争议解决Governing Law and Resolution of Disputes7.1本协议的订立、效力、解释、履行、修改和终止以及争议的解决适用中国的法律。The execution, effectiveness, construction, performance, amendment and termination of this Agreement and the resolution of disputes hereundershall be governed by the laws of China.7.2因解释和履行本协议而发生的任何争议，本协议双方应首先通过友好协商的方式加以解决。如果在一方向其他方发出要求协商解决的书面通知后30天之内争议仍然得不到解决，则任何一方均可将有关争议提交给中国国际经济贸易仲裁委员会，由该会按照其仲裁规则仲裁解决。仲裁应在北京进行，使用之语言为中文。仲裁裁决是终局性的，对各方均有约束力。In the event of any dispute with respect to the construction and performance of this Agreement, the Parties shall first resolve the dispute throughfriendly negotiations. In the event the Parties fail to reach an agreement on the dispute within 30 days after either Party's request to the otherParties for resolution of the dispute through negotiations, either Party may submit the relevant dispute to the China International Economic andTrade Arbitration Commission for arbitration, in accordance with its Arbitration Rules. The arbitration shall be conducted in Beijing, and thelanguage used in arbitration shall be Chinese. The arbitration award shall be final and binding on all Parties.14秘密文件Strictly Confidential7.3因解释和履行本协议而发生任何争议或任何争议正在进行仲裁时，除争议的事项外，本协议双方仍应继续行使各自在本协议项下的其他权利并履行各自在本协议项下的其他义务。Upon the occurrence of any disputes arising from the construction and performance of this Agreement or during the pending arbitration of anydispute, except for the matters under dispute, the Parties to this Agreement shall continue to exercise their respective rights under this Agreementand perform their respective obligations under this Agreement.8.补偿Indemnification就甲方根据本协议向乙方提供的咨询和服务内容所产生或引起的针对甲方的诉讼、请求或其他要求而招致的任何损失、损害、责任或费用都应由乙方补偿给甲方，以使甲方不受损害，除非该损失、损害、责任或费用是因甲方的重大过失或故意而产生的。Party B shall indemnify and hold harmless Party A from any losses, injuries, obligations or expenses caused by any lawsuit, claims or other demandsagainst Party A arising from or caused by the consultations and services provided by Party A to Party B pursuant this Agreement, except where suchlosses, injuries, obligations or expenses arise from the gross negligence or willful misconduct of Party A.15秘密文件Strictly Confidential9.通知Notices9.1本协议项下要求或发出的所有通知和其他通信应通过专人递送、挂号邮寄、邮资预付或快递服务或传真的方式发到该方下列地址。每一通知还应再以电子邮件送达。该等通知视为有效送达的日期按如下方式确定：All notices and other communications required or permitted to be given pursuant to this Agreement shall be delivered personally or sent byregistered mail, postage prepaid, by a courier service or by facsimile transmission to the address of such Party set forth below. A confirmationcopy of each notice shall also be sent by email. The dates on which notices shall be deemed to have been effectively given shall be determined asfollows:9.1.1通知如果是以专人递送、快递服务或挂号邮寄、邮资预付发出的，则以于设定为通知的地址在接收或拒收之日为有效送达日。Notices given by personal delivery, by courier service or by registered mail, postage prepaid, shall be deemed effectively given on thedate of receipt or refusal at the address specified for notices.9.1.2通知如果是以传真发出的，则以成功传送之日为有效送达日（应以自动生成的传送确认信息为证）。Notices given by facsimile transmission shall be deemed effectively given on the date of successful transmission (as evidenced by anautomatically generated confirmation of transmission).16秘密文件Strictly Confidential9.2为通知的目的，双方地址如下：For the purpose of notices, the addresses of the Parties are as follows:甲方：中传天下信息科技（深圳）有限公司Party A: Zhongchuan Tianxia Information Technology (Shenzhen) Co., Ltd.地址：深圳市南山区高新中三道2号深圳软件园一期五栋401AAddress:401A, Building 5, Phase 1, Shenzhen Software Park, No.2 Gaoxin Zhongsan Road, Nanshan District, Shenzhen收件人：洪婷Attn: Hong Ting乙方：北京中传视讯科技有限公司Party B: Beijing Mobile Vision Technology Co., Ltd地址：北京市朝阳区光华路9号SOHO3QLAB32Address: LAB32, SOHO3Q, No 9, Guanghua Road, Chaoyang District, Beijing.收件人：宋雪松Attn.: Song Xuesong9.3任何一方可按本条规定随时给另一方发出通知来改变其接收通知的地址。Any Party may at any time change its address for notices by a notice delivered to the other Party in accordance with the terms hereof.17秘密文件Strictly Confidential10.协议的转让Assignment10.1乙方不得将其在本协议项下的权利与义务转让给第三方，除非事先征得甲方的书面同意。Without Party A's prior written consent, Party B shall not assign its rights and obligations under this Agreement to any third party.10.2乙方在此同意，甲方可以在其需要时向其他第三方转让其在本协议项下的权利和义务，并在该等转让发生时甲方仅需向乙方发出书面通知，并且无需再就该等转让征得乙方的同意。Party B agrees that Party A may assign its obligations and rights under this Agreement to any third party upon a prior written notice to Party Bbut without the consent of Party B.11.协议的分割性Severability如果本协议有任何一条或多条规定根据任何法律或法规在任何方面被裁定为无效、不合法或不可执行，本协议其余规定的有效性、合法性或可执行性不应因此在任何方面受到影响或损害。双方应通过诚意磋商，争取以法律许可以及双方期望的最大限度内有效的规定取代那些无效、不合法或不可执行的规定，而该等有效的规定所产生的经济效果应尽可能与那些无效、不合法或不能强制执行的规定所产生的经济效果相似。In the event that one or several of the provisions of this Agreement are found to be invalid, illegal or unenforceable in any aspect in accordance with anylaws or regulations, the validity, legality or enforceability of the remaining provisions of this Agreement shall not be affected or compromised in any aspect.The Parties shall strive in good faith to replace such invalid, illegal or unenforceable provisions with effective provisions that accomplish to the greatestextent permitted by law and the intentions of the Parties, and the economic effect of such effective provisions shall be as close as possible to the economiceffect of those invalid, illegal or unenforceable provisions.18秘密文件Strictly Confidential12.协议的修改、补充Amendments and Supplements双方可以书面协议方式对本协议作出修改和补充。经过双方签署的有关本协议的修改协议和补充协议是本协议组成部分，具有与本协议同等的法律效力。Any amendments and supplements to this Agreement shall be in writing. The amendment agreements and supplementary agreements that have beensigned by the Parties and that relate to this Agreement shall be an integral part of this Agreement and shall have the same legal validity as this Agreement.13.语言和副本Language and Counterparts本协议以中文和英文书就，一式二份，甲乙双方各持一份，具有同等效力；中英文版本如有冲突，应以中文版为准。This Agreement is written in both Chinese and English language in two copies, each Party having one copy with equal legal validity; in case there is anyconflict between the Chinese version and the English version, the Chinese version shall prevail.本页其余部分刻意留为空白The Remainder of this page is intentionally left blank19秘密文件Strictly Confidential有鉴于此，双方已使得经其授权的代表于文首所述日期签署了本独家业务合作协议并即生效，以昭信守。IN WITNESS WHEREOF, the Parties have caused their authorized representatives to execute this Exclusive Business Cooperation Agreement as of thedate first above written.甲方：中传天下信息科技（深圳）有限公司（盖章）Party A: Zhongchuan Tianxia Information Technology (Shenzhen) Co., Ltd.(Seal)签字：By: /s/ Hong Ting 姓名：洪婷Name: Hong Ting职务：总经理Title: General Manager20秘密文件Strictly Confidential有鉴于此，双方已使得经其授权的代表于文首所述日期签署了本独家业务合作协议并即生效，以昭信守。IN WITNESS WHEREOF, the Parties have caused their authorized representatives to execute this Exclusive Business Cooperation Agreement as of thedate first above written. 乙方：北京中传视讯科技有限公司（盖章）Party B: Beijing Mobile Vision Technology Co., Ltd. (Seal)签字：By: /s/ Song Xuesong 姓名：宋雪松Name: Song Xuesong职务：董事长Title: Chairman of the Board21秘密文件Strictly ConfidentialEX4.16 4 f20f2017ex416_luokung.htm EXCLUSIVE OPTION AGREEMENT BY AND AMONG ZHONGCHUAN TIANXIA INFORMATION TECHNOLOGY(SHENZHEN) CO., LTD., XUESONG SONG, WEILI CHEN, PING WANG, DONGLAI LIU, AND BEIJING MOBILE VISION TECHNOLOGY CO., LTD., DATEDAUGUST 31, 2015Exhibit 4.16独家购买权协议Exclusive Option Agreement本独家购买权协议 (下称“本协议”) 由以下各方于年月日在中华人民共和国（下称“中国”）北京签订：This Exclusive Option Agreement (this “Agreement”) is executed by and among the Parties below as of in Beijing, the People’s Republic of China (the“China” or “PRC”):甲方：中传天下信息科技（深圳）有限公司，一家依照中国法律设立和存在的外商独资企业，地址为深圳市南山区高新中三道2号深圳软件园一期五栋401A；Party A:Zhongchuan Tianxia Information Technology (Shenzhen) Co., Ltd., a whollyforeignowned enterprise organized and existing under the laws of China,with its address at 401A, Building 5, Phase 1, Shenzhen Software Park, No.2 Gaoxin Zhongsan Road, Nanshan District, Shenzhen.乙方：Party B:a)宋雪松Song Xuesong身份证号码:120112196809040417ID Card No.:120112196809040417住所：天津市河西区广东路中裕园33702Address:Zhongyu Yuan 33702, Guangdong Road, Hexi District, Tianjinb)陈蔚力Chen Weili身份证号码:120106197309240516ID Card No.:120106197309240516住所：广东省深圳市宝安区宝城上川路15号Address:Baocheng Shangchuan Road 15, Baoan District, Shenzhen, Guangdong1秘密文件Strictly Confidentialc)王平Wang Ping身份证号码:35020319691030401xID Card No.:35020319691030401x住所：广东省深圳市南山区高新南环路36号彩虹之岸12栋4AAddress:Caihong Zhi’an Building No.12 Suite 4A, Gaoxin Nanhuan Road 36, Nanshan District, Shenzhen, Guangdongd)刘东来Liu Donglai身份证号码:120107196810103912ID Card No.:120107196810103912住所：天津市和平区南京路诚基经贸中心1号楼2门1702号Address:No 1702, Door 2, Build 1, Chengji Economic and Trade Centre, Nanjing Road, Heping District, Tianjin.丙方：北京中传视讯科技有限公司，一家依照中国法律设立和存在的有限责任公司，地址为北京市朝阳区光华路9号SOHO3QLAB32，统一社会信用代码为9111010576215249XM；Party C:Beijing Mobile Vision Technology Co., Ltd., a limited company duly registered in China, with its address at LAB32, SOHO3Q, No 9, Guanghua Road,Chaoyang District, Beijing and its uniform social credit code of 9111010576215249XM.2秘密文件Strictly Confidential在本协议中，甲方、乙方和丙方以下各称“一方”，合称“各方”。In this Agreement, each of Party A, Party B and Party C shall be referred to as a “Party” respectively, and they shall be collectively referred to as the“Parties”.鉴于，乙方系丙方股东并合计持有丙方100%股权，乙方将按本协议之条款授予甲方购买全部或部分该股权的权利。Whereas, Party B are the shareholders of Party C and jointly hold 100% of the equity interest in Party C, and Party B are willing to grant to Party A the rightto acquire such equity interest, in whole or in part, on the terms herein.现各方协商一致，达成如下协议：Now therefore, upon mutual discussion and negotiation, the Parties have reached the following agreement:1.股权买卖Sale and Purchase of Equity Interest1.1授予权利Option Granted乙方在此不可撤销地授予甲方在中国法律允许的前提下，按照甲方自行决定的行使步骤，并按照本协议第1.3条所述的价格，随时一次或多次从乙方购买或指定一人或多人(“被指定人”)从乙方购买其目前和将来所持有的丙方的全部或部分股权（无论乙方出资额和/或持股比例将来是否发生变化）的一项不可撤销的专有权(“股权购买权”)。除甲方和被指定人外，任何第三人均不得享有股权购买权或其他与乙方股权有关的权利。丙方特此同意乙方向甲方授予股权购买权。本款及本协议所规定的“人”指个人、公司、合营企业、合伙、企业、信托或非公司组织。Party B hereby irrevocably grant Party A an irrevocable and exclusive right to purchase, or designate one or more persons (each, a “Designee”) topurchase the equity interests in Party C now and in the future held by Party B (regardless whether Party B’s capital contribution amount and/orpercentage of shareholding will be changed in the future) once or at multiple times at any time in part or in whole at Party A’s sole and absolutediscretion to the extent permitted by Chinese laws and at the price described in Section 1.3 herein (such right being the “Equity Interest PurchaseOption”). Except for Party A and the Designee(s), no other person shall be entitled to the Equity Interest Purchase Option or other rights withrespect to the equity interests of Party B. Party C hereby agrees to the grant by Party B of the Equity Interest Purchase Option to Party A. Theterm “person” as used herein shall refer to individuals, corporations, partnerships, partners, enterprises, trusts or noncorporate organizations.3秘密文件Strictly Confidential1.2行使步骤Steps for Exercise of Equity Interest Purchase Option甲方行使其股权购买权以符合中国法律和法规的规定为前提。甲方行使股权购买权时，应向乙方发出书面通知(“股权购买通知”)，股权购买通知应载明以下事项：(a)甲方关于行使股权购买权的决定；(b)甲方拟从乙方购买的股权份额(“被购买的股权”)；和(c)被购买的股权的买入日期。Subject to the provisions of the laws and regulations of China, Party A may exercise the Equity Interest Purchase Option by issuing a writtennotice to Party B (the “Equity Interest Purchase Option Notice”), specifying: (a) Party A’s decision to exercise the Equity Interest PurchaseOption; (b) the portion of equity interests to be purchased from Party B (the “Optioned Interests”); and (c) the date for purchasing the OptionedInterests.1.3股权买价Equity Interest Purchase Price被购买的股权的买价（“股权买价”）应是行权当时中国法律允许的最低价格。乙方收到该股权对价后，应当提供给丙方与该股权买价相同金额的借款，该借款的期限为20年，且为无息。乙方应当在该借款期限届满时就该借款放弃对丙方的债权。The purchase price of the Optioned Interests (the “Equity Interest Purchase Price”) shall be the lowest price permitted by the laws of China. Afterreceiving the Equity Interest Purchase Price, Party B shall make an interestfree loan equivalent to the amount of Equity Interest Purchase Price toParty C, of which term is 20 years. Each member of Party B shall give up his(her) creditor’s right when the loan term expires.4秘密文件Strictly Confidential1.4转让被购买股权Transfer of Optioned Interests甲方每次行使股权购买权时：For each exercise of the Equity Interest Purchase Option:1.4.1乙方应责成丙方及时召开股东会会议，在该会议上，应通过批准乙方向甲方和/或被指定人转让被购买的股权的决议；Party B shall cause Party C to promptly convene a shareholders meeting, at which a resolution shall be adopted approving Party B’stransfer of the Optioned Interests to Party A and/or the Designee(s);1.4.2乙方应就其向甲方和/或被指定人转让被购买股权取得丙方其他股东同意该转让并放弃优先购买权的书面声明。Party B shall obtain written statements from the other shareholder of Party C giving consent to the transfer of the equity interest to PartyA and/or the Designee(s) and waiving any right of first refusal related thereto.1.4.3乙方应与甲方和/或(在适用的情况下)被指定人按照本协议及股权购买通知的规定，为每次转让签订股权转让协议；Party B shall execute a share transfer contract with respect to each transfer with Party A and/or each Designee (whichever is applicable),in accordance with the provisions of this Agreement and the Equity Interest Purchase Option Notice regarding the Optioned Interests;5秘密文件Strictly Confidential1.4.4有关方应签署所有其他所需协议、协议或文件，取得全部所需的政府批准和同意，并采取所有所需行动，在不附带任何担保权益的情况下，将被购买的股权的有效所有权转移给甲方和/或被指定人并使甲方和/或被指定人成为被购买的股权的登记在册所有人。为本款及本协议的目的，“担保权益”包括担保、抵押、第三方权利或权益，任何购股权、收购权、优先购买权、抵销权、所有权扣留或其他担保安排等；但为了明确起见，不包括在本协议、乙方股权质押协议项下产生的任何担保权益。本款及本协议所规定的“乙方股权质押协议”指甲方、乙方和丙方于本协议签署之日签订的股权质押协议，根据股权质押协议，乙方为担保丙方能履行丙方与甲方签订的独家业务合作协议项下的义务，而向甲方质押其在丙方的全部乙方股权。The relevant Parties shall execute all other necessary contracts, agreements or documents, obtain all necessary government licenses andpermits and take all necessary actions to transfer valid ownership of the Optioned Interests to Party A and/or the Designee(s),unencumbered by any security interests, and cause Party A and/or the Designee(s) to become the registered owner(s) of the OptionedInterests. For the purpose of this Section and this Agreement, “security interests” shall include securities, mortgages, third party’s rightsor interests, any stock options, acquisition right, right of first refusal, right to offset, ownership retention or other security arrangements,but shall be deemed to exclude any security interest created by this Agreement and Party B’s Equity Interest Pledge Agreement. “PartyB’s Equity Interest Pledge Agreement” as used in this Section and this Agreement shall refer to the Equity Interest Pledge Agreementexecuted by and among Party A, Party B and Party C on the date of this Agreement, whereby Party B pledge all of their equity interests inParty C to Party A, in order to guarantee Party C’s performance of its obligations under the Exclusive Business Corporation Agreementexecuted by and between Party C and Party A.6秘密文件Strictly Confidential2.知识产权独家购买权Exclusive Option regarding the Intellectual Property Rights2.1本协议签订之日起，若乙方拟转让、出售或以其他方式处置（任一处置方式以下简称“转让”）其拥有或持有的全部或部分知识产权（以下称“知识产权”，定义见第2.4条），甲方有权独家购买该等知识产权。From the date hereof, if Party B proposes to transfer, sell or dispose of (each, a “transfer”) all or any part of the intellectual property rights ownedor held by Party B (“IPR”), Party A shall have exclusive option.2.2若乙方有意转让全部或部分知识产权，应事先向甲方发出书面通知(“转让通知”)，转让通知应载明以下事项：(a) 乙方关于转让知识产权的意向；(b) 乙方拟转让的知识产权清单(“拟转让知识产权”)及转让的价格和其他条件。转让通知视为乙方向甲方发出的一份要约，按照该要约，乙方同意按转让通知中指定的价格条件向甲方转让全部或部分拟转让知识产权。Prior to Party B proposes to transfer all or any part of its IPR, Party B shall give Party A a written notice (“Transfer Notice”), which shall specify (a)Party B’s intention to make the transfer; (b) the list of IPR to be transferred (“Offered IPR”) and the consideration and other conditions uponwhich the transfer is to be made. The Transfer Notice constitutes Party B’s offer given to Party A, pursuant to which, Party B agrees to transfer allor any part of its Offered IPR to Party A based on the same conditions described in the Transfer Notice.7秘密文件Strictly Confidential2.3甲方收到转让通知后，有权在30日内选择按照转让通知中列明的转让价格和条件购买拟转让知识产权。如果甲方行使其独家购买权，双方应于甲方收到转让通知后45日内签订有关的知识产权转让协议，乙方应办理法律规定的知识产权转让的批准和登记手续。Party A shall have an option for a period of 30 days from Party A’s receipt of the Transfer Notice to elect to purchase the Offered IPR at the sameprice and subject to the same conditions as described in the Transfer Notice. If Party A decides to exercise its exclusive option, the parties shallenter into relevant IPR transfer agreement within 45 days upon Party A’s receipt of the Transfer Notice and Party B is responsible to complete allrelated approvals and registrations formalities as prescribed by the PRC law.2.4本协议第2条所称“知识产权”指任何知识产权，包括但不限于著作权、专利权、专利申请权、商标、域名、软件、专有技术，并包括前述知识产权申请权利以及登记注册的权利，以及其他所有与前述知识产权有关的权利和权益。The “IPR” referred to in this Article 2 means any intellectual property rights, including, without limitations, copyrights, patents, patentapplications, trademarks, domain names, software and knowhow together with (a) all rights to apply for or register any of the foregoing and (b) allother rights and interests to any of the foregoing.8秘密文件Strictly Confidential3.承诺Covenants3.1有关丙方的承诺Covenants regarding Party C乙方（作为丙方的股东）和丙方在此承诺：Party B (as the shareholders of Party C) and Party C hereby covenant as follows:3.1.1未经甲方的事先书面同意，不以任何形式补充、更改或修改丙方公司章程文件，增加或减少其注册资本，或以其他方式改变其注册资本结构；Without the prior written consent of Party A, they shall not in any manner supplement, change or amend the articles of association andbylaws of Party C, increase or decrease its registered capital, or change its structure of registered capital in other manners;3.1.2按照良好的财务和商业标准及惯例，保持其公司的存续，审慎地及有效地经营其业务和处理事务；They shall maintain Party C’s corporate existence in accordance with good financial and business standards and practices by prudentlyand effectively operating its business and handling its affairs;3.1.3未经甲方的事先书面同意，不在本协议签署之日起的任何时间出售、转让、抵押或以其他方式处置丙方的任何资产、业务或收入的合法或受益权益，或允许在其上设置任何其他担保权益；Without the prior written consent of Party A, they shall not at any time following the date hereof, sell, transfer, mortgage or dispose of inany manner any assets of Party C or legal or beneficial interest in the business or revenues of Party C, or allow the encumbrance thereonof any security interest;3.1.4未经甲方的事先书面同意，不发生、继承、保证或容许存在任何债务，但(i)正常或日常业务过程中产生而不是通过借款方式产生的债务；和(ii)已向甲方披露和得到甲方书面同意的债务除外；Without the prior written consent of Party A, they shall not incur, inherit, guarantee or suffer the existence of any debt, except for (i)debts incurred in the ordinary course of business other than through loans; and (ii) debts disclosed to Party A for which Party A’swritten consent has been obtained;9秘密文件Strictly Confidential3.1.5一直在正常业务过程中经营所有业务，以保持丙方的资产价值，不进行任何足以影响其经营状况和资产价值的作为/不作为；They shall always operate all of Party C’s businesses during the ordinary course of business to maintain the asset value of Party C andrefrain from any action/omission that may affect Party C’s operating status and asset value;3.1.6未经甲方的事先书面同意，不得让丙方签订任何重大协议，但在正常业务过程中签订的协议除外(就本段而言，如果一份协议的价值超过【人民币10万元】，即被视为重大协议)；Without the prior written consent of Party A, they shall not cause Party C to execute any major contract, except the contracts in theordinary course of business (for purpose of this subsection, a contract with a value exceeding RMB 100,000 shall be deemed a majorcontract);3.1.7未经甲方的事先书面同意，丙方不得向任何人提供贷款或信贷；Without the prior written consent of Party A, they shall not cause Party C to provide any person with any loan or credit;3.1.8应甲方要求，向其提供所有关于丙方的营运和财务状况的资料；They shall provide Party A with information on Party C’s business operations and financial condition at Party A’s request;10秘密文件Strictly Confidential3.1.9如甲方提出要求，丙方应从甲方接受的保险公司处购买和持有有关其资产和业务的保险，该保险的金额和险种应与经营类似业务的公司一致；If requested by Party A, they shall procure and maintain insurance in respect of Party C’s assets and business from an insurance carrieracceptable to Party A, at an amount and type of coverage typical for companies that operate similar businesses;3.1.10未经甲方的事先书面同意，丙方不得与任何人合并或联合，或对任何人进行收购或投资；Without the prior written consent of Party A, they shall not cause or permit Party C to merge, consolidate with, acquire or invest in anyperson;3.1.11将发生的或可能发生的与丙方资产、业务或收入有关的诉讼、仲裁或行政程序立即通知甲方；They shall immediately notify Party A of the occurrence or possible occurrence of any litigation, arbitration or administrative proceedingsrelating to Party C’s assets, business or revenue;3.1.12为保持丙方对其全部资产的所有权，签署所有必要或适当的文件，采取所有必要或适当的行动和提出所有必要或适当的控告或对所有索偿进行必要和适当的抗辩；To maintain the ownership by Party C of all of its assets, they shall execute all necessary or appropriate documents, take all necessary orappropriate actions and file all necessary or appropriate complaints or raise necessary and appropriate defenses against all claims;11秘密文件Strictly Confidential3.1.13未经甲方事先书面同意，不得以任何形式派发股息予各股东，但一经甲方要求，丙方应立即将其所有可分配利润全部立即分配给其各股东；及Without the prior written consent of Party A, they shall ensure that Party C shall not in any manner distribute dividends to itsshareholders, provided that upon Party A’s written request, Party C shall immediately distribute all distributable profits to itsshareholders; and3.1.14根据甲方的要求，委任由其指定的任何人士出任丙方的董事和/或执行董事。At the request of Party A, they shall appoint any persons designated by Party A as the director and/or executive director of Party C.3.2乙方和丙方的承诺Covenants of Party B and Party C乙方承诺：Party B hereby covenant as follows:3.2.1未经甲方的事先书面同意，不出售、转让、抵押或以其他方式处置其拥有的丙方的股权的合法或受益权益，或允许在其上设置任何其他担保权益，但根据乙方签署的《股权质押协议》在该股权上设置的质押则除外；Without the prior written consent of Party A, Party B shall not sell, transfer, mortgage or dispose of in any other manner any legal orbeneficial interest in the equity interests in Party C held by Party B, or allow the encumbrance thereon of any security interest, except forthe pledge placed on these equity interests in accordance with Party B’s Equity Interest Pledge Agreement;12秘密文件Strictly Confidential3.2.2促使丙方股东会和/或执行董事不批准在未经甲方的事先书面同意的情况下，出售、转让、抵押或以其他方式处置任何乙方持有之丙方的股权的合法权益或受益权，或允许在其上设置任何其他担保权益，但批准根据乙方签署的《股权质押协议》在乙方股权上设置的质押则除外；Party B shall cause the shareholders’ meeting and/or the executive director of Party C not to approve the sale, transfer, mortgage ordisposition in any other manner of any legal or beneficial interest in the equity interests in Party C held by Party B, or allow theencumbrance thereon of any security interest, without the prior written consent of Party A, except for the pledge placed on these equityinterests in accordance with Party B’s Equity Interest Pledge Agreement;3.2.3未经甲方的事先书面同意的情况下，对于丙方与任何人合并或联合，或对任何人进行收购或投资，乙方将促成丙方股东会或执行董事不予批准；Party B shall cause the shareholders’ meeting or the executive director of Party C not to approve the merger or consolidation with anyperson, or the acquisition of or investment in any person, without the prior written consent of Party A;3.2.4将发生的或可能发生的任何关于其所拥有的股权的诉讼、仲裁或行政程序立即通知甲方；Party B shall immediately notify Party A of the occurrence or possible occurrence of any litigation, arbitration or administrativeproceedings relating to the equity interests in Party C held by Party B;13秘密文件Strictly Confidential3.2.5促使丙方股东会或执行董事表决赞成本协议规定的被购买的股权的转让并应甲方之要求采取其他任何行动；Party B shall cause the shareholders’ meeting or the executive director of Party C to vote their approval of the transfer of the OptionedInterests as set forth in this Agreement and to take any and all other actions that may be requested by Party A;3.2.6为保持其对股权的所有权，签署所有必要或适当的文件，采取所有必要或适当的行动和提出所有必要或适当的控告或对所有索偿进行必要和适当的抗辩；To the extent necessary to maintain Party B’s ownership in Party C, Party B shall execute all necessary or appropriate documents, take allnecessary or appropriate actions and file all necessary or appropriate complaints or raise necessary and appropriate defenses against allclaims;3.2.7应甲方的要求，委任由其指定的任何人士出任丙方的董事和/或执行董事；Party B shall appoint any designee of Party A as the director and/or executive director of Party C, at the request of Party A;3.2.8经甲方随时要求，应向其指定的代表在任何时间无条件地根据本协议的股权购买权立即转让其股权，并放弃其对其他现有股东进行上述股权转让所享有的优先购买权（如有的话）；和At the request of Party A at any time, Party B shall promptly and unconditionally transfer its equity interests in Party C to Party A’sDesignee(s) in accordance with the Equity Interest Purchase Option under this Agreement, and Party B hereby waives its right of firstrefusal (if any) to the share transfer by the other existing shareholder of Party C (if any); and14秘密文件Strictly Confidential3.2.9严格遵守本协议及各方共同或分别签订的其他协议的各项规定，切实履行该等协议项下的各项义务，并不进行任何足以影响该等协议的有效性和可执行性的作为/不作为。如果乙方对于本协议项下或乙方股权质押协议下或对甲方的授权委托书中的股权，还留存有任何权利，除非甲方书面指示，否则乙方仍不得行使该权利。Party B shall strictly abide by the provisions of this Agreement and other contracts jointly or separately executed by and among Party B,Party C and Party A, perform the obligations hereunder and thereunder, and refrain from any action/omission that may affect theeffectiveness and enforceability thereof. To the extent that Party B has any remaining rights with respect to the equity interests subject tothis Agreement hereunder or under Party B’s Equity Interest Pledge Agreement or under the Power of Attorney granted in favor of PartyA, Party B shall not exercise such rights except in accordance with the written instructions of Party A.4.陈述和保证Representations and Warranties乙方和丙方特此在本协议签署之日和每一个转让日向甲方共同及分别陈述和保证如下：Party B and Party C hereby represent and warrant to Party A, jointly and severally, as of the date of this Agreement and each date of transfer of theOptioned Interests, that:4.1其具有签订和交付本协议和其为一方的、根据本协议为每一次转让被购买的股权而签订的任何股权转让协议(各称为"转让协议")，并履行其在本协议和任何转让协议项下的义务的权力和能力。乙方和丙方同意在甲方行使购买权时，他们将签署与本协议条款一致的转让协议。本协议和其是一方的各转让协议一旦签署后，构成或将对其构成合法、有效及具有约束力的义务并可按照其条款对其强制执行；They have the authority to execute and deliver this Agreement and any share transfer contracts to which they are a party concerning theOptioned Interests to be transferred thereunder (each, a “Transfer Contracts”), and to perform their obligations under this Agreement and anyTransfer Contracts. Party B and Party C agree to enter into Transfer Contracts consistent with the terms of this Agreement upon Party A’s exerciseof the Equity Interest Purchase Option. This Agreement and the Transfer Contracts to which they are a party constitute or will constitute theirlegal, valid and binding obligations and shall be enforceable against them in accordance with the provisions thereof;15秘密文件Strictly Confidential4.2无论是本协议或任何转让协议的签署和交付还是其在本协议或任何转让协议项下的义务的履行均不会：(i)导致违反任何有关的中国法律；(ii)与丙方章程或其他组织文件相抵触；(iii)导致违反其是一方或对其有约束力的任何协议或文件，或构成其是一方或对其有约束力的任何协议或文件项下的违约；(iv)导致违反有关向任何一方颁发的任何许可或批准的授予和(或)继续有效的任何条件；或(v)导致向任何一方颁发的任何许可或批准中止或被撤销或附加条件；The execution and delivery of this Agreement or any Transfer Contracts and the obligations under this Agreement or any Transfer Contracts shallnot: (i) cause any violation of any applicable laws of China; (ii) be inconsistent with the articles of association, bylaws or other organizationaldocuments of Party C; (iii) cause the violation of any contracts or instruments to which they are a party or which are binding on them, orconstitute any breach under any contracts or instruments to which they are a party or which are binding on them; (iv) cause any violation of anycondition for the grant and/or continued effectiveness of any licenses or permits issued to either of them; or (v) cause the suspension orrevocation of or imposition of additional conditions to any licenses or permits issued to either of them;4.3乙方对其在丙方拥有的股权拥有良好和可出售的所有权，除乙方签署的《股权质押协议》外，乙方在上述股权上没有设置任何担保权益；Party B have a good and merchantable title to the equity interests in Party C they hold. Except for Party B’s Equity Interest Pledge Agreement,Party B have not placed any security interest on such equity interests;16秘密文件Strictly Confidential4.4目前没有悬而未决的或构成威胁的与丙方的股权、丙方资产有关的或与丙方有关的诉讼、仲裁或行政程序。There are no pending or threatened litigation, arbitration or administrative proceedings relating to the equity interests in Party C, assets of Party Cor Party C.5.生效日Effective Date5.1本协议于各方签署本协议之日生效，有效期10年，经甲方选择可再延长10年。This Agreement shall become effective upon the date hereof, and remain effective for a term of 10 years, and may be renewed for an additional 10years at Party A’s election.5.2若丙方股东发生变化，由新股东签署此协议，在此协议签署之日，原协议自动视为无效。In the event of a change in the shareholders of Party C, the new shareholder should sign this agreement and the original agreement willautomatically be deemed invalid on the date of signing of this agreement.17秘密文件Strictly Confidential6.适用法律与争议解决Governing Law and Resolution of Disputes6.1适用法律Governing law本协议的订立、效力、解释、履行、修改和终止以及争议解决均适用中国正式公布并可公开得到的法律。对中国正式公布并可公开得到的法律没有规定的事项，将适用国际法律原则和惯例。The execution, effectiveness, construction, performance, amendment and termination of this Agreement and the resolution of disputes hereundershall be governed by the formally published and publicly available laws of China. Matters not covered by formally published and publiclyavailable laws of China shall be governed by international legal principles and practices.6.2争议的解决方法Methods of Resolution of Disputes因解释和履行本协议而发生的任何争议，本协议各方应首先通过友好协商的方式加以解决。如果在一方向其他方发出要求协商解决的书面通知后30天之内争议仍然得不到解决，则任何一方均可将有关争议提交给中国国际经济贸易仲裁委员会，由该会按照其届时有效的仲裁规则仲裁解决。仲裁应在北京进行，使用之语言为中文。仲裁裁决是终局性的，对各方均有约束力。In the event of any dispute with respect to the construction and performance of this Agreement, the Parties shall first resolve the dispute throughfriendly negotiations. In the event the Parties fail to reach an agreement on the dispute within 30 days after either Party’s request to the otherParties for resolution of the dispute through negotiations, either Party may submit the relevant dispute to the China International Economic andTrade Arbitration Commission for arbitration, in accordance with its then effective arbitration rules. The arbitration shall be conducted in Beijing,and the language used in arbitration shall be Chinese. The arbitration award shall be final and binding on all Parties.18秘密文件Strictly Confidential7.税款、费用Taxes and Fees每一方应承担根据中国法律因准备和签署本协议和各转让协议以及完成本协议和各转让协议拟定的交易而由该方发生的或对其征收的任何和全部的转让和注册的税、花费和费用。Each Party shall pay any and all transfer and registration tax, expenses and fees incurred thereby or levied thereon in accordance with the laws of China inconnection with the preparation and execution of this Agreement and the Transfer Contracts, as well as the consummation of the transactionscontemplated under this Agreement and the Transfer Contracts.8.通知Notices8.1本协议项下要求或发出的所有通知和其他通信应通过专人递送、挂号邮寄、邮资预付或商业快递服务或传真的方式发到该方下列地址。每一通知还应再以电子邮件送达。该等通知视为有效送达的日期按如下方式确定：All notices and other communications required or permitted to be given pursuant to this Agreement shall be delivered personally or sent byregistered mail, postage prepaid, by a commercial courier service or by facsimile transmission to the address of such Party set forth below. Aconfirmation copy of each notice shall also be sent by email. The dates on which notices shall be deemed to have been effectively given shall bedetermined as follows:8.1.1通知如果是以专人递送、快递服务或挂号邮寄、邮资预付发出的，则以于设定为通知的地址在接收或拒收之日为有效送达日。Notices given by personal delivery, by courier service or by registered mail, postage prepaid, shall be deemed effectively given on thedate of receipt or refusal at the address specified for notices.19秘密文件Strictly Confidential8.1.2通知如果是以传真发出的，则以成功传送之日为有效送达日（应以自动生成的传送确认信息为证）。Notices given by facsimile transmission shall be deemed effectively given on the date of successful transmission (as evidenced by anautomatically generated confirmation of transmission).8.2为通知的目的，各方地址如下：For the purpose of notices, the addresses of the Parties are as follows:甲方：中传天下信息科技（深圳）有限公司Party A:Zhongchuan Tianxia Information Technology (Shenzhen) Co., Ltd.地址：深圳市南山区高新中三道2号深圳软件园一期五栋401AAddress:401A, Building 5, Phase 1, Shenzhen Software Park, No.2 Gaoxin Zhongsan Road, Nanshan District, Shenzhen.收件人：洪婷Attn:Hong Ting乙方：Party B: 宋雪松Song Xuesong住所：天津市河西区广东路中裕园33702Address:Zhongyu Yuan 33702, Guangdong Road, Hexi District, Tianjin20秘密文件Strictly Confidential陈蔚力Chen Weili住所：广东省深圳市宝安区宝城上川路15号Address:Baocheng Shangchuan Road 15, Baoan District, Shenzhen, Guangdong王平Wang Ping住所：广东省深圳市南山区高新南环路36号彩虹之岸12栋4AAddress:Caihong Zhi’an Building No.12 Suite 4A, Gaoxin Nanhuan Road 36, Nanshan District, Shenzhen, Guangdong刘东来Liu Donglai住所：天津市和平区南京路诚基经贸中心1号楼2门1702号Address:No 1702, Door 2, Build 1, Chengji Economic and Trade Centre, Nanjing Road, Heping District, Tianjin.丙方：北京中传视讯科技有限公司Party C:Beijing Mobile Vision Technology Co., Ltd.地址：北京市朝阳区光华路9号SOHO3QLAB32Address: LAB32, SOHO3Q, No 9, Guanghua Road, Chaoyang District, Beijing .收件人：宋雪松Attn: Song Xuesong8.3任何一方可按本条规定随时给其他方发出通知来改变其接收通知的地址。Any Party may at any time change its address for notices by a notice delivered to the other Parties in accordance with the terms hereof.21秘密文件Strictly Confidential9.保密责任Confidentiality各方承认及确定彼此就有关本协议而交换的任何口头或书面资料均属机密资料。各方应当对所有该等资料予以保密，而在未得其他方书面同意前，不得向任何第三者披露任何有关资料，惟下列情况除外：(a)公众人士知悉或将会知悉该等资料(并非由接受资料之一方擅自向公众披露)；(b)适用法律法规或股票交易的规则或规例所需披露之资料；或(c)由任何一方就本协议所述交易而需向其法律或财务顾问披露之资料而该法律或财务顾问亦需遵守与本条款相类似之保密责任。如任何一方工作人员或聘请机构的泄密均视为该方的泄密，需依本协议承担违约责任。无论本协议以任何理由终止，本条款仍然生效。The Parties acknowledge that any oral or written information exchanged among them with respect to this Agreement is confidential information. Each Partyshall maintain the confidentiality of all such information, and without obtaining the written consent of other Parties, it shall not disclose any relevantinformation to any third parties, except in the following circumstances: (a) such information is or will be in the public domain (provided that this is not theresult of a public disclosure by the receiving party); (b) information disclosed as required by applicable laws or rules or regulations of any stock exchange;or (c) information required to be disclosed by any Party to its legal counsel or financial advisor regarding the transaction contemplated hereunder, and suchlegal counsel or financial advisor are also bound by confidentiality duties similar to the duties in this section. Disclosure of any confidential information bythe staff members or agency hired by any Party shall be deemed disclosure of such confidential information by such Party, which Party shall be held liablefor breach of this Agreement. This Section shall survive the termination of this Agreement for any reason.22秘密文件Strictly Confidential10.进一步保证Further Warranties各方同意迅速签署为执行本协议的各项规定和目的而合理需要的或对其有利的文件，以及为执行本协议的各项规定和目的而采取合理需要的或对其有利的进一步行动。The Parties agree to promptly execute documents that are reasonably required for or are conducive to the implementation of the provisions and purposes ofthis Agreement and take further actions that are reasonably required for or are conducive to the implementation of the provisions and purposes of thisAgreement.11.其他Miscellaneous11.1修订、修改与补充Amendment, change and supplement对本协议作出修订、修改与补充，必须经每一方签署书面协议。Any amendment, change and supplement to this Agreement shall require the execution of a written agreement by all of the Parties.11.2完整协议Entire agreement除了在本协议签署后所作出的书面修订、补充或修改以外，本协议构成本协议各方就本协议标的物所达成的完整协议，取代在此之前就本协议标的物所达成的所有口头或书面的协商、陈述和协议。 Except for the amendments, supplements or changes in writing executed after theexecution of this Agreement, this Agreement shall constitute the entire agreement reached by and among the Parties hereto with respect to thesubject matter hereof, and shall supercede all prior oral and written consultations, representations and contracts reached with respect to thesubject matter of this Agreement.23秘密文件Strictly Confidential11.3标题Headings本协议的标题仅为方便阅读而设，不应被用来解释、说明或在其他方面影响本协议各项规定的含义。The headings of this Agreement are for convenience only, and shall not be used to interpret, explain or otherwise affect the meanings of theprovisions of this Agreement.11.4语言Language本协议以中文和英文书就，一式八份，乙方共计六名股东以及甲方、丙方各持一份，具有同等效力；中英文版本如有冲突，应以中文版为准。This Agreement is written in both Chinese and English language in eight copies, the 6 shareholders of Party B, Party A and Party C having onecopy with equal legal validity respectively; in case there is any conflict between the Chinese version and the English version, the Chinese versionshall prevail.11.5可分割性Severability如果本协议有任何一条或多条规定根据任何法律或法规在任何方面被裁定为无效、不合法或不可执行，本协议其余规定的有效性、合法性或可执行性不应因此在任何方面受到影响或损害。各方应通过诚意磋商，争取以法律许可以及各方期望的最大限度内有效的规定取代那些无效、不合法或不可执行的规定，而该等有效的规定所产生的经济效果应尽可能与那些无效、不合法或不能强制执行的规定所产生的经济效果相似。In the event that one or several of the provisions of this Agreement are found to be invalid, illegal or unenforceable in any aspect in accordancewith any laws or regulations, the validity, legality or enforceability of the remaining provisions of this Agreement shall not be affected orcompromised in any respect. The Parties shall strive in good faith to replace such invalid, illegal or unenforceable provisions with effectiveprovisions that accomplish to the greatest extent permitted by law and the intentions of the Parties, and the economic effect of such effectiveprovisions shall be as close as possible to the economic effect of those invalid, illegal or unenforceable provisions.24秘密文件Strictly Confidential11.6继任者Successors本协议对各方各自的继任者和各方所允许的受让方应具有约束力并对其有利。This Agreement shall be binding on and shall inure to the interest of the respective successors of the Parties and the permitted assigns of suchParties.11.7继续有效Survival11.7.1协议期满或提前终止前因本协议而发生的或到期的任何义务在本协议期满或提前终止后继续有效。Any obligations that occur or that are due as a result of this Agreement upon the expiration or early termination of this Agreement shallsurvive the expiration or early termination thereof.11.7.2本协议第5、6、9条和本第11.7条的规定在本协议终止后继续有效。The provisions of Articles 5, 6, 9 and this Section 11.7 shall survive the termination of this Agreement.25秘密文件Strictly Confidential11.8弃权Waivers任何一方可以对本协议的条款和条件作出弃权，但必须经书面作出并经各方签字。一方在某种情况下就其他方的违约所作的弃权不应被视为该方在其他情况下就类似的违约已经对其他方作出弃权。Any Party may waive the terms and conditions of this Agreement, provided that such a waiver must be provided in writing and shall require thesignatures of the Parties. No waiver by any Party in certain circumstances with respect to a breach by other Parties shall operate as a waiver bysuch a Party with respect to any similar breach in other circumstances.本页其余部分刻意留为空白The Remainder of this page is intentionally left blank26秘密文件Strictly Confidential有鉴于此，各方已自行或使得其各自授权代表于文首所载日期签署本独家购买权协议。IN WITNESS WHEREOF, the Parties have executed, or caused their respective duly authorized representatives to execute, this Exclusive Option Agreement as ofthe date first above written.甲方：中传天下信息科技（深圳）有限公司（盖章）Party A: Zhongchuan Tianxia Information Technology (Shenzhen) Co., Ltd. (Seal)签字：By:/s/ Hong Ting姓名：洪婷Name: Hong Ting职务：总经理Title: General Manager秘密文件 Strictly Confidential有鉴于此，各方已自行或使得其各自授权代表于文首所载日期签署本独家购买权协议。IN WITNESS WHEREOF, the Parties have executed, or caused their respective duly authorized representatives to execute, this Exclusive Option Agreement as ofthe date first above written.乙方：Party B:宋雪松Song Xuesong签字：By:/s/ Song Xuesong秘密文件 Strictly Confidential有鉴于此，各方已自行或使得其各自授权代表于文首所载日期签署本独家购买权协议。IN WITNESS WHEREOF, the Parties have executed, or caused their respective duly authorized representatives to execute, this Exclusive Option Agreement as ofthe date first above written.乙方：Party B:陈蔚力Chen Weili签字：By:/s/ Chen Weili秘密文件 Strictly Confidential有鉴于此，各方已自行或使得其各自授权代表于文首所载日期签署本独家购买权协议。IN WITNESS WHEREOF, the Parties have executed, or caused their respective duly authorized representatives to execute, this Exclusive Option Agreement as ofthe date first above written.乙方：Party B:王平Wang Ping签字：By:/s/ Wang Ping秘密文件 Strictly Confidential有鉴于此，各方已自行或使得其各自授权代表于文首所载日期签署本独家购买权协议。IN WITNESS WHEREOF, the Parties have executed, or caused their respective duly authorized representatives to execute, this Exclusive Option Agreement as ofthe date first above written.乙方：Party B:刘东来Liu Donglai签字：By:/s/ Liu Donglai秘密文件 Strictly Confidential有鉴于此，各方已自行或使得其各自授权代表于文首所载日期签署本独家购买权协议。IN WITNESS WHEREOF, the Parties have executed, or caused their respective duly authorized representatives to execute, this Exclusive Option Agreement as ofthe date first above written.丙方：北京中传视讯科技有限公司（盖章）Party B: Beijing Mobile Vision Technology Co., Ltd. (Seal)签字：By:/s/ Song Xuesong姓名：宋雪松Name:Song Xuesong职务：董事长Title:Chairman of the Board秘密文件 Strictly ConfidentialEX4.17 5 f20f2017ex417_luokung.htm EQUITY INTEREST PLEDGE AGREEMENT BY AND AMONG ZHONGCHUAN TIANXIA INFORMATION TECHNOLOGY(SHENZHEN) CO., LTD., XUESONG SONG, WEILI CHEN, PING WANG, DONGLAI LIU, AND BEIJING MOBILE VISION TECHNOLOGY CO., LTD., DATEDAUGUST 31, 2015Exhibit 4.17股权质押协议Equity Interest Pledge Agreement本股权质押协议（下称"本协议”）由下列各方于年月日在中华人民共和国（下称“中国”）北京签订：This Equity Interest Pledge Agreement (this "Agreement") has been executed by and among the following parties on in Beijing, the People’sRepublic of China (the “China” or “PRC”):甲方：中传天下信息科技（深圳）有限公司（下称“质权人”）Party A: Zhongchuan Tianxia Information Technology (Beijing) Co., Ltd. (“Pledgee”)地址：深圳市南山区高新中三道2号深圳软件园一期五栋401AAddress: 401A, Building 5, Phase 1, Shenzhen Software Park, No.2 Gaoxin Zhongsan Road, Nanshan District, Shenzhen统一社会信用代码： 91440300565701058RUniform Social Credit Code: 91440300565701058R乙方(下称“出质人”)：Party B ( “Pledgors”):a)宋雪松Song Xuesong身份证号码:ID Card No.:b)陈蔚力Chen Weili身份证号码:ID Card No.:1秘密文件 Strictly Confidentialc)王平Wang Ping身份证号码:ID Card No.:d)刘东来Liu Donglai身份证号码:ID Card No.:丙方：北京中传视讯科技有限公司Party C: Beijing Mobile Vision Technology Co., Ltd.地址：北京市朝阳区光华路9号SOHO3QLAB32Address: LAB32, SOHO3Q, No 9, Guanghua Road, Chaoyang District, Beijing统一社会信用代码：9111010576215249XMUniform Social Credit Code: 9111010576215249XM在本协议中，质权人、出质人和丙方以下各称“一方”，合称“各方”。In this Agreement, each of Pledgee, Pledgors and Party C shall be referred to as a "Party" respectively, and they shall be collectively referred to as the"Parties".鉴于：Whereas:1．出质人全部为中国境内居民自然人，共同持有丙方100%的股权。丙方是一家在中国注册成立的、主要从事手机视频技术研发、内容制作和产业化市场推广的有限责任公司。丙方有意在此确认出质人和质权人在本协议下的权利和义务并提供必要的协助登记该质权；All of the Pledgors are natural persons resided in PRC, and collectively hold 100% of the equity interest in Party C. Party C is a limited company registered inChina, mainly engaging in mobile video frequency technology research, development, content creation, sale and related industrialization promotion. Party Cacknowledges the respective rights and obligations of Pledgors and Pledgee under this Agreement, and intends to provide any necessary assistance inregistering the Pledge;2．质权人是一家在中国注册的外商独资企业。质权人与丙方于年月日签订了独家业务合作协议；Pledgee is a whollyforeignowned enterprise registered in China. Pledgee and Party C have executed an Exclusive Business Cooperation Agreement as of [*],[*];3．为了保证丙方全面履行独家业务合作协议项下的义务，出质人以其拥有的全部丙方股权向质权人做出质押担保。To ensure that Party C fully performs its obligations under the Exclusive Business Cooperation Agreement, Pledgors hereby pledge to the Pledgee all of theequity interests they hold in Party C.为了履行业务合作协议的条款，各方商定按照以下条款签订本协议。To perform the provisions of the Business Cooperation Agreement, the Parties have mutually agreed to execute this Agreement upon the following terms.2秘密文件 Strictly Confidential1.定义Definitions除非本协议另有规定，下列词语含义为：Unless otherwise provided herein, the terms below shall have the following meanings:1.1质权：指出质人根据本协议第2条给予质权人的担保物权，即指质权人所享有的，以出质人质押给质权人的股权折价或拍卖、变卖该股权的价款优先受偿的权利。Pledge: shall refer to the security interest granted by Pledgors to Pledgee pursuant to Article 2 of this Agreement, i.e., the right of Pledgee to becompensated on a preferential basis with the conversion, auction or sales price of the Equity Interest.1.2股权：指出质人现在和将来（通过增资和/或转股）合法持有的其在丙方的全部股权权益。Equity Interest: shall refer to all of the equity interest in Party C lawfully, held now and to be held (through capital increase and/or equity transfer)hereafter by Pledgors.1.3质押期限：指本协议第3条规定的期间。Term of Pledge: shall refer to the term set forth in Article 3 of this Agreement.1.4业务合作协议：指丙方与质权人于本协议日签订的独家业务合作协议。Business Cooperation Agreement: shall refer to the Exclusive Business Cooperation Agreement executed by and between Party C and Pledgee on thedate of this Agreement.1.5违约事件：指本协议第7条所列任何情况。Event of Default: shall refer to any of the circumstances set forth in Article 7 of this Agreement.1.6违约通知：指质权人根据本协议发出的宣布违约事件的通知。Notice of Default: shall refer to the notice issued by Pledgee in accordance with this Agreement declaring an Event of Default.3秘密文件 Strictly Confidential2.质权The Pledge作为丙方按时和全额支付业务合作协议项下质权人应得的任何或全部的款项，包括但不限于业务合作协议中规定的咨询和服务费的担保（无论该等费用的到期应付是由于到期日的到来、提前收款的要求或其它原因），以及丙方充分履行其在业务合作协议项下其他所有义务（丙方按时和全额支付业务合作协议项下甲方应得的任何或全部的款项及丙方在业务合作协议项下其他所有义务，以下统称为“被担保债务”）的担保，出质人特此将其现有或将拥有的丙方的全部股权权益质押给质权人。As collateral security for the timely and complete payment and performance when due (whether at stated maturity, by acceleration or otherwise) of any or all ofthe payments due (the “all payments in pledge”) by Party C, including without limitation the consulting and services fees payable to the Pledgee under theBusiness Cooperation Agreement, Pledgors hereby pledge to Pledgee a first security interest in all of Pledgors’ right, title and interest, whether now owned orhereafter acquired by Pledgors, in the Equity Interest of Party C.3.质押期限Term of Pledge3.1本质权自本协议项下的股权出质在相应的工商行政管理机关登记之日起生效，质权有效期持续到业务合作协议下所有丙方欠付质权人的款项结清为止。出质人和丙方应（一）自本协议签署之日起3个工作日内，将本协议的质权登记在丙方股东名册上，并（二）自本协议签署之日起10个工作日内向相应的工商行政管理机关申请登记本协议项下的质权。各方共同确认，为办理股权质押工商登记手续，各方及丙方其他股东应按照丙方所在地工商行政管理部门要求的形式签署、真实反映本协议项下质权信息的《股权质押合同》（以下简称“工商登记质押合同”）提交给工商管理机关，工商登记质押合同中未约定事项，仍以本协议约定为准。出质人和丙方应当按照中国法律法规和有关工商行政管理机关的各项要求，提交所有必要的文件并办理所有必要手续，保证质权在递交申请后尽快获得登记。如果出质人持有的丙方注册资本数额增加（不管是通过直接认缴丙方的增资还是从其他股东处受让股权），各方一致同意将采取一切必要的行动和签署一切必要的文件以按照登记机关的要求完成质权的变更登记，以确保本协议项下的质权的持续有效。The Pledge shall become effective on such date when the pledge of the Equity Interest contemplated herein has been registered’ with relevantadministration for industry and commerce (the “AIC”). The Pledge shall be continuously valid until all payments due under the Business CooperationAgreement have been fulfilled by Party C. Pledgors and Party C shall (1) register the Pledge in the shareholders' register of Party C within 3 businessdays following the execution of this Agreement, and (2) submit an application to the AIC for the registration of the Pledge of the Equity Interestcontemplated herein within 10 business days following the execution of this Agreement. The parties covenant that for the purpose of registration of thePledge, the parties hereto and all other shareholders of Party C shall submit to the AIC the Equity Interest Pledge Contract in the form required by theAIC at the location of Party C which shall truly reflect the information of the Pledge hereunder (the “AIC Pledge Contract”). For matters not specified inthe AIC Pledge Contract, the parties shall be bound by the provisions of this Agreement. Pledgors and Party C shall submit all necessary documentsand complete all necessary procedures, as required by the PRC laws and regulations and the relevant AIC, to ensure that the Pledge of the EquityInterest shall be registered with the AIC as soon as possible after filing. In the event that the amount of registered capital held by Pledgors is increased(either by subscribing increased registered capital from Party C or acquiring equity interest from other shareholders), the Parties hereto agree that theyshall take any necessary action and execute any necessary document to complete the registration of change of Pledge according to the requirement ofAIC so that the Pledge in this Agreement remains effective.4秘密文件 Strictly Confidential3.2质押期限内，如丙方未按业务合作协议交付咨询服务费等费用，质权人有权但无义务按本协议的规定处分质权。During the Term of Pledge, in the event Party C fails to pay the exclusive consulting or service fees in accordance with the Business CooperationAgreement, Pledgee shall have the right, but not the obligation, to dispose of the Pledge in accordance with the provisions of this Agreement.4.质权凭证的保管Custody of Records for Equity Interest subject to Pledge4.1在本协议规定的质押期限内，出质人应将其在丙方的股权出资证明书及记载质权的股东名册交付质权人保管。出质人应在本协议签订之日起一周内将上述股权出资证明书及股东名册交付给质权人。质权人将在本协议规定的全部质押期间一直保管这些项目。During the Term of Pledge set forth in this Agreement, Pledgors shall deliver to Pledgee's custody the capital contribution certificate for the EquityInterest and the shareholders' register containing the Pledge within one week from the execution of this Agreement. Pledgee shall have custody of suchitems during the entire Term of Pledge set forth in this Agreement.4.2在质押期限内，股权所产生的红利应当无条件归质权人所有。Dividends generated by the Equity Interest shall be unconditionally owned by the Pledgee during the Term of Pledge.5秘密文件 Strictly Confidential5.出质人的声明和保证Representations and Warranties of Pledgors5.1出质人是股权唯一的合法所有人。Pledgors are the sole legal and beneficial owners of the Equity Interest.5.2质权人有权以本协议规定的方式处分并转让股权。Pledgee shall have the right to dispose of and transfer the Equity Interest in accordance with the provisions set forth in this Agreement.5.3除本质权之外，出质人未在股权上设置任何其他质押权利或其他担保权益。Except for the Pledge, Pledgors have not placed any security interest or other encumbrance on the Equity Interest.6.出质人的承诺和确认Covenants and Further Agreements of Pledgors6.1在本协议存续期间，所有出质人向质权人承诺，出质人将：All of the Pledgors hereby covenant to the Pledgee, that during the term of this Agreement, Pledgors shall:6.1.1除履行由出质人与质权人、丙方于本协议签署日签订的《独家购买权合同》外，未经质权人事先书面同意，不得转让股权，不得在股权上设立或允许存在任何担保或其他债务负担；not transfer the Equity Interest, place or permit the existence of any security interest or other encumbrance on the Equity Interest, without theprior written consent of Pledgee, except for the performance of the Exclusive Option Agreement executed by Pledgors, the Pledgee and Party Con the execution date of this Agreement;6秘密文件 Strictly Confidential6.1.2遵守并执行所有有关权利质押的法律、法规的规定，在收到有关主管机关就质权发出或制定的通知、指令或建议时，于五日内向质权人出示上述通知、指令或建议，同时遵守上述通知、指令或建议，或按照质权人的合理要求或经质权人同意就上述事宜提出反对意见和陈述；comply with the provisions of all laws and regulations applicable to the pledge of rights, and within 5 days of receipt of any notice, order orrecommendation issued or prepared by relevant competent authorities regarding the Pledge, shall present the aforementioned notice, order orrecommendation to Pledgee, and shall comply with the aforementioned notice, order or recommendation or submit objections andrepresentations with respect to the aforementioned matters upon Pledgee's reasonable request or upon consent of Pledgee;6.1.3将任何可能导致对出质人股权或其任何部分的权利产生影响的事件或收到的通知，以及可能改变出质人在本协议中的任何保证、义务或对出质人履行其在本协议中义务可能产生影响的任何事件或收到的通知及时通知质权人。promptly notify Pledgee of any event or notice received by Pledgors that may have an impact on Pledgee's rights to the Equity Interest or anyportion thereof, as well as any event or notice received by Pledgors that may have an impact on any guarantees and other obligations ofPledgors arising out of this Agreement.6.2出质人同意，质权人按本协议条款取得的对质权享有的权利，不应受到出质人或出质人的继承人或出质人之委托人或任何其他人通过法律程序的中断或妨害。Pledgors agree that the rights acquired by Pledgee in accordance with this Agreement with respect to the Pledge shall not be interrupted or harmed byPledgors or any heirs or representatives of Pledgors or any other persons through any legal proceedings.7秘密文件 Strictly Confidential6.3出质人向质权人保证，为保护或完善本协议对偿付业务合作协议项下被担保债务的担保，出质人将诚实签署、并促使其他与质权有利害关系的当事人签署质权人所要求的所有的权利证书、契约和/或履行并促使其他有利害关系的当事人履行质权人所要求的行为，并为本协议赋予质权人之权利、授权的行使提供便利，与质权人或其指定的人(自然人/法人)签署所有的有关股权所有权的文件，并在合理期间内向质权人提供其认为需要的所有的有关质权的通知、命令及决定。To protect or perfect the security interest granted by this Agreement for payment of all payment in pledge under the Business Cooperation Agreement,Pledgors hereby undertake to execute in good faith and to cause other parties who have an interest in the Pledge to execute all certificates, agreements,deeds and/or covenants required by Pledgee. Pledgors also undertake to perform and to cause other parties who have an interest in the Pledge toperform actions required by Pledgee, to facilitate the exercise by Pledgee of its rights and authority granted thereto by this Agreement, and to enter intoall relevant documents regarding ownership of Equity Interest with Pledgee or designee(s) of Pledgee (natural persons/legal persons). Pledgorsundertake to provide Pledgee within a reasonable time with all notices, orders and decisions regarding the Pledge that are required by Pledgee.6.4出质人向质权人保证，出质人将遵守、履行本协议项下所有的保证、承诺、协议、陈述及条件。如出质人不履行或不完全履行其保证、承诺、协议、陈述及条件，出质人应赔偿质权人由此遭受的一切损失。Pledgors hereby undertake to comply with and perform all guarantees, promises, agreements, representations and conditions under this Agreement. Inthe event of failure the whole or partial performance of its guarantees, promises, agreements, representations and conditions, Pledgors shall indemnifyPledgee for all losses resulting therefrom.8秘密文件 Strictly Confidential7.违约事件Event of Default7.1下列事项均被视为违约事件：The following circumstances shall be deemed Event of Default:7.1.1丙方未能按期、完整履行任何业务合作协议项下责任，包括但不限于丙方未能按期足额支付业务合作协议项下的应付的被担保债务或有违反该协议其他义务的行为；Party C fails to fully and timely fulfill any liabilities under the Business Cooperation Agreement, including without limitation failure to pay infull any of the all payment in pledge payable under the Business Cooperation Agreement or breaches any other obligations of Party Cthereunder;7.1.2出质人或丙方实质违反本协议的任何条款；Pledgors or Party C have committed a material breach of any provisions of this Agreement;7.1.3除本协议第6.1.1条的约定外，出质人舍弃出质的股权或未获得质权人书面同意而擅自转让或意图转让出质的股权；和Except as expressly stipulated in Section 6.1.1, Pledgors transfers or purports to transfer or abandons the Equity Interest pledged or assignsthe Equity Interest pledged without the written consent of Pledgee; and7.1.4丙方的继承人或代管人只能履行部分或拒绝履行业务合作协议项下的支付责任。The successor or custodian of Party C is capable of only partially perform or refuses to perform the payment obligations under the BusinessCooperation Agreement.9秘密文件 Strictly Confidential7.2如知道或发现本第7.1条所述的任何事项或可能导致上述事项的事件已经发生，出质人应立即以书面形式通知质权人。Upon notice or discovery of the occurrence of any circumstances or event that may lead to the aforementioned circumstances described in Section 7.1,Pledgors shall immediately notify Pledgee in writing accordingly.7.3除非第7.1部分下的违约事件在质权人向出质人发出要求其修补此违约行为通知后的二十（20）天之内已经按质权人要求获得救济，质权人在其后的任何时间，可向出质人发出书面违约通知，要求依据第8部分履行其处理股权的权利。Unless an Event of Default set forth in this Section 7.1 has been successfully resolved to Pledgee's satisfaction within twenty (20) days after the Pledgeedelivers a notice to the Pledgors requesting ratification of such Event of Default, Pledgee may issue a Notice of Default to Pledgors in writing at any timethereafter, demanding the Pledgors to immediately dispose of the Pledge in accordance with the provisions of Article 8 of this Agreement.8.质权的行使Exercise of Pledge8.1在被担保债务被全部清偿或履行前，未经质权人书面同意，出质人不得转让本质权和其拥有的丙方股权。Prior to the full payment of all payments in pledge, without the Pledgee's written consent, Pledgors shall not assign the Pledge or the Equity Interest inParty C.8.2在质权人行使其质押权利时，质权人可以向出质人发出书面违约通知。Pledgee may issue a Notice of Default to Pledgors when exercising the Pledge.10秘密文件 Strictly Confidential8.3在质权人行使其质押权利时，根据中国有关法律的规定，质权人有权按照法定程序处置质押股权。仅在中国法律允许的范围内，对于处置的所得，质权人无需给付出质人；除非中国法律另有规定，出质人特此放弃其可能有的能向质权人要求任何质押股权处置所得的权利；同样，出质人对质权人在该质押股权处置后的亏损也不承担任何义务。When the Pledgor exercises the pledge right, Pledgee is entitled to dispose of the Equity Interest pledged in accordance with applicable PRC laws. Onlyto the extent permitted under applicable PRC laws, Pledgee has no obligation to account to Pledgors for proceeds of disposition of the Equity Interest.Unless otherwise required by PRC laws, Pledgors hereby waive any rights it may have to demand any such accounting from Pledgee; Likewise, in suchcircumstance Pledgors shall have no obligation to Pledgee for any deficiency remaining after such disposition of the Equity Interest pledged.8.4质权人依照本协议处分质权时，出质人和丙方应予以必要的协助，以使质权人实现其质权。When Pledgee disposes of the Pledge in accordance with this Agreement, Pledgors and Party C shall provide necessary assistance to enable Pledgee toenforce the Pledge in accordance with this Agreement.9.转让Assignment9.1除非经质权人事先同意，出质人无权赠予或转让其在本协议项下的权利义务。Without Pledgee's prior written consent, Pledgors shall not have the right to assign or delegate its rights and obligations under this Agreement.11秘密文件 Strictly Confidential9.2本协议对出质人及其继任人和经许可的受让人均有约束力，并且对质权人及每一继任人和受让人有效。This Agreement shall be binding on Pledgors and their successors and permitted assigns, and shall be valid with respect to Pledgee and each of itssuccessors and assigns.9.3经出质人同意，质权人可以在任何时候将其在业务合作协议项下的所有或任何权利和义务转让给其指定的关联方（自然人/法人），在这种情况下，受让人应享有和承担本协议项下质权人享有和承担的权利和义务，如同其作为原协议方应享有和承担的一样。质权人转让业务合作协议项下的权利和义务时，应质权人要求，出质人应就此转让签署有关协议和/或文件。Upon the Pledgors’ agreement, Pledgee may assign any or all of its rights and obligations under the Business Cooperation Agreement to its designee(s)(natural/legal persons) at any time, in which case the assigns shall have the rights and obligations of Pledgee under this Agreement, as if it were theoriginal party to this Agreement. When the Pledgee assigns the rights and obligations under the Business Cooperation Agreement, upon Pledgee'srequest, Pledgors shall execute relevant agreements or other documents relating to such assignment.9.4因转让所导致的质权人变更后，应质权人要求，出质人应与新的质权人签订一份内容与本协议一致的新质押协议，并在相应的工商行政管理机关进行登记。In the event of a change in Pledgee due to an assignment, Pledgors shall, at the request of Pledgee, execute a new pledge agreement with the newpledgee on the same terms and conditions as this Agreement, and register the same with the relevant AIC.12秘密文件 Strictly Confidential9.5出质人应严格遵守本协议和各方单独或共同签署的其他有关协议的规定，包括独家购买权合同和对质权人的授权委托书，履行各协议项下的义务，并不进行任何足以影响协议的有效性和可强制执行性的作为/不作为。除非根据质权人的书面指示，出质人不得行使其对质押股权还留存的权利。Pledgors shall strictly abide by the provisions of this Agreement and other contracts jointly or separately executed by the Parties hereto or any of them,including the Exclusive Option Agreement and the Power of Attorney granted to Pledgee, perform the obligations hereunder and thereunder, and refrainfrom any action/omission that may affect the effectiveness and enforceability thereof. Any remaining rights of Pledgors with respect to the EquityInterest pledged hereunder shall not be exercised by Pledgors except in accordance with the written instructions of Pledgee.10.终止Termination在被担保债务被全部清偿或履行完毕之后，本质权人应在尽早合理可行的时间内办理或配合办理解除质押的手续，出质人与丙方应提供相应的配合与协助。Upon the full payment of all payments in pledge under the Business Cooperation Agreement a, Pledgor shall then, with the assistance of Party B and Party C,go through the procedures of cancellation of pledge rights at a reasonable time as soon as practicable.11.手续费及其他费用Handling Fees and Other Expenses一切与本协议有关的费用及实际开支，其中包括但不限于法律费用、工本费、印花税以及任何其他税收、费用等全部由丙方承担。All fees and out of pocket expenses relating to this Agreement, including but not limited to legal costs, costs of production, stamp tax and any other taxes andfees, shall be borne by Party C.13秘密文件 Strictly Confidential12.保密责任Confidentiality各方承认及确定有关本协议、本协议内容，以及彼此就准备或履行本协议而交换的任何口头或书面资料均被视为保密信息。各方应当对所有该等保密信息予以保密，而在未得到另一方书面同意前，不得向任何第三者披露任何保密信息，惟下列信息除外：(a)公众人士知悉或将会知悉的任何信息（惟并非由接受保密信息之一方擅自向公众披露）；(b)根据适用法律法规、股票交易规则、或政府部门或法院的命令而所需披露之任何信息；或(c)由任何一方就本协议所述交易而需向其股东、投资者、法律或财务顾问披露之信息，而该股东、法律或财务顾问亦需遵守与本条款相类似之保密责任。如任何一方工作人员或聘请机构的泄密均视为该方的泄密，需依本协议承担违约责任。无论本协议以任何理由终止，本条款仍然生效。The Parties acknowledge that the existence and the terms of this Agreement and any oral or written information exchanged between the Parties in connectionwith the preparation and performance this Agreement are regarded as confidential information. Each Party shall maintain confidentiality of all such confidentialinformation, and without obtaining the written consent of the other Party, it shall not disclose any relevant confidential information to any third parties, exceptfor the information that: (a) is or will be in the public domain (other than through the receiving Party’s unauthorized disclosure); (b) is under the obligation tobe disclosed pursuant to the applicable laws or regulations, rules of any stock exchange, or orders of the court or other government authorities; or (c) isrequired to be disclosed by any Party to its shareholders, investors, legal counsels or financial advisors regarding the transaction contemplated hereunder,provided that such shareholders, investors, legal counsels or financial advisors shall be bound by the confidentiality obligations similar to those set forth inthis Section. Disclosure of any confidential information by the staff members or agencies hired by any Party shall be deemed disclosure of such confidentialinformation by such Party, which Party shall be held liable for breach of this Agreement. This Section shall survive the termination of this Agreement for anyreason.14秘密文件 Strictly Confidential13.适用法律和争议的解决Governing Law and Resolution of Disputes13.1本协议的订立、效力、解释、履行、修改和终止以及争议的解决均适用中国法律。The execution, effectiveness, construction, performance, amendment and termination of this Agreement and the resolution of disputes hereunder shallbe governed by the laws of China.13.2因解释和履行本协议而发生的任何争议，本协议各方应首先通过友好协商的方式加以解决。如果在一方向其他方发出要求协商解决的书面通知后30天之内争议仍然得不到解决，则任何一方均可将有关争议提交给中国国际经济贸易仲裁委员会，由该会按照其仲裁规则仲裁解决。仲裁应在北京进行，使用之语言为中文。仲裁裁决是终局性的，对各方均有约束力。In the event of any dispute with respect to the construction and performance of this Agreement, the Parties shall first resolve the dispute throughfriendly negotiations. In the event the Parties fail to reach an agreement on the dispute within 30 days after either Party's request to the other Parties forresolution of the dispute through negotiations, either Party may submit the relevant dispute to the China International Economic and Trade ArbitrationCommission for arbitration, in accordance with its Arbitration Rules. The arbitration shall be conducted in Beijing, and the language used in arbitrationshall be Chinese. The arbitration award shall be final and binding on all Parties.13.3因解释和履行本协议而发生任何争议或任何争议正在进行仲裁时，除争议的事项外，本协议各方仍应继续行使各自在本协议项下的其他权利并履行各自在本协议项下的其他义务。Upon the occurrence of any disputes arising from the construction and performance of this Agreement or during the pending arbitration of any dispute,except for the matters under dispute, the Parties to this Agreement shall continue to exercise their respective rights under this Agreement and performtheir respective obligations under this Agreement.15秘密文件 Strictly Confidential14.通知Notices14.1本协议项下要求或发出的所有通知和其他通信应通过专人递送、挂号邮寄、邮资预付或商业快递服务或传真的方式发到该方下列地址。每一通知还应再以电子邮件送达。该等通知视为有效送达的日期按如下方式确定：All notices and other communications required or permitted to be given pursuant to this Agreement shall be delivered personally or sent by registeredmail, postage prepaid, by a commercial courier service or by facsimile transmission to the address of such party set forth below. A confirmation copy ofeach notice shall also be sent by Email. The dates on which notices shall be deemed to have been effectively given shall be determined as follows:14.1.1通知如果是以专人递送、快递服务或挂号邮寄、邮资预付发出的，则以于设定为通知的地址在接收或拒收之日为有效送达日。Notices given by personal delivery, by courier service or by registered mail, postage prepaid, shall be deemed effectively given on the date ofreceipt or refusal at the address specified for notices.14.1.2通知如果是以传真发出的，则以成功传送之日为有效送达日（应以自动生成的传送确认信息为证）。Notices given by facsimile transmission shall be deemed effectively given on the date of successful transmission (as evidenced by anautomatically generated confirmation of transmission).16秘密文件 Strictly Confidential14.2为通知的目的，各方地址如下：For the purpose of notices, the addresses of the Parties are as follows:甲方：中传天下信息科技（深圳）有限公司Party A: Zhongchuan Tianxia Information Technology (Shenzhen) Co., Ltd.地址：深圳市南山区高新中三道2号深圳软件园一期五栋401AAddress: 401A, Building 5, Phase 1, Shenzhen Software Park, No.2 Gaoxin Zhongsan Road, Nanshan District, Shenzhen.收件人：洪婷Attn: Hong Ting乙方：Party B:a)宋雪松Song Xuesong地址：125.Expenses, including legal fees, incurred by a director in defending any legal, administrative or investigative proceedings may be paid by the Company inadvance of the final disposition of such proceedings upon receipt of an undertaking by or on behalf of the director to repay the amount if it shall ultimatelybe determined that the director is not entitled to be indemnified by the Company in accordance with these Articles.126.Expenses, including legal fees, incurred by a former director in defending any legal, administrative or investigative proceedings may be paid by theCompany in advance of the final disposition of such proceedings upon receipt of an undertaking by or on behalf of the former director to repay the amountif it shall ultimately be determined that the director is not entitled to be indemnified by the Company in accordance with these Articles.127.The indemnification and advancement of expenses provided by, or granted pursuant to, these Articles is not exclusive of any other rights to which theperson seeking indemnification of advancement of expenses may be entitled under any agreement, resolution of members, resolution of disinteresteddirectors or otherwise, both as to acting in the person’s official capacity and as to acting in another capacity while serving as a director of the Company.128.If a person to be indemnified has been successful in defence of any proceedings referred to above the person is entitled to be indemnified against allexpenses, including legal fees, and against all judgments, fines and amounts paid in settlement and reasonably incurred by the person in connection withthe proceedings.129.The Company may purchase and maintain insurance in relation to any person who is or was a director, an officer or a liquidator of the Company, or who atthe request of the Company is or was serving as a director, an officer or a liquidator of, or in any other capacity is or was acting for, another body corporateor a partnership, joint venture, trust or other enterprise, against any liability asserted against the person and incurred by the person in that capacity,whether or not the Company has or would have had the power to indemnify the person against the liability as provided in these Articles.SEAL130.The Company shall have a Seal and may have more than one Seal. References herein to the Seal shall be references to every Seal which shall have beenduly adopted by resolution of directors. The directors shall provide for the safe custody of the Seal and for an imprint thereof to be kept at the office of theregistered agent of the Company. Except as otherwise expressly provided herein, the Seal when affixed to any written instrument, shall be witnessed andattested to by the signature of a director or any other person so authorized from time to time by resolution of directors. Such authorization may be before orafter the Seal is affixed, may be general or specific and may refer to any number of sealings. The Directors may provide for a facsimile of the Seal and of thesignature of any director or authorized person which may be reproduced by printing or other means on any instrument and it shall have the same force andvalidity as if the Seal had been affixed to such instrument and the same had been signed as hereinbefore described.21DISTRIBUTIONS131.The directors of the Company may by resolution authorise a distribution by the Company at any time and of any amount and to any members they think fitif they are satisfied on reasonable grounds that immediately after the distribution;a.the value of the Company’s assets will exceed its liabilities, andb.the Company will be able to pay its debts as they fall due.132.A resolution of the directors passed under the preceding Article shall contain a statement that, in the opinion of the directors, immediately after thedistribution the value of the Company’s assets will exceed its liabilities, and the Company will be able to pay its debts as they fall due.133.If, after a distribution is authorised and before it is made, the directors cease to be satisfied on reasonable grounds that the Company will, immediately afterthe distribution satisfy the solvency test, any distribution made by the Company is deemed not to have been authorised.134.If, by virtue of the preceding Article, a distribution is deemed not to have been authorised, a director who;a.ceased, after authorisation but before the making of the distribution, to be satisfied on reasonable grounds for believing that the company wouldsatisfy the solvency test immediately after the distribution is made; andb.failed to take reasonable steps to prevent the distribution being made;is personally liable to the company to repay to the company so much of the distribution as is not able to be recovered from members.135.A distribution made to a member at a time when the company did not, immediately after the distribution, satisfy the solvency test may be recovered by thecompany from the member unless;a.the member received the distribution in good faith and without knowledge of the company’s failure to satisfy the solvency test;b.the member has altered his position in reliance on the validity of the distribution; andc.it would be unfair to require repayment in full or at all.DISTRIBUTIONS BY WAY OF DIVIDEND136.The Company may by a resolution of directors declare a distribution by way of dividend and pay such distribution in money, shares or other property. Inthe event that distributions by way of dividend are paid in specie the directors shall have responsibility for establishing and recording in the resolution ofdirectors authorizing the distribution by way of dividend, a fair and proper value for the assets to be so distributed.137.The directors may from time to time pay to the members such interim distributions by way of dividend as appear to the directors to be justified by theprofits of the Company.138.The directors may, before declaring any distribution by way of dividend, set aside out of the profits of the Company such sum as they think proper as areserve fund, and may invest the sum so set aside as a reserve fund upon such securities as they may select.139.Notice of any distribution by way of dividend that may have been declared shall be given to each member in the manner hereinafter mentioned and alldistributions by way of dividend unclaimed for 3 years after having been declared may be forfeited by resolution of directors for the benefit of theCompany.140.No distribution by way of dividend shall bear interest as against the Company and no distribution by way of dividend shall be paid on treasury shares orshares held by another company of which the Company holds, directly or indirectly, shares having more than 50 percent of the vote in electing directors.22141.A share issued as a distribution by way of dividend by the Company shall be treated for all purposes as having been issued for money equal to the valuedetermined by resolution of the directors. In the absence of fraud the decision of the directors as to the value of the share is conclusive unless a questionof law is involved.142.A division of the issued and outstanding shares of a class or series of shares into a larger number of shares of the same class or series having aproportionately smaller par value does not constitute a distribution by way of dividend of shares.ACCOUNTS AND AUDIT143.The Company may by resolution of members call for the directors to prepare periodically a profit and loss account and a balance sheet. The profit and lossaccount and balance sheet shall be drawn up so as to give respectively a true and fair view of the profit and loss of the Company for the financial periodand a true and fair view of the state of affairs of the Company as at the end of the financial period.144.The Company may by resolution of members call for the accounts to be examined by auditors.145.Subject to the rules of the Designated Stock Exchange, the first auditors shall be appointed by resolution of directors; subsequent auditors shall beappointed by the Audit Committee and shall hold office until the Audit Committee appoint another independent auditor.146.Subject to the rules of the Designated Stock Exchange, the remuneration of the auditors of the Company shall be fixed by the Audit Committee.147.The auditors shall examine each profit and loss account and balance sheet required to be served on every member of the Company or laid before a meetingof the members of the Company and shall state in a written report whether or nota.in their opinion the profit and loss account and balance sheet give a true and fair view respectively of the profit and loss for the period covered bythe accounts, and of the state of affairs of the Company at the end of that period; andb.all the information and explanations required by the auditors have been obtained.148.The report of the auditors shall be annexed to the accounts and shall be read at the meeting of members at which the accounts are laid before the Companyor shall be served on the members.149.Every auditor of the Company shall have a right of access at all times to the books of account and vouchers of the Company, and shall be entitled to requirefrom the directors and officers of the Company such information and explanations as he thinks necessary for the performance of the duties of the auditors.150.The auditors of the Company shall be entitled to receive notice of, and to attend any meetings of members of the Company at which the Company’s profitand loss account and balance sheet are to be presented.NOTICES151.Any notice, information or written statement to be given by the Company to members may be served in any way by which it can reasonably be expected toreach each member or by mail addressed to each member at the address shown in the share register.152.Any summons, notice, order, document, process, information or written statement to be served on the Company may be served by leaving it, or by sendingit by registered mail addressed to the Company, at its registered office, or by leaving it with, or by sending it by registered mail to, the registered agent ofthe Company.153.Service of any summons, notice, order, document, process, information or written statement to be served on the Company may be proved by showing thatthe summons, notice, order, document, process, information or written statement was delivered to the registered office or the registered agent of theCompany or that it was mailed in such time as to admit to its being delivered to the registered office or the registered agent of the Company in the normalcourse of delivery within the period prescribed for service and was correctly addressed and the postage was prepaid.23PENSION AND SUPERANNUATION FUNDS154.The directors may establish and maintain or procure the establishment and maintenance of any noncontributory or contributory pension orsuperannuation funds for the benefit of, and give or procure the giving of donations, gratuities, pensions, allowances or emoluments to, any persons whoare or were at any time in the employment or service of the Company or any company which is a subsidiary of the Company or is allied to or associated withthe Company or with any such subsidiary, or who are or were at any time directors or officers of the Company or of any such other company as aforesaid orwho hold or held any salaried employment or office in the Company or such other company, or any persons in whose welfare the Company or any suchother company as aforesaid is or has been at any time interested, and to the wives, widows, families and dependents of any such person, and may makepayments for or towards the insurance of any such persons as aforesaid, and may do any of the matters aforesaid either alone or in conjunction with anysuch other company as aforesaid. Subject always to the proposal being approved by resolution of members, a director holding any such employment oroffice shall be entitled to participate in and retain for his own benefit any such donation, gratuity, pension allowance or emolument.VOLUNTARY WINDING UP AND DISSOLUTION155.The Company may voluntarily commence to wind up and dissolve by a resolution of members but if the Company has never issued shares it mayvoluntarily commence to wind up and dissolve by resolution of directors.CONTINUATION156.The Company may by resolution of members or by a resolution passed unanimously by all directors of the Company continue as a company incorporatedunder the laws of a jurisdiction outside the British Virgin Islands in the manner provided under those laws.ARBITRATION157.Whenever any difference arises between the Company on the one hand and any of the members or their executors, administrators or assigns on the otherhand, touching the true intent and construction or the incidence or consequences of these Articles or of the Act, touching anything done or executed,omitted or suffered in pursuance of the Act or touching any breach or alleged breach or otherwise relating to the premises or to these Articles, or to anyAct or Ordinance affecting the Company or to any of the affairs of the Company such difference shall, unless the parties agree to refer the same to a singlearbitrator, be referred to 2 arbitrators one to be chosen by each of the parties to the difference and the arbitrators shall before entering on the referenceappoint an umpire.158.If either party to the reference makes default in appointing an arbitrator either originally or by way of substitution (in the event that an appointed arbitratorshall die, be incapable of acting or refuse to act) for 10 days after the other party has given him notice to appoint the same, such other party may appoint anarbitrator to act in the place of the arbitrator of the defaulting party.We, Portcullis TrustNet (BVI) Limited of Portcullis TrustNet Chambers, P.O. Box 3444, Road Town, Tortola, British Virgin Islands for the purpose of incorporating aBVI Business Company under the laws of the British Virgin Islands hereby sign these Articles of Association the 27th day of October, 2009.Incorporator/s/ Nicole WheatleyPortcullis TrustNet (BVI) LimitedPortcullis TrustNet ChambersP.O. Box 3444Road Town, TortolaBritish Virgin Islands(Sgd. Nicole Wheatley)24EX4.15 3 f20f2017ex415_luokung.htm EXCLUSIVE BUSINESS COOPERATION AGREEMENT BY AND BETWEEN ZHONGCHUAN TIANXIA INFORMATIONTECHNOLOGY (SHENZHEN) CO., LTD., AND BEIJING MOBILE VISION TECHNOLOGY CO., LTD., DATED AUGUST 31, 2015Exhibit 4.15独家业务合作协议Exclusive Business Cooperation Agreement本独家业务合作协议（下称“本协议”）由以下双方于年月日在中华人民共和国（下称“中国”）北京市签署。This Exclusive Business Cooperation Agreement (this “Agreement”) is made and entered into by and between the following parties on in Beijing, thePeople’s Republic of China (“China” or the “PRC”).甲方：中传天下信息科技（深圳）有限公司Party A: Zhongchuan Tianxia Information Technology (Shenzhen) Co., Ltd.地址：深圳市南山区高新中三道2号深圳软件园一期五栋401A Address: 401A, Building 5, Phase 1, Shenzhen Software Park, No.2 Gaoxin Zhongsan Road, Nanshan District, Shenzhen统一社会信用代码：91440300565701058R Uniform Social Credit Code: 91440300565701058R乙方：北京中传视讯科技有限公司Party B: Beijing Mobile Vision Technology Co., Ltd.地址：北京市朝阳区光华路9号SOHO3QLAB32Address: LAB32, SOHO3Q, No 9, Guanghua Road, Chaoyang District, Beijing统一社会信用代码：9111010576215249XMUniform Social Credit Code: 9111010576215249XM甲方和乙方以下各称为“一方”，统称为“双方”。Each of Party A and Party B shall be hereinafter referred to as a “Party” respectively, and as “Parties” collectively.1秘密文件Strictly Confidential鉴于：Whereas,1.甲方是一家在中国注册的外商独资企业，拥有丰富的技术研发和产业化推广相关的管理和投资经验，并提供相关的技术支持和咨询服务；Party A is a whollyforeignowned enterprise established in China, which has rich experience in technology research development and industrializationpromotion management and investment, and provides relevant technical support and consulting services;2.乙方是一家在中国成立的有限责任公司，经中国有关政府部门批准依法主要从事手机视频技术开发、内容制作及市场推广；Party B is a limited company in China, mainly engages in mobile video technology research, development, content creation, sale and related industrialpromotion as approved by the relevant governmental authorities in China;3.甲方同意利用其技术、人员和信息优势，在本协议期间向乙方提供有关手机视频技术开发、内容制作及市场推广以及未来扩大业务规模和业务范围时乙方所需的技术支持、技术咨询等相关服务，乙方同意接受甲方或其指定方按本协议条款的规定提供的各种服务。Party A is willing to provide Party B with technology supports and technology consulting services in connection with mobile video technology research,development, content creation, sale and related industrial promotion and such services in connection with Party B’s extension of business scale orbroadening of businesses during the term of this Agreement, utilizing its advantages in technology, human resources, and information, and Party B iswilling to accept such services provided by Party A or Party A's designee(s), each on the terms set forth herein.2秘密文件Strictly Confidential据此，甲方和乙方经协商一致，达成如下协议：Now, therefore, through mutual discussion, the Parties have reached the following agreements:1.服务提供Services Provided by Party A1.1按照本协议条款和条件，乙方在此委任甲方在本协议期间作为乙方的独家服务提供者向乙方提供全面的和手机视频技术开发、内容制作及市场推广相关以及未来扩大业务规模和业务范围时乙方所需的技术支持、业务支持和相关咨询服务，具体内容包括但不限于以下内容：Party B hereby appoints Party A as Party B's exclusive services provider to provide Party B with complete technical support, business supportand related consulting services in connection with mobile video technology research, development, content creation, sale and related industrialpromotion and such services in connection with Party B’s extension of business scale or broadening of businesses during the term of thisAgreement, in accordance with the terms and conditions of this Agreement, which may include but not limited to:1.1.1为乙方提供其手机视频技术开发、内容制作及市场推广业务所需的一切服务支持，为乙方提供相当于包括总经理、行政人员、管理人员、筹划部门、商业运营、人力资源、财务、会计以及与乙方业务相关的一切业务操作所需人员所能提供的服务内容；managing all aspects of Party B’s business of mobile video technology research, development, content creation, sale and relatedindustrial promotion. In this capacity, Party A will procure or engage for Party B the services of a general manager and other managementstaff, including but not limited to personnel responsible for all administration, operations, planning, business development, humanresources, finance, accounting and other operations related to the Business of Party B;3秘密文件Strictly Confidential1.1.2为乙方制定全部的商业计划、销售目标，并为优化执行该等商业计划设计和建立相应的系统及操作程序；developing all business plans and sales projections of Party B, and for developing and establishing systems and procedures for optimumexecution of the business plans;1.1.3为乙方申请手机视频技术及内容制作相关专利提供咨询服务和支持；consulting services and support in connection with Party B’s applying for mobile video technology related patents and content creation;1.1.4为乙方手机视频技术产业化的发展方向、规模、品牌提升提供咨询服务；consulting services in connection with the development directions, size and business brands promotion of Party B’s mobile videotechnology industrialization;4秘密文件Strictly Confidential1.1.5为乙方提供与业务相关的办公、生产和销售服务，为乙方租赁场所，建立业务相关的系统和程序，满足乙方的其他要求；procuring or obtaining for Party B all office, production and distribution services related to the Business. It shall procure or obtainappropriate leases, establish systems and procedures needed to operate the business, fulfill orders for services;1.1.6尽最大努力为乙方建立手机视频技术销售市场，根据甲方为乙方制定的商业计划及销售目标代表乙方获取客户订单，同时为乙方提供与业务相关的客户服务，建立向客户开具票据的程序和与会计相关的托收服务。using its best efforts to establish mobile video technology related marketing and other structures to obtain orders for services &products from customers on behalf of Party B in accordance with Party B’s business plans, sales projections and objectives (asdeveloped by Party A) and procure or obtain customer services required in connection with the Business. It shall also establishprocedures for invoicing customers, and establish collection services with respect to accounts;1.1.7就乙方的劳动用工方面提供咨询服务和支持，包括但不限于，组织实施对乙方业务人员、行政人员、管理人员等人员进行培训和考核，协助建立健全的人力资源管理制度和实现人力资源的良好配置；consulting services and support regarding labor system of Party B, including but without limitation to labor training and evaluation ofsales person, administrative staff and management person etc. and establishment of human resources management system to well;5秘密文件Strictly Confidential1.1.8提供乙方需要的客户数据统计、分析及相关数据库的建设和维护等咨询服务；providing Party B with compile and analysis of client data and consulting services of establishment and maintenance of data base;1.1.9提供乙方需要的软件和相关技术支持服务；providing software Party B requires and other technical support;1.1.10接受乙方委托，对乙方的手机视频技术研发和产业化推广业务经营进行指导和管理；guiding and management on Party B’s business of mobile video technology research and development and related industrial promotionoperation according to Party B’s commission;1.1.11当乙方业务规模发展或业务范围扩大需要时，购买乙方业务经营需要的设备；in the event of the demand of Party B’s development of business scale or broadening of businesses, purchase the equipments which itneeds for the operation of its business;1.1.12当乙方业务规模发展或业务范围扩大需要时，完成乙方项目中的全部或部分工作；in the event of the demand of Party B’s development of business scale or broadening of businesses, complete the work of Party B’sproject in whole or in party;6秘密文件Strictly Confidential1.1.13当乙方业务规模发展或业务范围扩大需要时，开发新技术；in the event of the demand of Party B’s development of business scale or broadening of businesses, develop new technology;1.1.14乙方委托甲方，且甲方接受委托提供的其他服务。other services Party B appoints Party A to provide and Party A agrees to provide.1.2乙方接受甲方的咨询和服务。乙方进一步同意，除非经甲方事先书面同意，在本协议期间，就本协议约定的服务或其他事宜，乙方不得直接或间接地从任何第三方获得任何与本协议相同或类似的咨询和/或服务，并不得与任何第三方就本协议所述事项建立任何类似的合作关系。双方同意，甲方可以指定其他方（该被指定方可以与乙方签署本协议第1.3条描述的某些协议）为乙方提供本协议约定的服务和/或支持。Party B agrees to accept all the consultations and services provided by Party A. Party B further agrees that unless with Party A's prior writtenconsent, during the term of this Agreement, Party B shall not directly or indirectly accept the same or any similar consultations and/or servicesprovided by any third party and shall not establish similar corporation relationship with any third party regarding the matters contemplated by thisAgreement. Party A may appoint other parties, who may enter into certain agreements described in Section 1.3 with Party B, to provide Party Bwith the consultations and/or services under this Agreement.7秘密文件Strictly Confidential1.3服务的提供方式Service Providing Methodology1.3.1双方同意在本协议有效期内，视情况而定，乙方可以与甲方或甲方指定的其他方进一步签订技术服务协议和/或咨询服务协议，对各项业务培训、技术服务、咨询服务的具体内容、方式、人员、收费等进行约定。Parties agree that during the term of this Agreement, where necessary, Party B may enter into further technical service agreements and/orconsulting service agreements with Party A or any other party designated by Party A, which shall provide the specific contents, manner,personnel, and fees for the specific technical services and consulting services.1.3.2为更好地履行本协议，双方同意，在甲方认为必要时，乙方应在本协议有效期内与甲方或甲方指定的其他方根据业务进展需要随时签署协议，由甲方或其指定方向乙方提供服务。To fulfill this Agreement, Parties agree that during the term of this Agreement, where Party A deems necessary, Party B shall enter intoagreements with Party A or any other party designated by Party A which shall set forth that Party A or any other party designated byParty A provide services to Party B based on the needs of the business of Party B.8秘密文件Strictly Confidential2.服务的价格和支付方式The Calculation and Payment of the Service Fees双方同意，就甲方提供的服务，乙方应向甲方支付服务费（“服务费”）。服务费不应低于乙方税后利润的80%。服务费应当按季支付；经甲方事先书面同意，服务费可以根据乙方的经营需要进行调整。Both Parties agree that, in consideration of the services provided by Party A, Party B shall pay Party A fees (the “Service Fees”), which shall not be lessthan 80% of Party B’s aftertax profits . The Service Fees shall be due and payable on a quarterly basis; upon the prior written consent by Party A, the rateof Service Fees may be adjusted pursuant to the operational needs of Party B.3.知识产权和保密条款Intellectual Property Rights and Confidentiality Clauses3.1在中国法律允许的范围内，甲方对履行本协议而产生或创造的任何权利、所有权、权益和所有知识产权包括但不限于著作权、专利权、专利申请权、软件、技术秘密、商业机密及其他均享有独占的和排他的权利和利益。乙方须签署所有适当的文件，采取所有适当的行动，递交所有的文件和/或申请，提供所有适当的协助，以及做出所有其他依据甲方的自行决定认为是必要的行为，以将任何对该等知识产权的所有权、权利和权益赋予甲方，和/或完善对甲方此等知识产权权利的保护。To the extent permitted under the PRC laws, Party A shall have exclusive and proprietary rights and interests in all rights, ownership, interests andintellectual properties arising out of or created during the performance of this Agreement, including but not limited to copyrights, patents, patentapplications, software, technical secrets, trade secrets and others. Party B shall execute all appropriate documents, take all appropriate actions,submit all filings and/or applications, render all appropriate assistance and otherwise conduct whatever is necessary deemed as by Party A in itssole discretion for the purposes of vesting any ownership, right or interest of any such intellectual property rights in Party A, and/or perfectingthe protections for any such intellectual property rights in Party A.9秘密文件Strictly Confidential3.2双方承认及确定有关本协议、本协议内容，以及彼此就准备或履行本协议而交换的任何口头或书面资料均被视为保密信息。双方应当对所有该等保密信息予以保密，而在未得到另一方书面同意前，不得向任何第三者披露任何保密信息，惟下列信息除外：(a)公众人士知悉或将会知悉的任何信息（惟并非由接受保密信息之一方擅自向公众披露）；(b)根据适用法律法规、股票交易规则、或政府部门或法院的命令而所需披露之任何信息；或(c)由任何一方就本协议所述交易而需向其股东、投资者、法律或财务顾问披露之信息，而该股东、法律或财务顾问亦需遵守与本条款相类似之保密责任。如任何一方工作人员或聘请机构的泄密均视为该方的泄密，需依本协议承担违约责任。无论本协议以任何理由终止，本条款仍然生效。The Parties acknowledge that the existence and the terms of this Agreement and any oral or written information exchanged between the Parties inconnection with the preparation and performance this Agreement are regarded as confidential information. Each Party shall maintainconfidentiality of all such confidential information, and without obtaining the written consent of the other Party, it shall not disclose any relevantconfidential information to any third parties, except for the information that: (a) is or will be in the public domain (other than through the receivingParty’s unauthorized disclosure); (b) is under the obligation to be disclosed pursuant to the applicable laws or regulations, rules of any stockexchange, or orders of the court or other government authorities; or (c) is required to be disclosed by any Party to its shareholders, investors,legal counsels or financial advisors regarding the transaction contemplated hereunder, provided that such shareholders, investors, legal counselsor financial advisors shall be bound by the confidentiality obligations similar to those set forth in this Section. Disclosure of any confidentialinformation by the staff members or agencies hired by any Party shall be deemed disclosure of such confidential information by such Party, whichParty shall be held liable for breach of this Agreement. This Section shall survive the termination of this Agreement for any reason.3.3双方同意，不论本协议是否变更、解除或终止，本条款将持续有效。The Parties agree that this Section shall survive changes to, and rescission or termination of, this Agreement.4.陈述和保证Representations and Warranties4.1甲方陈述和保证如下：Party A hereby represents and warrants as follows:4.1.1甲方是按照中国法律合法注册并有效存续的外商独资企业。Party A is a whollyforeignowned enterprise legally registered and validly existing in accordance with the laws of China.10秘密文件Strictly Confidential4.1.2甲方已采取必要的公司行为，获得必要的授权，并取得第三方和政府部门的同意及批准（若需）以签署和履行本协议；甲方对本协议的签署和履行并不违反法律法规的明确规定。Party A has taken all necessary corporate actions, obtained all necessary authorization and the consent and approval from third partiesand government agencies (if any) for the execution and performance of this Agreement. Party A’s execution and performance of thisAgreement do not violate any explicit requirements under any law or regulation binding on Party A.4.1.3本协议构成对其合法、有效、有约束力并依本协议之条款对其强制执行的义务。This Agreement constitutes Party A's legal, valid and binding obligations, enforceable in accordance with its terms.4.2乙方陈述和保证如下：Party B hereby represents and warrants as follows:4.2.1乙方是按照中国法律合法登记且有效存续的有限责任公司，乙方根据政府部门的批准和许可从事手机视频技术开发、内容制作和产业化市场推广的经营。Party B is a limited company legally registered and validly existing in accordance with the laws of China, engages in mobile videotechnology research, development, content creation, sale and related industrial promotion pursuant to governmental approvals andpermits;11秘密文件Strictly Confidential4.2.2乙方已采取必要的行为，获得必要的授权，并取得第三方和政府部门的同意及批准（若需）以签署和履行本协议；乙方对本协议的签署和履行并不违反法律法规的明确规定。Party B has taken all necessary actions, obtained all necessary authorization and the consent and approval from third parties andgovernment agencies (if any) for the execution and performance of this Agreement. Party B’s execution and performance of thisAgreement do not violate any explicit requirements under any law or regulation binding on Party B.4.2.3本协议构成对其合法、有效、有约束力并依本协议之条款对其强制执行的义务。This Agreement constitutes Party B's legal, valid and binding obligations, and shall be enforceable against it.5.生效和有效期Effectiveness and Term5.1本协议于文首标明的协议日期签署并同时生效。除非依本协议或双方其他协议的约定而提前终止，本协议有效期为20年，但甲、乙双方应自本协议签署后，每3个月对本协议的内容做一次审查，以决定是否需要根据当时的情况对本协议作出相应修改和补充。This Agreement is executed on the date first above written and shall take effect as of such date. Unless earlier terminated in accordance with theprovisions of this Agreement or relevant agreements separately executed between the Parties, the term of this Agreement shall be 20 years. Afterthe execution of this Agreement, both Parties shall review this Agreement every 3 months to determine whether to amend or supplement theprovisions in this Agreement based on the actual circumstances at that time.12秘密文件Strictly Confidential5.2协议期满前，经甲方书面确认，本协议可以延期。延期的期限由甲方决定，乙方必须无条件地同意该延期。The term of this Agreement may be extended if confirmed in writing by Party A prior to the expiration thereof. The extended term shall bedetermined by Party A, and Party B shall accept such extended term unconditionally.6.终止Termination6.1除非依据本协议续期，本协议于到期之日终止。Unless renewed in accordance with the relevant terms of this Agreement, this Agreement shall be terminated upon the date of expiration hereof.6.2本协议有效期内，除非甲方对乙方有重大过失或存在欺诈行为，乙方不得提前终止本协议。尽管如此，甲方可在任何时候通过提前30天向乙方发出书面通知的方式终止本协议。During the term of this Agreement, unless Party A commits gross negligence, or a fraudulent act, against Party B, Party B shall not terminate thisAgreement prior to its expiration date. Nevertheless, Party A shall have the right to terminate this Agreement upon giving 30 days' prior writtennotice to Party B at any time.6.3在本协议终止之后，双方在第3、7和8条项下的权利和义务将继续有效。The rights and obligations of the Parties under Articles 3, 7 and 8 shall survive the termination of this Agreement.13秘密文件Strictly Confidential7.适用法律和争议解决Governing Law and Resolution of Disputes7.1本协议的订立、效力、解释、履行、修改和终止以及争议的解决适用中国的法律。The execution, effectiveness, construction, performance, amendment and termination of this Agreement and the resolution of disputes hereundershall be governed by the laws of China.7.2因解释和履行本协议而发生的任何争议，本协议双方应首先通过友好协商的方式加以解决。如果在一方向其他方发出要求协商解决的书面通知后30天之内争议仍然得不到解决，则任何一方均可将有关争议提交给中国国际经济贸易仲裁委员会，由该会按照其仲裁规则仲裁解决。仲裁应在北京进行，使用之语言为中文。仲裁裁决是终局性的，对各方均有约束力。In the event of any dispute with respect to the construction and performance of this Agreement, the Parties shall first resolve the dispute throughfriendly negotiations. In the event the Parties fail to reach an agreement on the dispute within 30 days after either Party's request to the otherParties for resolution of the dispute through negotiations, either Party may submit the relevant dispute to the China International Economic andTrade Arbitration Commission for arbitration, in accordance with its Arbitration Rules. The arbitration shall be conducted in Beijing, and thelanguage used in arbitration shall be Chinese. The arbitration award shall be final and binding on all Parties.14秘密文件Strictly Confidential7.3因解释和履行本协议而发生任何争议或任何争议正在进行仲裁时，除争议的事项外，本协议双方仍应继续行使各自在本协议项下的其他权利并履行各自在本协议项下的其他义务。Upon the occurrence of any disputes arising from the construction and performance of this Agreement or during the pending arbitration of anydispute, except for the matters under dispute, the Parties to this Agreement shall continue to exercise their respective rights under this Agreementand perform their respective obligations under this Agreement.8.补偿Indemnification就甲方根据本协议向乙方提供的咨询和服务内容所产生或引起的针对甲方的诉讼、请求或其他要求而招致的任何损失、损害、责任或费用都应由乙方补偿给甲方，以使甲方不受损害，除非该损失、损害、责任或费用是因甲方的重大过失或故意而产生的。Party B shall indemnify and hold harmless Party A from any losses, injuries, obligations or expenses caused by any lawsuit, claims or other demandsagainst Party A arising from or caused by the consultations and services provided by Party A to Party B pursuant this Agreement, except where suchlosses, injuries, obligations or expenses arise from the gross negligence or willful misconduct of Party A.15秘密文件Strictly Confidential9.通知Notices9.1本协议项下要求或发出的所有通知和其他通信应通过专人递送、挂号邮寄、邮资预付或快递服务或传真的方式发到该方下列地址。每一通知还应再以电子邮件送达。该等通知视为有效送达的日期按如下方式确定：All notices and other communications required or permitted to be given pursuant to this Agreement shall be delivered personally or sent byregistered mail, postage prepaid, by a courier service or by facsimile transmission to the address of such Party set forth below. A confirmationcopy of each notice shall also be sent by email. The dates on which notices shall be deemed to have been effectively given shall be determined asfollows:9.1.1通知如果是以专人递送、快递服务或挂号邮寄、邮资预付发出的，则以于设定为通知的地址在接收或拒收之日为有效送达日。Notices given by personal delivery, by courier service or by registered mail, postage prepaid, shall be deemed effectively given on thedate of receipt or refusal at the address specified for notices.9.1.2通知如果是以传真发出的，则以成功传送之日为有效送达日（应以自动生成的传送确认信息为证）。Notices given by facsimile transmission shall be deemed effectively given on the date of successful transmission (as evidenced by anautomatically generated confirmation of transmission).16秘密文件Strictly Confidential9.2为通知的目的，双方地址如下：For the purpose of notices, the addresses of the Parties are as follows:甲方：中传天下信息科技（深圳）有限公司Party A: Zhongchuan Tianxia Information Technology (Shenzhen) Co., Ltd.地址：深圳市南山区高新中三道2号深圳软件园一期五栋401AAddress:401A, Building 5, Phase 1, Shenzhen Software Park, No.2 Gaoxin Zhongsan Road, Nanshan District, Shenzhen收件人：洪婷Attn: Hong Ting乙方：北京中传视讯科技有限公司Party B: Beijing Mobile Vision Technology Co., Ltd地址：北京市朝阳区光华路9号SOHO3QLAB32Address: LAB32, SOHO3Q, No 9, Guanghua Road, Chaoyang District, Beijing.收件人：宋雪松Attn.: Song Xuesong9.3任何一方可按本条规定随时给另一方发出通知来改变其接收通知的地址。Any Party may at any time change its address for notices by a notice delivered to the other Party in accordance with the terms hereof.17秘密文件Strictly Confidential10.协议的转让Assignment10.1乙方不得将其在本协议项下的权利与义务转让给第三方，除非事先征得甲方的书面同意。Without Party A's prior written consent, Party B shall not assign its rights and obligations under this Agreement to any third party.10.2乙方在此同意，甲方可以在其需要时向其他第三方转让其在本协议项下的权利和义务，并在该等转让发生时甲方仅需向乙方发出书面通知，并且无需再就该等转让征得乙方的同意。Party B agrees that Party A may assign its obligations and rights under this Agreement to any third party upon a prior written notice to Party Bbut without the consent of Party B.11.协议的分割性Severability如果本协议有任何一条或多条规定根据任何法律或法规在任何方面被裁定为无效、不合法或不可执行，本协议其余规定的有效性、合法性或可执行性不应因此在任何方面受到影响或损害。双方应通过诚意磋商，争取以法律许可以及双方期望的最大限度内有效的规定取代那些无效、不合法或不可执行的规定，而该等有效的规定所产生的经济效果应尽可能与那些无效、不合法或不能强制执行的规定所产生的经济效果相似。In the event that one or several of the provisions of this Agreement are found to be invalid, illegal or unenforceable in any aspect in accordance with anylaws or regulations, the validity, legality or enforceability of the remaining provisions of this Agreement shall not be affected or compromised in any aspect.The Parties shall strive in good faith to replace such invalid, illegal or unenforceable provisions with effective provisions that accomplish to the greatestextent permitted by law and the intentions of the Parties, and the economic effect of such effective provisions shall be as close as possible to the economiceffect of those invalid, illegal or unenforceable provisions.18秘密文件Strictly Confidential12.协议的修改、补充Amendments and Supplements双方可以书面协议方式对本协议作出修改和补充。经过双方签署的有关本协议的修改协议和补充协议是本协议组成部分，具有与本协议同等的法律效力。Any amendments and supplements to this Agreement shall be in writing. The amendment agreements and supplementary agreements that have beensigned by the Parties and that relate to this Agreement shall be an integral part of this Agreement and shall have the same legal validity as this Agreement.13.语言和副本Language and Counterparts本协议以中文和英文书就，一式二份，甲乙双方各持一份，具有同等效力；中英文版本如有冲突，应以中文版为准。This Agreement is written in both Chinese and English language in two copies, each Party having one copy with equal legal validity; in case there is anyconflict between the Chinese version and the English version, the Chinese version shall prevail.本页其余部分刻意留为空白The Remainder of this page is intentionally left blank19秘密文件Strictly Confidential有鉴于此，双方已使得经其授权的代表于文首所述日期签署了本独家业务合作协议并即生效，以昭信守。IN WITNESS WHEREOF, the Parties have caused their authorized representatives to execute this Exclusive Business Cooperation Agreement as of thedate first above written.甲方：中传天下信息科技（深圳）有限公司（盖章）Party A: Zhongchuan Tianxia Information Technology (Shenzhen) Co., Ltd.(Seal)签字：By: /s/ Hong Ting 姓名：洪婷Name: Hong Ting职务：总经理Title: General Manager20秘密文件Strictly Confidential有鉴于此，双方已使得经其授权的代表于文首所述日期签署了本独家业务合作协议并即生效，以昭信守。IN WITNESS WHEREOF, the Parties have caused their authorized representatives to execute this Exclusive Business Cooperation Agreement as of thedate first above written. 乙方：北京中传视讯科技有限公司（盖章）Party B: Beijing Mobile Vision Technology Co., Ltd. (Seal)签字：By: /s/ Song Xuesong 姓名：宋雪松Name: Song Xuesong职务：董事长Title: Chairman of the Board21秘密文件Strictly ConfidentialEX4.16 4 f20f2017ex416_luokung.htm EXCLUSIVE OPTION AGREEMENT BY AND AMONG ZHONGCHUAN TIANXIA INFORMATION TECHNOLOGY(SHENZHEN) CO., LTD., XUESONG SONG, WEILI CHEN, PING WANG, DONGLAI LIU, AND BEIJING MOBILE VISION TECHNOLOGY CO., LTD., DATEDAUGUST 31, 2015Exhibit 4.16独家购买权协议Exclusive Option Agreement本独家购买权协议 (下称“本协议”) 由以下各方于年月日在中华人民共和国（下称“中国”）北京签订：This Exclusive Option Agreement (this “Agreement”) is executed by and among the Parties below as of in Beijing, the People’s Republic of China (the“China” or “PRC”):甲方：中传天下信息科技（深圳）有限公司，一家依照中国法律设立和存在的外商独资企业，地址为深圳市南山区高新中三道2号深圳软件园一期五栋401A；Party A:Zhongchuan Tianxia Information Technology (Shenzhen) Co., Ltd., a whollyforeignowned enterprise organized and existing under the laws of China,with its address at 401A, Building 5, Phase 1, Shenzhen Software Park, No.2 Gaoxin Zhongsan Road, Nanshan District, Shenzhen.乙方：Party B:a)宋雪松Song Xuesong身份证号码:120112196809040417ID Card No.:120112196809040417住所：天津市河西区广东路中裕园33702Address:Zhongyu Yuan 33702, Guangdong Road, Hexi District, Tianjinb)陈蔚力Chen Weili身份证号码:120106197309240516ID Card No.:120106197309240516住所：广东省深圳市宝安区宝城上川路15号Address:Baocheng Shangchuan Road 15, Baoan District, Shenzhen, Guangdong1秘密文件Strictly Confidentialc)王平Wang Ping身份证号码:35020319691030401xID Card No.:35020319691030401x住所：广东省深圳市南山区高新南环路36号彩虹之岸12栋4AAddress:Caihong Zhi’an Building No.12 Suite 4A, Gaoxin Nanhuan Road 36, Nanshan District, Shenzhen, Guangdongd)刘东来Liu Donglai身份证号码:120107196810103912ID Card No.:120107196810103912住所：天津市和平区南京路诚基经贸中心1号楼2门1702号Address:No 1702, Door 2, Build 1, Chengji Economic and Trade Centre, Nanjing Road, Heping District, Tianjin.丙方：北京中传视讯科技有限公司，一家依照中国法律设立和存在的有限责任公司，地址为北京市朝阳区光华路9号SOHO3QLAB32，统一社会信用代码为9111010576215249XM；Party C:Beijing Mobile Vision Technology Co., Ltd., a limited company duly registered in China, with its address at LAB32, SOHO3Q, No 9, Guanghua Road,Chaoyang District, Beijing and its uniform social credit code of 9111010576215249XM.2秘密文件Strictly Confidential在本协议中，甲方、乙方和丙方以下各称“一方”，合称“各方”。In this Agreement, each of Party A, Party B and Party C shall be referred to as a “Party” respectively, and they shall be collectively referred to as the“Parties”.鉴于，乙方系丙方股东并合计持有丙方100%股权，乙方将按本协议之条款授予甲方购买全部或部分该股权的权利。Whereas, Party B are the shareholders of Party C and jointly hold 100% of the equity interest in Party C, and Party B are willing to grant to Party A the rightto acquire such equity interest, in whole or in part, on the terms herein.现各方协商一致，达成如下协议：Now therefore, upon mutual discussion and negotiation, the Parties have reached the following agreement:1.股权买卖Sale and Purchase of Equity Interest1.1授予权利Option Granted乙方在此不可撤销地授予甲方在中国法律允许的前提下，按照甲方自行决定的行使步骤，并按照本协议第1.3条所述的价格，随时一次或多次从乙方购买或指定一人或多人(“被指定人”)从乙方购买其目前和将来所持有的丙方的全部或部分股权（无论乙方出资额和/或持股比例将来是否发生变化）的一项不可撤销的专有权(“股权购买权”)。除甲方和被指定人外，任何第三人均不得享有股权购买权或其他与乙方股权有关的权利。丙方特此同意乙方向甲方授予股权购买权。本款及本协议所规定的“人”指个人、公司、合营企业、合伙、企业、信托或非公司组织。Party B hereby irrevocably grant Party A an irrevocable and exclusive right to purchase, or designate one or more persons (each, a “Designee”) topurchase the equity interests in Party C now and in the future held by Party B (regardless whether Party B’s capital contribution amount and/orpercentage of shareholding will be changed in the future) once or at multiple times at any time in part or in whole at Party A’s sole and absolutediscretion to the extent permitted by Chinese laws and at the price described in Section 1.3 herein (such right being the “Equity Interest PurchaseOption”). Except for Party A and the Designee(s), no other person shall be entitled to the Equity Interest Purchase Option or other rights withrespect to the equity interests of Party B. Party C hereby agrees to the grant by Party B of the Equity Interest Purchase Option to Party A. Theterm “person” as used herein shall refer to individuals, corporations, partnerships, partners, enterprises, trusts or noncorporate organizations.3秘密文件Strictly Confidential1.2行使步骤Steps for Exercise of Equity Interest Purchase Option甲方行使其股权购买权以符合中国法律和法规的规定为前提。甲方行使股权购买权时，应向乙方发出书面通知(“股权购买通知”)，股权购买通知应载明以下事项：(a)甲方关于行使股权购买权的决定；(b)甲方拟从乙方购买的股权份额(“被购买的股权”)；和(c)被购买的股权的买入日期。Subject to the provisions of the laws and regulations of China, Party A may exercise the Equity Interest Purchase Option by issuing a writtennotice to Party B (the “Equity Interest Purchase Option Notice”), specifying: (a) Party A’s decision to exercise the Equity Interest PurchaseOption; (b) the portion of equity interests to be purchased from Party B (the “Optioned Interests”); and (c) the date for purchasing the OptionedInterests.1.3股权买价Equity Interest Purchase Price被购买的股权的买价（“股权买价”）应是行权当时中国法律允许的最低价格。乙方收到该股权对价后，应当提供给丙方与该股权买价相同金额的借款，该借款的期限为20年，且为无息。乙方应当在该借款期限届满时就该借款放弃对丙方的债权。The purchase price of the Optioned Interests (the “Equity Interest Purchase Price”) shall be the lowest price permitted by the laws of China. Afterreceiving the Equity Interest Purchase Price, Party B shall make an interestfree loan equivalent to the amount of Equity Interest Purchase Price toParty C, of which term is 20 years. Each member of Party B shall give up his(her) creditor’s right when the loan term expires.4秘密文件Strictly Confidential1.4转让被购买股权Transfer of Optioned Interests甲方每次行使股权购买权时：For each exercise of the Equity Interest Purchase Option:1.4.1乙方应责成丙方及时召开股东会会议，在该会议上，应通过批准乙方向甲方和/或被指定人转让被购买的股权的决议；Party B shall cause Party C to promptly convene a shareholders meeting, at which a resolution shall be adopted approving Party B’stransfer of the Optioned Interests to Party A and/or the Designee(s);1.4.2乙方应就其向甲方和/或被指定人转让被购买股权取得丙方其他股东同意该转让并放弃优先购买权的书面声明。Party B shall obtain written statements from the other shareholder of Party C giving consent to the transfer of the equity interest to PartyA and/or the Designee(s) and waiving any right of first refusal related thereto.1.4.3乙方应与甲方和/或(在适用的情况下)被指定人按照本协议及股权购买通知的规定，为每次转让签订股权转让协议；Party B shall execute a share transfer contract with respect to each transfer with Party A and/or each Designee (whichever is applicable),in accordance with the provisions of this Agreement and the Equity Interest Purchase Option Notice regarding the Optioned Interests;5秘密文件Strictly Confidential1.4.4有关方应签署所有其他所需协议、协议或文件，取得全部所需的政府批准和同意，并采取所有所需行动，在不附带任何担保权益的情况下，将被购买的股权的有效所有权转移给甲方和/或被指定人并使甲方和/或被指定人成为被购买的股权的登记在册所有人。为本款及本协议的目的，“担保权益”包括担保、抵押、第三方权利或权益，任何购股权、收购权、优先购买权、抵销权、所有权扣留或其他担保安排等；但为了明确起见，不包括在本协议、乙方股权质押协议项下产生的任何担保权益。本款及本协议所规定的“乙方股权质押协议”指甲方、乙方和丙方于本协议签署之日签订的股权质押协议，根据股权质押协议，乙方为担保丙方能履行丙方与甲方签订的独家业务合作协议项下的义务，而向甲方质押其在丙方的全部乙方股权。The relevant Parties shall execute all other necessary contracts, agreements or documents, obtain all necessary government licenses andpermits and take all necessary actions to transfer valid ownership of the Optioned Interests to Party A and/or the Designee(s),unencumbered by any security interests, and cause Party A and/or the Designee(s) to become the registered owner(s) of the OptionedInterests. For the purpose of this Section and this Agreement, “security interests” shall include securities, mortgages, third party’s rightsor interests, any stock options, acquisition right, right of first refusal, right to offset, ownership retention or other security arrangements,but shall be deemed to exclude any security interest created by this Agreement and Party B’s Equity Interest Pledge Agreement. “PartyB’s Equity Interest Pledge Agreement” as used in this Section and this Agreement shall refer to the Equity Interest Pledge Agreementexecuted by and among Party A, Party B and Party C on the date of this Agreement, whereby Party B pledge all of their equity interests inParty C to Party A, in order to guarantee Party C’s performance of its obligations under the Exclusive Business Corporation Agreementexecuted by and between Party C and Party A.6秘密文件Strictly Confidential2.知识产权独家购买权Exclusive Option regarding the Intellectual Property Rights2.1本协议签订之日起，若乙方拟转让、出售或以其他方式处置（任一处置方式以下简称“转让”）其拥有或持有的全部或部分知识产权（以下称“知识产权”，定义见第2.4条），甲方有权独家购买该等知识产权。From the date hereof, if Party B proposes to transfer, sell or dispose of (each, a “transfer”) all or any part of the intellectual property rights ownedor held by Party B (“IPR”), Party A shall have exclusive option.2.2若乙方有意转让全部或部分知识产权，应事先向甲方发出书面通知(“转让通知”)，转让通知应载明以下事项：(a) 乙方关于转让知识产权的意向；(b) 乙方拟转让的知识产权清单(“拟转让知识产权”)及转让的价格和其他条件。转让通知视为乙方向甲方发出的一份要约，按照该要约，乙方同意按转让通知中指定的价格条件向甲方转让全部或部分拟转让知识产权。Prior to Party B proposes to transfer all or any part of its IPR, Party B shall give Party A a written notice (“Transfer Notice”), which shall specify (a)Party B’s intention to make the transfer; (b) the list of IPR to be transferred (“Offered IPR”) and the consideration and other conditions uponwhich the transfer is to be made. The Transfer Notice constitutes Party B’s offer given to Party A, pursuant to which, Party B agrees to transfer allor any part of its Offered IPR to Party A based on the same conditions described in the Transfer Notice.7秘密文件Strictly Confidential2.3甲方收到转让通知后，有权在30日内选择按照转让通知中列明的转让价格和条件购买拟转让知识产权。如果甲方行使其独家购买权，双方应于甲方收到转让通知后45日内签订有关的知识产权转让协议，乙方应办理法律规定的知识产权转让的批准和登记手续。Party A shall have an option for a period of 30 days from Party A’s receipt of the Transfer Notice to elect to purchase the Offered IPR at the sameprice and subject to the same conditions as described in the Transfer Notice. If Party A decides to exercise its exclusive option, the parties shallenter into relevant IPR transfer agreement within 45 days upon Party A’s receipt of the Transfer Notice and Party B is responsible to complete allrelated approvals and registrations formalities as prescribed by the PRC law.2.4本协议第2条所称“知识产权”指任何知识产权，包括但不限于著作权、专利权、专利申请权、商标、域名、软件、专有技术，并包括前述知识产权申请权利以及登记注册的权利，以及其他所有与前述知识产权有关的权利和权益。The “IPR” referred to in this Article 2 means any intellectual property rights, including, without limitations, copyrights, patents, patentapplications, trademarks, domain names, software and knowhow together with (a) all rights to apply for or register any of the foregoing and (b) allother rights and interests to any of the foregoing.8秘密文件Strictly Confidential3.承诺Covenants3.1有关丙方的承诺Covenants regarding Party C乙方（作为丙方的股东）和丙方在此承诺：Party B (as the shareholders of Party C) and Party C hereby covenant as follows:3.1.1未经甲方的事先书面同意，不以任何形式补充、更改或修改丙方公司章程文件，增加或减少其注册资本，或以其他方式改变其注册资本结构；Without the prior written consent of Party A, they shall not in any manner supplement, change or amend the articles of association andbylaws of Party C, increase or decrease its registered capital, or change its structure of registered capital in other manners;3.1.2按照良好的财务和商业标准及惯例，保持其公司的存续，审慎地及有效地经营其业务和处理事务；They shall maintain Party C’s corporate existence in accordance with good financial and business standards and practices by prudentlyand effectively operating its business and handling its affairs;3.1.3未经甲方的事先书面同意，不在本协议签署之日起的任何时间出售、转让、抵押或以其他方式处置丙方的任何资产、业务或收入的合法或受益权益，或允许在其上设置任何其他担保权益；Without the prior written consent of Party A, they shall not at any time following the date hereof, sell, transfer, mortgage or dispose of inany manner any assets of Party C or legal or beneficial interest in the business or revenues of Party C, or allow the encumbrance thereonof any security interest;3.1.4未经甲方的事先书面同意，不发生、继承、保证或容许存在任何债务，但(i)正常或日常业务过程中产生而不是通过借款方式产生的债务；和(ii)已向甲方披露和得到甲方书面同意的债务除外；Without the prior written consent of Party A, they shall not incur, inherit, guarantee or suffer the existence of any debt, except for (i)debts incurred in the ordinary course of business other than through loans; and (ii) debts disclosed to Party A for which Party A’swritten consent has been obtained;9秘密文件Strictly Confidential3.1.5一直在正常业务过程中经营所有业务，以保持丙方的资产价值，不进行任何足以影响其经营状况和资产价值的作为/不作为；They shall always operate all of Party C’s businesses during the ordinary course of business to maintain the asset value of Party C andrefrain from any action/omission that may affect Party C’s operating status and asset value;3.1.6未经甲方的事先书面同意，不得让丙方签订任何重大协议，但在正常业务过程中签订的协议除外(就本段而言，如果一份协议的价值超过【人民币10万元】，即被视为重大协议)；Without the prior written consent of Party A, they shall not cause Party C to execute any major contract, except the contracts in theordinary course of business (for purpose of this subsection, a contract with a value exceeding RMB 100,000 shall be deemed a majorcontract);3.1.7未经甲方的事先书面同意，丙方不得向任何人提供贷款或信贷；Without the prior written consent of Party A, they shall not cause Party C to provide any person with any loan or credit;3.1.8应甲方要求，向其提供所有关于丙方的营运和财务状况的资料；They shall provide Party A with information on Party C’s business operations and financial condition at Party A’s request;10秘密文件Strictly Confidential3.1.9如甲方提出要求，丙方应从甲方接受的保险公司处购买和持有有关其资产和业务的保险，该保险的金额和险种应与经营类似业务的公司一致；If requested by Party A, they shall procure and maintain insurance in respect of Party C’s assets and business from an insurance carrieracceptable to Party A, at an amount and type of coverage typical for companies that operate similar businesses;3.1.10未经甲方的事先书面同意，丙方不得与任何人合并或联合，或对任何人进行收购或投资；Without the prior written consent of Party A, they shall not cause or permit Party C to merge, consolidate with, acquire or invest in anyperson;3.1.11将发生的或可能发生的与丙方资产、业务或收入有关的诉讼、仲裁或行政程序立即通知甲方；They shall immediately notify Party A of the occurrence or possible occurrence of any litigation, arbitration or administrative proceedingsrelating to Party C’s assets, business or revenue;3.1.12为保持丙方对其全部资产的所有权，签署所有必要或适当的文件，采取所有必要或适当的行动和提出所有必要或适当的控告或对所有索偿进行必要和适当的抗辩；To maintain the ownership by Party C of all of its assets, they shall execute all necessary or appropriate documents, take all necessary orappropriate actions and file all necessary or appropriate complaints or raise necessary and appropriate defenses against all claims;11秘密文件Strictly Confidential3.1.13未经甲方事先书面同意，不得以任何形式派发股息予各股东，但一经甲方要求，丙方应立即将其所有可分配利润全部立即分配给其各股东；及Without the prior written consent of Party A, they shall ensure that Party C shall not in any manner distribute dividends to itsshareholders, provided that upon Party A’s written request, Party C shall immediately distribute all distributable profits to itsshareholders; and3.1.14根据甲方的要求，委任由其指定的任何人士出任丙方的董事和/或执行董事。At the request of Party A, they shall appoint any persons designated by Party A as the director and/or executive director of Party C.3.2乙方和丙方的承诺Covenants of Party B and Party C乙方承诺：Party B hereby covenant as follows:3.2.1未经甲方的事先书面同意，不出售、转让、抵押或以其他方式处置其拥有的丙方的股权的合法或受益权益，或允许在其上设置任何其他担保权益，但根据乙方签署的《股权质押协议》在该股权上设置的质押则除外；Without the prior written consent of Party A, Party B shall not sell, transfer, mortgage or dispose of in any other manner any legal orbeneficial interest in the equity interests in Party C held by Party B, or allow the encumbrance thereon of any security interest, except forthe pledge placed on these equity interests in accordance with Party B’s Equity Interest Pledge Agreement;12秘密文件Strictly Confidential3.2.2促使丙方股东会和/或执行董事不批准在未经甲方的事先书面同意的情况下，出售、转让、抵押或以其他方式处置任何乙方持有之丙方的股权的合法权益或受益权，或允许在其上设置任何其他担保权益，但批准根据乙方签署的《股权质押协议》在乙方股权上设置的质押则除外；Party B shall cause the shareholders’ meeting and/or the executive director of Party C not to approve the sale, transfer, mortgage ordisposition in any other manner of any legal or beneficial interest in the equity interests in Party C held by Party B, or allow theencumbrance thereon of any security interest, without the prior written consent of Party A, except for the pledge placed on these equityinterests in accordance with Party B’s Equity Interest Pledge Agreement;3.2.3未经甲方的事先书面同意的情况下，对于丙方与任何人合并或联合，或对任何人进行收购或投资，乙方将促成丙方股东会或执行董事不予批准；Party B shall cause the shareholders’ meeting or the executive director of Party C not to approve the merger or consolidation with anyperson, or the acquisition of or investment in any person, without the prior written consent of Party A;3.2.4将发生的或可能发生的任何关于其所拥有的股权的诉讼、仲裁或行政程序立即通知甲方；Party B shall immediately notify Party A of the occurrence or possible occurrence of any litigation, arbitration or administrativeproceedings relating to the equity interests in Party C held by Party B;13秘密文件Strictly Confidential3.2.5促使丙方股东会或执行董事表决赞成本协议规定的被购买的股权的转让并应甲方之要求采取其他任何行动；Party B shall cause the shareholders’ meeting or the executive director of Party C to vote their approval of the transfer of the OptionedInterests as set forth in this Agreement and to take any and all other actions that may be requested by Party A;3.2.6为保持其对股权的所有权，签署所有必要或适当的文件，采取所有必要或适当的行动和提出所有必要或适当的控告或对所有索偿进行必要和适当的抗辩；To the extent necessary to maintain Party B’s ownership in Party C, Party B shall execute all necessary or appropriate documents, take allnecessary or appropriate actions and file all necessary or appropriate complaints or raise necessary and appropriate defenses against allclaims;3.2.7应甲方的要求，委任由其指定的任何人士出任丙方的董事和/或执行董事；Party B shall appoint any designee of Party A as the director and/or executive director of Party C, at the request of Party A;3.2.8经甲方随时要求，应向其指定的代表在任何时间无条件地根据本协议的股权购买权立即转让其股权，并放弃其对其他现有股东进行上述股权转让所享有的优先购买权（如有的话）；和At the request of Party A at any time, Party B shall promptly and unconditionally transfer its equity interests in Party C to Party A’sDesignee(s) in accordance with the Equity Interest Purchase Option under this Agreement, and Party B hereby waives its right of firstrefusal (if any) to the share transfer by the other existing shareholder of Party C (if any); and14秘密文件Strictly Confidential3.2.9严格遵守本协议及各方共同或分别签订的其他协议的各项规定，切实履行该等协议项下的各项义务，并不进行任何足以影响该等协议的有效性和可执行性的作为/不作为。如果乙方对于本协议项下或乙方股权质押协议下或对甲方的授权委托书中的股权，还留存有任何权利，除非甲方书面指示，否则乙方仍不得行使该权利。Party B shall strictly abide by the provisions of this Agreement and other contracts jointly or separately executed by and among Party B,Party C and Party A, perform the obligations hereunder and thereunder, and refrain from any action/omission that may affect theeffectiveness and enforceability thereof. To the extent that Party B has any remaining rights with respect to the equity interests subject tothis Agreement hereunder or under Party B’s Equity Interest Pledge Agreement or under the Power of Attorney granted in favor of PartyA, Party B shall not exercise such rights except in accordance with the written instructions of Party A.4.陈述和保证Representations and Warranties乙方和丙方特此在本协议签署之日和每一个转让日向甲方共同及分别陈述和保证如下：Party B and Party C hereby represent and warrant to Party A, jointly and severally, as of the date of this Agreement and each date of transfer of theOptioned Interests, that:4.1其具有签订和交付本协议和其为一方的、根据本协议为每一次转让被购买的股权而签订的任何股权转让协议(各称为"转让协议")，并履行其在本协议和任何转让协议项下的义务的权力和能力。乙方和丙方同意在甲方行使购买权时，他们将签署与本协议条款一致的转让协议。本协议和其是一方的各转让协议一旦签署后，构成或将对其构成合法、有效及具有约束力的义务并可按照其条款对其强制执行；They have the authority to execute and deliver this Agreement and any share transfer contracts to which they are a party concerning theOptioned Interests to be transferred thereunder (each, a “Transfer Contracts”), and to perform their obligations under this Agreement and anyTransfer Contracts. Party B and Party C agree to enter into Transfer Contracts consistent with the terms of this Agreement upon Party A’s exerciseof the Equity Interest Purchase Option. This Agreement and the Transfer Contracts to which they are a party constitute or will constitute theirlegal, valid and binding obligations and shall be enforceable against them in accordance with the provisions thereof;15秘密文件Strictly Confidential4.2无论是本协议或任何转让协议的签署和交付还是其在本协议或任何转让协议项下的义务的履行均不会：(i)导致违反任何有关的中国法律；(ii)与丙方章程或其他组织文件相抵触；(iii)导致违反其是一方或对其有约束力的任何协议或文件，或构成其是一方或对其有约束力的任何协议或文件项下的违约；(iv)导致违反有关向任何一方颁发的任何许可或批准的授予和(或)继续有效的任何条件；或(v)导致向任何一方颁发的任何许可或批准中止或被撤销或附加条件；The execution and delivery of this Agreement or any Transfer Contracts and the obligations under this Agreement or any Transfer Contracts shallnot: (i) cause any violation of any applicable laws of China; (ii) be inconsistent with the articles of association, bylaws or other organizationaldocuments of Party C; (iii) cause the violation of any contracts or instruments to which they are a party or which are binding on them, orconstitute any breach under any contracts or instruments to which they are a party or which are binding on them; (iv) cause any violation of anycondition for the grant and/or continued effectiveness of any licenses or permits issued to either of them; or (v) cause the suspension orrevocation of or imposition of additional conditions to any licenses or permits issued to either of them;4.3乙方对其在丙方拥有的股权拥有良好和可出售的所有权，除乙方签署的《股权质押协议》外，乙方在上述股权上没有设置任何担保权益；Party B have a good and merchantable title to the equity interests in Party C they hold. Except for Party B’s Equity Interest Pledge Agreement,Party B have not placed any security interest on such equity interests;16秘密文件Strictly Confidential4.4目前没有悬而未决的或构成威胁的与丙方的股权、丙方资产有关的或与丙方有关的诉讼、仲裁或行政程序。There are no pending or threatened litigation, arbitration or administrative proceedings relating to the equity interests in Party C, assets of Party Cor Party C.5.生效日Effective Date5.1本协议于各方签署本协议之日生效，有效期10年，经甲方选择可再延长10年。This Agreement shall become effective upon the date hereof, and remain effective for a term of 10 years, and may be renewed for an additional 10years at Party A’s election.5.2若丙方股东发生变化，由新股东签署此协议，在此协议签署之日，原协议自动视为无效。In the event of a change in the shareholders of Party C, the new shareholder should sign this agreement and the original agreement willautomatically be deemed invalid on the date of signing of this agreement.17秘密文件Strictly Confidential6.适用法律与争议解决Governing Law and Resolution of Disputes6.1适用法律Governing law本协议的订立、效力、解释、履行、修改和终止以及争议解决均适用中国正式公布并可公开得到的法律。对中国正式公布并可公开得到的法律没有规定的事项，将适用国际法律原则和惯例。The execution, effectiveness, construction, performance, amendment and termination of this Agreement and the resolution of disputes hereundershall be governed by the formally published and publicly available laws of China. Matters not covered by formally published and publiclyavailable laws of China shall be governed by international legal principles and practices.6.2争议的解决方法Methods of Resolution of Disputes因解释和履行本协议而发生的任何争议，本协议各方应首先通过友好协商的方式加以解决。如果在一方向其他方发出要求协商解决的书面通知后30天之内争议仍然得不到解决，则任何一方均可将有关争议提交给中国国际经济贸易仲裁委员会，由该会按照其届时有效的仲裁规则仲裁解决。仲裁应在北京进行，使用之语言为中文。仲裁裁决是终局性的，对各方均有约束力。In the event of any dispute with respect to the construction and performance of this Agreement, the Parties shall first resolve the dispute throughfriendly negotiations. In the event the Parties fail to reach an agreement on the dispute within 30 days after either Party’s request to the otherParties for resolution of the dispute through negotiations, either Party may submit the relevant dispute to the China International Economic andTrade Arbitration Commission for arbitration, in accordance with its then effective arbitration rules. The arbitration shall be conducted in Beijing,and the language used in arbitration shall be Chinese. The arbitration award shall be final and binding on all Parties.18秘密文件Strictly Confidential7.税款、费用Taxes and Fees每一方应承担根据中国法律因准备和签署本协议和各转让协议以及完成本协议和各转让协议拟定的交易而由该方发生的或对其征收的任何和全部的转让和注册的税、花费和费用。Each Party shall pay any and all transfer and registration tax, expenses and fees incurred thereby or levied thereon in accordance with the laws of China inconnection with the preparation and execution of this Agreement and the Transfer Contracts, as well as the consummation of the transactionscontemplated under this Agreement and the Transfer Contracts.8.通知Notices8.1本协议项下要求或发出的所有通知和其他通信应通过专人递送、挂号邮寄、邮资预付或商业快递服务或传真的方式发到该方下列地址。每一通知还应再以电子邮件送达。该等通知视为有效送达的日期按如下方式确定：All notices and other communications required or permitted to be given pursuant to this Agreement shall be delivered personally or sent byregistered mail, postage prepaid, by a commercial courier service or by facsimile transmission to the address of such Party set forth below. Aconfirmation copy of each notice shall also be sent by email. The dates on which notices shall be deemed to have been effectively given shall bedetermined as follows:8.1.1通知如果是以专人递送、快递服务或挂号邮寄、邮资预付发出的，则以于设定为通知的地址在接收或拒收之日为有效送达日。Notices given by personal delivery, by courier service or by registered mail, postage prepaid, shall be deemed effectively given on thedate of receipt or refusal at the address specified for notices.19秘密文件Strictly Confidential8.1.2通知如果是以传真发出的，则以成功传送之日为有效送达日（应以自动生成的传送确认信息为证）。Notices given by facsimile transmission shall be deemed effectively given on the date of successful transmission (as evidenced by anautomatically generated confirmation of transmission).8.2为通知的目的，各方地址如下：For the purpose of notices, the addresses of the Parties are as follows:甲方：中传天下信息科技（深圳）有限公司Party A:Zhongchuan Tianxia Information Technology (Shenzhen) Co., Ltd.地址：深圳市南山区高新中三道2号深圳软件园一期五栋401AAddress:401A, Building 5, Phase 1, Shenzhen Software Park, No.2 Gaoxin Zhongsan Road, Nanshan District, Shenzhen.收件人：洪婷Attn:Hong Ting乙方：Party B: 宋雪松Song Xuesong住所：天津市河西区广东路中裕园33702Address:Zhongyu Yuan 33702, Guangdong Road, Hexi District, Tianjin20秘密文件Strictly Confidential陈蔚力Chen Weili住所：广东省深圳市宝安区宝城上川路15号Address:Baocheng Shangchuan Road 15, Baoan District, Shenzhen, Guangdong王平Wang Ping住所：广东省深圳市南山区高新南环路36号彩虹之岸12栋4AAddress:Caihong Zhi’an Building No.12 Suite 4A, Gaoxin Nanhuan Road 36, Nanshan District, Shenzhen, Guangdong刘东来Liu Donglai住所：天津市和平区南京路诚基经贸中心1号楼2门1702号Address:No 1702, Door 2, Build 1, Chengji Economic and Trade Centre, Nanjing Road, Heping District, Tianjin.丙方：北京中传视讯科技有限公司Party C:Beijing Mobile Vision Technology Co., Ltd.地址：北京市朝阳区光华路9号SOHO3QLAB32Address: LAB32, SOHO3Q, No 9, Guanghua Road, Chaoyang District, Beijing .收件人：宋雪松Attn: Song Xuesong8.3任何一方可按本条规定随时给其他方发出通知来改变其接收通知的地址。Any Party may at any time change its address for notices by a notice delivered to the other Parties in accordance with the terms hereof.21秘密文件Strictly Confidential9.保密责任Confidentiality各方承认及确定彼此就有关本协议而交换的任何口头或书面资料均属机密资料。各方应当对所有该等资料予以保密，而在未得其他方书面同意前，不得向任何第三者披露任何有关资料，惟下列情况除外：(a)公众人士知悉或将会知悉该等资料(并非由接受资料之一方擅自向公众披露)；(b)适用法律法规或股票交易的规则或规例所需披露之资料；或(c)由任何一方就本协议所述交易而需向其法律或财务顾问披露之资料而该法律或财务顾问亦需遵守与本条款相类似之保密责任。如任何一方工作人员或聘请机构的泄密均视为该方的泄密，需依本协议承担违约责任。无论本协议以任何理由终止，本条款仍然生效。The Parties acknowledge that any oral or written information exchanged among them with respect to this Agreement is confidential information. Each Partyshall maintain the confidentiality of all such information, and without obtaining the written consent of other Parties, it shall not disclose any relevantinformation to any third parties, except in the following circumstances: (a) such information is or will be in the public domain (provided that this is not theresult of a public disclosure by the receiving party); (b) information disclosed as required by applicable laws or rules or regulations of any stock exchange;or (c) information required to be disclosed by any Party to its legal counsel or financial advisor regarding the transaction contemplated hereunder, and suchlegal counsel or financial advisor are also bound by confidentiality duties similar to the duties in this section. Disclosure of any confidential information bythe staff members or agency hired by any Party shall be deemed disclosure of such confidential information by such Party, which Party shall be held liablefor breach of this Agreement. This Section shall survive the termination of this Agreement for any reason.22秘密文件Strictly Confidential10.进一步保证Further Warranties各方同意迅速签署为执行本协议的各项规定和目的而合理需要的或对其有利的文件，以及为执行本协议的各项规定和目的而采取合理需要的或对其有利的进一步行动。The Parties agree to promptly execute documents that are reasonably required for or are conducive to the implementation of the provisions and purposes ofthis Agreement and take further actions that are reasonably required for or are conducive to the implementation of the provisions and purposes of thisAgreement.11.其他Miscellaneous11.1修订、修改与补充Amendment, change and supplement对本协议作出修订、修改与补充，必须经每一方签署书面协议。Any amendment, change and supplement to this Agreement shall require the execution of a written agreement by all of the Parties.11.2完整协议Entire agreement除了在本协议签署后所作出的书面修订、补充或修改以外，本协议构成本协议各方就本协议标的物所达成的完整协议，取代在此之前就本协议标的物所达成的所有口头或书面的协商、陈述和协议。 Except for the amendments, supplements or changes in writing executed after theexecution of this Agreement, this Agreement shall constitute the entire agreement reached by and among the Parties hereto with respect to thesubject matter hereof, and shall supercede all prior oral and written consultations, representations and contracts reached with respect to thesubject matter of this Agreement.23秘密文件Strictly Confidential11.3标题Headings本协议的标题仅为方便阅读而设，不应被用来解释、说明或在其他方面影响本协议各项规定的含义。The headings of this Agreement are for convenience only, and shall not be used to interpret, explain or otherwise affect the meanings of theprovisions of this Agreement.11.4语言Language本协议以中文和英文书就，一式八份，乙方共计六名股东以及甲方、丙方各持一份，具有同等效力；中英文版本如有冲突，应以中文版为准。This Agreement is written in both Chinese and English language in eight copies, the 6 shareholders of Party B, Party A and Party C having onecopy with equal legal validity respectively; in case there is any conflict between the Chinese version and the English version, the Chinese versionshall prevail.11.5可分割性Severability如果本协议有任何一条或多条规定根据任何法律或法规在任何方面被裁定为无效、不合法或不可执行，本协议其余规定的有效性、合法性或可执行性不应因此在任何方面受到影响或损害。各方应通过诚意磋商，争取以法律许可以及各方期望的最大限度内有效的规定取代那些无效、不合法或不可执行的规定，而该等有效的规定所产生的经济效果应尽可能与那些无效、不合法或不能强制执行的规定所产生的经济效果相似。In the event that one or several of the provisions of this Agreement are found to be invalid, illegal or unenforceable in any aspect in accordancewith any laws or regulations, the validity, legality or enforceability of the remaining provisions of this Agreement shall not be affected orcompromised in any respect. The Parties shall strive in good faith to replace such invalid, illegal or unenforceable provisions with effectiveprovisions that accomplish to the greatest extent permitted by law and the intentions of the Parties, and the economic effect of such effectiveprovisions shall be as close as possible to the economic effect of those invalid, illegal or unenforceable provisions.24秘密文件Strictly Confidential11.6继任者Successors本协议对各方各自的继任者和各方所允许的受让方应具有约束力并对其有利。This Agreement shall be binding on and shall inure to the interest of the respective successors of the Parties and the permitted assigns of suchParties.11.7继续有效Survival11.7.1协议期满或提前终止前因本协议而发生的或到期的任何义务在本协议期满或提前终止后继续有效。Any obligations that occur or that are due as a result of this Agreement upon the expiration or early termination of this Agreement shallsurvive the expiration or early termination thereof.11.7.2本协议第5、6、9条和本第11.7条的规定在本协议终止后继续有效。The provisions of Articles 5, 6, 9 and this Section 11.7 shall survive the termination of this Agreement.25秘密文件Strictly Confidential11.8弃权Waivers任何一方可以对本协议的条款和条件作出弃权，但必须经书面作出并经各方签字。一方在某种情况下就其他方的违约所作的弃权不应被视为该方在其他情况下就类似的违约已经对其他方作出弃权。Any Party may waive the terms and conditions of this Agreement, provided that such a waiver must be provided in writing and shall require thesignatures of the Parties. No waiver by any Party in certain circumstances with respect to a breach by other Parties shall operate as a waiver bysuch a Party with respect to any similar breach in other circumstances.本页其余部分刻意留为空白The Remainder of this page is intentionally left blank26秘密文件Strictly Confidential有鉴于此，各方已自行或使得其各自授权代表于文首所载日期签署本独家购买权协议。IN WITNESS WHEREOF, the Parties have executed, or caused their respective duly authorized representatives to execute, this Exclusive Option Agreement as ofthe date first above written.甲方：中传天下信息科技（深圳）有限公司（盖章）Party A: Zhongchuan Tianxia Information Technology (Shenzhen) Co., Ltd. (Seal)签字：By:/s/ Hong Ting姓名：洪婷Name: Hong Ting职务：总经理Title: General Manager秘密文件 Strictly Confidential有鉴于此，各方已自行或使得其各自授权代表于文首所载日期签署本独家购买权协议。IN WITNESS WHEREOF, the Parties have executed, or caused their respective duly authorized representatives to execute, this Exclusive Option Agreement as ofthe date first above written.乙方：Party B:宋雪松Song Xuesong签字：By:/s/ Song Xuesong秘密文件 Strictly Confidential有鉴于此，各方已自行或使得其各自授权代表于文首所载日期签署本独家购买权协议。IN WITNESS WHEREOF, the Parties have executed, or caused their respective duly authorized representatives to execute, this Exclusive Option Agreement as ofthe date first above written.乙方：Party B:陈蔚力Chen Weili签字：By:/s/ Chen Weili秘密文件 Strictly Confidential有鉴于此，各方已自行或使得其各自授权代表于文首所载日期签署本独家购买权协议。IN WITNESS WHEREOF, the Parties have executed, or caused their respective duly authorized representatives to execute, this Exclusive Option Agreement as ofthe date first above written.乙方：Party B:王平Wang Ping签字：By:/s/ Wang Ping秘密文件 Strictly Confidential有鉴于此，各方已自行或使得其各自授权代表于文首所载日期签署本独家购买权协议。IN WITNESS WHEREOF, the Parties have executed, or caused their respective duly authorized representatives to execute, this Exclusive Option Agreement as ofthe date first above written.乙方：Party B:刘东来Liu Donglai签字：By:/s/ Liu Donglai秘密文件 Strictly Confidential有鉴于此，各方已自行或使得其各自授权代表于文首所载日期签署本独家购买权协议。IN WITNESS WHEREOF, the Parties have executed, or caused their respective duly authorized representatives to execute, this Exclusive Option Agreement as ofthe date first above written.丙方：北京中传视讯科技有限公司（盖章）Party B: Beijing Mobile Vision Technology Co., Ltd. (Seal)签字：By:/s/ Song Xuesong姓名：宋雪松Name:Song Xuesong职务：董事长Title:Chairman of the Board秘密文件 Strictly ConfidentialEX4.17 5 f20f2017ex417_luokung.htm EQUITY INTEREST PLEDGE AGREEMENT BY AND AMONG ZHONGCHUAN TIANXIA INFORMATION TECHNOLOGY(SHENZHEN) CO., LTD., XUESONG SONG, WEILI CHEN, PING WANG, DONGLAI LIU, AND BEIJING MOBILE VISION TECHNOLOGY CO., LTD., DATEDAUGUST 31, 2015Exhibit 4.17股权质押协议Equity Interest Pledge Agreement本股权质押协议（下称"本协议”）由下列各方于年月日在中华人民共和国（下称“中国”）北京签订：This Equity Interest Pledge Agreement (this "Agreement") has been executed by and among the following parties on in Beijing, the People’sRepublic of China (the “China” or “PRC”):甲方：中传天下信息科技（深圳）有限公司（下称“质权人”）Party A: Zhongchuan Tianxia Information Technology (Beijing) Co., Ltd. (“Pledgee”)地址：深圳市南山区高新中三道2号深圳软件园一期五栋401AAddress: 401A, Building 5, Phase 1, Shenzhen Software Park, No.2 Gaoxin Zhongsan Road, Nanshan District, Shenzhen统一社会信用代码： 91440300565701058RUniform Social Credit Code: 91440300565701058R乙方(下称“出质人”)：Party B ( “Pledgors”):a)宋雪松Song Xuesong身份证号码:ID Card No.:b)陈蔚力Chen Weili身份证号码:ID Card No.:1秘密文件 Strictly Confidentialc)王平Wang Ping身份证号码:ID Card No.:d)刘东来Liu Donglai身份证号码:ID Card No.:丙方：北京中传视讯科技有限公司Party C: Beijing Mobile Vision Technology Co., Ltd.地址：北京市朝阳区光华路9号SOHO3QLAB32Address: LAB32, SOHO3Q, No 9, Guanghua Road, Chaoyang District, Beijing统一社会信用代码：9111010576215249XMUniform Social Credit Code: 9111010576215249XM在本协议中，质权人、出质人和丙方以下各称“一方”，合称“各方”。In this Agreement, each of Pledgee, Pledgors and Party C shall be referred to as a "Party" respectively, and they shall be collectively referred to as the"Parties".鉴于：Whereas:1．出质人全部为中国境内居民自然人，共同持有丙方100%的股权。丙方是一家在中国注册成立的、主要从事手机视频技术研发、内容制作和产业化市场推广的有限责任公司。丙方有意在此确认出质人和质权人在本协议下的权利和义务并提供必要的协助登记该质权；All of the Pledgors are natural persons resided in PRC, and collectively hold 100% of the equity interest in Party C. Party C is a limited company registered inChina, mainly engaging in mobile video frequency technology research, development, content creation, sale and related industrialization promotion. Party Cacknowledges the respective rights and obligations of Pledgors and Pledgee under this Agreement, and intends to provide any necessary assistance inregistering the Pledge;2．质权人是一家在中国注册的外商独资企业。质权人与丙方于年月日签订了独家业务合作协议；Pledgee is a whollyforeignowned enterprise registered in China. Pledgee and Party C have executed an Exclusive Business Cooperation Agreement as of [*],[*];3．为了保证丙方全面履行独家业务合作协议项下的义务，出质人以其拥有的全部丙方股权向质权人做出质押担保。To ensure that Party C fully performs its obligations under the Exclusive Business Cooperation Agreement, Pledgors hereby pledge to the Pledgee all of theequity interests they hold in Party C.为了履行业务合作协议的条款，各方商定按照以下条款签订本协议。To perform the provisions of the Business Cooperation Agreement, the Parties have mutually agreed to execute this Agreement upon the following terms.2秘密文件 Strictly Confidential1.定义Definitions除非本协议另有规定，下列词语含义为：Unless otherwise provided herein, the terms below shall have the following meanings:1.1质权：指出质人根据本协议第2条给予质权人的担保物权，即指质权人所享有的，以出质人质押给质权人的股权折价或拍卖、变卖该股权的价款优先受偿的权利。Pledge: shall refer to the security interest granted by Pledgors to Pledgee pursuant to Article 2 of this Agreement, i.e., the right of Pledgee to becompensated on a preferential basis with the conversion, auction or sales price of the Equity Interest.1.2股权：指出质人现在和将来（通过增资和/或转股）合法持有的其在丙方的全部股权权益。Equity Interest: shall refer to all of the equity interest in Party C lawfully, held now and to be held (through capital increase and/or equity transfer)hereafter by Pledgors.1.3质押期限：指本协议第3条规定的期间。Term of Pledge: shall refer to the term set forth in Article 3 of this Agreement.1.4业务合作协议：指丙方与质权人于本协议日签订的独家业务合作协议。Business Cooperation Agreement: shall refer to the Exclusive Business Cooperation Agreement executed by and between Party C and Pledgee on thedate of this Agreement.1.5违约事件：指本协议第7条所列任何情况。Event of Default: shall refer to any of the circumstances set forth in Article 7 of this Agreement.1.6违约通知：指质权人根据本协议发出的宣布违约事件的通知。Notice of Default: shall refer to the notice issued by Pledgee in accordance with this Agreement declaring an Event of Default.3秘密文件 Strictly Confidential2.质权The Pledge作为丙方按时和全额支付业务合作协议项下质权人应得的任何或全部的款项，包括但不限于业务合作协议中规定的咨询和服务费的担保（无论该等费用的到期应付是由于到期日的到来、提前收款的要求或其它原因），以及丙方充分履行其在业务合作协议项下其他所有义务（丙方按时和全额支付业务合作协议项下甲方应得的任何或全部的款项及丙方在业务合作协议项下其他所有义务，以下统称为“被担保债务”）的担保，出质人特此将其现有或将拥有的丙方的全部股权权益质押给质权人。As collateral security for the timely and complete payment and performance when due (whether at stated maturity, by acceleration or otherwise) of any or all ofthe payments due (the “all payments in pledge”) by Party C, including without limitation the consulting and services fees payable to the Pledgee under theBusiness Cooperation Agreement, Pledgors hereby pledge to Pledgee a first security interest in all of Pledgors’ right, title and interest, whether now owned orhereafter acquired by Pledgors, in the Equity Interest of Party C.3.质押期限Term of Pledge3.1本质权自本协议项下的股权出质在相应的工商行政管理机关登记之日起生效，质权有效期持续到业务合作协议下所有丙方欠付质权人的款项结清为止。出质人和丙方应（一）自本协议签署之日起3个工作日内，将本协议的质权登记在丙方股东名册上，并（二）自本协议签署之日起10个工作日内向相应的工商行政管理机关申请登记本协议项下的质权。各方共同确认，为办理股权质押工商登记手续，各方及丙方其他股东应按照丙方所在地工商行政管理部门要求的形式签署、真实反映本协议项下质权信息的《股权质押合同》（以下简称“工商登记质押合同”）提交给工商管理机关，工商登记质押合同中未约定事项，仍以本协议约定为准。出质人和丙方应当按照中国法律法规和有关工商行政管理机关的各项要求，提交所有必要的文件并办理所有必要手续，保证质权在递交申请后尽快获得登记。如果出质人持有的丙方注册资本数额增加（不管是通过直接认缴丙方的增资还是从其他股东处受让股权），各方一致同意将采取一切必要的行动和签署一切必要的文件以按照登记机关的要求完成质权的变更登记，以确保本协议项下的质权的持续有效。The Pledge shall become effective on such date when the pledge of the Equity Interest contemplated herein has been registered’ with relevantadministration for industry and commerce (the “AIC”). The Pledge shall be continuously valid until all payments due under the Business CooperationAgreement have been fulfilled by Party C. Pledgors and Party C shall (1) register the Pledge in the shareholders' register of Party C within 3 businessdays following the execution of this Agreement, and (2) submit an application to the AIC for the registration of the Pledge of the Equity Interestcontemplated herein within 10 business days following the execution of this Agreement. The parties covenant that for the purpose of registration of thePledge, the parties hereto and all other shareholders of Party C shall submit to the AIC the Equity Interest Pledge Contract in the form required by theAIC at the location of Party C which shall truly reflect the information of the Pledge hereunder (the “AIC Pledge Contract”). For matters not specified inthe AIC Pledge Contract, the parties shall be bound by the provisions of this Agreement. Pledgors and Party C shall submit all necessary documentsand complete all necessary procedures, as required by the PRC laws and regulations and the relevant AIC, to ensure that the Pledge of the EquityInterest shall be registered with the AIC as soon as possible after filing. In the event that the amount of registered capital held by Pledgors is increased(either by subscribing increased registered capital from Party C or acquiring equity interest from other shareholders), the Parties hereto agree that theyshall take any necessary action and execute any necessary document to complete the registration of change of Pledge according to the requirement ofAIC so that the Pledge in this Agreement remains effective.4秘密文件 Strictly Confidential3.2质押期限内，如丙方未按业务合作协议交付咨询服务费等费用，质权人有权但无义务按本协议的规定处分质权。During the Term of Pledge, in the event Party C fails to pay the exclusive consulting or service fees in accordance with the Business CooperationAgreement, Pledgee shall have the right, but not the obligation, to dispose of the Pledge in accordance with the provisions of this Agreement.4.质权凭证的保管Custody of Records for Equity Interest subject to Pledge4.1在本协议规定的质押期限内，出质人应将其在丙方的股权出资证明书及记载质权的股东名册交付质权人保管。出质人应在本协议签订之日起一周内将上述股权出资证明书及股东名册交付给质权人。质权人将在本协议规定的全部质押期间一直保管这些项目。During the Term of Pledge set forth in this Agreement, Pledgors shall deliver to Pledgee's custody the capital contribution certificate for the EquityInterest and the shareholders' register containing the Pledge within one week from the execution of this Agreement. Pledgee shall have custody of suchitems during the entire Term of Pledge set forth in this Agreement.4.2在质押期限内，股权所产生的红利应当无条件归质权人所有。Dividends generated by the Equity Interest shall be unconditionally owned by the Pledgee during the Term of Pledge.5秘密文件 Strictly Confidential5.出质人的声明和保证Representations and Warranties of Pledgors5.1出质人是股权唯一的合法所有人。Pledgors are the sole legal and beneficial owners of the Equity Interest.5.2质权人有权以本协议规定的方式处分并转让股权。Pledgee shall have the right to dispose of and transfer the Equity Interest in accordance with the provisions set forth in this Agreement.5.3除本质权之外，出质人未在股权上设置任何其他质押权利或其他担保权益。Except for the Pledge, Pledgors have not placed any security interest or other encumbrance on the Equity Interest.6.出质人的承诺和确认Covenants and Further Agreements of Pledgors6.1在本协议存续期间，所有出质人向质权人承诺，出质人将：All of the Pledgors hereby covenant to the Pledgee, that during the term of this Agreement, Pledgors shall:6.1.1除履行由出质人与质权人、丙方于本协议签署日签订的《独家购买权合同》外，未经质权人事先书面同意，不得转让股权，不得在股权上设立或允许存在任何担保或其他债务负担；not transfer the Equity Interest, place or permit the existence of any security interest or other encumbrance on the Equity Interest, without theprior written consent of Pledgee, except for the performance of the Exclusive Option Agreement executed by Pledgors, the Pledgee and Party Con the execution date of this Agreement;6秘密文件 Strictly Confidential6.1.2遵守并执行所有有关权利质押的法律、法规的规定，在收到有关主管机关就质权发出或制定的通知、指令或建议时，于五日内向质权人出示上述通知、指令或建议，同时遵守上述通知、指令或建议，或按照质权人的合理要求或经质权人同意就上述事宜提出反对意见和陈述；comply with the provisions of all laws and regulations applicable to the pledge of rights, and within 5 days of receipt of any notice, order orrecommendation issued or prepared by relevant competent authorities regarding the Pledge, shall present the aforementioned notice, order orrecommendation to Pledgee, and shall comply with the aforementioned notice, order or recommendation or submit objections andrepresentations with respect to the aforementioned matters upon Pledgee's reasonable request or upon consent of Pledgee;6.1.3将任何可能导致对出质人股权或其任何部分的权利产生影响的事件或收到的通知，以及可能改变出质人在本协议中的任何保证、义务或对出质人履行其在本协议中义务可能产生影响的任何事件或收到的通知及时通知质权人。promptly notify Pledgee of any event or notice received by Pledgors that may have an impact on Pledgee's rights to the Equity Interest or anyportion thereof, as well as any event or notice received by Pledgors that may have an impact on any guarantees and other obligations ofPledgors arising out of this Agreement.6.2出质人同意，质权人按本协议条款取得的对质权享有的权利，不应受到出质人或出质人的继承人或出质人之委托人或任何其他人通过法律程序的中断或妨害。Pledgors agree that the rights acquired by Pledgee in accordance with this Agreement with respect to the Pledge shall not be interrupted or harmed byPledgors or any heirs or representatives of Pledgors or any other persons through any legal proceedings.7秘密文件 Strictly Confidential6.3出质人向质权人保证，为保护或完善本协议对偿付业务合作协议项下被担保债务的担保，出质人将诚实签署、并促使其他与质权有利害关系的当事人签署质权人所要求的所有的权利证书、契约和/或履行并促使其他有利害关系的当事人履行质权人所要求的行为，并为本协议赋予质权人之权利、授权的行使提供便利，与质权人或其指定的人(自然人/法人)签署所有的有关股权所有权的文件，并在合理期间内向质权人提供其认为需要的所有的有关质权的通知、命令及决定。To protect or perfect the security interest granted by this Agreement for payment of all payment in pledge under the Business Cooperation Agreement,Pledgors hereby undertake to execute in good faith and to cause other parties who have an interest in the Pledge to execute all certificates, agreements,deeds and/or covenants required by Pledgee. Pledgors also undertake to perform and to cause other parties who have an interest in the Pledge toperform actions required by Pledgee, to facilitate the exercise by Pledgee of its rights and authority granted thereto by this Agreement, and to enter intoall relevant documents regarding ownership of Equity Interest with Pledgee or designee(s) of Pledgee (natural persons/legal persons). Pledgorsundertake to provide Pledgee within a reasonable time with all notices, orders and decisions regarding the Pledge that are required by Pledgee.6.4出质人向质权人保证，出质人将遵守、履行本协议项下所有的保证、承诺、协议、陈述及条件。如出质人不履行或不完全履行其保证、承诺、协议、陈述及条件，出质人应赔偿质权人由此遭受的一切损失。Pledgors hereby undertake to comply with and perform all guarantees, promises, agreements, representations and conditions under this Agreement. Inthe event of failure the whole or partial performance of its guarantees, promises, agreements, representations and conditions, Pledgors shall indemnifyPledgee for all losses resulting therefrom.8秘密文件 Strictly Confidential7.违约事件Event of Default7.1下列事项均被视为违约事件：The following circumstances shall be deemed Event of Default:7.1.1丙方未能按期、完整履行任何业务合作协议项下责任，包括但不限于丙方未能按期足额支付业务合作协议项下的应付的被担保债务或有违反该协议其他义务的行为；Party C fails to fully and timely fulfill any liabilities under the Business Cooperation Agreement, including without limitation failure to pay infull any of the all payment in pledge payable under the Business Cooperation Agreement or breaches any other obligations of Party Cthereunder;7.1.2出质人或丙方实质违反本协议的任何条款；Pledgors or Party C have committed a material breach of any provisions of this Agreement;7.1.3除本协议第6.1.1条的约定外，出质人舍弃出质的股权或未获得质权人书面同意而擅自转让或意图转让出质的股权；和Except as expressly stipulated in Section 6.1.1, Pledgors transfers or purports to transfer or abandons the Equity Interest pledged or assignsthe Equity Interest pledged without the written consent of Pledgee; and7.1.4丙方的继承人或代管人只能履行部分或拒绝履行业务合作协议项下的支付责任。The successor or custodian of Party C is capable of only partially perform or refuses to perform the payment obligations under the BusinessCooperation Agreement.9秘密文件 Strictly Confidential7.2如知道或发现本第7.1条所述的任何事项或可能导致上述事项的事件已经发生，出质人应立即以书面形式通知质权人。Upon notice or discovery of the occurrence of any circumstances or event that may lead to the aforementioned circumstances described in Section 7.1,Pledgors shall immediately notify Pledgee in writing accordingly.7.3除非第7.1部分下的违约事件在质权人向出质人发出要求其修补此违约行为通知后的二十（20）天之内已经按质权人要求获得救济，质权人在其后的任何时间，可向出质人发出书面违约通知，要求依据第8部分履行其处理股权的权利。Unless an Event of Default set forth in this Section 7.1 has been successfully resolved to Pledgee's satisfaction within twenty (20) days after the Pledgeedelivers a notice to the Pledgors requesting ratification of such Event of Default, Pledgee may issue a Notice of Default to Pledgors in writing at any timethereafter, demanding the Pledgors to immediately dispose of the Pledge in accordance with the provisions of Article 8 of this Agreement.8.质权的行使Exercise of Pledge8.1在被担保债务被全部清偿或履行前，未经质权人书面同意，出质人不得转让本质权和其拥有的丙方股权。Prior to the full payment of all payments in pledge, without the Pledgee's written consent, Pledgors shall not assign the Pledge or the Equity Interest inParty C.8.2在质权人行使其质押权利时，质权人可以向出质人发出书面违约通知。Pledgee may issue a Notice of Default to Pledgors when exercising the Pledge.10秘密文件 Strictly Confidential8.3在质权人行使其质押权利时，根据中国有关法律的规定，质权人有权按照法定程序处置质押股权。仅在中国法律允许的范围内，对于处置的所得，质权人无需给付出质人；除非中国法律另有规定，出质人特此放弃其可能有的能向质权人要求任何质押股权处置所得的权利；同样，出质人对质权人在该质押股权处置后的亏损也不承担任何义务。When the Pledgor exercises the pledge right, Pledgee is entitled to dispose of the Equity Interest pledged in accordance with applicable PRC laws. Onlyto the extent permitted under applicable PRC laws, Pledgee has no obligation to account to Pledgors for proceeds of disposition of the Equity Interest.Unless otherwise required by PRC laws, Pledgors hereby waive any rights it may have to demand any such accounting from Pledgee; Likewise, in suchcircumstance Pledgors shall have no obligation to Pledgee for any deficiency remaining after such disposition of the Equity Interest pledged.8.4质权人依照本协议处分质权时，出质人和丙方应予以必要的协助，以使质权人实现其质权。When Pledgee disposes of the Pledge in accordance with this Agreement, Pledgors and Party C shall provide necessary assistance to enable Pledgee toenforce the Pledge in accordance with this Agreement.9.转让Assignment9.1除非经质权人事先同意，出质人无权赠予或转让其在本协议项下的权利义务。Without Pledgee's prior written consent, Pledgors shall not have the right to assign or delegate its rights and obligations under this Agreement.11秘密文件 Strictly Confidential9.2本协议对出质人及其继任人和经许可的受让人均有约束力，并且对质权人及每一继任人和受让人有效。This Agreement shall be binding on Pledgors and their successors and permitted assigns, and shall be valid with respect to Pledgee and each of itssuccessors and assigns.9.3经出质人同意，质权人可以在任何时候将其在业务合作协议项下的所有或任何权利和义务转让给其指定的关联方（自然人/法人），在这种情况下，受让人应享有和承担本协议项下质权人享有和承担的权利和义务，如同其作为原协议方应享有和承担的一样。质权人转让业务合作协议项下的权利和义务时，应质权人要求，出质人应就此转让签署有关协议和/或文件。Upon the Pledgors’ agreement, Pledgee may assign any or all of its rights and obligations under the Business Cooperation Agreement to its designee(s)(natural/legal persons) at any time, in which case the assigns shall have the rights and obligations of Pledgee under this Agreement, as if it were theoriginal party to this Agreement. When the Pledgee assigns the rights and obligations under the Business Cooperation Agreement, upon Pledgee'srequest, Pledgors shall execute relevant agreements or other documents relating to such assignment.9.4因转让所导致的质权人变更后，应质权人要求，出质人应与新的质权人签订一份内容与本协议一致的新质押协议，并在相应的工商行政管理机关进行登记。In the event of a change in Pledgee due to an assignment, Pledgors shall, at the request of Pledgee, execute a new pledge agreement with the newpledgee on the same terms and conditions as this Agreement, and register the same with the relevant AIC.12秘密文件 Strictly Confidential9.5出质人应严格遵守本协议和各方单独或共同签署的其他有关协议的规定，包括独家购买权合同和对质权人的授权委托书，履行各协议项下的义务，并不进行任何足以影响协议的有效性和可强制执行性的作为/不作为。除非根据质权人的书面指示，出质人不得行使其对质押股权还留存的权利。Pledgors shall strictly abide by the provisions of this Agreement and other contracts jointly or separately executed by the Parties hereto or any of them,including the Exclusive Option Agreement and the Power of Attorney granted to Pledgee, perform the obligations hereunder and thereunder, and refrainfrom any action/omission that may affect the effectiveness and enforceability thereof. Any remaining rights of Pledgors with respect to the EquityInterest pledged hereunder shall not be exercised by Pledgors except in accordance with the written instructions of Pledgee.10.终止Termination在被担保债务被全部清偿或履行完毕之后，本质权人应在尽早合理可行的时间内办理或配合办理解除质押的手续，出质人与丙方应提供相应的配合与协助。Upon the full payment of all payments in pledge under the Business Cooperation Agreement a, Pledgor shall then, with the assistance of Party B and Party C,go through the procedures of cancellation of pledge rights at a reasonable time as soon as practicable.11.手续费及其他费用Handling Fees and Other Expenses一切与本协议有关的费用及实际开支，其中包括但不限于法律费用、工本费、印花税以及任何其他税收、费用等全部由丙方承担。All fees and out of pocket expenses relating to this Agreement, including but not limited to legal costs, costs of production, stamp tax and any other taxes andfees, shall be borne by Party C.13秘密文件 Strictly Confidential12.保密责任Confidentiality各方承认及确定有关本协议、本协议内容，以及彼此就准备或履行本协议而交换的任何口头或书面资料均被视为保密信息。各方应当对所有该等保密信息予以保密，而在未得到另一方书面同意前，不得向任何第三者披露任何保密信息，惟下列信息除外：(a)公众人士知悉或将会知悉的任何信息（惟并非由接受保密信息之一方擅自向公众披露）；(b)根据适用法律法规、股票交易规则、或政府部门或法院的命令而所需披露之任何信息；或(c)由任何一方就本协议所述交易而需向其股东、投资者、法律或财务顾问披露之信息，而该股东、法律或财务顾问亦需遵守与本条款相类似之保密责任。如任何一方工作人员或聘请机构的泄密均视为该方的泄密，需依本协议承担违约责任。无论本协议以任何理由终止，本条款仍然生效。The Parties acknowledge that the existence and the terms of this Agreement and any oral or written information exchanged between the Parties in connectionwith the preparation and performance this Agreement are regarded as confidential information. Each Party shall maintain confidentiality of all such confidentialinformation, and without obtaining the written consent of the other Party, it shall not disclose any relevant confidential information to any third parties, exceptfor the information that: (a) is or will be in the public domain (other than through the receiving Party’s unauthorized disclosure); (b) is under the obligation tobe disclosed pursuant to the applicable laws or regulations, rules of any stock exchange, or orders of the court or other government authorities; or (c) isrequired to be disclosed by any Party to its shareholders, investors, legal counsels or financial advisors regarding the transaction contemplated hereunder,provided that such shareholders, investors, legal counsels or financial advisors shall be bound by the confidentiality obligations similar to those set forth inthis Section. Disclosure of any confidential information by the staff members or agencies hired by any Party shall be deemed disclosure of such confidentialinformation by such Party, which Party shall be held liable for breach of this Agreement. This Section shall survive the termination of this Agreement for anyreason.14秘密文件 Strictly Confidential13.适用法律和争议的解决Governing Law and Resolution of Disputes13.1本协议的订立、效力、解释、履行、修改和终止以及争议的解决均适用中国法律。The execution, effectiveness, construction, performance, amendment and termination of this Agreement and the resolution of disputes hereunder shallbe governed by the laws of China.13.2因解释和履行本协议而发生的任何争议，本协议各方应首先通过友好协商的方式加以解决。如果在一方向其他方发出要求协商解决的书面通知后30天之内争议仍然得不到解决，则任何一方均可将有关争议提交给中国国际经济贸易仲裁委员会，由该会按照其仲裁规则仲裁解决。仲裁应在北京进行，使用之语言为中文。仲裁裁决是终局性的，对各方均有约束力。In the event of any dispute with respect to the construction and performance of this Agreement, the Parties shall first resolve the dispute throughfriendly negotiations. In the event the Parties fail to reach an agreement on the dispute within 30 days after either Party's request to the other Parties forresolution of the dispute through negotiations, either Party may submit the relevant dispute to the China International Economic and Trade ArbitrationCommission for arbitration, in accordance with its Arbitration Rules. The arbitration shall be conducted in Beijing, and the language used in arbitrationshall be Chinese. The arbitration award shall be final and binding on all Parties.13.3因解释和履行本协议而发生任何争议或任何争议正在进行仲裁时，除争议的事项外，本协议各方仍应继续行使各自在本协议项下的其他权利并履行各自在本协议项下的其他义务。Upon the occurrence of any disputes arising from the construction and performance of this Agreement or during the pending arbitration of any dispute,except for the matters under dispute, the Parties to this Agreement shall continue to exercise their respective rights under this Agreement and performtheir respective obligations under this Agreement.15秘密文件 Strictly Confidential14.通知Notices14.1本协议项下要求或发出的所有通知和其他通信应通过专人递送、挂号邮寄、邮资预付或商业快递服务或传真的方式发到该方下列地址。每一通知还应再以电子邮件送达。该等通知视为有效送达的日期按如下方式确定：All notices and other communications required or permitted to be given pursuant to this Agreement shall be delivered personally or sent by registeredmail, postage prepaid, by a commercial courier service or by facsimile transmission to the address of such party set forth below. A confirmation copy ofeach notice shall also be sent by Email. The dates on which notices shall be deemed to have been effectively given shall be determined as follows:14.1.1通知如果是以专人递送、快递服务或挂号邮寄、邮资预付发出的，则以于设定为通知的地址在接收或拒收之日为有效送达日。Notices given by personal delivery, by courier service or by registered mail, postage prepaid, shall be deemed effectively given on the date ofreceipt or refusal at the address specified for notices.14.1.2通知如果是以传真发出的，则以成功传送之日为有效送达日（应以自动生成的传送确认信息为证）。Notices given by facsimile transmission shall be deemed effectively given on the date of successful transmission (as evidenced by anautomatically generated confirmation of transmission).16秘密文件 Strictly Confidential14.2为通知的目的，各方地址如下：For the purpose of notices, the addresses of the Parties are as follows:甲方：中传天下信息科技（深圳）有限公司Party A: Zhongchuan Tianxia Information Technology (Shenzhen) Co., Ltd.地址：深圳市南山区高新中三道2号深圳软件园一期五栋401AAddress: 401A, Building 5, Phase 1, Shenzhen Software Park, No.2 Gaoxin Zhongsan Road, Nanshan District, Shenzhen.收件人：洪婷Attn: Hong Ting乙方：Party B:a)宋雪松Song Xuesong地址：地址：Address:.b)陈蔚力Chen Weili地址：Address:c)王平Wang Ping地址：Address:17秘密文件 Strictly Confidentiald)刘东来Liu Donglai地址：Address:丙方：北京中传视讯科技有限公司Party C: Beijing Mobile Vision Technology Co., Ltd.地址：北京市朝阳区光华路9号SOHO3QLAB32Address: LAB32, SOHO3Q, No 9, Guanghua Road, Chaoyang District, Beijing.收件人：宋雪松Attn.: Song Xuesong14.3任何一方可按本条规定随时给其他各方发出通知来改变其接收通知的地址。Any Party may at any time change its address for notices by a notice delivered to the other Parties in accordance with the terms hereof.15.分割性Severability如果本协议有任何一条或多条规定根据任何法律或法规在任何方面被裁定为无效、不合法或不可执行，本协议其余规定的有效性、合法性或可执行性不应因此在任何方面受到影响或损害。各方应通过诚意磋商，争取以法律许可以及各方期望的最大限度内有效的规定取代那些无效、不合法或不可执行的规定，而该等有效的规定所产生的经济效果应尽可能与那些无效、不合法或不能强制执行的规定所产生的经济效果相似。In the event that one or several of the provisions of this Contract are found to be invalid, illegal or unenforceable in any aspect in accordance with any laws orregulations, the validity, legality or enforceability of the remaining provisions of this Contract shall not be affected or compromised in any respect. The Partiesshall strive in good faith to replace such invalid, illegal or unenforceable provisions with effective provisions that accomplish to the greatest extent permittedby law and the intentions of the Parties, and the economic effect of such effective provisions shall be as close as possible to the economic effect of thoseinvalid, illegal or unenforceable provisions.18秘密文件 Strictly Confidential16.附件Attachments本协议所列附件，为本协议不可分割的组成部分。The attachments set forth herein shall be an integral part of this Agreement.17.生效Effectiveness17.1本协议的任何修改、补充或变更，均须采用书面形式，经各方签字或盖章并按规定办理政府登记（如需）后生效。Any amendments, changes and supplements to this Agreement shall be in writing and shall become effective upon completion of the governmentalfiling procedures (if applicable) after the affixation of the signatures or seals of the Parties.17.2本协议以中文和英文书就，一式六份，质权人、所有出质人和丙方各持一份，具有同等效力；中英文版本如有冲突，应以中文版为准。This Agreement is written in Chinese and English in six copies. Each Pledgors, Pledgee and Party C shall hold one copy respectively. Each copy of thisAgreement shall have equal validity. In case there is any conflict between the Chinese version and the English version, the Chinese version shall prevail.本页其余部分刻意留为空白The Remainder of this page is intentionally left blank19秘密文件 Strictly Confidential有鉴于此，各方已使得经其授权的代表于文首所述日期签署了本股权质押协议并即生效，以昭信守。IN WITNESS WHEREOF, the Parties have caused their authorized representatives to execute this Equity Interest Pledge Agreement as of the date first abovewritten.甲方：中传天下信息科技（深圳）有限公司（盖章）Party A: Zhongchuan Tianxia Information Technology (Shenzhen) Co., Ltd. (Seal)签字：By:/s/ Hong Ting姓名：洪婷Name: Hong Ting职务：总经理Title: General Manager秘密文件 Strictly Confidential有鉴于此，各方已使得经其授权的代表于文首所述日期签署了本股权质押协议并即生效，以昭信守。IN WITNESS WHEREOF, the Parties have caused their authorized representatives to execute this Equity Interest Pledge Agreement as of the date first abovewritten.乙方：Party B:宋雪松Song Xuesong签署：By:/s/ Song Xuesong秘密文件 Strictly Confidential有鉴于此，各方已使得经其授权的代表于文首所述日期签署了本股权质押协议并即生效，以昭信守。IN WITNESS WHEREOF, the Parties have caused their authorized representatives to execute this Equity Interest Pledge Agreement as of the date first abovewritten.乙方：Party B:陈蔚力Chen Weili签字：By:/s/ Chen Weili秘密文件 Strictly Confidential有鉴于此，各方已使得经其授权的代表于文首所述日期签署了本股权质押协议并即生效，以昭信守。IN WITNESS WHEREOF, the Parties have caused their authorized representatives to execute this Equity Interest Pledge Agreement as of the date first abovewritten.乙方：Party B:王平Wang Ping签字：By:/s/ Wang Ping秘密文件 Strictly Confidential有鉴于此，各方已使得经其授权的代表于文首所述日期签署了本股权质押协议并即生效，以昭信守。IN WITNESS WHEREOF, the Parties have caused their authorized representatives to execute this Equity Interest Pledge Agreement as of the date first abovewritten.乙方：Party B:刘东来Liu Donglai签字：By:/s/ Liu Donglai秘密文件 Strictly Confidential有鉴于此，各方已使得经其授权的代表于文首所述日期签署了本股权质押协议并即生效，以昭信守。IN WITNESS WHEREOF, the Parties have caused their authorized representatives to execute this Equity Interest Pledge Agreement as of the date first abovewritten.丙方：北京中传视讯科技有限公司（盖章）Party B: Beijing Mobile Vision Technology Co., Ltd. (Seal)签字：By:/s/ Song Xuesong姓名：宋雪松Name: Song Xuesong职务：董事长Title: Chairman of the Board秘密文件 Strictly Confidential附件：Attachments:1.北京中传视讯科技有限公司股东名册；Shareholders' Register of Beijing Mobile Vision Technology Co., Ltd.;2.北京中传视讯科技有限公司的出资证明书；The Capital Contribution Certificate of Beijing Mobile Vision Technology Co., Ltd.;3.独家业务合作协议。Exclusive Business Cooperation Agreement.秘密文件 Strictly ConfidentialEX4.20 6 f20f2017ex420_luokung.htm POWER OF ATTORNEY BY WEILI CHEN, DATED AUGUST 31, 2015Exhibit 4.20授权委托书Power of Attorney本人陈蔚力，持有中华人民共和国身份证（号码：*************** 516），通讯地址为广东省，系拥有北京中传视讯科技有限公司（“中传视讯”）14.0848%股权（“相关股权”）的股东，就相关股权，特此不可撤销地授权中传天下信息科技（深圳）有限公司（“深圳中传天下”）在本授权委托书的有效期内行使如下权利：The undersigned, Chen Weili, a person with the PRC identification card number of ***************516, with address at: Guangdong, and a holder of14.0848% of the entire registered capital ("Shares") in Beijing Mobile Vision Technology Co., Ltd. ("Mobile Vision"), hereby irrevocably authorize ZhongchuanTianxia Information Technology (Shenzhen) Co., Ltd. ("WFOE") to exercise the following rights relating to Shares during the term of this Power of Attorney:授权深圳中传天下作为本人唯一的排他的代理人就有关相关股权的事宜全权代表本人行使包括但不限于如下的权利：1）参加中传视讯的股东会；2）行使按照法律和中传视讯章程规定本人所享有的全部股东权利和股东表决权，包括但不限于出售或转让或质押或处置相关股权的全部或任何一部分；以及3）作为本人的授权代表指定和任命中传视讯的法定代表人、董事和/或执行董事、监事、经理以及其他高级管理人员等。但中传视讯利用该等授权做出违反中华人民共和国法律的决定无效。WFOE is hereby authorized to act on behalf of myself as my exclusive agent and attorney with respect to all matters concerning My Shareholding, includingwithout limitation: 1) attending shareholders' meetings of Mobile Vision; 2) exercising all the shareholder's rights and shareholder's voting rights I am entitled tounder the laws of China and Articles of Association of Mobile Vision, including but not limited to the sale or transfer or pledge or disposition of My Shareholding inpart or in whole; and 3) designating and appointing on behalf of myself the legal representative, director and/or executive director, supervisor, manager and othersenior management members of Mobile Vision. However, the decision made by Mobile Vision taking advantage of the power of attorney which is against the PRClaws shall be null and void.1深圳中传天下将有权在授权范围内代表本人签署独家购买权协议（本人应要求作为协议方）中约定的转让协议，如期履行本人作为协议一方的与本授权委托书同日签署的股权质押协议和独家购买权协议，该权利的行使将不对本授权形成任何限制。Without limiting the generality of the powers granted hereunder, WFOE shall have the power and authority under this Power of Attorney to execute theTransfer Contracts stipulated in Exclusive Option Agreement, to which I am required to be a party, on behalf of myself, and to effect the terms of the Share PledgeAgreement and Exclusive Option Agreement, both dated the date hereof, to which I am a party.深圳中传天下就相关股权的一切行为均视为本人的行为，签署的一切文件均视为本人签署，本人会予以承认。All the actions associated with Shares conducted by WFOE shall be deemed as my own actions, and all the documents related to Shares executed by WFOEshall be deemed to be executed by me. I hereby acknowledge and ratify those actions and/or documents by the WFOE.深圳中传天下有转委托权，可以就上述事项的办理自行再委托其他人或单位而不必事先通知本人或获得本人的同意。WFOE is entitled to reauthorize or assign its rights related to the aforesaid matters to any other person or entity at its own discretion and without giving priornotice to me or obtaining my consent.在本人为中传视讯的股东期间，本授权委托书不可撤销并持续有效，自授权委托书签署之日起算。This Power of Attorney is coupled with an interest and shall be irrevocable and continuously valid from the date of execution of this Power of Attorney, solong as I am a shareholder of Mobile Vision.本授权委托书期间，本人特此放弃已经通过本授权委托书授权给深圳中传天下的与相关股权有关的所有权利，不再自行行使该等权利。During the term of this Power of Attorney, I hereby waive all the rights associated with Shares, which have been authorized to WFOE through this Power ofAttorney, and shall not exercise such rights by myself.本授权委托书以中文和英文书就，中英文版本如有冲突，应以中文版为准。This Power of Attorney is written in Chinese and English; in case there is any conflict between the Chinese version and the English version, the Chineseversion shall prevail.陈蔚力Chen Weili签署：By:日期：年月日Date:2EX4.21 7 f20f2017ex421_luokung.htm POWER OF ATTORNEY BY PING WANG, DATED AUGUST 31, 2015Exhibit 4.21授权委托书Power of Attorney本人王平，持有中华人民共和国身份证（号码：***************01x），通讯地址为广东省，系拥有北京中传视讯科技有限公司（“中传视讯”）19.9872%股权（“相关股权”）的股东，就相关股权，特此不可撤销地授权中传天下信息科技（深圳）有限公司（“深圳中传天下”）在本授权委托书的有效期内行使如下权利：The undersigned, Wang Ping, a person with the PRC identification card number of ***************01x, with address at Guangdong, and a holder of19.9872% of the entire registered capital (“Shares”) in Beijing Mobile Vision Technology Co., Ltd. (“Mobile Vision”), hereby irrevocably authorize ZhongchuanTianxia Information Technology (Shenzhen) Co., Ltd. (“WFOE”) to exercise the following rights relating to Shares during the term of this Power of Attorney:授权深圳中传天下作为本人唯一的排他的代理人就有关相关股权的事宜全权代表本人行使包括但不限于如下的权利：1）参加中传视讯的股东会；2）行使按照法律和中传视讯章程规定本人所享有的全部股东权利和股东表决权，包括但不限于出售或转让或质押或处置相关股权的全部或任何一部分；以及3）作为本人的授权代表指定和任命中传视讯的法定代表人、董事和/或执行董事、监事、经理以及其他高级管理人员等。但中传视讯利用该等授权做出违反中华人民共和国法律的决定无效。WFOE is hereby authorized to act on behalf of myself as my exclusive agent and attorney with respect to all matters concerning My Shareholding, includingwithout limitation: 1) attending shareholders’ meetings of Mobile Vision; 2) exercising all the shareholder’s rights and shareholder’s voting rights I am entitled tounder the laws of China and Articles of Association of Mobile Vision, including but not limited to the sale or transfer or pledge or disposition of My Shareholding inpart or in whole; and 3) designating and appointing on behalf of myself the legal representative, director and/or executive director, supervisor, manager and othersenior management members of Mobile Vision. However, the decision made by Mobile Vision taking advantage of the power of attorney which is against the PRClaws shall be null and void.1深圳中传天下将有权在授权范围内代表本人签署独家购买权协议（本人应要求作为协议方）中约定的转让协议，如期履行本人作为协议一方的与本授权委托书同日签署的股权质押协议和独家购买权协议，该权利的行使将不对本授权形成任何限制。Without limiting the generality of the powers granted hereunder, WFOE shall have the power and authority under this Power of Attorney to execute theTransfer Contracts stipulated in Exclusive Option Agreement, to which I am required to be a party, on behalf of myself, and to effect the terms of the Share PledgeAgreement and Exclusive Option Agreement, both dated the date hereof, to which I am a party.深圳中传天下就相关股权的一切行为均视为本人的行为，签署的一切文件均视为本人签署，本人会予以承认。All the actions associated with Shares conducted by WFOE shall be deemed as my own actions, and all the documents related to Shares executed by WFOEshall be deemed to be executed by me. I hereby acknowledge and ratify those actions and/or documents by the WFOE.深圳中传天下有转委托权，可以就上述事项的办理自行再委托其他人或单位而不必事先通知本人或获得本人的同意。WFOE is entitled to reauthorize or assign its rights related to the aforesaid matters to any other person or entity at its own discretion and without giving priornotice to me or obtaining my consent.在本人为中传视讯的股东期间，本授权委托书不可撤销并持续有效，自授权委托书签署之日起算。This Power of Attorney is coupled with an interest and shall be irrevocable and continuously valid from the date of execution of this Power of Attorney, solong as I am a shareholder of Mobile Vision.本授权委托书期间，本人特此放弃已经通过本授权委托书授权给深圳中传天下的与相关股权有关的所有权利，不再自行行使该等权利。During the term of this Power of Attorney, I hereby waive all the rights associated with Shares, which have been authorized to WFOE through this Power ofAttorney, and shall not exercise such rights by myself.本授权委托书以中文和英文书就，中英文版本如有冲突，应以中文版为准。This Power of Attorney is written in Chinese and English; in case there is any conflict between the Chinese version and the English version, the Chineseversion shall prevail.王平Wang Ping签署：By:日期：年月日Date:2EX4.22 8 f20f2017ex422_luokung.htm POWER OF ATTORNEY BY DONGLAI LIU, DATED AUGUST 31, 2015Exhibit 4.22授权委托书Power of Attorney本人刘东来，持有中华人民共和国身份证（号码：***************912），通讯地址为: ，系拥有北京中传视讯科技有限公司（“中传视讯”）4.1035%股权（“相关股权”）的股东，就相关股权，特此不可撤销地授权中传天下信息科技（深圳）有限公司（“深圳中传天下”）在本授权委托书的有效期内行使如下权利：The undersigned, Liu Donglai, a person with the PRC identification card number of ***************912, with address at: , and a holder of 4.1035% of theentire registered capital (“Shares”) in Beijing Mobile Vision Technology Co., Ltd. (“Mobile Vision”), hereby irrevocably authorize Zhongchuan Tianxia InformationTechnology (Shenzhen) Co., Ltd. (“WFOE”) to exercise the following rights relating to Shares during the term of this Power of Attorney:授权深圳中传天下作为本人唯一的排他的代理人就有关相关股权的事宜全权代表本人行使包括但不限于如下的权利：1）参加中传视讯的股东会；2）行使按照法律和中传视讯章程规定本人所享有的全部股东权利和股东表决权，包括但不限于出售或转让或质押或处置相关股权的全部或任何一部分；以及3）作为本人的授权代表指定和任命中传视讯的法定代表人、董事和/或执行董事、监事、经理以及其他高级管理人员等。但中传视讯利用该等授权做出违反中华人民共和国法律的决定无效。WFOE is hereby authorized to act on behalf of myself as my exclusive agent and attorney with respect to all matters concerning My Shareholding, includingwithout limitation: 1) attending shareholders’ meetings of Mobile Vision; 2) exercising all the shareholder’s rights and shareholder’s voting rights I am entitled tounder the laws of China and Articles of Association of Mobile Vision, including but not limited to the sale or transfer or pledge or disposition of My Shareholding inpart or in whole; and 3) designating and appointing on behalf of myself the legal representative, director and/or executive director, supervisor, manager and othersenior management members of Mobile Vision. However, the decision made by Mobile Vision taking advantage of the power of attorney which is against the PRClaws shall be null and void.1深圳中传天下将有权在授权范围内代表本人签署独家购买权协议（本人应要求作为协议方）中约定的转让协议，如期履行本人作为协议一方的与本授权委托书同日签署的股权质押协议和独家购买权协议，该权利的行使将不对本授权形成任何限制。Without limiting the generality of the powers granted hereunder, WFOE shall have the power and authority under this Power of Attorney to execute theTransfer Contracts stipulated in Exclusive Option Agreement, to which I am required to be a party, on behalf of myself, and to effect the terms of the Share PledgeAgreement and Exclusive Option Agreement, both dated the date hereof, to which I am a party.深圳中传天下就相关股权的一切行为均视为本人的行为，签署的一切文件均视为本人签署，本人会予以承认。All the actions associated with Shares conducted by WFOE shall be deemed as my own actions, and all the documents related to Shares executed by WFOEshall be deemed to be executed by me. I hereby acknowledge and ratify those actions and/or documents by the WFOE.深圳中传天下有转委托权，可以就上述事项的办理自行再委托其他人或单位而不必事先通知本人或获得本人的同意。WFOE is entitled to reauthorize or assign its rights related to the aforesaid matters to any other person or entity at its own discretion and without giving priornotice to me or obtaining my consent.在本人为中传视讯的股东期间，本授权委托书不可撤销并持续有效，自授权委托书签署之日起算。This Power of Attorney is coupled with an interest and shall be irrevocable and continuously valid from the date of execution of this Power of Attorney, solong as I am a shareholder of Mobile Vision.本授权委托书期间，本人特此放弃已经通过本授权委托书授权给深圳中传天下的与相关股权有关的所有权利，不再自行行使该等权利。During the term of this Power of Attorney, I hereby waive all the rights associated with Shares, which have been authorized to WFOE through this Power ofAttorney, and shall not exercise such rights by myself.本授权委托书以中文和英文书就，中英文版本如有冲突，应以中文版为准。This Power of Attorney is written in Chinese and English; in case there is any conflict between the Chinese version and the English version, the Chineseversion shall prevail.刘东来Liu Donglai签署：By:日期：年月日Date:2EX4.23 9 f20f2017ex423_luokung.htm POWER OF ATTORNEY BY XUESONG SONG, DATED AUGUST 31, 2015Exhibit 4.23授权委托书Power of Attorney本人宋雪松，持有中华人民共和国身份证（号码：***************417），通讯地址为，系拥有北京中传视讯科技有限公司（“中传视讯”）61.8245%股权（“相关股权”）的股东，就相关股权，特此不可撤销地授权中传天下信息科技（深圳）有限公司（“深圳中传天下”）在本授权委托书的有效期内行使如下权利：The undersigned, Song Xuesong, a person with the PRC identification card number of ***************417, with address at , and a holder of 61.8245% ofthe entire registered capital (“Shares”) in Beijing Mobile Vision Technology Co., Ltd. (“Mobile Vision”), hereby irrevocably authorize Zhongchuan TianxiaInformation Technology (Shenzhen) Co., Ltd. (“WFOE”) to exercise the following rights relating to Shares during the term of this Power of Attorney:授权深圳中传天下作为本人唯一的排他的代理人就有关相关股权的事宜全权代表本人行使包括但不限于如下的权利：1）参加中传视讯的股东会；2）行使按照法律和中传视讯章程规定本人所享有的全部股东权利和股东表决权，包括但不限于出售或转让或质押或处置相关股权的全部或任何一部分；以及3）作为本人的授权代表指定和任命中传视讯的法定代表人、董事和/或执行董事、监事、经理以及其他高级管理人员等。但中传视讯利用该等授权做出违反中华人民共和国法律的决定无效。WFOE is hereby authorized to act on behalf of myself as my exclusive agent and attorney with respect to all matters concerning My Shareholding, includingwithout limitation: 1) attending shareholders’ meetings of Mobile Vision; 2) exercising all the shareholder’s rights and shareholder’s voting rights I am entitled tounder the laws of China and Articles of Association of Mobile Vision, including but not limited to the sale or transfer or pledge or disposition of My Shareholding inpart or in whole; and 3) designating and appointing on behalf of myself the legal representative, director and/or executive director, supervisor, manager and othersenior management members of Mobile Vision. However, the decision made by Mobile Vision taking advantage of the power of attorney which is against the PRClaws shall be null and void.1深圳中传天下将有权在授权范围内代表本人签署独家购买权协议（本人应要求作为协议方）中约定的转让协议，如期履行本人作为协议一方的与本授权委托书同日签署的股权质押协议和独家购买权协议，该权利的行使将不对本授权形成任何限制。Without limiting the generality of the powers granted hereunder, WFOE shall have the power and authority under this Power of Attorney to execute theTransfer Contracts stipulated in Exclusive Option Agreement, to which I am required to be a party, on behalf of myself, and to effect the terms of the Share PledgeAgreement and Exclusive Option Agreement, both dated the date hereof, to which I am a party.深圳中传天下就相关股权的一切行为均视为本人的行为，签署的一切文件均视为本人签署，本人会予以承认。All the actions associated with Shares conducted by WFOE shall be deemed as my own actions, and all the documents related to Shares executed by WFOEshall be deemed to be executed by me. I hereby acknowledge and ratify those actions and/or documents by the WFOE.深圳中传天下有转委托权，可以就上述事项的办理自行再委托其他人或单位而不必事先通知本人或获得本人的同意。WFOE is entitled to reauthorize or assign its rights related to the aforesaid matters to any other person or entity at its own discretion and without giving priornotice to me or obtaining my consent.在本人为中传视讯的股东期间，本授权委托书不可撤销并持续有效，自授权委托书签署之日起算。This Power of Attorney is coupled with an interest and shall be irrevocable and continuously valid from the date of execution of this Power of Attorney, solong as I am a shareholder of Mobile Vision.本授权委托书期间，本人特此放弃已经通过本授权委托书授权给深圳中传天下的与相关股权有关的所有权利，不再自行行使该等权利。During the term of this Power of Attorney, I hereby waive all the rights associated with Shares, which have been authorized to WFOE through this Power ofAttorney, and shall not exercise such rights by myself.本授权委托书以中文和英文书就，中英文版本如有冲突，应以中文版为准。This Power of Attorney is written in Chinese and English; in case there is any conflict between the Chinese version and the English version, the Chineseversion shall prevail.宋雪松Song Xuesong签署：By:日期：年月日Date:2EX8.1 10 f20f2017ex81_luokung.htm LIST OF SUBSIDIARIES AND CONSOLIDATED VARIABLE INTEREST ENTITIESExhibit 8.1List of Subsidiaries of the CompanyName of EntityJurisdiction of Incorporation/OrganizationLK Technology Ltd.British Virgin IslandsTopsky Infotech Holdings Pte Ltd.SingaporeSuperengine Holdings LimitedBritish Virgin IslandsMMB LimitedHong KongMobile Media (China Limited)Hong KongZhong Chuan Tian Xia Information and Technology (Beijing) LimitedBeijing, PRCZhong Chuan Xia Information and Technology (Shenzhen) LimitedShenzhen, PRCBeijing Zhong Chuan Shi Xun Technology Limited (VIE Entity)Beijing, PRCJiangsu Zhong Chuan Rui You Information and Technology Limited (VIE Entity)Jiangsu, PRCHuoerguosi Luokuang Information and Technology Limited (VIE Entity)Huoerguosi, PRCShenzhen Jiu Zhou Shi Dai Digital Technology LimitedShenzhen, PRCEX10.1 11 f20f2017ex101_luokung.htm EMPLOYMENT AGREEMENT, DATED AUGUST 19, 2018, BETWEEN LUOKUNG TECHNOLOGY CORP. AND XUESONGSONGExhibit 10.1EMPLOYMENT AGREEMENTThis EMPLOYMENT AGREEMENT (the “Agreement”) is made and entered into as of this 19 day of August, 2018 (the “Effective Date”), by and between LuokungTechnology Corp., a British Virgin Islands corporation (the “Company”) and Xuesong Song (the “Executive”), a Chinese citizen.WITNESSETH:WHEREAS, the parties desire to enter into this Agreement setting forth the terms and conditions of the employment relationship between the Executiveand the Company.NOW, THEREFORE, in consideration of the foregoing premises and the mutual covenants and agreements contained herein, the parties hereto agree asfollows:1. EMPLOYMENT.1.1 Agreement to Employ. The Company hereby agrees to employ Executive, and Executive hereby agrees to serve, subject to the provisions of thisAgreement, as an officer and employee of the Company.1.2 Duties and Schedule. Executive shall serve as the Company’s Chief Executive Officer (“CEO”). The responsibilities of the Executive shall be subject tothe bylaws of the Company and determined by the Board of Directors of the Company (the “Board”). The Executive shall report directly to the Board and shall havesuch responsibilities as designated by the Board of the Company to the extent that such responsibilities are not inconsistent with all applicable laws, regulationsand rules. Executive shall devote his best efforts and all of his business time to his position with the Company during the Term.2. TERM OF EMPLOYMENT. Unless Executive’s employment shall sooner terminate pursuant to Section 4, the Company shall employ Executive for a fouryear term commencing on the Effective Date (the “Term”), which Term shall be renewable upon mutual agreement of the Company and the Executive, as approved bythe Board.3. COMPENSATION.3.1 Salary. Executive’s salary during the Term shall be $Nil.3.2 Bonus. At the sole discretion of the Board, or any committee duly designated by the Board and authorized to act thereto, the Executive shall be eligiblefor an annual cash bonus.3.3 Vacation. Executive shall be entitled to 8 days of paid vacation per year. In the event that Executive remains employed by the Company for 3 years ormore, Executive shall be entitled to 12 days of paid vacation.3.4 Business Expenses. Executive shall be reimbursed by the Company for all ordinary and necessary expenses incurred by Executive; provided that theyare incurred and approved in writing in accordance with the Company’s expense policy.3.5 Benefits. During the Term, Executive shall be allowed to participate, on the same basis generally as other employees of the Company, in all generalemployee benefit plans and programs, including improvements or modifications of the same, which may exist as of the Effective Date or thereafter and which aremade available by the Company to all or substantially all of its employees. Such benefits, plans, and programs may include, without limitation, any health, and dentalinsurance or 401K programs, if and when instituted. Any benefit plan currently existing or instituted by the Company after the Effective Date may be altered, changeor discontinued by the Company at its sole discretion and at any time without obligation of any nature to Executive. Except as specifically provided herein, nothingin this Agreement is to be construed or interpreted to increase or alter in any way the rights, participation, coverage, or benefits under such benefit plans orprograms to other than those provided to other employees pursuant to the terms and conditions of such benefit plans and programs. 14. TERMINATION.4.1 Death. This Agreement shall terminate immediately upon the death of Executive, and Executive’s estate or Executive’s legal representative, as the casemay be, shall be entitled to Executive’s accrued and unpaid Salary as of the date of Executive’s death, plus all other compensation and benefits that were vestedthrough the date of Executive’s death.4.2 Disability. In the event of Executive’s Disability, this Agreement shall terminate and Executive shall be entitled to (a) accrued and unpaid Salary andvacation through the first date that a Disability is determined; and (b) all other compensation and benefits that were vested through the first date that a Disabilityhas been determined. “Disability” means the good faith determination of the Board that Executive has become so physically or mentally incapacitated or disabled asto be unable to satisfactorily perform his duties hereunder for a period of ninety (90) consecutive calendar days or for one hundred twenty (120) days in any threehundred sixty (360) day period, such determination based upon a certificate as to such physical or mental disability issued by a licensed physician and/orpsychiatrist (as the case may be) mutually agreed upon by Executive and the Company.4.3 Termination by Company for Cause. The Company may terminate the Executive for Cause and such termination shall take effect upon the receipt byExecutive of the Notice of Termination. Upon the effective date of the termination for Cause, Executive shall be solely entitled to accrued and unpaid Salary throughsuch effective date. “Cause” means: (i) engaging in any act, omission or misconduct that is injurious to the Company or an affiliate; (ii) gross negligence or willfulmisconduct in connection with the performance of duties; (iii) conviction of a criminal offense (other than minor traffic offenses); (iv) fraud, embezzlement ormisappropriation of funds or property of the Company or an affiliate; (v) material breach of any term of any employment or other services, confidentiality, intellectualproperty or noncompetition agreements, if any, between the Executive and the Company or an affiliate; (vi) the entry of an order duly issued by any regulatoryagency (including federal, state and local regulatory agencies and selfregulatory bodies) having jurisdiction over the Company or an affiliate requiring the removalof the Executive from any office held with the Company or prohibiting the Executive from participating in the business or affairs of the Company or any affiliate; or(vii) the revocation or threatened revocation of any of the Company’s or an affiliate’s government licenses, permits or approvals, which is primarily due to theExecutive’s action or inaction and such revocation or threatened revocation would be alleviated or mitigated in any material respect by the termination of theExecutive’s employment or services with the Company or an affiliate. 4.4 Voluntary Termination by Executive. The Executive may voluntarily terminate his employment for any reason and such termination shall take effect 30days after the receipt by Company of the Notice of Termination. Upon the effective date of such termination, Executive shall be entitled to (a) accrued and unpaidSalary and vacation through such termination date; and (b) all other compensation and benefits that were vested through such termination date. In the eventExecutive is terminated without notice, it shall be deemed a termination by the Company for Cause.4.5 Notice of Termination. Any termination of the employment by the Company or the Executive shall be communicated by a notice in accordance withSection 8.4 of this Agreement (the “Notice of Termination”). Such notice shall (a) indicate the specific termination provision in this Agreement relied upon and (b) ifthe termination is for Cause, the date on which the Executive’s employment is to be terminated.4.6 Severance. The Executive shall not be entitled to severance payments upon any termination provided in Section 4 herein.5. EMPLOYEE’S REPRESENTATION. The Executive represents and warrants to the Company that: (a) he is subject to no contractual, fiduciary or otherobligation which may affect the performance of his duties under this Agreement; (b) he has terminated, in accordance with their terms, any contractual obligationwhich may affect his performance under this Agreement; and (c) his employment with the Company will not require him to use or disclose proprietary or confidentialinformation of any other person or entity.26. CONFIDENTIAL INFORMATION Except as permitted or directed by the Board of Directors of the Company in writing, during the time the Executive isemployed by the Company or at any time thereafter, the Executive shall not use for his personal purposes nor divulge, furnish, or make accessible to anyone or usein any way (other than in the ordinary course of the business of the Company) any confidential or secret information or knowledge of the Company, whetherdeveloped by himself or by others. Such confidential and/or secret information encompassed by this Section 6 includes, but is not limited to, the Company’scustomer and supplier lists, business plans, software, systems, and financial, marketing, and personnel information. The Executive agrees to refrain from any acts oromissions that would reduce the value of any confidential or secret knowledge or information to the Company, both during his employment hereunder and at anytime after the termination of his employment. The Executive’s obligations of confidentiality under this Section 6 shall not apply to any knowledge or information thatis now published publicly or that subsequently becomes generally publicly known, other than as a direct or indirect result of a breach of this Agreement by theExecutive.7. NONCOMPETITION: NONSOLICITATION; INVENTIONS.7.1 NonCompetition. During the employment of the Executive under this Agreement and for a period of six (6) months after termination of suchemployment, the Executive shall not at any time compete on his own behalf, or on behalf of any other person or entity, with the Company or any of its affiliateswithin all territories in which the Company does business with respect to the business of the Company or any of its affiliates as such business shall be conductedon the date hereof or during the employment of the Executive under this Agreement. The ownership by the Executive of not more than 5% of a corporation,partnership or other enterprise shall not constitute a violation hereof.7.2 NonSolicitation. During the employment of the Executive under this Agreement and thereafter Executive shall not at any time (i) solicit or induce, onhis own behalf or on behalf of any other person or entity, any employee of the Company or any of its affiliates to leave the employ of the Company or any of itsaffiliates; or (ii) solicit or induce, on his own behalf or on behalf of any other person or entity, any customer or Prospective Customer of the Company or any of theirrespective affiliates to reduce its business with the Company or any of its affiliates. For the purposes of this Agreement, “Prospective Customer” shall mean anyindividual, corporation, trust or other business entity which has either (a) entered into a nondisclosure agreement with the Company or any Company subsidiary oraffiliate or (b) has within the preceding 12 months received a currently pending and not rejected written proposal in reasonable detail from the Company or any ofthe Company’s subsidiary or affiliate.7.3 Inventions and Patents. The Company shall be entitled to the sole benefit and exclusive ownership of any inventions or improvements in products,processes, or other things that may be made or discovered by Executive while he is in the service of the Company, and all patents for the same. During the Term,Executive shall do all acts necessary or required by the Company to give effect to this section and, following the Term, Executive shall do all acts reasonablynecessary or required by the Company to give effect to this section. In all cases, the Company shall pay all costs and fees associated with such acts by Executive.7.4 Return of Property. The Executive agrees that all property in the Executive’s possession that he obtains or is assigned in the course of his employmentwith the Company, including, without limitation, all documents, reports, manuals, memoranda, customer lists, credit cards, keys, access cards, and all other propertyrelating in any way to the business of the Company, is the exclusive property of the Company, even if the Executive authored, created, or assisted in authoring orcreating such property. The Executive shall return to the Company all such property immediately upon termination of employment or at such earlier time as theCompany may request.7.5Court Ordered Revisions.If any portion of this Section 7 is found by a court of competent jurisdiction to be invalid or unenforceable, but would be validand enforceable if modified, this Section 7 shall apply with such modifications necessary to make this Section 7 valid and enforceable. Any portion of this Section 7not required to be so modified shall remain in full force and effect and not be affected thereby.7.6 Specific Performance. The Executive acknowledges that the remedy at law for any breach of any of the provisions of Section 7 will be inadequate, andthat the Company shall be entitled, in addition to any remedy at law or in equity, to preliminary and permanent injunctive relief and specific performance.38. MISCELLANEOUS.8.1 Indemnification. The Company and each of its subsidiaries shall, to the maximum extent provided under applicable law, indemnify and hold Executiveharmless from and against any expenses, including reasonable attorney’s fees, judgments, fines, settlements and other legally permissible amounts (“Losses”),incurred in connection with any proceeding arising out of, or related to, Executive’s employment by the Company, other than any such Losses incurred as a result ofExecutive’s negligence or willful misconduct. The Company shall, or shall cause a subsidiary thereof to, advance to Executive any expenses, including attorney’sfees and costs of settlement, incurred in defending any such proceeding to the maximum extent permitted by applicable law. Such costs and expenses incurred byExecutive in defense of any such proceeding shall be paid by the Company or applicable subsidiary in advance of the final disposition of such proceeding promptlyupon receipt by the Company of (a) written request for payment; (b) appropriate documentation evidencing the incurrence, amount and nature of the costs andexpenses for which payment is being sought; and (c) an undertaking adequate under applicable law made by or on behalf of Executive to repay the amounts soadvanced if it shall ultimately be determined pursuant to any nonappealable judgment or settlement that Executive is not entitled to be indemnified by the Companyor any subsidiary thereof. The Company will provide Executive with coverage under all directors and officers liability insurance policies that it has in effect duringthe Term, with no deductible to Executive. 8.2 Applicable Law. Except as may be otherwise provided herein, this Agreement shall be governed by and construed in accordance with the laws ofChina, applied without reference to principles of conflict of laws. Any dispute arising from or in connection with this Agreement shall be submitted to ShanghaiInternational Arbitration Center (the “Center”) for arbitration under the then effective rules of the Center. The arbitration award shall be the sole, binding, exclusiveand final remedy for resolving any dispute between the parties.8.3 Amendments. This Agreement may not be amended or modified otherwise than by a written agreement executed by the parties hereto or their respectivesuccessors or legal representatives.8.4 Notices. All notices and other communications hereunder shall be in writing and shall be given by handdelivery to the other party, by an internationalmail courier, or by registered or certified mail, return receipt requested, postage prepaid, addressed as follows:If to the Executive:Xuesong Song________________________________________________If to the Company:______________________________________Or to such other address as either party shall have furnished to the other in writing in accordance herewith. Notices and communications shall be effective whendelivered to the addressee.8.5 Withholding. The Company may withhold from any amounts payable under the Agreement, such federal, state and local income, unemployment, socialsecurity and similar employment related taxes and similar employment related withholdings as shall be required to be withheld pursuant to any applicable law orregulation.8.6 Severability. The invalidity or unenforceability of any provision of this Agreement shall not affect the validity or enforceability of any other provision ofthis Agreement and any such provision which is not valid or enforceable in whole shall be enforced to the maximum extent permitted by law.8.7 Captions. The captions of this Agreement are not part of the provisions and shall have no force or effect.48.8 Entire Agreement. This Agreement contains the entire agreement among the parties concerning the subject matter hereof and supersedes all prioragreements, understandings, discussions, negotiations and undertakings, whether written or oral, between the parties with respect thereto.8.9 Survival. The respective rights and obligations of the parties hereunder shall survive any termination of this Agreement or the Executive’s employmenthereunder to the extent necessary to the intended preservation of such rights and obligations.8.10 Waiver. Either Party's failure to enforce any provision or provisions of this Agreement shall not in any way be construed as a waiver of any suchprovision or provisions, or prevent that party thereafter from enforcing each and every other provision of this Agreement.8.11 Successors. This Agreement is personal to Executive and, without the prior express written consent of the Company, shall not be assignable byExecutive. This Agreement shall inure to the benefit of and be enforceable by Executive’s estate, heirs, beneficiaries, and/or legal representatives. This Agreementshall inure to the benefit of and be binding upon the Company and its successors and assigns.8.12 Joint Efforts/Counterparts. Preparation of this Agreement shall be deemed to be the joint effort of the parties hereto and shall not be construed moreseverely against any party. This Agreement may be signed in two or more counterparts, each of which shall be deemed an original and all of which together shallconstitute one and the same instrument.8.13 Representation by Counsel. Each Party hereby represents that it has had the opportunity to be represented by legal counsel of its choice inconnection with the negotiation and execution of this Agreement.IN WITNESS WHEREOF, the parties have executed this Agreement as of the day and year first above written.EXECUTIVE:LUOKUNG TECHNOLOGY CORP./s/ Xuesong Song/s/ Jie YuXuesong SongJie YuChief Financial Officer5EX10.2 12 f20f2017ex102_luokung.htm EMPLOYMENT AGREEMENT, DATED AUGUST 19, 2018, BY AND BETWEEN LUOKUNG TECHNOLOGY CORP. AND JIEYUExhibit 10.2EMPLOYMENT AGREEMENTThis EMPLOYMENT AGREEMENT (the “Agreement”) is made and entered into as of this 19 day of August, 2018 (the “Effective Date”), by and between LuokungTechnology Corp., a British Virgin Islands corporation (the “Company”) and Jie (Jay) Yu (the “Executive”), a Chinese citizen.WITNESSETH:WHEREAS, the parties desire to enter into this Agreement setting forth the terms and conditions of the employment relationship between the Executiveand the Company.NOW, THEREFORE, in consideration of the foregoing premises and the mutual covenants and agreements contained herein, the parties hereto agree asfollows:1. EMPLOYMENT.1.1 Agreement to Employ. The Company hereby agrees to employ Executive, and Executive hereby agrees to serve, subject to the provisions of thisAgreement, as an officer and employee of the Company.1.2 Duties and Schedule. Executive shall serve as the Company’s Chief Financial Officer, and be the Principal Financial Officer and Principal AccountingOfficer of the Company and responsible for all financial matters and management of the Company. The Executive shall report directly to the Company’s ChiefExecutive Officer and Board of Directors (the “Board”) and shall have such responsibilities as designated by the Chief Executive Officer or Board to the extent thatsuch responsibilities are not inconsistent with all applicable laws, regulations and rules. Executive shall devote his best efforts and all of his business time to hisposition with the Company during the Term.2. TERM OF EMPLOYMENT. Unless Executive’s employment shall sooner terminate pursuant to Section 4, the Company shall employ Executive for a fouryear term commencing on the Effective Date (the “Term”), which Term shall be renewable upon mutual agreement of the Company and the Executive, as approved bythe Board.3. COMPENSATION.3.1 Salary. Executive’s salary during the Term shall be RMB700,000 per year (the “Salary”), payable monthly.3.2 Bonus. At the sole discretion of the Board, or any committee duly designated by the Board and authorized to act thereto, the Executive shall be eligiblefor an annual cash bonus.3.3 Vacation. Executive shall be entitled to 8 days of paid vacation per year. In the event that Executive remains employed by the Company for 3 years ormore, Executive shall be entitled to 12 days of paid vacation.3.4 Business Expenses. Executive shall be reimbursed by the Company for all ordinary and necessary expenses incurred by Executive; provided that theyare incurred and approved in writing in accordance with the Company’s expense policy.3.5 Benefits. During the Term, Executive shall be allowed to participate, on the same basis generally as other employees of the Company, in all generalemployee benefit plans and programs, including improvements or modifications of the same, which may exist as of the Effective Date or thereafter and which aremade available by the Company to all or substantially all of its employees. Such benefits, plans, and programs may include, without limitation, any health, and dentalinsurance or 401K programs, if and when instituted. Any benefit plan currently existing or instituted by the Company after the Effective Date may be altered, changeor discontinued by the Company at its sole discretion and at any time without obligation of any nature to Executive. Except as specifically provided herein, nothingin this Agreement is to be construed or interpreted to increase or alter in any way the rights, participation, coverage, or benefits under such benefit plans orprograms to other than those provided to other employees pursuant to the terms and conditions of such benefit plans and programs. 14. TERMINATION.4.1 Death. This Agreement shall terminate immediately upon the death of Executive, and Executive’s estate or Executive’s legal representative, as the casemay be, shall be entitled to Executive’s accrued and unpaid Salary as of the date of Executive’s death, plus all other compensation and benefits that were vestedthrough the date of Executive’s death.4.2 Disability. In the event of Executive’s Disability, this Agreement shall terminate and Executive shall be entitled to (a) accrued and unpaid Salary andvacation through the first date that a Disability is determined; and (b) all other compensation and benefits that were vested through the first date that a Disabilityhas been determined. “Disability” means the good faith determination of the Board that Executive has become so physically or mentally incapacitated or disabled asto be unable to satisfactorily perform his duties hereunder for a period of ninety (90) consecutive calendar days or for one hundred twenty (120) days in any threehundred sixty (360) day period, such determination based upon a certificate as to such physical or mental disability issued by a licensed physician and/orpsychiatrist (as the case may be) mutually agreed upon by Executive and the Company.4.3 Termination by Company for Cause. The Company may terminate the Executive for Cause and such termination shall take effect upon the receipt byExecutive of the Notice of Termination. Upon the effective date of the termination for Cause, Executive shall be solely entitled to accrued and unpaid Salary throughsuch effective date. “Cause” means: (i) engaging in any act, omission or misconduct that is injurious to the Company or an affiliate; (ii) gross negligence or willfulmisconduct in connection with the performance of duties; (iii) conviction of a criminal offense (other than minor traffic offenses); (iv) fraud, embezzlement ormisappropriation of funds or property of the Company or an affiliate; (v) material breach of any term of any employment or other services, confidentiality, intellectualproperty or noncompetition agreements, if any, between the Executive and the Company or an affiliate; (vi) the entry of an order duly issued by any regulatoryagency (including federal, state and local regulatory agencies and selfregulatory bodies) having jurisdiction over the Company or an affiliate requiring the removalof the Executive from any office held with the Company or prohibiting the Executive from participating in the business or affairs of the Company or any affiliate; or(vii) the revocation or threatened revocation of any of the Company’s or an affiliate’s government licenses, permits or approvals, which is primarily due to theExecutive’s action or inaction and such revocation or threatened revocation would be alleviated or mitigated in any material respect by the termination of theExecutive’s employment or services with the Company or an affiliate. 4.4 Voluntary Termination by Executive. The Executive may voluntarily terminate his employment for any reason and such termination shall take effect 30days after the receipt by Company of the Notice of Termination. Upon the effective date of such termination, Executive shall be entitled to (a) accrued and unpaidSalary and vacation through such termination date; and (b) all other compensation and benefits that were vested through such termination date. In the eventExecutive is terminated without notice, it shall be deemed a termination by the Company for Cause.4.5 Notice of Termination. Any termination of the employment by the Company or the Executive shall be communicated by a notice in accordance withSection 8.4 of this Agreement (the “Notice of Termination”). Such notice shall (a) indicate the specific termination provision in this Agreement relied upon and (b) ifthe termination is for Cause, the date on which the Executive’s employment is to be terminated.4.6 Severance. The Executive shall not be entitled to severance payments upon any termination provided in Section 4 herein.5. EMPLOYEE’S REPRESENTATION. The Executive represents and warrants to the Company that: (a) he is subject to no contractual, fiduciary or otherobligation which may affect the performance of his duties under this Agreement; (b) he has terminated, in accordance with their terms, any contractual obligationwhich may affect his performance under this Agreement; and (c) his employment with the Company will not require him to use or disclose proprietary or confidentialinformation of any other person or entity.26. CONFIDENTIAL INFORMATION Except as permitted or directed by the Board of Directors of the Company in writing, during the time the Executive isemployed by the Company or at any time thereafter, the Executive shall not use for his personal purposes nor divulge, furnish, or make accessible to anyone or usein any way (other than in the ordinary course of the business of the Company) any confidential or secret information or knowledge of the Company, whetherdeveloped by himself or by others. Such confidential and/or secret information encompassed by this Section 6 includes, but is not limited to, the Company’scustomer and supplier lists, business plans, software, systems, and financial, marketing, and personnel information. The Executive agrees to refrain from any acts oromissions that would reduce the value of any confidential or secret knowledge or information to the Company, both during his employment hereunder and at anytime after the termination of his employment. The Executive’s obligations of confidentiality under this Section 6 shall not apply to any knowledge or information thatis now published publicly or that subsequently becomes generally publicly known, other than as a direct or indirect result of a breach of this Agreement by theExecutive.7. NONCOMPETITION: NONSOLICITATION; INVENTIONS.7.1 NonCompetition. During the employment of the Executive under this Agreement and for a period of six (6) months after termination of suchemployment, the Executive shall not at any time compete on his own behalf, or on behalf of any other person or entity, with the Company or any of its affiliateswithin all territories in which the Company does business with respect to the business of the Company or any of its affiliates as such business shall be conductedon the date hereof or during the employment of the Executive under this Agreement. The ownership by the Executive of not more than 5% of a corporation,partnership or other enterprise shall not constitute a violation hereof.7.2 NonSolicitation. During the employment of the Executive under this Agreement and thereafter Executive shall not at any time (i) solicit or induce, onhis own behalf or on behalf of any other person or entity, any employee of the Company or any of its affiliates to leave the employ of the Company or any of itsaffiliates; or (ii) solicit or induce, on his own behalf or on behalf of any other person or entity, any customer or Prospective Customer of the Company or any of theirrespective affiliates to reduce its business with the Company or any of its affiliates. For the purposes of this Agreement, “Prospective Customer” shall mean anyindividual, corporation, trust or other business entity which has either (a) entered into a nondisclosure agreement with the Company or any Company subsidiary oraffiliate or (b) has within the preceding 12 months received a currently pending and not rejected written proposal in reasonable detail from the Company or any ofthe Company’s subsidiary or affiliate.7.3 Inventions and Patents. The Company shall be entitled to the sole benefit and exclusive ownership of any inventions or improvements in products,processes, or other things that may be made or discovered by Executive while he is in the service of the Company, and all patents for the same. During the Term,Executive shall do all acts necessary or required by the Company to give effect to this section and, following the Term, Executive shall do all acts reasonablynecessary or required by the Company to give effect to this section. In all cases, the Company shall pay all costs and fees associated with such acts by Executive.7.4 Return of Property. The Executive agrees that all property in the Executive’s possession that he obtains or is assigned in the course of his employmentwith the Company, including, without limitation, all documents, reports, manuals, memoranda, customer lists, credit cards, keys, access cards, and all other propertyrelating in any way to the business of the Company, is the exclusive property of the Company, even if the Executive authored, created, or assisted in authoring orcreating such property. The Executive shall return to the Company all such property immediately upon termination of employment or at such earlier time as theCompany may request.7.5Court Ordered Revisions.If any portion of this Section 7 is found by a court of competent jurisdiction to be invalid or unenforceable, but would be validand enforceable if modified, this Section 7 shall apply with such modifications necessary to make this Section 7 valid and enforceable. Any portion of this Section 7not required to be so modified shall remain in full force and effect and not be affected thereby.7.6 Specific Performance. The Executive acknowledges that the remedy at law for any breach of any of the provisions of Section 7 will be inadequate, andthat the Company shall be entitled, in addition to any remedy at law or in equity, to preliminary and permanent injunctive relief and specific performance.38. MISCELLANEOUS.8.1 Indemnification. The Company and each of its subsidiaries shall, to the maximum extent provided under applicable law, indemnify and hold Executiveharmless from and against any expenses, including reasonable attorney’s fees, judgments, fines, settlements and other legally permissible amounts (“Losses”),incurred in connection with any proceeding arising out of, or related to, Executive’s employment by the Company, other than any such Losses incurred as a result ofExecutive’s negligence or willful misconduct. The Company shall, or shall cause a subsidiary thereof to, advance to Executive any expenses, including attorney’sfees and costs of settlement, incurred in defending any such proceeding to the maximum extent permitted by applicable law. Such costs and expenses incurred byExecutive in defense of any such proceeding shall be paid by the Company or applicable subsidiary in advance of the final disposition of such proceeding promptlyupon receipt by the Company of (a) written request for payment; (b) appropriate documentation evidencing the incurrence, amount and nature of the costs andexpenses for which payment is being sought; and (c) an undertaking adequate under applicable law made by or on behalf of Executive to repay the amounts soadvanced if it shall ultimately be determined pursuant to any nonappealable judgment or settlement that Executive is not entitled to be indemnified by the Companyor any subsidiary thereof. The Company will provide Executive with coverage under all directors and officers liability insurance policies that it has in effect duringthe Term, with no deductible to Executive. 8.2 Applicable Law. Except as may be otherwise provided herein, this Agreement shall be governed by and construed in accordance with the laws ofChina, applied without reference to principles of conflict of laws. Any dispute arising from or in connection with this Agreement shall be submitted to ShanghaiInternational Arbitration Center (the “Center”) for arbitration under the then effective rules of the Center. The arbitration award shall be the sole, binding, exclusiveand final remedy for resolving any dispute between the parties.8.3 Amendments. This Agreement may not be amended or modified otherwise than by a written agreement executed by the parties hereto or their respectivesuccessors or legal representatives.8.4 Notices. All notices and other communications hereunder shall be in writing and shall be given by handdelivery to the other party, by an internationalmail courier, or by registered or certified mail, return receipt requested, postage prepaid, addressed as follows:If to the Executive:Jie Yu________________________________________If to the Company:______________________________________Or to such other address as either party shall have furnished to the other in writing in accordance herewith. Notices and communications shall be effective whendelivered to the addressee.8.5 Withholding. The Company may withhold from any amounts payable under the Agreement, such federal, state and local income, unemployment, socialsecurity and similar employment related taxes and similar employment related withholdings as shall be required to be withheld pursuant to any applicable law orregulation.8.6 Severability. The invalidity or unenforceability of any provision of this Agreement shall not affect the validity or enforceability of any other provision ofthis Agreement and any such provision which is not valid or enforceable in whole shall be enforced to the maximum extent permitted by law.48.7 Captions. The captions of this Agreement are not part of the provisions and shall have no force or effect.8.8 Entire Agreement. This Agreement contains the entire agreement among the parties concerning the subject matter hereof and supersedes all prioragreements, understandings, discussions, negotiations and undertakings, whether written or oral, between the parties with respect thereto.8.9 Survival. The respective rights and obligations of the parties hereunder shall survive any termination of this Agreement or the Executive’s employmenthereunder to the extent necessary to the intended preservation of such rights and obligations.8.10 Waiver. Either Party's failure to enforce any provision or provisions of this Agreement shall not in any way be construed as a waiver of any suchprovision or provisions, or prevent that party thereafter from enforcing each and every other provision of this Agreement.8.11 Successors. This Agreement is personal to Executive and, without the prior express written consent of the Company, shall not be assignable byExecutive. This Agreement shall inure to the benefit of and be enforceable by Executive’s estate, heirs, beneficiaries, and/or legal representatives. This Agreementshall inure to the benefit of and be binding upon the Company and its successors and assigns.8.12 Joint Efforts/Counterparts. Preparation of this Agreement shall be deemed to be the joint effort of the parties hereto and shall not be construed moreseverely against any party. This Agreement may be signed in two or more counterparts, each of which shall be deemed an original and all of which together shallconstitute one and the same instrument.8.13 Representation by Counsel. Each Party hereby represents that it has had the opportunity to be represented by legal counsel of its choice inconnection with the negotiation and execution of this Agreement.IN WITNESS WHEREOF, the parties have executed this Agreement as of the day and year first above written.EXECUTIVE:LUOKUNG TECHNOLOGY CORP./s/ Jie Yu/s/ Xuesong SongJie YuXuesong SongChief Executive Officer5EX12.1 13 f20f2017ex121_luokung.htm CERTIFICATIONExhibit 12.1Certification by the Chief Executive OfficerPursuant to Section 302 of the SarbanesOxley Act of 2002I, Xuesong Song, the Chief Executive Officer of Luokung Technology Corp. (the “Company”), certify that:1.I have reviewed this transition report on Form 20F of the Company;2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statementsmade, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financialcondition, results of operations and cash flows of the Company as of, and for, the periods presented in this report;4.The Company’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange ActRules 13a15(e) and 15d15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a15(f) and 15d15(f)) for the Company andhave:(a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure thatmaterial information relating to the Company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during theperiod in which this report is being prepared;(b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, toprovide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance withgenerally accepted accounting principles;(c)Evaluated the effectiveness of the Company’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of thedisclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and(d)Disclosed in this report any change in the Company’s internal control over financial reporting that occurred during the period covered by the transition reportthat has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting; and5.The Company’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Company’sauditors and the audit committee of the Company’s board of directors (or persons performing the equivalent functions):(a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely toadversely affect the Company’s ability to record, process, summarize and report financial information; and(b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the Company’s internal control over financialreporting.Date: October 12, 2018By:/s/ Xuesong SongXuesong SongChief Executive Officer(principal executive officer)EX12.2 14 f20f2017ex122_luokung.htm CERTIFICATIONExhibit 12.2Certification by the Chief Financial OfficerPursuant to Section 302 of the SarbanesOxley Act of 2002I, Jie Yu, the Chief Financial Officer of Luokung Technology Corp. (the “Company”), certify that:1.I have reviewed this transition report on Form 20F of the Company;2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statementsmade, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financialcondition, results of operations and cash flows of the Company as of, and for, the periods presented in this report;4.The Company’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange ActRules 13a15(e) and 15d15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a15(f) and 15d15(f)) for the Company andhave:(a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure thatmaterial information relating to the Company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during theperiod in which this report is being prepared;(b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, toprovide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance withgenerally accepted accounting principles;(c)Evaluated the effectiveness of the Company’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of thedisclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and(d)Disclosed in this report any change in the Company’s internal control over financial reporting that occurred during the period covered by the transition reportthat has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting; and5.The Company’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Company’sauditors and the audit committee of the Company’s board of directors (or persons performing the equivalent functions):(a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely toadversely affect the Company’s ability to record, process, summarize and report financial information; and(b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the Company’s internal control over financialreporting.Date: October 12, 2018By:/s/ Jie YuJie YuChief Financial Officer(principal financial officer and principal accounting officer)EX13.1 15 f20f2017ex131_luokung.htm CERTIFICATIONExhibit 13.1Certification by the Chief Executive OfficerPursuant to Section 906 of the SarbanesOxley Act of 2002In connection with the Transition report on Form 20F of Luokung Technology Corp. (the “Company”) for the year ended December 31, 2017 as filed withthe Securities and Exchange Commission on the date hereof (the “Report”), I, Xuesong Song, Chairman and Chief Executive Officer of the Company, certify,pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the SarbanesOxley Act of 2002, that to my knowledge:(1)The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and(2)The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.Date: October 12, 2018By:/s/ Xuesong SongXuesong SongChief Executive Officer(principal executive officer)EX13.2 16 f20f2017ex132_luokung.htm CERTIFICATIONExhibit 13.2Certification by the Chief Financial OfficerPursuant to Section 906 of the SarbanesOxley Act of 2002In connection with the Transition report on Form 20F of Luokung Technology Corp. (the “Company”) for the year ended December 31, 2017 as filed withthe Securities and Exchange Commission on the date hereof (the “Report”), I, Jie Yu, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. Section1350, as adopted pursuant to Section 906 of the SarbanesOxley Act of 2002, that to my knowledge:(1)The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and(2)The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.Date: October 12, 2018By:/s/ Jie YuJie YuChief Financial Officer(principal financial officer and principal accounting officer)地址：Address:.b)陈蔚力Chen Weili地址：Address:c)王平Wang Ping地址：Address:17秘密文件 Strictly Confidentiald)刘东来Liu Donglai地址：Address:丙方：北京中传视讯科技有限公司Party C: Beijing Mobile Vision Technology Co., Ltd.地址：北京市朝阳区光华路9号SOHO3QLAB32Address: LAB32, SOHO3Q, No 9, Guanghua Road, Chaoyang District, Beijing.收件人：宋雪松Attn.: Song Xuesong14.3任何一方可按本条规定随时给其他各方发出通知来改变其接收通知的地址。Any Party may at any time change its address for notices by a notice delivered to the other Parties in accordance with the terms hereof.15.分割性Severability如果本协议有任何一条或多条规定根据任何法律或法规在任何方面被裁定为无效、不合法或不可执行，本协议其余规定的有效性、合法性或可执行性不应因此在任何方面受到影响或损害。各方应通过诚意磋商，争取以法律许可以及各方期望的最大限度内有效的规定取代那些无效、不合法或不可执行的规定，而该等有效的规定所产生的经济效果应尽可能与那些无效、不合法或不能强制执行的规定所产生的经济效果相似。In the event that one or several of the provisions of this Contract are found to be invalid, illegal or unenforceable in any aspect in accordance with any laws orregulations, the validity, legality or enforceability of the remaining provisions of this Contract shall not be affected or compromised in any respect. The Partiesshall strive in good faith to replace such invalid, illegal or unenforceable provisions with effective provisions that accomplish to the greatest extent permittedby law and the intentions of the Parties, and the economic effect of such effective provisions shall be as close as possible to the economic effect of thoseinvalid, illegal or unenforceable provisions.18秘密文件 Strictly Confidential16.附件Attachments本协议所列附件，为本协议不可分割的组成部分。The attachments set forth herein shall be an integral part of this Agreement.17.生效Effectiveness17.1本协议的任何修改、补充或变更，均须采用书面形式，经各方签字或盖章并按规定办理政府登记（如需）后生效。Any amendments, changes and supplements to this Agreement shall be in writing and shall become effective upon completion of the governmentalfiling procedures (if applicable) after the affixation of the signatures or seals of the Parties.17.2本协议以中文和英文书就，一式六份，质权人、所有出质人和丙方各持一份，具有同等效力；中英文版本如有冲突，应以中文版为准。This Agreement is written in Chinese and English in six copies. Each Pledgors, Pledgee and Party C shall hold one copy respectively. Each copy of thisAgreement shall have equal validity. In case there is any conflict between the Chinese version and the English version, the Chinese version shall prevail.本页其余部分刻意留为空白The Remainder of this page is intentionally left blank19秘密文件 Strictly Confidential有鉴于此，各方已使得经其授权的代表于文首所述日期签署了本股权质押协议并即生效，以昭信守。IN WITNESS WHEREOF, the Parties have caused their authorized representatives to execute this Equity Interest Pledge Agreement as of the date first abovewritten.甲方：中传天下信息科技（深圳）有限公司（盖章）Party A: Zhongchuan Tianxia Information Technology (Shenzhen) Co., Ltd. (Seal)签字：By:/s/ Hong Ting姓名：洪婷Name: Hong Ting职务：总经理Title: General Manager秘密文件 Strictly Confidential有鉴于此，各方已使得经其授权的代表于文首所述日期签署了本股权质押协议并即生效，以昭信守。IN WITNESS WHEREOF, the Parties have caused their authorized representatives to execute this Equity Interest Pledge Agreement as of the date first abovewritten.乙方：Party B:宋雪松Song Xuesong签署：By:/s/ Song Xuesong秘密文件 Strictly Confidential有鉴于此，各方已使得经其授权的代表于文首所述日期签署了本股权质押协议并即生效，以昭信守。IN WITNESS WHEREOF, the Parties have caused their authorized representatives to execute this Equity Interest Pledge Agreement as of the date first abovewritten.乙方：Party B:陈蔚力Chen Weili签字：By:/s/ Chen Weili秘密文件 Strictly Confidential有鉴于此，各方已使得经其授权的代表于文首所述日期签署了本股权质押协议并即生效，以昭信守。IN WITNESS WHEREOF, the Parties have caused their authorized representatives to execute this Equity Interest Pledge Agreement as of the date first abovewritten.乙方：Party B:王平Wang Ping签字：By:/s/ Wang Ping秘密文件 Strictly Confidential有鉴于此，各方已使得经其授权的代表于文首所述日期签署了本股权质押协议并即生效，以昭信守。IN WITNESS WHEREOF, the Parties have caused their authorized representatives to execute this Equity Interest Pledge Agreement as of the date first abovewritten.乙方：Party B:刘东来Liu Donglai签字：By:/s/ Liu Donglai秘密文件 Strictly Confidential有鉴于此，各方已使得经其授权的代表于文首所述日期签署了本股权质押协议并即生效，以昭信守。IN WITNESS WHEREOF, the Parties have caused their authorized representatives to execute this Equity Interest Pledge Agreement as of the date first abovewritten.丙方：北京中传视讯科技有限公司（盖章）Party B: Beijing Mobile Vision Technology Co., Ltd. (Seal)签字：By:/s/ Song Xuesong姓名：宋雪松Name: Song Xuesong职务：董事长Title: Chairman of the Board秘密文件 Strictly Confidential附件：Attachments:1.北京中传视讯科技有限公司股东名册；Shareholders' Register of Beijing Mobile Vision Technology Co., Ltd.;2.北京中传视讯科技有限公司的出资证明书；The Capital Contribution Certificate of Beijing Mobile Vision Technology Co., Ltd.;3.独家业务合作协议。Exclusive Business Cooperation Agreement.秘密文件 Strictly ConfidentialEX4.20 6 f20f2017ex420_luokung.htm POWER OF ATTORNEY BY WEILI CHEN, DATED AUGUST 31, 2015Exhibit 4.20授权委托书Power of Attorney本人陈蔚力，持有中华人民共和国身份证（号码：*************** 516），通讯地址为广东省，系拥有北京中传视讯科技有限公司（“中传视讯”）14.0848%股权（“相关股权”）的股东，就相关股权，特此不可撤销地授权中传天下信息科技（深圳）有限公司（“深圳中传天下”）在本授权委托书的有效期内行使如下权利：The undersigned, Chen Weili, a person with the PRC identification card number of ***************516, with address at: Guangdong, and a holder of14.0848% of the entire registered capital ("Shares") in Beijing Mobile Vision Technology Co., Ltd. ("Mobile Vision"), hereby irrevocably authorize ZhongchuanTianxia Information Technology (Shenzhen) Co., Ltd. ("WFOE") to exercise the following rights relating to Shares during the term of this Power of Attorney:授权深圳中传天下作为本人唯一的排他的代理人就有关相关股权的事宜全权代表本人行使包括但不限于如下的权利：1）参加中传视讯的股东会；2）行使按照法律和中传视讯章程规定本人所享有的全部股东权利和股东表决权，包括但不限于出售或转让或质押或处置相关股权的全部或任何一部分；以及3）作为本人的授权代表指定和任命中传视讯的法定代表人、董事和/或执行董事、监事、经理以及其他高级管理人员等。但中传视讯利用该等授权做出违反中华人民共和国法律的决定无效。WFOE is hereby authorized to act on behalf of myself as my exclusive agent and attorney with respect to all matters concerning My Shareholding, includingwithout limitation: 1) attending shareholders' meetings of Mobile Vision; 2) exercising all the shareholder's rights and shareholder's voting rights I am entitled tounder the laws of China and Articles of Association of Mobile Vision, including but not limited to the sale or transfer or pledge or disposition of My Shareholding inpart or in whole; and 3) designating and appointing on behalf of myself the legal representative, director and/or executive director, supervisor, manager and othersenior management members of Mobile Vision. However, the decision made by Mobile Vision taking advantage of the power of attorney which is against the PRClaws shall be null and void.1深圳中传天下将有权在授权范围内代表本人签署独家购买权协议（本人应要求作为协议方）中约定的转让协议，如期履行本人作为协议一方的与本授权委托书同日签署的股权质押协议和独家购买权协议，该权利的行使将不对本授权形成任何限制。Without limiting the generality of the powers granted hereunder, WFOE shall have the power and authority under this Power of Attorney to execute theTransfer Contracts stipulated in Exclusive Option Agreement, to which I am required to be a party, on behalf of myself, and to effect the terms of the Share PledgeAgreement and Exclusive Option Agreement, both dated the date hereof, to which I am a party.深圳中传天下就相关股权的一切行为均视为本人的行为，签署的一切文件均视为本人签署，本人会予以承认。All the actions associated with Shares conducted by WFOE shall be deemed as my own actions, and all the documents related to Shares executed by WFOEshall be deemed to be executed by me. I hereby acknowledge and ratify those actions and/or documents by the WFOE.深圳中传天下有转委托权，可以就上述事项的办理自行再委托其他人或单位而不必事先通知本人或获得本人的同意。WFOE is entitled to reauthorize or assign its rights related to the aforesaid matters to any other person or entity at its own discretion and without giving priornotice to me or obtaining my consent.在本人为中传视讯的股东期间，本授权委托书不可撤销并持续有效，自授权委托书签署之日起算。This Power of Attorney is coupled with an interest and shall be irrevocable and continuously valid from the date of execution of this Power of Attorney, solong as I am a shareholder of Mobile Vision.本授权委托书期间，本人特此放弃已经通过本授权委托书授权给深圳中传天下的与相关股权有关的所有权利，不再自行行使该等权利。During the term of this Power of Attorney, I hereby waive all the rights associated with Shares, which have been authorized to WFOE through this Power ofAttorney, and shall not exercise such rights by myself.本授权委托书以中文和英文书就，中英文版本如有冲突，应以中文版为准。This Power of Attorney is written in Chinese and English; in case there is any conflict between the Chinese version and the English version, the Chineseversion shall prevail.陈蔚力Chen Weili签署：By:日期：年月日Date:2EX4.21 7 f20f2017ex421_luokung.htm POWER OF ATTORNEY BY PING WANG, DATED AUGUST 31, 2015Exhibit 4.21授权委托书Power of Attorney本人王平，持有中华人民共和国身份证（号码：***************01x），通讯地址为广东省，系拥有北京中传视讯科技有限公司（“中传视讯”）19.9872%股权（“相关股权”）的股东，就相关股权，特此不可撤销地授权中传天下信息科技（深圳）有限公司（“深圳中传天下”）在本授权委托书的有效期内行使如下权利：The undersigned, Wang Ping, a person with the PRC identification card number of ***************01x, with address at Guangdong, and a holder of19.9872% of the entire registered capital (“Shares”) in Beijing Mobile Vision Technology Co., Ltd. (“Mobile Vision”), hereby irrevocably authorize ZhongchuanTianxia Information Technology (Shenzhen) Co., Ltd. (“WFOE”) to exercise the following rights relating to Shares during the term of this Power of Attorney:授权深圳中传天下作为本人唯一的排他的代理人就有关相关股权的事宜全权代表本人行使包括但不限于如下的权利：1）参加中传视讯的股东会；2）行使按照法律和中传视讯章程规定本人所享有的全部股东权利和股东表决权，包括但不限于出售或转让或质押或处置相关股权的全部或任何一部分；以及3）作为本人的授权代表指定和任命中传视讯的法定代表人、董事和/或执行董事、监事、经理以及其他高级管理人员等。但中传视讯利用该等授权做出违反中华人民共和国法律的决定无效。WFOE is hereby authorized to act on behalf of myself as my exclusive agent and attorney with respect to all matters concerning My Shareholding, includingwithout limitation: 1) attending shareholders’ meetings of Mobile Vision; 2) exercising all the shareholder’s rights and shareholder’s voting rights I am entitled tounder the laws of China and Articles of Association of Mobile Vision, including but not limited to the sale or transfer or pledge or disposition of My Shareholding inpart or in whole; and 3) designating and appointing on behalf of myself the legal representative, director and/or executive director, supervisor, manager and othersenior management members of Mobile Vision. However, the decision made by Mobile Vision taking advantage of the power of attorney which is against the PRClaws shall be null and void.1深圳中传天下将有权在授权范围内代表本人签署独家购买权协议（本人应要求作为协议方）中约定的转让协议，如期履行本人作为协议一方的与本授权委托书同日签署的股权质押协议和独家购买权协议，该权利的行使将不对本授权形成任何限制。Without limiting the generality of the powers granted hereunder, WFOE shall have the power and authority under this Power of Attorney to execute theTransfer Contracts stipulated in Exclusive Option Agreement, to which I am required to be a party, on behalf of myself, and to effect the terms of the Share PledgeAgreement and Exclusive Option Agreement, both dated the date hereof, to which I am a party.深圳中传天下就相关股权的一切行为均视为本人的行为，签署的一切文件均视为本人签署，本人会予以承认。All the actions associated with Shares conducted by WFOE shall be deemed as my own actions, and all the documents related to Shares executed by WFOEshall be deemed to be executed by me. I hereby acknowledge and ratify those actions and/or documents by the WFOE.深圳中传天下有转委托权，可以就上述事项的办理自行再委托其他人或单位而不必事先通知本人或获得本人的同意。WFOE is entitled to reauthorize or assign its rights related to the aforesaid matters to any other person or entity at its own discretion and without giving priornotice to me or obtaining my consent.在本人为中传视讯的股东期间，本授权委托书不可撤销并持续有效，自授权委托书签署之日起算。This Power of Attorney is coupled with an interest and shall be irrevocable and continuously valid from the date of execution of this Power of Attorney, solong as I am a shareholder of Mobile Vision.本授权委托书期间，本人特此放弃已经通过本授权委托书授权给深圳中传天下的与相关股权有关的所有权利，不再自行行使该等权利。During the term of this Power of Attorney, I hereby waive all the rights associated with Shares, which have been authorized to WFOE through this Power ofAttorney, and shall not exercise such rights by myself.本授权委托书以中文和英文书就，中英文版本如有冲突，应以中文版为准。This Power of Attorney is written in Chinese and English; in case there is any conflict between the Chinese version and the English version, the Chineseversion shall prevail.王平Wang Ping签署：By:日期：年月日Date:2EX4.22 8 f20f2017ex422_luokung.htm POWER OF ATTORNEY BY DONGLAI LIU, DATED AUGUST 31, 2015Exhibit 4.22授权委托书Power of Attorney本人刘东来，持有中华人民共和国身份证（号码：***************912），通讯地址为: ，系拥有北京中传视讯科技有限公司（“中传视讯”）4.1035%股权（“相关股权”）的股东，就相关股权，特此不可撤销地授权中传天下信息科技（深圳）有限公司（“深圳中传天下”）在本授权委托书的有效期内行使如下权利：The undersigned, Liu Donglai, a person with the PRC identification card number of ***************912, with address at: , and a holder of 4.1035% of theentire registered capital (“Shares”) in Beijing Mobile Vision Technology Co., Ltd. (“Mobile Vision”), hereby irrevocably authorize Zhongchuan Tianxia InformationTechnology (Shenzhen) Co., Ltd. (“WFOE”) to exercise the following rights relating to Shares during the term of this Power of Attorney:授权深圳中传天下作为本人唯一的排他的代理人就有关相关股权的事宜全权代表本人行使包括但不限于如下的权利：1）参加中传视讯的股东会；2）行使按照法律和中传视讯章程规定本人所享有的全部股东权利和股东表决权，包括但不限于出售或转让或质押或处置相关股权的全部或任何一部分；以及3）作为本人的授权代表指定和任命中传视讯的法定代表人、董事和/或执行董事、监事、经理以及其他高级管理人员等。但中传视讯利用该等授权做出违反中华人民共和国法律的决定无效。WFOE is hereby authorized to act on behalf of myself as my exclusive agent and attorney with respect to all matters concerning My Shareholding, includingwithout limitation: 1) attending shareholders’ meetings of Mobile Vision; 2) exercising all the shareholder’s rights and shareholder’s voting rights I am entitled tounder the laws of China and Articles of Association of Mobile Vision, including but not limited to the sale or transfer or pledge or disposition of My Shareholding inpart or in whole; and 3) designating and appointing on behalf of myself the legal representative, director and/or executive director, supervisor, manager and othersenior management members of Mobile Vision. However, the decision made by Mobile Vision taking advantage of the power of attorney which is against the PRClaws shall be null and void.1深圳中传天下将有权在授权范围内代表本人签署独家购买权协议（本人应要求作为协议方）中约定的转让协议，如期履行本人作为协议一方的与本授权委托书同日签署的股权质押协议和独家购买权协议，该权利的行使将不对本授权形成任何限制。Without limiting the generality of the powers granted hereunder, WFOE shall have the power and authority under this Power of Attorney to execute theTransfer Contracts stipulated in Exclusive Option Agreement, to which I am required to be a party, on behalf of myself, and to effect the terms of the Share PledgeAgreement and Exclusive Option Agreement, both dated the date hereof, to which I am a party.深圳中传天下就相关股权的一切行为均视为本人的行为，签署的一切文件均视为本人签署，本人会予以承认。All the actions associated with Shares conducted by WFOE shall be deemed as my own actions, and all the documents related to Shares executed by WFOEshall be deemed to be executed by me. I hereby acknowledge and ratify those actions and/or documents by the WFOE.深圳中传天下有转委托权，可以就上述事项的办理自行再委托其他人或单位而不必事先通知本人或获得本人的同意。WFOE is entitled to reauthorize or assign its rights related to the aforesaid matters to any other person or entity at its own discretion and without giving priornotice to me or obtaining my consent.在本人为中传视讯的股东期间，本授权委托书不可撤销并持续有效，自授权委托书签署之日起算。This Power of Attorney is coupled with an interest and shall be irrevocable and continuously valid from the date of execution of this Power of Attorney, solong as I am a shareholder of Mobile Vision.本授权委托书期间，本人特此放弃已经通过本授权委托书授权给深圳中传天下的与相关股权有关的所有权利，不再自行行使该等权利。During the term of this Power of Attorney, I hereby waive all the rights associated with Shares, which have been authorized to WFOE through this Power ofAttorney, and shall not exercise such rights by myself.本授权委托书以中文和英文书就，中英文版本如有冲突，应以中文版为准。This Power of Attorney is written in Chinese and English; in case there is any conflict between the Chinese version and the English version, the Chineseversion shall prevail.刘东来Liu Donglai签署：By:日期：年月日Date:2EX4.23 9 f20f2017ex423_luokung.htm POWER OF ATTORNEY BY XUESONG SONG, DATED AUGUST 31, 2015Exhibit 4.23授权委托书Power of Attorney本人宋雪松，持有中华人民共和国身份证（号码：***************417），通讯地址为，系拥有北京中传视讯科技有限公司（“中传视讯”）61.8245%股权（“相关股权”）的股东，就相关股权，特此不可撤销地授权中传天下信息科技（深圳）有限公司（“深圳中传天下”）在本授权委托书的有效期内行使如下权利：The undersigned, Song Xuesong, a person with the PRC identification card number of ***************417, with address at , and a holder of 61.8245% ofthe entire registered capital (“Shares”) in Beijing Mobile Vision Technology Co., Ltd. (“Mobile Vision”), hereby irrevocably authorize Zhongchuan TianxiaInformation Technology (Shenzhen) Co., Ltd. (“WFOE”) to exercise the following rights relating to Shares during the term of this Power of Attorney:授权深圳中传天下作为本人唯一的排他的代理人就有关相关股权的事宜全权代表本人行使包括但不限于如下的权利：1）参加中传视讯的股东会；2）行使按照法律和中传视讯章程规定本人所享有的全部股东权利和股东表决权，包括但不限于出售或转让或质押或处置相关股权的全部或任何一部分；以及3）作为本人的授权代表指定和任命中传视讯的法定代表人、董事和/或执行董事、监事、经理以及其他高级管理人员等。但中传视讯利用该等授权做出违反中华人民共和国法律的决定无效。WFOE is hereby authorized to act on behalf of myself as my exclusive agent and attorney with respect to all matters concerning My Shareholding, includingwithout limitation: 1) attending shareholders’ meetings of Mobile Vision; 2) exercising all the shareholder’s rights and shareholder’s voting rights I am entitled tounder the laws of China and Articles of Association of Mobile Vision, including but not limited to the sale or transfer or pledge or disposition of My Shareholding inpart or in whole; and 3) designating and appointing on behalf of myself the legal representative, director and/or executive director, supervisor, manager and othersenior management members of Mobile Vision. However, the decision made by Mobile Vision taking advantage of the power of attorney which is against the PRClaws shall be null and void.1深圳中传天下将有权在授权范围内代表本人签署独家购买权协议（本人应要求作为协议方）中约定的转让协议，如期履行本人作为协议一方的与本授权委托书同日签署的股权质押协议和独家购买权协议，该权利的行使将不对本授权形成任何限制。Without limiting the generality of the powers granted hereunder, WFOE shall have the power and authority under this Power of Attorney to execute theTransfer Contracts stipulated in Exclusive Option Agreement, to which I am required to be a party, on behalf of myself, and to effect the terms of the Share PledgeAgreement and Exclusive Option Agreement, both dated the date hereof, to which I am a party.深圳中传天下就相关股权的一切行为均视为本人的行为，签署的一切文件均视为本人签署，本人会予以承认。All the actions associated with Shares conducted by WFOE shall be deemed as my own actions, and all the documents related to Shares executed by WFOEshall be deemed to be executed by me. I hereby acknowledge and ratify those actions and/or documents by the WFOE.深圳中传天下有转委托权，可以就上述事项的办理自行再委托其他人或单位而不必事先通知本人或获得本人的同意。WFOE is entitled to reauthorize or assign its rights related to the aforesaid matters to any other person or entity at its own discretion and without giving priornotice to me or obtaining my consent.在本人为中传视讯的股东期间，本授权委托书不可撤销并持续有效，自授权委托书签署之日起算。This Power of Attorney is coupled with an interest and shall be irrevocable and continuously valid from the date of execution of this Power of Attorney, solong as I am a shareholder of Mobile Vision.本授权委托书期间，本人特此放弃已经通过本授权委托书授权给深圳中传天下的与相关股权有关的所有权利，不再自行行使该等权利。During the term of this Power of Attorney, I hereby waive all the rights associated with Shares, which have been authorized to WFOE through this Power ofAttorney, and shall not exercise such rights by myself.本授权委托书以中文和英文书就，中英文版本如有冲突，应以中文版为准。This Power of Attorney is written in Chinese and English; in case there is any conflict between the Chinese version and the English version, the Chineseversion shall prevail.宋雪松Song Xuesong签署：By:日期：年月日Date:2EX8.1 10 f20f2017ex81_luokung.htm LIST OF SUBSIDIARIES AND CONSOLIDATED VARIABLE INTEREST ENTITIESExhibit 8.1List of Subsidiaries of the CompanyName of EntityJurisdiction of Incorporation/OrganizationLK Technology Ltd.British Virgin IslandsTopsky Infotech Holdings Pte Ltd.SingaporeSuperengine Holdings LimitedBritish Virgin IslandsMMB LimitedHong KongMobile Media (China Limited)Hong KongZhong Chuan Tian Xia Information and Technology (Beijing) LimitedBeijing, PRCZhong Chuan Xia Information and Technology (Shenzhen) LimitedShenzhen, PRCBeijing Zhong Chuan Shi Xun Technology Limited (VIE Entity)Beijing, PRCJiangsu Zhong Chuan Rui You Information and Technology Limited (VIE Entity)Jiangsu, PRCHuoerguosi Luokuang Information and Technology Limited (VIE Entity)Huoerguosi, PRCShenzhen Jiu Zhou Shi Dai Digital Technology LimitedShenzhen, PRCEX10.1 11 f20f2017ex101_luokung.htm EMPLOYMENT AGREEMENT, DATED AUGUST 19, 2018, BETWEEN LUOKUNG TECHNOLOGY CORP. AND XUESONGSONGExhibit 10.1EMPLOYMENT AGREEMENTThis EMPLOYMENT AGREEMENT (the “Agreement”) is made and entered into as of this 19 day of August, 2018 (the “Effective Date”), by and between LuokungTechnology Corp., a British Virgin Islands corporation (the “Company”) and Xuesong Song (the “Executive”), a Chinese citizen.WITNESSETH:WHEREAS, the parties desire to enter into this Agreement setting forth the terms and conditions of the employment relationship between the Executiveand the Company.NOW, THEREFORE, in consideration of the foregoing premises and the mutual covenants and agreements contained herein, the parties hereto agree asfollows:1. EMPLOYMENT.1.1 Agreement to Employ. The Company hereby agrees to employ Executive, and Executive hereby agrees to serve, subject to the provisions of thisAgreement, as an officer and employee of the Company.1.2 Duties and Schedule. Executive shall serve as the Company’s Chief Executive Officer (“CEO”). The responsibilities of the Executive shall be subject tothe bylaws of the Company and determined by the Board of Directors of the Company (the “Board”). The Executive shall report directly to the Board and shall havesuch responsibilities as designated by the Board of the Company to the extent that such responsibilities are not inconsistent with all applicable laws, regulationsand rules. Executive shall devote his best efforts and all of his business time to his position with the Company during the Term.2. TERM OF EMPLOYMENT. Unless Executive’s employment shall sooner terminate pursuant to Section 4, the Company shall employ Executive for a fouryear term commencing on the Effective Date (the “Term”), which Term shall be renewable upon mutual agreement of the Company and the Executive, as approved bythe Board.3. COMPENSATION.3.1 Salary. Executive’s salary during the Term shall be $Nil.3.2 Bonus. At the sole discretion of the Board, or any committee duly designated by the Board and authorized to act thereto, the Executive shall be eligiblefor an annual cash bonus.3.3 Vacation. Executive shall be entitled to 8 days of paid vacation per year. In the event that Executive remains employed by the Company for 3 years ormore, Executive shall be entitled to 12 days of paid vacation.3.4 Business Expenses. Executive shall be reimbursed by the Company for all ordinary and necessary expenses incurred by Executive; provided that theyare incurred and approved in writing in accordance with the Company’s expense policy.3.5 Benefits. During the Term, Executive shall be allowed to participate, on the same basis generally as other employees of the Company, in all generalemployee benefit plans and programs, including improvements or modifications of the same, which may exist as of the Effective Date or thereafter and which aremade available by the Company to all or substantially all of its employees. Such benefits, plans, and programs may include, without limitation, any health, and dentalinsurance or 401K programs, if and when instituted. Any benefit plan currently existing or instituted by the Company after the Effective Date may be altered, changeor discontinued by the Company at its sole discretion and at any time without obligation of any nature to Executive. Except as specifically provided herein, nothingin this Agreement is to be construed or interpreted to increase or alter in any way the rights, participation, coverage, or benefits under such benefit plans orprograms to other than those provided to other employees pursuant to the terms and conditions of such benefit plans and programs. 14. TERMINATION.4.1 Death. This Agreement shall terminate immediately upon the death of Executive, and Executive’s estate or Executive’s legal representative, as the casemay be, shall be entitled to Executive’s accrued and unpaid Salary as of the date of Executive’s death, plus all other compensation and benefits that were vestedthrough the date of Executive’s death.4.2 Disability. In the event of Executive’s Disability, this Agreement shall terminate and Executive shall be entitled to (a) accrued and unpaid Salary andvacation through the first date that a Disability is determined; and (b) all other compensation and benefits that were vested through the first date that a Disabilityhas been determined. “Disability” means the good faith determination of the Board that Executive has become so physically or mentally incapacitated or disabled asto be unable to satisfactorily perform his duties hereunder for a period of ninety (90) consecutive calendar days or for one hundred twenty (120) days in any threehundred sixty (360) day period, such determination based upon a certificate as to such physical or mental disability issued by a licensed physician and/orpsychiatrist (as the case may be) mutually agreed upon by Executive and the Company.4.3 Termination by Company for Cause. The Company may terminate the Executive for Cause and such termination shall take effect upon the receipt byExecutive of the Notice of Termination. Upon the effective date of the termination for Cause, Executive shall be solely entitled to accrued and unpaid Salary throughsuch effective date. “Cause” means: (i) engaging in any act, omission or misconduct that is injurious to the Company or an affiliate; (ii) gross negligence or willfulmisconduct in connection with the performance of duties; (iii) conviction of a criminal offense (other than minor traffic offenses); (iv) fraud, embezzlement ormisappropriation of funds or property of the Company or an affiliate; (v) material breach of any term of any employment or other services, confidentiality, intellectualproperty or noncompetition agreements, if any, between the Executive and the Company or an affiliate; (vi) the entry of an order duly issued by any regulatoryagency (including federal, state and local regulatory agencies and selfregulatory bodies) having jurisdiction over the Company or an affiliate requiring the removalof the Executive from any office held with the Company or prohibiting the Executive from participating in the business or affairs of the Company or any affiliate; or(vii) the revocation or threatened revocation of any of the Company’s or an affiliate’s government licenses, permits or approvals, which is primarily due to theExecutive’s action or inaction and such revocation or threatened revocation would be alleviated or mitigated in any material respect by the termination of theExecutive’s employment or services with the Company or an affiliate. 4.4 Voluntary Termination by Executive. The Executive may voluntarily terminate his employment for any reason and such termination shall take effect 30days after the receipt by Company of the Notice of Termination. Upon the effective date of such termination, Executive shall be entitled to (a) accrued and unpaidSalary and vacation through such termination date; and (b) all other compensation and benefits that were vested through such termination date. In the eventExecutive is terminated without notice, it shall be deemed a termination by the Company for Cause.4.5 Notice of Termination. Any termination of the employment by the Company or the Executive shall be communicated by a notice in accordance withSection 8.4 of this Agreement (the “Notice of Termination”). Such notice shall (a) indicate the specific termination provision in this Agreement relied upon and (b) ifthe termination is for Cause, the date on which the Executive’s employment is to be terminated.4.6 Severance. The Executive shall not be entitled to severance payments upon any termination provided in Section 4 herein.5. EMPLOYEE’S REPRESENTATION. The Executive represents and warrants to the Company that: (a) he is subject to no contractual, fiduciary or otherobligation which may affect the performance of his duties under this Agreement; (b) he has terminated, in accordance with their terms, any contractual obligationwhich may affect his performance under this Agreement; and (c) his employment with the Company will not require him to use or disclose proprietary or confidentialinformation of any other person or entity.26. CONFIDENTIAL INFORMATION Except as permitted or directed by the Board of Directors of the Company in writing, during the time the Executive isemployed by the Company or at any time thereafter, the Executive shall not use for his personal purposes nor divulge, furnish, or make accessible to anyone or usein any way (other than in the ordinary course of the business of the Company) any confidential or secret information or knowledge of the Company, whetherdeveloped by himself or by others. Such confidential and/or secret information encompassed by this Section 6 includes, but is not limited to, the Company’scustomer and supplier lists, business plans, software, systems, and financial, marketing, and personnel information. The Executive agrees to refrain from any acts oromissions that would reduce the value of any confidential or secret knowledge or information to the Company, both during his employment hereunder and at anytime after the termination of his employment. The Executive’s obligations of confidentiality under this Section 6 shall not apply to any knowledge or information thatis now published publicly or that subsequently becomes generally publicly known, other than as a direct or indirect result of a breach of this Agreement by theExecutive.7. NONCOMPETITION: NONSOLICITATION; INVENTIONS.7.1 NonCompetition. During the employment of the Executive under this Agreement and for a period of six (6) months after termination of suchemployment, the Executive shall not at any time compete on his own behalf, or on behalf of any other person or entity, with the Company or any of its affiliateswithin all territories in which the Company does business with respect to the business of the Company or any of its affiliates as such business shall be conductedon the date hereof or during the employment of the Executive under this Agreement. The ownership by the Executive of not more than 5% of a corporation,partnership or other enterprise shall not constitute a violation hereof.7.2 NonSolicitation. During the employment of the Executive under this Agreement and thereafter Executive shall not at any time (i) solicit or induce, onhis own behalf or on behalf of any other person or entity, any employee of the Company or any of its affiliates to leave the employ of the Company or any of itsaffiliates; or (ii) solicit or induce, on his own behalf or on behalf of any other person or entity, any customer or Prospective Customer of the Company or any of theirrespective affiliates to reduce its business with the Company or any of its affiliates. For the purposes of this Agreement, “Prospective Customer” shall mean anyindividual, corporation, trust or other business entity which has either (a) entered into a nondisclosure agreement with the Company or any Company subsidiary oraffiliate or (b) has within the preceding 12 months received a currently pending and not rejected written proposal in reasonable detail from the Company or any ofthe Company’s subsidiary or affiliate.7.3 Inventions and Patents. The Company shall be entitled to the sole benefit and exclusive ownership of any inventions or improvements in products,processes, or other things that may be made or discovered by Executive while he is in the service of the Company, and all patents for the same. During the Term,Executive shall do all acts necessary or required by the Company to give effect to this section and, following the Term, Executive shall do all acts reasonablynecessary or required by the Company to give effect to this section. In all cases, the Company shall pay all costs and fees associated with such acts by Executive.7.4 Return of Property. The Executive agrees that all property in the Executive’s possession that he obtains or is assigned in the course of his employmentwith the Company, including, without limitation, all documents, reports, manuals, memoranda, customer lists, credit cards, keys, access cards, and all other propertyrelating in any way to the business of the Company, is the exclusive property of the Company, even if the Executive authored, created, or assisted in authoring orcreating such property. The Executive shall return to the Company all such property immediately upon termination of employment or at such earlier time as theCompany may request.7.5Court Ordered Revisions.If any portion of this Section 7 is found by a court of competent jurisdiction to be invalid or unenforceable, but would be validand enforceable if modified, this Section 7 shall apply with such modifications necessary to make this Section 7 valid and enforceable. Any portion of this Section 7not required to be so modified shall remain in full force and effect and not be affected thereby.7.6 Specific Performance. The Executive acknowledges that the remedy at law for any breach of any of the provisions of Section 7 will be inadequate, andthat the Company shall be entitled, in addition to any remedy at law or in equity, to preliminary and permanent injunctive relief and specific performance.38. MISCELLANEOUS.8.1 Indemnification. The Company and each of its subsidiaries shall, to the maximum extent provided under applicable law, indemnify and hold Executiveharmless from and against any expenses, including reasonable attorney’s fees, judgments, fines, settlements and other legally permissible amounts (“Losses”),incurred in connection with any proceeding arising out of, or related to, Executive’s employment by the Company, other than any such Losses incurred as a result ofExecutive’s negligence or willful misconduct. The Company shall, or shall cause a subsidiary thereof to, advance to Executive any expenses, including attorney’sfees and costs of settlement, incurred in defending any such proceeding to the maximum extent permitted by applicable law. Such costs and expenses incurred byExecutive in defense of any such proceeding shall be paid by the Company or applicable subsidiary in advance of the final disposition of such proceeding promptlyupon receipt by the Company of (a) written request for payment; (b) appropriate documentation evidencing the incurrence, amount and nature of the costs andexpenses for which payment is being sought; and (c) an undertaking adequate under applicable law made by or on behalf of Executive to repay the amounts soadvanced if it shall ultimately be determined pursuant to any nonappealable judgment or settlement that Executive is not entitled to be indemnified by the Companyor any subsidiary thereof. The Company will provide Executive with coverage under all directors and officers liability insurance policies that it has in effect duringthe Term, with no deductible to Executive. 8.2 Applicable Law. Except as may be otherwise provided herein, this Agreement shall be governed by and construed in accordance with the laws ofChina, applied without reference to principles of conflict of laws. Any dispute arising from or in connection with this Agreement shall be submitted to ShanghaiInternational Arbitration Center (the “Center”) for arbitration under the then effective rules of the Center. The arbitration award shall be the sole, binding, exclusiveand final remedy for resolving any dispute between the parties.8.3 Amendments. This Agreement may not be amended or modified otherwise than by a written agreement executed by the parties hereto or their respectivesuccessors or legal representatives.8.4 Notices. All notices and other communications hereunder shall be in writing and shall be given by handdelivery to the other party, by an internationalmail courier, or by registered or certified mail, return receipt requested, postage prepaid, addressed as follows:If to the Executive:Xuesong Song________________________________________________If to the Company:______________________________________Or to such other address as either party shall have furnished to the other in writing in accordance herewith. Notices and communications shall be effective whendelivered to the addressee.8.5 Withholding. The Company may withhold from any amounts payable under the Agreement, such federal, state and local income, unemployment, socialsecurity and similar employment related taxes and similar employment related withholdings as shall be required to be withheld pursuant to any applicable law orregulation.8.6 Severability. The invalidity or unenforceability of any provision of this Agreement shall not affect the validity or enforceability of any other provision ofthis Agreement and any such provision which is not valid or enforceable in whole shall be enforced to the maximum extent permitted by law.8.7 Captions. The captions of this Agreement are not part of the provisions and shall have no force or effect.48.8 Entire Agreement. This Agreement contains the entire agreement among the parties concerning the subject matter hereof and supersedes all prioragreements, understandings, discussions, negotiations and undertakings, whether written or oral, between the parties with respect thereto.8.9 Survival. The respective rights and obligations of the parties hereunder shall survive any termination of this Agreement or the Executive’s employmenthereunder to the extent necessary to the intended preservation of such rights and obligations.8.10 Waiver. Either Party's failure to enforce any provision or provisions of this Agreement shall not in any way be construed as a waiver of any suchprovision or provisions, or prevent that party thereafter from enforcing each and every other provision of this Agreement.8.11 Successors. This Agreement is personal to Executive and, without the prior express written consent of the Company, shall not be assignable byExecutive. This Agreement shall inure to the benefit of and be enforceable by Executive’s estate, heirs, beneficiaries, and/or legal representatives. This Agreementshall inure to the benefit of and be binding upon the Company and its successors and assigns.8.12 Joint Efforts/Counterparts. Preparation of this Agreement shall be deemed to be the joint effort of the parties hereto and shall not be construed moreseverely against any party. This Agreement may be signed in two or more counterparts, each of which shall be deemed an original and all of which together shallconstitute one and the same instrument.8.13 Representation by Counsel. Each Party hereby represents that it has had the opportunity to be represented by legal counsel of its choice inconnection with the negotiation and execution of this Agreement.IN WITNESS WHEREOF, the parties have executed this Agreement as of the day and year first above written.EXECUTIVE:LUOKUNG TECHNOLOGY CORP./s/ Xuesong Song/s/ Jie YuXuesong SongJie YuChief Financial Officer5EX10.2 12 f20f2017ex102_luokung.htm EMPLOYMENT AGREEMENT, DATED AUGUST 19, 2018, BY AND BETWEEN LUOKUNG TECHNOLOGY CORP. AND JIEYUExhibit 10.2EMPLOYMENT AGREEMENTThis EMPLOYMENT AGREEMENT (the “Agreement”) is made and entered into as of this 19 day of August, 2018 (the “Effective Date”), by and between LuokungTechnology Corp., a British Virgin Islands corporation (the “Company”) and Jie (Jay) Yu (the “Executive”), a Chinese citizen.WITNESSETH:WHEREAS, the parties desire to enter into this Agreement setting forth the terms and conditions of the employment relationship between the Executiveand the Company.NOW, THEREFORE, in consideration of the foregoing premises and the mutual covenants and agreements contained herein, the parties hereto agree asfollows:1. EMPLOYMENT.1.1 Agreement to Employ. The Company hereby agrees to employ Executive, and Executive hereby agrees to serve, subject to the provisions of thisAgreement, as an officer and employee of the Company.1.2 Duties and Schedule. Executive shall serve as the Company’s Chief Financial Officer, and be the Principal Financial Officer and Principal AccountingOfficer of the Company and responsible for all financial matters and management of the Company. The Executive shall report directly to the Company’s ChiefExecutive Officer and Board of Directors (the “Board”) and shall have such responsibilities as designated by the Chief Executive Officer or Board to the extent thatsuch responsibilities are not inconsistent with all applicable laws, regulations and rules. Executive shall devote his best efforts and all of his business time to hisposition with the Company during the Term.2. TERM OF EMPLOYMENT. Unless Executive’s employment shall sooner terminate pursuant to Section 4, the Company shall employ Executive for a fouryear term commencing on the Effective Date (the “Term”), which Term shall be renewable upon mutual agreement of the Company and the Executive, as approved bythe Board.3. COMPENSATION.3.1 Salary. Executive’s salary during the Term shall be RMB700,000 per year (the “Salary”), payable monthly.3.2 Bonus. At the sole discretion of the Board, or any committee duly designated by the Board and authorized to act thereto, the Executive shall be eligiblefor an annual cash bonus.3.3 Vacation. Executive shall be entitled to 8 days of paid vacation per year. In the event that Executive remains employed by the Company for 3 years ormore, Executive shall be entitled to 12 days of paid vacation.3.4 Business Expenses. Executive shall be reimbursed by the Company for all ordinary and necessary expenses incurred by Executive; provided that theyare incurred and approved in writing in accordance with the Company’s expense policy.3.5 Benefits. During the Term, Executive shall be allowed to participate, on the same basis generally as other employees of the Company, in all generalemployee benefit plans and programs, including improvements or modifications of the same, which may exist as of the Effective Date or thereafter and which aremade available by the Company to all or substantially all of its employees. Such benefits, plans, and programs may include, without limitation, any health, and dentalinsurance or 401K programs, if and when instituted. Any benefit plan currently existing or instituted by the Company after the Effective Date may be altered, changeor discontinued by the Company at its sole discretion and at any time without obligation of any nature to Executive. Except as specifically provided herein, nothingin this Agreement is to be construed or interpreted to increase or alter in any way the rights, participation, coverage, or benefits under such benefit plans orprograms to other than those provided to other employees pursuant to the terms and conditions of such benefit plans and programs. 14. TERMINATION.4.1 Death. This Agreement shall terminate immediately upon the death of Executive, and Executive’s estate or Executive’s legal representative, as the casemay be, shall be entitled to Executive’s accrued and unpaid Salary as of the date of Executive’s death, plus all other compensation and benefits that were vestedthrough the date of Executive’s death.4.2 Disability. In the event of Executive’s Disability, this Agreement shall terminate and Executive shall be entitled to (a) accrued and unpaid Salary andvacation through the first date that a Disability is determined; and (b) all other compensation and benefits that were vested through the first date that a Disabilityhas been determined. “Disability” means the good faith determination of the Board that Executive has become so physically or mentally incapacitated or disabled asto be unable to satisfactorily perform his duties hereunder for a period of ninety (90) consecutive calendar days or for one hundred twenty (120) days in any threehundred sixty (360) day period, such determination based upon a certificate as to such physical or mental disability issued by a licensed physician and/orpsychiatrist (as the case may be) mutually agreed upon by Executive and the Company.4.3 Termination by Company for Cause. The Company may terminate the Executive for Cause and such termination shall take effect upon the receipt byExecutive of the Notice of Termination. Upon the effective date of the termination for Cause, Executive shall be solely entitled to accrued and unpaid Salary throughsuch effective date. “Cause” means: (i) engaging in any act, omission or misconduct that is injurious to the Company or an affiliate; (ii) gross negligence or willfulmisconduct in connection with the performance of duties; (iii) conviction of a criminal offense (other than minor traffic offenses); (iv) fraud, embezzlement ormisappropriation of funds or property of the Company or an affiliate; (v) material breach of any term of any employment or other services, confidentiality, intellectualproperty or noncompetition agreements, if any, between the Executive and the Company or an affiliate; (vi) the entry of an order duly issued by any regulatoryagency (including federal, state and local regulatory agencies and selfregulatory bodies) having jurisdiction over the Company or an affiliate requiring the removalof the Executive from any office held with the Company or prohibiting the Executive from participating in the business or affairs of the Company or any affiliate; or(vii) the revocation or threatened revocation of any of the Company’s or an affiliate’s government licenses, permits or approvals, which is primarily due to theExecutive’s action or inaction and such revocation or threatened revocation would be alleviated or mitigated in any material respect by the termination of theExecutive’s employment or services with the Company or an affiliate. 4.4 Voluntary Termination by Executive. The Executive may voluntarily terminate his employment for any reason and such termination shall take effect 30days after the receipt by Company of the Notice of Termination. Upon the effective date of such termination, Executive shall be entitled to (a) accrued and unpaidSalary and vacation through such termination date; and (b) all other compensation and benefits that were vested through such termination date. In the eventExecutive is terminated without notice, it shall be deemed a termination by the Company for Cause.4.5 Notice of Termination. Any termination of the employment by the Company or the Executive shall be communicated by a notice in accordance withSection 8.4 of this Agreement (the “Notice of Termination”). Such notice shall (a) indicate the specific termination provision in this Agreement relied upon and (b) ifthe termination is for Cause, the date on which the Executive’s employment is to be terminated.4.6 Severance. The Executive shall not be entitled to severance payments upon any termination provided in Section 4 herein.5. EMPLOYEE’S REPRESENTATION. The Executive represents and warrants to the Company that: (a) he is subject to no contractual, fiduciary or otherobligation which may affect the performance of his duties under this Agreement; (b) he has terminated, in accordance with their terms, any contractual obligationwhich may affect his performance under this Agreement; and (c) his employment with the Company will not require him to use or disclose proprietary or confidentialinformation of any other person or entity.26. CONFIDENTIAL INFORMATION Except as permitted or directed by the Board of Directors of the Company in writing, during the time the Executive isemployed by the Company or at any time thereafter, the Executive shall not use for his personal purposes nor divulge, furnish, or make accessible to anyone or usein any way (other than in the ordinary course of the business of the Company) any confidential or secret information or knowledge of the Company, whetherdeveloped by himself or by others. Such confidential and/or secret information encompassed by this Section 6 includes, but is not limited to, the Company’scustomer and supplier lists, business plans, software, systems, and financial, marketing, and personnel information. The Executive agrees to refrain from any acts oromissions that would reduce the value of any confidential or secret knowledge or information to the Company, both during his employment hereunder and at anytime after the termination of his employment. The Executive’s obligations of confidentiality under this Section 6 shall not apply to any knowledge or information thatis now published publicly or that subsequently becomes generally publicly known, other than as a direct or indirect result of a breach of this Agreement by theExecutive.7. NONCOMPETITION: NONSOLICITATION; INVENTIONS.7.1 NonCompetition. During the employment of the Executive under this Agreement and for a period of six (6) months after termination of suchemployment, the Executive shall not at any time compete on his own behalf, or on behalf of any other person or entity, with the Company or any of its affiliateswithin all territories in which the Company does business with respect to the business of the Company or any of its affiliates as such business shall be conductedon the date hereof or during the employment of the Executive under this Agreement. The ownership by the Executive of not more than 5% of a corporation,partnership or other enterprise shall not constitute a violation hereof.7.2 NonSolicitation. During the employment of the Executive under this Agreement and thereafter Executive shall not at any time (i) solicit or induce, onhis own behalf or on behalf of any other person or entity, any employee of the Company or any of its affiliates to leave the employ of the Company or any of itsaffiliates; or (ii) solicit or induce, on his own behalf or on behalf of any other person or entity, any customer or Prospective Customer of the Company or any of theirrespective affiliates to reduce its business with the Company or any of its affiliates. For the purposes of this Agreement, “Prospective Customer” shall mean anyindividual, corporation, trust or other business entity which has either (a) entered into a nondisclosure agreement with the Company or any Company subsidiary oraffiliate or (b) has within the preceding 12 months received a currently pending and not rejected written proposal in reasonable detail from the Company or any ofthe Company’s subsidiary or affiliate.7.3 Inventions and Patents. The Company shall be entitled to the sole benefit and exclusive ownership of any inventions or improvements in products,processes, or other things that may be made or discovered by Executive while he is in the service of the Company, and all patents for the same. During the Term,Executive shall do all acts necessary or required by the Company to give effect to this section and, following the Term, Executive shall do all acts reasonablynecessary or required by the Company to give effect to this section. In all cases, the Company shall pay all costs and fees associated with such acts by Executive.7.4 Return of Property. The Executive agrees that all property in the Executive’s possession that he obtains or is assigned in the course of his employmentwith the Company, including, without limitation, all documents, reports, manuals, memoranda, customer lists, credit cards, keys, access cards, and all other propertyrelating in any way to the business of the Company, is the exclusive property of the Company, even if the Executive authored, created, or assisted in authoring orcreating such property. The Executive shall return to the Company all such property immediately upon termination of employment or at such earlier time as theCompany may request.7.5Court Ordered Revisions.If any portion of this Section 7 is found by a court of competent jurisdiction to be invalid or unenforceable, but would be validand enforceable if modified, this Section 7 shall apply with such modifications necessary to make this Section 7 valid and enforceable. Any portion of this Section 7not required to be so modified shall remain in full force and effect and not be affected thereby.7.6 Specific Performance. The Executive acknowledges that the remedy at law for any breach of any of the provisions of Section 7 will be inadequate, andthat the Company shall be entitled, in addition to any remedy at law or in equity, to preliminary and permanent injunctive relief and specific performance.38. MISCELLANEOUS.8.1 Indemnification. The Company and each of its subsidiaries shall, to the maximum extent provided under applicable law, indemnify and hold Executiveharmless from and against any expenses, including reasonable attorney’s fees, judgments, fines, settlements and other legally permissible amounts (“Losses”),incurred in connection with any proceeding arising out of, or related to, Executive’s employment by the Company, other than any such Losses incurred as a result ofExecutive’s negligence or willful misconduct. The Company shall, or shall cause a subsidiary thereof to, advance to Executive any expenses, including attorney’sfees and costs of settlement, incurred in defending any such proceeding to the maximum extent permitted by applicable law. Such costs and expenses incurred byExecutive in defense of any such proceeding shall be paid by the Company or applicable subsidiary in advance of the final disposition of such proceeding promptlyupon receipt by the Company of (a) written request for payment; (b) appropriate documentation evidencing the incurrence, amount and nature of the costs andexpenses for which payment is being sought; and (c) an undertaking adequate under applicable law made by or on behalf of Executive to repay the amounts soadvanced if it shall ultimately be determined pursuant to any nonappealable judgment or settlement that Executive is not entitled to be indemnified by the Companyor any subsidiary thereof. The Company will provide Executive with coverage under all directors and officers liability insurance policies that it has in effect duringthe Term, with no deductible to Executive. 8.2 Applicable Law. Except as may be otherwise provided herein, this Agreement shall be governed by and construed in accordance with the laws ofChina, applied without reference to principles of conflict of laws. Any dispute arising from or in connection with this Agreement shall be submitted to ShanghaiInternational Arbitration Center (the “Center”) for arbitration under the then effective rules of the Center. The arbitration award shall be the sole, binding, exclusiveand final remedy for resolving any dispute between the parties.8.3 Amendments. This Agreement may not be amended or modified otherwise than by a written agreement executed by the parties hereto or their respectivesuccessors or legal representatives.8.4 Notices. All notices and other communications hereunder shall be in writing and shall be given by handdelivery to the other party, by an internationalmail courier, or by registered or certified mail, return receipt requested, postage prepaid, addressed as follows:If to the Executive:Jie Yu________________________________________If to the Company:______________________________________Or to such other address as either party shall have furnished to the other in writing in accordance herewith. Notices and communications shall be effective whendelivered to the addressee.8.5 Withholding. The Company may withhold from any amounts payable under the Agreement, such federal, state and local income, unemployment, socialsecurity and similar employment related taxes and similar employment related withholdings as shall be required to be withheld pursuant to any applicable law orregulation.8.6 Severability. The invalidity or unenforceability of any provision of this Agreement shall not affect the validity or enforceability of any other provision ofthis Agreement and any such provision which is not valid or enforceable in whole shall be enforced to the maximum extent permitted by law.48.7 Captions. The captions of this Agreement are not part of the provisions and shall have no force or effect.8.8 Entire Agreement. This Agreement contains the entire agreement among the parties concerning the subject matter hereof and supersedes all prioragreements, understandings, discussions, negotiations and undertakings, whether written or oral, between the parties with respect thereto.8.9 Survival. The respective rights and obligations of the parties hereunder shall survive any termination of this Agreement or the Executive’s employmenthereunder to the extent necessary to the intended preservation of such rights and obligations.8.10 Waiver. Either Party's failure to enforce any provision or provisions of this Agreement shall not in any way be construed as a waiver of any suchprovision or provisions, or prevent that party thereafter from enforcing each and every other provision of this Agreement.8.11 Successors. This Agreement is personal to Executive and, without the prior express written consent of the Company, shall not be assignable byExecutive. This Agreement shall inure to the benefit of and be enforceable by Executive’s estate, heirs, beneficiaries, and/or legal representatives. This Agreementshall inure to the benefit of and be binding upon the Company and its successors and assigns.8.12 Joint Efforts/Counterparts. Preparation of this Agreement shall be deemed to be the joint effort of the parties hereto and shall not be construed moreseverely against any party. This Agreement may be signed in two or more counterparts, each of which shall be deemed an original and all of which together shallconstitute one and the same instrument.8.13 Representation by Counsel. Each Party hereby represents that it has had the opportunity to be represented by legal counsel of its choice inconnection with the negotiation and execution of this Agreement.IN WITNESS WHEREOF, the parties have executed this Agreement as of the day and year first above written.EXECUTIVE:LUOKUNG TECHNOLOGY CORP./s/ Jie Yu/s/ Xuesong SongJie YuXuesong SongChief Executive Officer5EX12.1 13 f20f2017ex121_luokung.htm CERTIFICATIONExhibit 12.1Certification by the Chief Executive OfficerPursuant to Section 302 of the SarbanesOxley Act of 2002I, Xuesong Song, the Chief Executive Officer of Luokung Technology Corp. (the “Company”), certify that:1.I have reviewed this transition report on Form 20F of the Company;2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statementsmade, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financialcondition, results of operations and cash flows of the Company as of, and for, the periods presented in this report;4.The Company’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange ActRules 13a15(e) and 15d15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a15(f) and 15d15(f)) for the Company andhave:(a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure thatmaterial information relating to the Company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during theperiod in which this report is being prepared;(b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, toprovide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance withgenerally accepted accounting principles;(c)Evaluated the effectiveness of the Company’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of thedisclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and(d)Disclosed in this report any change in the Company’s internal control over financial reporting that occurred during the period covered by the transition reportthat has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting; and5.The Company’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Company’sauditors and the audit committee of the Company’s board of directors (or persons performing the equivalent functions):(a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely toadversely affect the Company’s ability to record, process, summarize and report financial information; and(b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the Company’s internal control over financialreporting.Date: October 12, 2018By:/s/ Xuesong SongXuesong SongChief Executive Officer(principal executive officer)EX12.2 14 f20f2017ex122_luokung.htm CERTIFICATIONExhibit 12.2Certification by the Chief Financial OfficerPursuant to Section 302 of the SarbanesOxley Act of 2002I, Jie Yu, the Chief Financial Officer of Luokung Technology Corp. (the “Company”), certify that:1.I have reviewed this transition report on Form 20F of the Company;2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statementsmade, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financialcondition, results of operations and cash flows of the Company as of, and for, the periods presented in this report;4.The Company’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange ActRules 13a15(e) and 15d15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a15(f) and 15d15(f)) for the Company andhave:(a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure thatmaterial information relating to the Company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during theperiod in which this report is being prepared;(b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, toprovide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance withgenerally accepted accounting principles;(c)Evaluated the effectiveness of the Company’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of thedisclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and(d)Disclosed in this report any change in the Company’s internal control over financial reporting that occurred during the period covered by the transition reportthat has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting; and5.The Company’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Company’sauditors and the audit committee of the Company’s board of directors (or persons performing the equivalent functions):(a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely toadversely affect the Company’s ability to record, process, summarize and report financial information; and(b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the Company’s internal control over financialreporting.Date: October 12, 2018By:/s/ Jie YuJie YuChief Financial Officer(principal financial officer and principal accounting officer)EX13.1 15 f20f2017ex131_luokung.htm CERTIFICATIONExhibit 13.1Certification by the Chief Executive OfficerPursuant to Section 906 of the SarbanesOxley Act of 2002In connection with the Transition report on Form 20F of Luokung Technology Corp. (the “Company”) for the year ended December 31, 2017 as filed withthe Securities and Exchange Commission on the date hereof (the “Report”), I, Xuesong Song, Chairman and Chief Executive Officer of the Company, certify,pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the SarbanesOxley Act of 2002, that to my knowledge:(1)The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and(2)The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.Date: October 12, 2018By:/s/ Xuesong SongXuesong SongChief Executive Officer(principal executive officer)EX13.2 16 f20f2017ex132_luokung.htm CERTIFICATIONExhibit 13.2Certification by the Chief Financial OfficerPursuant to Section 906 of the SarbanesOxley Act of 2002In connection with the Transition report on Form 20F of Luokung Technology Corp. (the “Company”) for the year ended December 31, 2017 as filed withthe Securities and Exchange Commission on the date hereof (the “Report”), I, Jie Yu, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. Section1350, as adopted pursuant to Section 906 of the SarbanesOxley Act of 2002, that to my knowledge:(1)The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and(2)The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.Date: October 12, 2018By:/s/ Jie YuJie YuChief Financial Officer(principal financial officer and principal accounting officer)地址：Address:.b)陈蔚力Chen Weili地址：Address:c)王平Wang Ping地址：Address:17秘密文件 Strictly Confidentiald)刘东来Liu Donglai地址：Address:丙方：北京中传视讯科技有限公司Party C: Beijing Mobile Vision Technology Co., Ltd.地址：北京市朝阳区光华路9号SOHO3QLAB32Address: LAB32, SOHO3Q, No 9, Guanghua Road, Chaoyang District, Beijing.收件人：宋雪松Attn.: Song Xuesong14.3任何一方可按本条规定随时给其他各方发出通知来改变其接收通知的地址。Any Party may at any time change its address for notices by a notice delivered to the other Parties in accordance with the terms hereof.15.分割性Severability如果本协议有任何一条或多条规定根据任何法律或法规在任何方面被裁定为无效、不合法或不可执行，本协议其余规定的有效性、合法性或可执行性不应因此在任何方面受到影响或损害。各方应通过诚意磋商，争取以法律许可以及各方期望的最大限度内有效的规定取代那些无效、不合法或不可执行的规定，而该等有效的规定所产生的经济效果应尽可能与那些无效、不合法或不能强制执行的规定所产生的经济效果相似。In the event that one or several of the provisions of this Contract are found to be invalid, illegal or unenforceable in any aspect in accordance with any laws orregulations, the validity, legality or enforceability of the remaining provisions of this Contract shall not be affected or compromised in any respect. The Partiesshall strive in good faith to replace such invalid, illegal or unenforceable provisions with effective provisions that accomplish to the greatest extent permittedby law and the intentions of the Parties, and the economic effect of such effective provisions shall be as close as possible to the economic effect of thoseinvalid, illegal or unenforceable provisions.18秘密文件 Strictly Confidential16.附件Attachments本协议所列附件，为本协议不可分割的组成部分。The attachments set forth herein shall be an integral part of this Agreement.17.生效Effectiveness17.1本协议的任何修改、补充或变更，均须采用书面形式，经各方签字或盖章并按规定办理政府登记（如需）后生效。Any amendments, changes and supplements to this Agreement shall be in writing and shall become effective upon completion of the governmentalfiling procedures (if applicable) after the affixation of the signatures or seals of the Parties.17.2本协议以中文和英文书就，一式六份，质权人、所有出质人和丙方各持一份，具有同等效力；中英文版本如有冲突，应以中文版为准。This Agreement is written in Chinese and English in six copies. Each Pledgors, Pledgee and Party C shall hold one copy respectively. Each copy of thisAgreement shall have equal validity. In case there is any conflict between the Chinese version and the English version, the Chinese version shall prevail.本页其余部分刻意留为空白The Remainder of this page is intentionally left blank19秘密文件 Strictly Confidential有鉴于此，各方已使得经其授权的代表于文首所述日期签署了本股权质押协议并即生效，以昭信守。IN WITNESS WHEREOF, the Parties have caused their authorized representatives to execute this Equity Interest Pledge Agreement as of the date first abovewritten.甲方：中传天下信息科技（深圳）有限公司（盖章）Party A: Zhongchuan Tianxia Information Technology (Shenzhen) Co., Ltd. (Seal)签字：By:/s/ Hong Ting姓名：洪婷Name: Hong Ting职务：总经理Title: General Manager秘密文件 Strictly Confidential有鉴于此，各方已使得经其授权的代表于文首所述日期签署了本股权质押协议并即生效，以昭信守。IN WITNESS WHEREOF, the Parties have caused their authorized representatives to execute this Equity Interest Pledge Agreement as of the date first abovewritten.乙方：Party B:宋雪松Song Xuesong签署：By:/s/ Song Xuesong秘密文件 Strictly Confidential有鉴于此，各方已使得经其授权的代表于文首所述日期签署了本股权质押协议并即生效，以昭信守。IN WITNESS WHEREOF, the Parties have caused their authorized representatives to execute this Equity Interest Pledge Agreement as of the date first abovewritten.乙方：Party B:陈蔚力Chen Weili签字：By:/s/ Chen Weili秘密文件 Strictly Confidential有鉴于此，各方已使得经其授权的代表于文首所述日期签署了本股权质押协议并即生效，以昭信守。IN WITNESS WHEREOF, the Parties have caused their authorized representatives to execute this Equity Interest Pledge Agreement as of the date first abovewritten.乙方：Party B:王平Wang Ping签字：By:/s/ Wang Ping秘密文件 Strictly Confidential有鉴于此，各方已使得经其授权的代表于文首所述日期签署了本股权质押协议并即生效，以昭信守。IN WITNESS WHEREOF, the Parties have caused their authorized representatives to execute this Equity Interest Pledge Agreement as of the date first abovewritten.乙方：Party B:刘东来Liu Donglai签字：By:/s/ Liu Donglai秘密文件 Strictly Confidential有鉴于此，各方已使得经其授权的代表于文首所述日期签署了本股权质押协议并即生效，以昭信守。IN WITNESS WHEREOF, the Parties have caused their authorized representatives to execute this Equity Interest Pledge Agreement as of the date first abovewritten.丙方：北京中传视讯科技有限公司（盖章）Party B: Beijing Mobile Vision Technology Co., Ltd. (Seal)签字：By:/s/ Song Xuesong姓名：宋雪松Name: Song Xuesong职务：董事长Title: Chairman of the Board秘密文件 Strictly Confidential附件：Attachments:1.北京中传视讯科技有限公司股东名册；Shareholders' Register of Beijing Mobile Vision Technology Co., Ltd.;2.北京中传视讯科技有限公司的出资证明书；The Capital Contribution Certificate of Beijing Mobile Vision Technology Co., Ltd.;3.独家业务合作协议。Exclusive Business Cooperation Agreement.秘密文件 Strictly ConfidentialEX4.20 6 f20f2017ex420_luokung.htm POWER OF ATTORNEY BY WEILI CHEN, DATED AUGUST 31, 2015Exhibit 4.20授权委托书Power of Attorney本人陈蔚力，持有中华人民共和国身份证（号码：*************** 516），通讯地址为广东省，系拥有北京中传视讯科技有限公司（“中传视讯”）14.0848%股权（“相关股权”）的股东，就相关股权，特此不可撤销地授权中传天下信息科技（深圳）有限公司（“深圳中传天下”）在本授权委托书的有效期内行使如下权利：The undersigned, Chen Weili, a person with the PRC identification card number of ***************516, with address at: Guangdong, and a holder of14.0848% of the entire registered capital ("Shares") in Beijing Mobile Vision Technology Co., Ltd. ("Mobile Vision"), hereby irrevocably authorize ZhongchuanTianxia Information Technology (Shenzhen) Co., Ltd. ("WFOE") to exercise the following rights relating to Shares during the term of this Power of Attorney:授权深圳中传天下作为本人唯一的排他的代理人就有关相关股权的事宜全权代表本人行使包括但不限于如下的权利：1）参加中传视讯的股东会；2）行使按照法律和中传视讯章程规定本人所享有的全部股东权利和股东表决权，包括但不限于出售或转让或质押或处置相关股权的全部或任何一部分；以及3）作为本人的授权代表指定和任命中传视讯的法定代表人、董事和/或执行董事、监事、经理以及其他高级管理人员等。但中传视讯利用该等授权做出违反中华人民共和国法律的决定无效。WFOE is hereby authorized to act on behalf of myself as my exclusive agent and attorney with respect to all matters concerning My Shareholding, includingwithout limitation: 1) attending shareholders' meetings of Mobile Vision; 2) exercising all the shareholder's rights and shareholder's voting rights I am entitled tounder the laws of China and Articles of Association of Mobile Vision, including but not limited to the sale or transfer or pledge or disposition of My Shareholding inpart or in whole; and 3) designating and appointing on behalf of myself the legal representative, director and/or executive director, supervisor, manager and othersenior management members of Mobile Vision. However, the decision made by Mobile Vision taking advantage of the power of attorney which is against the PRClaws shall be null and void.1深圳中传天下将有权在授权范围内代表本人签署独家购买权协议（本人应要求作为协议方）中约定的转让协议，如期履行本人作为协议一方的与本授权委托书同日签署的股权质押协议和独家购买权协议，该权利的行使将不对本授权形成任何限制。Without limiting the generality of the powers granted hereunder, WFOE shall have the power and authority under this Power of Attorney to execute theTransfer Contracts stipulated in Exclusive Option Agreement, to which I am required to be a party, on behalf of myself, and to effect the terms of the Share PledgeAgreement and Exclusive Option Agreement, both dated the date hereof, to which I am a party.深圳中传天下就相关股权的一切行为均视为本人的行为，签署的一切文件均视为本人签署，本人会予以承认。All the actions associated with Shares conducted by WFOE shall be deemed as my own actions, and all the documents related to Shares executed by WFOEshall be deemed to be executed by me. I hereby acknowledge and ratify those actions and/or documents by the WFOE.深圳中传天下有转委托权，可以就上述事项的办理自行再委托其他人或单位而不必事先通知本人或获得本人的同意。WFOE is entitled to reauthorize or assign its rights related to the aforesaid matters to any other person or entity at its own discretion and without giving priornotice to me or obtaining my consent.在本人为中传视讯的股东期间，本授权委托书不可撤销并持续有效，自授权委托书签署之日起算。This Power of Attorney is coupled with an interest and shall be irrevocable and continuously valid from the date of execution of this Power of Attorney, solong as I am a shareholder of Mobile Vision.本授权委托书期间，本人特此放弃已经通过本授权委托书授权给深圳中传天下的与相关股权有关的所有权利，不再自行行使该等权利。During the term of this Power of Attorney, I hereby waive all the rights associated with Shares, which have been authorized to WFOE through this Power ofAttorney, and shall not exercise such rights by myself.本授权委托书以中文和英文书就，中英文版本如有冲突，应以中文版为准。This Power of Attorney is written in Chinese and English; in case there is any conflict between the Chinese version and the English version, the Chineseversion shall prevail.陈蔚力Chen Weili签署：By:日期：年月日Date:2EX4.21 7 f20f2017ex421_luokung.htm POWER OF ATTORNEY BY PING WANG, DATED AUGUST 31, 2015Exhibit 4.21授权委托书Power of Attorney本人王平，持有中华人民共和国身份证（号码：***************01x），通讯地址为广东省，系拥有北京中传视讯科技有限公司（“中传视讯”）19.9872%股权（“相关股权”）的股东，就相关股权，特此不可撤销地授权中传天下信息科技（深圳）有限公司（“深圳中传天下”）在本授权委托书的有效期内行使如下权利：The undersigned, Wang Ping, a person with the PRC identification card number of ***************01x, with address at Guangdong, and a holder of19.9872% of the entire registered capital (“Shares”) in Beijing Mobile Vision Technology Co., Ltd. (“Mobile Vision”), hereby irrevocably authorize ZhongchuanTianxia Information Technology (Shenzhen) Co., Ltd. (“WFOE”) to exercise the following rights relating to Shares during the term of this Power of Attorney:授权深圳中传天下作为本人唯一的排他的代理人就有关相关股权的事宜全权代表本人行使包括但不限于如下的权利：1）参加中传视讯的股东会；2）行使按照法律和中传视讯章程规定本人所享有的全部股东权利和股东表决权，包括但不限于出售或转让或质押或处置相关股权的全部或任何一部分；以及3）作为本人的授权代表指定和任命中传视讯的法定代表人、董事和/或执行董事、监事、经理以及其他高级管理人员等。但中传视讯利用该等授权做出违反中华人民共和国法律的决定无效。WFOE is hereby authorized to act on behalf of myself as my exclusive agent and attorney with respect to all matters concerning My Shareholding, includingwithout limitation: 1) attending shareholders’ meetings of Mobile Vision; 2) exercising all the shareholder’s rights and shareholder’s voting rights I am entitled tounder the laws of China and Articles of Association of Mobile Vision, including but not limited to the sale or transfer or pledge or disposition of My Shareholding inpart or in whole; and 3) designating and appointing on behalf of myself the legal representative, director and/or executive director, supervisor, manager and othersenior management members of Mobile Vision. However, the decision made by Mobile Vision taking advantage of the power of attorney which is against the PRClaws shall be null and void.1深圳中传天下将有权在授权范围内代表本人签署独家购买权协议（本人应要求作为协议方）中约定的转让协议，如期履行本人作为协议一方的与本授权委托书同日签署的股权质押协议和独家购买权协议，该权利的行使将不对本授权形成任何限制。Without limiting the generality of the powers granted hereunder, WFOE shall have the power and authority under this Power of Attorney to execute theTransfer Contracts stipulated in Exclusive Option Agreement, to which I am required to be a party, on behalf of myself, and to effect the terms of the Share PledgeAgreement and Exclusive Option Agreement, both dated the date hereof, to which I am a party.深圳中传天下就相关股权的一切行为均视为本人的行为，签署的一切文件均视为本人签署，本人会予以承认。All the actions associated with Shares conducted by WFOE shall be deemed as my own actions, and all the documents related to Shares executed by WFOEshall be deemed to be executed by me. I hereby acknowledge and ratify those actions and/or documents by the WFOE.深圳中传天下有转委托权，可以就上述事项的办理自行再委托其他人或单位而不必事先通知本人或获得本人的同意。WFOE is entitled to reauthorize or assign its rights related to the aforesaid matters to any other person or entity at its own discretion and without giving priornotice to me or obtaining my consent.在本人为中传视讯的股东期间，本授权委托书不可撤销并持续有效，自授权委托书签署之日起算。This Power of Attorney is coupled with an interest and shall be irrevocable and continuously valid from the date of execution of this Power of Attorney, solong as I am a shareholder of Mobile Vision.本授权委托书期间，本人特此放弃已经通过本授权委托书授权给深圳中传天下的与相关股权有关的所有权利，不再自行行使该等权利。During the term of this Power of Attorney, I hereby waive all the rights associated with Shares, which have been authorized to WFOE through this Power ofAttorney, and shall not exercise such rights by myself.本授权委托书以中文和英文书就，中英文版本如有冲突，应以中文版为准。This Power of Attorney is written in Chinese and English; in case there is any conflict between the Chinese version and the English version, the Chineseversion shall prevail.王平Wang Ping签署：By:日期：年月日Date:2EX4.22 8 f20f2017ex422_luokung.htm POWER OF ATTORNEY BY DONGLAI LIU, DATED AUGUST 31, 2015Exhibit 4.22授权委托书Power of Attorney本人刘东来，持有中华人民共和国身份证（号码：***************912），通讯地址为: ，系拥有北京中传视讯科技有限公司（“中传视讯”）4.1035%股权（“相关股权”）的股东，就相关股权，特此不可撤销地授权中传天下信息科技（深圳）有限公司（“深圳中传天下”）在本授权委托书的有效期内行使如下权利：The undersigned, Liu Donglai, a person with the PRC identification card number of ***************912, with address at: , and a holder of 4.1035% of theentire registered capital (“Shares”) in Beijing Mobile Vision Technology Co., Ltd. (“Mobile Vision”), hereby irrevocably authorize Zhongchuan Tianxia InformationTechnology (Shenzhen) Co., Ltd. (“WFOE”) to exercise the following rights relating to Shares during the term of this Power of Attorney:授权深圳中传天下作为本人唯一的排他的代理人就有关相关股权的事宜全权代表本人行使包括但不限于如下的权利：1）参加中传视讯的股东会；2）行使按照法律和中传视讯章程规定本人所享有的全部股东权利和股东表决权，包括但不限于出售或转让或质押或处置相关股权的全部或任何一部分；以及3）作为本人的授权代表指定和任命中传视讯的法定代表人、董事和/或执行董事、监事、经理以及其他高级管理人员等。但中传视讯利用该等授权做出违反中华人民共和国法律的决定无效。WFOE is hereby authorized to act on behalf of myself as my exclusive agent and attorney with respect to all matters concerning My Shareholding, includingwithout limitation: 1) attending shareholders’ meetings of Mobile Vision; 2) exercising all the shareholder’s rights and shareholder’s voting rights I am entitled tounder the laws of China and Articles of Association of Mobile Vision, including but not limited to the sale or transfer or pledge or disposition of My Shareholding inpart or in whole; and 3) designating and appointing on behalf of myself the legal representative, director and/or executive director, supervisor, manager and othersenior management members of Mobile Vision. However, the decision made by Mobile Vision taking advantage of the power of attorney which is against the PRClaws shall be null and void.1深圳中传天下将有权在授权范围内代表本人签署独家购买权协议（本人应要求作为协议方）中约定的转让协议，如期履行本人作为协议一方的与本授权委托书同日签署的股权质押协议和独家购买权协议，该权利的行使将不对本授权形成任何限制。Without limiting the generality of the powers granted hereunder, WFOE shall have the power and authority under this Power of Attorney to execute theTransfer Contracts stipulated in Exclusive Option Agreement, to which I am required to be a party, on behalf of myself, and to effect the terms of the Share PledgeAgreement and Exclusive Option Agreement, both dated the date hereof, to which I am a party.深圳中传天下就相关股权的一切行为均视为本人的行为，签署的一切文件均视为本人签署，本人会予以承认。All the actions associated with Shares conducted by WFOE shall be deemed as my own actions, and all the documents related to Shares executed by WFOEshall be deemed to be executed by me. I hereby acknowledge and ratify those actions and/or documents by the WFOE.深圳中传天下有转委托权，可以就上述事项的办理自行再委托其他人或单位而不必事先通知本人或获得本人的同意。WFOE is entitled to reauthorize or assign its rights related to the aforesaid matters to any other person or entity at its own discretion and without giving priornotice to me or obtaining my consent.在本人为中传视讯的股东期间，本授权委托书不可撤销并持续有效，自授权委托书签署之日起算。This Power of Attorney is coupled with an interest and shall be irrevocable and continuously valid from the date of execution of this Power of Attorney, solong as I am a shareholder of Mobile Vision.本授权委托书期间，本人特此放弃已经通过本授权委托书授权给深圳中传天下的与相关股权有关的所有权利，不再自行行使该等权利。During the term of this Power of Attorney, I hereby waive all the rights associated with Shares, which have been authorized to WFOE through this Power ofAttorney, and shall not exercise such rights by myself.本授权委托书以中文和英文书就，中英文版本如有冲突，应以中文版为准。This Power of Attorney is written in Chinese and English; in case there is any conflict between the Chinese version and the English version, the Chineseversion shall prevail.刘东来Liu Donglai签署：By:日期：年月日Date:2EX4.23 9 f20f2017ex423_luokung.htm POWER OF ATTORNEY BY XUESONG SONG, DATED AUGUST 31, 2015Exhibit 4.23授权委托书Power of Attorney本人宋雪松，持有中华人民共和国身份证（号码：***************417），通讯地址为，系拥有北京中传视讯科技有限公司（“中传视讯”）61.8245%股权（“相关股权”）的股东，就相关股权，特此不可撤销地授权中传天下信息科技（深圳）有限公司（“深圳中传天下”）在本授权委托书的有效期内行使如下权利：The undersigned, Song Xuesong, a person with the PRC identification card number of ***************417, with address at , and a holder of 61.8245% ofthe entire registered capital (“Shares”) in Beijing Mobile Vision Technology Co., Ltd. (“Mobile Vision”), hereby irrevocably authorize Zhongchuan TianxiaInformation Technology (Shenzhen) Co., Ltd. (“WFOE”) to exercise the following rights relating to Shares during the term of this Power of Attorney:授权深圳中传天下作为本人唯一的排他的代理人就有关相关股权的事宜全权代表本人行使包括但不限于如下的权利：1）参加中传视讯的股东会；2）行使按照法律和中传视讯章程规定本人所享有的全部股东权利和股东表决权，包括但不限于出售或转让或质押或处置相关股权的全部或任何一部分；以及3）作为本人的授权代表指定和任命中传视讯的法定代表人、董事和/或执行董事、监事、经理以及其他高级管理人员等。但中传视讯利用该等授权做出违反中华人民共和国法律的决定无效。WFOE is hereby authorized to act on behalf of myself as my exclusive agent and attorney with respect to all matters concerning My Shareholding, includingwithout limitation: 1) attending shareholders’ meetings of Mobile Vision; 2) exercising all the shareholder’s rights and shareholder’s voting rights I am entitled tounder the laws of China and Articles of Association of Mobile Vision, including but not limited to the sale or transfer or pledge or disposition of My Shareholding inpart or in whole; and 3) designating and appointing on behalf of myself the legal representative, director and/or executive director, supervisor, manager and othersenior management members of Mobile Vision. However, the decision made by Mobile Vision taking advantage of the power of attorney which is against the PRClaws shall be null and void.1深圳中传天下将有权在授权范围内代表本人签署独家购买权协议（本人应要求作为协议方）中约定的转让协议，如期履行本人作为协议一方的与本授权委托书同日签署的股权质押协议和独家购买权协议，该权利的行使将不对本授权形成任何限制。Without limiting the generality of the powers granted hereunder, WFOE shall have the power and authority under this Power of Attorney to execute theTransfer Contracts stipulated in Exclusive Option Agreement, to which I am required to be a party, on behalf of myself, and to effect the terms of the Share PledgeAgreement and Exclusive Option Agreement, both dated the date hereof, to which I am a party.深圳中传天下就相关股权的一切行为均视为本人的行为，签署的一切文件均视为本人签署，本人会予以承认。All the actions associated with Shares conducted by WFOE shall be deemed as my own actions, and all the documents related to Shares executed by WFOEshall be deemed to be executed by me. I hereby acknowledge and ratify those actions and/or documents by the WFOE.深圳中传天下有转委托权，可以就上述事项的办理自行再委托其他人或单位而不必事先通知本人或获得本人的同意。WFOE is entitled to reauthorize or assign its rights related to the aforesaid matters to any other person or entity at its own discretion and without giving priornotice to me or obtaining my consent.在本人为中传视讯的股东期间，本授权委托书不可撤销并持续有效，自授权委托书签署之日起算。This Power of Attorney is coupled with an interest and shall be irrevocable and continuously valid from the date of execution of this Power of Attorney, solong as I am a shareholder of Mobile Vision.本授权委托书期间，本人特此放弃已经通过本授权委托书授权给深圳中传天下的与相关股权有关的所有权利，不再自行行使该等权利。During the term of this Power of Attorney, I hereby waive all the rights associated with Shares, which have been authorized to WFOE through this Power ofAttorney, and shall not exercise such rights by myself.本授权委托书以中文和英文书就，中英文版本如有冲突，应以中文版为准。This Power of Attorney is written in Chinese and English; in case there is any conflict between the Chinese version and the English version, the Chineseversion shall prevail.宋雪松Song Xuesong签署：By:日期：年月日Date:2EX8.1 10 f20f2017ex81_luokung.htm LIST OF SUBSIDIARIES AND CONSOLIDATED VARIABLE INTEREST ENTITIESExhibit 8.1List of Subsidiaries of the CompanyName of EntityJurisdiction of Incorporation/OrganizationLK Technology Ltd.British Virgin IslandsTopsky Infotech Holdings Pte Ltd.SingaporeSuperengine Holdings LimitedBritish Virgin IslandsMMB LimitedHong KongMobile Media (China Limited)Hong KongZhong Chuan Tian Xia Information and Technology (Beijing) LimitedBeijing, PRCZhong Chuan Xia Information and Technology (Shenzhen) LimitedShenzhen, PRCBeijing Zhong Chuan Shi Xun Technology Limited (VIE Entity)Beijing, PRCJiangsu Zhong Chuan Rui You Information and Technology Limited (VIE Entity)Jiangsu, PRCHuoerguosi Luokuang Information and Technology Limited (VIE Entity)Huoerguosi, PRCShenzhen Jiu Zhou Shi Dai Digital Technology LimitedShenzhen, PRCEX10.1 11 f20f2017ex101_luokung.htm EMPLOYMENT AGREEMENT, DATED AUGUST 19, 2018, BETWEEN LUOKUNG TECHNOLOGY CORP. AND XUESONGSONGExhibit 10.1EMPLOYMENT AGREEMENTThis EMPLOYMENT AGREEMENT (the “Agreement”) is made and entered into as of this 19 day of August, 2018 (the “Effective Date”), by and between LuokungTechnology Corp., a British Virgin Islands corporation (the “Company”) and Xuesong Song (the “Executive”), a Chinese citizen.WITNESSETH:WHEREAS, the parties desire to enter into this Agreement setting forth the terms and conditions of the employment relationship between the Executiveand the Company.NOW, THEREFORE, in consideration of the foregoing premises and the mutual covenants and agreements contained herein, the parties hereto agree asfollows:1. EMPLOYMENT.1.1 Agreement to Employ. The Company hereby agrees to employ Executive, and Executive hereby agrees to serve, subject to the provisions of thisAgreement, as an officer and employee of the Company.1.2 Duties and Schedule. Executive shall serve as the Company’s Chief Executive Officer (“CEO”). The responsibilities of the Executive shall be subject tothe bylaws of the Company and determined by the Board of Directors of the Company (the “Board”). The Executive shall report directly to the Board and shall havesuch responsibilities as designated by the Board of the Company to the extent that such responsibilities are not inconsistent with all applicable laws, regulationsand rules. Executive shall devote his best efforts and all of his business time to his position with the Company during the Term.2. TERM OF EMPLOYMENT. Unless Executive’s employment shall sooner terminate pursuant to Section 4, the Company shall employ Executive for a fouryear term commencing on the Effective Date (the “Term”), which Term shall be renewable upon mutual agreement of the Company and the Executive, as approved bythe Board.3. COMPENSATION.3.1 Salary. Executive’s salary during the Term shall be $Nil.3.2 Bonus. At the sole discretion of the Board, or any committee duly designated by the Board and authorized to act thereto, the Executive shall be eligiblefor an annual cash bonus.3.3 Vacation. Executive shall be entitled to 8 days of paid vacation per year. In the event that Executive remains employed by the Company for 3 years ormore, Executive shall be entitled to 12 days of paid vacation.3.4 Business Expenses. Executive shall be reimbursed by the Company for all ordinary and necessary expenses incurred by Executive; provided that theyare incurred and approved in writing in accordance with the Company’s expense policy.3.5 Benefits. During the Term, Executive shall be allowed to participate, on the same basis generally as other employees of the Company, in all generalemployee benefit plans and programs, including improvements or modifications of the same, which may exist as of the Effective Date or thereafter and which aremade available by the Company to all or substantially all of its employees. Such benefits, plans, and programs may include, without limitation, any health, and dentalinsurance or 401K programs, if and when instituted. Any benefit plan currently existing or instituted by the Company after the Effective Date may be altered, changeor discontinued by the Company at its sole discretion and at any time without obligation of any nature to Executive. Except as specifically provided herein, nothingin this Agreement is to be construed or interpreted to increase or alter in any way the rights, participation, coverage, or benefits under such benefit plans orprograms to other than those provided to other employees pursuant to the terms and conditions of such benefit plans and programs. 14. TERMINATION.4.1 Death. This Agreement shall terminate immediately upon the death of Executive, and Executive’s estate or Executive’s legal representative, as the casemay be, shall be entitled to Executive’s accrued and unpaid Salary as of the date of Executive’s death, plus all other compensation and benefits that were vestedthrough the date of Executive’s death.4.2 Disability. In the event of Executive’s Disability, this Agreement shall terminate and Executive shall be entitled to (a) accrued and unpaid Salary andvacation through the first date that a Disability is determined; and (b) all other compensation and benefits that were vested through the first date that a Disabilityhas been determined. “Disability” means the good faith determination of the Board that Executive has become so physically or mentally incapacitated or disabled asto be unable to satisfactorily perform his duties hereunder for a period of ninety (90) consecutive calendar days or for one hundred twenty (120) days in any threehundred sixty (360) day period, such determination based upon a certificate as to such physical or mental disability issued by a licensed physician and/orpsychiatrist (as the case may be) mutually agreed upon by Executive and the Company.4.3 Termination by Company for Cause. The Company may terminate the Executive for Cause and such termination shall take effect upon the receipt byExecutive of the Notice of Termination. Upon the effective date of the termination for Cause, Executive shall be solely entitled to accrued and unpaid Salary throughsuch effective date. “Cause” means: (i) engaging in any act, omission or misconduct that is injurious to the Company or an affiliate; (ii) gross negligence or willfulmisconduct in connection with the performance of duties; (iii) conviction of a criminal offense (other than minor traffic offenses); (iv) fraud, embezzlement ormisappropriation of funds or property of the Company or an affiliate; (v) material breach of any term of any employment or other services, confidentiality, intellectualproperty or noncompetition agreements, if any, between the Executive and the Company or an affiliate; (vi) the entry of an order duly issued by any regulatoryagency (including federal, state and local regulatory agencies and selfregulatory bodies) having jurisdiction over the Company or an affiliate requiring the removalof the Executive from any office held with the Company or prohibiting the Executive from participating in the business or affairs of the Company or any affiliate; or(vii) the revocation or threatened revocation of any of the Company’s or an affiliate’s government licenses, permits or approvals, which is primarily due to theExecutive’s action or inaction and such revocation or threatened revocation would be alleviated or mitigated in any material respect by the termination of theExecutive’s employment or services with the Company or an affiliate. 4.4 Voluntary Termination by Executive. The Executive may voluntarily terminate his employment for any reason and such termination shall take effect 30days after the receipt by Company of the Notice of Termination. Upon the effective date of such termination, Executive shall be entitled to (a) accrued and unpaidSalary and vacation through such termination date; and (b) all other compensation and benefits that were vested through such termination date. In the eventExecutive is terminated without notice, it shall be deemed a termination by the Company for Cause.4.5 Notice of Termination. Any termination of the employment by the Company or the Executive shall be communicated by a notice in accordance withSection 8.4 of this Agreement (the “Notice of Termination”). Such notice shall (a) indicate the specific termination provision in this Agreement relied upon and (b) ifthe termination is for Cause, the date on which the Executive’s employment is to be terminated.4.6 Severance. The Executive shall not be entitled to severance payments upon any termination provided in Section 4 herein.5. EMPLOYEE’S REPRESENTATION. The Executive represents and warrants to the Company that: (a) he is subject to no contractual, fiduciary or otherobligation which may affect the performance of his duties under this Agreement; (b) he has terminated, in accordance with their terms, any contractual obligationwhich may affect his performance under this Agreement; and (c) his employment with the Company will not require him to use or disclose proprietary or confidentialinformation of any other person or entity.26. CONFIDENTIAL INFORMATION Except as permitted or directed by the Board of Directors of the Company in writing, during the time the Executive isemployed by the Company or at any time thereafter, the Executive shall not use for his personal purposes nor divulge, furnish, or make accessible to anyone or usein any way (other than in the ordinary course of the business of the Company) any confidential or secret information or knowledge of the Company, whetherdeveloped by himself or by others. Such confidential and/or secret information encompassed by this Section 6 includes, but is not limited to, the Company’scustomer and supplier lists, business plans, software, systems, and financial, marketing, and personnel information. The Executive agrees to refrain from any acts oromissions that would reduce the value of any confidential or secret knowledge or information to the Company, both during his employment hereunder and at anytime after the termination of his employment. The Executive’s obligations of confidentiality under this Section 6 shall not apply to any knowledge or information thatis now published publicly or that subsequently becomes generally publicly known, other than as a direct or indirect result of a breach of this Agreement by theExecutive.7. NONCOMPETITION: NONSOLICITATION; INVENTIONS.7.1 NonCompetition. During the employment of the Executive under this Agreement and for a period of six (6) months after termination of suchemployment, the Executive shall not at any time compete on his own behalf, or on behalf of any other person or entity, with the Company or any of its affiliateswithin all territories in which the Company does business with respect to the business of the Company or any of its affiliates as such business shall be conductedon the date hereof or during the employment of the Executive under this Agreement. The ownership by the Executive of not more than 5% of a corporation,partnership or other enterprise shall not constitute a violation hereof.7.2 NonSolicitation. During the employment of the Executive under this Agreement and thereafter Executive shall not at any time (i) solicit or induce, onhis own behalf or on behalf of any other person or entity, any employee of the Company or any of its affiliates to leave the employ of the Company or any of itsaffiliates; or (ii) solicit or induce, on his own behalf or on behalf of any other person or entity, any customer or Prospective Customer of the Company or any of theirrespective affiliates to reduce its business with the Company or any of its affiliates. For the purposes of this Agreement, “Prospective Customer” shall mean anyindividual, corporation, trust or other business entity which has either (a) entered into a nondisclosure agreement with the Company or any Company subsidiary oraffiliate or (b) has within the preceding 12 months received a currently pending and not rejected written proposal in reasonable detail from the Company or any ofthe Company’s subsidiary or affiliate.7.3 Inventions and Patents. The Company shall be entitled to the sole benefit and exclusive ownership of any inventions or improvements in products,processes, or other things that may be made or discovered by Executive while he is in the service of the Company, and all patents for the same. During the Term,Executive shall do all acts necessary or required by the Company to give effect to this section and, following the Term, Executive shall do all acts reasonablynecessary or required by the Company to give effect to this section. In all cases, the Company shall pay all costs and fees associated with such acts by Executive.7.4 Return of Property. The Executive agrees that all property in the Executive’s possession that he obtains or is assigned in the course of his employmentwith the Company, including, without limitation, all documents, reports, manuals, memoranda, customer lists, credit cards, keys, access cards, and all other propertyrelating in any way to the business of the Company, is the exclusive property of the Company, even if the Executive authored, created, or assisted in authoring orcreating such property. The Executive shall return to the Company all such property immediately upon termination of employment or at such earlier time as theCompany may request.7.5Court Ordered Revisions.If any portion of this Section 7 is found by a court of competent jurisdiction to be invalid or unenforceable, but would be validand enforceable if modified, this Section 7 shall apply with such modifications necessary to make this Section 7 valid and enforceable. Any portion of this Section 7not required to be so modified shall remain in full force and effect and not be affected thereby.7.6 Specific Performance. The Executive acknowledges that the remedy at law for any breach of any of the provisions of Section 7 will be inadequate, andthat the Company shall be entitled, in addition to any remedy at law or in equity, to preliminary and permanent injunctive relief and specific performance.38. MISCELLANEOUS.8.1 Indemnification. The Company and each of its subsidiaries shall, to the maximum extent provided under applicable law, indemnify and hold Executiveharmless from and against any expenses, including reasonable attorney’s fees, judgments, fines, settlements and other legally permissible amounts (“Losses”),incurred in connection with any proceeding arising out of, or related to, Executive’s employment by the Company, other than any such Losses incurred as a result ofExecutive’s negligence or willful misconduct. The Company shall, or shall cause a subsidiary thereof to, advance to Executive any expenses, including attorney’sfees and costs of settlement, incurred in defending any such proceeding to the maximum extent permitted by applicable law. Such costs and expenses incurred byExecutive in defense of any such proceeding shall be paid by the Company or applicable subsidiary in advance of the final disposition of such proceeding promptlyupon receipt by the Company of (a) written request for payment; (b) appropriate documentation evidencing the incurrence, amount and nature of the costs andexpenses for which payment is being sought; and (c) an undertaking adequate under applicable law made by or on behalf of Executive to repay the amounts soadvanced if it shall ultimately be determined pursuant to any nonappealable judgment or settlement that Executive is not entitled to be indemnified by the Companyor any subsidiary thereof. The Company will provide Executive with coverage under all directors and officers liability insurance policies that it has in effect duringthe Term, with no deductible to Executive. 8.2 Applicable Law. Except as may be otherwise provided herein, this Agreement shall be governed by and construed in accordance with the laws ofChina, applied without reference to principles of conflict of laws. Any dispute arising from or in connection with this Agreement shall be submitted to ShanghaiInternational Arbitration Center (the “Center”) for arbitration under the then effective rules of the Center. The arbitration award shall be the sole, binding, exclusiveand final remedy for resolving any dispute between the parties.8.3 Amendments. This Agreement may not be amended or modified otherwise than by a written agreement executed by the parties hereto or their respectivesuccessors or legal representatives.8.4 Notices. All notices and other communications hereunder shall be in writing and shall be given by handdelivery to the other party, by an internationalmail courier, or by registered or certified mail, return receipt requested, postage prepaid, addressed as follows:If to the Executive:Xuesong Song________________________________________________If to the Company:______________________________________Or to such other address as either party shall have furnished to the other in writing in accordance herewith. Notices and communications shall be effective whendelivered to the addressee.8.5 Withholding. The Company may withhold from any amounts payable under the Agreement, such federal, state and local income, unemployment, socialsecurity and similar employment related taxes and similar employment related withholdings as shall be required to be withheld pursuant to any applicable law orregulation.8.6 Severability. The invalidity or unenforceability of any provision of this Agreement shall not affect the validity or enforceability of any other provision ofthis Agreement and any such provision which is not valid or enforceable in whole shall be enforced to the maximum extent permitted by law.8.7 Captions. The captions of this Agreement are not part of the provisions and shall have no force or effect.48.8 Entire Agreement. This Agreement contains the entire agreement among the parties concerning the subject matter hereof and supersedes all prioragreements, understandings, discussions, negotiations and undertakings, whether written or oral, between the parties with respect thereto.8.9 Survival. The respective rights and obligations of the parties hereunder shall survive any termination of this Agreement or the Executive’s employmenthereunder to the extent necessary to the intended preservation of such rights and obligations.8.10 Waiver. Either Party's failure to enforce any provision or provisions of this Agreement shall not in any way be construed as a waiver of any suchprovision or provisions, or prevent that party thereafter from enforcing each and every other provision of this Agreement.8.11 Successors. This Agreement is personal to Executive and, without the prior express written consent of the Company, shall not be assignable byExecutive. This Agreement shall inure to the benefit of and be enforceable by Executive’s estate, heirs, beneficiaries, and/or legal representatives. This Agreementshall inure to the benefit of and be binding upon the Company and its successors and assigns.8.12 Joint Efforts/Counterparts. Preparation of this Agreement shall be deemed to be the joint effort of the parties hereto and shall not be construed moreseverely against any party. This Agreement may be signed in two or more counterparts, each of which shall be deemed an original and all of which together shallconstitute one and the same instrument.8.13 Representation by Counsel. Each Party hereby represents that it has had the opportunity to be represented by legal counsel of its choice inconnection with the negotiation and execution of this Agreement.IN WITNESS WHEREOF, the parties have executed this Agreement as of the day and year first above written.EXECUTIVE:LUOKUNG TECHNOLOGY CORP./s/ Xuesong Song/s/ Jie YuXuesong SongJie YuChief Financial Officer5EX10.2 12 f20f2017ex102_luokung.htm EMPLOYMENT AGREEMENT, DATED AUGUST 19, 2018, BY AND BETWEEN LUOKUNG TECHNOLOGY CORP. AND JIEYUExhibit 10.2EMPLOYMENT AGREEMENTThis EMPLOYMENT AGREEMENT (the “Agreement”) is made and entered into as of this 19 day of August, 2018 (the “Effective Date”), by and between LuokungTechnology Corp., a British Virgin Islands corporation (the “Company”) and Jie (Jay) Yu (the “Executive”), a Chinese citizen.WITNESSETH:WHEREAS, the parties desire to enter into this Agreement setting forth the terms and conditions of the employment relationship between the Executiveand the Company.NOW, THEREFORE, in consideration of the foregoing premises and the mutual covenants and agreements contained herein, the parties hereto agree asfollows:1. EMPLOYMENT.1.1 Agreement to Employ. The Company hereby agrees to employ Executive, and Executive hereby agrees to serve, subject to the provisions of thisAgreement, as an officer and employee of the Company.1.2 Duties and Schedule. Executive shall serve as the Company’s Chief Financial Officer, and be the Principal Financial Officer and Principal AccountingOfficer of the Company and responsible for all financial matters and management of the Company. The Executive shall report directly to the Company’s ChiefExecutive Officer and Board of Directors (the “Board”) and shall have such responsibilities as designated by the Chief Executive Officer or Board to the extent thatsuch responsibilities are not inconsistent with all applicable laws, regulations and rules. Executive shall devote his best efforts and all of his business time to hisposition with the Company during the Term.2. TERM OF EMPLOYMENT. Unless Executive’s employment shall sooner terminate pursuant to Section 4, the Company shall employ Executive for a fouryear term commencing on the Effective Date (the “Term”), which Term shall be renewable upon mutual agreement of the Company and the Executive, as approved bythe Board.3. COMPENSATION.3.1 Salary. Executive’s salary during the Term shall be RMB700,000 per year (the “Salary”), payable monthly.3.2 Bonus. At the sole discretion of the Board, or any committee duly designated by the Board and authorized to act thereto, the Executive shall be eligiblefor an annual cash bonus.3.3 Vacation. Executive shall be entitled to 8 days of paid vacation per year. In the event that Executive remains employed by the Company for 3 years ormore, Executive shall be entitled to 12 days of paid vacation.3.4 Business Expenses. Executive shall be reimbursed by the Company for all ordinary and necessary expenses incurred by Executive; provided that theyare incurred and approved in writing in accordance with the Company’s expense policy.3.5 Benefits. During the Term, Executive shall be allowed to participate, on the same basis generally as other employees of the Company, in all generalemployee benefit plans and programs, including improvements or modifications of the same, which may exist as of the Effective Date or thereafter and which aremade available by the Company to all or substantially all of its employees. Such benefits, plans, and programs may include, without limitation, any health, and dentalinsurance or 401K programs, if and when instituted. Any benefit plan currently existing or instituted by the Company after the Effective Date may be altered, changeor discontinued by the Company at its sole discretion and at any time without obligation of any nature to Executive. Except as specifically provided herein, nothingin this Agreement is to be construed or interpreted to increase or alter in any way the rights, participation, coverage, or benefits under such benefit plans orprograms to other than those provided to other employees pursuant to the terms and conditions of such benefit plans and programs. 14. TERMINATION.4.1 Death. This Agreement shall terminate immediately upon the death of Executive, and Executive’s estate or Executive’s legal representative, as the casemay be, shall be entitled to Executive’s accrued and unpaid Salary as of the date of Executive’s death, plus all other compensation and benefits that were vestedthrough the date of Executive’s death.4.2 Disability. In the event of Executive’s Disability, this Agreement shall terminate and Executive shall be entitled to (a) accrued and unpaid Salary andvacation through the first date that a Disability is determined; and (b) all other compensation and benefits that were vested through the first date that a Disabilityhas been determined. “Disability” means the good faith determination of the Board that Executive has become so physically or mentally incapacitated or disabled asto be unable to satisfactorily perform his duties hereunder for a period of ninety (90) consecutive calendar days or for one hundred twenty (120) days in any threehundred sixty (360) day period, such determination based upon a certificate as to such physical or mental disability issued by a licensed physician and/orpsychiatrist (as the case may be) mutually agreed upon by Executive and the Company.4.3 Termination by Company for Cause. The Company may terminate the Executive for Cause and such termination shall take effect upon the receipt byExecutive of the Notice of Termination. Upon the effective date of the termination for Cause, Executive shall be solely entitled to accrued and unpaid Salary throughsuch effective date. “Cause” means: (i) engaging in any act, omission or misconduct that is injurious to the Company or an affiliate; (ii) gross negligence or willfulmisconduct in connection with the performance of duties; (iii) conviction of a criminal offense (other than minor traffic offenses); (iv) fraud, embezzlement ormisappropriation of funds or property of the Company or an affiliate; (v) material breach of any term of any employment or other services, confidentiality, intellectualproperty or noncompetition agreements, if any, between the Executive and the Company or an affiliate; (vi) the entry of an order duly issued by any regulatoryagency (including federal, state and local regulatory agencies and selfregulatory bodies) having jurisdiction over the Company or an affiliate requiring the removalof the Executive from any office held with the Company or prohibiting the Executive from participating in the business or affairs of the Company or any affiliate; or(vii) the revocation or threatened revocation of any of the Company’s or an affiliate’s government licenses, permits or approvals, which is primarily due to theExecutive’s action or inaction and such revocation or threatened revocation would be alleviated or mitigated in any material respect by the termination of theExecutive’s employment or services with the Company or an affiliate. 4.4 Voluntary Termination by Executive. The Executive may voluntarily terminate his employment for any reason and such termination shall take effect 30days after the receipt by Company of the Notice of Termination. Upon the effective date of such termination, Executive shall be entitled to (a) accrued and unpaidSalary and vacation through such termination date; and (b) all other compensation and benefits that were vested through such termination date. In the eventExecutive is terminated without notice, it shall be deemed a termination by the Company for Cause.4.5 Notice of Termination. Any termination of the employment by the Company or the Executive shall be communicated by a notice in accordance withSection 8.4 of this Agreement (the “Notice of Termination”). Such notice shall (a) indicate the specific termination provision in this Agreement relied upon and (b) ifthe termination is for Cause, the date on which the Executive’s employment is to be terminated.4.6 Severance. The Executive shall not be entitled to severance payments upon any termination provided in Section 4 herein.5. EMPLOYEE’S REPRESENTATION. The Executive represents and warrants to the Company that: (a) he is subject to no contractual, fiduciary or otherobligation which may affect the performance of his duties under this Agreement; (b) he has terminated, in accordance with their terms, any contractual obligationwhich may affect his performance under this Agreement; and (c) his employment with the Company will not require him to use or disclose proprietary or confidentialinformation of any other person or entity.26. CONFIDENTIAL INFORMATION Except as permitted or directed by the Board of Directors of the Company in writing, during the time the Executive isemployed by the Company or at any time thereafter, the Executive shall not use for his personal purposes nor divulge, furnish, or make accessible to anyone or usein any way (other than in the ordinary course of the business of the Company) any confidential or secret information or knowledge of the Company, whetherdeveloped by himself or by others. Such confidential and/or secret information encompassed by this Section 6 includes, but is not limited to, the Company’scustomer and supplier lists, business plans, software, systems, and financial, marketing, and personnel information. The Executive agrees to refrain from any acts oromissions that would reduce the value of any confidential or secret knowledge or information to the Company, both during his employment hereunder and at anytime after the termination of his employment. The Executive’s obligations of confidentiality under this Section 6 shall not apply to any knowledge or information thatis now published publicly or that subsequently becomes generally publicly known, other than as a direct or indirect result of a breach of this Agreement by theExecutive.7. NONCOMPETITION: NONSOLICITATION; INVENTIONS.7.1 NonCompetition. During the employment of the Executive under this Agreement and for a period of six (6) months after termination of suchemployment, the Executive shall not at any time compete on his own behalf, or on behalf of any other person or entity, with the Company or any of its affiliateswithin all territories in which the Company does business with respect to the business of the Company or any of its affiliates as such business shall be conductedon the date hereof or during the employment of the Executive under this Agreement. The ownership by the Executive of not more than 5% of a corporation,partnership or other enterprise shall not constitute a violation hereof.7.2 NonSolicitation. During the employment of the Executive under this Agreement and thereafter Executive shall not at any time (i) solicit or induce, onhis own behalf or on behalf of any other person or entity, any employee of the Company or any of its affiliates to leave the employ of the Company or any of itsaffiliates; or (ii) solicit or induce, on his own behalf or on behalf of any other person or entity, any customer or Prospective Customer of the Company or any of theirrespective affiliates to reduce its business with the Company or any of its affiliates. For the purposes of this Agreement, “Prospective Customer” shall mean anyindividual, corporation, trust or other business entity which has either (a) entered into a nondisclosure agreement with the Company or any Company subsidiary oraffiliate or (b) has within the preceding 12 months received a currently pending and not rejected written proposal in reasonable detail from the Company or any ofthe Company’s subsidiary or affiliate.7.3 Inventions and Patents. The Company shall be entitled to the sole benefit and exclusive ownership of any inventions or improvements in products,processes, or other things that may be made or discovered by Executive while he is in the service of the Company, and all patents for the same. During the Term,Executive shall do all acts necessary or required by the Company to give effect to this section and, following the Term, Executive shall do all acts reasonablynecessary or required by the Company to give effect to this section. In all cases, the Company shall pay all costs and fees associated with such acts by Executive.7.4 Return of Property. The Executive agrees that all property in the Executive’s possession that he obtains or is assigned in the course of his employmentwith the Company, including, without limitation, all documents, reports, manuals, memoranda, customer lists, credit cards, keys, access cards, and all other propertyrelating in any way to the business of the Company, is the exclusive property of the Company, even if the Executive authored, created, or assisted in authoring orcreating such property. The Executive shall return to the Company all such property immediately upon termination of employment or at such earlier time as theCompany may request.7.5Court Ordered Revisions.If any portion of this Section 7 is found by a court of competent jurisdiction to be invalid or unenforceable, but would be validand enforceable if modified, this Section 7 shall apply with such modifications necessary to make this Section 7 valid and enforceable. Any portion of this Section 7not required to be so modified shall remain in full force and effect and not be affected thereby.7.6 Specific Performance. The Executive acknowledges that the remedy at law for any breach of any of the provisions of Section 7 will be inadequate, andthat the Company shall be entitled, in addition to any remedy at law or in equity, to preliminary and permanent injunctive relief and specific performance.38. MISCELLANEOUS.8.1 Indemnification. The Company and each of its subsidiaries shall, to the maximum extent provided under applicable law, indemnify and hold Executiveharmless from and against any expenses, including reasonable attorney’s fees, judgments, fines, settlements and other legally permissible amounts (“Losses”),incurred in connection with any proceeding arising out of, or related to, Executive’s employment by the Company, other than any such Losses incurred as a result ofExecutive’s negligence or willful misconduct. The Company shall, or shall cause a subsidiary thereof to, advance to Executive any expenses, including attorney’sfees and costs of settlement, incurred in defending any such proceeding to the maximum extent permitted by applicable law. Such costs and expenses incurred byExecutive in defense of any such proceeding shall be paid by the Company or applicable subsidiary in advance of the final disposition of such proceeding promptlyupon receipt by the Company of (a) written request for payment; (b) appropriate documentation evidencing the incurrence, amount and nature of the costs andexpenses for which payment is being sought; and (c) an undertaking adequate under applicable law made by or on behalf of Executive to repay the amounts soadvanced if it shall ultimately be determined pursuant to any nonappealable judgment or settlement that Executive is not entitled to be indemnified by the Companyor any subsidiary thereof. The Company will provide Executive with coverage under all directors and officers liability insurance policies that it has in effect duringthe Term, with no deductible to Executive. 8.2 Applicable Law. Except as may be otherwise provided herein, this Agreement shall be governed by and construed in accordance with the laws ofChina, applied without reference to principles of conflict of laws. Any dispute arising from or in connection with this Agreement shall be submitted to ShanghaiInternational Arbitration Center (the “Center”) for arbitration under the then effective rules of the Center. The arbitration award shall be the sole, binding, exclusiveand final remedy for resolving any dispute between the parties.8.3 Amendments. This Agreement may not be amended or modified otherwise than by a written agreement executed by the parties hereto or their respectivesuccessors or legal representatives.8.4 Notices. All notices and other communications hereunder shall be in writing and shall be given by handdelivery to the other party, by an internationalmail courier, or by registered or certified mail, return receipt requested, postage prepaid, addressed as follows:If to the Executive:Jie Yu________________________________________If to the Company:______________________________________Or to such other address as either party shall have furnished to the other in writing in accordance herewith. Notices and communications shall be effective whendelivered to the addressee.8.5 Withholding. The Company may withhold from any amounts payable under the Agreement, such federal, state and local income, unemployment, socialsecurity and similar employment related taxes and similar employment related withholdings as shall be required to be withheld pursuant to any applicable law orregulation.8.6 Severability. The invalidity or unenforceability of any provision of this Agreement shall not affect the validity or enforceability of any other provision ofthis Agreement and any such provision which is not valid or enforceable in whole shall be enforced to the maximum extent permitted by law.48.7 Captions. The captions of this Agreement are not part of the provisions and shall have no force or effect.8.8 Entire Agreement. This Agreement contains the entire agreement among the parties concerning the subject matter hereof and supersedes all prioragreements, understandings, discussions, negotiations and undertakings, whether written or oral, between the parties with respect thereto.8.9 Survival. The respective rights and obligations of the parties hereunder shall survive any termination of this Agreement or the Executive’s employmenthereunder to the extent necessary to the intended preservation of such rights and obligations.8.10 Waiver. Either Party's failure to enforce any provision or provisions of this Agreement shall not in any way be construed as a waiver of any suchprovision or provisions, or prevent that party thereafter from enforcing each and every other provision of this Agreement.8.11 Successors. This Agreement is personal to Executive and, without the prior express written consent of the Company, shall not be assignable byExecutive. This Agreement shall inure to the benefit of and be enforceable by Executive’s estate, heirs, beneficiaries, and/or legal representatives. This Agreementshall inure to the benefit of and be binding upon the Company and its successors and assigns.8.12 Joint Efforts/Counterparts. Preparation of this Agreement shall be deemed to be the joint effort of the parties hereto and shall not be construed moreseverely against any party. This Agreement may be signed in two or more counterparts, each of which shall be deemed an original and all of which together shallconstitute one and the same instrument.8.13 Representation by Counsel. Each Party hereby represents that it has had the opportunity to be represented by legal counsel of its choice inconnection with the negotiation and execution of this Agreement.IN WITNESS WHEREOF, the parties have executed this Agreement as of the day and year first above written.EXECUTIVE:LUOKUNG TECHNOLOGY CORP./s/ Jie Yu/s/ Xuesong SongJie YuXuesong SongChief Executive Officer5EX12.1 13 f20f2017ex121_luokung.htm CERTIFICATIONExhibit 12.1Certification by the Chief Executive OfficerPursuant to Section 302 of the SarbanesOxley Act of 2002I, Xuesong Song, the Chief Executive Officer of Luokung Technology Corp. (the “Company”), certify that:1.I have reviewed this transition report on Form 20F of the Company;2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statementsmade, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financialcondition, results of operations and cash flows of the Company as of, and for, the periods presented in this report;4.The Company’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange ActRules 13a15(e) and 15d15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a15(f) and 15d15(f)) for the Company andhave:(a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure thatmaterial information relating to the Company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during theperiod in which this report is being prepared;(b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, toprovide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance withgenerally accepted accounting principles;(c)Evaluated the effectiveness of the Company’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of thedisclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and(d)Disclosed in this report any change in the Company’s internal control over financial reporting that occurred during the period covered by the transition reportthat has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting; and5.The Company’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Company’sauditors and the audit committee of the Company’s board of directors (or persons performing the equivalent functions):(a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely toadversely affect the Company’s ability to record, process, summarize and report financial information; and(b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the Company’s internal control over financialreporting.Date: October 12, 2018By:/s/ Xuesong SongXuesong SongChief Executive Officer(principal executive officer)EX12.2 14 f20f2017ex122_luokung.htm CERTIFICATIONExhibit 12.2Certification by the Chief Financial OfficerPursuant to Section 302 of the SarbanesOxley Act of 2002I, Jie Yu, the Chief Financial Officer of Luokung Technology Corp. (the “Company”), certify that:1.I have reviewed this transition report on Form 20F of the Company;2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statementsmade, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financialcondition, results of operations and cash flows of the Company as of, and for, the periods presented in this report;4.The Company’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange ActRules 13a15(e) and 15d15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a15(f) and 15d15(f)) for the Company andhave:(a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure thatmaterial information relating to the Company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during theperiod in which this report is being prepared;(b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, toprovide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance withgenerally accepted accounting principles;(c)Evaluated the effectiveness of the Company’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of thedisclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and(d)Disclosed in this report any change in the Company’s internal control over financial reporting that occurred during the period covered by the transition reportthat has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting; and5.The Company’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Company’sauditors and the audit committee of the Company’s board of directors (or persons performing the equivalent functions):(a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely toadversely affect the Company’s ability to record, process, summarize and report financial information; and(b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the Company’s internal control over financialreporting.Date: October 12, 2018By:/s/ Jie YuJie YuChief Financial Officer(principal financial officer and principal accounting officer)EX13.1 15 f20f2017ex131_luokung.htm CERTIFICATIONExhibit 13.1Certification by the Chief Executive OfficerPursuant to Section 906 of the SarbanesOxley Act of 2002In connection with the Transition report on Form 20F of Luokung Technology Corp. (the “Company”) for the year ended December 31, 2017 as filed withthe Securities and Exchange Commission on the date hereof (the “Report”), I, Xuesong Song, Chairman and Chief Executive Officer of the Company, certify,pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the SarbanesOxley Act of 2002, that to my knowledge:(1)The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and(2)The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.Date: October 12, 2018By:/s/ Xuesong SongXuesong SongChief Executive Officer(principal executive officer)EX13.2 16 f20f2017ex132_luokung.htm CERTIFICATIONExhibit 13.2Certification by the Chief Financial OfficerPursuant to Section 906 of the SarbanesOxley Act of 2002In connection with the Transition report on Form 20F of Luokung Technology Corp. (the “Company”) for the year ended December 31, 2017 as filed withthe Securities and Exchange Commission on the date hereof (the “Report”), I, Jie Yu, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. Section1350, as adopted pursuant to Section 906 of the SarbanesOxley Act of 2002, that to my knowledge:(1)The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and(2)The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.Date: October 12, 2018By:/s/ Jie YuJie YuChief Financial Officer(principal financial officer and principal accounting officer)地址：Address:.b)陈蔚力Chen Weili地址：Address:c)王平Wang Ping地址：Address:17秘密文件 Strictly Confidentiald)刘东来Liu Donglai地址：Address:丙方：北京中传视讯科技有限公司Party C: Beijing Mobile Vision Technology Co., Ltd.地址：北京市朝阳区光华路9号SOHO3QLAB32Address: LAB32, SOHO3Q, No 9, Guanghua Road, Chaoyang District, Beijing.收件人：宋雪松Attn.: Song Xuesong14.3任何一方可按本条规定随时给其他各方发出通知来改变其接收通知的地址。Any Party may at any time change its address for notices by a notice delivered to the other Parties in accordance with the terms hereof.15.分割性Severability如果本协议有任何一条或多条规定根据任何法律或法规在任何方面被裁定为无效、不合法或不可执行，本协议其余规定的有效性、合法性或可执行性不应因此在任何方面受到影响或损害。各方应通过诚意磋商，争取以法律许可以及各方期望的最大限度内有效的规定取代那些无效、不合法或不可执行的规定，而该等有效的规定所产生的经济效果应尽可能与那些无效、不合法或不能强制执行的规定所产生的经济效果相似。In the event that one or several of the provisions of this Contract are found to be invalid, illegal or unenforceable in any aspect in accordance with any laws orregulations, the validity, legality or enforceability of the remaining provisions of this Contract shall not be affected or compromised in any respect. The Partiesshall strive in good faith to replace such invalid, illegal or unenforceable provisions with effective provisions that accomplish to the greatest extent permittedby law and the intentions of the Parties, and the economic effect of such effective provisions shall be as close as possible to the economic effect of thoseinvalid, illegal or unenforceable provisions.18秘密文件 Strictly Confidential16.附件Attachments本协议所列附件，为本协议不可分割的组成部分。The attachments set forth herein shall be an integral part of this Agreement.17.生效Effectiveness17.1本协议的任何修改、补充或变更，均须采用书面形式，经各方签字或盖章并按规定办理政府登记（如需）后生效。Any amendments, changes and supplements to this Agreement shall be in writing and shall become effective upon completion of the governmentalfiling procedures (if applicable) after the affixation of the signatures or seals of the Parties.17.2本协议以中文和英文书就，一式六份，质权人、所有出质人和丙方各持一份，具有同等效力；中英文版本如有冲突，应以中文版为准。This Agreement is written in Chinese and English in six copies. Each Pledgors, Pledgee and Party C shall hold one copy respectively. Each copy of thisAgreement shall have equal validity. In case there is any conflict between the Chinese version and the English version, the Chinese version shall prevail.本页其余部分刻意留为空白The Remainder of this page is intentionally left blank19秘密文件 Strictly Confidential有鉴于此，各方已使得经其授权的代表于文首所述日期签署了本股权质押协议并即生效，以昭信守。IN WITNESS WHEREOF, the Parties have caused their authorized representatives to execute this Equity Interest Pledge Agreement as of the date first abovewritten.甲方：中传天下信息科技（深圳）有限公司（盖章）Party A: Zhongchuan Tianxia Information Technology (Shenzhen) Co., Ltd. (Seal)签字：By:/s/ Hong Ting姓名：洪婷Name: Hong Ting职务：总经理Title: General Manager秘密文件 Strictly Confidential有鉴于此，各方已使得经其授权的代表于文首所述日期签署了本股权质押协议并即生效，以昭信守。IN WITNESS WHEREOF, the Parties have caused their authorized representatives to execute this Equity Interest Pledge Agreement as of the date first abovewritten.乙方：Party B:宋雪松Song Xuesong签署：By:/s/ Song Xuesong秘密文件 Strictly Confidential有鉴于此，各方已使得经其授权的代表于文首所述日期签署了本股权质押协议并即生效，以昭信守。IN WITNESS WHEREOF, the Parties have caused their authorized representatives to execute this Equity Interest Pledge Agreement as of the date first abovewritten.乙方：Party B:陈蔚力Chen Weili签字：By:/s/ Chen Weili秘密文件 Strictly Confidential有鉴于此，各方已使得经其授权的代表于文首所述日期签署了本股权质押协议并即生效，以昭信守。IN WITNESS WHEREOF, the Parties have caused their authorized representatives to execute this Equity Interest Pledge Agreement as of the date first abovewritten.乙方：Party B:王平Wang Ping签字：By:/s/ Wang Ping秘密文件 Strictly Confidential有鉴于此，各方已使得经其授权的代表于文首所述日期签署了本股权质押协议并即生效，以昭信守。IN WITNESS WHEREOF, the Parties have caused their authorized representatives to execute this Equity Interest Pledge Agreement as of the date first abovewritten.乙方：Party B:刘东来Liu Donglai签字：By:/s/ Liu Donglai秘密文件 Strictly Confidential有鉴于此，各方已使得经其授权的代表于文首所述日期签署了本股权质押协议并即生效，以昭信守。IN WITNESS WHEREOF, the Parties have caused their authorized representatives to execute this Equity Interest Pledge Agreement as of the date first abovewritten.丙方：北京中传视讯科技有限公司（盖章）Party B: Beijing Mobile Vision Technology Co., Ltd. (Seal)签字：By:/s/ Song Xuesong姓名：宋雪松Name: Song Xuesong职务：董事长Title: Chairman of the Board秘密文件 Strictly Confidential附件：Attachments:1.北京中传视讯科技有限公司股东名册；Shareholders' Register of Beijing Mobile Vision Technology Co., Ltd.;2.北京中传视讯科技有限公司的出资证明书；The Capital Contribution Certificate of Beijing Mobile Vision Technology Co., Ltd.;3.独家业务合作协议。Exclusive Business Cooperation Agreement.秘密文件 Strictly ConfidentialEX4.20 6 f20f2017ex420_luokung.htm POWER OF ATTORNEY BY WEILI CHEN, DATED AUGUST 31, 2015Exhibit 4.20授权委托书Power of Attorney本人陈蔚力，持有中华人民共和国身份证（号码：*************** 516），通讯地址为广东省，系拥有北京中传视讯科技有限公司（“中传视讯”）14.0848%股权（“相关股权”）的股东，就相关股权，特此不可撤销地授权中传天下信息科技（深圳）有限公司（“深圳中传天下”）在本授权委托书的有效期内行使如下权利：The undersigned, Chen Weili, a person with the PRC identification card number of ***************516, with address at: Guangdong, and a holder of14.0848% of the entire registered capital ("Shares") in Beijing Mobile Vision Technology Co., Ltd. ("Mobile Vision"), hereby irrevocably authorize ZhongchuanTianxia Information Technology (Shenzhen) Co., Ltd. ("WFOE") to exercise the following rights relating to Shares during the term of this Power of Attorney:授权深圳中传天下作为本人唯一的排他的代理人就有关相关股权的事宜全权代表本人行使包括但不限于如下的权利：1）参加中传视讯的股东会；2）行使按照法律和中传视讯章程规定本人所享有的全部股东权利和股东表决权，包括但不限于出售或转让或质押或处置相关股权的全部或任何一部分；以及3）作为本人的授权代表指定和任命中传视讯的法定代表人、董事和/或执行董事、监事、经理以及其他高级管理人员等。但中传视讯利用该等授权做出违反中华人民共和国法律的决定无效。WFOE is hereby authorized to act on behalf of myself as my exclusive agent and attorney with respect to all matters concerning My Shareholding, includingwithout limitation: 1) attending shareholders' meetings of Mobile Vision; 2) exercising all the shareholder's rights and shareholder's voting rights I am entitled tounder the laws of China and Articles of Association of Mobile Vision, including but not limited to the sale or transfer or pledge or disposition of My Shareholding inpart or in whole; and 3) designating and appointing on behalf of myself the legal representative, director and/or executive director, supervisor, manager and othersenior management members of Mobile Vision. However, the decision made by Mobile Vision taking advantage of the power of attorney which is against the PRClaws shall be null and void.1深圳中传天下将有权在授权范围内代表本人签署独家购买权协议（本人应要求作为协议方）中约定的转让协议，如期履行本人作为协议一方的与本授权委托书同日签署的股权质押协议和独家购买权协议，该权利的行使将不对本授权形成任何限制。Without limiting the generality of the powers granted hereunder, WFOE shall have the power and authority under this Power of Attorney to execute theTransfer Contracts stipulated in Exclusive Option Agreement, to which I am required to be a party, on behalf of myself, and to effect the terms of the Share PledgeAgreement and Exclusive Option Agreement, both dated the date hereof, to which I am a party.深圳中传天下就相关股权的一切行为均视为本人的行为，签署的一切文件均视为本人签署，本人会予以承认。All the actions associated with Shares conducted by WFOE shall be deemed as my own actions, and all the documents related to Shares executed by WFOEshall be deemed to be executed by me. I hereby acknowledge and ratify those actions and/or documents by the WFOE.深圳中传天下有转委托权，可以就上述事项的办理自行再委托其他人或单位而不必事先通知本人或获得本人的同意。WFOE is entitled to reauthorize or assign its rights related to the aforesaid matters to any other person or entity at its own discretion and without giving priornotice to me or obtaining my consent.在本人为中传视讯的股东期间，本授权委托书不可撤销并持续有效，自授权委托书签署之日起算。This Power of Attorney is coupled with an interest and shall be irrevocable and continuously valid from the date of execution of this Power of Attorney, solong as I am a shareholder of Mobile Vision.本授权委托书期间，本人特此放弃已经通过本授权委托书授权给深圳中传天下的与相关股权有关的所有权利，不再自行行使该等权利。During the term of this Power of Attorney, I hereby waive all the rights associated with Shares, which have been authorized to WFOE through this Power ofAttorney, and shall not exercise such rights by myself.本授权委托书以中文和英文书就，中英文版本如有冲突，应以中文版为准。This Power of Attorney is written in Chinese and English; in case there is any conflict between the Chinese version and the English version, the Chineseversion shall prevail.陈蔚力Chen Weili签署：By:日期：年月日Date:2EX4.21 7 f20f2017ex421_luokung.htm POWER OF ATTORNEY BY PING WANG, DATED AUGUST 31, 2015Exhibit 4.21授权委托书Power of Attorney本人王平，持有中华人民共和国身份证（号码：***************01x），通讯地址为广东省，系拥有北京中传视讯科技有限公司（“中传视讯”）19.9872%股权（“相关股权”）的股东，就相关股权，特此不可撤销地授权中传天下信息科技（深圳）有限公司（“深圳中传天下”）在本授权委托书的有效期内行使如下权利：The undersigned, Wang Ping, a person with the PRC identification card number of ***************01x, with address at Guangdong, and a holder of19.9872% of the entire registered capital (“Shares”) in Beijing Mobile Vision Technology Co., Ltd. (“Mobile Vision”), hereby irrevocably authorize ZhongchuanTianxia Information Technology (Shenzhen) Co., Ltd. (“WFOE”) to exercise the following rights relating to Shares during the term of this Power of Attorney:授权深圳中传天下作为本人唯一的排他的代理人就有关相关股权的事宜全权代表本人行使包括但不限于如下的权利：1）参加中传视讯的股东会；2）行使按照法律和中传视讯章程规定本人所享有的全部股东权利和股东表决权，包括但不限于出售或转让或质押或处置相关股权的全部或任何一部分；以及3）作为本人的授权代表指定和任命中传视讯的法定代表人、董事和/或执行董事、监事、经理以及其他高级管理人员等。但中传视讯利用该等授权做出违反中华人民共和国法律的决定无效。WFOE is hereby authorized to act on behalf of myself as my exclusive agent and attorney with respect to all matters concerning My Shareholding, includingwithout limitation: 1) attending shareholders’ meetings of Mobile Vision; 2) exercising all the shareholder’s rights and shareholder’s voting rights I am entitled tounder the laws of China and Articles of Association of Mobile Vision, including but not limited to the sale or transfer or pledge or disposition of My Shareholding inpart or in whole; and 3) designating and appointing on behalf of myself the legal representative, director and/or executive director, supervisor, manager and othersenior management members of Mobile Vision. However, the decision made by Mobile Vision taking advantage of the power of attorney which is against the PRClaws shall be null and void.1深圳中传天下将有权在授权范围内代表本人签署独家购买权协议（本人应要求作为协议方）中约定的转让协议，如期履行本人作为协议一方的与本授权委托书同日签署的股权质押协议和独家购买权协议，该权利的行使将不对本授权形成任何限制。Without limiting the generality of the powers granted hereunder, WFOE shall have the power and authority under this Power of Attorney to execute theTransfer Contracts stipulated in Exclusive Option Agreement, to which I am required to be a party, on behalf of myself, and to effect the terms of the Share PledgeAgreement and Exclusive Option Agreement, both dated the date hereof, to which I am a party.深圳中传天下就相关股权的一切行为均视为本人的行为，签署的一切文件均视为本人签署，本人会予以承认。All the actions associated with Shares conducted by WFOE shall be deemed as my own actions, and all the documents related to Shares executed by WFOEshall be deemed to be executed by me. I hereby acknowledge and ratify those actions and/or documents by the WFOE.深圳中传天下有转委托权，可以就上述事项的办理自行再委托其他人或单位而不必事先通知本人或获得本人的同意。WFOE is entitled to reauthorize or assign its rights related to the aforesaid matters to any other person or entity at its own discretion and without giving priornotice to me or obtaining my consent.在本人为中传视讯的股东期间，本授权委托书不可撤销并持续有效，自授权委托书签署之日起算。This Power of Attorney is coupled with an interest and shall be irrevocable and continuously valid from the date of execution of this Power of Attorney, solong as I am a shareholder of Mobile Vision.本授权委托书期间，本人特此放弃已经通过本授权委托书授权给深圳中传天下的与相关股权有关的所有权利，不再自行行使该等权利。During the term of this Power of Attorney, I hereby waive all the rights associated with Shares, which have been authorized to WFOE through this Power ofAttorney, and shall not exercise such rights by myself.本授权委托书以中文和英文书就，中英文版本如有冲突，应以中文版为准。This Power of Attorney is written in Chinese and English; in case there is any conflict between the Chinese version and the English version, the Chineseversion shall prevail.王平Wang Ping签署：By:日期：年月日Date:2EX4.22 8 f20f2017ex422_luokung.htm POWER OF ATTORNEY BY DONGLAI LIU, DATED AUGUST 31, 2015Exhibit 4.22授权委托书Power of Attorney本人刘东来，持有中华人民共和国身份证（号码：***************912），通讯地址为: ，系拥有北京中传视讯科技有限公司（“中传视讯”）4.1035%股权（“相关股权”）的股东，就相关股权，特此不可撤销地授权中传天下信息科技（深圳）有限公司（“深圳中传天下”）在本授权委托书的有效期内行使如下权利：The undersigned, Liu Donglai, a person with the PRC identification card number of ***************912, with address at: , and a holder of 4.1035% of theentire registered capital (“Shares”) in Beijing Mobile Vision Technology Co., Ltd. (“Mobile Vision”), hereby irrevocably authorize Zhongchuan Tianxia InformationTechnology (Shenzhen) Co., Ltd. (“WFOE”) to exercise the following rights relating to Shares during the term of this Power of Attorney:授权深圳中传天下作为本人唯一的排他的代理人就有关相关股权的事宜全权代表本人行使包括但不限于如下的权利：1）参加中传视讯的股东会；2）行使按照法律和中传视讯章程规定本人所享有的全部股东权利和股东表决权，包括但不限于出售或转让或质押或处置相关股权的全部或任何一部分；以及3）作为本人的授权代表指定和任命中传视讯的法定代表人、董事和/或执行董事、监事、经理以及其他高级管理人员等。但中传视讯利用该等授权做出违反中华人民共和国法律的决定无效。WFOE is hereby authorized to act on behalf of myself as my exclusive agent and attorney with respect to all matters concerning My Shareholding, includingwithout limitation: 1) attending shareholders’ meetings of Mobile Vision; 2) exercising all the shareholder’s rights and shareholder’s voting rights I am entitled tounder the laws of China and Articles of Association of Mobile Vision, including but not limited to the sale or transfer or pledge or disposition of My Shareholding inpart or in whole; and 3) designating and appointing on behalf of myself the legal representative, director and/or executive director, supervisor, manager and othersenior management members of Mobile Vision. However, the decision made by Mobile Vision taking advantage of the power of attorney which is against the PRClaws shall be null and void.1深圳中传天下将有权在授权范围内代表本人签署独家购买权协议（本人应要求作为协议方）中约定的转让协议，如期履行本人作为协议一方的与本授权委托书同日签署的股权质押协议和独家购买权协议，该权利的行使将不对本授权形成任何限制。Without limiting the generality of the powers granted hereunder, WFOE shall have the power and authority under this Power of Attorney to execute theTransfer Contracts stipulated in Exclusive Option Agreement, to which I am required to be a party, on behalf of myself, and to effect the terms of the Share PledgeAgreement and Exclusive Option Agreement, both dated the date hereof, to which I am a party.深圳中传天下就相关股权的一切行为均视为本人的行为，签署的一切文件均视为本人签署，本人会予以承认。All the actions associated with Shares conducted by WFOE shall be deemed as my own actions, and all the documents related to Shares executed by WFOEshall be deemed to be executed by me. I hereby acknowledge and ratify those actions and/or documents by the WFOE.深圳中传天下有转委托权，可以就上述事项的办理自行再委托其他人或单位而不必事先通知本人或获得本人的同意。WFOE is entitled to reauthorize or assign its rights related to the aforesaid matters to any other person or entity at its own discretion and without giving priornotice to me or obtaining my consent.在本人为中传视讯的股东期间，本授权委托书不可撤销并持续有效，自授权委托书签署之日起算。This Power of Attorney is coupled with an interest and shall be irrevocable and continuously valid from the date of execution of this Power of Attorney, solong as I am a shareholder of Mobile Vision.本授权委托书期间，本人特此放弃已经通过本授权委托书授权给深圳中传天下的与相关股权有关的所有权利，不再自行行使该等权利。During the term of this Power of Attorney, I hereby waive all the rights associated with Shares, which have been authorized to WFOE through this Power ofAttorney, and shall not exercise such rights by myself.本授权委托书以中文和英文书就，中英文版本如有冲突，应以中文版为准。This Power of Attorney is written in Chinese and English; in case there is any conflict between the Chinese version and the English version, the Chineseversion shall prevail.刘东来Liu Donglai签署：By:日期：年月日Date:2EX4.23 9 f20f2017ex423_luokung.htm POWER OF ATTORNEY BY XUESONG SONG, DATED AUGUST 31, 2015Exhibit 4.23授权委托书Power of Attorney本人宋雪松，持有中华人民共和国身份证（号码：***************417），通讯地址为，系拥有北京中传视讯科技有限公司（“中传视讯”）61.8245%股权（“相关股权”）的股东，就相关股权，特此不可撤销地授权中传天下信息科技（深圳）有限公司（“深圳中传天下”）在本授权委托书的有效期内行使如下权利：The undersigned, Song Xuesong, a person with the PRC identification card number of ***************417, with address at , and a holder of 61.8245% ofthe entire registered capital (“Shares”) in Beijing Mobile Vision Technology Co., Ltd. (“Mobile Vision”), hereby irrevocably authorize Zhongchuan TianxiaInformation Technology (Shenzhen) Co., Ltd. (“WFOE”) to exercise the following rights relating to Shares during the term of this Power of Attorney:授权深圳中传天下作为本人唯一的排他的代理人就有关相关股权的事宜全权代表本人行使包括但不限于如下的权利：1）参加中传视讯的股东会；2）行使按照法律和中传视讯章程规定本人所享有的全部股东权利和股东表决权，包括但不限于出售或转让或质押或处置相关股权的全部或任何一部分；以及3）作为本人的授权代表指定和任命中传视讯的法定代表人、董事和/或执行董事、监事、经理以及其他高级管理人员等。但中传视讯利用该等授权做出违反中华人民共和国法律的决定无效。WFOE is hereby authorized to act on behalf of myself as my exclusive agent and attorney with respect to all matters concerning My Shareholding, includingwithout limitation: 1) attending shareholders’ meetings of Mobile Vision; 2) exercising all the shareholder’s rights and shareholder’s voting rights I am entitled tounder the laws of China and Articles of Association of Mobile Vision, including but not limited to the sale or transfer or pledge or disposition of My Shareholding inpart or in whole; and 3) designating and appointing on behalf of myself the legal representative, director and/or executive director, supervisor, manager and othersenior management members of Mobile Vision. However, the decision made by Mobile Vision taking advantage of the power of attorney which is against the PRClaws shall be null and void.1深圳中传天下将有权在授权范围内代表本人签署独家购买权协议（本人应要求作为协议方）中约定的转让协议，如期履行本人作为协议一方的与本授权委托书同日签署的股权质押协议和独家购买权协议，该权利的行使将不对本授权形成任何限制。Without limiting the generality of the powers granted hereunder, WFOE shall have the power and authority under this Power of Attorney to execute theTransfer Contracts stipulated in Exclusive Option Agreement, to which I am required to be a party, on behalf of myself, and to effect the terms of the Share PledgeAgreement and Exclusive Option Agreement, both dated the date hereof, to which I am a party.深圳中传天下就相关股权的一切行为均视为本人的行为，签署的一切文件均视为本人签署，本人会予以承认。All the actions associated with Shares conducted by WFOE shall be deemed as my own actions, and all the documents related to Shares executed by WFOEshall be deemed to be executed by me. I hereby acknowledge and ratify those actions and/or documents by the WFOE.深圳中传天下有转委托权，可以就上述事项的办理自行再委托其他人或单位而不必事先通知本人或获得本人的同意。WFOE is entitled to reauthorize or assign its rights related to the aforesaid matters to any other person or entity at its own discretion and without giving priornotice to me or obtaining my consent.在本人为中传视讯的股东期间，本授权委托书不可撤销并持续有效，自授权委托书签署之日起算。This Power of Attorney is coupled with an interest and shall be irrevocable and continuously valid from the date of execution of this Power of Attorney, solong as I am a shareholder of Mobile Vision.本授权委托书期间，本人特此放弃已经通过本授权委托书授权给深圳中传天下的与相关股权有关的所有权利，不再自行行使该等权利。During the term of this Power of Attorney, I hereby waive all the rights associated with Shares, which have been authorized to WFOE through this Power ofAttorney, and shall not exercise such rights by myself.本授权委托书以中文和英文书就，中英文版本如有冲突，应以中文版为准。This Power of Attorney is written in Chinese and English; in case there is any conflict between the Chinese version and the English version, the Chineseversion shall prevail.宋雪松Song Xuesong签署：By:日期：年月日Date:2EX8.1 10 f20f2017ex81_luokung.htm LIST OF SUBSIDIARIES AND CONSOLIDATED VARIABLE INTEREST ENTITIESExhibit 8.1List of Subsidiaries of the CompanyName of EntityJurisdiction of Incorporation/OrganizationLK Technology Ltd.British Virgin IslandsTopsky Infotech Holdings Pte Ltd.SingaporeSuperengine Holdings LimitedBritish Virgin IslandsMMB LimitedHong KongMobile Media (China Limited)Hong KongZhong Chuan Tian Xia Information and Technology (Beijing) LimitedBeijing, PRCZhong Chuan Xia Information and Technology (Shenzhen) LimitedShenzhen, PRCBeijing Zhong Chuan Shi Xun Technology Limited (VIE Entity)Beijing, PRCJiangsu Zhong Chuan Rui You Information and Technology Limited (VIE Entity)Jiangsu, PRCHuoerguosi Luokuang Information and Technology Limited (VIE Entity)Huoerguosi, PRCShenzhen Jiu Zhou Shi Dai Digital Technology LimitedShenzhen, PRCEX10.1 11 f20f2017ex101_luokung.htm EMPLOYMENT AGREEMENT, DATED AUGUST 19, 2018, BETWEEN LUOKUNG TECHNOLOGY CORP. AND XUESONGSONGExhibit 10.1EMPLOYMENT AGREEMENTThis EMPLOYMENT AGREEMENT (the “Agreement”) is made and entered into as of this 19 day of August, 2018 (the “Effective Date”), by and between LuokungTechnology Corp., a British Virgin Islands corporation (the “Company”) and Xuesong Song (the “Executive”), a Chinese citizen.WITNESSETH:WHEREAS, the parties desire to enter into this Agreement setting forth the terms and conditions of the employment relationship between the Executiveand the Company.NOW, THEREFORE, in consideration of the foregoing premises and the mutual covenants and agreements contained herein, the parties hereto agree asfollows:1. EMPLOYMENT.1.1 Agreement to Employ. The Company hereby agrees to employ Executive, and Executive hereby agrees to serve, subject to the provisions of thisAgreement, as an officer and employee of the Company.1.2 Duties and Schedule. Executive shall serve as the Company’s Chief Executive Officer (“CEO”). The responsibilities of the Executive shall be subject tothe bylaws of the Company and determined by the Board of Directors of the Company (the “Board”). The Executive shall report directly to the Board and shall havesuch responsibilities as designated by the Board of the Company to the extent that such responsibilities are not inconsistent with all applicable laws, regulationsand rules. Executive shall devote his best efforts and all of his business time to his position with the Company during the Term.2. TERM OF EMPLOYMENT. Unless Executive’s employment shall sooner terminate pursuant to Section 4, the Company shall employ Executive for a fouryear term commencing on the Effective Date (the “Term”), which Term shall be renewable upon mutual agreement of the Company and the Executive, as approved bythe Board.3. COMPENSATION.3.1 Salary. Executive’s salary during the Term shall be $Nil.3.2 Bonus. At the sole discretion of the Board, or any committee duly designated by the Board and authorized to act thereto, the Executive shall be eligiblefor an annual cash bonus.3.3 Vacation. Executive shall be entitled to 8 days of paid vacation per year. In the event that Executive remains employed by the Company for 3 years ormore, Executive shall be entitled to 12 days of paid vacation.3.4 Business Expenses. Executive shall be reimbursed by the Company for all ordinary and necessary expenses incurred by Executive; provided that theyare incurred and approved in writing in accordance with the Company’s expense policy.3.5 Benefits. During the Term, Executive shall be allowed to participate, on the same basis generally as other employees of the Company, in all generalemployee benefit plans and programs, including improvements or modifications of the same, which may exist as of the Effective Date or thereafter and which aremade available by the Company to all or substantially all of its employees. Such benefits, plans, and programs may include, without limitation, any health, and dentalinsurance or 401K programs, if and when instituted. Any benefit plan currently existing or instituted by the Company after the Effective Date may be altered, changeor discontinued by the Company at its sole discretion and at any time without obligation of any nature to Executive. Except as specifically provided herein, nothingin this Agreement is to be construed or interpreted to increase or alter in any way the rights, participation, coverage, or benefits under such benefit plans orprograms to other than those provided to other employees pursuant to the terms and conditions of such benefit plans and programs. 14. TERMINATION.4.1 Death. This Agreement shall terminate immediately upon the death of Executive, and Executive’s estate or Executive’s legal representative, as the casemay be, shall be entitled to Executive’s accrued and unpaid Salary as of the date of Executive’s death, plus all other compensation and benefits that were vestedthrough the date of Executive’s death.4.2 Disability. In the event of Executive’s Disability, this Agreement shall terminate and Executive shall be entitled to (a) accrued and unpaid Salary andvacation through the first date that a Disability is determined; and (b) all other compensation and benefits that were vested through the first date that a Disabilityhas been determined. “Disability” means the good faith determination of the Board that Executive has become so physically or mentally incapacitated or disabled asto be unable to satisfactorily perform his duties hereunder for a period of ninety (90) consecutive calendar days or for one hundred twenty (120) days in any threehundred sixty (360) day period, such determination based upon a certificate as to such physical or mental disability issued by a licensed physician and/orpsychiatrist (as the case may be) mutually agreed upon by Executive and the Company.4.3 Termination by Company for Cause. The Company may terminate the Executive for Cause and such termination shall take effect upon the receipt byExecutive of the Notice of Termination. Upon the effective date of the termination for Cause, Executive shall be solely entitled to accrued and unpaid Salary throughsuch effective date. “Cause” means: (i) engaging in any act, omission or misconduct that is injurious to the Company or an affiliate; (ii) gross negligence or willfulmisconduct in connection with the performance of duties; (iii) conviction of a criminal offense (other than minor traffic offenses); (iv) fraud, embezzlement ormisappropriation of funds or property of the Company or an affiliate; (v) material breach of any term of any employment or other services, confidentiality, intellectualproperty or noncompetition agreements, if any, between the Executive and the Company or an affiliate; (vi) the entry of an order duly issued by any regulatoryagency (including federal, state and local regulatory agencies and selfregulatory bodies) having jurisdiction over the Company or an affiliate requiring the removalof the Executive from any office held with the Company or prohibiting the Executive from participating in the business or affairs of the Company or any affiliate; or(vii) the revocation or threatened revocation of any of the Company’s or an affiliate’s government licenses, permits or approvals, which is primarily due to theExecutive’s action or inaction and such revocation or threatened revocation would be alleviated or mitigated in any material respect by the termination of theExecutive’s employment or services with the Company or an affiliate. 4.4 Voluntary Termination by Executive. The Executive may voluntarily terminate his employment for any reason and such termination shall take effect 30days after the receipt by Company of the Notice of Termination. Upon the effective date of such termination, Executive shall be entitled to (a) accrued and unpaidSalary and vacation through such termination date; and (b) all other compensation and benefits that were vested through such termination date. In the eventExecutive is terminated without notice, it shall be deemed a termination by the Company for Cause.4.5 Notice of Termination. Any termination of the employment by the Company or the Executive shall be communicated by a notice in accordance withSection 8.4 of this Agreement (the “Notice of Termination”). Such notice shall (a) indicate the specific termination provision in this Agreement relied upon and (b) ifthe termination is for Cause, the date on which the Executive’s employment is to be terminated.4.6 Severance. The Executive shall not be entitled to severance payments upon any termination provided in Section 4 herein.5. EMPLOYEE’S REPRESENTATION. The Executive represents and warrants to the Company that: (a) he is subject to no contractual, fiduciary or otherobligation which may affect the performance of his duties under this Agreement; (b) he has terminated, in accordance with their terms, any contractual obligationwhich may affect his performance under this Agreement; and (c) his employment with the Company will not require him to use or disclose proprietary or confidentialinformation of any other person or entity.26. CONFIDENTIAL INFORMATION Except as permitted or directed by the Board of Directors of the Company in writing, during the time the Executive isemployed by the Company or at any time thereafter, the Executive shall not use for his personal purposes nor divulge, furnish, or make accessible to anyone or usein any way (other than in the ordinary course of the business of the Company) any confidential or secret information or knowledge of the Company, whetherdeveloped by himself or by others. Such confidential and/or secret information encompassed by this Section 6 includes, but is not limited to, the Company’scustomer and supplier lists, business plans, software, systems, and financial, marketing, and personnel information. The Executive agrees to refrain from any acts oromissions that would reduce the value of any confidential or secret knowledge or information to the Company, both during his employment hereunder and at anytime after the termination of his employment. The Executive’s obligations of confidentiality under this Section 6 shall not apply to any knowledge or information thatis now published publicly or that subsequently becomes generally publicly known, other than as a direct or indirect result of a breach of this Agreement by theExecutive.7. NONCOMPETITION: NONSOLICITATION; INVENTIONS.7.1 NonCompetition. During the employment of the Executive under this Agreement and for a period of six (6) months after termination of suchemployment, the Executive shall not at any time compete on his own behalf, or on behalf of any other person or entity, with the Company or any of its affiliateswithin all territories in which the Company does business with respect to the business of the Company or any of its affiliates as such business shall be conductedon the date hereof or during the employment of the Executive under this Agreement. The ownership by the Executive of not more than 5% of a corporation,partnership or other enterprise shall not constitute a violation hereof.7.2 NonSolicitation. During the employment of the Executive under this Agreement and thereafter Executive shall not at any time (i) solicit or induce, onhis own behalf or on behalf of any other person or entity, any employee of the Company or any of its affiliates to leave the employ of the Company or any of itsaffiliates; or (ii) solicit or induce, on his own behalf or on behalf of any other person or entity, any customer or Prospective Customer of the Company or any of theirrespective affiliates to reduce its business with the Company or any of its affiliates. For the purposes of this Agreement, “Prospective Customer” shall mean anyindividual, corporation, trust or other business entity which has either (a) entered into a nondisclosure agreement with the Company or any Company subsidiary oraffiliate or (b) has within the preceding 12 months received a currently pending and not rejected written proposal in reasonable detail from the Company or any ofthe Company’s subsidiary or affiliate.7.3 Inventions and Patents. The Company shall be entitled to the sole benefit and exclusive ownership of any inventions or improvements in products,processes, or other things that may be made or discovered by Executive while he is in the service of the Company, and all patents for the same. During the Term,Executive shall do all acts necessary or required by the Company to give effect to this section and, following the Term, Executive shall do all acts reasonablynecessary or required by the Company to give effect to this section. In all cases, the Company shall pay all costs and fees associated with such acts by Executive.7.4 Return of Property. The Executive agrees that all property in the Executive’s possession that he obtains or is assigned in the course of his employmentwith the Company, including, without limitation, all documents, reports, manuals, memoranda, customer lists, credit cards, keys, access cards, and all other propertyrelating in any way to the business of the Company, is the exclusive property of the Company, even if the Executive authored, created, or assisted in authoring orcreating such property. The Executive shall return to the Company all such property immediately upon termination of employment or at such earlier time as theCompany may request.7.5Court Ordered Revisions.If any portion of this Section 7 is found by a court of competent jurisdiction to be invalid or unenforceable, but would be validand enforceable if modified, this Section 7 shall apply with such modifications necessary to make this Section 7 valid and enforceable. Any portion of this Section 7not required to be so modified shall remain in full force and effect and not be affected thereby.7.6 Specific Performance. The Executive acknowledges that the remedy at law for any breach of any of the provisions of Section 7 will be inadequate, andthat the Company shall be entitled, in addition to any remedy at law or in equity, to preliminary and permanent injunctive relief and specific performance.38. MISCELLANEOUS.8.1 Indemnification. The Company and each of its subsidiaries shall, to the maximum extent provided under applicable law, indemnify and hold Executiveharmless from and against any expenses, including reasonable attorney’s fees, judgments, fines, settlements and other legally permissible amounts (“Losses”),incurred in connection with any proceeding arising out of, or related to, Executive’s employment by the Company, other than any such Losses incurred as a result ofExecutive’s negligence or willful misconduct. The Company shall, or shall cause a subsidiary thereof to, advance to Executive any expenses, including attorney’sfees and costs of settlement, incurred in defending any such proceeding to the maximum extent permitted by applicable law. Such costs and expenses incurred byExecutive in defense of any such proceeding shall be paid by the Company or applicable subsidiary in advance of the final disposition of such proceeding promptlyupon receipt by the Company of (a) written request for payment; (b) appropriate documentation evidencing the incurrence, amount and nature of the costs andexpenses for which payment is being sought; and (c) an undertaking adequate under applicable law made by or on behalf of Executive to repay the amounts soadvanced if it shall ultimately be determined pursuant to any nonappealable judgment or settlement that Executive is not entitled to be indemnified by the Companyor any subsidiary thereof. The Company will provide Executive with coverage under all directors and officers liability insurance policies that it has in effect duringthe Term, with no deductible to Executive. 8.2 Applicable Law. Except as may be otherwise provided herein, this Agreement shall be governed by and construed in accordance with the laws ofChina, applied without reference to principles of conflict of laws. Any dispute arising from or in connection with this Agreement shall be submitted to ShanghaiInternational Arbitration Center (the “Center”) for arbitration under the then effective rules of the Center. The arbitration award shall be the sole, binding, exclusiveand final remedy for resolving any dispute between the parties.8.3 Amendments. This Agreement may not be amended or modified otherwise than by a written agreement executed by the parties hereto or their respectivesuccessors or legal representatives.8.4 Notices. All notices and other communications hereunder shall be in writing and shall be given by handdelivery to the other party, by an internationalmail courier, or by registered or certified mail, return receipt requested, postage prepaid, addressed as follows:If to the Executive:Xuesong Song________________________________________________If to the Company:______________________________________Or to such other address as either party shall have furnished to the other in writing in accordance herewith. Notices and communications shall be effective whendelivered to the addressee.8.5 Withholding. The Company may withhold from any amounts payable under the Agreement, such federal, state and local income, unemployment, socialsecurity and similar employment related taxes and similar employment related withholdings as shall be required to be withheld pursuant to any applicable law orregulation.8.6 Severability. The invalidity or unenforceability of any provision of this Agreement shall not affect the validity or enforceability of any other provision ofthis Agreement and any such provision which is not valid or enforceable in whole shall be enforced to the maximum extent permitted by law.8.7 Captions. The captions of this Agreement are not part of the provisions and shall have no force or effect.48.8 Entire Agreement. This Agreement contains the entire agreement among the parties concerning the subject matter hereof and supersedes all prioragreements, understandings, discussions, negotiations and undertakings, whether written or oral, between the parties with respect thereto.8.9 Survival. The respective rights and obligations of the parties hereunder shall survive any termination of this Agreement or the Executive’s employmenthereunder to the extent necessary to the intended preservation of such rights and obligations.8.10 Waiver. Either Party's failure to enforce any provision or provisions of this Agreement shall not in any way be construed as a waiver of any suchprovision or provisions, or prevent that party thereafter from enforcing each and every other provision of this Agreement.8.11 Successors. This Agreement is personal to Executive and, without the prior express written consent of the Company, shall not be assignable byExecutive. This Agreement shall inure to the benefit of and be enforceable by Executive’s estate, heirs, beneficiaries, and/or legal representatives. This Agreementshall inure to the benefit of and be binding upon the Company and its successors and assigns.8.12 Joint Efforts/Counterparts. Preparation of this Agreement shall be deemed to be the joint effort of the parties hereto and shall not be construed moreseverely against any party. This Agreement may be signed in two or more counterparts, each of which shall be deemed an original and all of which together shallconstitute one and the same instrument.8.13 Representation by Counsel. Each Party hereby represents that it has had the opportunity to be represented by legal counsel of its choice inconnection with the negotiation and execution of this Agreement.IN WITNESS WHEREOF, the parties have executed this Agreement as of the day and year first above written.EXECUTIVE:LUOKUNG TECHNOLOGY CORP./s/ Xuesong Song/s/ Jie YuXuesong SongJie YuChief Financial Officer5EX10.2 12 f20f2017ex102_luokung.htm EMPLOYMENT AGREEMENT, DATED AUGUST 19, 2018, BY AND BETWEEN LUOKUNG TECHNOLOGY CORP. AND JIEYUExhibit 10.2EMPLOYMENT AGREEMENTThis EMPLOYMENT AGREEMENT (the “Agreement”) is made and entered into as of this 19 day of August, 2018 (the “Effective Date”), by and between LuokungTechnology Corp., a British Virgin Islands corporation (the “Company”) and Jie (Jay) Yu (the “Executive”), a Chinese citizen.WITNESSETH:WHEREAS, the parties desire to enter into this Agreement setting forth the terms and conditions of the employment relationship between the Executiveand the Company.NOW, THEREFORE, in consideration of the foregoing premises and the mutual covenants and agreements contained herein, the parties hereto agree asfollows:1. EMPLOYMENT.1.1 Agreement to Employ. The Company hereby agrees to employ Executive, and Executive hereby agrees to serve, subject to the provisions of thisAgreement, as an officer and employee of the Company.1.2 Duties and Schedule. Executive shall serve as the Company’s Chief Financial Officer, and be the Principal Financial Officer and Principal AccountingOfficer of the Company and responsible for all financial matters and management of the Company. The Executive shall report directly to the Company’s ChiefExecutive Officer and Board of Directors (the “Board”) and shall have such responsibilities as designated by the Chief Executive Officer or Board to the extent thatsuch responsibilities are not inconsistent with all applicable laws, regulations and rules. Executive shall devote his best efforts and all of his business time to hisposition with the Company during the Term.2. TERM OF EMPLOYMENT. Unless Executive’s employment shall sooner terminate pursuant to Section 4, the Company shall employ Executive for a fouryear term commencing on the Effective Date (the “Term”), which Term shall be renewable upon mutual agreement of the Company and the Executive, as approved bythe Board.3. COMPENSATION.3.1 Salary. Executive’s salary during the Term shall be RMB700,000 per year (the “Salary”), payable monthly.3.2 Bonus. At the sole discretion of the Board, or any committee duly designated by the Board and authorized to act thereto, the Executive shall be eligiblefor an annual cash bonus.3.3 Vacation. Executive shall be entitled to 8 days of paid vacation per year. In the event that Executive remains employed by the Company for 3 years ormore, Executive shall be entitled to 12 days of paid vacation.3.4 Business Expenses. Executive shall be reimbursed by the Company for all ordinary and necessary expenses incurred by Executive; provided that theyare incurred and approved in writing in accordance with the Company’s expense policy.3.5 Benefits. During the Term, Executive shall be allowed to participate, on the same basis generally as other employees of the Company, in all generalemployee benefit plans and programs, including improvements or modifications of the same, which may exist as of the Effective Date or thereafter and which aremade available by the Company to all or substantially all of its employees. Such benefits, plans, and programs may include, without limitation, any health, and dentalinsurance or 401K programs, if and when instituted. Any benefit plan currently existing or instituted by the Company after the Effective Date may be altered, changeor discontinued by the Company at its sole discretion and at any time without obligation of any nature to Executive. Except as specifically provided herein, nothingin this Agreement is to be construed or interpreted to increase or alter in any way the rights, participation, coverage, or benefits under such benefit plans orprograms to other than those provided to other employees pursuant to the terms and conditions of such benefit plans and programs. 14. TERMINATION.4.1 Death. This Agreement shall terminate immediately upon the death of Executive, and Executive’s estate or Executive’s legal representative, as the casemay be, shall be entitled to Executive’s accrued and unpaid Salary as of the date of Executive’s death, plus all other compensation and benefits that were vestedthrough the date of Executive’s death.4.2 Disability. In the event of Executive’s Disability, this Agreement shall terminate and Executive shall be entitled to (a) accrued and unpaid Salary andvacation through the first date that a Disability is determined; and (b) all other compensation and benefits that were vested through the first date that a Disabilityhas been determined. “Disability” means the good faith determination of the Board that Executive has become so physically or mentally incapacitated or disabled asto be unable to satisfactorily perform his duties hereunder for a period of ninety (90) consecutive calendar days or for one hundred twenty (120) days in any threehundred sixty (360) day period, such determination based upon a certificate as to such physical or mental disability issued by a licensed physician and/orpsychiatrist (as the case may be) mutually agreed upon by Executive and the Company.4.3 Termination by Company for Cause. The Company may terminate the Executive for Cause and such termination shall take effect upon the receipt byExecutive of the Notice of Termination. Upon the effective date of the termination for Cause, Executive shall be solely entitled to accrued and unpaid Salary throughsuch effective date. “Cause” means: (i) engaging in any act, omission or misconduct that is injurious to the Company or an affiliate; (ii) gross negligence or willfulmisconduct in connection with the performance of duties; (iii) conviction of a criminal offense (other than minor traffic offenses); (iv) fraud, embezzlement ormisappropriation of funds or property of the Company or an affiliate; (v) material breach of any term of any employment or other services, confidentiality, intellectualproperty or noncompetition agreements, if any, between the Executive and the Company or an affiliate; (vi) the entry of an order duly issued by any regulatoryagency (including federal, state and local regulatory agencies and selfregulatory bodies) having jurisdiction over the Company or an affiliate requiring the removalof the Executive from any office held with the Company or prohibiting the Executive from participating in the business or affairs of the Company or any affiliate; or(vii) the revocation or threatened revocation of any of the Company’s or an affiliate’s government licenses, permits or approvals, which is primarily due to theExecutive’s action or inaction and such revocation or threatened revocation would be alleviated or mitigated in any material respect by the termination of theExecutive’s employment or services with the Company or an affiliate. 4.4 Voluntary Termination by Executive. The Executive may voluntarily terminate his employment for any reason and such termination shall take effect 30days after the receipt by Company of the Notice of Termination. Upon the effective date of such termination, Executive shall be entitled to (a) accrued and unpaidSalary and vacation through such termination date; and (b) all other compensation and benefits that were vested through such termination date. In the eventExecutive is terminated without notice, it shall be deemed a termination by the Company for Cause.4.5 Notice of Termination. Any termination of the employment by the Company or the Executive shall be communicated by a notice in accordance withSection 8.4 of this Agreement (the “Notice of Termination”). Such notice shall (a) indicate the specific termination provision in this Agreement relied upon and (b) ifthe termination is for Cause, the date on which the Executive’s employment is to be terminated.4.6 Severance. The Executive shall not be entitled to severance payments upon any termination provided in Section 4 herein.5. EMPLOYEE’S REPRESENTATION. The Executive represents and warrants to the Company that: (a) he is subject to no contractual, fiduciary or otherobligation which may affect the performance of his duties under this Agreement; (b) he has terminated, in accordance with their terms, any contractual obligationwhich may affect his performance under this Agreement; and (c) his employment with the Company will not require him to use or disclose proprietary or confidentialinformation of any other person or entity.26. CONFIDENTIAL INFORMATION Except as permitted or directed by the Board of Directors of the Company in writing, during the time the Executive isemployed by the Company or at any time thereafter, the Executive shall not use for his personal purposes nor divulge, furnish, or make accessible to anyone or usein any way (other than in the ordinary course of the business of the Company) any confidential or secret information or knowledge of the Company, whetherdeveloped by himself or by others. Such confidential and/or secret information encompassed by this Section 6 includes, but is not limited to, the Company’scustomer and supplier lists, business plans, software, systems, and financial, marketing, and personnel information. The Executive agrees to refrain from any acts oromissions that would reduce the value of any confidential or secret knowledge or information to the Company, both during his employment hereunder and at anytime after the termination of his employment. The Executive’s obligations of confidentiality under this Section 6 shall not apply to any knowledge or information thatis now published publicly or that subsequently becomes generally publicly known, other than as a direct or indirect result of a breach of this Agreement by theExecutive.7. NONCOMPETITION: NONSOLICITATION; INVENTIONS.7.1 NonCompetition. During the employment of the Executive under this Agreement and for a period of six (6) months after termination of suchemployment, the Executive shall not at any time compete on his own behalf, or on behalf of any other person or entity, with the Company or any of its affiliateswithin all territories in which the Company does business with respect to the business of the Company or any of its affiliates as such business shall be conductedon the date hereof or during the employment of the Executive under this Agreement. The ownership by the Executive of not more than 5% of a corporation,partnership or other enterprise shall not constitute a violation hereof.7.2 NonSolicitation. During the employment of the Executive under this Agreement and thereafter Executive shall not at any time (i) solicit or induce, onhis own behalf or on behalf of any other person or entity, any employee of the Company or any of its affiliates to leave the employ of the Company or any of itsaffiliates; or (ii) solicit or induce, on his own behalf or on behalf of any other person or entity, any customer or Prospective Customer of the Company or any of theirrespective affiliates to reduce its business with the Company or any of its affiliates. For the purposes of this Agreement, “Prospective Customer” shall mean anyindividual, corporation, trust or other business entity which has either (a) entered into a nondisclosure agreement with the Company or any Company subsidiary oraffiliate or (b) has within the preceding 12 months received a currently pending and not rejected written proposal in reasonable detail from the Company or any ofthe Company’s subsidiary or affiliate.7.3 Inventions and Patents. The Company shall be entitled to the sole benefit and exclusive ownership of any inventions or improvements in products,processes, or other things that may be made or discovered by Executive while he is in the service of the Company, and all patents for the same. During the Term,Executive shall do all acts necessary or required by the Company to give effect to this section and, following the Term, Executive shall do all acts reasonablynecessary or required by the Company to give effect to this section. In all cases, the Company shall pay all costs and fees associated with such acts by Executive.7.4 Return of Property. The Executive agrees that all property in the Executive’s possession that he obtains or is assigned in the course of his employmentwith the Company, including, without limitation, all documents, reports, manuals, memoranda, customer lists, credit cards, keys, access cards, and all other propertyrelating in any way to the business of the Company, is the exclusive property of the Company, even if the Executive authored, created, or assisted in authoring orcreating such property. The Executive shall return to the Company all such property immediately upon termination of employment or at such earlier time as theCompany may request.7.5Court Ordered Revisions.If any portion of this Section 7 is found by a court of competent jurisdiction to be invalid or unenforceable, but would be validand enforceable if modified, this Section 7 shall apply with such modifications necessary to make this Section 7 valid and enforceable. Any portion of this Section 7not required to be so modified shall remain in full force and effect and not be affected thereby.7.6 Specific Performance. The Executive acknowledges that the remedy at law for any breach of any of the provisions of Section 7 will be inadequate, andthat the Company shall be entitled, in addition to any remedy at law or in equity, to preliminary and permanent injunctive relief and specific performance.38. MISCELLANEOUS.8.1 Indemnification. The Company and each of its subsidiaries shall, to the maximum extent provided under applicable law, indemnify and hold Executiveharmless from and against any expenses, including reasonable attorney’s fees, judgments, fines, settlements and other legally permissible amounts (“Losses”),incurred in connection with any proceeding arising out of, or related to, Executive’s employment by the Company, other than any such Losses incurred as a result ofExecutive’s negligence or willful misconduct. The Company shall, or shall cause a subsidiary thereof to, advance to Executive any expenses, including attorney’sfees and costs of settlement, incurred in defending any such proceeding to the maximum extent permitted by applicable law. Such costs and expenses incurred byExecutive in defense of any such proceeding shall be paid by the Company or applicable subsidiary in advance of the final disposition of such proceeding promptlyupon receipt by the Company of (a) written request for payment; (b) appropriate documentation evidencing the incurrence, amount and nature of the costs andexpenses for which payment is being sought; and (c) an undertaking adequate under applicable law made by or on behalf of Executive to repay the amounts soadvanced if it shall ultimately be determined pursuant to any nonappealable judgment or settlement that Executive is not entitled to be indemnified by the Companyor any subsidiary thereof. The Company will provide Executive with coverage under all directors and officers liability insurance policies that it has in effect duringthe Term, with no deductible to Executive. 8.2 Applicable Law. Except as may be otherwise provided herein, this Agreement shall be governed by and construed in accordance with the laws ofChina, applied without reference to principles of conflict of laws. Any dispute arising from or in connection with this Agreement shall be submitted to ShanghaiInternational Arbitration Center (the “Center”) for arbitration under the then effective rules of the Center. The arbitration award shall be the sole, binding, exclusiveand final remedy for resolving any dispute between the parties.8.3 Amendments. This Agreement may not be amended or modified otherwise than by a written agreement executed by the parties hereto or their respectivesuccessors or legal representatives.8.4 Notices. All notices and other communications hereunder shall be in writing and shall be given by handdelivery to the other party, by an internationalmail courier, or by registered or certified mail, return receipt requested, postage prepaid, addressed as follows:If to the Executive:Jie Yu________________________________________If to the Company:______________________________________Or to such other address as either party shall have furnished to the other in writing in accordance herewith. Notices and communications shall be effective whendelivered to the addressee.8.5 Withholding. The Company may withhold from any amounts payable under the Agreement, such federal, state and local income, unemployment, socialsecurity and similar employment related taxes and similar employment related withholdings as shall be required to be withheld pursuant to any applicable law orregulation.8.6 Severability. The invalidity or unenforceability of any provision of this Agreement shall not affect the validity or enforceability of any other provision ofthis Agreement and any such provision which is not valid or enforceable in whole shall be enforced to the maximum extent permitted by law.48.7 Captions. The captions of this Agreement are not part of the provisions and shall have no force or effect.8.8 Entire Agreement. This Agreement contains the entire agreement among the parties concerning the subject matter hereof and supersedes all prioragreements, understandings, discussions, negotiations and undertakings, whether written or oral, between the parties with respect thereto.8.9 Survival. The respective rights and obligations of the parties hereunder shall survive any termination of this Agreement or the Executive’s employmenthereunder to the extent necessary to the intended preservation of such rights and obligations.8.10 Waiver. Either Party's failure to enforce any provision or provisions of this Agreement shall not in any way be construed as a waiver of any suchprovision or provisions, or prevent that party thereafter from enforcing each and every other provision of this Agreement.8.11 Successors. This Agreement is personal to Executive and, without the prior express written consent of the Company, shall not be assignable byExecutive. This Agreement shall inure to the benefit of and be enforceable by Executive’s estate, heirs, beneficiaries, and/or legal representatives. This Agreementshall inure to the benefit of and be binding upon the Company and its successors and assigns.8.12 Joint Efforts/Counterparts. Preparation of this Agreement shall be deemed to be the joint effort of the parties hereto and shall not be construed moreseverely against any party. This Agreement may be signed in two or more counterparts, each of which shall be deemed an original and all of which together shallconstitute one and the same instrument.8.13 Representation by Counsel. Each Party hereby represents that it has had the opportunity to be represented by legal counsel of its choice inconnection with the negotiation and execution of this Agreement.IN WITNESS WHEREOF, the parties have executed this Agreement as of the day and year first above written.EXECUTIVE:LUOKUNG TECHNOLOGY CORP./s/ Jie Yu/s/ Xuesong SongJie YuXuesong SongChief Executive Officer5EX12.1 13 f20f2017ex121_luokung.htm CERTIFICATIONExhibit 12.1Certification by the Chief Executive OfficerPursuant to Section 302 of the SarbanesOxley Act of 2002I, Xuesong Song, the Chief Executive Officer of Luokung Technology Corp. (the “Company”), certify that:1.I have reviewed this transition report on Form 20F of the Company;2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statementsmade, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financialcondition, results of operations and cash flows of the Company as of, and for, the periods presented in this report;4.The Company’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange ActRules 13a15(e) and 15d15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a15(f) and 15d15(f)) for the Company andhave:(a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure thatmaterial information relating to the Company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during theperiod in which this report is being prepared;(b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, toprovide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance withgenerally accepted accounting principles;(c)Evaluated the effectiveness of the Company’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of thedisclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and(d)Disclosed in this report any change in the Company’s internal control over financial reporting that occurred during the period covered by the transition reportthat has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting; and5.The Company’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Company’sauditors and the audit committee of the Company’s board of directors (or persons performing the equivalent functions):(a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely toadversely affect the Company’s ability to record, process, summarize and report financial information; and(b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the Company’s internal control over financialreporting.Date: October 12, 2018By:/s/ Xuesong SongXuesong SongChief Executive Officer(principal executive officer)EX12.2 14 f20f2017ex122_luokung.htm CERTIFICATIONExhibit 12.2Certification by the Chief Financial OfficerPursuant to Section 302 of the SarbanesOxley Act of 2002I, Jie Yu, the Chief Financial Officer of Luokung Technology Corp. (the “Company”), certify that:1.I have reviewed this transition report on Form 20F of the Company;2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statementsmade, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financialcondition, results of operations and cash flows of the Company as of, and for, the periods presented in this report;4.The Company’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange ActRules 13a15(e) and 15d15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a15(f) and 15d15(f)) for the Company andhave:(a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure thatmaterial information relating to the Company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during theperiod in which this report is being prepared;(b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, toprovide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance withgenerally accepted accounting principles;(c)Evaluated the effectiveness of the Company’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of thedisclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and(d)Disclosed in this report any change in the Company’s internal control over financial reporting that occurred during the period covered by the transition reportthat has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting; and5.The Company’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Company’sauditors and the audit committee of the Company’s board of directors (or persons performing the equivalent functions):(a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely toadversely affect the Company’s ability to record, process, summarize and report financial information; and(b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the Company’s internal control over financialreporting.Date: October 12, 2018By:/s/ Jie YuJie YuChief Financial Officer(principal financial officer and principal accounting officer)EX13.1 15 f20f2017ex131_luokung.htm CERTIFICATIONExhibit 13.1Certification by the Chief Executive OfficerPursuant to Section 906 of the SarbanesOxley Act of 2002In connection with the Transition report on Form 20F of Luokung Technology Corp. (the “Company”) for the year ended December 31, 2017 as filed withthe Securities and Exchange Commission on the date hereof (the “Report”), I, Xuesong Song, Chairman and Chief Executive Officer of the Company, certify,pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the SarbanesOxley Act of 2002, that to my knowledge:(1)The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and(2)The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.Date: October 12, 2018By:/s/ Xuesong SongXuesong SongChief Executive Officer(principal executive officer)EX13.2 16 f20f2017ex132_luokung.htm CERTIFICATIONExhibit 13.2Certification by the Chief Financial OfficerPursuant to Section 906 of the SarbanesOxley Act of 2002In connection with the Transition report on Form 20F of Luokung Technology Corp. (the “Company”) for the year ended December 31, 2017 as filed withthe Securities and Exchange Commission on the date hereof (the “Report”), I, Jie Yu, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. Section1350, as adopted pursuant to Section 906 of the SarbanesOxley Act of 2002, that to my knowledge:(1)The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and(2)The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.Date: October 12, 2018By:/s/ Jie YuJie YuChief Financial Officer(principal financial officer and principal accounting officer)地址：Address:.b)陈蔚力Chen Weili地址：Address:c)王平Wang Ping地址：Address:17秘密文件 Strictly Confidentiald)刘东来Liu Donglai地址：Address:丙方：北京中传视讯科技有限公司Party C: Beijing Mobile Vision Technology Co., Ltd.地址：北京市朝阳区光华路9号SOHO3QLAB32Address: LAB32, SOHO3Q, No 9, Guanghua Road, Chaoyang District, Beijing.收件人：宋雪松Attn.: Song Xuesong14.3任何一方可按本条规定随时给其他各方发出通知来改变其接收通知的地址。Any Party may at any time change its address for notices by a notice delivered to the other Parties in accordance with the terms hereof.15.分割性Severability如果本协议有任何一条或多条规定根据任何法律或法规在任何方面被裁定为无效、不合法或不可执行，本协议其余规定的有效性、合法性或可执行性不应因此在任何方面受到影响或损害。各方应通过诚意磋商，争取以法律许可以及各方期望的最大限度内有效的规定取代那些无效、不合法或不可执行的规定，而该等有效的规定所产生的经济效果应尽可能与那些无效、不合法或不能强制执行的规定所产生的经济效果相似。In the event that one or several of the provisions of this Contract are found to be invalid, illegal or unenforceable in any aspect in accordance with any laws orregulations, the validity, legality or enforceability of the remaining provisions of this Contract shall not be affected or compromised in any respect. The Partiesshall strive in good faith to replace such invalid, illegal or unenforceable provisions with effective provisions that accomplish to the greatest extent permittedby law and the intentions of the Parties, and the economic effect of such effective provisions shall be as close as possible to the economic effect of thoseinvalid, illegal or unenforceable provisions.18秘密文件 Strictly Confidential16.附件Attachments本协议所列附件，为本协议不可分割的组成部分。The attachments set forth herein shall be an integral part of this Agreement.17.生效Effectiveness17.1本协议的任何修改、补充或变更，均须采用书面形式，经各方签字或盖章并按规定办理政府登记（如需）后生效。Any amendments, changes and supplements to this Agreement shall be in writing and shall become effective upon completion of the governmentalfiling procedures (if applicable) after the affixation of the signatures or seals of the Parties.17.2本协议以中文和英文书就，一式六份，质权人、所有出质人和丙方各持一份，具有同等效力；中英文版本如有冲突，应以中文版为准。This Agreement is written in Chinese and English in six copies. Each Pledgors, Pledgee and Party C shall hold one copy respectively. Each copy of thisAgreement shall have equal validity. In case there is any conflict between the Chinese version and the English version, the Chinese version shall prevail.本页其余部分刻意留为空白The Remainder of this page is intentionally left blank19秘密文件 Strictly Confidential有鉴于此，各方已使得经其授权的代表于文首所述日期签署了本股权质押协议并即生效，以昭信守。IN WITNESS WHEREOF, the Parties have caused their authorized representatives to execute this Equity Interest Pledge Agreement as of the date first abovewritten.甲方：中传天下信息科技（深圳）有限公司（盖章）Party A: Zhongchuan Tianxia Information Technology (Shenzhen) Co., Ltd. (Seal)签字：By:/s/ Hong Ting姓名：洪婷Name: Hong Ting职务：总经理Title: General Manager秘密文件 Strictly Confidential有鉴于此，各方已使得经其授权的代表于文首所述日期签署了本股权质押协议并即生效，以昭信守。IN WITNESS WHEREOF, the Parties have caused their authorized representatives to execute this Equity Interest Pledge Agreement as of the date first abovewritten.乙方：Party B:宋雪松Song Xuesong签署：By:/s/ Song Xuesong秘密文件 Strictly Confidential有鉴于此，各方已使得经其授权的代表于文首所述日期签署了本股权质押协议并即生效，以昭信守。IN WITNESS WHEREOF, the Parties have caused their authorized representatives to execute this Equity Interest Pledge Agreement as of the date first abovewritten.乙方：Party B:陈蔚力Chen Weili签字：By:/s/ Chen Weili秘密文件 Strictly Confidential有鉴于此，各方已使得经其授权的代表于文首所述日期签署了本股权质押协议并即生效，以昭信守。IN WITNESS WHEREOF, the Parties have caused their authorized representatives to execute this Equity Interest Pledge Agreement as of the date first abovewritten.乙方：Party B:王平Wang Ping签字：By:/s/ Wang Ping秘密文件 Strictly Confidential有鉴于此，各方已使得经其授权的代表于文首所述日期签署了本股权质押协议并即生效，以昭信守。IN WITNESS WHEREOF, the Parties have caused their authorized representatives to execute this Equity Interest Pledge Agreement as of the date first abovewritten.乙方：Party B:刘东来Liu Donglai签字：By:/s/ Liu Donglai秘密文件 Strictly Confidential有鉴于此，各方已使得经其授权的代表于文首所述日期签署了本股权质押协议并即生效，以昭信守。IN WITNESS WHEREOF, the Parties have caused their authorized representatives to execute this Equity Interest Pledge Agreement as of the date first abovewritten.丙方：北京中传视讯科技有限公司（盖章）Party B: Beijing Mobile Vision Technology Co., Ltd. (Seal)签字：By:/s/ Song Xuesong姓名：宋雪松Name: Song Xuesong职务：董事长Title: Chairman of the Board秘密文件 Strictly Confidential附件：Attachments:1.北京中传视讯科技有限公司股东名册；Shareholders' Register of Beijing Mobile Vision Technology Co., Ltd.;2.北京中传视讯科技有限公司的出资证明书；The Capital Contribution Certificate of Beijing Mobile Vision Technology Co., Ltd.;3.独家业务合作协议。Exclusive Business Cooperation Agreement.秘密文件 Strictly ConfidentialEX4.20 6 f20f2017ex420_luokung.htm POWER OF ATTORNEY BY WEILI CHEN, DATED AUGUST 31, 2015Exhibit 4.20授权委托书Power of Attorney本人陈蔚力，持有中华人民共和国身份证（号码：*************** 516），通讯地址为广东省，系拥有北京中传视讯科技有限公司（“中传视讯”）14.0848%股权（“相关股权”）的股东，就相关股权，特此不可撤销地授权中传天下信息科技（深圳）有限公司（“深圳中传天下”）在本授权委托书的有效期内行使如下权利：The undersigned, Chen Weili, a person with the PRC identification card number of ***************516, with address at: Guangdong, and a holder of14.0848% of the entire registered capital ("Shares") in Beijing Mobile Vision Technology Co., Ltd. ("Mobile Vision"), hereby irrevocably authorize ZhongchuanTianxia Information Technology (Shenzhen) Co., Ltd. ("WFOE") to exercise the following rights relating to Shares during the term of this Power of Attorney:授权深圳中传天下作为本人唯一的排他的代理人就有关相关股权的事宜全权代表本人行使包括但不限于如下的权利：1）参加中传视讯的股东会；2）行使按照法律和中传视讯章程规定本人所享有的全部股东权利和股东表决权，包括但不限于出售或转让或质押或处置相关股权的全部或任何一部分；以及3）作为本人的授权代表指定和任命中传视讯的法定代表人、董事和/或执行董事、监事、经理以及其他高级管理人员等。但中传视讯利用该等授权做出违反中华人民共和国法律的决定无效。WFOE is hereby authorized to act on behalf of myself as my exclusive agent and attorney with respect to all matters concerning My Shareholding, includingwithout limitation: 1) attending shareholders' meetings of Mobile Vision; 2) exercising all the shareholder's rights and shareholder's voting rights I am entitled tounder the laws of China and Articles of Association of Mobile Vision, including but not limited to the sale or transfer or pledge or disposition of My Shareholding inpart or in whole; and 3) designating and appointing on behalf of myself the legal representative, director and/or executive director, supervisor, manager and othersenior management members of Mobile Vision. However, the decision made by Mobile Vision taking advantage of the power of attorney which is against the PRClaws shall be null and void.1深圳中传天下将有权在授权范围内代表本人签署独家购买权协议（本人应要求作为协议方）中约定的转让协议，如期履行本人作为协议一方的与本授权委托书同日签署的股权质押协议和独家购买权协议，该权利的行使将不对本授权形成任何限制。Without limiting the generality of the powers granted hereunder, WFOE shall have the power and authority under this Power of Attorney to execute theTransfer Contracts stipulated in Exclusive Option Agreement, to which I am required to be a party, on behalf of myself, and to effect the terms of the Share PledgeAgreement and Exclusive Option Agreement, both dated the date hereof, to which I am a party.深圳中传天下就相关股权的一切行为均视为本人的行为，签署的一切文件均视为本人签署，本人会予以承认。All the actions associated with Shares conducted by WFOE shall be deemed as my own actions, and all the documents related to Shares executed by WFOEshall be deemed to be executed by me. I hereby acknowledge and ratify those actions and/or documents by the WFOE.深圳中传天下有转委托权，可以就上述事项的办理自行再委托其他人或单位而不必事先通知本人或获得本人的同意。WFOE is entitled to reauthorize or assign its rights related to the aforesaid matters to any other person or entity at its own discretion and without giving priornotice to me or obtaining my consent.在本人为中传视讯的股东期间，本授权委托书不可撤销并持续有效，自授权委托书签署之日起算。This Power of Attorney is coupled with an interest and shall be irrevocable and continuously valid from the date of execution of this Power of Attorney, solong as I am a shareholder of Mobile Vision.本授权委托书期间，本人特此放弃已经通过本授权委托书授权给深圳中传天下的与相关股权有关的所有权利，不再自行行使该等权利。During the term of this Power of Attorney, I hereby waive all the rights associated with Shares, which have been authorized to WFOE through this Power ofAttorney, and shall not exercise such rights by myself.本授权委托书以中文和英文书就，中英文版本如有冲突，应以中文版为准。This Power of Attorney is written in Chinese and English; in case there is any conflict between the Chinese version and the English version, the Chineseversion shall prevail.陈蔚力Chen Weili签署：By:日期：年月日Date:2EX4.21 7 f20f2017ex421_luokung.htm POWER OF ATTORNEY BY PING WANG, DATED AUGUST 31, 2015Exhibit 4.21授权委托书Power of Attorney本人王平，持有中华人民共和国身份证（号码：***************01x），通讯地址为广东省，系拥有北京中传视讯科技有限公司（“中传视讯”）19.9872%股权（“相关股权”）的股东，就相关股权，特此不可撤销地授权中传天下信息科技（深圳）有限公司（“深圳中传天下”）在本授权委托书的有效期内行使如下权利：The undersigned, Wang Ping, a person with the PRC identification card number of ***************01x, with address at Guangdong, and a holder of19.9872% of the entire registered capital (“Shares”) in Beijing Mobile Vision Technology Co., Ltd. (“Mobile Vision”), hereby irrevocably authorize ZhongchuanTianxia Information Technology (Shenzhen) Co., Ltd. (“WFOE”) to exercise the following rights relating to Shares during the term of this Power of Attorney:授权深圳中传天下作为本人唯一的排他的代理人就有关相关股权的事宜全权代表本人行使包括但不限于如下的权利：1）参加中传视讯的股东会；2）行使按照法律和中传视讯章程规定本人所享有的全部股东权利和股东表决权，包括但不限于出售或转让或质押或处置相关股权的全部或任何一部分；以及3）作为本人的授权代表指定和任命中传视讯的法定代表人、董事和/或执行董事、监事、经理以及其他高级管理人员等。但中传视讯利用该等授权做出违反中华人民共和国法律的决定无效。WFOE is hereby authorized to act on behalf of myself as my exclusive agent and attorney with respect to all matters concerning My Shareholding, includingwithout limitation: 1) attending shareholders’ meetings of Mobile Vision; 2) exercising all the shareholder’s rights and shareholder’s voting rights I am entitled tounder the laws of China and Articles of Association of Mobile Vision, including but not limited to the sale or transfer or pledge or disposition of My Shareholding inpart or in whole; and 3) designating and appointing on behalf of myself the legal representative, director and/or executive director, supervisor, manager and othersenior management members of Mobile Vision. However, the decision made by Mobile Vision taking advantage of the power of attorney which is against the PRClaws shall be null and void.1深圳中传天下将有权在授权范围内代表本人签署独家购买权协议（本人应要求作为协议方）中约定的转让协议，如期履行本人作为协议一方的与本授权委托书同日签署的股权质押协议和独家购买权协议，该权利的行使将不对本授权形成任何限制。Without limiting the generality of the powers granted hereunder, WFOE shall have the power and authority under this Power of Attorney to execute theTransfer Contracts stipulated in Exclusive Option Agreement, to which I am required to be a party, on behalf of myself, and to effect the terms of the Share PledgeAgreement and Exclusive Option Agreement, both dated the date hereof, to which I am a party.深圳中传天下就相关股权的一切行为均视为本人的行为，签署的一切文件均视为本人签署，本人会予以承认。All the actions associated with Shares conducted by WFOE shall be deemed as my own actions, and all the documents related to Shares executed by WFOEshall be deemed to be executed by me. I hereby acknowledge and ratify those actions and/or documents by the WFOE.深圳中传天下有转委托权，可以就上述事项的办理自行再委托其他人或单位而不必事先通知本人或获得本人的同意。WFOE is entitled to reauthorize or assign its rights related to the aforesaid matters to any other person or entity at its own discretion and without giving priornotice to me or obtaining my consent.在本人为中传视讯的股东期间，本授权委托书不可撤销并持续有效，自授权委托书签署之日起算。This Power of Attorney is coupled with an interest and shall be irrevocable and continuously valid from the date of execution of this Power of Attorney, solong as I am a shareholder of Mobile Vision.本授权委托书期间，本人特此放弃已经通过本授权委托书授权给深圳中传天下的与相关股权有关的所有权利，不再自行行使该等权利。During the term of this Power of Attorney, I hereby waive all the rights associated with Shares, which have been authorized to WFOE through this Power ofAttorney, and shall not exercise such rights by myself.本授权委托书以中文和英文书就，中英文版本如有冲突，应以中文版为准。This Power of Attorney is written in Chinese and English; in case there is any conflict between the Chinese version and the English version, the Chineseversion shall prevail.王平Wang Ping签署：By:日期：年月日Date:2EX4.22 8 f20f2017ex422_luokung.htm POWER OF ATTORNEY BY DONGLAI LIU, DATED AUGUST 31, 2015Exhibit 4.22授权委托书Power of Attorney本人刘东来，持有中华人民共和国身份证（号码：***************912），通讯地址为: ，系拥有北京中传视讯科技有限公司（“中传视讯”）4.1035%股权（“相关股权”）的股东，就相关股权，特此不可撤销地授权中传天下信息科技（深圳）有限公司（“深圳中传天下”）在本授权委托书的有效期内行使如下权利：The undersigned, Liu Donglai, a person with the PRC identification card number of ***************912, with address at: , and a holder of 4.1035% of theentire registered capital (“Shares”) in Beijing Mobile Vision Technology Co., Ltd. (“Mobile Vision”), hereby irrevocably authorize Zhongchuan Tianxia InformationTechnology (Shenzhen) Co., Ltd. (“WFOE”) to exercise the following rights relating to Shares during the term of this Power of Attorney:授权深圳中传天下作为本人唯一的排他的代理人就有关相关股权的事宜全权代表本人行使包括但不限于如下的权利：1）参加中传视讯的股东会；2）行使按照法律和中传视讯章程规定本人所享有的全部股东权利和股东表决权，包括但不限于出售或转让或质押或处置相关股权的全部或任何一部分；以及3）作为本人的授权代表指定和任命中传视讯的法定代表人、董事和/或执行董事、监事、经理以及其他高级管理人员等。但中传视讯利用该等授权做出违反中华人民共和国法律的决定无效。WFOE is hereby authorized to act on behalf of myself as my exclusive agent and attorney with respect to all matters concerning My Shareholding, includingwithout limitation: 1) attending shareholders’ meetings of Mobile Vision; 2) exercising all the shareholder’s rights and shareholder’s voting rights I am entitled tounder the laws of China and Articles of Association of Mobile Vision, including but not limited to the sale or transfer or pledge or disposition of My Shareholding inpart or in whole; and 3) designating and appointing on behalf of myself the legal representative, director and/or executive director, supervisor, manager and othersenior management members of Mobile Vision. However, the decision made by Mobile Vision taking advantage of the power of attorney which is against the PRClaws shall be null and void.1深圳中传天下将有权在授权范围内代表本人签署独家购买权协议（本人应要求作为协议方）中约定的转让协议，如期履行本人作为协议一方的与本授权委托书同日签署的股权质押协议和独家购买权协议，该权利的行使将不对本授权形成任何限制。Without limiting the generality of the powers granted hereunder, WFOE shall have the power and authority under this Power of Attorney to execute theTransfer Contracts stipulated in Exclusive Option Agreement, to which I am required to be a party, on behalf of myself, and to effect the terms of the Share PledgeAgreement and Exclusive Option Agreement, both dated the date hereof, to which I am a party.深圳中传天下就相关股权的一切行为均视为本人的行为，签署的一切文件均视为本人签署，本人会予以承认。All the actions associated with Shares conducted by WFOE shall be deemed as my own actions, and all the documents related to Shares executed by WFOEshall be deemed to be executed by me. I hereby acknowledge and ratify those actions and/or documents by the WFOE.深圳中传天下有转委托权，可以就上述事项的办理自行再委托其他人或单位而不必事先通知本人或获得本人的同意。WFOE is entitled to reauthorize or assign its rights related to the aforesaid matters to any other person or entity at its own discretion and without giving priornotice to me or obtaining my consent.在本人为中传视讯的股东期间，本授权委托书不可撤销并持续有效，自授权委托书签署之日起算。This Power of Attorney is coupled with an interest and shall be irrevocable and continuously valid from the date of execution of this Power of Attorney, solong as I am a shareholder of Mobile Vision.本授权委托书期间，本人特此放弃已经通过本授权委托书授权给深圳中传天下的与相关股权有关的所有权利，不再自行行使该等权利。During the term of this Power of Attorney, I hereby waive all the rights associated with Shares, which have been authorized to WFOE through this Power ofAttorney, and shall not exercise such rights by myself.本授权委托书以中文和英文书就，中英文版本如有冲突，应以中文版为准。This Power of Attorney is written in Chinese and English; in case there is any conflict between the Chinese version and the English version, the Chineseversion shall prevail.刘东来Liu Donglai签署：By:日期：年月日Date:2EX4.23 9 f20f2017ex423_luokung.htm POWER OF ATTORNEY BY XUESONG SONG, DATED AUGUST 31, 2015Exhibit 4.23授权委托书Power of Attorney本人宋雪松，持有中华人民共和国身份证（号码：***************417），通讯地址为，系拥有北京中传视讯科技有限公司（“中传视讯”）61.8245%股权（“相关股权”）的股东，就相关股权，特此不可撤销地授权中传天下信息科技（深圳）有限公司（“深圳中传天下”）在本授权委托书的有效期内行使如下权利：The undersigned, Song Xuesong, a person with the PRC identification card number of ***************417, with address at , and a holder of 61.8245% ofthe entire registered capital (“Shares”) in Beijing Mobile Vision Technology Co., Ltd. (“Mobile Vision”), hereby irrevocably authorize Zhongchuan TianxiaInformation Technology (Shenzhen) Co., Ltd. (“WFOE”) to exercise the following rights relating to Shares during the term of this Power of Attorney:授权深圳中传天下作为本人唯一的排他的代理人就有关相关股权的事宜全权代表本人行使包括但不限于如下的权利：1）参加中传视讯的股东会；2）行使按照法律和中传视讯章程规定本人所享有的全部股东权利和股东表决权，包括但不限于出售或转让或质押或处置相关股权的全部或任何一部分；以及3）作为本人的授权代表指定和任命中传视讯的法定代表人、董事和/或执行董事、监事、经理以及其他高级管理人员等。但中传视讯利用该等授权做出违反中华人民共和国法律的决定无效。WFOE is hereby authorized to act on behalf of myself as my exclusive agent and attorney with respect to all matters concerning My Shareholding, includingwithout limitation: 1) attending shareholders’ meetings of Mobile Vision; 2) exercising all the shareholder’s rights and shareholder’s voting rights I am entitled tounder the laws of China and Articles of Association of Mobile Vision, including but not limited to the sale or transfer or pledge or disposition of My Shareholding inpart or in whole; and 3) designating and appointing on behalf of myself the legal representative, director and/or executive director, supervisor, manager and othersenior management members of Mobile Vision. However, the decision made by Mobile Vision taking advantage of the power of attorney which is against the PRClaws shall be null and void.1深圳中传天下将有权在授权范围内代表本人签署独家购买权协议（本人应要求作为协议方）中约定的转让协议，如期履行本人作为协议一方的与本授权委托书同日签署的股权质押协议和独家购买权协议，该权利的行使将不对本授权形成任何限制。Without limiting the generality of the powers granted hereunder, WFOE shall have the power and authority under this Power of Attorney to execute theTransfer Contracts stipulated in Exclusive Option Agreement, to which I am required to be a party, on behalf of myself, and to effect the terms of the Share PledgeAgreement and Exclusive Option Agreement, both dated the date hereof, to which I am a party.深圳中传天下就相关股权的一切行为均视为本人的行为，签署的一切文件均视为本人签署，本人会予以承认。All the actions associated with Shares conducted by WFOE shall be deemed as my own actions, and all the documents related to Shares executed by WFOEshall be deemed to be executed by me. I hereby acknowledge and ratify those actions and/or documents by the WFOE.深圳中传天下有转委托权，可以就上述事项的办理自行再委托其他人或单位而不必事先通知本人或获得本人的同意。WFOE is entitled to reauthorize or assign its rights related to the aforesaid matters to any other person or entity at its own discretion and without giving priornotice to me or obtaining my consent.在本人为中传视讯的股东期间，本授权委托书不可撤销并持续有效，自授权委托书签署之日起算。This Power of Attorney is coupled with an interest and shall be irrevocable and continuously valid from the date of execution of this Power of Attorney, solong as I am a shareholder of Mobile Vision.本授权委托书期间，本人特此放弃已经通过本授权委托书授权给深圳中传天下的与相关股权有关的所有权利，不再自行行使该等权利。During the term of this Power of Attorney, I hereby waive all the rights associated with Shares, which have been authorized to WFOE through this Power ofAttorney, and shall not exercise such rights by myself.本授权委托书以中文和英文书就，中英文版本如有冲突，应以中文版为准。This Power of Attorney is written in Chinese and English; in case there is any conflict between the Chinese version and the English version, the Chineseversion shall prevail.宋雪松Song Xuesong签署：By:日期：年月日Date:2EX8.1 10 f20f2017ex81_luokung.htm LIST OF SUBSIDIARIES AND CONSOLIDATED VARIABLE INTEREST ENTITIESExhibit 8.1List of Subsidiaries of the CompanyName of EntityJurisdiction of Incorporation/OrganizationLK Technology Ltd.British Virgin IslandsTopsky Infotech Holdings Pte Ltd.SingaporeSuperengine Holdings LimitedBritish Virgin IslandsMMB LimitedHong KongMobile Media (China Limited)Hong KongZhong Chuan Tian Xia Information and Technology (Beijing) LimitedBeijing, PRCZhong Chuan Xia Information and Technology (Shenzhen) LimitedShenzhen, PRCBeijing Zhong Chuan Shi Xun Technology Limited (VIE Entity)Beijing, PRCJiangsu Zhong Chuan Rui You Information and Technology Limited (VIE Entity)Jiangsu, PRCHuoerguosi Luokuang Information and Technology Limited (VIE Entity)Huoerguosi, PRCShenzhen Jiu Zhou Shi Dai Digital Technology LimitedShenzhen, PRCEX10.1 11 f20f2017ex101_luokung.htm EMPLOYMENT AGREEMENT, DATED AUGUST 19, 2018, BETWEEN LUOKUNG TECHNOLOGY CORP. AND XUESONGSONGExhibit 10.1EMPLOYMENT AGREEMENTThis EMPLOYMENT AGREEMENT (the “Agreement”) is made and entered into as of this 19 day of August, 2018 (the “Effective Date”), by and between LuokungTechnology Corp., a British Virgin Islands corporation (the “Company”) and Xuesong Song (the “Executive”), a Chinese citizen.WITNESSETH:WHEREAS, the parties desire to enter into this Agreement setting forth the terms and conditions of the employment relationship between the Executiveand the Company.NOW, THEREFORE, in consideration of the foregoing premises and the mutual covenants and agreements contained herein, the parties hereto agree asfollows:1. EMPLOYMENT.1.1 Agreement to Employ. The Company hereby agrees to employ Executive, and Executive hereby agrees to serve, subject to the provisions of thisAgreement, as an officer and employee of the Company.1.2 Duties and Schedule. Executive shall serve as the Company’s Chief Executive Officer (“CEO”). The responsibilities of the Executive shall be subject tothe bylaws of the Company and determined by the Board of Directors of the Company (the “Board”). The Executive shall report directly to the Board and shall havesuch responsibilities as designated by the Board of the Company to the extent that such responsibilities are not inconsistent with all applicable laws, regulationsand rules. Executive shall devote his best efforts and all of his business time to his position with the Company during the Term.2. TERM OF EMPLOYMENT. Unless Executive’s employment shall sooner terminate pursuant to Section 4, the Company shall employ Executive for a fouryear term commencing on the Effective Date (the “Term”), which Term shall be renewable upon mutual agreement of the Company and the Executive, as approved bythe Board.3. COMPENSATION.3.1 Salary. Executive’s salary during the Term shall be $Nil.3.2 Bonus. At the sole discretion of the Board, or any committee duly designated by the Board and authorized to act thereto, the Executive shall be eligiblefor an annual cash bonus.3.3 Vacation. Executive shall be entitled to 8 days of paid vacation per year. In the event that Executive remains employed by the Company for 3 years ormore, Executive shall be entitled to 12 days of paid vacation.3.4 Business Expenses. Executive shall be reimbursed by the Company for all ordinary and necessary expenses incurred by Executive; provided that theyare incurred and approved in writing in accordance with the Company’s expense policy.3.5 Benefits. During the Term, Executive shall be allowed to participate, on the same basis generally as other employees of the Company, in all generalemployee benefit plans and programs, including improvements or modifications of the same, which may exist as of the Effective Date or thereafter and which aremade available by the Company to all or substantially all of its employees. Such benefits, plans, and programs may include, without limitation, any health, and dentalinsurance or 401K programs, if and when instituted. Any benefit plan currently existing or instituted by the Company after the Effective Date may be altered, changeor discontinued by the Company at its sole discretion and at any time without obligation of any nature to Executive. Except as specifically provided herein, nothingin this Agreement is to be construed or interpreted to increase or alter in any way the rights, participation, coverage, or benefits under such benefit plans orprograms to other than those provided to other employees pursuant to the terms and conditions of such benefit plans and programs. 14. TERMINATION.4.1 Death. This Agreement shall terminate immediately upon the death of Executive, and Executive’s estate or Executive’s legal representative, as the casemay be, shall be entitled to Executive’s accrued and unpaid Salary as of the date of Executive’s death, plus all other compensation and benefits that were vestedthrough the date of Executive’s death.4.2 Disability. In the event of Executive’s Disability, this Agreement shall terminate and Executive shall be entitled to (a) accrued and unpaid Salary andvacation through the first date that a Disability is determined; and (b) all other compensation and benefits that were vested through the first date that a Disabilityhas been determined. “Disability” means the good faith determination of the Board that Executive has become so physically or mentally incapacitated or disabled asto be unable to satisfactorily perform his duties hereunder for a period of ninety (90) consecutive calendar days or for one hundred twenty (120) days in any threehundred sixty (360) day period, such determination based upon a certificate as to such physical or mental disability issued by a licensed physician and/orpsychiatrist (as the case may be) mutually agreed upon by Executive and the Company.4.3 Termination by Company for Cause. The Company may terminate the Executive for Cause and such termination shall take effect upon the receipt byExecutive of the Notice of Termination. Upon the effective date of the termination for Cause, Executive shall be solely entitled to accrued and unpaid Salary throughsuch effective date. “Cause” means: (i) engaging in any act, omission or misconduct that is injurious to the Company or an affiliate; (ii) gross negligence or willfulmisconduct in connection with the performance of duties; (iii) conviction of a criminal offense (other than minor traffic offenses); (iv) fraud, embezzlement ormisappropriation of funds or property of the Company or an affiliate; (v) material breach of any term of any employment or other services, confidentiality, intellectualproperty or noncompetition agreements, if any, between the Executive and the Company or an affiliate; (vi) the entry of an order duly issued by any regulatoryagency (including federal, state and local regulatory agencies and selfregulatory bodies) having jurisdiction over the Company or an affiliate requiring the removalof the Executive from any office held with the Company or prohibiting the Executive from participating in the business or affairs of the Company or any affiliate; or(vii) the revocation or threatened revocation of any of the Company’s or an affiliate’s government licenses, permits or approvals, which is primarily due to theExecutive’s action or inaction and such revocation or threatened revocation would be alleviated or mitigated in any material respect by the termination of theExecutive’s employment or services with the Company or an affiliate. 4.4 Voluntary Termination by Executive. The Executive may voluntarily terminate his employment for any reason and such termination shall take effect 30days after the receipt by Company of the Notice of Termination. Upon the effective date of such termination, Executive shall be entitled to (a) accrued and unpaidSalary and vacation through such termination date; and (b) all other compensation and benefits that were vested through such termination date. In the eventExecutive is terminated without notice, it shall be deemed a termination by the Company for Cause.4.5 Notice of Termination. Any termination of the employment by the Company or the Executive shall be communicated by a notice in accordance withSection 8.4 of this Agreement (the “Notice of Termination”). Such notice shall (a) indicate the specific termination provision in this Agreement relied upon and (b) ifthe termination is for Cause, the date on which the Executive’s employment is to be terminated.4.6 Severance. The Executive shall not be entitled to severance payments upon any termination provided in Section 4 herein.5. EMPLOYEE’S REPRESENTATION. The Executive represents and warrants to the Company that: (a) he is subject to no contractual, fiduciary or otherobligation which may affect the performance of his duties under this Agreement; (b) he has terminated, in accordance with their terms, any contractual obligationwhich may affect his performance under this Agreement; and (c) his employment with the Company will not require him to use or disclose proprietary or confidentialinformation of any other person or entity.26. CONFIDENTIAL INFORMATION Except as permitted or directed by the Board of Directors of the Company in writing, during the time the Executive isemployed by the Company or at any time thereafter, the Executive shall not use for his personal purposes nor divulge, furnish, or make accessible to anyone or usein any way (other than in the ordinary course of the business of the Company) any confidential or secret information or knowledge of the Company, whetherdeveloped by himself or by others. Such confidential and/or secret information encompassed by this Section 6 includes, but is not limited to, the Company’scustomer and supplier lists, business plans, software, systems, and financial, marketing, and personnel information. The Executive agrees to refrain from any acts oromissions that would reduce the value of any confidential or secret knowledge or information to the Company, both during his employment hereunder and at anytime after the termination of his employment. The Executive’s obligations of confidentiality under this Section 6 shall not apply to any knowledge or information thatis now published publicly or that subsequently becomes generally publicly known, other than as a direct or indirect result of a breach of this Agreement by theExecutive.7. NONCOMPETITION: NONSOLICITATION; INVENTIONS.7.1 NonCompetition. During the employment of the Executive under this Agreement and for a period of six (6) months after termination of suchemployment, the Executive shall not at any time compete on his own behalf, or on behalf of any other person or entity, with the Company or any of its affiliateswithin all territories in which the Company does business with respect to the business of the Company or any of its affiliates as such business shall be conductedon the date hereof or during the employment of the Executive under this Agreement. The ownership by the Executive of not more than 5% of a corporation,partnership or other enterprise shall not constitute a violation hereof.7.2 NonSolicitation. During the employment of the Executive under this Agreement and thereafter Executive shall not at any time (i) solicit or induce, onhis own behalf or on behalf of any other person or entity, any employee of the Company or any of its affiliates to leave the employ of the Company or any of itsaffiliates; or (ii) solicit or induce, on his own behalf or on behalf of any other person or entity, any customer or Prospective Customer of the Company or any of theirrespective affiliates to reduce its business with the Company or any of its affiliates. For the purposes of this Agreement, “Prospective Customer” shall mean anyindividual, corporation, trust or other business entity which has either (a) entered into a nondisclosure agreement with the Company or any Company subsidiary oraffiliate or (b) has within the preceding 12 months received a currently pending and not rejected written proposal in reasonable detail from the Company or any ofthe Company’s subsidiary or affiliate.7.3 Inventions and Patents. The Company shall be entitled to the sole benefit and exclusive ownership of any inventions or improvements in products,processes, or other things that may be made or discovered by Executive while he is in the service of the Company, and all patents for the same. During the Term,Executive shall do all acts necessary or required by the Company to give effect to this section and, following the Term, Executive shall do all acts reasonablynecessary or required by the Company to give effect to this section. In all cases, the Company shall pay all costs and fees associated with such acts by Executive.7.4 Return of Property. The Executive agrees that all property in the Executive’s possession that he obtains or is assigned in the course of his employmentwith the Company, including, without limitation, all documents, reports, manuals, memoranda, customer lists, credit cards, keys, access cards, and all other propertyrelating in any way to the business of the Company, is the exclusive property of the Company, even if the Executive authored, created, or assisted in authoring orcreating such property. The Executive shall return to the Company all such property immediately upon termination of employment or at such earlier time as theCompany may request.7.5Court Ordered Revisions.If any portion of this Section 7 is found by a court of competent jurisdiction to be invalid or unenforceable, but would be validand enforceable if modified, this Section 7 shall apply with such modifications necessary to make this Section 7 valid and enforceable. Any portion of this Section 7not required to be so modified shall remain in full force and effect and not be affected thereby.7.6 Specific Performance. The Executive acknowledges that the remedy at law for any breach of any of the provisions of Section 7 will be inadequate, andthat the Company shall be entitled, in addition to any remedy at law or in equity, to preliminary and permanent injunctive relief and specific performance.38. MISCELLANEOUS.8.1 Indemnification. The Company and each of its subsidiaries shall, to the maximum extent provided under applicable law, indemnify and hold Executiveharmless from and against any expenses, including reasonable attorney’s fees, judgments, fines, settlements and other legally permissible amounts (“Losses”),incurred in connection with any proceeding arising out of, or related to, Executive’s employment by the Company, other than any such Losses incurred as a result ofExecutive’s negligence or willful misconduct. The Company shall, or shall cause a subsidiary thereof to, advance to Executive any expenses, including attorney’sfees and costs of settlement, incurred in defending any such proceeding to the maximum extent permitted by applicable law. Such costs and expenses incurred byExecutive in defense of any such proceeding shall be paid by the Company or applicable subsidiary in advance of the final disposition of such proceeding promptlyupon receipt by the Company of (a) written request for payment; (b) appropriate documentation evidencing the incurrence, amount and nature of the costs andexpenses for which payment is being sought; and (c) an undertaking adequate under applicable law made by or on behalf of Executive to repay the amounts soadvanced if it shall ultimately be determined pursuant to any nonappealable judgment or settlement that Executive is not entitled to be indemnified by the Companyor any subsidiary thereof. The Company will provide Executive with coverage under all directors and officers liability insurance policies that it has in effect duringthe Term, with no deductible to Executive. 8.2 Applicable Law. Except as may be otherwise provided herein, this Agreement shall be governed by and construed in accordance with the laws ofChina, applied without reference to principles of conflict of laws. Any dispute arising from or in connection with this Agreement shall be submitted to ShanghaiInternational Arbitration Center (the “Center”) for arbitration under the then effective rules of the Center. The arbitration award shall be the sole, binding, exclusiveand final remedy for resolving any dispute between the parties.8.3 Amendments. This Agreement may not be amended or modified otherwise than by a written agreement executed by the parties hereto or their respectivesuccessors or legal representatives.8.4 Notices. All notices and other communications hereunder shall be in writing and shall be given by handdelivery to the other party, by an internationalmail courier, or by registered or certified mail, return receipt requested, postage prepaid, addressed as follows:If to the Executive:Xuesong Song________________________________________________If to the Company:______________________________________Or to such other address as either party shall have furnished to the other in writing in accordance herewith. Notices and communications shall be effective whendelivered to the addressee.8.5 Withholding. The Company may withhold from any amounts payable under the Agreement, such federal, state and local income, unemployment, socialsecurity and similar employment related taxes and similar employment related withholdings as shall be required to be withheld pursuant to any applicable law orregulation.8.6 Severability. The invalidity or unenforceability of any provision of this Agreement shall not affect the validity or enforceability of any other provision ofthis Agreement and any such provision which is not valid or enforceable in whole shall be enforced to the maximum extent permitted by law.8.7 Captions. The captions of this Agreement are not part of the provisions and shall have no force or effect.48.8 Entire Agreement. This Agreement contains the entire agreement among the parties concerning the subject matter hereof and supersedes all prioragreements, understandings, discussions, negotiations and undertakings, whether written or oral, between the parties with respect thereto.8.9 Survival. The respective rights and obligations of the parties hereunder shall survive any termination of this Agreement or the Executive’s employmenthereunder to the extent necessary to the intended preservation of such rights and obligations.8.10 Waiver. Either Party's failure to enforce any provision or provisions of this Agreement shall not in any way be construed as a waiver of any suchprovision or provisions, or prevent that party thereafter from enforcing each and every other provision of this Agreement.8.11 Successors. This Agreement is personal to Executive and, without the prior express written consent of the Company, shall not be assignable byExecutive. This Agreement shall inure to the benefit of and be enforceable by Executive’s estate, heirs, beneficiaries, and/or legal representatives. This Agreementshall inure to the benefit of and be binding upon the Company and its successors and assigns.8.12 Joint Efforts/Counterparts. Preparation of this Agreement shall be deemed to be the joint effort of the parties hereto and shall not be construed moreseverely against any party. This Agreement may be signed in two or more counterparts, each of which shall be deemed an original and all of which together shallconstitute one and the same instrument.8.13 Representation by Counsel. Each Party hereby represents that it has had the opportunity to be represented by legal counsel of its choice inconnection with the negotiation and execution of this Agreement.IN WITNESS WHEREOF, the parties have executed this Agreement as of the day and year first above written.EXECUTIVE:LUOKUNG TECHNOLOGY CORP./s/ Xuesong Song/s/ Jie YuXuesong SongJie YuChief Financial Officer5EX10.2 12 f20f2017ex102_luokung.htm EMPLOYMENT AGREEMENT, DATED AUGUST 19, 2018, BY AND BETWEEN LUOKUNG TECHNOLOGY CORP. AND JIEYUExhibit 10.2EMPLOYMENT AGREEMENTThis EMPLOYMENT AGREEMENT (the “Agreement”) is made and entered into as of this 19 day of August, 2018 (the “Effective Date”), by and between LuokungTechnology Corp., a British Virgin Islands corporation (the “Company”) and Jie (Jay) Yu (the “Executive”), a Chinese citizen.WITNESSETH:WHEREAS, the parties desire to enter into this Agreement setting forth the terms and conditions of the employment relationship between the Executiveand the Company.NOW, THEREFORE, in consideration of the foregoing premises and the mutual covenants and agreements contained herein, the parties hereto agree asfollows:1. EMPLOYMENT.1.1 Agreement to Employ. The Company hereby agrees to employ Executive, and Executive hereby agrees to serve, subject to the provisions of thisAgreement, as an officer and employee of the Company.1.2 Duties and Schedule. Executive shall serve as the Company’s Chief Financial Officer, and be the Principal Financial Officer and Principal AccountingOfficer of the Company and responsible for all financial matters and management of the Company. The Executive shall report directly to the Company’s ChiefExecutive Officer and Board of Directors (the “Board”) and shall have such responsibilities as designated by the Chief Executive Officer or Board to the extent thatsuch responsibilities are not inconsistent with all applicable laws, regulations and rules. Executive shall devote his best efforts and all of his business time to hisposition with the Company during the Term.2. TERM OF EMPLOYMENT. Unless Executive’s employment shall sooner terminate pursuant to Section 4, the Company shall employ Executive for a fouryear term commencing on the Effective Date (the “Term”), which Term shall be renewable upon mutual agreement of the Company and the Executive, as approved bythe Board.3. COMPENSATION.3.1 Salary. Executive’s salary during the Term shall be RMB700,000 per year (the “Salary”), payable monthly.3.2 Bonus. At the sole discretion of the Board, or any committee duly designated by the Board and authorized to act thereto, the Executive shall be eligiblefor an annual cash bonus.3.3 Vacation. Executive shall be entitled to 8 days of paid vacation per year. In the event that Executive remains employed by the Company for 3 years ormore, Executive shall be entitled to 12 days of paid vacation.3.4 Business Expenses. Executive shall be reimbursed by the Company for all ordinary and necessary expenses incurred by Executive; provided that theyare incurred and approved in writing in accordance with the Company’s expense policy.3.5 Benefits. During the Term, Executive shall be allowed to participate, on the same basis generally as other employees of the Company, in all generalemployee benefit plans and programs, including improvements or modifications of the same, which may exist as of the Effective Date or thereafter and which aremade available by the Company to all or substantially all of its employees. Such benefits, plans, and programs may include, without limitation, any health, and dentalinsurance or 401K programs, if and when instituted. Any benefit plan currently existing or instituted by the Company after the Effective Date may be altered, changeor discontinued by the Company at its sole discretion and at any time without obligation of any nature to Executive. Except as specifically provided herein, nothingin this Agreement is to be construed or interpreted to increase or alter in any way the rights, participation, coverage, or benefits under such benefit plans orprograms to other than those provided to other employees pursuant to the terms and conditions of such benefit plans and programs. 14. TERMINATION.4.1 Death. This Agreement shall terminate immediately upon the death of Executive, and Executive’s estate or Executive’s legal representative, as the casemay be, shall be entitled to Executive’s accrued and unpaid Salary as of the date of Executive’s death, plus all other compensation and benefits that were vestedthrough the date of Executive’s death.4.2 Disability. In the event of Executive’s Disability, this Agreement shall terminate and Executive shall be entitled to (a) accrued and unpaid Salary andvacation through the first date that a Disability is determined; and (b) all other compensation and benefits that were vested through the first date that a Disabilityhas been determined. “Disability” means the good faith determination of the Board that Executive has become so physically or mentally incapacitated or disabled asto be unable to satisfactorily perform his duties hereunder for a period of ninety (90) consecutive calendar days or for one hundred twenty (120) days in any threehundred sixty (360) day period, such determination based upon a certificate as to such physical or mental disability issued by a licensed physician and/orpsychiatrist (as the case may be) mutually agreed upon by Executive and the Company.4.3 Termination by Company for Cause. The Company may terminate the Executive for Cause and such termination shall take effect upon the receipt byExecutive of the Notice of Termination. Upon the effective date of the termination for Cause, Executive shall be solely entitled to accrued and unpaid Salary throughsuch effective date. “Cause” means: (i) engaging in any act, omission or misconduct that is injurious to the Company or an affiliate; (ii) gross negligence or willfulmisconduct in connection with the performance of duties; (iii) conviction of a criminal offense (other than minor traffic offenses); (iv) fraud, embezzlement ormisappropriation of funds or property of the Company or an affiliate; (v) material breach of any term of any employment or other services, confidentiality, intellectualproperty or noncompetition agreements, if any, between the Executive and the Company or an affiliate; (vi) the entry of an order duly issued by any regulatoryagency (including federal, state and local regulatory agencies and selfregulatory bodies) having jurisdiction over the Company or an affiliate requiring the removalof the Executive from any office held with the Company or prohibiting the Executive from participating in the business or affairs of the Company or any affiliate; or(vii) the revocation or threatened revocation of any of the Company’s or an affiliate’s government licenses, permits or approvals, which is primarily due to theExecutive’s action or inaction and such revocation or threatened revocation would be alleviated or mitigated in any material respect by the termination of theExecutive’s employment or services with the Company or an affiliate. 4.4 Voluntary Termination by Executive. The Executive may voluntarily terminate his employment for any reason and such termination shall take effect 30days after the receipt by Company of the Notice of Termination. Upon the effective date of such termination, Executive shall be entitled to (a) accrued and unpaidSalary and vacation through such termination date; and (b) all other compensation and benefits that were vested through such termination date. In the eventExecutive is terminated without notice, it shall be deemed a termination by the Company for Cause.4.5 Notice of Termination. Any termination of the employment by the Company or the Executive shall be communicated by a notice in accordance withSection 8.4 of this Agreement (the “Notice of Termination”). Such notice shall (a) indicate the specific termination provision in this Agreement relied upon and (b) ifthe termination is for Cause, the date on which the Executive’s employment is to be terminated.4.6 Severance. The Executive shall not be entitled to severance payments upon any termination provided in Section 4 herein.5. EMPLOYEE’S REPRESENTATION. The Executive represents and warrants to the Company that: (a) he is subject to no contractual, fiduciary or otherobligation which may affect the performance of his duties under this Agreement; (b) he has terminated, in accordance with their terms, any contractual obligationwhich may affect his performance under this Agreement; and (c) his employment with the Company will not require him to use or disclose proprietary or confidentialinformation of any other person or entity.26. CONFIDENTIAL INFORMATION Except as permitted or directed by the Board of Directors of the Company in writing, during the time the Executive isemployed by the Company or at any time thereafter, the Executive shall not use for his personal purposes nor divulge, furnish, or make accessible to anyone or usein any way (other than in the ordinary course of the business of the Company) any confidential or secret information or knowledge of the Company, whetherdeveloped by himself or by others. Such confidential and/or secret information encompassed by this Section 6 includes, but is not limited to, the Company’scustomer and supplier lists, business plans, software, systems, and financial, marketing, and personnel information. The Executive agrees to refrain from any acts oromissions that would reduce the value of any confidential or secret knowledge or information to the Company, both during his employment hereunder and at anytime after the termination of his employment. The Executive’s obligations of confidentiality under this Section 6 shall not apply to any knowledge or information thatis now published publicly or that subsequently becomes generally publicly known, other than as a direct or indirect result of a breach of this Agreement by theExecutive.7. NONCOMPETITION: NONSOLICITATION; INVENTIONS.7.1 NonCompetition. During the employment of the Executive under this Agreement and for a period of six (6) months after termination of suchemployment, the Executive shall not at any time compete on his own behalf, or on behalf of any other person or entity, with the Company or any of its affiliateswithin all territories in which the Company does business with respect to the business of the Company or any of its affiliates as such business shall be conductedon the date hereof or during the employment of the Executive under this Agreement. The ownership by the Executive of not more than 5% of a corporation,partnership or other enterprise shall not constitute a violation hereof.7.2 NonSolicitation. During the employment of the Executive under this Agreement and thereafter Executive shall not at any time (i) solicit or induce, onhis own behalf or on behalf of any other person or entity, any employee of the Company or any of its affiliates to leave the employ of the Company or any of itsaffiliates; or (ii) solicit or induce, on his own behalf or on behalf of any other person or entity, any customer or Prospective Customer of the Company or any of theirrespective affiliates to reduce its business with the Company or any of its affiliates. For the purposes of this Agreement, “Prospective Customer” shall mean anyindividual, corporation, trust or other business entity which has either (a) entered into a nondisclosure agreement with the Company or any Company subsidiary oraffiliate or (b) has within the preceding 12 months received a currently pending and not rejected written proposal in reasonable detail from the Company or any ofthe Company’s subsidiary or affiliate.7.3 Inventions and Patents. The Company shall be entitled to the sole benefit and exclusive ownership of any inventions or improvements in products,processes, or other things that may be made or discovered by Executive while he is in the service of the Company, and all patents for the same. During the Term,Executive shall do all acts necessary or required by the Company to give effect to this section and, following the Term, Executive shall do all acts reasonablynecessary or required by the Company to give effect to this section. In all cases, the Company shall pay all costs and fees associated with such acts by Executive.7.4 Return of Property. The Executive agrees that all property in the Executive’s possession that he obtains or is assigned in the course of his employmentwith the Company, including, without limitation, all documents, reports, manuals, memoranda, customer lists, credit cards, keys, access cards, and all other propertyrelating in any way to the business of the Company, is the exclusive property of the Company, even if the Executive authored, created, or assisted in authoring orcreating such property. The Executive shall return to the Company all such property immediately upon termination of employment or at such earlier time as theCompany may request.7.5Court Ordered Revisions.If any portion of this Section 7 is found by a court of competent jurisdiction to be invalid or unenforceable, but would be validand enforceable if modified, this Section 7 shall apply with such modifications necessary to make this Section 7 valid and enforceable. Any portion of this Section 7not required to be so modified shall remain in full force and effect and not be affected thereby.7.6 Specific Performance. The Executive acknowledges that the remedy at law for any breach of any of the provisions of Section 7 will be inadequate, andthat the Company shall be entitled, in addition to any remedy at law or in equity, to preliminary and permanent injunctive relief and specific performance.38. MISCELLANEOUS.8.1 Indemnification. The Company and each of its subsidiaries shall, to the maximum extent provided under applicable law, indemnify and hold Executiveharmless from and against any expenses, including reasonable attorney’s fees, judgments, fines, settlements and other legally permissible amounts (“Losses”),incurred in connection with any proceeding arising out of, or related to, Executive’s employment by the Company, other than any such Losses incurred as a result ofExecutive’s negligence or willful misconduct. The Company shall, or shall cause a subsidiary thereof to, advance to Executive any expenses, including attorney’sfees and costs of settlement, incurred in defending any such proceeding to the maximum extent permitted by applicable law. Such costs and expenses incurred byExecutive in defense of any such proceeding shall be paid by the Company or applicable subsidiary in advance of the final disposition of such proceeding promptlyupon receipt by the Company of (a) written request for payment; (b) appropriate documentation evidencing the incurrence, amount and nature of the costs andexpenses for which payment is being sought; and (c) an undertaking adequate under applicable law made by or on behalf of Executive to repay the amounts soadvanced if it shall ultimately be determined pursuant to any nonappealable judgment or settlement that Executive is not entitled to be indemnified by the Companyor any subsidiary thereof. The Company will provide Executive with coverage under all directors and officers liability insurance policies that it has in effect duringthe Term, with no deductible to Executive. 8.2 Applicable Law. Except as may be otherwise provided herein, this Agreement shall be governed by and construed in accordance with the laws ofChina, applied without reference to principles of conflict of laws. Any dispute arising from or in connection with this Agreement shall be submitted to ShanghaiInternational Arbitration Center (the “Center”) for arbitration under the then effective rules of the Center. The arbitration award shall be the sole, binding, exclusiveand final remedy for resolving any dispute between the parties.8.3 Amendments. This Agreement may not be amended or modified otherwise than by a written agreement executed by the parties hereto or their respectivesuccessors or legal representatives.8.4 Notices. All notices and other communications hereunder shall be in writing and shall be given by handdelivery to the other party, by an internationalmail courier, or by registered or certified mail, return receipt requested, postage prepaid, addressed as follows:If to the Executive:Jie Yu________________________________________If to the Company:______________________________________Or to such other address as either party shall have furnished to the other in writing in accordance herewith. Notices and communications shall be effective whendelivered to the addressee.8.5 Withholding. The Company may withhold from any amounts payable under the Agreement, such federal, state and local income, unemployment, socialsecurity and similar employment related taxes and similar employment related withholdings as shall be required to be withheld pursuant to any applicable law orregulation.8.6 Severability. The invalidity or unenforceability of any provision of this Agreement shall not affect the validity or enforceability of any other provision ofthis Agreement and any such provision which is not valid or enforceable in whole shall be enforced to the maximum extent permitted by law.48.7 Captions. The captions of this Agreement are not part of the provisions and shall have no force or effect.8.8 Entire Agreement. This Agreement contains the entire agreement among the parties concerning the subject matter hereof and supersedes all prioragreements, understandings, discussions, negotiations and undertakings, whether written or oral, between the parties with respect thereto.8.9 Survival. The respective rights and obligations of the parties hereunder shall survive any termination of this Agreement or the Executive’s employmenthereunder to the extent necessary to the intended preservation of such rights and obligations.8.10 Waiver. Either Party's failure to enforce any provision or provisions of this Agreement shall not in any way be construed as a waiver of any suchprovision or provisions, or prevent that party thereafter from enforcing each and every other provision of this Agreement.8.11 Successors. This Agreement is personal to Executive and, without the prior express written consent of the Company, shall not be assignable byExecutive. This Agreement shall inure to the benefit of and be enforceable by Executive’s estate, heirs, beneficiaries, and/or legal representatives. This Agreementshall inure to the benefit of and be binding upon the Company and its successors and assigns.8.12 Joint Efforts/Counterparts. Preparation of this Agreement shall be deemed to be the joint effort of the parties hereto and shall not be construed moreseverely against any party. This Agreement may be signed in two or more counterparts, each of which shall be deemed an original and all of which together shallconstitute one and the same instrument.8.13 Representation by Counsel. Each Party hereby represents that it has had the opportunity to be represented by legal counsel of its choice inconnection with the negotiation and execution of this Agreement.IN WITNESS WHEREOF, the parties have executed this Agreement as of the day and year first above written.EXECUTIVE:LUOKUNG TECHNOLOGY CORP./s/ Jie Yu/s/ Xuesong SongJie YuXuesong SongChief Executive Officer5EX12.1 13 f20f2017ex121_luokung.htm CERTIFICATIONExhibit 12.1Certification by the Chief Executive OfficerPursuant to Section 302 of the SarbanesOxley Act of 2002I, Xuesong Song, the Chief Executive Officer of Luokung Technology Corp. (the “Company”), certify that:1.I have reviewed this transition report on Form 20F of the Company;2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statementsmade, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financialcondition, results of operations and cash flows of the Company as of, and for, the periods presented in this report;4.The Company’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange ActRules 13a15(e) and 15d15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a15(f) and 15d15(f)) for the Company andhave:(a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure thatmaterial information relating to the Company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during theperiod in which this report is being prepared;(b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, toprovide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance withgenerally accepted accounting principles;(c)Evaluated the effectiveness of the Company’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of thedisclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and(d)Disclosed in this report any change in the Company’s internal control over financial reporting that occurred during the period covered by the transition reportthat has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting; and5.The Company’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Company’sauditors and the audit committee of the Company’s board of directors (or persons performing the equivalent functions):(a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely toadversely affect the Company’s ability to record, process, summarize and report financial information; and(b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the Company’s internal control over financialreporting.Date: October 12, 2018By:/s/ Xuesong SongXuesong SongChief Executive Officer(principal executive officer)EX12.2 14 f20f2017ex122_luokung.htm CERTIFICATIONExhibit 12.2Certification by the Chief Financial OfficerPursuant to Section 302 of the SarbanesOxley Act of 2002I, Jie Yu, the Chief Financial Officer of Luokung Technology Corp. (the “Company”), certify that:1.I have reviewed this transition report on Form 20F of the Company;2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statementsmade, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financialcondition, results of operations and cash flows of the Company as of, and for, the periods presented in this report;4.The Company’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange ActRules 13a15(e) and 15d15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a15(f) and 15d15(f)) for the Company andhave:(a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure thatmaterial information relating to the Company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during theperiod in which this report is being prepared;(b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, toprovide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance withgenerally accepted accounting principles;(c)Evaluated the effectiveness of the Company’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of thedisclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and(d)Disclosed in this report any change in the Company’s internal control over financial reporting that occurred during the period covered by the transition reportthat has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting; and5.The Company’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Company’sauditors and the audit committee of the Company’s board of directors (or persons performing the equivalent functions):(a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely toadversely affect the Company’s ability to record, process, summarize and report financial information; and(b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the Company’s internal control over financialreporting.Date: October 12, 2018By:/s/ Jie YuJie YuChief Financial Officer(principal financial officer and principal accounting officer)EX13.1 15 f20f2017ex131_luokung.htm CERTIFICATIONExhibit 13.1Certification by the Chief Executive OfficerPursuant to Section 906 of the SarbanesOxley Act of 2002In connection with the Transition report on Form 20F of Luokung Technology Corp. (the “Company”) for the year ended December 31, 2017 as filed withthe Securities and Exchange Commission on the date hereof (the “Report”), I, Xuesong Song, Chairman and Chief Executive Officer of the Company, certify,pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the SarbanesOxley Act of 2002, that to my knowledge:(1)The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and(2)The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.Date: October 12, 2018By:/s/ Xuesong SongXuesong SongChief Executive Officer(principal executive officer)EX13.2 16 f20f2017ex132_luokung.htm CERTIFICATIONExhibit 13.2Certification by the Chief Financial OfficerPursuant to Section 906 of the SarbanesOxley Act of 2002In connection with the Transition report on Form 20F of Luokung Technology Corp. (the “Company”) for the year ended December 31, 2017 as filed withthe Securities and Exchange Commission on the date hereof (the “Report”), I, Jie Yu, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. Section1350, as adopted pursuant to Section 906 of the SarbanesOxley Act of 2002, that to my knowledge:(1)The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and(2)The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.Date: October 12, 2018By:/s/ Jie YuJie YuChief Financial Officer(principal financial officer and principal accounting officer)地址：Address:.b)陈蔚力Chen Weili地址：Address:c)王平Wang Ping地址：Address:17秘密文件 Strictly Confidentiald)刘东来Liu Donglai地址：Address:丙方：北京中传视讯科技有限公司Party C: Beijing Mobile Vision Technology Co., Ltd.地址：北京市朝阳区光华路9号SOHO3QLAB32Address: LAB32, SOHO3Q, No 9, Guanghua Road, Chaoyang District, Beijing.收件人：宋雪松Attn.: Song Xuesong14.3任何一方可按本条规定随时给其他各方发出通知来改变其接收通知的地址。Any Party may at any time change its address for notices by a notice delivered to the other Parties in accordance with the terms hereof.15.分割性Severability如果本协议有任何一条或多条规定根据任何法律或法规在任何方面被裁定为无效、不合法或不可执行，本协议其余规定的有效性、合法性或可执行性不应因此在任何方面受到影响或损害。各方应通过诚意磋商，争取以法律许可以及各方期望的最大限度内有效的规定取代那些无效、不合法或不可执行的规定，而该等有效的规定所产生的经济效果应尽可能与那些无效、不合法或不能强制执行的规定所产生的经济效果相似。In the event that one or several of the provisions of this Contract are found to be invalid, illegal or unenforceable in any aspect in accordance with any laws orregulations, the validity, legality or enforceability of the remaining provisions of this Contract shall not be affected or compromised in any respect. The Partiesshall strive in good faith to replace such invalid, illegal or unenforceable provisions with effective provisions that accomplish to the greatest extent permittedby law and the intentions of the Parties, and the economic effect of such effective provisions shall be as close as possible to the economic effect of thoseinvalid, illegal or unenforceable provisions.18秘密文件 Strictly Confidential16.附件Attachments本协议所列附件，为本协议不可分割的组成部分。The attachments set forth herein shall be an integral part of this Agreement.17.生效Effectiveness17.1本协议的任何修改、补充或变更，均须采用书面形式，经各方签字或盖章并按规定办理政府登记（如需）后生效。Any amendments, changes and supplements to this Agreement shall be in writing and shall become effective upon completion of the governmentalfiling procedures (if applicable) after the affixation of the signatures or seals of the Parties.17.2本协议以中文和英文书就，一式六份，质权人、所有出质人和丙方各持一份，具有同等效力；中英文版本如有冲突，应以中文版为准。This Agreement is written in Chinese and English in six copies. Each Pledgors, Pledgee and Party C shall hold one copy respectively. Each copy of thisAgreement shall have equal validity. In case there is any conflict between the Chinese version and the English version, the Chinese version shall prevail.本页其余部分刻意留为空白The Remainder of this page is intentionally left blank19秘密文件 Strictly Confidential有鉴于此，各方已使得经其授权的代表于文首所述日期签署了本股权质押协议并即生效，以昭信守。IN WITNESS WHEREOF, the Parties have caused their authorized representatives to execute this Equity Interest Pledge Agreement as of the date first abovewritten.甲方：中传天下信息科技（深圳）有限公司（盖章）Party A: Zhongchuan Tianxia Information Technology (Shenzhen) Co., Ltd. (Seal)签字：By:/s/ Hong Ting姓名：洪婷Name: Hong Ting职务：总经理Title: General Manager秘密文件 Strictly Confidential有鉴于此，各方已使得经其授权的代表于文首所述日期签署了本股权质押协议并即生效，以昭信守。IN WITNESS WHEREOF, the Parties have caused their authorized representatives to execute this Equity Interest Pledge Agreement as of the date first abovewritten.乙方：Party B:宋雪松Song Xuesong签署：By:/s/ Song Xuesong秘密文件 Strictly Confidential有鉴于此，各方已使得经其授权的代表于文首所述日期签署了本股权质押协议并即生效，以昭信守。IN WITNESS WHEREOF, the Parties have caused their authorized representatives to execute this Equity Interest Pledge Agreement as of the date first abovewritten.乙方：Party B:陈蔚力Chen Weili签字：By:/s/ Chen Weili秘密文件 Strictly Confidential有鉴于此，各方已使得经其授权的代表于文首所述日期签署了本股权质押协议并即生效，以昭信守。IN WITNESS WHEREOF, the Parties have caused their authorized representatives to execute this Equity Interest Pledge Agreement as of the date first abovewritten.乙方：Party B:王平Wang Ping签字：By:/s/ Wang Ping秘密文件 Strictly Confidential有鉴于此，各方已使得经其授权的代表于文首所述日期签署了本股权质押协议并即生效，以昭信守。IN WITNESS WHEREOF, the Parties have caused their authorized representatives to execute this Equity Interest Pledge Agreement as of the date first abovewritten.乙方：Party B:刘东来Liu Donglai签字：By:/s/ Liu Donglai秘密文件 Strictly Confidential有鉴于此，各方已使得经其授权的代表于文首所述日期签署了本股权质押协议并即生效，以昭信守。IN WITNESS WHEREOF, the Parties have caused their authorized representatives to execute this Equity Interest Pledge Agreement as of the date first abovewritten.丙方：北京中传视讯科技有限公司（盖章）Party B: Beijing Mobile Vision Technology Co., Ltd. (Seal)签字：By:/s/ Song Xuesong姓名：宋雪松Name: Song Xuesong职务：董事长Title: Chairman of the Board秘密文件 Strictly Confidential附件：Attachments:1.北京中传视讯科技有限公司股东名册；Shareholders' Register of Beijing Mobile Vision Technology Co., Ltd.;2.北京中传视讯科技有限公司的出资证明书；The Capital Contribution Certificate of Beijing Mobile Vision Technology Co., Ltd.;3.独家业务合作协议。Exclusive Business Cooperation Agreement.秘密文件 Strictly ConfidentialEX4.20 6 f20f2017ex420_luokung.htm POWER OF ATTORNEY BY WEILI CHEN, DATED AUGUST 31, 2015Exhibit 4.20授权委托书Power of Attorney本人陈蔚力，持有中华人民共和国身份证（号码：*************** 516），通讯地址为广东省，系拥有北京中传视讯科技有限公司（“中传视讯”）14.0848%股权（“相关股权”）的股东，就相关股权，特此不可撤销地授权中传天下信息科技（深圳）有限公司（“深圳中传天下”）在本授权委托书的有效期内行使如下权利：The undersigned, Chen Weili, a person with the PRC identification card number of ***************516, with address at: Guangdong, and a holder of14.0848% of the entire registered capital ("Shares") in Beijing Mobile Vision Technology Co., Ltd. ("Mobile Vision"), hereby irrevocably authorize ZhongchuanTianxia Information Technology (Shenzhen) Co., Ltd. ("WFOE") to exercise the following rights relating to Shares during the term of this Power of Attorney:授权深圳中传天下作为本人唯一的排他的代理人就有关相关股权的事宜全权代表本人行使包括但不限于如下的权利：1）参加中传视讯的股东会；2）行使按照法律和中传视讯章程规定本人所享有的全部股东权利和股东表决权，包括但不限于出售或转让或质押或处置相关股权的全部或任何一部分；以及3）作为本人的授权代表指定和任命中传视讯的法定代表人、董事和/或执行董事、监事、经理以及其他高级管理人员等。但中传视讯利用该等授权做出违反中华人民共和国法律的决定无效。WFOE is hereby authorized to act on behalf of myself as my exclusive agent and attorney with respect to all matters concerning My Shareholding, includingwithout limitation: 1) attending shareholders' meetings of Mobile Vision; 2) exercising all the shareholder's rights and shareholder's voting rights I am entitled tounder the laws of China and Articles of Association of Mobile Vision, including but not limited to the sale or transfer or pledge or disposition of My Shareholding inpart or in whole; and 3) designating and appointing on behalf of myself the legal representative, director and/or executive director, supervisor, manager and othersenior management members of Mobile Vision. However, the decision made by Mobile Vision taking advantage of the power of attorney which is against the PRClaws shall be null and void.1深圳中传天下将有权在授权范围内代表本人签署独家购买权协议（本人应要求作为协议方）中约定的转让协议，如期履行本人作为协议一方的与本授权委托书同日签署的股权质押协议和独家购买权协议，该权利的行使将不对本授权形成任何限制。Without limiting the generality of the powers granted hereunder, WFOE shall have the power and authority under this Power of Attorney to execute theTransfer Contracts stipulated in Exclusive Option Agreement, to which I am required to be a party, on behalf of myself, and to effect the terms of the Share PledgeAgreement and Exclusive Option Agreement, both dated the date hereof, to which I am a party.深圳中传天下就相关股权的一切行为均视为本人的行为，签署的一切文件均视为本人签署，本人会予以承认。All the actions associated with Shares conducted by WFOE shall be deemed as my own actions, and all the documents related to Shares executed by WFOEshall be deemed to be executed by me. I hereby acknowledge and ratify those actions and/or documents by the WFOE.深圳中传天下有转委托权，可以就上述事项的办理自行再委托其他人或单位而不必事先通知本人或获得本人的同意。WFOE is entitled to reauthorize or assign its rights related to the aforesaid matters to any other person or entity at its own discretion and without giving priornotice to me or obtaining my consent.在本人为中传视讯的股东期间，本授权委托书不可撤销并持续有效，自授权委托书签署之日起算。This Power of Attorney is coupled with an interest and shall be irrevocable and continuously valid from the date of execution of this Power of Attorney, solong as I am a shareholder of Mobile Vision.本授权委托书期间，本人特此放弃已经通过本授权委托书授权给深圳中传天下的与相关股权有关的所有权利，不再自行行使该等权利。During the term of this Power of Attorney, I hereby waive all the rights associated with Shares, which have been authorized to WFOE through this Power ofAttorney, and shall not exercise such rights by myself.本授权委托书以中文和英文书就，中英文版本如有冲突，应以中文版为准。This Power of Attorney is written in Chinese and English; in case there is any conflict between the Chinese version and the English version, the Chineseversion shall prevail.陈蔚力Chen Weili签署：By:日期：年月日Date:2EX4.21 7 f20f2017ex421_luokung.htm POWER OF ATTORNEY BY PING WANG, DATED AUGUST 31, 2015Exhibit 4.21授权委托书Power of Attorney本人王平，持有中华人民共和国身份证（号码：***************01x），通讯地址为广东省，系拥有北京中传视讯科技有限公司（“中传视讯”）19.9872%股权（“相关股权”）的股东，就相关股权，特此不可撤销地授权中传天下信息科技（深圳）有限公司（“深圳中传天下”）在本授权委托书的有效期内行使如下权利：The undersigned, Wang Ping, a person with the PRC identification card number of ***************01x, with address at Guangdong, and a holder of19.9872% of the entire registered capital (“Shares”) in Beijing Mobile Vision Technology Co., Ltd. (“Mobile Vision”), hereby irrevocably authorize ZhongchuanTianxia Information Technology (Shenzhen) Co., Ltd. (“WFOE”) to exercise the following rights relating to Shares during the term of this Power of Attorney:授权深圳中传天下作为本人唯一的排他的代理人就有关相关股权的事宜全权代表本人行使包括但不限于如下的权利：1）参加中传视讯的股东会；2）行使按照法律和中传视讯章程规定本人所享有的全部股东权利和股东表决权，包括但不限于出售或转让或质押或处置相关股权的全部或任何一部分；以及3）作为本人的授权代表指定和任命中传视讯的法定代表人、董事和/或执行董事、监事、经理以及其他高级管理人员等。但中传视讯利用该等授权做出违反中华人民共和国法律的决定无效。WFOE is hereby authorized to act on behalf of myself as my exclusive agent and attorney with respect to all matters concerning My Shareholding, includingwithout limitation: 1) attending shareholders’ meetings of Mobile Vision; 2) exercising all the shareholder’s rights and shareholder’s voting rights I am entitled tounder the laws of China and Articles of Association of Mobile Vision, including but not limited to the sale or transfer or pledge or disposition of My Shareholding inpart or in whole; and 3) designating and appointing on behalf of myself the legal representative, director and/or executive director, supervisor, manager and othersenior management members of Mobile Vision. However, the decision made by Mobile Vision taking advantage of the power of attorney which is against the PRClaws shall be null and void.1深圳中传天下将有权在授权范围内代表本人签署独家购买权协议（本人应要求作为协议方）中约定的转让协议，如期履行本人作为协议一方的与本授权委托书同日签署的股权质押协议和独家购买权协议，该权利的行使将不对本授权形成任何限制。Without limiting the generality of the powers granted hereunder, WFOE shall have the power and authority under this Power of Attorney to execute theTransfer Contracts stipulated in Exclusive Option Agreement, to which I am required to be a party, on behalf of myself, and to effect the terms of the Share PledgeAgreement and Exclusive Option Agreement, both dated the date hereof, to which I am a party.深圳中传天下就相关股权的一切行为均视为本人的行为，签署的一切文件均视为本人签署，本人会予以承认。All the actions associated with Shares conducted by WFOE shall be deemed as my own actions, and all the documents related to Shares executed by WFOEshall be deemed to be executed by me. I hereby acknowledge and ratify those actions and/or documents by the WFOE.深圳中传天下有转委托权，可以就上述事项的办理自行再委托其他人或单位而不必事先通知本人或获得本人的同意。WFOE is entitled to reauthorize or assign its rights related to the aforesaid matters to any other person or entity at its own discretion and without giving priornotice to me or obtaining my consent.在本人为中传视讯的股东期间，本授权委托书不可撤销并持续有效，自授权委托书签署之日起算。This Power of Attorney is coupled with an interest and shall be irrevocable and continuously valid from the date of execution of this Power of Attorney, solong as I am a shareholder of Mobile Vision.本授权委托书期间，本人特此放弃已经通过本授权委托书授权给深圳中传天下的与相关股权有关的所有权利，不再自行行使该等权利。During the term of this Power of Attorney, I hereby waive all the rights associated with Shares, which have been authorized to WFOE through this Power ofAttorney, and shall not exercise such rights by myself.本授权委托书以中文和英文书就，中英文版本如有冲突，应以中文版为准。This Power of Attorney is written in Chinese and English; in case there is any conflict between the Chinese version and the English version, the Chineseversion shall prevail.王平Wang Ping签署：By:日期：年月日Date:2EX4.22 8 f20f2017ex422_luokung.htm POWER OF ATTORNEY BY DONGLAI LIU, DATED AUGUST 31, 2015Exhibit 4.22授权委托书Power of Attorney本人刘东来，持有中华人民共和国身份证（号码：***************912），通讯地址为: ，系拥有北京中传视讯科技有限公司（“中传视讯”）4.1035%股权（“相关股权”）的股东，就相关股权，特此不可撤销地授权中传天下信息科技（深圳）有限公司（“深圳中传天下”）在本授权委托书的有效期内行使如下权利：The undersigned, Liu Donglai, a person with the PRC identification card number of ***************912, with address at: , and a holder of 4.1035% of theentire registered capital (“Shares”) in Beijing Mobile Vision Technology Co., Ltd. (“Mobile Vision”), hereby irrevocably authorize Zhongchuan Tianxia InformationTechnology (Shenzhen) Co., Ltd. (“WFOE”) to exercise the following rights relating to Shares during the term of this Power of Attorney:授权深圳中传天下作为本人唯一的排他的代理人就有关相关股权的事宜全权代表本人行使包括但不限于如下的权利：1）参加中传视讯的股东会；2）行使按照法律和中传视讯章程规定本人所享有的全部股东权利和股东表决权，包括但不限于出售或转让或质押或处置相关股权的全部或任何一部分；以及3）作为本人的授权代表指定和任命中传视讯的法定代表人、董事和/或执行董事、监事、经理以及其他高级管理人员等。但中传视讯利用该等授权做出违反中华人民共和国法律的决定无效。WFOE is hereby authorized to act on behalf of myself as my exclusive agent and attorney with respect to all matters concerning My Shareholding, includingwithout limitation: 1) attending shareholders’ meetings of Mobile Vision; 2) exercising all the shareholder’s rights and shareholder’s voting rights I am entitled tounder the laws of China and Articles of Association of Mobile Vision, including but not limited to the sale or transfer or pledge or disposition of My Shareholding inpart or in whole; and 3) designating and appointing on behalf of myself the legal representative, director and/or executive director, supervisor, manager and othersenior management members of Mobile Vision. However, the decision made by Mobile Vision taking advantage of the power of attorney which is against the PRClaws shall be null and void.1深圳中传天下将有权在授权范围内代表本人签署独家购买权协议（本人应要求作为协议方）中约定的转让协议，如期履行本人作为协议一方的与本授权委托书同日签署的股权质押协议和独家购买权协议，该权利的行使将不对本授权形成任何限制。Without limiting the generality of the powers granted hereunder, WFOE shall have the power and authority under this Power of Attorney to execute theTransfer Contracts stipulated in Exclusive Option Agreement, to which I am required to be a party, on behalf of myself, and to effect the terms of the Share PledgeAgreement and Exclusive Option Agreement, both dated the date hereof, to which I am a party.深圳中传天下就相关股权的一切行为均视为本人的行为，签署的一切文件均视为本人签署，本人会予以承认。All the actions associated with Shares conducted by WFOE shall be deemed as my own actions, and all the documents related to Shares executed by WFOEshall be deemed to be executed by me. I hereby acknowledge and ratify those actions and/or documents by the WFOE.深圳中传天下有转委托权，可以就上述事项的办理自行再委托其他人或单位而不必事先通知本人或获得本人的同意。WFOE is entitled to reauthorize or assign its rights related to the aforesaid matters to any other person or entity at its own discretion and without giving priornotice to me or obtaining my consent.在本人为中传视讯的股东期间，本授权委托书不可撤销并持续有效，自授权委托书签署之日起算。This Power of Attorney is coupled with an interest and shall be irrevocable and continuously valid from the date of execution of this Power of Attorney, solong as I am a shareholder of Mobile Vision.本授权委托书期间，本人特此放弃已经通过本授权委托书授权给深圳中传天下的与相关股权有关的所有权利，不再自行行使该等权利。During the term of this Power of Attorney, I hereby waive all the rights associated with Shares, which have been authorized to WFOE through this Power ofAttorney, and shall not exercise such rights by myself.本授权委托书以中文和英文书就，中英文版本如有冲突，应以中文版为准。This Power of Attorney is written in Chinese and English; in case there is any conflict between the Chinese version and the English version, the Chineseversion shall prevail.刘东来Liu Donglai签署：By:日期：年月日Date:2EX4.23 9 f20f2017ex423_luokung.htm POWER OF ATTORNEY BY XUESONG SONG, DATED AUGUST 31, 2015Exhibit 4.23授权委托书Power of Attorney本人宋雪松，持有中华人民共和国身份证（号码：***************417），通讯地址为，系拥有北京中传视讯科技有限公司（“中传视讯”）61.8245%股权（“相关股权”）的股东，就相关股权，特此不可撤销地授权中传天下信息科技（深圳）有限公司（“深圳中传天下”）在本授权委托书的有效期内行使如下权利：The undersigned, Song Xuesong, a person with the PRC identification card number of ***************417, with address at , and a holder of 61.8245% ofthe entire registered capital (“Shares”) in Beijing Mobile Vision Technology Co., Ltd. (“Mobile Vision”), hereby irrevocably authorize Zhongchuan TianxiaInformation Technology (Shenzhen) Co., Ltd. (“WFOE”) to exercise the following rights relating to Shares during the term of this Power of Attorney:授权深圳中传天下作为本人唯一的排他的代理人就有关相关股权的事宜全权代表本人行使包括但不限于如下的权利：1）参加中传视讯的股东会；2）行使按照法律和中传视讯章程规定本人所享有的全部股东权利和股东表决权，包括但不限于出售或转让或质押或处置相关股权的全部或任何一部分；以及3）作为本人的授权代表指定和任命中传视讯的法定代表人、董事和/或执行董事、监事、经理以及其他高级管理人员等。但中传视讯利用该等授权做出违反中华人民共和国法律的决定无效。WFOE is hereby authorized to act on behalf of myself as my exclusive agent and attorney with respect to all matters concerning My Shareholding, includingwithout limitation: 1) attending shareholders’ meetings of Mobile Vision; 2) exercising all the shareholder’s rights and shareholder’s voting rights I am entitled tounder the laws of China and Articles of Association of Mobile Vision, including but not limited to the sale or transfer or pledge or disposition of My Shareholding inpart or in whole; and 3) designating and appointing on behalf of myself the legal representative, director and/or executive director, supervisor, manager and othersenior management members of Mobile Vision. However, the decision made by Mobile Vision taking advantage of the power of attorney which is against the PRClaws shall be null and void.1深圳中传天下将有权在授权范围内代表本人签署独家购买权协议（本人应要求作为协议方）中约定的转让协议，如期履行本人作为协议一方的与本授权委托书同日签署的股权质押协议和独家购买权协议，该权利的行使将不对本授权形成任何限制。Without limiting the generality of the powers granted hereunder, WFOE shall have the power and authority under this Power of Attorney to execute theTransfer Contracts stipulated in Exclusive Option Agreement, to which I am required to be a party, on behalf of myself, and to effect the terms of the Share PledgeAgreement and Exclusive Option Agreement, both dated the date hereof, to which I am a party.深圳中传天下就相关股权的一切行为均视为本人的行为，签署的一切文件均视为本人签署，本人会予以承认。All the actions associated with Shares conducted by WFOE shall be deemed as my own actions, and all the documents related to Shares executed by WFOEshall be deemed to be executed by me. I hereby acknowledge and ratify those actions and/or documents by the WFOE.深圳中传天下有转委托权，可以就上述事项的办理自行再委托其他人或单位而不必事先通知本人或获得本人的同意。WFOE is entitled to reauthorize or assign its rights related to the aforesaid matters to any other person or entity at its own discretion and without giving priornotice to me or obtaining my consent.在本人为中传视讯的股东期间，本授权委托书不可撤销并持续有效，自授权委托书签署之日起算。This Power of Attorney is coupled with an interest and shall be irrevocable and continuously valid from the date of execution of this Power of Attorney, solong as I am a shareholder of Mobile Vision.本授权委托书期间，本人特此放弃已经通过本授权委托书授权给深圳中传天下的与相关股权有关的所有权利，不再自行行使该等权利。During the term of this Power of Attorney, I hereby waive all the rights associated with Shares, which have been authorized to WFOE through this Power ofAttorney, and shall not exercise such rights by myself.本授权委托书以中文和英文书就，中英文版本如有冲突，应以中文版为准。This Power of Attorney is written in Chinese and English; in case there is any conflict between the Chinese version and the English version, the Chineseversion shall prevail.宋雪松Song Xuesong签署：By:日期：年月日Date:2EX8.1 10 f20f2017ex81_luokung.htm LIST OF SUBSIDIARIES AND CONSOLIDATED VARIABLE INTEREST ENTITIESExhibit 8.1List of Subsidiaries of the CompanyName of EntityJurisdiction of Incorporation/OrganizationLK Technology Ltd.British Virgin IslandsTopsky Infotech Holdings Pte Ltd.SingaporeSuperengine Holdings LimitedBritish Virgin IslandsMMB LimitedHong KongMobile Media (China Limited)Hong KongZhong Chuan Tian Xia Information and Technology (Beijing) LimitedBeijing, PRCZhong Chuan Xia Information and Technology (Shenzhen) LimitedShenzhen, PRCBeijing Zhong Chuan Shi Xun Technology Limited (VIE Entity)Beijing, PRCJiangsu Zhong Chuan Rui You Information and Technology Limited (VIE Entity)Jiangsu, PRCHuoerguosi Luokuang Information and Technology Limited (VIE Entity)Huoerguosi, PRCShenzhen Jiu Zhou Shi Dai Digital Technology LimitedShenzhen, PRCEX10.1 11 f20f2017ex101_luokung.htm EMPLOYMENT AGREEMENT, DATED AUGUST 19, 2018, BETWEEN LUOKUNG TECHNOLOGY CORP. AND XUESONGSONGExhibit 10.1EMPLOYMENT AGREEMENTThis EMPLOYMENT AGREEMENT (the “Agreement”) is made and entered into as of this 19 day of August, 2018 (the “Effective Date”), by and between LuokungTechnology Corp., a British Virgin Islands corporation (the “Company”) and Xuesong Song (the “Executive”), a Chinese citizen.WITNESSETH:WHEREAS, the parties desire to enter into this Agreement setting forth the terms and conditions of the employment relationship between the Executiveand the Company.NOW, THEREFORE, in consideration of the foregoing premises and the mutual covenants and agreements contained herein, the parties hereto agree asfollows:1. EMPLOYMENT.1.1 Agreement to Employ. The Company hereby agrees to employ Executive, and Executive hereby agrees to serve, subject to the provisions of thisAgreement, as an officer and employee of the Company.1.2 Duties and Schedule. Executive shall serve as the Company’s Chief Executive Officer (“CEO”). The responsibilities of the Executive shall be subject tothe bylaws of the Company and determined by the Board of Directors of the Company (the “Board”). The Executive shall report directly to the Board and shall havesuch responsibilities as designated by the Board of the Company to the extent that such responsibilities are not inconsistent with all applicable laws, regulationsand rules. Executive shall devote his best efforts and all of his business time to his position with the Company during the Term.2. TERM OF EMPLOYMENT. Unless Executive’s employment shall sooner terminate pursuant to Section 4, the Company shall employ Executive for a fouryear term commencing on the Effective Date (the “Term”), which Term shall be renewable upon mutual agreement of the Company and the Executive, as approved bythe Board.3. COMPENSATION.3.1 Salary. Executive’s salary during the Term shall be $Nil.3.2 Bonus. At the sole discretion of the Board, or any committee duly designated by the Board and authorized to act thereto, the Executive shall be eligiblefor an annual cash bonus.3.3 Vacation. Executive shall be entitled to 8 days of paid vacation per year. In the event that Executive remains employed by the Company for 3 years ormore, Executive shall be entitled to 12 days of paid vacation.3.4 Business Expenses. Executive shall be reimbursed by the Company for all ordinary and necessary expenses incurred by Executive; provided that theyare incurred and approved in writing in accordance with the Company’s expense policy.3.5 Benefits. During the Term, Executive shall be allowed to participate, on the same basis generally as other employees of the Company, in all generalemployee benefit plans and programs, including improvements or modifications of the same, which may exist as of the Effective Date or thereafter and which aremade available by the Company to all or substantially all of its employees. Such benefits, plans, and programs may include, without limitation, any health, and dentalinsurance or 401K programs, if and when instituted. Any benefit plan currently existing or instituted by the Company after the Effective Date may be altered, changeor discontinued by the Company at its sole discretion and at any time without obligation of any nature to Executive. Except as specifically provided herein, nothingin this Agreement is to be construed or interpreted to increase or alter in any way the rights, participation, coverage, or benefits under such benefit plans orprograms to other than those provided to other employees pursuant to the terms and conditions of such benefit plans and programs. 14. TERMINATION.4.1 Death. This Agreement shall terminate immediately upon the death of Executive, and Executive’s estate or Executive’s legal representative, as the casemay be, shall be entitled to Executive’s accrued and unpaid Salary as of the date of Executive’s death, plus all other compensation and benefits that were vestedthrough the date of Executive’s death.4.2 Disability. In the event of Executive’s Disability, this Agreement shall terminate and Executive shall be entitled to (a) accrued and unpaid Salary andvacation through the first date that a Disability is determined; and (b) all other compensation and benefits that were vested through the first date that a Disabilityhas been determined. “Disability” means the good faith determination of the Board that Executive has become so physically or mentally incapacitated or disabled asto be unable to satisfactorily perform his duties hereunder for a period of ninety (90) consecutive calendar days or for one hundred twenty (120) days in any threehundred sixty (360) day period, such determination based upon a certificate as to such physical or mental disability issued by a licensed physician and/orpsychiatrist (as the case may be) mutually agreed upon by Executive and the Company.4.3 Termination by Company for Cause. The Company may terminate the Executive for Cause and such termination shall take effect upon the receipt byExecutive of the Notice of Termination. Upon the effective date of the termination for Cause, Executive shall be solely entitled to accrued and unpaid Salary throughsuch effective date. “Cause” means: (i) engaging in any act, omission or misconduct that is injurious to the Company or an affiliate; (ii) gross negligence or willfulmisconduct in connection with the performance of duties; (iii) conviction of a criminal offense (other than minor traffic offenses); (iv) fraud, embezzlement ormisappropriation of funds or property of the Company or an affiliate; (v) material breach of any term of any employment or other services, confidentiality, intellectualproperty or noncompetition agreements, if any, between the Executive and the Company or an affiliate; (vi) the entry of an order duly issued by any regulatoryagency (including federal, state and local regulatory agencies and selfregulatory bodies) having jurisdiction over the Company or an affiliate requiring the removalof the Executive from any office held with the Company or prohibiting the Executive from participating in the business or affairs of the Company or any affiliate; or(vii) the revocation or threatened revocation of any of the Company’s or an affiliate’s government licenses, permits or approvals, which is primarily due to theExecutive’s action or inaction and such revocation or threatened revocation would be alleviated or mitigated in any material respect by the termination of theExecutive’s employment or services with the Company or an affiliate. 4.4 Voluntary Termination by Executive. The Executive may voluntarily terminate his employment for any reason and such termination shall take effect 30days after the receipt by Company of the Notice of Termination. Upon the effective date of such termination, Executive shall be entitled to (a) accrued and unpaidSalary and vacation through such termination date; and (b) all other compensation and benefits that were vested through such termination date. In the eventExecutive is terminated without notice, it shall be deemed a termination by the Company for Cause.4.5 Notice of Termination. Any termination of the employment by the Company or the Executive shall be communicated by a notice in accordance withSection 8.4 of this Agreement (the “Notice of Termination”). Such notice shall (a) indicate the specific termination provision in this Agreement relied upon and (b) ifthe termination is for Cause, the date on which the Executive’s employment is to be terminated.4.6 Severance. The Executive shall not be entitled to severance payments upon any termination provided in Section 4 herein.5. EMPLOYEE’S REPRESENTATION. The Executive represents and warrants to the Company that: (a) he is subject to no contractual, fiduciary or otherobligation which may affect the performance of his duties under this Agreement; (b) he has terminated, in accordance with their terms, any contractual obligationwhich may affect his performance under this Agreement; and (c) his employment with the Company will not require him to use or disclose proprietary or confidentialinformation of any other person or entity.26. CONFIDENTIAL INFORMATION Except as permitted or directed by the Board of Directors of the Company in writing, during the time the Executive isemployed by the Company or at any time thereafter, the Executive shall not use for his personal purposes nor divulge, furnish, or make accessible to anyone or usein any way (other than in the ordinary course of the business of the Company) any confidential or secret information or knowledge of the Company, whetherdeveloped by himself or by others. Such confidential and/or secret information encompassed by this Section 6 includes, but is not limited to, the Company’scustomer and supplier lists, business plans, software, systems, and financial, marketing, and personnel information. The Executive agrees to refrain from any acts oromissions that would reduce the value of any confidential or secret knowledge or information to the Company, both during his employment hereunder and at anytime after the termination of his employment. The Executive’s obligations of confidentiality under this Section 6 shall not apply to any knowledge or information thatis now published publicly or that subsequently becomes generally publicly known, other than as a direct or indirect result of a breach of this Agreement by theExecutive.7. NONCOMPETITION: NONSOLICITATION; INVENTIONS.7.1 NonCompetition. During the employment of the Executive under this Agreement and for a period of six (6) months after termination of suchemployment, the Executive shall not at any time compete on his own behalf, or on behalf of any other person or entity, with the Company or any of its affiliateswithin all territories in which the Company does business with respect to the business of the Company or any of its affiliates as such business shall be conductedon the date hereof or during the employment of the Executive under this Agreement. The ownership by the Executive of not more than 5% of a corporation,partnership or other enterprise shall not constitute a violation hereof.7.2 NonSolicitation. During the employment of the Executive under this Agreement and thereafter Executive shall not at any time (i) solicit or induce, onhis own behalf or on behalf of any other person or entity, any employee of the Company or any of its affiliates to leave the employ of the Company or any of itsaffiliates; or (ii) solicit or induce, on his own behalf or on behalf of any other person or entity, any customer or Prospective Customer of the Company or any of theirrespective affiliates to reduce its business with the Company or any of its affiliates. For the purposes of this Agreement, “Prospective Customer” shall mean anyindividual, corporation, trust or other business entity which has either (a) entered into a nondisclosure agreement with the Company or any Company subsidiary oraffiliate or (b) has within the preceding 12 months received a currently pending and not rejected written proposal in reasonable detail from the Company or any ofthe Company’s subsidiary or affiliate.7.3 Inventions and Patents. The Company shall be entitled to the sole benefit and exclusive ownership of any inventions or improvements in products,processes, or other things that may be made or discovered by Executive while he is in the service of the Company, and all patents for the same. During the Term,Executive shall do all acts necessary or required by the Company to give effect to this section and, following the Term, Executive shall do all acts reasonablynecessary or required by the Company to give effect to this section. In all cases, the Company shall pay all costs and fees associated with such acts by Executive.7.4 Return of Property. The Executive agrees that all property in the Executive’s possession that he obtains or is assigned in the course of his employmentwith the Company, including, without limitation, all documents, reports, manuals, memoranda, customer lists, credit cards, keys, access cards, and all other propertyrelating in any way to the business of the Company, is the exclusive property of the Company, even if the Executive authored, created, or assisted in authoring orcreating such property. The Executive shall return to the Company all such property immediately upon termination of employment or at such earlier time as theCompany may request.7.5Court Ordered Revisions.If any portion of this Section 7 is found by a court of competent jurisdiction to be invalid or unenforceable, but would be validand enforceable if modified, this Section 7 shall apply with such modifications necessary to make this Section 7 valid and enforceable. Any portion of this Section 7not required to be so modified shall remain in full force and effect and not be affected thereby.7.6 Specific Performance. The Executive acknowledges that the remedy at law for any breach of any of the provisions of Section 7 will be inadequate, andthat the Company shall be entitled, in addition to any remedy at law or in equity, to preliminary and permanent injunctive relief and specific performance.38. MISCELLANEOUS.8.1 Indemnification. The Company and each of its subsidiaries shall, to the maximum extent provided under applicable law, indemnify and hold Executiveharmless from and against any expenses, including reasonable attorney’s fees, judgments, fines, settlements and other legally permissible amounts (“Losses”),incurred in connection with any proceeding arising out of, or related to, Executive’s employment by the Company, other than any such Losses incurred as a result ofExecutive’s negligence or willful misconduct. The Company shall, or shall cause a subsidiary thereof to, advance to Executive any expenses, including attorney’sfees and costs of settlement, incurred in defending any such proceeding to the maximum extent permitted by applicable law. Such costs and expenses incurred byExecutive in defense of any such proceeding shall be paid by the Company or applicable subsidiary in advance of the final disposition of such proceeding promptlyupon receipt by the Company of (a) written request for payment; (b) appropriate documentation evidencing the incurrence, amount and nature of the costs andexpenses for which payment is being sought; and (c) an undertaking adequate under applicable law made by or on behalf of Executive to repay the amounts soadvanced if it shall ultimately be determined pursuant to any nonappealable judgment or settlement that Executive is not entitled to be indemnified by the Companyor any subsidiary thereof. The Company will provide Executive with coverage under all directors and officers liability insurance policies that it has in effect duringthe Term, with no deductible to Executive. 8.2 Applicable Law. Except as may be otherwise provided herein, this Agreement shall be governed by and construed in accordance with the laws ofChina, applied without reference to principles of conflict of laws. Any dispute arising from or in connection with this Agreement shall be submitted to ShanghaiInternational Arbitration Center (the “Center”) for arbitration under the then effective rules of the Center. The arbitration award shall be the sole, binding, exclusiveand final remedy for resolving any dispute between the parties.8.3 Amendments. This Agreement may not be amended or modified otherwise than by a written agreement executed by the parties hereto or their respectivesuccessors or legal representatives.8.4 Notices. All notices and other communications hereunder shall be in writing and shall be given by handdelivery to the other party, by an internationalmail courier, or by registered or certified mail, return receipt requested, postage prepaid, addressed as follows:If to the Executive:Xuesong Song________________________________________________If to the Company:______________________________________Or to such other address as either party shall have furnished to the other in writing in accordance herewith. Notices and communications shall be effective whendelivered to the addressee.8.5 Withholding. The Company may withhold from any amounts payable under the Agreement, such federal, state and local income, unemployment, socialsecurity and similar employment related taxes and similar employment related withholdings as shall be required to be withheld pursuant to any applicable law orregulation.8.6 Severability. The invalidity or unenforceability of any provision of this Agreement shall not affect the validity or enforceability of any other provision ofthis Agreement and any such provision which is not valid or enforceable in whole shall be enforced to the maximum extent permitted by law.8.7 Captions. The captions of this Agreement are not part of the provisions and shall have no force or effect.48.8 Entire Agreement. This Agreement contains the entire agreement among the parties concerning the subject matter hereof and supersedes all prioragreements, understandings, discussions, negotiations and undertakings, whether written or oral, between the parties with respect thereto.8.9 Survival. The respective rights and obligations of the parties hereunder shall survive any termination of this Agreement or the Executive’s employmenthereunder to the extent necessary to the intended preservation of such rights and obligations.8.10 Waiver. Either Party's failure to enforce any provision or provisions of this Agreement shall not in any way be construed as a waiver of any suchprovision or provisions, or prevent that party thereafter from enforcing each and every other provision of this Agreement.8.11 Successors. This Agreement is personal to Executive and, without the prior express written consent of the Company, shall not be assignable byExecutive. This Agreement shall inure to the benefit of and be enforceable by Executive’s estate, heirs, beneficiaries, and/or legal representatives. This Agreementshall inure to the benefit of and be binding upon the Company and its successors and assigns.8.12 Joint Efforts/Counterparts. Preparation of this Agreement shall be deemed to be the joint effort of the parties hereto and shall not be construed moreseverely against any party. This Agreement may be signed in two or more counterparts, each of which shall be deemed an original and all of which together shallconstitute one and the same instrument.8.13 Representation by Counsel. Each Party hereby represents that it has had the opportunity to be represented by legal counsel of its choice inconnection with the negotiation and execution of this Agreement.IN WITNESS WHEREOF, the parties have executed this Agreement as of the day and year first above written.EXECUTIVE:LUOKUNG TECHNOLOGY CORP./s/ Xuesong Song/s/ Jie YuXuesong SongJie YuChief Financial Officer5EX10.2 12 f20f2017ex102_luokung.htm EMPLOYMENT AGREEMENT, DATED AUGUST 19, 2018, BY AND BETWEEN LUOKUNG TECHNOLOGY CORP. AND JIEYUExhibit 10.2EMPLOYMENT AGREEMENTThis EMPLOYMENT AGREEMENT (the “Agreement”) is made and entered into as of this 19 day of August, 2018 (the “Effective Date”), by and between LuokungTechnology Corp., a British Virgin Islands corporation (the “Company”) and Jie (Jay) Yu (the “Executive”), a Chinese citizen.WITNESSETH:WHEREAS, the parties desire to enter into this Agreement setting forth the terms and conditions of the employment relationship between the Executiveand the Company.NOW, THEREFORE, in consideration of the foregoing premises and the mutual covenants and agreements contained herein, the parties hereto agree asfollows:1. EMPLOYMENT.1.1 Agreement to Employ. The Company hereby agrees to employ Executive, and Executive hereby agrees to serve, subject to the provisions of thisAgreement, as an officer and employee of the Company.1.2 Duties and Schedule. Executive shall serve as the Company’s Chief Financial Officer, and be the Principal Financial Officer and Principal AccountingOfficer of the Company and responsible for all financial matters and management of the Company. The Executive shall report directly to the Company’s ChiefExecutive Officer and Board of Directors (the “Board”) and shall have such responsibilities as designated by the Chief Executive Officer or Board to the extent thatsuch responsibilities are not inconsistent with all applicable laws, regulations and rules. Executive shall devote his best efforts and all of his business time to hisposition with the Company during the Term.2. TERM OF EMPLOYMENT. Unless Executive’s employment shall sooner terminate pursuant to Section 4, the Company shall employ Executive for a fouryear term commencing on the Effective Date (the “Term”), which Term shall be renewable upon mutual agreement of the Company and the Executive, as approved bythe Board.3. COMPENSATION.3.1 Salary. Executive’s salary during the Term shall be RMB700,000 per year (the “Salary”), payable monthly.3.2 Bonus. At the sole discretion of the Board, or any committee duly designated by the Board and authorized to act thereto, the Executive shall be eligiblefor an annual cash bonus.3.3 Vacation. Executive shall be entitled to 8 days of paid vacation per year. In the event that Executive remains employed by the Company for 3 years ormore, Executive shall be entitled to 12 days of paid vacation.3.4 Business Expenses. Executive shall be reimbursed by the Company for all ordinary and necessary expenses incurred by Executive; provided that theyare incurred and approved in writing in accordance with the Company’s expense policy.3.5 Benefits. During the Term, Executive shall be allowed to participate, on the same basis generally as other employees of the Company, in all generalemployee benefit plans and programs, including improvements or modifications of the same, which may exist as of the Effective Date or thereafter and which aremade available by the Company to all or substantially all of its employees. Such benefits, plans, and programs may include, without limitation, any health, and dentalinsurance or 401K programs, if and when instituted. Any benefit plan currently existing or instituted by the Company after the Effective Date may be altered, changeor discontinued by the Company at its sole discretion and at any time without obligation of any nature to Executive. Except as specifically provided herein, nothingin this Agreement is to be construed or interpreted to increase or alter in any way the rights, participation, coverage, or benefits under such benefit plans orprograms to other than those provided to other employees pursuant to the terms and conditions of such benefit plans and programs. 14. TERMINATION.4.1 Death. This Agreement shall terminate immediately upon the death of Executive, and Executive’s estate or Executive’s legal representative, as the casemay be, shall be entitled to Executive’s accrued and unpaid Salary as of the date of Executive’s death, plus all other compensation and benefits that were vestedthrough the date of Executive’s death.4.2 Disability. In the event of Executive’s Disability, this Agreement shall terminate and Executive shall be entitled to (a) accrued and unpaid Salary andvacation through the first date that a Disability is determined; and (b) all other compensation and benefits that were vested through the first date that a Disabilityhas been determined. “Disability” means the good faith determination of the Board that Executive has become so physically or mentally incapacitated or disabled asto be unable to satisfactorily perform his duties hereunder for a period of ninety (90) consecutive calendar days or for one hundred twenty (120) days in any threehundred sixty (360) day period, such determination based upon a certificate as to such physical or mental disability issued by a licensed physician and/orpsychiatrist (as the case may be) mutually agreed upon by Executive and the Company.4.3 Termination by Company for Cause. The Company may terminate the Executive for Cause and such termination shall take effect upon the receipt byExecutive of the Notice of Termination. Upon the effective date of the termination for Cause, Executive shall be solely entitled to accrued and unpaid Salary throughsuch effective date. “Cause” means: (i) engaging in any act, omission or misconduct that is injurious to the Company or an affiliate; (ii) gross negligence or willfulmisconduct in connection with the performance of duties; (iii) conviction of a criminal offense (other than minor traffic offenses); (iv) fraud, embezzlement ormisappropriation of funds or property of the Company or an affiliate; (v) material breach of any term of any employment or other services, confidentiality, intellectualproperty or noncompetition agreements, if any, between the Executive and the Company or an affiliate; (vi) the entry of an order duly issued by any regulatoryagency (including federal, state and local regulatory agencies and selfregulatory bodies) having jurisdiction over the Company or an affiliate requiring the removalof the Executive from any office held with the Company or prohibiting the Executive from participating in the business or affairs of the Company or any affiliate; or(vii) the revocation or threatened revocation of any of the Company’s or an affiliate’s government licenses, permits or approvals, which is primarily due to theExecutive’s action or inaction and such revocation or threatened revocation would be alleviated or mitigated in any material respect by the termination of theExecutive’s employment or services with the Company or an affiliate. 4.4 Voluntary Termination by Executive. The Executive may voluntarily terminate his employment for any reason and such termination shall take effect 30days after the receipt by Company of the Notice of Termination. Upon the effective date of such termination, Executive shall be entitled to (a) accrued and unpaidSalary and vacation through such termination date; and (b) all other compensation and benefits that were vested through such termination date. In the eventExecutive is terminated without notice, it shall be deemed a termination by the Company for Cause.4.5 Notice of Termination. Any termination of the employment by the Company or the Executive shall be communicated by a notice in accordance withSection 8.4 of this Agreement (the “Notice of Termination”). Such notice shall (a) indicate the specific termination provision in this Agreement relied upon and (b) ifthe termination is for Cause, the date on which the Executive’s employment is to be terminated.4.6 Severance. The Executive shall not be entitled to severance payments upon any termination provided in Section 4 herein.5. EMPLOYEE’S REPRESENTATION. The Executive represents and warrants to the Company that: (a) he is subject to no contractual, fiduciary or otherobligation which may affect the performance of his duties under this Agreement; (b) he has terminated, in accordance with their terms, any contractual obligationwhich may affect his performance under this Agreement; and (c) his employment with the Company will not require him to use or disclose proprietary or confidentialinformation of any other person or entity.26. CONFIDENTIAL INFORMATION Except as permitted or directed by the Board of Directors of the Company in writing, during the time the Executive isemployed by the Company or at any time thereafter, the Executive shall not use for his personal purposes nor divulge, furnish, or make accessible to anyone or usein any way (other than in the ordinary course of the business of the Company) any confidential or secret information or knowledge of the Company, whetherdeveloped by himself or by others. Such confidential and/or secret information encompassed by this Section 6 includes, but is not limited to, the Company’scustomer and supplier lists, business plans, software, systems, and financial, marketing, and personnel information. The Executive agrees to refrain from any acts oromissions that would reduce the value of any confidential or secret knowledge or information to the Company, both during his employment hereunder and at anytime after the termination of his employment. The Executive’s obligations of confidentiality under this Section 6 shall not apply to any knowledge or information thatis now published publicly or that subsequently becomes generally publicly known, other than as a direct or indirect result of a breach of this Agreement by theExecutive.7. NONCOMPETITION: NONSOLICITATION; INVENTIONS.7.1 NonCompetition. During the employment of the Executive under this Agreement and for a period of six (6) months after termination of suchemployment, the Executive shall not at any time compete on his own behalf, or on behalf of any other person or entity, with the Company or any of its affiliateswithin all territories in which the Company does business with respect to the business of the Company or any of its affiliates as such business shall be conductedon the date hereof or during the employment of the Executive under this Agreement. The ownership by the Executive of not more than 5% of a corporation,partnership or other enterprise shall not constitute a violation hereof.7.2 NonSolicitation. During the employment of the Executive under this Agreement and thereafter Executive shall not at any time (i) solicit or induce, onhis own behalf or on behalf of any other person or entity, any employee of the Company or any of its affiliates to leave the employ of the Company or any of itsaffiliates; or (ii) solicit or induce, on his own behalf or on behalf of any other person or entity, any customer or Prospective Customer of the Company or any of theirrespective affiliates to reduce its business with the Company or any of its affiliates. For the purposes of this Agreement, “Prospective Customer” shall mean anyindividual, corporation, trust or other business entity which has either (a) entered into a nondisclosure agreement with the Company or any Company subsidiary oraffiliate or (b) has within the preceding 12 months received a currently pending and not rejected written proposal in reasonable detail from the Company or any ofthe Company’s subsidiary or affiliate.7.3 Inventions and Patents. The Company shall be entitled to the sole benefit and exclusive ownership of any inventions or improvements in products,processes, or other things that may be made or discovered by Executive while he is in the service of the Company, and all patents for the same. During the Term,Executive shall do all acts necessary or required by the Company to give effect to this section and, following the Term, Executive shall do all acts reasonablynecessary or required by the Company to give effect to this section. In all cases, the Company shall pay all costs and fees associated with such acts by Executive.7.4 Return of Property. The Executive agrees that all property in the Executive’s possession that he obtains or is assigned in the course of his employmentwith the Company, including, without limitation, all documents, reports, manuals, memoranda, customer lists, credit cards, keys, access cards, and all other propertyrelating in any way to the business of the Company, is the exclusive property of the Company, even if the Executive authored, created, or assisted in authoring orcreating such property. The Executive shall return to the Company all such property immediately upon termination of employment or at such earlier time as theCompany may request.7.5Court Ordered Revisions.If any portion of this Section 7 is found by a court of competent jurisdiction to be invalid or unenforceable, but would be validand enforceable if modified, this Section 7 shall apply with such modifications necessary to make this Section 7 valid and enforceable. Any portion of this Section 7not required to be so modified shall remain in full force and effect and not be affected thereby.7.6 Specific Performance. The Executive acknowledges that the remedy at law for any breach of any of the provisions of Section 7 will be inadequate, andthat the Company shall be entitled, in addition to any remedy at law or in equity, to preliminary and permanent injunctive relief and specific performance.38. MISCELLANEOUS.8.1 Indemnification. The Company and each of its subsidiaries shall, to the maximum extent provided under applicable law, indemnify and hold Executiveharmless from and against any expenses, including reasonable attorney’s fees, judgments, fines, settlements and other legally permissible amounts (“Losses”),incurred in connection with any proceeding arising out of, or related to, Executive’s employment by the Company, other than any such Losses incurred as a result ofExecutive’s negligence or willful misconduct. The Company shall, or shall cause a subsidiary thereof to, advance to Executive any expenses, including attorney’sfees and costs of settlement, incurred in defending any such proceeding to the maximum extent permitted by applicable law. Such costs and expenses incurred byExecutive in defense of any such proceeding shall be paid by the Company or applicable subsidiary in advance of the final disposition of such proceeding promptlyupon receipt by the Company of (a) written request for payment; (b) appropriate documentation evidencing the incurrence, amount and nature of the costs andexpenses for which payment is being sought; and (c) an undertaking adequate under applicable law made by or on behalf of Executive to repay the amounts soadvanced if it shall ultimately be determined pursuant to any nonappealable judgment or settlement that Executive is not entitled to be indemnified by the Companyor any subsidiary thereof. The Company will provide Executive with coverage under all directors and officers liability insurance policies that it has in effect duringthe Term, with no deductible to Executive. 8.2 Applicable Law. Except as may be otherwise provided herein, this Agreement shall be governed by and construed in accordance with the laws ofChina, applied without reference to principles of conflict of laws. Any dispute arising from or in connection with this Agreement shall be submitted to ShanghaiInternational Arbitration Center (the “Center”) for arbitration under the then effective rules of the Center. The arbitration award shall be the sole, binding, exclusiveand final remedy for resolving any dispute between the parties.8.3 Amendments. This Agreement may not be amended or modified otherwise than by a written agreement executed by the parties hereto or their respectivesuccessors or legal representatives.8.4 Notices. All notices and other communications hereunder shall be in writing and shall be given by handdelivery to the other party, by an internationalmail courier, or by registered or certified mail, return receipt requested, postage prepaid, addressed as follows:If to the Executive:Jie Yu________________________________________If to the Company:______________________________________Or to such other address as either party shall have furnished to the other in writing in accordance herewith. Notices and communications shall be effective whendelivered to the addressee.8.5 Withholding. The Company may withhold from any amounts payable under the Agreement, such federal, state and local income, unemployment, socialsecurity and similar employment related taxes and similar employment related withholdings as shall be required to be withheld pursuant to any applicable law orregulation.8.6 Severability. The invalidity or unenforceability of any provision of this Agreement shall not affect the validity or enforceability of any other provision ofthis Agreement and any such provision which is not valid or enforceable in whole shall be enforced to the maximum extent permitted by law.48.7 Captions. The captions of this Agreement are not part of the provisions and shall have no force or effect.8.8 Entire Agreement. This Agreement contains the entire agreement among the parties concerning the subject matter hereof and supersedes all prioragreements, understandings, discussions, negotiations and undertakings, whether written or oral, between the parties with respect thereto.8.9 Survival. The respective rights and obligations of the parties hereunder shall survive any termination of this Agreement or the Executive’s employmenthereunder to the extent necessary to the intended preservation of such rights and obligations.8.10 Waiver. Either Party's failure to enforce any provision or provisions of this Agreement shall not in any way be construed as a waiver of any suchprovision or provisions, or prevent that party thereafter from enforcing each and every other provision of this Agreement.8.11 Successors. This Agreement is personal to Executive and, without the prior express written consent of the Company, shall not be assignable byExecutive. This Agreement shall inure to the benefit of and be enforceable by Executive’s estate, heirs, beneficiaries, and/or legal representatives. This Agreementshall inure to the benefit of and be binding upon the Company and its successors and assigns.8.12 Joint Efforts/Counterparts. Preparation of this Agreement shall be deemed to be the joint effort of the parties hereto and shall not be construed moreseverely against any party. This Agreement may be signed in two or more counterparts, each of which shall be deemed an original and all of which together shallconstitute one and the same instrument.8.13 Representation by Counsel. Each Party hereby represents that it has had the opportunity to be represented by legal counsel of its choice inconnection with the negotiation and execution of this Agreement.IN WITNESS WHEREOF, the parties have executed this Agreement as of the day and year first above written.EXECUTIVE:LUOKUNG TECHNOLOGY CORP./s/ Jie Yu/s/ Xuesong SongJie YuXuesong SongChief Executive Officer5EX12.1 13 f20f2017ex121_luokung.htm CERTIFICATIONExhibit 12.1Certification by the Chief Executive OfficerPursuant to Section 302 of the SarbanesOxley Act of 2002I, Xuesong Song, the Chief Executive Officer of Luokung Technology Corp. (the “Company”), certify that:1.I have reviewed this transition report on Form 20F of the Company;2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statementsmade, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financialcondition, results of operations and cash flows of the Company as of, and for, the periods presented in this report;4.The Company’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange ActRules 13a15(e) and 15d15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a15(f) and 15d15(f)) for the Company andhave:(a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure thatmaterial information relating to the Company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during theperiod in which this report is being prepared;(b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, toprovide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance withgenerally accepted accounting principles;(c)Evaluated the effectiveness of the Company’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of thedisclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and(d)Disclosed in this report any change in the Company’s internal control over financial reporting that occurred during the period covered by the transition reportthat has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting; and5.The Company’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Company’sauditors and the audit committee of the Company’s board of directors (or persons performing the equivalent functions):(a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely toadversely affect the Company’s ability to record, process, summarize and report financial information; and(b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the Company’s internal control over financialreporting.Date: October 12, 2018By:/s/ Xuesong SongXuesong SongChief Executive Officer(principal executive officer)EX12.2 14 f20f2017ex122_luokung.htm CERTIFICATIONExhibit 12.2Certification by the Chief Financial OfficerPursuant to Section 302 of the SarbanesOxley Act of 2002I, Jie Yu, the Chief Financial Officer of Luokung Technology Corp. (the “Company”), certify that:1.I have reviewed this transition report on Form 20F of the Company;2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statementsmade, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financialcondition, results of operations and cash flows of the Company as of, and for, the periods presented in this report;4.The Company’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange ActRules 13a15(e) and 15d15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a15(f) and 15d15(f)) for the Company andhave:(a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure thatmaterial information relating to the Company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during theperiod in which this report is being prepared;(b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, toprovide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance withgenerally accepted accounting principles;(c)Evaluated the effectiveness of the Company’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of thedisclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and(d)Disclosed in this report any change in the Company’s internal control over financial reporting that occurred during the period covered by the transition reportthat has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting; and5.The Company’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Company’sauditors and the audit committee of the Company’s board of directors (or persons performing the equivalent functions):(a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely toadversely affect the Company’s ability to record, process, summarize and report financial information; and(b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the Company’s internal control over financialreporting.Date: October 12, 2018By:/s/ Jie YuJie YuChief Financial Officer(principal financial officer and principal accounting officer)EX13.1 15 f20f2017ex131_luokung.htm CERTIFICATIONExhibit 13.1Certification by the Chief Executive OfficerPursuant to Section 906 of the SarbanesOxley Act of 2002In connection with the Transition report on Form 20F of Luokung Technology Corp. (the “Company”) for the year ended December 31, 2017 as filed withthe Securities and Exchange Commission on the date hereof (the “Report”), I, Xuesong Song, Chairman and Chief Executive Officer of the Company, certify,pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the SarbanesOxley Act of 2002, that to my knowledge:(1)The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and(2)The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.Date: October 12, 2018By:/s/ Xuesong SongXuesong SongChief Executive Officer(principal executive officer)EX13.2 16 f20f2017ex132_luokung.htm CERTIFICATIONExhibit 13.2Certification by the Chief Financial OfficerPursuant to Section 906 of the SarbanesOxley Act of 2002In connection with the Transition report on Form 20F of Luokung Technology Corp. (the “Company”) for the year ended December 31, 2017 as filed withthe Securities and Exchange Commission on the date hereof (the “Report”), I, Jie Yu, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. Section1350, as adopted pursuant to Section 906 of the SarbanesOxley Act of 2002, that to my knowledge:(1)The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and(2)The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.Date: October 12, 2018By:/s/ Jie YuJie YuChief Financial Officer(principal financial officer and principal accounting officer)地址：Address:.b)陈蔚力Chen Weili地址：Address:c)王平Wang Ping地址：Address:17秘密文件 Strictly Confidentiald)刘东来Liu Donglai地址：Address:丙方：北京中传视讯科技有限公司Party C: Beijing Mobile Vision Technology Co., Ltd.地址：北京市朝阳区光华路9号SOHO3QLAB32Address: LAB32, SOHO3Q, No 9, Guanghua Road, Chaoyang District, Beijing.收件人：宋雪松Attn.: Song Xuesong14.3任何一方可按本条规定随时给其他各方发出通知来改变其接收通知的地址。Any Party may at any time change its address for notices by a notice delivered to the other Parties in accordance with the terms hereof.15.分割性Severability如果本协议有任何一条或多条规定根据任何法律或法规在任何方面被裁定为无效、不合法或不可执行，本协议其余规定的有效性、合法性或可执行性不应因此在任何方面受到影响或损害。各方应通过诚意磋商，争取以法律许可以及各方期望的最大限度内有效的规定取代那些无效、不合法或不可执行的规定，而该等有效的规定所产生的经济效果应尽可能与那些无效、不合法或不能强制执行的规定所产生的经济效果相似。In the event that one or several of the provisions of this Contract are found to be invalid, illegal or unenforceable in any aspect in accordance with any laws orregulations, the validity, legality or enforceability of the remaining provisions of this Contract shall not be affected or compromised in any respect. The Partiesshall strive in good faith to replace such invalid, illegal or unenforceable provisions with effective provisions that accomplish to the greatest extent permittedby law and the intentions of the Parties, and the economic effect of such effective provisions shall be as close as possible to the economic effect of thoseinvalid, illegal or unenforceable provisions.18秘密文件 Strictly Confidential16.附件Attachments本协议所列附件，为本协议不可分割的组成部分。The attachments set forth herein shall be an integral part of this Agreement.17.生效Effectiveness17.1本协议的任何修改、补充或变更，均须采用书面形式，经各方签字或盖章并按规定办理政府登记（如需）后生效。Any amendments, changes and supplements to this Agreement shall be in writing and shall become effective upon completion of the governmentalfiling procedures (if applicable) after the affixation of the signatures or seals of the Parties.17.2本协议以中文和英文书就，一式六份，质权人、所有出质人和丙方各持一份，具有同等效力；中英文版本如有冲突，应以中文版为准。This Agreement is written in Chinese and English in six copies. Each Pledgors, Pledgee and Party C shall hold one copy respectively. Each copy of thisAgreement shall have equal validity. In case there is any conflict between the Chinese version and the English version, the Chinese version shall prevail.本页其余部分刻意留为空白The Remainder of this page is intentionally left blank19秘密文件 Strictly Confidential有鉴于此，各方已使得经其授权的代表于文首所述日期签署了本股权质押协议并即生效，以昭信守。IN WITNESS WHEREOF, the Parties have caused their authorized representatives to execute this Equity Interest Pledge Agreement as of the date first abovewritten.甲方：中传天下信息科技（深圳）有限公司（盖章）Party A: Zhongchuan Tianxia Information Technology (Shenzhen) Co., Ltd. (Seal)签字：By:/s/ Hong Ting姓名：洪婷Name: Hong Ting职务：总经理Title: General Manager秘密文件 Strictly Confidential有鉴于此，各方已使得经其授权的代表于文首所述日期签署了本股权质押协议并即生效，以昭信守。IN WITNESS WHEREOF, the Parties have caused their authorized representatives to execute this Equity Interest Pledge Agreement as of the date first abovewritten.乙方：Party B:宋雪松Song Xuesong签署：By:/s/ Song Xuesong秘密文件 Strictly Confidential有鉴于此，各方已使得经其授权的代表于文首所述日期签署了本股权质押协议并即生效，以昭信守。IN WITNESS WHEREOF, the Parties have caused their authorized representatives to execute this Equity Interest Pledge Agreement as of the date first abovewritten.乙方：Party B:陈蔚力Chen Weili签字：By:/s/ Chen Weili秘密文件 Strictly Confidential有鉴于此，各方已使得经其授权的代表于文首所述日期签署了本股权质押协议并即生效，以昭信守。IN WITNESS WHEREOF, the Parties have caused their authorized representatives to execute this Equity Interest Pledge Agreement as of the date first abovewritten.乙方：Party B:王平Wang Ping签字：By:/s/ Wang Ping秘密文件 Strictly Confidential有鉴于此，各方已使得经其授权的代表于文首所述日期签署了本股权质押协议并即生效，以昭信守。IN WITNESS WHEREOF, the Parties have caused their authorized representatives to execute this Equity Interest Pledge Agreement as of the date first abovewritten.乙方：Party B:刘东来Liu Donglai签字：By:/s/ Liu Donglai秘密文件 Strictly Confidential有鉴于此，各方已使得经其授权的代表于文首所述日期签署了本股权质押协议并即生效，以昭信守。IN WITNESS WHEREOF, the Parties have caused their authorized representatives to execute this Equity Interest Pledge Agreement as of the date first abovewritten.丙方：北京中传视讯科技有限公司（盖章）Party B: Beijing Mobile Vision Technology Co., Ltd. (Seal)签字：By:/s/ Song Xuesong姓名：宋雪松Name: Song Xuesong职务：董事长Title: Chairman of the Board秘密文件 Strictly Confidential附件：Attachments:1.北京中传视讯科技有限公司股东名册；Shareholders' Register of Beijing Mobile Vision Technology Co., Ltd.;2.北京中传视讯科技有限公司的出资证明书；The Capital Contribution Certificate of Beijing Mobile Vision Technology Co., Ltd.;3.独家业务合作协议。Exclusive Business Cooperation Agreement.秘密文件 Strictly ConfidentialEX4.20 6 f20f2017ex420_luokung.htm POWER OF ATTORNEY BY WEILI CHEN, DATED AUGUST 31, 2015Exhibit 4.20授权委托书Power of Attorney本人陈蔚力，持有中华人民共和国身份证（号码：*************** 516），通讯地址为广东省，系拥有北京中传视讯科技有限公司（“中传视讯”）14.0848%股权（“相关股权”）的股东，就相关股权，特此不可撤销地授权中传天下信息科技（深圳）有限公司（“深圳中传天下”）在本授权委托书的有效期内行使如下权利：The undersigned, Chen Weili, a person with the PRC identification card number of ***************516, with address at: Guangdong, and a holder of14.0848% of the entire registered capital ("Shares") in Beijing Mobile Vision Technology Co., Ltd. ("Mobile Vision"), hereby irrevocably authorize ZhongchuanTianxia Information Technology (Shenzhen) Co., Ltd. ("WFOE") to exercise the following rights relating to Shares during the term of this Power of Attorney:授权深圳中传天下作为本人唯一的排他的代理人就有关相关股权的事宜全权代表本人行使包括但不限于如下的权利：1）参加中传视讯的股东会；2）行使按照法律和中传视讯章程规定本人所享有的全部股东权利和股东表决权，包括但不限于出售或转让或质押或处置相关股权的全部或任何一部分；以及3）作为本人的授权代表指定和任命中传视讯的法定代表人、董事和/或执行董事、监事、经理以及其他高级管理人员等。但中传视讯利用该等授权做出违反中华人民共和国法律的决定无效。WFOE is hereby authorized to act on behalf of myself as my exclusive agent and attorney with respect to all matters concerning My Shareholding, includingwithout limitation: 1) attending shareholders' meetings of Mobile Vision; 2) exercising all the shareholder's rights and shareholder's voting rights I am entitled tounder the laws of China and Articles of Association of Mobile Vision, including but not limited to the sale or transfer or pledge or disposition of My Shareholding inpart or in whole; and 3) designating and appointing on behalf of myself the legal representative, director and/or executive director, supervisor, manager and othersenior management members of Mobile Vision. However, the decision made by Mobile Vision taking advantage of the power of attorney which is against the PRClaws shall be null and void.1深圳中传天下将有权在授权范围内代表本人签署独家购买权协议（本人应要求作为协议方）中约定的转让协议，如期履行本人作为协议一方的与本授权委托书同日签署的股权质押协议和独家购买权协议，该权利的行使将不对本授权形成任何限制。Without limiting the generality of the powers granted hereunder, WFOE shall have the power and authority under this Power of Attorney to execute theTransfer Contracts stipulated in Exclusive Option Agreement, to which I am required to be a party, on behalf of myself, and to effect the terms of the Share PledgeAgreement and Exclusive Option Agreement, both dated the date hereof, to which I am a party.深圳中传天下就相关股权的一切行为均视为本人的行为，签署的一切文件均视为本人签署，本人会予以承认。All the actions associated with Shares conducted by WFOE shall be deemed as my own actions, and all the documents related to Shares executed by WFOEshall be deemed to be executed by me. I hereby acknowledge and ratify those actions and/or documents by the WFOE.深圳中传天下有转委托权，可以就上述事项的办理自行再委托其他人或单位而不必事先通知本人或获得本人的同意。WFOE is entitled to reauthorize or assign its rights related to the aforesaid matters to any other person or entity at its own discretion and without giving priornotice to me or obtaining my consent.在本人为中传视讯的股东期间，本授权委托书不可撤销并持续有效，自授权委托书签署之日起算。This Power of Attorney is coupled with an interest and shall be irrevocable and continuously valid from the date of execution of this Power of Attorney, solong as I am a shareholder of Mobile Vision.本授权委托书期间，本人特此放弃已经通过本授权委托书授权给深圳中传天下的与相关股权有关的所有权利，不再自行行使该等权利。During the term of this Power of Attorney, I hereby waive all the rights associated with Shares, which have been authorized to WFOE through this Power ofAttorney, and shall not exercise such rights by myself.本授权委托书以中文和英文书就，中英文版本如有冲突，应以中文版为准。This Power of Attorney is written in Chinese and English; in case there is any conflict between the Chinese version and the English version, the Chineseversion shall prevail.陈蔚力Chen Weili签署：By:日期：年月日Date:2EX4.21 7 f20f2017ex421_luokung.htm POWER OF ATTORNEY BY PING WANG, DATED AUGUST 31, 2015Exhibit 4.21授权委托书Power of Attorney本人王平，持有中华人民共和国身份证（号码：***************01x），通讯地址为广东省，系拥有北京中传视讯科技有限公司（“中传视讯”）19.9872%股权（“相关股权”）的股东，就相关股权，特此不可撤销地授权中传天下信息科技（深圳）有限公司（“深圳中传天下”）在本授权委托书的有效期内行使如下权利：The undersigned, Wang Ping, a person with the PRC identification card number of ***************01x, with address at Guangdong, and a holder of19.9872% of the entire registered capital (“Shares”) in Beijing Mobile Vision Technology Co., Ltd. (“Mobile Vision”), hereby irrevocably authorize ZhongchuanTianxia Information Technology (Shenzhen) Co., Ltd. (“WFOE”) to exercise the following rights relating to Shares during the term of this Power of Attorney:授权深圳中传天下作为本人唯一的排他的代理人就有关相关股权的事宜全权代表本人行使包括但不限于如下的权利：1）参加中传视讯的股东会；2）行使按照法律和中传视讯章程规定本人所享有的全部股东权利和股东表决权，包括但不限于出售或转让或质押或处置相关股权的全部或任何一部分；以及3）作为本人的授权代表指定和任命中传视讯的法定代表人、董事和/或执行董事、监事、经理以及其他高级管理人员等。但中传视讯利用该等授权做出违反中华人民共和国法律的决定无效。WFOE is hereby authorized to act on behalf of myself as my exclusive agent and attorney with respect to all matters concerning My Shareholding, includingwithout limitation: 1) attending shareholders’ meetings of Mobile Vision; 2) exercising all the shareholder’s rights and shareholder’s voting rights I am entitled tounder the laws of China and Articles of Association of Mobile Vision, including but not limited to the sale or transfer or pledge or disposition of My Shareholding inpart or in whole; and 3) designating and appointing on behalf of myself the legal representative, director and/or executive director, supervisor, manager and othersenior management members of Mobile Vision. However, the decision made by Mobile Vision taking advantage of the power of attorney which is against the PRClaws shall be null and void.1深圳中传天下将有权在授权范围内代表本人签署独家购买权协议（本人应要求作为协议方）中约定的转让协议，如期履行本人作为协议一方的与本授权委托书同日签署的股权质押协议和独家购买权协议，该权利的行使将不对本授权形成任何限制。Without limiting the generality of the powers granted hereunder, WFOE shall have the power and authority under this Power of Attorney to execute theTransfer Contracts stipulated in Exclusive Option Agreement, to which I am required to be a party, on behalf of myself, and to effect the terms of the Share PledgeAgreement and Exclusive Option Agreement, both dated the date hereof, to which I am a party.深圳中传天下就相关股权的一切行为均视为本人的行为，签署的一切文件均视为本人签署，本人会予以承认。All the actions associated with Shares conducted by WFOE shall be deemed as my own actions, and all the documents related to Shares executed by WFOEshall be deemed to be executed by me. I hereby acknowledge and ratify those actions and/or documents by the WFOE.深圳中传天下有转委托权，可以就上述事项的办理自行再委托其他人或单位而不必事先通知本人或获得本人的同意。WFOE is entitled to reauthorize or assign its rights related to the aforesaid matters to any other person or entity at its own discretion and without giving priornotice to me or obtaining my consent.在本人为中传视讯的股东期间，本授权委托书不可撤销并持续有效，自授权委托书签署之日起算。This Power of Attorney is coupled with an interest and shall be irrevocable and continuously valid from the date of execution of this Power of Attorney, solong as I am a shareholder of Mobile Vision.本授权委托书期间，本人特此放弃已经通过本授权委托书授权给深圳中传天下的与相关股权有关的所有权利，不再自行行使该等权利。During the term of this Power of Attorney, I hereby waive all the rights associated with Shares, which have been authorized to WFOE through this Power ofAttorney, and shall not exercise such rights by myself.本授权委托书以中文和英文书就，中英文版本如有冲突，应以中文版为准。This Power of Attorney is written in Chinese and English; in case there is any conflict between the Chinese version and the English version, the Chineseversion shall prevail.王平Wang Ping签署：By:日期：年月日Date:2EX4.22 8 f20f2017ex422_luokung.htm POWER OF ATTORNEY BY DONGLAI LIU, DATED AUGUST 31, 2015Exhibit 4.22授权委托书Power of Attorney本人刘东来，持有中华人民共和国身份证（号码：***************912），通讯地址为: ，系拥有北京中传视讯科技有限公司（“中传视讯”）4.1035%股权（“相关股权”）的股东，就相关股权，特此不可撤销地授权中传天下信息科技（深圳）有限公司（“深圳中传天下”）在本授权委托书的有效期内行使如下权利：The undersigned, Liu Donglai, a person with the PRC identification card number of ***************912, with address at: , and a holder of 4.1035% of theentire registered capital (“Shares”) in Beijing Mobile Vision Technology Co., Ltd. (“Mobile Vision”), hereby irrevocably authorize Zhongchuan Tianxia InformationTechnology (Shenzhen) Co., Ltd. (“WFOE”) to exercise the following rights relating to Shares during the term of this Power of Attorney:授权深圳中传天下作为本人唯一的排他的代理人就有关相关股权的事宜全权代表本人行使包括但不限于如下的权利：1）参加中传视讯的股东会；2）行使按照法律和中传视讯章程规定本人所享有的全部股东权利和股东表决权，包括但不限于出售或转让或质押或处置相关股权的全部或任何一部分；以及3）作为本人的授权代表指定和任命中传视讯的法定代表人、董事和/或执行董事、监事、经理以及其他高级管理人员等。但中传视讯利用该等授权做出违反中华人民共和国法律的决定无效。WFOE is hereby authorized to act on behalf of myself as my exclusive agent and attorney with respect to all matters concerning My Shareholding, includingwithout limitation: 1) attending shareholders’ meetings of Mobile Vision; 2) exercising all the shareholder’s rights and shareholder’s voting rights I am entitled tounder the laws of China and Articles of Association of Mobile Vision, including but not limited to the sale or transfer or pledge or disposition of My Shareholding inpart or in whole; and 3) designating and appointing on behalf of myself the legal representative, director and/or executive director, supervisor, manager and othersenior management members of Mobile Vision. However, the decision made by Mobile Vision taking advantage of the power of attorney which is against the PRClaws shall be null and void.1深圳中传天下将有权在授权范围内代表本人签署独家购买权协议（本人应要求作为协议方）中约定的转让协议，如期履行本人作为协议一方的与本授权委托书同日签署的股权质押协议和独家购买权协议，该权利的行使将不对本授权形成任何限制。Without limiting the generality of the powers granted hereunder, WFOE shall have the power and authority under this Power of Attorney to execute theTransfer Contracts stipulated in Exclusive Option Agreement, to which I am required to be a party, on behalf of myself, and to effect the terms of the Share PledgeAgreement and Exclusive Option Agreement, both dated the date hereof, to which I am a party.深圳中传天下就相关股权的一切行为均视为本人的行为，签署的一切文件均视为本人签署，本人会予以承认。All the actions associated with Shares conducted by WFOE shall be deemed as my own actions, and all the documents related to Shares executed by WFOEshall be deemed to be executed by me. I hereby acknowledge and ratify those actions and/or documents by the WFOE.深圳中传天下有转委托权，可以就上述事项的办理自行再委托其他人或单位而不必事先通知本人或获得本人的同意。WFOE is entitled to reauthorize or assign its rights related to the aforesaid matters to any other person or entity at its own discretion and without giving priornotice to me or obtaining my consent.在本人为中传视讯的股东期间，本授权委托书不可撤销并持续有效，自授权委托书签署之日起算。This Power of Attorney is coupled with an interest and shall be irrevocable and continuously valid from the date of execution of this Power of Attorney, solong as I am a shareholder of Mobile Vision.本授权委托书期间，本人特此放弃已经通过本授权委托书授权给深圳中传天下的与相关股权有关的所有权利，不再自行行使该等权利。During the term of this Power of Attorney, I hereby waive all the rights associated with Shares, which have been authorized to WFOE through this Power ofAttorney, and shall not exercise such rights by myself.本授权委托书以中文和英文书就，中英文版本如有冲突，应以中文版为准。This Power of Attorney is written in Chinese and English; in case there is any conflict between the Chinese version and the English version, the Chineseversion shall prevail.刘东来Liu Donglai签署：By:日期：年月日Date:2EX4.23 9 f20f2017ex423_luokung.htm POWER OF ATTORNEY BY XUESONG SONG, DATED AUGUST 31, 2015Exhibit 4.23授权委托书Power of Attorney本人宋雪松，持有中华人民共和国身份证（号码：***************417），通讯地址为，系拥有北京中传视讯科技有限公司（“中传视讯”）61.8245%股权（“相关股权”）的股东，就相关股权，特此不可撤销地授权中传天下信息科技（深圳）有限公司（“深圳中传天下”）在本授权委托书的有效期内行使如下权利：The undersigned, Song Xuesong, a person with the PRC identification card number of ***************417, with address at , and a holder of 61.8245% ofthe entire registered capital (“Shares”) in Beijing Mobile Vision Technology Co., Ltd. (“Mobile Vision”), hereby irrevocably authorize Zhongchuan TianxiaInformation Technology (Shenzhen) Co., Ltd. (“WFOE”) to exercise the following rights relating to Shares during the term of this Power of Attorney:授权深圳中传天下作为本人唯一的排他的代理人就有关相关股权的事宜全权代表本人行使包括但不限于如下的权利：1）参加中传视讯的股东会；2）行使按照法律和中传视讯章程规定本人所享有的全部股东权利和股东表决权，包括但不限于出售或转让或质押或处置相关股权的全部或任何一部分；以及3）作为本人的授权代表指定和任命中传视讯的法定代表人、董事和/或执行董事、监事、经理以及其他高级管理人员等。但中传视讯利用该等授权做出违反中华人民共和国法律的决定无效。WFOE is hereby authorized to act on behalf of myself as my exclusive agent and attorney with respect to all matters concerning My Shareholding, includingwithout limitation: 1) attending shareholders’ meetings of Mobile Vision; 2) exercising all the shareholder’s rights and shareholder’s voting rights I am entitled tounder the laws of China and Articles of Association of Mobile Vision, including but not limited to the sale or transfer or pledge or disposition of My Shareholding inpart or in whole; and 3) designating and appointing on behalf of myself the legal representative, director and/or executive director, supervisor, manager and othersenior management members of Mobile Vision. However, the decision made by Mobile Vision taking advantage of the power of attorney which is against the PRClaws shall be null and void.1深圳中传天下将有权在授权范围内代表本人签署独家购买权协议（本人应要求作为协议方）中约定的转让协议，如期履行本人作为协议一方的与本授权委托书同日签署的股权质押协议和独家购买权协议，该权利的行使将不对本授权形成任何限制。Without limiting the generality of the powers granted hereunder, WFOE shall have the power and authority under this Power of Attorney to execute theTransfer Contracts stipulated in Exclusive Option Agreement, to which I am required to be a party, on behalf of myself, and to effect the terms of the Share PledgeAgreement and Exclusive Option Agreement, both dated the date hereof, to which I am a party.深圳中传天下就相关股权的一切行为均视为本人的行为，签署的一切文件均视为本人签署，本人会予以承认。All the actions associated with Shares conducted by WFOE shall be deemed as my own actions, and all the documents related to Shares executed by WFOEshall be deemed to be executed by me. I hereby acknowledge and ratify those actions and/or documents by the WFOE.深圳中传天下有转委托权，可以就上述事项的办理自行再委托其他人或单位而不必事先通知本人或获得本人的同意。WFOE is entitled to reauthorize or assign its rights related to the aforesaid matters to any other person or entity at its own discretion and without giving priornotice to me or obtaining my consent.在本人为中传视讯的股东期间，本授权委托书不可撤销并持续有效，自授权委托书签署之日起算。This Power of Attorney is coupled with an interest and shall be irrevocable and continuously valid from the date of execution of this Power of Attorney, solong as I am a shareholder of Mobile Vision.本授权委托书期间，本人特此放弃已经通过本授权委托书授权给深圳中传天下的与相关股权有关的所有权利，不再自行行使该等权利。During the term of this Power of Attorney, I hereby waive all the rights associated with Shares, which have been authorized to WFOE through this Power ofAttorney, and shall not exercise such rights by myself.本授权委托书以中文和英文书就，中英文版本如有冲突，应以中文版为准。This Power of Attorney is written in Chinese and English; in case there is any conflict between the Chinese version and the English version, the Chineseversion shall prevail.宋雪松Song Xuesong签署：By:日期：年月日Date:2EX8.1 10 f20f2017ex81_luokung.htm LIST OF SUBSIDIARIES AND CONSOLIDATED VARIABLE INTEREST ENTITIESExhibit 8.1List of Subsidiaries of the CompanyName of EntityJurisdiction of Incorporation/OrganizationLK Technology Ltd.British Virgin IslandsTopsky Infotech Holdings Pte Ltd.SingaporeSuperengine Holdings LimitedBritish Virgin IslandsMMB LimitedHong KongMobile Media (China Limited)Hong KongZhong Chuan Tian Xia Information and Technology (Beijing) LimitedBeijing, PRCZhong Chuan Xia Information and Technology (Shenzhen) LimitedShenzhen, PRCBeijing Zhong Chuan Shi Xun Technology Limited (VIE Entity)Beijing, PRCJiangsu Zhong Chuan Rui You Information and Technology Limited (VIE Entity)Jiangsu, PRCHuoerguosi Luokuang Information and Technology Limited (VIE Entity)Huoerguosi, PRCShenzhen Jiu Zhou Shi Dai Digital Technology LimitedShenzhen, PRCEX10.1 11 f20f2017ex101_luokung.htm EMPLOYMENT AGREEMENT, DATED AUGUST 19, 2018, BETWEEN LUOKUNG TECHNOLOGY CORP. AND XUESONGSONGExhibit 10.1EMPLOYMENT AGREEMENTThis EMPLOYMENT AGREEMENT (the “Agreement”) is made and entered into as of this 19 day of August, 2018 (the “Effective Date”), by and between LuokungTechnology Corp., a British Virgin Islands corporation (the “Company”) and Xuesong Song (the “Executive”), a Chinese citizen.WITNESSETH:WHEREAS, the parties desire to enter into this Agreement setting forth the terms and conditions of the employment relationship between the Executiveand the Company.NOW, THEREFORE, in consideration of the foregoing premises and the mutual covenants and agreements contained herein, the parties hereto agree asfollows:1. EMPLOYMENT.1.1 Agreement to Employ. The Company hereby agrees to employ Executive, and Executive hereby agrees to serve, subject to the provisions of thisAgreement, as an officer and employee of the Company.1.2 Duties and Schedule. Executive shall serve as the Company’s Chief Executive Officer (“CEO”). The responsibilities of the Executive shall be subject tothe bylaws of the Company and determined by the Board of Directors of the Company (the “Board”). The Executive shall report directly to the Board and shall havesuch responsibilities as designated by the Board of the Company to the extent that such responsibilities are not inconsistent with all applicable laws, regulationsand rules. Executive shall devote his best efforts and all of his business time to his position with the Company during the Term.2. TERM OF EMPLOYMENT. Unless Executive’s employment shall sooner terminate pursuant to Section 4, the Company shall employ Executive for a fouryear term commencing on the Effective Date (the “Term”), which Term shall be renewable upon mutual agreement of the Company and the Executive, as approved bythe Board.3. COMPENSATION.3.1 Salary. Executive’s salary during the Term shall be $Nil.3.2 Bonus. At the sole discretion of the Board, or any committee duly designated by the Board and authorized to act thereto, the Executive shall be eligiblefor an annual cash bonus.3.3 Vacation. Executive shall be entitled to 8 days of paid vacation per year. In the event that Executive remains employed by the Company for 3 years ormore, Executive shall be entitled to 12 days of paid vacation.3.4 Business Expenses. Executive shall be reimbursed by the Company for all ordinary and necessary expenses incurred by Executive; provided that theyare incurred and approved in writing in accordance with the Company’s expense policy.3.5 Benefits. During the Term, Executive shall be allowed to participate, on the same basis generally as other employees of the Company, in all generalemployee benefit plans and programs, including improvements or modifications of the same, which may exist as of the Effective Date or thereafter and which aremade available by the Company to all or substantially all of its employees. Such benefits, plans, and programs may include, without limitation, any health, and dentalinsurance or 401K programs, if and when instituted. Any benefit plan currently existing or instituted by the Company after the Effective Date may be altered, changeor discontinued by the Company at its sole discretion and at any time without obligation of any nature to Executive. Except as specifically provided herein, nothingin this Agreement is to be construed or interpreted to increase or alter in any way the rights, participation, coverage, or benefits under such benefit plans orprograms to other than those provided to other employees pursuant to the terms and conditions of such benefit plans and programs. 14. TERMINATION.4.1 Death. This Agreement shall terminate immediately upon the death of Executive, and Executive’s estate or Executive’s legal representative, as the casemay be, shall be entitled to Executive’s accrued and unpaid Salary as of the date of Executive’s death, plus all other compensation and benefits that were vestedthrough the date of Executive’s death.4.2 Disability. In the event of Executive’s Disability, this Agreement shall terminate and Executive shall be entitled to (a) accrued and unpaid Salary andvacation through the first date that a Disability is determined; and (b) all other compensation and benefits that were vested through the first date that a Disabilityhas been determined. “Disability” means the good faith determination of the Board that Executive has become so physically or mentally incapacitated or disabled asto be unable to satisfactorily perform his duties hereunder for a period of ninety (90) consecutive calendar days or for one hundred twenty (120) days in any threehundred sixty (360) day period, such determination based upon a certificate as to such physical or mental disability issued by a licensed physician and/orpsychiatrist (as the case may be) mutually agreed upon by Executive and the Company.4.3 Termination by Company for Cause. The Company may terminate the Executive for Cause and such termination shall take effect upon the receipt byExecutive of the Notice of Termination. Upon the effective date of the termination for Cause, Executive shall be solely entitled to accrued and unpaid Salary throughsuch effective date. “Cause” means: (i) engaging in any act, omission or misconduct that is injurious to the Company or an affiliate; (ii) gross negligence or willfulmisconduct in connection with the performance of duties; (iii) conviction of a criminal offense (other than minor traffic offenses); (iv) fraud, embezzlement ormisappropriation of funds or property of the Company or an affiliate; (v) material breach of any term of any employment or other services, confidentiality, intellectualproperty or noncompetition agreements, if any, between the Executive and the Company or an affiliate; (vi) the entry of an order duly issued by any regulatoryagency (including federal, state and local regulatory agencies and selfregulatory bodies) having jurisdiction over the Company or an affiliate requiring the removalof the Executive from any office held with the Company or prohibiting the Executive from participating in the business or affairs of the Company or any affiliate; or(vii) the revocation or threatened revocation of any of the Company’s or an affiliate’s government licenses, permits or approvals, which is primarily due to theExecutive’s action or inaction and such revocation or threatened revocation would be alleviated or mitigated in any material respect by the termination of theExecutive’s employment or services with the Company or an affiliate. 4.4 Voluntary Termination by Executive. The Executive may voluntarily terminate his employment for any reason and such termination shall take effect 30days after the receipt by Company of the Notice of Termination. Upon the effective date of such termination, Executive shall be entitled to (a) accrued and unpaidSalary and vacation through such termination date; and (b) all other compensation and benefits that were vested through such termination date. In the eventExecutive is terminated without notice, it shall be deemed a termination by the Company for Cause.4.5 Notice of Termination. Any termination of the employment by the Company or the Executive shall be communicated by a notice in accordance withSection 8.4 of this Agreement (the “Notice of Termination”). Such notice shall (a) indicate the specific termination provision in this Agreement relied upon and (b) ifthe termination is for Cause, the date on which the Executive’s employment is to be terminated.4.6 Severance. The Executive shall not be entitled to severance payments upon any termination provided in Section 4 herein.5. EMPLOYEE’S REPRESENTATION. The Executive represents and warrants to the Company that: (a) he is subject to no contractual, fiduciary or otherobligation which may affect the performance of his duties under this Agreement; (b) he has terminated, in accordance with their terms, any contractual obligationwhich may affect his performance under this Agreement; and (c) his employment with the Company will not require him to use or disclose proprietary or confidentialinformation of any other person or entity.26. CONFIDENTIAL INFORMATION Except as permitted or directed by the Board of Directors of the Company in writing, during the time the Executive isemployed by the Company or at any time thereafter, the Executive shall not use for his personal purposes nor divulge, furnish, or make accessible to anyone or usein any way (other than in the ordinary course of the business of the Company) any confidential or secret information or knowledge of the Company, whetherdeveloped by himself or by others. Such confidential and/or secret information encompassed by this Section 6 includes, but is not limited to, the Company’scustomer and supplier lists, business plans, software, systems, and financial, marketing, and personnel information. The Executive agrees to refrain from any acts oromissions that would reduce the value of any confidential or secret knowledge or information to the Company, both during his employment hereunder and at anytime after the termination of his employment. The Executive’s obligations of confidentiality under this Section 6 shall not apply to any knowledge or information thatis now published publicly or that subsequently becomes generally publicly known, other than as a direct or indirect result of a breach of this Agreement by theExecutive.7. NONCOMPETITION: NONSOLICITATION; INVENTIONS.7.1 NonCompetition. During the employment of the Executive under this Agreement and for a period of six (6) months after termination of suchemployment, the Executive shall not at any time compete on his own behalf, or on behalf of any other person or entity, with the Company or any of its affiliateswithin all territories in which the Company does business with respect to the business of the Company or any of its affiliates as such business shall be conductedon the date hereof or during the employment of the Executive under this Agreement. The ownership by the Executive of not more than 5% of a corporation,partnership or other enterprise shall not constitute a violation hereof.7.2 NonSolicitation. During the employment of the Executive under this Agreement and thereafter Executive shall not at any time (i) solicit or induce, onhis own behalf or on behalf of any other person or entity, any employee of the Company or any of its affiliates to leave the employ of the Company or any of itsaffiliates; or (ii) solicit or induce, on his own behalf or on behalf of any other person or entity, any customer or Prospective Customer of the Company or any of theirrespective affiliates to reduce its business with the Company or any of its affiliates. For the purposes of this Agreement, “Prospective Customer” shall mean anyindividual, corporation, trust or other business entity which has either (a) entered into a nondisclosure agreement with the Company or any Company subsidiary oraffiliate or (b) has within the preceding 12 months received a currently pending and not rejected written proposal in reasonable detail from the Company or any ofthe Company’s subsidiary or affiliate.7.3 Inventions and Patents. The Company shall be entitled to the sole benefit and exclusive ownership of any inventions or improvements in products,processes, or other things that may be made or discovered by Executive while he is in the service of the Company, and all patents for the same. During the Term,Executive shall do all acts necessary or required by the Company to give effect to this section and, following the Term, Executive shall do all acts reasonablynecessary or required by the Company to give effect to this section. In all cases, the Company shall pay all costs and fees associated with such acts by Executive.7.4 Return of Property. The Executive agrees that all property in the Executive’s possession that he obtains or is assigned in the course of his employmentwith the Company, including, without limitation, all documents, reports, manuals, memoranda, customer lists, credit cards, keys, access cards, and all other propertyrelating in any way to the business of the Company, is the exclusive property of the Company, even if the Executive authored, created, or assisted in authoring orcreating such property. The Executive shall return to the Company all such property immediately upon termination of employment or at such earlier time as theCompany may request.7.5Court Ordered Revisions.If any portion of this Section 7 is found by a court of competent jurisdiction to be invalid or unenforceable, but would be validand enforceable if modified, this Section 7 shall apply with such modifications necessary to make this Section 7 valid and enforceable. Any portion of this Section 7not required to be so modified shall remain in full force and effect and not be affected thereby.7.6 Specific Performance. The Executive acknowledges that the remedy at law for any breach of any of the provisions of Section 7 will be inadequate, andthat the Company shall be entitled, in addition to any remedy at law or in equity, to preliminary and permanent injunctive relief and specific performance.38. MISCELLANEOUS.8.1 Indemnification. The Company and each of its subsidiaries shall, to the maximum extent provided under applicable law, indemnify and hold Executiveharmless from and against any expenses, including reasonable attorney’s fees, judgments, fines, settlements and other legally permissible amounts (“Losses”),incurred in connection with any proceeding arising out of, or related to, Executive’s employment by the Company, other than any such Losses incurred as a result ofExecutive’s negligence or willful misconduct. The Company shall, or shall cause a subsidiary thereof to, advance to Executive any expenses, including attorney’sfees and costs of settlement, incurred in defending any such proceeding to the maximum extent permitted by applicable law. Such costs and expenses incurred byExecutive in defense of any such proceeding shall be paid by the Company or applicable subsidiary in advance of the final disposition of such proceeding promptlyupon receipt by the Company of (a) written request for payment; (b) appropriate documentation evidencing the incurrence, amount and nature of the costs andexpenses for which payment is being sought; and (c) an undertaking adequate under applicable law made by or on behalf of Executive to repay the amounts soadvanced if it shall ultimately be determined pursuant to any nonappealable judgment or settlement that Executive is not entitled to be indemnified by the Companyor any subsidiary thereof. The Company will provide Executive with coverage under all directors and officers liability insurance policies that it has in effect duringthe Term, with no deductible to Executive. 8.2 Applicable Law. Except as may be otherwise provided herein, this Agreement shall be governed by and construed in accordance with the laws ofChina, applied without reference to principles of conflict of laws. Any dispute arising from or in connection with this Agreement shall be submitted to ShanghaiInternational Arbitration Center (the “Center”) for arbitration under the then effective rules of the Center. The arbitration award shall be the sole, binding, exclusiveand final remedy for resolving any dispute between the parties.8.3 Amendments. This Agreement may not be amended or modified otherwise than by a written agreement executed by the parties hereto or their respectivesuccessors or legal representatives.8.4 Notices. All notices and other communications hereunder shall be in writing and shall be given by handdelivery to the other party, by an internationalmail courier, or by registered or certified mail, return receipt requested, postage prepaid, addressed as follows:If to the Executive:Xuesong Song________________________________________________If to the Company:______________________________________Or to such other address as either party shall have furnished to the other in writing in accordance herewith. Notices and communications shall be effective whendelivered to the addressee.8.5 Withholding. The Company may withhold from any amounts payable under the Agreement, such federal, state and local income, unemployment, socialsecurity and similar employment related taxes and similar employment related withholdings as shall be required to be withheld pursuant to any applicable law orregulation.8.6 Severability. The invalidity or unenforceability of any provision of this Agreement shall not affect the validity or enforceability of any other provision ofthis Agreement and any such provision which is not valid or enforceable in whole shall be enforced to the maximum extent permitted by law.8.7 Captions. The captions of this Agreement are not part of the provisions and shall have no force or effect.48.8 Entire Agreement. This Agreement contains the entire agreement among the parties concerning the subject matter hereof and supersedes all prioragreements, understandings, discussions, negotiations and undertakings, whether written or oral, between the parties with respect thereto.8.9 Survival. The respective rights and obligations of the parties hereunder shall survive any termination of this Agreement or the Executive’s employmenthereunder to the extent necessary to the intended preservation of such rights and obligations.8.10 Waiver. Either Party's failure to enforce any provision or provisions of this Agreement shall not in any way be construed as a waiver of any suchprovision or provisions, or prevent that party thereafter from enforcing each and every other provision of this Agreement.8.11 Successors. This Agreement is personal to Executive and, without the prior express written consent of the Company, shall not be assignable byExecutive. This Agreement shall inure to the benefit of and be enforceable by Executive’s estate, heirs, beneficiaries, and/or legal representatives. This Agreementshall inure to the benefit of and be binding upon the Company and its successors and assigns.8.12 Joint Efforts/Counterparts. Preparation of this Agreement shall be deemed to be the joint effort of the parties hereto and shall not be construed moreseverely against any party. This Agreement may be signed in two or more counterparts, each of which shall be deemed an original and all of which together shallconstitute one and the same instrument.8.13 Representation by Counsel. Each Party hereby represents that it has had the opportunity to be represented by legal counsel of its choice inconnection with the negotiation and execution of this Agreement.IN WITNESS WHEREOF, the parties have executed this Agreement as of the day and year first above written.EXECUTIVE:LUOKUNG TECHNOLOGY CORP./s/ Xuesong Song/s/ Jie YuXuesong SongJie YuChief Financial Officer5EX10.2 12 f20f2017ex102_luokung.htm EMPLOYMENT AGREEMENT, DATED AUGUST 19, 2018, BY AND BETWEEN LUOKUNG TECHNOLOGY CORP. AND JIEYUExhibit 10.2EMPLOYMENT AGREEMENTThis EMPLOYMENT AGREEMENT (the “Agreement”) is made and entered into as of this 19 day of August, 2018 (the “Effective Date”), by and between LuokungTechnology Corp., a British Virgin Islands corporation (the “Company”) and Jie (Jay) Yu (the “Executive”), a Chinese citizen.WITNESSETH:WHEREAS, the parties desire to enter into this Agreement setting forth the terms and conditions of the employment relationship between the Executiveand the Company.NOW, THEREFORE, in consideration of the foregoing premises and the mutual covenants and agreements contained herein, the parties hereto agree asfollows:1. EMPLOYMENT.1.1 Agreement to Employ. The Company hereby agrees to employ Executive, and Executive hereby agrees to serve, subject to the provisions of thisAgreement, as an officer and employee of the Company.1.2 Duties and Schedule. Executive shall serve as the Company’s Chief Financial Officer, and be the Principal Financial Officer and Principal AccountingOfficer of the Company and responsible for all financial matters and management of the Company. The Executive shall report directly to the Company’s ChiefExecutive Officer and Board of Directors (the “Board”) and shall have such responsibilities as designated by the Chief Executive Officer or Board to the extent thatsuch responsibilities are not inconsistent with all applicable laws, regulations and rules. Executive shall devote his best efforts and all of his business time to hisposition with the Company during the Term.2. TERM OF EMPLOYMENT. Unless Executive’s employment shall sooner terminate pursuant to Section 4, the Company shall employ Executive for a fouryear term commencing on the Effective Date (the “Term”), which Term shall be renewable upon mutual agreement of the Company and the Executive, as approved bythe Board.3. COMPENSATION.3.1 Salary. Executive’s salary during the Term shall be RMB700,000 per year (the “Salary”), payable monthly.3.2 Bonus. At the sole discretion of the Board, or any committee duly designated by the Board and authorized to act thereto, the Executive shall be eligiblefor an annual cash bonus.3.3 Vacation. Executive shall be entitled to 8 days of paid vacation per year. In the event that Executive remains employed by the Company for 3 years ormore, Executive shall be entitled to 12 days of paid vacation.3.4 Business Expenses. Executive shall be reimbursed by the Company for all ordinary and necessary expenses incurred by Executive; provided that theyare incurred and approved in writing in accordance with the Company’s expense policy.3.5 Benefits. During the Term, Executive shall be allowed to participate, on the same basis generally as other employees of the Company, in all generalemployee benefit plans and programs, including improvements or modifications of the same, which may exist as of the Effective Date or thereafter and which aremade available by the Company to all or substantially all of its employees. Such benefits, plans, and programs may include, without limitation, any health, and dentalinsurance or 401K programs, if and when instituted. Any benefit plan currently existing or instituted by the Company after the Effective Date may be altered, changeor discontinued by the Company at its sole discretion and at any time without obligation of any nature to Executive. Except as specifically provided herein, nothingin this Agreement is to be construed or interpreted to increase or alter in any way the rights, participation, coverage, or benefits under such benefit plans orprograms to other than those provided to other employees pursuant to the terms and conditions of such benefit plans and programs. 14. TERMINATION.4.1 Death. This Agreement shall terminate immediately upon the death of Executive, and Executive’s estate or Executive’s legal representative, as the casemay be, shall be entitled to Executive’s accrued and unpaid Salary as of the date of Executive’s death, plus all other compensation and benefits that were vestedthrough the date of Executive’s death.4.2 Disability. In the event of Executive’s Disability, this Agreement shall terminate and Executive shall be entitled to (a) accrued and unpaid Salary andvacation through the first date that a Disability is determined; and (b) all other compensation and benefits that were vested through the first date that a Disabilityhas been determined. “Disability” means the good faith determination of the Board that Executive has become so physically or mentally incapacitated or disabled asto be unable to satisfactorily perform his duties hereunder for a period of ninety (90) consecutive calendar days or for one hundred twenty (120) days in any threehundred sixty (360) day period, such determination based upon a certificate as to such physical or mental disability issued by a licensed physician and/orpsychiatrist (as the case may be) mutually agreed upon by Executive and the Company.4.3 Termination by Company for Cause. The Company may terminate the Executive for Cause and such termination shall take effect upon the receipt byExecutive of the Notice of Termination. Upon the effective date of the termination for Cause, Executive shall be solely entitled to accrued and unpaid Salary throughsuch effective date. “Cause” means: (i) engaging in any act, omission or misconduct that is injurious to the Company or an affiliate; (ii) gross negligence or willfulmisconduct in connection with the performance of duties; (iii) conviction of a criminal offense (other than minor traffic offenses); (iv) fraud, embezzlement ormisappropriation of funds or property of the Company or an affiliate; (v) material breach of any term of any employment or other services, confidentiality, intellectualproperty or noncompetition agreements, if any, between the Executive and the Company or an affiliate; (vi) the entry of an order duly issued by any regulatoryagency (including federal, state and local regulatory agencies and selfregulatory bodies) having jurisdiction over the Company or an affiliate requiring the removalof the Executive from any office held with the Company or prohibiting the Executive from participating in the business or affairs of the Company or any affiliate; or(vii) the revocation or threatened revocation of any of the Company’s or an affiliate’s government licenses, permits or approvals, which is primarily due to theExecutive’s action or inaction and such revocation or threatened revocation would be alleviated or mitigated in any material respect by the termination of theExecutive’s employment or services with the Company or an affiliate. 4.4 Voluntary Termination by Executive. The Executive may voluntarily terminate his employment for any reason and such termination shall take effect 30days after the receipt by Company of the Notice of Termination. Upon the effective date of such termination, Executive shall be entitled to (a) accrued and unpaidSalary and vacation through such termination date; and (b) all other compensation and benefits that were vested through such termination date. In the eventExecutive is terminated without notice, it shall be deemed a termination by the Company for Cause.4.5 Notice of Termination. Any termination of the employment by the Company or the Executive shall be communicated by a notice in accordance withSection 8.4 of this Agreement (the “Notice of Termination”). Such notice shall (a) indicate the specific termination provision in this Agreement relied upon and (b) ifthe termination is for Cause, the date on which the Executive’s employment is to be terminated.4.6 Severance. The Executive shall not be entitled to severance payments upon any termination provided in Section 4 herein.5. EMPLOYEE’S REPRESENTATION. The Executive represents and warrants to the Company that: (a) he is subject to no contractual, fiduciary or otherobligation which may affect the performance of his duties under this Agreement; (b) he has terminated, in accordance with their terms, any contractual obligationwhich may affect his performance under this Agreement; and (c) his employment with the Company will not require him to use or disclose proprietary or confidentialinformation of any other person or entity.26. CONFIDENTIAL INFORMATION Except as permitted or directed by the Board of Directors of the Company in writing, during the time the Executive isemployed by the Company or at any time thereafter, the Executive shall not use for his personal purposes nor divulge, furnish, or make accessible to anyone or usein any way (other than in the ordinary course of the business of the Company) any confidential or secret information or knowledge of the Company, whetherdeveloped by himself or by others. Such confidential and/or secret information encompassed by this Section 6 includes, but is not limited to, the Company’scustomer and supplier lists, business plans, software, systems, and financial, marketing, and personnel information. The Executive agrees to refrain from any acts oromissions that would reduce the value of any confidential or secret knowledge or information to the Company, both during his employment hereunder and at anytime after the termination of his employment. The Executive’s obligations of confidentiality under this Section 6 shall not apply to any knowledge or information thatis now published publicly or that subsequently becomes generally publicly known, other than as a direct or indirect result of a breach of this Agreement by theExecutive.7. NONCOMPETITION: NONSOLICITATION; INVENTIONS.7.1 NonCompetition. During the employment of the Executive under this Agreement and for a period of six (6) months after termination of suchemployment, the Executive shall not at any time compete on his own behalf, or on behalf of any other person or entity, with the Company or any of its affiliateswithin all territories in which the Company does business with respect to the business of the Company or any of its affiliates as such business shall be conductedon the date hereof or during the employment of the Executive under this Agreement. The ownership by the Executive of not more than 5% of a corporation,partnership or other enterprise shall not constitute a violation hereof.7.2 NonSolicitation. During the employment of the Executive under this Agreement and thereafter Executive shall not at any time (i) solicit or induce, onhis own behalf or on behalf of any other person or entity, any employee of the Company or any of its affiliates to leave the employ of the Company or any of itsaffiliates; or (ii) solicit or induce, on his own behalf or on behalf of any other person or entity, any customer or Prospective Customer of the Company or any of theirrespective affiliates to reduce its business with the Company or any of its affiliates. For the purposes of this Agreement, “Prospective Customer” shall mean anyindividual, corporation, trust or other business entity which has either (a) entered into a nondisclosure agreement with the Company or any Company subsidiary oraffiliate or (b) has within the preceding 12 months received a currently pending and not rejected written proposal in reasonable detail from the Company or any ofthe Company’s subsidiary or affiliate.7.3 Inventions and Patents. The Company shall be entitled to the sole benefit and exclusive ownership of any inventions or improvements in products,processes, or other things that may be made or discovered by Executive while he is in the service of the Company, and all patents for the same. During the Term,Executive shall do all acts necessary or required by the Company to give effect to this section and, following the Term, Executive shall do all acts reasonablynecessary or required by the Company to give effect to this section. In all cases, the Company shall pay all costs and fees associated with such acts by Executive.7.4 Return of Property. The Executive agrees that all property in the Executive’s possession that he obtains or is assigned in the course of his employmentwith the Company, including, without limitation, all documents, reports, manuals, memoranda, customer lists, credit cards, keys, access cards, and all other propertyrelating in any way to the business of the Company, is the exclusive property of the Company, even if the Executive authored, created, or assisted in authoring orcreating such property. The Executive shall return to the Company all such property immediately upon termination of employment or at such earlier time as theCompany may request.7.5Court Ordered Revisions.If any portion of this Section 7 is found by a court of competent jurisdiction to be invalid or unenforceable, but would be validand enforceable if modified, this Section 7 shall apply with such modifications necessary to make this Section 7 valid and enforceable. Any portion of this Section 7not required to be so modified shall remain in full force and effect and not be affected thereby.7.6 Specific Performance. The Executive acknowledges that the remedy at law for any breach of any of the provisions of Section 7 will be inadequate, andthat the Company shall be entitled, in addition to any remedy at law or in equity, to preliminary and permanent injunctive relief and specific performance.38. MISCELLANEOUS.8.1 Indemnification. The Company and each of its subsidiaries shall, to the maximum extent provided under applicable law, indemnify and hold Executiveharmless from and against any expenses, including reasonable attorney’s fees, judgments, fines, settlements and other legally permissible amounts (“Losses”),incurred in connection with any proceeding arising out of, or related to, Executive’s employment by the Company, other than any such Losses incurred as a result ofExecutive’s negligence or willful misconduct. The Company shall, or shall cause a subsidiary thereof to, advance to Executive any expenses, including attorney’sfees and costs of settlement, incurred in defending any such proceeding to the maximum extent permitted by applicable law. Such costs and expenses incurred byExecutive in defense of any such proceeding shall be paid by the Company or applicable subsidiary in advance of the final disposition of such proceeding promptlyupon receipt by the Company of (a) written request for payment; (b) appropriate documentation evidencing the incurrence, amount and nature of the costs andexpenses for which payment is being sought; and (c) an undertaking adequate under applicable law made by or on behalf of Executive to repay the amounts soadvanced if it shall ultimately be determined pursuant to any nonappealable judgment or settlement that Executive is not entitled to be indemnified by the Companyor any subsidiary thereof. The Company will provide Executive with coverage under all directors and officers liability insurance policies that it has in effect duringthe Term, with no deductible to Executive. 8.2 Applicable Law. Except as may be otherwise provided herein, this Agreement shall be governed by and construed in accordance with the laws ofChina, applied without reference to principles of conflict of laws. Any dispute arising from or in connection with this Agreement shall be submitted to ShanghaiInternational Arbitration Center (the “Center”) for arbitration under the then effective rules of the Center. The arbitration award shall be the sole, binding, exclusiveand final remedy for resolving any dispute between the parties.8.3 Amendments. This Agreement may not be amended or modified otherwise than by a written agreement executed by the parties hereto or their respectivesuccessors or legal representatives.8.4 Notices. All notices and other communications hereunder shall be in writing and shall be given by handdelivery to the other party, by an internationalmail courier, or by registered or certified mail, return receipt requested, postage prepaid, addressed as follows:If to the Executive:Jie Yu________________________________________If to the Company:______________________________________Or to such other address as either party shall have furnished to the other in writing in accordance herewith. Notices and communications shall be effective whendelivered to the addressee.8.5 Withholding. The Company may withhold from any amounts payable under the Agreement, such federal, state and local income, unemployment, socialsecurity and similar employment related taxes and similar employment related withholdings as shall be required to be withheld pursuant to any applicable law orregulation.8.6 Severability. The invalidity or unenforceability of any provision of this Agreement shall not affect the validity or enforceability of any other provision ofthis Agreement and any such provision which is not valid or enforceable in whole shall be enforced to the maximum extent permitted by law.48.7 Captions. The captions of this Agreement are not part of the provisions and shall have no force or effect.8.8 Entire Agreement. This Agreement contains the entire agreement among the parties concerning the subject matter hereof and supersedes all prioragreements, understandings, discussions, negotiations and undertakings, whether written or oral, between the parties with respect thereto.8.9 Survival. The respective rights and obligations of the parties hereunder shall survive any termination of this Agreement or the Executive’s employmenthereunder to the extent necessary to the intended preservation of such rights and obligations.8.10 Waiver. Either Party's failure to enforce any provision or provisions of this Agreement shall not in any way be construed as a waiver of any suchprovision or provisions, or prevent that party thereafter from enforcing each and every other provision of this Agreement.8.11 Successors. This Agreement is personal to Executive and, without the prior express written consent of the Company, shall not be assignable byExecutive. This Agreement shall inure to the benefit of and be enforceable by Executive’s estate, heirs, beneficiaries, and/or legal representatives. This Agreementshall inure to the benefit of and be binding upon the Company and its successors and assigns.8.12 Joint Efforts/Counterparts. Preparation of this Agreement shall be deemed to be the joint effort of the parties hereto and shall not be construed moreseverely against any party. This Agreement may be signed in two or more counterparts, each of which shall be deemed an original and all of which together shallconstitute one and the same instrument.8.13 Representation by Counsel. Each Party hereby represents that it has had the opportunity to be represented by legal counsel of its choice inconnection with the negotiation and execution of this Agreement.IN WITNESS WHEREOF, the parties have executed this Agreement as of the day and year first above written.EXECUTIVE:LUOKUNG TECHNOLOGY CORP./s/ Jie Yu/s/ Xuesong SongJie YuXuesong SongChief Executive Officer5EX12.1 13 f20f2017ex121_luokung.htm CERTIFICATIONExhibit 12.1Certification by the Chief Executive OfficerPursuant to Section 302 of the SarbanesOxley Act of 2002I, Xuesong Song, the Chief Executive Officer of Luokung Technology Corp. (the “Company”), certify that:1.I have reviewed this transition report on Form 20F of the Company;2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statementsmade, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financialcondition, results of operations and cash flows of the Company as of, and for, the periods presented in this report;4.The Company’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange ActRules 13a15(e) and 15d15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a15(f) and 15d15(f)) for the Company andhave:(a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure thatmaterial information relating to the Company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during theperiod in which this report is being prepared;(b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, toprovide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance withgenerally accepted accounting principles;(c)Evaluated the effectiveness of the Company’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of thedisclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and(d)Disclosed in this report any change in the Company’s internal control over financial reporting that occurred during the period covered by the transition reportthat has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting; and5.The Company’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Company’sauditors and the audit committee of the Company’s board of directors (or persons performing the equivalent functions):(a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely toadversely affect the Company’s ability to record, process, summarize and report financial information; and(b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the Company’s internal control over financialreporting.Date: October 12, 2018By:/s/ Xuesong SongXuesong SongChief Executive Officer(principal executive officer)EX12.2 14 f20f2017ex122_luokung.htm CERTIFICATIONExhibit 12.2Certification by the Chief Financial OfficerPursuant to Section 302 of the SarbanesOxley Act of 2002I, Jie Yu, the Chief Financial Officer of Luokung Technology Corp. (the “Company”), certify that:1.I have reviewed this transition report on Form 20F of the Company;2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statementsmade, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financialcondition, results of operations and cash flows of the Company as of, and for, the periods presented in this report;4.The Company’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange ActRules 13a15(e) and 15d15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a15(f) and 15d15(f)) for the Company andhave:(a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure thatmaterial information relating to the Company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during theperiod in which this report is being prepared;(b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, toprovide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance withgenerally accepted accounting principles;(c)Evaluated the effectiveness of the Company’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of thedisclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and(d)Disclosed in this report any change in the Company’s internal control over financial reporting that occurred during the period covered by the transition reportthat has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting; and5.The Company’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Company’sauditors and the audit committee of the Company’s board of directors (or persons performing the equivalent functions):(a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely toadversely affect the Company’s ability to record, process, summarize and report financial information; and(b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the Company’s internal control over financialreporting.Date: October 12, 2018By:/s/ Jie YuJie YuChief Financial Officer(principal financial officer and principal accounting officer)EX13.1 15 f20f2017ex131_luokung.htm CERTIFICATIONExhibit 13.1Certification by the Chief Executive OfficerPursuant to Section 906 of the SarbanesOxley Act of 2002In connection with the Transition report on Form 20F of Luokung Technology Corp. (the “Company”) for the year ended December 31, 2017 as filed withthe Securities and Exchange Commission on the date hereof (the “Report”), I, Xuesong Song, Chairman and Chief Executive Officer of the Company, certify,pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the SarbanesOxley Act of 2002, that to my knowledge:(1)The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and(2)The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.Date: October 12, 2018By:/s/ Xuesong SongXuesong SongChief Executive Officer(principal executive officer)EX13.2 16 f20f2017ex132_luokung.htm CERTIFICATIONExhibit 13.2Certification by the Chief Financial OfficerPursuant to Section 906 of the SarbanesOxley Act of 2002In connection with the Transition report on Form 20F of Luokung Technology Corp. (the “Company”) for the year ended December 31, 2017 as filed withthe Securities and Exchange Commission on the date hereof (the “Report”), I, Jie Yu, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. Section1350, as adopted pursuant to Section 906 of the SarbanesOxley Act of 2002, that to my knowledge:(1)The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and(2)The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.Date: October 12, 2018By:/s/ Jie YuJie YuChief Financial Officer(principal financial officer and principal accounting officer)地址：Address:.b)陈蔚力Chen Weili地址：Address:c)王平Wang Ping地址：Address:17秘密文件 Strictly Confidentiald)刘东来Liu Donglai地址：Address:丙方：北京中传视讯科技有限公司Party C: Beijing Mobile Vision Technology Co., Ltd.地址：北京市朝阳区光华路9号SOHO3QLAB32Address: LAB32, SOHO3Q, No 9, Guanghua Road, Chaoyang District, Beijing.收件人：宋雪松Attn.: Song Xuesong14.3任何一方可按本条规定随时给其他各方发出通知来改变其接收通知的地址。Any Party may at any time change its address for notices by a notice delivered to the other Parties in accordance with the terms hereof.15.分割性Severability如果本协议有任何一条或多条规定根据任何法律或法规在任何方面被裁定为无效、不合法或不可执行，本协议其余规定的有效性、合法性或可执行性不应因此在任何方面受到影响或损害。各方应通过诚意磋商，争取以法律许可以及各方期望的最大限度内有效的规定取代那些无效、不合法或不可执行的规定，而该等有效的规定所产生的经济效果应尽可能与那些无效、不合法或不能强制执行的规定所产生的经济效果相似。In the event that one or several of the provisions of this Contract are found to be invalid, illegal or unenforceable in any aspect in accordance with any laws orregulations, the validity, legality or enforceability of the remaining provisions of this Contract shall not be affected or compromised in any respect. The Partiesshall strive in good faith to replace such invalid, illegal or unenforceable provisions with effective provisions that accomplish to the greatest extent permittedby law and the intentions of the Parties, and the economic effect of such effective provisions shall be as close as possible to the economic effect of thoseinvalid, illegal or unenforceable provisions.18秘密文件 Strictly Confidential16.附件Attachments本协议所列附件，为本协议不可分割的组成部分。The attachments set forth herein shall be an integral part of this Agreement.17.生效Effectiveness17.1本协议的任何修改、补充或变更，均须采用书面形式，经各方签字或盖章并按规定办理政府登记（如需）后生效。Any amendments, changes and supplements to this Agreement shall be in writing and shall become effective upon completion of the governmentalfiling procedures (if applicable) after the affixation of the signatures or seals of the Parties.17.2本协议以中文和英文书就，一式六份，质权人、所有出质人和丙方各持一份，具有同等效力；中英文版本如有冲突，应以中文版为准。This Agreement is written in Chinese and English in six copies. Each Pledgors, Pledgee and Party C shall hold one copy respectively. Each copy of thisAgreement shall have equal validity. In case there is any conflict between the Chinese version and the English version, the Chinese version shall prevail.本页其余部分刻意留为空白The Remainder of this page is intentionally left blank19秘密文件 Strictly Confidential有鉴于此，各方已使得经其授权的代表于文首所述日期签署了本股权质押协议并即生效，以昭信守。IN WITNESS WHEREOF, the Parties have caused their authorized representatives to execute this Equity Interest Pledge Agreement as of the date first abovewritten.甲方：中传天下信息科技（深圳）有限公司（盖章）Party A: Zhongchuan Tianxia Information Technology (Shenzhen) Co., Ltd. (Seal)签字：By:/s/ Hong Ting姓名：洪婷Name: Hong Ting职务：总经理Title: General Manager秘密文件 Strictly Confidential有鉴于此，各方已使得经其授权的代表于文首所述日期签署了本股权质押协议并即生效，以昭信守。IN WITNESS WHEREOF, the Parties have caused their authorized representatives to execute this Equity Interest Pledge Agreement as of the date first abovewritten.乙方：Party B:宋雪松Song Xuesong签署：By:/s/ Song Xuesong秘密文件 Strictly Confidential有鉴于此，各方已使得经其授权的代表于文首所述日期签署了本股权质押协议并即生效，以昭信守。IN WITNESS WHEREOF, the Parties have caused their authorized representatives to execute this Equity Interest Pledge Agreement as of the date first abovewritten.乙方：Party B:陈蔚力Chen Weili签字：By:/s/ Chen Weili秘密文件 Strictly Confidential有鉴于此，各方已使得经其授权的代表于文首所述日期签署了本股权质押协议并即生效，以昭信守。IN WITNESS WHEREOF, the Parties have caused their authorized representatives to execute this Equity Interest Pledge Agreement as of the date first abovewritten.乙方：Party B:王平Wang Ping签字：By:/s/ Wang Ping秘密文件 Strictly Confidential有鉴于此，各方已使得经其授权的代表于文首所述日期签署了本股权质押协议并即生效，以昭信守。IN WITNESS WHEREOF, the Parties have caused their authorized representatives to execute this Equity Interest Pledge Agreement as of the date first abovewritten.乙方：Party B:刘东来Liu Donglai签字：By:/s/ Liu Donglai秘密文件 Strictly Confidential有鉴于此，各方已使得经其授权的代表于文首所述日期签署了本股权质押协议并即生效，以昭信守。IN WITNESS WHEREOF, the Parties have caused their authorized representatives to execute this Equity Interest Pledge Agreement as of the date first abovewritten.丙方：北京中传视讯科技有限公司（盖章）Party B: Beijing Mobile Vision Technology Co., Ltd. (Seal)签字：By:/s/ Song Xuesong姓名：宋雪松Name: Song Xuesong职务：董事长Title: Chairman of the Board秘密文件 Strictly Confidential附件：Attachments:1.北京中传视讯科技有限公司股东名册；Shareholders' Register of Beijing Mobile Vision Technology Co., Ltd.;2.北京中传视讯科技有限公司的出资证明书；The Capital Contribution Certificate of Beijing Mobile Vision Technology Co., Ltd.;3.独家业务合作协议。Exclusive Business Cooperation Agreement.秘密文件 Strictly ConfidentialEX4.20 6 f20f2017ex420_luokung.htm POWER OF ATTORNEY BY WEILI CHEN, DATED AUGUST 31, 2015Exhibit 4.20授权委托书Power of Attorney本人陈蔚力，持有中华人民共和国身份证（号码：*************** 516），通讯地址为广东省，系拥有北京中传视讯科技有限公司（“中传视讯”）14.0848%股权（“相关股权”）的股东，就相关股权，特此不可撤销地授权中传天下信息科技（深圳）有限公司（“深圳中传天下”）在本授权委托书的有效期内行使如下权利：The undersigned, Chen Weili, a person with the PRC identification card number of ***************516, with address at: Guangdong, and a holder of14.0848% of the entire registered capital ("Shares") in Beijing Mobile Vision Technology Co., Ltd. ("Mobile Vision"), hereby irrevocably authorize ZhongchuanTianxia Information Technology (Shenzhen) Co., Ltd. ("WFOE") to exercise the following rights relating to Shares during the term of this Power of Attorney:授权深圳中传天下作为本人唯一的排他的代理人就有关相关股权的事宜全权代表本人行使包括但不限于如下的权利：1）参加中传视讯的股东会；2）行使按照法律和中传视讯章程规定本人所享有的全部股东权利和股东表决权，包括但不限于出售或转让或质押或处置相关股权的全部或任何一部分；以及3）作为本人的授权代表指定和任命中传视讯的法定代表人、董事和/或执行董事、监事、经理以及其他高级管理人员等。但中传视讯利用该等授权做出违反中华人民共和国法律的决定无效。WFOE is hereby authorized to act on behalf of myself as my exclusive agent and attorney with respect to all matters concerning My Shareholding, includingwithout limitation: 1) attending shareholders' meetings of Mobile Vision; 2) exercising all the shareholder's rights and shareholder's voting rights I am entitled tounder the laws of China and Articles of Association of Mobile Vision, including but not limited to the sale or transfer or pledge or disposition of My Shareholding inpart or in whole; and 3) designating and appointing on behalf of myself the legal representative, director and/or executive director, supervisor, manager and othersenior management members of Mobile Vision. However, the decision made by Mobile Vision taking advantage of the power of attorney which is against the PRClaws shall be null and void.1深圳中传天下将有权在授权范围内代表本人签署独家购买权协议（本人应要求作为协议方）中约定的转让协议，如期履行本人作为协议一方的与本授权委托书同日签署的股权质押协议和独家购买权协议，该权利的行使将不对本授权形成任何限制。Without limiting the generality of the powers granted hereunder, WFOE shall have the power and authority under this Power of Attorney to execute theTransfer Contracts stipulated in Exclusive Option Agreement, to which I am required to be a party, on behalf of myself, and to effect the terms of the Share PledgeAgreement and Exclusive Option Agreement, both dated the date hereof, to which I am a party.深圳中传天下就相关股权的一切行为均视为本人的行为，签署的一切文件均视为本人签署，本人会予以承认。All the actions associated with Shares conducted by WFOE shall be deemed as my own actions, and all the documents related to Shares executed by WFOEshall be deemed to be executed by me. I hereby acknowledge and ratify those actions and/or documents by the WFOE.深圳中传天下有转委托权，可以就上述事项的办理自行再委托其他人或单位而不必事先通知本人或获得本人的同意。WFOE is entitled to reauthorize or assign its rights related to the aforesaid matters to any other person or entity at its own discretion and without giving priornotice to me or obtaining my consent.在本人为中传视讯的股东期间，本授权委托书不可撤销并持续有效，自授权委托书签署之日起算。This Power of Attorney is coupled with an interest and shall be irrevocable and continuously valid from the date of execution of this Power of Attorney, solong as I am a shareholder of Mobile Vision.本授权委托书期间，本人特此放弃已经通过本授权委托书授权给深圳中传天下的与相关股权有关的所有权利，不再自行行使该等权利。During the term of this Power of Attorney, I hereby waive all the rights associated with Shares, which have been authorized to WFOE through this Power ofAttorney, and shall not exercise such rights by myself.本授权委托书以中文和英文书就，中英文版本如有冲突，应以中文版为准。This Power of Attorney is written in Chinese and English; in case there is any conflict between the Chinese version and the English version, the Chineseversion shall prevail.陈蔚力Chen Weili签署：By:日期：年月日Date:2EX4.21 7 f20f2017ex421_luokung.htm POWER OF ATTORNEY BY PING WANG, DATED AUGUST 31, 2015Exhibit 4.21授权委托书Power of Attorney本人王平，持有中华人民共和国身份证（号码：***************01x），通讯地址为广东省，系拥有北京中传视讯科技有限公司（“中传视讯”）19.9872%股权（“相关股权”）的股东，就相关股权，特此不可撤销地授权中传天下信息科技（深圳）有限公司（“深圳中传天下”）在本授权委托书的有效期内行使如下权利：The undersigned, Wang Ping, a person with the PRC identification card number of ***************01x, with address at Guangdong, and a holder of19.9872% of the entire registered capital (“Shares”) in Beijing Mobile Vision Technology Co., Ltd. (“Mobile Vision”), hereby irrevocably authorize ZhongchuanTianxia Information Technology (Shenzhen) Co., Ltd. (“WFOE”) to exercise the following rights relating to Shares during the term of this Power of Attorney:授权深圳中传天下作为本人唯一的排他的代理人就有关相关股权的事宜全权代表本人行使包括但不限于如下的权利：1）参加中传视讯的股东会；2）行使按照法律和中传视讯章程规定本人所享有的全部股东权利和股东表决权，包括但不限于出售或转让或质押或处置相关股权的全部或任何一部分；以及3）作为本人的授权代表指定和任命中传视讯的法定代表人、董事和/或执行董事、监事、经理以及其他高级管理人员等。但中传视讯利用该等授权做出违反中华人民共和国法律的决定无效。WFOE is hereby authorized to act on behalf of myself as my exclusive agent and attorney with respect to all matters concerning My Shareholding, includingwithout limitation: 1) attending shareholders’ meetings of Mobile Vision; 2) exercising all the shareholder’s rights and shareholder’s voting rights I am entitled tounder the laws of China and Articles of Association of Mobile Vision, including but not limited to the sale or transfer or pledge or disposition of My Shareholding inpart or in whole; and 3) designating and appointing on behalf of myself the legal representative, director and/or executive director, supervisor, manager and othersenior management members of Mobile Vision. However, the decision made by Mobile Vision taking advantage of the power of attorney which is against the PRClaws shall be null and void.1深圳中传天下将有权在授权范围内代表本人签署独家购买权协议（本人应要求作为协议方）中约定的转让协议，如期履行本人作为协议一方的与本授权委托书同日签署的股权质押协议和独家购买权协议，该权利的行使将不对本授权形成任何限制。Without limiting the generality of the powers granted hereunder, WFOE shall have the power and authority under this Power of Attorney to execute theTransfer Contracts stipulated in Exclusive Option Agreement, to which I am required to be a party, on behalf of myself, and to effect the terms of the Share PledgeAgreement and Exclusive Option Agreement, both dated the date hereof, to which I am a party.深圳中传天下就相关股权的一切行为均视为本人的行为，签署的一切文件均视为本人签署，本人会予以承认。All the actions associated with Shares conducted by WFOE shall be deemed as my own actions, and all the documents related to Shares executed by WFOEshall be deemed to be executed by me. I hereby acknowledge and ratify those actions and/or documents by the WFOE.深圳中传天下有转委托权，可以就上述事项的办理自行再委托其他人或单位而不必事先通知本人或获得本人的同意。WFOE is entitled to reauthorize or assign its rights related to the aforesaid matters to any other person or entity at its own discretion and without giving priornotice to me or obtaining my consent.在本人为中传视讯的股东期间，本授权委托书不可撤销并持续有效，自授权委托书签署之日起算。This Power of Attorney is coupled with an interest and shall be irrevocable and continuously valid from the date of execution of this Power of Attorney, solong as I am a shareholder of Mobile Vision.本授权委托书期间，本人特此放弃已经通过本授权委托书授权给深圳中传天下的与相关股权有关的所有权利，不再自行行使该等权利。During the term of this Power of Attorney, I hereby waive all the rights associated with Shares, which have been authorized to WFOE through this Power ofAttorney, and shall not exercise such rights by myself.本授权委托书以中文和英文书就，中英文版本如有冲突，应以中文版为准。This Power of Attorney is written in Chinese and English; in case there is any conflict between the Chinese version and the English version, the Chineseversion shall prevail.王平Wang Ping签署：By:日期：年月日Date:2EX4.22 8 f20f2017ex422_luokung.htm POWER OF ATTORNEY BY DONGLAI LIU, DATED AUGUST 31, 2015Exhibit 4.22授权委托书Power of Attorney本人刘东来，持有中华人民共和国身份证（号码：***************912），通讯地址为: ，系拥有北京中传视讯科技有限公司（“中传视讯”）4.1035%股权（“相关股权”）的股东，就相关股权，特此不可撤销地授权中传天下信息科技（深圳）有限公司（“深圳中传天下”）在本授权委托书的有效期内行使如下权利：The undersigned, Liu Donglai, a person with the PRC identification card number of ***************912, with address at: , and a holder of 4.1035% of theentire registered capital (“Shares”) in Beijing Mobile Vision Technology Co., Ltd. (“Mobile Vision”), hereby irrevocably authorize Zhongchuan Tianxia InformationTechnology (Shenzhen) Co., Ltd. (“WFOE”) to exercise the following rights relating to Shares during the term of this Power of Attorney:授权深圳中传天下作为本人唯一的排他的代理人就有关相关股权的事宜全权代表本人行使包括但不限于如下的权利：1）参加中传视讯的股东会；2）行使按照法律和中传视讯章程规定本人所享有的全部股东权利和股东表决权，包括但不限于出售或转让或质押或处置相关股权的全部或任何一部分；以及3）作为本人的授权代表指定和任命中传视讯的法定代表人、董事和/或执行董事、监事、经理以及其他高级管理人员等。但中传视讯利用该等授权做出违反中华人民共和国法律的决定无效。WFOE is hereby authorized to act on behalf of myself as my exclusive agent and attorney with respect to all matters concerning My Shareholding, includingwithout limitation: 1) attending shareholders’ meetings of Mobile Vision; 2) exercising all the shareholder’s rights and shareholder’s voting rights I am entitled tounder the laws of China and Articles of Association of Mobile Vision, including but not limited to the sale or transfer or pledge or disposition of My Shareholding inpart or in whole; and 3) designating and appointing on behalf of myself the legal representative, director and/or executive director, supervisor, manager and othersenior management members of Mobile Vision. However, the decision made by Mobile Vision taking advantage of the power of attorney which is against the PRClaws shall be null and void.1深圳中传天下将有权在授权范围内代表本人签署独家购买权协议（本人应要求作为协议方）中约定的转让协议，如期履行本人作为协议一方的与本授权委托书同日签署的股权质押协议和独家购买权协议，该权利的行使将不对本授权形成任何限制。Without limiting the generality of the powers granted hereunder, WFOE shall have the power and authority under this Power of Attorney to execute theTransfer Contracts stipulated in Exclusive Option Agreement, to which I am required to be a party, on behalf of myself, and to effect the terms of the Share PledgeAgreement and Exclusive Option Agreement, both dated the date hereof, to which I am a party.深圳中传天下就相关股权的一切行为均视为本人的行为，签署的一切文件均视为本人签署，本人会予以承认。All the actions associated with Shares conducted by WFOE shall be deemed as my own actions, and all the documents related to Shares executed by WFOEshall be deemed to be executed by me. I hereby acknowledge and ratify those actions and/or documents by the WFOE.深圳中传天下有转委托权，可以就上述事项的办理自行再委托其他人或单位而不必事先通知本人或获得本人的同意。WFOE is entitled to reauthorize or assign its rights related to the aforesaid matters to any other person or entity at its own discretion and without giving priornotice to me or obtaining my consent.在本人为中传视讯的股东期间，本授权委托书不可撤销并持续有效，自授权委托书签署之日起算。This Power of Attorney is coupled with an interest and shall be irrevocable and continuously valid from the date of execution of this Power of Attorney, solong as I am a shareholder of Mobile Vision.本授权委托书期间，本人特此放弃已经通过本授权委托书授权给深圳中传天下的与相关股权有关的所有权利，不再自行行使该等权利。During the term of this Power of Attorney, I hereby waive all the rights associated with Shares, which have been authorized to WFOE through this Power ofAttorney, and shall not exercise such rights by myself.本授权委托书以中文和英文书就，中英文版本如有冲突，应以中文版为准。This Power of Attorney is written in Chinese and English; in case there is any conflict between the Chinese version and the English version, the Chineseversion shall prevail.刘东来Liu Donglai签署：By:日期：年月日Date:2EX4.23 9 f20f2017ex423_luokung.htm POWER OF ATTORNEY BY XUESONG SONG, DATED AUGUST 31, 2015Exhibit 4.23授权委托书Power of Attorney本人宋雪松，持有中华人民共和国身份证（号码：***************417），通讯地址为，系拥有北京中传视讯科技有限公司（“中传视讯”）61.8245%股权（“相关股权”）的股东，就相关股权，特此不可撤销地授权中传天下信息科技（深圳）有限公司（“深圳中传天下”）在本授权委托书的有效期内行使如下权利：The undersigned, Song Xuesong, a person with the PRC identification card number of ***************417, with address at , and a holder of 61.8245% ofthe entire registered capital (“Shares”) in Beijing Mobile Vision Technology Co., Ltd. (“Mobile Vision”), hereby irrevocably authorize Zhongchuan TianxiaInformation Technology (Shenzhen) Co., Ltd. (“WFOE”) to exercise the following rights relating to Shares during the term of this Power of Attorney:授权深圳中传天下作为本人唯一的排他的代理人就有关相关股权的事宜全权代表本人行使包括但不限于如下的权利：1）参加中传视讯的股东会；2）行使按照法律和中传视讯章程规定本人所享有的全部股东权利和股东表决权，包括但不限于出售或转让或质押或处置相关股权的全部或任何一部分；以及3）作为本人的授权代表指定和任命中传视讯的法定代表人、董事和/或执行董事、监事、经理以及其他高级管理人员等。但中传视讯利用该等授权做出违反中华人民共和国法律的决定无效。WFOE is hereby authorized to act on behalf of myself as my exclusive agent and attorney with respect to all matters concerning My Shareholding, includingwithout limitation: 1) attending shareholders’ meetings of Mobile Vision; 2) exercising all the shareholder’s rights and shareholder’s voting rights I am entitled tounder the laws of China and Articles of Association of Mobile Vision, including but not limited to the sale or transfer or pledge or disposition of My Shareholding inpart or in whole; and 3) designating and appointing on behalf of myself the legal representative, director and/or executive director, supervisor, manager and othersenior management members of Mobile Vision. However, the decision made by Mobile Vision taking advantage of the power of attorney which is against the PRClaws shall be null and void.1深圳中传天下将有权在授权范围内代表本人签署独家购买权协议（本人应要求作为协议方）中约定的转让协议，如期履行本人作为协议一方的与本授权委托书同日签署的股权质押协议和独家购买权协议，该权利的行使将不对本授权形成任何限制。Without limiting the generality of the powers granted hereunder, WFOE shall have the power and authority under this Power of Attorney to execute theTransfer Contracts stipulated in Exclusive Option Agreement, to which I am required to be a party, on behalf of myself, and to effect the terms of the Share PledgeAgreement and Exclusive Option Agreement, both dated the date hereof, to which I am a party.深圳中传天下就相关股权的一切行为均视为本人的行为，签署的一切文件均视为本人签署，本人会予以承认。All the actions associated with Shares conducted by WFOE shall be deemed as my own actions, and all the documents related to Shares executed by WFOEshall be deemed to be executed by me. I hereby acknowledge and ratify those actions and/or documents by the WFOE.深圳中传天下有转委托权，可以就上述事项的办理自行再委托其他人或单位而不必事先通知本人或获得本人的同意。WFOE is entitled to reauthorize or assign its rights related to the aforesaid matters to any other person or entity at its own discretion and without giving priornotice to me or obtaining my consent.在本人为中传视讯的股东期间，本授权委托书不可撤销并持续有效，自授权委托书签署之日起算。This Power of Attorney is coupled with an interest and shall be irrevocable and continuously valid from the date of execution of this Power of Attorney, solong as I am a shareholder of Mobile Vision.本授权委托书期间，本人特此放弃已经通过本授权委托书授权给深圳中传天下的与相关股权有关的所有权利，不再自行行使该等权利。During the term of this Power of Attorney, I hereby waive all the rights associated with Shares, which have been authorized to WFOE through this Power ofAttorney, and shall not exercise such rights by myself.本授权委托书以中文和英文书就，中英文版本如有冲突，应以中文版为准。This Power of Attorney is written in Chinese and English; in case there is any conflict between the Chinese version and the English version, the Chineseversion shall prevail.宋雪松Song Xuesong签署：By:日期：年月日Date:2EX8.1 10 f20f2017ex81_luokung.htm LIST OF SUBSIDIARIES AND CONSOLIDATED VARIABLE INTEREST ENTITIESExhibit 8.1List of Subsidiaries of the CompanyName of EntityJurisdiction of Incorporation/OrganizationLK Technology Ltd.British Virgin IslandsTopsky Infotech Holdings Pte Ltd.SingaporeSuperengine Holdings LimitedBritish Virgin IslandsMMB LimitedHong KongMobile Media (China Limited)Hong KongZhong Chuan Tian Xia Information and Technology (Beijing) LimitedBeijing, PRCZhong Chuan Xia Information and Technology (Shenzhen) LimitedShenzhen, PRCBeijing Zhong Chuan Shi Xun Technology Limited (VIE Entity)Beijing, PRCJiangsu Zhong Chuan Rui You Information and Technology Limited (VIE Entity)Jiangsu, PRCHuoerguosi Luokuang Information and Technology Limited (VIE Entity)Huoerguosi, PRCShenzhen Jiu Zhou Shi Dai Digital Technology LimitedShenzhen, PRCEX10.1 11 f20f2017ex101_luokung.htm EMPLOYMENT AGREEMENT, DATED AUGUST 19, 2018, BETWEEN LUOKUNG TECHNOLOGY CORP. AND XUESONGSONGExhibit 10.1EMPLOYMENT AGREEMENTThis EMPLOYMENT AGREEMENT (the “Agreement”) is made and entered into as of this 19 day of August, 2018 (the “Effective Date”), by and between LuokungTechnology Corp., a British Virgin Islands corporation (the “Company”) and Xuesong Song (the “Executive”), a Chinese citizen.WITNESSETH:WHEREAS, the parties desire to enter into this Agreement setting forth the terms and conditions of the employment relationship between the Executiveand the Company.NOW, THEREFORE, in consideration of the foregoing premises and the mutual covenants and agreements contained herein, the parties hereto agree asfollows:1. EMPLOYMENT.1.1 Agreement to Employ. The Company hereby agrees to employ Executive, and Executive hereby agrees to serve, subject to the provisions of thisAgreement, as an officer and employee of the Company.1.2 Duties and Schedule. Executive shall serve as the Company’s Chief Executive Officer (“CEO”). The responsibilities of the Executive shall be subject tothe bylaws of the Company and determined by the Board of Directors of the Company (the “Board”). The Executive shall report directly to the Board and shall havesuch responsibilities as designated by the Board of the Company to the extent that such responsibilities are not inconsistent with all applicable laws, regulationsand rules. Executive shall devote his best efforts and all of his business time to his position with the Company during the Term.2. TERM OF EMPLOYMENT. Unless Executive’s employment shall sooner terminate pursuant to Section 4, the Company shall employ Executive for a fouryear term commencing on the Effective Date (the “Term”), which Term shall be renewable upon mutual agreement of the Company and the Executive, as approved bythe Board.3. COMPENSATION.3.1 Salary. Executive’s salary during the Term shall be $Nil.3.2 Bonus. At the sole discretion of the Board, or any committee duly designated by the Board and authorized to act thereto, the Executive shall be eligiblefor an annual cash bonus.3.3 Vacation. Executive shall be entitled to 8 days of paid vacation per year. In the event that Executive remains employed by the Company for 3 years ormore, Executive shall be entitled to 12 days of paid vacation.3.4 Business Expenses. Executive shall be reimbursed by the Company for all ordinary and necessary expenses incurred by Executive; provided that theyare incurred and approved in writing in accordance with the Company’s expense policy.3.5 Benefits. During the Term, Executive shall be allowed to participate, on the same basis generally as other employees of the Company, in all generalemployee benefit plans and programs, including improvements or modifications of the same, which may exist as of the Effective Date or thereafter and which aremade available by the Company to all or substantially all of its employees. Such benefits, plans, and programs may include, without limitation, any health, and dentalinsurance or 401K programs, if and when instituted. Any benefit plan currently existing or instituted by the Company after the Effective Date may be altered, changeor discontinued by the Company at its sole discretion and at any time without obligation of any nature to Executive. Except as specifically provided herein, nothingin this Agreement is to be construed or interpreted to increase or alter in any way the rights, participation, coverage, or benefits under such benefit plans orprograms to other than those provided to other employees pursuant to the terms and conditions of such benefit plans and programs. 14. TERMINATION.4.1 Death. This Agreement shall terminate immediately upon the death of Executive, and Executive’s estate or Executive’s legal representative, as the casemay be, shall be entitled to Executive’s accrued and unpaid Salary as of the date of Executive’s death, plus all other compensation and benefits that were vestedthrough the date of Executive’s death.4.2 Disability. In the event of Executive’s Disability, this Agreement shall terminate and Executive shall be entitled to (a) accrued and unpaid Salary andvacation through the first date that a Disability is determined; and (b) all other compensation and benefits that were vested through the first date that a Disabilityhas been determined. “Disability” means the good faith determination of the Board that Executive has become so physically or mentally incapacitated or disabled asto be unable to satisfactorily perform his duties hereunder for a period of ninety (90) consecutive calendar days or for one hundred twenty (120) days in any threehundred sixty (360) day period, such determination based upon a certificate as to such physical or mental disability issued by a licensed physician and/orpsychiatrist (as the case may be) mutually agreed upon by Executive and the Company.4.3 Termination by Company for Cause. The Company may terminate the Executive for Cause and such termination shall take effect upon the receipt byExecutive of the Notice of Termination. Upon the effective date of the termination for Cause, Executive shall be solely entitled to accrued and unpaid Salary throughsuch effective date. “Cause” means: (i) engaging in any act, omission or misconduct that is injurious to the Company or an affiliate; (ii) gross negligence or willfulmisconduct in connection with the performance of duties; (iii) conviction of a criminal offense (other than minor traffic offenses); (iv) fraud, embezzlement ormisappropriation of funds or property of the Company or an affiliate; (v) material breach of any term of any employment or other services, confidentiality, intellectualproperty or noncompetition agreements, if any, between the Executive and the Company or an affiliate; (vi) the entry of an order duly issued by any regulatoryagency (including federal, state and local regulatory agencies and selfregulatory bodies) having jurisdiction over the Company or an affiliate requiring the removalof the Executive from any office held with the Company or prohibiting the Executive from participating in the business or affairs of the Company or any affiliate; or(vii) the revocation or threatened revocation of any of the Company’s or an affiliate’s government licenses, permits or approvals, which is primarily due to theExecutive’s action or inaction and such revocation or threatened revocation would be alleviated or mitigated in any material respect by the termination of theExecutive’s employment or services with the Company or an affiliate. 4.4 Voluntary Termination by Executive. The Executive may voluntarily terminate his employment for any reason and such termination shall take effect 30days after the receipt by Company of the Notice of Termination. Upon the effective date of such termination, Executive shall be entitled to (a) accrued and unpaidSalary and vacation through such termination date; and (b) all other compensation and benefits that were vested through such termination date. In the eventExecutive is terminated without notice, it shall be deemed a termination by the Company for Cause.4.5 Notice of Termination. Any termination of the employment by the Company or the Executive shall be communicated by a notice in accordance withSection 8.4 of this Agreement (the “Notice of Termination”). Such notice shall (a) indicate the specific termination provision in this Agreement relied upon and (b) ifthe termination is for Cause, the date on which the Executive’s employment is to be terminated.4.6 Severance. The Executive shall not be entitled to severance payments upon any termination provided in Section 4 herein.5. EMPLOYEE’S REPRESENTATION. The Executive represents and warrants to the Company that: (a) he is subject to no contractual, fiduciary or otherobligation which may affect the performance of his duties under this Agreement; (b) he has terminated, in accordance with their terms, any contractual obligationwhich may affect his performance under this Agreement; and (c) his employment with the Company will not require him to use or disclose proprietary or confidentialinformation of any other person or entity.26. CONFIDENTIAL INFORMATION Except as permitted or directed by the Board of Directors of the Company in writing, during the time the Executive isemployed by the Company or at any time thereafter, the Executive shall not use for his personal purposes nor divulge, furnish, or make accessible to anyone or usein any way (other than in the ordinary course of the business of the Company) any confidential or secret information or knowledge of the Company, whetherdeveloped by himself or by others. Such confidential and/or secret information encompassed by this Section 6 includes, but is not limited to, the Company’scustomer and supplier lists, business plans, software, systems, and financial, marketing, and personnel information. The Executive agrees to refrain from any acts oromissions that would reduce the value of any confidential or secret knowledge or information to the Company, both during his employment hereunder and at anytime after the termination of his employment. The Executive’s obligations of confidentiality under this Section 6 shall not apply to any knowledge or information thatis now published publicly or that subsequently becomes generally publicly known, other than as a direct or indirect result of a breach of this Agreement by theExecutive.7. NONCOMPETITION: NONSOLICITATION; INVENTIONS.7.1 NonCompetition. During the employment of the Executive under this Agreement and for a period of six (6) months after termination of suchemployment, the Executive shall not at any time compete on his own behalf, or on behalf of any other person or entity, with the Company or any of its affiliateswithin all territories in which the Company does business with respect to the business of the Company or any of its affiliates as such business shall be conductedon the date hereof or during the employment of the Executive under this Agreement. The ownership by the Executive of not more than 5% of a corporation,partnership or other enterprise shall not constitute a violation hereof.7.2 NonSolicitation. During the employment of the Executive under this Agreement and thereafter Executive shall not at any time (i) solicit or induce, onhis own behalf or on behalf of any other person or entity, any employee of the Company or any of its affiliates to leave the employ of the Company or any of itsaffiliates; or (ii) solicit or induce, on his own behalf or on behalf of any other person or entity, any customer or Prospective Customer of the Company or any of theirrespective affiliates to reduce its business with the Company or any of its affiliates. For the purposes of this Agreement, “Prospective Customer” shall mean anyindividual, corporation, trust or other business entity which has either (a) entered into a nondisclosure agreement with the Company or any Company subsidiary oraffiliate or (b) has within the preceding 12 months received a currently pending and not rejected written proposal in reasonable detail from the Company or any ofthe Company’s subsidiary or affiliate.7.3 Inventions and Patents. The Company shall be entitled to the sole benefit and exclusive ownership of any inventions or improvements in products,processes, or other things that may be made or discovered by Executive while he is in the service of the Company, and all patents for the same. During the Term,Executive shall do all acts necessary or required by the Company to give effect to this section and, following the Term, Executive shall do all acts reasonablynecessary or required by the Company to give effect to this section. In all cases, the Company shall pay all costs and fees associated with such acts by Executive.7.4 Return of Property. The Executive agrees that all property in the Executive’s possession that he obtains or is assigned in the course of his employmentwith the Company, including, without limitation, all documents, reports, manuals, memoranda, customer lists, credit cards, keys, access cards, and all other propertyrelating in any way to the business of the Company, is the exclusive property of the Company, even if the Executive authored, created, or assisted in authoring orcreating such property. The Executive shall return to the Company all such property immediately upon termination of employment or at such earlier time as theCompany may request.7.5Court Ordered Revisions.If any portion of this Section 7 is found by a court of competent jurisdiction to be invalid or unenforceable, but would be validand enforceable if modified, this Section 7 shall apply with such modifications necessary to make this Section 7 valid and enforceable. Any portion of this Section 7not required to be so modified shall remain in full force and effect and not be affected thereby.7.6 Specific Performance. The Executive acknowledges that the remedy at law for any breach of any of the provisions of Section 7 will be inadequate, andthat the Company shall be entitled, in addition to any remedy at law or in equity, to preliminary and permanent injunctive relief and specific performance.38. MISCELLANEOUS.8.1 Indemnification. The Company and each of its subsidiaries shall, to the maximum extent provided under applicable law, indemnify and hold Executiveharmless from and against any expenses, including reasonable attorney’s fees, judgments, fines, settlements and other legally permissible amounts (“Losses”),incurred in connection with any proceeding arising out of, or related to, Executive’s employment by the Company, other than any such Losses incurred as a result ofExecutive’s negligence or willful misconduct. The Company shall, or shall cause a subsidiary thereof to, advance to Executive any expenses, including attorney’sfees and costs of settlement, incurred in defending any such proceeding to the maximum extent permitted by applicable law. Such costs and expenses incurred byExecutive in defense of any such proceeding shall be paid by the Company or applicable subsidiary in advance of the final disposition of such proceeding promptlyupon receipt by the Company of (a) written request for payment; (b) appropriate documentation evidencing the incurrence, amount and nature of the costs andexpenses for which payment is being sought; and (c) an undertaking adequate under applicable law made by or on behalf of Executive to repay the amounts soadvanced if it shall ultimately be determined pursuant to any nonappealable judgment or settlement that Executive is not entitled to be indemnified by the Companyor any subsidiary thereof. The Company will provide Executive with coverage under all directors and officers liability insurance policies that it has in effect duringthe Term, with no deductible to Executive. 8.2 Applicable Law. Except as may be otherwise provided herein, this Agreement shall be governed by and construed in accordance with the laws ofChina, applied without reference to principles of conflict of laws. Any dispute arising from or in connection with this Agreement shall be submitted to ShanghaiInternational Arbitration Center (the “Center”) for arbitration under the then effective rules of the Center. The arbitration award shall be the sole, binding, exclusiveand final remedy for resolving any dispute between the parties.8.3 Amendments. This Agreement may not be amended or modified otherwise than by a written agreement executed by the parties hereto or their respectivesuccessors or legal representatives.8.4 Notices. All notices and other communications hereunder shall be in writing and shall be given by handdelivery to the other party, by an internationalmail courier, or by registered or certified mail, return receipt requested, postage prepaid, addressed as follows:If to the Executive:Xuesong Song________________________________________________If to the Company:______________________________________Or to such other address as either party shall have furnished to the other in writing in accordance herewith. Notices and communications shall be effective whendelivered to the addressee.8.5 Withholding. The Company may withhold from any amounts payable under the Agreement, such federal, state and local income, unemployment, socialsecurity and similar employment related taxes and similar employment related withholdings as shall be required to be withheld pursuant to any applicable law orregulation.8.6 Severability. The invalidity or unenforceability of any provision of this Agreement shall not affect the validity or enforceability of any other provision ofthis Agreement and any such provision which is not valid or enforceable in whole shall be enforced to the maximum extent permitted by law.8.7 Captions. The captions of this Agreement are not part of the provisions and shall have no force or effect.48.8 Entire Agreement. This Agreement contains the entire agreement among the parties concerning the subject matter hereof and supersedes all prioragreements, understandings, discussions, negotiations and undertakings, whether written or oral, between the parties with respect thereto.8.9 Survival. The respective rights and obligations of the parties hereunder shall survive any termination of this Agreement or the Executive’s employmenthereunder to the extent necessary to the intended preservation of such rights and obligations.8.10 Waiver. Either Party's failure to enforce any provision or provisions of this Agreement shall not in any way be construed as a waiver of any suchprovision or provisions, or prevent that party thereafter from enforcing each and every other provision of this Agreement.8.11 Successors. This Agreement is personal to Executive and, without the prior express written consent of the Company, shall not be assignable byExecutive. This Agreement shall inure to the benefit of and be enforceable by Executive’s estate, heirs, beneficiaries, and/or legal representatives. This Agreementshall inure to the benefit of and be binding upon the Company and its successors and assigns.8.12 Joint Efforts/Counterparts. Preparation of this Agreement shall be deemed to be the joint effort of the parties hereto and shall not be construed moreseverely against any party. This Agreement may be signed in two or more counterparts, each of which shall be deemed an original and all of which together shallconstitute one and the same instrument.8.13 Representation by Counsel. Each Party hereby represents that it has had the opportunity to be represented by legal counsel of its choice inconnection with the negotiation and execution of this Agreement.IN WITNESS WHEREOF, the parties have executed this Agreement as of the day and year first above written.EXECUTIVE:LUOKUNG TECHNOLOGY CORP./s/ Xuesong Song/s/ Jie YuXuesong SongJie YuChief Financial Officer5EX10.2 12 f20f2017ex102_luokung.htm EMPLOYMENT AGREEMENT, DATED AUGUST 19, 2018, BY AND BETWEEN LUOKUNG TECHNOLOGY CORP. AND JIEYUExhibit 10.2EMPLOYMENT AGREEMENTThis EMPLOYMENT AGREEMENT (the “Agreement”) is made and entered into as of this 19 day of August, 2018 (the “Effective Date”), by and between LuokungTechnology Corp., a British Virgin Islands corporation (the “Company”) and Jie (Jay) Yu (the “Executive”), a Chinese citizen.WITNESSETH:WHEREAS, the parties desire to enter into this Agreement setting forth the terms and conditions of the employment relationship between the Executiveand the Company.NOW, THEREFORE, in consideration of the foregoing premises and the mutual covenants and agreements contained herein, the parties hereto agree asfollows:1. EMPLOYMENT.1.1 Agreement to Employ. The Company hereby agrees to employ Executive, and Executive hereby agrees to serve, subject to the provisions of thisAgreement, as an officer and employee of the Company.1.2 Duties and Schedule. Executive shall serve as the Company’s Chief Financial Officer, and be the Principal Financial Officer and Principal AccountingOfficer of the Company and responsible for all financial matters and management of the Company. The Executive shall report directly to the Company’s ChiefExecutive Officer and Board of Directors (the “Board”) and shall have such responsibilities as designated by the Chief Executive Officer or Board to the extent thatsuch responsibilities are not inconsistent with all applicable laws, regulations and rules. Executive shall devote his best efforts and all of his business time to hisposition with the Company during the Term.2. TERM OF EMPLOYMENT. Unless Executive’s employment shall sooner terminate pursuant to Section 4, the Company shall employ Executive for a fouryear term commencing on the Effective Date (the “Term”), which Term shall be renewable upon mutual agreement of the Company and the Executive, as approved bythe Board.3. COMPENSATION.3.1 Salary. Executive’s salary during the Term shall be RMB700,000 per year (the “Salary”), payable monthly.3.2 Bonus. At the sole discretion of the Board, or any committee duly designated by the Board and authorized to act thereto, the Executive shall be eligiblefor an annual cash bonus.3.3 Vacation. Executive shall be entitled to 8 days of paid vacation per year. In the event that Executive remains employed by the Company for 3 years ormore, Executive shall be entitled to 12 days of paid vacation.3.4 Business Expenses. Executive shall be reimbursed by the Company for all ordinary and necessary expenses incurred by Executive; provided that theyare incurred and approved in writing in accordance with the Company’s expense policy.3.5 Benefits. During the Term, Executive shall be allowed to participate, on the same basis generally as other employees of the Company, in all generalemployee benefit plans and programs, including improvements or modifications of the same, which may exist as of the Effective Date or thereafter and which aremade available by the Company to all or substantially all of its employees. Such benefits, plans, and programs may include, without limitation, any health, and dentalinsurance or 401K programs, if and when instituted. Any benefit plan currently existing or instituted by the Company after the Effective Date may be altered, changeor discontinued by the Company at its sole discretion and at any time without obligation of any nature to Executive. Except as specifically provided herein, nothingin this Agreement is to be construed or interpreted to increase or alter in any way the rights, participation, coverage, or benefits under such benefit plans orprograms to other than those provided to other employees pursuant to the terms and conditions of such benefit plans and programs. 14. TERMINATION.4.1 Death. This Agreement shall terminate immediately upon the death of Executive, and Executive’s estate or Executive’s legal representative, as the casemay be, shall be entitled to Executive’s accrued and unpaid Salary as of the date of Executive’s death, plus all other compensation and benefits that were vestedthrough the date of Executive’s death.4.2 Disability. In the event of Executive’s Disability, this Agreement shall terminate and Executive shall be entitled to (a) accrued and unpaid Salary andvacation through the first date that a Disability is determined; and (b) all other compensation and benefits that were vested through the first date that a Disabilityhas been determined. “Disability” means the good faith determination of the Board that Executive has become so physically or mentally incapacitated or disabled asto be unable to satisfactorily perform his duties hereunder for a period of ninety (90) consecutive calendar days or for one hundred twenty (120) days in any threehundred sixty (360) day period, such determination based upon a certificate as to such physical or mental disability issued by a licensed physician and/orpsychiatrist (as the case may be) mutually agreed upon by Executive and the Company.4.3 Termination by Company for Cause. The Company may terminate the Executive for Cause and such termination shall take effect upon the receipt byExecutive of the Notice of Termination. Upon the effective date of the termination for Cause, Executive shall be solely entitled to accrued and unpaid Salary throughsuch effective date. “Cause” means: (i) engaging in any act, omission or misconduct that is injurious to the Company or an affiliate; (ii) gross negligence or willfulmisconduct in connection with the performance of duties; (iii) conviction of a criminal offense (other than minor traffic offenses); (iv) fraud, embezzlement ormisappropriation of funds or property of the Company or an affiliate; (v) material breach of any term of any employment or other services, confidentiality, intellectualproperty or noncompetition agreements, if any, between the Executive and the Company or an affiliate; (vi) the entry of an order duly issued by any regulatoryagency (including federal, state and local regulatory agencies and selfregulatory bodies) having jurisdiction over the Company or an affiliate requiring the removalof the Executive from any office held with the Company or prohibiting the Executive from participating in the business or affairs of the Company or any affiliate; or(vii) the revocation or threatened revocation of any of the Company’s or an affiliate’s government licenses, permits or approvals, which is primarily due to theExecutive’s action or inaction and such revocation or threatened revocation would be alleviated or mitigated in any material respect by the termination of theExecutive’s employment or services with the Company or an affiliate. 4.4 Voluntary Termination by Executive. The Executive may voluntarily terminate his employment for any reason and such termination shall take effect 30days after the receipt by Company of the Notice of Termination. Upon the effective date of such termination, Executive shall be entitled to (a) accrued and unpaidSalary and vacation through such termination date; and (b) all other compensation and benefits that were vested through such termination date. In the eventExecutive is terminated without notice, it shall be deemed a termination by the Company for Cause.4.5 Notice of Termination. Any termination of the employment by the Company or the Executive shall be communicated by a notice in accordance withSection 8.4 of this Agreement (the “Notice of Termination”). Such notice shall (a) indicate the specific termination provision in this Agreement relied upon and (b) ifthe termination is for Cause, the date on which the Executive’s employment is to be terminated.4.6 Severance. The Executive shall not be entitled to severance payments upon any termination provided in Section 4 herein.5. EMPLOYEE’S REPRESENTATION. The Executive represents and warrants to the Company that: (a) he is subject to no contractual, fiduciary or otherobligation which may affect the performance of his duties under this Agreement; (b) he has terminated, in accordance with their terms, any contractual obligationwhich may affect his performance under this Agreement; and (c) his employment with the Company will not require him to use or disclose proprietary or confidentialinformation of any other person or entity.26. CONFIDENTIAL INFORMATION Except as permitted or directed by the Board of Directors of the Company in writing, during the time the Executive isemployed by the Company or at any time thereafter, the Executive shall not use for his personal purposes nor divulge, furnish, or make accessible to anyone or usein any way (other than in the ordinary course of the business of the Company) any confidential or secret information or knowledge of the Company, whetherdeveloped by himself or by others. Such confidential and/or secret information encompassed by this Section 6 includes, but is not limited to, the Company’scustomer and supplier lists, business plans, software, systems, and financial, marketing, and personnel information. The Executive agrees to refrain from any acts oromissions that would reduce the value of any confidential or secret knowledge or information to the Company, both during his employment hereunder and at anytime after the termination of his employment. The Executive’s obligations of confidentiality under this Section 6 shall not apply to any knowledge or information thatis now published publicly or that subsequently becomes generally publicly known, other than as a direct or indirect result of a breach of this Agreement by theExecutive.7. NONCOMPETITION: NONSOLICITATION; INVENTIONS.7.1 NonCompetition. During the employment of the Executive under this Agreement and for a period of six (6) months after termination of suchemployment, the Executive shall not at any time compete on his own behalf, or on behalf of any other person or entity, with the Company or any of its affiliateswithin all territories in which the Company does business with respect to the business of the Company or any of its affiliates as such business shall be conductedon the date hereof or during the employment of the Executive under this Agreement. The ownership by the Executive of not more than 5% of a corporation,partnership or other enterprise shall not constitute a violation hereof.7.2 NonSolicitation. During the employment of the Executive under this Agreement and thereafter Executive shall not at any time (i) solicit or induce, onhis own behalf or on behalf of any other person or entity, any employee of the Company or any of its affiliates to leave the employ of the Company or any of itsaffiliates; or (ii) solicit or induce, on his own behalf or on behalf of any other person or entity, any customer or Prospective Customer of the Company or any of theirrespective affiliates to reduce its business with the Company or any of its affiliates. For the purposes of this Agreement, “Prospective Customer” shall mean anyindividual, corporation, trust or other business entity which has either (a) entered into a nondisclosure agreement with the Company or any Company subsidiary oraffiliate or (b) has within the preceding 12 months received a currently pending and not rejected written proposal in reasonable detail from the Company or any ofthe Company’s subsidiary or affiliate.7.3 Inventions and Patents. The Company shall be entitled to the sole benefit and exclusive ownership of any inventions or improvements in products,processes, or other things that may be made or discovered by Executive while he is in the service of the Company, and all patents for the same. During the Term,Executive shall do all acts necessary or required by the Company to give effect to this section and, following the Term, Executive shall do all acts reasonablynecessary or required by the Company to give effect to this section. In all cases, the Company shall pay all costs and fees associated with such acts by Executive.7.4 Return of Property. The Executive agrees that all property in the Executive’s possession that he obtains or is assigned in the course of his employmentwith the Company, including, without limitation, all documents, reports, manuals, memoranda, customer lists, credit cards, keys, access cards, and all other propertyrelating in any way to the business of the Company, is the exclusive property of the Company, even if the Executive authored, created, or assisted in authoring orcreating such property. The Executive shall return to the Company all such property immediately upon termination of employment or at such earlier time as theCompany may request.7.5Court Ordered Revisions.If any portion of this Section 7 is found by a court of competent jurisdiction to be invalid or unenforceable, but would be validand enforceable if modified, this Section 7 shall apply with such modifications necessary to make this Section 7 valid and enforceable. Any portion of this Section 7not required to be so modified shall remain in full force and effect and not be affected thereby.7.6 Specific Performance. The Executive acknowledges that the remedy at law for any breach of any of the provisions of Section 7 will be inadequate, andthat the Company shall be entitled, in addition to any remedy at law or in equity, to preliminary and permanent injunctive relief and specific performance.38. MISCELLANEOUS.8.1 Indemnification. The Company and each of its subsidiaries shall, to the maximum extent provided under applicable law, indemnify and hold Executiveharmless from and against any expenses, including reasonable attorney’s fees, judgments, fines, settlements and other legally permissible amounts (“Losses”),incurred in connection with any proceeding arising out of, or related to, Executive’s employment by the Company, other than any such Losses incurred as a result ofExecutive’s negligence or willful misconduct. The Company shall, or shall cause a subsidiary thereof to, advance to Executive any expenses, including attorney’sfees and costs of settlement, incurred in defending any such proceeding to the maximum extent permitted by applicable law. Such costs and expenses incurred byExecutive in defense of any such proceeding shall be paid by the Company or applicable subsidiary in advance of the final disposition of such proceeding promptlyupon receipt by the Company of (a) written request for payment; (b) appropriate documentation evidencing the incurrence, amount and nature of the costs andexpenses for which payment is being sought; and (c) an undertaking adequate under applicable law made by or on behalf of Executive to repay the amounts soadvanced if it shall ultimately be determined pursuant to any nonappealable judgment or settlement that Executive is not entitled to be indemnified by the Companyor any subsidiary thereof. The Company will provide Executive with coverage under all directors and officers liability insurance policies that it has in effect duringthe Term, with no deductible to Executive. 8.2 Applicable Law. Except as may be otherwise provided herein, this Agreement shall be governed by and construed in accordance with the laws ofChina, applied without reference to principles of conflict of laws. Any dispute arising from or in connection with this Agreement shall be submitted to ShanghaiInternational Arbitration Center (the “Center”) for arbitration under the then effective rules of the Center. The arbitration award shall be the sole, binding, exclusiveand final remedy for resolving any dispute between the parties.8.3 Amendments. This Agreement may not be amended or modified otherwise than by a written agreement executed by the parties hereto or their respectivesuccessors or legal representatives.8.4 Notices. All notices and other communications hereunder shall be in writing and shall be given by handdelivery to the other party, by an internationalmail courier, or by registered or certified mail, return receipt requested, postage prepaid, addressed as follows:If to the Executive:Jie Yu________________________________________If to the Company:______________________________________Or to such other address as either party shall have furnished to the other in writing in accordance herewith. Notices and communications shall be effective whendelivered to the addressee.8.5 Withholding. The Company may withhold from any amounts payable under the Agreement, such federal, state and local income, unemployment, socialsecurity and similar employment related taxes and similar employment related withholdings as shall be required to be withheld pursuant to any applicable law orregulation.8.6 Severability. The invalidity or unenforceability of any provision of this Agreement shall not affect the validity or enforceability of any other provision ofthis Agreement and any such provision which is not valid or enforceable in whole shall be enforced to the maximum extent permitted by law.48.7 Captions. The captions of this Agreement are not part of the provisions and shall have no force or effect.8.8 Entire Agreement. This Agreement contains the entire agreement among the parties concerning the subject matter hereof and supersedes all prioragreements, understandings, discussions, negotiations and undertakings, whether written or oral, between the parties with respect thereto.8.9 Survival. The respective rights and obligations of the parties hereunder shall survive any termination of this Agreement or the Executive’s employmenthereunder to the extent necessary to the intended preservation of such rights and obligations.8.10 Waiver. Either Party's failure to enforce any provision or provisions of this Agreement shall not in any way be construed as a waiver of any suchprovision or provisions, or prevent that party thereafter from enforcing each and every other provision of this Agreement.8.11 Successors. This Agreement is personal to Executive and, without the prior express written consent of the Company, shall not be assignable byExecutive. This Agreement shall inure to the benefit of and be enforceable by Executive’s estate, heirs, beneficiaries, and/or legal representatives. This Agreementshall inure to the benefit of and be binding upon the Company and its successors and assigns.8.12 Joint Efforts/Counterparts. Preparation of this Agreement shall be deemed to be the joint effort of the parties hereto and shall not be construed moreseverely against any party. This Agreement may be signed in two or more counterparts, each of which shall be deemed an original and all of which together shallconstitute one and the same instrument.8.13 Representation by Counsel. Each Party hereby represents that it has had the opportunity to be represented by legal counsel of its choice inconnection with the negotiation and execution of this Agreement.IN WITNESS WHEREOF, the parties have executed this Agreement as of the day and year first above written.EXECUTIVE:LUOKUNG TECHNOLOGY CORP./s/ Jie Yu/s/ Xuesong SongJie YuXuesong SongChief Executive Officer5EX12.1 13 f20f2017ex121_luokung.htm CERTIFICATIONExhibit 12.1Certification by the Chief Executive OfficerPursuant to Section 302 of the SarbanesOxley Act of 2002I, Xuesong Song, the Chief Executive Officer of Luokung Technology Corp. (the “Company”), certify that:1.I have reviewed this transition report on Form 20F of the Company;2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statementsmade, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financialcondition, results of operations and cash flows of the Company as of, and for, the periods presented in this report;4.The Company’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange ActRules 13a15(e) and 15d15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a15(f) and 15d15(f)) for the Company andhave:(a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure thatmaterial information relating to the Company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during theperiod in which this report is being prepared;(b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, toprovide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance withgenerally accepted accounting principles;(c)Evaluated the effectiveness of the Company’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of thedisclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and(d)Disclosed in this report any change in the Company’s internal control over financial reporting that occurred during the period covered by the transition reportthat has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting; and5.The Company’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Company’sauditors and the audit committee of the Company’s board of directors (or persons performing the equivalent functions):(a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely toadversely affect the Company’s ability to record, process, summarize and report financial information; and(b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the Company’s internal control over financialreporting.Date: October 12, 2018By:/s/ Xuesong SongXuesong SongChief Executive Officer(principal executive officer)EX12.2 14 f20f2017ex122_luokung.htm CERTIFICATIONExhibit 12.2Certification by the Chief Financial OfficerPursuant to Section 302 of the SarbanesOxley Act of 2002I, Jie Yu, the Chief Financial Officer of Luokung Technology Corp. (the “Company”), certify that:1.I have reviewed this transition report on Form 20F of the Company;2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statementsmade, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financialcondition, results of operations and cash flows of the Company as of, and for, the periods presented in this report;4.The Company’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange ActRules 13a15(e) and 15d15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a15(f) and 15d15(f)) for the Company andhave:(a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure thatmaterial information relating to the Company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during theperiod in which this report is being prepared;(b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, toprovide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance withgenerally accepted accounting principles;(c)Evaluated the effectiveness of the Company’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of thedisclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and(d)Disclosed in this report any change in the Company’s internal control over financial reporting that occurred during the period covered by the transition reportthat has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting; and5.The Company’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Company’sauditors and the audit committee of the Company’s board of directors (or persons performing the equivalent functions):(a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely toadversely affect the Company’s ability to record, process, summarize and report financial information; and(b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the Company’s internal control over financialreporting.Date: October 12, 2018By:/s/ Jie YuJie YuChief Financial Officer(principal financial officer and principal accounting officer)EX13.1 15 f20f2017ex131_luokung.htm CERTIFICATIONExhibit 13.1Certification by the Chief Executive OfficerPursuant to Section 906 of the SarbanesOxley Act of 2002In connection with the Transition report on Form 20F of Luokung Technology Corp. (the “Company”) for the year ended December 31, 2017 as filed withthe Securities and Exchange Commission on the date hereof (the “Report”), I, Xuesong Song, Chairman and Chief Executive Officer of the Company, certify,pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the SarbanesOxley Act of 2002, that to my knowledge:(1)The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and(2)The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.Date: October 12, 2018By:/s/ Xuesong SongXuesong SongChief Executive Officer(principal executive officer)EX13.2 16 f20f2017ex132_luokung.htm CERTIFICATIONExhibit 13.2Certification by the Chief Financial OfficerPursuant to Section 906 of the SarbanesOxley Act of 2002In connection with the Transition report on Form 20F of Luokung Technology Corp. (the “Company”) for the year ended December 31, 2017 as filed withthe Securities and Exchange Commission on the date hereof (the “Report”), I, Jie Yu, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. Section1350, as adopted pursuant to Section 906 of the SarbanesOxley Act of 2002, that to my knowledge:(1)The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and(2)The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.Date: October 12, 2018By:/s/ Jie YuJie YuChief Financial Officer(principal financial officer and principal accounting officer)地址：Address:.b)陈蔚力Chen Weili地址：Address:c)王平Wang Ping地址：Address:17秘密文件 Strictly Confidentiald)刘东来Liu Donglai地址：Address:丙方：北京中传视讯科技有限公司Party C: Beijing Mobile Vision Technology Co., Ltd.地址：北京市朝阳区光华路9号SOHO3QLAB32Address: LAB32, SOHO3Q, No 9, Guanghua Road, Chaoyang District, Beijing.收件人：宋雪松Attn.: Song Xuesong14.3任何一方可按本条规定随时给其他各方发出通知来改变其接收通知的地址。Any Party may at any time change its address for notices by a notice delivered to the other Parties in accordance with the terms hereof.15.分割性Severability如果本协议有任何一条或多条规定根据任何法律或法规在任何方面被裁定为无效、不合法或不可执行，本协议其余规定的有效性、合法性或可执行性不应因此在任何方面受到影响或损害。各方应通过诚意磋商，争取以法律许可以及各方期望的最大限度内有效的规定取代那些无效、不合法或不可执行的规定，而该等有效的规定所产生的经济效果应尽可能与那些无效、不合法或不能强制执行的规定所产生的经济效果相似。In the event that one or several of the provisions of this Contract are found to be invalid, illegal or unenforceable in any aspect in accordance with any laws orregulations, the validity, legality or enforceability of the remaining provisions of this Contract shall not be affected or compromised in any respect. The Partiesshall strive in good faith to replace such invalid, illegal or unenforceable provisions with effective provisions that accomplish to the greatest extent permittedby law and the intentions of the Parties, and the economic effect of such effective provisions shall be as close as possible to the economic effect of thoseinvalid, illegal or unenforceable provisions.18秘密文件 Strictly Confidential16.附件Attachments本协议所列附件，为本协议不可分割的组成部分。The attachments set forth herein shall be an integral part of this Agreement.17.生效Effectiveness17.1本协议的任何修改、补充或变更，均须采用书面形式，经各方签字或盖章并按规定办理政府登记（如需）后生效。Any amendments, changes and supplements to this Agreement shall be in writing and shall become effective upon completion of the governmentalfiling procedures (if applicable) after the affixation of the signatures or seals of the Parties.17.2本协议以中文和英文书就，一式六份，质权人、所有出质人和丙方各持一份，具有同等效力；中英文版本如有冲突，应以中文版为准。This Agreement is written in Chinese and English in six copies. Each Pledgors, Pledgee and Party C shall hold one copy respectively. Each copy of thisAgreement shall have equal validity. In case there is any conflict between the Chinese version and the English version, the Chinese version shall prevail.本页其余部分刻意留为空白The Remainder of this page is intentionally left blank19秘密文件 Strictly Confidential有鉴于此，各方已使得经其授权的代表于文首所述日期签署了本股权质押协议并即生效，以昭信守。IN WITNESS WHEREOF, the Parties have caused their authorized representatives to execute this Equity Interest Pledge Agreement as of the date first abovewritten.甲方：中传天下信息科技（深圳）有限公司（盖章）Party A: Zhongchuan Tianxia Information Technology (Shenzhen) Co., Ltd. (Seal)签字：By:/s/ Hong Ting姓名：洪婷Name: Hong Ting职务：总经理Title: General Manager秘密文件 Strictly Confidential有鉴于此，各方已使得经其授权的代表于文首所述日期签署了本股权质押协议并即生效，以昭信守。IN WITNESS WHEREOF, the Parties have caused their authorized representatives to execute this Equity Interest Pledge Agreement as of the date first abovewritten.乙方：Party B:宋雪松Song Xuesong签署：By:/s/ Song Xuesong秘密文件 Strictly Confidential有鉴于此，各方已使得经其授权的代表于文首所述日期签署了本股权质押协议并即生效，以昭信守。IN WITNESS WHEREOF, the Parties have caused their authorized representatives to execute this Equity Interest Pledge Agreement as of the date first abovewritten.乙方：Party B:陈蔚力Chen Weili签字：By:/s/ Chen Weili秘密文件 Strictly Confidential有鉴于此，各方已使得经其授权的代表于文首所述日期签署了本股权质押协议并即生效，以昭信守。IN WITNESS WHEREOF, the Parties have caused their authorized representatives to execute this Equity Interest Pledge Agreement as of the date first abovewritten.乙方：Party B:王平Wang Ping签字：By:/s/ Wang Ping秘密文件 Strictly Confidential有鉴于此，各方已使得经其授权的代表于文首所述日期签署了本股权质押协议并即生效，以昭信守。IN WITNESS WHEREOF, the Parties have caused their authorized representatives to execute this Equity Interest Pledge Agreement as of the date first abovewritten.乙方：Party B:刘东来Liu Donglai签字：By:/s/ Liu Donglai秘密文件 Strictly Confidential有鉴于此，各方已使得经其授权的代表于文首所述日期签署了本股权质押协议并即生效，以昭信守。IN WITNESS WHEREOF, the Parties have caused their authorized representatives to execute this Equity Interest Pledge Agreement as of the date first abovewritten.丙方：北京中传视讯科技有限公司（盖章）Party B: Beijing Mobile Vision Technology Co., Ltd. (Seal)签字：By:/s/ Song Xuesong姓名：宋雪松Name: Song Xuesong职务：董事长Title: Chairman of the Board秘密文件 Strictly Confidential附件：Attachments:1.北京中传视讯科技有限公司股东名册；Shareholders' Register of Beijing Mobile Vision Technology Co., Ltd.;2.北京中传视讯科技有限公司的出资证明书；The Capital Contribution Certificate of Beijing Mobile Vision Technology Co., Ltd.;3.独家业务合作协议。Exclusive Business Cooperation Agreement.秘密文件 Strictly ConfidentialEX4.20 6 f20f2017ex420_luokung.htm POWER OF ATTORNEY BY WEILI CHEN, DATED AUGUST 31, 2015Exhibit 4.20授权委托书Power of Attorney本人陈蔚力，持有中华人民共和国身份证（号码：*************** 516），通讯地址为广东省，系拥有北京中传视讯科技有限公司（“中传视讯”）14.0848%股权（“相关股权”）的股东，就相关股权，特此不可撤销地授权中传天下信息科技（深圳）有限公司（“深圳中传天下”）在本授权委托书的有效期内行使如下权利：The undersigned, Chen Weili, a person with the PRC identification card number of ***************516, with address at: Guangdong, and a holder of14.0848% of the entire registered capital ("Shares") in Beijing Mobile Vision Technology Co., Ltd. ("Mobile Vision"), hereby irrevocably authorize ZhongchuanTianxia Information Technology (Shenzhen) Co., Ltd. ("WFOE") to exercise the following rights relating to Shares during the term of this Power of Attorney:授权深圳中传天下作为本人唯一的排他的代理人就有关相关股权的事宜全权代表本人行使包括但不限于如下的权利：1）参加中传视讯的股东会；2）行使按照法律和中传视讯章程规定本人所享有的全部股东权利和股东表决权，包括但不限于出售或转让或质押或处置相关股权的全部或任何一部分；以及3）作为本人的授权代表指定和任命中传视讯的法定代表人、董事和/或执行董事、监事、经理以及其他高级管理人员等。但中传视讯利用该等授权做出违反中华人民共和国法律的决定无效。WFOE is hereby authorized to act on behalf of myself as my exclusive agent and attorney with respect to all matters concerning My Shareholding, includingwithout limitation: 1) attending shareholders' meetings of Mobile Vision; 2) exercising all the shareholder's rights and shareholder's voting rights I am entitled tounder the laws of China and Articles of Association of Mobile Vision, including but not limited to the sale or transfer or pledge or disposition of My Shareholding inpart or in whole; and 3) designating and appointing on behalf of myself the legal representative, director and/or executive director, supervisor, manager and othersenior management members of Mobile Vision. However, the decision made by Mobile Vision taking advantage of the power of attorney which is against the PRClaws shall be null and void.1深圳中传天下将有权在授权范围内代表本人签署独家购买权协议（本人应要求作为协议方）中约定的转让协议，如期履行本人作为协议一方的与本授权委托书同日签署的股权质押协议和独家购买权协议，该权利的行使将不对本授权形成任何限制。Without limiting the generality of the powers granted hereunder, WFOE shall have the power and authority under this Power of Attorney to execute theTransfer Contracts stipulated in Exclusive Option Agreement, to which I am required to be a party, on behalf of myself, and to effect the terms of the Share PledgeAgreement and Exclusive Option Agreement, both dated the date hereof, to which I am a party.深圳中传天下就相关股权的一切行为均视为本人的行为，签署的一切文件均视为本人签署，本人会予以承认。All the actions associated with Shares conducted by WFOE shall be deemed as my own actions, and all the documents related to Shares executed by WFOEshall be deemed to be executed by me. I hereby acknowledge and ratify those actions and/or documents by the WFOE.深圳中传天下有转委托权，可以就上述事项的办理自行再委托其他人或单位而不必事先通知本人或获得本人的同意。WFOE is entitled to reauthorize or assign its rights related to the aforesaid matters to any other person or entity at its own discretion and without giving priornotice to me or obtaining my consent.在本人为中传视讯的股东期间，本授权委托书不可撤销并持续有效，自授权委托书签署之日起算。This Power of Attorney is coupled with an interest and shall be irrevocable and continuously valid from the date of execution of this Power of Attorney, solong as I am a shareholder of Mobile Vision.本授权委托书期间，本人特此放弃已经通过本授权委托书授权给深圳中传天下的与相关股权有关的所有权利，不再自行行使该等权利。During the term of this Power of Attorney, I hereby waive all the rights associated with Shares, which have been authorized to WFOE through this Power ofAttorney, and shall not exercise such rights by myself.本授权委托书以中文和英文书就，中英文版本如有冲突，应以中文版为准。This Power of Attorney is written in Chinese and English; in case there is any conflict between the Chinese version and the English version, the Chineseversion shall prevail.陈蔚力Chen Weili签署：By:日期：年月日Date:2EX4.21 7 f20f2017ex421_luokung.htm POWER OF ATTORNEY BY PING WANG, DATED AUGUST 31, 2015Exhibit 4.21授权委托书Power of Attorney本人王平，持有中华人民共和国身份证（号码：***************01x），通讯地址为广东省，系拥有北京中传视讯科技有限公司（“中传视讯”）19.9872%股权（“相关股权”）的股东，就相关股权，特此不可撤销地授权中传天下信息科技（深圳）有限公司（“深圳中传天下”）在本授权委托书的有效期内行使如下权利：The undersigned, Wang Ping, a person with the PRC identification card number of ***************01x, with address at Guangdong, and a holder of19.9872% of the entire registered capital (“Shares”) in Beijing Mobile Vision Technology Co., Ltd. (“Mobile Vision”), hereby irrevocably authorize ZhongchuanTianxia Information Technology (Shenzhen) Co., Ltd. (“WFOE”) to exercise the following rights relating to Shares during the term of this Power of Attorney:授权深圳中传天下作为本人唯一的排他的代理人就有关相关股权的事宜全权代表本人行使包括但不限于如下的权利：1）参加中传视讯的股东会；2）行使按照法律和中传视讯章程规定本人所享有的全部股东权利和股东表决权，包括但不限于出售或转让或质押或处置相关股权的全部或任何一部分；以及3）作为本人的授权代表指定和任命中传视讯的法定代表人、董事和/或执行董事、监事、经理以及其他高级管理人员等。但中传视讯利用该等授权做出违反中华人民共和国法律的决定无效。WFOE is hereby authorized to act on behalf of myself as my exclusive agent and attorney with respect to all matters concerning My Shareholding, includingwithout limitation: 1) attending shareholders’ meetings of Mobile Vision; 2) exercising all the shareholder’s rights and shareholder’s voting rights I am entitled tounder the laws of China and Articles of Association of Mobile Vision, including but not limited to the sale or transfer or pledge or disposition of My Shareholding inpart or in whole; and 3) designating and appointing on behalf of myself the legal representative, director and/or executive director, supervisor, manager and othersenior management members of Mobile Vision. However, the decision made by Mobile Vision taking advantage of the power of attorney which is against the PRClaws shall be null and void.1深圳中传天下将有权在授权范围内代表本人签署独家购买权协议（本人应要求作为协议方）中约定的转让协议，如期履行本人作为协议一方的与本授权委托书同日签署的股权质押协议和独家购买权协议，该权利的行使将不对本授权形成任何限制。Without limiting the generality of the powers granted hereunder, WFOE shall have the power and authority under this Power of Attorney to execute theTransfer Contracts stipulated in Exclusive Option Agreement, to which I am required to be a party, on behalf of myself, and to effect the terms of the Share PledgeAgreement and Exclusive Option Agreement, both dated the date hereof, to which I am a party.深圳中传天下就相关股权的一切行为均视为本人的行为，签署的一切文件均视为本人签署，本人会予以承认。All the actions associated with Shares conducted by WFOE shall be deemed as my own actions, and all the documents related to Shares executed by WFOEshall be deemed to be executed by me. I hereby acknowledge and ratify those actions and/or documents by the WFOE.深圳中传天下有转委托权，可以就上述事项的办理自行再委托其他人或单位而不必事先通知本人或获得本人的同意。WFOE is entitled to reauthorize or assign its rights related to the aforesaid matters to any other person or entity at its own discretion and without giving priornotice to me or obtaining my consent.在本人为中传视讯的股东期间，本授权委托书不可撤销并持续有效，自授权委托书签署之日起算。This Power of Attorney is coupled with an interest and shall be irrevocable and continuously valid from the date of execution of this Power of Attorney, solong as I am a shareholder of Mobile Vision.本授权委托书期间，本人特此放弃已经通过本授权委托书授权给深圳中传天下的与相关股权有关的所有权利，不再自行行使该等权利。During the term of this Power of Attorney, I hereby waive all the rights associated with Shares, which have been authorized to WFOE through this Power ofAttorney, and shall not exercise such rights by myself.本授权委托书以中文和英文书就，中英文版本如有冲突，应以中文版为准。This Power of Attorney is written in Chinese and English; in case there is any conflict between the Chinese version and the English version, the Chineseversion shall prevail.王平Wang Ping签署：By:日期：年月日Date:2EX4.22 8 f20f2017ex422_luokung.htm POWER OF ATTORNEY BY DONGLAI LIU, DATED AUGUST 31, 2015Exhibit 4.22授权委托书Power of Attorney本人刘东来，持有中华人民共和国身份证（号码：***************912），通讯地址为: ，系拥有北京中传视讯科技有限公司（“中传视讯”）4.1035%股权（“相关股权”）的股东，就相关股权，特此不可撤销地授权中传天下信息科技（深圳）有限公司（“深圳中传天下”）在本授权委托书的有效期内行使如下权利：The undersigned, Liu Donglai, a person with the PRC identification card number of ***************912, with address at: , and a holder of 4.1035% of theentire registered capital (“Shares”) in Beijing Mobile Vision Technology Co., Ltd. (“Mobile Vision”), hereby irrevocably authorize Zhongchuan Tianxia InformationTechnology (Shenzhen) Co., Ltd. (“WFOE”) to exercise the following rights relating to Shares during the term of this Power of Attorney:授权深圳中传天下作为本人唯一的排他的代理人就有关相关股权的事宜全权代表本人行使包括但不限于如下的权利：1）参加中传视讯的股东会；2）行使按照法律和中传视讯章程规定本人所享有的全部股东权利和股东表决权，包括但不限于出售或转让或质押或处置相关股权的全部或任何一部分；以及3）作为本人的授权代表指定和任命中传视讯的法定代表人、董事和/或执行董事、监事、经理以及其他高级管理人员等。但中传视讯利用该等授权做出违反中华人民共和国法律的决定无效。WFOE is hereby authorized to act on behalf of myself as my exclusive agent and attorney with respect to all matters concerning My Shareholding, includingwithout limitation: 1) attending shareholders’ meetings of Mobile Vision; 2) exercising all the shareholder’s rights and shareholder’s voting rights I am entitled tounder the laws of China and Articles of Association of Mobile Vision, including but not limited to the sale or transfer or pledge or disposition of My Shareholding inpart or in whole; and 3) designating and appointing on behalf of myself the legal representative, director and/or executive director, supervisor, manager and othersenior management members of Mobile Vision. However, the decision made by Mobile Vision taking advantage of the power of attorney which is against the PRClaws shall be null and void.1深圳中传天下将有权在授权范围内代表本人签署独家购买权协议（本人应要求作为协议方）中约定的转让协议，如期履行本人作为协议一方的与本授权委托书同日签署的股权质押协议和独家购买权协议，该权利的行使将不对本授权形成任何限制。Without limiting the generality of the powers granted hereunder, WFOE shall have the power and authority under this Power of Attorney to execute theTransfer Contracts stipulated in Exclusive Option Agreement, to which I am required to be a party, on behalf of myself, and to effect the terms of the Share PledgeAgreement and Exclusive Option Agreement, both dated the date hereof, to which I am a party.深圳中传天下就相关股权的一切行为均视为本人的行为，签署的一切文件均视为本人签署，本人会予以承认。All the actions associated with Shares conducted by WFOE shall be deemed as my own actions, and all the documents related to Shares executed by WFOEshall be deemed to be executed by me. I hereby acknowledge and ratify those actions and/or documents by the WFOE.深圳中传天下有转委托权，可以就上述事项的办理自行再委托其他人或单位而不必事先通知本人或获得本人的同意。WFOE is entitled to reauthorize or assign its rights related to the aforesaid matters to any other person or entity at its own discretion and without giving priornotice to me or obtaining my consent.在本人为中传视讯的股东期间，本授权委托书不可撤销并持续有效，自授权委托书签署之日起算。This Power of Attorney is coupled with an interest and shall be irrevocable and continuously valid from the date of execution of this Power of Attorney, solong as I am a shareholder of Mobile Vision.本授权委托书期间，本人特此放弃已经通过本授权委托书授权给深圳中传天下的与相关股权有关的所有权利，不再自行行使该等权利。During the term of this Power of Attorney, I hereby waive all the rights associated with Shares, which have been authorized to WFOE through this Power ofAttorney, and shall not exercise such rights by myself.本授权委托书以中文和英文书就，中英文版本如有冲突，应以中文版为准。This Power of Attorney is written in Chinese and English; in case there is any conflict between the Chinese version and the English version, the Chineseversion shall prevail.刘东来Liu Donglai签署：By:日期：年月日Date:2EX4.23 9 f20f2017ex423_luokung.htm POWER OF ATTORNEY BY XUESONG SONG, DATED AUGUST 31, 2015Exhibit 4.23授权委托书Power of Attorney本人宋雪松，持有中华人民共和国身份证（号码：***************417），通讯地址为，系拥有北京中传视讯科技有限公司（“中传视讯”）61.8245%股权（“相关股权”）的股东，就相关股权，特此不可撤销地授权中传天下信息科技（深圳）有限公司（“深圳中传天下”）在本授权委托书的有效期内行使如下权利：The undersigned, Song Xuesong, a person with the PRC identification card number of ***************417, with address at , and a holder of 61.8245% ofthe entire registered capital (“Shares”) in Beijing Mobile Vision Technology Co., Ltd. (“Mobile Vision”), hereby irrevocably authorize Zhongchuan TianxiaInformation Technology (Shenzhen) Co., Ltd. (“WFOE”) to exercise the following rights relating to Shares during the term of this Power of Attorney:授权深圳中传天下作为本人唯一的排他的代理人就有关相关股权的事宜全权代表本人行使包括但不限于如下的权利：1）参加中传视讯的股东会；2）行使按照法律和中传视讯章程规定本人所享有的全部股东权利和股东表决权，包括但不限于出售或转让或质押或处置相关股权的全部或任何一部分；以及3）作为本人的授权代表指定和任命中传视讯的法定代表人、董事和/或执行董事、监事、经理以及其他高级管理人员等。但中传视讯利用该等授权做出违反中华人民共和国法律的决定无效。WFOE is hereby authorized to act on behalf of myself as my exclusive agent and attorney with respect to all matters concerning My Shareholding, includingwithout limitation: 1) attending shareholders’ meetings of Mobile Vision; 2) exercising all the shareholder’s rights and shareholder’s voting rights I am entitled tounder the laws of China and Articles of Association of Mobile Vision, including but not limited to the sale or transfer or pledge or disposition of My Shareholding inpart or in whole; and 3) designating and appointing on behalf of myself the legal representative, director and/or executive director, supervisor, manager and othersenior management members of Mobile Vision. However, the decision made by Mobile Vision taking advantage of the power of attorney which is against the PRClaws shall be null and void.1深圳中传天下将有权在授权范围内代表本人签署独家购买权协议（本人应要求作为协议方）中约定的转让协议，如期履行本人作为协议一方的与本授权委托书同日签署的股权质押协议和独家购买权协议，该权利的行使将不对本授权形成任何限制。Without limiting the generality of the powers granted hereunder, WFOE shall have the power and authority under this Power of Attorney to execute theTransfer Contracts stipulated in Exclusive Option Agreement, to which I am required to be a party, on behalf of myself, and to effect the terms of the Share PledgeAgreement and Exclusive Option Agreement, both dated the date hereof, to which I am a party.深圳中传天下就相关股权的一切行为均视为本人的行为，签署的一切文件均视为本人签署，本人会予以承认。All the actions associated with Shares conducted by WFOE shall be deemed as my own actions, and all the documents related to Shares executed by WFOEshall be deemed to be executed by me. I hereby acknowledge and ratify those actions and/or documents by the WFOE.深圳中传天下有转委托权，可以就上述事项的办理自行再委托其他人或单位而不必事先通知本人或获得本人的同意。WFOE is entitled to reauthorize or assign its rights related to the aforesaid matters to any other person or entity at its own discretion and without giving priornotice to me or obtaining my consent.在本人为中传视讯的股东期间，本授权委托书不可撤销并持续有效，自授权委托书签署之日起算。This Power of Attorney is coupled with an interest and shall be irrevocable and continuously valid from the date of execution of this Power of Attorney, solong as I am a shareholder of Mobile Vision.本授权委托书期间，本人特此放弃已经通过本授权委托书授权给深圳中传天下的与相关股权有关的所有权利，不再自行行使该等权利。During the term of this Power of Attorney, I hereby waive all the rights associated with Shares, which have been authorized to WFOE through this Power ofAttorney, and shall not exercise such rights by myself.本授权委托书以中文和英文书就，中英文版本如有冲突，应以中文版为准。This Power of Attorney is written in Chinese and English; in case there is any conflict between the Chinese version and the English version, the Chineseversion shall prevail.宋雪松Song Xuesong签署：By:日期：年月日Date:2EX8.1 10 f20f2017ex81_luokung.htm LIST OF SUBSIDIARIES AND CONSOLIDATED VARIABLE INTEREST ENTITIESExhibit 8.1List of Subsidiaries of the CompanyName of EntityJurisdiction of Incorporation/OrganizationLK Technology Ltd.British Virgin IslandsTopsky Infotech Holdings Pte Ltd.SingaporeSuperengine Holdings LimitedBritish Virgin IslandsMMB LimitedHong KongMobile Media (China Limited)Hong KongZhong Chuan Tian Xia Information and Technology (Beijing) LimitedBeijing, PRCZhong Chuan Xia Information and Technology (Shenzhen) LimitedShenzhen, PRCBeijing Zhong Chuan Shi Xun Technology Limited (VIE Entity)Beijing, PRCJiangsu Zhong Chuan Rui You Information and Technology Limited (VIE Entity)Jiangsu, PRCHuoerguosi Luokuang Information and Technology Limited (VIE Entity)Huoerguosi, PRCShenzhen Jiu Zhou Shi Dai Digital Technology LimitedShenzhen, PRCEX10.1 11 f20f2017ex101_luokung.htm EMPLOYMENT AGREEMENT, DATED AUGUST 19, 2018, BETWEEN LUOKUNG TECHNOLOGY CORP. AND XUESONGSONGExhibit 10.1EMPLOYMENT AGREEMENTThis EMPLOYMENT AGREEMENT (the “Agreement”) is made and entered into as of this 19 day of August, 2018 (the “Effective Date”), by and between LuokungTechnology Corp., a British Virgin Islands corporation (the “Company”) and Xuesong Song (the “Executive”), a Chinese citizen.WITNESSETH:WHEREAS, the parties desire to enter into this Agreement setting forth the terms and conditions of the employment relationship between the Executiveand the Company.NOW, THEREFORE, in consideration of the foregoing premises and the mutual covenants and agreements contained herein, the parties hereto agree asfollows:1. EMPLOYMENT.1.1 Agreement to Employ. The Company hereby agrees to employ Executive, and Executive hereby agrees to serve, subject to the provisions of thisAgreement, as an officer and employee of the Company.1.2 Duties and Schedule. Executive shall serve as the Company’s Chief Executive Officer (“CEO”). The responsibilities of the Executive shall be subject tothe bylaws of the Company and determined by the Board of Directors of the Company (the “Board”). The Executive shall report directly to the Board and shall havesuch responsibilities as designated by the Board of the Company to the extent that such responsibilities are not inconsistent with all applicable laws, regulationsand rules. Executive shall devote his best efforts and all of his business time to his position with the Company during the Term.2. TERM OF EMPLOYMENT. Unless Executive’s employment shall sooner terminate pursuant to Section 4, the Company shall employ Executive for a fouryear term commencing on the Effective Date (the “Term”), which Term shall be renewable upon mutual agreement of the Company and the Executive, as approved bythe Board.3. COMPENSATION.3.1 Salary. Executive’s salary during the Term shall be $Nil.3.2 Bonus. At the sole discretion of the Board, or any committee duly designated by the Board and authorized to act thereto, the Executive shall be eligiblefor an annual cash bonus.3.3 Vacation. Executive shall be entitled to 8 days of paid vacation per year. In the event that Executive remains employed by the Company for 3 years ormore, Executive shall be entitled to 12 days of paid vacation.3.4 Business Expenses. Executive shall be reimbursed by the Company for all ordinary and necessary expenses incurred by Executive; provided that theyare incurred and approved in writing in accordance with the Company’s expense policy.3.5 Benefits. During the Term, Executive shall be allowed to participate, on the same basis generally as other employees of the Company, in all generalemployee benefit plans and programs, including improvements or modifications of the same, which may exist as of the Effective Date or thereafter and which aremade available by the Company to all or substantially all of its employees. Such benefits, plans, and programs may include, without limitation, any health, and dentalinsurance or 401K programs, if and when instituted. Any benefit plan currently existing or instituted by the Company after the Effective Date may be altered, changeor discontinued by the Company at its sole discretion and at any time without obligation of any nature to Executive. Except as specifically provided herein, nothingin this Agreement is to be construed or interpreted to increase or alter in any way the rights, participation, coverage, or benefits under such benefit plans orprograms to other than those provided to other employees pursuant to the terms and conditions of such benefit plans and programs. 14. TERMINATION.4.1 Death. This Agreement shall terminate immediately upon the death of Executive, and Executive’s estate or Executive’s legal representative, as the casemay be, shall be entitled to Executive’s accrued and unpaid Salary as of the date of Executive’s death, plus all other compensation and benefits that were vestedthrough the date of Executive’s death.4.2 Disability. In the event of Executive’s Disability, this Agreement shall terminate and Executive shall be entitled to (a) accrued and unpaid Salary andvacation through the first date that a Disability is determined; and (b) all other compensation and benefits that were vested through the first date that a Disabilityhas been determined. “Disability” means the good faith determination of the Board that Executive has become so physically or mentally incapacitated or disabled asto be unable to satisfactorily perform his duties hereunder for a period of ninety (90) consecutive calendar days or for one hundred twenty (120) days in any threehundred sixty (360) day period, such determination based upon a certificate as to such physical or mental disability issued by a licensed physician and/orpsychiatrist (as the case may be) mutually agreed upon by Executive and the Company.4.3 Termination by Company for Cause. The Company may terminate the Executive for Cause and such termination shall take effect upon the receipt byExecutive of the Notice of Termination. Upon the effective date of the termination for Cause, Executive shall be solely entitled to accrued and unpaid Salary throughsuch effective date. “Cause” means: (i) engaging in any act, omission or misconduct that is injurious to the Company or an affiliate; (ii) gross negligence or willfulmisconduct in connection with the performance of duties; (iii) conviction of a criminal offense (other than minor traffic offenses); (iv) fraud, embezzlement ormisappropriation of funds or property of the Company or an affiliate; (v) material breach of any term of any employment or other services, confidentiality, intellectualproperty or noncompetition agreements, if any, between the Executive and the Company or an affiliate; (vi) the entry of an order duly issued by any regulatoryagency (including federal, state and local regulatory agencies and selfregulatory bodies) having jurisdiction over the Company or an affiliate requiring the removalof the Executive from any office held with the Company or prohibiting the Executive from participating in the business or affairs of the Company or any affiliate; or(vii) the revocation or threatened revocation of any of the Company’s or an affiliate’s government licenses, permits or approvals, which is primarily due to theExecutive’s action or inaction and such revocation or threatened revocation would be alleviated or mitigated in any material respect by the termination of theExecutive’s employment or services with the Company or an affiliate. 4.4 Voluntary Termination by Executive. The Executive may voluntarily terminate his employment for any reason and such termination shall take effect 30days after the receipt by Company of the Notice of Termination. Upon the effective date of such termination, Executive shall be entitled to (a) accrued and unpaidSalary and vacation through such termination date; and (b) all other compensation and benefits that were vested through such termination date. In the eventExecutive is terminated without notice, it shall be deemed a termination by the Company for Cause.4.5 Notice of Termination. Any termination of the employment by the Company or the Executive shall be communicated by a notice in accordance withSection 8.4 of this Agreement (the “Notice of Termination”). Such notice shall (a) indicate the specific termination provision in this Agreement relied upon and (b) ifthe termination is for Cause, the date on which the Executive’s employment is to be terminated.4.6 Severance. The Executive shall not be entitled to severance payments upon any termination provided in Section 4 herein.5. EMPLOYEE’S REPRESENTATION. The Executive represents and warrants to the Company that: (a) he is subject to no contractual, fiduciary or otherobligation which may affect the performance of his duties under this Agreement; (b) he has terminated, in accordance with their terms, any contractual obligationwhich may affect his performance under this Agreement; and (c) his employment with the Company will not require him to use or disclose proprietary or confidentialinformation of any other person or entity.26. CONFIDENTIAL INFORMATION Except as permitted or directed by the Board of Directors of the Company in writing, during the time the Executive isemployed by the Company or at any time thereafter, the Executive shall not use for his personal purposes nor divulge, furnish, or make accessible to anyone or usein any way (other than in the ordinary course of the business of the Company) any confidential or secret information or knowledge of the Company, whetherdeveloped by himself or by others. Such confidential and/or secret information encompassed by this Section 6 includes, but is not limited to, the Company’scustomer and supplier lists, business plans, software, systems, and financial, marketing, and personnel information. The Executive agrees to refrain from any acts oromissions that would reduce the value of any confidential or secret knowledge or information to the Company, both during his employment hereunder and at anytime after the termination of his employment. The Executive’s obligations of confidentiality under this Section 6 shall not apply to any knowledge or information thatis now published publicly or that subsequently becomes generally publicly known, other than as a direct or indirect result of a breach of this Agreement by theExecutive.7. NONCOMPETITION: NONSOLICITATION; INVENTIONS.7.1 NonCompetition. During the employment of the Executive under this Agreement and for a period of six (6) months after termination of suchemployment, the Executive shall not at any time compete on his own behalf, or on behalf of any other person or entity, with the Company or any of its affiliateswithin all territories in which the Company does business with respect to the business of the Company or any of its affiliates as such business shall be conductedon the date hereof or during the employment of the Executive under this Agreement. The ownership by the Executive of not more than 5% of a corporation,partnership or other enterprise shall not constitute a violation hereof.7.2 NonSolicitation. During the employment of the Executive under this Agreement and thereafter Executive shall not at any time (i) solicit or induce, onhis own behalf or on behalf of any other person or entity, any employee of the Company or any of its affiliates to leave the employ of the Company or any of itsaffiliates; or (ii) solicit or induce, on his own behalf or on behalf of any other person or entity, any customer or Prospective Customer of the Company or any of theirrespective affiliates to reduce its business with the Company or any of its affiliates. For the purposes of this Agreement, “Prospective Customer” shall mean anyindividual, corporation, trust or other business entity which has either (a) entered into a nondisclosure agreement with the Company or any Company subsidiary oraffiliate or (b) has within the preceding 12 months received a currently pending and not rejected written proposal in reasonable detail from the Company or any ofthe Company’s subsidiary or affiliate.7.3 Inventions and Patents. The Company shall be entitled to the sole benefit and exclusive ownership of any inventions or improvements in products,processes, or other things that may be made or discovered by Executive while he is in the service of the Company, and all patents for the same. During the Term,Executive shall do all acts necessary or required by the Company to give effect to this section and, following the Term, Executive shall do all acts reasonablynecessary or required by the Company to give effect to this section. In all cases, the Company shall pay all costs and fees associated with such acts by Executive.7.4 Return of Property. The Executive agrees that all property in the Executive’s possession that he obtains or is assigned in the course of his employmentwith the Company, including, without limitation, all documents, reports, manuals, memoranda, customer lists, credit cards, keys, access cards, and all other propertyrelating in any way to the business of the Company, is the exclusive property of the Company, even if the Executive authored, created, or assisted in authoring orcreating such property. The Executive shall return to the Company all such property immediately upon termination of employment or at such earlier time as theCompany may request.7.5Court Ordered Revisions.If any portion of this Section 7 is found by a court of competent jurisdiction to be invalid or unenforceable, but would be validand enforceable if modified, this Section 7 shall apply with such modifications necessary to make this Section 7 valid and enforceable. Any portion of this Section 7not required to be so modified shall remain in full force and effect and not be affected thereby.7.6 Specific Performance. The Executive acknowledges that the remedy at law for any breach of any of the provisions of Section 7 will be inadequate, andthat the Company shall be entitled, in addition to any remedy at law or in equity, to preliminary and permanent injunctive relief and specific performance.38. MISCELLANEOUS.8.1 Indemnification. The Company and each of its subsidiaries shall, to the maximum extent provided under applicable law, indemnify and hold Executiveharmless from and against any expenses, including reasonable attorney’s fees, judgments, fines, settlements and other legally permissible amounts (“Losses”),incurred in connection with any proceeding arising out of, or related to, Executive’s employment by the Company, other than any such Losses incurred as a result ofExecutive’s negligence or willful misconduct. The Company shall, or shall cause a subsidiary thereof to, advance to Executive any expenses, including attorney’sfees and costs of settlement, incurred in defending any such proceeding to the maximum extent permitted by applicable law. Such costs and expenses incurred byExecutive in defense of any such proceeding shall be paid by the Company or applicable subsidiary in advance of the final disposition of such proceeding promptlyupon receipt by the Company of (a) written request for payment; (b) appropriate documentation evidencing the incurrence, amount and nature of the costs andexpenses for which payment is being sought; and (c) an undertaking adequate under applicable law made by or on behalf of Executive to repay the amounts soadvanced if it shall ultimately be determined pursuant to any nonappealable judgment or settlement that Executive is not entitled to be indemnified by the Companyor any subsidiary thereof. The Company will provide Executive with coverage under all directors and officers liability insurance policies that it has in effect duringthe Term, with no deductible to Executive. 8.2 Applicable Law. Except as may be otherwise provided herein, this Agreement shall be governed by and construed in accordance with the laws ofChina, applied without reference to principles of conflict of laws. Any dispute arising from or in connection with this Agreement shall be submitted to ShanghaiInternational Arbitration Center (the “Center”) for arbitration under the then effective rules of the Center. The arbitration award shall be the sole, binding, exclusiveand final remedy for resolving any dispute between the parties.8.3 Amendments. This Agreement may not be amended or modified otherwise than by a written agreement executed by the parties hereto or their respectivesuccessors or legal representatives.8.4 Notices. All notices and other communications hereunder shall be in writing and shall be given by handdelivery to the other party, by an internationalmail courier, or by registered or certified mail, return receipt requested, postage prepaid, addressed as follows:If to the Executive:Xuesong Song________________________________________________If to the Company:______________________________________Or to such other address as either party shall have furnished to the other in writing in accordance herewith. Notices and communications shall be effective whendelivered to the addressee.8.5 Withholding. The Company may withhold from any amounts payable under the Agreement, such federal, state and local income, unemployment, socialsecurity and similar employment related taxes and similar employment related withholdings as shall be required to be withheld pursuant to any applicable law orregulation.8.6 Severability. The invalidity or unenforceability of any provision of this Agreement shall not affect the validity or enforceability of any other provision ofthis Agreement and any such provision which is not valid or enforceable in whole shall be enforced to the maximum extent permitted by law.8.7 Captions. The captions of this Agreement are not part of the provisions and shall have no force or effect.48.8 Entire Agreement. This Agreement contains the entire agreement among the parties concerning the subject matter hereof and supersedes all prioragreements, understandings, discussions, negotiations and undertakings, whether written or oral, between the parties with respect thereto.8.9 Survival. The respective rights and obligations of the parties hereunder shall survive any termination of this Agreement or the Executive’s employmenthereunder to the extent necessary to the intended preservation of such rights and obligations.8.10 Waiver. Either Party's failure to enforce any provision or provisions of this Agreement shall not in any way be construed as a waiver of any suchprovision or provisions, or prevent that party thereafter from enforcing each and every other provision of this Agreement.8.11 Successors. This Agreement is personal to Executive and, without the prior express written consent of the Company, shall not be assignable byExecutive. This Agreement shall inure to the benefit of and be enforceable by Executive’s estate, heirs, beneficiaries, and/or legal representatives. This Agreementshall inure to the benefit of and be binding upon the Company and its successors and assigns.8.12 Joint Efforts/Counterparts. Preparation of this Agreement shall be deemed to be the joint effort of the parties hereto and shall not be construed moreseverely against any party. This Agreement may be signed in two or more counterparts, each of which shall be deemed an original and all of which together shallconstitute one and the same instrument.8.13 Representation by Counsel. Each Party hereby represents that it has had the opportunity to be represented by legal counsel of its choice inconnection with the negotiation and execution of this Agreement.IN WITNESS WHEREOF, the parties have executed this Agreement as of the day and year first above written.EXECUTIVE:LUOKUNG TECHNOLOGY CORP./s/ Xuesong Song/s/ Jie YuXuesong SongJie YuChief Financial Officer5EX10.2 12 f20f2017ex102_luokung.htm EMPLOYMENT AGREEMENT, DATED AUGUST 19, 2018, BY AND BETWEEN LUOKUNG TECHNOLOGY CORP. AND JIEYUExhibit 10.2EMPLOYMENT AGREEMENTThis EMPLOYMENT AGREEMENT (the “Agreement”) is made and entered into as of this 19 day of August, 2018 (the “Effective Date”), by and between LuokungTechnology Corp., a British Virgin Islands corporation (the “Company”) and Jie (Jay) Yu (the “Executive”), a Chinese citizen.WITNESSETH:WHEREAS, the parties desire to enter into this Agreement setting forth the terms and conditions of the employment relationship between the Executiveand the Company.NOW, THEREFORE, in consideration of the foregoing premises and the mutual covenants and agreements contained herein, the parties hereto agree asfollows:1. EMPLOYMENT.1.1 Agreement to Employ. The Company hereby agrees to employ Executive, and Executive hereby agrees to serve, subject to the provisions of thisAgreement, as an officer and employee of the Company.1.2 Duties and Schedule. Executive shall serve as the Company’s Chief Financial Officer, and be the Principal Financial Officer and Principal AccountingOfficer of the Company and responsible for all financial matters and management of the Company. The Executive shall report directly to the Company’s ChiefExecutive Officer and Board of Directors (the “Board”) and shall have such responsibilities as designated by the Chief Executive Officer or Board to the extent thatsuch responsibilities are not inconsistent with all applicable laws, regulations and rules. Executive shall devote his best efforts and all of his business time to hisposition with the Company during the Term.2. TERM OF EMPLOYMENT. Unless Executive’s employment shall sooner terminate pursuant to Section 4, the Company shall employ Executive for a fouryear term commencing on the Effective Date (the “Term”), which Term shall be renewable upon mutual agreement of the Company and the Executive, as approved bythe Board.3. COMPENSATION.3.1 Salary. Executive’s salary during the Term shall be RMB700,000 per year (the “Salary”), payable monthly.3.2 Bonus. At the sole discretion of the Board, or any committee duly designated by the Board and authorized to act thereto, the Executive shall be eligiblefor an annual cash bonus.3.3 Vacation. Executive shall be entitled to 8 days of paid vacation per year. In the event that Executive remains employed by the Company for 3 years ormore, Executive shall be entitled to 12 days of paid vacation.3.4 Business Expenses. Executive shall be reimbursed by the Company for all ordinary and necessary expenses incurred by Executive; provided that theyare incurred and approved in writing in accordance with the Company’s expense policy.3.5 Benefits. During the Term, Executive shall be allowed to participate, on the same basis generally as other employees of the Company, in all generalemployee benefit plans and programs, including improvements or modifications of the same, which may exist as of the Effective Date or thereafter and which aremade available by the Company to all or substantially all of its employees. Such benefits, plans, and programs may include, without limitation, any health, and dentalinsurance or 401K programs, if and when instituted. Any benefit plan currently existing or instituted by the Company after the Effective Date may be altered, changeor discontinued by the Company at its sole discretion and at any time without obligation of any nature to Executive. Except as specifically provided herein, nothingin this Agreement is to be construed or interpreted to increase or alter in any way the rights, participation, coverage, or benefits under such benefit plans orprograms to other than those provided to other employees pursuant to the terms and conditions of such benefit plans and programs. 14. TERMINATION.4.1 Death. This Agreement shall terminate immediately upon the death of Executive, and Executive’s estate or Executive’s legal representative, as the casemay be, shall be entitled to Executive’s accrued and unpaid Salary as of the date of Executive’s death, plus all other compensation and benefits that were vestedthrough the date of Executive’s death.4.2 Disability. In the event of Executive’s Disability, this Agreement shall terminate and Executive shall be entitled to (a) accrued and unpaid Salary andvacation through the first date that a Disability is determined; and (b) all other compensation and benefits that were vested through the first date that a Disabilityhas been determined. “Disability” means the good faith determination of the Board that Executive has become so physically or mentally incapacitated or disabled asto be unable to satisfactorily perform his duties hereunder for a period of ninety (90) consecutive calendar days or for one hundred twenty (120) days in any threehundred sixty (360) day period, such determination based upon a certificate as to such physical or mental disability issued by a licensed physician and/orpsychiatrist (as the case may be) mutually agreed upon by Executive and the Company.4.3 Termination by Company for Cause. The Company may terminate the Executive for Cause and such termination shall take effect upon the receipt byExecutive of the Notice of Termination. Upon the effective date of the termination for Cause, Executive shall be solely entitled to accrued and unpaid Salary throughsuch effective date. “Cause” means: (i) engaging in any act, omission or misconduct that is injurious to the Company or an affiliate; (ii) gross negligence or willfulmisconduct in connection with the performance of duties; (iii) conviction of a criminal offense (other than minor traffic offenses); (iv) fraud, embezzlement ormisappropriation of funds or property of the Company or an affiliate; (v) material breach of any term of any employment or other services, confidentiality, intellectualproperty or noncompetition agreements, if any, between the Executive and the Company or an affiliate; (vi) the entry of an order duly issued by any regulatoryagency (including federal, state and local regulatory agencies and selfregulatory bodies) having jurisdiction over the Company or an affiliate requiring the removalof the Executive from any office held with the Company or prohibiting the Executive from participating in the business or affairs of the Company or any affiliate; or(vii) the revocation or threatened revocation of any of the Company’s or an affiliate’s government licenses, permits or approvals, which is primarily due to theExecutive’s action or inaction and such revocation or threatened revocation would be alleviated or mitigated in any material respect by the termination of theExecutive’s employment or services with the Company or an affiliate. 4.4 Voluntary Termination by Executive. The Executive may voluntarily terminate his employment for any reason and such termination shall take effect 30days after the receipt by Company of the Notice of Termination. Upon the effective date of such termination, Executive shall be entitled to (a) accrued and unpaidSalary and vacation through such termination date; and (b) all other compensation and benefits that were vested through such termination date. In the eventExecutive is terminated without notice, it shall be deemed a termination by the Company for Cause.4.5 Notice of Termination. Any termination of the employment by the Company or the Executive shall be communicated by a notice in accordance withSection 8.4 of this Agreement (the “Notice of Termination”). Such notice shall (a) indicate the specific termination provision in this Agreement relied upon and (b) ifthe termination is for Cause, the date on which the Executive’s employment is to be terminated.4.6 Severance. The Executive shall not be entitled to severance payments upon any termination provided in Section 4 herein.5. EMPLOYEE’S REPRESENTATION. The Executive represents and warrants to the Company that: (a) he is subject to no contractual, fiduciary or otherobligation which may affect the performance of his duties under this Agreement; (b) he has terminated, in accordance with their terms, any contractual obligationwhich may affect his performance under this Agreement; and (c) his employment with the Company will not require him to use or disclose proprietary or confidentialinformation of any other person or entity.26. CONFIDENTIAL INFORMATION Except as permitted or directed by the Board of Directors of the Company in writing, during the time the Executive isemployed by the Company or at any time thereafter, the Executive shall not use for his personal purposes nor divulge, furnish, or make accessible to anyone or usein any way (other than in the ordinary course of the business of the Company) any confidential or secret information or knowledge of the Company, whetherdeveloped by himself or by others. Such confidential and/or secret information encompassed by this Section 6 includes, but is not limited to, the Company’scustomer and supplier lists, business plans, software, systems, and financial, marketing, and personnel information. The Executive agrees to refrain from any acts oromissions that would reduce the value of any confidential or secret knowledge or information to the Company, both during his employment hereunder and at anytime after the termination of his employment. The Executive’s obligations of confidentiality under this Section 6 shall not apply to any knowledge or information thatis now published publicly or that subsequently becomes generally publicly known, other than as a direct or indirect result of a breach of this Agreement by theExecutive.7. NONCOMPETITION: NONSOLICITATION; INVENTIONS.7.1 NonCompetition. During the employment of the Executive under this Agreement and for a period of six (6) months after termination of suchemployment, the Executive shall not at any time compete on his own behalf, or on behalf of any other person or entity, with the Company or any of its affiliateswithin all territories in which the Company does business with respect to the business of the Company or any of its affiliates as such business shall be conductedon the date hereof or during the employment of the Executive under this Agreement. The ownership by the Executive of not more than 5% of a corporation,partnership or other enterprise shall not constitute a violation hereof.7.2 NonSolicitation. During the employment of the Executive under this Agreement and thereafter Executive shall not at any time (i) solicit or induce, onhis own behalf or on behalf of any other person or entity, any employee of the Company or any of its affiliates to leave the employ of the Company or any of itsaffiliates; or (ii) solicit or induce, on his own behalf or on behalf of any other person or entity, any customer or Prospective Customer of the Company or any of theirrespective affiliates to reduce its business with the Company or any of its affiliates. For the purposes of this Agreement, “Prospective Customer” shall mean anyindividual, corporation, trust or other business entity which has either (a) entered into a nondisclosure agreement with the Company or any Company subsidiary oraffiliate or (b) has within the preceding 12 months received a currently pending and not rejected written proposal in reasonable detail from the Company or any ofthe Company’s subsidiary or affiliate.7.3 Inventions and Patents. The Company shall be entitled to the sole benefit and exclusive ownership of any inventions or improvements in products,processes, or other things that may be made or discovered by Executive while he is in the service of the Company, and all patents for the same. During the Term,Executive shall do all acts necessary or required by the Company to give effect to this section and, following the Term, Executive shall do all acts reasonablynecessary or required by the Company to give effect to this section. In all cases, the Company shall pay all costs and fees associated with such acts by Executive.7.4 Return of Property. The Executive agrees that all property in the Executive’s possession that he obtains or is assigned in the course of his employmentwith the Company, including, without limitation, all documents, reports, manuals, memoranda, customer lists, credit cards, keys, access cards, and all other propertyrelating in any way to the business of the Company, is the exclusive property of the Company, even if the Executive authored, created, or assisted in authoring orcreating such property. The Executive shall return to the Company all such property immediately upon termination of employment or at such earlier time as theCompany may request.7.5Court Ordered Revisions.If any portion of this Section 7 is found by a court of competent jurisdiction to be invalid or unenforceable, but would be validand enforceable if modified, this Section 7 shall apply with such modifications necessary to make this Section 7 valid and enforceable. Any portion of this Section 7not required to be so modified shall remain in full force and effect and not be affected thereby.7.6 Specific Performance. The Executive acknowledges that the remedy at law for any breach of any of the provisions of Section 7 will be inadequate, andthat the Company shall be entitled, in addition to any remedy at law or in equity, to preliminary and permanent injunctive relief and specific performance.38. MISCELLANEOUS.8.1 Indemnification. The Company and each of its subsidiaries shall, to the maximum extent provided under applicable law, indemnify and hold Executiveharmless from and against any expenses, including reasonable attorney’s fees, judgments, fines, settlements and other legally permissible amounts (“Losses”),incurred in connection with any proceeding arising out of, or related to, Executive’s employment by the Company, other than any such Losses incurred as a result ofExecutive’s negligence or willful misconduct. The Company shall, or shall cause a subsidiary thereof to, advance to Executive any expenses, including attorney’sfees and costs of settlement, incurred in defending any such proceeding to the maximum extent permitted by applicable law. Such costs and expenses incurred byExecutive in defense of any such proceeding shall be paid by the Company or applicable subsidiary in advance of the final disposition of such proceeding promptlyupon receipt by the Company of (a) written request for payment; (b) appropriate documentation evidencing the incurrence, amount and nature of the costs andexpenses for which payment is being sought; and (c) an undertaking adequate under applicable law made by or on behalf of Executive to repay the amounts soadvanced if it shall ultimately be determined pursuant to any nonappealable judgment or settlement that Executive is not entitled to be indemnified by the Companyor any subsidiary thereof. The Company will provide Executive with coverage under all directors and officers liability insurance policies that it has in effect duringthe Term, with no deductible to Executive. 8.2 Applicable Law. Except as may be otherwise provided herein, this Agreement shall be governed by and construed in accordance with the laws ofChina, applied without reference to principles of conflict of laws. Any dispute arising from or in connection with this Agreement shall be submitted to ShanghaiInternational Arbitration Center (the “Center”) for arbitration under the then effective rules of the Center. The arbitration award shall be the sole, binding, exclusiveand final remedy for resolving any dispute between the parties.8.3 Amendments. This Agreement may not be amended or modified otherwise than by a written agreement executed by the parties hereto or their respectivesuccessors or legal representatives.8.4 Notices. All notices and other communications hereunder shall be in writing and shall be given by handdelivery to the other party, by an internationalmail courier, or by registered or certified mail, return receipt requested, postage prepaid, addressed as follows:If to the Executive:Jie Yu________________________________________If to the Company:______________________________________Or to such other address as either party shall have furnished to the other in writing in accordance herewith. Notices and communications shall be effective whendelivered to the addressee.8.5 Withholding. The Company may withhold from any amounts payable under the Agreement, such federal, state and local income, unemployment, socialsecurity and similar employment related taxes and similar employment related withholdings as shall be required to be withheld pursuant to any applicable law orregulation.8.6 Severability. The invalidity or unenforceability of any provision of this Agreement shall not affect the validity or enforceability of any other provision ofthis Agreement and any such provision which is not valid or enforceable in whole shall be enforced to the maximum extent permitted by law.48.7 Captions. The captions of this Agreement are not part of the provisions and shall have no force or effect.8.8 Entire Agreement. This Agreement contains the entire agreement among the parties concerning the subject matter hereof and supersedes all prioragreements, understandings, discussions, negotiations and undertakings, whether written or oral, between the parties with respect thereto.8.9 Survival. The respective rights and obligations of the parties hereunder shall survive any termination of this Agreement or the Executive’s employmenthereunder to the extent necessary to the intended preservation of such rights and obligations.8.10 Waiver. Either Party's failure to enforce any provision or provisions of this Agreement shall not in any way be construed as a waiver of any suchprovision or provisions, or prevent that party thereafter from enforcing each and every other provision of this Agreement.8.11 Successors. This Agreement is personal to Executive and, without the prior express written consent of the Company, shall not be assignable byExecutive. This Agreement shall inure to the benefit of and be enforceable by Executive’s estate, heirs, beneficiaries, and/or legal representatives. This Agreementshall inure to the benefit of and be binding upon the Company and its successors and assigns.8.12 Joint Efforts/Counterparts. Preparation of this Agreement shall be deemed to be the joint effort of the parties hereto and shall not be construed moreseverely against any party. This Agreement may be signed in two or more counterparts, each of which shall be deemed an original and all of which together shallconstitute one and the same instrument.8.13 Representation by Counsel. Each Party hereby represents that it has had the opportunity to be represented by legal counsel of its choice inconnection with the negotiation and execution of this Agreement.IN WITNESS WHEREOF, the parties have executed this Agreement as of the day and year first above written.EXECUTIVE:LUOKUNG TECHNOLOGY CORP./s/ Jie Yu/s/ Xuesong SongJie YuXuesong SongChief Executive Officer5EX12.1 13 f20f2017ex121_luokung.htm CERTIFICATIONExhibit 12.1Certification by the Chief Executive OfficerPursuant to Section 302 of the SarbanesOxley Act of 2002I, Xuesong Song, the Chief Executive Officer of Luokung Technology Corp. (the “Company”), certify that:1.I have reviewed this transition report on Form 20F of the Company;2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statementsmade, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financialcondition, results of operations and cash flows of the Company as of, and for, the periods presented in this report;4.The Company’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange ActRules 13a15(e) and 15d15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a15(f) and 15d15(f)) for the Company andhave:(a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure thatmaterial information relating to the Company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during theperiod in which this report is being prepared;(b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, toprovide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance withgenerally accepted accounting principles;(c)Evaluated the effectiveness of the Company’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of thedisclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and(d)Disclosed in this report any change in the Company’s internal control over financial reporting that occurred during the period covered by the transition reportthat has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting; and5.The Company’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Company’sauditors and the audit committee of the Company’s board of directors (or persons performing the equivalent functions):(a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely toadversely affect the Company’s ability to record, process, summarize and report financial information; and(b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the Company’s internal control over financialreporting.Date: October 12, 2018By:/s/ Xuesong SongXuesong SongChief Executive Officer(principal executive officer)EX12.2 14 f20f2017ex122_luokung.htm CERTIFICATIONExhibit 12.2Certification by the Chief Financial OfficerPursuant to Section 302 of the SarbanesOxley Act of 2002I, Jie Yu, the Chief Financial Officer of Luokung Technology Corp. (the “Company”), certify that:1.I have reviewed this transition report on Form 20F of the Company;2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statementsmade, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financialcondition, results of operations and cash flows of the Company as of, and for, the periods presented in this report;4.The Company’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange ActRules 13a15(e) and 15d15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a15(f) and 15d15(f)) for the Company andhave:(a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure thatmaterial information relating to the Company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during theperiod in which this report is being prepared;(b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, toprovide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance withgenerally accepted accounting principles;(c)Evaluated the effectiveness of the Company’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of thedisclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and(d)Disclosed in this report any change in the Company’s internal control over financial reporting that occurred during the period covered by the transition reportthat has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting; and5.The Company’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Company’sauditors and the audit committee of the Company’s board of directors (or persons performing the equivalent functions):(a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely toadversely affect the Company’s ability to record, process, summarize and report financial information; and(b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the Company’s internal control over financialreporting.Date: October 12, 2018By:/s/ Jie YuJie YuChief Financial Officer(principal financial officer and principal accounting officer)EX13.1 15 f20f2017ex131_luokung.htm CERTIFICATIONExhibit 13.1Certification by the Chief Executive OfficerPursuant to Section 906 of the SarbanesOxley Act of 2002In connection with the Transition report on Form 20F of Luokung Technology Corp. (the “Company”) for the year ended December 31, 2017 as filed withthe Securities and Exchange Commission on the date hereof (the “Report”), I, Xuesong Song, Chairman and Chief Executive Officer of the Company, certify,pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the SarbanesOxley Act of 2002, that to my knowledge:(1)The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and(2)The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.Date: October 12, 2018By:/s/ Xuesong SongXuesong SongChief Executive Officer(principal executive officer)EX13.2 16 f20f2017ex132_luokung.htm CERTIFICATIONExhibit 13.2Certification by the Chief Financial OfficerPursuant to Section 906 of the SarbanesOxley Act of 2002In connection with the Transition report on Form 20F of Luokung Technology Corp. (the “Company”) for the year ended December 31, 2017 as filed withthe Securities and Exchange Commission on the date hereof (the “Report”), I, Jie Yu, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. Section1350, as adopted pursuant to Section 906 of the SarbanesOxley Act of 2002, that to my knowledge:(1)The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and(2)The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.Date: October 12, 2018By:/s/ Jie YuJie YuChief Financial Officer(principal financial officer and principal accounting officer)地址：Address:.b)陈蔚力Chen Weili地址：Address:c)王平Wang Ping地址：Address:17秘密文件 Strictly Confidentiald)刘东来Liu Donglai地址：Address:丙方：北京中传视讯科技有限公司Party C: Beijing Mobile Vision Technology Co., Ltd.地址：北京市朝阳区光华路9号SOHO3QLAB32Address: LAB32, SOHO3Q, No 9, Guanghua Road, Chaoyang District, Beijing.收件人：宋雪松Attn.: Song Xuesong14.3任何一方可按本条规定随时给其他各方发出通知来改变其接收通知的地址。Any Party may at any time change its address for notices by a notice delivered to the other Parties in accordance with the terms hereof.15.分割性Severability如果本协议有任何一条或多条规定根据任何法律或法规在任何方面被裁定为无效、不合法或不可执行，本协议其余规定的有效性、合法性或可执行性不应因此在任何方面受到影响或损害。各方应通过诚意磋商，争取以法律许可以及各方期望的最大限度内有效的规定取代那些无效、不合法或不可执行的规定，而该等有效的规定所产生的经济效果应尽可能与那些无效、不合法或不能强制执行的规定所产生的经济效果相似。In the event that one or several of the provisions of this Contract are found to be invalid, illegal or unenforceable in any aspect in accordance with any laws orregulations, the validity, legality or enforceability of the remaining provisions of this Contract shall not be affected or compromised in any respect. The Partiesshall strive in good faith to replace such invalid, illegal or unenforceable provisions with effective provisions that accomplish to the greatest extent permittedby law and the intentions of the Parties, and the economic effect of such effective provisions shall be as close as possible to the economic effect of thoseinvalid, illegal or unenforceable provisions.18秘密文件 Strictly Confidential16.附件Attachments本协议所列附件，为本协议不可分割的组成部分。The attachments set forth herein shall be an integral part of this Agreement.17.生效Effectiveness17.1本协议的任何修改、补充或变更，均须采用书面形式，经各方签字或盖章并按规定办理政府登记（如需）后生效。Any amendments, changes and supplements to this Agreement shall be in writing and shall become effective upon completion of the governmentalfiling procedures (if applicable) after the affixation of the signatures or seals of the Parties.17.2本协议以中文和英文书就，一式六份，质权人、所有出质人和丙方各持一份，具有同等效力；中英文版本如有冲突，应以中文版为准。This Agreement is written in Chinese and English in six copies. Each Pledgors, Pledgee and Party C shall hold one copy respectively. Each copy of thisAgreement shall have equal validity. In case there is any conflict between the Chinese version and the English version, the Chinese version shall prevail.本页其余部分刻意留为空白The Remainder of this page is intentionally left blank19秘密文件 Strictly Confidential有鉴于此，各方已使得经其授权的代表于文首所述日期签署了本股权质押协议并即生效，以昭信守。IN WITNESS WHEREOF, the Parties have caused their authorized representatives to execute this Equity Interest Pledge Agreement as of the date first abovewritten.甲方：中传天下信息科技（深圳）有限公司（盖章）Party A: Zhongchuan Tianxia Information Technology (Shenzhen) Co., Ltd. (Seal)签字：By:/s/ Hong Ting姓名：洪婷Name: Hong Ting职务：总经理Title: General Manager秘密文件 Strictly Confidential有鉴于此，各方已使得经其授权的代表于文首所述日期签署了本股权质押协议并即生效，以昭信守。IN WITNESS WHEREOF, the Parties have caused their authorized representatives to execute this Equity Interest Pledge Agreement as of the date first abovewritten.乙方：Party B:宋雪松Song Xuesong签署：By:/s/ Song Xuesong秘密文件 Strictly Confidential有鉴于此，各方已使得经其授权的代表于文首所述日期签署了本股权质押协议并即生效，以昭信守。IN WITNESS WHEREOF, the Parties have caused their authorized representatives to execute this Equity Interest Pledge Agreement as of the date first abovewritten.乙方：Party B:陈蔚力Chen Weili签字：By:/s/ Chen Weili秘密文件 Strictly Confidential有鉴于此，各方已使得经其授权的代表于文首所述日期签署了本股权质押协议并即生效，以昭信守。IN WITNESS WHEREOF, the Parties have caused their authorized representatives to execute this Equity Interest Pledge Agreement as of the date first abovewritten.乙方：Party B:王平Wang Ping签字：By:/s/ Wang Ping秘密文件 Strictly Confidential有鉴于此，各方已使得经其授权的代表于文首所述日期签署了本股权质押协议并即生效，以昭信守。IN WITNESS WHEREOF, the Parties have caused their authorized representatives to execute this Equity Interest Pledge Agreement as of the date first abovewritten.乙方：Party B:刘东来Liu Donglai签字：By:/s/ Liu Donglai秘密文件 Strictly Confidential有鉴于此，各方已使得经其授权的代表于文首所述日期签署了本股权质押协议并即生效，以昭信守。IN WITNESS WHEREOF, the Parties have caused their authorized representatives to execute this Equity Interest Pledge Agreement as of the date first abovewritten.丙方：北京中传视讯科技有限公司（盖章）Party B: Beijing Mobile Vision Technology Co., Ltd. (Seal)签字：By:/s/ Song Xuesong姓名：宋雪松Name: Song Xuesong职务：董事长Title: Chairman of the Board秘密文件 Strictly Confidential附件：Attachments:1.北京中传视讯科技有限公司股东名册；Shareholders' Register of Beijing Mobile Vision Technology Co., Ltd.;2.北京中传视讯科技有限公司的出资证明书；The Capital Contribution Certificate of Beijing Mobile Vision Technology Co., Ltd.;3.独家业务合作协议。Exclusive Business Cooperation Agreement.秘密文件 Strictly ConfidentialEX4.20 6 f20f2017ex420_luokung.htm POWER OF ATTORNEY BY WEILI CHEN, DATED AUGUST 31, 2015Exhibit 4.20授权委托书Power of Attorney本人陈蔚力，持有中华人民共和国身份证（号码：*************** 516），通讯地址为广东省，系拥有北京中传视讯科技有限公司（“中传视讯”）14.0848%股权（“相关股权”）的股东，就相关股权，特此不可撤销地授权中传天下信息科技（深圳）有限公司（“深圳中传天下”）在本授权委托书的有效期内行使如下权利：The undersigned, Chen Weili, a person with the PRC identification card number of ***************516, with address at: Guangdong, and a holder of14.0848% of the entire registered capital ("Shares") in Beijing Mobile Vision Technology Co., Ltd. ("Mobile Vision"), hereby irrevocably authorize ZhongchuanTianxia Information Technology (Shenzhen) Co., Ltd. ("WFOE") to exercise the following rights relating to Shares during the term of this Power of Attorney:授权深圳中传天下作为本人唯一的排他的代理人就有关相关股权的事宜全权代表本人行使包括但不限于如下的权利：1）参加中传视讯的股东会；2）行使按照法律和中传视讯章程规定本人所享有的全部股东权利和股东表决权，包括但不限于出售或转让或质押或处置相关股权的全部或任何一部分；以及3）作为本人的授权代表指定和任命中传视讯的法定代表人、董事和/或执行董事、监事、经理以及其他高级管理人员等。但中传视讯利用该等授权做出违反中华人民共和国法律的决定无效。WFOE is hereby authorized to act on behalf of myself as my exclusive agent and attorney with respect to all matters concerning My Shareholding, includingwithout limitation: 1) attending shareholders' meetings of Mobile Vision; 2) exercising all the shareholder's rights and shareholder's voting rights I am entitled tounder the laws of China and Articles of Association of Mobile Vision, including but not limited to the sale or transfer or pledge or disposition of My Shareholding inpart or in whole; and 3) designating and appointing on behalf of myself the legal representative, director and/or executive director, supervisor, manager and othersenior management members of Mobile Vision. However, the decision made by Mobile Vision taking advantage of the power of attorney which is against the PRClaws shall be null and void.1深圳中传天下将有权在授权范围内代表本人签署独家购买权协议（本人应要求作为协议方）中约定的转让协议，如期履行本人作为协议一方的与本授权委托书同日签署的股权质押协议和独家购买权协议，该权利的行使将不对本授权形成任何限制。Without limiting the generality of the powers granted hereunder, WFOE shall have the power and authority under this Power of Attorney to execute theTransfer Contracts stipulated in Exclusive Option Agreement, to which I am required to be a party, on behalf of myself, and to effect the terms of the Share PledgeAgreement and Exclusive Option Agreement, both dated the date hereof, to which I am a party.深圳中传天下就相关股权的一切行为均视为本人的行为，签署的一切文件均视为本人签署，本人会予以承认。All the actions associated with Shares conducted by WFOE shall be deemed as my own actions, and all the documents related to Shares executed by WFOEshall be deemed to be executed by me. I hereby acknowledge and ratify those actions and/or documents by the WFOE.深圳中传天下有转委托权，可以就上述事项的办理自行再委托其他人或单位而不必事先通知本人或获得本人的同意。WFOE is entitled to reauthorize or assign its rights related to the aforesaid matters to any other person or entity at its own discretion and without giving priornotice to me or obtaining my consent.在本人为中传视讯的股东期间，本授权委托书不可撤销并持续有效，自授权委托书签署之日起算。This Power of Attorney is coupled with an interest and shall be irrevocable and continuously valid from the date of execution of this Power of Attorney, solong as I am a shareholder of Mobile Vision.本授权委托书期间，本人特此放弃已经通过本授权委托书授权给深圳中传天下的与相关股权有关的所有权利，不再自行行使该等权利。During the term of this Power of Attorney, I hereby waive all the rights associated with Shares, which have been authorized to WFOE through this Power ofAttorney, and shall not exercise such rights by myself.本授权委托书以中文和英文书就，中英文版本如有冲突，应以中文版为准。This Power of Attorney is written in Chinese and English; in case there is any conflict between the Chinese version and the English version, the Chineseversion shall prevail.陈蔚力Chen Weili签署：By:日期：年月日Date:2EX4.21 7 f20f2017ex421_luokung.htm POWER OF ATTORNEY BY PING WANG, DATED AUGUST 31, 2015Exhibit 4.21授权委托书Power of Attorney本人王平，持有中华人民共和国身份证（号码：***************01x），通讯地址为广东省，系拥有北京中传视讯科技有限公司（“中传视讯”）19.9872%股权（“相关股权”）的股东，就相关股权，特此不可撤销地授权中传天下信息科技（深圳）有限公司（“深圳中传天下”）在本授权委托书的有效期内行使如下权利：The undersigned, Wang Ping, a person with the PRC identification card number of ***************01x, with address at Guangdong, and a holder of19.9872% of the entire registered capital (“Shares”) in Beijing Mobile Vision Technology Co., Ltd. (“Mobile Vision”), hereby irrevocably authorize ZhongchuanTianxia Information Technology (Shenzhen) Co., Ltd. (“WFOE”) to exercise the following rights relating to Shares during the term of this Power of Attorney:授权深圳中传天下作为本人唯一的排他的代理人就有关相关股权的事宜全权代表本人行使包括但不限于如下的权利：1）参加中传视讯的股东会；2）行使按照法律和中传视讯章程规定本人所享有的全部股东权利和股东表决权，包括但不限于出售或转让或质押或处置相关股权的全部或任何一部分；以及3）作为本人的授权代表指定和任命中传视讯的法定代表人、董事和/或执行董事、监事、经理以及其他高级管理人员等。但中传视讯利用该等授权做出违反中华人民共和国法律的决定无效。WFOE is hereby authorized to act on behalf of myself as my exclusive agent and attorney with respect to all matters concerning My Shareholding, includingwithout limitation: 1) attending shareholders’ meetings of Mobile Vision; 2) exercising all the shareholder’s rights and shareholder’s voting rights I am entitled tounder the laws of China and Articles of Association of Mobile Vision, including but not limited to the sale or transfer or pledge or disposition of My Shareholding inpart or in whole; and 3) designating and appointing on behalf of myself the legal representative, director and/or executive director, supervisor, manager and othersenior management members of Mobile Vision. However, the decision made by Mobile Vision taking advantage of the power of attorney which is against the PRClaws shall be null and void.1深圳中传天下将有权在授权范围内代表本人签署独家购买权协议（本人应要求作为协议方）中约定的转让协议，如期履行本人作为协议一方的与本授权委托书同日签署的股权质押协议和独家购买权协议，该权利的行使将不对本授权形成任何限制。Without limiting the generality of the powers granted hereunder, WFOE shall have the power and authority under this Power of Attorney to execute theTransfer Contracts stipulated in Exclusive Option Agreement, to which I am required to be a party, on behalf of myself, and to effect the terms of the Share PledgeAgreement and Exclusive Option Agreement, both dated the date hereof, to which I am a party.深圳中传天下就相关股权的一切行为均视为本人的行为，签署的一切文件均视为本人签署，本人会予以承认。All the actions associated with Shares conducted by WFOE shall be deemed as my own actions, and all the documents related to Shares executed by WFOEshall be deemed to be executed by me. I hereby acknowledge and ratify those actions and/or documents by the WFOE.深圳中传天下有转委托权，可以就上述事项的办理自行再委托其他人或单位而不必事先通知本人或获得本人的同意。WFOE is entitled to reauthorize or assign its rights related to the aforesaid matters to any other person or entity at its own discretion and without giving priornotice to me or obtaining my consent.在本人为中传视讯的股东期间，本授权委托书不可撤销并持续有效，自授权委托书签署之日起算。This Power of Attorney is coupled with an interest and shall be irrevocable and continuously valid from the date of execution of this Power of Attorney, solong as I am a shareholder of Mobile Vision.本授权委托书期间，本人特此放弃已经通过本授权委托书授权给深圳中传天下的与相关股权有关的所有权利，不再自行行使该等权利。During the term of this Power of Attorney, I hereby waive all the rights associated with Shares, which have been authorized to WFOE through this Power ofAttorney, and shall not exercise such rights by myself.本授权委托书以中文和英文书就，中英文版本如有冲突，应以中文版为准。This Power of Attorney is written in Chinese and English; in case there is any conflict between the Chinese version and the English version, the Chineseversion shall prevail.王平Wang Ping签署：By:日期：年月日Date:2EX4.22 8 f20f2017ex422_luokung.htm POWER OF ATTORNEY BY DONGLAI LIU, DATED AUGUST 31, 2015Exhibit 4.22授权委托书Power of Attorney本人刘东来，持有中华人民共和国身份证（号码：***************912），通讯地址为: ，系拥有北京中传视讯科技有限公司（“中传视讯”）4.1035%股权（“相关股权”）的股东，就相关股权，特此不可撤销地授权中传天下信息科技（深圳）有限公司（“深圳中传天下”）在本授权委托书的有效期内行使如下权利：The undersigned, Liu Donglai, a person with the PRC identification card number of ***************912, with address at: , and a holder of 4.1035% of theentire registered capital (“Shares”) in Beijing Mobile Vision Technology Co., Ltd. (“Mobile Vision”), hereby irrevocably authorize Zhongchuan Tianxia InformationTechnology (Shenzhen) Co., Ltd. (“WFOE”) to exercise the following rights relating to Shares during the term of this Power of Attorney:授权深圳中传天下作为本人唯一的排他的代理人就有关相关股权的事宜全权代表本人行使包括但不限于如下的权利：1）参加中传视讯的股东会；2）行使按照法律和中传视讯章程规定本人所享有的全部股东权利和股东表决权，包括但不限于出售或转让或质押或处置相关股权的全部或任何一部分；以及3）作为本人的授权代表指定和任命中传视讯的法定代表人、董事和/或执行董事、监事、经理以及其他高级管理人员等。但中传视讯利用该等授权做出违反中华人民共和国法律的决定无效。WFOE is hereby authorized to act on behalf of myself as my exclusive agent and attorney with respect to all matters concerning My Shareholding, includingwithout limitation: 1) attending shareholders’ meetings of Mobile Vision; 2) exercising all the shareholder’s rights and shareholder’s voting rights I am entitled tounder the laws of China and Articles of Association of Mobile Vision, including but not limited to the sale or transfer or pledge or disposition of My Shareholding inpart or in whole; and 3) designating and appointing on behalf of myself the legal representative, director and/or executive director, supervisor, manager and othersenior management members of Mobile Vision. However, the decision made by Mobile Vision taking advantage of the power of attorney which is against the PRClaws shall be null and void.1深圳中传天下将有权在授权范围内代表本人签署独家购买权协议（本人应要求作为协议方）中约定的转让协议，如期履行本人作为协议一方的与本授权委托书同日签署的股权质押协议和独家购买权协议，该权利的行使将不对本授权形成任何限制。Without limiting the generality of the powers granted hereunder, WFOE shall have the power and authority under this Power of Attorney to execute theTransfer Contracts stipulated in Exclusive Option Agreement, to which I am required to be a party, on behalf of myself, and to effect the terms of the Share PledgeAgreement and Exclusive Option Agreement, both dated the date hereof, to which I am a party.深圳中传天下就相关股权的一切行为均视为本人的行为，签署的一切文件均视为本人签署，本人会予以承认。All the actions associated with Shares conducted by WFOE shall be deemed as my own actions, and all the documents related to Shares executed by WFOEshall be deemed to be executed by me. I hereby acknowledge and ratify those actions and/or documents by the WFOE.深圳中传天下有转委托权，可以就上述事项的办理自行再委托其他人或单位而不必事先通知本人或获得本人的同意。WFOE is entitled to reauthorize or assign its rights related to the aforesaid matters to any other person or entity at its own discretion and without giving priornotice to me or obtaining my consent.在本人为中传视讯的股东期间，本授权委托书不可撤销并持续有效，自授权委托书签署之日起算。This Power of Attorney is coupled with an interest and shall be irrevocable and continuously valid from the date of execution of this Power of Attorney, solong as I am a shareholder of Mobile Vision.本授权委托书期间，本人特此放弃已经通过本授权委托书授权给深圳中传天下的与相关股权有关的所有权利，不再自行行使该等权利。During the term of this Power of Attorney, I hereby waive all the rights associated with Shares, which have been authorized to WFOE through this Power ofAttorney, and shall not exercise such rights by myself.本授权委托书以中文和英文书就，中英文版本如有冲突，应以中文版为准。This Power of Attorney is written in Chinese and English; in case there is any conflict between the Chinese version and the English version, the Chineseversion shall prevail.刘东来Liu Donglai签署：By:日期：年月日Date:2EX4.23 9 f20f2017ex423_luokung.htm POWER OF ATTORNEY BY XUESONG SONG, DATED AUGUST 31, 2015Exhibit 4.23授权委托书Power of Attorney本人宋雪松，持有中华人民共和国身份证（号码：***************417），通讯地址为，系拥有北京中传视讯科技有限公司（“中传视讯”）61.8245%股权（“相关股权”）的股东，就相关股权，特此不可撤销地授权中传天下信息科技（深圳）有限公司（“深圳中传天下”）在本授权委托书的有效期内行使如下权利：The undersigned, Song Xuesong, a person with the PRC identification card number of ***************417, with address at , and a holder of 61.8245% ofthe entire registered capital (“Shares”) in Beijing Mobile Vision Technology Co., Ltd. (“Mobile Vision”), hereby irrevocably authorize Zhongchuan TianxiaInformation Technology (Shenzhen) Co., Ltd. (“WFOE”) to exercise the following rights relating to Shares during the term of this Power of Attorney:授权深圳中传天下作为本人唯一的排他的代理人就有关相关股权的事宜全权代表本人行使包括但不限于如下的权利：1）参加中传视讯的股东会；2）行使按照法律和中传视讯章程规定本人所享有的全部股东权利和股东表决权，包括但不限于出售或转让或质押或处置相关股权的全部或任何一部分；以及3）作为本人的授权代表指定和任命中传视讯的法定代表人、董事和/或执行董事、监事、经理以及其他高级管理人员等。但中传视讯利用该等授权做出违反中华人民共和国法律的决定无效。WFOE is hereby authorized to act on behalf of myself as my exclusive agent and attorney with respect to all matters concerning My Shareholding, includingwithout limitation: 1) attending shareholders’ meetings of Mobile Vision; 2) exercising all the shareholder’s rights and shareholder’s voting rights I am entitled tounder the laws of China and Articles of Association of Mobile Vision, including but not limited to the sale or transfer or pledge or disposition of My Shareholding inpart or in whole; and 3) designating and appointing on behalf of myself the legal representative, director and/or executive director, supervisor, manager and othersenior management members of Mobile Vision. However, the decision made by Mobile Vision taking advantage of the power of attorney which is against the PRClaws shall be null and void.1深圳中传天下将有权在授权范围内代表本人签署独家购买权协议（本人应要求作为协议方）中约定的转让协议，如期履行本人作为协议一方的与本授权委托书同日签署的股权质押协议和独家购买权协议，该权利的行使将不对本授权形成任何限制。Without limiting the generality of the powers granted hereunder, WFOE shall have the power and authority under this Power of Attorney to execute theTransfer Contracts stipulated in Exclusive Option Agreement, to which I am required to be a party, on behalf of myself, and to effect the terms of the Share PledgeAgreement and Exclusive Option Agreement, both dated the date hereof, to which I am a party.深圳中传天下就相关股权的一切行为均视为本人的行为，签署的一切文件均视为本人签署，本人会予以承认。All the actions associated with Shares conducted by WFOE shall be deemed as my own actions, and all the documents related to Shares executed by WFOEshall be deemed to be executed by me. I hereby acknowledge and ratify those actions and/or documents by the WFOE.深圳中传天下有转委托权，可以就上述事项的办理自行再委托其他人或单位而不必事先通知本人或获得本人的同意。WFOE is entitled to reauthorize or assign its rights related to the aforesaid matters to any other person or entity at its own discretion and without giving priornotice to me or obtaining my consent.在本人为中传视讯的股东期间，本授权委托书不可撤销并持续有效，自授权委托书签署之日起算。This Power of Attorney is coupled with an interest and shall be irrevocable and continuously valid from the date of execution of this Power of Attorney, solong as I am a shareholder of Mobile Vision.本授权委托书期间，本人特此放弃已经通过本授权委托书授权给深圳中传天下的与相关股权有关的所有权利，不再自行行使该等权利。During the term of this Power of Attorney, I hereby waive all the rights associated with Shares, which have been authorized to WFOE through this Power ofAttorney, and shall not exercise such rights by myself.本授权委托书以中文和英文书就，中英文版本如有冲突，应以中文版为准。This Power of Attorney is written in Chinese and English; in case there is any conflict between the Chinese version and the English version, the Chineseversion shall prevail.宋雪松Song Xuesong签署：By:日期：年月日Date:2EX8.1 10 f20f2017ex81_luokung.htm LIST OF SUBSIDIARIES AND CONSOLIDATED VARIABLE INTEREST ENTITIESExhibit 8.1List of Subsidiaries of the CompanyName of EntityJurisdiction of Incorporation/OrganizationLK Technology Ltd.British Virgin IslandsTopsky Infotech Holdings Pte Ltd.SingaporeSuperengine Holdings LimitedBritish Virgin IslandsMMB LimitedHong KongMobile Media (China Limited)Hong KongZhong Chuan Tian Xia Information and Technology (Beijing) LimitedBeijing, PRCZhong Chuan Xia Information and Technology (Shenzhen) LimitedShenzhen, PRCBeijing Zhong Chuan Shi Xun Technology Limited (VIE Entity)Beijing, PRCJiangsu Zhong Chuan Rui You Information and Technology Limited (VIE Entity)Jiangsu, PRCHuoerguosi Luokuang Information and Technology Limited (VIE Entity)Huoerguosi, PRCShenzhen Jiu Zhou Shi Dai Digital Technology LimitedShenzhen, PRCEX10.1 11 f20f2017ex101_luokung.htm EMPLOYMENT AGREEMENT, DATED AUGUST 19, 2018, BETWEEN LUOKUNG TECHNOLOGY CORP. AND XUESONGSONGExhibit 10.1EMPLOYMENT AGREEMENTThis EMPLOYMENT AGREEMENT (the “Agreement”) is made and entered into as of this 19 day of August, 2018 (the “Effective Date”), by and between LuokungTechnology Corp., a British Virgin Islands corporation (the “Company”) and Xuesong Song (the “Executive”), a Chinese citizen.WITNESSETH:WHEREAS, the parties desire to enter into this Agreement setting forth the terms and conditions of the employment relationship between the Executiveand the Company.NOW, THEREFORE, in consideration of the foregoing premises and the mutual covenants and agreements contained herein, the parties hereto agree asfollows:1. EMPLOYMENT.1.1 Agreement to Employ. The Company hereby agrees to employ Executive, and Executive hereby agrees to serve, subject to the provisions of thisAgreement, as an officer and employee of the Company.1.2 Duties and Schedule. Executive shall serve as the Company’s Chief Executive Officer (“CEO”). The responsibilities of the Executive shall be subject tothe bylaws of the Company and determined by the Board of Directors of the Company (the “Board”). The Executive shall report directly to the Board and shall havesuch responsibilities as designated by the Board of the Company to the extent that such responsibilities are not inconsistent with all applicable laws, regulationsand rules. Executive shall devote his best efforts and all of his business time to his position with the Company during the Term.2. TERM OF EMPLOYMENT. Unless Executive’s employment shall sooner terminate pursuant to Section 4, the Company shall employ Executive for a fouryear term commencing on the Effective Date (the “Term”), which Term shall be renewable upon mutual agreement of the Company and the Executive, as approved bythe Board.3. COMPENSATION.3.1 Salary. Executive’s salary during the Term shall be $Nil.3.2 Bonus. At the sole discretion of the Board, or any committee duly designated by the Board and authorized to act thereto, the Executive shall be eligiblefor an annual cash bonus.3.3 Vacation. Executive shall be entitled to 8 days of paid vacation per year. In the event that Executive remains employed by the Company for 3 years ormore, Executive shall be entitled to 12 days of paid vacation.3.4 Business Expenses. Executive shall be reimbursed by the Company for all ordinary and necessary expenses incurred by Executive; provided that theyare incurred and approved in writing in accordance with the Company’s expense policy.3.5 Benefits. During the Term, Executive shall be allowed to participate, on the same basis generally as other employees of the Company, in all generalemployee benefit plans and programs, including improvements or modifications of the same, which may exist as of the Effective Date or thereafter and which aremade available by the Company to all or substantially all of its employees. Such benefits, plans, and programs may include, without limitation, any health, and dentalinsurance or 401K programs, if and when instituted. Any benefit plan currently existing or instituted by the Company after the Effective Date may be altered, changeor discontinued by the Company at its sole discretion and at any time without obligation of any nature to Executive. Except as specifically provided herein, nothingin this Agreement is to be construed or interpreted to increase or alter in any way the rights, participation, coverage, or benefits under such benefit plans orprograms to other than those provided to other employees pursuant to the terms and conditions of such benefit plans and programs. 14. TERMINATION.4.1 Death. This Agreement shall terminate immediately upon the death of Executive, and Executive’s estate or Executive’s legal representative, as the casemay be, shall be entitled to Executive’s accrued and unpaid Salary as of the date of Executive’s death, plus all other compensation and benefits that were vestedthrough the date of Executive’s death.4.2 Disability. In the event of Executive’s Disability, this Agreement shall terminate and Executive shall be entitled to (a) accrued and unpaid Salary andvacation through the first date that a Disability is determined; and (b) all other compensation and benefits that were vested through the first date that a Disabilityhas been determined. “Disability” means the good faith determination of the Board that Executive has become so physically or mentally incapacitated or disabled asto be unable to satisfactorily perform his duties hereunder for a period of ninety (90) consecutive calendar days or for one hundred twenty (120) days in any threehundred sixty (360) day period, such determination based upon a certificate as to such physical or mental disability issued by a licensed physician and/orpsychiatrist (as the case may be) mutually agreed upon by Executive and the Company.4.3 Termination by Company for Cause. The Company may terminate the Executive for Cause and such termination shall take effect upon the receipt byExecutive of the Notice of Termination. Upon the effective date of the termination for Cause, Executive shall be solely entitled to accrued and unpaid Salary throughsuch effective date. “Cause” means: (i) engaging in any act, omission or misconduct that is injurious to the Company or an affiliate; (ii) gross negligence or willfulmisconduct in connection with the performance of duties; (iii) conviction of a criminal offense (other than minor traffic offenses); (iv) fraud, embezzlement ormisappropriation of funds or property of the Company or an affiliate; (v) material breach of any term of any employment or other services, confidentiality, intellectualproperty or noncompetition agreements, if any, between the Executive and the Company or an affiliate; (vi) the entry of an order duly issued by any regulatoryagency (including federal, state and local regulatory agencies and selfregulatory bodies) having jurisdiction over the Company or an affiliate requiring the removalof the Executive from any office held with the Company or prohibiting the Executive from participating in the business or affairs of the Company or any affiliate; or(vii) the revocation or threatened revocation of any of the Company’s or an affiliate’s government licenses, permits or approvals, which is primarily due to theExecutive’s action or inaction and such revocation or threatened revocation would be alleviated or mitigated in any material respect by the termination of theExecutive’s employment or services with the Company or an affiliate. 4.4 Voluntary Termination by Executive. The Executive may voluntarily terminate his employment for any reason and such termination shall take effect 30days after the receipt by Company of the Notice of Termination. Upon the effective date of such termination, Executive shall be entitled to (a) accrued and unpaidSalary and vacation through such termination date; and (b) all other compensation and benefits that were vested through such termination date. In the eventExecutive is terminated without notice, it shall be deemed a termination by the Company for Cause.4.5 Notice of Termination. Any termination of the employment by the Company or the Executive shall be communicated by a notice in accordance withSection 8.4 of this Agreement (the “Notice of Termination”). Such notice shall (a) indicate the specific termination provision in this Agreement relied upon and (b) ifthe termination is for Cause, the date on which the Executive’s employment is to be terminated.4.6 Severance. The Executive shall not be entitled to severance payments upon any termination provided in Section 4 herein.5. EMPLOYEE’S REPRESENTATION. The Executive represents and warrants to the Company that: (a) he is subject to no contractual, fiduciary or otherobligation which may affect the performance of his duties under this Agreement; (b) he has terminated, in accordance with their terms, any contractual obligationwhich may affect his performance under this Agreement; and (c) his employment with the Company will not require him to use or disclose proprietary or confidentialinformation of any other person or entity.26. CONFIDENTIAL INFORMATION Except as permitted or directed by the Board of Directors of the Company in writing, during the time the Executive isemployed by the Company or at any time thereafter, the Executive shall not use for his personal purposes nor divulge, furnish, or make accessible to anyone or usein any way (other than in the ordinary course of the business of the Company) any confidential or secret information or knowledge of the Company, whetherdeveloped by himself or by others. Such confidential and/or secret information encompassed by this Section 6 includes, but is not limited to, the Company’scustomer and supplier lists, business plans, software, systems, and financial, marketing, and personnel information. The Executive agrees to refrain from any acts oromissions that would reduce the value of any confidential or secret knowledge or information to the Company, both during his employment hereunder and at anytime after the termination of his employment. The Executive’s obligations of confidentiality under this Section 6 shall not apply to any knowledge or information thatis now published publicly or that subsequently becomes generally publicly known, other than as a direct or indirect result of a breach of this Agreement by theExecutive.7. NONCOMPETITION: NONSOLICITATION; INVENTIONS.7.1 NonCompetition. During the employment of the Executive under this Agreement and for a period of six (6) months after termination of suchemployment, the Executive shall not at any time compete on his own behalf, or on behalf of any other person or entity, with the Company or any of its affiliateswithin all territories in which the Company does business with respect to the business of the Company or any of its affiliates as such business shall be conductedon the date hereof or during the employment of the Executive under this Agreement. The ownership by the Executive of not more than 5% of a corporation,partnership or other enterprise shall not constitute a violation hereof.7.2 NonSolicitation. During the employment of the Executive under this Agreement and thereafter Executive shall not at any time (i) solicit or induce, onhis own behalf or on behalf of any other person or entity, any employee of the Company or any of its affiliates to leave the employ of the Company or any of itsaffiliates; or (ii) solicit or induce, on his own behalf or on behalf of any other person or entity, any customer or Prospective Customer of the Company or any of theirrespective affiliates to reduce its business with the Company or any of its affiliates. For the purposes of this Agreement, “Prospective Customer” shall mean anyindividual, corporation, trust or other business entity which has either (a) entered into a nondisclosure agreement with the Company or any Company subsidiary oraffiliate or (b) has within the preceding 12 months received a currently pending and not rejected written proposal in reasonable detail from the Company or any ofthe Company’s subsidiary or affiliate.7.3 Inventions and Patents. The Company shall be entitled to the sole benefit and exclusive ownership of any inventions or improvements in products,processes, or other things that may be made or discovered by Executive while he is in the service of the Company, and all patents for the same. During the Term,Executive shall do all acts necessary or required by the Company to give effect to this section and, following the Term, Executive shall do all acts reasonablynecessary or required by the Company to give effect to this section. In all cases, the Company shall pay all costs and fees associated with such acts by Executive.7.4 Return of Property. The Executive agrees that all property in the Executive’s possession that he obtains or is assigned in the course of his employmentwith the Company, including, without limitation, all documents, reports, manuals, memoranda, customer lists, credit cards, keys, access cards, and all other propertyrelating in any way to the business of the Company, is the exclusive property of the Company, even if the Executive authored, created, or assisted in authoring orcreating such property. The Executive shall return to the Company all such property immediately upon termination of employment or at such earlier time as theCompany may request.7.5Court Ordered Revisions.If any portion of this Section 7 is found by a court of competent jurisdiction to be invalid or unenforceable, but would be validand enforceable if modified, this Section 7 shall apply with such modifications necessary to make this Section 7 valid and enforceable. Any portion of this Section 7not required to be so modified shall remain in full force and effect and not be affected thereby.7.6 Specific Performance. The Executive acknowledges that the remedy at law for any breach of any of the provisions of Section 7 will be inadequate, andthat the Company shall be entitled, in addition to any remedy at law or in equity, to preliminary and permanent injunctive relief and specific performance.38. MISCELLANEOUS.8.1 Indemnification. The Company and each of its subsidiaries shall, to the maximum extent provided under applicable law, indemnify and hold Executiveharmless from and against any expenses, including reasonable attorney’s fees, judgments, fines, settlements and other legally permissible amounts (“Losses”),incurred in connection with any proceeding arising out of, or related to, Executive’s employment by the Company, other than any such Losses incurred as a result ofExecutive’s negligence or willful misconduct. The Company shall, or shall cause a subsidiary thereof to, advance to Executive any expenses, including attorney’sfees and costs of settlement, incurred in defending any such proceeding to the maximum extent permitted by applicable law. Such costs and expenses incurred byExecutive in defense of any such proceeding shall be paid by the Company or applicable subsidiary in advance of the final disposition of such proceeding promptlyupon receipt by the Company of (a) written request for payment; (b) appropriate documentation evidencing the incurrence, amount and nature of the costs andexpenses for which payment is being sought; and (c) an undertaking adequate under applicable law made by or on behalf of Executive to repay the amounts soadvanced if it shall ultimately be determined pursuant to any nonappealable judgment or settlement that Executive is not entitled to be indemnified by the Companyor any subsidiary thereof. The Company will provide Executive with coverage under all directors and officers liability insurance policies that it has in effect duringthe Term, with no deductible to Executive. 8.2 Applicable Law. Except as may be otherwise provided herein, this Agreement shall be governed by and construed in accordance with the laws ofChina, applied without reference to principles of conflict of laws. Any dispute arising from or in connection with this Agreement shall be submitted to ShanghaiInternational Arbitration Center (the “Center”) for arbitration under the then effective rules of the Center. The arbitration award shall be the sole, binding, exclusiveand final remedy for resolving any dispute between the parties.8.3 Amendments. This Agreement may not be amended or modified otherwise than by a written agreement executed by the parties hereto or their respectivesuccessors or legal representatives.8.4 Notices. All notices and other communications hereunder shall be in writing and shall be given by handdelivery to the other party, by an internationalmail courier, or by registered or certified mail, return receipt requested, postage prepaid, addressed as follows:If to the Executive:Xuesong Song________________________________________________If to the Company:______________________________________Or to such other address as either party shall have furnished to the other in writing in accordance herewith. Notices and communications shall be effective whendelivered to the addressee.8.5 Withholding. The Company may withhold from any amounts payable under the Agreement, such federal, state and local income, unemployment, socialsecurity and similar employment related taxes and similar employment related withholdings as shall be required to be withheld pursuant to any applicable law orregulation.8.6 Severability. The invalidity or unenforceability of any provision of this Agreement shall not affect the validity or enforceability of any other provision ofthis Agreement and any such provision which is not valid or enforceable in whole shall be enforced to the maximum extent permitted by law.8.7 Captions. The captions of this Agreement are not part of the provisions and shall have no force or effect.48.8 Entire Agreement. This Agreement contains the entire agreement among the parties concerning the subject matter hereof and supersedes all prioragreements, understandings, discussions, negotiations and undertakings, whether written or oral, between the parties with respect thereto.8.9 Survival. The respective rights and obligations of the parties hereunder shall survive any termination of this Agreement or the Executive’s employmenthereunder to the extent necessary to the intended preservation of such rights and obligations.8.10 Waiver. Either Party's failure to enforce any provision or provisions of this Agreement shall not in any way be construed as a waiver of any suchprovision or provisions, or prevent that party thereafter from enforcing each and every other provision of this Agreement.8.11 Successors. This Agreement is personal to Executive and, without the prior express written consent of the Company, shall not be assignable byExecutive. This Agreement shall inure to the benefit of and be enforceable by Executive’s estate, heirs, beneficiaries, and/or legal representatives. This Agreementshall inure to the benefit of and be binding upon the Company and its successors and assigns.8.12 Joint Efforts/Counterparts. Preparation of this Agreement shall be deemed to be the joint effort of the parties hereto and shall not be construed moreseverely against any party. This Agreement may be signed in two or more counterparts, each of which shall be deemed an original and all of which together shallconstitute one and the same instrument.8.13 Representation by Counsel. Each Party hereby represents that it has had the opportunity to be represented by legal counsel of its choice inconnection with the negotiation and execution of this Agreement.IN WITNESS WHEREOF, the parties have executed this Agreement as of the day and year first above written.EXECUTIVE:LUOKUNG TECHNOLOGY CORP./s/ Xuesong Song/s/ Jie YuXuesong SongJie YuChief Financial Officer5EX10.2 12 f20f2017ex102_luokung.htm EMPLOYMENT AGREEMENT, DATED AUGUST 19, 2018, BY AND BETWEEN LUOKUNG TECHNOLOGY CORP. AND JIEYUExhibit 10.2EMPLOYMENT AGREEMENTThis EMPLOYMENT AGREEMENT (the “Agreement”) is made and entered into as of this 19 day of August, 2018 (the “Effective Date”), by and between LuokungTechnology Corp., a British Virgin Islands corporation (the “Company”) and Jie (Jay) Yu (the “Executive”), a Chinese citizen.WITNESSETH:WHEREAS, the parties desire to enter into this Agreement setting forth the terms and conditions of the employment relationship between the Executiveand the Company.NOW, THEREFORE, in consideration of the foregoing premises and the mutual covenants and agreements contained herein, the parties hereto agree asfollows:1. EMPLOYMENT.1.1 Agreement to Employ. The Company hereby agrees to employ Executive, and Executive hereby agrees to serve, subject to the provisions of thisAgreement, as an officer and employee of the Company.1.2 Duties and Schedule. Executive shall serve as the Company’s Chief Financial Officer, and be the Principal Financial Officer and Principal AccountingOfficer of the Company and responsible for all financial matters and management of the Company. The Executive shall report directly to the Company’s ChiefExecutive Officer and Board of Directors (the “Board”) and shall have such responsibilities as designated by the Chief Executive Officer or Board to the extent thatsuch responsibilities are not inconsistent with all applicable laws, regulations and rules. Executive shall devote his best efforts and all of his business time to hisposition with the Company during the Term.2. TERM OF EMPLOYMENT. Unless Executive’s employment shall sooner terminate pursuant to Section 4, the Company shall employ Executive for a fouryear term commencing on the Effective Date (the “Term”), which Term shall be renewable upon mutual agreement of the Company and the Executive, as approved bythe Board.3. COMPENSATION.3.1 Salary. Executive’s salary during the Term shall be RMB700,000 per year (the “Salary”), payable monthly.3.2 Bonus. At the sole discretion of the Board, or any committee duly designated by the Board and authorized to act thereto, the Executive shall be eligiblefor an annual cash bonus.3.3 Vacation. Executive shall be entitled to 8 days of paid vacation per year. In the event that Executive remains employed by the Company for 3 years ormore, Executive shall be entitled to 12 days of paid vacation.3.4 Business Expenses. Executive shall be reimbursed by the Company for all ordinary and necessary expenses incurred by Executive; provided that theyare incurred and approved in writing in accordance with the Company’s expense policy.3.5 Benefits. During the Term, Executive shall be allowed to participate, on the same basis generally as other employees of the Company, in all generalemployee benefit plans and programs, including improvements or modifications of the same, which may exist as of the Effective Date or thereafter and which aremade available by the Company to all or substantially all of its employees. Such benefits, plans, and programs may include, without limitation, any health, and dentalinsurance or 401K programs, if and when instituted. Any benefit plan currently existing or instituted by the Company after the Effective Date may be altered, changeor discontinued by the Company at its sole discretion and at any time without obligation of any nature to Executive. Except as specifically provided herein, nothingin this Agreement is to be construed or interpreted to increase or alter in any way the rights, participation, coverage, or benefits under such benefit plans orprograms to other than those provided to other employees pursuant to the terms and conditions of such benefit plans and programs. 14. TERMINATION.4.1 Death. This Agreement shall terminate immediately upon the death of Executive, and Executive’s estate or Executive’s legal representative, as the casemay be, shall be entitled to Executive’s accrued and unpaid Salary as of the date of Executive’s death, plus all other compensation and benefits that were vestedthrough the date of Executive’s death.4.2 Disability. In the event of Executive’s Disability, this Agreement shall terminate and Executive shall be entitled to (a) accrued and unpaid Salary andvacation through the first date that a Disability is determined; and (b) all other compensation and benefits that were vested through the first date that a Disabilityhas been determined. “Disability” means the good faith determination of the Board that Executive has become so physically or mentally incapacitated or disabled asto be unable to satisfactorily perform his duties hereunder for a period of ninety (90) consecutive calendar days or for one hundred twenty (120) days in any threehundred sixty (360) day period, such determination based upon a certificate as to such physical or mental disability issued by a licensed physician and/orpsychiatrist (as the case may be) mutually agreed upon by Executive and the Company.4.3 Termination by Company for Cause. The Company may terminate the Executive for Cause and such termination shall take effect upon the receipt byExecutive of the Notice of Termination. Upon the effective date of the termination for Cause, Executive shall be solely entitled to accrued and unpaid Salary throughsuch effective date. “Cause” means: (i) engaging in any act, omission or misconduct that is injurious to the Company or an affiliate; (ii) gross negligence or willfulmisconduct in connection with the performance of duties; (iii) conviction of a criminal offense (other than minor traffic offenses); (iv) fraud, embezzlement ormisappropriation of funds or property of the Company or an affiliate; (v) material breach of any term of any employment or other services, confidentiality, intellectualproperty or noncompetition agreements, if any, between the Executive and the Company or an affiliate; (vi) the entry of an order duly issued by any regulatoryagency (including federal, state and local regulatory agencies and selfregulatory bodies) having jurisdiction over the Company or an affiliate requiring the removalof the Executive from any office held with the Company or prohibiting the Executive from participating in the business or affairs of the Company or any affiliate; or(vii) the revocation or threatened revocation of any of the Company’s or an affiliate’s government licenses, permits or approvals, which is primarily due to theExecutive’s action or inaction and such revocation or threatened revocation would be alleviated or mitigated in any material respect by the termination of theExecutive’s employment or services with the Company or an affiliate. 4.4 Voluntary Termination by Executive. The Executive may voluntarily terminate his employment for any reason and such termination shall take effect 30days after the receipt by Company of the Notice of Termination. Upon the effective date of such termination, Executive shall be entitled to (a) accrued and unpaidSalary and vacation through such termination date; and (b) all other compensation and benefits that were vested through such termination date. In the eventExecutive is terminated without notice, it shall be deemed a termination by the Company for Cause.4.5 Notice of Termination. Any termination of the employment by the Company or the Executive shall be communicated by a notice in accordance withSection 8.4 of this Agreement (the “Notice of Termination”). Such notice shall (a) indicate the specific termination provision in this Agreement relied upon and (b) ifthe termination is for Cause, the date on which the Executive’s employment is to be terminated.4.6 Severance. The Executive shall not be entitled to severance payments upon any termination provided in Section 4 herein.5. EMPLOYEE’S REPRESENTATION. The Executive represents and warrants to the Company that: (a) he is subject to no contractual, fiduciary or otherobligation which may affect the performance of his duties under this Agreement; (b) he has terminated, in accordance with their terms, any contractual obligationwhich may affect his performance under this Agreement; and (c) his employment with the Company will not require him to use or disclose proprietary or confidentialinformation of any other person or entity.26. CONFIDENTIAL INFORMATION Except as permitted or directed by the Board of Directors of the Company in writing, during the time the Executive isemployed by the Company or at any time thereafter, the Executive shall not use for his personal purposes nor divulge, furnish, or make accessible to anyone or usein any way (other than in the ordinary course of the business of the Company) any confidential or secret information or knowledge of the Company, whetherdeveloped by himself or by others. Such confidential and/or secret information encompassed by this Section 6 includes, but is not limited to, the Company’scustomer and supplier lists, business plans, software, systems, and financial, marketing, and personnel information. The Executive agrees to refrain from any acts oromissions that would reduce the value of any confidential or secret knowledge or information to the Company, both during his employment hereunder and at anytime after the termination of his employment. The Executive’s obligations of confidentiality under this Section 6 shall not apply to any knowledge or information thatis now published publicly or that subsequently becomes generally publicly known, other than as a direct or indirect result of a breach of this Agreement by theExecutive.7. NONCOMPETITION: NONSOLICITATION; INVENTIONS.7.1 NonCompetition. During the employment of the Executive under this Agreement and for a period of six (6) months after termination of suchemployment, the Executive shall not at any time compete on his own behalf, or on behalf of any other person or entity, with the Company or any of its affiliateswithin all territories in which the Company does business with respect to the business of the Company or any of its affiliates as such business shall be conductedon the date hereof or during the employment of the Executive under this Agreement. The ownership by the Executive of not more than 5% of a corporation,partnership or other enterprise shall not constitute a violation hereof.7.2 NonSolicitation. During the employment of the Executive under this Agreement and thereafter Executive shall not at any time (i) solicit or induce, onhis own behalf or on behalf of any other person or entity, any employee of the Company or any of its affiliates to leave the employ of the Company or any of itsaffiliates; or (ii) solicit or induce, on his own behalf or on behalf of any other person or entity, any customer or Prospective Customer of the Company or any of theirrespective affiliates to reduce its business with the Company or any of its affiliates. For the purposes of this Agreement, “Prospective Customer” shall mean anyindividual, corporation, trust or other business entity which has either (a) entered into a nondisclosure agreement with the Company or any Company subsidiary oraffiliate or (b) has within the preceding 12 months received a currently pending and not rejected written proposal in reasonable detail from the Company or any ofthe Company’s subsidiary or affiliate.7.3 Inventions and Patents. The Company shall be entitled to the sole benefit and exclusive ownership of any inventions or improvements in products,processes, or other things that may be made or discovered by Executive while he is in the service of the Company, and all patents for the same. During the Term,Executive shall do all acts necessary or required by the Company to give effect to this section and, following the Term, Executive shall do all acts reasonablynecessary or required by the Company to give effect to this section. In all cases, the Company shall pay all costs and fees associated with such acts by Executive.7.4 Return of Property. The Executive agrees that all property in the Executive’s possession that he obtains or is assigned in the course of his employmentwith the Company, including, without limitation, all documents, reports, manuals, memoranda, customer lists, credit cards, keys, access cards, and all other propertyrelating in any way to the business of the Company, is the exclusive property of the Company, even if the Executive authored, created, or assisted in authoring orcreating such property. The Executive shall return to the Company all such property immediately upon termination of employment or at such earlier time as theCompany may request.7.5Court Ordered Revisions.If any portion of this Section 7 is found by a court of competent jurisdiction to be invalid or unenforceable, but would be validand enforceable if modified, this Section 7 shall apply with such modifications necessary to make this Section 7 valid and enforceable. Any portion of this Section 7not required to be so modified shall remain in full force and effect and not be affected thereby.7.6 Specific Performance. The Executive acknowledges that the remedy at law for any breach of any of the provisions of Section 7 will be inadequate, andthat the Company shall be entitled, in addition to any remedy at law or in equity, to preliminary and permanent injunctive relief and specific performance.38. MISCELLANEOUS.8.1 Indemnification. The Company and each of its subsidiaries shall, to the maximum extent provided under applicable law, indemnify and hold Executiveharmless from and against any expenses, including reasonable attorney’s fees, judgments, fines, settlements and other legally permissible amounts (“Losses”),incurred in connection with any proceeding arising out of, or related to, Executive’s employment by the Company, other than any such Losses incurred as a result ofExecutive’s negligence or willful misconduct. The Company shall, or shall cause a subsidiary thereof to, advance to Executive any expenses, including attorney’sfees and costs of settlement, incurred in defending any such proceeding to the maximum extent permitted by applicable law. Such costs and expenses incurred byExecutive in defense of any such proceeding shall be paid by the Company or applicable subsidiary in advance of the final disposition of such proceeding promptlyupon receipt by the Company of (a) written request for payment; (b) appropriate documentation evidencing the incurrence, amount and nature of the costs andexpenses for which payment is being sought; and (c) an undertaking adequate under applicable law made by or on behalf of Executive to repay the amounts soadvanced if it shall ultimately be determined pursuant to any nonappealable judgment or settlement that Executive is not entitled to be indemnified by the Companyor any subsidiary thereof. The Company will provide Executive with coverage under all directors and officers liability insurance policies that it has in effect duringthe Term, with no deductible to Executive. 8.2 Applicable Law. Except as may be otherwise provided herein, this Agreement shall be governed by and construed in accordance with the laws ofChina, applied without reference to principles of conflict of laws. Any dispute arising from or in connection with this Agreement shall be submitted to ShanghaiInternational Arbitration Center (the “Center”) for arbitration under the then effective rules of the Center. The arbitration award shall be the sole, binding, exclusiveand final remedy for resolving any dispute between the parties.8.3 Amendments. This Agreement may not be amended or modified otherwise than by a written agreement executed by the parties hereto or their respectivesuccessors or legal representatives.8.4 Notices. All notices and other communications hereunder shall be in writing and shall be given by handdelivery to the other party, by an internationalmail courier, or by registered or certified mail, return receipt requested, postage prepaid, addressed as follows:If to the Executive:Jie Yu________________________________________If to the Company:______________________________________Or to such other address as either party shall have furnished to the other in writing in accordance herewith. Notices and communications shall be effective whendelivered to the addressee.8.5 Withholding. The Company may withhold from any amounts payable under the Agreement, such federal, state and local income, unemployment, socialsecurity and similar employment related taxes and similar employment related withholdings as shall be required to be withheld pursuant to any applicable law orregulation.8.6 Severability. The invalidity or unenforceability of any provision of this Agreement shall not affect the validity or enforceability of any other provision ofthis Agreement and any such provision which is not valid or enforceable in whole shall be enforced to the maximum extent permitted by law.48.7 Captions. The captions of this Agreement are not part of the provisions and shall have no force or effect.8.8 Entire Agreement. This Agreement contains the entire agreement among the parties concerning the subject matter hereof and supersedes all prioragreements, understandings, discussions, negotiations and undertakings, whether written or oral, between the parties with respect thereto.8.9 Survival. The respective rights and obligations of the parties hereunder shall survive any termination of this Agreement or the Executive’s employmenthereunder to the extent necessary to the intended preservation of such rights and obligations.8.10 Waiver. Either Party's failure to enforce any provision or provisions of this Agreement shall not in any way be construed as a waiver of any suchprovision or provisions, or prevent that party thereafter from enforcing each and every other provision of this Agreement.8.11 Successors. This Agreement is personal to Executive and, without the prior express written consent of the Company, shall not be assignable byExecutive. This Agreement shall inure to the benefit of and be enforceable by Executive’s estate, heirs, beneficiaries, and/or legal representatives. This Agreementshall inure to the benefit of and be binding upon the Company and its successors and assigns.8.12 Joint Efforts/Counterparts. Preparation of this Agreement shall be deemed to be the joint effort of the parties hereto and shall not be construed moreseverely against any party. This Agreement may be signed in two or more counterparts, each of which shall be deemed an original and all of which together shallconstitute one and the same instrument.8.13 Representation by Counsel. Each Party hereby represents that it has had the opportunity to be represented by legal counsel of its choice inconnection with the negotiation and execution of this Agreement.IN WITNESS WHEREOF, the parties have executed this Agreement as of the day and year first above written.EXECUTIVE:LUOKUNG TECHNOLOGY CORP./s/ Jie Yu/s/ Xuesong SongJie YuXuesong SongChief Executive Officer5EX12.1 13 f20f2017ex121_luokung.htm CERTIFICATIONExhibit 12.1Certification by the Chief Executive OfficerPursuant to Section 302 of the SarbanesOxley Act of 2002I, Xuesong Song, the Chief Executive Officer of Luokung Technology Corp. (the “Company”), certify that:1.I have reviewed this transition report on Form 20F of the Company;2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statementsmade, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financialcondition, results of operations and cash flows of the Company as of, and for, the periods presented in this report;4.The Company’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange ActRules 13a15(e) and 15d15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a15(f) and 15d15(f)) for the Company andhave:(a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure thatmaterial information relating to the Company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during theperiod in which this report is being prepared;(b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, toprovide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance withgenerally accepted accounting principles;(c)Evaluated the effectiveness of the Company’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of thedisclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and(d)Disclosed in this report any change in the Company’s internal control over financial reporting that occurred during the period covered by the transition reportthat has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting; and5.The Company’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Company’sauditors and the audit committee of the Company’s board of directors (or persons performing the equivalent functions):(a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely toadversely affect the Company’s ability to record, process, summarize and report financial information; and(b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the Company’s internal control over financialreporting.Date: October 12, 2018By:/s/ Xuesong SongXuesong SongChief Executive Officer(principal executive officer)EX12.2 14 f20f2017ex122_luokung.htm CERTIFICATIONExhibit 12.2Certification by the Chief Financial OfficerPursuant to Section 302 of the SarbanesOxley Act of 2002I, Jie Yu, the Chief Financial Officer of Luokung Technology Corp. (the “Company”), certify that:1.I have reviewed this transition report on Form 20F of the Company;2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statementsmade, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financialcondition, results of operations and cash flows of the Company as of, and for, the periods presented in this report;4.The Company’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange ActRules 13a15(e) and 15d15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a15(f) and 15d15(f)) for the Company andhave:(a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure thatmaterial information relating to the Company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during theperiod in which this report is being prepared;(b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, toprovide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance withgenerally accepted accounting principles;(c)Evaluated the effectiveness of the Company’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of thedisclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and(d)Disclosed in this report any change in the Company’s internal control over financial reporting that occurred during the period covered by the transition reportthat has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting; and5.The Company’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Company’sauditors and the audit committee of the Company’s board of directors (or persons performing the equivalent functions):(a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely toadversely affect the Company’s ability to record, process, summarize and report financial information; and(b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the Company’s internal control over financialreporting.Date: October 12, 2018By:/s/ Jie YuJie YuChief Financial Officer(principal financial officer and principal accounting officer)EX13.1 15 f20f2017ex131_luokung.htm CERTIFICATIONExhibit 13.1Certification by the Chief Executive OfficerPursuant to Section 906 of the SarbanesOxley Act of 2002In connection with the Transition report on Form 20F of Luokung Technology Corp. (the “Company”) for the year ended December 31, 2017 as filed withthe Securities and Exchange Commission on the date hereof (the “Report”), I, Xuesong Song, Chairman and Chief Executive Officer of the Company, certify,pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the SarbanesOxley Act of 2002, that to my knowledge:(1)The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and(2)The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.Date: October 12, 2018By:/s/ Xuesong SongXuesong SongChief Executive Officer(principal executive officer)EX13.2 16 f20f2017ex132_luokung.htm CERTIFICATIONExhibit 13.2Certification by the Chief Financial OfficerPursuant to Section 906 of the SarbanesOxley Act of 2002In connection with the Transition report on Form 20F of Luokung Technology Corp. (the “Company”) for the year ended December 31, 2017 as filed withthe Securities and Exchange Commission on the date hereof (the “Report”), I, Jie Yu, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. Section1350, as adopted pursuant to Section 906 of the SarbanesOxley Act of 2002, that to my knowledge:(1)The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and(2)The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.Date: October 12, 2018By:/s/ Jie YuJie YuChief Financial Officer(principal financial officer and principal accounting officer)地址：Address:.b)陈蔚力Chen Weili地址：Address:c)王平Wang Ping地址：Address:17秘密文件 Strictly Confidentiald)刘东来Liu Donglai地址：Address:丙方：北京中传视讯科技有限公司Party C: Beijing Mobile Vision Technology Co., Ltd.地址：北京市朝阳区光华路9号SOHO3QLAB32Address: LAB32, SOHO3Q, No 9, Guanghua Road, Chaoyang District, Beijing.收件人：宋雪松Attn.: Song Xuesong14.3任何一方可按本条规定随时给其他各方发出通知来改变其接收通知的地址。Any Party may at any time change its address for notices by a notice delivered to the other Parties in accordance with the terms hereof.15.分割性Severability如果本协议有任何一条或多条规定根据任何法律或法规在任何方面被裁定为无效、不合法或不可执行，本协议其余规定的有效性、合法性或可执行性不应因此在任何方面受到影响或损害。各方应通过诚意磋商，争取以法律许可以及各方期望的最大限度内有效的规定取代那些无效、不合法或不可执行的规定，而该等有效的规定所产生的经济效果应尽可能与那些无效、不合法或不能强制执行的规定所产生的经济效果相似。In the event that one or several of the provisions of this Contract are found to be invalid, illegal or unenforceable in any aspect in accordance with any laws orregulations, the validity, legality or enforceability of the remaining provisions of this Contract shall not be affected or compromised in any respect. The Partiesshall strive in good faith to replace such invalid, illegal or unenforceable provisions with effective provisions that accomplish to the greatest extent permittedby law and the intentions of the Parties, and the economic effect of such effective provisions shall be as close as possible to the economic effect of thoseinvalid, illegal or unenforceable provisions.18秘密文件 Strictly Confidential16.附件Attachments本协议所列附件，为本协议不可分割的组成部分。The attachments set forth herein shall be an integral part of this Agreement.17.生效Effectiveness17.1本协议的任何修改、补充或变更，均须采用书面形式，经各方签字或盖章并按规定办理政府登记（如需）后生效。Any amendments, changes and supplements to this Agreement shall be in writing and shall become effective upon completion of the governmentalfiling procedures (if applicable) after the affixation of the signatures or seals of the Parties.17.2本协议以中文和英文书就，一式六份，质权人、所有出质人和丙方各持一份，具有同等效力；中英文版本如有冲突，应以中文版为准。This Agreement is written in Chinese and English in six copies. Each Pledgors, Pledgee and Party C shall hold one copy respectively. Each copy of thisAgreement shall have equal validity. In case there is any conflict between the Chinese version and the English version, the Chinese version shall prevail.本页其余部分刻意留为空白The Remainder of this page is intentionally left blank19秘密文件 Strictly Confidential有鉴于此，各方已使得经其授权的代表于文首所述日期签署了本股权质押协议并即生效，以昭信守。IN WITNESS WHEREOF, the Parties have caused their authorized representatives to execute this Equity Interest Pledge Agreement as of the date first abovewritten.甲方：中传天下信息科技（深圳）有限公司（盖章）Party A: Zhongchuan Tianxia Information Technology (Shenzhen) Co., Ltd. (Seal)签字：By:/s/ Hong Ting姓名：洪婷Name: Hong Ting职务：总经理Title: General Manager秘密文件 Strictly Confidential有鉴于此，各方已使得经其授权的代表于文首所述日期签署了本股权质押协议并即生效，以昭信守。IN WITNESS WHEREOF, the Parties have caused their authorized representatives to execute this Equity Interest Pledge Agreement as of the date first abovewritten.乙方：Party B:宋雪松Song Xuesong签署：By:/s/ Song Xuesong秘密文件 Strictly Confidential有鉴于此，各方已使得经其授权的代表于文首所述日期签署了本股权质押协议并即生效，以昭信守。IN WITNESS WHEREOF, the Parties have caused their authorized representatives to execute this Equity Interest Pledge Agreement as of the date first abovewritten.乙方：Party B:陈蔚力Chen Weili签字：By:/s/ Chen Weili秘密文件 Strictly Confidential有鉴于此，各方已使得经其授权的代表于文首所述日期签署了本股权质押协议并即生效，以昭信守。IN WITNESS WHEREOF, the Parties have caused their authorized representatives to execute this Equity Interest Pledge Agreement as of the date first abovewritten.乙方：Party B:王平Wang Ping签字：By:/s/ Wang Ping秘密文件 Strictly Confidential有鉴于此，各方已使得经其授权的代表于文首所述日期签署了本股权质押协议并即生效，以昭信守。IN WITNESS WHEREOF, the Parties have caused their authorized representatives to execute this Equity Interest Pledge Agreement as of the date first abovewritten.乙方：Party B:刘东来Liu Donglai签字：By:/s/ Liu Donglai秘密文件 Strictly Confidential有鉴于此，各方已使得经其授权的代表于文首所述日期签署了本股权质押协议并即生效，以昭信守。IN WITNESS WHEREOF, the Parties have caused their authorized representatives to execute this Equity Interest Pledge Agreement as of the date first abovewritten.丙方：北京中传视讯科技有限公司（盖章）Party B: Beijing Mobile Vision Technology Co., Ltd. (Seal)签字：By:/s/ Song Xuesong姓名：宋雪松Name: Song Xuesong职务：董事长Title: Chairman of the Board秘密文件 Strictly Confidential附件：Attachments:1.北京中传视讯科技有限公司股东名册；Shareholders' Register of Beijing Mobile Vision Technology Co., Ltd.;2.北京中传视讯科技有限公司的出资证明书；The Capital Contribution Certificate of Beijing Mobile Vision Technology Co., Ltd.;3.独家业务合作协议。Exclusive Business Cooperation Agreement.秘密文件 Strictly ConfidentialEX4.20 6 f20f2017ex420_luokung.htm POWER OF ATTORNEY BY WEILI CHEN, DATED AUGUST 31, 2015Exhibit 4.20授权委托书Power of Attorney本人陈蔚力，持有中华人民共和国身份证（号码：*************** 516），通讯地址为广东省，系拥有北京中传视讯科技有限公司（“中传视讯”）14.0848%股权（“相关股权”）的股东，就相关股权，特此不可撤销地授权中传天下信息科技（深圳）有限公司（“深圳中传天下”）在本授权委托书的有效期内行使如下权利：The undersigned, Chen Weili, a person with the PRC identification card number of ***************516, with address at: Guangdong, and a holder of14.0848% of the entire registered capital ("Shares") in Beijing Mobile Vision Technology Co., Ltd. ("Mobile Vision"), hereby irrevocably authorize ZhongchuanTianxia Information Technology (Shenzhen) Co., Ltd. ("WFOE") to exercise the following rights relating to Shares during the term of this Power of Attorney:授权深圳中传天下作为本人唯一的排他的代理人就有关相关股权的事宜全权代表本人行使包括但不限于如下的权利：1）参加中传视讯的股东会；2）行使按照法律和中传视讯章程规定本人所享有的全部股东权利和股东表决权，包括但不限于出售或转让或质押或处置相关股权的全部或任何一部分；以及3）作为本人的授权代表指定和任命中传视讯的法定代表人、董事和/或执行董事、监事、经理以及其他高级管理人员等。但中传视讯利用该等授权做出违反中华人民共和国法律的决定无效。WFOE is hereby authorized to act on behalf of myself as my exclusive agent and attorney with respect to all matters concerning My Shareholding, includingwithout limitation: 1) attending shareholders' meetings of Mobile Vision; 2) exercising all the shareholder's rights and shareholder's voting rights I am entitled tounder the laws of China and Articles of Association of Mobile Vision, including but not limited to the sale or transfer or pledge or disposition of My Shareholding inpart or in whole; and 3) designating and appointing on behalf of myself the legal representative, director and/or executive director, supervisor, manager and othersenior management members of Mobile Vision. However, the decision made by Mobile Vision taking advantage of the power of attorney which is against the PRClaws shall be null and void.1深圳中传天下将有权在授权范围内代表本人签署独家购买权协议（本人应要求作为协议方）中约定的转让协议，如期履行本人作为协议一方的与本授权委托书同日签署的股权质押协议和独家购买权协议，该权利的行使将不对本授权形成任何限制。Without limiting the generality of the powers granted hereunder, WFOE shall have the power and authority under this Power of Attorney to execute theTransfer Contracts stipulated in Exclusive Option Agreement, to which I am required to be a party, on behalf of myself, and to effect the terms of the Share PledgeAgreement and Exclusive Option Agreement, both dated the date hereof, to which I am a party.深圳中传天下就相关股权的一切行为均视为本人的行为，签署的一切文件均视为本人签署，本人会予以承认。All the actions associated with Shares conducted by WFOE shall be deemed as my own actions, and all the documents related to Shares executed by WFOEshall be deemed to be executed by me. I hereby acknowledge and ratify those actions and/or documents by the WFOE.深圳中传天下有转委托权，可以就上述事项的办理自行再委托其他人或单位而不必事先通知本人或获得本人的同意。WFOE is entitled to reauthorize or assign its rights related to the aforesaid matters to any other person or entity at its own discretion and without giving priornotice to me or obtaining my consent.在本人为中传视讯的股东期间，本授权委托书不可撤销并持续有效，自授权委托书签署之日起算。This Power of Attorney is coupled with an interest and shall be irrevocable and continuously valid from the date of execution of this Power of Attorney, solong as I am a shareholder of Mobile Vision.本授权委托书期间，本人特此放弃已经通过本授权委托书授权给深圳中传天下的与相关股权有关的所有权利，不再自行行使该等权利。During the term of this Power of Attorney, I hereby waive all the rights associated with Shares, which have been authorized to WFOE through this Power ofAttorney, and shall not exercise such rights by myself.本授权委托书以中文和英文书就，中英文版本如有冲突，应以中文版为准。This Power of Attorney is written in Chinese and English; in case there is any conflict between the Chinese version and the English version, the Chineseversion shall prevail.陈蔚力Chen Weili签署：By:日期：年月日Date:2EX4.21 7 f20f2017ex421_luokung.htm POWER OF ATTORNEY BY PING WANG, DATED AUGUST 31, 2015Exhibit 4.21授权委托书Power of Attorney本人王平，持有中华人民共和国身份证（号码：***************01x），通讯地址为广东省，系拥有北京中传视讯科技有限公司（“中传视讯”）19.9872%股权（“相关股权”）的股东，就相关股权，特此不可撤销地授权中传天下信息科技（深圳）有限公司（“深圳中传天下”）在本授权委托书的有效期内行使如下权利：The undersigned, Wang Ping, a person with the PRC identification card number of ***************01x, with address at Guangdong, and a holder of19.9872% of the entire registered capital (“Shares”) in Beijing Mobile Vision Technology Co., Ltd. (“Mobile Vision”), hereby irrevocably authorize ZhongchuanTianxia Information Technology (Shenzhen) Co., Ltd. (“WFOE”) to exercise the following rights relating to Shares during the term of this Power of Attorney:授权深圳中传天下作为本人唯一的排他的代理人就有关相关股权的事宜全权代表本人行使包括但不限于如下的权利：1）参加中传视讯的股东会；2）行使按照法律和中传视讯章程规定本人所享有的全部股东权利和股东表决权，包括但不限于出售或转让或质押或处置相关股权的全部或任何一部分；以及3）作为本人的授权代表指定和任命中传视讯的法定代表人、董事和/或执行董事、监事、经理以及其他高级管理人员等。但中传视讯利用该等授权做出违反中华人民共和国法律的决定无效。WFOE is hereby authorized to act on behalf of myself as my exclusive agent and attorney with respect to all matters concerning My Shareholding, includingwithout limitation: 1) attending shareholders’ meetings of Mobile Vision; 2) exercising all the shareholder’s rights and shareholder’s voting rights I am entitled tounder the laws of China and Articles of Association of Mobile Vision, including but not limited to the sale or transfer or pledge or disposition of My Shareholding inpart or in whole; and 3) designating and appointing on behalf of myself the legal representative, director and/or executive director, supervisor, manager and othersenior management members of Mobile Vision. However, the decision made by Mobile Vision taking advantage of the power of attorney which is against the PRClaws shall be null and void.1深圳中传天下将有权在授权范围内代表本人签署独家购买权协议（本人应要求作为协议方）中约定的转让协议，如期履行本人作为协议一方的与本授权委托书同日签署的股权质押协议和独家购买权协议，该权利的行使将不对本授权形成任何限制。Without limiting the generality of the powers granted hereunder, WFOE shall have the power and authority under this Power of Attorney to execute theTransfer Contracts stipulated in Exclusive Option Agreement, to which I am required to be a party, on behalf of myself, and to effect the terms of the Share PledgeAgreement and Exclusive Option Agreement, both dated the date hereof, to which I am a party.深圳中传天下就相关股权的一切行为均视为本人的行为，签署的一切文件均视为本人签署，本人会予以承认。All the actions associated with Shares conducted by WFOE shall be deemed as my own actions, and all the documents related to Shares executed by WFOEshall be deemed to be executed by me. I hereby acknowledge and ratify those actions and/or documents by the WFOE.深圳中传天下有转委托权，可以就上述事项的办理自行再委托其他人或单位而不必事先通知本人或获得本人的同意。WFOE is entitled to reauthorize or assign its rights related to the aforesaid matters to any other person or entity at its own discretion and without giving priornotice to me or obtaining my consent.在本人为中传视讯的股东期间，本授权委托书不可撤销并持续有效，自授权委托书签署之日起算。This Power of Attorney is coupled with an interest and shall be irrevocable and continuously valid from the date of execution of this Power of Attorney, solong as I am a shareholder of Mobile Vision.本授权委托书期间，本人特此放弃已经通过本授权委托书授权给深圳中传天下的与相关股权有关的所有权利，不再自行行使该等权利。During the term of this Power of Attorney, I hereby waive all the rights associated with Shares, which have been authorized to WFOE through this Power ofAttorney, and shall not exercise such rights by myself.本授权委托书以中文和英文书就，中英文版本如有冲突，应以中文版为准。This Power of Attorney is written in Chinese and English; in case there is any conflict between the Chinese version and the English version, the Chineseversion shall prevail.王平Wang Ping签署：By:日期：年月日Date:2EX4.22 8 f20f2017ex422_luokung.htm POWER OF ATTORNEY BY DONGLAI LIU, DATED AUGUST 31, 2015Exhibit 4.22授权委托书Power of Attorney本人刘东来，持有中华人民共和国身份证（号码：***************912），通讯地址为: ，系拥有北京中传视讯科技有限公司（“中传视讯”）4.1035%股权（“相关股权”）的股东，就相关股权，特此不可撤销地授权中传天下信息科技（深圳）有限公司（“深圳中传天下”）在本授权委托书的有效期内行使如下权利：The undersigned, Liu Donglai, a person with the PRC identification card number of ***************912, with address at: , and a holder of 4.1035% of theentire registered capital (“Shares”) in Beijing Mobile Vision Technology Co., Ltd. (“Mobile Vision”), hereby irrevocably authorize Zhongchuan Tianxia InformationTechnology (Shenzhen) Co., Ltd. (“WFOE”) to exercise the following rights relating to Shares during the term of this Power of Attorney:授权深圳中传天下作为本人唯一的排他的代理人就有关相关股权的事宜全权代表本人行使包括但不限于如下的权利：1）参加中传视讯的股东会；2）行使按照法律和中传视讯章程规定本人所享有的全部股东权利和股东表决权，包括但不限于出售或转让或质押或处置相关股权的全部或任何一部分；以及3）作为本人的授权代表指定和任命中传视讯的法定代表人、董事和/或执行董事、监事、经理以及其他高级管理人员等。但中传视讯利用该等授权做出违反中华人民共和国法律的决定无效。WFOE is hereby authorized to act on behalf of myself as my exclusive agent and attorney with respect to all matters concerning My Shareholding, includingwithout limitation: 1) attending shareholders’ meetings of Mobile Vision; 2) exercising all the shareholder’s rights and shareholder’s voting rights I am entitled tounder the laws of China and Articles of Association of Mobile Vision, including but not limited to the sale or transfer or pledge or disposition of My Shareholding inpart or in whole; and 3) designating and appointing on behalf of myself the legal representative, director and/or executive director, supervisor, manager and othersenior management members of Mobile Vision. However, the decision made by Mobile Vision taking advantage of the power of attorney which is against the PRClaws shall be null and void.1深圳中传天下将有权在授权范围内代表本人签署独家购买权协议（本人应要求作为协议方）中约定的转让协议，如期履行本人作为协议一方的与本授权委托书同日签署的股权质押协议和独家购买权协议，该权利的行使将不对本授权形成任何限制。Without limiting the generality of the powers granted hereunder, WFOE shall have the power and authority under this Power of Attorney to execute theTransfer Contracts stipulated in Exclusive Option Agreement, to which I am required to be a party, on behalf of myself, and to effect the terms of the Share PledgeAgreement and Exclusive Option Agreement, both dated the date hereof, to which I am a party.深圳中传天下就相关股权的一切行为均视为本人的行为，签署的一切文件均视为本人签署，本人会予以承认。All the actions associated with Shares conducted by WFOE shall be deemed as my own actions, and all the documents related to Shares executed by WFOEshall be deemed to be executed by me. I hereby acknowledge and ratify those actions and/or documents by the WFOE.深圳中传天下有转委托权，可以就上述事项的办理自行再委托其他人或单位而不必事先通知本人或获得本人的同意。WFOE is entitled to reauthorize or assign its rights related to the aforesaid matters to any other person or entity at its own discretion and without giving priornotice to me or obtaining my consent.在本人为中传视讯的股东期间，本授权委托书不可撤销并持续有效，自授权委托书签署之日起算。This Power of Attorney is coupled with an interest and shall be irrevocable and continuously valid from the date of execution of this Power of Attorney, solong as I am a shareholder of Mobile Vision.本授权委托书期间，本人特此放弃已经通过本授权委托书授权给深圳中传天下的与相关股权有关的所有权利，不再自行行使该等权利。During the term of this Power of Attorney, I hereby waive all the rights associated with Shares, which have been authorized to WFOE through this Power ofAttorney, and shall not exercise such rights by myself.本授权委托书以中文和英文书就，中英文版本如有冲突，应以中文版为准。This Power of Attorney is written in Chinese and English; in case there is any conflict between the Chinese version and the English version, the Chineseversion shall prevail.刘东来Liu Donglai签署：By:日期：年月日Date:2EX4.23 9 f20f2017ex423_luokung.htm POWER OF ATTORNEY BY XUESONG SONG, DATED AUGUST 31, 2015Exhibit 4.23授权委托书Power of Attorney本人宋雪松，持有中华人民共和国身份证（号码：***************417），通讯地址为，系拥有北京中传视讯科技有限公司（“中传视讯”）61.8245%股权（“相关股权”）的股东，就相关股权，特此不可撤销地授权中传天下信息科技（深圳）有限公司（“深圳中传天下”）在本授权委托书的有效期内行使如下权利：The undersigned, Song Xuesong, a person with the PRC identification card number of ***************417, with address at , and a holder of 61.8245% ofthe entire registered capital (“Shares”) in Beijing Mobile Vision Technology Co., Ltd. (“Mobile Vision”), hereby irrevocably authorize Zhongchuan TianxiaInformation Technology (Shenzhen) Co., Ltd. (“WFOE”) to exercise the following rights relating to Shares during the term of this Power of Attorney:授权深圳中传天下作为本人唯一的排他的代理人就有关相关股权的事宜全权代表本人行使包括但不限于如下的权利：1）参加中传视讯的股东会；2）行使按照法律和中传视讯章程规定本人所享有的全部股东权利和股东表决权，包括但不限于出售或转让或质押或处置相关股权的全部或任何一部分；以及3）作为本人的授权代表指定和任命中传视讯的法定代表人、董事和/或执行董事、监事、经理以及其他高级管理人员等。但中传视讯利用该等授权做出违反中华人民共和国法律的决定无效。WFOE is hereby authorized to act on behalf of myself as my exclusive agent and attorney with respect to all matters concerning My Shareholding, includingwithout limitation: 1) attending shareholders’ meetings of Mobile Vision; 2) exercising all the shareholder’s rights and shareholder’s voting rights I am entitled tounder the laws of China and Articles of Association of Mobile Vision, including but not limited to the sale or transfer or pledge or disposition of My Shareholding inpart or in whole; and 3) designating and appointing on behalf of myself the legal representative, director and/or executive director, supervisor, manager and othersenior management members of Mobile Vision. However, the decision made by Mobile Vision taking advantage of the power of attorney which is against the PRClaws shall be null and void.1深圳中传天下将有权在授权范围内代表本人签署独家购买权协议（本人应要求作为协议方）中约定的转让协议，如期履行本人作为协议一方的与本授权委托书同日签署的股权质押协议和独家购买权协议，该权利的行使将不对本授权形成任何限制。Without limiting the generality of the powers granted hereunder, WFOE shall have the power and authority under this Power of Attorney to execute theTransfer Contracts stipulated in Exclusive Option Agreement, to which I am required to be a party, on behalf of myself, and to effect the terms of the Share PledgeAgreement and Exclusive Option Agreement, both dated the date hereof, to which I am a party.深圳中传天下就相关股权的一切行为均视为本人的行为，签署的一切文件均视为本人签署，本人会予以承认。All the actions associated with Shares conducted by WFOE shall be deemed as my own actions, and all the documents related to Shares executed by WFOEshall be deemed to be executed by me. I hereby acknowledge and ratify those actions and/or documents by the WFOE.深圳中传天下有转委托权，可以就上述事项的办理自行再委托其他人或单位而不必事先通知本人或获得本人的同意。WFOE is entitled to reauthorize or assign its rights related to the aforesaid matters to any other person or entity at its own discretion and without giving priornotice to me or obtaining my consent.在本人为中传视讯的股东期间，本授权委托书不可撤销并持续有效，自授权委托书签署之日起算。This Power of Attorney is coupled with an interest and shall be irrevocable and continuously valid from the date of execution of this Power of Attorney, solong as I am a shareholder of Mobile Vision.本授权委托书期间，本人特此放弃已经通过本授权委托书授权给深圳中传天下的与相关股权有关的所有权利，不再自行行使该等权利。During the term of this Power of Attorney, I hereby waive all the rights associated with Shares, which have been authorized to WFOE through this Power ofAttorney, and shall not exercise such rights by myself.本授权委托书以中文和英文书就，中英文版本如有冲突，应以中文版为准。This Power of Attorney is written in Chinese and English; in case there is any conflict between the Chinese version and the English version, the Chineseversion shall prevail.宋雪松Song Xuesong签署：By:日期：年月日Date:2EX8.1 10 f20f2017ex81_luokung.htm LIST OF SUBSIDIARIES AND CONSOLIDATED VARIABLE INTEREST ENTITIESExhibit 8.1List of Subsidiaries of the CompanyName of EntityJurisdiction of Incorporation/OrganizationLK Technology Ltd.British Virgin IslandsTopsky Infotech Holdings Pte Ltd.SingaporeSuperengine Holdings LimitedBritish Virgin IslandsMMB LimitedHong KongMobile Media (China Limited)Hong KongZhong Chuan Tian Xia Information and Technology (Beijing) LimitedBeijing, PRCZhong Chuan Xia Information and Technology (Shenzhen) LimitedShenzhen, PRCBeijing Zhong Chuan Shi Xun Technology Limited (VIE Entity)Beijing, PRCJiangsu Zhong Chuan Rui You Information and Technology Limited (VIE Entity)Jiangsu, PRCHuoerguosi Luokuang Information and Technology Limited (VIE Entity)Huoerguosi, PRCShenzhen Jiu Zhou Shi Dai Digital Technology LimitedShenzhen, PRCEX10.1 11 f20f2017ex101_luokung.htm EMPLOYMENT AGREEMENT, DATED AUGUST 19, 2018, BETWEEN LUOKUNG TECHNOLOGY CORP. AND XUESONGSONGExhibit 10.1EMPLOYMENT AGREEMENTThis EMPLOYMENT AGREEMENT (the “Agreement”) is made and entered into as of this 19 day of August, 2018 (the “Effective Date”), by and between LuokungTechnology Corp., a British Virgin Islands corporation (the “Company”) and Xuesong Song (the “Executive”), a Chinese citizen.WITNESSETH:WHEREAS, the parties desire to enter into this Agreement setting forth the terms and conditions of the employment relationship between the Executiveand the Company.NOW, THEREFORE, in consideration of the foregoing premises and the mutual covenants and agreements contained herein, the parties hereto agree asfollows:1. EMPLOYMENT.1.1 Agreement to Employ. The Company hereby agrees to employ Executive, and Executive hereby agrees to serve, subject to the provisions of thisAgreement, as an officer and employee of the Company.1.2 Duties and Schedule. Executive shall serve as the Company’s Chief Executive Officer (“CEO”). The responsibilities of the Executive shall be subject tothe bylaws of the Company and determined by the Board of Directors of the Company (the “Board”). The Executive shall report directly to the Board and shall havesuch responsibilities as designated by the Board of the Company to the extent that such responsibilities are not inconsistent with all applicable laws, regulationsand rules. Executive shall devote his best efforts and all of his business time to his position with the Company during the Term.2. TERM OF EMPLOYMENT. Unless Executive’s employment shall sooner terminate pursuant to Section 4, the Company shall employ Executive for a fouryear term commencing on the Effective Date (the “Term”), which Term shall be renewable upon mutual agreement of the Company and the Executive, as approved bythe Board.3. COMPENSATION.3.1 Salary. Executive’s salary during the Term shall be $Nil.3.2 Bonus. At the sole discretion of the Board, or any committee duly designated by the Board and authorized to act thereto, the Executive shall be eligiblefor an annual cash bonus.3.3 Vacation. Executive shall be entitled to 8 days of paid vacation per year. In the event that Executive remains employed by the Company for 3 years ormore, Executive shall be entitled to 12 days of paid vacation.3.4 Business Expenses. Executive shall be reimbursed by the Company for all ordinary and necessary expenses incurred by Executive; provided that theyare incurred and approved in writing in accordance with the Company’s expense policy.3.5 Benefits. During the Term, Executive shall be allowed to participate, on the same basis generally as other employees of the Company, in all generalemployee benefit plans and programs, including improvements or modifications of the same, which may exist as of the Effective Date or thereafter and which aremade available by the Company to all or substantially all of its employees. Such benefits, plans, and programs may include, without limitation, any health, and dentalinsurance or 401K programs, if and when instituted. Any benefit plan currently existing or instituted by the Company after the Effective Date may be altered, changeor discontinued by the Company at its sole discretion and at any time without obligation of any nature to Executive. Except as specifically provided herein, nothingin this Agreement is to be construed or interpreted to increase or alter in any way the rights, participation, coverage, or benefits under such benefit plans orprograms to other than those provided to other employees pursuant to the terms and conditions of such benefit plans and programs. 14. TERMINATION.4.1 Death. This Agreement shall terminate immediately upon the death of Executive, and Executive’s estate or Executive’s legal representative, as the casemay be, shall be entitled to Executive’s accrued and unpaid Salary as of the date of Executive’s death, plus all other compensation and benefits that were vestedthrough the date of Executive’s death.4.2 Disability. In the event of Executive’s Disability, this Agreement shall terminate and Executive shall be entitled to (a) accrued and unpaid Salary andvacation through the first date that a Disability is determined; and (b) all other compensation and benefits that were vested through the first date that a Disabilityhas been determined. “Disability” means the good faith determination of the Board that Executive has become so physically or mentally incapacitated or disabled asto be unable to satisfactorily perform his duties hereunder for a period of ninety (90) consecutive calendar days or for one hundred twenty (120) days in any threehundred sixty (360) day period, such determination based upon a certificate as to such physical or mental disability issued by a licensed physician and/orpsychiatrist (as the case may be) mutually agreed upon by Executive and the Company.4.3 Termination by Company for Cause. The Company may terminate the Executive for Cause and such termination shall take effect upon the receipt byExecutive of the Notice of Termination. Upon the effective date of the termination for Cause, Executive shall be solely entitled to accrued and unpaid Salary throughsuch effective date. “Cause” means: (i) engaging in any act, omission or misconduct that is injurious to the Company or an affiliate; (ii) gross negligence or willfulmisconduct in connection with the performance of duties; (iii) conviction of a criminal offense (other than minor traffic offenses); (iv) fraud, embezzlement ormisappropriation of funds or property of the Company or an affiliate; (v) material breach of any term of any employment or other services, confidentiality, intellectualproperty or noncompetition agreements, if any, between the Executive and the Company or an affiliate; (vi) the entry of an order duly issued by any regulatoryagency (including federal, state and local regulatory agencies and selfregulatory bodies) having jurisdiction over the Company or an affiliate requiring the removalof the Executive from any office held with the Company or prohibiting the Executive from participating in the business or affairs of the Company or any affiliate; or(vii) the revocation or threatened revocation of any of the Company’s or an affiliate’s government licenses, permits or approvals, which is primarily due to theExecutive’s action or inaction and such revocation or threatened revocation would be alleviated or mitigated in any material respect by the termination of theExecutive’s employment or services with the Company or an affiliate. 4.4 Voluntary Termination by Executive. The Executive may voluntarily terminate his employment for any reason and such termination shall take effect 30days after the receipt by Company of the Notice of Termination. Upon the effective date of such termination, Executive shall be entitled to (a) accrued and unpaidSalary and vacation through such termination date; and (b) all other compensation and benefits that were vested through such termination date. In the eventExecutive is terminated without notice, it shall be deemed a termination by the Company for Cause.4.5 Notice of Termination. Any termination of the employment by the Company or the Executive shall be communicated by a notice in accordance withSection 8.4 of this Agreement (the “Notice of Termination”). Such notice shall (a) indicate the specific termination provision in this Agreement relied upon and (b) ifthe termination is for Cause, the date on which the Executive’s employment is to be terminated.4.6 Severance. The Executive shall not be entitled to severance payments upon any termination provided in Section 4 herein.5. EMPLOYEE’S REPRESENTATION. The Executive represents and warrants to the Company that: (a) he is subject to no contractual, fiduciary or otherobligation which may affect the performance of his duties under this Agreement; (b) he has terminated, in accordance with their terms, any contractual obligationwhich may affect his performance under this Agreement; and (c) his employment with the Company will not require him to use or disclose proprietary or confidentialinformation of any other person or entity.26. CONFIDENTIAL INFORMATION Except as permitted or directed by the Board of Directors of the Company in writing, during the time the Executive isemployed by the Company or at any time thereafter, the Executive shall not use for his personal purposes nor divulge, furnish, or make accessible to anyone or usein any way (other than in the ordinary course of the business of the Company) any confidential or secret information or knowledge of the Company, whetherdeveloped by himself or by others. Such confidential and/or secret information encompassed by this Section 6 includes, but is not limited to, the Company’scustomer and supplier lists, business plans, software, systems, and financial, marketing, and personnel information. The Executive agrees to refrain from any acts oromissions that would reduce the value of any confidential or secret knowledge or information to the Company, both during his employment hereunder and at anytime after the termination of his employment. The Executive’s obligations of confidentiality under this Section 6 shall not apply to any knowledge or information thatis now published publicly or that subsequently becomes generally publicly known, other than as a direct or indirect result of a breach of this Agreement by theExecutive.7. NONCOMPETITION: NONSOLICITATION; INVENTIONS.7.1 NonCompetition. During the employment of the Executive under this Agreement and for a period of six (6) months after termination of suchemployment, the Executive shall not at any time compete on his own behalf, or on behalf of any other person or entity, with the Company or any of its affiliateswithin all territories in which the Company does business with respect to the business of the Company or any of its affiliates as such business shall be conductedon the date hereof or during the employment of the Executive under this Agreement. The ownership by the Executive of not more than 5% of a corporation,partnership or other enterprise shall not constitute a violation hereof.7.2 NonSolicitation. During the employment of the Executive under this Agreement and thereafter Executive shall not at any time (i) solicit or induce, onhis own behalf or on behalf of any other person or entity, any employee of the Company or any of its affiliates to leave the employ of the Company or any of itsaffiliates; or (ii) solicit or induce, on his own behalf or on behalf of any other person or entity, any customer or Prospective Customer of the Company or any of theirrespective affiliates to reduce its business with the Company or any of its affiliates. For the purposes of this Agreement, “Prospective Customer” shall mean anyindividual, corporation, trust or other business entity which has either (a) entered into a nondisclosure agreement with the Company or any Company subsidiary oraffiliate or (b) has within the preceding 12 months received a currently pending and not rejected written proposal in reasonable detail from the Company or any ofthe Company’s subsidiary or affiliate.7.3 Inventions and Patents. The Company shall be entitled to the sole benefit and exclusive ownership of any inventions or improvements in products,processes, or other things that may be made or discovered by Executive while he is in the service of the Company, and all patents for the same. During the Term,Executive shall do all acts necessary or required by the Company to give effect to this section and, following the Term, Executive shall do all acts reasonablynecessary or required by the Company to give effect to this section. In all cases, the Company shall pay all costs and fees associated with such acts by Executive.7.4 Return of Property. The Executive agrees that all property in the Executive’s possession that he obtains or is assigned in the course of his employmentwith the Company, including, without limitation, all documents, reports, manuals, memoranda, customer lists, credit cards, keys, access cards, and all other propertyrelating in any way to the business of the Company, is the exclusive property of the Company, even if the Executive authored, created, or assisted in authoring orcreating such property. The Executive shall return to the Company all such property immediately upon termination of employment or at such earlier time as theCompany may request.7.5Court Ordered Revisions.If any portion of this Section 7 is found by a court of competent jurisdiction to be invalid or unenforceable, but would be validand enforceable if modified, this Section 7 shall apply with such modifications necessary to make this Section 7 valid and enforceable. Any portion of this Section 7not required to be so modified shall remain in full force and effect and not be affected thereby.7.6 Specific Performance. The Executive acknowledges that the remedy at law for any breach of any of the provisions of Section 7 will be inadequate, andthat the Company shall be entitled, in addition to any remedy at law or in equity, to preliminary and permanent injunctive relief and specific performance.38. MISCELLANEOUS.8.1 Indemnification. The Company and each of its subsidiaries shall, to the maximum extent provided under applicable law, indemnify and hold Executiveharmless from and against any expenses, including reasonable attorney’s fees, judgments, fines, settlements and other legally permissible amounts (“Losses”),incurred in connection with any proceeding arising out of, or related to, Executive’s employment by the Company, other than any such Losses incurred as a result ofExecutive’s negligence or willful misconduct. The Company shall, or shall cause a subsidiary thereof to, advance to Executive any expenses, including attorney’sfees and costs of settlement, incurred in defending any such proceeding to the maximum extent permitted by applicable law. Such costs and expenses incurred byExecutive in defense of any such proceeding shall be paid by the Company or applicable subsidiary in advance of the final disposition of such proceeding promptlyupon receipt by the Company of (a) written request for payment; (b) appropriate documentation evidencing the incurrence, amount and nature of the costs andexpenses for which payment is being sought; and (c) an undertaking adequate under applicable law made by or on behalf of Executive to repay the amounts soadvanced if it shall ultimately be determined pursuant to any nonappealable judgment or settlement that Executive is not entitled to be indemnified by the Companyor any subsidiary thereof. The Company will provide Executive with coverage under all directors and officers liability insurance policies that it has in effect duringthe Term, with no deductible to Executive. 8.2 Applicable Law. Except as may be otherwise provided herein, this Agreement shall be governed by and construed in accordance with the laws ofChina, applied without reference to principles of conflict of laws. Any dispute arising from or in connection with this Agreement shall be submitted to ShanghaiInternational Arbitration Center (the “Center”) for arbitration under the then effective rules of the Center. The arbitration award shall be the sole, binding, exclusiveand final remedy for resolving any dispute between the parties.8.3 Amendments. This Agreement may not be amended or modified otherwise than by a written agreement executed by the parties hereto or their respectivesuccessors or legal representatives.8.4 Notices. All notices and other communications hereunder shall be in writing and shall be given by handdelivery to the other party, by an internationalmail courier, or by registered or certified mail, return receipt requested, postage prepaid, addressed as follows:If to the Executive:Xuesong Song________________________________________________If to the Company:______________________________________Or to such other address as either party shall have furnished to the other in writing in accordance herewith. Notices and communications shall be effective whendelivered to the addressee.8.5 Withholding. The Company may withhold from any amounts payable under the Agreement, such federal, state and local income, unemployment, socialsecurity and similar employment related taxes and similar employment related withholdings as shall be required to be withheld pursuant to any applicable law orregulation.8.6 Severability. The invalidity or unenforceability of any provision of this Agreement shall not affect the validity or enforceability of any other provision ofthis Agreement and any such provision which is not valid or enforceable in whole shall be enforced to the maximum extent permitted by law.8.7 Captions. The captions of this Agreement are not part of the provisions and shall have no force or effect.48.8 Entire Agreement. This Agreement contains the entire agreement among the parties concerning the subject matter hereof and supersedes all prioragreements, understandings, discussions, negotiations and undertakings, whether written or oral, between the parties with respect thereto.8.9 Survival. The respective rights and obligations of the parties hereunder shall survive any termination of this Agreement or the Executive’s employmenthereunder to the extent necessary to the intended preservation of such rights and obligations.8.10 Waiver. Either Party's failure to enforce any provision or provisions of this Agreement shall not in any way be construed as a waiver of any suchprovision or provisions, or prevent that party thereafter from enforcing each and every other provision of this Agreement.8.11 Successors. This Agreement is personal to Executive and, without the prior express written consent of the Company, shall not be assignable byExecutive. This Agreement shall inure to the benefit of and be enforceable by Executive’s estate, heirs, beneficiaries, and/or legal representatives. This Agreementshall inure to the benefit of and be binding upon the Company and its successors and assigns.8.12 Joint Efforts/Counterparts. Preparation of this Agreement shall be deemed to be the joint effort of the parties hereto and shall not be construed moreseverely against any party. This Agreement may be signed in two or more counterparts, each of which shall be deemed an original and all of which together shallconstitute one and the same instrument.8.13 Representation by Counsel. Each Party hereby represents that it has had the opportunity to be represented by legal counsel of its choice inconnection with the negotiation and execution of this Agreement.IN WITNESS WHEREOF, the parties have executed this Agreement as of the day and year first above written.EXECUTIVE:LUOKUNG TECHNOLOGY CORP./s/ Xuesong Song/s/ Jie YuXuesong SongJie YuChief Financial Officer5EX10.2 12 f20f2017ex102_luokung.htm EMPLOYMENT AGREEMENT, DATED AUGUST 19, 2018, BY AND BETWEEN LUOKUNG TECHNOLOGY CORP. AND JIEYUExhibit 10.2EMPLOYMENT AGREEMENTThis EMPLOYMENT AGREEMENT (the “Agreement”) is made and entered into as of this 19 day of August, 2018 (the “Effective Date”), by and between LuokungTechnology Corp., a British Virgin Islands corporation (the “Company”) and Jie (Jay) Yu (the “Executive”), a Chinese citizen.WITNESSETH:WHEREAS, the parties desire to enter into this Agreement setting forth the terms and conditions of the employment relationship between the Executiveand the Company.NOW, THEREFORE, in consideration of the foregoing premises and the mutual covenants and agreements contained herein, the parties hereto agree asfollows:1. EMPLOYMENT.1.1 Agreement to Employ. The Company hereby agrees to employ Executive, and Executive hereby agrees to serve, subject to the provisions of thisAgreement, as an officer and employee of the Company.1.2 Duties and Schedule. Executive shall serve as the Company’s Chief Financial Officer, and be the Principal Financial Officer and Principal AccountingOfficer of the Company and responsible for all financial matters and management of the Company. The Executive shall report directly to the Company’s ChiefExecutive Officer and Board of Directors (the “Board”) and shall have such responsibilities as designated by the Chief Executive Officer or Board to the extent thatsuch responsibilities are not inconsistent with all applicable laws, regulations and rules. Executive shall devote his best efforts and all of his business time to hisposition with the Company during the Term.2. TERM OF EMPLOYMENT. Unless Executive’s employment shall sooner terminate pursuant to Section 4, the Company shall employ Executive for a fouryear term commencing on the Effective Date (the “Term”), which Term shall be renewable upon mutual agreement of the Company and the Executive, as approved bythe Board.3. COMPENSATION.3.1 Salary. Executive’s salary during the Term shall be RMB700,000 per year (the “Salary”), payable monthly.3.2 Bonus. At the sole discretion of the Board, or any committee duly designated by the Board and authorized to act thereto, the Executive shall be eligiblefor an annual cash bonus.3.3 Vacation. Executive shall be entitled to 8 days of paid vacation per year. In the event that Executive remains employed by the Company for 3 years ormore, Executive shall be entitled to 12 days of paid vacation.3.4 Business Expenses. Executive shall be reimbursed by the Company for all ordinary and necessary expenses incurred by Executive; provided that theyare incurred and approved in writing in accordance with the Company’s expense policy.3.5 Benefits. During the Term, Executive shall be allowed to participate, on the same basis generally as other employees of the Company, in all generalemployee benefit plans and programs, including improvements or modifications of the same, which may exist as of the Effective Date or thereafter and which aremade available by the Company to all or substantially all of its employees. Such benefits, plans, and programs may include, without limitation, any health, and dentalinsurance or 401K programs, if and when instituted. Any benefit plan currently existing or instituted by the Company after the Effective Date may be altered, changeor discontinued by the Company at its sole discretion and at any time without obligation of any nature to Executive. Except as specifically provided herein, nothingin this Agreement is to be construed or interpreted to increase or alter in any way the rights, participation, coverage, or benefits under such benefit plans orprograms to other than those provided to other employees pursuant to the terms and conditions of such benefit plans and programs. 14. TERMINATION.4.1 Death. This Agreement shall terminate immediately upon the death of Executive, and Executive’s estate or Executive’s legal representative, as the casemay be, shall be entitled to Executive’s accrued and unpaid Salary as of the date of Executive’s death, plus all other compensation and benefits that were vestedthrough the date of Executive’s death.4.2 Disability. In the event of Executive’s Disability, this Agreement shall terminate and Executive shall be entitled to (a) accrued and unpaid Salary andvacation through the first date that a Disability is determined; and (b) all other compensation and benefits that were vested through the first date that a Disabilityhas been determined. “Disability” means the good faith determination of the Board that Executive has become so physically or mentally incapacitated or disabled asto be unable to satisfactorily perform his duties hereunder for a period of ninety (90) consecutive calendar days or for one hundred twenty (120) days in any threehundred sixty (360) day period, such determination based upon a certificate as to such physical or mental disability issued by a licensed physician and/orpsychiatrist (as the case may be) mutually agreed upon by Executive and the Company.4.3 Termination by Company for Cause. The Company may terminate the Executive for Cause and such termination shall take effect upon the receipt byExecutive of the Notice of Termination. Upon the effective date of the termination for Cause, Executive shall be solely entitled to accrued and unpaid Salary throughsuch effective date. “Cause” means: (i) engaging in any act, omission or misconduct that is injurious to the Company or an affiliate; (ii) gross negligence or willfulmisconduct in connection with the performance of duties; (iii) conviction of a criminal offense (other than minor traffic offenses); (iv) fraud, embezzlement ormisappropriation of funds or property of the Company or an affiliate; (v) material breach of any term of any employment or other services, confidentiality, intellectualproperty or noncompetition agreements, if any, between the Executive and the Company or an affiliate; (vi) the entry of an order duly issued by any regulatoryagency (including federal, state and local regulatory agencies and selfregulatory bodies) having jurisdiction over the Company or an affiliate requiring the removalof the Executive from any office held with the Company or prohibiting the Executive from participating in the business or affairs of the Company or any affiliate; or(vii) the revocation or threatened revocation of any of the Company’s or an affiliate’s government licenses, permits or approvals, which is primarily due to theExecutive’s action or inaction and such revocation or threatened revocation would be alleviated or mitigated in any material respect by the termination of theExecutive’s employment or services with the Company or an affiliate. 4.4 Voluntary Termination by Executive. The Executive may voluntarily terminate his employment for any reason and such termination shall take effect 30days after the receipt by Company of the Notice of Termination. Upon the effective date of such termination, Executive shall be entitled to (a) accrued and unpaidSalary and vacation through such termination date; and (b) all other compensation and benefits that were vested through such termination date. In the eventExecutive is terminated without notice, it shall be deemed a termination by the Company for Cause.4.5 Notice of Termination. Any termination of the employment by the Company or the Executive shall be communicated by a notice in accordance withSection 8.4 of this Agreement (the “Notice of Termination”). Such notice shall (a) indicate the specific termination provision in this Agreement relied upon and (b) ifthe termination is for Cause, the date on which the Executive’s employment is to be terminated.4.6 Severance. The Executive shall not be entitled to severance payments upon any termination provided in Section 4 herein.5. EMPLOYEE’S REPRESENTATION. The Executive represents and warrants to the Company that: (a) he is subject to no contractual, fiduciary or otherobligation which may affect the performance of his duties under this Agreement; (b) he has terminated, in accordance with their terms, any contractual obligationwhich may affect his performance under this Agreement; and (c) his employment with the Company will not require him to use or disclose proprietary or confidentialinformation of any other person or entity.26. CONFIDENTIAL INFORMATION Except as permitted or directed by the Board of Directors of the Company in writing, during the time the Executive isemployed by the Company or at any time thereafter, the Executive shall not use for his personal purposes nor divulge, furnish, or make accessible to anyone or usein any way (other than in the ordinary course of the business of the Company) any confidential or secret information or knowledge of the Company, whetherdeveloped by himself or by others. Such confidential and/or secret information encompassed by this Section 6 includes, but is not limited to, the Company’scustomer and supplier lists, business plans, software, systems, and financial, marketing, and personnel information. The Executive agrees to refrain from any acts oromissions that would reduce the value of any confidential or secret knowledge or information to the Company, both during his employment hereunder and at anytime after the termination of his employment. The Executive’s obligations of confidentiality under this Section 6 shall not apply to any knowledge or information thatis now published publicly or that subsequently becomes generally publicly known, other than as a direct or indirect result of a breach of this Agreement by theExecutive.7. NONCOMPETITION: NONSOLICITATION; INVENTIONS.7.1 NonCompetition. During the employment of the Executive under this Agreement and for a period of six (6) months after termination of suchemployment, the Executive shall not at any time compete on his own behalf, or on behalf of any other person or entity, with the Company or any of its affiliateswithin all territories in which the Company does business with respect to the business of the Company or any of its affiliates as such business shall be conductedon the date hereof or during the employment of the Executive under this Agreement. The ownership by the Executive of not more than 5% of a corporation,partnership or other enterprise shall not constitute a violation hereof.7.2 NonSolicitation. During the employment of the Executive under this Agreement and thereafter Executive shall not at any time (i) solicit or induce, onhis own behalf or on behalf of any other person or entity, any employee of the Company or any of its affiliates to leave the employ of the Company or any of itsaffiliates; or (ii) solicit or induce, on his own behalf or on behalf of any other person or entity, any customer or Prospective Customer of the Company or any of theirrespective affiliates to reduce its business with the Company or any of its affiliates. For the purposes of this Agreement, “Prospective Customer” shall mean anyindividual, corporation, trust or other business entity which has either (a) entered into a nondisclosure agreement with the Company or any Company subsidiary oraffiliate or (b) has within the preceding 12 months received a currently pending and not rejected written proposal in reasonable detail from the Company or any ofthe Company’s subsidiary or affiliate.7.3 Inventions and Patents. The Company shall be entitled to the sole benefit and exclusive ownership of any inventions or improvements in products,processes, or other things that may be made or discovered by Executive while he is in the service of the Company, and all patents for the same. During the Term,Executive shall do all acts necessary or required by the Company to give effect to this section and, following the Term, Executive shall do all acts reasonablynecessary or required by the Company to give effect to this section. In all cases, the Company shall pay all costs and fees associated with such acts by Executive.7.4 Return of Property. The Executive agrees that all property in the Executive’s possession that he obtains or is assigned in the course of his employmentwith the Company, including, without limitation, all documents, reports, manuals, memoranda, customer lists, credit cards, keys, access cards, and all other propertyrelating in any way to the business of the Company, is the exclusive property of the Company, even if the Executive authored, created, or assisted in authoring orcreating such property. The Executive shall return to the Company all such property immediately upon termination of employment or at such earlier time as theCompany may request.7.5Court Ordered Revisions.If any portion of this Section 7 is found by a court of competent jurisdiction to be invalid or unenforceable, but would be validand enforceable if modified, this Section 7 shall apply with such modifications necessary to make this Section 7 valid and enforceable. Any portion of this Section 7not required to be so modified shall remain in full force and effect and not be affected thereby.7.6 Specific Performance. The Executive acknowledges that the remedy at law for any breach of any of the provisions of Section 7 will be inadequate, andthat the Company shall be entitled, in addition to any remedy at law or in equity, to preliminary and permanent injunctive relief and specific performance.38. MISCELLANEOUS.8.1 Indemnification. The Company and each of its subsidiaries shall, to the maximum extent provided under applicable law, indemnify and hold Executiveharmless from and against any expenses, including reasonable attorney’s fees, judgments, fines, settlements and other legally permissible amounts (“Losses”),incurred in connection with any proceeding arising out of, or related to, Executive’s employment by the Company, other than any such Losses incurred as a result ofExecutive’s negligence or willful misconduct. The Company shall, or shall cause a subsidiary thereof to, advance to Executive any expenses, including attorney’sfees and costs of settlement, incurred in defending any such proceeding to the maximum extent permitted by applicable law. Such costs and expenses incurred byExecutive in defense of any such proceeding shall be paid by the Company or applicable subsidiary in advance of the final disposition of such proceeding promptlyupon receipt by the Company of (a) written request for payment; (b) appropriate documentation evidencing the incurrence, amount and nature of the costs andexpenses for which payment is being sought; and (c) an undertaking adequate under applicable law made by or on behalf of Executive to repay the amounts soadvanced if it shall ultimately be determined pursuant to any nonappealable judgment or settlement that Executive is not entitled to be indemnified by the Companyor any subsidiary thereof. The Company will provide Executive with coverage under all directors and officers liability insurance policies that it has in effect duringthe Term, with no deductible to Executive. 8.2 Applicable Law. Except as may be otherwise provided herein, this Agreement shall be governed by and construed in accordance with the laws ofChina, applied without reference to principles of conflict of laws. Any dispute arising from or in connection with this Agreement shall be submitted to ShanghaiInternational Arbitration Center (the “Center”) for arbitration under the then effective rules of the Center. The arbitration award shall be the sole, binding, exclusiveand final remedy for resolving any dispute between the parties.8.3 Amendments. This Agreement may not be amended or modified otherwise than by a written agreement executed by the parties hereto or their respectivesuccessors or legal representatives.8.4 Notices. All notices and other communications hereunder shall be in writing and shall be given by handdelivery to the other party, by an internationalmail courier, or by registered or certified mail, return receipt requested, postage prepaid, addressed as follows:If to the Executive:Jie Yu________________________________________If to the Company:______________________________________Or to such other address as either party shall have furnished to the other in writing in accordance herewith. Notices and communications shall be effective whendelivered to the addressee.8.5 Withholding. The Company may withhold from any amounts payable under the Agreement, such federal, state and local income, unemployment, socialsecurity and similar employment related taxes and similar employment related withholdings as shall be required to be withheld pursuant to any applicable law orregulation.8.6 Severability. The invalidity or unenforceability of any provision of this Agreement shall not affect the validity or enforceability of any other provision ofthis Agreement and any such provision which is not valid or enforceable in whole shall be enforced to the maximum extent permitted by law.48.7 Captions. The captions of this Agreement are not part of the provisions and shall have no force or effect.8.8 Entire Agreement. This Agreement contains the entire agreement among the parties concerning the subject matter hereof and supersedes all prioragreements, understandings, discussions, negotiations and undertakings, whether written or oral, between the parties with respect thereto.8.9 Survival. The respective rights and obligations of the parties hereunder shall survive any termination of this Agreement or the Executive’s employmenthereunder to the extent necessary to the intended preservation of such rights and obligations.8.10 Waiver. Either Party's failure to enforce any provision or provisions of this Agreement shall not in any way be construed as a waiver of any suchprovision or provisions, or prevent that party thereafter from enforcing each and every other provision of this Agreement.8.11 Successors. This Agreement is personal to Executive and, without the prior express written consent of the Company, shall not be assignable byExecutive. This Agreement shall inure to the benefit of and be enforceable by Executive’s estate, heirs, beneficiaries, and/or legal representatives. This Agreementshall inure to the benefit of and be binding upon the Company and its successors and assigns.8.12 Joint Efforts/Counterparts. Preparation of this Agreement shall be deemed to be the joint effort of the parties hereto and shall not be construed moreseverely against any party. This Agreement may be signed in two or more counterparts, each of which shall be deemed an original and all of which together shallconstitute one and the same instrument.8.13 Representation by Counsel. Each Party hereby represents that it has had the opportunity to be represented by legal counsel of its choice inconnection with the negotiation and execution of this Agreement.IN WITNESS WHEREOF, the parties have executed this Agreement as of the day and year first above written.EXECUTIVE:LUOKUNG TECHNOLOGY CORP./s/ Jie Yu/s/ Xuesong SongJie YuXuesong SongChief Executive Officer5EX12.1 13 f20f2017ex121_luokung.htm CERTIFICATIONExhibit 12.1Certification by the Chief Executive OfficerPursuant to Section 302 of the SarbanesOxley Act of 2002I, Xuesong Song, the Chief Executive Officer of Luokung Technology Corp. (the “Company”), certify that:1.I have reviewed this transition report on Form 20F of the Company;2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statementsmade, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financialcondition, results of operations and cash flows of the Company as of, and for, the periods presented in this report;4.The Company’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange ActRules 13a15(e) and 15d15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a15(f) and 15d15(f)) for the Company andhave:(a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure thatmaterial information relating to the Company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during theperiod in which this report is being prepared;(b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, toprovide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance withgenerally accepted accounting principles;(c)Evaluated the effectiveness of the Company’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of thedisclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and(d)Disclosed in this report any change in the Company’s internal control over financial reporting that occurred during the period covered by the transition reportthat has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting; and5.The Company’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Company’sauditors and the audit committee of the Company’s board of directors (or persons performing the equivalent functions):(a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely toadversely affect the Company’s ability to record, process, summarize and report financial information; and(b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the Company’s internal control over financialreporting.Date: October 12, 2018By:/s/ Xuesong SongXuesong SongChief Executive Officer(principal executive officer)EX12.2 14 f20f2017ex122_luokung.htm CERTIFICATIONExhibit 12.2Certification by the Chief Financial OfficerPursuant to Section 302 of the SarbanesOxley Act of 2002I, Jie Yu, the Chief Financial Officer of Luokung Technology Corp. (the “Company”), certify that:1.I have reviewed this transition report on Form 20F of the Company;2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statementsmade, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financialcondition, results of operations and cash flows of the Company as of, and for, the periods presented in this report;4.The Company’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange ActRules 13a15(e) and 15d15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a15(f) and 15d15(f)) for the Company andhave:(a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure thatmaterial information relating to the Company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during theperiod in which this report is being prepared;(b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, toprovide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance withgenerally accepted accounting principles;(c)Evaluated the effectiveness of the Company’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of thedisclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and(d)Disclosed in this report any change in the Company’s internal control over financial reporting that occurred during the period covered by the transition reportthat has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting; and5.The Company’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Company’sauditors and the audit committee of the Company’s board of directors (or persons performing the equivalent functions):(a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely toadversely affect the Company’s ability to record, process, summarize and report financial information; and(b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the Company’s internal control over financialreporting.Date: October 12, 2018By:/s/ Jie YuJie YuChief Financial Officer(principal financial officer and principal accounting officer)EX13.1 15 f20f2017ex131_luokung.htm CERTIFICATIONExhibit 13.1Certification by the Chief Executive OfficerPursuant to Section 906 of the SarbanesOxley Act of 2002In connection with the Transition report on Form 20F of Luokung Technology Corp. (the “Company”) for the year ended December 31, 2017 as filed withthe Securities and Exchange Commission on the date hereof (the “Report”), I, Xuesong Song, Chairman and Chief Executive Officer of the Company, certify,pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the SarbanesOxley Act of 2002, that to my knowledge:(1)The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and(2)The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.Date: October 12, 2018By:/s/ Xuesong SongXuesong SongChief Executive Officer(principal executive officer)EX13.2 16 f20f2017ex132_luokung.htm CERTIFICATIONExhibit 13.2Certification by the Chief Financial OfficerPursuant to Section 906 of the SarbanesOxley Act of 2002In connection with the Transition report on Form 20F of Luokung Technology Corp. (the “Company”) for the year ended December 31, 2017 as filed withthe Securities and Exchange Commission on the date hereof (the “Report”), I, Jie Yu, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. Section1350, as adopted pursuant to Section 906 of the SarbanesOxley Act of 2002, that to my knowledge:(1)The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and(2)The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.Date: October 12, 2018By:/s/ Jie YuJie YuChief Financial Officer(principal financial officer and principal accounting officer)地址：Address:.b)陈蔚力Chen Weili地址：Address:c)王平Wang Ping地址：Address:17秘密文件 Strictly Confidentiald)刘东来Liu Donglai地址：Address:丙方：北京中传视讯科技有限公司Party C: Beijing Mobile Vision Technology Co., Ltd.地址：北京市朝阳区光华路9号SOHO3QLAB32Address: LAB32, SOHO3Q, No 9, Guanghua Road, Chaoyang District, Beijing.收件人：宋雪松Attn.: Song Xuesong14.3任何一方可按本条规定随时给其他各方发出通知来改变其接收通知的地址。Any Party may at any time change its address for notices by a notice delivered to the other Parties in accordance with the terms hereof.15.分割性Severability如果本协议有任何一条或多条规定根据任何法律或法规在任何方面被裁定为无效、不合法或不可执行，本协议其余规定的有效性、合法性或可执行性不应因此在任何方面受到影响或损害。各方应通过诚意磋商，争取以法律许可以及各方期望的最大限度内有效的规定取代那些无效、不合法或不可执行的规定，而该等有效的规定所产生的经济效果应尽可能与那些无效、不合法或不能强制执行的规定所产生的经济效果相似。In the event that one or several of the provisions of this Contract are found to be invalid, illegal or unenforceable in any aspect in accordance with any laws orregulations, the validity, legality or enforceability of the remaining provisions of this Contract shall not be affected or compromised in any respect. The Partiesshall strive in good faith to replace such invalid, illegal or unenforceable provisions with effective provisions that accomplish to the greatest extent permittedby law and the intentions of the Parties, and the economic effect of such effective provisions shall be as close as possible to the economic effect of thoseinvalid, illegal or unenforceable provisions.18秘密文件 Strictly Confidential16.附件Attachments本协议所列附件，为本协议不可分割的组成部分。The attachments set forth herein shall be an integral part of this Agreement.17.生效Effectiveness17.1本协议的任何修改、补充或变更，均须采用书面形式，经各方签字或盖章并按规定办理政府登记（如需）后生效。Any amendments, changes and supplements to this Agreement shall be in writing and shall become effective upon completion of the governmentalfiling procedures (if applicable) after the affixation of the signatures or seals of the Parties.17.2本协议以中文和英文书就，一式六份，质权人、所有出质人和丙方各持一份，具有同等效力；中英文版本如有冲突，应以中文版为准。This Agreement is written in Chinese and English in six copies. Each Pledgors, Pledgee and Party C shall hold one copy respectively. Each copy of thisAgreement shall have equal validity. In case there is any conflict between the Chinese version and the English version, the Chinese version shall prevail.本页其余部分刻意留为空白The Remainder of this page is intentionally left blank19秘密文件 Strictly Confidential有鉴于此，各方已使得经其授权的代表于文首所述日期签署了本股权质押协议并即生效，以昭信守。IN WITNESS WHEREOF, the Parties have caused their authorized representatives to execute this Equity Interest Pledge Agreement as of the date first abovewritten.甲方：中传天下信息科技（深圳）有限公司（盖章）Party A: Zhongchuan Tianxia Information Technology (Shenzhen) Co., Ltd. (Seal)签字：By:/s/ Hong Ting姓名：洪婷Name: Hong Ting职务：总经理Title: General Manager秘密文件 Strictly Confidential有鉴于此，各方已使得经其授权的代表于文首所述日期签署了本股权质押协议并即生效，以昭信守。IN WITNESS WHEREOF, the Parties have caused their authorized representatives to execute this Equity Interest Pledge Agreement as of the date first abovewritten.乙方：Party B:宋雪松Song Xuesong签署：By:/s/ Song Xuesong秘密文件 Strictly Confidential有鉴于此，各方已使得经其授权的代表于文首所述日期签署了本股权质押协议并即生效，以昭信守。IN WITNESS WHEREOF, the Parties have caused their authorized representatives to execute this Equity Interest Pledge Agreement as of the date first abovewritten.乙方：Party B:陈蔚力Chen Weili签字：By:/s/ Chen Weili秘密文件 Strictly Confidential有鉴于此，各方已使得经其授权的代表于文首所述日期签署了本股权质押协议并即生效，以昭信守。IN WITNESS WHEREOF, the Parties have caused their authorized representatives to execute this Equity Interest Pledge Agreement as of the date first abovewritten.乙方：Party B:王平Wang Ping签字：By:/s/ Wang Ping秘密文件 Strictly Confidential有鉴于此，各方已使得经其授权的代表于文首所述日期签署了本股权质押协议并即生效，以昭信守。IN WITNESS WHEREOF, the Parties have caused their authorized representatives to execute this Equity Interest Pledge Agreement as of the date first abovewritten.乙方：Party B:刘东来Liu Donglai签字：By:/s/ Liu Donglai秘密文件 Strictly Confidential有鉴于此，各方已使得经其授权的代表于文首所述日期签署了本股权质押协议并即生效，以昭信守。IN WITNESS WHEREOF, the Parties have caused their authorized representatives to execute this Equity Interest Pledge Agreement as of the date first abovewritten.丙方：北京中传视讯科技有限公司（盖章）Party B: Beijing Mobile Vision Technology Co., Ltd. (Seal)签字：By:/s/ Song Xuesong姓名：宋雪松Name: Song Xuesong职务：董事长Title: Chairman of the Board秘密文件 Strictly Confidential附件：Attachments:1.北京中传视讯科技有限公司股东名册；Shareholders' Register of Beijing Mobile Vision Technology Co., Ltd.;2.北京中传视讯科技有限公司的出资证明书；The Capital Contribution Certificate of Beijing Mobile Vision Technology Co., Ltd.;3.独家业务合作协议。Exclusive Business Cooperation Agreement.秘密文件 Strictly ConfidentialEX4.20 6 f20f2017ex420_luokung.htm POWER OF ATTORNEY BY WEILI CHEN, DATED AUGUST 31, 2015Exhibit 4.20授权委托书Power of Attorney本人陈蔚力，持有中华人民共和国身份证（号码：*************** 516），通讯地址为广东省，系拥有北京中传视讯科技有限公司（“中传视讯”）14.0848%股权（“相关股权”）的股东，就相关股权，特此不可撤销地授权中传天下信息科技（深圳）有限公司（“深圳中传天下”）在本授权委托书的有效期内行使如下权利：The undersigned, Chen Weili, a person with the PRC identification card number of ***************516, with address at: Guangdong, and a holder of14.0848% of the entire registered capital ("Shares") in Beijing Mobile Vision Technology Co., Ltd. ("Mobile Vision"), hereby irrevocably authorize ZhongchuanTianxia Information Technology (Shenzhen) Co., Ltd. ("WFOE") to exercise the following rights relating to Shares during the term of this Power of Attorney:授权深圳中传天下作为本人唯一的排他的代理人就有关相关股权的事宜全权代表本人行使包括但不限于如下的权利：1）参加中传视讯的股东会；2）行使按照法律和中传视讯章程规定本人所享有的全部股东权利和股东表决权，包括但不限于出售或转让或质押或处置相关股权的全部或任何一部分；以及3）作为本人的授权代表指定和任命中传视讯的法定代表人、董事和/或执行董事、监事、经理以及其他高级管理人员等。但中传视讯利用该等授权做出违反中华人民共和国法律的决定无效。WFOE is hereby authorized to act on behalf of myself as my exclusive agent and attorney with respect to all matters concerning My Shareholding, includingwithout limitation: 1) attending shareholders' meetings of Mobile Vision; 2) exercising all the shareholder's rights and shareholder's voting rights I am entitled tounder the laws of China and Articles of Association of Mobile Vision, including but not limited to the sale or transfer or pledge or disposition of My Shareholding inpart or in whole; and 3) designating and appointing on behalf of myself the legal representative, director and/or executive director, supervisor, manager and othersenior management members of Mobile Vision. However, the decision made by Mobile Vision taking advantage of the power of attorney which is against the PRClaws shall be null and void.1深圳中传天下将有权在授权范围内代表本人签署独家购买权协议（本人应要求作为协议方）中约定的转让协议，如期履行本人作为协议一方的与本授权委托书同日签署的股权质押协议和独家购买权协议，该权利的行使将不对本授权形成任何限制。Without limiting the generality of the powers granted hereunder, WFOE shall have the power and authority under this Power of Attorney to execute theTransfer Contracts stipulated in Exclusive Option Agreement, to which I am required to be a party, on behalf of myself, and to effect the terms of the Share PledgeAgreement and Exclusive Option Agreement, both dated the date hereof, to which I am a party.深圳中传天下就相关股权的一切行为均视为本人的行为，签署的一切文件均视为本人签署，本人会予以承认。All the actions associated with Shares conducted by WFOE shall be deemed as my own actions, and all the documents related to Shares executed by WFOEshall be deemed to be executed by me. I hereby acknowledge and ratify those actions and/or documents by the WFOE.深圳中传天下有转委托权，可以就上述事项的办理自行再委托其他人或单位而不必事先通知本人或获得本人的同意。WFOE is entitled to reauthorize or assign its rights related to the aforesaid matters to any other person or entity at its own discretion and without giving priornotice to me or obtaining my consent.在本人为中传视讯的股东期间，本授权委托书不可撤销并持续有效，自授权委托书签署之日起算。This Power of Attorney is coupled with an interest and shall be irrevocable and continuously valid from the date of execution of this Power of Attorney, solong as I am a shareholder of Mobile Vision.本授权委托书期间，本人特此放弃已经通过本授权委托书授权给深圳中传天下的与相关股权有关的所有权利，不再自行行使该等权利。During the term of this Power of Attorney, I hereby waive all the rights associated with Shares, which have been authorized to WFOE through this Power ofAttorney, and shall not exercise such rights by myself.本授权委托书以中文和英文书就，中英文版本如有冲突，应以中文版为准。This Power of Attorney is written in Chinese and English; in case there is any conflict between the Chinese version and the English version, the Chineseversion shall prevail.陈蔚力Chen Weili签署：By:日期：年月日Date:2EX4.21 7 f20f2017ex421_luokung.htm POWER OF ATTORNEY BY PING WANG, DATED AUGUST 31, 2015Exhibit 4.21授权委托书Power of Attorney本人王平，持有中华人民共和国身份证（号码：***************01x），通讯地址为广东省，系拥有北京中传视讯科技有限公司（“中传视讯”）19.9872%股权（“相关股权”）的股东，就相关股权，特此不可撤销地授权中传天下信息科技（深圳）有限公司（“深圳中传天下”）在本授权委托书的有效期内行使如下权利：The undersigned, Wang Ping, a person with the PRC identification card number of ***************01x, with address at Guangdong, and a holder of19.9872% of the entire registered capital (“Shares”) in Beijing Mobile Vision Technology Co., Ltd. (“Mobile Vision”), hereby irrevocably authorize ZhongchuanTianxia Information Technology (Shenzhen) Co., Ltd. (“WFOE”) to exercise the following rights relating to Shares during the term of this Power of Attorney:授权深圳中传天下作为本人唯一的排他的代理人就有关相关股权的事宜全权代表本人行使包括但不限于如下的权利：1）参加中传视讯的股东会；2）行使按照法律和中传视讯章程规定本人所享有的全部股东权利和股东表决权，包括但不限于出售或转让或质押或处置相关股权的全部或任何一部分；以及3）作为本人的授权代表指定和任命中传视讯的法定代表人、董事和/或执行董事、监事、经理以及其他高级管理人员等。但中传视讯利用该等授权做出违反中华人民共和国法律的决定无效。WFOE is hereby authorized to act on behalf of myself as my exclusive agent and attorney with respect to all matters concerning My Shareholding, includingwithout limitation: 1) attending shareholders’ meetings of Mobile Vision; 2) exercising all the shareholder’s rights and shareholder’s voting rights I am entitled tounder the laws of China and Articles of Association of Mobile Vision, including but not limited to the sale or transfer or pledge or disposition of My Shareholding inpart or in whole; and 3) designating and appointing on behalf of myself the legal representative, director and/or executive director, supervisor, manager and othersenior management members of Mobile Vision. However, the decision made by Mobile Vision taking advantage of the power of attorney which is against the PRClaws shall be null and void.1深圳中传天下将有权在授权范围内代表本人签署独家购买权协议（本人应要求作为协议方）中约定的转让协议，如期履行本人作为协议一方的与本授权委托书同日签署的股权质押协议和独家购买权协议，该权利的行使将不对本授权形成任何限制。Without limiting the generality of the powers granted hereunder, WFOE shall have the power and authority under this Power of Attorney to execute theTransfer Contracts stipulated in Exclusive Option Agreement, to which I am required to be a party, on behalf of myself, and to effect the terms of the Share PledgeAgreement and Exclusive Option Agreement, both dated the date hereof, to which I am a party.深圳中传天下就相关股权的一切行为均视为本人的行为，签署的一切文件均视为本人签署，本人会予以承认。All the actions associated with Shares conducted by WFOE shall be deemed as my own actions, and all the documents related to Shares executed by WFOEshall be deemed to be executed by me. I hereby acknowledge and ratify those actions and/or documents by the WFOE.深圳中传天下有转委托权，可以就上述事项的办理自行再委托其他人或单位而不必事先通知本人或获得本人的同意。WFOE is entitled to reauthorize or assign its rights related to the aforesaid matters to any other person or entity at its own discretion and without giving priornotice to me or obtaining my consent.在本人为中传视讯的股东期间，本授权委托书不可撤销并持续有效，自授权委托书签署之日起算。This Power of Attorney is coupled with an interest and shall be irrevocable and continuously valid from the date of execution of this Power of Attorney, solong as I am a shareholder of Mobile Vision.本授权委托书期间，本人特此放弃已经通过本授权委托书授权给深圳中传天下的与相关股权有关的所有权利，不再自行行使该等权利。During the term of this Power of Attorney, I hereby waive all the rights associated with Shares, which have been authorized to WFOE through this Power ofAttorney, and shall not exercise such rights by myself.本授权委托书以中文和英文书就，中英文版本如有冲突，应以中文版为准。This Power of Attorney is written in Chinese and English; in case there is any conflict between the Chinese version and the English version, the Chineseversion shall prevail.王平Wang Ping签署：By:日期：年月日Date:2EX4.22 8 f20f2017ex422_luokung.htm POWER OF ATTORNEY BY DONGLAI LIU, DATED AUGUST 31, 2015Exhibit 4.22授权委托书Power of Attorney本人刘东来，持有中华人民共和国身份证（号码：***************912），通讯地址为: ，系拥有北京中传视讯科技有限公司（“中传视讯”）4.1035%股权（“相关股权”）的股东，就相关股权，特此不可撤销地授权中传天下信息科技（深圳）有限公司（“深圳中传天下”）在本授权委托书的有效期内行使如下权利：The undersigned, Liu Donglai, a person with the PRC identification card number of ***************912, with address at: , and a holder of 4.1035% of theentire registered capital (“Shares”) in Beijing Mobile Vision Technology Co., Ltd. (“Mobile Vision”), hereby irrevocably authorize Zhongchuan Tianxia InformationTechnology (Shenzhen) Co., Ltd. (“WFOE”) to exercise the following rights relating to Shares during the term of this Power of Attorney:授权深圳中传天下作为本人唯一的排他的代理人就有关相关股权的事宜全权代表本人行使包括但不限于如下的权利：1）参加中传视讯的股东会；2）行使按照法律和中传视讯章程规定本人所享有的全部股东权利和股东表决权，包括但不限于出售或转让或质押或处置相关股权的全部或任何一部分；以及3）作为本人的授权代表指定和任命中传视讯的法定代表人、董事和/或执行董事、监事、经理以及其他高级管理人员等。但中传视讯利用该等授权做出违反中华人民共和国法律的决定无效。WFOE is hereby authorized to act on behalf of myself as my exclusive agent and attorney with respect to all matters concerning My Shareholding, includingwithout limitation: 1) attending shareholders’ meetings of Mobile Vision; 2) exercising all the shareholder’s rights and shareholder’s voting rights I am entitled tounder the laws of China and Articles of Association of Mobile Vision, including but not limited to the sale or transfer or pledge or disposition of My Shareholding inpart or in whole; and 3) designating and appointing on behalf of myself the legal representative, director and/or executive director, supervisor, manager and othersenior management members of Mobile Vision. However, the decision made by Mobile Vision taking advantage of the power of attorney which is against the PRClaws shall be null and void.1深圳中传天下将有权在授权范围内代表本人签署独家购买权协议（本人应要求作为协议方）中约定的转让协议，如期履行本人作为协议一方的与本授权委托书同日签署的股权质押协议和独家购买权协议，该权利的行使将不对本授权形成任何限制。Without limiting the generality of the powers granted hereunder, WFOE shall have the power and authority under this Power of Attorney to execute theTransfer Contracts stipulated in Exclusive Option Agreement, to which I am required to be a party, on behalf of myself, and to effect the terms of the Share PledgeAgreement and Exclusive Option Agreement, both dated the date hereof, to which I am a party.深圳中传天下就相关股权的一切行为均视为本人的行为，签署的一切文件均视为本人签署，本人会予以承认。All the actions associated with Shares conducted by WFOE shall be deemed as my own actions, and all the documents related to Shares executed by WFOEshall be deemed to be executed by me. I hereby acknowledge and ratify those actions and/or documents by the WFOE.深圳中传天下有转委托权，可以就上述事项的办理自行再委托其他人或单位而不必事先通知本人或获得本人的同意。WFOE is entitled to reauthorize or assign its rights related to the aforesaid matters to any other person or entity at its own discretion and without giving priornotice to me or obtaining my consent.在本人为中传视讯的股东期间，本授权委托书不可撤销并持续有效，自授权委托书签署之日起算。This Power of Attorney is coupled with an interest and shall be irrevocable and continuously valid from the date of execution of this Power of Attorney, solong as I am a shareholder of Mobile Vision.本授权委托书期间，本人特此放弃已经通过本授权委托书授权给深圳中传天下的与相关股权有关的所有权利，不再自行行使该等权利。During the term of this Power of Attorney, I hereby waive all the rights associated with Shares, which have been authorized to WFOE through this Power ofAttorney, and shall not exercise such rights by myself.本授权委托书以中文和英文书就，中英文版本如有冲突，应以中文版为准。This Power of Attorney is written in Chinese and English; in case there is any conflict between the Chinese version and the English version, the Chineseversion shall prevail.刘东来Liu Donglai签署：By:日期：年月日Date:2EX4.23 9 f20f2017ex423_luokung.htm POWER OF ATTORNEY BY XUESONG SONG, DATED AUGUST 31, 2015Exhibit 4.23授权委托书Power of Attorney本人宋雪松，持有中华人民共和国身份证（号码：***************417），通讯地址为，系拥有北京中传视讯科技有限公司（“中传视讯”）61.8245%股权（“相关股权”）的股东，就相关股权，特此不可撤销地授权中传天下信息科技（深圳）有限公司（“深圳中传天下”）在本授权委托书的有效期内行使如下权利：The undersigned, Song Xuesong, a person with the PRC identification card number of ***************417, with address at , and a holder of 61.8245% ofthe entire registered capital (“Shares”) in Beijing Mobile Vision Technology Co., Ltd. (“Mobile Vision”), hereby irrevocably authorize Zhongchuan TianxiaInformation Technology (Shenzhen) Co., Ltd. (“WFOE”) to exercise the following rights relating to Shares during the term of this Power of Attorney:授权深圳中传天下作为本人唯一的排他的代理人就有关相关股权的事宜全权代表本人行使包括但不限于如下的权利：1）参加中传视讯的股东会；2）行使按照法律和中传视讯章程规定本人所享有的全部股东权利和股东表决权，包括但不限于出售或转让或质押或处置相关股权的全部或任何一部分；以及3）作为本人的授权代表指定和任命中传视讯的法定代表人、董事和/或执行董事、监事、经理以及其他高级管理人员等。但中传视讯利用该等授权做出违反中华人民共和国法律的决定无效。WFOE is hereby authorized to act on behalf of myself as my exclusive agent and attorney with respect to all matters concerning My Shareholding, includingwithout limitation: 1) attending shareholders’ meetings of Mobile Vision; 2) exercising all the shareholder’s rights and shareholder’s voting rights I am entitled tounder the laws of China and Articles of Association of Mobile Vision, including but not limited to the sale or transfer or pledge or disposition of My Shareholding inpart or in whole; and 3) designating and appointing on behalf of myself the legal representative, director and/or executive director, supervisor, manager and othersenior management members of Mobile Vision. However, the decision made by Mobile Vision taking advantage of the power of attorney which is against the PRClaws shall be null and void.1深圳中传天下将有权在授权范围内代表本人签署独家购买权协议（本人应要求作为协议方）中约定的转让协议，如期履行本人作为协议一方的与本授权委托书同日签署的股权质押协议和独家购买权协议，该权利的行使将不对本授权形成任何限制。Without limiting the generality of the powers granted hereunder, WFOE shall have the power and authority under this Power of Attorney to execute theTransfer Contracts stipulated in Exclusive Option Agreement, to which I am required to be a party, on behalf of myself, and to effect the terms of the Share PledgeAgreement and Exclusive Option Agreement, both dated the date hereof, to which I am a party.深圳中传天下就相关股权的一切行为均视为本人的行为，签署的一切文件均视为本人签署，本人会予以承认。All the actions associated with Shares conducted by WFOE shall be deemed as my own actions, and all the documents related to Shares executed by WFOEshall be deemed to be executed by me. I hereby acknowledge and ratify those actions and/or documents by the WFOE.深圳中传天下有转委托权，可以就上述事项的办理自行再委托其他人或单位而不必事先通知本人或获得本人的同意。WFOE is entitled to reauthorize or assign its rights related to the aforesaid matters to any other person or entity at its own discretion and without giving priornotice to me or obtaining my consent.在本人为中传视讯的股东期间，本授权委托书不可撤销并持续有效，自授权委托书签署之日起算。This Power of Attorney is coupled with an interest and shall be irrevocable and continuously valid from the date of execution of this Power of Attorney, solong as I am a shareholder of Mobile Vision.本授权委托书期间，本人特此放弃已经通过本授权委托书授权给深圳中传天下的与相关股权有关的所有权利，不再自行行使该等权利。During the term of this Power of Attorney, I hereby waive all the rights associated with Shares, which have been authorized to WFOE through this Power ofAttorney, and shall not exercise such rights by myself.本授权委托书以中文和英文书就，中英文版本如有冲突，应以中文版为准。This Power of Attorney is written in Chinese and English; in case there is any conflict between the Chinese version and the English version, the Chineseversion shall prevail.宋雪松Song Xuesong签署：By:日期：年月日Date:2EX8.1 10 f20f2017ex81_luokung.htm LIST OF SUBSIDIARIES AND CONSOLIDATED VARIABLE INTEREST ENTITIESExhibit 8.1List of Subsidiaries of the CompanyName of EntityJurisdiction of Incorporation/OrganizationLK Technology Ltd.British Virgin IslandsTopsky Infotech Holdings Pte Ltd.SingaporeSuperengine Holdings LimitedBritish Virgin IslandsMMB LimitedHong KongMobile Media (China Limited)Hong KongZhong Chuan Tian Xia Information and Technology (Beijing) LimitedBeijing, PRCZhong Chuan Xia Information and Technology (Shenzhen) LimitedShenzhen, PRCBeijing Zhong Chuan Shi Xun Technology Limited (VIE Entity)Beijing, PRCJiangsu Zhong Chuan Rui You Information and Technology Limited (VIE Entity)Jiangsu, PRCHuoerguosi Luokuang Information and Technology Limited (VIE Entity)Huoerguosi, PRCShenzhen Jiu Zhou Shi Dai Digital Technology LimitedShenzhen, PRCEX10.1 11 f20f2017ex101_luokung.htm EMPLOYMENT AGREEMENT, DATED AUGUST 19, 2018, BETWEEN LUOKUNG TECHNOLOGY CORP. AND XUESONGSONGExhibit 10.1EMPLOYMENT AGREEMENTThis EMPLOYMENT AGREEMENT (the “Agreement”) is made and entered into as of this 19 day of August, 2018 (the “Effective Date”), by and between LuokungTechnology Corp., a British Virgin Islands corporation (the “Company”) and Xuesong Song (the “Executive”), a Chinese citizen.WITNESSETH:WHEREAS, the parties desire to enter into this Agreement setting forth the terms and conditions of the employment relationship between the Executiveand the Company.NOW, THEREFORE, in consideration of the foregoing premises and the mutual covenants and agreements contained herein, the parties hereto agree asfollows:1. EMPLOYMENT.1.1 Agreement to Employ. The Company hereby agrees to employ Executive, and Executive hereby agrees to serve, subject to the provisions of thisAgreement, as an officer and employee of the Company.1.2 Duties and Schedule. Executive shall serve as the Company’s Chief Executive Officer (“CEO”). The responsibilities of the Executive shall be subject tothe bylaws of the Company and determined by the Board of Directors of the Company (the “Board”). The Executive shall report directly to the Board and shall havesuch responsibilities as designated by the Board of the Company to the extent that such responsibilities are not inconsistent with all applicable laws, regulationsand rules. Executive shall devote his best efforts and all of his business time to his position with the Company during the Term.2. TERM OF EMPLOYMENT. Unless Executive’s employment shall sooner terminate pursuant to Section 4, the Company shall employ Executive for a fouryear term commencing on the Effective Date (the “Term”), which Term shall be renewable upon mutual agreement of the Company and the Executive, as approved bythe Board.3. COMPENSATION.3.1 Salary. Executive’s salary during the Term shall be $Nil.3.2 Bonus. At the sole discretion of the Board, or any committee duly designated by the Board and authorized to act thereto, the Executive shall be eligiblefor an annual cash bonus.3.3 Vacation. Executive shall be entitled to 8 days of paid vacation per year. In the event that Executive remains employed by the Company for 3 years ormore, Executive shall be entitled to 12 days of paid vacation.3.4 Business Expenses. Executive shall be reimbursed by the Company for all ordinary and necessary expenses incurred by Executive; provided that theyare incurred and approved in writing in accordance with the Company’s expense policy.3.5 Benefits. During the Term, Executive shall be allowed to participate, on the same basis generally as other employees of the Company, in all generalemployee benefit plans and programs, including improvements or modifications of the same, which may exist as of the Effective Date or thereafter and which aremade available by the Company to all or substantially all of its employees. Such benefits, plans, and programs may include, without limitation, any health, and dentalinsurance or 401K programs, if and when instituted. Any benefit plan currently existing or instituted by the Company after the Effective Date may be altered, changeor discontinued by the Company at its sole discretion and at any time without obligation of any nature to Executive. Except as specifically provided herein, nothingin this Agreement is to be construed or interpreted to increase or alter in any way the rights, participation, coverage, or benefits under such benefit plans orprograms to other than those provided to other employees pursuant to the terms and conditions of such benefit plans and programs. 14. TERMINATION.4.1 Death. This Agreement shall terminate immediately upon the death of Executive, and Executive’s estate or Executive’s legal representative, as the casemay be, shall be entitled to Executive’s accrued and unpaid Salary as of the date of Executive’s death, plus all other compensation and benefits that were vestedthrough the date of Executive’s death.4.2 Disability. In the event of Executive’s Disability, this Agreement shall terminate and Executive shall be entitled to (a) accrued and unpaid Salary andvacation through the first date that a Disability is determined; and (b) all other compensation and benefits that were vested through the first date that a Disabilityhas been determined. “Disability” means the good faith determination of the Board that Executive has become so physically or mentally incapacitated or disabled asto be unable to satisfactorily perform his duties hereunder for a period of ninety (90) consecutive calendar days or for one hundred twenty (120) days in any threehundred sixty (360) day period, such determination based upon a certificate as to such physical or mental disability issued by a licensed physician and/orpsychiatrist (as the case may be) mutually agreed upon by Executive and the Company.4.3 Termination by Company for Cause. The Company may terminate the Executive for Cause and such termination shall take effect upon the receipt byExecutive of the Notice of Termination. Upon the effective date of the termination for Cause, Executive shall be solely entitled to accrued and unpaid Salary throughsuch effective date. “Cause” means: (i) engaging in any act, omission or misconduct that is injurious to the Company or an affiliate; (ii) gross negligence or willfulmisconduct in connection with the performance of duties; (iii) conviction of a criminal offense (other than minor traffic offenses); (iv) fraud, embezzlement ormisappropriation of funds or property of the Company or an affiliate; (v) material breach of any term of any employment or other services, confidentiality, intellectualproperty or noncompetition agreements, if any, between the Executive and the Company or an affiliate; (vi) the entry of an order duly issued by any regulatoryagency (including federal, state and local regulatory agencies and selfregulatory bodies) having jurisdiction over the Company or an affiliate requiring the removalof the Executive from any office held with the Company or prohibiting the Executive from participating in the business or affairs of the Company or any affiliate; or(vii) the revocation or threatened revocation of any of the Company’s or an affiliate’s government licenses, permits or approvals, which is primarily due to theExecutive’s action or inaction and such revocation or threatened revocation would be alleviated or mitigated in any material respect by the termination of theExecutive’s employment or services with the Company or an affiliate. 4.4 Voluntary Termination by Executive. The Executive may voluntarily terminate his employment for any reason and such termination shall take effect 30days after the receipt by Company of the Notice of Termination. Upon the effective date of such termination, Executive shall be entitled to (a) accrued and unpaidSalary and vacation through such termination date; and (b) all other compensation and benefits that were vested through such termination date. In the eventExecutive is terminated without notice, it shall be deemed a termination by the Company for Cause.4.5 Notice of Termination. Any termination of the employment by the Company or the Executive shall be communicated by a notice in accordance withSection 8.4 of this Agreement (the “Notice of Termination”). Such notice shall (a) indicate the specific termination provision in this Agreement relied upon and (b) ifthe termination is for Cause, the date on which the Executive’s employment is to be terminated.4.6 Severance. The Executive shall not be entitled to severance payments upon any termination provided in Section 4 herein.5. EMPLOYEE’S REPRESENTATION. The Executive represents and warrants to the Company that: (a) he is subject to no contractual, fiduciary or otherobligation which may affect the performance of his duties under this Agreement; (b) he has terminated, in accordance with their terms, any contractual obligationwhich may affect his performance under this Agreement; and (c) his employment with the Company will not require him to use or disclose proprietary or confidentialinformation of any other person or entity.26. CONFIDENTIAL INFORMATION Except as permitted or directed by the Board of Directors of the Company in writing, during the time the Executive isemployed by the Company or at any time thereafter, the Executive shall not use for his personal purposes nor divulge, furnish, or make accessible to anyone or usein any way (other than in the ordinary course of the business of the Company) any confidential or secret information or knowledge of the Company, whetherdeveloped by himself or by others. Such confidential and/or secret information encompassed by this Section 6 includes, but is not limited to, the Company’scustomer and supplier lists, business plans, software, systems, and financial, marketing, and personnel information. The Executive agrees to refrain from any acts oromissions that would reduce the value of any confidential or secret knowledge or information to the Company, both during his employment hereunder and at anytime after the termination of his employment. The Executive’s obligations of confidentiality under this Section 6 shall not apply to any knowledge or information thatis now published publicly or that subsequently becomes generally publicly known, other than as a direct or indirect result of a breach of this Agreement by theExecutive.7. NONCOMPETITION: NONSOLICITATION; INVENTIONS.7.1 NonCompetition. During the employment of the Executive under this Agreement and for a period of six (6) months after termination of suchemployment, the Executive shall not at any time compete on his own behalf, or on behalf of any other person or entity, with the Company or any of its affiliateswithin all territories in which the Company does business with respect to the business of the Company or any of its affiliates as such business shall be conductedon the date hereof or during the employment of the Executive under this Agreement. The ownership by the Executive of not more than 5% of a corporation,partnership or other enterprise shall not constitute a violation hereof.7.2 NonSolicitation. During the employment of the Executive under this Agreement and thereafter Executive shall not at any time (i) solicit or induce, onhis own behalf or on behalf of any other person or entity, any employee of the Company or any of its affiliates to leave the employ of the Company or any of itsaffiliates; or (ii) solicit or induce, on his own behalf or on behalf of any other person or entity, any customer or Prospective Customer of the Company or any of theirrespective affiliates to reduce its business with the Company or any of its affiliates. For the purposes of this Agreement, “Prospective Customer” shall mean anyindividual, corporation, trust or other business entity which has either (a) entered into a nondisclosure agreement with the Company or any Company subsidiary oraffiliate or (b) has within the preceding 12 months received a currently pending and not rejected written proposal in reasonable detail from the Company or any ofthe Company’s subsidiary or affiliate.7.3 Inventions and Patents. The Company shall be entitled to the sole benefit and exclusive ownership of any inventions or improvements in products,processes, or other things that may be made or discovered by Executive while he is in the service of the Company, and all patents for the same. During the Term,Executive shall do all acts necessary or required by the Company to give effect to this section and, following the Term, Executive shall do all acts reasonablynecessary or required by the Company to give effect to this section. In all cases, the Company shall pay all costs and fees associated with such acts by Executive.7.4 Return of Property. The Executive agrees that all property in the Executive’s possession that he obtains or is assigned in the course of his employmentwith the Company, including, without limitation, all documents, reports, manuals, memoranda, customer lists, credit cards, keys, access cards, and all other propertyrelating in any way to the business of the Company, is the exclusive property of the Company, even if the Executive authored, created, or assisted in authoring orcreating such property. The Executive shall return to the Company all such property immediately upon termination of employment or at such earlier time as theCompany may request.7.5Court Ordered Revisions.If any portion of this Section 7 is found by a court of competent jurisdiction to be invalid or unenforceable, but would be validand enforceable if modified, this Section 7 shall apply with such modifications necessary to make this Section 7 valid and enforceable. Any portion of this Section 7not required to be so modified shall remain in full force and effect and not be affected thereby.7.6 Specific Performance. The Executive acknowledges that the remedy at law for any breach of any of the provisions of Section 7 will be inadequate, andthat the Company shall be entitled, in addition to any remedy at law or in equity, to preliminary and permanent injunctive relief and specific performance.38. MISCELLANEOUS.8.1 Indemnification. The Company and each of its subsidiaries shall, to the maximum extent provided under applicable law, indemnify and hold Executiveharmless from and against any expenses, including reasonable attorney’s fees, judgments, fines, settlements and other legally permissible amounts (“Losses”),incurred in connection with any proceeding arising out of, or related to, Executive’s employment by the Company, other than any such Losses incurred as a result ofExecutive’s negligence or willful misconduct. The Company shall, or shall cause a subsidiary thereof to, advance to Executive any expenses, including attorney’sfees and costs of settlement, incurred in defending any such proceeding to the maximum extent permitted by applicable law. Such costs and expenses incurred byExecutive in defense of any such proceeding shall be paid by the Company or applicable subsidiary in advance of the final disposition of such proceeding promptlyupon receipt by the Company of (a) written request for payment; (b) appropriate documentation evidencing the incurrence, amount and nature of the costs andexpenses for which payment is being sought; and (c) an undertaking adequate under applicable law made by or on behalf of Executive to repay the amounts soadvanced if it shall ultimately be determined pursuant to any nonappealable judgment or settlement that Executive is not entitled to be indemnified by the Companyor any subsidiary thereof. The Company will provide Executive with coverage under all directors and officers liability insurance policies that it has in effect duringthe Term, with no deductible to Executive. 8.2 Applicable Law. Except as may be otherwise provided herein, this Agreement shall be governed by and construed in accordance with the laws ofChina, applied without reference to principles of conflict of laws. Any dispute arising from or in connection with this Agreement shall be submitted to ShanghaiInternational Arbitration Center (the “Center”) for arbitration under the then effective rules of the Center. The arbitration award shall be the sole, binding, exclusiveand final remedy for resolving any dispute between the parties.8.3 Amendments. This Agreement may not be amended or modified otherwise than by a written agreement executed by the parties hereto or their respectivesuccessors or legal representatives.8.4 Notices. All notices and other communications hereunder shall be in writing and shall be given by handdelivery to the other party, by an internationalmail courier, or by registered or certified mail, return receipt requested, postage prepaid, addressed as follows:If to the Executive:Xuesong Song________________________________________________If to the Company:______________________________________Or to such other address as either party shall have furnished to the other in writing in accordance herewith. Notices and communications shall be effective whendelivered to the addressee.8.5 Withholding. The Company may withhold from any amounts payable under the Agreement, such federal, state and local income, unemployment, socialsecurity and similar employment related taxes and similar employment related withholdings as shall be required to be withheld pursuant to any applicable law orregulation.8.6 Severability. The invalidity or unenforceability of any provision of this Agreement shall not affect the validity or enforceability of any other provision ofthis Agreement and any such provision which is not valid or enforceable in whole shall be enforced to the maximum extent permitted by law.8.7 Captions. The captions of this Agreement are not part of the provisions and shall have no force or effect.48.8 Entire Agreement. This Agreement contains the entire agreement among the parties concerning the subject matter hereof and supersedes all prioragreements, understandings, discussions, negotiations and undertakings, whether written or oral, between the parties with respect thereto.8.9 Survival. The respective rights and obligations of the parties hereunder shall survive any termination of this Agreement or the Executive’s employmenthereunder to the extent necessary to the intended preservation of such rights and obligations.8.10 Waiver. Either Party's failure to enforce any provision or provisions of this Agreement shall not in any way be construed as a waiver of any suchprovision or provisions, or prevent that party thereafter from enforcing each and every other provision of this Agreement.8.11 Successors. This Agreement is personal to Executive and, without the prior express written consent of the Company, shall not be assignable byExecutive. This Agreement shall inure to the benefit of and be enforceable by Executive’s estate, heirs, beneficiaries, and/or legal representatives. This Agreementshall inure to the benefit of and be binding upon the Company and its successors and assigns.8.12 Joint Efforts/Counterparts. Preparation of this Agreement shall be deemed to be the joint effort of the parties hereto and shall not be construed moreseverely against any party. This Agreement may be signed in two or more counterparts, each of which shall be deemed an original and all of which together shallconstitute one and the same instrument.8.13 Representation by Counsel. Each Party hereby represents that it has had the opportunity to be represented by legal counsel of its choice inconnection with the negotiation and execution of this Agreement.IN WITNESS WHEREOF, the parties have executed this Agreement as of the day and year first above written.EXECUTIVE:LUOKUNG TECHNOLOGY CORP./s/ Xuesong Song/s/ Jie YuXuesong SongJie YuChief Financial Officer5EX10.2 12 f20f2017ex102_luokung.htm EMPLOYMENT AGREEMENT, DATED AUGUST 19, 2018, BY AND BETWEEN LUOKUNG TECHNOLOGY CORP. AND JIEYUExhibit 10.2EMPLOYMENT AGREEMENTThis EMPLOYMENT AGREEMENT (the “Agreement”) is made and entered into as of this 19 day of August, 2018 (the “Effective Date”), by and between LuokungTechnology Corp., a British Virgin Islands corporation (the “Company”) and Jie (Jay) Yu (the “Executive”), a Chinese citizen.WITNESSETH:WHEREAS, the parties desire to enter into this Agreement setting forth the terms and conditions of the employment relationship between the Executiveand the Company.NOW, THEREFORE, in consideration of the foregoing premises and the mutual covenants and agreements contained herein, the parties hereto agree asfollows:1. EMPLOYMENT.1.1 Agreement to Employ. The Company hereby agrees to employ Executive, and Executive hereby agrees to serve, subject to the provisions of thisAgreement, as an officer and employee of the Company.1.2 Duties and Schedule. Executive shall serve as the Company’s Chief Financial Officer, and be the Principal Financial Officer and Principal AccountingOfficer of the Company and responsible for all financial matters and management of the Company. The Executive shall report directly to the Company’s ChiefExecutive Officer and Board of Directors (the “Board”) and shall have such responsibilities as designated by the Chief Executive Officer or Board to the extent thatsuch responsibilities are not inconsistent with all applicable laws, regulations and rules. Executive shall devote his best efforts and all of his business time to hisposition with the Company during the Term.2. TERM OF EMPLOYMENT. Unless Executive’s employment shall sooner terminate pursuant to Section 4, the Company shall employ Executive for a fouryear term commencing on the Effective Date (the “Term”), which Term shall be renewable upon mutual agreement of the Company and the Executive, as approved bythe Board.3. COMPENSATION.3.1 Salary. Executive’s salary during the Term shall be RMB700,000 per year (the “Salary”), payable monthly.3.2 Bonus. At the sole discretion of the Board, or any committee duly designated by the Board and authorized to act thereto, the Executive shall be eligiblefor an annual cash bonus.3.3 Vacation. Executive shall be entitled to 8 days of paid vacation per year. In the event that Executive remains employed by the Company for 3 years ormore, Executive shall be entitled to 12 days of paid vacation.3.4 Business Expenses. Executive shall be reimbursed by the Company for all ordinary and necessary expenses incurred by Executive; provided that theyare incurred and approved in writing in accordance with the Company’s expense policy.3.5 Benefits. During the Term, Executive shall be allowed to participate, on the same basis generally as other employees of the Company, in all generalemployee benefit plans and programs, including improvements or modifications of the same, which may exist as of the Effective Date or thereafter and which aremade available by the Company to all or substantially all of its employees. Such benefits, plans, and programs may include, without limitation, any health, and dentalinsurance or 401K programs, if and when instituted. Any benefit plan currently existing or instituted by the Company after the Effective Date may be altered, changeor discontinued by the Company at its sole discretion and at any time without obligation of any nature to Executive. Except as specifically provided herein, nothingin this Agreement is to be construed or interpreted to increase or alter in any way the rights, participation, coverage, or benefits under such benefit plans orprograms to other than those provided to other employees pursuant to the terms and conditions of such benefit plans and programs. 14. TERMINATION.4.1 Death. This Agreement shall terminate immediately upon the death of Executive, and Executive’s estate or Executive’s legal representative, as the casemay be, shall be entitled to Executive’s accrued and unpaid Salary as of the date of Executive’s death, plus all other compensation and benefits that were vestedthrough the date of Executive’s death.4.2 Disability. In the event of Executive’s Disability, this Agreement shall terminate and Executive shall be entitled to (a) accrued and unpaid Salary andvacation through the first date that a Disability is determined; and (b) all other compensation and benefits that were vested through the first date that a Disabilityhas been determined. “Disability” means the good faith determination of the Board that Executive has become so physically or mentally incapacitated or disabled asto be unable to satisfactorily perform his duties hereunder for a period of ninety (90) consecutive calendar days or for one hundred twenty (120) days in any threehundred sixty (360) day period, such determination based upon a certificate as to such physical or mental disability issued by a licensed physician and/orpsychiatrist (as the case may be) mutually agreed upon by Executive and the Company.4.3 Termination by Company for Cause. The Company may terminate the Executive for Cause and such termination shall take effect upon the receipt byExecutive of the Notice of Termination. Upon the effective date of the termination for Cause, Executive shall be solely entitled to accrued and unpaid Salary throughsuch effective date. “Cause” means: (i) engaging in any act, omission or misconduct that is injurious to the Company or an affiliate; (ii) gross negligence or willfulmisconduct in connection with the performance of duties; (iii) conviction of a criminal offense (other than minor traffic offenses); (iv) fraud, embezzlement ormisappropriation of funds or property of the Company or an affiliate; (v) material breach of any term of any employment or other services, confidentiality, intellectualproperty or noncompetition agreements, if any, between the Executive and the Company or an affiliate; (vi) the entry of an order duly issued by any regulatoryagency (including federal, state and local regulatory agencies and selfregulatory bodies) having jurisdiction over the Company or an affiliate requiring the removalof the Executive from any office held with the Company or prohibiting the Executive from participating in the business or affairs of the Company or any affiliate; or(vii) the revocation or threatened revocation of any of the Company’s or an affiliate’s government licenses, permits or approvals, which is primarily due to theExecutive’s action or inaction and such revocation or threatened revocation would be alleviated or mitigated in any material respect by the termination of theExecutive’s employment or services with the Company or an affiliate. 4.4 Voluntary Termination by Executive. The Executive may voluntarily terminate his employment for any reason and such termination shall take effect 30days after the receipt by Company of the Notice of Termination. Upon the effective date of such termination, Executive shall be entitled to (a) accrued and unpaidSalary and vacation through such termination date; and (b) all other compensation and benefits that were vested through such termination date. In the eventExecutive is terminated without notice, it shall be deemed a termination by the Company for Cause.4.5 Notice of Termination. Any termination of the employment by the Company or the Executive shall be communicated by a notice in accordance withSection 8.4 of this Agreement (the “Notice of Termination”). Such notice shall (a) indicate the specific termination provision in this Agreement relied upon and (b) ifthe termination is for Cause, the date on which the Executive’s employment is to be terminated.4.6 Severance. The Executive shall not be entitled to severance payments upon any termination provided in Section 4 herein.5. EMPLOYEE’S REPRESENTATION. The Executive represents and warrants to the Company that: (a) he is subject to no contractual, fiduciary or otherobligation which may affect the performance of his duties under this Agreement; (b) he has terminated, in accordance with their terms, any contractual obligationwhich may affect his performance under this Agreement; and (c) his employment with the Company will not require him to use or disclose proprietary or confidentialinformation of any other person or entity.26. CONFIDENTIAL INFORMATION Except as permitted or directed by the Board of Directors of the Company in writing, during the time the Executive isemployed by the Company or at any time thereafter, the Executive shall not use for his personal purposes nor divulge, furnish, or make accessible to anyone or usein any way (other than in the ordinary course of the business of the Company) any confidential or secret information or knowledge of the Company, whetherdeveloped by himself or by others. Such confidential and/or secret information encompassed by this Section 6 includes, but is not limited to, the Company’scustomer and supplier lists, business plans, software, systems, and financial, marketing, and personnel information. The Executive agrees to refrain from any acts oromissions that would reduce the value of any confidential or secret knowledge or information to the Company, both during his employment hereunder and at anytime after the termination of his employment. The Executive’s obligations of confidentiality under this Section 6 shall not apply to any knowledge or information thatis now published publicly or that subsequently becomes generally publicly known, other than as a direct or indirect result of a breach of this Agreement by theExecutive.7. NONCOMPETITION: NONSOLICITATION; INVENTIONS.7.1 NonCompetition. During the employment of the Executive under this Agreement and for a period of six (6) months after termination of suchemployment, the Executive shall not at any time compete on his own behalf, or on behalf of any other person or entity, with the Company or any of its affiliateswithin all territories in which the Company does business with respect to the business of the Company or any of its affiliates as such business shall be conductedon the date hereof or during the employment of the Executive under this Agreement. The ownership by the Executive of not more than 5% of a corporation,partnership or other enterprise shall not constitute a violation hereof.7.2 NonSolicitation. During the employment of the Executive under this Agreement and thereafter Executive shall not at any time (i) solicit or induce, onhis own behalf or on behalf of any other person or entity, any employee of the Company or any of its affiliates to leave the employ of the Company or any of itsaffiliates; or (ii) solicit or induce, on his own behalf or on behalf of any other person or entity, any customer or Prospective Customer of the Company or any of theirrespective affiliates to reduce its business with the Company or any of its affiliates. For the purposes of this Agreement, “Prospective Customer” shall mean anyindividual, corporation, trust or other business entity which has either (a) entered into a nondisclosure agreement with the Company or any Company subsidiary oraffiliate or (b) has within the preceding 12 months received a currently pending and not rejected written proposal in reasonable detail from the Company or any ofthe Company’s subsidiary or affiliate.7.3 Inventions and Patents. The Company shall be entitled to the sole benefit and exclusive ownership of any inventions or improvements in products,processes, or other things that may be made or discovered by Executive while he is in the service of the Company, and all patents for the same. During the Term,Executive shall do all acts necessary or required by the Company to give effect to this section and, following the Term, Executive shall do all acts reasonablynecessary or required by the Company to give effect to this section. In all cases, the Company shall pay all costs and fees associated with such acts by Executive.7.4 Return of Property. The Executive agrees that all property in the Executive’s possession that he obtains or is assigned in the course of his employmentwith the Company, including, without limitation, all documents, reports, manuals, memoranda, customer lists, credit cards, keys, access cards, and all other propertyrelating in any way to the business of the Company, is the exclusive property of the Company, even if the Executive authored, created, or assisted in authoring orcreating such property. The Executive shall return to the Company all such property immediately upon termination of employment or at such earlier time as theCompany may request.7.5Court Ordered Revisions.If any portion of this Section 7 is found by a court of competent jurisdiction to be invalid or unenforceable, but would be validand enforceable if modified, this Section 7 shall apply with such modifications necessary to make this Section 7 valid and enforceable. Any portion of this Section 7not required to be so modified shall remain in full force and effect and not be affected thereby.7.6 Specific Performance. The Executive acknowledges that the remedy at law for any breach of any of the provisions of Section 7 will be inadequate, andthat the Company shall be entitled, in addition to any remedy at law or in equity, to preliminary and permanent injunctive relief and specific performance.38. MISCELLANEOUS.8.1 Indemnification. The Company and each of its subsidiaries shall, to the maximum extent provided under applicable law, indemnify and hold Executiveharmless from and against any expenses, including reasonable attorney’s fees, judgments, fines, settlements and other legally permissible amounts (“Losses”),incurred in connection with any proceeding arising out of, or related to, Executive’s employment by the Company, other than any such Losses incurred as a result ofExecutive’s negligence or willful misconduct. The Company shall, or shall cause a subsidiary thereof to, advance to Executive any expenses, including attorney’sfees and costs of settlement, incurred in defending any such proceeding to the maximum extent permitted by applicable law. Such costs and expenses incurred byExecutive in defense of any such proceeding shall be paid by the Company or applicable subsidiary in advance of the final disposition of such proceeding promptlyupon receipt by the Company of (a) written request for payment; (b) appropriate documentation evidencing the incurrence, amount and nature of the costs andexpenses for which payment is being sought; and (c) an undertaking adequate under applicable law made by or on behalf of Executive to repay the amounts soadvanced if it shall ultimately be determined pursuant to any nonappealable judgment or settlement that Executive is not entitled to be indemnified by the Companyor any subsidiary thereof. The Company will provide Executive with coverage under all directors and officers liability insurance policies that it has in effect duringthe Term, with no deductible to Executive. 8.2 Applicable Law. Except as may be otherwise provided herein, this Agreement shall be governed by and construed in accordance with the laws ofChina, applied without reference to principles of conflict of laws. Any dispute arising from or in connection with this Agreement shall be submitted to ShanghaiInternational Arbitration Center (the “Center”) for arbitration under the then effective rules of the Center. The arbitration award shall be the sole, binding, exclusiveand final remedy for resolving any dispute between the parties.8.3 Amendments. This Agreement may not be amended or modified otherwise than by a written agreement executed by the parties hereto or their respectivesuccessors or legal representatives.8.4 Notices. All notices and other communications hereunder shall be in writing and shall be given by handdelivery to the other party, by an internationalmail courier, or by registered or certified mail, return receipt requested, postage prepaid, addressed as follows:If to the Executive:Jie Yu________________________________________If to the Company:______________________________________Or to such other address as either party shall have furnished to the other in writing in accordance herewith. Notices and communications shall be effective whendelivered to the addressee.8.5 Withholding. The Company may withhold from any amounts payable under the Agreement, such federal, state and local income, unemployment, socialsecurity and similar employment related taxes and similar employment related withholdings as shall be required to be withheld pursuant to any applicable law orregulation.8.6 Severability. The invalidity or unenforceability of any provision of this Agreement shall not affect the validity or enforceability of any other provision ofthis Agreement and any such provision which is not valid or enforceable in whole shall be enforced to the maximum extent permitted by law.48.7 Captions. The captions of this Agreement are not part of the provisions and shall have no force or effect.8.8 Entire Agreement. This Agreement contains the entire agreement among the parties concerning the subject matter hereof and supersedes all prioragreements, understandings, discussions, negotiations and undertakings, whether written or oral, between the parties with respect thereto.8.9 Survival. The respective rights and obligations of the parties hereunder shall survive any termination of this Agreement or the Executive’s employmenthereunder to the extent necessary to the intended preservation of such rights and obligations.8.10 Waiver. Either Party's failure to enforce any provision or provisions of this Agreement shall not in any way be construed as a waiver of any suchprovision or provisions, or prevent that party thereafter from enforcing each and every other provision of this Agreement.8.11 Successors. This Agreement is personal to Executive and, without the prior express written consent of the Company, shall not be assignable byExecutive. This Agreement shall inure to the benefit of and be enforceable by Executive’s estate, heirs, beneficiaries, and/or legal representatives. This Agreementshall inure to the benefit of and be binding upon the Company and its successors and assigns.8.12 Joint Efforts/Counterparts. Preparation of this Agreement shall be deemed to be the joint effort of the parties hereto and shall not be construed moreseverely against any party. This Agreement may be signed in two or more counterparts, each of which shall be deemed an original and all of which together shallconstitute one and the same instrument.8.13 Representation by Counsel. Each Party hereby represents that it has had the opportunity to be represented by legal counsel of its choice inconnection with the negotiation and execution of this Agreement.IN WITNESS WHEREOF, the parties have executed this Agreement as of the day and year first above written.EXECUTIVE:LUOKUNG TECHNOLOGY CORP./s/ Jie Yu/s/ Xuesong SongJie YuXuesong SongChief Executive Officer5EX12.1 13 f20f2017ex121_luokung.htm CERTIFICATIONExhibit 12.1Certification by the Chief Executive OfficerPursuant to Section 302 of the SarbanesOxley Act of 2002I, Xuesong Song, the Chief Executive Officer of Luokung Technology Corp. (the “Company”), certify that:1.I have reviewed this transition report on Form 20F of the Company;2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statementsmade, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financialcondition, results of operations and cash flows of the Company as of, and for, the periods presented in this report;4.The Company’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange ActRules 13a15(e) and 15d15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a15(f) and 15d15(f)) for the Company andhave:(a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure thatmaterial information relating to the Company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during theperiod in which this report is being prepared;(b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, toprovide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance withgenerally accepted accounting principles;(c)Evaluated the effectiveness of the Company’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of thedisclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and(d)Disclosed in this report any change in the Company’s internal control over financial reporting that occurred during the period covered by the transition reportthat has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting; and5.The Company’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Company’sauditors and the audit committee of the Company’s board of directors (or persons performing the equivalent functions):(a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely toadversely affect the Company’s ability to record, process, summarize and report financial information; and(b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the Company’s internal control over financialreporting.Date: October 12, 2018By:/s/ Xuesong SongXuesong SongChief Executive Officer(principal executive officer)EX12.2 14 f20f2017ex122_luokung.htm CERTIFICATIONExhibit 12.2Certification by the Chief Financial OfficerPursuant to Section 302 of the SarbanesOxley Act of 2002I, Jie Yu, the Chief Financial Officer of Luokung Technology Corp. (the “Company”), certify that:1.I have reviewed this transition report on Form 20F of the Company;2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statementsmade, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financialcondition, results of operations and cash flows of the Company as of, and for, the periods presented in this report;4.The Company’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange ActRules 13a15(e) and 15d15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a15(f) and 15d15(f)) for the Company andhave:(a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure thatmaterial information relating to the Company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during theperiod in which this report is being prepared;(b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, toprovide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance withgenerally accepted accounting principles;(c)Evaluated the effectiveness of the Company’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of thedisclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and(d)Disclosed in this report any change in the Company’s internal control over financial reporting that occurred during the period covered by the transition reportthat has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting; and5.The Company’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Company’sauditors and the audit committee of the Company’s board of directors (or persons performing the equivalent functions):(a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely toadversely affect the Company’s ability to record, process, summarize and report financial information; and(b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the Company’s internal control over financialreporting.Date: October 12, 2018By:/s/ Jie YuJie YuChief Financial Officer(principal financial officer and principal accounting officer)EX13.1 15 f20f2017ex131_luokung.htm CERTIFICATIONExhibit 13.1Certification by the Chief Executive OfficerPursuant to Section 906 of the SarbanesOxley Act of 2002In connection with the Transition report on Form 20F of Luokung Technology Corp. (the “Company”) for the year ended December 31, 2017 as filed withthe Securities and Exchange Commission on the date hereof (the “Report”), I, Xuesong Song, Chairman and Chief Executive Officer of the Company, certify,pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the SarbanesOxley Act of 2002, that to my knowledge:(1)The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and(2)The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.Date: October 12, 2018By:/s/ Xuesong SongXuesong SongChief Executive Officer(principal executive officer)EX13.2 16 f20f2017ex132_luokung.htm CERTIFICATIONExhibit 13.2Certification by the Chief Financial OfficerPursuant to Section 906 of the SarbanesOxley Act of 2002In connection with the Transition report on Form 20F of Luokung Technology Corp. (the “Company”) for the year ended December 31, 2017 as filed withthe Securities and Exchange Commission on the date hereof (the “Report”), I, Jie Yu, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. Section1350, as adopted pursuant to Section 906 of the SarbanesOxley Act of 2002, that to my knowledge:(1)The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and(2)The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.Date: October 12, 2018By:/s/ Jie YuJie YuChief Financial Officer(principal financial officer and principal accounting officer)地址：Address:.b)陈蔚力Chen Weili地址：Address:c)王平Wang Ping地址：Address:17秘密文件 Strictly Confidentiald)刘东来Liu Donglai地址：Address:丙方：北京中传视讯科技有限公司Party C: Beijing Mobile Vision Technology Co., Ltd.地址：北京市朝阳区光华路9号SOHO3QLAB32Address: LAB32, SOHO3Q, No 9, Guanghua Road, Chaoyang District, Beijing.收件人：宋雪松Attn.: Song Xuesong14.3任何一方可按本条规定随时给其他各方发出通知来改变其接收通知的地址。Any Party may at any time change its address for notices by a notice delivered to the other Parties in accordance with the terms hereof.15.分割性Severability如果本协议有任何一条或多条规定根据任何法律或法规在任何方面被裁定为无效、不合法或不可执行，本协议其余规定的有效性、合法性或可执行性不应因此在任何方面受到影响或损害。各方应通过诚意磋商，争取以法律许可以及各方期望的最大限度内有效的规定取代那些无效、不合法或不可执行的规定，而该等有效的规定所产生的经济效果应尽可能与那些无效、不合法或不能强制执行的规定所产生的经济效果相似。In the event that one or several of the provisions of this Contract are found to be invalid, illegal or unenforceable in any aspect in accordance with any laws orregulations, the validity, legality or enforceability of the remaining provisions of this Contract shall not be affected or compromised in any respect. The Partiesshall strive in good faith to replace such invalid, illegal or unenforceable provisions with effective provisions that accomplish to the greatest extent permittedby law and the intentions of the Parties, and the economic effect of such effective provisions shall be as close as possible to the economic effect of thoseinvalid, illegal or unenforceable provisions.18秘密文件 Strictly Confidential16.附件Attachments本协议所列附件，为本协议不可分割的组成部分。The attachments set forth herein shall be an integral part of this Agreement.17.生效Effectiveness17.1本协议的任何修改、补充或变更，均须采用书面形式，经各方签字或盖章并按规定办理政府登记（如需）后生效。Any amendments, changes and supplements to this Agreement shall be in writing and shall become effective upon completion of the governmentalfiling procedures (if applicable) after the affixation of the signatures or seals of the Parties.17.2本协议以中文和英文书就，一式六份，质权人、所有出质人和丙方各持一份，具有同等效力；中英文版本如有冲突，应以中文版为准。This Agreement is written in Chinese and English in six copies. Each Pledgors, Pledgee and Party C shall hold one copy respectively. Each copy of thisAgreement shall have equal validity. In case there is any conflict between the Chinese version and the English version, the Chinese version shall prevail.本页其余部分刻意留为空白The Remainder of this page is intentionally left blank19秘密文件 Strictly Confidential有鉴于此，各方已使得经其授权的代表于文首所述日期签署了本股权质押协议并即生效，以昭信守。IN WITNESS WHEREOF, the Parties have caused their authorized representatives to execute this Equity Interest Pledge Agreement as of the date first abovewritten.甲方：中传天下信息科技（深圳）有限公司（盖章）Party A: Zhongchuan Tianxia Information Technology (Shenzhen) Co., Ltd. (Seal)签字：By:/s/ Hong Ting姓名：洪婷Name: Hong Ting职务：总经理Title: General Manager秘密文件 Strictly Confidential有鉴于此，各方已使得经其授权的代表于文首所述日期签署了本股权质押协议并即生效，以昭信守。IN WITNESS WHEREOF, the Parties have caused their authorized representatives to execute this Equity Interest Pledge Agreement as of the date first abovewritten.乙方：Party B:宋雪松Song Xuesong签署：By:/s/ Song Xuesong秘密文件 Strictly Confidential有鉴于此，各方已使得经其授权的代表于文首所述日期签署了本股权质押协议并即生效，以昭信守。IN WITNESS WHEREOF, the Parties have caused their authorized representatives to execute this Equity Interest Pledge Agreement as of the date first abovewritten.乙方：Party B:陈蔚力Chen Weili签字：By:/s/ Chen Weili秘密文件 Strictly Confidential有鉴于此，各方已使得经其授权的代表于文首所述日期签署了本股权质押协议并即生效，以昭信守。IN WITNESS WHEREOF, the Parties have caused their authorized representatives to execute this Equity Interest Pledge Agreement as of the date first abovewritten.乙方：Party B:王平Wang Ping签字：By:/s/ Wang Ping秘密文件 Strictly Confidential有鉴于此，各方已使得经其授权的代表于文首所述日期签署了本股权质押协议并即生效，以昭信守。IN WITNESS WHEREOF, the Parties have caused their authorized representatives to execute this Equity Interest Pledge Agreement as of the date first abovewritten.乙方：Party B:刘东来Liu Donglai签字：By:/s/ Liu Donglai秘密文件 Strictly Confidential有鉴于此，各方已使得经其授权的代表于文首所述日期签署了本股权质押协议并即生效，以昭信守。IN WITNESS WHEREOF, the Parties have caused their authorized representatives to execute this Equity Interest Pledge Agreement as of the date first abovewritten.丙方：北京中传视讯科技有限公司（盖章）Party B: Beijing Mobile Vision Technology Co., Ltd. (Seal)签字：By:/s/ Song Xuesong姓名：宋雪松Name: Song Xuesong职务：董事长Title: Chairman of the Board秘密文件 Strictly Confidential附件：Attachments:1.北京中传视讯科技有限公司股东名册；Shareholders' Register of Beijing Mobile Vision Technology Co., Ltd.;2.北京中传视讯科技有限公司的出资证明书；The Capital Contribution Certificate of Beijing Mobile Vision Technology Co., Ltd.;3.独家业务合作协议。Exclusive Business Cooperation Agreement.秘密文件 Strictly ConfidentialEX4.20 6 f20f2017ex420_luokung.htm POWER OF ATTORNEY BY WEILI CHEN, DATED AUGUST 31, 2015Exhibit 4.20授权委托书Power of Attorney本人陈蔚力，持有中华人民共和国身份证（号码：*************** 516），通讯地址为广东省，系拥有北京中传视讯科技有限公司（“中传视讯”）14.0848%股权（“相关股权”）的股东，就相关股权，特此不可撤销地授权中传天下信息科技（深圳）有限公司（“深圳中传天下”）在本授权委托书的有效期内行使如下权利：The undersigned, Chen Weili, a person with the PRC identification card number of ***************516, with address at: Guangdong, and a holder of14.0848% of the entire registered capital ("Shares") in Beijing Mobile Vision Technology Co., Ltd. ("Mobile Vision"), hereby irrevocably authorize ZhongchuanTianxia Information Technology (Shenzhen) Co., Ltd. ("WFOE") to exercise the following rights relating to Shares during the term of this Power of Attorney:授权深圳中传天下作为本人唯一的排他的代理人就有关相关股权的事宜全权代表本人行使包括但不限于如下的权利：1）参加中传视讯的股东会；2）行使按照法律和中传视讯章程规定本人所享有的全部股东权利和股东表决权，包括但不限于出售或转让或质押或处置相关股权的全部或任何一部分；以及3）作为本人的授权代表指定和任命中传视讯的法定代表人、董事和/或执行董事、监事、经理以及其他高级管理人员等。但中传视讯利用该等授权做出违反中华人民共和国法律的决定无效。WFOE is hereby authorized to act on behalf of myself as my exclusive agent and attorney with respect to all matters concerning My Shareholding, includingwithout limitation: 1) attending shareholders' meetings of Mobile Vision; 2) exercising all the shareholder's rights and shareholder's voting rights I am entitled tounder the laws of China and Articles of Association of Mobile Vision, including but not limited to the sale or transfer or pledge or disposition of My Shareholding inpart or in whole; and 3) designating and appointing on behalf of myself the legal representative, director and/or executive director, supervisor, manager and othersenior management members of Mobile Vision. However, the decision made by Mobile Vision taking advantage of the power of attorney which is against the PRClaws shall be null and void.1深圳中传天下将有权在授权范围内代表本人签署独家购买权协议（本人应要求作为协议方）中约定的转让协议，如期履行本人作为协议一方的与本授权委托书同日签署的股权质押协议和独家购买权协议，该权利的行使将不对本授权形成任何限制。Without limiting the generality of the powers granted hereunder, WFOE shall have the power and authority under this Power of Attorney to execute theTransfer Contracts stipulated in Exclusive Option Agreement, to which I am required to be a party, on behalf of myself, and to effect the terms of the Share PledgeAgreement and Exclusive Option Agreement, both dated the date hereof, to which I am a party.深圳中传天下就相关股权的一切行为均视为本人的行为，签署的一切文件均视为本人签署，本人会予以承认。All the actions associated with Shares conducted by WFOE shall be deemed as my own actions, and all the documents related to Shares executed by WFOEshall be deemed to be executed by me. I hereby acknowledge and ratify those actions and/or documents by the WFOE.深圳中传天下有转委托权，可以就上述事项的办理自行再委托其他人或单位而不必事先通知本人或获得本人的同意。WFOE is entitled to reauthorize or assign its rights related to the aforesaid matters to any other person or entity at its own discretion and without giving priornotice to me or obtaining my consent.在本人为中传视讯的股东期间，本授权委托书不可撤销并持续有效，自授权委托书签署之日起算。This Power of Attorney is coupled with an interest and shall be irrevocable and continuously valid from the date of execution of this Power of Attorney, solong as I am a shareholder of Mobile Vision.本授权委托书期间，本人特此放弃已经通过本授权委托书授权给深圳中传天下的与相关股权有关的所有权利，不再自行行使该等权利。During the term of this Power of Attorney, I hereby waive all the rights associated with Shares, which have been authorized to WFOE through this Power ofAttorney, and shall not exercise such rights by myself.本授权委托书以中文和英文书就，中英文版本如有冲突，应以中文版为准。This Power of Attorney is written in Chinese and English; in case there is any conflict between the Chinese version and the English version, the Chineseversion shall prevail.陈蔚力Chen Weili签署：By:日期：年月日Date:2EX4.21 7 f20f2017ex421_luokung.htm POWER OF ATTORNEY BY PING WANG, DATED AUGUST 31, 2015Exhibit 4.21授权委托书Power of Attorney本人王平，持有中华人民共和国身份证（号码：***************01x），通讯地址为广东省，系拥有北京中传视讯科技有限公司（“中传视讯”）19.9872%股权（“相关股权”）的股东，就相关股权，特此不可撤销地授权中传天下信息科技（深圳）有限公司（“深圳中传天下”）在本授权委托书的有效期内行使如下权利：The undersigned, Wang Ping, a person with the PRC identification card number of ***************01x, with address at Guangdong, and a holder of19.9872% of the entire registered capital (“Shares”) in Beijing Mobile Vision Technology Co., Ltd. (“Mobile Vision”), hereby irrevocably authorize ZhongchuanTianxia Information Technology (Shenzhen) Co., Ltd. (“WFOE”) to exercise the following rights relating to Shares during the term of this Power of Attorney:授权深圳中传天下作为本人唯一的排他的代理人就有关相关股权的事宜全权代表本人行使包括但不限于如下的权利：1）参加中传视讯的股东会；2）行使按照法律和中传视讯章程规定本人所享有的全部股东权利和股东表决权，包括但不限于出售或转让或质押或处置相关股权的全部或任何一部分；以及3）作为本人的授权代表指定和任命中传视讯的法定代表人、董事和/或执行董事、监事、经理以及其他高级管理人员等。但中传视讯利用该等授权做出违反中华人民共和国法律的决定无效。WFOE is hereby authorized to act on behalf of myself as my exclusive agent and attorney with respect to all matters concerning My Shareholding, includingwithout limitation: 1) attending shareholders’ meetings of Mobile Vision; 2) exercising all the shareholder’s rights and shareholder’s voting rights I am entitled tounder the laws of China and Articles of Association of Mobile Vision, including but not limited to the sale or transfer or pledge or disposition of My Shareholding inpart or in whole; and 3) designating and appointing on behalf of myself the legal representative, director and/or executive director, supervisor, manager and othersenior management members of Mobile Vision. However, the decision made by Mobile Vision taking advantage of the power of attorney which is against the PRClaws shall be null and void.1深圳中传天下将有权在授权范围内代表本人签署独家购买权协议（本人应要求作为协议方）中约定的转让协议，如期履行本人作为协议一方的与本授权委托书同日签署的股权质押协议和独家购买权协议，该权利的行使将不对本授权形成任何限制。Without limiting the generality of the powers granted hereunder, WFOE shall have the power and authority under this Power of Attorney to execute theTransfer Contracts stipulated in Exclusive Option Agreement, to which I am required to be a party, on behalf of myself, and to effect the terms of the Share PledgeAgreement and Exclusive Option Agreement, both dated the date hereof, to which I am a party.深圳中传天下就相关股权的一切行为均视为本人的行为，签署的一切文件均视为本人签署，本人会予以承认。All the actions associated with Shares conducted by WFOE shall be deemed as my own actions, and all the documents related to Shares executed by WFOEshall be deemed to be executed by me. I hereby acknowledge and ratify those actions and/or documents by the WFOE.深圳中传天下有转委托权，可以就上述事项的办理自行再委托其他人或单位而不必事先通知本人或获得本人的同意。WFOE is entitled to reauthorize or assign its rights related to the aforesaid matters to any other person or entity at its own discretion and without giving priornotice to me or obtaining my consent.在本人为中传视讯的股东期间，本授权委托书不可撤销并持续有效，自授权委托书签署之日起算。This Power of Attorney is coupled with an interest and shall be irrevocable and continuously valid from the date of execution of this Power of Attorney, solong as I am a shareholder of Mobile Vision.本授权委托书期间，本人特此放弃已经通过本授权委托书授权给深圳中传天下的与相关股权有关的所有权利，不再自行行使该等权利。During the term of this Power of Attorney, I hereby waive all the rights associated with Shares, which have been authorized to WFOE through this Power ofAttorney, and shall not exercise such rights by myself.本授权委托书以中文和英文书就，中英文版本如有冲突，应以中文版为准。This Power of Attorney is written in Chinese and English; in case there is any conflict between the Chinese version and the English version, the Chineseversion shall prevail.王平Wang Ping签署：By:日期：年月日Date:2EX4.22 8 f20f2017ex422_luokung.htm POWER OF ATTORNEY BY DONGLAI LIU, DATED AUGUST 31, 2015Exhibit 4.22授权委托书Power of Attorney本人刘东来，持有中华人民共和国身份证（号码：***************912），通讯地址为: ，系拥有北京中传视讯科技有限公司（“中传视讯”）4.1035%股权（“相关股权”）的股东，就相关股权，特此不可撤销地授权中传天下信息科技（深圳）有限公司（“深圳中传天下”）在本授权委托书的有效期内行使如下权利：The undersigned, Liu Donglai, a person with the PRC identification card number of ***************912, with address at: , and a holder of 4.1035% of theentire registered capital (“Shares”) in Beijing Mobile Vision Technology Co., Ltd. (“Mobile Vision”), hereby irrevocably authorize Zhongchuan Tianxia InformationTechnology (Shenzhen) Co., Ltd. (“WFOE”) to exercise the following rights relating to Shares during the term of this Power of Attorney:授权深圳中传天下作为本人唯一的排他的代理人就有关相关股权的事宜全权代表本人行使包括但不限于如下的权利：1）参加中传视讯的股东会；2）行使按照法律和中传视讯章程规定本人所享有的全部股东权利和股东表决权，包括但不限于出售或转让或质押或处置相关股权的全部或任何一部分；以及3）作为本人的授权代表指定和任命中传视讯的法定代表人、董事和/或执行董事、监事、经理以及其他高级管理人员等。但中传视讯利用该等授权做出违反中华人民共和国法律的决定无效。WFOE is hereby authorized to act on behalf of myself as my exclusive agent and attorney with respect to all matters concerning My Shareholding, includingwithout limitation: 1) attending shareholders’ meetings of Mobile Vision; 2) exercising all the shareholder’s rights and shareholder’s voting rights I am entitled tounder the laws of China and Articles of Association of Mobile Vision, including but not limited to the sale or transfer or pledge or disposition of My Shareholding inpart or in whole; and 3) designating and appointing on behalf of myself the legal representative, director and/or executive director, supervisor, manager and othersenior management members of Mobile Vision. However, the decision made by Mobile Vision taking advantage of the power of attorney which is against the PRClaws shall be null and void.1深圳中传天下将有权在授权范围内代表本人签署独家购买权协议（本人应要求作为协议方）中约定的转让协议，如期履行本人作为协议一方的与本授权委托书同日签署的股权质押协议和独家购买权协议，该权利的行使将不对本授权形成任何限制。Without limiting the generality of the powers granted hereunder, WFOE shall have the power and authority under this Power of Attorney to execute theTransfer Contracts stipulated in Exclusive Option Agreement, to which I am required to be a party, on behalf of myself, and to effect the terms of the Share PledgeAgreement and Exclusive Option Agreement, both dated the date hereof, to which I am a party.深圳中传天下就相关股权的一切行为均视为本人的行为，签署的一切文件均视为本人签署，本人会予以承认。All the actions associated with Shares conducted by WFOE shall be deemed as my own actions, and all the documents related to Shares executed by WFOEshall be deemed to be executed by me. I hereby acknowledge and ratify those actions and/or documents by the WFOE.深圳中传天下有转委托权，可以就上述事项的办理自行再委托其他人或单位而不必事先通知本人或获得本人的同意。WFOE is entitled to reauthorize or assign its rights related to the aforesaid matters to any other person or entity at its own discretion and without giving priornotice to me or obtaining my consent.在本人为中传视讯的股东期间，本授权委托书不可撤销并持续有效，自授权委托书签署之日起算。This Power of Attorney is coupled with an interest and shall be irrevocable and continuously valid from the date of execution of this Power of Attorney, solong as I am a shareholder of Mobile Vision.本授权委托书期间，本人特此放弃已经通过本授权委托书授权给深圳中传天下的与相关股权有关的所有权利，不再自行行使该等权利。During the term of this Power of Attorney, I hereby waive all the rights associated with Shares, which have been authorized to WFOE through this Power ofAttorney, and shall not exercise such rights by myself.本授权委托书以中文和英文书就，中英文版本如有冲突，应以中文版为准。This Power of Attorney is written in Chinese and English; in case there is any conflict between the Chinese version and the English version, the Chineseversion shall prevail.刘东来Liu Donglai签署：By:日期：年月日Date:2EX4.23 9 f20f2017ex423_luokung.htm POWER OF ATTORNEY BY XUESONG SONG, DATED AUGUST 31, 2015Exhibit 4.23授权委托书Power of Attorney本人宋雪松，持有中华人民共和国身份证（号码：***************417），通讯地址为，系拥有北京中传视讯科技有限公司（“中传视讯”）61.8245%股权（“相关股权”）的股东，就相关股权，特此不可撤销地授权中传天下信息科技（深圳）有限公司（“深圳中传天下”）在本授权委托书的有效期内行使如下权利：The undersigned, Song Xuesong, a person with the PRC identification card number of ***************417, with address at , and a holder of 61.8245% ofthe entire registered capital (“Shares”) in Beijing Mobile Vision Technology Co., Ltd. (“Mobile Vision”), hereby irrevocably authorize Zhongchuan TianxiaInformation Technology (Shenzhen) Co., Ltd. (“WFOE”) to exercise the following rights relating to Shares during the term of this Power of Attorney:授权深圳中传天下作为本人唯一的排他的代理人就有关相关股权的事宜全权代表本人行使包括但不限于如下的权利：1）参加中传视讯的股东会；2）行使按照法律和中传视讯章程规定本人所享有的全部股东权利和股东表决权，包括但不限于出售或转让或质押或处置相关股权的全部或任何一部分；以及3）作为本人的授权代表指定和任命中传视讯的法定代表人、董事和/或执行董事、监事、经理以及其他高级管理人员等。但中传视讯利用该等授权做出违反中华人民共和国法律的决定无效。WFOE is hereby authorized to act on behalf of myself as my exclusive agent and attorney with respect to all matters concerning My Shareholding, includingwithout limitation: 1) attending shareholders’ meetings of Mobile Vision; 2) exercising all the shareholder’s rights and shareholder’s voting rights I am entitled tounder the laws of China and Articles of Association of Mobile Vision, including but not limited to the sale or transfer or pledge or disposition of My Shareholding inpart or in whole; and 3) designating and appointing on behalf of myself the legal representative, director and/or executive director, supervisor, manager and othersenior management members of Mobile Vision. However, the decision made by Mobile Vision taking advantage of the power of attorney which is against the PRClaws shall be null and void.1深圳中传天下将有权在授权范围内代表本人签署独家购买权协议（本人应要求作为协议方）中约定的转让协议，如期履行本人作为协议一方的与本授权委托书同日签署的股权质押协议和独家购买权协议，该权利的行使将不对本授权形成任何限制。Without limiting the generality of the powers granted hereunder, WFOE shall have the power and authority under this Power of Attorney to execute theTransfer Contracts stipulated in Exclusive Option Agreement, to which I am required to be a party, on behalf of myself, and to effect the terms of the Share PledgeAgreement and Exclusive Option Agreement, both dated the date hereof, to which I am a party.深圳中传天下就相关股权的一切行为均视为本人的行为，签署的一切文件均视为本人签署，本人会予以承认。All the actions associated with Shares conducted by WFOE shall be deemed as my own actions, and all the documents related to Shares executed by WFOEshall be deemed to be executed by me. I hereby acknowledge and ratify those actions and/or documents by the WFOE.深圳中传天下有转委托权，可以就上述事项的办理自行再委托其他人或单位而不必事先通知本人或获得本人的同意。WFOE is entitled to reauthorize or assign its rights related to the aforesaid matters to any other person or entity at its own discretion and without giving priornotice to me or obtaining my consent.在本人为中传视讯的股东期间，本授权委托书不可撤销并持续有效，自授权委托书签署之日起算。This Power of Attorney is coupled with an interest and shall be irrevocable and continuously valid from the date of execution of this Power of Attorney, solong as I am a shareholder of Mobile Vision.本授权委托书期间，本人特此放弃已经通过本授权委托书授权给深圳中传天下的与相关股权有关的所有权利，不再自行行使该等权利。During the term of this Power of Attorney, I hereby waive all the rights associated with Shares, which have been authorized to WFOE through this Power ofAttorney, and shall not exercise such rights by myself.本授权委托书以中文和英文书就，中英文版本如有冲突，应以中文版为准。This Power of Attorney is written in Chinese and English; in case there is any conflict between the Chinese version and the English version, the Chineseversion shall prevail.宋雪松Song Xuesong签署：By:日期：年月日Date:2EX8.1 10 f20f2017ex81_luokung.htm LIST OF SUBSIDIARIES AND CONSOLIDATED VARIABLE INTEREST ENTITIESExhibit 8.1List of Subsidiaries of the CompanyName of EntityJurisdiction of Incorporation/OrganizationLK Technology Ltd.British Virgin IslandsTopsky Infotech Holdings Pte Ltd.SingaporeSuperengine Holdings LimitedBritish Virgin IslandsMMB LimitedHong KongMobile Media (China Limited)Hong KongZhong Chuan Tian Xia Information and Technology (Beijing) LimitedBeijing, PRCZhong Chuan Xia Information and Technology (Shenzhen) LimitedShenzhen, PRCBeijing Zhong Chuan Shi Xun Technology Limited (VIE Entity)Beijing, PRCJiangsu Zhong Chuan Rui You Information and Technology Limited (VIE Entity)Jiangsu, PRCHuoerguosi Luokuang Information and Technology Limited (VIE Entity)Huoerguosi, PRCShenzhen Jiu Zhou Shi Dai Digital Technology LimitedShenzhen, PRCEX10.1 11 f20f2017ex101_luokung.htm EMPLOYMENT AGREEMENT, DATED AUGUST 19, 2018, BETWEEN LUOKUNG TECHNOLOGY CORP. AND XUESONGSONGExhibit 10.1EMPLOYMENT AGREEMENTThis EMPLOYMENT AGREEMENT (the “Agreement”) is made and entered into as of this 19 day of August, 2018 (the “Effective Date”), by and between LuokungTechnology Corp., a British Virgin Islands corporation (the “Company”) and Xuesong Song (the “Executive”), a Chinese citizen.WITNESSETH:WHEREAS, the parties desire to enter into this Agreement setting forth the terms and conditions of the employment relationship between the Executiveand the Company.NOW, THEREFORE, in consideration of the foregoing premises and the mutual covenants and agreements contained herein, the parties hereto agree asfollows:1. EMPLOYMENT.1.1 Agreement to Employ. The Company hereby agrees to employ Executive, and Executive hereby agrees to serve, subject to the provisions of thisAgreement, as an officer and employee of the Company.1.2 Duties and Schedule. Executive shall serve as the Company’s Chief Executive Officer (“CEO”). The responsibilities of the Executive shall be subject tothe bylaws of the Company and determined by the Board of Directors of the Company (the “Board”). The Executive shall report directly to the Board and shall havesuch responsibilities as designated by the Board of the Company to the extent that such responsibilities are not inconsistent with all applicable laws, regulationsand rules. Executive shall devote his best efforts and all of his business time to his position with the Company during the Term.2. TERM OF EMPLOYMENT. Unless Executive’s employment shall sooner terminate pursuant to Section 4, the Company shall employ Executive for a fouryear term commencing on the Effective Date (the “Term”), which Term shall be renewable upon mutual agreement of the Company and the Executive, as approved bythe Board.3. COMPENSATION.3.1 Salary. Executive’s salary during the Term shall be $Nil.3.2 Bonus. At the sole discretion of the Board, or any committee duly designated by the Board and authorized to act thereto, the Executive shall be eligiblefor an annual cash bonus.3.3 Vacation. Executive shall be entitled to 8 days of paid vacation per year. In the event that Executive remains employed by the Company for 3 years ormore, Executive shall be entitled to 12 days of paid vacation.3.4 Business Expenses. Executive shall be reimbursed by the Company for all ordinary and necessary expenses incurred by Executive; provided that theyare incurred and approved in writing in accordance with the Company’s expense policy.3.5 Benefits. During the Term, Executive shall be allowed to participate, on the same basis generally as other employees of the Company, in all generalemployee benefit plans and programs, including improvements or modifications of the same, which may exist as of the Effective Date or thereafter and which aremade available by the Company to all or substantially all of its employees. Such benefits, plans, and programs may include, without limitation, any health, and dentalinsurance or 401K programs, if and when instituted. Any benefit plan currently existing or instituted by the Company after the Effective Date may be altered, changeor discontinued by the Company at its sole discretion and at any time without obligation of any nature to Executive. Except as specifically provided herein, nothingin this Agreement is to be construed or interpreted to increase or alter in any way the rights, participation, coverage, or benefits under such benefit plans orprograms to other than those provided to other employees pursuant to the terms and conditions of such benefit plans and programs. 14. TERMINATION.4.1 Death. This Agreement shall terminate immediately upon the death of Executive, and Executive’s estate or Executive’s legal representative, as the casemay be, shall be entitled to Executive’s accrued and unpaid Salary as of the date of Executive’s death, plus all other compensation and benefits that were vestedthrough the date of Executive’s death.4.2 Disability. In the event of Executive’s Disability, this Agreement shall terminate and Executive shall be entitled to (a) accrued and unpaid Salary andvacation through the first date that a Disability is determined; and (b) all other compensation and benefits that were vested through the first date that a Disabilityhas been determined. “Disability” means the good faith determination of the Board that Executive has become so physically or mentally incapacitated or disabled asto be unable to satisfactorily perform his duties hereunder for a period of ninety (90) consecutive calendar days or for one hundred twenty (120) days in any threehundred sixty (360) day period, such determination based upon a certificate as to such physical or mental disability issued by a licensed physician and/orpsychiatrist (as the case may be) mutually agreed upon by Executive and the Company.4.3 Termination by Company for Cause. The Company may terminate the Executive for Cause and such termination shall take effect upon the receipt byExecutive of the Notice of Termination. Upon the effective date of the termination for Cause, Executive shall be solely entitled to accrued and unpaid Salary throughsuch effective date. “Cause” means: (i) engaging in any act, omission or misconduct that is injurious to the Company or an affiliate; (ii) gross negligence or willfulmisconduct in connection with the performance of duties; (iii) conviction of a criminal offense (other than minor traffic offenses); (iv) fraud, embezzlement ormisappropriation of funds or property of the Company or an affiliate; (v) material breach of any term of any employment or other services, confidentiality, intellectualproperty or noncompetition agreements, if any, between the Executive and the Company or an affiliate; (vi) the entry of an order duly issued by any regulatoryagency (including federal, state and local regulatory agencies and selfregulatory bodies) having jurisdiction over the Company or an affiliate requiring the removalof the Executive from any office held with the Company or prohibiting the Executive from participating in the business or affairs of the Company or any affiliate; or(vii) the revocation or threatened revocation of any of the Company’s or an affiliate’s government licenses, permits or approvals, which is primarily due to theExecutive’s action or inaction and such revocation or threatened revocation would be alleviated or mitigated in any material respect by the termination of theExecutive’s employment or services with the Company or an affiliate. 4.4 Voluntary Termination by Executive. The Executive may voluntarily terminate his employment for any reason and such termination shall take effect 30days after the receipt by Company of the Notice of Termination. Upon the effective date of such termination, Executive shall be entitled to (a) accrued and unpaidSalary and vacation through such termination date; and (b) all other compensation and benefits that were vested through such termination date. In the eventExecutive is terminated without notice, it shall be deemed a termination by the Company for Cause.4.5 Notice of Termination. Any termination of the employment by the Company or the Executive shall be communicated by a notice in accordance withSection 8.4 of this Agreement (the “Notice of Termination”). Such notice shall (a) indicate the specific termination provision in this Agreement relied upon and (b) ifthe termination is for Cause, the date on which the Executive’s employment is to be terminated.4.6 Severance. The Executive shall not be entitled to severance payments upon any termination provided in Section 4 herein.5. EMPLOYEE’S REPRESENTATION. The Executive represents and warrants to the Company that: (a) he is subject to no contractual, fiduciary or otherobligation which may affect the performance of his duties under this Agreement; (b) he has terminated, in accordance with their terms, any contractual obligationwhich may affect his performance under this Agreement; and (c) his employment with the Company will not require him to use or disclose proprietary or confidentialinformation of any other person or entity.26. CONFIDENTIAL INFORMATION Except as permitted or directed by the Board of Directors of the Company in writing, during the time the Executive isemployed by the Company or at any time thereafter, the Executive shall not use for his personal purposes nor divulge, furnish, or make accessible to anyone or usein any way (other than in the ordinary course of the business of the Company) any confidential or secret information or knowledge of the Company, whetherdeveloped by himself or by others. Such confidential and/or secret information encompassed by this Section 6 includes, but is not limited to, the Company’scustomer and supplier lists, business plans, software, systems, and financial, marketing, and personnel information. The Executive agrees to refrain from any acts oromissions that would reduce the value of any confidential or secret knowledge or information to the Company, both during his employment hereunder and at anytime after the termination of his employment. The Executive’s obligations of confidentiality under this Section 6 shall not apply to any knowledge or information thatis now published publicly or that subsequently becomes generally publicly known, other than as a direct or indirect result of a breach of this Agreement by theExecutive.7. NONCOMPETITION: NONSOLICITATION; INVENTIONS.7.1 NonCompetition. During the employment of the Executive under this Agreement and for a period of six (6) months after termination of suchemployment, the Executive shall not at any time compete on his own behalf, or on behalf of any other person or entity, with the Company or any of its affiliateswithin all territories in which the Company does business with respect to the business of the Company or any of its affiliates as such business shall be conductedon the date hereof or during the employment of the Executive under this Agreement. The ownership by the Executive of not more than 5% of a corporation,partnership or other enterprise shall not constitute a violation hereof.7.2 NonSolicitation. During the employment of the Executive under this Agreement and thereafter Executive shall not at any time (i) solicit or induce, onhis own behalf or on behalf of any other person or entity, any employee of the Company or any of its affiliates to leave the employ of the Company or any of itsaffiliates; or (ii) solicit or induce, on his own behalf or on behalf of any other person or entity, any customer or Prospective Customer of the Company or any of theirrespective affiliates to reduce its business with the Company or any of its affiliates. For the purposes of this Agreement, “Prospective Customer” shall mean anyindividual, corporation, trust or other business entity which has either (a) entered into a nondisclosure agreement with the Company or any Company subsidiary oraffiliate or (b) has within the preceding 12 months received a currently pending and not rejected written proposal in reasonable detail from the Company or any ofthe Company’s subsidiary or affiliate.7.3 Inventions and Patents. The Company shall be entitled to the sole benefit and exclusive ownership of any inventions or improvements in products,processes, or other things that may be made or discovered by Executive while he is in the service of the Company, and all patents for the same. During the Term,Executive shall do all acts necessary or required by the Company to give effect to this section and, following the Term, Executive shall do all acts reasonablynecessary or required by the Company to give effect to this section. In all cases, the Company shall pay all costs and fees associated with such acts by Executive.7.4 Return of Property. The Executive agrees that all property in the Executive’s possession that he obtains or is assigned in the course of his employmentwith the Company, including, without limitation, all documents, reports, manuals, memoranda, customer lists, credit cards, keys, access cards, and all other propertyrelating in any way to the business of the Company, is the exclusive property of the Company, even if the Executive authored, created, or assisted in authoring orcreating such property. The Executive shall return to the Company all such property immediately upon termination of employment or at such earlier time as theCompany may request.7.5Court Ordered Revisions.If any portion of this Section 7 is found by a court of competent jurisdiction to be invalid or unenforceable, but would be validand enforceable if modified, this Section 7 shall apply with such modifications necessary to make this Section 7 valid and enforceable. Any portion of this Section 7not required to be so modified shall remain in full force and effect and not be affected thereby.7.6 Specific Performance. The Executive acknowledges that the remedy at law for any breach of any of the provisions of Section 7 will be inadequate, andthat the Company shall be entitled, in addition to any remedy at law or in equity, to preliminary and permanent injunctive relief and specific performance.38. MISCELLANEOUS.8.1 Indemnification. The Company and each of its subsidiaries shall, to the maximum extent provided under applicable law, indemnify and hold Executiveharmless from and against any expenses, including reasonable attorney’s fees, judgments, fines, settlements and other legally permissible amounts (“Losses”),incurred in connection with any proceeding arising out of, or related to, Executive’s employment by the Company, other than any such Losses incurred as a result ofExecutive’s negligence or willful misconduct. The Company shall, or shall cause a subsidiary thereof to, advance to Executive any expenses, including attorney’sfees and costs of settlement, incurred in defending any such proceeding to the maximum extent permitted by applicable law. Such costs and expenses incurred byExecutive in defense of any such proceeding shall be paid by the Company or applicable subsidiary in advance of the final disposition of such proceeding promptlyupon receipt by the Company of (a) written request for payment; (b) appropriate documentation evidencing the incurrence, amount and nature of the costs andexpenses for which payment is being sought; and (c) an undertaking adequate under applicable law made by or on behalf of Executive to repay the amounts soadvanced if it shall ultimately be determined pursuant to any nonappealable judgment or settlement that Executive is not entitled to be indemnified by the Companyor any subsidiary thereof. The Company will provide Executive with coverage under all directors and officers liability insurance policies that it has in effect duringthe Term, with no deductible to Executive. 8.2 Applicable Law. Except as may be otherwise provided herein, this Agreement shall be governed by and construed in accordance with the laws ofChina, applied without reference to principles of conflict of laws. Any dispute arising from or in connection with this Agreement shall be submitted to ShanghaiInternational Arbitration Center (the “Center”) for arbitration under the then effective rules of the Center. The arbitration award shall be the sole, binding, exclusiveand final remedy for resolving any dispute between the parties.8.3 Amendments. This Agreement may not be amended or modified otherwise than by a written agreement executed by the parties hereto or their respectivesuccessors or legal representatives.8.4 Notices. All notices and other communications hereunder shall be in writing and shall be given by handdelivery to the other party, by an internationalmail courier, or by registered or certified mail, return receipt requested, postage prepaid, addressed as follows:If to the Executive:Xuesong Song________________________________________________If to the Company:______________________________________Or to such other address as either party shall have furnished to the other in writing in accordance herewith. Notices and communications shall be effective whendelivered to the addressee.8.5 Withholding. The Company may withhold from any amounts payable under the Agreement, such federal, state and local income, unemployment, socialsecurity and similar employment related taxes and similar employment related withholdings as shall be required to be withheld pursuant to any applicable law orregulation.8.6 Severability. The invalidity or unenforceability of any provision of this Agreement shall not affect the validity or enforceability of any other provision ofthis Agreement and any such provision which is not valid or enforceable in whole shall be enforced to the maximum extent permitted by law.8.7 Captions. The captions of this Agreement are not part of the provisions and shall have no force or effect.48.8 Entire Agreement. This Agreement contains the entire agreement among the parties concerning the subject matter hereof and supersedes all prioragreements, understandings, discussions, negotiations and undertakings, whether written or oral, between the parties with respect thereto.8.9 Survival. The respective rights and obligations of the parties hereunder shall survive any termination of this Agreement or the Executive’s employmenthereunder to the extent necessary to the intended preservation of such rights and obligations.8.10 Waiver. Either Party's failure to enforce any provision or provisions of this Agreement shall not in any way be construed as a waiver of any suchprovision or provisions, or prevent that party thereafter from enforcing each and every other provision of this Agreement.8.11 Successors. This Agreement is personal to Executive and, without the prior express written consent of the Company, shall not be assignable byExecutive. This Agreement shall inure to the benefit of and be enforceable by Executive’s estate, heirs, beneficiaries, and/or legal representatives. This Agreementshall inure to the benefit of and be binding upon the Company and its successors and assigns.8.12 Joint Efforts/Counterparts. Preparation of this Agreement shall be deemed to be the joint effort of the parties hereto and shall not be construed moreseverely against any party. This Agreement may be signed in two or more counterparts, each of which shall be deemed an original and all of which together shallconstitute one and the same instrument.8.13 Representation by Counsel. Each Party hereby represents that it has had the opportunity to be represented by legal counsel of its choice inconnection with the negotiation and execution of this Agreement.IN WITNESS WHEREOF, the parties have executed this Agreement as of the day and year first above written.EXECUTIVE:LUOKUNG TECHNOLOGY CORP./s/ Xuesong Song/s/ Jie YuXuesong SongJie YuChief Financial Officer5EX10.2 12 f20f2017ex102_luokung.htm EMPLOYMENT AGREEMENT, DATED AUGUST 19, 2018, BY AND BETWEEN LUOKUNG TECHNOLOGY CORP. AND JIEYUExhibit 10.2EMPLOYMENT AGREEMENTThis EMPLOYMENT AGREEMENT (the “Agreement”) is made and entered into as of this 19 day of August, 2018 (the “Effective Date”), by and between LuokungTechnology Corp., a British Virgin Islands corporation (the “Company”) and Jie (Jay) Yu (the “Executive”), a Chinese citizen.WITNESSETH:WHEREAS, the parties desire to enter into this Agreement setting forth the terms and conditions of the employment relationship between the Executiveand the Company.NOW, THEREFORE, in consideration of the foregoing premises and the mutual covenants and agreements contained herein, the parties hereto agree asfollows:1. EMPLOYMENT.1.1 Agreement to Employ. The Company hereby agrees to employ Executive, and Executive hereby agrees to serve, subject to the provisions of thisAgreement, as an officer and employee of the Company.1.2 Duties and Schedule. Executive shall serve as the Company’s Chief Financial Officer, and be the Principal Financial Officer and Principal AccountingOfficer of the Company and responsible for all financial matters and management of the Company. The Executive shall report directly to the Company’s ChiefExecutive Officer and Board of Directors (the “Board”) and shall have such responsibilities as designated by the Chief Executive Officer or Board to the extent thatsuch responsibilities are not inconsistent with all applicable laws, regulations and rules. Executive shall devote his best efforts and all of his business time to hisposition with the Company during the Term.2. TERM OF EMPLOYMENT. Unless Executive’s employment shall sooner terminate pursuant to Section 4, the Company shall employ Executive for a fouryear term commencing on the Effective Date (the “Term”), which Term shall be renewable upon mutual agreement of the Company and the Executive, as approved bythe Board.3. COMPENSATION.3.1 Salary. Executive’s salary during the Term shall be RMB700,000 per year (the “Salary”), payable monthly.3.2 Bonus. At the sole discretion of the Board, or any committee duly designated by the Board and authorized to act thereto, the Executive shall be eligiblefor an annual cash bonus.3.3 Vacation. Executive shall be entitled to 8 days of paid vacation per year. In the event that Executive remains employed by the Company for 3 years ormore, Executive shall be entitled to 12 days of paid vacation.3.4 Business Expenses. Executive shall be reimbursed by the Company for all ordinary and necessary expenses incurred by Executive; provided that theyare incurred and approved in writing in accordance with the Company’s expense policy.3.5 Benefits. During the Term, Executive shall be allowed to participate, on the same basis generally as other employees of the Company, in all generalemployee benefit plans and programs, including improvements or modifications of the same, which may exist as of the Effective Date or thereafter and which aremade available by the Company to all or substantially all of its employees. Such benefits, plans, and programs may include, without limitation, any health, and dentalinsurance or 401K programs, if and when instituted. Any benefit plan currently existing or instituted by the Company after the Effective Date may be altered, changeor discontinued by the Company at its sole discretion and at any time without obligation of any nature to Executive. Except as specifically provided herein, nothingin this Agreement is to be construed or interpreted to increase or alter in any way the rights, participation, coverage, or benefits under such benefit plans orprograms to other than those provided to other employees pursuant to the terms and conditions of such benefit plans and programs. 14. TERMINATION.4.1 Death. This Agreement shall terminate immediately upon the death of Executive, and Executive’s estate or Executive’s legal representative, as the casemay be, shall be entitled to Executive’s accrued and unpaid Salary as of the date of Executive’s death, plus all other compensation and benefits that were vestedthrough the date of Executive’s death.4.2 Disability. In the event of Executive’s Disability, this Agreement shall terminate and Executive shall be entitled to (a) accrued and unpaid Salary andvacation through the first date that a Disability is determined; and (b) all other compensation and benefits that were vested through the first date that a Disabilityhas been determined. “Disability” means the good faith determination of the Board that Executive has become so physically or mentally incapacitated or disabled asto be unable to satisfactorily perform his duties hereunder for a period of ninety (90) consecutive calendar days or for one hundred twenty (120) days in any threehundred sixty (360) day period, such determination based upon a certificate as to such physical or mental disability issued by a licensed physician and/orpsychiatrist (as the case may be) mutually agreed upon by Executive and the Company.4.3 Termination by Company for Cause. The Company may terminate the Executive for Cause and such termination shall take effect upon the receipt byExecutive of the Notice of Termination. Upon the effective date of the termination for Cause, Executive shall be solely entitled to accrued and unpaid Salary throughsuch effective date. “Cause” means: (i) engaging in any act, omission or misconduct that is injurious to the Company or an affiliate; (ii) gross negligence or willfulmisconduct in connection with the performance of duties; (iii) conviction of a criminal offense (other than minor traffic offenses); (iv) fraud, embezzlement ormisappropriation of funds or property of the Company or an affiliate; (v) material breach of any term of any employment or other services, confidentiality, intellectualproperty or noncompetition agreements, if any, between the Executive and the Company or an affiliate; (vi) the entry of an order duly issued by any regulatoryagency (including federal, state and local regulatory agencies and selfregulatory bodies) having jurisdiction over the Company or an affiliate requiring the removalof the Executive from any office held with the Company or prohibiting the Executive from participating in the business or affairs of the Company or any affiliate; or(vii) the revocation or threatened revocation of any of the Company’s or an affiliate’s government licenses, permits or approvals, which is primarily due to theExecutive’s action or inaction and such revocation or threatened revocation would be alleviated or mitigated in any material respect by the termination of theExecutive’s employment or services with the Company or an affiliate. 4.4 Voluntary Termination by Executive. The Executive may voluntarily terminate his employment for any reason and such termination shall take effect 30days after the receipt by Company of the Notice of Termination. Upon the effective date of such termination, Executive shall be entitled to (a) accrued and unpaidSalary and vacation through such termination date; and (b) all other compensation and benefits that were vested through such termination date. In the eventExecutive is terminated without notice, it shall be deemed a termination by the Company for Cause.4.5 Notice of Termination. Any termination of the employment by the Company or the Executive shall be communicated by a notice in accordance withSection 8.4 of this Agreement (the “Notice of Termination”). Such notice shall (a) indicate the specific termination provision in this Agreement relied upon and (b) ifthe termination is for Cause, the date on which the Executive’s employment is to be terminated.4.6 Severance. The Executive shall not be entitled to severance payments upon any termination provided in Section 4 herein.5. EMPLOYEE’S REPRESENTATION. The Executive represents and warrants to the Company that: (a) he is subject to no contractual, fiduciary or otherobligation which may affect the performance of his duties under this Agreement; (b) he has terminated, in accordance with their terms, any contractual obligationwhich may affect his performance under this Agreement; and (c) his employment with the Company will not require him to use or disclose proprietary or confidentialinformation of any other person or entity.26. CONFIDENTIAL INFORMATION Except as permitted or directed by the Board of Directors of the Company in writing, during the time the Executive isemployed by the Company or at any time thereafter, the Executive shall not use for his personal purposes nor divulge, furnish, or make accessible to anyone or usein any way (other than in the ordinary course of the business of the Company) any confidential or secret information or knowledge of the Company, whetherdeveloped by himself or by others. Such confidential and/or secret information encompassed by this Section 6 includes, but is not limited to, the Company’scustomer and supplier lists, business plans, software, systems, and financial, marketing, and personnel information. The Executive agrees to refrain from any acts oromissions that would reduce the value of any confidential or secret knowledge or information to the Company, both during his employment hereunder and at anytime after the termination of his employment. The Executive’s obligations of confidentiality under this Section 6 shall not apply to any knowledge or information thatis now published publicly or that subsequently becomes generally publicly known, other than as a direct or indirect result of a breach of this Agreement by theExecutive.7. NONCOMPETITION: NONSOLICITATION; INVENTIONS.7.1 NonCompetition. During the employment of the Executive under this Agreement and for a period of six (6) months after termination of suchemployment, the Executive shall not at any time compete on his own behalf, or on behalf of any other person or entity, with the Company or any of its affiliateswithin all territories in which the Company does business with respect to the business of the Company or any of its affiliates as such business shall be conductedon the date hereof or during the employment of the Executive under this Agreement. The ownership by the Executive of not more than 5% of a corporation,partnership or other enterprise shall not constitute a violation hereof.7.2 NonSolicitation. During the employment of the Executive under this Agreement and thereafter Executive shall not at any time (i) solicit or induce, onhis own behalf or on behalf of any other person or entity, any employee of the Company or any of its affiliates to leave the employ of the Company or any of itsaffiliates; or (ii) solicit or induce, on his own behalf or on behalf of any other person or entity, any customer or Prospective Customer of the Company or any of theirrespective affiliates to reduce its business with the Company or any of its affiliates. For the purposes of this Agreement, “Prospective Customer” shall mean anyindividual, corporation, trust or other business entity which has either (a) entered into a nondisclosure agreement with the Company or any Company subsidiary oraffiliate or (b) has within the preceding 12 months received a currently pending and not rejected written proposal in reasonable detail from the Company or any ofthe Company’s subsidiary or affiliate.7.3 Inventions and Patents. The Company shall be entitled to the sole benefit and exclusive ownership of any inventions or improvements in products,processes, or other things that may be made or discovered by Executive while he is in the service of the Company, and all patents for the same. During the Term,Executive shall do all acts necessary or required by the Company to give effect to this section and, following the Term, Executive shall do all acts reasonablynecessary or required by the Company to give effect to this section. In all cases, the Company shall pay all costs and fees associated with such acts by Executive.7.4 Return of Property. The Executive agrees that all property in the Executive’s possession that he obtains or is assigned in the course of his employmentwith the Company, including, without limitation, all documents, reports, manuals, memoranda, customer lists, credit cards, keys, access cards, and all other propertyrelating in any way to the business of the Company, is the exclusive property of the Company, even if the Executive authored, created, or assisted in authoring orcreating such property. The Executive shall return to the Company all such property immediately upon termination of employment or at such earlier time as theCompany may request.7.5Court Ordered Revisions.If any portion of this Section 7 is found by a court of competent jurisdiction to be invalid or unenforceable, but would be validand enforceable if modified, this Section 7 shall apply with such modifications necessary to make this Section 7 valid and enforceable. Any portion of this Section 7not required to be so modified shall remain in full force and effect and not be affected thereby.7.6 Specific Performance. The Executive acknowledges that the remedy at law for any breach of any of the provisions of Section 7 will be inadequate, andthat the Company shall be entitled, in addition to any remedy at law or in equity, to preliminary and permanent injunctive relief and specific performance.38. MISCELLANEOUS.8.1 Indemnification. The Company and each of its subsidiaries shall, to the maximum extent provided under applicable law, indemnify and hold Executiveharmless from and against any expenses, including reasonable attorney’s fees, judgments, fines, settlements and other legally permissible amounts (“Losses”),incurred in connection with any proceeding arising out of, or related to, Executive’s employment by the Company, other than any such Losses incurred as a result ofExecutive’s negligence or willful misconduct. The Company shall, or shall cause a subsidiary thereof to, advance to Executive any expenses, including attorney’sfees and costs of settlement, incurred in defending any such proceeding to the maximum extent permitted by applicable law. Such costs and expenses incurred byExecutive in defense of any such proceeding shall be paid by the Company or applicable subsidiary in advance of the final disposition of such proceeding promptlyupon receipt by the Company of (a) written request for payment; (b) appropriate documentation evidencing the incurrence, amount and nature of the costs andexpenses for which payment is being sought; and (c) an undertaking adequate under applicable law made by or on behalf of Executive to repay the amounts soadvanced if it shall ultimately be determined pursuant to any nonappealable judgment or settlement that Executive is not entitled to be indemnified by the Companyor any subsidiary thereof. The Company will provide Executive with coverage under all directors and officers liability insurance policies that it has in effect duringthe Term, with no deductible to Executive. 8.2 Applicable Law. Except as may be otherwise provided herein, this Agreement shall be governed by and construed in accordance with the laws ofChina, applied without reference to principles of conflict of laws. Any dispute arising from or in connection with this Agreement shall be submitted to ShanghaiInternational Arbitration Center (the “Center”) for arbitration under the then effective rules of the Center. The arbitration award shall be the sole, binding, exclusiveand final remedy for resolving any dispute between the parties.8.3 Amendments. This Agreement may not be amended or modified otherwise than by a written agreement executed by the parties hereto or their respectivesuccessors or legal representatives.8.4 Notices. All notices and other communications hereunder shall be in writing and shall be given by handdelivery to the other party, by an internationalmail courier, or by registered or certified mail, return receipt requested, postage prepaid, addressed as follows:If to the Executive:Jie Yu________________________________________If to the Company:______________________________________Or to such other address as either party shall have furnished to the other in writing in accordance herewith. Notices and communications shall be effective whendelivered to the addressee.8.5 Withholding. The Company may withhold from any amounts payable under the Agreement, such federal, state and local income, unemployment, socialsecurity and similar employment related taxes and similar employment related withholdings as shall be required to be withheld pursuant to any applicable law orregulation.8.6 Severability. The invalidity or unenforceability of any provision of this Agreement shall not affect the validity or enforceability of any other provision ofthis Agreement and any such provision which is not valid or enforceable in whole shall be enforced to the maximum extent permitted by law.48.7 Captions. The captions of this Agreement are not part of the provisions and shall have no force or effect.8.8 Entire Agreement. This Agreement contains the entire agreement among the parties concerning the subject matter hereof and supersedes all prioragreements, understandings, discussions, negotiations and undertakings, whether written or oral, between the parties with respect thereto.8.9 Survival. The respective rights and obligations of the parties hereunder shall survive any termination of this Agreement or the Executive’s employmenthereunder to the extent necessary to the intended preservation of such rights and obligations.8.10 Waiver. Either Party's failure to enforce any provision or provisions of this Agreement shall not in any way be construed as a waiver of any suchprovision or provisions, or prevent that party thereafter from enforcing each and every other provision of this Agreement.8.11 Successors. This Agreement is personal to Executive and, without the prior express written consent of the Company, shall not be assignable byExecutive. This Agreement shall inure to the benefit of and be enforceable by Executive’s estate, heirs, beneficiaries, and/or legal representatives. This Agreementshall inure to the benefit of and be binding upon the Company and its successors and assigns.8.12 Joint Efforts/Counterparts. Preparation of this Agreement shall be deemed to be the joint effort of the parties hereto and shall not be construed moreseverely against any party. This Agreement may be signed in two or more counterparts, each of which shall be deemed an original and all of which together shallconstitute one and the same instrument.8.13 Representation by Counsel. Each Party hereby represents that it has had the opportunity to be represented by legal counsel of its choice inconnection with the negotiation and execution of this Agreement.IN WITNESS WHEREOF, the parties have executed this Agreement as of the day and year first above written.EXECUTIVE:LUOKUNG TECHNOLOGY CORP./s/ Jie Yu/s/ Xuesong SongJie YuXuesong SongChief Executive Officer5EX12.1 13 f20f2017ex121_luokung.htm CERTIFICATIONExhibit 12.1Certification by the Chief Executive OfficerPursuant to Section 302 of the SarbanesOxley Act of 2002I, Xuesong Song, the Chief Executive Officer of Luokung Technology Corp. (the “Company”), certify that:1.I have reviewed this transition report on Form 20F of the Company;2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statementsmade, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financialcondition, results of operations and cash flows of the Company as of, and for, the periods presented in this report;4.The Company’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange ActRules 13a15(e) and 15d15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a15(f) and 15d15(f)) for the Company andhave:(a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure thatmaterial information relating to the Company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during theperiod in which this report is being prepared;(b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, toprovide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance withgenerally accepted accounting principles;(c)Evaluated the effectiveness of the Company’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of thedisclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and(d)Disclosed in this report any change in the Company’s internal control over financial reporting that occurred during the period covered by the transition reportthat has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting; and5.The Company’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Company’sauditors and the audit committee of the Company’s board of directors (or persons performing the equivalent functions):(a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely toadversely affect the Company’s ability to record, process, summarize and report financial information; and(b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the Company’s internal control over financialreporting.Date: October 12, 2018By:/s/ Xuesong SongXuesong SongChief Executive Officer(principal executive officer)EX12.2 14 f20f2017ex122_luokung.htm CERTIFICATIONExhibit 12.2Certification by the Chief Financial OfficerPursuant to Section 302 of the SarbanesOxley Act of 2002I, Jie Yu, the Chief Financial Officer of Luokung Technology Corp. (the “Company”), certify that:1.I have reviewed this transition report on Form 20F of the Company;2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statementsmade, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financialcondition, results of operations and cash flows of the Company as of, and for, the periods presented in this report;4.The Company’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange ActRules 13a15(e) and 15d15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a15(f) and 15d15(f)) for the Company andhave:(a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure thatmaterial information relating to the Company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during theperiod in which this report is being prepared;(b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, toprovide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance withgenerally accepted accounting principles;(c)Evaluated the effectiveness of the Company’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of thedisclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and(d)Disclosed in this report any change in the Company’s internal control over financial reporting that occurred during the period covered by the transition reportthat has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting; and5.The Company’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Company’sauditors and the audit committee of the Company’s board of directors (or persons performing the equivalent functions):(a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely toadversely affect the Company’s ability to record, process, summarize and report financial information; and(b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the Company’s internal control over financialreporting.Date: October 12, 2018By:/s/ Jie YuJie YuChief Financial Officer(principal financial officer and principal accounting officer)EX13.1 15 f20f2017ex131_luokung.htm CERTIFICATIONExhibit 13.1Certification by the Chief Executive OfficerPursuant to Section 906 of the SarbanesOxley Act of 2002In connection with the Transition report on Form 20F of Luokung Technology Corp. (the “Company”) for the year ended December 31, 2017 as filed withthe Securities and Exchange Commission on the date hereof (the “Report”), I, Xuesong Song, Chairman and Chief Executive Officer of the Company, certify,pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the SarbanesOxley Act of 2002, that to my knowledge:(1)The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and(2)The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.Date: October 12, 2018By:/s/ Xuesong SongXuesong SongChief Executive Officer(principal executive officer)EX13.2 16 f20f2017ex132_luokung.htm CERTIFICATIONExhibit 13.2Certification by the Chief Financial OfficerPursuant to Section 906 of the SarbanesOxley Act of 2002In connection with the Transition report on Form 20F of Luokung Technology Corp. (the “Company”) for the year ended December 31, 2017 as filed withthe Securities and Exchange Commission on the date hereof (the “Report”), I, Jie Yu, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. Section1350, as adopted pursuant to Section 906 of the SarbanesOxley Act of 2002, that to my knowledge:(1)The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and(2)The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.Date: October 12, 2018By:/s/ Jie YuJie YuChief Financial Officer(principal financial officer and principal accounting officer)地址：Address:.b)陈蔚力Chen Weili地址：Address:c)王平Wang Ping地址：Address:17秘密文件 Strictly Confidentiald)刘东来Liu Donglai地址：Address:丙方：北京中传视讯科技有限公司Party C: Beijing Mobile Vision Technology Co., Ltd.地址：北京市朝阳区光华路9号SOHO3QLAB32Address: LAB32, SOHO3Q, No 9, Guanghua Road, Chaoyang District, Beijing.收件人：宋雪松Attn.: Song Xuesong14.3任何一方可按本条规定随时给其他各方发出通知来改变其接收通知的地址。Any Party may at any time change its address for notices by a notice delivered to the other Parties in accordance with the terms hereof.15.分割性Severability如果本协议有任何一条或多条规定根据任何法律或法规在任何方面被裁定为无效、不合法或不可执行，本协议其余规定的有效性、合法性或可执行性不应因此在任何方面受到影响或损害。各方应通过诚意磋商，争取以法律许可以及各方期望的最大限度内有效的规定取代那些无效、不合法或不可执行的规定，而该等有效的规定所产生的经济效果应尽可能与那些无效、不合法或不能强制执行的规定所产生的经济效果相似。In the event that one or several of the provisions of this Contract are found to be invalid, illegal or unenforceable in any aspect in accordance with any laws orregulations, the validity, legality or enforceability of the remaining provisions of this Contract shall not be affected or compromised in any respect. The Partiesshall strive in good faith to replace such invalid, illegal or unenforceable provisions with effective provisions that accomplish to the greatest extent permittedby law and the intentions of the Parties, and the economic effect of such effective provisions shall be as close as possible to the economic effect of thoseinvalid, illegal or unenforceable provisions.18秘密文件 Strictly Confidential16.附件Attachments本协议所列附件，为本协议不可分割的组成部分。The attachments set forth herein shall be an integral part of this Agreement.17.生效Effectiveness17.1本协议的任何修改、补充或变更，均须采用书面形式，经各方签字或盖章并按规定办理政府登记（如需）后生效。Any amendments, changes and supplements to this Agreement shall be in writing and shall become effective upon completion of the governmentalfiling procedures (if applicable) after the affixation of the signatures or seals of the Parties.17.2本协议以中文和英文书就，一式六份，质权人、所有出质人和丙方各持一份，具有同等效力；中英文版本如有冲突，应以中文版为准。This Agreement is written in Chinese and English in six copies. Each Pledgors, Pledgee and Party C shall hold one copy respectively. Each copy of thisAgreement shall have equal validity. In case there is any conflict between the Chinese version and the English version, the Chinese version shall prevail.本页其余部分刻意留为空白The Remainder of this page is intentionally left blank19秘密文件 Strictly Confidential有鉴于此，各方已使得经其授权的代表于文首所述日期签署了本股权质押协议并即生效，以昭信守。IN WITNESS WHEREOF, the Parties have caused their authorized representatives to execute this Equity Interest Pledge Agreement as of the date first abovewritten.甲方：中传天下信息科技（深圳）有限公司（盖章）Party A: Zhongchuan Tianxia Information Technology (Shenzhen) Co., Ltd. (Seal)签字：By:/s/ Hong Ting姓名：洪婷Name: Hong Ting职务：总经理Title: General Manager秘密文件 Strictly Confidential有鉴于此，各方已使得经其授权的代表于文首所述日期签署了本股权质押协议并即生效，以昭信守。IN WITNESS WHEREOF, the Parties have caused their authorized representatives to execute this Equity Interest Pledge Agreement as of the date first abovewritten.乙方：Party B:宋雪松Song Xuesong签署：By:/s/ Song Xuesong秘密文件 Strictly Confidential有鉴于此，各方已使得经其授权的代表于文首所述日期签署了本股权质押协议并即生效，以昭信守。IN WITNESS WHEREOF, the Parties have caused their authorized representatives to execute this Equity Interest Pledge Agreement as of the date first abovewritten.乙方：Party B:陈蔚力Chen Weili签字：By:/s/ Chen Weili秘密文件 Strictly Confidential有鉴于此，各方已使得经其授权的代表于文首所述日期签署了本股权质押协议并即生效，以昭信守。IN WITNESS WHEREOF, the Parties have caused their authorized representatives to execute this Equity Interest Pledge Agreement as of the date first abovewritten.乙方：Party B:王平Wang Ping签字：By:/s/ Wang Ping秘密文件 Strictly Confidential有鉴于此，各方已使得经其授权的代表于文首所述日期签署了本股权质押协议并即生效，以昭信守。IN WITNESS WHEREOF, the Parties have caused their authorized representatives to execute this Equity Interest Pledge Agreement as of the date first abovewritten.乙方：Party B:刘东来Liu Donglai签字：By:/s/ Liu Donglai秘密文件 Strictly Confidential有鉴于此，各方已使得经其授权的代表于文首所述日期签署了本股权质押协议并即生效，以昭信守。IN WITNESS WHEREOF, the Parties have caused their authorized representatives to execute this Equity Interest Pledge Agreement as of the date first abovewritten.丙方：北京中传视讯科技有限公司（盖章）Party B: Beijing Mobile Vision Technology Co., Ltd. (Seal)签字：By:/s/ Song Xuesong姓名：宋雪松Name: Song Xuesong职务：董事长Title: Chairman of the Board秘密文件 Strictly Confidential附件：Attachments:1.北京中传视讯科技有限公司股东名册；Shareholders' Register of Beijing Mobile Vision Technology Co., Ltd.;2.北京中传视讯科技有限公司的出资证明书；The Capital Contribution Certificate of Beijing Mobile Vision Technology Co., Ltd.;3.独家业务合作协议。Exclusive Business Cooperation Agreement.秘密文件 Strictly ConfidentialEX4.20 6 f20f2017ex420_luokung.htm POWER OF ATTORNEY BY WEILI CHEN, DATED AUGUST 31, 2015Exhibit 4.20授权委托书Power of Attorney本人陈蔚力，持有中华人民共和国身份证（号码：*************** 516），通讯地址为广东省，系拥有北京中传视讯科技有限公司（“中传视讯”）14.0848%股权（“相关股权”）的股东，就相关股权，特此不可撤销地授权中传天下信息科技（深圳）有限公司（“深圳中传天下”）在本授权委托书的有效期内行使如下权利：The undersigned, Chen Weili, a person with the PRC identification card number of ***************516, with address at: Guangdong, and a holder of14.0848% of the entire registered capital ("Shares") in Beijing Mobile Vision Technology Co., Ltd. ("Mobile Vision"), hereby irrevocably authorize ZhongchuanTianxia Information Technology (Shenzhen) Co., Ltd. ("WFOE") to exercise the following rights relating to Shares during the term of this Power of Attorney:授权深圳中传天下作为本人唯一的排他的代理人就有关相关股权的事宜全权代表本人行使包括但不限于如下的权利：1）参加中传视讯的股东会；2）行使按照法律和中传视讯章程规定本人所享有的全部股东权利和股东表决权，包括但不限于出售或转让或质押或处置相关股权的全部或任何一部分；以及3）作为本人的授权代表指定和任命中传视讯的法定代表人、董事和/或执行董事、监事、经理以及其他高级管理人员等。但中传视讯利用该等授权做出违反中华人民共和国法律的决定无效。WFOE is hereby authorized to act on behalf of myself as my exclusive agent and attorney with respect to all matters concerning My Shareholding, includingwithout limitation: 1) attending shareholders' meetings of Mobile Vision; 2) exercising all the shareholder's rights and shareholder's voting rights I am entitled tounder the laws of China and Articles of Association of Mobile Vision, including but not limited to the sale or transfer or pledge or disposition of My Shareholding inpart or in whole; and 3) designating and appointing on behalf of myself the legal representative, director and/or executive director, supervisor, manager and othersenior management members of Mobile Vision. However, the decision made by Mobile Vision taking advantage of the power of attorney which is against the PRClaws shall be null and void.1深圳中传天下将有权在授权范围内代表本人签署独家购买权协议（本人应要求作为协议方）中约定的转让协议，如期履行本人作为协议一方的与本授权委托书同日签署的股权质押协议和独家购买权协议，该权利的行使将不对本授权形成任何限制。Without limiting the generality of the powers granted hereunder, WFOE shall have the power and authority under this Power of Attorney to execute theTransfer Contracts stipulated in Exclusive Option Agreement, to which I am required to be a party, on behalf of myself, and to effect the terms of the Share PledgeAgreement and Exclusive Option Agreement, both dated the date hereof, to which I am a party.深圳中传天下就相关股权的一切行为均视为本人的行为，签署的一切文件均视为本人签署，本人会予以承认。All the actions associated with Shares conducted by WFOE shall be deemed as my own actions, and all the documents related to Shares executed by WFOEshall be deemed to be executed by me. I hereby acknowledge and ratify those actions and/or documents by the WFOE.深圳中传天下有转委托权，可以就上述事项的办理自行再委托其他人或单位而不必事先通知本人或获得本人的同意。WFOE is entitled to reauthorize or assign its rights related to the aforesaid matters to any other person or entity at its own discretion and without giving priornotice to me or obtaining my consent.在本人为中传视讯的股东期间，本授权委托书不可撤销并持续有效，自授权委托书签署之日起算。This Power of Attorney is coupled with an interest and shall be irrevocable and continuously valid from the date of execution of this Power of Attorney, solong as I am a shareholder of Mobile Vision.本授权委托书期间，本人特此放弃已经通过本授权委托书授权给深圳中传天下的与相关股权有关的所有权利，不再自行行使该等权利。During the term of this Power of Attorney, I hereby waive all the rights associated with Shares, which have been authorized to WFOE through this Power ofAttorney, and shall not exercise such rights by myself.本授权委托书以中文和英文书就，中英文版本如有冲突，应以中文版为准。This Power of Attorney is written in Chinese and English; in case there is any conflict between the Chinese version and the English version, the Chineseversion shall prevail.陈蔚力Chen Weili签署：By:日期：年月日Date:2EX4.21 7 f20f2017ex421_luokung.htm POWER OF ATTORNEY BY PING WANG, DATED AUGUST 31, 2015Exhibit 4.21授权委托书Power of Attorney本人王平，持有中华人民共和国身份证（号码：***************01x），通讯地址为广东省，系拥有北京中传视讯科技有限公司（“中传视讯”）19.9872%股权（“相关股权”）的股东，就相关股权，特此不可撤销地授权中传天下信息科技（深圳）有限公司（“深圳中传天下”）在本授权委托书的有效期内行使如下权利：The undersigned, Wang Ping, a person with the PRC identification card number of ***************01x, with address at Guangdong, and a holder of19.9872% of the entire registered capital (“Shares”) in Beijing Mobile Vision Technology Co., Ltd. (“Mobile Vision”), hereby irrevocably authorize ZhongchuanTianxia Information Technology (Shenzhen) Co., Ltd. (“WFOE”) to exercise the following rights relating to Shares during the term of this Power of Attorney:授权深圳中传天下作为本人唯一的排他的代理人就有关相关股权的事宜全权代表本人行使包括但不限于如下的权利：1）参加中传视讯的股东会；2）行使按照法律和中传视讯章程规定本人所享有的全部股东权利和股东表决权，包括但不限于出售或转让或质押或处置相关股权的全部或任何一部分；以及3）作为本人的授权代表指定和任命中传视讯的法定代表人、董事和/或执行董事、监事、经理以及其他高级管理人员等。但中传视讯利用该等授权做出违反中华人民共和国法律的决定无效。WFOE is hereby authorized to act on behalf of myself as my exclusive agent and attorney with respect to all matters concerning My Shareholding, includingwithout limitation: 1) attending shareholders’ meetings of Mobile Vision; 2) exercising all the shareholder’s rights and shareholder’s voting rights I am entitled tounder the laws of China and Articles of Association of Mobile Vision, including but not limited to the sale or transfer or pledge or disposition of My Shareholding inpart or in whole; and 3) designating and appointing on behalf of myself the legal representative, director and/or executive director, supervisor, manager and othersenior management members of Mobile Vision. However, the decision made by Mobile Vision taking advantage of the power of attorney which is against the PRClaws shall be null and void.1深圳中传天下将有权在授权范围内代表本人签署独家购买权协议（本人应要求作为协议方）中约定的转让协议，如期履行本人作为协议一方的与本授权委托书同日签署的股权质押协议和独家购买权协议，该权利的行使将不对本授权形成任何限制。Without limiting the generality of the powers granted hereunder, WFOE shall have the power and authority under this Power of Attorney to execute theTransfer Contracts stipulated in Exclusive Option Agreement, to which I am required to be a party, on behalf of myself, and to effect the terms of the Share PledgeAgreement and Exclusive Option Agreement, both dated the date hereof, to which I am a party.深圳中传天下就相关股权的一切行为均视为本人的行为，签署的一切文件均视为本人签署，本人会予以承认。All the actions associated with Shares conducted by WFOE shall be deemed as my own actions, and all the documents related to Shares executed by WFOEshall be deemed to be executed by me. I hereby acknowledge and ratify those actions and/or documents by the WFOE.深圳中传天下有转委托权，可以就上述事项的办理自行再委托其他人或单位而不必事先通知本人或获得本人的同意。WFOE is entitled to reauthorize or assign its rights related to the aforesaid matters to any other person or entity at its own discretion and without giving priornotice to me or obtaining my consent.在本人为中传视讯的股东期间，本授权委托书不可撤销并持续有效，自授权委托书签署之日起算。This Power of Attorney is coupled with an interest and shall be irrevocable and continuously valid from the date of execution of this Power of Attorney, solong as I am a shareholder of Mobile Vision.本授权委托书期间，本人特此放弃已经通过本授权委托书授权给深圳中传天下的与相关股权有关的所有权利，不再自行行使该等权利。During the term of this Power of Attorney, I hereby waive all the rights associated with Shares, which have been authorized to WFOE through this Power ofAttorney, and shall not exercise such rights by myself.本授权委托书以中文和英文书就，中英文版本如有冲突，应以中文版为准。This Power of Attorney is written in Chinese and English; in case there is any conflict between the Chinese version and the English version, the Chineseversion shall prevail.王平Wang Ping签署：By:日期：年月日Date:2EX4.22 8 f20f2017ex422_luokung.htm POWER OF ATTORNEY BY DONGLAI LIU, DATED AUGUST 31, 2015Exhibit 4.22授权委托书Power of Attorney本人刘东来，持有中华人民共和国身份证（号码：***************912），通讯地址为: ，系拥有北京中传视讯科技有限公司（“中传视讯”）4.1035%股权（“相关股权”）的股东，就相关股权，特此不可撤销地授权中传天下信息科技（深圳）有限公司（“深圳中传天下”）在本授权委托书的有效期内行使如下权利：The undersigned, Liu Donglai, a person with the PRC identification card number of ***************912, with address at: , and a holder of 4.1035% of theentire registered capital (“Shares”) in Beijing Mobile Vision Technology Co., Ltd. (“Mobile Vision”), hereby irrevocably authorize Zhongchuan Tianxia InformationTechnology (Shenzhen) Co., Ltd. (“WFOE”) to exercise the following rights relating to Shares during the term of this Power of Attorney:授权深圳中传天下作为本人唯一的排他的代理人就有关相关股权的事宜全权代表本人行使包括但不限于如下的权利：1）参加中传视讯的股东会；2）行使按照法律和中传视讯章程规定本人所享有的全部股东权利和股东表决权，包括但不限于出售或转让或质押或处置相关股权的全部或任何一部分；以及3）作为本人的授权代表指定和任命中传视讯的法定代表人、董事和/或执行董事、监事、经理以及其他高级管理人员等。但中传视讯利用该等授权做出违反中华人民共和国法律的决定无效。WFOE is hereby authorized to act on behalf of myself as my exclusive agent and attorney with respect to all matters concerning My Shareholding, includingwithout limitation: 1) attending shareholders’ meetings of Mobile Vision; 2) exercising all the shareholder’s rights and shareholder’s voting rights I am entitled tounder the laws of China and Articles of Association of Mobile Vision, including but not limited to the sale or transfer or pledge or disposition of My Shareholding inpart or in whole; and 3) designating and appointing on behalf of myself the legal representative, director and/or executive director, supervisor, manager and othersenior management members of Mobile Vision. However, the decision made by Mobile Vision taking advantage of the power of attorney which is against the PRClaws shall be null and void.1深圳中传天下将有权在授权范围内代表本人签署独家购买权协议（本人应要求作为协议方）中约定的转让协议，如期履行本人作为协议一方的与本授权委托书同日签署的股权质押协议和独家购买权协议，该权利的行使将不对本授权形成任何限制。Without limiting the generality of the powers granted hereunder, WFOE shall have the power and authority under this Power of Attorney to execute theTransfer Contracts stipulated in Exclusive Option Agreement, to which I am required to be a party, on behalf of myself, and to effect the terms of the Share PledgeAgreement and Exclusive Option Agreement, both dated the date hereof, to which I am a party.深圳中传天下就相关股权的一切行为均视为本人的行为，签署的一切文件均视为本人签署，本人会予以承认。All the actions associated with Shares conducted by WFOE shall be deemed as my own actions, and all the documents related to Shares executed by WFOEshall be deemed to be executed by me. I hereby acknowledge and ratify those actions and/or documents by the WFOE.深圳中传天下有转委托权，可以就上述事项的办理自行再委托其他人或单位而不必事先通知本人或获得本人的同意。WFOE is entitled to reauthorize or assign its rights related to the aforesaid matters to any other person or entity at its own discretion and without giving priornotice to me or obtaining my consent.在本人为中传视讯的股东期间，本授权委托书不可撤销并持续有效，自授权委托书签署之日起算。This Power of Attorney is coupled with an interest and shall be irrevocable and continuously valid from the date of execution of this Power of Attorney, solong as I am a shareholder of Mobile Vision.本授权委托书期间，本人特此放弃已经通过本授权委托书授权给深圳中传天下的与相关股权有关的所有权利，不再自行行使该等权利。During the term of this Power of Attorney, I hereby waive all the rights associated with Shares, which have been authorized to WFOE through this Power ofAttorney, and shall not exercise such rights by myself.本授权委托书以中文和英文书就，中英文版本如有冲突，应以中文版为准。This Power of Attorney is written in Chinese and English; in case there is any conflict between the Chinese version and the English version, the Chineseversion shall prevail.刘东来Liu Donglai签署：By:日期：年月日Date:2EX4.23 9 f20f2017ex423_luokung.htm POWER OF ATTORNEY BY XUESONG SONG, DATED AUGUST 31, 2015Exhibit 4.23授权委托书Power of Attorney本人宋雪松，持有中华人民共和国身份证（号码：***************417），通讯地址为，系拥有北京中传视讯科技有限公司（“中传视讯”）61.8245%股权（“相关股权”）的股东，就相关股权，特此不可撤销地授权中传天下信息科技（深圳）有限公司（“深圳中传天下”）在本授权委托书的有效期内行使如下权利：The undersigned, Song Xuesong, a person with the PRC identification card number of ***************417, with address at , and a holder of 61.8245% ofthe entire registered capital (“Shares”) in Beijing Mobile Vision Technology Co., Ltd. (“Mobile Vision”), hereby irrevocably authorize Zhongchuan TianxiaInformation Technology (Shenzhen) Co., Ltd. (“WFOE”) to exercise the following rights relating to Shares during the term of this Power of Attorney:授权深圳中传天下作为本人唯一的排他的代理人就有关相关股权的事宜全权代表本人行使包括但不限于如下的权利：1）参加中传视讯的股东会；2）行使按照法律和中传视讯章程规定本人所享有的全部股东权利和股东表决权，包括但不限于出售或转让或质押或处置相关股权的全部或任何一部分；以及3）作为本人的授权代表指定和任命中传视讯的法定代表人、董事和/或执行董事、监事、经理以及其他高级管理人员等。但中传视讯利用该等授权做出违反中华人民共和国法律的决定无效。WFOE is hereby authorized to act on behalf of myself as my exclusive agent and attorney with respect to all matters concerning My Shareholding, includingwithout limitation: 1) attending shareholders’ meetings of Mobile Vision; 2) exercising all the shareholder’s rights and shareholder’s voting rights I am entitled tounder the laws of China and Articles of Association of Mobile Vision, including but not limited to the sale or transfer or pledge or disposition of My Shareholding inpart or in whole; and 3) designating and appointing on behalf of myself the legal representative, director and/or executive director, supervisor, manager and othersenior management members of Mobile Vision. However, the decision made by Mobile Vision taking advantage of the power of attorney which is against the PRClaws shall be null and void.1深圳中传天下将有权在授权范围内代表本人签署独家购买权协议（本人应要求作为协议方）中约定的转让协议，如期履行本人作为协议一方的与本授权委托书同日签署的股权质押协议和独家购买权协议，该权利的行使将不对本授权形成任何限制。Without limiting the generality of the powers granted hereunder, WFOE shall have the power and authority under this Power of Attorney to execute theTransfer Contracts stipulated in Exclusive Option Agreement, to which I am required to be a party, on behalf of myself, and to effect the terms of the Share PledgeAgreement and Exclusive Option Agreement, both dated the date hereof, to which I am a party.深圳中传天下就相关股权的一切行为均视为本人的行为，签署的一切文件均视为本人签署，本人会予以承认。All the actions associated with Shares conducted by WFOE shall be deemed as my own actions, and all the documents related to Shares executed by WFOEshall be deemed to be executed by me. I hereby acknowledge and ratify those actions and/or documents by the WFOE.深圳中传天下有转委托权，可以就上述事项的办理自行再委托其他人或单位而不必事先通知本人或获得本人的同意。WFOE is entitled to reauthorize or assign its rights related to the aforesaid matters to any other person or entity at its own discretion and without giving priornotice to me or obtaining my consent.在本人为中传视讯的股东期间，本授权委托书不可撤销并持续有效，自授权委托书签署之日起算。This Power of Attorney is coupled with an interest and shall be irrevocable and continuously valid from the date of execution of this Power of Attorney, solong as I am a shareholder of Mobile Vision.本授权委托书期间，本人特此放弃已经通过本授权委托书授权给深圳中传天下的与相关股权有关的所有权利，不再自行行使该等权利。During the term of this Power of Attorney, I hereby waive all the rights associated with Shares, which have been authorized to WFOE through this Power ofAttorney, and shall not exercise such rights by myself.本授权委托书以中文和英文书就，中英文版本如有冲突，应以中文版为准。This Power of Attorney is written in Chinese and English; in case there is any conflict between the Chinese version and the English version, the Chineseversion shall prevail.宋雪松Song Xuesong签署：By:日期：年月日Date:2EX8.1 10 f20f2017ex81_luokung.htm LIST OF SUBSIDIARIES AND CONSOLIDATED VARIABLE INTEREST ENTITIESExhibit 8.1List of Subsidiaries of the CompanyName of EntityJurisdiction of Incorporation/OrganizationLK Technology Ltd.British Virgin IslandsTopsky Infotech Holdings Pte Ltd.SingaporeSuperengine Holdings LimitedBritish Virgin IslandsMMB LimitedHong KongMobile Media (China Limited)Hong KongZhong Chuan Tian Xia Information and Technology (Beijing) LimitedBeijing, PRCZhong Chuan Xia Information and Technology (Shenzhen) LimitedShenzhen, PRCBeijing Zhong Chuan Shi Xun Technology Limited (VIE Entity)Beijing, PRCJiangsu Zhong Chuan Rui You Information and Technology Limited (VIE Entity)Jiangsu, PRCHuoerguosi Luokuang Information and Technology Limited (VIE Entity)Huoerguosi, PRCShenzhen Jiu Zhou Shi Dai Digital Technology LimitedShenzhen, PRCEX10.1 11 f20f2017ex101_luokung.htm EMPLOYMENT AGREEMENT, DATED AUGUST 19, 2018, BETWEEN LUOKUNG TECHNOLOGY CORP. AND XUESONGSONGExhibit 10.1EMPLOYMENT AGREEMENTThis EMPLOYMENT AGREEMENT (the “Agreement”) is made and entered into as of this 19 day of August, 2018 (the “Effective Date”), by and between LuokungTechnology Corp., a British Virgin Islands corporation (the “Company”) and Xuesong Song (the “Executive”), a Chinese citizen.WITNESSETH:WHEREAS, the parties desire to enter into this Agreement setting forth the terms and conditions of the employment relationship between the Executiveand the Company.NOW, THEREFORE, in consideration of the foregoing premises and the mutual covenants and agreements contained herein, the parties hereto agree asfollows:1. EMPLOYMENT.1.1 Agreement to Employ. The Company hereby agrees to employ Executive, and Executive hereby agrees to serve, subject to the provisions of thisAgreement, as an officer and employee of the Company.1.2 Duties and Schedule. Executive shall serve as the Company’s Chief Executive Officer (“CEO”). The responsibilities of the Executive shall be subject tothe bylaws of the Company and determined by the Board of Directors of the Company (the “Board”). The Executive shall report directly to the Board and shall havesuch responsibilities as designated by the Board of the Company to the extent that such responsibilities are not inconsistent with all applicable laws, regulationsand rules. Executive shall devote his best efforts and all of his business time to his position with the Company during the Term.2. TERM OF EMPLOYMENT. Unless Executive’s employment shall sooner terminate pursuant to Section 4, the Company shall employ Executive for a fouryear term commencing on the Effective Date (the “Term”), which Term shall be renewable upon mutual agreement of the Company and the Executive, as approved bythe Board.3. COMPENSATION.3.1 Salary. Executive’s salary during the Term shall be $Nil.3.2 Bonus. At the sole discretion of the Board, or any committee duly designated by the Board and authorized to act thereto, the Executive shall be eligiblefor an annual cash bonus.3.3 Vacation. Executive shall be entitled to 8 days of paid vacation per year. In the event that Executive remains employed by the Company for 3 years ormore, Executive shall be entitled to 12 days of paid vacation.3.4 Business Expenses. Executive shall be reimbursed by the Company for all ordinary and necessary expenses incurred by Executive; provided that theyare incurred and approved in writing in accordance with the Company’s expense policy.3.5 Benefits. During the Term, Executive shall be allowed to participate, on the same basis generally as other employees of the Company, in all generalemployee benefit plans and programs, including improvements or modifications of the same, which may exist as of the Effective Date or thereafter and which aremade available by the Company to all or substantially all of its employees. Such benefits, plans, and programs may include, without limitation, any health, and dentalinsurance or 401K programs, if and when instituted. Any benefit plan currently existing or instituted by the Company after the Effective Date may be altered, changeor discontinued by the Company at its sole discretion and at any time without obligation of any nature to Executive. Except as specifically provided herein, nothingin this Agreement is to be construed or interpreted to increase or alter in any way the rights, participation, coverage, or benefits under such benefit plans orprograms to other than those provided to other employees pursuant to the terms and conditions of such benefit plans and programs. 14. TERMINATION.4.1 Death. This Agreement shall terminate immediately upon the death of Executive, and Executive’s estate or Executive’s legal representative, as the casemay be, shall be entitled to Executive’s accrued and unpaid Salary as of the date of Executive’s death, plus all other compensation and benefits that were vestedthrough the date of Executive’s death.4.2 Disability. In the event of Executive’s Disability, this Agreement shall terminate and Executive shall be entitled to (a) accrued and unpaid Salary andvacation through the first date that a Disability is determined; and (b) all other compensation and benefits that were vested through the first date that a Disabilityhas been determined. “Disability” means the good faith determination of the Board that Executive has become so physically or mentally incapacitated or disabled asto be unable to satisfactorily perform his duties hereunder for a period of ninety (90) consecutive calendar days or for one hundred twenty (120) days in any threehundred sixty (360) day period, such determination based upon a certificate as to such physical or mental disability issued by a licensed physician and/orpsychiatrist (as the case may be) mutually agreed upon by Executive and the Company.4.3 Termination by Company for Cause. The Company may terminate the Executive for Cause and such termination shall take effect upon the receipt byExecutive of the Notice of Termination. Upon the effective date of the termination for Cause, Executive shall be solely entitled to accrued and unpaid Salary throughsuch effective date. “Cause” means: (i) engaging in any act, omission or misconduct that is injurious to the Company or an affiliate; (ii) gross negligence or willfulmisconduct in connection with the performance of duties; (iii) conviction of a criminal offense (other than minor traffic offenses); (iv) fraud, embezzlement ormisappropriation of funds or property of the Company or an affiliate; (v) material breach of any term of any employment or other services, confidentiality, intellectualproperty or noncompetition agreements, if any, between the Executive and the Company or an affiliate; (vi) the entry of an order duly issued by any regulatoryagency (including federal, state and local regulatory agencies and selfregulatory bodies) having jurisdiction over the Company or an affiliate requiring the removalof the Executive from any office held with the Company or prohibiting the Executive from participating in the business or affairs of the Company or any affiliate; or(vii) the revocation or threatened revocation of any of the Company’s or an affiliate’s government licenses, permits or approvals, which is primarily due to theExecutive’s action or inaction and such revocation or threatened revocation would be alleviated or mitigated in any material respect by the termination of theExecutive’s employment or services with the Company or an affiliate. 4.4 Voluntary Termination by Executive. The Executive may voluntarily terminate his employment for any reason and such termination shall take effect 30days after the receipt by Company of the Notice of Termination. Upon the effective date of such termination, Executive shall be entitled to (a) accrued and unpaidSalary and vacation through such termination date; and (b) all other compensation and benefits that were vested through such termination date. In the eventExecutive is terminated without notice, it shall be deemed a termination by the Company for Cause.4.5 Notice of Termination. Any termination of the employment by the Company or the Executive shall be communicated by a notice in accordance withSection 8.4 of this Agreement (the “Notice of Termination”). Such notice shall (a) indicate the specific termination provision in this Agreement relied upon and (b) ifthe termination is for Cause, the date on which the Executive’s employment is to be terminated.4.6 Severance. The Executive shall not be entitled to severance payments upon any termination provided in Section 4 herein.5. EMPLOYEE’S REPRESENTATION. The Executive represents and warrants to the Company that: (a) he is subject to no contractual, fiduciary or otherobligation which may affect the performance of his duties under this Agreement; (b) he has terminated, in accordance with their terms, any contractual obligationwhich may affect his performance under this Agreement; and (c) his employment with the Company will not require him to use or disclose proprietary or confidentialinformation of any other person or entity.26. CONFIDENTIAL INFORMATION Except as permitted or directed by the Board of Directors of the Company in writing, during the time the Executive isemployed by the Company or at any time thereafter, the Executive shall not use for his personal purposes nor divulge, furnish, or make accessible to anyone or usein any way (other than in the ordinary course of the business of the Company) any confidential or secret information or knowledge of the Company, whetherdeveloped by himself or by others. Such confidential and/or secret information encompassed by this Section 6 includes, but is not limited to, the Company’scustomer and supplier lists, business plans, software, systems, and financial, marketing, and personnel information. The Executive agrees to refrain from any acts oromissions that would reduce the value of any confidential or secret knowledge or information to the Company, both during his employment hereunder and at anytime after the termination of his employment. The Executive’s obligations of confidentiality under this Section 6 shall not apply to any knowledge or information thatis now published publicly or that subsequently becomes generally publicly known, other than as a direct or indirect result of a breach of this Agreement by theExecutive.7. NONCOMPETITION: NONSOLICITATION; INVENTIONS.7.1 NonCompetition. During the employment of the Executive under this Agreement and for a period of six (6) months after termination of suchemployment, the Executive shall not at any time compete on his own behalf, or on behalf of any other person or entity, with the Company or any of its affiliateswithin all territories in which the Company does business with respect to the business of the Company or any of its affiliates as such business shall be conductedon the date hereof or during the employment of the Executive under this Agreement. The ownership by the Executive of not more than 5% of a corporation,partnership or other enterprise shall not constitute a violation hereof.7.2 NonSolicitation. During the employment of the Executive under this Agreement and thereafter Executive shall not at any time (i) solicit or induce, onhis own behalf or on behalf of any other person or entity, any employee of the Company or any of its affiliates to leave the employ of the Company or any of itsaffiliates; or (ii) solicit or induce, on his own behalf or on behalf of any other person or entity, any customer or Prospective Customer of the Company or any of theirrespective affiliates to reduce its business with the Company or any of its affiliates. For the purposes of this Agreement, “Prospective Customer” shall mean anyindividual, corporation, trust or other business entity which has either (a) entered into a nondisclosure agreement with the Company or any Company subsidiary oraffiliate or (b) has within the preceding 12 months received a currently pending and not rejected written proposal in reasonable detail from the Company or any ofthe Company’s subsidiary or affiliate.7.3 Inventions and Patents. The Company shall be entitled to the sole benefit and exclusive ownership of any inventions or improvements in products,processes, or other things that may be made or discovered by Executive while he is in the service of the Company, and all patents for the same. During the Term,Executive shall do all acts necessary or required by the Company to give effect to this section and, following the Term, Executive shall do all acts reasonablynecessary or required by the Company to give effect to this section. In all cases, the Company shall pay all costs and fees associated with such acts by Executive.7.4 Return of Property. The Executive agrees that all property in the Executive’s possession that he obtains or is assigned in the course of his employmentwith the Company, including, without limitation, all documents, reports, manuals, memoranda, customer lists, credit cards, keys, access cards, and all other propertyrelating in any way to the business of the Company, is the exclusive property of the Company, even if the Executive authored, created, or assisted in authoring orcreating such property. The Executive shall return to the Company all such property immediately upon termination of employment or at such earlier time as theCompany may request.7.5Court Ordered Revisions.If any portion of this Section 7 is found by a court of competent jurisdiction to be invalid or unenforceable, but would be validand enforceable if modified, this Section 7 shall apply with such modifications necessary to make this Section 7 valid and enforceable. Any portion of this Section 7not required to be so modified shall remain in full force and effect and not be affected thereby.7.6 Specific Performance. The Executive acknowledges that the remedy at law for any breach of any of the provisions of Section 7 will be inadequate, andthat the Company shall be entitled, in addition to any remedy at law or in equity, to preliminary and permanent injunctive relief and specific performance.38. MISCELLANEOUS.8.1 Indemnification. The Company and each of its subsidiaries shall, to the maximum extent provided under applicable law, indemnify and hold Executiveharmless from and against any expenses, including reasonable attorney’s fees, judgments, fines, settlements and other legally permissible amounts (“Losses”),incurred in connection with any proceeding arising out of, or related to, Executive’s employment by the Company, other than any such Losses incurred as a result ofExecutive’s negligence or willful misconduct. The Company shall, or shall cause a subsidiary thereof to, advance to Executive any expenses, including attorney’sfees and costs of settlement, incurred in defending any such proceeding to the maximum extent permitted by applicable law. Such costs and expenses incurred byExecutive in defense of any such proceeding shall be paid by the Company or applicable subsidiary in advance of the final disposition of such proceeding promptlyupon receipt by the Company of (a) written request for payment; (b) appropriate documentation evidencing the incurrence, amount and nature of the costs andexpenses for which payment is being sought; and (c) an undertaking adequate under applicable law made by or on behalf of Executive to repay the amounts soadvanced if it shall ultimately be determined pursuant to any nonappealable judgment or settlement that Executive is not entitled to be indemnified by the Companyor any subsidiary thereof. The Company will provide Executive with coverage under all directors and officers liability insurance policies that it has in effect duringthe Term, with no deductible to Executive. 8.2 Applicable Law. Except as may be otherwise provided herein, this Agreement shall be governed by and construed in accordance with the laws ofChina, applied without reference to principles of conflict of laws. Any dispute arising from or in connection with this Agreement shall be submitted to ShanghaiInternational Arbitration Center (the “Center”) for arbitration under the then effective rules of the Center. The arbitration award shall be the sole, binding, exclusiveand final remedy for resolving any dispute between the parties.8.3 Amendments. This Agreement may not be amended or modified otherwise than by a written agreement executed by the parties hereto or their respectivesuccessors or legal representatives.8.4 Notices. All notices and other communications hereunder shall be in writing and shall be given by handdelivery to the other party, by an internationalmail courier, or by registered or certified mail, return receipt requested, postage prepaid, addressed as follows:If to the Executive:Xuesong Song________________________________________________If to the Company:______________________________________Or to such other address as either party shall have furnished to the other in writing in accordance herewith. Notices and communications shall be effective whendelivered to the addressee.8.5 Withholding. The Company may withhold from any amounts payable under the Agreement, such federal, state and local income, unemployment, socialsecurity and similar employment related taxes and similar employment related withholdings as shall be required to be withheld pursuant to any applicable law orregulation.8.6 Severability. The invalidity or unenforceability of any provision of this Agreement shall not affect the validity or enforceability of any other provision ofthis Agreement and any such provision which is not valid or enforceable in whole shall be enforced to the maximum extent permitted by law.8.7 Captions. The captions of this Agreement are not part of the provisions and shall have no force or effect.48.8 Entire Agreement. This Agreement contains the entire agreement among the parties concerning the subject matter hereof and supersedes all prioragreements, understandings, discussions, negotiations and undertakings, whether written or oral, between the parties with respect thereto.8.9 Survival. The respective rights and obligations of the parties hereunder shall survive any termination of this Agreement or the Executive’s employmenthereunder to the extent necessary to the intended preservation of such rights and obligations.8.10 Waiver. Either Party's failure to enforce any provision or provisions of this Agreement shall not in any way be construed as a waiver of any suchprovision or provisions, or prevent that party thereafter from enforcing each and every other provision of this Agreement.8.11 Successors. This Agreement is personal to Executive and, without the prior express written consent of the Company, shall not be assignable byExecutive. This Agreement shall inure to the benefit of and be enforceable by Executive’s estate, heirs, beneficiaries, and/or legal representatives. This Agreementshall inure to the benefit of and be binding upon the Company and its successors and assigns.8.12 Joint Efforts/Counterparts. Preparation of this Agreement shall be deemed to be the joint effort of the parties hereto and shall not be construed moreseverely against any party. This Agreement may be signed in two or more counterparts, each of which shall be deemed an original and all of which together shallconstitute one and the same instrument.8.13 Representation by Counsel. Each Party hereby represents that it has had the opportunity to be represented by legal counsel of its choice inconnection with the negotiation and execution of this Agreement.IN WITNESS WHEREOF, the parties have executed this Agreement as of the day and year first above written.EXECUTIVE:LUOKUNG TECHNOLOGY CORP./s/ Xuesong Song/s/ Jie YuXuesong SongJie YuChief Financial Officer5EX10.2 12 f20f2017ex102_luokung.htm EMPLOYMENT AGREEMENT, DATED AUGUST 19, 2018, BY AND BETWEEN LUOKUNG TECHNOLOGY CORP. AND JIEYUExhibit 10.2EMPLOYMENT AGREEMENTThis EMPLOYMENT AGREEMENT (the “Agreement”) is made and entered into as of this 19 day of August, 2018 (the “Effective Date”), by and between LuokungTechnology Corp., a British Virgin Islands corporation (the “Company”) and Jie (Jay) Yu (the “Executive”), a Chinese citizen.WITNESSETH:WHEREAS, the parties desire to enter into this Agreement setting forth the terms and conditions of the employment relationship between the Executiveand the Company.NOW, THEREFORE, in consideration of the foregoing premises and the mutual covenants and agreements contained herein, the parties hereto agree asfollows:1. EMPLOYMENT.1.1 Agreement to Employ. The Company hereby agrees to employ Executive, and Executive hereby agrees to serve, subject to the provisions of thisAgreement, as an officer and employee of the Company.1.2 Duties and Schedule. Executive shall serve as the Company’s Chief Financial Officer, and be the Principal Financial Officer and Principal AccountingOfficer of the Company and responsible for all financial matters and management of the Company. The Executive shall report directly to the Company’s ChiefExecutive Officer and Board of Directors (the “Board”) and shall have such responsibilities as designated by the Chief Executive Officer or Board to the extent thatsuch responsibilities are not inconsistent with all applicable laws, regulations and rules. Executive shall devote his best efforts and all of his business time to hisposition with the Company during the Term.2. TERM OF EMPLOYMENT. Unless Executive’s employment shall sooner terminate pursuant to Section 4, the Company shall employ Executive for a fouryear term commencing on the Effective Date (the “Term”), which Term shall be renewable upon mutual agreement of the Company and the Executive, as approved bythe Board.3. COMPENSATION.3.1 Salary. Executive’s salary during the Term shall be RMB700,000 per year (the “Salary”), payable monthly.3.2 Bonus. At the sole discretion of the Board, or any committee duly designated by the Board and authorized to act thereto, the Executive shall be eligiblefor an annual cash bonus.3.3 Vacation. Executive shall be entitled to 8 days of paid vacation per year. In the event that Executive remains employed by the Company for 3 years ormore, Executive shall be entitled to 12 days of paid vacation.3.4 Business Expenses. Executive shall be reimbursed by the Company for all ordinary and necessary expenses incurred by Executive; provided that theyare incurred and approved in writing in accordance with the Company’s expense policy.3.5 Benefits. During the Term, Executive shall be allowed to participate, on the same basis generally as other employees of the Company, in all generalemployee benefit plans and programs, including improvements or modifications of the same, which may exist as of the Effective Date or thereafter and which aremade available by the Company to all or substantially all of its employees. Such benefits, plans, and programs may include, without limitation, any health, and dentalinsurance or 401K programs, if and when instituted. Any benefit plan currently existing or instituted by the Company after the Effective Date may be altered, changeor discontinued by the Company at its sole discretion and at any time without obligation of any nature to Executive. Except as specifically provided herein, nothingin this Agreement is to be construed or interpreted to increase or alter in any way the rights, participation, coverage, or benefits under such benefit plans orprograms to other than those provided to other employees pursuant to the terms and conditions of such benefit plans and programs. 14. TERMINATION.4.1 Death. This Agreement shall terminate immediately upon the death of Executive, and Executive’s estate or Executive’s legal representative, as the casemay be, shall be entitled to Executive’s accrued and unpaid Salary as of the date of Executive’s death, plus all other compensation and benefits that were vestedthrough the date of Executive’s death.4.2 Disability. In the event of Executive’s Disability, this Agreement shall terminate and Executive shall be entitled to (a) accrued and unpaid Salary andvacation through the first date that a Disability is determined; and (b) all other compensation and benefits that were vested through the first date that a Disabilityhas been determined. “Disability” means the good faith determination of the Board that Executive has become so physically or mentally incapacitated or disabled asto be unable to satisfactorily perform his duties hereunder for a period of ninety (90) consecutive calendar days or for one hundred twenty (120) days in any threehundred sixty (360) day period, such determination based upon a certificate as to such physical or mental disability issued by a licensed physician and/orpsychiatrist (as the case may be) mutually agreed upon by Executive and the Company.4.3 Termination by Company for Cause. The Company may terminate the Executive for Cause and such termination shall take effect upon the receipt byExecutive of the Notice of Termination. Upon the effective date of the termination for Cause, Executive shall be solely entitled to accrued and unpaid Salary throughsuch effective date. “Cause” means: (i) engaging in any act, omission or misconduct that is injurious to the Company or an affiliate; (ii) gross negligence or willfulmisconduct in connection with the performance of duties; (iii) conviction of a criminal offense (other than minor traffic offenses); (iv) fraud, embezzlement ormisappropriation of funds or property of the Company or an affiliate; (v) material breach of any term of any employment or other services, confidentiality, intellectualproperty or noncompetition agreements, if any, between the Executive and the Company or an affiliate; (vi) the entry of an order duly issued by any regulatoryagency (including federal, state and local regulatory agencies and selfregulatory bodies) having jurisdiction over the Company or an affiliate requiring the removalof the Executive from any office held with the Company or prohibiting the Executive from participating in the business or affairs of the Company or any affiliate; or(vii) the revocation or threatened revocation of any of the Company’s or an affiliate’s government licenses, permits or approvals, which is primarily due to theExecutive’s action or inaction and such revocation or threatened revocation would be alleviated or mitigated in any material respect by the termination of theExecutive’s employment or services with the Company or an affiliate. 4.4 Voluntary Termination by Executive. The Executive may voluntarily terminate his employment for any reason and such termination shall take effect 30days after the receipt by Company of the Notice of Termination. Upon the effective date of such termination, Executive shall be entitled to (a) accrued and unpaidSalary and vacation through such termination date; and (b) all other compensation and benefits that were vested through such termination date. In the eventExecutive is terminated without notice, it shall be deemed a termination by the Company for Cause.4.5 Notice of Termination. Any termination of the employment by the Company or the Executive shall be communicated by a notice in accordance withSection 8.4 of this Agreement (the “Notice of Termination”). Such notice shall (a) indicate the specific termination provision in this Agreement relied upon and (b) ifthe termination is for Cause, the date on which the Executive’s employment is to be terminated.4.6 Severance. The Executive shall not be entitled to severance payments upon any termination provided in Section 4 herein.5. EMPLOYEE’S REPRESENTATION. The Executive represents and warrants to the Company that: (a) he is subject to no contractual, fiduciary or otherobligation which may affect the performance of his duties under this Agreement; (b) he has terminated, in accordance with their terms, any contractual obligationwhich may affect his performance under this Agreement; and (c) his employment with the Company will not require him to use or disclose proprietary or confidentialinformation of any other person or entity.26. CONFIDENTIAL INFORMATION Except as permitted or directed by the Board of Directors of the Company in writing, during the time the Executive isemployed by the Company or at any time thereafter, the Executive shall not use for his personal purposes nor divulge, furnish, or make accessible to anyone or usein any way (other than in the ordinary course of the business of the Company) any confidential or secret information or knowledge of the Company, whetherdeveloped by himself or by others. Such confidential and/or secret information encompassed by this Section 6 includes, but is not limited to, the Company’scustomer and supplier lists, business plans, software, systems, and financial, marketing, and personnel information. The Executive agrees to refrain from any acts oromissions that would reduce the value of any confidential or secret knowledge or information to the Company, both during his employment hereunder and at anytime after the termination of his employment. The Executive’s obligations of confidentiality under this Section 6 shall not apply to any knowledge or information thatis now published publicly or that subsequently becomes generally publicly known, other than as a direct or indirect result of a breach of this Agreement by theExecutive.7. NONCOMPETITION: NONSOLICITATION; INVENTIONS.7.1 NonCompetition. During the employment of the Executive under this Agreement and for a period of six (6) months after termination of suchemployment, the Executive shall not at any time compete on his own behalf, or on behalf of any other person or entity, with the Company or any of its affiliateswithin all territories in which the Company does business with respect to the business of the Company or any of its affiliates as such business shall be conductedon the date hereof or during the employment of the Executive under this Agreement. The ownership by the Executive of not more than 5% of a corporation,partnership or other enterprise shall not constitute a violation hereof.7.2 NonSolicitation. During the employment of the Executive under this Agreement and thereafter Executive shall not at any time (i) solicit or induce, onhis own behalf or on behalf of any other person or entity, any employee of the Company or any of its affiliates to leave the employ of the Company or any of itsaffiliates; or (ii) solicit or induce, on his own behalf or on behalf of any other person or entity, any customer or Prospective Customer of the Company or any of theirrespective affiliates to reduce its business with the Company or any of its affiliates. For the purposes of this Agreement, “Prospective Customer” shall mean anyindividual, corporation, trust or other business entity which has either (a) entered into a nondisclosure agreement with the Company or any Company subsidiary oraffiliate or (b) has within the preceding 12 months received a currently pending and not rejected written proposal in reasonable detail from the Company or any ofthe Company’s subsidiary or affiliate.7.3 Inventions and Patents. The Company shall be entitled to the sole benefit and exclusive ownership of any inventions or improvements in products,processes, or other things that may be made or discovered by Executive while he is in the service of the Company, and all patents for the same. During the Term,Executive shall do all acts necessary or required by the Company to give effect to this section and, following the Term, Executive shall do all acts reasonablynecessary or required by the Company to give effect to this section. In all cases, the Company shall pay all costs and fees associated with such acts by Executive.7.4 Return of Property. The Executive agrees that all property in the Executive’s possession that he obtains or is assigned in the course of his employmentwith the Company, including, without limitation, all documents, reports, manuals, memoranda, customer lists, credit cards, keys, access cards, and all other propertyrelating in any way to the business of the Company, is the exclusive property of the Company, even if the Executive authored, created, or assisted in authoring orcreating such property. The Executive shall return to the Company all such property immediately upon termination of employment or at such earlier time as theCompany may request.7.5Court Ordered Revisions.If any portion of this Section 7 is found by a court of competent jurisdiction to be invalid or unenforceable, but would be validand enforceable if modified, this Section 7 shall apply with such modifications necessary to make this Section 7 valid and enforceable. Any portion of this Section 7not required to be so modified shall remain in full force and effect and not be affected thereby.7.6 Specific Performance. The Executive acknowledges that the remedy at law for any breach of any of the provisions of Section 7 will be inadequate, andthat the Company shall be entitled, in addition to any remedy at law or in equity, to preliminary and permanent injunctive relief and specific performance.38. MISCELLANEOUS.8.1 Indemnification. The Company and each of its subsidiaries shall, to the maximum extent provided under applicable law, indemnify and hold Executiveharmless from and against any expenses, including reasonable attorney’s fees, judgments, fines, settlements and other legally permissible amounts (“Losses”),incurred in connection with any proceeding arising out of, or related to, Executive’s employment by the Company, other than any such Losses incurred as a result ofExecutive’s negligence or willful misconduct. The Company shall, or shall cause a subsidiary thereof to, advance to Executive any expenses, including attorney’sfees and costs of settlement, incurred in defending any such proceeding to the maximum extent permitted by applicable law. Such costs and expenses incurred byExecutive in defense of any such proceeding shall be paid by the Company or applicable subsidiary in advance of the final disposition of such proceeding promptlyupon receipt by the Company of (a) written request for payment; (b) appropriate documentation evidencing the incurrence, amount and nature of the costs andexpenses for which payment is being sought; and (c) an undertaking adequate under applicable law made by or on behalf of Executive to repay the amounts soadvanced if it shall ultimately be determined pursuant to any nonappealable judgment or settlement that Executive is not entitled to be indemnified by the Companyor any subsidiary thereof. The Company will provide Executive with coverage under all directors and officers liability insurance policies that it has in effect duringthe Term, with no deductible to Executive. 8.2 Applicable Law. Except as may be otherwise provided herein, this Agreement shall be governed by and construed in accordance with the laws ofChina, applied without reference to principles of conflict of laws. Any dispute arising from or in connection with this Agreement shall be submitted to ShanghaiInternational Arbitration Center (the “Center”) for arbitration under the then effective rules of the Center. The arbitration award shall be the sole, binding, exclusiveand final remedy for resolving any dispute between the parties.8.3 Amendments. This Agreement may not be amended or modified otherwise than by a written agreement executed by the parties hereto or their respectivesuccessors or legal representatives.8.4 Notices. All notices and other communications hereunder shall be in writing and shall be given by handdelivery to the other party, by an internationalmail courier, or by registered or certified mail, return receipt requested, postage prepaid, addressed as follows:If to the Executive:Jie Yu________________________________________If to the Company:______________________________________Or to such other address as either party shall have furnished to the other in writing in accordance herewith. Notices and communications shall be effective whendelivered to the addressee.8.5 Withholding. The Company may withhold from any amounts payable under the Agreement, such federal, state and local income, unemployment, socialsecurity and similar employment related taxes and similar employment related withholdings as shall be required to be withheld pursuant to any applicable law orregulation.8.6 Severability. The invalidity or unenforceability of any provision of this Agreement shall not affect the validity or enforceability of any other provision ofthis Agreement and any such provision which is not valid or enforceable in whole shall be enforced to the maximum extent permitted by law.48.7 Captions. The captions of this Agreement are not part of the provisions and shall have no force or effect.8.8 Entire Agreement. This Agreement contains the entire agreement among the parties concerning the subject matter hereof and supersedes all prioragreements, understandings, discussions, negotiations and undertakings, whether written or oral, between the parties with respect thereto.8.9 Survival. The respective rights and obligations of the parties hereunder shall survive any termination of this Agreement or the Executive’s employmenthereunder to the extent necessary to the intended preservation of such rights and obligations.8.10 Waiver. Either Party's failure to enforce any provision or provisions of this Agreement shall not in any way be construed as a waiver of any suchprovision or provisions, or prevent that party thereafter from enforcing each and every other provision of this Agreement.8.11 Successors. This Agreement is personal to Executive and, without the prior express written consent of the Company, shall not be assignable byExecutive. This Agreement shall inure to the benefit of and be enforceable by Executive’s estate, heirs, beneficiaries, and/or legal representatives. This Agreementshall inure to the benefit of and be binding upon the Company and its successors and assigns.8.12 Joint Efforts/Counterparts. Preparation of this Agreement shall be deemed to be the joint effort of the parties hereto and shall not be construed moreseverely against any party. This Agreement may be signed in two or more counterparts, each of which shall be deemed an original and all of which together shallconstitute one and the same instrument.8.13 Representation by Counsel. Each Party hereby represents that it has had the opportunity to be represented by legal counsel of its choice inconnection with the negotiation and execution of this Agreement.IN WITNESS WHEREOF, the parties have executed this Agreement as of the day and year first above written.EXECUTIVE:LUOKUNG TECHNOLOGY CORP./s/ Jie Yu/s/ Xuesong SongJie YuXuesong SongChief Executive Officer5EX12.1 13 f20f2017ex121_luokung.htm CERTIFICATIONExhibit 12.1Certification by the Chief Executive OfficerPursuant to Section 302 of the SarbanesOxley Act of 2002I, Xuesong Song, the Chief Executive Officer of Luokung Technology Corp. (the “Company”), certify that:1.I have reviewed this transition report on Form 20F of the Company;2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statementsmade, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financialcondition, results of operations and cash flows of the Company as of, and for, the periods presented in this report;4.The Company’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange ActRules 13a15(e) and 15d15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a15(f) and 15d15(f)) for the Company andhave:(a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure thatmaterial information relating to the Company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during theperiod in which this report is being prepared;(b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, toprovide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance withgenerally accepted accounting principles;(c)Evaluated the effectiveness of the Company’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of thedisclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and(d)Disclosed in this report any change in the Company’s internal control over financial reporting that occurred during the period covered by the transition reportthat has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting; and5.The Company’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Company’sauditors and the audit committee of the Company’s board of directors (or persons performing the equivalent functions):(a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely toadversely affect the Company’s ability to record, process, summarize and report financial information; and(b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the Company’s internal control over financialreporting.Date: October 12, 2018By:/s/ Xuesong SongXuesong SongChief Executive Officer(principal executive officer)EX12.2 14 f20f2017ex122_luokung.htm CERTIFICATIONExhibit 12.2Certification by the Chief Financial OfficerPursuant to Section 302 of the SarbanesOxley Act of 2002I, Jie Yu, the Chief Financial Officer of Luokung Technology Corp. (the “Company”), certify that:1.I have reviewed this transition report on Form 20F of the Company;2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statementsmade, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financialcondition, results of operations and cash flows of the Company as of, and for, the periods presented in this report;4.The Company’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange ActRules 13a15(e) and 15d15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a15(f) and 15d15(f)) for the Company andhave:(a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure thatmaterial information relating to the Company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during theperiod in which this report is being prepared;(b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, toprovide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance withgenerally accepted accounting principles;(c)Evaluated the effectiveness of the Company’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of thedisclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and(d)Disclosed in this report any change in the Company’s internal control over financial reporting that occurred during the period covered by the transition reportthat has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting; and5.The Company’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Company’sauditors and the audit committee of the Company’s board of directors (or persons performing the equivalent functions):(a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely toadversely affect the Company’s ability to record, process, summarize and report financial information; and(b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the Company’s internal control over financialreporting.Date: October 12, 2018By:/s/ Jie YuJie YuChief Financial Officer(principal financial officer and principal accounting officer)EX13.1 15 f20f2017ex131_luokung.htm CERTIFICATIONExhibit 13.1Certification by the Chief Executive OfficerPursuant to Section 906 of the SarbanesOxley Act of 2002In connection with the Transition report on Form 20F of Luokung Technology Corp. (the “Company”) for the year ended December 31, 2017 as filed withthe Securities and Exchange Commission on the date hereof (the “Report”), I, Xuesong Song, Chairman and Chief Executive Officer of the Company, certify,pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the SarbanesOxley Act of 2002, that to my knowledge:(1)The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and(2)The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.Date: October 12, 2018By:/s/ Xuesong SongXuesong SongChief Executive Officer(principal executive officer)EX13.2 16 f20f2017ex132_luokung.htm CERTIFICATIONExhibit 13.2Certification by the Chief Financial OfficerPursuant to Section 906 of the SarbanesOxley Act of 2002In connection with the Transition report on Form 20F of Luokung Technology Corp. (the “Company”) for the year ended December 31, 2017 as filed withthe Securities and Exchange Commission on the date hereof (the “Report”), I, Jie Yu, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. Section1350, as adopted pursuant to Section 906 of the SarbanesOxley Act of 2002, that to my knowledge:(1)The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and(2)The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.Date: October 12, 2018By:/s/ Jie YuJie YuChief Financial Officer(principal financial officer and principal accounting officer)地址：Address:.b)陈蔚力Chen Weili地址：Address:c)王平Wang Ping地址：Address:17秘密文件 Strictly Confidentiald)刘东来Liu Donglai地址：Address:丙方：北京中传视讯科技有限公司Party C: Beijing Mobile Vision Technology Co., Ltd.地址：北京市朝阳区光华路9号SOHO3QLAB32Address: LAB32, SOHO3Q, No 9, Guanghua Road, Chaoyang District, Beijing.收件人：宋雪松Attn.: Song Xuesong14.3任何一方可按本条规定随时给其他各方发出通知来改变其接收通知的地址。Any Party may at any time change its address for notices by a notice delivered to the other Parties in accordance with the terms hereof.15.分割性Severability如果本协议有任何一条或多条规定根据任何法律或法规在任何方面被裁定为无效、不合法或不可执行，本协议其余规定的有效性、合法性或可执行性不应因此在任何方面受到影响或损害。各方应通过诚意磋商，争取以法律许可以及各方期望的最大限度内有效的规定取代那些无效、不合法或不可执行的规定，而该等有效的规定所产生的经济效果应尽可能与那些无效、不合法或不能强制执行的规定所产生的经济效果相似。In the event that one or several of the provisions of this Contract are found to be invalid, illegal or unenforceable in any aspect in accordance with any laws orregulations, the validity, legality or enforceability of the remaining provisions of this Contract shall not be affected or compromised in any respect. The Partiesshall strive in good faith to replace such invalid, illegal or unenforceable provisions with effective provisions that accomplish to the greatest extent permittedby law and the intentions of the Parties, and the economic effect of such effective provisions shall be as close as possible to the economic effect of thoseinvalid, illegal or unenforceable provisions.18秘密文件 Strictly Confidential16.附件Attachments本协议所列附件，为本协议不可分割的组成部分。The attachments set forth herein shall be an integral part of this Agreement.17.生效Effectiveness17.1本协议的任何修改、补充或变更，均须采用书面形式，经各方签字或盖章并按规定办理政府登记（如需）后生效。Any amendments, changes and supplements to this Agreement shall be in writing and shall become effective upon completion of the governmentalfiling procedures (if applicable) after the affixation of the signatures or seals of the Parties.17.2本协议以中文和英文书就，一式六份，质权人、所有出质人和丙方各持一份，具有同等效力；中英文版本如有冲突，应以中文版为准。This Agreement is written in Chinese and English in six copies. Each Pledgors, Pledgee and Party C shall hold one copy respectively. Each copy of thisAgreement shall have equal validity. In case there is any conflict between the Chinese version and the English version, the Chinese version shall prevail.本页其余部分刻意留为空白The Remainder of this page is intentionally left blank19秘密文件 Strictly Confidential有鉴于此，各方已使得经其授权的代表于文首所述日期签署了本股权质押协议并即生效，以昭信守。IN WITNESS WHEREOF, the Parties have caused their authorized representatives to execute this Equity Interest Pledge Agreement as of the date first abovewritten.甲方：中传天下信息科技（深圳）有限公司（盖章）Party A: Zhongchuan Tianxia Information Technology (Shenzhen) Co., Ltd. (Seal)签字：By:/s/ Hong Ting姓名：洪婷Name: Hong Ting职务：总经理Title: General Manager秘密文件 Strictly Confidential有鉴于此，各方已使得经其授权的代表于文首所述日期签署了本股权质押协议并即生效，以昭信守。IN WITNESS WHEREOF, the Parties have caused their authorized representatives to execute this Equity Interest Pledge Agreement as of the date first abovewritten.乙方：Party B:宋雪松Song Xuesong签署：By:/s/ Song Xuesong秘密文件 Strictly Confidential有鉴于此，各方已使得经其授权的代表于文首所述日期签署了本股权质押协议并即生效，以昭信守。IN WITNESS WHEREOF, the Parties have caused their authorized representatives to execute this Equity Interest Pledge Agreement as of the date first abovewritten.乙方：Party B:陈蔚力Chen Weili签字：By:/s/ Chen Weili秘密文件 Strictly Confidential有鉴于此，各方已使得经其授权的代表于文首所述日期签署了本股权质押协议并即生效，以昭信守。IN WITNESS WHEREOF, the Parties have caused their authorized representatives to execute this Equity Interest Pledge Agreement as of the date first abovewritten.乙方：Party B:王平Wang Ping签字：By:/s/ Wang Ping秘密文件 Strictly Confidential有鉴于此，各方已使得经其授权的代表于文首所述日期签署了本股权质押协议并即生效，以昭信守。IN WITNESS WHEREOF, the Parties have caused their authorized representatives to execute this Equity Interest Pledge Agreement as of the date first abovewritten.乙方：Party B:刘东来Liu Donglai签字：By:/s/ Liu Donglai秘密文件 Strictly Confidential有鉴于此，各方已使得经其授权的代表于文首所述日期签署了本股权质押协议并即生效，以昭信守。IN WITNESS WHEREOF, the Parties have caused their authorized representatives to execute this Equity Interest Pledge Agreement as of the date first abovewritten.丙方：北京中传视讯科技有限公司（盖章）Party B: Beijing Mobile Vision Technology Co., Ltd. (Seal)签字：By:/s/ Song Xuesong姓名：宋雪松Name: Song Xuesong职务：董事长Title: Chairman of the Board秘密文件 Strictly Confidential附件：Attachments:1.北京中传视讯科技有限公司股东名册；Shareholders' Register of Beijing Mobile Vision Technology Co., Ltd.;2.北京中传视讯科技有限公司的出资证明书；The Capital Contribution Certificate of Beijing Mobile Vision Technology Co., Ltd.;3.独家业务合作协议。Exclusive Business Cooperation Agreement.秘密文件 Strictly ConfidentialEX4.20 6 f20f2017ex420_luokung.htm POWER OF ATTORNEY BY WEILI CHEN, DATED AUGUST 31, 2015Exhibit 4.20授权委托书Power of Attorney本人陈蔚力，持有中华人民共和国身份证（号码：*************** 516），通讯地址为广东省，系拥有北京中传视讯科技有限公司（“中传视讯”）14.0848%股权（“相关股权”）的股东，就相关股权，特此不可撤销地授权中传天下信息科技（深圳）有限公司（“深圳中传天下”）在本授权委托书的有效期内行使如下权利：The undersigned, Chen Weili, a person with the PRC identification card number of ***************516, with address at: Guangdong, and a holder of14.0848% of the entire registered capital ("Shares") in Beijing Mobile Vision Technology Co., Ltd. ("Mobile Vision"), hereby irrevocably authorize ZhongchuanTianxia Information Technology (Shenzhen) Co., Ltd. ("WFOE") to exercise the following rights relating to Shares during the term of this Power of Attorney:授权深圳中传天下作为本人唯一的排他的代理人就有关相关股权的事宜全权代表本人行使包括但不限于如下的权利：1）参加中传视讯的股东会；2）行使按照法律和中传视讯章程规定本人所享有的全部股东权利和股东表决权，包括但不限于出售或转让或质押或处置相关股权的全部或任何一部分；以及3）作为本人的授权代表指定和任命中传视讯的法定代表人、董事和/或执行董事、监事、经理以及其他高级管理人员等。但中传视讯利用该等授权做出违反中华人民共和国法律的决定无效。WFOE is hereby authorized to act on behalf of myself as my exclusive agent and attorney with respect to all matters concerning My Shareholding, includingwithout limitation: 1) attending shareholders' meetings of Mobile Vision; 2) exercising all the shareholder's rights and shareholder's voting rights I am entitled tounder the laws of China and Articles of Association of Mobile Vision, including but not limited to the sale or transfer or pledge or disposition of My Shareholding inpart or in whole; and 3) designating and appointing on behalf of myself the legal representative, director and/or executive director, supervisor, manager and othersenior management members of Mobile Vision. However, the decision made by Mobile Vision taking advantage of the power of attorney which is against the PRClaws shall be null and void.1深圳中传天下将有权在授权范围内代表本人签署独家购买权协议（本人应要求作为协议方）中约定的转让协议，如期履行本人作为协议一方的与本授权委托书同日签署的股权质押协议和独家购买权协议，该权利的行使将不对本授权形成任何限制。Without limiting the generality of the powers granted hereunder, WFOE shall have the power and authority under this Power of Attorney to execute theTransfer Contracts stipulated in Exclusive Option Agreement, to which I am required to be a party, on behalf of myself, and to effect the terms of the Share PledgeAgreement and Exclusive Option Agreement, both dated the date hereof, to which I am a party.深圳中传天下就相关股权的一切行为均视为本人的行为，签署的一切文件均视为本人签署，本人会予以承认。All the actions associated with Shares conducted by WFOE shall be deemed as my own actions, and all the documents related to Shares executed by WFOEshall be deemed to be executed by me. I hereby acknowledge and ratify those actions and/or documents by the WFOE.深圳中传天下有转委托权，可以就上述事项的办理自行再委托其他人或单位而不必事先通知本人或获得本人的同意。WFOE is entitled to reauthorize or assign its rights related to the aforesaid matters to any other person or entity at its own discretion and without giving priornotice to me or obtaining my consent.在本人为中传视讯的股东期间，本授权委托书不可撤销并持续有效，自授权委托书签署之日起算。This Power of Attorney is coupled with an interest and shall be irrevocable and continuously valid from the date of execution of this Power of Attorney, solong as I am a shareholder of Mobile Vision.本授权委托书期间，本人特此放弃已经通过本授权委托书授权给深圳中传天下的与相关股权有关的所有权利，不再自行行使该等权利。During the term of this Power of Attorney, I hereby waive all the rights associated with Shares, which have been authorized to WFOE through this Power ofAttorney, and shall not exercise such rights by myself.本授权委托书以中文和英文书就，中英文版本如有冲突，应以中文版为准。This Power of Attorney is written in Chinese and English; in case there is any conflict between the Chinese version and the English version, the Chineseversion shall prevail.陈蔚力Chen Weili签署：By:日期：年月日Date:2EX4.21 7 f20f2017ex421_luokung.htm POWER OF ATTORNEY BY PING WANG, DATED AUGUST 31, 2015Exhibit 4.21授权委托书Power of Attorney本人王平，持有中华人民共和国身份证（号码：***************01x），通讯地址为广东省，系拥有北京中传视讯科技有限公司（“中传视讯”）19.9872%股权（“相关股权”）的股东，就相关股权，特此不可撤销地授权中传天下信息科技（深圳）有限公司（“深圳中传天下”）在本授权委托书的有效期内行使如下权利：The undersigned, Wang Ping, a person with the PRC identification card number of ***************01x, with address at Guangdong, and a holder of19.9872% of the entire registered capital (“Shares”) in Beijing Mobile Vision Technology Co., Ltd. (“Mobile Vision”), hereby irrevocably authorize ZhongchuanTianxia Information Technology (Shenzhen) Co., Ltd. (“WFOE”) to exercise the following rights relating to Shares during the term of this Power of Attorney:授权深圳中传天下作为本人唯一的排他的代理人就有关相关股权的事宜全权代表本人行使包括但不限于如下的权利：1）参加中传视讯的股东会；2）行使按照法律和中传视讯章程规定本人所享有的全部股东权利和股东表决权，包括但不限于出售或转让或质押或处置相关股权的全部或任何一部分；以及3）作为本人的授权代表指定和任命中传视讯的法定代表人、董事和/或执行董事、监事、经理以及其他高级管理人员等。但中传视讯利用该等授权做出违反中华人民共和国法律的决定无效。WFOE is hereby authorized to act on behalf of myself as my exclusive agent and attorney with respect to all matters concerning My Shareholding, includingwithout limitation: 1) attending shareholders’ meetings of Mobile Vision; 2) exercising all the shareholder’s rights and shareholder’s voting rights I am entitled tounder the laws of China and Articles of Association of Mobile Vision, including but not limited to the sale or transfer or pledge or disposition of My Shareholding inpart or in whole; and 3) designating and appointing on behalf of myself the legal representative, director and/or executive director, supervisor, manager and othersenior management members of Mobile Vision. However, the decision made by Mobile Vision taking advantage of the power of attorney which is against the PRClaws shall be null and void.1深圳中传天下将有权在授权范围内代表本人签署独家购买权协议（本人应要求作为协议方）中约定的转让协议，如期履行本人作为协议一方的与本授权委托书同日签署的股权质押协议和独家购买权协议，该权利的行使将不对本授权形成任何限制。Without limiting the generality of the powers granted hereunder, WFOE shall have the power and authority under this Power of Attorney to execute theTransfer Contracts stipulated in Exclusive Option Agreement, to which I am required to be a party, on behalf of myself, and to effect the terms of the Share PledgeAgreement and Exclusive Option Agreement, both dated the date hereof, to which I am a party.深圳中传天下就相关股权的一切行为均视为本人的行为，签署的一切文件均视为本人签署，本人会予以承认。All the actions associated with Shares conducted by WFOE shall be deemed as my own actions, and all the documents related to Shares executed by WFOEshall be deemed to be executed by me. I hereby acknowledge and ratify those actions and/or documents by the WFOE.深圳中传天下有转委托权，可以就上述事项的办理自行再委托其他人或单位而不必事先通知本人或获得本人的同意。WFOE is entitled to reauthorize or assign its rights related to the aforesaid matters to any other person or entity at its own discretion and without giving priornotice to me or obtaining my consent.在本人为中传视讯的股东期间，本授权委托书不可撤销并持续有效，自授权委托书签署之日起算。This Power of Attorney is coupled with an interest and shall be irrevocable and continuously valid from the date of execution of this Power of Attorney, solong as I am a shareholder of Mobile Vision.本授权委托书期间，本人特此放弃已经通过本授权委托书授权给深圳中传天下的与相关股权有关的所有权利，不再自行行使该等权利。During the term of this Power of Attorney, I hereby waive all the rights associated with Shares, which have been authorized to WFOE through this Power ofAttorney, and shall not exercise such rights by myself.本授权委托书以中文和英文书就，中英文版本如有冲突，应以中文版为准。This Power of Attorney is written in Chinese and English; in case there is any conflict between the Chinese version and the English version, the Chineseversion shall prevail.王平Wang Ping签署：By:日期：年月日Date:2EX4.22 8 f20f2017ex422_luokung.htm POWER OF ATTORNEY BY DONGLAI LIU, DATED AUGUST 31, 2015Exhibit 4.22授权委托书Power of Attorney本人刘东来，持有中华人民共和国身份证（号码：***************912），通讯地址为: ，系拥有北京中传视讯科技有限公司（“中传视讯”）4.1035%股权（“相关股权”）的股东，就相关股权，特此不可撤销地授权中传天下信息科技（深圳）有限公司（“深圳中传天下”）在本授权委托书的有效期内行使如下权利：The undersigned, Liu Donglai, a person with the PRC identification card number of ***************912, with address at: , and a holder of 4.1035% of theentire registered capital (“Shares”) in Beijing Mobile Vision Technology Co., Ltd. (“Mobile Vision”), hereby irrevocably authorize Zhongchuan Tianxia InformationTechnology (Shenzhen) Co., Ltd. (“WFOE”) to exercise the following rights relating to Shares during the term of this Power of Attorney:授权深圳中传天下作为本人唯一的排他的代理人就有关相关股权的事宜全权代表本人行使包括但不限于如下的权利：1）参加中传视讯的股东会；2）行使按照法律和中传视讯章程规定本人所享有的全部股东权利和股东表决权，包括但不限于出售或转让或质押或处置相关股权的全部或任何一部分；以及3）作为本人的授权代表指定和任命中传视讯的法定代表人、董事和/或执行董事、监事、经理以及其他高级管理人员等。但中传视讯利用该等授权做出违反中华人民共和国法律的决定无效。WFOE is hereby authorized to act on behalf of myself as my exclusive agent and attorney with respect to all matters concerning My Shareholding, includingwithout limitation: 1) attending shareholders’ meetings of Mobile Vision; 2) exercising all the shareholder’s rights and shareholder’s voting rights I am entitled tounder the laws of China and Articles of Association of Mobile Vision, including but not limited to the sale or transfer or pledge or disposition of My Shareholding inpart or in whole; and 3) designating and appointing on behalf of myself the legal representative, director and/or executive director, supervisor, manager and othersenior management members of Mobile Vision. However, the decision made by Mobile Vision taking advantage of the power of attorney which is against the PRClaws shall be null and void.1深圳中传天下将有权在授权范围内代表本人签署独家购买权协议（本人应要求作为协议方）中约定的转让协议，如期履行本人作为协议一方的与本授权委托书同日签署的股权质押协议和独家购买权协议，该权利的行使将不对本授权形成任何限制。Without limiting the generality of the powers granted hereunder, WFOE shall have the power and authority under this Power of Attorney to execute theTransfer Contracts stipulated in Exclusive Option Agreement, to which I am required to be a party, on behalf of myself, and to effect the terms of the Share PledgeAgreement and Exclusive Option Agreement, both dated the date hereof, to which I am a party.深圳中传天下就相关股权的一切行为均视为本人的行为，签署的一切文件均视为本人签署，本人会予以承认。All the actions associated with Shares conducted by WFOE shall be deemed as my own actions, and all the documents related to Shares executed by WFOEshall be deemed to be executed by me. I hereby acknowledge and ratify those actions and/or documents by the WFOE.深圳中传天下有转委托权，可以就上述事项的办理自行再委托其他人或单位而不必事先通知本人或获得本人的同意。WFOE is entitled to reauthorize or assign its rights related to the aforesaid matters to any other person or entity at its own discretion and without giving priornotice to me or obtaining my consent.在本人为中传视讯的股东期间，本授权委托书不可撤销并持续有效，自授权委托书签署之日起算。This Power of Attorney is coupled with an interest and shall be irrevocable and continuously valid from the date of execution of this Power of Attorney, solong as I am a shareholder of Mobile Vision.本授权委托书期间，本人特此放弃已经通过本授权委托书授权给深圳中传天下的与相关股权有关的所有权利，不再自行行使该等权利。During the term of this Power of Attorney, I hereby waive all the rights associated with Shares, which have been authorized to WFOE through this Power ofAttorney, and shall not exercise such rights by myself.本授权委托书以中文和英文书就，中英文版本如有冲突，应以中文版为准。This Power of Attorney is written in Chinese and English; in case there is any conflict between the Chinese version and the English version, the Chineseversion shall prevail.刘东来Liu Donglai签署：By:日期：年月日Date:2EX4.23 9 f20f2017ex423_luokung.htm POWER OF ATTORNEY BY XUESONG SONG, DATED AUGUST 31, 2015Exhibit 4.23授权委托书Power of Attorney本人宋雪松，持有中华人民共和国身份证（号码：***************417），通讯地址为，系拥有北京中传视讯科技有限公司（“中传视讯”）61.8245%股权（“相关股权”）的股东，就相关股权，特此不可撤销地授权中传天下信息科技（深圳）有限公司（“深圳中传天下”）在本授权委托书的有效期内行使如下权利：The undersigned, Song Xuesong, a person with the PRC identification card number of ***************417, with address at , and a holder of 61.8245% ofthe entire registered capital (“Shares”) in Beijing Mobile Vision Technology Co., Ltd. (“Mobile Vision”), hereby irrevocably authorize Zhongchuan TianxiaInformation Technology (Shenzhen) Co., Ltd. (“WFOE”) to exercise the following rights relating to Shares during the term of this Power of Attorney:授权深圳中传天下作为本人唯一的排他的代理人就有关相关股权的事宜全权代表本人行使包括但不限于如下的权利：1）参加中传视讯的股东会；2）行使按照法律和中传视讯章程规定本人所享有的全部股东权利和股东表决权，包括但不限于出售或转让或质押或处置相关股权的全部或任何一部分；以及3）作为本人的授权代表指定和任命中传视讯的法定代表人、董事和/或执行董事、监事、经理以及其他高级管理人员等。但中传视讯利用该等授权做出违反中华人民共和国法律的决定无效。WFOE is hereby authorized to act on behalf of myself as my exclusive agent and attorney with respect to all matters concerning My Shareholding, includingwithout limitation: 1) attending shareholders’ meetings of Mobile Vision; 2) exercising all the shareholder’s rights and shareholder’s voting rights I am entitled tounder the laws of China and Articles of Association of Mobile Vision, including but not limited to the sale or transfer or pledge or disposition of My Shareholding inpart or in whole; and 3) designating and appointing on behalf of myself the legal representative, director and/or executive director, supervisor, manager and othersenior management members of Mobile Vision. However, the decision made by Mobile Vision taking advantage of the power of attorney which is against the PRClaws shall be null and void.1深圳中传天下将有权在授权范围内代表本人签署独家购买权协议（本人应要求作为协议方）中约定的转让协议，如期履行本人作为协议一方的与本授权委托书同日签署的股权质押协议和独家购买权协议，该权利的行使将不对本授权形成任何限制。Without limiting the generality of the powers granted hereunder, WFOE shall have the power and authority under this Power of Attorney to execute theTransfer Contracts stipulated in Exclusive Option Agreement, to which I am required to be a party, on behalf of myself, and to effect the terms of the Share PledgeAgreement and Exclusive Option Agreement, both dated the date hereof, to which I am a party.深圳中传天下就相关股权的一切行为均视为本人的行为，签署的一切文件均视为本人签署，本人会予以承认。All the actions associated with Shares conducted by WFOE shall be deemed as my own actions, and all the documents related to Shares executed by WFOEshall be deemed to be executed by me. I hereby acknowledge and ratify those actions and/or documents by the WFOE.深圳中传天下有转委托权，可以就上述事项的办理自行再委托其他人或单位而不必事先通知本人或获得本人的同意。WFOE is entitled to reauthorize or assign its rights related to the aforesaid matters to any other person or entity at its own discretion and without giving priornotice to me or obtaining my consent.在本人为中传视讯的股东期间，本授权委托书不可撤销并持续有效，自授权委托书签署之日起算。This Power of Attorney is coupled with an interest and shall be irrevocable and continuously valid from the date of execution of this Power of Attorney, solong as I am a shareholder of Mobile Vision.本授权委托书期间，本人特此放弃已经通过本授权委托书授权给深圳中传天下的与相关股权有关的所有权利，不再自行行使该等权利。During the term of this Power of Attorney, I hereby waive all the rights associated with Shares, which have been authorized to WFOE through this Power ofAttorney, and shall not exercise such rights by myself.本授权委托书以中文和英文书就，中英文版本如有冲突，应以中文版为准。This Power of Attorney is written in Chinese and English; in case there is any conflict between the Chinese version and the English version, the Chineseversion shall prevail.宋雪松Song Xuesong签署：By:日期：年月日Date:2EX8.1 10 f20f2017ex81_luokung.htm LIST OF SUBSIDIARIES AND CONSOLIDATED VARIABLE INTEREST ENTITIESExhibit 8.1List of Subsidiaries of the CompanyName of EntityJurisdiction of Incorporation/OrganizationLK Technology Ltd.British Virgin IslandsTopsky Infotech Holdings Pte Ltd.SingaporeSuperengine Holdings LimitedBritish Virgin IslandsMMB LimitedHong KongMobile Media (China Limited)Hong KongZhong Chuan Tian Xia Information and Technology (Beijing) LimitedBeijing, PRCZhong Chuan Xia Information and Technology (Shenzhen) LimitedShenzhen, PRCBeijing Zhong Chuan Shi Xun Technology Limited (VIE Entity)Beijing, PRCJiangsu Zhong Chuan Rui You Information and Technology Limited (VIE Entity)Jiangsu, PRCHuoerguosi Luokuang Information and Technology Limited (VIE Entity)Huoerguosi, PRCShenzhen Jiu Zhou Shi Dai Digital Technology LimitedShenzhen, PRCEX10.1 11 f20f2017ex101_luokung.htm EMPLOYMENT AGREEMENT, DATED AUGUST 19, 2018, BETWEEN LUOKUNG TECHNOLOGY CORP. AND XUESONGSONGExhibit 10.1EMPLOYMENT AGREEMENTThis EMPLOYMENT AGREEMENT (the “Agreement”) is made and entered into as of this 19 day of August, 2018 (the “Effective Date”), by and between LuokungTechnology Corp., a British Virgin Islands corporation (the “Company”) and Xuesong Song (the “Executive”), a Chinese citizen.WITNESSETH:WHEREAS, the parties desire to enter into this Agreement setting forth the terms and conditions of the employment relationship between the Executiveand the Company.NOW, THEREFORE, in consideration of the foregoing premises and the mutual covenants and agreements contained herein, the parties hereto agree asfollows:1. EMPLOYMENT.1.1 Agreement to Employ. The Company hereby agrees to employ Executive, and Executive hereby agrees to serve, subject to the provisions of thisAgreement, as an officer and employee of the Company.1.2 Duties and Schedule. Executive shall serve as the Company’s Chief Executive Officer (“CEO”). The responsibilities of the Executive shall be subject tothe bylaws of the Company and determined by the Board of Directors of the Company (the “Board”). The Executive shall report directly to the Board and shall havesuch responsibilities as designated by the Board of the Company to the extent that such responsibilities are not inconsistent with all applicable laws, regulationsand rules. Executive shall devote his best efforts and all of his business time to his position with the Company during the Term.2. TERM OF EMPLOYMENT. Unless Executive’s employment shall sooner terminate pursuant to Section 4, the Company shall employ Executive for a fouryear term commencing on the Effective Date (the “Term”), which Term shall be renewable upon mutual agreement of the Company and the Executive, as approved bythe Board.3. COMPENSATION.3.1 Salary. Executive’s salary during the Term shall be $Nil.3.2 Bonus. At the sole discretion of the Board, or any committee duly designated by the Board and authorized to act thereto, the Executive shall be eligiblefor an annual cash bonus.3.3 Vacation. Executive shall be entitled to 8 days of paid vacation per year. In the event that Executive remains employed by the Company for 3 years ormore, Executive shall be entitled to 12 days of paid vacation.3.4 Business Expenses. Executive shall be reimbursed by the Company for all ordinary and necessary expenses incurred by Executive; provided that theyare incurred and approved in writing in accordance with the Company’s expense policy.3.5 Benefits. During the Term, Executive shall be allowed to participate, on the same basis generally as other employees of the Company, in all generalemployee benefit plans and programs, including improvements or modifications of the same, which may exist as of the Effective Date or thereafter and which aremade available by the Company to all or substantially all of its employees. Such benefits, plans, and programs may include, without limitation, any health, and dentalinsurance or 401K programs, if and when instituted. Any benefit plan currently existing or instituted by the Company after the Effective Date may be altered, changeor discontinued by the Company at its sole discretion and at any time without obligation of any nature to Executive. Except as specifically provided herein, nothingin this Agreement is to be construed or interpreted to increase or alter in any way the rights, participation, coverage, or benefits under such benefit plans orprograms to other than those provided to other employees pursuant to the terms and conditions of such benefit plans and programs. 14. TERMINATION.4.1 Death. This Agreement shall terminate immediately upon the death of Executive, and Executive’s estate or Executive’s legal representative, as the casemay be, shall be entitled to Executive’s accrued and unpaid Salary as of the date of Executive’s death, plus all other compensation and benefits that were vestedthrough the date of Executive’s death.4.2 Disability. In the event of Executive’s Disability, this Agreement shall terminate and Executive shall be entitled to (a) accrued and unpaid Salary andvacation through the first date that a Disability is determined; and (b) all other compensation and benefits that were vested through the first date that a Disabilityhas been determined. “Disability” means the good faith determination of the Board that Executive has become so physically or mentally incapacitated or disabled asto be unable to satisfactorily perform his duties hereunder for a period of ninety (90) consecutive calendar days or for one hundred twenty (120) days in any threehundred sixty (360) day period, such determination based upon a certificate as to such physical or mental disability issued by a licensed physician and/orpsychiatrist (as the case may be) mutually agreed upon by Executive and the Company.4.3 Termination by Company for Cause. The Company may terminate the Executive for Cause and such termination shall take effect upon the receipt byExecutive of the Notice of Termination. Upon the effective date of the termination for Cause, Executive shall be solely entitled to accrued and unpaid Salary throughsuch effective date. “Cause” means: (i) engaging in any act, omission or misconduct that is injurious to the Company or an affiliate; (ii) gross negligence or willfulmisconduct in connection with the performance of duties; (iii) conviction of a criminal offense (other than minor traffic offenses); (iv) fraud, embezzlement ormisappropriation of funds or property of the Company or an affiliate; (v) material breach of any term of any employment or other services, confidentiality, intellectualproperty or noncompetition agreements, if any, between the Executive and the Company or an affiliate; (vi) the entry of an order duly issued by any regulatoryagency (including federal, state and local regulatory agencies and selfregulatory bodies) having jurisdiction over the Company or an affiliate requiring the removalof the Executive from any office held with the Company or prohibiting the Executive from participating in the business or affairs of the Company or any affiliate; or(vii) the revocation or threatened revocation of any of the Company’s or an affiliate’s government licenses, permits or approvals, which is primarily due to theExecutive’s action or inaction and such revocation or threatened revocation would be alleviated or mitigated in any material respect by the termination of theExecutive’s employment or services with the Company or an affiliate. 4.4 Voluntary Termination by Executive. The Executive may voluntarily terminate his employment for any reason and such termination shall take effect 30days after the receipt by Company of the Notice of Termination. Upon the effective date of such termination, Executive shall be entitled to (a) accrued and unpaidSalary and vacation through such termination date; and (b) all other compensation and benefits that were vested through such termination date. In the eventExecutive is terminated without notice, it shall be deemed a termination by the Company for Cause.4.5 Notice of Termination. Any termination of the employment by the Company or the Executive shall be communicated by a notice in accordance withSection 8.4 of this Agreement (the “Notice of Termination”). Such notice shall (a) indicate the specific termination provision in this Agreement relied upon and (b) ifthe termination is for Cause, the date on which the Executive’s employment is to be terminated.4.6 Severance. The Executive shall not be entitled to severance payments upon any termination provided in Section 4 herein.5. EMPLOYEE’S REPRESENTATION. The Executive represents and warrants to the Company that: (a) he is subject to no contractual, fiduciary or otherobligation which may affect the performance of his duties under this Agreement; (b) he has terminated, in accordance with their terms, any contractual obligationwhich may affect his performance under this Agreement; and (c) his employment with the Company will not require him to use or disclose proprietary or confidentialinformation of any other person or entity.26. CONFIDENTIAL INFORMATION Except as permitted or directed by the Board of Directors of the Company in writing, during the time the Executive isemployed by the Company or at any time thereafter, the Executive shall not use for his personal purposes nor divulge, furnish, or make accessible to anyone or usein any way (other than in the ordinary course of the business of the Company) any confidential or secret information or knowledge of the Company, whetherdeveloped by himself or by others. Such confidential and/or secret information encompassed by this Section 6 includes, but is not limited to, the Company’scustomer and supplier lists, business plans, software, systems, and financial, marketing, and personnel information. The Executive agrees to refrain from any acts oromissions that would reduce the value of any confidential or secret knowledge or information to the Company, both during his employment hereunder and at anytime after the termination of his employment. The Executive’s obligations of confidentiality under this Section 6 shall not apply to any knowledge or information thatis now published publicly or that subsequently becomes generally publicly known, other than as a direct or indirect result of a breach of this Agreement by theExecutive.7. NONCOMPETITION: NONSOLICITATION; INVENTIONS.7.1 NonCompetition. During the employment of the Executive under this Agreement and for a period of six (6) months after termination of suchemployment, the Executive shall not at any time compete on his own behalf, or on behalf of any other person or entity, with the Company or any of its affiliateswithin all territories in which the Company does business with respect to the business of the Company or any of its affiliates as such business shall be conductedon the date hereof or during the employment of the Executive under this Agreement. The ownership by the Executive of not more than 5% of a corporation,partnership or other enterprise shall not constitute a violation hereof.7.2 NonSolicitation. During the employment of the Executive under this Agreement and thereafter Executive shall not at any time (i) solicit or induce, onhis own behalf or on behalf of any other person or entity, any employee of the Company or any of its affiliates to leave the employ of the Company or any of itsaffiliates; or (ii) solicit or induce, on his own behalf or on behalf of any other person or entity, any customer or Prospective Customer of the Company or any of theirrespective affiliates to reduce its business with the Company or any of its affiliates. For the purposes of this Agreement, “Prospective Customer” shall mean anyindividual, corporation, trust or other business entity which has either (a) entered into a nondisclosure agreement with the Company or any Company subsidiary oraffiliate or (b) has within the preceding 12 months received a currently pending and not rejected written proposal in reasonable detail from the Company or any ofthe Company’s subsidiary or affiliate.7.3 Inventions and Patents. The Company shall be entitled to the sole benefit and exclusive ownership of any inventions or improvements in products,processes, or other things that may be made or discovered by Executive while he is in the service of the Company, and all patents for the same. During the Term,Executive shall do all acts necessary or required by the Company to give effect to this section and, following the Term, Executive shall do all acts reasonablynecessary or required by the Company to give effect to this section. In all cases, the Company shall pay all costs and fees associated with such acts by Executive.7.4 Return of Property. The Executive agrees that all property in the Executive’s possession that he obtains or is assigned in the course of his employmentwith the Company, including, without limitation, all documents, reports, manuals, memoranda, customer lists, credit cards, keys, access cards, and all other propertyrelating in any way to the business of the Company, is the exclusive property of the Company, even if the Executive authored, created, or assisted in authoring orcreating such property. The Executive shall return to the Company all such property immediately upon termination of employment or at such earlier time as theCompany may request.7.5Court Ordered Revisions.If any portion of this Section 7 is found by a court of competent jurisdiction to be invalid or unenforceable, but would be validand enforceable if modified, this Section 7 shall apply with such modifications necessary to make this Section 7 valid and enforceable. Any portion of this Section 7not required to be so modified shall remain in full force and effect and not be affected thereby.7.6 Specific Performance. The Executive acknowledges that the remedy at law for any breach of any of the provisions of Section 7 will be inadequate, andthat the Company shall be entitled, in addition to any remedy at law or in equity, to preliminary and permanent injunctive relief and specific performance.38. MISCELLANEOUS.8.1 Indemnification. The Company and each of its subsidiaries shall, to the maximum extent provided under applicable law, indemnify and hold Executiveharmless from and against any expenses, including reasonable attorney’s fees, judgments, fines, settlements and other legally permissible amounts (“Losses”),incurred in connection with any proceeding arising out of, or related to, Executive’s employment by the Company, other than any such Losses incurred as a result ofExecutive’s negligence or willful misconduct. The Company shall, or shall cause a subsidiary thereof to, advance to Executive any expenses, including attorney’sfees and costs of settlement, incurred in defending any such proceeding to the maximum extent permitted by applicable law. Such costs and expenses incurred byExecutive in defense of any such proceeding shall be paid by the Company or applicable subsidiary in advance of the final disposition of such proceeding promptlyupon receipt by the Company of (a) written request for payment; (b) appropriate documentation evidencing the incurrence, amount and nature of the costs andexpenses for which payment is being sought; and (c) an undertaking adequate under applicable law made by or on behalf of Executive to repay the amounts soadvanced if it shall ultimately be determined pursuant to any nonappealable judgment or settlement that Executive is not entitled to be indemnified by the Companyor any subsidiary thereof. The Company will provide Executive with coverage under all directors and officers liability insurance policies that it has in effect duringthe Term, with no deductible to Executive. 8.2 Applicable Law. Except as may be otherwise provided herein, this Agreement shall be governed by and construed in accordance with the laws ofChina, applied without reference to principles of conflict of laws. Any dispute arising from or in connection with this Agreement shall be submitted to ShanghaiInternational Arbitration Center (the “Center”) for arbitration under the then effective rules of the Center. The arbitration award shall be the sole, binding, exclusiveand final remedy for resolving any dispute between the parties.8.3 Amendments. This Agreement may not be amended or modified otherwise than by a written agreement executed by the parties hereto or their respectivesuccessors or legal representatives.8.4 Notices. All notices and other communications hereunder shall be in writing and shall be given by handdelivery to the other party, by an internationalmail courier, or by registered or certified mail, return receipt requested, postage prepaid, addressed as follows:If to the Executive:Xuesong Song________________________________________________If to the Company:______________________________________Or to such other address as either party shall have furnished to the other in writing in accordance herewith. Notices and communications shall be effective whendelivered to the addressee.8.5 Withholding. The Company may withhold from any amounts payable under the Agreement, such federal, state and local income, unemployment, socialsecurity and similar employment related taxes and similar employment related withholdings as shall be required to be withheld pursuant to any applicable law orregulation.8.6 Severability. The invalidity or unenforceability of any provision of this Agreement shall not affect the validity or enforceability of any other provision ofthis Agreement and any such provision which is not valid or enforceable in whole shall be enforced to the maximum extent permitted by law.8.7 Captions. The captions of this Agreement are not part of the provisions and shall have no force or effect.48.8 Entire Agreement. This Agreement contains the entire agreement among the parties concerning the subject matter hereof and supersedes all prioragreements, understandings, discussions, negotiations and undertakings, whether written or oral, between the parties with respect thereto.8.9 Survival. The respective rights and obligations of the parties hereunder shall survive any termination of this Agreement or the Executive’s employmenthereunder to the extent necessary to the intended preservation of such rights and obligations.8.10 Waiver. Either Party's failure to enforce any provision or provisions of this Agreement shall not in any way be construed as a waiver of any suchprovision or provisions, or prevent that party thereafter from enforcing each and every other provision of this Agreement.8.11 Successors. This Agreement is personal to Executive and, without the prior express written consent of the Company, shall not be assignable byExecutive. This Agreement shall inure to the benefit of and be enforceable by Executive’s estate, heirs, beneficiaries, and/or legal representatives. This Agreementshall inure to the benefit of and be binding upon the Company and its successors and assigns.8.12 Joint Efforts/Counterparts. Preparation of this Agreement shall be deemed to be the joint effort of the parties hereto and shall not be construed moreseverely against any party. This Agreement may be signed in two or more counterparts, each of which shall be deemed an original and all of which together shallconstitute one and the same instrument.8.13 Representation by Counsel. Each Party hereby represents that it has had the opportunity to be represented by legal counsel of its choice inconnection with the negotiation and execution of this Agreement.IN WITNESS WHEREOF, the parties have executed this Agreement as of the day and year first above written.EXECUTIVE:LUOKUNG TECHNOLOGY CORP./s/ Xuesong Song/s/ Jie YuXuesong SongJie YuChief Financial Officer5EX10.2 12 f20f2017ex102_luokung.htm EMPLOYMENT AGREEMENT, DATED AUGUST 19, 2018, BY AND BETWEEN LUOKUNG TECHNOLOGY CORP. AND JIEYUExhibit 10.2EMPLOYMENT AGREEMENTThis EMPLOYMENT AGREEMENT (the “Agreement”) is made and entered into as of this 19 day of August, 2018 (the “Effective Date”), by and between LuokungTechnology Corp., a British Virgin Islands corporation (the “Company”) and Jie (Jay) Yu (the “Executive”), a Chinese citizen.WITNESSETH:WHEREAS, the parties desire to enter into this Agreement setting forth the terms and conditions of the employment relationship between the Executiveand the Company.NOW, THEREFORE, in consideration of the foregoing premises and the mutual covenants and agreements contained herein, the parties hereto agree asfollows:1. EMPLOYMENT.1.1 Agreement to Employ. The Company hereby agrees to employ Executive, and Executive hereby agrees to serve, subject to the provisions of thisAgreement, as an officer and employee of the Company.1.2 Duties and Schedule. Executive shall serve as the Company’s Chief Financial Officer, and be the Principal Financial Officer and Principal AccountingOfficer of the Company and responsible for all financial matters and management of the Company. The Executive shall report directly to the Company’s ChiefExecutive Officer and Board of Directors (the “Board”) and shall have such responsibilities as designated by the Chief Executive Officer or Board to the extent thatsuch responsibilities are not inconsistent with all applicable laws, regulations and rules. Executive shall devote his best efforts and all of his business time to hisposition with the Company during the Term.2. TERM OF EMPLOYMENT. Unless Executive’s employment shall sooner terminate pursuant to Section 4, the Company shall employ Executive for a fouryear term commencing on the Effective Date (the “Term”), which Term shall be renewable upon mutual agreement of the Company and the Executive, as approved bythe Board.3. COMPENSATION.3.1 Salary. Executive’s salary during the Term shall be RMB700,000 per year (the “Salary”), payable monthly.3.2 Bonus. At the sole discretion of the Board, or any committee duly designated by the Board and authorized to act thereto, the Executive shall be eligiblefor an annual cash bonus.3.3 Vacation. Executive shall be entitled to 8 days of paid vacation per year. In the event that Executive remains employed by the Company for 3 years ormore, Executive shall be entitled to 12 days of paid vacation.3.4 Business Expenses. Executive shall be reimbursed by the Company for all ordinary and necessary expenses incurred by Executive; provided that theyare incurred and approved in writing in accordance with the Company’s expense policy.3.5 Benefits. During the Term, Executive shall be allowed to participate, on the same basis generally as other employees of the Company, in all generalemployee benefit plans and programs, including improvements or modifications of the same, which may exist as of the Effective Date or thereafter and which aremade available by the Company to all or substantially all of its employees. Such benefits, plans, and programs may include, without limitation, any health, and dentalinsurance or 401K programs, if and when instituted. Any benefit plan currently existing or instituted by the Company after the Effective Date may be altered, changeor discontinued by the Company at its sole discretion and at any time without obligation of any nature to Executive. Except as specifically provided herein, nothingin this Agreement is to be construed or interpreted to increase or alter in any way the rights, participation, coverage, or benefits under such benefit plans orprograms to other than those provided to other employees pursuant to the terms and conditions of such benefit plans and programs. 14. TERMINATION.4.1 Death. This Agreement shall terminate immediately upon the death of Executive, and Executive’s estate or Executive’s legal representative, as the casemay be, shall be entitled to Executive’s accrued and unpaid Salary as of the date of Executive’s death, plus all other compensation and benefits that were vestedthrough the date of Executive’s death.4.2 Disability. In the event of Executive’s Disability, this Agreement shall terminate and Executive shall be entitled to (a) accrued and unpaid Salary andvacation through the first date that a Disability is determined; and (b) all other compensation and benefits that were vested through the first date that a Disabilityhas been determined. “Disability” means the good faith determination of the Board that Executive has become so physically or mentally incapacitated or disabled asto be unable to satisfactorily perform his duties hereunder for a period of ninety (90) consecutive calendar days or for one hundred twenty (120) days in any threehundred sixty (360) day period, such determination based upon a certificate as to such physical or mental disability issued by a licensed physician and/orpsychiatrist (as the case may be) mutually agreed upon by Executive and the Company.4.3 Termination by Company for Cause. The Company may terminate the Executive for Cause and such termination shall take effect upon the receipt byExecutive of the Notice of Termination. Upon the effective date of the termination for Cause, Executive shall be solely entitled to accrued and unpaid Salary throughsuch effective date. “Cause” means: (i) engaging in any act, omission or misconduct that is injurious to the Company or an affiliate; (ii) gross negligence or willfulmisconduct in connection with the performance of duties; (iii) conviction of a criminal offense (other than minor traffic offenses); (iv) fraud, embezzlement ormisappropriation of funds or property of the Company or an affiliate; (v) material breach of any term of any employment or other services, confidentiality, intellectualproperty or noncompetition agreements, if any, between the Executive and the Company or an affiliate; (vi) the entry of an order duly issued by any regulatoryagency (including federal, state and local regulatory agencies and selfregulatory bodies) having jurisdiction over the Company or an affiliate requiring the removalof the Executive from any office held with the Company or prohibiting the Executive from participating in the business or affairs of the Company or any affiliate; or(vii) the revocation or threatened revocation of any of the Company’s or an affiliate’s government licenses, permits or approvals, which is primarily due to theExecutive’s action or inaction and such revocation or threatened revocation would be alleviated or mitigated in any material respect by the termination of theExecutive’s employment or services with the Company or an affiliate. 4.4 Voluntary Termination by Executive. The Executive may voluntarily terminate his employment for any reason and such termination shall take effect 30days after the receipt by Company of the Notice of Termination. Upon the effective date of such termination, Executive shall be entitled to (a) accrued and unpaidSalary and vacation through such termination date; and (b) all other compensation and benefits that were vested through such termination date. In the eventExecutive is terminated without notice, it shall be deemed a termination by the Company for Cause.4.5 Notice of Termination. Any termination of the employment by the Company or the Executive shall be communicated by a notice in accordance withSection 8.4 of this Agreement (the “Notice of Termination”). Such notice shall (a) indicate the specific termination provision in this Agreement relied upon and (b) ifthe termination is for Cause, the date on which the Executive’s employment is to be terminated.4.6 Severance. The Executive shall not be entitled to severance payments upon any termination provided in Section 4 herein.5. EMPLOYEE’S REPRESENTATION. The Executive represents and warrants to the Company that: (a) he is subject to no contractual, fiduciary or otherobligation which may affect the performance of his duties under this Agreement; (b) he has terminated, in accordance with their terms, any contractual obligationwhich may affect his performance under this Agreement; and (c) his employment with the Company will not require him to use or disclose proprietary or confidentialinformation of any other person or entity.26. CONFIDENTIAL INFORMATION Except as permitted or directed by the Board of Directors of the Company in writing, during the time the Executive isemployed by the Company or at any time thereafter, the Executive shall not use for his personal purposes nor divulge, furnish, or make accessible to anyone or usein any way (other than in the ordinary course of the business of the Company) any confidential or secret information or knowledge of the Company, whetherdeveloped by himself or by others. Such confidential and/or secret information encompassed by this Section 6 includes, but is not limited to, the Company’scustomer and supplier lists, business plans, software, systems, and financial, marketing, and personnel information. The Executive agrees to refrain from any acts oromissions that would reduce the value of any confidential or secret knowledge or information to the Company, both during his employment hereunder and at anytime after the termination of his employment. The Executive’s obligations of confidentiality under this Section 6 shall not apply to any knowledge or information thatis now published publicly or that subsequently becomes generally publicly known, other than as a direct or indirect result of a breach of this Agreement by theExecutive.7. NONCOMPETITION: NONSOLICITATION; INVENTIONS.7.1 NonCompetition. During the employment of the Executive under this Agreement and for a period of six (6) months after termination of suchemployment, the Executive shall not at any time compete on his own behalf, or on behalf of any other person or entity, with the Company or any of its affiliateswithin all territories in which the Company does business with respect to the business of the Company or any of its affiliates as such business shall be conductedon the date hereof or during the employment of the Executive under this Agreement. The ownership by the Executive of not more than 5% of a corporation,partnership or other enterprise shall not constitute a violation hereof.7.2 NonSolicitation. During the employment of the Executive under this Agreement and thereafter Executive shall not at any time (i) solicit or induce, onhis own behalf or on behalf of any other person or entity, any employee of the Company or any of its affiliates to leave the employ of the Company or any of itsaffiliates; or (ii) solicit or induce, on his own behalf or on behalf of any other person or entity, any customer or Prospective Customer of the Company or any of theirrespective affiliates to reduce its business with the Company or any of its affiliates. For the purposes of this Agreement, “Prospective Customer” shall mean anyindividual, corporation, trust or other business entity which has either (a) entered into a nondisclosure agreement with the Company or any Company subsidiary oraffiliate or (b) has within the preceding 12 months received a currently pending and not rejected written proposal in reasonable detail from the Company or any ofthe Company’s subsidiary or affiliate.7.3 Inventions and Patents. The Company shall be entitled to the sole benefit and exclusive ownership of any inventions or improvements in products,processes, or other things that may be made or discovered by Executive while he is in the service of the Company, and all patents for the same. During the Term,Executive shall do all acts necessary or required by the Company to give effect to this section and, following the Term, Executive shall do all acts reasonablynecessary or required by the Company to give effect to this section. In all cases, the Company shall pay all costs and fees associated with such acts by Executive.7.4 Return of Property. The Executive agrees that all property in the Executive’s possession that he obtains or is assigned in the course of his employmentwith the Company, including, without limitation, all documents, reports, manuals, memoranda, customer lists, credit cards, keys, access cards, and all other propertyrelating in any way to the business of the Company, is the exclusive property of the Company, even if the Executive authored, created, or assisted in authoring orcreating such property. The Executive shall return to the Company all such property immediately upon termination of employment or at such earlier time as theCompany may request.7.5Court Ordered Revisions.If any portion of this Section 7 is found by a court of competent jurisdiction to be invalid or unenforceable, but would be validand enforceable if modified, this Section 7 shall apply with such modifications necessary to make this Section 7 valid and enforceable. Any portion of this Section 7not required to be so modified shall remain in full force and effect and not be affected thereby.7.6 Specific Performance. The Executive acknowledges that the remedy at law for any breach of any of the provisions of Section 7 will be inadequate, andthat the Company shall be entitled, in addition to any remedy at law or in equity, to preliminary and permanent injunctive relief and specific performance.38. MISCELLANEOUS.8.1 Indemnification. The Company and each of its subsidiaries shall, to the maximum extent provided under applicable law, indemnify and hold Executiveharmless from and against any expenses, including reasonable attorney’s fees, judgments, fines, settlements and other legally permissible amounts (“Losses”),incurred in connection with any proceeding arising out of, or related to, Executive’s employment by the Company, other than any such Losses incurred as a result ofExecutive’s negligence or willful misconduct. The Company shall, or shall cause a subsidiary thereof to, advance to Executive any expenses, including attorney’sfees and costs of settlement, incurred in defending any such proceeding to the maximum extent permitted by applicable law. Such costs and expenses incurred byExecutive in defense of any such proceeding shall be paid by the Company or applicable subsidiary in advance of the final disposition of such proceeding promptlyupon receipt by the Company of (a) written request for payment; (b) appropriate documentation evidencing the incurrence, amount and nature of the costs andexpenses for which payment is being sought; and (c) an undertaking adequate under applicable law made by or on behalf of Executive to repay the amounts soadvanced if it shall ultimately be determined pursuant to any nonappealable judgment or settlement that Executive is not entitled to be indemnified by the Companyor any subsidiary thereof. The Company will provide Executive with coverage under all directors and officers liability insurance policies that it has in effect duringthe Term, with no deductible to Executive. 8.2 Applicable Law. Except as may be otherwise provided herein, this Agreement shall be governed by and construed in accordance with the laws ofChina, applied without reference to principles of conflict of laws. Any dispute arising from or in connection with this Agreement shall be submitted to ShanghaiInternational Arbitration Center (the “Center”) for arbitration under the then effective rules of the Center. The arbitration award shall be the sole, binding, exclusiveand final remedy for resolving any dispute between the parties.8.3 Amendments. This Agreement may not be amended or modified otherwise than by a written agreement executed by the parties hereto or their respectivesuccessors or legal representatives.8.4 Notices. All notices and other communications hereunder shall be in writing and shall be given by handdelivery to the other party, by an internationalmail courier, or by registered or certified mail, return receipt requested, postage prepaid, addressed as follows:If to the Executive:Jie Yu________________________________________If to the Company:______________________________________Or to such other address as either party shall have furnished to the other in writing in accordance herewith. Notices and communications shall be effective whendelivered to the addressee.8.5 Withholding. The Company may withhold from any amounts payable under the Agreement, such federal, state and local income, unemployment, socialsecurity and similar employment related taxes and similar employment related withholdings as shall be required to be withheld pursuant to any applicable law orregulation.8.6 Severability. The invalidity or unenforceability of any provision of this Agreement shall not affect the validity or enforceability of any other provision ofthis Agreement and any such provision which is not valid or enforceable in whole shall be enforced to the maximum extent permitted by law.48.7 Captions. The captions of this Agreement are not part of the provisions and shall have no force or effect.8.8 Entire Agreement. This Agreement contains the entire agreement among the parties concerning the subject matter hereof and supersedes all prioragreements, understandings, discussions, negotiations and undertakings, whether written or oral, between the parties with respect thereto.8.9 Survival. The respective rights and obligations of the parties hereunder shall survive any termination of this Agreement or the Executive’s employmenthereunder to the extent necessary to the intended preservation of such rights and obligations.8.10 Waiver. Either Party's failure to enforce any provision or provisions of this Agreement shall not in any way be construed as a waiver of any suchprovision or provisions, or prevent that party thereafter from enforcing each and every other provision of this Agreement.8.11 Successors. This Agreement is personal to Executive and, without the prior express written consent of the Company, shall not be assignable byExecutive. This Agreement shall inure to the benefit of and be enforceable by Executive’s estate, heirs, beneficiaries, and/or legal representatives. This Agreementshall inure to the benefit of and be binding upon the Company and its successors and assigns.8.12 Joint Efforts/Counterparts. Preparation of this Agreement shall be deemed to be the joint effort of the parties hereto and shall not be construed moreseverely against any party. This Agreement may be signed in two or more counterparts, each of which shall be deemed an original and all of which together shallconstitute one and the same instrument.8.13 Representation by Counsel. Each Party hereby represents that it has had the opportunity to be represented by legal counsel of its choice inconnection with the negotiation and execution of this Agreement.IN WITNESS WHEREOF, the parties have executed this Agreement as of the day and year first above written.EXECUTIVE:LUOKUNG TECHNOLOGY CORP./s/ Jie Yu/s/ Xuesong SongJie YuXuesong SongChief Executive Officer5EX12.1 13 f20f2017ex121_luokung.htm CERTIFICATIONExhibit 12.1Certification by the Chief Executive OfficerPursuant to Section 302 of the SarbanesOxley Act of 2002I, Xuesong Song, the Chief Executive Officer of Luokung Technology Corp. (the “Company”), certify that:1.I have reviewed this transition report on Form 20F of the Company;2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statementsmade, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financialcondition, results of operations and cash flows of the Company as of, and for, the periods presented in this report;4.The Company’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange ActRules 13a15(e) and 15d15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a15(f) and 15d15(f)) for the Company andhave:(a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure thatmaterial information relating to the Company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during theperiod in which this report is being prepared;(b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, toprovide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance withgenerally accepted accounting principles;(c)Evaluated the effectiveness of the Company’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of thedisclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and(d)Disclosed in this report any change in the Company’s internal control over financial reporting that occurred during the period covered by the transition reportthat has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting; and5.The Company’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Company’sauditors and the audit committee of the Company’s board of directors (or persons performing the equivalent functions):(a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely toadversely affect the Company’s ability to record, process, summarize and report financial information; and(b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the Company’s internal control over financialreporting.Date: October 12, 2018By:/s/ Xuesong SongXuesong SongChief Executive Officer(principal executive officer)EX12.2 14 f20f2017ex122_luokung.htm CERTIFICATIONExhibit 12.2Certification by the Chief Financial OfficerPursuant to Section 302 of the SarbanesOxley Act of 2002I, Jie Yu, the Chief Financial Officer of Luokung Technology Corp. (the “Company”), certify that:1.I have reviewed this transition report on Form 20F of the Company;2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statementsmade, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financialcondition, results of operations and cash flows of the Company as of, and for, the periods presented in this report;4.The Company’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange ActRules 13a15(e) and 15d15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a15(f) and 15d15(f)) for the Company andhave:(a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure thatmaterial information relating to the Company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during theperiod in which this report is being prepared;(b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, toprovide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance withgenerally accepted accounting principles;(c)Evaluated the effectiveness of the Company’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of thedisclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and(d)Disclosed in this report any change in the Company’s internal control over financial reporting that occurred during the period covered by the transition reportthat has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting; and5.The Company’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Company’sauditors and the audit committee of the Company’s board of directors (or persons performing the equivalent functions):(a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely toadversely affect the Company’s ability to record, process, summarize and report financial information; and(b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the Company’s internal control over financialreporting.Date: October 12, 2018By:/s/ Jie YuJie YuChief Financial Officer(principal financial officer and principal accounting officer)EX13.1 15 f20f2017ex131_luokung.htm CERTIFICATIONExhibit 13.1Certification by the Chief Executive OfficerPursuant to Section 906 of the SarbanesOxley Act of 2002In connection with the Transition report on Form 20F of Luokung Technology Corp. (the “Company”) for the year ended December 31, 2017 as filed withthe Securities and Exchange Commission on the date hereof (the “Report”), I, Xuesong Song, Chairman and Chief Executive Officer of the Company, certify,pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the SarbanesOxley Act of 2002, that to my knowledge:(1)The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and(2)The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.Date: October 12, 2018By:/s/ Xuesong SongXuesong SongChief Executive Officer(principal executive officer)EX13.2 16 f20f2017ex132_luokung.htm CERTIFICATIONExhibit 13.2Certification by the Chief Financial OfficerPursuant to Section 906 of the SarbanesOxley Act of 2002In connection with the Transition report on Form 20F of Luokung Technology Corp. (the “Company”) for the year ended December 31, 2017 as filed withthe Securities and Exchange Commission on the date hereof (the “Report”), I, Jie Yu, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. Section1350, as adopted pursuant to Section 906 of the SarbanesOxley Act of 2002, that to my knowledge:(1)The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and(2)The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.Date: October 12, 2018By:/s/ Jie YuJie YuChief Financial Officer(principal financial officer and principal accounting officer)

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